Comerica Q3 Earnings Top Estimates on Higher NII, Provision Up

Comerica Incorporated CMA has reported third-quarter 2025 earnings per share (EPS) of $1.35, beating the Zacks Consensus Estimate of $1.28. In the prior-year quarter, the company reported an EPS of $1.37.Results have benefited from a rise in net interest income (NII) and deposit balance.  Yet, lower loan balances, a decline in non-interest income, a rise in expenses, and weak asset quality were concerning.Net income attributable to common shareholders was $175 million, which declined 1.1% from the year-ago quarter.Comerica's Revenues & Expenses RiseTotal quarterly revenues were $838 million, up 3.3% year over year. The top line missed the consensus estimate by 0.7%.Quarterly NII rose 7.5% on a year-over-year basis to $574 million. The net interest margin increased 29 basis points year over year to 3.09%.Total non-interest income was $264 million, down 4.7% on a year-over-year basis. Non-interest expenses totaled $589 million, up 4.8% year over year. The efficiency ratio was 70.23% compared with the prior-year quarter’s 68.8%. A rise in this ratio indicates declining profitability.CMA’s Loans Balance Decline & Deposit RiseAs of Sept. 30, 2025, total loans fell marginally on a sequential basis to $50.9 billion. Total deposits rose 4.3% from the previous quarter to $62.6 billion.Comerica's Credit Quality DeterioratesThe company recorded a provision for credit loss of $22 million in the third quarter compared with $14 million in the year-ago quarter.The allowance for credit losses was $725 million, which rose marginally year over year.Total non-performing assets rose 4% year over year to $260 million. The allowance for credit losses to total loans ratio was 1.43% as of Sept. 30, 2025, unchanged from the year-ago reported level. Also, the company recorded net charge-offs of $32 million, significantly up from $11 million in the year-ago quarter.CMA's Capital Position Mixed BagThe total capital ratio was 14.12%, down from 14.29% in the year-ago quarter. The Common Equity Tier 1 capital ratio was 11.90%, down from 11.96% in the prior-year quarter.As of Sept. 30, 2025, CMA's tangible common equity ratio was 8.34%, up from 8.01% in the prior-year quarter.Comerica’s Capital Distribution ActivitiesThe company repurchased $150 million of common stock under the share repurchase program.CMA’s Recent DevelopmentThis month, Comerica entered a definitive merger agreement with Fifth Third Bancorp FITB, under which the latter will acquire CMA in an all-stock transaction valued at $10.9 billion.The transaction is expected to close by the end of the first quarter of 2026 and will combine two banking franchises to form the ninth-largest U.S. bank, with nearly $288 billion in assets, $224 billion in deposits, and $174 billion in loans.The combined entity will operate in 17 of the 20 fastest-growing markets in the country, including key regions in the Southeast, Texas, and California, while reinforcing its leadership in the Midwest. Also, the combined loan book will have a more balanced composition, reducing commercial loan concentration from 44% to 36%. That diversification can prove critical in volatile credit cycles, helping stabilize earnings even if regional economies weaken.Our View on CMAComerica’s third-quarter 2025 results reflect a mixed performance, with higher net interest income growth driving an earnings beat, while rising expenses and deteriorating credit quality tempered overall momentum.Looking ahead, the planned $10.9-billion merger with Fifth Third Bancorp will position Comerica for expanded scale, improved diversification, and enhanced competitiveness in key growth markets. While near-term challenges persist, the strategic combination and continued focus on operational efficiency may bolster long-term shareholder value.Comerica Incorporated Price, Consensus and EPS Surprise  Comerica Incorporated price-consensus-eps-surprise-chart | Comerica Incorporated QuoteCurrently, Comerica carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Another BankFirst Horizon Corporation’s FHN third-quarter 2025 adjusted earnings per share (excluding notable items) of 51 cents surpassed the Zacks Consensus Estimate of 45 cents. This compares favorably with 42 cents in the year-ago quarter.FHN’s results benefited from a rise in net interest income and non-interest income, along with provision benefits. However, a decline in loan and deposit balances acted as a headwind.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fifth Third Bancorp (FITB): Free Stock Analysis Report Comerica Incorporated (CMA): Free Stock Analysis Report First Horizon Corporation (FHN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks