Comerica earnings rise in 4Q on loan growth, fees

Loan growth and customer fees boost Comerica fourth quarter earnings

Associated Press

DALLAS (AP) -- Comerica's net income climbed by 35 percent in the fourth quarter, as it expanded lending to businesses and collected more fees from customers.

The big regional bank, based in Dallas, said Wednesday that it continued to benefit from its geographic footprint despite the "slow growing national economy."

"We continue to benefit from our position in growth markets," said Chairman and CEO Ralph Babb Jr. The company's bases in Michigan and Texas helped push up total average loans by 6 percent, with most of the new credit going to companies.

Comerica's net income rose to $128 million, or 68 cents per share, in the three months ended Dec. 31, from $95 million, or 48 cents per share in the same period a year ago.

Net interest income fell to $424 million from $444 million a year earlier. Net interest income combines interest on loans that the bank collects and interest on deposits and debt that the bank pays out. It is a measure of the bank's ability to profit from its lending.

Banks are seeing interest income squeezed by ultra-low interest rates and competition for depositors. They rely increasingly on fees for services like money management and basic retail banking.

Comerica's total average loan balance rose 6.4 percent, to $44.12 billion from $41.45 billion in the same period a year earlier.

Noninterest income, which includes fees, insurance and gains on securities, rose to $204 million from $182 million.

The results were better than analysts forecast, according to FactSet. On average they expected net income of 65 cents per share.

Comerica does not report total revenue.

For the full year 2012 net income was $521 million, or $2.67 per share, compared with $389 million, or $2.09 per share in 2011.

In 2013, Comerica expects average loans to keep growing, but at a slower pace, "with economic uncertainty impacting demand," the bank said. It expects lower net interest income because of continued low interest rates. Fees income is expected to rise as the bank sells more products to existing customers and adjusts prices.

Comerica also said it repurchased a total of 3.1 million shares in the quarter for $93 million at an average purchase price of $30. Combined with dividends the company said it returned 79 percent of its 2012 net income to shareholders.

Comerica Inc., parent of Comerica Bank, offers financial products and services to consumers and businesses, mainly in Texas, Arizona, California, Florida and Michigan.

Comerica shares closed at $31.87 on Tuesday. It has traded between $27.42 and $34 over the past year.

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