Fee income and improvement in asset quality helped Comerica (CMA) in Dallas increase third-quarter earnings.
Comerica reported on Wednesday a quarterly profit of $143 million, or 78 cents a share, 7 cents higher than the estimates of analysts polled by Bloomberg. Quarterly profit was 26% higher than in the same period of 2012, when Comerica recorded $25 million in charges connected to its acquisition of Sterling Bancshares.
Net interest income slipped by 4%, to $412 million, as net interest margin decreased by 17 basis points, to 2.79%. Comerica's total assets grew 1%, to $63.7 billion, and total loans also grew by the same amount, to $44.1 billion. Growth in commercial lending made up for declines in commercial mortgage and real estate construction loans, the company said.
Comerica's loan volume on the quarter was hurt by "the continued economic uncertainty and the understandable caution of our customers, as well as seasonality in auto-dealer floor plan loans and a decline in refinance volumes impacting our mortgage warehouse business," Chairman and Chief Executive Ralph Babb said in a news release.
Noninterest income grew 9%, to $214 million, as commercial lending fees, card fees and fiduciary income all rose.
Comerica's asset quality improved, as its provision for loan losses fell to $8 million, from $22 million, and net chargeoffs dropped to $19 million, from $43 million.
Noninterest expense fell 7%, to $417 million, primarily because of the $25 million acquisition charge in the third quarter of 2012. Compensation costs, occupancy costs and technology costs remained mostly flat, but litigation costs dipped, the company said.