Comerica (CMA) in Dallas slashed its quarterly earnings by 20% Tuesday after a Montana jury ordered the company to pay $52 million in damages to an office supply company.

The $65 billion-asset Comerica lowered its fourth-quarter earnings to $117 million, down from the original report on Friday of $145 million in profits. Earnings per share dropped to 62 cents, a decrease of 15 cents. The company also noted that its Tier 1 leverage ratio fell 4 basis points, to 10.56%.

Comerica said that it had increased its litigation reserve and lowered incentive compensation because of a complicated lawsuit against the company in the Montana Second District Judicial Court.

The lawsuit relates to a $9 million revolving line of credit that Comerica originally extended to office supply company Masters Group International. Another company, Butte Local Development Corp., gave Masters a $200,000 loan as part of the $9 million financing package, according to court documents.

Masters later defaulted on the Butte Local Development loan, as well as the Comerica loan. The bank recovered a total of $10.5 million from Masters through collection actions, according to the release.

Masters alleged in court documents that it was unable to repay Butte Local Development's $200,000 because Comerica decided first not to renew its existing loans and then changed the terms of the loans.

"As a result of Comerica Bank's failure to comply with the interim financing arrangement and related loan terms, Masters was not able to continue in operation or to pursue the alternative financing," Masters said in a court document.

Comerica may appeal the jury decision to the Montana Supreme Court, the company's chairman and chief executive Ralph Babb said in the release.

"We believe we had meritorious defenses for this litigation and anticipated a favorable outcome," Babb said.

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