Comerica in Dallas retroactively cut its fourth-quarter profit by $14 million after discovering that a single borrower — an Arizona company the bank did not identify — was unlikely to repay its loan.

The $72 billion-asset Comerica lowered its fourth-quarter net income 11% to $115 million from the previously reported figure of $129 million. It also reduced earnings per share 10% to 64 cents.

Comerica also recorded a $26 million chargeoff on the loan; and it decreased incentive compensation expense, which cut noninterest expense 0.6% to $486 million.

The bank said it recently discovered irregularities at the borrower, which it described as an Arizona sales and appraisal company. The customer had a $26 million outstanding loan balance, Comerica said.

"Our investigation is ongoing and we are assessing all circumstances surrounding this matter," Comerica Chairman and Chief Executive Ralph Babb said in a Tuesday news release. "We remain confident in our systems and processes and will vigorously prosecute all legal options available to us to recover on this isolated loss."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.