Comerica Inc. plans to increase the pace of capital deployment, company officials told analysts on its quarterly earnings call Tuesday.
"All I can say is that the pace you saw in the first quarter was a 33% payout," said Beth Acton, Comerica's chief financial officer, in reference to dividend payments and stock buybacks. "Our goal is to get to a full-year payout of 50%."
The comments came after a quarter in which declining commercial real estate loans and residential originations dragged on earnings. But the company showed steady progress on credit issues, and touted its 10.4% Tier 1 common equity ratio, among the best of its peers.
Comerica reported $103 million in net income, double the $52 million it earned a year earlier. Because the company's loan portfolio shrank over that time, net interest income fell to $395 million from $415 million.
The company's provisions for loan losses also continued to fall, down to $49 million from $175 million a year ago and from $57 million in the fourth quarter.
Dale Greene, executive vice president of Comerica's business bank, predicted the slow runoff of the company's commercial real estate portfolio would continue through the rest of the year, though he cited signs of a turnaround.
"We'll continue to see some runoff as we have seen, but we are seeing more opportunities, particularly on the multi-family side and particularly in California and Texas," he said.
Meanwhile, Sterling Banchares Inc. -- which Comerica agreed to purchase in January for $1.3 billion -- lost $370,000, which was break-even on a share basis. The acquisition, though panned by market watchers as too expensive, is "on track," Evercore analyst John Pancari wrote in a research note.
Asked by an analyst whether it was possible that Comerica would use some of its capital to make further acquisitions, Chief Executive Ralph Babb did not rule out the possibility.
"We're always looking for opportunities," he said, though he added that Comerica would be "careful" in evaluating them. "If the opportunity is there, it needs to be in one of our major metropolitan areas, at least partially, in either California or Texas," he said.