Financial services firm Comerica Inc. (CMA: Quote) on Tuesday reported higher profit for the first quarter, aided by a rise in net interest income as well as a fall in loan loss provisions. Earnings per share topped estimates. The company is considering a dividend increase of 50 percent. The stock is gaining over 5 percent in pre-market trading.
The Dallas, Texas-based company, through its subsidiaries, provides financial products and services primarily in Texas, Arizona, California, Florida, and Michigan.
Net income attributable to common shares increased to $129 million from $102 million in the prior year. Earnings per share grew to $0.66 from $0.57. On average, 34 analysts polled by Thomson Reuters expected earnings of $0.55 per share for the quarter. Analysts' estimates typically exclude special items.
Net interest income grew to $443 million from $395 million. Interest and fees on loans increased to $411 million from $375 million.
Non-interest income was $206 million, marginally lower than $207 million in the previous year. Analysts expected revenues of $625.84 million for the quarter.
Provision for loan losses in the first quarter declined to $23 million from $49 million.
The company is considering a dividend proposal that would increase the quarterly dividend 50 percent to 15 cents per share from 10 cents per share at the board's next meeting on April 24.
Ralph Babb Jr., chairman and CEO, said, "Credit quality continued to improve in the first quarter. Net charge-offs, which decreased $15 million to $45 million in the first quarter, are at the lowest level since the third quarter of 2007. The provision for loan losses was relatively stable. Our expectation is that we will continue to see the provision and net-charge offs at these levels for the remainder of the year."
Looking ahead, assuming a continuation of the current economic environment, the company expects net interest income to increase moderately while non-interest income is expected to be relatively stable.
Net credit-related charge-offs and provision for credit losses are seen declining in 2012, while average loans are anticipated to increase moderately.
CMS closed on Monday at $30.86, up from the previous close of $30.55, on a volume of 3.34 million shares. The stock is up 5.5 percent in pre-market trading.
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by RTT Staff Writer
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