Comerica reported improvement in its energy-loan portfolio in the second quarter but charges related to a broad corporate restructuring took a bite out of overall profits.
The Dallas company said Tuesday that it earned $103 million in the second quarter, a decline of 23% from the same period last year but a 75% improvement over its first-quarter results. Earnings per share fell 21% year over year, to 53 cents.
The highlight for the $70.7 billion company was improved credit quality, aided in part by stabilizing energy prices. The company said Tuesday that energy related chargeoffs, while still higher than a year earlier, fell 24% from the prior quarter, to $32 million. As a result, the company was able to reduce its provision for loan losses by 67%, to $49 million.
- Alabama
After years of bulking up on shared national credits, a number of regional banks are cutting back because of the heartburn from problem oil and gas loans. A few lenders are refusing to budge, but many will have no choice if they want to dilute the energy risk on their books.
June 30 -
After another disappointing quarter, Comerica is promising big changes in its ongoing quest to improve returns to shareholders. It appears to be considering all options, including selling off business lines and perhaps even merging with another institution.
April 19 -
Comerica may sell itself one day, but it won't be a very attractive takeover target or fetch top dollar until energy prices rebound and interest rates rise, company officials said at the annual meeting Tuesday.
April 26
The company also reported marginal gains in both interest and noninterest income, aided by modest loan growth and higher revenue from payments and card products.
Expenses were markedly higher, however, as a result of the previously announced restructuring. The company has set a goal of reducing annual expenses by roughly $160 million through a combination of staff cuts, branch closures and other measures. Restructuring charges in the second quarter totaled $53 million, the bulk of which were related to severance costs.
