Comerica Incorporated net income $535 million, $2.92 per share
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Q4 average total deposits increased $596 million, or 1 percent.
Fourth quarter 2015 compared to third quarter 2015
Average total loans decreased $424 million to $48.5 billion, primarily reflecting decreases in Mortgage Banker Finance, general Middle Market, Energy and Corporate Banking, partially offset by increases in Commercial Real Estate and National Dealer Services.
The allowance for loan losses increased $12 million in the fourth quarter 2015.
Average total deposits increased $596 million, or 1 percent, to $59.7 billion, primarily driven by a $1.0 billion increase in noninterest-bearing deposits.
The increase in average total deposits was primarily due to increases in Corporate Banking and Private Banking, partially offset by decreases in Technology and Life Sciences and general Middle Market. Average deposits increased in all major geographic markets. Period-end total deposits increased $1.1 billion to $59.9 billion.
Net interest income increased $11 million to $433 million compared to third quarter 2015, primarily reflecting an increase in loan yields, largely due to higher interest recognized on nonaccrual loans and the increase in short-term rates, and a larger securities portfolio, partially offset by a decrease in average loans.
The allowance for loan losses increased $12 million in the fourth quarter 2015, primarily due to an increase in reserves related to energy. Net charge-offs were $26 million, or 0.21 percent of average loans, in the fourth quarter 2015, compared to $23 million, or 0.19 percent, in the third quarter 2015. As a result, the provision for credit losses was $35 million for the fourth quarter 2015.
Noninterest income increased $6 million in the fourth quarter 2015, primarily the result of an increase in commercial lending fees.
Noninterest expenses increased $28 million in the fourth quarter 2015, primarily due to increases in technology and regulatory-related contract labor and consulting expenses, as well as seasonally higher staff insurance expense.
Additionally, the third quarter 2015 benefited from a release of $3 million of litigation reserves, low deferred compensation expense and lower share-based compensation expense as a result of forfeitures, which were not repeated in the fourth quarter.
The provision for income taxes decreased $14 million in the fourth quarter 2015. The effective tax rate was 28 percent for the fourth quarter 2015, compared to 32 percent in the third quarter 2015, primarily reflecting a $5 million tax benefit from the early termination of certain leveraged lease transactions.
Capital remained solid at December 31, 2015, as evidenced by an estimated common equity Tier 1 capital ratio of 10.53 percent and a tangible common equity ratio of 9.72 percent.
Comerica repurchased approximately 1.5 million shares of common stock under the equity repurchase program, which, together with dividends, returned $102 million to shareholders.
Full-year 2015 compared to full-year 2014
Average total loans increased $2.0 billion, or 4 percent, to $48.6 billion in 2015, reflecting increases in almost all lines of business, with the largest increases in Technology and Life Sciences, Mortgage Banker Finance, National Dealer Services and Commercial Real Estate, partially offset by a decrease in Corporate Banking.
Period-end loans increased $516 million, or 1 percent, to $49.1 billion, primarily reflecting increases in Mortgage Banker Finance, Technology and Life Sciences, Commercial Real Estate and National Dealer Services, partially offset by decreases in general Middle Market, Corporate Banking and Energy.
Average total deposits increased $3.5 billion, or 6 percent, to $58.3 billion in 2015, reflecting increases of $3.1 billion, or 12 percent, in noninterest-bearing deposits and $474 million, or 2 percent, in interest-bearing deposits.
Period-end deposits increased $2.4 billion, or 4 percent, to $59.9 billion, reflecting an increase of $3.6 billion, or 13 percent, in noninterest-bearing deposits, partially offset by a decrease of $1.2 billion, or 4 percent, in interest-bearing deposits.
Net interest income of $1.7 billion for 2015 increased by $34 million, or 2 percent, primarily as a result of higher earning asset volume, partially offset by lower loan yields, in part due to a decrease in accretion of the purchase discount on the acquired loan portfolio and continued pressure on yields from the low-rate environment and loan portfolio dynamics.
The allowance for loan losses increased $40 million compared to 2014, primarily due to increases in reserves related to energy and Technology and Life Sciences, partially offset by improvements in credit quality in the remainder of the portfolio.
Net charge-offs were $75 million, or 0.15 percent of average loans, for 2015, compared to $25 million, or 0.05 percent of average loans, for 2014. The provision for credit losses increased $95 million to $122 million in 2015, compared to 2014.
Noninterest income increased $182 million to $1.1 billion in 2015. Excluding the $181 million impact of a change to the accounting presentation for a card program, noninterest income was stable. Increases in card fees, service charges on deposit accounts and fiduciary income were largely offset by lower investment banking income, lower fee income on certain categories impacted by regulatory changes and decreases in several non-fee categories.
Noninterest expenses increased $219 million to $1.8 billion in 2015. Comerica repurchased approximately 5.1 million shares of common stock and 500,000 warrants during 2015 under the equity repurchase program. Together with dividends of $0.83 per share, $389 million was returned to shareholders. ■