Comerica Incorporated CMA is scheduled to report first-quarter 2025 results on April 21, before the opening bell. The bank’s revenues are expected to increase while earnings are likely to decline from the year-ago quarter’s reported figures.
The bank’s earnings for the fourth quarter of 2024 missed the Zacks Consensus Estimate. Results were negatively impacted by a fall in net interest income (NII) and weak asset quality. However, a rise in the deposit balance, solid fee income growth and a strong capital position offered support.
CMA has a decent earnings surprise history. Its earnings surpassed estimates in three of the trailing four quarters and missed once, the surprise being 13.71%, on average.
The Zacks Consensus Estimate for first-quarter 2025 earnings of $1.14 per share has been unchanged over the past seven days. This indicates an 11.6% decline from the year-ago quarter’s reported figure. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The consensus estimate for first-quarter 2025 revenues is pegged at $829.6 million, implying an increase of 5.9% from the year-ago reported figure.
Factors to Influence CMA’s Q1 Earnings
Loans & NII: In the first quarter, the lending scenario was not very impressive as Trump’s tariff plan resulted in uncertainty across the markets. Per the Fed’s latest data, the demand for overall loans was modest in the quarter.
From the end of the fourth quarter of 2024 until the end of February 2025, the company’s average loans were marginally down on a sequential basis. Management expects average loans to be flat with the fourth-quarter 2024 reported figure.
Given this, CMA’s average earning assets are likely to have not witnessed significant growth in the quarter to be reported. The Zacks Consensus Estimate of $71.2 billion for average earning assets indicates a 1.2% sequential decrease.
The Federal Reserve kept interest rates unchanged at 4.25-4.5% in the first quarter. As such, CMA’s NII is likely to have been negatively impacted, given relatively higher funding costs.
The consensus estimate for NII is pegged at $566.9 million, indicating a 1.4% decline from the prior quarter's reported figure. Management expects first-quarter NII to decline 1-2% from the prior quarter.
Non-Interest Income: Global merger and acquisition (M&A) activities in the first quarter of 2025 witnessed modest growth, driven mainly by the Asia Pacific region. The initial optimism of robust IB performance on the back of the Trump administration being business-friendly, and the likelihood of tax cuts and deregulations quickly faded amid trade tensions and tariff uncertainties. This led to significant market volatility and economic uncertainty. As such, companies became more cautious about pursuing M&A despite stabilizing rates and ample capital.
The IPO market saw signs of cautious optimism, given the market volatility and geopolitical challenges. The subdued equity market performance led to weak activity in follow-up equity issuances. Bond issuance volume was weak for similar reasons.
Thus, the company’s capital market fees are likely to have not witnessed significant growth in the quarter to be reported. The Zacks Consensus Estimate for capital markets income is pegged at $36.7 million, indicating a marginal sequential rise.
Average deposits (excluding brokered time deposits) declined 2.3% to $61.9 billion from the end of the fourth quarter of 2024 until the end of February. Management anticipates average deposits to decline 3-2% from that reported in the fourth quarter of 2024. As such, the company’s service charges on deposit are likely to have been impacted negatively. The Zacks Consensus Estimate for service charge on deposit is pegged at $46.1 million, indicating a decline of 2% from the prior quarter’s actual.
The Zacks Consensus Estimate for card fees is pegged at $61.8 million, indicating a marginal decline from the prior quarter.
The Zacks Consensus Estimate for overall fee income is pinned at $266.3 million, indicating a decline of 1% from the previous quarter’s actual. Management expects non-interest income to increase 6-7% from the fourth-quarter 2024 reported level.
Expenses: The company is expected to have incurred higher expenses due to seasonally higher compensation expenses and lower gains on the sale of real estate. Such rising expenses are estimated to have weighed on its expense base to some extent in the quarter under review and hindered bottom-line growth.
Management projects non-interest expenses to increase 2% from the fourth-quarter 2024 reported level.
Asset Quality: The company is likely to have set aside a substantial amount of money for potential bad loans, given the expectations of higher for longer interest rate backdrop and tariff-related uncertainty.
The Zacks Consensus Estimate for non-performing loans is pegged at $317.1 million, indicating a 3% rise from the prior quarter's reported figure.
What Does Our Model Unveil for CMA?
Per our proven model, the chances of Comerica beating estimates this time are low. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you can see below. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Comerica has an Earnings ESP of -0.21%.
Zacks Rank: CMA currently carries a Zacks Rank of 3.
Stocks to Consider
Here are some bank stocks that you may want to consider, as our model shows that these have the right combination of elements to post earnings beat this time around.
The Earnings ESP for State Street Corporation STT is +1.21% and it carries a Zacks Rank #3 at present. The company is slated to report first-quarter 2025 results on April 17. You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past seven days, the Zacks Consensus Estimate for State Street’s quarterly earnings has been unchanged at $1.98 per share.
The Earnings ESP for Associated Banc-Corp ASB is +3.97% and it carries a Zacks Rank #3 at present. The company is slated to report first-quarter 2025 results on April 24.
Over the past seven days, the Zacks Consensus Estimate for Associated Banc-Corp’s quarterly earnings has been revised upward to 57 cents per share.
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