Interest-Sensitive Comerica Is An Interesting Stock Today
Stephen Simpson, CFA
Stephen Simpson, CFA
Yesterday, 12:09 PM
Tue, Jul. 19, 1:18 PM
- Q2 net income of $104M of $0.58 per share vs. $135M and $0.73 one year ago. This year's Q2 result includes restructuring charges of $34M or $0.19 per share associated with the initial phase of management's efficiency and revenue initiative ("Gear up"), which is expected to boost pretax income by $230M by year-end 2018.
- As part of "Gear up," the efficiency ratio is expected to decline to the low 60% range by the end of 2017, and be at or below 60% by year-end 2018.
- As for energy loans, the bank set aside just $49M in provisions in Q2, down from $148M in Q1. Energy loans declined 11% in the quarter, but total loans increased 2%.
- CMA +1.8%
- Previously: Comerica beats by $0.08, misses on revenue (July 19)
Tue, Jul. 19, 6:42 AM
Mon, Jul. 18, 5:30 PM
Wed, Jun. 29, 11:08 PM
Wed, Jun. 29, 9:41 AM
- The details aren't available, but one can be pretty sure a common theme through all of the downgrades is a "lower for longer" interest rate scenario, and for any Texas or energy-exposed banks a possible topping in oil prices.
- Comerica (CMA -0.1%) is cut to Underperform from Neutral, Franklin Financial (FSB) to Neutral from Buy, Lincoln National (LNC -0.8%) to Neutral, Principal Financial (PFG +0.5%) to Neutral, Prudential (PRU -0.4%) to Underperform, Regions Financial (RF +0.5%) to Neutral, Synovus (SNV +0.4%) to Neutral, Unum Group (UNM -1.2%) to Underperform, and Zions (ZION -0.3%) to Underperform.
- Previously: Texas Capital downgraded at BAML (June 29)
Thu, Jun. 23, 4:51 PM
- Ally Financial (NYSE:ALLY): Actual end of 2015 CET1 ratio of 9.2%, Q1 2018 CET1 ratio under severely adverse scenario of 6.1%, minimum 6.1%.
- American Express (NYSE:AXP): Actual 12.4%, Q1 2018 12.3%, minimum 11.4%.
- Bank of America (NYSE:BAC): Actual 11.6%, Q1 2018 8.1%, minimum 8.1%.
- BNY Mellon (NYSE:BK): Actual 11.5%, Q1 2018 11.2%; minimum 10.5%.
- BB&T (NYSE:BBT): 10.3%, 6.9%, 6.9%
- BBVA Compass (NYSE:BBVA): 10.7%, 6.5%, 6.5%.
- BMO Financial (NYSE:BMO): 11.9%, 5.9%, 5.9%.
- Capital One (NYSE:COF): 11.1%, 8.2%, 8.2%.
- Citigroup (NYSE:C): 15.3%, 9.2%, 9.2%.
- Citizens Financial (NYSE:CFG): 11.7%, 8.8%, 8.8%.
- Comerica (NYSE:CMA): 10.5%, 8.3%, 8.3%.
- Discover (NYSE:DFS): 13.9%, 12.4%, 11.9%.
- Fifth Third (NASDAQ:FITB): 9.8%, 6.8%, 6.8%.
- Goldman Sachs (NYSE:GS): 13.6%, 10.2%, 8.4%.
- HSBC N.A. (NYSE:HSBC): 15.7%, 9.1%, 9.1%.
- Huntington Bancshares (NASDAQ:HBAN): 9.8%, 5%, 5%.
- JPMorgan (NYSE:JPM): 12%, 8.3%, 8.3%.
- KeyCorp (NYSE:KEY): 10.9%, 6.4%, 6.4%.
- M&T (NYSE:MTB): 11.1%, 6.9%, 6.9%.
- Morgan Stanley (NYSE:MS): 16.4%, 10%, 9.1%.
- Northern Trust (NASDAQ:NTRS): 10.8%, 9.6%, 9.6%.
- PNC Financial (NYSE:PNC): 10.6%, 7.6%, 7.6%.
- Regions (NYSE:RF): 10.9%, 7.3%, 7.3%.
- Santander Holdings (NYSE:SAN): 12%, 11.8%, 11.8%
- State Street (NYSE:STT): 13%, 9.6%, 9.6%
- SunTrust (NYSE:STI): 10%, 7.5%, 7.5%.
- TD Group (NYSE:TD): 13.1%, 8.4%, 8.4%.
- U.S. Bancorp (NYSE:USB): 9.6%, 7.5%, 7.5%.
- Wells Fargo (NYSE:WFC): 11.1%, 7.2%, 7.2%.
- Zions (NASDAQ:ZION): 12.2%, 6.6%, 6.6%.
- Previously: All 33 banks pass this year's stress tests (June 23)
Thu, Jun. 16, 12:29 PM
- Since June 1 when CEO Ralph Babb disclosed preliminary results of a strategic review by Boston Consulting Group, Comerica (NYSE:CMA) 9% decline has outpaced that of its peers.
- Investors were probably hoping for a sale or breakup, but the bank has ruled out a divestiture of one of its three main regional divisions -Texas, California, Michigan - and will instead focus on its Growth in Efficiency and Revenue plan (GEAR).
- Not a fan is Dick Bove who says the options are to sell now at a premium to the current stock price, or go through three years of pain to "bring the company into the 21st century ... Which would you choose?"
- Also hurting is the Fed's dovish turn as Comerica may have mad the most to gain from rate hikes, says Stephens' Terry McEvoy.
- The stock's lower by another 2.7% today.
Mon, Jun. 13, 2:25 PM
- Not very excited about the prospects for bank stocks given the significant flattening in the yield curve as potentially signaling a deteriorating H2 and 2017 environment, a bank stock analyst nevertheless needs to recommend bank stocks.
- Given low expectations as reflected in its cheap valuation, its highly asset-sensitive balance sheet, and the chance for good news from CCAR, Bank of America (BAC -1.3%) is the team's top bank idea.
- Looking at regionals, they like the M&A optionality in Comerica (CMA -1.1%), but don't see much value in names like Citizens Financial Group (CFG -1.1%), Regions Financial (RF -1.1%), SunTrust (STI -0.9%), and Zions Bancorp (ZION -0.9%). Baird also sticks with its Underperform rating on M&T Bank (MTB +0.3%), which trades at 13.5x 2017E EPS vs. about 11x for the peer group.
Wed, Jun. 1, 9:11 AM
- Ahead of this month's release of the stress test and CCAR results, BMO Capital recommends going long Discover (NYSE:DFS) and Morgan Stanley (NYSE:MS), while shorting Comerica (NYSE:CMA) and Fifth Third Bancorp (NASDAQ:FITB).
- A check of the stress test criteria has BMO preferring those lenders with less asset sensitivity, limited exposure to capital markets, limited overseas exposure, low expectations for payout boosts, and high starting capital ratios.
- For those expecting the Fed to surprise with a June rate hike, buy SunTrust (NYSE:STI) against shorts in Comerica and Fifth Third.
Fri, May 20, 12:11 PM
- "The days of negative provisioning are pretty much dead," says D.A. Davidson's Kevin Reevey. "Now, they're going to have to take provisioning expense and build up reserves based on loan growth."
- Total bank loan loss reserves were north of $250B in Q1 2010, before falling to about $24B at the end of last year. Amid the energy crash, they edged higher in Q1. Naturally, those lenders with the most exposure to energy posted some of the largest reserve increases in Q1. "It wasn't just the levels that [oil] went to, it was the speed at which prices dropped," says Peter Guilfoile, chief credit officer at one of those banks - Comerica (NYSE:CMA). Colorado-based National Bank Holdings (NYSE:NBHC) posted the largest Q/Q increase in reserves-to-loans, jumping 39 basis points to 1.43%.
- Meanwhile, there were plenty of other banks which actually saw declines in that ratio, notably Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), and U.S. Bancorp (NYSE:USB). These and other lenders in that bucket can thank denominator of that ratio growing quickly enough to offset reserve builds.
- Source: SNL Financial's Zach Fox and Venkatesh Iyer
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Thu, May 19, 9:43 AM
- Following the major bounce in Comerica (CMA +0.7%) from February's lows, Goldman gives in on its Sell rating, upgrading to Neutral. The price target is lifted to $49 from $42. The current price is $44.95.
Mon, May 9, 9:56 AM
- Catching upgrades to Outperform from Neutral at Raymond James today are BOK Financial (BOKF -0.6%), Comerica (CMA), and Hancock Holdings (HBHC +1.4%).
- Boosted to Strong Buy are Zions Bancorp (ZION -0.3%), Texas Capital (TCBI +0.7%), and Midsouth Bancorp (MSL +1.1%).
- Prosperity Bancorp (PB +0.8%) gets a two-notch upgrade to Outperform from Underperform.
- The group has already put in a strong rally off the lows, with each higher by anywhere from about 10-30% over the past three months, but down by about 7-30% on a year-over-year basis.
Thu, May 5, 2:31 PM
- EVP and General Auditor David Duprey has been named to succeed Comerica (CMA -0.1%) CFO Karen Parkhill who is exiting the bank to take the same post with Medtronic.
- Her departure is of particular interest given the bank just embarked on a strategic review of its operations. CLSA's Mike Mayo: "One of the presumed heads of their so-called major restructuring is gone, right after they assured shareholders there was a sense of urgency ... "Karen Parkhill has a sense of urgency -- a sense of urgency to leave."
- Terry McEvoy from Stephens suggests Parkhill's departure is another sign a quick sale is unlikely, as she stood to receive a $9M payout under a change of control. Her total compensation in 2015 was $2M.
Wed, May 4, 10:32 AM
- Medtronic (MDT -0.2%) appoints Karen Parkhill as EVP and CFO effective June 30, succeeding Gary Ellis who will continue to lead the Global Operations, Information Technology and Facilities & Real Estate functions.
- Ms. Parkhill joins the firm from Comerica (CMA -1.5%) where she was Vice Chairman and CFO.
Fri, Apr. 29, 2:39 PM| Fri, Apr. 29, 2:39 PM
Comerica, Inc. is a bank holding company that offers financial services in the United States. It operates through three segments: Business Bank, Retail Bank and Wealth Management. In addition to the three major segments, Finance is also reported as a segment. The Business Bank segment meets the... More
Industry: Regional - Midwest Banks
Country: United States
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