Comerica (NYSE:CMA) stock climbed as much as 8% on Thursday after the financial services company posted Q4 results slightly above estimates, led by higher net interest income and robust loan growth.
The firm reported Q4 EPS of $2.58 vs. $1.66 in Q4 2021, while revenue increased 36% Y/Y to $1.02B. Net interest income grew ~61% to $742M, driven by higher short-term rates. Net interest margin increased 24 bps sequentially to 3.74%.
Total loans grew 9.5% to $52.38B and total deposits decreased 15.6% to $71.36B. Provision for credit losses increased to $33M, compared with $28M in Q3 and benefit of $25M in Q4 2021.
Comerica (CMA) expects FY23 net interest income to grow 17%-20% Y/Y and average loans to increase 7%-8%. Average deposits are projected to decline 7%-8% as customers continue to use excess liquidity.
“CMA’s core Q4 was stronger than we and the market expected, as better NII and fees overwhelmed higher core expenses than we modeled,” said Piper Sandler analyst Scott Siefers. “CMA offered Q1/FY23 guidance. Relative to consensus, it looks like NII could come in worse, fees could come in better, but expenses could come in worse.”
Piper Sandler rates Comerica (CMA) Overweight, with an $85 price target.
Earlier, Odeon Capital upgraded Comerica (CMA) to Buy from Hold.