Executive Summary

EPS rose to $1.42, up 14% q/q, with PPNR expanding to $288MM, driven by noninterest income growth and lower expenses; credit quality remained strong with NCOs at 22 bps and NPAs down to 0.49% .
Net interest income held flat at $575MM and NIM slipped 2 bps to 3.16% as short‑term borrowings funded loan growth and deposit pay rates edged higher; average deposits fell 1.1% q/q to $61.2B while average loans increased 0.9% to $50.7B .
Wall Street S&P Global consensus showed an EPS beat and revenue miss: Primary EPS came in above expectations (actual $1.30 vs $1.22 est.) while S&P “Revenue” was below consensus (actual $805MM vs $842MM est.)—definitions differ from company-reported diluted EPS and revenue components; values from S&P Global*.
Guidance updated: FY25 average loans improved to flat to down 1% (from down 1–2%), NII growth still 5–7% but likely at lower end, tax rate now ~20% ex‑discretes; Q3 repurchases targeted at ~$100MM, CET1 maintained well above 10% .

What Went Well and What Went Wrong

What Went Well

Broad-based loan growth with period-end loans up ~3% q/q to $51.2B and average loans up $451MM; CEO: “Improved customer sentiment contributed to broad-based loan growth…” .
Fee momentum: noninterest income up $20MM q/q (+7.9%) led by capital markets (+$11MM) and fiduciary (+$5MM) as activity improved; CFO highlighted higher syndication, rate hedging, and FX income .
Expense discipline: noninterest expense down $23MM q/q to $561MM with a $13MM net litigation benefit, $4MM gain on real estate sales, and $3MM state tax interest recovery; efficiency ratio improved to 65.78% from 70.28% .

What Went Wrong

NIM compressed 2 bps to 3.16% as deposit costs rose 4 bps and short‑term borrowings increased to fund loan growth; BSBY cessation reduced loan yield benefit by 3 bps and NII by $5MM .
Deposits weakened: average deposits fell $653MM q/q and period‑end deposits fell $1.5B, with interest‑bearing down $1.0B (including ~$364MM brokered time CD runoff) and noninterest‑bearing down $459MM .
Criticized loans rose to $2.7B (5.4% of loans), with pressure in select middle-market consumer-exposed credits (luxury goods, liquor, freight); however NPAs declined and the ACL coverage remained flat at 1.44% .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Diluted EPS ($)	$1.49	$1.25	$1.42
Net Interest Income ($MM)	$533	$575	$575
Noninterest Income ($MM)	$291	$254	$274
Net Interest Margin (%)	2.86%	3.18%	3.16%
Efficiency Ratio (%)	67.77%	70.28%	65.78%
ROA (%)	1.05%	0.90%	1.03%
ROE (%)	14.78%	10.60%	11.35%
Average Loans ($MM)	51,071	50,214	50,665
Average Deposits ($MM)	63,055	61,899	61,246

Segment net income breakdown:

Segment Net Income ($MM)	Q2 2024	Q1 2025	Q2 2025
Commercial Bank	$276	$238	$243
Retail Bank	$44	$79	$82
Wealth Management	$30	$21	$30
Finance	$(142)	$(166)	$(148)
Other	$(2)	$0	$(8)
Total	$206	$172	$199

Key credit and capital KPIs:

KPI	Q2 2024	Q1 2025	Q2 2025
Net Charge-offs ($MM)	$11	$26	$28
NCOs / Avg Loans (%)	0.09%	0.21%	0.22%
NPAs ($MM)	$226	$301	$249
NPAs / Loans+FP (%)	0.44%	0.60%	0.49%
ACL ($MM)	$717	$719	$735
ACL / Loans (%)	1.38%	1.44%	1.44%
CET1 Ratio (%)	11.55%	12.05%	11.94% (est.)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Average Loans	FY25	Down 1–2% (Q1 outlook)	Flat to down 1%	Raised (less negative)
Average Deposits	FY25	Down 2–3%	Down 2–3%	Maintained
Net Interest Income	FY25	Up 5–7%	Up 5–7% (likely lower end; Q3 down vs Q2)	Bias to lower end
Noninterest Income	FY25	Up ~2%	Up 2%	Maintained
Noninterest Expenses	FY25	Up 2–3%	Up 2%	Lowered
Net Charge-offs	FY25	Low end of 20–40 bps	Low end of 20–40 bps	Maintained
Tax Rate	FY25	~22% ex-discretes (slide)	~20% ex-discretes (CFO)	Lowered
Share Repurchases	Q3 2025	Not specified	~$100MM targeted	New specificity
CET1 Target	Ongoing	≥10%	Maintain well above 10%	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
NII trajectory & NIM	Q1: steady quarterly NII growth ex‑BSBY; deposit pricing success; modest securities repositioning benefit	Q3 NII to dip (preferred redemption, higher pay rates), then resume upward in Q4; NIM down 2 bps	Short‑term dip, resumed upward glidepath
Deposits & pricing	Q1: cumulative beta ~71% since cuts, proactive pricing, brokered CDs to run off	Competition rising; pay rates to step up in Q3; success in interest‑bearing deposit acquisition; noninterest‑bearing mix stable upper‑30s	Competitive, tactical pricing; building IB balances
Loan demand/pipelines	Q1: customers “foot off the accelerator”; pipelines rising; CRE headwinds easing	Broad-based growth; commitments up; pipelines stronger; most businesses positive	Improving momentum
Credit quality	Q1: NCOs at low end; criticized modestly up; watch CRE	NCOs 22 bps; NPAs down; criticized up in select consumer-exposed middle-market credits	Stable with targeted pressure
BSBY cessation & swaps/securities tailwinds	Q1: BSBY benefit fading; swaps/securities maturities tailwind	BSBY reduced NII $5MM and NIM 3 bps; tailwinds continue multi‑year	Tailwinds intact despite BSBY fade
Capital & repurchases	Q1: CET1 ~12.05%; consider opportunistic buybacks	CET1 11.94% (est.); $100MM Q3 buybacks planned; preferred redeemed	Active capital return with conservative buffers
Payments/technology	Q1: investments in payments, treasury, small business	New RTP OBO solutions; embedded finance initiatives; deposit sweep leveraging real-time rails	Product innovation accelerating
Regulatory/M&A	Q1: independence focus; limited near-term industry M&A	Dialogue on independence/scale; potential for more industry M&A as uncertainty abates	Watching landscape, organic-first

Management Commentary

CEO on profitability drivers: “Noninterest income growth drove higher revenue, and when coupled with lower noninterest expenses, contributed to an increase in PPNR… Credit quality remained a strength…” .
CFO on Q3/Q4 NII path: “We do have some headwinds in the third quarter… pay rates… preferred stock redemption… Once we get past the third quarter, we do expect net interest income to be on an upward trajectory…” .
Chief Credit Officer on criticized loans: “Moderate increase… concentrated in three credits… end customer was a consumer (luxury goods, liquor, transportation/freight)… pressured by longer‑higher rate environment” .
CEO on strategy and independence: Focus on conservative capital, credit and liquidity, structural NII tailwinds, investing in payments and commercial growth; committed to shareholder value while monitoring M&A dynamics .

Q&A Highlights

NII/Deposit Costs: Q3 NII down on higher deposit pay rates and preferred redemption; Q4 up as tailwinds resume; deposit competition elevated; tactical pricing to fund robust loan growth .
Loans/Pipelines: Momentum improving across markets and businesses; pipelines stronger though not back to pre‑SVB; commitments rising in Environmental Services and CRE .
Credit: Criticized loans up modestly in consumer‑exposed middle‑market credits; overall credit stable; NPAs down .
Capital & Buybacks: CET1 ~12%; intent to repurchase ~$100MM in Q3 while calibrating to loan trends and macro .
Strategy/M&A: Continued emphasis on organic growth and independence; openness to strategic M&A as regulatory backdrop evolves .

Estimates Context

Consensus vs actual (S&P Global definitions)*

Metric	Q2 2025 Consensus	Q2 2025 Actual
Primary EPS ($)	1.22*	1.30*
Revenue ($MM)	842.1*	805.0*
# EPS Estimates	16*	—
# Revenue Estimates	15*	—
Target Price (Mean, $)	81.28*	81.28*

Notes: Company-reported diluted EPS was $1.42, reflecting GAAP diluted EPS including preferred impacts; S&P “Primary EPS” utilizes its methodology and can differ from GAAP diluted EPS . S&P “Revenue” may reflect an operating revenue definition distinct from simple NII+noninterest income; company-reported NII was $575MM and noninterest income was $274MM . Values retrieved from S&P Global.*

Implications:

EPS beat vs S&P Primary EPS driven by lower expenses (litigation benefit, seasonal comp), fee income strength, and discrete tax benefits (combined state tax rate change ~$9MM) .
S&P “Revenue” miss versus consensus underscored NIM pressure (2 bps down) and deposit cost increases even as loan growth and fee activity improved .

Key Takeaways for Investors

Broad‑based loan growth and fee momentum offset deposit pressures; near‑term NIM headwinds are manageable given swaps/securities tailwinds and disciplined expense control .
Expect a tactical step‑up in deposit pay rates in Q3 to fund growth, leading to a transitory NII dip, then recovery into Q4; positioning for multi‑year NII tailwinds remains intact .
Credit metrics are resilient; rising criticized balances are concentrated and well‑underwritten; NPAs decreased and ACL coverage held at 1.44% .
Capital return continues with ~$100MM share repurchases targeted in Q3; CET1 ~11.94% (est.) well above 10% strategic target despite preferred redemption and loan growth .
Guidance improved on FY25 average loans (flat to down 1%) and FY25 expenses (up 2%); NII growth maintained at 5–7% but likely skews to lower end given Q3 funding mix .
Payments innovation (RTP OBO, embedded finance, real‑time deposit sweeps) bolsters deposit franchise and fee opportunities, supporting medium‑term revenue compounding .
Actionable: Near‑term investors should anticipate Q3 NII softness and watch deposit pay rates and funding mix; medium‑term thesis centers on structural NII tailwinds, fee growth, and sustained capital returns with stable credit.

COMERICA INC /NEW/ (CMA)·Q2 2025 Earnings Summary