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COMERICA INC (CMA)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 GAAP diluted EPS was $1.35 on net income of $176M; net interest income was stable at $574M while noninterest income fell to $264M. Net interest margin compressed 7 bps sequentially to 3.09% and the efficiency ratio worsened to 70.23% versus Q2’s 65.78% .
  • Versus S&P Global consensus, CMA delivered a significant EPS beat and a modest revenue miss: Primary EPS of $1.48* vs $1.28* consensus; revenue of $0.816B* vs $0.844B* consensus (note: S&P “Primary EPS” differs from reported GAAP diluted EPS) (Values retrieved from S&P Global).
  • Capital remained strong (estimated CET1 11.90%), with $241M returned to common shareholders (dividends + $150M buybacks); CMA issued $392M of Series B preferred stock and will pay an initial $26.74/share preferred dividend on Jan 1, 2026 .
  • Strategic catalyst: CMA announced an all-stock merger with Fifth Third (1.8663 FITB shares per CMA share), targeted close end of Q1 2026; no Q3 earnings call due to transaction .

What Went Well and What Went Wrong

  • What Went Well

    • “Robust average deposit growth” and “relatively stable net interest income” despite pricing pressure; average deposits rose to $62.7B and NII was $574M .
    • Credit quality remained manageable: net charge-offs 25 bps (still within low end of normal range), allowance 1.43% of loans, NPAs 0.51% .
    • Capital strength and shareholder returns: estimated CET1 11.90%; $150M buybacks; dividend declared ($0.71 common; preferred dividend set) .
    • CEO quote: “We produced robust average deposit growth… and relatively stable net interest income… Capital remained a strength as we increased share repurchases… estimated CET1 11.90%” .

  • What Went Wrong

    • Net interest margin decreased 7 bps to 3.09% driven by higher deposit costs and mix; efficiency ratio worsened to 70.23% with noninterest expenses up $28M to $589M .
    • Noninterest income declined $10M q/q (fiduciary -$6M; capital markets -$5M), tempering total revenue growth .
    • Sequential increase in net charge-offs ($32M vs $28M in Q2) and slight uptick in NPAs, plus criticized loans at ~$2.7B (5.2% of loans), reflecting lingering uncertainty .

Financial Results

Quarterly performance (sequential)

MetricQ1 2025Q2 2025Q3 2025
GAAP Diluted EPS ($)1.25 1.42 1.35
Net Income ($USD Millions)172 199 176
Net Interest Income ($USD Millions)575 575 574
Noninterest Income ($USD Millions)254 274 264
Total Net Revenue ($USD Millions) (NII + Noninterest)829 (575+254) 849 (575+274) 838 (574+264)
Net Interest Margin (%)3.18 3.16 3.09
Efficiency Ratio (%)70.28 65.78 70.23
ROA (%)0.90 1.03 0.89
ROE (%)10.60 11.35 10.20

Year-over-year snapshot

MetricQ3 2024Q3 2025
GAAP Diluted EPS ($)1.33 1.35
Net Income ($USD Millions)184 176
Net Interest Income ($USD Millions)534 574
Noninterest Income ($USD Millions)277 264
Net Interest Margin (%)2.80 3.09
Efficiency Ratio (%)68.80 70.23

Versus S&P Global consensus (Q3 2025)

MetricConsensusActualBeat/Miss
Primary EPS ($)1.28*1.48*Beat by $0.20*
Revenue ($USD Billions)0.844*0.816*Miss by $0.028*

Values retrieved from S&P Global. Note: S&P “Primary EPS” differs from CMA’s reported GAAP diluted EPS of $1.35 .

Segment breakdown (Q3 2025)

SegmentNet Interest Income ($MM)Noninterest Income ($MM)Noninterest Expenses ($MM)Provision ($MM)Net Income ($MM)
Commercial Bank453 143 275 14 235
Retail Bank240 28 172 2 71
Wealth Management50 69 98 6 11
Finance(209) 20 — — (142)
Other40 4 44 — 1

KPIs

KPIQ2 2025Q3 2025
Average Loans ($USD Millions)50,665 50,755
Average Deposits ($USD Millions)61,246 62,735
Noninterest-bearing Deposits ($USD Millions; avg)23,107 22,923
CET1 Capital Ratio (%)11.94 11.90 (est.)
Net Charge-offs / Avg Loans (%)0.22 0.25
Allowance for Credit Losses (% of Loans)1.44 1.43
NPAs / Loans & Foreclosed Property (%)0.49 0.51

Guidance Changes

MetricPeriodPrevious Guidance (as of 7/18/25)Current Guidance (Q3 2025)Change
Average LoansQ3 vs Q2 2025Flat to down 1% No guidance provided (no call due to pending merger) Withdrawn
Average DepositsQ3 vs Q2 2025Moderately higher No guidance provided Withdrawn
Net Interest IncomeQ3 vs Q2 2025Slightly down No guidance provided Withdrawn
Noninterest IncomeQ3 vs Q2 2025Relatively flat No guidance provided Withdrawn
Noninterest ExpensesQ3 vs Q2 2025Higher (step-up) No guidance provided Withdrawn
Net Charge-offsFY 2025Within low end of 20–40 bps No guidance reaffirmed in Q3 Withdrawn
Tax RateFY 2025~22% excl. discrete No guidance provided Withdrawn
CapitalFY 2025CET1 well above 10% target CET1 est. 11.90% Maintained operationally
DividendCommon$0.71 declared (payable Jan 1, 2026) $0.71 declared Maintained
Preferred DividendSeries B$26.74/share (equiv. $0.6684 per depositary share) initial dividend (Aug 11–Jan 1 period) Declared New/Initiated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Net Interest Income trajectoryExpected steady growth through 2025 ex-BSBY; deposit growth and swap/securities tailwinds Slight decline expected in Q3, up in Q4; tailwinds from loans/deposits, swaps/securities; headwinds: preferred redemption and deposit pay rates NII stable at $574M; NIM down 7 bps Mixed: near-term pressure but medium-term tailwinds
Deposit pricing & mixStrong pricing, beta mgmt; upper 30% NIB mix Very competitive; anticipated pay-rate step-up in Q3; proactive gathering of IB deposits Average deposits +$1.5B; NIB share 37% (down slightly) Competitive pressure; mix tilting to interest-bearing
Credit qualityStable; normalization underway; CRE monitored NCOs low end of normal; criticized loans increased moderately, concentrated in middle market consumer-linked credits NCOs 25 bps; allowance 1.43%; NPAs up modestly Gradual normalization, still manageable
Capital & buybacksCET1 ~12%; opportunistic repurchases CET1 ~11.94%; plan ~$100M buybacks in Q3 CET1 ~11.90%; $150M buybacks executed in Q3 Consistent capital strength & returns
Strategic/M&A postureEmphasis on independence; cautious on industry M&A Open to M&A; more favorable environment; independence reiterated Announced all-stock merger with Fifth Third; no call Transformational change

Management Commentary

  • CEO: “We produced robust average deposit growth… relatively stable net interest income. Noninterest income declined… capital remained a strength… estimated CET1 capital ratio of 11.90%.”
  • CEO (Strategic): “We are incredibly excited about the agreement… to partner with Fifth Third… milestone opportunity to leverage strengths of both organizations… deliver stronger returns for our shareholders.”
  • Credit (CEO): “Net charge-offs of 25 basis points, still within the low end of our normal range… allowance… 1.43% of total loans.”

Q&A Highlights

Note: CMA did not host a Q3 call due to pending merger. Key Q&A themes from Q2:

  • NII path: slight down in Q3, up in Q4; drivers include deposit pay-rate reset and preferred redemption; medium-term tailwinds from swaps/securities and growth .
  • Deposit strategy: willing to add interest-bearing deposits in competitive markets to fund loan growth; pay rates likely higher in Q3 but easing thereafter .
  • Expenses: expected step-up in H2 after notable items in Q2; continued investment for revenue with discipline .
  • Independence/M&A: management reiterated earning the right to remain independent but acknowledged more favorable M&A backdrop; Q3 transaction subsequently announced .
  • Credit detail: criticized loan uptick tied to consumer-exposed middle market credits (luxury goods, liquor, transportation) under higher-for-longer rates; otherwise stable .

Estimates Context

  • Q3 2025 S&P Global consensus vs actual: Primary EPS $1.28* vs $1.48* actual; Revenue $0.844B* vs $0.816B* actual; # of estimates: EPS 18*, Revenue 17* (Values retrieved from S&P Global).
  • Implications: EPS beat likely driven by lower provision and stable NII; revenue miss reflects weaker fee lines and NIM compression. Given management’s narrative on deposit costs and noninterest income, estimates may tilt toward lower revenue but stable-to-up EPS as cost discipline and capital actions persist .

Key Takeaways for Investors

  • Strong EPS beat against consensus despite NIM compression; credit normalization remains contained with allowance steady at ~1.43% of loans (EPS/Revenue comparisons: Values retrieved from S&P Global).
  • Deposit growth resumed with slight mix shift toward interest-bearing; competitive pricing and strategy to fund loan growth are weighing on NIM near-term .
  • Capital remains a differentiator (CET1 ~11.9%); continued shareholder returns via buybacks and sustained common dividend support valuation resilience .
  • Noninterest expense step-up and softer fee income are watch items; monitor efficiency trajectory after Q3 degradation versus Q2 .
  • Merger with Fifth Third is the dominant narrative and likely stock driver near-term; terms (1.8663 FITB/CMA) and targeted closing by end Q1 2026 frame deal risk/reward .
  • For trading: near-term NIM pressure and fee softness can cap upside; EPS resilience and capital returns offset. Merger-related headlines, regulatory milestones, and any updated synergy/capital outlook from FITB/CMA will be key catalysts .