Comerica, Inc. (NYSE: CMA) reported Q2 EPS of $0.80, $0.04 better than the analyst estimate of $0.76.

"We recorded a 10 percent increase in earnings per share compared to the first quarter, a solid performance given this competitive and persistently low-rate environment," said Ralph W. Babb Jr., chairman and chief executive officer. "We continue to be focused on growing the bottom line by carefully managing the things we can control, such as expanding customer relationships, maintaining expense discipline as well as credit quality, all the while taking a prudent, conservative approach to capital.

"With higher customer-driven fee income and broad-based loan growth, revenue increased more than 3 percent from the first quarter. Average loans were up $1.7 billion, or 4 percent, compared to the first quarter, and period-end loans were up $1.4 billion, or 3 percent, with notable growth in virtually every business line. Average deposits were up $614 million to $53.4 billion. Credit quality continued to be strong, noninterest expenses decreased slightly, and our solid capital position continues to support our growth.

"We attribute these results to continued improvements in the economy, reflected particularly in the loan growth in Texas and California, as well as our expertise in faster growing business lines and consistent focus on relationships. Looking ahead, macro-economic conditions appear to be favorable. The market is competitive, however, we are confident in our ability to add new customer relationships and expand existing ones while maintaining our credit pricing and structure discipline."

Second Quarter 2014 Compared to First Quarter 2014

• Average total loans increased $1.7 billion, or 4 percent, to $46.7 billion, primarily reflecting an increase of $1.5 billion, or 5 percent in commercial loans. The increase in commercial loans was reflected in almost every line of business, led by increases in Mortgage Banker Finance ($433 million), National Dealer Services ($290 million), Energy ($229 million), and Technology and Life Sciences ($200 million). Period-end total loans increased $1.4 billion, or 3 percent, to $47.9 billion, primarily reflecting a $1.2 billion, or 4 percent, increase in commercial loans.
• Average total deposits increased $614 million, or 1 percent, to $53.4 billion, reflecting an increase in noninterest-bearing deposits of $775 million, partially offset by a decrease in total interest-bearing deposits of $161 million. Period-end deposits increased $420 million, to $54.2 billion.
• Net interest income increased $6 million, or 2 percent, to $416 million in the second quarter 2014, compared to $410 million in the first quarter 2014, primarily due to an increase in loan volumes, partially offset by a decrease in yields.
• The provision for credit losses increased $2 million to $11 million in the second quarter 2014, primarily reflecting increases in both loan volume and commitments. Net charge-offs were $9 million, or 0.08 percent of average loans, in the second quarter 2014.
• Noninterest income increased $12 million to $220 million in the second quarter 2014, primarily as a result of increases in several customer-driven fee categories.
• Noninterest expenses decreased $2 million to $404 million in the second quarter 2014, primarily reflecting a $7 million decrease in salaries and benefits expense, partially offset by increases in software expense, operational losses and outside processing fees.
• Capital remained solid at June 30, 2014, as evidenced by an estimated Tier 1 common capital ratio of 10.49 percent and a tangible common equity ratio of 10.39 percent.
• Comerica repurchased approximately 1.2 million shares of common stock during second quarter 2014 under the repurchase program. Together with dividends of $0.20 per share, $95 million was returned to shareholders.

Second Quarter 2014 Compared to Second Quarter 2013

• Average total loans increased $1.8 billion, or 4 percent, primarily reflecting an increase of $1.5 billion, or 5 percent, in commercial loans. The increase in total loans was driven by increases in almost all lines of business, partially offset by a decrease in Mortgage Banker Finance ($496 million).
• Average total deposits increased $1.9 billion, or 4 percent, driven by an increase in noninterest-bearing deposits of $1.9 billion, or 9 percent.
• Net income increased $8 million, or 5 percent, primarily reflecting a reduction in pension expense, largely due to changes in actuarial assumptions. Total revenue was stable despite the impact of the prolonged low-rate environment, and expenses were controlled.

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