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Profit for $CMA fell 32% YoY to $112MM, or $0.63 per share, for 4Q17 as the Dallas-based lender took a $107MM charge to adjust deferred taxes due to the Tax Cuts and Jobs Act. But the company's earnings were up 29% to $1.28 per share after adjusting for the charge and other items. Pre-tax income grew 46% for the quarter and 84% for the year.
For 4Q17 compared to 3Q17, $CMA expects non-interest expense to be impacted by restructuring expenses of about $15MM and expenses tied to revenue growth, such as outside processing expenses and advertising. Income tax expense is expected to be about 33% of pre-tax income, assuming no further tax impact from employee stock transactions.
For 4Q17 compared to 3Q17, $CMA expects growth in average loans of about 1%. This will reflect a seasonal increase in National Dealer Services and increases in general Middle Market, Corporate Banking and Technology and Life Sciences, partially offset by a seasonal decrease in Mortgage Banker Finance.
For 4Q17 compared to 3Q17, $CMA expects net interest income to reflect lower non-accrual interest recoveries, partially offset by loan growth. Non-interest income is expected to benefit from the execution of GEAR Up opportunities driving increases in treasury management income, card fees and fiduciary income.
$CMA's net interest income for 3Q17 grew to $546MM from $450MM last year, on net benefit from higher short-term rates and significantly higher interest recoveries. Non-interest income increased to $275MM from $272MM, on a rise in card fees, partially offset by a decline in commercial lending fees.
$CMA reported a jump in 3Q17 earnings driven by an increase in net interest income and an increase in non-interest income. Net income rose to $226MM or $1.26 per share from $149MM or $0.84 per share last year. Adjusted EPS increased to $1.27 from $0.91.
$CMA said in accordance with terms of the outstanding legacy Sterling Bancshares, Inc. warrants to purchase shares of $CMA common stock, par value $5.00 per share, the Sterling Warrants exercise price will be reduced to $7.170 per share. This dividend declaration did not result in a change in the Warrant Share Number of 0.24 per share.
$CMA's BoD declared a quarterly cash dividend for common stock of $0.30 per share, a 15% increase from the prior quarter, payable on Oct. 1, 2017 to shareholders of record on Sept. 15, 2017. The board also authorized an increase in number of common shares that $CMA is authorized to repurchase under its program by up to 5MM additional shares.
During 2Q17, $CMA's average loans increased to $823MM. Seasonality helped drive increase in Mortgage Banker and National Dealer Services. The company reported 2% increase in the middle market average loans with growth in all the three markets, mainly California.
Financial services company $CMA reported 95% rise in its 2Q17 earnings, helped by higher net interest income and strong credit quality. Net income rose to $203MM, or $1.13 per share, compared to $104MM, or $0.58 per share during 2Q16. Net interest income rose 12% YoY to $500MM, mainly due to higher short-term rates and increased average loans.
$CMA's Business Bank segment contributed the lion's share to its earnings jump in 1Q17. Net income from the segment almost doubled to $177MM. Income from Retail Bank was flat at $11MM, while that from Wealth Management segment was up 9.5% to $23MM.
$CMA expects 1-2% growth in average loans in FY17. It also sees higher net interest income, reflecting the benefits from the rate hikes in December 2016 and March 2017, loan growth and debt maturities. $CMA estimates 4-6% rise in non interest income, with the execution of GEAR Up opportunities of $30MM, growth in treasury management and card fees.