Comerica Incorporated (NYSE:CMA) Q2 2019 Earnings Conference Call - Final Transcript

Jul 17, 2019 • 08:00 am ET


Comerica Incorporated (NYSE:CMA) Q2 2019 Earnings Conference Call - Final Transcript


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Good morning. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Comerica Second Quarter 2019 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Darlene Persons, Director of Investor Relations. Ma'am, you may begin.

Darlene P. Persons

Thank you, Regina. Good morning, and welcome to Comerica's second quarter 2019 earnings conference call.

Participating on this call will be our President and CEO, Curt Farmer, Chief Financial Officer, Muneera Carr; and Chief Credit Officer, Pete Guilfoile. During this presentation, we will be referring to slides which provide additional details. The presentation slides and our press release are available on the SEC's website, as well as in the Investor Relations section of our website,

This conference call contains forward-looking statements, and in that regard, you should be mindful of the risks and uncertainties that can cause actual results to materially vary from expectations. Forward-looking statements speak only as of the date of this presentation, and we undertake no obligation to update any forward-looking statements. Please refer to the Safe Harbor statement in today's release and slide two, which I incorporate into this call as well as our SEC filings for factors that can cause actual results to differ. Also, this conference call will reference non-GAAP measures and in that regard, I direct you to the reconciliation of these measures within the presentation.

Now, I'll turn the call over to Curt, who will begin on slide three .

Curtis C. Farmer

Good morning, everyone. And after the last earnings call, I was then CEO and Ralph Babb assumed the position of Executive Chairman. Just becoming CEO in 2002, Ralph has created a tremendous legacy at Comerica. He managed the company through an incredible amount of economic change and disruption in the industry and has positioned us well for the future. I will continue to work closely with Ralph as I transition into my new role.

Turning to slide three. Today, we reported second quarter earnings of $298 million or $1.94 per share. This resulted in an ROE of over 16% and an ROA of almost 1.7% for the quarter. Our loan growth is strong, reaching a record level and outpacing the industry H8 data for the second consecutive quarter.

Also, total commitments grew over $300 million and line utilization increased about 40 basis points to 53%. Our pipeline remains solid, particularly in light of the loan growth we drove in the last two quarters. Overall, our customers are performing well, and we are positioned to continue to support the growing working capital, CapEx for acquisition financing requirements.

Fee income also increased in the quarter, including growth in fiduciary and card categories. Continued careful cost management resulted in a $9 million reduction in expenses. Altogether, this drove a $10 million increase in pre-tax, pre-provision net revenue, excluding the $8 million securities loss incurred in the first quarter.

The credit provision increased primarily due to the loan growth, as well as