Comerica execs say the bank’s midyear slump won’t last

Comerica is in a midyear earnings slump, but the bank’s executives expect the downturn to be temporary, saying they anticipate a rebound later in the year.

The Dallas-based bank reported quarterly earnings of $1.42 per share on Friday, beating analysts’ consensus estimate of $1.25, but falling 4.7% short of its earnings per share during the same period last year. Comerica reported $199 million in net income, a 3.4% drop on a year-over-year basis.

Looking ahead, executives at the $78 billion-asset bank warned that a redemption of preferred stock would cause a decline in net interest income for the third quarter.

“We do have some headwinds in the third quarter, and we think they may more than offset the tailwinds,” Chief Financial Officer James Herzog said Friday during the company earnings call. “But importantly, we think these are just for the third quarter. And then we think the tailwinds take back over the fourth quarter.”

Loans dropped on a year-over-year basis, but only slightly, with average loans reported at $50.7 billion this quarter, down 0.8% from the second quarter of 2024.

Still, Citigroup analyst Benjamin Gerlinger wrote in a research note that loan growth trends tracked slightly higher than his past assumptions, and Comerica made a small upgrade to its loan-growth outlook for the entire year. The revised guidance calls for loans to be flat to down 1%, an improvement from last quarter’s outlook, which envisioned loans declining by 1% to 2% for the year.

“Although average loans and equity fund services declined, period-end trends were up with an improved outlook for private equity and venture capital,” Comerica CEO Curtis Farmer said on the earnings call. “Although economic uncertainty persists, customers appear to be navigating the environment and beginning to invest in their businesses.”

During the second quarter, average deposits at the bank were $61.24 billion, down by 2.9% from the same time last year. The bank stated in its earnings report that “strong” deposit growth in the second half of 2025 would be weighted toward the fourth quarter.

“Our deposit portfolio has long been a key strength of our franchise and we are continuing to make strategic investments to further enhance this competitive funding source,” Herzog said. “Just this quarter, we delivered two new real-time payment solutions, providing additional flexibility for our customers.”

Noninterest expenses came in at $561 million, a 1.1% increase year over year, but almost 4% lower than during the previous quarter. Comerica executives attributed the decrease to “lower litigation-related expenses and seasonal declines related to salaries and benefits.”

In April 2025, the Consumer Financial Protection Bureau dropped a lawsuit against Comerica. That suit, which centered around allegations that Comerica deliberately disconnected 24 million customer service calls in connection with the Direct Express program, which Comerica administered for the U.S. Treasury Department, was dropped “without prejudice.” That means that the CFPB could refile the same case in the future if it chose to do so.

Comerica did not comment on whether the litigation expenses referred to in the earnings report were related to the CFPB lawsuit. With the CFPB facing an uncertain future under the Trump administration, it is unclear whether the bank might face litigation expenses from the case in the future.

Shares in Comerica were up 4.8% Friday in afternoon trading.