Comerica Reports Strong Q2 2025 Earnings Driven by Loan Growth and Strategic Investments

Comerica (CMA) released its Q2 2025 earnings on July 18, posting earnings per share (EPS) of $1.42—a 14% increase from the previous quarter. The bank also delivered $193 million back to shareholders through stock buybacks and dividends. Management emphasized several key achievements: improving loan growth, stabilizing deposits, strict expense control, and solid capital ratios. Notably, guidance for net interest income growth of 5% to 7% for the year remains unchanged, even as the company prepares for short-term industry headwinds.

Loan Growth Signals Rebound in Business Confidence

Comerica reported approximately 3% period-end loan growth and boosted total loan commitments by $400 million during the quarter. The bank saw strong momentum in environmental services and commercial real estate loans, though average loans in equity fund services declined. Management noted that middle market loan pipelines are strengthening and activity has improved significantly since the fallout of the Silicon Valley Bank collapse in March 2023. However, loan levels across the industry have yet to return to pre-2023 norms. This renewed loan activity suggests increased business customer confidence and could set the stage for sustainable revenue growth after quarters of subdued banking activity.

Stable Deposits and Digital Investment Enhance Competitiveness

Non-interest-bearing deposits accounted for 38% of total deposits for the fourth consecutive quarter, underscoring stability in a banking sector facing wider deposit shifts and pricing pressures. Comerica also launched two real-time payment solutions in Q2, furthering the company's digital transformation efforts. These initiatives are designed to strengthen customer relationships and diversify funding sources, which will help manage funding costs and support future loan growth.

Expense Control and Strong Capital Support Shareholder Value

The bank reduced non-interest expenses by $23 million quarter-over-quarter, primarily through lower litigation and compensation costs as well as some one-off benefits. As a result, Comerica’s efficiency ratio improved, though expenses remain higher than some competitors. The bank’s Common Equity Tier 1 (CET1) ratio reached 11.94%, well above its 10% internal target, providing the flexibility to increase stock buybacks to $100 million during Q2. This strong capital position supports the company’s ability to return value to shareholders, although ongoing improvements are needed to match sector efficiency levels.

Outlook for 2025

Looking ahead, Comerica projects that average loans will be flat to down by 1% in 2025—a tightening of previous estimates—while average deposits are expected to fall by 2% to 3% as brokered CDs decline. Net interest income is forecasted to grow between 5% and 7% for the year. The company expects a temporary dip in net interest income in Q3 before growth resumes in Q4. Non-interest expenses are now estimated to rise by just 2% for 2025, an improvement from earlier projections. The CET1 ratio is expected to stay near 12% in the third quarter, supporting continued share buybacks of at least $100 million. Notably, Comerica does not anticipate significant Direct Express deposit attrition in its outlook and did not provide long-term guidance beyond 2025.

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