Comerica (CMA) is seeing improvements in its commercial loan growth after a controversial acquisition of Sterling Bancshares in Texas a couple of years ago at 2.3 times book, and the company also now recently raised its dividend, leading Mark Palmer, Managing Director & Equity Analyst at BTIG LLC, to rate this stock a “buy.”
“It’s hard to argue against the results that Comerica has shown as a consequence of its increased Texas penetration thanks to owning Sterling. So there you’re seeing commercial loan growth help Comerica — which has a portfolio which is 85% floating rate — to nevertheless deliver earnings beats and see its shares appreciate, because it’s able to offset the pressures on its net interest margin and net interest income,” Palmer said.
CMA currently is among the banks with the best capital ratios in the industry, and Palmer believes the bank will have little trouble getting its requests for capital return approved by the Federal Reserve in 2013. The bank is currently in the middle of the CCAR process, and he thinks CMA‘s plans will be approved.
“KEY and Comerica are in very good stead going into the process. They’re both already returning a very high percentage of their income to shareholders, and we believe that’s sustainable. Comerica actually just increased its quarterly dividend from $0.15 to $0.17 a few days ago,” Palmer said.
East West Bancorp (EWBC) Grows Loans Profitably Thanks to Chinese Trade Exposure
March 04, 2013
Hilltop Holdings (HTH) and Texas Capital Bancshares (TCBI) Grow Commercial Loans and Profitability
March 07, 2013
Pacific Continental Corporation (PCBK) Sees Growth in Dental Loans and Nonprofit Banking Relationships
March 07, 2013
Regional Banks Grow Loans Through Asian-American Focus
February 14, 2012
Synovus Financial Corp. (SNV) Disposes of Bad Loans, Maintains Exposure to Improving Southeastern Housing
January 14, 2013
