“Michigan is a state on the road to a comeback with its economy improving at a solid pace,” Ralph Babb Jr., Comerica’s CEO and chairman, told analysts, noting that the auto industry has played a key role in the state’s economic growth.
Thanks to this recovery, the division of the bank that focuses on midsize companies in Michigan enjoyed the best first quarter for newbusiness in five years, Babb said.
His remarks came as Dallas-based Comerica reported that it earned $53 million in its Michigan market in the first quarter compared with $26 million in the year-ago period. The money the bank had to set aside for loan losses plunged 57.5% to $34 million from $80 million.
The earnings growth in Michigan helped Comerica earn $102 million, or 57 cents a share, in the first quarter, compared with a net loss of $71 million, or 46 cents a share, in the same period a year ago.
The company said the increase in earnings was driven by fewer write-offs for bad loans and other reductions in credit costs as well as good expense control. Like many other banks, however, Comerica is making fewer loans than it did a year ago.
Dale Greene, executive vice president of the company’s businessbank, said loan growth won’t increase until the job market improves. “The economy has got to look a little better and be more predictable,” he said. The bank has been making fewer commitments for new loans in Michigan. It is focused on expanding its business in Texas.
By Katherine Yung, Detroit Free Press