Comerica Inc.'s (CMA) second-quarter earnings rose 37% as the
Dallas-based bank set aside a sharply lower amount to cover
potential loan losses. Meanwhile, Sterling Bancshares Inc. (SBIB)
swung to a surprise second-quarter loss as the Houston-based lender
saw declining revenue and a loss from an asset sale.
Comerica's pending $780.6 million acquistion of Sterling
Bancshares, part of its strategy to shift its focus from the
Midwest to the much stronger Texas economy, is expected to close by
July 28. The move is also part of consolidation trend. The industry
has been recovering lately, as most banks set aside less to cover
potential losses as credit quality continues to improve. However,
revenue growth has been more difficult to achieve for many
banks.
Comerica reported a profit of $96 million, or 53 cents a share,
up from $70 million, or 39 cents a share, a year earlier. The
latest period included $5 million in acquisition-related costs.
Revenue decreased 3.7% to $593 million.
Analysts polled by Thomson Reuters most recently forecast
earnings of 53 cents on revenue of $594 million.
Loan-loss provisions fell to $47 million from $126 million a
year earlier and $49 million in the first quarter.
Sterling reported a loss of $11.8 million, or 12 cents a share,
from a year-earlier profit of $596 million, or a penny a share. The
latest period included a 9-cent loss related to its pending sale of
its MBM Advisors Inc. investment advisory unit. Analysts polled by
Thomson Reuters most recently forecast earnings of 2 cents.
Revenue increased fell 14% to $44.3 million.
Loan-loss provisions fell to $9.2 million from $9.3 million a
year earlier and $10.8 million in the first quarter.
Shares of Comerica and Sterling closed Monday at $32.31 and
$7.63, respectively. Neither was active premarket. Shares of
Comerica are down by about 26% from a multiyear high in January
before the acquisition was unveiled. Sterling is up 73% in the past
year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com