Comerica Earnings: Net Interest Income Under Additional Pressure, but Market Remains Too Harsh

Narrow-moat-rated Comerica reported results that show additional earnings pressure building for the bank, but we continue to view the pressure as manageable. The bank lowered its full-year net interest income outlook once again, as the bank now expects annual growth of only 1%-2% (down from 6%-7% previously). Deposit pricing accelerated a bit higher than we had expected in the quarter, although the mix of noninterest-bearing deposits and overall deposit balances (which grew in the quarter) met expectations. Therefore, while pricing is accelerating and our full-cycle deposit beta estimate will go up, other aspects of the bank’s funding base are performing as expected.