Oct 18 (Reuters) - Comerica Inc’s quarterly profit rose for the first time in seven quarters, helped by lower provisions for bad loans and higher interest income.
Like several U.S. regional banks, Dallas-based Comerica has struggled with bad energy loans due to a slump in oil prices.
Provisions for bad loans fell 38.5 percent to $16 million in the quarter ended Sept. 30 and the company said it expects the number to remain low for the fourth quarter as well.
“While the overall performance of the energy portfolio has improved ... and oil and gas prices have remained relatively stable for the past several months, we remain cautious and continued to maintain a reserve allocation,” Chief Executive Ralph Babb said in a statement.
Loans to the energy sector fell to $2.5 billion as of Sept. 30 from $2.7 billion as of June 30. Bad loans to the sector fell by $79 million to $1.5 billion in the quarter.
The bank said net income attributable to common shareholders rose 10.4 percent to $148 million in the third quarter ended Sept. 30 from $134 million a year earlier.
On a per share basis, Comerica earned 84 cents, handily beating the average analyst expectation of 74 cents per share.
Net interest income rose 6.6 percent to $450 million.
The company also said two-thirds of its planned workforce reduction target would be completed by the end of this year. The company, which has about 8,480 full-time employees, said in July it would cut 9 percent of its workforce.
Up to Monday’s close of $48.06, Comerica’s stock had risen almost 15 percent this year. (Reporting by Nikhil Subba in Bengaluru; Editing by Saumyadeb Chakrabarty)