Comerica is counting on planned expansions in the Southeast and Mountain West to increase the continuity of loan growth in the face of rising interest rates.
The Dallas-based financial institution said Tuesday that average loans increased by $965 million in the first two months of the fourth quarter. third quarter.
Earlier this week, Comerica announced: Expansion plans in the southeast are underway By adding dedicated offices in South Carolina and Georgia. And on Tuesday it mentioned plans to make similar investments in Arizona and Colorado.The $84.2 billion company already has a significant presence in Texas, California, Florida, Arizona and Michigan.
Troy Harvey/Bloomberg
Kurt Farmer, Chairman, President and Chief Executive Officer of Comerica, said:
In addition to its geographic expansion, Comerica is focused on overhauling its digital systems.
Chief Financial Officer Jim Herzog said at the conference that the COVID-19 pandemic has highlighted the importance of digital services for both consumers and commercial organizations.
“Continuing to invest in business, technology, the right people on the ground to grow our bottom line, and product capabilities are all very high priorities for us,” he said. .
He said investments in both technology and new geographies are intended to pay off over the next two to five years. Additional spending was partially offset by cost savings from headcount reductions.
Comerica has reduced its workforce by more than 1,600 since 2012. Earlier this year, we announced that we would be closing 22 branches, which was almost 5%. of its overall retail presence. Over the past decade, the organization has shrunk its real estate footprint by about 1.3 million square feet, according to the company. Third quarter data.
In Tuesday’s remarks, Comerica executives also spoke of pressure on deposits as interest rates continue to rise.
Comerica reported a 2.3% decline from the third quarter to $71.3 billion in the first two months of the fourth quarter, so previous forecasts for average deposit trends remained correct.
To offset losses on deposits, the company emphasizes maintaining relationships with existing customers and balancing its liquidity position with funding costs, Farmer said. These moves brought the cost of interest-bearing deposits to 20 basis points in the third quarter. Farmer said this is an increase from his 6 basis points in 2021, but is still lower than costs reported by many of his competitors.
“This strategy resulted in the lowest cost of interest-bearing deposits compared to our peers in the third quarter,” he said.
