) continues with its efforts to boost shareholder value.
Recently, its board of directors announced an increased quarterly
cash dividend of 20 cents per share, up 5% from the prior
dividend of 19 cents. The dividend will be paid on Jul 1, to
common shareholders of record as of Jun 13. Additionally, the
board increased the current share buyback program by 2 million
These actions come following the Federal Reserve's approval of
Comerica's 2014 capital plan under the Comprehensive Capital
Analysis and Review (CCAR) in March. The plan included
share repurchase of up to $236 million for the upcoming four
quarters beginning in the second quarter of 2014 and ending in
the first quarter of the next year.
Comerica has maintained its healthy capital deployment activities
over the years. Earlier, in January, Comerica announced a 12%
increase in its quarterly dividend to 19 cents per share, which
was paid on Apr 1. This increase was part of the company's 2013
The latest boost in its share repurchase authorization reflects
the company's commitment to return value to shareholders with its
strong cash generation capabilities. Further, Comerica's current
capital position may allow it to further enhance shareholder
value. The company's cash and due from banks was $1.19 billion as
of Mar 31, 2014.
Notably, in first-quarter 2014, Comerica repurchased 1.5 million
shares under the existing share repurchase program. This,
combined with dividends, resulted in a total payout of 77% of the
first-quarter net income to shareholders.
Going forward, we expect synergies from Comerica's strategic
acquisitions to support its top-line growth. Moreover, the
company's efficient capital deployment activities in the form of
shares repurchase, regular payouts and dividend hikes seem
impressive as well.
Comerica maintains a strong capital position. Therefore, meeting
higher regulatory requirements will not be difficult for the
Nevertheless, the sluggish economic scenario, still low rate of
interest and a stringent regulatory environment remain challenges
to the company's top-line growth in the coming quarters. Though
the pressure on NIM is likely to ease in the long run with
improvement in interest rates, we do not see signs of respite
Comerica currently carries a Zacks Rank #3 (Hold). Some
better-ranked major regional banks include
Wells Fargo & Company
). All these stocks carry a Zacks Rank #2 (Buy).
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