Comerica is gaining momentum after a rough start to 2016.
The Dallas company said Tuesday that it earned $149 million in the third quarter, an increase of nearly 10% over the same period last year and up 150% from this year's first quarter, when plunging oil and gas prices forced to sharply boost reserves on loans to energy firms.
Much of the improvement can be attributed to stabilizing energy prices. Though problem energy credits remain elevated, stabilizing prices allowed the company to slash its provision for loan losses to just $16 million in the quarter from $26 million in last year's third quarter and $148 million in the first quarter of this year.
Modest loan growth in sectors outside of energy also helped to boost profits. Net interest income increased nearly 7% year over year, to $450 million, due primarily to higher demand for commercial real estate loans and an increase in lending to mortgage finance firms. Its net interest margin expanded by 12 basis points, to 2.66%.
Comerica also reported significant progress on its previously stated effort to improve efficiency by consolidating branches, reducing headcount, outsourcing certain technology functions and reducing tech applications. The company said it is on pace to reduce overhead by $150 million in 2017 and $200 million in 2018.