Comerica Bank's net income surged 50% in the second quarter, but the bank's CEO warned Tuesday that the rapid expansion of Michigan's economy seen earlier this year has not been sustained.
"The growth in the Michigan economy has slowed going into mid-2012," Ralph Babb Jr. told analysts in a conference call.
He said the weaker national economy is impacting auto sales, but the bank expects that pent-up demand for new vehicles will support moderate growth in the state's economy. Comerica is Michigan's second-largest bank in terms of deposits.
In Michigan, Comerica earned $75 million in the second quarter, up 21% from $62 million in the year-ago period. The bank set aside only $1 million dollars to cover bad loans, compared with $15 million in the second quarter of 2011.
Across all of its markets, Dallas-based Comerica earned $144 million, or 73 cents a share, compared with $96 million, or 53 cents a share, in the year-ago period.
In Michigan, Comerica's deposits climbed 5% from the second quarter of 2011 through the second quarter of this year. But the bank did not enjoy any loan growth in the state.
In the first half of this year, Comerica spent $121 million to buy back 4 million of its shares. It also increased its quarterly dividend by 50% to 15 cents a share.
"We have excess capital available, which we are returning to shareholders through dividends and share repurchases," said Karen Parkhill, Comerica's chief financial officer.
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