Company: CMA
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0000028412-25-000154
Chunk: 206

Company: COMERICA INC
Filing Date: 2025-04-30
Form: 10-Q
Item: Part I, Item 8
Chunk 206
---
 Risk

Allowance for Credit Losses

The allowance for credit losses includes both the allowance for loan losses and the allowance for credit losses on lending-related commitments. The following table presents metrics of the allowance for credit losses and nonperforming loans.

March 31, 2025December 31, 2024Allowance for credit losses as a percentage of total loans1.44 %1.44 %Allowance for credit losses as a multiple of total nonperforming loans2.4x2.4x

Stable credit metrics and relatively benign economic data, offset by increased levels of uncertainty incorporated into the estimate, contributed to an unchanged allowance for credit losses to total loans ratio as of March 31, 2025, compared to December 31, 2024. Lower loan balances in conjunction with the factors above resulted in a $6 million decrease in the allowance for credit losses to $719 million at March 31, 2025 from $725 million at December 31, 2024.

Portfolio credit metrics continued to remain below historical levels as of March 31, 2025, with some metrics improving marginally while others evidenced slight deterioration from December 31, 2024 to March 31, 2025. Criticized loan balances 

47

and criticized loans as a percentage of total loans increased by 2 percent and 20 basis points, respectively, while nonperforming assets decreased by 1 basis point as a percentage of total loans over that period. Net charge-offs for first quarter 2025 totaled 21 basis points as a percentage of average loans, an increase from net charge-offs for fourth quarter 2024 totaling 13 basis points as a percentage of average loans, but remained near the bottom of the range of historical levels. These trends evidenced a resiliency in the Corporation's portfolio, even as elevated interest rates and persistent inflation continued to pressure customer profitability.

Economic forecasts as of March 31, 2025 were relatively unchanged compared to the December 31, 2024 vintages, reflecting benign economic data at quarter-end and improving conditions over the forecast period. A favorable one-quarter forward shift across the forecast timeframe resulted in relatively improved Gross Domestic Product (GDP) growth, unemployment trends and bond spreads across the reasonable and supportable period as of March 31, 2025 compared to December 31, 2024.

The allowance for credit losses incorporates risks not captured in the underlying model, primarily forecast risk. In management's view, forecast risk