Company: CMA
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0000028412-25-000197
Chunk: 119

Company: COMERICA INC
Filing Date: 2025-07-30
Form: 10-Q
Item: Part I, Item 1
Chunk 119
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 information should be read in conjunction with the "Risk Management" section on pages F-19 through F-35 in the Corporation's 2024 Annual Report.

Credit 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.

June 30, 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 loans3.0x2.4x

Stable credit metrics offset by elevated levels of uncertainty incorporated into the estimate resulted in an unchanged allowance for credit losses to total loans ratio as of June 30, 2025 compared to December 31, 2024. Loan growth, in conjunction with the factors above, contributed to a $10 million increase in the allowance for credit losses to $735 million at June 30, 2025 from $725 million at December 31, 2024.

CECL Forecast and Economic Variables at June 30, 2025

The economic forecasts informing the CECL model reflected a moderately weaker outlook after including the impact of new tariff policies and continued to reflect an elevated degree of uncertainty amid ongoing rapid changes in domestic and foreign economic policies. The impact of potential additional tariff increases and changes to federal government operations were still unclear, creating challenges to economic forecasting. The FRB was assumed to gradually lower interest rates over the projection period as they remained vigilant toward inflation. Consumer spending growth continued to moderate amid slower, albeit continued, growth of the real economy. Inflation was anticipated to gradually moderate as a modest margin of slack capacity is expected to open in the labor market. Energy prices were projected to hold at lower levels than seen at the close of the first quarter, with supply outpacing demand and U.S. crude production holding near a record high. Residential real estate property prices were expected to rise at more moderate rates, while commercial real estate prices continued to face headwinds, both of which reflected the long and variable lags through which the FRB's tighter monetary policy prior to the beginning of rate cuts in the third quarter of 2024 affected the real economy.

Downside risks to growth from trade conflicts, cost-of-living pressures on household finances and less expansionary fiscal policy were projected to collectively contribute to slower growth for the remainder of 2025