Company: CMA
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0000028412-25-000197
Chunk: 5

Company: COMERICA INC
Filing Date: 2025-07-30
Form: 10-Q
Item: Part I, Item 2
Chunk 5
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 lower rates (including the impact of BSBY cessation), partially offset by a $748 million decline in medium- and long-term debt and a $451 million increase in average loans. Net interest income for the three months ended June 30, 2025 was positively impacted by one additional day in the quarter, compared to the three months ended March 31, 2025.

For further discussion of the effects of market rates on net interest income, refer to the "Market and Liquidity Risk" section of this financial review.

Provision for Credit Losses

The provision for credit losses, which includes the provision for loan losses and the provision for credit losses on lending-related commitments, was $44 million for the three months ended June 30, 2025, compared to $20 million for the three months ended March 31, 2025. The allowance for credit losses increased $16 million to $735 million at June 30, 2025, compared to $719 million at March 31, 2025, reflecting loan growth and continued economic uncertainty. As a percentage of total loans, the allowance for credit losses remained consistent at 1.44% at both June 30, 2025 and March 31, 2025.

Net loan charge-offs were $28 million, or 22 basis points as a percentage of average loans, for the three months ended June 30, 2025, an increase of $2 million from $26 million, or 21 basis points as a percentage of average loans, for the three months ended March 31, 2025, reflecting increases in general Middle Market and Technology and Life Sciences, partially offset by declines in Commercial Real Estate and Entertainment. The provision for credit losses on lending-related commitments was $1 million for both the three months ended June 30, 2025 and March 31, 2025.

The provision for credit losses is the amount recorded in earnings to adjust the allowance for credit losses to the level of expected losses estimated using the Corporation's current expected credit loss (CECL) model as of the end of the reporting period. As such, factors impacting the allowance for credit losses during the quarter indirectly determine the amount of provision expense recorded. The following is a summary of the changes to the major components of the allowance for credit losses during the three months ended June 30, 2025:

•Portfolio credit metrics continued to remain below historical levels as of June 30, 2025, with certain metrics improving marginally while others evidenced