DALLAS (AP) -- Comerica's net income rose strongly in the second quarter as the bank collected more interest on its growing book of commercial loans.
The company, based in Dallas, said Tuesday that average commercial loans grew by 20 percent since last year, in part because it acquired Sterling Bancshares last summer.
Comerica's net income in the quarter ended June 30 rose to $144 million, or 73 cents per share, from $96 million, or 53 cents per share, in the same period a year earlier.
The company's average loan book grew $959 million from the first quarter. An increase of $1.2 billion in loans to banks and companies was partially offset by a decline in commercial real estate loans.
With more loans outstanding, Comerica was able to collect more interest from its customers. Net interest income, which measures interest income from loans and interest payments to depositors, rose to $435 million from $391 million a year earlier.
Non-interest income, which includes fees and other gains and losses, rose to $211 million from $202 million in 2011. Much of the increase came from an annual incentive payment of $5 million that Comerica receives from a company that issues credit cards on its behalf.
The bank's noninterest expenses rose to $433 million from $411 million a year earlier. Part of the increase came from an $8 million restructuring charge related to the Sterling acquisition. In the same quarter a year earlier, Comerica took a smaller, $5 million charge on the deal.
The results were stronger than Wall Street analysts had expected. They were looking for earnings of 61 cents per share on revenue of $638.2 million, according to FactSet.
The strong quarterly report caused an equity analyst with S&P to boost projections for Comerica's earnings in 2012 and 2013. S&P now expects the company to earn $2.76 per share in 2012, up from an earlier estimate of $2.62. Analysts in a FactSet survey expect earnings of $2.50.
S&P expects the company to earn $3 per share in 2013, up from an earlier estimate of $2.70. FactSet analysts expect $2.69.
S&P raised its 12-month price target for Comerica to $35 from an earlier target of $34.
Comerica shares rose 60 cents, or 2 percent, to $31.41 in early afternoon trading Tuesday.