Comerica Incorporated (NYSE:CMA) Q1 2023 Earnings Call Transcript

We did increase our commercial real estate reserves this quarter just as a precautionary measure. But again, that commercial real estate book is predominantly multifamily and industrial. Close to half of it is on the construction side. Loan to cost in that book is generally in the 50% to 60% range. So, there’s a tremendous amount of equity and room in those projects to hold a little bit longer should we need to.Peter Winter And then just on the recoveries for net charge?Melinda Chausse Recovery. Yes, I called it the gift that keeps on giving. And quite frankly, recoveries are almost impossible to predict. They’ve continued to surprise us really over the last four or five quarters. So, at some point, we’re going to run off of that. But I would expect that we’ll still see modest levels, but declining of recoveries in the coming quarters.

Mostly the charge-offs have been incredibly low as well. There’s not a lot to recover left.Peter Winter Yes. And just one follow-up question. In the 10-K, you had mentioned possibly looking at resuming buybacks. But I’m just wondering, just given all the uncertainty in the environment, is that kind of on hold for now on buybacks?Jim Herzog I would say buybacks are on hold until further notice. There is a lot of uncertainty in the environment, as you mentioned. Certainly, industry uncertainty. But perhaps even more importantly, regulatory uncertainty for all banks.We just don’t know where this is going. And we want to make sure that if there is any kind of regulatory change on the capital side that we can get there organically, which I believe we likely — very likely will be able to do.

But I think caution is in order in that regard. And so, share buybacks certainly in the sidelines in the foreseeable future.Operator And I will now turn the call back over to Curt Farmer, President, Chairman, and Chief Executive Officer.Curtis Farmer Let me just thank you again for your interest in Comerica, and I hope you have a good day. Thank you.Operator Ladies and gentlemen, that does conclude today’s conference call. Thank you for participating. You may now disconnect.