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CHICAGO--(BUSINESS
WIRE)--Zacks.com releases the latest Analyst Interview. Today’s interview is with senior analyst Neena Mishra, who
discusses Wilmington Trust (NYSE: WL) and Comerica (NYSE: CMA).
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Wilmington Trust’s (NYSE: WL) 2Q08 operating
earnings of $0.47 per diluted share were two pennies short of consensus. Results
were hurt by 20 bps sequential margin compression and 85.0% sequential increase
in loan loss provisions, which more than offset the growth in the non-interest
income (mainly based on 21.9% increase in revenues for the Corporate Client
Services).
Credit quality deteriorated during the quarter, with both non-performing
assets (up 7 bps sequentially) and net charge-offs (up 14 bps) rising during the
quarter. After reviewing the results, we are reducing our FY08 and FY09
estimates.
Also, Comerica’s (NYSE: CMA) 2Q08 adjusted
earnings from continuing operations of $0.58 per share were four cents short of
our estimate. The miss mainly stemmed from a decline in net interest margin
(down 31 bps sequentially to 2.91%) and a rise in the provision for loan losses.
Comerica is also heavily exposed to the real estate development downcycle,
isn’t it?
This is true. Continued deterioration in the residential real estate
development loan portfolio, mainly in California, resulted in the increase of
nonperforming assets to 1.44% (up 37 bps sequentially) of total loans and
foreclosed property.
As we suspect that the credit related costs will remain high in the coming
quarters and the company may also need to cut its dividend, we have further
lowered our EPS estimates and our six-month target price.
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