Comerica Bank has appointed an interim CFO and is currently searching for someone to fill the permanent role, according to a filing. Comerica Inc. disclosed Friday that its finance chief is leaving and treasurer James Herzog has been named interim CFO, a move that comes as the regional lender braces for lower interest rates that could cut into its bottom line.
Dallas-based bank appoints James Herzog as interim CFO
The Dallas-based company said in a regulatory filing that Muneera Carr stopped serving as CFO on Wednesday and Mr. Herzog has taken over. Ms. Carr, who assumed the role early last year, joined the company in 2010 as chief accounting officer and controller. She is expected to leave the company next month, Comerica said.
The departure wasn’t linked to “any issue, concern or disagreement” with accounting, financial reporting or internal controls, Comerica said in a filing with the Securities and Exchange Commission. “Muneera has made many valuable contributions to Comerica, both as chief financial officer and while she served as chief accounting officer,” Chief Executive Curtis C. Farmer said in a statement.
Muneera Carr ceased serving as CFO
An abrupt change in the CFO post could weigh on share prices in the near term, analysts for SunTrust Robinson Humphrey said in a research note Friday. Comerica’s shares rose 1.3% to $65.60 Friday.
Mr. Herzog joined Comerica in 1984. He was named treasurer in 2011, steering the lender’s liquidity and interest rate risks. Comerica said it has launched a search for a permanent CFO.
The company’s next finance chief will have to navigate a lower interest rate environment. The Federal Reserve cut interest rates by one-quarter of a percentage point in July. President Trump has pressured for further cuts in hopes of inoculating the economy from a downturn. Economists expect another quarter-point retreat following meetings next week of Federal Reserve officials.
Comerica is among the lenders most sensitive to lower interest rates because of its heavy concentration of commercial and industrial loans, which produce less income for the lender when interest rates are cut. Commercial loans made up 64% of Comerica’s total loans as of June 30, according to regulatory filings.
Comerica, with main operations in Michigan, California and Texas, in August estimated that a quarter-point rate cut by the Fed would lower its annual net interest income by $60 million to $90 million.
“Our asset sensitivity enhanced our performance as rates increased,” Wendy Bridges, a Comerica spokesperson, said in an interview. “In addition, over the past few years we have significantly improved our efficiency, actively managed our capital levels and maintained our underwriting discipline. These actions have produced strong results and better positioned us to weather a lower rate environment.”
In the quarter ended June 30, Comerica’s net interest income rose 2.2% to $603 million compared with the same period a year earlier. Net income, however, slipped 8.3% to $297 million. Comerica posted earnings per share of $1.94 during the quarter, below the expectations of analysts surveyed by FactSet who forecast $2 a share.