DOW JONES NEWSWIRES

Comerica Inc. (CMA) posted an 83% plunge in fourth-quarter net income on continued worsening of credit and asset quality as the regional bank plans more job cuts this year.

The Detroit company, which received $2.25 billion from the Treasury Department under the Troubled Asset Relief Program, reported net income of $20 million, or 2 cents a share, compared with $119 million, or 79 cents a share, a year earlier. The latest results included a 12-cent severance-related charge.

Revenue fell 16% to $605 million.

Analysts surveyed by Thomson Reuters were expecting earnings, excluding items, of 24 cents a share on revenue of $668 million.

The economy is taking a toll on banks' commercial loan books. Unlike previous quarters, when commercial credit trends were mixed, results reported so far for the fourth quarter point to a broad deterioration in loans to mid-market and large companies. The damage strikes as bankers are already struggling to hold onto capital.

Comerica's credit-loss provision was $192 million, up 78% from a year ago and up 16% from the third quarter. Net loan charge-offs - loans the bank doesn't think are collectible - climbed to 1.04% of average total loans from 0.50% and 0.90%, respectively. Nonperforming assets - those near default - rose to 1.94% of total loans from 0.83% and 1.71%.

The company said it is freezing 2009 salaries for "the top 20% of our work force," will slow expansion and continue to cut spending amid a "challenged environment." It said it will cut its work force by an additional 5%, mostly by the end of the first quarter.

In mid-December, UBS analyst Matthew O'Connor predicted Comerica and other banks would post a 2009 loss, hurt by "a severe credit cycle in commercial and commercial real estate." He also forecast declining revenue, amid continued competition for deposits as well as lower capital-markets and fee revenue.

Regional banks were considered to be more insulated from credit-market woes than their larger counterparts because they applied more conservative underwriting standards. But as Regions Financial Corp. (RF) Chairman and Chief Executive Dowd Ritter noted Tuesday, "there is no quick fix" for credit-quality issues currently plaguing the entire financial-services industry."

Shares closed Wednesday at $13.86 and there was no premarket trading. The stock is down 30% this month amid another downdraft for financial shares.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com

   
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