Comerica Incorporated’s CMA first-quarter 2016 results recorded a 19% negative earnings surprise on higher provisions and expenses. The company reported earnings per share of 34 cents, missing the Zacks Consensus Estimate of 42 cents. Moreover, the reported figure compared unfavorably with the prior-year quarter earnings of 73 cents per share.Higher expenses, lower non-interest income and increased provision for credit losses were the downsides. However, elevated net interest income and loans balances acted as tailwinds.Net income came in at $60 million, down 55.2% year over year.Furthermore, segment-wise, on a year-over-year basis, net income at the Business Bank and Retail Bank segments decreased 49.7% and 29.4%, respectively, in the quarter, while net income at Wealth Management increased 37.5%. However, the Finance segment reported a loss. Comerica Inc. (CMA) EPS BNRI & Surprise Percent - Last 5 Quarters | FindTheCompany Performance in DetailComerica’s first-quarter net revenue was $693 million, up 4.2% year over year. However, the figure lagged the Zacks Consensus Estimate of $708 million.Net interest income increased nearly 8% on a year-over-year basis to $447 million in the quarter. Moreover, net interest margin inched up 17 basis points (bps) to 2.81%.Total non-interest income came in at $246 million, down 2.4% year over year. Decreased commercial lending fees and other non-interest income mainly led to the decline.Non-interest expenses totaled $460 million, up 1% on a year-over-year basis. The rise was primarily due to higher outside processing fee expenses, software expenses and FDIC insurance expenses. However, lower litigation and advertising expenses mostly offset the rise.As of Mar 31, 2016, total assets and common shareholders' equity were $69 billion and $7.6 billion, respectively, compared with $69.3 billion and $7.5 billion as of Mar 31, 2015.Total loans were slightly up on a year-over-year basis to $48.4 billion. However, total deposits decreased modestly from the prior-year quarter to $56.7 billion.Credit QualityComerica’s credit quality metrics deteriorated in the quarter. Total non-performing assets more than doubled on a year-over-year basis to $714 million. Net loan charge-offs increased significantly on a year-over-year basis to $52 million. Additionally, the allowance for loan losses to total loans ratio was 1.47% as of Mar 31, 2016, up from 1.22% as of Mar 31, 2015.Moreover, provision for credit losses increased significantly year over year to $148 million. The increase in reserves associated with energy exposure contributed to the rise. Allowance for loan losses stood at $724 million, up from $601 million in the prior-year period.Capital PositionAs of Mar 31, 2016, the company's tangible common equity ratio was 10.23%, down 26 bps year over year. Common equity Tier 1 capital ratio stood at 10.56%. This ratio reflects transition provisions and excludes most factors of accumulated other comprehensive income (AOCI).Capital Deployment UpdateComerica’s capital deployment initiatives exhibit its capital strength. During the reported quarter, Comerica repurchased 1.2 million shares worth $42 million under its existing equity repurchase program.Outlook for 2016Excluding energy impact on the provision for credit losses in the first quarter, Comerica kept almost unchanged the outlook for 2016, with the assumption of persistent current economic and low-rate environment and stable energy outlook. Moreover, the impact of any initiatives that might be considered due to the ongoing comprehensive review is not reflected in the outlook.The company expects higher net interest income based on the short-term rate increase in Dec 2015, loan growth and a bigger securities portfolio, partially offset by higher funding costs. Moreover, benefit from the December rise in short-term rates for 2016 is anticipated to be over $90 million, assuming deposit prices remain at current levels.The company expects non-interest income to be slightly higher. Growth in fee income, mainly card fees, aided by higher merchant processing services and government card fees is expected. Moreover, cross-sell opportunities, including wealth management products such as fiduciary and brokerage services, are anticipated to benefit.Non-interest expenses are expected to be moderately higher. Rise in expenses reflects high technology costs and regulatory expenses, outside processing expenses, FDIC insurance expense due to recent regulatory surcharge and high costs on inflationary pressures.Provision for credit losses are expected to be higher, reflecting reserve builds for Energy in first-quarter 2016. Net charge-offs are expected in the range 45–55 bps.Comerica expects average loan growth to be slightly higher, in line with Gross Domestic Product growth. The outlook reflects persistent decrease in Energy business, mostly offset by improvement in other lines of business.Our ViewpointThe consistent growth in revenues is encouraging. Moreover, an improving loan portfolio is expected to offset margin pressure to some extent. Further, the company’s efficient capital deployment activities in the form of shares repurchase, regular payouts and dividend hikes seem impressive. Going forward, we expect synergies from Comerica’s strategic acquisitions to support top-line growth.However, regulatory issues, deteriorating credit metrics and rising expenses remain major concerns. Moreover, exposure to the energy line is acting as a major headwind.Currently, Comerica carries a Zacks Rank #5 (Strong Sell).Performance of Other Major BanksBanking major – JPMorgan Chase & Co. JPM – which kicked started the first-quarter 2016 earnings, reported earnings of $1.35 per share surpassing the Zacks Consensus Estimate of $1.26, which was pretty conservative given the number of downward revisions over the last couple of months. However, the figure reflects a 7% decline from the year-ago quarter, indicating the impact of challenging market conditions.Buoyed by strong top-line growth, Wells Fargo & Company’s WFC first-quarter 2016 earnings recorded a positive surprise of about 1%. Earnings of 99 cents per share beat the Zacks Consensus Estimate by a penny. However, it compared unfavorably with the prior-year quarter’s earnings of $1.04 per share.A fall in operating expenses drove Citigroup Inc. C to deliver a positive earnings surprise of more than 6% in first-quarter 2016. The company’s earnings from continuing operations per share of $1.11 for the quarter outpaced the Zacks Consensus Estimate of $1.04. However, earnings declined 26% on a year-over-year basis.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report JPMORGAN CHASE (JPM): Free Stock Analysis Report COMERICA INC (CMA): Free Stock Analysis Report WELLS FARGO-NEW (WFC): Free Stock Analysis Report CITIGROUP INC (C): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research