Comerica Inc. said on Tuesday it was planning to exit the mortgage banker finance business by the end of the year, in a bid to improve the U.S. regional lender's loan-to-deposit ratio and capital efficiency, Reuters reported. The bank, in a presentation at a Morgan Stanley conference, said that the exit will help to blunt the effects of seasonality and cyclicality on its loan portfolio. Shares of the bank rose 5.5% to $43.30 in early trading and were down nearly 39% this year, in the aftermath of the biggest crisis to hit the sector since 2008. Since the collapse of three banks earlier this year following a deposit run, regional lenders have been trying to shore up liquidity to boost investor confidence by shedding loan portfolios in a high-interest-rate environment. Comerica's exit is expected to improve its loan-to-deposit ratio by about 150 basis points at year-end. Earlier this month, Canada's Fairfax Financial Partners agreed to buy a huge chunk of California-based regional lender PacWest Bancorp's real estate loans from property investment firm Kennedy-Wilson for $2.1 billion. In the first quarter, Comerica's average deposits fell about 5% to $67.8 billion from the previous quarter, as spooked customers moved their money out of smaller banks and into the perceived safety of bigger 'too-big-to-fail' Wall Street institutions.
