(Reuters) Comerica Inc said on Tuesday it was planning to exit 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.
The bank in a presentation at a Morgan Stanley conference said 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.
