Comerica in Dallas plans to “organically” exit the mortgage warehouse business.
The $91.2 billion-asset company disclosed in a presentation for a banking conference hosted by Morgan Stanley that the exit will be largely completed by the end of this year.
Comerica said the exit should improve capital efficiency and improve its loan-to-deposit ratio by 150 basis points. The strategy should allow for an exit at “full value” compared to selling the portfolio.
Average balances in the mortgage banker finance portfolio decreased by 15% in the first quarter compared to the end of 2022, totaling $1.1 billion on March 31.
The presentation also disclosed that deposits at Comerica have fallen by about $100 million during the second quarter.