Making a major change can be hard enough by itself. Throw in some challenging environmental conditions, and things can start to get downright difficult. Today, Comerica (NYSE:CMA) gave investors an update on how it has been navigating through the financial services market.

The bank has been steadily making the transition from a regional bank serving mainly the Midwest to a more geographically diverse organization tapping into some of the hottest markets in the U.S. -- a change that includes moving its headquarters from Detroit to Dallas. Expanding in this way, and trying to break into markets dominated by banking giants like Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), and Citigroup (NYSE:C), could be a tough play even in a good market. But with credit markets coming under pressure lately, there's even more opportunity for a stumble.

Despite the challenges, Comerica delivered a respectable second quarter. Excluding discontinued operations, earnings per share for the quarter rose from $1.19 in 2006 to $1.25 in 2007, topping analysts' estimates of $1.22. The EPS growth was driven primarily by aggressive share repurchasing by Comerica, which bought back almost 2% of its share base over the past year. Net income in the year-over-year comparison edged up by less than 1%.

The bank benefited from higher earning assets and loans and managed to grow its net interest income about 2%, despite a six-basis-point drop in its net interest margin. Provisions for loan losses also constrained Comerica's profit growth in the quarter, as they were bumped up 33% over the prior year. Much of the growth in loan loss provisions continued to come from the challenges in the Midwest market, where auto and commercial real estate loans were a problem.

Overall, the quarter was far from impressive, though it wasn't a poor one either. The challenges coming from the Midwest market will likely continue to plague the bank until the economy in that region shores up. The problems in the Midwest, though, affirm Comerica's strategy of diversifying out into other, better markets. But while relocation of the bank's headquarters may be done before long, there is still plenty of work ahead for Comerica.

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Fool contributor Matt Koppenheffer owns shares of Bank of America, but does not own shares of any of the other companies mentioned. The Fool's disclosure policy has never once been caught with its pants down. Of course, it doesn't actually wear pants ...