COMERICA INCORPORATED 
By In the news release, Comerica Reports Fourth Quarter 2011 Net Income of
Comerica Reports Fourth Quarter 2011 Net Income of $96 Million
Period-end Total Loan Growth of $1.5 Billion ; Commercial Loans Increased $1.9 Billion
Net Interest Income up Five Percent
Record Deposits of $47.8 Billion
Repurchased 4.1 Million Shares(1) in 2011
DALLAS, Jan. 20, 2012 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported fourth quarter 2011 net income of $96 million, a decrease of $2 million compared to $98 million for the third quarter 2011. Fourth quarter 2011 included merger and restructuring charges of $37 million ($23 million, after tax; $0.12 per diluted share) associated with the acquisition of Sterling Bancshares, Inc. (Sterling), completed on July 28, 2011, compared to $33 million ($21 million, after tax; $0.11 per diluted share) in the third quarter 2011.
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(dollar
amounts
in
millions,
except
per
share
data) 4th Qtr '11 3rd Qtr '11 4th Qtr '10
---------- ----------- ----------- -----------
Net
interest
income $444 $423 $405
Provision
for loan
losses 19 38 57
Noninterest
income 182 201 215
Noninterest
expenses
(a) 478 460 437
Provision
for
income
taxes 33 28 30
Net
income 96 98 96
Net
income
attributable
to
common
shares 95 97 95
Diluted
income
per
common
share 0.48 0.51 0.53
Average
diluted
shares
(in
millions) 197 192 178
Tier 1
common
capital
ratio
(c) 10.31% (b) 10.57% 10.13%
Tangible
common
equity
ratio
(c) 10.27 10.43 10.54
(a) Included restructuring expenses of $37 million
and $33 million in the fourth and third quarters of
2011, respectively, associated with the acquisition
of Sterling.
(b) December 31, 2011 ratio is estimated.
(c) See Reconciliation of Non-GAAP Financial
Measures.
--------------------------------------------
"We were pleased to see total loan growth of $1.5 billion, or 4 percent, on a period-end basis," said Ralph W. Babb Jr., chairman and chief executive officer. "The growth was driven by a $1.9 billion, or 8 percent, increase in commercial loans, particularly in National Dealer Services, Mortgage Banker Finance, Energy Lending, Technology and Life Sciences, and Global Corporate Banking.
"We had record deposit levels of $47.8 billion at year-end, an increase of $303 million from the third quarter. In addition, our net interest income increased $21 million, or 5 percent, primarily driven by an increase in average earning assets. We continue to be pleased by the broad-based improvement in credit quality, which resulted in a decrease in the provision for loan losses."
"With respect to our acquisition of Sterling, we announced the successful completion of systems integrations and the opening of former Sterling branches as Comerica banking centers on November 14, 2011," said Babb. "All former Sterling customers can now bank at any Comerica banking center, with complete access to our full line of extended product and service offerings. This acquisition continues to be a great fit, as the former Sterling's size, geographic footprint and customer focus uniquely fits our strategy and expands our presence in Texas.
"In the fourth quarter, we repurchased 1.6 million shares, and repurchased a total of 4.1 million shares in 2011 under the share repurchase program. Combined with dividends, this resulted in a total return to shareholders of 47 percent of net income. We continue to be an active capital manager and believe we are approaching capital management from a position of strength. As required, we submitted our Capital Plan to the Federal Reserve on January 9, 2012. As previously announced, we are targeting a first quarter 2012 total payout ratio of up to 50 percent of net income through the share repurchase program and dividends."
(1) Shares repurchased under Comerica's share repurchase program.
Fourth Quarter and Full-Year 2011 Overview
Fourth Quarter 2011 Highlights Compared to Third Quarter 2011
-- Period-end total loans increased $1.5 billion, or 4 percent, from
September 30, 2011 to December 31, 2011, primarily reflecting an
increase of $1.9 billion, or 8 percent, in commercial loans, partially
offset by a decrease of $390 million in commercial real estate loans
(commercial mortgage and real estate construction loans). The increase
in commercial loans was primarily driven by increases in National Dealer
Services, Mortgage Banker Finance, Energy Lending, Technology and Life
Sciences, and Global Corporate Banking. Average total loans increased
$1.4 billion, or 3 percent, in the fourth quarter, in part due to one
additional month of Sterling.
-- Period-end deposits increased $303 million, or one percent, primarily
reflecting an increase of $648 million in noninterest-bearing deposits,
partially offset by decreases in savings ($247 million) and customer
certificates of deposit ($172 million). Average total deposits increased
$2.7 billion, in part due to one additional month of Sterling in the
fourth quarter.
-- Net interest income of $444 million increased $21 million, or 5 percent,
compared to the third quarter, primarily resulting from an increase in
average earning assets of $2.4 billion.
-- Credit quality continued to improve in the fourth quarter 2011. Net
credit-related charge-offs decreased $17 million to $60 million. The
provision for loan losses decreased to $19 million in the fourth quarter
2011, compared to $38 million in the third quarter 2011.
-- Noninterest income decreased $19 million to $182 million in the fourth
quarter 2011, compared to $201 million for the third quarter 2011,
primarily due to a $16 million decrease in net securities gains
(losses), reflecting a net loss of $4 million in the fourth quarter 2011
compared to a net gain of $12 million in the third quarter 2011.
-- Noninterest expenses increased $18 million to $478 million in the fourth
quarter 2011, compared to $460 million in the third quarter 2011,
primarily due to increases in severance and related expenses ($5
million) and merger and restructuring charges ($4 million), as well as
one additional month of Sterling expenses (approximately $8 million).
Full-Year 2011 Highlights Compared to Full-Year 2010
-- Net income of $393 million for 2011 increased $116 million, or 42
percent, compared to 2010.
-- Period-end total loans increased $2.4 billion, or 6 percent, from
year-end 2010 to year-end 2011, reflecting the acquisition of Sterling
and primarily including a net increase of $2.9 billion, or 13 percent,
in commercial loans, partially offset by a net decrease of $223 million
in commercial real estate loans. The increase in commercial loans was
primarily driven by increases in Mortgage Banker Finance, Energy Lending
and Technology and Life Sciences, as well as increases in Middle Market
and Global Corporate Banking. Average loans declined $442 million in
2011.
-- Period-end deposits increased $7.3 billion, or 18 percent, in part due
to the acquisition of Sterling. Average total deposits increased $4.3
billion.
-- Net interest income increased $7 million in 2011, compared to 2010, as
the benefit provided by accretion of the purchase discount on the
acquired Sterling loan portfolio in 2011 and an increase in average
earning assets of $1.1 billion was largely offset by decreased yields on
mortgage-backed investment securities and a decrease in business loan
swap income.
-- Credit quality improved significantly. The provision for loan losses
declined $327 million to $153 million in 2011, compared to 2010. Net
credit-related charge-offs decreased $236 million to $328 million.
-- Noninterest income increased $3 million compared to 2010.
-- Noninterest expenses increased $122 million compared to 2010. 2011
included Sterling-related merger and restructuring charges of $75
million ($47 million, after-tax; $0.25 per diluted share) and five
months of Sterling expenses.
-- Repurchases of 4.1 million shares in 2011, combined with dividends,
returned 47 percent of 2011 net income to shareholders.
Net Interest Income
(dollar amounts
in millions) 4th Qtr '11 3rd Qtr '11 4th Qtr '10
--------------- ----------- ----------- -----------
Net interest
income $444 $423 $405
Net interest
margin 3.19% 3.18% 3.29%
Selected average
balances (a):
Total earning
assets $55,676 $53,243 $49,102
Total investment
securities 9,781 8,158 7,112
Total loans 41,454 40,098 39,999
Total deposits 47,779 45,098 40,356
Total
noninterest-
bearing deposits 19,176 17,511 15,607
(a) Average balances in 3rd quarter 2011 included
Sterling balances from July 28 through September 30,
2011.
-----------------------------------------------------
-- The $21 million increase in net interest income in the fourth quarter
2011, when compared to the third quarter 2011, resulted primarily from
an increase in average earning assets of $2.4 billion, partially offset
by decreasing yields on mortgage-backed investment securities and a
decrease in the accretion of the purchase discount on the acquired
Sterling loan portfolio. Decreasing yields on the mortgage-backed
investment securities portfolio reflected the impact of lower yields on
securities purchased to reinvest prepayments. Accretion of the purchase
discount was $26 million in the fourth quarter 2011, compared to $27
million in the third quarter.
-- Average earning assets increased $2.4 billion in the fourth quarter
2011, compared to the third quarter 2011, reflecting increases of $1.6
billion in average investment securities available-for-sale and $1.4
billion in average loans, partially offset by a $584 million decrease in
average Federal Reserve Bank deposits. The increase in average loans
included one additional month of Sterling in the fourth quarter and
primarily reflected increases in commercial loans in Mortgage Banker
Finance, Energy Lending, National Dealer Services, and Technology and
Life Sciences.
-- Average deposits increased $2.7 billion in the fourth quarter 2011,
compared to the third quarter 2011, in part due to one additional month
of Sterling. Average noninterest-bearing deposits increased $1.7 billion
and average money market and NOW deposits increased $1.1 billion.
Noninterest Income
Noninterest income was $182 million for the fourth quarter 2011, compared to $201 million for the third quarter 2011. The $19 million decrease was primarily due to decreases in net securities gains (losses) ($16 million) and card fees ($6 million), due primarily to the implementation of regulatory limits on debit card transaction processing fees, partially offset by an increase in deferred compensation asset returns ($5 million) (offset by an increase in deferred compensation plan costs in noninterest expenses). Net securities gains (losses) in the third quarter 2011 reflected net gains of $12 million due primarily to the repositioning of the acquired Sterling investment securities portfolio, compared to a net loss of $4 million in the fourth quarter 2011 that resulted primarily from a $5 million charge related to a derivative contract tied to the conversion rate of Visa Class B shares.
Noninterest Expenses
Noninterest expenses totaled $478 million in the fourth quarter 2011, an increase of $18 million compared to $460 million in the third quarter 2011. The increase was primarily due to increases in deferred compensation plan costs ($5 million) (offset by an increase in deferred compensation asset returns in noninterest income), severance and related expenses ($5 million) and merger and restructuring charges ($4 million), as well as one additional month of Sterling expenses (approximately $8 million).
Credit Quality
"We continued to see steady improvement in credit trends in the fourth quarter," said Babb. "This was the 10th consecutive quarter of decline in net charge-offs, with a $17 million decrease. The decline in net charge-offs was larger than expected, primarily the result of higher recoveries in the quarter. Other credit metrics were in line with expectations. Nonperforming assets were under $1 billion for the first time since the fourth quarter of 2008. The former Sterling loan portfolio has performed as expected. As a result of the overall improvements in credit quality, the provision for loan losses declined to $19 million."
(dollar amounts in 4th Qtr 3rd Qtr 4th Qtr
millions) '11 '11 '10
------------------ ------- ------- -------
Net credit-related
charge-offs $60 $77 $113
Net credit-related
charge-offs/Average
total loans 0.57% 0.77% 1.13%
Provision for loan losses $19 $38 $57
Provision for credit
losses on lending-
related
commitments (1) (3) (3)
--- --- ---
Total provision for credit
losses 18 35 54
Nonperforming loans (a) 887 958 1,123
Nonperforming assets
(NPAs) (a) 981 1,045 1,235
NPAs/Total loans and
foreclosed property 2.29% 2.53% 3.06%
Loans past due 90 days or
more and still accruing $58 $81 $62
Allowance for loan losses 726 767 901
Allowance for credit
losses on
lending-related
commitments (b) 26 27 35
--- --- ---
Total allowance for credit
losses 752 794 936
Allowance for loan losses/
Total loans (c) 1.70% 1.86% 2.24%
Allowance for loan losses/
Nonperforming loans 82 80 80
(a) Excludes loans acquired with credit impairment.
(b) Included in "Accrued expenses and other liabilities"
on the consolidated balance sheets.
(c) Reflects the impact of acquired loans, which were
initially recorded at fair value, with no related
allowance for loan losses.
-----------------------------------------------------
-- Net credit-related charge-offs decreased $17 million to $60 million in
the fourth quarter 2011, from $77 million in the third quarter 2011. The
decrease in net credit-related charge-offs primarily reflected decreases
in Small Business Banking ($12 million), Middle Market ($11 million) and
Commercial Real Estate ($7 million), partially offset by an increase in
Technology and Life Sciences ($10 million).
-- Internal watch list loans declined $502 million in the fourth quarter
2011, to $4.5 billion at December 31, 2011, and nonperforming assets
decreased $64 million.
-- During the fourth quarter 2011, $99 million of borrower relationships
greater than $2 million were transferred to nonaccrual status, a
decrease of $31 million from the third quarter 2011. Of the transfers
of borrower relationships greater than $2 million to nonaccrual in the
fourth quarter 2011, $27 million were from Commercial Real Estate, $24
million were from Private Banking and $21 million were from Global
Corporate Banking.
-- Nonperforming loans decreased $71 million, compared to September 30,
2011, to $887 million, or 2.08 percent of total loans, at December 31,
2011.
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $61.0 billion and $6.9 billion, respectively, at December 31, 2011, compared to $60.9 billion and $7.0 billion, respectively, at September 30, 2011. There were approximately 197 million common shares outstanding at December 31, 2011. Comerica repurchased 1.6 million and 4.1 million shares of common stock in the open market in the fourth quarter and full-year 2011, respectively, under the share repurchase program.
Comerica's tangible common equity ratio was 10.27 percent at December 31, 2011, a decrease of 16 basis points from September 30, 2011. The estimated Tier 1 common capital ratio decreased 26 basis points, to 10.31 percent at December 31, 2011, from September 30, 2011.
Full-Year 2012 Outlook Compared to Full-Year 2011
For 2012, management expects the following, assuming a continuation of the current economic environment:
-- Average loans increasing moderately.
-- Net interest income increasing moderately.
-- Net credit-related charge-offs declining and a relatively stable
provision for credit losses.
-- Noninterest income relatively stable.
-- Noninterest expenses relatively stable.
Business Segments
Comerica's operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank, and Wealth Management. The Finance Division is also included as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at December 31, 2011 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses fourth quarter 2011 results compared to third quarter 2011.
The following table presents net income (loss) by business segment.
(dollar amounts in 4th Qtr 3rd Qtr 4th Qtr
millions) '11 '11 '10
------------------ ------- ------- -------
Business Bank $201 94% $179 86% $174 117%
Retail Bank 10 4 19 9 (14) (10)
Wealth Management 5 2 11 5 (10) (7)
----------------- --- --- --- --- --- ---
216 100% 209 100% 150 100%
Finance (95) (91) (60)
Other (a) (25) (20) 6
--------- --- --- ---
Total $96 $98 $96
----- --- --- ---
(a) Includes discontinued operations and items not directly
associated with the three major business segments or the
Finance Division.
-----------------------------------------------------------
Business Bank
(dollar amounts in 4th Qtr 3rd Qtr 4th Qtr
millions) '11 '11 '10
------------------ ------- ------- -------
Net interest income
(FTE) $382 $363 $341
Provision for loan
losses (4) 20 8
Noninterest income 73 77 81
Noninterest expenses 161 162 158
Net income 201 179 174
Net credit-related
charge-offs 32 40 73
Selected average
balances:
Assets 32,150 30,608 30,489
Loans 31,257 29,955 29,947
Deposits 23,296 21,759 19,892
Net interest margin 4.83% 4.81% 4.51%
------------------- ---- ---- ----
-- Average loans increased $1.3 billion, primarily reflecting increases in
Mortgage Banker Finance, Energy Lending, National Dealer Services,
Technology and Life Sciences and Commercial Real Estate, partially
offset by a decrease in Global Corporate Banking.
-- Average deposits increased $1.5 billion, reflecting increases across
most business lines, primarily Middle Market, Energy Lending, the
Financial Services Division, Technology and Life Sciences and Global
Corporate Banking.
-- Net interest income of $382 million increased $19 million, primarily due
to increases in loan and deposit balances as well as an increase in the
benefit provided by accretion of the purchase discount on the acquired
Sterling loan portfolio.
-- The provision for loan losses decreased $24 million, primarily
reflecting decreases in Middle Market and Commercial Real Estate,
partially offset by an increase in Technology and Life Sciences.
-- Noninterest income decreased $4 million, primarily due to a decrease in
warrant income.
Retail Bank
(dollar amounts in 4th Qtr 3rd Qtr 4th Qtr
millions) '11 '11 '10
------------------ ------- ------- -------
Net interest income
(FTE) $176 $173 $134
Provision for loan
losses 15 17 29
Noninterest income 35 47 43
Noninterest expenses 182 174 169
Net income (loss) 10 19 (14)
Net credit-related
charge-offs 16 28 22
Selected average
balances:
Assets 6,250 5,984 5,647
Loans 5,571 5,483 5,192
Deposits 20,715 19,792 17,271
Net interest margin 3.37% 3.46% 3.07%
------------------- ---- ---- ----
-- Average loans increased $88 million, primarily due to an increase in the
Texas market, partially offset by declines in the Midwest and Western
markets.
-- Average deposits increased $923 million, primarily due to one additional
month of Sterling in the fourth quarter.
-- Net interest income of $176 million increased $3 million, primarily due
to an increase in average loan and deposit balances, partially offset by
a decrease in the accretion of the purchase discount on the acquired
Sterling loan portfolio.
-- The provision for loan losses decreased $2 million, primarily reflecting
a decline in Small Business Banking, partially offset by an increase in
Personal Banking.
-- Noninterest income declined $12 million, primarily due to a decrease in
card fees, reflecting the implementation of regulatory limits on debit
card transaction processing fees, and a $5 million charge related to a
derivative contract tied to the conversion rate of Visa Class B shares.
-- Noninterest expenses increased $8 million, primarily due to one
additional month of Sterling noninterest expense.
Wealth Management
(dollar amounts in 4th Qtr 3rd Qtr 4th Qtr
millions) '11 '11 '10
------------------ ------- ------- -------
Net interest income
(FTE) $46 $45 $42
Provision for loan
losses 10 6 23
Noninterest income 55 56 59
Noninterest expenses 83 78 93
Net income (loss) 5 11 (10)
Net credit-related
charge-offs 12 9 18
Selected average
balances:
Assets 4,672 4,674 4,834
Loans 4,618 4,652 4,820
Deposits 3,400 3,198 2,730
Net interest margin 4.00% 3.85% 3.43%
------------------- ---- ---- ----
-- Average loans decreased $34 million.
-- Average deposits increased $202 million, primarily reflecting increases
in the Midwest, Western and Texas markets.
-- Net interest income of $46 million increased $1 million, primarily due
to an increase in average deposit balances.
-- The provision for loan losses increased $4 million.
-- Noninterest expenses increased $5 million, primarily due to an increase
in other real estate expenses and a charge related to technology
upgrades.
Geographic Market Segments
Comerica also provides market segment results for four primary geographic markets: Midwest, Western, Texas and Florida. In addition to the four primary geographic markets, Other Markets and International are also reported as market segments. The financial results below are based on methodologies in effect at December 31, 2011 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses fourth quarter 2011 results compared to third quarter 2011.
The following table presents net income (loss) by market segment.
(dollar amounts in 4th Qtr 3rd Qtr 4th Qtr
millions) '11 '11 '10
------------------ ------- ------- -------
Midwest $53 25% $59 28% $35 23%
Western 65 30 50 24 41 28
Texas 55 26 64 30 16 11
Florida (1) (1) 1 1 1 -
Other Markets 32 15 23 11 48 32
International 12 5 12 6 9 6
------------- --- --- --- --- --- ---
216 100% 209 100% 150 100%
Finance & Other
Businesses (a) (120) (111) (54)
--------------- ---- ---- ---
Total $96 $98 $96
----- --- --- ---
(a) Includes discontinued operations and items not directly
associated with the geographic markets.
-----------------------------------------------------------
Midwest Market
(dollar amounts in 4th Qtr 3rd Qtr 4th Qtr
millions) '11 '11 '10
------------------ ------- ------- -------
Net interest income
(FTE) $201 $199 $202
Provision for loan
losses 20 21 46
Noninterest income 85 96 99
Noninterest expenses 185 183 201
Net income 53 59 35
Net credit-related
charge-offs 32 33 52
Selected average
balances:
Assets 13,980 14,123 14,506
Loans 13,725 13,873 14,219
Deposits 19,076 18,511 17,959
Net interest margin 4.18% 4.27% 4.45%
------------------- ---- ---- ----
-- Average loans decreased $148 million, as an increase in National Dealer
Services was more than offset by declines in Small Business Banking,
Middle Market, Global Corporate Banking and Personal Banking.
-- Average deposits increased $565 million, primarily due to increases in
the Financial Services Division and Middle Market.
-- Net interest income increased $2 million, primarily due to an increase
in average deposits.
-- The provision for loan losses decreased $1 million, primarily reflecting
a decrease in Middle Market, partially offset by increases in Commercial
Real Estate, Small Business Banking, and Private Banking.
-- Noninterest income decreased $11 million, primarily due to a decline in
card fees and a $4 million charge related to a derivative contract tied
to Visa Class B shares, as previously described in the Retail Bank
section.
Western Market
(dollar amounts in 4th Qtr 3rd Qtr 4th Qtr
millions) '11 '11 '10
------------------ ------- ------- -------
Net interest income
(FTE) $170 $166 $158
Provision for loan
losses (12) 14 11
Noninterest income 33 32 35
Noninterest expenses 109 105 109
Net income 65 50 41
Net credit-related
charge-offs 5 32 43
Selected average
balances:
Assets 12,266 12,110 12,698
Loans 12,026 11,889 12,497
Deposits 13,671 12,975 12,448
Net interest margin 4.92% 5.06% 5.01%
------------------- ---- ---- ----
-- Average loans increased $137 million, primarily due to increases in
Technology and Life Sciences and National Dealer Services, partially
offset by a decrease in Middle Market.
-- Average deposits increased $696 million, primarily reflecting increases
in Middle Market, Technology and Life Sciences, Global Corporate Banking
and Private Banking.
-- Net interest income increased $4 million, primarily due to an increase
in average deposits.
-- The provision for loan losses decreased $26 million, primarily
reflecting decreases in Small Business Banking, Commercial Real Estate
and Middle Market.
-- Noninterest expenses increased $4 million, primarily due to increases in
salaries and benefits expenses and other real estate expenses.
Texas Market
(dollar amounts in 4th Qtr 3rd Qtr 4th Qtr
millions) '11 '11 '10
------------------ ------- ------- -------
Net interest income
(FTE) $158 $143 $80
Provision for loan
losses 8 (7) 15
Noninterest income 26 29 27
Noninterest expenses 89 80 67
Net income 55 64 16
Net credit-related
charge-offs 4 2 9
Selected average
balances:
Assets 9,712 8,510 6,653
Loans 8,952 8,145 6,435
Deposits 10,333 8,865 5,557
Net interest margin 6.07% 6.40% 4.91%
------------------- ---- ---- ----
-- Average loans increased $807 million, primarily reflecting increases in
Energy Lending, Small Business Banking, Commercial Real Estate and
Middle Market, in part due to one additional month of Sterling in the
fourth quarter.
-- Average deposits increased $1.5 billion, primarily reflecting one
additional month of Sterling.
-- Net interest income increased $15 million, primarily due to one
additional month of Sterling.
-- The provision for loan losses increased $15 million, primarily
reflecting increases in Middle Market and Small Business Banking.
-- Noninterest income decreased $3 million, primarily due to a decrease in
warrant income.
-- Noninterest expenses increased $9 million, primarily due to one
additional month of Sterling.
Florida Market
(dollar amounts in 4th Qtr 3rd Qtr 4th Qtr
millions) '11 '11 '10
------------------ ------- ------- -------
Net interest income
(FTE) $11 $11 $11
Provision for loan
losses 4 2 4
Noninterest income 4 4 3
Noninterest expenses 13 11 9
Net income (1) 1 1
Net credit-related
charge-offs 7 5 7
Selected average
balances:
Assets 1,435 1,450 1,587
Loans 1,457 1,477 1,612
Deposits 435 404 375
Net interest margin 2.89% 2.94% 2.64%
------------------- ---- ---- ----
-- Average loans decreased $20 million, as an increase in National Dealer
Services was more than offset by decreases in Commercial Real Estate and
Private Banking.
-- The provision for loan losses increased $2 million, primarily reflecting
an increase in Commercial Real Estate.
Conference Call and Webcast
Comerica will host a conference call to review fourth quarter and full-year 2011 financial results at 7 a.m. CT Friday, January 20, 2012. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 37433486). The call and supplemental financial information can also be accessed on the Internet at www.comerica.com. A telephone replay will be available approximately two hours following the conference call through January 31, 2012. The conference call replay can be accessed by calling (855) 859-2056 or (404) 537-3406 (event ID No. 37433486). A replay of the Webcast can also be accessed via Comerica's "Investor Relations" page at www.comerica.com.
Comerica Incorporated is a financial services company headquartered in Dallas, Texas, and strategically aligned by three major business segments: the Business Bank, the Retail Bank, and Wealth Management. Comerica focuses on relationships and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico.
This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Comerica's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconcilement to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Forward-looking Statements
Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "believes," "feels," "expects," "estimates," "seeks," "strives," "plans," "intends," "outlook," "forecast," "position," "target," "mission," "assume," "achievable," "potential," "strategy," "goal," "aspiration," "opportunity," "initiative," "outcome," "continue," "remain," "maintain," "on course," "trend," "objective," "pending," "looks forward" and variations of such words and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "might," "can," "may" or similar expressions, as they relate to Comerica or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of Comerica's management based on information known to Comerica's management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica's management for future or past operations, products or services, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability. Such statements reflect the view of Comerica's management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Comerica's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in general economic, political or industry conditions and related credit and market conditions; changes in trade, monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; adverse conditions in the capital markets; the interdependence of financial service companies; changes in regulation or oversight, including the effects of recently enacted legislation, actions taken by or proposed by the U.S. Treasury, the Board of Governors of the Federal Reserve System, the Texas Department of Banking and the Federal Deposit Insurance Corporation, legislation or regulations enacted in the future, and the impact and expiration of such legislation and regulatory actions; unfavorable developments concerning credit quality; the acquisition of Sterling Bancshares, Inc., or any future acquisitions; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries in which Comerica has a concentration of loans, including, but not limited to, the automotive production industry and the real estate business lines; the implementation of Comerica's strategies and business models, including the anticipated performance of any new banking centers and the implementation of revenue enhancements and efficiency improvements; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties or information security problems; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; the entry of new competitors in Comerica's markets; changes in customer borrowing, repayment, investment and deposit practices; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings; the effectiveness of methods of reducing risk exposures; the effects of war and other armed conflicts or acts of terrorism and the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods. Comerica cautions that the foregoing list of factors is not exclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to "Item 1A. Risk Factors" beginning on page 16 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2010, "Item 1A. Risk Factors" beginning on page 65 of Comerica's Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, "Item 1A. Risk Factors" beginning on page 74 of Comerica's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 and "Item 1A. Risk Factors" beginning on page 81 of Comerica's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011. Forward-looking statements speak only as of the date they are made. Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this news release or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended Years Ended
------------------
December September December
31, 30, 31, December 31,
(in millions,
except per
share data) 2011 2011 2010 2011 2010
------------- ---- ---- ---- ---- ----
PER COMMON SHARE AND
COMMON STOCK DATA
Diluted net
income $0.48 $0.51 $0.53 $2.09 $0.88
Cash dividends
declared 0.10 0.10 0.10 0.40 0.25
Common
shareholders'
equity (at
period end) 34.80 34.94 32.82
Average diluted
shares (in
thousands) 196,729 191,634 178,266 186,168 173,026
--------------- ------- ------- ------- ------- -------
KEY RATIOS
Return on
average common
shareholders'
equity 5.51% 5.91% 6.53% 6.18% 2.74%
Return on
average assets 0.63 0.67 0.71 0.69 0.50
Tier 1 common
capital ratio
(a) (b) 10.31 10.57 10.13
Tier 1 risk-
based capital
ratio (b) 10.35 10.65 10.13
Total risk-
based capital
ratio (b) 14.18 14.84 14.54
Leverage ratio
(b) 10.92 11.41 11.26
Tangible common
equity ratio
(a) 10.27 10.43 10.54
--------------- ----- ----- -----
AVERAGE BALANCES
Commercial loans $23,515 $22,127 $21,464 $22,208 $21,090
Real estate
construction loans:
Commercial Real
Estate business
line (c) 1,189 1,291 1,944 1,429 2,404
Other business
lines (d) 430 408 427 414 435
Total real
estate
construction
loans 1,619 1,699 2,371 1,843 2,839
Commercial mortgage
loans:
Commercial Real
Estate business
line (c) 2,552 2,415 2,016 2,217 2,000
Other business
lines (d) 7,836 7,860 7,949 7,808 8,244
Total commercial
mortgage loans 10,388 10,275 9,965 10,025 10,244
Residential
mortgage loans 1,591 1,606 1,600 1,580 1,607
Consumer loans 2,294 2,292 2,367 2,278 2,429
Lease financing 919 936 1,044 950 1,086
International
loans 1,128 1,163 1,188 1,191 1,222
----- ----- ----- ----- -----
Total loans 41,454 40,098 39,999 40,075 40,517
Earning assets 55,676 53,243 49,102 52,121 51,004
Total assets 61,045 58,238 53,756 56,917 55,553
Noninterest-
bearing
deposits 19,176 17,511 15,607 16,994 15,094
Interest-
bearing
deposits 28,603 27,587 24,749 26,768 24,392
Total deposits 47,779 45,098 40,356 43,762 39,486
Common
shareholders'
equity 6,947 6,633 5,870 6,351 5,625
Total
shareholders'
equity 6,947 6,633 5,870 6,351 6,068
-------------- ----- ----- ----- ----- -----
NET INTEREST INCOME
Net interest
income (fully
taxable
equivalent
basis) $445 $424 $406 $1,657 $1,651
Fully taxable
equivalent
adjustment 1 1 1 4 5
Net interest
margin (fully
taxable
equivalent
basis) 3.19% 3.18% 3.29% 3.19% 3.24%
-------------- ---- ---- ---- ---- ----
CREDIT QUALITY
Nonaccrual loans $860 $929 $1,080
Reduced-rate
loans 27 29 43
--- --- ---
Total
nonperforming
loans (e) 887 958 1,123
Foreclosed
property 94 87 112
--- --- ---
Total
nonperforming
assets (e) 981 1,045 1,235
Loans past due
90 days or more
and still
accruing 58 81 62
Gross loan
charge-offs 85 90 140 $423 $627
Loan recoveries 25 13 27 95 63
--- --- --- --- ---
Net loan charge-
offs 60 77 113 328 564
Lending-related
commitment
charge-offs - - - - -
--- --- --- --- ---
Total net
credit-related
charge-offs 60 77 113 328 564
Allowance for
loan losses 726 767 901
Allowance for
credit losses
on lending-
related
commitments 26 27 35
--- --- ---
Total allowance
for credit
losses 752 794 936
Allowance for
loan losses as
a percentage of
total loans (f) 1.70% 1.86% 2.24%
Net loan charge-
offs as a
percentage of
average total
loans 0.57 0.77 1.13 0.82% 1.39%
Net credit-
related charge-
offs as a
percentage of
average total
loans 0.57 0.77 1.13 0.82 1.39
Nonperforming
assets as a
percentage of
total loans and
foreclosed
property (e) 2.29 2.53 3.06
Allowance for
loan losses as
a percentage of
total
nonperforming
loans 82 80 80
---------------- --- --- ---
(a) See Reconciliation of Non-GAAP Financial Measures.
(b) December 31, 2011 ratios are estimated.
(c) Primarily loans to real estate investors and developers.
(d) Primarily loans secured by owner-occupied real estate.
(e) Excludes loans acquired with credit-impairment.
(f) Reflects the impact of acquired loans, which were initially
recorded at fair value with no related allowance for loan losses.
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
December September December
31, 30, 31,
(in millions, except
share data) 2011 2011 2010
-------------------- ---- ---- ----
(unaudited) (unaudited)
ASSETS
Cash and due from
banks $982 $981 $668
Interest-bearing
deposits with banks 2,574 4,217 1,415
Other short-term
investments 149 137 141
Investment securities
available-for-sale 10,104 9,732 7,560
Commercial loans 24,996 23,113 22,145
Real estate
construction loans 1,533 1,648 2,253
Commercial mortgage
loans 10,264 10,539 9,767
Residential mortgage
loans 1,526 1,643 1,619
Consumer loans 2,285 2,309 2,311
Lease financing 905 927 1,009
International loans 1,170 1,046 1,132
------------------- ----- ----- -----
Total loans 42,679 41,225 40,236
Less allowance for
loan losses (726) (767) (901)
------------------ ---- ---- ----
Net loans 41,953 40,458 39,335
Premises and
equipment 675 685 630
Customers' liability
on acceptances
outstanding 22 8 9
Accrued income and
other assets 4,549 4,670 3,909
------------------ ----- ----- -----
Total assets $61,008 $60,888 $53,667
------------ ------- ------- -------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Noninterest-bearing
deposits $19,764 $19,116 $15,538
Money market and NOW
deposits 20,311 20,237 17,622
Savings deposits 1,524 1,771 1,397
Customer certificates
of deposit 5,808 5,980 5,482
Other time deposits - 45 -
Foreign office time
deposits 348 303 432
------------------- --- --- ---
Total interest-bearing deposits 27,991 28,336 24,933
------------------------------- ------ ------ ------
Total deposits 47,755 47,452 40,471
Short-term borrowings 70 164 130
Acceptances
outstanding 22 8 9
Accrued expenses and
other liabilities 1,349 1,304 1,126
Medium- and long-
term debt 4,944 5,009 6,138
----------------- ----- ----- -----
Total liabilities 54,140 53,937 47,874
Common stock -$5 par
value:
Authorized -
325,000,000 shares
Issued -228,164,824
shares at 12/31/11
and 9/30/11,
and 203,878,110
shares at 12/31/10 1,141 1,141 1,019
Capital surplus 2,170 2,162 1,481
Accumulated other
comprehensive loss (356) (230) (389)
Retained earnings 5,546 5,471 5,247
Less cost of common
stock in treasury -
30,831,076 shares at
12/31/11,
29,238,425 shares at
9/30/11 and
27,342,518 shares at
12/31/10 (1,633) (1,593) (1,565)
--------------------- ------ ------ ------
Total shareholders' equity 6,868 6,951 5,793
-------------------------- ----- ----- -----
Total liabilities and
shareholders' equity $61,008 $60,888 $53,667
---------------------- ------- ------- -------
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Comerica Incorporated and Subsidiaries
Three Months
Ended Years Ended
December 31, December 31,
------------ ------------
(in millions,
except per
share data) 2011 2010 2011 2010
---------------- ---- ---- ---- ----
INTEREST
INCOME
Interest and
fees on
loans $415 $394 $1,564 $1,617
Interest on
investment
securities 63 49 233 226
Interest on
short-term
investments 3 2 12 10
------------ --- --- --- ---
Total interest income 481 445 1,809 1,853
INTEREST
EXPENSE
Interest on
deposits 21 24 90 115
Interest on
short-term
borrowings - 1 - 1
Interest on
medium- and
long-term
debt 16 15 66 91
------------ ---
Total interest expense 37 40 156 207
---------------------- --- --- --- ---
Net interest income 444 405 1,653 1,646
Provision for
loan losses 19 57 153 480
------------- --- --- --- ---
Net interest income after
provision for loan losses 425 348 1,500 1,166
NONINTEREST
INCOME
Service
charges on
deposit
accounts 52 49 208 208
Fiduciary
income 36 39 151 154
Commercial
lending fees 23 29 87 95
Letter of
credit fees 18 20 73 76
Card fees 11 15 58 58
Foreign
exchange
income 10 11 40 39
Bank-owned
life
insurance 10 14 37 40
Brokerage
fees 5 7 22 25
Net
securities
gains
(losses) (4) - 14 3
Other
noninterest
income 21 31 102 91
------------ --- --- --- ---
Total noninterest income 182 215 792 789
NONINTEREST
EXPENSES
Salaries 205 205 770 740
Employee
benefits 52 43 205 179
--------- --- --- --- ---
Total
salaries and
employee
benefits 257 248 975 919
Net occupancy
expense 47 42 169 162
Equipment
expense 17 16 66 63
Outside
processing
fee expense 27 27 101 96
Software
expense 23 23 88 89
Merger and
restructuring
charges 37 - 75 -
FDIC
insurance
expense 8 15 43 62
Legal fees 14 9 43 35
Advertising
expense 7 8 28 30
Other real
estate
expense 3 5 22 29
Litigation
and
operational
losses 1 6 17 11
Provision for
credit
losses on
lending-
related
commitments (1) (3) (9) (2)
Other
noninterest
expenses 38 41 144 146
------------ --- --- --- ---
Total noninterest expenses 478 437 1,762 1,640
-------------------------- --- --- ----- -----
Income from
continuing
operations
before
income taxes 129 126 530 315
Provision for
income taxes 33 30 137 55
------------- --- --- --- ---
Income from
continuing
operations 96 96 393 260
Income from
discontinued
operations,
net of tax - - - 17
------------- --- --- --- ---
NET INCOME 96 96 393 277
Less:
Preferred
stock
dividends - - - 123
Income
allocated to
participating
securities 1 1 4 1
-------------- --- --- --- ---
Net income
attributable
to common
shares $95 $95 $389 $153
------------- --- --- ---- ----
Basic
earnings per
common
share:
Income from
continuing
operations $0.48 $0.54 $2.11 $0.79
Net income 0.48 0.54 2.11 0.90
Diluted
earnings per
common
share:
Income from
continuing
operations 0.48 0.53 2.09 0.78
Net income 0.48 0.53 2.09 0.88
Cash
dividends
declared on
common stock 20 18 75 44
Cash
dividends
declared per
common share 0.10 0.10 0.40 0.25
------------- ---- ---- ---- ----
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Fourth Third Second First Fourth Fourth Quarter 2011 Compared To:
--------------------------------
Third Quarter Fourth Quarter
Quarter Quarter Quarter Quarter Quarter 2011 2010
(in
millions,
except per
share
data) 2011 2011 2011 2011 2010 Amount Percent Amount Percent
---------- ---- ---- ---- ---- ---- ------ ------- ------ -------
INTEREST
INCOME
Interest
and fees
on loans $415 $405 $369 $375 $394 $10 3% $21 5%
Interest on
investment
securities 63 54 59 57 49 9 16 14 27
Interest on
short-
term
investments 3 4 3 2 2 (1) (7) 1 N/M
------------ --- --- --- --- --- --- --- --- ---
Total interest
income 481 463 431 434 445 18 4 36 8
INTEREST
EXPENSE
Interest on
deposits 21 24 23 22 24 (3) (10) (3) (16)
Interest on
short-
term
borrowings - - - - 1 - (34) (1) (78)
Interest on
medium-
and long-
term debt 16 16 17 17 15 - 2 1 2
----------- --- --- --- --- --- --- --- --- ---
Total interest
expense 37 40 40 39 40 (3) (5) (3) (9)
--------------- --- --- --- --- --- --- --- --- ---
Net interest
income 444 423 391 395 405 21 5 39 10
Provision
for loan
losses 19 38 47 49 57 (19) (50) (38) (67)
--------- --- --- --- --- --- --- --- --- ---
Net interest
income after
provision for
loan losses 425 385 344 346 348 40 10 77 22
NONINTEREST
INCOME
Service
charges on
deposit
accounts 52 53 51 52 49 (1) (3) 3 6
Fiduciary
income 36 37 39 39 39 (1) (2) (3) (7)
Commercial
lending
fees 23 22 21 21 29 1 10 (6) (20)
Letter of
credit
fees 18 19 18 18 20 (1) (2) (2) (9)
Card fees 11 17 15 15 15 (6) (32) (4) (26)
Foreign
exchange
income 10 11 10 9 11 (1) (3) (1) (1)
Bank-owned
life
insurance 10 10 9 8 14 - 2 (4) (31)
Brokerage
fees 5 5 6 6 7 - (11) (2) (28)
Net
securities
gains
(losses) (4) 12 4 2 - (16) N/M (4) N/M
Other
noninterest
income 21 15 29 37 31 6 34 (10) (31)
------------ --- --- --- --- --- --- --- --- ---
Total noninterest
income 182 201 202 207 215 (19) (9) (33) (15)
NONINTEREST
EXPENSES
Salaries 205 192 185 188 205 13 7 - -
Employee
benefits 52 53 50 50 43 (1) (1) 9 20
--------- --- --- --- --- --- --- --- --- ---
Total
salaries
and
employee
benefits 257 245 235 238 248 12 5 9 4
Net
occupancy
expense 47 44 38 40 42 3 8 5 13
Equipment
expense 17 17 17 15 16 - 5 1 8
Outside
processing
fee
expense 27 25 25 24 27 2 5 - (1)
Software
expense 23 22 20 23 23 1 4 - (6)
Merger and
restructuring
charges 37 33 5 - - 4 12 37 N/M
FDIC
insurance
expense 8 8 12 15 15 - 18 (7) (40)
Legal fees 14 12 8 9 9 2 16 5 59
Advertising
expense 7 7 7 7 8 - (2) (1) (10)
Other real
estate
expense 3 5 6 8 5 (2) (45) (2) (33)
Litigation
and
operational
losses 1 8 5 3 6 (7) (89) (5) (84)
Provision
for credit
losses on
lending-
related
commitments (1) (3) (2) (3) (3) 2 57 2 66
Other
noninterest
expenses 38 37 33 36 41 1 3 (3) (7)
------------ --- --- --- --- --- --- --- --- ---
Total noninterest
expenses 478 460 409 415 437 18 4 41 10
------------------ --- --- --- --- --- --- --- --- ---
Income
before
income
taxes 129 126 137 138 126 3 3 3 3
Provision
for income
taxes 33 28 41 35 30 5 21 3 12
----------- --- --- --- --- --- --- --- --- ---
NET INCOME 96 98 96 103 96 (2) (2) - -
Less:
Income
allocated
to
participating
securities 1 1 1 1 1 - (7) - (11)
--- ---
Net income
attributable
to common
shares $95 $97 $95 $102 $95 $(2) (2)% $- - %
------------- --- --- --- ---- --- --- --- --- --- ---
Earnings
per common
share:
Basic $0.48 $0.51 $0.54 $0.58 $0.54 $(0.03) (6)% $(0.06) (11)%
Diluted 0.48 0.51 0.53 0.57 0.53 (0.03) (6) (0.05) (9)
Cash
dividends
declared
on common
stock 20 20 18 17 18 - - 2 12
Cash
dividends
declared
per common
share 0.10 0.10 0.10 0.10 0.10 - - - -
----------- ---- ---- ---- ---- ---- --- --- --- ---
N/M -Not
meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
2011 2010
---- ----
(in
millions) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
------- ------- ------- ------- -------
Balance
at
beginning
of
period $767 $806 $849 $901 $957
Loan
charge-
offs:
Commercial 28 33 66 65 43
Real
estate
construction:
Commercial
Real
Estate
business
line
(a) 4 11 12 8 34
Other
business
lines
(b) 1 - - 1 -
Total
real
estate
construction 5 11 12 9 34
Commercial
mortgage:
Commercial
Real
Estate
business
line
(a) 17 12 8 9 9
Other
business
lines
(b) 24 21 23 25 34
Total
commercial
mortgage 41 33 31 34 43
Residential
mortgage 2 4 7 2 5
Consumer 7 9 9 8 15
Lease
financing - - - - -
International 2 - - 5 -
------------- --- ---
Total
loan
charge-
offs 85 90 125 123 140
Recoveries
on
loans
previously
charged-
off:
Commercial 11 5 13 4 7
Real
estate
construction 4 3 5 2 3
Commercial
mortgage 9 3 5 9 10
Residential
mortgage - 1 1 - 1
Consumer 1 1 1 1 2
Lease
financing - - 6 5 4
International - - 4 1 -
Total
recoveries 25 13 35 22 27
Net
loan
charge-
offs 60 77 90 101 113
Provision
for
loan
losses 19 38 47 49 57
Balance
at
end
of
period $726 $767 $806 $849 $901
------- ---- ---- ---- ---- ----
Allowance
for
loan
losses
as
a
percentage
of
total
loans
(c) 1.70% 1.86% 2.06% 2.17% 2.24%
Net
loan
charge-
offs
as
a
percentage
of
average
total
loans 0.57 0.77 0.92 1.03 1.13
Net
credit-
related
charge-
offs
as
a
percentage
of
average
total
loans 0.57 0.77 0.92 1.03 1.13
---------- ---- ---- ---- ---- ----
(a) Primarily charge-offs of loans to real estate
investors and developers.
(b) Primarily charge-offs of loans secured by owner-
occupied real estate.
(c) Reflects the impact of acquired loans, which were
initially recorded at fair value with no related
allowance for loan losses.
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-
RELATED COMMITMENTS (unaudited)
Comerica Incorporated and Subsidiaries
2011 2010
---- ----
(in
millions) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
------- ------- ------- ------- -------
Balance
at
beginning
of
period $27 $30 $32 $35 $38
Add:
Provision
for
credit
losses
on
lending-
related
commitments (1) (3) (2) (3) (3)
Balance
at
end
of
period $26 $27 $30 $32 $35
------- --- --- --- --- ---
Unfunded
lending-
related
commitments
sold $- $- $3 $2 $-
----------- --- --- --- --- ---
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2011 2010
---- ----
2nd 1st
(in millions) 4th Qtr 3rd Qtr Qtr Qtr 4th Qtr
------------- ------- ------- ---- ---- -------
SUMMARY OF
NONPERFORMING
ASSETS AND PAST
DUE LOANS
Nonaccrual loans:
Business loans:
Commercial $237 $258 $261 $226 $252
Real estate
construction:
Commercial Real
Estate business
line (a) 93 109 137 195 259
Other business
lines (b) 8 3 2 3 4
Total real estate
construction 101 112 139 198 263
Commercial
mortgage:
Commercial Real
Estate business
line (a) 159 198 186 197 181
Other business
lines (b) 268 275 269 293 302
Total commercial
mortgage 427 473 455 490 483
Lease financing 5 5 6 7 7
International 8 7 7 4 2
------------- --- --- --- --- ---
Total nonaccrual
business loans 778 855 868 925 1,007
Retail loans:
Residential
mortgage 71 65 60 58 55
Consumer:
Home equity 5 4 4 6 5
Other consumer 6 5 9 7 13
-------------- --- --- --- --- ---
Total consumer 11 9 13 13 18
-------------- --- --- --- --- ---
Total nonaccrual
retail loans 82 74 73 71 73
---------------- --- --- --- --- ---
Total nonaccrual
loans 860 929 941 996 1,080
Reduced-rate loans 27 29 33 34 43
Total
nonperforming
loans (c) 887 958 974 1,030 1,123
Foreclosed
property 94 87 70 74 112
Total
nonperforming
assets (c) $981 $1,045 $1,044 $1,104 $1,235
-------------- ---- ------ ------ ------ ------
Nonperforming
loans as a
percentage of
total loans 2.08% 2.32% 2.49% 2.63% 2.79%
Nonperforming
assets as a
percentage of
total loans
and foreclosed
property 2.29 2.53 2.66 2.81 3.06
Allowance for loan
losses as a
percentage
of total
nonperforming
loans 82 80 83 82 80
Loans past due 90
days or more and
still accruing $58 $81 $64 $72 $62
ANALYSIS OF
NONACCRUAL LOANS
Nonaccrual loans
at beginning of
period $929 $941 $996 $1,080 $1,163
Loans transferred
to nonaccrual (d) 99 130 150 149 173
Nonaccrual
business loan
gross charge-
offs (e) (76) (76) (109) (111) (120)
Loans transferred
to accrual status
(d) - (15) - (4) (4)
Nonaccrual
business loans
sold (f) (19) (15) (9) (60) (41)
Payments/Other
(g) (73) (36) (87) (58) (91)
Nonaccrual loans
at end of period $860 $929 $941 $996 $1,080
----------------- ---- ---- ---- ---- ------
(a) Primarily
loans to real
estate investors
and developers.
(b) Primarily
loans secured by
owner-occupied
real estate.
(c) Excludes loans
acquired with
credit
impairment.
(d) Based on an
analysis of
nonaccrual loans
with book
balances greater
than $2 million.
(e) Analysis of
gross loan
charge-offs:
Nonaccrual
business loans $76 $76 $109 $111 $120
Performing watch
list loans - 1 - 2 -
Consumer and
residential
mortgage loans 9 13 16 10 20
--- --- --- --- ---
Total gross loan
charge-offs $85 $90 $125 $123 $140
----------
(f) Analysis of
loans sold:
Nonaccrual
business loans $19 $15 $9 $60 $41
Performing watch
list loans - 16 6 35 29
--- --- --- --- ---
Total loans sold $19 $31 $15 $95 $70
---
(g) Includes net changes related to nonaccrual loans with balances
less than $2 million, payments on nonaccrual loans with book balances
greater than $2 million and transfers of nonaccrual loans to
foreclosed property. Excludes business loan gross charge-offs and
business nonaccrual loans sold.
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Years Ended
-----------
December 31, 2011 December 31, 2010
----------------- -----------------
Average Average Average Average
(dollar amounts in
millions) Balance Interest Rate Balance Interest Rate
------------------ ------- -------- ---- ------- -------- ----
Commercial loans $22,208 $819 3.69% $21,090 $820 3.89%
Real estate construction
loans 1,843 81 4.37 2,839 90 3.17
Commercial mortgage loans 10,025 424 4.23 10,244 421 4.10
Residential mortgage loans 1,580 83 5.27 1,607 85 5.30
Consumer loans 2,278 80 3.50 2,429 86 3.54
Lease financing 950 33 3.51 1,086 42 3.88
International loans 1,191 46 3.83 1,222 48 3.94
Business loan swap income - - - - 28 -
--- --- --- --- --- ---
Total loans (a) 40,075 1,566 3.91 40,517 1,620 4.00
Auction-rate securities
available-for-sale 479 4 0.72 745 8 1.01
Other investment
securities available-
for-sale 7,692 231 3.06 6,419 220 3.51
----- --- ---- ----- --- ----
Total investment securities
available-for-sale 8,171 235 2.91 7,164 228 3.24
Federal funds sold and securities
purchased
under agreements to resell 5 - 0.32 6 - 0.36
Interest-bearing deposits
with banks (b) 3,741 9 0.24 3,191 8 0.25
Other short-term
investments 129 3 2.17 126 2 1.58
--- --- ---- --- --- ----
Total earning assets 52,121 1,813 3.49 51,004 1,858 3.65
Cash and due from banks 921 825
Allowance for loan losses (838) (1,019)
Accrued income and other
assets 4,713 4,743
----- -----
Total assets $56,917 $55,553
-------
Money market and NOW
deposits $19,088 47 0.25 $16,355 51 0.31
Savings deposits 1,550 2 0.11 1,394 1 0.08
Customer certificates of
deposit 5,719 39 0.68 5,875 53 0.90
----- --- ---- ----- --- ----
Total interest-bearing core
deposits 26,357 88 0.33 23,624 105 0.44
Other time deposits 23 - 0.42 306 9 3.04
Foreign office time
deposits 388 2 0.48 462 1 0.31
--- --- ---- --- --- ----
Total interest-bearing
deposits 26,768 90 0.33 24,392 115 0.47
Short-term borrowings 138 - 0.13 216 1 0.25
Medium- and long-term debt 5,519 66 1.20 8,684 91 1.05
----- --- ---- ----- --- ----
Total interest-bearing sources 32,425 156 0.48 33,292 207 0.62
Noninterest-bearing
deposits 16,994 15,094
Accrued expenses and other
liabilities 1,147 1,099
Total shareholders' equity 6,351 6,068
----- -----
Total liabilities and
shareholders' equity $56,917 $55,553
----------
Net interest income/rate spread
(FTE) $1,657 3.01 $1,651 3.03
------ ------
FTE adjustment $4 $5
--- ---
Impact of net noninterest-bearing
sources of funds 0.18 0.21
--------------------------------- ---- ----
Net interest margin (as a
percentage
of average earning assets) (FTE)
(a) (b) 3.19% 3.24%
-------------------------------- ---- ----
(a) Accretion of the purchase discount on the acquired loan portfolio of
$53 million increased the net interest margin by 10 basis points in 2011.
(b) Excess liquidity, represented by average balances deposited with the
Federal Reserve Bank, reduced the net interest margin by 22 basis points
and 20 basis points in 2011 and 2010, respectively.
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Three Months Ended
------------------
December 31, 2011 September 30, 2011 December 31, 2010
----------------- ------------------ -----------------
Average Average Average Average Average Average
(dollar
amounts
in
millions) Balance Interest Rate Balance Interest Rate Balance Interest Rate
--------- ------- -------- ---- ------- -------- ---- ------- -------- ----
Commercial
loans $23,515 $216 3.64% $22,127 $207 3.70% $21,464 $206 3.80%
Real
estate
construction
loans 1,619 21 5.26 1,699 23 5.28 2,371 21 3.50
Commercial
mortgage
loans 10,388 119 4.54 10,275 115 4.42 9,965 100 3.97
Residential
mortgage
loans 1,591 20 5.06 1,606 21 5.30 1,600 20 5.11
Consumer
loans 2,294 21 3.58 2,292 20 3.56 2,367 21 3.50
Lease
financing 919 8 3.44 936 8 3.46 1,044 11 4.36
International
loans 1,128 10 3.63 1,163 11 4.01 1,188 11 3.86
Business
loan
swap
income - - - - - - - 4 -
--- --- --- --- --- --- --- --- ---
Total
loans
(a) 41,454 415 3.98 40,098 405 4.01 39,999 394 3.92
Auction-
rate
securities
available-
for-
sale 426 1 0.64 437 1 0.63 617 2 0.92
Other
investment
securities
available-
for-
sale 9,355 62 2.74 7,721 54 2.87 6,495 48 3.07
----- --- ---- ----- --- ---- ----- --- ----
Total
investment
securities
available-
for-
sale 9,781 63 2.64 8,158 55 2.74 7,112 50 2.87
Federal funds
sold and
securities
purchased
under
agreements
to
resell 15 - 0.32 - - 0.44 8 - 0.32
Interest-
bearing
deposits
with
banks
(b) 4,293 3 0.24 4,851 3 0.23 1,856 1 0.25
Other
short-
term
investments 133 1 2.26 136 1 2.30 127 1 1.40
--- --- ---- --- --- ---- --- --- ----
Total
earning
assets 55,676 482 3.45 53,243 464 3.47 49,102 446 3.62
Cash
and
due
from
banks 959 969 871
Allowance
for
loan
losses (773) (814) (979)
Accrued
income
and
other
assets 5,183 4,840 4,762
----- ----- -----
Total
assets $61,045 $58,238 $53,756
------- ------- -------
Money
market
and
NOW
deposits $20,716 $12 0.21 $19,595 $13 0.25 $17,302 $13 0.29
Savings
deposits 1,652 - 0.12 1,659 - 0.14 1,385 - 0.09
Customer
certificates
of
deposit 5,872 9 0.60 5,878 10 0.66 5,602 11 0.80
----- --- ---- ----- --- ---- ----- --- ----
Total
interest-
bearing
core
deposits 28,240 21 0.29 27,132 23 0.33 24,289 24 0.39
Other
time
deposits 14 - 0.63 76 - 0.38 - - -
Foreign
office
time
deposits 349 - 0.39 379 1 0.52 460 - 0.45
--- --- ---- --- --- ---- --- --- ----
Total
interest-
bearing
deposits 28,603 21 0.29 27,587 24 0.33 24,749 24 0.40
Short-
term
borrowings 142 - 0.07 204 - 0.08 174 1 0.27
Medium-
and
long-
term
debt 4,976 16 1.30 5,168 16 1.23 6,201 15 1.02
----- --- ---- ----- --- ---- ----- --- ----
Total
interest-
bearing
sources 33,721 37 0.44 32,959 40 0.47 31,124 40 0.52
Noninterest-
bearing
deposits 19,176 17,511 15,607
Accrued
expenses
and
other
liabilities 1,201 1,135 1,155
Total
shareholders'
equity 6,947 6,633 5,870
----- ----- -----
Total
liabilities
and
shareholders'
equity $61,045 $58,238 $53,756
------- ------- -------
Net interest
income/rate
spread (FTE) $445 3.01 $424 3.00 $406 3.10
---- ---- ----
FTE adjustment $1 $1 $1
--- --- ---
Impact of net
noninterest-
bearing
sources of
funds 0.18 0.18 0.19
---- ---- ----
Net interest
margin (as a
percentage
of average
earning
assets) (FTE)
(a) (b) 3.19% 3.18% 3.29%
-------------- ---- ---- ----
(a) Accretion of the purchase discount on the acquired loan portfolio of $26 million in the
fourth quarter and $27 million in the third quarter of 2011 increased the net interest
margin by 19 basis points and by 20 basis points in the fourth and third quarters of 2011,
respectively.
(b) Excess liquidity, represented by average balances deposited with the Federal Reserve
Bank, reduced the net interest margin by 24 basis points and by 29 basis points in the
fourth and third quarters of 2011, respectively, and by 12 basis points in the fourth
quarter of 2010.
CONSOLIDATED STATISTICAL DATA (unaudited)
Comerica Incorporated and Subsidiaries
September
December 31, 30, June 30, March 31, December 31,
(in
millions,
except per
share
data) 2011 2011 2011 2011 2010
----------- ---- ---- ---- ---- ----
Commercial loans:
Floor plan $1,822 $1,209 $1,478 $1,893 $2,017
Other 23,174 21,904 20,574 19,467 20,128
----- ------ ------ ------ ------ ------
Total commercial
loans 24,996 23,113 22,052 21,360 22,145
Real estate
construction loans:
Commercial
Real
Estate
business
line (a) 1,103 1,226 1,343 1,606 1,826
Other
business
lines (b) 430 422 385 417 427
---------- --- --- --- --- ---
Total real estate
construction
loans 1,533 1,648 1,728 2,023 2,253
Commercial mortgage
loans:
Commercial
Real
Estate
business
line (a) 2,507 2,602 1,930 1,918 1,937
Other
business
lines (b) 7,757 7,937 7,649 7,779 7,830
---------- ----- ----- ----- ----- -----
Total commercial
mortgage loans 10,264 10,539 9,579 9,697 9,767
Residential
mortgage
loans 1,526 1,643 1,491 1,550 1,619
Consumer loans:
Home equity 1,655 1,683 1,622 1,661 1,704
Other
consumer 630 626 610 601 607
--------- --- --- --- --- ---
Total consumer
loans 2,285 2,309 2,232 2,262 2,311
Lease
financing 905 927 949 958 1,009
International
loans 1,170 1,046 1,162 1,326 1,132
------------- ----- ----- ----- ----- -----
Total loans $42,679 $41,225 $39,193 $39,176 $40,236
----------- ------- ------- ------- ------- -------
Goodwill $635 $635 $150 $150 $150
Core
deposit
intangible 29 32 - - -
Loan
servicing
rights 3 3 4 4 5
Tier 1
common
capital
ratio (c)
(d) 10.31% 10.57% 10.53% 10.35% 10.13%
Tier 1
risk-
based
capital
ratio (d) 10.35 10.65 10.53 10.35 10.13
Total risk-
based
capital
ratio (d) 14.18 14.84 14.80 14.80 14.54
Leverage
ratio (d) 10.92 11.41 11.40 11.37 11.26
Tangible
common
equity
ratio (c) 10.27 10.43 10.90 10.43 10.54
Book value
per common
share $34.80 $34.94 $34.15 $33.25 $32.82
Market value per share
for the quarter:
High 27.37 35.79 39.00 43.53 43.44
Low 21.53 21.48 33.08 36.20 34.43
Close 25.80 22.97 34.57 36.72 42.24
Quarterly ratios:
Return on
average
common
shareholders'
equity 5.51% 5.91% 6.41% 7.08% 6.53%
Return on
average
assets 0.63 0.67 0.70 0.77 0.71
Efficiency
ratio 75.78 75.11 69.33 69.05 70.38
Number of
banking
centers 494 502 446 445 444
Number of
employees
-full
time
equivalent 9,397 9,701 8,915 8,955 9,001
(a) Primarily loans to real estate investors and developers.
(b) Primarily loans secured by owner-occupied real estate.
(c) See Reconciliation of Non-GAAP Financial Measures.
(d) December 31, 2011 ratios are estimated.
PARENT COMPANY ONLY BALANCE SHEETS (unaudited)
Comerica Incorporated
December September December
31, 30, 31,
(in millions, except share data) 2011 2011 2010
-------------------------------- ---- ---- ----
ASSETS
Cash and due from subsidiary bank $7 $3 $-
Short-term investments with
subsidiary bank 411 440 327
Other short-term investments 90 86 86
Investment in subsidiaries,
principally banks 7,011 7,098 5,957
Premises and equipment 4 3 4
Other assets 177 189 181
Total assets $7,700 $7,819 $6,555
------------ ------ ------ ------
LIABILITIES AND SHAREHOLDERS'
EQUITY
Medium- and long-term debt $666 $722 $635
Other liabilities 166 146 127
Total liabilities 832 868 762
Common stock - $5 par value:
Authorized -325,000,000 shares
Issued -228,164,824 shares at
12/31/11 and 9/30/11, and
203,878,110 shares at 12/31/10 1,141 1,141 1,019
Capital surplus 2,170 2,162 1,481
Accumulated other comprehensive
loss (356) (230) (389)
Retained earnings 5,546 5,471 5,247
Less cost of common stock in
treasury - 30,831,076 shares at
12/31/11, 29,238,425 shares at
9/30/11, and 27,342,518
shares at 12/31/10 (1,633) (1,593) (1,565)
Total shareholders' equity 6,868 6,951 5,793
Total liabilities and
shareholders' equity $7,700 $7,819 $6,555
--------------------- ------ ------ ------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Comerica Incorporated and Subsidiaries
Accumulated
Common Stock Other Total
------------
Preferred Shares Capital Comprehensive Retained Treasury Shareholders'
(in millions,
except per
share data) Stock Outstanding Amount Surplus Loss Earnings Stock Equity
------------- ----- ----------- ------ ------- ---- -------- ----- ------
BALANCE AT
DECEMBER 31,
2009 $2,151 151.2 $894 $740 $(336) $5,161 $(1,581) $7,029
Net income - - - - - 277 - 277
Other
comprehensive
loss, net of
tax - - - - (53) - - (53)
---
Total
comprehensive
income 224
Cash dividends
declared on
preferred stock - - - - - (38) - (38)
Cash dividends
declared on
common stock
($0.25 per
share) - - - - - (44) - (44)
Purchase of
common stock - (0.1) - - - - (4) (4)
Issuance of
common stock - 25.1 125 724 - - - 849
Redemption of
preferred stock (2,250) - - - - - - (2,250)
Redemption
discount
accretion on
preferred stock 94 - - - - (94) - -
Accretion of
discount on
preferred stock 5 - - - - (5) - -
Net issuance of
common stock
under employee
stock plans - 0.3 - (11) - (10) 19 (2)
Share-based
compensation - - - 32 - - - 32
Other - - - (4) - - 1 (3)
----- --- --- --- --- --- ---
BALANCE AT
DECEMBER 31,
2010 $- 176.5 $1,019 $1,481 $(389) $5,247 $(1,565) $5,793
Net income - - - - - 393 - 393
Other
comprehensive
income, net of
tax - - - - 33 - - 33
---
Total
comprehensive
income 426
Cash dividends
declared on
common stock
($0.40 per
share) - - - - - (75) - (75)
Purchase of
common stock - (4.3) - - - - (116) (116)
Acquisition of
Sterling
Bancshares,
Inc. - 24.3 122 681 - - - 803
Net issuance of
common stock
under employee
stock plans - 0.8 - (29) - (19) 48 -
Share-based
compensation - - - 37 - - - 37
BALANCE AT
DECEMBER 31,
2011 $- 197.3 $1,141 $2,170 $(356) $5,546 $(1,633) $6,868
------------- --- ----- ------ ------ ----- ------ ------- ------
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar
amounts
in
millions) Business Retail Wealth Finance Other Total
Three
Months
Ended
December
31,
2011 Bank Bank Management
Earnings summary:
Net
interest
income
(expense)
(FTE) $382 $176 $46 $(168) $9 $445
Provision
for
loan
losses (4) 15 10 - (2) 19
Noninterest
income 73 35 55 16 3 182
Noninterest
expenses 161 182 83 3 49 478
Provision
(benefit)
for
income
taxes
(FTE) 97 4 3 (60) (10) 34
Net
income
(loss) $201 $10 $5 $(95) $(25) $96
---- --- --- ---- ---- ---
Net
credit-
related
charge-
offs $32 $16 $12 $- $- $60
Selected average
balances:
Assets $32,150 $6,250 $4,672 $11,926 $6,047 $61,045
Loans 31,257 5,571 4,618 3 5 41,454
Deposits 23,296 20,715 3,400 200 168 47,779
Statistical data:
Return
on
average
assets
(a) 2.50% 0.18% 0.45% N/M N/M 0.63%
Net
interest
margin
(b) 4.83 3.37 4.00 N/M N/M 3.19
Efficiency
ratio 35.55 84.36 82.12 N/M N/M 75.78
Three
Months
Ended
September
30,
2011 Business Retail Wealth Finance Other Total
Bank Bank Management
Earnings summary:
Net
interest
income
(expense)
(FTE) $363 $173 $45 $(167) $10 $424
Provision
for
loan
losses 20 17 6 - (5) 38
Noninterest
income 77 47 56 25 (4) 201
Noninterest
expenses 162 174 78 3 43 460
Provision
(benefit)
for
income
taxes
(FTE) 79 10 6 (54) (12) 29
Net
income
(loss) $179 $19 $11 $(91) $(20) $98
---- --- --- ---- ---- ---
Net
credit-
related
charge-
offs $40 $28 $9 $- $- $77
Selected average
balances:
Assets $30,608 $5,984 $4,674 $10,177 $6,795 $58,238
Loans 29,955 5,483 4,652 2 6 40,098
Deposits 21,759 19,792 3,198 236 113 45,098
Statistical data:
Return
on
average
assets
(a) 2.34% 0.38% 0.95% N/M N/M 0.67%
Net
interest
margin
(b) 4.81 3.46 3.85 N/M N/M 3.18
Efficiency
ratio 36.91 79.11 78.00 N/M N/M 75.11
---------- ----- ----- ----- --- --- -----
Three
Months
Ended
December
31,
2010 Business Retail Wealth Finance Other Total
Bank Bank Management
Earnings summary:
Net
interest
income
(expense)
(FTE) $341 $134 $42 $(111) $- $406
Provision
for
loan
losses 8 29 23 - (3) 57
Noninterest
income 81 43 59 23 9 215
Noninterest
expenses 158 169 93 12 5 437
Provision
(benefit)
for
income
taxes
(FTE) 82 (7) (5) (40) 1 31
Net
income
(loss) $174 $(14) $(10) $(60) $6 $96
---- ---- ---- ---- --- ---
Net
credit-
related
charge-
offs $73 $22 $18 $- $- $113
Selected average
balances:
Assets $30,489 $5,647 $4,834 $9,228 $3,558 $53,756
Loans 29,947 5,192 4,820 28 12 39,999
Deposits 19,892 17,271 2,730 310 153 40,356
Statistical data:
Return
on
average
assets
(a) 2.29% (0.32)% (0.82)% N/M N/M 0.71%
Net
interest
margin
(b) 4.51 3.07 3.43 N/M N/M 3.29
Efficiency
ratio 37.25 95.17 92.86 N/M N/M 70.38
---------- ----- ----- ----- --- --- -----
(a) Return on average assets is calculated based on the greater of average assets
or average liabilities and attributed equity.
(b) Net interest margin is calculated based on the greater of average earning
assets or average deposits and purchased funds.
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
--------------------
MARKET SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts
in millions) Midwest Western Texas Florida Other International Finance Total
Three Months Ended
December 31, 2011 Markets & Other
Businesses
Earnings summary:
Net interest
income
(expense) (FTE) $201 $170 $158 $11 $46 $18 $(159) $445
Provision for
loan losses 20 (12) 8 4 - 1 (2) 19
Noninterest
income 85 33 26 4 7 8 19 182
Noninterest
expenses 185 109 89 13 23 7 52 478
Provision
(benefit) for
income taxes
(FTE) 28 41 32 (1) (2) 6 (70) 34
Net income
(loss) $53 $65 $55 $(1) $32 $12 $(120) $96
--- --- --- --- --- --- ----- ---
Net credit-
related charge-
offs $32 $5 $4 $7 $10 $2 $- $60
Selected average
balances:
Assets $13,980 $12,266 $9,712 $1,435 $4,011 $1,668 $17,973 $61,045
Loans 13,725 12,026 8,952 1,457 3,718 1,568 8 41,454
Deposits 19,076 13,671 10,333 435 2,414 1,482 368 47,779
Statistical data:
Return on
average assets
(a) 1.05% 1.77% 1.92% (0.37)% 3.20% 2.78% N/M 0.63%
Net interest
margin (b) 4.18 4.92 6.07 2.89 4.90 4.42 N/M 3.19
Efficiency ratio 63.69 53.94 48.13 92.29 43.68 28.20 N/M 75.78
---------------- ----- ----- ----- ----- ----- ----- -- -----
Three Months
Ended September
30, 2011 Midwest Western Texas Florida Other International Finance Total
Markets & Other
Businesses
Earnings summary:
Net interest
income
(expense) (FTE) $199 $166 $143 $11 $41 $21 $(157) $424
Provision for
loan losses 21 14 (7) 2 11 2 (5) 38
Noninterest
income 96 32 29 4 10 9 21 201
Noninterest
expenses 183 105 80 11 25 10 46 460
Provision
(benefit) for
income taxes
(FTE) 32 29 35 1 (8) 6 (66) 29
Net income
(loss) $59 $50 $64 $1 $23 $12 $(111) $98
--- --- --- --- --- --- ----- ---
Net credit-
related charge-
offs
(recoveries) $33 $32 $2 $5 $5 $- $- $77
Selected average
balances:
Assets $14,123 $12,110 $8,510 $1,450 $3,369 $1,705 $16,972 $58,239
Loans 13,873 11,889 8,145 1,477 3,075 1,631 8 40,098
Deposits 18,511 12,975 8,865 404 2,391 1,603 349 45,098
Statistical data:
Return on
average assets
(a) 1.21% 1.42% 2.66% 0.29% 2.76% 2.76% N/M 0.67%
Net interest
margin (b) 4.27 5.06 6.40 2.94 5.36 5.00 N/M 3.18
Efficiency ratio 61.78 53.15 46.51 78.07 50.73 31.23 N/M 75.11
----- ----- ----- ----- ----- ----- -- -----
Three Months
Ended December
31, 2010 Midwest Western Texas Florida Other International Finance Total
Markets & Other
Businesses
Earnings summary:
Net interest
income
(expense) (FTE) $202 $158 $80 $11 $48 $18 $(111) $406
Provision for
loan losses 46 11 15 4 (19) 3 (3) 57
Noninterest
income 99 35 27 3 10 9 32 215
Noninterest
expenses 201 109 67 9 24 10 17 437
Provision
(benefit) for
income taxes
(FTE) 19 32 9 - 5 5 (39) 31
Net income
(loss) $35 $41 $16 $1 $48 $9 $(54) $96
--- --- --- --- --- --- ---- ---
Net credit-
related charge-
offs $52 $43 $9 $7 $2 $- $- $113
Selected average
balances:
Assets $14,506 $12,698 $6,653 $1,587 $3,911 $1,615 $12,786 $53,756
Loans 14,219 12,497 6,435 1,612 3,651 1,545 40 39,999
Deposits 17,959 12,448 5,557 375 2,242 1,312 463 40,356
Statistical data:
Return on
average assets
(a) 0.72% 1.21% 0.96% 0.13% 4.93% 2.24% N/M 0.71%
Net interest
margin (b) 4.45 5.01 4.91 2.64 5.32 4.38 N/M 3.29
Efficiency ratio 66.64 56.46 62.62 68.68 40.07 36.08 N/M 70.38
---------------- ----- ----- ----- ----- ----- ----- -- -----
(a) Return on average assets is calculated based on the greater of average assets or average liabilities and
attributed equity.
(b) Net interest margin is calculated based on the greater of average earning assets or average deposits and
purchased funds.
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
--------------------
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
Comerica Incorporated and Subsidiaries
December September June March December
31, 30, 30, 31, 31,
(dollar
amounts in
millions) 2011 2011 2011 2011 2010
---- ---- ---- ---- ----
Tier 1 Common Capital
Ratio:
Tier 1
capital
(a) (b) $6,582 $6,560 $6,193 $6,107 $6,027
Less:
Trust
preferred
securities 25 49 - - -
----------- --- --- --- --- ---
Tier 1
common
capital
(b) $6,557 $6,511 $6,193 $6,107 $6,027
-------- ------ ------ ------ ------ ------
Risk-
weighted
assets (a)
(b) $63,577 $61,593 $58,795 $58,998 $59,506
Tier 1
capital
ratio (b) 10.35% 10.65% 10.53% 10.35% 10.13%
Tier 1
common
capital
ratio (b) 10.31 10.57 10.53 10.35 10.13
---------- ----- ----- ----- ----- -----
Tangible Common Equity
Ratio:
Total
common
shareholders'
equity $6,868 $6,951 $6,038 $5,877 $5,793
Less:
Goodwill 635 635 150 150 150
Other
intangible
assets 32 35 4 5 6
----------- --- --- --- --- ---
Tangible
common
equity $6,201 $6,281 $5,884 $5,722 $5,637
-------- ------ ------ ------ ------ ------
Total
assets $61,008 $60,888 $54,141 $55,017 $53,667
Less:
Goodwill 635 635 150 150 150
Other
intangible
assets 32 35 4 5 6
----------- --- --- --- --- ---
Tangible
assets $60,341 $60,218 $53,987 $54,862 $53,511
-------- ------- ------- ------- ------- -------
Common
equity
ratio $11.26% $11.42% $11.15% $10.68% $10.80%
Tangible
common
equity
ratio 10.27 10.43 10.90 10.43 10.54
-------- ----- ----- ----- ----- -----
(a) Tier 1 capital and risk-weighted assets as defined by regulation.
(b) December 31, 2011 Tier 1 capital and risk-weighted assets are estimated.
The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred
securities from Tier 1 capital as defined by and calculated in conformity with bank
regulations. The tangible common equity removes preferred stock and the effect of
intangible assets from capital and the effect of intangible assets from total assets.
Comerica believes these measurements are meaningful measures of capital adequacy used
by investors, regulators, management and others to evaluate the adequacy of common
equity and to compare against other companies in the industry.
SOURCE Comerica Incorporated
