Comerica Adjusts Fourth Quarter And Full Year 2015 Results

Revision Due to Recently Discovered Isolated Event Associated with Single Customer Loan

Feb 16, 2016, 16:51 ET from Comerica Incorporated

DALLAS, Feb. 16, 2016 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today announced that it is adjusting its fourth quarter and full year 2015 financial results, from those reported on January 19, 2016, as a result of recently discovered irregularities with a single customer loan relationship in the Retail Bank. Following the discovery, Comerica increased its provision for credit losses, recorded a charge-off for the amount in question, and decreased incentive compensation expense based on the revised results, effective as of December 31, 2015.

Comerica had approximately $26 million outstanding from an Arizona-based sales and appraisal company at December 31, 2015. Following an extensive analysis of the situation, Comerica has determined that there was significant doubt as to collectibility of the loan and, given the unique irregularities, it is believed to be an isolated incident.

Comerica Chairman and Chief Executive Officer Ralph W. Babb, Jr. said, "Our investigation is ongoing and we are assessing all circumstances surrounding this matter. We remain confident in our systems and processes and will vigorously prosecute all legal options available to us to recover on this isolated loss."

The adjustments will reduce Comerica's 2015 net income by $14 million after-tax, or 8 cents per share, from $535 million, or $2.92 per share, to $521 million, or $2.84 per share. Adjusted fourth quarter 2015 net income was $116 million, or 64 cents per share, compared to previously reported net income of $130 million, or 71 cents per share.

The following table summarizes the impact of the adjustments on the previously reported financial results.

December 31, 2015

Quarter Ended

Year Ended

(dollar amounts in millions, except per share data)

As Reported

As Adjusted

As Reported

As Adjusted

Provision for credit losses

$

35

$

60

$

122

$

147

Noninterest expenses

489

486

1,845

1,842

Salaries and benefits expense

265

262

1,012

1,009

Income before income taxes

179

157

772

750

Provision for income taxes

49

41

237

229

Net income

130

116

535

521

Net income attributable to common shares

129

115

529

515

Diluted income per common share

0.71

0.64

2.92

2.84

Total shareholders' equity at year end

7,574

7,560

Basel III common equity Tier 1 capital ratio

10.53

%

(a)

10.54

%

Tangible common equity ratio (b)

9.72

%

9.70

%

(a)

Estimated as of January 19,2016. Prior to the adjustments, the final Basel III common equity Tier 1 ratio would have been 10.56%.

(b)

See Reconciliation of Non-GAAP Financial Measures.

Comerica's Annual Report on Form 10-K will reflect these adjustments when it is filed with the U.S. Securities and Exchange Commission. The revisions primarily impacted the Retail Bank and Other Markets. Revised fourth quarter and full year 2015 financial information is included with this release.

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 a reconciliation 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," "contemplates," "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," "looks forward," "projects," "models" 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; changes in monetary and fiscal policies, including changes in interest rates; changes in regulation or oversight; Comerica's ability to maintain adequate sources of funding and liquidity; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers, including the energy industry; operational difficulties, failure of technology infrastructure or information security incidents; reliance on other companies to provide certain key components of business infrastructure; factors impacting noninterest expenses which are beyond Comerica's control; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; changes in Comerica's credit rating; unfavorable developments concerning credit quality; the interdependence of financial service companies; the implementation of Comerica's strategies and business initiatives; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; competitive product and pricing pressures among financial institutions within Comerica's markets; changes in customer behavior; any future strategic acquisitions or divestitures; 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 or determinations; the effectiveness of methods of reducing risk exposures; the effects of terrorist activities and other hostilities; the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; changes in accounting standards and the critical nature of Comerica's accounting policies. 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 12 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2014. 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 31,

September 30,

December 31,

December 31,

(in millions, except per share data)

2015

2015

2014

2015

2014

PER COMMON SHARE AND COMMON STOCK DATA

Diluted net income

$

0.64

$

0.74

$

0.80

$

2.84

$

3.16

Cash dividends declared

0.21

0.21

0.20

0.83

0.79

Average diluted shares (in thousands)

179,197

180,714

183,728

181,104

185,474

KEY RATIOS

Return on average common shareholders' equity

6.08

%

7.19

%

7.96

%

6.91

%

8.05

%

Return on average assets

0.64

0.76

0.86

0.74

0.89

Common equity tier 1 risk-based capital ratio (a)

10.54

10.51

n/a

Tier 1 common risk-based capital ratio (b)

n/a

n/a

10.50

Tier 1 risk-based capital ratio (a)

10.54

10.51

10.50

Total risk-based capital ratio (a)

12.69

12.82

12.51

Leverage ratio (a)

10.22

10.28

10.35

Tangible common equity ratio (b)

9.70

9.91

9.85

AVERAGE BALANCES

Commercial loans

31,219

31,900

30,391

31,501

29,715

Real estate construction loans

1,961

1,833

1,920

1,884

1,909

Commercial mortgage loans

8,842

8,691

8,609

8,697

8,706

Lease financing

750

788

818

783

834

International loans

1,402

1,401

1,455

1,441

1,376

Residential mortgage loans

1,896

1,882

1,821

1,878

1,778

Consumer loans

2,478

2,477

2,347

2,444

2,270

Total loans

48,548

48,972

47,361

48,628

46,588

Earning assets

66,818

66,191

64,453

65,129

61,560

Total assets

71,907

71,333

69,307

70,247

66,336

Noninterest-bearing deposits

29,627

28,623

27,504

28,087

25,019

Interest-bearing deposits

30,109

30,517

30,256

30,239

29,765

Total deposits

59,736

59,140

57,760

58,326

54,784

Common shareholders' equity

7,613

7,559

7,518

7,534

7,373

NET INTEREST INCOME (fully taxable equivalent basis)

Net interest income

$

434

$

423

$

416

$

1,693

$

1,659

Net interest margin

2.58

%

2.54

%

2.57

%

2.60

%

2.70

%

CREDIT QUALITY

Total nonperforming assets

$

391

$

381

$

300

Loans past due 90 days or more and still accruing

17

5

5

Net loan charge-offs

51

23

1

$

100

$

25

Allowance for loan losses

634

622

594

Allowance for credit losses on lending-related commitments

45

48

41

Total allowance for credit losses

679

670

635

Allowance for loan losses as a percentage of total loans

1.29

%

1.27

%

1.22

%

Net loan charge-offs as a percentage of average total loans

0.42

0.19

0.01

0.21

%

0.05

%

Nonperforming assets as a percentage of total loans and foreclosed property

0.80

0.78

0.62

Allowance for loan losses as a percentage of total nonperforming loans

167

169

205

(a)

Basel III rules became effective on January 1, 2015, with transitional provisions. All prior period data is based on Basel I rules.

(b)

See Reconciliation of Non-GAAP Financial Measures.

n/a - not applicable.

 

 CONSOLIDATED BALANCE SHEETS

 Comerica Incorporated and Subsidiaries

December 31,

September 30,

December 31,

(in millions, except share data)

2015

2015

2014

(unaudited)

(unaudited)

ASSETS

Cash and due from banks

$

1,157

$

1,101

$

1,026

Interest-bearing deposits with banks

4,990

6,099

5,045

Other short-term investments

113

107

99

Investment securities available-for-sale

10,519

8,749

8,116

Investment securities held-to-maturity

1,981

1,863

1,935

Commercial loans

31,659

31,777

31,520

Real estate construction loans

2,001

1,874

1,955

Commercial mortgage loans

8,977

8,787

8,604

Lease financing

724

751

805

International loans

1,368

1,382

1,496

Residential mortgage loans

1,870

1,880

1,831

Consumer loans

2,485

2,491

2,382

Total loans

49,084

48,942

48,593

Less allowance for loan losses

(634)

(622)

(594)

Net loans

48,450

48,320

47,999

Premises and equipment

550

541

532

Accrued income and other assets

4,117

4,232

4,434

Total assets

$

71,877

$

71,012

$

69,186

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits

$

30,839

$

28,697

$

27,224

Money market and interest-bearing checking deposits

23,532

23,948

23,954

Savings deposits

1,898

1,853

1,752

Customer certificates of deposit

3,552

4,126

4,421

Foreign office time deposits

32

144

135

Total interest-bearing deposits

29,014

30,071

30,262

Total deposits

59,853

58,768

57,486

Short-term borrowings

23

109

116

Accrued expenses and other liabilities

1,383

1,413

1,507

Medium- and long-term debt

3,058

3,100

2,675

Total liabilities

64,317

63,390

61,784

Common stock - $5 par value:

Authorized - 325,000,000 shares

Issued - 228,164,824 shares

1,141

1,141

1,141

Capital surplus

2,173

2,165

2,188

Accumulated other comprehensive loss

(429)

(345)

(412)

Retained earnings

7,084

7,007

6,744

Less cost of common stock in treasury - 52,457,113 shares at 12/31/15; 51,010,418 shares at 9/30/15 and 49,146,225 shares at 12/31/14

(2,409)

(2,346)

(2,259)

Total shareholders' equity

7,560

7,622

7,402

Total liabilities and shareholders' equity

$

71,877

$

71,012

$

69,186

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries

Three Months Ended

Years Ended

December 31,

December 31,

(in millions, except per share data)

2015

2014

2015

2014

INTEREST INCOME

Interest and fees on loans

$

395

$

383

$

1,551

$

1,525

Interest on investment securities

56

51

216

211

Interest on short-term investments

6

4

17

14

Total interest income

457

438

1,784

1,750

INTEREST EXPENSE

Interest on deposits

10

12

43

45

Interest on medium- and long-term debt

14

11

52

50

Total interest expense

24

23

95

95

Net interest income

433

415

1,689

1,655

Provision for credit losses

60

2

147

27

Net interest income after provision for credit losses

373

413

1,542

1,628

NONINTEREST INCOME

Card fees

77

24

290

92

Service charges on deposit accounts

55

53

223

215

Fiduciary income

45

47

187

180

Commercial lending fees

30

29

99

98

Letter of credit fees

14

14

53

57

Bank-owned life insurance

11

8

40

39

Foreign exchange income

11

10

40

40

Brokerage fees

4

4

17

17

Net securities losses

(2)

Other noninterest income

23

36

103

130

Total noninterest income

270

225

1,050

868

NONINTEREST EXPENSES

Salaries and benefits expense

262

245

1,009

980

Outside processing fee expense

83

33

332

122

Net occupancy expense

41

46

159

171

Equipment expense

14

14

53

57

Software expense

26

23

99

95

FDIC insurance expense

10

8

37

33

Advertising expense

7

7

24

23

Litigation-related expense

(32)

4

Gain on debt redemption

(32)

Other noninterest expenses

43

43

161

173

Total noninterest expenses

486

419

1,842

1,626

Income before income taxes

157

219

750

870

Provision for income taxes

41

70

229

277

NET INCOME

116

149

521

593

Less income allocated to participating securities

1

1

6

7

Net income attributable to common shares

$

115

$

148

$

515

$

586

Earnings per common share:

Basic

$

0.65

$

0.83

$

2.93

$

3.28

Diluted

0.64

0.80

2.84

3.16

Comprehensive income

31

54

504

572

Cash dividends declared on common stock

37

36

148

143

Cash dividends declared per common share

0.21

0.20

0.83

0.79

 

CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries

Fourth

Third

Second

First

Fourth

Fourth Quarter 2015 Compared To:

Quarter

Quarter

Quarter

Quarter

Quarter

Third Quarter 2015

Fourth Quarter 2014

(in millions, except per share data)

2015

2015

2015

2015

2014

 Amount

  Percent

Amount

  Percent

INTEREST INCOME

Interest and fees on loans

$

395

$

390

$

388

$

378

$

383

$

5

1

%

$

12

3

%

Interest on investment securities

56

54

53

53

51

2

6

5

12

Interest on short-term investments

6

4

3

4

4

2

19

2

8

Total interest income

457

448

444

435

438

9

2

19

4

INTEREST EXPENSE

Interest on deposits

10

11

11

11

12

(1)

(3)

(2)

(7)

Interest on medium- and long-term debt

14

15

12

11

11

(1)

(6)

3

21

Total interest expense

24

26

23

22

23

(2)

(4)

1

7

Net interest income

433

422

421

413

415

$

11

3

$

18

4

Provision for credit losses

60

26

47

14

2

34

N/M

58

N/M

Net interest income after provision

for credit losses

373

396

374

399

413

(23)

(6)

(40)

(10)

NONINTEREST INCOME

Card fees

77

74

72

67

24

3

3

53

N/M

Service charges on deposit accounts

55

57

56

55

53

(2)

(3)

2

4

Fiduciary income

45

47

48

47

47

(2)

(4)

(2)

(4)

Commercial lending fees

30

22

22

25

29

8

35

1

5

Letter of credit fees

14

13

13

13

14

1

2

Bank-owned life insurance

11

10

10

9

8

1

1

3

18

Foreign exchange income

11

10

9

10

10

1

5

1

11

Brokerage fees

4

5

4

4

4

(1)

(12)

Net securities losses

(2)

N/M

Other noninterest income

23

26

27

27

36

(3)

(7)

(13)

(33)

Total noninterest income

270

264

261

255

225

6

2

45

20

NONINTEREST EXPENSES

Salaries and benefits expense

262

243

251

253

245

19

8

17

7

Outside processing fee expense

83

86

86

77

33

(3)

(5)

50

N/M

Net occupancy expense

41

41

39

38

46

(5)

(10)

Equipment expense

14

13

13

13

14

1

1

Software expense

26

26

24

23

23

3

9

FDIC insurance expense

10

9

9

9

8

1

24

2

31

Advertising expense

7

6

5

6

7

1

13

Litigation-related expense

(3)

(30)

1

3

N/M

Other noninterest expenses

43

40

39

39

43

3

8

Total noninterest expenses

486

461

436

459

419

25

5

67

16

Income before income taxes

157

199

199

195

219

(42)

(21)

(62)

(29)

Provision for income taxes

41

63

64

61

70

(22)

(35)

(29)

(41)

NET INCOME

116

136

135

134

149

(20)

(15)

(33)

(23)

Less income allocated to participating securities

1

2

1

2

1

(1)

(14)

Net income attributable to common shares

$

115

$

134

$

134

$

132

$

148

$

(19)

(15)

%

$

(33)

(23)

%

Earnings per common share:

Basic

$

0.65

$

0.76

$

0.76

$

0.75

$

0.83

$

(0.11)

(14)

%

$

(0.18)

(22)

%

Diluted

0.64

0.74

0.73

0.73

0.80

(0.10)

(14)

(0.16)

(20)

Comprehensive income

31

187

109

176

54

(156)

(83)

(23)

(43)

Cash dividends declared on common stock

37

37

37

36

36

1

3

Cash dividends declared per common share

0.21

0.21

0.21

0.20

0.20

0.01

5

N/M - not meaningful

 

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)

Comerica Incorporated and Subsidiaries

2015

2014

(in millions)

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr

4th Qtr

Balance at beginning of period

$

622

$

618

$

601

$

594

$

592

Loan charge-offs:

Commercial

73

30

17

19

8

Commercial mortgage

1

2

2

Lease financing

1

International

1

11

2

6

Residential mortgage

1

1

Consumer

2

3

3

2

3

Total loan charge-offs

76

34

35

23

20

Recoveries on loans previously charged-off:

Commercial

6

8

10

9

6

Real estate construction

1

2

Commercial mortgage

11

2

5

3

10

Residential mortgage

1

1

Consumer

7

1

1

2

1

Total recoveries

25

11

17

15

19

Net loan charge-offs

51

23

18

8

1

Provision for loan losses

63

28

35

16

4

Foreign currency translation adjustment

(1)

(1)

(1)

Balance at end of period

$

634

$

622

$

618

$

601

$

594

Allowance for loan losses as a percentage of total loans

1.29

%

1.27

%

1.24

%

1.22

%

1.22

%

Net loan charge-offs as a percentage of average total loans

0.42

0.19

0.15

0.07

0.01

ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited)

Comerica Incorporated and Subsidiaries

2015

2014

(in millions)

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr

4th Qtr

Balance at beginning of period

$

48

$

50

$

39

$

41

$

43

Less: Charge-offs on lending-related commitments (a)

1

Add: Provision for credit losses on lending-related commitments

(3)

(2)

12

(2)

(2)

Balance at end of period

$

45

$

48

$

50

$

39

$

41

Unfunded lending-related commitments sold

$

$

$

12

$

1

$

(a) Charge-offs result from the sale of unfunded lending-related commitments.

 

CONSOLIDATED STATISTICAL DATA (unaudited)

Comerica Incorporated and Subsidiaries

December 31,

September 30,

June 30,

March 31,

December 31,

(in millions, except per share data)

2015

2015

2015

2015

2014

Commercial loans:

Floor plan

$

3,939

$

3,538

$

3,840

$

3,544

$

3,790

Other

27,720

28,239

28,883

28,547

27,730

Total commercial loans

31,659

31,777

32,723

32,091

31,520

Real estate construction loans

2,001

1,874

1,795

1,917

1,955

Commercial mortgage loans

8,977

8,787

8,674

8,558

8,604

Lease financing

724

751

786

792

805

International loans

1,368

1,382

1,420

1,433

1,496

Residential mortgage loans

1,870

1,880

1,865

1,859

1,831

Consumer loans:

Home equity

1,720

1,714

1,682

1,678

1,658

Other consumer

765

777

796

744

724

Total consumer loans

2,485

2,491

2,478

2,422

2,382

Total loans

$

49,084

$

48,942

$

49,741

$

49,072

$

48,593

Goodwill

$

635

$

635

$

635

$

635

$

635

Core deposit intangible

10

10

11

12

13

Other intangibles

4

4

4

3

2

Common equity tier 1 capital (a)

7,350

7,327

7,280

7,230

n/a

Tier 1 common capital (b)

n/a

n/a

n/a

n/a

7,169

Risk-weighted assets (a)

69,731

69,718

69,967

69,514

68,273

Common equity tier 1 risk-based capital ratio (a)

10.54

%

10.51

%

10.40

%

10.40

%

n/a

Tier 1 common risk-based capital ratio (b)

n/a

n/a

n/a

n/a

10.50

%

Tier 1 risk-based capital ratio (a)

10.54

10.51

10.40

10.40

10.50

Total risk-based capital ratio (a)

12.69

12.82

12.38

12.35

12.51

Leverage ratio (a)

10.22

10.28

10.56

10.53

10.35

Tangible common equity ratio (b)

9.70

9.91

9.92

9.97

9.85

Common shareholders' equity per share of common stock

$

43.03

$

43.02

$

42.18

$

42.12

$

41.35

Tangible common equity per share of common stock (b)

39.33

39.36

38.53

38.47

37.72

Market value per share for the quarter:

High

47.44

52.93

53.45

47.94

50.14

Low

39.52

40.01

44.38

40.09

42.73

Close

41.83

41.10

51.32

45.13

46.84

Quarterly ratios:

Return on average common shareholders' equity

6.08

%

7.19

%

7.21

%

7.20

%

7.96

%

Return on average assets

0.64

0.76

0.79

0.78

0.86

Efficiency ratio (c)

69.11

67.08

63.68

68.50

65.26

Number of banking centers

477

477

477

482

481

Number of employees - full time equivalent

8,880

8,941

8,901

8,831

8,876

(a)

Basel III rules became effective January 1, 2015, with transitional provisions. All prior period data is based on Basel I rules.

(b)

See Reconciliation of Non-GAAP Financial Measures.

(c)

Noninterest expenses as a percentage of the sum of net interest income (FTE) and noninterest income excluding net securities gains (losses).

n/a - not applicable.

 

PARENT COMPANY ONLY BALANCE SHEETS (unaudited)

Comerica Incorporated

December 31,

September 30,

December 31,

(in millions, except share data)

2015

2015

2014

ASSETS

Cash and due from subsidiary bank

$

4

$

5

$

Short-term investments with subsidiary bank

569

563

1,133

Other short-term investments

89

89

94

Investment in subsidiaries, principally banks

7,523

7,596

7,411

Premises and equipment

3

2

2

Other assets

137

138

138

      Total assets

$

8,325

$

8,393

$

8,778

LIABILITIES AND SHAREHOLDERS' EQUITY

Medium- and long-term debt

$

608

$

618

$

1,208

Other liabilities

157

153

168

      Total liabilities

765

771

1,376

Common stock - $5 par value:

    Authorized - 325,000,000 shares

    Issued - 228,164,824 shares

1,141

1,141

1,141

Capital surplus

2,173

2,165

2,188

Accumulated other comprehensive loss

(429)

(345)

(412)

Retained earnings

7,084

7,007

6,744

Less cost of common stock in treasury - 52,457,113 shares at 12/31/15; 51,010,418 shares at 9/30/15 and 49,146,225 shares at 12/31/14

(2,409)

(2,346)

(2,259)

      Total shareholders' equity

7,560

7,622

7,402

      Total liabilities and shareholders' equity

$

8,325

$

8,393

$

8,778

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)

Comerica Incorporated and Subsidiaries

Accumulated

Common Stock

Other

Total

Shares

Capital

Comprehensive

Retained

Treasury

Shareholders'

(in millions, except per share data)

 Outstanding

Amount

Surplus

Loss

Earnings

Stock

Equity

BALANCE AT DECEMBER 31, 2013

182.3

$

1,141

$

2,179

$

(391)

$

6,318

$

(2,097)

$

7,150

Net income

593

593

Other comprehensive loss, net of tax

(21)

(21)

Cash dividends declared on common stock ($0.79 per share)

(143)

(143)

Purchase of common stock

(5.4)

(260)

(260)

Net issuance of common stock under employee stock plans

2.1

(27)

(24)

96

45

Share-based compensation

38

38

Other

(2)

2

BALANCE AT DECEMBER 31, 2014

179.0

$

1,141

$

2,188

$

(412)

$

6,744

$

(2,259)

$

7,402

Net income

521

521

Other comprehensive loss, net of tax

(17)

(17)

Cash dividends declared on common stock ($0.83 per share)

(148)

(148)

Purchase of common stock

(5.3)

(240)

(240)

Purchase and retirement of warrants

(10)

(10)

Net issuance of common stock under employee stock plans

1.0

(22)

(11)

47

14

Net issuance of common stock for warrants

1.0

(21)

(22)

43

Share-based compensation

38

38

BALANCE AT DECEMBER 31, 2015

175.7

$

1,141

$

2,173

$

(429)

$

7,084

$

(2,409)

$

7,560

 

 BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)

 Comerica Incorporated and Subsidiaries

(dollar amounts in millions)

Business

Retail

Wealth

Three Months Ended December 31, 2015

Bank

Bank

Management

Finance

Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

387

$

160

$

47

$

(162)

$

2

$

434

Provision for credit losses

41

23

(7)

3

60

Noninterest income

147

49

57

15

2

270

Noninterest expenses

208

191

81

2

4

486

Provision (benefit) for income taxes (FTE)

85

(4)

9

(47)

(1)

42

Net income (loss)

$

200

$

(1)

$

21

$

(102)

$

(2)

$

116

Net loan charge-offs (recoveries)

$

35

$

25

$

(9)

$

$

$

51

Selected average balances:

Assets

$

38,765

$

6,549

$

5,199

$

12,678

$

8,716

$

71,907

Loans

37,682

5,868

4,998

48,548

Deposits

31,738

23,262

4,355

120

261

59,736

Statistical data:

Return on average assets (a)

2.06

%

(0.03)

%

1.68

%

N/M

N/M

0.64

%

Efficiency ratio (b)

39.00

91.69

77.02

N/M

N/M

69.11

Business

Retail

Wealth

Three Months Ended September 30, 2015

Bank

Bank

Management

Finance

Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

380

$

158

$

45

$

(162)

$

2

$

423

Provision for credit losses

30

2

(3)

(3)

26

Noninterest income

145

49

59

15

(4)

264

Noninterest expenses

202

185

74

2

(2)

461

Provision (benefit) for income taxes (FTE)

99

7

12

(56)

2

64

Net income (loss)

$

194

$

13

$

21

$

(93)

$

1

$

136

Net loan charge-offs (recoveries)

$

23

$

1

$

(1)

$

$

$

23

Selected average balances:

Assets

$

39,210

$

6,518

$

5,228

$

12,177

$

8,200

$

71,333

Loans

38,113

5,835

5,024

48,972

Deposits

31,397

23,079

4,188

212

264

59,140

Statistical data:

Return on average assets (a)

1.98

%

0.23

%

1.62

%

N/M

N/M

0.76

%

Efficiency ratio (b)

38.41

89.33

71.11

N/M

N/M

67.08

Business

Retail

Wealth

Three Months Ended December 31, 2014

Bank

Bank

Management

Finance

Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

387

$

152

$

47

$

(177)

7

$

416

Provision for credit losses

8

(2)

(9)

5

2

Noninterest income

104

45

60

16

225

Noninterest expenses

148

182

80

3

6

419

Provision (benefit) for income taxes (FTE)

119

6

14

(64)

(4)

71

Net income (loss)

$

216

$

11

$

22

$

(100)

$

$

149

Net loan charge-offs (recoveries)

$

(1)

$

4

$

(2)

$

$

$

1

Selected average balances:

Assets

$

37,896

$

6,298

$

5,034

$

12,218

$

7,861

$

69,307

Loans

36,890

5,626

4,845

47,361

Deposits

30,897

22,301

4,094

195

273

57,760

Statistical data:

Return on average assets (a)

2.28

%

0.19

%

1.79

%

N/M

N/M

0.86

%

Efficiency ratio (b)

30.09

92.33

74.48

N/M

N/M

65.26

(a) Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.

(b) Noninterest expenses as a percentage of the sum of net interest income (FTE) and noninterest income excluding net securities gains.

FTE - Fully Taxable Equivalent

N/M - Not Meaningful

 

 MARKET SEGMENT FINANCIAL RESULTS (unaudited)

 Comerica Incorporated and Subsidiaries

(dollar amounts in millions)

Other

Finance

Three Months Ended December 31, 2015

Michigan

California

Texas

Markets

& Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

183

$

193

$

131

$

87

$

(160)

$

434

Provision for credit losses

(12)

(7)

57

19

3

60

Noninterest income

82

41

32

98

17

270

Noninterest expenses

161

108

103

108

6

486

Provision (benefit) for income taxes (FTE)

33

43

6

8

(48)

42

Net income (loss)

$

83

$

90

$

(3)

$

50

$

(104)

$

116

Net loan charge-offs

$

(2)

$

1

$

33

$

19

$

$

51

Selected average balances:

Assets

$

13,601

$

17,297

$

11,474

$

8,141

$

21,394

$

71,907

Loans

12,986

17,033

10,893

7,636

48,548

Deposits

22,123

18,545

10,807

7,880

381

59,736

Statistical data:

Return on average assets (a)

1.43

%

1.83

%

(0.10)

%

2.36

%

N/M

0.64

%

Efficiency ratio (b)

61.06

46.17

62.94

58.11

N/M

69.11

Other

Finance

Three Months Ended September 30, 2015

Michigan

California

Texas

Markets

& Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

180

$

187

$

129

$

87

$

(160)

$

423

Provision for credit losses

6

24

10

(11)

(3)

26

Noninterest income

85

38

34

96

11

264

Noninterest expenses

152

102

97

110

461

Provision (benefit) for income taxes (FTE)

36

37

20

25

(54)

64

Net income (loss)

$

71

$

62

$

36

$

59

$

(92)

$

136

Net loan charge-offs (recoveries)

$

9

$

10

$

4

$

$

$

23

Selected average balances:

Assets

$

13,856

$

17,060

$

11,578

$

8,462

$

20,377

$

71,333

Loans

13,223

16,789

10,997

7,963

48,972

Deposits

21,946

18,372

10,753

7,593

476

59,140

Statistical data:

Return on average assets (a)

1.23

%

1.27

%

1.16

%

2.82

%

N/M

0.76

%

Efficiency ratio (b)

57.49

45.28

59.54

59.86

N/M

67.08

Other

Finance

Three Months Ended December 31, 2014

Michigan

California

Texas

Markets

& Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

173

$

192

$

139

$

82

$

(170)

$

416

Provision for credit losses

(19)

(10)

18

8

5

2

Noninterest income

89

37

38

45

16

225

Noninterest expenses

157

100

95

58

9

419

Provision (benefit) for income taxes (FTE)

45

55

24

15

(68)

71

Net income (loss)

$

79

$

84

$

40

$

46

$

(100)

$

149

Net loan charge-offs (recoveries)

$

(5)

$

1

$

2

$

3

$

$

1

Selected average balances:

Assets

$

13,605

$

16,035

$

12,003

$

7,585

$

20,079

$

69,307

Loans

13,142

15,777

11,327

7,115

47,361

Deposits

21,530

18,028

10,825

6,909

468

57,760

Statistical data:

Return on average assets (a)

1.41

%

1.77

%

1.32

%

2.42

%

N/M

0.86

%

Efficiency ratio (b)

59.92

43.61

53.62

45.47

N/M

65.26

(a) Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.

(b) Noninterest expenses as a percentage of the sum of net interest income (FTE) and noninterest income excluding net securities gains.

FTE - Fully Taxable Equivalent

N/M - Not Meaningful

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

Comerica Incorporated and Subsidiaries

December 31,

September 30,

June 30,

March 31,

December 31,

(dollar amounts in millions)

2015

2015

2015

2015

2014

Tier 1 Common Capital Ratio:

Tier 1 and Tier 1 common capital (a)

n/a

n/a

n/a

n/a

$

7,169

Risk-weighted assets (a)

n/a

n/a

n/a

n/a

68,269

Tier 1 and Tier 1 common risk-based capital ratio

n/a

n/a

n/a

n/a

10.50

%

Tangible Common Equity Ratio:

Common shareholders' equity

$

7,560

$

7,622

$

7,523

$

7,500

$

7,402

Less:

Goodwill

635

635

635

635

635

Other intangible assets

14

14

15

15

15

Tangible common equity

$

6,911

$

6,973

$

6,873

$

6,850

$

6,752

Total assets

$

71,877

$

71,012

$

69,945

$

69,333

$

69,186

Less:

Goodwill

635

635

635

635

635

Other intangible assets

14

14

15

15

15

Tangible assets

$

71,228

$

70,363

$

69,295

$

68,683

$

68,536

Common equity ratio

10.52

%

10.73

%

10.76

%

10.82

%

10.70

%

Tangible common equity ratio

9.70

9.91

9.92

9.97

9.85

Tangible Common Equity per Share of Common Stock:

Common shareholders' equity

$

7,560

$

7,622

$

7,523

$

7,500

$

7,402

Tangible common equity

6,911

6,973

6,873

6,850

6,752

Shares of common stock outstanding (in millions)

176

177

178

178

179

Common shareholders' equity per share of common stock

$

43.03

$

43.02

$

42.18

$

42.12

$

41.35

Tangible common equity per share of common stock

39.33

39.36

38.53

38.47

37.72

(a) Tier 1 capital and risk-weighted assets as defined by Basel I risk-based capital rules.

n/a - not applicable.

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 Basel I risk-based capital rules in effect through December 31, 2014. Effective January 1, 2015, regulatory capital components and risk-weighted assets are defined by and calculated in conformity with Basel III risk-based capital rules. The tangible common equity ratio removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets. Tangible common equity per share of common stock removes the effect of intangible assets from common shareholders equity per share of common stock. 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



RELATED LINKS

http://www.comerica.com