Comerica Reports First Quarter 2013 Net Income Of $134 Million - 70 Cents Per Share

Broad-Based Average Total Loan Growth Continues

Noninterest Expenses Reflect Continued Tight Expense Control

Share Repurchases, Combined with Dividends, Returned 77 Percent of First Quarter 2013 Net Income to Shareholders

Apr 16, 2013, 06:40 ET from Comerica Incorporated

DALLAS, April 16, 2013 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported first quarter 2013 net income of $134 million, compared to $130 million for the fourth quarter 2012. Earnings per fully diluted share were 70 cents for the first quarter 2013, compared to 68 cents for the fourth quarter 2012.

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(dollar amounts in millions, except per share data)

1st Qtr '13

4th Qtr '12

1st Qtr '12

Net interest income (a)

$

416

$

424

$

442

Provision for credit losses

16

16

22

Noninterest income

200

204

206

Noninterest expenses

416

427

448

Provision for income taxes

50

55

48

Net income

134

130

130

Net income attributable to common shares

132

128

129

Diluted income per common share

0.70

0.68

0.66

Average diluted shares (in millions)

187

188

196

Tier 1 common capital ratio (c)

10.40

%

(b)

10.17

%

10.30

%

Tangible common equity ratio (c)

9.86

9.76

10.25

(a)

Included accretion of the purchase discount on the acquired loan portfolio of $11 million ($7 million, after tax), $13 million ($8 million, after tax) and $25 million ($16 million, after tax) in the first quarter 2013, fourth quarter 2012 and first quarter 2012, respectively.

(b)

March 31, 2013 ratio is estimated.

(c)

See Reconciliation of Non-GAAP Financial Measures

"Broad-based average loan growth in each of our primary geographic markets, together with tight expense controls, contributed to our increased net income in the first quarter," said Ralph W. Babb Jr., chairman and chief executive officer. "Our commercial banking expertise drove our overall loan growth. An expected decline in Mortgage Banker Finance was more than offset by increases in general Middle Market, National Dealer Services, Energy, and Technology and Life Sciences. Credit quality continued to be stable.

"We remain focused on total payout to shareholders, reflected by share repurchases and dividends, while maintaining our strong capital ratios. We repurchased 2.1 million shares in the first quarter and combined with dividends, we returned 77 percent of first quarter net income to shareholders. On March 14, we announced that the Federal Reserve had completed its 2013 capital plan review and did not object to our capital plan and contemplated capital distributions. Our capital plan includes up to $288 million in share repurchases for the four-quarter period that ends in the first quarter 2014."

First Quarter 2013 Compared to Fourth Quarter 2012

  • Average total loans increased $498 million, or 1 percent, to $44.6 billion, primarily reflecting an increase of $594 million, or 2 percent, in commercial loans, partially offset by a decrease of $106 million, or 1 percent, in combined commercial mortgage and real estate construction loans. A $356 million decrease in Mortgage Banker Finance was more than offset by broad-based increases in other business lines, including general Middle Market, National Dealer Services, Energy, and Technology and Life Sciences. Period-end total loans decreased $990 million, or 2 percent, to $45.1 billion, primarily reflecting a decrease of $687 million in Mortgage Banker Finance.
  • Average total deposits decreased $590 million, to $50.7 billion, primarily reflecting a decrease of $1.3 billion, or 6 percent, in noninterest-bearing deposits. The decrease in average noninterest-bearing deposits reflected a $675 million decrease in the Financial Services Division, which provides services to title and escrow companies. Period-end total deposits decreased $74 million to $52.1 billion, reflecting a decrease of $502 million in noninterest-bearing deposits, largely offset by increases of $267 million in money market and interest-bearing checking deposits and $222 million in customer certificates of deposit.
  • Net interest income was $416 million in the first quarter 2013, compared to $424 million in the fourth quarter 2012. The $8 million decrease in net interest income was primarily due to two fewer days in the first quarter. Accretion of the purchase discount on the acquired loan portfolio was $11 million in the first quarter 2013, compared to $13 million in the fourth quarter 2012.
  • Stable credit quality continued in the first quarter 2013. The provision for credit losses of $16 million in the first quarter 2013 was unchanged compared to the fourth quarter 2012.
  • Noninterest income decreased $4 million to $200 million in the first quarter 2013, compared to $204 million in the fourth quarter 2012, primarily reflecting decreases in customer derivative income and commercial lending fees from high fourth quarter 2012 levels.
  • Noninterest expenses decreased $11 million to $416 million in the first quarter 2013, compared to $427 million in the fourth quarter 2012, primarily due to a decrease in salaries expense.
  • Comerica repurchased 2.1 million shares of common stock ($71 million) in the first quarter 2013 under the 2012 capital plan. Combined with dividends, 77 percent of net income was returned to shareholders in the first quarter 2013.
  • As previously announced, the Federal Reserve completed its review of Comerica's 2013 capital plan in the first quarter 2013 and did not object to the capital distributions contemplated in the plan, including up to $288 million of share repurchases for the four-quarter period ending March 31, 2014.
  • Capital remained solid at March 31, 2013, as evidenced by an estimated Tier 1 common capital ratio of 10.40 percent and an estimated Tier 1 common capital ratio under fully phased-in Basel III (as proposed) of 9.4 percent.

Net Interest Income

(dollar amounts in millions)

1st Qtr '13

4th Qtr '12

1st Qtr '12

Net interest income

$

416

$

424

$

442

Net interest margin

2.88

%

2.87

%

3.19

%

Selected average balances:

Total earning assets

$

58,607

$

59,276

$

56,185

Total loans

44,617

44,119

42,269

Total investment securities

10,021

10,250

9,889

Federal Reserve Bank deposits (excess liquidity)

3,669

4,638

3,799

Total deposits

50,692

51,282

48,311

Total noninterest-bearing deposits

21,506

22,758

19,637

  • Net interest income of $416 million in the first quarter 2013 decreased $8 million compared to the fourth quarter 2012. 
    • Two fewer days in the first quarter 2013 decreased net interest income by $7 million.
    • An increase in loan volumes increased net interest income by $4 million.
    • Lower loan yields due to shifts in the loan portfolio mix decreased net interest income by $2 million and a decline in LIBOR decreased net interest income by $1 million.
    • A decrease in the accretion of the purchase discount on the acquired loan portfolio decreased net interest income by $2 million
    • A decrease in funding costs increased net interest income by $2 million. The rate paid on total average interest-bearing deposits decreased 1 basis point to 21 basis points for the first quarter 2013.
    • Lower reinvestment yields on mortgage-backed investment securities and a decrease in average balances decreased net interest income by $2 million.
  • Average earning assets decreased $669 million in the first quarter 2013, compared to the fourth quarter 2012, primarily reflecting decreases of $969 million in excess liquidity and $229 million in average investment securities available-for-sale, partially offset by a $498 million increase in average loans.
  • The net interest margin of 2.88 percent increased 1 basis point compared to the fourth quarter 2012. The increase in net interest margin was primarily due to the benefit provided by a decrease in excess liquidity (4 basis points) and lower deposit costs (1 basis point), partially offset by lower loan yields (2 basis points), lower accretion on the acquired loan portfolio (1 basis point) and lower yields on mortgage-backed investment securities (1 basis point).

Noninterest Income Noninterest income decreased $4 million to $200 million for the first quarter 2013, compared to $204 million for the fourth quarter 2012. The decrease was primarily due to decreases of $5 million in customer derivative income and $4 million in commercial lending fees, both from high fourth quarter 2012 levels, partially offset by a $3 million seasonal increase in service charges on deposit accounts.

Noninterest Expenses Noninterest expenses decreased $11 million to $416 million in the first quarter 2013, compared to $427 million in the fourth quarter 2012. The decrease was primarily due to decreases of $8 million in salaries expense, largely reflecting two fewer days in the quarter and a decrease in severance expense, $3 million in net occupancy expense, $2 million in restructuring expenses and $2 million in other real estate expense, partially offset by an increase of $4 million in employee benefits expense, primarily due to an increase in pension expense.

Provision for Income Taxes The provision for income taxes was $50 million in the first quarter 2013, compared to $55 million in the fourth quarter 2012. The fourth quarter 2012 provision for income taxes included adjustments for certain discrete state tax items totaling $5 million.

Credit Quality "Our strong credit culture continued to be reflected in solid credit quality metrics," said Babb. "We had lower net charge-offs along with a decline in nonperforming assets. Our provision for credit losses was basically unchanged from the fourth quarter 2012."

(dollar amounts in millions)

1st Qtr '13

4th Qtr '12

1st Qtr '12

Net credit-related charge-offs

$

24

$

37

$

45

Net credit-related charge-offs/Average total loans

0.21

%

0.34

%

0.43

%

Provision for credit losses

$

16

$

16

$

22

Nonperforming loans (a)

515

541

856

Nonperforming assets (NPAs) (a)

555

595

923

NPAs/Total loans and foreclosed property

1.23

%

1.29

%

2.14

%

Loans past due 90 days or more and still accruing

$

25

$

23

$

50

Allowance for loan losses

617

629

704

Allowance for credit losses on lending-related commitments (b)

36

32

25

Total allowance for credit losses

653

661

729

Allowance for loan losses/Period-end total loans

1.37

%

1.37

%

1.64

%

Allowance for loan losses/Nonperforming loans

120

116

82

(a)

Excludes loans acquired with credit impairment.

(b)

Included in "Accrued expenses and other liabilities" on the consolidated balance sheets.

  • Nonaccrual loans decreased $25 million, to $494 million at March 31, 2013, compared to $519 million at December 31, 2012.
  • Internal watch list loans remained stable at $3.1 billion at both March 31, 2013 and December 31, 2012. 
  • During the first quarter 2013, $34 million of borrower relationships over $2 million were transferred to nonaccrual status, a decrease of $2 million from the fourth quarter 2012.   

Full-Year 2013 Outlook For full-year 2013, management expects the following compared to 2012, assuming a continuation of the current slow growing economic environment:

  • Continued growth in average loans at a slower pace, with economic uncertainty impacting demand and a continued focus on maintaining pricing and structure discipline in a competitive environment.
  • Lower net interest income, reflecting both a decline of $40 million to $50 million in purchase accounting accretion and the effect of continued low rates. Loan growth should partially offset the impact of low rates on loans and securities.
  • Provision for credit losses stable, reflecting loan growth offset by a decline in nonperforming loans and net charge-offs.
  • Customer-driven noninterest income relatively stable, reflecting cross-sell initiatives and selective pricing adjustments partially offset by regulatory pressures on certain products, such as customer derivatives. Outlook does not include expectations for non-customer driven income.
  • Lower noninterest expense, reflecting further cost savings due to tight expense control and no restructuring expenses.
  • Effective tax rate of approximately 27.5 percent.

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 reported as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at March 31, 2013 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2013 results compared to fourth quarter 2012.

The following table presents net income (loss) by business segment.

(dollar amounts in millions)

1st Qtr '13

4th Qtr '12

1st Qtr '12

Business Bank

$

198

85

%

$

209

90

%

$

203

89

%

Retail Bank

10

4

8

3

13

6

Wealth Management

25

11

16

7

13

5

233

100

%

233

100

%

229

100

%

Finance

(98)

(100)

(88)

Other (a)

(1)

(3)

(11)

Total

$

134

$

130

$

130

(a)

Includes items not directly associated with the three major business segments or the Finance Division.

Business Bank

(dollar amounts in millions)

1st Qtr '13

4th Qtr '12

1st Qtr '12

Net interest income (FTE)

$

375

$

387

$

373

Provision for credit losses

20

6

2

Noninterest income

77

79

81

Noninterest expenses

146

149

158

Net income

198

209

203

Net credit-related charge-offs

16

26

28

Selected average balances:

Assets

35,780

35,359

33,178

Loans

34,753

34,325

32,238

Deposits

25,514

26,051

23,997

  • Average loans increased $428 million, primarily reflecting an increase in Middle Market, partially offset by a decrease in Mortgage Banker Finance. The increase in Middle Market was primarily due to increases in general Middle Market, National Dealer Services, Energy, and Technology and Life Sciences.
  • Average deposits decreased $537 million, primarily reflecting a decrease in Middle Market, partially offset by an increase in Corporate. The decrease in Middle Market was primarily due to decreases in the Financial Services Division, Technology and Life Sciences, and Energy.
  • Net interest income decreased $12 million, primarily due to two fewer days in the quarter, a decrease in funds transfer pricing (FTP) credits, due to a decrease in average deposits, and lower loan yields, partially offset by the benefit provided by an increase in average loans.
  • The provision for credit losses increased $14 million, primarily reflecting an increase due to the impact of enhancements to the approach used to estimate probability of default statistics used in determining the allowance for loan losses, partially offset by improvements in credit quality.
  • Noninterest income decreased $2 million, primarily due to decreases in commercial lending fees, customer derivative income and letter of credit fees, partially offset by an increase in service charges on deposit accounts.
  • Noninterest expenses decreased $3 million, primarily due to decreases in salaries expense and legal fees.

Retail Bank

(dollar amounts in millions)

1st Qtr '13

4th Qtr '12

1st Qtr '12

Net interest income (FTE)

$

155

$

156

$

167

Provision for credit losses

6

7

6

Noninterest income

41

43

42

Noninterest expenses

175

181

183

Net income (loss)

10

8

13

Net credit-related charge-offs

8

6

12

Selected average balances:

Assets

5,973

5,952

6,173

Loans

5,276

5,255

5,462

Deposits

21,049

20,910

20,373

  • Average loans increased $21 million, primarily due to an increase in Small Business, partially offset by a decrease in Retail Banking.
  • Average deposits increased $139 million, primarily due to an increase in Retail Banking, partially offset by a decrease in Small Business.
  • Noninterest income decreased $2 million, primarily due to decreases in customer derivative income in Small Business and service charges on deposit accounts.
  • Noninterest expense decreased $6 million, primarily due to a decrease in salaries expense and smaller decreases in several other noninterest expense categories.

Wealth Management

(dollar amounts in millions)

1st Qtr '13

4th Qtr '12

1st Qtr '12

Net interest income (FTE)

$

46

$

47

$

47

Provision for credit losses

(6)

2

12

Noninterest income

65

65

65

Noninterest expenses

79

84

80

Net income

25

16

13

Net credit-related charge-offs

5

5

Selected average balances:

Assets

4,738

4,686

4,636

Loans

4,588

4,539

4,569

Deposits

3,682

3,798

3,611

  • Average loans increased $49 million, primarily due to an increase in Private Banking.
  • Average deposits decreased $116 million, primarily due to a decrease in Private Banking.
  • The provision for credit losses decreased $8 million, primarily due to improvements in credit quality, partially offset by the impact of enhancements to the approach used to estimate probability of default statistics used in determining the allowance for loan losses.
  • Noninterest expenses decreased $5 million, primarily due to an operational loss recorded in the fourth quarter and a decrease in salaries expense.

Geographic Market Segments The geographic market segments were realigned in the fourth quarter 2012 to reflect Comerica's three largest geographic markets: Michigan, California and Texas. Other Markets includes Florida, Arizona, the International Finance division and businesses that have a significant presence outside of the three primary geographic markets. The tables below present the geographic market results based on the methodologies in effect at March 31, 2013 and are presented on a fully taxable equivalent (FTE) basis.

The following table presents net income (loss) by market segment.

(a)

Includes items not directly associated with the geographic markets.

(dollar amounts in millions)

1st Qtr '13

4th Qtr '12

1st Qtr '12

Michigan

$

77

33

%

$

74

32

%

$

78

34

%

California

56

24

62

26

64

28

Texas

44

19

47

20

41

18

Other Markets

56

24

50

22

46

20

233

100

%

233

100

%

229

100

%

Finance & Other (a)

(99)

(103)

(99)

     Total

$

134

$

130

$

130

  • Average loans increased $235 million in Michigan, $267 million in California and $253 million in Texas.
  • Average deposits decreased $1.1 billion in California and increased $236 million in Michigan and $150 million in Texas. The decrease in California was primarily due to decreases in Middle Market and Private Banking, partially offset by an increase in Corporate. The decrease in Middle Market primarily reflected decreases in the Financial Services Division and Technology and Life Sciences.
  • The provision for credit losses in California increased $14 million, primarily reflecting an increase due to the impact of enhancements in the approach used to estimate probability of default statistics used in determining the allowance for loan losses.

Michigan Market

(dollar amounts in millions)

1st Qtr '13

4th Qtr '12

1st Qtr '12

Net interest income (FTE)

$

189

$

192

$

196

Provision for credit losses

(8)

(8)

(3)

Noninterest income

92

97

98

Noninterest expenses

168

180

179

Net income

77

74

78

Net credit-related charge-offs

5

1

18

Selected average balances:

Assets

14,042

13,782

14,092

Loans

13,650

13,415

13,829

Deposits

20,255

20,019

19,415

California Market

(dollar amounts in millions)

1st Qtr '13

4th Qtr '12

1st Qtr '12

Net interest income (FTE)

$

171

$

178

$

165

Provision for credit losses

21

7

(3)

Noninterest income

35

35

33

Noninterest expenses

97

100

99

Net income

56

62

64

Net credit-related charge-offs

10

12

11

Selected average balances:

Assets

13,795

13,549

12,310

Loans

13,542

13,275

12,096

Deposits

14,356

15,457

13,688

 

Texas Market

(dollar amounts in millions)

1st Qtr '13

4th Qtr '12

1st Qtr '12

Net interest income (FTE)

$

135

$

136

$

150

Provision for credit losses

8

4

25

Noninterest income

31

31

31

Noninterest expenses

91

90

93

Net income

44

47

41

Net credit-related charge-offs

6

5

7

Selected average balances:

Assets

10,795

10,554

10,080

Loans

10,071

9,818

9,295

Deposits

9,959

9,809

10,229

 

Conference Call and Webcast Comerica will host a conference call to review first quarter 2013 financial results at 7 a.m. CT Tuesday, April 16, 2013. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 22329365). The call and supplemental financial information can also be accessed via Comerica's "Investor Relations" page at www.comerica.com. A telephone replay will be available approximately two hours following the conference call through April 30, 2013. The conference call replay can be accessed by calling (855) 859-2056 or (404) 537-3406 (event ID No. 22329365). 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 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" 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 the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets; changes in Comerica's credit rating; the interdependence of financial service companies; changes in regulation or oversight; unfavorable developments concerning credit quality; any future acquisitions or divestitures; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers; the implementation of Comerica's strategies and business models; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties, failure of technology infrastructure or information security incidents; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; competitive product and pricing pressures among financial institutions within Comerica's markets; changes in customer behavior; 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 13 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2012. 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

March 31,

December 31,

March 31,

(in millions, except per share data)

2013

2012

2012

PER COMMON SHARE AND COMMON STOCK DATA

Diluted net income

$

0.70

$

0.68

$

0.66

Cash dividends declared

0.17

0.15

0.10

Common shareholders' equity (at period end)

37.38

36.87

35.44

Tangible common equity (at period end) (a)

33.87

33.38

32.06

Average diluted shares (in thousands)

187,442

187,954

196,021

KEY RATIOS

Return on average common shareholders' equity

7.68

%

7.36

%

7.50

%

Return on average assets

0.84

0.81

0.85

Tier 1 common capital ratio (a) (b)

10.40

10.17

10.30

Tier 1 risk-based capital ratio (b)

10.40

10.17

10.30

Total risk-based capital ratio (b)

13.45

13.18

14.03

Leverage ratio (b)

10.76

10.57

10.99

Tangible common equity ratio (a)

9.86

9.76

10.25

AVERAGE BALANCES

Commercial loans

$

28,056

$

27,462

$

24,736

Real estate construction loans:

Commercial Real Estate business line (c)

1,116

1,033

1,056

Other business lines (d)

198

266

397

Total real estate construction loans

1,314

1,299

1,453

Commercial mortgage loans:

Commercial Real Estate business line (c)

1,836

1,939

2,520

Other business lines (d)

7,562

7,580

7,682

Total commercial mortgage loans

9,398

9,519

10,202

Lease financing

857

839

897

International loans

1,282

1,314

1,205

Residential mortgage loans

1,556

1,525

1,519

Consumer loans

2,154

2,161

2,257

Total loans

44,617

44,119

42,269

Earning assets

58,607

59,276

56,185

Total assets

63,451

64,257

61,345

Noninterest-bearing deposits

21,506

22,758

19,637

Interest-bearing deposits

29,186

28,524

28,674

Total deposits

50,692

51,282

48,311

Common shareholders' equity

6,956

7,062

6,939

NET INTEREST INCOME

Net interest income (fully taxable equivalent basis)

$

416

$

425

$

443

Fully taxable equivalent adjustment

1

1

Net interest margin (fully taxable equivalent basis)

2.88

%

2.87

%

3.19

%

CREDIT QUALITY

Nonaccrual loans

$

494

$

519

$

830

Reduced-rate loans

21

22

26

Total nonperforming loans (e)

515

541

856

Foreclosed property

40

54

67

Total nonperforming assets (e)

555

595

923

Loans past due 90 days or more and still accruing

25

23

50

Gross loan charge-offs

38

60

62

Loan recoveries

14

23

17

Net loan charge-offs

24

37

45

Allowance for loan losses

617

629

704

Allowance for credit losses on lending-related commitments

36

32

25

Total allowance for credit losses

653

661

729

Allowance for loan losses as a percentage of total loans

1.37

%

1.37

%

1.64

%

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

0.21

0.34

0.43

Nonperforming assets as a percentage of total loans and foreclosed property (e)

1.23

1.29

2.14

Allowance for loan losses as a percentage of total nonperforming loans

120

116

82

(a)

See Reconciliation of Non-GAAP Financial Measures.

(b)

March 31, 2013 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)

Lending-related commitment charge-offs were zero in all periods presented.

 

CONSOLIDATED BALANCE SHEETS

Comerica Incorporated and Subsidiaries

March 31,

December 31,

March 31,

(in millions, except share data)

2013

2012

2012

(unaudited)

(unaudited)

ASSETS

Cash and due from banks

$

877

$

1,395

$

984

Federal funds sold

100

10

Interest-bearing deposits with banks

4,720

3,039

2,965

Other short-term investments

115

125

180

Investment securities available-for-sale

10,286

10,297

10,061

Commercial loans

28,508

29,513

25,640

Real estate construction loans

1,396

1,240

1,442

Commercial mortgage loans

9,317

9,472

10,079

Lease financing

853

859

872

International loans

1,269

1,293

1,256

Residential mortgage loans

1,568

1,527

1,485

Consumer loans

2,156

2,153

2,238

Total loans

45,067

46,057

43,012

Less allowance for loan losses

(617)

(629)

(704)

Net loans

44,450

45,428

42,308

Premises and equipment

618

622

670

Accrued income and other assets

3,819

4,063

5,147

Total assets

$

64,885

$

65,069

$

62,325

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits

$

22,777

$

23,279

$

20,741

Money market and interest-bearing checking deposits

21,540

21,273

20,502

Savings deposits

1,652

1,606

1,586

Customer certificates of deposit

5,753

5,531

6,145

Foreign office time deposits

395

502

332

Total interest-bearing deposits

29,340

28,912

28,565

Total deposits

52,117

52,191

49,306

Short-term borrowings

58

110

82

Accrued expenses and other liabilities

1,023

1,106

1,033

Medium- and long-term debt

4,699

4,720

4,919

Total liabilities

57,897

58,127

55,340

Common stock - $5 par value:

Authorized - 325,000,000 shares

Issued - 228,164,824 shares

1,141

1,141

1,141

Capital surplus

2,157

2,162

2,154

Accumulated other comprehensive loss

(410)

(413)

(326)

Retained earnings

6,020

5,931

5,630

Less cost of common stock in treasury - 41,361,612 shares at 3/31/13, 39,889,610 shares at 12/31/12 and 31,032,920 shares at 3/31/12

(1,920)

(1,879)

(1,614)

Total shareholders' equity

6,988

6,942

6,985

Total liabilities and shareholders' equity

$

64,885

$

65,069

$

62,325

 

CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries

First

Fourth

Third

Second

First

First Quarter 2013 Compared To:

Quarter

Quarter

Quarter

Quarter

Quarter

Fourth Quarter 2012

First Quarter 2012

(in millions, except per share data)

2013

2012

2012

2012

2012

Amount

Percent

Amount

Percent

INTEREST INCOME

Interest and fees on loans

$

390

$

398

$

400

$

408

$

411

$

(8)

(2)%

$

(21)

(5)%

Interest on investment securities

53

55

57

59

63

(2)

(4)

(10)

(16)

Interest on short-term investments

3

3

3

3

3

Total interest income

446

456

460

470

477

(10)

(2)

(31)

(7)

INTEREST EXPENSE

Interest on deposits

15

16

17

18

19

(1)

(7)

(4)

(21)

Interest on medium- and long-term debt

15

16

16

17

16

(1)

(3)

(1)

(6)

Total interest expense

30

32

33

35

35

(2)

(5)

(5)

(14)

Net interest income

416

424

427

435

442

(8)

(2)

(26)

(6)

Provision for credit losses

16

16

22

19

22

(6)

(27)

Net interest income after provision

for credit losses

400

408

405

416

420

(8)

(2)

(20)

(5)

NONINTEREST INCOME

Service charges on deposit accounts

55

52

53

53

56

3

5

(1)

(2)

Fiduciary income

43

42

39

39

38

1

4

5

11

Commercial lending fees

21

25

22

24

25

(4)

(17)

(4)

(14)

Letter of credit fees

16

17

19

18

17

(1)

(7)

(1)

(7)

Card fees

12

12

12

12

11

1

6

Foreign exchange income

9

9

9

10

10

(1)

(4)

Bank-owned life insurance

9

9

10

10

10

(1)

(12)

Brokerage fees

5

5

5

4

5

Net securities gains

1

6

5

(1)

(89)

(5)

(96)

Other noninterest income

30

32

28

35

29

(2)

(1)

1

1

Total noninterest income

200

204

197

211

206

(4)

(2)

(6)

(3)

NONINTEREST EXPENSES

Salaries

188

196

192

189

201

(8)

(4)

(13)

(7)

Employee benefits

63

59

61

61

59

4

7

4

6

Total salaries and employee benefits

251

255

253

250

260

(4)

(1)

(9)

(4)

Net occupancy expense

39

42

40

40

41

(3)

(7)

(2)

(6)

Equipment expense

15

15

17

16

17

(2)

(10)

Outside processing fee expense

28

28

27

26

26

2

7

Software expense

22

23

23

21

23

(1)

(2)

(1)

(3)

Merger and restructuring charges

2

25

8

(2)

N/M

FDIC insurance expense

9

9

9

10

10

(1)

(10)

Advertising expense

6

6

7

7

7

(1)

(15)

Other real estate expense

1

3

2

4

(2)

(58)

(3)

(70)

Other noninterest expenses

45

44

46

55

60

1

(15)

(26)

Total noninterest expenses

416

427

449

433

448

(11)

(3)

(32)

(7)

Income before income taxes

184

185

153

194

178

(1)

(1)

6

3

Provision for income taxes

50

55

36

50

48

(5)

(9)

2

4

NET INCOME

134

130

117

144

130

4

3

4

3

Less income allocated to participating securities

2

2

1

2

1

1

21

Net income attributable to common shares

$

132

$

128

$

116

$

142

$

129

$

4

3%

$

3

2%

Earnings per common share:

Basic

$

0.71

$

0.68

$

0.61

$

0.73

$

0.66

$

0.03

4%

$

0.05

8%

Diluted

0.70

0.68

0.61

0.73

0.66

0.02

3

0.04

6

Comprehensive income (loss)

137

(30)

165

169

160

167

N/M

(23)

(15)

Cash dividends declared on common stock

32

28

29

29

20

4

12

12

61

Cash dividends declared per common share

0.17

0.15

0.15

0.15

0.10

0.02

13

0.07

70

N/M - Not Meaningful

 

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)

Comerica Incorporated and Subsidiaries

2013

2012

(in millions)

1st Qtr

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr

Balance at beginning of period

$

629

$

647

$

667

$

704

$

726

Loan charge-offs:

Commercial

21

42

19

26

25

Real estate construction:

Commercial Real Estate business line (a)

1

2

2

2

Other business lines (b)

1

Total real estate construction

1

2

3

2

Commercial mortgage:

Commercial Real Estate business line (a)

1

5

12

16

13

Other business lines (b)

12

6

13

11

13

Total commercial mortgage

13

11

25

27

26

International

1

2

Residential mortgage

1

2

6

3

2

Consumer

3

4

6

5

5

Total loan charge-offs

38

60

59

64

62

Recoveries on loans previously charged-off:

Commercial

6

13

7

10

9

Real estate construction

1

1

3

1

1

Commercial mortgage

5

6

5

4

3

International

1

1

Residential mortgage

1

1

1

Consumer

1

1

1

4

2

Total recoveries

14

23

16

19

17

Net loan charge-offs

24

37

43

45

45

Provision for loan losses

12

19

23

8

23

Balance at end of period

$

617

$

629

$

647

$

667

$

704

Allowance for loan losses as a percentage of total loans

1.37

%

1.37

%

1.46

%

1.52

%

1.64

%

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

0.21

0.34

0.39

0.42

0.43

(a)

Primarily charge-offs of loans to real estate investors and developers.

(b)

Primarily charge-offs of loans secured by owner-occupied real estate.

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

Comerica Incorporated and Subsidiaries

2013

2012

(in millions)

1st Qtr

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr

Balance at beginning of period

$

32

$

35

$

36

$

25

$

26

Add: Provision for credit losses on lending-related commitments

4

(3)

(1)

11

(1)

Balance at end of period

$

36

$

32

$

35

$

36

$

25

Unfunded lending-related commitments sold

$

2

$

$

$

$

 

NONPERFORMING ASSETS (unaudited)

Comerica Incorporated and Subsidiaries

2013

2012

(in millions)

1st Qtr

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr

SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS

Nonaccrual loans:

Business loans:

Commercial

$

102

$

103

$

154

$

175

$

205

Real estate construction:

Commercial Real Estate business line (a)

30

30

45

60

77

Other business lines (b)

3

3

6

9

8

Total real estate construction

33

33

51

69

85

Commercial mortgage:

Commercial Real Estate business line (a)

86

94

137

155

174

Other business lines (b)

178

181

219

220

275

Total commercial mortgage

264

275

356

375

449

Lease financing

3

3

4

4

International

4

Total nonaccrual business loans

399

414

564

623

747

Retail loans:

Residential mortgage

65

70

69

76

69

Consumer:

Home equity

28

31

28

16

9

Other consumer

2

4

4

4

5

Total consumer

30

35

32

20

14

Total nonaccrual retail loans

95

105

101

96

83

Total nonaccrual loans

494

519

665

719

830

Reduced-rate loans

21

22

27

28

26

Total nonperforming loans (c)

515

541

692

747

856

Foreclosed property

40

54

63

67

67

Total nonperforming assets (c)

$

555

$

595

$

755

$

814

$

923

Nonperforming loans as a percentage of total loans

1.14

%

1.17

%

1.57

%

1.70

%

1.99

%

Nonperforming assets as a percentage of total loans

and foreclosed property

1.23

1.29

1.71

1.85

2.14

Allowance for loan losses as a percentage of total

nonperforming loans

120

116

94

89

82

Loans past due 90 days or more and still accruing

$

25

$

23

$

36

$

43

$

50

ANALYSIS OF NONACCRUAL LOANS

Nonaccrual loans at beginning of period

$

519

$

665

$

719

$

830

$

860

Loans transferred to nonaccrual (d)

34

36

35

47

69

Nonaccrual business loan gross charge-offs (e)

(34)

(54)

(46)

(56)

(55)

Loans transferred to accrual status (d)

(41)

Nonaccrual business loans sold (f)

(7)

(48)

(20)

(16)

(7)

Payments/Other (g)

(18)

(80)

(23)

(45)

(37)

Nonaccrual loans at end of period

$

494

$

519

$

665

$

719

$

830

(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

$

34

$

54

$

46

$

56

$

55

Performing watch list loans

1

Consumer and residential mortgage loans

4

6

12

8

7

Total gross loan charge-offs

$

38

$

60

$

59

$

64

$

62

(f) Analysis of loans sold:

     Nonaccrual business loans

$

7

$

48

$

20

$

16

$

7

     Performing watch list loans

12

24

42

7

11

Total loans sold

$

19

$

72

$

62

$

23

$

18

(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) (unaudited)

Comerica Incorporated and Subsidiaries

Three Months Ended

March 31, 2013

December 31, 2012

March 31, 2012

Average

Average

Average

Average

Average

(dollar amounts in millions)

Balance

Interest

Rate

Balance

Interest

Balance

Interest

Rate

Commercial loans

$

28,056

$

229

3.31

%

$

27,462

$

230

3.33

%

$

24,736

$

219

3.56

%

Real estate construction loans

1,314

13

4.15

1,299

15

4.32

1,453

17

4.58

Commercial mortgage loans

9,398

95

4.08

9,519

100

4.22

10,202

119

4.73

Lease financing

857

7

3.23

839

7

3.27

897

8

3.41

International loans

1,282

11

3.62

1,314

12

3.73

1,205

11

3.76

Residential mortgage loans

1,556

17

4.39

1,525

16

4.24

1,519

18

4.77

Consumer loans

2,154

18

3.36

2,161

19

3.38

2,257

20

3.49

Total loans (a)

44,617

390

3.54

44,119

399

3.60

42,269

412

3.92

Auction-rate securities available-for-sale

176

0.31

216

0.81

352

0.63

Other investment securities available-for-sale

9,845

53

2.21

10,034

55

2.25

9,537

63

2.73

Total investment securities available-for-sale

10,021

53

2.17

10,250

55

2.22

9,889

63

2.65

Interest-bearing deposits with banks (b)

3,852

2

0.27

4,785

2

0.25

3,892

2

0.26

Other short-term investments

117

1

2.30

122

1

1.13

135

1

1.97

Total earning assets

58,607

446

3.09

59,276

457

3.08

56,185

478

3.44

Cash and due from banks

979

1,030

999

Allowance for loan losses

(633)

(654)

(737)

Accrued income and other assets

4,498

4,605

4,898

Total assets

$

63,451

$

64,257

$

61,345

Money market and interest-bearing checking deposits

$

21,294

7

0.14

$

20,760

9

0.16

$

20,795

10

0.19

Savings deposits

1,623

0.03

1,603

0.03

1,543

0.08

Customer certificates of deposit

5,744

7

0.47

5,634

6

0.49

5,978

8

0.57

Foreign office time deposits

525

1

0.55

527

1

0.60

358

1

0.57

Total interest-bearing deposits

29,186

15

0.21

28,524

16

0.22

28,674

19

0.26

Short-term borrowings

123

0.11

70

0.12

78

0.11

Medium- and long-term debt

4,707

15

1.32

4,735

16

1.35

4,940

16

1.34

Total interest-bearing sources

34,016

30

0.36

33,329

32

0.38

33,692

35

0.42

Noninterest-bearing deposits

21,506

22,758

19,637

Accrued expenses and other liabilities

973

1,108

1,077

Total shareholders' equity

6,956

7,062

6,939

Total liabilities and shareholders' equity

$

63,451

$

64,257

$

61,345

Net interest income/rate spread (FTE)

$

416

2.73

$

425

2.70

$

443

3.02

FTE adjustment

$

$

1

$

1

Impact of net noninterest-bearing sources of funds

0.15

0.17

0.17

Net interest margin (as a percentage of average earning assets) (FTE) (a) (b)

2.88

%

2.87

%

3.19

%

(a)

Accretion of the purchase discount on the acquired loan portfolio of $11 million, $13 million and $25 million in the first quarter of 2013 and the fourth and first quarters of 2012, respectively, increased the net interest margin by 8 basis points, 9 basis points and 18 basis points in the first quarter of 2013 and the fourth and first quarters of 2012, respectively.

(b)

Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 17 basis points in the first quarter of 2013 and by 22 basis points and 21 basis points in the fourth and first quarters of 2012, respectively.

 

CONSOLIDATED STATISTICAL DATA (unaudited)

Comerica Incorporated and Subsidiaries

March 31,

December 31,

September 30,

June 30,

March 31,

(in millions, except per share data)

2013

2012

2012

2012

2012

Commercial loans:

Floor plan

$

2,963

$

2,939

$

2,276

$

2,406

$

2,152

Other

25,545

26,574

25,184

24,610

23,488

Total commercial loans

28,508

29,513

27,460

27,016

25,640

Real estate construction loans:

Commercial Real Estate business line (a)

1,185

1,049

1,003

991

1,055

Other business lines (b)

211

191

389

386

387

Total real estate construction loans

1,396

1,240

1,392

1,377

1,442

Commercial mortgage loans:

Commercial Real Estate business line (a)

1,812

1,873

2,020

2,315

2,501

Other business lines (b)

7,505

7,599

7,539

7,515

7,578

Total commercial mortgage loans

9,317

9,472

9,559

9,830

10,079

Lease financing

853

859

837

858

872

International loans

1,269

1,293

1,277

1,224

1,256

Residential mortgage loans

1,568

1,527

1,495

1,469

1,485

Consumer loans:

Home equity

1,498

1,537

1,570

1,584

1,612

Other consumer

658

616

604

634

626

Total consumer loans

2,156

2,153

2,174

2,218

2,238

Total loans

$

45,067

$

46,057

$

44,194

$

43,992

$

43,012

Goodwill

$

635

$

635

$

635

$

635

$

635

Core deposit intangible

19

20

23

25

27

Loan servicing rights

2

2

2

3

3

Tier 1 common capital ratio (c) (d)

10.40

%

10.17

%

10.38

%

10.43

%

10.30

%

Tier 1 risk-based capital ratio (c)

10.40

10.17

10.38

10.43

10.30

Total risk-based capital ratio (c)

13.45

13.18

13.70

13.96

14.03

Leverage ratio (c)

10.76

10.57

10.78

10.97

10.99

Tangible common equity ratio (d)

9.86

9.76

10.30

10.31

10.25

Common shareholders' equity per share of common stock

$

37.38

$

36.87

$

37.01

$

36.18

$

35.44

Tangible common equity per share of common stock (d)

33.87

33.38

33.56

32.76

32.06

Market value per share for the quarter:

High

36.99

32.14

33.38

32.88

34.00

Low

30.73

27.72

29.32

27.88

26.25

Close

35.95

30.34

31.05

30.71

32.36

Quarterly ratios:

Return on average common shareholders' equity

7.68

%

7.36

%

6.67

%

8.22

%

7.50

%

Return on average assets

0.84

0.81

0.75

0.93

0.85

Efficiency ratio (e)

67.58

68.08

71.68

67.53

69.70

Number of banking centers

487

487

490

493

495

Number of employees - full time equivalent

8,932

8,967

9,008

9,014

9,195

(a)

Primarily loans to real estate investors and developers.

(b)

Primarily loans secured by owner-occupied real estate.

(c)

March 31, 2013 ratios are estimated.

(d)

See Reconciliation of Non-GAAP Financial Measures.

(e)

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

 

PARENT COMPANY ONLY BALANCE SHEETS (unaudited)

Comerica Incorporated

March 31,

December 31,

March 31,

(in millions, except share data)

2013

2012

2012

ASSETS

Cash and due from subsidiary bank

$

23

$

2

6

Short-term investments with subsidiary bank

450

431

388

Other short-term investments

91

88

94

Investment in subsidiaries, principally banks

7,054

7,045

7,120

Premises and equipment

4

4

5

Other assets

156

150

183

     Total assets

$

7,778

$

7,720

$

7,796

LIABILITIES AND SHAREHOLDERS' EQUITY

Medium- and long-term debt

$

626

$

629

$

660

Other liabilities

164

149

151

     Total liabilities

790

778

811

Common stock - $5 par value:

     Authorized - 325,000,000 shares

     Issued - 228,164,824 shares

1,141

1,141

1,141

Capital surplus

2,157

2,162

2,154

Accumulated other comprehensive loss

(410)

(413)

(326)

Retained earnings

6,020

5,931

5,630

Less cost of common stock in treasury - 41,361,612 shares at 3/31/13, 39,889,610 shares at 12/31/12 and 31,032,920 shares at 3/31/12

(1,920)

(1,879)

(1,614)

     Total shareholders' equity

6,988

6,942

6,985

     Total liabilities and shareholders' equity

$

7,778

$

7,720

$

7,796

 

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, 2011

197.3

$

1,141

$

2,170

$

(356)

$

5,546

$

(1,633)

$

6,868

Net income

130

130

Other comprehensive income, net of tax

30

30

Cash dividends declared on common stock ($0.10 per share)

(20)

(20)

Purchase of common stock

(1.2)

(36)

(36)

Net issuance of common stock under employee stock plans

1.1

(32)

(26)

58

Share-based compensation

13

13

Other

(0.1)

3

(3)

BALANCE AT MARCH 31, 2012

197.1

$

1,141

$

2,154

$

(326)

$

5,630

$

(1,614)

$

6,985

BALANCE AT DECEMBER 31, 2012

188.3

$

1,141

$

2,162

$

(413)

$

5,931

$

(1,879)

$

6,942

Net income

134

134

Other comprehensive income, net of tax

3

3

Cash dividends declared on common stock ($0.17 per share)

(32)

(32)

Purchase of common stock

(2.2)

(74)

(74)

Net issuance of common stock under employee stock plans

0.7

(15)

(13)

33

5

Share-based compensation

10

10

BALANCE AT MARCH 31, 2013

186.8

$

1,141

$

2,157

$

(410)

$

6,020

$

(1,920)

$

6,988

 

BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)

Comerica Incorporated and Subsidiaries

(dollar amounts in millions)

Business

Retail

Wealth

Three Months Ended March 31, 2013

Bank

Bank

Management

Finance

Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

375

$

155

$

46

$

(167)

$

7

$

416

Provision for credit losses

20

6

(6)

(4)

16

Noninterest income

77

41

65

14

3

200

Noninterest expenses

146

175

79

3

13

416

Provision (benefit) for income taxes (FTE)

88

5

13

(58)

2

50

Net income (loss)

$

198

$

10

$

25

$

(98)

$

(1)

$

134

Net credit-related charge-offs

$

16

$

8

$

$

24

Selected average balances:

Assets

$

35,780

$

5,973

$

4,738

$

11,747

$

5,213

$

63,451

Loans

34,753

5,276

4,588

44,617

Deposits

25,514

21,049

3,682

275

172

50,692

Statistical data:

Return on average assets (a)

2.21

%

0.18

%

2.12

%

N/M

N/M

0.84

%

Efficiency ratio (b)

32.30

89.37

71.09

N/M

N/M

67.58

Business

Retail

Wealth

Three Months Ended December 31, 2012

Bank

Bank

Management

Finance

Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

387

$

156

$

47

$

(176)

$

11

$

425

Provision for credit losses

6

7

2

1

16

Noninterest income

79

43

65

15

2

204

Noninterest expenses

149

181

84

3

10

427

Provision (benefit) for income taxes (FTE)

102

3

10

(64)

5

56

Net income (loss)

$

209

$

8

$

16

$

(100)

$

(3)

$

130

Net credit-related charge-offs

$

26

$

6

$

5

$

37

Selected average balances:

Assets

$

35,359

$

5,952

$

4,686

$

12,137

$

6,123

$

64,257

Loans

34,325

5,255

4,539

44,119

Deposits

26,051

20,910

3,798

310

213

51,282

Statistical data:

Return on average assets (a)

2.37

%

0.15

%

1.35

%

N/M

N/M

0.81

%

Efficiency ratio (b)

31.93

90.36

76.88

N/M

N/M

68.08

Business

Retail

Wealth

Three Months Ended March 31, 2012

Bank

Bank

Management

Finance

Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

373

$

167

$

47

$

(152)

8

$

443

Provision for credit losses

2

6

12

2

22

Noninterest income

81

42

65

13

5

206

Noninterest expenses

158

183

80

3

24

448

Provision (benefit) for income taxes (FTE)

91

7

7

(54)

(2)

49

Net income (loss)

$

203

$

13

$

13

$

(88)

$

(11)

$

130

Net credit-related charge-offs

$

28

$

12

$

5

$

45

Selected average balances:

Assets

$

33,178

$

6,173

$

4,636

$

11,827

$

5,531

$

61,345

Loans

32,238

5,462

4,569

42,269

Deposits

23,997

20,373

3,611

161

169

48,311

Statistical data:

Return on average assets (a)

2.45

%

0.25

%

1.07

%

N/M

N/M

0.85

%

Efficiency ratio (b)

34.86

87.54

75.00

N/M

N/M

69.70

(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 March 31, 2013

Michigan

California

Texas

Markets

& Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

189

$

171

$

135

$

81

$

(160)

$

416

Provision for credit losses

(8)

21

8

(1)

(4)

16

Noninterest income

92

35

31

25

17

200

Noninterest expenses

168

97

91

44

16

416

Provision (benefit) for income taxes (FTE)

44

32

23

7

(56)

50

Net income (loss)

$

77

$

56

$

44

$

56

$

(99)

$

134

Net credit-related charge-offs

$

5

$

10

$

6

$

3

$

$

24

Selected average balances:

Assets

$

14,042

$

13,795

$

10,795

$

7,859

$

16,960

$

63,451

Loans

13,650

13,542

10,071

7,354

44,617

Deposits

20,255

14,356

9,959

5,675

447

50,692

Statistical data:

Return on average assets (a)

1.47

%

1.45

%

1.54

%

2.86

%

N/M

0.84

%

Efficiency ratio (b)

59.53

47.04

54.99

42.11

N/M

67.58

Other

Finance

Three Months Ended December 31, 2012

Michigan

California

Texas

Markets

& Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

192

$

178

$

136

$

84

$

(165)

$

425

Provision for credit losses

(8)

7

4

12

1

16

Noninterest income

97

35

31

24

17

204

Noninterest expenses

180

100

90

44

13

427

Provision (benefit) for income taxes (FTE)

43

44

26

2

(59)

56

Net income (loss)

$

74

$

62

$

47

$

50

$

(103)

$

130

Net credit-related charge-offs

$

1

$

12

$

5

$

19

$

$

37

Selected average balances:

Assets

$

13,782

$

13,549

$

10,554

$

8,112

$

18,260

$

64,257

Loans

13,415

13,275

9,818

7,611

44,119

Deposits

20,019

15,457

9,809

5,474

523

51,282

Statistical data:

Return on average assets (a)

1.42

%

1.50

%

1.71

%

2.48

%

N/M

0.81

%

Efficiency ratio (b)

62.16

47.04

53.87

41.35

N/M

68.08

Other

Finance

Three Months Ended March 31, 2012

Michigan

California

Texas

Markets

& Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

196

$

165

$

150

$

76

$

(144)

$

443

Provision for credit losses

(3)

(3)

25

1

2

22

Noninterest income

98

33

31

26

18

206

Noninterest expenses

179

99

93

50

27

448

Provision (benefit) for income taxes (FTE)

40

38

22

5

(56)

49

Net income (loss)

$

78

$

64

$

41

$

46

$

(99)

$

130

Net credit-related charge-offs

$

18

$

11

$

7

$

9

$

$

45

Selected average balances:

Assets

$

14,092

$

12,310

$

10,080

$

7,505

$

17,358

$

61,345

Loans

13,829

12,096

9,295

7,049

42,269

Deposits

19,415

13,688

10,229

4,649

330

48,311

Statistical data:

Return on average assets (a)

1.53

%

1.74

%

1.43

%

2.43

%

N/M

0.85

%

Efficiency ratio (b)

60.88

50.50

51.10

51.93

N/M

69.70

(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

March 31,

December 31,

September 30,

June 30,

March 31,

(dollar amounts in millions)

2013

2012

2012

2012

2012

Tier 1 Common Capital Ratio:

Tier 1 capital (a) (b)

$

6,748

$

6,705

$

6,685

$

6,676

$

6,647

Less:

Trust preferred securities

Tier 1 common capital (b)

$

6,748

$

6,705

$

6,685

$

6,676

$

6,647

Risk-weighted assets (a) (b)

$

64,895

$

65,954

$

64,432

$

64,028

$

64,526

Tier 1 risk-based capital ratio (b)

10.40

%

10.17

%

10.38

%

10.43

%

10.30

%

Tier 1 common capital ratio (b)

10.40

10.17

10.38

10.43

10.30

Basel III Tier 1 Common Capital Ratio:

Tier 1 capital (b)

$

6,748

Basel III proposed adjustments (c)

(410)

Basel III Tier 1 common capital (c)

$

6,338

Risk-weighted assets (a) (b)

$

64,895

Basel III proposed adjustments (c)

2,609

Basel III risk-weighted assets (c)

$

67,504

Tier 1 common capital ratio (b)

10.4

%

Basel III Tier 1 common capital ratio (c)

9.4

Tangible Common Equity Ratio:

Common shareholders' equity

$

6,988

$

6,942

$

7,084

$

7,028

$

6,985

Less:

Goodwill

635

635

635

635

635

Other intangible assets

21

22

25

28

30

Tangible common equity

$

6,332

$

6,285

$

6,424

$

6,365

$

6,320

Total assets

$

64,885

$

65,069

$

63,000

$

62,380

$

62,325

Less:

Goodwill

635

635

635

635

635

Other intangible assets

21

22

25

28

30

Tangible assets

$

64,229

$

64,412

$

62,340

$

61,717

$

61,660

Common equity ratio

10.77

%

10.67

%

11.24

%

11.27

%

11.21

%

Tangible common equity ratio

9.86

9.76

10.30

10.31

10.25

Tangible Common Equity per Share of Common Stock:

Common shareholders' equity

$

6,988

$

6,942

$

7,084

$

7,028

$

6,985

Tangible common equity

6,332

6,285

6,424

6,365

6,320

Shares of common stock outstanding (in millions)

187

188

191

194

197

Common shareholders' equity per share of common stock

$

37.38

$

36.87

$

37.01

$

36.18

$

35.44

Tangible common equity per share of common stock

33.87

33.38

33.56

32.76

32.06

(a) Tier 1 capital and risk-weighted assets as defined by regulation.

(b) March 31, 2013 Tier 1 capital and risk-weighted assets are estimated.

(c) March 31, 2013 Basel III Tier 1 capital and risk-weighted assets are estimated based on the proposed rules for the U.S. adoption of the Basel III regulatory capital framework issued in June 2012.

 

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 Basel III Tier 1 common capital ratio further adjusts Tier 1 common capital and risk-weighted assets to account for the proposed changes issued in the U.S. banking regulators proposed rules for the U.S. adoption of the Basel III regulatory capital framework issued in June 2012. 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