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

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







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