Comerica Reports Second Quarter 2012 Net Income Of $144 Million

Earnings Per Share 73 Cents, Up 11 Percent from First Quarter 2012

Average Total Loan Growth Continues - Driven by a $1.2 Billion, 5 Percent Increase in Commercial Loans

Strong Capital Supports Shareholder Return of 81 Percent of Second Quarter 2012 Net Income

Jul 17, 2012, 06:40 ET from Comerica Incorporated

DALLAS, July 17, 2012 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported second quarter 2012 net income of $144 million, an increase of $14 million compared to $130 million for the first quarter 2012. Earnings per fully diluted share of 73 cents increased 7 cents, or 11 percent, compared to 66 cents for the first quarter 2012.

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(dollar amounts in millions, except per share data)

2nd Qtr '12

1st Qtr '12

2nd Qtr '11

Net interest income

$

435

$

443

$

391

Provision for credit losses

19

22

45

Noninterest income

211

206

202

Noninterest expenses

433

(a)

449

411

(a)

Provision for income taxes

50

48

41

Net income

144

130

96

Net income attributable to common shares

142

129

95

Diluted income per common share

0.73

0.66

0.53

Average diluted shares (in millions)

194

196

178

Tier 1 common capital ratio (c)

10.32

%

(b)

10.27

%

10.53

%

Tangible common equity ratio (c)

10.27

10.21

10.90

(a)

Included restructuring expenses of $8 million ($5 million, after tax) and $5 million ($3 million, after tax) in the second quarter 2012 and 2011, respectively, associated with the acquisition of Sterling Bancshares, Inc. on July 28, 2011.

(b)

June 30, 2012 ratio is estimated.

(c)

See Reconciliation of Non-GAAP Financial Measures.

"Our second quarter results reflect our focus on the bottom line in this slow growing national economy," said Ralph W. Babb Jr., chairman and chief executive officer. "Loans continued to grow, with average loans up $959 million, or 2 percent, compared to the first quarter, primarily reflecting an increase of $1.2 billion, or 5 percent, in commercial loans. This was the eighth consecutive quarter of average commercial loan growth, resulting in a 20 percent year-over-year increase, including our acquisition of Sterling Bancshares last July. The increase in average commercial loans in the second quarter was broad-based, primarily driven by increases in National Dealer Services, Global Corporate Banking, Middle Market Banking and Energy. As expected, this was partially offset by the continued decline in commercial real estate loans.

"Deposits continued to grow, credit quality remained solid, and we maintained our tight control of expenses.

"Our capital position remains a source of strength to support our future growth. We repurchased 2.9 million shares under our share repurchase program in the second quarter of 2012. In April, our Board of Directors increased the quarterly cash dividend 50 percent, to 15 cents per share. The combined share buyback and dividend returned 81 percent of second quarter net income to shareholders. We also have carefully reviewed the Basel III regulatory capital framework and believe that, on a fully phased-in pro forma basis, we are well above the proposed capital levels.

"Our consistent, conservative, relationship-focused approach to banking is making a positive difference for us and our customers."

Second Quarter 2012 Highlights Compared to First Quarter 2012

  • Net income of $144 million, or 73 cents per fully diluted share, increased 11 percent compared to first quarter 2012.
  • Average total loans increased $959 million, or 2 percent, primarily reflecting an increase of $1.2 billion, or 5 percent, in commercial loans, partially offset by a decrease of $252 million, or 2 percent, in commercial real estate loans (commercial mortgage and real estate construction loans). The increase in commercial loans was broad-based, primarily driven by increases in National Dealer Services, Global Corporate Banking, Middle Market Banking and Energy.
  • Period-end total loans increased $980 million, or 2 percent, from March 31, 2012 to June 30, 2012, primarily reflecting an increase of $1.4 billion, or 5 percent, in commercial loans, partially offset by a $314 million, or 3 percent, decrease in commercial real estate loans. The increase in period-end commercial loans was primarily driven by increases in Mortgage Banker Finance, National Dealer Services, Global Corporate Banking, Technology and Life Sciences, and Energy.
  • Average total deposits increased $368 million, or 1 percent, primarily reflecting an increase of $491 million, or 2 percent, in noninterest-bearing deposits.
  • Strong credit quality continued in the second quarter 2012. Nonaccrual loans decreased $111 million, to $719 million at June 30, 2012. Net credit-related charge-offs were stable at $45 million, or 0.42 percent of average loans, in the second quarter 2012. The provision for credit losses was $19 million in the second quarter 2012, compared to $22 million in the first quarter 2012.
  • Noninterest income increased to $211 million in the second quarter 2012, compared to $206 million for the first quarter 2012. The $5 million increase was primarily due to a $5 million annual incentive bonus received in the second quarter 2012 from Comerica's third-party credit card provider.
  • Noninterest expenses decreased $16 million to $433 million in the second quarter 2012, compared to the first quarter 2012. The decrease primarily reflected a $12 million decrease in salaries expense and smaller decreases in several other categories of noninterest expenses, partially offset by a $8 million increase in merger and restructuring charges related to the Sterling acquisition.
  • Comerica repurchased 2.9 million shares of common stock under the share repurchase program and increased the quarterly dividend by 50 percent, to $0.15 per share, in the second quarter 2012.

Net Interest Income

(dollar amounts in millions)

2nd Qtr '12

1st Qtr '12

2nd Qtr '11

Net interest income

$

435

$

443

$

391

Net interest margin

3.10

%

3.19

%

3.14

%

Selected average balances:

Total earning assets

$

56,653

$

56,186

$

50,136

Total investment securities

9,728

9,889

7,407

Total loans

43,228

42,269

39,174

Total deposits

48,679

48,311

41,480

Total noninterest-bearing deposits

20,128

19,637

15,786

  • Net interest income of $435 million in the second quarter 2012 decreased $8 million compared to the first quarter 2012.
    • Interest earned on loans decreased $3 million in the second quarter 2012. The benefit from an increase in average loans ($8 million) was offset by a decrease in the accretion of the purchase discount on the acquired Sterling loan portfolio ($7 million) and lower loan yields ($4 million). The lower loan yields reflected a shift in the average loan portfolio mix, largely due to the decrease in average commercial real estate loans and the increase in lower yielding, higher credit quality commercial loans. Accretion of the purchase discount on the acquired Sterling loan portfolio was $18 million in the second quarter 2012, compared to $25 million in the first quarter 2012. For the remainder of 2012, $20 million to $25 million of accretion is expected to be recognized.
    • Interest earned on investment securities available-for-sale decreased $5 million, primarily as a result of accelerated premium amortization ($3 million), as well as lower reinvestment yields and a decrease in mortgage-backed investment securities ($2 million).
  • Average earning assets increased $467 million in the second quarter 2012, compared to the first quarter 2012, primarily reflecting increases of $959 million in average loans, partially offset by decreases of $336 million in average Federal Reserve Bank deposits and $161 million in average investment securities available-for-sale.
  • Average deposits increased $368 million in the second quarter 2012, compared to the first quarter 2012, primarily due to a $491 million increase in average noninterest-bearing deposits, partially offset by a decrease in money market and interest-bearing checking accounts.

Noninterest Income

Noninterest income increased $5 million, to $211 million for the second quarter 2012. The increase primarily resulted from a $5 million annual incentive bonus received in the second quarter 2012 from Comerica's third party credit card provider, a $3 million increase in customer-driven fee income and a $3 million increase in net income from principal investing and warrants. Customer-driven fee income increased in the second quarter 2012, primarily due to a $5 million increase in customer derivative income, partially offset by a $3 million decrease in service charges on deposit accounts. Deferred compensation asset returns decreased $7 million in the second quarter 2012, compared to the first quarter 2012. The decrease in deferred compensation asset returns in noninterest income is offset by a decrease in deferred compensation plan expense in noninterest expenses.

Noninterest Expenses

Noninterest expenses totaled $433 million in the second quarter 2012, a decrease of $16 million compared to $449 million in the first quarter 2012. The decrease in noninterest expenses was primarily due to a decrease in salaries expense of $12 million, a $4 million decrease in other real estate expense, a $3 million decrease in litigation-related expense and smaller decreases in several other categories of noninterest expenses, partially offset by an increase in merger and restructuring charges of $8 million. The decrease in salaries expense primarily resulted from a $7 million decrease in deferred compensation plan expense and $5 million of stock grants expensed in the first quarter 2012. Restructuring charges of approximately $25 million to $30 million are expected to be incurred for the remainder of 2012.

Credit Quality

(dollar amounts in millions)

2nd Qtr '12

1st Qtr '12

2nd Qtr '11

Net credit-related charge-offs

$

45

$

45

$

90

Net credit-related charge-offs/Average total loans

0.42

%

0.43

%

0.92

%

Provision for loan losses

$

8

$

23

$

47

Provision for credit losses on lending-related commitments

11

(1)

(2)

Total provision for credit losses

19

22

45

Nonperforming loans (a)

747

856

974

Nonperforming assets (NPAs) (a)

814

923

1,044

NPAs/Total loans and foreclosed property

1.85

%

2.14

%

2.66

%

Loans past due 90 days or more and still accruing

$

43

$

50

$

64

Allowance for loan losses

667

704

806

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

36

25

30

Total allowance for credit losses

703

729

836

Allowance for loan losses/Total loans (c)

1.52

%

1.64

%

2.06

%

Allowance for loan losses/Nonperforming loans

89

82

83

(a)

Excludes loans acquired with credit impairment.

(b)

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

(c)

Reflects the impact of acquired loans, which were initially recorded at fair value, with no related allowance for loan losses.

"Credit quality continued to be strong," said Babb. "Net credit-related charge-offs were stable at $45 million, or 42 basis points of total loans. The provision for credit losses decreased $3 million to $19 million. We believe we will continue to see the provision and net charge-offs at or near these levels for the remainder of the year."

  • Net credit-related charge-offs remained stable at $45 million in both the second and first quarter of 2012.
  • The provision for credit losses was $19 million in the second quarter 2012, compared to $22 million in the first quarter 2012.
  • Internal watch list loans continued the downward trend, declining $371 million in the second quarter 2012, to $3.8 billion at June 30, 2012. Nonperforming assets decreased $109 million to $814 million at June 30, 2012.
  • During the second quarter 2012, $47 million of borrower relationships over $2 million were transferred to nonaccrual status, a decrease of $22 million from the first quarter 2012.
  • The allowance for loan losses to total loans ratio was 1.52 percent and 1.64 percent at June 30, 2012 and March 31, 2012, respectively.

Balance Sheet and Capital Management

Total assets and common shareholders' equity were $62.7 billion and $7.0 billion, respectively, at June 30, 2012, compared to $62.6 billion and 7.0 billion, respectively, at March 31, 2012. There were approximately 194 million common shares outstanding at June 30, 2012. Comerica repurchased $88 million of common stock (2.9 million shares) under the share repurchase program during the second quarter 2012. Combined with the increased dividend of $0.15 per share in the second quarter, share repurchases and dividends returned 81 percent of second quarter 2012 net income to shareholders.

In the second quarter 2012, U.S. banking regulators issued proposed rules for the U.S. adoption of the Basel III regulatory capital framework. The proposals narrow the definition of capital, increase the minimum levels of required capital, introduce capital buffers and increase the risk weights for various asset classes. On a fully-phased-in pro forma basis, Comerica is currently estimated to be well above the proposed capital levels.

Comerica's tangible common equity ratio was 10.27% at June 30, 2012, an increase of 6 basis points from March 31, 2012. The estimated Tier 1 common capital ratio increased 5 basis points, to 10.32% at June 30, 2012, from March 31, 2012.

Full-Year 2012 Outlook Compared to Full-Year 2011

For 2012, management expects the following, assuming a continuation of the current economic environment:

  • Average loans increasing 5 percent to 6 percent.
  • Net interest income increasing 3 percent to 5 percent.
  • Net credit-related charge-offs and provision for credit losses declining.
  • Noninterest income increasing 1 percent to 2 percent.
  • Noninterest expenses increasing or decreasing 1 percent.
  • Effective tax rate of approximately 26 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 June 30, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses second quarter 2012 results compared to first quarter 2012.

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

(dollar amounts in millions)

2nd Qtr '12

1st Qtr '12

2nd Qtr '11

Business Bank

$

210

84

%

$

206

89

%

$

176

95

%

Retail Bank

19

8

14

6

(3)

(2)

Wealth Management

20

8

11

5

12

7

249

100

%

231

100

%

185

100

%

Finance

(95)

(92)

(86)

Other (a)

(10)

(9)

(3)

Total

$

144

$

130

$

96

(a)

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

Business Bank

(dollar amounts in millions)

2nd Qtr '12

1st Qtr '12

2nd Qtr '11

Net interest income (FTE)

$

385

$

379

$

342

Provision for credit losses

12

2

2

Noninterest income

83

81

79

Noninterest expenses

151

158

162

Net income

210

206

176

Net credit-related charge-offs

26

28

54

Selected average balances:

Assets

34,376

33,184

29,893

Loans

33,449

32,238

29,427

Deposits

24,145

23,997

20,396

  • Average loans increased $1.2 billion, primarily due to increases in National Dealer Services, Global Corporate Banking, Middle Market and Energy.
  • Average deposits increased $148 million, primarily due to increases in Technology and Life Sciences and the Financial Services Division, partially offset by declines in Global Corporate Banking and Middle Market.
  • Net interest income increased $6 million, primarily due to higher average loan balances, partially offset by a decrease in accretion on the acquired Sterling loan portfolio.
  • The provision for credit losses increased $10 million, primarily reflecting increases in Technology and Life Sciences and Middle Market, partially offset by a decrease in National Dealer Services.
  • Noninterest expenses decreased $7 million, primarily due to a decrease in net allocated corporate overhead expenses. The decrease in net allocated corporate overhead expense primarily reflected decreases in salaries and incentive expense in overhead departments and smaller decreases in several other categories of overhead expense.

Retail Bank

(dollar amounts in millions)

2nd Qtr '12

1st Qtr '12

2nd Qtr '11

Net interest income (FTE)

$

161

$

167

$

141

Provision for credit losses

3

4

24

Noninterest income

47

42

46

Noninterest expenses

177

184

162

Net income (loss)

19

14

(3)

Net credit-related charge-offs

9

12

22

Selected average balances:

Assets

5,946

6,173

5,454

Loans

5,250

5,462

4,999

Deposits

20,525

20,373

17,737

  • Average loans declined $212 million, primarily due to a decrease in Small Business Banking.|
  • Average deposits increased $152 million, primarily due to an increase in Personal Banking.
  • Net interest income decreased $6 million, primarily due to a decrease in accretion on the acquired Sterling loan portfolio, a decrease in average loan balances and lower loan yields.
  • Noninterest income increased $5 million, primarily due to a $5 million annual incentive bonus received in the second quarter 2012 from Comerica's third-party credit card provider.
  • Noninterest expenses decreased $7 million, primarily due to a decrease in net allocated corporate overhead expenses, for the reasons previously described in the Business Bank section.

Wealth Management

(dollar amounts in millions)

2nd Qtr '12

1st Qtr '12

2nd Qtr '11

Net interest income (FTE)

$

46

$

47

$

48

Provision for credit losses

2

15

14

Noninterest income

66

65

63

Noninterest expenses

79

80

76

Net income

20

11

12

Net credit-related charge-offs

10

5

14

Selected average balances:

Assets

4,604

4,636

4,728

Loans

4,529

4,569

4,748

Deposits

3,640

3,611

2,978

  • Average loans decreased $40 million due to a decrease in Private Banking. |
  • Average deposits increased $29 million, primarily due to an increase in Private Banking, partially offset by a decrease in Trust.
  • The provision for credit losses decreased $13 million, primarily due to a decrease in Private Banking in the Midwest market.

Geographic Market Segments

Comerica also provides market segment results for four primary geographic markets: Midwest, Western, Texas and Florida. In addition to the four primary geographic markets, Other Markets and International are also reported as market segments. The financial results below are based on methodologies in effect at June 30, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses second quarter 2012 results compared to first quarter 2012.

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

(dollar amounts in millions)

2nd Qtr '12

1st Qtr '12

2nd Qtr '11

Midwest

$

75

31

%

$

68

30

%

$

62

34

%

Western

69

27

65

28

50

27

Texas

51

20

49

21

33

18

Florida

(5)

(2)

(1)

(5)

(3)

Other Markets

47

19

38

16

30

16

International

12

5

12

5

15

8

249

100

%

231

100

%

185

100

%

Finance & Other (a)

(105)

(101)

(89)

Total

$

144

$

130

$

96

(a)

Includes items not directly associated with the geographic markets.

Midwest Market

(dollar amounts in millions)

2nd Qtr '12

1st Qtr '12

2nd Qtr '11

Net interest income (FTE)

$

196

$

198

$

204

Provision for credit losses

1

11

15

Noninterest income

96

98

100

Noninterest expenses

177

182

183

Net income

75

68

62

Net credit-related charge-offs

10

18

37

Selected average balances:

Assets

14,028

14,095

14,262

Loans

13,766

13,825

14,050

Deposits

19,227

19,415

18,318

  • Average loans decreased $59 million, primarily due to decreases in Small Business Banking, Personal Banking and Middle Market, partially offset by increases in Global Corporate Banking and National Dealer Services.
  • Average deposits decreased $188 million, primarily due to decreases in Global Corporate Banking and the Financial Services Division, partially offset by increases in Personal Banking and Middle Market.
  • The provision for credit losses decreased $10 million, primarily reflecting a decrease in Private Banking.
  • Noninterest expenses decreased $5 million primarily due to lower net allocated corporate overhead expenses, for the reasons previously described in the Business Bank section.

Western Market

(dollar amounts in millions)

2nd Qtr '12

1st Qtr '12

2nd Qtr '11

Net interest income (FTE)

$

177

$

171

$

166

Provision for credit losses

1

(7)

16

Noninterest income

37

33

37

Noninterest expenses

104

107

112

Net income

69

65

50

Net credit-related charge-offs

12

11

26

Selected average balances:

Assets

13,170

12,623

12,329

Loans

12,920

12,383

12,121

Deposits

14,371

13,897

12,458

  • Average loans increased $537 million, primarily due to increases in National Dealer Services and Middle Market.
  • Average deposits increased $474 million, primarily due to increases in Technology and Life Sciences and the Financial Services Division, partially offset by a decrease in Middle Market.
  • Net interest income increased $6 million, primarily due to an increase in average loan balances.
  • The provision for credit losses increased $8 million, primarily reflecting increases in Middle Market and Technology and Life Sciences, partially offset by a decrease in Small Business Banking.
  • Noninterest income increased $4 million, primarily due to an increase in warrant income.
  • Noninterest expenses decreased $3 million, primarily due to a decrease in net allocated corporate overhead expenses, for the reasons previously described in the Business Bank section.

Texas Market

(dollar amounts in millions)

2nd Qtr '12

1st Qtr '12

2nd Qtr '11

Net interest income (FTE)

$

143

$

151

$

89

Provision for credit losses

7

14

(2)

Noninterest income

31

31

25

Noninterest expenses

88

92

63

Net income

51

49

33

Net credit-related charge-offs

4

7

3

Selected average balances:

Assets

10,270

10,082

7,082

Loans

9,506

9,295

6,872

Deposits

10,185

10,229

6,176

  • Average loans increased $211 million, primarily due to increases in Energy and Middle Market, partially offset by a decrease in Small Business Banking.
  • Average deposits decreased $44 million, primarily reflecting a decrease in Small Business Banking and Energy, partially offset by an increase in Global Corporate Banking.
  • Net interest income decreased $8 million, primarily due to a decrease in accretion on the acquired Sterling loan portfolio and lower loan yields, partially offset by an increase in average loan balances.
  • The provision for credit losses decreased $7 million, primarily due to decreases in Commercial Real Estate and Small Business Banking.
  • Noninterest expense decreased $4 million, primarily due to a decrease in net allocated corporate overhead expenses, for the reasons previously described in the Business Bank section.

Florida Market

(dollar amounts in millions)

2nd Qtr '12

1st Qtr '12

2nd Qtr '11

Net interest income (FTE)

$

11

$

10

$

12

Provision for credit losses

11

6

12

Noninterest income

4

4

4

Noninterest expenses

11

9

11

Net income

(5)

(1)

(5)

Net credit-related charge-offs

10

2

15

Selected average balances:

Assets

1,407

1,416

1,534

Loans

1,429

1,418

1,565

Deposits

446

424

396

  • Average loans increased $11 million, primarily due to increases in National Dealer Services and Middle Market, partially offset by decreases in Commercial Real Estate and Private Banking.
  • Average deposits increased $22 million, primarily due to increases in Private Banking and the Financial Services Division.
  • The provision for credit losses increased $5 million, primarily due to an increase in Middle Market.

Conference Call and Webcast

Comerica will host a conference call to review second quarter 2012 financial results at 7 a.m. CT Tuesday, July 17, 2012. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 90096639). 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 July 31, 2012. The conference call replay can be accessed by calling (855) 859-2056 or (404) 537-3406 (event ID No. 90096639). 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; the acquisition of Sterling Bancshares, Inc., or any future acquisitions; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers; the implementation of Comerica's strategies and business models, including the implementation of revenue enhancements and efficiency improvements; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties, 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; the effectiveness of methods of reducing risk exposures; the effects of terrorist activities and other hostilities; the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; changes in accounting standards and the critical nature of Comerica's accounting policies. Comerica cautions that the foregoing list of factors is not exclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to "Item 1A. Risk Factors" beginning on page 12 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2011. Forward-looking statements speak only as of the date they are made. Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this news release or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)

Comerica Incorporated and Subsidiaries

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

(in millions, except per share data)

2012

2012

2011

2012

2011

PER COMMON SHARE AND COMMON STOCK DATA

Diluted net income

$

0.73

$

0.66

$

0.53

$

1.39

$

1.10

Cash dividends declared

0.15

0.10

0.10

0.25

0.20

Common shareholders' equity (at period end)

36.18

35.44

34.15

Tangible common equity (at period end) (a)

32.76

32.06

33.28

Average diluted shares (in thousands)

194,487

196,021

177,602

195,254

178,011

KEY RATIOS

Return on average common shareholders' equity

8.22

%

7.50

%

6.41

%

7.86

%

6.74

%

Return on average assets

0.93

0.84

0.70

0.89

0.73

Tier 1 common capital ratio (a) (b)

10.32

10.27

10.53

Tier 1 risk-based capital ratio (b)

10.32

10.27

10.53

Total risk-based capital ratio (b)

13.82

13.99

14.80

Leverage ratio (b)

10.92

10.94

11.40

Tangible common equity ratio (a)

10.27

10.21

10.90

AVERAGE BALANCES

Commercial loans

$

25,983

$

24,736

$

21,677

$

25,359

$

21,586

Real estate construction loans:

Commercial Real Estate business line (c)

1,035

1,056

1,486

1,046

1,619

Other business lines (d)

385

397

395

391

410

Total real estate construction loans

1,420

1,453

1,881

1,437

2,029

Commercial mortgage loans:

Commercial Real Estate business line (c)

2,443

2,520

1,912

2,482

1,945

Other business lines (d)

7,540

7,682

7,724

7,611

7,768

Total commercial mortgage loans

9,983

10,202

9,636

10,093

9,713

Lease financing

869

897

958

883

972

International loans

1,265

1,205

1,254

1,235

1,237

Residential mortgage loans

1,487

1,519

1,525

1,503

1,562

Consumer loans

2,221

2,257

2,243

2,239

2,262

Total loans

43,228

42,269

39,174

42,749

39,361

Earning assets

56,653

56,186

50,136

56,419

49,473

Total assets

61,950

61,613

54,517

61,782

54,148

Noninterest-bearing deposits

20,128

19,637

15,786

19,882

15,623

Interest-bearing deposits

28,551

28,674

25,694

28,613

25,418

Total deposits

48,679

48,311

41,480

48,495

41,041

Common shareholders' equity

7,002

6,939

5,972

6,971

5,904

NET INTEREST INCOME

Net interest income (fully taxable equivalent basis)

$

435

$

444

$

392

$

879

$

788

Fully taxable equivalent adjustment

1

1

1

2

Net interest margin (fully taxable equivalent basis)

3.10

%

3.19

%

3.14

%

3.14

%

3.19

%

CREDIT QUALITY

Nonaccrual loans

$

719

$

830

$

941

Reduced-rate loans

28

26

33

Total nonperforming loans (e)

747

856

974

Foreclosed property

67

67

70

Total nonperforming assets (e)

814

923

1,044

Loans past due 90 days or more and still accruing

43

50

64

Gross loan charge-offs

64

62

125

$

126

$

248

Loan recoveries

19

17

35

36

57

Net loan charge-offs

45

45

90

90

191

Allowance for loan losses

667

704

806

Allowance for credit losses on lending-related commitments

36

25

30

Total allowance for credit losses

703

729

836

Allowance for loan losses as a percentage of total loans (f)

1.52

%

1.64

%

2.06

%

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

0.42

0.43

0.92

0.42

%

0.97

%

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

1.85

2.14

2.66

Allowance for loan losses as a percentage of total nonperforming loans

89

82

83

(a)

See Reconciliation of Non-GAAP Financial Measures.

(b)

June 30, 2012 ratios are estimated.

(c)

Primarily loans to real estate investors and developers.

(d)

Primarily loans secured by owner-occupied real estate.

(e)

Excludes loans acquired with credit-impairment.

(f)

Reflects the impact of acquired loans, which were initially recorded at fair value with no related allowance for loan losses.

(g)

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

CONSOLIDATED BALANCE SHEETS

Comerica Incorporated and Subsidiaries

June 30,

March 31,

December 31,

June 30,

(in millions, except share data)

2012

2012

2011

2011

(unaudited)

(unaudited)

(unaudited)

ASSETS

Cash and due from banks

$

1,076

$

984

$

982

$

987

Interest-bearing deposits with banks

3,065

2,976

2,574

2,479

Other short-term investments

170

180

149

124

Investment securities available-for-sale

9,940

10,061

10,104

7,537

Commercial loans

27,016

25,640

24,996

22,052

Real estate construction loans

1,377

1,442

1,533

1,728

Commercial mortgage loans

9,830

10,079

10,264

9,579

Lease financing

858

872

905

949

International loans

1,224

1,256

1,170

1,162

Residential mortgage loans

1,469

1,485

1,526

1,491

Consumer loans

2,218

2,238

2,285

2,232

Total loans

43,992

43,012

42,679

39,193

Less allowance for loan losses

(667)

(704)

(726)

(806)

Net loans

43,325

42,308

41,953

38,387

Premises and equipment

667

670

675

641

Accrued income and other assets

4,407

5,414

4,571

3,986

Total assets

$

62,650

$

62,593

$

61,008

$

54,141

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits

$

21,330

$

20,741

$

19,764

$

16,344

Money market and interest-bearing checking deposits

20,008

20,502

20,311

18,033

Savings deposits

1,629

1,586

1,524

1,462

Customer certificates of deposit

6,045

6,145

5,808

5,551

Foreign office time deposits

376

332

348

368

Total interest-bearing deposits

28,058

28,565

27,991

25,414

Total deposits

49,388

49,306

47,755

41,758

Short-term borrowings

83

82

70

67

Accrued expenses and other liabilities

1,409

1,301

1,371

1,072

Medium- and long-term debt

4,742

4,919

4,944

5,206

Total liabilities

55,622

55,608

54,140

48,103

Common stock - $5 par value:

Authorized - 325,000,000 shares

Issued - 228,164,824 shares at 6/30/12, 3/31/12 and 12/31/11

and 203,878,110 shares at 6/30/11

1,141

1,141

1,141

1,019

Capital surplus

2,144

2,154

2,170

1,472

Accumulated other comprehensive loss

(301)

(326)

(356)

(308)

Retained earnings

5,744

5,630

5,546

5,395

Less cost of common stock in treasury - 33,889,392 shares at 6/30/12, 31,032,920 shares

at 3/31/12, 30,831,076 shares at 12/31/11 and 27,092,427 shares at 6/30/11

(1,700)

(1,614)

(1,633)

(1,540)

Total shareholders' equity

7,028

6,985

6,868

6,038

Total liabilities and shareholders' equity

$

62,650

$

62,593

$

61,008

$

54,141

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions, except per share data)

2012

2011

2012

2011

INTEREST INCOME

Interest and fees on loans

$

408

$

369

$

819

$

744

Interest on investment securities

59

59

123

116

Interest on short-term investments

3

3

6

5

Total interest income

470

431

948

865

INTEREST EXPENSE

Interest on deposits

18

23

37

45

Interest on medium- and long-term debt

17

17

33

34

Total interest expense

35

40

70

79

Net interest income

435

391

878

786

Provision for credit losses

19

45

41

91

Net interest income after provision for credit losses

416

346

837

695

NONINTEREST INCOME

Service charges on deposit accounts

53

51

109

103

Fiduciary income

39

39

77

78

Commercial lending fees

24

21

49

42

Letter of credit fees

18

18

35

36

Card fees

12

15

23

30

Foreign exchange income

10

10

19

19

Bank-owned life insurance

10

9

20

17

Brokerage fees

5

6

11

12

Net securities gains

6

4

11

6

Other noninterest income

34

29

63

66

Total noninterest income

211

202

417

409

NONINTEREST EXPENSES

Salaries

189

185

390

373

Employee benefits

61

50

121

100

Total salaries and employee benefits

250

235

511

473

Net occupancy expense

40

38

81

78

Equipment expense

16

17

33

32

Outside processing fee expense

26

25

52

49

Software expense

21

20

44

43

Merger and restructuring charges

8

5

8

5

FDIC insurance expense

10

12

20

27

Advertising expense

7

7

14

14

Other real estate expense

6

4

14

Other noninterest expenses

55

46

115

94

Total noninterest expenses

433

411

882

829

Income before income taxes

194

137

372

275

Provision for income taxes

50

41

98

76

NET INCOME

144

96

274

199

Less income allocated to participating securities

2

1

3

2

Net income attributable to common shares

$

142

$

95

$

271

$

197

Earnings per common share:

Basic

$

0.73

$

0.54

$

1.39

$

1.12

Diluted

0.73

0.53

1.39

1.10

Comprehensive income

169

170

329

280

Cash dividends declared on common stock

29

18

49

35

Cash dividends declared per common share

0.15

0.10

0.25

0.20

CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries

Second

First

Fourth

Third

Second

Second Quarter 2012 Compared To:

Quarter

Quarter

Quarter

Quarter

Quarter

First Quarter 2012

Second Quarter 2011

(in millions, except per share data)

2012

2012

2011

2011

2011

Amount

Percent

Amount

Percent

INTEREST INCOME

Interest and fees on loans

$

408

$

411

$

415

$

405

$

369

$

(3)

(1)

%

$

39

10

%

Interest on investment securities

59

64

63

54

59

(5)

(7)

1

Interest on short-term investments

3

3

3

4

3

(11)

10

Total interest income

470

478

481

463

431

(8)

(2)

39

9

INTEREST EXPENSE

Interest on deposits

18

19

21

24

23

(1)

(5)

(5)

(21)

Interest on medium- and long-term debt

17

16

16

16

17

1

3

(3)

Total interest expense

35

35

37

40

40

(1)

(5)

(13)

Net interest income

435

443

444

423

391

(8)

(2)

44

11

Provision for credit losses

19

22

18

35

45

(3)

(11)

(26)

(57)

Net interest income after provision

for credit losses

416

421

426

388

346

(5)

(2)

70

20

NONINTEREST INCOME

Service charges on deposit accounts

53

56

52

53

51

(3)

(3)

2

6

Fiduciary income

39

38

36

37

39

1

3

Commercial lending fees

24

25

23

22

21

(1)

(3)

3

13

Letter of credit fees

18

17

18

19

18

1

1

(5)

Card fees

12

11

11

17

15

1

4

(3)

(26)

Foreign exchange income

10

9

10

11

10

1

2

1

Bank-owned life insurance

10

10

10

10

9

2

1

17

Brokerage fees

5

6

5

5

6

(1)

(10)

(1)

(11)

Net securities gains (losses)

6

5

(4)

12

4

1

27

2

50

Other noninterest income

34

29

21

15

29

5

16

5

18

Total noninterest income

211

206

182

201

202

5

2

9

4

NONINTEREST EXPENSES

Salaries

189

201

205

192

185

(12)

(6)

4

2

Employee benefits

61

60

52

53

50

1

2

11

21

Total salaries and employee benefits

250

261

257

245

235

(11)

(4)

15

6

Net occupancy expense

40

41

47

44

38

(1)

(4)

2

2

Equipment expense

16

17

17

17

17

(1)

(3)

(1)

Outside processing fee expense

26

26

27

25

25

2

1

6

Software expense

21

23

23

22

20

(2)

(5)

1

4

Merger and restructuring charges

8

37

33

5

8

N/M

3

37

FDIC insurance expense

10

10

8

8

12

(8)

(2)

(25)

Advertising expense

7

7

7

7

7

Other real estate expense

4

3

5

6

(4)

(76)

(6)

(84)

Other noninterest expenses

55

60

53

57

46

(5)

(10)

9

20

Total noninterest expenses

433

449

479

463

411

(16)

(4)

22

5

Income before income taxes

194

178

129

126

137

16

9

57

42

Provision for income taxes

50

48

33

28

41

2

5

9

21

NET INCOME

144

130

96

98

96

14

11

48

50

Less income allocated to participating securities

2

1

1

1

1

1

7

1

52

Net income attributable to common shares

$

142

$

129

$

95

$

97

$

95

$

13

11

%

$

47

50

%

Earnings per common share:

Basic

$

0.73

$

0.66

$

0.48

$

0.51

$

0.54

$

0.07

11

%

$

0.19

35

%

Diluted

0.73

0.66

0.48

0.51

0.53

0.07

11

0.20

38

Comprehensive income (loss)

169

160

(30)

176

170

9

5

(1)

(1)

Cash dividends declared on common stock

29

20

20

20

18

9

49

11

65

Cash dividends declared per common share

0.15

0.10

0.10

0.10

0.10

0.05

50

0.05

50

N/M - Not Meaningful

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)

Comerica Incorporated and Subsidiaries

2012

2011

(in millions)

2nd Qtr

1st Qtr

4th Qtr

3rd Qtr

2nd Qtr

Balance at beginning of period

$

704

$

726

$

767

$

806

$

849

Loan charge-offs:

Commercial

26

25

28

33

66

Real estate construction:

Commercial Real Estate business line (a)

2

2

4

11

12

Other business lines (b)

1

1

Total real estate construction

3

2

5

11

12

Commercial mortgage:

Commercial Real Estate business line (a)

16

13

17

12

8

Other business lines (b)

11

13

24

21

23

Total commercial mortgage

27

26

41

33

31

International

2

2

Residential mortgage

3

2

2

4

7

Consumer

5

5

7

9

9

Total loan charge-offs

64

62

85

90

125

Recoveries on loans previously charged-off:

Commercial

10

9

11

5

13

Real estate construction

1

1

4

3

5

Commercial mortgage

4

3

9

3

5

Lease financing

6

International

1

4

Residential mortgage

1

1

1

Consumer

4

2

1

1

1

Total recoveries

19

17

25

13

35

Net loan charge-offs

45

45

60

77

90

Provision for loan losses

8

23

19

38

47

Balance at end of period

$

667

$

704

$

726

$

767

$

806

Allowance for loan losses as a percentage of total loans (c)

1.52

%

1.64

%

1.70

%

1.86

%

2.06

%

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

0.42

0.43

0.57

0.77

0.92

(a)

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

(b)

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

(c)

Reflects the impact of acquired loans, which were initially recorded at fair value with no related allowance for loan losses.

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

Comerica Incorporated and Subsidiaries

2012

2011

(in millions)

2nd Qtr

1st Qtr

4th Qtr

3rd Qtr

2nd Qtr

Balance at beginning of period

$

25

$

26

$

27

$

30

$

32

Add: Provision for credit losses on lending-related commitments

11

(1)

(1)

(3)

(2)

Balance at end of period

$

36

$

25

$

26

$

27

$

30

Unfunded lending-related commitments sold

$

$

$

$

$

3

NONPERFORMING ASSETS (unaudited)

Comerica Incorporated and Subsidiaries

2012

2011

(in millions)

2nd Qtr

1st Qtr

4th Qtr

3rd Qtr

2nd Qtr

SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS

Nonaccrual loans:

Business loans:

Commercial

$

175

$

205

$

237

$

258

$

261

Real estate construction:

Commercial Real Estate business line (a)

60

77

93

109

137

Other business lines (b)

9

8

8

3

2

Total real estate construction

69

85

101

112

139

Commercial mortgage:

Commercial Real Estate business line (a)

155

174

159

198

186

Other business lines (b)

220

275

268

275

269

Total commercial mortgage

375

449

427

473

455

Lease financing

4

4

5

5

6

International

4

8

7

7

Total nonaccrual business loans

623

747

778

855

868

Retail loans:

Residential mortgage

76

69

71

65

60

Consumer:

Home equity

16

9

5

4

4

Other consumer

4

5

6

5

9

Total consumer

20

14

11

9

13

Total nonaccrual retail loans

96

83

82

74

73

Total nonaccrual loans

719

830

860

929

941

Reduced-rate loans

28

26

27

29

33

Total nonperforming loans (c)

747

856

887

958

974

Foreclosed property

67

67

94

87

70

Total nonperforming assets (c)

$

814

$

923

$

981

$

1,045

$

1,044

Nonperforming loans as a percentage of total loans

1.70

%

1.99

%

2.08

%

2.32

%

2.49

%

Nonperforming assets as a percentage of total loans

and foreclosed property

1.85

2.14

2.29

2.53

2.66

Allowance for loan losses as a percentage of total

nonperforming loans

89

82

82

80

83

Loans past due 90 days or more and still accruing

$

43

$

50

$

58

$

81

$

64

ANALYSIS OF NONACCRUAL LOANS

Nonaccrual loans at beginning of period

$

830

$

860

$

929

$

941

$

996

Loans transferred to nonaccrual (d)

47

69

99

130

150

Nonaccrual business loan gross charge-offs (e)

(56)

(55)

(76)

(76)

(109)

Loans transferred to accrual status (d)

(41)

(15)

Nonaccrual business loans sold (f)

(16)

(7)

(19)

(15)

(16)

Payments/Other (g)

(45)

(37)

(73)

(36)

(80)

Nonaccrual loans at end of period

$

719

$

830

$

860

$

929

$

941

(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

$

56

$

55

$

76

$

76

$

109

Performing watch list loans

1

Consumer and residential mortgage loans

8

7

9

13

16

Total gross loan charge-offs

$

64

$

62

$

85

$

90

$

125

(f) Analysis of loans sold:

Nonaccrual business loans

$

16

$

7

$

19

$

15

$

16

Performing watch list loans

7

11

16

6

Total loans sold

$

23

$

18

$

19

$

31

$

22

(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

Six Months Ended

June 30, 2012

June 30, 2011

Average

Average

Average

Average

(dollar amounts in millions)

Balance

Interest

Rate

Balance

Interest

Rate

Commercial loans

$

25,359

$

446

3.54

%

$

21,586

$

397

3.70

%

Real estate construction loans

1,437

32

4.54

2,029

36

3.62

Commercial mortgage loans

10,093

231

4.59

9,713

191

3.96

Lease financing

883

15

3.35

972

17

3.56

International loans

1,235

23

3.71

1,237

24

3.83

Residential mortgage loans

1,503

35

4.65

1,562

42

5.37

Consumer loans

2,239

38

3.43

2,262

39

3.42

Total loans (a)

42,749

820

3.86

39,361

746

3.82

Auction-rate securities available-for-sale

324

1

0.71

527

2

0.80

Other investment securities available-for-sale

9,484

122

2.64

6,832

114

3.39

Total investment securities available-for-sale

9,808

123

2.57

7,359

116

3.19

Interest-bearing deposits with banks (b)

3,724

5

0.26

2,899

4

0.25

Other short-term investments

138

1

1.76

124

1

2.05

Total earning assets

56,419

949

3.39

49,743

867

3.51

Cash and due from banks

965

878

Allowance for loan losses

(723)

(883)

Accrued income and other assets

5,121

4,410

Total assets

$

61,782

$

54,148

Money market and interest-bearing checking deposits

$

20,627

18

0.18

$

18,003

23

0.26

Savings deposits

1,575

1

0.08

1,443

1

0.09

Customer certificates of deposit

6,042

17

0.55

5,559

20

0.73

Foreign office and other time deposits

369

1

0.61

413

1

0.50

Total interest-bearing deposits

28,613

37

0.26

25,418

45

0.36

Short-term borrowings

73

0.11

103

0.21

Medium- and long-term debt

4,897

33

1.37

5,974

34

1.15

Total interest-bearing sources

33,583

70

0.42

31,495

79

0.51

Noninterest-bearing deposits

19,882

15,623

Accrued expenses and other liabilities

1,346

1,126

Total shareholders' equity

6,971

5,904

Total liabilities and shareholders' equity

$

61,782

$

54,148

Net interest income/rate spread (FTE)

$

879

2.97

$

788

3.00

FTE adjustment

$

1

$

2

Impact of net noninterest-bearing sources of funds

0.17

0.19

Net interest margin (as a percentage of average earning

assets) (FTE) (a) (b)

3.14

%

3.19

%

(a)

Accretion of the purchase discount on the acquired loan portfolio of $43 million increased the net interest margin by 15 basis points in the six months ended June 30, 2012.

(b)

Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 20 basis points and 18 basis points in the six months ended June 30, 2012 and 2011, respectively.

ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)

Comerica Incorporated and Subsidiaries

Three Months Ended

June 30, 2012

March 31, 2012

June 30, 2011

Average

Average

Average

Average

Average

Average

(dollar amounts in millions)

Balance

Interest

Rate

Balance

Interest

Rate

Balance

Interest

Rate

Commercial loans

$

25,983

$

227

3.52

%

$

24,736

$

219

3.56

%

$

21,677

$

196

3.65

%

Real estate construction loans

1,420

15

4.50

1,453

17

4.58

1,881

17

3.75

Commercial mortgage loans

9,983

112

4.46

10,202

119

4.73

9,636

96

3.98

Lease financing

869

7

3.28

897

8

3.41

958

8

3.50

International loans

1,265

12

3.66

1,205

11

3.76

1,254

12

3.80

Residential mortgage loans

1,487

17

4.53

1,519

18

4.77

1,525

21

5.50

Consumer loans

2,221

18

3.37

2,257

20

3.49

2,243

20

3.42

Total loans (a)

43,228

408

3.79

42,269

412

3.92

39,174

370

3.79

Auction-rate securities available-for-sale

296

0.82

352

1

0.63

500

1

0.71

Other investment securities available-for-sale

9,432

59

2.55

9,537

63

2.73

6,907

58

3.40

Total investment securities available-for-sale

9,728

59

2.49

9,889

64

2.65

7,407

59

3.20

Interest-bearing deposits with banks (b)

3,556

3

0.26

3,893

2

0.26

3,435

3

0.25

Other short-term investments

141

1.55

135

1

1.97

120

1.39

Total earning assets

56,653

470

3.35

56,186

479

3.44

50,136

432

3.46

Cash and due from banks

931

999

872

Allowance for loan losses

(710)

(737)

(859)

Accrued income and other assets

5,076

5,165

4,368

Total assets

$

61,950

$

61,613

$

54,517

Money market and interest-bearing checking deposits

$

20,458

8

0.18

$

20,795

10

0.19

$

18,207

11

0.26

Savings deposits

1,607

1

0.07

1,543

0.08

1,465

1

0.09

Customer certificates of deposit

6,107

9

0.53

5,978

8

0.57

5,609

10

0.70

Foreign office and other time deposits

379

0.64

358

1

0.57

413

1

0.52

Total interest-bearing deposits

28,551

18

0.25

28,674

19

0.26

25,694

23

0.35

Short-term borrowings

68

0.12

78

0.11

112

0.14

Medium- and long-term debt

4,854

17

1.40

4,940

16

1.34

5,821

17

1.20

Total interest-bearing sources

33,473

35

0.42

33,692

35

0.42

31,627

40

0.51

Noninterest-bearing deposits

20,128

19,637

15,786

Accrued expenses and other liabilities

1,347

1,345

1,132

Total shareholders' equity

7,002

6,939

5,972

Total liabilities and shareholders' equity

$

61,950

$

61,613

$

54,517

Net interest income/rate spread (FTE)

$

435

2.93

$

444

3.02

$

392

2.95

FTE adjustment

$

$

1

$

1

Impact of net noninterest-bearing sources of funds

0.17

0.17

0.19

Net interest margin (as a percentage of average earning

assets) (FTE) (a) (b)

3.10

%

3.19

%

3.14

%

(a)

Accretion of the purchase discount on the acquired loan portfolio of $18 million and $25 million in the second and first quarters of 2012, respectively, increased the net interest margin by 13 basis points and 18 basis points in the second 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 18 basis points and by 21 basis points in the second and first quarter of 2012, respectively, and by 21 basis points in the second quarter of 2011.

CONSOLIDATED STATISTICAL DATA (unaudited)

Comerica Incorporated and Subsidiaries

June 30,

March 31,

December 31,

September 30,

June 30,

(in millions, except per share data)

2012

2012

2011

2011

2011

Commercial loans:

Floor plan

$

2,406

$

2,152

$

1,822

$

1,209

$

1,478

Other

24,610

23,488

23,174

21,904

20,574

Total commercial loans

27,016

25,640

24,996

23,113

22,052

Real estate construction loans:

Commercial Real Estate business line (a)

991

1,055

1,103

1,226

1,343

Other business lines (b)

386

387

430

422

385

Total real estate construction loans

1,377

1,442

1,533

1,648

1,728

Commercial mortgage loans:

Commercial Real Estate business line (a)

2,315

2,501

2,507

2,602

1,930

Other business lines (b)

7,515

7,578

7,757

7,937

7,649

Total commercial mortgage loans

9,830

10,079

10,264

10,539

9,579

Lease financing

858

872

905

927

949

International loans

1,224

1,256

1,170

1,046

1,162

Residential mortgage loans

1,469

1,485

1,526

1,643

1,491

Consumer loans:

Home equity

1,584

1,612

1,655

1,683

1,622

Other consumer

634

626

630

626

610

Total consumer loans

2,218

2,238

2,285

2,309

2,232

Total loans

$

43,992

$

43,012

$

42,679

$

41,225

$

39,193

Goodwill

$

635

$

635

$

635

$

635

$

150

Core deposit intangible

25

27

29

32

Loan servicing rights

3

3

3

3

4

Tier 1 common capital ratio (c) (d)

10.32

%

10.27

%

10.37

%

10.57

%

%

10.53

%

Tier 1 risk-based capital ratio (d)

10.32

10.27

10.41

10.65

10.53

Total risk-based capital ratio (d)

13.82

13.99

14.25

14.84

14.80

Leverage ratio (d)

10.92

10.94

10.92

11.41

11.40

Tangible common equity ratio (c)

10.27

10.21

10.27

10.43

10.90

Common shareholders' equity per share of common stock

$

36.18

$

35.44

$

34.80

$

34.94

$

34.15

Tangible common equity per share of common stock (c)

32.76

32.06

31.42

31.57

33.28

Market value per share for the quarter:

High

32.88

34.00

27.37

35.79

39.00

Low

27.88

26.25

21.53

21.48

33.08

Close

30.71

32.36

25.80

22.97

34.57

Quarterly ratios:

Return on average common shareholders' equity

8.22

%

7.50

%

5.51

%

5.91

%

6.41

%

Return on average assets

0.93

0.84

0.63

0.67

0.70

Efficiency ratio

67.53

69.70

75.97

75.59

69.65

Number of banking centers

493

495

494

502

446

Number of employees - full time equivalent

9,014

9,195

9,397

9,701

8,915

(a)

Primarily loans to real estate investors and developers.

(b)

Primarily loans secured by owner-occupied real estate.

(c)

See Reconciliation of Non-GAAP Financial Measures.

(d)

June 30, 2012 ratios are estimated.

PARENT COMPANY ONLY BALANCE SHEETS (unaudited)

Comerica Incorporated

June 30,

December 31,

June 30,

(in millions, except share data)

2012

2011

2011

ASSETS

Cash and due from subsidiary bank

$

2

$

7

14

Short-term investments with subsidiary bank

442

411

413

Other short-term investments

86

90

90

Investment in subsidiaries, principally banks

7,130

7,011

6,122

Premises and equipment

4

4

3

Other assets

146

177

162

Total assets

$

7,810

$

7,700

$

6,804

LIABILITIES AND SHAREHOLDERS' EQUITY

Medium- and long-term debt

$

633

$

666

$

635

Other liabilities

149

166

131

Total liabilities

782

832

766

Common stock - $5 par value:

Authorized - 325,000,000 shares

Issued - 228,164,824 shares at 6/30/12 and 12/31/11 and 203,878,110 shares at 6/30/11

1,141

1,141

1,019

Capital surplus

2,144

2,170

1,472

Accumulated other comprehensive loss

(301)

(356)

(308)

Retained earnings

5,744

5,546

5,395

Less cost of common stock in treasury - 33,889,392 shares at 6/30/12, 30,831,076 shares at

12/31/11, and 27,092,427 shares at 6/30/11

(1,700)

(1,633)

(1,540)

Total shareholders' equity

7,028

6,868

6,038

Total liabilities and shareholders' equity

$

7,810

$

7,700

$

6,804

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, 2010

176.5

$

1,019

$

1,481

$

(389)

$

5,247

$

(1,565)

$

5,793

Net income

199

199

Other comprehensive income, net of tax

81

81

Cash dividends declared on common stock ($0.20 per share)

(35)

(35)

Purchase of common stock

(0.5)

(21)

(21)

Net issuance of common stock under employee stock plans

0.8

(30)

(16)

46

Share-based compensation

21

21

BALANCE AT JUNE 30, 2011

176.8

$

1,019

$

1,472

$

(308)

$

5,395

$

(1,540)

$

6,038

BALANCE AT DECEMBER 31, 2011

197.3

$

1,141

$

2,170

$

(356)

$

5,546

$

(1,633)

$

6,868

Net income

274

274

Other comprehensive income, net of tax

55

55

Cash dividends declared on common stock ($0.25 per share)

(49)

(49)

Purchase of common stock

(4.1)

(125)

(125)

Net issuance of common stock under employee stock plans

1.1

(49)

(27)

60

(16)

Share-based compensation

21

21

Other

2

(2)

BALANCE AT JUNE 30, 2012

194.3

$

1,141

$

2,144

$

(301)

$

5,744

$

(1,700)

$

7,028

BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)

Comerica Incorporated and Subsidiaries

(dollar amounts in millions)

Business

Retail

Wealth

Three Months Ended June 30, 2012

Bank

Bank

Management

Finance

Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

385

$

161

$

46

$

(166)

$

9

$

435

Provision for credit losses

12

3

2

2

19

Noninterest income

83

47

66

17

(2)

211

Noninterest expenses

151

177

79

2

24

433

Provision (benefit) for income taxes (FTE)

95

9

11

(56)

(9)

50

Net income (loss)

$

210

$

19

$

20

$

(95)

$

(10)

$

144

Net credit-related charge-offs

$

26

$

9

$

10

$

45

Selected average balances:

Assets

$

34,376

$

5,946

$

4,604

$

11,953

$

5,071

$

61,950

Loans

33,449

5,250

4,529

43,228

Deposits

24,145

20,525

3,640

177

192

48,679

Statistical data:

Return on average assets (a)

2.44

%

0.35

%

1.76

%

N/M

N/M

0.93

%

Efficiency ratio

32.30

85.17

73.98

N/M

N/M

67.53

Business

Retail

Wealth

Three Months Ended March 31, 2012

Bank

Bank

Management

Finance

Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

379

$

167

$

47

$

(156)

$

7

$

444

Provision for credit losses

2

4

15

1

22

Noninterest income

81

42

65

13

5

206

Noninterest expenses

158

184

80

3

24

449

Provision (benefit) for income taxes (FTE)

94

7

6

(54)

(4)

49

Net income (loss)

$

206

$

14

$

11

$

(92)

$

(9)

$

130

Net credit-related charge-offs

$

28

$

12

$

5

$

45

Selected average balances:

Assets

$

33,184

$

6,173

$

4,636

$

12,095

$

5,525

$

61,613

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)

2.49

%

0.27

%

0.97

%

N/M

N/M

0.84

%

Efficiency ratio

34.41

87.86

75.11

N/M

N/M

69.70

Business

Retail

Wealth

Three Months Ended June 30, 2011

Bank

Bank

Management

Finance

Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$

342

$

141

$

48

$

(147)

8

$

392

Provision for credit losses

2

24

14

5

45

Noninterest income

79

46

63

13

1

202

Noninterest expenses

162

162

76

3

8

411

Provision (benefit) for income taxes (FTE)

81

4

9

(51)

(1)

42

Net income (loss)

$

176

$

(3)

$

12

$

(86)

$

(3)

$

96

Net credit-related charge-offs

$

54

$

22

$

14

$

90

Selected average balances:

Assets

$

29,893

$

5,454

$

4,728

$

9,440

$

5,002

$

54,517

Loans

29,427

4,999