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

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

   

4,748

   

   

   

39,174

 

Deposits

20,396

   

17,737

   

2,978

   

239

   

130

   

41,480

 
                       

Statistical data:

                     

Return on average assets (a)

2.35

%

 

(0.06)

%

 

1.03

%

 

N/M

   

N/M

   

0.70

%

Efficiency ratio

38.27

   

86.63

   

71.58

   

N/M

   

N/M

   

69.65

 
     

(a)

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

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 June 30, 2012

Midwest

 

Western

 

Texas

 

Florida

 

Markets

 

International

 

& Other

 

Total

Earnings summary:

                             

Net interest income (expense) (FTE)

$

196

   

$

177

   

$

143

   

$

11

   

$

46

   

$

19

   

$

(157)

   

$

435

 

Provision for credit losses

1

   

1

   

7

   

11

   

(4)

   

1

   

2

   

19

 

Noninterest income

96

   

37

   

31

   

4

   

19

   

9

   

15

   

211

 

Noninterest expenses

177

   

104

   

88

   

11

   

18

   

9

   

26

   

433

 

Provision (benefit) for income taxes (FTE)

39

   

40

   

28

   

(2)

   

4

   

6

   

(65)

   

50

 

Net income (loss)

$

75

   

$

69

   

$

51

   

$

(5)

   

$

47

   

$

12

   

$

(105)

   

$

144

 

Net credit-related charge-offs

$

10

   

$

12

   

$

4

   

$

10

   

$

9

   

   

   

$

45

 
                               

Selected average balances:

                             

Assets

$

14,028

   

$

13,170

   

$

10,270

   

$

1,407

   

$

4,183

   

$

1,868

   

$

17,024

   

$

61,950

 

Loans

13,766

   

12,920

   

9,506

   

1,429

   

3,837

   

1,770

   

   

43,228

 

Deposits

19,227

   

14,371

   

10,185

   

446

   

2,728

   

1,353

   

369

   

48,679

 
                               

Statistical data:

                             

Return on average assets (a)

1.48

%

 

1.78

%

 

1.78

%

 

(1.35)

%

 

4.53

%

 

2.54

%

 

N/M

   

0.93

%

Efficiency ratio

60.51

   

48.44

   

50.96

   

77.45

   

30.43

   

29.78

   

N/M

   

67.53

 
                               
                 

Other

     

Finance

   

Three Months Ended March 31, 2012

Midwest

 

Western

 

Texas

 

Florida

 

Markets

 

International

 

& Other

 

Total

Earnings summary:

                             

Net interest income (expense) (FTE)

$

198

   

$

171

   

$

151

   

$

10

   

$

45

   

$

18

   

$

(149)

   

$

444

 

Provision for credit losses

11

   

(7)

   

14

   

6

   

(2)

   

(1)

   

1

   

22

 

Noninterest income

98

   

33

   

31

   

4

   

14

   

8

   

18

   

206

 

Noninterest expenses

182

   

107

   

92

   

9

   

23

   

9

   

27

   

449

 

Provision (benefit) for income taxes (FTE)

35

   

39

   

27

   

   

   

6

   

(58)

   

49

 

Net income (loss)

$

68

   

$

65

   

$

49

   

$

(1)

   

$

38

   

$

12

   

$

(101)

   

$

130

 

Net credit-related charge-offs

$

18

   

$

11

   

$

7

   

$

2

   

$

6

   

$

1

   

   

$

45

 
                               

Selected average balances:

                             

Assets

$

14,095

   

$

12,623

   

$

10,082

   

$

1,416

   

$

4,021

   

$

1,756

   

$

17,620

   

$

61,613

 

Loans

13,825

   

12,383

   

9,295

   

1,418

   

3,697

   

1,651

   

   

42,269

 

Deposits

19,415

   

13,897

   

10,229

   

424

   

2,628

   

1,388

   

330

   

48,311

 
                               

Statistical data:

                             

Return on average assets (a)

1.33

%

 

1.75

%

 

1.72

%

 

(0.21)

%

 

3.77

%

 

2.73

%

 

N/M

   

0.84

%

Efficiency ratio

61.40

   

52.52

   

50.75

   

68.89

   

44.68

   

32.95

   

N/M

   

69.70

 
                               
                 

Other

     

Finance

   

Three Months Ended June 30, 2011

Midwest

 

Western

 

Texas

 

Florida

 

Markets

 

International

 

& Other

 

Total

Earnings summary:

                             

Net interest income (expense) (FTE)

$

204

   

$

166

   

$

89

   

$

12

   

$

41

   

$

19

   

$

(139)

   

$

392

 

Provision for credit losses

15

   

16

   

(2)

   

12

   

4

   

(5)

   

5

   

45

 

Noninterest income

100

   

37

   

25

   

4

   

13

   

9

   

14

   

202

 

Noninterest expenses

183

   

112

   

63

   

11

   

22

   

9

   

11

   

411

 

Provision (benefit) for income taxes (FTE)

44

   

25

   

20

   

(2)

   

(2)

   

9

   

(52)

   

42

 

Net income (loss)

$

62

   

$

50

   

$

33

   

$

(5)

   

$

30

   

$

15

   

$

(89)

   

$

96

 

Net credit-related charge-offs

$

37

   

$

26

   

$

3

   

$

15

   

$

11

   

$

(2)

   

   

$

90

 
                               

Selected average balances:

                             

Assets

$

14,262

   

$

12,329

   

$

7,082

   

$

1,534

   

$

3,106

   

$

1,762

   

$

14,442

   

$

54,517

 

Loans

14,050

   

12,121

   

6,872

   

1,565

   

2,829

   

1,737

   

   

39,174

 

Deposits

18,318

   

12,458

   

6,176

   

396

   

2,451

   

1,312

   

369

   

41,480

 
                               

Statistical data:

                             

Return on average assets (a)

1.28

%

 

1.48

%

 

1.84

%

 

(1.29)

%

 

3.87

%

 

3.33

%

 

N/M

   

0.70

%

Efficiency ratio

60.17

   

54.85

   

55.69

   

72.67

   

42.74

   

33.69

   

N/M

   

69.65

 
     

(a)

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

FTE - Fully Taxable Equivalent

N/M - Not Meaningful

 
                                       
       

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

     

Comerica Incorporated and Subsidiaries

                 
                   
 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

(dollar amounts in millions)

2012

 

2012

 

2011

 

2011

 

2011

                   

Tier 1 Common Capital Ratio:

                 

Tier 1 capital (a) (b)

$

6,676

   

$

6,647

   

$

6,582

   

$

6,560

   

$

6,193

 

Less:

                 

Trust preferred securities

   

   

25

   

49

   

 

Tier 1 common capital (b)

$

6,676

   

$

6,647

   

$

6,557

   

$

6,511