2014

Comerica Reports Third Quarter 2012 Net Income Of $117 Million Customer Relationship Focus Supports Loan and Deposit Growth

Average Total Loan Growth Continues - Driven by a $717 Million, 3 Percent Increase in Commercial Loans

Average Deposits Increase to Record Level of $50 Billion

Strong Capital Supports Shareholder Return of $119 Million

DALLAS, Oct. 17, 2012 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported third quarter 2012 net income of $117 million, compared to $144 million for the second quarter 2012. Earnings per fully diluted share was 61 cents compared to 73 cents for the second quarter 2012. Third quarter 2012 earnings per fully diluted share included restructuring expenses of 8 cents associated with the acquisition of Sterling Bancshares, Inc. (Sterling) compared to 2 cents for the second quarter 2012.

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(dollar amounts in millions, except per share data)

3rd Qtr '12

 

2nd Qtr '12

 

3rd Qtr '11

Net interest income (a)

$

427

   

$

435

   

$

423

 

Provision for credit losses

22

   

19

   

35

 

Noninterest income

197

   

211

   

201

 

Noninterest expenses (b)

449

   

433

   

463

 

Provision for income taxes

36

   

50

   

28

 
           

Net income

117

   

144

   

98

 
           

Net income attributable to common shares

116

   

142

   

97

 
           

Diluted income per common share

0.61

   

0.73

   

0.51

 
           

Average diluted shares (in millions)

191

   

194

   

192

 
           

Tier 1 common capital ratio (d)

10.32

%

(c)

10.38

%

 

10.57

%

Tangible common equity ratio (d)

10.25

   

10.27

   

10.43

 

(a)

Included accretion of the purchase discount on the acquired Sterling loan portfolio of $15 million ($9 million, after tax), $18 million ($11 million, after tax) and $27 million ($17 million, after tax) in the third and second quarter 2012 and the third quarter 2011, respectively.

(b)

Included restructuring expenses of $25 million ($16 million, after tax), $8 million ($5 million, after tax) and $33 million ($21 million, after tax) in the third and second quarter 2012 and the third quarter 2011, respectively, associated with the acquisition of Sterling.

(c)

September 30, 2012 ratio is estimated.

(d)

See Reconciliation of Non-GAAP Financial Measures.

"Our customer relationship focus supported loan and deposit growth in the third quarter, despite a slow growing national economy," said Ralph W. Babb Jr., chairman and chief executive officer. "Average loans were up $369 million, or 1 percent, compared to the second quarter, primarily reflecting an increase of $717 million, or 3 percent, in commercial loans. This was the ninth consecutive quarter of average commercial loan growth, resulting in more than a 20 percent year-over-year increase, including our acquisition of Sterling in July 2011. The increase in average commercial loans in the third quarter was primarily driven by increases in Mortgage Banker Finance, Technology and Life Sciences, and Energy.

"Net interest income declined slightly, reflecting the expected continued shift in loan portfolio mix and decline in accretion, as well as a decline in nonaccrual interest received and a leasing residual value adjustment. Lower loan and securities portfolio yields were partially offset by increased loan volume.''

"Strong noninterest-bearing deposit growth continued in the third quarter. We had record average deposits of $50 billion in the third quarter 2012, with an increase of $1 billion, primarily driven by the increase in noninterest-bearing deposits.

"Our capital position remained a source of strength. We repurchased 2.9 million shares in the third quarter under our share repurchase program. Combined with our dividend, we returned $119 million to shareholders in the third quarter."

Third Quarter 2012 Compared to Second Quarter 2012

  • Average total loans increased $369 million, or 1 percent, primarily reflecting an increase of $717 million, or 3 percent, in commercial loans, partially offset by a decrease of $344 million, or 3 percent, in commercial real estate loans (commercial mortgage and real estate construction loans). The increase in commercial loans was primarily driven by increases in Mortgage Banker Finance, Technology and Life Sciences and Energy.
  • Average total deposits increased $1.2 billion, to $49.9 billion, primarily reflecting an increase of $1.3 billion, or 7 percent, in noninterest-bearing deposits.
  • Strong credit quality continued in the third quarter 2012. Nonaccrual loans decreased $54 million, to $665 million at September 30, 2012. Net credit-related charge-offs decreased $2 million to $43 million, or 0.39 percent of average loans, in the third quarter 2012. The provision for credit losses was $22 million in the third quarter 2012 compared to $19 million in the second quarter 2012.
  • Net interest income was $427 million in the third quarter 2012 compared to $435 million in the second quarter 2012. The $8 million decrease in net interest income was primarily due to a decline in nonaccrual interest received($4 million) and a leasing residual value adjustment ($2 million), as well as the expected continued shift in the mix of the loan portfolio ($6 million), a decrease in the accretion of the purchase discount on the acquired Sterling loan portfolio ($3 million) and lower reinvestment yields on mortgage-backed investment securities ($2 million), partially offset by lower funding costs ($2 million), an increase in loan volumes ($3 million) and one more day in the third quarter ($4 million).
  • Noninterest income was $197 million in the third quarter 2012 compared to $211 million for the second quarter 2012. The $14 million decrease was primarily due to decreases in certain non-customer driven income categories. Net securities gains of $6 million and a $5 million annual incentive bonus received in the second quarter 2012 were not repeated in the third quarter, and net income from principal investing and warrants declined $3 million.
  • Noninterest expenses were $449 million in the third quarter 2012, compared to $433 million in the second quarter 2012. The $16 million increase primarily reflected a $17 million increase in restructuring expenses related to the Sterling acquisition.
  • Comerica repurchased 2.9 million shares of common stock under the share repurchase program in the third quarter 2012. Combined with the dividend, and in accordance with the capital plan approved earlier this year, $119 million, or 101 percent of net income, was returned to shareholders in the third quarter (89 percent, excluding the third quarter restructuring charge).

 

Net Interest Income

                       

(dollar amounts in millions)

3rd Qtr '12

 

2nd Qtr '12

 

3rd Qtr '11

Net interest income

$

427

   

$

435

   

$

423

 
           

Net interest margin

2.96

%

 

3.10

%

 

3.18

%

           

Selected average balances (a):

         

Total earning assets

$

57,801

   

$

56,653

   

$

53,243

 

Total loans

43,597

   

43,228

   

40,098

 

Total investment securities

9,791

   

9,728

   

8,158

 

Federal Reserve Bank deposits (excess liquidity)

4,160

   

3,463

   

4,800

 
           
           

Total deposits

49,857

   

48,679

   

45,098

 

Total noninterest-bearing deposits

21,469

   

20,128

   

17,511

 

a)

Average balances in 3rd quarter 2011 included Sterling balances from July 28 through September 30, 2011.

   

 

  • Net interest income of $427 million in the third quarter 2012 decreased $8 million compared to the second quarter 2012.
    • Second quarter 2012 included an unusually high amount of interest received on nonaccrual loans, which declined by $4 million in the third quarter. In addition, third quarter 2012 included a $2 million negative residual value adjustment to assets in the leasing portfolio.
    • The continued shift in the loan portfolio mix reduced net interest income $6 million, primarily due to the decrease in higher-yielding commercial real estate loans, the increase in lower-yielding commercial loans, the maturity of higher-yielding fixed-rate loans and positive credit quality migration throughout the loan portfolio.
    • Accretion of the purchase discount on the acquired Sterling loan portfolio decreased $3 million, to $15 million in the third quarter 2012, compared to $18 million in the second quarter 2012. For the fourth quarter of 2012, $7 million to $9 million of accretion is expected to be recognized.
    • Interest earned on investment securities available-for-sale decreased $2 million, as a result of lower reinvestment yields on mortgage-backed investment securities.
    • An increase in loan volumes ($3 million), one more day in the third quarter ($4 million) and lower funding costs ($2 million) partially offset the items noted above.
  • Average earning assets increased $1.1 billion in the third quarter 2012, compared to the second quarter 2012, primarily reflecting a $697 million increase in excess liquidity and a $369 million increase in average loans.
  • Average deposits increased $1.2 billion in the third quarter 2012, compared to the second quarter 2012, primarily due to a $1.3 billion increase in average noninterest-bearing deposits, partially offset by a decrease in customer certificates of deposit. The rate paid on total average interest-bearing deposits decreased 1 basis point, to 24 basis points.
  • Net interest margin of 2.96 percent decreased 14 basis points compared to the second quarter 2012. In addition to the decrease from the unusually high amount of nonaccrual interest received in the second quarter (3 basis points) and the negative leasing residual value adjustment in the third quarter (2 basis points), net interest margin was negatively impacted by lower accretion on the acquired Sterling loan portfolio (2 basis points), continued shift in mix in the loan portfolio (3 basis points), lower reinvestment yields on mortgage-backed securities (2 basis points) and the increase in excess liquidity (3 basis points). Lower funding costs partially offset the decline (1 basis point).

Noninterest Income

Noninterest income totaled $197 million for the third quarter 2012 compared to $211 million for the second quarter 2012. The $14 million decrease was primarily due to decreases in certain non-customer driven income categories. Net securities gains of $6 million and a $5 million annual incentive bonus received from Comerica's third-party credit card provider in the second quarter 2012 were not repeated in the third quarter, and net income from principal investing and warrants declined $3 million. Additionally, customer derivative income decreased $3 million in the third quarter 2012. These declines were partially offset by a $5 million increase in deferred compensation asset returns. The increase in deferred compensation asset returns is offset by an increase in deferred compensation expense in noninterest expenses.

Noninterest Expenses

Noninterest expenses totaled $449 million in the third quarter 2012 compared to $433 million in the second quarter 2012. The $16 million increase was primarily due to increases of $17 million in restructuring expenses and $3 million in salaries expense, partially offset by a decrease of $5 million in legal expenses. Additionally, noninterest expenses were reduced by $6 million in the third quarter 2012 and $3 million in the second quarter due to gains on sales of assets. Restructuring charges related to the Sterling acquisition are substantially complete. The increase in salaries expense was primarily due to a $5 million increase in deferred compensation expense, partially offset by a $3 million decrease in executive incentive compensation.

Credit Quality

"Credit quality continued to be strong," said Babb. "With 39 basis points of net charge-offs and watch list loans at 8.3 percent of the total loan portfolio, we are well within our historical normal range."

                       

(dollar amounts in millions)

3rd Qtr '12

 

2nd Qtr '12

 

3rd Qtr '11

Net credit-related charge-offs

$

43

   

$

45

   

$

77

 

Net credit-related charge-offs/Average total loans

0.39

%

 

0.42

%

 

0.77

%

           

Provision for credit losses

$

22

   

$

19

   

$

35

 
           

Nonperforming loans (a)

692

   

747

   

958

 

Nonperforming assets (NPAs) (a)

755

   

814

   

1,045

 

NPAs/Total loans and foreclosed property

1.71

%

 

1.85

%

 

2.53

%

           

Loans past due 90 days or more and still accruing

$

36

   

$

43

   

$

81

 
           

Allowance for loan losses

647

   

667

   

767

 

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

35

   

36

   

27

 

Total allowance for credit losses

682

   

703

   

794

 
           

Allowance for loan losses/Total loans

1.46

%

 

1.52

%

 

1.86

%

Allowance for loan losses/Nonperforming loans

94

   

89

   

80

 

(a)

Excludes loans acquired with credit impairment.

(b)

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

  • Internal watch list loans continued the downward trend, declining $182 million in the third quarter 2012, to $3.7 billion at September 30, 2012. Nonperforming assets decreased $59 million to $755 million at September 30, 2012.
  • During the third quarter 2012, $35 million of borrower relationships over $2 million were transferred to nonaccrual status, a decrease of $12 million from the second quarter 2012.

Balance Sheet and Capital Management

Total assets and common shareholders' equity were $63.3 billion and $7.1 billion, respectively, at September 30, 2012, compared to $62.7 billion and 7.0 billion, respectively, at June 30, 2012. There were approximately 191 million common shares outstanding at September 30, 2012. Comerica repurchased $90 million of common stock (2.9 million shares) under the share repurchase program during the third quarter 2012. Combined with the dividend of $0.15 per share in the third quarter 2012, and in accordance with the capital plan approved earlier this year, share repurchases and dividends returned 101 percent of third quarter 2012 net income to shareholders (89 percent, excluding the third quarter restructuring charge).

Comerica's tangible common equity ratio was 10.25% at September 30, 2012, a decrease of 2 basis points from June 30, 2012. The estimated Tier 1 common capital ratio decreased 6 basis points, to 10.32% at September 30, 2012, from June 30, 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 7 percent to 8 percent.
  • Net interest income increasing 4 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 September 30, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2012 results compared to second quarter 2012.

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

                                   

(dollar amounts in millions)

3rd Qtr '12

 

2nd Qtr '12

 

3rd Qtr '11

Business Bank

$

211

 

88

%

 

$

210

 

84

%

 

$

179

 

86

%

Retail Bank

10

 

4

   

19

 

8

   

19

 

9

 

Wealth Management

18

 

8

   

20

 

8

   

11

 

5

 
 

239

 

100

%

 

249

 

100

%

 

209

 

100

%

Finance

(103)

     

(95)

     

(91)

   

Other (a)

(19)

     

(10)

     

(20)

   

    Total

$

117

     

$

144

     

$

98

   

(a) 

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

Business Bank

                       

(dollar amounts in millions)

3rd Qtr '12

   

2nd Qtr '12

   

3rd Qtr '11

 

Net interest income (FTE)

$

386

   

$

385

   

$

363

 

Provision for credit losses

15

   

12

   

18

 

Noninterest income

76

   

83

   

77

 

Noninterest expenses

144

   

151

   

164

 

Net income

211

   

210

   

179

 
           

Net credit-related charge-offs

27

   

26

   

40

 
           

Selected average balances:

         

Assets

34,863

   

34,376

   

30,608

 

Loans

33,856

   

33,449

   

29,957

 

Deposits

25,142

   

24,145

   

21,759

 
   

 

  • Average loans increased $407 million, primarily due to increases in Mortgage Banker Finance and Middle Market, partially offset by a decrease in Commercial Real Estate. The increase in Middle Market primarily reflected increases in Energy and Technology and Life Sciences.
  • Average deposits increased $997 million. The increase was broad-based, reflecting increases in Middle Market, Corporate, Commercial Real Estate and Mortgage Banker Finance.
  • Net interest income increased $1 million, primarily due to higher loan volumes, increased net funds transfer pricing (FTP) credits, as a result of higher deposit balances, and one more day in the third quarter, partially offset by decreases in loan yields and accretion on the acquired Sterling loan portfolio.
  • The provision for credit losses increased $3 million, primarily reflecting increases in Middle Market and Mortgage Banker Finance, partially offset by a decrease in Commercial Real Estate. The increase in Middle Market primarily reflected increases in Technology and Life Sciences, National Dealer Services and Energy, partially offset by a decrease in general Middle Market.
  • Noninterest income decreased $7 million, primarily due to decreases in commercial lending fees and warrant income.
  • Noninterest expenses decreased $7 million, primarily due to decreases in net allocated corporate overhead expense and processing charges, and a third quarter gain on sale of assets; partially offset by an increase in legal expenses.

Retail Bank

                       

(dollar amounts in millions)

3rd Qtr '12

   

2nd Qtr '12

   

3rd Qtr '11

 

Net interest income (FTE)

$

161

   

$

161

   

$

173

 

Provision for credit losses

6

   

3

   

16

 

Noninterest income

41

   

47

   

47

 

Noninterest expenses

181

   

177

   

175

 

Net income (loss)

10

   

19

   

19

 
           

Net credit-related charge-offs

13

   

9

   

28

 
           

Selected average balances:

         

Assets

5,964

   

5,946

   

5,985

 

Loans

5,265

   

5,250

   

5,483

 

Deposits

20,682

   

20,525

   

19,792

 
     

 

  • Average deposits increased $157 million, primarily due to an increase in Small Business.|
  • The provision for credit losses increased $3 million, primarily due to an increase in Small Business.
  • Noninterest income decreased $6 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 increased $4 million, primarily due to small increases in several noninterest expense categories.

Wealth Management

                       

(dollar amounts in millions)

3rd Qtr '12

   

2nd Qtr '12

   

3rd Qtr '11

 

Net interest income (FTE)

$

47

   

$

46

   

$

45

 

Provision for credit losses

3

   

2

   

7

 

Noninterest income

62

   

66

   

56

 

Noninterest expenses

78

   

79

   

77

 

Net income

18

   

20

   

11

 
           

Net credit-related charge-offs

3

   

10

   

9

 
           

Selected average balances:

         

Assets

4,566

   

4,604

   

4,674

 

Loans

4,476

   

4,529

   

4,658

 

Deposits

3,667

   

3,640

   

3,198

 
     

 

  • Average loans decreased $53 million, primarily due to a decrease in Private Banking. |
  • Average deposits increased $27 million, primarily due to an increase in Private Banking.
  • Noninterest income decreased $4 million, primarily due a decrease in gains on the sale of auction-rate securities.

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 September 30, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2012 results compared to second quarter 2012.

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

                                   

(dollar amounts in millions)

3rd Qtr '12

 

2nd Qtr '12

 

3rd Qtr '11

Midwest

$

71

 

30

%

 

$

75

 

31

%

 

$

60

 

28

%

Western

70

 

29

   

69

 

27

   

50

 

23

 

Texas

45

 

19

   

51

 

20

   

64

 

31

 

Florida

(1)

 

   

(5)

 

(2)

   

1

 

1

 

Other Markets

41

 

17

   

47

 

19

   

22

 

11

 

International

13

 

5

   

12

 

5

   

12

 

6

 
 

239

 

100

%

 

249

 

100

%

 

209

 

100

%

Finance & Other (a)

(122)

     

(105)

     

(111)

   

    Total

$

117

     

$

144

     

$

98

   

(a)

 Includes items not directly associated with the geographic markets.

Midwest Market

                       

(dollar amounts in millions)

3rd Qtr '12

   

2nd Qtr '12

   

3rd Qtr '11

 

Net interest income (FTE)

$

194

   

$

196

   

$

199

 

Provision for credit losses

2

   

1

   

20

 

Noninterest income

95

   

96

   

96

 

Noninterest expenses

175

   

177

   

183

 

Net income

71

   

75

   

60

 
           

Net credit-related charge-offs

12

   

10

   

33

 
           

Selected average balances:

         

Assets

13,784

   

14,028

   

14,118

 

Loans

13,468

   

13,766

   

13,873

 

Deposits

19,628

   

19,227

   

18,510

 
   

 

  • Average loans decreased $298 million, primarily due to decreases in Middle Market, Commercial Real Estate, Corporate, and Private Banking.
  • Average deposits increased $401 million, primarily due to increases in Corporate, Middle Market and Small Business, partially offset by a decrease in Personal Banking.
  • Net interest income decreased $2 million, primarily due to decreases in loan volumes and yields, partially offset by one more day in the third quarter 2012 and an increase in net FTP credits, primarily as a result of higher deposit balances and lower loan balances.

Western Market

                       

(dollar amounts in millions)

3rd Qtr '12

   

2nd Qtr '12

   

3rd Qtr '11

 

Net interest income (FTE)

$

181

   

$

177

   

$

166

 

Provision for credit losses

   

1

   

13

 

Noninterest income

34

   

37

   

32

 

Noninterest expenses

105

   

104

   

106

 

Net income

70

   

69

   

50

 
           

Net credit-related charge-offs

10

   

12

   

32

 
           

Selected average balances:

         

Assets

13,442

   

13,170

   

12,110

 

Loans

13,163

   

12,920

   

11,889

 

Deposits

15,192

   

14,371

   

12,975

 
   

 

  • Average loans increased $243 million, primarily due to increases in Middle Market and Corporate. The increase in Middle Market primarily reflected increases in Technology and Life Sciences and National Dealer Services.
  • Average deposits increased $821 million, primarily due to increases in Middle Market, Commercial Real Estate and Small Business. The increase in Middle Market was broad-based.
  • Net interest income increased $4 million, primarily due to an increase in loan volumes, one more day in the third quarter 2012, and an increase in net FTP credits as a result of higher deposit balances.
  • Noninterest income decreased $3 million, primarily due to a decrease in warrant income.

Texas Market

                       

(dollar amounts in millions)

3rd Qtr '12

   

2nd Qtr '12

   

3rd Qtr '11

 

Net interest income (FTE)

$

139

   

$

143

   

$

143

 

Provision for credit losses

10

   

7

   

(8)

 

Noninterest income

30

   

31

   

29

 

Noninterest expenses

89

   

88

   

81

 

Net income

45

   

51

   

64

 
           

Net credit-related charge-offs

7

   

4

   

2

 
           

Selected average balances:

         

Assets

10,327

   

10,270

   

8,510

 

Loans

9,585

   

9,506

   

8,145

 

Deposits

9,941

   

10,185

   

8,865

 
   

 

  • Average loans increased $79 million, primarily due to an increase in Middle Market, partially offset by a decrease in Commercial Real Estate. The increase in Middle Market was primarily due to an increase in Energy.
  • Average deposits decreased $244 million, primarily reflecting decreases in Middle Market, Small Business and Private Banking. The decrease in Middle Market primarily reflected decreases in Technology and Life Sciences and Energy.
  • Net interest income decreased $4 million, primarily due to a decrease in accretion on the acquired Sterling loan portfolio and lower loan yields, partially offset by an increase in loan volumes and one more day in the third quarter 2012.
  • The provision for credit losses increased $3 million, primarily due to an increase in Private Banking.

Florida Market

                       

(dollar amounts in millions)

3rd Qtr '12

   

2nd Qtr '12

   

3rd Qtr '11

 

Net interest income (FTE)

$

10

   

$

11

   

$

11

 

Provision for credit losses

5

   

11

   

2

 

Noninterest income

3

   

4

   

4

 

Noninterest expenses

10

   

11

   

11

 

Net income

(1)

   

(5)

   

1

 
           

Net credit-related charge-offs

9

   

10

   

5

 
           

Selected average balances:

         

Assets

1,309

   

1,407

   

1,450

 

Loans

1,328

   

1,429

   

1,477

 

Deposits

512

   

446

   

404

 
   

 

  • Average loans decreased $101 million, primarily due to decreases in Commercial Real Estate and Private Banking.
  • Average deposits increased $66 million, primarily due to an increase in Private Banking.
  • The provision for credit losses decreased $6 million, primarily due to decreases in Private Banking and Middle Market.

Conference Call and Webcast

Comerica will host a conference call to review third quarter 2012 financial results at 7 a.m. CT Wednesday, October 17, 2012. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 31764718). 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 October 31, 2012. The conference call replay can be accessed by calling (855) 859-2056 or (404) 537-3406 (event ID No. 31764718). 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

 

Nine Months Ended

 

September 30,

June 30,

September 30,

 

September 30,

(in millions, except per share data)

2012

2012

2011

 

2012

2011

PER COMMON SHARE AND COMMON STOCK DATA

           

Diluted net income

$

0.61

 

$

0.73

 

$

0.51

   

$

2.00

 

$

1.61

 

Cash dividends declared

0.15

 

0.15

 

0.10

   

0.40

 

0.30

 

Common shareholders' equity (at period end)

37.01

 

36.18

 

34.94

       

Tangible common equity (at period end) (a)

33.56

 

32.76

 

31.57

       
             

Average diluted shares (in thousands)

191,492

 

194,487

 

191,634

   

193,991

 

182,602

 

KEY RATIOS

           

Return on average common shareholders' equity

6.67

%

8.22

%

5.91

%

 

7.46

%

6.44

%

Return on average assets

0.74

 

0.93

 

0.67

   

0.84

 

0.71

 

Tier 1 common capital ratio (a) (b)

10.32

 

10.38

 

10.57

       

Tier 1 risk-based capital ratio (b)

10.32

 

10.38

 

10.65

       

Total risk-based capital ratio (b)

13.63

 

13.90

 

14.84

       

Leverage ratio (b)

10.71

 

10.92

 

11.41

       

Tangible common equity ratio (a)

10.25

 

10.27

 

10.43

       

AVERAGE BALANCES

           

Commercial loans

$

26,700

 

$

25,983

 

$

22,127

   

$

25,810

 

$

21,769

 

Real estate construction loans:

           

Commercial Real Estate business line (c)

999

 

1,035

 

1,269

   

1,029

 

1,501

 

Other business lines (d)

390

 

385

 

430

   

391

 

417

 

Total real estate construction loans

1,389

 

1,420

 

1,699

   

1,420

 

1,918

 

Commercial mortgage loans:

           

Commercial Real Estate business line (c)

2,140

 

2,443

 

2,244

   

2,367

 

2,046

 

Other business lines (d)

7,530

 

7,540

 

8,031

   

7,584

 

7,856

 

Total commercial mortgage loans

9,670

 

9,983

 

10,275

   

9,951

 

9,902

 

Lease financing

852

 

869

 

936

   

873

 

960

 

International loans

1,302

 

1,265

 

1,163

   

1,257

 

1,212

 

Residential mortgage loans

1,488

 

1,487

 

1,606

   

1,498

 

1,577

 

Consumer loans

2,196

 

2,221

 

2,292

   

2,225

 

2,272

 

Total loans

43,597

 

43,228

 

40,098

   

43,034

 

39,610

 
             

Earning assets

57,801

 

56,653

 

53,243

   

56,884

 

50,923

 

Total assets

63,276

 

61,950

 

58,238

   

62,284

 

55,526

 

Noninterest-bearing deposits

21,469

 

20,128

 

17,511

   

20,415

 

16,259

 

Interest-bearing deposits

28,388

 

28,551

 

27,587

   

28,538

 

26,149

 

Total deposits

49,857

 

48,679

 

45,098

   

48,953

 

42,408

 
             

Common shareholders' equity

7,045

 

7,002

 

6,633

   

6,996

 

6,150

 

NET INTEREST INCOME

           

Net interest income (fully taxable equivalent basis)

$

428

 

$

435

 

$

424

   

$

1,306

 

$

1,212

 

Fully taxable equivalent adjustment

1

 

 

1

   

2

 

3

 

Net interest margin (fully taxable equivalent basis)

2.96

%

3.10

%

3.18

%

 

3.08

%

3.19

%

CREDIT QUALITY

           

Nonaccrual loans

$

665

 

$

719

 

$

929

       

Reduced-rate loans

27

 

28

 

29

       

Total nonperforming loans (e)

692

 

747

 

958

       

Foreclosed property

63

 

67

 

87

       

Total nonperforming assets (e)

755

 

814

 

1,045

       
             

Loans past due 90 days or more and still accruing

36

 

43

 

81

       
             

Gross loan charge-offs

59

 

64

 

90

   

$

185

 

$

338

 

Loan recoveries

16

 

19

 

13

   

52

 

70

 

Net loan charge-offs

43

 

45

 

77

   

133

 

268

 
             

Allowance for loan losses

647

 

667

 

767

       

Allowance for credit losses on lending-related commitments

35

 

36

 

27

       

Total allowance for credit losses

682

 

703

 

794

       
             

Allowance for loan losses as a percentage of total loans

1.46

%

1.52

%

1.86

%

     

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

0.39

 

0.42

 

0.77

   

0.41

%

0.90

%

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

1.71

 

1.85

 

2.53

       

Allowance for loan losses as a percentage of total nonperforming loans

94

 

89

 

80

       

(a)

See Reconciliation of Non-GAAP Financial Measures.

 

(b)

September 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)

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

 
 
 
 

CONSOLIDATED BALANCE SHEETS

Comerica Incorporated and Subsidiaries

         
 

September 30,

June 30,

December 31,

September 30,

(in millions, except share data)

2012

2012

2011

2011

 

(unaudited)

(unaudited)

 

(unaudited)

ASSETS

       

Cash and due from banks

$

933

 

$

1,076

 

$

982

 

$

981

 
         

Interest-bearing deposits with banks

3,005

 

3,065

 

2,574

 

4,217

 

Other short-term investments

146

 

170

 

149

 

137

 
         

Investment securities available-for-sale

10,569

 

9,940

 

10,104

 

9,732

 
         

Commercial loans

27,460

 

27,016

 

24,996

 

23,113

 

Real estate construction loans

1,392

 

1,377

 

1,533

 

1,648

 

Commercial mortgage loans

9,559

 

9,830

 

10,264

 

10,539

 

Lease financing

837

 

858

 

905

 

927

 

International loans

1,277

 

1,224

 

1,170

 

1,046

 

Residential mortgage loans

1,495

 

1,469

 

1,526

 

1,643

 

Consumer loans

2,174

 

2,218

 

2,285

 

2,309

 

Total loans

44,194

 

43,992

 

42,679

 

41,225

 

Less allowance for loan losses

(647)

 

(667)

 

(726)

 

(767)

 

Net loans

43,547

 

43,325

 

41,953

 

40,458

 
         

Premises and equipment

625

 

667

 

675

 

685

 

Accrued income and other assets

4,489

 

4,407

 

4,571

 

4,678

 

Total assets

$

63,314

 

$

62,650

 

$

61,008

 

$

60,888

 
         

LIABILITIES AND SHAREHOLDERS' EQUITY

       

Noninterest-bearing deposits

$

21,753

 

$

21,330

 

$

19,764

 

$

19,116

 
         

Money market and interest-bearing checking deposits

20,407

 

20,008

 

20,311

 

20,237

 

Savings deposits

1,589

 

1,629

 

1,524

 

1,771

 

Customer certificates of deposit

5,742

 

6,045

 

5,808

 

5,980

 

Other time deposits

 

 

 

45

 

Foreign office time deposits

486

 

376

 

348

 

303

 

Total interest-bearing deposits

28,224

 

28,058

 

27,991

 

28,336

 

Total deposits

49,977

 

49,388

 

47,755

 

47,452

 
         

Short-term borrowings

63

 

83

 

70

 

164

 

Accrued expenses and other liabilities

1,450

 

1,409

 

1,371

 

1,312

 

Medium- and long-term debt

4,740

 

4,742

 

4,944

 

5,009

 

Total liabilities

56,230

 

55,622

 

54,140

 

53,937

 
         

Common stock - $5 par value:

       

Authorized - 325,000,000 shares

       

Issued - 228,164,824 shares

1,141

 

1,141

 

1,141

 

1,141

 

Capital surplus

2,153

 

2,144

 

2,170

 

2,162

 

Accumulated other comprehensive loss

(253)

 

(301)

 

(356)

 

(230)

 

Retained earnings

5,831

 

5,744

 

5,546

 

5,471

 

Less cost of common stock in treasury - 36,790,174 shares at 9/30/12, 33,889,392 shares at 6/30/12, 30,831,076 shares at 12/31/11 and 29,238,425 shares at 9/30/11

(1,788)

 

(1,700)

 

(1,633)

 

(1,593)

 

Total shareholders' equity

7,084

 

7,028

 

6,868

 

6,951

 

Total liabilities and shareholders' equity

$

63,314

 

$

62,650

 

$

61,008

 

$

60,888

 
 
                           
                           
 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries

           
 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

(in millions, except per share data)

2012

2011

 

2012

2011

INTEREST INCOME

         

Interest and fees on loans

$

400

 

$

405

   

$

1,219

 

$

1,149

 

Interest on investment securities

57

 

54

   

179

 

170

 

Interest on short-term investments

3

 

4

   

9

 

9

 

Total interest income

460

 

463

   

1,407

 

1,328

 

INTEREST EXPENSE

         

Interest on deposits

17

 

24

   

54

 

69

 

Interest on medium- and long-term debt

16

 

16

   

49

 

50

 

Total interest expense

33

 

40

   

103

 

119

 

Net interest income

427

 

423

   

1,304

 

1,209

 

Provision for credit losses

22

 

35

   

63

 

126

 

Net interest income after provision for credit losses

405

 

388

   

1,241

 

1,083

 

NONINTEREST INCOME

         

Service charges on deposit accounts

53

 

53

   

162

 

156

 

Fiduciary income

39

 

37

   

116

 

115

 

Commercial lending fees

22

 

22

   

71

 

64

 

Letter of credit fees

19

 

19

   

54

 

55

 

Card fees

12

 

17

   

35

 

47

 

Foreign exchange income

9

 

11

   

29

 

30

 

Bank-owned life insurance

10

 

10

   

30

 

27

 

Brokerage fees

5

 

5

   

14

 

17

 

Net securities gains

 

12

   

11

 

18

 

Other noninterest income

28

 

15

   

92

 

81

 

Total noninterest income

197

 

201

   

614

 

610

 

NONINTEREST EXPENSES

         

Salaries

192

 

192

   

582

 

565

 

Employee benefits

61

 

53

   

181

 

153

 

Total salaries and employee benefits

253

 

245

   

763

 

718

 

Net occupancy expense

40

 

44

   

121

 

122

 

Equipment expense

17

 

17

   

50

 

49

 

Outside processing fee expense

27

 

25

   

79

 

74

 

Software expense

23

 

22

   

67

 

65

 

Merger and restructuring charges

25

 

33

   

33

 

38

 

FDIC insurance expense

9

 

8

   

29

 

35

 

Advertising expense

7

 

7

   

21

 

21

 

Other real estate expense

2

 

5

   

6

 

19

 

Other noninterest expenses

46

 

57

   

161

 

151

 

Total noninterest expenses

449

 

463

   

1,330

 

1,292

 

Income before income taxes

153

 

126

   

525

 

401

 

Provision for income taxes

36

 

28

   

134

 

104

 

NET INCOME

117

 

98

   

391

 

297

 

Less income allocated to participating securities

1

 

1

   

4

 

3

 

Net income attributable to common shares

$

116

 

$

97

   

$

387

 

$

294

 

Earnings per common share:

         

Basic

$

0.61

 

$

0.51

   

$

2.00

 

$

1.63

 

Diluted

0.61

 

0.51

   

2.00

 

1.61

 
           

Comprehensive income

165

 

176

   

494

 

456

 
           

Cash dividends declared on common stock

29

 

20

   

78

 

55

 

Cash dividends declared per common share

0.15

 

0.10

   

0.40

 

0.30

 
 
                                                       
 
 

CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries

                       
 

Third

Second

First

Fourth

Third

 

Third Quarter 2012 Compared To:

 

Quarter

Quarter

Quarter

Quarter

Quarter

 

Second Quarter 2012

 

Third Quarter 2011

(in millions, except per share data)

2012

2012

2012

2011

2011

 

Amount

Percent

 

Amount

Percent

INTEREST INCOME

                     

Interest and fees on loans

$

400

 

$

408

 

$

411

 

$

415

 

$

405

   

$

(8)

 

(2)

%

 

$

(5)

 

(1)

%

Interest on investment securities

57

 

59

 

63

 

63

 

54

   

(2)

 

(4)

   

3

 

4

 

Interest on short-term investments

3

 

3

 

3

 

3

 

4

   

 

   

(1)

 

(5)

 

Total interest income

460

 

470

 

477

 

481

 

463

   

(10)

 

(2)

   

(3)

 

(1)

 

INTEREST EXPENSE

                     

Interest on deposits

17

 

18

 

19

 

21

 

24

   

(1)

 

(4)

   

(7)

 

(26)

 

Interest on medium- and long-term debt

16

 

17

 

16

 

16

 

16

   

(1)

 

(5)

   

 

 

Total interest expense

33

 

35

 

35

 

37

 

40

   

(2)

 

(5)

   

(7)

 

(15)

 

Net interest income

427

 

435

 

442

 

444

 

423

   

(8)

 

(2)

   

4

 

1

 

Provision for credit losses

22

 

19

 

22

 

18

 

35

   

3

 

14

   

(13)

 

(38)

 

Net interest income after provision

for credit losses

405

 

416

 

420

 

426

 

388

   

(11)

 

(2)

   

17

 

4

 

NONINTEREST INCOME

                     

Service charges on deposit accounts

53

 

53

 

56

 

52

 

53

   

 

   

 

 

Fiduciary income

39

 

39

 

38

 

36

 

37

   

 

   

2

 

7

 

Commercial lending fees

22

 

24

 

25

 

23

 

22

   

(2)

 

(10)

   

 

 

Letter of credit fees

19

 

18

 

17

 

18

 

19

   

1

 

8

   

 

 

Card fees

12

 

12

 

11

 

11

 

17

   

 

   

(5)

 

(30)

 

Foreign exchange income

9

 

10

 

10

 

10

 

11

   

(1)

 

(3)

   

(2)

 

(15)

 

Bank-owned life insurance

10

 

10

 

10

 

10

 

10

   

 

   

 

 

Brokerage fees

5

 

4

 

5

 

5

 

5

   

1

 

2

   

 

 

Net securities gains (losses)

 

6

 

5

 

(4)

 

12

   

(6)

 

N/M

 

(12)

 

N/M

Other noninterest income

28

 

35

 

29

 

21

 

15

   

(7)

 

(18)

   

13

 

89

 

Total noninterest income

197

 

211

 

206

 

182

 

201

   

(14)

 

(7)

   

(4)

 

(2)

 

NONINTEREST EXPENSES

                     

Salaries

192

 

189

 

201

 

205

 

192

   

3

 

1

   

 

 

Employee benefits

61

 

61

 

59

 

52

 

53

   

 

   

8

 

16

 

Total salaries and employee benefits

253

 

250

 

260

 

257

 

245

   

3

 

1

   

8

 

3

 

Net occupancy expense

40

 

40

 

41

 

47

 

44

   

 

   

(4)

 

(7)

 

Equipment expense

17

 

16

 

17

 

17

 

17

   

1

 

2

   

 

 

Outside processing fee expense

27

 

26

 

26

 

27

 

25

   

1

 

   

2

 

4

 

Software expense

23

 

21

 

23

 

23

 

22

   

2

 

6

   

1

 

5

 

Merger and restructuring charges

25

 

8

 

 

37

 

33

   

17

 

N/M

 

(8)

 

(22)

 

FDIC insurance expense

9

 

10

 

10

 

8

 

8

   

(1)

 

   

1

 

28

 

Advertising expense

7

 

7

 

7

 

7

 

7

   

 

   

 

 

Other real estate expense

2

 

 

4

 

3

 

5

   

2

 

N/M

 

(3)

 

(65)

 

Other noninterest expenses

46

 

55

 

60

 

53

 

57

   

(9)

 

(15)

   

(11)

 

(21)

 

Total noninterest expenses

449

 

433

 

448

 

479

 

463

   

16

 

4

   

(14)

 

(3)

 

Income before income taxes

153

 

194

 

178

 

129

 

126

   

(41)

 

(21)

   

27

 

23

 

Provision for income taxes

36

 

50

 

48

 

33

 

28

   

(14)

 

(27)

   

8

 

33

 

NET INCOME

117

 

144

 

130

 

96

 

98

   

(27)

 

(18)

   

19

 

20

 

Less income allocated to participating securities

1

 

2

 

1

 

1

 

1

   

(1)

 

(12)

   

 

 

Net income attributable to common shares

$

116

 

$

142

 

$

129

 

$

95

 

$

97

   

$

(26)

 

(18)

%

 

$

19

 

20

%

Earnings per common share:

                     

Basic

$

0.61

 

$

0.73

 

$

0.66

 

$

0.48

 

$

0.51

   

$

(0.12)

 

(16)

%

 

$

0.10

 

20

%

Diluted

0.61

 

0.73

 

0.66

 

0.48

 

0.51

   

(0.12)

 

(16)

   

0.10

 

20

 
                       

Comprehensive income (loss)

165

 

169

 

160

 

(30)

 

176

   

(4)

 

(2)

   

(11)

 

(6)

 
                       

Cash dividends declared on common stock

29

 

29

 

20

 

20

 

20

   

 

   

9

 

45

 

Cash dividends declared per common share

0.15

 

0.15

 

0.10

 

0.10

 

0.10

   

 

   

0.05

 

50

 

N/M - Not Meaningful

 
                                 
 
 

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)

Comerica Incorporated and Subsidiaries

             
 

2012

 

2011

(in millions)

3rd Qtr

2nd Qtr

1st Qtr

 

4th Qtr

3rd Qtr

             

Balance at beginning of period

$

667

 

$

704

 

$

726

   

$

767

 

$

806

 
             

Loan charge-offs:

           

Commercial

19

 

26

 

25

   

28

 

33

 

Real estate construction:

           

Commercial Real Estate business line (a)

2

 

2

 

2

   

4

 

11

 

Other business lines (b)

 

1

 

   

1

 

 

Total real estate construction

2

 

3

 

2

   

5

 

11

 

Commercial mortgage:

           

Commercial Real Estate business line (a)

12

 

16

 

13

   

17

 

12

 

Other business lines (b)

13

 

11

 

13

   

24

 

21

 

Total commercial mortgage

25

 

27

 

26

   

41

 

33

 

International

1

 

 

2

   

2

 

 

Residential mortgage

6

 

3

 

2

   

2

 

4

 

Consumer

6

 

5

 

5

   

7

 

9

 

Total loan charge-offs

59

 

64

 

62

   

85

 

90

 
             

Recoveries on loans previously charged-off:

           

Commercial

7

 

10

 

9

   

11

 

5

 

Real estate construction

3

 

1

 

1

   

4

 

3

 

Commercial mortgage

5

 

4

 

3

   

9

 

3

 

International

 

 

1

   

 

 

Residential mortgage

 

 

1

   

 

1

 

Consumer

1

 

4

 

2

   

1

 

1

 

Total recoveries

16

 

19

 

17

   

25

 

13

 

Net loan charge-offs

43

 

45

 

45

   

60

 

77

 

Provision for loan losses

23

 

8

 

23

   

19

 

38

 

Balance at end of period

$

647

 

$

667

 

$

704

   

$

726

 

$

767

 
             

Allowance for loan losses as a percentage of total loans

1.46

%

1.52

%

1.64

%

 

1.70

%

1.86

%

             

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

0.39

 

0.42

 

0.43

   

0.57

 

0.77

 

(a)

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

(b)

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

 
 
 
                                 

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

Comerica Incorporated and Subsidiaries

             
 

2012

 

2011

(in millions)

3rd Qtr

2nd Qtr

1st Qtr

 

4th Qtr

3rd Qtr

             

Balance at beginning of period

$

36

 

$

25

 

$

26

   

$

27

 

$

30

 

Add: Provision for credit losses on lending-related commitments

(1)

 

11

 

(1)

   

(1)

 

(3)

 

Balance at end of period

$

35

 

$

36

 

$

25

   

$

26

 

$

27

 
             

Unfunded lending-related commitments sold

$

 

$

 

$

   

$

 

$

 
 
                                 
 
 

NONPERFORMING ASSETS (unaudited)

Comerica Incorporated and Subsidiaries

             
 

2012

 

2011

(in millions)

3rd Qtr

2nd Qtr

1st Qtr

 

4th Qtr

3rd Qtr

             

SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS

         

Nonaccrual loans:

           

Business loans:

           

Commercial

$

154

 

$

175

 

$

205

   

$

237

 

$

258

 

Real estate construction:

           

Commercial Real Estate business line (a)

45

 

60

 

77

   

93

 

109

 

Other business lines (b)

6

 

9

 

8

   

8

 

3

 

Total real estate construction

51

 

69

 

85

   

101

 

112

 

Commercial mortgage:

           

Commercial Real Estate business line (a)

137

 

155

 

174

   

159

 

198

 

Other business lines (b)

219

 

220

 

275

   

268

 

275

 

Total commercial mortgage

356

 

375

 

449

   

427

 

473

 

Lease financing

3

 

4

 

4

   

5

 

5

 

International

 

 

4

   

8

 

7

 

Total nonaccrual business loans

564

 

623

 

747

   

778

 

855

 

Retail loans:

           

Residential mortgage

69

 

76

 

69

   

71

 

65

 

Consumer:

           

Home equity

28

 

16

 

9

   

5

 

4

 

Other consumer

4

 

4

 

5

   

6

 

5

 

Total consumer

32

 

20

 

14

   

11

 

9

 

Total nonaccrual retail loans

101

 

96

 

83

   

82

 

74

 

Total nonaccrual loans

665

 

719

 

830

   

860

 

929

 

Reduced-rate loans

27

 

28

 

26

   

27

 

29

 

Total nonperforming loans (c)

692

 

747

 

856

   

887

 

958

 

Foreclosed property

63

 

67

 

67

   

94

 

87

 

Total nonperforming assets (c)

$

755

 

$

814

 

$

923

   

$

981

 

$

1,045

 
             

Nonperforming loans as a percentage of total loans

1.57

%

1.70

%

1.99

%

 

2.08

%

2.32

%

Nonperforming assets as a percentage of total loans

and foreclosed property

1.71

 

1.85

 

2.14

   

2.29

 

2.53

 

Allowance for loan losses as a percentage of total

nonperforming loans

94

 

89

 

82

   

82

 

80

 

Loans past due 90 days or more and still accruing

$

36

 

$

43

 

$

50

   

$

58

 

$

81

 
             

ANALYSIS OF NONACCRUAL LOANS

           

Nonaccrual loans at beginning of period

$

719

 

$

830

 

$

860

   

$

929

 

$

941

 

Loans transferred to nonaccrual (d)

35

 

47

 

69

   

99

 

130

 

Nonaccrual business loan gross charge-offs (e)

(46)

 

(56)

 

(55)

   

(76)

 

(76)

 

Loans transferred to accrual status (d)

 

(41)

 

   

 

(15)

 

Nonaccrual business loans sold (f)

(20)

 

(16)

 

(7)

   

(19)

 

(15)

 

Payments/Other (g)

(23)

 

(45)

 

(37)

   

(73)

 

(36)

 

Nonaccrual loans at end of period

$

665

 

$

719

 

$

830

   

$

860

 

$

929

 

(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

$

46

 

$

56

 

$

55

   

$

76

 

$

76

 

Performing watch list loans

1

 

 

   

 

1

 

Consumer and residential mortgage loans

12

 

8

 

7

   

9

 

13

 

Total gross loan charge-offs

$

59

 

$

64

 

$

62

   

$

85

 

$

90

 

(f) Analysis of loans sold:

           

Nonaccrual business loans

$

20

 

$

16

 

$

7

   

$

19

 

$

15

 

Performing watch list loans

42

 

7

 

11

   

 

16

 

Total loans sold

$

62

 

$

23

 

$

18

   

$

19

 

$

31

 

(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

               
 

Nine Months Ended

 

September 30, 2012

 

September 30, 2011

 

Average

 

Average

 

Average

 

Average

(dollar amounts in millions)

Balance

Interest

Rate

 

Balance

Interest

Rate

               

Commercial loans

$

25,810

 

$

673

 

3.48

%

 

$

21,769

 

$

604

 

3.70

%

Real estate construction loans

1,420

 

47

 

4.48

   

1,918

 

59

 

4.12

 

Commercial mortgage loans

9,951

 

337

 

4.51

   

9,902

 

306

 

4.12

 

Lease financing

873

 

19

 

2.92

   

960

 

25

 

3.53

 

International loans

1,257

 

35

 

3.73

   

1,212

 

35

 

3.89

 

Residential mortgage loans

1,498

 

52

 

4.66

   

1,577

 

63

 

5.34

 

Consumer loans

2,225

 

57

 

3.44

   

2,272

 

59

 

3.47

 

Total loans (a)

43,034

 

1,220

 

3.79

   

39,610

 

1,151

 

3.88

 
               

Auction-rate securities available-for-sale

294

 

2

 

0.78

   

497

 

3

 

0.75

 

Other investment securities available-for-sale

9,509

 

178

 

2.57

   

7,131

 

168

 

3.20

 

Total investment securities available-for-sale

9,803

 

180

 

2.51

   

7,628

 

171

 

3.03

 
               

Interest-bearing deposits with banks (b)

3,909

 

8

 

0.26

   

3,557

 

7

 

0.24

 

Other short-term investments

138

 

1

 

1.80

   

128

 

2

 

2.14

 

Total earning assets

56,884

 

1,409

 

3.32

   

50,923

 

1,331

 

3.50

 
               

Cash and due from banks

967

       

908

     

Allowance for loan losses

(707)

       

(860)

     

Accrued income and other assets

5,140

       

4,555

     

Total assets

$

62,284

       

$

55,526

     
               

Money market and interest-bearing checking deposits

$

20,583

 

26

 

0.18

   

$

18,539

 

36

 

0.26

 

Savings deposits

1,589

 

1

 

0.06

   

1,516

 

1

 

0.11

 

Customer certificates of deposit

5,993

 

25

 

0.54

   

5,666

 

30

 

0.70

 

Foreign office and other time deposits

373

 

2

 

0.64

   

428

 

2

 

0.50

 

Total interest-bearing deposits

28,538

 

54

 

0.25

   

26,149

 

69

 

0.35

 
               

Short-term borrowings

78

 

 

0.12

   

137

 

 

0.15

 

Medium- and long-term debt

4,846

 

49

 

1.36

   

5,702

 

50

 

1.17

 

Total interest-bearing sources

33,462

 

103

 

0.41

   

31,988

 

119

 

0.50

 
               

Noninterest-bearing deposits

20,415

       

16,259

     

Accrued expenses and other liabilities

1,411

       

1,129

     

Total shareholders' equity

6,996

       

6,150

     

Total liabilities and shareholders' equity

$

62,284

       

$

55,526

     
               

Net interest income/rate spread (FTE)

 

$

1,306

 

2.91

     

$

1,212

 

3.00

 
               

FTE adjustment

 

$

2

       

$

3

   
               

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)

   

3.08

%

     

3.19

%

(a)  

Accretion of the purchase discount on the acquired loan portfolio of $58 million and $27 million in the nine months ended September 30, 2012 and 2011, respectively, increased the net interest margin by 14 basis points and 7 basis points in the nine months ended September 30, 2012 and 2011, respectively.

(b)   

Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 20 basis points and 22 basis points in the nine months ended September 30, 2012 and 2011, respectively.

 
                                                     
 
 

ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)

Comerica Incorporated and Subsidiaries

                       
 

Three Months Ended

 

September 30, 2012

 

June 30, 2012

 

September 30, 2011

 

Average

 

Average

 

Average

 

Average

 

Average

 

Average

(dollar amounts in millions)

Balance

Interest

Rate

 

Balance

Interest

Rate

 

Balance

Interest

Rate

                       

Commercial loans

$

26,700

 

$

227

 

3.38

%

 

$

25,983

 

$

227

 

3.52

%

 

$

22,127

 

$

207

 

3.70

%

Real estate construction loans

1,389

 

15

 

4.36

   

1,420

 

15

 

4.50

   

1,699

 

23

 

5.28

 

Commercial mortgage loans

9,670

 

106

 

4.34

   

9,983

 

112

 

4.46

   

10,275

 

115

 

4.42

 

Lease financing

852

 

4

 

2.04

   

869

 

7

 

3.28

   

936

 

8

 

3.46

 

International loans

1,302

 

12

 

3.77

   

1,265

 

12

 

3.66

   

1,163

 

11

 

4.01

 

Residential mortgage loans

1,488

 

17

 

4.67

   

1,487

 

17

 

4.53

   

1,606

 

21

 

5.30

 

Consumer loans

2,196

 

19

 

3.44

   

2,221

 

18

 

3.37

   

2,292

 

20

 

3.56

 

Total loans (a)

43,597

 

400

 

3.66

   

43,228

 

408

 

3.79

   

40,098

 

405

 

4.01

 
                       

Auction-rate securities available-for-sale

234

 

1

 

0.97

   

296

 

 

0.82

   

437

 

1

 

0.63

 

Other investment securities available-for-sale

9,557

 

57

 

2.42

   

9,432

 

59

 

2.55

   

7,721

 

54

 

2.87

 

Total investment securities available-for-sale

9,791

 

58

 

2.38

   

9,728

 

59

 

2.49

   

8,158

 

55

 

2.74

 
                       

Interest-bearing deposits with banks (b)

4,276

 

3

 

0.26

   

3,556

 

3

 

0.26

   

4,851

 

3

 

0.23

 

Other short-term investments

137

 

 

1.88

   

141

 

 

1.55

   

136

 

1

 

2.30

 

Total earning assets

57,801

 

461

 

3.19

   

56,653

 

470

 

3.35

   

53,243

 

464

 

3.47

 
                       

Cash and due from banks

971

       

931

       

969

     

Allowance for loan losses

(673)

       

(710)

       

(814)

     

Accrued income and other assets

5,177

       

5,076

       

4,840

     

Total assets

$

63,276

       

$

61,950

       

$

58,238

     
                       

Money market and interest-bearing checking deposits

$

20,495

 

8

 

0.17

   

$

20,458

 

8

 

0.18

   

$

19,595

 

13

 

0.25

 

Savings deposits

1,618

 

 

0.04

   

1,607

 

1

 

0.07

   

1,659

 

 

0.14

 

Customer certificates of deposit

5,894

 

8

 

0.52

   

6,107

 

9

 

0.53

   

5,878

 

10

 

0.66

 

Foreign office and other time deposits

381

 

1

 

0.71

   

379

 

 

0.64

   

455

 

1

 

0.49

 

Total interest-bearing deposits

28,388

 

17

 

0.24

   

28,551

 

18

 

0.25

   

27,587

 

24

 

0.33

 
                       

Short-term borrowings

89

 

 

0.12

   

68

 

 

0.12

   

204

 

 

0.08

 

Medium- and long-term debt

4,745

 

16

 

1.35

   

4,854

 

17

 

1.40

   

5,168

 

16

 

1.23

 

Total interest-bearing sources

33,222

 

33

 

0.40

   

33,473

 

35

 

0.42

   

32,959

 

40

 

0.47

 
                       

Noninterest-bearing deposits

21,469

       

20,128

       

17,511

     

Accrued expenses and other liabilities

1,540

       

1,347

       

1,135

     

Total shareholders' equity

7,045

       

7,002

       

6,633

     

Total liabilities and shareholders' equity

$

63,276

       

$

61,950

       

$

58,238

     
                       

Net interest income/rate spread (FTE)

 

$

428

 

2.79

     

$

435

 

2.93

     

$

424

 

3.00

 
                       

FTE adjustment

 

$

1

       

$

       

$

1

   
                       

Impact of net noninterest-bearing sources of funds

   

0.17

       

0.17

       

0.18

 

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

   

2.96

%

     

3.10

%

     

3.18

%

(a)  

Accretion of the purchase discount on the acquired loan portfolio of $15 million, $18 million and $27 million in the third and second quarters of 2012 and the third quarter of 2011, respectively, increased the net interest margin by 10 basis points, 13 basis points and 20 basis points in the third and second quarters of 2012 and the third quarter of 2011, respectively.

(b)   

Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 21 basis points and by 18 basis points in the third and second quarters of 2012, respectively, and by 29 basis points in the third quarter of 2011.

 
                               
 
 

CONSOLIDATED STATISTICAL DATA (unaudited)

Comerica Incorporated and Subsidiaries

           
 

September 30,

June 30,

March 31,

December 31,

September 30,

(in millions, except per share data)

2012

2012

2012

2011

2011

           

Commercial loans:

         

Floor plan

$

2,276

 

$

2,406

 

$

2,152

 

$

1,822

 

$

1,209

 

Other

25,184

 

24,610

 

23,488

 

23,174

 

21,904

 

Total commercial loans

27,460

 

27,016

 

25,640

 

24,996

 

23,113

 

Real estate construction loans:

         

Commercial Real Estate business line (a)

1,003

 

991

 

1,055

 

1,103

 

1,226

 

Other business lines (b)

389

 

386

 

387

 

430

 

422

 

Total real estate construction loans

1,392

 

1,377

 

1,442

 

1,533

 

1,648

 

Commercial mortgage loans:

         

Commercial Real Estate business line (a)

2,020

 

2,315

 

2,501

 

2,507

 

2,602

 

Other business lines (b)

7,539

 

7,515

 

7,578

 

7,757

 

7,937

 

Total commercial mortgage loans

9,559

 

9,830

 

10,079

 

10,264

 

10,539

 

Lease financing

837

 

858

 

872

 

905

 

927

 

International loans

1,277

 

1,224

 

1,256

 

1,170

 

1,046

 

Residential mortgage loans

1,495

 

1,469

 

1,485

 

1,526

 

1,643

 

Consumer loans:

         

Home equity

1,570

 

1,584

 

1,612

 

1,655

 

1,683

 

Other consumer

604

 

634

 

626

 

630

 

626

 

Total consumer loans

2,174

 

2,218

 

2,238

 

2,285

 

2,309

 

Total loans

$

44,194

 

$

43,992

 

$

43,012

 

$

42,679

 

$

41,225

 
           

Goodwill

$

635

 

$

635

 

$

635

 

$

635

 

$

635

 

Core deposit intangible

23

 

25

 

27

 

29

 

32

 

Loan servicing rights

2

 

3

 

3

 

3

 

3

 
           

Tier 1 common capital ratio (c) (d)

10.32

%

10.38

%

10.27

%

10.37

%

10.57

%

Tier 1 risk-based capital ratio (d)

10.32

 

10.38

 

10.27

 

10.41

 

10.65

 

Total risk-based capital ratio (d)

13.63

 

13.90

 

13.99

 

14.25

 

14.84

 

Leverage ratio (d)

10.71

 

10.92

 

10.94

 

10.92

 

11.41

 

Tangible common equity ratio (c)

10.25

 

10.27

 

10.21

 

10.27

 

10.43

 
           

Common shareholders' equity per share of common stock

$

37.01

 

$

36.18

 

$

35.44

 

$

34.80

 

$

34.94

 

Tangible common equity per share of common stock (c)

33.56

 

32.76

 

32.06

 

31.42

 

31.57

 

Market value per share for the quarter:

         

High

33.38

 

32.88

 

34.00

 

27.37

 

35.79

 

Low

29.32

 

27.88

 

26.25

 

21.53

 

21.48

 

Close

31.05

 

30.71

 

32.36

 

25.80

 

22.97

 
           

Quarterly ratios:

         

Return on average common shareholders' equity

6.67

%

8.22

%

7.50

%

5.51

%

5.91

%

Return on average assets

0.74

 

0.93

 

0.84

 

0.63

 

0.67

 

Efficiency ratio

71.68

 

67.53

 

69.70

 

75.97

 

75.59

 
           

Number of banking centers

490

 

493

 

495

 

494

 

502

 
           

Number of employees - full time equivalent

9,008

 

9,014

 

9,195

 

9,397

 

9,701

 

(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)

September 30, 2012 ratios are estimated.

 
                   
 
 

PARENT COMPANY ONLY BALANCE SHEETS (unaudited)

Comerica Incorporated

       
 

September 30,

December 31,

September 30,

(in millions, except share data)

2012

2011

2011

       

ASSETS

     

Cash and due from subsidiary bank

$

13

 

$

7

 

3

 

Short-term investments with subsidiary bank

418

 

411

 

440

 

Other short-term investments

88

 

90

 

86

 

Investment in subsidiaries, principally banks

7,200

 

7,011

 

7,098

 

Premises and equipment

4

 

4

 

3

 

Other assets

150

 

177

 

189

 

    Total assets

$

7,873

 

$

7,700

 

$

7,819

 
       

LIABILITIES AND SHAREHOLDERS' EQUITY

     

Medium- and long-term debt

$

632

 

$

666

 

$

722

 

Other liabilities

157

 

166

 

146

 

    Total liabilities

789

 

832

 

868

 
       

Common stock - $5 par value:

     

Authorized - 325,000,000 shares

     

Issued - 228,164,824 shares

1,141

 

1,141

 

1,141

 

Capital surplus

2,153

 

2,170

 

2,162

 

Accumulated other comprehensive loss

(253)

 

(356)

 

(230)

 

Retained earnings

5,831

 

5,546

 

5,471

 

Less cost of common stock in treasury - 36,790,174 shares at 9/30/12, 30,831,076 shares at 12/31/11, and 29,238,425 shares at 9/30/11

(1,788)

 

(1,633)

 

(1,593)

 

    Total shareholders' equity

7,084

 

6,868

 

6,951

 

    Total liabilities and shareholders' equity

$

7,873

 

$

7,700

 

$

7,819

 
 
                                         
 
 

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

 

 

 

 

297

 

 

297

 

Other comprehensive income, net of tax

 

 

 

159

 

 

 

159

 

Cash dividends declared on common stock ($0.30 per share)

 

 

 

 

(55)

 

 

(55)

 

Purchase of common stock

(2.7)

 

 

 

 

 

(75)

 

(75)

 

Acquisition of Sterling Bancshares, Inc.

24.3

 

122

 

681

 

 

 

 

803

 

Net issuance of common stock under employee stock plans

0.8

 

 

(29)

 

 

(18)

 

47

 

 

Share-based compensation

 

 

29

 

 

 

 

29

 

BALANCE AT SEPTEMBER 30, 2011

198.9

 

$

1,141

 

$

2,162

 

$

(230)

 

$

5,471

 

$

(1,593)

 

$

6,951

 
               

BALANCE AT DECEMBER 31, 2011

197.3

 

$

1,141

 

$

2,170

 

$

(356)

 

$

5,546

 

$

(1,633)

 

$

6,868

 

Net income

 

 

 

 

391

 

 

391

 

Other comprehensive income, net of tax

 

 

 

103

 

 

 

103

 

Cash dividends declared on common stock ($0.40 per share)

 

 

 

 

(78)

 

 

(78)

 

Purchase of common stock

(7.1)

 

 

 

 

 

(215)

 

(215)

 

Net issuance of common stock under employee stock plans

1.2

 

 

(48)

 

 

(28)

 

62

 

(14)

 

Share-based compensation

 

 

29

 

 

 

 

29

 

Other

 

 

2

 

 

 

(2)

 

 

BALANCE AT SEPTEMBER 30, 2012

191.4

 

$

1,141

 

$

2,153

 

$

(253)

 

$

5,831

 

$

(1,788)

 

$

7,084

 
 
                                               
 
 

BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)

Comerica Incorporated and Subsidiaries

                       
                       

(dollar amounts in millions)

Business

 

Retail

 

Wealth

           

Three Months Ended September 30, 2012

Bank

 

Bank

 

Management

 

Finance

 

Other

 

Total

Earnings summary:

                     

Net interest income (expense) (FTE)

$

386

   

$

161

   

$

47

   

$

(176)

   

$

10

   

$

428

 

Provision for credit losses

15

   

6

   

3

   

   

(2)

   

22

 

Noninterest income

76

   

41

   

62

   

14

   

4

   

197

 

Noninterest expenses

144

   

181

   

78

   

3

   

43

   

449

 

Provision (benefit) for income taxes (FTE)

92

   

5

   

10

   

(62)

   

(8)

   

37

 

Net income (loss)

$

211

   

$

10

   

$

18

   

$

(103)

   

$

(19)

   

$

117

 

Net credit-related charge-offs

$

27

   

$

13

   

$

3

   

   

   

$

43

 
                       

Selected average balances:

                     

Assets

$

34,863

   

$

5,964

   

$

4,566

   

$

12,166

   

$

5,717

   

$

63,276

 

Loans

33,856

   

5,265

   

4,476

   

   

   

43,597

 

Deposits

25,142

   

20,682

   

3,667

   

193

   

173

   

49,857

 
                       

Statistical data:

                     

Return on average assets (a)

2.42

%

 

0.18

%

 

1.61

%

 

N/M

   

N/M

   

0.74

%

Efficiency ratio

31.23

   

89.39

   

71.14

   

N/M

   

N/M

   

71.68

 
                       
 

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 September 30, 2011

Bank

 

Bank

 

Management

 

Finance

 

Other

 

Total

Earnings summary:

                     

Net interest income (expense) (FTE)

$

363

   

$

173

   

$

45

   

$

(168)

   

11

   

$

424

 

Provision for credit losses

18

   

16

   

7

   

   

(6)

   

35

 

Noninterest income

77

   

47

   

56

   

26

   

(5)

   

201

 

Noninterest expenses

164

   

175

   

77

   

3

   

44

   

463

 

Provision (benefit) for income taxes (FTE)

79

   

10

   

6

   

(54)

   

(12)

   

29

 

Net income (loss)

$

179

   

$

19

   

$

11

   

$

(91)

   

$

(20)

   

$

98

 

Net credit-related charge-offs

$

40

   

$

28

   

$

9

   

   

   

$

77

 
                       

Selected average balances:

                     

Assets

$

30,608

   

$

5,985

   

$

4,674

   

$

10,210

   

$

6,761

   

$

58,238

 

Loans

29,957

   

5,483

   

4,658

   

   

   

40,098

 

Deposits

21,759

   

19,792

   

3,198

   

236

   

113

   

45,098

 
                       

Statistical data:

                     

Return on average assets (a)

2.33

%

 

0.38

%

 

0.95

%

 

N/M

   

N/M

   

0.67

%

Efficiency ratio

37.38

   

79.17

   

78.06

   

N/M

   

N/M

   

75.59

 
     

(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 September 30, 2012

Midwest

 

Western

 

Texas

 

Florida

 

Markets

 

International

 

& Other

 

Total

Earnings summary:

                             

Net interest income (expense) (FTE)

$

194

   

$

181

   

$

139

   

$

10

   

$

51

   

$

19

   

$

(166)

   

$

428

 

Provision for credit losses

2

   

   

10

   

5

   

6

   

1

   

(2)

   

22

 

Noninterest income

95

   

34

   

30

   

3

   

7

   

10

   

18

   

197

 

Noninterest expenses

175

   

105

   

89

   

10

   

16

   

8

   

46

   

449

 

Provision (benefit) for income taxes (FTE)

41

   

40

   

25

   

(1)

   

(5)

   

7

   

(70)

   

37

 

Net income (loss)

$

71

   

$

70

   

$

45

   

$

(1)

   

$

41

   

$

13

   

$

(122)

   

$

117

 

Net credit-related charge-offs

$

12

   

$

10

   

$

7

   

$

9

   

$

4

   

1

   

   

$

43

 
                               

Selected average balances:

                             

Assets

$

13,784

   

$

13,442

   

$

10,327

   

$

1,309

   

$

4,621

   

$

1,910

   

$

17,883

   

$

63,276

 

Loans

13,468

   

13,163

   

9,585

   

1,328

   

4,266

   

1,787

   

   

43,597

 

Deposits

19,628

   

15,192

   

9,941

   

512

   

2,823

   

1,395

   

366

   

49,857

 
                               

Statistical data:

                             

Return on average assets (a)

1.38

%

 

1.74

%

 

1.61

%

 

(0.29)

%

 

3.54

%

 

2.65

%

 

N/M

   

0.74

%

Efficiency ratio

60.40

   

48.63

   

52.50

   

76.90

   

27.38

   

28.28

   

N/M

   

71.68

 
                               
                 

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 September 30, 2011

Midwest

 

Western

 

Texas

 

Florida

 

Markets

 

International

 

& Other

 

Total

Earnings summary:

                             

Net interest income (expense) (FTE)

$

199

   

$

166

   

$

143

   

$

11

   

$

41

   

$

21

   

$

(157)

   

$

424

 

Provision for credit losses

20

   

13

   

(8)

   

2

   

12

   

2

   

(6)

   

35

 

Noninterest income

96

   

32

   

29

   

4

   

10

   

9

   

21

   

201

 

Noninterest expenses

183

   

106

   

81

   

11

   

25

   

10

   

47

   

463

 

Provision (benefit) for income taxes (FTE)

32

   

29

   

35

   

1

   

(8)

   

6

   

(66)

   

29

 

Net income (loss)

$

60

   

$

50

   

$

64

   

$

1

   

$

22

   

$

12

   

$

(111)

   

$

98

 

Net credit-related charge-offs

$

33

   

$

32

   

$

2

   

$

5

   

$

5

   

$

   

   

$

77

 
                               

Selected average balances:

                             

Assets

$

14,118

   

$

12,110

   

$

8,510

   

$

1,450

   

$

3,374

   

$

1,705

   

$

16,971

   

$

58,238

 

Loans

13,873

   

11,889

   

8,145

   

1,477

   

3,082

   

1,632

   

   

40,098

 

Deposits

18,510

   

12,975

   

8,865

   

404

   

2,392

   

1,603

   

349

   

45,098

 
                               

Statistical data:

                             

Return on average assets (a)

1.22

%

 

1.42

%

 

2.66

%

 

0.29

%

 

2.66

%

 

2.76

%

 

N/M

   

0.67

%

Efficiency ratio

62.08

   

53.68

   

46.83

   

78.39

   

50.21

   

31.22

   

N/M

   

75.59

 

(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

           
 

September 30,

June 30,

March 31,

December 31,

September 30,

(dollar amounts in millions)

2012

2012

2012

2011

2011

           

Tier 1 Common Capital Ratio:

         

Tier 1 capital (a) (b)

$

6,685

 

$

6,676

 

$

6,647

 

$

6,582

 

$

6,560

 

Less:

         

Trust preferred securities

 

 

 

25

 

49

 

Tier 1 common capital (b)

$

6,685

 

$

6,676

 

$

6,647

 

$

6,557

 

$

6,511

 
           

Risk-weighted assets (a) (b)

$

64,772

 

$

64,312

 

$

64,742

 

$

63,244

 

$

61,593

 
           

Tier 1 risk-based capital ratio (b)

10.32

%

10.38

%

10.27

%

10.41

%

10.65

%

Tier 1 common capital ratio (b)

10.32

 

10.38

 

10.27

 

10.37

 

10.57

 
           

Tangible Common Equity Ratio:

         

Common shareholders' equity

$

7,084

 

$

7,028

 

$

6,985

 

$

6,868

 

$

6,951

 

Less:

         

Goodwill

635

 

635

 

635

 

635

 

635

 

Other intangible assets

25

 

28

 

30

 

32

 

35

 

Tangible common equity

$

6,424

 

$

6,365

 

$

6,320

 

$

6,201

 

$

6,281

 
           

Total assets

$

63,314

 

$

62,650

 

$

62,593

 

$

61,008

 

$

60,888

 

Less:

         

Goodwill

635

 

635

 

635

 

635

 

635

 

Other intangible assets

25

 

28

 

30

 

32

 

35

 

Tangible assets

$

62,654

 

$

61,987

 

$

61,928

 

$

60,341

 

$

60,218

 
           

Common equity ratio

11.19

%

11.22

%

11.16

%

11.26

%

11.42

%

Tangible common equity ratio

10.25

 

10.27

 

10.21

 

10.27

 

10.43

 
           

Tangible Common Equity per Share of Common Stock:

         

Common shareholders' equity

$

7,084

 

$

7,028

 

$

6,985

 

$

6,868

 

$

6,951

 

Tangible common equity

6,424

 

6,365

 

6,320

 

6,201

 

6,281

 
           

Shares of common stock outstanding (in millions)

191

 

194

 

197

 

197

 

199

 
           

Common shareholders' equity per share of common stock

$

37.01

 

$

36.18

 

$

35.44

 

$

34.80

 

$

34.94

 

Tangible common equity per share of common stock

33.56

 

32.76

 

32.06

 

31.42

 

31.57

 

(a)

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

(b)

  September 30, 2012 Tier 1 capital and risk-weighted assets are estimated.

The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations. The tangible common equity ratio removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets. Tangible common equity per share of common stock removes the effect of intangible assets from common shareholders equity per share of common stock. Comerica believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.

SOURCE Comerica Incorporated



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