Comerica Issues Revised 2013 Results Based On Unfavorable Jury Verdict

Jan 21, 2014, 07:30 ET from Comerica Incorporated

DALLAS, Jan. 21, 2014 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today issued revised 2013 results based on an unfavorable Montana jury verdict, entered at approximately 7:30 p.m. ET on January 17, 2014. The Montana litigation ("the case") in which Comerica Bank ("the Bank") was a third-party defendant, was tried before the Montana Second District Judicial Court for Silver Bow County in Butte, Montana. The claims underlying the lawsuit against the Bank grew out of an initial $9 million revolving line of credit loan extended by the Bank to Masters Group International, Inc. ("Masters"), a then Michigan-based office supply company, in 2006, that was subsequently increased to $10.5 million and later paid in full through collection actions taken by the Bank following a default by Masters.

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Following the jury's decision on the case, Comerica increased its reserve for litigation and decreased incentive compensation expense based on the revised results, effective as of December 31, 2013, which resulted in a decrease in net income of $28 million, or 15 cents per share, for the fourth quarter 2013.

Comerica reiterates its previously stated outlook for 2014, excluding the impact of this event.

"As we consider possible courses of action, including appealing the decision to the Montana Supreme Court, the sole appellate court for the state of Montana, we recorded a charge in the fourth quarter 2013 in accordance with applicable accounting principles," said Ralph W. Babb Jr., chairman and chief executive officer. "We believe we had meritorious defenses for this litigation and anticipated a favorable outcome."

Net income decreased by $28 million, or 15 cents per share, to $117 million, or 62 cents per share for the fourth quarter 2013, compared to previously reported net income of $145 million, or 77 cents per share. For the year ended December 31, 2013, net income decreased to $541 million, or $2.85 per share, as compared to previously reported net income of $569 million, or $3.00 per share. As revised, full-year 2013 net income increased $20 million, or 4 percent, compared to 2012, and earnings per diluted share increased 18 cents, or 7 percent. At December 31, 2013, the revised estimated Tier 1 common capital ratio was 10.56 percent, as compared to the previously reported ratio of 10.60 percent. The estimated Basel III Tier 1 common capital ratio remained at 10.3 percent.

The following table summarizes the impact of the revisions on the previously reported financial results.

December 31, 2013

Quarter Ended

Year Ended

(dollar amounts in millions, except per share data)

As Reported

As Revised

As Reported

As Revised

Noninterest expenses

$

429

$

473

$

1,678

$

1,722

Salaries

203

197

769

763

Litigation-related expenses

52

52

Other noninterest expenses

46

44

178

176

Income before income taxes

196

152

774

730

Provision for income taxes

51

35

205

189

Net income

145

117

569

541

Net income attributable to common shares

143

115

561

533

Diluted income per common share

0.77

0.62

3.00

2.85

Total shareholders' equity at period end

7,181

7,153

Estimated Tier 1 common capital ratio (a)

10.60

%

10.56

%

Estimated Basel III Tier 1 common capital ratio (a)

10.3

%

10.3

%

Tangible common equity ratio (a)

10.11

%

10.07

%

a)

See Reconciliation of Non-GAAP Financial Measures.

The impact of the change in legal reserves primarily affects the Business Bank and the Michigan market. The revised financial results, including segment results, will be reflected in Comerica's Annual Report on Form 10-K. All other revised financial results are included in the financial information that follows.

Comerica Bank is a subsidiary of Comerica Incorporated, a financial services company headquartered in Dallas, Texas, and strategically aligned by three major business segments: The Business Bank, The Retail Bank and Wealth Management. Comerica focuses on relationships and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico.

This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Comerica's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as a reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Forward-looking Statements

Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "believes," "contemplates," "feels," "expects," "estimates," "seeks," "strives," "plans," "intends," "outlook," "forecast," "position," "target," "mission," "assume," "achievable," "potential," "strategy," "goal," "aspiration," "opportunity," "initiative," "outcome," "continue," "remain," "maintain," "on course," "trend," "objective," "looks forward" and variations of such words and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "might," "can," "may" or similar expressions, as they relate to Comerica or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of Comerica's management based on information known to Comerica's management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica's management for future or past operations, products or services, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability. Such statements reflect the view of Comerica's management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Comerica's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in general economic, political or industry conditions; changes in monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets; changes in Comerica's credit rating; the interdependence of financial service companies; changes in regulation or oversight; unfavorable developments concerning credit quality; any future acquisitions or divestitures; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers; the implementation of Comerica's strategies and business models; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties, failure of technology infrastructure or information security incidents; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; competitive product and pricing pressures among financial institutions within Comerica's markets; changes in customer behavior; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings or determinations; the effectiveness of methods of reducing risk exposures; the effects of terrorist activities and other hostilities; the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; changes in accounting standards and the critical nature of Comerica's accounting policies. Comerica cautions that the foregoing list of factors is not exclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to "Item 1A. Risk Factors" beginning on page 13 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2012 and on page 68 of the Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013. 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

Years Ended

December 31,

September 30,

December 31,

December 31,

(in millions, except per share data)

2013

2013

2012

2013

2012

PER COMMON SHARE AND COMMON STOCK DATA

Diluted net income

$

0.62

$

0.78

$

0.68

$

2.85

$

2.67

Cash dividends declared

0.17

0.17

0.15

0.68

0.55

Common shareholders' equity (at period end)

39.23

37.94

36.87

Tangible common equity (at period end) (a)

35.65

34.38

33.38

Average diluted shares (in thousands)

186,166

187,104

187,954

186,927

192,473

KEY RATIOS

Return on average common shareholders' equity

6.66

%

8.50

%

7.36

%

7.76

%

7.43

%

Return on average assets

0.72

0.92

0.81

0.85

0.83

Tier 1 common capital ratio (a) (b)

10.56

10.72

10.14

Tier 1 risk-based capital ratio (b)

10.56

10.72

10.14

Total risk-based capital ratio (b)

13.00

13.42

13.15

Leverage ratio (b)

10.77

10.88

10.57

Tangible common equity ratio (a)

10.07

9.87

9.76

AVERAGE BALANCES

Commercial loans

$

27,683

$

27,759

$

27,462

$

27,971

$

26,224

Real estate construction loans:

Commercial Real Estate business line (c)

1,363

1,263

1,033

1,241

1,031

Other business lines (d)

289

259

266

245

359

Total real estate construction loans

1,652

1,522

1,299

1,486

1,390

Commercial mortgage loans:

Commercial Real Estate business line (c)

1,608

1,714

1,939

1,738

2,259

Other business lines (d)

7,106

7,229

7,580

7,322

7,583

Total commercial mortgage loans

8,714

8,943

9,519

9,060

9,842

Lease financing

838

839

839

847

864

International loans

1,303

1,252

1,314

1,275

1,272

Residential mortgage loans

1,679

1,642

1,525

1,620

1,505

Consumer loans

2,185

2,137

2,161

2,153

2,209

Total loans

44,054

44,094

44,119

44,412

43,306

Earning assets

59,924

58,892

59,276

59,091

57,483

Total assets

64,605

63,660

64,257

63,936

62,572

Noninterest-bearing deposits

23,532

22,379

22,758

22,379

21,004

Interest-bearing deposits

29,237

29,486

28,524

29,332

28,529

Total deposits

52,769

51,865

51,282

51,711

49,533

Common shareholders' equity

7,010

6,923

7,062

6,968

7,012

NET INTEREST INCOME

Net interest income (fully taxable equivalent basis)

$

431

$

413

$

425

$

1,675

$

1,731

Fully taxable equivalent adjustment

1

1

1

3

3

Net interest margin (fully taxable equivalent basis)

2.86

%

2.79

%

2.87

%

2.84

%

3.03

%

CREDIT QUALITY

Nonaccrual loans

$

350

$

437

$

519

Reduced-rate loans

24

22

22

Total nonperforming loans (e)

374

459

541

Foreclosed property

9

19

54

Total nonperforming assets (e)

383

478

595

Loans past due 90 days or more and still accruing

16

25

23

Gross loan charge-offs

41

39

60

$

153

$

245

Loan recoveries

28

20

23

80

75

Net loan charge-offs

13

19

37

73

170

Allowance for loan losses

598

604

629

Allowance for credit losses on lending-related commitments

36

34

32

Total allowance for credit losses

634

638

661

Allowance for loan losses as a percentage of total loans

1.32

%

1.37

%

1.37

%

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

0.12

0.18

0.34

0.16

%

0.39

%

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

0.84

1.08

1.29

Allowance for loan losses as a percentage of total nonperforming loans

160

131

116

(a)

See Reconciliation of Non-GAAP Financial Measures.

(b)

December 31, 2013 ratios are estimated.

(c)

Primarily loans to real estate developers.

(d)

Primarily loans secured by owner-occupied real estate.

(e)

Excludes loans acquired with credit-impairment.

(f)

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

 

 CONSOLIDATED BALANCE SHEETS

 Comerica Incorporated and Subsidiaries

December 31,

September 30,

December 31,

(in millions, except share data)

2013

2013

2012

(unaudited)

(unaudited)

ASSETS

Cash and due from banks

$

1,140

$

1,384

$

1,395

Federal funds sold

100

Interest-bearing deposits with banks

5,311

5,704

3,039

Other short-term investments

112

106

125

Investment securities available-for-sale

9,307

9,488

10,297

Commercial loans

28,815

27,897

29,513

Real estate construction loans

1,762

1,552

1,240

Commercial mortgage loans

8,787

8,785

9,472

Lease financing

845

829

859

International loans

1,327

1,286

1,293

Residential mortgage loans

1,697

1,650

1,527

Consumer loans

2,237

2,152

2,153

Total loans

45,470

44,151

46,057

Less allowance for loan losses

(598)

(604)

(629)

Net loans

44,872

43,547

45,428

Premises and equipment

594

604

622

Accrued income and other assets

3,891

3,837

4,063

Total assets

$

65,227

$

64,670

$

65,069

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits

$

23,875

$

23,896

$

23,279

Money market and interest-bearing checking deposits

22,332

21,697

21,273

Savings deposits

1,673

1,645

1,606

Customer certificates of deposit

5,063

5,180

5,531

Foreign office time deposits

349

491

502

Total interest-bearing deposits

29,417

29,013

28,912

Total deposits

53,292

52,909

52,191

Short-term borrowings

253

226

110

Accrued expenses and other liabilities

986

1,001

1,106

Medium- and long-term debt

3,543

3,565

4,720

Total liabilities

58,074

57,701

58,127

Common stock - $5 par value:

Authorized - 325,000,000 shares

Issued - 228,164,824 shares

1,141

1,141

1,141

Capital surplus

2,179

2,171

2,162

Accumulated other comprehensive loss

(391)

(541)

(413)

Retained earnings

6,321

6,239

5,931

Less cost of common stock in treasury - 45,860,786 shares at 12/31/13, 44,483,659 shares at 9/30/13 and 39,889,610 shares at 12/31/12

(2,097)

(2,041)

(1,879)

Total shareholders' equity

7,153

6,969

6,942

Total liabilities and shareholders' equity

$

65,227

$

64,670

$

65,069

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries

Three Months Ended

Years Ended

December 31,

December 31,

(in millions, except per share data)

2013

2012

2013

2012

INTEREST INCOME

Interest and fees on loans

$

397

$

398

$

1,556

$

1,617

Interest on investment securities

55

55

214

234

Interest on short-term investments

4

3

14

12

Total interest income

456

456

1,784

1,863

INTEREST EXPENSE

Interest on deposits

12

16

55

70

Interest on medium- and long-term debt

14

16

57

65

Total interest expense

26

32

112

135

Net interest income

430

424

1,672

1,728

Provision for credit losses

9

16

46

79

Net interest income after provision for credit losses

421

408

1,626

1,649

NONINTEREST INCOME

Service charges on deposit accounts

53

52

214

214

Fiduciary income

43

42

171

158

Commercial lending fees

28

25

99

96

Card fees

19

17

74

65

Letter of credit fees

15

17

64

71

Bank-owned life insurance

9

9

40

39

Foreign exchange income

9

9

36

38

Brokerage fees

4

5

17

19

Net securities gains (losses)

1

(1)

12

Other noninterest income

24

27

112

106

Total noninterest income

204

204

826

818

NONINTEREST EXPENSES

Salaries

197

196

763

778

Employee benefits

61

59

246

240

Total salaries and employee benefits

258

255

1,009

1,018

Net occupancy expense

41

42

160

163

Equipment expense

15

15

60

65

Outside processing fee expense

30

28

119

107

Software expense

24

23

90

90

Litigation-related expense

52

52

23

FDIC insurance expense

7

9

33

38

Advertising expense

3

6

21

27

Other real estate expense

(1)

3

2

9

Merger and restructuring charges

2

35

Other noninterest expenses

44

44

176

182

Total noninterest expenses

473

427

1,722

1,757

Income before income taxes

152

185

730

710

Provision for income taxes

35

55

189

189

NET INCOME

117

130

541

521

Less income allocated to participating securities

2

2

8

6

Net income attributable to common shares

$

115

$

128

$

533

$

515

Earnings per common share:

Basic

$

0.64

$

0.68

$

2.92

$

2.68

Diluted

0.62

0.68

2.85

2.67

Comprehensive income (loss)

267

(30)

563

464

Cash dividends declared on common stock

31

28

126

106

Cash dividends declared per common share

0.17

0.15

0.68

0.55

 

CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries

Fourth

Third

Second

First

Fourth

Fourth Quarter 2013 Compared To:

Quarter

Quarter

Quarter

Quarter

Quarter

Third Quarter 2013

Fourth Quarter 2012

(in millions, except per share data)

2013

2013

2013

2013

2012

 Amount

  Percent

  Amount

  Percent

INTEREST INCOME

Interest and fees on loans

$

397

$

381

$

388

$

390

$

398

$

16

4

%

$

(1)

%

Interest on investment securities

55

54

52

53

55

1

2

Interest on short-term investments

4

4

3

3

3

1

27

Total interest income

456

439

443

446

456

17

4

INTEREST EXPENSE

Interest on deposits

12

13

15

15

16

(1)

(8)

(4)

(24)

Interest on medium- and long-term debt

14

14

14

15

16

(2)

(15)

Total interest expense

26

27

29

30

32

(1)

(5)

(6)

(20)

Net interest income

430

412

414

416

424

18

4

6

1

Provision for credit losses

9

8

13

16

16

1

22

(7)

(42)

Net interest income after provision

for credit losses

421

404

401

400

408

17

4

13

3

NONINTEREST INCOME

Service charges on deposit accounts

53

53

53

55

52

1

1

Fiduciary income

43

41

44

43

42

2

2

1

4

Commercial lending fees

28

28

22

21

25

3

6

Card fees

19

20

18

17

17

(1)

(1)

2

15

Letter of credit fees

15

17

16

16

17

(2)

(9)

(2)

(13)

Bank-owned life insurance

9

12

10

9

9

(3)

(25)

Foreign exchange income

9

9

9

9

9

Brokerage fees

4

4

4

5

5

(1)

(14)

Net securities gains (losses)

1

(2)

1

(1)

(43)

(1)

(82)

Other noninterest income

24

29

34

25

27

(5)

(16)

(3)

(6)

Total noninterest income

204

214

208

200

204

(10)

(5)

NONINTEREST EXPENSES

Salaries

197

196

182

188

196

1

1

1

Employee benefits

61

59

63

63

59

2

3

2

4

Total salaries and employee benefits

258

255

245

251

255

3

1

3

1

Net occupancy expense

41

41

39

39

42

(1)

(2)

Equipment expense

15

15

15

15

15

Outside processing fee expense

30

31

30

28

28

(1)

(7)

2

5

Software expense

24

22

22

22

23

2

11

1

6

Litigation-related expense

52

(4)

1

3

56

N/M

52

N/M

FDIC insurance expense

7

9

8

9

9

(2)

(19)

(2)

(22)

Advertising expense

3

6

6

6

6

(3)

(49)

(3)

(48)

Other real estate expense

(1)

1

1

1

3

(2)

N/M

(4)

N/M

Merger and restructuring charges

2

(2)

N/M

Other noninterest expenses

44

41

49

42

44

3

7

Total noninterest expenses

473

417

416

416

427

56

13

46

11

Income before income taxes

152

201

193

184

185

(49)

(25)

(33)

(18)

Provision for income taxes

35

54

50

50

55

(19)

(35)

(20)

(36)

NET INCOME

117

147

143

134

130

(30)

(21)

(13)

(10)

Less income allocated to participating securities

2

2

2

2

2

Net income attributable to common shares

$

115

$

145

$

141

$

132

$

128

$

(30)

(21)%

$

(13)

(10)%

Earnings per common share:

Basic

$

0.64

$

0.80

$

0.77

$

0.71

$

0.68

$

(0.16)

(20)%

$

(0.04)

(6)%

Diluted

0.62

0.78

0.76

0.70

0.68

(0.16)

(21)

(0.06)

(9)

Comprehensive income (loss)

267

144

15

137

(30)

123

87

297

N/M

Cash dividends declared on common stock

31

31

32

32

28

3

10

Cash dividends declared per common share

0.17

0.17

0.17

0.17

0.15

0.02

13

N/M - Not Meaningful

CONSOLIDATED STATISTICAL DATA (unaudited)

Comerica Incorporated and Subsidiaries

December 31,

September 30,

June 30,

March 31,

December 31,

(in millions, except per share data)

2013

2013

2013

2013

2012

Commercial loans:

Floor plan

$

3,504

$

2,869

$

3,241

$

2,963

$

2,939

Other

25,311

25,028

25,945

25,545

26,574

Total commercial loans

28,815

27,897

29,186

28,508

29,513

Real estate construction loans:

Commercial Real Estate business line (a)

1,447

1,283

1,223

1,185

1,049

Other business lines (b)

315

269

256

211

191

Total real estate construction loans

1,762

1,552

1,479

1,396

1,240

Commercial mortgage loans:

Commercial Real Estate business line (a)

1,678

1,592

1,743

1,812

1,873

Other business lines (b)

7,109

7,193

7,264

7,505

7,599

Total commercial mortgage loans

8,787

8,785

9,007

9,317

9,472

Lease financing

845

829

843

853

859

International loans

1,327

1,286

1,209

1,269

1,293

Residential mortgage loans

1,697

1,650

1,611

1,568

1,527

Consumer loans:

Home equity

1,517

1,501

1,474

1,498

1,537

Other consumer

720

651

650

658

616

Total consumer loans

2,237

2,152

2,124

2,156

2,153

Total loans

$

45,470

$

44,151

$

45,459

$

45,067

$

46,057

Goodwill

$

635

$

635

$

635

$

635

$

635

Core deposit intangible

16

17

18

19

20

Loan servicing rights

1

1

2

2

2

Tier 1 common capital ratio (c) (d)

10.56

%

10.72

%

10.43

%

10.37

%

10.14

%

Tier 1 risk-based capital ratio (c)

10.56

10.72

10.43

10.37

10.14

Total risk-based capital ratio (c)

13.00

13.42

13.29

13.41

13.15

Leverage ratio (c)

10.77

10.88

10.81

10.75

10.57

Tangible common equity ratio (d)

10.07

9.87

10.04

9.86

9.76

Common shareholders' equity per share of common stock

$

39.23

$

37.94

$

37.32

$

37.41

$

36.87

Tangible common equity per share of common stock (d)

35.65

34.38

33.79

33.90

33.38

Market value per share for the quarter:

High

48.69

43.49

40.44

36.99

32.14

Low

38.64

38.56

33.55

30.73

27.72

Close

47.54

39.31

39.83

35.95

30.34

Quarterly ratios:

Return on average common shareholders' equity

6.66

%

8.50

%

8.23

%

7.68

%

7.36

%

Return on average assets

0.72

0.92

0.90

0.84

0.81

Efficiency ratio (e)

74.55

66.66

66.43

67.58

68.08

Number of banking centers

483

484

484

487

487

Number of employees - full time equivalent

8,948

8,918

8,929

9,001

9,035

(a)

Primarily loans to real estate developers.

(b)

Primarily loans secured by owner-occupied real estate.

(c)

December 31, 2013 ratios are estimated.

(d)

See Reconciliation of Non-GAAP Financial Measures.

(e)

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

 

PARENT COMPANY ONLY BALANCE SHEETS (unaudited)

Comerica Incorporated

December 31,

September 30,

December 31,

(in millions, except share data)

2013

2013

2012

ASSETS

Cash and due from subsidiary bank

$

31

$

36

$

2

Short-term investments with subsidiary bank

482

480

431

Other short-term investments

96

92

88

Investment in subsidiaries, principally banks

7,176

7,008

7,045

Premises and equipment

4

4

4

Other assets

139

134

150

      Total assets

$

7,928

$

7,754

$

7,720

LIABILITIES AND SHAREHOLDERS' EQUITY

Medium- and long-term debt

$

617

$

620

$

629

Other liabilities

158

165

149

      Total liabilities

775

785

778

Common stock - $5 par value:

    Authorized - 325,000,000 shares

    Issued - 228,164,824 shares

1,141

1,141

1,141

Capital surplus

2,179

2,171

2,162

Accumulated other comprehensive loss

(391)

(541)

(413)

Retained earnings

6,321

6,239

5,931

Less cost of common stock in treasury - 45,860,786 shares at 12/31/13, 44,483,659 shares at 9/30/13 and 39,889,610 shares at 12/31/12

(2,097)

(2,041)

(1,879)

      Total shareholders' equity

7,153

6,969

6,942

      Total liabilities and shareholders' equity

$

7,928

$

7,754

$

7,720

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)

Comerica Incorporated and Subsidiaries

Accumulated

Common Stock

Other

Total

Shares

Capital

Comprehensive

Retained

Treasury

Shareholders'

(in millions, except per share data)

 Outstanding

Amount

Surplus

Loss

Earnings

Stock

Equity

BALANCE AT DECEMBER 31, 2011

197.3

$

1,141

$

2,170

$

(356)

$

5,546

$

(1,633)

$

6,868

Net income

521

521

Other comprehensive loss, net of tax

(57)

(57)

Cash dividends declared on common stock ($0.55 per share)

(106)

(106)

Purchase of common stock

(10.2)

(308)

(308)

Net issuance of common stock under employee stock plans

1.2

(46)

(30)

63

(13)

Share-based compensation

37

37

Other

1

(1)

BALANCE AT DECEMBER 31, 2012

188.3

$

1,141

$

2,162

$

(413)

$

5,931

$

(1,879)

$

6,942

Net income

541

541

Other comprehensive income, net of tax

22

22

Cash dividends declared on common stock ($0.68 per share)

(126)

(126)

Purchase of common stock

(7.5)

(291)

(291)

Net issuance of common stock under employee stock plans

1.5

(17)

(25)

72

30

Share-based compensation

35

35

Other

(1)

1

BALANCE AT DECEMBER 31, 2013

182.3

$

1,141

$

2,179

$

(391)

$

6,321

$

(2,097)

$

7,153

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

Comerica Incorporated and Subsidiaries

December 31,

September 30,

June 30,

March 31,

December 31,

(dollar amounts in millions)

2013

2013

2013

2013

2012

Tier 1 Common Capital Ratio:

Tier 1 and Tier 1 common capital (a) (b)

$

6,895

$

6,862

$

6,800

$

6,748

$

6,705

Risk-weighted assets (a) (b)

$

65,317

$

64,027

$

65,220

$

65,099

$

66,115

Tier 1 and Tier 1 common risk-based capital ratio (b)

10.56

%

10.72

%

10.43

%

10.37

%

10.14

%

Basel III Tier 1 Common Capital Ratio:

Tier 1 common capital (b)

$

6,895

$

6,862

$

6,800

$

6,748

$

6,705

Basel III adjustments (c)

(6)

(4)

(1)

(39)

Basel III Tier 1 common capital (c)

6,889

6,858

6,800

6,747

6,666

Risk-weighted assets (a) (b)

$

65,317

$

64,027

$

65,220

$

65,099

$

66,115

Basel III adjustments (c)

1,735

1,726

2,091

1,996

1,854

Basel III risk-weighted assets (c)

$

67,052

$

65,753

$

67,311

$

67,095

$

67,969

Tier 1 common capital ratio (b)

10.6

%

10.7

%

10.4

%

10.4

%

10.1

%

Basel III Tier 1 common capital ratio (c)

10.3

10.4

10.1

10.1

9.8

Tangible Common Equity Ratio:

Common shareholders' equity

$

7,153

$

6,969

$

6,911

$

6,988

$

6,942

Less:

Goodwill

635

635

635

635

635

Other intangible assets

17

18

20

21

22

Tangible common equity

$

6,501

$

6,316

$

6,256

$

6,332

$

6,285

Total assets

$

65,227

$

64,670

$

62,947

$

64,885

$

65,069

Less:

Goodwill

635

635

635

635

635

Other intangible assets

17

18

20

21

22

Tangible assets

$

64,575

$

64,017

$

62,292

$

64,229

$

64,412

Common equity ratio

10.97

%

10.78

%

10.98

%

10.77

%

10.67

%

Tangible common equity ratio

10.07

9.87

10.04

9.86

9.76

Tangible Common Equity per Share of Common Stock:

Common shareholders' equity

$

7,153

$

6,969

$

6,911

$

6,988

$

6,942

Tangible common equity

6,501

6,316

6,256

6,332

6,285

Shares of common stock outstanding (in millions)

182

184

185

187

188

Common shareholders' equity per share of common stock

$

39.23

$

37.94

$

37.32

$

37.41

$

36.87

Tangible common equity per share of common stock

35.65

34.38

33.79

33.90

33.38

(a)

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

(b)

December 31, 2013 Tier 1 capital and risk-weighted assets are estimated.

(c)

Estimated ratios based on the standardized approach in the final rule for the U.S. adoption of the Basel III regulatory capital framework and excluding most elements of AOCI.

The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations. The Basel III Tier 1 common capital ratio further adjusts Tier 1 common capital and risk-weighted assets to account for the final rule approved by U.S. banking regulators in July 2013 for the U.S. adoption of the Basel III regulatory capital framework. The final Basel III capital rules are effective January 1, 2015 for banking organizations subject to the standardized approach. 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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