Comerica Reports First Quarter 2010 Results
Continued Improvement in Credit Quality
Significant Declines in Net Charge-offs, Provision for Loan Losses
Net Interest Margin Expands 24 Basis Points
Full Preferred Stock Redemption and Preferred Dividends Reduce Earnings by 79 Cents Per Share
Strong Capital and Liquidity to Support Future Growth
DALLAS, April 21 /PRNewswire-FirstCall/ -- Comerica Incorporated (NYSE: CMA) today reported first quarter 2010 net income of $52 million, compared to a net loss of $29 million for the fourth quarter 2009. After preferred dividends on the fully redeemed $2.25 billion of preferred stock issued to the U.S. Treasury under its Capital Purchase Program of $123 million, or $0.79 per share, the net loss attributable to common shares was $71 million, or $0.46 per diluted common share, compared to a net loss per diluted common share of $0.42 for the fourth quarter 2009. Preferred dividends included $24 million of cash dividends, non-cash discount accretion of $5 million and a one-time, non-cash charge of $94 million related to the full redemption of the preferred stock in March 2010. First quarter 2010 net income also included a $17 million after-tax gain from the cash settlement of a note receivable related to the 2006 sale of an investment advisory subsidiary, recorded in "income from discontinued operations, net of tax."
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(dollar amounts in millions, 1st Qtr 4th Qtr 1st Qtr except per share data) '10 '09 '09 ---------------------------- ------- ------- ------- Net interest income $415 $396 $384 Provision for loan losses 175 256 203 Noninterest income 194 214 223 Noninterest expenses 404 425 397 Income (loss) from continuing operations, net of tax 35 (29) 8 Income from discontinued operations, net of tax 17 - 1 Net income (loss) 52 (29) 9 Preferred stock dividends to U.S. Treasury (a) 123 33 33 Net loss attributable to common shares (71) (62) (24) Diluted loss per common share (0.46) (0.42) (0.16) Tier 1 capital ratio 10.40%(b) 12.46% 11.06% Tangible common equity ratio (c) 9.68 7.99 7.27 Net interest margin 3.18 2.94 2.53 (a) First quarter 2010 included non-cash charges of $99 million. (b) March 31, 2010 ratio is estimated. (c) See Reconciliation of Non-GAAP Financial Measures.
"The encouraging signs we saw in the fourth quarter of 2009 continued in the first quarter of 2010," said Ralph W. Babb Jr., chairman and chief executive officer. "Our credit quality continued to improve, reflecting the strong credit underwriting and processes we have in place. Our net interest margin expanded further in the first quarter. We fully redeemed the preferred stock issued to the U.S. Treasury and with our solid capital position and strong liquidity are ideally positioned for future growth. We have a consistent strategy for success that is based on relationships and skill, with a dedicated workforce to deliver the quality products and services that are our hallmark.
"Our customers continue to convey a more positive and upbeat tone, and this is reflected in the increased number of loans in the pipeline. The decline in loan outstandings we saw in the fourth quarter of 2009 slowed further in the first quarter of 2010, and the pace of decline moderated in each successive month of the first quarter. All of these positive trends lead us to believe our operating fundamentals will show improvement in 2010. We are moving forward with confidence in our people and our ability to grow as the economy continues its recovery."
First Quarter 2010 Highlights Compared to Fourth Quarter 2009
- Net interest income increased five percent, or $19 million, to $415 million for the first quarter 2010 compared to $396 million for the fourth quarter 2009. The net interest margin of 3.18 percent increased 24 basis points, from 2.94 percent in the fourth quarter 2009.
- Net credit-related charge-offs decreased $52 million to $173 million, or 1.68 percent of average total loans, for the first quarter 2010, compared to $225 million, or 2.10 percent of average total loans, for the fourth quarter 2009.
- The provision for credit losses decreased $77 million to $182 million for the first quarter 2010, compared to $259 million for the fourth quarter 2009.
- In March 2010, Comerica fully redeemed $2.25 billion of preferred stock issued to the U.S. Treasury. The redemption was funded by the net proceeds from an $880 million common stock offering completed in March 2010 and from excess liquidity at the parent company. Liquidity at the parent company remained strong after the redemption of the preferred stock.
- The tangible common equity ratio was 9.68 percent at March 31, 2010, an increase of 169 basis points from December 31, 2009. The estimated Tier 1 common ratio was 9.58 percent and the estimated Tier 1 capital ratio was 10.40 percent at March 31, 2010, an increase of 140 basis points and a decrease of 206 basis points, respectively, from December 31, 2009.
Net Interest Income and Net Interest Margin
1st Qtr 4th Qtr 1st Qtr
(dollar amounts in millions) '10 '09 '09
---------------------------- ------- ------- -------
Net interest income $415 $396 $384
Net interest margin 3.18% 2.94% 2.53%
Selected average balances:
Total earning assets $52,941 $53,953 $61,752
Total investment securities 7,382 8,587 10,126
Federal Reserve Bank deposits
(excess liquidity) (a) 4,092 2,453 1,812
Total loans 41,313 42,753 49,556
Total core deposits (b) 37,236 36,742 33,832
Total noninterest-bearing deposits 14,624 14,430 11,364
(a) See Reconciliation of Non-GAAP Financial Measures.
(b) Core deposits exclude other time deposits and foreign office time
deposits.
- The $19 million increase in net interest income in the first quarter 2010, when compared to fourth quarter 2009, resulted primarily from an increase in the net interest margin.
- The net interest margin of 3.18 percent increased 24 basis points, compared to fourth quarter 2009, primarily from improved loan spreads, a less costly blend of core deposits, and maturing higher-cost wholesale funding. The net interest margin was reduced by approximately 24 basis points in the first quarter 2010 from excess liquidity, which was represented by $4.1 billion of average balances deposited with the Federal Reserve Bank, compared to a reduction of 13 basis points from $2.5 billion of average balances in the fourth quarter 2009. At March 31, 2010, excess liquidity was represented by $3.8 billion of balances deposited with the Federal Reserve Bank, compared to $4.8 billion at December 31, 2009.
- Average earning assets decreased $1.0 billion, due to a $1.4 billion decrease in average loans, partially offset by an increase of $428 million in other earning assets. The decline in loans of $1.4 billion in the first quarter 2010 continued to slow, compared to declines of $2.0 billion and $2.9 billion in the fourth quarter and third quarters of 2009, respectively, and reflected subdued demand from customers in a modestly recovering economic environment.
- First quarter 2010 average core deposits increased $494 million compared to fourth quarter 2009, including a $942 million increase in money market and NOW deposits and a $194 million increase in noninterest-bearing deposits, partially offset by a $650 million decrease in higher-cost customer certificates of deposit.
Noninterest Income
Noninterest income was $194 million for the first quarter 2010, compared to $214 million for the fourth quarter 2009. The $20 million decrease in noninterest income in the first quarter 2010, compared to the fourth quarter 2009, reflected an $8 million decrease in net securities gains, a $6 million decrease in gains related to the repurchase of debt and small decreases in several categories of noninterest income.
Noninterest Expenses
Noninterest expenses were $404 million for the first quarter 2010, compared to $425 million for the fourth quarter 2009. The $21 million decrease in noninterest expenses in the first quarter 2010, compared to the fourth quarter 2009, was primarily due to decreases in other real estate expense ($10 million), pension expense ($9 million) and salaries expense ($5 million), partially offset by an increase in the provision for credit losses on lending-related commitments ($4 million). Full-time equivalent staff decreased by approximately 115 employees from December 31, 2009 and 481 employees, or five percent, from March 31, 2009. Certain categories of noninterest expenses are highlighted in the table below.
1st Qtr 4th Qtr 1st Qtr
'10 '09 '09
------- ------- -------
Salaries $169 $174 $171
Employee benefits
Pension expense 5 14 16
Other benefits 39 37 39
--- --- ---
Total employee benefits 44 51 55
Other real estate expense 12 22 7
Provision for credit losses
on lending-related
commitments 7 3 (1)
--------------------------- --- --- ---
Discontinued Operations
Income from discontinued operations in the first quarter 2010 included a $17 million after-tax gain resulting from a successfully negotiated cash settlement of a note receivable related to the 2006 sale of Munder Capital Management, an investment advisor. The cash received of $35 million paid the note in full and concluded our commitments and financial arrangements with Munder.
Credit Quality
"We were pleased that credit quality improved at a faster pace than we had expected. This reflects our continued efforts to quickly and proactively identify and work through problem loans. We saw broad-based improvement in credit quality across all business lines, including significant declines in net charge-offs and provision for loan losses. The Commercial Real Estate business line experienced an increase in net charge-offs but saw declines in nonperforming and watch list loans. We have updated our credit outlook for full-year 2010 to reflect the significant improvement we saw in the first quarter."
- The provision for loan losses decreased $81 million, with declines in all major markets.
- Net loan charge-offs decreased $51 million to $173 million in the first quarter 2010, from $224 million in the fourth quarter 2009. Excluding the Commercial Real Estate business line, net loan charge-offs decreased $75 million, primarily in the Middle Market and Global Corporate Banking business lines. Net loan charge-offs in the Commercial Real Estate business line in the first quarter 2010 increased to $86 million, from $62 million in the fourth quarter 2009, with increases in the Texas, Florida and Other markets partially offset by decreases in the Midwest and Western markets.
- Nonperforming assets decreased $41 million to $1.3 billion, or 3.06 percent of total loans and foreclosed property, at March 31, 2010.
- During the first quarter 2010, $245 million of loan relationships greater than $2 million were transferred to nonaccrual status, a decrease of $21 million from the fourth quarter 2009. Of the transfers of loan relationships greater than $2 million to nonaccrual in the first quarter 2010, $129 million were in the Commercial Real Estate business line and $63 million were in Middle Market.
- Nonaccrual loans were charged down 44 percent as of March 31, 2010 and December 31, 2009, compared to 36 percent one year ago.
- Foreclosed property decreased $22 million to $89 million at March 31, 2010, from $111 million at December 31, 2009.
- Loans past due 90 days or more and still accruing were $83 million at March 31, 2010, a decrease of $18 million compared to December 31, 2009.
- The allowance for loan losses to total loans ratio increased to 2.42 percent at March 31, 2010, from 2.34 percent at December 31, 2009.
1st Qtr 4th Qtr 1st Qtr
(dollar amounts in millions) '10 '09 '09
---------------------------- ------- ------- -------
Net loan charge-offs $173 $224 $157
Net lending-related commitment
charge-offs - 1 -
--- --- ---
Total net credit-related charge-
offs 173 225 157
Net loan charge-offs/Average total
loans 1.68% 2.09% 1.26%
Net credit-related charge-offs/
Average total loans 1.68 2.10 1.26
Provision for loan losses $175 $256 $203
Provision for credit losses on
lending-related commitments 7 3 (1)
--- --- ---
Total provision for credit losses 182 259 202
Nonperforming loans 1,162 1,181 982
Nonperforming assets (NPAs) 1,251 1,292 1,073
NPAs/Total loans and foreclosed
property 3.06% 3.06% 2.20%
Loans past due 90 days or more and
still accruing $83 $101 $207
Allowance for loan losses 987 985 816
Allowance for credit losses on
lending-related commitments (a) 44 37 37
--- --- ---
Total allowance for credit losses 1,031 1,022 853
Allowance for loan losses/Total
loans 2.42% 2.34% 1.68%
Allowance for loan losses/
Nonperforming loans 85 83 83
(a) Included in "Accrued expenses and other liabilities" on the
consolidated balance sheets.
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $57.1 billion and $5.7 billion, respectively, at March 31, 2010, compared to $59.2 billion and $4.9 billion, respectively, at December 31, 2009. There were approximately 176 million common shares outstanding at March 31, 2010.
In March 2010, Comerica fully redeemed $2.25 billion of preferred stock issued to the U.S. Treasury. The redemption was partially funded by the net proceeds from an $880 million common stock offering. Preferred stock dividends in the first quarter 2010 included cash dividends of $24 million, non-cash discount accretion of $5 million and a one-time, non-cash redemption charge of $94 million, reflecting the accelerated accretion of the remaining discount. Comerica elected not to repurchase a related warrant for 11.5 million shares of common stock issued to the U.S. Treasury.
Comerica's tangible common equity ratio was 9.68 percent at March 31, 2010, an increase of 169 basis points from December 31, 2009. The estimated Tier 1 common ratio was 9.58 percent and the estimated Tier 1 capital ratio was 10.40 percent at March 31, 2010, an increase of 140 basis points and a decrease of 206 basis points, respectively, from December 31, 2009. The increase in the tangible common equity ratio and the estimated Tier 1 common ratio reflected the increase in common shareholders' equity from the common stock offering, while the decrease in the estimated Tier 1 capital ratio reflected the net decrease in total shareholders' equity after the redemption of the preferred stock.
Full-Year 2010 Outlook
For full-year 2010, management expects the following, based on a modestly improving economic environment.
- Management expects low single-digit loan growth from period-end March 31, 2010 to period-end December 31, 2010. Investment securities are expected to remain at a level similar to March 31, 2010.
- Based on no increase in the Federal Funds rate, management expects an average net interest margin between 3.25 percent and 3.35 percent for full-year 2010, reflecting the benefit, compared to 2009, from improved loan pricing, lower funding costs and a lower level of excess liquidity.
- Management expects net credit-related charge-offs between $675 million and $725 million for full-year 2010. The provision for credit losses is expected to be consistent with net credit-related charge-offs.
- Management expects flat to low single-digit decline in noninterest income compared to 2009, after excluding $243 million of 2009 net securities gains.
- Management expects a low single-digit decrease in noninterest expenses compared to 2009.
- Management expects income tax expense to approximate 35 percent of income before income taxes less approximately $60 million of permanent differences related to low-income housing and bank-owned life insurance.
Business Segments
Comerica's continuing operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank, and Wealth & Institutional Management. The Finance Division also is included as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at March 31, 2010 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2010 results compared to fourth quarter 2009.
The following table presents net income (loss) by business segment.
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '10 '09 '09
------------------ ------- ------- -------
Business Bank $89 $65 $56
Retail Bank (7) (12) (7)
Wealth & Institutional
Management 11 5 13
---------------------- --- --- ---
93 58 62
Finance (59) (62) (50)
Other (a) 18 (25) (3)
--------- --- --- ---
Total $52 $(29) $9
----- --- ---- ---
(a) Includes discontinued operations and items not directly
associated with the three major business segments or the Finance
Division.
Business Bank
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr millions) '10 '09 '09 ------------------ ------- ------- ------- Net interest income (FTE) $341 $343 $312 Provision for loan losses 137 179 177 Noninterest income 76 77 93 Noninterest expenses 162 165 157 Net income 89 65 56 Net credit-related charge-offs 137 183 123 Selected average balances: Assets 31,293 32,655 39,505 Loans 30,918 32,289 38,527 Deposits 17,750 16,944 14,040 Net interest margin 4.48% 4.21% 3.28% ------------------- ---- ---- ----
- Average loans decreased $1.4 billion, reflecting declines across all markets and all business lines except National Dealer Services. The decline in loans slowed in the first quarter 2010.
- Average deposits increased $806 million, reflecting increases across all markets, primarily in Global Corporate Banking, Commercial Real Estate and Mortgage Banker Finance.
- The net interest margin of 4.48 percent increased 27 basis points, primarily due to an increase in loan spreads and an increase in noninterest-bearing deposits.
- The provision for loan losses decreased $42 million, reflecting decreases in most business lines, partially offset by increases in Middle Market and Commercial Real Estate.
- Noninterest expenses decreased $3 million, primarily due to decreases in other real estate and salaries and employee benefits expense, partially offset by an increase in the provision for credit losses on lending-related commitments.
Retail Bank
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr millions) '10 '09 '09 ------------------ ------- ------- ------- Net interest income (FTE) $130 $129 $126 Provision for loan losses 31 36 23 Noninterest income 44 48 46 Noninterest expenses 154 161 161 Net loss (7) (12) (7) Net credit-related charge-offs 26 30 26 Selected average balances: Assets 6,106 6,257 6,875 Loans 5,599 5,733 6,284 Deposits 16,718 17,020 17,391 Net interest margin 3.18% 3.02% 2.93% ------------------- ---- ---- ----
- Average loans decreased $134 million, across all markets. The decline in loans slowed in the first quarter 2010.
- Average deposits decreased $302 million, primarily in the Midwest market, reflecting a decrease in higher-cost customer certificates of deposit, partially offset by an increase in money market and NOW deposits.
- The net interest margin of 3.18 percent increased 16 basis points, due to an increase in loan spreads and an increase in deposit spreads related to maturing higher-cost customer certificates of deposit and an increase in NOW balances.
- The provision for loan losses decreased $5 million.
- Noninterest income decreased $4 million, primarily due to decreased service charges on deposit accounts.
- Noninterest expenses decreased $7 million, primarily due to decreases in salaries and employee benefits expense and other real estate expense.
Wealth and Institutional Management
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr millions) '10 '09 '09 ------------------ ------- ------- ------- Net interest income (FTE) $42 $42 $36 Provision for loan losses 12 19 10 Noninterest income 60 60 70 Noninterest expenses 73 76 75 Net income 11 5 13 Net credit-related charge-offs 10 12 8 Selected average balances: Assets 4,862 4,841 4,870 Loans 4,789 4,746 4,750 Deposits 2,791 2,849 2,429 Net interest margin 3.53% 3.50% 3.11% ------------------- ---- ---- ----
- Average loans increased $43 million.
- Average deposits decreased $58 million, primarily in the Western market, reflecting decreases in noninterest-bearing deposits, money market deposits and higher-cost customer certificates of deposit, partially offset by an increase in NOW deposits.
- The net interest margin of 3.53 percent increased three basis points, primarily due to increases in loan and deposit spreads.
- The provision for loan losses decreased $7 million.
- Noninterest expenses decreased $3 million, primarily due to a decrease in salaries and employee benefits expense.
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 March 31, 2010 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2010 results compared to fourth quarter 2009.
The following table presents net income (loss) by market segment.
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '10 '09 '09
------------------ ------- ------- -------
Midwest $26 $12 $29
Western 22 7 (7)
Texas 14 13 15
Florida 1 3 (6)
Other Markets 16 23 22
International 14 - 9
------------- --- --- ---
93 58 62
Finance & Other
Businesses (a) (41) (87) (53)
--------------- --- --- ---
Total $52 $(29) $9
----- --- ---- ---
(a) Includes discontinued operations and items not directly
associated with the geographic markets.
Midwest Market
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr millions) '10 '09 '09 ------------------ ------- ------- ------- Net interest income (FTE) $205 $205 $194 Provision for loan losses 81 101 83 Noninterest income 102 106 127 Noninterest expenses 186 194 194 Net income 26 12 29 Net credit-related charge-offs 55 97 54 Selected average balances: Assets 15,573 16,090 19,139 Loans 15,332 15,811 18,267 Deposits 17,068 17,200 16,697 Net interest margin 4.86% 4.73% 4.30% ------------------- ---- ---- ----
- Average loans decreased $479 million, reflecting declines across most business lines. The decline in loans slowed in the first quarter 2010.
- Average deposits decreased $132 million, due to a decrease in the Retail Bank, partially offset by an increase in Global Corporate Banking.
- The net interest margin of 4.86 percent increased 13 basis points, primarily due to an increase in loan spreads and an increase in deposit spreads related to maturing higher-cost customer certificates of deposit and an increase in money market and NOW deposits.
- The provision for loan losses decreased $20 million, primarily due to decreases in Leasing and Personal Banking.
- Noninterest income decreased $4 million, reflecting small decreases in several categories.
- Noninterest expenses decreased $8 million, due to decreases in salaries and employee benefits expense and other real estate expense, partially offset by an increase in the provision for credit losses on lending-related commitments.
Western Market
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr millions) '10 '09 '09 ------------------ ------- ------- ------- Net interest income (FTE) $161 $163 $146 Provision for loan losses 59 79 88 Noninterest income 36 33 36 Noninterest expenses 105 110 104 Net income (loss) 22 7 (7) Net credit-related charge-offs 64 85 76 Selected average balances: Assets 13,175 13,484 15,443 Loans 12,980 13,289 15,253 Deposits 11,927 11,899 10,640 Net interest margin 5.04% 4.85% 3.91% ------------------- ---- ---- ----
- Average loans decreased $309 million, primarily due to declines in Commercial Real Estate, Technology and Life Sciences and Middle Market. The decline in loans slowed in the first quarter 2010.
- Average deposits increased $28 million, primarily due to increases in Commercial Real Estate and Technology and Life Sciences, partially offset by a decrease in the Financial Services Division.
- The net interest margin of 5.04 percent increased 19 basis points, primarily due to an increase in loan spreads and an increase in deposit spreads related to maturing higher-cost customer certificates of deposit and an increase in NOW balances.
- The provision for loan losses decreased $20 million, reflecting decreases in Global Corporate Banking, Commercial Real Estate, Technology and Life Sciences, National Dealer Services and Leasing, partially offset by increased provisions for Middle Market, Specialty Businesses and Personal Banking.
- Noninterest income increased $3 million, primarily due to an increase in commercial lending fees
- Noninterest expenses decreased $5 million, primarily due to decreases in other real estate expense, net occupancy expense and salaries and employee benefits expense.
Texas Market
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr millions) '10 '09 '09 ------------------ ------- ------- ------- Net interest income (FTE) $79 $78 $70 Provision for loan losses 17 20 9 Noninterest income 20 23 21 Noninterest expenses 60 61 58 Net income 14 13 15 Total net credit- related charge-offs 25 13 8 Selected average balances: Assets 6,892 7,118 8,069 Loans 6,704 6,934 7,847 Deposits 4,957 4,737 4,198 Net interest margin 4.79% 4.46% 3.62% ------------------- ---- ---- ----
- Average loans decreased $230 million, reflecting declines across all business lines. The decline in loans slowed in the first quarter 2010.
- Average deposits increased $220 million, primarily due to an increase in Global Corporate Banking.
- The net interest margin of 4.79 percent increased 33 basis points, primarily due to an increase in loan and deposit spreads and the benefit provided by an increase in noninterest-bearing and NOW deposits.
- The provision for loan losses decreased $3 million, due to declines in Middle Market and Energy Lending, partially offset by an increase in Commercial Real Estate.
- Noninterest income decreased $3 million, partially due to a decrease in commercial lending fees.
Florida Market
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr millions) '10 '09 '09 ------------------ ------- ------- ------- Net interest income (FTE) $10 $10 $11 Provision for loan losses 3 - 15 Noninterest income 3 3 3 Noninterest expenses 9 9 8 Net income (loss) 1 3 (6) Net credit-related charge-offs 10 4 12 Selected average balances: Assets 1,576 1,608 1,869 Loans 1,576 1,613 1,878 Deposits 361 333 253 Net interest margin 2.54% 2.57% 2.31% ------------------- ---- ---- ----
- Average loans decreased $37 million, primarily due to a decrease in Middle Market. The decline in loans slowed in the first quarter 2010.
- Average deposits increased $28 million, primarily due to an increase in Global Corporate Banking.
- The net interest margin of 2.54 percent decreased three basis points.
- The provision for loan losses increased $3 million, primarily due to increases in Commercial Real Estate and Middle Market, partially offset by a decrease in Private Banking.
Conference Call and Webcast
Comerica will host a conference call to review first quarter 2010 financial results at 7 a.m. CT Wednesday, April 21, 2010. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 63304761). The call and supplemental financial information can also be accessed on the Internet at www.comerica.com. A replay will be available approximately two hours following the conference call through April 30, 2010. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 63304761). 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 & Institutional 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 the reconcilement 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," "feels," "expects," "estimates," "seeks," "strives," "plans," "intends," "outlook," "forecast," "position," "target," "mission," "assume," "achievable," "potential," "strategy," "goal," "aspiration," "outcome," "continue," "remain," "maintain," "trend," "objective" 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 further economic downturns, changes in the pace of an economic recovery and related changes in employment levels, changes in real estate values, fuel prices, energy costs or other events that could affect customer income levels or general economic conditions, the effects of recently enacted legislation, actions taken by or proposed by the U.S. Department of Treasury, the Board of Governors of the Federal Reserve System, the Texas Department of Banking and the Federal Deposit Insurance Corporation, legislation enacted in the future, and the impact and expiration of such legislation and regulatory actions, the effects of war and other armed conflicts or acts of terrorism, the effects of natural disasters including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods, the disruption of private or public utilities, the implementation of Comerica's strategies and business models, management's ability to maintain and expand customer relationships, changes in customer borrowing, repayment, investment and deposit practices, management's ability to retain key officers and employees, changes in the accounting treatment of any particular item, the impact of regulatory examinations, declines or other changes in the businesses or industries in which Comerica has a concentration of loans, including, but not limited to, the automotive production industry and the real estate business lines, the anticipated performance of any new banking centers, the entry of new competitors in Comerica's markets, changes in the level of fee income, changes in applicable laws and regulations, including those concerning taxes, banking, securities and insurance, changes in trade, monetary and fiscal policies, including the interest rate policies of the Board of Governors of the Federal Reserve System, fluctuations in inflation or interest rates, changes in general economic, political or industry conditions and related credit and market conditions, the interdependence of financial service companies and adverse conditions in the stock market. 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 11 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2009. 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
------------------
(in millions, except per March 31, December 31, March 31,
share data) 2010 2009 2009
------------------------ ---- ---- ----
PER COMMON SHARE AND
COMMON STOCK DATA
Diluted net loss $(0.46) $(0.42) $(0.16)
Cash dividends declared 0.05 0.05 0.05
Common shareholders'
equity (at period end) 32.15 32.27 33.40
Average diluted shares (in
thousands) 155,155 149,445 149,257
-------------------------- ------- ------- -------
KEY RATIOS
Return on average common
shareholders' equity (5.61)% (5.10)% (1.90)%
Return on average assets 0.36 (0.19) 0.06
Tier 1 common capital
ratio (a) (b) 9.58 8.18 7.32
Tier 1 risk-based capital
ratio (b) 10.40 12.46 11.06
Total risk-based capital
ratio (b) 14.93 16.93 15.36
Leverage ratio (b) 11.00 13.25 11.65
Tangible common equity
ratio (a) 9.68 7.99 7.27
---------------------- ---- ---- ----
AVERAGE BALANCES
Commercial loans $21,015 $21,971 $27,180
Real estate construction
loans 3,386 3,703 4,510
Commercial mortgage loans 10,387 10,393 10,431
Residential mortgage loans 1,632 1,664 1,846
Consumer loans 2,481 2,517 2,574
Lease financing 1,130 1,181 1,300
International loans 1,282 1,324 1,715
----- ----- -----
Total loans 41,313 42,753 49,556
Earning assets 52,941 53,953 61,752
Total assets 57,519 58,396 66,737
Noninterest-bearing
deposits 14,624 14,430 11,364
Interest-bearing core
deposits 22,612 22,312 22,468
Total core deposits 37,236 36,742 33,832
Common shareholders'
equity 5,070 4,876 5,024
Total shareholders' equity 6,864 7,024 7,155
-------------------------- ----- ----- -----
NET INTEREST INCOME
Net interest income (fully
taxable equivalent basis) $416 $398 $386
Fully taxable equivalent
adjustment 1 2 2
Net interest margin 3.18% 2.94% 2.53%
------------------- ---- ---- ----
CREDIT QUALITY
Nonaccrual loans $1,145 $1,165 $982
Reduced-rate loans 17 16 -
--- --- ---
Total nonperforming loans 1,162 1,181 982
Foreclosed property 89 111 91
--- --- ---
Total nonperforming assets 1,251 1,292 1,073
Loans past due 90 days or
more and still accruing 83 101 207
Gross loan charge-offs 184 232 161
Loan recoveries 11 8 4
--- --- ---
Net loan charge-offs 173 224 157
Lending-related
commitment charge-offs - 1 -
--- --- ---
Total net credit-related
charge-offs 173 225 157
Allowance for loan losses 987 985 816
Allowance for credit
losses on lending-
related commitments 44 37 37
--- --- ---
Total allowance for credit
losses 1,031 1,022 853
Allowance for loan losses
as a percentage of total
loans 2.42% 2.34% 1.68%
Net loan charge-offs as a
percentage of average
total loans 1.68 2.09 1.26
Net credit-related
charge-offs as a
percentage of average
total loans 1.68 2.10 1.26
Nonperforming assets as a
percentage of total loans
and foreclosed property 3.06 3.06 2.20
Allowance for loan losses
as a percentage of total
nonperforming loans 85 83 83
------------------------- --- --- ---
(a) See Reconciliation of Non-GAAP Financial Measures.
(b) March 31, 2010 ratios are estimated.
CONSOLIDATED BALANCE SHEETS (unaudited)
Comerica Incorporated and Subsidiaries
March December March
31, 31, 31,
(in millions, except share data) 2010 2009 2009
-------------------------------- ---- ---- ----
ASSETS
Cash and due from banks $769 $774 $952
Interest-bearing deposits with banks 3,860 4,843 2,558
Other short-term investments 165 138 248
Investment securities available-for-
sale 7,346 7,416 10,844
-
Commercial loans 20,756 21,690 26,431
Real estate construction loans 3,202 3,461 4,379
Commercial mortgage loans 10,358 10,457 10,514
Residential mortgage loans 1,631 1,651 1,836
Consumer loans 2,472 2,511 2,577
Lease financing 1,120 1,139 1,232
International loans 1,306 1,252 1,655
------------------- ----- ----- -----
Total loans 40,845 42,161 48,624
Less allowance for loan losses (987) (985) (816)
------------------------------ ---- ---- ----
Net loans 39,858 41,176 47,808
Premises and equipment 637 644 676
Customers' liability on acceptances
outstanding 21 11 10
Accrued income and other assets 4,450 4,247 4,274
------------------------------- ----- ----- -----
Total assets $57,106 $59,249 $67,370
------------ ------- ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $15,290 $15,871 $12,645
Money market and NOW deposits 16,009 14,450 12,240
Savings deposits 1,462 1,342 1,328
Customer certificates of deposit 5,979 6,413 8,815
Other time deposits 814 1,047 6,372
Foreign office time deposits 412 542 494
---------------------------- --- --- ---
Total interest-bearing deposits 24,676 23,794 29,249
------------------------------- ------ ------ ------
Total deposits 39,966 39,665 41,894
Short-term borrowings 489 462 2,207
Acceptances outstanding 21 11 10
Accrued expenses and other liabilities 1,047 1,022 1,464
Medium- and long-term debt 9,915 11,060 14,612
-------------------------- ----- ------ ------
Total liabilities 51,438 52,220 60,187
Fixed rate cumulative perpetual
preferred stock, series F, no par
value, $1,000 liquidation value per
share:
Authorized -2,250,000 shares at
12/31/09 and 3/31/09
Issued - 2,250,000 shares at
12/31/09 and 3/31/09 - 2,151 2,134
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 203,878,110 shares at 3/31/10
and 178,735,252 shares at 12/31/09 and
3/31/09 1,019 894 894
Capital surplus 1,468 740 727
Accumulated other comprehensive loss (303) (336) (238)
Retained earnings 5,064 5,161 5,252
Less cost of common stock in treasury
-27,575,283 shares at 3/31/10,
27,555,623 shares at 12/31/09 and
27,580,899 shares at 3/31/09 (1,580) (1,581) (1,586)
------------------------------------- ------ ------ ------
Total shareholders' equity 5,668 7,029 7,183
-------------------------- ----- ----- -----
Total liabilities and shareholders'
equity $57,106 $59,249 $67,370
----------------------------------- ------- ------- -------
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Three Months
Ended
March 31,
---------
(in millions, except per share data) 2010 2009
------------------------------------ ---- ----
INTEREST INCOME
Interest and fees on loans $412 $452
Interest on investment securities 61 109
Interest on short-term investments 3 2
---------------------------------- --- ---
Total interest income 476 563
INTEREST EXPENSE
Interest on deposits 35 125
Interest on short-term borrowings - 2
Interest on medium- and long-term debt 26 52
-------------------------------------- --- ---
Total interest expense 61 179
---------------------- --- ---
Net interest income 415 384
Provision for loan losses 175 203
------------------------- --- ---
Net interest income after provision
for loan losses 240 181
NONINTEREST INCOME
Service charges on deposit accounts 56 58
Fiduciary income 39 42
Commercial lending fees 22 18
Letter of credit fees 18 16
Card fees 13 12
Foreign exchange income 10 9
Bank-owned life insurance 8 8
Brokerage fees 6 9
Net securities gains 2 13
Other noninterest income 20 38
------------------------ --- ---
Total noninterest income 194 223
NONINTEREST EXPENSES
Salaries 169 171
Employee benefits 44 55
----------------- --- ---
Total salaries and employee benefits 213 226
Net occupancy expense 42 41
Equipment expense 17 16
Outside processing fee expense 23 25
Software expense 22 20
FDIC insurance expense 17 15
Other real estate expense 12 7
Legal fees 9 7
Litigation and operational losses 1 2
Provision for credit losses on lending-
related commitments 7 (1)
Other noninterest expenses 41 39
-------------------------- --- ---
Total noninterest expenses 404 397
-------------------------- --- ---
Income from continuing operations before
income taxes 30 7
Provision (benefit) for income taxes (5) (1)
------------------------------------ --- ---
Income from continuing operations 35 8
Income from discontinued operations, net of
tax 17 1
------------------------------------------- --- ---
NET INCOME 52 9
Preferred stock dividends 123 33
Income allocated to participating
securities - -
Net loss attributable to common shares $(71) $(24)
-------------------------------------- ---- ----
Basic earnings per common share:
Loss from continuing operations $(0.57) $(0.17)
Net loss (0.46) (0.16)
Diluted earnings per common share:
Loss from continuing operations (0.57) (0.17)
Net loss (0.46) (0.16)
Cash dividends declared on common stock 9 7
Cash dividends declared per common share 0.05 0.05
---------------------------------------- ---- ----
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
First Fourth Third Second First
(in millions, except Quarter Quarter Quarter Quarter Quarter
per share data) 2010 2009 2009 2009 2009
-------------------- ---- ---- ---- ---- ----
INTEREST INCOME
Interest and fees on
loans $412 $424 $444 $447 $452
Interest on
investment
securities 61 53 64 103 109
Interest on short-
term investments 3 2 3 2 2
------------------ --- --- --- --- ---
Total interest income 476 479 511 552 563
INTEREST EXPENSE
Interest on deposits 35 52 89 106 125
Interest on short-
term borrowings - - - - 2
Interest on medium-
and long-term debt 26 31 37 44 52
------------------- --- --- --- --- ---
Total interest expense 61 83 126 150 179
---------------------- --- --- --- --- ---
Net interest income 415 396 385 402 384
Provision for loan
losses 175 256 311 312 203
------------------ --- --- --- --- ---
Net interest income
after provision for
loan losses 240 140 74 90 181
NONINTEREST INCOME
Service charges on
deposit accounts 56 56 59 55 58
Fiduciary income 39 38 40 41 42
Commercial lending
fees 22 21 21 19 18
Letter of credit
fees 18 19 18 16 16
Card fees 13 14 13 12 12
Foreign exchange
income 10 11 10 11 9
Bank-owned life
insurance 8 9 8 10 8
Brokerage fees 6 7 7 8 9
Net securities gains 2 10 107 113 13
Other noninterest
income 20 29 32 13 38
----------------- --- --- --- --- ---
Total noninterest
income 194 214 315 298 223
NONINTEREST EXPENSES
Salaries 169 174 171 171 171
Employee benefits 44 51 51 53 55
----------------- --- --- --- --- ---
Total salaries and
employee benefits 213 225 222 224 226
Net occupancy
expense 42 43 40 38 41
Equipment expense 17 16 15 15 16
Outside processing
fee expense 23 23 24 25 25
Software expense 22 23 21 20 20
FDIC insurance
expense 17 15 15 45 15
Other real estate
expense 12 22 10 9 7
Legal fees 9 12 8 10 7
Litigation and
operational losses 1 3 3 2 2
Provision for credit
losses on lending-
related commitments 7 3 2 (4) (1)
Other noninterest
expenses 41 40 39 45 39
----------------- --- --- --- --- ---
Total noninterest
expenses 404 425 399 429 397
----------------- --- --- --- --- ---
Income (loss) from
continuing
operations before
income taxes 30 (71) (10) (41) 7
Provision (benefit)
for income taxes (5) (42) (29) (59) (1)
------------------- --- --- --- --- ---
Income (loss) from
continuing
operations 35 (29) 19 18 8
Income from
discontinued
operations, net of
tax 17 - - - 1
------------------- --- --- --- --- ---
NET INCOME (LOSS) 52 (29) 19 18 9
Preferred stock
dividends 123 33 34 34 33
Income allocated to
participating
securities - - 1 - -
Net loss
attributable to
common shares $(71) $(62) $(16) $(16) $(24)
---------------- ---- ---- ---- ---- ----
Basic earnings per
common share:
Loss from continuing
operations $(0.57) $(0.42) $(0.10) $(0.11) $(0.17)
Net loss (0.46) (0.42) (0.10) (0.11) (0.16)
Diluted earnings per
common share:
Loss from continuing
operations (0.57) (0.42) (0.10) (0.11) (0.17)
Net loss (0.46) (0.42) (0.10) (0.11) (0.16)
Cash dividends
declared on common
stock 9 8 7 8 7
Cash dividends
declared per common
share 0.05 0.05 0.05 0.05 0.05
-------------------- ---- ---- ---- ---- ----
First Quarter 2010 Compared To:
-------------------------------
Fourth Quarter First Quarter
(in millions, except 2009 2009
per share data) Amount Percent Amount Percent
-------------------- ------ ------- ------ -------
INTEREST INCOME
Interest and fees on
loans $(12) (3)% $(40) (9)%
Interest on
investment
securities 8 16 (48) (44)
Interest on short-
term investments 1 49 1 74
------------------ --- --- --- ---
Total interest income (3) (1) (87) (15)
INTEREST EXPENSE
Interest on deposits (17) (30) (90) (72)
Interest on short-
term borrowings - 27 (2) (96)
Interest on medium-
and long-term debt (5) (19) (26) (51)
------------------- --- --- --- ---
Total interest expense (22) (26) (118) (66)
---------------------- --- --- ---- ---
Net interest income 19 5 31 8
Provision for loan
losses (81) (32) (28) (14)
------------------ --- --- --- ---
Net interest income after
provision for loan losses 100 71 59 32
NONINTEREST INCOME
Service charges on
deposit accounts - - (2) (3)
Fiduciary income 1 1 (3) (7)
Commercial lending
fees 1 2 4 21
Letter of credit fees (1) (3) 2 18
Card fees (1) (1) 1 14
Foreign exchange
income (1) (7) 1 4
Bank-owned life
insurance (1) (9) - -
Brokerage fees (1) (15) (3) (35)
Net securities gains (8) (81) (11) (86)
Other noninterest
income (9) (33) (18) (48)
----------------- --- --- --- ---
Total noninterest income (20) (9) (29) (13)
NONINTEREST EXPENSES
Salaries (5) (3) (2) (1)
Employee benefits (7) (14) (11) (20)
----------------- --- --- --- ---
Total salaries and
employee benefits (12) (6) (13) (6)
Net occupancy expense (1) (2) 1 2
Equipment expense 1 6 1 5
Outside processing
fee expense - - (2) (8)
Software expense (1) (3) 2 10
FDIC insurance
expense 2 11 2 11
Other real estate
expense (10) (45) 5 80
Legal fees (3) (27) 2 18
Litigation and
operational losses (2) (43) (1) (33)
Provision for credit
losses on lending-
related commitments 4 N/M 8 N/M
Other noninterest
expenses 1 - 2 9
----------------- --- --- --- ---
Total noninterest expenses (21) (5) 7 2
-------------------------- --- --- --- ---
Income (loss) from
continuing
operations before
income taxes 101 N/M 23 N/M
Provision (benefit)
for income taxes 37 88 (4) N/M
------------------- --- --- ---
Income (loss) from
continuing
operations 64 N/M 27 N/M
Income from
discontinued
operations, net of
tax 17 N/M 16 N/M
------------------- --- --- --- ---
NET INCOME (LOSS) 81 N/M 43 N/M
Preferred stock
dividends 90 N/M 90 N/M
Income allocated to
participating
securities - - - -
Net loss attributable
to common shares $(9) $(14)% $(47) N/M%
--------------------- --- ----- ---- ---
Basic earnings per
common share:
Loss from continuing
operations $(0.15) (0.36)% $(0.40) N/M%
Net loss (0.04) (0.10) (0.30) N/M
Diluted earnings per
common share:
Loss from continuing
operations (0.15) (0.36) (0.40) N/M
Net loss (0.04) (0.10) (0.30) N/M
Cash dividends
declared on common
stock 1 17 2 18
Cash dividends
declared per common
share - - - -
-------------------- --- --- --- ---
N/M - Not meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
2010 2009
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr
------- ------- -------
Balance at beginning of period $985 $953 $880
Loan charge-offs:
Commercial 49 113 113
Real estate construction:
Commercial Real Estate business
line (a) 71 33 63
Other business lines (b) 3 - 1
Total real estate construction 74 33 64
Commercial mortgage:
Commercial Real Estate business
line (a) 16 27 24
Other business lines (b) 28 25 15
Total commercial mortgage 44 52 39
Residential mortgage 2 6 11
Consumer 8 9 7
Lease financing - 6 6
International 7 13 5
------------- --- --- ---
Total loan charge-offs 184 232 245
Recoveries on loans previously
charged-off:
Commercial 7 7 3
Real estate construction 1 - 1
Commercial mortgage 3 1 -
Residential mortgage - - -
Consumer - - 1
Lease financing - - -
International - - 1
Total recoveries 11 8 6
Net loan charge-offs 173 224 239
Provision for loan losses 175 256 311
Foreign currency translation
adjustment - - 1
Balance at end of period $987 $985 $953
------------------------ ---- ---- ----
Allowance for loan losses as a
percentage of total loans 2.42% 2.34% 2.19%
Net loan charge-offs as a
percentage of average total loans 1.68 2.09 2.14
Net credit-related charge-offs as
a percentage of average total
loans 1.68 2.10 2.14
--------------------------------- ---- ---- ----
2009
----
(in millions) 2nd Qtr 1st Qtr
------- -------
Balance at beginning of period $816 $770
Loan charge-offs:
Commercial 88 61
Real estate construction:
Commercial Real Estate business
line (a) 81 57
Other business lines (b) - -
Total real estate construction 81 57
Commercial mortgage:
Commercial Real Estate business
line (a) 23 16
Other business lines (b) 23 18
Total commercial mortgage 46 34
Residential mortgage 2 2
Consumer 12 6
Lease financing 24 -
International 4 1
------------- --- ---
Total loan charge-offs 257 161
Recoveries on loans previously
charged-off:
Commercial 5 3
Real estate construction - -
Commercial mortgage 2 -
Residential mortgage - -
Consumer - 1
Lease financing 1 -
International 1 -
Total recoveries 9 4
Net loan charge-offs 248 157
Provision for loan losses 312 203
Foreign currency translation
adjustment - -
Balance at end of period $880 $816
------------------------ ---- ----
Allowance for loan losses as a
percentage of total loans 1.89% 1.68%
Net loan charge-offs as a
percentage of average total loans 2.08 1.26
Net credit-related charge-offs as
a percentage of average total
loans 2.08 1.26
--------------------------------- ---- ----
(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
2010 2009
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr
------------- ------- ------- -------
Balance at beginning of period $37 $35 $33
Less: Charge-offs on lending-related
commitments (a) - 1 -
Add: Provision for credit losses on
lending-related commitments 7 3 2
Balance at end of period $44 $37 $35
------------------------ --- --- ---
Unfunded lending-related commitments sold $- $3 $1
----------------------------------------- --- --- ---
2009
----
(in millions) 2nd Qtr 1st Qtr
------------- ------- -------
Balance at beginning of period $37 $38
Less: Charge-offs on lending-related
commitments (a) - -
Add: Provision for credit losses on
lending-related commitments (4) (1)
Balance at end of period $33 $37
------------------------ --- ---
Unfunded lending-related commitments sold $- $-
----------------------------------------- --- ---
(a) Charge-offs result from the sale of unfunded lending-related
commitments.
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2010 2009
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr
------------- ------- ---- ----
SUMMARY OF NONPERFORMING ASSETS
AND PAST DUE LOANS
Nonaccrual loans:
Commercial $209 $238 $290
Real estate construction:
Commercial Real Estate
business line (a) 516 507 542
Other business lines
(b) 3 4 4
Total real estate
construction 519 511 546
Commercial mortgage:
Commercial Real Estate
business line (a) 105 127 137
Other business lines
(b) 226 192 161
Total commercial
mortgage 331 319 298
Residential mortgage 58 50 27
Consumer 13 12 8
Lease financing 11 13 18
International 4 22 7
Total nonaccrual loans 1,145 1,165 1,194
Reduced-rate loans 17 16 2
Total nonperforming
loans 1,162 1,181 1,196
Foreclosed property 89 111 109
Total nonperforming
assets $1,251 $1,292 $1,305
------------------- ------ ------ ------
Nonperforming loans as
a percentage of total
loans 2.85% 2.80% 2.74%
Nonperforming assets
as a percentage of
total loans and
foreclosed property 3.06 3.06 2.99
Allowance for loan
losses as a
percentage of total
nonperforming loans 85 83 80
Loans past due 90 days
or more and still
accruing $83 $101 $161
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at
beginning of period $1,165 $1,194 $1,130
Loans transferred to
nonaccrual (c) 245 266 361
Nonaccrual business
loan gross charge-
offs (d) (174) (217) (226)
Loans transferred to
accrual status (c) - - (4)
Nonaccrual business
loans sold (e) (44) (10) (41)
Payments/Other (f) (47) (68) (26)
Nonaccrual loans at
end of period $1,145 $1,165 $1,194
------------------- ------ ------ ------
(a) Primarily loans to real estate investors and developers.
(b) Primarily loans secured by owner-occupied real estate.
(c) Based on an analysis of nonaccrual loans with book
balances greater than $2 million.
(d) Analysis of gross loan charge-offs:
Nonaccrual business
loans $174 $217 $226
Performing watch list
loans - - 1
Consumer and
residential mortgage
loans 10 15 18
--- --- ---
Total gross loan charge-offs $184 $232 $245
----
(e) Analysis of loans sold:
Nonaccrual business
loans $44 $10 $41
Performing watch list
loans 12 1 24
--- --- ---
Total loans sold $56 $11 $65
---------------- --- --- ---
2009
----
(in millions) 2nd Qtr 1st Qtr
------------- ------- -------
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE
LOANS
Nonaccrual loans:
Commercial $327 $258
Real estate construction:
Commercial Real Estate business line
(a) 472 426
Other business lines (b) 4 5
Total real estate construction 476 431
Commercial mortgage:
Commercial Real Estate business line
(a) 134 131
Other business lines (b) 175 138
Total commercial mortgage 309 269
Residential mortgage 7 8
Consumer 7 8
Lease financing - 2
International 4 6
Total nonaccrual loans 1,130 982
Reduced-rate loans - -
Total nonperforming loans 1,130 982
Foreclosed property 100 91
Total nonperforming assets $1,230 $1,073
-------------------------- ------ ------
Nonperforming loans as a percentage of
total loans 2.43% 2.02%
Nonperforming assets as a percentage
of total loans and foreclosed
property 2.64 2.20
Allowance for loan losses as a
percentage of total nonperforming
loans 78 83
Loans past due 90 days or more and
still accruing $210 $207
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of
period $982 $917
Loans transferred to nonaccrual (c) 419 241
Nonaccrual business loan gross charge-
offs (d) (242) (153)
Loans transferred to accrual status (c) - (4)
Nonaccrual business loans sold (e) (10) (3)
Payments/Other (f) (19) (16)
Nonaccrual loans at end of period $1,130 $982
--------------------------------- ------ ----
(a) Primarily loans to real estate investors and developers.
(b) Primarily loans secured by owner-occupied real estate.
(c) Based on an analysis of nonaccrual loans with book balances
greater than $2 million.
(d) Analysis of gross loan charge-offs:
Nonaccrual business loans $242 $153
Performing watch list loans 1 -
Consumer and residential mortgage
loans 14 8
--- ---
Total gross loan charge-offs $257 $161
(e) Analysis of loans sold:
Nonaccrual business loans $10 $3
Performing watch list loans 6 -
--- ---
Total loans sold $16 $3
---------------- --- ---
(f) Includes net changes related to nonaccrual loans with balances
less than $2 million, payments on nonaccrul loans with book balances
greater than $2 million and transfers of nonaccrual loans to
foreclosed property. Excludes business loan gross charge-offs and
business nonaccrual loans sold.
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
------------------
March 31, 2010
--------------
Average Average
(dollar amounts in millions) Balance Interest Rate
---------------------------- ------- -------- ----
Commercial loans $21,015 $205 3.96%
Real estate construction loans 3,386 25 2.95
Commercial mortgage loans 10,387 107 4.18
Residential mortgage loans 1,632 22 5.41
Consumer loans 2,481 22 3.58
Lease financing 1,130 11 3.75
International loans 1,282 12 3.93
Business loan swap income - 8 -
--- --- ---
Total loans 41,313 412 4.04
Auction-rate securities available-
for-sale 879 2 0.93
Other investment securities
available-for-sale 6,503 60 3.72
----- --- ----
Total investment securities
available-for-sale 7,382 62 3.38
Federal funds sold and securities
purchased under agreements to
resell - - -
Interest-bearing deposits with
banks (a) 4,122 2 0.25
Other short-term investments 124 1 1.75
--- --- ----
Total earning assets 52,941 477 3.65
Cash and due from banks 788
Allowance for loan losses (1,058)
Accrued income and other assets 4,848
-----
Total assets $57,519
-------
Money market and NOW deposits $15,055 12 0.32
Savings deposits 1,384 - 0.07
Customer certificates of deposit 6,173 15 1.02
----- --- ----
Total interest-bearing core
deposits 22,612 27 0.50
Other time deposits 877 8 3.53
Foreign office time deposits 458 - 0.21
--- --- ----
Total interest-bearing deposits 23,947 35 0.60
Short-term borrowings 234 - 0.11
Medium- and long-term debt 10,775 26 0.95
------ --- ----
Total interest-bearing sources 34,956 61 0.71
--- ----
Noninterest-bearing deposits 14,624
Accrued expenses and other
liabilities 1,075
Total shareholders' equity 6,864
-----
Total liabilities and shareholders'
equity $57,519
-------
Net interest income/rate spread
(FTE) $416 2.94
----
FTE adjustment $1
---
Impact of net noninterest-bearing
sources of funds 0.24
----
Net interest margin (as a
percentage of average earning
assets) (FTE) (a) 3.18%
------------------------------ ----
Three Months Ended
------------------
December 31, 2009
-----------------
Average Average
(dollar amounts in millions) Balance Interest Rate
---------------------------- ------- -------- ----
Commercial loans $21,971 $212 3.84%
Real estate construction loans 3,703 27 2.90
Commercial mortgage loans 10,393 110 4.19
Residential mortgage loans 1,664 21 5.01
Consumer loans 2,517 23 3.59
Lease financing 1,181 11 3.80
International loans 1,324 12 3.73
Business loan swap income - 9 -
--- --- ---
Total loans 42,753 425 3.95
Auction-rate securities available-
for-sale 923 3 1.37
Other investment securities
available-for-sale 7,664 51 2.67
----- --- ----
Total investment securities
available-for-sale 8,587 54 2.53
Federal funds sold and securities
purchased under agreements to
resell 1 - 0.29
Interest-bearing deposits with
banks (a) 2,480 1 0.25
Other short-term investments 132 1 1.55
--- --- ----
Total earning assets 53,953 481 3.55
Cash and due from banks 831
Allowance for loan losses (1,048)
Accrued income and other assets 4,660
-----
Total assets $58,396
-------
Money market and NOW deposits $14,113 14 0.39
Savings deposits 1,376 - 0.08
Customer certificates of deposit 6,823 25 1.42
----- --- ----
Total interest-bearing core
deposits 22,312 39 0.69
Other time deposits 1,493 12 3.22
Foreign office time deposits 550 - 0.22
--- --- ----
Total interest-bearing deposits 24,355 51 0.83
Short-term borrowings 222 - 0.09
Medium- and long-term debt 11,140 32 1.12
------ --- ----
Total interest-bearing sources 35,717 83 0.92
--- ----
Noninterest-bearing deposits 14,430
Accrued expenses and other
liabilities 1,225
Total shareholders' equity 7,024
-----
Total liabilities and shareholders'
equity $58,396
-------
Net interest income/rate spread
(FTE) $398 2.63
----
FTE adjustment $2
---
Impact of net noninterest-bearing
sources of funds 0.31
----
Net interest margin (as a
percentage of average earning
assets) (FTE) (a) 2.94%
------------------------------ ----
Three Months Ended
------------------
March 31, 2009
--------------
Average Average
(dollar amounts in millions) Balance Interest Rate
---------------------------- ------- -------- ----
Commercial loans $27,180 $228 3.39%
Real estate construction loans 4,510 33 2.99
Commercial mortgage loans 10,431 109 4.22
Residential mortgage loans 1,846 26 5.66
Consumer loans 2,574 24 3.79
Lease financing 1,300 9 2.82
International loans 1,715 16 3.85
Business loan swap income - 8 -
--- --- ---
Total loans 49,556 453 3.70
Auction-rate securities available-
for-sale 1,108 5 1.71
Other investment securities
available-for-sale 9,018 105 4.82
----- --- ----
Total investment securities
available-for-sale 10,126 110 4.46
Federal funds sold and securities
purchased under agreements to
resell 57 - 0.32
Interest-bearing deposits with
banks (a) 1,848 1 0.23
Other short-term investments 165 1 1.67
--- --- ----
Total earning assets 61,752 565 3.71
Cash and due from banks 950
Allowance for loan losses (832)
Accrued income and other assets 4,867
-----
Total assets $66,737
-------
Money market and NOW deposits $12,334 19 0.63
Savings deposits 1,278 1 0.18
Customer certificates of deposit 8,856 58 2.67
----- --- ----
Total interest-bearing core
deposits 22,468 78 1.41
Other time deposits 6,280 46 3.01
Foreign office time deposits 670 1 0.42
--- --- ----
Total interest-bearing deposits 29,418 125 1.73
Short-term borrowings 2,362 2 0.29
Medium- and long-term debt 14,924 52 1.40
------ --- ----
Total interest-bearing sources 46,704 179 1.55
--- ----
Noninterest-bearing deposits 11,364
Accrued expenses and other
liabilities 1,514
Total shareholders' equity 7,155
-----
Total liabilities and shareholders'
equity $66,737
-------
Net interest income/rate spread
(FTE) $386 2.16
----
FTE adjustment $2
---
Impact of net noninterest-bearing
sources of funds 0.37
----
Net interest margin (as a
percentage of average earning
assets) (FTE) (a) 2.53%
------------------------------ ----
(a) Excess liquidity, represented by average balances deposited with
the Federal Reserve Bank, reduced the net interest margin by 24
basis points in the first quarter of 2010, and by 13 basis points
and 7 basis points in the fourth and first quarters of 2009,
respectively. Excluding excess liquidity, the net interest margin
would have been 3.42%, 3.07% and 2.60% in each respective period.
See Reconciliation of Non-GAAP Financial Measures.
CONSOLIDATED STATISTICAL DATA (unaudited)
Comerica Incorporated and Subsidiaries
March December September
(in millions, except per share 31, 31, 30,
data) 2010 2009 2009
------------------------------ ---- ---- ----
Commercial loans:
Floor plan $1,351 $1,367 $857
Other 19,405 20,323 21,689
----- ------ ------ ------
Total commercial loans 20,756 21,690 22,546
Real estate construction loans:
Commercial Real Estate business
line (a) 2,741 2,988 3,328
Other business lines (b) 461 473 542
------------------------ --- --- ---
Total real estate construction
loans 3,202 3,461 3,870
Commercial mortgage loans:
Commercial Real Estate business
line (a) 1,880 1,824 1,678
Other business lines (b) 8,478 8,633 8,702
------------------------ ----- ----- -----
Total commercial mortgage
loans 10,358 10,457 10,380
Residential mortgage loans 1,631 1,651 1,679
Consumer loans:
Home equity 1,769 1,803 1,804
Other consumer 703 708 740
-------------- --- --- ---
Total consumer loans 2,472 2,511 2,544
Lease financing 1,120 1,139 1,197
International loans 1,306 1,252 1,355
------------------- ----- ----- -----
Total loans $40,845 $42,161 $43,571
----------- ------- ------- -------
Goodwill $150 $150 $150
Loan servicing rights 6 7 8
Tier 1 common capital ratio (c) (d) 9.58% 8.18% 8.04%
Tier 1 risk-based capital ratio (d) 10.40 12.46 12.21
Total risk-based capital ratio (d) 14.93 16.93 16.79
Leverage ratio (d) 11.00 13.25 12.46
Tangible common equity ratio (c) 9.68 7.99 7.96
Book value per common share $32.15 $32.27 $32.36
Market value per share for the
quarter:
High 39.36 32.30 31.83
Low 29.68 26.49 19.94
Close 38.04 29.57 29.67
Quarterly ratios:
Return on average common
shareholders' equity (5.61)% (5.10)% (1.27)%
Return on average assets 0.36 (0.19) 0.12
Efficiency ratio 66.45 70.68 67.14
Number of banking centers 449 447 444
Number of employees -full time
equivalent 9,215 9,330 9,384
June March
(in millions, except per share 30, 31,
data) 2009 2009
------------------------------ ---- ----
Commercial loans:
Floor plan $1,492 $1,763
Other 23,430 24,668
----- ------ ------
Total commercial loans 24,922 26,431
Real estate construction loans:
Commercial Real Estate business
line (a) 3,500 3,711
Other business lines (b) 652 668
------------------------ --- ---
Total real estate construction
loans 4,152 4,379
Commercial mortgage loans:
Commercial Real Estate business
line (a) 1,728 1,659
Other business lines (b) 8,672 8,855
------------------------ ----- -----
Total commercial mortgage
loans 10,400 10,514
Residential mortgage loans 1,759 1,836
Consumer loans:
Home equity 1,801 1,791
Other consumer 761 786
-------------- --- ---
Total consumer loans 2,562 2,577
Lease financing 1,234 1,232
International loans 1,523 1,655
------------------- ----- -----
Total loans $46,552 $48,624
----------- ------- -------
Goodwill $150 $150
Loan servicing rights 9 10
Tier 1 common capital ratio (c) (d) 7.66% 7.32%
Tier 1 risk-based capital ratio (d) 11.58 11.06
Total risk-based capital ratio (d) 15.97 15.36
Leverage ratio (d) 12.11 11.65
Tangible common equity ratio (c) 7.55 7.27
Book value per common share $32.78 $33.40
Market value per share for the
quarter:
High 26.47 21.20
Low 16.03 11.72
Close 21.15 18.31
Quarterly ratios:
Return on average common
shareholders' equity (1.25)% (1.90)%
Return on average assets 0.11 0.06
Efficiency ratio 72.75 66.61
Number of banking centers 441 440
Number of employees -full time
equivalent 9,497 9,696
(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) March 31, 2010 ratios are estimated.
PARENT COMPANY ONLY BALANCE SHEETS (unaudited)
Comerica Incorporated
March December
31, 31, March 31,
(in millions, except share data) 2010 2009 2009
-------------------------------- ---- ---- ----
ASSETS
Cash and due from subsidiary bank $14 $5 $15
Short-term investments with subsidiary
bank 651 2,150 2,229
Other short-term investments 86 86 75
Investment in subsidiaries, principally
banks 5,818 5,710 5,780
Premises and equipment 4 4 4
Other assets 206 186 216
Total assets $6,779 $8,141 $8,319
------------ ------ ------ ------
LIABILITIES AND SHAREHOLDERS' EQUITY
Medium- and long-term debt $989 $986 $999
Other liabilities 122 126 137
Total liabilities 1,111 1,112 1,136
Fixed rate cumulative perpetual
preferred stock, series F, no par
value, $1,000 liquidation preference
per share:
Authorized -2,250,000 shares at
12/31/09 and 3/31/09
Issued - 2,250,000 shares at 12/31/09
and 3/31/09 - 2,151 2,134
Common stock - $5 par value:
Authorized -325,000,000 shares
Issued - 203,878,110 shares at 3/31/10
and 178,735,252 shares at 12/31/09
and 3/31/09 1,019 894 894
Capital surplus 1,468 740 727
Accumulated other comprehensive loss (303) (336) (238)
Retained earnings 5,064 5,161 5,252
Less cost of common stock in treasury -
27,575,283 shares at 3/31/10,
27,555,623 shares at 12/31/09 and
27,580,899 shares at 3/31/09 (1,580) (1,581) (1,586)
Total shareholders' equity 5,668 7,029 7,183
Total liabilities and shareholders'
equity $6,779 $8,141 $8,319
----------------------------------- ------ ------ ------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Comerica Incorporated and Subsidiaries
Common Stock
------------
(in millions, except per Preferred Shares Capital
share data) Stock Outstanding Amount Surplus
------------------------ ----- ----------- ------ -------
BALANCE AT DECEMBER 31, 2008 $2,129 150.5 $894 $722
Net income - - - -
Other comprehensive income,
net of tax - - - -
Total comprehensive income
Cash dividends declared on
preferred stock - - - -
Cash dividends declared on
common stock ($0.05 per
share) - - - -
Accretion of discount on
preferred stock 5 - - -
Net issuance of common stock
under employee stock plans - 0.7 - (12)
Share-based compensation - - - 11
Other - - - 6
----- --- --- --- ---
BALANCE AT MARCH 31, 2009 $2,134 151.2 $894 $727
------------------------- ------ ----- ---- ----
BALANCE AT DECEMBER 31, 2009 $2,151 151.2 $894 $740
Net income - - - -
Other comprehensive income,
net of tax - - - -
Total comprehensive income
Cash dividends declared on
preferred stock - - - -
Cash dividends declared on
common stock ($0.05 per
share) - - - -
Purchase of common stock - - - -
Issuance of common stock - 25.1 125 724
Redemption of preferred
stock (2,250) - - -
Redemption discount
accretion on preferred
stock 94 - - -
Accretion of discount on
preferred stock 5 - - -
Net issuance of common stock
under employee stock plans - - - -
Share-based compensation - - - 4
Other - - - -
BALANCE AT MARCH 31, 2010 $- 176.3 $1,019 $1,468
------------------------- --- ----- ------ ------
Accumulated
(in millions, Other Total
except per share Comprehensive Retained Treasury Shareholders'
data) Loss Earnings Stock Equity
----------------- ---- -------- ----- ------
BALANCE AT DECEMBER
31, 2008 $(309) $5,345 $(1,629) $7,152
Net income - 9 - 9
Other comprehensive
income, net of tax 71 - - 71
---
Total comprehensive
income 80
Cash dividends
declared on
preferred stock - (57) - (57)
Cash dividends
declared on common
stock ($0.05 per
share) - (7) - (7)
Accretion of
discount on
preferred stock - (5) - -
Net issuance of
common stock under
employee stock
plans - (33) 43 (2)
Share-based
compensation - - - 11
Other - - - 6
----- --- --- ---
BALANCE AT MARCH
31, 2009 $(238) $5,252 $(1,586) $7,183
---------------- ----- ------ ------- ------
BALANCE AT DECEMBER
31, 2009 $(336) $5,161 $(1,581) $7,029
Net income - 52 - 52
Other comprehensive
income, net of tax 33 - - 33
---
Total comprehensive
income 85
Cash dividends
declared on
preferred stock - (38) - (38)
Cash dividends
declared on common
stock ($0.05 per
share) - (9) - (9)
Purchase of common
stock - - (2) (2)
Issuance of common
stock - - - 849
Redemption of
preferred stock - - - (2,250)
Redemption discount
accretion on
preferred stock - (94) - -
Accretion of
discount on
preferred stock - (5) - -
Net issuance of
common stock under
employee stock
plans - (3) 3 -
Share-based
compensation - - - 4
Other - - - -
BALANCE AT MARCH
31, 2010 $(303) $5,064 $(1,580) $5,668
---------------- ----- ------ ------- ------
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in millions) Wealth &
Three Months Ended March 31, Business Retail Institutional
2010 Bank Bank Management
---------------------------- ---- ---- ----------
Earnings summary:
Net interest income (expense)
(FTE) $341 $130 $42
Provision for loan losses 137 31 12
Noninterest income 76 44 60
Noninterest expenses 162 154 73
Provision (benefit) for income
taxes (FTE) 29 (4) 6
Income from discontinued
operations, net of tax - - -
Net income (loss) $89 $(7) $11
--- --- ---
Net credit-related charge-offs $137 $26 $10
Selected average balances:
Assets $31,293 $6,106 $4,862
Loans 30,918 5,599 4,789
Deposits 17,750 16,718 2,791
Liabilities 17,711 16,678 2,777
Attributed equity 3,159 589 357
Statistical data:
Return on average assets (a) 1.13% (0.17)% 0.92%
Return on average attributed
equity 11.24 (4.86) 12.50
Net interest margin (b) 4.48 3.18 3.53
Efficiency ratio 38.72 88.44 73.18
(dollar amounts in millions)
Three Months Ended March 31,
2010 Finance Other Total
---------------------------- ------- ----- -----
Earnings summary:
Net interest income (expense)
(FTE) $(105) $8 $416
Provision for loan losses - (5) 175
Noninterest income 12 2 194
Noninterest expenses 2 13 404
Provision (benefit) for income
taxes (FTE) (36) 1 (4)
Income from discontinued
operations, net of tax - 17 17
Net income (loss) $(59) $18 $52
---- --- ---
Net credit-related charge-offs $- $- $173
Selected average balances:
Assets $9,416 $5,842 $57,519
Loans 9 (2) 41,313
Deposits 1,218 94 38,571
Liabilities 12,601 888 50,655
Attributed equity 919 1,840 6,864
Statistical data:
Return on average assets (a) N/M N/M 0.36%
Return on average attributed
equity N/M N/M (5.61)
Net interest margin (b) N/M N/M 3.18
Efficiency ratio N/M N/M 66.45
--- --- -----
Wealth &
Three Months Ended December 31, Business Retail Institutional
2009 Bank Bank Management
------------------------------- ---- ---- ----------
Earnings summary:
Net interest income (expense)
(FTE) $343 $129 $42
Provision for loan losses 179 36 19
Noninterest income 77 48 60
Noninterest expenses 165 161 76
Provision (benefit) for income
taxes (FTE) 11 (8) 2
Income from discontinued
operations, net of tax - - -
Net income (loss) $65 $(12) $5
--- ---- ---
Net credit-related charge-offs $183 $30 $12
Selected average balances:
Assets $32,655 $6,257 $4,841
Loans 32,289 5,733 4,746
Deposits 16,944 17,020 2,849
Liabilities 16,903 16,978 2,837
Attributed equity 3,376 606 373
Statistical data:
Return on average assets (a) 0.80% (0.27)% 0.38%
Return on average attributed
equity 7.70 (7.76) 4.91
Net interest margin (b) 4.21 3.02 3.50
Efficiency ratio 39.22 90.98 75.98
----------------
Three Months Ended December 31,
2009 Finance Other Total
------------------------------- ------- ----- -----
Earnings summary:
Net interest income (expense)
(FTE) $(125) $9 $398
Provision for loan losses - 22 256
Noninterest income 26 3 214
Noninterest expenses 2 21 425
Provision (benefit) for income
taxes (FTE) (39) (6) (40)
Income from discontinued
operations, net of tax - - -
Net income (loss) $(62) $(25) $(29)
---- ---- ----
Net credit-related charge-offs $- $- $225
Selected average balances:
Assets $10,683 $3,960 $58,396
Loans - (15) 42,753
Deposits 1,892 80 38,785
Liabilities 13,722 932 51,372
Attributed equity 899 1,770 7,024
Statistical data:
Return on average assets (a) N/M N/M (0.19)%
Return on average attributed
equity N/M N/M (5.10)
Net interest margin (b) N/M N/M 2.94
Efficiency ratio N/M N/M 70.68
---------------- --- --- -----
Wealth &
Three Months Ended March 31, Business Retail Institutional
2009 Bank Bank Management
---------------------------- ---- ---- ----------
Earnings summary:
Net interest income (expense)
(FTE) $312 $126 $36
Provision for loan losses 177 23 10
Noninterest income 93 46 70
Noninterest expenses 157 161 75
Provision (benefit) for income
taxes (FTE) 15 (5) 8
Income from discontinued
operations, net of tax - - -
Net income (loss) $56 $(7) $13
--- --- ---
Net credit-related charge-offs $123 $26 $8
Selected average balances:
Assets $39,505 $6,875 $4,870
Loans 38,527 6,284 4,750
Deposits 14,040 17,391 2,429
Liabilities 14,372 17,367 2,418
Attributed equity 3,345 658 340
Statistical data:
Return on average assets (a) 0.57% (0.16)% 1.10%
Return on average attributed
equity 6.78 (4.48) 15.80
Net interest margin (b) 3.28 2.93 3.11
Efficiency ratio 38.55 94.01 74.09
---------------- ----- ----- -----
Three Months Ended March 31,
2009 Finance Other Total
---------------------------- ------- ----- -----
Earnings summary:
Net interest income (expense)
(FTE) $(99) $11 $386
Provision for loan losses - (7) 203
Noninterest income 20 (6) 223
Noninterest expenses 4 - 397
Provision (benefit) for income
taxes (FTE) (33) 16 1
Income from discontinued
operations, net of tax - 1 1
Net income (loss) $(50) $(3) $9
---- --- ---
Net credit-related charge-offs $- $- $157
Selected average balances:
Assets $12,703 $2,784 $66,737
Loans (4) (1) 49,556
Deposits 6,786 136 40,782
Liabilities 24,914 511 59,582
Attributed equity 1,177 1,635 7,155
Statistical data:
Return on average assets (a) N/M N/M 0.06%
Return on average attributed
equity N/M N/M (1.90)
Net interest margin (b) N/M N/M 2.53
Efficiency ratio N/M N/M 66.61
---------------- --- --- -----
(a) Return on average assets is calculated based on the greater of
average assets or average liabilities and attributed equity.
(b) Net interest margin is calculated based on the greater of average
earning assets or average deposits and purchased funds.
FTE - Fully Taxable Equivalent
N/M – Not Meaningful
MARKET SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in millions)
Three Months Ended March 31,
2010 Midwest Western Texas Florida
---------------------------- ------- ------- ----- -------
Earnings summary:
Net interest income (expense)
(FTE) $205 $161 $79 $10
Provision for loan losses 81 59 17 3
Noninterest income 102 36 20 3
Noninterest expenses 186 105 60 9
Provision (benefit) for income
taxes (FTE) 14 11 8
Income from discontinued
operations,
net of tax - - - -
Net income (loss) $26 $22 $14 $1
--- --- --- ---
Net credit-related charge-offs $55 $64 $25 $10
Selected average balances:
Assets $15,573 $13,175 $6,892 $1,576
Loans 15,332 12,980 6,704 1,576
Deposits 17,068 11,927 4,957 361
Liabilities 17,044 11,846 4,941 347
Attributed equity 1,446 1,315 670 164
Statistical data:
Return on average assets (a) 0.55 % 0.67 % 0.84 % 0.17 %
Return on average attributed
equity 7.09 6.68 8.66 1.60
Net interest margin (b) 4.86 5.04 4.79 2.54
Efficiency ratio 60.64 53.08 60.36 72.04
----------------
(dollar amounts in millions) Finance
Three Months Ended March 31, Other & Other
2010 Markets International Businesses Total
---------------------------- ------- ------------- ---------- -----
Earnings summary:
Net interest income (expense)
(FTE) $40 $18 $(97) $416
Provision for loan losses 23 (3) (5) 175
Noninterest income 10 9 14 194
Noninterest expenses 21 8 15 404
Provision (benefit) for
income taxes (FTE) (10) 8 (35) (4)
Income from discontinued
operations,
net of tax - - 17 17
Net income (loss) $16 $14 $(41) $52
--- --- ---- ---
Net credit-related charge-
offs $14 $5 $- $173
Selected average balances:
Assets $3,417 $1,628 $15,258 $57,519
Loans 3,126 1,588 7 41,313
Deposits 1,973 973 1,312 38,571
Liabilities 2,010 978 13,489 50,655
Attributed equity 352 158 2,759 6,864
Statistical data:
Return on average assets (a) 1.85 % 3.50 % N/M 0.36%
Return on average attributed
equity 17.97 36.09 N/M (5.61)
Net interest margin (b) 5.23 4.64 N/M 3.18
Efficiency ratio 43.87 29.12 N/M 66.45
---------------- --
Three Months Ended December 31,
2009 Midwest Western Texas Florida
------------------------------- ------- ------- ----- -------
Earnings summary:
Net interest income (expense)
(FTE) $205 $163 $78 $10
Provision for loan losses 101 79 20 -
Noninterest income 106 33 23 3
Noninterest expenses 194 110 61 9
Provision (benefit) for income
taxes (FTE) 4 7 1
Income from discontinued
operations,
net of tax - - - -
Net income (loss) $12 $7 $13 $3
--- --- --- ---
Net credit-related charge-offs $97 $85 $13 $4
Selected average balances:
Assets $16,090 $13,484 $7,118 $1,608
Loans 15,811 13,289 6,934 1,613
Deposits 17,200 11,899 4,737 333
Liabilities 17,185 11,817 4,723 318
Attributed equity 1,529 1,386 691 176
Statistical data:
Return on average assets (a) 0.26 % 0.21 % 0.75 % 0.63 %
Return on average attributed
equity 3.17 2.00 7.73 5.72
Net interest margin (b) 4.73 4.85 4.46 2.57
Efficiency ratio 62.55 56.08 60.22 69.94
----------------
Finance
Three Months Ended December Other & Other
31, 2009 Markets International Businesses Total
--------------------------- ------- ------------- ---------- -----
Earnings summary:
Net interest income
(expense) (FTE) $40 $18 $(116) $398
Provision for loan losses 15 19 22 256
Noninterest income 11 9 29 214
Noninterest expenses 20 8 23 425
Provision (benefit) for
income taxes (FTE) (7) (45) (40)
Income from discontinued
operations,
net of tax - - - -
Net income (loss) $23 $- $(87) $(29)
--- --- ---- ----
Net credit-related charge-
offs $13 $13 $- $225
Selected average balances:
Assets $3,765 $1,688 $14,643 $58,396
Loans 3,458 1,663 (15) 42,753
Deposits 1,705 939 1,972 38,785
Liabilities 1,747 928 14,654 51,372
Attributed equity 401 172 2,669 7,024
Statistical data:
Return on average assets (a) 2.41 % 0.06 % N/M (0.19)%
Return on average attributed
equity 22.60 0.58 N/M (5.10)
Net interest margin (b) 4.57 4.22 N/M 2.94
Efficiency ratio 40.93 28.74 N/M 70.68
---------------- --
Three Months Ended March 31,
2009 Midwest Western Texas Florida
---------------------------- ------- ------- ----- -------
Earnings summary:
Net interest income (expense)
(FTE) $194 $146 $70 $11
Provision for loan losses 83 88 9 15
Noninterest income 127 36 21 3
Noninterest expenses 194 104 58 8
Provision (benefit) for income
taxes (FTE) 15 (3) 9 (3)
Income from discontinued
operations,
net of tax - - - -
Net income (loss) $29 $(7) $15 $(6)
--- --- --- ---
Net credit-related charge-offs $54 $76 $8 $12
Selected average balances:
Assets $19,139 $15,443 $8,069 $1,869
Loans 18,267 15,253 7,847 1,878
Deposits 16,697 10,640 4,198 253
Liabilities 17,012 10,571 4,212 245
Attributed equity 1,604 1,375 679 152
Statistical data:
Return on average assets (a) 0.62 % (0.18)% 0.72 % (1.29)%
Return on average attributed
equity 7.45 (1.98) 8.53 (15.87)
Net interest margin (b) 4.30 3.91 3.62 2.31
Efficiency ratio 60.06 57.17 64.43 61.06
---------------- - -
Finance
Three Months Ended March 31, Other & Other
2009 Markets International Businesses Total
---------------------------- ------- ------------- ---------- -----
Earnings summary:
Net interest income
(expense) (FTE) $39 $14 $(88) $386
Provision for loan losses 15 - (7) 203
Noninterest income 14 8 14 223
Noninterest expenses 21 8 4 397
Provision (benefit) for
income taxes (FTE) (5) 5 (17) 1
Income from discontinued
operations,
net of tax - - 1 1
Net income (loss) $22 $9 $(53) $9
--- --- ---- ---
Net credit-related charge-
offs $6 $1 $- $157
Selected average balances:
Assets $4,553 $2,177 $15,487 $66,737
Loans 4,246 2,070 (5) 49,556
Deposits 1,359 713 6,922 40,782
Liabilities 1,415 702 25,425 59,582
Attributed equity 383 150 2,812 7,155
Statistical data:
Return on average assets (a) 1.93 % 1.69 % N/M 0.06%
Return on average attributed
equity 22.97 24.55 N/M (1.90)
Net interest margin (b) 3.65 2.74 N/M 2.53
Efficiency ratio 43.82 33.86 N/M 66.61
---------------- --
(a) Return on average assets is calculated based on the greater of
average assets or average liabilities and attributed equity.
(b) Net interest margin is calculated based on the greater of average
earning assets or average deposits and purchased funds.
FTE - Fully Taxable Equivalent
N/M – Not Meaningful
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in March 31, December 31, September 30,
millions) 2010 2009 2009
------------------ ---- ---- ----
Tier 1 capital (a) (b) $6,311 $7,704 $7,735
Less:
Fixed rate cumulative
perpetual preferred stock - 2,151 2,145
Trust preferred securities 495 495 495
-------------------------- --- --- ---
Tier 1 common capital (b) $5,816 $5,058 $5,095
------------------------- ------ ------ ------
Risk-weighted assets (a)
(b) $60,680 $61,815 $63,355
Tier 1 common capital
ratio (b) 9.58% 8.18% 8.04%
--------------------- ---- ---- ----
Total shareholders' equity $5,668 $7,029 $7,035
Less:
Fixed rate cumulative
perpetual preferred stock - 2,151 2,145
Goodwill 150 150 150
Other intangible assets 7 8 8
----------------------- --- --- ---
Tangible common equity $5,511 $4,720 $4,732
---------------------- ------ ------ ------
Total assets $57,106 $59,249 $59,590
Less:
Goodwill 150 150 150
Other intangible assets 7 8 8
----------------------- --- --- ---
Tangible assets $56,949 $59,091 $59,432
--------------- ------- ------- -------
Tangible common equity
ratio 9.68% 7.99% 7.96%
---------------------- ---- ---- ----
2010 2009
---- ----
1st Qtr 4th Qtr 3rd Qtr
------- ------- -------
Net interest income (FTE) $416 $398 $387
Less:
Interest earned on excess
liquidity (c) 3 2 2
------------------------- --- --- ---
Net interest income (FTE),
excluding excess
liquidity $413 $396 $385
-------------------------- ---- ---- ----
Average earning assets $52,941 $53,953 $57,513
Less:
Average net unrealized
gains on investment
securities available-
for-sale 62 107 102
---------------------- --- --- ---
Average earning assets for
net interest margin (FTE) 52,879 53,846 57,411
Less:
Excess liquidity (c) 4,092 2,453 3,492
-------------------- ----- ----- -----
Average earning assets for
net interest margin
(FTE), excluding excess
liquidity $48,787 $51,393 $53,919
-------------------------- ------- ------- -------
Net interest margin (FTE) 3.18% 2.94% 2.68%
Net interest margin (FTE),
excluding excess
liquidity 3.42 3.07 2.84
Impact of excess liquidity
on net interest margin
(FTE) (0.24) (0.13) (0.16)
-------------------------- ----- ----- -----
June 30, March 31,
(dollar amounts in millions) 2009 2009
---------------------------- ---- ----
Tier 1 capital (a) (b) $7,774 $7,760
Less:
Fixed rate cumulative perpetual
preferred stock 2,140 2,134
Trust preferred securities 495 495
-------------------------- --- ---
Tier 1 common capital (b) $5,139 $5,131
------------------------- ------ ------
Risk-weighted assets (a) (b) $67,124 $70,135
Tier 1 common capital ratio (b) 7.66% 7.32%
------------------------------- ---- ----
Total shareholders' equity $7,093 $7,183
Less:
Fixed rate cumulative perpetual
preferred stock 2,140 2,134
Goodwill 150 150
Other intangible assets 10 11
----------------------- --- ---
Tangible common equity $4,793 $4,889
---------------------- ------ ------
Total assets $63,630 $67,370
Less:
Goodwill 150 150
Other intangible assets 10 11
----------------------- --- ---
Tangible assets $63,470 $67,209
--------------- ------- -------
Tangible common equity ratio 7.55% 7.27%
---------------------------- ---- ----
2009
----
2nd Qtr 1st Qtr
------- -------
Net interest income (FTE) $404 $386
Less:
Interest earned on excess liquidity
(c) 1 1
----------------------------------- --- ---
Net interest income (FTE), excluding
excess liquidity $403 $385
------------------------------------ ---- ----
Average earning assets $59,522 $61,752
Less:
Average net unrealized gains on
investment securities available-
for-sale 239 212
--------------------------------- --- ---
Average earning assets for net
interest margin (FTE) 59,283 61,540
Less:
Excess liquidity (c) 1,833 1,812
-------------------- ----- -----
Average earning assets for net
interest margin (FTE), excluding
excess liquidity $57,450 $59,728
--------------------------------- ------- -------
Net interest margin (FTE) 2.73% 2.53%
Net interest margin (FTE), excluding
excess liquidity 2.81 2.60
Impact of excess liquidity on net
interest margin (FTE) (0.08) (0.07)
--------------------------------- ----- -----
(a) Tier 1 capital and risk-weighted assets as defined by regulation.
(b) March 31, 2010 Tier 1 capital and risk-weighted assets are estimated.
(c) Excess liquidity represented by interest earned on and average
balances deposited with the Federal Reserve Bank.
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