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Comerica Reports Fourth Quarter 2014 Net Income Of $149 Million, Or 80 Cents Per Share

Full-Year 2014 Net Income of $593 Million, or $3.16 Per Share

Broad-Based Loan and Deposit Growth Compared to Full-Year 2013

Average Loans Up $2.2 Billion, or 5 Percent

Average Deposit Growth of $3.1 Billion, or 6 Percent

Drive for Efficiency Demonstrated in Well-Controlled Expenses

Credit Quality Remains Strong

5.2 Million Shares Repurchased in 2014 Under the Share Repurchase Program; $392 Million or 66 Percent of 2014 Net Income Returned to Shareholders

Comerica logo.

News provided by

Comerica Incorporated

Jan 16, 2015, 06:40 ET

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DALLAS, Jan. 16, 2015 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported full-year 2014 net income of $593 million, or $3.16 per diluted share, compared to $541 million, or $2.85 per diluted share for full-year 2013. Excluding the impact to 2013 results of an unfavorable jury verdict in a lender liability case, which decreased 2013 net income by $28 million, or 15 cents per share, 2014 net income increased $24 million, or 4 percent, and earnings per diluted share increased 16 cents, or 5 percent.

Fourth quarter 2014 net income was $149 million, compared to $154 million for the third quarter 2014 and $117 million for the fourth quarter 2013. Earnings per diluted share were 80 cents for the fourth quarter 2014, compared to 82 cents for the third quarter 2014 and 62 cents for the fourth quarter 2013. Fourth quarter 2014 results reflected net charges of $3 million, after tax, or 2 cents per share, from certain actions taken during the period, compared to a net benefit of $5 million, after tax, or 3 cents per share, in the third quarter. Excluding the fourth quarter 2013 impact of the unfavorable jury verdict discussed above, fourth quarter 2014 net income increased $4 million, or 3 percent, and earnings per diluted share increased 3 cents, or 4 percent, compared to fourth quarter 2013.


(dollar amounts in millions, except per share data)

4th Qtr '14


3rd Qtr '14


4th Qtr '13


Net interest income (a)

$

415



$

414



$

430



Provision for credit losses

2



5



9



Noninterest income

225



215



219



Noninterest expenses

419



397



473


(b)

Provision for income taxes

70



73



50










Net income

149



154



117










Net income attributable to common shares

148



152



115










Diluted income per common share

0.80



0.82



0.62










Average diluted shares (in millions)

184



185



186










Tier 1 common capital ratio (d)

10.53

%

(c)

10.59

%


10.64

%


Basel III common equity Tier 1 capital ratio (d) (e)

10.3



10.4



10.3



Tangible common equity ratio (d)

9.85



9.94



10.07



(a)

Included accretion of the purchase discount on the acquired loan portfolio of $9 million, $3 million and $23 million in the fourth quarter 2014, third quarter 2014 and fourth quarter 2013, respectively.

(b)

Included litigation-related expense of $52 million in the fourth quarter 2013, related to an unfavorable jury verdict in a lender liability case.

(c)

December 31, 2014 ratio is estimated.

(d)

See Reconciliation of Non-GAAP Financial Measures.

(e)

Estimated ratios based on the standardized approach in the final rule, as fully phased-in, and excluding most elements of accumulated other comprehensive income (AOCI).


"Our 2014 net income increased 10 percent from a year ago, reflecting lower litigation-related expenses, a decrease in pension expense, and our continued drive for efficiency," said Ralph W. Babb Jr., chairman and chief executive officer. "Also, credit quality continued to be strong. We had modestly lower net interest income due to the decline in accretion as well as the impact of the continued low-rate environment and loan portfolio dynamics, all of which were predominantly offset by the contribution from loan growth. Our loan and deposit growth was solid in 2014, as average total loans increased $2.2 billion, or 5 percent, and average deposits were up $3.1 billion, or 6 percent, with increases in all business lines and all three of our major markets.

"As expected, fourth quarter average loans increased $202 million compared to the third quarter, the result of seasonality in National Dealer Services and Mortgage Banker Finance, as well as small increases in most other businesses. Average deposit growth was robust, increasing $2.6 billion compared to the third quarter. Revenue increased 2 percent with higher fee income generation. Our expenses reflected certain efficiency-related actions as well as seasonally higher technology and consulting expenses. Credit quality was strong. While we have not yet seen adverse trends materialize in our Energy portfolio, our methodology has appropriately considered the impact of the recent fall in oil and gas prices in our year-end allowance.

"While we continue to manage headwinds, including the low-rate environment as well as rising technology and regulatory expenses, we remain focused on the long term. We believe our diverse geographic footprint is well situated, and along with our relationship banking strategy should contribute to our long-term growth. We continue to be well positioned for rising rates and to benefit as the economy continues to improve."

Full-Year 2014 and Fourth Quarter Overview

Full-Year 2014 Compared to Full-Year 2013

  • Net income of $593 million for 2014 increased $52 million, or 10 percent, compared to 2013.
  • Average total loans increased $2.2 billion, or 5 percent, to $46.6 billion in 2014, primarily reflecting increases of $1.7 billion, or 6 percent, in commercial loans, $158 million, or 10 percent, in residential mortgage loans and $117 million, or 5 percent, in consumer loans.
  • Average total deposits increased $3.1 billion, or 6 percent, to $54.8 billion in 2014, reflecting increases of $2.6 billion, or 12 percent, in noninterest-bearing deposits and $433 million, or 1 percent, in interest-bearing deposits.
  • Net interest income of $1.7 billion for 2014 decreased by $17 million, or 1 percent, primarily as a result of a $15 million decrease in accretion of the purchase discount on the acquired loan portfolio. The benefit from an increase in loan volume was offset by continued pressure on yields from the low-rate environment and loan portfolio dynamics.
  • The provision for credit losses decreased $19 million to $27 million in 2014, compared to 2013. Net charge-offs were $25 million, or 0.05 percent of average loans, for 2014, compared to $73 million, or 0.16 percent of average loans, for 2013.
  • Noninterest income decreased $14 million, or 2 percent, to $868 million in 2014. The decrease was primarily the result of a $19 million decrease in noncustomer-driven income categories, with the largest decreases in deferred compensation asset returns, securities trading income and warrant income, partially offset by a $5 million increase in customer-driven fees, largely driven by increases in fiduciary income and card fees, partially offset by a decrease in letter of credit fees.
  • Noninterest expenses decreased $96 million, or 6 percent, to $1.6 billion in 2014, primarily reflecting decreases of $48 million in litigation-related expenses and $47 million in pension expense.
  • Comerica repurchased approximately 5.2 million shares of common stock during 2014 under the share repurchase program. Together with dividends of $0.79 per share, $392 million was returned to shareholders.

Fourth Quarter 2014 Compared to Third Quarter 2014

  • Average total loans increased $202 million to $47.4 billion in the fourth quarter 2014, primarily reflecting a $203 million increase in commercial loans. The increase in commercial loans was primarily driven by increases in National Dealer Services and Energy, partially offset by a decrease in Mortgage Banker Finance.
  • Average total deposits increased $2.6 billion, or 5 percent, to $57.8 billion in the fourth quarter 2014, reflecting increases of $2.2 billion in noninterest-bearing deposits and $368 million in interest-bearing deposits. Average deposits increased in all lines of business and markets.
  • Net interest income increased $1 million to $415 million in the fourth quarter 2014, compared to $414 million in the third quarter 2014, primarily reflecting a $6 million increase in accretion on the acquired loan portfolio and higher loan volumes, partially offset by a $5 million increase in negative residual value adjustments to assets in the leasing portfolio.
  • The provision for credit losses was $2 million in the fourth quarter 2014, compared to $5 million in the third quarter 2014, reflecting continued strong credit quality. Net charge-offs were $1 million, or 0.01 percent of average loans, in the fourth quarter 2014, compared to $3 million, or 0.03 percent, in the third quarter 2014.
  • Noninterest income increased $10 million to $225 million in the fourth quarter 2014, reflecting an increase in customer-driven fee income, primarily due to an increase in customer derivative income.
  • Noninterest expenses increased $22 million to $419 million in the fourth quarter 2014, primarily reflecting the impact of expenses of $4 million in the fourth quarter related to certain efficiency-related actions compared to an $8 million net benefit in the third quarter, as well as an increase in technology-related contract labor and seasonal increases in several other categories.
  • Capital remained solid at December 31, 2014, as evidenced by an estimated Tier 1 common capital ratio of 10.53 percent and a tangible common equity ratio of 9.85 percent.
  • Comerica repurchased approximately 1.3 million shares of common stock during fourth quarter 2014 under the share repurchase program. Together with dividends of $0.20 per share, $95 million was returned to shareholders.

Net Interest Income














(dollar amounts in millions)

4th Qtr '14


3rd Qtr '14


4th Qtr '13

Net interest income

$

415



$

414



$

430








Net interest margin

2.57

%


2.67

%


2.86

%







Selected average balances:






Total earning assets

$

64,453



$

61,672



$

59,924


Total loans

47,361



47,159



44,054


Total investment securities

9,365



9,388



9,365


Federal Reserve Bank deposits

7,463



4,877



6,260














Total deposits

57,760



55,163



52,769


Total noninterest-bearing deposits

27,504



25,275



23,532


  • Net interest income of $415 million in the fourth quarter 2014 increased $1 million compared to the third quarter 2014.
    • Interest on loans increased $2 million, primarily reflecting a $6 million increase in accretion of the purchase discount on the acquired loan portfolio and higher loan volumes, partially offset by a $5 million increase in negative residual value adjustments to assets in the leasing portfolio.
    • Interest on mortgage-backed investment securities decreased $1 million, primarily as a result of a decrease in yields.
    • An increase in Federal Reserve Bank deposits increased net interest income by $1 million.
  • The net interest margin of 2.57 percent decreased 10 basis points compared to the third quarter 2014. The decrease in net interest margin reflected an increase in Federal Reserve Bank deposits (-10 basis points), negative residual value adjustments to assets in the leasing portfolio (-3 basis points) and a decrease in the yield on mortgage-backed securities (-1 basis point), partially offset by an increase in accretion of the purchase discount on the acquired loan portfolio (+3 basis points) and an increase in interest received on nonaccrual loans (+1 basis point).
  • Average earning assets increased $2.8 billion to $64.5 billion in the fourth quarter 2014, compared to the third quarter 2014, primarily reflecting an increase of $2.6 billion in Federal Reserve Bank deposits.

Noninterest Income

Noninterest income increased $10 million to $225 million for the fourth quarter 2014, compared to $215 million for the third quarter 2014. Customer-driven fee income increased $11 million and noncustomer-driven income was stable. The increase in customer-driven fee income primarily reflected increases in customer derivative income of $6 million (a component of other noninterest income) and commercial lending fees of $3 million.

Noninterest Expenses

Noninterest expenses increased $22 million to $419 million in the fourth quarter 2014 compared to $397 million in the third quarter 2014. The increase primarily reflected the impact of expenses of $4 million in the fourth quarter related to certain efficiency-related actions compared to a net benefit of $8 million from actions taken in the third quarter 2014, as well as a $5 million increase in technology-related contract labor expense and seasonal increases in consulting and advertising expenses. Actions taken in the fourth quarter were primarily associated with real estate optimization. Third quarter actions included the early redemption of debt, resulting in a $32 million gain, a $9 million contribution to the Comerica Charitable Foundation, and other charges totaling $15 million associated with real estate optimization and several other efficiency-related actions, which included $6 million in salaries and benefits expense (severance-related) and $5 million in occupancy expense.

Credit Quality

"Credit quality continued to be strong, with only 1 basis point of net charge-offs in the fourth quarter and 5 basis points for the full-year 2014. Nonaccrual loans are at the lowest level since 2007," said Babb. "This includes our Energy business, where our 30-plus years of expertise has been demonstrated by strong performance through a number of cycles. We have a robust Energy credit policy, and as of year-end 2014 less than 3 percent of the portfolio is classified as criticized, with no nonaccruals. Given that the significant decline in oil and gas prices has only materialized in the past couple of months and our customers are generally well hedged, we have not yet seen adverse trends in the portfolio. We continue to closely monitor the total portfolio, as well as the Energy sector, and any residual impacts on the Texas economy. Our methodology has appropriately considered these developments in our year-end allowance."














(dollar amounts in millions)

4th Qtr '14


3rd Qtr '14


4th Qtr '13

Net credit-related charge-offs

$

1



$

3



$

13


Net credit-related charge-offs/Average total loans

0.01

%


0.03

%


0.12

%







Provision for credit losses

$

2



$

5



$

9








Nonperforming loans (a)

290



346



374


Nonperforming assets (NPAs) (a)

300



357



383


NPAs/Total loans and foreclosed property

0.62

%


0.75

%


0.84

%







Loans past due 90 days or more and still accruing

$

5



$

13



$

16








Allowance for loan losses

594



592



598


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

41



43



36


Total allowance for credit losses

635



635



634








Allowance for loan losses/Period-end total loans

1.22

%


1.24

%


1.32

%

Allowance for loan losses/Nonperforming loans

205



171



160


(a)

Excludes loans acquired with credit impairment.

(b)

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


  • Nonaccrual loans decreased $56 million, to $273 million at December 31, 2014, compared to $329 million at September 30, 2014.
  • Criticized loans decreased $201 million, to $1.9 billion at December 31, 2014, compared to $2.1 billion at September 30, 2014.
  • During the fourth quarter 2014, $41 million of borrower relationships over $2 million were transferred to nonaccrual status, a decrease of $13 million from the third quarter 2014.

Balance Sheet and Capital Management

Total assets and common shareholders' equity were $69.2 billion and $7.4 billion, respectively, at December 31, 2014, compared to $68.9 billion and $7.4 billion, respectively, at September 30, 2014.

There were approximately 179 million common shares outstanding at December 31, 2014. Combined with the dividend of $0.20 per share, share repurchases under the share repurchase program and dividends returned 63 percent of fourth quarter 2014 net income to shareholders.

Comerica's tangible common equity ratio was 9.85 percent at December 31, 2014, a decrease of 9 basis points from September 30, 2014. The estimated Tier 1 common capital ratio decreased 6 basis points, to 10.53 percent at December 31, 2014, from September 30, 2014. The estimated Tier 1 common ratio under fully phased-in Basel III capital rules and excluding most elements of AOCI was 10.3 percent percent at December 31, 2014.

Full-Year 2015 Outlook

Management expectations for full-year 2015 compared to full-year 2014, assuming a continuation of the current economic and low-rate environment, are as follows:

  • Average full-year loan growth consistent with 2014, reflecting typical seasonality throughout the year and continued focus on pricing and structure discipline.
  • Net interest income relatively stable, assuming no rise in interest rates, reflecting a decrease of about $30 million in purchase accounting accretion, to $4 million to $6 million, and the impact of a continuing low rate environment on asset yields, offset by earning asset growth.
  • Provision for credit losses higher, consistent with modest net charge-offs and continued loan growth.
  • Noninterest income relatively stable, reflecting growth in fee income, particularly card fees and fiduciary income, mostly offset by regulatory impacts on letter of credit, derivative and warrant income.
  • Noninterest expenses higher, reflecting increases in technology, regulatory and pension expenses, as well as typical inflationary pressures, with continued focus on driving efficiencies for the long term.
  • Income tax expense to approximate 33 percent of pre-tax income.

Business Segments

Comerica's operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank and Wealth Management. The Finance Division is also reported as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at December 31, 2014 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses fourth quarter 2014 results compared to third quarter 2014.

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




















(dollar amounts in millions)

4th Qtr '14


3rd Qtr '14


4th Qtr '13

Business Bank

$

212


85

%


$

210


91

%


$

170


82

%

Retail Bank

13


5



7


3



15


7


Wealth Management

24


10



13


6



24


11



249


100

%


230


100

%


209


100

%

Finance

(100)




(73)




(92)



Other (a)

—




(3)




—



     Total

$

149




$

154




$

117



(a)

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

Business Bank














(dollar amounts in millions)

4th Qtr '14



3rd Qtr '14



4th Qtr '13


Net interest income (FTE)

$

387



$

377



$

387


Provision for credit losses

10



(4)



24


Noninterest income

101



94



95


Noninterest expenses

148



152



198


Net income

212



210



170








Net credit-related (recoveries) charge-offs

—



(2)



6








Selected average balances:






Assets

38,039



37,898



35,039


Loans

37,034



36,894



34,020


Deposits

30,925



28,841



26,873


 

  • Average loans increased $140 million, primarily reflecting increases in National Dealer Services, Energy and Technology and Life Sciences, partially offset by decreases in Mortgage Banker Finance and general Middle Market.
  • Average deposits increased $2.1 billion, primarily reflecting increases in noninterest-bearing deposits in almost all lines of business.
  • Net interest income increased $10 million, primarily due to an increase in net funds transfer pricing (FTP) credits, largely due to the increase in average deposits, and an increase in purchase accounting accretion, partially offset by the impact of lower loan yields, in part due to a negative leasing residual value adjustment.
  • The provision for credit losses increased $14 million, primarily due to increases in Energy and Corporate Banking, partially offset by decreases in Technology and Life Sciences and general Middle Market.
  • Noninterest income increased $7 million, primarily due to increases in customer derivative income and commercial lending fees.
  • Noninterest expenses decreased $4 million, primarily due to a decrease in allocated corporate overhead expenses due to certain actions taken in the third quarter 2014, including a contribution to the Comerica Charitable Foundation, charges associated with real estate optimization and several other efficiency-related expenses.

Retail Bank














(dollar amounts in millions)

4th Qtr '14



3rd Qtr '14



4th Qtr '13


Net interest income (FTE)

$

151



$

150



$

150


Provision for credit losses

(4)



—



(8)


Noninterest income

44



41



43


Noninterest expenses

179



181



178


Net income

13



7



15








Net credit-related charge-offs

3



—



4








Selected average balances:






Assets

6,145



6,117



5,997


Loans

5,475



5,452



5,323


Deposits

22,037



21,785



21,438


  • Average loans increased $23 million, primarily due to an increase in consumer loans in Retail Banking.
  • Average deposits increased $252 million, primarily reflecting an increase in noninterest-bearing deposits in both Retail Banking and Small Business.
  • The provision for credit losses decreased $4 million, primarily due to improvements in Small Business credit quality.
  • Noninterest income increased $3 million, primarily due to increases in customer derivative income and income from the Corporation's third party credit card provider.
  • Noninterest expenses decreased $2 million, primarily due to a decrease in allocated corporate overhead expenses, largely for the same reasons as described above in the Business Bank section, as well as a decrease in salaries and benefit expense, partially offset by an increase in charges associated with real estate optimization.

Wealth Management














(dollar amounts in millions)

4th Qtr '14



3rd Qtr '14



4th Qtr '13


Net interest income (FTE)

$

48



$

47



$

47


Provision for credit losses

(9)



7



(9)


Noninterest income

64



63



61


Noninterest expenses

83



82



80


Net income

24



13



24








Net credit-related (recoveries) charge-offs

(2)



5



3








Selected average balances:






Assets

5,044



5,007



4,873


Loans

4,852



4,813



4,711


Deposits

4,330



4,155



3,933


 

  • Average loans increased $39 million, primarily due to an increase in Private Banking.
  • Average deposits increased $175 million, primarily reflecting an increase in interest-bearing deposits in Private Banking.
  • Net interest income increased $1 million, primarily due to an increase in FTP credits, largely due to the increase in average deposits, and higher loan yields.
  • The provision for credit losses decreased $16 million, primarily reflecting continued strong credit quality.
  • Noninterest income increased $1 million, primarily due to small increases in several categories.
  • Noninterest expenses increased $1 million, primarily due to small increases in several categories, partially offset by a decrease in allocated corporate overhead expenses, for the same reasons as described above in the Business Bank section, as well as a decrease in salaries and benefit expense, primarily due to the impact of efficiency-related actions taken in the third quarter 2014.

Geographic Market Segments

Comerica also provides market segment results for three primary geographic markets: Michigan, California and Texas. In addition to the three primary geographic markets, Other Markets is also reported as a market segment. Other Markets includes Florida, Arizona, the International Finance division and businesses that have a significant presence outside of the three primary geographic markets. The tables below present the geographic market results based on the methodologies in effect at December 31, 2014 and are presented on a fully taxable equivalent (FTE) basis.

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




















(dollar amounts in millions)

4th Qtr '14


3rd Qtr '14


4th Qtr '13

Michigan

$

81


33

%


$

68


29

%


$

33


16

%

California

83


33



63


28



76


36


Texas

38


15



40


17



53


25


Other Markets

47


19



59


26



47


23



249


100

%


230


100

%


209


100

%

Finance & Other (a)

(100)




(76)




(92)



    Total

$

149




$

154




$

117



(a)

Includes items not directly associated with the geographic markets.

 

  • Average loans increased $268 million and $180 million in California and Texas, respectively, and decreased $106 million in Michigan. The increase in California primarily reflected increases in Technology and Life Sciences, Commercial Real Estate and National Dealer Services, while the increase in Texas primarily reflected an increase in Energy. The decrease in Michigan was primarily due to decreases in general Middle Market and Corporate Banking, partially offset by an increase in National Dealer Services.
  • Average deposits increased across all markets, including increases of $1.7 billion in California, $316 million in Michigan and $192 million in Texas. The increases were primarily in noninterest-bearing deposits, partially offset by decreases in time deposits, in all markets.
  • Net interest income increased $10 million in California and $9 million in Texas and decreased $6 million in Michigan. The increase in California primarily reflected an increase in FTP credits, largely due to the increase in average deposits, and the benefit from an increase in average loans. The increase in Texas was primarily the result of an increase in the accretion of the purchase discount on the acquired loan portfolio and an increase in average loans. The decrease in Michigan primarily reflected lower loan yields mostly attributed to a negative leasing residual value adjustment.
  • The provision for credit losses decreased $24 million in California and $11 million in Michigan. The decrease in California primarily reflected decreases in Technology and Life Sciences and general Middle Market. The decrease in Michigan primarily reflected decreases in Private Banking and Commercial Real Estate, partially offset by an increase in Corporate Banking. In Texas, the provision increased $15 million, primarily due to an increase in Energy, partially offset by decreases in general Middle Market and Technology and Life Sciences.
  • Noninterest income increased $5 million, $3 million and $1 million in Michigan, Texas and California, respectively. The increase in Michigan was primarily due to an increase in customer derivative income. The increases in Texas and California reflected small increases in several noninterest income categories.
  • Noninterest expenses decreased $9 million in Michigan and $1 million in California and was unchanged in Texas. The decrease in Michigan was primarily due to a decrease in allocated corporate overhead expenses, for the same reasons as previously described in the Business Bank section.

Michigan Market














(dollar amounts in millions)

4th Qtr '14



3rd Qtr '14



4th Qtr '13


Net interest income (FTE)

$

173



$

179



$

187


Provision for credit losses

(19)



(8)



5


Noninterest income

92



87



89


Noninterest expenses

157



166



218


Net income

81



68



33








Net credit-related (recoveries) charge-offs

(5)



3



(4)








Selected average balances:






Assets

13,605



13,724



13,712


Loans

13,142



13,248



13,323


Deposits

21,530



21,214



20,501



California Market














(dollar amounts in millions)

4th Qtr '14



3rd Qtr '14



4th Qtr '13


Net interest income (FTE)

$

192



$

182



$

176


Provision for credit losses

(10)



14



(6)


Noninterest income

38



37



37


Noninterest expenses

102



103



98


Net income

83



63



76








Net credit-related charge-offs (recoveries)

1



6



(2)








Selected average balances:






Assets

16,035



15,768



14,710


Loans

15,777



15,509



14,431


Deposits

18,028



16,350



15,219



Texas Market














(dollar amounts in millions)

4th Qtr '14



3rd Qtr '14



4th Qtr '13


Net interest income (FTE)

$

139



$

130



$

147


Provision for credit losses

18



3



5


Noninterest income

35



32



33


Noninterest expenses

95



95



91


Net income

38



40



53








Net credit-related charge-offs

2



—



13








Selected average balances:






Assets

12,003



11,835



10,458


Loans

11,327



11,147



9,766


Deposits

10,825



10,633



10,536


Conference Call and Webcast

Comerica will host a conference call to review fourth quarter 2014 financial results at 8 a.m. CT Friday, January 16, 2015. Interested parties may access the conference call by calling (877) 523-5249 or (210) 591-1147 (event ID No. 51485794). The call and supplemental financial information, as well as a replay of the webcast, can also be accessed via Comerica's "Investor Relations" page at www.comerica.com.  

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

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

Forward-looking Statements

Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "believes," "contemplates," "feels," "expects," "estimates," "seeks," "strives," "plans," "intends," "outlook," "forecast," "position," "target," "mission," "assume," "achievable," "potential," "strategy," "goal," "aspiration," "opportunity," "initiative," "outcome," "continue," "remain," "maintain," "on course," "trend," "objective," "looks forward," "projects," "models" 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 changes in interest rates; volatility and disruptions in global capital and credit markets; changes in Comerica's credit rating; the interdependence of financial service companies; changes in regulation or oversight; unfavorable developments concerning credit quality; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers; operational difficulties, failure of technology infrastructure or information security incidents; the implementation of Comerica's strategies and business initiatives; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; 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; any future strategic acquisitions or divestitures; 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 and floods; changes in accounting standards and the critical nature of Comerica's accounting policies. Comerica cautions that the foregoing list of factors is not exclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to "Item 1A. Risk Factors" beginning on page 12 of Comerica's Annual Report on Form 10-K for the year ended December 31, 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)

2014

2014

2013


2014

2013

PER COMMON SHARE AND COMMON STOCK DATA







Diluted net income

$

0.80


$

0.82


$

0.62



$

3.16


$

2.85


Cash dividends declared

0.20


0.20


0.17



0.79


0.68









Average diluted shares (in thousands)

183,728


185,401


186,166



185,474


186,927


KEY RATIOS







Return on average common shareholders' equity

7.96

%

8.29

%

6.66

%


8.05

%

7.76

%

Return on average assets

0.86


0.93


0.72



0.89


0.85


Tier 1 common capital ratio (a) (b)

10.53


10.59


10.64





Tier 1 risk-based capital ratio (b)

10.53


10.59


10.64





Total risk-based capital ratio (b)

12.54


12.83


13.10





Leverage ratio (b)

10.44


10.79


10.77





Tangible common equity ratio (a)

9.85


9.94


10.07





AVERAGE BALANCES







Commercial loans

$

30,391


$

30,188


$

27,683



$

29,715


$

27,971


Real estate construction loans

1,920


1,973


1,652



1,909


1,486


Commercial mortgage loans

8,609


8,698


8,714



8,706


9,060


Lease financing

818


823


838



834


847


International loans

1,455


1,417


1,303



1,376


1,275


Residential mortgage loans

1,821


1,792


1,679



1,778


1,620


Consumer loans

2,347


2,268


2,185



2,270


2,153


Total loans

47,361


47,159


44,054



46,588


44,412









Earning assets

64,453


61,672


59,924



61,560


59,091


Total assets

69,311


66,401


64,602



66,338


63,933









Noninterest-bearing deposits

27,504


25,275


23,532



25,019


22,379


Interest-bearing deposits

30,256


29,888


29,237



29,765


29,332


Total deposits

57,760


55,163


52,769



54,784


51,711









Common shareholders' equity

7,518


7,411


7,007



7,373


6,965


NET INTEREST INCOME (fully taxable equivalent basis)







Net interest income

$

416


$

415


$

431



$

1,659


$

1,675


Net interest margin

2.57

%

2.67

%

2.86

%


2.70

%

2.84

%

CREDIT QUALITY







Total nonperforming assets (c)

300


357


383












Loans past due 90 days or more and still accruing

5


13


16












Net loan charge-offs

1


3


13



25


73









Allowance for loan losses

594


592


598





Allowance for credit losses on lending-related commitments

41


43


36





Total allowance for credit losses

635


635


634












Allowance for loan losses as a percentage of total loans

1.22

%

1.24

%

1.32

%




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

0.01


0.03


0.12



0.05

%

0.16

%

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

0.62


0.75


0.84





Allowance for loan losses as a percentage of total nonperforming loans

205


171


160





(a)

See Reconciliation of Non-GAAP Financial Measures.

(b)

December 31, 2014 ratios are estimated.

(c)

Excludes loans acquired with credit-impairment.

(d)

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)

2014

2014

2013


(unaudited)

(unaudited)


ASSETS




Cash and due from banks

$

1,026


$

1,039


$

1,140


Interest-bearing deposits with banks

5,045


6,748


5,311


Other short-term investments

99


112


112






Investment securities available-for-sale

8,116


9,468


9,307


Investment securities held-to-maturity

1,935


—


—






Commercial loans

31,520


30,759


28,815


Real estate construction loans

1,955


1,992


1,762


Commercial mortgage loans

8,604


8,603


8,787


Lease financing

805


805


845


International loans

1,496


1,429


1,327


Residential mortgage loans

1,831


1,797


1,697


Consumer loans

2,382


2,323


2,237


Total loans

48,593


47,708


45,470


Less allowance for loan losses

(594)


(592)


(598)


Net loans

47,999


47,116


44,872






Premises and equipment

532


524


594


Accrued income and other assets

4,438


3,880


3,888


Total assets

$

69,190


$

68,887


$

65,224






LIABILITIES AND SHAREHOLDERS' EQUITY




Noninterest-bearing deposits

$

27,224


$

27,490


$

23,875






Money market and interest-bearing checking deposits

23,954


23,523


22,332


Savings deposits

1,752


1,753


1,673


Customer certificates of deposit

4,421


4,698


5,063


Foreign office time deposits

135


117


349


Total interest-bearing deposits

30,262


30,091


29,417


Total deposits

57,486


57,581


53,292






Short-term borrowings

116


202


253


Accrued expenses and other liabilities

1,507


1,002


986


Medium- and long-term debt

2,679


2,669


3,543


Total liabilities

61,788


61,454


58,074






Common stock - $5 par value:




Authorized - 325,000,000 shares




Issued - 228,164,824 shares

1,141


1,141


1,141


Capital surplus

2,188


2,183


2,179


Accumulated other comprehensive loss

(412)


(317)


(391)


Retained earnings

6,744


6,631


6,318


Less cost of common stock in treasury - 49,146,225 shares at 12/31/14, 47,992,721 shares at 9/30/14 and 45,860,786 shares at 12/31/13

(2,259)


(2,205)


(2,097)


Total shareholders' equity

7,402


7,433


7,150


Total liabilities and shareholders' equity

$

69,190


$

68,887


$

65,224


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)

2014

2013


2014

2013

INTEREST INCOME






Interest and fees on loans

$

383


$

397



$

1,525


$

1,556


Interest on investment securities

51


55



211


214


Interest on short-term investments

4


4



14


14


Total interest income

438


456



1,750


1,784


INTEREST EXPENSE






Interest on deposits

12


12



45


55


Interest on medium- and long-term debt

11


14



50


57


Total interest expense

23


26



95


112


Net interest income

415


430



1,655


1,672


Provision for credit losses

2


9



27


46


Net interest income after provision for credit losses

413


421



1,628


1,626


NONINTEREST INCOME






Service charges on deposit accounts

53


53



215


214


Fiduciary income

47


43



180


171


Commercial lending fees

29


28



98


99


Card fees

21


19



80


74


Letter of credit fees

14


15



57


64


Bank-owned life insurance

8


9



39


40


Foreign exchange income

10


9



40


36


Brokerage fees

4


4



17


17


Net securities losses

—


—



—


(1)


Other noninterest income

39


39



142


168


Total noninterest income

225


219



868


882


NONINTEREST EXPENSES






Salaries and benefits expense

245


258



980


1,009


Net occupancy expense

46


41



171


160


Equipment expense

14


15



57


60


Outside processing fee expense

33


30



122


119


Software expense

23


24



95


90


Litigation-related expense

—


52



4


52


FDIC insurance expense

8


7



33


33


Advertising expense

7


3



23


21


Gain on debt redemption

—


—



(32)


(1)


Other noninterest expenses

43


43



173


179


Total noninterest expenses

419


473



1,626


1,722


Income before income taxes

219


167



870


786


Provision for income taxes

70


50



277


245


NET INCOME

149


117



593


541


Less income allocated to participating securities

1


2



7


8


Net income attributable to common shares

$

148


$

115



$

586


$

533


Earnings per common share:






Basic

$

0.83


$

0.64



$

3.28


$

2.92


Diluted

0.80


0.62



3.16


2.85








Comprehensive income

54


267



572


563








Cash dividends declared on common stock

36


31



143


126


Cash dividends declared per common share

0.20


0.17



0.79


0.68


CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries




















Fourth

Third

Second

First

Fourth


Fourth Quarter 2014 Compared To:


Quarter

Quarter

Quarter

Quarter

Quarter


Third Quarter 2014


Fourth Quarter 2013

(in millions, except per share data)

2014

2014

2014

2014

2013


Amount

Percent


Amount

Percent

INTEREST INCOME












Interest and fees on loans

$

383


$

381


$

385


$

376


$

397



$

2


—

%


$

(14)


(3)

%

Interest on investment securities

51


52


53


55


55



(1)


(2)



(4)


(8)


Interest on short-term investments

4


3


3


4


4



1


52



—


—


Total interest income

438


436


441


435


456



2


1



(18)


(4)


INTEREST EXPENSE












Interest on deposits

12


11


11


11


12



1


—



—


—


Interest on medium- and long-term debt

11


11


14


14


14



—


—



(3)


(15)


Total interest expense

23


22


25


25


26



1


—



(3)


(12)


Net interest income

415


414


416


410


430



1


1



(15)


(3)


Provision for credit losses

2


5


11


9


9



(3)


(55)



(7)


(77)


Net interest income after provision

for credit losses

413


409


405


401


421



4


1



(8)


(2)


NONINTEREST INCOME












Service charges on deposit accounts

53


54


54


54


53



(1)


(3)



—


—


Fiduciary income

47


44


45


44


43



3


5



4


9


Commercial lending fees

29


26


23


20


28



3


13



1


6


Card fees

21


20


19


20


19



1


2



2


8


Letter of credit fees

14


14


15


14


15



—


—



(1)


(10)


Bank-owned life insurance

8


11


11


9


9



(3)


(13)



(1)


(1)


Foreign exchange income

10


9


12


9


9



1


2



1


6


Brokerage fees

4


4


4


5


4



—


—



—


—


Net securities (losses) gains

—


(1)


—


1


—



1


N/M



—


—


Other noninterest income

39


34


37


32


39



5


14



—


—


Total noninterest income

225


215


220


208


219



10


5



6


3


NONINTEREST EXPENSES












Salaries and benefits expense

245


248


240


247


258



(3)


(1)



(13)


(5)


Net occupancy expense

46


46


39


40


41



—


—



5


11


Equipment expense

14


14


15


14


15



—


—



(1)


(8)


Outside processing fee expense

33


31


30


28


30



2


4



3


7


Software expense

23


25


25


22


24



(2)


(3)



(1)


(1)


Litigation-related expense

—


(2)


3


3


52



2


83



(52)


N/M


FDIC insurance expense

8


9


8


8


7



(1)


(4)



1


17


Advertising expense

7


5


5


6


3



2


30



4


N/M


Gain on debt redemption

—


(32)


—


—


—



32


N/M



—


N/M


Other noninterest expenses

43


53


39


38


43



(10)


(20)



—


—


Total noninterest expenses

419


397


404


406


473



22


6



(54)


(12)


Income before income taxes

219


227


221


203


167



(8)


(3)



52


32


Provision for income taxes

70


73


70


64


50



(3)


(4)



20


40


NET INCOME

149


154


151


139


117



(5)


(3)



32


28


Less income allocated to participating securities

1


2


2


2


2



(1)


N/M



(1)


N/M


Net income attributable to common shares

$

148


$

152


$

149


$

137


$

115



$

(4)


(3)

%


$

33


28

%

Earnings per common share:












Basic

$

0.83


$

0.85


$

0.83


$

0.76


$

0.64



$

(0.02)


(2)

%


$

0.19


30

%

Diluted

0.80


0.82


0.80


0.73


0.62



(0.02)


(2)



0.18


29














Comprehensive income

54


141


172


205


267



(87)


(61)



(213)


(80)














Cash dividends declared on common stock

36


36


36


35


31



—


—



5


15


Cash dividends declared per common share

0.20


0.20


0.20


0.19


0.17



—


—



0.03


18


N/M - Not Meaningful

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)



Comerica Incorporated and Subsidiaries











2014


2013

(in millions)

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr


4th Qtr








Balance at beginning of period

$

592


$

591


$

594


$

598



$

604









Loan charge-offs:







Commercial

8


13


19


19



31


Commercial mortgage

2


7


5


8



5


International

6


—


—


—



—


Residential mortgage

1


1


—


—



1


Consumer

3


3


4


3



4


Total loan charge-offs

20


24


28


30



41









Recoveries on loans previously charged-off:







Commercial

6


6


11


11



17


Real estate construction

2


1


1


—



3


Commercial mortgage

10


12


3


3



5


Lease financing

—


—


—


2



—


Residential mortgage

—


1


3


—



1


Consumer

1


1


1


2



2


Total recoveries

19


21


19


18



28


Net loan charge-offs

1


3


9


12



13


Provision for loan losses

4


4


6


8



7


Foreign currency translation adjustment

(1)


—


—


—



—


Balance at end of period

$

594


$

592


$

591


$

594



$

598









Allowance for loan losses as a percentage of total loans

1.22

%

1.24

%

1.23

%

1.28

%


1.32

%








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

0.01


0.03


0.08


0.10



0.12




















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

Comerica Incorporated and Subsidiaries









2014


2013

(in millions)

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr


4th Qtr








Balance at beginning of period

$

43


$

42


$

37


$

36



$

34


Add: Provision for credit losses on lending-related commitments

(2)


1


5


1



2


Balance at end of period

$

41


$

43


$

42


$

37



$

36









Unfunded lending-related commitments sold

$

—


$

9


$

—


$

—



$

1


NONPERFORMING ASSETS (unaudited)

Comerica Incorporated and Subsidiaries










2014


2013

(in millions)

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr


4th Qtr








SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS




Nonaccrual loans:







  Business loans:







    Commercial

$

109


$

93


$

72


$

54



$

81


    Real estate construction

2


18


19


19



21


    Commercial mortgage

95


144


156


162



156


    International

—


—


—


—



4


    Total nonaccrual business loans

206


255


247


235



262


  Retail loans:







  Residential mortgage

36


42


45


48



53


  Consumer:







    Home equity

30


31


32


32



33


    Other consumer

1


1


2


2



2


      Total consumer

31


32


34


34



35


  Total nonaccrual retail loans

67


74


79


82



88


  Total nonaccrual loans

273


329


326


317



350


Reduced-rate loans

17


17


21


21



24


Total nonperforming loans (a)

290


346


347


338



374


Foreclosed property

10


11


13


14



9


Total nonperforming assets (a)

$

300


$

357


$

360


$

352



$

383









Nonperforming loans as a percentage of total loans

0.60

%

0.73

%

0.73

%

0.73

%


0.82

%

Nonperforming assets as a percentage of total loans and foreclosed property

0.62


0.75


0.75


0.76



0.84


Allowance for loan losses as a percentage of total nonperforming loans

205


171


170


176



160


Loans past due 90 days or more and still accruing

$

5


$

13


$

7


$

10



$

16









ANALYSIS OF NONACCRUAL LOANS







Nonaccrual loans at beginning of period

$

329


$

326


$

317


$

350



$

437


  Loans transferred to nonaccrual (b)

41


54


53


19



23


  Nonaccrual business loan gross charge-offs (c)

(16)


(20)


(24)


(27)



(33)


  Loans transferred to accrual status (d)

(18)


—


—


—



—


  Nonaccrual business loans sold (d)

(24)


(3)


(6)


(3)



(14)


  Payments/Other (e)

(39)


(28)


(14)


(22)



(63)


Nonaccrual loans at end of period

$

273


$

329


$

326


$

317



$

350


(a) Excludes loans acquired with credit impairment.

(b) Based on an analysis of nonaccrual loans with book balances greater than $2 million.

(c) Analysis of gross loan charge-offs:







  Nonaccrual business loans

$

16


$

20


$

24


$

27



$

33


  Performing criticized loans

—


—


—


—



3


  Consumer and residential mortgage loans

4


4


4


3



5


      Total gross loan charge-offs

$

20


$

24


$

28


$

30



$

41


(d) Analysis of loans sold:







Nonaccrual business loans

$

24


$

3


$

6


$

3



$

14


Performing criticized loans

5


—


8


6



22


      Total loans sold

$

29


$

3


$

14


$

9



$

36


(e) Includes net changes related to nonaccrual loans with balances less than $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed property. Excludes business loan gross charge-offs and business nonaccrual loans sold.

ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)

Comerica Incorporated and Subsidiaries












Years Ended


December 31, 2014


December 31, 2013


Average


Average


Average


Average

(dollar amounts in millions)

Balance

Interest

Rate


Balance

Interest

Rate









Commercial loans

$

29,715


$

927


3.12

%


$

27,971


$

917


3.28

%

Real estate construction loans

1,909


65


3.41



1,486


57


3.85


Commercial mortgage loans

8,706


327


3.75



9,060


372


4.11


Lease financing

834


19


2.33



847


27


3.23


International loans

1,376


50


3.65



1,275


48


3.74


Residential mortgage loans

1,778


68


3.82



1,620


66


4.09


Consumer loans

2,270


73


3.20



2,153


71


3.30


Total loans (a)

46,588


1,529


3.28



44,412


1,558


3.51










Mortgage-backed securities (b)

8,970


209


2.33



9,246


213


2.33


Other investment securities

380


2


0.45



391


2


0.48


Total investment securities (b)

9,350


211


2.26



9,637


215


2.25










Interest-bearing deposits with banks (c)

5,513


14


0.26



4,930


13


0.26


Other short-term investments

109


—


0.57



112


1


1.22


Total earning assets

61,560


1,754


2.85



59,091


1,787


3.03










Cash and due from banks

934





987




Allowance for loan losses

(601)





(622)




Accrued income and other assets

4,445





4,477




Total assets

$

66,338





$

63,933












Money market and interest-bearing checking deposits

$

22,891


24


0.11



$

21,704


28


0.13


Savings deposits

1,744


1


0.03



1,657


1


0.03


Customer certificates of deposit

4,869


18


0.36



5,471


23


0.42


Foreign office time deposits

261


2


0.82



500


3


0.52


Total interest-bearing deposits

29,765


45


0.15



29,332


55


0.19










Short-term borrowings

200


—


0.04



211


—


0.07


Medium- and long-term debt

2,965


50


1.68



3,972


57


1.45


Total interest-bearing sources

32,930


95


0.29



33,515


112


0.33










Noninterest-bearing deposits

25,019





22,379




Accrued expenses and other liabilities

1,016





1,074




Total shareholders' equity

7,373





6,965




Total liabilities and shareholders' equity

$

66,338





$

63,933












Net interest income/rate spread (FTE)


$

1,659


2.56




$

1,675


2.70










FTE adjustment


$

4





$

3











Impact of net noninterest-bearing sources of funds



0.14





0.14


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



2.70

%




2.84

%

(a)

Accretion of the purchase discount on the acquired loan portfolio of $34 million and $49 million in 2014 and 2013, respectively, increased the net interest margin by 6 basis points and 8 basis points in each respective period.

(b)

Includes investment securities available-for-sale and investment securities held-to-maturity.

(c)

Average balances deposited with the Federal Reserve Bank reduced the net interest margin by 29 basis points and 23 basis points in 2014 and 2013, respectively.

ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)

Comerica Incorporated and Subsidiaries
















Three Months Ended


December 31, 2014


September 30, 2014


December 31, 2013


Average


Average


Average


Average


Average


Average

(dollar amounts in millions)

Balance

Interest

Rate


Balance

Interest

Rate


Balance

Interest

Rate













Commercial loans

$

30,391


$

238


3.11

%


$

30,188


$

236


3.11

%


$

27,683


$

228


3.26

%

Real estate construction loans

1,920


16


3.40



1,973


17


3.41



1,652


15


3.50


Commercial mortgage loans

8,609


81


3.70



8,698


76


3.45



8,714


101


4.62


Lease financing

818


(1)


(0.43)



823


4


2.33



838


7


3.27


International loans

1,455


13


3.68



1,417


13


3.59



1,303


12


3.78


Residential mortgage loans

1,821


18


3.86



1,792


17


3.76



1,679


17


3.97


Consumer loans

2,347


19


3.20



2,268


19


3.24



2,185


18


3.24


Total loans (a)

47,361


384


3.22



47,159


382


3.22



44,054


398


3.58














Mortgage-backed securities (b)

8,954


50


2.27



9,020


52


2.29



8,969


55


2.46


Other investment securities

411


1


0.49



368


—


0.43



396


—


0.45


Total investment securities (b)

9,365


51


2.19



9,388


52


2.22



9,365


55


2.37














Interest-bearing deposits with banks (c)

7,622


4


0.26



5,015


3


0.25



6,400


4


0.26


Other short-term investments

105


—


0.48



110


—


0.54



105


—


0.69


Total earning assets

64,453


439


2.71



61,672


437


2.82



59,924


457


3.03














Cash and due from banks

937





963





970




Allowance for loan losses

(597)





(601)





(609)




Accrued income and other assets

4,518





4,367





4,317




Total assets

$

69,311





$

66,401





$

64,602
















Money market and interest-bearing checking deposits

$

23,841


7


0.11



$

23,146


6


0.11



$

22,030


6


0.12


Savings deposits

1,771


—


0.03



1,759


—


0.03



1,667


—


0.03


Customer certificates of deposit

4,510


4


0.37



4,824


4


0.36



5,078


5


0.38


Foreign office time deposits

134


1


1.74



159


1


1.43



462


1


0.47


Total interest-bearing deposits

30,256


12


0.15



29,888


11


0.15



29,237


12


0.17














Short-term borrowings

172


—


0.04



231


—


0.03



279


—


0.06


Medium- and long-term debt

2,678


11


1.71



2,652


11


1.75



3,563


14


1.53


Total interest-bearing sources

33,106


23


0.27



32,771


22


0.28



33,079


26


0.31














Noninterest-bearing deposits

27,504





25,275





23,532




Accrued expenses and other liabilities

1,183





944





984




Total shareholders' equity

7,518





7,411





7,007




Total liabilities and shareholders' equity

$

69,311





$

66,401





$

64,602
















Net interest income/rate spread (FTE)


$

416


2.44




$

415


2.54




$

431


2.72














FTE adjustment


$

1





$

1





$

1















Impact of net noninterest-bearing sources of funds



0.13





0.13





0.14


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



2.57

%




2.67

%




2.86

%

(a)

Accretion of the purchase discount on the acquired loan portfolio of $9 million, $3 million and $23 million in the fourth and third quarters of 2014 and the fourth quarter of 2013, respectively, increased the net interest margin by 5 basis points, 2 basis points and 15 basis points in each respective period.

(b)

Includes investment securities available-for-sale and investment securities held-to-maturity.

(c)

Average balances deposited with the Federal Reserve Bank reduced the net interest margin by 30 basis points and 21 basis points in the fourth and third quarters of 2014, respectively, and by 31 basis points in the fourth quarter of 2013.

CONSOLIDATED STATISTICAL DATA (unaudited)

Comerica Incorporated and Subsidiaries








December 31,

September 30,

June 30,

March 31,

December 31,

(in millions, except per share data)

2014

2014

2014

2014

2013







Commercial loans:






Floor plan

$

3,790


$

3,183


$

3,576


$

3,437


$

3,504


Other

27,730


27,576


27,410


26,337


25,311


Total commercial loans

31,520


30,759


30,986


29,774


28,815


Real estate construction loans

1,955


1,992


1,939


1,847


1,762


Commercial mortgage loans

8,604


8,603


8,747


8,801


8,787


Lease financing

805


805


822


849


845


International loans

1,496


1,429


1,352


1,250


1,327


Residential mortgage loans

1,831


1,797


1,775


1,751


1,697


Consumer loans:






Home equity

1,658


1,634


1,574


1,533


1,517


Other consumer

724


689


687


684


720


Total consumer loans

2,382


2,323


2,261


2,217


2,237


Total loans

$

48,593


$

47,708


$

47,882


$

46,489


$

45,470








Goodwill

$

635


$

635


$

635


$

635


$

635


Core deposit intangible

13


14


14


15


16


Other intangibles

2


1


1


1


1








Tier 1 common capital ratio (a) (b)

10.53

%

10.59

%

10.50

%

10.58

%

10.64

%

Tier 1 risk-based capital ratio (a)

10.53


10.59


10.50


10.58


10.64


Total risk-based capital ratio (a)

12.54


12.83


12.52


13.00


13.10


Leverage ratio (a)

10.44


10.79


10.93


10.85


10.77


Tangible common equity ratio (b)

9.85


9.94


10.39


10.20


10.07








Common shareholders' equity per share of common stock

$

41.35


$

41.26


$

40.72


$

40.09


$

39.22


Tangible common equity per share of common stock (b)

37.72


37.65


37.12


36.50


35.64


Market value per share for the quarter:






High

50.14


52.72


52.60


53.50


48.69


Low

42.73


48.33


45.34


43.96


38.64


Close

46.84


49.86


50.16


51.80


47.54








Quarterly ratios:






Return on average common shareholders' equity

7.96

%

8.29

%

8.27

%

7.68

%

6.66

%

Return on average assets

0.86


0.93


0.93


0.86


0.72


Efficiency ratio (c)

65.26


62.87


63.35


65.79


72.81








Number of banking centers

481


481


481


483


483








Number of employees - full time equivalent

8,876


8,913


8,901


8,907


8,948



(a)

December 31, 2014 ratios are estimated.

(b)

See Reconciliation of Non-GAAP Financial Measures.

(c)

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)

2014

2014

2013





ASSETS




Cash and due from subsidiary bank

$

—


$

5


$

31


Short-term investments with subsidiary bank

1,133


1,136


482


Other short-term investments

94


97


96


Investment in subsidiaries, principally banks

7,411


7,433


7,171


Premises and equipment

2


2


4


Other assets

142


134


139


    Total assets

$

8,782


$

8,807


$

7,923






LIABILITIES AND SHAREHOLDERS' EQUITY




Medium- and long-term debt

$

1,212


$

1,202


$

617


Other liabilities

168


172


156


    Total liabilities

1,380


1,374


773






Common stock - $5 par value:




Authorized - 325,000,000 shares




Issued - 228,164,824 shares

1,141


1,141


1,141


Capital surplus

2,188


2,183


2,179


Accumulated other comprehensive loss

(412)


(317)


(391)


Retained earnings

6,744


6,631


6,318


Less cost of common stock in treasury - 49,146,225 shares at 12/31/14, 47,992,721 shares at 9/30/14 and 45,860,786 shares at 12/31/13

(2,259)


(2,205)


(2,097)


    Total shareholders' equity

7,402


7,433


7,150


    Total liabilities and shareholders' equity

$

8,782


$

8,807


$

7,923


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, 2012

188.3


$

1,141


$

2,162


$

(413)


$

5,928


$

(1,879)


$

6,939


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)


$

6,318


$

(2,097)


$

7,150


Net income

—


—


—


—


593


—


593


Other comprehensive loss, net of tax

—


—


—


(21)


—


—


(21)


Cash dividends declared on common stock ($0.79 per share)

—


—


—


—


(143)


—


(143)


Purchase of common stock

(5.4)


—


—


—


—


(260)


(260)


Net issuance of common stock under employee stock plans

2.1


—


(27)


—


(24)


96


45


Share-based compensation

—


—


38


—


—


—


38


Other

—


—


(2)


—


—


2


—


BALANCE AT DECEMBER 31, 2014

179.0


$

1,141


$

2,188


$

(412)


$

6,744


$

(2,259)


$

7,402


BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)

Comerica Incorporated and Subsidiaries



























(dollar amounts in millions)

Business


Retail


Wealth







Three Months Ended December 31, 2014

Bank


Bank


Management


Finance


Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

387



$

151



$

48



$

(177)



$

7



$

416


Provision for credit losses

10



(4)



(9)



—



5



2


Noninterest income

101



44



64



16



—



225


Noninterest expenses

148



179



83



3



6



419


Provision (benefit) for income taxes (FTE)

118



7



14



(64)



(4)



71


Net income (loss)

$

212



$

13



$

24



$

(100)



$

—



$

149


Net credit-related charge-offs

$

—



$

3



$

(2)



—



—



$

1














Selected average balances:












Assets

$

38,039



$

6,145



$

5,044



$

12,222



$

7,861



$

69,311


Loans

37,034



5,475



4,852



—



—



47,361


Deposits

30,925



22,037



4,330



195



273



57,760














Statistical data:












Return on average assets (a)

2.24

%


0.22

%


1.88

%


N/M



N/M



0.86

%

Efficiency ratio (b)

30.30



91.56



74.30



N/M



N/M



65.26















Business


Retail


Wealth







Three Months Ended September 30, 2014

Bank


Bank


Management


Finance


Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

377



$

150



$

47



$

(166)



$

7



$

415


Provision for credit losses

(4)



—



7



—



2



5


Noninterest income

94



41



63



15



2



215


Noninterest expenses

152



181



82



(29)



11



397


Provision (benefit) for income taxes (FTE)

113



3



8



(49)



(1)



74


Net income (loss)

$

210



$

7



$

13



$

(73)



$

(3)



$

154


Net credit-related charge-offs

$

(2)



$

—



$

5



—



—



$

3














Selected average balances:












Assets

$

37,898



$

6,117



$

5,007



$

11,026



$

6,353



$

66,401


Loans

36,894



5,452



4,813



—



—



47,159


Deposits

28,841



21,785



4,155



128



254



55,163














Statistical data:












Return on average assets (a)

2.22

%


0.12

%


1.05

%


N/M



N/M



0.93

%

Efficiency ratio (b)

32.32



93.96



74.98



N/M



N/M



62.87















Business


Retail


Wealth







Three Months Ended December 31, 2013

Bank


Bank


Management


Finance


Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

387



$

150



$

47



$

(161)



8



$

431


Provision for credit losses

24



(8)



(9)



—



2



9


Noninterest income

95



43



61



14



6



219


Noninterest expenses

198



178



80



2



15



473


Provision (benefit) for income taxes (FTE)

90



8



13



(57)



(3)



51


Net income (loss)

$

170



$

15



$

24



$

(92)



$

—



$

117


Net credit-related charge-offs

$

6



$

4



$

3



—



—



$

13














Selected average balances:












Assets

$

35,039



$

5,997



$

4,873



$

11,032



$

7,661



$

64,602


Loans

34,020



5,323



4,711



—



—



44,054


Deposits

26,873



21,438



3,933



323



202



52,769














Statistical data:












Return on average assets (a)

1.94

%


0.27

%


1.93

%


N/M



N/M



0.72

%

Efficiency ratio (b)

40.97



92.27



74.64



N/M



N/M



72.81


(a)

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

(b)

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

FTE - Fully Taxable Equivalent

N/M - Not Meaningful

MARKET SEGMENT FINANCIAL RESULTS (unaudited)

Comerica Incorporated and Subsidiaries



































(dollar amounts in millions)







Other


Finance



Three Months Ended December 31, 2014

Michigan


California


Texas


Markets


& Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

173



$

192



$

139



$

82



$

(170)



$

416


Provision for credit losses

(19)



(10)



18



8



5



2


Noninterest income

92



38



35



44



16



225


Noninterest expenses

157



102



95



56



9



419


Provision (benefit) for income taxes (FTE)

46



55



23



15



(68)



71


Net income (loss)

$

81



$

83



$

38



$

47



$

(100)



$

149


Net credit-related charge-offs (recoveries)

$

(5)



$

1



$

2



$

3



$

—



$

1














Selected average balances:












Assets

$

13,605



$

16,035



$

12,003



$

7,585



$

20,083



$

69,311


Loans

13,142



15,777



11,327



7,115



—



47,361


Deposits

21,530



18,028



10,825



6,909



468



57,760














Statistical data:












Return on average assets (a)

1.44

%


1.75

%


1.27

%


2.45

%


N/M



0.86

%

Efficiency ratio (b)

59.28



44.27



54.31



44.47



N/M



65.26





















Other


Finance



Three Months Ended September 30, 2014

Michigan


California


Texas


Markets


& Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

179



$

182



$

130



$

83



$

(159)



$

415


Provision for credit losses

(8)



14



3



(6)



2



5


Noninterest income

87



37



32



42



17



215


Noninterest expenses

166



103



95



51



(18)



397


Provision (benefit) for income taxes (FTE)

40



39



24



21



(50)



74


Net income (loss)

$

68



$

63



$

40



$

59



$

(76)



$

154


Net credit-related charge-offs

$

3



$

6



$

—



$

(6)



$

—



$

3














Selected average balances:












Assets

$

13,724



$

15,768



$

11,835



$

7,695



$

17,379



$

66,401


Loans

13,248



15,509



11,147



7,255



—



47,159


Deposits

21,214



16,350



10,633



6,584



382



55,163














Statistical data:












Return on average assets (a)

1.22

%


1.46

%


1.34

%


3.08

%


N/M



0.93

%

Efficiency ratio (b)

62.28



46.72



58.75



41.16



N/M



62.87





















Other


Finance



Three Months Ended December 31, 2013

Michigan


California


Texas


Markets


& Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

187



$

176



$

147



$

74



$

(153)



$

431


Provision for credit losses

5



(6)



5



3



2



9


Noninterest income

89



37



33



40



20



219


Noninterest expenses

218



98



91



49



17



473


Provision (benefit) for income taxes (FTE)

20



45



31



15



(60)



51


Net income (loss)

$

33



$

76



$

53



$

47



$

(92)



$

117


Net credit-related charge-offs

$

(4)



$

(2)



$

13



$

6



$

—



$

13














Selected average balances:












Assets

$

13,712



$

14,710



$

10,458



$

7,029



$

18,693



$

64,602


Loans

13,323



14,431



9,766



6,534



—



44,054


Deposits

20,501



15,219



10,536



5,988



525



52,769














Statistical data:












Return on average assets (a)

0.62

%


1.87

%


1.79

%


2.66

%


N/M



0.72

%

Efficiency ratio (b)

79.04



46.12



50.84



42.32



N/M



72.81


(a)

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

(b)

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

FTE - Fully Taxable Equivalent

N/M - Not Meaningful

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)

2014

2014

2014

2014

2013







Tier 1 Common Capital Ratio:






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

$

7,168


$

7,105


$

7,027


$

6,962


$

6,895


Risk-weighted assets (a) (b)

$

68,101


67,106


66,911


65,788


64,825








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

10.53

%

10.59

%

10.50

%

10.58

%

10.64

%







Basel III Common Equity Tier 1 Capital Ratio:






Tier 1 common capital (b)

$

7,168


$

7,105


$

7,027


$

6,962


$

6,895


Basel III adjustments (c)

—


(1)


(1)


(2)


(6)


Basel III common equity Tier 1 capital (c)

7,168


7,104


7,026


6,960


6,889








Risk-weighted assets (a) (b)

$

68,101


$

67,106


$

66,911


$

65,788


$

64,825


Basel III adjustments (c)

1,751


1,492


1,594


1,590


1,754


Basel III risk-weighted assets (c)

$

69,852


$

68,598


$

68,505


$

67,378


$

66,579








Tier 1 common capital ratio (b)

10.5

%

10.6

%

10.5

%

10.6

%

10.6

%

Basel III common equity Tier 1 capital ratio (c)

10.3


10.4


10.3


10.3


10.3








Tangible Common Equity Ratio:






Common shareholders' equity

$

7,402


$

7,433


$

7,369


$

7,283


$

7,150


Less:






Goodwill

635


635


635


635


635


Other intangible assets

15


15


15


16


17


Tangible common equity

$

6,752


$

6,783


$

6,719


$

6,632


$

6,498








Total assets

$

69,190


$

68,887


$

65,325


$

65,681


$

65,224


Less:






Goodwill

635


635


635


635


635


Other intangible assets

15


15


15


16


17


Tangible assets

$

68,540


$

68,237


$

64,675


$

65,030


$

64,572








Common equity ratio

10.85

%

10.79

%

11.28

%

11.09

%

10.97

%

Tangible common equity ratio

9.85


9.94


10.39


10.20


10.07








Tangible Common Equity per Share of Common Stock:






Common shareholders' equity

$

7,402


$

7,433


$

7,369


$

7,283


$

7,150


Tangible common equity

6,752


6,783


6,719


6,632


6,498








Shares of common stock outstanding (in millions)

179


180


181


182


182








Common shareholders' equity per share of common stock

$

41.35


$

41.26


$

40.72


$

40.09


$

39.22


Tangible common equity per share of common stock

37.72


37.65


37.12


36.50


35.64


(a)

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

(b)

December 31, 2014 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, as fully phased-in, 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 common equity Tier 1 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.

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SOURCE Comerica Incorporated

Related Links

http://www.comerica.com

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