COMERICA REPORTS THIRD QUARTER 2012 NET INCOME OF $117 MILLION
Customer Relationship Focus Supports Loan and Deposit Growth
Average Total Loan Growth Continues - Driven by a $717 Million,
3 Percent Increase in Commercial Loans
Average Deposits Increase to Record Level of $50 Billion
Strong Capital Supports Shareholder Return of $119 Million
DALLAS/October 17, 2012 -- Comerica Incorporated (NYSE: CMA) today reported third quarter 2012 net income of $117 million, compared to $144 million for the second quarter 2012. Earnings per fully diluted share was 61 cents compared to 73 cents for the second quarter 2012. Third quarter 2012 earnings per fully diluted share included restructuring expenses of 8 cents associated with the acquisition of Sterling Bancshares, Inc. (Sterling) compared to 2 cents for the second quarter 2012.
| (dollar amounts in millions, except per share data) | 3rd Qtr '12 | 2nd Qtr '12 | 3rd Qtr '11 | ||||||||
| Net interest income (a) | $ | 427 | $ | 435 | $ | 423 | |||||
| Provision for credit losses | 22 | 19 | 35 | ||||||||
| Noninterest income | 197 | 211 | 201 | ||||||||
| Noninterest expenses (b) | 449 | 433 | 463 | ||||||||
| Provision for income taxes | 36 | 50 | 28 | ||||||||
| Net income | 117 | 144 | 98 | ||||||||
| Net income attributable to common shares | 116 | 142 | 97 | ||||||||
| Diluted income per common share | 0.61 | 0.73 | 0.51 | ||||||||
| Average diluted shares (in millions) | 191 | 194 | 192 | ||||||||
| Tier 1 common capital ratio (d) | 10.32 | % | (c) | 10.38 | % | 10.57 | % | ||||
| Tangible common equity ratio (d) | 10.25 | 10.27 | 10.43 | ||||||||
| (a) | Included accretion of the purchase discount on the acquired Sterling loan portfolio of $15 million ($9 million, after tax), $18 million ($11 million, after tax) and $27 million ($17 million, after tax) in the third and second quarter 2012 and the third quarter 2011, respectively. |
| (b) | Included restructuring expenses of $25 million ($16 million, after tax), $8 million ($5 million, after tax) and $33 million ($21 million, after tax) in the third and second quarter 2012 and the third quarter 2011, respectively, associated with the acquisition of Sterling. |
| (c) | September 30, 2012 ratio is estimated. |
| (d) | See Reconciliation of Non-GAAP Financial Measures. |
"Our customer relationship focus supported loan and deposit growth in the third quarter, despite a slow growing national economy," said Ralph W. Babb Jr., chairman and chief executive officer. "Average loans were up $369 million, or 1 percent, compared to the second quarter, primarily reflecting an increase of $717 million, or 3 percent, in commercial loans. This was the ninth consecutive quarter of average commercial loan growth, resulting in more than a 20 percent year-over-year increase, including our acquisition of Sterling in July 2011. The increase in average commercial loans in the third quarter was primarily driven by increases in Mortgage Banker Finance, Technology and Life Sciences, and Energy.
"Net interest income declined slightly, reflecting the expected continued shift in loan portfolio mix and decline in accretion, as well as a decline in nonaccrual interest received and a leasing residual value adjustment. Lower loan and securities portfolio yields were partially offset by increased loan volume.''
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COMERICA REPORTS THIRD QUARTER 2012 NET INCOME OF $117 MILLION - 2
"Strong noninterest-bearing deposit growth continued in the third quarter. We had record average deposits of $50 billion in the third quarter 2012, with an increase of $1 billion, primarily driven by the increase in noninterest-bearing deposits.
"Our capital position remained a source of strength. We repurchased 2.9 million shares in the third quarter under our share repurchase program. Combined with our dividend, we returned $119 million to shareholders in the third quarter."
Third Quarter 2012 Compared to Second Quarter 2012
| • | Average total loans increased $369 million, or 1 percent, primarily reflecting an increase of $717 million, or 3 percent, in commercial loans, partially offset by a decrease of $344 million, or 3 percent, in commercial real estate loans (commercial mortgage and real estate construction loans). The increase in commercial loans was primarily driven by increases in Mortgage Banker Finance, Technology and Life Sciences and Energy. |
| • | Average total deposits increased $1.2 billion, to $49.9 billion, primarily reflecting an increase of $1.3 billion, or 7 percent, in noninterest-bearing deposits. |
| • | Strong credit quality continued in the third quarter 2012. Nonaccrual loans decreased $54 million, to $665 million at September 30, 2012. Net credit-related charge-offs decreased $2 million to $43 million, or 0.39 percent of average loans, in the third quarter 2012. The provision for credit losses was $22 million in the third quarter 2012 compared to $19 million in the second quarter 2012. |
| • | Net interest income was $427 million in the third quarter 2012 compared to $435 million in the second quarter 2012. The $8 million decrease in net interest income was primarily due to a decline in nonaccrual interest received($4 million) and a leasing residual value adjustment ($2 million), as well as the expected continued shift in the mix of the loan portfolio ($6 million), a decrease in the accretion of the purchase discount on the acquired Sterling loan portfolio ($3 million) and lower reinvestment yields on mortgage-backed investment securities ($2 million), partially offset by lower funding costs ($2 million), an increase in loan volumes ($3 million) and one more day in the third quarter ($4 million). |
| • | Noninterest income was $197 million in the third quarter 2012 compared to $211 million for the second quarter 2012. The $14 million decrease was primarily due to decreases in certain non-customer driven income categories. Net securities gains of $6 million and a $5 million annual incentive bonus received in the second quarter 2012 were not repeated in the third quarter, and net income from principal investing and warrants declined $3 million. |
| • | Noninterest expenses were $449 million in the third quarter 2012, compared to $433 million in the second quarter 2012. The $16 million increase primarily reflected a $17 million increase in restructuring expenses related to the Sterling acquisition. |
| • | Comerica repurchased 2.9 million shares of common stock under the share repurchase program in the third quarter 2012. Combined with the dividend, and in accordance with the capital plan approved earlier this year, $119 million, or 101 percent of net income, was returned to shareholders in the third quarter (89 percent, excluding the third quarter restructuring charge). |
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COMERICA REPORTS THIRD QUARTER 2012 NET INCOME OF $117 MILLION - 3
Net Interest Income
| (dollar amounts in millions) | 3rd Qtr '12 | 2nd Qtr '12 | 3rd Qtr '11 | ||||||||
| Net interest income | $ | 427 | $ | 435 | $ | 423 | |||||
| Net interest margin | 2.96 | % | 3.10 | % | 3.18 | % | |||||
| Selected average balances (a): | |||||||||||
| Total earning assets | $ | 57,801 | $ | 56,653 | $ | 53,243 | |||||
| Total loans | 43,597 | 43,228 | 40,098 | ||||||||
| Total investment securities | 9,791 | 9,728 | 8,158 | ||||||||
| Federal Reserve Bank deposits (excess liquidity) | 4,160 | 3,463 | 4,800 | ||||||||
| Total deposits | 49,857 | 48,679 | 45,098 | ||||||||
| Total noninterest-bearing deposits | 21,469 | 20,128 | 17,511 | ||||||||
a) Average balances in 3rd quarter 2011 included Sterling balances from July 28 through September 30, 2011. | |||||||||||
| • | Net interest income of $427 million in the third quarter 2012 decreased $8 million compared to the second quarter 2012. |
| ◦ | Second quarter 2012 included an unusually high amount of interest received on nonaccrual loans, which declined by $4 million in the third quarter. In addition, third quarter 2012 included a $2 million negative residual value adjustment to assets in the leasing portfolio. |
| ◦ | The continued shift in the loan portfolio mix reduced net interest income $6 million, primarily due to the decrease in higher-yielding commercial real estate loans, the increase in lower-yielding commercial loans, the maturity of higher-yielding fixed-rate loans and positive credit quality migration throughout the loan portfolio. |
| ◦ | Accretion of the purchase discount on the acquired Sterling loan portfolio decreased $3 million, to $15 million in the third quarter 2012, compared to $18 million in the second quarter 2012. For the fourth quarter of 2012, $7 million to $9 million of accretion is expected to be recognized. |
| ◦ | Interest earned on investment securities available-for-sale decreased $2 million, as a result of lower reinvestment yields on mortgage-backed investment securities. |
| ◦ | An increase in loan volumes ($3 million), one more day in the third quarter ($4 million) and lower funding costs ($2 million) partially offset the items noted above. |
| • | Average earning assets increased $1.1 billion in the third quarter 2012, compared to the second quarter 2012, primarily reflecting a $697 million increase in excess liquidity and a $369 million increase in average loans. |
| • | Average deposits increased $1.2 billion in the third quarter 2012, compared to the second quarter 2012, primarily due to a $1.3 billion increase in average noninterest-bearing deposits, partially offset by a decrease in customer certificates of deposit. The rate paid on total average interest-bearing deposits decreased 1 basis point, to 24 basis points. |
| • | Net interest margin of 2.96 percent decreased 14 basis points compared to the second quarter 2012. In addition to the decrease from the unusually high amount of nonaccrual interest received in the second quarter (3 basis points) and the negative leasing residual value adjustment in the third quarter (2 basis points), net interest margin was negatively impacted by lower accretion on the acquired Sterling loan portfolio (2 basis points), continued shift in mix in the loan portfolio (3 basis points), lower reinvestment yields on mortgage-backed securities (2 basis points) and the increase in excess liquidity (3 basis points). Lower funding costs partially offset the decline (1 basis point). |
Noninterest Income
Noninterest income totaled $197 million for the third quarter 2012 compared to $211 million for the second quarter 2012. The $14 million decrease was primarily due to decreases in certain non-customer driven income categories. Net securities gains of $6 million and a $5 million annual incentive bonus received from Comerica's third-party credit card provider in the second quarter 2012 were not repeated in the third quarter, and net income from principal investing and warrants declined $3 million. Additionally, customer derivative
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COMERICA REPORTS THIRD QUARTER 2012 NET INCOME OF $117 MILLION - 4
income decreased $3 million in the third quarter 2012. These declines were partially offset by a $5 million increase in deferred compensation asset returns. The increase in deferred compensation asset returns is offset by an increase in deferred compensation expense in noninterest expenses.
Noninterest Expenses
Noninterest expenses totaled $449 million in the third quarter 2012 compared to $433 million in the second quarter 2012. The $16 million increase was primarily due to increases of $17 million in restructuring expenses and $3 million in salaries expense, partially offset by a decrease of $5 million in legal expenses. Additionally, noninterest expenses were reduced by $6 million in the third quarter 2012 and $3 million in the second quarter due to gains on sales of assets. Restructuring charges related to the Sterling acquisition are substantially complete. The increase in salaries expense was primarily due to a $5 million increase in deferred compensation expense, partially offset by a $3 million decrease in executive incentive compensation.
Credit Quality
"Credit quality continued to be strong," said Babb. "With 39 basis points of net charge-offs and watch list loans at 8.3 percent of the total loan portfolio, we are well within our historical normal range."
| (dollar amounts in millions) | 3rd Qtr '12 | 2nd Qtr '12 | 3rd Qtr '11 | ||||||||
| Net credit-related charge-offs | $ | 43 | $ | 45 | $ | 77 | |||||
| Net credit-related charge-offs/Average total loans | 0.39 | % | 0.42 | % | 0.77 | % | |||||
| Provision for credit losses | $ | 22 | $ | 19 | $ | 35 | |||||
| Nonperforming loans (a) | 692 | 747 | 958 | ||||||||
| Nonperforming assets (NPAs) (a) | 755 | 814 | 1,045 | ||||||||
| NPAs/Total loans and foreclosed property | 1.71 | % | 1.85 | % | 2.53 | % | |||||
| Loans past due 90 days or more and still accruing | $ | 36 | $ | 43 | $ | 81 | |||||
| Allowance for loan losses | 647 | 667 | 767 | ||||||||
| Allowance for credit losses on lending-related commitments (b) | 35 | 36 | 27 | ||||||||
| Total allowance for credit losses | 682 | 703 | 794 | ||||||||
| Allowance for loan losses/Total loans | 1.46 | % | 1.52 | % | 1.86 | % | |||||
| Allowance for loan losses/Nonperforming loans | 94 | 89 | 80 | ||||||||
| (a) | Excludes loans acquired with credit impairment. |
| (b) | Included in "Accrued expenses and other liabilities" on the consolidated balance sheets. |
| • | Internal watch list loans continued the downward trend, declining $182 million in the third quarter 2012, to $3.7 billion at September 30, 2012. Nonperforming assets decreased $59 million to $755 million at September 30, 2012. |
| • | During the third quarter 2012, $35 million of borrower relationships over $2 million were transferred to nonaccrual status, a decrease of $12 million from the second quarter 2012. |
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $63.3 billion and $7.1 billion, respectively, at September 30, 2012, compared to $62.7 billion and 7.0 billion, respectively, at June 30, 2012. There were approximately 191 million common shares outstanding at September 30, 2012. Comerica repurchased $90 million of common stock (2.9 million shares) under the share repurchase program during the third quarter 2012. Combined with the dividend of $0.15 per share in the third quarter 2012, and in accordance with the capital plan approved earlier this year, share repurchases and dividends returned 101 percent of third quarter 2012 net income to shareholders (89 percent, excluding the third quarter restructuring charge).
Comerica's tangible common equity ratio was 10.25% at September 30, 2012, a decrease of 2 basis points from June 30, 2012. The estimated Tier 1 common capital ratio decreased 6 basis points, to 10.32% at September 30, 2012, from June 30, 2012.
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COMERICA REPORTS THIRD QUARTER 2012 NET INCOME OF $117 MILLION - 5
Full-Year 2012 Outlook Compared to Full-Year 2011
For 2012, management expects the following, assuming a continuation of the current economic environment:
| • | Average loans increasing 7 percent to 8 percent. |
| • | Net interest income increasing 4 percent to 5 percent. |
| • | Net credit-related charge-offs and provision for credit losses declining. |
| • | Noninterest income increasing 1 percent to 2 percent. |
| • | Noninterest expenses increasing or decreasing 1 percent. |
| • | Effective tax rate of approximately 26 percent. |
Business Segments
Comerica's operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank and Wealth Management. The Finance Division is also reported as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at September 30, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2012 results compared to second quarter 2012.
The following table presents net income (loss) by business segment.
| (dollar amounts in millions) | 3rd Qtr '12 | 2nd Qtr '12 | 3rd Qtr '11 | ||||||||||||||
| Business Bank | $ | 211 | 88 | % | $ | 210 | 84 | % | $ | 179 | 86 | % | |||||
| Retail Bank | 10 | 4 | 19 | 8 | 19 | 9 | |||||||||||
| Wealth Management | 18 | 8 | 20 | 8 | 11 | 5 | |||||||||||
| 239 | 100 | % | 249 | 100 | % | 209 | 100 | % | |||||||||
| Finance | (103 | ) | (95 | ) | (91 | ) | |||||||||||
| Other (a) | (19 | ) | (10 | ) | (20 | ) | |||||||||||
| Total | $ | 117 | $ | 144 | $ | 98 | |||||||||||
(a) Includes items not directly associated with the three major business segments or the Finance Division.
Business Bank
| (dollar amounts in millions) | 3rd Qtr '12 | 2nd Qtr '12 | 3rd Qtr '11 | ||||||||
| Net interest income (FTE) | $ | 386 | $ | 385 | $ | 363 | |||||
| Provision for credit losses | 15 | 12 | 18 | ||||||||
| Noninterest income | 76 | 83 | 77 | ||||||||
| Noninterest expenses | 144 | 151 | 164 | ||||||||
| Net income | 211 | 210 | 179 | ||||||||
| Net credit-related charge-offs | 27 | 26 | 40 | ||||||||
| Selected average balances: | |||||||||||
| Assets | 34,863 | 34,376 | 30,608 | ||||||||
| Loans | 33,856 | 33,449 | 29,957 | ||||||||
| Deposits | 25,142 | 24,145 | 21,759 | ||||||||
| • | Average loans increased $407 million, primarily due to increases in Mortgage Banker Finance and Middle Market, partially offset by a decrease in Commercial Real Estate. The increase in Middle Market primarily reflected increases in Energy and Technology and Life Sciences. |
| • | Average deposits increased $997 million. The increase was broad-based, reflecting increases in Middle Market, Corporate, Commercial Real Estate and Mortgage Banker Finance. |
| • | Net interest income increased $1 million, primarily due to higher loan volumes, increased net funds transfer pricing (FTP) credits, as a result of higher deposit balances, and one more day in the third quarter, partially offset by decreases in loan yields and accretion on the acquired Sterling loan portfolio. |
| • | The provision for credit losses increased $3 million, primarily reflecting increases in Middle Market and Mortgage Banker Finance, partially offset by a decrease in Commercial Real Estate. The increase in |
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COMERICA REPORTS THIRD QUARTER 2012 NET INCOME OF $117 MILLION - 6
Middle Market primarily reflected increases in Technology and Life Sciences, National Dealer Services and Energy, partially offset by a decrease in general Middle Market.
| • | Noninterest income decreased $7 million, primarily due to decreases in commercial lending fees and warrant income. |
| • | Noninterest expenses decreased $7 million, primarily due to decreases in net allocated corporate overhead expense and processing charges, and a third quarter gain on sale of assets; partially offset by an increase in legal expenses. |
Retail Bank
| (dollar amounts in millions) | 3rd Qtr '12 | 2nd Qtr '12 | 3rd Qtr '11 | ||||||||
| Net interest income (FTE) | $ | 161 | $ | 161 | $ | 173 | |||||
| Provision for credit losses | 6 | 3 | 16 | ||||||||
| Noninterest income | 41 | 47 | 47 | ||||||||
| Noninterest expenses | 181 | 177 | 175 | ||||||||
| Net income (loss) | 10 | 19 | 19 | ||||||||
| Net credit-related charge-offs | 13 | 9 | 28 | ||||||||
| Selected average balances: | |||||||||||
| Assets | 5,964 | 5,946 | 5,985 | ||||||||
| Loans | 5,265 | 5,250 | 5,483 | ||||||||
| Deposits | 20,682 | 20,525 | 19,792 | ||||||||
| • | Average deposits increased $157 million, primarily due to an increase in Small Business. |
| • | The provision for credit losses increased $3 million, primarily due to an increase in Small Business. |
| • | Noninterest income decreased $6 million, primarily due to a $5 million annual incentive bonus received in the second quarter 2012 from Comerica's third-party credit card provider. |
| • | Noninterest expenses increased $4 million, primarily due to small increases in several noninterest expense categories. |
Wealth Management
| (dollar amounts in millions) | 3rd Qtr '12 | 2nd Qtr '12 | 3rd Qtr '11 | ||||||||
| Net interest income (FTE) | $ | 47 | $ | 46 | $ | 45 | |||||
| Provision for credit losses | 3 | 2 | 7 | ||||||||
| Noninterest income | 62 | 66 | 56 | ||||||||
| Noninterest expenses | 78 | 79 | 77 | ||||||||
| Net income | 18 | 20 | 11 | ||||||||
| Net credit-related charge-offs | 3 | 10 | 9 | ||||||||
| Selected average balances: | |||||||||||
| Assets | 4,566 | 4,604 | 4,674 | ||||||||
| Loans | 4,476 | 4,529 | 4,658 | ||||||||
| Deposits | 3,667 | 3,640 | 3,198 | ||||||||
| • | Average loans decreased $53 million, primarily due to a decrease in Private Banking. |
| • | Average deposits increased $27 million, primarily due to an increase in Private Banking. |
| • | Noninterest income decreased $4 million, primarily due a decrease in gains on the sale of auction-rate securities. |
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COMERICA REPORTS THIRD QUARTER 2012 NET INCOME OF $117 MILLION - 7
Geographic Market Segments
Comerica also provides market segment results for four primary geographic markets: Midwest, Western, Texas and Florida. In addition to the four primary geographic markets, Other Markets and International are also reported as market segments. The financial results below are based on methodologies in effect at September 30, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2012 results compared to second quarter 2012.
The following table presents net income (loss) by market segment.
| (dollar amounts in millions) | 3rd Qtr '12 | 2nd Qtr '12 | 3rd Qtr '11 | ||||||||||||||
| Midwest | $ | 71 | 30 | % | $ | 75 | 31 | % | $ | 60 | 28 | % | |||||
| Western | 70 | 29 | 69 | 27 | 50 | 23 | |||||||||||
| Texas | 45 | 19 | 51 | 20 | 64 | 31 | |||||||||||
| Florida | (1 | ) | — | (5 | ) | (2 | ) | 1 | 1 | ||||||||
| Other Markets | 41 | 17 | 47 | 19 | 22 | 11 | |||||||||||
| International | 13 | 5 | 12 | 5 | 12 | 6 | |||||||||||
| 239 | 100 | % | 249 | 100 | % | 209 | 100 | % | |||||||||
| Finance & Other (a) | (122 | ) | (105 | ) | (111 | ) | |||||||||||
| Total | $ | 117 | $ | 144 | $ | 98 | |||||||||||
(a) Includes items not directly associated with the geographic markets.
Midwest Market
| (dollar amounts in millions) | 3rd Qtr '12 | 2nd Qtr '12 | 3rd Qtr '11 | ||||||||
| Net interest income (FTE) | $ | 194 | $ | 196 | $ | 199 | |||||
| Provision for credit losses | 2 | 1 | 20 | ||||||||
| Noninterest income | 95 | 96 | 96 | ||||||||
| Noninterest expenses | 175 | 177 | 183 | ||||||||
| Net income | 71 | 75 | 60 | ||||||||
| Net credit-related charge-offs | 12 | 10 | 33 | ||||||||
| Selected average balances: | |||||||||||
| Assets | 13,784 | 14,028 | 14,118 | ||||||||
| Loans | 13,468 | 13,766 | 13,873 | ||||||||
| Deposits | 19,628 | 19,227 | 18,510 | ||||||||
| • | Average loans decreased $298 million, primarily due to decreases in Middle Market, Commercial Real Estate, Corporate, and Private Banking. |
| • | Average deposits increased $401 million, primarily due to increases in Corporate, Middle Market and Small Business, partially offset by a decrease in Personal Banking. |
| • | Net interest income decreased $2 million, primarily due to decreases in loan volumes and yields, partially offset by one more day in the third quarter 2012 and an increase in net FTP credits, primarily as a result of higher deposit balances and lower loan balances. |
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COMERICA REPORTS THIRD QUARTER 2012 NET INCOME OF $117 MILLION - 8
Western Market
| (dollar amounts in millions) | 3rd Qtr '12 | 2nd Qtr '12 | 3rd Qtr '11 | ||||||||
| Net interest income (FTE) | $ | 181 | $ | 177 | $ | 166 | |||||
| Provision for credit losses | — | 1 | 13 | ||||||||
| Noninterest income | 34 | 37 | 32 | ||||||||
| Noninterest expenses | 105 | 104 | 106 | ||||||||
| Net income | 70 | 69 | 50 | ||||||||
| Net credit-related charge-offs | 10 | 12 | 32 | ||||||||
| Selected average balances: | |||||||||||
| Assets | 13,442 | 13,170 | 12,110 | ||||||||
| Loans | 13,163 | 12,920 | 11,889 | ||||||||
| Deposits | 15,192 | 14,371 | 12,975 | ||||||||
| • | Average loans increased $243 million, primarily due to increases in Middle Market and Corporate. The increase in Middle Market primarily reflected increases in Technology and Life Sciences and National Dealer Services. |
| • | Average deposits increased $821 million, primarily due to increases in Middle Market, Commercial Real Estate and Small Business. The increase in Middle Market was broad-based. |
| • | Net interest income increased $4 million, primarily due to an increase in loan volumes, one more day in the third quarter 2012, and an increase in net FTP credits as a result of higher deposit balances. |
| • | Noninterest income decreased $3 million, primarily due to a decrease in warrant income. |
Texas Market
| (dollar amounts in millions) | 3rd Qtr '12 | 2nd Qtr '12 | 3rd Qtr '11 | ||||||||
| Net interest income (FTE) | $ | 139 | $ | 143 | $ | 143 | |||||
| Provision for credit losses | 10 | 7 | (8 | ) | |||||||
| Noninterest income | 30 | 31 | 29 | ||||||||
| Noninterest expenses | 89 | 88 | 81 | ||||||||
| Net income | 45 | 51 | 64 | ||||||||
| Net credit-related charge-offs | 7 | 4 | 2 | ||||||||
| Selected average balances: | |||||||||||
| Assets | 10,327 | 10,270 | 8,510 | ||||||||
| Loans | 9,585 | 9,506 | 8,145 | ||||||||
| Deposits | 9,941 | 10,185 | 8,865 | ||||||||
| • | Average loans increased $79 million, primarily due to an increase in Middle Market, partially offset by a decrease in Commercial Real Estate. The increase in Middle Market was primarily due to an increase in Energy. |
| • | Average deposits decreased $244 million, primarily reflecting decreases in Middle Market, Small Business and Private Banking. The decrease in Middle Market primarily reflected decreases in Technology and Life Sciences and Energy. |
| • | Net interest income decreased $4 million, primarily due to a decrease in accretion on the acquired Sterling loan portfolio and lower loan yields, partially offset by an increase in loan volumes and one more day in the third quarter 2012. |
| • | The provision for credit losses increased $3 million, primarily due to an increase in Private Banking. |
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COMERICA REPORTS THIRD QUARTER 2012 NET INCOME OF $117 MILLION - 9
Florida Market
| (dollar amounts in millions) | 3rd Qtr '12 | 2nd Qtr '12 | 3rd Qtr '11 | ||||||||
| Net interest income (FTE) | $ | 10 | $ | 11 | $ | 11 | |||||
| Provision for credit losses | 5 | 11 | 2 | ||||||||
| Noninterest income | 3 | 4 | 4 | ||||||||
| Noninterest expenses | 10 | 11 | 11 | ||||||||
| Net income | (1 | ) | (5 | ) | 1 | ||||||
| Net credit-related charge-offs | 9 | 10 | 5 | ||||||||
| Selected average balances: | |||||||||||
| Assets | 1,309 | 1,407 | 1,450 | ||||||||
| Loans | 1,328 | 1,429 | 1,477 | ||||||||
| Deposits | 512 | 446 | 404 | ||||||||
| • | Average loans decreased $101 million, primarily due to decreases in Commercial Real Estate and Private Banking. |
| • | Average deposits increased $66 million, primarily due to an increase in Private Banking. |
| • | The provision for credit losses decreased $6 million, primarily due to decreases in Private Banking and Middle Market. |
Conference Call and Webcast
Comerica will host a conference call to review third quarter 2012 financial results at 7 a.m. CT Wednesday, October 17, 2012. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 31764718). The call and supplemental financial information can also be accessed via Comerica's "Investor Relations" page at www.comerica.com. A telephone replay will be available approximately two hours following the conference call through October 31, 2012. The conference call replay can be accessed by calling (855) 859-2056 or (404) 537-3406 (event ID No. 31764718). A replay of the Webcast can also be accessed via Comerica's “Investor Relations” page at www.comerica.com.
Comerica Incorporated is a financial services company headquartered in Dallas, Texas, and strategically aligned by three major business segments: The Business Bank, The Retail Bank and Wealth Management. Comerica focuses on relationships and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico.
This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Comerica's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as a reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
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COMERICA REPORTS THIRD QUARTER 2012 NET INCOME OF $117 MILLION - 10
Forward-looking Statements
Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “believes,” “contemplates,” “feels,” “expects,” “estimates,” “seeks,” “strives,” “plans,” “intends,” “outlook,” “forecast,” “position,” “target,” “mission,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “opportunity,” “initiative,” “outcome,” “continue,” “remain,” “maintain,” “on course,” “trend,” “objective,” “looks forward” and variations of such words and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, as they relate to Comerica or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of Comerica's management based on information known to Comerica's management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica's management for future or past operations, products or services, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability. Such statements reflect the view of Comerica's management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Comerica's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in general economic, political or industry conditions; changes in monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets; changes in Comerica's credit rating; the interdependence of financial service companies; changes in regulation or oversight; unfavorable developments concerning credit quality; the acquisition of Sterling Bancshares, Inc., or any future acquisitions; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers; the implementation of Comerica's strategies and business models, including the implementation of revenue enhancements and efficiency improvements; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties, failure of technology infrastructure or information security incidents; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; competitive product and pricing pressures among financial institutions within Comerica's markets; changes in customer behavior; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings; the effectiveness of methods of reducing risk exposures; the effects of terrorist activities and other hostilities; the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; changes in accounting standards and the critical nature of Comerica's accounting policies. Comerica cautions that the foregoing list of factors is not exclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to “Item 1A. Risk Factors” beginning on page 12 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2011. Forward-looking statements speak only as of the date they are made. Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this news release or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
| Media Contact: | Investor Contacts: |
| Wayne J. Mielke | Darlene P. Persons |
| (214) 462-4463 | (214) 462-6831 |
| Brittany L. Butler | |
| (214) 462-6834 | |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) | ||||||||||||||||
| Comerica Incorporated and Subsidiaries | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | June 30, | September 30, | September 30, | |||||||||||||
| (in millions, except per share data) | 2012 | 2012 | 2011 | 2012 | 2011 | |||||||||||
| PER COMMON SHARE AND COMMON STOCK DATA | ||||||||||||||||
| Diluted net income | $ | 0.61 | $ | 0.73 | $ | 0.51 | $ | 2.00 | $ | 1.61 | ||||||
| Cash dividends declared | 0.15 | 0.15 | 0.10 | 0.40 | 0.30 | |||||||||||
| Common shareholders' equity (at period end) | 37.01 | 36.18 | 34.94 | |||||||||||||
| Tangible common equity (at period end) (a) | 33.56 | 32.76 | 31.57 | |||||||||||||
| Average diluted shares (in thousands) | 191,492 | 194,487 | 191,634 | 193,991 | 182,602 | |||||||||||
| KEY RATIOS | ||||||||||||||||
| Return on average common shareholders' equity | 6.67 | % | 8.22 | % | 5.91 | % | 7.46 | % | 6.44 | % | ||||||
| Return on average assets | 0.74 | 0.93 | 0.67 | 0.84 | 0.71 | |||||||||||
| Tier 1 common capital ratio (a) (b) | 10.32 | 10.38 | 10.57 | |||||||||||||
| Tier 1 risk-based capital ratio (b) | 10.32 | 10.38 | 10.65 | |||||||||||||
| Total risk-based capital ratio (b) | 13.63 | 13.90 | 14.84 | |||||||||||||
| Leverage ratio (b) | 10.71 | 10.92 | 11.41 | |||||||||||||
| Tangible common equity ratio (a) | 10.25 | 10.27 | 10.43 | |||||||||||||
| AVERAGE BALANCES | ||||||||||||||||
| Commercial loans | $ | 26,700 | $ | 25,983 | $ | 22,127 | $ | 25,810 | $ | 21,769 | ||||||
| Real estate construction loans: | ||||||||||||||||
| Commercial Real Estate business line (c) | 999 | 1,035 | 1,269 | 1,029 | 1,501 | |||||||||||
| Other business lines (d) | 390 | 385 | 430 | 391 | 417 | |||||||||||
| Total real estate construction loans | 1,389 | 1,420 | 1,699 | 1,420 | 1,918 | |||||||||||
| Commercial mortgage loans: | ||||||||||||||||
| Commercial Real Estate business line (c) | 2,140 | 2,443 | 2,244 | 2,367 | 2,046 | |||||||||||
| Other business lines (d) | 7,530 | 7,540 | 8,031 | 7,584 | 7,856 | |||||||||||
| Total commercial mortgage loans | 9,670 | 9,983 | 10,275 | 9,951 | 9,902 | |||||||||||
| Lease financing | 852 | 869 | 936 | 873 | 960 | |||||||||||
| International loans | 1,302 | 1,265 | 1,163 | 1,257 | 1,212 | |||||||||||
| Residential mortgage loans | 1,488 | 1,487 | 1,606 | 1,498 | 1,577 | |||||||||||
| Consumer loans | 2,196 | 2,221 | 2,292 | 2,225 | 2,272 | |||||||||||
| Total loans | 43,597 | 43,228 | 40,098 | 43,034 | 39,610 | |||||||||||
| Earning assets | 57,801 | 56,653 | 53,243 | 56,884 | 50,923 | |||||||||||
| Total assets | 63,276 | 61,950 | 58,238 | 62,284 | 55,526 | |||||||||||
| Noninterest-bearing deposits | 21,469 | 20,128 | 17,511 | 20,415 | 16,259 | |||||||||||
| Interest-bearing deposits | 28,388 | 28,551 | 27,587 | 28,538 | 26,149 | |||||||||||
| Total deposits | 49,857 | 48,679 | 45,098 | 48,953 | 42,408 | |||||||||||
| Common shareholders' equity | 7,045 | 7,002 | 6,633 | 6,996 | 6,150 | |||||||||||
| NET INTEREST INCOME | ||||||||||||||||
| Net interest income (fully taxable equivalent basis) | $ | 428 | $ | 435 | $ | 424 | $ | 1,306 | $ | 1,212 | ||||||
| Fully taxable equivalent adjustment | 1 | — | 1 | 2 | 3 | |||||||||||
| Net interest margin (fully taxable equivalent basis) | 2.96 | % | 3.10 | % | 3.18 | % | 3.08 | % | 3.19 | % | ||||||
| CREDIT QUALITY | ||||||||||||||||
| Nonaccrual loans | $ | 665 | $ | 719 | $ | 929 | ||||||||||
| Reduced-rate loans | 27 | 28 | 29 | |||||||||||||
| Total nonperforming loans (e) | 692 | 747 | 958 | |||||||||||||
| Foreclosed property | 63 | 67 | 87 | |||||||||||||
| Total nonperforming assets (e) | 755 | 814 | 1,045 | |||||||||||||
| Loans past due 90 days or more and still accruing | 36 | 43 | 81 | |||||||||||||
| Gross loan charge-offs | 59 | 64 | 90 | $ | 185 | $ | 338 | |||||||||
| Loan recoveries | 16 | 19 | 13 | 52 | 70 | |||||||||||
| Net loan charge-offs | 43 | 45 | 77 | 133 | 268 | |||||||||||
| Allowance for loan losses | 647 | 667 | 767 | |||||||||||||
| Allowance for credit losses on lending-related commitments | 35 | 36 | 27 | |||||||||||||
| Total allowance for credit losses | 682 | 703 | 794 | |||||||||||||
| Allowance for loan losses as a percentage of total loans | 1.46 | % | 1.52 | % | 1.86 | % | ||||||||||
| Net loan charge-offs as a percentage of average total loans (f) | 0.39 | 0.42 | 0.77 | 0.41 | % | 0.90 | % | |||||||||
| Nonperforming assets as a percentage of total loans and foreclosed property (e) | 1.71 | 1.85 | 2.53 | |||||||||||||
| Allowance for loan losses as a percentage of total nonperforming loans | 94 | 89 | 80 | |||||||||||||
| (a) | See Reconciliation of Non-GAAP Financial Measures. |
| (b) | September 30, 2012 ratios are estimated. |
| (c) | Primarily loans to real estate investors and developers. |
| (d) | Primarily loans secured by owner-occupied real estate. |
| (e) | Excludes loans acquired with credit-impairment. |
| (f) | Lending-related commitment charge-offs were zero in all periods presented. |
11
| CONSOLIDATED BALANCE SHEETS | ||||||||||||
| Comerica Incorporated and Subsidiaries | ||||||||||||
| September 30, | June 30, | December 31, | September 30, | |||||||||
| (in millions, except share data) | 2012 | 2012 | 2011 | 2011 | ||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 933 | $ | 1,076 | $ | 982 | $ | 981 | ||||
| Interest-bearing deposits with banks | 3,005 | 3,065 | 2,574 | 4,217 | ||||||||
| Other short-term investments | 146 | 170 | 149 | 137 | ||||||||
| Investment securities available-for-sale | 10,569 | 9,940 | 10,104 | 9,732 | ||||||||
| Commercial loans | 27,460 | 27,016 | 24,996 | 23,113 | ||||||||
| Real estate construction loans | 1,392 | 1,377 | 1,533 | 1,648 | ||||||||
| Commercial mortgage loans | 9,559 | 9,830 | 10,264 | 10,539 | ||||||||
| Lease financing | 837 | 858 | 905 | 927 | ||||||||
| International loans | 1,277 | 1,224 | 1,170 | 1,046 | ||||||||
| Residential mortgage loans | 1,495 | 1,469 | 1,526 | 1,643 | ||||||||
| Consumer loans | 2,174 | 2,218 | 2,285 | 2,309 | ||||||||
| Total loans | 44,194 | 43,992 | 42,679 | 41,225 | ||||||||
| Less allowance for loan losses | (647 | ) | (667 | ) | (726 | ) | (767 | ) | ||||
| Net loans | 43,547 | 43,325 | 41,953 | 40,458 | ||||||||
| Premises and equipment | 625 | 667 | 675 | 685 | ||||||||
| Accrued income and other assets | 4,489 | 4,407 | 4,571 | 4,678 | ||||||||
| Total assets | $ | 63,314 | $ | 62,650 | $ | 61,008 | $ | 60,888 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| Noninterest-bearing deposits | $ | 21,753 | $ | 21,330 | $ | 19,764 | $ | 19,116 | ||||
| Money market and interest-bearing checking deposits | 20,407 | 20,008 | 20,311 | 20,237 | ||||||||
| Savings deposits | 1,589 | 1,629 | 1,524 | 1,771 | ||||||||
| Customer certificates of deposit | 5,742 | 6,045 | 5,808 | 5,980 | ||||||||
| Other time deposits | — | — | — | 45 | ||||||||
| Foreign office time deposits | 486 | 376 | 348 | 303 | ||||||||
| Total interest-bearing deposits | 28,224 | 28,058 | 27,991 | 28,336 | ||||||||
| Total deposits | 49,977 | 49,388 | 47,755 | 47,452 | ||||||||
| Short-term borrowings | 63 | 83 | 70 | 164 | ||||||||
| Accrued expenses and other liabilities | 1,450 | 1,409 | 1,371 | 1,312 | ||||||||
| Medium- and long-term debt | 4,740 | 4,742 | 4,944 | 5,009 | ||||||||
| Total liabilities | 56,230 | 55,622 | 54,140 | 53,937 | ||||||||
| Common stock - $5 par value: | ||||||||||||
| Authorized - 325,000,000 shares | ||||||||||||
| Issued - 228,164,824 shares | 1,141 | 1,141 | 1,141 | 1,141 | ||||||||
| Capital surplus | 2,153 | 2,144 | 2,170 | 2,162 | ||||||||
| Accumulated other comprehensive loss | (253 | ) | (301 | ) | (356 | ) | (230 | ) | ||||
| Retained earnings | 5,831 | 5,744 | 5,546 | 5,471 | ||||||||
| Less cost of common stock in treasury - 36,790,174 shares at 9/30/12, 33,889,392 shares at 6/30/12, 30,831,076 shares at 12/31/11 and 29,238,425 shares at 9/30/11 | (1,788 | ) | (1,700 | ) | (1,633 | ) | (1,593 | ) | ||||
| Total shareholders' equity | 7,084 | 7,028 | 6,868 | 6,951 | ||||||||
| Total liabilities and shareholders' equity | $ | 63,314 | $ | 62,650 | $ | 61,008 | $ | 60,888 | ||||
12
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) | |||||||||||||
| Comerica Incorporated and Subsidiaries | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| (in millions, except per share data) | 2012 | 2011 | 2012 | 2011 | |||||||||
| INTEREST INCOME | |||||||||||||
| Interest and fees on loans | $ | 400 | $ | 405 | $ | 1,219 | $ | 1,149 | |||||
| Interest on investment securities | 57 | 54 | 179 | 170 | |||||||||
| Interest on short-term investments | 3 | 4 | 9 | 9 | |||||||||
| Total interest income | 460 | 463 | 1,407 | 1,328 | |||||||||
| INTEREST EXPENSE | |||||||||||||
| Interest on deposits | 17 | 24 | 54 | 69 | |||||||||
| Interest on medium- and long-term debt | 16 | 16 | 49 | 50 | |||||||||
| Total interest expense | 33 | 40 | 103 | 119 | |||||||||
| Net interest income | 427 | 423 | 1,304 | 1,209 | |||||||||
| Provision for credit losses | 22 | 35 | 63 | 126 | |||||||||
| Net interest income after provision for credit losses | 405 | 388 | 1,241 | 1,083 | |||||||||
| NONINTEREST INCOME | |||||||||||||
| Service charges on deposit accounts | 53 | 53 | 162 | 156 | |||||||||
| Fiduciary income | 39 | 37 | 116 | 115 | |||||||||
| Commercial lending fees | 22 | 22 | 71 | 64 | |||||||||
| Letter of credit fees | 19 | 19 | 54 | 55 | |||||||||
| Card fees | 12 | 17 | 35 | 47 | |||||||||
| Foreign exchange income | 9 | 11 | 29 | 30 | |||||||||
| Bank-owned life insurance | 10 | 10 | 30 | 27 | |||||||||
| Brokerage fees | 5 | 5 | 14 | 17 | |||||||||
| Net securities gains | — | 12 | 11 | 18 | |||||||||
| Other noninterest income | 28 | 15 | 92 | 81 | |||||||||
| Total noninterest income | 197 | 201 | 614 | 610 | |||||||||
| NONINTEREST EXPENSES | |||||||||||||
| Salaries | 192 | 192 | 582 | 565 | |||||||||
| Employee benefits | 61 | 53 | 181 | 153 | |||||||||
| Total salaries and employee benefits | 253 | 245 | 763 | 718 | |||||||||
| Net occupancy expense | 40 | 44 | 121 | 122 | |||||||||
| Equipment expense | 17 | 17 | 50 | 49 | |||||||||
| Outside processing fee expense | 27 | 25 | 79 | 74 | |||||||||
| Software expense | 23 | 22 | 67 | 65 | |||||||||
| Merger and restructuring charges | 25 | 33 | 33 | 38 | |||||||||
| FDIC insurance expense | 9 | 8 | 29 | 35 | |||||||||
| Advertising expense | 7 | 7 | 21 | 21 | |||||||||
| Other real estate expense | 2 | 5 | 6 | 19 | |||||||||
| Other noninterest expenses | 46 | 57 | 161 | 151 | |||||||||
| Total noninterest expenses | 449 | 463 | 1,330 | 1,292 | |||||||||
| Income before income taxes | 153 | 126 | 525 | 401 | |||||||||
| Provision for income taxes | 36 | 28 | 134 | 104 | |||||||||
| NET INCOME | 117 | 98 | 391 | 297 | |||||||||
| Less income allocated to participating securities | 1 | 1 | 4 | 3 | |||||||||
| Net income attributable to common shares | $ | 116 | $ | 97 | $ | 387 | $ | 294 | |||||
| Earnings per common share: | |||||||||||||
| Basic | $ | 0.61 | $ | 0.51 | $ | 2.00 | $ | 1.63 | |||||
| Diluted | 0.61 | 0.51 | 2.00 | 1.61 | |||||||||
| Comprehensive income | 165 | 176 | 494 | 456 | |||||||||
| Cash dividends declared on common stock | 29 | 20 | 78 | 55 | |||||||||
| Cash dividends declared per common share | 0.15 | 0.10 | 0.40 | 0.30 | |||||||||
13
| CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited) | |||||||||||||||||||||||||||
| Comerica Incorporated and Subsidiaries | |||||||||||||||||||||||||||
| Third | Second | First | Fourth | Third | Third Quarter 2012 Compared To: | ||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | Second Quarter 2012 | Third Quarter 2011 | |||||||||||||||||||||
| (in millions, except per share data) | 2012 | 2012 | 2012 | 2011 | 2011 | Amount | Percent | Amount | Percent | ||||||||||||||||||
| INTEREST INCOME | |||||||||||||||||||||||||||
| Interest and fees on loans | $ | 400 | $ | 408 | $ | 411 | $ | 415 | $ | 405 | $ | (8 | ) | (2 | )% | $ | (5 | ) | (1 | )% | |||||||
| Interest on investment securities | 57 | 59 | 63 | 63 | 54 | (2 | ) | (4 | ) | 3 | 4 | ||||||||||||||||
| Interest on short-term investments | 3 | 3 | 3 | 3 | 4 | — | — | (1 | ) | (5 | ) | ||||||||||||||||
| Total interest income | 460 | 470 | 477 | 481 | 463 | (10 | ) | (2 | ) | (3 | ) | (1 | ) | ||||||||||||||
| INTEREST EXPENSE | |||||||||||||||||||||||||||
| Interest on deposits | 17 | 18 | 19 | 21 | 24 | (1 | ) | (4 | ) | (7 | ) | (26 | ) | ||||||||||||||
| Interest on medium- and long-term debt | 16 | 17 | 16 | 16 | 16 | (1 | ) | (5 | ) | — | — | ||||||||||||||||
| Total interest expense | 33 | 35 | 35 | 37 | 40 | (2 | ) | (5 | ) | (7 | ) | (15 | ) | ||||||||||||||
| Net interest income | 427 | 435 | 442 | 444 | 423 | (8 | ) | (2 | ) | 4 | 1 | ||||||||||||||||
| Provision for credit losses | 22 | 19 | 22 | 18 | 35 | 3 | 14 | (13 | ) | (38 | ) | ||||||||||||||||
Net interest income after provision for credit losses | 405 | 416 | 420 | 426 | 388 | (11 | ) | (2 | ) | 17 | 4 | ||||||||||||||||
| NONINTEREST INCOME | |||||||||||||||||||||||||||
| Service charges on deposit accounts | 53 | 53 | 56 | 52 | 53 | — | — | — | — | ||||||||||||||||||
| Fiduciary income | 39 | 39 | 38 | 36 | 37 | — | — | 2 | 7 | ||||||||||||||||||
| Commercial lending fees | 22 | 24 | 25 | 23 | 22 | (2 | ) | (10 | ) | — | — | ||||||||||||||||
| Letter of credit fees | 19 | 18 | 17 | 18 | 19 | 1 | 8 | — | — | ||||||||||||||||||
| Card fees | 12 | 12 | 11 | 11 | 17 | — | — | (5 | ) | (30 | ) | ||||||||||||||||
| Foreign exchange income | 9 | 10 | 10 | 10 | 11 | (1 | ) | (3 | ) | (2 | ) | (15 | ) | ||||||||||||||
| Bank-owned life insurance | 10 | 10 | 10 | 10 | 10 | — | — | — | — | ||||||||||||||||||
| Brokerage fees | 5 | 4 | 5 | 5 | 5 | 1 | 2 | — | — | ||||||||||||||||||
| Net securities gains (losses) | — | 6 | 5 | (4 | ) | 12 | (6 | ) | N/M | (12 | ) | N/M | |||||||||||||||
| Other noninterest income | 28 | 35 | 29 | 21 | 15 | (7 | ) | (18 | ) | 13 | 89 | ||||||||||||||||
| Total noninterest income | 197 | 211 | 206 | 182 | 201 | (14 | ) | (7 | ) | (4 | ) | (2 | ) | ||||||||||||||
| NONINTEREST EXPENSES | |||||||||||||||||||||||||||
| Salaries | 192 | 189 | 201 | 205 | 192 | 3 | 1 | — | — | ||||||||||||||||||
| Employee benefits | 61 | 61 | 59 | 52 | 53 | — | — | 8 | 16 | ||||||||||||||||||
| Total salaries and employee benefits | 253 | 250 | 260 | 257 | 245 | 3 | 1 | 8 | 3 | ||||||||||||||||||
| Net occupancy expense | 40 | 40 | 41 | 47 | 44 | — | — | (4 | ) | (7 | ) | ||||||||||||||||
| Equipment expense | 17 | 16 | 17 | 17 | 17 | 1 | 2 | — | — | ||||||||||||||||||
| Outside processing fee expense | 27 | 26 | 26 | 27 | 25 | 1 | — | 2 | 4 | ||||||||||||||||||
| Software expense | 23 | 21 | 23 | 23 | 22 | 2 | 6 | 1 | 5 | ||||||||||||||||||
| Merger and restructuring charges | 25 | 8 | — | 37 | 33 | 17 | N/M | (8 | ) | (22 | ) | ||||||||||||||||
| FDIC insurance expense | 9 | 10 | 10 | 8 | 8 | (1 | ) | — | 1 | 28 | |||||||||||||||||
| Advertising expense | 7 | 7 | 7 | 7 | 7 | — | — | — | — | ||||||||||||||||||
| Other real estate expense | 2 | — | 4 | 3 | 5 | 2 | N/M | (3 | ) | (65 | ) | ||||||||||||||||
| Other noninterest expenses | 46 | 55 | 60 | 53 | 57 | (9 | ) | (15 | ) | (11 | ) | (21 | ) | ||||||||||||||
| Total noninterest expenses | 449 | 433 | 448 | 479 | 463 | 16 | 4 | (14 | ) | (3 | ) | ||||||||||||||||
| Income before income taxes | 153 | 194 | 178 | 129 | 126 | (41 | ) | (21 | ) | 27 | 23 | ||||||||||||||||
| Provision for income taxes | 36 | 50 | 48 | 33 | 28 | (14 | ) | (27 | ) | 8 | 33 | ||||||||||||||||
| NET INCOME | 117 | 144 | 130 | 96 | 98 | (27 | ) | (18 | ) | 19 | 20 | ||||||||||||||||
| Less income allocated to participating securities | 1 | 2 | 1 | 1 | 1 | (1 | ) | (12 | ) | — | — | ||||||||||||||||
| Net income attributable to common shares | $ | 116 | $ | 142 | $ | 129 | $ | 95 | $ | 97 | $ | (26 | ) | (18 | )% | $ | 19 | 20 | % | ||||||||
| Earnings per common share: | |||||||||||||||||||||||||||
| Basic | $ | 0.61 | $ | 0.73 | $ | 0.66 | $ | 0.48 | $ | 0.51 | $ | (0.12 | ) | (16 | )% | $ | 0.10 | 20 | % | ||||||||
| Diluted | 0.61 | 0.73 | 0.66 | 0.48 | 0.51 | (0.12 | ) | (16 | ) | 0.10 | 20 | ||||||||||||||||
| Comprehensive income (loss) | 165 | 169 | 160 | (30 | ) | 176 | (4 | ) | (2 | ) | (11 | ) | (6 | ) | |||||||||||||
| Cash dividends declared on common stock | 29 | 29 | 20 | 20 | 20 | — | — | 9 | 45 | ||||||||||||||||||
| Cash dividends declared per common share | 0.15 | 0.15 | 0.10 | 0.10 | 0.10 | — | — | 0.05 | 50 | ||||||||||||||||||
N/M - Not Meaningful
14
| ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited) | ||||||||||||||||
| Comerica Incorporated and Subsidiaries | ||||||||||||||||
| 2012 | 2011 | |||||||||||||||
| (in millions) | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |||||||||||
| Balance at beginning of period | $ | 667 | $ | 704 | $ | 726 | $ | 767 | $ | 806 | ||||||
| Loan charge-offs: | ||||||||||||||||
| Commercial | 19 | 26 | 25 | 28 | 33 | |||||||||||
| Real estate construction: | ||||||||||||||||
| Commercial Real Estate business line (a) | 2 | 2 | 2 | 4 | 11 | |||||||||||
| Other business lines (b) | — | 1 | — | 1 | — | |||||||||||
| Total real estate construction | 2 | 3 | 2 | 5 | 11 | |||||||||||
| Commercial mortgage: | ||||||||||||||||
| Commercial Real Estate business line (a) | 12 | 16 | 13 | 17 | 12 | |||||||||||
| Other business lines (b) | 13 | 11 | 13 | 24 | 21 | |||||||||||
| Total commercial mortgage | 25 | 27 | 26 | 41 | 33 | |||||||||||
| International | 1 | — | 2 | 2 | — | |||||||||||
| Residential mortgage | 6 | 3 | 2 | 2 | 4 | |||||||||||
| Consumer | 6 | 5 | 5 | 7 | 9 | |||||||||||
| Total loan charge-offs | 59 | 64 | 62 | 85 | 90 | |||||||||||
| Recoveries on loans previously charged-off: | ||||||||||||||||
| Commercial | 7 | 10 | 9 | 11 | 5 | |||||||||||
| Real estate construction | 3 | 1 | 1 | 4 | 3 | |||||||||||
| Commercial mortgage | 5 | 4 | 3 | 9 | 3 | |||||||||||
| International | — | — | 1 | — | — | |||||||||||
| Residential mortgage | — | — | 1 | — | 1 | |||||||||||
| Consumer | 1 | 4 | 2 | 1 | 1 | |||||||||||
| Total recoveries | 16 | 19 | 17 | 25 | 13 | |||||||||||
| Net loan charge-offs | 43 | 45 | 45 | 60 | 77 | |||||||||||
| Provision for loan losses | 23 | 8 | 23 | 19 | 38 | |||||||||||
| Balance at end of period | $ | 647 | $ | 667 | $ | 704 | $ | 726 | $ | 767 | ||||||
| Allowance for loan losses as a percentage of total loans | 1.46 | % | 1.52 | % | 1.64 | % | 1.70 | % | 1.86 | % | ||||||
| Net loan charge-offs as a percentage of average total loans | 0.39 | 0.42 | 0.43 | 0.57 | 0.77 | |||||||||||
| (a) | Primarily charge-offs of loans to real estate investors and developers. |
| (b) | Primarily charge-offs of loans secured by owner-occupied real estate. |
| ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited) | ||||||||||||||||
| Comerica Incorporated and Subsidiaries | ||||||||||||||||
| 2012 | 2011 | |||||||||||||||
| (in millions) | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |||||||||||
| Balance at beginning of period | $ | 36 | $ | 25 | $ | 26 | $ | 27 | $ | 30 | ||||||
| Add: Provision for credit losses on lending-related commitments | (1 | ) | 11 | (1 | ) | (1 | ) | (3 | ) | |||||||
| Balance at end of period | $ | 35 | $ | 36 | $ | 25 | $ | 26 | $ | 27 | ||||||
| Unfunded lending-related commitments sold | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||
15
| NONPERFORMING ASSETS (unaudited) | ||||||||||||||||
| Comerica Incorporated and Subsidiaries | ||||||||||||||||
| 2012 | 2011 | |||||||||||||||
| (in millions) | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |||||||||||
| SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS | ||||||||||||||||
| Nonaccrual loans: | ||||||||||||||||
| Business loans: | ||||||||||||||||
| Commercial | $ | 154 | $ | 175 | $ | 205 | $ | 237 | $ | 258 | ||||||
| Real estate construction: | ||||||||||||||||
| Commercial Real Estate business line (a) | 45 | 60 | 77 | 93 | 109 | |||||||||||
| Other business lines (b) | 6 | 9 | 8 | 8 | 3 | |||||||||||
| Total real estate construction | 51 | 69 | 85 | 101 | 112 | |||||||||||
| Commercial mortgage: | ||||||||||||||||
| Commercial Real Estate business line (a) | 137 | 155 | 174 | 159 | 198 | |||||||||||
| Other business lines (b) | 219 | 220 | 275 | 268 | 275 | |||||||||||
| Total commercial mortgage | 356 | 375 | 449 | 427 | 473 | |||||||||||
| Lease financing | 3 | 4 | 4 | 5 | 5 | |||||||||||
| International | — | — | 4 | 8 | 7 | |||||||||||
| Total nonaccrual business loans | 564 | 623 | 747 | 778 | 855 | |||||||||||
| Retail loans: | ||||||||||||||||
| Residential mortgage | 69 | 76 | 69 | 71 | 65 | |||||||||||
| Consumer: | ||||||||||||||||
| Home equity | 28 | 16 | 9 | 5 | 4 | |||||||||||
| Other consumer | 4 | 4 | 5 | 6 | 5 | |||||||||||
| Total consumer | 32 | 20 | 14 | 11 | 9 | |||||||||||
| Total nonaccrual retail loans | 101 | 96 | 83 | 82 | 74 | |||||||||||
| Total nonaccrual loans | 665 | 719 | 830 | 860 | 929 | |||||||||||
| Reduced-rate loans | 27 | 28 | 26 | 27 | 29 | |||||||||||
| Total nonperforming loans (c) | 692 | 747 | 856 | 887 | 958 | |||||||||||
| Foreclosed property | 63 | 67 | 67 | 94 | 87 | |||||||||||
| Total nonperforming assets (c) | $ | 755 | $ | 814 | $ | 923 | $ | 981 | $ | 1,045 | ||||||
| Nonperforming loans as a percentage of total loans | 1.57 | % | 1.70 | % | 1.99 | % | 2.08 | % | 2.32 | % | ||||||
Nonperforming assets as a percentage of total loans and foreclosed property | 1.71 | 1.85 | 2.14 | 2.29 | 2.53 | |||||||||||
Allowance for loan losses as a percentage of total nonperforming loans | 94 | 89 | 82 | 82 | 80 | |||||||||||
| Loans past due 90 days or more and still accruing | $ | 36 | $ | 43 | $ | 50 | $ | 58 | $ | 81 | ||||||
| ANALYSIS OF NONACCRUAL LOANS | ||||||||||||||||
| Nonaccrual loans at beginning of period | $ | 719 | $ | 830 | $ | 860 | $ | 929 | $ | 941 | ||||||
| Loans transferred to nonaccrual (d) | 35 | 47 | 69 | 99 | 130 | |||||||||||
| Nonaccrual business loan gross charge-offs (e) | (46 | ) | (56 | ) | (55 | ) | (76 | ) | (76 | ) | ||||||
| Loans transferred to accrual status (d) | — | (41 | ) | — | — | (15 | ) | |||||||||
| Nonaccrual business loans sold (f) | (20 | ) | (16 | ) | (7 | ) | (19 | ) | (15 | ) | ||||||
| Payments/Other (g) | (23 | ) | (45 | ) | (37 | ) | (73 | ) | (36 | ) | ||||||
| Nonaccrual loans at end of period | $ | 665 | $ | 719 | $ | 830 | $ | 860 | $ | 929 | ||||||
| (a) Primarily loans to real estate investors and developers. | ||||||||||||||||
| (b) Primarily loans secured by owner-occupied real estate. | ||||||||||||||||
| (c) Excludes loans acquired with credit impairment. | ||||||||||||||||
| (d) Based on an analysis of nonaccrual loans with book balances greater than $2 million. | ||||||||||||||||
| (e) Analysis of gross loan charge-offs: | ||||||||||||||||
| Nonaccrual business loans | $ | 46 | $ | 56 | $ | 55 | $ | 76 | $ | 76 | ||||||
| Performing watch list loans | 1 | — | — | — | 1 | |||||||||||
| Consumer and residential mortgage loans | 12 | 8 | 7 | 9 | 13 | |||||||||||
| Total gross loan charge-offs | $ | 59 | $ | 64 | $ | 62 | $ | 85 | $ | 90 | ||||||
| (f) Analysis of loans sold: | ||||||||||||||||
| Nonaccrual business loans | $ | 20 | $ | 16 | $ | 7 | $ | 19 | $ | 15 | ||||||
| Performing watch list loans | 42 | 7 | 11 | — | 16 | |||||||||||
| Total loans sold | $ | 62 | $ | 23 | $ | 18 | $ | 19 | $ | 31 | ||||||
| (g) Includes net changes related to nonaccrual loans with balances less than $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed property. Excludes business loan gross charge-offs and business nonaccrual loans sold. | ||||||||||||||||
16
| ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited) | |||||||||||||||||
| Comerica Incorporated and Subsidiaries | |||||||||||||||||
| Nine Months Ended | |||||||||||||||||
| September 30, 2012 | September 30, 2011 | ||||||||||||||||
| Average | Average | Average | Average | ||||||||||||||
| (dollar amounts in millions) | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||
| Commercial loans | $ | 25,810 | $ | 673 | 3.48 | % | $ | 21,769 | $ | 604 | 3.70 | % | |||||
| Real estate construction loans | 1,420 | 47 | 4.48 | 1,918 | 59 | 4.12 | |||||||||||
| Commercial mortgage loans | 9,951 | 337 | 4.51 | 9,902 | 306 | 4.12 | |||||||||||
| Lease financing | 873 | 19 | 2.92 | 960 | 25 | 3.53 | |||||||||||
| International loans | 1,257 | 35 | 3.73 | 1,212 | 35 | 3.89 | |||||||||||
| Residential mortgage loans | 1,498 | 52 | 4.66 | 1,577 | 63 | 5.34 | |||||||||||
| Consumer loans | 2,225 | 57 | 3.44 | 2,272 | 59 | 3.47 | |||||||||||
| Total loans (a) | 43,034 | 1,220 | 3.79 | 39,610 | 1,151 | 3.88 | |||||||||||
| Auction-rate securities available-for-sale | 294 | 2 | 0.78 | 497 | 3 | 0.75 | |||||||||||
| Other investment securities available-for-sale | 9,509 | 178 | 2.57 | 7,131 | 168 | 3.20 | |||||||||||
| Total investment securities available-for-sale | 9,803 | 180 | 2.51 | 7,628 | 171 | 3.03 | |||||||||||
| Interest-bearing deposits with banks (b) | 3,909 | 8 | 0.26 | 3,557 | 7 | 0.24 | |||||||||||
| Other short-term investments | 138 | 1 | 1.80 | 128 | 2 | 2.14 | |||||||||||
| Total earning assets | 56,884 | 1,409 | 3.32 | 50,923 | 1,331 | 3.50 | |||||||||||
| Cash and due from banks | 967 | 908 | |||||||||||||||
| Allowance for loan losses | (707 | ) | (860 | ) | |||||||||||||
| Accrued income and other assets | 5,140 | 4,555 | |||||||||||||||
| Total assets | $ | 62,284 | $ | 55,526 | |||||||||||||
| Money market and interest-bearing checking deposits | $ | 20,583 | 26 | 0.18 | $ | 18,539 | 36 | 0.26 | |||||||||
| Savings deposits | 1,589 | 1 | 0.06 | 1,516 | 1 | 0.11 | |||||||||||
| Customer certificates of deposit | 5,993 | 25 | 0.54 | 5,666 | 30 | 0.70 | |||||||||||
| Foreign office and other time deposits | 373 | 2 | 0.64 | 428 | 2 | 0.50 | |||||||||||
| Total interest-bearing deposits | 28,538 | 54 | 0.25 | 26,149 | 69 | 0.35 | |||||||||||
| Short-term borrowings | 78 | — | 0.12 | 137 | — | 0.15 | |||||||||||
| Medium- and long-term debt | 4,846 | 49 | 1.36 | 5,702 | 50 | 1.17 | |||||||||||
| Total interest-bearing sources | 33,462 | 103 | 0.41 | 31,988 | 119 | 0.50 | |||||||||||
| Noninterest-bearing deposits | 20,415 | 16,259 | |||||||||||||||
| Accrued expenses and other liabilities | 1,411 | 1,129 | |||||||||||||||
| Total shareholders' equity | 6,996 | 6,150 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 62,284 | $ | 55,526 | |||||||||||||
| Net interest income/rate spread (FTE) | $ | 1,306 | 2.91 | $ | 1,212 | 3.00 | |||||||||||
| FTE adjustment | $ | 2 | $ | 3 | |||||||||||||
| Impact of net noninterest-bearing sources of funds | 0.17 | 0.19 | |||||||||||||||
| Net interest margin (as a percentage of average earning assets) (FTE) (a) (b) | 3.08 | % | 3.19 | % | |||||||||||||
(a) Accretion of the purchase discount on the acquired loan portfolio of $58 million and $27 million in the nine months ended September 30, 2012 and 2011, respectively, increased the net interest margin by 14 basis points and 7 basis points in the nine months ended September 30, 2012 and 2011, respectively.
(b) Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 20 basis points and 22 basis points in the nine months ended September 30, 2012 and 2011, respectively.
17
| ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited) | ||||||||||||||||||||||||||
| Comerica Incorporated and Subsidiaries | ||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||
| September 30, 2012 | June 30, 2012 | September 30, 2011 | ||||||||||||||||||||||||
| Average | Average | Average | Average | Average | Average | |||||||||||||||||||||
| (dollar amounts in millions) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||
| Commercial loans | $ | 26,700 | $ | 227 | 3.38 | % | $ | 25,983 | $ | 227 | 3.52 | % | $ | 22,127 | $ | 207 | 3.70 | % | ||||||||
| Real estate construction loans | 1,389 | 15 | 4.36 | 1,420 | 15 | 4.50 | 1,699 | 23 | 5.28 | |||||||||||||||||
| Commercial mortgage loans | 9,670 | 106 | 4.34 | 9,983 | 112 | 4.46 | 10,275 | 115 | 4.42 | |||||||||||||||||
| Lease financing | 852 | 4 | 2.04 | 869 | 7 | 3.28 | 936 | 8 | 3.46 | |||||||||||||||||
| International loans | 1,302 | 12 | 3.77 | 1,265 | 12 | 3.66 | 1,163 | 11 | 4.01 | |||||||||||||||||
| Residential mortgage loans | 1,488 | 17 | 4.67 | 1,487 | 17 | 4.53 | 1,606 | 21 | 5.30 | |||||||||||||||||
| Consumer loans | 2,196 | 19 | 3.44 | 2,221 | 18 | 3.37 | 2,292 | 20 | 3.56 | |||||||||||||||||
| Total loans (a) | 43,597 | 400 | 3.66 | 43,228 | 408 | 3.79 | 40,098 | 405 | 4.01 | |||||||||||||||||
| Auction-rate securities available-for-sale | 234 | 1 | 0.97 | 296 | — | 0.82 | 437 | 1 | 0.63 | |||||||||||||||||
| Other investment securities available-for-sale | 9,557 | 57 | 2.42 | 9,432 | 59 | 2.55 | 7,721 | 54 | 2.87 | |||||||||||||||||
| Total investment securities available-for-sale | 9,791 | 58 | 2.38 | 9,728 | 59 | 2.49 | 8,158 | 55 | 2.74 | |||||||||||||||||
| Interest-bearing deposits with banks (b) | 4,276 | 3 | 0.26 | 3,556 | 3 | 0.26 | 4,851 | 3 | 0.23 | |||||||||||||||||
| Other short-term investments | 137 | — | 1.88 | 141 | — | 1.55 | 136 | 1 | 2.30 | |||||||||||||||||
| Total earning assets | 57,801 | 461 | 3.19 | 56,653 | 470 | 3.35 | 53,243 | 464 | 3.47 | |||||||||||||||||
| Cash and due from banks | 971 | 931 | 969 | |||||||||||||||||||||||
| Allowance for loan losses | (673 | ) | (710 | ) | (814 | ) | ||||||||||||||||||||
| Accrued income and other assets | 5,177 | 5,076 | 4,840 | |||||||||||||||||||||||
| Total assets | $ | 63,276 | $ | 61,950 | $ | 58,238 | ||||||||||||||||||||
| Money market and interest-bearing checking deposits | $ | 20,495 | 8 | 0.17 | $ | 20,458 | 8 | 0.18 | $ | 19,595 | 13 | 0.25 | ||||||||||||||
| Savings deposits | 1,618 | — | 0.04 | 1,607 | 1 | 0.07 | 1,659 | — | 0.14 | |||||||||||||||||
| Customer certificates of deposit | 5,894 | 8 | 0.52 | 6,107 | 9 | 0.53 | 5,878 | 10 | 0.66 | |||||||||||||||||
| Foreign office and other time deposits | 381 | 1 | 0.71 | 379 | — | 0.64 | 455 | 1 | 0.49 | |||||||||||||||||
| Total interest-bearing deposits | 28,388 | 17 | 0.24 | 28,551 | 18 | 0.25 | 27,587 | 24 | 0.33 | |||||||||||||||||
| Short-term borrowings | 89 | — | 0.12 | 68 | — | 0.12 | 204 | — | 0.08 | |||||||||||||||||
| Medium- and long-term debt | 4,745 | 16 | 1.35 | 4,854 | 17 | 1.40 | 5,168 | 16 | 1.23 | |||||||||||||||||
| Total interest-bearing sources | 33,222 | 33 | 0.40 | 33,473 | 35 | 0.42 | 32,959 | 40 | 0.47 | |||||||||||||||||
| Noninterest-bearing deposits | 21,469 | 20,128 | 17,511 | |||||||||||||||||||||||
| Accrued expenses and other liabilities | 1,540 | 1,347 | 1,135 | |||||||||||||||||||||||
| Total shareholders' equity | 7,045 | 7,002 | 6,633 | |||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 63,276 | $ | 61,950 | $ | 58,238 | ||||||||||||||||||||
| Net interest income/rate spread (FTE) | $ | 428 | 2.79 | $ | 435 | 2.93 | $ | 424 | 3.00 | |||||||||||||||||
| FTE adjustment | $ | 1 | $ | — | $ | 1 | ||||||||||||||||||||
| Impact of net noninterest-bearing sources of funds | 0.17 | 0.17 | 0.18 | |||||||||||||||||||||||
| Net interest margin (as a percentage of average earning assets) (FTE) (a) (b) | 2.96 | % | 3.10 | % | 3.18 | % | ||||||||||||||||||||
(a) Accretion of the purchase discount on the acquired loan portfolio of $15 million, $18 million and $27 million in the third and second quarters of 2012 and the third quarter of 2011, respectively, increased the net interest margin by 10 basis points, 13 basis points and 20 basis points in the third and second quarters of 2012 and the third quarter of 2011, respectively.
(b) Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 21 basis points and by 18 basis points in the third and second quarters of 2012, respectively, and by 29 basis points in the third quarter of 2011.
18
| CONSOLIDATED STATISTICAL DATA (unaudited) | |||||||||||||||
| Comerica Incorporated and Subsidiaries | |||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||
| (in millions, except per share data) | 2012 | 2012 | 2012 | 2011 | 2011 | ||||||||||
| Commercial loans: | |||||||||||||||
| Floor plan | $ | 2,276 | $ | 2,406 | $ | 2,152 | $ | 1,822 | $ | 1,209 | |||||
| Other | 25,184 | 24,610 | 23,488 | 23,174 | 21,904 | ||||||||||
| Total commercial loans | 27,460 | 27,016 | 25,640 | 24,996 | 23,113 | ||||||||||
| Real estate construction loans: | |||||||||||||||
| Commercial Real Estate business line (a) | 1,003 | 991 | 1,055 | 1,103 | 1,226 | ||||||||||
| Other business lines (b) | 389 | 386 | 387 | 430 | 422 | ||||||||||
| Total real estate construction loans | 1,392 | 1,377 | 1,442 | 1,533 | 1,648 | ||||||||||
| Commercial mortgage loans: | |||||||||||||||
| Commercial Real Estate business line (a) | 2,020 | 2,315 | 2,501 | 2,507 | 2,602 | ||||||||||
| Other business lines (b) | 7,539 | 7,515 | 7,578 | 7,757 | 7,937 | ||||||||||
| Total commercial mortgage loans | 9,559 | 9,830 | 10,079 | 10,264 | 10,539 | ||||||||||
| Lease financing | 837 | 858 | 872 | 905 | 927 | ||||||||||
| International loans | 1,277 | 1,224 | 1,256 | 1,170 | 1,046 | ||||||||||
| Residential mortgage loans | 1,495 | 1,469 | 1,485 | 1,526 | 1,643 | ||||||||||
| Consumer loans: | |||||||||||||||
| Home equity | 1,570 | 1,584 | 1,612 | 1,655 | 1,683 | ||||||||||
| Other consumer | 604 | 634 | 626 | 630 | 626 | ||||||||||
| Total consumer loans | 2,174 | 2,218 | 2,238 | 2,285 | 2,309 | ||||||||||
| Total loans | $ | 44,194 | $ | 43,992 | $ | 43,012 | $ | 42,679 | $ | 41,225 | |||||
| Goodwill | $ | 635 | $ | 635 | $ | 635 | $ | 635 | $ | 635 | |||||
| Core deposit intangible | 23 | 25 | 27 | 29 | 32 | ||||||||||
| Loan servicing rights | 2 | 3 | 3 | 3 | 3 | ||||||||||
| Tier 1 common capital ratio (c) (d) | 10.32 | % | 10.38 | % | 10.27 | % | 10.37 | % | 10.57 | % | |||||
| Tier 1 risk-based capital ratio (d) | 10.32 | 10.38 | 10.27 | 10.41 | 10.65 | ||||||||||
| Total risk-based capital ratio (d) | 13.63 | 13.90 | 13.99 | 14.25 | 14.84 | ||||||||||
| Leverage ratio (d) | 10.71 | 10.92 | 10.94 | 10.92 | 11.41 | ||||||||||
| Tangible common equity ratio (c) | 10.25 | 10.27 | 10.21 | 10.27 | 10.43 | ||||||||||
| Common shareholders' equity per share of common stock | $ | 37.01 | $ | 36.18 | $ | 35.44 | $ | 34.80 | $ | 34.94 | |||||
| Tangible common equity per share of common stock (c) | 33.56 | 32.76 | 32.06 | 31.42 | 31.57 | ||||||||||
| Market value per share for the quarter: | |||||||||||||||
| High | 33.38 | 32.88 | 34.00 | 27.37 | 35.79 | ||||||||||
| Low | 29.32 | 27.88 | 26.25 | 21.53 | 21.48 | ||||||||||
| Close | 31.05 | 30.71 | 32.36 | 25.80 | 22.97 | ||||||||||
| Quarterly ratios: | |||||||||||||||
| Return on average common shareholders' equity | 6.67 | % | 8.22 | % | 7.50 | % | 5.51 | % | 5.91 | % | |||||
| Return on average assets | 0.74 | 0.93 | 0.84 | 0.63 | 0.67 | ||||||||||
| Efficiency ratio | 71.68 | 67.53 | 69.70 | 75.97 | 75.59 | ||||||||||
| Number of banking centers | 490 | 493 | 495 | 494 | 502 | ||||||||||
| Number of employees - full time equivalent | 9,008 | 9,014 | 9,195 | 9,397 | 9,701 | ||||||||||
| (a) | Primarily loans to real estate investors and developers. |
| (b) | Primarily loans secured by owner-occupied real estate. |
| (c) | See Reconciliation of Non-GAAP Financial Measures. |
| (d) | September 30, 2012 ratios are estimated. |
19
| PARENT COMPANY ONLY BALANCE SHEETS (unaudited) | |||||||||
| Comerica Incorporated | |||||||||
| September 30, | December 31, | September 30, | |||||||
| (in millions, except share data) | 2012 | 2011 | 2011 | ||||||
| ASSETS | |||||||||
| Cash and due from subsidiary bank | $ | 13 | $ | 7 | 3 | ||||
| Short-term investments with subsidiary bank | 418 | 411 | 440 | ||||||
| Other short-term investments | 88 | 90 | 86 | ||||||
| Investment in subsidiaries, principally banks | 7,200 | 7,011 | 7,098 | ||||||
| Premises and equipment | 4 | 4 | 3 | ||||||
| Other assets | 150 | 177 | 189 | ||||||
| Total assets | $ | 7,873 | $ | 7,700 | $ | 7,819 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| Medium- and long-term debt | $ | 632 | $ | 666 | $ | 722 | |||
| Other liabilities | 157 | 166 | 146 | ||||||
| Total liabilities | 789 | 832 | 868 | ||||||
| Common stock - $5 par value: | |||||||||
| Authorized - 325,000,000 shares | |||||||||
| Issued - 228,164,824 shares | 1,141 | 1,141 | 1,141 | ||||||
| Capital surplus | 2,153 | 2,170 | 2,162 | ||||||
| Accumulated other comprehensive loss | (253 | ) | (356 | ) | (230 | ) | |||
| Retained earnings | 5,831 | 5,546 | 5,471 | ||||||
| Less cost of common stock in treasury - 36,790,174 shares at 9/30/12, 30,831,076 shares at 12/31/11, and 29,238,425 shares at 9/30/11 | (1,788 | ) | (1,633 | ) | (1,593 | ) | |||
| Total shareholders' equity | 7,084 | 6,868 | 6,951 | ||||||
| Total liabilities and shareholders' equity | $ | 7,873 | $ | 7,700 | $ | 7,819 | |||
| CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) | ||||||||||||||||||||
| Comerica Incorporated and Subsidiaries | ||||||||||||||||||||
| Accumulated | ||||||||||||||||||||
| Common Stock | Other | Total | ||||||||||||||||||
| Shares | Capital | Comprehensive | Retained | Treasury | Shareholders' | |||||||||||||||
| (in millions, except per share data) | Outstanding | Amount | Surplus | Loss | Earnings | Stock | Equity | |||||||||||||
| BALANCE AT DECEMBER 31, 2010 | 176.5 | $ | 1,019 | $ | 1,481 | $ | (389 | ) | $ | 5,247 | $ | (1,565 | ) | $ | 5,793 | |||||
| Net income | — | — | — | — | 297 | — | 297 | |||||||||||||
| Other comprehensive income, net of tax | — | — | — | 159 | — | — | 159 | |||||||||||||
| Cash dividends declared on common stock ($0.30 per share) | — | — | — | — | (55 | ) | — | (55 | ) | |||||||||||
| Purchase of common stock | (2.7 | ) | — | — | — | — | (75 | ) | (75 | ) | ||||||||||
| Acquisition of Sterling Bancshares, Inc. | 24.3 | 122 | 681 | — | — | — | 803 | |||||||||||||
| Net issuance of common stock under employee stock plans | 0.8 | — | (29 | ) | — | (18 | ) | 47 | — | |||||||||||
| Share-based compensation | — | — | 29 | — | — | — | 29 | |||||||||||||
| BALANCE AT SEPTEMBER 30, 2011 | 198.9 | $ | 1,141 | $ | 2,162 | $ | (230 | ) | $ | 5,471 | $ | (1,593 | ) | $ | 6,951 | |||||
| BALANCE AT DECEMBER 31, 2011 | 197.3 | $ | 1,141 | $ | 2,170 | $ | (356 | ) | $ | 5,546 | $ | (1,633 | ) | $ | 6,868 | |||||
| Net income | — | — | — | — | 391 | — | 391 | |||||||||||||
| Other comprehensive income, net of tax | — | — | — | 103 | — | — | 103 | |||||||||||||
| Cash dividends declared on common stock ($0.40 per share) | — | — | — | — | (78 | ) | — | (78 | ) | |||||||||||
| Purchase of common stock | (7.1 | ) | — | — | — | — | (215 | ) | (215 | ) | ||||||||||
| Net issuance of common stock under employee stock plans | 1.2 | — | (48 | ) | — | (28 | ) | 62 | (14 | ) | ||||||||||
| Share-based compensation | — | — | 29 | — | — | — | 29 | |||||||||||||
| Other | — | — | 2 | — | — | (2 | ) | — | ||||||||||||
| BALANCE AT SEPTEMBER 30, 2012 | 191.4 | $ | 1,141 | $ | 2,153 | $ | (253 | ) | $ | 5,831 | $ | (1,788 | ) | $ | 7,084 | |||||
20
| BUSINESS SEGMENT FINANCIAL RESULTS (unaudited) | |||||||||||||||||||||||
| Comerica Incorporated and Subsidiaries | |||||||||||||||||||||||
| (dollar amounts in millions) | Business | Retail | Wealth | ||||||||||||||||||||
| Three Months Ended September 30, 2012 | Bank | Bank | Management | Finance | Other | Total | |||||||||||||||||
| Earnings summary: | |||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 386 | $ | 161 | $ | 47 | $ | (176 | ) | $ | 10 | $ | 428 | ||||||||||
| Provision for credit losses | 15 | 6 | 3 | — | (2 | ) | 22 | ||||||||||||||||
| Noninterest income | 76 | 41 | 62 | 14 | 4 | 197 | |||||||||||||||||
| Noninterest expenses | 144 | 181 | 78 | 3 | 43 | 449 | |||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 92 | 5 | 10 | (62 | ) | (8 | ) | 37 | |||||||||||||||
| Net income (loss) | $ | 211 | $ | 10 | $ | 18 | $ | (103 | ) | $ | (19 | ) | $ | 117 | |||||||||
| Net credit-related charge-offs | $ | 27 | $ | 13 | $ | 3 | — | — | $ | 43 | |||||||||||||
| Selected average balances: | |||||||||||||||||||||||
| Assets | $ | 34,863 | $ | 5,964 | $ | 4,566 | $ | 12,166 | $ | 5,717 | $ | 63,276 | |||||||||||
| Loans | 33,856 | 5,265 | 4,476 | — | — | 43,597 | |||||||||||||||||
| Deposits | 25,142 | 20,682 | 3,667 | 193 | 173 | 49,857 | |||||||||||||||||
| Statistical data: | |||||||||||||||||||||||
| Return on average assets (a) | 2.42 | % | 0.18 | % | 1.61 | % | N/M | N/M | 0.74 | % | |||||||||||||
| Efficiency ratio | 31.23 | 89.39 | 71.14 | N/M | N/M | 71.68 | |||||||||||||||||
| Business | Retail | Wealth | |||||||||||||||||||||
| Three Months Ended June 30, 2012 | Bank | Bank | Management | Finance | Other | Total | |||||||||||||||||
| Earnings summary: | |||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 385 | $ | 161 | $ | 46 | $ | (166 | ) | $ | 9 | $ | 435 | ||||||||||
| Provision for credit losses | 12 | 3 | 2 | — | 2 | 19 | |||||||||||||||||
| Noninterest income | 83 | 47 | 66 | 17 | (2 | ) | 211 | ||||||||||||||||
| Noninterest expenses | 151 | 177 | 79 | 2 | 24 | 433 | |||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 95 | 9 | 11 | (56 | ) | (9 | ) | 50 | |||||||||||||||
| Net income (loss) | $ | 210 | $ | 19 | $ | 20 | $ | (95 | ) | $ | (10 | ) | $ | 144 | |||||||||
| Net credit-related charge-offs | $ | 26 | $ | 9 | $ | 10 | — | — | $ | 45 | |||||||||||||
| Selected average balances: | |||||||||||||||||||||||
| Assets | $ | 34,376 | $ | 5,946 | $ | 4,604 | $ | 11,953 | $ | 5,071 | $ | 61,950 | |||||||||||
| Loans | 33,449 | 5,250 | 4,529 | — | — | 43,228 | |||||||||||||||||
| Deposits | 24,145 | 20,525 | 3,640 | 177 | 192 | 48,679 | |||||||||||||||||
| Statistical data: | |||||||||||||||||||||||
| Return on average assets (a) | 2.44 | % | 0.35 | % | 1.76 | % | N/M | N/M | 0.93 | % | |||||||||||||
| Efficiency ratio | 32.30 | 85.17 | 73.98 | N/M | N/M | 67.53 | |||||||||||||||||
| Business | Retail | Wealth | |||||||||||||||||||||
| Three Months Ended September 30, 2011 | Bank | Bank | Management | Finance | Other | Total | |||||||||||||||||
| Earnings summary: | |||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 363 | $ | 173 | $ | 45 | $ | (168 | ) | 11 | $ | 424 | |||||||||||
| Provision for credit losses | 18 | 16 | 7 | — | (6 | ) | 35 | ||||||||||||||||
| Noninterest income | 77 | 47 | 56 | 26 | (5 | ) | 201 | ||||||||||||||||
| Noninterest expenses | 164 | 175 | 77 | 3 | 44 | 463 | |||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 79 | 10 | 6 | (54 | ) | (12 | ) | 29 | |||||||||||||||
| Net income (loss) | $ | 179 | $ | 19 | $ | 11 | $ | (91 | ) | $ | (20 | ) | $ | 98 | |||||||||
| Net credit-related charge-offs | $ | 40 | $ | 28 | $ | 9 | — | — | $ | 77 | |||||||||||||
| Selected average balances: | |||||||||||||||||||||||
| Assets | $ | 30,608 | $ | 5,985 | $ | 4,674 | $ | 10,210 | $ | 6,761 | $ | 58,238 | |||||||||||
| Loans | 29,957 | 5,483 | 4,658 | — | — | 40,098 | |||||||||||||||||
| Deposits | 21,759 | 19,792 | 3,198 | 236 | 113 | 45,098 | |||||||||||||||||
| Statistical data: | |||||||||||||||||||||||
| Return on average assets (a) | 2.33 | % | 0.38 | % | 0.95 | % | N/M | N/M | 0.67 | % | |||||||||||||
| Efficiency ratio | 37.38 | 79.17 | 78.06 | N/M | N/M | 75.59 | |||||||||||||||||
| (a) | Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity. |
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
21
| MARKET SEGMENT FINANCIAL RESULTS (unaudited) | |||||||||||||||||||||||||||||||
| Comerica Incorporated and Subsidiaries | |||||||||||||||||||||||||||||||
| (dollar amounts in millions) | Other | Finance | |||||||||||||||||||||||||||||
| Three Months Ended September 30, 2012 | Midwest | Western | Texas | Florida | Markets | International | & Other | Total | |||||||||||||||||||||||
| Earnings summary: | |||||||||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 194 | $ | 181 | $ | 139 | $ | 10 | $ | 51 | $ | 19 | $ | (166 | ) | $ | 428 | ||||||||||||||
| Provision for credit losses | 2 | — | 10 | 5 | 6 | 1 | (2 | ) | 22 | ||||||||||||||||||||||
| Noninterest income | 95 | 34 | 30 | 3 | 7 | 10 | 18 | 197 | |||||||||||||||||||||||
| Noninterest expenses | 175 | 105 | 89 | 10 | 16 | 8 | 46 | 449 | |||||||||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 41 | 40 | 25 | (1 | ) | (5 | ) | 7 | (70 | ) | 37 | ||||||||||||||||||||
| Net income (loss) | $ | 71 | $ | 70 | $ | 45 | $ | (1 | ) | $ | 41 | $ | 13 | $ | (122 | ) | $ | 117 | |||||||||||||
| Net credit-related charge-offs | $ | 12 | $ | 10 | $ | 7 | $ | 9 | $ | 4 | 1 | — | $ | 43 | |||||||||||||||||
| Selected average balances: | |||||||||||||||||||||||||||||||
| Assets | $ | 13,784 | $ | 13,442 | $ | 10,327 | $ | 1,309 | $ | 4,621 | $ | 1,910 | $ | 17,883 | $ | 63,276 | |||||||||||||||
| Loans | 13,468 | 13,163 | 9,585 | 1,328 | 4,266 | 1,787 | — | 43,597 | |||||||||||||||||||||||
| Deposits | 19,628 | 15,192 | 9,941 | 512 | 2,823 | 1,395 | 366 | 49,857 | |||||||||||||||||||||||
| Statistical data: | |||||||||||||||||||||||||||||||
| Return on average assets (a) | 1.38 | % | 1.74 | % | 1.61 | % | (0.29 | )% | 3.54 | % | 2.65 | % | N/M | 0.74 | % | ||||||||||||||||
| Efficiency ratio | 60.40 | 48.63 | 52.50 | 76.90 | 27.38 | 28.28 | N/M | 71.68 | |||||||||||||||||||||||
| Other | Finance | ||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2012 | Midwest | Western | Texas | Florida | Markets | International | & Other | Total | |||||||||||||||||||||||
| Earnings summary: | |||||||||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 196 | $ | 177 | $ | 143 | $ | 11 | $ | 46 | $ | 19 | $ | (157 | ) | $ | 435 | ||||||||||||||
| Provision for credit losses | 1 | 1 | 7 | 11 | (4 | ) | 1 | 2 | 19 | ||||||||||||||||||||||
| Noninterest income | 96 | 37 | 31 | 4 | 19 | 9 | 15 | 211 | |||||||||||||||||||||||
| Noninterest expenses | 177 | 104 | 88 | 11 | 18 | 9 | 26 | 433 | |||||||||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 39 | 40 | 28 | (2 | ) | 4 | 6 | (65 | ) | 50 | |||||||||||||||||||||
| Net income (loss) | $ | 75 | $ | 69 | $ | 51 | $ | (5 | ) | $ | 47 | $ | 12 | $ | (105 | ) | $ | 144 | |||||||||||||
| Net credit-related charge-offs | $ | 10 | $ | 12 | $ | 4 | $ | 10 | $ | 9 | $ | — | — | $ | 45 | ||||||||||||||||
| Selected average balances: | |||||||||||||||||||||||||||||||
| Assets | $ | 14,028 | $ | 13,170 | $ | 10,270 | $ | 1,407 | $ | 4,183 | $ | 1,868 | $ | 17,024 | $ | 61,950 | |||||||||||||||
| Loans | 13,766 | 12,920 | 9,506 | 1,429 | 3,837 | 1,770 | — | 43,228 | |||||||||||||||||||||||
| Deposits | 19,227 | 14,371 | 10,185 | 446 | 2,728 | 1,353 | 369 | 48,679 | |||||||||||||||||||||||
| Statistical data: | |||||||||||||||||||||||||||||||
| Return on average assets (a) | 1.48 | % | 1.78 | % | 1.78 | % | (1.35 | )% | 4.53 | % | 2.54 | % | N/M | 0.93 | % | ||||||||||||||||
| Efficiency ratio | 60.51 | 48.44 | 50.96 | 77.45 | 30.43 | 29.78 | N/M | 67.53 | |||||||||||||||||||||||
| Other | Finance | ||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2011 | Midwest | Western | Texas | Florida | Markets | International | & Other | Total | |||||||||||||||||||||||
| Earnings summary: | |||||||||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 199 | $ | 166 | $ | 143 | $ | 11 | $ | 41 | $ | 21 | $ | (157 | ) | $ | 424 | ||||||||||||||
| Provision for credit losses | 20 | 13 | (8 | ) | 2 | 12 | 2 | (6 | ) | 35 | |||||||||||||||||||||
| Noninterest income | 96 | 32 | 29 | 4 | 10 | 9 | 21 | 201 | |||||||||||||||||||||||
| Noninterest expenses | 183 | 106 | 81 | 11 | 25 | 10 | 47 | 463 | |||||||||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 32 | 29 | 35 | 1 | (8 | ) | 6 | (66 | ) | 29 | |||||||||||||||||||||
| Net income (loss) | $ | 60 | $ | 50 | $ | 64 | $ | 1 | $ | 22 | $ | 12 | $ | (111 | ) | $ | 98 | ||||||||||||||
| Net credit-related charge-offs | $ | 33 | $ | 32 | $ | 2 | $ | 5 | $ | 5 | $ | — | — | $ | 77 | ||||||||||||||||
| Selected average balances: | |||||||||||||||||||||||||||||||
| Assets | $ | 14,118 | $ | 12,110 | $ | 8,510 | $ | 1,450 | $ | 3,374 | $ | 1,705 | $ | 16,971 | $ | 58,238 | |||||||||||||||
| Loans | 13,873 | 11,889 | 8,145 | 1,477 | 3,082 | 1,632 | — | 40,098 | |||||||||||||||||||||||
| Deposits | 18,510 | 12,975 | 8,865 | 404 | 2,392 | 1,603 | 349 | 45,098 | |||||||||||||||||||||||
| Statistical data: | |||||||||||||||||||||||||||||||
| Return on average assets (a) | 1.22 | % | 1.42 | % | 2.66 | % | 0.29 | % | 2.66 | % | 2.76 | % | N/M | 0.67 | % | ||||||||||||||||
| Efficiency ratio | 62.08 | 53.68 | 46.83 | 78.39 | 50.21 | 31.22 | N/M | 75.59 | |||||||||||||||||||||||
| (a) | Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity. |
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
22
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) | |||||||||||||||
| Comerica Incorporated and Subsidiaries | |||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||
| (dollar amounts in millions) | 2012 | 2012 | 2012 | 2011 | 2011 | ||||||||||
| Tier 1 Common Capital Ratio: | |||||||||||||||
| Tier 1 capital (a) (b) | $ | 6,685 | $ | 6,676 | $ | 6,647 | $ | 6,582 | $ | 6,560 | |||||
| Less: | |||||||||||||||
| Trust preferred securities | — | — | — | 25 | 49 | ||||||||||
| Tier 1 common capital (b) | $ | 6,685 | $ | 6,676 | $ | 6,647 | $ | 6,557 | $ | 6,511 | |||||
| Risk-weighted assets (a) (b) | $ | 64,772 | $ | 64,312 | $ | 64,742 | $ | 63,244 | $ | 61,593 | |||||
| Tier 1 risk-based capital ratio (b) | 10.32 | % | 10.38 | % | 10.27 | % | 10.41 | % | 10.65 | % | |||||
| Tier 1 common capital ratio (b) | 10.32 | 10.38 | 10.27 | 10.37 | 10.57 | ||||||||||
| Tangible Common Equity Ratio: | |||||||||||||||
| Common shareholders' equity | $ | 7,084 | $ | 7,028 | $ | 6,985 | $ | 6,868 | $ | 6,951 | |||||
| Less: | |||||||||||||||
| Goodwill | 635 | 635 | 635 | 635 | 635 | ||||||||||
| Other intangible assets | 25 | 28 | 30 | 32 | 35 | ||||||||||
| Tangible common equity | $ | 6,424 | $ | 6,365 | $ | 6,320 | $ | 6,201 | $ | 6,281 | |||||
| Total assets | $ | 63,314 | $ | 62,650 | $ | 62,593 | $ | 61,008 | $ | 60,888 | |||||
| Less: | |||||||||||||||
| Goodwill | 635 | 635 | 635 | 635 | 635 | ||||||||||
| Other intangible assets | 25 | 28 | 30 | 32 | 35 | ||||||||||
| Tangible assets | $ | 62,654 | $ | 61,987 | $ | 61,928 | $ | 60,341 | $ | 60,218 | |||||
| Common equity ratio | 11.19 | % | 11.22 | % | 11.16 | % | 11.26 | % | 11.42 | % | |||||
| Tangible common equity ratio | 10.25 | 10.27 | 10.21 | 10.27 | 10.43 | ||||||||||
| Tangible Common Equity per Share of Common Stock: | |||||||||||||||
| Common shareholders' equity | $ | 7,084 | $ | 7,028 | $ | 6,985 | $ | 6,868 | $ | 6,951 | |||||
| Tangible common equity | 6,424 | 6,365 | 6,320 | 6,201 | 6,281 | ||||||||||
| Shares of common stock outstanding (in millions) | 191 | 194 | 197 | 197 | 199 | ||||||||||
| Common shareholders' equity per share of common stock | $ | 37.01 | $ | 36.18 | $ | 35.44 | $ | 34.80 | $ | 34.94 | |||||
| Tangible common equity per share of common stock | 33.56 | 32.76 | 32.06 | 31.42 | 31.57 | ||||||||||
(a) Tier 1 capital and risk-weighted assets as defined by regulation.
(b) September 30, 2012 Tier 1 capital and risk-weighted assets are estimated.
The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations. The tangible common equity ratio removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets. Tangible common equity per share of common stock removes the effect of intangible assets from common shareholders equity per share of common stock. Comerica believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.
23