COMERICA REPORTS SECOND QUARTER 2017 NET INCOME OF $203 MILLION, OR $1.13 PER SHARE ($1.15 ADJUSTED)
Compared to First Quarter 2017, Earnings Per Share Increased 2 Percent and
Adjusted Earnings Per Share Increased 13 Percent1
Total Revenue Increased $35 Million, or 5 Percent, Compared to First Quarter 2017
Solid Second Quarter 2017 Average Loan Growth of $823 Million, or 2 Percent
Efficiency Ratio Improved to Below 59 Percent
DALLAS/July 18, 2017 -- Comerica Incorporated (NYSE: CMA) today reported second quarter 2017 net income of $203 million, compared to $202 million for the first quarter 2017 and $104 million for the second quarter 2016. Earnings per diluted share were $1.13 for second quarter 2017 compared to $1.11 for first quarter 2017 and 58 cents for second quarter 2016. Excluding restructuring charges and tax benefits from employee stock transactions, adjusted earnings per diluted share was $1.15 for second quarter 2017 compared to $1.02 for first quarter 2017 and 77 cents for second quarter 2016.
|
| | | | | | | | | | | |
| (dollar amounts in millions, except per share data) | 2nd Qtr '17 | 1st Qtr '17 | 2nd Qtr '16 |
| Net interest income | $ | 500 |
| | $ | 470 |
| | $ | 445 |
|
| Provision for credit losses | 17 |
| | 16 |
| | 49 |
|
| Noninterest income | 276 |
| | 271 |
| | 268 |
|
| Noninterest expenses (a) | 457 |
| | 457 |
| | 518 |
|
| Pre-tax income | 302 |
| | 268 |
| | 146 |
|
| Provision for income taxes | 99 |
| (b) | 66 |
| (b) | 42 |
|
| Net income | $ | 203 |
| | $ | 202 |
| | $ | 104 |
|
| | | | | | |
| Net income attributable to common shares | $ | 202 |
| | $ | 200 |
| | $ | 103 |
|
| | | | | | |
| Diluted income per common share | 1.13 |
| | 1.11 |
| | 0.58 |
|
| | | | | | |
| Average diluted shares (in millions) | 179 |
| | 180 |
| | 177 |
|
| | | | | | |
| Return on average assets (ROA) | 1.14 | % | | 1.14 | % | | 0.59 | % |
| Return on average common shareholders' equity (ROE) | 10.28 |
| | 10.42 |
| | 5.47 |
|
| Net interest margin | 3.03 |
| | 2.86 |
| | 2.74 |
|
| Efficiency ratio (c) | 58.63 |
| | 61.63 |
| | 72.43 |
|
| | | | | | |
| Common equity Tier 1 capital ratio (d) | 11.51 |
| | 11.55 |
| | 10.49 |
|
| Common equity ratio | 11.18 |
| | 10.87 |
| | 10.79 |
|
| Tangible common equity ratio (e) | 10.37 |
| | 10.07 |
| | 9.98 |
|
| |
| (a) | Included restructuring charge of $14 million (5 cents per share, after tax) in the second quarter 2017, $11 million (4 cents per share, after tax) in the first quarter 2017 and $53 million (19 cents per share, after tax) in the second quarter 2016. |
| |
| (b) | Included tax benefits of $5 million (3 cents per share) and $24 million (13 cents per share) from employee stock transactions for the second and first quarter 2017, respectively. |
| |
| (c) | Noninterest expenses as a percentage of the sum of net interest income (FTE) and noninterest income excluding net securities gains (losses). |
| |
| (d) | June 30, 2017 ratio is estimated. |
| |
| (e) | See Reconciliation of Non-GAAP Financial Measures. |
1 Adjusted earnings per share represent earnings per diluted share excluding the impact of restructuring charges and tax benefits from
employee stock transactions. See Reconciliation of Non-GAAP Financial Measures.
COMERICA REPORTS SECOND QUARTER 2017 NET INCOME OF $203 MILLION - 2
“Quarter over quarter, our revenue increased 5 percent as we benefited meaningfully from increased interest rates as well as our relationship banking strategy, which is driving loan and fee growth," said Ralph W. Babb, Jr., chairman and chief executive officer. "In addition, credit quality continued to be strong. We remain focused on carefully managing expenses and are committed to fully delivering on the Growth in Efficiency and Revenue ("GEAR Up") initiatives. Relative to the first quarter, our earnings per share increased 2 percent, and increased 95 percent compared to the second quarter of last year. On an adjusted basis, earnings per share increased 13 percent over the first quarter and 49 percent from the second quarter 2016. This helped drive a double-digit ROE, an efficiency ratio below 59 percent and a 1.14 percent ROA for the quarter. Finally, we recently announced our 2017 capital plan, whereby we will continue to return excess capital to our shareholders with a 15 percent increase in our dividend, subject to board approval, and a nearly 40 percent increase in our share buyback relative to our 2016 plan. We believe we are well positioned for the future to further increase shareholder value."
Second Quarter 2017 Compared to First Quarter 2017
Average total loans increased $823 million to $48.7 billion.
| |
| • | Primarily reflected seasonal increases in Mortgage Banker Finance and National Dealer Services as well as growth in general Middle Market, partially offset by a decrease in Energy. |
Average total deposits decreased $651 million to $57.1 billion.
| |
| • | Driven by a $933 million decrease in interest-bearing deposits, partially offset by a $282 million increase in noninterest-bearing deposits. |
| |
| • | Average total deposits reflected decreases in general Middle Market, primarily driven by a seasonal decrease in Municipalities, and Energy, partially offset by an increase in Commercial Real Estate and a seasonal increase in Retail Bank. |
Net interest income increased $30 million to $500 million.
| |
| • | Net interest margin increased 17 basis points to 3.03 percent. |
| |
| • | Primarily due to a net benefit from higher short-term rates and an increase in average loans. |
Provision for credit losses increased $1 million to $17 million.
| |
| • | Net credit-related charge-offs were $18 million, or 0.15 percent of average loans. Energy net credit-related charge-offs were $2 million. |
| |
| • | Total criticized loans declined $144 million, including a $102 million decline in criticized Energy loans. |
| |
| • | The allowance for loan losses was $705 million, or 1.43 percent of total loans. The reserve allocation for Energy was approximately 6 percent of loans in the Energy business line. |
Noninterest income increased $5 million to $276 million.
| |
| • | Primarily reflected increases of $3 million in card fees, $2 million in commercial lending fees and $2 million in fiduciary income, partially offset by a $2 million net security loss. The increase in commercial lending fees resulted primarily from higher syndication agent fees. |
Noninterest expenses were unchanged at $457 million.
| |
| • | Restructuring charges increased $3 million to $14 million. |
| |
| • | Excluding restructuring charges, noninterest expenses decreased $3 million, primarily due to a decrease of $14 million in salaries and benefits expense, partially offset by an increase of $3 million in advertising expense from a seasonally low first quarter, increases of $3 million in operational losses and $2 million in software expense, as well as a $2 million favorable litigation-related settlement in first quarter 2017. |
| |
| • | The decreases in salaries and benefits expense primarily reflected seasonal decreases in share-based compensation and payroll taxes, partially offset by the impact of merit increases and one additional day in the quarter. |
Provision for income taxes increased $33 million to $99 million.
| |
| • | Primarily due to a $19 million decrease in tax benefits from employee stock transactions and the tax impact from the $34 million increase in pretax earnings. |
COMERICA REPORTS SECOND QUARTER 2017 NET INCOME OF $203 MILLION - 3
Capital position remained solid at June 30, 2017.
| |
| • | Returned a total of $185 million to shareholders, including dividends and the repurchase of $139 million of common stock (2.0 million shares) under the equity repurchase program. |
| |
| • | Dividend increased 13 percent to 26 cents per share. |
| |
| • | As announced on June 28, 2017, the Federal Reserve did not object to Comerica's 2017 capital plan, which includes equity repurchases up to $605 million for the four-quarter period ending in the second quarter 2018. The timing and ultimate amount of equity repurchases will be subject to various factors, including the Company's financial performance and market conditions. In addition, at its meeting on July 25, 2017, Comerica's board of directors will consider increasing the quarterly dividend to 30 cents per share. |
Second Quarter 2017 Compared to Second Quarter 2016
Average total loans decreased $746 million.
| |
| • | Excluding a $906 million decline in Energy, average loans increased $160 million, primarily reflecting an increase in National Dealer Services, partially offset by a decrease in Mortgage Banker Finance. |
Average total deposits increased $607 million.
| |
| • | Reflected an increase of $2.4 billion in noninterest-bearing deposits, partially offset by a decrease of $1.8 billion in interest-bearing deposits. |
| |
| • | Average total deposits primarily reflected increases in Commercial Real Estate and Retail Bank, partially offset by a decrease in Technology and Life Sciences. |
Net interest income increased $55 million.
| |
| • | Primarily due to increases in short-term rates and Federal Reserve Bank deposits, partially offset by a decrease in average loans. |
Provision for credit losses decreased $32 million.
| |
| • | Primarily reflected a decrease in Energy primarily due to a $783 million decline in criticized Energy loans and a $30 million decrease in net loan charge-offs. |
Noninterest income increased $8 million.
| |
| • | Excluding a $3 million decrease in deferred compensation asset returns, noninterest income increased $11 million, primarily reflecting increases of $4 million in card fees, $3 million in warrant income and $2 million in service charges on deposit accounts. |
Noninterest expenses decreased $61 million.
| |
| • | Excluding restructuring charges and deferred compensation expense, noninterest expenses decreased $19 million. This primarily reflected decreases of $25 million in salaries and benefits, largely driven by the GEAR Up initiative, $3 million in equipment expense, and smaller decreases in other noninterest expense categories, partially offset by an $8 million gain from the sale of leased assets in the second quarter of 2016, increases of $5 million in outside processing fees tied to revenue-generating activities and $2 million in operational losses. |
COMERICA REPORTS SECOND QUARTER 2017 NET INCOME OF $203 MILLION - 4
Net Interest Income
|
| | | | | | | | | | | |
| (dollar amounts in millions) | 2nd Qtr '17 | | 1st Qtr '17 | | 2nd Qtr '16 |
| Net interest income | $ | 500 |
| | $ | 470 |
| | $ | 445 |
|
| | | | | | |
| Net interest margin | 3.03 | % | | 2.86 | % | | 2.74 | % |
| | | | | | |
| Selected average balances: | | | | | |
| Total earning assets | $ | 66,310 |
| | $ | 66,648 |
| | $ | 65,597 |
|
| Total loans | 48,723 |
| | 47,900 |
| | 49,469 |
|
| Total investment securities | 12,232 |
| | 12,198 |
| | 12,334 |
|
| Federal Reserve Bank deposits | 5,043 |
| | 6,249 |
| | 3,495 |
|
| | | | | | |
| | | | | | |
| Total deposits | 57,128 |
| | 57,779 |
| | 56,521 |
|
| Total noninterest-bearing deposits | 30,741 |
| | 30,459 |
| | 28,376 |
|
| Medium- and long-term debt | 5,161 |
| | 5,157 |
| | 5,072 |
|
Net interest income increased $30 million to $500 million in the second quarter 2017, compared to the first quarter 2017.
| |
| • | Interest on loans increased $32 million, reflecting higher loan yields (+$22 million), the impact of an increase in average loan balances (+$8 million), one additional day in the quarter (+$4 million) and other portfolio dynamics (+$2 million), partially offset by residual value adjustments to the leasing portfolio (-$4 million). |
| |
| • | Interest on short-term investments increased $1 million due to increases in the Federal Funds rate (+4 million), partially offset by a decrease in average Federal Reserve Bank deposit balances (-$3 million). |
| |
| • | Interest expense on debt increased $3 million primarily due to higher costs on variable rate debt tied to LIBOR. |
The net interest margin of 3.03 percent increased 17 basis points compared to the first quarter 2017, due to higher loan yields (+13 basis points) and the impact from Federal Reserve Bank deposits (+6 basis points), partially offset by higher debt expense (-2 basis points).
Credit Quality
“Overall credit quality continued to be strong,” said Babb. “Criticized and nonaccrual loans, which were already at low levels, declined further, and net charge-offs were only 15 basis points. This, combined with our second quarter loan growth, drove a 4 basis point decline in the allowance for loan losses to 1.43 percent of total loans. The total reserve remained stable, resulting in a provision of $17 million."
"Energy loans at quarter-end remained at about 4 percent of our total loans," continued Babb. "The recent decline in energy prices is not expected to have a significant impact on our Energy portfolio as, overall, our customers have lowered operating costs, reduced leverage and are appropriately hedged. Criticized and nonaccrual loans as well as net charge-offs in the Energy line of business decreased again in the second quarter. This resulted in a decline in the reserve allocation to about 6 percent. The portfolio continues to perform well under the stress tests we have conducted.”
COMERICA REPORTS SECOND QUARTER 2017 NET INCOME OF $203 MILLION - 5
|
| | | | | | | | | | | |
| (dollar amounts in millions) | 2nd Qtr '17 | | 1st Qtr '17 | | 2nd Qtr '16 |
| Credit-related charge-offs | $ | 39 |
| | $ | 44 |
| | $ | 59 |
|
| Recoveries | 21 |
| | 11 |
| | 12 |
|
| Net credit-related charge-offs | 18 |
| | 33 |
| | 47 |
|
| Net credit-related charge-offs/Average total loans | 0.15 | % | | 0.28 | % | | 0.38 | % |
| | | | | | |
| Provision for credit losses | $ | 17 |
| | $ | 16 |
| | $ | 49 |
|
| | | | | | |
| Nonperforming loans | 501 |
| | 529 |
| | 613 |
|
| Nonperforming assets (NPAs) | 519 |
| | 545 |
| | 635 |
|
| NPAs/Total loans and foreclosed property | 1.05 | % | | 1.13 | % | | 1.26 | % |
| | | | | | |
| Loans past due 90 days or more and still accruing | $ | 30 |
| | $ | 26 |
| | $ | 35 |
|
| | | | | | |
| Allowance for loan losses | 705 |
| | 708 |
| | 729 |
|
| Allowance for credit losses on lending-related commitments (a) | 48 |
| | 46 |
| | 43 |
|
| Total allowance for credit losses | 753 |
| | 754 |
| | 772 |
|
| | | | | | |
| Allowance for loan losses/Period-end total loans | 1.43 | % | | 1.47 | % | | 1.45 | % |
| Allowance for loan losses/Nonperforming loans | 141 |
| | 134 |
| | 119 |
|
| |
| (a) | Included in "Accrued expenses and other liabilities" on the consolidated balance sheets. |
| |
| • | Energy business line loans were $2.0 billion, 4 percent of total loans, at June 30, 2017. |
| |
| ◦ | Criticized Energy loans decreased $102 million, to $769 million. |
| |
| ◦ | Energy net charge-offs were $2 million, compared to $13 million in the first quarter 2017. |
| |
| ◦ | The Energy reserve allocation was approximately 6 percent of Energy outstandings at June 30, 2017. |
| |
| • | Net charge-offs decreased $15 million to $18 million, or 0.15 percent of average loans, in the second quarter 2017, compared to $33 million, or 0.28 percent, in the first quarter 2017. |
| |
| • | Criticized loans decreased $144 million to $2.5 billion at June 30, 2017, compared to $2.6 billion at March 31, 2017. Criticized loans are generally consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities. |
COMERICA REPORTS SECOND QUARTER 2017 NET INCOME OF $203 MILLION - 6
Full-Year 2017 Outlook
Management expectations for 2017, compared to 2016, assuming a continuation of the current economic and low rate environment as well as contributions from the GEAR Up initiative of $30 million in revenue and $125 million in expense savings, are as follows:
| |
| • | Growth in average loans of 1 percent. Excluding Mortgage Banker Finance and Energy, loan growth of 3 percent, reflecting increases in the remaining lines of business. |
| |
| • | Net interest income higher, reflecting the benefits from the rate increases in December 2016 ($85 million; no deposit beta), March 2017 ($65 million; no deposit beta) and June 2017 (more than $30 million for the remainder of 2017; 25 percent deposit beta), as well as loan growth and debt maturities. |
| |
| • | Provision for credit losses lower, with continued solid performance of the overall portfolio. |
| |
| ◦ | Provision of 20-25 basis points and net charge-offs to remain low (full-year 2017). |
| |
| • | Noninterest income higher, with the execution of GEAR Up opportunities of $30 million, modest growth in treasury management and card fees, as well as wealth management products such as fiduciary and brokerage services. |
| |
| ◦ | Increase of 4-6 percent. |
| |
| • | Noninterest expenses lower, reflecting lower restructuring charges and an additional $125 million in GEAR Up savings, relative to 2016 GEAR Up savings of more than $25 million. The gains of $13 million in 2016 from early terminations of certain leveraged lease transactions are not expected to repeat. Noninterest expenses in the second half of 2017 will be impacted by items tied to revenue growth, such as advertising, incentive compensation and outside processing expenses; three additional days; seasonal and inflationary pressure leading to higher occupancy and benefits expenses; and, as expected, higher technology expenditures in cybersecurity, product innovation and to upgrade infrastructure to drive efficiencies. |
| |
| ◦ | Restructuring charges of $40 to $50 million, compared to $93 million in 2016. |
| |
| ◦ | Remaining noninterest expenses to decline about 1 percent. |
| |
| ◦ | Decrease of about 4 percent including restructuring charges. |
| |
| • | Income tax expense to approximate 31 percent of pre-tax income, reflecting 33 percent for the remaining quarters assuming no further tax impact from employee stock transactions. |
COMERICA REPORTS SECOND QUARTER 2017 NET INCOME OF $203 MILLION - 7
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. 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. For a summary of business segment and geographic market quarterly results, see the Business Segment Financial Results and Market Segment Financial Results tables included later in this report. The financial results provided are based on the internal business unit and geographic market structures of Comerica and methodologies in effect at June 30, 2017. A discussion of business segment and geographic market year-to-date results will be included in Comerica's Second Quarter 2017 Form 10-Q.
Conference Call and Webcast
Comerica will host a conference call to review second quarter 2017 financial results at 7 a.m. CT Tuesday, July 18, 2017. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 12423001). The call and supplemental financial information can also be accessed via Comerica's "Investor Relations" page at www.comerica.com. A replay of the Webcast can 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.
COMERICA REPORTS SECOND QUARTER 2017 NET INCOME OF $203 MILLION - 8
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 track,” “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, including the GEAR Up initiative, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries as well as estimates of the economic benefits of the GEAR Up initiative, 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; whether Comerica may achieve opportunities for revenue enhancements and efficiency improvements under the GEAR Up initiative, or changes in the scope or assumptions underlying the GEAR Up initiative; Comerica's ability to maintain adequate sources of funding and liquidity; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers, in particular the energy industry; unfavorable developments concerning credit quality; operational difficulties, failure of technology infrastructure or information security incidents; changes in regulation or oversight; reliance on other companies to provide certain key components of business infrastructure; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; reductions in Comerica's credit rating; the interdependence of financial service companies; the implementation of Comerica's strategies and business initiatives; damage to Comerica's reputation; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; 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, droughts and floods; potential legislative, administrative or judicial changes or interpretations related to the tax treatment of corporations; changes in accounting standards and the critical nature of Comerica's accounting policies. Comerica cautions that the foregoing list of factors is not all-inclusive. 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, 2016. 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: |
| Yolanda Y. Walker | Darlene P. Persons |
| (214) 462-4443 | (214) 462-6831 |
| | |
| | Chelsea R. Smith |
| | (214) 462-6834 |
|
| | | | | | | | | | | | | | | | |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) | | | |
| Comerica Incorporated and Subsidiaries | | | | | | |
| | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30, | March 31, | June 30, | | June 30, |
| (in millions, except per share data) | 2017 | 2017 | 2016 | | 2017 | 2016 |
| PER COMMON SHARE AND COMMON STOCK DATA | | | | | | |
| Diluted net income | $ | 1.13 |
| $ | 1.11 |
| $ | 0.58 |
| | $ | 2.24 |
| $ | 0.92 |
|
| Cash dividends declared | 0.26 |
| 0.23 |
| 0.22 |
| | 0.49 |
| 0.43 |
|
| | | | | | | |
| Average diluted shares (in thousands) | 178,923 |
| 180,353 |
| 177,195 |
| | 179,652 |
| 176,614 |
|
| KEY RATIOS | | | | | | |
| Return on average common shareholders' equity | 10.28 | % | 10.42 | % | 5.47 | % | | 10.35 | % | 4.31 | % |
| Return on average assets | 1.14 |
| 1.14 |
| 0.59 |
| | 1.14 |
| 0.47 |
|
| Common equity tier 1 and tier 1 risk-based capital ratio (a) | 11.51 |
| 11.55 |
| 10.49 |
| | | |
| Total risk-based capital ratio (a) | 13.66 |
| 13.72 |
| 12.74 |
| | | |
| Leverage ratio (a) | 10.80 |
| 10.67 |
| 10.39 |
| | | |
| Common equity ratio | 11.18 |
| 10.87 |
| 10.79 |
| | | |
| Tangible common equity ratio (b) | 10.37 |
| 10.07 |
| 9.98 |
| | | |
| AVERAGE BALANCES | | | | | | |
| Commercial loans | $ | 30,632 |
| $ | 29,694 |
| $ | 31,511 |
| | $ | 30,166 |
| $ | 31,162 |
|
| Real estate construction loans | 2,910 |
| 2,958 |
| 2,429 |
| | 2,934 |
| 2,272 |
|
| Commercial mortgage loans | 9,012 |
| 8,977 |
| 9,033 |
| | 8,994 |
| 8,997 |
|
| Lease financing | 526 |
| 570 |
| 730 |
| | 548 |
| 728 |
|
| International loans | 1,139 |
| 1,210 |
| 1,396 |
| | 1,174 |
| 1,408 |
|
| Residential mortgage loans | 1,975 |
| 1,963 |
| 1,880 |
| | 1,969 |
| 1,886 |
|
| Consumer loans | 2,529 |
| 2,528 |
| 2,490 |
| | 2,528 |
| 2,478 |
|
| Total loans | 48,723 |
| 47,900 |
| 49,469 |
| | 48,313 |
| 48,931 |
|
| | | | | | | |
| Earning assets | 66,310 |
| 66,648 |
| 65,597 |
| | 66,477 |
| 64,860 |
|
| Total assets | 71,318 |
| 71,819 |
| 70,668 |
| | 71,567 |
| 69,948 |
|
| | | | | | | |
| Noninterest-bearing deposits | 30,741 |
| 30,459 |
| 28,376 |
| | 30,601 |
| 28,214 |
|
| Interest-bearing deposits | 26,387 |
| 27,320 |
| 28,145 |
| | 26,851 |
| 28,401 |
|
| Total deposits | 57,128 |
| 57,779 |
| 56,521 |
| | 57,452 |
| 56,615 |
|
| | | | | | | |
| Common shareholders' equity | 7,933 |
| 7,865 |
| 7,654 |
| | 7,899 |
| 7,643 |
|
| NET INTEREST INCOME | | | | | | |
| Net interest income | $ | 500 |
| $ | 470 |
| $ | 445 |
| | $ | 970 |
| $ | 892 |
|
| Net interest margin (fully taxable equivalent) | 3.03 | % | 2.86 | % | 2.74 | % | | 2.95 | % | 2.78 | % |
| CREDIT QUALITY | | | | | | |
| Total nonperforming assets | $ | 519 |
| $ | 545 |
| $ | 635 |
| | | |
| | | | | | | |
| Loans past due 90 days or more and still accruing | 30 |
| 26 |
| 35 |
| | | |
| | | | | | | |
| Net credit-related charge-offs | 18 |
| 33 |
| 47 |
| | $ | 51 |
| $ | 105 |
|
| | | | | | | |
| Allowance for loan losses | 705 |
| 708 |
| 729 |
| | | |
| Allowance for credit losses on lending-related commitments | 48 |
| 46 |
| 43 |
| | | |
| Total allowance for credit losses | 753 |
| 754 |
| 772 |
| | | |
| | | | | | | |
| Allowance for loan losses as a percentage of total loans | 1.43 | % | 1.47 | % | 1.45 | % | | | |
| Net credit-related charge-offs as a percentage of average total loans | 0.15 |
| 0.28 |
| 0.38 |
| | 0.21 | % | 0.43 | % |
| Nonperforming assets as a percentage of total loans and foreclosed property | 1.05 |
| 1.13 |
| 1.26 |
| | | |
| Allowance for loan losses as a percentage of total nonperforming loans | 141 |
| 134 |
| 119 |
| | | |
| |
| (a) | June 30, 2017 ratios are estimated. |
| |
| (b) | See Reconciliation of Non-GAAP Financial Measures. |
|
| | | | | | | | | | | | |
| CONSOLIDATED BALANCE SHEETS |
| Comerica Incorporated and Subsidiaries | | | | |
| | | | | |
| | June 30, | March 31, | December 31, | June 30, |
| (in millions, except share data) | 2017 | 2017 | 2016 | 2016 |
| | (unaudited) | (unaudited) | | (unaudited) |
| ASSETS | | | | |
| Cash and due from banks | $ | 1,372 |
| $ | 1,176 |
| $ | 1,249 |
| $ | 1,172 |
|
| | | | | |
| Interest-bearing deposits with banks | 4,259 |
| 7,143 |
| 5,969 |
| 2,938 |
|
| Other short-term investments | 90 |
| 92 |
| 92 |
| 100 |
|
| | | | | |
| Investment securities available-for-sale | 10,944 |
| 10,830 |
| 10,787 |
| 10,712 |
|
| Investment securities held-to-maturity | 1,430 |
| 1,508 |
| 1,582 |
| 1,807 |
|
| | | | | |
| Commercial loans | 31,449 |
| 30,215 |
| 30,994 |
| 32,360 |
|
| Real estate construction loans | 2,857 |
| 2,930 |
| 2,869 |
| 2,553 |
|
| Commercial mortgage loans | 8,974 |
| 9,021 |
| 8,931 |
| 9,038 |
|
| Lease financing | 472 |
| 550 |
| 572 |
| 684 |
|
| International loans | 1,145 |
| 1,106 |
| 1,258 |
| 1,365 |
|
| Residential mortgage loans | 1,976 |
| 1,944 |
| 1,942 |
| 1,856 |
|
| Consumer loans | 2,535 |
| 2,537 |
| 2,522 |
| 2,524 |
|
| Total loans | 49,408 |
| 48,303 |
| 49,088 |
| 50,380 |
|
| Less allowance for loan losses | (705 | ) | (708 | ) | (730 | ) | (729 | ) |
| Net loans | 48,703 |
| 47,595 |
| 48,358 |
| 49,651 |
|
| | | | | |
| Premises and equipment | 484 |
| 488 |
| 501 |
| 544 |
|
| Accrued income and other assets | 4,165 |
| 4,144 |
| 4,440 |
| 4,356 |
|
| Total assets | $ | 71,447 |
| $ | 72,976 |
| $ | 72,978 |
| $ | 71,280 |
|
| | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | |
| Noninterest-bearing deposits | $ | 31,210 |
| $ | 31,892 |
| $ | 31,540 |
| $ | 28,559 |
|
| | | | | |
| Money market and interest-bearing checking deposits | 20,952 |
| 22,177 |
| 22,556 |
| 22,539 |
|
| Savings deposits | 2,158 |
| 2,138 |
| 2,064 |
| 2,022 |
|
| Customer certificates of deposit | 2,438 |
| 2,597 |
| 2,806 |
| 3,230 |
|
| Foreign office time deposits | 23 |
| 59 |
| 19 |
| 24 |
|
| Total interest-bearing deposits | 25,571 |
| 26,971 |
| 27,445 |
| 27,815 |
|
| Total deposits | 56,781 |
| 58,863 |
| 58,985 |
| 56,374 |
|
| | | | | |
| Short-term borrowings | 541 |
| 41 |
| 25 |
| 12 |
|
| Accrued expenses and other liabilities | 997 |
| 989 |
| 1,012 |
| 1,279 |
|
| Medium- and long-term debt | 5,143 |
| 5,153 |
| 5,160 |
| 5,921 |
|
| Total liabilities | 63,462 |
| 65,046 |
| 65,182 |
| 63,586 |
|
| | | | | |
| 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 | 2,110 |
| 2,106 |
| 2,135 |
| 2,165 |
|
| Accumulated other comprehensive loss | (361 | ) | (379 | ) | (383 | ) | (295 | ) |
| Retained earnings | 7,580 |
| 7,431 |
| 7,331 |
| 7,157 |
|
| Less cost of common stock in treasury - 52,252,023 shares at 6/30/17, 50,732,795 shares at 3/31/17, 52,851,156 shares at 12/31/16 and 54,247,325 shares at 6/30/16 | (2,485 | ) | (2,369 | ) | (2,428 | ) | (2,474 | ) |
| Total shareholders' equity | 7,985 |
| 7,930 |
| 7,796 |
| 7,694 |
|
| Total liabilities and shareholders' equity | $ | 71,447 |
| $ | 72,976 |
| $ | 72,978 |
| $ | 71,280 |
|
|
| | | | | | | | | | | | | |
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | |
| | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30, | | June 30, |
| (in millions, except per share data) | 2017 | 2016 | | 2017 | 2016 |
| INTEREST INCOME | | | | | |
| Interest and fees on loans | $ | 453 |
| $ | 406 |
| | $ | 874 |
| $ | 812 |
|
| Interest on investment securities | 62 |
| 62 |
| | 124 |
| 124 |
|
| Interest on short-term investments | 14 |
| 5 |
| | 27 |
| 9 |
|
| Total interest income | 529 |
| 473 |
| | 1,025 |
| 945 |
|
| INTEREST EXPENSE | | | | | |
| Interest on deposits | 9 |
| 10 |
| | 18 |
| 20 |
|
| Interest on medium- and long-term debt | 20 |
| 18 |
| | 37 |
| 33 |
|
| Total interest expense | 29 |
| 28 |
| | 55 |
| 53 |
|
| Net interest income | 500 |
| 445 |
| | 970 |
| 892 |
|
| Provision for credit losses | 17 |
| 49 |
| | 33 |
| 197 |
|
| Net interest income after provision for credit losses | 483 |
| 396 |
| | 937 |
| 695 |
|
| NONINTEREST INCOME | | | | | |
| Card fees | 80 |
| 76 |
| | 157 |
| 148 |
|
| Service charges on deposit accounts | 57 |
| 55 |
| | 115 |
| 110 |
|
| Fiduciary income | 51 |
| 49 |
| | 100 |
| 95 |
|
| Commercial lending fees | 22 |
| 22 |
| | 42 |
| 42 |
|
| Letter of credit fees | 11 |
| 13 |
| | 23 |
| 26 |
|
| Bank-owned life insurance | 9 |
| 9 |
| | 19 |
| 18 |
|
| Foreign exchange income | 11 |
| 11 |
| | 22 |
| 21 |
|
| Brokerage fees | 6 |
| 5 |
| | 11 |
| 9 |
|
| Net securities losses | (2 | ) | (1 | ) | | (2 | ) | (3 | ) |
| Other noninterest income | 31 |
| 29 |
| | 60 |
| 46 |
|
| Total noninterest income | 276 |
| 268 |
| | 547 |
| 512 |
|
| NONINTEREST EXPENSES | | | | | |
| Salaries and benefits expense | 219 |
| 247 |
| | 452 |
| 495 |
|
| Outside processing fee expense | 88 |
| 83 |
| | 175 |
| 161 |
|
| Net occupancy expense | 38 |
| 39 |
| | 76 |
| 77 |
|
| Equipment expense | 11 |
| 14 |
| | 22 |
| 27 |
|
| Restructuring charges | 14 |
| 53 |
| | 25 |
| 53 |
|
| Software expense | 31 |
| 30 |
| | 60 |
| 59 |
|
| FDIC insurance expense | 12 |
| 14 |
| | 25 |
| 25 |
|
| Advertising expense | 7 |
| 6 |
| | 11 |
| 10 |
|
| Litigation-related expense | — |
| — |
| | (2 | ) | — |
|
| Other noninterest expenses | 37 |
| 32 |
| | 70 |
| 69 |
|
| Total noninterest expenses | 457 |
| 518 |
| | 914 |
| 976 |
|
| Income before income taxes | 302 |
| 146 |
| | 570 |
| 231 |
|
| Provision for income taxes | 99 |
| 42 |
| | 165 |
| 67 |
|
| NET INCOME | 203 |
| 104 |
| | 405 |
| 164 |
|
| Less income allocated to participating securities | 1 |
| 1 |
| | 3 |
| 2 |
|
| Net income attributable to common shares | $ | 202 |
| $ | 103 |
| | $ | 402 |
| $ | 162 |
|
| Earnings per common share: | | | | | |
| Basic | $ | 1.15 |
| $ | 0.60 |
| | $ | 2.30 |
| $ | 0.94 |
|
| Diluted | 1.13 |
| 0.58 |
| | 2.24 |
| 0.92 |
|
| | | | | | |
| Comprehensive income | 221 |
| 137 |
| | 427 |
| 298 |
|
| | | | | | |
| Cash dividends declared on common stock | 46 |
| 38 |
| | 88 |
| 75 |
|
| Cash dividends declared per common share | 0.26 |
| 0.22 |
| | 0.49 |
| 0.43 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | | | | | |
| | | | | | | | | | | | |
| | Second | First | Fourth | Third | Second | | Second Quarter 2017 Compared to: |
| | Quarter | Quarter | Quarter | Quarter | Quarter | | First Quarter 2017 | | Second Quarter 2016 |
| (in millions, except per share data) | 2017 | 2017 | 2016 | 2016 | 2016 | | Amount | Percent | | Amount | Percent |
| INTEREST INCOME | | | | | | | | | | | |
| Interest and fees on loans | $ | 453 |
| $ | 421 |
| $ | 412 |
| $ | 411 |
| $ | 406 |
| | $ | 32 |
| 7 | % | | $ | 47 |
| 11 | % |
| Interest on investment securities | 62 |
| 62 |
| 62 |
| 61 |
| 62 |
| | — |
| — |
| | — |
| — |
|
| Interest on short-term investments | 14 |
| 13 |
| 10 |
| 8 |
| 5 |
| | 1 |
| 2 |
| | 9 |
| n/m |
|
| Total interest income | 529 |
| 496 |
| 484 |
| 480 |
| 473 |
| | 33 |
| 7 |
| | 56 |
| 12 |
|
| INTEREST EXPENSE | | | | | | | | | | | |
| Interest on deposits | 9 |
| 9 |
| 10 |
| 10 |
| 10 |
| | — |
| — |
| | (1 | ) | — |
|
| Interest on medium- and long-term debt | 20 |
| 17 |
| 19 |
| 20 |
| 18 |
| | 3 |
| 15 |
| | 2 |
| 6 |
|
| Total interest expense | 29 |
| 26 |
| 29 |
| 30 |
| 28 |
| | 3 |
| 11 |
| | 1 |
| 5 |
|
| Net interest income | 500 |
| 470 |
| 455 |
| 450 |
| 445 |
| | 30 |
| 6 |
| | 55 |
| 12 |
|
| Provision for credit losses | 17 |
| 16 |
| 35 |
| 16 |
| 49 |
| | 1 |
| 9 |
| | (32 | ) | (65 | ) |
Net interest income after provision for credit losses | 483 |
| 454 |
| 420 |
| 434 |
| 396 |
| | 29 |
| 6 |
| | 87 |
| 22 |
|
| NONINTEREST INCOME | | | | | | | | | | | |
| Card fees | 80 |
| 77 |
| 79 |
| 76 |
| 76 |
| | 3 |
| 5 |
| | 4 |
| 6 |
|
| Service charges on deposit accounts | 57 |
| 58 |
| 54 |
| 55 |
| 55 |
| | (1 | ) | (1 | ) | | 2 |
| 4 |
|
| Fiduciary income | 51 |
| 49 |
| 48 |
| 47 |
| 49 |
| | 2 |
| 2 |
| | 2 |
| 3 |
|
| Commercial lending fees | 22 |
| 20 |
| 21 |
| 26 |
| 22 |
| | 2 |
| 14 |
| | — |
| — |
|
| Letter of credit fees | 11 |
| 12 |
| 12 |
| 12 |
| 13 |
| | (1 | ) | (7 | ) | | (2 | ) | (12 | ) |
| Bank-owned life insurance | 9 |
| 10 |
| 12 |
| 12 |
| 9 |
| | (1 | ) | (8 | ) | | — |
| — |
|
| Foreign exchange income | 11 |
| 11 |
| 11 |
| 10 |
| 11 |
| | — |
| — |
| | — |
| — |
|
| Brokerage fees | 6 |
| 5 |
| 5 |
| 5 |
| 5 |
| | 1 |
| 2 |
| | 1 |
| 24 |
|
| Net securities losses | (2 | ) | — |
| (2 | ) | — |
| (1 | ) | | (2 | ) | n/m |
| | (1 | ) | n/m |
|
| Other noninterest income | 31 |
| 29 |
| 27 |
| 29 |
| 29 |
| | 2 |
| — |
| | 2 |
| 2 |
|
| Total noninterest income | 276 |
| 271 |
| 267 |
| 272 |
| 268 |
| | 5 |
| 2 |
| | 8 |
| 3 |
|
| NONINTEREST EXPENSES | | | | | | | | | | | |
| Salaries and benefits expense | 219 |
| 233 |
| 219 |
| 247 |
| 247 |
| | (14 | ) | (6 | ) | | (28 | ) | (11 | ) |
| Outside processing fee expense | 88 |
| 87 |
| 89 |
| 86 |
| 83 |
| | 1 |
| 2 |
| | 5 |
| 6 |
|
| Net occupancy expense | 38 |
| 38 |
| 40 |
| 40 |
| 39 |
| | — |
| — |
| | (1 | ) | (4 | ) |
| Equipment expense | 11 |
| 11 |
| 13 |
| 13 |
| 14 |
| | — |
| — |
| | (3 | ) | (19 | ) |
| Restructuring charges | 14 |
| 11 |
| 20 |
| 20 |
| 53 |
| | 3 |
| 32 |
| | (39 | ) | (73 | ) |
| Software expense | 31 |
| 29 |
| 29 |
| 31 |
| 30 |
| | 2 |
| 4 |
| | 1 |
| — |
|
| FDIC insurance expense | 12 |
| 13 |
| 15 |
| 14 |
| 14 |
| | (1 | ) | (9 | ) | | (2 | ) | (9 | ) |
| Advertising expense | 7 |
| 4 |
| 6 |
| 5 |
| 6 |
| | 3 |
| 78 |
| | 1 |
| 12 |
|
| Litigation-related expense | — |
| (2 | ) | 1 |
| — |
| — |
| | 2 |
| n/m |
| | — |
| — |
|
| Other noninterest expenses | 37 |
| 33 |
| 29 |
| 37 |
| 32 |
| | 4 |
| 12 |
| | 5 |
| 16 |
|
| Total noninterest expenses | 457 |
| 457 |
| 461 |
| 493 |
| 518 |
| | — |
| — |
| | (61 | ) | (12 | ) |
| Income before income taxes | 302 |
| 268 |
| 226 |
| 213 |
| 146 |
| | 34 |
| 13 |
| | 156 |
| n/m |
|
| Provision for income taxes | 99 |
| 66 |
| 62 |
| 64 |
| 42 |
| | 33 |
| 50 |
| | 57 |
| n/m |
|
| NET INCOME | 203 |
| 202 |
| 164 |
| 149 |
| 104 |
| | 1 |
| 1 |
| | 99 |
| 95 |
|
| Less income allocated to participating securities | 1 |
| 2 |
| 1 |
| 1 |
| 1 |
| | (1 | ) | (4 | ) | | — |
| — |
|
| Net income attributable to common shares | $ | 202 |
| $ | 200 |
| $ | 163 |
| $ | 148 |
| $ | 103 |
| | $ | 2 |
| 1 | % | | $ | 99 |
| 96 | % |
| Earnings per common share: | | | | | | | | | | | |
| Basic | $ | 1.15 |
| $ | 1.15 |
| $ | 0.95 |
| $ | 0.87 |
| $ | 0.60 |
| | $ | — |
| — | % | | $ | 0.55 |
| 92 | % |
| Diluted | 1.13 |
| 1.11 |
| 0.92 |
| 0.84 |
| 0.58 |
| | 0.02 |
| 2 |
| | 0.55 |
| 95 |
|
| | | | | | | |
| | | | |
| Comprehensive income | 221 |
| 206 |
| 73 |
| 152 |
| 137 |
| | 15 |
| 7 |
| | 84 |
| 61 |
|
| | | | | | | | | | | | |
| Cash dividends declared on common stock | 46 |
| 42 |
| 40 |
| 40 |
| 38 |
| | 4 |
| 7 |
| | 8 |
| 19 |
|
| Cash dividends declared per common share | 0.26 |
| 0.23 |
| 0.23 |
| 0.23 |
| 0.22 |
| | 0.03 |
| 13 |
| | 0.04 |
| 18 |
|
n/m - not meaningful
|
| | | | | | | | | | | | | | | | |
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
|
| Comerica Incorporated and Subsidiaries | | | | | | |
| | | | | | | |
| | 2017 | | 2016 |
| (in millions) | 2nd Qtr | 1st Qtr | | 4th Qtr | 3rd Qtr | 2nd Qtr |
| | | | | | | |
| Balance at beginning of period | $ | 708 |
| $ | 730 |
| | $ | 727 |
| $ | 729 |
| $ | 724 |
|
| | | | | | | |
| Loan charge-offs: | | | | | | |
| Commercial | 34 |
| 38 |
| | 37 |
| 24 |
| 48 |
|
| Commercial mortgage | 1 |
| 1 |
| | 1 |
| 2 |
| — |
|
| International | 2 |
| 3 |
| | 8 |
| 8 |
| 4 |
|
| Consumer | 2 |
| 2 |
| | 2 |
| 1 |
| 2 |
|
| Total loan charge-offs | 39 |
| 44 |
| | 48 |
| 35 |
| 54 |
|
| | | | | | | |
| Recoveries on loans previously charged-off: | | | | | | |
| Commercial | 17 |
| 7 |
| | 7 |
| 15 |
| 9 |
|
| Commercial mortgage | 3 |
| 2 |
| | 3 |
| 3 |
| 2 |
|
| Residential mortgage | — |
| — |
| | 1 |
| — |
| — |
|
| Consumer | 1 |
| 2 |
| | 1 |
| 1 |
| 1 |
|
| Total recoveries | 21 |
| 11 |
| | 12 |
| 19 |
| 12 |
|
| Net loan charge-offs | 18 |
| 33 |
| | 36 |
| 16 |
| 42 |
|
| Provision for loan losses | 15 |
| 11 |
| | 39 |
| 14 |
| 47 |
|
| Balance at end of period | $ | 705 |
| $ | 708 |
| | $ | 730 |
| $ | 727 |
| $ | 729 |
|
| | | | | | | |
| Allowance for loan losses as a percentage of total loans | 1.43 | % | 1.47 | % | | 1.49 | % | 1.48 | % | 1.45 | % |
| | | | | | | |
| Net loan charge-offs as a percentage of average total loans | 0.15 |
| 0.28 |
| | 0.29 |
| 0.13 |
| 0.34 |
|
|
| | | | | | | | | | | | | | | | |
| ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | |
| | | | | | | |
| | 2017 | | 2016 |
| (in millions) | 2nd Qtr | 1st Qtr | | 4th Qtr | 3rd Qtr | 2nd Qtr |
| | | | | | | |
| Balance at beginning of period | $ | 46 |
| $ | 41 |
| | $ | 45 |
| $ | 43 |
| $ | 46 |
|
| Charge-offs on lending-related commitments (a) | — |
| — |
| | — |
| — |
| (5 | ) |
| Provision for credit losses on lending-related commitments | 2 |
| 5 |
| | (4 | ) | 2 |
| 2 |
|
| Balance at end of period | $ | 48 |
| $ | 46 |
| | $ | 41 |
| $ | 45 |
| $ | 43 |
|
| | | | | | | |
| Unfunded lending-related commitments sold | $ | — |
| $ | — |
| | $ | — |
| $ | — |
| $ | 12 |
|
| |
| (a) | Charge-offs result from the sale of unfunded lending-related commitments. |
|
| | | | | | | | | | | | | | | | |
| NONPERFORMING ASSETS (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | |
| | | | | | | |
| | 2017 | | 2016 |
| (in millions) | 2nd Qtr | 1st Qtr | | 4th Qtr | 3rd Qtr | 2nd Qtr |
| | | | | | | |
| SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS | | |
| Nonaccrual loans: | | | | | | |
| Business loans: | | | | | | |
| Commercial | $ | 379 |
| $ | 400 |
| | $ | 445 |
| $ | 508 |
| $ | 482 |
|
| Commercial mortgage | 41 |
| 41 |
| | 46 |
| 44 |
| 44 |
|
| Lease financing | 8 |
| 6 |
| | 6 |
| 6 |
| 6 |
|
| International | 6 |
| 8 |
| | 14 |
| 19 |
| 18 |
|
| Total nonaccrual business loans | 434 |
| 455 |
| | 511 |
| 577 |
| 550 |
|
| Retail loans: | | | | | | |
| Residential mortgage | 36 |
| 39 |
| | 39 |
| 23 |
| 26 |
|
| Consumer: | | | | | | |
| Home equity | 23 |
| 26 |
| | 28 |
| 27 |
| 28 |
|
| Other consumer | — |
| 1 |
| | 4 |
| 4 |
| 1 |
|
| Total consumer | 23 |
| 27 |
| | 32 |
| 31 |
| 29 |
|
| Total nonaccrual retail loans | 59 |
| 66 |
| | 71 |
| 54 |
| 55 |
|
| Total nonaccrual loans | 493 |
| 521 |
| | 582 |
| 631 |
| 605 |
|
| Reduced-rate loans | 8 |
| 8 |
| | 8 |
| 8 |
| 8 |
|
| Total nonperforming loans | 501 |
| 529 |
| | 590 |
| 639 |
| 613 |
|
| Foreclosed property | 18 |
| 16 |
| | 17 |
| 21 |
| 22 |
|
| Total nonperforming assets | $ | 519 |
| $ | 545 |
| | $ | 607 |
| $ | 660 |
| $ | 635 |
|
| | | | | | | |
| Nonperforming loans as a percentage of total loans | 1.01 | % | 1.10 | % | | 1.20 | % | 1.30 | % | 1.22 | % |
Nonperforming assets as a percentage of total loans and foreclosed property | 1.05 |
| 1.13 |
| | 1.24 |
| 1.34 |
| 1.26 |
|
Allowance for loan losses as a percentage of total nonperforming loans | 141 |
| 134 |
| | 124 |
| 114 |
| 119 |
|
| Loans past due 90 days or more and still accruing | $ | 30 |
| $ | 26 |
| | $ | 19 |
| $ | 48 |
| $ | 35 |
|
| | | | | | | |
| ANALYSIS OF NONACCRUAL LOANS | | | | | | |
| Nonaccrual loans at beginning of period | $ | 521 |
| $ | 582 |
| | $ | 631 |
| $ | 605 |
| $ | 681 |
|
| Loans transferred to nonaccrual (a) | 54 |
| 104 |
| | 60 |
| 105 |
| 107 |
|
| Nonaccrual business loan gross charge-offs (b) | (37 | ) | (42 | ) | | (46 | ) | (34 | ) | (52 | ) |
| Nonaccrual business loans sold | — |
| (8 | ) | | (10 | ) | (2 | ) | (40 | ) |
| Payments/Other (c) | (45 | ) | (115 | ) | | (53 | ) | (43 | ) | (91 | ) |
| Nonaccrual loans at end of period | $ | 493 |
| $ | 521 |
| | $ | 582 |
| $ | 631 |
| $ | 605 |
|
| (a) Based on an analysis of nonaccrual loans with book balances greater than $2 million. |
| (b) Analysis of gross loan charge-offs: | | | | | | |
| Nonaccrual business loans | $ | 37 |
| $ | 42 |
| | $ | 46 |
| $ | 34 |
| $ | 52 |
|
| Consumer and residential mortgage loans | 2 |
| 2 |
| | 2 |
| 1 |
| 2 |
|
| Total gross loan charge-offs | $ | 39 |
| $ | 44 |
| | $ | 48 |
| $ | 35 |
| $ | 54 |
|
| (c) 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 (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | | |
| | | | | | | | |
| | Six Months Ended |
| | June 30, 2017 | | June 30, 2016 |
| | Average | | Average | | Average | | Average |
| (dollar amounts in millions) | Balance | Interest | Rate (a) | | Balance | Interest | Rate (a) |
| | | | | | | | |
| Commercial loans | $ | 30,166 |
| $ | 539 |
| 3.62 | % | | $ | 31,162 |
| $ | 500 |
| 3.24 | % |
| Real estate construction loans | 2,934 |
| 57 |
| 3.95 |
| | 2,272 |
| 41 |
| 3.64 |
|
| Commercial mortgage loans | 8,994 |
| 170 |
| 3.81 |
| | 8,997 |
| 158 |
| 3.53 |
|
| Lease financing | 548 |
| 6 |
| 2.01 |
| | 728 |
| 10 |
| 2.66 |
|
| International loans | 1,174 |
| 23 |
| 3.88 |
| | 1,408 |
| 26 |
| 3.64 |
|
| Residential mortgage loans | 1,969 |
| 35 |
| 3.59 |
| | 1,886 |
| 36 |
| 3.85 |
|
| Consumer loans | 2,528 |
| 44 |
| 3.52 |
| | 2,478 |
| 41 |
| 3.35 |
|
| Total loans | 48,313 |
| 874 |
| 3.65 |
| | 48,931 |
| 812 |
| 3.34 |
|
| | | | | | | | |
| Mortgage-backed securities (b) | 9,321 |
| 100 |
| 2.16 |
| | 9,341 |
| 102 |
| 2.21 |
|
| Other investment securities | 2,894 |
| 24 |
| 1.64 |
| | 3,004 |
| 22 |
| 1.50 |
|
| Total investment securities (b) | 12,215 |
| 124 |
| 2.04 |
| | 12,345 |
| 124 |
| 2.04 |
|
| | | | | | | | |
| Interest-bearing deposits with banks | 5,857 |
| 27 |
| 0.92 |
| | 3,478 |
| 9 |
| 0.50 |
|
| Other short-term investments | 92 |
| — |
| 0.63 |
| | 106 |
| — |
| 0.76 |
|
| Total earning assets | 66,477 |
| 1,025 |
| 3.11 |
| | 64,860 |
| 945 |
| 2.94 |
|
| | | | | | | | |
| Cash and due from banks | 1,164 |
| | | | 1,071 |
| | |
| Allowance for loan losses | (733 | ) | | | | (714 | ) | | |
| Accrued income and other assets | 4,659 |
| | | | 4,731 |
| | |
| Total assets | $ | 71,567 |
| | | | $ | 69,948 |
| | |
| | | | | | | | |
| Money market and interest-bearing checking deposits | $ | 22,066 |
| 14 |
| 0.13 |
| | $ | 22,989 |
| 13 |
| 0.11 |
|
| Savings deposits | 2,114 |
| — |
| 0.02 |
| | 1,973 |
| — |
| 0.02 |
|
| Customer certificates of deposit | 2,621 |
| 4 |
| 0.37 |
| | 3,399 |
| 7 |
| 0.40 |
|
| Foreign office time deposits | 50 |
| — |
| 0.55 |
| | 40 |
| — |
| 0.34 |
|
| Total interest-bearing deposits | 26,851 |
| 18 |
| 0.14 |
| | 28,401 |
| 20 |
| 0.14 |
|
| | | | | | | | |
| Short-term borrowings | 85 |
| — |
| 1.07 |
| | 262 |
| — |
| 0.45 |
|
| Medium- and long-term debt | 5,159 |
| 37 |
| 1.39 |
| | 4,083 |
| 33 |
| 1.62 |
|
| Total interest-bearing sources | 32,095 |
| 55 |
| 0.34 |
| | 32,746 |
| 53 |
| 0.32 |
|
| | | | | | | | |
| Noninterest-bearing deposits | 30,601 |
| | | | 28,214 |
| | |
| Accrued expenses and other liabilities | 972 |
| | | | 1,345 |
| | |
| Total shareholders' equity | 7,899 |
| | | | 7,643 |
| | |
| Total liabilities and shareholders' equity | $ | 71,567 |
| | | | $ | 69,948 |
| | |
| | | | | | | | |
| Net interest income/rate spread | | $ | 970 |
| 2.77 |
| | | $ | 892 |
| 2.62 |
|
| | | | | | | | |
| Impact of net noninterest-bearing sources of funds | | | 0.18 |
| | | | 0.16 |
|
| Net interest margin (as a percentage of average earning assets) | | | 2.95 | % | | | | 2.78 | % |
| |
| (a) | Fully taxable equivalent. |
| |
| (b) | Includes investment securities available-for-sale and investment securities held-to-maturity. |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| ANALYSIS OF NET INTEREST INCOME (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2017 | | March 31, 2017 | | June 30, 2016 |
| | Average | | Average | | Average | | Average | | Average | | Average |
| (dollar amounts in millions) | Balance | Interest | Rate (a) | | Balance | Interest | Rate (a) | | Balance | Interest | Rate (a) |
| | | | | | | | | | | | |
| Commercial loans | $ | 30,632 |
| $ | 283 |
| 3.72 | % | | $ | 29,694 |
| $ | 256 |
| 3.51 | % | | $ | 31,511 |
| $ | 251 |
| 3.23 | % |
| Real estate construction loans | 2,910 |
| 29 |
| 4.08 |
| | 2,958 |
| 28 |
| 3.82 |
| | 2,429 |
| 22 |
| 3.62 |
|
| Commercial mortgage loans | 9,012 |
| 87 |
| 3.88 |
| | 8,977 |
| 83 |
| 3.73 |
| | 9,033 |
| 78 |
| 3.47 |
|
| Lease financing | 526 |
| 1 |
| 0.61 |
| | 570 |
| 5 |
| 3.30 |
| | 730 |
| 4 |
| 1.98 |
|
| International loans | 1,139 |
| 12 |
| 3.99 |
| | 1,210 |
| 11 |
| 3.77 |
| | 1,396 |
| 13 |
| 3.63 |
|
| Residential mortgage loans | 1,975 |
| 18 |
| 3.61 |
| | 1,963 |
| 17 |
| 3.57 |
| | 1,880 |
| 17 |
| 3.76 |
|
| Consumer loans | 2,529 |
| 23 |
| 3.62 |
| | 2,528 |
| 21 |
| 3.42 |
| | 2,490 |
| 21 |
| 3.37 |
|
| Total loans | 48,723 |
| 453 |
| 3.74 |
| | 47,900 |
| 421 |
| 3.57 |
| | 49,469 |
| 406 |
| 3.31 |
|
| | | | | | | | | | | | |
| Mortgage-backed securities (b) | 9,336 |
| 50 |
| 2.17 |
| | 9,306 |
| 50 |
| 2.14 |
| | 9,326 |
| 51 |
| 2.21 |
|
| Other investment securities | 2,896 |
| 12 |
| 1.69 |
| | 2,892 |
| 12 |
| 1.60 |
| | 3,008 |
| 11 |
| 1.50 |
|
| Total investment securities (b) | 12,232 |
| 62 |
| 2.06 |
| | 12,198 |
| 62 |
| 2.02 |
| | 12,334 |
| 62 |
| 2.03 |
|
| | | | | | | | | | | | |
| Interest-bearing deposits with banks | 5,263 |
| 14 |
| 1.03 |
| | 6,458 |
| 13 |
| 0.83 |
| | 3,690 |
| 5 |
| 0.50 |
|
| Other short-term investments | 92 |
| — |
| 0.58 |
| | 92 |
| — |
| 0.67 |
| | 104 |
| — |
| 0.58 |
|
| Total earning assets | 66,310 |
| 529 |
| 3.21 |
| | 66,648 |
| 496 |
| 3.02 |
| | 65,597 |
| 473 |
| 2.91 |
|
| | | | | | | | | | | | |
| Cash and due from banks | 1,148 |
| | | | 1,180 |
| | | | 1,074 |
| | |
| Allowance for loan losses | (726 | ) | | | | (741 | ) | | | | (749 | ) | | |
| Accrued income and other assets | 4,586 |
| | | | 4,732 |
| | | | 4,746 |
| | |
| Total assets | $ | 71,318 |
| | | | $ | 71,819 |
| | | | $ | 70,668 |
| | |
| | | | | | | | | | | | |
| Money market and interest-bearing checking deposits | $ | 21,661 |
| 7 |
| 0.13 |
| | $ | 22,477 |
| 7 |
| 0.12 |
| | $ | 22,785 |
| 6 |
| 0.11 |
|
| Savings deposits | 2,142 |
| — |
| 0.02 |
| | 2,085 |
| — |
| 0.02 |
| | 2,010 |
| — |
| 0.02 |
|
| Customer certificates of deposit | 2,527 |
| 2 |
| 0.36 |
| | 2,715 |
| 2 |
| 0.38 |
| | 3,320 |
| 4 |
| 0.40 |
|
| Foreign office time deposits | 57 |
| — |
| 0.60 |
| | 43 |
| — |
| 0.49 |
| | 30 |
| — |
| 0.35 |
|
| Total interest-bearing deposits | 26,387 |
| 9 |
| 0.15 |
| | 27,320 |
| 9 |
| 0.14 |
| | 28,145 |
| 10 |
| 0.14 |
|
| | | | | | | | | | | | |
| Short-term borrowings | 147 |
| — |
| 1.12 |
| | 22 |
| — |
| 0.73 |
| | 159 |
| — |
| 0.45 |
|
| Medium- and long-term debt | 5,161 |
| 20 |
| 1.48 |
| | 5,157 |
| 17 |
| 1.30 |
| | 5,072 |
| 18 |
| 1.42 |
|
| Total interest-bearing sources | 31,695 |
| 29 |
| 0.37 |
| | 32,499 |
| 26 |
| 0.33 |
| | 33,376 |
| 28 |
| 0.33 |
|
| | | | | | | | | | | | |
| Noninterest-bearing deposits | 30,741 |
| | | | 30,459 |
| | | | 28,376 |
| | |
| Accrued expenses and other liabilities | 949 |
| | | | 996 |
| | | | 1,262 |
| | |
| Total shareholders' equity | 7,933 |
| | | | 7,865 |
| | | | 7,654 |
| | |
| Total liabilities and shareholders' equity | $ | 71,318 |
| | | | $ | 71,819 |
| | | | $ | 70,668 |
| | |
| | | | | | | | | | | | |
| Net interest income/rate spread | | $ | 500 |
| 2.84 |
| | | $ | 470 |
| 2.69 |
| | | $ | 445 |
| 2.58 |
|
| | | | | | | | | | | | |
| Impact of net noninterest-bearing sources of funds | | | 0.19 |
| | | | 0.17 |
| | | | 0.16 |
|
| Net interest margin (as a percentage of average earning assets) | | | 3.03 | % | | | | 2.86 | % | | | | 2.74 | % |
| |
| (a) | Fully taxable equivalent. |
| |
| (b) | Includes investment securities available-for-sale and investment securities held-to-maturity. |
|
| | | | | | | | | | | | | | | |
| CONSOLIDATED STATISTICAL DATA (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | |
| | | | | | |
| | June 30, | March 31, | December 31, | September 30, | June 30, |
| (in millions, except per share data) | 2017 | 2017 | 2016 | 2016 | 2016 |
| | | | | | |
| Commercial loans: | | | | | |
| Floor plan | $ | 4,346 |
| $ | 4,191 |
| $ | 4,269 |
| $ | 3,778 |
| $ | 4,120 |
|
| Other | 27,103 |
| 26,024 |
| 26,725 |
| 27,374 |
| 28,240 |
|
| Total commercial loans | 31,449 |
| 30,215 |
| 30,994 |
| 31,152 |
| 32,360 |
|
| Real estate construction loans | 2,857 |
| 2,930 |
| 2,869 |
| 2,743 |
| 2,553 |
|
| Commercial mortgage loans | 8,974 |
| 9,021 |
| 8,931 |
| 9,013 |
| 9,038 |
|
| Lease financing | 472 |
| 550 |
| 572 |
| 648 |
| 684 |
|
| International loans | 1,145 |
| 1,106 |
| 1,258 |
| 1,303 |
| 1,365 |
|
| Residential mortgage loans | 1,976 |
| 1,944 |
| 1,942 |
| 1,874 |
| 1,856 |
|
| Consumer loans: | | | | | |
| Home equity | 1,796 |
| 1,790 |
| 1,800 |
| 1,792 |
| 1,779 |
|
| Other consumer | 739 |
| 747 |
| 722 |
| 749 |
| 745 |
|
| Total consumer loans | 2,535 |
| 2,537 |
| 2,522 |
| 2,541 |
| 2,524 |
|
| Total loans | $ | 49,408 |
| $ | 48,303 |
| $ | 49,088 |
| $ | 49,274 |
| $ | 50,380 |
|
| | | | | | |
| Goodwill | $ | 635 |
| $ | 635 |
| $ | 635 |
| $ | 635 |
| $ | 635 |
|
| Core deposit intangible | 7 |
| 7 |
| 7 |
| 8 |
| 9 |
|
| Other intangibles | 2 |
| 3 |
| 3 |
| 3 |
| 3 |
|
| | | | | | |
| Common equity tier 1 capital (a) | 7,705 |
| 7,667 |
| 7,540 |
| 7,378 |
| 7,346 |
|
| Risk-weighted assets (a) | 66,916 |
| 66,355 |
| 67,966 |
| 69,018 |
| 70,056 |
|
| | | | | | |
| Common equity tier 1 and tier 1 risk-based capital ratio (a) | 11.51 | % | 11.55 | % | 11.09 | % | 10.69 | % | 10.49 | % |
| Total risk-based capital ratio (a) | 13.66 |
| 13.72 |
| 13.27 |
| 12.84 |
| 12.74 |
|
| Leverage ratio (a) | 10.80 |
| 10.67 |
| 10.18 |
| 10.14 |
| 10.39 |
|
| Common equity ratio | 11.18 |
| 10.87 |
| 10.68 |
| 10.42 |
| 10.79 |
|
| Tangible common equity ratio (b) | 10.37 |
| 10.07 |
| 9.89 |
| 9.64 |
| 9.98 |
|
| | | | | | |
| Common shareholders' equity per share of common stock | $ | 45.39 |
| $ | 44.69 |
| $ | 44.47 |
| $ | 44.91 |
| $ | 44.24 |
|
| Tangible common equity per share of common stock (b) | 41.73 |
| 41.05 |
| 40.79 |
| 41.15 |
| 40.52 |
|
| Market value per share for the quarter: | | | | | |
| High | 75.30 |
| 75.00 |
| 70.44 |
| 47.81 |
| 47.55 |
|
| Low | 64.75 |
| 64.27 |
| 46.75 |
| 38.39 |
| 36.27 |
|
| Close | 73.24 |
| 68.58 |
| 68.11 |
| 47.32 |
| 41.13 |
|
| | | | | | |
| Quarterly ratios: | | | | | |
| Return on average common shareholders' equity | 10.28 | % | 10.42 | % | 8.43 | % | 7.76 | % | 5.47 | % |
| Return on average assets | 1.14 |
| 1.14 |
| 0.88 |
| 0.82 |
| 0.59 |
|
| Efficiency ratio (c) | 58.63 |
| 61.63 |
| 63.58 |
| 68.15 |
| 72.43 |
|
| | | | | | |
| Number of banking centers | 439 |
| 458 |
| 458 |
| 473 |
| 473 |
|
| | | | | | |
| Number of employees - full time equivalent | 8,017 |
| 8,044 |
| 7,960 |
| 8,476 |
| 8,792 |
|
| |
| (a) | June 30, 2017 amounts and 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 (losses). |
|
| | | | | | | | | |
| PARENT COMPANY ONLY BALANCE SHEETS (unaudited) |
| Comerica Incorporated | | | |
| | | | |
| | June 30, | December 31, | June 30, |
| (in millions, except share data) | 2017 | 2016 | 2016 |
| | | | |
| ASSETS | | | |
| Cash and due from subsidiary bank | $ | 894 |
| $ | 761 |
| $ | 8 |
|
| Short-term investments with subsidiary bank | — |
| — |
| 563 |
|
| Other short-term investments | 88 |
| 87 |
| 87 |
|
| Investment in subsidiaries, principally banks | 7,647 |
| 7,561 |
| 7,666 |
|
| Premises and equipment | 2 |
| 2 |
| 2 |
|
| Other assets | 128 |
| 150 |
| 163 |
|
| Total assets | $ | 8,759 |
| $ | 8,561 |
| $ | 8,489 |
|
| | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | |
| Medium- and long-term debt | $ | 607 |
| $ | 604 |
| $ | 632 |
|
| Other liabilities | 167 |
| 161 |
| 163 |
|
| Total liabilities | 774 |
| 765 |
| 795 |
|
| | | | |
| Common stock - $5 par value: | | | |
| Authorized - 325,000,000 shares | | | |
| Issued - 228,164,824 shares | 1,141 |
| 1,141 |
| 1,141 |
|
| Capital surplus | 2,110 |
| 2,135 |
| 2,165 |
|
| Accumulated other comprehensive loss | (361 | ) | (383 | ) | (295 | ) |
| Retained earnings | 7,580 |
| 7,331 |
| 7,157 |
|
| Less cost of common stock in treasury - 52,252,023 shares at 6/30/17, 52,851,156 shares at 12/31/16 and 54,247,325 shares at 6/30/16 | (2,485 | ) | (2,428 | ) | (2,474 | ) |
| Total shareholders' equity | 7,985 |
| 7,796 |
| 7,694 |
|
| Total liabilities and shareholders' equity | $ | 8,759 |
| $ | 8,561 |
| $ | 8,489 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| 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, 2015 | 175.7 |
| $ | 1,141 |
| $ | 2,173 |
| $ | (429 | ) | $ | 7,084 |
| $ | (2,409 | ) | $ | 7,560 |
|
| Net income | — |
| — |
| — |
| — |
| 164 |
| — |
| 164 |
|
| Other comprehensive income, net of tax | — |
| — |
| — |
| 134 |
| — |
| — |
| 134 |
|
| Cash dividends declared on common stock ($0.43 per share) | — |
| — |
| — |
| — |
| (75 | ) | — |
| (75 | ) |
| Purchase of common stock | (2.9 | ) | — |
| — |
| — |
| — |
| (114 | ) | (114 | ) |
| Net issuance of common stock under employee stock plans | 1.1 |
| — |
| (33 | ) | — |
| (16 | ) | 49 |
| — |
|
| Share-based compensation | — |
| — |
| 25 |
| — |
| — |
| — |
| 25 |
|
| BALANCE AT JUNE 30, 2016 | 173.9 |
| $ | 1,141 |
| $ | 2,165 |
| $ | (295 | ) | $ | 7,157 |
| $ | (2,474 | ) | $ | 7,694 |
|
| | | | | | | | |
| BALANCE AT DECEMBER 31, 2016 | 175.3 |
| $ | 1,141 |
| $ | 2,135 |
| $ | (383 | ) | $ | 7,331 |
| $ | (2,428 | ) | $ | 7,796 |
|
| Cumulative effect of change in accounting principle | — |
| — |
| 3 |
| — |
| (2 | ) | — |
| 1 |
|
| Net income | — |
| — |
| — |
| — |
| 405 |
| — |
| 405 |
|
| Other comprehensive income, net of tax | — |
| — |
| — |
| 22 |
| — |
| — |
| 22 |
|
| Cash dividends declared on common stock ($0.49 per share) | — |
| — |
| — |
| — |
| (88 | ) | — |
| (88 | ) |
| Purchase of common stock | (3.7 | ) | — |
| — |
| — |
| — |
| (257 | ) | (257 | ) |
| Net issuance of common stock under employee stock plans | 2.8 |
| — |
| (26 | ) | — |
| (20 | ) | 128 |
| 82 |
|
| Net issuance of common stock for warrants | 1.5 |
| — |
| (25 | ) | — |
| (46 | ) | 71 |
| — |
|
| Share-based compensation | — |
| — |
| 24 |
| — |
| — |
| — |
| 24 |
|
| Other | — |
| — |
| (1 | ) | — |
| — |
| 1 |
| — |
|
| BALANCE AT JUNE 30, 2017 | 175.9 |
| $ | 1,141 |
| $ | 2,110 |
| $ | (361 | ) | $ | 7,580 |
| $ | (2,485 | ) | $ | 7,985 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| BUSINESS SEGMENT FINANCIAL RESULTS (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| (dollar amounts in millions) | Business | | Retail | | Wealth | | | | | | |
| Three Months Ended June 30, 2017 | Bank | | Bank | | Management | | Finance | | Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income (expense) | $ | 336 |
| | $ | 162 |
| | $ | 42 |
| | $ | (49 | ) | | $ | 9 |
| | $ | 500 |
|
| Provision for credit losses | 12 |
| | 5 |
| | (2 | ) | | — |
| | 2 |
| | 17 |
|
| Noninterest income | 152 |
| | 48 |
| | 64 |
| | 10 |
| | 2 |
| | 276 |
|
| Noninterest expenses | 196 |
| | 180 |
| | 71 |
| | (1 | ) | | 11 |
| | 457 |
|
| Provision (benefit) for income taxes | 100 |
| | 9 |
| | 14 |
| | (17 | ) | | (7 | ) | | 99 |
|
| Net income (loss) | $ | 180 |
| | $ | 16 |
| | $ | 23 |
| | $ | (21 | ) | | $ | 5 |
| | $ | 203 |
|
| Net credit-related charge-offs (recoveries) | $ | 10 |
| | $ | 9 |
| | $ | (1 | ) | | $ | — |
| | $ | — |
| | $ | 18 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 38,853 |
| | $ | 6,487 |
| | $ | 5,432 |
| | $ | 13,936 |
| | $ | 6,610 |
| | $ | 71,318 |
|
| Loans | 37,580 |
| | 5,865 |
| | 5,278 |
| | — |
| | — |
| | 48,723 |
|
| Deposits | 28,748 |
| | 23,935 |
| | 4,106 |
| | 156 |
| | 183 |
| | 57,128 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (a) | 1.85 | % | | 0.27 | % | | 1.76 | % | | N/M |
| | N/M |
| | 1.14 | % |
| Efficiency ratio (b) | 40.19 |
| | 84.79 |
| | 66.44 |
| | N/M |
| | N/M |
| | 58.63 |
|
| | | | | | | | | | | | |
| | Business | | Retail | | Wealth | | | | | | |
| Three Months Ended March 31, 2017 | Bank | | Bank | | Management | | Finance | | Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income (expense) | $ | 332 |
| | $ | 160 |
| | $ | 41 |
| | $ | (71 | ) | | $ | 8 |
| | $ | 470 |
|
| Provision for credit losses | 10 |
| | 12 |
| | (1 | ) | | — |
| | (5 | ) | | 16 |
|
| Noninterest income | 144 |
| | 48 |
| | 64 |
| | 11 |
| | 4 |
| | 271 |
|
| Noninterest expenses | 197 |
| | 179 |
| | 70 |
| | (1 | ) | | 12 |
| | 457 |
|
| Provision (benefit) for income taxes | 92 |
| | 6 |
| | 13 |
| | (24 | ) | | (21 | ) | | 66 |
|
| Net income (loss) | $ | 177 |
| | $ | 11 |
| | $ | 23 |
| | $ | (35 | ) | | $ | 26 |
| | $ | 202 |
|
| Net credit-related charge-offs (recoveries) | $ | 30 |
| | $ | 5 |
| | $ | (2 | ) | | $ | — |
| | $ | — |
| | $ | 33 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 38,091 |
| | $ | 6,525 |
| | $ | 5,406 |
| | $ | 13,944 |
| | $ | 7,853 |
| | $ | 71,819 |
|
| Loans | 36,754 |
| | 5,895 |
| | 5,251 |
| | — |
| | — |
| | 47,900 |
|
| Deposits | 29,648 |
| | 23,795 |
| | 3,978 |
| | 142 |
| | 216 |
| | 57,779 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (a) | 1.89 | % | | 0.18 | % | | 1.71 | % | | N/M |
| | N/M |
| | 1.14 | % |
| Efficiency ratio (b) | 41.33 |
| | 86.00 |
| | 67.17 |
| | N/M |
| | N/M |
| | 61.63 |
|
| | | | | | | | | | | | |
| | Business | | Retail | | Wealth | | | | | | |
| Three Months Ended June 30, 2016 | Bank | | Bank | | Management | | Finance | | Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income (expense) | $ | 349 |
| | $ | 154 |
| | $ | 42 |
| | $ | (105 | ) | | $ | 5 |
| | $ | 445 |
|
| Provision for credit losses | 46 |
| | 1 |
| | 3 |
| | — |
| | (1 | ) | | 49 |
|
| Noninterest income | 143 |
| | 48 |
| | 62 |
| | 10 |
| | 5 |
| | 268 |
|
| Noninterest expenses | 221 |
| | 205 |
| | 81 |
| | — |
| | 11 |
| | 518 |
|
| Provision (benefit) for income taxes | 74 |
| | (2 | ) | | 7 |
| | (36 | ) | | (1 | ) | | 42 |
|
| Net income (loss) | $ | 151 |
| | $ | (2 | ) | | $ | 13 |
| | $ | (59 | ) | | $ | 1 |
| | $ | 104 |
|
| Net credit-related charge-offs (recoveries) | $ | 42 |
| | $ | 1 |
| | $ | 4 |
| | $ | — |
| | $ | — |
| | $ | 47 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 39,983 |
| | $ | 6,558 |
| | $ | 5,215 |
| | $ | 13,927 |
| | $ | 4,985 |
| | $ | 70,668 |
|
| Loans | 38,574 |
| | 5,879 |
| | 5,016 |
| | — |
| | — |
| | 49,469 |
|
| Deposits | 28,441 |
| | 23,546 |
| | 4,213 |
| | 50 |
| | 271 |
| | 56,521 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (a) | 1.52 | % | | (0.04 | )% | | 0.99 | % | | N/M |
| | N/M |
| | 0.59 | % |
| Efficiency ratio (b) | 44.75 |
| | 101.58 |
| | 78.22 |
| | N/M |
| | N/M |
| | 72.43 |
|
| |
| (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 (fully taxable equivalent basis) and noninterest income excluding net securities gains (losses). |
N/M - Not Meaningful
|
| | | | | | | | | | | | | | | | | | | | | | | |
| MARKET SEGMENT FINANCIAL RESULTS (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| (dollar amounts in millions) | | | | | | | Other | | Finance | | |
| Three Months Ended June 30, 2017 | Michigan | | California | | Texas | | Markets | | & Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income (expense) | $ | 167 |
| | $ | 178 |
| | $ | 113 |
| | $ | 82 |
| | $ | (40 | ) | | $ | 500 |
|
| Provision for credit losses | (2 | ) | | 24 |
| | (15 | ) | | 8 |
| | 2 |
| | 17 |
|
| Noninterest income | 81 |
| | 45 |
| | 33 |
| | 105 |
| | 12 |
| | 276 |
|
| Noninterest expenses | 145 |
| | 98 |
| | 94 |
| | 110 |
| | 10 |
| | 457 |
|
| Provision (benefit) for income taxes | 38 |
| | 40 |
| | 25 |
| | 20 |
| | (24 | ) | | 99 |
|
| Net income (loss) | $ | 67 |
| | $ | 61 |
| | $ | 42 |
| | $ | 49 |
| | $ | (16 | ) | | $ | 203 |
|
| Net credit-related charge-offs (recoveries) | $ | (1 | ) | | $ | 8 |
| | $ | 5 |
| | $ | 6 |
| | $ | — |
| | $ | 18 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 13,371 |
| | $ | 18,446 |
| | $ | 10,481 |
| | $ | 8,474 |
| | $ | 20,546 |
| | $ | 71,318 |
|
| Loans | 12,712 |
| | 18,194 |
| | 10,015 |
| | 7,802 |
| | — |
| | 48,723 |
|
| Deposits | 21,698 |
| | 17,344 |
| | 9,632 |
| | 8,115 |
| | 339 |
| | 57,128 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (a) | 1.20 | % | | 1.33 | % | | 1.52 | % | | 2.24 | % | | N/M |
| | 1.14 | % |
| Efficiency ratio (b) | 58.14 |
| | 43.82 |
| | 64.37 |
| | 58.45 |
| | N/M |
| | 58.63 |
|
| | | | | | | | | | | | |
| | | | | | | | Other | | Finance | | |
| Three Months Ended March 31, 2017 | Michigan | | California | | Texas | | Markets | | & Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income (expense) | $ | 170 |
| | $ | 171 |
| | $ | 113 |
| | $ | 79 |
| | $ | (63 | ) | | $ | 470 |
|
| Provision for credit losses | (2 | ) | | 21 |
| | (9 | ) | | 11 |
| | (5 | ) | | 16 |
|
| Noninterest income | 83 |
| | 41 |
| | 32 |
| | 100 |
| | 15 |
| | 271 |
|
| Noninterest expenses | 150 |
| | 96 |
| | 94 |
| | 106 |
| | 11 |
| | 457 |
|
| Provision (benefit) for income taxes | 37 |
| | 36 |
| | 22 |
| | 16 |
| | (45 | ) | | 66 |
|
| Net income (loss) | $ | 68 |
| | $ | 59 |
| | $ | 38 |
| | $ | 46 |
| | $ | (9 | ) | | $ | 202 |
|
| Net credit-related charge-offs (recoveries) | $ | (3 | ) | | $ | 10 |
| | $ | 22 |
| | $ | 4 |
| | $ | — |
| | $ | 33 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 13,254 |
| | $ | 17,958 |
| | $ | 10,555 |
| | $ | 8,255 |
| | $ | 21,797 |
| | $ | 71,819 |
|
| Loans | 12,586 |
| | 17,680 |
| | 10,111 |
| | 7,523 |
| | — |
| | 47,900 |
|
| Deposits | 22,150 |
| | 17,243 |
| | 10,113 |
| | 7,915 |
| | 358 |
| | 57,779 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (a) | 1.20 | % | | 1.32 | % | | 1.36 | % | | 2.13 | % | | N/M |
| | 1.14 | % |
| Efficiency ratio (b) | 59.36 |
| | 45.22 |
| | 64.78 |
| | 59.31 |
| | N/M |
| | 61.63 |
|
| | | | | | | | | | | | |
| | | | | | | | Other | | Finance | | |
| Three Months Ended June 30, 2016 | Michigan | | California | | Texas | | Markets | | & Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income (expense) | $ | 164 |
| | $ | 176 |
| | $ | 117 |
| | $ | 88 |
| | $ | (100 | ) | | $ | 445 |
|
| Provision for credit losses | 3 |
| | 18 |
| | 32 |
| | (3 | ) | | (1 | ) | | 49 |
|
| Noninterest income | 81 |
| | 38 |
| | 32 |
| | 102 |
| | 15 |
| | 268 |
|
| Noninterest expenses | 159 |
| | 120 |
| | 113 |
| | 115 |
| | 11 |
| | 518 |
|
| Provision (benefit) for income taxes | 28 |
| | 27 |
| | 2 |
| | 22 |
| | (37 | ) | | 42 |
|
| Net income (loss) | $ | 55 |
| | $ | 49 |
| | $ | 2 |
| | $ | 56 |
| | $ | (58 | ) | | $ | 104 |
|
| Net credit-related charge-offs (recoveries) | $ | — |
| | $ | 17 |
| | $ | 31 |
| | $ | (1 | ) | | $ | — |
| | $ | 47 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 13,142 |
| | $ | 18,155 |
| | $ | 11,287 |
| | $ | 9,172 |
| | $ | 18,912 |
| | $ | 70,668 |
|
| Loans | 12,502 |
| | 17,865 |
| | 10,841 |
| | 8,261 |
| | — |
| | 49,469 |
|
| Deposits | 21,519 |
| | 16,967 |
| | 10,052 |
| | 7,662 |
| | 321 |
| | 56,521 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (a) | 1.00 | % | | 1.08 | % | | 0.07 | % | | 2.45 | % | | N/M |
| | 0.59 | % |
| Efficiency ratio (b) | 64.65 |
| | 55.73 |
| | 75.89 |
| | 60.77 |
| | N/M |
| | 72.43 |
|
| |
| (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 (fully taxable equivalent basis) and noninterest income excluding net securities gains (losses). |
N/M - Not Meaningful
|
| | | | | |
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | |
| | | | | | |
Comerica believes these are meaningful measures, because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate the adequacy of common equity and our performance trends. Comerica believes adjusted earnings per share provides a greater understanding of ongoing operations and enhances comparability of results with prior periods. Tangible common equity is used by Comerica to measure the quality of capital and the return relative to balance sheet risk.
|
| | | | | | | | | | | | | | | |
| | June 30, | March 31, | December 31, | September 30, | June 30, |
| (dollar amounts in millions) | 2017 | 2017 | 2016 | 2016 | 2016 |
| | | | | | |
| Tangible Common Equity Ratio: | | | | | |
| Common shareholders' equity | $ | 7,985 |
| $ | 7,930 |
| $ | 7,796 |
| $ | 7,727 |
| $ | 7,694 |
|
| Less: | | | | | |
| Goodwill | 635 |
| 635 |
| 635 |
| 635 |
| 635 |
|
| Other intangible assets | 9 |
| 10 |
| 10 |
| 11 |
| 12 |
|
| Tangible common equity | $ | 7,341 |
| $ | 7,285 |
| $ | 7,151 |
| $ | 7,081 |
| $ | 7,047 |
|
| | | | | | |
| Total assets | $ | 71,447 |
| $ | 72,976 |
| $ | 72,978 |
| $ | 74,124 |
| $ | 71,280 |
|
| Less: | | | | | |
| Goodwill | 635 |
| 635 |
| 635 |
| 635 |
| 635 |
|
| Other intangible assets | 9 |
| 10 |
| 10 |
| 11 |
| 12 |
|
| Tangible assets | $ | 70,803 |
| $ | 72,331 |
| $ | 72,333 |
| $ | 73,478 |
| $ | 70,633 |
|
| | | | | | |
| Common equity ratio | 11.18 | % | 10.87 | % | 10.68 | % | 10.42 | % | 10.79 | % |
| Tangible common equity ratio | 10.37 |
| 10.07 |
| 9.89 |
| 9.64 |
| 9.98 |
|
| | | | | | |
| Tangible Common Equity per Share of Common Stock: | | | | | |
| Common shareholders' equity | $ | 7,985 |
| $ | 7,930 |
| $ | 7,796 |
| $ | 7,727 |
| $ | 7,694 |
|
| Tangible common equity | 7,341 |
| 7,285 |
| 7,151 |
| 7,081 |
| 7,047 |
|
| | | | | | |
| Shares of common stock outstanding (in millions) | 176 |
| 177 |
| 175 |
| 172 |
| 174 |
|
| | | | | | |
| Common shareholders' equity per share of common stock | $ | 45.39 |
| $ | 44.69 |
| $ | 44.47 |
| $ | 44.91 |
| $ | 44.24 |
|
| Tangible common equity per share of common stock | 41.73 |
| 41.05 |
| 40.79 |
| 41.15 |
| 40.52 |
|
The tangible common equity ratio removes 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.
|
| | | | | | | | | |
| | Three Months Ended |
| (dollar amounts in millions, except per share data) | June 30, 2017 | March 31, 2017 | June 30, 2016 |
| | | | |
| Adjusted Earnings per Common Share: | | | |
| Net income available to common shareholders | $ | 202 |
| $ | 200 |
| $ | 103 |
|
| Add: | | | |
| Restructuring charges, net of tax | 9 |
| 7 |
| 34 |
|
| Deduct: | | | |
| Tax benefits from employee stock transactions | 5 |
| 24 |
| — |
|
| Adjusted net income available to common shareholders | $ | 206 |
| $ | 183 |
| $ | 137 |
|
| Diluted average common shares | 179 |
| 180 |
| 177 |
|
| Diluted earnings per common share: | | | |
| Reported | $ | 1.13 |
| $ | 1.11 |
| $ | 0.58 |
|
| Adjusted | 1.15 |
| 1.02 |
| 0.77 |
|
Adjusted earnings per share removes the after tax effect of restructuring charges and the tax benefits from employee stock transactions from net income available to common shareholders.
