COMERICA REPORTS THIRD QUARTER 2017 NET INCOME OF $226 MILLION - 1
COMERICA REPORTS THIRD QUARTER 2017 NET INCOME OF $226 MILLION, OR $1.26 PER SHARE
Continued Net Interest Income Expansion, Strong Credit Quality and Tight Expense Management
Earnings Per Share Increased 12 Percent Compared to Second Quarter 2017
and 50 Percent Compared to Third Quarter 2016
Growth in Efficiency and Revenue Initiative
With Additional $35 Million Identified, Benefits of $305 Million Expected to be Included in 2019 Results
DALLAS/October 17, 2017 -- Comerica Incorporated (NYSE: CMA) today reported third quarter 2017 net income of $226 million, compared to $203 million for the second quarter 2017 and $149 million for the third quarter 2016. Earnings per diluted share were $1.26 for third quarter 2017 compared to $1.13 for second quarter 2017 and 84 cents for third quarter 2016. Third quarter 2017 results included interest recoveries totaling $17 million (6 cents per share, after tax) compared to $4 million (1 cent per share, after tax) for second quarter 2017. Excluding restructuring charges and tax benefits from employee stock transactions, adjusted earnings per diluted share1 were $1.27 for third quarter 2017 compared to $1.15 for second quarter 2017 and 91 cents for third quarter 2016. |
| | | | | | | | | | | |
| (dollar amounts in millions, except per share data) | 3rd Qtr '17 | 2nd Qtr '17 | 3rd Qtr '16 |
| Net interest income | $ | 546 |
| | $ | 500 |
| | $ | 450 |
|
| Provision for credit losses | 24 |
| | 17 |
| | 16 |
|
| Noninterest income | 275 |
| | 276 |
| | 272 |
|
| Noninterest expenses (a) | 463 |
| | 457 |
| | 493 |
|
| Pre-tax income | 334 |
| | 302 |
| | 213 |
|
| Provision for income taxes | 108 |
| (b) | 99 |
| (b) | 64 |
|
| Net income | $ | 226 |
| | $ | 203 |
| | $ | 149 |
|
| | | | | | |
| Net income attributable to common shares | $ | 224 |
| | $ | 202 |
| | $ | 148 |
|
| | | | | | |
| Diluted income per common share | 1.26 |
| | 1.13 |
| | 0.84 |
|
| | | | | | |
| Average diluted shares (in millions) | 177 |
| | 179 |
| | 176 |
|
| | | | | | |
| Return on average assets (ROA) | 1.25 | % | | 1.14 | % | | 0.82 | % |
| Return on average common shareholders' equity (ROE) | 11.17 |
| | 10.26 |
| | 7.76 |
|
| Net interest margin | 3.29 |
| | 3.03 |
| | 2.66 |
|
| Efficiency ratio (c) | 56.24 |
| | 58.63 |
| | 68.15 |
|
| | | | | | |
| Common equity Tier 1 capital ratio (d) | 11.51 |
| | 11.51 |
| | 10.69 |
|
| Common equity ratio | 11.16 |
| | 11.18 |
| | 10.42 |
|
| Tangible common equity ratio (e) | 10.35 |
| | 10.37 |
| | 9.64 |
|
| |
| (a) | Included restructuring charge of $7 million (2 cents per share, after tax) in the third quarter 2017, $14 million (5 cents per share, after tax) in the second quarter 2017 and $20 million (7 cents per share, after tax) in the third quarter 2016. |
| |
| (b) | Included tax benefits of $2 million (1 cent per share) and $5 million (3 cents per share) from employee stock transactions for the third and second 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) | September 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 THIRD QUARTER 2017 NET INCOME OF $226 MILLION - 2
Commenting on third quarter results, Comerica's Chairman and Chief Executive Officer Ralph W. Babb, Jr. said, “Revenue growth was solid, increasing 6 percent quarter over quarter, with help from higher interest rates as we continue to prudently manage loan and deposit pricing. Credit quality was strong, and we benefited from significant interest recoveries. In addition, over the past year our GEAR Up initiative has lowered expenses and increased fee income. This has resulted in substantial improvement in our returns, with an ROE of 11.17 percent and an ROA of 1.25 percent, as well as an efficiency ratio of 56 percent for the third quarter.
“We have made significant progress and remain on track to achieve our GEAR Up targets. And we recently announced we have identified $35 million of additional benefits in pretax income in 2019 and beyond, with about half from revenue and half from expense opportunities. This includes the full run rate of initiatives that are expected to be completed later next year as well as a few additional identified opportunities that should increase capacity, drive revenue growth, reduce costs and improve efficiency. Therefore, we now expect our 2019 results will include a benefit of $305 million as a result of our GEAR Up initiative.”
Third Quarter 2017 Compared to Second Quarter 2017
Average total loans unchanged at $48.7 billion and loan yields increased to 4.09 percent.
| |
| • | Average loans primarily reflected seasonality, with a decrease in National Dealer Services and an increase in Mortgage Banker Finance. |
| |
| • | Period-end total loans decreased $199 million to $49.2 billion. |
| |
| • | Loan yields increased 35 basis points, primarily reflecting the benefit from higher short-term rates (+19 basis points) and elevated interest recoveries (+11 basis points), as well as the impact of a second quarter negative residual value adjustment to the leasing portfolio that was not repeated (+3 basis points). |
Average total deposits decreased $635 million to $56.5 billion and deposit rates increased 1 basis point.
| |
| • | Noninterest-bearing deposits increased $316 million and interest-bearing deposits decreased $951 million. |
| |
| • | Average total deposits decreased primarily in Corporate Banking and Commercial Real Estate, partially offset by an increase in general Middle Market. |
| |
| • | Period-end total deposits increased $1.0 billion to $57.8 billion. |
Net interest income increased $46 million to $546 million.
| |
| • | Primarily due to a net benefit from higher short-term rates, significantly higher interest recoveries and one additional day in the quarter. |
| |
| • | The net interest margin increased 26 basis points to 3.29 percent. |
Provision for credit losses increased $7 million to $24 million.
| |
| • | Net credit-related charge-offs were $25 million, or 0.21 percent of average loans. Energy net credit-related charge-offs were $9 million. |
| |
| • | Total criticized loans declined $58 million, including a $142 million decline in criticized Energy loans. |
| |
| • | The allowance for loan losses was $712 million, or 1.45 percent of total loans, reflecting improvement in the Energy portfolio offset by qualitative reserves for potential losses, including loans impacted by hurricanes. |
Noninterest income decreased $1 million to $275 million.
| |
| • | Primarily reflected increases of $5 million in card fees and $3 million in bank-owned life insurance, more than offset by decreases of $3 million in fiduciary income, $3 million in warrant income and $2 million in customer derivative income. |
Noninterest expenses increased $6 million to $463 million.
| |
| • | Primarily reflected increases of $5 million in temporary contract labor, $5 million in technology costs and $4 million in outside processing fees tied to revenue-generating activities, partially offset by a $7 million decrease in restructuring charges. |
Provision for income taxes increased $9 million to $108 million.
| |
| • | Primarily due to the tax impact from the $32 million increase in pretax earnings and a $3 million decrease in tax benefits from employee stock transactions. |
COMERICA REPORTS THIRD QUARTER 2017 NET INCOME OF $226 MILLION - 3
Capital position remained solid at September 30, 2017.
| |
| • | Returned a total of $192 million to shareholders, including dividends and the repurchase of $139 million of common stock (2.0 million shares) under the equity repurchase program. |
| |
| • | Dividend paid on October 1, 2017 increased 15 percent to 30 cents per share. |
Third Quarter 2017 Compared to Third Quarter 2016
Average total loans decreased $543 million.
| |
| • | Primarily reflecting decreases in Mortgage Banker Finance, Energy and Commercial Real Estate, partially offset by increases in National Dealer Services, Private Banking and Technology and Life Sciences. |
Average total deposits decreased $1.6 billion.
| |
| • | Reflected an increase of $603 million in noninterest-bearing deposits and a decrease of $2.2 billion in interest-bearing deposits. |
| |
| • | Average total deposits primarily reflected decreases in Corporate Banking and Technology and Life Sciences. |
Net interest income increased $96 million.
| |
| • | Primarily due to a net benefit from higher short-term rates and significantly higher interest recoveries. |
Provision for credit losses increased $8 million.
| |
| • | The allowance for loan losses decreased $15 million, primarily reflecting improvements in the Energy portfolio and lower average loan balances, partially offset by qualitative reserves for potential losses, including loans impacted by hurricanes. |
| |
| • | Net credit-related charge-offs increased $9 million, primarily as a result of a $7 million decrease in recoveries from the third quarter 2016. |
Noninterest income increased $3 million.
| |
| • | Primarily reflected an increase of $9 million in card fees, partially offset by a decrease of $5 million in commercial lending fees primarily due to lower syndication agent fees. |
Noninterest expenses decreased $30 million.
| |
| • | Excluding restructuring charges, noninterest expenses decreased $17 million. This primarily reflected decreases of $22 million in salaries and benefits, largely driven by the GEAR Up initiative, and $4 million in consultant fees, partially offset by increases of $6 million in outside processing fees tied to revenue-generating activities and $4 million in technology costs. |
Net Interest Income
|
| | | | | | | | | | | |
| (dollar amounts in millions) | 3rd Qtr '17 | | 2nd Qtr '17 | | 3rd Qtr '16 |
| Net interest income | $ | 546 |
| | $ | 500 |
| | $ | 450 |
|
| | | | | | |
| Net interest margin | 3.29 | % | | 3.03 | % | | 2.66 | % |
| | | | | | |
| Selected average balances: | | | | | |
| Total earning assets | $ | 66,084 |
| | $ | 66,310 |
| | $ | 67,648 |
|
| Total loans | 48,663 |
| | 48,723 |
| | 49,206 |
|
| Total investment securities | 12,244 |
| | 12,232 |
| | 12,373 |
|
| Federal Reserve Bank deposits | 4,889 |
| | 5,043 |
| | 5,781 |
|
| | | | | | |
| | | | | | |
| Total deposits | 56,493 |
| | 57,128 |
| | 58,065 |
|
| Total noninterest-bearing deposits | 31,057 |
| | 30,741 |
| | 30,454 |
|
| Medium- and long-term debt | 4,936 |
| | 5,161 |
| | 5,907 |
|
COMERICA REPORTS THIRD QUARTER 2017 NET INCOME OF $226 MILLION - 4
Net interest income increased $46 million to $546 million in the third quarter 2017, compared to the second quarter 2017.
| |
| • | Interest on loans increased $47 million, primarily reflecting the benefit from higher short-term rates (+$23 million), the impact of higher interest recoveries (+$13 million), one additional day in the quarter (+$5 million), a second quarter negative residual value adjustment to assets in the leasing portfolio that was not repeated (+4 million) and other portfolio dynamics (+$2 million). |
| |
| • | Interest on short-term investments increased $3 million, primarily due to increases in the Federal Funds rate. |
| |
| • | Interest expense on deposits increased $2 million. |
| |
| • | Interest expense on debt increased $2 million, primarily due to higher costs on variable-rate debt tied to LIBOR and an increase in average short-term borrowings. |
The net interest margin increased 26 basis points to 3.29 percent compared to the second quarter 2017, primarily as a result of higher loan yields, reflecting the benefit from higher short-term rates (+14 basis points) and interest recoveries (+8 basis points), as well as the impact of the second quarter negative residual value adjustments to the leasing portfolio that was not repeated (+2 basis points). The benefit from a higher yield on Federal Reserve Bank deposits (+2 basis points) was offset by higher deposit costs (-1 basis point) and variable-rate debt costs (-1 basis point).
Credit Quality
"Credit quality continued to be strong in the third quarter, with declines in criticized and nonaccrual loans, as well as net charge-offs of only 21 basis points," said Babb. "Our total reserve remained stable, resulting in an allowance to loan ratio of 1.45 percent and a provision of just $24 million. As far as the hurricanes in Texas and Florida, the credit impact is expected to be manageable and is reflected in our loan loss reserve. Energy loans at quarter-end were about $2 billion, or 4 percent of our total loans, and we expect balances will remain at approximately this level. Energy criticized and nonaccrual loans, as well as gross charge-offs, all decreased again in the third quarter."
|
| | | | | | | | | | | |
| (dollar amounts in millions) | 3rd Qtr '17 | | 2nd Qtr '17 | | 3rd Qtr '16 |
| Credit-related charge-offs | $ | 37 |
| | $ | 39 |
| | $ | 35 |
|
| Recoveries | 12 |
| | 21 |
| | 19 |
|
| Net credit-related charge-offs | 25 |
| | 18 |
| | 16 |
|
| Net credit-related charge-offs/Average total loans | 0.21 | % | | 0.15 | % | | 0.13 | % |
| | | | | | |
| Provision for credit losses | $ | 24 |
| | $ | 17 |
| | $ | 16 |
|
| | | | | | |
| Nonperforming loans | 452 |
| | 501 |
| | 639 |
|
| Nonperforming assets (NPAs) | 458 |
| | 519 |
| | 660 |
|
| NPAs/Total loans and foreclosed property | 0.93 | % | | 1.05 | % | | 1.34 | % |
| | | | | | |
| Loans past due 90 days or more and still accruing | $ | 12 |
| | $ | 30 |
| | $ | 48 |
|
| | | | | | |
| Allowance for loan losses | 712 |
| | 705 |
| | 727 |
|
| Allowance for credit losses on lending-related commitments (a) | 41 |
| | 48 |
| | 45 |
|
| Total allowance for credit losses | 753 |
| | 753 |
| | 772 |
|
| | | | | | |
| Allowance for loan losses/Period-end total loans | 1.45 | % | | 1.43 | % | | 1.48 | % |
| Allowance for loan losses/Nonperforming loans | 157 |
| | 141 |
| | 114 |
|
| |
| (a) | Included in "Accrued expenses and other liabilities" on the consolidated balance sheets. |
COMERICA REPORTS THIRD QUARTER 2017 NET INCOME OF $226 MILLION - 5
| |
| • | Energy business line loans were $2.1 billion, or 4 percent of total loans, at September 30, 2017. |
| |
| ◦ | Criticized Energy loans decreased $142 million, or 18 percent, to $627 million. This included a $58 million, or 26 percent, decrease in nonaccrual Energy loans to $167 million. |
| |
| ◦ | Energy gross charge-offs decreased $3 million to $10 million, and recoveries decreased $10 million to $1 million, resulting in net charge-offs of $9 million, compared to $2 million in the second quarter 2017. |
| |
| • | The total allowance for credit losses remained stable, reflecting continued positive trends in the Energy portfolio, offset by qualitative reserves for potential losses, including loans impacted by the recent hurricanes. |
| |
| • | Net charge-offs increased $7 million, due to a $9 million decline in recoveries. Net charge-offs were 0.21 percent of average loans in the third quarter 2017, compared to 0.15 percent in the second quarter 2017. |
| |
| • | Criticized loans decreased $58 million to $2.4 billion at September 30, 2017, compared to $2.5 billion at June 30, 2017. Criticized loans are generally consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities. |
| |
| • | The third quarter allowance for loan losses included the results of the recently completed Shared National Credit exam. |
Fourth Quarter 2017 Outlook
For fourth quarter 2017 compared to third quarter 2017, management expects the following, assuming a continuation of the current economic and low rate environment as well as contributions from the GEAR Up initiative:
| |
| • | Growth in average loans of approximately 1 percent, reflecting a seasonal increase in National Dealer Services and increases in general Middle Market, Corporate Banking and Technology and Life Sciences, partially offset by a seasonal decrease in Mortgage Banker Finance. |
| |
| • | Net interest income to reflect lower nonaccrual interest recoveries, partially offset by loan growth. |
| |
| • | Provision for credit losses to reflect continued solid performance of the overall portfolio. |
| |
| ◦ | Provision of 20-25 basis points and net charge-offs to remain low. |
| |
| • | Noninterest income to benefit from the execution of GEAR Up opportunities driving increases in treasury management income, card fees and fiduciary income, offset by lower noncustomer-driven income such as bank-owned life insurance. |
| |
| • | Noninterest expenses impacted by restructuring expenses of about $15 million and expenses tied to revenue growth, such as outside processing expenses and advertising. |
| |
| • | Income tax expense to approximate 33 percent of pre-tax income, assuming no further tax impact from employee stock transactions. |
COMERICA REPORTS THIRD QUARTER 2017 NET INCOME OF $226 MILLION - 6
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 September 30, 2017. A discussion of business segment and geographic market year-to-date results will be included in Comerica's Third Quarter 2017 Form 10-Q.
Conference Call and Webcast
Comerica will host a conference call to review third quarter 2017 financial results at 7 a.m. CT Tuesday, October 17, 2017. A listen only option is available by calling (888) 303-6348 or (720) 239-9648 (event ID No. 8053965287). Participants may also access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 12423002). 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 THIRD QUARTER 2017 NET INCOME OF $226 MILLION - 7
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 | | Nine Months Ended |
| | September 30, | June 30, | September 30, | | September 30, |
| (in millions, except per share data) | 2017 | 2017 | 2016 | | 2017 | 2016 |
| PER COMMON SHARE AND COMMON STOCK DATA | | | | | | |
| Diluted net income | $ | 1.26 |
| $ | 1.13 |
| $ | 0.84 |
| | $ | 3.50 |
| $ | 1.76 |
|
| Cash dividends declared | 0.30 |
| 0.26 |
| 0.23 |
| | 0.79 |
| 0.66 |
|
| | | | | | | |
| Average diluted shares (in thousands) | 177,411 |
| 178,923 |
| 176,184 |
| | 178,899 |
| 176,476 |
|
| KEY RATIOS | | | | | | |
| Return on average common shareholders' equity | 11.17 | % | 10.26 | % | 7.76 | % | | 10.62 | % | 5.47 | % |
| Return on average assets | 1.25 |
| 1.14 |
| 0.82 |
| | 1.18 |
| 0.59 |
|
| Common equity tier 1 and tier 1 risk-based capital ratio (a) | 11.51 |
| 11.51 |
| 10.69 |
| | | |
| Total risk-based capital ratio (a) | 13.65 |
| 13.66 |
| 12.84 |
| | | |
| Leverage ratio (a) | 10.87 |
| 10.80 |
| 10.14 |
| | | |
| Common equity ratio | 11.16 |
| 11.18 |
| 10.42 |
| | | |
| Tangible common equity ratio (b) | 10.35 |
| 10.37 |
| 9.64 |
| | | |
| AVERAGE BALANCES | | | | | | |
| Commercial loans | $ | 30,603 |
| $ | 30,632 |
| $ | 31,132 |
| | $ | 30,313 |
| $ | 31,152 |
|
| Real estate construction loans | 2,933 |
| 2,910 |
| 2,646 |
| | 2,934 |
| 2,397 |
|
| Commercial mortgage loans | 8,977 |
| 9,012 |
| 9,012 |
| | 8,988 |
| 9,002 |
|
| Lease financing | 470 |
| 526 |
| 662 |
| | 522 |
| 706 |
|
| International loans | 1,156 |
| 1,139 |
| 1,349 |
| | 1,168 |
| 1,388 |
|
| Residential mortgage loans | 2,005 |
| 1,975 |
| 1,883 |
| | 1,981 |
| 1,885 |
|
| Consumer loans | 2,519 |
| 2,529 |
| 2,522 |
| | 2,525 |
| 2,493 |
|
| Total loans | 48,663 |
| 48,723 |
| 49,206 |
| | 48,431 |
| 49,023 |
|
| | | | | | | |
| Earning assets | 66,084 |
| 66,310 |
| 67,648 |
| | 66,346 |
| 65,796 |
|
| Total assets | 71,251 |
| 71,346 |
| 72,909 |
| | 71,470 |
| 70,942 |
|
| | | | | | | |
| Noninterest-bearing deposits | 31,057 |
| 30,741 |
| 30,454 |
| | 30,754 |
| 28,966 |
|
| Interest-bearing deposits | 25,436 |
| 26,387 |
| 27,611 |
| | 26,374 |
| 28,136 |
|
| Total deposits | 56,493 |
| 57,128 |
| 58,065 |
| | 57,128 |
| 57,102 |
|
| | | | | | | |
| Common shareholders' equity | 8,008 |
| 7,944 |
| 7,677 |
| | 7,939 |
| 7,654 |
|
| NET INTEREST INCOME | | | | | | |
| Net interest income | $ | 546 |
| $ | 500 |
| $ | 450 |
| | $ | 1,516 |
| $ | 1,342 |
|
| Net interest margin (fully taxable equivalent) | 3.29 | % | 3.03 | % | 2.66 | % | | 3.06 | % | 2.74 | % |
| CREDIT QUALITY | | | | | | |
| Total nonperforming assets | $ | 458 |
| $ | 519 |
| $ | 660 |
| | | |
| | | | | | | |
| Loans past due 90 days or more and still accruing | 12 |
| 30 |
| 48 |
| | | |
| | | | | | | |
| Net credit-related charge-offs | 25 |
| 18 |
| 16 |
| | $ | 76 |
| $ | 121 |
|
| | | | | | | |
| Allowance for loan losses | 712 |
| 705 |
| 727 |
| | | |
| Allowance for credit losses on lending-related commitments | 41 |
| 48 |
| 45 |
| | | |
| Total allowance for credit losses | 753 |
| 753 |
| 772 |
| | | |
| | | | | | | |
| Allowance for loan losses as a percentage of total loans | 1.45 | % | 1.43 | % | 1.48 | % | | | |
| Net credit-related charge-offs as a percentage of average total loans | 0.21 |
| 0.15 |
| 0.13 |
| | 0.21 | % | 0.33 | % |
| Nonperforming assets as a percentage of total loans and foreclosed property | 0.93 |
| 1.05 |
| 1.34 |
| | | |
| Allowance for loan losses as a percentage of total nonperforming loans | 157 |
| 141 |
| 114 |
| | | |
| |
| (a) | September 30, 2017 ratios are estimated. |
| |
| (b) | See Reconciliation of Non-GAAP Financial Measures. |
|
| | | | | | | | | | | | |
| CONSOLIDATED BALANCE SHEETS |
| Comerica Incorporated and Subsidiaries | | | | |
| | | | | |
| | September 30, | June 30, | December 31, | September 30, |
| (in millions, except share data) | 2017 | 2017 | 2016 | 2016 |
| | (unaudited) | (unaudited) | | (unaudited) |
| ASSETS | | | | |
| Cash and due from banks | $ | 1,351 |
| $ | 1,372 |
| $ | 1,249 |
| $ | 1,292 |
|
| | | | | |
| Interest-bearing deposits with banks | 4,853 |
| 4,259 |
| 5,969 |
| 6,748 |
|
| Other short-term investments | 92 |
| 90 |
| 92 |
| 92 |
|
| | | | | |
| Investment securities available-for-sale | 10,998 |
| 10,944 |
| 10,787 |
| 10,789 |
|
| Investment securities held-to-maturity | 1,344 |
| 1,430 |
| 1,582 |
| 1,695 |
|
| | | | | |
| Commercial loans | 31,062 |
| 31,449 |
| 30,994 |
| 31,152 |
|
| Real estate construction loans | 3,018 |
| 2,857 |
| 2,869 |
| 2,743 |
|
| Commercial mortgage loans | 8,985 |
| 8,974 |
| 8,931 |
| 9,013 |
|
| Lease financing | 475 |
| 472 |
| 572 |
| 648 |
|
| International loans | 1,159 |
| 1,145 |
| 1,258 |
| 1,303 |
|
| Residential mortgage loans | 1,999 |
| 1,976 |
| 1,942 |
| 1,874 |
|
| Consumer loans | 2,511 |
| 2,535 |
| 2,522 |
| 2,541 |
|
| Total loans | 49,209 |
| 49,408 |
| 49,088 |
| 49,274 |
|
| Less allowance for loan losses | (712 | ) | (705 | ) | (730 | ) | (727 | ) |
| Net loans | 48,497 |
| 48,703 |
| 48,358 |
| 48,547 |
|
| | | | | |
| Premises and equipment | 467 |
| 484 |
| 501 |
| 528 |
|
| Accrued income and other assets | 4,415 |
| 4,165 |
| 4,440 |
| 4,433 |
|
| Total assets | $ | 72,017 |
| $ | 71,447 |
| $ | 72,978 |
| $ | 74,124 |
|
| | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | |
| Noninterest-bearing deposits | $ | 32,391 |
| $ | 31,210 |
| $ | 31,540 |
| $ | 31,776 |
|
| | | | | |
| Money market and interest-bearing checking deposits | 20,869 |
| 20,952 |
| 22,556 |
| 22,436 |
|
| Savings deposits | 2,147 |
| 2,158 |
| 2,064 |
| 2,052 |
|
| Customer certificates of deposit | 2,342 |
| 2,438 |
| 2,806 |
| 2,967 |
|
| Foreign office time deposits | 70 |
| 23 |
| 19 |
| 30 |
|
| Total interest-bearing deposits | 25,428 |
| 25,571 |
| 27,445 |
| 27,485 |
|
| Total deposits | 57,819 |
| 56,781 |
| 58,985 |
| 59,261 |
|
| | | | | |
| Short-term borrowings | 509 |
| 541 |
| 25 |
| 12 |
|
| Accrued expenses and other liabilities | 1,018 |
| 997 |
| 1,012 |
| 1,234 |
|
| Medium- and long-term debt | 4,637 |
| 5,143 |
| 5,160 |
| 5,890 |
|
| Total liabilities | 63,983 |
| 63,462 |
| 65,182 |
| 66,397 |
|
| | | | | |
| 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 | 2,112 |
| 2,110 |
| 2,135 |
| 2,174 |
|
| Accumulated other comprehensive loss | (359 | ) | (361 | ) | (383 | ) | (292 | ) |
| Retained earnings | 7,746 |
| 7,580 |
| 7,331 |
| 7,262 |
|
| Less cost of common stock in treasury - 53,835,135 shares at 9/30/17, 52,252,023 shares at 6/30/17, 52,851,156 shares at 12/31/16 and 56,096,416 shares at 9/30/16 | (2,606 | ) | (2,485 | ) | (2,428 | ) | (2,558 | ) |
| Total shareholders' equity | 8,034 |
| 7,985 |
| 7,796 |
| 7,727 |
|
| Total liabilities and shareholders' equity | $ | 72,017 |
| $ | 71,447 |
| $ | 72,978 |
| $ | 74,124 |
|
|
| | | | | | | | | | | | | |
| 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) | 2017 | 2016 | | 2017 | 2016 |
| INTEREST INCOME | | | | | |
| Interest and fees on loans | $ | 500 |
| $ | 411 |
| | $ | 1,374 |
| $ | 1,223 |
|
| Interest on investment securities | 62 |
| 61 |
| | 186 |
| 185 |
|
| Interest on short-term investments | 17 |
| 8 |
| | 44 |
| 17 |
|
| Total interest income | 579 |
| 480 |
| | 1,604 |
| 1,425 |
|
| INTEREST EXPENSE | | | | | |
| Interest on deposits | 11 |
| 10 |
| | 29 |
| 30 |
|
| Interest on short-term borrowings | 3 |
| — |
| | 3 |
| — |
|
| Interest on medium- and long-term debt | 19 |
| 20 |
| | 56 |
| 53 |
|
| Total interest expense | 33 |
| 30 |
| | 88 |
| 83 |
|
| Net interest income | 546 |
| 450 |
| | 1,516 |
| 1,342 |
|
| Provision for credit losses | 24 |
| 16 |
| | 57 |
| 213 |
|
| Net interest income after provision for credit losses | 522 |
| 434 |
| | 1,459 |
| 1,129 |
|
| NONINTEREST INCOME | | | | | |
| Card fees | 85 |
| 76 |
| | 242 |
| 224 |
|
| Service charges on deposit accounts | 57 |
| 55 |
| | 172 |
| 165 |
|
| Fiduciary income | 48 |
| 47 |
| | 148 |
| 142 |
|
| Commercial lending fees | 21 |
| 26 |
| | 63 |
| 68 |
|
| Letter of credit fees | 11 |
| 12 |
| | 34 |
| 38 |
|
| Bank-owned life insurance | 12 |
| 12 |
| | 31 |
| 30 |
|
| Foreign exchange income | 11 |
| 10 |
| | 33 |
| 31 |
|
| Brokerage fees | 6 |
| 5 |
| | 17 |
| 14 |
|
| Net securities losses | (1 | ) | — |
| | (3 | ) | (3 | ) |
| Other noninterest income | 25 |
| 29 |
| | 85 |
| 75 |
|
| Total noninterest income | 275 |
| 272 |
| | 822 |
| 784 |
|
| NONINTEREST EXPENSES | | | | | |
| Salaries and benefits expense | 225 |
| 247 |
| | 677 |
| 742 |
|
| Outside processing fee expense | 92 |
| 86 |
| | 267 |
| 247 |
|
| Net occupancy expense | 38 |
| 40 |
| | 114 |
| 117 |
|
| Equipment expense | 12 |
| 13 |
| | 34 |
| 40 |
|
| Restructuring charges | 7 |
| 20 |
| | 32 |
| 73 |
|
| Software expense | 35 |
| 31 |
| | 95 |
| 90 |
|
| FDIC insurance expense | 13 |
| 14 |
| | 38 |
| 39 |
|
| Advertising expense | 8 |
| 5 |
| | 19 |
| 15 |
|
| Litigation-related expense | — |
| — |
| | (2 | ) | — |
|
| Other noninterest expenses | 33 |
| 37 |
| | 103 |
| 106 |
|
| Total noninterest expenses | 463 |
| 493 |
| | 1,377 |
| 1,469 |
|
| Income before income taxes | 334 |
| 213 |
| | 904 |
| 444 |
|
| Provision for income taxes | 108 |
| 64 |
| | 273 |
| 131 |
|
| NET INCOME | 226 |
| 149 |
| | 631 |
| 313 |
|
| Less income allocated to participating securities | 2 |
| 1 |
| | 5 |
| 3 |
|
| Net income attributable to common shares | $ | 224 |
| $ | 148 |
| | $ | 626 |
| $ | 310 |
|
| Earnings per common share: | | | | | |
| Basic | $ | 1.29 |
| $ | 0.87 |
| | $ | 3.58 |
| $ | 1.80 |
|
| Diluted | 1.26 |
| 0.84 |
| | 3.50 |
| 1.76 |
|
| | | | | | |
| Comprehensive income | 228 |
| 152 |
| | 655 |
| 450 |
|
| | | | | | |
| Cash dividends declared on common stock | 53 |
| 40 |
| | 141 |
| 115 |
|
| Cash dividends declared per common share | 0.30 |
| 0.23 |
| | 0.79 |
| 0.66 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | | | | | |
| | | | | | | | | | | | |
| | Third | Second | First | Fourth | Third | | Third Quarter 2017 Compared to: |
| | Quarter | Quarter | Quarter | Quarter | Quarter | | Second Quarter 2017 | | Third Quarter 2016 |
| (in millions, except per share data) | 2017 | 2017 | 2017 | 2016 | 2016 | | Amount | Percent | | Amount | Percent |
| INTEREST INCOME | | | | | | | | | | | |
| Interest and fees on loans | $ | 500 |
| $ | 453 |
| $ | 421 |
| $ | 412 |
| $ | 411 |
| | $ | 47 |
| 10 | % | | $ | 89 |
| 22 | % |
| Interest on investment securities | 62 |
| 62 |
| 62 |
| 62 |
| 61 |
| | — |
| — |
| | 1 |
| 3 |
|
| Interest on short-term investments | 17 |
| 14 |
| 13 |
| 10 |
| 8 |
| | 3 |
| 19 |
| | 9 |
| n/m |
|
| Total interest income | 579 |
| 529 |
| 496 |
| 484 |
| 480 |
| | 50 |
| 9 |
| | 99 |
| 21 |
|
| INTEREST EXPENSE | | | | | | | | | | | |
| Interest on deposits | 11 |
| 9 |
| 9 |
| 10 |
| 10 |
| | 2 |
| 9 |
| | 1 |
| 6 |
|
| Interest on short-term borrowings | 3 |
| — |
| — |
| — |
| — |
| | 3 |
| n/m |
| | 3 |
| n/m |
|
| Interest on medium- and long-term debt | 19 |
| 20 |
| 17 |
| 19 |
| 20 |
| | (1 | ) | (5 | ) | | (1 | ) | (1 | ) |
| Total interest expense | 33 |
| 29 |
| 26 |
| 29 |
| 30 |
| | 4 |
| 13 |
| | 3 |
| 9 |
|
| Net interest income | 546 |
| 500 |
| 470 |
| 455 |
| 450 |
| | 46 |
| 9 |
| | 96 |
| 21 |
|
| Provision for credit losses | 24 |
| 17 |
| 16 |
| 35 |
| 16 |
| | 7 |
| 44 |
| | 8 |
| 51 |
|
Net interest income after provision for credit losses | 522 |
| 483 |
| 454 |
| 420 |
| 434 |
| | 39 |
| 8 |
| | 88 |
| 20 |
|
| NONINTEREST INCOME | | | | | | | | | | | |
| Card fees | 85 |
| 80 |
| 77 |
| 79 |
| 76 |
| | 5 |
| 5 |
| | 9 |
| 11 |
|
| Service charges on deposit accounts | 57 |
| 57 |
| 58 |
| 54 |
| 55 |
| | — |
| — |
| | 2 |
| 3 |
|
| Fiduciary income | 48 |
| 51 |
| 49 |
| 48 |
| 47 |
| | (3 | ) | (3 | ) | | 1 |
| 3 |
|
| Commercial lending fees | 21 |
| 22 |
| 20 |
| 21 |
| 26 |
| | (1 | ) | (7 | ) | | (5 | ) | (16 | ) |
| Letter of credit fees | 11 |
| 11 |
| 12 |
| 12 |
| 12 |
| | — |
| — |
| | (1 | ) | (17 | ) |
| Bank-owned life insurance | 12 |
| 9 |
| 10 |
| 12 |
| 12 |
| | 3 |
| 34 |
| | — |
| — |
|
| Foreign exchange income | 11 |
| 11 |
| 11 |
| 11 |
| 10 |
| | — |
| — |
| | 1 |
| 5 |
|
| Brokerage fees | 6 |
| 6 |
| 5 |
| 5 |
| 5 |
| | — |
| — |
| | 1 |
| 15 |
|
| Net securities losses | (1 | ) | (2 | ) | — |
| (2 | ) | — |
| | 1 |
| 74 |
| | (1 | ) | n/m |
|
| Other noninterest income | 25 |
| 31 |
| 29 |
| 27 |
| 29 |
| | (6 | ) | (17 | ) | | (4 | ) | (12 | ) |
| Total noninterest income | 275 |
| 276 |
| 271 |
| 267 |
| 272 |
| | (1 | ) | — |
| | 3 |
| 1 |
|
| NONINTEREST EXPENSES | | | | | | | | | | | |
| Salaries and benefits expense | 225 |
| 219 |
| 233 |
| 219 |
| 247 |
| | 6 |
| 3 |
| | (22 | ) | (9 | ) |
| Outside processing fee expense | 92 |
| 88 |
| 87 |
| 89 |
| 86 |
| | 4 |
| 4 |
| | 6 |
| 7 |
|
| Net occupancy expense | 38 |
| 38 |
| 38 |
| 40 |
| 40 |
| | — |
| — |
| | (2 | ) | (5 | ) |
| Equipment expense | 12 |
| 11 |
| 11 |
| 13 |
| 13 |
| | 1 |
| — |
| | (1 | ) | (15 | ) |
| Restructuring charges | 7 |
| 14 |
| 11 |
| 20 |
| 20 |
| | (7 | ) | (48 | ) | | (13 | ) | (62 | ) |
| Software expense | 35 |
| 31 |
| 29 |
| 29 |
| 31 |
| | 4 |
| 17 |
| | 4 |
| 15 |
|
| FDIC insurance expense | 13 |
| 12 |
| 13 |
| 15 |
| 14 |
| | 1 |
| 5 |
| | (1 | ) | (12 | ) |
| Advertising expense | 8 |
| 7 |
| 4 |
| 6 |
| 5 |
| | 1 |
| 5 |
| | 3 |
| 51 |
|
| Litigation-related expense | — |
| — |
| (2 | ) | 1 |
| — |
| | — |
| — |
| | — |
| — |
|
| Other noninterest expenses | 33 |
| 37 |
| 33 |
| 29 |
| 37 |
| | (4 | ) | (7 | ) | | (4 | ) | (6 | ) |
| Total noninterest expenses | 463 |
| 457 |
| 457 |
| 461 |
| 493 |
| | 6 |
| 1 |
| | (30 | ) | (6 | ) |
| Income before income taxes | 334 |
| 302 |
| 268 |
| 226 |
| 213 |
| | 32 |
| 10 |
| | 121 |
| 57 |
|
| Provision for income taxes | 108 |
| 99 |
| 66 |
| 62 |
| 64 |
| | 9 |
| 9 |
| | 44 |
| 72 |
|
| NET INCOME | 226 |
| 203 |
| 202 |
| 164 |
| 149 |
| | 23 |
| 11 |
| | 77 |
| 51 |
|
| Less income allocated to participating securities | 2 |
| 1 |
| 2 |
| 1 |
| 1 |
| | 1 |
| 10 |
| | 1 |
| 12 |
|
| Net income attributable to common shares | $ | 224 |
| $ | 202 |
| $ | 200 |
| $ | 163 |
| $ | 148 |
| | $ | 22 |
| 11 | % | | $ | 76 |
| 51 | % |
| Earnings per common share: | | | | | | | | | | | |
| Basic | $ | 1.29 |
| $ | 1.15 |
| $ | 1.15 |
| $ | 0.95 |
| $ | 0.87 |
| | $ | 0.14 |
| 12 | % | | $ | 0.42 |
| 48 | % |
| Diluted | 1.26 |
| 1.13 |
| 1.11 |
| 0.92 |
| 0.84 |
| | 0.13 |
| 12 |
| | 0.42 |
| 50 |
|
| | | | | | | |
| | | | |
| Comprehensive income | 228 |
| 221 |
| 206 |
| 73 |
| 152 |
| | 7 |
| 3 |
| | 76 |
| 50 |
|
| | | | | | | | | | | | |
| Cash dividends declared on common stock | 53 |
| 46 |
| 42 |
| 40 |
| 40 |
| | 7 |
| 14 |
| | 13 |
| 37 |
|
| Cash dividends declared per common share | 0.30 |
| 0.26 |
| 0.23 |
| 0.23 |
| 0.23 |
| | 0.04 |
| 15 |
| | 0.07 |
| 30 |
|
n/m - not meaningful
|
| | | | | | | | | | | | | | | | |
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
|
| Comerica Incorporated and Subsidiaries | | | | | | |
| | | | | | | |
| | 2017 | | 2016 |
| (in millions) | 3rd Qtr | 2nd Qtr | 1st Qtr | | 4th Qtr | 3rd Qtr |
| | | | | | | |
| Balance at beginning of period | $ | 705 |
| $ | 708 |
| $ | 730 |
| | $ | 727 |
| $ | 729 |
|
| | | | | | | |
| Loan charge-offs: | | | | | | |
| Commercial | 35 |
| 34 |
| 38 |
| | 37 |
| 24 |
|
| Commercial mortgage | — |
| 1 |
| 1 |
| | 1 |
| 2 |
|
| Lease financing | 1 |
| — |
| — |
| | — |
| — |
|
| International | — |
| 2 |
| 3 |
| | 8 |
| 8 |
|
| Consumer | 1 |
| 2 |
| 2 |
| | 2 |
| 1 |
|
| Total loan charge-offs | 37 |
| 39 |
| 44 |
| | 48 |
| 35 |
|
| | | | | | | |
| Recoveries on loans previously charged-off: | | | | | | |
| Commercial | 6 |
| 17 |
| 7 |
| | 7 |
| 15 |
|
| Real estate construction | 1 |
| — |
| — |
| | — |
| — |
|
| Commercial mortgage | 2 |
| 3 |
| 2 |
| | 3 |
| 3 |
|
| International | 1 |
| — |
| — |
| | — |
| — |
|
| Residential mortgage | — |
| — |
| — |
| | 1 |
| — |
|
| Consumer | 2 |
| 1 |
| 2 |
| | 1 |
| 1 |
|
| Total recoveries | 12 |
| 21 |
| 11 |
| | 12 |
| 19 |
|
| Net loan charge-offs | 25 |
| 18 |
| 33 |
| | 36 |
| 16 |
|
| Provision for loan losses | 31 |
| 15 |
| 11 |
| | 39 |
| 14 |
|
| Foreign currency translation adjustment | 1 |
| — |
| — |
| | — |
| — |
|
| Balance at end of period | $ | 712 |
| $ | 705 |
| $ | 708 |
| | $ | 730 |
| $ | 727 |
|
| | | | | | | |
| Allowance for loan losses as a percentage of total loans | 1.45 | % | 1.43 | % | 1.47 | % | | 1.49 | % | 1.48 | % |
| | | | | | | |
| Net loan charge-offs as a percentage of average total loans | 0.21 |
| 0.15 |
| 0.28 |
| | 0.29 |
| 0.13 |
|
|
| | | | | | | | | | | | | | | | |
| ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | |
| | | | | | | |
| | 2017 | | 2016 |
| (in millions) | 3rd Qtr | 2nd Qtr | 1st Qtr | | 4th Qtr | 3rd Qtr |
| | | | | | | |
| Balance at beginning of period | $ | 48 |
| $ | 46 |
| $ | 41 |
| | $ | 45 |
| $ | 43 |
|
| Provision for credit losses on lending-related commitments | (7 | ) | 2 |
| 5 |
| | (4 | ) | 2 |
|
| Balance at end of period | $ | 41 |
| $ | 48 |
| $ | 46 |
| | $ | 41 |
| $ | 45 |
|
| | | | | | | |
|
| | | | | | | | | | | | | | | | |
| NONPERFORMING ASSETS (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | |
| | | | | | | |
| | 2017 | | 2016 |
| (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 | $ | 345 |
| $ | 379 |
| $ | 400 |
| | $ | 445 |
| $ | 508 |
|
| Commercial mortgage | 35 |
| 41 |
| 41 |
| | 46 |
| 44 |
|
| Lease financing | 8 |
| 8 |
| 6 |
| | 6 |
| 6 |
|
| International | 6 |
| 6 |
| 8 |
| | 14 |
| 19 |
|
| Total nonaccrual business loans | 394 |
| 434 |
| 455 |
| | 511 |
| 577 |
|
| Retail loans: | | | | | | |
| Residential mortgage | 28 |
| 36 |
| 39 |
| | 39 |
| 23 |
|
| Consumer: | | | | | | |
| Home equity | 22 |
| 23 |
| 26 |
| | 28 |
| 27 |
|
| Other consumer | — |
| — |
| 1 |
| | 4 |
| 4 |
|
| Total consumer | 22 |
| 23 |
| 27 |
| | 32 |
| 31 |
|
| Total nonaccrual retail loans | 50 |
| 59 |
| 66 |
| | 71 |
| 54 |
|
| Total nonaccrual loans | 444 |
| 493 |
| 521 |
| | 582 |
| 631 |
|
| Reduced-rate loans | 8 |
| 8 |
| 8 |
| | 8 |
| 8 |
|
| Total nonperforming loans | 452 |
| 501 |
| 529 |
| | 590 |
| 639 |
|
| Foreclosed property | 6 |
| 18 |
| 16 |
| | 17 |
| 21 |
|
| Total nonperforming assets | $ | 458 |
| $ | 519 |
| $ | 545 |
| | $ | 607 |
| $ | 660 |
|
| | | | | | | |
| Nonperforming loans as a percentage of total loans | 0.92 | % | 1.01 | % | 1.10 | % | | 1.20 | % | 1.30 | % |
Nonperforming assets as a percentage of total loans and foreclosed property | 0.93 |
| 1.05 |
| 1.13 |
| | 1.24 |
| 1.34 |
|
Allowance for loan losses as a percentage of total nonperforming loans | 157 |
| 141 |
| 134 |
| | 124 |
| 114 |
|
| Loans past due 90 days or more and still accruing | $ | 12 |
| $ | 30 |
| $ | 26 |
| | $ | 19 |
| $ | 48 |
|
| | | | | | | |
| ANALYSIS OF NONACCRUAL LOANS | | | | | | |
| Nonaccrual loans at beginning of period | $ | 493 |
| $ | 521 |
| $ | 582 |
| | $ | 631 |
| $ | 605 |
|
| Loans transferred to nonaccrual (a) | 66 |
| 54 |
| 104 |
| | 60 |
| 105 |
|
| Nonaccrual business loan gross charge-offs (b) | (36 | ) | (37 | ) | (42 | ) | | (46 | ) | (34 | ) |
| Nonaccrual business loans sold | (10 | ) | — |
| (8 | ) | | (10 | ) | (2 | ) |
| Payments/Other (c) | (69 | ) | (45 | ) | (115 | ) | | (53 | ) | (43 | ) |
| Nonaccrual loans at end of period | $ | 444 |
| $ | 493 |
| $ | 521 |
| | $ | 582 |
| $ | 631 |
|
(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 | $ | 36 |
| $ | 37 |
| $ | 42 |
| | $ | 46 |
| $ | 34 |
|
| Consumer and residential mortgage loans | 1 |
| 2 |
| 2 |
| | 2 |
| 1 |
|
| Total gross loan charge-offs | $ | 37 |
| $ | 39 |
| $ | 44 |
| | $ | 48 |
| $ | 35 |
|
| (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 | | | | | | | |
| | | | | | | | |
| | Nine Months Ended |
| | September 30, 2017 | | September 30, 2016 |
| | Average | | Average | | Average | | Average |
| (dollar amounts in millions) | Balance | Interest | Rate (a) | | Balance | Interest | Rate (a) |
| | | | | | | | |
| Commercial loans | $ | 30,313 |
| $ | 851 |
| 3.77 | % | | $ | 31,152 |
| $ | 753 |
| 3.24 | % |
| Real estate construction loans | 2,934 |
| 90 |
| 4.09 |
| | 2,397 |
| 65 |
| 3.61 |
|
| Commercial mortgage loans | 8,988 |
| 265 |
| 3.94 |
| | 9,002 |
| 236 |
| 3.50 |
|
| Lease financing | 522 |
| 9 |
| 2.42 |
| | 706 |
| 15 |
| 2.86 |
|
| International loans | 1,168 |
| 35 |
| 3.96 |
| | 1,388 |
| 38 |
| 3.61 |
|
| Residential mortgage loans | 1,981 |
| 55 |
| 3.71 |
| | 1,885 |
| 54 |
| 3.81 |
|
| Consumer loans | 2,525 |
| 69 |
| 3.63 |
| | 2,493 |
| 62 |
| 3.34 |
|
| Total loans | 48,431 |
| 1,374 |
| 3.80 |
| | 49,023 |
| 1,223 |
| 3.34 |
|
| | | | | | | | |
| Mortgage-backed securities (b) | 9,335 |
| 150 |
| 2.16 |
| | 9,347 |
| 152 |
| 2.20 |
|
| Other investment securities | 2,890 |
| 36 |
| 1.66 |
| | 3,008 |
| 33 |
| 1.50 |
|
| Total investment securities (b) | 12,225 |
| 186 |
| 2.04 |
| | 12,355 |
| 185 |
| 2.03 |
|
| | | | | | | | |
| Interest-bearing deposits with banks | 5,598 |
| 44 |
| 1.03 |
| | 4,313 |
| 17 |
| 0.50 |
|
| Other short-term investments | 92 |
| — |
| 0.66 |
| | 105 |
| — |
| 0.65 |
|
| Total earning assets | 66,346 |
| 1,604 |
| 3.24 |
| | 65,796 |
| 1,425 |
| 2.90 |
|
| | | | | | | | |
| Cash and due from banks | 1,187 |
| | | | 1,098 |
| | |
| Allowance for loan losses | (728 | ) | | | | (726 | ) | | |
| Accrued income and other assets | 4,665 |
| | | | 4,774 |
| | |
| Total assets | $ | 71,470 |
| | | | $ | 70,942 |
| | |
| | | | | | | | |
| Money market and interest-bearing checking deposits | $ | 21,645 |
| 23 |
| 0.14 |
| | $ | 22,797 |
| 20 |
| 0.11 |
|
| Savings deposits | 2,127 |
| — |
| 0.02 |
| | 1,996 |
| — |
| 0.02 |
|
| Customer certificates of deposit | 2,543 |
| 6 |
| 0.37 |
| | 3,308 |
| 10 |
| 0.40 |
|
| Foreign office time deposits | 59 |
| — |
| 0.60 |
| | 35 |
| — |
| 0.34 |
|
| Total interest-bearing deposits | 26,374 |
| 29 |
| 0.15 |
| | 28,136 |
| 30 |
| 0.14 |
|
| | | | | | | | |
| Short-term borrowings | 331 |
| 3 |
| 1.14 |
| | 180 |
| — |
| 0.45 |
|
| Medium- and long-term debt | 5,084 |
| 56 |
| 1.46 |
| | 4,695 |
| 53 |
| 1.51 |
|
| Total interest-bearing sources | 31,789 |
| 88 |
| 0.37 |
| | 33,011 |
| 83 |
| 0.33 |
|
| | | | | | | | |
| Noninterest-bearing deposits | 30,754 |
| | | | 28,966 |
| | |
| Accrued expenses and other liabilities | 988 |
| | | | 1,311 |
| | |
| Total shareholders' equity | 7,939 |
| | | | 7,654 |
| | |
| Total liabilities and shareholders' equity | $ | 71,470 |
| | | | $ | 70,942 |
| | |
| | | | | | | | |
| Net interest income/rate spread | | $ | 1,516 |
| 2.87 |
| | | $ | 1,342 |
| 2.57 |
|
| | | | | | | | |
| Impact of net noninterest-bearing sources of funds | | | 0.19 |
| | | | 0.17 |
|
| Net interest margin (as a percentage of average earning assets) | | | 3.06 | % | | | | 2.74 | % |
| |
| (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 |
| | September 30, 2017 | | June 30, 2017 | | September 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 | $ | 30,603 |
| $ | 312 |
| 4.07 | % | | $ | 30,632 |
| $ | 283 |
| 3.72 | % | | $ | 31,132 |
| $ | 253 |
| 3.25 | % |
| Real estate construction loans | 2,933 |
| 33 |
| 4.36 |
| | 2,910 |
| 29 |
| 4.08 |
| | 2,646 |
| 24 |
| 3.57 |
|
| Commercial mortgage loans | 8,977 |
| 95 |
| 4.20 |
| | 9,012 |
| 87 |
| 3.88 |
| | 9,012 |
| 78 |
| 3.43 |
|
| Lease financing | 470 |
| 3 |
| 3.36 |
| | 526 |
| 1 |
| 0.61 |
| | 662 |
| 5 |
| 3.30 |
|
| International loans | 1,156 |
| 12 |
| 4.13 |
| | 1,139 |
| 12 |
| 3.99 |
| | 1,349 |
| 12 |
| 3.56 |
|
| Residential mortgage loans | 2,005 |
| 20 |
| 3.95 |
| | 1,975 |
| 18 |
| 3.61 |
| | 1,883 |
| 18 |
| 3.74 |
|
| Consumer loans | 2,519 |
| 25 |
| 3.84 |
| | 2,529 |
| 23 |
| 3.62 |
| | 2,522 |
| 21 |
| 3.31 |
|
| Total loans | 48,663 |
| 500 |
| 4.09 |
| | 48,723 |
| 453 |
| 3.74 |
| | 49,206 |
| 411 |
| 3.33 |
|
| | | | | | | | | | | | |
| Mortgage-backed securities (b) | 9,361 |
| 50 |
| 2.17 |
| | 9,336 |
| 50 |
| 2.17 |
| | 9,359 |
| 50 |
| 2.17 |
|
| Other investment securities | 2,883 |
| 12 |
| 1.69 |
| | 2,896 |
| 12 |
| 1.69 |
| | 3,014 |
| 11 |
| 1.51 |
|
| Total investment securities (b) | 12,244 |
| 62 |
| 2.06 |
| | 12,232 |
| 62 |
| 2.06 |
| | 12,373 |
| 61 |
| 2.01 |
|
| | | | | | | | | | | | |
| Interest-bearing deposits with banks | 5,086 |
| 17 |
| 1.26 |
| | 5,263 |
| 14 |
| 1.03 |
| | 5,967 |
| 8 |
| 0.51 |
|
| Other short-term investments | 91 |
| — |
| 0.72 |
| | 92 |
| — |
| 0.58 |
| | 102 |
| — |
| 0.43 |
|
| Total earning assets | 66,084 |
| 579 |
| 3.49 |
| | 66,310 |
| 529 |
| 3.21 |
| | 67,648 |
| 480 |
| 2.84 |
|
| | | | | | | | | | | | |
| Cash and due from banks | 1,234 |
| | | | 1,148 |
| | | | 1,152 |
| | |
| Allowance for loan losses | (718 | ) | | | | (726 | ) | | | | (749 | ) | | |
| Accrued income and other assets | 4,651 |
| | | | 4,614 |
| | | | 4,858 |
| | |
| Total assets | $ | 71,251 |
| | | | $ | 71,346 |
| | | | $ | 72,909 |
| | |
| | | | | | | | | | | | |
| Money market and interest-bearing checking deposits | $ | 20,819 |
| 9 |
| 0.15 |
| | $ | 21,661 |
| 7 |
| 0.13 |
| | $ | 22,415 |
| 7 |
| 0.12 |
|
| Savings deposits | 2,152 |
| — |
| 0.02 |
| | 2,142 |
| — |
| 0.02 |
| | 2,042 |
| — |
| 0.03 |
|
| Customer certificates of deposit | 2,390 |
| 2 |
| 0.36 |
| | 2,527 |
| 2 |
| 0.36 |
| | 3,129 |
| 3 |
| 0.40 |
|
| Foreign office time deposits | 75 |
| — |
| 0.66 |
| | 57 |
| — |
| 0.60 |
| | 25 |
| — |
| 0.37 |
|
| Total interest-bearing deposits | 25,436 |
| 11 |
| 0.16 |
| | 26,387 |
| 9 |
| 0.15 |
| | 27,611 |
| 10 |
| 0.14 |
|
| | | | | | | | | | | | |
| Short-term borrowings | 815 |
| 3 |
| 1.15 |
| | 147 |
| — |
| 1.12 |
| | 17 |
| — |
| 0.47 |
|
| Medium- and long-term debt | 4,936 |
| 19 |
| 1.61 |
| | 5,161 |
| 20 |
| 1.48 |
| | 5,907 |
| 20 |
| 1.36 |
|
| Total interest-bearing sources | 31,187 |
| 33 |
| 0.42 |
| | 31,695 |
| 29 |
| 0.37 |
| | 33,535 |
| 30 |
| 0.36 |
|
| | | | | | | | | | | | |
| Noninterest-bearing deposits | 31,057 |
| | | | 30,741 |
| | | | 30,454 |
| | |
| Accrued expenses and other liabilities | 999 |
| | | | 966 |
| | | | 1,243 |
| | |
| Total shareholders' equity | 8,008 |
| | | | 7,944 |
| | | | 7,677 |
| | |
| Total liabilities and shareholders' equity | $ | 71,251 |
| | | | $ | 71,346 |
| | | | $ | 72,909 |
| | |
| | | | | | | | | | | | |
| Net interest income/rate spread | | $ | 546 |
| 3.07 |
| | | $ | 500 |
| 2.84 |
| | | $ | 450 |
| 2.48 |
|
| | | | | | | | | | | | |
| Impact of net noninterest-bearing sources of funds | | | 0.22 |
| | | | 0.19 |
| | | | 0.18 |
|
| Net interest margin (as a percentage of average earning assets) | | | 3.29 | % | | | | 3.03 | % | | | | 2.66 | % |
| |
| (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 | | | | | |
| | | | | | |
| | September 30, | June 30, | March 31, | December 31, | September 30, |
| (in millions, except per share data) | 2017 | 2017 | 2017 | 2016 | 2016 |
| | | | | | |
| Commercial loans: | | | | | |
| Floor plan | $ | 3,960 |
| $ | 4,346 |
| $ | 4,191 |
| $ | 4,269 |
| $ | 3,778 |
|
| Other | 27,102 |
| 27,103 |
| 26,024 |
| 26,725 |
| 27,374 |
|
| Total commercial loans | 31,062 |
| 31,449 |
| 30,215 |
| 30,994 |
| 31,152 |
|
| Real estate construction loans | 3,018 |
| 2,857 |
| 2,930 |
| 2,869 |
| 2,743 |
|
| Commercial mortgage loans | 8,985 |
| 8,974 |
| 9,021 |
| 8,931 |
| 9,013 |
|
| Lease financing | 475 |
| 472 |
| 550 |
| 572 |
| 648 |
|
| International loans | 1,159 |
| 1,145 |
| 1,106 |
| 1,258 |
| 1,303 |
|
| Residential mortgage loans | 1,999 |
| 1,976 |
| 1,944 |
| 1,942 |
| 1,874 |
|
| Consumer loans: | | | | | |
| Home equity | 1,790 |
| 1,796 |
| 1,790 |
| 1,800 |
| 1,792 |
|
| Other consumer | 721 |
| 739 |
| 747 |
| 722 |
| 749 |
|
| Total consumer loans | 2,511 |
| 2,535 |
| 2,537 |
| 2,522 |
| 2,541 |
|
| Total loans | $ | 49,209 |
| $ | 49,408 |
| $ | 48,303 |
| $ | 49,088 |
| $ | 49,274 |
|
| | | | | | |
| Goodwill | $ | 635 |
| $ | 635 |
| $ | 635 |
| $ | 635 |
| $ | 635 |
|
| Core deposit intangible | 6 |
| 7 |
| 7 |
| 7 |
| 8 |
|
| Other intangibles | 2 |
| 2 |
| 3 |
| 3 |
| 3 |
|
| | | | | | |
| Common equity tier 1 capital (a) | 7,752 |
| 7,705 |
| 7,667 |
| 7,540 |
| 7,378 |
|
| Risk-weighted assets (a) | 67,355 |
| 66,928 |
| 66,355 |
| 67,966 |
| 69,018 |
|
| | | | | | |
| Common equity tier 1 and tier 1 risk-based capital ratio (a) | 11.51 | % | 11.51 | % | 11.55 | % | 11.09 | % | 10.69 | % |
| Total risk-based capital ratio (a) | 13.65 |
| 13.66 |
| 13.72 |
| 13.27 |
| 12.84 |
|
| Leverage ratio (a) | 10.87 |
| 10.80 |
| 10.67 |
| 10.18 |
| 10.14 |
|
| Common equity ratio | 11.16 |
| 11.18 |
| 10.87 |
| 10.68 |
| 10.42 |
|
| Tangible common equity ratio (b) | 10.35 |
| 10.37 |
| 10.07 |
| 9.89 |
| 9.64 |
|
| | | | | | |
| Common shareholders' equity per share of common stock | $ | 46.09 |
| $ | 45.39 |
| $ | 44.69 |
| $ | 44.47 |
| $ | 44.91 |
|
| Tangible common equity per share of common stock (b) | 42.39 |
| 41.73 |
| 41.05 |
| 40.79 |
| 41.15 |
|
| Market value per share for the quarter: | | | | | |
| High | 76.76 |
| 75.30 |
| 75.00 |
| 70.44 |
| 47.81 |
|
| Low | 64.04 |
| 64.75 |
| 64.27 |
| 46.75 |
| 38.39 |
|
| Close | 76.26 |
| 73.24 |
| 68.58 |
| 68.11 |
| 47.32 |
|
| | | | | | |
| Quarterly ratios: | | | | | |
| Return on average common shareholders' equity | 11.17 | % | 10.26 | % | 10.42 | % | 8.43 | % | 7.76 | % |
| Return on average assets | 1.25 |
| 1.14 |
| 1.14 |
| 0.88 |
| 0.82 |
|
| Efficiency ratio (c) | 56.24 |
| 58.63 |
| 61.63 |
| 63.58 |
| 68.15 |
|
| | | | | | |
| Number of banking centers | 439 |
| 439 |
| 458 |
| 458 |
| 473 |
|
| | | | | | |
| Number of employees - full time equivalent | 7,974 |
| 8,017 |
| 8,044 |
| 7,960 |
| 8,476 |
|
| |
| (a) | September 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 | | | |
| | | | |
| | September 30, | December 31, | September 30, |
| (in millions, except share data) | 2017 | 2016 | 2016 |
| | | | |
| ASSETS | | | |
| Cash and due from subsidiary bank | $ | 974 |
| $ | 761 |
| $ | — |
|
| Short-term investments with subsidiary bank | — |
| — |
| 588 |
|
| Other short-term investments | 89 |
| 87 |
| 88 |
|
| Investment in subsidiaries, principally banks | 7,639 |
| 7,561 |
| 7,685 |
|
| Premises and equipment | 2 |
| 2 |
| 2 |
|
| Other assets | 114 |
| 150 |
| 161 |
|
| Total assets | $ | 8,818 |
| $ | 8,561 |
| $ | 8,524 |
|
| | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | |
| Medium- and long-term debt | $ | 606 |
| $ | 604 |
| $ | 626 |
|
| Other liabilities | 178 |
| 161 |
| 171 |
|
| Total liabilities | 784 |
| 765 |
| 797 |
|
| | | | |
| Common stock - $5 par value: | | | |
| Authorized - 325,000,000 shares | | | |
| Issued - 228,164,824 shares | 1,141 |
| 1,141 |
| 1,141 |
|
| Capital surplus | 2,112 |
| 2,135 |
| 2,174 |
|
| Accumulated other comprehensive loss | (359 | ) | (383 | ) | (292 | ) |
| Retained earnings | 7,746 |
| 7,331 |
| 7,262 |
|
| Less cost of common stock in treasury - 53,835,135 shares at 9/30/17, 52,851,156 shares at 12/31/16 and 56,096,416 shares at 9/30/16 | (2,606 | ) | (2,428 | ) | (2,558 | ) |
| Total shareholders' equity | 8,034 |
| 7,796 |
| 7,727 |
|
| Total liabilities and shareholders' equity | $ | 8,818 |
| $ | 8,561 |
| $ | 8,524 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| 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 | — |
| — |
| — |
| — |
| 313 |
| — |
| 313 |
|
| Other comprehensive income, net of tax | — |
| — |
| — |
| 137 |
| — |
| — |
| 137 |
|
| Cash dividends declared on common stock ($0.66 per share) | — |
| — |
| — |
| — |
| (115 | ) | — |
| (115 | ) |
| Purchase of common stock | (5.0 | ) | — |
| — |
| — |
| — |
| (211 | ) | (211 | ) |
| Net issuance of common stock under employee stock plans | 1.4 |
| — |
| (29 | ) | — |
| (20 | ) | 62 |
| 13 |
|
| Share-based compensation | — |
| — |
| 30 |
| — |
| — |
| — |
| 30 |
|
| BALANCE AT SEPTEMBER 30, 2016 | 172.1 |
| $ | 1,141 |
| $ | 2,174 |
| $ | (292 | ) | $ | 7,262 |
| $ | (2,558 | ) | $ | 7,727 |
|
| | | | | | | | |
| 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 | — |
| — |
| — |
| — |
| 631 |
| — |
| 631 |
|
| Other comprehensive income, net of tax | — |
| — |
| — |
| 24 |
| — |
| — |
| 24 |
|
| Cash dividends declared on common stock ($0.79 per share) | — |
| — |
| — |
| — |
| (141 | ) | — |
| (141 | ) |
| Purchase of common stock | (5.7 | ) | — |
| — |
| — |
| — |
| (396 | ) | (396 | ) |
| Net issuance of common stock under employee stock plans | 3.0 |
| — |
| (26 | ) | — |
| (22 | ) | 138 |
| 90 |
|
| Net issuance of common stock for warrants | 1.7 |
| — |
| (28 | ) | — |
| (51 | ) | 79 |
| — |
|
| Share-based compensation | — |
| — |
| 29 |
| — |
| — |
| — |
| 29 |
|
| Other | — |
| — |
| (1 | ) | — |
| — |
| 1 |
| — |
|
| BALANCE AT SEPTEMBER 30, 2017 | 174.3 |
| $ | 1,141 |
| $ | 2,112 |
| $ | (359 | ) | $ | 7,746 |
| $ | (2,606 | ) | $ | 8,034 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| BUSINESS SEGMENT FINANCIAL RESULTS (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| (dollar amounts in millions) | Business | | Retail | | Wealth | | | | | | |
| Three Months Ended September 30, 2017 | Bank | | Bank | | Management | | Finance | | Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income (expense) | $ | 356 |
| | $ | 165 |
| | $ | 45 |
| | $ | (30 | ) | | $ | 10 |
| | $ | 546 |
|
| Provision for credit losses | 16 |
| | (1 | ) | | 10 |
| | — |
| | (1 | ) | | 24 |
|
| Noninterest income | 148 |
| | 49 |
| | 63 |
| | 13 |
| | 2 |
| | 275 |
|
| Noninterest expenses | 199 |
| | 184 |
| | 70 |
| | (1 | ) | | 11 |
| | 463 |
|
| Provision (benefit) for income taxes | 99 |
| | 10 |
| | 10 |
| | (10 | ) | | (1 | ) | (a) | 108 |
|
| Net income (loss) | $ | 190 |
| | $ | 21 |
| | $ | 18 |
| | $ | (6 | ) | | $ | 3 |
| | $ | 226 |
|
| Net credit-related charge-offs (recoveries) | $ | 28 |
| | $ | (1 | ) | | $ | (2 | ) | | $ | — |
| | $ | — |
| | $ | 25 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 38,917 |
| | $ | 6,455 |
| | $ | 5,416 |
| | $ | 13,996 |
| | $ | 6,467 |
| | $ | 71,251 |
|
| Loans | 37,559 |
| | 5,834 |
| | 5,270 |
| | — |
| | — |
| | 48,663 |
|
| Deposits | 28,115 |
| | 23,918 |
| | 4,054 |
| | 270 |
| | 136 |
| | 56,493 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (b) | 1.94 | % | | 0.33 | % | | 1.28 | % | | N/M |
| | N/M |
| | 1.25 | % |
| Efficiency ratio (c) | 39.32 |
| | 85.51 |
| | 65.23 |
| | N/M |
| | N/M |
| | 56.24 |
|
| | | | | | | | | | | | |
| | 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 | ) | (a) | 99 |
|
| Net income (loss) | $ | 180 |
| | $ | 16 |
| | $ | 23 |
| | $ | (21 | ) | | $ | 5 |
| | $ | 203 |
|
| Net credit-related charge-offs (recoveries) | $ | 10 |
| | $ | 9 |
| | $ | (1 | ) | | $ | — |
| | $ | — |
| | $ | 18 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 38,881 |
| | $ | 6,487 |
| | $ | 5,432 |
| | $ | 13,936 |
| | $ | 6,610 |
| | $ | 71,346 |
|
| 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 (b) | 1.85 | % | | 0.27 | % | | 1.76 | % | | N/M |
| | N/M |
| | 1.14 | % |
| Efficiency ratio (c) | 40.19 |
| | 84.79 |
| | 66.44 |
| | N/M |
| | N/M |
| | 58.63 |
|
| | | | | | | | | | | | |
| | Business | | Retail | | Wealth | | | | | | |
| Three Months Ended September 30, 2016 | Bank | | Bank | | Management | | Finance | | Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income (expense) | $ | 356 |
| | $ | 156 |
| | $ | 41 |
| | $ | (109 | ) | | $ | 6 |
| | $ | 450 |
|
| Provision for credit losses | 2 |
| | 10 |
| | (1 | ) | | — |
| | 5 |
| | 16 |
|
| Noninterest income | 145 |
| | 50 |
| | 61 |
| | 13 |
| | 3 |
| | 272 |
|
| Noninterest expenses | 215 |
| | 195 |
| | 75 |
| | (1 | ) | | 9 |
| | 493 |
|
| Provision (benefit) for income taxes | 95 |
| | — |
| | 10 |
| | (37 | ) | | (4 | ) | | 64 |
|
| Net income (loss) | $ | 189 |
| | $ | 1 |
| | $ | 18 |
| | $ | (58 | ) | | $ | (1 | ) | | $ | 149 |
|
| Net credit-related charge-offs (recoveries) | $ | 14 |
| | $ | 3 |
| | $ | (1 | ) | | $ | — |
| | $ | — |
| | $ | 16 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 39,618 |
| | $ | 6,544 |
| | $ | 5,283 |
| | $ | 14,144 |
| | $ | 7,320 |
| | $ | 72,909 |
|
| Loans | 38,243 |
| | 5,871 |
| | 5,092 |
| | — |
| | — |
| | 49,206 |
|
| Deposits | 30,019 |
| | 23,654 |
| | 4,030 |
| | 98 |
| | 264 |
| | 58,065 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (b) | 1.90 | % | | — | % | | 1.35 | % | | N/M |
| | N/M |
| | 0.82 | % |
| Efficiency ratio (c) | 42.77 |
| | 95.08 |
| | 73.64 |
| | N/M |
| | N/M |
| | 68.15 |
|
| |
| (a) | Included tax benefits of $2 million and $5 million from employee stock transactions for the third and second quarter 2017, respectively. |
| |
| (b) | Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity. |
| |
| (c) | 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 September 30, 2017 | Michigan | | California | | Texas | | Markets | | & Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income (expense) | $ | 172 |
| | $ | 184 |
| | $ | 123 |
| | $ | 87 |
| | $ | (20 | ) | | $ | 546 |
|
| Provision for credit losses | 8 |
| | 24 |
| | (22 | ) | | 15 |
| | (1 | ) | | 24 |
|
| Noninterest income | 79 |
| | 41 |
| | 33 |
| | 107 |
| | 15 |
| | 275 |
|
| Noninterest expenses | 144 |
| | 103 |
| | 92 |
| | 114 |
| | 10 |
| | 463 |
|
| Provision (benefit) for income taxes | 34 |
| | 37 |
| | 31 |
| | 17 |
| | (11 | ) | (a) | 108 |
|
| Net income (loss) | $ | 65 |
| | $ | 61 |
| | $ | 55 |
| | $ | 48 |
| | $ | (3 | ) | | $ | 226 |
|
| Net credit-related charge-offs | $ | 2 |
| | $ | 10 |
| | $ | 9 |
| | $ | 4 |
| | $ | — |
| | $ | 25 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 13,367 |
| | $ | 18,170 |
| | $ | 10,435 |
| | $ | 8,816 |
| | $ | 20,463 |
| | $ | 71,251 |
|
| Loans | 12,612 |
| | 17,916 |
| | 9,959 |
| | 8,176 |
| | — |
| | 48,663 |
|
| Deposits | 21,641 |
| | 17,316 |
| | 9,400 |
| | 7,730 |
| | 406 |
| | 56,493 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (b) | 1.14 | % | | 1.32 | % | | 2.05 | % | | 2.15 | % | | N/M |
| | 1.25 | % |
| Efficiency ratio (c) | 57.15 |
| | 45.59 |
| | 58.74 |
| | 58.79 |
| | N/M |
| | 56.24 |
|
| | | | | | | | | | | | |
| | | | | | | | 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 | ) | (a) | 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 |
| | $ | 18,474 |
| | $ | 10,481 |
| | $ | 8,474 |
| | $ | 20,546 |
| | $ | 71,346 |
|
| 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 (b) | 1.20 | % | | 1.33 | % | | 1.52 | % | | 2.24 | % | | N/M |
| | 1.14 | % |
| Efficiency ratio (c) | 58.14 |
| | 43.82 |
| | 64.37 |
| | 58.45 |
| | N/M |
| | 58.63 |
|
| | | | | | | | | | | | |
| | | | | | | | Other | | Finance | | |
| Three Months Ended September 30, 2016 | Michigan | | California | | Texas | | Markets | | & Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income (expense) | $ | 168 |
| | $ | 179 |
| | $ | 117 |
| | $ | 89 |
| | $ | (103 | ) | | $ | 450 |
|
| Provision for credit losses | 13 |
| | (4 | ) | | (3 | ) | | 5 |
| | 5 |
| | 16 |
|
| Noninterest income | 82 |
| | 44 |
| | 33 |
| | 97 |
| | 16 |
| | 272 |
|
| Noninterest expenses | 161 |
| | 110 |
| | 102 |
| | 112 |
| | 8 |
| | 493 |
|
| Provision (benefit) for income taxes | 26 |
| | 43 |
| | 18 |
| | 18 |
| | (41 | ) | | 64 |
|
| Net income (loss) | $ | 50 |
| | $ | 74 |
| | $ | 33 |
| | $ | 51 |
| | $ | (59 | ) | | $ | 149 |
|
| Net credit-related charge-offs | $ | 1 |
| | $ | — |
| | $ | 10 |
| | $ | 5 |
| | $ | — |
| | $ | 16 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 13,019 |
| | $ | 18,088 |
| | $ | 11,014 |
| | $ | 9,324 |
| | $ | 21,464 |
| | $ | 72,909 |
|
| Loans | 12,332 |
| | 17,793 |
| | 10,566 |
| | 8,515 |
| | — |
| | 49,206 |
|
| Deposits | 21,907 |
| | 17,711 |
| | 9,860 |
| | 8,225 |
| | 362 |
| | 58,065 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (b) | 0.87 | % | | 1.58 | % | | 1.13 | % | | 2.19 | % | | N/M |
| | 0.82 | % |
| Efficiency ratio (c) | 64.64 |
| | 48.93 |
| | 68.12 |
| | 60.18 |
| | N/M |
| | 68.15 |
|
| |
| (a) | Included tax benefits of $2 million and $5 million from employee stock transactions for the third and second quarter 2017, respectively. |
| |
| (b) | Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity. |
| |
| (c) | 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.
|
| | | | | | | | | | | | | | | |
| | September 30, | June 30, | March 31, | December 31, | September 30, |
| (dollar amounts in millions) | 2017 | 2017 | 2017 | 2016 | 2016 |
| | | | | | |
| Tangible Common Equity Ratio: | | | | | |
| Common shareholders' equity | $ | 8,034 |
| $ | 7,985 |
| $ | 7,930 |
| $ | 7,796 |
| $ | 7,727 |
|
| Less: | | | | | |
| Goodwill | 635 |
| 635 |
| 635 |
| 635 |
| 635 |
|
| Other intangible assets | 8 |
| 9 |
| 10 |
| 10 |
| 11 |
|
| Tangible common equity | $ | 7,391 |
| $ | 7,341 |
| $ | 7,285 |
| $ | 7,151 |
| $ | 7,081 |
|
| | | | | | |
| Total assets | $ | 72,017 |
| $ | 71,447 |
| $ | 72,976 |
| $ | 72,978 |
| $ | 74,124 |
|
| Less: | | | | | |
| Goodwill | 635 |
| 635 |
| 635 |
| 635 |
| 635 |
|
| Other intangible assets | 8 |
| 9 |
| 10 |
| 10 |
| 11 |
|
| Tangible assets | $ | 71,374 |
| $ | 70,803 |
| $ | 72,331 |
| $ | 72,333 |
| $ | 73,478 |
|
| | | | | | |
| Common equity ratio | 11.16 | % | 11.18 | % | 10.87 | % | 10.68 | % | 10.42 | % |
| Tangible common equity ratio | 10.35 |
| 10.37 |
| 10.07 |
| 9.89 |
| 9.64 |
|
| | | | | | |
| Tangible Common Equity per Share of Common Stock: | | | | | |
| Common shareholders' equity | $ | 8,034 |
| $ | 7,985 |
| $ | 7,930 |
| $ | 7,796 |
| $ | 7,727 |
|
| Tangible common equity | 7,391 |
| 7,341 |
| 7,285 |
| 7,151 |
| 7,081 |
|
| | | | | | |
| Shares of common stock outstanding (in millions) | 174 |
| 176 |
| 177 |
| 175 |
| 172 |
|
| | | | | | |
| Common shareholders' equity per share of common stock | $ | 46.09 |
| $ | 45.39 |
| $ | 44.69 |
| $ | 44.47 |
| $ | 44.91 |
|
| Tangible common equity per share of common stock | 42.39 |
| 41.73 |
| 41.05 |
| 40.79 |
| 41.15 |
|
The tangible common equity ratio removes the effect of intangible assets from capital and 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 |
| | September 30, | June 30, | September 30, |
| (dollar amounts in millions, except per share data) | 2017 | 2017 | 2016 |
| | | | |
| Adjusted Earnings per Common Share: | | | |
| Net income available to common shareholders | $ | 224 |
| $ | 202 |
| $ | 148 |
|
| Add: | | | |
| Restructuring charges, net of tax | 4 |
| 9 |
| 13 |
|
| Deduct: | | | |
| Tax benefits from employee stock transactions | 2 |
| 5 |
| — |
|
| Adjusted net income available to common shareholders | $ | 226 |
| $ | 206 |
| $ | 161 |
|
| Diluted average common shares | 177 |
| 179 |
| 176 |
|
| Diluted earnings per common share: | | | |
| Reported | $ | 1.26 |
| $ | 1.13 |
| $ | 0.84 |
|
| Adjusted | $ | 1.27 |
| $ | 1.15 |
| $ | 0.91 |
|
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.
