COMERICA REPORTS FIRST QUARTER 2018 NET INCOME OF $281 MILLION,
$1.59 PER SHARE
First Quarter 2018 Adjusted Net Income of $271 Million, $1.54 Per Share
Rate Increases to Date Expected to Add $205 Million to $215 Million to 2018 Net Interest Income1
Prudent Pricing as Interest Rates Rise, Expense Control and Strong Credit Quality Help Drive Return on Common Shareholders' Equity to 14 Percent
DALLAS/April 17, 2018 -- Comerica Incorporated (NYSE:CMA) today reported first quarter earnings of $281 million, or $1.59 per share. Adjusted net income was $271 million or $1.54 per share, after excluding restructuring charges, tax benefits from employee stock transactions and a small deferred tax adjustment.
“Our relationship banking strategy is serving us well. It is helping us prudently manage loan and deposit pricing as interest rates have increased, as well as maintain strong credit metrics. This has resulted in a significant increase in our returns and helped drive our efficiency ratio to 56 percent,” said Ralph W. Babb, Jr., chairman and chief executive officer. “Our pipeline is strong, and we expect loan growth to return with typical seasonality in the second quarter. We believe the continued achievement of our GEAR Up initiatives will assist us in growing revenue and controlling expenses. We remain well positioned to benefit from additional rate increases, favorable changes in regulation and economic growth.”
|
| | | | | | | | | |
| (dollar amounts in millions, except per share data) | 1st Qtr '18 | 4th Qtr '17 | 1st Qtr '17 |
| Net interest income | $ | 549 |
| $ | 545 |
| $ | 470 |
|
| Provision for credit losses | 12 |
| 17 |
| 16 |
|
| Noninterest income | 244 |
| 285 |
| 271 |
|
| Noninterest expenses | 446 |
| 483 |
| 457 |
|
| Pre-tax income | 335 |
| 330 |
| 268 |
|
| Provision for income taxes | 54 |
| 218 |
| 66 |
|
| Net income | $ | 281 |
| $ | 112 |
| $ | 202 |
|
| | | | |
| Diluted income per common share | 1.59 |
| 0.63 |
| 1.11 |
|
| Net interest margin | 3.41 | % | 3.27 | % | 2.85 | % |
| Efficiency ratio (a) | 56.33 |
| 58.14 |
| 61.71 |
|
| Common equity Tier 1 capital ratio (b) | 11.96 |
| 11.68 |
| 11.55 |
|
| Common equity ratio | 11.06 |
| 11.13 |
| 10.87 |
|
| |
| (a) | Noninterest expenses as a percentage of net interest income and noninterest income excluding net securities gains (losses). |
| |
| (b) | March 31, 2018 ratio is estimated. |
The following table reconciles items presented on an adjusted basis to facilitate trend analysis.
|
| | | | | | | | | |
| (dollar amounts in millions, except per share data) | 1st Qtr '18 | 4th Qtr '17 | 1st Qtr '17 |
| Earnings per share | $ | 1.59 |
| $ | 0.63 |
| $ | 1.11 |
|
| Restructuring charges, net of tax | 0.07 |
| 0.04 |
| 0.04 |
|
| Deferred tax adjustment | (0.01 | ) | 0.61 |
| — |
|
| One-time employee bonus, net of tax | — |
| 0.02 |
| — |
|
| Tax benefits from employee stock transactions | (0.11 | ) | (0.02 | ) | (0.13 | ) |
| Adjusted earnings per share (a) | $ | 1.54 |
| $ | 1.28 |
| $ | 1.02 |
|
-Table continues on next page-
1 Full-year 2018 benefit to net interest income over full-year 2017 resulting from the 2017 and first quarter 2018 rate increases. Estimated based on simulation modeling analysis. Refer to page F-29 of Comerica's 2017 Annual Report for further information.
COMERICA REPORTS FIRST QUARTER 2018 NET INCOME OF $281 MILLION
|
| | | | | | | | | |
| (dollar amounts in millions, except per share data) | 1st Qtr '18 | 4th Qtr '17 | 1st Qtr '17 |
| Net income | $ | 281 |
| $ | 112 |
| $ | 202 |
|
| Restructuring charges, net of tax | 12 |
| 8 |
| 7 |
|
| Deferred tax adjustment | (3 | ) | 107 |
| — |
|
| One-time employee bonus, net of tax | — |
| 3 |
| — |
|
| Tax benefits from employee stock transactions | (19 | ) | (4 | ) | (24 | ) |
| Adjusted net income (a) | $ | 271 |
| $ | 226 |
| $ | 185 |
|
| | | | |
| Noninterest income | $ | 244 |
| $ | 285 |
| $ | 271 |
|
| Proforma effect of adopting new accounting standard (b) | — |
| (34 | ) | (26 | ) |
| Adjusted noninterest income (a) | $ | 244 |
| $ | 251 |
| $ | 245 |
|
| | | | |
| Noninterest expenses | $ | 446 |
| $ | 483 |
| $ | 457 |
|
| Proforma effect of adopting new accounting standard (b) | — |
| (34 | ) | (26 | ) |
| Restructuring charges | (16 | ) | (13 | ) | (11 | ) |
| One-time employee bonus | — |
| (5 | ) | — |
|
| Adjusted noninterest expenses (a) | $ | 430 |
| $ | 431 |
| $ | 420 |
|
| | | | |
| Return on Average Assets (ROA) | 1.62 | % | 0.62 | % | 1.14 | % |
| Adjusted ROA (a) | 1.56 |
| 1.26 |
| 1.05 |
|
| Return on Average Common Shareholders' Equity (ROE) | 14.37 |
| 5.58 |
| 10.42 |
|
| Adjusted ROE (a) | 13.85 |
| 11.24 |
| 9.56 |
|
| Efficiency ratio | 56.33 |
| 58.14 |
| 61.71 |
|
| Adjusted efficiency ratio (a) | 54.32 |
| 54.23 |
| 58.79 |
|
| |
| (a) | See Reconciliation of Non-GAAP Financial Measures. |
| |
| (b) | Adoption of new accounting standard for revenue recognition (Topic 606 - Revenue from Contracts with Customers), effective January 1, 2018, resulted in a change in presentation which records certain costs in the same category as the associated revenues. The effect of this change was to reduce both noninterest income and noninterest expenses by $35 million in the first quarter 2018. |
First Quarter 2018 Compared to Fourth Quarter 2017
Average total loans decreased $512 million to $48.4 billion.
| |
| • | Largely attributed to a seasonal decrease in Mortgage Banker Finance and a decrease in Corporate Banking, partially offset by an increase in National Dealer Services. |
| |
| • | Period end loans unchanged at $49.2 billion. |
Average total deposits decreased $1.6 billion to $56.1 billion.
| |
| • | Driven by a $1.9 billion seasonal decrease in noninterest-bearing deposits. |
| |
| • | Primarily reflected seasonal decreases in general Middle Market (driven by a decrease in Municipalities), Corporate Banking and Commercial Real Estate. |
| |
| • | Period end deposits decreased $268 million to $57.6 billion. |
Net interest income increased $4 million to $549 million.
| |
| • | Reflected the net benefit from increases in short-term rates, partially offset by two fewer days in the first quarter 2018. |
Provision for credit losses decreased $5 million to $12 million, reflecting improvements in credit quality of the portfolio.
| |
| • | Net credit-related charge-offs remained low at 0.23 percent of average loans. |
| |
| • | The allowance for loan losses was $698 million, or 1.42 percent of total loans. |
| |
| • | Total criticized loans declined $111 million, including a $76 million decrease in nonperforming loans. |
Adjusted noninterest income (see table above) decreased $7 million.
| |
| • | Primarily reflected a $4 million decrease in commercial lending fees, mostly due to a decrease in syndication fees, as well as smaller decreases in other categories. |
COMERICA REPORTS FIRST QUARTER 2018 NET INCOME OF $281 MILLION
Adjusted noninterest expenses (see table above) decreased $1 million.
| |
| • | Mostly due to decreases of $4 million in outside processing expense, adjusted for the impact of adoption of the new revenue accounting standard, and $3 million in advertising expense, as well as a business tax refund of $5 million, partially offset by a $7 million seasonal increase in salaries and benefits expense. |
| |
| • | Pension costs pertaining to actuarial estimates, other than employee service costs, have been reclassified out of salaries and benefits expense to other noninterest expenses due to the adoption of a new retirement benefits accounting standard. |
Provision for income taxes decreased $164 million to $54 million.
| |
| • | Related to the decrease in the statutory tax rate in the first quarter of 2018 and the $107 million charge to adjust deferred taxes in the fourth quarter of 2017, both resulting from the Tax Cuts and Jobs Act. |
| |
| • | Additionally impacted by a $15 million increase in tax benefits from employee stock transactions. |
Capital position remained solid at March 31, 2018.
| |
| • | Returned a total of $201 million to shareholders, including dividends and the repurchase of $149 million of common stock (1.6 million shares) under the equity repurchase program. |
First Quarter 2018 Compared to First Quarter 2017
Prudent management of loan and deposit pricing and successful execution of GEAR Up initiatives resulted in an increase in pretax income of 25 percent.
Average total loans increased $521 million.
| |
| • | Excluding a $272 million decline in Energy, average loans increased $793 million, reflecting increases in National Dealer Services and Technology and Life Sciences. |
Average total deposits decreased $1.7 billion.
| |
| • | Due to decreases of $1.1 billion in interest-bearing deposits and $590 million in noninterest-bearing deposits. |
| |
| • | Primarily reflected decreases in general Middle Market (driven by a decrease in Municipalities), Corporate Banking and Commercial Real Estate. |
Net interest income increased $79 million.
| |
| • | Driven by the net benefit from higher short-term rates. |
Provision for credit losses decreased $4 million.
| |
| • | Total criticized loans declined $516 million. |
| |
| • | Net credit-related charge-offs improved to 0.23 percent of average loans, compared to 0.28 percent of average loans. |
Adjusted noninterest income (see table above) decreased $1 million.
| |
| • | Largely reflected a $3 million decrease in service charges on deposit accounts and smaller decreases in various other accounts, partially offset by increases of $7 million in card fees, adjusted for the impact of adoption of the new revenue accounting standard, and $3 million in fiduciary income. |
Adjusted noninterest expense (see table above) increased $10 million.
| |
| • | Reflected an increase of $10 million in salaries and benefits expense, primarily driven by an increase of $6 million in stock compensation. |
Provision for income taxes decreased $12 million.
| |
| • | Due to the decrease in the statutory tax rate in the first quarter of 2018, partially offset by an increase in pretax income and a $5 million decrease in tax benefits from employee stock transactions. |
COMERICA REPORTS FIRST QUARTER 2018 NET INCOME OF $281 MILLION
Net Interest Income
|
| | | | | | | | | | | |
| (dollar amounts in millions) | 1st Qtr '18 | | 4th Qtr '17 | | 1st Qtr '17 |
| Net interest income | $ | 549 |
| | $ | 545 |
| | $ | 470 |
|
| | | | | | |
| Net interest margin | 3.41 | % | | 3.27 | % | | 2.85 | % |
| | | | | | |
| Selected average balances: | | | | | |
| Total earning assets | $ | 65,012 |
| | $ | 66,167 |
| | $ | 66,648 |
|
| Total loans | 48,421 |
| | 48,933 |
| | 47,900 |
|
| Total investment securities | 11,911 |
| | 12,155 |
| | 12,198 |
|
| Federal Reserve Bank deposits | 4,315 |
| | 4,771 |
| | 6,249 |
|
| | | | | | |
| | | | | | |
| Total deposits | 56,090 |
| | 57,641 |
| | 57,779 |
|
| Total noninterest-bearing deposits | 29,869 |
| | 31,780 |
| | 30,459 |
|
| Medium- and long-term debt | 5,192 |
| | 4,631 |
| | 5,157 |
|
Net interest income increased $4 million to $549 million in the first quarter 2018, compared to the fourth quarter 2017.
| |
| • | Interest on loans increased $11 million, primarily reflecting the benefit from higher short-term rates (+$32 million), partially offset by two less days in the quarter (-$10 million), a decrease in average loan balances (-$5 million), other loan dynamics driven by a decrease in loan fees (-$4 million) and the impact of lower interest recoveries (-$2 million). |
| |
| • | Interest on short-term investments increased $1 million, reflecting the increases in the Federal Funds rate and decreases in average balances. |
| |
| • | Interest expense on deposits increased $3 million, primarily due to a deliberate and strategic approach to pricing. |
| |
| • | Interest expense on debt increased $5 million, primarily due to higher short-term rates and an increase in average borrowings. |
The net interest margin increased 14 basis points to 3.41 percent compared to the fourth quarter 2017, reflecting:
| |
| • | The loan benefit from higher short-term rates (+20 basis points), partially offset by the impact of lower interest recoveries (-1 basis point) and other loan dynamics (-2 basis points). |
| |
| • | The benefit from a higher yield on short-term investments and a decrease in lower-yielding deposits with the Federal Reserve Bank (+3 basis points). |
| |
| • | Higher costs on deposits (-3 basis points) and debt (-3 basis points). |
The net benefit from higher rates was $27 million or 17 basis points.
COMERICA REPORTS FIRST QUARTER 2018 NET INCOME OF $281 MILLION
Credit Quality
“Positive credit migration continued in the first quarter as criticized and nonaccrual loans decreased again,” said Babb. “We are not seeing any concerning trends, yet remain vigilant. While credit quality remains strong, we are maintaining a conservative stance regarding trade, economic and market conditions.”
|
| | | | | | | | | | | |
| (dollar amounts in millions) | 1st Qtr '18 | | 4th Qtr '17 | | 1st Qtr '17 |
| Credit-related charge-offs | $ | 37 |
| | $ | 29 |
| | $ | 44 |
|
| Recoveries | 9 |
| | 13 |
| | 11 |
|
| Net credit-related charge-offs | 28 |
| | 16 |
| | 33 |
|
| Net credit-related charge-offs/Average total loans | 0.23 | % | | 0.13 | % | | 0.28 | % |
| | | | | | |
| Provision for credit losses | $ | 12 |
| | $ | 17 |
| | $ | 16 |
|
| | | | | | |
| Nonperforming loans | 334 |
| | 410 |
| | 529 |
|
| Nonperforming assets (NPAs) | 339 |
| | 415 |
| | 545 |
|
| NPAs/Total loans and foreclosed property | 0.69 | % | | 0.84 | % | | 1.13 | % |
| | | | | | |
| Loans past due 90 days or more and still accruing | $ | 36 |
| | $ | 35 |
| | $ | 26 |
|
| | | | | | |
| Allowance for loan losses | 698 |
| | 712 |
| | 708 |
|
| Allowance for credit losses on lending-related commitments (a) | 40 |
| | 42 |
| | 46 |
|
| Total allowance for credit losses | 738 |
| | 754 |
| | 754 |
|
| | | | | | |
| Allowance for loan losses/Period-end total loans | 1.42 | % | | 1.45 | % | | 1.47 | % |
| Allowance for loan losses/Nonperforming loans | 209 |
| | 173 |
| | 134 |
|
| |
| (a) | Included in "Accrued expenses and other liabilities" on the consolidated balance sheets. |
| |
| • | The allowance for loan losses decreased to $698 million at March 31, 2018, or 1.42 percent of total loans, reflecting improvements in credit quality of the portfolio. |
| |
| • | Criticized loans decreased $111 million to $2.1 billion at March 31, 2018, compared to $2.2 billion at December 31, 2017, including a $40 million decrease in Energy. Criticized loans as a percentage of total loans were 4.3 percent at March 31, 2018, compared to 4.5 percent at December 31, 2017. Criticized loans are generally consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities. |
| |
| • | Nonperforming loans decreased $76 million to $334 million at March 31, 2018, compared to $410 million at December 31, 2017. Nonperforming loans as a percentage of total loans decreased to 0.68 percent at March 31, 2018, compared to 0.83 percent at December 31, 2017. |
| |
| • | Net charge-offs in the first quarter 2018 were $28 million with no net charge-offs in Energy. |
Full-Year 2018 Outlook
For full-year 2018 compared to full-year 2017, management expects the following, assuming a continuation of the current economic and rate environment as well as approximately $270 million of benefits from the GEAR Up initiative:
| |
| • | Growth in average loans in line with real Gross Domestic Product (GDP), reflecting increases in most lines of business, led by general Middle Market, Technology and Life Sciences, National Dealer Services and Mortgage Banker Finance, while remaining stable in Energy and Corporate Banking. |
| |
| • | Net interest income higher, reflecting rate increases and loan growth. |
| |
| ◦ | Full-year benefits from the 2017 and first quarter 2018 rate increases of $205 million to $215 million. |
| |
| ◦ | Elevated interest recoveries of $28 million in 2017 not expected to repeat in 2018. |
| |
| • | Provision for credit losses of 15 to 25 basis points and net charge-offs to remain low, with continued solid performance of the overall portfolio. |
| |
| • | Noninterest income higher by 4 percent (compared to full-year 2017 excluding the impact of accounting changes of $120 million and deferred compensation of $8 million) benefiting from the continued execution of GEAR Up opportunities helping to drive growth in treasury management income, card fees, brokerage fees and fiduciary income. |
| |
| • | Noninterest expenses higher by 1 percent (compared to full-year 2017 excluding the impact of accounting changes of $120 million and restructuring of $45 million) reflecting an additional $50 million benefit from the GEAR Up initiative. |
◦Restructuring charges of $47 million to $57 million.
| |
| ◦ | Continued higher technology expenditures and typical inflationary pressures. |
| |
| ◦ | Efficiency ratio to continue to improve. |
| |
| • | Income tax expense to be approximately 23 percent of pre-tax income, excluding any further tax impact from employee stock transactions. |
Second Quarter 2018 Outlook
In addition to the 2018 outlook, management expects the following for second quarter 2018 compared to first quarter 2018:
| |
| • | Growth in average loans due to seasonal increases, particularly in Mortgage Banker Finance. |
| |
| • | Net interest income higher, reflecting the full quarter impact from the first quarter 2018 rate increase and the return of loan growth. |
| |
| • | Provision for credit losses higher. |
| |
| • | Noninterest expenses modestly lower, primarily due to lower compensation expense. |
COMERICA REPORTS FIRST QUARTER 2018 NET INCOME OF $281 MILLION
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 March 31, 2018. A discussion of business segment and geographic market year-to-date results will be included in Comerica's First Quarter 2018 Form 10-Q.
Conference Call and Webcast
Comerica will host a conference call to review first quarter 2018 financial results at 7 a.m. CT Tuesday, April 17, 2018. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 22791268). 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 FIRST QUARTER 2018 NET INCOME OF $281 MILLION
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; 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; operational difficulties, failure of technology infrastructure or information security incidents; reliance on other companies to provide certain key components of business infrastructure; 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; unfavorable developments concerning credit quality; changes in regulation or oversight; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; transitions away from LIBOR towards new interest rate benchmarks; reductions in Comerica's credit rating; 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; the interdependence of financial service companies; the implementation of Comerica's strategies and business initiatives; changes in customer behavior; management's ability to maintain and expand customer relationships; the effectiveness of methods of reducing risk exposures; the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; the effects of recent tax reform and potential legislative, administrative or judicial changes or interpretations related to these and other tax regulations; any future strategic acquisitions or divestitures; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings or determinations; the effects of terrorist activities and other hostilities; changes in accounting standards; the critical nature of Comerica's accounting policies and the volatility of Comerica’s stock price. 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 11 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2017. 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 |
| | March 31, | December 31, | March 31, |
| (in millions, except per share data) | 2018 | 2017 | 2017 |
| PER COMMON SHARE AND COMMON STOCK DATA | | | |
| Diluted net income | $ | 1.59 |
| $ | 0.63 |
| $ | 1.11 |
|
| Cash dividends declared | 0.30 |
| 0.30 |
| 0.23 |
|
| | | | |
| Average diluted shares (in thousands) | 175,097 |
| 175,818 |
| 180,353 |
|
| KEY RATIOS | | | |
| Return on average common shareholders' equity | 14.37 | % | 5.58 | % | 10.42 | % |
| Return on average assets | 1.62 |
| 0.62 |
| 1.14 |
|
| Common equity tier 1 and tier 1 risk-based capital ratio (a) | 11.96 |
| 11.68 |
| 11.55 |
|
| Total risk-based capital ratio (a) | 14.10 |
| 13.84 |
| 13.72 |
|
| Leverage ratio (a) | 11.23 |
| 10.89 |
| 10.67 |
|
| Common equity ratio | 11.06 |
| 11.13 |
| 10.87 |
|
| Tangible common equity ratio (b) | 10.26 |
| 10.32 |
| 10.07 |
|
| AVERAGE BALANCES | | | |
| Commercial loans | $ | 30,145 |
| $ | 30,719 |
| $ | 29,694 |
|
| Real estate construction loans | 3,067 |
| 3,031 |
| 2,958 |
|
| Commercial mortgage loans | 9,217 |
| 9,054 |
| 8,977 |
|
| Lease financing | 464 |
| 470 |
| 570 |
|
| International loans | 996 |
| 1,122 |
| 1,210 |
|
| Residential mortgage loans | 2,011 |
| 2,014 |
| 1,963 |
|
| Consumer loans | 2,521 |
| 2,523 |
| 2,528 |
|
| Total loans | 48,421 |
| 48,933 |
| 47,900 |
|
| | | | |
| Earning assets | 65,012 |
| 66,167 |
| 66,648 |
|
| Total assets | 70,326 |
| 71,398 |
| 71,819 |
|
| | | | |
| Noninterest-bearing deposits | 29,869 |
| 31,780 |
| 30,459 |
|
| Interest-bearing deposits | 26,221 |
| 25,861 |
| 27,320 |
|
| Total deposits | 56,090 |
| 57,641 |
| 57,779 |
|
| | | | |
| Common shareholders' equity | 7,927 |
| 7,987 |
| 7,865 |
|
| NET INTEREST INCOME | | | |
| Net interest income | $ | 549 |
| $ | 545 |
| $ | 470 |
|
| Net interest margin | 3.41 | % | 3.27 | % | 2.85 | % |
| CREDIT QUALITY | | | |
| Total nonperforming assets | $ | 339 |
| $ | 415 |
| $ | 545 |
|
| | | | |
| Loans past due 90 days or more and still accruing | 36 |
| 35 |
| 26 |
|
| | | | |
| Net credit-related charge-offs | 28 |
| 16 |
| 33 |
|
| | | | |
| Allowance for loan losses | 698 |
| 712 |
| 708 |
|
| Allowance for credit losses on lending-related commitments | 40 |
| 42 |
| 46 |
|
| Total allowance for credit losses | 738 |
| 754 |
| 754 |
|
| | | | |
| Allowance for loan losses as a percentage of total loans | 1.42 | % | 1.45 | % | 1.47 | % |
| Net credit-related charge-offs as a percentage of average total loans | 0.23 |
| 0.13 |
| 0.28 |
|
| Nonperforming assets as a percentage of total loans and foreclosed property | 0.69 |
| 0.84 |
| 1.13 |
|
| Allowance for loan losses as a percentage of total nonperforming loans | 209 |
| 173 |
| 134 |
|
| |
| (a) | March 31, 2018 ratios are estimated. |
| |
| (b) | See Reconciliation of Non-GAAP Financial Measures. |
|
| | | | | | | | | |
| CONSOLIDATED BALANCE SHEETS |
| Comerica Incorporated and Subsidiaries | | | |
| | | | |
| | March 31, | December 31, | March 31, |
| (in millions, except share data) | 2018 | 2017 | 2017 |
| | (unaudited) | | (unaudited) |
| ASSETS | | | |
| Cash and due from banks | $ | 1,173 |
| $ | 1,438 |
| $ | 1,176 |
|
| | | | |
| Interest-bearing deposits with banks | 5,663 |
| 4,407 |
| 7,143 |
|
| Other short-term investments | 133 |
| 96 |
| 92 |
|
| | | | |
| Investment securities available-for-sale | 11,971 |
| 10,938 |
| 10,830 |
|
| Investment securities held-to-maturity | — |
| 1,266 |
| 1,508 |
|
| | | | |
| Commercial loans | 30,909 |
| 31,060 |
| 30,215 |
|
| Real estate construction loans | 3,114 |
| 2,961 |
| 2,930 |
|
| Commercial mortgage loans | 9,272 |
| 9,159 |
| 9,021 |
|
| Lease financing | 464 |
| 468 |
| 550 |
|
| International loans | 964 |
| 983 |
| 1,106 |
|
| Residential mortgage loans | 2,003 |
| 1,988 |
| 1,944 |
|
| Consumer loans | 2,514 |
| 2,554 |
| 2,537 |
|
| Total loans | 49,240 |
| 49,173 |
| 48,303 |
|
| Less allowance for loan losses | (698 | ) | (712 | ) | (708 | ) |
| Net loans | 48,542 |
| 48,461 |
| 47,595 |
|
| | | | |
| Premises and equipment | 468 |
| 466 |
| 488 |
|
| Accrued income and other assets | 4,385 |
| 4,495 |
| 4,144 |
|
| Total assets | $ | 72,335 |
| $ | 71,567 |
| $ | 72,976 |
|
| | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | |
| Noninterest-bearing deposits | $ | 30,961 |
| $ | 32,071 |
| $ | 31,892 |
|
| | | | |
| Money market and interest-bearing checking deposits | 22,355 |
| 21,500 |
| 22,177 |
|
| Savings deposits | 2,233 |
| 2,152 |
| 2,138 |
|
| Customer certificates of deposit | 2,071 |
| 2,165 |
| 2,597 |
|
| Foreign office time deposits | 15 |
| 15 |
| 59 |
|
| Total interest-bearing deposits | 26,674 |
| 25,832 |
| 26,971 |
|
| Total deposits | 57,635 |
| 57,903 |
| 58,863 |
|
| | | | |
| Short-term borrowings | 48 |
| 10 |
| 41 |
|
| Accrued expenses and other liabilities | 1,058 |
| 1,069 |
| 989 |
|
| Medium- and long-term debt | 5,594 |
| 4,622 |
| 5,153 |
|
| Total liabilities | 64,335 |
| 63,604 |
| 65,046 |
|
| | | | |
| Common stock - $5 par value: | | | |
| Authorized - 325,000,000 shares | | | |
| Issued - 228,164,824 shares | 1,141 |
| 1,141 |
| 1,141 |
|
| Capital surplus | 2,134 |
| 2,122 |
| 2,106 |
|
| Accumulated other comprehensive loss | (553 | ) | (451 | ) | (379 | ) |
| Retained earnings | 8,110 |
| 7,887 |
| 7,431 |
|
| Less cost of common stock in treasury - 55,690,402 shares at 3/31/18, 55,306,483 shares at 12/31/17, and 50,732,795 shares at 3/31/17 | (2,832 | ) | (2,736 | ) | (2,369 | ) |
| Total shareholders' equity | 8,000 |
| 7,963 |
| 7,930 |
|
| Total liabilities and shareholders' equity | $ | 72,335 |
| $ | 71,567 |
| $ | 72,976 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | | | | | |
| | | | | | | | | | | | |
| | First | Fourth | Third | Second | First | | First Quarter 2018 |
| | Quarter | Quarter | Quarter | Quarter | Quarter | | Fourth Quarter 2017 | | First Quarter 2017 |
| (in millions, except per share data) | 2018 | 2017 | 2017 | 2017 | 2017 | | Amount | Percent | | Amount | Percent |
| INTEREST INCOME | | | | | | | | | | | |
| Interest and fees on loans | $ | 509 |
| $ | 498 |
| $ | 500 |
| $ | 453 |
| $ | 421 |
| | $ | 11 |
| 2 | % | | $ | 88 |
| 21 | % |
| Interest on investment securities | 64 |
| 64 |
| 63 |
| 62 |
| 61 |
| | — |
| — |
| | 3 |
| 3 |
|
| Interest on short-term investments | 17 |
| 16 |
| 16 |
| 14 |
| 14 |
| | 1 |
| 6 |
| | 3 |
| 31 |
|
| Total interest income | 590 |
| 578 |
| 579 |
| 529 |
| 496 |
| | 12 |
| 2 |
| | 94 |
| 19 |
|
| INTEREST EXPENSE | | | | | | | | | | | |
| Interest on deposits | 16 |
| 13 |
| 11 |
| 9 |
| 9 |
| | 3 |
| 31 |
| | 7 |
| 72 |
|
| Interest on short-term borrowings | — |
| — |
| 3 |
| — |
| — |
| | — |
| — |
| | — |
| — |
|
| Interest on medium- and long-term debt | 25 |
| 20 |
| 19 |
| 20 |
| 17 |
| | 5 |
| 28 |
| | 8 |
| 51 |
|
| Total interest expense | 41 |
| 33 |
| 33 |
| 29 |
| 26 |
| | 8 |
| 28 |
| | 15 |
| 59 |
|
| Net interest income | 549 |
| 545 |
| 546 |
| 500 |
| 470 |
| | 4 |
| 1 |
| | 79 |
| 17 |
|
| Provision for credit losses | 12 |
| 17 |
| 24 |
| 17 |
| 16 |
| | (5 | ) | (29 | ) | | (4 | ) | (23 | ) |
Net interest income after provision for credit losses | 537 |
| 528 |
| 522 |
| 483 |
| 454 |
| | 9 |
| 2 |
| | 83 |
| 18 |
|
| NONINTEREST INCOME | | | | | | | | | | | |
| Card fees | 59 |
| 91 |
| 85 |
| 80 |
| 77 |
| | (32 | ) | (35 | ) | | (18 | ) | (23 | ) |
| Service charges on deposit accounts | 54 |
| 55 |
| 57 |
| 57 |
| 58 |
| | (1 | ) | (3 | ) | | (4 | ) | (6 | ) |
| Fiduciary income | 52 |
| 50 |
| 48 |
| 51 |
| 49 |
| | 2 |
| 4 |
| | 3 |
| 5 |
|
| Commercial lending fees | 18 |
| 22 |
| 21 |
| 22 |
| 20 |
| | (4 | ) | (18 | ) | | (2 | ) | (10 | ) |
| Letter of credit fees | 10 |
| 11 |
| 11 |
| 11 |
| 12 |
| | (1 | ) | (1 | ) | | (2 | ) | (14 | ) |
| Bank-owned life insurance | 9 |
| 12 |
| 12 |
| 9 |
| 10 |
| | (3 | ) | (22 | ) | | (1 | ) | (9 | ) |
| Foreign exchange income | 12 |
| 12 |
| 11 |
| 11 |
| 11 |
| | — |
| — |
| | 1 |
| 7 |
|
| Brokerage fees | 7 |
| 6 |
| 6 |
| 6 |
| 5 |
| | 1 |
| 16 |
| | 2 |
| 27 |
|
| Net securities losses | — |
| — |
| (1 | ) | (2 | ) | — |
| | — |
| — |
| | — |
| — |
|
| Other noninterest income | 23 |
| 26 |
| 25 |
| 31 |
| 29 |
| | (3 | ) | (15 | ) | | (6 | ) | (22 | ) |
| Total noninterest income | 244 |
| 285 |
| 275 |
| 276 |
| 271 |
| | (41 | ) | (14 | ) | | (27 | ) | (10 | ) |
| NONINTEREST EXPENSES | | | | | | | | | | | |
| Salaries and benefits expense | 255 |
| 248 |
| 237 |
| 231 |
| 245 |
| | 7 |
| 3 |
| | 10 |
| 4 |
|
| Outside processing fee expense | 61 |
| 99 |
| 92 |
| 88 |
| 87 |
| | (38 | ) | (38 | ) | | (26 | ) | (30 | ) |
| Net occupancy expense | 38 |
| 40 |
| 38 |
| 38 |
| 38 |
| | (2 | ) | (6 | ) | | — |
| — |
|
| Equipment expense | 11 |
| 11 |
| 12 |
| 11 |
| 11 |
| | — |
| — |
| | — |
| — |
|
| Restructuring charges | 16 |
| 13 |
| 7 |
| 14 |
| 11 |
| | 3 |
| 31 |
| | 5 |
| 47 |
|
| Software expense | 31 |
| 31 |
| 35 |
| 31 |
| 29 |
| | — |
| — |
| | 2 |
| 8 |
|
| FDIC insurance expense | 13 |
| 13 |
| 13 |
| 12 |
| 13 |
| | — |
| — |
| | — |
| — |
|
| Advertising expense | 6 |
| 9 |
| 8 |
| 7 |
| 4 |
| | (3 | ) | (30 | ) | | 2 |
| 46 |
|
| Litigation-related expense | — |
| — |
| — |
| — |
| (2 | ) | | — |
| — |
| | 2 |
| n/m |
|
| Other noninterest expenses | 15 |
| 19 |
| 21 |
| 25 |
| 21 |
| | (4 | ) | (26 | ) | | (6 | ) | (26 | ) |
| Total noninterest expenses | 446 |
| 483 |
| 463 |
| 457 |
| 457 |
| | (37 | ) | (8 | ) | | (11 | ) | (2 | ) |
| Income before income taxes | 335 |
| 330 |
| 334 |
| 302 |
| 268 |
| | 5 |
| 1 |
| | 67 |
| 25 |
|
| Provision for income taxes | 54 |
| 218 |
| 108 |
| 99 |
| 66 |
| | (164 | ) | (75 | ) | | (12 | ) | (19 | ) |
| NET INCOME | 281 |
| 112 |
| 226 |
| 203 |
| 202 |
| | 169 |
| 150 |
| | 79 |
| 39 |
|
| Less income allocated to participating securities | 2 |
| — |
| 2 |
| 1 |
| 2 |
| | 2 |
| n/m |
| | — |
| — |
|
| Net income attributable to common shares | $ | 279 |
| $ | 112 |
| $ | 224 |
| $ | 202 |
| $ | 200 |
| | $ | 167 |
| 150 | % | | $ | 79 |
| 39 | % |
| Earnings per common share: | | | | | | | | | | | |
| Basic | $ | 1.62 |
| $ | 0.65 |
| $ | 1.29 |
| $ | 1.15 |
| $ | 1.15 |
| | $ | 0.97 |
| 149 | % | | $ | 0.47 |
| 41 | % |
| Diluted | 1.59 |
| 0.63 |
| 1.26 |
| 1.13 |
| 1.11 |
| | 0.96 |
| 152 |
| | 0.48 |
| 43 |
|
| | | | | | | |
| | | | |
| Comprehensive income | 178 |
| 107 |
| 228 |
| 221 |
| 206 |
| | 71 |
| 67 |
| | (28 | ) | (13 | ) |
| | | | | | | | | | | | |
| Cash dividends declared on common stock | 52 |
| 52 |
| 53 |
| 46 |
| 42 |
| | — |
| — |
| | 10 |
| 26 |
|
| Cash dividends declared per common share | 0.30 |
| 0.30 |
| 0.30 |
| 0.26 |
| 0.23 |
| | — |
| — |
| | 0.07 |
| 30 |
|
n/m - not meaningful
|
| | | | | | | | | | | | | | | | |
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
|
| Comerica Incorporated and Subsidiaries | | | | | | |
| | | | | | | |
| | 2018 | | 2017 |
| (in millions) | 1st Qtr | | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr |
| | | | | | | |
| Balance at beginning of period | $ | 712 |
| | $ | 712 |
| $ | 705 |
| $ | 708 |
| $ | 730 |
|
| | | | | | | |
| Loan charge-offs: | | | | | | |
| Commercial | 36 |
| | 26 |
| 35 |
| 34 |
| 38 |
|
| Commercial mortgage | — |
| | 1 |
| — |
| 1 |
| 1 |
|
| Lease financing | — |
| | — |
| 1 |
| — |
| — |
|
| International | — |
| | 1 |
| — |
| 2 |
| 3 |
|
| Consumer | 1 |
| | 1 |
| 1 |
| 2 |
| 2 |
|
| Total loan charge-offs | 37 |
| | 29 |
| 37 |
| 39 |
| 44 |
|
| | | | | | | |
| Recoveries on loans previously charged-off: | | | | | | |
| Commercial | 8 |
| | 7 |
| 6 |
| 17 |
| 7 |
|
| Real estate construction | — |
| | — |
| 1 |
| — |
| — |
|
| Commercial mortgage | — |
| | 2 |
| 2 |
| 3 |
| 2 |
|
| International | — |
| | 2 |
| 1 |
| — |
| — |
|
| Residential mortgage | — |
| | 1 |
| — |
| — |
| — |
|
| Consumer | 1 |
| | 1 |
| 2 |
| 1 |
| 2 |
|
| Total recoveries | 9 |
| | 13 |
| 12 |
| 21 |
| 11 |
|
| Net loan charge-offs | 28 |
| | 16 |
| 25 |
| 18 |
| 33 |
|
| Provision for loan losses | 14 |
| | 16 |
| 31 |
| 15 |
| 11 |
|
| Foreign currency translation adjustment | — |
| | — |
| 1 |
| — |
| — |
|
| Balance at end of period | $ | 698 |
| | $ | 712 |
| $ | 712 |
| $ | 705 |
| $ | 708 |
|
| | | | | | | |
| Allowance for loan losses as a percentage of total loans | 1.42 | % | | 1.45 | % | 1.45 | % | 1.43 | % | 1.47 | % |
| | | | | | | |
| Net loan charge-offs as a percentage of average total loans | 0.23 |
| | 0.13 |
| 0.21 |
| 0.15 |
| 0.28 |
|
|
| | | | | | | | | | | | | | | | |
| ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | |
| | | | | | | |
| | 2018 | | 2017 |
| (in millions) | 1st Qtr | | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr |
| | | | | | | |
| Balance at beginning of period | $ | 42 |
| | $ | 41 |
| $ | 48 |
| $ | 46 |
| $ | 41 |
|
| Add: Provision for credit losses on lending-related commitments | (2 | ) | | 1 |
| (7 | ) | 2 |
| 5 |
|
| Balance at end of period | $ | 40 |
| | $ | 42 |
| $ | 41 |
| $ | 48 |
| $ | 46 |
|
| | | | | | | |
|
| | | | | | | | | | | | | | | | |
| NONPERFORMING ASSETS (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | |
| | | | | | | |
| | 2018 | | 2017 |
| (in millions) | 1st Qtr | | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr |
| | | | | | | |
| SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS | | |
| Nonaccrual loans: | | | | | | |
| Business loans: | | | | | | |
| Commercial | $ | 242 |
| | $ | 309 |
| $ | 345 |
| $ | 379 |
| $ | 400 |
|
| Commercial mortgage | 29 |
| | 31 |
| 35 |
| 41 |
| 41 |
|
| Lease financing | 3 |
| | 4 |
| 8 |
| 8 |
| 6 |
|
| International | 4 |
| | 6 |
| 6 |
| 6 |
| 8 |
|
| Total nonaccrual business loans | 278 |
| | 350 |
| 394 |
| 434 |
| 455 |
|
| Retail loans: | | | | | | |
| Residential mortgage | 29 |
| | 31 |
| 28 |
| 36 |
| 39 |
|
| Consumer: | | | | | | |
| Home equity | 19 |
| | 21 |
| 22 |
| 23 |
| 26 |
|
| Other consumer | — |
| | — |
| — |
| — |
| 1 |
|
| Total consumer | 19 |
| | 21 |
| 22 |
| 23 |
| 27 |
|
| Total nonaccrual retail loans | 48 |
| | 52 |
| 50 |
| 59 |
| 66 |
|
| Total nonaccrual loans | 326 |
| | 402 |
| 444 |
| 493 |
| 521 |
|
| Reduced-rate loans | 8 |
| | 8 |
| 8 |
| 8 |
| 8 |
|
| Total nonperforming loans | 334 |
| | 410 |
| 452 |
| 501 |
| 529 |
|
| Foreclosed property | 5 |
| | 5 |
| 6 |
| 18 |
| 16 |
|
| Total nonperforming assets | $ | 339 |
| | $ | 415 |
| $ | 458 |
| $ | 519 |
| $ | 545 |
|
| | | | | | | |
| Nonperforming loans as a percentage of total loans | 0.68 | % | | 0.83 | % | 0.92 | % | 1.01 | % | 1.10 | % |
Nonperforming assets as a percentage of total loans and foreclosed property | 0.69 |
| | 0.84 |
| 0.93 |
| 1.05 |
| 1.13 |
|
Allowance for loan losses as a percentage of total nonperforming loans | 209 |
| | 173 |
| 157 |
| 141 |
| 134 |
|
| Loans past due 90 days or more and still accruing | $ | 36 |
| | $ | 35 |
| $ | 12 |
| $ | 30 |
| $ | 26 |
|
| | | | | | | |
| ANALYSIS OF NONACCRUAL LOANS | | | | | | |
| Nonaccrual loans at beginning of period | $ | 402 |
| | $ | 444 |
| $ | 493 |
| $ | 521 |
| $ | 582 |
|
| Loans transferred to nonaccrual (a) | 71 |
| | 73 |
| 66 |
| 54 |
| 104 |
|
| Nonaccrual business loan gross charge-offs (b) | (36 | ) | | (28 | ) | (36 | ) | (37 | ) | (42 | ) |
| Loans transferred to accrual status (a) | (3 | ) | | — |
| — |
| — |
| — |
|
| Nonaccrual business loans sold (c) | (10 | ) | | (22 | ) | (10 | ) | — |
| (8 | ) |
| Payments/Other (d) | (98 | ) | | (65 | ) | (69 | ) | (45 | ) | (115 | ) |
| Nonaccrual loans at end of period | $ | 326 |
| | $ | 402 |
| $ | 444 |
| $ | 493 |
| $ | 521 |
|
(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 |
| | $ | 28 |
| $ | 36 |
| $ | 37 |
| $ | 42 |
|
| Consumer and residential mortgage loans | 1 |
| | 1 |
| 1 |
| 2 |
| 2 |
|
| Total gross loan charge-offs | $ | 37 |
| | $ | 29 |
| $ | 37 |
| $ | 39 |
| $ | 44 |
|
| (c) Analysis of loans sold: | | | | | | |
| Nonaccrual business loans | $ | 10 |
| | $ | 22 |
| $ | 10 |
| $ | — |
| $ | 8 |
|
| Performing criticized loans | 8 |
| | 12 |
| — |
| — |
| — |
|
| Total criticized loans sold | $ | 18 |
| | $ | 34 |
| $ | 10 |
| $ | — |
| $ | 8 |
|
| (d) 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 | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Three Months Ended |
| | March 31, 2018 | | December 31, 2017 | | March 31, 2017 |
| | Average | | Average | | Average | | Average | | Average | | Average |
| (dollar amounts in millions) | Balance | Interest | Rate | | Balance | Interest | Rate | | Balance | Interest | Rate |
| | | | | | | | | | | | |
| Commercial loans | $ | 30,145 |
| $ | 315 |
| 4.24 | % | | $ | 30,719 |
| $ | 311 |
| 4.02 | % | | $ | 29,694 |
| $ | 256 |
| 3.50 | % |
| Real estate construction loans | 3,067 |
| 36 |
| 4.74 |
| | 3,031 |
| 34 |
| 4.44 |
| | 2,958 |
| 28 |
| 3.82 |
|
| Commercial mortgage loans | 9,217 |
| 98 |
| 4.32 |
| | 9,054 |
| 93 |
| 4.08 |
| | 8,977 |
| 83 |
| 3.73 |
|
| Lease financing | 464 |
| 5 |
| 4.22 |
| | 470 |
| 4 |
| 3.38 |
| | 570 |
| 5 |
| 3.29 |
|
| International loans | 996 |
| 11 |
| 4.60 |
| | 1,122 |
| 12 |
| 4.41 |
| | 1,210 |
| 11 |
| 3.77 |
|
| Residential mortgage loans | 2,011 |
| 18 |
| 3.67 |
| | 2,014 |
| 19 |
| 3.66 |
| | 1,963 |
| 17 |
| 3.57 |
|
| Consumer loans | 2,521 |
| 26 |
| 4.13 |
| | 2,523 |
| 25 |
| 3.92 |
| | 2,528 |
| 21 |
| 3.42 |
|
| Total loans | 48,421 |
| 509 |
| 4.26 |
| | 48,933 |
| 498 |
| 4.04 |
| | 47,900 |
| 421 |
| 3.56 |
|
| | | | | | | | | | | | |
| Mortgage-backed securities | 9,168 |
| 52 |
| 2.21 |
| | 9,315 |
| 52 |
| 2.19 |
| | 9,306 |
| 50 |
| 2.14 |
|
| Other investment securities | 2,743 |
| 12 |
| 1.72 |
| | 2,840 |
| 12 |
| 1.69 |
| | 2,892 |
| 11 |
| 1.59 |
|
| Total investment securities | 11,911 |
| 64 |
| 2.09 |
| | 12,155 |
| 64 |
| 2.07 |
| | 12,198 |
| 61 |
| 2.01 |
|
| | | | | | | | | | | | |
| Interest-bearing deposits with banks | 4,548 |
| 17 |
| 1.55 |
| | 4,987 |
| 16 |
| 1.30 |
| | 6,458 |
| 14 |
| 0.83 |
|
| Other short-term investments | 132 |
| — |
| 0.60 |
| | 92 |
| — |
| 0.58 |
| | 92 |
| — |
| 0.67 |
|
| Total earning assets | 65,012 |
| 590 |
| 3.66 |
| | 66,167 |
| 578 |
| 3.46 |
| | 66,648 |
| 496 |
| 3.01 |
|
| | | | | | | | | | | | |
| Cash and due from banks | 1,261 |
| | | | 1,274 |
| | | | 1,180 |
| | |
| Allowance for loan losses | (718 | ) | | | | (726 | ) | | | | (741 | ) | | |
| Accrued income and other assets | 4,771 |
| | | | 4,683 |
| | | | 4,732 |
| | |
| Total assets | $ | 70,326 |
| | | | $ | 71,398 |
| | | | $ | 71,819 |
| | |
| | | | | | | | | | | | |
| Money market and interest-bearing checking deposits | $ | 21,891 |
| 14 |
| 0.26 |
| | $ | 21,402 |
| 10 |
| 0.19 |
| | $ | 22,477 |
| 7 |
| 0.12 |
|
| Savings deposits | 2,177 |
| — |
| 0.03 |
| | 2,152 |
| — |
| 0.02 |
| | 2,085 |
| — |
| 0.02 |
|
| Customer certificates of deposit | 2,122 |
| 2 |
| 0.34 |
| | 2,259 |
| 3 |
| 0.35 |
| | 2,715 |
| 2 |
| 0.38 |
|
| Foreign office time deposits | 31 |
| — |
| 1.14 |
| | 48 |
| — |
| 0.76 |
| | 43 |
| — |
| 0.49 |
|
| Total interest-bearing deposits | 26,221 |
| 16 |
| 0.25 |
| | 25,861 |
| 13 |
| 0.19 |
| | 27,320 |
| 9 |
| 0.14 |
|
| | | | | | | | | | | | |
| Short-term borrowings | 35 |
| — |
| 1.47 |
| | 116 |
| — |
| 1.16 |
| | 22 |
| — |
| 0.73 |
|
| Medium- and long-term debt | 5,192 |
| 25 |
| 1.96 |
| | 4,631 |
| 20 |
| 1.69 |
| | 5,157 |
| 17 |
| 1.30 |
|
| Total interest-bearing sources | 31,448 |
| 41 |
| 0.53 |
| | 30,608 |
| 33 |
| 0.42 |
| | 32,499 |
| 26 |
| 0.33 |
|
| | | | | | | | | | | | |
| Noninterest-bearing deposits | 29,869 |
| | | | 31,780 |
| | | | 30,459 |
| | |
| Accrued expenses and other liabilities | 1,082 |
| | | | 1,023 |
| | | | 996 |
| | |
| Total shareholders' equity | 7,927 |
| | | | 7,987 |
| | | | 7,865 |
| | |
| Total liabilities and shareholders' equity | $ | 70,326 |
| | | | $ | 71,398 |
| | | | $ | 71,819 |
| | |
| | | | | | | | | | | | |
| Net interest income/rate spread | | $ | 549 |
| 3.13 |
| | | $ | 545 |
| 3.04 |
| | | $ | 470 |
| 2.68 |
|
| | | | | | | | | | | | |
| Impact of net noninterest-bearing sources of funds | | | 0.28 |
| | | | 0.23 |
| | | | 0.17 |
|
| Net interest margin (as a percentage of average earning assets) | | | 3.41 | % | | | | 3.27 | % | | | | 2.85 | % |
|
| | | | | | | | | | | | | | | |
| CONSOLIDATED STATISTICAL DATA (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | |
| | | | | | |
| | March 31, | December 31, | September 30, | June 30, | March 31, |
| (in millions, except per share data) | 2018 | 2017 | 2017 | 2017 | 2017 |
| | | | | | |
| Commercial loans: | | | | | |
| Floor plan | $ | 4,302 |
| $ | 4,359 |
| $ | 3,960 |
| $ | 4,346 |
| $ | 4,191 |
|
| Other | 26,607 |
| 26,701 |
| 27,102 |
| 27,103 |
| 26,024 |
|
| Total commercial loans | 30,909 |
| 31,060 |
| 31,062 |
| 31,449 |
| 30,215 |
|
| Real estate construction loans | 3,114 |
| 2,961 |
| 3,018 |
| 2,857 |
| 2,930 |
|
| Commercial mortgage loans | 9,272 |
| 9,159 |
| 8,985 |
| 8,974 |
| 9,021 |
|
| Lease financing | 464 |
| 468 |
| 475 |
| 472 |
| 550 |
|
| International loans | 964 |
| 983 |
| 1,159 |
| 1,145 |
| 1,106 |
|
| Residential mortgage loans | 2,003 |
| 1,988 |
| 1,999 |
| 1,976 |
| 1,944 |
|
| Consumer loans: | | | | | |
| Home equity | 1,763 |
| 1,816 |
| 1,790 |
| 1,796 |
| 1,790 |
|
| Other consumer | 751 |
| 738 |
| 721 |
| 739 |
| 747 |
|
| Total consumer loans | 2,514 |
| 2,554 |
| 2,511 |
| 2,535 |
| 2,537 |
|
| Total loans | $ | 49,240 |
| $ | 49,173 |
| $ | 49,209 |
| $ | 49,408 |
| $ | 48,303 |
|
| | | | | | |
| Goodwill | $ | 635 |
| $ | 635 |
| $ | 635 |
| $ | 635 |
| $ | 635 |
|
| Core deposit intangible | 5 |
| 6 |
| 6 |
| 7 |
| 7 |
|
| Other intangibles | 2 |
| 2 |
| 2 |
| 2 |
| 3 |
|
| | | | | | |
| Common equity tier 1 capital (a) | 7,912 |
| 7,773 |
| 7,752 |
| 7,705 |
| 7,667 |
|
| Risk-weighted assets (a) | 66,157 |
| 66,575 |
| 67,341 |
| 66,928 |
| 66,355 |
|
| | | | | | |
| Common equity tier 1 and tier 1 risk-based capital ratio (a) | 11.96 | % | 11.68 | % | 11.51 | % | 11.51 | % | 11.55 | % |
| Total risk-based capital ratio (a) | 14.10 |
| 13.84 |
| 13.65 |
| 13.66 |
| 13.72 |
|
| Leverage ratio (a) | 11.23 |
| 10.89 |
| 10.87 |
| 10.80 |
| 10.67 |
|
| Common equity ratio | 11.06 |
| 11.13 |
| 11.16 |
| 11.18 |
| 10.87 |
|
| Tangible common equity ratio (b) | 10.26 |
| 10.32 |
| 10.35 |
| 10.37 |
| 10.07 |
|
| | | | | | |
| Common shareholders' equity per share of common stock | $ | 46.38 |
| $ | 46.07 |
| $ | 46.09 |
| $ | 45.39 |
| $ | 44.69 |
|
| Tangible common equity per share of common stock (b) | 42.66 |
| 42.34 |
| 42.39 |
| 41.73 |
| 41.05 |
|
| Market value per share for the quarter: | | | | | |
| High | 102.66 |
| 88.22 |
| 76.76 |
| 75.30 |
| 75.00 |
|
| Low | 86.02 |
| 74.16 |
| 64.04 |
| 64.75 |
| 64.27 |
|
| Close | 95.93 |
| 86.81 |
| 76.26 |
| 73.24 |
| 68.58 |
|
| | | | | | |
| Quarterly ratios: | | | | | |
| Return on average common shareholders' equity | 14.37 | % | 5.58 | % | 11.17 | % | 10.26 | % | 10.42 | % |
| Return on average assets | 1.62 |
| 0.62 |
| 1.25 |
| 1.14 |
| 1.14 |
|
| Efficiency ratio (c) | 56.33 |
| 58.14 |
| 56.33 |
| 58.99 |
| 61.71 |
|
| | | | | | |
| Number of banking centers | 438 |
| 438 |
| 439 |
| 439 |
| 458 |
|
| | | | | | |
| Number of employees - full time equivalent | 7,942 |
| 7,999 |
| 7,974 |
| 8,017 |
| 8,044 |
|
| |
| (a) | March 31, 2018 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 and noninterest income excluding net securities gains (losses). |
|
| | | | | | | | | | | | | | | | | | | | |
| 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, 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 | — |
| — |
| — |
| — |
| 202 |
| — |
| 202 |
|
| Other comprehensive income, net of tax | — |
| — |
| — |
| 4 |
| — |
| — |
| 4 |
|
| Cash dividends declared on common stock ($0.23 per share) | — |
| — |
| — |
| — |
| (42 | ) | — |
| (42 | ) |
| Purchase of common stock | (1.7 | ) | — |
| — |
| — |
| — |
| (118 | ) | (118 | ) |
| Net issuance of common stock under employee stock plans | 2.3 |
| — |
| (25 | ) | — |
| (14 | ) | 108 |
| 69 |
|
| Net issuance of common stock for warrants | 1.5 |
| — |
| (24 | ) | — |
| (44 | ) | 68 |
| — |
|
| Share-based compensation | — |
| — |
| 18 |
| — |
| — |
| — |
| 18 |
|
| Other | — |
| — |
| (1 | ) | — |
| — |
| 1 |
| — |
|
| BALANCE AT MARCH 31, 2017 | 177.4 |
| $ | 1,141 |
| $ | 2,106 |
| $ | (379 | ) | $ | 7,431 |
| $ | (2,369 | ) | $ | 7,930 |
|
| | | | | | | | |
| BALANCE AT DECEMBER 31, 2017 | 172.9 |
| $ | 1,141 |
| $ | 2,122 |
| $ | (451 | ) | $ | 7,887 |
| $ | (2,736 | ) | $ | 7,963 |
|
| Cumulative effect of change in accounting principles | — |
| — |
| — |
| 1 |
| 14 |
| — |
| 15 |
|
| Net income | — |
| — |
| — |
| — |
| 281 |
| — |
| 281 |
|
| Other comprehensive loss, net of tax | — |
| — |
| — |
| (103 | ) | — |
| — |
| (103 | ) |
| Cash dividends declared on common stock ($0.30 per share) | — |
| — |
| — |
| — |
| (52 | ) | — |
| (52 | ) |
| Purchase of common stock | (1.7 | ) | — |
| — |
| — |
| — |
| (159 | ) | (159 | ) |
| Net issuance of common stock under employee stock plans | 1.2 |
| — |
| (11 | ) | — |
| (17 | ) | 59 |
| 31 |
|
| Net issuance of common stock for warrants | 0.1 |
| — |
| (1 | ) | — |
| (3 | ) | 4 |
| — |
|
| Share-based compensation | — |
| — |
| 24 |
| — |
| — |
| — |
| 24 |
|
| BALANCE AT MARCH 31, 2018 | 172.5 |
| $ | 1,141 |
| $ | 2,134 |
| $ | (553 | ) | $ | 8,110 |
| $ | (2,832 | ) | $ | 8,000 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| BUSINESS SEGMENT FINANCIAL RESULTS (unaudited) |
| Comerica Incorporated and Subsidiaries | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| (dollar amounts in millions) | Business | | Retail | | Wealth | | | | | | |
| Three Months Ended March 31, 2018 | Bank | | Bank | | Management | | Finance | | Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income | $ | 330 |
| | $ | 165 |
| | $ | 41 |
| | $ | 1 |
| | $ | 12 |
| | $ | 549 |
|
| Provision for credit losses | 10 |
| | 4 |
| | (4 | ) | | — |
| | 2 |
| | 12 |
|
| Noninterest income | 121 |
| | 42 |
| | 68 |
| | 11 |
| | 2 |
| | 244 |
|
| Noninterest expenses | 184 |
| | 177 |
| | 72 |
| | (1 | ) | | 14 |
| | 446 |
|
| Provision (benefit) for income taxes | 59 |
| | 6 |
| | 10 |
| | 1 |
| | (22 | ) | (a) | 54 |
|
| Net income | $ | 198 |
| | $ | 20 |
| | $ | 31 |
| | $ | 12 |
| | $ | 20 |
| | $ | 281 |
|
| Net credit-related charge-offs (recoveries) | $ | 18 |
| | $ | 12 |
| | $ | (2 | ) | | $ | — |
| | $ | — |
| | $ | 28 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 38,911 |
| | $ | 6,427 |
| | $ | 5,373 |
| | $ | 13,779 |
| | $ | 5,836 |
| | $ | 70,326 |
|
| Loans | 37,368 |
| | 5,807 |
| | 5,246 |
| | — |
| | — |
| | 48,421 |
|
| Deposits | 27,314 |
| | 24,064 |
| | 3,796 |
| | 823 |
| | 93 |
| | 56,090 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (b) | 2.07 | % | | 0.33 | % | | 2.30 | % | | N/M |
| | N/M |
| | 1.62 | % |
| Efficiency ratio (c) | 40.72 |
| | 85.03 |
| | 67.10 |
| | N/M |
| | N/M |
| | 56.33 |
|
| | | | | | | | | | | | |
| | Business | | Retail | | Wealth | | | | | | |
| Three Months Ended December 31, 2017 | Bank | | Bank | | Management | | Finance | | Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income (expense) | $ | 348 |
| | $ | 170 |
| | $ | 43 |
| | $ | (25 | ) | | $ | 9 |
| | $ | 545 |
|
| Provision for credit losses | 20 |
| | (3 | ) | | (5 | ) | | — |
| | 5 |
| | 17 |
|
| Noninterest income | 156 |
| | 49 |
| | 64 |
| | 14 |
| | 2 |
| | 285 |
|
| Noninterest expenses | 210 |
| | 189 |
| | 73 |
| | (1 | ) | | 12 |
| | 483 |
|
| Provision (benefit) for income taxes | 98 |
| | 12 |
| | 15 |
| | (8 | ) | | 101 |
| (a) | 218 |
|
| Net income (loss) | $ | 176 |
| | $ | 21 |
| | $ | 24 |
| | $ | (2 | ) | | $ | (107 | ) | | $ | 112 |
|
| Net credit-related charge-offs (recoveries) | $ | 14 |
| | $ | 3 |
| | $ | (1 | ) | | $ | — |
| | $ | — |
| | $ | 16 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 39,300 |
| | $ | 6,445 |
| | $ | 5,352 |
| | $ | 13,940 |
| | $ | 6,361 |
| | $ | 71,398 |
|
| Loans | 37,873 |
| | 5,835 |
| | 5,225 |
| | — |
| | — |
| | 48,933 |
|
| Deposits | 28,717 |
| | 24,232 |
| | 4,184 |
| | 394 |
| | 114 |
| | 57,641 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (b) | 1.78 | % | | 0.33 | % | | 1.78 | % | | N/M |
| | N/M |
| | 0.62 | % |
| Efficiency ratio (c) | 41.72 |
| | 85.86 |
| | 68.50 |
| | N/M |
| | N/M |
| | 58.14 |
|
| | | | | | | | | | | | |
| | 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 | ) | (a) | 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 (b) | 1.89 | % | | 0.18 | % | | 1.71 | % | | N/M |
| | N/M |
| | 1.14 | % |
| Efficiency ratio (c) | 41.39 |
| | 86.01 |
| | 67.17 |
| | N/M |
| | N/M |
| | 61.71 |
|
| |
| (a) | Included tax benefits of $19 million, $4 million and $24 million from employee stock transactions for the first quarter 2018 and fourth and first quarters 2017, respectively. Fourth quarter 2017 also included $107 million charge to adjust deferred taxes as a result of the enactment of the Tax Cut and Jobs Act. |
| |
| (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 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 March 31, 2018 | Michigan | | California | | Texas | | Markets | | & Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income | $ | 169 |
| | $ | 180 |
| | $ | 109 |
| | $ | 78 |
| | $ | 13 |
| | $ | 549 |
|
| Provision for credit losses | 33 |
| | (2 | ) | | (13 | ) | | (8 | ) | | 2 |
| | 12 |
|
| Noninterest income | 73 |
| | 39 |
| | 31 |
| | 88 |
| | 13 |
| | 244 |
|
| Noninterest expenses | 144 |
| | 106 |
| | 92 |
| | 91 |
| | 13 |
| | 446 |
|
| Provision (benefit) for income taxes | 16 |
| | 30 |
| | 14 |
| | 15 |
| | (21 | ) | (a) | 54 |
|
| Net income | $ | 49 |
| | $ | 85 |
| | $ | 47 |
| | $ | 68 |
| | $ | 32 |
| | $ | 281 |
|
| Net credit-related charge-offs (recoveries) | $ | (1 | ) | | $ | 13 |
| | $ | 5 |
| | $ | 11 |
| | $ | — |
| | $ | 28 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 13,395 |
| | $ | 18,581 |
| | $ | 10,373 |
| | $ | 8,362 |
| | $ | 19,615 |
| | $ | 70,326 |
|
| Loans | 12,604 |
| | 18,347 |
| | 9,830 |
| | 7,640 |
| | — |
| | 48,421 |
|
| Deposits | 21,227 |
| | 17,091 |
| | 9,188 |
| | 7,668 |
| | 916 |
| | 56,090 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (b) | 0.88 | % | | 1.86 | % | | 1.85 | % | | 3.32 | % | | N/M |
| | 1.62 | % |
| Efficiency ratio (c) | 59.61 |
| | 48.39 |
| | 65.63 |
| | 54.97 |
| | N/M |
| | 56.33 |
|
| | | | | | | | | | | | |
| | | | | | | | Other | | Finance | | |
| Three Months Ended December 31, 2017 | Michigan | | California | | Texas | | Markets | | & Other | | Total |
| Earnings summary: | | | | | | | | | | | |
| Net interest income (expense) | $ | 175 |
| | $ | 188 |
| | $ | 115 |
| | $ | 83 |
| | $ | (16 | ) | | $ | 545 |
|
| Provision for credit losses | 6 |
| | 31 |
| | (27 | ) | | 2 |
| | 5 |
| | 17 |
|
| Noninterest income | 81 |
| | 43 |
| | 34 |
| | 111 |
| | 16 |
| | 285 |
|
| Noninterest expenses | 150 |
| | 107 |
| | 95 |
| | 120 |
| | 11 |
| | 483 |
|
| Provision for income taxes | 36 |
| | 36 |
| | 32 |
| | 21 |
| | 93 |
| (a) | 218 |
|
| Net income (loss) | $ | 64 |
| | $ | 57 |
| | $ | 49 |
| | $ | 51 |
| | $ | (109 | ) | | $ | 112 |
|
| Net credit-related charge-offs | $ | 1 |
| | $ | 5 |
| | $ | 10 |
| | $ | — |
| | $ | — |
| | $ | 16 |
|
| | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | |
| Assets | $ | 13,583 |
| | $ | 18,470 |
| | $ | 10,305 |
| | $ | 8,739 |
| | $ | 20,301 |
| | $ | 71,398 |
|
| Loans | 12,798 |
| | 18,236 |
| | 9,795 |
| | 8,104 |
| | — |
| | 48,933 |
|
| Deposits | 21,807 |
| | 18,222 |
| | 9,366 |
| | 7,738 |
| | 508 |
| | 57,641 |
|
| | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | |
| Return on average assets (b) | 1.13 | % | | 1.17 | % | | 1.85 | % | | 2.30 | % | | N/M |
| | 0.62 | % |
| Efficiency ratio (c) | 58.65 |
| | 46.42 |
| | 63.58 |
| | 61.68 |
| | N/M |
| | 58.14 |
|
| | | | | | | | | | | | |
| | | | | | | | 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 | ) | (a) | 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 (b) | 1.20 | % | | 1.32 | % | | 1.35 | % | | 2.13 | % | | N/M |
| | 1.14 | % |
| Efficiency ratio (c) | 59.50 |
| | 45.25 |
| | 64.80 |
| | 59.31 |
| | N/M |
| | 61.71 |
|
| |
| (a) | Included tax benefits of $19 million, $4 million and $24 million from employee stock transactions for the first quarter 2018 and fourth and first quarters 2017, respectively. Fourth quarter 2017 also included $107 million charge to adjust deferred taxes as a result of the enactment of the Tax Cut and Jobs Act. |
| |
| (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 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 non-GAAP measures are meaningful 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 net income, earnings per share, ROA, ROE, noninterest income, noninterest expenses and efficiency ratio provide 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.
|
| | | | | | | | | |
| | Three Months Ended |
| | March 31, | December 31, | March 31, |
| (dollar amounts in millions, except per share data) | 2018 | 2017 | 2017 |
| | | | |
| Adjusted Earnings per Common Share: | | | |
| Net income attributable to common shareholders | $ | 279 |
| $ | 112 |
| $ | 200 |
|
| Restructuring charges, net of tax | 12 |
| 8 |
| 7 |
|
| Deferred tax adjustment | (3 | ) | 107 |
| — |
|
| One-time employee bonus, net of tax | — |
| 3 |
| — |
|
| Tax benefits from employee stock transactions | (19 | ) | (4 | ) | (24 | ) |
| Adjusted net income attributable to common shareholders | $ | 269 |
| $ | 226 |
| $ | 183 |
|
| Diluted average common shares (in millions) | 175 |
| 176 |
| 180 |
|
| Diluted earnings per common share: | | | |
| Reported | $ | 1.59 |
| $ | 0.63 |
| $ | 1.11 |
|
| Adjusted | 1.54 |
| 1.28 |
| 1.02 |
|
| | | | |
| Adjusted Noninterest Income, Noninterest Expenses and Efficiency Ratio: | | | |
| Noninterest income | $ | 244 |
| $ | 285 |
| $ | 271 |
|
Proforma effect of adoption of accounting standard
| — |
| (34 | ) | (26 | ) |
| Adjusted noninterest income | $ | 244 |
| $ | 251 |
| $ | 245 |
|
| Noninterest expenses | $ | 446 |
| $ | 483 |
| $ | 457 |
|
Proforma effect of adoption of accounting standard
| — |
| (34 | ) | (26 | ) |
Restructuring charges
| (16 | ) | (13 | ) | (11 | ) |
| One-time employee bonus | — |
| (5 | ) | — |
|
| Adjusted noninterest expenses | $ | 430 |
| $ | 431 |
| $ | 420 |
|
| Net interest income | $ | 549 |
| $ | 545 |
| $ | 470 |
|
| Efficiency ratio: | | | |
| Reported | 56.33 | % | 58.14 | % | 61.71 | % |
| Adjusted | 54.32 |
| 54.23 |
| 58.79 |
|
| | | | |
| Adjusted Net Income, ROA and ROE: | | | |
| Net income | $ | 281 |
| $ | 112 |
| $ | 202 |
|
| Restructuring charges, net of tax | 12 |
| 8 |
| 7 |
|
| Deferred tax adjustment | (3 | ) | 107 |
| — |
|
| One-time employee bonus, net of tax | — |
| 3 |
| — |
|
| Tax benefits from employee stock transactions | (19 | ) | (4 | ) | (24 | ) |
| Adjusted net income | $ | 271 |
| $ | 226 |
| $ | 185 |
|
| | | | |
| Average assets | $ | 70,326 |
| $ | 71,398 |
| $ | 71,819 |
|
| ROA: | | | |
| Reported | 1.62 | % | 0.62 | % | 1.14 | % |
| Adjusted | 1.56 |
| 1.26 |
| 1.05 |
|
| | | | |
| Average common shareholders' equity | $ | 7,927 |
| $ | 7,987 |
| $ | 7,865 |
|
| ROE: | | | |
| Reported | 14.37 | % | 5.58 | % | 10.42 | % |
| Adjusted | 13.85 |
| 11.24 |
| 9.56 |
|
Adjusted net income, earnings per share, ROA and ROE remove the after tax effect of restructuring charges, one-time employee bonuses, the charge to adjust deferred taxes resulting from the Tax Cut and Jobs Act and tax benefits from employee stock transactions from net income and net income available to common shareholders. Adjusted noninterest income, noninterest expenses and efficiency ratio remove the proforma effect of the adoption of the new accounting standard for revenue recognition, restructuring charges and one-time employee bonuses from noninterest income and noninterest expenses.
|
| | | | | | | | | | | | | | | |
| | March 31, | December 31, | September 30, | June 30, | March 31, |
| (dollar amounts in millions) | 2018 | 2017 | 2017 | 2017 | 2017 |
| | | | | | |
| Tangible Common Equity Ratio: | | | | | |
| Common shareholders' equity | $ | 8,000 |
| $ | 7,963 |
| $ | 8,034 |
| $ | 7,985 |
| $ | 7,930 |
|
| Less: | | | | | |
| Goodwill | 635 |
| 635 |
| 635 |
| 635 |
| 635 |
|
| Other intangible assets | 7 |
| 8 |
| 8 |
| 9 |
| 10 |
|
| Tangible common equity | $ | 7,358 |
| $ | 7,320 |
| $ | 7,391 |
| $ | 7,341 |
| $ | 7,285 |
|
| | | | | | |
| Total assets | $ | 72,335 |
| $ | 71,567 |
| $ | 72,017 |
| $ | 71,447 |
| $ | 72,976 |
|
| Less: | | | | | |
| Goodwill | 635 |
| 635 |
| 635 |
| 635 |
| 635 |
|
| Other intangible assets | 7 |
| 8 |
| 8 |
| 9 |
| 10 |
|
| Tangible assets | $ | 71,693 |
| $ | 70,924 |
| $ | 71,374 |
| $ | 70,803 |
| $ | 72,331 |
|
| | | | | | |
| Common equity ratio | 11.06 | % | 11.13 | % | 11.16 | % | 11.18 | % | 10.87 | % |
| Tangible common equity ratio | 10.26 |
| 10.32 |
| 10.35 |
| 10.37 |
| 10.07 |
|
| | | | | | |
| Tangible Common Equity per Share of Common Stock: | | | | | |
| Common shareholders' equity | $ | 8,000 |
| $ | 7,963 |
| $ | 8,034 |
| $ | 7,985 |
| $ | 7,930 |
|
| Tangible common equity | 7,358 |
| 7,320 |
| 7,391 |
| 7,341 |
| 7,285 |
|
| | | | | | |
| Shares of common stock outstanding (in millions) | 172 |
| 173 |
| 174 |
| 176 |
| 177 |
|
| | | | | | |
| Common shareholders' equity per share of common stock | $ | 46.38 |
| $ | 46.07 |
| $ | 46.09 |
| $ | 45.39 |
| $ | 44.69 |
|
| Tangible common equity per share of common stock | 42.66 |
| 42.34 |
| 42.39 |
| 41.73 |
| 41.05 |
|
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.
