Comerica (CMA) 8-K Reflected Strong Loan Growth, Capital Management, Record Revenue and Expense Control

Dallas, TX/January 21, 2020

FULL-YEAR 2019 NET INCOME OF $1.2 BILLION, $7.87 PER SHARE

Earnings per Share Increased 9 Percent Compared to 2018

Reflected Strong Loan Growth, Capital Management, Record Revenue and Expense Control

FOURTH QUARTER 2019 NET INCOME OF $269 MILLION, $1.85PER SHARE

Return on Equity of 15 Percent and Return on Assets of 1.5 Percent

Reflected Robust Deposit Growth, Capital Management and Strong Credit Quality

"In 2019, we realized strong loan growth, which pushed total assets to a record level while continuing to serve our relationship-oriented deposit base," said Curt C. Farmer, chairman and chief executive officer. "With the benefit of fee income growth, revenue reached an all-time high. This growth, along with careful cost control, resulted in an efficiency ratio of under 52 percent. In addition, credit quality remained solid and we meaningfully reduced excess capital.  Altogether, this produced earnings per share of $7.87, a 9 percent increase over 2018, as well as a 10 percent increase in our book value, and our return on equity increased to above 16 percent.

"With respect to the fourth quarter, our results demonstrate our ability to drive solid returns with a return on equity of nearly 15 percent and a return on assets of 1.5 percent, despite declines in interest rates.  While loans were relatively stable, deposit growth was robust, increasing $1.5 billion relative to the third quarter, with over 40 percent from noninterest-bearing deposits. Noninterest income growth, strong credit quality and continued active capital management were also positive contributors to our performance.

"As we look forward to the year ahead, we remain keenly focused on growing loans and deposits along with maintaining our proven expense discipline as we invest for the future. Our key strengths, including our diverse, geographic footprint, combined with our relationship banking strategy, provide the foundation to continue to enhance shareholder value.”

(dollar amounts in millions, except per share data)	4th Qtr '19			3rd Qtr '19			2019			2018
FINANCIAL RESULTS
Net interest income	$	544		$	586		$	2,339		$	2,352
Provision for credit losses	8			35			74			(1		)
Noninterest income	266			256			1,010			976
Noninterest expenses	451			435			1,743			1,794
Pre-tax income	351			372			1,532			1,535
Provision for income taxes	82			80			334			300
Net income	$	269		$	292		$	1,198		$	1,235
Diluted earnings per share	$	1.85		$	1.96		$	7.87		$	7.20
Average loans	50,505			50,887			50,511			48,766
Average deposits	57,178			55,716			55,481			55,935
Return on average assets	1.46		%	1.61		%	1.68		%	1.75		%
Return on shareholders' equity	14.74			15.97			16.39			15.82
Efficiency ratio (a)	55.46			51.54			51.82			53.56
Net interest margin	3.20			3.52			3.54			3.58
Common equity Tier 1 capital ratio (b)	10.14			9.96			10.14			11.14
Common equity ratio	9.98			9.88			9.98			10.60
Shareholders' equity per share	51.57			49.96			51.57			46.89
Tangible equity per share (c)	47.07			45.52			47.07			42.89

(a) Noninterest expenses as a percentage of net interest income and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares.

(b) December 31, 2019 ratio is estimated.

(c) See Reconciliation of Non-GAAP Financial Measures.

1

Full-Year 2019 Compared to Full-Year 2018 Overview

Balance sheet items discussed in terms of average balances.

Loans increased $1.7 billion, or 4 percent, to $50.5 billion.

• Reflected increases in Energy, Mortgage Banker Finance, National Dealer Services, general Middle Market and Commercial Real Estate.

Deposits were relatively stable at $55.5 billion.

• Interest-bearing deposits increased $2.1 billion, reflecting increases of $1.3 billion in relationship-based deposits and $703 million in other time deposits.

• Noninterest-bearing deposits decreased $2.6 billion. The decline was primarily the result of customers shifting balances to interest-bearing deposits and utilizing their deposits to fund growth, acquisitions and capital expenditures as well as choosing other investment options.

Net interest income decreased $13 million to $2.3 billion.

• Increases due to higher loan balances and the net impact of higher short-term rates were more than offset by higher interest-bearing deposit and debt balances.

Provision for credit losses was $74 million.

• Provision increased $75 million primarily due to a decline in valuations of select liquidating Energy credits.

• Net credit-related charge-offs were $107 million, or 0.21 percent of average loans, including Energy net charge-offs of $86 million.

Excluding losses of $8 million in 2019 and $20 million in 2018 related to securities repositioning, noninterest income increased $22 million.

• Increases of $13 million in card fees and $6 million each in commercial lending fees and customer derivative income were partially offset by an $8 million decrease in service charges on deposit accounts.

• Also included an $11 million increase in deferred compensation asset returns (offset in noninterest expense) and a $6 million gain on the sale of Comerica's Health Savings Account (HSA) business, partially offset by decreases of $5 million due to the wind-down of a retirement savings program in 2018 and $4 million in income from tax-credit investments.

Excluding 2018 restructuring charges of $53 million, noninterest expenses were stable.

• Decreases of $19 million in FDIC insurance expense and $8 million in software expense were offset by increases of $11 million in salaries and benefits expense, $9 million in outside processing fee expense, $4 million in advertising expense and smaller increases in other categories.

• Excluding $11 million increase in deferred compensation expense (offset in noninterest income), salaries and benefits expense was stable as merit increases and higher technology-related contingent labor costs were offset by lower incentive compensation.

Provision for income taxes increased $34 million to $334 million.

• Reflected a $31 million decrease in discrete tax benefits from $48 million in 2018 to $17 million in 2019. Discrete tax benefits included adjustments of $5 million related to annual state tax filings in 2019 and $23 million from a review of certain tax capitalization and recovery positions in 2018. The remaining difference primarily related to a $10 million decrease in discrete tax benefits from employee stock transactions.

Returned a total of $1.8 billion to shareholders, an increase of $141 million compared to 2018.

• Repurchased $1.4 billion, or approximately 18.6 million shares, of common stock during 2019 under the share repurchase program.

• Increased the dividend 46 percent to $2.68 per share

Fourth Quarter 2019 Compared to Third Quarter 2019 Overview

Balance sheet items discussed in terms of average balances unless otherwise indicated.

Loans were relatively stable at $50.5 billion.

• Increases in Commercial Real Estate, Mortgage Banker Finance and Environmental Services were offset by decreases in general Middle Market, National Dealer Services and smaller changes in other lines of business.

• Loan yields of 4.43 percent decreased40 basis points mostly due to lower short-term interest rates.

Deposits increased $1.5 billion, or 3 percent, to $57.2 billion.

• Noninterest-bearing deposits increased $615 million to $27.0 billion.

2

• Interest-bearing deposits increased $847 million to $30.2 billion. The increase was driven by continued growth in relationship-based deposits, partially offset by a $675 million decrease in other time deposits.

• Interest-bearing deposit costs of 92 basis points decreased 7 basis points, reflecting actions taken in conjunction with the decline in short-term interest rates.

Net interest income decreased $42 million to $544 million.

• The decrease primarily reflected the net impact of lower interest rates.

Provision for credit losses decreased $27 million to $8 million.

• Net credit-related charge-offs decreased to $21 million, or 0.16 percent of average loans, from $42 million.

• The period end allowance for loan losses decreased $15 million to $637 million, or 1.27 percent of total loans.

Noninterest income increased $10 million to $266 million.

• Reflected a $7 million increase in customer derivative income, a $6 million gain on the sale of the HSA business and $2 million increase in commercial lending fees, partially offset by a $5 million decrease in card fees.

Noninterest expenses increased $16 million to $451 million.

• Driven by a $4 million increase in salaries and benefits expense, a $4 million vendor transition fee (outside processing fee expense), a $2 million increase in occupancy expense and smaller increases in other categories.

• Salaries and benefits expense reflected higher incentive compensation and commissions tied to performance as well as a seasonal increase in staff insurance expense, partly offset by a decrease in technology-related contingent labor costs.

Capital position remained solid with a common equity Tier 1 capital ratio of 10.14 percent.

• Returned a total of $246 million to shareholders, including dividends and the repurchase of $150 million of common stock (2.1 million shares) under the share repurchase program.

Net Interest Income

Balance sheet items discussed in terms of average balances.

(dollar amounts in millions)	4th Qtr '19			3rd Qtr '19			2019			2018
Net interest income	$	544		$	586		$	2,339		$	2,352
Net interest margin	3.20		%	3.52		%	3.54		%	3.58		%
Selected average balances:
Total earning assets	$	67,710		$	66,285		$	66,134		$	65,410
Total loans	50,505			50,887			50,511			48,766
Total investment securities	12,225			12,203			12,120			11,810
Federal Reserve Bank deposits	4,597			2,834			3,143			4,495
Total deposits	57,178			55,716			55,481			55,935
Total noninterest-bearing deposits	26,966			26,351			26,644			29,241
Short-term borrowings	60			268			369			62
Medium- and long-term debt	7,305			7,100			6,955			5,842

Net interest income decreased $42 million, and net interest margin decreased 32 basis points, compared to third quarter 2019.

• Interest on loans decreased $55 million and reduced net interest margin by 31 basis points, primarily reflecting the impact of lower short-term rates ($46 million, 28 basis points), lower loan balances ($4 million, 1 basis point), lower nonaccrual interest ($3 million, 1 basis point) and other loan dynamics ($2 million, 1 basis point).

• Interest on short-term investments increased $3 million and reduced net interest margin by 7 basis points, primarily reflecting an increase in lower-yielding deposits with the Federal Reserve Bank (+$7 million, -5 basis points), partially offset by lower rates (-$4 million, -2 basis points).

• Interest expense on deposits decreased $3 million and increased net interest margin by 2 basis points, due to lower deposit pay rates.

• Interest expense on debt decreased $7 million and increased net interest margin by 4 basis points, primarily due to lower rates.

3

Credit Quality

“Credit quality in 2019 continued to be strong with 21 basis points of net charge-offs and only 4 basis points excluding Energy. Fourth quarter net charge-offs were also low at 16 basis points and 1 basis point excluding Energy. Charge-offs continued to primarily consist of valuation impairments on select Energy credits as capital markets for this sector remain soft. Total nonperforming assets declined to one of the lowest levels since 2006 and represented 43 basis points of our total loans. Our allowance remains very healthy at a reserve ratio of 1.27 percent. We expect our portfolio to continue to perform well, yet could begin to migrate from these strong credit metrics towards our historical norm."

(dollar amounts in millions)	4th Qtr '19			3rd Qtr '19			4th Qtr '18
Credit-related charge-offs	$	27		$	61		$	21
Recoveries	6			19			10
Net credit-related charge-offs	21			42			11
Net credit-related charge-offs/Average total loans	0.16		%	0.33		%	0.09		%
Provision for credit losses	$	8		$	35		$	16
Nonperforming loans	204			226			229
Nonperforming assets (NPAs)	215			229			230
NPAs/Total loans and foreclosed property	0.43		%	0.44		%	0.46		%
Loans past due 90 days or more and still accruing	$	26		$	31		$	16
Allowance for loan losses	637			652			671
Allowance for credit losses on lending-related commitments (a)	31			29			30
Total allowance for credit losses	668			681			701
Allowance for loan losses/Period-end total loans	1.27		%	1.27		%	1.34		%
Allowance for loan losses/Nonperforming loans	3.1x			2.9x			2.9x

(a) Included in accrued expenses and other liabilities on the Consolidated Balance Sheets.

• The allowance for loan losses decreased $15 million to $637 million at December 31, 2019, or 1.27 percent of total loans, reflecting strong credit quality and a decrease in net credit-related charge-offs.

• Criticized loans were $2.1 billion, or 4.2 percentof total loans, at December 31, 2019. Criticized loans are generally consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities.

• Net charge-offs of $21 million or 16 basis points of average loans.

◦ Energy net charge-offs were $19 million, compared to $34 million in third quarter.

• Nonperforming assets decreased $14 million to $215 million at December 31, 2019, compared to $229 million at September 30, 2019. Nonperforming assets as a percentage of total loans and foreclosed property decreased to 0.43 percent at December 31, 2019, compared to 0.44 percent at September 30, 2019.

• Energy loans were $2.2 billion, or 4.4 percent of total loans, at December 31, 2019.

• Effective January 1, 2020, Comerica will adopt a new accounting standard for measuring credit losses. As a result, the allowance for credit losses is expected to decrease by 5 percent or less from current levels as of the adoption date.

4

Full-Year 2020 Outlook

For full-year 2020 compared to full-year 2019 reported results, management expects the following, assuming a continuation of the current economic and rate environment:

• 2 percent to 3 percent growth in average loans, reflecting increases in most lines of business, partly offset by declines in Mortgage Banker Finance and National Dealer Services.

• 1 percent to 2 percent increase in average deposits, with a continued focus on attracting and retaining relationship-based deposits.

• Decrease in net interest income due to the net impact of lower interest rates, 2019 funding actions and lower nonaccrual interest recoveries, partially offset by loan growth.

◦ $10 million to $15 million net reduction from interest rates in first quarter 2020 compared to fourth quarter 2019, with a modest decrease for the remainder of the year.

• Continued strong credit quality, with net credit-related charge-offs similar to 2019 levels (15 basis points to 25 basis points).

• 1 percent growth in noninterest income, reflecting growth in card fees and fiduciary income, partially offset by lower derivative and warrant income, and assuming no returns on deferred compensation assets.

• 3 percent increase in noninterest expenses, reflecting higher outside processing expenses in line with growing revenue, technology expenditures, typical inflationary pressures and higher pension expense.

• Income tax expense to be approximately 23 percent of pre-tax income.

• Common equity Tier 1 capital ratio target of approximately 10 percent.

5

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. From time to time, the Comerica may make reclassifications among the segments to reflect management's current view of the segments, and methodologies may be modified as the management accounting system is enhanced and changes occur in the organizational structure and/or product lines. The financial results provided are based on the internal business unit and geographic market structures of Comerica and methodologies in effect at December 31, 2019. A discussion of business segment and geographic market year-to-date results will be included in Comerica's 2019 Form 10-K.

Conference Call and Webcast

Comerica will host a conference call to review fourth quarter 2019financial results at 7 a.m. CT Tuesday, January 21, 2020. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (Event ID No. 7291336). 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.

6

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, 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 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; operational, systems or infrastructure failures; reliance on other companies to provide certain key components of business infrastructure; cybersecurity risks; 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 requirements; declines or other changes in the businesses or industries of Comerica's customers; unfavorable developments concerning credit quality; changes in regulation or oversight; heightened legislative and regulatory focus on cybersecurity and data privacy; 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 impacts of future legislative, administrative or judicial changes to 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; losses due to fraud; the effects of terrorist activities and other hostilities; changes in accounting standards; the critical nature of Comerica's accounting policies; controls and procedures failures; 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 12 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2018. 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:
Wendy Bridges	Darlene P. Persons
(214) 462-4443	(214) 462-6831
Louis H. Mora	Amanda Perkins
(214) 462-6669	(214) 462-6731

CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
Comerica Incorporated and Subsidiaries
	Three Months Ended									Years Ended
	December 31,			September 30,			December 31,			December 31,
(in millions, except per share data)	2019			2019			2018			2019			2018
PER COMMON SHARE AND COMMON STOCK DATA
Diluted net income	$	1.85		$	1.96		$	1.88		$	7.87		$	7.20
Cash dividends declared	0.67			0.67			0.60			2.68			1.84
Average diluted shares (in thousands)	144,566			148,079			163,501			151,293			170,500
PERFORMANCE RATIOS
Return on average common shareholders' equity	14.74		%	15.97		%	16.36		%	16.39		%	15.82		%
Return on average assets	1.46			1.61			1.74			1.68			1.75
Efficiency ratio (a)	55.46			51.54			51.93			51.82			53.56
CAPITAL
Common equity tier 1 capital (b)	$	6,919		$	6,892		$	7,470
Risk-weighted assets (b)	68,268			69,223			67,047
Common equity tier 1 and tier 1 risk-based capital ratio (b)	10.14		%	9.96		%	11.14		%
Total risk-based capital ratio (b)	12.13			11.95			13.21
Leverage ratio (b)	9.46			9.63			10.51
Common shareholders' equity per share of common stock	51.57			49.96			46.89
Tangible common equity per share of common stock	47.07			45.52			42.89
Common equity ratio	9.98			9.88			10.60
Tangible common equity ratio (c)	9.19			9.09			9.78
AVERAGE BALANCES
Commercial loans	$	31,808		$	32,329		$	30,651		$	32,053		$	30,534
Real estate construction loans	3,398			3,344			3,164			3,325			3,155
Commercial mortgage loans	9,356			9,264			9,051			9,170			9,131
Lease financing	586			578			495			557			470
International loans	1,030			1,007			1,035			1,019			1,021
Residential mortgage loans	1,887			1,920			1,968			1,929			1,983
Consumer loans	2,440			2,445			2,468			2,458			2,472
Total loans	50,505			50,887			48,832			50,511			48,766
Earning assets	67,710			66,285			65,661			66,134			65,410
Total assets	73,151			71,736			70,830			71,488			70,724
Noninterest-bearing deposits	26,966			26,351			28,600			26,644			29,241
Interest-bearing deposits	30,212			29,365			27,129			28,837			26,694
Total deposits	57,178			55,716			55,729			55,481			55,935
Common shareholders' equity	7,237			7,254			7,519			7,308			7,809
NET INTEREST INCOME
Net interest income	$	544		$	586		$	614		$	2,339		$	2,352
Net interest margin	3.20		%	3.52		%	3.69		%	3.54		%	3.58		%
CREDIT QUALITY
Total nonperforming assets	$	215		$	229		$	230
Loans past due 90 days or more and still accruing	26			31			16
Net credit-related charge-offs	21			42			11			$	107		$	51
Allowance for loan losses	637			652			671
Allowance for credit losses on lending-related commitments	31			29			30
Total allowance for credit losses	668			681			701
Allowance for loan losses as a percentage of total loans	1.27		%	1.27		%	1.34		%
Net credit-related charge-offs as a percentage of average total loans	0.16			0.33			0.09			0.21		%	0.11		%
Nonperforming assets as a percentage of total loans and foreclosed property	0.43			0.44			0.46
Allowance for loan losses as a multiple of total nonperforming loans	3.1x			2.9x			2.9x
OTHER KEY INFORMATION
Number of banking centers	436			436			436
Number of employees - full time equivalent	7,747			7,725			7,865

(a) Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares.

(b) December 31, 2019 ratios are estimated.

(c) See Reconciliation of Non-GAAP Financial Measures.

8

CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
	December 31,			September 30,			December 31,
(in millions, except share data)	2019			2019			2018
	(unaudited)			(unaudited)
ASSETS
Cash and due from banks	$	973		$	1,229		$	1,390
Interest-bearing deposits with banks	4,845			2,888			3,171
Other short-term investments	155			146			134
Investment securities available-for-sale	12,398			12,429			12,045
Commercial loans	31,473			32,890			31,976
Real estate construction loans	3,455			3,377			3,077
Commercial mortgage loans	9,559			9,234			9,106
Lease financing	588			578			507
International loans	1,009			1,055			1,013
Residential mortgage loans	1,845			1,906			1,970
Consumer loans	2,440			2,451			2,514
Total loans	50,369			51,491			50,163
Less allowance for loan losses	(637		)	(652		)	(671		)
Net loans	49,732			50,839			49,492
Premises and equipment	457			467			475
Accrued income and other assets	4,842			4,850			4,111
Total assets	$	73,402		$	72,848		$	70,818
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	27,382		$	27,134		$	28,690
Money market and interest-bearing checking deposits	24,527			23,992			22,560
Savings deposits	2,184			2,156			2,172
Customer certificates of deposit	2,978			2,853			2,131
Other time deposits	133			647			—
Foreign office time deposits	91			27			8
Total interest-bearing deposits	29,913			29,675			26,871
Total deposits	57,295			56,809			55,561
Short-term borrowings	71			51			44
Accrued expenses and other liabilities	1,440			1,477			1,243
Medium- and long-term debt	7,269			7,311			6,463
Total liabilities	66,075			65,648			63,311
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares	1,141			1,141			1,141
Capital surplus	2,174			2,172			2,148
Accumulated other comprehensive loss	(235		)	(336		)	(609		)
Retained earnings	9,538			9,369			8,781
Less cost of common stock in treasury - 86,069,234 shares at 12/31/19; 84,028,400 shares at 9/30/19 and 68,081,176 shares at 12/31/18	(5,291		)	(5,146		)	(3,954		)
Total shareholders' equity	7,327			7,200			7,507
Total liabilities and shareholders' equity	$	73,402		$	72,848		$	70,818

9

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
	Three Months Ended				Years Ended
	December 31,				December 31,
(in millions, except per share data)	2019		2018		2019			2018
INTEREST INCOME
Interest and fees on loans	$	564	$	604	$	2,439		$	2,262
Interest on investment securities	75		71		297			265
Interest on short-term investments	20		29		71			92
Total interest income	659		704		2,807			2,619
INTEREST EXPENSE
Interest on deposits	70		43		262			122
Interest on short-term borrowings	—		—		9			1
Interest on medium- and long-term debt	45		47		197			144
Total interest expense	115		90		468			267
Net interest income	544		614		2,339			2,352
Provision for credit losses	8		16		74			(1		)
Net interest income after provision for credit losses	536		598		2,265			2,353
NONINTEREST INCOME
Card fees	62		64		257			244
Fiduciary income	52		51		206			206
Service charges on deposit accounts	50		51		203			211
Commercial lending fees	25		23		91			85
Foreign exchange income	11		11		44			47
Bank-owned life insurance	10		10		41			39
Letter of credit fees	9		10		38			40
Brokerage fees	7		7		28			27
Net securities gains (losses)	1		—		(7		)	(19		)
Other noninterest income	39		23		109			96
Total noninterest income	266		250		1,010			976
NONINTEREST EXPENSES
Salaries and benefits expense	257		250		1,020			1,009
Outside processing fee expense	70		65		264			255
Occupancy expense	41		39		154			152
Software expense	30		30		117			125
Equipment expense	13		14		50			48
Advertising expense	10		8		34			30
FDIC insurance expense	6		6		23			42
Restructuring charges	—		14		—			53
Other noninterest expenses	24		22		81			80
Total noninterest expenses	451		448		1,743			1,794
Income before income taxes	351		400		1,532			1,535
Provision for income taxes	82		90		334			300
NET INCOME	269		310		1,198			1,235
Less income allocated to participating securities	2		2		7			8
Net income attributable to shares	$	267	$	308	$	1,191		$	1,227
Earnings per share:
Basic	$	1.87	$	1.91	$	7.95		$	7.31
Diluted	1.85		1.88		7.87			7.20
Comprehensive income	370		312		1,572			1,076
Cash dividends declared on stock	96		99		398			309
Cash dividends declared per share	0.67		0.60		2.68			1.84

10

CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
	Fourth		Third		Second		First			Fourth		Fourth Quarter 2019 Compared To:
	Quarter		Quarter		Quarter		Quarter			Quarter		Third Quarter 2019					Fourth Quarter 2018
(in millions, except per share data)	2019		2019		2019		2019			2018		Amount			Percent		Amount			Percent
INTEREST INCOME
Interest and fees on loans	$	564	$	619	$	635	$	621		$	604	$	(55	)	(9	)%	$	(40	)	(7	)%
Interest on investment securities	75		75		75		72			71		—			—		4			5
Interest on short-term investments	20		17		17		17			29		3			21		(9		)	(29	)
Total interest income	659		711		727		710			704		(52		)	(7	)	(45		)	(6	)
INTEREST EXPENSE
Interest on deposits	70		73		67		52			43		(3		)	(4	)	27			65
Interest on short-term borrowings	—		2		6		1			—		(2		)	n/m		—			—
Interest on medium- and long-term debt	45		50		51		51			47		(5		)	(11	)	(2		)	(4	)
Total interest expense	115		125		124		104			90		(10		)	(8	)	25			29
Net interest income	544		586		603		606			614		(42		)	(7	)	(70		)	(11	)
Provision for credit losses	8		35		44		(13		)	16		(27		)	(77	)	(8		)	(48	)
Net interest income after provision for credit losses	536		551		559		619			598		(15		)	(3	)	(62		)	(10	)
NONINTEREST INCOME
Card fees	62		67		65		63			64		(5		)	(6	)	(2		)	(2	)
Fiduciary income	52		53		52		49			51		(1		)	(2	)	1			2
Service charges on deposit accounts	50		51		51		51			51		(1		)	(1	)	(1		)	(1	)
Commercial lending fees	25		23		21		22			23		2			4		2			9
Foreign exchange income	11		11		11		11			11		—			—		—			—
Bank-owned life insurance	10		11		11		9			10		(1		)	(7	)	—			—
Letter of credit fees	9		10		10		9			10		(1		)	(1	)	(1		)	(4	)
Brokerage fees	7		7		7		7			7		—			—		—			—
Net securities gains (losses)	1		—		—		(8		)	—		1			n/m		1			n/m
Other noninterest income	39		23		22		25			23		16			59		16			63
Total noninterest income	266		256		250		238			250		10			3		16			6
NONINTEREST EXPENSES
Salaries and benefits expense	257		253		245		265			250		4			1		7			3
Outside processing fee expense	70		66		65		63			65		4			7		5			8
Occupancy expense	41		39		37		37			39		2			4		2			6
Software expense	30		30		28		29			30		—			—		—			—
Equipment expense	13		13		12		12			14		—			—		(1		)	(1	)
Advertising expense	10		10		9		5			8		—			—		2			37
FDIC insurance expense	6		6		6		5			6		—			—		—			—
Restructuring charges	—		—		—		—			14		—			—		(14		)	n/m
Other noninterest expenses	24		18		22		17			22		6			28		2			9
Total noninterest expenses	451		435		424		433			448		16			4		3			1
Income before income taxes	351		372		385		424			400		(21		)	(6	)	(49		)	(12	)
Provision for income taxes	82		80		87		85			90		2			2		(8		)	(9	)
NET INCOME	269		292		298		339			310		(23		)	(8	)	(41		)	(13	)
Less income allocated to participating securities	2		2		1		2			2		—			—		—			—
Net income attributable to shares	$	267	$	290	$	297	$	337		$	308	$	(23	)	(8	)%	$	(41	)	(13	)%
Earnings per share:
Basic	$	1.87	$	1.98	$	1.95	$	2.14		$	1.91	$	(0.11	)	(6	)%	$	(0.04	)	(2	)%
Diluted	1.85		1.96		1.94		2.11			1.88		(0.11		)	(6	)	(0.03		)	(2	)
Comprehensive income	370		338		429		435			312		32			9		58			19
Cash dividends declared on stock	96		97		100		105			99		(1		)	(1	)	(3		)	(1	)
Cash dividends declared per share	0.67		0.67		0.67		0.67			0.60		—			—		0.07			12

n/m - not meaningful

11

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
	2019												2018
(in millions)	4th Qtr			3rd Qtr			2nd Qtr			1st Qtr			4th Qtr
Balance at beginning of period	$	652		$	657		$	647		$	671		$	664
Loan charge-offs:
Commercial	24			59			42			18			19
Commercial mortgage	2			—			—			1			2
International	—			—			1			—			—
Residential mortgage	—			1			—			—			—
Consumer	1			1			1			1			—
Total loan charge-offs	27			61			44			20			21
Recoveries on loans previously charged-off:
Commercial	3			17			7			8			8
Commercial mortgage	1			—			3			—			—
International	1			—			—			—			—
Residential mortgage	—			1			—			—			1
Consumer	1			1			1			1			1
Total recoveries	6			19			11			9			10
Net loan charge-offs	21			42			33			11			11
Provision for loan losses	6			37			43			(13		)	19
Foreign currency translation adjustment	—			—			—			—			(1		)
Balance at end of period	$	637		$	652		$	657		$	647		$	671
Allowance for loan losses as a percentage of total loans	1.27		%	1.27		%	1.27		%	1.29		%	1.34		%
Net loan charge-offs as a percentage of average total loans	0.16			0.33			0.26			0.08			0.09

ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited)
Comerica Incorporated and Subsidiaries
	2019									2018
(in millions)	4th Qtr		3rd Qtr			2nd Qtr		1st Qtr		4th Qtr
Balance at beginning of period	$	29	$	31		$	30	$	30	$	33
Add: Provision for credit losses on lending-related commitments	2		(2		)	1		—		(3		)
Balance at end of period	$	31	$	29		$	31	$	30	$	30

12

NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
	2019												2018
(in millions)	4th Qtr			3rd Qtr			2nd Qtr			1st Qtr			4th Qtr
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial	$	148		$	152		$	155		$	114		$	141
Commercial mortgage	14			13			12			16			20
Lease financing	—			—			1			2			2
International	—			2			3			3			3
Total nonaccrual business loans	162			167			171			135			166
Retail loans:
Residential mortgage	20			36			35			37			36
Consumer:
Home equity	17			17			18			19			19
Total nonaccrual retail loans	37			53			53			56			55
Total nonaccrual loans	199			220			224			191			221
Reduced-rate loans	5			6			6			7			8
Total nonperforming loans	204			226			230			198			229
Foreclosed property	11			3			3			1			1
Total nonperforming assets	$	215		$	229		$	233		$	199		$	230
Nonperforming loans as a percentage of total loans	0.40		%	0.44		%	0.44		%	0.39		%	0.46		%
Nonperforming assets as a percentage of total loans and foreclosed property	0.43			0.44			0.45			0.40			0.46
Allowance for loan losses as a multiple of total nonperforming loans	3.1x			2.9x			2.9x			3.3x			2.9x
Loans past due 90 days or more and still accruing	$	26		$	31		$	17		$	24		$	16
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of period	$	220		$	224		$	191		$	221		$	230
Loans transferred to nonaccrual (a)	48			85			93			4			42
Nonaccrual loan gross charge-offs	(27		)	(61		)	(44		)	(20		)	(21		)
Loans transferred to accrual status (a)	(7		)	—			—			—			(3		)
Nonaccrual loans sold	(10		)	—			(5		)	—			(5		)
Payments/Other (b)	(25		)	(28		)	(11		)	(14		)	(22		)
Nonaccrual loans at end of period	$	199		$	220		$	224		$	191		$	221
(a) Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(b) 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.

13

ANALYSIS OF NET INTEREST INCOME (unaudited)
Comerica Incorporated and Subsidiaries
	Years Ended
	December 31, 2019							December 31, 2018
	Average Balance					Average Rate		Average Balance					Average Rate
(dollar amounts in millions)				Interest							Interest
Commercial loans	$	32,053		$	1,544	4.82	%	$	30,534		$	1,416	4.64	%
Real estate construction loans	3,325			184		5.54		3,155			164		5.21
Commercial mortgage loans	9,170			447		4.88		9,131			429		4.69
Lease financing	557			19		3.44		470			18		3.82
International loans	1,019			52		5.13		1,021			51		4.97
Residential mortgage loans	1,929			74		3.85		1,983			75		3.77
Consumer loans	2,458			119		4.85		2,472			109		4.41
Total loans	50,511			2,439		4.83		48,766			2,262		4.64
Mortgage-backed securities	9,348			230		2.44		9,099			214		2.28
Other investment securities	2,772			67		2.43		2,711			51		1.86
Total investment securities	12,120			297		2.44		11,810			265		2.19
Interest-bearing deposits with banks	3,360			69		2.05		4,700			91		1.94
Other short-term investments	143			2		1.26		134			1		0.96
Total earning assets	66,134			2,807		4.24		65,410			2,619		3.99
Cash and due from banks	887							1,135
Allowance for loan losses	(667		)					(695		)
Accrued income and other assets	5,134							4,874
Total assets	$	71,488						$	70,724
Money market and interest-bearing checking deposits	$	23,417		214		0.91		$	22,378		111		0.50
Savings deposits	2,166			1		0.05		2,199			1		0.04
Customer certificates of deposit	2,522			30		1.18		2,090			10		0.46
Other time deposits	705			17		2.44		2			—		1.86
Foreign office time deposits	27			—		1.39		25			—		1.19
Total interest-bearing deposits	28,837			262		0.91		26,694			122		0.46
Short-term borrowings	369			9		2.39		62			1		1.93
Medium- and long-term debt	6,955			197		2.82		5,842			144		2.47
Total interest-bearing sources	36,161			468		1.29		32,598			267		0.82
Noninterest-bearing deposits	26,644							29,241
Accrued expenses and other liabilities	1,375							1,076
Total shareholders' equity	7,308							7,809
Total liabilities and shareholders' equity	$	71,488						$	70,724
Net interest income/rate spread				$	2,339	2.95					$	2,352	3.17
Impact of net noninterest-bearing sources of funds						0.59							0.41
Net interest margin (as a percentage of average earning assets)						3.54	%						3.58	%

14

ANALYSIS OF NET INTEREST INCOME (unaudited)
Comerica Incorporated and Subsidiaries
	Three Months Ended
	December 31, 2019							September 30, 2019							December 31, 2018
	Average Balance					Average Rate		Average Balance					Average Rate		Average Balance					Average Rate
(dollar amounts in millions)				Interest							Interest							Interest
Commercial loans	$	31,808		$	353	4.37	%	$	32,329		$	392	4.82	%	$	30,651		$	379	4.91	%
Real estate construction loans	3,398			44		5.16		3,344			47		5.53		3,164			44		5.57
Commercial mortgage loans	9,356			105		4.45		9,264			112		4.82		9,051			114		4.96
Lease financing	586			5		3.72		578			6		3.83		495			5		3.74
International loans	1,030			12		4.73		1,007			13		5.12		1,035			14		5.25
Residential mortgage loans	1,887			18		3.79		1,920			18		3.84		1,968			19		3.81
Consumer loans	2,440			27		4.48		2,445			31		4.92		2,468			29		4.67
Total loans	50,505			564		4.43		50,887			619		4.83		48,832			604		4.90
Mortgage-backed securities	9,431			58		2.45		9,408			58		2.45		9,069			56		2.37
Other investment securities	2,794			17		2.46		2,795			17		2.45		2,704			15		2.30
Total investment securities	12,225			75		2.45		12,203			75		2.45		11,773			71		2.35
Interest-bearing deposits with banks	4,828			20		1.64		3,049			16		2.13		4,920			28		2.28
Other short-term investments	152			—		1.11		146			1		1.28		136			1		1.12
Total earning assets	67,710			659		3.87		66,285			711		4.26		65,661			704		4.23
Cash and due from banks	861							864							940
Allowance for loan losses	(663		)					(673		)					(673		)
Accrued income and other assets	5,243							5,260							4,902
Total assets	$	73,151						$	71,736						$	70,830
Money market and interest-bearing checking deposits	$	24,629		57		0.91		$	23,485		57		0.97		$	22,849		39		0.67
Savings deposits	2,169			—		0.06		2,155			1		0.04		2,181			—		0.05
Customer certificates of deposit	2,935			11		1.42		2,627			8		1.30		2,090			4		0.62
Other time deposits	410			2		2.33		1,085			7		2.46		—			—		—
Foreign office time deposits	69			—		1.33		13			—		1.45		9			—		1.37
Total interest-bearing deposits	30,212			70		0.92		29,365			73		0.99		27,129			43		0.62
Short-term borrowings	60			—		1.60		268			2		2.33		72			—		2.21
Medium- and long-term debt	7,305			45		2.41		7,100			50		2.78		6,420			47		2.88
Total interest-bearing sources	37,577			115		1.21		36,733			125		1.34		33,621			90		1.05
Noninterest-bearing deposits	26,966							26,351							28,600
Accrued expenses and other liabilities	1,371							1,398							1,090
Total shareholders' equity	7,237							7,254							7,519
Total liabilities and shareholders' equity	$	73,151						$	71,736						$	70,830
Net interest income/rate spread				$	544	2.66					$	586	2.92					$	614	3.18
Impact of net noninterest-bearing sources of funds						0.54							0.60							0.51
Net interest margin (as a percentage of average earning assets)						3.20	%						3.52	%						3.69	%

15

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 SEPTEMBER 30, 2018	165.9		$	1,141	$	2,144		$	(611	)	$	8,587		$	(3,475	)	$	7,786
Net income	—		—		—			—			310			—			310
Other comprehensive income, net of tax	—		—		—			2			—			—			2
Cash dividends declared on common stock ($0.60 per share)	—		—		—			—			(99		)	—			(99		)
Purchase of common stock	(6.2	)	—		4			—			—			(505		)	(501		)
Net issuance of common stock under employee stock plans	—		—		—			—			1			1			2
Net issuance of common stock for warrants	0.4		—		(7		)	—			(18		)	25			—
Share-based compensation	—		—		7			—			—			—			7
BALANCE AT DECEMBER 31, 2018	160.1		$	1,141	$	2,148		$	(609	)	$	8,781		$	(3,954	)	$	7,507
BALANCE AT SEPTEMBER 30, 2019	144.1		$	1,141	$	2,172		$	(336	)	$	9,369		$	(5,146	)	$	7,200
Net income	—		—		—			—			269			—			269
Other comprehensive income, net of tax	—		—		—			101			—			—			101
Cash dividends declared on common stock ($0.67 per share)	—		—		—			—			(96		)	—			(96		)
Purchase of common stock	(2.1	)	—		—			—			—			(151		)	(151		)
Net issuance of common stock under employee stock plans	0.1		—		—			—			(4		)	6			2
Share-based compensation	—		—		2			—			—			—			2
BALANCE AT DECEMBER 31, 2019	142.1		$	1,141	$	2,174		$	(235	)	$	9,538		$	(5,291	)	$	7,327
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	—		—		—			—			1,235			—			1,235
Other comprehensive loss, net of tax	—		—		—			(159		)	—			—			(159		)
Cash dividends declared on common stock ($1.84 per share)	—		—		—			—			(309		)	—			(309		)
Purchase of common stock	(14.9	)	—		(3		)	—			—			(1,326		)	(1,329		)
Net issuance of common stock under employee stock plans	1.5		—		(9		)	—			(23		)	75			43
Net issuance of common stock for warrants	0.6		—		(10		)	—			(23		)	33			—
Share-based compensation	—		—		48			—			—			—			48
BALANCE AT DECEMBER 31, 2018	160.1		1,141		2,148			(609		)	8,781			(3,954		)	7,507
Cumulative effect of change in accounting principles	—		—		—			—			(14		)	—			(14		)
Net income	—		—		—			—			1,198			—			1,198
Other comprehensive income, net of tax	—		—		—			374			—			—			374
Cash dividends declared on common stock ($2.68 per share)	—		—		—			—			(398		)	—			(398		)
Purchase of common stock	(18.7	)	—		—			—			—			(1,380		)	(1,380		)
Net issuance of common stock under employee stock plans	0.7		—		(13		)	—			(29		)	43			1
Share-based compensation	—		—		39			—			—			—			39
BALANCE AT DECEMBER 31, 2019	142.1		$	1,141	$	2,174		$	(235	)	$	9,538		$	(5,291	)	$	7,327

16

BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in millions)	Business			Retail			Wealth
Three Months Ended December 31, 2019	Bank			Bank			Management			Finance			Other				Total
Earnings summary:
Net interest income (expense)	$	403		$	134		$	43		$	(49	)	$	13			$	544
Provision for credit losses	3			1			(1		)	—			5				8
Noninterest income	143			37			69			13			4				266
Noninterest expenses	203			156			75			—			17				451
Provision (benefit) for income taxes	79			3			9			(10		)	1			(a)	82
Net income (loss)	$	261		$	11		$	29		$	(26	)	$	(6	)		$	269
Net credit-related charge-offs	$	21		$	—		$	—		$	—		$	—			$	21
Selected average balances:
Assets	$	45,075		$	2,883		$	5,057		$	14,389		$	5,747			$	73,151
Loans	43,521			2,090			4,894			—			—				50,505
Deposits	30,535			21,084			4,015			1,332			212				57,178
Statistical data:
Return on average assets (b)	2.31		%	0.19		%	2.26		%	n/m			n/m				1.46		%
Efficiency ratio (c)	37.03			89.99			66.71			n/m			n/m				55.46
	Business			Retail			Wealth
Three Months Ended September 30, 2019	Bank			Bank			Management			Finance			Other				Total
Earnings summary:
Net interest income (expense)	$	420		$	142		$	47		$	(38	)	$	15			$	586
Provision for credit losses	39			(2		)	(3		)	—			1				35
Noninterest income	140			31			69			12			4				256
Noninterest expenses	199			149			69			(1		)	19				435
Provision (benefit) for income taxes	74			5			12			(8		)	(3		)	(a)	80
Net income (loss)	$	248		$	21		$	38		$	(17	)	$	2			$	292
Net credit-related charge-offs (recoveries)	$	43		$	1		$	(2	)	$	—		$	—			$	42
Selected average balances:
Assets	$	45,459		$	2,871		$	5,032		$	14,392		$	3,982			$	71,736
Loans	43,889			2,114			4,884			—			—				50,887
Deposits	28,917			20,761			3,775			2,049			214				55,716
Statistical data:
Return on average assets (b)	2.17		%	0.39		%	3.01		%	n/m			n/m				1.61		%
Efficiency ratio (c)	35.62			84.54			59.79			n/m			n/m				51.54
	Business			Retail			Wealth
Three Months Ended December 31, 2018	Bank			Bank			Management			Finance			Other				Total
Earnings summary:
Net interest income (expense)	$	413		$	146		$	48		$	(9	)	$	16			$	614
Provision for credit losses	15			1			(1		)	—			1				16
Noninterest income	144			36			65			11			(6		)		250
Noninterest expenses	212			152			75			(1		)	10				448
Provision (benefit) for income taxes	61			6			7			(1		)	17				90
Net income (loss)	$	269		$	23		$	32		$	4		$	(18	)		$	310
Net credit-related charge-offs (recoveries)	$	12		$	—		$	(1	)	$	—		$	—			$	11
Selected average balances:
Assets	$	43,211		$	2,647		$	5,156		$	13,613		$	6,203			$	70,830
Loans	41,731			2,080			5,021			—			—				48,832
Deposits	29,961			20,588			4,126			916			138				55,729
Statistical data:
Return on average assets (b)	2.47		%	0.44		%	2.49		%	n/m			n/m				1.74		%
Efficiency ratio (c)	38.14			83.60			65.85			n/m			n/m				51.93

(a) Included discrete tax benefits of $1 million and $5 million for the three months ended December 31, 2019 and September 30, 2019, 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 and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares.

n/m - not meaningful

17

MARKET SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in millions)										Other			Finance
Three Months Ended December 31, 2019	Michigan			California			Texas			Markets			& Other				Total
Earnings summary:
Net interest income (expense)	$	172		$	195		$	121		$	92		$	(36	)		$	544
Provision for credit losses	(5		)	(22		)	31			(1		)	5				8
Noninterest income	73			52			31			93			17				266
Noninterest expenses	142			105			90			96			18				451
Provision (benefit) for income taxes	25			42			8			17			(10		)	(a)	82
Net income (loss)	$	83		$	122		$	23		$	73		$	(32	)		$	269
Net credit-related charge-offs (recoveries)	$	1		$	(1	)	$	20		$	1		$	—			$	21
Selected average balances:
Assets	$	13,098		$	18,430		$	11,353		$	10,135		$	20,135			$	73,151
Loans	12,399			18,078			10,708			9,320			—				50,505
Deposits	20,443			18,115			9,045			8,031			1,544				57,178
Statistical data:
Return on average assets (b)	1.55		%	2.51		%	0.84		%	2.86		%	n/m				1.46		%
Efficiency ratio (c)	57.22			42.37			59.43			52.10			n/m				55.46
										Other			Finance
Three Months Ended September 30, 2019	Michigan			California			Texas			Markets			& Other				Total
Earnings summary:
Net interest income (expense)	$	185		$	203		$	125		$	96		$	(23	)		$	586
Provision for credit losses	(1		)	(6		)	50			(9		)	1				35
Noninterest income	74			41			31			94			16				256
Noninterest expenses	139			102			86			90			18				435
Provision (benefit) for income taxes	27			37			5			22			(11		)	(a)	80
Net income (loss)	$	94		$	111		$	15		$	87		$	(15	)		$	292
Net credit-related charge-offs (recoveries)	$	6		$	5		$	34		$	(3	)	$	—			$	42
Selected average balances:
Assets	$	13,213		$	18,726		$	11,462		$	9,961		$	18,374			$	71,736
Loans	12,554			18,393			10,805			9,135			—				50,887
Deposits	20,164			16,725			8,705			7,859			2,263				55,716
Statistical data:
Return on average assets (b)	1.78		%	2.37		%	0.48		%	3.47		%	n/m				1.61		%
Efficiency ratio (c)	53.31			41.64			55.57			47.18			n/m				51.54
										Other			Finance
Three Months Ended December 31, 2018	Michigan			California			Texas			Markets			& Other				Total
Earnings summary:
Net interest income	$	187		$	206		$	121		$	93		$	7			$	614
Provision for credit losses	(8		)	34			(16		)	5			1				16
Noninterest income	74			40			36			95			5				250
Noninterest expenses	145			108			92			94			9				448
Provision for income taxes	23			22			16			13			16				90
Net income (loss)	$	101		$	82		$	65		$	76		$	(14	)		$	310
Net credit-related charge-offs	$	—		$	9		$	1		$	1		$	—			$	11
Selected average balances:
Assets	$	12,958		$	18,551		$	10,464		$	9,041		$	19,816			$	70,830
Loans	12,457			18,279			9,881			8,215			—				48,832
Deposits	20,243			17,230			8,917			8,285			1,054				55,729
Statistical data:
Return on average assets (b)	1.92		%	1.75		%	2.48		%	3.33		%	n/m				1.74		%
Efficiency ratio (c)	55.35			44.06			58.53			50.24			n/m				51.93

(a) Included discrete tax benefits of $1 million and $5 million for the three months ended December 31, 2019 and September 30, 2019, 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 and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares.

n/m - not meaningful

18

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 equity and performance trends. Comerica believes the adjusted financial results provide a greater understanding of ongoing operations and enhance comparability of results with prior periods. Tangible equity is used by Comerica to measure the quality of capital and the return relative to balance sheet risk.

ADJUSTED FINANCIAL RESULTS	Three Months Ended						Years Ended
	December 31,			September 30,			December 31,
(dollar amounts in millions, except per share data)	2019			2019			2019			2018
Noninterest Income:
Noninterest income	$	266		$	256		$	1,010		$	976
Securities repositioning	—			—			8			20
Adjusted noninterest income	$	266		$	256		$	1,018		$	996
Noninterest Expenses:
Noninterest expenses	$	451		$	435		$	1,743		$	1,794
Restructuring charges	—			—			—			(53		)
Adjusted noninterest expenses	$	451		$	435		$	1,743		$	1,741
Pre-tax Income:
Pre-tax income	$	351		$	372		$	1,532		$	1,535
Securities repositioning	—			—			8			20
Restructuring charges	—			—			—			53
Adjusted pre-tax income	$	351		$	372		$	1,540		$	1,608
Provision for Income Taxes:
Provision for income taxes	$	82		$	80		$	334		$	300
Tax on securities repositioning	—			—			2			5
Tax on restructuring charges	—			—			—			12
Discrete tax items	1			5			17			48
Adjusted provision for income taxes	$	83		$	85		$	353		$	365
Net Income:
Net Income	$	269		$	292		$	1,198		$	1,235
Securities repositioning, net of tax	—			—			6			15
Restructuring charges, net of tax	—			—			—			41
Discrete tax items	(1		)	(5		)	(17		)	(48		)
Adjusted net income	$	268		$	287		$	1,187		$	1,243
Diluted Earnings per Share:
Diluted earnings per share	$	1.85		$	1.96		$	7.87		$	7.20
Securities repositioning, net of tax	—			—			0.04			0.09
Restructuring charges, net of tax	—			—			—			0.24
Discrete tax items	—			(0.03		)	(0.10		)	(0.29		)
Adjusted diluted earnings per share	$	1.85		$	1.93		$	7.81		$	7.24
Efficiency Ratio:
Reported	55.46		%	51.54		%	51.82		%	53.56		%
Adjusted	55.46			51.54			51.82			51.96

Securities repositioning refers to losses incurred on the sale of approximately $1 billion and $1.3 billion of treasury securities in 2019 and 2018, respectively, that were replaced by higher-yielding treasuries. Discrete tax items include benefits from state deferred tax adjustments in 2019, employee stock transactions, a review of certain tax capitalization and recovery positions in 2018, and a charge in 2018 to adjust deferred taxes resulting from the Tax Cuts and Jobs Act.

19

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) (Continued)
Comerica Incorporated and Subsidiaries
	December 31,			September 30,			December 31,
(dollar amounts in millions)	2019			2019			2018
Tangible Equity Ratio:
Shareholders' equity	$	7,327		$	7,200		$	7,507
Less:
Goodwill	635			635			635
Other intangible assets	4			4			6
Tangible equity	$	6,688		$	6,561		$	6,866
Total assets	$	73,402		$	72,848		$	70,818
Less:
Goodwill	635			635			635
Other intangible assets	4			4			6
Tangible assets	$	72,763		$	72,209		$	70,177
Equity ratio	9.98		%	9.88		%	10.60		%
Tangible equity ratio	9.19			9.09			9.78
Tangible Equity per Share of Stock:
Shareholders' equity	$	7,327		$	7,200		$	7,507
Tangible equity	6,688			6,561			6,866
Shares of stock outstanding (in millions)	142			144			160
Shareholders' equity per share of stock	$	51.57		$	49.96		$	46.89
Tangible equity per share of stock	47.07			45.52			42.89

The tangible equity ratio removes the effect of intangible assets from capital and total assets. Tangible equity per share of stock removes the effect of intangible assets from shareholders equity per share of stock.

20