Comerica (CMA) 8-K Second Quarter 2023 Net Income of $273 Million, $2.01 Per Share

SECOND QUARTER 2023 NET INCOME OF $273 MILLION, $2.01 PER SHARE

Higher Fee Income, Broad-Based Loan Growth and Prudent Expense Management

Proven Discipline and Excellent Credit Quality with a Solid Capital Position

“Our second quarter results were strong with earnings per share of $2.01, record average loans and our second highest quarter of noninterest income in history,” said Curtis C. Farmer, Comerica Chairman and Chief Executive Officer.

“Customer deposits continued to normalize following the March banking industry disruption and stabilized in the second half of the quarter. Credit quality was excellent with another quarter of net recoveries, and noninterest expenses declined $16 million from the first quarter as we remained committed to running an efficient organization. Our capital position continued to be a source of strength as profitability outpaced loan growth, and our CET1 ratio increased to 10.31.

“With strategic actions and select investments, we are taking steps to further improve our attractive financial results over time and better position ourselves as a long-term banking partner to our customers.”

(dollar amounts in millions, except per share data)	2nd Qtr '23			1st Qtr '23			2nd Qtr '22
FINANCIAL RESULTS
Net interest income	$	621		$	708		$	561
Provision for credit losses	33			30			10
Noninterest income	303			282			268
Noninterest expenses	535			551			482
Pre-tax income	356			409			337
Provision for income taxes	83			85			76
Net income	$	273		$	324		$	261
Diluted earnings per common share	$	2.01		$	2.39		$	1.92
Average loans	55,368			53,468			50,027
Average deposits	64,332			67,833			77,589
Return on average assets	1.21		%	1.54		%	1.18		%
Return on average common shareholders' equity	19.38			24.20			16.72
Net interest margin	2.93			3.57			2.70
Efficiency ratio (a)	57.70			55.53			58.03
Common equity Tier 1 capital ratio (b)	10.31			10.12			9.72
Tier 1 capital ratio (b)	10.80			10.61			10.24

(a)Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net gains (losses) from securities, a derivative contract tied to the conversion rate of Visa Class B shares and changes in the value of shares obtained through monetization of warrants.

(b)June 30, 2023 ratios are estimated.

Second Quarter 2023 Compared to First Quarter 2023 Overview

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

Loans increased $1.9 billion to $55.4 billion.

•Broad-based growth in most lines of business, including increases of $527 million in Commercial Real Estate, $447 million in Corporate Banking, $400 million in National Dealer Services, $325 million in Mortgage Banker Finance and $140 million in Wealth Management.

◦Organic exit from Mortgage Banker Finance business is expected to be mostly complete by year-end 2023.

•Average yield on loans (including swaps) increased 29 basis points to 6.18%, primarily driven by higher short-term rates.

Securities decreased $901 million to $17.9 billion.

•Decrease driven by maturities and paydowns.

•Period-end unrealized losses on securities increased $212 million to $2.9 billion.

Deposits decreased $3.5 billion to $64.3 billion.

•Noninterest-bearing deposits decreased $5.7 billion, partially offset by an increase of $2.2 billion in interest-bearing deposits.

◦Decreases of $1.9 billion in general Middle Market (primarily Financial Institutions and California-based Middle Market lending), $1.2 billion in Retail Banking, $1.0 billion in Technology and Life Sciences, $861 million in Corporate Banking, $773 million in Wealth Management, $689 million in Energy and $564 million in Commercial Real Estate.

◦The above declines were partially offset by an increase of $4.2 billion in brokered time deposits, which are fully insured by the FDIC.

◦On a period-end basis, deposits increased $1.3 billion, reflecting a $3.4 billion increase in interest-bearing deposits, partially offset by a $2.1 billion decline in noninterest-bearing deposits.

•Uninsured deposits as calculated per regulatory guidance decreased $3.4 billion to $31.6 billion, or 47.9% of total deposits. Excluding affiliate deposits, uninsured deposits decreased $3.5 billion to $27.2 billion, or 41.2% of total deposits.

•The average cost of interest-bearing deposits increased 85 basis points to 237 basis points, mostly reflecting an increase in brokered and reciprocal deposits as well as relationship-focused pricing in a rising-rate environment.

Short-term borrowings increased $5.1 billion to $10.6 billion, while medium- and long-term debt increased $3.2 billion to $7.1 billion, reflecting the full impact of FHLB advances borrowed during the first quarter.

•Total liquidity capacity at period-end totaled $42.9 billion, including cash and available liquidity through the FHLB and the FRB discount window and Bank Term Funding Program.

Net interest income decreased $87 million to $621 million.

•The net benefit from higher short-term rates, loan growth and the impact of one additional day in the quarter was more than offset by an increase in borrowings and interest-bearing deposits.

•Net interest margin decreased 64 basis points to 2.93%, primarily reflecting higher-cost funding sources.

Provision for credit losses increased $3 million to $33 million.

•The allowance for credit losses increased $35 million to $728 million at June 30, 2023, reflecting loan growth, the continuation of an uncertain economic outlook and credit migration. As a percentage of total loans, the allowance for credit losses was 1.31%, an increase of 5 basis points.

Noninterest income increased $21 million to $303 million.

•The increase in other noninterest income included a $6 million increase in FHLB stock dividends and a $5 million valuation reserve for assets held for sale recorded in the first quarter, while bank-owned life insurance and fiduciary income increased $4 million each and card fees grew by $3 million.

Noninterest expenses decreased $16 million to $535 million.

•Decreases of $20 million in salaries and benefits expense and $8 million in other noninterest expenses were partially offset by increases of $4 million in outside processing fee expense and $3 million each in FDIC insurance and software expense.

◦Salaries and benefits expense was impacted by seasonal decreases of $20 million in annual stock-based compensation and $6 million in payroll taxes, as well as a decrease of $3 million in incentive compensation, partially offset by increases of $4 million in merit-based salary increases and $3 million each in staff insurance expense and temporary labor.

◦The $8 million decrease in other noninterest expenses was primarily due to decreases of $9 million in certain modernization initiatives (mainly $8 million in contract termination and asset impairment costs included in the first quarter which did not repeat in the second quarter), $8 million in litigation-related expenses and $3 million in operational losses, partially offset by a $6 million refund related to a favorable state tax ruling received in the first quarter and a $5 million increase in legal fees.

Common equity Tier 1 capital ratio of 10.31% and a Tier 1 capital ratio of 10.80%.

•Declared dividends of $94 million on common stock and $5 million on preferred stock.

•Tangible common equity ratio was 5.06%; excluding the impact of accumulated other comprehensive loss, tangible common equity ratio was 9.22%.

See Reconciliations of Non-GAAP Financial Measures and Regulatory Ratios.

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Net Interest Income

Balance sheet items presented and discussed in terms of average balances.

(dollar amounts in millions)	2nd Qtr '23			1st Qtr '23			2nd Qtr '22
Net interest income	$	621		$	708		$	561
Net interest margin	2.93		%	3.57		%	2.70		%
Selected balances:
Total earning assets	$	82,311		$	77,375		$	80,093
Total loans	55,368			53,468			50,027
Total investment securities	17,865			18,766			19,029
Federal Reserve Bank deposits	8,409			4,839			10,409
Total deposits	64,332			67,833			77,589
Total noninterest-bearing deposits	30,559			36,251			42,918
Short-term borrowings	10,568			5,454			5
Medium- and long-term debt	7,073			3,832			2,656

Net interest income decreased $87 million, and net interest margin decreased 64 basis points, compared to first quarter 2023. Amounts shown in parentheses represent the impacts to net interest income and net interest margin, respectively, with impacts of hedging strategy included with rate.

•Interest income on loans increased $75 million and improved net interest margin by 23 basis points, driven by higher short-term rates (+$40 million, +18 basis points), higher loan balances (+$32 million, +8 basis points) and one additional day in the quarter (+$8 million), partially offset by a decrease from other portfolio dynamics (-$5 million, -3 basis points).

•Interest income on investment securities decreased $5 million, while net interest margin remained stable due to lower rates (-$3 million, -1 basis point) and the impact of a decline in lower-yielding securities balances (-$2 million, +1 basis point).

•Interest income on short-term investments increased $55 million and improved net interest margin by 10 basis points, primarily reflecting an increase of $3.6 billion in deposits with the Federal Reserve (+$48 million, +7 basis points), higher short-term rates (+$6 million, +3 basis points) and one additional day in the quarter (+$1 million).

•Interest expense on deposits increased $83 million and reduced net interest margin by 38 basis points, reflecting higher average interest-bearing deposit balances as well as a shift in deposit mix (-$69 million, -32 basis points), higher rates (-$13 million, -6 basis points) and one additional day in the quarter (-$1 million).

•Interest expense on debt increased $129 million and reduced net interest margin by 59 basis points, primarily driven by a $5.2 billion increase in short-term FHLB advances (-$69 million, -32 basis points) and a $3.2 billion increase in medium- and long-term FHLB advances (-$38 million, -17 basis points), as well as higher rates (-$21 million, -10 basis points) and one additional day in the quarter (-$1 million).

The net impact of higher rates to second quarter 2023 net interest income was an increase of $9 million and 4 basis points to net interest margin.

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Credit Quality

“With a third consecutive quarter of net recoveries, credit results remained excellent,” said Farmer. “Elevated interest rates continued to drive credit migration as we saw manageable increases in criticized loans (including nonperforming loans) to 4% of total loans, still below historical levels. This migration, along with loan growth and an uncertain economic outlook, drove a $33 million provision expense for the quarter, and allowance for credit losses increased moderately to 1.31% of total loans. Customers remain focused on conservatively managing their businesses and liquidity as they prepare for potential economic volatility. With our proven credit discipline and relationship approach, we feel well positioned to support our customers.”

(dollar amounts in millions)	2nd Qtr '23			1st Qtr '23			2nd Qtr '22
Credit-related charge-offs	$	11		$	12		$	13
Recoveries	13			14			13
Net credit-related (recoveries) charge-offs	(2)			(2)			—
Net credit-related (recoveries) charge-offs/Average total loans	(0.01		%)	(0.01		%)	—		%
Provision for credit losses	$	33		$	30		$	10
Nonperforming loans	186			221			265
Nonperforming assets (NPAs)	186			221			266
NPAs/Total loans and foreclosed property	0.33		%	0.40		%	0.52		%
Loans past due 90 days or more and still accruing	$	9		$	20		$	12
Allowance for loan losses	684			641			563
Allowance for credit losses on lending-related commitments (a)	44			52			46
Total allowance for credit losses	728			693			609
Allowance for credit losses/Period-end total loans	1.31		%	1.26		%	1.18		%
Allowance for credit losses/Nonperforming loans	3.9x			3.1x			2.3x

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

•The allowance for credit losses increased $35 million to $728 million at June 30, 2023, or 1.31% of total loans, reflecting loan growth, the continuation of an uncertain economic outlook and credit migration.

•Criticized loans increased $130 million to $2.0 billion, or 3.7% of total loans. Criticized loans are generally consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities.

◦The increase in criticized loans was primarily driven by general Middle Market.

•Nonperforming assets decreased $35 million to $186 million, or 0.33% of total loans and foreclosed property, compared to 0.40% in first quarter 2023.

•Net recoveries totaled $2 million, consistent with the first quarter 2023.

Strategic Lines of Business

Comerica's operations are strategically aligned into three major business segments: the Commercial Bank, the Retail Bank and Wealth Management. The Finance Division is also reported as a segment. For a summary of business segment quarterly results, see the Business Segment Financial Results tables included later in this press release. From time to time, 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 structures of Comerica and methodologies in effect at June 30, 2023. A discussion of business segment year-to-date results will be included in Comerica’s Second Quarter 2023 Form 10-Q.

Conference Call and Webcast

Comerica will host a conference call to review second quarter 2023 financial results at 7 a.m. CT Friday, July 21, 2023. Interested parties may access the conference call by calling (877) 336-4440 or (409) 207-6984 (Event ID No. 4619582). The call and supplemental financial information, as well as a replay of the Webcast, can also be accessed via Comerica's "Investor Relations" page at www.comerica.com.

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Comerica Incorporated is a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: the Commercial Bank, the Retail Bank and Wealth Management. Comerica is one of the 25 largest U.S. commercial bank financial holding companies and focuses on building relationships and helping people and businesses be successful. Comerica provides more than 400 banking centers across the country with locations in Arizona, California, Florida, Michigan and Texas. Founded nearly 174 years ago in Detroit, Michigan, Comerica continues to expand into new regions, including its Southeast Market, based in North Carolina, and Mountain West Market in Colorado. Comerica has offices in 17 states and services 14 of the 15 largest U.S. metropolitan areas, as well as Canada and Mexico.

This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Comerica's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as a reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

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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 include credit risks (changes in customer behavior; unfavorable developments concerning credit quality; and declines or other changes in the businesses or industries of Comerica's customers); market risks (changes in monetary and fiscal policies; fluctuations in interest rates and their impact on deposit pricing; and transitions away from LIBOR towards new interest rate benchmarks); liquidity risks (Comerica's ability to maintain adequate sources of funding and liquidity; reductions in Comerica's credit rating; and the interdependence of financial service companies); technology risks (cybersecurity risks and heightened legislative and regulatory focus on cybersecurity and data privacy); operational risks (operational, systems or infrastructure failures; reliance on other companies to provide certain key components of business infrastructure; the impact of legal and regulatory proceedings or determinations; losses due to fraud; and controls and procedures failures); compliance risks (changes in regulation or oversight, or changes in Comerica’s status with respect to existing regulations or oversight; the effects of stringent capital requirements; and the impacts of future legislative, administrative or judicial changes to tax regulations); strategic risks (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 implementation of Comerica's strategies and business initiatives; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; and any future strategic acquisitions or divestitures); and other general risks (changes in general economic, political or industry conditions; negative effects from inflation; the effectiveness of methods of reducing risk exposures; the effects of catastrophic events, including pandemics; physical or transition risks related to climate change; 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 13 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2022, as updated by "Item 1A. Risk Factors" beginning on page 60 of Comerica's Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.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 Contacts:	Investor Contacts:
Nicole Hogan	Kelly Gage
(214) 462-6657	(214) 462-6831
Louis H. Mora	Morgan Mathers
(214) 462-6669	(214) 462-6731

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CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
Comerica Incorporated and Subsidiaries
	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,
(in millions, except per share data)	2023			2023			2022			2023			2022
PER COMMON SHARE AND COMMON STOCK DATA
Diluted earnings per common share	$	2.01		$	2.39		$	1.92		$	4.40		$	3.29
Cash dividends declared	0.71			0.71			0.68			1.42			1.36
Average diluted shares (in thousands)	132,356			132,489			132,446			132,455			132,687
PERFORMANCE RATIOS
Return on average common shareholders' equity	19.38		%	24.20		%	16.72		%	21.73		%	13.13		%
Return on average assets	1.21			1.54			1.18			1.37			1.01
Efficiency ratio (a)	57.70			55.53			58.03			56.58			62.11
CAPITAL
Common equity tier 1 capital (b), (c)	$	8,311		$	8,124		$	7,349
Tier 1 capital (b), (c)	8,705			8,518			7,743
Risk-weighted assets (b)	80,592			80,251			75,588
Common equity tier 1 capital ratio (b), (c)	10.31		%	10.12		%	9.72		%
Tier 1 capital ratio (b), (c)	10.80			10.61			10.24
Total capital ratio (b)	12.79			12.57			11.75
Leverage ratio (b)	9.38			9.71			8.62
Common shareholders' equity per share of common stock	$	39.48		$	42.57		$	46.19
Tangible common equity per share of common stock (c)	34.59			37.68			41.25
Common equity ratio	5.73		%	6.15		%	6.95		%
Tangible common equity ratio (c)	5.06			5.48			6.26
AVERAGE BALANCES
Commercial loans	$	31,663		$	30,517		$	29,918		$	31,093		$	29,101
Real estate construction loans	3,708			3,345			2,332			3,528			2,494
Commercial mortgage loans	13,801			13,464			11,947			13,633			11,798
Lease financing	776			765			642			770			639
International loans	1,268			1,226			1,303			1,247			1,262
Residential mortgage loans	1,858			1,833			1,773			1,846			1,779
Consumer loans	2,294			2,318			2,112			2,306			2,082
Total loans	55,368			53,468			50,027			54,423			49,155
Earning assets	82,311			77,375			80,093			79,857			81,822
Total assets	90,355			85,138			88,810			87,761			89,974
Noninterest-bearing deposits	30,559			36,251			42,918			33,389			43,167
Interest-bearing deposits	33,773			31,582			34,671			32,683			35,175
Total deposits	64,332			67,833			77,589			66,072			78,342
Common shareholders' equity	5,544			5,334			6,131			5,440			6,734
Total shareholders' equity	5,938			5,728			6,525			5,834			7,128
NET INTEREST INCOME
Net interest income	$	621		$	708		$	561		$	1,329		$	1,017
Net interest margin	2.93		%	3.57		%	2.70		%	3.24		%	2.44		%
CREDIT QUALITY
Nonperforming assets	$	186		$	221		$	266
Loans past due 90 days or more and still accruing	9			20			12
Net credit-related (recoveries) charge-offs	(2)			(2)			—			$	(4)		$	8
Allowance for loan losses	684			641			563
Allowance for credit losses on lending-related commitments	44			52			46
Total allowance for credit losses	728			693			609
Allowance for credit losses as a percentage of total loans	1.31		%	1.26		%	1.18		%
Net loan (recoveries) charge-offs as a percentage of average total loans	(0.01)			(0.01)			—			(0.01		%)	0.03		%
Nonperforming assets as a percentage of total loans and foreclosed property	0.33			0.40			0.52
Allowance for credit losses as a multiple of total nonperforming loans	3.9x			3.1x			2.3x
OTHER KEY INFORMATION
Number of banking centers	409			410			433
Number of employees - full time equivalent	7,672			7,586			7,436

(a)    Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net gains (losses) from securities, a derivative contract tied to the conversion rate of Visa Class B shares and changes in the value of shares obtained through monetization of warrants.

(b)    June 30, 2023 ratios are estimated.

(c)    See Reconciliations of Non-GAAP Financial Measures and Regulatory Ratios.

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CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
	June 30,		March 31,		December 31,		June 30,
(in millions, except share data)	2023		2023		2022		2022
	(unaudited)		(unaudited)				(unaudited)
ASSETS
Cash and due from banks	$	1,413	$	1,563	$	1,758	$	1,631
Interest-bearing deposits with banks	8,810		9,171		4,524		5,902
Other short-term investments	389		354		157		160
Investment securities available-for-sale	17,415		18,295		19,012		20,829
Commercial loans	31,745		31,630		30,909		31,259
Real estate construction loans	3,983		3,567		3,105		2,465
Commercial mortgage loans	13,851		13,592		13,306		11,855
Lease financing	756		766		760		653
International loans	1,282		1,233		1,197		1,291
Residential mortgage loans	1,894		1,822		1,814		1,753
Consumer loans	2,253		2,316		2,311		2,178
Total loans	55,764		54,926		53,402		51,454
Allowance for loan losses	(684)		(641)		(610)		(563)
Net loans	55,080		54,285		52,792		50,891
Premises and equipment	397		399		400		422
Accrued income and other assets	7,257		7,060		6,763		7,054
Total assets	$	90,761	$	91,127	$	85,406	$	86,889
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	31,067	$	33,173	$	39,945	$	42,308
Money market and interest-bearing checking deposits	24,397		24,323		26,290		28,409
Savings deposits	2,760		2,998		3,225		3,342
Customer certificates of deposit	2,630		2,077		1,762		1,686
Other time deposits	5,159		2,116		124		—
Foreign office time deposits	2		19		51		20
Total interest-bearing deposits	34,948		31,533		31,452		33,457
Total deposits	66,015		64,706		71,397		75,765
Short-term borrowings	9,558		11,016		3,211		—
Accrued expenses and other liabilities	2,632		2,327		2,593		2,059
Medium- and long-term debt	6,961		7,084		3,024		2,630
Total liabilities	85,166		85,133		80,225		80,454
Fixed-rate reset non-cumulative perpetual preferred stock, series A, no par value, $100,000 liquidation preference per share:
Authorized - 4,000 shares
Issued - 4,000 shares	394		394		394		394
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares	1,141		1,141		1,141		1,141
Capital surplus	2,212		2,209		2,220		2,204
Accumulated other comprehensive loss	(3,756)		(3,171)		(3,742)		(1,954)
Retained earnings	11,648		11,476		11,258		10,752
Less cost of common stock in treasury - 96,449,879 shares at 6/30/23, 96,631,155 shares at 3/31/23, 97,197,962 shares at 12/31/22 and 97,387,508 shares at 6/30/22	(6,044)		(6,055)		(6,090)		(6,102)
Total shareholders' equity	5,595		5,994		5,181		6,435
Total liabilities and shareholders' equity	$	90,761	$	91,127	$	85,406	$	86,889

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Comerica Incorporated and Subsidiaries
	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions, except per share data)	2023		2022		2023		2022
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
INTEREST INCOME
Interest and fees on loans	$	852	$	454	$	1,629	$	837
Interest on investment securities	108		100		221		177
Interest on short-term investments	114		23		173		32
Total interest income	1,074		577		2,023		1,046
INTEREST EXPENSE
Interest on deposits	201		4		319		8
Interest on short-term borrowings	142		—		208		—
Interest on medium- and long-term debt	110		12		167		21
Total interest expense	453		16		694		29
Net interest income	621		561		1,329		1,017
Provision for credit losses	33		10		63		(1)
Net interest income after provision for credit losses	588		551		1,266		1,018
NONINTEREST INCOME
Card fees	72		69		141		138
Fiduciary income	62		62		120		120
Service charges on deposit accounts	47		50		93		98
Capital markets income (a)	39		43		78		72
Commercial lending fees (a)	18		17		36		33
Bank-owned life insurance	14		12		24		25
Letter of credit fees	11		9		21		18
Brokerage fees	8		4		16		8
Other noninterest income (a)	32		2		56		—
Total noninterest income	303		268		585		512
NONINTEREST EXPENSES
Salaries and benefits expense	306		294		632		583
Outside processing fee expense	68		62		132		124
Software expense	43		41		83		80
Occupancy expense	41		40		82		78
FDIC insurance expense	16		8		29		16
Equipment expense	12		13		24		24
Advertising expense	10		8		18		15
Other noninterest expenses	39		16		86		35
Total noninterest expenses	535		482		1,086		955
Income before income taxes	356		337		765		575
Provision for income taxes	83		76		168		125
NET INCOME	273		261		597		450
Less:
Income allocated to participating securities	2		1		3		2
Preferred stock dividends	5		5		11		11
Net income attributable to common shares	$	266	$	255	$	583	$	437
Earnings per common share:
Basic	$	2.02	$	1.94	$	4.43	$	3.33
Diluted	2.01		1.92		4.40		3.29
Comprehensive (loss) income	(312)		(520)		583		(1,292)
Cash dividends declared on common stock	94		89		188		178
Cash dividends declared per common share	0.71		0.68		1.42		1.36

(a)    Adjusted 2022 amounts. See Reconciliations of Previously Reported Balances.

9

CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
	Second		First		Fourth		Third		Second		Second Quarter 2023 Compared to:
	Quarter		Quarter		Quarter		Quarter		Quarter		First Quarter 2023				Second Quarter 2022
(in millions, except per share data)	2023		2023		2022		2022		2022		Amount		Percent		Amount		Percent
INTEREST INCOME
Interest and fees on loans	$	852	$	777	$	719	$	597	$	454	$	75	10	%	$	398	88	%
Interest on investment securities	108		113		118		119		100		(5)		(4)		8		8
Interest on short-term investments	114		59		39		34		23		55		92		91		n/m
Total interest income	1,074		949		876		750		577		125		13		497		86
INTEREST EXPENSE
Interest on deposits	201		118		78		16		4		83		70		197		n/m
Interest on short-term borrowings	142		66		16		1		—		76		n/m		142		n/m
Interest on medium- and long-term debt	110		57		40		26		12		53		94		98		n/m
Total interest expense	453		241		134		43		16		212		88		437		n/m
Net interest income	621		708		742		707		561		(87)		(12)		60		11
Provision for credit losses	33		30		33		28		10		3		14		23		n/m
Net interest income after provision for credit losses	588		678		709		679		551		(90)		(13)		37		7
NONINTEREST INCOME
Card fees	72		69		68		67		69		3		4		3		4
Fiduciary income	62		58		55		58		62		4		6		—		—
Service charges on deposit accounts	47		46		47		50		50		1		—		(3)		(8)
Capital markets income (a)	39		39		34		48		43		—		—		(4)		(9)
Commercial lending fees (a)	18		18		18		17		17		—		—		1		11
Bank-owned life insurance	14		10		10		12		12		4		45		2		18
Letter of credit fees	11		10		10		10		9		1		7		2		18
Brokerage fees	8		8		7		6		4		—		—		4		75
Other noninterest income (a)	32		24		29		10		2		8		31		30		n/m
Total noninterest income	303		282		278		278		268		21		7		35		13
NONINTEREST EXPENSES
Salaries and benefits expense	306		326		318		307		294		(20)		(6)		12		4
Outside processing fee expense	68		64		63		64		62		4		7		6		9
Software expense	43		40		41		40		41		3		5		2		4
Occupancy expense	41		41		53		44		40		—		—		1		2
FDIC insurance expense	16		13		7		8		8		3		19		8		90
Equipment expense	12		12		14		12		13		—		—		(1)		—
Advertising expense	10		8		14		9		8		2		18		2		17
Other noninterest expenses	39		47		31		18		16		(8)		(17)		23		n/m
Total noninterest expenses	535		551		541		502		482		(16)		(3)		53		11
Income before income taxes	356		409		446		455		337		(53)		(13)		19		6
Provision for income taxes	83		85		96		104		76		(2)		(4)		7		9
NET INCOME	273		324		350		351		261		(51)		(16)		12		5
Less:
Income allocated to participating securities	2		1		2		2		1		1		—		1		3
Preferred stock dividends	5		6		6		6		5		(1)		—		—		—
Net income attributable to common shares	$	266	$	317	$	342	$	343	$	255	$	(51)	(16	%)	$	11	5	%
Earnings per common share:
Basic	$	2.02	$	2.41	$	2.61	$	2.63	$	1.94	$	(0.39)	(16	%)	$	0.08	4	%
Diluted	2.01		2.39		2.58		2.60		1.92		(0.38)		(16)		0.09		5
Comprehensive (loss) income	(312)		895		195		(1,282)		(520)		(1,207)		n/m		208		(40)
Cash dividends declared on common stock	94		94		89		89		89		—		—		5		5
Cash dividends declared per common share	0.71		0.71		0.68		0.68		0.68		—		—		0.03		4

(a)    Adjusted 2022 amounts. See Reconciliations of Previously Reported Balances.

n/m - not meaningful

10

ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
	2023						2022
(in millions)	2nd Qtr			1st Qtr				4th Qtr			3rd Qtr			2nd Qtr
Balance at beginning of period:
Allowance for loan losses	$	641		$	610			$	576		$	563		$	554
Allowance for credit losses on lending-related commitments	52			51				48			46			45
Allowance for credit losses	693			661				624			609			599
Loan charge-offs:
Commercial	9			11				10			25			13
International	1			—				—			—			—
Consumer	1			1				1			1			—
Total loan charge-offs	11			12				11			26			13
Recoveries on loans previously charged-off:
Commercial	12			13				13			12			12
Real estate construction	—			—				1			—			—
Commercial mortgage	1			—				—			—			—
Residential mortgage	—			—				—			1			—
Consumer	—			1				1			—			1
Total recoveries	13			14				15			13			13
Net loan (recoveries) charge-offs	(2)			(2)				(4)			13			—
Provision for credit losses:
Provision for loan losses	41			29				30			26			9
Provision for credit losses on lending-related commitments	(8)			1				3			2			1
Provision for credit losses	33			30				33			28			10
Balance at end of period:
Allowance for loan losses	684			641				610			576			563
Allowance for credit losses on lending-related commitments	44			52				51			48			46
Allowance for credit losses	$	728		$	693			$	661		$	624		$	609
Allowance for credit losses as a percentage of total loans	1.31		%	1.26		%		1.24		%	1.21		%	1.18		%
Net loan (recoveries) charge-offs as a percentage of average total loans	(0.01)			(0.01)				(0.03)			0.10			—

11

NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
	2023						2022
(in millions)	2nd Qtr			1st Qtr				4th Qtr			3rd Qtr			2nd Qtr
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial	$	93		$	134			$	142		$	154		$	161
Real estate construction	2			3				3			4			4
Commercial mortgage	37			24				23			25			29
International	4			3				3			5			5
Total nonaccrual business loans	136			164				171			188			199
Retail loans:
Residential mortgage	33			39				53			56			49
Consumer:
Home equity	17			18				15			14			13
Other consumer	—			—				1			1			1
Total nonaccrual retail loans	50			57				69			71			63
Total nonaccrual loans	186			221				240			259			262
Reduced-rate loans	n/a			n/a				4			3			3
Total nonperforming loans	186			221				244			262			265
Foreclosed property	—			—				—			—			1
Total nonperforming assets	$	186		$	221			$	244		$	262		$	266
Nonperforming loans as a percentage of total loans	0.33		%	0.40		%		0.46		%	0.51		%	0.52		%
Nonperforming assets as a percentage of total loans and foreclosed property	0.33			0.40				0.46			0.51			0.52
Allowance for credit losses as a multiple of total nonperforming loans	3.9x			3.1x				2.7x			2.4x			2.3x
Loans past due 90 days or more and still accruing	$	9		$	20			$	23		$	72		$	12
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of period	$	221		$	240			$	259		$	262		$	269
Loans transferred to nonaccrual (a)	17			9				16			45			30
Nonaccrual loan gross charge-offs	(11)			(12)				(11)			(26)			(13)
Loans transferred to accrual status (a)	—			(7)				(7)			—			—
Nonaccrual loans sold	(3)			(1)				(2)			(4)			(9)
Payments/other (b)	(38)			(8)				(15)			(18)			(15)
Nonaccrual loans at end of period	$	186		$	221			$	240		$	259		$	262

(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 or equal to $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed property.

n/a Reduced-rate loans represented troubled debt restructurings (TDRs) which have been renegotiated to less than the original contractual rates. Effective January 1, 2023, the Corporation prospectively adopted the provisions of Accounting Standards Update No. 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures," which eliminated the accounting for TDRs.

12

ANALYSIS OF NET INTEREST INCOME (unaudited)
Comerica Incorporated and Subsidiaries
	Six Months Ended
	June 30, 2023						June 30, 2022
	Average				Average		Average				Average
(dollar amounts in millions)	Balance		Interest		Rate		Balance		Interest		Rate
Commercial loans (a)	$	31,093	$	847	5.50	%	$	29,101	$	514	3.56	%
Real estate construction loans	3,528		138		7.90		2,494		48		3.82
Commercial mortgage loans	13,633		466		6.90		11,798		183		3.13
Lease financing (b)	770		14		3.58		639		9		2.95
International loans	1,247		48		7.85		1,262		21		3.38
Residential mortgage loans	1,846		31		3.35		1,779		25		2.83
Consumer loans	2,306		85		7.43		2,082		37		3.55
Total loans	54,423		1,629		6.04		49,155		837		3.43
Mortgage-backed securities (c)	16,200		214		2.28		15,321		163		1.99
U.S. Treasury securities (d)	2,113		7		0.63		2,862		14		0.99
Total investment securities	18,313		221		2.10		18,183		177		1.83
Interest-bearing deposits with banks (e)	6,839		168		4.95		14,302		32		0.41
Other short-term investments	282		5		3.27		182		—		0.42
Total earning assets	79,857		2,023		4.94		81,822		1,046		2.51
Cash and due from banks	1,313						1,434
Allowance for loan losses	(626)						(568)
Accrued income and other assets	7,217						7,286
Total assets	$	87,761					$	89,974
Money market and interest-bearing checking deposits (f)	$	25,253	241		1.92		$	30,008	6		0.05
Savings deposits	3,011		3		0.19		3,272		—		0.02
Customer certificates of deposit	2,092		18		1.81		1,847		2		0.18
Other time deposits	2,294		56		4.94		—		—		—
Foreign office time deposits	33		1		3.81		48		—		0.34
Total interest-bearing deposits	32,683		319		1.96		35,175		8		0.05
Federal funds purchased	46		1		4.60		3		—		0.56
Other short-term borrowings	7,979		207		5.23		—		—		—
Medium- and long-term debt	5,462		167		6.12		2,711		21		1.55
Total interest-bearing sources	46,170		694		3.02		37,889		29		0.16
Noninterest-bearing deposits	33,389						43,167
Accrued expenses and other liabilities	2,368						1,790
Shareholders' equity	5,834						7,128
Total liabilities and shareholders' equity	$	87,761					$	89,974
Net interest income/rate spread			$	1,329	1.92				$	1,017	2.35
Impact of net noninterest-bearing sources of funds					1.32						0.09
Net interest margin (as a percentage of average earning assets)					3.24	%					2.44	%

(a)Interest income on commercial loans included $(269) million and $47 million of business loan swap (expense) income for the six months ended June 30, 2023 and 2022, respectively.

(b)The six months ended June 30, 2023 included residual value adjustments totaling $6 million, or a 3 basis point impact to average loan yield.

(c)Average balances included $2.6 billion and $1.1 billion of unrealized losses for the six months ended June 30, 2023 and 2022, respectively; yields calculated gross of these unrealized gains and losses.

(d)Average balances included $126 million and $88 million of unrealized losses for the six months ended June 30, 2023 and 2022, respectively; yields calculated gross of these unrealized gains and losses.

(e)Average balances excluded $27 million and $1.0 billion of collateral posted and netted against derivative liability positions for the six months ended June 30, 2023 and 2022, respectively; yields calculated gross of derivative netting amounts.

(f)Average balances excluded $98 million and $82 million of collateral received and netted against derivative asset positions for the six months ended June 30, 2023 and 2022, respectively; rates calculated gross of derivative netting amounts.

13

ANALYSIS OF NET INTEREST INCOME (unaudited)
Comerica Incorporated and Subsidiaries
	Three Months Ended
	June 30, 2023						March 31, 2023						June 30, 2022
	Average				Average		Average				Average		Average				Average
(dollar amounts in millions)	Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate
Commercial loans (a)	$	31,663	$	437	5.54	%	$	30,517	$	410	5.44	%	$	29,918	$	282	3.77	%
Real estate construction loans	3,708		75		8.11		3,345		63		7.66		2,332		24		4.05
Commercial mortgage loans	13,801		245		7.12		13,464		221		6.67		11,947		99		3.33
Lease financing (b)	776		10		5.21		765		4		1.93		642		4		3.01
International loans	1,268		24		7.80		1,226		24		7.91		1,303		12		3.66
Residential mortgage loans	1,858		16		3.40		1,833		15		3.29		1,773		14		3.16
Consumer loans	2,294		45		7.78		2,318		40		7.07		2,112		19		3.64
Total loans	55,368		852		6.18		53,468		777		5.89		50,027		454		3.64
Mortgage-backed securities (c)	16,004		106		2.28		16,397		108		2.28		16,218		93		2.07
U.S. Treasury securities (d)	1,861		2		0.44		2,369		5		0.79		2,811		7		0.98
Total investment securities	17,865		108		2.10		18,766		113		2.10		19,029		100		1.92
Interest-bearing deposits with banks (e)	8,701		110		5.11		4,955		58		4.66		10,861		23		0.75
Other short-term investments	377		4		3.75		186		1		2.28		176		—		0.66
Total earning assets	82,311		1,074		5.07		77,375		949		4.79		80,093		577		2.79
Cash and due from banks	1,163						1,465						1,421
Allowance for loan losses	(642)						(611)						(555)
Accrued income and other assets	7,523						6,909						7,851
Total assets	$	90,355					$	85,138					$	88,810
Money market and interest-bearing checking deposits (f)	$	24,177	132		2.17		$	26,340	109		1.68		$	29,513	3		0.05
Savings deposits	2,877		2		0.21		3,147		1		0.18		3,330		—		0.02
Customer certificates of deposit	2,306		12		2.20		1,875		6		1.31		1,774		1		0.18
Other time deposits	4,395		54		4.98		171		2		3.74		1		—		0.30
Foreign office time deposits	18		1		4.03		49		—		3.72		53		—		0.54
Total interest-bearing deposits	33,773		201		2.37		31,582		118		1.52		34,671		4		0.05
Federal funds purchased	9		—		5.00		83		1		4.56		5		—		0.64
Other short-term borrowings	10,559		142		5.39		5,371		65		4.92		—		—		—
Medium- and long-term debt	7,073		110		6.24		3,832		57		5.94		2,656		12		1.85
Total interest-bearing sources	51,414		453		3.52		40,868		241		2.39		37,332		16		0.19
Noninterest-bearing deposits	30,559						36,251						42,918
Accrued expenses and other liabilities	2,444						2,291						2,035
Shareholders' equity	5,938						5,728						6,525
Total liabilities and shareholders' equity	$	90,355					$	85,138					$	88,810
Net interest income/rate spread			$	621	1.55				$	708	2.40				$	561	2.60
Impact of net noninterest-bearing sources of funds					1.38						1.17						0.10
Net interest margin (as a percentage of average earning assets)					2.93	%					3.57	%					2.70	%

(a)Interest income on commercial loans included $(150) million, $(119) million and $25 million of business loan swap (expense) income for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

(b)The three months ended March 31, 2023 included residual value adjustments totaling $6 million, or a 5 basis point impact to average loan yield.

(c)Average balances included $2.7 billion, $2.6 billion and $1.7 billion of unrealized losses for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively; yields calculated gross of these unrealized losses.

(d)Average balances included $117 million, $135 million and $118 million of unrealized losses for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively; yields calculated gross of these unrealized losses.

(e)Average balances included $46 million, excluded $101 million and excluded $1.4 billion of collateral posted and netted against derivative liability positions for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively; yields calculated gross of derivative netting amounts.

(f)Average balances excluded $231 million, $35 million and $131 million of collateral received and netted against derivative asset positions for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively; rates calculated gross of derivative netting amounts.

14

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Comerica Incorporated and Subsidiaries
								Accumulated Other Comprehensive Loss
	Nonredeemable Preferred Stock		Common Stock											Total Shareholders' Equity
			Shares Outstanding	Amount		Capital Surplus				Retained Earnings		Treasury Stock
(in millions, except per share data)
BALANCE AT MARCH 31, 2022	$	394	130.7	$	1,141	$	2,194	$	(1,173)	$	10,585	$	(6,105)	$	7,036
Net income	—		—	—		—		—		261		—		261
Other comprehensive loss, net of tax	—		—	—		—		(781)		—		—		(781)
Cash dividends declared on common stock ($0.68 per share)	—		—	—		—		—		(89)		—		(89)
Cash dividends declared on preferred stock	—		—	—		—		—		(5)		—		(5)
Net issuance of common stock under employee stock plans	—		0.1	—		(1)		—		—		3		2
Share-based compensation	—		—	—		11		—		—		—		11
BALANCE AT JUNE 30, 2022	$	394	130.8	$	1,141	$	2,204	$	(1,954)	$	10,752	$	(6,102)	$	6,435
BALANCE AT MARCH 31, 2023	$	394	131.5	$	1,141	$	2,209	$	(3,171)	$	11,476	$	(6,055)	$	5,994
Net income	—		—	—		—		—		273		—		273
Other comprehensive loss, net of tax	—		—	—		—		(585)		—		—		(585)
Cash dividends declared on common stock ($0.71 per share)	—		—	—		—		—		(94)		—		(94)
Cash dividends declared on preferred stock	—		—	—		—		—		(5)		—		(5)
Net issuance of common stock under employee stock plans	—		0.2	—		(4)		—		(2)		11		5
Share-based compensation	—		—	—		7		—		—		—		7
BALANCE AT JUNE 30, 2023	$	394	131.7	$	1,141	$	2,212	$	(3,756)	$	11,648	$	(6,044)	$	5,595
BALANCE AT DECEMBER 31, 2021	$	394	130.7	$	1,141	$	2,175	$	(212)	$	10,494	$	(6,095)	$	7,897
Net income	—		—	—		—		—		450		—		450
Other comprehensive loss, net of tax	—		—	—		—		(1,742)		—		—		(1,742)
Cash dividends declared on common stock ($1.36 per share)	—		—	—		—		—		(178)		—		(178)
Cash dividends declared on preferred stock	—		—	—		—		—		(11)		—		(11)
Purchase of common stock	—		(0.4)	—		—		—		—		(36)		(36)
Net issuance of common stock under employee stock plans	—		0.5	—		(10)		—		(3)		29		16
Share-based compensation	—		—	—		39		—		—		—		39
BALANCE AT JUNE 30, 2022	$	394	130.8	$	1,141	$	2,204	$	(1,954)	$	10,752	$	(6,102)	$	6,435
BALANCE AT DECEMBER 31, 2022	$	394	131.0	$	1,141	$	2,220	$	(3,742)	$	11,258	$	(6,090)	$	5,181
Net income	—		—	—		—		—		597		—		597
Other comprehensive loss, net of tax	—		—	—		—		(14)		—		—		(14)
Cash dividends declared on common stock ($1.42 per share)	—		—	—		—		—		(188)		—		(188)
Cash dividends declared on preferred stock	—		—	—		—		—		(11)		—		(11)
Net issuance of common stock under employee stock plans	—		0.7	—		(43)		—		(8)		46		(5)
Share-based compensation	—		—	—		35		—		—		—		35
BALANCE AT JUNE 30, 2023	$	394	131.7	$	1,141	$	2,212	$	(3,756)	$	11,648	$	(6,044)	$	5,595

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BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in millions)	Commercial			Retail			Wealth
Three Months Ended June 30, 2023	Bank			Bank			Management			Finance		Other		Total
Earnings summary:
Net interest income (expense)	$	496		$	214		$	51		$	(165)	$	25	$	621
Provision for credit losses	33			(4)			2			—		2		33
Noninterest income	158			29			83			29		4		303
Noninterest expenses	248			171			89			2		25		535
Provision (benefit) for income taxes	90			18			10			(35)		—		83
Net income (loss)	$	283		$	58		$	33		$	(103)	$	2	$	273
Net credit-related (recoveries) charge-offs	$	(3)		$	—		$	1		$	—	$	—	$	(2)
Selected average balances:
Assets	$	51,548		$	2,930		$	5,625		$	20,046	$	10,206	$	90,355
Loans	47,813			2,214			5,341			—		—		55,368
Deposits	31,030			24,002			3,943			4,980		377		64,332
Statistical data:
Return on average assets (a)	2.21		%	0.94		%	2.31		%	n/m		n/m		1.21		%
Efficiency ratio (b)	37.91			69.73			66.23			n/m		n/m		57.70
	Commercial			Retail			Wealth
Three Months Ended March 31, 2023	Bank			Bank			Management			Finance		Other		Total
Earnings summary:
Net interest income (expense)	$	531		$	222		$	58		$	(123)	$	20	$	708
Provision for credit losses	26			6			(2)			—		—		30
Noninterest income	153			28			73			23		5		282
Noninterest expenses	251			165			106			1		28		551
Provision (benefit) for income taxes	87			19			6			(25)		(2)		85
Net income (loss)	$	320		$	60		$	21		$	(76)	$	(1)	$	324
Net credit-related (recoveries) charge-offs	$	(2)		$	—		$	—		$	—	$	—	$	(2)
Selected average balances:
Assets	$	50,162		$	2,916		$	5,347		$	20,089	$	6,624	$	85,138
Loans	46,065			2,203			5,200			—		—		53,468
Deposits	36,767			25,156			4,716			830		364		67,833
Statistical data:
Return on average assets (a)	2.57		%	0.96		%	1.62		%	n/m		n/m		1.54		%
Efficiency ratio (b)	36.74			65.43			81.17			n/m		n/m		55.53
	Commercial			Retail			Wealth
Three Months Ended June 30, 2022	Bank			Bank			Management			Finance		Other		Total
Earnings summary:
Net interest income (expense)	$	398		$	147		$	47		$	(33)	$	2	$	561
Provision for credit losses	8			(2)			4			—		—		10
Noninterest income	160			32			77			13		(14)		268
Noninterest expenses	237			173			89			—		(17)		482
Provision (benefit) for income taxes	70			2			7			(7)		4		76
Net income (loss)	$	243		$	6		$	24		$	(13)	$	1	$	261
Net credit-related charge-offs (recoveries)	$	2		$	(1)		$	(1)		$	—	$	—	$	—
Selected average balances:
Assets	$	47,596		$	2,768		$	4,963		$	21,078	$	12,405	$	88,810
Loans	43,169			2,015			4,832			—		11		50,027
Deposits	43,738			27,145			5,966			520		220		77,589
Statistical data:
Return on average assets (a)	2.00		%	0.09		%	1.53		%	n/m		n/m		1.18		%
Efficiency ratio (b)	42.35			96.12			71.69			n/m		n/m		58.03

(a)Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.

(b)Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net gains (losses) from securities, a derivative contract tied to the conversion rate of Visa Class B shares and changes in the value of shares obtained through monetization of warrants.

n/m - not meaningful

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RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND REGULATORY RATIOS (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. Tangible common equity is used by Comerica to measure the quality of capital and the return relative to balance sheet risk.

Common equity tier 1 capital ratio removes preferred stock from the Tier 1 capital ratio as defined by and calculated in conformity with bank regulations. 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. Comerica believes that the presentation of tangible common equity adjusted for the impact of accumulated other comprehensive loss provides a greater understanding of ongoing operations and enhances comparability with prior periods.

	June 30,			March 31,			June 30,
(in millions, except share data)	2023			2023			2022
Common Equity Tier 1 Capital (a):
Tier 1 capital	$	8,705		$	8,518		$	7,743
Less:
Fixed-rate reset non-cumulative perpetual preferred stock	394			394			394
Common equity tier 1 capital	$	8,311		$	8,124		$	7,349
Risk-weighted assets	$	80,592		$	80,251		$	75,588
Tier 1 capital ratio	10.80		%	10.61		%	10.24		%
Common equity tier 1 capital ratio	10.31			10.12			9.72
Tangible Common Equity:
Total shareholders' equity	$	5,595		$	5,994		$	6,435
Less:
Fixed-rate reset non-cumulative perpetual preferred stock	394			394			394
Common shareholders' equity	$	5,201		$	5,600		$	6,041
Less:
Goodwill	635			635			635
Other intangible assets	8			9			10
Tangible common equity	$	4,558		$	4,956		$	5,396
Total assets	$	90,761		$	91,127		$	86,889
Less:
Goodwill	635			635			635
Other intangible assets	8			9			10
Tangible assets	$	90,118		$	90,483		$	86,244
Common equity ratio	5.73		%	6.15		%	6.95		%
Tangible common equity ratio	5.06			5.48			6.26
Tangible Common Equity per Share of Common Stock:
Common shareholders' equity	$	5,201		$	5,600		$	6,041
Tangible common equity	4,558			4,956			5,396
Shares of common stock outstanding (in millions)	132			132			131
Common shareholders' equity per share of common stock	$	39.48		$	42.57		$	46.19
Tangible common equity per share of common stock	34.59			37.68			41.25
Impact of Accumulated Other Comprehensive Loss to Tangible Common Equity:
Accumulated other comprehensive loss (AOCI)	$	(3,756)		$	(3,171)		$	(1,954)
Tangible common equity, excluding AOCI	8,314			8,127			7,350
Tangible common equity ratio, excluding AOCI	9.22		%	8.98		%	8.52		%
Tangible common equity per share of common stock, excluding AOCI	$	63.11		$	61.78		$	56.19

(a)June 30, 2023 ratios are estimated.

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Total uninsured deposits as calculated per regulatory guidance and reported on schedule RC-O of Comerica Bank’s Call Report include affiliate deposits, which by definition have a different risk profile than other uninsured deposits. The amounts presented below remove affiliate deposits from the total uninsured deposits number. Comerica believes that the presentation of uninsured deposits adjusted for the impact of affiliate deposits provides enhanced clarity of uninsured deposits at risk.

	June 30,		March 31,		June 30,
(dollar amounts in millions)	2023		2023		2022
Uninsured Deposits:
Total uninsured deposits, as calculated per regulatory guidelines	$	31,627	$	35,007	$	50,229
Less:
Affiliate deposits	(4,412)		(4,329)		(4,056)
Total uninsured deposits, excluding affiliate deposits	$	27,215	$	30,678	$	46,173

RECONCILIATIONS OF PREVIOUSLY REPORTED BALANCES (unaudited)

Comerica Incorporated and Subsidiaries

Beginning with first quarter 2023, Comerica reported derivative income, syndication agent fees (previously a component of commercial lending fees) and investment banking fees (previously a component of other noninterest income) as a combined item captioned by capital markets income on the Consolidated Statements of Comprehensive Income. In addition to the reclassified revenue categories, merger and acquisition advisory fees were included in capital markets income (insignificant in previous periods) beginning with first quarter 2023. Prior periods have been adjusted to conform to this presentation, and the changes in presentation do not impact total noninterest income. The table below reconciles amounts previously reported to the new presentation.

	Three Months Ended						Six Months Ended
	December 31,		September 30,		June 30,			June 30,
(in millions)	2022		2022		2022			2022
Derivative income (as reported)	$	23	$	35	$	29		$	51
Syndication agent fees (a)	10		12		13			19
Investment banking fees (b)	1		1		1			2
Capital markets income	$	34	$	48	$	43		$	72
Commercial lending fees (as reported)	28		29		30			52
Less: Syndication agent fees (a)	10		12		13			19
Commercial lending fees (as adjusted)	$	18	$	17	$	17		$	33
Other noninterest income (as reported)	30		11		3			2
Less: Investment banking fees (b)	1		1		1			2
Other noninterest income (as adjusted)	$	29	$	10	$	2		$	—

(a)Previously reported as a component of commercial lending fees.

(b)Previously reported as a component of other noninterest income.

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