FULL-YEAR 2024 NET INCOME OF $698 MILLION, $5.02 PER SHARE
FOURTH QUARTER 2024 NET INCOME OF $170 MILLION, $1.22 PER SHARE
Enhanced Liquidity Through Lower Wholesale Funding and Favorable Customer Deposit Trends
Strong Credit Quality and Capital Position with Resumption of Share Repurchases
“In 2024, we took steps to further enhance our strong foundation as we improved our capital and liquidity positions while demonstrating credit and expense discipline,” said Curtis C. Farmer, Comerica Chairman and Chief Executive Officer. “Although loan demand remained muted throughout the year, our deliberate deposit focus drove improved customer balances, enabling a meaningful reduction in wholesale funding and benefiting net interest income. Successful execution of our expense calibration efforts demonstrated our commitment to driving efficiency while creating capacity for strategic and risk management investments, and credit quality remained strong with net charge-offs of 10 bps. Despite ongoing volatility in the rate curve, we grew our book value and resumed returning capital to shareholders through share repurchases.”
“In the fourth quarter, we continued to see favorable deposit trends with higher customer balances while strategically managing deposit pricing. As expected, loans were pressured by paydowns in Commercial Real Estate, but we saw promising signals across other businesses that support our outlook for growth in 2025. Although some uncertainty remains, we believe customer sentiment is generally more optimistic about the future of the economy and plans for increased investment in their businesses. Net charge-offs for the quarter remained low, and with a conservative approach to capital management, we produced an estimated CET1 of 11.89%, still well above our 10% strategic target.”
| (dollar amounts in millions, except per share data) | 4th Qtr '24 | 3rd Qtr '24 | 2024 | 2023 | |||||||||||||||||||||||||||||||
| FINANCIAL RESULTS | |||||||||||||||||||||||||||||||||||
| Net interest income | $ | 575 | $ | 534 | $ | 2,190 | $ | 2,514 | |||||||||||||||||||||||||||
| Provision for credit losses | 21 | 14 | 49 | 89 | |||||||||||||||||||||||||||||||
| Noninterest income | 250 | 277 | 1,054 | 1,078 | |||||||||||||||||||||||||||||||
| Noninterest expenses | 587 | 562 | 2,307 | 2,359 | |||||||||||||||||||||||||||||||
| Pre-tax income | 217 | 235 | 888 | 1,144 | |||||||||||||||||||||||||||||||
| Provision for income taxes | 47 | 51 | 190 | 263 | |||||||||||||||||||||||||||||||
| Net income | $ | 170 | $ | 184 | $ | 698 | $ | 881 | |||||||||||||||||||||||||||
| Diluted earnings per common share | $ | 1.22 | $ | 1.33 | $ | 5.02 | $ | 6.44 | |||||||||||||||||||||||||||
| Average loans | 50,617 | 50,861 | 50,979 | 53,903 | |||||||||||||||||||||||||||||||
| Average deposits | 63,347 | 63,896 | 63,901 | 66,018 | |||||||||||||||||||||||||||||||
| Return on average assets (ROA) | 0.85 | % | 0.92 | % | 0.87 | % | 1.01 | % | |||||||||||||||||||||||||||
| Return on average common shareholders' equity (ROE) | 10.27 | 10.88 | 11.23 | 16.50 | |||||||||||||||||||||||||||||||
| Net interest margin | 3.06 | 2.80 | 2.88 | 3.06 | |||||||||||||||||||||||||||||||
| Efficiency ratio (a) | 69.51 | 68.80 | 70.68 | 65.56 | |||||||||||||||||||||||||||||||
| Common equity Tier 1 capital ratio (b) | 11.89 | 11.96 | 11.89 | 11.09 | |||||||||||||||||||||||||||||||
| Tier 1 capital ratio (b) | 12.43 | 12.51 | 12.43 | 11.60 | |||||||||||||||||||||||||||||||
(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)December 31, 2024 ratios are estimated. See Reconciliations of Non-GAAP Financial Measures and Regulatory Ratios for additional information.
Impact of Notable Items to Financial Results
The following table reconciles adjusted diluted earnings per common share, net income attributable to common shareholders and return ratios. See Reconciliations of Non-GAAP Financial Measures and Regulatory Ratios for additional information.
| (dollar amounts in millions, except per share data) | 4th Qtr '24 | 3rd Qtr '24 | 2024 | 2023 | |||||||||||||||||||||||||
| Diluted earnings per common share | $ | 1.22 | $ | 1.33 | $ | 5.02 | $ | 6.44 | |||||||||||||||||||||
| Securities repositioning (a) | 0.11 | — | 0.11 | — | |||||||||||||||||||||||||
| Net BSBY cessation hedging losses (gains) (b) | (0.09) | 0.05 | 0.18 | 0.51 | |||||||||||||||||||||||||
| FDIC special assessment (c) | (0.01) | (0.02) | 0.08 | 0.62 | |||||||||||||||||||||||||
| Modernization and expense recalibration initiatives (d) | (0.03) | 0.01 | — | 0.18 | |||||||||||||||||||||||||
| Adjusted diluted earnings per common share | $ | 1.20 | $ | 1.37 | $ | 5.39 | $ | 7.75 | |||||||||||||||||||||
| Net income attributable to common shareholders | $ | 163 | $ | 177 | $ | 671 | $ | 854 | |||||||||||||||||||||
| Securities repositioning (a) | 19 | — | 19 | — | |||||||||||||||||||||||||
| Net BSBY cessation hedging losses (gains) (b) | (16) | 9 | 32 | 88 | |||||||||||||||||||||||||
| FDIC special assessment (c) | (2) | (4) | 13 | 109 | |||||||||||||||||||||||||
| Modernization and expense recalibration initiatives (d) | (5) | 2 | — | 31 | |||||||||||||||||||||||||
| Income tax impact of above items | 1 | (2) | (15) | (54) | |||||||||||||||||||||||||
| Adjusted net income attributable to common shareholders | $ | 160 | $ | 182 | $ | 720 | $ | 1,028 | |||||||||||||||||||||
| ROA | 0.85 | % | 0.92 | % | 0.87 | % | 1.01 | % | |||||||||||||||||||||
| Adjusted ROA | 0.84 | 0.94 | 0.93 | 1.21 | |||||||||||||||||||||||||
| ROE | 10.27 | 10.88 | 11.23 | 16.50 | |||||||||||||||||||||||||
| Adjusted ROE | 10.08 | 11.22 | 12.02 | 19.77 | |||||||||||||||||||||||||
(a)Securities repositioning relates to losses incurred on the sale of $827 million of Treasury securities that were replaced with higher-yielding Treasury securities with a duration of 1.9 years.
(b)The cessation of the Bloomberg Short-Term Bank Yield Index (BSBY) announced in November 2023 resulted in the de-designation of certain interest rate swaps requiring reclassification of amounts recognized in accumulated other comprehensive income (AOCI) into earnings. All impacted swaps were re-designated as of April 1, 2024; therefore, settlement of interest payments for months after re-designation were recorded as net interest income.
(c)Additional FDIC insurance accrual adjustments resulting from the FDIC Board of Directors’ November 2023 approval of a special assessment to recover the loss to the Deposit Insurance Fund following the failures of Silicon Valley Bank and Signature Bank.
(d)Related to certain initiatives to transform the retail banking delivery model, align corporate facilities and optimize technology platforms, as well as calibrate expenses to enhance earnings power while creating capacity for strategic and risk management initiatives.
Fourth Quarter 2024 Compared to Third Quarter 2024 Overview
Balance sheet items discussed in terms of average balances unless otherwise noted.
Loans decreased $244 million to $50.6 billion.
•Decreases of $225 million in Commercial Real Estate and $132 million in Corporate Banking, partially offset by an increase of $116 million in Energy.
◦Period-end loans were stable at $50.5 billion, with increases of $180 million in Equity Fund Services, $174 million in Energy and $118 million in National Dealer Services, offset by decreases of $531 million in Commercial Real Estate and $228 million in Corporate Banking.
•Average yield on loans (including swaps) increased 1 basis point to 6.25%, reflecting the positive impact from BSBY cessation and higher nonaccrual interest, mostly offset by the impact of the lower rate environment.
Securities decreased $486 million to $15.4 billion, reflecting paydowns and an increase in unrealized losses.
•Sale of $827 million in Treasury securities that were replaced with higher-yielding Treasury securities to reposition securities portfolio.
•Period-end unrealized losses on securities increased $621 million to $2.9 billion.
Deposits decreased $549 million to $63.3 billion.
•Interest-bearing and noninterest-bearing deposits decreased $414 million and $135 million, respectively.
◦Brokered time deposits decreased $1.4 billion, and increases of $1.1 billion in general Middle Market, $134 million in Corporate Banking and $104 million in Commercial Real Estate were partially offset by decreases of $260 million in Retail Banking and $181 million in Equity Fund Services.
◦Period-end deposits increased $734 million, which included a $1.3 billion increase in noninterest-bearing deposits related to the Direct Express government card program, partially offset by a $965 million decrease in brokered time deposits.
2
•The average cost of interest-bearing deposits decreased 40 basis points to 291 basis points, reflecting the impact of disciplined pricing as well as the decrease in brokered time deposits.
Net interest income increased $41 million to $575 million, and net interest margin increased 26 basis points to 3.06%.
•Reflects strategic growth in core interest-bearing deposits and relationship-focused pricing.
•The reduction in interest income on loans resulting from the lower rate environment was largely offset by the positive impact of BSBY cessation.
Provision for credit losses increased $7 million to $21 million.
•The allowance for credit losses increased $5 million to $725 million, reflecting changes in portfolio composition and a relatively consistent economic outlook.
•As a percentage of total loans, the allowance for credit losses was 1.44%, an increase of 1 basis point.
Noninterest income decreased $27 million to $250 million.
•Driven by a $19 million loss related to repositioning the securities portfolio as well as decreases of $4 million in deferred compensation asset returns (offset in noninterest expenses), $3 million each in fiduciary income and capital markets income and $2 million in card fees.
◦Other noninterest income for third quarter 2024 included a $5 million loss pertaining to a derivative related to Visa’s Class B shares.
Noninterest expenses increased $25 million to $587 million.
•Increases of $17 million in litigation-related expenses, $11 million in salaries and benefits expense and $7 million in charitable contributions, as well as smaller increases in other categories, partially offset by $15 million in gains on the sale of real estate and a decrease of $4 million in operational losses.
◦Salaries and benefits expense included increases of $6 million in salaries expense and $5 million in benefits expense.
Estimated common equity Tier 1 capital ratio* of 11.89% and an estimated Tier 1 capital ratio* of 12.43%.
•Returned a total of $193 million to common shareholders through share repurchases and dividends.
◦Repurchased $100 million of common stock (1.5 million shares) under the share repurchase program.
◦Declared dividends of $93 million on common stock and $6 million on preferred stock.
•Common equity ratio of 7.75% and tangible common equity ratio* of 7.00%.
•Share repurchases targeted at approximately $50 million in the first quarter of 2025.
*See Reconciliations of Non-GAAP Financial Measures and Regulatory Ratios for additional information.
Full-Year 2024 Compared to Full-Year 2023 Overview
Balance sheet items discussed in terms of average balances unless otherwise noted.
Loans decreased $2.9 billion to $51.0 billion.
•Decreases of $1.2 billion in Equity Fund Services, $1.1 billion in general Middle Market, $928 million in Mortgage Banker Finance (reflecting strategic exit) and $606 million in Corporate Banking, partially offset by an increase of $1.2 billion in Commercial Real Estate.
•Average yield on loans (including swaps) increased 9 basis points to 6.29%, reflecting the net impact of higher rates (including hedging impacts).
Securities decreased $1.6 billion to $15.8 billion, reflecting paydowns and maturities, partially offset by a decrease in average unrealized losses.
Deposits decreased $2.1 billion to $63.9 billion.
•Noninterest-bearing deposits decreased $5.8 billion, partially offset by a $3.7 billion increase in interest-bearing deposits.
◦Brokered time deposits decreased $960 million, and decreases of $606 million in Technology and Life Sciences, $292 million in Mortgage Banker Finance (reflecting strategic exit), $236 million in Wealth Management, $210 million in Energy and $158 million in National Dealer Services were partially offset by increases of $297 million in general Middle Market and $279 million in Corporate Banking.
•The average cost of interest-bearing deposits increased 66 basis points to 318 basis points, reflecting the cyclical impact of deposit pricing and strategic growth in core interest-bearing deposits.
3
Short-term borrowings decreased $6.4 billion, reflecting a reduction in Federal Home Loan Bank (FHLB) advances, while medium- and long-term debt increased $1.0 billion to $6.9 billion, primarily due to an increase in longer-term FHLB advances.
Net interest income decreased $324 million to $2.2 billion, and net interest margin decreased 18 basis points to 2.88%.
•Driven by lower loan volume, the net impact of higher rates and growth in interest-bearing deposits, partially offset by a decline in short-term FHLB advances.
Provision for credit losses decreased $40 million to $49 million.
•The allowance for credit losses decreased $3 million, reflecting changes in portfolio composition, lower loan balances and an improved economic outlook.
Noninterest income decreased $24 million to $1.1 billion, which included a $19 million loss related to repositioning the securities portfolio.
Results reflect changes in presentation consistent with contractual terms with an investment program partner beginning in November 2023. Comparative impacts attributable to prior year’s presentation included an increase of $22 million in brokerage fees, with corresponding reductions of $24 million in other noninterest income, $21 million in salaries and benefits expense (commission expenses), $20 million in fiduciary income and $1 million in outside processing expense.
•Decreases of $24 million in card fees, $13 million in FHLB stock dividends (component of other noninterest income), $5 million in capital markets income and $4 million in commercial lending fees, partially offset by an increase of $50 million in risk management hedging income (mostly BSBY cessation), a $5 million negotiated vendor payment received in the 2024 period and smaller increases in other categories.
Noninterest expenses decreased $52 million to $2.3 billion.
Results reflect above-described changes in presentation consistent with contractual terms with investment program partner.
•Decreases of $104 million in FDIC insurance expense (primarily driven by special assessment) and $13 million in other noninterest expenses, partially offset by increases of $46 million in salaries and benefits expense and $10 million each in software expense and occupancy expense.
◦Salaries and benefits expense included increases of $27 million in salaries expense and $19 million in benefits expense.
◦Other noninterest expenses included decreases of $24 million in non-salary pension expense and $10 million in litigation-related expenses, partially offset by a $20 million decrease in gains on the sale of real estate.
4
Net Interest Income
Balance sheet items presented and discussed in terms of average balances.
| (dollar amounts in millions) | 4th Qtr '24 | 3rd Qtr '24 | 2024 | 2023 | |||||||||||||||||||||||||
| Net interest income | $ | 575 | $ | 534 | $ | 2,190 | $ | 2,514 | |||||||||||||||||||||
| Net interest margin | 3.06 | % | 2.80 | % | 2.88 | % | 3.06 | % | |||||||||||||||||||||
| Selected balances: | |||||||||||||||||||||||||||||
| Total earning assets | $ | 72,072 | $ | 73,103 | $ | 73,199 | $ | 79,214 | |||||||||||||||||||||
| Total loans | 50,617 | 50,861 | 50,979 | 53,903 | |||||||||||||||||||||||||
| Total investment securities | 15,394 | 15,880 | 15,837 | 17,442 | |||||||||||||||||||||||||
| Federal Reserve Bank deposits | 5,558 | 5,789 | 5,836 | 7,297 | |||||||||||||||||||||||||
| Total deposits | 63,347 | 63,896 | 63,901 | 66,018 | |||||||||||||||||||||||||
| Total noninterest-bearing deposits | 24,222 | 24,357 | 25,082 | 30,882 | |||||||||||||||||||||||||
| Short-term borrowings | 42 | 77 | 837 | 7,218 | |||||||||||||||||||||||||
| Medium- and long-term debt | 6,698 | 6,849 | 6,882 | 5,847 | |||||||||||||||||||||||||
Fourth quarter 2024 net interest income increased $41 million, and net interest margin increased 26 basis points, compared to third quarter 2024. Amounts shown in parentheses below represent the impacts to net interest income and net interest margin, respectively, with impacts of hedging program and BSBY cessation included with rate.
•Interest income on loans decreased $3 million and net interest margin remained stable, driven by the net impact of lower rates (-$4 million, -3 basis points) and lower loan balances (-$5 million, -1 basis point), partially offset by higher nonaccrual interest (+$6 million, +4 basis points).
◦BSBY cessation positively impacted net interest income and net interest margin by $16 million and 9 basis points for fourth quarter 2024, compared to a negative impact of $9 million and 5 basis points for third quarter 2024.
•Interest income on investment securities increased $1 million and improved net interest margin by 2 basis points due to higher rates (+$3 million, +2 basis points), partially offset by a decline in securities balances (-$2 million).
•Interest income on short-term investments decreased $13 million and reduced net interest margin by 6 basis points, primarily reflecting a decrease of $231 million in deposits with the Federal Reserve Bank (-$3 million, -1 basis point) and lower short-term rates (-$10 million, -5 basis points).
•Interest expense on deposits decreased $44 million and improved net interest margin by 23 basis points, reflecting lower pay rates on deposits (+$29 million, +15 basis points) and lower average interest-bearing deposit balances (+$15 million, +8 basis points, which included decreased brokered time deposits).
•Interest expense on debt decreased $12 million and improved net interest margin by 7 basis points, driven by lower rates (+$11 million, +6 basis points) and a decline of $151 million in medium- and long-term debt (+$1 million, +1 basis point).
The net impact of lower rates to fourth quarter 2024 net interest income was an increase of $29 million compared to third quarter 2024 and the net impact of lower rates to fourth quarter 2024 net interest margin was an increase of 15 basis points compared to third quarter 2024.
5
Credit Quality
“Credit quality remained strong with low net charge-offs of 13 basis points," said Farmer. "Persistent inflation and elevated rates continued to pressure customer profitability and drove expected normalization in both criticized and nonperforming loans. This modest migration was expected and already factored into our reserves, and as a result, our allowance for credit losses remained relatively flat at 1.44% of total loans. We continue to feel that our highly regarded approach to credit positions us well to support our customers and navigate future migration.”
| (dollar amounts in millions) | 4th Qtr '24 | 3rd Qtr '24 | 4th Qtr '23 | ||||||||||||||
| Charge-offs | $ | 23 | $ | 23 | $ | 25 | |||||||||||
| Recoveries | 7 | 12 | 5 | ||||||||||||||
| Net charge-offs | 16 | 11 | 20 | ||||||||||||||
| Net charge-offs/Average total loans | 0.13 | % | 0.08 | % | 0.15 | % | |||||||||||
| Provision for credit losses | $ | 21 | $ | 14 | $ | 12 | |||||||||||
| Nonperforming loans and nonperforming assets (NPAs) | 308 | 250 | 178 | ||||||||||||||
| NPAs/Total loans and foreclosed property | 0.61 | % | 0.50 | % | 0.34 | % | |||||||||||
| Loans past due 90 days or more and still accruing | $ | 44 | $ | 21 | $ | 20 | |||||||||||
| Allowance for loan losses | 690 | 686 | 688 | ||||||||||||||
| Allowance for credit losses on lending-related commitments (a) | 35 | 34 | 40 | ||||||||||||||
| Total allowance for credit losses | 725 | 720 | 728 | ||||||||||||||
| Allowance for credit losses/Period-end total loans | 1.44 | % | 1.43 | % | 1.40 | % | |||||||||||
| Allowance for credit losses/Nonperforming loans | 2.4x | 2.9x | 4.1x | ||||||||||||||
(a) Included in accrued expenses and other liabilities on the Consolidated Balance Sheets.
•The allowance for credit losses totaled $725 million at December 31, 2024 and increased by 1 basis point to 1.44% of total loans, reflecting changes in portfolio composition and a relatively consistent economic outlook.
•Criticized loans increased $113 million to $2.5 billion, or 5.0% of total loans. Criticized loans are generally consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities.
•Nonperforming assets increased $58 million to $308 million, or 0.61% of total loans and foreclosed property, compared to 0.50% in third quarter 2024.
•Net charge-offs totaled $16 million, compared to net charge-offs of $11 million in third quarter 2024.
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 December 31, 2024. A discussion of business segment annual results will be included in Comerica’s Annual Report on Form 10-K for the year ended December 31, 2024.
Conference Call and Webcast
Comerica will host a conference call and live webcast to review fourth quarter 2024 financial results at 7 a.m. CT Wednesday, January 22, 2025. Interested parties may access the conference call by calling (877) 484-6065 or (201) 689-8846. 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. Comerica’s presentation may include forward-looking statements, such as descriptions of plans and objectives for future or past operations, products or services; forecasts of revenue, earnings or other measures of economic performance and profitability; and estimates of credit trends and stability.
6
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 over 380 banking centers across the country with locations in Arizona, California, Florida, Michigan and Texas. Founded 175 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 (and Comerica’s related upcoming conference call and live webcast will discuss) 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 or in the investor relations portions of Comerica’s website, www.comerica.com. 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.
7
Forward-looking Statements
Any statements in this press release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as achieve, anticipate, aspire, assume, believe, can, confident, continue, could, designed, enhances, estimate, expect, feel, forecast, forward, future, goal, grow, initiative, intend, look forward, maintain, may, might, mission, model, objective, opportunity, outcome, on track, outlook, plan, position, potential, project, propose, remain, seek, should, strategy, strive, target, trend, until, well-positioned, will, would or similar expressions, as they relate to Comerica or its management, or to economic, market or other environmental conditions, 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 press 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 and fluctuations in interest rates and their impact on deposit pricing); 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 and their soundness); 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; physical or transition risks related to climate change; changes in accounting standards; the critical nature of Comerica's accounting policies, processes and management estimates; the volatility of Comerica’s stock price; and that an investment in Comerica’s equity securities is not insured or guaranteed by the FDIC). 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 Comerica’s filings with the Securities and Exchange Commission. In particular, please refer to “Item 1A. Risk Factors” beginning on page 14 of Comerica's Annual Report on Form 10-K for the year ended December 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 press 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 | (833) 571-0486 | ||||
| Louis H. Mora | Lindsey Baird | ||||
| (214) 462-6669 | (833) 571-0486 | ||||
8
| 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) | 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| PER COMMON SHARE AND COMMON STOCK DATA | ||||||||||||||||||||
| Diluted earnings per common share | $ | 1.22 | $ | 1.33 | $ | 0.20 | $ | 5.02 | $ | 6.44 | ||||||||||
| Cash dividends declared | 0.71 | 0.71 | 0.71 | 2.84 | 2.84 | |||||||||||||||
| Average diluted shares (in thousands) | 133,361 | 134,039 | 132,756 | 133,647 | 132,576 | |||||||||||||||
| PERFORMANCE RATIOS | ||||||||||||||||||||
| Return on average common shareholders' equity | 10.27 | % | 10.88 | % | 2.17 | % | 11.23 | % | 16.50 | % | ||||||||||
| Return on average assets | 0.85 | 0.92 | 0.15 | 0.87 | 1.01 | |||||||||||||||
| Efficiency ratio (a) | 69.51 | 68.80 | 91.86 | 70.68 | 65.56 | |||||||||||||||
| CAPITAL | ||||||||||||||||||||
| Common equity tier 1 capital (b), (c) | $ | 8,667 | $ | 8,683 | $ | 8,414 | ||||||||||||||
| Tier 1 capital (b), (c) | 9,061 | 9,077 | 8,808 | |||||||||||||||||
| Risk-weighted assets (b) | 72,878 | 72,583 | 75,901 | |||||||||||||||||
| Common equity tier 1 capital ratio (b), (c) | 11.89 | % | 11.96 | % | 11.09 | % | ||||||||||||||
| Tier 1 capital ratio (b), (c) | 12.43 | 12.51 | 11.60 | |||||||||||||||||
| Total capital ratio (b) | 14.22 | 14.29 | 13.52 | |||||||||||||||||
| Leverage ratio (b) | 11.08 | 10.98 | 10.06 | |||||||||||||||||
| Common shareholders' equity per share of common stock | $ | 46.79 | $ | 52.52 | $ | 45.58 | ||||||||||||||
| Tangible common equity per share of common stock (c) | 41.91 | 47.69 | 40.70 | |||||||||||||||||
| Common equity ratio | 7.75 | % | 8.75 | % | 7.00 | % | ||||||||||||||
| Tangible common equity ratio (c) | 7.00 | 8.01 | 6.30 | |||||||||||||||||
| AVERAGE BALANCES | ||||||||||||||||||||
| Commercial loans | $ | 26,198 | $ | 26,173 | $ | 28,163 | $ | 26,278 | $ | 30,009 | ||||||||||
| Real estate construction loans | 3,765 | 4,205 | 4,798 | 4,422 | 4,041 | |||||||||||||||
| Commercial mortgage loans | 14,728 | 14,494 | 13,706 | 14,260 | 13,697 | |||||||||||||||
| Lease financing | 752 | 804 | 794 | 791 | 776 | |||||||||||||||
| International loans | 988 | 1,036 | 1,169 | 1,069 | 1,226 | |||||||||||||||
| Residential mortgage loans | 1,921 | 1,905 | 1,902 | 1,902 | 1,877 | |||||||||||||||
| Consumer loans | 2,265 | 2,244 | 2,264 | 2,257 | 2,277 | |||||||||||||||
| Total loans | 50,617 | 50,861 | 52,796 | 50,979 | 53,903 | |||||||||||||||
| Earning assets | 72,072 | 73,103 | 76,167 | 73,199 | 79,214 | |||||||||||||||
| Total assets | 79,234 | 80,231 | 84,123 | 80,568 | 87,194 | |||||||||||||||
| Noninterest-bearing deposits | 24,222 | 24,357 | 27,814 | 25,082 | 30,882 | |||||||||||||||
| Interest-bearing deposits | 39,125 | 39,539 | 38,231 | 38,819 | 35,136 | |||||||||||||||
| Total deposits | 63,347 | 63,896 | 66,045 | 63,901 | 66,018 | |||||||||||||||
| Common shareholders' equity | 6,345 | 6,546 | 4,947 | 6,011 | 5,201 | |||||||||||||||
| Total shareholders' equity | 6,739 | 6,940 | 5,341 | 6,405 | 5,595 | |||||||||||||||
| NET INTEREST INCOME | ||||||||||||||||||||
| Net interest income | $ | 575 | $ | 534 | $ | 584 | $ | 2,190 | $ | 2,514 | ||||||||||
| Net interest margin | 3.06 | % | 2.80 | % | 2.91 | % | 2.88 | % | 3.06 | % | ||||||||||
| CREDIT QUALITY | ||||||||||||||||||||
| Nonperforming assets | $ | 308 | $ | 250 | $ | 178 | ||||||||||||||
| Loans past due 90 days or more and still accruing | 44 | 21 | 20 | |||||||||||||||||
| Net charge-offs | 16 | 11 | 20 | $ | 52 | $ | 22 | |||||||||||||
| Allowance for loan losses | 690 | 686 | 688 | |||||||||||||||||
| Allowance for credit losses on lending-related commitments | 35 | 34 | 40 | |||||||||||||||||
| Total allowance for credit losses | 725 | 720 | 728 | |||||||||||||||||
| Allowance for credit losses as a percentage of total loans | 1.44 | % | 1.43 | % | 1.40 | % | ||||||||||||||
| Net loan charge-offs as a percentage of average total loans | 0.13 | 0.08 | 0.15 | 0.10 | % | 0.04 | % | |||||||||||||
| Nonperforming assets as a percentage of total loans and foreclosed property | 0.61 | 0.50 | 0.34 | |||||||||||||||||
| Allowance for credit losses as a multiple of total nonperforming loans | 2.4x | 2.9x | 4.1x | |||||||||||||||||
| OTHER KEY INFORMATION | ||||||||||||||||||||
| Number of banking centers | 381 | 380 | 408 | |||||||||||||||||
| Number of employees - full time equivalent | 7,766 | 7,666 | 7,701 | |||||||||||||||||
(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) December 31, 2024 ratios are estimated.
(c) See Reconciliations of Non-GAAP Financial Measures and Regulatory Ratios.
9
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||
| Comerica Incorporated and Subsidiaries | ||||||||||||||
| December 31, | September 30, | December 31, | ||||||||||||
| (in millions, except share data) | 2024 | 2024 | 2023 | |||||||||||
| (unaudited) | (unaudited) | |||||||||||||
| ASSETS | ||||||||||||||
| Cash and due from banks | $ | 850 | $ | 870 | $ | 1,443 | ||||||||
| Interest-bearing deposits with banks | 5,954 | 5,523 | 8,059 | |||||||||||
| Other short-term investments | 375 | 364 | 399 | |||||||||||
| Investment securities available-for-sale | 15,045 | 15,886 | 16,869 | |||||||||||
| Commercial loans | 26,492 | 25,953 | 27,251 | |||||||||||
| Real estate construction loans | 3,680 | 3,859 | 5,083 | |||||||||||
| Commercial mortgage loans | 14,493 | 14,774 | 13,686 | |||||||||||
| Lease financing | 722 | 767 | 807 | |||||||||||
| International loans | 952 | 1,003 | 1,102 | |||||||||||
| Residential mortgage loans | 1,929 | 1,901 | 1,889 | |||||||||||
| Consumer loans | 2,271 | 2,260 | 2,295 | |||||||||||
| Total loans | 50,539 | 50,517 | 52,113 | |||||||||||
| Allowance for loan losses | (690) | (686) | (688) | |||||||||||
| Net loans | 49,849 | 49,831 | 51,425 | |||||||||||
| Premises and equipment | 473 | 476 | 445 | |||||||||||
| Accrued income and other assets | 6,751 | 6,713 | 7,194 | |||||||||||
| Total assets | $ | 79,297 | $ | 79,663 | $ | 85,834 | ||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
| Noninterest-bearing deposits | $ | 24,425 | $ | 23,819 | $ | 27,849 | ||||||||
| Money market and interest-bearing checking deposits | 32,714 | 31,469 | 28,246 | |||||||||||
| Savings deposits | 2,138 | 2,155 | 2,381 | |||||||||||
| Customer certificates of deposit | 3,450 | 3,592 | 3,723 | |||||||||||
| Other time deposits | 1,052 | 2,017 | 4,550 | |||||||||||
| Foreign office time deposits | 32 | 25 | 13 | |||||||||||
| Total interest-bearing deposits | 39,386 | 39,258 | 38,913 | |||||||||||
| Total deposits | 63,811 | 63,077 | 66,762 | |||||||||||
| Short-term borrowings | — | — | 3,565 | |||||||||||
| Accrued expenses and other liabilities | 2,270 | 2,434 | 2,895 | |||||||||||
| Medium- and long-term debt | 6,673 | 6,786 | 6,206 | |||||||||||
| Total liabilities | 72,754 | 72,297 | 79,428 | |||||||||||
| 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 | |||||||||||
| Common stock - $5 par value: | ||||||||||||||
| Authorized - 325,000,000 shares | ||||||||||||||
| Issued - 228,164,824 shares | 1,141 | 1,141 | 1,141 | |||||||||||
| Capital surplus | 2,218 | 2,217 | 2,224 | |||||||||||
| Accumulated other comprehensive loss | (3,161) | (2,355) | (3,048) | |||||||||||
| Retained earnings | 12,017 | 11,949 | 11,727 | |||||||||||
| Less cost of common stock in treasury - 96,755,368 shares at 12/31/24, 95,441,515 shares at 9/30/24, 96,266,568 shares at 12/31/23 | (6,066) | (5,980) | (6,032) | |||||||||||
| Total shareholders' equity | 6,543 | 7,366 | 6,406 | |||||||||||
| Total liabilities and shareholders' equity | $ | 79,297 | $ | 79,663 | $ | 85,834 | ||||||||
10
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||||
| Comerica Incorporated and Subsidiaries | |||||||||||||||||
| Three Months Ended | Years Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| (in millions, except per share data) | 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | |||||||||||||||
| INTEREST INCOME | |||||||||||||||||
| Interest and fees on loans | $ | 795 | $ | 849 | $ | 3,204 | $ | 3,340 | |||||||||
| Interest on investment securities | 100 | 104 | 402 | 430 | |||||||||||||
| Interest on short-term investments | 72 | 96 | 333 | 405 | |||||||||||||
| Total interest income | 967 | 1,049 | 3,939 | 4,175 | |||||||||||||
| INTEREST EXPENSE | |||||||||||||||||
| Interest on deposits | 286 | 302 | 1,238 | 892 | |||||||||||||
| Interest on short-term borrowings | 1 | 58 | 48 | 391 | |||||||||||||
| Interest on medium- and long-term debt | 105 | 105 | 463 | 378 | |||||||||||||
| Total interest expense | 392 | 465 | 1,749 | 1,661 | |||||||||||||
| Net interest income | 575 | 584 | 2,190 | 2,514 | |||||||||||||
| Provision for credit losses | 21 | 12 | 49 | 89 | |||||||||||||
| Net interest income after provision for credit losses | 554 | 572 | 2,141 | 2,425 | |||||||||||||
| NONINTEREST INCOME | |||||||||||||||||
| Card fees | 62 | 68 | 256 | 280 | |||||||||||||
| Fiduciary income | 54 | 56 | 220 | 235 | |||||||||||||
| Service charges on deposit accounts | 47 | 45 | 184 | 185 | |||||||||||||
| Capital markets income | 36 | 34 | 142 | 147 | |||||||||||||
| Commercial lending fees | 18 | 17 | 68 | 72 | |||||||||||||
| Brokerage fees | 14 | 8 | 51 | 30 | |||||||||||||
| Bank-owned life insurance | 11 | 10 | 44 | 46 | |||||||||||||
| Letter of credit fees | 10 | 11 | 40 | 42 | |||||||||||||
| Risk management hedging income (loss) | 9 | (74) | 8 | (42) | |||||||||||||
| Net losses on debt securities | (19) | — | (19) | — | |||||||||||||
| Other noninterest income | 8 | 23 | 60 | 83 | |||||||||||||
| Total noninterest income | 250 | 198 | 1,054 | 1,078 | |||||||||||||
| NONINTEREST EXPENSES | |||||||||||||||||
| Salaries and benefits expense | 346 | 359 | 1,352 | 1,306 | |||||||||||||
| Outside processing fee expense | 68 | 70 | 273 | 277 | |||||||||||||
| Occupancy expense | 47 | 45 | 181 | 171 | |||||||||||||
| Software expense | 46 | 44 | 181 | 171 | |||||||||||||
| Equipment expense | 14 | 14 | 52 | 50 | |||||||||||||
| Advertising expense | 11 | 10 | 41 | 40 | |||||||||||||
| FDIC insurance expense | 10 | 132 | 76 | 180 | |||||||||||||
| Other noninterest expenses | 45 | 44 | 151 | 164 | |||||||||||||
| Total noninterest expenses | 587 | 718 | 2,307 | 2,359 | |||||||||||||
| Income before income taxes | 217 | 52 | 888 | 1,144 | |||||||||||||
| Provision for income taxes | 47 | 19 | 190 | 263 | |||||||||||||
| NET INCOME | 170 | 33 | 698 | 881 | |||||||||||||
| Less: | |||||||||||||||||
| Income allocated to participating securities | 1 | — | 4 | 4 | |||||||||||||
| Preferred stock dividends | 6 | 6 | 23 | 23 | |||||||||||||
| Net income attributable to common shares | $ | 163 | $ | 27 | $ | 671 | $ | 854 | |||||||||
| Earnings per common share: | |||||||||||||||||
| Basic | $ | 1.23 | $ | 0.20 | $ | 5.06 | $ | 6.47 | |||||||||
| Diluted | 1.22 | 0.20 | 5.02 | 6.44 | |||||||||||||
| Comprehensive (loss) income | (636) | 1,525 | 585 | 1,575 | |||||||||||||
| Cash dividends declared on common stock | 93 | 93 | 376 | 375 | |||||||||||||
| Cash dividends declared per common share | 0.71 | 0.71 | 2.84 | 2.84 | |||||||||||||
11
| CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited) | |||||||||||||||||||||||||||||||||||
| Comerica Incorporated and Subsidiaries | |||||||||||||||||||||||||||||||||||
| Fourth | Third | Second | First | Fourth | Fourth Quarter 2024 Compared to: | ||||||||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | Third Quarter 2024 | Fourth Quarter 2023 | |||||||||||||||||||||||||||||
| (in millions, except per share data) | 2024 | 2024 | 2024 | 2024 | 2023 | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||
| INTEREST INCOME | |||||||||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 795 | $ | 798 | $ | 803 | $ | 808 | $ | 849 | $ | (3) | — | % | $ | (54) | (6 | %) | |||||||||||||||||
| Interest on investment securities | 100 | 99 | 101 | 102 | 104 | 1 | 1 | (4) | (3) | ||||||||||||||||||||||||||
| Interest on short-term investments | 72 | 85 | 67 | 109 | 96 | (13) | (15) | (24) | (25) | ||||||||||||||||||||||||||
| Total interest income | 967 | 982 | 971 | 1,019 | 1,049 | (15) | (1) | (82) | (8) | ||||||||||||||||||||||||||
| INTEREST EXPENSE | |||||||||||||||||||||||||||||||||||
| Interest on deposits | 286 | 330 | 305 | 317 | 302 | (44) | (13) | (16) | (5) | ||||||||||||||||||||||||||
| Interest on short-term borrowings | 1 | 1 | 9 | 37 | 58 | — | — | (57) | (99) | ||||||||||||||||||||||||||
| Interest on medium- and long-term debt | 105 | 117 | 124 | 117 | 105 | (12) | (11) | — | — | ||||||||||||||||||||||||||
| Total interest expense | 392 | 448 | 438 | 471 | 465 | (56) | (13) | (73) | (16) | ||||||||||||||||||||||||||
| Net interest income | 575 | 534 | 533 | 548 | 584 | 41 | 8 | (9) | (1) | ||||||||||||||||||||||||||
| Provision for credit losses | 21 | 14 | — | 14 | 12 | 7 | 47 | 9 | 84 | ||||||||||||||||||||||||||
Net interest income after provision for credit losses | 554 | 520 | 533 | 534 | 572 | 34 | 7 | (18) | (3) | ||||||||||||||||||||||||||
| NONINTEREST INCOME | |||||||||||||||||||||||||||||||||||
| Card fees | 62 | 64 | 64 | 66 | 68 | (2) | (4) | (6) | (9) | ||||||||||||||||||||||||||
| Fiduciary income | 54 | 57 | 58 | 51 | 56 | (3) | (6) | (2) | (4) | ||||||||||||||||||||||||||
| Service charges on deposit accounts | 47 | 46 | 46 | 45 | 45 | 1 | 2 | 2 | 2 | ||||||||||||||||||||||||||
| Capital markets income | 36 | 39 | 37 | 30 | 34 | (3) | (5) | 2 | 9 | ||||||||||||||||||||||||||
| Commercial lending fees | 18 | 17 | 17 | 16 | 17 | 1 | (2) | 1 | 5 | ||||||||||||||||||||||||||
| Brokerage fees | 14 | 13 | 14 | 10 | 8 | 1 | 3 | 6 | 59 | ||||||||||||||||||||||||||
| Bank-owned life insurance | 11 | 12 | 11 | 10 | 10 | (1) | (10) | 1 | 14 | ||||||||||||||||||||||||||
| Letter of credit fees | 10 | 10 | 10 | 10 | 11 | — | — | (1) | 6 | ||||||||||||||||||||||||||
| Risk management hedging income (loss) | 9 | 7 | 17 | (25) | (74) | 2 | 32 | 83 | n/m | ||||||||||||||||||||||||||
| Net losses on debt securities | (19) | — | — | — | — | (19) | n/m | (19) | n/m | ||||||||||||||||||||||||||
| Other noninterest income | 8 | 12 | 17 | 23 | 23 | (4) | (35) | (15) | (67) | ||||||||||||||||||||||||||
| Total noninterest income | 250 | 277 | 291 | 236 | 198 | (27) | (10) | 52 | 26 | ||||||||||||||||||||||||||
| NONINTEREST EXPENSES | |||||||||||||||||||||||||||||||||||
| Salaries and benefits expense | 346 | 335 | 323 | 348 | 359 | 11 | 3 | (13) | (3) | ||||||||||||||||||||||||||
| Outside processing fee expense | 68 | 69 | 68 | 68 | 70 | (1) | (2) | (2) | (3) | ||||||||||||||||||||||||||
| Occupancy expense | 47 | 46 | 44 | 44 | 45 | 1 | 1 | 2 | 4 | ||||||||||||||||||||||||||
| Software expense | 46 | 46 | 45 | 44 | 44 | — | — | 2 | 5 | ||||||||||||||||||||||||||
| Equipment expense | 14 | 13 | 13 | 12 | 14 | 1 | 7 | — | — | ||||||||||||||||||||||||||
| Advertising expense | 11 | 10 | 12 | 8 | 10 | 1 | — | 1 | 1 | ||||||||||||||||||||||||||
| FDIC insurance expense | 10 | 11 | 19 | 36 | 132 | (1) | 2 | (122) | (92) | ||||||||||||||||||||||||||
| Other noninterest expenses | 45 | 32 | 31 | 43 | 44 | 13 | 42 | 1 | 1 | ||||||||||||||||||||||||||
| Total noninterest expenses | 587 | 562 | 555 | 603 | 718 | 25 | 5 | (131) | (18) | ||||||||||||||||||||||||||
| Income before income taxes | 217 | 235 | 269 | 167 | 52 | (18) | (8) | 165 | n/m | ||||||||||||||||||||||||||
| Provision for income taxes | 47 | 51 | 63 | 29 | 19 | (4) | (8) | 28 | n/m | ||||||||||||||||||||||||||
| NET INCOME | 170 | 184 | 206 | 138 | 33 | (14) | (8) | 137 | n/m | ||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||
| Income allocated to participating securities | 1 | 1 | 1 | 1 | — | — | — | 1 | 94 | ||||||||||||||||||||||||||
| Preferred stock dividends | 6 | 6 | 5 | 6 | 6 | — | — | — | — | ||||||||||||||||||||||||||
| Net income attributable to common shares | $ | 163 | $ | 177 | $ | 200 | $ | 131 | $ | 27 | $ | (14) | (9%) | $ | 136 | n/m | |||||||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||||||||||||||
| Basic | $ | 1.23 | $ | 1.34 | $ | 1.50 | $ | 0.99 | $ | 0.20 | $ | (0.11) | (8%) | $ | 1.03 | n/m | |||||||||||||||||||
| Diluted | 1.22 | 1.33 | 1.49 | 0.98 | 0.20 | (0.11) | (8) | 1.02 | n/m | ||||||||||||||||||||||||||
| Comprehensive (loss) income | (636) | 1,292 | 200 | (271) | 1,525 | (1,928) | n/m | (2,161) | n/m | ||||||||||||||||||||||||||
| Cash dividends declared on common stock | 93 | 94 | 95 | 94 | 93 | (1) | (1) | — | — | ||||||||||||||||||||||||||
| Cash dividends declared per common share | 0.71 | 0.71 | 0.71 | 0.71 | 0.71 | — | — | — | — | ||||||||||||||||||||||||||
n/m - not meaningful
12
| ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES (unaudited) | ||||||||||||||||||||
| Comerica Incorporated and Subsidiaries | ||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||
| (in millions) | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | |||||||||||||||
| Balance at beginning of period: | ||||||||||||||||||||
| Allowance for loan losses | $ | 686 | $ | 686 | $ | 691 | $ | 688 | $ | 694 | ||||||||||
| Allowance for credit losses on lending-related commitments | 34 | 31 | 37 | 40 | 42 | |||||||||||||||
| Allowance for credit losses | 720 | 717 | 728 | 728 | 736 | |||||||||||||||
| Loan charge-offs: | ||||||||||||||||||||
| Commercial | 22 | 11 | 19 | 20 | 13 | |||||||||||||||
| Commercial mortgage | — | 10 | 6 | — | 1 | |||||||||||||||
| Lease financing | — | 1 | 3 | — | — | |||||||||||||||
| International | — | 1 | — | — | 11 | |||||||||||||||
| Consumer | 1 | — | — | 1 | — | |||||||||||||||
| Total loan charge-offs | 23 | 23 | 28 | 21 | 25 | |||||||||||||||
| Recoveries on loans previously charged-off: | ||||||||||||||||||||
| Commercial | 5 | 6 | 15 | 6 | 3 | |||||||||||||||
| Commercial mortgage | 1 | 1 | 1 | — | 2 | |||||||||||||||
| International | 1 | 5 | — | — | — | |||||||||||||||
| Consumer | — | — | 1 | 1 | — | |||||||||||||||
| Total recoveries | 7 | 12 | 17 | 7 | 5 | |||||||||||||||
| Net loan charge-offs | 16 | 11 | 11 | 14 | 20 | |||||||||||||||
| Provision for credit losses: | ||||||||||||||||||||
| Provision for loan losses | 20 | 11 | 6 | 17 | 14 | |||||||||||||||
| Provision for credit losses on lending-related commitments | 1 | 3 | (6) | (3) | (2) | |||||||||||||||
| Provision for credit losses | 21 | 14 | — | 14 | 12 | |||||||||||||||
| Balance at end of period: | ||||||||||||||||||||
| Allowance for loan losses | 690 | 686 | 686 | 691 | 688 | |||||||||||||||
| Allowance for credit losses on lending-related commitments | 35 | 34 | 31 | 37 | 40 | |||||||||||||||
| Allowance for credit losses | $ | 725 | $ | 720 | $ | 717 | $ | 728 | $ | 728 | ||||||||||
| Allowance for credit losses as a percentage of total loans | 1.44 | % | 1.43 | % | 1.38 | % | 1.43 | % | 1.40 | % | ||||||||||
| Net loan charge-offs as a percentage of average total loans | 0.13 | 0.08 | 0.09 | 0.10 | 0.15 | |||||||||||||||
13
| NONPERFORMING ASSETS (unaudited) | ||||||||||||||||||||
| Comerica Incorporated and Subsidiaries | ||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||
| (in millions) | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | |||||||||||||||
| SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS | ||||||||||||||||||||
| Nonperforming loans: | ||||||||||||||||||||
| Business loans: | ||||||||||||||||||||
| Commercial | $ | 125 | $ | 97 | $ | 94 | $ | 88 | $ | 75 | ||||||||||
| Real estate construction | — | — | — | — | 2 | |||||||||||||||
| Commercial mortgage | 118 | 88 | 69 | 67 | 41 | |||||||||||||||
| Lease financing | 1 | 1 | 1 | — | — | |||||||||||||||
| International | — | 3 | 13 | 16 | 20 | |||||||||||||||
| Total nonperforming business loans | 244 | 189 | 177 | 171 | 138 | |||||||||||||||
| Retail loans: | ||||||||||||||||||||
| Residential mortgage | 37 | 36 | 23 | 23 | 19 | |||||||||||||||
| Consumer: | ||||||||||||||||||||
| Home equity | 27 | 25 | 26 | 23 | 21 | |||||||||||||||
| Total nonperforming retail loans | 64 | 61 | 49 | 46 | 40 | |||||||||||||||
| Total nonperforming loans and nonperforming assets | 308 | 250 | 226 | 217 | 178 | |||||||||||||||
| Nonperforming loans as a percentage of total loans | 0.61 | % | 0.50 | % | 0.44 | % | 0.43 | % | 0.34 | % | ||||||||||
| Nonperforming assets as a percentage of total loans and foreclosed property | 0.61 | 0.50 | 0.44 | 0.43 | 0.34 | |||||||||||||||
| Allowance for credit losses as a multiple of total nonperforming loans | 2.4x | 2.9x | 3.2x | 3.4x | 4.1x | |||||||||||||||
| Loans past due 90 days or more and still accruing | $ | 44 | $ | 21 | $ | 11 | $ | 32 | $ | 20 | ||||||||||
| ANALYSIS OF NONACCRUAL LOANS | ||||||||||||||||||||
| Nonaccrual loans at beginning of period | $ | 250 | $ | 226 | $ | 217 | $ | 178 | $ | 154 | ||||||||||
| Loans transferred to nonaccrual (a) | 97 | 55 | 45 | 83 | 54 | |||||||||||||||
| Nonaccrual loan gross charge-offs | (23) | (23) | (28) | (21) | (25) | |||||||||||||||
| Loans transferred to accrual status (a) | (5) | — | — | (2) | — | |||||||||||||||
| Nonaccrual loans sold | (1) | (14) | (2) | (12) | (1) | |||||||||||||||
| Payments/other (b) | (10) | 6 | (6) | (9) | (4) | |||||||||||||||
| Nonaccrual loans at end of period | $ | 308 | $ | 250 | $ | 226 | $ | 217 | $ | 178 | ||||||||||
(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.
14
| ANALYSIS OF NET INTEREST INCOME (unaudited) | |||||||||||||||||||||||
| Comerica Incorporated and Subsidiaries | |||||||||||||||||||||||
| Years Ended | |||||||||||||||||||||||
| December 31, 2024 | December 31, 2023 | ||||||||||||||||||||||
| Average | Average | Average | Average | ||||||||||||||||||||
| (dollar amounts in millions) | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||
| Commercial loans (a) | $ | 26,278 | $ | 1,407 | 5.36 | % | $ | 30,009 | $ | 1,651 | 5.51 | % | |||||||||||
| Real estate construction loans | 4,422 | 367 | 8.30 | 4,041 | 330 | 8.16 | |||||||||||||||||
| Commercial mortgage loans | 14,260 | 1,045 | 7.32 | 13,697 | 981 | 7.17 | |||||||||||||||||
| Lease financing | 791 | 48 | 6.08 | 776 | 37 | 4.72 | |||||||||||||||||
| International loans | 1,069 | 82 | 7.71 | 1,226 | 98 | 7.96 | |||||||||||||||||
| Residential mortgage loans | 1,902 | 72 | 3.78 | 1,877 | 66 | 3.54 | |||||||||||||||||
| Consumer loans | 2,257 | 183 | 8.10 | 2,277 | 177 | 7.76 | |||||||||||||||||
| Total loans | 50,979 | 3,204 | 6.29 | 53,903 | 3,340 | 6.20 | |||||||||||||||||
| Mortgage-backed securities (b) | 14,438 | 394 | 2.29 | 15,546 | 421 | 2.28 | |||||||||||||||||
| U.S. Treasury securities (c) | 1,399 | 8 | 0.60 | 1,896 | 9 | 0.47 | |||||||||||||||||
| Total investment securities | 15,837 | 402 | 2.16 | 17,442 | 430 | 2.10 | |||||||||||||||||
| Interest-bearing deposits with banks (d) | 6,007 | 318 | 5.30 | 7,530 | 392 | 5.21 | |||||||||||||||||
| Other short-term investments | 376 | 15 | 3.89 | 339 | 13 | 3.72 | |||||||||||||||||
| Total earning assets | 73,199 | 3,939 | 5.18 | 79,214 | 4,175 | 5.08 | |||||||||||||||||
| Cash and due from banks | 691 | 1,214 | |||||||||||||||||||||
| Allowance for loan losses | (688) | (658) | |||||||||||||||||||||
| Accrued income and other assets | 7,366 | 7,424 | |||||||||||||||||||||
| Total assets | $ | 80,568 | $ | 87,194 | |||||||||||||||||||
| Money market and interest-bearing checking deposits (e) | $ | 30,203 | 962 | 3.18 | $ | 26,054 | 627 | 2.39 | |||||||||||||||
| Savings deposits | 2,243 | 5 | 0.20 | 2,774 | 6 | 0.21 | |||||||||||||||||
| Customer certificates of deposit | 3,733 | 131 | 3.51 | 2,708 | 75 | 2.77 | |||||||||||||||||
| Other time deposits | 2,617 | 139 | 5.31 | 3,577 | 183 | 5.13 | |||||||||||||||||
| Foreign office time deposits | 23 | 1 | 4.32 | 23 | 1 | 4.02 | |||||||||||||||||
| Total interest-bearing deposits | 38,819 | 1,238 | 3.18 | 35,136 | 892 | 2.52 | |||||||||||||||||
| Federal funds purchased | 8 | — | 5.28 | 29 | 1 | 4.77 | |||||||||||||||||
| Other short-term borrowings | 829 | 48 | 5.73 | 7,189 | 390 | 5.41 | |||||||||||||||||
| Medium- and long-term debt | 6,882 | 463 | 6.73 | 5,847 | 378 | 6.47 | |||||||||||||||||
| Total interest-bearing sources | 46,538 | 1,749 | 3.75 | 48,201 | 1,661 | 3.43 | |||||||||||||||||
| Noninterest-bearing deposits | 25,082 | 30,882 | |||||||||||||||||||||
| Accrued expenses and other liabilities | 2,543 | 2,516 | |||||||||||||||||||||
| Shareholders' equity | 6,405 | 5,595 | |||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 80,568 | $ | 87,194 | |||||||||||||||||||
| Net interest income/rate spread | $ | 2,190 | 1.43 | $ | 2,514 | 1.65 | |||||||||||||||||
| Impact of net noninterest-bearing sources of funds | 1.45 | 1.41 | |||||||||||||||||||||
| Net interest margin (as a percentage of average earning assets) | 2.88 | % | 3.06 | % | |||||||||||||||||||
(a)Interest income on commercial loans included net expense from cash flow swaps of $637 million and $602 million for the year ended December 31, 2024 and 2023, respectively.
(b)Average balances included $2.8 billion and $2.9 billion of unrealized losses for the year ended December 31, 2024 and 2023; yields calculated gross of these unrealized gains and losses.
(c)Average balances included $47 million and $115 million of unrealized losses for the year ended December 31, 2024 and 2023, respectively; yields calculated gross of these unrealized gains and losses.
(d)Average balances excluded $1 million and included $5 million of collateral posted and netted against derivative liability positions for the year ended December 31, 2024 and 2023, respectively; yields calculated gross of derivative netting amounts.
(e)Average balances excluded $100 million and $195 million of collateral received and netted against derivative asset positions for the year ended December 31, 2024 and 2023, respectively; rates calculated gross of derivative netting amounts.
15
| ANALYSIS OF NET INTEREST INCOME (unaudited) | |||||||||||||||||||||||||||||||||||
| Comerica Incorporated and Subsidiaries | |||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| December 31, 2024 | September 30, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||
| Average | Average | Average | Average | Average | Average | ||||||||||||||||||||||||||||||
| (dollar amounts in millions) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||||||||
| Commercial loans (a) | $ | 26,198 | $ | 372 | 5.65 | % | $ | 26,173 | $ | 341 | 5.18 | % | $ | 28,163 | $ | 388 | 5.47 | % | |||||||||||||||||
| Real estate construction loans | 3,765 | 75 | 7.89 | 4,205 | 89 | 8.43 | 4,798 | 102 | 8.42 | ||||||||||||||||||||||||||
| Commercial mortgage loans | 14,728 | 257 | 6.95 | 14,494 | 272 | 7.44 | 13,706 | 258 | 7.48 | ||||||||||||||||||||||||||
| Lease financing | 752 | 11 | 5.90 | 804 | 12 | 6.10 | 794 | 12 | 6.14 | ||||||||||||||||||||||||||
| International loans | 988 | 18 | 7.26 | 1,036 | 20 | 7.73 | 1,169 | 25 | 8.15 | ||||||||||||||||||||||||||
| Residential mortgage loans | 1,921 | 17 | 3.62 | 1,905 | 19 | 3.94 | 1,902 | 17 | 3.74 | ||||||||||||||||||||||||||
| Consumer loans | 2,265 | 45 | 7.80 | 2,244 | 45 | 8.04 | 2,264 | 47 | 8.07 | ||||||||||||||||||||||||||
| Total loans | 50,617 | 795 | 6.25 | 50,861 | 798 | 6.24 | 52,796 | 849 | 6.38 | ||||||||||||||||||||||||||
| Mortgage-backed securities (b) | 14,075 | 96 | 2.30 | 14,608 | 98 | 2.29 | 14,602 | 103 | 2.28 | ||||||||||||||||||||||||||
| U.S. Treasury securities (c) | 1,319 | 4 | 1.32 | 1,272 | 1 | 0.50 | 1,687 | 1 | 0.26 | ||||||||||||||||||||||||||
| Total investment securities | 15,394 | 100 | 2.22 | 15,880 | 99 | 2.17 | 16,289 | 104 | 2.10 | ||||||||||||||||||||||||||
| Interest-bearing deposits with banks (d) | 5,695 | 68 | 4.71 | 5,969 | 81 | 5.32 | 6,685 | 92 | 5.46 | ||||||||||||||||||||||||||
| Other short-term investments | 366 | 4 | 3.73 | 393 | 4 | 3.83 | 397 | 4 | 4.07 | ||||||||||||||||||||||||||
| Total earning assets | 72,072 | 967 | 5.15 | 73,103 | 982 | 5.17 | 76,167 | 1,049 | 5.23 | ||||||||||||||||||||||||||
| Cash and due from banks | 630 | 593 | 1,103 | ||||||||||||||||||||||||||||||||
| Allowance for loan losses | (687) | (686) | (694) | ||||||||||||||||||||||||||||||||
| Accrued income and other assets | 7,219 | 7,221 | 7,547 | ||||||||||||||||||||||||||||||||
| Total assets | $ | 79,234 | $ | 80,231 | $ | 84,123 | |||||||||||||||||||||||||||||
| Money market and interest-bearing checking deposits (e) | $ | 32,045 | 238 | 2.95 | $ | 30,960 | 260 | 3.34 | $ | 27,644 | 208 | 2.96 | |||||||||||||||||||||||
| Savings deposits | 2,142 | 1 | 0.16 | 2,194 | 1 | 0.19 | 2,440 | 1 | 0.21 | ||||||||||||||||||||||||||
| Customer certificates of deposit | 3,542 | 28 | 3.21 | 3,625 | 31 | 3.39 | 3,577 | 33 | 3.63 | ||||||||||||||||||||||||||
| Other time deposits | 1,371 | 19 | 5.35 | 2,739 | 37 | 5.35 | 4,557 | 60 | 5.22 | ||||||||||||||||||||||||||
| Foreign office time deposits | 25 | — | 4.14 | 21 | 1 | 4.38 | 13 | — | 4.75 | ||||||||||||||||||||||||||
| Total interest-bearing deposits | 39,125 | 286 | 2.91 | 39,539 | 330 | 3.31 | 38,231 | 302 | 3.12 | ||||||||||||||||||||||||||
| Federal funds purchased | 5 | — | 4.68 | — | — | — | 15 | — | 5.37 | ||||||||||||||||||||||||||
| Other short-term borrowings | 37 | 1 | 4.77 | 77 | 1 | 5.65 | 3,987 | 58 | 5.74 | ||||||||||||||||||||||||||
| Medium- and long-term debt | 6,698 | 105 | 6.28 | 6,849 | 117 | 6.87 | 6,070 | 105 | 6.94 | ||||||||||||||||||||||||||
| Total interest-bearing sources | 45,865 | 392 | 3.40 | 46,465 | 448 | 3.84 | 48,303 | 465 | 3.81 | ||||||||||||||||||||||||||
| Noninterest-bearing deposits | 24,222 | 24,357 | 27,814 | ||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 2,408 | 2,469 | 2,665 | ||||||||||||||||||||||||||||||||
| Shareholders' equity | 6,739 | 6,940 | 5,341 | ||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 79,234 | $ | 80,231 | $ | 84,123 | |||||||||||||||||||||||||||||
| Net interest income/rate spread | $ | 575 | 1.75 | $ | 534 | 1.33 | $ | 584 | 1.42 | ||||||||||||||||||||||||||
| Impact of net noninterest-bearing sources of funds | 1.31 | 1.47 | 1.49 | ||||||||||||||||||||||||||||||||
| Net interest margin (as a percentage of average earning assets) | 3.06 | % | 2.80 | % | 2.91 | % | |||||||||||||||||||||||||||||
(a)Interest income on commercial loans included net expense from cash flow swaps of $115 million, $178 million and $170 million for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively.
(b)Average balances included $2.7 billion, $2.4 billion and $3.4 billion of unrealized losses for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively; yields calculated gross of these unrealized losses.
(c)Average balances included $22 million, $38 million and $94 million of unrealized losses for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively; yields calculated gross of these unrealized losses.
(d)Average balances excluded $10 million, included $13 million and included $14 million of collateral posted and netted against derivative liability positions for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively; yields calculated gross of derivative netting amounts.
(e)Average balances excluded $76 million, $72 million and $141 million of collateral received and netted against derivative asset positions for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively; rates calculated gross of derivative netting amounts.
16
| 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 SEPTEMBER 30, 2023 | $ | 394 | 131.8 | $ | 1,141 | $ | 2,220 | $ | (4,540) | $ | 11,796 | $ | (6,039) | $ | 4,972 | ||||||||||||||
| Net income | — | — | — | — | — | 33 | — | 33 | |||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | 1,492 | — | — | 1,492 | |||||||||||||||||||||
| Cash dividends declared on common stock ($0.71 per share) | — | — | — | — | — | (93) | — | (93) | |||||||||||||||||||||
| Cash dividends declared on preferred stock | — | — | — | — | — | (6) | — | (6) | |||||||||||||||||||||
| Net issuance of common stock under employee stock plans | — | 0.1 | — | (4) | — | (3) | 7 | — | |||||||||||||||||||||
| Share-based compensation | — | — | — | 8 | — | — | — | 8 | |||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2023 | $ | 394 | 131.9 | $ | 1,141 | $ | 2,224 | $ | (3,048) | $ | 11,727 | $ | (6,032) | $ | 6,406 | ||||||||||||||
| BALANCE AT SEPTEMBER 30, 2024 | $ | 394 | 132.7 | $ | 1,141 | $ | 2,217 | $ | (2,355) | $ | 11,949 | $ | (5,980) | $ | 7,366 | ||||||||||||||
| Net income | — | — | — | — | — | 170 | — | 170 | |||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | (806) | — | — | (806) | |||||||||||||||||||||
| Cash dividends declared on common stock ($0.71 per share) | — | — | — | — | — | (93) | — | (93) | |||||||||||||||||||||
| Cash dividends declared on preferred stock | — | — | — | — | — | (6) | — | (6) | |||||||||||||||||||||
| Purchase of common stock | — | (1.5) | — | (4) | — | — | (96) | (100) | |||||||||||||||||||||
| Net issuance of common stock under employee stock plans | — | 0.2 | — | (4) | — | (3) | 10 | 3 | |||||||||||||||||||||
| Share-based compensation | — | — | — | 9 | — | — | — | 9 | |||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2024 | $ | 394 | 131.4 | $ | 1,141 | $ | 2,218 | $ | (3,161) | $ | 12,017 | $ | (6,066) | $ | 6,543 | ||||||||||||||
| BALANCE AT DECEMBER 31, 2022 | $ | 394 | 131.0 | $ | 1,141 | $ | 2,220 | $ | (3,742) | $ | 11,258 | $ | (6,090) | $ | 5,181 | ||||||||||||||
| Net income | — | — | — | — | — | 881 | — | 881 | |||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | 694 | — | — | 694 | |||||||||||||||||||||
| Cash dividends declared on common stock ($2.84 per share) | — | — | — | — | — | (375) | — | (375) | |||||||||||||||||||||
| Cash dividends declared on preferred stock | — | — | — | — | — | (23) | — | (23) | |||||||||||||||||||||
| Net issuance of common stock under employee stock plans | — | 0.9 | — | (48) | — | (14) | 58 | (4) | |||||||||||||||||||||
| Share-based compensation | — | — | — | 52 | — | — | — | 52 | |||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2023 | $ | 394 | 131.9 | $ | 1,141 | $ | 2,224 | $ | (3,048) | $ | 11,727 | $ | (6,032) | $ | 6,406 | ||||||||||||||
| Cumulative effect of change in accounting principle (a) | — | — | — | — | — | (4) | — | (4) | |||||||||||||||||||||
| Net income | — | — | — | — | — | 698 | — | 698 | |||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | (113) | — | — | (113) | |||||||||||||||||||||
| Cash dividends declared on common stock ($2.84 per share) | — | — | — | — | — | (376) | — | (376) | |||||||||||||||||||||
| Cash dividends declared on preferred stock | — | — | — | — | — | (23) | — | (23) | |||||||||||||||||||||
| Purchase of common stock | — | (1.5) | — | (4) | — | — | (96) | (100) | |||||||||||||||||||||
| Net issuance of common stock under employee stock plans | — | 1.0 | — | (56) | — | (5) | 62 | 1 | |||||||||||||||||||||
| Share-based compensation | — | — | — | 54 | — | — | — | 54 | |||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2024 | $ | 394 | 131.4 | $ | 1,141 | $ | 2,218 | $ | (3,161) | $ | 12,017 | $ | (6,066) | $ | 6,543 | ||||||||||||||
(a)Effective January 1, 2024, the Corporation adopted ASU 2023-02, which expanded the permitted use of the proportional amortization method to certain tax credit investments.
17
| BUSINESS SEGMENT FINANCIAL RESULTS (unaudited) | |||||||||||||||||||||||||||||||||||
| Comerica Incorporated and Subsidiaries | |||||||||||||||||||||||||||||||||||
| (dollar amounts in millions) | Commercial Bank | Retail Bank | Wealth Management | Finance | Other | Total | |||||||||||||||||||||||||||||
| Three Months Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Earnings summary: | |||||||||||||||||||||||||||||||||||
| Net interest income (expense) | $ | 463 | $ | 204 | $ | 47 | $ | (181) | $ | 42 | $ | 575 | |||||||||||||||||||||||
| Provision for credit losses | 25 | (2) | (4) | — | 2 | 21 | |||||||||||||||||||||||||||||
| Noninterest income | 150 | 27 | 71 | 2 | — | 250 | |||||||||||||||||||||||||||||
| Noninterest expenses | 272 | 174 | 98 | 1 | 42 | 587 | |||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 70 | 14 | 5 | (44) | 2 | 47 | |||||||||||||||||||||||||||||
| Net income (loss) | $ | 246 | $ | 45 | $ | 19 | $ | (136) | $ | (4) | $ | 170 | |||||||||||||||||||||||
| Net charge-offs (recoveries) | $ | 15 | $ | 1 | $ | — | $ | — | $ | — | $ | 16 | |||||||||||||||||||||||
| Selected average balances: | |||||||||||||||||||||||||||||||||||
| Assets | $ | 45,445 | $ | 3,055 | $ | 5,201 | $ | 17,825 | $ | 7,708 | $ | 79,234 | |||||||||||||||||||||||
| Loans | 43,258 | 2,374 | 4,982 | — | 3 | 50,617 | |||||||||||||||||||||||||||||
| Deposits | 33,313 | 23,964 | 3,882 | 1,946 | 242 | 63,347 | |||||||||||||||||||||||||||||
| Commercial Bank | Retail Bank | Wealth Management | Finance | Other | Total | ||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||
| Earnings summary: | |||||||||||||||||||||||||||||||||||
| Net interest income (expense) | $ | 465 | $ | 205 | $ | 45 | $ | (220) | $ | 39 | $ | 534 | |||||||||||||||||||||||
| Provision for credit losses | 6 | 4 | 3 | — | 1 | 14 | |||||||||||||||||||||||||||||
| Noninterest income | 148 | 24 | 74 | 26 | 5 | 277 | |||||||||||||||||||||||||||||
| Noninterest expenses | 252 | 175 | 90 | 1 | 44 | 562 | |||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 83 | 12 | 7 | (48) | (3) | 51 | |||||||||||||||||||||||||||||
| Net income (loss) | $ | 272 | $ | 38 | $ | 19 | $ | (147) | $ | 2 | $ | 184 | |||||||||||||||||||||||
| Net charge-offs | $ | 10 | $ | 1 | $ | — | $ | — | $ | — | $ | 11 | |||||||||||||||||||||||
| Selected average balances: | |||||||||||||||||||||||||||||||||||
| Assets | $ | 45,668 | $ | 3,045 | $ | 5,296 | $ | 18,277 | $ | 7,945 | $ | 80,231 | |||||||||||||||||||||||
| Loans | 43,462 | 2,347 | 5,042 | — | 10 | 50,861 | |||||||||||||||||||||||||||||
| Deposits | 32,262 | 24,224 | 3,844 | 3,299 | 267 | 63,896 | |||||||||||||||||||||||||||||
| Commercial Bank | Retail Bank | Wealth Management | Finance | Other | Total | ||||||||||||||||||||||||||||||
| Three Months Ended December 31, 2023 | |||||||||||||||||||||||||||||||||||
| Earnings summary: | |||||||||||||||||||||||||||||||||||
| Net interest income (expense) | $ | 502 | $ | 202 | $ | 49 | $ | (200) | $ | 31 | $ | 584 | |||||||||||||||||||||||
| Provision for credit losses | 10 | 1 | 3 | — | (2) | 12 | |||||||||||||||||||||||||||||
| Noninterest income | 142 | 31 | 73 | (55) | 7 | 198 | |||||||||||||||||||||||||||||
| Noninterest expenses | 349 | 217 | 105 | 8 | 39 | 718 | |||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 72 | 5 | 4 | (63) | 1 | 19 | |||||||||||||||||||||||||||||
| Net income (loss) | $ | 213 | $ | 10 | $ | 10 | $ | (200) | $ | — | $ | 33 | |||||||||||||||||||||||
| Net charge-offs | $ | 19 | $ | 1 | $ | — | $ | — | $ | — | $ | 20 | |||||||||||||||||||||||
| Selected average balances: | |||||||||||||||||||||||||||||||||||
| Assets | $ | 48,131 | $ | 3,006 | $ | 5,471 | $ | 19,157 | $ | 8,358 | $ | 84,123 | |||||||||||||||||||||||
| Loans | 45,355 | 2,277 | 5,160 | — | 4 | 52,796 | |||||||||||||||||||||||||||||
| Deposits | 32,470 | 24,273 | 3,921 | 5,093 | 288 | 66,045 | |||||||||||||||||||||||||||||
n/m - not meaningful
18
| 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 performance trends. Comerica believes adjusted net income, adjusted earnings per share, adjusted ROA and adjusted ROE provide a greater understanding of ongoing operations and financial results by removing the impact of notable items from net income, net income available to common shareholders, average assets and average common shareholders’ equity. Notable items are meaningful because they provide greater detail of how certain events or initiatives affect Comerica’s results for a more informed understanding of those results. Tangible common equity is used by Comerica to measure the quality of capital and the return relative to balance sheet risk.
| Fourth | Third | Fourth | Years Ended | |||||||||||||||||
| Quarter | Quarter | Quarter | December 31, | |||||||||||||||||
| (dollar amounts in millions, except per share data) | 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| Adjusted Earnings per Common Share: | ||||||||||||||||||||
| Net income attributable to common shareholders | $ | 163 | $ | 177 | $ | 27 | $ | 671 | $ | 854 | ||||||||||
| Securities repositioning (a) | 19 | — | — | 19 | — | |||||||||||||||
| Net BSBY cessation hedging losses (gains) (b) | (16) | 9 | 88 | 32 | 88 | |||||||||||||||
| FDIC special assessment (c) | (2) | (4) | 109 | 13 | 109 | |||||||||||||||
| Modernization and expense recalibration initiatives (d) | (5) | 2 | 21 | — | 31 | |||||||||||||||
| Income tax impact of above items | 1 | (2) | (52) | (15) | (54) | |||||||||||||||
| Adjusted net income attributable to common shareholders | $ | 160 | $ | 182 | $ | 193 | $ | 720 | $ | 1,028 | ||||||||||
| Diluted average common shares (in millions) | 133 | 134 | 133 | 134 | 133 | |||||||||||||||
| Diluted earnings per common share: | ||||||||||||||||||||
| Reported | $ | 1.22 | $ | 1.33 | $ | 0.20 | $ | 5.02 | $ | 6.44 | ||||||||||
| Adjusted | 1.20 | 1.37 | 1.46 | 5.39 | 7.75 | |||||||||||||||
| Adjusted Net Income, ROA and ROE: | ||||||||||||||||||||
| Net income | $ | 170 | $ | 184 | $ | 33 | $ | 698 | $ | 881 | ||||||||||
| Securities repositioning (a) | 19 | — | — | 19 | — | |||||||||||||||
| Net BSBY cessation hedging losses (gains) (b) | (16) | 9 | 88 | 32 | 88 | |||||||||||||||
| FDIC special assessment (c) | (2) | (4) | 109 | 13 | 109 | |||||||||||||||
| Modernization and expense recalibration initiatives (d) | (5) | 2 | 21 | — | 31 | |||||||||||||||
| Income tax impact of above items | 1 | (2) | (52) | (15) | (54) | |||||||||||||||
| Adjusted net income | $ | 167 | $ | 189 | $ | 199 | $ | 747 | $ | 1,055 | ||||||||||
| Average assets | $ | 79,234 | $ | 80,231 | $ | 84,123 | $ | 80,568 | $ | 87,194 | ||||||||||
| Impact of adjusted items to average assets | (2) | — | (8) | (3) | (6) | |||||||||||||||
| Adjusted average assets | $ | 79,232 | $ | 80,231 | $ | 84,115 | $ | 80,565 | $ | 87,188 | ||||||||||
| ROA: | ||||||||||||||||||||
| Reported | 0.85 | % | 0.92 | % | 0.15 | % | 0.87 | % | 1.01 | % | ||||||||||
| Adjusted | 0.84 | 0.94 | 0.94 | 0.93 | 1.21 | |||||||||||||||
| Average common shareholder’s equity | $ | 6,345 | $ | 6,546 | $ | 4,947 | $ | 6,011 | $ | 5,201 | ||||||||||
| Impact of adjusted items to average common shareholders’ equity | (2) | 1 | 24 | 9 | 18 | |||||||||||||||
| Adjusted average common shareholder’s equity | $ | 6,343 | $ | 6,547 | $ | 4,971 | $ | 6,020 | $ | 5,219 | ||||||||||
| ROE: | ||||||||||||||||||||
| Reported | 10.27 | % | 10.88 | % | 2.17 | % | 11.23 | % | 16.50 | % | ||||||||||
| Adjusted | 10.08 | 11.22 | 15.47 | 12.02 | 19.77 | |||||||||||||||
(a)Securities repositioning relates to losses incurred on the sale of $827 million of Treasury securities that were replaced with higher-yielding Treasury securities with a duration of 1.9 years.
(b)The cessation of BSBY announced in November 2023 resulted in the de-designation of certain interest rate swaps requiring reclassification of amounts recognized in AOCI into earnings. Settlement of interest payments and changes in fair value for each impacted swap were recorded as risk management hedging losses until the swap was re-designated. All impacted swaps were re-designated as of April 1, 2024; therefore, settlement of interest payments for months after re-designation were recorded as net interest income.
(c)Additional FDIC insurance accrual adjustments resulting from the FDIC Board of Directors’ November 2023 approval of a special assessment to recover the loss to the Deposit Insurance Fund following the failures of Silicon Valley Bank and Signature Bank.
(d)Related to certain initiatives to transform the retail banking delivery model, align corporate facilities and optimize technology platforms, as well as calibrate expenses to enhance earnings power while creating capacity for strategic and risk management initiatives.
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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.
| December 31, | September 30, | December 31, | |||||||||
| (in millions, except share data) | 2024 | 2024 | 2023 | ||||||||
| Common Equity Tier 1 Capital (a): | |||||||||||
| Tier 1 capital | $ | 9,061 | $ | 9,077 | $ | 8,808 | |||||
| Less: | |||||||||||
| Fixed-rate reset non-cumulative perpetual preferred stock | 394 | 394 | 394 | ||||||||
| Common equity tier 1 capital | $ | 8,667 | $ | 8,683 | $ | 8,414 | |||||
| Risk-weighted assets | $ | 72,878 | $ | 72,583 | $ | 75,901 | |||||
| Tier 1 capital ratio | 12.43 | % | 12.51 | % | 11.60 | % | |||||
| Common equity tier 1 capital ratio | 11.89 | 11.96 | 11.09 | ||||||||
| Tangible Common Equity: | |||||||||||
| Total shareholders' equity | $ | 6,543 | $ | 7,366 | $ | 6,406 | |||||
| Less: | |||||||||||
| Fixed-rate reset non-cumulative perpetual preferred stock | 394 | 394 | 394 | ||||||||
| Common shareholders' equity | $ | 6,149 | $ | 6,972 | $ | 6,012 | |||||
| Less: | |||||||||||
| Goodwill | 635 | 635 | 635 | ||||||||
| Other intangible assets | 6 | 6 | 8 | ||||||||
| Tangible common equity | $ | 5,508 | $ | 6,331 | $ | 5,369 | |||||
| Total assets | $ | 79,297 | $ | 79,663 | $ | 85,834 | |||||
| Less: | |||||||||||
| Goodwill | 635 | 635 | 635 | ||||||||
| Other intangible assets | 6 | 6 | 8 | ||||||||
| Tangible assets | $ | 78,656 | $ | 79,022 | $ | 85,191 | |||||
| Common equity ratio | 7.75 | % | 8.75 | % | 7.00 | % | |||||
| Tangible common equity ratio | 7.00 | 8.01 | 6.30 | ||||||||
| Tangible Common Equity per Share of Common Stock: | |||||||||||
| Common shareholders' equity | $ | 6,149 | $ | 6,972 | $ | 6,012 | |||||
| Tangible common equity | 5,508 | 6,331 | 5,369 | ||||||||
| Shares of common stock outstanding (in millions) | 131 | 133 | 132 | ||||||||
| Common shareholders' equity per share of common stock | $ | 46.79 | $ | 52.52 | $ | 45.58 | |||||
| Tangible common equity per share of common stock | 41.91 | 47.69 | 40.70 | ||||||||
(a)December 31, 2024 ratios are estimated.
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.
| December 31, | September 30, | December 31, | |||||||||
| (dollar amounts in millions) | 2024 | 2024 | 2023 | ||||||||
| Uninsured Deposits: | |||||||||||
| Total uninsured deposits, as calculated per regulatory guidelines | $ | 33,387 | $ | 31,926 | $ | 31,485 | |||||
| Less: | |||||||||||
| Affiliate deposits | (3,876) | (3,839) | (4,064) | ||||||||
| Total uninsured deposits, excluding affiliate deposits | $ | 29,511 | $ | 28,087 | $ | 27,421 | |||||
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