Comerica (CMA) 8-K Comerica Reports Third Quarter 2004 Earnings

Exhibit 99.1

COMERICA REPORTS THIRD QUARTER 2004 EARNINGS

DETROIT/October 19, 2004— Comerica Incorporated (NYSE: CMA) today reported third quarter 2004 earnings of $196 million, or $1.13 per diluted share, compared to $192 million, or $1.10 per diluted share, for the second quarter 2004 and $157 million, or $0.89 per diluted share, for the third quarter 2003.

(dollar amounts in millions)	3rd Qtr '04			2nd Qtr '04			3rd Qtr '03
Diluted EPS	$	1.13		$	1.10		$	0.89
Net Interest Income	$	451		$	448		$	465
Net Interest Margin		3.86	%		3.77	%		3.70	%
Provision for Loan Losses	$	0		$	20		$	83
Noninterest Income	$	206		$	228		$	221
Noninterest Expenses	$	372		$	372		$	377
Net Income	$	196		$	192		$	157
Return on Equity		15.68	%		15.35	%		12.55	%

“Third quarter results reflect the continuation of solid trends from the second quarter, namely higher net interest income, well controlled expenses and steady improvement in credit costs,” said Ralph W. Babb Jr., chairman and chief executive officer. “Loans remained relatively stable, and we feel we have a strong base from which to grow our portfolio when a more robust business climate takes hold.”

Net Interest Income
Net interest income was $451 million for the third quarter 2004, compared to $448 million for the second quarter 2004 and $465 million for the third quarter 2003. Average earning assets of $46.4 billion for the third quarter 2004 decreased $1.2 billion from the second quarter 2004, or three percent, primarily as a result of declines in average short-term investments ($894 million) and average investment securities available-for-sale ($235 million). Average loans were $40.6 billion for the third quarter 2004, compared to $40.7 billion for the second quarter 2004. Average deposits of $39.7 billion for the third quarter 2004 decreased $1.2 billion, or three percent, from the second quarter 2004. The largest decline was in noninterest-bearing mortgage financing-related title and escrow deposits ($904 million).

The net interest margin increased nine basis points from the second quarter 2004 to 3.86 percent, due to an increasing rate environment and the decrease in short-term liquidity.

Noninterest Income
Noninterest income was $206 million for the third quarter 2004, compared to $228 million for the second quarter 2004 and $221 million for the third quarter 2003. Noninterest income in the third quarter 2004 included $6 million of net securities losses and $3 million of income distributions (net of write-downs) from unconsolidated venture capital and private equity investments. Noninterest income in the second quarter 2004 included net securities gains of $1 million, $5 million of income distributions (net of write-downs) from unconsolidated venture capital and private equity investments and a net gain of $7 million on the sale of a portion of Comerica’s merchant card processing business.

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COMERICA REPORTS THIRD QUARTER 2004 EARNINGS — 2

Noninterest Expenses
Noninterest expenses were $372 million for the third and second quarters of 2004 compared to $377 million for the third quarter 2003. Included in salary and employee benefits expenses in the third quarter 2004 was a $7 million reduction in expense due to employee forfeitures of stock-based compensation and revisions to employee forfeiture assumptions for stock options. Noninterest expenses in the third quarter 2004 included litigation-related costs of $12 million, compared to $1 million for the second quarter 2004. Severance expenses for the third quarter 2004 were $1 million, compared to $4 million for the second quarter 2004. Year-to-date severance expenses were $8 million through September 30, 2004.

Credit Quality

(dollar amounts in millions)	3rd Qtr '04			2nd Qtr '04			3rd Qtr '03
Net Charge-offs	$	33		$	56		$	83
Net Charge-offs/Average Total Loans		0.33	%		0.55	%		0.79	%
Provision for Loan Losses	$	0		$	20		$	83
Nonperforming Assets (NPAs)	$	388		$	430		$	627
NPAs/Total Loans, Other Real Estate & Nonaccrual Debt Securities		0.98	%		1.07	%		1.54	%
Allowance for Loan Losses	$	729		$	762		$	802
Allowance for Loan Losses/Total Loans		1.83	%		1.90	%		1.97	%
Allowance for Credit Losses on Lending-related Commitments*	$	24		$	28		$	29

* Included in “Accrued expenses and other liabilities” on the consolidated balance sheets.

During the third quarter of 2004, $106 million of loans greater than $2 million were transferred to nonaccrual status. Nonperforming assets were $388 million at September 30, 2004, a decrease of $42 million from June 30, 2004.

“We were pleased by the continued improvements in credit metrics in the third quarter, which resulted in a $33 million decline in the allowance for loan losses from the second quarter,” said Babb. “Net charge-offs of $33 million were at the lowest level in more than three years, and nonaccrual and watch list loans continued to decline.”

Balance Sheet and Capital Management
Total assets and common shareholders’ equity were $53.0 billion and $5.0 billion, respectively, at September 30, 2004, compared to $54.5 billion and $4.9 billion, respectively, at June 30, 2004. There were approximately 171 million shares outstanding at September 30, 2004, compared to approximately 172 million shares outstanding at June 30, 2004. In the third quarter of 2004, approximately 1.5 million shares were repurchased in the open market for $89 million. Comerica’s third quarter 2004 estimated tier 1 common, tier 1 and total risk-based capital ratios were 8.16 percent, 8.81 percent and 13.06 percent, respectively.

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COMERICA REPORTS THIRD QUARTER 2004 EARNINGS — 3

Conference Call and Webcast
Comerica will host a conference call to review third quarter 2004 financial results at 8 a.m. ET Tuesday, October 19, 2004. Interested parties may access the conference call by calling (706) 679-5261 (event ID No. 273710). The call and supplemental financial information can be accessed via a Webcast at www.comerica.com. A replay of the conference call will be available approximately two hours following the call through Friday, November 19, 2004. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 273710). A replay of the Webcast can also be accessed at www.comerica.com.

Comerica Incorporated is a financial services company headquartered in Detroit, strategically aligned into three major lines of business: the Business Bank, Small Business and Personal Financial Services, and Wealth and Institutional Management. Comerica focuses on relationships and helping businesses and people to be successful. To receive e-mail alerts of breaking Comerica news, go to www.comerica.com/newsalerts.

Forward-looking Statement
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 “expect,” “believe,” “anticipate,” “intend,” “estimate,” “project,” “plan,” “outlook,” “may,” “could,” “would” and similar expressions 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, 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, the Company’s actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in the pace of an economic recovery, implementation of Comerica’s strategies and business models, management’s ability to maintain and expand customer relationships, changes in the accounting treatment of any particular item, the impact of regulatory examinations, changes in the businesses or industries in which Comerica has a concentration of loans, the anticipated performance of any new banking branches, the entry of new competitors in Comerica’s markets, changes in the level of fee income, changes in applicable laws and regulations, including those concerning taxes, banking, securities and insurance, changes in trade, monetary and fiscal policies, including the interest rate policies of the Board of Governors of the Federal Reserve System, fluctuations in inflation or interest rates, changes in general economic conditions and related credit and market conditions and adverse conditions in the stock market. Comerica cautions that the foregoing list of factors is not exclusive. 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:
Sharon R. McMurray	Helen L. Arsenault
(313) 222-4881	(313) 222-2840
Wayne J. Mielke	Judith M. Chavis
(313) 222-4732	(313) 222-6317

CONSOLIDATED FINANCIAL HIGHLIGHTS

Comerica Incorporated and Subsidiaries

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
(in millions, except per share data)	2004			2004			2003			2004			2003
PER SHARE AND COMMON STOCK DATA
Diluted net income	$	1.13		$	1.10		$	0.89		$	3.15		$	2.86
Cash dividends declared		0.52			0.52			0.50			1.56			1.50
Common shareholders’ equity (at period end)		29.52			28.75			29.05
Average diluted shares (in thousands)		172,864			174,248			176,290			174,346			176,089
KEY RATIOS
Return on average common shareholders’ equity		15.68	%		15.35	%		12.55	%		14.57	%		13.39	%
Return on average assets		1.55			1.49			1.16			1.44			1.25
Average common shareholders’ equity as a percentage of average assets		9.91			9.70			9.27			9.88			9.36
Tier 1 common capital ratio *		8.16			8.00			7.92
Tier 1 risk-based capital ratio *		8.81			8.64			8.58
Total risk-based capital ratio *		13.06			12.91			12.64
Leverage ratio *		10.33			9.97			9.54
AVERAGE BALANCES
Commercial loans (1)	$	22,096		$	22,178		$	23,314		$	21,997		$	24,295
Real estate construction loans		3,273			3,253			3,500			3,293			3,554
Commercial mortgage loans		7,951			8,050			7,617			7,989			7,452
Residential mortgage loans (1)		1,239			1,209			1,188			1,225			1,178
Consumer loans (1)		2,671			2,653			2,461			2,650			2,452
Lease financing		1,266			1,271			1,273			1,276			1,280
International loans		2,149			2,115			2,528			2,171			2,660
Total loans	$	40,645		$	40,729		$	41,881		$	40,601		$	42,871
Earning assets		46,426			47,639			49,846			46,960			49,299
Total assets		50,348			51,593			53,921			50,891			53,517
Interest-bearing deposits		25,722			26,183			27,409			26,173			27,771
Total interest-bearing liabilities		30,435			31,011			33,029			31,055			33,569
Noninterest-bearing deposits		14,012			14,730			15,079			13,910			14,150
Common shareholders’ equity		4,990			5,003			5,000			5,029			5,011
NET INTEREST INCOME
Net interest income (fully taxable equivalent basis)	$	452		$	448		$	466		$	1,346		$	1,471
Fully taxable equivalent adjustment		1			—		��	1			2			2
Net interest margin		3.86	%		3.77	%		3.70	%		3.82	%		3.99	%
CREDIT QUALITY
Nonaccrual loans	$	361		$	404		$	598
Other real estate		27			26			25
Nonaccrual debt securities		—			—			4
Total nonperforming assets		388			430			627
Loans 90 days past due and still accruing		20			25			56
Gross charge-offs		53			76			94		$	213		$	311
Recoveries		20			20			11			54			22
Net charge-offs		33			56			83			159			289
Allowance for loan losses as a percentage of total loans		1.83	%		1.90	%		1.97	%
Net loans charged off as a percentage of average total loans		0.33			0.55			0.79			0.52	%		0.90	%
Nonperforming assets as a percentage of total loans, other real estate and nonaccrual debt securities		0.98			1.07			1.54
Allowance for loan losses as a percentage of total nonperforming assets		188			177			128
ADDITIONAL DATA
Goodwill	$	247		$	247		$	247
Core deposit intangible		—			—			2
Other intangibles		1			1			1
Loan servicing rights		20			19			16
Deferred mutual fund distribution costs		9			10			14
Amortization of intangibles		—			1			—		$	1		$	1

(1) Loans to individuals associated with commercial lending relationships were reclassified from commercial loans to residential mortgage loans and consumer loans in the second quarter of 2004. Prior periods have been reclassified.

* September 30, 2004 ratios are estimated

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CONSOLIDATED BALANCE SHEETS

Comerica Incorporated and Subsidiaries

	September 30,			June 30,			December 31,			September 30,
(in millions , except share data)	2004			2004			2003			2003
ASSETS
Cash and due from banks	$	1,560		$	1,865		$	1,527		$	1,955
Short-term investments		5,055			5,977			4,013			4,805
Investment securities available-for-sale		4,198			4,332			4,489			5,086
Commercial loans		21,146			21,458			21,579			22,030
Real estate construction loans		3,276			3,282			3,397			3,496
Commercial mortgage loans		7,931			8,080			7,878			7,631
Residential mortgage loans		1,263			1,211			1,228			1,210
Consumer loans		2,722			2,672			2,610			2,501
Lease financing		1,260			1,266			1,301			1,289
International loans		2,117			2,130			2,309			2,478
Total loans		39,715			40,099			40,302			40,635
Less allowance for loan losses		(729	)		(762	)		(803	)		(802	)
Net loans		38,986			39,337			39,499			39,833
Premises and equipment		399			389			374			368
Customers’ liability on acceptances outstanding		41			44			27			22
Accrued income and other assets		2,720			2,599			2,663			2,726
Total assets	$	52,959		$	54,543		$	52,592		$	54,795
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits	$	16,811		$	17,568		$	14,104		$	16,198
Interest-bearing deposits		25,424			26,343			27,359			27,498
Total deposits		42,235			43,911			41,463			43,696
Short-term borrowings		225			210			262			296
Acceptances outstanding		41			44			27			22
Accrued expenses and other liabilities		1,021			847			929			870
Medium- and long-term debt		4,401			4,597			4,801			4,818
Total liabilities		47,923			49,609			47,482			49,702
Common stock — $5 par value:
Authorized - 325,000,000 shares
Issued - 178,735,252 shares at 9/30/04, 6/30/04, 12/31/03 and 9/30/03		894			894			894			894
Capital surplus		408			398			384			378
Accumulated other comprehensive income (loss)		(24	)		(82	)		74			111
Retained earnings		4,222			4,125			3,973			3,909
Less cost of common stock in treasury - 8,169,292 shares at 9/30/04, 7,124,990 shares at 6/30/04, 3,735,163 shares at 12/31/03 and 3,421,888 shares at 9/30/03		(464	)		(401	)		(215	)		(199	)
Total shareholders’ equity		5,036			4,934			5,110			5,093
Total liabilities and shareholders’ equity	$	52,959		$	54,543		$	52,592		$	54,795

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CONSOLIDATED STATEMENTS OF INCOME

Comerica Incorporated and Subsidiaries

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in millions, except per share data)	2004			2003		2004		2003
INTEREST INCOME
Interest and fees on loans	$	514		$	530	$	1,510	$	1,700
Interest on investment securities		36			37		111		124
Interest on short-term investments		8			12		25		28
Total interest income		558			579		1,646		1,852
INTEREST EXPENSE
Interest on deposits		79			86		224		293
Interest on short-term borrowings		1			1		2		6
Interest on medium- and long-term debt		27			27		76		84
Total interest expense		107			114		302		383
Net interest income		451			465		1,344		1,469
Provision for loan losses		—			83		85		300
Net interest income after provision for loan losses		451			382		1,259		1,169
NONINTEREST INCOME
Service charges on deposit accounts		57			60		178		179
Fiduciary income		43			42		128		125
Commercial lending fees		14			16		41		46
Letter of credit fees		17			17		49		49
Foreign exchange income		9			11		28		30
Brokerage fees		9			8		27		24
Investment advisory revenue, net		8			8		26		22
Bank-owned life insurance		10			12		28		33
Equity in earnings of unconsolidated subsidiaries		3			2		11		5
Warrant income		1			1		6		1
Net securities gains (losses)		(6	)		4		—		46
Net gain on sales of businesses		—			—		7		—
Other noninterest income		41			40		125		107
Total noninterest income		206			221		654		667
NONINTEREST EXPENSES
Salaries and employee benefits		225			229		686		670
Net occupancy expense		32			34		93		96
Equipment expense		14			16		43		46
Outside processing fee expense		16			18		51		53
Software expense		11			10		31		28
Customer services		8			6		17		18
Litigation and operational losses		16			6		27		14
Other noninterest expenses		50			58		165		179
Total noninterest expenses		372			377		1,113		1,104
Income before income taxes		285			226		800		732
Provision for income taxes		89			69		250		229
NET INCOME	$	196		$	157	$	550	$	503
Net income applicable to common stock	$	196		$	157	$	550	$	503
Basic net income per common share	$	1.15		$	0.90	$	3.19	$	2.88
Diluted net income per common share		1.13			0.89		3.15		2.86
Cash dividends declared on common stock		88			88		268		262
Dividends per common share		0.52			0.50		1.56		1.50

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CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
 
Comerica Incorporated and Subsidiaries

												Third Quarter 2004 Compared To:
	Third Quarter			Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Second Quarter 2004							Third Quarter 2003
(in millions, except per share data)	2004			2004		2004		2003		2003		Amount				Percent			Amount			Percent
INTEREST INCOME
Interest and fees on loans	$	514		$	500	$	496	$	511	$	530	$	14				2.9	%	$	(16	)		(3.0)	%
Interest on investment securities		36			35		40		41		37		1				N/M			(1	)		(2.6	)
Interest on short-term investments		8			10		7		8		12		(2	)			(7.9	)		(4	)		(28.2	)
Total interest income		558			545		543		560		579		13				2.5			(21	)		(3.5	)
INTEREST EXPENSE
Interest on deposits		79			72		73		77		86		7				10.5			(7	)		(7.4	)
Interest on short-term borrowings		1			—		1		1		1		1				40.5			—			(28.1	)
Interest on medium- and long-term debt		27			25		24		25		27		2				11.6			—			1.8
Total interest expense		107			97		98		103		114		10				11.0			(7	)		(5.4	)
Net interest income		451			448		445		457		465		3				0.7			(14	)		(3.0	)
Provision for loan losses		—			20		65		77		83		(20	)			(100.0	)		(83	)		(100.0	)
Net interest income after provision for loan losses		451			428		380		380		382		23				5.4			69			18.1
NONINTEREST INCOME
Service charges on deposit accounts		57			59		62		59		60		(2	)			(4.6	)		(3	)		(5.5	)
Fiduciary income		43			41		44		44		42		2				2.6			1			0.2
Commercial lending fees		14			13		14		17		16		1				14.6			(2	)		(6.5	)
Letter of credit fees		17			17		15		16		17		—				0.5			—			(0.4	)
Foreign exchange income		9			10		9		6		11		(1	)			(21.0	)		(2	)		(24.9	)
Brokerage fees		9			8		10		10		8		1				N/M			1			5.0
Investment advisory revenue, net		8			9		9		8		8		(1	)			(2.4	)		—			4.6
Bank-owned life insurance		10			9		9		9		12		1				12.5			(2	)		(14.8	)
Equity in earnings of unconsolidated subsidiaries		3			5		3		1		2		(2	)			(38.5	)		1			38.6
Warrant income		1			4		1		3		1		(3	)			(62.6	)		—			132.1
Net securities gains (losses)		(6	)		1		5		4		4		(7	)			N/M			(10	)		N/M
Net gain on sales of businesses		—			7		—		—		—		(7	)			N/M			—			N/M
Other noninterest income		41			45		39		43		40		(4	)			(8.1	)		1			4.6
Total noninterest income		206			228		220		220		221		(22	)			(9.5	)		(15	)		(6.6	)
NONINTEREST EXPENSES
Salaries and employee benefits		225			235		226		227		229		(10	)			(4.2	)		(4	)		(1.8	)
Net occupancy expense		32			31		30		32		34		1				3.4			(2	)		(6.2	)
Equipment expense		14			14		15		15		16		—				(3.9	)		(2	)		(13.1	)
Outside processing fee expense		16			18		17		18		18		(2	)			(8.5	)		(2	)		(11.0	)
Software expense		11			9		11		9		10		2				8.2			1			8.7
Customer services		8			7		2		7		6		1				30.9			2			39.8
Litigation and operational losses		16			3		8		4		6		13				474.6			10			175.5
Other noninterest expenses		50			55		60		67		58		(5	)			(10.2	)		(8	)		(14.3	)
Total noninterest expenses		372			372		369		379		377		—				(0.1	)		(5	)		(1.3	)
Income before income taxes		285			284		231		221		226		1				0.6			59			26.3
Provision for income taxes		89			92		69		63		69		(3	)			(2.2	)		20			30.0
NET INCOME	$	196		$	192	$	162	$	158	$	157	$	4				1.9	%	$	39			24.7	%
Net income applicable to common stock	$	196		$	192	$	162	$	158	$	157	$	4		��		1.9	%	$	39			24.7	%
Basic net income per common share	$	1.15		$	1.11	$	0.93	$	0.90	$	0.90	$	0.04				3.6	%	$	0.25			27.8	%
Diluted net income per common share		1.13			1.10		0.92		0.89		0.89		0.03				2.7			0.24			27.0
Cash dividends declared on common stock		88			90		90		88		88		(2	)			(0.9	)		—			1.4
Dividends per common share		0.52			0.52		0.52		0.50		0.50		—				—			0.02			4.0

N/M - Not meaningful

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ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

Comerica Incorporated and Subsidiaries

	2004									2003
(in millions)	3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr
Balance at beginning of period	$	762		$	798		$	803		$	802		$	802
Loans charged-off:
Commercial		41			57			64			74			70
Real estate construction:
Real estate construction business line		1			1			—			1			—
Other		—			—			—			—			—
Total real estate construction		1			1			—			1			—
Commercial mortgage:
Commercial real estate business line		—			—			—			—			—
Other		7			6			6			6			4
Total commercial mortgage		7			6			6			6			4
Residential mortgage		1			—			—			—			—
Consumer		2			4			3			3			3
Lease financing		—			1			8			—			—
International		1			7			3			13			17
Total loans charged-off		53			76			84			97			94
Recoveries on loans previously charged-off:
Commercial		13			15			10			16			4
Real estate construction		—			—			—			—			—
Commercial mortgage		1			1			—			—			1
Residential mortgage		—			—			—			—			—
Consumer		1			1			—			—			2
Lease financing		—			—			1			—			—
International		5			3			3			5			4
Total recoveries		20			20			14			21			11
Net loans charged-off		33			56			70			76			83
Provision for loan losses		—			20			65			77			83
Balance at end of period	$	729		$	762		$	798		$	803		$	802
Allowance for loan losses as a percentage of total loans		1.83	%		1.90	%		1.99	%		1.99	%		1.97	%
Net loans charged-off as a percentage of average total loans		0.33			0.55			0.69			0.75			0.79
Allowance for credit losses on lending-related commitments*	$	24		$	28		$	32		$	33		$	29

* Included in “Accrued expenses and other liabilities” on the consolidated balance sheets.

-8-

NONPERFORMING ASSETS
 
Comerica Incorporated and Subsidiaries

	2004									2003
(in millions)	3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Commercial	$	181		$	229		$	282		$	295		$	382
Real estate construction:
Real estate construction business line		28			20			19			21			28
Other		3			3			5			3			4
Total real estate construction		31			23			24			24			32
Commercial mortgage:
Commercial real estate business line		10			12			3			3			3
Other		70			80			90			84			65
Total commercial mortgage		80			92			93			87			68
Residential mortgage		1			3			4			2			1
Consumer		2			2			5			7			8
Lease financing		19			13			13			24			25
International		47			42			68			68			82
Total nonaccrual loans		361			404			489			507			598
Reduced-rate loans		—			—			—			—			—
Total nonperforming loans		361			404			489			507			598
Other real estate		27			26			32			30			25
Nonaccrual debt securities		—			—			1			1			4
Total nonperforming assets	$	388		$	430		$	522		$	538		$	627
Nonperforming loans as a percentage of total loans		0.91	%		1.01	%		1.22	%		1.26	%		1.47	%
Nonperforming assets as a percentage of total loans, other real estate and nonaccrual debt securities		0.98			1.07			1.30			1.33			1.54
Allowance for loan losses as a percentage of total nonperforming assets		188			177			153			149			128
Loans past due 90 days or more and still accruing	$	20		$	25		$	35		$	32		$	56
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of period	$	404		$	489		$	507		$	598		$	559
Loans transferred to nonaccrual (1)		106			63			92			114			211
Nonaccrual business loan gross charge-offs (2)		(48	)		(71	)		(80	)		(93	)		(91	)
Loans transferred to accrual status (1)		—			—			—			—			—
Nonaccrual business loans sold (3)		(16	)		(33	)		(14	)		(48	)		(37	)
Payments/Other (4)		(85	)		(44	)		(16	)		(64	)		(44	)
Nonaccrual loans at end of period	$	361		$	404		$	489		$	507		$	598
(1) Based on an analysis of nonaccrual loans with book balances greater than $2 million. (2) Analysis of gross loan charge-offs:
Nonaccrual business loans	$	48		$	71		$	80		$	93		$	91
Performing watch list loans		2			1			1			1			—
Consumer loans		3			4			3			3			3
Total gross loan charge-offs	$	53		$	76		$	84		$	97		$	94
(3) Analysis of loans sold:
Nonaccrual business loans	$	16		$	33		$	14		$	48		$	37
Performing watch list loans		30			14			18			15			—
Total loans sold	$	46		$	47		$	32		$	63		$	37

(4) Net change related to nonaccrual loans with balances less than $2 million, other than business loan gross charge-offs and nonaccrual loans sold, are included in Payments/Other.

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ANALYSIS OF NET INTEREST INCOME (FTE)

Comerica Incorporated and Subsidiaries

	Three Months Ended
	September 30, 2004								June 30, 2004								September 30, 2003
	Average					Average			Average					Average			Average					Average
(dollar amounts in millions)	Balance			Interest		Rate			Balance			Interest		Rate			Balance			Interest		Rate
Commercial loans	$	22,096		$	234		4.21	%	$	22,178		$	217		3.93	%	$	23,314		$	237		4.02	%
Real estate construction loans		3,273			46		5.58			3,253			42		5.13			3,500			44		4.94
Commercial mortgage loans		7,951			104		5.22			8,050			100		4.99			7,617			101		5.23
Residential mortgage loans		1,239			18		5.63			1,209			17		5.73			1,188			17		5.92
Consumer loans		2,671			31		4.68			2,653			30		4.57			2,461			30		4.94
Lease financing		1,266			11		3.46			1,271			14		4.29			1,273			15		4.63
International loans		2,149			26		4.87			2,115			23		4.42			2,528			25		3.95
Business loan swap income		—			45		—			—			57		—			—			62		—
Total loans		40,645			515		5.04			40,729			500		4.93			41,881			531		5.03
Investment securities available-for-sale (1)		4,225			36		3.31			4,460			35		3.17			4,817			37		3.00
Short-term investments		1,556			8		2.17			2,450			10		1.51			3,148			12		1.49
Total earning assets		46,426			559		4.78			47,639			545		4.59			49,846			580		4.61
Cash and due from banks		1,652								1,727								1,872
Allowance for loan losses		(774	)							(812	)							(831	)
Accrued income and other assets		3,044								3,039								3,034
Total assets	$	50,348							$	51,593							$	53,921
Money market and NOW deposits	$	17,526			47		1.06		$	17,886			43		0.95		$	17,665			49		1.09
Savings deposits		1,652			1		0.36			1,651			1		0.38			1,566			2		0.43
Certificates of deposit		5,826			26		1.79			5,991			24		1.61			7,607			31		1.63
Foreign office time deposits		718			5		2.76			655			4		2.20			571			4		2.81
Total interest-bearing deposits		25,722			79		1.22			26,183			72		1.10			27,409			86		1.24
Short-term borrowings		251			1		1.36			262			—		0.94			447			1		1.06
Medium- and long-term debt		4,462			27		2.45			4,566			25		2.17			5,173			27		2.07
Total interest-bearing sources		30,435			107		1.40			31,011			97		1.26			33,029			114		1.37
Noninterest-bearing deposits		14,012								14,730								15,079
Accrued expenses and other liabilities		911								849								813
Common shareholders’ equity		4,990								5,003								5,000
Total liabilities and shareholders' equity	$	50,348							$	51,593							$	53,921
Net interest income/rate spread (FTE)				$	452		3.38					$	448		3.33					$	466		3.24
FTE adjustment				$	1							$	—							$	1
Impact of net noninterest-bearing sources of funds							0.48								0.44								0.46
Net interest margin (as a percentage of average earning assets) (FTE)							3.86	%							3.77	%							3.70	%

(1) The average rate for investment securities available-for-sale was computed using average historical cost.

-10-

ANALYSIS OF NET INTEREST INCOME (FTE)

Comerica Incorporated and Subsidiaries

	Nine Months Ended
	September 30, 2004								September 30, 2003
	Average					Average			Average					Average
(dollar amounts in millions)	Balance			Interest		Rate			Balance			Interest		Rate
Commercial loans	$	21,997		$	669		4.06	%	$	24,295		$	751		4.13	%
Real estate construction loans		3,293			129		5.24			3,554			134		5.05
Commercial mortgage loans		7,989			304		5.08			7,452			303		5.44
Residential mortgage loans		1,225			52		5.71			1,178			55		6.21
Consumer loans		2,650			92		4.62			2,452			95		5.16
Lease financing		1,276			39		4.05			1,280			44		4.59
International loans		2,171			73		4.46			2,660			89		4.47
Business loan swap income		—			154		—			—			231		—
Total loans		40,601			1,512		4.97			42,871			1,702		5.31
Investment securities available-for-sale (1)		4,411			111		3.32			4,440			124		3.72
Short-term investments		1,948			25		1.73			1,988			28		1.88
Total earning assets		46,960			1,648		4.68			49,299			1,854		5.03
Cash and due from banks		1,681								1,847
Allowance for loan losses		(805	)							(831	)
Accrued income and other assets		3,055								3,202
Total assets	$	50,891							$	53,517
Money market and NOW deposits	$	17,772			131		0.99		$	17,146			160		1.25
Savings deposits		1,636			5		0.38			1,565			6		0.52
Certificates of deposit		6,110			76		1.66			8,421			111		1.76
Foreign office time deposits		655			12		2.47			639			16		3.30
Total interest-bearing deposits		26,173			224		1.14			27,771			293		1.41
Short-term borrowings		275			2		1.05			622			6		1.24
Medium- and long-term debt		4,607			76		2.22			5,176			84		2.17
Total interest-bearing sources		31,055			302		1.30			33,569			383		1.53
Noninterest-bearing deposits		13,910								14,150
Accrued expenses and other liabilities		897								787
Common shareholders’ equity		5,029								5,011
Total liabilities and shareholders’ equity	$	50,891							$	53,517
Net interest income/rate spread (FTE)				$	1,346		3.38					$	1,471		3.50
FTE adjustment				$	2							$	2
Impact of net noninterest-bearing sources of funds							0.44								0.49
Net interest margin (as a percentage of average earning assets) (FTE)							3.82	%							3.99	%

(1) The average rate for investment securities available-for-sale was computed using average historical cost.

-11-

CONSOLIDATED STATISTICAL DATA
 
Comerica Incorporated and Subsidiaries

	September 30,			June 30,			March 31,			December 31,			September 30,
(in millions, except per share data)	2004			2004			2004			2003			2003
Commercial loans (1):
Floor plan	$	2,270		$	2,802		$	2,797		$	2,731		$	2,053
Other		18,876			18,656			18,704			18,848			19,977
Total commercial loans		21,146			21,458			21,501			21,579			22,030
Real estate construction loans:
Real estate construction business line		2,641			2,661			2,628			2,754			2,866
Other		635			621			615			643			630
Total real estate construction loans		3,276			3,282			3,243			3,397			3,496
Commercial mortgage loans:
Commercial real estate business line		1,498			1,656			1,718			1,655			1,574
Other		6,433			6,424			6,311			6,223			6,057
Total commercial mortgage loans		7,931			8,080			8,029			7,878			7,631
Residential mortgage loans (1)		1,263			1,211			1,210			1,228			1,210
Consumer loans (1):
Home equity		1,815			1,788			1,657			1,647			1,565
Other consumer		907			884			969			963			936
Total consumer loans		2,722			2,672			2,626			2,610			2,501
Lease financing		1,260			1,266			1,268			1,301			1,289
International loans		2,117			2,130			2,135			2,309			2,478
Total loans	$	39,715		$	40,099		$	40,012		$	40,302		$	40,635
(1) Loans to individuals associated with commercial lending relationships were reclassified from commercial loans (other) to residential mortgage loans and consumer loans (both home equity and other consumer) in the second quarter of 2004. Prior periods have been reclassified.
Goodwill	$	247		$	247		$	247		$	247		$	247
Core deposit intangible		—			—			1			1			2
Other intangible assets		1			1			1			1			1
Loan servicing rights		20			19			18			17			16
Deferred mutual fund distribution costs		9			10			11			12			14
Amortization of intangibles (quarterly)		—			1			—			1			—
Tier 1 common capital ratio*		8.16	%		8.00	%		8.00	%		8.04	%		7.92	%
Tier 1 risk-based capital ratio*		8.81			8.64			8.64			8.72			8.58
Total risk-based capital ratio *		13.06			12.91			12.60			12.71			12.64
Leverage ratio*		10.33			9.97			10.15			10.13			9.54
Book value per share	$	29.52		$	28.75		$	29.41		$	29.20		$	29.05
Market value per share for the quarter:
High	$	61.48		$	56.99		$	59.23		$	56.34		$	49.75
Low		53.00			50.45			52.30			46.38			45.28
Close		59.35			54.88			54.32			56.06			46.60
Quarterly ratios:
Return on average common shareholders’ equity		15.68	%		15.35	%		12.71	%		12.33	%		12.55	%
Return on average assets		1.55			1.49			1.28			1.22			1.16
Efficiency ratio		56.08			55.08			55.84			56.34			55.28
Number of banking offices		364			361			362			360			358
Number of employees — full time equivalent		10,919			11,111			11,237			11,282			11,302

* September 30, 2004 ratios are estimated

-12-

PARENT COMPANY ONLY BALANCE SHEETS

Comerica Incorporated

	September 30,			December 31,			September 30,
(in millions, except share data)	2004			2003			2003
ASSETS
Cash and due from banks	$	1		$	—		$	—
Short-term investments with subsidiary bank		215			296			199
Investment in subsidiaries, principally banks		5,611			5,599			5,659
Premises and equipment		3			3			3
Other assets		294			262			294
Total assets	$	6,124		$	6,160		$	6,155
LIABILITIES AND SHAREHOLDERS’ EQUITY
Long-term debt	$	827		$	826		$	836
Other liabilities		261			224			226
Total liabilities		1,088			1,050			1,062
Common stock — $5 par value:
Authorized — 325,000,000 shares
Issued — 178,735,252 shares at 9/30/04, 12/31/03 and 9/30/03		894			894			894
Capital surplus		408			384			378
Accumulated other comprehensive income		(24	)		74			111
Retained earnings		4,222			3,973			3,909
Less cost of common stock in treasury — 8,169,292 shares at 9/30/04, 3,735,163 shares at 12/31/03 and 3,421,888 shares at 9/30/03		(464	)		(215	)		(199	)
Total shareholders’ equity		5,036			5,110			5,093
Total liabilities and shareholders’ equity	$	6,124		$	6,160		$	6,155

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Comerica Incorporated and Subsidiaries

						Accumulated
						Other									Total
	Common		Capital			Comprehensive			Retained			Treasury			Shareholders'
(in millions, except share data)	Stock		Surplus			Income (Loss)			Earnings			Stock			Equity
BALANCE AT JANUARY 1, 2003	$	894	$	363		$	237		$	3,684		$	(231	)	$	4,947
Net income		—		—			—			503			—			503
Other comprehensive loss, net of tax		—		—			(126	)		—			—			(126	)
Total comprehensive income		—		—			—			—			—			377
Cash dividends declared on common stock ($1.50 per share)		—		—			—			(262	)		—			(262	)
Net issuance of common stock under employee stock plans		—		(5	)		—			(16	)		32			11
Recognition of stock-based compensation expense		—		20			—			—			—			20
BALANCE AT SEPTEMBER 30, 2003	$	894	$	378		$	111		$	3,909		$	(199	)	$	5,093
BALANCE AT JANUARY 1, 2004	$	894	$	384		$	74		$	3,973		$	(215	)	$	5,110
Net income		—		—			—			550			—			550
Other comprehensive loss, net of tax		—		—			(98	)		—			—			(98	)
Total comprehensive income		—		—			—			—			—			452
Cash dividends declared on common stock ($1.56 per share)		—		—			—			(268	)		—			(268	)
Purchase of 5,977,723 shares of common stock		—		—			—			—			(336	)		(336	)
Net issuance of common stock under employee stock plans		—		(2	)		—			(33	)		87			52
Recognition of stock-based compensation expense		—		26			—			—			—			26
BALANCE AT SEPTEMBER 30, 2004	$	894	$	408		$	(24	)	$	4,222		$	(464	)	$	5,036

-13-