Exhibit 99.1
COMERICA REPORTS FIRST QUARTER 2005 EARNINGS
DETROIT/April 20, 2005— Comerica Incorporated (NYSE: CMA) today reported first quarter 2005 earnings of $199 million, or $1.16 per diluted share, compared to $207 million, or $1.21 per diluted share, for the fourth quarter 2004 and $162 million, or $0.92 per diluted share, for the first quarter 2004.
| | | | | | | | | | | | | |
| (dollar amounts in millions) | | 1st Qtr ‘05 | | | 4thQtr ‘04 | | | 1stQtr ‘04 | |
| Diluted EPS | | $ | 1.16 | | | $ | 1.21 | | | $ | 0.92 | |
| Net Interest Income | | $ | 460 | | | $ | 466 | | | $ | 445 | |
| Net Interest Margin | | | 4.00 | % | | | 3.96 | % | | | 3.83 | % |
| Provision for Loan Losses | | $ | 1 | | | $ | (21 | ) | | $ | 65 | |
| Noninterest Income | | $ | 210 | | | $ | 203 | | | $ | 220 | |
| Noninterest Expenses | | $ | 374 | | | $ | 380 | | | $ | 369 | |
| Net Income | | $ | 199 | | | $ | 207 | | | $ | 162 | |
| Return on Equity | | | 15.73 | % | | | 16.39 | % | | | 12.71 | % |
“Our first quarter financial results reflect solid loan growth across businesses and geographies, with an increase in average loans of $1 billion, or nearly 10 percent on an annualized basis, compared to the fourth quarter 2004,” said Ralph W. Babb Jr., chairman and chief executive officer. “The results also underscore our focus on credit quality, our ability to effectively manage interest rate risk and our expense discipline.”
Net Interest Income
Net interest income was $460 million for the first quarter 2005, compared to $466 million for the fourth quarter 2004 and $445 million for the first quarter 2004. The $6 million decline in net interest income from the fourth quarter 2004 was impacted by two less days in the first quarter 2005. Average earning assets of $46.6 billion for the first quarter 2005 decreased $373 million from the fourth quarter 2004, or one percent, primarily as a result of a $1.1 billion decrease in short-term investments, partially offset by a $1 billion increase in average loans to $42.2 billion for the first quarter 2005. Average deposits of $39.8 billion for the first quarter 2005 decreased $545 million, or one percent, from the fourth quarter 2004.
The net interest margin increased four basis points from the fourth quarter 2004 to 4.00 percent in the first quarter 2005, due primarily to a greater contribution from noninterest-bearing deposits and the effects of the change in earning asset mix from short-term investments to loans.
Noninterest Income
Noninterest income was $210 million for the first quarter 2005, compared to $203 million for the fourth quarter 2004 and $220 million for the first quarter 2004. Included in other noninterest income in the first quarter 2005 were risk management hedge ineffectiveness losses of $5 million, compared to $3 million of losses in the fourth quarter 2004.
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COMERICA REPORTS FIRST QUARTER 2005 EARNINGS - 2
Noninterest Expenses
Noninterest expenses were $374 million for the first quarter 2005, compared to $380 million for the fourth quarter 2004 and $369 million for the first quarter 2004. Salaries and employee benefits expense increased $3 million in the first quarter 2005 compared to the fourth quarter 2004, primarily due to an increase in pension and other employee benefits, partially offset by a decrease in severance expense. Included in first quarter 2005 noninterest expenses were litigation-related costs of $2 million, compared to a $5 million net credit to litigation-related costs in the fourth quarter 2004. Other noninterest expenses in the first quarter 2005 included interest expense on tax liabilities of $2 million, compared to $8 million for the fourth quarter 2004. Contributions expense, also included in other noninterest expenses, decreased $7 million in the first quarter 2005 compared to the fourth quarter 2004, as a result of high levels of contributions in the fourth quarter 2004, mostly designated for the Comerica Charitable Foundation.
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| Credit Quality | | | | | | | | | |
| (dollar amounts in millions) | | 1stQtr ‘05 | | | 4th Qtr ‘04 | | | 1stQtr ‘04 | |
| Net Charge-offs | | $ | 38 | | | $ | 35 | | | $ | 70 | |
| Net Charge-offs/Average Total Loans | | | 0.36 | % | | | 0.34 | % | | | 0.69 | % |
| Provision for Loan Losses | | $ | 1 | | | $ | (21 | ) | | $ | 65 | |
| Nonperforming Assets (NPAs) | | $ | 311 | | | $ | 339 | | | $ | 522 | |
| NPAs/Total Loans, Other Real Estate & Nonaccrual Debt Securities | | | 0.75 | % | | | 0.83 | % | | | 1.30 | % |
| Allowance for Loan Losses | | $ | 636 | | | $ | 673 | | | $ | 798 | |
| Allowance for Loan Losses/Total Loans | | | 1.52 | % | | | 1.65 | % | | | 1.99 | % |
| Allowance for Credit Losses on Lending-related Commitments* | | $ | 18 | | | $ | 21 | | | $ | 32 | |
| * | Included in “Accrued expenses and other liabilities” on the consolidated balance sheets. |
During the first quarter of 2005, $66 million of loans greater than $2 million were transferred to nonaccrual status, a decrease of $5 million from the fourth quarter of 2004. Nonperforming assets were $311 million at March 31, 2005, a decrease of $28 million from December 31, 2004.
Balance Sheet and Capital Management
Total assets and common shareholders’ equity were $53.5 billion and $5.0 billion, respectively, at March 31, 2005, compared to $51.8 billion and $5.1 billion, respectively, at December 31, 2004. There were approximately 169 million shares outstanding at March 31, 2005, compared to approximately 170 million shares outstanding at December 31, 2004. In the first quarter of 2005, approximately 2.1 million shares were repurchased in the open market for $118 million. Comerica’s first quarter 2005 estimated tier 1 common, tier 1 and total risk-based capital ratios were 8.03 percent, 8.65 percent and 12.45 percent, respectively.
Business Segments
Comerica’s operations are strategically aligned into three major business segments: the Business Bank, Small Business & Personal Financial Services, and Wealth & Institutional Management. The Finance Division also is included as a segment. The financial results below are based on the internal business unit structure of the Corporation and are presented on a fully taxable equivalent (FTE) basis.
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COMERICA REPORTS FIRST QUARTER 2005 EARNINGS — 3
The following table presents net income (loss) by business segment.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollar amounts in millions) | | 1st Qtr ‘05 | | | 4th Qtr ‘04 | | | 1st Qtr ‘04 | |
| |
| Business Bank | | $ | 175 | | | | 72 | % | | $ | 160 | | | | 75 | % | | $ | 162 | | | | 73 | % |
| Small Business & Personal Financial Services | | | 44 | | | | 18 | | | | 40 | | | | 19 | | | | 42 | | | | 19 | |
| Wealth & Institutional Management | | | 25 | | | | 10 | | | | 12 | | | | 6 | | | | 19 | | | | 8 | |
| |
| | | | 244 | | | | 100 | % | | | 212 | | | | 100 | % | | | 223 | | | | 100 | % |
| Finance | | | (30 | ) | | | | | | | (36 | ) | | | | | | | (39 | ) | | | | |
| Other* | | | (15 | ) | | | | | | | 31 | | | | | | | | (22 | ) | | | | |
| |
| Total | | $ | 199 | | | | | | | $ | 207 | | | | | | | $ | 162 | | | | | |
| |
| * | Includes items not directly associated with the major business segments or the Finance Division |
Net income for the Business Bank was $175 million for the first quarter 2005, compared to $160 million for the fourth quarter 2004. Net interest income (FTE) of $337 million in the first quarter 2005 declined $7 million from the fourth quarter 2004 and was impacted by two less days in the first quarter 2005. Average loans of $33.0 billion increased $921 million, or 12 percent on an annualized basis, compared to the fourth quarter 2004, with all business units except Commercial Real Estate showing an increase in loan balances. Average deposits of $19.9 billion in the first quarter 2005 declined $307 million, compared to the fourth quarter 2004, with a majority of the decrease due to lower deposits in the Financial Services Group, Middle Market Banking and Commercial Real Estate. The net interest margin decreased 14 basis points to 4.12 percent for the first quarter 2005, compared to the fourth quarter 2004. The provision for loan losses declined $9 million as continued improvement in credit quality was partially offset by a higher allocation of the allowance for loan losses for lease financing. Noninterest income of $69 million in the first quarter increased $3 million from the fourth quarter 2004, primarily due to an increase in letter of credit fees. First quarter 2005 noninterest expenses decreased $8 million from the fourth quarter 2004 to $141 million, primarily due to reductions in legal expenses, salaries and benefits, and the provision for credit losses on lending-related commitments.
Net income for Small Business & Personal Financial Services was $44 million for the first quarter 2005, compared to $40 million for the fourth quarter 2004. Net interest income (FTE) of $146 million in the first quarter 2005 declined $3 million from the fourth quarter 2004 and was impacted by two less days in the first quarter 2005. Average loans of $5.8 billion in the first quarter 2005 increased $75 million, or five percent on an annualized basis, compared to the fourth quarter 2004, primarily in Personal Financial Services. Average deposits were $16.8 billion in the first quarter 2005 compared to $16.9 billion in the fourth quarter 2004. The net interest margin increased one basis point to 3.52 percent in the first quarter 2005. The provision for loan losses decreased by $2 million due to continued improvement in Small Business credit quality. Noninterest income of $49 million for the first quarter 2005 declined $1 million compared to the fourth quarter 2004. First quarter 2005 noninterest expenses of $126 million decreased $6 million, compared to the fourth quarter 2004, due to lower transaction processing charges and modest decreases in other expense categories.
Net income for Wealth & Institutional Management was $25 million for the first quarter 2005, compared to $12 million for the fourth quarter 2004. Net interest income (FTE) of $36 million in the first quarter 2005 declined $2 million. First quarter 2005 average loans increased $29 million to $3.4 billion, while first quarter 2005 average deposits remained unchanged at $2.5 billion. The net interest margin decreased 14 basis points to 4.34 percent in the first quarter 2005. The provision for loan losses declined $4 million in the first quarter 2005, compared to the fourth quarter 2004, due to improved credit quality in Private Banking. First quarter noninterest income of $80 million increased $9 million, primarily due to increases in fees in the personal trust and investment advisory businesses. First quarter 2005 noninterest expenses of $80 million decreased $8 million as a result of a decline in litigation and operational losses and salaries and benefits.
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COMERICA REPORTS FIRST QUARTER 2005 EARNINGS - 4
Geographic Market Segments
Comerica also provides market segment results for four primary geographic regions: Midwest & Other Markets, Western, Texas and Florida. The financial results below are presented on a FTE basis.
The following table presents net income (loss) by market segment.
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| (dollar amounts in millions) | | 1stQtr ‘05 | | | 4thQtr ‘04 | | | 1stQtr ‘04 | |
| |
| Midwest & Other Markets | | $ | 141 | | | | 58 | % | | $ | 121 | | | | 57 | % | | $ | 140 | | | | 63 | % |
| Western | | | 80 | | | | 33 | | | | 67 | | | | 32 | | | | 58 | | | | 26 | |
| Texas | | | 20 | | | | 8 | | | | 20 | | | | 9 | | | | 21 | | | | 9 | |
| Florida | | | 3 | | | | 1 | | | | 4 | | | | 2 | | | | 4 | | | | 2 | |
| |
| | | | 244 | | | | 100 | % | | | 212 | | | | 100 | % | | | 223 | | | | 100 | % |
| Finance & Other Businesses | | | (45 | ) | | | | | | | (5 | ) | | | | | | | (61 | ) | | | | |
| |
| Total | | $ | 199 | | | | | | | $ | 207 | | | | | | | $ | 162 | | | | | |
| |
Net income for the Midwest and Other markets was $141 million for the first quarter 2005, compared to $121 million for the fourth quarter 2004. Net interest income (FTE) of $264 million in the first quarter 2005 declined $6 million from the fourth quarter 2004 and was impacted by two less days in the first quarter 2005. Average loans of $23.3 billion for the first quarter 2005 increased $365 million, or six percent on an annualized basis, from the fourth quarter 2004, with increases in Global Corporate Banking and Middle Market Banking, partially offset by a decrease in Commercial Real Estate. Average total deposits of $18.9 billion in the first quarter 2005 decreased $254 million, primarily in Small Business and Commercial Real Estate, offset by an increase in Global Corporate Banking. The net interest margin decreased 10 basis points to 4.56 percent in the first quarter 2005. The provision for loan losses decreased $2 million in the first quarter 2005, compared to the fourth quarter 2004, as continued improvement in credit quality was partially offset by a higher allocation of the allowance for loan losses for lease financing. Noninterest income increased $10 million to $147 million in the first quarter 2005 due to higher personal trust and investment management fees and higher letter of credit fees. Noninterest expenses declined $20 million in the first quarter due to lower salaries and benefits, operational losses, and provision for credit losses on lending-related commitments.
Net income for the Western region was $80 million for the first quarter 2005, compared to $67 million for the fourth quarter 2004. Net interest income (FTE) of $186 million in the first quarter 2005 declined $4 million from the fourth quarter 2004 and was impacted by two less days in the first quarter 2005. Average loans increased $534 million, or 18 percent on an annualized basis, to $12.7 billion in the first quarter 2005, with all business units except Commercial Real Estate showing an increase in loan balances. Average deposits of $16.3 billion declined slightly compared to the fourth quarter 2004, as a decline in the Financial Services Group was substantially offset by an increase in the Entertainment Group. The net interest margin of 4.62 percent was unchanged compared to the fourth quarter 2004. The first quarter 2005 provision for loan losses declined $14 million due to an improvement in credit quality. Noninterest income of $30 million in the first quarter 2005 increased $1 million from the fourth quarter 2004. Noninterest expenses of $91 million decreased $2 million in the first quarter 2005, compared to the fourth quarter 2004. Included in the first quarter 2005 are increased expenses related to nine branches opened in the fourth quarter 2004, including five in December.
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COMERICA REPORTS FIRST QUARTER 2005 EARNINGS – 5
Net income for the Texas region of $20 million for the first quarter 2005 was unchanged, compared to the fourth quarter 2004. Net interest income (FTE) of $59 million in the first quarter 2005 declined $2 million from the fourth quarter 2004 and was impacted by two less days in the first quarter 2005. Average loans of $4.8 billion increased $118 million, or 10 percent on an annualized basis, in the first quarter 2005, primarily due to increases in Energy Lending and Middle Market Banking. Average deposits of $3.7 billion declined $122 million in the first quarter 2005, with all business units except Global Corporate Banking showing decreases in deposit balances. The net interest margin declined 22 basis points to 4.93 percent in the first quarter 2005. The provision for loan losses increased $1 million and noninterest income remained unchanged at $18 million in the first quarter 2005, compared to the fourth quarter 2004. Noninterest expenses decreased $2 million to $43 million in the first quarter 2005, compared to the fourth quarter 2004. Included in the first quarter 2005 are increased expenses related to three branches opened in the fourth quarter 2004.
Net income for the Florida region was $3 million for the first quarter 2005, compared to $4 million for the fourth quarter 2004. Net interest income (FTE) of $10 million in the first quarter 2005 was unchanged compared to the fourth quarter 2004. Average loans of $1.4 billion and average deposits of $300 million in the first quarter 2005 were largely unchanged compared to the fourth quarter 2004. The net interest margin increased five basis points to 2.99 percent in the first quarter 2005, compared to the fourth quarter 2004. First quarter 2005 provision for loan losses increased $1 million, compared to the fourth quarter 2004. Both noninterest income of $4 million and noninterest expenses of $7 million were unchanged in the first quarter 2005, compared to the fourth quarter 2004.
Conference Call and Webcast
Comerica will host a conference call to review first quarter 2005 financial results at 8 a.m. ET Wednesday, April 20, 2005. Interested parties may access the conference call by calling (706) 679-5261 (event ID No. 4976890). The call and supplemental financial information can also 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, May 20, 2005. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 4976890). A replay of the Webcast can also be accessed via Comerica’s “Investor Relations” page at www.comerica.com.
Comerica Incorporated is a financial services company headquartered in Detroit, strategically aligned into three major business segments: the Business Bank, Small Business & Personal Financial Services, and Wealth & 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 “anticipates,” “believes,” “feels,” “expects,” “estimates,” “seeks,” “strives,” “plans,” “intends,” “outlook,” “forecast,” “position,” “target,” “mission,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “outcome,” “continue,” “remain,” “maintain,” “trend,” “objective” and variations of such words and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, as they relate to the Corporation or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of Comerica’s management based on information known to Comerica’s management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica’s management for future or past operations, products or services, and forecasts of Comerica’s revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, 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
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COMERICA REPORTS FIRST QUARTER 2005 EARNINGS – 6
differences are changes in the pace of an economic recovery and related changes in employment levels, the effects of war and other armed conflicts or acts of terrorism, 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, declines or other changes in the businesses or industries in which Comerica has a concentration of loans, including, but not limited to, the automotive industry, 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 | | Paul Jaremski |
| (313) 222-4732 | | (313) 222-6317 |
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | |
| |
| | | Three Months Ended |
| | | March 31, | | | December 31, | | | March 31, | |
| (in millions, except per share data) | | 2005 | | | 2004 | | | 2004 | |
| |
PER SHARE AND COMMON STOCK DATA | | | | | | | | | | | | |
| Diluted net income | | $ | 1.16 | | | $ | 1.21 | | | $ | 0.92 | |
| Cash dividends declared | | | 0.55 | | | | 0.52 | | | | 0.52 | |
| Common shareholders’ equity (at period end) | | | 29.81 | | | | 29.94 | | | | 29.41 | |
| | | | | | | | | | | | | |
| Average diluted shares (in thousands) | | | 171,382 | | | | 172,224 | | | | 175,987 | |
| |
KEY RATIOS | | | | | | | | | | | | |
| Return on average common shareholders’ equity | | | 15.73 | % | | | 16.39 | % | | | 12.71 | % |
| Return on average assets | | | 1.57 | | | | 1.63 | | | | 1.28 | |
| Average common shareholders’ equity as a percentage of average assets | | | 9.99 | | | | 9.93 | | | | 10.04 | |
| Tier 1 common capital ratio * | | | 8.03 | | | | 8.13 | | | | 8.00 | |
| Tier 1 risk-based capital ratio * | | | 8.65 | | | | 8.77 | | | | 8.64 | |
| Total risk-based capital ratio * | | | 12.45 | | | | 12.75 | | | | 12.60 | |
| Leverage ratio * | | | 10.51 | | | | 10.37 | | | | 10.15 | |
| |
AVERAGE BALANCES | | | | | | | | | | | | |
| Commercial loans | | $ | 23,248 | | | $ | 22,563 | | | $ | 21,716 | |
| Real estate construction loans | | | 3,052 | | | | 3,178 | | | | 3,354 | |
| Commercial mortgage loans | | | 8,315 | | | | 7,999 | | | | 7,964 | |
| Residential mortgage loans | | | 1,310 | | | | 1,275 | | | | 1,226 | |
| Consumer loans | | | 2,734 | | | | 2,721 | | | | 2,626 | |
| Lease financing | | | 1,261 | | | | 1,259 | | | | 1,291 | |
| International loans | | | 2,235 | | | | 2,134 | | | | 2,250 | |
| |
| Total loans | | $ | 42,155 | | | $ | 41,129 | | | $ | 40,427 | |
| Earning assets | | | 46,645 | | | | 47,018 | | | | 46,822 | |
| Total assets | | | 50,750 | | | | 51,116 | | | | 50,738 | |
| Interest-bearing deposits | | | 25,662 | | | | 25,572 | | | | 26,620 | |
| Total interest-bearing liabilities | | | 30,380 | | | | 30,192 | | | | 31,726 | |
| Noninterest-bearing deposits | | | 14,120 | | | | 14,755 | | | | 12,985 | |
| Common shareholders’ equity | | | 5,072 | | | | 5,077 | | | | 5,096 | |
| |
NET INTEREST INCOME | | | | | | | | | | | | |
| Net interest income (fully taxable equivalent basis) | | $ | 461 | | | $ | 467 | | | $ | 446 | |
| Fully taxable equivalent adjustment | | | 1 | | | | 1 | | | | 1 | |
| Net interest margin | | | 4.00 | % | | | 3.96 | % | | | 3.83 | % |
| |
CREDIT QUALITY | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 269 | | | $ | 312 | | | $ | 489 | |
| Other real estate | | | 42 | | | | 27 | | | | 32 | |
| Nonaccrual debt securities | | | — | | | | — | | | | 1 | |
| Total nonperforming assets | | | 311 | | | | 339 | | | | 522 | |
| Loans past due 90 days or more and still accruing | | | 23 | | | | 15 | | | | 35 | |
| Gross charge-offs | | | 46 | | | | 55 | | | | 84 | |
| Recoveries | | | 8 | | | | 20 | | | | 14 | |
| Net charge-offs | | | 38 | | | | 35 | | | | 70 | |
| | | | | | | | | | | | | |
| Allowance for loan losses as a percentage of total loans | | | 1.52 | % | | | 1.65 | % | | | 1.99 | % |
| Net loans charged off as a percentage of average total loans | | | 0.36 | | | | 0.34 | | | | 0.69 | |
| Nonperforming assets as a percentage of total loans, other real estate and nonaccrual debt securities | | | 0.75 | | | | 0.83 | | | | 1.30 | |
| Allowance for loan losses as a percentage of total nonperforming assets | | | 204 | | | | 198 | | | | 153 | |
| |
ADDITIONAL DATA | | | | | | | | | | | | |
| Goodwill | | $ | 247 | | | $ | 247 | | | $ | 247 | |
| Core deposit intangible | | | — | | | | — | | | | 1 | |
| Other intangibles | | | 1 | | | | 1 | | | | 1 | |
| Loan servicing rights | | | 19 | | | | 20 | | | | 18 | |
| Deferred mutual fund distribution costs | | | 7 | | | | 8 | | | | 11 | |
| Amortization of intangibles | | | — | | | | — | | | | — | |
| |
| * | | March 31, 2005 ratios are estimated |
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CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | |
| |
| | | March 31, | | | December 31, | | | March 31, | |
| (in millions, except share data) | | 2005 | | | 2004 | | | 2004 | |
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ASSETS | | | | | | | | | | | | |
| Cash and due from banks | | $ | 1,835 | | | $ | 1,139 | | | $ | 1,661 | |
| Short-term investments | | | 3,794 | | | | 3,230 | | | | 5,734 | |
| Investment securities available-for-sale | | | 3,687 | | | | 3,943 | | | | 4,639 | |
| | | | | | | | | | | | | |
| Commercial loans | | | 22,780 | | | | 22,039 | | | | 21,501 | |
| Real estate construction loans | | | 3,035 | | | | 3,053 | | | | 3,243 | |
| Commercial mortgage loans | | | 8,415 | | | | 8,236 | | | | 8,029 | |
| Residential mortgage loans | | | 1,335 | | | | 1,294 | | | | 1,210 | |
| Consumer loans | | | 2,700 | | | | 2,751 | | | | 2,626 | |
| Lease financing | | | 1,262 | | | | 1,265 | | | | 1,268 | |
| International loans | | | 2,209 | | | | 2,205 | | | | 2,135 | |
| |
| Total loans | | | 41,736 | | | | 40,843 | | | | 40,012 | |
| Less allowance for loan losses | | | (636 | ) | | | (673 | ) | | | (798 | ) |
| |
| Net loans | | | 41,100 | | | | 40,170 | | | | 39,214 | |
| | | | | | | | | | | | | |
| Premises and equipment | | | 463 | | | | 415 | | | | 378 | |
| Customers’ liability on acceptances outstanding | | | 40 | | | | 57 | | | | 27 | |
| Accrued income and other assets | | | 2,591 | | | | 2,812 | | | | 2,815 | |
| |
| Total assets | | $ | 53,510 | | | $ | 51,766 | | | $ | 54,468 | |
| |
| | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | |
| Noninterest-bearing deposits | | $ | 17,216 | | | $ | 15,164 | | | $ | 17,208 | |
| Interest-bearing deposits | | | 25,490 | | | | 25,772 | | | | 26,315 | |
| |
| Total deposits | | | 42,706 | | | | 40,936 | | | | 43,523 | |
| Short-term borrowings | | | 408 | | | | 193 | | | | 251 | |
| Acceptances outstanding | | | 40 | | | | 57 | | | | 27 | |
| Accrued expenses and other liabilities | | | 1,043 | | | | 1,189 | | | | 977 | |
| Medium- and long-term debt | | | 4,283 | | | | 4,286 | | | | 4,597 | |
| |
| Total liabilities | | | 48,480 | | | | 46,661 | | | | 49,375 | |
| | | | | | | | | | | | | |
| Common stock — $5 par value: | | | | | | | | | | | | |
| Authorized - 325,000,000 shares | | | | | | | | | | | | |
| Issued - 178,735,252 shares at 3/31/05, 12/31/04 and 3/31/04 | | | 894 | | | | 894 | | | | 894 | |
| Capital surplus | | | 433 | | | | 421 | | | | 395 | |
| Accumulated other comprehensive income (loss) | | | (154 | ) | | | (69 | ) | | | 92 | |
| Retained earnings | | | 4,427 | | | | 4,331 | | | | 4,030 | |
| Less cost of common stock in treasury - 9,988,453 shares at 3/31/05, 8,259,328 shares at 12/31/04, and 5,576,560 shares at 3/31/04 | | | (570 | ) | | | (472 | ) | | | (318 | ) |
| |
| Total shareholders’ equity | | | 5,030 | | | | 5,105 | | | | 5,093 | |
| |
| Total liabilities and shareholders’ equity | | $ | 53,510 | | | $ | 51,766 | | | $ | 54,468 | |
| |
-8-
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
| | | | | | | | | |
| |
| | | Three Months Ended | |
| | | March 31, |
| (in millions, except per share data) | | 2005 | | | 2004 | |
| |
INTEREST INCOME | | | | | | | | |
| Interest and fees on loans | | $ | 566 | | | $ | 496 | |
| Interest on investment securities | | | 35 | | | | 40 | |
| Interest on short-term investments | | | 6 | | | | 7 | |
| |
| Total interest income | | | 607 | | | | 543 | |
| | | | | | | | | |
INTEREST EXPENSE | | | | | | | | |
| Interest on deposits | | | 108 | | | | 73 | |
| Interest on short-term borrowings | | | 3 | | | | 1 | |
| Interest on medium- and long-term debt | | | 36 | | | | 24 | |
| |
| Total interest expense | | | 147 | | | | 98 | |
| |
| Net interest income | | | 460 | | | | 445 | |
| Provision for loan losses | | | 1 | | | | 65 | |
| |
| Net interest income after provision for loan losses | | | 459 | | | | 380 | |
| | | | | | | | | |
NONINTEREST INCOME | | | | | | | | |
| Service charges on deposit accounts | | | 54 | | | | 62 | |
| Fiduciary income | | | 46 | | | | 44 | |
| Commercial lending fees | | | 12 | | | | 14 | |
| Letter of credit fees | | | 20 | | | | 15 | |
| Foreign exchange income | | | 9 | | | | 9 | |
| Brokerage fees | | | 8 | | | | 10 | |
| Investment advisory revenue, net | | | 10 | | | | 9 | |
| Card fees | | | 9 | | | | 7 | |
| Bank-owned life insurance | | | 9 | | | | 9 | |
| Equity in earnings of unconsolidated subsidiaries | | | 5 | | | | 3 | |
| Warrant income | | | 2 | | | | 1 | |
| Net securities gains | | | — | | | | 5 | |
| Other noninterest income | | | 26 | | | | 32 | |
| |
| Total noninterest income | | | 210 | | | | 220 | |
| | | | | | | | | |
NONINTEREST EXPENSES | | | | | | | | |
| Salaries and employee benefits | | | 236 | | | | 226 | |
| Net occupancy expense | | | 32 | | | | 30 | |
| Equipment expense | | | 14 | | | | 15 | |
| Outside processing fee expense | | | 17 | | | | 17 | |
| Software expense | | | 12 | | | | 11 | |
| Customer services | | | 11 | | | | 2 | |
| Litigation and operational losses | | | 3 | | | | 8 | |
| Other noninterest expenses | | | 49 | | | | 60 | |
| |
| Total noninterest expenses | | | 374 | | | | 369 | |
| |
| Income before income taxes | | | 295 | | | | 231 | |
| Provision for income taxes | | | 96 | | | | 69 | |
| |
NET INCOME | | $ | 199 | | | $ | 162 | |
| |
| | | | | | | | | |
| Basic net income per common share | | $ | 1.18 | | | $ | 0.93 | |
| Diluted net income per common share | | | 1.16 | | | | 0.92 | |
| | | | | | | | | |
| Cash dividends declared on common stock | | | 93 | | | | 90 | |
| Dividends per common share | | | 0.55 | | | | 0.52 | |
| |
-9-
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | First | | | Fourth | | | Third | | | Second | | | First | | | First Quarter 2005 Compared To: |
| | | Quarter | | | Quarter | | | Quarter | | | Quarter | | | Quarter | | | Fourth Quarter 2004 | | | First Quarter 2004 | |
| (in millions, except per share data) | | 2005 | | | 2004 | | | 2004 | | | 2004 | | | 2004 | | | Amount | | | Percent | | | Amount | | | Percent | |
| |
INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 566 | | | $ | 544 | | | $ | 514 | | | $ | 500 | | | $ | 496 | | | $ | 22 | | | | 4.0 | % | | $ | 70 | | | | 14.1 | % |
| Interest on investment securities | | | 35 | | | | 36 | | | | 36 | | | | 35 | | | | 40 | | | | (1 | ) | | | (3.0 | ) | | | (5 | ) | | | (12.9 | ) |
| Interest on short-term investments | | | 6 | | | | 11 | | | | 8 | | | | 10 | | | | 7 | | | | (5 | ) | | | (44.8 | ) | | | (1 | ) | | | (21.3 | ) |
| |
| Total interest income | | | 607 | | | | 591 | | | | 558 | | | | 545 | | | | 543 | | | | 16 | | | | 2.7 | | | | 64 | | | | 11.6 | �� |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 108 | | | | 91 | | | | 79 | | | | 72 | | | | 73 | | | | 17 | | | | 18.4 | | | | 35 | | | | 47.9 | |
| Interest on short-term borrowings | | | 3 | | | | 2 | | | | 1 | | | | — | | | | 1 | | | | 1 | | | | 127.7 | | | | 2 | | | | 329.4 | |
| Interest on medium- and long-term debt | | | 36 | | | | 32 | | | | 27 | | | | 25 | | | | 24 | | | | 4 | | | | 12.1 | | | | 12 | | | | 45.2 | |
| |
| Total interest expense | | | 147 | | | | 125 | | | | 107 | | | | 97 | | | | 98 | | | | 22 | | | | 17.9 | | | | 49 | | | | 49.2 | |
| |
| Net interest income | | | 460 | | | | 466 | | | | 451 | | | | 448 | | | | 445 | | | | (6 | ) | | | (1.4 | ) | | | 15 | | | | 3.3 | |
| Provision for loan losses | | | 1 | | | | (21 | ) | | | — | | | | 20 | | | | 65 | | | | 22 | | | | N/M | | | | (64 | ) | | | (98.5 | ) |
| |
| Net interest income after provision for loan losses | | | 459 | | | | 487 | | | | 451 | | | | 428 | | | | 380 | | | | (28 | ) | | | (5.8 | ) | | | 79 | | | | 20.7 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 54 | | | | 53 | | | | 57 | | | | 59 | | | | 62 | | | | 1 | | | | 1.5 | | | | (8 | ) | | | (12.7 | ) |
| Fiduciary income | | | 46 | | | | 43 | | | | 43 | | | | 41 | | | | 44 | | | | 3 | | | | 6.0 | | | | 2 | | | | 3.6 | |
| Commercial lending fees | | | 12 | | | | 14 | | | | 14 | | | | 13 | | | | 14 | | | | (2 | ) | | | (9.2 | ) | | | (2 | ) | | | (11.1 | ) |
| Letter of credit fees | | | 20 | | | | 17 | | | | 17 | | | | 17 | | | | 15 | | | | 3 | | | | 22.8 | | | | 5 | | | | 35.3 | |
| Foreign exchange income | | | 9 | | | | 9 | | | | 9 | | | | 10 | | | | 9 | | | | — | | | | (2.0 | ) | | | — | | | | (9.1 | ) |
| Brokerage fees | | | 8 | | | | 9 | | | | 9 | | | | 8 | | | | 10 | | | | (1 | ) | | | (12.2 | ) | | | (2 | ) | | | (15.1 | ) |
| Investment advisory revenue, net | | | 10 | | | | 9 | | | | 8 | | | | 9 | | | | 9 | | | | 1 | | | | 11.3 | | | | 1 | | | | 17.0 | |
| Card fees | | | 9 | | | | 9 | | | | 8 | | | | 8 | | | | 7 | | | | — | | | | (4.5 | ) | | | 2 | | | | 20.5 | |
| Bank-owned life insurance | | | 9 | | | | 6 | | | | 10 | | | | 9 | | | | 9 | | | | 3 | | | | 36.7 | | | | — | | | | 1.7 | |
| Equity in earnings of unconsolidated subsidiaries | | | 5 | | | | 1 | | | | 3 | | | | 5 | | | | 3 | | | | 4 | | | | 262.7 | | | | 2 | | | | 37.0 | |
| Warrant income | | | 2 | | | | 1 | | | | 1 | | | | 4 | | | | 1 | | | | 1 | | | | 68.9 | | | | 1 | | | | 119.1 | |
| Net securities gains (losses) | | | — | | | | — | | | | (6 | ) | | | 1 | | | | 5 | | | | — | | | | N/M | | | | (5 | ) | | | (102.9 | ) |
| Net gain on sales of businesses | | | — | | | | — | | | | — | | | | 7 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Other noninterest income | | | 26 | | | | 32 | | | | 33 | | | | 37 | | | | 32 | | | | (6 | ) | | | (17.4 | ) | | | (6 | ) | | | (17.9 | ) |
| |
| Total noninterest income | | | 210 | | | | 203 | | | | 206 | | | | 228 | | | | 220 | | | | 7 | | | | 3.2 | | | | (10 | ) | | | (4.5 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NONINTEREST EXPENSES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 236 | | | | 233 | | | | 225 | | | | 235 | | | | 226 | | | | 3 | | | | 1.1 | | | | 10 | | | | 4.2 | |
| Net occupancy expense | | | 32 | | | | 32 | | | | 32 | | | | 31 | | | | 30 | | | | — | | | | (2.9 | ) | | | 2 | | | | 5.7 | |
| Equipment expense | | | 14 | | | | 15 | | | | 14 | | | | 14 | | | | 15 | | | | (1 | ) | | | (1.4 | ) | | | (1 | ) | | | (7.0 | ) |
| Outside processing fee expense | | | 17 | | | | 17 | | | | 16 | | | | 18 | | | | 17 | | | | — | | | | 1.0 | | | | — | | | | 3.0 | |
| Software expense | | | 12 | | | | 12 | | | | 11 | | | | 9 | | | | 11 | | | | — | | | | (1.8 | ) | | | 1 | | | | 10.5 | |
| Customer services | | | 11 | | | | 6 | | | | 8 | | | | 7 | | | | 2 | | | | 5 | | | | 90.8 | | | | 9 | | | | 347.1 | |
| Litigation and operational losses | | | 3 | | | | (3 | ) | | | 16 | | | | 3 | | | | 8 | | | | 6 | | | | N/M | | | | (5 | ) | | | (57.7 | ) |
| Other noninterest expenses | | | 49 | | | | 68 | | | | 50 | | | | 55 | | | | 60 | | | | (19 | ) | | | (27.9 | ) | | | (11 | ) | | | (17.3 | ) |
| |
| Total noninterest expenses | | | 374 | | | | 380 | | | | 372 | | | | 372 | | | | 369 | | | | (6 | ) | | | (1.5 | ) | | | 5 | | | | 1.4 | |
| |
| Income before income taxes | | | 295 | | | | 310 | | | | 285 | | | | 284 | | | | 231 | | | | (15 | ) | | | (5.1 | ) | | | 64 | | | | 27.6 | |
| Provision for income taxes | | | 96 | | | | 103 | | | | 89 | | | | 92 | | | | 69 | | | | (7 | ) | | | (7.2 | ) | | | 27 | | | | 38.0 | |
| |
NET INCOME | | $ | 199 | | | $ | 207 | | | $ | 196 | | | $ | 192 | | | $ | 162 | | | $ | (8 | ) | | | (4.1 | )% | | $ | 37 | | | | 23.1 | % |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income per common share | | $ | 1.18 | | | $ | 1.22 | | | $ | 1.15 | | | $ | 1.11 | | | $ | 0.93 | | | $ | (0.04 | ) | | | (3.3 | )% | | $ | 0.25 | | | | 26.9 | % |
| Diluted net income per common share | | | 1.16 | | | | 1.21 | | | | 1.13 | | | | 1.10 | | | | 0.92 | | | | (0.05 | ) | | | (4.1 | ) | | | 0.24 | | | | 26.1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash dividends declared on common stock | | | 93 | | | | 88 | | | | 88 | | | | 90 | | | | 90 | | | | 5 | | | | 5.3 | | | | 3 | | | | 3.1 | |
| Dividends per common share | | | 0.55 | | | | 0.52 | | | | 0.52 | | | | 0.52 | | | | 0.52 | | | | 0.03 | | | | 5.8 | | | | 0.03 | | | | 5.8 | |
| |
-10-
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | |
| |
| | | 2005 | | | 2004 |
| (in millions) | | 1st Qtr | | | 4th Qtr | | | 3rd Qtr | | | 2nd Qtr | | | 1st Qtr | |
| |
| Balance at beginning of period | | $ | 673 | | | $ | 729 | | | $ | 762 | | | $ | 798 | | | $ | 803 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loans charged-off: | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 28 | | | | 39 | | | | 41 | | | | 57 | | | | 64 | |
| Real estate construction: | | | | | | | | | | | | | | | | | | | | |
| Real estate construction business line | | | — | | | | — | | | | 1 | | | | 1 | | | | — | |
| Other | | | — | | | | — | | | | — | | | | — | | | | — | |
| |
| Total real estate construction | | | — | | | | — | | | | 1 | | | | 1 | | | | — | |
| Commercial mortgage: | | | | | | | | | | | | | | | | | | | | |
| Commercial real estate business line | | | 2 | | | | 4 | | | | — | | | | — | | | | — | |
| Other | | | 3 | | | | — | | | | 7 | | | | 6 | | | | 6 | |
| |
| Total commercial mortgage | | | 5 | | | | 4 | | | | 7 | | | | 6 | | | | 6 | |
| Residential mortgage | | | — | | | | — | | | | 1 | | | | — | | | | — | |
| Consumer | | | 3 | | | | 5 | | | | 2 | | | | 4 | | | | 3 | |
| Lease financing | | | 3 | | | | 4 | | | | — | | | | 1 | | | | 8 | |
| International | | | 7 | | | | 3 | | | | 1 | | | | 7 | | | | 3 | |
| |
| Total loans charged-off | | | 46 | | | | 55 | | | | 53 | | | | 76 | | | | 84 | |
| | | | | | | | | | | | | | | | | | | | | |
| Recoveries on loans previously charged-off: | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 7 | | | | 14 | | | | 13 | | | | 15 | | | | 10 | |
| Real estate construction | | | — | | | | — | | | | — | | | | — | | | | — | |
| Commercial mortgage | | | — | | | | 1 | | | | 1 | | | | 1 | | | | — | |
| Residential mortgage | | | — | | | | — | | | | — | | | | — | | | | — | |
| Consumer | | | 1 | | | | — | | | | 1 | | | | 1 | | | | — | |
| Lease financing | | | — | | | | — | | | | — | | | | — | | | | 1 | |
| International | | | — | | | | 5 | | | | 5 | | | | 3 | | | | 3 | |
| |
| Total recoveries | | | 8 | | | | 20 | | | | 20 | | | | 20 | | | | 14 | |
| |
| Net loans charged-off | | | 38 | | | | 35 | | | | 33 | | | | 56 | | | | 70 | |
| Provision for loan losses | | | 1 | | | | (21 | ) | | | — | | | | 20 | | | | 65 | |
| |
| Balance at end of period | | $ | 636 | | | $ | 673 | | | $ | 729 | | | $ | 762 | | | $ | 798 | |
| |
| | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses as a percentage of total loans | | | 1.52 | % | | | 1.65 | % | | | 1.83 | % | | | 1.90 | % | | | 1.99 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Net loans charged-off as a percentage of average total loans | | | 0.36 | | | | 0.34 | | | | 0.33 | | | | 0.55 | | | | 0.69 | |
| |
| Allowance for credit losses on lending-related commitments* | | $ | 18 | | | $ | 21 | | | $ | 24 | | | $ | 28 | | | $ | 32 | |
| |
| * | | Included in “Accrued expenses and other liabilities” on the consolidated balance sheets. |
-11-
NONPERFORMING ASSETS
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | |
| |
| | | 2005 | | 2004 |
| (in millions) | | 1st Qtr | | | 4th Qtr | | | 3rd Qtr | | | 2nd Qtr | | | 1st Qtr | |
| | | |
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans: | | | | | | | | | | | | | | | | | | | | |
| Commercial | | $ | 161 | | | $ | 161 | | | $ | 181 | | | $ | 229 | | | $ | 282 | |
| Real estate construction: | | | | | | | | | | | | | | | | | | | | |
| Real estate construction business line | | | 18 | | | | 31 | | | | 28 | | | | 20 | | | | 19 | |
| Other | | | 2 | | | | 3 | | | | 3 | | | | 3 | | | | 5 | |
| |
| Total real estate construction | | | 20 | | | | 34 | | | | 31 | | | | 23 | | | | 24 | |
| Commercial mortgage: | | | | | | | | | | | | | | | | | | | | |
| Commercial real estate business line | | | 11 | | | | 6 | | | | 10 | | | | 12 | | | | 3 | |
| Other | | | 38 | | | | 58 | | | | 70 | | | | 80 | | | | 90 | |
| |
| Total commercial mortgage | | | 49 | | | | 64 | | | | 80 | | | | 92 | | | | 93 | |
| Residential mortgage | | | 2 | | | | 1 | | | | 1 | | | | 3 | | | | 4 | |
| Consumer | | | 1 | | | | 1 | | | | 2 | | | | 2 | | | | 5 | |
| Lease financing | | | 12 | | | | 15 | | | | 19 | | | | 13 | | | | 13 | |
| International | | | 24 | | | | 36 | | | | 47 | | | | 42 | | | | 68 | |
| |
| Total nonaccrual loans | | | 269 | | | | 312 | | | | 361 | | | | 404 | | | | 489 | |
| Reduced-rate loans | | | — | | | | — | | | | — | | | | — | | | | — | |
| |
| Total nonperforming loans | | | 269 | | | | 312 | | | | 361 | | | | 404 | | | | 489 | |
| Other real estate | | | 42 | | | | 27 | | | | 27 | | | | 26 | | | | 32 | |
| Nonaccrual debt securities | | | — | | | | — | | | | — | | | | — | | | | 1 | |
| |
| Total nonperforming assets | | $ | 311 | | | $ | 339 | | | $ | 388 | | | $ | 430 | | | $ | 522 | |
| |
| | | | | | | | | | | | | | | | | | | | | |
| Nonperforming loans as a percentage of total loans | | | 0.64 | % | | | 0.76 | % | | | 0.91 | % | | | 1.01 | % | | | 1.22 | % |
| Nonperforming assets as a percentage of total loans, other real estate and nonaccrual debt securities | | | 0.75 | | | | 0.83 | | | | 0.98 | | | | 1.07 | | | | 1.30 | |
| Allowance for loan losses as a percentage of total nonperforming assets | | | 204 | | | | 198 | | | | 188 | | | | 177 | | | | 153 | |
| Loans past due 90 days or more and still accruing | | $ | 23 | | | $ | 15 | | | $ | 20 | | | $ | 25 | | | $ | 35 | |
| |
| |
| |
ANALYSIS OF NONACCRUAL LOANS | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans at beginning of period | | $ | 312 | | | $ | 361 | | | $ | 404 | | | $ | 489 | | | $ | 507 | |
| Loans transferred to nonaccrual (1) | | | 66 | | | | 71 | | | | 106 | | | | 63 | | | | 92 | |
| Nonaccrual business loan gross charge-offs (2) | | | (42 | ) | | | (49 | ) | | | (48 | ) | | | (71 | ) | | | (80 | ) |
| Loans transferred to accrual status (1) | | | (4 | ) | | | (7 | ) | | | — | | | | — | | | | — | |
| Nonaccrual business loans sold (3) | | | (14 | ) | | | (33 | ) | | | (16 | ) | | | (33 | ) | | | (14 | ) |
| Payments/Other (4) | | | (49 | ) | | | (31 | ) | | | (85 | ) | | | (44 | ) | | | (16 | ) |
| |
| Nonaccrual loans at end of period | | $ | 269 | | | $ | 312 | | | $ | 361 | | | $ | 404 | | | $ | 489 | |
| |
| (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 | | $ | 42 | | | $ | 49 | | | $ | 48 | | | $ | 71 | | | $ | 80 | |
| Performing watch list loans | | | 1 | | | | 1 | | | | 2 | | | | 1 | | | | 1 | |
| Consumer loans and residential mortgage loans | | | 3 | | | | 5 | | | | 3 | | | | 4 | | | | 3 | |
| | | |
| Total gross loan charge-offs | | $ | 46 | | | $ | 55 | | | $ | 53 | | | $ | 76 | | | $ | 84 | |
| | | |
| | | | | | | | | | | | | | | | | | | | | |
| (3) Analysis of loans sold: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual business loans | | $ | 14 | | | $ | 33 | | | $ | 16 | | | $ | 33 | | | $ | 14 | |
| Performing watch list loans sold | | | 4 | | | | 7 | | | | 30 | | | | 14 | | | | 18 | |
| | | |
| Total loans sold | | $ | 18 | | | $ | 40 | | | $ | 46 | | | $ | 47 | | | $ | 32 | |
| | | |
| (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. |
-12-
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | Three Months Ended |
| | | March 31, 2005 | | | December 31, 2004 | | | March 31, 2004 |
| | | Average | | | | | | | Average | | | Average | | | | | | | Average | | | Average | | | | | | | Average | |
| (dollar amounts in millions) | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | |
| |
| Commercial loans | | $ | 23,248 | | | $ | 286 | | | | 5.00 | % | | $ | 22,563 | | | $ | 265 | | | | 4.66 | % | | $ | 21,716 | | | $ | 218 | | | | 4.04 | % |
| Real estate construction loans | | | 3,052 | | | | 49 | | | | 6.48 | | | | 3,178 | | | | 48 | | | | 5.99 | | | | 3,354 | | | | 42 | | | | 5.01 | |
| Commercial mortgage loans | | | 8,315 | | | | 118 | | | | 5.77 | | | | 7,999 | | | | 111 | | | | 5.53 | | | | 7,964 | | | | 100 | | | | 5.03 | |
| Residential mortgage loans | | | 1,310 | | | | 18 | | | | 5.58 | | | | 1,275 | | | | 18 | | | | 5.59 | | | | 1,226 | | | | 17 | | | | 5.78 | |
| Consumer loans | | | 2,734 | | | | 36 | | | | 5.32 | | | | 2,721 | | | | 34 | | | | 5.04 | | | | 2,626 | | | | 31 | | | | 4.62 | |
| Lease financing | | | 1,261 | | | | 13 | | | | 4.13 | | | | 1,259 | | | | 13 | | | | 4.09 | | | | 1,291 | | | | 14 | | | | 4.40 | |
| International loans | | | 2,235 | | | | 30 | | | | 5.43 | | | | 2,134 | | | | 29 | | | | 5.40 | | | | 2,250 | | | | 23 | | | | 4.11 | |
| Business loan swap income | | | — | | | | 17 | | | | — | | | | — | | | | 28 | | | | — | | | | — | | | | 52 | | | | — | |
| | | |
| Total loans | | | 42,155 | | | | 567 | | | | 5.45 | | | | 41,129 | | | | 546 | | | | 5.28 | | | | 40,427 | | | | 497 | | | | 4.94 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment securities available-for-sale (1) | | | 3,790 | | | | 35 | | | | 3.60 | | | | 4,052 | | | | 35 | | | | 3.48 | | | | 4,551 | | | | 40 | | | | 3.48 | |
| Short-term investments | | | 700 | | | | 6 | | | | 3.47 | | | | 1,837 | | | | 11 | | | | 2.36 | | | | 1,844 | | | | 7 | | | | 1.66 | |
| | | |
| Total earning assets | | | 46,645 | | | | 608 | | | | 5.27 | | | | 47,018 | | | | 592 | | | | 5.01 | | | | 46,822 | | | | 544 | | | | 4.67 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | 1,639 | | | | | | | | | | | | 1,698 | | | | | | | | | | | | 1,664 | | | | | | | | | |
| Allowance for loan losses | | | (685 | ) | | | | | | | | | | | (731 | ) | | | | | | | | | | | (831 | ) | | | | | | | | |
| Accrued income and other assets | | | 3,151 | | | | | | | | | | | | 3,131 | | | | | | | | | | | | 3,083 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 50,750 | | | | | | | | | | | $ | 51,116 | | | | | | | | | | | $ | 50,738 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Money market and NOW deposits | | $ | 17,810 | | | | 69 | | | | 1.56 | | | $ | 17,755 | | | | 57 | | | | 1.27 | | | $ | 17,908 | | | | 42 | | | | 0.95 | |
| Savings deposits | | | 1,582 | | | | 2 | | | | 0.41 | | | | 1,605 | | | | 2 | | | | 0.41 | | | | 1,607 | | | | 2 | | | | 0.39 | |
| Certificates of deposit | | | 5,558 | | | | 31 | | | | 2.28 | | | | 5,520 | | | | 28 | | | | 2.01 | | | | 6,515 | | | | 26 | | | | 1.58 | |
| Foreign office time deposits | | | 712 | | | | 6 | | | | 3.72 | | | | 692 | | | | 5 | | | | 2.99 | | | | 590 | | | | 3 | | | | 2.41 | |
| | | |
| Total interest-bearing deposits | | | 25,662 | | | | 108 | | | | 1.71 | | | | 25,572 | | | | 92 | | | | 1.42 | | | | 26,620 | | | | 73 | | | | 1.10 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-term borrowings | | | 441 | | | | 3 | | | | 2.71 | | | | 278 | | | | 1 | | | | 1.85 | | | | 311 | | | | 1 | | | | 0.89 | |
| Medium- and long-term debt | | | 4,277 | | | | 36 | | | | 3.37 | | | | 4,342 | | | | 32 | | | | 2.91 | | | | 4,795 | | | | 24 | | | | 2.06 | |
| | | |
| Total interest-bearing sources | | | 30,380 | | | | 147 | | | | 1.96 | | | | 30,192 | | | | 125 | | | | 1.64 | | | | 31,726 | | | | 98 | | | | 1.25 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing deposits | | | 14,120 | | | | | | | | | | | | 14,755 | | | | | | | | | | | | 12,985 | | | | | | | | | |
| Accrued expenses and other liabilities | | | 1,178 | | | | | | | | | | | | 1,092 | | | | | | | | | | | | 931 | | | | | | | | | |
| Common shareholders’ equity | | | 5,072 | | | | | | | | | | | | 5,077 | | | | | | | | | | | | 5,096 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities and shareholders’ equity | | $ | 50,750 | | | | | | | | | | | $ | 51,116 | | | | | | | | | | | $ | 50,738 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income/rate spread (FTE) | | | | | | $ | 461 | | | | 3.31 | | | | | | | $ | 467 | | | | 3.37 | | | | | | | $ | 446 | | | | 3.42 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| FTE adjustment | | | | | | $ | 1 | | | | | | | | | | | $ | 1 | | | | | | | | | | | $ | 1 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Impact of net noninterest-bearing sources of funds | | | | | | | | | | | 0.69 | | | | | | | | | | | | 0.59 | | | | | | | | | | | | 0.41 | |
| |
| Net interest margin (as a percentage of average earning assets) (FTE) | | | | | | | | | | | 4.00 | % | | | | | | | | | | | 3.96 | % | | | | | | | | | | | 3.83 | % |
| |
| (1) | | The average rate for investment securities available-for-sale was computed using average historical cost. |
-13-
CONSOLIDATED STATISTICAL DATA
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | |
| |
| | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | |
| (in millions, except per share data) | | 2005 | | | 2004 | | | 2004 | | | 2004 | | | 2004 | |
| |
| Commercial loans: | | | | | | | | | | | | | | | | | | | | |
| Floor plan | | $ | 2,668 | | | $ | 2,575 | | | $ | 2,270 | | | $ | 2,802 | | | $ | 2,797 | |
| Other | | | 20,112 | | | | 19,464 | | | | 18,876 | | | | 18,656 | | | | 18,704 | |
| |
| Total commercial loans | | | 22,780 | | | | 22,039 | | | | 21,146 | | | | 21,458 | | | | 21,501 | |
| Real estate construction loans: | | | | | | | | | | | | | | | | | | | | |
| Real estate construction business line | | | 2,451 | | | | 2,461 | | | | 2,641 | | | | 2,661 | | | | 2,628 | |
| Other | | | 584 | | | | 592 | | | | 635 | | | | 621 | | | | 615 | |
| |
| Total real estate construction loans | | | 3,035 | | | | 3,053 | | | | 3,276 | | | | 3,282 | | | | 3,243 | |
| Commercial mortgage loans: | | | | | | | | | | | | | | | | | | | | |
| Commercial real estate business line | | | 1,555 | | | | 1,556 | | | | 1,498 | | | | 1,656 | | | | 1,718 | |
| Other | | | 6,860 | | | | 6,680 | | | | 6,433 | | | | 6,424 | | | | 6,311 | |
| |
| Total commercial mortgage loans | | | 8,415 | | | | 8,236 | | | | 7,931 | | | | 8,080 | | | | 8,029 | |
| Residential mortgage loans | | | 1,335 | | | | 1,294 | | | | 1,263 | | | | 1,211 | | | | 1,210 | |
| Consumer loans: | | | | | | | | | | | | | | | | | | | | |
| Home equity | | | 1,797 | | | | 1,837 | | | | 1,815 | | | | 1,788 | | | | 1,657 | |
| Other consumer | | | 903 | | | | 914 | | | | 907 | | | | 884 | | | | 969 | |
| |
| Total consumer loans | | | 2,700 | | | | 2,751 | | | | 2,722 | | | | 2,672 | | | | 2,626 | |
| Lease financing | | | 1,262 | | | | 1,265 | | | | 1,260 | | | | 1,266 | | | | 1,268 | |
| International loans | | | 2,209 | | | | 2,205 | | | | 2,117 | | | | 2,130 | | | | 2,135 | |
| |
| Total loans | | $ | 41,736 | | | $ | 40,843 | | | $ | 39,715 | | | $ | 40,099 | | | $ | 40,012 | |
| |
| | | | | | | | | | | | | | | | | | | | | |
| Goodwill | | $ | 247 | | | $ | 247 | | | $ | 247 | | | $ | 247 | | | $ | 247 | |
| Core deposit intangible | | | — | | | | — | | | | — | | | | — | | | | 1 | |
| Other intangible assets | | | 1 | | | | 1 | | | | 1 | | | | 1 | | | | 1 | |
| Loan servicing rights | | | 19 | | | | 20 | | | | 20 | | | | 19 | | | | 18 | |
| Deferred mutual fund distribution costs | | | 7 | | | | 8 | | | | 9 | | | | 10 | | | | 11 | |
| Amortization of intangibles (quarterly) | | | — | | | | — | | | | — | | | | 1 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| Tier 1 common capital ratio* | | | 8.03 | % | | | 8.13 | % | | | 8.16 | % | | | 8.00 | % | | | 8.00 | % |
| Tier 1 risk-based capital ratio* | | | 8.65 | | | | 8.77 | | | | 8.81 | | | | 8.64 | | | | 8.64 | |
| Total risk-based capital ratio * | | | 12.45 | | | | 12.75 | | | | 13.06 | | | | 12.91 | | | | 12.60 | |
| Leverage ratio* | | | 10.51 | | | | 10.37 | | | | 10.28 | | | | 9.97 | | | | 10.15 | |
| | | | | | | | | | | | | | | | | | | | | |
| Book value per share | | $ | 29.81 | | | $ | 29.94 | | | $ | 29.52 | | | $ | 28.75 | | | $ | 29.41 | |
| | | | | | | | | | | | | | | | | | | | | |
| Market value per share for the quarter: | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 61.40 | | | $ | 63.80 | | | $ | 61.48 | | | $ | 56.99 | | | $ | 59.23 | |
| Low | | | 53.70 | | | | 57.81 | | | | 53.00 | | | | 50.45 | | | | 52.30 | |
| Close | | | 55.08 | | | | 61.02 | | | | 59.35 | | | | 54.88 | | | | 54.32 | |
| | | | | | | | | | | | | | | | | | | | | |
| Quarterly ratios: | | | | | | | | | | | | | | | | | | | | |
| Return on average common shareholders’ equity | | | 15.73 | % | | | 16.39 | % | | | 15.68 | % | | | 15.35 | % | | | 12.71 | % |
| Return on average assets | | | 1.57 | | | | 1.63 | | | | 1.55 | | | | 1.49 | | | | 1.28 | |
| Efficiency ratio | | | 55.70 | | | | 56.61 | | | | 56.08 | | | | 55.08 | | | | 55.84 | |
| | | | | | | | | | | | | | | | | | | | | |
| Number of banking offices | | | 375 | | | | 376 | | | | 364 | | | | 361 | | | | 362 | |
| | | | | | | | | | | | | | | | | | | | | |
| Number of employees — full time equivalent | | | 10,878 | | | | 10,968 | | | | 10,919 | | | | 11,111 | | | | 11,237 | |
| * | | March 31, 2005 ratios are estimated |
-14-
PARENT COMPANY ONLY BALANCE SHEETS
Comerica Incorporated
| | | | | | | | | | | | | |
| |
| | | March 31, | | | December 31, | | | March 31, | |
| (in millions, except share data) | | 2005 | | | 2004 | | | 2004 | |
| |
ASSETS | | | | | | | | | | | | |
| Cash and due from subsidiary bank | | $ | 5 | | | $ | 1 | | | $ | — | |
| Short-term investments with subsidiary bank | | | 286 | | | | 289 | | | | 227 | |
| Investment in subsidiaries, principally banks | | | 5,533 | | | | 5,585 | | | | 5,643 | |
| Premises and equipment | | | 3 | | | | 3 | | | | 3 | |
| Other assets | | | 290 | | | | 304 | | | | 309 | |
| |
| Total assets | | $ | 6,117 | | | $ | 6,182 | | | $ | 6,182 | |
| |
| | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | |
| Long-term debt | | $ | 814 | | | $ | 824 | | | $ | 839 | |
| Other liabilities | | | 273 | | | | 253 | | | | 250 | |
| |
| Total liabilities | | | 1,087 | | | | 1,077 | | | | 1,089 | |
| | | | | | | | | | | | | |
| Common stock — $5 par value: | | | | | | | | | | | | |
| Authorized - 325,000,000 shares | | | | | | | | | | | | |
| Issued - 178,735,252 shares at 3/31/05, 12/31/04 and 3/31/04 | | | 894 | | | | 894 | | | | 894 | |
| Capital surplus | | | 433 | | | | 421 | | | | 395 | |
| Accumulated other comprehensive income (loss) | | | (154 | ) | | | (69 | ) | | | 92 | |
| Retained earnings | | | 4,427 | | | | 4,331 | | | | 4,030 | |
| Less cost of common stock in treasury - 9,988,453 shares at 3/31/05, 8,259,328 shares at 12/31/04 and 5,576,560 shares at 3/31/04 | | | (570 | ) | | | (472 | ) | | | (318 | ) |
| |
| Total shareholders’ equity | | | 5,030 | | | | 5,105 | | | | 5,093 | |
| |
| Total liabilities and shareholders’ equity | | $ | 6,117 | | | $ | 6,182 | | | $ | 6,182 | |
| |
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, 2004 | | $ | 894 | | | $ | 384 | | | $ | 74 | | | $ | 3,973 | | | $ | (215 | ) | | $ | 5,110 | |
| Net income | | | — | | | | — | | | | — | | | | 162 | | | | — | | | | 162 | |
| Other comprehensive income, net of tax | | | — | | | | — | | | | 18 | | | | — | | | | — | | | | 18 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total comprehensive income | | | | | | | | | | | | | | | | | | | | | | | 180 | |
| Cash dividends declared on common stock ($0.52 per share) | | | — | | | | — | | | | — | | | | (90 | ) | | | — | | | | (90 | ) |
| Purchase of 2,376,593 shares of common stock | | | — | | | | — | | | | — | | | | — | | | | (133 | ) | | | (133 | ) |
| Net issuance of common stock under employee stock plans | | | — | | | | 5 | | | | — | | | | (15 | ) | | | 30 | | | | 20 | |
| Recognition of stock-based compensation expense | | | — | | | | 6 | | | | — | | | | — | | | | — | | | | 6 | |
| |
BALANCE AT MARCH 31, 2004 | | $ | 894 | | | $ | 395 | | | $ | 92 | | | $ | 4,030 | | | $ | (318 | ) | | $ | 5,093 | |
| |
BALANCE AT JANUARY 1, 2005 | | $ | 894 | | | $ | 421 | | | $ | (69 | ) | | $ | 4,331 | | | $ | (472 | ) | | $ | 5,105 | |
| Net income | | | — | | | | — | | | | — | | | | 199 | | | | — | | | | 199 | |
| Other comprehensive loss, net of tax | | | — | | | | — | | | | (85 | ) | | | — | | | | — | | | | (85 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total comprehensive income | | | | | | | | | | | | | | | | | | | | | | | 114 | |
| Cash dividends declared on common stock ($0.55 per share) | | | — | | | | — | | | | — | | | | (93 | ) | | | — | | | | (93 | ) |
| Purchase of 2,074,200 shares of common stock | | | — | | | | — | | | | — | | | | — | | | | (118 | ) | | | (118 | ) |
| Net issuance of common stock under employee stock plans | | | — | | | | 3 | | | | — | | | | (10 | ) | | | 20 | | | | 13 | |
| Recognition of stock-based compensation expense | | | — | | | | 9 | | | | — | | | | — | | | | — | | | | 9 | |
| |
BALANCE AT MARCH 31, 2005 | | $ | 894 | | | $ | 433 | | | $ | (154 | ) | | $ | 4,427 | | | $ | (570 | ) | | $ | 5,030 | |
| |
-15-
BUSINESS SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| (dollar amounts in millions) | | Business Bank | | | | Small Business & Personal Financial Services | | | | Wealth & Institutional Management | |
| | | March 31, | | | December 31, | | | March 31, | | | | March 31, | | | December 31, | | | March 31, | | | | March 31, | | | December 31, | | | March 31, | |
| Three Months Ended | | 2005 | | | 2004 | | | 2004 | | | | 2005 | | | 2004 | | | 2004 | | | | 2005 | | | 2004 | | | 2004 | |
| | | | | | | |
| Earnings summary: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income (expense) (FTE) | | $ | 337 | | | $ | 344 | | | $ | 348 | | | | $ | 146 | | | $ | 149 | | | $ | 143 | | | | $ | 36 | | | $ | 38 | | | $ | 36 | |
| Provision for loan losses | | | 4 | | | | 13 | | | | 21 | | | | | 2 | | | | 4 | | | | 4 | | | | | (2 | ) | | | 2 | | | | (1 | ) |
| Noninterest income | | | 69 | | | | 66 | | | | 67 | | | | | 49 | | | | 50 | | | | 53 | | | | | 80 | | | | 71 | | | | 77 | |
| Noninterest expenses | | | 141 | | | | 149 | | | | 145 | | | | | 126 | | | | 132 | | | | 126 | | | | | 80 | | | | 88 | | | | 84 | |
| Provision (benefit) for income taxes (FTE) | | | 86 | | | | 88 | | | | 87 | | | | | 23 | | | | 23 | | | | 24 | | | | | 13 | | | | 7 | | | | 11 | |
| | | | | | | | | |
| Net income (loss) | | $ | 175 | | | $ | 160 | | | $ | 162 | | | | $ | 44 | | | $ | 40 | | | $ | 42 | | | | $ | 25 | | | $ | 12 | | | $ | 19 | |
| | | | | | | | | |
| Net charge-offs | | $ | 29 | | | $ | 27 | | | $ | 65 | | | | $ | 4 | | | $ | 6 | | | $ | 5 | | | | $ | 5 | | | $ | 2 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 34,210 | | | $ | 33,259 | | | $ | 32,738 | | | | $ | 6,435 | | | $ | 6,359 | | | $ | 6,567 | | | | $ | 3,628 | | | $ | 3,602 | | | $ | 3,178 | |
| Loans | | | 32,970 | | | | 32,049 | | | | 31,665 | | | | | 5,778 | | | | 5,703 | | | | 5,823 | | | | | 3,368 | | | | 3,339 | | | | 2,929 | |
| Deposits | | | 19,877 | | | | 20,184 | | | | 18,773 | | | | | 16,796 | | | | 16,883 | | | | 16,611 | | | | | 2,451 | | | | 2,478 | | | | 2,529 | |
| Liabilities | | | 20,682 | | | | 20,937 | | | | 19,385 | | | | | 16,792 | | | | 16,877 | | | | 16,603 | | | | | 2,457 | | | | 2,484 | | | | 2,538 | |
| Attributed equity | | | 2,476 | | | | 2,495 | | | | 2,474 | | | | | 779 | | | | 782 | | | | 797 | | | | | 417 | | | | 429 | | | | 403 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets (1) | | | 2.05 | % | | | 1.93 | % | | | 1.98 | % | | | | 0.99 | % | | | 0.91 | % | | | 0.97 | % | | | | 2.79 | % | | | 1.37 | % | | | 2.38 | % |
| Return on average attributed equity | | | 28.28 | | | | 25.72 | | | | 26.17 | | | | | 22.29 | | | | 20.46 | | | | 21.23 | | | | | 24.26 | | | | 11.51 | | | | 18.74 | |
| Net interest margin (2) | | | 4.12 | | | | 4.26 | | | | 4.40 | | | | | 3.52 | | | | 3.51 | | | | 3.47 | | | | | 4.34 | | | | 4.48 | | | | 4.89 | |
| Efficiency ratio | | | 34.64 | | | | 36.42 | | | | 35.15 | | | | | 64.71 | | | | 66.33 | | | | 64.11 | | | | | 68.60 | | | | 80.61 | | | | 73.92 | |
| | | | | | | |
| | | Finance | | | | Other | | | | Total | |
| | | March 31, | | December 31, | | March 31, | | | March 31, | | December 31, | | March 31, | | | March 31, | | December 31, | | March 31, |
Three Months Ended | | | 2005 | | | | 2004 | | | | 2004 | | | | | 2005 | | | | 2004 | | | | 2004 | | | | | 2005 | | | | 2004 | | | | 2004 | |
| | | | | | | |
| Earnings summary: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income (expense) (FTE) | | $ | (59 | ) | | $ | (64 | ) | | $ | (86 | ) | | | $ | 1 | | | $ | — | | | $ | 5 | | | | $ | 461 | | | $ | 467 | | | $ | 446 | |
| Provision for loan losses | | | — | | | | — | | | | — | | | | | (3 | ) | | | (40 | ) | | | 41 | | | | | 1 | | | | (21 | ) | | | 65 | |
| Noninterest income | | | 11 | | | | 10 | | | | 19 | | | | | 1 | | | | 6 | | | | 4 | | | | | 210 | | | | 203 | | | | 220 | |
| Noninterest expenses | | | 1 | | | | 1 | | | | — | | | | | 26 | | | | 10 | | | | 14 | | | | | 374 | | | | 380 | | | | 369 | |
| Provision (benefit) for income taxes (FTE) | | | (19 | ) | | | (19 | ) | | | (28 | ) | | | | (6 | ) | | | 5 | | | | (24 | ) | | | | 97 | | | | 104 | | | | 70 | |
| | | | | | | | | |
| Net income (loss) | | $ | (30 | ) | | $ | (36 | ) | | $ | (39 | ) | | | $ | (15 | ) | | $ | 31 | | | $ | (22 | ) | | | $ | 199 | | | $ | 207 | | | $ | 162 | |
| | | | | | | | | |
| Net charge-offs | | $ | — | | | $ | — | | | $ | — | | | | $ | — | | | $ | — | | | $ | — | | | | $ | 38 | | | $ | 35 | | | $ | 70 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 5,518 | | | $ | 6,999 | | | $ | 7,484 | | | | $ | 959 | | | $ | 897 | | | $ | 771 | | | | $ | 50,750 | | | $ | 51,116 | | | $ | 50,738 | |
| Loans | | | (7 | ) | | | (5 | ) | | | (7 | ) | | | | 46 | | | | 43 | | | | 17 | | | | | 42,155 | | | | 41,129 | | | | 40,427 | |
| Deposits | | | 612 | | | | 729 | | | | 1,677 | | | | | 46 | | | | 53 | | | | 15 | | | | | 39,782 | | | | 40,327 | | | | 39,605 | |
| Liabilities | | | 5,390 | | | | 5,426 | | | | 6,849 | | | | | 357 | | | | 315 | | | | 267 | | | | | 45,678 | | | | 46,039 | | | | 45,642 | |
| Attributed equity | | | 538 | | | | 612 | | | | 811 | | | | | 862 | | | | 759 | | | | 611 | | | | | 5,072 | | | | 5,077 | | | | 5,096 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets (1) | | | N/M | | | | N/M | | | | N/M | | | | | N/M | | | | N/M | | | | N/M | | | | | 1.57 | % | | | 1.63 | % | | | 1.28 | % |
| Return on average attributed equity | | | N/M | | | | N/M | | | | N/M | | | | | N/M | | | | N/M | | | | N/M | | | | | 15.73 | | | | 16.39 | | | | 12.71 | |
| Net interest margin (2) | | | N/M | | | | N/M | | | | N/M | | | | | N/M | | | | N/M | | | | N/M | | | | | 4.00 | | | | 3.96 | | | | 3.83 | |
| Efficiency ratio | | | N/M | | | | N/M | | | | N/M | | | | | N/M | | | | N/M | | | | N/M | | | | | 55.70 | | | | 56.61 | | | | 55.84 | |
| | | | | | | |
| (1) | | Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity. |
| |
| (2) | | Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds. |
| |
| N/M — Not Meaningful |
-16-
MARKET SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| (dollar amounts in millions) | | Midwest & Other Markets | | | | Western | | | | Texas | |
| | | March 31, | | | December 31, | | | March 31, | | | | March 31, | | | December 31, | | | March 31, | | | | March 31, | | | December 31, | | | March 31, | |
| Three Months Ended | | 2005 | | | 2004 | | | 2004 | | | | 2005 | | | 2004 | | | 2004 | | | | 2005 | | | 2004 | | | 2004 | |
| | | | | | | |
| Earnings summary: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income (expense) (FTE) | | $ | 264 | | | $ | 270 | | | $ | 270 | | | | $ | 186 | | | $ | 190 | | | $ | 188 | | | | $ | 59 | | | $ | 61 | | | $ | 60 | |
| Provision for loan losses | | | 2 | | | | 4 | | | | (9 | ) | | | | (3 | ) | | | 11 | | | | 30 | | | | | 4 | | | | 3 | | | | 3 | |
| Noninterest income | | | 147 | | | | 137 | | | | 143 | | | | | 30 | | | | 29 | | | | 31 | | | | | 18 | | | | 18 | | | | 19 | |
| Noninterest expenses | | | 205 | | | | 225 | | | | 215 | | | | | 91 | | | | 93 | | | | 89 | | | | | 43 | | | | 45 | | | | 44 | |
| Provision (benefit) for income taxes (FTE) | | | 63 | | | | 57 | | | | 67 | | | | | 48 | | | | 48 | | | | 42 | | | | | 10 | | | | 11 | | | | 11 | |
| | | | | | | | | |
| Net income (loss) | | $ | 141 | | | $ | 121 | | | $ | 140 | | | | $ | 80 | | | $ | 67 | | | $ | 58 | | | | $ | 20 | | | $ | 20 | | | $ | 21 | |
| | | | | | | | | |
| Net charge-offs | | $ | 17 | | | $ | 13 | | | $ | 42 | | | | $ | 9 | | | $ | 19 | | | $ | 25 | | | | $ | 8 | | | $ | 3 | | | $ | 3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 24,621 | | | $ | 24,192 | | | $ | 24,320 | | | | $ | 13,252 | | | $ | 12,778 | | | $ | 12,227 | | | | $ | 5,003 | | | $ | 4,861 | | | $ | 4,677 | |
| Loans | | | 23,270 | | | | 22,905 | | | | 23,119 | | | | | 12,656 | | | | 12,122 | | | | 11,540 | | | | | 4,807 | | | | 4,689 | | | | 4,508 | |
| Deposits | | | 18,858 | | | | 19,112 | | | | 19,083 | | | | | 16,303 | | | | 16,363 | | | | 14,880 | | | | | 3,674 | | | | 3,796 | | | | 3,761 | |
| Liabilities | | | 19,628 | | | | 19,848 | | | | 19,707 | | | | | 16,344 | | | | 16,387 | | | | 14,878 | | | | | 3,673 | | | | 3,792 | | | | 3,753 | |
| Attributed equity | | | 2,131 | | | | 2,167 | | | | 2,129 | | | | | 1,025 | | | | 1,022 | | | | 1,038 | | | | | 449 | | | | 449 | | | | 445 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets (1) | | | 2.28 | % | | | 2.01 | % | | | 2.30 | % | | | | 1.84 | % | | | 1.55 | % | | | 1.46 | % | | | | 1.60 | % | | | 1.61 | % | | | 1.78 | % |
| Return on average attributed equity | | | 26.39 | | | | 22.47 | | | | 26.32 | | | | | 31.15 | | | | 26.47 | | | | 22.45 | | | | | 17.82 | | | | 17.40 | | | | 18.72 | |
| Net interest margin (2) | | | 4.56 | | | | 4.66 | | | | 4.66 | | | | | 4.62 | | | | 4.62 | | | | 5.09 | | | | | 4.93 | | | | 5.15 | | | | 5.34 | |
| Efficiency ratio | | | 49.86 | | | | 55.18 | | | | 52.24 | | | | | 42.33 | | | | 42.38 | | | | 40.77 | | | | | 56.05 | | | | 57.64 | | | | 55.56 | |
| | | | | | | |
| | | Florida | | | | Finance & Other Businesses | | | | Total | |
| | | March 31, | | | December 31, | | | March 31, | | | | March 31, | | | December 31, | | | March 31, | | | | March 31, | | | December 31, | | | March 31, | |
Three Months Ended | | 2005 | | | 2004 | | | 2004 | | | | 2005 | | | 2004 | | | 2004 | | | | 2005 | | | 2004 | | | 2004 | |
| | | | | | | |
| Earnings summary: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income (expense) (FTE) | | $ | 10 | | | $ | 10 | | | $ | 9 | | | | $ | (58 | ) | | $ | (64 | ) | | $ | (81 | ) | | | $ | 461 | | | $ | 467 | | | $ | 446 | |
| Provision for loan losses | | | 2 | | | | 1 | | | | 1 | | | | | (4 | ) | | | (40 | ) | | | 40 | | | | | 1 | | | | (21 | ) | | | 65 | |
| Noninterest income | | | 4 | | | | 4 | | | | 4 | | | | | 11 | | | | 15 | | | | 23 | | | | | 210 | | | | 203 | | | | 220 | |
| Noninterest expenses | | | 7 | | | | 7 | | | | 6 | | | | | 28 | | | | 10 | | | | 15 | | | | | 374 | | | | 380 | | | | 369 | |
| Provision (benefit) for income taxes (FTE) | | | 2 | | | | 2 | | | | 2 | | | | | (26 | ) | | | (14 | ) | | | (52 | ) | | | | 97 | | | | 104 | | | | 70 | |
| | | | | | | | | |
| Net income (loss) | | $ | 3 | | | $ | 4 | | | $ | 4 | | | | $ | (45 | ) | | $ | (5 | ) | | $ | (61 | ) | | | $ | 199 | | | $ | 207 | | | $ | 162 | |
| | | | | | | | | |
| Net charge-offs | | $ | 4 | | | $ | — | | | $ | — | | | | $ | — | | | $ | — | | | $ | — | | | | $ | 38 | | | $ | 35 | | | $ | 70 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 1,396 | | | $ | 1,388 | | | $ | 1,260 | | | | $ | 6,478 | | | $ | 7,897 | | | $ | 8,254 | | | | $ | 50,750 | | | $ | 51,116 | | | $ | 50,738 | |
| Loans | | | 1,383 | | | | 1,375 | | | | 1,251 | | | | | 39 | | | | 38 | | | | 9 | | | | | 42,155 | | | | 41,129 | | | | 40,427 | |
| Deposits | | | 289 | | | | 274 | | | | 189 | | | | | 658 | | | | 782 | | | | 1,692 | | | | | 39,782 | | | | 40,327 | | | | 39,605 | |
| Liabilities | | | 287 | | | | 272 | | | | 189 | | | | | 5,746 | | | | 5,740 | | | | 7,115 | | | | | 45,678 | | | | 46,039 | | | | 45,642 | |
| Attributed equity | | | 67 | | | | 67 | | | | 62 | | | | | 1,400 | | | | 1,372 | | | | 1,422 | | | | | 5,072 | | | | 5,077 | | | | 5,096 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets (1) | | | 0.95 | % | | | 1.11 | % | | | 1.22 | % | | | | N/M | | | | N/M | | | | N/M | | | | | 1.57 | % | | | 1.63 | % | | | 1.28 | % |
| Return on average attributed equity | | | 19.76 | | | | 23.06 | | | | 25.05 | | | | | N/M | | | | N/M | | | | N/M | | | | | 15.73 | | | | 16.39 | | | | 12.71 | |
| Net interest margin (2) | | | 2.99 | | | | 2.94 | | | | 2.87 | | | | | N/M | | | | N/M | | | | N/M | | | | | 4.00 | | | | 3.96 | | | | 3.83 | |
| Efficiency ratio | | | 52.81 | | | | 48.28 | | | | 49.68 | | | | | N/M | | | | N/M | | | | N/M | | | | | 55.70 | | | | 56.61 | | | | 55.84 | |
| | | | | | | |
| (1) | | Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity. |
| |
| (2) | | Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds. |
| |
| N/M — Not Meaningful |
-17-
