Exhibit 99.1
COMERICA REPORTS THIRD QUARTER 2005 EARNINGS
DETROIT/October 19, 2005— Comerica Incorporated (NYSE: CMA) today reported third quarter 2005 earnings of $238 million, or $1.41 per diluted share, compared to $217 million, or $1.28 per diluted share, for the second quarter 2005 and $196 million, or $1.13 per diluted share, for the third quarter 2004.
| (dollar amounts in millions) | 3rdQtr ‘05 | 2ndQtr ‘05 | 3rdQtr ‘04 | |||||||||
| Diluted EPS | $ | 1.41 | $ | 1.28 | $ | 1.13 | ||||||
| Net Interest Income | $ | 512 | $ | 483 | $ | 451 | ||||||
| Net Interest Margin | 4.15 | % | 4.09 | % | 3.86 | % | ||||||
| Provision for Loan Losses | $ | (30 | ) | $ | 2 | $ | — | |||||
| Noninterest Income | $ | 232 | $ | 219 | $ | 206 | ||||||
| Noninterest Expenses | $ | 422 | $ | 383 | $ | 372 | ||||||
| Net Income | $ | 238 | $ | 217 | $ | 196 | ||||||
| Return on Equity | 18.59 | % | 16.99 | % | 15.68 | % | ||||||
“Comerica’s third quarter results demonstrate solid financial performance,“ said Ralph W. Babb Jr., chairman and chief executive officer. “They also reflect our continuing investments in people, branches and technology, which are aimed at improving the balance of our business mix.“
Net Interest Income
Net interest income was $512 million for the third quarter 2005, compared to $483 million for the second quarter 2005 and $451 million for the third quarter 2004. In the third quarter 2005, the Corporation changed its warrant accounting, and recorded an adjustment to reflect its portfolio of warrants for non-marketable equity securities at fair value. Since a majority of these warrants were obtained as part of the loan origination process, the adjustment that resulted from the accounting change increased net interest income by $20 million in the third quarter 2005. The $29 million increase in net interest income from the second quarter 2005 resulted from the warrant accounting change discussed above, the spread improvement provided by non-interest bearing deposits in a rising interest rate environment, and the impact of one more day in the third quarter 2005. Average earning assets of $49.1 billion for the third quarter 2005 increased $1.7 billion from the second quarter 2005, primarily as a result of a $1.4 billion, or 3 percent, increase in average loans to $44.6 billion for the third quarter 2005. The Financial Services Division contributed $1.2 billion of the increase in average loans for the third quarter 2005. Average deposits of $41.3 billion for the third quarter 2005 increased $1.3 billion, or 3 percent, from the second quarter 2005. The Financial Services Division contributed $491 million of the increase in average deposits for the third quarter 2005. Average short-term borrowings increased $622 million in the third quarter 2005, when compared to the prior quarter.
The net interest margin increased six basis points from the second quarter 2005 to 4.15 percent in the third quarter 2005. The change in warrant accounting added 16 basis points to the net interest margin in the third quarter 2005. The net interest margin was also positively impacted by a greater contribution from noninterest-bearing deposits in a higher rate environment. Partially offsetting these increases were higher levels of low rate loans provided to customers of the Corporation’s Financial Services Division.
Noninterest Income
Noninterest income was $232 million for the third quarter 2005, compared to $219 million for the second quarter 2005 and $206 million for the third quarter 2004. Included in other noninterest income in the third quarter 2005 was income (net of write-downs) from unconsolidated venture capital and private equity investments of $13 million, compared to write-downs (net of income distributions) of $5 million in the second quarter 2005. Also included in other noninterest income in the third quarter 2005 were risk management hedge ineffectiveness losses of $3 million, compared to $5 million of gains in the second quarter 2005.
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COMERICA REPORTS THIRD QUARTER 2005 EARNINGS — 2
Noninterest Expenses
Noninterest expenses were $422 million for the third quarter 2005, compared to $383 million for the second quarter 2005 and $372 million for the third quarter 2004. Salaries expense increased $12 million in the third quarter 2005, compared to the second quarter 2005, primarily from increases in business unit incentives, including a $4 million accrual related to the warrant accounting change discussed above. Customer services expense was $29 million in the third quarter 2005, compared to $10 million for the second quarter 2005. Customer services expense varies from period to period as a result of changes in the level of noninterest-bearing deposits in the Corporation’s Financial Services Division and the earnings credit allowances provided on these deposits.
Credit Quality
| (dollar amounts in millions) | 3rdQtr ‘05 | 2ndQtr ‘05 | 3rdQtr ‘04 | |||||||||
| Net Charge-offs | $ | 21 | $ | 29 | $ | 33 | ||||||
| Net Charge-offs/Average Total Loans | 0.18 | % | 0.27 | % | 0.33 | % | ||||||
| Provision for Loan Losses | $ | (30 | ) | $ | 2 | $ | — | |||||
| Nonperforming Assets (NPAs) | $ | 220 | $ | 246 | $ | 388 | ||||||
| NPAs/Total Loans, Other Real Estate & Nonaccrual Debt Securities | 0.52 | % | 0.57 | % | 0.98 | % | ||||||
| Allowance for Loan Losses | $ | 558 | $ | 609 | $ | 729 | ||||||
| Allowance for Loan Losses/Total Loans | 1.33 | % | 1.41 | % | 1.83 | % | ||||||
| Allowance for Credit Losses on Lending-related Commitments* | $ | 14 | $ | 15 | $ | 24 | ||||||
| * Included in “Accrued expenses and other liabilities” on the consolidated balance sheets. | ||
During the third quarter 2005, $81 million of loans greater than $2 million were transferred to nonaccrual status, an increase of $34 million from the second quarter 2005. Of the loans transferred to nonaccrual during the third quarter 2005, $44 million were in the airline industry. Nonperforming assets were $220 million at September 30, 2005, a decrease of $26 million from June 30, 2005.
“Continued improvement in credit quality metrics in the third quarter 2005 resulted in a $51 million decline in the allowance for loan losses from the second quarter,” said Babb. “Nonperforming assets and net charge-offs continued to improve from already low levels.”
Balance Sheet and Capital Management
Total assets and common shareholders’ equity were $54.3 billion and $5.1 billion, respectively, at September 30, 2005, compared to $54.7 billion and $5.1 billion, respectively, at June 30, 2005. There were approximately 165 million shares outstanding at September 30, 2005, compared to approximately 167 million shares outstanding at June 30, 2005. In the third quarter 2005, approximately 2.4 million shares were repurchased in the open market for $147 million. Comerica’s third quarter 2005 estimated tier 1 common, tier 1 and total risk-based capital ratios were 8.00 percent, 8.62 percent and 11.99 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 THIRD QUARTER 2005 EARNINGS — 3
The following table presents net income (loss) by business segment.
| (dollar amounts in millions) | 3rdQtr ‘05 | 2ndQtr ‘05 | 3rdQtr ‘04 | |||||||||||||||||||||
| Business Bank | $ | 186 | 75 | % | $ | 163 | 71 | % | $ | 173 | 70 | % | ||||||||||||
| Small Business & Personal Financial Services | 40 | 16 | 49 | 21 | 48 | 20 | ||||||||||||||||||
| Wealth & Institutional Management | 23 | 9 | 17 | 8 | 25 | 10 | ||||||||||||||||||
| 249 | 100 | % | 229 | 100 | % | 246 | 100 | % | ||||||||||||||||
| Finance | (20 | ) | (18 | ) | (40 | ) | ||||||||||||||||||
| Other* | 9 | 6 | (10 | ) | ||||||||||||||||||||
| Total | $ | 238 | $ | 217 | $ | 196 | ||||||||||||||||||
| * Includes items not directly associated with the major business segments or the Finance Division | ||
Net income for the Business Bank was $186 million for the third quarter 2005, compared to $163 million for the second quarter 2005. Net interest income (FTE) of $367 million in the third quarter 2005 increased $17 million from the second quarter 2005. Third quarter 2005 net interest income (FTE) includes a $20 million adjustment resulting from the warrant accounting change discussed above, partially offset by higher levels of low rate loans in the Financial Services Division. The provision for loan losses decreased $41 million, to a negative $23 million in the third quarter 2005, compared to $18 million in the second quarter 2005, due to improvements in credit quality and an increase in recoveries. Average loans of $35.3 billion in the third quarter 2005 increased $1.2 billion, or 3 percent, compared to the second quarter 2005, primarily due to a $1.2 billion increase in loans in the Financial Services Division. Average deposits of $20.9 billion in the third quarter 2005 increased $525 million, or 3 percent, compared to the second quarter 2005, primarily due to higher deposits in the Financial Services Division. Third quarter 2005 noninterest expenses of $184 million increased $25 million from the second quarter 2005, primarily due to a $19 million increase in customer service expenses in the Financial Services Division and $4 million in incentive compensation accrual related to the warrant accounting change discussed above.
Net income for Small Business & Personal Financial Services was $40 million for the third quarter 2005, compared to $49 million for the second quarter 2005. Net interest income (FTE) of $153 million in the third quarter 2005 increased $1 million, compared to the second quarter 2005. The provision for loan losses increased $9 million, to $7 million in the third quarter 2005, compared to a negative $2 million in the second quarter 2005. Average loans of $5.9 billion in the third quarter 2005 increased $94 million, or 2 percent, over the second quarter 2005. Average deposits were $16.8 billion in the third quarter 2005, compared to $16.9 billion in the second quarter 2005.
Net income for Wealth & Institutional Management was $23 million for the third quarter 2005, compared to $17 million for the second quarter 2005. Net interest income (FTE) of $38 million in the third quarter 2005 increased $1 million from the second quarter 2005. Average loans were $3.4 billion in the third quarter 2005, compared to $3.3 billion in the second quarter 2005. Average deposits were $2.6 billion in the third quarter 2005, compared to $2.4 billion in the second quarter 2005. Noninterest income of $83 million in the third quarter 2005 increased $4 million from the second quarter 2005, primarily due to an increase in investment advisory revenue.
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COMERICA REPORTS THIRD QUARTER 2005 EARNINGS – 4
Geographic Market Segments
Comerica also provides market segment results for four primary geographic markets: 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.
| (dollar amounts in millions) | 3rdQtr ‘05 | 2ndQtr ‘05 | 3rdQtr ‘04 | |||||||||||||||||||||
| Midwest & Other Markets | $ | 134 | 54 | % | $ | 111 | 48 | % | $ | 121 | 49 | % | ||||||||||||
| Western | 88 | 35 | 85 | 37 | 91 | 37 | ||||||||||||||||||
| Texas | 20 | 8 | 29 | 13 | 29 | 12 | ||||||||||||||||||
| Florida | 7 | 3 | 4 | 2 | 5 | 2 | ||||||||||||||||||
| 249 | 100 | % | 229 | 100 | % | 246 | 100 | % | ||||||||||||||||
| Finance & Other | (11 | ) | (12 | ) | (50 | ) | ||||||||||||||||||
| Total | $ | 238 | $ | 217 | $ | 196 | ||||||||||||||||||
Net income for the Midwest & Other markets was $134 million in the third quarter 2005, compared to $111 million in the second quarter 2005. Net interest income (FTE) of $272 million in the third quarter 2005 was unchanged, compared to the second quarter 2005. The provision for loan losses declined $30 million in the third quarter 2005, compared to the second quarter 2005, due to improvements in credit quality. Average loans were $23.8 billion in the third quarter 2005, compared to $23.9 billion in the second quarter 2005. Average deposits of $18.9 billion in the third quarter 2005 remained flat, compared to the second quarter 2005.
Net income for the Western market was $88 million for the third quarter 2005, compared to $85 million for the second quarter 2005. Net interest income (FTE) of $214 million in the third quarter 2005 increased $18 million from the second quarter 2005. Third quarter 2005 net interest income (FTE) includes a $20 million adjustment resulting from the warrant accounting change discussed above, partially offset by higher levels of low rate loans in the Financial Services Division. The provision for loan losses declined $13 million in the third quarter 2005, compared to the second quarter 2005, due to improvements in credit quality. Average loans of $14.2 billion in the third quarter 2005 increased $1.3 billion, compared to the second quarter 2005, primarily due to a $1.2 billion increase in loans in the Financial Service Division. Average deposits of $17.4 billion in the third quarter 2005 increased $638 million, primarily due to higher deposits in the Financial Services Division. Third quarter 2005 noninterest expenses increased $24 million to $122 million, compared to the second quarter 2005, primarily due to a $19 million increase in customer service expenses in the Financial Services Division and $4 million in incentive compensation accrual related to the warrant accounting change discussed above.
Net income for the Texas market was $20 million for the third quarter 2005, compared to $29 million for the second quarter 2005. Net interest income (FTE) of $61 million in the third quarter 2005 increased $1 million from the second quarter 2005. The provision for loan losses increased $12 million, to $2 million in the third quarter 2005, compared to a negative $10 million in the second quarter 2005. Average loans of $5.1 billion increased $125 million, or 3 percent, compared to the second quarter 2005. Average deposits were $3.6 billion in the third quarter 2005, compared to $3.7 billion in the second quarter 2005.
Net income for the Florida market was $7 million for the third quarter 2005, compared to $4 million for the second quarter 2005.
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COMERICA REPORTS THIRD QUARTER 2005 EARNINGS – 5
Conference Call and Webcast
Comerica will host a conference call to review third quarter 2005 financial results at 8 a.m. ET Wednesday, October 19, 2005. Interested parties may access the conference call by calling (706) 679-5261 (event ID No. 9528943). The call and supplemental financial information can also be accessed on the Internet at www.comerica.com. A replay of the conference call will be available approximately two hours following the call through Saturday, November 19, 2005. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 9528943). 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.
Forward-looking Statements
Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “believes,” “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 Comerica or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of Comerica’s management based on information known to Comerica’s management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica’s management for future or past operations, products or services, and forecasts of Comerica’s revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability. Such statements reflect the view of Comerica’s management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Comerica’s actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in the pace of an economic recovery and related changes in employment levels, the effects of war and other armed conflicts or acts of terrorism, the effects of natural disasters including, but not limited to, hurricanes, tornadoes, earthquakes and floods, the implementation of Comerica’s strategies and business models, management’s ability to maintain and expand customer relationships, management’s ability to retain key officers and employees, 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 | Paul E. Burdiss | |||
| (313) 222-4881 | (313) 222-2840 | |||
| Wayne J. Mielke | Paul Jaremski | |||
| (313) 222-4732 | (313) 222-6317 |
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
Comerica Incorporated and Subsidiaries
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | |||||||||||||||||
| (in millions, except per share data) | 2005 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||
PER SHARE AND COMMON STOCK DATA | ||||||||||||||||||||
| Diluted net income | $ | 1.41 | $ | 1.28 | $ | 1.13 | $ | 3.85 | $ | 3.15 | ||||||||||
| Cash dividends declared | 0.55 | 0.55 | 0.52 | 1.65 | 1.56 | |||||||||||||||
| Common shareholders’ equity (at period end) | 30.81 | 30.60 | 29.52 | |||||||||||||||||
| Average diluted shares (in thousands) | 168,387 | 169,608 | 172,864 | 169,687 | 174,346 | |||||||||||||||
KEY RATIOS | ||||||||||||||||||||
| Return on average common shareholders’ equity | 18.59 | % | 16.99 | % | 15.68 | % | 17.11 | % | 14.57 | % | ||||||||||
| Return on average assets | 1.78 | 1.68 | 1.55 | 1.68 | 1.44 | |||||||||||||||
| Average common shareholders’ equity as a percentage of average assets | 9.57 | 9.88 | 9.91 | 9.81 | 9.88 | |||||||||||||||
| Tier 1 common capital ratio * | 8.00 | 7.88 | 8.16 | |||||||||||||||||
| Tier 1 risk-based capital ratio * | 8.62 | 8.49 | 8.81 | |||||||||||||||||
| Total risk-based capital ratio * | 11.99 | 12.08 | 13.06 | |||||||||||||||||
| Leverage ratio * | 10.10 | 10.36 | 10.28 | |||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||
| Commercial loans | $ | 25,230 | $ | 24,122 | $ | 22,096 | $ | 24,207 | $ | 21,997 | ||||||||||
| Real estate construction loans | 3,202 | 3,101 | 3,273 | 3,119 | 3,293 | |||||||||||||||
| Commercial mortgage loans | 8,631 | 8,513 | 7,951 | 8,488 | 7,989 | |||||||||||||||
| Residential mortgage loans | 1,418 | 1,357 | 1,239 | 1,362 | 1,225 | |||||||||||||||
| Consumer loans | 2,703 | 2,673 | 2,671 | 2,703 | 2,650 | |||||||||||||||
| Lease financing | 1,300 | 1,283 | 1,266 | 1,281 | 1,276 | |||||||||||||||
| International loans | 2,098 | 2,185 | 2,149 | 2,173 | 2,171 | |||||||||||||||
| Total loans | $ | 44,582 | $ | 43,234 | $ | 40,645 | $ | 43,333 | $ | 40,601 | ||||||||||
| Earning assets | 49,066 | 47,412 | 46,426 | 47,716 | 46,960 | |||||||||||||||
| Total assets | 53,462 | 51,635 | 50,348 | 51,959 | 50,891 | |||||||||||||||
| Interest-bearing deposits | 25,540 | 25,005 | 25,722 | 25,402 | 26,173 | |||||||||||||||
| Total interest-bearing liabilities | 31,488 | 30,501 | 30,435 | 30,794 | 31,055 | |||||||||||||||
| Noninterest-bearing deposits | 15,734 | 14,995 | 14,012 | 14,955 | 13,910 | |||||||||||||||
| Common shareholders’ equity | 5,116 | 5,100 | 4,990 | 5,096 | 5,029 | |||||||||||||||
NET INTEREST INCOME | ||||||||||||||||||||
| Net interest income (fully taxable equivalent basis) | $ | 513 | $ | 484 | $ | 452 | $ | 1,458 | $ | 1,346 | ||||||||||
| Fully taxable equivalent adjustment | 1 | 1 | 1 | 3 | 2 | |||||||||||||||
| Net interest margin | 4.15 | % | 4.09 | % | 3.86 | % | 4.08 | % | 3.82 | % | ||||||||||
CREDIT QUALITY | ||||||||||||||||||||
| Nonaccrual loans | $ | 186 | $ | 212 | $ | 361 | ||||||||||||||
| Other real estate | 34 | 34 | 27 | |||||||||||||||||
| Total nonperforming assets | 220 | 246 | 388 | |||||||||||||||||
| Loans 90 days past due and still accruing | 14 | 24 | 20 | |||||||||||||||||
| Gross charge-offs | 47 | 43 | 53 | $ | 136 | $ | 213 | |||||||||||||
| Recoveries | 26 | 14 | 20 | 48 | 54 | |||||||||||||||
| Net charge-offs | 21 | 29 | 33 | 88 | 159 | |||||||||||||||
| Allowance for loan losses as a percentage of total loans | 1.33 | % | 1.41 | % | 1.83 | % | ||||||||||||||
| Net loans charged off as a percentage of average total loans | 0.18 | 0.27 | 0.33 | 0.27 | % | 0.52 | % | |||||||||||||
| Nonperforming assets as a percentage of total loans, other real estate and nonaccrual debt securities | 0.52 | 0.57 | 0.98 | |||||||||||||||||
| Allowance for loan losses as a percentage of total nonperforming assets | 253 | 248 | 188 | |||||||||||||||||
ADDITIONAL DATA | ||||||||||||||||||||
| Goodwill | $ | 247 | $ | 247 | $ | 247 | ||||||||||||||
| Other intangibles | 1 | 1 | 1 | |||||||||||||||||
| Loan servicing rights | 19 | 19 | 20 | |||||||||||||||||
| Deferred mutual fund distribution costs | 7 | 7 | 9 | |||||||||||||||||
| Amortization of intangibles | — | — | — | $ | — | $ | 1 | |||||||||||||
| * September 30, 2005 ratios are estimated | ||
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CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
Comerica Incorporated and Subsidiaries
| September 30, | June 30, | December 31, | September 30, | |||||||||||||
| (in millions, except share data) | 2005 | 2005 | 2004 | 2004 | ||||||||||||
ASSETS | ||||||||||||||||
| Cash and due from banks | $ | 1,795 | $ | 1,687 | $ | 1,139 | $ | 1,560 | ||||||||
| Short-term investments | 3,619 | 3,402 | 3,230 | 5,055 | ||||||||||||
| Investment securities available-for-sale | 4,088 | 3,947 | 3,943 | 4,198 | ||||||||||||
| Commercial loans | 22,754 | 23,690 | 22,039 | 21,146 | ||||||||||||
| Real estate construction loans | 3,289 | 3,168 | 3,053 | 3,276 | ||||||||||||
| Commercial mortgage loans | 8,700 | 8,536 | 8,236 | 7,931 | ||||||||||||
| Residential mortgage loans | 1,444 | 1,394 | 1,294 | 1,263 | ||||||||||||
| Consumer loans | 2,696 | 2,701 | 2,751 | 2,722 | ||||||||||||
| Lease financing | 1,286 | 1,296 | 1,265 | 1,260 | ||||||||||||
| International loans | 1,972 | 2,239 | 2,205 | 2,117 | ||||||||||||
| Total loans | 42,141 | 43,024 | 40,843 | 39,715 | ||||||||||||
| Less allowance for loan losses | (558 | ) | (609 | ) | (673 | ) | (729 | ) | ||||||||
| Net loans | 41,583 | 42,415 | 40,170 | 38,986 | ||||||||||||
| Premises and equipment | 499 | 481 | 415 | 399 | ||||||||||||
| Customers’ liability on acceptances outstanding | 39 | 35 | 57 | 41 | ||||||||||||
| Accrued income and other assets | 2,726 | 2,722 | 2,812 | 2,720 | ||||||||||||
| Total assets | $ | 54,349 | $ | 54,689 | $ | 51,766 | $ | 52,959 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
| Noninterest-bearing deposits | $ | 17,702 | $ | 19,236 | $ | 15,164 | $ | 16,811 | ||||||||
| Interest-bearing deposits | 25,968 | 24,817 | 25,772 | 25,424 | ||||||||||||
| Total deposits | 43,670 | 44,053 | 40,936 | 42,235 | ||||||||||||
| Short-term borrowings | 241 | 108 | 193 | 225 | ||||||||||||
| Acceptances outstanding | 39 | 35 | 57 | 41 | ||||||||||||
| Accrued expenses and other liabilities | 1,242 | 1,067 | 1,189 | 1,021 | ||||||||||||
| Medium- and long-term debt | 4,066 | 4,309 | 4,286 | 4,401 | ||||||||||||
| Total liabilities | 49,258 | 49,572 | 46,661 | 47,923 | ||||||||||||
| Common stock — $5 par value: | ||||||||||||||||
| Authorized - 325,000,000 shares | ||||||||||||||||
| Issued - 178,735,252 shares at 9/30/05, 6/30/05, 12/31/04 and 9/30/04 | 894 | 894 | 894 | 894 | ||||||||||||
| Capital surplus | 448 | 433 | 421 | 408 | ||||||||||||
| Accumulated other comprehensive loss | (158 | ) | (99 | ) | (69 | ) | (24 | ) | ||||||||
| Retained earnings | 4,683 | 4,546 | 4,331 | 4,222 | ||||||||||||
| Less cost of common stock in treasury - 13,469,654 shares at 9/30/05, 11,513,612 shares at 6/30/05, 8,259,328 shares at 12/31/04 and 8,169,292 shares at 9/30/04 | (776 | ) | (657 | ) | (472 | ) | (464 | ) | ||||||||
| Total shareholders’ equity | 5,091 | 5,117 | 5,105 | 5,036 | ||||||||||||
| Total liabilities and shareholders’ equity | $ | 54,349 | $ | 54,689 | $ | 51,766 | $ | 52,959 | ||||||||
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CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Comerica Incorporated and Subsidiaries
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (in millions, except per share data) | 2005 | 2004 | 2005 | 2004 | ||||||||||||
INTEREST INCOME | ||||||||||||||||
| Interest and fees on loans | $ | 674 | $ | 514 | $ | 1,856 | $ | 1,510 | ||||||||
| Interest on investment securities | 38 | 36 | 107 | 111 | ||||||||||||
| Interest on short-term investments | 7 | 8 | 18 | 25 | ||||||||||||
| Total interest income | 719 | 558 | 1,981 | 1,646 | ||||||||||||
INTEREST EXPENSE | ||||||||||||||||
| Interest on deposits | 147 | 79 | 377 | 224 | ||||||||||||
| Interest on short-term borrowings | 16 | 1 | 28 | 2 | ||||||||||||
| Interest on medium— and long-term debt | 44 | 27 | 121 | 76 | ||||||||||||
| Total interest expense | 207 | 107 | 526 | 302 | ||||||||||||
| Net interest income | 512 | 451 | 1,455 | 1,344 | ||||||||||||
| Provision for loan losses | (30 | ) | — | (27 | ) | 85 | ||||||||||
| Net interest income after provision for loan losses | 542 | 451 | 1,482 | 1,259 | ||||||||||||
NONINTEREST INCOME | ||||||||||||||||
| Service charges on deposit accounts | 55 | 57 | 163 | 178 | ||||||||||||
| Fiduciary income | 44 | 43 | 133 | 128 | ||||||||||||
| Commercial lending fees | 16 | 14 | 44 | 41 | ||||||||||||
| Letter of credit fees | 18 | 17 | 56 | 49 | ||||||||||||
| Foreign exchange income | 9 | 9 | 27 | 28 | ||||||||||||
| Brokerage fees | 10 | 9 | 27 | 27 | ||||||||||||
| Investment advisory revenue, net | 14 | 8 | 36 | 26 | ||||||||||||
| Card fees | 10 | 8 | 28 | 23 | ||||||||||||
| Bank-owned life insurance | 9 | 10 | 28 | 28 | ||||||||||||
| Equity in earnings of unconsolidated subsidiaries | 4 | 3 | 13 | 11 | ||||||||||||
| Warrant income | 2 | 1 | 7 | 6 | ||||||||||||
| Net securities losses | — | (6 | ) | — | — | |||||||||||
| Net gain on sales of businesses | 1 | — | 1 | 7 | ||||||||||||
| Other noninterest income | 40 | 33 | 98 | 102 | ||||||||||||
| Total noninterest income | 232 | 206 | 661 | 654 | ||||||||||||
NONINTEREST EXPENSES | ||||||||||||||||
| Salaries | 209 | 185 | 595 | 567 | ||||||||||||
| Employee benefits | 46 | 40 | 137 | 119 | ||||||||||||
| Total salaries and employee benefits | 255 | 225 | 732 | 686 | ||||||||||||
| Net occupancy expense | 30 | 32 | 90 | 93 | ||||||||||||
| Equipment expense | 14 | 14 | 42 | 43 | ||||||||||||
| Outside processing fee expense | 19 | 16 | 56 | 51 | ||||||||||||
| Software expense | 12 | 11 | 35 | 31 | ||||||||||||
| Customer services | 29 | 8 | 50 | 17 | ||||||||||||
| Litigation and operational losses | 4 | 16 | 14 | 27 | ||||||||||||
| Other noninterest expenses | 59 | 50 | 160 | 165 | ||||||||||||
| Total noninterest expenses | 422 | 372 | 1,179 | 1,113 | ||||||||||||
| Income before income taxes | 352 | 285 | 964 | 800 | ||||||||||||
| Provision for income taxes | 114 | 89 | 310 | 250 | ||||||||||||
NET INCOME | $ | 238 | $ | 196 | $ | 654 | $ | 550 | ||||||||
| Basic net income per common share | $ | 1.43 | $ | 1.15 | $ | 3.90 | $ | 3.19 | ||||||||
| Diluted net income per common share | 1.41 | 1.13 | 3.85 | 3.15 | ||||||||||||
| Cash dividends declared on common stock | 92 | 88 | 277 | 268 | ||||||||||||
| Dividends per common share | 0.55 | 0.52 | 1.65 | 1.56 | ||||||||||||
-8-
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Comerica Incorporated and Subsidiaries
| Third | Second | First | Fourth | Third | Third Quarter 2005 Compared To: | |||||||||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | Second Quarter 2005 | Third Quarter 2004 | ||||||||||||||||||||||||||||||
| (in millions, except per share data) | 2005 | 2005 | 2005 | 2004 | 2004 | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 674 | $ | 616 | $ | 566 | $ | 544 | $ | 514 | $ | 58 | 9.6 | % | $ | 160 | 31.2 | % | ||||||||||||||||||
| Interest on investment securities | 38 | 34 | 35 | 36 | 36 | 4 | 10.5 | 2 | 6.8 | |||||||||||||||||||||||||||
| Interest on short-term investments | 7 | 5 | 6 | 11 | 8 | 2 | 16.6 | (1 | ) | (22.5 | ) | |||||||||||||||||||||||||
| Total interest income | 719 | 655 | 607 | 591 | 558 | 64 | 9.7 | 161 | 28.8 | |||||||||||||||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||
| Interest on deposits | 147 | 122 | 108 | 91 | 79 | 25 | 20.3 | 68 | 85.2 | |||||||||||||||||||||||||||
| Interest on short-term borrowings | 16 | 9 | 3 | 2 | 1 | 7 | 77.2 | 15 | N/M | |||||||||||||||||||||||||||
| Interest on medium— and long-term debt | 44 | 41 | 36 | 32 | 27 | 3 | 8.0 | 17 | 62.2 | |||||||||||||||||||||||||||
| Total interest expense | 207 | 172 | 147 | 125 | 107 | 35 | 20.3 | 100 | 92.7 | |||||||||||||||||||||||||||
| Net interest income | 512 | 483 | 460 | 466 | 451 | 29 | 5.9 | 61 | 13.6 | |||||||||||||||||||||||||||
| Provision for loan losses | (30 | ) | 2 | 1 | (21 | ) | — | (32 | ) | N/M | (30 | ) | N/M | |||||||||||||||||||||||
| Net interest income after provision for loan losses | 542 | 481 | 459 | 487 | 451 | 61 | 12.6 | 91 | 20.2 | |||||||||||||||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 55 | 54 | 54 | 53 | 57 | 1 | 4.5 | (2 | ) | (1.3 | ) | |||||||||||||||||||||||||
| Fiduciary income | 44 | 43 | 46 | 43 | 43 | 1 | 1.4 | 1 | 3.8 | |||||||||||||||||||||||||||
| Commercial lending fees | 16 | 16 | 12 | 14 | 14 | — | (3.3 | ) | 2 | 6.2 | ||||||||||||||||||||||||||
| Letter of credit fees | 18 | 18 | 20 | 17 | 17 | — | (0.6 | ) | 1 | 4.5 | ||||||||||||||||||||||||||
| Foreign exchange income | 9 | 9 | 9 | 9 | 9 | — | (3.9 | ) | — | 14.7 | ||||||||||||||||||||||||||
| Brokerage fees | 10 | 9 | 8 | 9 | 9 | 1 | 10.4 | 1 | 12.7 | |||||||||||||||||||||||||||
| Investment advisory revenue, net | 14 | 12 | 10 | 9 | 8 | 2 | 22.7 | 6 | 64.7 | |||||||||||||||||||||||||||
| Card fees | 10 | 9 | 9 | 9 | 8 | 1 | 4.5 | 2 | 24.9 | |||||||||||||||||||||||||||
| Bank-owned life insurance | 9 | 10 | 9 | 6 | 10 | (1 | ) | (11.5 | ) | (1 | ) | (9.1 | ) | |||||||||||||||||||||||
| Equity in earnings of unconsolidated subsidiaries | 4 | 4 | 5 | 1 | 3 | — | 19.0 | 1 | 64.9 | |||||||||||||||||||||||||||
| Warrant income | 2 | 3 | 2 | 1 | 1 | (1 | ) | (49.1 | ) | 1 | 6.3 | |||||||||||||||||||||||||
| Net securities losses | — | — | — | — | (6 | ) | — | N/M | 6 | N/M | ||||||||||||||||||||||||||
| Net gain on sales of businesses | 1 | — | — | — | — | 1 | N/M | 1 | N/M | |||||||||||||||||||||||||||
| Other noninterest income | 40 | 32 | 26 | 32 | 33 | 8 | 26.4 | 7 | 20.4 | |||||||||||||||||||||||||||
| Total noninterest income | 232 | 219 | 210 | 203 | 206 | 13 | 6.2 | 26 | 12.8 | |||||||||||||||||||||||||||
NONINTEREST EXPENSES | ||||||||||||||||||||||||||||||||||||
| Salaries | 209 | 197 | 189 | 193 | 185 | 12 | 5.6 | 24 | 12.7 | |||||||||||||||||||||||||||
| Employee benefits | 46 | 44 | 47 | 40 | 40 | 2 | 3.6 | 6 | 15.9 | |||||||||||||||||||||||||||
| Total salaries and employee benefits | 255 | 241 | 236 | 233 | 225 | 14 | 5.3 | 30 | 13.2 | |||||||||||||||||||||||||||
| Net occupancy expense | 30 | 28 | 32 | 32 | 32 | 2 | 5.6 | (2 | ) | (5.7 | ) | |||||||||||||||||||||||||
| Equipment expense | 14 | 14 | 14 | 15 | 14 | — | — | — | 0.5 | |||||||||||||||||||||||||||
| Outside processing fee expense | 19 | 20 | 17 | 17 | 16 | (1 | ) | (1.4 | ) | 3 | 18.7 | |||||||||||||||||||||||||
| Software expense | 12 | 11 | 12 | 12 | 11 | 1 | 3.5 | 1 | 8.9 | |||||||||||||||||||||||||||
| Customer services | 29 | 10 | 11 | 6 | 8 | 19 | 193.1 | 21 | 249.0 | |||||||||||||||||||||||||||
| Litigation and operational losses | 4 | 7 | 3 | (3 | ) | 16 | (3 | ) | (51.6 | ) | (12 | ) | (79.4 | ) | ||||||||||||||||||||||
| Other noninterest expenses | 59 | 52 | 49 | 68 | 50 | 7 | 16.4 | 9 | 20.7 | |||||||||||||||||||||||||||
| Total noninterest expenses | 422 | 383 | 374 | 380 | 372 | 39 | 10.1 | 50 | 13.5 | |||||||||||||||||||||||||||
| Income before income taxes | 352 | 317 | 295 | 310 | 285 | 35 | 11.3 | 67 | 23.7 | |||||||||||||||||||||||||||
| Provision for income taxes | 114 | 100 | 96 | 103 | 89 | 14 | 14.5 | 25 | 28.5 | |||||||||||||||||||||||||||
NET INCOME | $ | 238 | $ | 217 | $ | 199 | $ | 207 | $ | 196 | $ | 21 | 9.8 | % | $ | 42 | 21.5 | % | ||||||||||||||||||
| Basic net income per common share | $ | 1.43 | $ | 1.29 | $ | 1.18 | $ | 1.22 | $ | 1.15 | $ | 0.14 | 10.9 | % | $ | 0.28 | 24.3 | % | ||||||||||||||||||
| Diluted net income per common share | 1.41 | 1.28 | 1.16 | 1.21 | 1.13 | 0.13 | 10.2 | 0.28 | 24.8 | |||||||||||||||||||||||||||
| Cash dividends declared on common stock | 92 | 92 | 93 | 88 | 88 | — | 0.5 | 4 | 4.1 | |||||||||||||||||||||||||||
| Dividends per common share | 0.55 | 0.55 | 0.55 | 0.52 | 0.52 | — | — | 0.03 | 5.8 | |||||||||||||||||||||||||||
N/M — Not meaningful
-9-
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
Comerica Incorporated and Subsidiaries
Comerica Incorporated and Subsidiaries
| 2005 | 2004 | |||||||||||||||||||
| (in millions) | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |||||||||||||||
| Balance at beginning of period | $ | 609 | $ | 636 | $ | 673 | $ | 729 | $ | 762 | ||||||||||
| Loans charged-off: | ||||||||||||||||||||
| Commercial | 20 | 29 | 28 | 39 | 41 | |||||||||||||||
| 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 | 2 | 4 | — | |||||||||||||||
| Other | 4 | 5 | 3 | — | 7 | |||||||||||||||
| Total commercial mortgage | 4 | 7 | 5 | 4 | 7 | |||||||||||||||
| Residential mortgage | — | — | — | — | 1 | |||||||||||||||
| Consumer | 6 | 3 | 3 | 5 | 2 | |||||||||||||||
| Lease financing | 13 | 3 | 3 | 4 | — | |||||||||||||||
| International | 3 | 1 | 7 | 3 | 1 | |||||||||||||||
| Total loans charged-off | 47 | 43 | 46 | 55 | 53 | |||||||||||||||
| Recoveries on loans previously charged-off: | ||||||||||||||||||||
| Commercial | 23 | 12 | 7 | 14 | 13 | |||||||||||||||
| Real estate construction | — | — | — | — | — | |||||||||||||||
| Commercial mortgage | 1 | 1 | — | 1 | 1 | |||||||||||||||
| Residential mortgage | — | — | — | — | — | |||||||||||||||
| Consumer | 2 | — | 1 | — | 1 | |||||||||||||||
| Lease financing | — | — | — | — | — | |||||||||||||||
| International | — | 1 | — | 5 | 5 | |||||||||||||||
| Total recoveries | 26 | 14 | 8 | 20 | 20 | |||||||||||||||
| Net loans charged-off | 21 | 29 | 38 | 35 | 33 | |||||||||||||||
| Provision for loan losses | (30 | ) | 2 | 1 | (21 | ) | — | |||||||||||||
| Balance at end of period | $ | 558 | $ | 609 | $ | 636 | $ | 673 | $ | 729 | ||||||||||
| Allowance for loan losses as a percentage of total loans | 1.33 | % | 1.41 | % | 1.52 | % | 1.65 | % | 1.83 | % | ||||||||||
| Net loans charged-off as a percentage of average total loans | 0.18 | 0.27 | 0.36 | 0.34 | 0.33 | |||||||||||||||
| Allowance for credit losses on lending-related commitments* | $ | 14 | $ | 15 | $ | 18 | $ | 21 | $ | 24 | ||||||||||
| * Included in “Accrued expenses and other liabilities” on the consolidated balance sheets. | ||
-10-
NONPERFORMING ASSETS
Comerica Incorporated and Subsidiaries
Comerica Incorporated and Subsidiaries
| 2005 | 2004 | |||||||||||||||||||
| (in millions) | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |||||||||||||||
| SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS | ||||||||||||||||||||
| Nonaccrual loans: | ||||||||||||||||||||
| Commercial | $ | 81 | $ | 125 | $ | 161 | $ | 161 | $ | 181 | ||||||||||
| Real estate construction: | ||||||||||||||||||||
| Real estate construction business line | 4 | 8 | 18 | 31 | 28 | |||||||||||||||
| Other | — | 2 | 2 | 3 | 3 | |||||||||||||||
| Total real estate construction | 4 | 10 | 20 | 34 | 31 | |||||||||||||||
| Commercial mortgage: | ||||||||||||||||||||
| Commercial real estate business line | 9 | 9 | 11 | 6 | 10 | |||||||||||||||
| Other | 35 | 32 | 38 | 58 | 70 | |||||||||||||||
| Total commercial mortgage | 44 | 41 | 49 | 64 | 80 | |||||||||||||||
| Residential mortgage | 1 | 2 | 2 | 1 | 1 | |||||||||||||||
| Consumer | 1 | 2 | 1 | 1 | 2 | |||||||||||||||
| Lease financing | 39 | 9 | 12 | 15 | 19 | |||||||||||||||
| International | 16 | 23 | 24 | 36 | 47 | |||||||||||||||
| Total nonaccrual loans | 186 | 212 | 269 | 312 | 361 | |||||||||||||||
| Reduced-rate loans | — | — | — | — | — | |||||||||||||||
| Total nonperforming loans | 186 | 212 | 269 | 312 | 361 | |||||||||||||||
| Other real estate | 34 | 34 | 42 | 27 | 27 | |||||||||||||||
| Nonaccrual debt securities | — | — | — | — | — | |||||||||||||||
| Total nonperforming assets | $ | 220 | $ | 246 | $ | 311 | $ | 339 | $ | 388 | ||||||||||
| Nonperforming loans as a percentage of total loans | 0.44 | % | 0.49 | % | 0.64 | % | 0.76 | % | 0.91 | % | ||||||||||
| Nonperforming assets as a percentage of total loans, other real estate and nonaccrual debt securities | 0.52 | 0.57 | 0.75 | 0.83 | 0.98 | |||||||||||||||
| Allowance for loan losses as a percentage of total nonperforming assets | 253 | 248 | 204 | 198 | 188 | |||||||||||||||
| Loans past due 90 days or more and still accruing | $ | 14 | $ | 24 | $ | 23 | $ | 15 | $ | 20 | ||||||||||
ANALYSIS OF NONACCRUAL LOANS | ||||||||||||||||||||
| Nonaccrual loans at beginning of period | $ | 212 | $ | 269 | $ | 312 | $ | 361 | $ | 404 | ||||||||||
| Loans transferred to nonaccrual (1) | 81 | 47 | 66 | 71 | 106 | |||||||||||||||
| Nonaccrual business loan gross charge-offs (2) | (40 | ) | (38 | ) | (42 | ) | (49 | ) | (48 | ) | ||||||||||
| Loans transferred to accrual status (1) | — | — | (4 | ) | (7 | ) | — | |||||||||||||
| Nonaccrual business loans sold (3) | (19 | ) | — | (14 | ) | (33 | ) | (16 | ) | |||||||||||
| Payments/Other (4) | (48 | ) | (66 | ) | (49 | ) | (31 | ) | (85 | ) | ||||||||||
| Nonaccrual loans at end of period | $ | 186 | $ | 212 | $ | 269 | $ | 312 | $ | 361 | ||||||||||
| (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 | $ | 40 | $ | 38 | $ | 42 | $ | 49 | $ | 48 | ||||||||||
| Performing watch list loans | 1 | 2 | 1 | 1 | 2 | |||||||||||||||
| Consumer loans and residential mortgage loans | 6 | 3 | 3 | 5 | 3 | |||||||||||||||
| Total gross loan charge-offs | $ | 47 | $ | 43 | $ | 46 | $ | 55 | $ | 53 | ||||||||||
| (3) Analysis of loans sold: | ||||||||||||||||||||
| Nonaccrual business loans | $ | 19 | $ | — | $ | 14 | $ | 33 | $ | 16 | ||||||||||
| Performing watch list loans sold | 34 | 7 | 4 | 7 | 30 | |||||||||||||||
| Total loans sold | $ | 53 | $ | 7 | $ | 18 | $ | 40 | $ | 46 | ||||||||||
| (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. | |||||||||||||||||||
-11-
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Comerica Incorporated and Subsidiaries
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| September 30, 2005 | June 30, 2005 | September 30, 2004 | ||||||||||||||||||||||||||||||||||
| Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||
| (dollar amounts in millions) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||||||||||
| Commercial loans | $ | 25,230 | $ | 378 | 5.95 | % | $ | 24,122 | $ | 329 | 5.46 | % | $ | 22,096 | $ | 234 | 4.21 | % | ||||||||||||||||||
| Real estate construction loans | 3,202 | 60 | 7.40 | 3,101 | 54 | 6.99 | 3,273 | 46 | 5.58 | |||||||||||||||||||||||||||
| Commercial mortgage loans | 8,631 | 138 | 6.37 | 8,513 | 129 | 6.06 | 7,951 | 104 | 5.22 | |||||||||||||||||||||||||||
| Residential mortgage loans | 1,418 | 20 | 5.76 | 1,357 | 20 | 5.75 | 1,239 | 18 | 5.63 | |||||||||||||||||||||||||||
| Consumer loans | 2,703 | 41 | 6.04 | 2,673 | 38 | 5.75 | 2,671 | 31 | 4.68 | |||||||||||||||||||||||||||
| Lease financing | 1,300 | 10 | 2.98 | 1,283 | 13 | 4.08 | 1,266 | 11 | 3.46 | |||||||||||||||||||||||||||
| International loans | 2,098 | 33 | 6.27 | 2,185 | 31 | 5.77 | 2,149 | 26 | 4.87 | |||||||||||||||||||||||||||
| Business loan swap income | — | (5 | ) | — | — | 3 | — | — | 45 | — | ||||||||||||||||||||||||||
| Total loans | 44,582 | 675 | 6.01 | 43,234 | 617 | 5.72 | 40,645 | 515 | 5.04 | |||||||||||||||||||||||||||
| Investment securities available-for-sale (1) | 3,935 | 38 | 3.80 | 3,681 | 34 | 3.67 | 4,225 | 36 | 3.31 | |||||||||||||||||||||||||||
| Short-term investments | 549 | 7 | 4.76 | 497 | 5 | 4.54 | 1,556 | 8 | 2.17 | |||||||||||||||||||||||||||
| Total earning assets | 49,066 | 720 | 5.82 | 47,412 | 656 | 5.54 | 46,426 | 559 | 4.78 | |||||||||||||||||||||||||||
| Cash and due from banks | 1,788 | 1,697 | 1,652 | |||||||||||||||||||||||||||||||||
| Allowance for loan losses | (601 | ) | (645 | ) | (774 | ) | ||||||||||||||||||||||||||||||
| Accrued income and other assets | 3,209 | 3,171 | 3,044 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 53,462 | $ | 51,635 | $ | 50,348 | ||||||||||||||||||||||||||||||
| Money market and NOW deposits | $ | 16,987 | 89 | 2.09 | $ | 17,190 | 77 | 1.80 | $ | 17,526 | 47 | 1.06 | ||||||||||||||||||||||||
| Savings deposits | 1,531 | 2 | 0.52 | 1,568 | 1 | 0.42 | 1,652 | 1 | 0.36 | |||||||||||||||||||||||||||
| Certificates of deposit | 5,912 | 44 | 2.92 | 5,509 | 36 | 2.57 | 5,826 | 26 | 1.79 | |||||||||||||||||||||||||||
| Foreign office time deposits | 1,110 | 12 | 4.21 | 738 | 8 | 4.23 | 718 | 5 | 2.76 | |||||||||||||||||||||||||||
| Total interest-bearing deposits | 25,540 | 147 | 2.28 | 25,005 | 122 | 1.96 | 25,722 | 79 | 1.22 | |||||||||||||||||||||||||||
| Short-term borrowings | 1,804 | 16 | 3.52 | 1,182 | 9 | 3.06 | 251 | 1 | 1.36 | |||||||||||||||||||||||||||
| Medium- and long-term debt | 4,144 | 44 | 4.26 | 4,314 | 41 | 3.83 | 4,462 | 27 | 2.45 | |||||||||||||||||||||||||||
| Total interest-bearing sources | 31,488 | 207 | 2.61 | 30,501 | 172 | 2.26 | 30,435 | 107 | 1.40 | |||||||||||||||||||||||||||
| Noninterest-bearing deposits | 15,734 | 14,995 | 14,012 | |||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 1,124 | 1,039 | 911 | |||||||||||||||||||||||||||||||||
| Common shareholders’ equity | 5,116 | 5,100 | 4,990 | |||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 53,462 | $ | 51,635 | $ | 50,348 | ||||||||||||||||||||||||||||||
| Net interest income/rate spread (FTE) | $ | 513 | 3.21 | $ | 484 | 3.28 | $ | 452 | 3.38 | |||||||||||||||||||||||||||
| FTE adjustment | $ | 1 | $ | 1 | $ | 1 | ||||||||||||||||||||||||||||||
| Impact of net noninterest-bearing sources of funds | 0.94 | 0.81 | 0.48 | |||||||||||||||||||||||||||||||||
| Net interest margin (as a percentage of average earning assets) (FTE) | 4.15 | % | 4.09 | % | 3.86 | % | ||||||||||||||||||||||||||||||
| (1) | The average rate for investment securities available-for-sale was computed using average historical cost. |
-12-
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Comerica Incorporated and Subsidiaries
| Nine Months Ended | ||||||||||||||||||||||||
| September 30, 2005 | September 30, 2004 | |||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||||
| (dollar amounts in millions) | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
| Commercial loans | $ | 24,207 | $ | 993 | 5.48 | % | $ | 21,997 | $ | 669 | 4.06 | % | ||||||||||||
| Real estate construction loans | 3,119 | 163 | 6.97 | 3,293 | 129 | 5.24 | ||||||||||||||||||
| Commercial mortgage loans | 8,488 | 385 | 6.07 | 7,989 | 304 | 5.08 | ||||||||||||||||||
| Residential mortgage loans | 1,362 | 58 | 5.70 | 1,225 | 52 | 5.71 | ||||||||||||||||||
| Consumer loans | 2,703 | 115 | 5.70 | 2,650 | 92 | 4.62 | ||||||||||||||||||
| Lease financing | 1,281 | 36 | 3.72 | 1,276 | 39 | 4.05 | ||||||||||||||||||
| International loans | 2,173 | 95 | 5.82 | 2,171 | 73 | 4.46 | ||||||||||||||||||
| Business loan swap income | — | 14 | — | — | 154 | — | ||||||||||||||||||
| Total loans | 43,333 | 1,859 | 5.73 | 40,601 | 1,512 | 4.97 | ||||||||||||||||||
| Investment securities available-for-sale (1) | 3,802 | 107 | 3.69 | 4,411 | 111 | 3.32 | ||||||||||||||||||
| Short-term investments | 581 | 18 | 4.18 | 1,948 | 25 | 1.73 | ||||||||||||||||||
| Total earning assets | 47,716 | 1,984 | 5.55 | 46,960 | 1,648 | 4.68 | ||||||||||||||||||
| Cash and due from banks | 1,709 | 1,681 | ||||||||||||||||||||||
| Allowance for loan losses | (644 | ) | (805 | ) | ||||||||||||||||||||
| Accrued income and other assets | 3,178 | 3,055 | ||||||||||||||||||||||
| Total assets | $ | 51,959 | $ | 50,891 | ||||||||||||||||||||
| Money market and NOW deposits | $ | 17,326 | 235 | 1.81 | $ | 17,772 | 131 | 0.99 | ||||||||||||||||
| Savings deposits | 1,560 | 6 | 0.45 | 1,636 | 5 | 0.38 | ||||||||||||||||||
| Certificates of deposit | 5,661 | 110 | 2.60 | 6,110 | 76 | 1.66 | ||||||||||||||||||
| Foreign office time deposits | 855 | 26 | 4.08 | 655 | 12 | 2.47 | ||||||||||||||||||
| Total interest-bearing deposits | 25,402 | 377 | 1.98 | 26,173 | 224 | 1.14 | ||||||||||||||||||
| Short-term borrowings | 1,148 | 28 | 3.26 | 275 | 2 | 1.05 | ||||||||||||||||||
| Medium- and long-term debt | 4,244 | 121 | 3.82 | 4,607 | 76 | 2.22 | ||||||||||||||||||
| Total interest-bearing sources | 30,794 | 526 | 2.28 | 31,055 | 302 | 1.30 | ||||||||||||||||||
| Noninterest-bearing deposits | 14,955 | 13,910 | ||||||||||||||||||||||
| Accrued expenses and other liabilities | 1,114 | 897 | ||||||||||||||||||||||
| Common shareholders’ equity | 5,096 | 5,029 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 51,959 | $ | 50,891 | ||||||||||||||||||||
| Net interest income/rate spread (FTE) | $ | 1,458 | 3.27 | $ | 1,346 | 3.38 | ||||||||||||||||||
| FTE adjustment | $ | 3 | $ | 2 | ||||||||||||||||||||
| Impact of net noninterest-bearing sources of funds | 0.81 | 0.44 | ||||||||||||||||||||||
| Net interest margin (as a percentage of average earning assets) (FTE) | 4.08 | % | 3.82 | % | ||||||||||||||||||||
| (1) | The average rate for investment securities available-for-sale was computed using average historical cost. |
-13-
CONSOLIDATED STATISTICAL DATA
Comerica Incorporated and Subsidiaries
Comerica Incorporated and Subsidiaries
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (in millions, except per share data) | 2005 | 2005 | 2005 | 2004 | 2004 | |||||||||||||||
| Commercial loans: | ||||||||||||||||||||
| Floor plan | $ | 2,065 | $ | 2,766 | $ | 2,668 | $ | 2,575 | $ | 2,270 | ||||||||||
| Other | 20,689 | 20,924 | 20,112 | 19,464 | 18,876 | |||||||||||||||
| Total commercial loans | 22,754 | 23,690 | 22,780 | 22,039 | 21,146 | |||||||||||||||
| Real estate construction loans: | ||||||||||||||||||||
| Real estate construction business line | 2,674 | 2,587 | 2,451 | 2,461 | 2,641 | |||||||||||||||
| Other | 615 | 581 | 584 | 592 | 635 | |||||||||||||||
| Total real estate construction loans | 3,289 | 3,168 | 3,035 | 3,053 | 3,276 | |||||||||||||||
| Commercial mortgage loans: | ||||||||||||||||||||
| Commercial real estate business line | 1,440 | 1,465 | 1,555 | 1,556 | 1,498 | |||||||||||||||
| Other | 7,260 | 7,071 | 6,860 | 6,680 | 6,433 | |||||||||||||||
| Total commercial mortgage loans | 8,700 | 8,536 | 8,415 | 8,236 | 7,931 | |||||||||||||||
| Residential mortgage loans | 1,444 | 1,394 | 1,335 | 1,294 | 1,263 | |||||||||||||||
| Consumer loans: | ||||||||||||||||||||
| Home equity | 1,818 | 1,867 | 1,797 | 1,837 | 1,815 | |||||||||||||||
| Other consumer | 878 | 834 | 903 | 914 | 907 | |||||||||||||||
| Total consumer loans | 2,696 | 2,701 | 2,700 | 2,751 | 2,722 | |||||||||||||||
| Lease financing | 1,286 | 1,296 | 1,262 | 1,265 | 1,260 | |||||||||||||||
| International loans | 1,972 | 2,239 | 2,209 | 2,205 | 2,117 | |||||||||||||||
| Total loans | $ | 42,141 | $ | 43,024 | $ | 41,736 | $ | 40,843 | $ | 39,715 | ||||||||||
| Goodwill | $ | 247 | $ | 247 | $ | 247 | $ | 247 | $ | 247 | ||||||||||
| Other intangible assets | 1 | 1 | 1 | 1 | 1 | |||||||||||||||
| Loan servicing rights | 19 | 19 | 19 | 20 | 20 | |||||||||||||||
| Deferred mutual fund distribution costs | 7 | 7 | 7 | 8 | 9 | |||||||||||||||
| Amortization of intangibles (quarterly) | — | — | — | — | — | |||||||||||||||
| Tier 1 common capital ratio* | 8.00 | % | 7.88 | % | 8.04 | % | 8.13 | % | 8.16 | % | ||||||||||
| Tier 1 risk-based capital ratio* | 8.62 | 8.49 | 8.66 | 8.77 | 8.81 | |||||||||||||||
| Total risk-based capital ratio * | 11.99 | 12.08 | 12.49 | 12.75 | 13.06 | |||||||||||||||
| Leverage ratio* | 10.10 | 10.36 | 10.50 | 10.37 | 10.28 | |||||||||||||||
| Book value per share | $ | 30.81 | $ | 30.60 | $ | 29.81 | $ | 29.94 | $ | 29.52 | ||||||||||
| Market value per share for the quarter: | ||||||||||||||||||||
| High | $ | 63.38 | $ | 59.29 | $ | 61.40 | $ | 63.80 | $ | 61.48 | ||||||||||
| Low | 56.80 | 53.17 | 53.70 | 57.81 | 53.00 | |||||||||||||||
| Close | 58.90 | 57.80 | 55.08 | 61.02 | 59.35 | |||||||||||||||
| Quarterly ratios: | ||||||||||||||||||||
| Return on average common shareholders’ equity | 18.59 | % | 16.99 | % | 15.73 | % | 16.39 | % | 15.68 | % | ||||||||||
| Return on average assets | 1.78 | 1.68 | 1.57 | 1.63 | 1.55 | |||||||||||||||
| Efficiency ratio | 56.63 | 54.49 | 55.70 | 56.61 | 56.08 | |||||||||||||||
| Number of banking offices | 369 | 363 | 375 | 376 | 364 | |||||||||||||||
| Number of employees — full time equivalent | 10,779 | 10,826 | 10,803 | 10,892 | 10,839 | |||||||||||||||
| * | September 30, 2005 ratios are estimated |
-14-
PARENT COMPANY ONLY BALANCE SHEETS
Comerica Incorporated
Comerica Incorporated
| September 30, | December 31, | September 30, | ||||||||||
| (in millions, except share data) | 2005 | 2004 | 2004 | |||||||||
ASSETS | ||||||||||||
| Cash and due from subsidiary bank | $ | 16 | $ | 1 | $ | 1 | ||||||
| Short-term investments with subsidiary bank | 289 | 289 | 215 | |||||||||
| Investment in subsidiaries, principally banks | 5,597 | 5,585 | 5,611 | |||||||||
| Premises and equipment | 3 | 3 | 3 | |||||||||
| Other assets | 256 | 304 | 294 | |||||||||
| Total assets | $ | 6,161 | $ | 6,182 | $ | 6,124 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Long-term debt | $ | 817 | $ | 824 | $ | 827 | ||||||
| Other liabilities | 253 | 253 | 261 | |||||||||
| Total liabilities | 1,070 | 1,077 | 1,088 | |||||||||
| Common stock — $5 par value: | ||||||||||||
| Authorized - 325,000,000 shares Issued - 178,735,252 shares at 9/30/05, 12/31/04 and 9/30/04 | 894 | 894 | 894 | |||||||||
| Capital surplus | 448 | 421 | 408 | |||||||||
| Accumulated other comprehensive loss | (158 | ) | (69 | ) | (24 | ) | ||||||
| Retained earnings | 4,683 | 4,331 | 4,222 | |||||||||
| Less cost of common stock in treasury - 13,469,654 shares at 9/30/05, 8,259,328 shares at 12/31/04 and 8,169,292 shares at 9/30/04 | (776 | ) | (472 | ) | (464 | ) | ||||||
| Total shareholders’ equity | 5,091 | 5,105 | 5,036 | |||||||||
| Total liabilities and shareholders’ equity | $ | 6,161 | $ | 6,182 | $ | 6,124 | ||||||
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
Comerica Incorporated and Subsidiaries
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 | — | — | — | 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 | ||||||||||
BALANCE AT JANUARY 1, 2005 | $ | 894 | $ | 421 | $ | (69 | ) | $ | 4,331 | $ | (472 | ) | $ | 5,105 | ||||||||||
| Net income | — | — | — | 654 | — | 654 | ||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | (89 | ) | — | — | (89 | ) | ||||||||||||||||
| Total comprehensive income | 565 | |||||||||||||||||||||||
| Cash dividends declared on common stock ($1.65 per share) | — | — | — | (277 | ) | — | (277 | ) | ||||||||||||||||
| Purchase of 6,516,700 shares of common stock | — | — | — | — | (379 | ) | (379 | ) | ||||||||||||||||
| Net issuance of common stock under employee stock plans | — | (5 | ) | — | (25 | ) | 75 | 45 | ||||||||||||||||
| Recognition of stock-based compensation expense | — | 32 | — | — | — | 32 | ||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2005 | $ | 894 | $ | 448 | $ | (158 | ) | $ | 4,683 | $ | (776 | ) | $ | 5,091 | ||||||||||
-15-
BUSINESS SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
Comerica Incorporated and Subsidiaries
| (dollar amounts in millions) | Business Bank | Small Business & Personal Financial Services | Wealth & Institutional Management | |||||||||||||||||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | June 30, | September 30, | September 30, | June 30, | September 30, | ||||||||||||||||||||||||||||||
| Three Months Ended | 2005 | 2005 | 2004 | 2005 | 2005 | 2004 | 2005 | 2005 | 2004 | |||||||||||||||||||||||||||||
| Earnings summary: | ||||||||||||||||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 367 | $ | 350 | $ | 345 | $ | 153 | $ | 152 | $ | 149 | $ | 38 | $ | 37 | $ | 38 | ||||||||||||||||||||
| Provision for loan losses | (23 | ) | 18 | (5 | ) | 7 | (2 | ) | 1 | (4 | ) | 1 | (1 | ) | ||||||||||||||||||||||||
| Noninterest income | 71 | 71 | 65 | 54 | 53 | 53 | 83 | 79 | 75 | |||||||||||||||||||||||||||||
| Noninterest expenses | 184 | 159 | 143 | 138 | 132 | 126 | 89 | 88 | 74 | |||||||||||||||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 91 | 81 | 99 | 22 | 26 | 27 | 13 | 10 | 15 | |||||||||||||||||||||||||||||
| Net income (loss) | $ | 186 | $ | 163 | $ | 173 | $ | 40 | $ | 49 | $ | 48 | $ | 23 | $ | 17 | $ | 25 | ||||||||||||||||||||
| Net charge-offs | $ | 16 | $ | 21 | $ | 28 | $ | 7 | $ | 5 | $ | 4 | $ | (2 | ) | $ | 3 | $ | 1 | |||||||||||||||||||
| Selected average balances: | ||||||||||||||||||||||||||||||||||||||
| Assets | $ | 36,661 | $ | 35,435 | $ | 32,969 | $ | 6,575 | $ | 6,446 | $ | 6,348 | $ | 3,716 | $ | 3,622 | $ | 3,491 | ||||||||||||||||||||
| Loans | 35,273 | 34,110 | 31,785 | 5,862 | 5,768 | 5,618 | 3,428 | 3,335 | 3,233 | |||||||||||||||||||||||||||||
| Deposits | 20,877 | 20,352 | 19,386 | 16,774 | 16,874 | 16,757 | 2,550 | 2,414 | 2,467 | |||||||||||||||||||||||||||||
| Liabilities | 21,678 | 21,151 | 20,086 | 16,774 | 16,871 | 16,751 | 2,555 | 2,422 | 2,475 | |||||||||||||||||||||||||||||
| Attributed equity | 2,548 | 2,501 | 2,438 | 805 | 792 | 774 | 420 | 412 | 410 | |||||||||||||||||||||||||||||
| Statistical data: | ||||||||||||||||||||||||||||||||||||||
| Return on average assets (1) | 2.03 | % | 1.84 | % | 2.10 | % | 0.91 | % | 1.10 | % | 1.09 | % | 2.45 | % | 1.83 | % | 2.91 | % | ||||||||||||||||||||
| Return on average attributed equity | 29.17 | 26.08 | 28.42 | 19.79 | 24.56 | 24.64 | 21.67 | 16.13 | 24.77 | |||||||||||||||||||||||||||||
| Net interest margin (2) | 4.12 | 4.10 | 4.30 | 3.62 | 3.63 | 3.52 | 4.35 | 4.38 | 4.65 | |||||||||||||||||||||||||||||
| Efficiency ratio | 42.08 | 37.89 | 34.88 | 66.96 | 64.34 | 62.29 | 73.61 | 75.74 | 65.64 | |||||||||||||||||||||||||||||
| Finance | Other | Total | ||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | June 30, | September 30, | September 30, | June 30, | September 30, | ||||||||||||||||||||||||||||||
| Three Months Ended | 2005 | 2005 | 2004 | 2005 | 2005 | 2004 | 2005 | 2005 | 2004 | |||||||||||||||||||||||||||||
| Earnings summary: | ||||||||||||||||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | (47 | ) | $ | (56 | ) | $ | (80 | ) | $ | 2 | $ | 1 | $ | — | $ | 513 | $ | 484 | $ | 452 | |||||||||||||||||
| Provision for loan losses | — | — | — | (10 | ) | (15 | ) | 5 | (30 | ) | 2 | — | ||||||||||||||||||||||||||
| Noninterest income | 11 | 21 | 16 | 13 | (5 | ) | (3 | ) | 232 | 219 | 206 | |||||||||||||||||||||||||||
| Noninterest expenses | — | — | — | 11 | 4 | 29 | 422 | 383 | 372 | |||||||||||||||||||||||||||||
| Provision (benefit) for income taxes (FTE) | (16 | ) | (17 | ) | (24 | ) | 5 | 1 | (27 | ) | 115 | 101 | 90 | |||||||||||||||||||||||||
| Net income (loss) | $ | (20 | ) | $ | (18 | ) | $ | (40 | ) | $ | 9 | $ | 6 | $ | (10 | ) | $ | 238 | $ | 217 | $ | 196 | ||||||||||||||||
| Net charge-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 21 | $ | 29 | $ | 33 | ||||||||||||||||||||
| Selected average balances: | ||||||||||||||||||||||||||||||||||||||
| Assets | $ | 5,526 | $ | 5,192 | $ | 6,737 | $ | 984 | $ | 940 | $ | 803 | $ | 53,462 | $ | 51,635 | $ | 50,348 | ||||||||||||||||||||
| Loans | (22 | ) | (22 | ) | (17 | ) | 41 | 43 | 26 | 44,582 | 43,234 | 40,645 | ||||||||||||||||||||||||||
| Deposits | 1,008 | 338 | 1,123 | 65 | 22 | 1 | 41,274 | 40,000 | 39,734 | |||||||||||||||||||||||||||||
| Liabilities | 6,995 | 5,844 | 5,834 | 344 | 247 | 212 | 48,346 | 46,535 | 45,358 | |||||||||||||||||||||||||||||
| Attributed equity | 517 | 519 | 616 | 826 | 876 | 752 | 5,116 | 5,100 | 4,990 | |||||||||||||||||||||||||||||
| Statistical data: | ||||||||||||||||||||||||||||||||||||||
| Return on average assets (1) | N/M | N/M | N/M | N/M | N/M | N/M | 1.78 | % | 1.68 | % | 1.55 | % | ||||||||||||||||||||||||||
| Return on average attributed equity | N/M | N/M | N/M | N/M | N/M | N/M | 18.59 | 16.99 | 15.68 | |||||||||||||||||||||||||||||
| Net interest margin (2) | N/M | N/M | N/M | N/M | N/M | N/M | 4.15 | 4.09 | 3.86 | |||||||||||||||||||||||||||||
| Efficiency ratio | N/M | N/M | N/M | N/M | N/M | N/M | 56.63 | 54.49 | 56.08 | |||||||||||||||||||||||||||||
(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 | |||||||||||||||||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | June 30, | September 30, | September 30, | June 30, | September 30, | ||||||||||||||||||||||||||||||
| Three Months Ended | 2005 | 2005 | 2004 | 2005 | 2005 | 2004 | 2005 | 2005 | 2004 | |||||||||||||||||||||||||||||
| Earnings summary: | ||||||||||||||||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 272 | $ | 272 | $ | 267 | $ | 214 | $ | 196 | $ | 195 | $ | 61 | $ | 60 | $ | 60 | ||||||||||||||||||||
| Provision for loan losses | — | 30 | 20 | (18 | ) | (5 | ) | (17 | ) | 2 | (10 | ) | (8 | ) | ||||||||||||||||||||||||
| Noninterest income | 154 | 148 | 139 | 30 | 32 | 31 | 20 | 19 | 19 | |||||||||||||||||||||||||||||
| Noninterest expenses | 233 | 229 | 207 | 122 | 98 | 88 | 48 | 45 | 42 | |||||||||||||||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 59 | 50 | 58 | 52 | 50 | 64 | 11 | 15 | 16 | |||||||||||||||||||||||||||||
| Net income (loss) | $ | 134 | $ | 111 | $ | 121 | $ | 88 | $ | 85 | $ | 91 | $ | 20 | $ | 29 | $ | 29 | ||||||||||||||||||||
| Net charge-offs | $ | 23 | $ | 24 | $ | 19 | $ | (2 | ) | $ | 5 | $ | 14 | $ | (1 | ) | $ | — | $ | — | ||||||||||||||||||
| Selected average balances: | ||||||||||||||||||||||||||||||||||||||
| Assets | $ | 25,324 | $ | 25,305 | $ | 24,021 | $ | 14,920 | $ | 13,616 | $ | 12,777 | $ | 5,262 | $ | 5,127 | $ | 4,658 | ||||||||||||||||||||
| Loans | 23,832 | 23,879 | 22,731 | 14,226 | 12,947 | 12,067 | 5,070 | 4,945 | 4,498 | |||||||||||||||||||||||||||||
| Deposits | 18,857 | 18,918 | 19,067 | 17,415 | 16,777 | 15,517 | 3,611 | 3,671 | 3,791 | |||||||||||||||||||||||||||||
| Liabilities | 19,621 | 19,679 | 19,772 | 17,458 | 16,821 | 15,521 | 3,612 | 3,671 | 3,787 | |||||||||||||||||||||||||||||
| Attributed equity | 2,162 | 2,132 | 2,129 | 1,055 | 1,042 | 1,002 | 482 | 463 | 429 | |||||||||||||||||||||||||||||
| Statistical data: | ||||||||||||||||||||||||||||||||||||||
| Return on average assets (1) | 2.11 | % | 1.76 | % | 2.01 | % | 1.88 | % | 1.89 | % | 2.20 | % | 1.54 | % | 2.24 | % | 2.55 | % | ||||||||||||||||||||
| Return on average attributed equity | 24.71 | 20.88 | 22.72 | 33.07 | 32.44 | 36.31 | 16.88 | 24.85 | 27.64 | |||||||||||||||||||||||||||||
| Net interest margin (2) | 4.49 | 4.53 | 4.63 | 4.87 | 4.69 | 4.98 | 4.73 | 4.86 | 5.30 | |||||||||||||||||||||||||||||
| Efficiency ratio | 54.77 | 54.43 | 50.92 | 50.17 | 43.02 | 39.03 | 59.79 | 57.28 | 52.67 | |||||||||||||||||||||||||||||
| Florida | Finance & Other Businesses | Total | ||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | June 30, | September 30, | September 30, | June 30, | September 30, | ||||||||||||||||||||||||||||||
| Three Months Ended | 2005 | 2005 | 2004 | 2005 | 2005 | 2004 | 2005 | 2005 | 2004 | |||||||||||||||||||||||||||||
| Earnings summary: | ||||||||||||||||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 11 | $ | 11 | $ | 10 | $ | (45 | ) | $ | (55 | ) | $ | (80 | ) | $ | 513 | $ | 484 | $ | 452 | |||||||||||||||||
| Provision for loan losses | (4 | ) | 2 | — | (10 | ) | (15 | ) | 5 | (30 | ) | 2 | — | |||||||||||||||||||||||||
| Noninterest income | 4 | 4 | 4 | 24 | 16 | 13 | 232 | 219 | 206 | |||||||||||||||||||||||||||||
| Noninterest expenses | 8 | 7 | 6 | 11 | 4 | 29 | 422 | 383 | 372 | |||||||||||||||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 4 | 2 | 3 | (11 | ) | (16 | ) | (51 | ) | 115 | 101 | 90 | ||||||||||||||||||||||||||
| Net income (loss) | $ | 7 | $ | 4 | $ | 5 | $ | (11 | ) | $ | (12 | ) | $ | (50 | ) | $ | 238 | $ | 217 | $ | 196 | |||||||||||||||||
| Net charge-offs | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 21 | $ | 29 | $ | 33 | ||||||||||||||||||||
| Selected average balances: | ||||||||||||||||||||||||||||||||||||||
| Assets | $ | 1,446 | $ | 1,455 | $ | 1,352 | $ | 6,510 | $ | 6,132 | $ | 7,540 | $ | 53,462 | $ | 51,635 | $ | 50,348 | ||||||||||||||||||||
| Loans | 1,435 | 1,442 | 1,340 | 19 | 21 | 9 | 44,582 | 43,234 | 40,645 | |||||||||||||||||||||||||||||
| Deposits | 318 | 274 | 235 | 1,073 | 360 | 1,124 | 41,274 | 40,000 | 39,734 | |||||||||||||||||||||||||||||
| Liabilities | 316 | 273 | 232 | 7,339 | 6,091 | 6,046 | 48,346 | 46,535 | 45,358 | |||||||||||||||||||||||||||||
| Attributed equity | 74 | 68 | 62 | 1,343 | 1,395 | 1,368 | 5,116 | 5,100 | 4,990 | |||||||||||||||||||||||||||||
| Statistical data: | ||||||||||||||||||||||||||||||||||||||
| Return on average assets (1) | 2.01 | % | 1.04 | % | 1.41 | % | N/M | N/M | N/M | 1.78 | % | 1.68 | % | 1.55 | % | |||||||||||||||||||||||
| Return on average attributed equity | 38.96 | 22.09 | 30.55 | N/M | N/M | N/M | 18.59 | 16.99 | 15.68 | |||||||||||||||||||||||||||||
| Net interest margin (2) | 3.16 | 2.92 | 3.01 | N/M | N/M | N/M | 4.15 | 4.09 | 3.86 | |||||||||||||||||||||||||||||
| Efficiency ratio | 51.08 | 47.94 | 44.35 | N/M | N/M | N/M | 56.63 | 54.49 | 56.08 | |||||||||||||||||||||||||||||
(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-