EXHIBIT 99.1
COMERICA REPORTS FOURTH QUARTER AND 2005 EARNINGS
DETROIT/January 19, 2006— Comerica Incorporated (NYSE: CMA) today reported fourth quarter 2005 earnings of $207 million, or $1.25 per diluted share, compared to $238 million, or $1.41 per diluted share, for the third quarter 2005 and $207 million, or $1.21 per diluted share, for the fourth quarter 2004.
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| (dollar amounts in millions) | | 4th Qtr ’05 | | | 3rd Qtr ’05 | | | 4th Qtr ’04 | |
| Diluted EPS | | $ | 1.25 | | | $ | 1.41 | | | $ | 1.21 | |
| Net interest income | | $ | 501 | | | $ | 512 | | | $ | 466 | |
| Net interest margin | | | 4.00 | % | | | 4.15 | % | | | 3.96 | % |
| Provision for loan losses | | $ | (20 | ) | | $ | (30 | ) | | $ | (21 | ) |
| Noninterest income | | $ | 281 | | | $ | 232 | | | $ | 203 | |
| Noninterest expenses | | | | | | | | | | | | |
| Provision for credit losses on lending-related commitments | | $ | 25 | | | $ | (1 | ) | | $ | 3 | |
| Noninterest expenses — other | | | 462 | | | | 423 | | | | 377 | |
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| Total noninterest expenses | | $ | 487 | | | $ | 422 | | | $ | 380 | |
| Net income | | $ | 207 | | | $ | 238 | | | $ | 207 | |
| Return on equity | | | 16.28 | % | | | 18.59 | % | | | 16.39 | % |
Net income for 2005 was $861 million, or $5.11 per diluted share, compared to $757 million, or $4.36 per diluted share, for 2004. Return on average common shareholders’ equity was 16.90 percent and return on average assets was 1.64 percent for 2005, compared to 15.03 percent and 1.49 percent, respectively, for 2004.
Full Year and Fourth Quarter 2005 Highlights
Full Year 2005 Compared to Full Year 2004
| • | | Revenue grew 9% (7% excluding the net gain on the sales of businesses), with average loan growth of 5%, excluding Financial Services Division loans; net interest margin improved 20 basis points to 4.06%; and noninterest income (excluding the net gain on sales of businesses) grew 4% |
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| • | | Noninterest expenses rose 12%, with approximately half of the increase related to customer services expense in the Financial Services Division ($46 million) and credit-related costs ($39 million), including the provision for credit losses on lending-related commitments and other real estate expense. Other factors contributing to the increase in noninterest expenses included profitability-based incentives ($41 million), pension and staff insurance ($20 million) and new banking centers ($12 million) |
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| • | | Credit quality was at an historically strong level, with charge-offs at 25 basis points, down from 48 basis points in 2004; and nonperforming assets were down 52% to $162 million, compared to $339 million at year-end 2004 |
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COMERICA REPORTS FOURTH QUARTER AND 2005 EARNINGS — 2
Fourth Quarter 2005 Compared to Third Quarter 2005
| • | | On an annualized basis, average loans increased 2%, led by 14% growth in the Texas market and 10% growth in the Western market, partially offset by a 5% decline in the Midwest & Other markets (growth rates exclude Financial Services Division loans) |
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| • | | Credit quality remained solid, with nonperforming assets declining 27% to $162 million at December 31, 2005 |
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| • | | Noninterest expenses were up $65 million, reflecting higher incentives from increased profitability, a higher provision for credit losses on lending-related commitments related to the automotive industry, and a contribution to the Comerica Charitable Foundation |
“We continue to make investments to support the growth of our businesses and to bring better balance to our geographic and business mix over time,” said Ralph W. Babb Jr., chairman and chief executive officer. “Our fourth quarter results underscore many of the positive trends we have seen all year, including loan growth — particularly in the Western and Texas markets — and credit quality continues to be solid by any metric,” Babb said.
“We remain focused on revenue growth and our other key strategic drivers to create attractive shareholder returns over time,” Babb said. “As we enter 2006, we expect to deliver good loan growth with solid credit quality, while generating positive operating leverage.”
Net Interest Income
Net interest income was $501 million for the fourth quarter 2005, compared to $512 million for the third quarter 2005 ($492 million without the previously reported warrant accounting adjustment) and $466 million for the fourth quarter 2004. The $9 million increase in net interest income from the adjusted third quarter 2005 level resulted from the spread improvement provided by noninterest-bearing deposits in a rising interest rate environment. Average earning assets of $49.8 billion for the fourth quarter 2005 increased $698 million from the third quarter 2005, primarily as a result of a $667 million, or one percent, increase in average loans to $45.2 billion for the fourth quarter 2005. The Corporation’s Financial Services Division contributed $435 million of the increase in average loans for the fourth quarter 2005. Average deposits of $41.5 billion for the fourth quarter 2005 increased $204 million from the third quarter 2005.
The net interest margin was 4.00 percent in the fourth quarter 2005, compared to 4.15 percent for the third quarter 2005 (3.99 percent without the warrant accounting adjustment). The fourth quarter 2005 net interest margin benefited from a greater contribution from noninterest-bearing deposits in a higher rate environment.
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COMERICA REPORTS FOURTH QUARTER AND 2005 EARNINGS — 3
Noninterest Income
Noninterest income was $281 million for the fourth quarter 2005, compared to $232 million for the third quarter 2005 and $203 million for the fourth quarter 2004. Commercial lending fees, investment advisory revenue and card fees each experienced linked-quarter growth, while most other categories remained relatively flat. Certain categories of noninterest income are highlighted in the table below. Net gain on sales of businesses in the fourth quarter 2005 resulted from the sale of the Corporation’s interest in Framlington Group Limited, a London, England based asset manager. Risk management hedge ineffectiveness relates to libor and prime interest rate swap hedges and foreign exchange balance sheet hedges, and varies from period to period as rates and rate spreads change.
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| (in millions) | | 4th Qtr '05 | | | 3rd Qtr '05 | | | 4th Qtr '04 | |
| Net gain on sales of businesses | | $ | 55 | | | $ | 1 | | | $ | — | |
| Other noninterest income | | | | | | | | | | | | |
| Income (net of write-downs) from unconsolidated venture capital and private equity investments | | | — | | | | 13 | | | | 4 | |
| Risk management hedge ineffectiveness | | | 6 | | | | (3 | ) | | | (3 | ) |
Noninterest Expenses
Noninterest expenses were $487 million for the fourth quarter 2005, compared to $422 million for the third quarter 2005 and $380 million for the fourth quarter 2004. Noninterest expenses reflect higher incentives tied to increased profitability, continued investment in banking centers, technology and products, and higher credit costs related to other real estate and the provision for credit losses on lending-related commitments. Certain categories of noninterest expense are highlighted in the table below. Salaries increased $16 million, largely due to severance ($2 million) and business unit incentives ($11 million), primarily in investment advisory and lending-related units. Investment advisory incentives resulted from better-than-expected revenue growth. Lending-related incentives are based on risk-adjusted profits, and were therefore positively impacted by solid credit quality. 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 allowance provided on these deposits, as well as a competitive environment. The provision for credit losses on lending-related commitments increased primarily due to exposure to the automotive industry. The increase in contributions was used to fund the Comerica Charitable Foundation. Other real estate expense primarily related to a large write-down and operating costs incurred on a single property.
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| (in millions) | | 4th Qtr '05 | | | 3rd Qtr '05 | | | 4th Qtr '04 | |
| Salaries | | | | | | | | | | | | |
| Severance | | $ | 3 | | | $ | 1 | | | $ | 3 | |
| Business unit incentives | | | 45 | | | | 34 | | | | 29 | |
| Customer services | | | 19 | | | | 29 | | | | 6 | |
| Provision for credit losses on lending-related commitments | | | 25 | | | | (1 | ) | | | (3 | ) |
| Other noninterest expenses | | | | | | | | | | | | |
| Charitable contributions | | | 11 | | | | — | | | | 7 | |
| Other real estate expense | | | 9 | | | | 2 | | | | 2 | |
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COMERICA REPORTS FOURTH QUARTER AND 2005 EARNINGS — 4
Credit Quality
“Consistently solid credit quality metrics in the fourth quarter 2005 resulted in a $23 million decline in the allowance for credit losses from the third quarter,” said Babb. “Nonperforming assets continued to improve from already low levels.”
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| (dollar amounts in millions) | | 4th Qtr '05 | | | 3rd Qtr '05 | | | 4th Qtr '04 | |
| Net loan charge-offs | | $ | 22 | | | $ | 21 | | | $ | 35 | |
| Net lending-related commitment charge-offs | | $ | 6 | | | $ | — | | | $ | — | |
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| Total credit-related charge-offs | | $ | 28 | | | $ | 21 | | | $ | 35 | |
| Net loan charge-offs/Average total loans | | | 0.20 | % | | | 0.18 | % | | | 0.34 | % |
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| Provision for loan losses | | $ | (20 | ) | | $ | (30 | ) | | $ | (21 | ) |
| Provision for credit losses on lending-related commitments | | $ | 25 | | | $ | (1 | ) | | $ | (3 | ) |
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| Total provision for credit losses | | $ | 5 | | | $ | (31 | ) | | $ | (24 | ) |
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| Nonperforming assets (NPAs) | | $ | 162 | | | $ | 220 | | | $ | 339 | |
| NPAs/Total loans, Other real estate & Nonaccrual debt securities | | | 0.37 | % | | | 0.52 | % | | | 0.83 | % |
| Allowance for loan losses | | $ | 516 | | | $ | 558 | | | $ | 673 | |
| Allowance for credit losses on lending-related commitments* | | $ | 33 | | | $ | 14 | | | $ | 21 | |
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| Total allowance for credit losses | | $ | 549 | | | $ | 572 | | | $ | 694 | |
| Allowance for loan losses/Total loans | | | 1.19 | % | | | 1.33 | % | | | 1.65 | % |
| Allowance for loan losses/NPAs | | | 319 | | | | 253 | | | | 198 | |
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| * | | Included in “Accrued expenses and other liabilities” on the consolidated balance sheets. |
During the fourth quarter 2005, $28 million of loans greater than $2 million were transferred to nonaccrual status, a decrease of $53 million from the third quarter 2005. Nonperforming assets were $162 million at December 31, 2005, a decrease of $58 million from September 30, 2005.
Balance Sheet and Capital Management
Total assets and common shareholders’ equity were $53.0 billion and $5.1 billion, respectively, at December 31, 2005, compared to $54.3 billion and $5.1 billion, respectively, at September 30, 2005. There were approximately 163 million shares outstanding at December 31, 2005, compared to approximately 165 million shares outstanding at September 30, 2005. In the fourth quarter 2005, approximately 2.5 million shares were repurchased in the open market for $146 million. Comerica’s fourth quarter 2005 estimated tier 1 common, tier 1 and total risk-based capital ratios were 7.83 percent, 8.44 percent and 11.66 percent, respectively.
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COMERICA REPORTS FOURTH QUARTER AND 2005 EARNINGS — 5
2006 Outlook
Comerica’s outlook for full-year 2006 compared to the full year 2005 is as follows:
| • | | Mid-to-high single digit average loan growth (mid-single-digit average loan growth excluding Financial Services Division loans) |
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| • | | Average full year net interest margin of about 4.00 percent |
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| • | | Provision for credit losses consistent with credit-related charge-offs of 25 to 30 basis points of average loans |
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| • | | Low single digit noninterest income growth, excluding net gain on sales of businesses |
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| • | | Noninterest expenses unchanged |
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| • | | Active capital management |
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.
The following table presents net income (loss) by business segment.
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| (dollar amounts in millions) | | 4th Qtr '05 | | 3rd Qtr '05 | | 4th Qtr '04 |
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| Business Bank | | $ | 125 | | | | 65 | % | | $ | 186 | | | | 75 | % | | $ | 160 | | | | 75 | % |
| Small Business & Personal Financial Services | | | 29 | | | | 15 | | | | 40 | | | | 16 | | | | 40 | | | | 19 | |
| Wealth & Institutional Management | | | 39 | | | | 20 | | | | 23 | | | | 9 | | | | 12 | | | | 6 | |
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| | | | 193 | | | | 100 | % | | | 249 | | | | 100 | % | | | 212 | | | | 100 | % |
| Finance | | | (4 | ) | | | | | | | (20 | ) | | | | | | | (37 | ) | | | | |
| Other* | | | 18 | | | | | | | | 9 | | | | | | | | 32 | | | | | |
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| Total | | $ | 207 | | | | | | | $ | 238 | | | | | | | $ | 207 | | | | | |
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| * | | Includes items not directly associated with the major business segments or the Finance Division |
Net income for the Business Bank was $125 million for the fourth quarter 2005, compared to $186 million for the third quarter 2005. Net interest income (FTE) of $336 million in the fourth quarter 2005 decreased $31 million from the third quarter 2005. The decrease in net interest income (FTE) was primarily due to higher levels of low rate loans in the Financial Services Division in the fourth quarter 2005, compared to the third quarter 2005, and a $20 million positive adjustment in the third quarter 2005 resulting from a warrant accounting change. Average loans of $35.8 billion in the fourth quarter 2005 increased $576 million, or two percent, compared to the third quarter 2005, primarily due to increases in loans in the Financial Services Division, Commercial Real Estate, and National Dealer Services businesses. Average deposits of $20.6 billion in the fourth quarter 2005 decreased $299 million compared to the third quarter 2005, primarily due to a decrease in deposits in the Financial Services Division. Fourth quarter 2005 noninterest expenses of $226 million increased $41 million from the third quarter 2005, primarily due to increases in the provision for credit losses on lending-related commitments, net corporate overhead expenses and incentive compensation, partially offset by a decrease in customer services expense.
Net income for Small Business & Personal Financial Services was $29 million for the fourth quarter 2005, compared to $40 million for the third quarter 2005. The change largely reflects higher expenses, including those related to banking center investments.
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COMERICA REPORTS FOURTH QUARTER AND 2005 EARNINGS — 6
Net income for Wealth & Institutional Management was $39 million for the fourth quarter 2005, compared to $23 million for the third quarter 2005. Noninterest income of $137 million in the fourth quarter 2005 increased $54 million compared to the third quarter 2005, primarily due to the sale of the Corporation’s interest in Framlington Group Limited, described above. Fourth quarter 2005 noninterest expenses of $114 million increased $25 million compared to the third quarter 2005, primarily due to increases in incentive compensation, severance expense, net corporate overhead expenses and other real estate expenses.
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.
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| (dollar amounts in millions) | | 4th Qtr '05 | | 3rd Qtr '05 | | 4th Qtr '04 |
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| Midwest & Other Markets | | $ | 109 | | | | 56 | % | | $ | 134 | | | | 54 | % | | $ | 120 | | | | 57 | % |
| Western | | | 63 | | | | 33 | | | | 87 | | | | 35 | | | | 69 | | | | 32 | |
| Texas | | | 19 | | | | 10 | | | | 21 | | | | 8 | | | | 19 | | | | 9 | |
| Florida | | | 2 | | | | 1 | | | | 7 | | | | 3 | | | | 4 | | | | 2 | |
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| | | | 193 | | | | 100 | % | | | 249 | | | | 100 | % | | | 212 | | | | 100 | % |
| Finance & Other | | | 14 | | | | | | | | (11 | ) | | | | | | | (5 | ) | | | | |
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| Total | | $ | 207 | | | | | | | $ | 238 | | | | | | | $ | 207 | | | | | |
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Net income for the Midwest & Other markets was $109 million in the fourth quarter 2005, compared to $134 million in the third quarter 2005. Noninterest income of $201 million in the fourth quarter 2005 increased $47 million compared to the third quarter 2005, primarily due to the sale of the Corporation’s interest in Framlington Group Limited, described above. Fourth quarter 2005 noninterest expenses of $304 million increased $71 million compared to the third quarter 2005, primarily due to increases in the provision for credit losses on lending-related commitments, net corporate overhead expenses, incentive compensation and other real estate expenses.
Net income for the Western market was $63 million for the fourth quarter 2005, compared to $87 million for the third quarter 2005. Net interest income (FTE) of $188 million in the fourth quarter 2005 decreased $26 million from the third quarter 2005. The decrease in net interest income (FTE) was primarily due to higher levels of low rate loans in the Financial Services Division in the fourth quarter 2005, compared to the third quarter 2005, and a $20 million positive adjustment in the third quarter 2005 resulting from a warrant accounting change. Average loans of $15.0 billion in the fourth quarter 2005 increased $734 million compared to the third quarter 2005, primarily due to increases in loans in the Financial Service Division, National Dealer Services, and Commercial Real Estate businesses. Average deposits of $17.0 billion in the fourth quarter 2005 decreased $367 million compared to the third quarter 2005, primarily due to a decrease in deposits in the Financial Services Division.
Net income for the Texas market was $19 million for the fourth quarter 2005, compared to $21 million for the third quarter 2005. Average loans of $5.3 billion in the fourth quarter 2005 increased $181 million, compared to third quarter 2005. Average deposits of $3.7 billion in the fourth quarter 2005 increased $107 million compared to the third quarter 2005.
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COMERICA REPORTS FOURTH QUARTER AND 2005 EARNINGS — 7
Conference Call and Webcast
Comerica will host a conference call to review fourth quarter and full year 2005 financial results at 8 a.m. ET Thursday, January 19, 2006. Interested parties may access the conference call by calling (706) 679-5261 (event ID No. 3603986). 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 Sunday, February 19, 2006. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 3603986). 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, automotive production, the anticipated performance of any new banking centers, 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.
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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
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| | | Three Months Ended | | Years Ended |
| | | December 31, | | September 30, | | December 31, | | December 31, | | |
| (in millions, except per share data) | | 2005 | | 2005 | | 2004 | | 2005 | | 2004 |
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PER SHARE AND COMMON STOCK DATA | | | | | | | | | | | | | | | | | | | | |
| Diluted net income | | $ | 1.25 | | | $ | 1.41 | | | $ | 1.21 | | | $ | 5.11 | | | $ | 4.36 | |
| Cash dividends declared | | | 0.55 | | | | 0.55 | | | | 0.52 | | | | 2.20 | | | | 2.08 | |
| Common shareholders’ equity (at period end) | | | 31.11 | | | | 30.81 | | | | 29.94 | | | | | | | | | |
| Average diluted shares (in thousands) | | | 165,738 | | | | 168,387 | | | | 172,224 | | | | 168,685 | | | | 173,816 | |
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KEY RATIOS | | | | | | | | | | | | | | | | | | | | |
| Return on average common shareholders’ equity | | | 16.28 | % | | | 18.59 | % | | | 16.39 | % | | | 16.90 | % | | | 15.03 | % |
| Return on average assets | | | 1.53 | | | | 1.78 | | | | 1.63 | | | | 1.64 | | | | 1.49 | |
| Average common shareholders’ equity as a percentage of average assets | | | 9.42 | | | | 9.57 | | | | 9.93 | | | | 9.71 | | | | 9.90 | |
| Tier 1 common capital ratio * | | | 7.83 | | | | 7.98 | | | | 8.13 | | | | | | | | | |
| Tier 1 risk-based capital ratio * | | | 8.44 | | | | 8.60 | | | | 8.77 | | | | | | | | | |
| Total risk-based capital ratio * | | | 11.66 | | | | 12.07 | | | | 12.75 | | | | | | | | | |
| Leverage ratio * | | | 10.02 | | | | 10.07 | | | | 10.37 | | | | | | | | | |
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AVERAGE BALANCES | | | | | | | | | | | | | | | | | | | | |
| Commercial loans | | $ | 25,666 | | | $ | 25,230 | | | $ | 22,563 | | | $ | 24,575 | | | $ | 22,139 | |
| Real estate construction loans | | | 3,416 | | | | 3,202 | | | | 3,178 | | | | 3,194 | | | | 3,264 | |
| Commercial mortgage loans | | | 8,799 | | | | 8,631 | | | | 7,999 | | | | 8,566 | | | | 7,991 | |
| Residential mortgage loans | | | 1,465 | | | | 1,418 | | | | 1,275 | | | | 1,388 | | | | 1,237 | |
| Consumer loans | | | 2,675 | | | | 2,703 | | | | 2,721 | | | | 2,696 | | | | 2,668 | |
| Lease financing | | | 1,288 | | | | 1,300 | | | | 1,259 | | | | 1,283 | | | | 1,272 | |
| International loans | | | 1,940 | | | | 2,098 | | | | 2,134 | | | | 2,114 | | | | 2,162 | |
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| Total loans | | $ | 45,249 | | | $ | 44,582 | | | $ | 41,129 | | | $ | 43,816 | | | $ | 40,733 | |
| Earning assets | | | 49,764 | | | | 49,066 | | | | 47,018 | | | | 48,232 | | | | 46,975 | |
| Total assets | | | 54,130 | | | | 53,462 | | | | 51,116 | | | | 52,506 | | | | 50,948 | |
| Interest-bearing deposits | | | 26,320 | | | | 25,540 | | | | 25,572 | | | | 25,633 | | | | 26,023 | |
| Total interest-bearing liabilities | | | 32,683 | | | | 31,488 | | | | 30,192 | | | | 31,270 | | | | 30,838 | |
| Noninterest-bearing deposits | | | 15,158 | | | | 15,734 | | | | 14,755 | | | | 15,007 | | | | 14,122 | |
| Common shareholders’ equity | | | 5,101 | | | | 5,116 | | | | 5,077 | | | | 5,097 | | | | 5,041 | |
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NET INTEREST INCOME | | | | | | | | | | | | | | | | | | | | |
| Net interest income (fully taxable equivalent basis) | | $ | 502 | | | $ | 513 | | | $ | 467 | | | $ | 1,960 | | | $ | 1,813 | |
| Fully taxable equivalent adjustment | | | 1 | | | | 1 | | | | 1 | | | | 4 | | | | 3 | |
| Net interest margin | | | 4.00 | % | | | 4.15 | % | | | 3.96 | % | | | 4.06 | % | | | 3.86 | % |
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CREDIT QUALITY | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 138 | | | $ | 186 | | | $ | 312 | | | | | | | | | |
| Other real estate | | | 24 | | | | 34 | | | | 27 | | | | | | | | | |
| Total nonperforming assets | | | 162 | | | | 220 | | | | 339 | | | | | | | | | |
| Loans 90 days past due and still accruing | | | 16 | | | | 14 | | | | 15 | | | | | | | | | |
| Gross loan charge-offs | | | 38 | | | | 47 | | | | 55 | | | $ | 174 | | | $ | 268 | |
| Loan recoveries | | | 16 | | | | 26 | | | | 20 | | | | 64 | | | | 74 | |
| Net loan charge-offs | | | 22 | | | | 21 | | | | 35 | | | | 110 | | | | 194 | |
| Allowance for loan losses as a percentage of total loans | | | 1.19 | % | | | 1.33 | % | | | 1.65 | % | | | | | | | | |
| Net loans charged off as a percentage of average total loans | | | 0.20 | | | | 0.18 | | | | 0.34 | | | | 0.25 | % | | | 0.48 | % |
| Nonperforming assets as a percentage of total loans, other real estate and nonaccrual debt securities | | | 0.37 | | | | 0.52 | | | | 0.83 | | | | | | | | | |
| Allowance for loan losses as a percentage of total nonperforming assets | | | 319 | | | | 253 | | | | 198 | | | | | | | | | |
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ADDITIONAL DATA | | | | | | | | | | | | | | | | | | | | |
| Goodwill | | $ | 213 | | | $ | 247 | | | $ | 247 | | | | | | | | | |
| Other intangibles | | | 1 | | | | 1 | | | | 1 | | | | | | | | | |
| Loan servicing rights | | | 19 | | | | 19 | | | | 20 | | | | | | | | | |
| Deferred mutual fund distribution costs | | | 6 | | | | 7 | | | | 8 | | | | | | | | | |
| Amortization of intangibles | | | — | | | | — | | | | — | | | $ | — | | | $ | 1 | |
| |
| | |
| * | | December 31, 2005 ratios are estimated |
-8-
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | |
| | | December 31, | | | September 30, | | | December 31, | |
| (in millions, except share data) | | 2005 | | | 2005 | | | 2004 | |
| |
ASSETS | | | | | | | | | | | | |
| Cash and due from banks | | $ | 1,609 | | | $ | 1,795 | | | $ | 1,139 | |
| Short-term investments | | | 1,159 | | | | 3,619 | | | | 3,230 | |
| Investment securities available-for-sale | | | 4,240 | | | | 4,088 | | | | 3,943 | |
| |
| Commercial loans | | | 23,545 | | | | 22,754 | | | | 22,039 | |
| Real estate construction loans | | | 3,482 | | | | 3,289 | | | | 3,053 | |
| Commercial mortgage loans | | | 8,867 | | | | 8,700 | | | | 8,236 | |
| Residential mortgage loans | | | 1,485 | | | | 1,444 | | | | 1,294 | |
| Consumer loans | | | 2,697 | | | | 2,696 | | | | 2,751 | |
| Lease financing | | | 1,295 | | | | 1,286 | | | | 1,265 | |
| International loans | | | 1,876 | | | | 1,972 | | | | 2,205 | |
| |
| Total loans | | | 43,247 | | | | 42,141 | | | | 40,843 | |
| Less allowance for loan losses | | | (516 | ) | | | (558 | ) | | | (673 | ) |
| |
| Net loans | | | 42,731 | | | | 41,583 | | | | 40,170 | |
| | | | | | | | | | | | | |
| Premises and equipment | | | 510 | | | | 499 | | | | 415 | |
| Customers’ liability on acceptances outstanding | | | 59 | | | | 39 | | | | 57 | |
| Accrued income and other assets | | | 2,705 | | | | 2,726 | | | | 2,812 | |
| |
| Total assets | | $ | 53,013 | | | $ | 54,349 | | | $ | 51,766 | |
| |
| | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | |
| Noninterest-bearing deposits | | $ | 15,666 | | | $ | 17,702 | | | $ | 15,164 | |
| Interest-bearing deposits | | | 26,765 | | | | 25,968 | | | | 25,772 | |
| |
| Total deposits | | | 42,431 | | | | 43,670 | | | | 40,936 | |
| | | | | | | | | | | | | |
| Short-term borrowings | | | 302 | | | | 241 | | | | 193 | |
| Acceptances outstanding | | | 59 | | | | 39 | | | | 57 | |
| Accrued expenses and other liabilities | | | 1,192 | | | | 1,242 | | | | 1,189 | |
| Medium- and long-term debt | | | 3,961 | | | | 4,066 | | | | 4,286 | |
| |
| Total liabilities | | | 47,945 | | | | 49,258 | | | | 46,661 | |
| | | | | | | | | | | | | |
| Common stock — $5 par value: | | | | | | | | | | | | |
Authorized — 325,000,000 shares
Issued — 178,735,252 shares at 12/31/05, 9/30/05 and 12/31/04 | | | 894 | | | | 894 | | | | 894 | |
| Capital surplus | | | 461 | | | | 448 | | | | 421 | |
| Accumulated other comprehensive loss | | | (170 | ) | | | (158 | ) | | | (69 | ) |
| Retained earnings | | | 4,796 | | | | 4,683 | | | | 4,331 | |
| Less cost of common stock in treasury — 15,834,985 shares at 12/31/05, 13,469,654 shares at 9/30/05 and 8,259,328 shares at 12/31/04 | | | (913 | ) | | | (776 | ) | | | (472 | ) |
| |
| Total shareholders’ equity | | | 5,068 | | | | 5,091 | | | | 5,105 | |
| |
| Total liabilities and shareholders’ equity | | $ | 53,013 | | | $ | 54,349 | | | $ | 51,766 | |
| |
-9-
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Years Ended | |
| | | December 31, | | | December 31, | |
| (in millions, except per share data) | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| |
INTEREST INCOME | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 698 | | | $ | 544 | | | $ | 2,554 | | | $ | 2,054 | |
| Interest on investment securities | | | 41 | | | | 36 | | | | 148 | | | | 147 | |
| Interest on short-term investments | | | 6 | | | | 11 | | | | 24 | | | | 36 | |
| |
| Total interest income | | | 745 | | | | 591 | | | | 2,726 | | | | 2,237 | |
| | | | | | | | | | | | | | | | | |
INTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 171 | | | | 91 | | | | 548 | | | | 315 | |
| Interest on short-term borrowings | | | 24 | | | | 2 | | | | 52 | | | | 4 | |
| Interest on medium- and long-term debt | | | 49 | | | | 32 | | | | 170 | | | | 108 | |
| |
| Total interest expense | | | 244 | | | | 125 | | | | 770 | | | | 427 | |
| |
| Net interest income | | | 501 | | | | 466 | | | | 1,956 | | | | 1,810 | |
| Provision for loan losses | | | (20 | ) | | | (21 | ) | | | (47 | ) | | | 64 | |
| |
| Net interest income after provision for loan losses | | | 521 | | | | 487 | | | | 2,003 | | | | 1,746 | |
| | | | | | | | | | | | | | | | | |
NONINTEREST INCOME | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 55 | | | | 53 | | | | 218 | | | | 231 | |
| Fiduciary income | | | 44 | | | | 43 | | | | 177 | | | | 171 | |
| Commercial lending fees | | | 19 | | | | 14 | | | | 63 | | | | 55 | |
| Letter of credit fees | | | 14 | | | | 17 | | | | 70 | | | | 66 | |
| Foreign exchange income | | | 10 | | | | 9 | | | | 37 | | | | 37 | |
| Brokerage fees | | | 9 | | | | 9 | | | | 36 | | | | 36 | |
| Investment advisory revenue, net | | | 15 | | | | 9 | | | | 51 | | | | 35 | |
| Card fees | | | 11 | | | | 9 | | | | 39 | | | | 32 | |
| Bank-owned life insurance | | | 10 | | | | 6 | | | | 38 | | | | 34 | |
| Equity in earnings of unconsolidated subsidiaries | | | 3 | | | | 1 | | | | 16 | | | | 12 | |
| Warrant income | | | 2 | | | | 1 | | | | 9 | | | | 7 | |
| Net gain on sales of businesses | | | 55 | | | | — | | | | 56 | | | | 7 | |
| Other noninterest income | | | 34 | | | | 32 | | | | 132 | | | | 134 | |
| |
| Total noninterest income | | | 281 | | | | 203 | | | | 942 | | | | 857 | |
| | | | | | | | | | | | | | | | | |
NONINTEREST EXPENSES | | | | | | | | | | | | | | | | |
| Salaries | | | 225 | | | | 193 | | | | 820 | | | | 760 | |
| Employee benefits | | | 47 | | | | 40 | | | | 184 | | | | 159 | |
| |
| Total salaries and employee benefits | | | 272 | | | | 233 | | | | 1,004 | | | | 919 | |
| Net occupancy expense | | | 31 | | | | 32 | | | | 121 | | | | 125 | |
| Equipment expense | | | 14 | | | | 15 | | | | 56 | | | | 58 | |
| Outside processing fee expense | | | 22 | | | | 17 | | | | 78 | | | | 68 | |
| Software expense | | | 14 | | | | 12 | | | | 49 | | | | 43 | |
| Customer services | | | 19 | | | | 6 | | | | 69 | | | | 23 | |
| Litigation and operational losses | | | 4 | | | | (3 | ) | | | 18 | | | | 24 | |
| Provision for credit losses on lending-related commitments | | | 25 | | | | (3 | ) | | | 18 | | | | (12 | ) |
| Other noninterest expenses | | | 86 | | | | 71 | | | | 253 | | | | 245 | |
| |
| Total noninterest expenses | | | 487 | | | | 380 | | | | 1,666 | | | | 1,493 | |
| |
| Income before income taxes | | | 315 | | | | 310 | | | | 1,279 | | | | 1,110 | |
| Provision for income taxes | | | 108 | | | | 103 | | | | 418 | | | | 353 | |
| |
NET INCOME | | $ | 207 | | | $ | 207 | | | $ | 861 | | | $ | 757 | |
| |
| | | | | | | | | | | | | | | | | |
| Basic net income per common share | | $ | 1.27 | | | $ | 1.22 | | | $ | 5.17 | | | $ | 4.41 | |
| Diluted net income per common share | | | 1.25 | | | | 1.21 | | | | 5.11 | | | | 4.36 | |
| Cash dividends declared on common stock | | | 90 | | | | 88 | | | | 367 | | | | 356 | |
| Dividends per common share | | | 0.55 | | | | 0.52 | | | | 2.20 | | | | 2.08 | |
| |
-10-
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Fourth | | | Third | | | Second | | | First | | | Fourth | | | Fourth Quarter 2005 Compared To: | |
| | | Quarter | | | Quarter | | | Quarter | | | Quarter | | | Quarter | | | Third Quarter 2005 | | | Fourth Quarter 2004 | |
| (in millions, except per share data) | | 2005 | | | 2005 | | | 2005 | | | 2005 | | | 2004 | | | Amount | | | Percent | | | Amount | | | Percent | |
| |
INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 698 | | | $ | 674 | | | $ | 616 | | | $ | 566 | | | $ | 544 | | | $ | 24 | | | | 3.5 | % | | $ | 154 | | | | 28.1 | % |
| Interest on investment securities | | | 41 | | | | 38 | | | | 34 | | | | 35 | | | | 36 | | | | 3 | | | | 8.0 | | | | 5 | | | | 15.3 | |
| Interest on short-term investments | | | 6 | | | | 7 | | | | 5 | | | | 6 | | | | 11 | | | | (1 | ) | | | (0.7 | ) | | | (5 | ) | | | (40.2 | ) |
| |
| Total interest income | | | 745 | | | | 719 | | | | 655 | | | | 607 | | | | 591 | | | | 26 | | | | 3.7 | | | | 154 | | | | 26.1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 171 | | | | 147 | | | | 122 | | | | 108 | | | | 91 | | | | 24 | | | | 17.2 | | | | 80 | | | | 88.2 | |
| Interest on short-term borrowings | | | 24 | | | | 16 | | | | 9 | | | | 3 | | | | 2 | | | | 8 | | | | 50.5 | | | | 22 | | | | N/M | |
| Interest on medium- and long-term debt | | | 49 | | | | 44 | | | | 41 | | | | 36 | | | | 32 | | | | 5 | | | | 8.3 | | | | 17 | | | | 52.0 | |
| |
| Total interest expense | | | 244 | | | | 207 | | | | 172 | | | | 147 | | | | 125 | | | | 37 | | | | 17.8 | | | | 119 | | | | 96.4 | |
| |
| Net interest income | | | 501 | | | | 512 | | | | 483 | | | | 460 | | | | 466 | | | | (11 | ) | | | (2.1 | ) | | | 35 | | | | 7.4 | |
| Provision for loan losses | | | (20 | ) | | | (30 | ) | | | 2 | | | | 1 | | | | (21 | ) | | | 10 | | | | 33.3 | | | | 1 | | | | 4.8 | |
| |
| Net interest income after provision for loan losses | | | 521 | | | | 542 | | | | 481 | | | | 459 | | | | 487 | | | | (21 | ) | | | (3.8 | ) | | | 34 | | | | 6.9 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 55 | | | | 55 | | | | 54 | | | | 54 | | | | 53 | | | | — | | | | (1.4 | ) | | | 2 | | | | 3.1 | |
| Fiduciary income | | | 44 | | | | 44 | | | | 43 | | | | 46 | | | | 43 | | | | — | | | | (0.6 | ) | | | 1 | | | | 2.2 | |
| Commercial lending fees | | | 19 | | | | 16 | | | | 16 | | | | 12 | | | | 14 | | | | 3 | | | | 21.4 | | | | 5 | | | | 47.1 | |
| Letter of credit fees | | | 14 | | | | 18 | | | | 18 | | | | 20 | | | | 17 | | | | (4 | ) | | | (24.0 | ) | | | (3 | ) | | | (18.7 | ) |
| Foreign exchange income | | | 10 | | | | 9 | | | | 9 | | | | 9 | | | | 9 | | | | 1 | | | | 2.1 | | | | 1 | | | | 7.6 | |
| Brokerage fees | | | 9 | | | | 10 | | | | 9 | | | | 8 | | | | 9 | | | | (1 | ) | | | (6.6 | ) | | | — | | | | (1.2 | ) |
| Investment advisory revenue, net | | | 15 | | | | 14 | | | | 12 | | | | 10 | | | | 9 | | | | 1 | | | | 7.5 | | | | 6 | | | | 58.2 | |
| Card fees | | | 11 | | | | 10 | | | | 9 | | | | 9 | | | | 9 | | | | 1 | | | | 8.6 | | | | 2 | | | | 25.4 | |
| Bank-owned life insurance | | | 10 | | | | 9 | | | | 10 | | | | 9 | | | | 6 | | | | 1 | | | | 7.9 | | | | 4 | | | | 42.5 | |
| Equity in earnings of unconsolidated subsidiaries | | | 3 | | | | 4 | | | | 4 | | | | 5 | | | | 1 | | | | (1 | ) | | | (29.0 | ) | | | 2 | | | | 168.6 | |
| Warrant income | | | 2 | | | | 2 | | | | 3 | | | | 2 | | | | 1 | | | | — | | | | 39.1 | | | | 1 | | | | 47.6 | |
| Net gain on sales of businesses | | | 55 | | | | 1 | | | | — | | | | — | | | | — | | | | 54 | | | | N/M | | | | 55 | | | | N/M | |
| Other noninterest income | | | 34 | | | | 40 | | | | 32 | | | | 26 | | | | 32 | | | | (6 | ) | | | (14.9 | ) | | | 2 | | | | 7.9 | |
| |
| Total noninterest income | | | 281 | | | | 232 | | | | 219 | | | | 210 | | | | 203 | | | | 49 | | | | 20.5 | | | | 78 | | | | 37.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NONINTEREST EXPENSES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries | | | 225 | | | | 209 | | | | 197 | | | | 189 | | | | 193 | | | | 16 | | | | 7.7 | | | | 32 | | | | 16.7 | |
| Employee benefits | | | 47 | | | | 46 | | | | 44 | | | | 47 | | | | 40 | | | | 1 | | | | 1.4 | | | | 7 | | | | 15.0 | |
| |
| Total salaries and employee benefits | | | 272 | | | | 255 | | | | 241 | | | | 236 | | | | 233 | | | | 17 | | | | 6.5 | | | | 39 | | | | 16.4 | |
| Net occupancy expense | | | 31 | | | | 30 | | | | 28 | | | | 32 | | | | 32 | | | | 1 | | | | 5.3 | | | | (1 | ) | | | (4.9 | ) |
| Equipment expense | | | 14 | | | | 14 | | | | 14 | | | | 14 | | | | 15 | | | | — | | | | (0.1 | ) | | | (1 | ) | | | (2.0 | ) |
| Outside processing fee expense | | | 22 | | | | 19 | | | | 20 | | | | 17 | | | | 17 | | | | 3 | | | | 10.8 | | | | 5 | | | | 27.2 | |
| Software expense | | | 14 | | | | 12 | | | | 11 | | | | 12 | | | | 12 | | | | 2 | | | | 21.1 | | | | 2 | | | | 18.1 | |
| Customer services | | | 19 | | | | 29 | | | | 10 | | | | 11 | | | | 6 | | | | (10 | ) | | | (34.7 | ) | | | 13 | | | | 241.1 | |
| Litigation and operational losses | | | 4 | | | | 4 | | | | 7 | | | | 3 | | | | (3 | ) | | | — | | | | 31.0 | | | | 7 | | | | (226.1 | ) |
| Provision for credit losses on lending-related commitments | | | 25 | | | | (1 | ) | | | (3 | ) | | | (3 | ) | | | (3 | ) | | | 26 | | | | N/M | | | | 28 | | | | N/M | |
| Other noninterest expenses | | | 86 | | | | 60 | | | | 55 | | | | 52 | | | | 71 | | | | 26 | | | | 43.0 | | | | 15 | | | | 20.6 | |
| |
| Total noninterest expenses | | | 487 | | | | 422 | | | | 383 | | | | 374 | | | | 380 | | | | 65 | | | | 15.4 | | | | 107 | | | | 28.2 | |
| |
| Income before income taxes | | | 315 | | | | 352 | | | | 317 | | | | 295 | | | | 310 | | | | (37 | ) | | | (10.7 | ) | | | 5 | | | | 1.1 | |
| Provision for income taxes | | | 108 | | | | 114 | | | | 100 | | | | 96 | | | | 103 | | | | (6 | ) | | | (6.7 | ) | | | 5 | | | | 3.6 | |
| |
NET INCOME | | $ | 207 | | | $ | 238 | | | $ | 217 | | | $ | 199 | | | $ | 207 | | | $ | (31 | ) | | | (12.7 | )% | | $ | — | | | | (0.2) | % |
| |
| Basic net income per common share | | $ | 1.27 | | | $ | 1.43 | | | $ | 1.29 | | | $ | 1.18 | | | $ | 1.22 | | | $ | (0.16 | ) | | | (11.2 | )% | | $ | 0.05 | | | | 4.1 | % |
| Diluted net income per common share | | | 1.25 | | | | 1.41 | | | | 1.28 | | | | 1.16 | | | | 1.21 | | | | (0.16 | ) | | | (11.3 | ) | | | 0.04 | | | | 3.3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash dividends declared on common stock | | | 90 | | | | 92 | | | | 92 | | | | 93 | | | | 88 | | | | (2 | ) | | | (2.6 | ) | | | 2 | | | | 1.7 | |
| Dividends per common share | | | 0.55 | | | | 0.55 | | | | 0.55 | | | | 0.55 | | | | 0.52 | | | | — | | | | 0.0 | | | | 0.03 | | | | 5.8 | |
| |
N/M — Not meaningful
-11-
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | |
| | | 2005 | | | 2004 |
| (in millions) | | 4th Qtr | | | 3rd Qtr | | | 2nd Qtr | | | 1st Qtr | | | 4th Qtr |
| |
| Balance at beginning of period | | $ | 558 | | | $ | 609 | | | $ | 636 | | | $ | 673 | | | $ | 729 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loans charged-off: | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 14 | | | | 20 | | | | 29 | | | | 28 | | | | 39 | |
| 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 | | | 1 | | | | 4 | | | | 5 | | | | 3 | | | | — | |
| |
| Total commercial mortgage | | | 1 | | | | 4 | | | | 7 | | | | 5 | | | | 4 | |
| Residential mortgage | | | 1 | | | | — | | | | — | | | | — | | | | — | |
| Consumer | | | 3 | | | | 6 | | | | 3 | | | | 3 | | | | 5 | |
| Lease financing | | | 18 | | | | 13 | | | | 3 | | | | 3 | | | | 4 | |
| International | | | — | | | | 3 | | | | 1 | | | | 7 | | | | 3 | |
| |
| Total loans charged-off | | | 38 | | | | 47 | | | | 43 | | | | 46 | | | | 55 | |
| | | | | | | | | | | | | | | | | | | | | |
| Recoveries on loans previously charged-off: | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 13 | | | | 23 | | | | 12 | | | | 7 | | | | 14 | |
| Real estate construction | | | — | | | | — | | | | — | | | | — | | | | — | |
| Commercial mortgage | | | 1 | | | | 1 | | | | 1 | | | | — | | | | 1 | |
| Residential mortgage | | | — | | | | — | | | | — | | | | — | | | | — | |
| Consumer | | | 2 | | | | 2 | | | | — | | | | 1 | | | | — | |
| Lease financing | | | — | | | | — | | | | — | | | | — | | | | — | |
| International | | | — | | | | — | | | | 1 | | | | — | | | | 5 | |
| |
| Total recoveries | | | 16 | | | | 26 | | | | 14 | | | | 8 | | | | 20 | |
| |
| Net loans charged-off | | | 22 | | | | 21 | | | | 29 | | | | 38 | | | | 35 | |
| Provision for loan losses | | | (20 | ) | | | (30 | ) | | | 2 | | | | 1 | | | | (21 | ) |
| |
| Balance at end of period | | $ | 516 | | | $ | 558 | | | $ | 609 | | | $ | 636 | | | $ | 673 | |
| |
| | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses as a percentage of total loans | | | 1.19 | % | | | 1.33 | % | | | 1.41 | % | | | 1.52 | % | | | 1.65 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Net loans charged-off as a percentage of average total loans | | | 0.20 | | | | 0.18 | | | | 0.27 | | | | 0.36 | | | | 0.34 | |
| |
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | |
| | | 2005 | | | 2004 |
| (in millions) | | 4th Qtr | | | 3rd Qtr | | | 2nd Qtr | | | 1st Qtr | | | 4th Qtr |
| |
| | | | | | | | | | | | | | | | | | | | | |
| Balance at beginning of period | | $ | 14 | | | $ | 15 | | | $ | 18 | | | $ | 21 | | | $ | 24 | |
| Charge-offs on lending-related commitments (1) | | | 6 | | | | — | | | | — | | | | — | | | | — | |
| Provision for credit losses on lending-related commitments | | | 25 | | | | (1 | ) | | | (3 | ) | | | (3 | ) | | | (3 | ) |
| |
| Balance at end of period | | $ | 33 | | | $ | 14 | | | $ | 15 | | | $ | 18 | | | $ | 21 | |
| |
(1) Charge-offs result from the sale of unfunded lending-related commitments.
-12-
NONPERFORMING ASSETS
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | |
| | | 2005 | | 2004 |
| (in millions) | | 4th Qtr | | 3rd Qtr | | 2nd Qtr | | 1st Qtr | | 4th Qtr |
| |
| SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS | | | | | | | | | | | | |
| Nonaccrual loans: | | | | | | | | | | | | | | | | | | | | |
| Commercial | | $ | 65 | | | $ | 81 | | | $ | 125 | | | $ | 161 | | | $ | 161 | |
| Real estate construction: | | | | | | | | | | | | | | | | | | | | |
| Real estate construction business line | | | 3 | | | | 4 | | | | 8 | | | | 18 | | | | 31 | |
| Other | | | — | | | | — | | | | 2 | | | | 2 | | | | 3 | |
| |
| Total real estate construction | | | 3 | | | | 4 | | | | 10 | | | | 20 | | | | 34 | |
| Commercial mortgage: | | | | | | | | | | | | | | | | | | | | |
| Commercial real estate business line | | | 6 | | | | 9 | | | | 9 | | | | 11 | | | | 6 | |
| Other | | | 29 | | | | 35 | | | | 32 | | | | 38 | | | | 58 | |
| |
| Total commercial mortgage | | | 35 | | | | 44 | | | | 41 | | | | 49 | | | | 64 | |
| Residential mortgage | | | 2 | | | | 1 | | | | 2 | | | | 2 | | | | 1 | |
| Consumer | | | 2 | | | | 1 | | | | 2 | | | | 1 | | | | 1 | |
| Lease financing | | | 13 | | | | 39 | | | | 9 | | | | 12 | | | | 15 | |
| International | | | 18 | | | | 16 | | | | 23 | | | | 24 | | | | 36 | |
| |
| Total nonaccrual loans | | | 138 | | | | 186 | | | | 212 | | | | 269 | | | | 312 | |
| Reduced-rate loans | | | — | | | | — | | | | — | | | | — | | | | — | |
| |
| Total nonperforming loans | | | 138 | | | | 186 | | | | 212 | | | | 269 | | | | 312 | |
| Other real estate | | | 24 | | | | 34 | | | | 34 | | | | 42 | | | | 27 | |
| Nonaccrual debt securities | | | — | | | | — | | | | — | | | | — | | | | — | |
| |
| Total nonperforming assets | | $ | 162 | | | $ | 220 | | | $ | 246 | | | $ | 311 | | | $ | 339 | |
| |
| Nonperforming loans as a percentage of total loans | | | 0.32 | % | | | 0.44 | % | | | 0.49 | % | | | 0.64 | % | | | 0.76 | % |
| Nonperforming assets as a percentage of total loans, other real estate and nonaccrual debt securities | | | 0.37 | | | | 0.52 | | | | 0.57 | | | | 0.75 | | | | 0.83 | |
| Allowance for loan losses as a percentage of total nonperforming assets | | | 319 | | | | 253 | | | | 248 | | | | 204 | | | | 198 | |
| Loans past due 90 days or more and still accruing | | $ | 16 | | | $ | 14 | | | $ | 24 | | | $ | 23 | | | $ | 15 | |
| | | | | | | | | | | | | | | | | | | | | |
| |
| | | | | | | | | | | | | | | | | | | | | |
ANALYSIS OF NONACCRUAL LOANS | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans at beginning of period | | $ | 186 | | | $ | 212 | | | $ | 269 | | | $ | 312 | | | $ | 361 | |
| Loans transferred to nonaccrual (1) | | | 28 | | | | 81 | | | | 47 | | | | 66 | | | | 71 | |
| Nonaccrual business loan gross charge-offs (2) | | | (34 | ) | | | (40 | ) | | | (38 | ) | | | (42 | ) | | | (49 | ) |
| Loans transferred to accrual status (1) | | | (11 | ) | | | — | | | | — | | | | (4 | ) | | | (7 | ) |
| Nonaccrual business loans sold (3) | | | (4 | ) | | | (19 | ) | | | — | | | | (14 | ) | | | (33 | ) |
| Payments/Other (4) | | | (27 | ) | | | (48 | ) | | | (66 | ) | | | (49 | ) | | | (31 | ) |
| |
| Nonaccrual loans at end of period | | $ | 138 | | | $ | 186 | | | $ | 212 | | | $ | 269 | | | $ | 312 | |
| |
| | | | | | | | | | | | | | | | | | | | | |
| (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 | | $ | 34 | | | $ | 40 | | | $ | 38 | | | $ | 42 | | | $ | 49 | |
| Performing watch list loans | | | — | | | | 1 | | | | 2 | | | | 1 | | | | 1 | |
| Consumer loans and residential mortgage loans | | | 4 | | | | 6 | | | | 3 | | | | 3 | | | | 5 | |
| | | |
| Total gross loan charge-offs | | $ | 38 | | | $ | 47 | | | $ | 43 | | | $ | 46 | | | $ | 55 | |
| | | |
| (3) Analysis of loans sold: |
| | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual business loans | | $ | 4 | | | $ | 19 | | | $ | — | | | $ | 14 | | | $ | 33 | |
| Performing watch list loans sold | | | 15 | | | | 34 | | | | 7 | | | | 4 | | | | 7 | |
| | | |
| Total loans sold | | $ | 19 | | | $ | 53 | | | $ | 7 | | | $ | 18 | | | $ | 40 | |
| | | |
| (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. |
-13-
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | December 31, 2005 | | | September 30, 2005 | | | December 31, 2004 | |
| | | Average | | | | | | | Average | | | Average | | | | | | | Average | | | Average | | | | | | | Average | |
| (dollar amounts in millions) | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | |
| |
| |
| Commercial loans (1) (2) (3) | | $ | 25,666 | | | $ | 388 | | | | 5.99 | % | | $ | 25,230 | | | $ | 378 | | | | 5.95 | % | | $ | 22,563 | | | $ | 265 | | | | 4.66 | % |
|
| Real estate construction loans | | | 3,416 | | | | 68 | | | | 7.94 | | | | 3,202 | | | | 60 | | | | 7.40 | | | | 3,178 | | | | 48 | | | | 5.99 | |
| Commercial mortgage loans (1) | | | 8,799 | | | | 149 | | | | 6.70 | | | | 8,631 | | | | 138 | | | | 6.37 | | | | 7,999 | | | | 111 | | | | 5.53 | |
| Residential mortgage loans | | | 1,465 | | | | 22 | | | | 5.87 | | | | 1,418 | | | | 20 | | | | 5.76 | | | | 1,275 | | | | 18 | | | | 5.59 | |
| Consumer loans | | | 2,675 | | | | 43 | | | | 6.45 | | | | 2,703 | | | | 41 | | | | 6.04 | | | | 2,721 | | | | 34 | | | | 5.04 | |
| Lease financing | | | 1,288 | | | | 13 | | | | 4.08 | | | | 1,300 | | | | 10 | | | | 2.98 | | | | 1,259 | | | | 13 | | | | 4.09 | |
| International loans | | | 1,940 | | | | 32 | | | | 6.52 | | | | 2,098 | | | | 33 | | | | 6.27 | | | | 2,134 | | | | 29 | | | | 5.40 | |
| Business loan swap income | | | — | | | | (16 | ) | | | — | | | | — | | | | (5 | ) | | | — | | | | — | | | | 28 | | | | — | |
| | | |
| Total loans (2) (3) | | | 45,249 | | | | 699 | | | | 6.13 | | | | 44,582 | | | | 675 | | | | 6.01 | | | | 41,129 | | | | 546 | | | | 5.28 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment securities available-for-sale (4) | | | 4,037 | | | | 41 | | | | 3.97 | | | | 3,935 | | | | 38 | | | | 3.80 | | | | 4,052 | | | | 35 | | | | 3.48 | |
| Short-term investments | | | 478 | | | | 6 | | | | 5.42 | | | | 549 | | | | 7 | | | | 4.76 | | | | 1,837 | | | | 11 | | | | 2.36 | |
| | | |
| Total earning assets | | | 49,764 | | | | 746 | | | | 5.94 | | | | 49,066 | | | | 720 | | | | 5.82 | | | | 47,018 | | | | 592 | | | | 5.01 | |
| Cash and due from banks | | | 1,757 | | | | | | | | | | | | 1,788 | | | | | | | | | | | | 1,698 | | | | | | | | | |
| Allowance for loan losses | | | (562 | ) | | | | | | | | | | | (601 | ) | | | | | | | | | | | (731 | ) | | | | | | | | |
| Accrued income and other assets | | | 3,171 | | | | | | | | | | | | 3,209 | | | | | | | | | | | | 3,131 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 54,130 | | | | | | | | | | | $ | 53,462 | | | | | | | | | | | $ | 51,116 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Money market and NOW deposits (1) | | $ | 17,152 | | | | 102 | | | | 2.36 | | | $ | 16,987 | | | | 89 | | | | 2.09 | | | $ | 17,755 | | | | 57 | | | | 1.27 | |
| Savings deposits (1) | | | 1,502 | | | | 1 | | | | 0.61 | | | | 1,531 | | | | 2 | | | | 0.52 | | | | 1,605 | | | | 1 | | | | 0.41 | |
| Certificates of deposit (1) | | | 6,723 | | | | 57 | | | | 3.35 | | | | 5,912 | | | | 44 | | | | 2.92 | | | | 5,520 | | | | 28 | | | | 2.01 | |
| Foreign office time deposits | | | 943 | | | | 11 | | | | 4.46 | | | | 1,110 | | | | 12 | | | | 4.21 | | | | 692 | | | | 5 | | | | 2.99 | |
| | | |
| Total interest-bearing deposits | | | 26,320 | | | | 171 | | | | 2.59 | | | | 25,540 | | | | 147 | | | | 2.28 | | | | 25,572 | | | | 91 | | | | 1.42 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-term borrowings | | | 2,350 | | | | 24 | | | | 4.06 | | | | 1,804 | | | | 16 | | | | 3.52 | | | | 278 | | | | 2 | | | | 1.85 | |
| Medium- and long-term debt | | | 4,013 | | | | 49 | | | | 4.77 | | | | 4,144 | | | | 44 | | | | 4.26 | | | | 4,342 | | | | 32 | | | | 2.91 | |
| | | |
| Total interest-bearing sources | | | 32,683 | | | | 244 | | | | 2.96 | | | | 31,488 | | | | 207 | | | | 2.61 | | | | 30,192 | | | | 125 | | | | 1.64 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing deposits (1) | | | 15,158 | | | | | | | | | | | | 15,734 | | | | | | | | | | | | 14,755 | | | | | | | | | |
| Accrued expenses and other liabilities | | | 1,188 | | | | | | | | | | | | 1,124 | | | | | | | | | | | | 1,092 | | | | | | | | | |
| Common shareholders’ equity | | | 5,101 | | | | | | | | | | | | 5,116 | | | | | | | | | | | | 5,077 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total liabilities and shareholders’
equity | | $ | 54,130 | | | | | | | | | | | $ | 53,462 | | | | | | | | | | | $ | 51,116 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income/rate spread (FTE) | | | | | | $ | 502 | | | | 2.98 | | | | | | | $ | 513 | | | | 3.21 | | | | | | | $ | 467 | | | | 3.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| FTE adjustment | | | | | | $ | 1 | | | | | | | | | | | $ | 1 | | | | | | | | | | | $ | 1 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impact of net noninterest-bearing
sources of funds | | | | | | | | | | | 1.02 | | | | | | | | | | | | 0.94 | | | | | | | | | | | | 0.59 | |
| |
Net interest margin (as a percentage of average earning
assets) (FTE) (2) (3) | | | | | | | | | | | 4.00 | % | | | | | | | | | | | 4.15 | % | | | | | | | | | | | 3.96 | % |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) FSD balances included above: | | | | | | | | | | | | | | | | |
| Loans (primarily low-rate) | | $ | 2,769 | | | $ | 3 | | | | 0.38 | % | | $ | 2,334 | | | $ | 2 | | | | 0.42 | % | | $ | 1,113 | | | $ | 2 | | | | 0.54 | % |
| Interest-bearing deposits | | | 2,613 | | | | 22 | | | | 3.38 | | | | 2,578 | | | | 20 | | | | 3.04 | | | | 2,434 | | | | 12 | | | | 2.00 | |
| Noninterest-bearing deposits | | | 5,866 | | | | | | | | | | | | 6,430 | | | | | | | | | | | | 5,575 | | | | | | | | | |
| (2) Impact of FSD loans (primarily low-rate) on the following: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial loans | | | | | | | | | | | (0.68 | )% | | | | | | | | | | | (0.56 | )% | | | | | | | | | | | (0.22 | )% |
| Total loans | | | | | | | | | | | (0.37 | ) | | | | | | | | | | | (0.31 | ) | | | | | | | | | | | (0.13 | ) |
| Net interest margin (FTE) (assuming loans were funded by noninterest-bearing deposits) | | | | (0.22 | ) | | | | | | | | | | | (0.18 | ) | | | | | | | | | | | (0.08 | ) |
| (3) Impact of third quarter 2005 warrant accounting change on the following: | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial loans | | | | | | | | | | | | | | | | | | $ | 20 | | | | 0.32 | % | | | | | | | | | | | | |
| Total loans | | | | | | | | | | | | | | | | | | | 20 | | | | 0.18 | | | | | | | | | | | | | |
| Net interest margin (FTE) | | | | | | | | | | | | | | | | 20 | | | | 0.16 | | | | | | | | | | | | | |
| (4) The average rate for investment securities available-for-sale was computed using average historical cost. |
-14-
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Years Ended | |
| | | December 31, 2005 | | | December 31, 2004 | |
| | | Average | | | | | | | Average | | | Average | | | | | | | Average | |
| (dollar amounts in millions) | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | |
| |
| Commercial loans (1) (2) (3) | | $ | 24,575 | | | $ | 1,381 | | | | 5.62 | % | | $ | 22,139 | | | $ | 933 | | | | 4.22 | % |
| Real estate construction loans | | | 3,194 | | | | 231 | | | | 7.23 | | | | 3,264 | | | | 177 | | | | 5.43 | |
| Commercial mortgage loans (1) | | | 8,566 | | | | 534 | | | | 6.23 | | | | 7,991 | | | | 415 | | | | 5.19 | |
| Residential mortgage loans | | | 1,388 | | | | 80 | | | | 5.74 | | | | 1,237 | | | | 70 | | | | 5.68 | |
| Consumer loans | | | 2,696 | | | | 159 | | | | 5.89 | | | | 2,668 | | | | 126 | | | | 4.73 | |
| Lease financing | | | 1,283 | | | | 49 | | | | 3.81 | | | | 1,272 | | | | 52 | | | | 4.06 | |
| International loans | | | 2,114 | | | | 126 | | | | 5.98 | | | | 2,162 | | | | 102 | | | | 4.69 | |
| Business loan swap income | | | — | | | | (2 | ) | | | — | | | | — | | | | 182 | | | | — | |
| | | |
| Total loans (2) (3) | | | 43,816 | | | | 2,558 | | | | 5.84 | | | | 40,733 | | | | 2,057 | | | | 5.05 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment securities available-for-sale (4) | | | 3,861 | | | | 148 | | | | 3.76 | | | | 4,321 | | | | 147 | | | | 3.36 | |
| Short-term investments | | | 555 | | | | 24 | | | | 4.45 | | | | 1,921 | | | | 36 | | | | 1.88 | |
| | | |
| Total earning assets | | | 48,232 | | | | 2,730 | | | | 5.65 | | | | 46,975 | | | | 2,240 | | | | 4.76 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | 1,721 | | | | | | | | | | | | 1,685 | | | | | | | | | |
| Allowance for loan losses | | | (623 | ) | | | | | | | | | | | (787 | ) | | | | | | | | |
| Accrued income and other assets | | | 3,176 | | | | | | | | | | | | 3,075 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 52,506 | | | | | | | | | | | $ | 50,948 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Money market and NOW deposits (1) | | $ | 17,282 | | | | 337 | | | | 1.95 | | | $ | 17,768 | | | | 188 | | | | 1.06 | |
| Savings deposits (1) | | | 1,545 | | | | 7 | | | | 0.49 | | | | 1,629 | | | | 6 | | | | 0.39 | |
| Certificates of deposit (1) | | | 5,929 | | | | 167 | | | | 2.81 | | | | 5,962 | | | | 104 | | | | 1.74 | |
| Foreign office time deposits | | | 877 | | | | 37 | | | | 4.18 | | | | 664 | | | | 17 | | | | 2.60 | |
| | | |
| Total interest-bearing deposits | | | 25,633 | | | | 548 | | | | 2.14 | | | | 26,023 | | | | 315 | | | | 1.21 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-term borrowings | | | 1,451 | | | | 52 | | | | 3.59 | | | | 275 | | | | 4 | | | | 1.25 | |
| Medium- and long-term debt | | | 4,186 | | | | 170 | | | | 4.05 | | | | 4,540 | | | | 108 | | | | 2.39 | |
| | | |
| Total interest-bearing sources | | | 31,270 | | | | 770 | | | | 2.46 | | | | 30,838 | | | | 427 | | | | 1.38 | |
| | | | | | | | | | | | | | |
| Noninterest-bearing deposits (1) | | | 15,007 | | | | | | | | | | | | 14,122 | | | | | | | | | |
| Accrued expenses and other liabilities | | | 1,132 | | | | | | | | | | | | 947 | | | | | | | | | |
| Common shareholders’ equity | | | 5,097 | | | | | | | | | | | | 5,041 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities and shareholders’ equity | | $ | 52,506 | | | | | | | | | | | $ | 50,948 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income/rate spread (FTE) | | | | | | $ | 1,960 | | | | 3.19 | | | | | | | $ | 1,813 | | | | 3.38 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| FTE adjustment | | | | | | $ | 4 | | | | | | | | | | | $ | 3 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Impact of net noninterest-bearing sources of funds | | | | | | | | | | | 0.87 | | | | | | | | | | | | 0.48 | |
| |
| Net interest margin (as a percentage of average earning assets) (FTE) (2) (3) | | | | | | | | | | | 4.06 | % | | | | | | | | | | | 3.86 | % |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) FSD balances included above: | | | | |
| Loans (primarily low-rate) | | $ | 1,893 | | | $ | 8 | | | | 0.45 | % | | $ | 885 | | | $ | 5 | | | | 0.53 | % |
| Interest-bearing deposits | | | 2,600 | | | | 76 | | | | 2.91 | | | | 2,027 | | | | 31 | | | | 1.53 | |
| Noninterest-bearing deposits | | | 5,851 | | | | | | | | | | | | 5,280 | | | | | | | | | |
| (2) Impact of FSD loans (primarily low-rate) on the following: | | | | |
| Commercial loans | | | | | | | | | | | (0.43 | )% | | | | | | | | | | | (0.15 | )% |
| Total loans | | | | | | | | | | | (0.24 | ) | | | | | | | | | | | (0.10 | ) |
| Net interest margin (FTE) (assuming loans were funded by noninterest-bearing deposits) | | | | | | | | | | | (0.15 | ) | | | | | | | | | | | (0.06 | ) |
| (3) Impact of third quarter 2005 warrant accounting change on the following: | | | | | | | | | | | | | | | | | | | | |
| Commercial loans | | | | | | $ | 20 | | | | 0.08 | % | | | | | | | | | | | | |
| Total loans | | | | | | | 20 | | | | 0.05 | | | | | | | | | | | | | |
| Net interest margin (FTE) | | | | | | | 20 | | | | 0.04 | | | | | | | | | | | | | |
| (4) The average rate for investment securities available-for-sale was computed using average historical cost. | | | | |
-15-
CONSOLIDATED STATISTICAL DATA
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | |
| | | December 31, | | | September 30, | | | June 30, | | | March 31, | | | December 31, | |
| (in millions, except per share data) | | 2005 | | | 2005 | | | 2005 | | | 2005 | | | 2004 | |
| |
| Commercial loans: | | | | | | | | | | | | | | | | | | | | |
| Floor plan | | $ | 2,847 | | | $ | 2,065 | | | $ | 2,766 | | | $ | 2,668 | | | $ | 2,575 | |
| Other | | | 20,698 | | | | 20,689 | | | | 20,924 | | | | 20,112 | | | | 19,464 | |
| |
| Total commercial loans | | | 23,545 | | | | 22,754 | | | | 23,690 | | | | 22,780 | | | | 22,039 | |
| Real estate construction loans: | | | | | | | | | | | | | | | | | | | | |
| Real estate construction business line | | | 2,831 | | | | 2,674 | | | | 2,587 | | | | 2,451 | | | | 2,461 | |
| Other | | | 651 | | | | 615 | | | | 581 | | | | 584 | | | | 592 | |
| |
| Total real estate construction loans | | | 3,482 | | | | 3,289 | | | | 3,168 | | | | 3,035 | | | | 3,053 | |
| Commercial mortgage loans: | | | | | | | | | | | | | | | | | | | | |
| Commercial real estate business line | | | 1,450 | | | | 1,440 | | | | 1,465 | | | | 1,555 | | | | 1,556 | |
| Other | | | 7,417 | | | | 7,260 | | | | 7,071 | | | | 6,860 | | | | 6,680 | |
| |
| Total commercial mortgage loans | | | 8,867 | | | | 8,700 | | | | 8,536 | | | | 8,415 | | | | 8,236 | |
| Residential mortgage loans | | | 1,485 | | | | 1,444 | | | | 1,394 | | | | 1,335 | | | | 1,294 | |
| Consumer loans: | | | | | | | | | | | | | | | | | | | | |
| Home equity | | | 1,775 | | | | 1,818 | | | | 1,867 | | | | 1,797 | | | | 1,837 | |
| Other consumer | | | 922 | | | | 878 | | | | 834 | | | | 903 | | | | 914 | |
| |
| Total consumer loans | | | 2,697 | | | | 2,696 | | | | 2,701 | | | | 2,700 | | | | 2,751 | |
| Lease financing | | | 1,295 | | | | 1,286 | | | | 1,296 | | | | 1,262 | | | | 1,265 | |
| International loans | | | 1,876 | | | | 1,972 | | | | 2,239 | | | | 2,209 | | | | 2,205 | |
| |
| Total loans | | $ | 43,247 | | | $ | 42,141 | | | $ | 43,024 | | | $ | 41,736 | | | $ | 40,843 | |
| |
| | | | | | | | | | | | | | | | | | | | | |
| Goodwill | | $ | 213 | | | $ | 247 | | | $ | 247 | | | $ | 247 | | | $ | 247 | |
| Other intangible assets | | | 1 | | | | 1 | | | | 1 | | | | 1 | | | | 1 | |
| Loan servicing rights | | | 19 | | | | 19 | | | | 19 | | | | 19 | | | | 20 | |
| Deferred mutual fund distribution costs | | | 6 | | | | 7 | | | | 7 | | | | 7 | | | | 8 | |
| Amortization of intangibles (quarterly) | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| Tier 1 common capital ratio* | | | 7.83 | % | | | 7.98 | % | | | 7.88 | % | | | 8.04 | % | | | 8.13 | % |
| Tier 1 risk-based capital ratio* | | | 8.44 | | | | 8.60 | | | | 8.49 | | | | 8.66 | | | | 8.77 | |
| Total risk-based capital ratio * | | | 11.66 | | | | 12.07 | | | | 12.08 | | | | 12.49 | | | | 12.75 | |
| Leverage ratio* | | | 10.02 | | | | 10.07 | | | | 10.36 | | | | 10.50 | | | | 10.37 | |
| | | | | | | | | | | | | | | | | | | | | |
| Book value per share | | $ | 31.11 | | | $ | 30.81 | | | $ | 30.60 | | | $ | 29.81 | | | $ | 29.94 | |
| | | | | | | | | | | | | | | | | | | | | |
| Market value per share for the quarter: | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 60.25 | | | $ | 63.38 | | | $ | 59.29 | | | $ | 61.40 | | | $ | 63.80 | |
| Low | | | 53.60 | | | | 56.80 | | | | 53.17 | | | | 53.70 | | | | 57.81 | |
| Close | | | 56.76 | | | | 58.90 | | | | 57.80 | | | | 55.08 | | | | 61.02 | |
| | | | | | | | | | | | | | | | | | | | | |
| Quarterly ratios: | | | | | | | | | | | | | | | | | | | | |
Return on average common shareholders’
equity | | | 16.28 | % | | | 18.59 | % | | | 16.99 | % | | | 15.73 | % | | | 16.39 | % |
| Return on average assets | | | 1.53 | | | | 1.78 | | | | 1.68 | | | | 1.57 | | | | 1.63 | |
| Efficiency ratio | | | 62.21 | | | | 56.63 | | | | 54.49 | | | | 55.70 | | | | 56.61 | |
| | | | | | | | | | | | | | | | | | | | | |
| Number of banking offices | | | 381 | | | | 370 | | | | 364 | | | | 376 | | | | 377 | |
| | | | | | | | | | | | | | | | | | | | | |
| Number of employees — full time equivalent | | | 10,834 | | | | 10,779 | | | | 10,826 | | | | 10,803 | | | | 10,892 | |
| * | | December 31, 2005 ratios are estimated |
-16-
PARENT COMPANY ONLY BALANCE SHEETS
Comerica Incorporated
| | | | | | | | | | | | | |
| | | December 31, | | | September 30, | | | December 31, | |
| (in millions, except share data) | | 2005 | | | 2005 | | | 2004 | |
| |
ASSETS | | | | | | | | | | | | |
| Cash and due from subsidiary bank | | $ | 11 | | | $ | 16 | | | $ | 1 | |
| Short-term investments with subsidiary bank | | | 264 | | | | 289 | | | | 289 | |
| Investment in subsidiaries, principally banks | | | 5,587 | | | | 5,597 | | | | 5,585 | |
| Premises and equipment | | | 3 | | | | 3 | | | | 3 | |
| Other assets | | | 257 | | | | 256 | | | | 304 | |
| |
| Total assets | | $ | 6,122 | | | $ | 6,161 | | | $ | 6,182 | |
| |
| | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | |
| Long-term debt | | $ | 813 | | | $ | 817 | | | $ | 824 | |
| Other liabilities | | | 241 | | | | 253 | | | | 253 | |
| |
| Total liabilities | | | 1,054 | | | | 1,070 | | | | 1,077 | |
| | | | | | | | | | | | | |
| Common stock — $5 par value: | | | | | | | | | | | | |
Authorized — 325,000,000 shares
Issued — 178,735,252 shares at 12/31/05, 9/30/05 and 12/31/04 | | | 894 | | | | 894 | | | | 894 | |
| Capital surplus | | | 461 | | | | 448 | | | | 421 | |
| Accumulated other comprehensive loss | | | (170 | ) | | | (158 | ) | | | (69 | ) |
| Retained earnings | | | 4,796 | | | | 4,683 | | | | 4,331 | |
| Less cost of common stock in treasury — 15,834,985 shares at 12/31/05, 13,469,654 shares at 9/30/05 and 8,259,328 shares at 12/31/04 | | | (913 | ) | | | (776 | ) | | | (472 | ) |
| |
| Total shareholders’ equity | | | 5,068 | | | | 5,091 | | | | 5,105 | |
| |
| Total liabilities and shareholders’ equity | | $ | 6,122 | | | $ | 6,161 | | | $ | 6,182 | |
| |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Accumulated | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Other | | | | | | | | | | | Total | |
| | | Common Stock | | | Capital | | | Comprehensive | | | Retained | | | Treasury | | | Shareholders' | |
| (in millions, except per share data) | | In Shares | | | Amount | | | Surplus | | | Income (Loss) | | | Earnings | | | Stock | | | Equity | |
| |
BALANCE AT JANUARY 1, 2004 | | | 175.0 | | | $ | 894 | | | $ | 384 | | | $ | 74 | | | $ | 3,973 | | | $ | (215 | ) | | $ | 5,110 | |
| Net income | | | — | | | | — | | | | — | | | | — | | | | 757 | | | | — | | | | 757 | |
| Other comprehensive loss, net of tax | | | — | | | | — | | | | — | | | | (143 | ) | | | — | | | | — | | | | (143 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | 614 | |
Cash dividends declared on common
stock ($2.08 per share) | | | — | | | | — | | | | — | | | | — | | | | (356 | ) | | | — | | | | (356 | ) |
| Purchase of common stock | | | (6.5 | ) | | | — | | | | — | | | | — | | | | — | | | | (370 | ) | | | (370 | ) |
Net issuance of common stock under
employee stock plans | | | 2.0 | | | | — | | | | 2 | | | | — | | | | (43 | ) | | | 113 | | | | 72 | |
| Recognition of stock-based compensation expense | | | — | | | | — | | | | 35 | | | | — | | | | — | | | | — | | | | 35 | |
| |
BALANCE AT DECEMBER 31, 2004 | | | 170.5 | | | $ | 894 | | | $ | 421 | | | $ | (69 | ) | | $ | 4,331 | | | $ | (472 | ) | | $ | 5,105 | |
| |
BALANCE AT JANUARY 1, 2005 | | | 170.5 | | | $ | 894 | | | $ | 421 | | | $ | (69 | ) | | $ | 4,331 | | | $ | (472 | ) | | $ | 5,105 | |
| Net income | | | — | | | | — | | | | — | | | | — | | | | 861 | | | | — | | | | 861 | |
| Other comprehensive loss, net of tax | | | — | | | | — | | | | — | | | | (101 | ) | | | — | | | | — | | | | (101 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | 760 | |
Cash dividends declared on common
stock ($2.20 per share) | | | — | | | | — | | | | — | | | | — | | | | (367 | ) | | | — | | | | (367 | ) |
| Purchase of common stock | | | (9.0 | ) | | | — | | | | — | | | | — | | | | — | | | | (525 | ) | | | (525 | ) |
Net issuance of common stock under
employee stock plans | | | 1.4 | | | | — | | | | (4 | ) | | | — | | | | (29 | ) | | | 84 | | | | 51 | |
| Recognition of stock-based compensation expense | | | — | | | | — | | | | 44 | | | | — | | | | — | | | | — | | | | 44 | |
| |
BALANCE AT DECEMBER 31, 2005 | | | 162.9 | | | $ | 894 | | | $ | 461 | | | $ | (170 | ) | | $ | 4,796 | | | $ | (913 | ) | | $ | 5,068 | |
| |
-17-
BUSINESS SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Business Bank | | | | Small Business & Personal Financial Services | | | | Wealth & Institutional Management | |
| (dollar amounts in millions) | | December 31, | | | September 30, | | | December 31, | | | | December 31, | | | September 30, | | | December 31, | | | | December 31, | | | September 30, | | | December 31, | |
| Three Months Ended | | 2005 | | | 2005 | | | 2004 | | | | 2005 | | | 2005 | | | 2004 | | | | 2005 | | | 2005 | | | 2004 | |
| | | | | | | |
| Earnings summary: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income (expense) (FTE) | | $ | 336 | | | $ | 367 | | | $ | 344 | | | | $ | 157 | | | $ | 153 | | | $ | 149 | | | | $ | 39 | | | $ | 38 | | | $ | 37 | |
| Provision for loan losses | | | (16 | ) | | | (23 | ) | | | 13 | | | | | 9 | | | | 7 | | | | 4 | | | | | 1 | | | | (4 | ) | | | 2 | |
| Noninterest income | | | 71 | | | | 71 | | | | 66 | | | | | 51 | | | | 54 | | | | 50 | | | | | 137 | | | | 83 | | | | 72 | |
| Noninterest expenses | | | 226 | | | | 185 | | | | 150 | | | | | 154 | | | | 138 | | | | 132 | | | | | 114 | | | | 89 | | | | 88 | |
| Provision (benefit) for income taxes (FTE) | | | 72 | | | | 90 | | | | 87 | | | | | 16 | | | | 22 | | | | 23 | | | | | 22 | | | | 13 | | | | 7 | |
| | | | | | | | | |
| Net income (loss) | | $ | 125 | | | $ | 186 | | | $ | 160 | | | | $ | 29 | | | $ | 40 | | | $ | 40 | | | | $ | 39 | | | $ | 23 | | | $ | 12 | |
| | | | | | | | | |
| Net charge-offs | | $ | 15 | | | $ | 16 | | | $ | 27 | | | | $ | 8 | | | $ | 7 | | | $ | 6 | | | | $ | 1 | | | $ | (3 | ) | | $ | 2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 37,309 | | | $ | 36,661 | | | $ | 33,259 | | | | $ | 6,609 | | | $ | 6,575 | | | $ | 6,359 | | | | $ | 3,816 | | | $ | 3,716 | | | $ | 3,601 | |
| Loans | | | 35,849 | | | | 35,273 | | | | 32,049 | | | | | 5,891 | | | | 5,862 | | | | 5,703 | | | | | 3,473 | | | | 3,428 | | | | 3,339 | |
| Deposits | | | 20,578 | | | | 20,877 | | | | 20,184 | | | | | 16,778 | | | | 16,774 | | | | 16,883 | | | | | 2,557 | | | | 2,550 | | | | 2,478 | |
| Liabilities | | | 21,412 | | | | 21,678 | | | | 20,937 | | | | | 16,781 | | | | 16,774 | | | | 16,877 | | | | | 2,576 | | | | 2,555 | | | | 2,484 | |
| Attributed equity | | | 2,585 | | | | 2,548 | | | | 2,495 | | | | | 826 | | | | 805 | | | | 782 | | | | | 474 | | | | 420 | | | | 429 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets (1) | | | 1.34 | % | | | 2.03 | % | | | 1.93 | % | | | | 0.66 | % | | | 0.91 | % | | | 0.91 | % | | | | 4.07 | % | | | 2.45 | % | | | 1.37 | % |
| Return on average attributed equity | | | 19.36 | | | | 29.17 | | | | 25.72 | | | | | 14.12 | | | | 19.79 | | | | 20.46 | | | | | 32.73 | | | | 21.67 | | | | 11.51 | |
| Net interest margin (2) | | | 3.71 | | | | 4.13 | | | | 4.26 | | | | | 3.71 | | | | 3.63 | | | | 3.51 | | | | | 4.44 | | | | 4.36 | | | | 4.48 | |
| Efficiency ratio | | | 55.41 | | | | 42.13 | | | | 36.49 | | | | | 74.08 | | | | 66.96 | | | | 66.34 | | | | | 64.77 | | | | 73.41 | | | | 80.33 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Finance | | | | Other | | | | Total | |
| | | December 31, | | | September 30, | | | December 31, | | | | December 31, | | | September 30, | | | December 31, | | | | December 31, | | | September 30, | | | December 31, | |
| Three Months Ended | | 2005 | | | 2005 | | | 2004 | | | | 2005 | | | 2005 | | | 2004 | | | | 2005 | | | 2005 | | | 2004 | |
| | | | | | | |
| Earnings summary: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income (expense) (FTE) | | $ | (32 | ) | | $ | (47 | ) | | $ | (64 | ) | | | $ | 2 | | | $ | 2 | | | $ | 1 | | | | $ | 502 | | | $ | 513 | | | $ | 467 | |
| Provision for loan losses | | | — | | | | — | | | | — | | | | | (14 | ) | | | (10 | ) | | | (40 | ) | | | | (20 | ) | | | (30 | ) | | | (21 | ) |
| Noninterest income | | | 22 | | | | 11 | | | | 9 | | | | | — | | | | 13 | | | | 6 | | | | | 281 | | | | 232 | | | | 203 | |
| Noninterest expenses | | | 1 | | | | — | | | | 1 | | | | | (8 | ) | | | 10 | | | | 9 | | | | | 487 | | | | 422 | | | | 380 | |
| Provision (benefit) for income taxes (FTE) | | | (7 | ) | | | (16 | ) | | | (19 | ) | | | | 6 | | | | 6 | | | | 6 | | | | | 109 | | | | 115 | | | | 104 | |
| | | | | | | | | |
| Net income (loss) | | $ | (4 | ) | | $ | (20 | ) | | $ | (37 | ) | | | $ | 18 | | | $ | 9 | | | $ | 32 | | | | $ | 207 | | | $ | 238 | | | $ | 207 | |
| | | | | | | | | |
| Net charge-offs | | $ | — | | | $ | — | | | $ | — | | | | $ | (2 | ) | | $ | 1 | | | $ | — | | | | $ | 22 | | | $ | 21 | | | $ | 35 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Selected average balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 5,483 | | | $ | 5,526 | | | $ | 7,000 | | | | $ | 913 | | | $ | 984 | | | $ | 897 | | | | $ | 54,130 | | | $ | 53,462 | | | $ | 51,116 | |
| Loans | | | (9 | ) | | | (22 | ) | | | (5 | ) | | | | 45 | | | | 41 | | | | 43 | | | | | 45,249 | | | | 44,582 | | | | 41,129 | |
| Deposits | | | 1,615 | | | | 1,008 | | | | 729 | | | | | (50 | ) | | | 65 | | | | 53 | | | | | 41,478 | | | | 41,274 | | | | 40,327 | |
| Liabilities | | | 7,983 | | | | 6,995 | | | | 5,426 | | | | | 277 | | | | 344 | | | | 315 | | | | | 49,029 | | | | 48,346 | | | | 46,039 | |
| Attributed equity | | | 469 | | | | 517 | | | | 612 | | | | | 747 | | | | 826 | | | | 759 | | | | | 5,101 | | | | 5,116 | | | | 5,077 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets (1) | | | N/M | | | | N/M | | | | N/M | | | | | N/M | | | | N/M | | | | N/M | | | | | 1.53 | % | | | 1.78 | % | | | 1.63 | % |
| Return on average attributed equity | | | N/M | | | | N/M | | | | N/M | | | | | N/M | | | | N/M | | | | N/M | | | | | 16.28 | | | | 18.59 | | | | 16.39 | |
| Net interest margin (2) | | | N/M | | | | N/M | | | | N/M | | | | | N/M | | | | N/M | | | | N/M | | | | | 4.00 | | | | 4.15 | | | | 3.96 | |
| Efficiency ratio | | | N/M | | | | N/M | | | | N/M | | | | | N/M | | | | N/M | | | | N/M | | | | | 62.21 | | | | 56.63 | | | | 56.61 | |
| | | | | | | |
| (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 |
-18-
MARKET SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Midwest & Other Markets | | | | Western | | | | Texas | |
| (dollar amounts in millions) | | December 31, | | | September 30, | | | December 31, | | | | December 31, | | | September 30, | | | December 31, | | | | December 31, | | | September 30, | | | December 31, | |
| Three Months Ended | | 2005 | | | 2005 | | | 2004 | | | | 2005 | | | 2005 | | | 2004 | | | | 2005 | | | 2005 | | | 2004 | |
| | | | | | | |
| Earnings summary: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income (expense) (FTE) | | $ | 271 | | | $ | 272 | | | $ | 270 | | | | $ | 188 | | | $ | 214 | | | $ | 190 | | | | $ | 63 | | | $ | 61 | | | $ | 60 | |
| Provision for loan losses | | | (2 | ) | | | — | | | | 7 | | | | | (3 | ) | | | (18 | ) | | | 8 | | | | | (2 | ) | | | 2 | | | | 3 | |
| Noninterest income | | | 201 | | | | 154 | | | | 137 | | | | | 34 | | | | 30 | | | | 29 | | | | | 20 | | | | 20 | | | | 18 | |
| Noninterest expenses | | | 304 | | | | 233 | | | | 225 | | | | | 124 | | | | 123 | | | | 93 | | | | | 56 | | | | 48 | | | | 45 | |
| Provision (benefit) for income taxes (FTE) | | | 61 | | | | 59 | | | | 55 | | | | | 38 | | | | 52 | | | | 49 | | | | | 10 | | | | 10 | | | | 11 | |
| | | | | | | | | |
| Net income (loss) | | $ | 109 | | | $ | 134 | | | $ | 120 | | | | $ | 63 | | | $ | 87 | | | $ | 69 | | | | $ | 19 | | | $ | 21 | | | $ | 19 | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs | | $ | 21 | | | $ | 23 | | | $ | 13 | | | | $ | 1 | | | $ | (2 | ) | | $ | 19 | | | | $ | (1 | ) | | $ | (1 | ) | | $ | 3 | |
| Selected average balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 25,088 | | | $ | 25,324 | | | $ | 24,220 | | | | $ | 15,684 | | | $ | 14,920 | | | $ | 12,750 | | | | $ | 5,462 | | | $ | 5,262 | | | $ | 4,861 | |
| Loans | | | 23,518 | | | | 23,832 | | | | 22,930 | | | | | 14,960 | | | | 14,226 | | | | 12,097 | | | | | 5,251 | | | | 5,070 | | | | 4,689 | |
| Deposits | | | 18,833 | | | | 18,856 | | | | 19,122 | | | | | 17,048 | | | | 17,415 | | | | 16,353 | | | | | 3,718 | | | | 3,611 | | | | 3,796 | |
| Liabilities | | | 19,629 | | | | 19,621 | | | | 19,859 | | | | | 17,106 | | | | 17,458 | | | | 16,376 | | | | | 3,722 | | | | 3,612 | | | | 3,792 | |
| Attributed equity | | | 2,217 | | | | 2,162 | | | | 2,163 | | | | | 1,088 | | | | 1,055 | | | | 1,026 | | | | | 503 | | | | 482 | | | | 449 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Statistical data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets (1) | | | 1.74 | % | | | 2.11 | % | | | 1.99 | % | | | | 1.39 | % | | | 1.88 | % | | | 1.59 | % | | | | 1.39 | % | | | 1.54 | % | | | 1.61 | % |
| Return on average attributed equity | | | 19.66 | | | | 24.71 | | | | 22.23 | | | | | 23.21 | | | | 33.07 | | | | 26.94 | | | | | 15.08 | | | | 16.88 | | | | 17.42 | |
| Net interest margin (2) | | | 4.54 | | | | 4.50 | | | | 4.66 | | | | | 4.36 | | | | 4.89 | | | | 4.61 | | | | | 4.73 | | | | 4.74 | | | | 5.15 | |
| Efficiency ratio | | | 64.25 | | | | 54.73 | | | | 55.14 | | | | | 56.44 | | | | 50.26 | | | | 42.43 | | | | | 67.10 | | | | 59.72 | | | | 57.61 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Number of banking offices | | | 255 | | | | 255 | | | | 268 | | | | | 61 | | | | 55 | | | | 51 | | | | | 59 | | | | 54 | | | | 52 | |
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| | | Florida | | | | Finance & Other Businesses | | | | Total | |
| | | December 31, | | | September 30, | | | December 31, | | | | December 31, | | | September 30, | | | December 31, | | | | December 31, | | | September 30, | | | December 31, | |
| Three Months Ended | | 2005 | | | 2005 | | | 2004 | | | | 2005 | | | 2005 | | | 2004 | | | | 2005 | | | 2005 | | | 2004 | |
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| Earnings summary: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income (expense) (FTE) | | $ | 10 | | | $ | 11 | | | $ | 10 | | | | $ | (30 | ) | | $ | (45 | ) | | $ | (63 | ) | | | $ | 502 | | | $ | 513 | | | $ | 467 | |
| Provision for loan losses | | | 1 | | | | (4 | ) | | | 1 | | | | | (14 | ) | | | (10 | ) | | | (40 | ) | | | | (20 | ) | | | (30 | ) | | | (21 | ) |
| Noninterest income | | | 4 | | | | 4 | | | | 4 | | | | | 22 | | | | 24 | | | | 15 | | | | | 281 | | | | 232 | | | | 203 | |
| Noninterest expenses | | | 10 | | | | 8 | | | | 7 | | | | | (7 | ) | | | 10 | | | | 10 | | | | | 487 | | | | 422 | | | | 380 | |
| Provision (benefit) for income taxes (FTE) | | | 1 | | | | 4 | | | | 2 | | | | | (1 | ) | | | (10 | ) | | | (13 | ) | | | | 109 | | | | 115 | | | | 104 | |
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| Net income (loss) | | $ | 2 | | | $ | 7 | | | $ | 4 | | | | $ | 14 | | | $ | (11 | ) | | $ | (5 | ) | | | $ | 207 | | | $ | 238 | | | $ | 207 | |
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| Net charge-offs | | $ | 3 | | | $ | 1 | | | $ | — | | | | $ | (2 | ) | | $ | — | | | $ | — | | | | $ | 22 | | | $ | 21 | | | $ | 35 | |
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| Selected average balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 1,500 | | | $ | 1,447 | | | $ | 1,388 | | | | $ | 6,396 | | | $ | 6,509 | | | $ | 7,897 | | | | $ | 54,130 | | | $ | 53,462 | | | $ | 51,116 | |
| Loans | | | 1,484 | | | | 1,435 | | | | 1,375 | | | | | 36 | | | | 19 | | | | 38 | | | | | 45,249 | | | | 44,582 | | | | 41,129 | |
| Deposits | | | 314 | | | | 318 | | | | 274 | | | | | 1,565 | | | | 1,074 | | | | 782 | | | | | 41,478 | | | | 41,274 | | | | 40,327 | |
| Liabilities | | | 312 | | | | 316 | | | | 272 | | | | | 8,260 | | | | 7,339 | | | | 5,740 | | | | | 49,029 | | | | 48,346 | | | | 46,039 | |
| Attributed equity | | | 77 | | | | 74 | | | | 67 | | | | | 1,216 | | | | 1,343 | | | | 1,372 | | | | | 5,101 | | | | 5,116 | | | | 5,077 | |
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| Statistical data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets (1) | | | 0.54 | % | | | 2.01 | % | | | 1.11 | % | | | | N/M | | | | N/M | | | | N/M | | | | | 1.53 | % | | | 1.78 | % | | | 1.63 | % |
| Return on average attributed equity | | | 10.56 | | | | 38.96 | | | | 23.06 | | | | | N/M | | | | N/M | | | | N/M | | | | | 16.28 | | | | 18.59 | | | | 16.39 | |
| Net interest margin (2) | | | 2.70 | | | | 3.17 | | | | 2.94 | | | | | N/M | | | | N/M | | | | N/M | | | | | 4.00 | | | | 4.15 | | | | 3.96 | |
| Efficiency ratio | | | 66.94 | | | | 51.06 | | | | 48.29 | | | | | N/M | | | | N/M | | | | N/M | | | | | 62.21 | | | | 56.63 | | | | 56.61 | |
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| Number of banking offices | | | 6 | | | | 6 | | | | 6 | | | | | — | | | | — | | | | — | | | | | 381 | | | | 370 | | | | 377 | |
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| (1) | | Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity. |
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| (2) | | Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds. |
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| N/M — Not Meaningful |
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