Exhibit 99.1
 | NEWS RELEASE |
COMERICA REPORTS SECOND QUARTER 2007 EARNINGS
Loan Growth Continues in High Growth Markets
Credit Quality Remains Solid
Expenses are Well Controlled
DETROIT/July 18, 2007— Comerica Incorporated (NYSE: CMA) today reported second quarter 2007 income from continuing operations of $196 million, or $1.25 per diluted share, compared to $189 million, or $1.19 per diluted share, for the first quarter 2007 and $195 million, or $1.19 per diluted share, for the second quarter 2006.
| (dollar amounts in millions, except per share data) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||
| Net interest income | $ | 509 | $ | 502 | $ | 500 | ||||||
| Provision for loan losses | 36 | 23 | 27 | |||||||||
| Noninterest income | 225 | 203 | 203 | |||||||||
| Noninterest expenses | 411 | 407 | 389 | |||||||||
| Income from continuing operations, net of tax | 196 | 189 | 195 | |||||||||
| Net income | 196 | 190 | 200 | |||||||||
| Diluted EPS from continuing operations | 1.25 | 1.19 | 1.19 | |||||||||
| Diluted EPS from discontinued operations* | — | — | 0.03 | |||||||||
| Diluted EPS | 1.25 | 1.19 | 1.22 | |||||||||
| Return on average common shareholders’ equity from continuing operations | 15.41 | % | 14.83 | % | 15.15 | % | ||||||
| Return on average common shareholders’ equity | 15.41 | 14.86 | 15.50 | |||||||||
| Net interest margin | 3.76 | 3.82 | 3.82 | |||||||||
| * | In the fourth quarter 2006, Comerica sold its stake in Munder Capital Management (Munder) and reports Munder as a discontinued operation in all periods presented. |
Income from continuing operations for the first six months of 2007 was $385 million, or $2.44 per diluted share, compared to $402 million, or $2.45 per diluted share, for the first six months of 2006. The provision for loan losses was $59 million for the first six months of 2007, compared to zero for the same time period in 2006. Return on average common shareholders’ equity from continuing operations was 15.12 percent for the first six months of 2007 and 15.73 percent for the same period in 2006.
The following table illustrates certain items impacting diluted earnings per share from continuing operations:
| Year-to-date | ||||||||||||||||
| (dollar amounts per diluted share) | 2nd Qtr ’07 | 1st Qtr ’07 | 2007 | 2006 | ||||||||||||
| Sale of Mexican bank charter | $ | 0.01 | $ | — | $ | 0.01 | $ | (0.02 | ) | |||||||
| Net income (loss) from principal investing and warrants | 0.03 | (0.02 | ) | 0.01 | 0.02 | |||||||||||
| Federal tax adjustments | — | — | — | 0.10 | ||||||||||||
| Tax-related interest adjustments | — | — | — | (0.07 | ) | |||||||||||
| Litigation-related insurance settlement | 0.03 | — | 0.03 | — | ||||||||||||
| Headquarters move-related costs | (0.01 | ) | — | (0.01 | ) | — | ||||||||||
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COMERICA REPORTS SECOND QUARTER 2007 EARNINGS – 2
“Our second quarter financial results reflect the continued execution of our strategy,” said Ralph W. Babb Jr., chairman and chief executive officer. “We had good loan growth, particularly in our high growth markets, and the second quarter net interest margin of 3.76 percent was in line with our full-year 2007 expectations. Expenses in the second quarter remained well controlled, even as we continued to ramp-up our banking center expansion program and relocate our corporate headquarters to Texas.”
Second Quarter and Year-to-date 2007 Highlights
Second Quarter 2007 Compared to First Quarter 2007
| • | On an annualized basis, excluding Financial Services Division (FSD) loans, average loans increased seven percent, led by growth of 13 percent in the Western market, eight percent in the Texas market, six percent in the Florida market and three percent in the Midwest market. | |
| • | The net interest margin was 3.76 percent in the second quarter 2007, a decrease of six basis points from 3.82 percent in the first quarter 2007, largely due to changes in the funding mix. | |
| • | Net credit-related charge-offs were $30 million, or 24 basis points as a percent of average total loans, for the second quarter 2007, compared to $19 million, or 16 basis points as a percent of average total loans, for the first quarter 2007, a modest increase from historically low levels. | |
| • | Noninterest income increased $22 million and reflected growth in several areas. Refer to “Noninterest Income” below for more information. | |
| • | Noninterest expenses increased slightly, by $4 million, from the first quarter 2007. Refer to “Noninterest Expenses” below for additional details. | |
| • | Open market share repurchases in the second quarter 2007 totaled 3.5 million shares, or two percent of total shares outstanding at March 31, 2007. |
Year-to-date June 2007 Compared to Year-to-date June 2006
| • | Excluding Financial Services Division loans, average loan growth was eight percent, with 17 percent growth in the Texas market, 14 percent in the Western market, 13 percent in the Florida market, and two percent in the Midwest market. | |
| • | The net interest margin was 3.79 percent, compared to 3.81 percent for the same period in 2006. | |
| • | Total revenue increased four percent, including seven percent growth in noninterest income. | |
| • | Net credit-related charge-offs were 20 basis points as a percent of average total loans for the first six months of 2007, compared to 17 basis points for the same period in 2006, consistent with our full-year outlook. | |
| • | Noninterest expenses were unchanged from 2006 expenses, particularly notable as expenses related to new banking centers were $10 million higher than last year. Headcount was up only one percent, even with the net addition of 24 banking centers in the last 12 months. | |
| • | Open market share repurchases in the first six months of 2007 totaled 6.9 million shares, or four percent of total shares outstanding at December 31, 2006. |
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COMERICA REPORTS SECOND QUARTER 2007 EARNINGS – 3
Net Interest Income Boosted by Loan Growth
| (dollar amounts in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||
| Net interest income | $ | 509 | $ | 502 | $ | 500 | ||||||
| Net interest margin | 3.76 | % | 3.82 | % | 3.82 | % | ||||||
| Selected average balances: | ||||||||||||
| Total earning assets | $ | 54,304 | $ | 53,148 | $ | 52,371 | ||||||
| Total loans | 49,793 | 48,896 | 47,802 | |||||||||
| Total loans, excluding FSD loans (primarily low-rate) | 48,213 | 47,327 | 45,245 | |||||||||
| Total interest-bearing deposits | 30,049 | 30,417 | 28,446 | |||||||||
| Total noninterest-bearing deposits | 11,633 | 12,162 | 13,575 | |||||||||
| Total noninterest-bearing deposits, excluding FSD | 8,356 | 8,712 | 8,782 | |||||||||
| • | The $7 million increase in net interest income in the second quarter 2007, when compared to first quarter 2007, resulted primarily from earning asset growth and the impact of one more day in the second quarter 2007 ($6 million). | |
| • | The net interest margin of 3.76 percent declined six basis points, reflecting stable loan yields and deposit rates offset by a change in funding mix, largely attributable to a decline in non-interest bearing deposits. Maturing interest rate swaps provided a three basis point positive contribution to the margin. |
Noninterest Income Reflects Positive Trends
Noninterest income was $225 million for the second quarter 2007, compared to $203 million for both the first quarter 2007 and the second quarter 2006. The $22 million increase in noninterest income in the second quarter 2007, compared to the first quarter 2007, reflected positive trends in several categories (including service charges on deposit accounts, card fees, commercial lending fees and foreign exchange income), and increases in net income (loss) from principal investing and warrants ($10 million) and deferred compensation asset returns ($5 million). Certain categories of noninterest income are highlighted in the table below.
| (in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||
| Net income (loss) from principal investing and warrants | $ | 6 | $ | (4 | ) | $ | 4 | |||||
| Net gain (loss) on sales of businesses | 2 | 1 | — | |||||||||
| Other noninterest income | ||||||||||||
| Deferred compensation asset returns* | 6 | 1 | (1 | ) | ||||||||
| * | Compensation deferred by Comerica officers is invested in stocks and bonds to reflect the investment selections of the officers. Income earned on these assets is reported in noninterest income and the offsetting increase in the liability is reported in salaries expense. |
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COMERICA REPORTS SECOND QUARTER 2007 EARNINGS – 4
Noninterest Expenses Remain Well Controlled
Noninterest expenses were $411 million for the second quarter 2007, compared to $407 million for the first quarter 2007 and $389 million for the second quarter 2006. The $4 million increase in noninterest expenses in the second quarter 2007, compared to the first quarter 2007, reflected increases in incentive compensation and pension expense, partially offset by decreases in share-based compensation expense, litigation and operational losses, and customer services expense. The increase in incentives reflected an increase in costs related to deferred compensation plans of $5 million and increased incentives primarily tied to peer-comparison performance of $8 million. The decrease in share-based compensation expense reflected the annual award of restricted stock to retirement-eligible employees granted in the first quarter, which must be expensed in the period granted. Litigation and operational losses reflected a litigation-related insurance settlement of $8 million in the second quarter 2007. 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, the earnings credit allowance provided on these deposits and a competitive environment. In addition, noninterest expenses included approximately $2 million of costs related to the previously announced relocation of Comerica’s headquarters to Dallas, Texas, reflected in salaries and other noninterest expenses.
Certain categories of noninterest expenses and the provision for income taxes are highlighted in the table below.
| (in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||
| Salaries | ||||||||||||
| Regular salaries | $ | 157 | $ | 154 | $ | 153 | ||||||
| Incentives | 46 | 29 | 30 | |||||||||
| Share-based compensation | 12 | 23 | 14 | |||||||||
| Total salaries | 215 | 206 | 197 | |||||||||
| Employee benefits | 50 | 46 | 44 | |||||||||
| Customer services | 11 | 14 | 9 | |||||||||
| Litigation and operational losses | (9 | ) | 3 | 3 | ||||||||
| Provision for credit losses on lending-related commitments | (2 | ) | (2 | ) | 1 | |||||||
| Other noninterest expenses | ||||||||||||
| Interest on tax liabilities* | n/a | n/a | (5 | ) | ||||||||
| Provision for income taxes | ||||||||||||
| Interest on tax liabilities (pretax)* | $ | 3 | $ | 1 | n/a | |||||||
| * | Effective with the adoption of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109,” Comerica changed its accounting policy and prospectively began to classify interest on tax liabilities in the “provision for income taxes.” Prior to January 1, 2007, interest on tax liabilities was classified in “other noninterest expenses.” | |
| n/a — not applicable | ||
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COMERICA REPORTS SECOND QUARTER 2007 EARNINGS – 5
Credit Quality Remained Solid
“We continue to proactively manage our credit risk,” said Babb. “Our strong credit culture, and the enhanced risk management tools and processes we have put in place, contributed to our solid credit quality in the second quarter. Net credit-related charge-offs remained relatively low, despite the continued weakness in the Michigan economy. Credit quality in the Western and Texas markets remained strong.”
| • | The provision for loan losses reflected challenges to industries located in Michigan (Midwest market), including the automotive and commercial real estate industries. | |
| • | Nonperforming assets were 53 basis points of total loans and foreclosed property for the second quarter 2007, and remained at low levels. During the second quarter 2007, $107 million of loan relationships greater than $2 million were transferred to nonaccrual status, an increase of $38 million from the first quarter 2007. Of the transfers to nonaccrual, $57 million were in the real estate industry, including $36 million from the Midwest market and $21 million from the Western market. By market, $69 million of the transfers to nonaccrual were from the Midwest. |
| (dollar amounts in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||
| Net loan charge-offs | $ | 30 | $ | 16 | $ | 18 | ||||||
| Net lending-related commitment charge-offs | — | 3 | 1 | |||||||||
| Total net credit-related charge-offs | 30 | 19 | 19 | |||||||||
| Net loan charge-offs/Average total loans | 0.24 | % | 0.13 | % | 0.15 | % | ||||||
| Net credit-related charge-offs/Average total loans | 0.24 | 0.16 | 0.16 | |||||||||
| Provision for loan losses | $ | 36 | $ | 23 | $ | 27 | ||||||
| Provision for credit losses on lending-related commitments | (2 | ) | (2 | ) | 1 | |||||||
| Total provision for credit losses | 34 | 21 | 28 | |||||||||
| Nonperforming assets (NPAs) | 259 | 233 | 174 | |||||||||
| NPAs/Total loans and foreclosed property | 0.53 | % | 0.49 | % | 0.37 | % | ||||||
| Allowance for loan losses | $ | 507 | $ | 500 | $ | 481 | ||||||
| Allowance for credit losses on | ||||||||||||
| lending-related commitments* | 19 | 21 | 41 | |||||||||
| Total allowance for credit losses | 526 | 521 | 522 | |||||||||
| Allowance for loan losses/Total loans | 1.04 | % | 1.04 | % | 1.04 | % | ||||||
| Allowance for loan losses/NPAs | 195 | 214 | 278 | |||||||||
| * | Included in “Accrued expenses and other liabilities” on the consolidated balance sheets. |
Balance Sheet and Capital Management
Total assets and common shareholders’ equity were $58.6 billion and $5.0 billion, respectively, at June 30, 2007, compared to $57.5 billion and $5.1 billion, respectively, at March 31, 2007. There were approximately 153 million shares outstanding at June 30, 2007, compared to 156 million shares outstanding at March 31, 2007. Open market share repurchases for the current and prior quarter are shown in the following table:
| 2nd Qtr ’07 | 1st Qtr ’07 | |||||||||||||||
| Number | Number | |||||||||||||||
| (in millions) | of Shares | Amount | of Shares | Amount | ||||||||||||
| Open market share repurchases | 3.5 | $ | 217 | 3.4 | $ | 207 | ||||||||||
Comerica’s second quarter 2007 estimated Tier 1 common, Tier 1 and total risk-based capital ratios were 7.19 percent, 7.87 percent and 11.71 percent, respectively.
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COMERICA REPORTS SECOND QUARTER 2007 EARNINGS – 6
Full-Year 2007 Outlook
Comerica’s outlook for full-year 2007, compared to full-year 2006, is as follows:
| • | Mid to high single-digit average loan growth, excluding Financial Services Division loans, with flat growth in the Midwest market, and low double-digit growth in the Western and Texas markets | |
| • | Average earning asset growth slightly less than average loan growth | |
| • | Average Financial Services Division noninterest-bearing deposits of $3.2 billion. Financial Services Division loans will fluctuate in tandem with the level of noninterest-bearing deposits | |
| • | Average full year net interest margin of about 3.75 percent | |
| • | Average net credit-related charge-offs of about 20 basis points of average loans, with a provision for credit losses modestly exceeding net charge-offs | |
| • | Low single-digit growth in noninterest income, from a 2006 adjusted base of $820 million which excludes the Financial Services Division-related lawsuit settlement and the loss on sale of the Mexican bank charter | |
| • | Flat noninterest expenses, excluding the provision for credit losses on lending-related commitments, from a 2006 adjusted base of $1,669 million. Outlook reflects anticipated 2007 costs associated with the previously announced headquarters move to Dallas, Texas (expected to be about $10 million, with most of the remaining $8 million expected to be incurred in the third quarter) | |
| • | Effective tax rate of about 32 percent | |
| • | Active capital management within targeted capital ratios (Tier 1 common of 6.50 percent to 7.50 percent and Tier 1 of 7.25 percent to 8.25 percent). Total open market share repurchases in 2007 expected to be about nine million shares |
COMERICA REPORTS SECOND QUARTER 2007 EARNINGS – 7
Business Segments
Comerica’s continuing operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank, 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 methodologies in effect at June 30, 2007 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses second quarter 2007 results compared to first quarter 2007.
The following table presents net income (loss) by business segment.
| (dollar amounts in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||||||||||||||
| Business Bank | $ | 136 | 73 | % | $ | 141 | 72 | % | $ | 137 | 71 | % | ||||||||||||
| Retail Bank | 35 | 19 | 33 | 17 | 39 | 20 | ||||||||||||||||||
| Wealth & Institutional Management | 16 | 8 | 21 | 11 | 17 | 9 | ||||||||||||||||||
| 187 | 100 | % | 195 | 100 | % | 193 | 100 | % | ||||||||||||||||
| Finance | — | 1 | (7 | ) | ||||||||||||||||||||
| Other* | 9 | (6 | ) | 14 | ||||||||||||||||||||
| Total | $ | 196 | $ | 190 | $ | 200 | ||||||||||||||||||
| * | Includes discontinued operations and items not directly associated with the three major business segments or the Finance Division. |
Business Bank
| (dollar amounts in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||||||||||||||
| Net interest income (FTE) | $ | 338 | $ | 329 | $ | 333 | ||||||||||||||||||
| Provision for loan losses | 32 | 14 | 21 | |||||||||||||||||||||
| Noninterest income | 68 | 61 | 71 | |||||||||||||||||||||
| Noninterest expenses | 176 | 170 | 182 | |||||||||||||||||||||
| Net income | 136 | 141 | 137 | |||||||||||||||||||||
| Net credit-related charge-offs | 24 | 15 | 12 | |||||||||||||||||||||
| Selected average balances: | ||||||||||||||||||||||||
| Assets | 40,848 | 40,059 | 39,367 | |||||||||||||||||||||
| Loans | 39,824 | 39,015 | 38,175 | |||||||||||||||||||||
| FSD loans | 1,580 | 1,569 | 2,557 | |||||||||||||||||||||
| Deposits | 16,432 | 16,710 | 17,931 | |||||||||||||||||||||
| FSD deposits | 4,505 | 4,698 | 6,557 | |||||||||||||||||||||
| Net interest margin | 3.39 | % | 3.42 | % | 3.53 | % | ||||||||||||||||||
| • | Average loans, excluding the Financial Services Division, increased $798 million, or nine percent on an annualized basis, primarily due to growth in the Middle Market, Global Corporate, Commercial Real Estate and Technology and Life Sciences business lines. |
| • | Average deposits decreased $85 million, excluding the $193 million decline in the Financial Services Division, primarily due to a decline in the Middle Market business line, partially offset by growth in the Technology and Life Sciences and Global Corporate business lines. |
| • | The net interest margin of 3.39 percent decreased three basis points, primarily due to a decline in deposits. |
| • | The provision for loan losses increased $18 million, primarily due to an increase in reserves for commercial real estate. |
| • | Noninterest income increased $7 million, primarily due to the absence of a negative warrant fair value adjustment that affected the first quarter 2007. |
| • | Noninterest expenses increased $6 million, primarily due to an increase in salaries and employee benefits expense. |
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COMERICA REPORTS SECOND QUARTER 2007 EARNINGS – 8
Retail Bank
| (dollar amounts in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||
| Net interest income (FTE) | $ | 160 | $ | 157 | $ | 162 | ||||||
| Provision for loan losses | 4 | 5 | 8 | |||||||||
| Noninterest income | 57 | 52 | 54 | |||||||||
| Noninterest expenses | 160 | 153 | 150 | |||||||||
| Net income | 35 | 33 | 39 | |||||||||
| Net credit-related charge-offs | 6 | 4 | 8 | |||||||||
| Selected average balances: | ||||||||||||
| Assets | 6,828 | 6,840 | 6,786 | |||||||||
| Loans | 6,100 | 6,095 | 6,094 | |||||||||
| Deposits | 17,191 | 17,033 | 16,770 | |||||||||
| Net interest margin | 3.73 | % | 3.74 | % | 3.92 | % | ||||||
| • | Average loans increased $5 million, as increases in small business commercial loans were partially offset by a decline in consumer loans, primarily in the Midwest market. |
| • | Average deposits increased $158 million, with growth in all deposit categories. |
| • | The net interest margin of 3.73 percent decreased one basis point, primarily due to a decline in loan spreads. |
| • | Noninterest income increased $5 million, primarily due to higher gains on sales of student loans in the second quarter 2007, an increase in service charges on deposit accounts and increased card fees. |
| • | Noninterest expenses increased $7 million, primarily due to the impact of opening three new banking centers during the second quarter of 2007 and 12 new banking centers year-to-date. |
Wealth and Institutional Management
| (dollar amounts in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||
| Net interest income (FTE) | $ | 36 | $ | 36 | $ | 37 | ||||||
| Provision for loan losses | 2 | (1 | ) | (1 | ) | |||||||
| Noninterest income | 70 | 71 | 64 | |||||||||
| Noninterest expenses | 79 | 76 | 76 | |||||||||
| Net income | 16 | 21 | 17 | |||||||||
| Net credit-related charge-offs | — | — | — | |||||||||
| Selected average balances: | ||||||||||||
| Assets | 4,009 | 3,898 | 3,608 | |||||||||
| Loans | 3,860 | 3,747 | 3,470 | |||||||||
| Deposits | 2,295 | 2,317 | 2,463 | |||||||||
| Net interest margin | 3.72 | % | 3.88 | % | 4.35 | % | ||||||
| • | Average loans increased $113 million, or 12 percent on an annualized basis. |
| • | Average deposits decreased $22 million, primarily due to decreased noninterest-bearing accounts. |
| • | The net interest margin of 3.72 percent declined 16 basis points, primarily due to declines in loan spreads, deposit spreads and average deposit balances. |
| • | Noninterest expenses increased $3 million, primarily due to an increase in severance. |
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COMERICA REPORTS SECOND QUARTER 2007 EARNINGS – 9
Geographic Market Segments
Comerica also provides market segment results for four primary geographic markets: Midwest, Western, Texas and Florida. In addition to the four primary geographic markets, Other Markets and International are also reported as market segments. The financial results below are based on methodologies in effect at June 30, 2007 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses second quarter 2007 results compared to first quarter 2007.
The following table presents net income (loss) by market segment.
| (dollar amounts in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||||||||||||||
| Midwest | $ | 87 | 47 | % | $ | 90 | 45 | % | $ | 96 | 50 | % | ||||||||||||
| Western | 58 | 31 | 66 | 34 | 63 | 33 | ||||||||||||||||||
| Texas | 20 | 10 | 22 | 11 | 20 | 11 | ||||||||||||||||||
| Florida | 2 | 1 | 3 | 2 | 1 | — | ||||||||||||||||||
| Other Markets | 5 | 3 | 5 | 3 | 4 | 2 | ||||||||||||||||||
| International | 15 | 8 | 9 | 5 | 9 | 4 | ||||||||||||||||||
| 187 | 100 | % | 195 | 100 | % | 193 | 100 | % | ||||||||||||||||
| Finance & Other* | 9 | (5 | ) | 7 | ||||||||||||||||||||
| Total | $ | 196 | $ | 190 | $ | 200 | ||||||||||||||||||
| * | Includes discontinued operations and items not directly associated with the geographic markets. |
Midwest
| (dollar amounts in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||
| Net interest income (FTE) | $ | 248 | $ | 244 | $ | 251 | ||||||
| Provision for loan losses | 34 | 30 | 22 | |||||||||
| Noninterest income | 122 | 116 | 120 | |||||||||
| Noninterest expenses | 217 | 206 | 215 | |||||||||
| Net income | 87 | 90 | 96 | |||||||||
| Net credit-related charge-offs | 29 | 22 | 16 | |||||||||
| Selected average balances: | ||||||||||||
| Assets | 22,874 | 22,755 | 22,724 | |||||||||
| Loans | 21,946 | 21,783 | 21,700 | |||||||||
| Deposits | 16,477 | 16,657 | 16,674 | |||||||||
| Net interest margin | 4.52 | % | 4.52 | % | 4.69 | % | ||||||
| • | Average loans increased $163 million, or three percent on an annualized basis, primarily due to growth in the Commercial Real Estate, Global Corporate Banking, Middle Market Banking and Private Banking business lines. | |
| • | Average deposits decreased $180 million, primarily due to a decline in the Global Corporate Banking business line. | |
| • | The provision for loan losses increased $4 million, primarily due to increased reserves for commercial real estate. | |
| • | Noninterest income increased $6 million, primarily due to an increase in service charges on deposit accounts and nominal warrant income in the current period, compared to warrant losses in the first quarter. | |
| • | Noninterest expenses increased $11 million, partially due to increases in salaries and employee benefits expenses and outside processing fees. |
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COMERICA REPORTS SECOND QUARTER 2007 EARNINGS – 10
Western Market
| (dollar amounts in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||
| Net interest income (FTE) | $ | 179 | $ | 176 | $ | 179 | ||||||
| Provision for loan losses | 5 | (11 | ) | 2 | ||||||||
| Noninterest income | 32 | 28 | 34 | |||||||||
| Noninterest expenses | 113 | 110 | 110 | |||||||||
| Net income | 58 | 66 | 63 | |||||||||
| Net credit-related charge-offs | 4 | (5 | ) | 3 | ||||||||
| Selected average balances: | ||||||||||||
| Assets | 17,257 | 16,782 | 16,515 | |||||||||
| Loans | 16,715 | 16,241 | 15,955 | |||||||||
| FSD loans | 1,580 | 1,569 | 2,557 | |||||||||
| Deposits | 13,595 | 13,696 | 14,861 | |||||||||
| FSD deposits | 4,310 | 4,515 | 6,449 | |||||||||
| Net interest margin | 4.29 | % | 4.40 | % | 4.55 | % | ||||||
| • | Excluding the Financial Services Division, average loans increased $463 million, or 13 percent on an annualized basis, primarily due to growth in the Middle Market Banking, Technology and Life Sciences, Global Corporate Banking, Private Banking and Commercial Real Estate business lines. | |
| • | Excluding the Financial Services Division, average deposits increased $104 million, primarily due to growth in the Technology and Life Sciences and Global Corporate Banking business lines. | |
| • | The net interest margin declined 11 basis points, due to a net decrease from the impact of the Financial Services Division (offset by lower customer service expense in noninterest expenses) and a decline in loan spreads. | |
| • | The provision for loan losses increased $16 million primarily due to stable credit quality in the second quarter compared to improving credit quality in the first quarter 2007. | |
| • | Noninterest income increased $4 million, primarily due to an increase in income from the sale of SBA loans and a negative warrant fair value adjustment in the first quarter 2007. | |
| • | Noninterest expenses increased $3 million, primarily due to an increase in salaries and employee benefit expenses. | |
| • | Two new banking centers were opened in California in the second quarter and five year-to-date. |
Texas Market
| (dollar amounts in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||
| Net interest income (FTE) | $ | 69 | $ | 67 | $ | 64 | ||||||
| Provision for loan losses | 3 | (1 | ) | (1 | ) | |||||||
| Noninterest income | 20 | 19 | 18 | |||||||||
| Noninterest expenses | 56 | 54 | 53 | |||||||||
| Net income | 20 | 22 | 20 | |||||||||
| Total net credit-related charge-offs | 1 | 3 | 2 | |||||||||
| Selected average balances: | ||||||||||||
| Assets | 6,844 | 6,719 | 6,055 | |||||||||
| Loans | 6,570 | 6,444 | 5,796 | |||||||||
| Deposits | 3,836 | 3,843 | 3,668 | |||||||||
| Net interest margin | 4.22 | % | 4.19 | % | 4.51 | % | ||||||
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COMERICA REPORTS SECOND QUARTER 2007 EARNINGS – 11
| • | Average loans increased $126 million, or eight percent on an annualized basis, primarily due to growth in Small Business and Energy lending. | |
| • | The net interest margin of 4.22 percent increased three basis points. | |
| • | Noninterest expenses increased $2 million, primarily due to increased salaries and benefits expenses. | |
| • | Five new banking centers were opened year-to-date. |
Florida Market
| (dollar amounts in millions) | 2nd Qtr ’07 | 1st Qtr ’07 | 2nd Qtr ’06 | |||||||||
| Net interest income (FTE) | $ | 11 | $ | 11 | $ | 11 | ||||||
| Provision for loan losses | 2 | 1 | 5 | |||||||||
| Noninterest income | 3 | 4 | 3 | |||||||||
| Noninterest expenses | 9 | 9 | 8 | |||||||||
| Net income | 2 | 3 | 1 | |||||||||
| Net credit-related charge-offs | 1 | — | — | |||||||||
| Selected average balances: | ||||||||||||
| Assets | 1,666 | 1,646 | 1,537 | |||||||||
| Loans | 1,649 | 1,626 | 1,517 | |||||||||
| Deposits | 290 | 284 | 313 | |||||||||
| Net interest margin | 2.68 | % | 2.84 | % | 2.83 | % | ||||||
| • | Average loans increased $23 million, or six percent on an annualized basis. | |
| • | Average deposits increased $6 million. | |
| • | The net interest margin declined 16 basis points, primarily due to a decline in loan spreads, deposit spreads and average deposit balances. |
Conference Call and Webcast
Comerica will host a conference call to review second quarter 2007 financial results at 8 a.m. ET Wednesday, July 18, 2007. Interested parties may access the conference call by calling (706) 679-5261 (event ID No. 4363667). The call and supplemental financial information can also be accessed on the Internet at www.comerica.com. A replay will be available approximately two hours following the conference call until August 1, 2007. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 4363667). 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 strategically aligned into three major business segments: the Business Bank, the Retail Bank, and Wealth & Institutional Management. Comerica focuses on relationships and helping businesses and people to be successful. Comerica Bank locations can be found in Michigan, California, Texas, Florida and Arizona, with select businesses operating in several other states, Canada and Mexico
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COMERICA REPORTS SECOND QUARTER 2007 EARNINGS – 12
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, changes related to the headquarters move or to its underlying assumptions, 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 disruption of private or public utilities, 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.
Media Contact: | Investor Contacts: | |||
| Wayne J. Mielke (313) 222-4732 | Darlene P. Persons (313) 222-2840 | |||
| Paul Jaremski (313) 222-6317 |
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | |||||||||||||||||
| (in millions, except per share data) | 2007 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||
PER SHARE AND COMMON STOCK DATA | ||||||||||||||||||||
| Diluted income from continuing operations | $ | 1.25 | $ | 1.19 | $ | 1.19 | $ | 2.44 | $ | 2.45 | ||||||||||
| Diluted net income | 1.25 | 1.19 | 1.22 | 2.45 | 2.40 | |||||||||||||||
| Cash dividends declared | 0.64 | 0.64 | 0.59 | 1.28 | 1.18 | |||||||||||||||
| Common shareholders’ equity (at period end) | 32.80 | 32.84 | 31.99 | |||||||||||||||||
| Average diluted shares (in thousands) | 156,632 | 158,915 | 163,439 | 157,774 | 163,378 | |||||||||||||||
KEY RATIOS | ||||||||||||||||||||
| Return on average common shareholders’ equity from continuing operations | 15.41 | % | 14.83 | % | 15.15 | % | 15.12 | % | 15.73 | % | ||||||||||
| Return on average common shareholders’ equity | 15.41 | 14.86 | 15.50 | 15.14 | 15.42 | |||||||||||||||
| Return on average assets from continuing operations | 1.35 | 1.33 | 1.38 | 1.34 | 1.44 | |||||||||||||||
| Return on average assets | 1.35 | 1.33 | 1.41 | 1.34 | 1.41 | |||||||||||||||
| Average common shareholders’ equity as a percentage of average assets | 8.77 | 8.93 | 9.09 | 8.85 | 9.13 | |||||||||||||||
| Tier 1 common capital ratio * | 7.19 | 7.49 | 7.69 | |||||||||||||||||
| Tier 1 risk-based capital ratio * | 7.87 | 8.19 | 8.26 | |||||||||||||||||
| Total risk-based capital ratio * | 11.71 | 12.15 | 11.55 | |||||||||||||||||
| Leverage ratio * | 9.68 | 10.00 | 9.83 | |||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||
| Commercial loans | $ | 28,324 | $ | 27,757 | $ | 27,587 | $ | 28,042 | $ | 27,106 | ||||||||||
| Real estate construction loans | 4,501 | 4,249 | 3,816 | 4,376 | 3,674 | |||||||||||||||
| Commercial mortgage loans | 9,634 | 9,673 | 9,229 | 9,654 | 9,114 | |||||||||||||||
| Residential mortgage loans | 1,791 | 1,705 | 1,537 | 1,748 | 1,515 | |||||||||||||||
| Consumer loans | 2,331 | 2,405 | 2,533 | 2,368 | 2,596 | |||||||||||||||
| Lease financing | 1,287 | 1,273 | 1,299 | 1,280 | 1,298 | |||||||||||||||
| International loans | 1,925 | 1,834 | 1,801 | 1,879 | 1,841 | |||||||||||||||
| Total loans | 49,793 | 48,896 | 47,802 | 49,347 | 47,144 | |||||||||||||||
| Earning assets | 54,304 | 53,148 | 52,371 | 53,729 | 51,678 | |||||||||||||||
| Total assets | 58,118 | 57,088 | 56,611 | 57,606 | 55,947 | |||||||||||||||
| Interest-bearing deposits | 30,049 | 30,417 | 28,446 | 30,232 | 28,020 | |||||||||||||||
| Total interest-bearing liabilities | 40,157 | 38,498 | 36,704 | 39,332 | 36,041 | |||||||||||||||
| Noninterest-bearing deposits | 11,633 | 12,162 | 13,575 | 11,897 | 13,591 | |||||||||||||||
| Common shareholders’ equity | 5,097 | 5,101 | 5,146 | 5,099 | 5,109 | |||||||||||||||
NET INTEREST INCOME | ||||||||||||||||||||
| Net interest income (fully taxable equivalent basis) | $ | 510 | $ | 503 | $ | 501 | $ | 1,013 | $ | 981 | ||||||||||
| Fully taxable equivalent adjustment | 1 | 1 | 1 | 2 | 2 | |||||||||||||||
| Net interest margin | 3.76 | % | 3.82 | % | 3.82 | % | 3.79 | % | 3.81 | % | ||||||||||
CREDIT QUALITY | ||||||||||||||||||||
| Nonaccrual loans | $ | 244 | $ | 218 | $ | 157 | ||||||||||||||
| Foreclosed property | 15 | 15 | 17 | |||||||||||||||||
| Total nonperforming assets | 259 | 233 | 174 | |||||||||||||||||
| Loans past due 90 days or more and still accruing | 29 | 15 | 15 | |||||||||||||||||
| Gross loan charge-offs | 43 | 34 | 25 | 77 | 50 | |||||||||||||||
| Loan recoveries | 13 | 18 | 7 | 31 | 15 | |||||||||||||||
| Net loan charge-offs | 30 | 16 | 18 | 46 | 35 | |||||||||||||||
| Lending-related commitment charge-offs | — | 3 | 1 | 3 | 6 | |||||||||||||||
| Total net credit-related charge-offs | 30 | 19 | 19 | 49 | 41 | |||||||||||||||
| Allowance for loan losses | 507 | 500 | 481 | |||||||||||||||||
| Allowance for credit losses on lending-related commitments | 19 | 21 | 41 | |||||||||||||||||
| Total allowance for credit losses | 526 | 521 | 522 | |||||||||||||||||
| Allowance for loan losses as a percentage of total loans | 1.04 | % | 1.04 | % | 1.04 | % | ||||||||||||||
| Net loan charge-offs as a percentage of average total loans | 0.24 | 0.13 | 0.15 | 0.19 | % | 0.15 | % | |||||||||||||
| Net credit-related charge-offs as a percentage of average total loans | 0.24 | 0.16 | 0.16 | 0.20 | 0.17 | |||||||||||||||
| Nonperforming assets as a percentage of total loans and foreclosed property | 0.53 | 0.49 | 0.37 | |||||||||||||||||
| Allowance for loan losses as a percentage of total nonperforming assets | 195 | 214 | 278 | |||||||||||||||||
| * | June 30, 2007 ratios are estimated |
-13-
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
| June 30, | March 31, | December 31, | June 30, | |||||||||||||
| (in millions, except share data) | 2007 | 2007 | 2006 | 2006 | ||||||||||||
ASSETS | ||||||||||||||||
| Cash and due from banks | $ | 1,372 | $ | 1,334 | $ | 1,434 | $ | 1,664 | ||||||||
| Federal funds sold and securities purchased under agreements to resell | 1,217 | 1,457 | 2,632 | 2,105 | ||||||||||||
| Other short-term investments | 251 | 220 | 327 | 276 | ||||||||||||
| Investment securities available-for-sale | 4,368 | 3,989 | 3,662 | 3,980 | ||||||||||||
| Commercial loans | 27,146 | 26,681 | 26,265 | 25,928 | ||||||||||||
| Real estate construction loans | 4,513 | 4,462 | 4,203 | 3,958 | ||||||||||||
| Commercial mortgage loans | 9,728 | 9,592 | 9,659 | 9,363 | ||||||||||||
| Residential mortgage loans | 1,839 | 1,741 | 1,677 | 1,568 | ||||||||||||
| Consumer loans | 2,321 | 2,392 | 2,423 | 2,493 | ||||||||||||
| Lease financing | 1,314 | 1,273 | 1,353 | 1,325 | ||||||||||||
| International loans | 1,904 | 1,848 | 1,851 | 1,764 | ||||||||||||
| Total loans | 48,765 | 47,989 | 47,431 | 46,399 | ||||||||||||
| Less allowance for loan losses | (507 | ) | (500 | ) | (493 | ) | (481 | ) | ||||||||
| Net loans | 48,258 | 47,489 | 46,938 | 45,918 | ||||||||||||
| Premises and equipment | 616 | 596 | 568 | 522 | ||||||||||||
| Customers’ liability on acceptances outstanding | 40 | 55 | 56 | 74 | ||||||||||||
| Accrued income and other assets | 2,448 | 2,387 | 2,384 | 2,541 | ||||||||||||
| Total assets | $ | 58,570 | $ | 57,527 | $ | 58,001 | $ | 57,080 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
| Noninterest-bearing deposits | $ | 12,763 | $ | 13,584 | $ | 13,901 | $ | 15,199 | ||||||||
| Money market and NOW deposits | 15,212 | 14,815 | 15,250 | 15,342 | ||||||||||||
| Savings deposits | 1,397 | 1,410 | 1,365 | 1,470 | ||||||||||||
| Customer certificates of deposit | 7,567 | 7,447 | 7,223 | 6,322 | ||||||||||||
| Institutional certificates of deposit | 5,479 | 5,679 | 5,783 | 4,629 | ||||||||||||
| Foreign office time deposits | 789 | 735 | 1,405 | 1,164 | ||||||||||||
| Total interest-bearing deposits | 30,444 | 30,086 | 31,026 | 28,927 | ||||||||||||
| Total deposits | 43,207 | 43,670 | 44,927 | 44,126 | ||||||||||||
| Short-term borrowings | 297 | 329 | 635 | 442 | ||||||||||||
| Acceptances outstanding | 40 | 55 | 56 | 74 | ||||||||||||
| Accrued expenses and other liabilities | 1,260 | 1,205 | 1,281 | 1,162 | ||||||||||||
| Medium- and long-term debt | 8,748 | 7,148 | 5,949 | 6,087 | ||||||||||||
| Total liabilities | 53,552 | 52,407 | 52,848 | 51,891 | ||||||||||||
| Common stock - - $5 par value: | ||||||||||||||||
| Authorized - 325,000,000 shares | ||||||||||||||||
| Issued - 178,735,252 shares at 6/30/07, 3/31/07, 12/31/06 and 6/30/06 | 894 | 894 | 894 | 894 | ||||||||||||
| Capital surplus | 539 | 524 | 520 | 494 | ||||||||||||
| Accumulated other comprehensive loss | (308 | ) | (284 | ) | (324 | ) | (226 | ) | ||||||||
| Retained earnings | 5,400 | 5,311 | 5,282 | 4,978 | ||||||||||||
| Less cost of common stock in treasury - 25,725,671 shares at 6/30/07, 22,834,368 shares at 3/31/07, 21,161,161 shares at 12/31/06 and 16,534,470 shares at 6/30/06 | (1,507 | ) | (1,325 | ) | (1,219 | ) | (951 | ) | ||||||||
| Total shareholders’ equity | 5,018 | 5,120 | 5,153 | 5,189 | ||||||||||||
| Total liabilities and shareholders’ equity | $ | 58,570 | $ | 57,527 | $ | 58,001 | $ | 57,080 | ||||||||
-14-
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| (in millions, except per share data) | 2007 | 2006 | 2007 | 2006 | ||||||||||||
INTEREST INCOME | ||||||||||||||||
| Interest and fees on loans | $ | 882 | $ | 792 | $ | 1,733 | $ | 1,515 | ||||||||
| Interest on investment securities | 46 | 45 | 88 | 89 | ||||||||||||
| Interest on short-term investments | 5 | 8 | 13 | 13 | ||||||||||||
| Total interest income | 933 | 845 | 1,834 | 1,617 | ||||||||||||
INTEREST EXPENSE | ||||||||||||||||
| Interest on deposits | 284 | 236 | 570 | 435 | ||||||||||||
| Interest on short-term borrowings | 24 | 45 | 46 | 87 | ||||||||||||
| Interest on medium- and long-term debt | 116 | 64 | 207 | 116 | ||||||||||||
| Total interest expense | 424 | 345 | 823 | 638 | ||||||||||||
| Net interest income | 509 | 500 | 1,011 | 979 | ||||||||||||
| Provision for loan losses | 36 | 27 | 59 | — | ||||||||||||
| Net interest income after provision for loan losses | 473 | 473 | 952 | 979 | ||||||||||||
NONINTEREST INCOME | ||||||||||||||||
| Service charges on deposit accounts | 55 | 54 | 109 | 108 | ||||||||||||
| Fiduciary income | 49 | 44 | 98 | 88 | ||||||||||||
| Commercial lending fees | 17 | 15 | 33 | 30 | ||||||||||||
| Letter of credit fees | 15 | 15 | 31 | 31 | ||||||||||||
| Foreign exchange income | 10 | 9 | 19 | 19 | ||||||||||||
| Brokerage fees | 10 | 10 | 21 | 20 | ||||||||||||
| Card fees | 14 | 12 | 26 | 23 | ||||||||||||
| Bank-owned life insurance | 9 | 10 | 19 | 23 | ||||||||||||
| Net income from principal investing and warrants | 6 | 4 | 2 | 7 | ||||||||||||
| Net securities gains (losses) | — | 1 | — | (1 | ) | |||||||||||
| Net gain (loss) on sales of businesses | 2 | — | 3 | (5 | ) | |||||||||||
| Other noninterest income | 38 | 29 | 67 | 55 | ||||||||||||
| Total noninterest income | 225 | 203 | 428 | 398 | ||||||||||||
NONINTEREST EXPENSES | ||||||||||||||||
| Salaries | 215 | 197 | 421 | 390 | ||||||||||||
| Employee benefits | 50 | 44 | 96 | 94 | ||||||||||||
| Total salaries and employee benefits | 265 | 241 | 517 | 484 | ||||||||||||
| Net occupancy expense | 33 | 30 | 68 | 60 | ||||||||||||
| Equipment expense | 15 | 15 | 30 | 28 | ||||||||||||
| Outside processing fee expense | 24 | 22 | 44 | 43 | ||||||||||||
| Software expense | 15 | 14 | 30 | 28 | ||||||||||||
| Customer services | 11 | 9 | 25 | 22 | ||||||||||||
| Litigation and operational losses (recoveries) | (9 | ) | 3 | (6 | ) | 4 | ||||||||||
| Provision for credit losses on lending-related commitments | (2 | ) | 1 | (4 | ) | 14 | ||||||||||
| Other noninterest expenses | 59 | 54 | 114 | 135 | ||||||||||||
| Total noninterest expenses | 411 | 389 | 818 | 818 | ||||||||||||
| Income from continuing operations before income taxes | 287 | 287 | 562 | 559 | ||||||||||||
| Provision for income taxes | 91 | 92 | 177 | 157 | ||||||||||||
| Income from continuing operations | 196 | 195 | 385 | 402 | ||||||||||||
| Income (loss) from discontinued operations, net of tax | — | 5 | 1 | (8 | ) | |||||||||||
NET INCOME | $ | 196 | $ | 200 | $ | 386 | $ | 394 | ||||||||
| Basic earnings per common share: | ||||||||||||||||
| Income from continuing operations | $ | 1.28 | $ | 1.21 | $ | 2.49 | $ | 2.49 | ||||||||
| Net income | 1.28 | 1.24 | 2.49 | 2.44 | ||||||||||||
| Diluted earnings per common share: | ||||||||||||||||
| Income from continuing operations | 1.25 | 1.19 | 2.44 | 2.45 | ||||||||||||
| Net income | 1.25 | 1.22 | 2.45 | 2.40 | ||||||||||||
| Cash dividends declared on common stock | 98 | 96 | 199 | 192 | ||||||||||||
| Dividends per common share | 0.64 | 0.59 | 1.28 | 1.18 | ||||||||||||
-15-
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
| Second | First | Fourth | Third | Second | Second Quarter 2007 Compared To: | |||||||||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | First Quarter 2007 | Second Quarter 2006 | ||||||||||||||||||||||||||||||
| (in millions, except per share data) | 2007 | 2007 | 2006 | 2006 | 2006 | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 882 | $ | 851 | $ | 858 | $ | 843 | $ | 792 | $ | 31 | 3.5 | % | $ | 90 | 11.2 | % | ||||||||||||||||||
| Interest on investment securities | 46 | 42 | 42 | 43 | 45 | 4 | 11.3 | 1 | 2.6 | |||||||||||||||||||||||||||
| Interest on short-term investments | 5 | 8 | 12 | 7 | 8 | (3 | ) | (26.0 | ) | (3 | ) | (26.3 | ) | |||||||||||||||||||||||
| Total interest income | 933 | 901 | 912 | 893 | 845 | 32 | 3.6 | 88 | 10.4 | |||||||||||||||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||
| Interest on deposits | 284 | 286 | 298 | 272 | 236 | (2 | ) | (0.6 | ) | 48 | 20.5 | |||||||||||||||||||||||||
| Interest on short-term borrowings | 24 | 22 | 15 | 28 | 45 | 2 | 10.5 | (21 | ) | (47.2 | ) | |||||||||||||||||||||||||
| Interest on medium- and long-term debt | 116 | 91 | 97 | 91 | 64 | 25 | 27.8 | 52 | 82.1 | |||||||||||||||||||||||||||
| Total interest expense | 424 | 399 | 410 | 391 | 345 | 25 | 6.5 | 79 | 23.0 | |||||||||||||||||||||||||||
| Net interest income | 509 | 502 | 502 | 502 | 500 | 7 | 1.4 | 9 | 1.8 | |||||||||||||||||||||||||||
| Provision for loan losses | 36 | 23 | 22 | 15 | 27 | 13 | 56.5 | 9 | 33.3 | |||||||||||||||||||||||||||
| Net interest income after provision for loan losses | 473 | 479 | 480 | 487 | 473 | (6 | ) | (1.3 | ) | — | — | |||||||||||||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 55 | 54 | 54 | 56 | 54 | 1 | 3.9 | 1 | 1.6 | |||||||||||||||||||||||||||
| Fiduciary income | 49 | 49 | 47 | 45 | 44 | — | (0.6 | ) | 5 | 10.7 | ||||||||||||||||||||||||||
| Commercial lending fees | 17 | 16 | 19 | 16 | 15 | 1 | 3.7 | 2 | 14.1 | |||||||||||||||||||||||||||
| Letter of credit fees | 15 | 16 | 16 | 17 | 15 | (1 | ) | (3.3 | ) | — | (2.0 | ) | ||||||||||||||||||||||||
| Foreign exchange income | 10 | 9 | 10 | 9 | 9 | 1 | 7.5 | 1 | 4.9 | |||||||||||||||||||||||||||
| Brokerage fees | 10 | 11 | 10 | 10 | 10 | (1 | ) | (6.3 | ) | — | 5.3 | |||||||||||||||||||||||||
| Card fees | 14 | 12 | 12 | 11 | 12 | 2 | 11.2 | 2 | 13.3 | |||||||||||||||||||||||||||
| Bank-owned life insurance | 9 | 10 | 9 | 8 | 10 | (1 | ) | (1.7 | ) | (1 | ) | (2.1 | ) | |||||||||||||||||||||||
| Net income (loss) from principal investing and warrants | 6 | (4 | ) | 3 | — | 4 | 10 | N/M | 2 | N/M | ||||||||||||||||||||||||||
| Net securities gains | — | — | 1 | — | 1 | — | N/M | (1 | ) | N/M | ||||||||||||||||||||||||||
| Net gain (loss) on sales of businesses | 2 | 1 | — | (7 | ) | — | 1 | N/M | 2 | N/M | ||||||||||||||||||||||||||
| Income from lawsuit settlement | — | — | 47 | — | — | — | N/M | — | N/M | |||||||||||||||||||||||||||
| Other noninterest income | 38 | 29 | 34 | 30 | 29 | 9 | 27.1 | 9 | 28.1 | |||||||||||||||||||||||||||
| Total noninterest income | 225 | 203 | 262 | 195 | 203 | 22 | 10.9 | 22 | 10.5 | |||||||||||||||||||||||||||
NONINTEREST EXPENSES | ||||||||||||||||||||||||||||||||||||
| Salaries | 215 | 206 | 231 | 202 | 197 | 9 | 4.6 | 18 | 9.3 | |||||||||||||||||||||||||||
| Employee benefits | 50 | 46 | 42 | 48 | 44 | 4 | 7.0 | 6 | 11.9 | |||||||||||||||||||||||||||
| Total salaries and employee benefits | 265 | 252 | 273 | 250 | 241 | 13 | 5.0 | 24 | 9.8 | |||||||||||||||||||||||||||
| Net occupancy expense | 33 | 35 | 34 | 31 | 30 | (2 | ) | (6.0 | ) | 3 | 10.5 | |||||||||||||||||||||||||
| Equipment expense | 15 | 15 | 14 | 13 | 15 | — | 4.7 | — | 2.6 | |||||||||||||||||||||||||||
| Outside processing fee expense | 24 | 20 | 21 | 21 | 22 | 4 | 17.5 | 2 | 7.3 | |||||||||||||||||||||||||||
| Software expense | 15 | 15 | 15 | 13 | 14 | — | (7.3 | ) | 1 | 4.8 | ||||||||||||||||||||||||||
| Customer services | 11 | 14 | 14 | 11 | 9 | (3 | ) | (20.4 | ) | 2 | 23.9 | |||||||||||||||||||||||||
| Litigation and operational losses (recoveries) | (9 | ) | 3 | 4 | 3 | 3 | (12 | ) | N/M | (12 | ) | N/M | ||||||||||||||||||||||||
| Provision for credit losses on lending-related commitments | (2 | ) | (2 | ) | (4 | ) | (5 | ) | 1 | — | (15.4 | ) | (3 | ) | N/M | |||||||||||||||||||||
| Other noninterest expenses | 59 | 55 | 86 | 62 | 54 | 4 | 11.0 | 5 | 9.6 | |||||||||||||||||||||||||||
| Total noninterest expenses | 411 | 407 | 457 | 399 | 389 | 4 | 1.0 | 22 | 5.5 | |||||||||||||||||||||||||||
| Income from continuing operations before income taxes | 287 | 275 | 285 | 283 | 287 | 12 | 4.3 | — | (0.1 | ) | ||||||||||||||||||||||||||
| Provision for income taxes | 91 | 86 | 100 | 88 | 92 | 5 | 5.3 | (1 | ) | (1.9 | ) | |||||||||||||||||||||||||
| Income from continuing operations | 196 | 189 | 185 | 195 | 195 | 7 | 3.8 | 1 | 0.7 | |||||||||||||||||||||||||||
| Income from discontinued operations, net of tax | — | 1 | 114 | 5 | 5 | (1 | ) | N/M | (5 | ) | N/M | |||||||||||||||||||||||||
NET INCOME | $ | 196 | $ | 190 | $ | 299 | $ | 200 | $ | 200 | $ | 6 | 3.6 | % | $ | (4 | ) | (1.5 | )% | |||||||||||||||||
| Basic earnings per common share: | ||||||||||||||||||||||||||||||||||||
| Income from continuing operations | $ | 1.28 | $ | 1.21 | $ | 1.17 | $ | 1.22 | $ | 1.21 | $ | 0.07 | 5.8 | % | $ | 0.07 | 5.8 | % | ||||||||||||||||||
| Net income | 1.28 | 1.21 | 1.89 | 1.25 | 1.24 | 0.07 | 5.8 | 0.04 | 3.2 | |||||||||||||||||||||||||||
| Diluted earnings per common share: | ||||||||||||||||||||||||||||||||||||
| Income from continuing operations | 1.25 | 1.19 | 1.16 | 1.20 | 1.19 | 0.06 | 5.0 | 0.06 | 5.0 | |||||||||||||||||||||||||||
| Net income | 1.25 | 1.19 | 1.87 | 1.23 | 1.22 | 0.06 | 5.0 | 0.03 | 2.5 | |||||||||||||||||||||||||||
| Cash dividends declared on common stock | 98 | 101 | 94 | 94 | 96 | (3 | ) | (1.7 | ) | 2 | 3.0 | |||||||||||||||||||||||||
| Dividends per common share | 0.64 | 0.64 | 0.59 | 0.59 | 0.59 | — | — | 0.05 | 8.5 | |||||||||||||||||||||||||||
N/M — Not meaningful
-16-
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
Comerica Incorporated and Subsidiaries
| 2007 | 2006 | |||||||||||||||||||
| (in millions) | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | |||||||||||||||
| Balance at beginning of period | $ | 500 | $ | 493 | $ | 493 | $ | 481 | $ | 472 | ||||||||||
| Loan charge-offs: | ||||||||||||||||||||
| Commercial | 19 | 13 | 7 | 9 | 16 | |||||||||||||||
| Real estate construction: | ||||||||||||||||||||
| Commercial Real Estate business line | 6 | 1 | — | — | — | |||||||||||||||
| Other | 2 | — | — | — | — | |||||||||||||||
| Total real estate construction | 8 | 1 | — | — | — | |||||||||||||||
| Commercial mortgage: | ||||||||||||||||||||
| Commercial Real Estate business line | 3 | 3 | 3 | 1 | — | |||||||||||||||
| Other | 10 | 14 | 4 | 4 | 3 | |||||||||||||||
| Total commercial mortgage | 13 | 17 | 7 | 5 | 3 | |||||||||||||||
| Residential mortgage | — | — | — | — | — | |||||||||||||||
| Consumer | 3 | 3 | 13 | 3 | 4 | |||||||||||||||
| Lease financing | — | — | 3 | — | 1 | |||||||||||||||
| International | — | — | 1 | — | 1 | |||||||||||||||
| Total loan charge-offs | 43 | 34 | 31 | 17 | 25 | |||||||||||||||
| Recoveries on loans previously charged-off: | ||||||||||||||||||||
| Commercial | 5 | 10 | 5 | 13 | 5 | |||||||||||||||
| Real estate construction | — | — | — | — | — | |||||||||||||||
| Commercial mortgage | 2 | — | 1 | 1 | — | |||||||||||||||
| Residential mortgage | — | — | — | — | — | |||||||||||||||
| Consumer | 1 | 1 | 1 | — | 1 | |||||||||||||||
| Lease financing | — | 4 | — | — | — | |||||||||||||||
| International | 5 | 3 | 2 | — | 1 | |||||||||||||||
| Total recoveries | 13 | 18 | 9 | 14 | 7 | |||||||||||||||
| Net loan charge-offs | 30 | 16 | 22 | 3 | 18 | |||||||||||||||
| Provision for loan losses | 36 | 23 | 22 | 15 | 27 | |||||||||||||||
| Foreign currency translation adjustment | 1 | — | — | — | — | |||||||||||||||
| Balance at end of period | $ | 507 | $ | 500 | $ | 493 | $ | 493 | $ | 481 | ||||||||||
| Allowance for loan losses as a percentage of total loans | 1.04 | % | 1.04 | % | 1.04 | % | 1.06 | % | 1.04 | % | ||||||||||
| Net loan charge-offs as a percentage of average total loans | 0.24 | 0.13 | 0.18 | 0.02 | 0.15 | |||||||||||||||
| Net credit-related charge-offs as a percentage of average total loans | 0.24 | 0.16 | 0.19 | 0.06 | 0.16 | |||||||||||||||
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING - RELATED COMMITMENTS
Comerica Incorporated and Subsidiaries
| 2007 | 2006 | |||||||||||||||||||
| (in millions) | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | |||||||||||||||
| Balance at beginning of period | $ | 21 | $ | 26 | $ | 31 | $ | 41 | $ | 41 | ||||||||||
| Less: Charge-offs on lending-related commitments (1) | — | 3 | 1 | 5 | 1 | |||||||||||||||
| Add: Provision for credit losses on lending-related commitments | (2 | ) | (2 | ) | (4 | ) | (5 | ) | 1 | |||||||||||
| Balance at end of period | $ | 19 | $ | 21 | $ | 26 | $ | 31 | $ | 41 | ||||||||||
| Unfunded lending-related commitments sold | $ | — | $ | 60 | $ | 20 | $ | 28 | $ | 14 | ||||||||||
| (1) | Charge-offs result from the sale of unfunded lending-related commitments. |
-17 -
NONPERFORMING ASSETS
Comerica Incorporated and Subsidiaries
| 2007 | 2006 | |||||||||||||||||||
| (in millions) | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | |||||||||||||||
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS | ||||||||||||||||||||
| Nonaccrual loans: | ||||||||||||||||||||
| Commercial | $ | 88 | $ | 73 | $ | 97 | $ | 83 | $ | 74 | ||||||||||
| Real estate construction: | ||||||||||||||||||||
| Commercial Real Estate business line | 37 | 21 | 18 | 4 | 5 | |||||||||||||||
| Other | 7 | 4 | 2 | — | — | |||||||||||||||
| Total real estate construction | 44 | 25 | 20 | 4 | 5 | |||||||||||||||
| Commercial mortgage: | ||||||||||||||||||||
| Commercial Real Estate business line | 20 | 17 | 18 | 10 | 11 | |||||||||||||||
| Other | 84 | 84 | 54 | 46 | 35 | |||||||||||||||
| Total commercial mortgage | 104 | 101 | 72 | 56 | 46 | |||||||||||||||
| Residential mortgage | 1 | 1 | 1 | 1 | 1 | |||||||||||||||
| Consumer | 3 | 4 | 4 | 5 | 3 | |||||||||||||||
| Lease financing | — | 4 | 8 | 12 | 12 | |||||||||||||||
| International | 4 | 10 | 12 | 13 | 16 | |||||||||||||||
| Total nonaccrual loans | 244 | 218 | 214 | 174 | 157 | |||||||||||||||
| Reduced-rate loans | — | — | — | — | — | |||||||||||||||
| Total nonperforming loans | 244 | 218 | 214 | 174 | 157 | |||||||||||||||
| Foreclosed property | 15 | 15 | 18 | 23 | 17 | |||||||||||||||
| Total nonperforming assets | $ | 259 | $ | 233 | $ | 232 | $ | 197 | $ | 174 | ||||||||||
| Nonperforming loans as a percentage of total loans | 0.50 | % | 0.45 | % | 0.45 | % | 0.37 | % | 0.34 | % | ||||||||||
| Nonperforming assets as a percentage of total loans and foreclosed property | 0.53 | 0.49 | 0.49 | 0.42 | 0.37 | |||||||||||||||
| Allowance for loan losses as a percentage of total nonperforming assets | 195 | 214 | 213 | 251 | 278 | |||||||||||||||
| Loans past due 90 days or more and still accruing | $ | 29 | $ | 15 | $ | 14 | $ | 18 | $ | 15 | ||||||||||
ANALYSIS OF NONACCRUAL LOANS | ||||||||||||||||||||
| Nonaccrual loans at beginning of period | $ | 218 | $ | 214 | $ | 174 | $ | 157 | $ | 122 | ||||||||||
| Loans transferred to nonaccrual (1) | 107 | 69 | 66 | 39 | 51 | |||||||||||||||
| Nonaccrual business loan gross charge-offs (2) | (40 | ) | (31 | ) | (16 | ) | (14 | ) | (21 | ) | ||||||||||
| Loans transferred to accrual status (1) | (8 | ) | — | — | — | — | ||||||||||||||
| Nonaccrual business loans sold (3) | — | (4 | ) | — | — | — | ||||||||||||||
| Payments/Other (4) | (33 | ) | (30 | ) | (10 | ) | (8 | ) | 5 | |||||||||||
| Nonaccrual loans at end of period | $ | 244 | $ | 218 | $ | 214 | $ | 174 | $ | 157 | ||||||||||
| (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 | $ | 31 | $ | 16 | $ | 14 | $ | 21 | ||||||||||
| Performing watch list loans | — | — | 2 | — | — | |||||||||||||||
| Consumer and residential mortgage loans | 3 | 3 | 13 | 3 | 4 | |||||||||||||||
| Total gross loan charge-offs | $ | 43 | $ | 34 | $ | 31 | $ | 17 | $ | 25 | ||||||||||
| (3) Analysis of loans sold: | ||||||||||||||||||||
| Nonaccrual business loans | $ | — | $ | 4 | $ | — | $ | — | $ | — | ||||||||||
| Performing watch list loans | — | — | 25 | 7 | 15 | |||||||||||||||
| Total loans sold | $ | — | $ | 4 | $ | 25 | $ | 7 | $ | 15 | ||||||||||
| (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. | ||||||||||||||||||||
-18-
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
| Six Months Ended | ||||||||||||||||||||||||||||
| June 30, 2007 | June 30, 2006 | |||||||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||||||||
| (dollar amounts in millions) | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||||
| Commercial loans (1) (2) | $ | 28,042 | $ | 1,016 | 7.31 | % | $ | 27,106 | $ | 877 | 6.53 | % | ||||||||||||||||
| Real estate construction loans | 4,376 | 186 | 8.55 | 3,674 | 154 | 8.44 | ||||||||||||||||||||||
| Commercial mortgage loans | 9,654 | 353 | 7.37 | 9,114 | 321 | 7.11 | ||||||||||||||||||||||
| Residential mortgage loans | 1,748 | 54 | 6.13 | 1,515 | 45 | 5.95 | ||||||||||||||||||||||
| Consumer loans | 2,368 | 84 | 7.15 | 2,596 | 90 | 6.94 | ||||||||||||||||||||||
| Lease financing | 1,280 | 21 | 3.26 | 1,298 | 27 | 4.06 | ||||||||||||||||||||||
| International loans | 1,879 | 66 | 7.12 | 1,841 | 61 | 6.72 | ||||||||||||||||||||||
| Business loan swap expense | — | (45 | ) | — | — | (58 | ) | — | ||||||||||||||||||||
| Total loans (2) | 49,347 | 1,735 | 7.08 | 47,144 | 1,517 | 6.48 | ||||||||||||||||||||||
| Investment securities available-for-sale | 3,916 | 88 | 4.40 | 4,121 | 89 | 4.19 | ||||||||||||||||||||||
| Federal funds sold and securities purchased under agreements to resell | 235 | 6 | 5.38 | 263 | 6 | 4.88 | ||||||||||||||||||||||
| Other short-term investments | 231 | 7 | 6.00 | 150 | 7 | 8.66 | ||||||||||||||||||||||
| Total earning assets | 53,729 | 1,836 | 6.87 | 51,678 | 1,619 | 6.29 | ||||||||||||||||||||||
| Cash and due from banks | 1,410 | 1,604 | ||||||||||||||||||||||||||
| Allowance for loan losses | (509 | ) | (498 | ) | ||||||||||||||||||||||||
| Accrued income and other assets | 2,976 | 3,163 | ||||||||||||||||||||||||||
| Total assets | $ | 57,606 | $ | 55,947 | ||||||||||||||||||||||||
| Money market and NOW deposits (1) | $ | 14,788 | 225 | 3.06 | $ | 15,959 | 211 | 2.67 | ||||||||||||||||||||
| Savings deposits | 1,400 | 6 | 0.88 | 1,478 | 5 | 0.70 | ||||||||||||||||||||||
| Customer certificates of deposit | 7,404 | 163 | 4.45 | 6,053 | 111 | 3.68 | ||||||||||||||||||||||
| Institutional certificates of deposit | 5,652 | 152 | 5.43 | 3,480 | 84 | 4.89 | ||||||||||||||||||||||
| Foreign office time deposits | 988 | 24 | 4.90 | 1,050 | 24 | 4.58 | ||||||||||||||||||||||
| Total interest-bearing deposits | 30,232 | 570 | 3.80 | 28,020 | 435 | 3.13 | ||||||||||||||||||||||
| Short-term borrowings | 1,736 | 46 | 5.31 | 3,736 | 87 | 4.71 | ||||||||||||||||||||||
| Medium- and long-term debt | 7,364 | 207 | 5.68 | 4,285 | 116 | 5.45 | ||||||||||||||||||||||
| Total interest-bearing sources | 39,332 | 823 | 4.22 | 36,041 | 638 | 3.57 | ||||||||||||||||||||||
| Noninterest-bearing deposits (1) | 11,897 | 13,591 | ||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 1,278 | 1,206 | ||||||||||||||||||||||||||
| Shareholders’ equity | 5,099 | 5,109 | ||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 57,606 | $ | 55,947 | ||||||||||||||||||||||||
| Net interest income/rate spread (FTE) | $ | 1,013 | 2.65 | $ | 981 | 2.72 | ||||||||||||||||||||||
| FTE adjustment | $ | 2 | $ | 2 | ||||||||||||||||||||||||
| Impact of net noninterest-bearing sources of funds | 1.14 | 1.09 | ||||||||||||||||||||||||||
| Net interest margin (as a percentage of average earning assets) (FTE) (2) | 3.79 | % | 3.81 | % | ||||||||||||||||||||||||
| (1) FSD balances included above: | ||||||||||||||||||||||||||||
| Loans (primarily low-rate) | $ | 1,575 | $ | 5 | 0.60 | % | $ | 2,732 | $ | 7 | 0.51 | % | ||||||||||||||||
| Interest-bearing deposits | 1,238 | 24 | 3.90 | 2,024 | 38 | 3.80 | ||||||||||||||||||||||
| Noninterest-bearing deposits | 3,363 | 4,738 | ||||||||||||||||||||||||||
| (2) Impact of FSD loans (primarily low-rate) on the following: | ||||||||||||||||||||||||||||
| Commercial loans | (0.40 | )% | (0.68 | )% | ||||||||||||||||||||||||
| Total loans | (0.22 | ) | (0.37 | ) | ||||||||||||||||||||||||
| Net interest margin (FTE) (assuming loans were funded by noninterest-bearing deposits) | (0.11 | ) | (0.20 | ) | ||||||||||||||||||||||||
-19-
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| June 30, 2007 | March 31, 2007 | June 30, 2006 | ||||||||||||||||||||||||||||||||||
| Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||
| (dollar amounts in millions) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||||||||||
| Commercial loans (1) (2) | $ | 28,324 | $ | 517 | 7.31 | % | $ | 27,757 | $ | 499 | 7.30 | % | $ | 27,587 | $ | 465 | 6.78 | % | ||||||||||||||||||
| Real estate construction loans | 4,501 | 95 | 8.45 | 4,249 | 91 | 8.66 | 3,816 | 82 | 8.63 | |||||||||||||||||||||||||||
| Commercial mortgage loans | 9,634 | 178 | 7.39 | 9,673 | 175 | 7.35 | 9,229 | 166 | 7.24 | |||||||||||||||||||||||||||
| Residential mortgage loans | 1,791 | 28 | 6.15 | 1,705 | 26 | 6.11 | 1,537 | 23 | 6.02 | |||||||||||||||||||||||||||
| Consumer loans | 2,331 | 41 | 7.15 | 2,405 | 43 | 7.14 | 2,533 | 45 | 7.07 | |||||||||||||||||||||||||||
| Lease financing | 1,287 | 11 | 3.33 | 1,273 | 10 | 3.18 | 1,299 | 14 | 4.10 | |||||||||||||||||||||||||||
| International loans | 1,925 | 34 | 7.17 | 1,834 | 32 | 7.07 | 1,801 | 31 | 6.88 | |||||||||||||||||||||||||||
| Business loan swap expense | — | (21 | ) | — | — | (24 | ) | — | — | (33 | ) | — | ||||||||||||||||||||||||
| Total loans (2) | 49,793 | 883 | 7.11 | 48,896 | 852 | 7.06 | 47,802 | 793 | 6.66 | |||||||||||||||||||||||||||
| Investment securities available-for-sale | 4,085 | 46 | 4.46 | 3,745 | 42 | 4.35 | 4,088 | 45 | 4.27 | |||||||||||||||||||||||||||
| Federal funds sold and securities purchased under agreements to resell | 195 | 2 | 5.37 | 276 | 4 | 5.39 | 336 | 5 | 5.05 | |||||||||||||||||||||||||||
| Other short-term investments | 231 | 3 | 5.21 | 231 | 4 | 6.79 | 145 | 3 | 9.24 | |||||||||||||||||||||||||||
| Total earning assets | 54,304 | 934 | 6.89 | 53,148 | 902 | 6.86 | 52,371 | 846 | 6.46 | |||||||||||||||||||||||||||
| Cash and due from banks | 1,341 | 1,480 | 1,561 | |||||||||||||||||||||||||||||||||
| Allowance for loan losses | (516 | ) | (503 | ) | (485 | ) | ||||||||||||||||||||||||||||||
| Accrued income and other assets | 2,989 | 2,963 | 3,164 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 58,118 | $ | 57,088 | $ | 56,611 | ||||||||||||||||||||||||||||||
| Money market and NOW deposits (1) | $ | 14,825 | 114 | 3.08 | $ | 14,749 | 111 | 3.05 | $ | 15,330 | 106 | 2.78 | ||||||||||||||||||||||||
| Savings deposits | 1,419 | 3 | 0.91 | 1,381 | 3 | 0.85 | 1,480 | 3 | 0.75 | |||||||||||||||||||||||||||
| Customer certificates of deposit | 7,463 | 83 | 4.46 | 7,345 | 80 | 4.44 | 6,216 | 60 | 3.83 | |||||||||||||||||||||||||||
| Institutional certificates of deposit | 5,484 | 74 | 5.43 | 5,823 | 78 | 5.44 | 4,327 | 54 | 5.04 | |||||||||||||||||||||||||||
| Foreign office time deposits | 858 | 10 | 4.81 | 1,119 | 14 | 4.96 | 1,093 | 13 | 4.87 | |||||||||||||||||||||||||||
| Total interest-bearing deposits | 30,049 | 284 | 3.80 | 30,417 | 286 | 3.81 | 28,446 | 236 | 3.33 | |||||||||||||||||||||||||||
| Short-term borrowings | 1,816 | 24 | 5.30 | 1,655 | 22 | 5.32 | 3,720 | 45 | 4.90 | |||||||||||||||||||||||||||
| Medium- and long-term debt | 8,292 | 116 | 5.63 | 6,426 | 91 | 5.74 | 4,538 | 64 | 5.65 | |||||||||||||||||||||||||||
| Total interest-bearing sources | 40,157 | 424 | 4.24 | 38,498 | 399 | 4.20 | 36,704 | 345 | 3.77 | |||||||||||||||||||||||||||
| Noninterest-bearing deposits (1) | 11,633 | 12,162 | 13,575 | |||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 1,231 | 1,327 | 1,186 | |||||||||||||||||||||||||||||||||
| Shareholders’ equity | 5,097 | 5,101 | 5,146 | |||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 58,118 | $ | 57,088 | $ | 56,611 | ||||||||||||||||||||||||||||||
| Net interest income/rate spread (FTE) | $ | 510 | 2.65 | $ | 503 | 2.66 | $ | 501 | 2.69 | |||||||||||||||||||||||||||
| FTE adjustment | $ | 1 | $ | 1 | $ | 1 | ||||||||||||||||||||||||||||||
| Impact of net noninterest-bearing sources of funds | 1.11 | 1.16 | 1.13 | |||||||||||||||||||||||||||||||||
| Net interest margin (as a percentage of average earning assets) (FTE) (2) | 3.76 | % | 3.82 | % | 3.82 | % | ||||||||||||||||||||||||||||||
| (1) FSD balances included above: | ||||||||||||||||||||||||||||||||||||
| Loans (primarily low-rate) | $ | 1,580 | $ | 2 | 0.52 | % | $ | 1,569 | $ | 3 | 0.68 | % | $ | 2,557 | $ | 4 | 0.60 | % | ||||||||||||||||||
| Interest-bearing deposits | 1,228 | 12 | 3.88 | 1,248 | 12 | 3.91 | 1,764 | 17 | 3.88 | |||||||||||||||||||||||||||
| Noninterest-bearing deposits | 3,277 | 3,450 | 4,793 | |||||||||||||||||||||||||||||||||
| (2) Impact of FSD loans (primarily low-rate) on the following: | ||||||||||||||||||||||||||||||||||||
| Commercial loans | (0.40 | )% | (0.40 | )% | (0.63 | )% | ||||||||||||||||||||||||||||||
| Total loans | (0.21 | ) | (0.22 | ) | (0.34 | ) | ||||||||||||||||||||||||||||||
| Net interest margin (FTE) (assuming loans were funded by noninterest-bearing deposits) | (0.10 | ) | (0.11 | ) | (0.18 | ) | ||||||||||||||||||||||||||||||
-20-
CONSOLIDATED STATISTICAL DATA
Comerica Incorporated and Subsidiaries
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| (in millions, except per share data) | 2007 | 2007 | 2006 | 2006 | 2006 | |||||||||||||||
| Commercial loans: | �� | |||||||||||||||||||
| Floor plan | $ | 3,012 | $ | 2,970 | $ | 3,198 | $ | 2,628 | $ | 3,166 | ||||||||||
| Other | 24,134 | 23,711 | 23,067 | 23,127 | 22,762 | |||||||||||||||
| Total commercial loans | 27,146 | 26,681 | 26,265 | 25,755 | 25,928 | |||||||||||||||
| Real estate construction loans: | ||||||||||||||||||||
| Commercial Real Estate business line | 3,777 | 3,708 | 3,449 | 3,352 | 3,222 | |||||||||||||||
| Other | 736 | 754 | 754 | 770 | 736 | |||||||||||||||
| Total real estate construction loans | 4,513 | 4,462 | 4,203 | 4,122 | 3,958 | |||||||||||||||
| Commercial mortgage loans: | ||||||||||||||||||||
| Commercial Real Estate business line | 1,344 | 1,286 | 1,534 | 1,529 | 1,537 | |||||||||||||||
| Other | 8,384 | 8,306 | 8,125 | 7,956 | 7,826 | |||||||||||||||
| Total commercial mortgage loans | 9,728 | 9,592 | 9,659 | 9,485 | 9,363 | |||||||||||||||
| Residential mortgage loans | 1,839 | 1,741 | 1,677 | 1,622 | 1,568 | |||||||||||||||
| Consumer loans: | ||||||||||||||||||||
| Home equity | 1,585 | 1,570 | 1,591 | 1,668 | 1,740 | |||||||||||||||
| Other consumer | 736 | 822 | 832 | 830 | 753 | |||||||||||||||
| Total consumer loans | 2,321 | 2,392 | 2,423 | 2,498 | 2,493 | |||||||||||||||
| Lease financing | 1,314 | 1,273 | 1,353 | 1,321 | 1,325 | |||||||||||||||
| International loans | 1,904 | 1,848 | 1,851 | 1,712 | 1,764 | |||||||||||||||
| Total loans | $ | 48,765 | $ | 47,989 | $ | 47,431 | $ | 46,515 | $ | 46,399 | ||||||||||
| Goodwill | $ | 150 | $ | 150 | $ | 150 | $ | 213 | $ | 213 | ||||||||||
| Loan servicing rights | 13 | 14 | 14 | 15 | 16 | |||||||||||||||
| Tier 1 common capital ratio* | 7.19 | % | 7.49 | % | 7.54 | % | 7.48 | % | 7.69 | % | ||||||||||
| Tier 1 risk-based capital ratio* | 7.87 | 8.19 | 8.02 | 8.04 | 8.26 | |||||||||||||||
| Total risk-based capital ratio* | 11.71 | 12.15 | 11.63 | 11.25 | 11.55 | |||||||||||||||
| Leverage ratio* | 9.68 | 10.00 | 9.76 | 9.68 | 9.83 | |||||||||||||||
| Book value per share | $ | 32.80 | $ | 32.84 | $ | 32.70 | $ | 32.79 | $ | 31.99 | ||||||||||
| Market value per share for the quarter: | ||||||||||||||||||||
| High | $ | 63.89 | $ | 63.39 | $ | 59.72 | $ | 58.95 | $ | 60.10 | ||||||||||
| Low | 58.18 | 56.77 | 55.82 | 51.45 | 50.12 | |||||||||||||||
| Close | 59.47 | 59.12 | 58.68 | 56.92 | 51.99 | |||||||||||||||
| Quarterly ratios: | ||||||||||||||||||||
| Return on average common shareholders’ equity from continuing operations | 15.41 | % | 14.83 | % | 14.03 | % | 15.00 | % | 15.15 | % | ||||||||||
| Return on average common shareholders’ equity | 15.41 | 14.86 | 22.63 | 15.38 | 15.50 | |||||||||||||||
| Return on average assets from continuing operations | 1.35 | 1.33 | 1.29 | 1.37 | 1.38 | |||||||||||||||
| Return on average assets | 1.35 | 1.33 | 2.07 | 1.41 | 1.41 | |||||||||||||||
| Efficiency ratio | 55.97 | 57.66 | 59.81 | 57.15 | 55.41 | |||||||||||||||
| Number of banking centers | 402 | 402 | 393 | 382 | 378 | |||||||||||||||
| Number of employees — full time equivalent | ||||||||||||||||||||
| Continuing operations | 10,687 | 10,661 | 10,700 | 10,568 | 10,549 | |||||||||||||||
| Discontinued operations | — | — | — | 167 | 169 | |||||||||||||||
| * | June 30, 2007 ratios are estimated |
-21-
PARENT COMPANY ONLY BALANCE SHEETS
Comerica Incorporated
| June 30, | December 31, | June 30, | ||||||||||
| (in millions, except share data) | 2007 | 2006 | 2006 | |||||||||
ASSETS | ||||||||||||
| Cash and due from subsidiary bank | $ | 9 | $ | 122 | $ | — | ||||||
| Short-term investments with subsidiary bank | 353 | 246 | 372 | |||||||||
| Other short-term investments | 103 | 92 | 87 | |||||||||
| Investment in subsidiaries, principally banks | 5,617 | 5,586 | 5,607 | |||||||||
| Premises and equipment | 3 | 4 | 3 | |||||||||
| Other assets | 147 | 152 | 151 | |||||||||
| Total assets | $ | 6,232 | $ | 6,202 | $ | 6,220 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Long-term debt | $ | 946 | $ | 806 | $ | 795 | ||||||
| Other liabilities | 268 | 243 | 236 | |||||||||
| Total liabilities | 1,214 | 1,049 | 1,031 | |||||||||
| Common stock - - $5 par value: | ||||||||||||
| Authorized - 325,000,000 shares | ||||||||||||
| Issued - 178,735,252 shares at 6/30/07, 12/31/06 and 6/30/06 | 894 | 894 | 894 | |||||||||
| Capital surplus | 539 | 520 | 494 | |||||||||
| Accumulated other comprehensive loss | (308 | ) | (324 | ) | (226 | ) | ||||||
| Retained earnings | 5,400 | 5,282 | 4,978 | |||||||||
| Less cost of common stock in treasury - 25,725,671 shares at 6/30/07, 21,161,161 shares at 12/31/06 and 16,534,470 shares at 6/30/06 | (1,507 | ) | (1,219 | ) | (951 | ) | ||||||
| Total shareholders’ equity | 5,018 | 5,153 | 5,189 | |||||||||
| Total liabilities and shareholders’ equity | $ | 6,232 | $ | 6,202 | $ | 6,220 | ||||||
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 | Loss | Earnings | Stock | Equity | |||||||||||||||||||||
BALANCE AT JANUARY 1, 2006 | 162.9 | $ | 894 | $ | 461 | $ | (170 | ) | $ | 4,796 | $ | (913 | ) | $ | 5,068 | |||||||||||||
| Net income | — | — | — | — | 394 | — | 394 | |||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | (56 | ) | — | — | (56 | ) | |||||||||||||||||||
| Total comprehensive income | 338 | |||||||||||||||||||||||||||
| Cash dividends declared on common stock ($1.18 per share) | — | — | — | — | (192 | ) | — | (192 | ) | |||||||||||||||||||
| Purchase of common stock | (1.5 | ) | — | — | — | — | (88 | ) | (88 | ) | ||||||||||||||||||
| Net issuance of common stock under employee stock plans | 1.1 | — | (17 | ) | — | (20 | ) | 67 | 30 | |||||||||||||||||||
| Recognition of share-based compensation expense | — | — | 33 | — | — | — | 33 | |||||||||||||||||||||
| Employee deferred compensation obligations | (0.3 | ) | — | 17 | — | — | (17 | ) | — | |||||||||||||||||||
BALANCE AT JUNE 30, 2006 | 162.2 | $ | 894 | $ | 494 | $ | (226 | ) | $ | 4,978 | $ | (951 | ) | $ | 5,189 | |||||||||||||
BALANCE AT DECEMBER 31, 2006 | 157.6 | $ | 894 | $ | 520 | $ | (324 | ) | $ | 5,282 | $ | (1,219 | ) | $ | 5,153 | |||||||||||||
| FSP 13-2 transition adjustment, net of tax | — | — | — | — | (46 | ) | — | (46 | ) | |||||||||||||||||||
| FIN 48 transition adjustment, net of tax | — | — | — | — | 3 | — | 3 | |||||||||||||||||||||
BALANCE AT JANUARY 1, 2007 | 157.6 | 894 | 520 | (324 | ) | 5,239 | (1,219 | ) | 5,110 | |||||||||||||||||||
| Net income | — | — | — | — | 386 | — | 386 | |||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | 16 | — | — | 16 | |||||||||||||||||||||
| Total comprehensive income | — | — | — | — | — | — | 402 | |||||||||||||||||||||
| Cash dividends declared on common stock ($1.28 per share) | — | — | — | — | (199 | ) | — | (199 | ) | |||||||||||||||||||
| Purchase of common stock | (6.9 | ) | — | — | — | — | (425 | ) | (425 | ) | ||||||||||||||||||
| Net issuance of common stock under employee stock plans | 2.3 | — | (17 | ) | — | (26 | ) | 138 | 95 | |||||||||||||||||||
| Recognition of share-based compensation expense | — | — | 35 | — | — | — | 35 | |||||||||||||||||||||
| Employee deferred compensation obligations | — | — | 1 | — | — | (1 | ) | — | ||||||||||||||||||||
BALANCE AT JUNE 30, 2007 | 153.0 | $ | 894 | $ | 539 | $ | (308 | ) | $ | 5,400 | $ | (1,507 | ) | $ | 5,018 | |||||||||||||
-22-
BUSINESS SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
| Wealth & | ||||||||||||||||||||||||
| (dollar amounts in millions) | Business | Retail | Institutional | |||||||||||||||||||||
| Three Months Ended June 30, 2007 | Bank | Bank | Management | Finance | Other | Total | ||||||||||||||||||
| Earnings summary: | ||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 338 | $ | 160 | $ | 36 | $ | (18 | ) | $ | (6 | ) | $ | 510 | ||||||||||
| Provision for loan losses | 32 | 4 | 2 | — | (2 | ) | 36 | |||||||||||||||||
| Noninterest income | 68 | 57 | 70 | 16 | 14 | 225 | ||||||||||||||||||
| Noninterest expenses | 176 | 160 | 79 | 3 | (7 | ) | 411 | |||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 62 | 18 | 9 | (5 | ) | 8 | 92 | |||||||||||||||||
| Income from discontinued operations, net of tax | — | — | — | — | — | — | ||||||||||||||||||
| Net income (loss) | $ | 136 | $ | 35 | $ | 16 | $ | — | $ | 9 | $ | 196 | ||||||||||||
| Net credit-related charge-offs | $ | 24 | $ | 6 | $ | — | $ | — | $ | — | $ | 30 | ||||||||||||
| Selected average balances: | ||||||||||||||||||||||||
| Assets | $ | 40,848 | $ | 6,828 | $ | 4,009 | $ | 5,296 | $ | 1,137 | $ | 58,118 | ||||||||||||
| Loans | 39,824 | 6,100 | 3,860 | 2 | 7 | 49,793 | ||||||||||||||||||
| Deposits | 16,432 | 17,191 | 2,295 | 5,840 | (76 | ) | 41,682 | |||||||||||||||||
| Liabilities | 17,263 | 17,204 | 2,303 | 16,033 | 218 | 53,021 | ||||||||||||||||||
| Attributed equity | 2,914 | 846 | 325 | 595 | 417 | 5,097 | ||||||||||||||||||
| Statistical data: | ||||||||||||||||||||||||
| Return on average assets (1) | 1.33 | % | 0.78 | % | 1.59 | % | N/M | N/M | 1.35 | % | ||||||||||||||
| Return on average attributed equity | 18.69 | 16.56 | 19.55 | N/M | N/M | 15.41 | ||||||||||||||||||
| Net interest margin (2) | 3.39 | 3.73 | 3.72 | N/M | N/M | 3.76 | ||||||||||||||||||
| Efficiency ratio | 43.49 | 73.61 | 74.74 | N/M | N/M | 55.97 | ||||||||||||||||||
| Wealth & | ||||||||||||||||||||||||
| Business | Retail | Institutional | ||||||||||||||||||||||
| Three Months Ended March 31, 2007 | Bank | Bank | Management | Finance | Other | Total | ||||||||||||||||||
| Earnings summary: | ||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 329 | $ | 157 | $ | 36 | $ | (17 | ) | $ | (2 | ) | $ | 503 | ||||||||||
| Provision for loan losses | 14 | 5 | (1 | ) | — | 5 | 23 | |||||||||||||||||
| Noninterest income | 61 | 52 | 71 | 16 | 3 | 203 | ||||||||||||||||||
| Noninterest expenses | 170 | 153 | 76 | 2 | 6 | 407 | ||||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 65 | 18 | 11 | (4 | ) | (3 | ) | 87 | ||||||||||||||||
| Income from discontinued operations, net of tax | — | — | — | — | 1 | 1 | ||||||||||||||||||
| Net income (loss) | $ | 141 | $ | 33 | $ | 21 | $ | 1 | $ | (6 | ) | $ | 190 | |||||||||||
| Net credit-related charge-offs | $ | 15 | $ | 4 | $ | — | $ | — | $ | — | $ | 19 | ||||||||||||
| Selected average balances: | ||||||||||||||||||||||||
| Assets | $ | 40,059 | $ | 6,840 | $ | 3,898 | $ | 5,015 | $ | 1,276 | $ | 57,088 | ||||||||||||
| Loans | 39,015 | 6,095 | 3,747 | 17 | 22 | 48,896 | ||||||||||||||||||
| Deposits | 16,710 | 17,033 | 2,317 | 6,490 | 29 | 42,579 | ||||||||||||||||||
| Liabilities | 17,565 | 17,045 | 2,317 | 14,600 | 460 | 51,987 | ||||||||||||||||||
| Attributed equity | 2,850 | 835 | 312 | 574 | 530 | 5,101 | ||||||||||||||||||
| Statistical data: | ||||||||||||||||||||||||
| Return on average assets (1) | 1.41 | % | 0.75 | % | 2.17 | % | N/M | N/M | 1.33 | % | ||||||||||||||
| Return on average attributed equity | 19.80 | 15.97 | 27.09 | N/M | N/M | 14.86 | ||||||||||||||||||
| Net interest margin (2) | 3.42 | 3.74 | 3.88 | N/M | N/M | 3.82 | ||||||||||||||||||
| Efficiency ratio | 43.56 | 73.11 | 70.74 | N/M | N/M | 57.66 | ||||||||||||||||||
| Wealth & | ||||||||||||||||||||||||
| Business | Retail | Institutional | ||||||||||||||||||||||
| Three Months Ended June 30, 2006 | Bank | Bank | Management | Finance | Other | Total | ||||||||||||||||||
| Earnings summary: | ||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 333 | $ | 162 | $ | 37 | $ | (27 | ) | $ | (4 | ) | $ | 501 | ||||||||||
| Provision for loan losses | 21 | 8 | (1 | ) | — | (1 | ) | 27 | ||||||||||||||||
| Noninterest income | 71 | 54 | 64 | 14 | — | 203 | ||||||||||||||||||
| Noninterest expenses | 182 | 150 | 76 | 2 | (21 | ) | 389 | |||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 64 | 19 | 9 | (8 | ) | 9 | 93 | |||||||||||||||||
| Income from discontinued operations, net of tax | — | — | — | — | 5 | 5 | ||||||||||||||||||
| Net income (loss) | $ | 137 | $ | 39 | $ | 17 | $ | (7 | ) | $ | 14 | $ | 200 | |||||||||||
| Net credit-related charge-offs | $ | 12 | $ | 8 | $ | — | $ | — | $ | (1 | ) | $ | 19 | |||||||||||
| Selected average balances: | ||||||||||||||||||||||||
| Assets | $ | 39,367 | $ | 6,786 | $ | 3,608 | $ | 5,272 | $ | 1,578 | $ | 56,611 | ||||||||||||
| Loans | 38,175 | 6,094 | 3,470 | 26 | 37 | 47,802 | ||||||||||||||||||
| Deposits | 17,931 | 16,770 | 2,463 | 4,987 | (130 | ) | 42,021 | |||||||||||||||||
| Liabilities | 18,898 | 16,769 | 2,460 | 13,103 | 235 | 51,465 | ||||||||||||||||||
| Attributed equity | 2,608 | 840 | 294 | 463 | 941 | 5,146 | ||||||||||||||||||
| Statistical data: | ||||||||||||||||||||||||
| Return on average assets (1) | 1.39 | % | 0.88 | % | 1.92 | % | N/M | N/M | 1.41 | % | ||||||||||||||
| Return on average attributed equity | 20.94 | 18.47 | 23.52 | N/M | N/M | 15.50 | ||||||||||||||||||
| Net interest margin (2) | 3.53 | 3.92 | 4.35 | N/M | N/M | 3.82 | ||||||||||||||||||
| Efficiency ratio | 45.38 | 69.33 | 74.71 | N/M | N/M | 55.41 | ||||||||||||||||||
| (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. | |
| FTE — Fully Taxable Equivalent | ||
| N/M — Not Meaningful | ||
-23-
MARKET SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
| Finance | ||||||||||||||||||||||||||||||||
| (dollar amounts in millions) | Other | & Other | ||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2007 | Midwest | Western | Texas | Florida | Markets | International | Businesses | Total | ||||||||||||||||||||||||
| Earnings summary: | ||||||||||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 248 | $ | 179 | $ | 69 | $ | 11 | $ | 8 | $ | 19 | $ | (24 | ) | $ | 510 | |||||||||||||||
| Provision for loan losses | 34 | 5 | 3 | 2 | — | (6 | ) | (2 | ) | 36 | ||||||||||||||||||||||
| Noninterest income | 122 | 32 | 20 | 3 | 9 | 9 | 30 | 225 | ||||||||||||||||||||||||
| Noninterest expenses | 217 | 113 | 56 | 9 | 9 | 11 | (4 | ) | 411 | |||||||||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 32 | 35 | 10 | 1 | 3 | 8 | 3 | 92 | ||||||||||||||||||||||||
| Income from discontinued operations, net of tax | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Net income (loss) | $ | 87 | $ | 58 | $ | 20 | $ | 2 | $ | 5 | $ | 15 | $ | 9 | $ | 196 | ||||||||||||||||
| Net credit-related charge-offs (recoveries) | $ | 29 | $ | 4 | $ | 1 | $ | 1 | $ | — | $ | (5 | ) | $ | — | $ | 30 | |||||||||||||||
| Selected average balances: | ||||||||||||||||||||||||||||||||
| Assets | $ | 22,874 | $ | 17,257 | $ | 6,844 | $ | 1,666 | $ | 769 | $ | 2,274 | $ | 6,434 | $ | 58,118 | ||||||||||||||||
| Loans | 21,946 | 16,715 | 6,570 | 1,649 | 759 | 2,145 | 9 | 49,793 | ||||||||||||||||||||||||
| Deposits | 16,477 | 13,595 | 3,836 | 290 | 473 | 1,247 | 5,764 | 41,682 | ||||||||||||||||||||||||
| Liabilities | 17,252 | 13,633 | 3,852 | 294 | 472 | 1,266 | 16,252 | 53,021 | ||||||||||||||||||||||||
| Attributed equity | 1,981 | 1,206 | 594 | 90 | 59 | 155 | 1,012 | 5,097 | ||||||||||||||||||||||||
| Statistical data: | ||||||||||||||||||||||||||||||||
| Return on average assets (1) | 1.52 | % | 1.36 | % | 1.14 | % | 0.53 | % | 2.53 | % | 2.60 | % | N/M | 1.35 | % | |||||||||||||||||
| Return on average attributed equity | 17.55 | 19.51 | 13.13 | 9.76 | 33.10 | 38.21 | N/M | 15.41 | ||||||||||||||||||||||||
| Net interest margin (2) | 4.52 | 4.29 | 4.22 | 2.68 | 3.98 | 3.33 | N/M | 3.76 | ||||||||||||||||||||||||
| Efficiency ratio | 58.60 | 53.59 | 63.11 | 63.23 | 54.26 | 40.28 | N/M | 55.97 | ||||||||||||||||||||||||
| Finance | ||||||||||||||||||||||||||||||||
| Other | & Other | |||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2007 | Midwest | Western | Texas | Florida | Markets | International | Businesses | Total | ||||||||||||||||||||||||
| Earnings summary: | ||||||||||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 244 | $ | 176 | $ | 67 | $ | 11 | $ | 7 | $ | 17 | $ | (19 | ) | $ | 503 | |||||||||||||||
| Provision for loan losses | 30 | (11 | ) | (1 | ) | 1 | (1 | ) | — | 5 | 23 | |||||||||||||||||||||
| Noninterest income | 116 | 28 | 19 | 4 | 9 | 8 | 19 | 203 | ||||||||||||||||||||||||
| Noninterest expenses | 206 | 110 | 54 | 9 | 9 | 11 | 8 | 407 | ||||||||||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 34 | 39 | 11 | 2 | 3 | 5 | (7 | ) | 87 | |||||||||||||||||||||||
| Income from discontinued operations, net of tax | — | — | — | — | — | — | 1 | 1 | ||||||||||||||||||||||||
| Net income (loss) | $ | 90 | $ | 66 | $ | 22 | $ | 3 | $ | 5 | $ | 9 | $ | (5 | ) | $ | 190 | |||||||||||||||
| Net credit-related charge-offs (recoveries) | $ | 22 | $ | (5 | ) | $ | 3 | $ | — | $ | — | $ | (1 | ) | $ | — | $ | 19 | ||||||||||||||
| Selected average balances: | ||||||||||||||||||||||||||||||||
| Assets | $ | 22,755 | $ | 16,782 | $ | 6,719 | $ | 1,646 | $ | 713 | $ | 2,182 | $ | 6,291 | $ | 57,088 | ||||||||||||||||
| Loans | 21,783 | 16,241 | 6,444 | 1,626 | 704 | 2,059 | 39 | 48,896 | ||||||||||||||||||||||||
| Deposits | 16,657 | 13,696 | 3,843 | 284 | 482 | 1,098 | 6,519 | 42,579 | ||||||||||||||||||||||||
| Liabilities | 17,430 | 13,732 | 3,858 | 288 | 482 | 1,137 | 15,060 | 51,987 | ||||||||||||||||||||||||
| Attributed equity | 1,955 | 1,177 | 556 | 87 | 57 | 165 | 1,104 | 5,101 | ||||||||||||||||||||||||
| Statistical data: | ||||||||||||||||||||||||||||||||
| Return on average assets (1) | 1.58 | % | 1.57 | % | 1.30 | % | 0.78 | % | 3.09 | % | 1.68 | % | N/M | 1.33 | % | |||||||||||||||||
| Return on average attributed equity | 18.40 | 22.37 | 15.73 | 14.78 | 38.92 | 22.27 | N/M | 14.86 | ||||||||||||||||||||||||
| Net interest margin (2) | 4.52 | 4.40 | 4.19 | 2.84 | 4.22 | 3.22 | N/M | 3.82 | ||||||||||||||||||||||||
| Efficiency ratio | 57.17 | 54.23 | 62.24 | 60.05 | 54.54 | 42.08 | N/M | 57.66 | ||||||||||||||||||||||||
| Finance | ||||||||||||||||||||||||||||||||
| Other | & Other | |||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2006 | Midwest | Western | Texas | Florida | Markets | International | Businesses | Total | ||||||||||||||||||||||||
| Earnings summary: | ||||||||||||||||||||||||||||||||
| Net interest income (expense) (FTE) | $ | 251 | $ | 179 | $ | 64 | $ | 11 | $ | 9 | $ | 18 | $ | (31 | ) | $ | 501 | |||||||||||||||
| Provision for loan losses | 22 | 2 | (1 | ) | 5 | 1 | (1 | ) | (1 | ) | 27 | |||||||||||||||||||||
| Noninterest income | 120 | 34 | 18 | 3 | 7 | 7 | 14 | 203 | ||||||||||||||||||||||||
| Noninterest expenses | 215 | 110 | 53 | 8 | 9 | 13 | (19 | ) | 389 | |||||||||||||||||||||||
| Provision (benefit) for income taxes (FTE) | 38 | 38 | 10 | — | 2 | 4 | 1 | 93 | ||||||||||||||||||||||||
| Income from discontinued operations, net of tax | — | — | — | — | — | — | 5 | 5 | ||||||||||||||||||||||||
| Net income (loss) | $ | 96 | $ | 63 | $ | 20 | $ | 1 | $ | 4 | $ | 9 | $ | 7 | $ | 200 | ||||||||||||||||
| Net credit-related charge-offs (recoveries) | $ | 16 | $ | 3 | $ | 2 | $ | — | $ | (1 | ) | $ | — | $ | (1 | ) | $ | 19 | ||||||||||||||
| Selected average balances: | ||||||||||||||||||||||||||||||||
| Assets | $ | 22,724 | $ | 16,515 | $ | 6,055 | $ | 1,537 | $ | 695 | $ | 2,235 | $ | 6,850 | $ | 56,611 | ||||||||||||||||
| Loans | 21,700 | 15,955 | 5,796 | 1,517 | 686 | 2,084 | 64 | 47,802 | ||||||||||||||||||||||||
| Deposits | 16,674 | 14,861 | 3,668 | 313 | 581 | 1,067 | 4,857 | 42,021 | ||||||||||||||||||||||||
| Liabilities | 17,469 | 14,992 | 3,676 | 312 | 580 | 1,099 | 13,337 | 51,465 | ||||||||||||||||||||||||
| Attributed equity | 1,831 | 1,090 | 523 | 77 | 59 | 162 | 1,404 | 5,146 | ||||||||||||||||||||||||
| Statistical data: | ||||||||||||||||||||||||||||||||
| Return on average assets (1) | 1.68 | % | 1.54 | % | 1.33 | % | 0.20 | % | 2.33 | % | 1.52 | % | N/M | 1.41 | % | |||||||||||||||||
| Return on average attributed equity | 20.90 | 23.26 | 15.42 | 3.99 | 27.79 | 21.06 | N/M | 15.50 | ||||||||||||||||||||||||
| Net interest margin (2) | 4.69 | 4.55 | 4.51 | 2.83 | 5.05 | 3.25 | N/M | 3.82 | ||||||||||||||||||||||||
| Efficiency ratio | 58.26 | 51.62 | 64.23 | 58.78 | 54.39 | 52.54 | N/M | 55.41 | ||||||||||||||||||||||||
| (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. | |
| FTE — Fully Taxable Equivalent | ||
| N/M — Not Meaningful | ||
-24-