Securities and Exchange Commission
Washington, DC 20549
Form 10-K
Annual Report Pursuant
to Section 13 or 15(d) of
the Securities Exchange Act
of 1934.
For the fiscal year ended December 31, 1996.
Commission file number
1-10706
Comerica Incorporated
Comerica Tower at Detroit Center
500 Woodward Avenue,
Detroit, Michigan 48226
313-222-4000
Incorporated in the State
of Delaware, IRS Employer Identification No. 38-1998421.
Securities registered pursuant to Section 12(b) of the Act:
- - Common Stock, $5 par value
- - Rights to acquire Series D
Preferred Stock, no par value
- - Preferred Stock Series E, $50.00 liquidation preference per share
These securities are registered on the New York Stock Exchange.
Securities registered pursuant to Section 12(g) of the Act:
- - 10 1/8 percent Subordinated
Debentures due in 1998
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- - 7 1/4 percent Subordinated
Notes due in 2007
The registrant: (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, but will be contained in the definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
At March 10, 1997, the registrant's common stock, $5 par value, held by
nonaffiliates had an aggregate market value of $6,161,755,577 based on the
closing price on the New York Stock Exchange on that date of $ 62.75 per
share and 98,195,308 shares of common stock held by nonaffiliates. For
purposes of this Form 10-K only, it has been assumed that all common shares
held by the Trust Department of Comerica affiliated banks and by the
registrant's directors and executive officers are held by affiliates.
At March 10, 1997, the registrant had outstanding 106,421,266 shares of its
common stock, $5 par value.
DOCUMENTS INCORPORATED
BY REFERENCE:
1. Parts I and II:
Items 1-8--Annual Report to Shareholders for the year ended December 31, 1996.
2. Part III:
Items 10-13--Proxy Statement for the Annual Meeting of Shareholders to be held
May 16, 1997.
PART I
ITEM 1. BUSINESS
GENERAL
Comerica Incorporated ("Comerica" or the "Corporation") is a registered bank
holding company incorporated under the laws of the State of Delaware,
headquartered in Detroit, Michigan. Based on assets as of December 31, 1996, it
was the 25th largest bank holding company in the United
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States and the largest bank holding company headquartered in Michigan in
terms of both total assets and total deposits. Comerica was formed in 1973 to
acquire the outstanding common stock of Comerica Bank (formerly Comerica
Bank-Detroit), one of Michigan's oldest banks ("Comerica Bank"). Since that
time, Comerica has acquired financial institutions in California, Texas and
Florida. As of December 31, 1996, Comerica owned directly or indirectly all
the outstanding common stock (except for directors' qualifying shares, where
applicable) of six banking and thirty-seven non-banking subsidiaries. At
December 31, 1996, Comerica had total assets of approximately $34.2 billion,
total deposits of approximately $22.4 billion, total loans (net of unearned
income) of approximately $26.2 billion and common shareholders' equity of
approximately $2.4 billion.
BUSINESS STRATEGY
Comerica has strategically aligned its operations into three major lines of
business: the Business Bank, the Individual Bank and the Investment Bank. The
Business Bank is comprised of middle market lending, asset based lending, large
corporate banking, international financial services and institutional trust.
This line of business meets the needs of medium-size businesses, multinational
corporations, and governmental entities by offering various products and
services, including commercial loans and lines of credit, deposits, cash
management, institutional trust, international trade finance, letters of credit
and foreign exchange management services.
The Individual Bank includes consumer lending, consumer deposit gathering,
mortgage loan origination and servicing, small business banking (annual sales
under $5 million) and private banking. This line of business offers a
variety of consumer products, including deposit accounts, direct and indirect
installment loans, credit cards, home equity lines of credit and residential
mortgage loans. In addition, a full range of financial services is provided
to small business, area merchants and municipalities. Private lending and
personal trust services are also provided to meet the personal financial
needs of affluent individuals (as defined by individual net income or wealth).
The Investment Bank is responsible for the sales of mutual fund and annuity
products, as well as life, disability and long-term care insurance products.
This line of business also offers capital market products, manages loan
syndications and provides investment management and advisory services,
investment banking and discount securities brokerage services.
The core businesses are tailored to each of Comerica's four primary geographic
markets: Michigan, Texas, California and Florida.
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PHASE III OF DIRECTION 2000
In 1996, Comerica completed the final steps of Direction 2000, the strategic
effort to prepare the organization for the new millennium. Following Comerica's
1995 organization of its business units into the Business, Individual and
Investment Banks, and the subsequent alignment and consolidation of back-office
areas, Comerica in 1996 identified which business lines it believed were best
managed on a local basis and a national basis and realigned its support
functions to optimally link them to business strategies and corporate
objectives. In the third and final phase of this effort, Comerica employees
systematically reviewed all functions of the organization. Their objectives were
to determine first, if the work was absolutely necessary and second, if they
were doing the work in the most efficient way possible. Comerica's goal was to
improve customer service, increase efficiency, enhance revenue and position it
to achieve its financial objectives. Comerica employees identified myriad ways
to serve customers better, including simplifying the referral and delivery of
its services, empowering colleagues with additional authority and reducing their
clerical responsibility. In addition to reducing overhead costs and enhancing
revenues, the results of Phase III are expected to support future investments in
growth businesses, geographic expansion, marketing, technology and talent.
Phase III of Direction 2000 which, when fully implemented by the first half of
1998, may reduce overhead costs and increase revenues on an annualized basis by
$110 million. However, several outside factors such as an economic downturn,
significant changes in monetary or governmental policies or dramatic changes in
interest rates could cause the actual results to differ materially from these
projections.
SHAREHOLDER VALUE
In 1996, as part of Comerica's capital management program, Comerica directors
authorized the purchase of up to 15 million shares of Comerica common stock.
At December 31, 1996, 8.6 million shares had been repurchased under this
program, reflecting its commitment to optimize its capital position and focus
on shareholder value. The share repurchase activity is beneficial to
shareholders who sell their shares by providing additional liquidity to the
marketplace and allowing for the efficient redistribution of ownership. For
shareholders who remain, the repurchase activity leverages ownership through
a smaller base of common shares over which earnings are spread. In 1996
Comerica also issued preferred stock, a strategy which, when coupled with the
common stock repurchase plan, further enhanced the returns available to
common shareholders.
ACQUISITIONS
Comerica acquired Metrobank, a California bank with assets of approximately $1.1
billion, on January 16, 1996, through the merger of Metrobank into Comerica
Holdings Incorporated
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("Holdings"), a California corporation and wholly-owned subsidiary of Comerica,
with Metrobank being the surviving corporation, operating as a wholly-owned
subsidiary of Comerica under the charter and by-laws of Metrobank with the name
"Metrobank." The acquisition was accounted for as a purchase and the
shareholders of Metrobank received common stock of Comerica valued at about $125
million in exchange for their interests in Metrobank. To complete the
acquisition, Comerica merged Metrobank into Comerica Bank-California, effective
November 1, 1996, with Comerica Bank-California surviving.
Comerica completed several other non-bank acquisitions in 1996 to enhance its
ability to compete in its developing markets. On April 10, 1996, Comerica Bank
acquired Fairlane Associates, Inc., a Michigan corporation and insurance agency
whose product line includes property and casualty insurance. This acquisition
expanded Comerica's ability to provide insurance products to its customers.
On October 17, 1996, acting through its partnership interest in Munder Capital
Management ("Munder"), Comerica broadened its global capabilities when Munder
purchased a 49% interest in London based Framlington Group plc. Framlington
offers a wide range of international mutual funds and enhanced Munder's
penetration in this market and enabled Munder to offer additional products to
its customers.
On November 15, 1996, Comerica acquired a 36% interest in B. Motor Acceptance
Corp., which was formed to offer subprime indirect automobile lending.
On December 20, 1996, acting through a national banking subsidiary, Comerica
acquired a 5.58% interest in Integrion Financial Network, LLC, to offer it
access to electronic banking and commerce services available through a common
network.
DIVESTITURES
During 1996 Comerica continued to sharpen its focus on those areas in which it
excels and exit those lines which do not meet its profitability standards. This
strategy includes outsourcing and entering into alliances to better provide
services to its customers. Comerica followed this strategy with respect to
merchant services by entering into (through its California, Michigan and Texas
banking subsidiaries), an alliance with National Data Corporation ("NDC") on
March 31, 1996. This alliance is designed to enhance services to customers and
gain operational efficiencies using NDC's technical expertise.
On March 18, 1996, Comerica entered into an agreement with ABN-
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AMRO North America, Inc. ("ABN-AMRO") for the sale of the stock of Comerica
Bank-Illinois ("CBI"), an Illinois bank, via a merger with a subsidiary of
ABN-AMRO. The transaction closed on August 18, 1996. The assets sold to
ABN-AMRO represented approximately 4% of Comerica's total assets and Comerica
received approximately $160 million in exchange for its ownership interest in
CBI. Comerica continues to maintain a presence in Illinois to serve certain of
its business customers.
Comerica also decided to exit the customs brokerage and freight forwarding
business. On April 12, 1996, Comerica entered into an agreement with AEI
Radix Custom Brokerage Services, a California corporation, to sell the
business and certain assets of John V. Carr & Son, Inc., Comerica Bank's
wholly owned customs brokerage and freight forwarding subsidiary. The
transaction was consummated on May 18, 1996.
Comerica's final strategic divestiture in 1996 was the sale of its bond
indenture and escrow business. On September 25, 1996, Comerica entered into an
agreement with First Bank System, Inc. for that business. The transaction
closed on January 31, 1997.
SUPERVISION AND
REGULATION
Banks, bank holding companies and financial institutions are highly regulated at
both the state and federal level. As a bank holding company, Comerica is subject
to supervision and regulation by the Federal Reserve Board under the Bank
Holding Company Act of 1956, as amended (the "Act"). Under the Act, the
Corporation is prohibited from engaging in activities other than those of
banking or of managing or controlling banks or from acquiring or retaining
direct or indirect ownership or control of voting shares of any company which is
not a bank or bank holding company unless the activities engaged in by the
Corporation or the company whose voting shares are acquired by the Corporation
are activities which the Federal Reserve Board determines to be so closely
related to the business of banking as to be a proper incident thereto.
Comerica Bank is chartered by the State of Michigan and is supervised and
regulated by the Financial Institutions Bureau of the State of Michigan.
Comerica Bank-Texas is chartered by the State of Texas and is supervised and
regulated by the Texas Department of Banking. Comerica Bank-Midwest, N.A. and
Comerica Bank-Ann Arbor, N.A. are chartered under federal law and subject to
supervision and regulation by the Office of the Comptroller of the Currency.
Comerica Bank-California is chartered by the State of California and regulated
by the California State Banking Department. Comerica Bank & Trust, FSB is
chartered under federal law and subject to supervision and regulation by the
Office of Thrift Supervision. Comerica Bank, Comerica Bank-Ann Arbor, N.A. and
Comerica Bank-Midwest, N.A. are members of the Federal Reserve
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System. State member banks are also regulated by the Federal Reserve Board and
state non-member banks are also regulated by the Federal Deposit Insurance
Corporation ("FDIC"). The deposits of all the banks are insured by the Bank
Insurance Fund (the "BIF") of the FDIC to the extent provided by law, except
that the deposits of Comerica Bank & Trust, FSB are insured by the FDIC's
Savings Association Insurance Fund ("SAIF").
Comerica is a legal entity separate and distinct from its banking and other
subsidiaries. Most of Comerica's revenues result from dividends paid to it by
its bank subsidiaries. There are statutory and regulatory requirements
applicable to the payment of dividends by subsidiary banks to Comerica as well
as by Comerica to its shareholders.
INTERSTATE BANKING AND BRANCHING
On September 29, 1995, the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Act") was enacted. The Interstate
Act's provisions, among other things: (i) permit bank holding companies to
acquire control of banks in any state, subject to (a) specified maximum
national state deposit concentration limits; (b) any applicable state law
provisions requiring the acquired bank to be in existence for a
specified period of up to five years; (c) any applicable nondiscriminatory
state provisions that make an acquisition of a bank contingent upon a
requirement to hold a portion of such bank's assets available for call by a
state sponsored housing entity; and (d) applicable anti-trust laws; (ii)
authorize interstate mergers by banks in different states (and retention of
interstate branches resulting from such mergers) beginning June 1, 1997,
subject to the provisions noted in (i) and to any state laws that "opt-in" as
of an earlier date or "opt-out" of the provision entirely; and (iii)
authorize states to enact legislation permitting interstate de novo branching.
Since the provision permitting interstate bank acquisitions became effective,
Comerica has had enhanced opportunities to acquire banks in any state subject to
approval by the appropriate federal and state regulatory agencies. Under the
Interstate Act, Comerica will have the opportunity (after June 1, 1997, for
states that do not "opt-out" and earlier for states that "opt-in") to
consolidate its affiliate banks to create one bank with branches in more than
one state, or to establish branches in different states, subject to any state
"opt-in" and "opt-out" provisions. Of Comerica's primary markets, as of
December 31, 1996 Texas was the only state to have opted out of the interstate
branching provisions. The Texas "opt-out" expires in September 1999.
DIVIDENDS
Each state bank subsidiary that is a member of the Federal Reserve System and
each national banking association is required by federal law to obtain the prior
approval of the Federal Reserve
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Board or the Office of the Comptroller of the Currency, as the case may be, for
the declaration and payment of dividends if the total of all dividends declared
by the board of directors of such bank in any year will exceed the total of (i)
such bank's retained net income (as defined and interpreted by regulation) for
that year plus (ii) the retained net income (as defined and interpreted by
regulation) for the preceding two years, less any required transfers to surplus.
In addition, these banks may only pay dividends to the extent that retained net
profits (including the portion transferred to surplus) exceed bad debts (as
defined by regulation). Comerica's state bank subsidiaries that are not members
of the Federal Reserve System are also subject to limitations under state law
regarding the amount of earnings that may be paid out as dividends. Comerica's
federal savings bank subsidiary is subject to limitations under federal law
regarding the payment of dividends.
Under the foregoing dividend restrictions, at January 1, 1997 Comerica's
subsidiary banks, without obtaining governmental approvals, could declare
aggregate dividends of approximately $371 million from retained net profits of
the preceding two years, plus an amount approximately equal to the net profits
(as measured under current regulations), if any, earned for the period from
January 1, 1997 through the date of declaration. Dividends paid to Comerica by
its subsidiary banks amounted to $322 million in 1996, $184 million in 1995 and
$293 million in 1994.
FIRREA
Banking legislation, including the Financial Institutions Reform and Recovery
and Enforcement Act of 1989 ("FIRREA") and the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), has broadened the regulatory
powers of the federal bank regulatory agencies. Under FIRREA, a depository
institution insured by the FDIC shall be liable for any loss incurred by, or
reasonably expected to be incurred by, the FDIC in connection with (i) the
default of a commonly controlled FDIC-insured depository institution, or (ii)
any assistance provided by the FDIC to any commonly controlled FDIC-insured
depository institution "in danger of default." "Default" is defined generally as
the appointment of a conservator or receiver and "in danger of default" is
defined as the existence of certain conditions indicating that a default is
likely to occur in the absence of regulatory assistance.
FDICIA
In December 1991, FDICIA was enacted, substantially revising the bank regulatory
and funding provisions of the Federal Deposit Insurance Act and making revisions
to several other federal banking statutes. Among other things, FDICIA requires
the federal banking agencies to take "prompt corrective action" in respect of
depository institutions that do not meet minimum capital requirements. FDICIA
establishes five capital tiers: "well capitalized," "adequately capitalized,"
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"undercapitalized," "significantly undercapitalized" and "critically
undercapitalized." A depository institution's capital tier will depend upon
where its capital levels are in relation to various relevant capital measures,
which will include a risk-based capital measure and a leverage ratio capital
measure, and certain other factors.
Regulations establishing the specific capital tiers provide that, for an
institution to be well capitalized it must have a total risk-based capital ratio
of at least 10 percent, a Tier 1 risk-based capital ratio of at least 6 percent,
a Tier 1 leverage ratio of at least 5 percent, and not be subject to any
specific capital order or directive. For an institution to be adequately
capitalized it must have a total risk-based capital ratio of at least 8 percent,
a Tier 1 risk-based capital ratio of at least 4 percent, and a Tier 1 leverage
ratio of at least 4 percent (and in some cases 3 percent). Under these
regulations, the banking subsidiaries of Comerica would be considered to be well
capitalized as of December 31, 1996.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to
limitations on growth and certain activities and are required to submit an
acceptable capital restoration plan. The federal banking agencies may not accept
a capital plan without determining, among other things, that the plan is based
on realistic assumptions and is likely to succeed in restoring the depository
institution's capital. In addition, for a capital restoration plan to be
acceptable, the depository institution's parent holding company must guarantee
for a specific time period that the institution will comply with such capital
restoration plan. The aggregate liability of the parent holding company under
the guaranty is limited to the lesser of (i) an amount equal to 5 percent of the
depository institution's total assets at the time it became undercapitalized,
and (ii) the amount that is necessary (or would have been necessary) to bring
the institution into compliance with all capital standards applicable with
respect to such institution as of the time it fails to comply with the plan. If
a depository institution fails to submit or implement an acceptable plan, it is
treated as if it is significantly undercapitalized.
Significantly undercapitalized depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets, restrictions on interest rates on deposits and on asset growth, orders
to improve management cessation of receipt of deposits from correspondent banks.
Critically undercapitalized institutions are subject to the appointment of a
receiver or conservator.
Under FDICIA, the FDIC is permitted to provide financial assistance to an
insured bank before appointment of a conservator or receiver only if (i) such
assistance would be the least costly method of meeting the FDIC's insurance
obligations, (ii) grounds for appointment of a conservator
9
or a receiver exist or are likely to exist in the future, (iii) it is unlikely
that the bank can meet all capital standards without assistance and (iv) the
bank's management has been competent, has complied with applicable laws,
regulations, rules and supervisory directives and has not engaged in any insider
dealing, speculative practice or other abusive activity.
FDICIA directs that each federal banking agency prescribe standards for
depository institutions and depository institution holding companies relating to
internal controls, information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth,
compensation, asset quality, earnings, stock valuation and other standards as
they deem appropriate. Such standards were issued jointly by the agencies on
August 9, 1995, in guideline form.
FDICIA also contains a variety of other provisions that may affect the
operations of depository institutions including new reporting requirements,
regulatory standards for real estate lending, "truth in savings" provisions, the
requirement that a depository institution give 90 days prior notice to customers
and regulatory authorities before closing any branch and a prohibition on the
acceptance or renewal of brokered deposits by depository institutions that are
not well capitalized or are adequately capitalized and have not received a
waiver from the FDIC. Under regulations relating to the brokered deposit
prohibition, Comerica's subsidiary banks are all well-capitalized and may accept
brokered deposits without restriction.
FDIC INSURANCE ASSESSMENTS
Comerica's subsidiary banks are subject to FDIC deposit insurance assessments.
On January 1, 1994, a permanent risk-based deposit premium assessment system
became effective under which each depository institution is placed in one of
nine assessment categories based on certain capital and supervisory measures.
The deposit-insurance assessment schedule published by the FDIC for the
assessment period commencing January 1, 1997 maintained the nine categories but
provided for major reductions in the assessment rates for institutions insured
by BIF. These reductions occurred because the balance in BIF has reached or
surpassed the "designated reserve ratio" set by law for the balance in the fund
to maintain with respect to BIF-insured deposits. These reduced assessment
levels have been continued by the FDIC. For similar reasons, the assessment
rates for institutions insured by SAIF also have been reduced. As a result of
these reduced rates, highly-rated banks (including Comerica's banking
subsidiaries) have and will experience significant reductions in deposit
insurance costs.
The Corporation's FDIC expenses decreased significantly by $16 million, or 66
percent, in 1996, primarily due to the FDIC adopting a new assessment rate
schedule for BIF members in the third quarter of 1995. The new rate schedule,
which continues to determine assessments based on a
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bank's risk-based capital levels, virtually eliminated each subsidiary bank's
BIF annual deposit insurance premium as of January 1, 1996. The Corporation's
SAIF-insured deposits continued to be assessed at a rate of 23 cents per $100 of
insured deposits through September 30, 1996. This BIF reduction translated into
a $21 million savings in FDIC insurance expense for the Corporation in 1996.
Offsetting this savings was a one-time charge of $5 million representing the
Corporation's portion of an assessment, levied on banks with SAIF-insured
deposits in order to recapitalize the SAIF. Beginning in 1997, deposit
insurance expense will approximate $3 million based on current deposit levels
and current deposit assessment rates.
COMPETITION
Banking is a highly competitive business. The Michigan banking subsidiary of the
Corporation competes primarily with Detroit and outstate Michigan banks for
loans, deposits and trust accounts. Through its offices in Arizona, California,
Colorado, Florida, Indiana, Illinois, Ohio and Texas, Comerica competes with
other financial institutions for various types of loans. Through its Florida
subsidiary, Comerica competes with many companies, including financial
institutions, for trust business.
At year-end 1996, Comerica Incorporated was the largest bank holding company
headquartered in Michigan in terms of total assets and deposits. Based on the
Interstate Act as described above, the Corporation believes that the level of
competition in all geographic markets will increase in the future. Comerica's
banking subsidiaries also face competition from other financial intermediaries,
including savings and loan associations, consumer finance companies, leasing
companies and credit unions.
EMPLOYEES
As of December 31, 1996, Comerica and its subsidiaries had 9,868 full-time and
2,101 part-time employees.
ITEM 2. PROPERTIES
The executive offices of the Corporation are located in the Comerica Tower at
Detroit Center, 500 Woodward Ave., Detroit, Michigan 48226. Comerica and its
subsidiaries occupy 15 floors of the building, which is leased through Comerica
Bank from an unaffiliated third party. This lease extends through January 2007.
As of December 31, 1996, Comerica Bank operated 271 offices within the State of
Michigan, of which 208 were owned and 63 were leased. Four other banking
affiliates operate 92 offices in California, Florida, and Texas. The affiliates
own 37 of their
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offices and lease 55 offices. One banking affiliate also operates from leased
space in Toledo, Ohio.
The Corporation owns an operations and check processing center in Livonia,
Michigan, a ten-story building in the central business district of Detroit that
houses certain departments of the Corporation and Comerica Bank and a building
in Oakland county used mainly for consumer lending functions.
In 1983, Comerica entered into a sale/leaseback agreement with an unaffiliated
party covering an operations center which was built in Auburn Hills, Michigan,
and now is occupied by various departments of the Corporation and Comerica Bank.
ITEM 3. LEGAL PROCEEDINGS
The response to this item is included under the caption "Other Matters" on page
30 of the Corporation's Annual Report to Shareholders for the year ended
December 31, 1996, which is hereby incorporated by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to shareholders in the fourth quarter of 1996.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The common stock of Comerica Incorporated is traded on the New York Stock
Exchange (NYSE Trading Symbol: CMA). At March 11, 1997, there were approximately
17,973 holders of the Corporation's common stock.
Quarterly cash dividends were declared during 1996 and 1995 totaling $1.52 and
$1.37 per common share per year, respectively. The following table sets forth,
for the periods indicated, the high and low sale prices per share of the
Corporation's common stock as reported on the NYSE Composite Transactions Tape
for all quarters of 1996 and 1995.
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Quarter High Low Dividend Dividend*
Per Share Yield
- -------------------------------------------------------------------------------
1996
Fourth $59.375 $50.250 $ .39 2.9%
Third 54.000 40.125 $ .39 3.3
Second 44.875 40.250 $ .39 3.7
First 41.875 36.250 $ .35 3.6
1995
Fourth $42.750 $33.625 $ .35 3.7%
Third 36.750 31.875 $ .35 4.1
Second 33.125 27.250 $ .35 4.6
First 28.375 24.125 $ .32 4.9
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* Dividend yield is calculated by annualizing the quarterly dividend per
share and dividing by an average of the high and low price in the quarter.
- -------------------------------------------------------------------------------
ITEM 6. SELECTED FINANCIAL DATA
The response to this item is included on page 13 of the Corporation's Annual
Report to Shareholders for the year ended December 31, 1996, which is hereby
incorporated by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The response to this item is included on pages 14 through 30 of the
Corporation's Annual Report to Shareholders for the year ended December 31,
1996, which are hereby incorporated by reference.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to this item is included on pages 15, 16, 18, 22, 23, 25, and 31
through 57 of the Corporation's Annual Report to Shareholders for the year ended
December 31, 1996, which are hereby incorporated by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The response to this item will be included under the captions "Election of
Directors" and "Executive Officers of the Corporation" of the Corporation's
definitive Proxy Statement relating to the Annual Meeting of Shareholders to be
held on May 16, 1997, which are hereby incorporated by reference.
ITEM 11. EXECUTIVE COMPENSATION
The response to this item will be included under the caption "Compensation of
Executive Officers" of the Corporation's definitive Proxy Statement relating to
the Annual Meeting of Shareholders to be held on May 16, 1997, which is hereby
incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The response to this item will be included under the captions "Security
Ownership of Certain Beneficial Owners" and "Security Ownership of Management"
of the Corporation's definitive Proxy Statement relating to the Annual Meeting
of Shareholders to be held on May 16, 1997, which is hereby incorporated by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The response to this item will be included under the captions "Transactions of
Directors and Executive Officers with the Corporation" and "Certain Beneficial
Owners" and "Election of Directors" of the Corporation's definitive Proxy
Statement relating to the Annual Meeting of Shareholders to be held on May 16,
1997, which are hereby incorporated by reference.
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Comerica Incorporated and Subsidiaries
FORM 10-K CROSS-REFERENCE INDEX
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Certain information required to be included in this Form 10-K is included in the
1996 Annual Report to Shareholders or in the 1997 Proxy Statement used in
connection with the 1997 annual meeting of shareholders to be held on May 16,
1997.
The following cross-reference index shows the page location in the 1996 Annual
Report or the section of the 1997 Proxy Statement of only that information which
is to be incorporated by reference into this Form 10-K.
All other sections of the 1996 Annual Report or the 1997 Proxy Statement are not
required in this Form 10-K and should not be considered a part thereof.
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Page Number of 1996
Annual Report or Section
of 1997 Proxy Statement
PART I
ITEM I. Business...............................................Included herein
ITEM 2. Properties.............................................Included herein
ITEM 3. Legal Proceedings...................................................30
ITEM 4. Submission of Matters to a Vote of Security Holders -- no matters were
voted upon by security holders in the fourth quarter of 1996.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Security Holder
Matters...............................................Included herein
ITEM 6. Selected Financial Data.............................................13
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations..............................................14
ITEM 8. Financial Statements and Supplementary Data:
Comerica Incorporated and Subsidiaries
Consolidated Balance Sheets....................................31
Consolidated Statements of Income..............................32
Consolidated Statements of Changes in Shareholders' Equity.....33
Consolidated Statements of Cash Flows..........................34
Notes to Consolidated Financial Statements..........................35
Report of Independent Auditors......................................54
Statistical Disclosure by Bank Holding Companies:
Analysis of Net Interest Income - FTE..........................15
Rate-Volume Analysis - FTE.....................................16
Analysis of Investment Securities Portfolio - FTE..............25
Analysis of Investment Securities and Loans....................22
Allocation of the Allowance for Loan Losses....................23
Loan Maturities and Interest Rate Sensitivity..................23
Summary of Nonperforming Assets and Past Due Loans.............25
Cross-Border Outstandings......................................22
Analysis of the Allowance for Loan Losses......................18
Maturity Distribution of Domestic Certificates of Deposit of
$100,000 and Over.............................................23
Financial Ratios and Other Data................................55
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure - None.
PART III
ITEM 10. Directors and Executive Officers
of the Registrant...............................Election of Directors;
Executive Officers
ITEM 11. Executive Compensation..................................Compensation of
Executive Officers
15
ITEM 12. Security Ownership of
Certain Beneficial Owners and Management.............Security Ownership
of Certain Owners and Security
Ownership of Management
ITEM 13. Certain Relationships and Related Transactions..........Transactions of
Directors and Executive
Officers with the Corporation;
Election of Directors
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
1. Financial Statements: The financial statements that are
filed as part of this report are listed under Item 8 in the
Form 10-K Cross-reference Index on page 15.
2. All of the schedules for which provision is made in the
applicable accounting regulations of the Securities and
Exchange Commission are either not required under the
related instruction, the required information is contained
elsewhere in the Form 10-K, or the schedules are
inapplicable and therefore have been omitted.
Exhibits:
Exhibit Document Number*
3.1 Restated Certificate of Incorporation of Comerica
Incorporated, as amended
3.2 Amended and restated bylaws of Comerica Incorporated
4 Rights Agreement between Comerica Incorporated and
Comerica Bank**
10.1 Comerica Incorporated 1997 Long-Term Incentive Plan
10.2 Comerica Incorporated Management Incentive Plan, 1997
10.3 Comerica Incorporated Director Fee Deferral Plan
10.4 Benefit Equalization Plan for Employees of Comerica
Incorporated
10.5 Comerica Incorporated's Directors Retirement Plan***
16
10.6 Manufacturers National Corporation's 1987 and 1989
Stock Option Plans for Key Employees***
10.7 Manufacturers National Corporation's Executive
Incentive Plan***
10.8 Manufacturers National Corporation's Key Employee
Retention Plan***
10.10 Form of Director Indemnification Agreement between
Comerica Incorporated and its directors
10.11 Employment Continuation Agreement with Eugene A.
Miller***
10.12 Severance Agreement with Michael T. Monahan *****
10.13 Management Continuation Agreement with Ralph W. Babb
Jr.*****
10.14 Employment Agreement with Ralph W. Babb Jr.*****
10.15 Comerica Incorporated Deferred Compensation Plan, 1997
Amendment and Restatement
10.16 Form of Comerica Incorporated Executive Officer
Continuity Agreement between registrant and listed
officers, January 1, 1997
10.17 Form of Comerica Incorporated Senior Officer Severance
Plan between registrant and listed officers, January 1,
1997
11 Statement regarding Computation of Per Share
Earnings****
13 Required portions of Registrant's 1996 Annual Report to
Shareholders
21 Subsidiaries of the Corporation
23 Consent of Ernst & Young LLP
(b) No reports on Form 8-K were filed by the Corporation during the
last quarter of 1996.
* This is the original copy of the 1996 Form 10-K and includes
all exhibits.
** A report was filed on Form 8-K dated June 18, 1996 regarding
the Registrant's Rights Agreement with Comerica Bank.
17
*** Incorporated by reference from Registrant's Annual Report on
Form 10-K for the year ended December 31,1992 -- Commission
File Number 0-7269.
**** Incorporated by reference from note 11 on page 41 of
Registrant's Annual Report to Shareholders attached hereto
as Exhibit 13.
***** Incorporated by reference from Registrant's Annual Report
on Form 10-K for the year ended December 31,
1995--Commission File Number 1-10706.
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized in the City of Detroit,
State of Michigan on the 21st day of March, 1997.
COMERICA INCORPORATED
Eugene A. Miller
Chairman and Chief Executive Officer
Ralph W. Babb Jr.
Executive Vice President and Chief Financial Officer
Arthur W. Hermann
Senior Vice President and Controller
(Chief Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons in the capacities indicated on March
21, 1997.
BY DIRECTORS
E. Paul Casey
James F. Cordes
J. Philip DiNapoli
Max M. Fisher
18
John D. Lewis
Patricia Shontz Longe, Ph.D.
Wayne B. Lyon
Gerald V. MacDonald
Eugene A. Miller
Michael T. Monahan
Alfred A. Piergallini
Howard F. Sims
Martin D. Walker
19