1
EXHIBIT 99.1
COMERICA REPORTS FIRST QUARTER 2001 EARNINGS
- - $0.50 EPS V. $1.08 EPS 1-Q-00
- - $1.21 EPS BEFORE ONE TIME/SPECIAL CHARGES
- IMPERIAL RESTRUCTURING CHARGE OF $0.52 PER SHARE; INTEGRATION ON SCHEDULE
- ONE-TIME, $0.19 PER SHARE U.K. SUBSIDIARY CHARGE
DETROIT/April 17, 2001 -- Comerica Incorporated (NYSE: CMA) today reported first
quarter 2001 earnings per share of $0.50, compared with $1.08 for the 2000 first
quarter, a decrease of 54 percent. Net income was $94 million, compared with
$197 million for 2000. The company's return on common equity was 8.11 percent
and its return on assets was 0.76 percent, compared with 20.66 percent and 1.72
percent, respectively, for the 2000 first quarter. All prior period financial
information has been restated to reflect the acquisition of Imperial Bancorp,
which was completed during the first quarter 2001 and accounted for as a
pooling-of-interests.
Excluding the previously announced $95 million after-tax restructuring charge
for the Imperial merger and the effect of a one-time $34 million after-tax
charge related to long-term incentive plans at an unconsolidated subsidiary of
Munder Capital Management (the company's investment management subsidiary), net
income for the first quarter of 2001 was $223 million, or $1.21 per share. On
this basis, Comerica's return on common equity and return on assets were 19.85
percent and 1.81 percent, respectively.
"Comerica delivered solid core operating results during the first quarter of
2001, generating continued loan and deposit growth, while maintaining expense
discipline and satisfactory credit quality trends. The integration of our recent
acquisition of the $7 billion Imperial Bancorp continues on schedule and
according to plan," said Eugene A. Miller, chairman, president, and chief
executive officer. "A slowing economy and volatility in the securities markets
can be expected to slow the pace of earnings growth across the industry;
nonetheless, we believe Comerica is well positioned to sustain its evolution
into one of the nation's leading middle-market focused financial services
providers.
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2
COMERICA REPORTS FIRST QUARTER 2001 EARNINGS -- 2
"Given demographic and wealth management trends, the asset and fund management
business remains an important component of our long-term strategy to enhance our
sources of recurring, noninterest income. However, we are disappointed to report
both a special one-time charge related to incentive compensation plans at a
foreign subsidiary of Munder, and an additional deferred distribution costs
impairment charge of $17 million after-tax related to decreases in the net asset
value of technology mutual funds at Munder," Miller added.
Net interest income for the first quarter of 2001 totaled $512 million, an
increase of $28 million, or 6 percent, from the same period last year. This
increase was primarily due to an increase in average business loans of $4
billion, or 11 percent, over last year's first quarter. Adjusting for the
divestiture of revolving check credit and bankcard loans in the first quarter of
2000, net interest income increased $37 million, or 8 percent, over the same
period last year.
The net interest margin was 4.55 percent for the first quarter of 2001, compared
with 4.60 percent for the comparable quarter of 2000. Excluding the effect of
the divestiture, the net interest margin decreased 2 basis points from the same
period in 2000, primarily as a result of the changing mix of funding required to
support the company's continued strong pace of commercial lending.
Noninterest income was $170 million for the first quarter of 2001, compared with
$255 million for the same quarter last year. Noninterest income in the first
quarter of 2001 was reduced by the $26 million impairment charge ($17 million
after-tax) and a one-time $53 million charge ($34 million after-tax) related to
an unconsolidated subsidiary which is discussed more fully below. Noninterest
income benefited from securities gains of $24 million, and $11 million of net
gains resulting from the purchase and subsequent sale, all within the first
quarter, of interest rate derivative contracts which failed to meet Comerica's
stringent risk-reduction criteria.
Noninterest income in the first quarter of 2000 included a $30 million gain
associated with the sale of revolving check credit and bankcard loans mentioned
above. Excluding the effect of securities gains, warrant income and large,
nonrecurring items and the impact of last year's revolving check credit and
bankcard loan sale, noninterest income increased 3 percent in the first quarter
2001 from the first quarter of 2000.
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3
COMERICA REPORTS FIRST QUARTER 2001 EARNINGS -- 3
The $26 million pre-tax deferred distribution costs impairment charge at Munder
resulted from the company's reassessment of its ability to recover the
unamortized cost of the commissions to brokers for selling certain shares,
principally shares in Munder's NetNet, International NetNet and Future
Technology funds. Net asset values in these technology funds suffered as market
conditions weakened significantly following the peak in the first half of 2000.
After a fourth quarter 2000 impairment charge of $7 million, this sector of the
equity markets declined another 26 percent in the first quarter 2001. This
prompted Comerica's current revaluation of expected future cash flows from the
funds, which are based on a percentage of assets under management and early
redemption fees. Net remaining deferred distribution costs at March 31, 2001,
were $54 million. Excluding the impairment charges, investment advisory revenues
totaled $17 million in the first quarter of 2001, a decrease of $8 million from
the fourth quarter 2000 and $17 million from the first quarter 2000. The
decrease is primarily attributable to the decline in the market values of
technology-related stocks from their record highs during the first quarter of
last year.
At March 31, 2001, assets under management at Munder were $44 billion, including
$2.9 billion in the NetNet, International NetNet and Future Tech funds. Munder
manages and offers 15 wrap-fee products, 24 equity funds, 8 fixed income funds,
6 money market and 2 balanced funds covering a wide array of investment options,
including its original menu of "Growth at a Reasonable Price" or "GARP"
offerings.
The $53 million pre-tax charge is related to long-term incentive plans at a
United Kingdom subsidiary, Framlington Holdings Limited, of which Munder is a
minority owner. In May 2000, the announcement that the majority owner was being
acquired triggered a change-in-control provision which fully vested all options
and restricted shares. In March 2001, all outstanding options held by employees
were exercised and their shares were sold to Framlington, requiring U.S.
accounting recognition of the expense. The pre-tax charge, included in equity in
earnings of unconsolidated subsidiaries, reflects Munder's portion of the
resulting expense.
Noninterest expenses, which included $94 million of the previously announced
merger-related restructuring charge, were $450 million in the first quarter of
2001, compared with $367 million in 2000, an increase of 23 percent. Excluding
the restructuring charge, noninterest expenses decreased $11 million, or 3
percent, compared with the same quarter last year, primarily due to a decline in
revenue-related incentives.
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4
COMERICA REPORTS FIRST QUARTER 2001 EARNINGS -- 4
Income tax expense was reduced $7 million for a tax benefit related to the
Imperial Bancorp acquisition that was immediately recognizable, but only after
Imperial became part of Comerica.
The provision for credit losses was $72 million in the first quarter of 2001, an
increase of $5 million compared with the first quarter of 2000. Included in the
2001 provision for credit losses is a merger-related charge of $25 million to
conform the credit policies of Imperial with Comerica. Net charge-offs for the
quarter were $35 million or 0.34 percent of average total loans, compared with
$34 million or 0.36 percent in the first quarter of 2000. Nonperforming assets
were $476 million or 1.16 percent of loans and other real estate at March 31,
2001, compared with $339 million or 0.84 percent at December 31, 2000, and $230
million or 0.61 percent at March 31, 2000. The increase in nonperforming assets
from year-end includes the addition of one $70 million loan to a commercial
finance company. The allowance for credit losses as a percent of loans was 1.57
percent at March 31, 2001, a 3 basis point increase from 1.54 percent at March
31, 2000.
The level of nonperforming assets currently is expected to trend toward
historical averages, in a range of 115 to 130 basis points of total loans and
other real estate for the year 2001.
Outlook for 2001: Earnings for the full year 2001, excluding the restructuring
charge for the Imperial merger, of which $0.52 cents per share was included in
the current quarter, and the effect of a one-time $0.19 cents per share charge
related to long-term incentive plans at an unconsolidated subsidiary of Munder,
are expected to range between $4.75 and $4.95 per share, based on an assessment
of current economic conditions, the level of equity markets and interest rates,
progress toward business objectives and other factors.
Assets totaled $50 billion at March 31, 2001, and $47 billion at March 31, 2000,
while common shareholders' equity was $4.4 billion at March 31, 2001, compared
to $3.8 billion one year earlier. Shares of common stock outstanding were 178
million at March 31, 2001 and 177 million at March 31, 2000. Total loans were
$41 billion at March 31, 2001, compared to $38 billion a year ago. Total
deposits were $37 billion at March 31, 2001, compared to $29 billion at March
31, 2000.
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5
COMERICA REPORTS FIRST QUARTER 2001 EARNINGS -- 5
A conference call reviewing Comerica's first quarter 2001 financial results will
be held at 8:30 a.m. ET today, April 17, 2001. Interested parties may access the
conference call by calling (706) 679-5261 (event ID No. 92476). The call is also
accessible through the Investor Relations link on Comerica's home page at
www.comerica.com. A replay of the conference call will be available
approximately two hours following the call through April 24, 2001.
The conference call replay can be accessed by calling (800) 642-1687 or (706)
645-9291 (event ID No. 92476). The replay can also be accessed through the
Investor Relations link on Comerica's home page at www.comerica.com.
SAFE HARBOR STATEMENT
Matters discussed in this news release contain certain forward-looking
statements that are based on management's beliefs and assumptions based on
information currently known to Comerica's management. Forward-looking statements
may include descriptions of plans or objectives of Comerica's management for
future or past operations, products or services, and forecasts of the Company's
revenues, earnings or other measures of economic performance including
statements of profitability of business segments and subsidiaries, estimates of
credit quality trends and current integration. Such statements reflect the view
of Comerica's management, as of the date of this conference call, with respect
to future events and are subject to risks and uncertainties, such as changes in
Comerica's plans, objectives, expectations and intentions and do not purport to
speak as of any other date. Should one or more of these risks materialize or
should underlying beliefs or assumptions prove incorrect, the Company's actual
results could differ materially from those discussed in this conference call.
Factors that could cause or contribute to such differences are changes in
interest rates, changes in the industries in which Comerica has a concentration
of loans, changes in the level of fee revenues, changes in the accounting
treatment of any particular item, the entry of new competitors into the banking
industry as a result of the enactment of the Gramm-Leach-Bliley Act of 1999,
changes in general economic conditions and related credit and market conditions,
difficulties in integrating Imperial Bancorp or retaining key personnel and
other factors discussed in Comerica's filings with the Securities and Exchange
Commission.
Forward-looking statements speak only as of the date they are made. Comerica
does not undertake to update forward-looking statements to reflect circumstances
or events that occur after the date the forward-looking statements are made.
Without limiting the foregoing, Comerica undertakes no obligation to update
earnings guidance including any of the factors that influence earnings.
Comerica Incorporated is a multi-state financial services provider headquartered
in Detroit, with bank subsidiaries in Michigan, California and Texas, banking
operations in Florida, and businesses in several other states. Comerica has an
investment services affiliate, Munder Capital Management, and operates banking
subsidiaries in Canada and Mexico.
###
MEDIA CONTACT: INVESTOR CONTACT:
- ------------- ----------------
Sharon R. McMurray Judith S. Love
(313) 222-4881 (313) 222-2840
6
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
Three Months Ended
(in thousands, except per share data, March 31, December 31, March 31,
average balances and ratios) 2001 2000 2000
----------- ------------ -----------
PER SHARE AND COMMON STOCK DATA
Diluted net income $0.50 $0.94 $1.08
Cash dividends declared 0.44 0.40 0.40
Common shareholders' equity (at period end) 24.80 23.98 21.51
Average diluted shares 180,248 179,453 179,232
KEY RATIOS
Return on average common equity 8.11% 16.05% 20.66%
Return on average assets 0.76% 1.43% 1.72%
Average common equity as a percentage of
average assets 8.93% 8.70% 8.17%
Core capital ratio (March 2001 estimated) 7.36% 7.35% 7.29%
Total capital ratio (March 2001 estimated) 11.13% 11.11% 11.00%
Leverage ratio (March 2001 estimated) 8.77% 8.74% 8.38%
AVERAGE BALANCES (in millions)
Commercial loans (including lease financing) $27,764 $26,997 $25,096
International loans 2,603 2,547 2,598
Real estate construction loans 2,955 2,826 2,282
Commercial mortgage loans 5,500 5,275 5,000
Residential mortgage loans 800 810 859
Consumer loans 1,478 1,466 1,408
----------- ------------ -----------
Total loans $41,100 $39,921 $37,243
Earning assets 45,615 44,586 42,312
Total assets 49,331 48,221 45,697
Interest-bearing deposits 24,167 22,727 20,215
Noninterest-bearing deposits 9,370 9,357 8,612
Total interest-bearing liabilities 34,469 33,650 32,425
Common shareholders' equity 4,407 4,195 3,733
NET INTEREST INCOME
Net interest income (fully taxable equivalent
basis) $513,340 $520,040 $484,554
Fully taxable equivalent adjustment 1,048 841 959
Net interest margin 4.55% 4.64% 4.60%
CREDIT QUALITY
Nonaccrual loans $470,478 $331,361 $209,391
Reduced-rate loans 275 2,306 8,888
Other real estate 5,577 5,577 11,357
Total nonperforming assets 476,330 339,244 229,636
Loans 90 days past due 55,260 36,176 40,894
Gross charge-offs 45,327 100,855 37,121
Recoveries 9,916 7,293 3,569
Net charge-offs 35,411 93,562 33,552
Allowance for credit losses as a percentage
of total loans 1.57% 1.51% 1.54%
Nonperforming assets as a percentage of
total loans and other real estate 1.16% 0.84% 0.61%
Net loans charged off as a percentage of
average total loans 0.34% 0.94% 0.36%
Allowance for credit losses as a percentage
of total nonperforming assets 135% 179% 253%
ADDITIONAL DATA
Goodwill $356,925 $366,550 $388,232
Core deposit intangible 7,176 7,883 11,481
Other intangibles 1,215 3,472 4,047
Loan servicing rights 8,470 6,657 6,396
Deferred mutual fund distribution costs 54,045 85,849 87,199
Amortization of intangibles 8,685 9,549 8,731
7
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
March 31, December 31, March 31,
(in thousands, except share data) 2001 2000 2000
----------- ----------- -----------
ASSETS
Cash and due from banks $ 2,008,803 $ 1,930,682 $ 1,855,110
Short-term investments 1,990,563 1,730,158 1,912,380
Investment securities available
for sale 3,207,455 3,890,725 3,583,006
Commercial loans 26,373,429 26,009,336 24,519,861
International loans 2,653,902 2,571,156 2,565,966
Real estate construction loans 2,973,895 2,915,168 2,422,371
Commercial mortgage loans 5,570,134 5,360,601 5,078,245
Residential mortgage loans 793,075 807,064 849,912
Consumer loans 1,472,015 1,477,135 1,407,541
Lease financing 1,088,908 1,029,164 815,293
----------- ----------- -----------
Total loans 40,925,358 40,169,624 37,659,189
Less allowance for credit losses (644,556) (608,110) (581,482)
----------- ----------- -----------
Net loans 40,280,802 39,561,514 37,077,707
Premises and equipment 360,145 364,246 364,104
Customers' liability on acceptances
outstanding 26,917 26,668 17,179
Accrued income and other assets 2,395,541 2,030,063 1,852,333
----------- ----------- -----------
TOTAL ASSETS $50,270,226 $49,534,056 $46,661,819
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $11,530,699 $10,188,475 $ 9,538,966
Interest-bearing deposits 25,255,219 23,665,808 19,856,778
----------- ----------- -----------
Total deposits 36,785,918 33,854,283 29,395,744
Short-term borrowings 679,802 2,093,381 4,442,670
Acceptances outstanding 26,917 26,668 17,179
Accrued expenses and other
liabilities 819,774 800,386 675,561
Medium- and long-term debt 7,289,301 8,259,179 8,073,259
----------- ----------- -----------
Total liabilities 45,601,712 45,033,897 42,604,413
Nonredeemable preferred stock
- $50 stated value:
Authorized - 5,000,000 shares
Issued - 5,000,000 shares at
3/31/01, 12/31/00 and 3/31/00 250,000 250,000 250,000
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 178,337,648 shares at
3/31/01, 177,703,678 shares at
12/31/00 and 177,901,802
shares at 3/31/00 891,688 888,519 889,509
Capital surplus 326,134 301,414 313,493
Unearned employee stock ownership
plan - 176,462 shares at 3/31/01
and 12/31/00 and 64,993 shares
at 3/31/00 (6,750) (6,750) (3,000)
Accumulated other comprehensive income 127,490 12,097 (37,345)
Retained earnings 3,086,915 3,085,784 2,714,213
Deferred compensation (6,963) (14,494) (22,321)
Less cost of common stock in
treasury - 289,397 shares at
12/31/00 and 826,342 shares at
3/31/00 - (16,411) (47,143)
----------- ----------- -----------
Total shareholders' equity 4,668,514 4,500,159 4,057,406
----------- ----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $50,270,226 $49,534,056 $46,661,819
=========== =========== ===========
8
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Three Months Ended
---------------------------
March 31, March 31,
(in thousands, except per share data) 2001 2000
----------- -----------
INTEREST INCOME
Interest and fees on loans $ 865,333 $ 778,173
Interest on investment securities 64,625 61,447
Interest on short-term investments 10,502 31,799
----------- -----------
Total interest income 940,460 871,419
INTEREST EXPENSE
Interest on deposits 271,927 202,896
Interest on short-term borrowings 39,392 53,940
Interest on medium- and long-term debt 116,849 130,988
----------- -----------
Total interest expense 428,168 387,824
----------- -----------
Net interest income 512,292 483,595
Provision for credit losses 72,000 66,894
----------- -----------
Net interest income after provision
for credit losses 440,292 416,701
NONINTEREST INCOME
Fiduciary income 45,426 45,199
Investment advisory revenue, net (9,489) 33,829
Service charges on deposit accounts 49,914 45,752
Commercial lending fees 13,854 12,381
Letter of credit fees 12,776 12,857
Warrant income 3,122 7,374
Securities gains 23,744 5,437
Net gain on sales of businesses - 30,484
Equity in earnings of unconsolidated subsidiaries (53,300) 2,927
Other noninterest income 83,935 58,580
----------- -----------
Total noninterest income 169,982 254,820
NONINTEREST EXPENSES
Salaries and employee benefits 206,776 211,827
Net occupancy expense 28,316 27,798
Equipment expense 19,397 18,946
Outside processing fee expense 15,827 14,487
Restructuring charge 94,304 -
Customer services 9,258 8,176
Other noninterest expenses 76,099 85,561
----------- -----------
Total noninterest expenses 449,977 366,795
----------- -----------
Income before income taxes 160,297 304,726
Provision for income taxes 66,705 107,695
----------- -----------
NET INCOME $ 93,592 $ 197,031
=========== ===========
Net income applicable to common stock $ 89,317 $ 192,756
=========== ===========
Basic net income per common share $ 0.50 $ 1.09
Diluted net income per common share $ 0.50 $ 1.08
Cash dividends declared on common stock $ 78,389 $ 62,519
Dividends per common share $ 0.44 $ 0.40
9
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
First Fourth Third
Quarter Quarter Quarter
(in thousands, except per share data) 2001 2000 2000
-------- -------- --------
INTEREST INCOME
Interest and fees on loans $865,333 $898,831 $868,351
Interest on investment securities 64,625 69,688 66,096
Interest on short-term investments 10,502 16,712 14,527
-------- -------- --------
Total interest income 940,460 985,231 948,974
INTEREST EXPENSE
Interest on deposits 271,927 277,775 253,737
Interest on short-term borrowings 39,392 48,457 46,936
Interest on medium- and long-term debt 116,849 139,800 144,619
-------- -------- --------
Total interest expense 428,168 466,032 445,292
-------- -------- --------
Net interest income 512,292 519,199 503,682
Provision for credit losses 72,000 88,006 43,300
-------- -------- --------
Net interest income after
provision for credit losses 440,292 431,193 460,382
NONINTEREST INCOME
Fiduciary income 45,426 46,297 44,643
Investment advisory revenue, net (9,489) 18,431 34,097
Service charges on deposit accounts 49,914 47,848 47,657
Commercial lending fees 13,854 19,288 16,435
Letter of credit fees 12,776 12,491 12,777
Warrant income 3,122 324 16,713
Securities gains 23,744 2,285 1,316
Net gain on sales of businesses - 13,184 4,000
Equity in earnings of unconsolidated
subsidiaries (53,300) 717 5,358
Other noninterest income 83,935 55,145 61,005
-------- -------- --------
Total noninterest income 169,982 216,010 244,001
NONINTEREST EXPENSES
Salaries and employee benefits 206,776 215,328 215,151
Net occupancy expense 28,316 28,180 27,082
Equipment expense 19,397 19,595 19,160
Outside processing fee expense 15,827 14,363 15,465
Restructuring charge 94,304 - -
Customer services 9,258 10,642 9,240
Other noninterest expenses 76,099 87,974 89,306
-------- -------- --------
Total noninterest expenses 449,977 376,082 375,404
-------- -------- --------
Income before income taxes 160,297 271,121 328,979
Provision for income taxes 66,705 98,525 113,921
-------- -------- --------
NET INCOME $ 93,592 $172,596 $215,058
======== ======== ========
Net income applicable to common stock $ 89,317 $168,321 $210,783
======== ======== ========
Basic net income per common share $ 0.50 $ 0.95 $ 1.19
Diluted net income per common share $ 0.50 $ 0.94 $ 1.17
Cash dividends declared on common stock $ 78,389 $ 62,706 $ 62,601
Dividends per common share $ 0.44 $ 0.40 $ 0.40
N/M-Not meaningful
10
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Second First
Quarter Quarter
(in thousands, except per share data) 2000 2000
-------- --------
INTEREST INCOME
Interest and fees on loans $833,916 $778,173
Interest on investment securities 62,102 61,447
Interest on short-term investments 14,711 31,799
-------- --------
Total interest income 910,729 871,419
INTEREST EXPENSE
Interest on deposits 216,873 202,896
Interest on short-term borrowings 66,039 53,940
Interest on medium- and long-term debt 130,124 130,988
-------- --------
Total interest expense 413,036 387,824
-------- --------
Net interest income 497,693 483,595
Provision for credit losses 56,600 66,894
-------- --------
Net interest income after
provision for credit losses 441,093 416,701
NONINTEREST INCOME
Fiduciary income 44,721 45,199
Investment advisory revenue, net 32,154 33,829
Service charges on deposit accounts 47,571 45,752
Commercial lending fees 12,578 12,381
Letter of credit fees 13,835 12,857
Warrant income 5,450 7,374
Securities gains 7,257 5,437
Net gain on sales of businesses 2,631 30,484
Equity in earnings of unconsolidated
subsidiaries 5,019 2,927
Other noninterest income 70,634 58,580
-------- --------
Total noninterest income 241,850 254,820
NONINTEREST EXPENSES
Salaries and employee benefits 209,150 211,827
Net occupancy expense 27,066 27,798
Equipment expense 18,831 18,946
Outside processing fee expense 14,226 14,487
Restructuring charge - -
Customer services 8,824 8,176
Other noninterest expenses 88,145 85,561
-------- --------
Total noninterest expenses 366,242 366,795
-------- --------
Income before income taxes 316,701 304,726
Provision for income taxes 110,651 107,695
-------- --------
NET INCOME $206,050 $197,031
======== ========
Net income applicable to common stock $201,775 $192,756
======== ========
Basic net income per common share $ 1.14 $ 1.09
Diluted net income per common share $ 1.12 $ 1.08
Cash dividends declared on common stock $ 62,451 $ 62,519
Dividends per common share $ 0.40 $ 0.40
N/M-Not meaningful
11
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
First Quarter 2001 Compared To:
Fourth Quarter 2000 First Quarter 2000
(in thousands, except per share data) Amount Percent Amount Percent
-------- ------- -------- -------
INTEREST INCOME
Interest and fees on loans $(33,498) (3.7)% $ 87,160 11.2%
Interest on investment securities (5,063) (7.3) 3,178 5.2
Interest on short-term investments (6,210) (37.2) (21,297) (67.0)
-------- ------- -------- -------
Total interest income (44,771) (4.5) 69,041 7.9
INTEREST EXPENSE
Interest on deposits (5,848) (2.1) 69,031 34.0
Interest on short-term borrowings (9,065) (18.7) (14,548) (27.0)
Interest on medium- and long-term debt (22,951) (16.4) (14,139) (10.8)
-------- ------- -------- -------
Total interest expense (37,864) (8.1) 40,344 10.4
-------- ------- -------- -------
Net interest income (6,907) (1.3) 28,697 5.9
Provision for credit losses (16,006) (18.2) 5,106 7.6
-------- ------- -------- -------
Net interest income after
provision for credit losses 9,099 2.1 23,591 5.7
NONINTEREST INCOME
Fiduciary income (871) (1.9) 227 0.5
Investment advisory revenue, net (27,920) (151.5) (43,318) (128.0)
Service charges on deposit accounts 2,066 4.3 4,162 9.1
Commercial lending fees (5,434) (28.2) 1,473 11.9
Letter of credit fees 285 2.3 (81) (0.6)
Warrant income 2,798 N/M (4,252) (57.7)
Securities gains 21,459 N/M 18,307 N/M
Net gain on sales of businesses (13,184) N/M (30,484) N/M
Equity in earnings of unconsolidated
subsidiaries (54,017) N/M (56,227) N/M
Other noninterest income 28,790 52.2 25,355 43.3
-------- ------- -------- -------
Total noninterest income (46,028) (21.3) (84,838) (33.3)
NONINTEREST EXPENSES
Salaries and employee benefits (8,552) (4.0) (5,051) (2.4)
Net occupancy expense 136 0.5 518 1.9
Equipment expense (198) (1.0) 451 2.4
Outside processing fee expense 1,464 10.2 1,340 9.2
Restructuring charge 94,304 N/M 94,304 N/M
Customer services (1,384) (13.0) 1,082 13.2
Other noninterest expenses (11,875) (13.5) (9,462) (11.1)
-------- ------- -------- -------
Total noninterest expenses 73,895 19.6 83,182 22.7
-------- ------- -------- -------
Income before income taxes (110,824) (40.9) (144,429) (47.4)
Provision for income taxes (31,820) (32.3) (40,990) (38.1)
-------- ------- -------- -------
NET INCOME $(79,004) (45.8)% $(103,439) (52.5)%
======== ======= ======== =======
Net income applicable to common stock $(79,004) (46.9)% $(103,439) (53.7)%
======== ======= ======== =======
Basic net income per common share $ (0.45) (47.4)% $ (0.59) (54.1)%
Diluted net income per common share $ (0.44) (46.8)% $ (0.58) (53.7)%
Cash dividends declared on common stock $ 15,683 25.0 % $ 15,870 25.4 %
Dividends per common share $ 0.04 10.0 % $ 0.04 10.0 %
N/M-Not meaningful
12
QUARTERLY SELECTED ASSET QUALITY DATA
Comerica Incorporated and Subsidiaries
2001 2000
-------- -----------------------
(in thousands) 1st QTR 4th QTR 3rd QTR
-------- -------- --------
ALLOWANCE FOR CREDIT LOSSES
Beginning period balance $608,110 $613,663 $601,117
Loans charged off:
Commercial (38,610) (99,211) (39,836)
International (3,136) - (580)
Real estate construction (1,000) - -
Commercial mortgage (1,526) (9) (64)
Residential mortgage - (84) (2)
Consumer (942) (1,074) (792)
Lease financing (113) (477) (7)
-------- -------- --------
Total loans charged off (45,327) (100,855) (41,281)
Recoveries on loans previously charged off:
Commercial 6,982 4,604 8,797
Real estate construction 116 119 7
Commercial mortgage 136 1,009 18
Residential mortgage 431 - -
Consumer 1,625 1,531 1,687
Lease financing 626 30 36
-------- -------- --------
Total recoveries 9,916 7,293 10,545
-------- -------- --------
Net loans charged off (35,411) (93,562) (30,736)
Provision for credit losses 72,000 88,006 43,300
Foreign currency translation adjustment (143) 3 (18)
-------- -------- --------
Balance at period end $644,556 $608,110 $613,663
======== ======== ========
As a percent of total loans 1.57% 1.51% 1.57%
Net loans charged off to average
total loans 0.34 0.94 0.31
NONPERFORMING ASSETS
Nonaccrual loans:
Commercial $389,206 $244,390 $229,026
International 48,721 57,929 36,770
Real estate construction 6,942 4,542 4,947
Commercial mortgage 18,356 17,398 17,251
Residential mortgage 289 185 522
Consumer 3,147 3,080 3,322
Lease financing 3,817 3,837 4,051
-------- -------- --------
Total nonaccrual loans 470,478 331,361 295,889
Reduced-rate loans 275 2,306 2,271
-------- -------- --------
Total nonperforming loans 470,753 333,667 298,160
Other real estate 5,577 5,577 5,007
-------- -------- --------
Total nonperforming assets $476,330 $339,244 $303,167
======== ======== ========
Nonperforming loans as a percentage
of total loans 1.15% 0.83% 0.76%
Nonperforming assets as a percentage of
total loans and other real estate 1.16 0.84 0.78
Allowance for credit losses as a
percentage of total nonperforming
assets 135 179 202
Loans past due 90 days or more $ 55,260 $ 36,176 $ 53,427
13
QUARTERLY SELECTED ASSET QUALITY DATA
Comerica Incorporated and Subsidiaries
2000
------------------------
(in thousands) 2nd QTR 1st QTR
-------- --------
ALLOWANCE FOR CREDIT LOSSES
Beginning period balance $581,482 $548,147
Loans charged off:
Commercial (37,719) (22,585)
International (2,851) (7,750)
Real estate construction - -
Commercial mortgage (437) -
Residential mortgage (48) -
Consumer (3,135) (6,309)
Lease financing (81) (477)
-------- --------
Total loans charged off (44,271) (37,121)
Recoveries on loans previously charged off:
Commercial 4,897 1,466
Real estate construction 7 13
Commercial mortgage 545 112
Residential mortgage (7) 28
Consumer 1,860 1,872
Lease financing 37 78
-------- --------
Total recoveries 7,339 3,569
-------- --------
Net loans charged off (36,932) (33,552)
Provision for credit losses 56,600 66,894
Foreign currency translation adjustment (33) (7)
-------- --------
Balance at period end $601,117 $581,482
======== ========
As a percent of total loans 1.54% 1.54%
Net loans charged off to average
total loans 0.38 0.36
NONPERFORMING ASSETS
Nonaccrual loans:
Commercial $226,094 $153,807
International 25,242 36,482
Real estate construction 248 249
Commercial mortgage 17,189 8,750
Residential mortgage 505 528
Consumer 3,490 4,935
Lease financing 4,961 4,640
-------- --------
Total nonaccrual loans 277,729 209,391
Reduced-rate loans 7,789 8,888
-------- --------
Total nonperforming loans 285,518 218,279
Other real estate 10,915 11,357
-------- --------
Total nonperforming assets $296,433 $229,636
======== ========
Nonperforming loans as a percentage
of total loans 0.73% 0.58%
Nonperforming assets as a percentage of
total loans and other real estate 0.76 0.61
Allowance for credit losses as a
percentage of total nonperforming
assets 203 253
Loans past due 90 days or more $ 38,769 $ 40,894
14
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Three Months Ended
-----------------------------------------------------------
March 31, 2001 December 31, 2000
---------------------------- ---------------------------
Average Average Average Average
(dollar amounts in millions) Balance Interest Rate Balance Interest Rate
---------------------------- ---------------------------
Commercial loans $26,705 $552.4 8.39% $26,036 $599.3 9.16%
International loans 2,603 58.5 9.12 2,547 61.8 9.65
Real estate construction loans 2,955 69.8 9.58 2,826 73.6 10.35
Commercial mortgage loans 5,500 116.1 8.56 5,275 118.7 8.95
Residential mortgage loans 800 15.5 7.74 810 15.6 7.72
Consumer loans 1,478 33.7 9.21 1,466 34.4 9.37
Lease financing 1,059 17.0 6.42 961 15.4 6.40
Business loan swap
income/(expense) - 3.0 - - (19.5) -
---------------------------- ---------------------------
Total loans 41,100 866.0 8.54 39,921 899.3 8.96
Investment securities available
for sale (1) 3,881 65.0 6.74 3,856 70.0 7.72
Short-term investments 634 10.5 6.74 809 16.8 8.24
---------------------------- ---------------------------
Total earning assets 45,615 941.5 8.36 44,586 986.1 8.80
Cash and due from banks 1,776 1,905
Allowance for credit losses (621) (622)
Other assets 2,561 2,352
------- -------
Total Assets $49,331 $48,221
======= =======
Money market and NOW accounts $ 9,456 74.9 3.21 $ 9,361 82.1 3.49
Savings deposits 1,323 5.0 1.52 1,351 5.9 1.73
Certificates of deposit 12,901 182.1 5.73 11,524 177.6 6.13
Foreign office time deposits 487 9.9 8.22 491 12.2 9.88
---------------------------- ---------------------------
Total interest-bearing
deposits 24,167 271.9 4.56 22,727 277.8 4.86
Short-term borrowings 2,573 39.4 6.21 2,830 48.5 6.81
Medium- and long-term debt 7,729 116.9 6.13 8,093 139.8 6.88
---------------------------- ---------------------------
Total interest-bearing
sources 34,469 428.2 5.04 33,650 466.1 5.51
Noninterest-bearing deposits 9,370 9,357
Other liabilities 835 769
Preferred stock 250 250
Common shareholders' equity 4,407 4,195
------- -------
Total Liabilities and
Shareholders' Equity $49,331 $48,221
======= =======
Net interest income/Rate
spread (FTE) $513.3 3.32 $520.0 3.29
====== ======
FTE adjustment $ 1.0 $ 0.8
====== ======
Impact of net noninterest-bearing
sources of funds 1.23 1.35
---- ----
Net interest margin as a percent of
average earning assets (FTE) 4.55% 4.64%
==== ====
(1) The average rate for investment securities available for sale was computed
using average historical cost.
15
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Three Months Ended
----------------------------
March 31, 2000
----------------------------
Average Average
(dollar amounts in millions) Balance Interest Rate
----------------------------
Commercial loans $24,287 $507.8 8.41%
International loans 2,598 56.2 8.70
Real estate construction loans 2,282 54.8 9.66
Commercial mortgage loans 5,000 106.1 8.53
Residential mortgage loans 859 16.2 7.56
Consumer loans 1,408 31.1 8.86
Lease financing 809 13.1 6.46
Business loan swap
income/(expense) - (6.6) -
----------------------------
Total loans 37,243 778.7 8.41
Investment securities available
for sale (1) 3,550 61.9 6.88
Short-term investments 1,519 31.8 8.41
----------------------------
Total earning assets 42,312 872.4 8.28
Cash and due from banks 1,800
Allowance for credit losses (559)
Other assets 2,144
-------
Total Assets $45,697
=======
Money market and NOW accounts $ 9,192 67.6 2.96
Savings deposits 1,432 5.6 1.58
Certificates of deposit 8,375 109.3 5.25
Foreign office time deposits 1,216 20.4 6.73
----------------------------
Total interest-bearing
deposits 20,215 202.9 4.04
Short-term borrowings 3,589 53.9 6.05
Medium- and long-term debt 8,621 131.0 6.11
----------------------------
Total interest-bearing
sources 32,425 387.8 4.81
Noninterest-bearing deposits 8,612
Other liabilities 677
Preferred stock 250
Common shareholders' equity 3,733
-------
Total Liabilities and
Shareholders' Equity $45,697
=======
Net interest income/Rate
spread (FTE) $484.6 3.47
======
FTE adjustment $ 1.0
======
Impact of net noninterest-bearing
sources of funds 1.13
-----
Net interest margin as a percent of
average earning assets (FTE) 4.60%
=====
(1) The average rate for investment securities available for sale was computed
using average historical cost.
16
CONSOLIDATED STATISTICAL DATA
Comerica Incorporated and Subsidiaries
March 31, December 31, September 30,
(In thousands, except per share data) 2001 2000 2000
----------- ----------- -----------
Commercial loans:
Floor plan $ 2,217,405 $ 2,063,619 $ 1,559,050
Other 24,156,024 23,945,717 23,851,548
----------- ----------- -----------
Total commercial 26,373,429 26,009,336 25,410,598
International loans 2,653,902 2,571,156 2,483,910
Real estate construction loans 2,973,895 2,915,168 2,771,393
Commercial mortgage loans 5,570,134 5,360,601 5,195,445
Residential mortgage loans 793,075 807,064 817,483
Consumer loans:
Credit card 21,303 21,517 19,995
Home equity 964,753 976,100 954,427
Other consumer 485,959 479,518 483,667
----------- ----------- -----------
Total consumer 1,472,015 1,477,135 1,458,089
Lease financing 1,088,908 1,029,164 940,241
----------- ----------- -----------
Total loans $40,925,358 $40,169,624 $39,077,159
=========== =========== ===========
Goodwill $ 356,925 $ 366,550 $ 374,611
Core deposit intangible 7,176 7,883 9,056
Other intangible assets 1,215 3,472 3,723
Loan servicing rights 8,470 6,657 6,644
Deferred mutual fund distribution costs 54,045 85,849 104,307
Amortization of intangibles (quarterly) 8,685 9,549 9,596
Leverage ratio* 8.77% 8.74% 8.75%
Tier 1 risk-based capital ratio* 7.36 7.35 7.36
Total risk-based capital ratio* 11.13 11.11 11.32
Book value per share $ 24.80 $ 23.98 $ 23.22
Market value for the quarter:
High $ 65.15 $ 61.13 $ 59.44
Low 53.00 47.19 45.00
Close 61.50 59.38 58.44
Return on average common equity 8.11% 16.05% 20.87%
Return on average assets 0.76 1.43 1.83
Efficiency ratio 68.22 51.25 50.23
Number of commercial banking offices 353 354 347
Number of employees-full time equivalent 11,525 11,444 11,387
* March 31, 2001 ratios estimated
17
CONSOLIDATED STATISTICAL DATA
Comerica Incorporated and Subsidiaries
June 30, March 31,
(In thousands, except per share data) 2000 2000
----------- -----------
Commercial loans:
Floor plan $ 1,853,836 $ 1,815,606
Other 23,547,430 22,704,255
----------- -----------
Total commercial 25,401,266 24,519,861
International loans 2,612,539 2,565,966
Real estate construction loans 2,576,986 2,422,371
Commercial mortgage loans 5,145,662 5,078,245
Residential mortgage loans 828,092 849,912
Consumer loans:
Credit card 26,945 22,657
Home equity 938,191 901,107
Other consumer 473,235 483,777
----------- -----------
Total consumer 1,438,371 1,407,541
Lease financing 858,065 815,293
----------- -----------
Total loans $38,860,981 $37,659,189
=========== ===========
Goodwill $ 380,726 $ 388,232
Core deposit intangible 10,229 11,481
Other intangible assets 3,973 4,047
Deferred mutual fund distribution costs 105,904 87,199
Loan servicing rights 6,851 6,396
Amortization of intangibles (quarterly) 9,622 8,731
Leverage ratio* 8.53% 8.38%
Tier 1 risk-based capital ratio* 7.22 7.29
Total risk-based capital ratio* 10.78 11.00
Book value per share $ 22.34 $ 21.51
Market value for the quarter:
High $ 54.38 $ 46.25
Low 39.88 32.94
Close 44.88 41.88
Return on average common equity 20.80% 20.66%
Return on average assets 1.77 1.72
Efficiency ratio 49.95 49.98
Number of commercial banking offices 346 347
Number of employees-full time equivalent 11,614 11,513
* March 31, 2001 ratios estimated
18
PARENT COMPANY ONLY BALANCE SHEETS
Comerica Incorporated
March 31, December 31, March 31,
(in thousands, except share data) 2001 2000 2000
----------- ----------- -----------
ASSETS
Cash and due from banks $ 90,603 $ 9,918 $ 247
Time deposits with banks 6,400 112,100 68,500
Investment securities available
for sale 50 47,262 25,024
Investment in subsidiaries,
principally banks 4,876,415 4,634,579 4,259,863
Premises and equipment 3,310 3,391 4,141
Other assets 136,334 66,009 50,957
----------- ----------- -----------
TOTAL ASSETS $ 5,113,112 $ 4,873,259 $ 4,408,732
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Commercial paper $ 116,983 $ 79,985 $ 74,891
Long-term debt 163,886 157,414 158,263
Advances from nonbanking subsidiaries - 4,453 -
Other liabilities 163,729 131,248 118,172
----------- ----------- -----------
Total liabilities 444,598 373,100 351,326
Nonredeemable preferred stock
- $50 stated value:
Authorized - 5,000,000 shares
Issued - 5,000,000 shares at 3/31/01,
12/31/00, and 3/31/00 250,000 250,000 250,000
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 178,337,648 shares at 3/31/01,
177,703,678 shares at 12/31/00 and
177,901,802 shares at 3/31/00 891,688 888,519 889,509
Capital surplus 326,134 301,414 313,493
Unearned employee stock ownership plan
shares - 176,642 shares at 3/31/01 and
12/31/00 and 64,993 shares at 3/31/00 (6,750) (6,750) (3,000)
Accumulated other comprehensive income 127,490 12,097 (37,345)
Retained earnings 3,086,915 3,085,784 2,714,213
Deferred compensation (6,963) (14,494) (22,321)
Less cost of common stock in
treasury - 289,397 shares at 12/31/00
and 826,342 shares at 3/31/00 - (16,411) (47,143)
----------- ----------- -----------
Total shareholders' equity 4,668,514 4,500,159 4,057,406
----------- ----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 5,113,112 $ 4,873,259 $ 4,408,732
=========== =========== ===========
19
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Comerica Incorporated and Subsidiaries
Nonredeem- Accumulated
able Other
(in thousands, except Preferred Common Capital Comprehensive Retained
share data) Stock Stock Surplus Income Earnings
--------- -------- -------- -------- ----------
BALANCES AT JANUARY 1, 2000 $250,000 $889,453 $226,001 $(21,704) $2,677,210
Net income for 2000 - - - - 197,031
Other comprehensive income,
net of tax - - - (15,641) -
Total comprehensive income - - - - -
Common stock dividend - - 84,906 - (84,927)
Cash dividends declared:
Preferred stock - - - - (4,275)
Common stock - - - - (62,519)
Purchase and retirement of
41,400 shares of common stock - (207) (1,902) - -
Purchase of 331,362 shares
of common stock - - - - -
Net issuance of common stock
under employee stock plans - 263 4,488 - (8,307)
Amortization of deferred
compensation - - - - -
-------- -------- -------- -------- ----------
BALANCES AT MARCH 31, 2000 $250,000 $889,509 $313,493 $(37,345) $2,714,213
======== ======== ======== ======== ==========
BALANCES AT JANUARY 1, 2001 $250,000 $888,519 $301,414 $ 12,097 $3,085,784
Net income for 2001 - - - - 93,592
Other comprehensive income,
net of tax - - - 115,393 -
Total comprehensive income - - - - -
Cash dividends declared:
Preferred stock - - - - (4,275)
Common stock - - - - (78,389)
Purchase of 45,000 shares
of common stock - - - - -
Net issuance of common stock
under employee stock plans - 3,169 24,720 - (9,797)
Amortization of deferred
compensation - - - - -
-------- -------- -------- -------- ----------
BALANCES AT MARCH 31, 2001 $250,000 $891,688 $326,134 $127,490 $3,086,915
======== ======== ======== ======== ==========
20
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Comerica Incorporated and Subsidiaries
Unearned
Employee
Stock Total
(in thousands, except Ownership Deferred Treasury Shareholders'
share data) Plan Shares Compensation Stock Equity
---------- ------------ --------- ----------
BALANCES AT JANUARY 1, 2000 $(3,750) $(21,998) $(47,161) $3,948,051
Net income for 2000 - - - 197,031
Other comprehensive income,
net of tax - - - (15,641)
----------
Total comprehensive income - - - 181,390
Common stock dividend - - - (21)
Cash dividends declared:
Preferred stock - - - (4,275)
Common stock - - - (62,519)
Purchase and retirement of
41,400 shares of common stock - - - (2,109)
Purchase of 331,362 shares
of common stock - - (13,112) (13,112)
Net issuance of common stock
under employee stock plans 750 (2,711) 13,130 7,613
Amortization of deferred
compensation - 2,388 - 2,388
------- -------- -------- ----------
BALANCES AT MARCH 31, 2000 $(3,000) $(22,321) $(47,143) $4,057,406
======= ======== ======== ==========
BALANCES AT JANUARY 1, 2001 $(6,750) $(14,494) $(16,411) $4,500,159
Net income for 2001 - - - 93,592
Other comprehensive income,
net of tax - - - 115,393
----------
Total comprehensive income - - - 208,985
Cash dividends declared:
Preferred stock - - - (4,275)
Common stock - - - (78,389)
Purchase of 45,000 shares
of common stock - - (2,760) (2,760)
Net issuance of common stock
under employee stock plans - (3,857) 19,171 33,406
Amortization of deferred
compensation - 11,388 - 11,388
------- ------- -------- ----------
BALANCES AT MARCH 31, 2001 $(6,750) $(6,963) $ - $4,668,514
======= ======= ======== ==========