Loan Growth Continues in High Growth Markets Deposit Rate Reductions and Deposit Growth Among Other Highlights Credit Issues Focused on California Residential Real Estate Development Portfolio
DALLAS, April 17 /PRNewswire-FirstCall/ -- Comerica Incorporated (NYSE: CMA) today reported first quarter 2008 income from continuing operations of $110 million, or $0.73 per diluted share, compared to $117 million, or $0.77 per diluted share, for the fourth quarter 2007 and $189 million, or $1.19 per diluted share, for the first quarter 2007. First quarter 2008 included a $159 million provision for loan losses, compared to $108 million for the fourth quarter 2007 and $23 million for the first quarter 2007.
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(dollar amounts in millions, 1st Qtr 4th Qtr 1st Qtr
except per share data) '08 '07 '07
Net interest income $476 $489 $502
Provision for loan losses 159 108 23
Noninterest income 237 230 203
Noninterest expenses 403 450 407
Income from continuing operations,
net of tax 110 117 189
Net income 109 119 190
Diluted EPS from continuing
operations 0.73 0.77 1.19
Diluted EPS from discontinued
operations* - 0.02 -
Diluted EPS 0.73 0.79 1.19
Return on average common
shareholders' equity from
continuing operations 8.51 % 9.20 % 14.86 %
Return on average common
shareholders' equity 8.42 9.35 14.89
Net interest margin 3.22 3.43 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.
"Despite the challenged economic environment, we remained focused on executing our strategy in the first quarter, as evidenced by good loan and deposit growth, particularly in our high-growth markets," said Ralph W. Babb Jr., chairman and chief executive officer. "While the continued deterioration of the California residential real estate market and its effects on our residential real estate development portfolio affected our overall performance, the remainder of our loan portfolio continued to exhibit stable credit metrics.
"As expected, the net interest margin of 3.22 percent declined 21 basis points from the fourth quarter, largely due to planned securities purchases, expected loan growth in excess of core deposit growth, and the reduced contribution of noninterest-bearing funds in a lower rate environment.
"Our expenses were well controlled in the first quarter with reduced headcount, even as we continued our banking center expansion program."
First Quarter 2008 Compared to Fourth Quarter 2007
Net Interest Income and Net Interest Margin
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'08 '07 '07
Net interest income $476 $489 $502
Net interest margin 3.22 % 3.43 % 3.82 %
Selected average balances:
Total earning assets $59,518 $56,621 $53,148
Total investment securities 7,222 5,533 3,745
Total loans 51,852 50,699 48,896
Total loans, excluding FSD loans
(primarily low-rate) 51,050 49,758 47,327
Total interest-bearing deposits 33,440 31,834 30,417
Total noninterest-bearing
deposits 10,622 10,533 12,162
Total noninterest-bearing
deposits, excluding FSD 8,728 8,473 8,712
Noninterest Income
Noninterest income was $237 million for the first quarter 2008, compared to $230 million for the fourth quarter 2007 and $203 million for the first quarter 2007. Noninterest income in the first quarter 2008, compared to the fourth quarter 2007, included the $21 million gain on the sale of Visa shares (included in "net securities gains") and increased service charges on deposit accounts ($1 million) and investment banking fees ($4 million), partially offset by decreases in seasonally lower commercial lending fees ($6 million), net income (loss) from principal investing and warrants ($10 million) and deferred compensation asset returns ($7 million, offset by a decrease in deferred compensation plan costs in noninterest expenses).
Noninterest Expenses
Noninterest expenses were $403 million for the first quarter 2008, compared to $450 million for the fourth quarter 2007 and $407 million for the first quarter 2007. The $47 million decrease in noninterest expenses in the first quarter 2008, compared to the fourth quarter 2007, reflected a $16 million decrease in salaries expense and the reversal of the $13 million Visa loss sharing arrangement expense that was recorded in the fourth quarter 2007 (included in "litigation and operational losses"). The decrease in salaries expense was primarily due to additional cost deferrals from a refinement in application of Statement of Financial Accounting Standards No. 91 - Accounting for Loan Origination Fees and Costs (FAS 91) ($11 million), a decrease in deferred compensation plan costs ($7 million) and reduced headcount, partially offset by an increase of $8 million in share-based compensation, reflecting that portion of the annual award of restricted stock which is required to be expensed in the period granted. Certain categories of noninterest expenses are highlighted in the table below.
1st Qtr 4th Qtr 1st Qtr
'08 '07 '07
Salaries
Regular salaries $151 $163 $154
Severance 2 3 -
Incentives 32 36 27
Deferred compensation plan
costs (5) 2 2
Share-based compensation 20 12 23
Total salaries 200 216 206
Employee benefits 47 48 46
Customer services 6 7 14
Litigation and operational losses (8) 18 3
Provision for credit losses on
lending-related commitments 4 3 (2)
Tax-related Items
The provision for income taxes reflected a benefit of $5 million resulting from an after-tax adjustment to deferred tax assets in the first quarter 2008. Fourth quarter 2007 interest on tax liabilities (classified in the "provision for income taxes") reflected a $9 million reduction ($6 million after-tax) of interest resulting from a settlement with the Internal Revenue Service on asset depreciation.
Credit Quality
"California residential real estate developers, in particular, continued to struggle," said Babb. "The excess inventory, declining prices and extended time to sell have had a debilitating effect on the California housing market. We are aggressively addressing this situation as the market has continued to deteriorate."
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'08 '07 '07
Net loan charge-offs $110 $63 $16
Net lending-related commitment
charge-offs - 1 3
Total net credit-related
charge-offs 110 64 19
Net loan charge-offs/Average
total loans 0.85 % 0.50 % 0.13 %
Net credit-related charge-
offs/Average total loans 0.85 0.50 0.16
Provision for loan losses $159 $108 $23
Provision for credit losses on
lending-related commitments 4 3 (2)
Total provision for credit
losses 163 111 21
Nonperforming assets (NPAs) 560 423 233
NPAs/Total loans and
foreclosed property 1.07 % 0.83 % 0.49 %
Allowance for loan losses $605 $557 $500
Allowance for credit losses on
lending-related commitments* 25 21 21
Total allowance for credit
losses 630 578 521
Allowance for loan
losses/Total loans 1.16 % 1.10 % 1.04 %
Allowance for loan
losses/Nonperforming loans 112 138 229
* Included in "Accrued expenses and other liabilities" on the
consolidated balance sheets.
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $67.0 billion and $5.3 billion, respectively, at March 31, 2008, compared to $62.3 billion and $5.1 billion, respectively, at December 31, 2007. There were approximately 151 million shares outstanding at March 31, 2008, compared to 150 million shares outstanding at December 31, 2007. No shares were repurchased in the open market in the first quarter 2008.
Comerica's first quarter 2008 estimated Tier 1 common, Tier 1 and total risk-based capital ratios were 6.71 percent, 7.35 percent and 11.00 percent, respectively.
Full Year 2008 Outlook Compared to Full Year 2007 from Continuing Operations
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 Comerica and methodologies in effect at March 31, 2008, and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2008 results compared to fourth quarter 2007.
The following table presents net income (loss) by business segment.
(dollar amounts
in millions) 1st Qtr 4th Qtr 1st Qtr
'08 '07 '07
Business Bank $62 51 % $93 83 % $146 70 %
Retail Bank 40 33 5 5 42 20
Wealth & Institutional
Management 20 16 13 12 21 10
122 100 % 111 100 % 209 100 %
Finance (3) (8) (12)
Other* (10) 16 (7)
Total $109 $119 $190
* Includes discontinued operations and items not directly
associated with the three major business segments or the
Finance Division.
Business Bank
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'08 '07 '07
Net interest income (FTE) $329 $330 $337
Provision for loan losses 147 88 14
Noninterest income 74 80 61
Noninterest expenses 176 186 170
Net income 62 93 146
Net credit-related charge-offs 99 50 14
Selected average balances:
Assets 42,129 41,327 40,059
Loans 41,219 40,285 39,015
FSD loans 802 941 1,569
Deposits 15,878 15,931 16,711
FSD deposits 2,988 3,181 4,698
Net interest margin 3.20 % 3.25 % 3.50 %
Retail Bank
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'08 '07 '07
Net interest income (FTE) $148 $161 $170
Provision for loan losses 17 26 5
Noninterest income 74 55 52
Noninterest expenses 143 182 153
Net income 40 5 42
Net credit-related charge-offs 10 14 5
Selected average balances:
Assets 7,144 6,998 6,840
Loans 6,276 6,229 6,095
Deposits 17,162 17,254 17,032
Net interest margin 3.47 % 3.69 % 4.04 %
< >Average loans increased $47 million, or three percent on an annualized basis, as a result of growth in Small Business.Average deposits decreased $92 million, primarily due to decreases in noninterest-bearing deposits and time deposits, partially offset by an increase in NOW accounts.The net interest margin of 3.47 percent decreased 22 basis points, primarily due to a decline in deposit spreads resulting from changes in the deposit mix.The provision for loan losses decreased $9 million, primarily in Small Business Banking, including SBA loans, from the fourth quarter 2007.Noninterest income increased $19 million, primarily due to the $21 million gain on Visa shares.Noninterest expenses decreased $39 million, primarily due to the first quarter 2008 reversal of the $13 million Visa loss sharing arrangement expense recorded in the fourth quarter 2007 and lower salaries expense related to the refinement in application of FAS 91.Three new banking centers were opened in the first quarter 2008 in the Western market.
Wealth and Institutional Management
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'08 '07 '07
Net interest income (FTE) $36 $36 $37
Provision for loan losses - 1 (1)
Noninterest income 75 72 71
Noninterest expenses 79 86 76
Net income 20 13 21
Net credit-related charge-offs 1 - -
Selected average balances:
Assets 4,468 4,321 3,898
Loans 4,315 4,146 3,747
Deposits 2,637 2,552 2,317
Net interest margin 3.33 % 3.43 % 3.92 %
< >Average loans increased $169 million, or 16 percent on an annualized basis.Average deposits increased $85 million, or 13 percent on an annualized basis.The net interest margin of 3.33 percent declined 10 basis points, primarily due to a decline in deposit spreads resulting from changes in the deposit mix.Noninterest income increased $3 million, partially due to an increase in customer derivative income.Noninterest expenses decreased $7 million, partially due to decreases in salaries and employee benefits and litigation and operational losses.
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 March 31, 2008 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2008 results compared to fourth quarter 2007.
The following table presents net income (loss) by market segment.
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'08 '07 '07
Midwest $87 71 % $59 53 % $79 39 %
Western (10) (8) (2) (2) 73 35
Texas 20 16 14 13 23 11
Florida (4) (3) (1) (1) 3 1
Other Markets 19 15 30 27 22 10
International 10 9 11 10 9 4
122 100 % 111 100 % 209 100 %
Finance & Other
Businesses* (13) 8 (19)
Total $109 $119 $190
* Includes discontinued operations and items not directly
associated with the geographic markets.
Midwest
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'08 '07 '07
Net interest income (FTE) $205 $212 $227
Provision for loan losses 20 21 27
Noninterest income 136 120 115
Noninterest expenses 186 218 194
Net income 87 59 79
Net credit-related charge-offs 28 37 21
Selected average balances:
Assets 19,656 19,228 19,180
Loans 19,030 18,601 18,614
Deposits 16,127 16,117 15,868
Net interest margin 4.30 % 4.50 % 4.93 %
< >Average loans increased $429 million, or nine percent on an annualized basis, primarily due to increases in the Global Corporate and National Dealer Services.Average deposits increased $10 million, as increases in Global Corporate and Personal Banking were offset by a decline in Small Business Banking.The net interest margin of 4.30 percent declined 20 basis points, primarily due to a decline in deposit spreads resulting from changes in the deposit mix, partially offset by an increase in loan spreads.The provision for loan losses was relatively unchanged, with improved Commercial Real Estate offset by changes in Middle Market, including the effect of a benefit recognized in the fourth quarter 2007 in automotive supplier reserves.Noninterest income increased $16 million, due to the $17 million gain on Visa shares.Noninterest expenses decreased $32 million, primarily due to the first quarter 2008 reversal of the $10 million Visa loss sharing arrangement expense recorded in the fourth quarter 2007 and lower salaries expense related to the refinement in application of FAS 91.
Western Market
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'08 '07 '07
Net interest income (FTE) $172 $178 $188
Provision for loan losses 114 92 (12)
Noninterest income 33 35 27
Noninterest expenses 108 121 111
Net income (loss) (10) (2) 73
Net credit-related charge-offs 66 23 (5)
Selected average balances:
Assets 17,263 17,137 16,782
Loans 16,882 16,615 16,241
FSD loans 802 941 1,569
Deposits 12,848 13,012 13,696
FSD deposits 2,802 3,045 4,515
Net interest margin 4.07 % 4.24 % 4.69 %
< >Excluding the Financial Services Division, average loans increased $406 million, or 10 percent on an annualized basis, primarily due to growth in the Middle Market, Global Corporate and Technology and Life Sciences lines of business.Excluding the Financial Services Division, average deposits increased $79 million, or three percent on an annualized basis, primarily due to growth in Middle Market.The net interest margin of 4.07 percent declined 17 basis points due to the impact from the Financial Services Division of lower deposit balances and lower value of noninterest-bearing deposits in a lower rate environment.The provision for loan losses increased $22 million, primarily due to continuing challenges in Commercial Real Estate (residential real estate developers).Noninterest income decreased $2 million, primarily due to a decrease in principal investing and warrant income, partially offset by the $1 million gain on Visa shares.Noninterest expenses decreased $13 million, primarily due to a decrease in salaries and benefits expense, in part resulting from the refinement in application of FAS 91 and customer service expenses, and the first quarter 2008 reversal of the $1 million Visa loss sharing arrangement expense recorded in the fourth quarter 2007.Three new banking centers were opened in the first quarter 2008.
Texas Market
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'08 '07 '07
Net interest income (FTE) $74 $74 $69
Provision for loan losses 8 7 -
Noninterest income 24 23 19
Noninterest expenses 58 67 53
Net income 20 14 23
Total net credit-related charge-offs 5 3 3
Selected average balances:
Assets 7,932 7,677 6,719
Loans 7,642 7,381 6,444
Deposits 4,005 3,935 3,843
Net interest margin 3.83 % 3.95 % 4.31 %
< >Average loans increased $261 million, or 14 percent on an annualized basis, primarily due to growth in Energy, Middle Market and Commercial Real Estate.Excluding the Financial Services Division, average deposits increased $19 million, or two percent on an annualized basis.The net interest margin of 3.83 percent decreased 12 basis points primarily due to deposit spreads resulting from changes in the deposit mix.Noninterest income increased $1 million, primarily due to the $3 million gain on Visa shares.Noninterest expenses decreased $9 million, primarily due to the first quarter 2008 reversal of the $2 million Visa loss sharing arrangement expense recorded in the fourth quarter 2007 and a decrease in salaries expense related to the refinement in application of FAS 91.
Florida Market
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'08 '07 '07
Net interest income (FTE) $11 $11 $11
Provision for loan losses 12 5 1
Noninterest income 5 4 4
Noninterest expenses 10 11 9
Net income (loss) (4) (1) 3
Net credit-related charge-offs 10 - -
Selected average balances:
Assets 1,891 1,732 1,646
Loans 1,877 1,719 1,626
Deposits 362 299 284
Net interest margin 2.55 % 2.67 % 2.80 %
< >Average loans increased $158 million, primarily due to a transfer of Florida loans previously serviced from the Texas market.Average deposits increased $63 million, primarily due to growth in Private Banking.The provision for loan losses increased $7 million, primarily due to a single Middle Market customer.
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
Three Months Ended
March 31, December 31, March 31,
(in millions, except per share data) 2008 2007 2007
PER SHARE AND COMMON STOCK DATA
Diluted income from continuing
operations $0.73 $0.77 $1.19
Diluted net income 0.73 0.79 1.19
Cash dividends declared 0.66 0.64 0.64
Common shareholders' equity (at period
end) 34.93 34.12 32.78
Average diluted shares (in thousands) 150,734 150,943 158,915
KEY RATIOS
Return on average common shareholders'
equity from continuing operations 8.51 % 9.20 % 14.86 %
Return on average common shareholders'
equity 8.42 9.35 14.89
Return on average assets from
continuing operations 0.69 0.77 1.33
Return on average assets 0.68 0.79 1.33
Average common shareholders' equity as
a percentage of average assets 8.12 8.41 8.92
Tier 1 common capital ratio * 6.71 6.85 7.49
Tier 1 risk-based capital ratio * 7.35 7.51 8.19
Total risk-based capital ratio * 11.00 11.20 12.15
Leverage ratio * 8.86 9.26 10.00
AVERAGE BALANCES
Commercial loans $29,178 $28,393 $27,757
Real estate construction loans 4,811 4,846 4,249
Commercial mortgage loans 10,142 9,941 9,673
Residential mortgage loans 1,916 1,891 1,705
Consumer loans 2,449 2,412 2,405
Lease financing 1,347 1,327 1,273
International loans 2,009 1,889 1,834
Total loans 51,852 50,699 48,896
Earning assets 59,518 56,621 53,148
Total assets 63,927 60,507 57,088
Interest-bearing deposits 33,440 31,834 30,417
Total interest-bearing liabilities 46,793 43,574 38,498
Noninterest-bearing deposits 10,622 10,533 12,162
Common shareholders' equity 5,192 5,087 5,092
NET INTEREST INCOME
Net interest income (fully taxable
equivalent basis) $477 $489 $503
Fully taxable equivalent adjustment 1 - 1
Net interest margin 3.22 % 3.43 % 3.82 %
CREDIT QUALITY
Nonaccrual loans $538 $391 $218
Reduced-rate loans - 13 -
Total nonperforming loans 538 404 218
Foreclosed property 22 19 15
Total nonperforming assets 560 423 233
Loans past due 90 days or more and
still accruing 80 54 15
Gross loan charge-offs 116 72 34
Loan recoveries 6 9 18
Net loan charge-offs 110 63 16
Lending-related commitment charge-offs - 1 3
Total net credit-related charge-offs 110 64 19
Allowance for loan losses 605 557 500
Allowance for credit losses on lending-
related commitments 25 21 21
Total allowance for credit losses 630 578 521
Allowance for loan losses as a
percentage of total loans 1.16 % 1.10 % 1.04 %
Net loan charge-offs as a percentage of
average total loans 0.85 0.50 0.13
Net credit-related charge-offs as a
percentage of average total loans 0.85 0.50 0.16
Nonperforming assets as a percentage of
total loans and foreclosed property 1.07 0.83 0.49
Allowance for loan losses as a
percentage of total nonperforming
loans 112 138 229
* March 31, 2008 ratios are estimated
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
March 31, December 31, March 31,
(in millions, except share data) 2008 2007 2007
ASSETS
Cash and due from banks $1,929 $1,440 $1,334
Federal funds sold and securities
purchased under agreements to resell 45 36 1,457
Other short-term investments 356 373 220
Investment securities available-for-
sale 8,563 6,296 3,989
Commercial loans 29,475 28,223 26,681
Real estate construction loans 4,769 4,816 4,462
Commercial mortgage loans 10,359 10,048 9,592
Residential mortgage loans 1,926 1,915 1,741
Consumer loans 2,448 2,464 2,392
Lease financing 1,341 1,351 1,273
International loans 2,034 1,926 1,848
Total loans 52,352 50,743 47,989
Less allowance for loan losses (605) (557) (500)
Net loans 51,747 50,186 47,489
Premises and equipment 670 650 596
Customers' liability on acceptances
outstanding 28 48 55
Accrued income and other assets 3,679 3,302 2,387
Total assets $67,017 $62,331 $57,527
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $12,792 $11,920 $13,584
Money market and NOW deposits 15,601 15,261 14,815
Savings deposits 1,408 1,325 1,410
Customer certificates of deposit 8,191 8,357 7,447
Institutional certificates of deposit 7,752 6,147 5,679
Foreign office time deposits 1,075 1,268 735
Total interest-bearing deposits 34,027 32,358 30,086
Total deposits 46,819 44,278 43,670
Short-term borrowings 2,434 2,807 329
Acceptances outstanding 28 48 55
Accrued expenses and other
liabilities 1,679 1,260 1,214
Medium- and long-term debt 10,800 8,821 7,148
Total liabilities 61,760 57,214 52,416
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 178,735,252 shares at
3/31/08, 12/31/07 and 3/31/07 894 894 894
Capital surplus 565 564 524
Accumulated other comprehensive loss (67) (177) (284)
Retained earnings 5,496 5,497 5,302
Less cost of common stock in treasury
- 28,233,996 shares at 3/31/08,
28,747,097 shares at 12/31/07 and
22,834,368 shares at 3/31/07 (1,631) (1,661) (1,325)
Total shareholders' equity 5,257 5,117 5,111
Total liabilities and
shareholders' equity $67,017 $62,331 $57,527
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Three Months Ended
March 31,
(in millions, except per share data) 2008 2007
INTEREST INCOME
Interest and fees on loans $770 $851
Interest on investment securities 88 42
Interest on short-term investments 5 8
Total interest income 863 901
INTEREST EXPENSE
Interest on deposits 253 286
Interest on short-term borrowings 29 22
Interest on medium- and long-term debt 105 91
Total interest expense 387 399
Net interest income 476 502
Provision for loan losses 159 23
Net interest income after
provision for loan losses 317 479
NONINTEREST INCOME
Service charges on deposit accounts 58 54
Fiduciary income 52 49
Commercial lending fees 17 16
Letter of credit fees 15 16
Foreign exchange income 10 9
Brokerage fees 10 11
Card fees 14 12
Bank-owned life insurance 10 10
Net securities gains 22 -
Net gain on sales of businesses - 1
Other noninterest income 29 25
Total noninterest income 237 203
NONINTEREST EXPENSES
Salaries 200 206
Employee benefits 47 46
Total salaries and employee benefits 247 252
Net occupancy expense 38 35
Equipment expense 15 15
Outside processing fee expense 23 20
Software expense 19 15
Customer services 6 14
Litigation and operational losses (8) 3
Provision for credit losses on
lending-related commitments 4 (2)
Other noninterest expenses 59 55
Total noninterest expenses 403 407
Income from continuing operations
before income taxes 151 275
Provision for income taxes 41 86
Income from continuing operations 110 189
Income (loss) from discontinued
operations, net of tax (1) 1
NET INCOME $109 $190
Basic earnings per common share:
Income from continuing operations $0.74 $1.21
Net income 0.73 1.21
Diluted earnings per common share:
Income from continuing operations 0.73 1.19
Net income 0.73 1.19
Cash dividends declared on common stock 99 101
Dividends per common share 0.66 0.64
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
First Fourth Third Second First
Qtr Qtr Qtr Qtr Qtr
(in millions, except per share data) 2008 2007 2007 2007 2007
INTEREST INCOME
Interest and fees on loans $770 $873 $895 $882 $851
Interest on investment securities 88 66 52 46 42
Interest on short-term investments 5 5 5 5 8
Total interest income 863 944 952 933 901
INTEREST EXPENSE
Interest on deposits 253 303 294 284 286
Interest on short-term borrowings 29 30 29 24 22
Interest on medium- and long-term debt 105 122 126 116 91
Total interest expense 387 455 449 424 399
Net interest income 476 489 503 509 502
Provision for loan losses 159 108 45 36 23
Net interest income after
provision for loan losses 317 381 458 473 479
NONINTEREST INCOME
Service charges on deposit accounts 58 57 55 55 54
Fiduciary income 52 52 49 49 49
Commercial lending fees 17 23 19 17 16
Letter of credit fees 15 16 16 15 16
Foreign exchange income 10 10 11 10 9
Brokerage fees 10 11 11 10 11
Card fees 14 14 14 14 12
Bank-owned life insurance 10 9 8 9 10
Net securities gains 22 3 4 - -
Net gain on sales of businesses - - - 2 1
Other noninterest income 29 35 43 44 25
Total noninterest income 237 230 230 225 203
NONINTEREST EXPENSES
Salaries 200 216 207 215 206
Employee benefits 47 48 49 50 46
Total salaries and employee
benefits 247 264 256 265 252
Net occupancy expense 38 36 34 33 35
Equipment expense 15 15 15 15 15
Outside processing fee expense 23 24 23 24 20
Software expense 19 17 16 15 15
Customer services 6 7 11 11 14
Litigation and operational losses (8) 18 6 (9) 3
Provision for credit losses on lending-
related commitments 4 3 - (2) (2)
Other noninterest expenses 59 66 62 59 55
Total noninterest expenses 403 450 423 411 407
Income from continuing operations
before income taxes 151 161 265 287 275
Provision for income taxes 41 44 85 91 86
Income from continuing operations 110 117 180 196 189
Income (loss) from discontinued
operations, net of tax (1) 2 1 - 1
NET INCOME $109 $119 $181 $196 $190
Basic earnings per common share:
Income from continuing operations $0.74 $0.78 $1.18 $1.28 $1.21
Net income 0.73 0.80 1.20 1.28 1.21
Diluted earnings per common share:
Income from continuing operations 0.73 0.77 1.17 1.25 1.19
Net income 0.73 0.79 1.18 1.25 1.19
Cash dividends declared on common stock 99 97 97 98 101
Dividends per common share 0.66 0.64 0.64 0.64 0.64
N/M - Not meaningful
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
First Quarter 2008 Compared To:
Fourth Quarter 2007 First Quarter 2007
(in millions, except per share data) Amount Percent Amount Percent
INTEREST INCOME
Interest and fees on loans $(103) (11.7)% $(81) (9.6)
Interest on investment securities 22 33.2 46 N/M
Interest on short-term investments - (11.5) (3) (39.7)
Total interest income (81) (8.6) (38) (4.2)
INTEREST EXPENSE
Interest on deposits (50) (16.3) (33) (11.5)
Interest on short-term borrowings (1) (4.7) 7 31.5
Interest on medium- and long-term debt (17) (14.8) 14 15.1
Total interest expense (68) (15.1) (12) (3.1)
Net interest income (13) (2.5) (26) (5.1)
Provision for loan losses 51 47.2 136 N/M
Net interest income after
provision for loan losses (64) (16.6) (162) (33.8)
NONINTEREST INCOME
Service charges on deposit accounts 1 1.2 4 8.7
Fiduciary income - 0.4 3 5.1
Commercial lending fees (6) (28.2) 1 2.3
Letter of credit fees (1) (4.8) (1) (4.6)
Foreign exchange income - (1.2) 1 9.2
Brokerage fees (1) (5.7) (1) (5.1)
Card fees - (0.1) 2 16.4
Bank-owned life insurance 1 11.6 - 2.8
Net securities gains 19 N/M 22 N/M
Net gain on sales of businesses - N/M (1) N/M
Other noninterest income (6) (18.5) 4 16.7
Total noninterest income 7 2.8 34 17.0
NONINTEREST EXPENSES
Salaries (16) (7.5) (6) (2.7)
Employee benefits (1) (1.0) 1 2.6
Total salaries and employee benefits (17) (6.4) (5) (1.8)
Net occupancy expense 2 6.3 3 8.5
Equipment expense - 1.5 - 5.1
Outside processing fee expense (1) (5.4) 3 13.5
Software expense 2 10.3 4 22.5
Customer services (1) (21.3) (8) (58.5)
Litigation and operational losses (26) N/M (11) N/M
Provision for credit losses on
lending-related commitments 1 18.6 6 N/M
Other noninterest expenses (7) (8.7) 4 8.9
Total noninterest expenses (47) (10.4) (4) (0.9)
Income from continuing operations
before income taxes (10) (6.0) (124) (44.9)
Provision for income taxes (3) (7.2) (45) (52.3)
Income from continuing operations (7) (5.6) (79) (41.6)
Income (loss) from discontinued
operations, net of tax (3) N/M (2) N/M
NET INCOME $(10) (8.1)% $(81) (42.3)
Basic earnings per common share:
Income from continuing operations $(0.04) (5.1)% $(0.47) (38.8)
Net income (0.07) (8.8) (0.48) (39.7)
Diluted earnings per common share:
Income from continuing operations (0.04) (5.2) (0.46) (38.7)
Net income (0.06) (7.6) (0.46) (38.7)
Cash dividends declared on common stock 2 3.4 (2) (0.9)
Dividends per common share 0.02 3.1 0.02 3.1
N/M - Not meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
Comerica Incorporated and Subsidiaries
2008 2007
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
Balance at beginning of period $557 $512 $507 $500 $493
Loan charge-offs:
Commercial 33 27 30 19 13
Real estate construction:
Commercial Real Estate
business line 66 24 6 6 1
Other business lines 1 1 2 2 -
Total real estate
construction 67 25 8 8 1
Commercial mortgage:
Commercial Real Estate
business line 6 7 2 3 3
Other business lines 2 9 4 10 14
Total commercial
mortgage 8 16 6 13 17
Residential mortgage - - - - -
Consumer 7 4 3 3 3
Lease financing - - - - -
International 1 - - - -
Total loan charge-offs 116 72 47 43 34
Recoveries on loans previously
charged-off:
Commercial 3 7 5 5 10
Real estate construction 1 - - - -
Commercial mortgage 1 1 1 2 -
Residential mortgage - - - - -
Consumer 1 1 1 1 1
Lease financing - - - - 4
International - - - 5 3
Total recoveries 6 9 7 13 18
Net loan charge-offs 110 63 40 30 16
Provision for loan losses 159 108 45 36 23
Foreign currency translation
adjustment (1) - - 1 -
Balance at end of period $605 $557 $512 $507 $500
Allowance for loan losses as a
percentage of total loans 1.16 % 1.10 % 1.03 % 1.04 % 1.04 %
Net loan charge-offs as a
percentage of average total loans 0.85 0.50 0.32 0.24 0.13
Net credit-related charge-offs as
a percentage of average total
loans 0.85 0.50 0.32 0.24 0.16
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED
COMMITMENTS
Comerica Incorporated and Subsidiaries
2008 2007
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
Balance at beginning of period $21 $19 $19 $21 $26
Less: Charge-offs on lending-related
commitments (1) - 1 - - 3
Add: Provision for credit losses on
lending-related commitments 4 3 - (2) (2)
Balance at end of period $25 $21 $19 $19 $21
Unfunded lending-related commitments
sold $3 $22 $- $- $60
(1) Charge-offs result from the sale of unfunded lending-related
commitments.
NONPERFORMING ASSETS
Comerica Incorporated and Subsidiaries
2008 2007
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
SUMMARY OF NONPERFORMING
ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Commercial $87 $75 $64 $88 $73
Real estate
construction:
Commercial Real
Estate business line 309 161 55 37 21
Other business lines 4 6 4 7 4
Total real estate
construction 313 167 59 44 25
Commercial mortgage:
Commercial Real
Estate business line 67 66 63 20 17
Other business lines 64 75 77 84 84
Total commercial
mortgage 131 141 140 104 101
Residential mortgage 1 1 1 1 1
Consumer 3 3 4 3 4
Lease financing - - - - 4
International 3 4 4 4 10
Total nonaccrual
loans 538 391 272 244 218
Reduced-rate loans - 13 - - -
Total
nonperforming
loans 538 404 272 244 218
Foreclosed property 22 19 19 15 15
Total
nonperforming
assets $560 $423 $291 $259 $233
Nonperforming loans as a
percentage of total loans 1.03 % 0.80 % 0.55 % 0.50 % 0.45 %
Nonperforming assets as a
percentage of total loans
and foreclosed property 1.07 0.83 0.59 0.53 0.49
Allowance for loan losses as
a percentage of total
nonperforming loans 112 138 188 207 229
Loans past due 90 days or
more and still accruing $80 $54 $56 $29 $15
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at
beginning of period $391 $272 $244 $218 $214
Loans transferred to
nonaccrual (1) 281 185 94 107 69
Nonaccrual business
loan gross charge-offs
(2) (108) (68) (44) (40) (31)
Loans transferred to
accrual status (1) - - (5) (8) -
Nonaccrual business
loans sold (3) (15) - (11) - (4)
Payments/Other (4) (11) 2 (6) (33) (30)
Nonaccrual loans at end of
period $538 $391 $272 $244 $218
(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 $108 $68 $44 $40 $31
Performing watch list
loans 1 - - - -
Consumer and
residential mortgage
loans 7 4 3 3 3
Total gross loan
charge-offs $116 $72 $47 $43 $34
(3) Analysis of loans sold:
Nonaccrual business
loans $15 $- $11 $- $4
Performing watch list
loans 6 13 - - -
Total loans sold $21 $13 $11 $- $4
(4) Includes net changes related to nonaccrual loans with balances
less than $2 million, other than business loan gross charge-offs
and nonaccrual loans sold, and payments on nonaccrual loans with
book balances greater than $2 million.
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Three Months Ended
March 31, 2008 December 31, 2007
(dollar amounts in Average Average Average Average
millions) Balance Interest Rate Balance Interest Rate
Commercial loans (1) (2) $29,178 $429 5.93 % $28,393 $500 7.00 %
Real estate construction
loans 4,811 71 5.92 4,846 92 7.48
Commercial mortgage loans 10,142 159 6.29 9,941 175 7.01
Residential mortgage loans 1,916 29 6.01 1,891 29 6.16
Consumer loans 2,449 37 6.02 2,412 41 6.64
Lease financing 1,347 11 3.22 1,327 8 2.41
International loans 2,009 30 6.01 1,889 34 7.03
Business loan swap income
(expense) - 5 - - (6) -
Total loans (2) 51,852 771 5.98 50,699 873 6.84
Investment securities
available-for-sale 7,222 88 4.93 5,533 66 4.76
Federal funds sold and
securities purchased
under agreements to resell 80 1 3.28 90 1 4.79
Other short-term
investments 364 4 4.34 299 4 5.44
Total earning assets 59,518 864 5.84 56,621 944 6.62
Cash and due from banks 1,240 1,241
Allowance for loan losses (596) (541)
Accrued income and other
assets 3,765 3,186
Total assets $63,927 $60,507
Money market and NOW
deposits (1) $15,341 79 2.06 $15,174 116 3.03
Savings deposits 1,359 2 0.64 1,374 4 1.00
Customer certificates of
deposit 8,286 84 4.07 8,229 92 4.44
Institutional certificates
of deposit 7,257 77 4.28 5,779 76 5.22
Foreign office time
deposits 1,197 11 3.81 1,278 15 4.69
Total interest-
bearing deposits 33,440 253 3.05 31,834 303 3.77
Short-term borrowings 3,497 29 3.28 2,560 30 4.64
Medium- and long-term debt 9,856 105 4.27 9,180 122 5.31
Total interest-
bearing sources 46,793 387 3.32 43,574 455 4.15
Noninterest-bearing
deposits (1) 10,622 10,533
Accrued expenses and other
liabilities 1,320 1,313
Shareholders' equity 5,192 5,087
Total liabilities and
shareholders' equity $63,927 $60,507
Net interest income/rate
spread (FTE) $477 2.52 $489 2.47
FTE adjustment $1 $-
Impact of net noninterest-bearing
sources of funds 0.70 0.96
Net interest margin (as a
percentage of average earning
assets) (FTE) (2) 3.22 % 3.43 %
(1) FSD balances included
above:
Loans (primarily low-
rate) $802 $2 1.12 % $941 $2 0.98 %
Interest-bearing
deposits 1,094 8 2.77 1,121 11 3.78
Noninterest-bearing
deposits 1,894 2,060
(2) Impact of FSD loans
(primarily low-rate) on
the following:
Commercial loans (0.13) % (0.21) %
Total loans (0.08) (0.11)
Net interest margin
(FTE) (assuming
loans were funded
by noninterest-
bearing deposits) (0.03) (0.04)
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Three Months Ended
March 31, 2007
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans (1) (2) $27,757 $499 7.30 %
Real estate construction loans 4,249 91 8.66
Commercial mortgage loans 9,673 175 7.35
Residential mortgage loans 1,705 26 6.11
Consumer loans 2,405 43 7.14
Lease financing 1,273 10 3.18
International loans 1,834 32 7.07
Business loan swap income (expense) - (24) -
Total loans (2) 48,896 852 7.06
Investment securities available-for-sale 3,745 42 4.35
Federal funds sold and securities
purchased under agreements to resell 276 4 5.39
Other short-term investments 231 4 6.79
Total earning assets 53,148 902 6.86
Cash and due from banks 1,480
Allowance for loan losses (503)
Accrued income and other assets 2,963
Total assets $57,088
Money market and NOW deposits (1) $14,749 111 3.05
Savings deposits 1,381 3 0.85
Customer certificates of deposit 7,345 80 4.44
Institutional certificates of deposit 5,823 78 5.44
Foreign office time deposits 1,119 14 4.96
Total interest-bearing
deposits 30,417 286 3.81
Short-term borrowings 1,655 22 5.32
Medium- and long-term debt 6,426 91 5.74
Total interest-bearing
sources 38,498 399 4.20
Noninterest-bearing deposits (1) 12,162
Accrued expenses and other
liabilities 1,336
Shareholders' equity 5,092
Total liabilities and
shareholders' equity $57,088
Net interest income/rate spread (FTE) $503 2.66
FTE adjustment $1
Impact of net noninterest-bearing
sources of funds 1.16
Net interest margin (as a percentage
of average earning assets) (FTE)
(2) 3.82 %
(1) FSD balances included above:
Loans (primarily low-rate) $1,569 $3 0.68 %
Interest-bearing deposits 1,248 12 3.91
Noninterest-bearing deposits 3,450
(2) Impact of FSD loans (primarily
low-rate) on the following:
Commercial loans (0.40)%
Total loans (0.22)
Net interest margin (FTE)
(assuming loans were
funded by noninterest-
bearing deposits) (0.11)
CONSOLIDATED STATISTICAL DATA
Comerica Incorporated and Subsidiaries
(in millions, except per March December September June March
share data) 31, 2008 31, 2007 30, 2007 30, 2007 31, 2007
Commercial loans:
Floor plan $2,913 $2,878 $2,601 $3,012 $2,970
Other 26,562 25,345 24,791 24,134 23,711
Total commercial loans 29,475 28,223 27,392 27,146 26,681
Real estate construction
loans:
Commercial Real Estate
business line 4,113 4,089 4,007 3,777 3,708
Other business lines 656 727 752 736 754
Total real estate
construction loans 4,769 4,816 4,759 4,513 4,462
Commercial mortgage loans:
Commercial Real Estate
business line 1,418 1,377 1,467 1,344 1,286
Other business lines 8,941 8,671 8,527 8,384 8,306
Total commercial
mortgage loans 10,359 10,048 9,994 9,728 9,592
Residential mortgage loans 1,926 1,915 1,892 1,839 1,741
Consumer loans:
Home equity 1,619 1,616 1,582 1,585 1,570
Other consumer 829 848 815 736 822
Total consumer loans 2,448 2,464 2,397 2,321 2,392
Lease financing 1,341 1,351 1,319 1,314 1,273
International loans 2,034 1,926 1,843 1,904 1,848
Total loans $52,352 $50,743 $49,596 $48,765 $47,989
Goodwill $150 $150 $150 $150 $150
Loan servicing rights 12 12 13 13 14
Tier 1 common capital ratio* 6.71% 6.85% 7.01% 7.18% 7.49%
Tier 1 risk-based capital
ratio* 7.35 7.51 7.68 7.87 8.19
Total risk-based capital
ratio * 11.00 11.20 11.44 11.71 12.15
Leverage ratio* 8.86 9.26 9.60 9.68 10.00
Book value per share $34.93 $34.12 $33.56 $32.74 $32.78
Market value per share for
the quarter:
High $45.19 $54.88 $61.34 $63.89 $63.39
Low 34.51 39.62 50.26 58.18 56.77
Close 35.08 43.53 51.28 59.47 59.12
Quarterly ratios:
Return on average common
shareholders' equity
from continuing
operations 8.51% 9.20% 14.27% 15.44% 14.86%
Return on average common
shareholders' equity 8.42 9.35 14.41 15.44 14.89
Return on average assets
from continuing
operations 0.69 0.77 1.22 1.35 1.33
Return on average assets 0.68 0.79 1.23 1.35 1.33
Efficiency ratio 58.25 62.76 58.00 55.97 57.66
Number of banking centers 420 417 403 402 402
Number of employees - full
time equivalent 10,643 10,782 10,683 10,687 10,661
* March 31, 2008 ratios are estimated
PARENT COMPANY ONLY BALANCE SHEETS
Comerica Incorporated
March 31, December 31, March 31,
(in millions, except share data) 2008 2007 2007
ASSETS
Cash and due from subsidiary bank $119 $1 $-
Short-term investments with
subsidiary bank 120 224 462
Other short-term investments 103 102 97
Investment in subsidiaries,
principally banks 5,965 5,840 5,599
Premises and equipment 3 4 3
Other assets 187 166 167
Total assets $6,497 $6,337 $6,328
LIABILITIES AND SHAREHOLDERS' EQUITY
Medium- and long-term debt $981 $968 $956
Other liabilities 259 252 261
Total liabilities 1,240 1,220 1,217
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 178,735,252 shares at
3/31/08, 12/31/07, and 3/31/07 894 894 894
Capital surplus 565 564 524
Accumulated other comprehensive loss (67) (177) (284)
Retained earnings 5,496 5,497 5,302
Less cost of common stock in treasury
- 28,233,996 shares at 3/31/08,
28,747,097 shares at 12/31/07 and
22,834,368 shares at 3/31/07 (1,631) (1,661) (1,325)
Total shareholders' equity 5,257 5,117 5,111
Total liabilities and
shareholders' equity $6,497 $6,337 $6,328
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Comerica Incorporated and Subsidiaries
Accumulated
Other Total
Common Stock Comprehen- Sharehol-
(in millions, except In Capital sive Retained Treasury ders'
per share data) Shares Amount Surplus Loss Earnings Stock Equity
BALANCE AT JANUARY 1,
2007 157.6 $894 $520 $(324) $5,230 $(1,219) $5,101
Net income - - - - 190 - 190
Other comprehensive
income, net of tax - - - 40 - - 40
Total comprehensive
income 230
Cash dividends declared
on common stock ($0.64
per share) - - - - (101) - (101)
Purchase of common stock (3.5) - - - - (208) (208)
Net issuance of common
stock under employee
stock plans 1.8 - (20) - (17) 103 66
Recognition of share-
based compensation
expense - - 23 - - - 23
Employee deferred
compensation
obligations - - 1 - - (1) -
BALANCE AT MARCH 31,
2007 155.9 $894 $524 $(284) $5,302 $(1,325) $5,111
BALANCE AT JANUARY 1,
2008 150.0 $894 $564 $(177) $5,497 $(1,661) $5,117
Net income - - - - 109 - 109
Other comprehensive
income, net of tax - - - 110 - - 110
Total comprehensive
income - - - - - - 219
Cash dividends declared
on common stock ($0.66
per share) - - - - (99) - (99)
Net issuance of common
stock under employee
stock plans 0.5 - (20) - (11) 31 -
Recognition of share-
based compensation
expense - - 20 - - - 20
Employee deferred
compensation
obligations - - 1 - - (1) -
BALANCE AT MARCH 31,
2008 150.5 $894 $565 $(67) $5,496 $(1,631) $5,257
BUSINESS SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
Wealth &
(dollar amounts in millions) Business Retail Institutional
Three Months Ended March 31, 2008 Bank Bank Management
Earnings summary:
Net interest income (expense) (FTE) $329 $148 $36
Provision for loan losses 147 17 -
Noninterest income 74 74 75
Noninterest expenses 176 143 79
Provision (benefit) for income taxes
(FTE) 18 22 12
Loss from discontinued operations,
net of tax - - -
Net income (loss) $62 $40 $20
Net credit-related charge-offs $99 $10 $1
Selected average balances:
Assets $42,129 $7,144 $4,468
Loans 41,219 6,276 4,315
Deposits 15,878 17,162 2,637
Liabilities 16,687 17,170 2,646
Attributed equity 3,168 725 331
Statistical data:
Return on average assets (1) 0.59 % 0.89 % 1.79 %
Return on average attributed equity 7.83 22.00 24.10
Net interest margin (2) 3.20 3.47 3.33
Efficiency ratio 44.05 70.99 70.95
Three Months Ended March 31, 2008 Finance Other Total
Earnings summary:
Net interest income (expense) (FTE) $(26) $(10) $477
Provision for loan losses - (5) 159
Noninterest income 18 (4) 237
Noninterest expenses 3 2 403
Provision (benefit) for income taxes
(FTE) (8) (2) 42
Loss from discontinued operations,
net of tax - (1) (1)
Net income (loss) $(3) $(10) $109
Net credit-related charge-offs $- $- $110
Selected average balances:
Assets $8,644 $1,542 $63,927
Loans 5 37 51,852
Deposits 8,142 243 44,062
Liabilities 21,636 596 58,735
Attributed equity 902 66 5,192
Statistical data:
Return on average assets (1) N/M N/M 0.68 %
Return on average attributed equity N/M N/M 8.42
Net interest margin (2) N/M N/M 3.22
Efficiency ratio N/M N/M 58.25
Wealth &
Business Retail Institutional
Three Months Ended December 31, 2007 Bank Bank Management
Earnings summary:
Net interest income (expense) (FTE) $330 $161 $36
Provision for loan losses 88 26 1
Noninterest income 80 55 72
Noninterest expenses 186 182 86
Provision (benefit) for income taxes
(FTE) 43 3 8
Income from discontinued operations,
net of tax - - -
Net income (loss) $93 $5 $13
Net credit-related charge-offs $50 $14 $-
Selected average balances:
Assets $41,327 $6,998 $4,321
Loans 40,285 6,229 4,146
Deposits 15,931 17,254 2,552
Liabilities 16,765 17,266 2,561
Attributed equity 3,073 872 353
Statistical data:
Return on average assets (1) 0.89 % 0.11 % 1.21 %
Return on average attributed equity 12.02 2.33 14.88
Net interest margin (2) 3.25 3.69 3.43
Efficiency ratio 45.54 84.52 79.55
Three Months Ended December 31, 2007 Finance Other Total
Earnings summary:
Net interest income (expense) (FTE) $(30) $(8) $489
Provision for loan losses - (7) 108
Noninterest income 16 7 230
Noninterest expenses 3 (7) 450
Provision (benefit) for income taxes
(FTE) (9) (1) 44
Income from discontinued operations,
net of tax - 2 2
Net income (loss) $(8) $16 $119
Net credit-related charge-offs $- $- $64
Selected average balances:
Assets $6,785 $1,076 $60,507
Loans 5 34 50,699
Deposits 6,622 8 42,367
Liabilities 18,472 356 55,420
Attributed equity 724 65 5,087
Statistical data:
Return on average assets (1) N/M N/M 0.79 %
Return on average attributed equity N/M N/M 9.35
Net interest margin (2) N/M N/M 3.43
Efficiency ratio N/M N/M 62.76
Wealth &
Business Retail Institutional
Three Months Ended March 31, 2007 Bank Bank Management
Earnings summary:
Net interest income (expense) (FTE) $337 $170 $37
Provision for loan losses 14 5 (1)
Noninterest income 61 52 71
Noninterest expenses 170 153 76
Provision (benefit) for income taxes
(FTE) 68 22 12
Income from discontinued operations,
net of tax - - -
Net income (loss) $146 $42 $21
Net credit-related charge-offs $14 $5 $-
Selected average balances:
Assets $40,059 $6,840 $3,898
Loans 39,015 6,095 3,747
Deposits 16,711 17,032 2,317
Liabilities 17,565 17,045 2,317
Attributed equity 2,850 835 312
Statistical data:
Return on average assets (1) 1.45 % 0.93 % 2.19 %
Return on average attributed equity 20.45 19.99 27.36
Net interest margin (2) 3.50 4.04 3.92
Efficiency ratio 42.72 68.84 70.52
Three Months Ended March 31, 2007 Finance Other Total
Earnings summary:
Net interest income (expense) (FTE) $(38) $(3) $503
Provision for loan losses - 5 23
Noninterest income 16 3 203
Noninterest expenses 2 6 407
Provision (benefit) for income taxes
(FTE) (12) (3) 87
Income from discontinued operations,
net of tax - 1 1
Net income (loss) $(12) $(7) $190
Net credit-related charge-offs $- $- $19
Selected average balances:
Assets $5,015 $1,276 $57,088
Loans 17 22 48,896
Deposits 6,490 29 42,579
Liabilities 14,600 469 51,996
Attributed equity 574 521 5,092
Statistical data:
Return on average assets (1) N/M N/M 1.33 %
Return on average attributed equity N/M N/M 14.89
Net interest margin (2) N/M N/M 3.82
Efficiency ratio N/M N/M 57.66
(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
MARKET SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
(dollar amounts in millions)
Three Months Ended March 31, 2008 Midwest Western Texas Florida
Earnings summary:
Net interest income (expense) (FTE) $205 $172 $74 $11
Provision for loan losses 20 114 8 12
Noninterest income 136 33 24 5
Noninterest expenses 186 108 58 10
Provision (benefit) for income taxes
(FTE) 48 (7) 12 (2)
Income from discontinued operations,
net of tax - - - -
Net income (loss) $87 $(10) $20 $(4)
Net credit-related charge-offs $28 $66 $5 $10
Selected average balances:
Assets $19,656 $17,263 $7,932 $1,891
Loans 19,030 16,882 7,642 1,877
Deposits 16,127 12,848 4,005 362
Liabilities 16,814 12,849 4,022 358
Attributed equity 1,663 1,270 619 125
Statistical data:
Return on average assets (1) 1.76 % (0.23)% 1.00 % (0.76)%
Return on average attributed equity 20.83 (3.19) 12.88 (11.57)
Net interest margin (2) 4.30 4.07 3.83 2.55
Efficiency ratio 57.48 52.99 61.28 61.24
Finance
Other Inter- & Other
Three Months Ended March 31, 2008 Markets national Businesses Total
Earnings summary:
Net interest income (expense) (FTE) $36 $15 $(36) $477
Provision for loan losses 13 (3) (5) 159
Noninterest income 17 8 14 237
Noninterest expenses 26 10 5 403
Provision (benefit) for income taxes
(FTE) (5) 6 (10) 42
Income from discontinued operations,
net of tax - - (1) (1)
Net income (loss) $19 $10 $(13) $109
Net credit-related charge-offs $- $1 $- $110
Selected average balances:
Assets $4,633 $2,366 $10,186 $63,927
Loans 4,140 2,239 42 51,852
Deposits 1,534 801 8,385 44,062
Liabilities 1,643 817 22,232 58,735
Attributed equity 384 163 968 5,192
Statistical data:
Return on average assets (1) 1.61 % 1.76 % N/M 0.68 %
Return on average attributed equity 19.47 25.50 N/M 8.42
Net interest margin (2) 3.42 2.69 N/M 3.22
Efficiency ratio 50.41 44.09 N/M 58.25
Three Months Ended December 31, 2007 Midwest Western Texas Florida
Earnings summary:
Net interest income (expense) (FTE) $212 $178 $74 $11
Provision for loan losses 21 92 7 5
Noninterest income 120 35 23 4
Noninterest expenses 218 121 67 11
Provision (benefit) for income taxes
(FTE) 34 2 9 -
Income from discontinued operations,
net of tax - - - -
Net income (loss) $59 $(2) $14 $(1)
Net credit-related charge-offs $37 $23 $3 $-
Selected average balances:
Assets $19,228 $17,137 $7,677 $1,732
Loans 18,601 16,615 7,381 1,719
Deposits 16,117 13,012 3,935 299
Liabilities 16,797 13,044 3,953 297
Attributed equity 1,766 1,264 634 112
Statistical data:
Return on average assets (1) 1.23 % (0.06)% 0.73 % (0.21)%
Return on average attributed equity 13.41 (0.81) 8.79 (3.29)
Net interest margin (2) 4.50 4.24 3.95 2.67
Efficiency ratio 65.81 56.97 69.30 73.50
Finance
Other Inter- & Other
Three Months Ended December 31, 2007 Markets national Businesses Total
Earnings summary:
Net interest income (expense) (FTE) $36 $16 $(38) $489
Provision for loan losses (7) (3) (7) 108
Noninterest income 16 9 23 230
Noninterest expenses 26 11 (4) 450
Provision (benefit) for income taxes
(FTE) 3 6 (10) 44
Income from discontinued operations,
net of tax - - 2 2
Net income (loss) $30 $11 $8 $119
Net credit-related charge-offs $1 $- $- $64
Selected average balances:
Assets $4,591 $2,281 $7,861 $60,507
Loans 4,192 2,152 39 50,699
Deposits 1,495 879 6,630 42,367
Liabilities 1,613 888 18,828 55,420
Attributed equity 369 153 789 5,087
Statistical data:
Return on average assets (1) 2.64 % 1.87 % N/M 0.79 %
Return on average attributed equity 32.83 27.81 N/M 9.35
Net interest margin (2) 3.40 2.80 N/M 3.43
Efficiency ratio 49.17 47.13 N/M 62.76
Three Months Ended March 31, 2007 Midwest Western Texas Florida
Earnings summary:
Net interest income (expense) (FTE) $227 $188 $69 $11
Provision for loan losses 27 (12) - 1
Noninterest income 115 27 19 4
Noninterest expenses 194 111 53 9
Provision (benefit) for income taxes
(FTE) 42 43 12 2
Income from discontinued operations,
net of tax - - - -
Net income (loss) $79 $73 $23 $3
Net credit-related charge-offs
(recoveries) $21 $(5) $3 $-
Selected average balances:
Assets $19,180 $16,782 $6,719 $1,646
Loans 18,614 16,241 6,444 1,626
Deposits 15,868 13,696 3,843 284
Liabilities 16,520 13,733 3,858 288
Attributed equity 1,712 1,177 556 87
Statistical data:
Return on average assets (1) 1.64 % 1.74 % 1.38 % 0.76 %
Return on average attributed equity 18.37 24.80 16.65 14.35
Net interest margin (2) 4.93 4.69 4.31 2.80
Efficiency ratio 56.78 51.32 60.84 60.63
Finance
Other Inter- & Other
Three Months Ended March 31, 2007 Markets national Businesses Total
Earnings summary:
Net interest income (expense) (FTE) $32 $17 $(41) $503
Provision for loan losses 2 - 5 23
Noninterest income 11 8 19 203
Noninterest expenses 21 11 8 407
Provision (benefit) for income taxes
(FTE) (2) 5 (15) 87
Income from discontinued operations,
net of tax - - 1 1
Net income (loss) $22 $9 $(19) $190
Net credit-related charge-offs
(recoveries) $- $- $- $19
Selected average balances:
Assets $4,288 $2,182 $6,291 $57,088
Loans 3,873 2,059 39 48,896
Deposits 1,271 1,098 6,519 42,579
Liabilities 1,391 1,137 15,069 51,996
Attributed equity 300 165 1,095 5,092
Statistical data:
Return on average assets (1) 2.02 % 1.69 % N/M 1.33 %
Return on average attributed equity 28.93 22.41 N/M 14.89
Net interest margin (2) 3.27 3.23 N/M 3.82
Efficiency ratio 49.23 41.93 N/M 57.66
(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
Conference Call and Webcast
Comerica will host a conference call to review first quarter 2008 financial results at 7 a.m. CDT on Thursday, April 17, 2008. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 39966204). 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 May 1, 2008. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 39966204). A replay of the Webcast can also be accessed on the Internet via Comerica's "Investor Relations" page at www.comerica.com .
Comerica Incorporated is a financial services company headquartered in Dallas, Texas, and strategically aligned by three major business segments: the Business Bank, the Retail Bank, and Wealth & Institutional Management. Comerica focuses on relationships and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada, China and Mexico.
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 relocation 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, changes in customer borrowing, repayment, investment and deposit practices, management's ability to retain key officers and employees, changes in the accounting treatment of any particular item, the impact of regulatory examinations, declines or other changes in the businesses or industries in which Comerica has a concentration of loans, including, but not limited to, the automotive production industry and the real estate business lines, 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, political or industry 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.
SOURCE Comerica Incorporated
CONTACT:
Media, Wayne J. Mielke, +1-214-462-4463,
or Investors, Darlene P. Persons, +1-313-222-2840,
or Paul Jaremski, +1-214-969-6476,
all of Comerica Incorporated
Web site: http://www.comerica.com
(CMA)
