DALLAS, July 21, 2010 /PRNewswire via COMTEX/ --
Comerica Incorporated (NYSE: CMA) today reported second quarter 2010 net income from continuing operations of $70 million, compared to $35 million for the first quarter 2010. Second quarter net income attributable to common shares of $69 million, compared to a net loss attributable to common shares of $71 million for the first quarter 2010, reflected a lower provision for loan losses resulting from continued improvement in credit quality and the benefit of the first quarter 2010 full redemption of $2.25 billion of preferred stock issued to the U.S. Treasury. Second quarter 2010 included a $126 million provision for loan losses, compared to $175 million for the first quarter 2010.
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(dollar amounts in millions, 2nd Qtr 1st Qtr 2nd Qtr
except per share data) '10 '10 '09
---------------------------- ------- ------- -------
Net interest income $422 $415 $402
Provision for loan losses 126 175 312
Noninterest income 194 194 298
Noninterest expenses 397 404 429
Income from continuing
operations, net of tax 70 35 18
Income from discontinued
operations, net of tax - 17 -
Net income 70 52 18
Preferred stock dividends to U.S.
Treasury - 123 (a) 34
Income allocated to participating
securities 1 - -
Net income (loss) attributable to
common shares 69 (71) (16)
Diluted income (loss) per common
share 0.39 (0.46) (0.11)
Tier 1 capital ratio 10.61% (b) 10.38% 11.58%
Tangible common equity ratio (c) 10.11 9.68 7.55
Net interest margin 3.28 3.18 2.73
(a) First quarter 2010 included non-cash charges of $99 million.
(b) June 30, 2010 ratio is estimated.
(c) See Reconciliation of Non-GAAP Financial Measures.
"Our financial results reflect the many positive trends we have seen over several quarters," said Ralph W. Babb Jr., chairman and chief executive officer. "This includes three consecutive quarters of broad-based improvement in credit quality, with leading indicators of future credit quality also pointing positive. Our net interest margin continued to expand, and our expenses remained well controlled. We have strong capital and liquidity to support future growth, with the flexibility to grow organically as well as by acquisition.
"We continue to reach out to our customers, taking their pulse on the economy, their current financial needs and future plans. As a relationship-focused 'Main Street' bank, this type of proactive outreach is how we differentiate ourselves. Since the onset of the economic downturn, we stepped-up our calling efforts to be sure we were ideally positioned to assist customers in navigating the economic environment and to meet their needs as the economy improves. This is reflected in our loan pipeline, which is now at its highest level in more than two years.
"While the pace of the economic recovery remains uncertain, we continue to focus on growing new relationships, and expanding existing ones, with confidence we are in the right markets with the right people and a full array of products and services to make a positive difference for our customers, shareholders and the communities we serve."
Second Quarter 2010 Highlights Compared to First Quarter 2010
Net Interest Income and Net Interest Margin
2nd Qtr 1st Qtr 2nd Qtr
(dollar amounts in millions) '10 '10 '09
---------------------------- ------- ------- -------
Net interest income $422 $415 $402
Net interest margin 3.28% 3.18% 2.73%
Selected average balances:
Total earning assets $51,835 $52,941 $59,522
Total investment securities 7,262 7,382 9,786
Federal Reserve Bank deposits
(excess liquidity) (a) 3,719 4,092 1,833
Total loans 40,672 41,313 47,648
Total core deposits (b) 38,928 37,236 34,925
Total noninterest-bearing
deposits 15,218 14,624 12,546
(a) See Reconciliation of Non-GAAP Financial Measures.
(b) Core deposits exclude other time deposits and foreign office time
deposits.
Noninterest Income
Noninterest income was $194 million for both the second and first quarters of 2010. Commercial service charges declined from a seasonally high first quarter 2010, while card fees and letter of credit fees increased in the second quarter 2010, compared to the first quarter 2010.
Noninterest Expenses
Noninterest expenses were $397 million for the second quarter 2010, compared to $404 million for the first quarter 2010. The $7 million decrease in noninterest expenses in the second quarter 2010, compared to the first quarter 2010, was primarily due to decreases in the provision for credit losses on lending-related commitments ($7 million) and other real estate expense ($7 million), partially offset by an increase in salaries expense ($10 million). Salaries expense reflected the impact of one additional day in the second quarter, annual merit increases and increased share-based compensation expense. Full-time equivalent staff decreased by approximately 100 employees from March 31, 2010 and approximately 400 employees, or four percent, from June 30, 2009.
Credit Quality
"The continued broad-based improvement in credit quality reflects our early recognition of issues, and our ability to quickly and proactively work through problem loans," Babb said. "Overall charge-offs declined in the second quarter, with a notable decrease in commercial real estate charge-offs. The pace of improvement in credit quality is significant and faster than we had expected. A key indicator of future credit quality is our watch list loans, which are down $851 million. As a result of the positive trends we have seen, we have reduced our charge-off outlook for full-year 2010."
2nd Qtr 1st Qtr 2nd Qtr
(dollar amounts in millions) '10 '10 '09
---------------------------- ------- ------- -------
Net credit-related charge-offs $146 $173 $248
Net credit-related charge-offs/
Average total loans 1.44% 1.68% 2.08%
Provision for loan losses $126 $175 $312
Provision for credit losses on
lending-related
commitments - 7 (4)
--- --- ---
Total provision for credit losses 126 182 308
Nonperforming loans 1,121 1,162 1,130
Nonperforming assets (NPAs) 1,214 1,251 1,230
NPAs/Total loans and foreclosed
property 2.98% 3.06% 2.64%
Loans past due 90 days or more and
still accruing $115 $83 $210
Allowance for loan losses 967 987 880
Allowance for credit losses on
lending-related commitments (a) 44 44 33
--- --- ---
Total allowance for credit losses 1,011 1,031 913
Allowance for loan losses/Total
loans 2.38% 2.42% 1.89%
Allowance for loan losses/
Nonperforming loans 86 85 78
(a) Included in "Accrued expenses and other liabilities" on the
consolidated balance sheets.
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $55.9 billion and $5.8 billion, respectively, at June 30, 2010, compared to $57.1 billion and $5.7 billion, respectively, at March 31, 2010. There were approximately 176 million common shares outstanding at June 30, 2010.
In the second quarter 2010, the U.S. Treasury sold 11.5 million warrants to purchase an equal amount of shares of Comerica common stock at $29.40 per share, for $16.00 per warrant. The warrants were originally issued to the U.S. Treasury in connection with Comerica's participation in the Capital Purchase Program. Comerica fully redeemed the $2.25 billion of related preferred stock in March 2010. The sale of the warrants by the U.S. Treasury had no impact on Comerica's equity and the warrants remained outstanding at June 30, 2010.
Comerica's tangible common equity ratio was 10.11 percent at June 30, 2010, an increase of 43 basis points from March 31, 2010. The estimated Tier 1 common ratio was 9.79 percent and the estimated Tier 1 capital ratio was 10.61 percent at June 30, 2010, increases of 22 basis points and 23 basis points, respectively, from March 31, 2010.
Full-Year 2010 Outlook
For full-year 2010, management expects the following, based on an uncertain pace of economic recovery.
Business Segments
Comerica's continuing operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank, and Wealth & Institutional Management. The Finance Division also is included as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at June 30, 2010 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses second quarter 2010 results compared to first quarter 2010.
The following table presents net income (loss) by business segment.
(dollar amounts in 2nd Qtr 1st Qtr 2nd Qtr
millions) '10 '10 '09
------------------ ------- ------- -------
Business Bank $135 $89 $5
Retail Bank (3) (7) (18)
Wealth & Institutional
Management 5 11 15
---------------------- --- --- ---
137 93 2
Finance (57) (59) 8
Other (a) (10) 18 8
--------- --- --- ---
Total $70 $52 $18
----- --- --- ---
(a) Includes discontinued operations and items not directly
associated with the three major business segments or the Finance
Division.
Business Bank
(dollar amounts in 2nd Qtr 1st Qtr 2nd Qtr
millions) '10 '10 '09
------------------ ------- ------- -------
Net interest income
(FTE) $351 $341 $328
Provision for loan
losses 83 137 252
Noninterest income 78 76 50
Noninterest expenses 157 162 157
Net income 135 89 5
Net credit-related
charge-offs 113 137 211
Selected average
balances:
Assets 30,609 31,293 37,521
Loans 30,353 30,918 36,760
Deposits 19,069 17,750 14,827
Net interest margin 4.63% 4.48% 3.58%
------------------- ---- ---- ----
Retail Bank
(dollar amounts in 2nd Qtr 1st Qtr 2nd Qtr
millions) '10 '10 '09
------------------ ------- ------- -------
Net interest income
(FTE) $134 $130 $128
Provision for loan
losses 20 31 42
Noninterest income 42 44 46
Noninterest expenses 160 154 167
Net loss (3) (7) (18)
Net credit-related
charge-offs 22 26 29
Selected average
balances:
Assets 5,937 6,106 6,693
Loans 5,446 5,599 6,115
Deposits 16,930 16,718 17,666
Net interest margin 3.17% 3.18% 2.90%
------------------- ---- ---- ----
Wealth and Institutional Management
(dollar amounts in 2nd Qtr 1st Qtr 2nd Qtr
millions) '10 '10 '09
------------------ ------- ------- -------
Net interest income
(FTE) $45 $42 $40
Provision for loan
losses 19 12 13
Noninterest income 61 60 73
Noninterest expenses 79 73 77
Net income 5 11 15
Net credit-related
charge-offs 11 10 8
Selected average
balances:
Assets 4,903 4,862 4,965
Loans 4,840 4,789 4,776
Deposits 2,924 2,791 2,599
Net interest margin 3.73% 3.53% 3.29%
------------------- ---- ---- ----
Geographic Market Segments
Comerica also provides market segment results for four primary geographic markets: Midwest, Western, Texas and Florida. In addition to the four primary geographic markets, Other Markets and International are also reported as market segments. The financial results below are based on methodologies in effect at June 30, 2010 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses second quarter 2010 results compared to first quarter 2010.
The following table presents net income (loss) by market segment.
2nd Qtr 1st Qtr 2nd Qtr
(dollar amounts in millions) '10 '10 '09
---------------------------- ------- ------- -------
Midwest $57 $26 $-
Western 39 22 (7)
Texas 26 14 5
Florida (9) 1 (8)
Other Markets 8 16 6
International 16 14 6
------------- --- --- ---
137 93 2
Finance & Other Businesses (a) (67) (41) 16
------------------------------ --- --- ---
Total $70 $52 $18
----- --- --- ---
(a) Includes discontinued operations and items not directly
associated with the geographic markets.
Midwest Market
(dollar amounts in 2nd Qtr 1st Qtr 2nd Qtr
millions) '10 '10 '09
------------------ ------- ------- -------
Net interest income
(FTE) $211 $205 $200
Provision for loan
losses 40 81 119
Noninterest income 97 102 92
Noninterest expenses 181 186 186
Net income 57 26 -
Net credit-related
charge-offs 51 55 99
Selected average
balances:
Assets 14,990 15,573 18,122
Loans 14,959 15,332 17,427
Deposits 18,005 17,068 17,166
Net interest margin 4.69% 4.86% 4.56%
------------------- ---- ---- ----
Western Market
(dollar amounts in 2nd Qtr 1st Qtr 2nd Qtr
millions) '10 '10 '09
------------------ ------- ------- -------
Net interest income
(FTE) $164 $161 $154
Provision for loan
losses 27 59 90
Noninterest income 33 36 32
Noninterest expenses 110 105 113
Net income (loss) 39 22 (7)
Net credit-related
charge-offs 47 64 70
Selected average
balances:
Assets 13,006 13,175 14,901
Loans 12,792 12,980 14,684
Deposits 11,951 11,927 10,717
Net interest margin 5.13% 5.04% 4.20%
------------------- ---- ---- ----
Texas Market
(dollar amounts in 2nd Qtr 1st Qtr 2nd Qtr
millions) '10 '10 '09
------------------ ------- ------- -------
Net interest income
(FTE) $81 $79 $73
Provision for loan
losses (1) 17 28
Noninterest income 23 20 21
Noninterest expenses 65 60 60
Net income 26 14 5
Total net credit-
related charge-offs 8 25 11
Selected average
balances:
Assets 6,652 6,892 7,798
Loans 6,428 6,704 7,547
Deposits 5,316 4,957 4,496
Net interest margin 5.05% 4.79% 3.88%
------------------- ---- ---- ----
Florida Market
(dollar amounts in 2nd Qtr 1st Qtr 2nd Qtr
millions) '10 '10 '09
------------------ ------- ------- -------
Net interest income
(FTE) $12 $10 $11
Provision for loan
losses 17 3 20
Noninterest income 4 3 3
Noninterest expenses 12 9 9
Net income (loss) (9) 1 (8)
Net credit-related
charge-offs 7 10 23
Selected average
balances:
Assets 1,576 1,576 1,820
Loans 1,575 1,576 1,820
Deposits 404 361 331
Net interest margin 2.94% 2.54% 2.44%
------------------- ---- ---- ----
Conference Call and Webcast
Comerica will host a conference call to review second quarter 2010 financial results at 7 a.m. CT Wednesday, July 21, 2010. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 82678684). 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 through July 30, 2010. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 82678684). A replay of the Webcast can also be accessed via Comerica's "Investor Relations" page at www.comerica.com.
Comerica Incorporated is a financial services company headquartered in 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 and Mexico.
This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Comerica's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconcilement to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
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 further economic downturns, changes in the pace of an economic recovery and related changes in employment levels, changes in real estate values, fuel prices, energy costs or other events that could affect customer income levels or general economic conditions, the effects of recently enacted legislation, actions taken by or proposed by the U.S. Department of Treasury, the Board of Governors of the Federal Reserve System, the Texas Department of Banking and the Federal Deposit Insurance Corporation, legislation enacted in the future, and the impact and expiration of such legislation and regulatory actions, 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, fires, droughts 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, the interdependence of financial service companies and adverse conditions in the stock market. Comerica cautions that the foregoing list of factors is not exclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to "Item 1A. Risk Factors" beginning on page 11 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2009 and "Item 1A. Risk Factors" beginning on page 67 of Comerica's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010. 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.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
------------------
June 30, March 31, June 30,
(in millions, except per share
data) 2010 2010 2009
------------------------------ ---- ---- ----
PER COMMON SHARE AND COMMON STOCK
DATA
Diluted net income (loss) $0.39 $(0.46) $(0.11)
Cash dividends declared 0.05 0.05 0.05
Common shareholders' equity (at
period end) 32.85 32.15 32.78
Average diluted shares (in
thousands) 178,432 155,155 149,410
-------------------------- ------- ------- -------
KEY RATIOS
Return on average common
shareholders' equity 4.89% (5.61)% (1.25)%
Return on average assets 0.50 0.36 0.11
Tier 1 common capital ratio (a)
(b) 9.79 9.57 7.66
Tier 1 risk-based capital ratio
(b) 10.61 10.38 11.58
Total risk-based capital ratio
(b) 15.00 14.91 15.97
Leverage ratio (b) 11.35 11.00 12.11
Tangible common equity ratio (a) 10.11 9.68 7.55
-------------------------------- ----- ---- ----
AVERAGE BALANCES
Commercial loans $20,910 $21,015 $25,657
Real estate construction loans 2,987 3,386 4,325
Commercial mortgage loans 10,372 10,387 10,476
Residential mortgage loans 1,607 1,632 1,795
Consumer loans 2,448 2,481 2,572
Lease financing 1,108 1,130 1,227
International loans 1,240 1,282 1,596
----- ----- -----
Total loans 40,672 41,313 47,648
Earning assets 51,835 52,941 59,522
Total assets 56,258 57,519 64,256
Noninterest-bearing deposits 15,218 14,624 12,546
Interest-bearing core deposits 23,710 22,612 22,379
Total core deposits 38,928 37,236 34,925
Common shareholders' equity 5,708 5,070 5,016
Total shareholders' equity 5,708 6,864 7,153
-------------------------- ----- ----- -----
NET INTEREST INCOME
Net interest income (fully
taxable equivalent basis) $424 $416 $404
Fully taxable equivalent
adjustment 2 1 2
Net interest margin 3.28% 3.18% 2.73%
------------------- ---- ---- ----
CREDIT QUALITY
Nonaccrual loans $1,098 $1,145 $1,130
Reduced-rate loans 23 17 -
--- --- ---
Total nonperforming loans 1,121 1,162 1,130
Foreclosed property 93 89 100
--- --- ---
Total nonperforming assets 1,214 1,251 1,230
Loans past due 90 days or more
and still accruing 115 83 210
Gross loan charge-offs 158 184 257
Loan recoveries 12 11 9
--- --- ---
Net loan charge-offs 146 173 248
Lending-related commitment
charge-offs - - -
--- --- ---
Total net credit-related charge-
offs 146 173 248
Allowance for loan losses 967 987 880
Allowance for credit losses on
lending-related commitments 44 44 33
--- --- ---
Total allowance for credit losses 1,011 1,031 913
Allowance for loan losses as a
percentage of total loans 2.38% 2.42% 1.89%
Net loan charge-offs as a
percentage of average total
loans 1.44 1.68 2.08
Net credit-related charge-offs
as a percentage of average total
loans 1.44 1.68 2.08
Nonperforming assets as a
percentage of total loans and
foreclosed property 2.98 3.06 2.64
Allowance for loan losses as a
percentage of total
nonperforming loans 86 85 78
------------------------------ --- --- ---
Six Months Ended
----------------
June 30,
(in millions, except per share
data) 2010 2009
------------------------------ ---- ----
PER COMMON SHARE AND COMMON STOCK
DATA
Diluted net income (loss) $(0.01) $(0.27)
Cash dividends declared 0.10 0.10
Common shareholders' equity (at
period end)
Average diluted shares (in
thousands) 165,100 149,334
-------------------------- ------- -------
KEY RATIOS
Return on average common
shareholders' equity (0.05)% (1.58)%
Return on average assets 0.43 0.08
Tier 1 common capital ratio (a)
(b)
Tier 1 risk-based capital ratio
(b)
Total risk-based capital ratio
(b)
Leverage ratio (b)
Tangible common equity ratio (a)
--------------------------------
AVERAGE BALANCES
Commercial loans $20,961 $26,413
Real estate construction loans 3,185 4,417
Commercial mortgage loans 10,380 10,454
Residential mortgage loans 1,620 1,821
Consumer loans 2,464 2,573
Lease financing 1,119 1,263
International loans 1,261 1,655
----- -----
Total loans 40,990 48,596
Earning assets 52,385 60,631
Total assets 56,885 65,490
Noninterest-bearing deposits 14,923 11,958
Interest-bearing core deposits 23,165 22,423
Total core deposits 38,088 34,381
Common shareholders' equity 5,391 5,020
Total shareholders' equity 6,283 7,154
-------------------------- ----- -----
NET INTEREST INCOME
Net interest income (fully
taxable equivalent basis) $840 $790
Fully taxable equivalent
adjustment 3 4
Net interest margin 3.23% 2.63%
------------------- ---- ----
CREDIT QUALITY
Nonaccrual loans
Reduced-rate loans
Total nonperforming loans
Foreclosed property
Total nonperforming assets
Loans past due 90 days or more
and still accruing
Gross loan charge-offs $342 $418
Loan recoveries 23 13
--- ---
Net loan charge-offs 319 405
Lending-related commitment
charge-offs - -
--- ---
Total net credit-related charge-
offs 319 405
Allowance for loan losses
Allowance for credit losses on
lending-related commitments
Total allowance for credit losses
Allowance for loan losses as a
percentage of total loans
Net loan charge-offs as a
percentage of average total
loans 1.56% 1.67%
Net credit-related charge-offs
as a percentage of average total
loans 1.56 1.67
Nonperforming assets as a
percentage of total loans and
foreclosed property
Allowance for loan losses as a
percentage of total
nonperforming loans
------------------------------
(a) See Reconciliation of Non-GAAP Financial Measures.
(b) June 30, 2010 ratios are estimated.
CONSOLIDATED BALANCE SHEETS (unaudited)
Comerica Incorporated and Subsidiaries
March
June 30, 31,
(in millions, except share data) 2010 2010
-------------------------------- ---- ----
(unaudited) (unaudited)
ASSETS
Cash and due from banks $816 $769
Federal funds sold and securities
purchased under agreements to resell - -
Interest-bearing deposits with banks 3,409 3,860
Other short-term investments 134 165
Investment securities available-for-
sale 7,188 7,346
-
Commercial loans 21,151 20,756
Real estate construction loans 2,774 3,202
Commercial mortgage loans 10,318 10,358
Residential mortgage loans 1,606 1,631
Consumer loans 2,443 2,472
Lease financing 1,084 1,120
International loans 1,226 1,306
------------------- ----- -----
Total loans 40,602 40,845
Less allowance for loan losses (967) (987)
------------------------------ ---- ----
Net loans 39,635 39,858
Premises and equipment 634 637
Customers' liability on acceptances
outstanding 24 21
Accrued income and other assets 4,045 4,450
------------------------------- ----- -----
Total assets $55,885 $57,106
------------ ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $15,769 $15,290
Money market and NOW deposits 16,062 16,009
Savings deposits 1,407 1,462
Customer certificates of deposit 5,893 5,979
Other time deposits 165 814
Foreign office time deposits 484 412
---------------------------- --- ---
Total interest-bearing deposits 24,011 24,676
------------------------------- ------ ------
Total deposits 39,780 39,966
Short-term borrowings 200 489
Acceptances outstanding 24 21
Accrued expenses and other liabilities 1,048 1,047
Medium- and long-term debt 9,041 9,915
-------------------------- ----- -----
Total liabilities 50,093 51,438
Fixed rate cumulative perpetual
preferred stock, series F,
no par value, $1,000 liquidation value
per share:
Authorized -2,250,000 shares at
12/31/09 and 6/30/09
Issued -2,250,000 shares at 12/31/09
and 6/30/09 - -
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued -203,878,110 shares at 6/30/10
and 3/31/10, 178,735,252 shares at
12/31/09
and 6/30/09 1,019 1,019
Capital surplus 1,467 1,468
Accumulated other comprehensive loss (240) (303)
Retained earnings 5,124 5,064
Less cost of common stock in treasury -
27,561,412 shares at 6/30/10,
27,575,283 shares
at 3/31/10, 27,555,623 shares at
12/31/09 and 27,620,471 shares at
6/30/09 (1,578) (1,580)
---------------------------------- ------ ------
Total shareholders' equity 5,792 5,668
-------------------------- ----- -----
Total liabilities and shareholders'
equity $55,885 $57,106
----------------------------------- ------- -------
December
31, June 30,
(in millions, except share data) 2009 2009
-------------------------------- ---- ----
(unaudited)
ASSETS
Cash and due from banks $774 $948
Federal funds sold and securities
purchased under agreements to resell - 650
Interest-bearing deposits with banks 4,843 3,542
Other short-term investments 138 129
Investment securities available-for-
sale 7,416 7,757
Commercial loans 21,690 24,922
Real estate construction loans 3,461 4,152
Commercial mortgage loans 10,457 10,400
Residential mortgage loans 1,651 1,759
Consumer loans 2,511 2,562
Lease financing 1,139 1,234
International loans 1,252 1,523
------------------- ----- -----
Total loans 42,161 46,552
Less allowance for loan losses (985) (880)
------------------------------ ---- ----
Net loans 41,176 45,672
Premises and equipment 644 667
Customers' liability on acceptances
outstanding 11 7
Accrued income and other assets 4,247 4,258
------------------------------- ----- -----
Total assets $59,249 $63,630
------------ ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $15,871 $13,558
Money market and NOW deposits 14,450 12,352
Savings deposits 1,342 1,348
Customer certificates of deposit 6,413 8,524
Other time deposits 1,047 4,593
Foreign office time deposits 542 616
---------------------------- --- ---
Total interest-bearing deposits 23,794 27,433
------------------------------- ------ ------
Total deposits 39,665 40,991
Short-term borrowings 462 490
Acceptances outstanding 11 7
Accrued expenses and other liabilities 1,022 1,478
Medium- and long-term debt 11,060 13,571
-------------------------- ------ ------
Total liabilities 52,220 56,537
Fixed rate cumulative perpetual
preferred stock, series F,
no par value, $1,000 liquidation value
per share:
Authorized -2,250,000 shares at
12/31/09 and 6/30/09
Issued -2,250,000 shares at 12/31/09
and 6/30/09 2,151 2,140
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued -203,878,110 shares at 6/30/10
and 3/31/10, 178,735,252 shares at
12/31/09
and 6/30/09 894 894
Capital surplus 740 731
Accumulated other comprehensive loss (336) (342)
Retained earnings 5,161 5,257
Less cost of common stock in treasury -
27,561,412 shares at 6/30/10,
27,575,283 shares
at 3/31/10, 27,555,623 shares at
12/31/09 and 27,620,471 shares at
6/30/09 (1,581) (1,587)
---------------------------------- ------ ------
Total shareholders' equity 7,029 7,093
-------------------------- ----- -----
Total liabilities and shareholders'
equity $59,249 $63,630
----------------------------------- ------- -------
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Three Months
Ended
June 30,
--------
(in millions, except per share data) 2010 2009
------------------------------------ ---- ----
INTEREST INCOME
Interest and fees on loans $412 $447
Interest on investment securities 61 103
Interest on short-term investments 3 2
---------------------------------- --- ---
Total interest income 476 552
INTEREST EXPENSE
Interest on deposits 29 106
Interest on short-term borrowings - -
Interest on medium- and long-term debt 25 44
-------------------------------------- --- ---
Total interest expense 54 150
---------------------- --- ---
Net interest income 422 402
Provision for loan losses 126 312
------------------------- --- ---
Net interest income after provision for loan
losses 296 90
NONINTEREST INCOME
Service charges on deposit accounts 52 55
Fiduciary income 38 41
Commercial lending fees 22 19
Letter of credit fees 19 16
Card fees 15 12
Foreign exchange income 10 11
Bank-owned life insurance 9 10
Brokerage fees 6 8
Net securities gains 1 113
Other noninterest income 22 13
------------------------ --- ---
Total noninterest income 194 298
NONINTEREST EXPENSES
Salaries 179 171
Employee benefits 45 53
----------------- --- ---
Total salaries and employee benefits 224 224
Net occupancy expense 40 38
Equipment expense 15 15
Outside processing fee expense 23 25
Software expense 22 20
FDIC insurance expense 16 45
Legal fees 9 10
Other real estate expense 5 9
Litigation and operational losses 2 2
Provision for credit losses on lending-related
commitments - (4)
Other noninterest expenses 41 45
-------------------------- --- ---
Total noninterest expenses 397 429
-------------------------- --- ---
Income (loss) from continuing operations before
income taxes 93 (41)
Provision (benefit) for income taxes 23 (59)
------------------------------------ --- ---
Income from continuing operations 70 18
Income from discontinued operations, net of tax - -
----------------------------------------------- --- ---
NET INCOME 70 18
Less:
Preferred stock dividends - 34
Income allocated to participating securities 1 -
Net income (loss) attributable to common shares $69 $(16)
----------------------------------------------- --- ----
Basic earnings per common share:
Income (loss) from continuing operations $0.40 $(0.11)
Net income (loss) 0.40 (0.11)
Diluted earnings per common share:
Income (loss) from continuing operations 0.39 (0.11)
Net income (loss) 0.39 (0.11)
Cash dividends declared on common stock 9 8
Cash dividends declared per common share 0.05 0.05
---------------------------------------- ---- ----
Six Months
Ended
June 30,
--------
(in millions, except per share data) 2010 2009
------------------------------------ ---- ----
INTEREST INCOME
Interest and fees on loans $824 $899
Interest on investment securities 122 212
Interest on short-term investments 6 4
---------------------------------- --- ---
Total interest income 952 1,115
INTEREST EXPENSE
Interest on deposits 64 231
Interest on short-term borrowings - 2
Interest on medium- and long-term debt 51 96
-------------------------------------- --- ---
Total interest expense 115 329
---------------------- --- ---
Net interest income 837 786
Provision for loan losses 301 515
------------------------- --- ---
Net interest income after provision for loan
losses 536 271
NONINTEREST INCOME
Service charges on deposit accounts 108 113
Fiduciary income 77 83
Commercial lending fees 44 37
Letter of credit fees 37 32
Card fees 28 24
Foreign exchange income 20 20
Bank-owned life insurance 17 18
Brokerage fees 12 17
Net securities gains 3 126
Other noninterest income 42 51
------------------------ --- ---
Total noninterest income 388 521
NONINTEREST EXPENSES
Salaries 348 342
Employee benefits 89 108
----------------- --- ---
Total salaries and employee benefits 437 450
Net occupancy expense 81 79
Equipment expense 32 31
Outside processing fee expense 46 50
Software expense 44 40
FDIC insurance expense 33 60
Legal fees 18 17
Other real estate expense 17 16
Litigation and operational losses 3 4
Provision for credit losses on lending-related
commitments 7 (5)
Other noninterest expenses 83 84
-------------------------- --- ---
Total noninterest expenses 801 826
-------------------------- --- ---
Income (loss) from continuing operations before
income taxes 123 (34)
Provision (benefit) for income taxes 18 (60)
------------------------------------ --- ---
Income from continuing operations 105 26
Income from discontinued operations, net of tax 17 1
----------------------------------------------- --- ---
NET INCOME 122 27
Less:
Preferred stock dividends 123 67
Income allocated to participating securities - -
Net income (loss) attributable to common shares $(1) $(40)
----------------------------------------------- --- ----
Basic earnings per common share:
Income (loss) from continuing operations $(0.11) $(0.28)
Net income (loss) $(0.01) (0.27)
Diluted earnings per common share:
Income (loss) from continuing operations (0.11) (0.28)
Net income (loss) (0.01) (0.27)
Cash dividends declared on common stock 18 15
Cash dividends declared per common share 0.10 0.10
---------------------------------------- ---- ----
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Second First Fourth
Quarter Quarter Quarter
(in millions, except per share data) 2010 2010 2009
------------------------------------ ---- ---- ----
INTEREST INCOME
Interest and fees on loans $412 $412 $424
Interest on investment securities 61 61 53
Interest on short-term investments 3 3 2
---------------------------------- --- --- ---
Total interest income 476 476 479
INTEREST EXPENSE
Interest on deposits 29 35 52
Interest on short-term borrowings - - -
Interest on medium- and long-term debt 25 26 31
-------------------------------------- --- --- ---
Total interest expense 54 61 83
---------------------- --- --- ---
Net interest income 422 415 396
Provision for loan losses 126 175 256
------------------------- --- --- ---
Net interest income after provision
for loan losses 296 240 140
NONINTEREST INCOME
Service charges on deposit accounts 52 56 56
Fiduciary income 38 39 38
Commercial lending fees 22 22 21
Letter of credit fees 19 18 19
Card fees 15 13 14
Foreign exchange income 10 10 11
Bank-owned life insurance 9 8 9
Brokerage fees 6 6 7
Net securities gains 1 2 10
Other noninterest income 22 20 29
------------------------ --- --- ---
Total noninterest income 194 194 214
NONINTEREST EXPENSES
Salaries 179 169 174
Employee benefits 45 44 51
----------------- --- --- ---
Total salaries and employee benefits 224 213 225
Net occupancy expense 40 41 43
Equipment expense 15 17 16
Outside processing fee expense 23 23 23
Software expense 22 22 23
FDIC insurance expense 16 17 15
Legal fees 9 9 12
Other real estate expense 5 12 22
Litigation and operational losses 2 1 3
Provision for credit losses on lending-related
commitments - 7 3
Other noninterest expenses 41 42 40
-------------------------- --- --- ---
Total noninterest expenses 397 404 425
-------------------------- --- --- ---
Income (loss) from continuing operations before
income taxes 93 30 (71)
Provision (benefit) for income taxes 23 (5) (42)
------------------------------------ --- --- ---
Income (loss) from continuing operations 70 35 (29)
Income from discontinued operations, net of tax - 17 -
----------------------------------------------- --- --- ---
NET INCOME (LOSS) 70 52 (29)
Less:
Preferred stock dividends - 123 33
Income allocated to participating securities 1 - -
Net income (loss) attributable to common shares $69 $(71) $(62)
----------------------------------------------- --- ---- ----
Basic earnings per common share:
Income (loss) from continuing operations $0.40 $(0.57) $(0.42)
Net income (loss) 0.40 (0.46) (0.42)
Diluted earnings per common share:
Income (loss) from continuing operations 0.39 (0.57) (0.42)
Net income (loss) 0.39 (0.46) (0.42)
Cash dividends declared on common stock 9 9 8
Cash dividends declared per common share 0.05 0.05 0.05
---------------------------------------- ---- ---- ----
Third Second
Quarter Quarter
(in millions, except per share data) 2009 2009
------------------------------------ ---- ----
INTEREST INCOME
Interest and fees on loans $444 $447
Interest on investment securities 64 103
Interest on short-term investments 3 2
---------------------------------- --- ---
Total interest income 511 552
INTEREST EXPENSE
Interest on deposits 89 106
Interest on short-term borrowings - -
Interest on medium- and long-term debt 37 44
-------------------------------------- --- ---
Total interest expense 126 150
---------------------- --- ---
Net interest income 385 402
Provision for loan losses 311 312
------------------------- --- ---
Net interest income after provision
for loan losses 74 90
NONINTEREST INCOME
Service charges on deposit accounts 59 55
Fiduciary income 40 41
Commercial lending fees 21 19
Letter of credit fees 18 16
Card fees 13 12
Foreign exchange income 10 11
Bank-owned life insurance 8 10
Brokerage fees 7 8
Net securities gains 107 113
Other noninterest income 32 13
------------------------ --- ---
Total noninterest income 315 298
NONINTEREST EXPENSES
Salaries 171 171
Employee benefits 51 53
----------------- --- ---
Total salaries and employee benefits 222 224
Net occupancy expense 40 38
Equipment expense 15 15
Outside processing fee expense 24 25
Software expense 21 20
FDIC insurance expense 15 45
Legal fees 8 10
Other real estate expense 10 9
Litigation and operational losses 3 2
Provision for credit losses on lending-related
commitments 2 (4)
Other noninterest expenses 39 45
-------------------------- --- ---
Total noninterest expenses 399 429
-------------------------- --- ---
Income (loss) from continuing operations before
income taxes (10) (41)
Provision (benefit) for income taxes (29) (59)
------------------------------------ --- ---
Income (loss) from continuing operations 19 18
Income from discontinued operations, net of tax - -
----------------------------------------------- --- ---
NET INCOME (LOSS) 19 18
Less:
Preferred stock dividends 34 34
Income allocated to participating securities 1 -
Net income (loss) attributable to common shares $(16) $(16)
----------------------------------------------- ---- ----
Basic earnings per common share:
Income (loss) from continuing operations $(0.10) $(0.11)
Net income (loss) (0.10) (0.11)
Diluted earnings per common share:
Income (loss) from continuing operations (0.10) (0.11)
Net income (loss) (0.10) (0.11)
Cash dividends declared on common stock 7 8
Cash dividends declared per common share 0.05 0.05
---------------------------------------- ---- ----
Second Quarter
2010 Compared
To:
--------------
First Quarter
2010
(in millions, except per share data) Amount Percent
------------------------------------ ------ -------
INTEREST INCOME
Interest and fees on loans $- - %
Interest on investment securities - (1)
Interest on short-term investments - (6)
---------------------------------- --- ---
Total interest income - -
INTEREST EXPENSE
Interest on deposits (6) (19)
Interest on short-term borrowings - N/M
Interest on medium- and long-term
debt (1) (3)
--------------------------------- --- ---
Total interest expense (7) (12)
---------------------- --- ---
Net interest income 7 2
Provision for loan losses (49) (27)
------------------------- --- ---
Net interest income after provision
for loan losses 56 23
NONINTEREST INCOME
Service charges on deposit accounts (4) (6)
Fiduciary income (1) (1)
Commercial lending fees - 2
Letter of credit fees 1 1
Card fees 2 11
Foreign exchange income - 3
Bank-owned life insurance 1 -
Brokerage fees - 8
Net securities gains (1) (37)
Other noninterest income 2 11
------------------------ --- ---
Total noninterest income - -
NONINTEREST EXPENSES
Salaries 10 6
Employee benefits 1 2
----------------- --- ---
Total salaries and employee benefits 11 5
Net occupancy expense (1) (7)
Equipment expense (2) (7)
Outside processing fee expense - 2
Software expense - (2)
FDIC insurance expense (1) (1)
Legal fees - -
Other real estate expense (7) (57)
Litigation and operational losses 1 23
Provision for credit losses on
lending-related commitments (7) (98)
Other noninterest expenses (1) (2)
-------------------------- --- ---
Total noninterest expenses (7) (2)
-------------------------- --- ---
Income (loss) from continuing
operations before income taxes 63 N/M
Provision (benefit) for income taxes 28 N/M
------------------------------------ ---
Income (loss) from continuing
operations 35 N/M
Income from discontinued operations,
net of tax (17) N/M
------------------------------------ --- ---
NET INCOME (LOSS) 18 34
Less:
Preferred stock dividends (123) N/M
Income allocated to participating
securities 1 N/M
Net income (loss) attributable to
common shares $140 N/M %
--------------------------------- ---- --- ---
Basic earnings per common share:
Income (loss) from continuing
operations $0.97 N/M %
Net income (loss) 0.86 N/M
Diluted earnings per common share:
Income (loss) from continuing
operations 0.96 N/M
Net income (loss) 0.85 N/M
Cash dividends declared on common
stock - (2)
Cash dividends declared per common
share - -
---------------------------------- --- ---
Second
Quarter 2009
(in millions, except per share
data) Amount Percent
------------------------------ ------ -------
INTEREST INCOME
Interest and fees on loans $(35) (8)%
Interest on investment securities (42) (41)
Interest on short-term investments 1 36
---------------------------------- --- ---
Total interest income (76) (14)
INTEREST EXPENSE
Interest on deposits (77) (73)
Interest on short-term borrowings - (67)
Interest on medium- and long-
term debt (19) (44)
----------------------------- --- ---
Total interest expense (96) (64)
---------------------- --- ---
Net interest income 20 5
Provision for loan losses (186) (59)
------------------------- ---- ---
Net interest income after provision
for loan losses 206 N/M
NONINTEREST INCOME
Service charges on deposit
accounts (3) (6)
Fiduciary income (3) (6)
Commercial lending fees 3 19
Letter of credit fees 3 13
Card fees 3 18
Foreign exchange income (1) (5)
Bank-owned life insurance (1) (10)
Brokerage fees (2) (26)
Net securities gains (112) (99)
Other noninterest income 9 67
------------------------ --- ---
Total noninterest income (104) (35)
NONINTEREST EXPENSES
Salaries 8 5
Employee benefits (8) (15)
----------------- --- ---
Total salaries and employee
benefits - -
Net occupancy expense 2 2
Equipment expense - -
Outside processing fee expense (2) (8)
Software expense 2 5
FDIC insurance expense (29) (63)
Legal fees (1) (8)
Other real estate expense (4) (48)
Litigation and operational losses - (37)
Provision for credit losses on
lending-related commitments 4 N/M
Other noninterest expenses (4) (4)
-------------------------- --- ---
Total noninterest expenses (32) (7)
-------------------------- --- ---
Income (loss) from continuing
operations before income taxes 134 N/M
Provision (benefit) for income
taxes 82 N/M
------------------------------ --- ---
Income (loss) from continuing
operations 52 N/M
Income from discontinued
operations, net of tax - N/M
------------------------ --- ---
NET INCOME (LOSS) 52 N/M
Less:
Preferred stock dividends (34) N/M
Income allocated to participating
securities 1 N/M
Net income (loss) attributable to
common shares $85 N/M %
--------------------------------- --- ---
Basic earnings per common share:
Income (loss) from continuing
operations $0.51 N/M %
Net income (loss) 0.51 N/M
Diluted earnings per common share:
Income (loss) from continuing
operations 0.50 N/M
Net income (loss) 0.50 N/M
Cash dividends declared on common
stock 1 15
Cash dividends declared per common
share - -
---------------------------------- --- ---
N/M - Not meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
2010
----
2nd 1st
(in millions) Qtr Qtr
---- ----
Balance at beginning of period $987 $985
Loan charge-offs:
Commercial 65 49
Real estate construction:
Commercial Real Estate business
line (a) 30 71
Other business lines (b) - 3
Total real estate construction 30 74
Commercial mortgage:
Commercial Real Estate business
line (a) 12 16
Other business lines (b) 36 28
Total commercial mortgage 48 44
Residential mortgage 5 2
Consumer 9 8
Lease financing 1 -
International - 7
------------- --- ---
Total loan charge-offs 158 184
Recoveries on loans previously
charged-off:
Commercial 4 7
Real estate construction 6 1
Commercial mortgage 1 3
Residential mortgage - -
Consumer 1 -
Lease financing - -
International - -
Total recoveries 12 11
Net loan charge-offs 146 173
Provision for loan losses 126 175
Foreign currency translation
adjustment - -
Balance at end of period $967 $987
------------------------ ---- ----
Allowance for loan losses as a
percentage of total loans 2.38% 2.42%
Net loan charge-offs as a
percentage of average total loans 1.44 1.68
Net credit-related charge-offs as
a percentage of average total
loans 1.44 1.68
--------------------------------- ---- ----
2009
----
4th 3rd 2nd
(in millions) Qtr Qtr Qtr
---- ---- ----
Balance at beginning of period $953 $880 $816
Loan charge-offs:
Commercial 113 113 88
Real estate construction:
Commercial Real Estate business
line (a) 33 63 81
Other business lines (b) - 1 -
Total real estate construction 33 64 81
Commercial mortgage:
Commercial Real Estate business
line (a) 27 24 23
Other business lines (b) 25 15 23
Total commercial mortgage 52 39 46
Residential mortgage 6 11 2
Consumer 9 7 12
Lease financing 6 6 24
International 13 5 4
------------- --- --- ---
Total loan charge-offs 232 245 257
Recoveries on loans previously
charged-off:
Commercial 7 3 5
Real estate construction - 1 -
Commercial mortgage 1 - 2
Residential mortgage - - -
Consumer - 1 -
Lease financing - - 1
International - 1 1
Total recoveries 8 6 9
Net loan charge-offs 224 239 248
Provision for loan losses 256 311 312
Foreign currency translation
adjustment - 1 -
Balance at end of period $985 $953 $880
------------------------ ---- ---- ----
Allowance for loan losses as a
percentage of total loans 2.34% 2.19% 1.89%
Net loan charge-offs as a
percentage of average total loans 2.09 2.14 2.08
Net credit-related charge-offs as
a percentage of average total
loans 2.10 2.14 2.08
--------------------------------- ---- ---- ----
(a) Primarily charge-offs of loans to real estate investors and
developers.
(b) Primarily charge-offs of loans secured by owner-occupied real estate.
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED
COMMITMENTS (unaudited)
Comerica Incorporated and Subsidiaries
2010
----
1st
(in millions) 2nd Qtr Qtr
------- ----
Balance at beginning of period $44 $37
Less: Charge-offs on lending-related commitments (a) - -
Add: Provision for credit losses on lending-related
commitments - 7
Balance at end of period $44 $44
------------------------ --- ---
Unfunded lending-related commitments sold $2 $-
----------------------------------------- --- ---
2009
----
4th 3rd
(in millions) Qtr Qtr 2nd Qtr
---- ---- -------
Balance at beginning of period $35 $33 $37
Less: Charge-offs on lending-related commitments (a) 1 - -
Add: Provision for credit losses on lending-related
commitments 3 2 (4)
Balance at end of period $37 $35 $33
------------------------ --- --- ---
Unfunded lending-related commitments sold $3 $1 $-
----------------------------------------- --- --- ---
(a) Charge-offs result from the sale of unfunded lending-related
commitments.
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2010
----
(in millions) 2nd Qtr 1st Qtr
------------- ------- -------
SUMMARY OF NONPERFORMING ASSETS AND PAST
DUE LOANS
Nonaccrual loans:
Commercial $239 $209
Real estate construction:
Commercial Real Estate business line (a) 385 516
Other business lines (b) 4 3
Total real estate construction 389 519
Commercial mortgage:
Commercial Real Estate business line (a) 135 105
Other business lines (b) 257 226
Total commercial mortgage 392 331
Residential mortgage 53 58
Consumer 11 13
Lease financing 11 11
International 3 4
Total nonaccrual loans 1,098 1,145
Reduced-rate loans 23 17
Total nonperforming loans 1,121 1,162
Foreclosed property 93 89
Total nonperforming assets $1,214 $1,251
-------------------------- ------ ------
Nonperforming loans as a percentage of
total loans 2.76% 2.85%
Nonperforming assets as a percentage of
total loans
and foreclosed property 2.98 3.06
Allowance for loan losses as a percentage
of total nonperforming loans 86 85
Loans past due 90 days or more and still
accruing $115 $83
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of period $1,145 $1,165
Loans transferred to nonaccrual (c) 199 245
Nonaccrual business loan gross charge-offs
(d) (143) (174)
Loans transferred to accrual status (c) - -
Nonaccrual business loans sold (e) (47) (44)
Payments/Other (f) (56) (47)
Nonaccrual loans at end of period $1,098 $1,145
--------------------------------- ------ ------
(a) Primarily loans to real estate
investors and developers.
(b) Primarily loans secured by owner-
occupied real estate.
(c) Based on an analysis of nonaccrual
loans with book balances greater than $2
million.
(d) Analysis of gross loan charge-offs:
Nonaccrual business loans $143 $174
Performing watch list loans 1 -
Consumer and residential mortgage loans 14 10
--- ---
Total gross loan charge-offs $158 $184
---- ----
(e) Analysis of loans sold:
Nonaccrual business loans $47 $44
Performing watch list loans 15 12
--- ---
Total loans sold $62 $56
---------------- --- ---
(f) Includes net changes related to nonaccrual loans with balances
less than $2 million, payments on nonaccrual loans with book
balances greater than $2 million and transfers of nonaccrual loans
to foreclosed property. Excludes business loan gross charge-offs
and business nonaccrual loans sold.
2009
----
(in millions) 4th Qtr 3rd Qtr 2nd Qtr
------------- ------- ------- -------
SUMMARY OF NONPERFORMING ASSETS
AND PAST DUE LOANS
Nonaccrual loans:
Commercial $238 $290 $327
Real estate construction:
Commercial Real Estate business
line (a) 507 542 472
Other business lines (b) 4 4 4
Total real estate construction 511 546 476
Commercial mortgage:
Commercial Real Estate business
line (a) 127 137 134
Other business lines (b) 192 161 175
Total commercial mortgage 319 298 309
Residential mortgage 50 27 7
Consumer 12 8 7
Lease financing 13 18 -
International 22 7 4
Total nonaccrual loans 1,165 1,194 1,130
Reduced-rate loans 16 2 -
Total nonperforming loans 1,181 1,196 1,130
Foreclosed property 111 109 100
Total nonperforming assets $1,292 $1,305 $1,230
-------------------------- ------ ------ ------
Nonperforming loans as a
percentage of total loans 2.80% 2.74% 2.43%
Nonperforming assets as a
percentage of total loans
and foreclosed property 3.06 2.99 2.64
Allowance for loan losses as a
percentage
of total nonperforming loans 83 80 78
Loans past due 90 days or more and
still accruing $101 $161 $210
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of
period $1,194 $1,130 $982
Loans transferred to nonaccrual
(c) 266 361 419
Nonaccrual business loan gross
charge-offs (d) (217) (226) (242)
Loans transferred to accrual
status (c) - (4) -
Nonaccrual business loans sold (e) (10) (41) (10)
Payments/Other (f) (68) (26) (19)
Nonaccrual loans at end of period $1,165 $1,194 $1,130
--------------------------------- ------ ------ ------
(a) Primarily loans to real estate
investors and developers.
(b) Primarily loans secured by
owner-occupied real estate.
(c) Based on an analysis of
nonaccrual loans with book
balances greater than $2 million.
(d) Analysis of gross loan charge-
offs:
Nonaccrual business loans $217 $226 $242
Performing watch list loans - 1 1
Consumer and residential mortgage
loans 15 18 14
--- --- ---
Total gross loan charge-offs $232 $245 $257
---- ---- ----
(e) Analysis of loans sold:
Nonaccrual business loans $10 $41 $10
Performing watch list loans 1 24 6
--- --- ---
Total loans sold $11 $65 $16
---------------- --- --- ---
(f) Includes net changes related to nonaccrual loans with balances
less than $2 million, payments on nonaccrual loans with book
balances greater than $2 million and transfers of nonaccrual loans
to foreclosed property. Excludes business loan gross charge-offs
and business nonaccrual loans sold.
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)
Comerica Incorporated and Subsidiaries
Six Months Ended
----------------
June 30, 2010
-------------
Average Average
(dollar amounts in millions) Balance Interest Rate
---------------------------- ------- -------- ----
Commercial loans $20,961 $411 3.95%
Real estate construction loans 3,185 48 3.03
Commercial mortgage loans 10,380 216 4.19
Residential mortgage loans 1,620 44 5.43
Consumer loans 2,464 44 3.57
Lease financing 1,119 21 3.73
International loans 1,261 25 4.00
Business loan swap income - 17 -
--- --- ---
Total loans 40,990 826 4.06
Auction-rate securities available-
for-sale 847 5 1.06
Other investment securities available-
for-sale 6,475 118 3.72
----- --- ----
Total investment securities available-
for-sale 7,322 123 3.40
Federal funds sold and securities
purchased under agreements to resell 1 - 1.17
Interest-bearing deposits with banks
(a) 3,944 5 0.25
Other short-term investments 128 1 1.70
--- --- ----
Total earning assets 52,385 955 3.67
Cash and due from banks 792
Allowance for loan losses (1,048)
Accrued income and other assets 4,756
-----
Total assets $56,885
-------
Money market and NOW deposits $15,709 25 0.32
Savings deposits 1,407 - 0.07
Customer certificates of deposit 6,049 30 0.97
----- --- ----
Total interest-bearing core deposits 23,165 55 0.48
Other time deposits 584 9 3.18
Foreign office time deposits 453 - 0.22
--- --- ----
Total interest-bearing deposits 24,202 64 0.54
Short-term borrowings 241 - 0.19
Medium- and long-term debt 10,169 51 0.99
------ --- ----
Total interest-bearing sources 34,612 115 0.67
--- ----
Noninterest-bearing deposits 14,923
Accrued expenses and other liabilities 1,067
Total shareholders' equity 6,283
-----
Total liabilities and shareholders'
equity $56,885
-------
Net interest income/rate spread (FTE) $840 3.00
----
FTE adjustment $3
---
Impact of net noninterest-bearing
sources of funds 0.23
Net interest margin (as a percentage
of average earning assets) (FTE) (a) 3.23%
------------------------------------- ----
Six Months Ended
----------------
June 30, 2009
-------------
Average Average
(dollar amounts in millions) Balance Interest Rate
---------------------------- ------- -------- ----
Commercial loans $26,413 $453 3.47%
Real estate construction loans 4,417 65 2.97
Commercial mortgage loans 10,454 217 4.19
Residential mortgage loans 1,821 52 5.70
Consumer loans 2,573 48 3.72
Lease financing 1,263 17 2.66
International loans 1,655 32 3.88
Business loan swap income - 17 -
--- --- ---
Total loans 48,596 901 3.74
Auction-rate securities available-
for-sale 1,098 9 1.60
Other investment securities available-
for-sale 8,858 205 4.76
----- --- ----
Total investment securities available-
for-sale 9,956 214 4.40
Federal funds sold and securities
purchased under agreements to resell 35 - 0.32
Interest-bearing deposits with banks
(a) 1,862 2 0.26
Other short-term investments 182 2 1.78
--- --- ----
Total earning assets 60,631 1,119 3.73
Cash and due from banks 915
Allowance for loan losses (872)
Accrued income and other assets 4,816
-----
Total assets $65,490
-------
Money market and NOW deposits $12,319 34 0.56
Savings deposits 1,316 1 0.14
Customer certificates of deposit 8,788 113 2.60
----- --- ----
Total interest-bearing core deposits 22,423 148 1.33
Other time deposits 5,699 82 2.89
Foreign office time deposits 702 1 0.33
--- --- ----
Total interest-bearing deposits 28,824 231 1.62
Short-term borrowings 1,682 2 0.26
Medium- and long-term debt 14,461 96 1.33
------ --- ----
Total interest-bearing sources 44,967 329 1.48
--- ----
Noninterest-bearing deposits 11,958
Accrued expenses and other liabilities 1,411
Total shareholders' equity 7,154
-----
Total liabilities and shareholders'
equity $65,490
-------
Net interest income/rate spread (FTE) $790 2.25
----
FTE adjustment $4
---
Impact of net noninterest-bearing
sources of funds 0.38
Net interest margin (as a percentage
of average earning assets) (FTE) (a) 2.63%
------------------------------------- ----
(a) Excess liquidity, represented by average balances deposited with
the Federal Reserve Bank, reduced the net interest margin by 24
basis points and 7 basis points year-to-date in 2010 and 2009,
respectively. Excluding excess liquidity, the net interest margin
would have been 3.47% in 2010 and 2.70% in 2009. See Reconciliation
of Non-GAAP Financial Measures.
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
------------------
June 30, 2010
-------------
Average Average
(dollar amounts in millions) Balance Interest Rate
---------------------------- ------- -------- ----
Commercial loans $20,910 $206 3.95%
Real estate construction loans 2,987 23 3.13
Commercial mortgage loans 10,372 109 4.20
Residential mortgage loans 1,607 22 5.44
Consumer loans 2,448 22 3.56
Lease financing 1,108 10 3.72
International loans 1,240 13 4.07
Business loan swap income - 9 -
--- --- ---
Total loans 40,672 414 4.07
Auction-rate securities available-
for-sale 816 3 1.19
Other investment securities available-
for-sale 6,446 58 3.71
----- --- ----
Total investment securities available-
for-sale 7,262 61 3.41
Federal funds sold and securities
purchased under agreements to resell 1 - 1.35
Interest-bearing deposits with banks
(a) 3,768 3 0.25
Other short-term investments 132 - 1.65
--- --- ----
Total earning assets 51,835 478 3.70
Cash and due from banks 795
Allowance for loan losses (1,037)
Accrued income and other assets 4,665
-----
Total assets $56,258
-------
Money market and NOW deposits $16,354 13 0.32
Savings deposits 1,429 - 0.07
Customer certificates of deposit 5,927 15 0.92
----- --- ----
Total interest-bearing core deposits 23,710 28 0.45
Other time deposits 295 1 2.14
Foreign office time deposits 448 - 0.23
--- --- ----
Total interest-bearing deposits 24,453 29 0.47
Short-term borrowings 248 - 0.27
Medium- and long-term debt 9,571 25 1.04
----- --- ----
Total interest-bearing sources 34,272 54 0.63
--- ----
Noninterest-bearing deposits 15,218
Accrued expenses and other liabilities 1,060
Total shareholders' equity 5,708
-----
Total liabilities and shareholders'
equity $56,258
-------
Net interest income/rate spread (FTE) $424 3.07
----
FTE adjustment $2
---
Impact of net noninterest-bearing
sources of funds 0.21
Net interest margin (as a percentage
of average earning assets) (FTE) (a) 3.28%
------------------------------------- ----
Three Months Ended
------------------
March 31, 2010
--------------
Average Average
(dollar amounts in millions) Balance Interest Rate
---------------------------- ------- -------- ----
Commercial loans $21,015 $205 3.96%
Real estate construction loans 3,386 25 2.95
Commercial mortgage loans 10,387 107 4.18
Residential mortgage loans 1,632 22 5.41
Consumer loans 2,481 22 3.58
Lease financing 1,130 11 3.75
International loans 1,282 12 3.93
Business loan swap income - 8 -
--- --- ---
Total loans 41,313 412 4.04
Auction-rate securities available-
for-sale 879 2 0.93
Other investment securities available-
for-sale 6,503 60 3.72
----- --- ----
Total investment securities available-
for-sale 7,382 62 3.38
Federal funds sold and securities
purchased under agreements to resell - - -
Interest-bearing deposits with banks
(a) 4,122 2 0.25
Other short-term investments 124 1 1.75
--- --- ----
Total earning assets 52,941 477 3.65
Cash and due from banks 788
Allowance for loan losses (1,058)
Accrued income and other assets 4,848
-----
Total assets $57,519
-------
Money market and NOW deposits $15,055 12 0.32
Savings deposits 1,384 - 0.07
Customer certificates of deposit 6,173 15 1.02
----- --- ----
Total interest-bearing core deposits 22,612 27 0.50
Other time deposits 877 8 3.53
Foreign office time deposits 458 - 0.21
--- --- ----
Total interest-bearing deposits 23,947 35 0.60
Short-term borrowings 234 - 0.11
Medium- and long-term debt 10,775 26 0.95
------ --- ----
Total interest-bearing sources 34,956 61 0.71
--- ----
Noninterest-bearing deposits 14,624
Accrued expenses and other liabilities 1,075
Total shareholders' equity 6,864
-----
Total liabilities and shareholders'
equity $57,519
-------
Net interest income/rate spread (FTE) $416 2.94
----
FTE adjustment $1
---
Impact of net noninterest-bearing
sources of funds 0.24
Net interest margin (as a percentage
of average earning assets) (FTE) (a) 3.18%
------------------------------------- ----
Three Months Ended
------------------
June 30, 2009
-------------
Average Average
(dollar amounts in millions) Balance Interest Rate
---------------------------- ------- -------- ----
Commercial loans $25,657 $225 3.55%
Real estate construction loans 4,325 32 2.95
Commercial mortgage loans 10,476 108 4.17
Residential mortgage loans 1,795 26 5.74
Consumer loans 2,572 24 3.65
Lease financing 1,227 8 2.48
International loans 1,596 16 3.90
Business loan swap income - 9 -
--- --- ---
Total loans 47,648 448 3.77
Auction-rate securities available-
for-sale 1,052 4 1.48
Other investment securities available-
for-sale 8,734 100 4.70
----- --- ----
Total investment securities available-
for-sale 9,786 104 4.35
Federal funds sold and securities
purchased under agreements to resell 13 - 0.33
Interest-bearing deposits with banks
(a) 1,876 1 0.28
Other short-term investments 199 1 1.88
--- --- ----
Total earning assets 59,522 554 3.75
Cash and due from banks 881
Allowance for loan losses (913)
Accrued income and other assets 4,766
-----
Total assets $64,256
-------
Money market and NOW deposits $12,304 15 0.49
Savings deposits 1,354 - 0.11
Customer certificates of deposit 8,721 55 2.53
----- --- ----
Total interest-bearing core deposits 22,379 70 1.26
Other time deposits 5,124 36 2.75
Foreign office time deposits 734 - 0.26
--- --- ----
Total interest-bearing deposits 28,237 106 1.50
Short-term borrowings 1,010 - 0.20
Medium- and long-term debt 14,002 44 1.27
------ --- ----
Total interest-bearing sources 43,249 150 1.40
--- ----
Noninterest-bearing deposits 12,546
Accrued expenses and other liabilities 1,308
Total shareholders' equity 7,153
-----
Total liabilities and shareholders'
equity $64,256
-------
Net interest income/rate spread (FTE) $404 2.35
----
FTE adjustment $2
---
Impact of net noninterest-bearing
sources of funds 0.38
Net interest margin (as a percentage
of average earning assets) (FTE) (a) 2.73%
------------------------------------- ----
(a) Excess liquidity, represented by average balances deposited with
the Federal Reserve Bank, reduced the net interest margin by 23
basis points and 24 basis points in the second and first quarters of
2010, respectively, and by 8 basis points in the second quarter of
2009. Excluding excess liquidity, the net interest margin would
have been 3.51%, 3.42% and 2.81% in each respective period. See
Reconciliation of Non-GAAP Financial Measures.
CONSOLIDATED STATISTICAL DATA (unaudited)
Comerica Incorporated and Subsidiaries
December
June 30, March 31, 31,
(in millions, except
per share data) 2010 2010 2009
-------------------- ---- ---- ----
Commercial loans:
Floor plan $1,586 $1,351 $1,367
Other 19,565 19,405 20,323
----- ------ ------ ------
Total commercial loans 21,151 20,756 21,690
Real estate
construction loans:
Commercial Real Estate
business line (a) 2,345 2,741 2,988
Other business lines
(b) 429 461 473
-------------------- --- --- ---
Total real estate
construction loans 2,774 3,202 3,461
Commercial mortgage
loans:
Commercial Real Estate
business line (a) 1,971 1,880 1,824
Other business lines
(b) 8,347 8,478 8,633
-------------------- ----- ----- -----
Total commercial mortgage
loans 10,318 10,358 10,457
Residential mortgage
loans 1,606 1,631 1,651
Consumer loans:
Home equity 1,761 1,782 1,817
Other consumer 682 690 694
-------------- --- --- ---
Total consumer loans 2,443 2,472 2,511
Lease financing 1,084 1,120 1,139
International loans 1,226 1,306 1,252
------------------- ----- ----- -----
Total loans $40,602 $40,845 $42,161
----------- ------- ------- -------
Goodwill $150 $150 $150
Loan servicing rights 6 6 7
Tier 1 common capital
ratio (c) (d) 9.79% 9.57% 8.18%
Tier 1 risk-based
capital ratio (d) 10.61 10.38 12.46
Total risk-based
capital ratio (d) 15.00 14.91 16.93
Leverage ratio (d) 11.35 11.00 13.25
Tangible common equity
ratio (c) 10.11 9.68 7.99
Book value per common
share $32.85 $32.15 $32.27
Market value per share
for the quarter:
High 45.85 39.36 32.30
Low 35.44 29.68 26.49
Close 36.83 38.04 29.57
Quarterly ratios:
Return on average
common shareholders'
equity 4.89% (5.61)% (5.10)%
Return on average
assets 0.50 0.36 (0.19)
Efficiency ratio 64.47 66.45 70.68
Number of banking
centers 437 449 447
Number of employees -
full time equivalent 9,107 9,215 9,330
September
30, June 30,
(in millions, except per share
data) 2009 2009
------------------------------ ---- ----
Commercial loans:
Floor plan $857 $1,492
Other 21,689 23,430
----- ------ ------
Total commercial loans 22,546 24,922
Real estate construction
loans:
Commercial Real Estate
business line (a) 3,328 3,500
Other business lines (b) 542 652
------------------------ --- ---
Total real estate
construction loans 3,870 4,152
Commercial mortgage loans:
Commercial Real Estate
business line (a) 1,678 1,728
Other business lines (b) 8,702 8,672
------------------------ ----- -----
Total commercial mortgage
loans 10,380 10,400
Residential mortgage loans 1,679 1,759
Consumer loans:
Home equity 1,818 1,814
Other consumer 726 748
-------------- --- ---
Total consumer loans 2,544 2,562
Lease financing 1,197 1,234
International loans 1,355 1,523
------------------- ----- -----
Total loans $43,571 $46,552
----------- ------- -------
Goodwill $150 $150
Loan servicing rights 8 9
Tier 1 common capital ratio
(c) (d) 8.04% 7.66%
Tier 1 risk-based capital
ratio (d) 12.21 11.58
Total risk-based capital
ratio (d) 16.79 15.97
Leverage ratio (d) 12.46 12.11
Tangible common equity ratio
(c) 7.96 7.55
Book value per common share $32.36 $32.78
Market value per share for the
quarter:
High 31.83 26.47
Low 19.94 16.03
Close 29.67 21.15
Quarterly ratios:
Return on average common
shareholders' equity (1.27)% (1.25)%
Return on average assets 0.12 0.11
Efficiency ratio 67.14 72.75
Number of banking centers 444 441
Number of employees -full
time equivalent 9,384 9,497
(a) Primarily loans to real estate investors and developers.
(b) Primarily loans secured by owner-occupied real estate.
(c) See Reconciliation of Non-GAAP Financial Measures.
(d) June 30, 2010 ratios are estimated.
PARENT COMPANY ONLY BALANCE SHEETS (unaudited)
Comerica Incorporated
June 30, December 31, June 30,
(in millions, except share
data) 2010 2009 2009
-------------------------- ---- ---- ----
ASSETS
Cash and due from subsidiary
bank $15 $5 $5
Short-term investments with
subsidiary bank 659 2,150 2,223
Other short-term investments 83 86 80
Investment in subsidiaries,
principally banks 5,961 5,710 5,700
Premises and equipment 4 4 4
Other assets 190 186 190
Total assets $6,912 $8,141 $8,202
------------ ------ ------ ------
LIABILITIES AND SHAREHOLDERS'
EQUITY
Medium- and long-term debt $999 $986 $985
Other liabilities 121 126 124
Total liabilities 1,120 1,112 1,109
Fixed rate cumulative
perpetual preferred stock,
series F, no par value,
$1,000 liquidation
preference per share: - 2,151 2,140
Authorized -2,250,000 shares
at 12/31/09 and 6/30/09
Issued -2,250,000 shares
at 12/31/09 and 6/30/09
Common stock - $5 par value: 1,019 894 894
Authorized -325,000,000
shares Issued -203,878,110
shares at 6/30/10 and
178,735,252 shares at
12/31/09 and 6/30/09
Capital surplus 1,467 740 731
Accumulated other
comprehensive loss (240) (336) (342)
Retained earnings 5,124 5,161 5,257
Less cost of common stock in
treasury - 27,561,412
shares at 6/30/10,
27,555,623 shares at
12/31/09 and 27,620,471
shares at 6/30/09 (1,578) (1,581) (1,587)
Total shareholders' equity 5,792 7,029 7,093
Total liabilities and
shareholders' equity $6,912 $8,141 $8,202
--------------------- ------ ------ ------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Comerica Incorporated and Subsidiaries
Common Stock
------------
Preferred Shares Capital
(in millions, except per share
data) Stock Outstanding Amount Surplus
------------------------------ ----- ----------- ------ -------
BALANCE AT DECEMBER 31, 2008 $2,129 150.5 $894 $722
Net income - - - -
Other comprehensive loss, net
of tax - - - -
Total comprehensive loss
Cash dividends declared on
preferred stock - - - -
Cash dividends declared on
common stock ($0.10 per share) - - - -
Purchase of common stock - (0.1) - -
Accretion of discount on
preferred stock 11 - - -
Net issuance of common stock
under employee stock plans - 0.7 - (14)
Share-based compensation - - - 18
Other - - - 5
----- --- --- --- ---
BALANCE AT JUNE 30, 2009 $2,140 151.1 $894 $731
------------------------ ------ ----- ---- ----
BALANCE AT DECEMBER 31, 2009 $2,151 151.2 $894 $740
Net income - - - -
Other comprehensive income, net
of tax - - - -
Total comprehensive income
Cash dividends declared on
preferred stock - - - -
Cash dividends declared on
common stock ($0.10 per share) - - - -
Purchase of common stock - - - -
Issuance of common stock - 25.1 125 724
Redemption of preferred stock (2,250) - - -
Redemption discount accretion
on preferred stock 94 - - -
Accretion of discount on
preferred stock 5 - - -
Net issuance of common stock
under employee stock plans - - - (5)
Share-based compensation - - - 11
Other - - - (3)
BALANCE AT JUNE 30, 2010 $- 176.3 $1,019 $1,467
------------------------ --- ----- ------ ------
Accumulated
Other Total
Comprehensive Retained Treasury Shareholders'
(in millions, except
per share data) Loss Earnings Stock Equity
------------------------ ---- -------- ----- ------
BALANCE AT DECEMBER
31, 2008 $(309) $5,345 $(1,629) $7,152
Net income - 27 - 27
Other comprehensive loss,
net of tax (33) - - (33)
---
Total comprehensive loss (6)
Cash dividends declared
on preferred stock - (57) - (57)
Cash dividends declared
on common stock
($0.10 per share) - (15) - (15)
Purchase of common stock - - (1) (1)
Accretion of discount on
preferred stock - (11) - -
Net issuance of common
stock under employee
stock plans - (32) 43 (3)
Share-based compensation - - - 18
Other - - - 5
----- --- --- ---
BALANCE AT JUNE 30, 2009 $(342) $5,257 $(1,587) $7,093
------------------------ ----- ------ ------- ------
BALANCE AT DECEMBER
31, 2009 $(336) $5,161 $(1,581) $7,029
Net income - 122 - 122
Other comprehensive
income, net of tax 96 - - 96
---
Total comprehensive income 218
Cash dividends declared
on preferred stock - (38) - (38)
Cash dividends declared
on common stock
($0.10 per share) - (18) - (18)
Purchase of common stock - - (4) (4)
Issuance of common stock - - - 849
Redemption of preferred
stock - - - (2,250)
Redemption discount
accretion on preferred
stock - (94) - -
Accretion of discount
on preferred stock - (5) - -
Net issuance of common
stock under employee
stock plans - (4) 6 (3)
Share-based compensation - - - 11
Other - - 1 (2)
BALANCE AT JUNE 30, 2010 $(240) $5,124 $(1,578) $5,792
------------------------ ----- ------ ------- ------
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
Wealth &
(dollar amounts in millions) Business Retail Institutional
Three Months Ended June 30,
2010 Bank Bank Management
--------------------------- ---- ---- ----------
Earnings summary:
Net interest income (expense)
(FTE) $351 $134 $45
Provision for loan losses 83 20 19
Noninterest income 78 42 61
Noninterest expenses 157 160 79
Provision (benefit) for income
taxes (FTE) 54 (1) 3
Income from discontinued
operations,
net of tax - - -
Net income (loss) $135 $(3) $5
---- --- ---
Net credit-related charge-offs $113 $22 $11
Selected average balances:
Assets $30,609 $5,937 $4,903
Loans 30,353 5,446 4,840
Deposits 19,069 16,930 2,924
Liabilities 19,040 16,895 2,909
Attributed equity 3,110 646 408
Statistical data:
Return on average assets (a) 1.75% (0.06)% 0.43%
Return on average attributed
equity 17.25 (1.66) 5.19
Net interest margin (b) 4.63 3.17 3.73
Efficiency ratio 36.86 89.14 77.57
(dollar amounts in millions)
Three Months Ended June 30,
2010 Finance Other Total
--------------------------- ------- ----- -----
Earnings summary:
Net interest income (expense)
(FTE) $(103) $(3) $424
Provision for loan losses - 4 126
Noninterest income 13 - 194
Noninterest expenses 2 (1) 397
Provision (benefit) for income
taxes (FTE) (35) 4 25
Income from discontinued
operations,
net of tax - - -
Net income (loss) $(57) $(10) $70
---- ---- ---
Net credit-related charge-offs $- $- $146
Selected average balances:
Assets $9,343 $5,466 $56,258
Loans 36 (3) 40,672
Deposits 653 95 39,671
Liabilities 10,838 868 50,550
Attributed equity 1,005 539 5,708
Statistical data:
Return on average assets (a) N/M N/M 0.50%
Return on average attributed
equity N/M N/M 4.89
Net interest margin (b) N/M N/M 3.28
Efficiency ratio N/M N/M 64.47
--- --- -----
Wealth &
Business Retail Institutional
Three Months Ended March 31,
2010 Bank Bank Management
---------------------------- ---- ---- ----------
Earnings summary:
Net interest income
(expense) (FTE) $341 $130 $42
Provision for loan losses 137 31 12
Noninterest income 76 44 60
Noninterest expenses 162 154 73
Provision (benefit) for
income taxes (FTE) 29 (4) 6
Income from discontinued
operations,
net of tax - - -
Net income (loss) $89 $(7) $11
--- --- ---
Net credit-related charge-
offs $137 $26 $10
Selected average balances:
Assets $31,293 $6,106 $4,862
Loans 30,918 5,599 4,789
Deposits 17,750 16,718 2,791
Liabilities 17,711 16,678 2,777
Attributed equity 3,159 589 357
Statistical data:
Return on average assets (a) 1.13% (0.17)% 0.92%
Return on average attributed
equity 11.24 (4.86) 12.50
Net interest margin (b) 4.48 3.18 3.53
Efficiency ratio 38.72 88.44 73.18
Three Months Ended March 31,
2010 Finance Other Total
---------------------------- ------- ----- -----
Earnings summary:
Net interest income
(expense) (FTE) $(105) $8 $416
Provision for loan losses - (5) 175
Noninterest income 12 2 194
Noninterest expenses 2 13 404
Provision (benefit) for
income taxes (FTE) (36) 1 (4)
Income from discontinued
operations,
net of tax - 17 17
Net income (loss) $(59) $18 $52
---- --- ---
Net credit-related charge-
offs $- $- $173
Selected average balances:
Assets $9,416 $5,842 $57,519
Loans 9 (2) 41,313
Deposits 1,218 94 38,571
Liabilities 12,601 888 50,655
Attributed equity 919 1,840 6,864
Statistical data:
Return on average assets (a) N/M N/M 0.36%
Return on average attributed
equity N/M N/M (5.61)
Net interest margin (b) N/M N/M 3.18
Efficiency ratio N/M N/M 66.45
--- --- -----
Wealth &
Business Retail Institutional
Three Months Ended June 30,
2009 Bank Bank Management
--------------------------- ---- ---- ----------
Earnings summary:
Net interest income
(expense) (FTE) $328 $128 $40
Provision for loan losses 252 42 13
Noninterest income 50 46 73
Noninterest expenses 157 167 77
Provision (benefit) for
income taxes (FTE) (36) (17) 8
Income from discontinued
operations,
net of tax - - -
Net income (loss) $5 $(18) $15
--- ---- ---
Net credit-related charge-
offs $211 $29 $8
Selected average balances:
Assets $37,521 $6,693 $4,965
Loans 36,760 6,115 4,776
Deposits 14,827 17,666 2,599
Liabilities 15,110 17,639 2,593
Attributed equity 3,353 648 373
Statistical data:
Return on average assets (a) 0.05% (0.40)% 1.21%
Return on average attributed
equity 0.58 (11.41) 16.11
Net interest margin (b) 3.58 2.90 3.29
Efficiency ratio 41.79 95.00 69.77
---------------- ----- ----- -----
Three Months Ended June 30,
2009 Finance Other Total
--------------------------- ------- ----- -----
Earnings summary:
Net interest income
(expense) (FTE) $(101) $9 $404
Provision for loan losses - 5 312
Noninterest income 124 5 298
Noninterest expenses 7 21 429
Provision (benefit) for
income taxes (FTE) 8 (20) (57)
Income from discontinued
operations,
net of tax - - -
Net income (loss) $8 $8 $18
--- --- ---
Net credit-related charge-
offs $- $- $248
Selected average balances:
Assets $12,320 $2,757 $64,256
Loans 3 (6) 47,648
Deposits 5,669 22 40,783
Liabilities 21,484 277 57,103
Attributed equity 1,140 1,639 7,153
Statistical data:
Return on average assets (a) N/M N/M 0.11%
Return on average attributed
equity N/M N/M (1.25)
Net interest margin (b) N/M N/M 2.73
Efficiency ratio N/M N/M 72.75
---------------- --- --- -----
(a) Return on average assets is calculated based on the greater of
average assets or average liabilities and attributed equity.
(b) 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 (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in
millions)
Three Months Ended June
30, 2010 Midwest Western Texas Florida
----------------------- ------- ------- ----- -------
Earnings summary:
Net interest income
(expense) (FTE) $211 $164 $81 $12
Provision for loan losses 40 27 (1) 17
Noninterest income 97 33 23 4
Noninterest expenses 181 110 65 12
Provision (benefit) for
income taxes (FTE) 30 21 14 (4)
Income from discontinued
operations,
net of tax - - - -
Net income (loss) $57 $39 $26 $(9)
--- --- --- ---
Net credit-related
charge-offs $51 $47 $8 $7
Selected average
balances:
Assets $14,990 $13,006 $6,652 $1,576
Loans 14,959 12,792 6,428 1,575
Deposits 18,005 11,951 5,316 404
Liabilities 17,982 11,876 5,308 392
Attributed equity 1,472 1,358 672 161
Statistical data:
Return on average assets
(a) 1.17% 1.17% 1.54% (2.18)%
Return on average
attributed equity 15.44 11.38 15.29 (21.31)
Net interest margin (b) 4.69 5.13 5.05 2.94
Efficiency ratio 58.22 55.91 62.32 76.90
----------------
Finance
(dollar amounts in
millions) Other & Other
Three Months Ended June
30, 2010 Markets International Businesses Total
----------------------- ------- ------------- ---------- -----
Earnings summary:
Net interest income
(expense) (FTE) $43 $19 $(106) $424
Provision for loan losses 44 (5) 4 126
Noninterest income 15 9 13 194
Noninterest expenses 20 8 1 397
Provision (benefit) for
income taxes (FTE) (14) 9 (31) 25
Income from discontinued
operations,
net of tax - - - -
Net income (loss) $8 $16 $(67) $70
--- --- ---- ---
Net credit-related
charge-offs $33 $- $- $146
Selected average
balances:
Assets $3,570 $1,655 $14,809 $56,258
Loans 3,294 1,591 33 40,672
Deposits 2,195 1,052 748 39,671
Liabilities 2,227 1,059 11,706 50,550
Attributed equity 339 162 1,544 5,708
Statistical data:
Return on average assets
(a) 0.89% 3.90% N/M 0.50%
Return on average
attributed equity 9.42 39.95 N/M 4.89
Net interest margin (b) 5.29 4.62 N/M 3.28
Efficiency ratio 37.84 30.48 N/M 64.47
---------------- --
Three Months Ended March
31, 2010 Midwest Western Texas Florida
------------------------ ------- ------- ----- -------
Earnings summary:
Net interest income
(expense) (FTE) $205 $161 $79 $10
Provision for loan losses 81 59 17 3
Noninterest income 102 36 20 3
Noninterest expenses 186 105 60 9
Provision (benefit) for
income taxes (FTE) 14 11 8 -
Income from discontinued
operations,
net of tax - - - -
Net income (loss) $26 $22 $14 $1
--- --- --- ---
Net credit-related charge-
offs $55 $64 $25 $10
Selected average balances:
Assets $15,573 $13,175 $6,892 $1,576
Loans 15,332 12,980 6,704 1,576
Deposits 17,068 11,927 4,957 361
Liabilities 17,044 11,846 4,941 347
Attributed equity 1,446 1,315 670 164
Statistical data:
Return on average assets
(a) 0.55% 0.67% 0.84% 0.17%
Return on average
attributed equity 7.09 6.68 8.66 1.60
Net interest margin (b) 4.86 5.04 4.79 2.54
Efficiency ratio 60.64 53.08 60.36 72.04
----------------
Finance
Other & Other
Three Months Ended March
31, 2010 Markets International Businesses Total
------------------------ ------- ------------- ---------- -----
Earnings summary:
Net interest income
(expense) (FTE) $40 $18 $(97) $416
Provision for loan losses 23 (3) (5) 175
Noninterest income 10 9 14 194
Noninterest expenses 21 8 15 404
Provision (benefit) for
income taxes (FTE) (10) 8 (35) (4)
Income from discontinued
operations,
net of tax - - 17 17
Net income (loss) $16 $14 $(41) $52
--- --- ---- ---
Net credit-related charge-
offs $14 $5 $- $173
Selected average balances:
Assets $3,417 $1,628 $15,258 $57,519
Loans 3,126 1,588 7 41,313
Deposits 1,973 973 1,312 38,571
Liabilities 2,010 978 13,489 50,655
Attributed equity 352 158 2,759 6,864
Statistical data:
Return on average assets
(a) 1.85% 3.50% N/M 0.36%
Return on average
attributed equity 17.97 36.09 N/M (5.61)
Net interest margin (b) 5.23 4.64 N/M 3.18
Efficiency ratio 43.87 29.12 N/M 66.45
---------------- --
Three Months Ended June 30,
2009 Midwest Western Texas Florida
--------------------------- ------- ------- ----- -------
Earnings summary:
Net interest income
(expense) (FTE) $200 $154 $73 $11
Provision for loan losses 119 90 28 20
Noninterest income 92 32 21 3
Noninterest expenses 186 113 60 9
Provision (benefit) for
income taxes (FTE) (13) (10) 1 (7)
Income from discontinued
operations,
net of tax - - - -
Net income (loss) $- $(7) $5 $(8)
--- --- --- ---
Net credit-related charge-
offs $99 $70 $11 $23
Selected average balances:
Assets $18,122 $14,901 $7,798 $1,820
Loans 17,427 14,684 7,547 1,820
Deposits 17,166 10,717 4,496 331
Liabilities 17,461 10,625 4,505 321
Attributed equity 1,568 1,358 694 182
Statistical data:
Return on average assets
(a) - % (0.19)% 0.24% (1.78)%
Return on average
attributed equity (0.01) (2.13) 2.65 (17.76)
Net interest margin (b) 4.56 4.20 3.88 2.44
Efficiency ratio 63.83 60.67 63.92 66.24
---------------- ----- ----- ----- -----
Finance
Other & Other
Three Months Ended
June 30, 2009 Markets International Businesses Total
------------------ ------- ------------- ---------- -----
Earnings summary:
Net interest income
(expense) (FTE) $41 $17 $(92) $404
Provision for loan
losses 43 7 5 312
Noninterest income 13 8 129 298
Noninterest
expenses 25 8 28 429
Provision (benefit)
for income taxes
(FTE) (20) 4 (12) (57)
Income from
discontinued
operations,
net of tax - - - -
Net income (loss) $6 $6 $16 $18
--- --- --- ---
Net credit-related
charge-offs $42 $3 $- $248
Selected average
balances:
Assets $4,488 $2,050 $15,077 $64,256
Loans 4,157 2,016 (3) 47,648
Deposits 1,582 800 5,691 40,783
Liabilities 1,643 787 21,761 57,103
Attributed equity 415 157 2,779 7,153
Statistical data:
Return on average
assets (a) 0.57% 1.13% N/M 0.11%
Return on average
attributed equity 6.17 14.71 N/M (1.25)
Net interest margin
(b) 4.00 3.27 N/M 2.73
Efficiency ratio 47.75 30.99 N/M 72.75
---------------- ----- ----- -- -----
(a) Return on average assets is calculated based on the greater of
average assets or average liabilities and attributed equity.
(b) 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
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
Comerica Incorporated and Subsidiaries
Six Months Ended June 30,
-------------------------
(dollar amounts in
millions) 2010 2009
------------------ ---- ----
Net interest income (FTE) $840 $790
Less:
Interest earned on excess
liquidity (a) 5 2
------------------------- --- ---
Net interest income (FTE),
excluding excess liquidity $835 $788
--------------------------- ---- ----
Average earning assets $52,385 $60,631
Less:
Average net unrealized
gains on
investment securities
available-for-sale 71 226
--------------------- --- ---
Average earning assets for
net interest margin (FTE) 52,314 60,405
Less:
Excess liquidity (a) 3,905 1,823
-------------------- ----- -----
Average earning assets for
net interest margin (FTE),
excluding excess liquidity $48,409 $58,582
-------------------------- ------- -------
Net interest margin (FTE) 3.23% 2.63%
Net interest margin (FTE),
excluding excess liquidity 3.47 2.70
Impact of excess liquidity
on net interest margin
(FTE) (0.24) (0.07)
-------------------------- ----- -----
2010
----
2nd Qtr 1st Qtr
------- -------
Net interest income (FTE) $424 $416
Less:
Interest earned on excess liquidity (a) 2 2
--------------------------------------- --- ---
Net interest income (FTE), excluding excess
liquidity $422 $414
------------------------------------------- ---- ----
Average earning assets $51,835 $52,941
Less:
Average net unrealized gains on
investment securities available-for-sale 80 62
---------------------------------------- --- ---
Average earning assets for net interest
margin (FTE) 51,755 52,879
Less:
Excess liquidity (a) 3,719 4,092
-------------------- ----- -----
Average earning assets for net interest
margin (FTE),
excluding excess liquidity $48,036 $48,787
-------------------------- ------- -------
Net interest margin (FTE) 3.28% 3.18%
Net interest margin (FTE), excluding excess
liquidity 3.51 3.42
Impact of excess liquidity on net interest
margin (FTE) (0.23) (0.24)
------------------------------------------ ----- -----
2009
----
4th Qtr 3rd Qtr 2nd Qtr
------- ------- -------
Net interest income (FTE) $398 $387 $404
Less:
Interest earned on excess liquidity
(a) 1 2 1
----------------------------------- --- --- ---
Net interest income (FTE), excluding
excess liquidity $397 $385 $403
------------------------------------ ---- ---- ----
Average earning assets $53,953 $57,513 $59,522
Less:
Average net unrealized gains on
investment securities available-
for-sale 107 102 239
-------------------------------- --- --- ---
Average earning assets for net
interest margin (FTE) 53,846 57,411 59,283
Less:
Excess liquidity (a) 2,453 3,492 1,833
-------------------- ----- ----- -----
Average earning assets for net
interest margin (FTE),
excluding excess liquidity $51,393 $53,919 $57,450
-------------------------- ------- ------- -------
Net interest margin (FTE) 2.94% 2.68% 2.73%
Net interest margin (FTE), excluding
excess liquidity 3.07 2.84 2.81
Impact of excess liquidity on net
interest margin (FTE) (0.13) (0.16) (0.08)
--------------------------------- ----- ----- -----
(a) Excess liquidity represented by interest earned on and average
balances deposited with the Federal Reserve Bank (FRB).
The net interest margin (FTE), excluding excess liquidity, removes
interest earned on balances deposited with the FRB from net interest
income (FTE) and average balances deposited with the FRB from
average earning assets from the numerator and denominator of the
net interest margin (FTE) ratio, respectively. Comerica believes
this measurement provides meaningful information to investors,
regulators, management and others of the impact on net interest
income and net interest margin resulting from Comerica's short-term
investment in low yielding instruments.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
Comerica Incorporated and Subsidiaries
June 30, March 31,
2010 2010
---- ----
Tier 1 capital (a) (b) $6,371 $6,311
Less:
Fixed rate cumulative perpetual preferred stock - -
Trust preferred securities 495 495
--------------------------
Tier 1 common capital (b) $5,876 $5,816
------------------------- ------ ------
Risk-weighted assets (a) (b) $60,037 $60,792
Tier 1 common capital ratio (b) 9.79 % 9.57 %
------------------------------- ----- -----
Total shareholders' equity $5,792 $5,668
Less:
Fixed rate cumulative perpetual preferred stock - -
Goodwill 150 150
Other intangible assets 6 7
-----------------------
Tangible common equity $5,636 $5,511
---------------------- ------ ------
Total assets $55,885 $57,106
Less:
Goodwill 150 150
Other intangible assets 6 7
-----------------------
Tangible assets $55,729 $56,949
--------------- ------- -------
Tangible common equity ratio 10.11 % 9.68 %
---------------------------- ------ -----
December 31, September 30, June 30,
2009 2009 2009
---- ---- ----
Tier 1 capital (a) (b) $7,704 $7,735 $7,774
Less:
Fixed rate cumulative perpetual
preferred stock 2,151 2,145 2,140
Trust preferred securities 495 495 495
--------------------------
Tier 1 common capital (b) $5,058 $5,095 $5,139
------------------------- ------ ------ ------
Risk-weighted assets (a) (b) $61,815 $63,355 $67,124
Tier 1 common capital ratio (b) 8.18 % 8.04 % 7.66 %
------------------------------- ----- ----- -----
Total shareholders' equity $7,029 $7,035 $7,093
Less:
Fixed rate cumulative perpetual
preferred stock 2,151 2,145 2,140
Goodwill 150 150 150
Other intangible assets 8 8 10
-----------------------
Tangible common equity $4,720 $4,732 $4,793
---------------------- ------ ------ ------
Total assets $59,249 $59,590 $63,630
Less:
Goodwill 150 150 150
Other intangible assets 8 8 10
-----------------------
Tangible assets $59,091 $59,432 $63,470
--------------- ------- ------- -------
Tangible common equity ratio 7.99 % 7.96 % 7.55 %
---------------------------- ----- ----- -----
(a) Tier 1 capital and risk-weighted assets as defined by regulation.
(b) June 30, 2010 Tier 1 capital and risk-weighted assets are estimated.
The Tier 1 common capital ratio removes preferred stock and
qualifying trust preferred securities from Tier 1 capital as defined
by and calculated in conformity with bank regulations. The tangible
common equity ratio removes preferred stock and the effect of
intangible assets from capital and the effect of intangible assets
from total assets. Comerica believes these measurements are
meaningful measures of capital adequacy used by investors,
regulators, management and others to evaluate the adequacy of common
equity and to compare against other companies in the industry.
SOURCE Comerica Incorporated
