DALLAS, April 19, 2011 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported first quarter 2011 net income of $103 million, an increase of $7 million compared to $96 million for the fourth quarter 2010.
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(dollar amounts in millions, 1st Qtr 4th Qtr 1st Qtr
except per share data) '11 '10 '10
---------------------------- ------- ------- -------
Net interest income $395 $405 $415
Provision for loan losses 49 57 175
Noninterest income 207 215 194
Noninterest expenses 415 437 404
Income from continuing
operations, net of tax 103 96 35
Income from discontinued
operations, net of tax - - 17
Net income 103 96 52
Net income (loss) attributable
to common shares 102 95 (71) (a)
Diluted income (loss) per common
share 0.57 0.53 (0.46)
Tier 1 capital ratio 10.37% (b) 10.13% 10.38%
Tangible common equity ratio (c) 10.43 10.54 9.68
Net interest margin 3.25 3.29 3.18
(a) After preferred stock dividends to U.S. Treasury of $123 million.
(b) March 31, 2011 ratio is estimated.
(c) See Reconciliation of Non-GAAP Financial Measures.
"We had an eight percent increase in net income in the first quarter of 2011, when compared to the fourth quarter of 2010, which was primarily driven by reduced credit costs and good control of expenses," said Ralph W. Babb Jr., chairman and chief executive officer. "Among the many positive and encouraging signs we saw in the first quarter were loan growth in the Global Corporate Banking, Energy and Middle Market lines of business, and an acceleration of loan growth in Texas. These were more than offset by the continued and planned reductions in Commercial Real Estate, and a decrease in Mortgage Banker Finance. First quarter revenue was down three percent from the fourth quarter, primarily driven by lower total average loans.
"Key credit metrics continued to move in the right direction in the first quarter. In addition, deposit growth remained strong and our solid capital continued to position us well for future growth. We believe we are in the right markets with the right people and products to build upon this momentum going forward.
"We continue to be on track to close our pending acquisition of Sterling Bancshares in the second quarter, subject to customary closing conditions, including regulatory and Sterling shareholder approvals. Preparations for the integration of Sterling are moving forward, as planned. We expect to complete the systems conversions in the fourth quarter, and anticipate a smooth and seamless transition. Sterling also reported first quarter 2011 earnings today, and they were consistent with our expectations. The more work we do and the better we get to know Sterling, the more confident we are in the fit of our two organizations."
First Quarter 2011 Highlights Compared to Fourth Quarter 2010
-- Net income of $103 million, or $0.57 per fully diluted share, increased
eight percent compared to the fourth quarter 2010.
-- Average loans increased in the Global Corporate Banking business line
($276 million; six percent), in Energy Lending in the Specialty
Businesses business line ($154 million; 12 percent) and in the Middle
Market business line ($94 million; one percent). These increases were
more than offset by decreases in Mortgage Banker Finance in the
Specialty Businesses business line ($535 million; 49 percent) and in the
Commercial Real Estate business line ($324 million; seven percent),
resulting in a decrease in average total loans of $448 million, or one
percent.
-- Average loans in the Texas market increased $389 million, or six
percent, with increases in all major business lines other than
Commercial Real Estate.
-- Average core deposits increased $290 million in the first quarter 2011.
-- The net interest margin of 3.25 percent decreased four basis points,
primarily resulting from an increase in excess liquidity, represented by
average balances deposited with the Federal Reserve Bank, and the
maturity of interest rate swaps at positive spreads.
-- Average earning assets increased $245 million in the first quarter 2011.
-- Credit quality improvement continued in the first quarter 2011. Net
credit-related charge-offs decreased $12 million to $101 million.
Internal watch list loans declined $376 million to $5.2 billion and
nonaccrual loans decreased $84 million. As a result, the provision for
loan losses decreased $8 million to $49 million.
-- Noninterest expenses totaled $415 million in the first quarter 2011, a
decrease of $22 million from the fourth quarter 2010, primarily the
result of a decrease in salaries expense of $17 million.
-- The estimated Tier 1 ratio increased 24 basis points, to 10.37 percent
at March 31, 2011, from December 31, 2010.
Net Interest Income and Net Interest Margin
1st Qtr 4th Qtr 1st Qtr
(dollar amounts in millions) '11 '10 '10
---------------------------- ------- ------- -------
Net interest income $395 $405 $415
Net interest margin 3.25% 3.29% 3.18%
Selected average balances:
Total earning assets $49,347 $49,102 $52,941
Total investment securities 7,311 7,112 7,382
Federal Reserve Bank deposits
(excess liquidity) (a) 2,297 1,793 4,092
Total loans 39,551 39,999 41,313
Total core deposits (b) 40,186 39,896 37,236
Total noninterest-bearing deposits 15,459 15,607 14,624
(a) See Reconciliation of Non-GAAP Financial Measures.
(b) Core deposits exclude other time deposits and foreign office time
deposits.
-- The $10 million decrease in net interest income in the first quarter
2011, when compared to the fourth quarter 2010, resulted primarily from
two less days in the quarter and the maturity of interest rate swaps at
positive spreads.
-- The net interest margin of 3.25 percent declined four basis points
compared to the fourth quarter 2010. The decline in the net interest
margin reflected the impact of an increase in excess liquidity and the
maturity of interest rate swaps at positive spreads.
-- Average earning assets increased $245 million, primarily due to
increases of $504 million in Federal Reserve Bank deposits (excess
liquidity) and $199 million in average investment securities
available-for-sale, partially offset by a $448 million decrease in
average loans.
-- First quarter 2011 average core deposits increased $290 million compared
to fourth quarter 2010, primarily reflecting increases in money market
and NOW deposits ($495 million), partially offset by decreases in
noninterest-bearing deposits ($148 million) and customer certificates of
deposit ($93 million).
Noninterest Income
Noninterest income was $207 million for the first quarter 2011, compared to $215 million for the fourth quarter 2010. The $8 million decline reflected increases in net income from principal investing and warrants ($4 million) and service charges on deposit accounts ($3 million), which were more than offset by decreases in commercial lending fees ($8 million) and bank-owned life insurance ($6 million).
Noninterest Expenses
Noninterest expenses totaled $415 million in the first quarter 2011, a decrease of $22 million from the fourth quarter 2010. The $22 million decrease in noninterest expenses was primarily due to a decrease in salaries expense ($17 million) and a one-time charge recognized in the fourth quarter 2010 related to the redemption of subordinated notes ($5 million), partially offset by an increase in employee benefits expense ($7 million). The decrease in salaries expense primarily reflected a decrease in executive and business unit incentive expense ($8 million), a reduction in severance expense ($6 million) and the impact of two less days in the first quarter ($3 million), partially offset by an increase in share-based compensation expense ($5 million), resulting from annual share-based grants for retirement-eligible employees in the first quarter.
Credit Quality
"Overall, the first quarter results displayed a continuation of the steady improvement we have seen in our credit metrics over the last six quarters," Babb said. "First quarter net credit-related charge-offs decreased $12 million, with a significant decline in Commercial Real Estate, partially offset by an increase in Middle Market net charge-offs. The increase in Middle Market net charge-offs was primarily the result of several previously identified problem loans that are working their way through the collection process. Based on our analysis of Middle Market default rates, risk rating migration patterns as well as the watch list and nonaccruals, which were stable, we believe that the increase in charge-offs this quarter is not a trend. Our credit culture has served us well. It is one of our key strengths and has resulted in some of the best credit metrics among our peers."
-- Net credit-related charge-offs decreased $12 million to $101 million in
the first quarter 2011, from $113 million in the fourth quarter 2010.
The decrease in net credit-related charge-offs primarily reflected
decreases of $29 million in the Commercial Real Estate business line,
$13 million in the Private Banking business line and $7 million in the
Specialty Businesses business line, partially offset by an increase of
$36 million in the Middle Market business line.
-- Internal watch list loans declined $376 million to $5.2 billion from
December 31, 2010 to March 31, 2011.
-- During the first quarter 2011, $166 million of loan relationships
greater than $2 million were transferred to nonaccrual status, a
decrease of $14 million from the fourth quarter 2010, primarily due to a
$35 million decrease in transfers from the Commercial Real Estate
business line and a $10 million decrease in transfers from the Private
Banking business line, partially offset by a $30 million increase in
transfers from the Middle Market business line. Of the transfers of
loan relationships greater than $2 million to nonaccrual in the first
quarter 2011, $101 million were from the Middle Market business line,
primarily in the Midwest and Other markets, and $37 million were from
the Commercial Real Estate business line in the Midwest market.
-- Nonperforming assets decreased $131 million to $1.1 billion, or 2.81
percent of total loans and foreclosed property, at March 31, 2011.
-- Nonaccrual loans were charged down 46 percent at March 31, 2011.
-- Foreclosed property decreased $38 million to $74 million at March 31,
2011, from $112 million at December 31, 2010.
-- Loans past due 90 days or more and still accruing were $72 million at
March 31, 2011, an increase of $10 million compared to December 31,
2010.
-- The provision for loan losses decreased $8 million, primarily due to
reductions in the Commercial Real Estate, Global Corporate Banking,
Private Banking and Specialty Businesses business lines, partially
offset by an increase in the Middle Market business line.
-- The allowance for loan losses to total loans ratio was 2.17 percent and
2.24 percent at March 31, 2011 and December 31, 2010, respectively.
1st Qtr 4th Qtr 1st Qtr
(dollar amounts in millions) '11 '10 '10
---------------------------- ------- ------- -------
Net credit-related charge-offs $101 $113 $173
Net credit-related charge-offs/
Average total loans 1.03% 1.13% 1.68%
Provision for loan losses $49 $57 $175
Provision for credit losses on
lending-related
commitments (3) (3) 7
--- --- ---
Total provision for credit losses 46 54 182
Nonperforming loans 1,030 1,123 1,162
Nonperforming assets (NPAs) 1,104 1,235 1,251
NPAs/Total loans and foreclosed
property 2.81% 3.06% 3.06%
Loans past due 90 days or more and
still accruing $72 $62 $83
Allowance for loan losses 849 901 987
Allowance for credit losses on
lending-related commitments (a) 32 35 44
--- --- ---
Total allowance for credit losses 881 936 1,031
Allowance for loan losses/Total
loans 2.17% 2.24% 2.42%
Allowance for loan losses/
Nonperforming loans 82 80 85
(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 $55.0 billion and $5.9 billion, respectively, at March 31, 2011, compared to $53.7 billion and $5.8 billion, respectively, at December 31, 2010. There were approximately 177 million common shares outstanding at March 31, 2011. Comerica repurchased 400,000 shares of common stock in the open market in the first quarter 2011 under the share repurchase program.
Comerica's tangible common equity ratio was 10.43 percent at March 31, 2011, a decrease of 11 basis points from December 31, 2010. The estimated Tier 1 ratio increased 24 basis points, to 10.37 percent at March 31, 2011, from December 31, 2010.
Full-Year 2011 Outlook Compared to Full-Year 2010
For full-year 2011, management expects the following, compared to full-year 2010, based on a continuation of modest growth in the economy. This outlook does not include any impact from the pending acquisition of Sterling Bancshares, Inc.
-- A low single-digit decrease in average loans. Excluding the Commercial
Real Estate business line, a low single-digit increase in average loans.
-- Average earning assets of approximately $48.5 billion, reflecting lower
excess liquidity in addition to a decrease in average loans.
-- An average net interest margin of 3.25 percent to 3.30 percent, based on
no increase in the Federal Funds rate.
-- Net credit-related charge-offs between $350 million and $400 million for
full-year 2011. The provision for credit losses is expected to be
between $150 million and $200 million for full-year 2011.
-- A low single-digit decline in noninterest income compared to 2010,
primarily due to the impact of regulatory changes.
-- A low single-digit increase in noninterest expenses compared to 2010,
primarily due to an increase in employee benefits expense.
-- Income tax expense to approximate 36 percent of income before income
taxes less approximately $60 million of permanent differences related to
low-income housing and bank-owned life insurance.
-- Continue share repurchase program that, combined with dividend payments,
results in a payout up to 50 percent of full-year earnings.
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 March 31, 2011 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2011 results compared to fourth quarter 2010.
The following table presents net income (loss) by business segment.
(dollar amounts in
millions) 1st Qtr '11 4th Qtr '10 1st Qtr '10
------------------ ----------- ----------- -----------
Business Bank $167 93% $174 117% $89 96%
Retail Bank (2) (1) (14) (10) (7) (8)
Wealth & Institutional
Management 14 8 (10) (7) 11 12
---------------------- --- --- --- --- --- ---
179 100% 150 100% 93 100%
Finance (76) (60) (59)
Other (a) - 6 18
--------- --- --- ---
Total $103 $96 $52
----- ---- --- ---
(a) Includes discontinued operations and items not directly
associated with the three major business segments or the Finance
Division.
Business Bank
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '11 '10 '10
------------------ ------- ------- -------
Net interest income
(FTE) $341 $341 $341
Provision for loan
losses 18 8 137
Noninterest income 77 81 76
Noninterest expenses 160 158 162
Net income 167 174 89
Net credit-related
charge-offs 73 73 137
Selected average
balances:
Assets 30,091 30,489 31,293
Loans 29,609 29,947 30,918
Deposits 20,084 19,892 17,750
Net interest margin 4.66% 4.51% 4.48%
------------------- ---- ---- ----
-- Average loans decreased $338 million, reflecting increases in Global
Corporate Banking, Energy Lending and Middle Market more than offset by
decreases in Mortgage Banker Finance and Commercial Real Estate.
-- Average deposits increased $192 million, primarily due to increases in
Global Corporate Banking, Technology and Life Sciences and Mortgage
Banker Finance partially offset by decreases in Middle Market, the
Financial Services Division and Commercial Real Estate.
-- The net interest margin of 4.66 percent increased 15 basis points,
primarily due to an increase in deposit spreads and deposit balances.
-- The provision for loan losses increased $10 million, primarily due to an
increase in Middle Market, partially offset by decreases in Commercial
Real Estate and Global Corporate Banking.
-- Noninterest income decreased $4 million, primarily due to a decrease in
commercial lending fees, partially offset by an increase in service
charges on deposit accounts.
-- Noninterest expenses increased $2 million, primarily due to an increase
in other real estate expenses, partially offset by a decrease in
corporate overhead expenses.
Retail Bank
1st Qtr 4th Qtr 1st Qtr
(dollar amounts in millions) '11 '10 '10
---------------------------- ------- ------- -------
Net interest income (FTE) $139 $134 $130
Provision for loan losses 23 29 31
Noninterest income 42 43 44
Noninterest expenses 162 169 154
Net loss (2) (14) (7)
Net credit-related charge-
offs 23 22 26
Selected average balances:
Assets 5,558 5,647 6,106
Loans 5,106 5,192 5,599
Deposits 17,360 17,271 16,718
Net interest margin 3.25% 3.07% 3.18%
------------------- ---- ---- ----
-- Average loans decreased $86 million, primarily reflecting declines in
all business lines in the Midwest market.
-- Average deposits increased $89 million, primarily due to increases in
transaction and money market deposits, partially offset by a decline in
customer certificates of deposit.
-- The net interest margin of 3.25 percent increased 18 basis points,
primarily due to increases in deposit spreads, partially offset by a
decrease in loan balances.
-- The provision for loan losses decreased $6 million, primarily reflecting
decreases in all business lines in the Midwest and Texas markets,
partially offset by increases in all business lines in the Western
market.
-- Noninterest expenses decreased $7 million, primarily due to a decrease
in corporate overhead and nominal decreases in other expense categories.
Wealth and Institutional Management
1st Qtr 4th Qtr 1st Qtr
(dollar amounts in millions) '11 '10 '10
---------------------------- ------- ------- -------
Net interest income (FTE) $44 $42 $42
Provision for loan losses 8 23 12
Noninterest income 64 59 60
Noninterest expenses 78 93 73
Net income (loss) 14 (10) 11
Net credit-related charge-
offs 5 18 10
Selected average balances:
Assets 4,809 4,834 4,862
Loans 4,807 4,820 4,789
Deposits 2,800 2,730 2,791
Net interest margin 3.76% 3.43% 3.53%
------------------- ---- ---- ----
-- Average loans decreased $13 million.
-- Average deposits increased $70 million, primarily due to increases in
transaction and money market deposits.
-- The net interest margin of 3.76 percent increased 33 basis points,
primarily due to an increase in deposit spreads, partially offset by a
decrease in loan balances.
-- The provision for loan losses decreased $15 million, primarily
reflecting decreases in the Western and Midwest markets.
-- Noninterest income increased $5 million, primarily due to increases in
gains on the redemption of auction-rate securities and investment
banking fees.
-- Noninterest expenses decreased $15 million, primarily due to decreases
in salaries expense, outside processing fees and corporate overhead
expenses.
Geographic Market Segments
Comerica also provides market segment results for four primary geographic markets: Midwest, Western, Texas and Florida. In addition to the four primary geographic markets, Other Markets and International are also reported as market segments. The financial results below are based on methodologies in effect at March 31, 2011 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2011 results compared to fourth quarter 2010.
The following table presents net income (loss) by market segment.
(dollar amounts in
millions) 1st Qtr '11 4th Qtr '10 1st Qtr '10
------------------ ----------- ----------- -----------
Midwest $53 30% $35 23% $26 28%
Western 51 28 41 28 22 23
Texas 29 16 16 11 14 16
Florida (4) (2) 1 - 1 1
Other Markets 38 21 48 32 16 17
International 12 7 9 6 14 15
------------- --- --- --- --- --- ---
179 100% 150 100% 93 100%
Finance & Other
Businesses (a) (76) (54) (41)
--------------- --- --- ---
Total $103 $96 $52
----- ---- --- ---
(a) Includes discontinued operations and items not directly
associated with the geographic markets.
Midwest Market
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '11 '10 '10
------------------ ------- ------- -------
Net interest income
(FTE) $203 $202 $204
Provision for loan
losses 34 46 80
Noninterest income 100 99 102
Noninterest expenses 188 201 186
Net income 53 35 26
Net credit-related
charge-offs 46 52 55
Selected average
balances:
Assets 14,307 14,506 15,208
Loans 14,104 14,219 14,964
Deposits 18,230 17,959 17,056
Net interest margin 4.49% 4.45% 4.84%
------------------- ---- ---- ----
-- Average loans decreased $115 million, with declines in most business
lines, partially offset by increases in National Dealer Services, Global
Corporate Banking and Middle Market.
-- Average deposits increased $271 million, primarily due to increases in
Global Corporate Banking, Personal Banking, the Financial Services
Division and Private Banking, partially offset by decreases in Middle
Market and Small Business Banking.
-- The net interest margin of 4.49 percent increased four basis points,
primarily due to increases in deposit spreads and deposit balances,
partially offset by a decrease in loan balances and loan spreads.
-- The provision for loan losses decreased $12 million, primarily due to
decreases in Global Corporate Banking, Commercial Real Estate, Private
Banking and Small Business Banking, partially offset by an increase in
Middle Market.
-- Noninterest expenses decreased $13 million, primarily due to decreases
in corporate overhead expense, litigation and operational losses and
outside processing fees, partially offset by an increase in other real
estate expenses.
Western Market
1st Qtr 4th Qtr 1st Qtr
(dollar amounts in millions) '11 '10 '10
---------------------------- ------- ------- -------
Net interest income (FTE) $164 $158 $161
Provision for loan losses 11 11 59
Noninterest income 37 35 36
Noninterest expenses 109 109 105
Net income 51 41 22
Net credit-related charge-
offs 26 43 64
Selected average balances:
Assets 12,590 12,698 13,175
Loans 12,383 12,497 12,980
Deposits 12,235 12,448 11,927
Net interest margin 5.37% 5.01% 5.04%
------------------- ---- ---- ----
-- Average loans decreased $114 million, primarily due to decreases in
Commercial Real Estate and National Dealer Services, partially offset by
increases in Middle Market and Global Corporate Banking.
-- Average deposits decreased $213 million, primarily due to decreases in
the Financial Services Division, Middle Market and Commercial Real
Estate, partially offset by increases in Technology and Life Sciences
and Global Corporate Banking.
-- The net interest margin of 5.37 percent increased 36 basis points,
primarily due to increases in loan and deposit spreads, partially offset
by a decrease in deposit balances.
-- Noninterest income increased $2 million, primarily due to an increase in
warrant income.
Texas Market
1st Qtr 4th Qtr 1st Qtr
(dollar amounts in millions) '11 '10 '10
---------------------------- ------- ------- -------
Net interest income (FTE) $87 $80 $79
Provision for loan losses 4 15 17
Noninterest income 23 27 20
Noninterest expenses 61 67 60
Net income 29 16 14
Total net credit-related
charge-offs 8 9 25
Selected average balances:
Assets 7,031 6,653 6,892
Loans 6,824 6,435 6,704
Deposits 5,786 5,557 4,957
Net interest margin 5.17% 4.91% 4.79%
------------------- ---- ---- ----
-- Average loans increased $389 million, primarily due to increases in
Energy Lending, Middle Market and Global Corporate Banking, partially
offset by a decrease in Commercial Real Estate.
-- Average deposits increased $229 million, primarily due to increases in
Global Corporate Banking, Technology and Life Sciences and Energy
Lending, partially offset by a decrease in Middle Market.
-- The net interest margin of 5.17 percent increased 26 basis points,
primarily due to increases in loan and deposit spreads and deposit
balances.
-- The provision for loan losses decreased $11 million, with decreases
across all lines of business.
-- Noninterest income decreased $4 million, primarily due to decreases in
commercial lending fees and warrant income.
-- Noninterest expenses decreased $6 million, primarily due to decreases in
salaries expense and other real estate expenses.
Florida Market
1st Qtr 4th Qtr 1st Qtr
(dollar amounts in millions) '11 '10 '10
---------------------------- ------- ------- -------
Net interest income (FTE) $11 $11 $10
Provision for loan losses 8 4 3
Noninterest income 4 3 3
Noninterest expenses 12 9 9
Net income (loss) (4) 1 1
Net credit-related charge-
offs 8 7 10
Selected average balances:
Assets 1,553 1,587 1,576
Loans 1,580 1,612 1,576
Deposits 367 375 361
Net interest margin 2.82% 2.64% 2.54%
------------------- ---- ---- ----
-- Average loans decreased $32 million, primarily due to decreases in
Commercial Real Estate and Global Corporate Banking.
-- Average deposits decreased $8 million, primarily due to a decrease in
Global Corporate Banking.
-- The net interest margin of 2.82 percent increased 18 basis points,
primarily due to an increase in loan and deposit spreads.
-- The provision for loan losses increased $4 million, primarily due to
increases in Middle Market and Private Banking.
-- Noninterest expenses increased $3 million, primarily due to an increase
in other real estate expenses.
Conference Call and Webcast
Comerica will host a conference call to review first quarter 2011 financial results at 7 a.m. CT Tuesday, April 19, 2011. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 51888978). The call and supplemental financial information can also be accessed on the Internet at www.comerica.com. A telephone replay will be available approximately two hours following the conference call through April 30, 2011. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 51888978). 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," "opportunity," "initiative," "outcome," "continue," "remain," "maintain," "trend," "objective," "looks forward" and variations of such words and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "might," "can," "may" or similar expressions, as they relate to Comerica or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of Comerica's management based on information known to Comerica's management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica's management for future or past operations, products or services, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability. Such statements reflect the view of Comerica's management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Comerica's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in general economic, political or industry conditions and related credit and market conditions; changes in trade, monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; adverse conditions in the capital markets; the interdependence of financial service companies; changes in regulation or oversight, including the effects of recently enacted legislation, actions taken by or proposed by the U.S. Treasury, the Board of Governors of the Federal Reserve System, the Texas Department of Banking and the Federal Deposit Insurance Corporation, legislation or regulations enacted in the future, and the impact and expiration of such legislation and regulatory actions; unfavorable developments concerning credit quality; the proposed acquisition of Sterling Bancshares, Inc. ("Sterling"), or any future acquisitions; the effects of more stringent capital or liquidity requirements; 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 implementation of Comerica's strategies and business models, including the anticipated performance of any new banking centers; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties or information security problems; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; the entry of new competitors in Comerica's markets; changes in customer borrowing, repayment, investment and deposit practices; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings; the effectiveness of methods of reducing risk exposures; the effects of war and other armed conflicts or acts of terrorism and the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods. 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 16 of Comerica's Annual Report on Form 10-K for the year ended December 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.
Additional Information for Shareholders
In connection with the proposed merger transaction, Comerica has filed with the SEC a Registration Statement on Form S-4 that includes a Proxy Statement of Sterling and a Prospectus of Comerica, and Sterling mailed the definitive Proxy Statement/Prospectus to its shareholders on or about April 6, 2011. Each of Comerica and Sterling may file other relevant documents concerning the proposed transaction. SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
A free copy of the definitive Proxy Statement/Prospectus, as well as other filings containing information about Comerica and Sterling, may be obtained at the SEC's Internet site (http://www.sec.gov). You may be able to obtain these documents, free of charge, from Comerica at www.comerica.com under the tab "Investor Relations" and then under the heading "SEC Filings" or from Sterling by accessing Sterling's website at www.banksterling.com under the tab "Investor Relations" and then under the heading "SEC Filings."
Comerica and Sterling and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Sterling in connection with the proposed merger. Information about the directors and executive officers of Comerica is set forth in the proxy statement for Comerica's 2011 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 18, 2011. Information about the directors and executive officers of Sterling is set forth in Sterling's Form 10-K/A filed with the SEC on April 8, 2011. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the above-referenced definitive Proxy Statement/Prospectus and other relevant materials filed with the SEC. Free copies of these documents may be obtained as described in the preceding paragraph.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
------------------
December
March 31, 31, March 31,
(in millions, except per
share data) 2011 2010 2010
------------------------ ---- ---- ----
PER COMMON SHARE AND COMMON
STOCK DATA
Diluted net income (loss) $0.57 $0.53 $(0.46)
Cash dividends declared 0.10 0.10 0.05
Common shareholders' equity
(at period end) 33.25 32.82 32.15
Average diluted shares (in
thousands) 178,425 178,266 155,155
-------------------------- ------- ------- -------
KEY RATIOS
Return on average common
shareholders' equity 7.08% 6.53% (5.61)%
Return on average assets 0.77 0.71 0.36
Tier 1 common capital ratio
(a) (b) 10.37 10.13 9.57
Tier 1 risk-based capital
ratio (b) 10.37 10.13 10.38
Total risk-based capital
ratio (b) 14.83 14.54 14.91
Leverage ratio (b) 11.37 11.26 11.00
Tangible common equity ratio
(a) 10.43 10.54 9.68
---------------------------- ----- ----- ----
AVERAGE BALANCES
Commercial loans $21,496 $21,464 $21,015
Real estate construction
loans:
Commercial Real Estate
business line (c) 1,754 1,944 2,931
Other business lines (d) 425 427 455
Commercial mortgage loans:
Commercial Real Estate
business line (c) 1,978 2,016 1,908
Other business lines (d) 7,812 7,949 8,479
Residential mortgage loans 1,599 1,600 1,632
Consumer loans 2,281 2,367 2,481
Lease financing 987 1,044 1,130
International loans 1,219 1,188 1,282
Total loans 39,551 39,999 41,313
Earning assets 49,347 49,102 52,941
Total assets 53,775 53,756 57,519
Noninterest-bearing deposits 15,459 15,607 14,624
Interest-bearing core
deposits 24,727 24,289 22,612
Total core deposits 40,186 39,896 37,236
Common shareholders' equity 5,835 5,870 5,070
Total shareholders' equity 5,835 5,870 6,864
-------------------------- ----- ----- -----
NET INTEREST INCOME
Net interest income (fully
taxable equivalent basis) $396 $406 $416
Fully taxable equivalent
adjustment 1 1 1
Net interest margin (fully
taxable equivalent basis) 3.25% 3.29% 3.18%
-------------------------- ---- ---- ----
CREDIT QUALITY
Nonaccrual loans $996 $1,080 $1,145
Reduced-rate loans 34 43 17
--- --- ---
Total nonperforming loans 1,030 1,123 1,162
Foreclosed property 74 112 89
--- --- ---
Total nonperforming assets 1,104 1,235 1,251
Loans past due 90 days or
more and still accruing 72 62 83
Gross loan charge-offs 123 140 184
Loan recoveries 22 27 11
--- --- ---
Net loan charge-offs 101 113 173
Lending-related commitment
charge-offs - - -
--- --- ---
Total net credit-related
charge-offs 101 113 173
Allowance for loan losses 849 901 987
Allowance for credit losses
on lending-related
commitments 32 35 44
--- --- ---
Total allowance for credit
losses 881 936 1,031
Allowance for loan losses as
a percentage of total loans 2.17% 2.24% 2.42%
Net loan charge-offs as a
percentage of average total
loans 1.03 1.13 1.68
Net credit-related charge-
offs as a percentage of
average total loans 1.03 1.13 1.68
Nonperforming assets as a
percentage of total loans
and foreclosed property 2.81 3.06 3.06
Allowance for loan losses as
a percentage of total
nonperforming loans 82 80 85
---------------------------- --- --- ---
(a) See Reconciliation of Non-GAAP Financial Measures.
(b) March 31, 2011 ratios are estimated.
(c) Primarily loans to real estate investors and developers.
(d) Primarily loans secured by owner-occupied real estate.
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
March December March
31, 31, 31,
(in millions, except
share data) 2011 2010 2010
-------------------- ---- ---- ----
(unaudited) (unaudited)
ASSETS
Cash and due from
banks $875 $668 $769
Interest-bearing
deposits with banks 3,570 1,415 3,860
Other short-term
investments 154 141 165
Investment securities
available-for-sale 7,406 7,560 7,346
Commercial loans 21,360 22,145 20,756
Real estate
construction loans 2,023 2,253 3,202
Commercial mortgage
loans 9,697 9,767 10,358
Residential mortgage
loans 1,550 1,619 1,631
Consumer loans 2,262 2,311 2,472
Lease financing 958 1,009 1,120
International loans 1,326 1,132 1,306
------------------- ----- ----- -----
Total loans 39,176 40,236 40,845
Less allowance for
loan losses (849) (901) (987)
------------------ ---- ---- ----
Net loans 38,327 39,335 39,858
Premises and equipment 637 630 637
Customers' liability
on acceptances
outstanding 14 9 21
Accrued income and
other assets 4,034 3,909 4,450
------------------ ----- ----- -----
Total assets $55,017 $53,667 $57,106
------------ ------- ------- -------
LIABILITIES AND SHAREHOLDERS'
EQUITY
Noninterest-bearing
deposits $16,357 $15,538 $15,290
Money market and NOW
deposits 17,888 17,622 16,009
Savings deposits 1,457 1,397 1,462
Customer certificates
of deposit 5,672 5,482 5,979
Other time deposits - - 814
Foreign office time
deposits 499 432 412
------------------- --- --- ---
Total interest-bearing
deposits 25,516 24,933 24,676
----------------------- ------ ------ ------
Total deposits 41,873 40,471 39,966
Short-term borrowings 61 130 489
Acceptances
outstanding 14 9 21
Accrued expenses and
other liabilities 1,076 1,126 1,047
Medium- and long-
term debt 6,116 6,138 9,915
----------------- ----- ----- -----
Total liabilities 49,140 47,874 51,438
Common stock - $5 par value:
Authorized -325,000,000
shares
Issued -203,878,110
shares 1,019 1,019 1,019
Capital surplus 1,464 1,481 1,468
Accumulated other
comprehensive loss (382) (389) (303)
Retained earnings 5,317 5,247 5,064
Less cost of common stock in
treasury -27,103,941 shares
at 3/31/11,
27,342,518 shares at
12/31/10, and
27,575,283 shares at
3/31/10 (1,541) (1,565) (1,580)
--------------------- ------ ------ ------
Total shareholders' equity 5,877 5,793 5,668
-------------------------- ----- ----- -----
Total liabilities and
shareholders' equity $55,017 $53,667 $57,106
---------------------- ------- ------- -------
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Three Months
Ended
March 31,
---------
(in millions, except per share data) 2011 2010
------------------------------------ ---- ----
INTEREST INCOME
Interest and fees on loans $375 $412
Interest on investment securities 57 61
Interest on short-term investments 2 3
---------------------------------- --- ---
Total interest income 434 476
INTEREST EXPENSE
Interest on deposits 22 35
Interest on short-term borrowings - -
Interest on medium- and long-term debt 17 26
-------------------------------------- --- ---
Total interest expense 39 61
---------------------- --- ---
Net interest income 395 415
Provision for loan losses 49 175
------------------------- --- ---
Net interest income after provision
for loan losses 346 240
NONINTEREST INCOME
Service charges on deposit accounts 52 56
Fiduciary income 39 39
Commercial lending fees 21 22
Letter of credit fees 18 18
Card fees 15 13
Foreign exchange income 9 10
Bank-owned life insurance 8 8
Brokerage fees 6 6
Net securities gains 2 2
Other noninterest income 37 20
------------------------ --- ---
Total noninterest income 207 194
NONINTEREST EXPENSES
Salaries 188 169
Employee benefits 50 44
----------------- --- ---
Total salaries and employee benefits 238 213
Net occupancy expense 40 41
Equipment expense 15 17
Outside processing fee expense 24 23
Software expense 23 22
FDIC insurance expense 15 17
Legal fees 9 8
Advertising expense 7 8
Other real estate expense 8 12
Litigation and operational losses 3 1
Provision for credit losses on lending-
related commitments (3) 7
Other noninterest expenses 36 35
-------------------------- --- ---
Total noninterest expenses 415 404
-------------------------- --- ---
Income from continuing operations before
income taxes 138 30
Provision (benefit) for income taxes 35 (5)
------------------------------------ --- ---
Income from continuing operations 103 35
Income from discontinued operations, net
of tax - 17
---------------------------------------- --- ---
NET INCOME 103 52
Less:
Preferred stock dividends - 123
Income allocated to participating
securities 1 -
Net income (loss) attributable to common
shares $102 $(71)
---------------------------------------- ---- ----
Basic earnings per common share:
Income (loss) from continuing operations $0.58 $(0.57)
Net income (loss) 0.58 (0.46)
Diluted earnings per common share:
Income (loss) from continuing operations 0.57 (0.57)
Net income (loss) 0.57 (0.46)
Cash dividends declared on common stock 18 9
Cash dividends declared per common share 0.10 0.05
---------------------------------------- ---- ----
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
First Fourth Third
Quarter Quarter Quarter
(in millions, except per share data) 2011 2010 2010
------------------------------------ ---- ---- ----
INTEREST INCOME
Interest and fees on loans $375 $394 $399
Interest on investment securities 57 49 55
Interest on short-term investments 2 2 2
---------------------------------- --- --- ---
Total interest income 434 445 456
INTEREST EXPENSE
Interest on deposits 22 24 27
Interest on short-term borrowings - 1 -
Interest on medium- and long-term debt 17 15 25
-------------------------------------- --- --- ---
Total interest expense 39 40 52
---------------------- --- --- ---
Net interest income 395 405 404
Provision for loan losses 49 57 122
------------------------- --- --- ---
Net interest income after
provision
for loan losses 346 348 282
NONINTEREST INCOME
Service charges on deposit accounts 52 49 51
Fiduciary income 39 39 38
Commercial lending fees 21 29 22
Letter of credit fees 18 20 19
Card fees 15 15 15
Foreign exchange income 9 11 8
Bank-owned life insurance 8 14 9
Brokerage fees 6 7 6
Net securities gains 2 - -
Other noninterest income 37 31 18
------------------------ --- --- ---
Total noninterest income 207 215 186
NONINTEREST EXPENSES
Salaries 188 205 187
Employee benefits 50 43 47
----------------- --- --- ---
Total salaries and employee benefits 238 248 234
Net occupancy expense 40 42 40
Equipment expense 15 16 15
Outside processing fee expense 24 27 23
Software expense 23 23 22
FDIC insurance expense 15 15 14
Legal fees 9 9 9
Advertising expense 7 8 7
Other real estate expense 8 5 7
Litigation and operational losses 3 6 2
Provision for credit losses on lending-
related commitments (3) (3) (6)
Other noninterest expenses 36 41 35
-------------------------- --- --- ---
Total noninterest expenses 415 437 402
-------------------------- --- --- ---
Income from continuing operations before
income taxes 138 126 66
Provision (benefit) for income taxes 35 30 7
------------------------------------ --- --- ---
Income from continuing operations 103 96 59
Income from discontinued operations, net
of tax - - -
---------------------------------------- --- --- ---
NET INCOME 103 96 59
Less:
Preferred stock dividends - - -
Income allocated to participating
securities 1 1 -
Net income (loss) attributable to common
shares $102 $95 $59
---------------------------------------- ---- --- ---
Basic earnings per common share:
Income (loss) from continuing operations $0.58 $0.54 $0.34
Net income (loss) 0.58 0.54 0.34
Diluted earnings per common share:
Income (loss) from continuing operations 0.57 0.53 0.33
Net income (loss) 0.57 0.53 0.33
Cash dividends declared on common stock 18 18 9
Cash dividends declared per common share 0.10 0.10 0.05
---------------------------------------- ---- ---- ----
Second First
Quarter Quarter
(in millions, except per share data) 2010 2010
------------------------------------ ---- ----
INTEREST INCOME
Interest and fees on loans $412 $412
Interest on investment securities 61 61
Interest on short-term investments 3 3
---------------------------------- --- ---
Total interest income 476 476
INTEREST EXPENSE
Interest on deposits 29 35
Interest on short-term borrowings - -
Interest on medium- and long-term debt 25 26
-------------------------------------- --- ---
Total interest expense 54 61
---------------------- --- ---
Net interest income 422 415
Provision for loan losses 126 175
------------------------- --- ---
Net interest income after
provision
for loan losses 296 240
NONINTEREST INCOME
Service charges on deposit accounts 52 56
Fiduciary income 38 39
Commercial lending fees 22 22
Letter of credit fees 19 18
Card fees 15 13
Foreign exchange income 10 10
Bank-owned life insurance 9 8
Brokerage fees 6 6
Net securities gains 1 2
Other noninterest income 22 20
------------------------ --- ---
Total noninterest income 194 194
NONINTEREST EXPENSES
Salaries 179 169
Employee benefits 45 44
----------------- --- ---
Total salaries and employee benefits 224 213
Net occupancy expense 39 41
Equipment expense 15 17
Outside processing fee expense 23 23
Software expense 22 22
FDIC insurance expense 16 17
Legal fees 9 8
Advertising expense 7 8
Other real estate expense 5 12
Litigation and operational losses 2 1
Provision for credit losses on lending-
related commitments - 7
Other noninterest expenses 35 35
-------------------------- --- ---
Total noninterest expenses 397 404
-------------------------- --- ---
Income from continuing operations before
income taxes 93 30
Provision (benefit) for income taxes 23 (5)
------------------------------------ --- ---
Income from continuing operations 70 35
Income from discontinued operations, net
of tax - 17
---------------------------------------- --- ---
NET INCOME 70 52
Less:
Preferred stock dividends - 123
Income allocated to participating
securities 1 -
Net income (loss) attributable to common
shares $69 $(71)
---------------------------------------- --- ----
Basic earnings per common share:
Income (loss) from continuing operations $0.40 $(0.57)
Net income (loss) 0.40 (0.46)
Diluted earnings per common share:
Income (loss) from continuing operations 0.39 (0.57)
Net income (loss) 0.39 (0.46)
Cash dividends declared on common stock 8 9
Cash dividends declared per common share 0.05 0.05
---------------------------------------- ---- ----
First Quarter 2011 Compared To:
-------------------------------
Fourth Quarter
2010
(in millions, except per
share data) Amount Percent
------------------------ ------ -------
INTEREST INCOME
Interest and fees on loans $(19) (5)%
Interest on investment
securities 8 16
Interest on short-term
investments - 44
---------------------- --- ---
Total interest income (11) (2)
INTEREST EXPENSE
Interest on deposits (2) (8)
Interest on short-term
borrowings (1) (39)
Interest on medium- and
long-term debt 2 5
----------------------- --- ---
Total interest expense (1) (3)
---------------------- --- ---
Net interest income (10) (2)
Provision for loan losses (8) (14)
------------------------- --- ---
Net interest income after
provision
for loan losses (2) -
NONINTEREST INCOME
Service charges on deposit
accounts 3 6
Fiduciary income - -
Commercial lending fees (8) (29)
Letter of credit fees (2) (6)
Card fees - (5)
Foreign exchange income (2) (16)
Bank-owned life insurance (6) (41)
Brokerage fees (1) (8)
Net securities gains 2 N/M
Other noninterest income 6 18
------------------------ --- ---
Total noninterest income (8) (4)
NONINTEREST EXPENSES
Salaries (17) (8)
Employee benefits 7 16
----------------- --- ---
Total salaries and employee
benefits (10) (4)
Net occupancy expense (2) (3)
Equipment expense (1) (4)
Outside processing fee
expense (3) (13)
Software expense - (7)
FDIC insurance expense - 3
Legal fees - (1)
Advertising expense (1) (8)
Other real estate expense 3 91
Litigation and operational
losses (3) (51)
Provision for credit losses
on lending-related
commitments - 34
Other noninterest expenses (5) (14)
-------------------------- --- ---
Total noninterest expenses (22) (5)
-------------------------- --- ---
Income from continuing
operations before income
taxes 12 10
Provision (benefit) for
income taxes 5 17
----------------------- --- ---
Income from continuing
operations 7 8
Income from discontinued
operations, net of tax - -
------------------------ --- ---
NET INCOME 7 8
Less:
Preferred stock dividends - -
Income allocated to
participating securities - 25
---
Net income (loss)
attributable to common
shares $7 8%
----------------------- --- ---
Basic earnings per common
share:
Income (loss) from
continuing operations $0.04 7%
Net income (loss) 0.04 7
Diluted earnings per common
share:
Income (loss) from
continuing operations 0.04 8
Net income (loss) 0.04 8
Cash dividends declared on
common stock - -
Cash dividends declared per
common share - -
--------------------------- --- ---
First Quarter 2011 Compared To:
-------------------------------
First Quarter
2010
(in millions, except per
share data) Amount Percent
------------------------ ------ -------
INTEREST INCOME
Interest and fees on loans $(37) (9)%
Interest on investment
securities (4) (7)
Interest on short-term
investments (1) (25)
---------------------- --- ---
Total interest income (42) (9)
INTEREST EXPENSE
Interest on deposits (13) (36)
Interest on short-term
borrowings - 8
Interest on medium- and
long-term debt (9) (35)
----------------------- --- ---
Total interest expense (22) (35)
---------------------- --- ---
Net interest income (20) (5)
Provision for loan losses (126) (72)
------------------------- ---- ---
Net interest income after
provision
for loan losses 106 44
NONINTEREST INCOME
Service charges on deposit
accounts (4) (7)
Fiduciary income - -
Commercial lending fees (1) (3)
Letter of credit fees - 1
Card fees 2 10
Foreign exchange income (1) (7)
Bank-owned life insurance - 1
Brokerage fees - 7
Net securities gains - 14
Other noninterest income 17 82
------------------------ --- ---
Total noninterest income 13 7
NONINTEREST EXPENSES
Salaries 19 11
Employee benefits 6 15
----------------- --- ---
Total salaries and employee
benefits 25 12
Net occupancy expense (1) (5)
Equipment expense (2) (6)
Outside processing fee
expense 1 4
Software expense 1 2
FDIC insurance expense (2) (11)
Legal fees 1 -
Advertising expense (1) (5)
Other real estate expense (4) (28)
Litigation and operational
losses 2 N/M
Provision for credit losses
on lending-related
commitments (10) N/M
Other noninterest expenses 1 1
-------------------------- --- ---
Total noninterest expenses 11 3
-------------------------- --- ---
Income from continuing
operations before income
taxes 108 N/M
Provision (benefit) for
income taxes 40 N/M
----------------------- --- ---
Income from continuing
operations 68 N/M
Income from discontinued
operations, net of tax (17) N/M
------------------------ --- ---
NET INCOME 51 99
Less:
Preferred stock dividends (123) N/M
Income allocated to
participating securities 1 N/M
---
Net income (loss)
attributable to common
shares $173 N/M %
----------------------- ---- --- ---
Basic earnings per common
share:
Income (loss) from
continuing operations $1.15 N/M %
Net income (loss) 1.04 N/M
Diluted earnings per common
share:
Income (loss) from
continuing operations 1.14 N/M
Net income (loss) 1.03 N/M
Cash dividends declared on
common stock 9 N/M
Cash dividends declared per
common share 0.05 N/M
--------------------------- ---- ---
N/M - Not meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
2011
----
(in millions) 1st Qtr
-------
Balance at beginning of period $901
Loan charge-offs:
Commercial 65
Real estate construction:
Commercial Real Estate business line (a) 8
Other business lines (b) 1
Total real estate construction 9
Commercial mortgage:
Commercial Real Estate business line (a) 9
Other business lines (b) 25
Total commercial mortgage 34
Residential mortgage 2
Consumer 8
Lease financing -
International 5
------------- ---
Total loan charge-offs 123
Recoveries on loans previously charged-off:
Commercial 4
Real estate construction 2
Commercial mortgage 9
Residential mortgage -
Consumer 1
Lease financing 5
International 1
Total recoveries 22
Net loan charge-offs 101
Provision for loan losses 49
Balance at end of period $849
------------------------ ----
Allowance for loan losses as a percentage of total
loans 2.17%
Net loan charge-offs as a percentage of average
total loans 1.03
Net credit-related charge-offs as a percentage
of average total loans 1.03
---------------------------------------------- ----
2010
----
(in millions) 4th Qtr 3rd Qtr
------- -------
Balance at beginning of period $957 $967
Loan charge-offs:
Commercial 43 38
Real estate construction:
Commercial Real Estate business line (a) 34 40
Other business lines (b) - 1
Total real estate construction 34 41
Commercial mortgage:
Commercial Real Estate business line (a) 9 16
Other business lines (b) 34 40
Total commercial mortgage 43 56
Residential mortgage 5 2
Consumer 15 7
Lease financing - -
International - 1
------------- --- ---
Total loan charge-offs 140 145
Recoveries on loans previously charged-off:
Commercial 7 7
Real estate construction 3 1
Commercial mortgage 10 2
Residential mortgage 1 -
Consumer 2 1
Lease financing 4 1
International - 1
Total recoveries 27 13
Net loan charge-offs 113 132
Provision for loan losses 57 122
Balance at end of period $901 $957
------------------------ ---- ----
Allowance for loan losses as a percentage of total
loans 2.24% 2.38%
Net loan charge-offs as a percentage of average
total loans 1.13 1.32
Net credit-related charge-offs as a percentage
of average total loans 1.13 1.32
---------------------------------------------- ---- ----
2010
----
(in millions) 2nd Qtr 1st 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
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
---------------------------------------------- ---- ----
(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
2011
----
(in millions) 1st Qtr
-------
Balance at beginning of period $35
Add: Provision for credit losses on lending-
related commitments (3)
--------------------------------------------
Balance at end of period $32
------------------------ ---
Unfunded lending-related commitments sold $2
----------------------------------------- ---
2010
----
(in millions) 4th Qtr 3rd Qtr
------- -------
Balance at beginning of period $38 $44
Add: Provision for credit losses on lending-
related commitments (3) (6)
--------------------------------------------
Balance at end of period $35 $38
------------------------ --- ---
Unfunded lending-related commitments sold $- $-
----------------------------------------- --- ---
2010
----
(in millions) 2nd Qtr 1st Qtr
------- -------
Balance at beginning of period $44 $37
Add: Provision for credit losses on lending-
related commitments - 7
--------------------------------------------
Balance at end of period $44 $44
------------------------ --- ---
Unfunded lending-related commitments sold $2 $-
----------------------------------------- --- ---
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2011
----
1st
(in millions) Qtr
------------------------- ----
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial $226
Real estate
construction:
Commercial Real Estate
business line (a) 195
Other business lines
(b) 3
Total real estate
construction 198
Commercial mortgage:
Commercial Real Estate
business line (a) 197
Other business lines
(b) 293
Total commercial
mortgage 490
Lease financing 7
International 4
------------- ---
Total nonaccrual
business loans 925
Retail loans:
Residential mortgage 58
Consumer:
Home equity 6
Other consumer 7
-------------- ---
Total consumer 13
-------------- ---
Total nonaccrual
retail loans 71
---------------- ---
Total nonaccrual loans 996
Reduced-rate loans 34
Total nonperforming
loans 1,030
Foreclosed property 74
Total nonperforming
assets $1,104
------------------- ------
Nonperforming loans as
a percentage of total
loans 2.63%
Nonperforming assets
as a percentage of
total loans
and foreclosed
property 2.81
Allowance for loan
losses as a
percentage
of total nonperforming
loans 82
Loans past due 90 days
or more and still
accruing $72
ANALYSIS OF NONACCRUAL
LOANS
Nonaccrual loans at
beginning of period $1,080
Loans transferred to
nonaccrual (c) 166
Nonaccrual business
loan gross charge-
offs (d) (111)
Loans transferred to
accrual status (c) (4)
Nonaccrual business
loans sold (e) (60)
Payments/Other (f) (75)
Nonaccrual loans at
end of period $996
------------------- ----
(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 $111
Performing watch list
loans 2
Consumer and
residential mortgage
loans 10
---
Total gross loan
charge-offs $123
----
(e) Analysis of loans
sold:
Nonaccrual business
loans $60
Performing watch list
loans 35
---
Total loans sold $95
---------------- ---
2010
----
(in millions) 4th Qtr 3rd Qtr
------------- ------- -------
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial $252 $258
Real estate
construction:
Commercial Real Estate
business line (a) 259 362
Other business lines
(b) 4 4
Total real estate
construction 263 366
Commercial mortgage:
Commercial Real Estate
business line (a) 181 153
Other business lines
(b) 302 304
Total commercial
mortgage 483 457
Lease financing 7 10
International 2 2
------------- --- ---
Total nonaccrual
business loans 1,007 1,093
Retail loans:
Residential mortgage 55 59
Consumer:
Home equity 5 5
Other consumer 13 6
-------------- --- ---
Total consumer 18 11
-------------- --- ---
Total nonaccrual retail
loans 73 70
----------------------- --- ---
Total nonaccrual loans 1,080 1,163
Reduced-rate loans 43 28
Total nonperforming
loans 1,123 1,191
Foreclosed property 112 120
Total nonperforming
assets $1,235 $1,311
------------------- ------ ------
Nonperforming loans as
a percentage of total
loans % 2.79% 2.96%
Nonperforming assets as
a percentage of total
loans
and foreclosed property 3.06 3.24
Allowance for loan
losses as a percentage
of total nonperforming
loans 80 80
Loans past due 90 days
or more and still
accruing $62 $104
ANALYSIS OF NONACCRUAL
LOANS
Nonaccrual loans at
beginning of period $1,163 $1,098
Loans transferred to
nonaccrual (c) 180 294
Nonaccrual business
loan gross charge-
offs (d) (120) (136)
Loans transferred to
accrual status (c) (4) (10)
Nonaccrual business
loans sold (e) (41) (12)
Payments/Other (f) (98) (71)
Nonaccrual loans at end
of period $1,080 $1,163
----------------------- ------ ------
(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 $120 $136
Performing watch list
loans - -
Consumer and
residential mortgage
loans 20 9
--- ---
Total gross loan
charge-offs $140 $145
(e) Analysis of loans
sold:
Nonaccrual business
loans $41 $12
Performing watch list
loans 29 7
--- ---
Total loans sold $70 $19
---------------- --- ---
2010
----
(in 1st
millions) 2nd Qtr Qtr
---------- ------- ----
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE
LOANS
Nonaccrual
loans:
Business
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
Lease
financing 11 11
International 3 4
------------- --- ---
Total
nonaccrual
business
loans 1,034 1,074
Retail
loans:
Residential
mortgage 53 58
Consumer:
Home
equity 7 8
Other
consumer 4 5
-------- --- ---
Total
consumer 11 13
-------- --- ---
Total
nonaccrual
retail
loans 64 71
---------- --- ---
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.
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
------------------
March 31, 2011
--------------
Average Average
(dollar amounts in millions) Balance Interest Rate
---------------------------- ------- -------- ----
Commercial loans $21,496 $200 3.76%
Real estate construction loans 2,179 19 3.51
Commercial mortgage loans 9,790 95 3.95
Residential mortgage loans 1,599 21 5.24
Consumer loans 2,281 19 3.42
Lease financing 987 9 3.62
International loans 1,219 12 3.87
Business loan swap income - 1 -
--- --- ---
Total loans 39,551 376 3.85
Auction-rate securities available-
for-sale 554 1 0.88
Other investment securities available-
for-sale 6,757 56 3.37
----- --- ----
Total investment securities available-
for-sale 7,311 57 3.17
Federal funds sold and securities
purchased
under agreements to resell 3 - 0.32
Interest-bearing deposits with banks
(a) 2,354 1 0.26
Other short-term investments 128 1 2.68
--- --- ----
Total earning assets 49,347 435 3.57
Cash and due from banks 884
Allowance for loan losses (908)
Accrued income and other assets 4,452
-----
Total assets $53,775
-------
Money market and NOW deposits $17,797 12 0.26
Savings deposits 1,421 - 0.09
Customer certificates of deposit 5,509 10 0.76
----- --- ----
Total interest-bearing core deposits 24,727 22 0.36
Other time deposits - - -
Foreign office time deposits 412 - 0.49
--- --- ----
Total interest-bearing deposits 25,139 22 0.37
Short-term borrowings 94 - 0.31
Medium- and long-term debt 6,128 17 1.10
----- --- ----
Total interest-bearing sources 31,361 39 0.51
Noninterest-bearing deposits 15,459
Accrued expenses and other liabilities 1,120
Total shareholders' equity 5,835
-----
Total liabilities and shareholders'
equity $53,775
-------
Net interest income/rate spread (FTE) $396 3.06
----
FTE adjustment $1
---
Impact of net noninterest-bearing
sources of funds 0.19
Net interest margin (as a percentage
of average earning assets) (FTE) (a) 3.25%
------------------------------------ ----
Three Months Ended
------------------
December 31, 2010
-----------------
Average Average
(dollar amounts in millions) Balance Interest Rate
---------------------------- ------- -------- ----
Commercial loans $21,464 $206 3.80%
Real estate construction loans 2,371 21 3.50
Commercial mortgage loans 9,965 100 3.97
Residential mortgage loans 1,600 20 5.11
Consumer loans 2,367 21 3.50
Lease financing 1,044 11 4.36
International loans 1,188 11 3.86
Business loan swap income - 4 -
--- --- ---
Total loans 39,999 394 3.92
Auction-rate securities available-
for-sale 617 2 0.92
Other investment securities available-
for-sale 6,495 48 3.07
----- --- ----
Total investment securities available-
for-sale 7,112 50 2.87
Federal funds sold and securities
purchased
under agreements to resell 8 - 0.32
Interest-bearing deposits with banks
(a) 1,856 1 0.25
Other short-term investments 127 1 1.40
--- --- ----
Total earning assets 49,102 446 3.62
Cash and due from banks 871
Allowance for loan losses (979)
Accrued income and other assets 4,762
-----
Total assets $53,756
-------
Money market and NOW deposits $17,302 13 0.29
Savings deposits 1,385 - 0.09
Customer certificates of deposit 5,602 11 0.80
----- --- ----
Total interest-bearing core deposits 24,289 24 0.39
Other time deposits - - -
Foreign office time deposits 460 - 0.45
--- --- ----
Total interest-bearing deposits 24,749 24 0.40
Short-term borrowings 174 1 0.27
Medium- and long-term debt 6,201 15 1.02
----- --- ----
Total interest-bearing sources 31,124 40 0.52
Noninterest-bearing deposits 15,607
Accrued expenses and other liabilities 1,155
Total shareholders' equity 5,870
-----
Total liabilities and shareholders'
equity $53,756
-------
Net interest income/rate spread (FTE) $406 3.10
----
FTE adjustment $1
---
Impact of net noninterest-bearing
sources of funds 0.19
Net interest margin (as a percentage
of average earning assets) (FTE) (a) 3.29%
------------------------------------ ----
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%
------------------------------------ ----
(a) Excess liquidity, represented by average balances deposited with
the Federal Reserve Bank, reduced the net interest margin by 14
basis points in the first quarter of 2011, and by 12 points and 24
basis points in the fourth and first quarters of 2010, respectively.
Excluding excess liquidity, the net interest margin would have been
3.39%, 3.41% and 3.42% in each respective period. See
Reconciliation of Non-GAAP Financial Measures.
CONSOLIDATED STATISTICAL DATA (unaudited)
Comerica Incorporated and Subsidiaries
(in
millions,
except March December September
per share 31, 31, 30,
data) 2011 2010 2010
---------- ---- ---- ----
Commercial
loans:
Floor plan $1,893 $2,017 $1,693
Other 19,467 20,128 19,739
----- ------ ------ ------
Total commercial loans 21,360 22,145 21,432
Real
estate
construction
loans:
Commercial
Real
Estate
business
line (a) 1,606 1,826 2,023
Other
business
lines (b) 417 427 421
---------- --- --- ---
Total real estate
construction loans 2,023 2,253 2,444
Commercial
mortgage
loans:
Commercial
Real
Estate
business
line (a) 1,918 1,937 2,091
Other
business
lines (b) 7,779 7,830 8,089
---------- ----- ----- -----
Total commercial mortgage
loans 9,697 9,767 10,180
Residential
mortgage
loans 1,550 1,619 1,586
Consumer
loans:
Home
equity 1,661 1,704 1,736
Other
consumer 601 607 667
--------- --- --- ---
Total consumer loans 2,262 2,311 2,403
-------------------- ----- ----- -----
Lease
financing 958 1,009 1,053
International
loans 1,326 1,132 1,182
------------- ----- ----- -----
Total loans $39,176 $40,236 $40,280
----------- ------- ------- -------
Goodwill $150 $150 $150
Loan
servicing
rights 4 5 5
Tier 1
common
capital
ratio (c)
(d) 10.37% 10.13% 9.96%
Tier 1
risk-
based
capital
ratio (d) 10.37 10.13 9.96
Total
risk-
based
capital
ratio (d) 14.83 14.54 14.37
Leverage
ratio (d) 11.37 11.26 10.91
Tangible
common
equity
ratio (c) 10.43 10.54 10.39
Book value
per
common
share $33.25 $32.82 $33.19
Market
value per
share for
the
quarter:
High 43.53 43.44 40.21
Low 36.20 34.43 33.11
Close 36.72 42.24 37.15
Quarterly
ratios:
Return on
average
common
shareholders'
equity 7.08% 6.53% 4.07%
Return on
average
assets 0.77 0.71 0.43
Efficiency
ratio 69.05 70.38 67.88
Number of
banking
centers 445 444 441
Number of
employees
-full
time
equivalent 8,955 9,001 9,075
June March
30, 31,
(in millions, except per share
data) 2010 2010
------------------------------ ---- ----
Commercial loans:
Floor plan $1,586 $1,351
Other 19,565 19,405
----- ------ ------
Total commercial loans 21,151 20,756
Real estate construction loans:
Commercial Real Estate business
line (a) 2,345 2,754
Other business lines (b) 429 448
------------------------ --- ---
Total real estate
construction loans 2,774 3,202
Commercial mortgage loans:
Commercial Real Estate business
line (a) 2,035 1,944
Other business lines (b) 8,283 8,414
------------------------ ----- -----
Total commercial mortgage
loans 10,318 10,358
Residential mortgage loans 1,606 1,631
Consumer loans:
Home equity 1,761 1,782
Other consumer 682 690
-------------- --- ---
Total consumer loans 2,443 2,472
-------------------- ----- -----
Lease financing 1,084 1,120
International loans 1,226 1,306
------------------- ----- -----
Total loans $40,602 $40,845
----------- ------- -------
Goodwill $150 $150
Loan servicing rights 6 6
Tier 1 common capital ratio (c) (d) 9.81% 9.57%
Tier 1 risk-based capital ratio (d) 10.64 10.38
Total risk-based capital ratio (d) 15.03 14.91
Leverage ratio (d) 11.36 11.00
Tangible common equity ratio (c) 10.11 9.68
Book value per common share $32.85 $32.15
Market value per share for the
quarter:
High 45.85 39.36
Low 35.44 29.68
Close 36.83 38.04
Quarterly ratios:
Return on average common
shareholders' equity 4.89% (5.61)%
Return on average assets 0.50 0.36
Efficiency ratio 64.47 66.45
Number of banking centers 437 449
Number of employees -full time
equivalent 9,107 9,215
(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) March 31, 2011 ratios are estimated.
PARENT COMPANY ONLY BALANCE SHEETS (unaudited)
Comerica Incorporated
March December
31, 31, March 31,
(in millions, except share data) 2011 2010 2010
-------------------------------- ---- ---- ----
ASSETS
Cash and due from subsidiary bank $7 $- $14
Short-term investments with
subsidiary bank 334 327 651
Other short-term investments 90 86 86
Investment in subsidiaries,
principally banks 6,033 5,957 5,818
Premises and equipment 3 4 4
Other assets 174 181 206
Total assets $6,641 $6,555 $6,779
------------ ------ ------ ------
LIABILITIES AND SHAREHOLDERS'
EQUITY
Medium- and long-term debt $631 $635 $989
Other liabilities 133 127 122
Total liabilities 764 762 1,111
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 203,878,110 shares 1,019 1,019 1,019
Capital surplus 1,464 1,481 1,468
Accumulated other comprehensive
loss (382) (389) (303)
Retained earnings 5,317 5,247 5,064
Less cost of common stock in
treasury - 27,103,941 shares at
3/31/11, 27,342,518 shares
at 12/31/10, and 27,575,283 shares
at 3/31/10 (1,541) (1,565) (1,580)
Total shareholders' equity 5,877 5,793 5,668
Total liabilities and shareholders'
equity $6,641 $6,555 $6,779
----------------------------------- ------ ------ ------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Comerica Incorporated and Subsidiaries
Common Stock
------------
Preferred Shares
(in millions, except per share data) Stock Outstanding Amount
------------------------------------ ----- ----------- ------
BALANCE AT DECEMBER 31, 2009 $2,151 151.2 $894
Net income - - -
Other comprehensive income, net of tax - - -
Total comprehensive income
Cash dividends declared on preferred stock - - -
Cash dividends declared on common stock
($0.05 per share) - - -
Purchase of common stock - - -
Issuance of common stock - 25.1 125
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 - - -
Share-based compensation - - -
BALANCE AT MARCH 31, 2010 $- 176.3 $1,019
------------------------- --- ----- ------
BALANCE AT DECEMBER 31, 2010 $- 176.5 $1,019
Net income - - -
Other comprehensive income, net of tax - - -
Total comprehensive income
Cash dividends declared on common stock
($0.10 per share) - - -
Purchase of common stock - (0.5) -
Net issuance of common stock under
employee stock plans - 0.8 -
Share-based compensation - - -
BALANCE AT MARCH 31, 2011 $- 176.8 $1,019
------------------------- --- ----- ------
Accumulated
Other
Capital Comprehensive Retained
(in millions, except per share data) Surplus Loss Earnings
------------------------------------ ------- ---- --------
BALANCE AT DECEMBER 31, 2009 $740 $(336) $5,161
Net income - - 52
Other comprehensive income, net of
tax - 33 -
Total comprehensive income
Cash dividends declared on preferred
stock - - (38)
Cash dividends declared on common
stock ($0.05 per share) - - (9)
Purchase of common stock - - -
Issuance of common stock 724 - -
Redemption of preferred stock - - -
Redemption discount accretion on
preferred stock - - (94)
Accretion of discount on preferred
stock - - (5)
Net issuance of common stock under
employee stock plans - - (3)
Share-based compensation 4 - -
BALANCE AT MARCH 31, 2010 $1,468 $(303) $5,064
------------------------- ------ ----- ------
BALANCE AT DECEMBER 31, 2010 $1,481 $(389) $5,247
Net income - - 103
Other comprehensive income, net of
tax - 7 -
Total comprehensive income
Cash dividends declared on common
stock ($0.10 per share) - - (18)
Purchase of common stock - - -
Net issuance of common stock under
employee stock plans (30) - (15)
Share-based compensation 13 - -
BALANCE AT MARCH 31, 2011 $1,464 $(382) $5,317
------------------------- ------ ----- ------
Total
Treasury Shareholders'
(in millions, except per share data) Stock Equity
------------------------------------ ----- ------
BALANCE AT DECEMBER 31, 2009 $(1,581) $7,029
Net income - 52
Other comprehensive income, net of tax - 33
---
Total comprehensive income 85
Cash dividends declared on preferred stock - (38)
Cash dividends declared on common stock
($0.05 per share) - (9)
Purchase of common stock (2) (2)
Issuance of common stock - 849
Redemption of preferred stock - (2,250)
Redemption discount accretion on preferred
stock - -
Accretion of discount on preferred stock - -
Net issuance of common stock under
employee stock plans 3 -
Share-based compensation - 4
BALANCE AT MARCH 31, 2010 $(1,580) $5,668
------------------------- ------- ------
BALANCE AT DECEMBER 31, 2010 $(1,565) $5,793
Net income - 103
Other comprehensive income, net of tax - 7
---
Total comprehensive income 110
Cash dividends declared on common stock
($0.10 per share) - (18)
Purchase of common stock (21) (21)
Net issuance of common stock under
employee stock plans 45 -
Share-based compensation - 13
BALANCE AT MARCH 31, 2011 $(1,541) $5,877
------------------------- ------- ------
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
Wealth &
(dollar amounts in millions) Business Retail Institutional
Three Months Ended March 31,
2011 Bank Bank Management
---------------------------- ---- ---- ----------
Earnings summary:
Net interest income
(expense) (FTE) $341 $139 $44
Provision for loan losses 18 23 8
Noninterest income 77 42 64
Noninterest expenses 160 162 78
Provision (benefit) for
income taxes (FTE) 73 (2) 8
Net income (loss) $167 $(2) $14
---- --- ---
Net credit-related charge-
offs $73 $23 $5
Selected average balances:
Assets $30,091 $5,558 $4,809
Loans 29,609 5,106 4,807
Deposits 20,084 17,360 2,800
Statistical data:
Return on average assets (a) 2.22% (0.05)% 1.14%
Net interest margin (b) 4.66 3.25 3.76
Efficiency ratio 38.14 89.19 74.38
---------------- ----- ----- -----
(dollar amounts in millions)
Three Months Ended March 31,
2011 Finance Other Total
---------------------------- ------- ----- -----
Earnings summary:
Net interest income
(expense) (FTE) $(135) $7 $396
Provision for loan losses - - 49
Noninterest income 16 8 207
Noninterest expenses 3 12 415
Provision (benefit) for
income taxes (FTE) (46) 3 36
Net income (loss) $(76) $- $103
---- --- ----
Net credit-related charge-
offs $- $- $101
Selected average balances:
Assets $9,314 $4,003 $53,775
Loans 22 7 39,551
Deposits 249 105 40,598
Statistical data:
Return on average assets (a) N/M N/M 0.77%
Net interest margin (b) N/M N/M 3.25
Efficiency ratio N/M N/M 69.05
---------------- --- --- -----
Wealth &
Business Retail Institutional
Three Months Ended December
31, 2010 Bank Bank Management
--------------------------- ---- ---- ----------
Earnings summary:
Net interest income
(expense) (FTE) $341 $134 $42
Provision for loan losses 8 29 23
Noninterest income 81 43 59
Noninterest expenses 158 169 93
Provision (benefit) for
income taxes (FTE) 82 (7) (5)
Net income (loss) $174 $(14) $(10)
---- ---- ----
Net credit-related charge-
offs $73 $22 $18
Selected average balances:
Assets $30,489 $5,647 $4,834
Loans 29,947 5,192 4,820
Deposits 19,892 17,271 2,730
Statistical data:
Return on average assets (a) 2.29% (0.32)% (0.82)%
Net interest margin (b) 4.51 3.07 3.43
Efficiency ratio 37.25 95.17 92.86
---------------- ----- ----- -----
Three Months Ended December
31, 2010 Finance Other Total
--------------------------- ------- ----- -----
Earnings summary:
Net interest income
(expense) (FTE) $(111) $- $406
Provision for loan losses - (3) 57
Noninterest income 23 9 215
Noninterest expenses 12 5 437
Provision (benefit) for
income taxes (FTE) (40) 1 31
Net income (loss) $(60) $6 $96
---- --- ---
Net credit-related charge-
offs $- $- $113
Selected average balances:
Assets $9,228 $3,558 $53,756
Loans 28 12 39,999
Deposits 310 153 40,356
Statistical data:
Return on average assets (a) N/M N/M 0.71%
Net interest margin (b) N/M N/M 3.29
Efficiency ratio N/M N/M 70.38
---------------- --- --- -----
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
Statistical data:
Return on average assets (a) 1.13% (0.17)% 0.92%
Net interest margin (b) 4.48 3.18 3.53
Efficiency ratio 38.78 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
Statistical data:
Return on average assets (a) N/M N/M 0.36%
Net interest margin (b) N/M N/M 3.18
Efficiency ratio N/M N/M 66.45
---------------- --- --- -----
(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 March 31,
2011 Midwest Western Texas
---------------------------- ------- ------- -----
Earnings summary:
Net interest income (expense)
(FTE) $203 $164 $87
Provision for loan losses 34 11 4
Noninterest income 100 37 23
Noninterest expenses 188 109 61
Provision (benefit) for income
taxes (FTE) 28 30 16
Net income (loss) $53 $51 $29
--- --- ---
Net credit-related charge-offs $46 $26 $8
Selected average balances:
Assets $14,307 $12,590 $7,031
Loans 14,104 12,383 6,824
Deposits 18,230 12,235 5,786
Statistical data:
Return on average assets (a) 1.08% 1.54% 1.65%
Net interest margin (b) 4.49 5.37 5.17
Efficiency ratio 61.99 54.36 55.39
---------------- ----- ----- -----
(dollar amounts in millions) Other
Three Months Ended March 31,
2011 Florida Markets International
---------------------------- ------- ------- -------------
Earnings summary:
Net interest income (expense)
(FTE) $11 $41 $18
Provision for loan losses 8 (7) (1)
Noninterest income 4 11 8
Noninterest expenses 12 21 9
Provision (benefit) for income
taxes (FTE) (1) - 6
Net income (loss) $(4) $38 $12
--- --- ---
Net credit-related charge-offs $8 $9 $4
Selected average balances:
Assets $1,553 $3,242 $1,735
Loans 1,580 2,960 1,671
Deposits 367 2,298 1,328
Statistical data:
Return on average assets (a) (0.93)% 4.70% 2.79%
Net interest margin (b) 2.82 5.73 4.34
Efficiency ratio 80.08 42.38 34.62
---------------- ----- ----- -----
Finance
(dollar amounts in millions) & Other
Three Months Ended March 31,
2011 Businesses Total
---------------------------- ---------- -----
Earnings summary:
Net interest income (expense)
(FTE) $(128) $396
Provision for loan losses - 49
Noninterest income 24 207
Noninterest expenses 15 415
Provision (benefit) for income
taxes (FTE) (43) 36
Net income (loss) $(76) $103
---- ----
Net credit-related charge-offs $- $101
Selected average balances:
Assets $13,317 $53,775
Loans 29 39,551
Deposits 354 40,598
Statistical data:
Return on average assets (a) N/M 0.77%
Net interest margin (b) N/M 3.25
Efficiency ratio N/M 69.05
---------------- -- -----
Three Months Ended December 31,
2010 Midwest Western Texas
------------------------------- ------- ------- -----
Earnings summary:
Net interest income (expense)
(FTE) $202 $158 $80
Provision for loan losses 46 11 15
Noninterest income 99 35 27
Noninterest expenses 201 109 67
Provision (benefit) for income
taxes (FTE) 19 32 9
Net income (loss) $35 $41 $16
--- --- ---
Net credit-related charge-offs $52 $43 $9
Selected average balances:
Assets $14,506 $12,698 $6,653
Loans 14,219 12,497 6,435
Deposits 17,959 12,448 5,557
Statistical data:
Return on average assets (a) 0.72% 1.21% 0.96%
Net interest margin (b) 4.45 5.01 4.91
Efficiency ratio 66.63 56.47 62.62
---------------- ----- ----- -----
Other
Three Months Ended December 31,
2010 Florida Markets International
------------------------------- ------- ------- -------------
Earnings summary:
Net interest income (expense)
(FTE) $11 $48 $18
Provision for loan losses 4 (19) 3
Noninterest income 3 10 9
Noninterest expenses 9 24 10
Provision (benefit) for income
taxes (FTE) - 5 5
Net income (loss) $1 $48 $9
--- --- ---
Net credit-related charge-offs $7 $2 $-
Selected average balances:
Assets $1,587 $3,911 $1,615
Loans 1,612 3,651 1,545
Deposits 375 2,242 1,312
Statistical data:
Return on average assets (a) 0.13% 4.93% 2.24%
Net interest margin (b) 2.64 5.32 4.38
Efficiency ratio 68.68 40.06 36.08
---------------- ----- ----- -----
Finance
& Other
Three Months Ended December 31,
2010 Businesses Total
------------------------------- ---------- -----
Earnings summary:
Net interest income (expense)
(FTE) $(111) $406
Provision for loan losses (3) 57
Noninterest income 32 215
Noninterest expenses 17 437
Provision (benefit) for income
taxes (FTE) (39) 31
Net income (loss) $(54) $96
---- ---
Net credit-related charge-offs $- $113
Selected average balances:
Assets $12,786 $53,756
Loans 40 39,999
Deposits 463 40,356
Statistical data:
Return on average assets (a) N/M 0.71%
Net interest margin (b) N/M 3.29
Efficiency ratio N/M 70.38
---------------- -- -----
Three Months Ended March 31,
2010 Midwest Western Texas
---------------------------- ------- ------- -----
Earnings summary:
Net interest income (expense)
(FTE) $204 $161 $79
Provision for loan losses 80 59 17
Noninterest income 102 36 20
Noninterest expenses 186 105 60
Provision (benefit) for income
taxes (FTE) 14 11 8
Income from discontinued
operations,
net of tax - - -
Net income (loss) $26 $22 $14
--- --- ---
Net credit-related charge-offs $55 $64 $25
Selected average balances:
Assets $15,208 $13,175 $6,892
Loans 14,964 12,980 6,704
Deposits 17,056 11,927 4,957
Statistical data:
Return on average assets (a) 0.57% 0.65% 0.84%
Net interest margin (b) 4.84 5.04 4.79
Efficiency ratio 60.60 53.32 60.46
---------------- ----- ----- -----
Other
Three Months Ended March 31,
2010 Florida Markets International
---------------------------- ------- ------- -------------
Earnings summary:
Net interest income (expense)
(FTE) $10 $41 $18
Provision for loan losses 3 24 (3)
Noninterest income 3 10 9
Noninterest expenses 9 21 8
Provision (benefit) for income
taxes (FTE) - (10) 8
Income from discontinued
operations,
net of tax - - -
Net income (loss) $1 $16 $14
--- --- ---
Net credit-related charge-offs $10 $14 $5
Selected average balances:
Assets $1,576 $3,782 $1,628
Loans 1,576 3,494 1,588
Deposits 361 1,985 973
Statistical data:
Return on average assets (a) 0.17% 1.63% 3.50%
Net interest margin (b) 2.54 4.84 4.64
Efficiency ratio 72.04 43.95 29.12
---------------- ----- ----- -----
Finance
& Other
Three Months Ended March 31,
2010 Businesses Total
---------------------------- ---------- -----
Earnings summary:
Net interest income (expense)
(FTE) $(97) $416
Provision for loan losses (5) 175
Noninterest income 14 194
Noninterest expenses 15 404
Provision (benefit) for income
taxes (FTE) (35) (4)
Income from discontinued
operations,
net of tax 17 17
Net income (loss) $(41) $52
---- ---
Net credit-related charge-offs $- $173
Selected average balances:
Assets $15,258 $57,519
Loans 7 41,313
Deposits 1,312 38,571
Statistical data:
Return on average assets (a) N/M 0.36%
Net interest margin (b) N/M 3.18
Efficiency ratio N/M 66.45
---------------- -- -----
(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
2011
----
1st Qtr
-------
Impact of Excess Liquidity on
Net Interest Margin (FTE):
Net interest income (FTE) $396
Less:
Interest earned on excess
liquidity (a) 1
------------------------- ---
Net interest income (FTE),
excluding excess liquidity $395
--------------------------- ----
Average earning assets $49,347
Less:
Average net unrealized gains
on
investment securities
available-for-sale 22
--------------------- ---
Average earning assets for net
interest margin (FTE) 49,325
Less:
Excess liquidity (a) 2,297
-------------------- -----
Average earning assets for net
interest margin (FTE),
excluding excess liquidity $47,028
-------------------------- -------
Net interest margin (FTE) 3.25%
Net interest margin (FTE),
excluding excess liquidity 3.39
Impact of excess liquidity on
net interest margin (FTE) (0.14)
----------------------------- -----
2010
----
4th Qtr 3rd Qtr
------- -------
Impact of Excess Liquidity on
Net Interest Margin (FTE):
Net interest income (FTE) $406 $405
Less:
Interest earned on excess
liquidity (a) 1 2
------------------------- --- ---
Net interest income (FTE),
excluding excess liquidity $405 $403
--------------------------- ---- ----
Average earning assets $49,102 $50,189
Less:
Average net unrealized gains
on
investment securities
available-for-sale 139 180
--------------------- --- ---
Average earning assets for net
interest margin (FTE) 48,963 50,009
Less:
Excess liquidity (a) 1,793 2,983
-------------------- ----- -----
Average earning assets for net
interest margin (FTE),
excluding excess liquidity $47,170 $47,026
-------------------------- ------- -------
Net interest margin (FTE) 3.29% 3.23%
Net interest margin (FTE),
excluding excess liquidity 3.41 3.42
Impact of excess liquidity on
net interest margin (FTE) (0.12) (0.19)
----------------------------- ----- -----
2010
----
2nd Qtr 1st Qtr
------- -------
Impact of Excess Liquidity on
Net Interest Margin (FTE):
Net interest income (FTE) $424 $416
Less:
Interest earned on excess
liquidity (a) 2 3
------------------------- --- ---
Net interest income (FTE),
excluding excess liquidity $422 $413
--------------------------- ---- ----
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)
----------------------------- ----- -----
March 31, December 31, September 30,
2011 2010 2010
---- ---- ----
Tier 1 Common Capital Ratio:
Tier 1 capital (b) (c) $6,105 $6,027 $5,940
Less:
Trust preferred securities - - -
--------------------------
Tier 1 common capital (c) $6,105 $6,027 $5,940
------------------------- ------ ------ ------
Risk-weighted assets (b) (c) $58,849 $59,506 $59,608
Tier 1 capital ratio (c) 10.37% 10.13% 9.96%
Tier 1 common capital ratio
(c) 10.37 10.13 9.96
--------------------------- ----- ----- ----
Tangible Common Equity Ratio:
Total common shareholders'
equity $5,877 $5,793 $5,857
Less:
Goodwill 150 150 150
Other intangible assets 5 6 6
-----------------------
Tangible common equity $5,722 $5,637 $5,701
---------------------- ------ ------ ------
Total assets $55,017 $53,667 $55,004
Less:
Goodwill 150 150 150
Other intangible assets 5 6 6
-----------------------
Tangible assets $54,862 $53,511 $54,848
--------------- ------- ------- -------
Common equity ratio 10.68% 10.80% 10.65%
Tangible common equity ratio 10.43 10.54 10.39
---------------------------- ----- ----- -----
June 30, March 31,
2010 2010
---- ----
Tier 1 Common Capital Ratio:
Tier 1 capital (b) (c) $6,371 $6,311
Less:
Trust preferred securities 495 495
--------------------------
Tier 1 common capital (c) $5,876 $5,816
------------------------- ------ ------
Risk-weighted assets (b) (c) $59,877 $60,792
Tier 1 capital ratio (c) 10.64% 10.38%
Tier 1 common capital ratio
(c) 9.81 9.57
--------------------------- ---- ----
Tangible Common Equity Ratio:
Total common shareholders'
equity $5,792 $5,668
Less:
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
--------------- ------- -------
Common equity ratio 10.36% 9.93%
Tangible common equity ratio 10.11 9.68
---------------------------- ----- ----
(a) Excess liquidity represented by interest earned on and average
balances deposited with the Federal Reserve Bank (FRB).
(b) Tier 1 capital and risk-weighted assets as defined by regulation.
(c) March 31, 2011 Tier 1 capital and risk-weighted assets are estimated.
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.
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 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
