DALLAS, April 17, 2012 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported first quarter 2012 net income of $130 million, an increase of $34 million compared to $96 million for the fourth quarter 2011.
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(dollar
amounts
in
millions,
except
per
share
data) 1st Qtr '12 4th Qtr '11 1st Qtr '11
--------- ----------- ----------- -----------
Net interest income $443 $444 $395
Provision for loan losses 23 19 49
Noninterest income 206 182 207
Noninterest expenses 448 478 (a) 415
Provision for income taxes 48 33 35
Net income 130 96 103
Net income attributable to common shares 129 95 102
Diluted income per common share 0.66 0.48 (a) 0.57
Average diluted shares (in millions) 196 197 178
Tier 1 common capital ratio (c) 10.33% (b) 10.37% 10.35%
Tangible common equity ratio (c) 10.21 10.27 10.43
----------------------------- ----- ----- -----
(a) Included restructuring expenses of $37
million ($23 million, after tax;
$0.12 per diluted share) in fourth
quarter 2011, associated with the
acquisition of Sterling on July 28,
2011.
(b) March 31, 2012 ratio is estimated.
(c) See Reconciliation of Non-GAAP
Financial Measures.
"We were pleased by the continued growth in average total loans in the first quarter, driven by a $1.2 billion, or 5 percent, increase in average commercial loans," said Ralph W. Babb Jr., chairman and chief executive officer. "The increase in average commercial loans, when compared to the fourth quarter of 2011, was broad-based, across a majority of business lines and all major markets.
"Noninterest income increased $24 million, driven by a $10 million, or 6 percent, increase in customer-driven fees, offsetting the headwinds of regulatory reform.
"We continue to approach capital management from a position of strength," said Babb. "As we announced on March 14, 2012, the Federal Reserve did not object to our capital plan and the capital distributions contemplated in the plan. The capital plan, which was approved by our board of directors, provides for up to $375 million in equity repurchases from the first quarter 2012 through the first quarter 2013. We had $33 million in equity repurchases under the share repurchase program in the first quarter 2012. A dividend proposal that would increase the quarterly dividend 50 percent, from 10 cents per share to 15 cents per share, will be considered by our board at its next meeting on April 24, 2012."
First Quarter 2012 Highlights Compared to Fourth Quarter 2011
-- Net income of $130 million, or $0.66 per fully diluted share, increased
36 percent compared to fourth quarter 2011.
-- Average total loans increased $815 million, or 2 percent, primarily
reflecting an increase of $1.2 billion, or 5 percent, in commercial
loans, partially offset by a decrease of $352 million, or 3 percent, in
commercial real estate loans (commercial mortgage and real estate
construction loans). The increase in commercial loans was broad-based,
primarily driven by increases in National Dealer Services, Energy,
Global Corporate Banking, Middle Market Banking, and Technology and Life
Sciences.
-- Period-end loans increased $333 million, or 1 percent, from December 31,
2011 to March 31, 2012, primarily reflecting an increase of $644
million, or 3 percent, in commercial loans, partially offset by a $276
million, or 2 percent, decrease in commercial real estate loans. The
increase in period-end commercial loans was primarily driven by
increases in National Dealer Services, Middle Market Banking, Global
Corporate Banking and Energy, partially offset by decreases in Mortgage
Banker Finance and Small Business Banking.
-- Average deposits increased $532 million, or 1 percent, primarily
reflecting an increase of $461 million in noninterest-bearing deposits.
Period end deposits increased $1.5 billion from December 31, 2011 to a
record $49.3 billion at March 31, 2012, while funding costs continued to
decline. The increase in average deposits primarily reflected increases
in Global Corporate Banking, the Financial Services Division, Technology
and Life Sciences, and Private Banking, partially offset by decreases in
Small Business Banking and Energy.
-- Credit quality continued to improve in the first quarter 2012. Net
credit-related charge-offs of $45 million decreased for the eleventh
consecutive quarter. The provision for loan losses was $23 million in
the first quarter 2012, compared to $19 million in the fourth quarter
2011.
-- Noninterest income increased to $206 million in the first quarter 2012,
compared to $182 million for the fourth quarter 2011. The $24 million
increase in large part resulted from increases in customer-driven fee
income categories.
-- Noninterest expenses decreased $30 million to $448 million in the first
quarter 2012, compared to the fourth quarter 2011. The decrease was
primarily due to a $37 million decrease in merger and restructuring
charges related to the Sterling acquisition.
-- As previously announced, the Federal Reserve completed its review of
Comerica's 2012 Capital Plan in the first quarter 2012 and did not
object to the capital distributions contemplated in the plan, including
up to $375 million of equity repurchases in the five-quarter period
ending March 31, 2013 and a 50 percent increase in the quarterly
dividend. Comerica repurchased 1.1 million shares of common stock under
the share repurchase program in the first quarter 2012.
Net Interest Income
(dollar amounts
in millions) 1st Qtr '12 4th Qtr '11 1st Qtr '11
--------------- ----------- ----------- -----------
Net interest
income $443 $444 $395
Net interest
margin 3.19% 3.19% 3.25%
Selected average
balances:
Total earning
assets $56,186 $55,676 $49,347
Total investment
securities 9,889 9,781 7,311
Total loans 42,269 41,454 39,551
Total deposits 48,311 47,779 40,598
Total
noninterest-
bearing deposits 19,637 19,176 15,459
----------------- ------ ------ ------
-- Net interest income of $443 million in the first quarter 2012 decreased
$1 million compared to the fourth quarter 2011, as the benefit from a
$510 million increase in average earning assets ($7 million) and lower
funding costs ($2 million) was offset by lower loan yields ($5 million)
and one less day in the quarter ($5 million). The lower loan yields
reflected a shift in the average loan portfolio mix, largely due to the
decrease in average commercial real estate loans and the increase in
average commercial loans. Accretion of the purchase discount on the
acquired Sterling loan portfolio was $25 million in the first quarter
2012, compared to $26 million in the fourth quarter 2011. For the
remainder of 2012, $35 million to $45 million of accretion is expected
to be recognized.
-- Average earning assets increased $510 million in the first quarter 2012
compared to the fourth quarter 2011, primarily reflecting increases of
$815 million in average loans and $108 million in average investment
securities available-for-sale, partially offset by a $417 million
decrease in average Federal Reserve Bank deposits.
-- Average deposits increased $532 million in the first quarter 2012,
compared to the fourth quarter 2011, primarily due to a $461 million
increase in average noninterest-bearing deposits.
Noninterest Income
Noninterest income was $206 million for the first quarter 2012, compared to $182 million for the fourth quarter 2011. The $24 million increase primarily resulted from a $10 million, or 6 percent, increase in customer-driven fee income and a $9 million increase in net securities gains. The increase in customer-driven fee income included increases in service charges on deposit accounts ($4 million), investment banking fees ($3 million), fiduciary income ($2 million) and commercial lending fees ($2 million). The increase in net securities gains reflected an increase of $4 million in gains from redemptions of auction-rate securities in the first quarter 2012, when compared to fourth quarter 2011, and $5 million in charges in the fourth quarter 2011 related to a derivative contract tied to the conversion rate of Visa Class B shares.
Noninterest Expenses
Noninterest expenses totaled $448 million in the first quarter 2012, a decrease of $30 million compared to $478 million in the fourth quarter 2011. The decrease in noninterest expenses was primarily due to decreases in merger and restructuring charges ($37 million), net occupancy expense ($6 million), and salaries expense ($4 million), partially offset by increases in employee benefits expense ($8 million), primarily due to an increase in pension expense, and litigation and legal expenses ($5 million), included in other noninterest expenses. The decrease in net occupancy expense in part reflected savings related to increased efficiency in space utilization. Restructuring charges of approximately $40 million are expected to be incurred for the remainder of 2012, with $5 million to $10 million expected in second quarter 2012.
Credit Quality
(dollar amounts in millions) 1st Qtr '12 4th Qtr '11 1st Qtr '11
--------------------------- ----------- ----------- -----------
Net credit-related charge-offs $45 $60 $101
Net credit-related charge-offs/
Average total loans 0.43% 0.57% 1.03%
Provision for loan losses $23 $19 $49
Provision for credit losses on
lending-related commitments (1) (1) (3)
--- --- ---
Total provision for credit losses 22 18 46
Nonperforming loans (a) 856 887 1,030
Nonperforming assets (NPAs) (a) 923 981 1,104
NPAs/Total loans and foreclosed
property 2.14% 2.29% 2.81%
Loans past due 90 days or more and
still accruing $50 $58 $72
Allowance for loan losses 704 726 849
Allowance for credit losses on
lending-related commitments (b) 25 26 32
--- --- ---
Total allowance for credit losses 729 752 881
Allowance for loan losses/Total
loans (c) 1.64% 1.70% 2.17%
Allowance for loan losses/
Nonperforming loans 82 82 82
-------------------------- --- --- ---
(a) Excludes loans acquired with credit
impairment.
(b) Included in "Accrued expenses and
other liabilities" on the
consolidated balance sheets.
(c) Reflects the impact of acquired
loans, which were initially
recorded at fair value, with no
related allowance for loan losses.
"Credit quality continued to improve in the first quarter," said Babb. "Net charge-offs, which decreased $15 million to $45 million in the first quarter, are at the lowest level since the third quarter of 2007. The provision for loan losses was relatively stable. Our expectation is that we will continue to see the provision and net-charge offs at these levels for the remainder of the year assuming the current level of economic growth is sustained."
-- Net credit-related charge-offs decreased $15 million to $45 million in
the first quarter 2012, from $60 million in the fourth quarter 2011. The
decrease in net credit-related charge-offs was broad-based, spread
across many business lines.
-- The provision for loan losses was $23 million in the first quarter 2012,
compared to $19 million in the fourth quarter 2011. The change in the
provision for loan losses reflects increased loan volumes.
-- Internal watch list loans continued the downward trend, declining $261
million in the first quarter 2012, to $4.2 billion at March 31, 2012.
Nonperforming assets decreased $58 million to $923 million at March 31,
2012.
-- During the first quarter 2012, $69 million of borrower relationships
over $2 million were transferred to nonaccrual status, a decrease of $30
million from the fourth quarter 2011.
-- The allowance for loan losses to total loans ratio was 1.64 percent and
1.70 percent at March 31, 2012 and December 31, 2011, respectively.
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $62.6 billion and $7.0 billion, respectively, at March 31, 2012, compared to $61.0 billion and $6.9 billion, respectively, at December 31, 2011. There were approximately 197 million common shares outstanding at March 31, 2012. Comerica repurchased $33 million of common stock (1.1 million shares) under the share repurchase program during the first quarter 2012.
The Federal Reserve completed its review of Comerica's 2012 Capital Plan in March 2012 and did not object to the capital distributions contemplated in the plan. The capital plan provides for up to $375 million in equity repurchases for the five-quarter period ending March 31, 2013. The capital plan, which was approved by Comerica's Board of Directors, further contemplates a 50 percent increase in Comerica's quarterly dividend, from 10 cents per share to 15 cents per share. The dividend proposal will be considered by the Board at its April 24, 2012 meeting. In addition, the capital plan includes the authority to redeem the remaining $25 million of trust preferred securities outstanding as of March 31, 2012.
Comerica's tangible common equity ratio was 10.21% at March 31, 2012, a decrease of 6 basis points from December 31, 2011. The estimated Tier 1 common capital ratio decreased 4 basis points, to 10.33% at March 31, 2012, from December 31, 2011.
Full-Year 2012 Outlook Compared to Full-Year 2011
For 2012, management expects the following, assuming a continuation of the current economic environment:
-- Average loans increasing moderately.
-- Net interest income increasing moderately.
-- Net credit-related charge-offs and provision for credit losses
declining.
-- Noninterest income relatively stable.
-- Noninterest expenses relatively stable.
-- Effective tax rate of approximately 27 percent.
Business Segments
Comerica's operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank and Wealth Management. The Finance Division is also reported 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, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2012 results compared to fourth quarter 2011.
The following table presents net income (loss) by business segment.
(dollar amounts
in millions) 1st Qtr '12 4th Qtr '11 1st Qtr '11
--------------- ----------- ----------- -----------
Business Bank $206 89% $201 94% $167 93%
Retail Bank 14 6 10 4 (2) (1)
Wealth Management 11 5 5 2 14 8
----------------- --- --- --- --- --- ---
231 100% 216 100% 179 100%
Finance (92) (94) (75)
Other (a) (9) (26) (1)
-------- --- --- ---
Total 130 $96 $103
----- --- --- ----
(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) '12 '11 '11
------------------ -------- -------- --------
Net interest income
(FTE) $379 $383 $341
Provision for loan
losses 1 (4) 18
Noninterest income 81 73 77
Noninterest expenses 159 161 160
Net income 206 201 167
Net credit-related
charge-offs 28 32 73
Selected average
balances:
Assets 33,184 32,151 30,092
Loans 32,240 31,257 29,609
Deposits 23,997 23,296 20,084
-------- ------ ------ ------
-- Average loans increased $983 million, primarily due to increases in
National Dealer Services, Energy, Global Corporate Banking, Technology
and Life Sciences, and Middle Market, partially offset by a decline in
Commercial Real Estate.
-- Average deposits increased $701 million, primarily due to increases in
the Financial Services Division, Global Corporate Banking, and
Technology and Life Sciences, partially offset by a decline in Energy.
-- Net interest income decreased $4 million, primarily due to one less day
in the quarter. The benefit from increases in average loan balances and
lower deposit rates was offset by an increase in net funds transfer
pricing (FTP) funding costs and lower loan yields.
-- The provision for loan losses increased $5 million, primarily reflecting
increases in Middle Market and Commercial Real Estate, partially offset
by a decrease in Technology and Life Sciences.
-- Noninterest income increased $8 million, primarily reflecting increases
in service charges on deposit accounts, commercial lending fees, warrant
income and customer derivative income.
Retail Bank
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '12 '11 '11
------------------ -------- -------- --------
Net interest income
(FTE) $167 $176 $139
Provision for loan
losses 4 15 23
Noninterest income 42 35 42
Noninterest expenses 184 182 162
Net income (loss) 14 10 (2)
Net credit-related
charge-offs 12 16 23
Selected average
balances:
Assets 6,173 6,250 5,558
Loans 5,462 5,571 5,106
Deposits 20,373 20,715 17,360
-------- ------ ------ ------
-- Average loans declined $109 million, primarily due to decreases in
Personal Banking and Small Business Banking.
-- Average deposits decreased $342 million, primarily due to a decrease in
Small Business Banking.
-- Net interest income decreased $9 million, primarily due to a decrease in
FTP funding credits, one less day in the quarter and lower loan yields,
partially offset by lower deposit rates.
-- The provision for loan losses decreased $11 million, reflecting declines
in both Personal Banking and Small Business Banking.
-- Noninterest income increased $7 million, primarily due to a fourth
quarter 2011 charge of $5 million related to a derivative contract tied
to the conversion rate of Visa Class B shares.
Wealth Management
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'12 '11 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $47 $46 $44
Provision for loan losses 14 10 8
Noninterest income 65 55 64
Noninterest expenses 81 83 78
Net income 11 5 14
Net credit-related charge-
offs 5 12 5
Selected average balances:
Assets 4,636 4,672 4,809
Loans 4,565 4,618 4,807
Deposits 3,611 3,400 2,800
-------- ----- ----- -----
-- Average loans decreased $53 million.
-- Average deposits increased $211 million, primarily reflecting an
increase in Private Banking.
-- Net interest income increased $1 million, primarily due to an increase
in average deposit balances.
-- The provision for loan losses increased $4 million, primarily due to an
increase in the Florida market.
-- Noninterest income increased $10 million, primarily due to increases in
gains on the redemption of auction-rate securities, investment banking
fees and fiduciary income.
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, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2012 results compared to fourth quarter 2011.
The following table presents net income (loss) by market segment.
(dollar amounts
in millions) 1st Qtr '12 4th Qtr '11 1st Qtr '11
--------------- ----------- ----------- -----------
Midwest $68 30% $53 25% $53 29%
Western 65 28 65 30 51 28
Texas 49 21 55 26 29 16
Florida (1) - (1) (1) (4) (2)
Other Markets 38 16 32 15 38 22
International 12 5 12 5 12 7
------------- --- --- --- --- --- ---
231 100% 216 100% 179 100%
Finance & Other
Businesses (a) (101) (120) (76)
--------------- ---- ---- ---
Total $130 $96 $103
----- ---- --- ----
(a) Includes discontinued operations
and items not directly
associated with the geographic
markets.
Midwest Market
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'12 '11 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $198 $202 $203
Provision for loan losses 10 20 34
Noninterest income 98 85 100
Noninterest expenses 183 185 188
Net income 68 53 53
Net credit-related charge-
offs 18 32 46
Selected average balances:
Assets 14,095 13,976 14,303
Loans 13,829 13,725 14,104
Deposits 19,415 19,076 18,230
-------- ------ ------ ------
-- Average loans increased $104 million, primarily due to an increase in
National Dealer Services.
-- Average deposits increased $339 million, primarily due to increases in
Personal Banking and the Financial Services Division.
-- Net interest income decreased $4 million, primarily due one less day in
the quarter, lower loan yields, and lower net FTP funding credits,
partially offset by an increase in average loan balances and lower
deposit rates.
-- The provision for loan losses decreased $10 million, primarily
reflecting decreases in Small Business Banking, Commercial Real Estate,
Personal Banking and Global Corporate Banking, partially offset by an
increase in Middle Market.
-- Noninterest income increased $13 million, primarily due to fourth
quarter 2011 charges of $5 million related to a derivative contract tied
to the conversion rate of Visa Class B shares and increases in
investment banking fees, commercial lending fees, service charges on
deposit accounts and fiduciary income.
Western Market
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '12 '11 '11
------------------ -------- -------- --------
Net interest income
(FTE) $171 $170 $164
Provision for loan
losses (7) (12) 11
Noninterest income 33 33 37
Noninterest expenses 107 109 109
Net income 65 65 51
Net credit-related
charge-offs 11 5 26
Selected average
balances:
Assets 12,623 12,266 12,590
Loans 12,383 12,026 12,383
Deposits 13,897 13,671 12,235
-------- ------ ------ ------
-- Average loans increased $357 million, primarily due to increases in
National Dealer Services and Technology and Life Sciences.
-- Average deposits increased $226 million, primarily due to an increase in
the Financial Services Division.
-- Net interest income increased $1 million, primarily due to an increase
in average loan balances, partially offset by lower loan yields and one
less day in the quarter.
-- The provision for loan losses increased $5 million, primarily reflecting
increases in Commercial Real Estate, Small Business Banking and Middle
Market, partially offset by a decrease in Technology and Life Sciences.
Texas Market
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'12 '11 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $151 $158 $87
Provision for loan losses 14 8 4
Noninterest income 31 26 23
Noninterest expenses 92 89 61
Net income 49 55 29
Net credit-related charge-
offs 7 4 8
Selected average balances:
Assets 10,082 9,712 7,031
Loans 9,295 8,952 6,824
Deposits 10,229 10,333 5,786
-------- ------ ------ -----
-- Average loans increased $343 million, led by an increase in Energy, as
well as increases in Middle Market and Global Corporate Banking,
partially offset by a decrease in Commercial Real Estate.
-- Average deposits decreased $104 million, primarily reflecting a decrease
in Energy.
-- Net interest income decreased $7 million, primarily due to lower loan
yields, an increase in net FTP funding costs, and one less day in the
quarter, partially offset by an increase in average loan balances and
lower deposit rates.
-- The provision for loan losses increased $6 million, primarily due to
increases in Commercial Real Estate and Middle Market, partially offset
by a decrease in Technology and Life Sciences.
-- Noninterest income increased $5 million, primarily due to increases
across numerous categories.
Florida Market
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'12 '11 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $10 $11 $11
Provision for loan losses 6 4 8
Noninterest income 4 4 4
Noninterest expenses 9 13 12
Net income (1) (1) (4)
Net credit-related charge-
offs 2 7 8
Selected average balances:
Assets 1,416 1,435 1,553
Loans 1,418 1,457 1,580
Deposits 424 435 367
-------- --- --- ---
-- Average loans decreased $39 million.
-- The provision for loan losses increased $2 million, primarily due to an
increase in Private Banking, partially offset by a decrease in
Commercial Real Estate.
-- Noninterest expenses decreased $4 million, due to decreases across
numerous categories.
Conference Call and Webcast
Comerica will host a conference call to review first quarter 2012 financial results at 7 a.m. CT Tuesday, April 17, 2012. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 62064995). The call and supplemental financial information can also be accessed via Comerica's "Investor Relations" page at www.comerica.com. A telephone replay will be available approximately two hours following the conference call through April 30, 2012. The conference call replay can be accessed by calling (855) 859-2056 or (404) 537-3406 (event ID No. 62064995). 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 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 a reconciliation 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," "contemplates," "feels," "expects," "estimates," "seeks," "strives," "plans," "intends," "outlook," "forecast," "position," "target," "mission," "assume," "achievable," "potential," "strategy," "goal," "aspiration," "opportunity," "initiative," "outcome," "continue," "remain," "maintain," "on course," "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; changes in monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets; changes in Comerica's credit rating; the interdependence of financial service companies; changes in regulation or oversight; unfavorable developments concerning credit quality; the acquisition of Sterling Bancshares, Inc., or any future acquisitions; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers; the implementation of Comerica's strategies and business models, including the implementation of revenue enhancements and efficiency improvements; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties, failure of technology infrastructure or information security incidents; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; competitive product and pricing pressures among financial institutions within Comerica's markets; changes in customer behavior; 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 terrorist activities and other hostilities; the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; changes in accounting standards and the critical nature of Comerica's accounting policies. 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 12 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2011. Forward-looking statements speak only as of the date they are made. Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this news release or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
------------------
March 31, December 31, March 31,
(in
millions,
except
per
share
data) 2012 2011 2011
---------- ---- ---- ----
PER
COMMON
SHARE
AND
COMMON
STOCK
DATA
Diluted
net
income $0.66 $0.48 $0.57
Cash
dividends
declared 0.10 0.10 0.10
Common
shareholders'
equity
(at
period
end) 35.44 34.80 33.25
Tangible
common
equity
(at
period
end) (a) 32.06 31.42 32.37
Average
diluted
shares
(in
thousands) 196,021 196,729 178,425
----------- ------- ------- -------
KEY
RATIOS
Return on
average
common
shareholders'
equity 7.50% 5.51% 7.08%
Return on
average
assets 0.84 0.63 0.77
Tier 1
common
capital
ratio
(a) (b) 10.33 10.37 10.35
Tier 1
risk-
based
capital
ratio
(b) 10.37 10.41 10.35
Total
risk-
based
capital
ratio
(b) 14.11 14.25 14.80
Leverage
ratio
(b) 10.97 10.92 11.37
Tangible
common
equity
ratio
(a) 10.21 10.27 10.43
-------- ----- ----- -----
AVERAGE
BALANCES
Commercial
loans $24,736 $23,515 $21,496
Real
estate
construction
loans:
Commercial
Real
Estate
business
line (c) 1,056 1,189 1,754
Other
business
lines
(d) 397 430 425
--- --- ---
Total
real
estate
construction
loans 1,453 1,619 2,179
Commercial
mortgage
loans:
Commercial
Real
Estate
business
line (c) 2,520 2,552 1,978
Other
business
lines
(d) 7,682 7,836 7,812
----- ----- -----
Total
commercial
mortgage
loans 10,202 10,388 9,790
Lease
financing 897 919 987
International
loans 1,205 1,128 1,219
Residential
mortgage
loans 1,519 1,591 1,599
Consumer
loans 2,257 2,294 2,281
----- ----- -----
Total
loans 42,269 41,454 39,551
Earning
assets 56,186 55,676 49,347
Total
assets 61,613 61,045 53,775
Noninterest-
bearing
deposits 19,637 19,176 15,459
Interest-
bearing
deposits 28,674 28,603 25,139
------ ------ ------
Total
deposits 48,311 47,779 40,598
Common
shareholders'
equity 6,939 6,947 5,835
-------------- ----- ----- -----
NET
INTEREST
INCOME
Net
interest
income
(fully
taxable
equivalent
basis) $444 $445 $396
Fully
taxable
equivalent
adjustment 1 1 1
Net
interest
margin
(fully
taxable
equivalent
basis) 3.19% 3.19% 3.25%
----------- ---- ---- ----
CREDIT
QUALITY
Nonaccrual
loans $830 $860 $996
Reduced-
rate
loans 26 27 34
--- --- ---
Total
nonperforming
loans
(e) 856 887 1,030
Foreclosed
property 67 94 74
--- --- ---
Total
nonperforming
assets
(e) 923 981 1,104
Loans
past due
90 days
or more
and
still
accruing 50 58 72
Gross
loan
charge-
offs 62 85 123
Loan
recoveries 17 25 22
--- --- ---
Net loan
charge-
offs 45 60 101
Allowance
for loan
losses 704 726 849
Allowance
for
credit
losses on
lending-
related
commitments 25 26 32
--- --- ---
Total
allowance
for
credit
losses 729 752 881
Allowance
for loan
losses as
a
percentage
of total
loans (f) 1.64% 1.70% 2.17%
Net loan
charge-
offs as
a
percentage
of
average
total
loans
(g) 0.43 0.57 1.03
Nonperforming
assets
as a
percentage
of total
loans
and
foreclosed
property
(e) 2.14 2.29 2.81
Allowance
for loan
losses as
a
percentage
of total
nonperforming
loans 82 82 82
-------------- --- --- ---
(a) See Reconciliation of Non-GAAP
Financial Measures.
(b) March 31, 2012 ratios are
estimated.
(c) Primarily loans to real estate
investors and developers.
(d) Primarily loans secured by owner-
occupied real estate.
(e) Excludes loans acquired with
credit-impairment.
(f) Reflects the impact of acquired
loans, which were initially
recorded at fair value with no
related allowance for loan
losses.
(g) Lending-related commitment
charge-offs were zero in all
periods presented.
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
March 31, December 31, March 31,
(in millions, except share data) 2012 2011 2011
------------------------------- ---- ---- ----
(unaudited) (unaudited)
ASSETS
Cash and due from banks $984 $982 $875
Federal funds sold 10 - -
Interest-bearing deposits with banks 2,966 2,574 3,570
Other short-term investments 180 149 154
Investment securities available-for-
sale 10,061 10,104 7,406
Commercial loans 25,640 24,996 21,360
Real estate construction loans 1,442 1,533 2,023
Commercial mortgage loans 10,079 10,264 9,697
Lease financing 872 905 958
International loans 1,256 1,170 1,326
Residential mortgage loans 1,485 1,526 1,550
Consumer loans 2,238 2,285 2,262
-------------- ----- ----- -----
Total loans 43,012 42,679 39,176
Less allowance for loan losses (704) (726) (849)
------------------------------ ---- ---- ----
Net loans 42,308 41,953 38,327
Premises and equipment 670 675 637
Accrued income and other assets 5,414 4,571 4,048
------------------------------- ----- ----- -----
Total assets $62,593 $61,008 $55,017
------------ ------- ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $20,741 $19,764 $16,357
Money market and NOW deposits 20,502 20,311 17,888
Savings deposits 1,586 1,524 1,457
Customer certificates of deposit 6,145 5,808 5,672
Foreign office time deposits 332 348 499
---------------------------- --- --- ---
Total interest-bearing deposits 28,565 27,991 25,516
------------------------------- ------ ------ ------
Total deposits 49,306 47,755 41,873
Short-term borrowings 82 70 61
Accrued expenses and other
liabilities 1,301 1,371 1,090
Medium- and long-term debt 4,919 4,944 6,116
-------------------------- ----- ----- -----
Total liabilities 55,608 54,140 49,140
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued -228,164,824 shares at
3/31/12 and 12/31/11
and 203,878,110 shares at 3/31/11 1,141 1,141 1,019
Capital surplus 2,154 2,170 1,464
Accumulated other comprehensive loss (326) (356) (382)
Retained earnings 5,630 5,546 5,317
Less cost of common stock in treasury
-31,032,920 shares at 3/31/12,
30,831,076 shares at 12/31/11 and
27,103,941 shares at 3/31/11 (1,614) (1,633) (1,541)
--------------------------------- ------ ------ ------
Total shareholders' equity 6,985 6,868 5,877
-------------------------- ----- ----- -----
Total liabilities and shareholders'
equity $62,593 $61,008 $55,017
----------------------------------- ------- ------- -------
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
March 31,
---------
(in millions, except per share
data) 2012 2011
------------------------------ ---- ----
INTEREST INCOME
Interest and fees on loans $411 $375
Interest on investment
securities 64 57
Interest on short-term
investments 3 2
---------------------- --- ---
Total interest income 478 434
INTEREST EXPENSE
Interest on deposits 19 22
Interest on medium- and long-
term debt 16 17
----------------------------- --- ---
Total interest expense 35 39
---------------------- --- ---
Net interest income 443 395
Provision for loan losses 23 49
------------------------- --- ---
Net interest income after
provision for loan losses 420 346
NONINTEREST INCOME
Service charges on deposit
accounts 56 52
Fiduciary income 38 39
Commercial lending fees 25 21
Letter of credit fees 17 18
Card fees 11 15
Foreign exchange income 9 9
Bank-owned life insurance 10 8
Brokerage fees 6 6
Net securities gains 5 2
Other noninterest income 29 37
------------------------ --- ---
Total noninterest income 206 207
NONINTEREST EXPENSES
Salaries 201 188
Employee benefits 60 50
----------------- --- ---
Total salaries and employee
benefits 261 238
Net occupancy expense 41 40
Equipment expense 17 15
Outside processing fee expense 26 24
Software expense 23 23
FDIC insurance expense 10 15
Advertising expense 7 7
Other real estate expense 4 8
Other noninterest expenses 59 45
-------------------------- --- ---
Total noninterest expenses 448 415
-------------------------- --- ---
Income before income taxes 178 138
Provision for income taxes 48 35
-------------------------- --- ---
NET INCOME 130 103
Less income allocated to
participating securities 1 1
------------------------- --- ---
Net income attributable to
common shares $129 $102
-------------------------- ---- ----
Earnings per common share:
Basic $0.66 $0.58
Diluted 0.66 0.57
Comprehensive income 160 110
Cash dividends declared on
common stock 20 17
Cash dividends declared per
common share 0.10 0.10
--------------------------- ---- ----
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
First Fourth Third Second First First Quarter 2012 Compared To:
(in millions, except per share data)
-----------------------------------
Quarter Quarter Quarter Quarter Quarter Fourth Quarter 2011 First Quarter 2011
2012 2011 2011 2011 2011 Amount Percent Amount Percent
---- ---- ---- ---- ---- ------ ------- ------ -------
INTEREST INCOME
Interest and fees on loans $411 $415 $405 $369 $375 $(4) (1)% $36 10%
Interest on investment securities 64 63 54 59 57 1 1 7 11
Interest on short-term investments 3 3 4 3 2 - (6) 1 34
---------------------------------- --- --- --- --- --- --- --- --- ---
Total interest income 478 481 463 431 434 (3) (1) 44 10
INTEREST EXPENSE
Interest on deposits 19 21 24 23 22 (2) (10) (3) (17)
Interest on medium- and long-term
debt 16 16 16 17 17 - 1 (1) (1)
--------------------------------- --- --- --- --- --- --- --- --- ---
Total interest expense 35 37 40 40 39 (2) (5) (4) (11)
---------------------- --- --- --- --- --- --- --- --- ---
Net interest income 443 444 423 391 395 (1) - 48 12
Provision for loan losses 23 19 38 47 49 4 21 (26) (53)
------------------------- --- --- --- --- --- --- --- --- ---
Net interest income after provision
for loan losses 420 425 385 344 346 (5) (1) 74 21
NONINTEREST INCOME
Service charges on deposit accounts 56 52 53 51 52 4 8 4 6
Fiduciary income 38 36 37 39 39 2 7 (1) (1)
Commercial lending fees 25 23 22 21 21 2 5 4 20
Letter of credit fees 17 18 19 18 18 (1) (3) (1) (6)
Card fees 11 11 17 15 15 - (2) (4) (24)
Foreign exchange income 9 10 11 10 9 (1) (11) - 6
Bank-owned life insurance 10 10 10 9 8 - (2) 2 15
Brokerage fees 6 5 5 6 6 1 15 - (10)
Net securities gains (losses) 5 (4) 12 4 2 9 N/M 3 N/M
Other noninterest income 29 21 15 29 37 8 38 (8) (19)
------------------------ --- --- --- --- --- --- --- --- ---
Total noninterest income 206 182 201 202 207 24 13 (1) -
NONINTEREST EXPENSES
Salaries 201 205 192 185 188 (4) (2) 13 7
Employee benefits 60 52 53 50 50 8 14 10 18
----------------- --- --- --- --- --- --- --- --- ---
Total salaries and employee benefits 261 257 245 235 238 4 1 23 10
Net occupancy expense 41 47 44 38 40 (6) (11) 1 4
Equipment expense 17 17 17 17 15 - (4) 2 8
Outside processing fee expense 26 27 25 25 24 (1) (3) 2 10
Software expense 23 23 22 20 23 - 1 - 1
Merger and restructuring charges - 37 33 5 - (37) (98) - N/M
FDIC insurance expense 10 8 8 12 15 2 19 (5) (31)
Advertising expense 7 7 7 7 7 - 2 - -
Other real estate expense 4 3 5 6 8 1 21 (4) (57)
Other noninterest expenses 59 52 54 44 45 7 13 14 31
-------------------------- --- --- --- --- --- --- --- --- ---
Total noninterest expenses 448 478 460 409 415 (30) (6) 33 8
-------------------------- --- --- --- --- --- --- --- --- ---
Income before income taxes 178 129 126 137 138 49 38 40 29
Provision for income taxes 48 33 28 41 35 15 43 13 37
-------------------------- --- --- --- --- --- --- --- --- ---
NET INCOME 130 96 98 96 103 34 36 27 26
Less income allocated to
participating securities 1 1 1 1 1 - 72 - 33
------------------------- --- --- --- --- --- --- --- --- ---
Net income attributable to common
shares $129 $95 $97 $95 $102 $34 36% $27 26%
--------------------------------- ---- --- --- --- ---- --- --- --- ---
Earnings per common share:
Basic $0.66 $0.48 $0.51 $0.54 $0.58 $0.18 38% $0.08 14%
Diluted 0.66 0.48 0.51 0.53 0.57 0.18 38 0.09 16
Comprehensive income (loss) 160 (30) 176 170 110 190 N/M 50 46
Cash dividends declared on common
stock 20 20 20 18 17 - (1) 3 11
Cash dividends declared per common
share 0.10 0.10 0.10 0.10 0.10 - - - -
---------------------------------- ---- ---- ---- ---- ---- --- --- --- ---
N/M - Not Meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
2012 2011
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
------------ ------- ------- ------- ------- -------
Balance at beginning of period $726 $767 $806 $849 $901
Loan charge-offs:
Commercial 25 28 33 66 65
Real estate construction:
Commercial Real Estate business
line (a) 2 4 11 12 8
Other business lines (b) - 1 - - 1
----------------------- --- --- --- --- ---
Total real estate construction 2 5 11 12 9
Commercial mortgage:
Commercial Real Estate business
line (a) 13 17 12 8 9
Other business lines (b) 13 24 21 23 25
----------------------- --- --- --- --- ---
Total commercial mortgage 26 41 33 31 34
International 2 2 - - 5
Residential mortgage 2 2 4 7 2
Consumer 5 7 9 9 8
-------- --- --- --- --- ---
Total loan charge-offs 62 85 90 125 123
Recoveries on loans previously
charged-off:
Commercial 9 11 5 13 4
Real estate construction 1 4 3 5 2
Commercial mortgage 3 9 3 5 9
Lease financing - - - 6 5
International 1 - - 4 1
Residential mortgage 1 - 1 1 -
Consumer 2 1 1 1 1
-------- --- --- --- --- ---
Total recoveries 17 25 13 35 22
---------------- --- --- --- --- ---
Net loan charge-offs 45 60 77 90 101
Provision for loan losses 23 19 38 47 49
------------------------- --- --- --- --- ---
Balance at end of period $704 $726 $767 $806 $849
------------------------ ---- ---- ---- ---- ----
Allowance for loan losses as a
percentage of total loans (c) 1.64% 1.70% 1.86% 2.06% 2.17%
Net loan charge-offs as a
percentage of average total loans 0.43 0.57 0.77 0.92 1.03
---------------------------------- ---- ---- ---- ---- ----
(a) Primarily charge-offs of
loans to real estate
investors and developers.
(b) Primarily charge-offs of
loans secured by owner-
occupied real estate.
(c) Reflects the impact of
acquired loans, which were
initially recorded at fair
value with no related
allowance for loan losses.
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited)
Comerica Incorporated and Subsidiaries
2012 2011
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
------------ ------- ------- ------- ------- -------
Balance at
beginning of
period $26 $27 $30 $32 $35
Add: Provision
for credit
losses on
lending-related
commitments (1) (1) (3) (2) (3)
---------------- --- --- --- --- ---
Balance at end of
period $25 $26 $27 $30 $32
----------------- --- --- --- --- ---
Unfunded lending-
related
commitments sold $ - $ - $ - $3 $2
----------------- --- --- --- --- --- --- --- ---
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2012 2011
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
------------ ------- ------- ------- ------- -------
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial $205 $237 $258 $261 $226
Real estate construction:
Commercial Real Estate
business line (a) 77 93 109 137 195
Other business lines (b) 8 8 3 2 3
----------------------- --- --- --- --- ---
Total real estate
construction 85 101 112 139 198
Commercial mortgage:
Commercial Real Estate
business line (a) 174 159 198 186 197
Other business lines (b) 275 268 275 269 293
----------------------- --- --- --- --- ---
Total commercial mortgage 449 427 473 455 490
Lease financing 4 5 5 6 7
International 4 8 7 7 4
------------- --- --- --- --- ---
Total nonaccrual business
loans 747 778 855 868 925
Retail loans:
Residential mortgage 69 71 65 60 58
Consumer:
Home equity 9 5 4 4 6
Other consumer 5 6 5 9 7
-------------- --- --- --- --- ---
Total consumer 14 11 9 13 13
-------------- --- --- --- --- ---
Total nonaccrual retail
loans 83 82 74 73 71
----------------------- --- --- --- --- ---
Total nonaccrual loans 830 860 929 941 996
Reduced-rate loans 26 27 29 33 34
------------------ --- --- --- --- ---
Total nonperforming loans
(c) 856 887 958 974 1,030
Foreclosed property 67 94 87 70 74
------------------- --- --- --- --- ---
Total nonperforming assets
(c) $923 $981 $1,045 $1,044 $1,104
-------------------------- ---- ---- ------ ------ ------
Nonperforming loans as a
percentage of total loans 1.99% 2.08% 2.32% 2.49% 2.63%
Nonperforming assets as a
percentage of total loans
and foreclosed property 2.14 2.29 2.53 2.66 2.81
Allowance for loan losses as
a percentage of total
nonperforming loans 82 82 80 83 82
Loans past due 90 days or
more and still accruing $50 $58 $81 $64 $72
------------------------- --- --- --- --- ---
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at
beginning of period $860 $929 $941 $996 $1,080
Loans transferred to
nonaccrual (d) 69 99 130 150 149
Nonaccrual business loan
gross charge-offs (e) (55) (76) (76) (109) (111)
Loans transferred to accrual
status (d) - - (15) - (4)
Nonaccrual business loans
sold (f) (7) (19) (15) (16) (60)
Payments/Other (g) (37) (73) (36) (80) (58)
------------------ --- --- --- --- ---
Nonaccrual loans at end of
period $830 $860 $929 $941 $996
-------------------------- ---- ---- ---- ---- ----
(a) Primarily loans to real estate investors and developers.
(b) Primarily loans secured by owner-occupied real estate.
(c) Excludes loans acquired with credit impairment.
(d) Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(e) Analysis of gross loan charge-offs:
Nonaccrual business loans $55 $76 $76 $109 $111
Performing watch list loans - - 1 - 2
Consumer and residential
mortgage loans 7 9 13 16 10
--- --- --- --- ---
Total gross loan charge-offs $62 $85 $90 $125 $123
--- --- --- ---- ----
(f) Analysis of loans sold:
Nonaccrual business loans $7 $19 $15 $16 $60
Performing watch list loans 11 - 16 6 35
--- --- --- --- ---
Total loans sold $18 $19 $31 $22 $95
--- --- --- --- ---
(g) 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, 2012 December 31, 2011 March 31, 2011
-------------- ----------------- --------------
Average Average Average Average Average Average
(dollar amounts in
millions)
------------------
Balance Interest Rate Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ---- ------- -------- ----
Commercial loans $24,736 $219 3.56% $23,515 $216 3.64% $21,496 $201 3.76%
Real estate construction
loans 1,453 17 4.58 1,619 21 5.26 2,179 19 3.51
Commercial mortgage
loans 10,202 119 4.73 10,388 119 4.54 9,790 95 3.95
Lease financing 897 8 3.41 919 8 3.44 987 9 3.62
International loans 1,205 11 3.76 1,128 10 3.63 1,219 12 3.87
Residential mortgage
loans 1,519 18 4.77 1,591 20 5.06 1,599 21 5.24
Consumer loans 2,257 20 3.49 2,294 21 3.58 2,281 19 3.42
-------------- ----- --- ---- ----- --- ---- ----- --- ----
Total loans (a) 42,269 412 3.92 41,454 415 3.98 39,551 376 3.85
Auction-rate securities
available-for-sale 352 1 0.63 426 1 0.64 554 1 0.88
Other investment
securities available-
for-sale 9,537 63 2.73 9,355 62 2.74 6,757 56 3.37
---------------------- ----- --- ---- ----- --- ---- ----- --- ----
Total investment
securities available-
for-sale 9,889 64 2.65 9,781 63 2.64 7,311 57 3.17
Federal funds sold 9 - 0.29 15 - 0.32 3 - 0.32
Interest-bearing
deposits with banks (b) 3,884 2 0.26 4,293 3 0.24 2,354 1 0.26
Other short-term
investments 135 1 1.97 133 1 2.26 128 1 2.68
---------------- --- --- ---- --- --- ---- --- --- ----
Total earning assets 56,186 479 3.44 55,676 482 3.45 49,347 435 3.57
Cash and due from banks 999 959 884
Allowance for loan
losses (737) (773) (908)
Accrued income and other
assets 5,165 5,183 4,452
----- ----- -----
Total assets $61,613 $61,045 $53,775
------- ------- -------
Money market and NOW
deposits $20,795 10 0.19 $20,716 12 0.21 $17,797 12 0.26
Savings deposits 1,543 - 0.08 1,652 - 0.12 1,421 - 0.09
Customer certificates of
deposit 5,978 8 0.57 5,872 9 0.60 5,509 10 0.76
Foreign office and other
time deposits 358 1 0.57 363 - 0.40 412 - 0.49
------------------------ --- --- ---- --- --- ---- --- --- ----
Total interest-bearing
deposits 28,674 19 0.26 28,603 21 0.29 25,139 22 0.37
Short-term borrowings 78 - 0.11 142 - 0.07 94 - 0.31
Medium- and long-term
debt 4,940 16 1.34 4,976 16 1.30 6,128 17 1.10
--------------------- ----- --- ---- ----- --- ---- ----- --- ----
Total interest-bearing
sources 33,692 35 0.42 33,721 37 0.44 31,361 39 0.51
Noninterest-bearing
deposits 19,637 19,176 15,459
Accrued expenses and
other liabilities 1,345 1,201 1,120
Total shareholders'
equity 6,939 6,947 5,835
----- ----- -----
Total liabilities and
shareholders' equity $61,613 $61,045 $53,775
------- ------- -------
Net interest income/
rate spread (FTE) $444 3.02 $445 3.01 $396 3.06
---- ---- ----
FTE adjustment $1 $1 $1
--- --- ---
Impact of net
noninterest-bearing
sources of funds 0.17 0.18 0.19
-------------------- ---- ---- ----
Net interest margin (as
a percentage of average
earning assets) (FTE)
(a) (b) 3.19% 3.19% 3.25%
------------------------ ---- ---- ----
(a) Accretion of the purchase
discount on the acquired loan
portfolio of $25 million in the
first quarter of 2012 and $26
million in the fourth quarter
of 2011 increased the net
interest margin by 18 basis
points in the first quarter of
2012 and by 19 basis points in
the fourth quarter of 2011.
(b) Excess liquidity, represented by
average balances deposited with
the Federal Reserve Bank,
reduced the net interest margin
by 21 basis points in the first
quarter of 2012, and by 24
basis points and 14 basis
points in the fourth and first
quarters of 2011, respectively.
CONSOLIDATED STATISTICAL DATA (unaudited)
Comerica Incorporated and Subsidiaries
(in millions, except per share data) March 31, December 31, September 30, June 30, March 31,
-----------------------------------
2012 2011 2011 2011 2011
---- ---- ---- ---- ----
Commercial loans:
Floor plan $2,152 $1,822 $1,209 $1,478 $1,893
Other 23,488 23,174 21,904 20,574 19,467
----- ------ ------ ------ ------ ------
Total commercial loans 25,640 24,996 23,113 22,052 21,360
Real estate construction loans:
Commercial Real Estate business line (a) 1,055 1,103 1,226 1,343 1,606
Other business lines (b) 387 430 422 385 417
----------------------- --- --- --- --- ---
Total real estate construction loans 1,442 1,533 1,648 1,728 2,023
Commercial mortgage loans:
Commercial Real Estate business line (a) 2,501 2,507 2,602 1,930 1,918
Other business lines (b) 7,578 7,757 7,937 7,649 7,779
----------------------- ----- ----- ----- ----- -----
Total commercial mortgage loans 10,079 10,264 10,539 9,579 9,697
Lease financing 872 905 927 949 958
International loans 1,256 1,170 1,046 1,162 1,326
Residential mortgage loans 1,485 1,526 1,643 1,491 1,550
Consumer loans:
Home equity 1,612 1,655 1,683 1,622 1,661
Other consumer 626 630 626 610 601
-------------- --- --- --- --- ---
Total consumer loans 2,238 2,285 2,309 2,232 2,262
-------------------- ----- ----- ----- ----- -----
Total loans $43,012 $42,679 $41,225 $39,193 $39,176
----------- ------- ------- ------- ------- -------
Goodwill $635 $635 $635 $150 $150
Core deposit intangible 27 29 32 - -
Loan servicing rights 3 3 3 4 4
Tier 1 common capital ratio (c) (d) 10.33% 10.37% 10.57% 10.53% 10.35%
Tier 1 risk-based capital ratio (d) 10.37 10.41 10.65 10.53 10.35
Total risk-based capital ratio (d) 14.11 14.25 14.84 14.80 14.80
Leverage ratio (d) 10.97 10.92 11.41 11.40 11.37
Tangible common equity ratio (c) 10.21 10.27 10.43 10.90 10.43
Common shareholders' equity per share of
common stock $35.44 $34.80 $34.94 $34.15 $33.25
Tangible common equity per share of common
stock (c) 32.06 31.42 31.57 33.28 32.37
Market value per share for the quarter:
High 34.00 27.37 35.79 39.00 43.53
Low 26.25 21.53 21.48 33.08 36.20
Close 32.36 25.80 22.97 34.57 36.72
Quarterly ratios:
Return on average common shareholders'
equity 7.50% 5.51% 5.91% 6.41% 7.08%
Return on average assets 0.84 0.63 0.67 0.70 0.77
Efficiency ratio 69.50 75.78 75.11 69.33 69.05
Number of banking centers 495 494 502 446 445
Number of employees - full time equivalent 9,195 9,397 9,701 8,915 8,955
------------------------------------------ ----- ----- ----- ----- -----
(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, 2012 ratios are
estimated.
PARENT COMPANY ONLY BALANCE SHEETS (unaudited)
Comerica Incorporated
March 31, December 31, March 31,
(in millions, except share data) 2012 2011 2011
------------------------------- ---- ---- ----
ASSETS
Cash and due from subsidiary bank $6 $7 7
Short-term investments with subsidiary bank 388 411 334
Other short-term investments 94 90 90
Investment in subsidiaries, principally banks 7,120 7,011 6,033
Premises and equipment 5 4 3
Other assets 183 177 174
------------ --- --- ---
Total assets $7,796 $7,700 $6,641
------------ ------ ------ ------
LIABILITIES AND SHAREHOLDERS' EQUITY
Medium- and long-term debt $660 $666 $631
Other liabilities 151 166 133
----------------- --- --- ---
Total liabilities 811 832 764
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares at 3/31/12 and 12/31/11 and 203,878,110 shares at 3/31/11 1,141 1,141 1,019
Capital surplus 2,154 2,170 1,464
Accumulated other comprehensive loss (326) (356) (382)
Retained earnings 5,630 5,546 5,317
Less cost of common stock in treasury - 31,032,920 shares at 3/31/12, 30,831,076 shares at 12/31/11, and 27,103,941 shares at 3/31/11 (1,614) (1,633) (1,541)
------------------------------------------------------------------------------------------------------------------------------------- ------ ------ ------
Total shareholders' equity 6,985 6,868 5,877
-------------------------- ----- ----- -----
Total liabilities and shareholders' equity $7,796 $7,700 $6,641
------------------------------------------ ------ ------ ------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Comerica Incorporated and Subsidiaries
Accumulated
Common Stock Other Total
(in millions, except per share data)
-----------------------------------
Shares Capital Comprehensive Retained Treasury Shareholders'
Outstanding Amount Surplus Loss Earnings Stock Equity
----------- ------ ------- ---- -------- ----- ------
BALANCE AT DECEMBER 31, 2010 176.5 $1,019 $1,481 $(389) $5,247 $(1,565) $5,793
Net income - - - - 103 - 103
Other comprehensive income, net of
tax - - - 7 - - 7
Cash dividends declared on common
stock ($0.10 per share) - - - - (17) - (17)
Purchase of common stock (0.5) - - - - (21) (21)
Net issuance of common stock under
employee stock plans 0.8 - (30) - (16) 45 (1)
Share-based compensation - - 13 - - - 13
--- --- --- --- --- ---
BALANCE AT MARCH 31, 2011 176.8 $1,019 $1,464 $(382) $5,317 $(1,541) $5,877
------------------------- ----- ------ ------ ----- ------ ------- ------
BALANCE AT DECEMBER 31, 2011 197.3 $1,141 $2,170 $(356) $5,546 $(1,633) $6,868
Net income - - - - 130 - 130
Other comprehensive income, net of
tax - - - 30 - - 30
Cash dividends declared on common
stock ($0.10 per share) - - - - (20) - (20)
Purchase of common stock (1.2) - - - - (36) (36)
Net issuance of common stock under
employee stock plans 1.1 - (32) - (26) 58 -
Share-based compensation - - 13 - - - 13
Other (0.1) - 3 - - (3) -
----- ---- --- --- --- --- --- ---
BALANCE AT MARCH 31, 2012 197.1 $1,141 $2,154 $(326) $5,630 $(1,614) $6,985
------------------------- ----- ------ ------ ----- ------ ------- ------
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts
in millions) Business Retail Wealth
Three Months
Ended March
31, 2012 Bank Bank Management Finance Other Total
------------ ---- ---- ---------- ------- ----- -----
Earnings
summary:
Net interest
income
(expense)
(FTE) $379 $167 $47 $(156) $7 $444
Provision for
loan losses 1 4 14 - 4 23
Noninterest
income 81 42 65 13 5 206
Noninterest
expenses 159 184 81 3 21 448
Provision
(benefit) for
income taxes
(FTE) 94 7 6 (54) (4) 49
--- --- --- --- ---
Net income
(loss) $206 $14 $11 $(92) $(9) $130
---- --- --- ---- --- ----
Net credit-
related
charge-offs $28 $12 $5 - - $45
Selected
average
balances:
Assets $33,184 $6,173 $4,636 $12,095 $5,525 $61,613
Loans 32,240 5,462 4,565 2 - 42,269
Deposits 23,997 20,373 3,611 161 169 48,311
Statistical
data:
Return on
average assets
(a) 2.49% 0.27% 0.97% N/M N/M 0.84%
Efficiency
ratio 34.74 87.73 75.23 N/M N/M 69.50
----- ----- ----- --- --- -----
Business Retail Wealth
Three Months
Ended December
31, 2011 Bank Bank Management Finance Other Total
--------------- ---- ---- ---------- ------- ----- -----
Earnings
summary:
Net interest
income
(expense)
(FTE) $383 $176 $46 $(169) $9 $445
Provision for
loan losses (4) 15 10 - (2) 19
Noninterest
income 73 35 55 18 1 182
Noninterest
expenses 161 182 83 3 49 478
Provision
(benefit) for
income taxes
(FTE) 98 4 3 (60) (11) 34
--- --- --- --- ---
Net income
(loss) $201 $10 $5 $(94) $(26) $96
---- --- --- ---- ---- ---
Net credit-
related
charge-offs $32 $16 $12 - - $60
Selected
average
balances:
Assets $32,151 $6,250 $4,672 $11,959 $6,013 $61,045
Loans 31,257 5,571 4,618 3 5 41,454
Deposits 23,296 20,715 3,400 200 168 47,779
Statistical
data:
Return on
average assets
(a) 2.50% 0.18% 0.45% N/M N/M 0.63%
Efficiency
ratio 35.55 84.31 82.12 N/M N/M 75.78
---------- ----- ----- ----- --- --- -----
Business Retail Wealth
Three Months
Ended March
31, 2011 Bank Bank Management Finance Other Total
------------ ---- ---- ---------- ------- ----- -----
Earnings
summary:
Net interest
income
(expense)
(FTE) $341 $139 $44 $(135) 7 $396
Provision for
loan losses 18 23 8 - - 49
Noninterest
income 77 42 64 18 6 207
Noninterest
expenses 160 162 78 2 13 415
Provision
(benefit) for
income taxes
(FTE) 73 (2) 8 (44) 1 36
--- --- --- --- --- ---
Net income
(loss) $167 $(2) $14 $(75) $(1) $103
---- --- --- ---- --- ----
Net credit-
related
charge-offs $73 $23 $5 - - $101
Selected
average
balances:
Assets $30,092 $5,558 $4,809 $9,370 $3,946 $53,775
Loans 29,609 5,106 4,807 22 7 39,551
Deposits 20,084 17,360 2,800 249 105 40,598
Statistical
data:
Return on
average assets
(a) 2.22% (0.05)% 1.14% N/M N/M 0.77%
Efficiency
ratio 38.14 89.19 74.38 N/M N/M 69.05
---------- ----- ----- ----- --- --- -----
(a) Return on average assets is
calculated based on the
greater of average assets
or average liabilities and
attributed equity.
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
MARKET SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts
in millions) Midwest Western Texas Florida Other International Finance Total
Three Months
Ended March
31, 2012 Markets & Other
Businesses
--- ----------
Earnings
summary:
Net interest
income
(expense)
(FTE) $198 $171 $151 $10 $45 $18 $(149) $444
Provision for
loan losses 10 (7) 14 6 (3) (1) 4 23
Noninterest
income 98 33 31 4 14 8 18 206
Noninterest
expenses 183 107 92 9 24 9 24 448
Provision
(benefit) for
income taxes
(FTE) 35 39 27 - - 6 (58) 49
--- --- --- --- --- --- --- ---
Net income
(loss) $68 $65 $49 $(1) $38 $12 $(101) $130
--- --- --- --- --- --- ----- ----
Net credit-
related
charge-offs $18 $11 $7 $2 $6 $1 - $45
Selected
average
balances:
Assets $14,095 $12,623 $10,082 $1,416 $4,021 $1,756 $17,620 $61,613
Loans 13,829 12,383 9,295 1,418 3,693 1,649 2 42,269
Deposits 19,415 13,897 10,229 424 2,628 1,388 330 48,311
Statistical
data:
Return on
average assets
(a) 1.33% 1.75% 1.72% (0.21)% 3.77% 2.73% N/M 0.84%
Efficiency
ratio 61.78 52.50 50.33 68.94 44.62 33.02 N/M 69.50
---------- ----- ----- ----- ----- ----- ----- --- -----
Three Months
Ended December
31, 2011 Midwest Western Texas Florida Other International Finance Total
Markets & Other
Businesses
--- ----------
Earnings
summary:
Net interest
income
(expense)
(FTE) $202 $170 $158 $11 $46 $18 $(160) $445
Provision for
loan losses 20 (12) 8 4 - 1 (2) 19
Noninterest
income 85 33 26 4 7 8 19 182
Noninterest
expenses 185 109 89 13 23 7 52 478
Provision
(benefit) for
income taxes
(FTE) 29 41 32 (1) (2) 6 (71) 34
--- --- --- --- --- --- --- ---
Net income
(loss) $53 $65 $55 $(1) $32 $12 $(120) $96
--- --- --- --- --- --- ----- ---
Net credit-
related
charge-offs $32 $5 $4 $7 $10 2 - $60
Selected
average
balances:
Assets $13,976 $12,266 $9,712 $1,435 $4,016 $1,668 $17,972 $61,045
Loans 13,725 12,026 8,952 1,457 3,718 1,568 8 41,454
Deposits 19,076 13,671 10,333 435 2,414 1,482 368 47,779
Statistical
data:
Return on
average assets
(a) 1.07% 1.77% 1.92% (0.37)% 3.15% 2.78% N/M 0.63%
Efficiency
ratio 63.47 53.94 48.13 92.29 44.64 28.20 N/M 75.78
---------- ----- ----- ----- ----- ----- ----- --- -----
Three Months
Ended March
31, 2011 Midwest Western Texas Florida Other International Finance Total
Markets & Other
Businesses
--- ----------
Earnings
summary:
Net interest
income
(expense)
(FTE) $203 $164 $87 $11 $41 $18 $(128) $396
Provision for
loan losses 34 11 4 8 (7) (1) - 49
Noninterest
income 100 37 23 4 11 8 24 207
Noninterest
expenses 188 109 61 12 21 9 15 415
Provision
(benefit) for
income taxes
(FTE) 28 30 16 (1) - 6 (43) 36
--- --- --- --- --- --- --- ---
Net income
(loss) $53 $51 $29 $(4) $38 $12 $(76) $103
--- --- --- --- --- --- ---- ----
Net credit-
related
charge-offs $46 $26 $8 $8 $9 4 - $101
Selected
average
balances:
Assets $14,303 $12,590 $7,031 $1,553 $3,247 $1,735 $13,316 $53,775
Loans 14,104 12,383 6,824 1,580 2,960 1,671 29 39,551
Deposits 18,230 12,235 5,786 367 2,298 1,328 354 40,598
Statistical
data:
Return on
average assets
(a) 1.07% 1.54% 1.65% (0.93)% 4.74% 2.79% N/M 0.77%
Efficiency
ratio 62.11 54.34 55.39 80.08 41.67 34.62 N/M 69.05
---------- ----- ----- ----- ----- ----- ----- --- -----
(a) Return on average assets is
calculated based on the
greater of average assets
or average liabilities and
attributed equity.
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
Comerica Incorporated and Subsidiaries
March 31, December 31, September 30, June 30, March 31,
(dollar amounts in
millions) 2012 2011 2011 2011 2011
------------------ ---- ---- ---- ---- ----
Tier 1 Common
Capital Ratio:
Tier 1 capital (a)
(b) $6,672 $6,582 $6,560 $6,193 $6,107
Less:
Trust preferred
securities 25 25 49 - -
Tier 1 common
capital (b) $6,647 $6,557 $6,511 $6,193 $6,107
------------- ------ ------ ------ ------ ------
Risk-weighted
assets (a) (b) $64,362 $63,244 $61,593 $58,795 $58,998
--------------- ------- ------- ------- ------- -------
Tier 1 risk-based
capital ratio (b) 10.37% 10.41% 10.65% 10.53% 10.35%
Tier 1 common
capital ratio (b) 10.33 10.37 10.57 10.53 10.35
------------------ ----- ----- ----- ----- -----
Tangible Common
Equity Ratio:
Common
shareholders'
equity $6,985 $6,868 $6,951 $6,038 $5,877
Less:
Goodwill 635 635 635 150 150
Other intangible
assets 30 32 35 4 5
Tangible common
equity $6,320 $6,201 $6,281 $5,884 $5,722
--------------- ------ ------ ------ ------ ------
Total assets $62,593 $61,008 $60,888 $54,141 $55,017
Less:
Goodwill 635 635 635 150 150
Other intangible
assets 30 32 35 4 5
--- --- --- --- ---
Tangible assets $61,928 $60,341 $60,218 $53,987 $54,862
--------------- ------- ------- ------- ------- -------
Common equity ratio 11.16% 11.26% 11.42% 11.15% 10.68%
Tangible common
equity ratio 10.21 10.27 10.43 10.90 10.43
--------------- ----- ----- ----- ----- -----
Tangible Common
Equity per Share
of Common Stock:
Common
shareholders'
equity $6,985 $6,868 $6,951 $6,038 $5,877
Tangible common
equity 6,320 6,201 6,281 5,884 5,722
--------------- ----- ----- ----- ----- -----
Shares of common
stock outstanding
(in millions) 197 197 199 177 177
------------------ --- --- --- --- ---
Common
shareholders'
equity per share
of common stock $35.44 $34.80 $34.94 $34.15 $33.25
Tangible common
equity per share
of common stock 32.06 31.42 31.57 33.28 32.37
----------------- ----- ----- ----- ----- -----
(a) Tier 1 capital and risk-
weighted assets as defined
by regulation.
(b) March 31, 2012 Tier 1
capital and risk-weighted
assets are estimated.
The Tier 1 common capital ratio
removes preferred stock and
qualifying trust preferred
securities from Tier 1 capital as
defined by and calculated in
conformity with bank regulations.
The tangible common equity removes
preferred stock and the effect of
intangible assets from capital and
the effect of intangible assets
from total assets and tangible
common equity per share of common
stock removes the effect of
intangible assets from common
shareholders equity per share of
common stock. 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
