DALLAS, Oct. 17, 2012 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported third quarter 2012 net income of $117 million, compared to $144 million for the second quarter 2012. Earnings per fully diluted share was 61 cents compared to 73 cents for the second quarter 2012. Third quarter 2012 earnings per fully diluted share included restructuring expenses of 8 cents associated with the acquisition of Sterling Bancshares, Inc. (Sterling) compared to 2 cents for the second quarter 2012.
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(dollar
amounts
in
millions,
except
per
share
data) 3rd Qtr '12 2nd Qtr '12 3rd Qtr '11
--------- ----------- ----------- -----------
Net
interest
income
(a) $427 $435 $423
Provision
for
credit
losses 22 19 35
Noninterest
income 197 211 201
Noninterest
expenses
(b) 449 433 463
Provision
for
income
taxes 36 50 28
Net
income 117 144 98
Net
income
attributable
to
common
shares 116 142 97
Diluted
income
per
common
share 0.61 0.73 0.51
Average
diluted
shares
(in
millions) 191 194 192
Tier
1
common
capital
ratio
(d) 10.32% (c) 10.38% 10.57%
Tangible
common
equity
ratio
(d) 10.25 10.27 10.43
-------- ----- ----- -----
(a) Included
accretion of
the purchase
discount on
the acquired
Sterling loan
portfolio of
$15 million
($9 million,
after tax),
$18 million
($11 million,
after tax) and
$27 million
($17 million,
after tax) in
the third and
second quarter
2012 and the
third quarter
2011,
respectively.
(b) Included restructuring expenses of
$25 million ($16 million, after
tax), $8 million ($5 million, after
tax) and $33 million ($21 million,
after tax) in the third and second
quarter 2012 and the third quarter
2011, respectively, associated with
the acquisition of Sterling.
(c) September 30, 2012 ratio is
estimated.
(d) See Reconciliation of Non-GAAP
Financial Measures.
--- ------------------------------
"Our customer relationship focus supported loan and deposit growth in the third quarter, despite a slow growing national economy," said Ralph W. Babb Jr., chairman and chief executive officer. "Average loans were up $369 million, or 1 percent, compared to the second quarter, primarily reflecting an increase of $717 million, or 3 percent, in commercial loans. This was the ninth consecutive quarter of average commercial loan growth, resulting in more than a 20 percent year-over-year increase, including our acquisition of Sterling in July 2011. The increase in average commercial loans in the third quarter was primarily driven by increases in Mortgage Banker Finance, Technology and Life Sciences, and Energy.
"Net interest income declined slightly, reflecting the expected continued shift in loan portfolio mix and decline in accretion, as well as a decline in nonaccrual interest received and a leasing residual value adjustment. Lower loan and securities portfolio yields were partially offset by increased loan volume.''
"Strong noninterest-bearing deposit growth continued in the third quarter. We had record average deposits of $50 billion in the third quarter 2012, with an increase of $1 billion, primarily driven by the increase in noninterest-bearing deposits.
"Our capital position remained a source of strength. We repurchased 2.9 million shares in the third quarter under our share repurchase program. Combined with our dividend, we returned $119 million to shareholders in the third quarter."
Third Quarter 2012 Compared to Second Quarter 2012
-- Average total loans increased $369 million, or 1 percent, primarily
reflecting an increase of $717 million, or 3 percent, in commercial
loans, partially offset by a decrease of $344 million, or 3 percent, in
commercial real estate loans (commercial mortgage and real estate
construction loans). The increase in commercial loans was primarily
driven by increases in Mortgage Banker Finance, Technology and Life
Sciences and Energy.
-- Average total deposits increased $1.2 billion, to $49.9 billion,
primarily reflecting an increase of $1.3 billion, or 7 percent, in
noninterest-bearing deposits.
-- Strong credit quality continued in the third quarter 2012. Nonaccrual
loans decreased $54 million, to $665 million at September 30, 2012. Net
credit-related charge-offs decreased $2 million to $43 million, or 0.39
percent of average loans, in the third quarter 2012. The provision for
credit losses was $22 million in the third quarter 2012 compared to $19
million in the second quarter 2012.
-- Net interest income was $427 million in the third quarter 2012 compared
to $435 million in the second quarter 2012. The $8 million decrease in
net interest income was primarily due to a decline in nonaccrual
interest received($4 million) and a leasing residual value adjustment
($2 million), as well as the expected continued shift in the mix of the
loan portfolio ($6 million), a decrease in the accretion of the purchase
discount on the acquired Sterling loan portfolio ($3 million) and lower
reinvestment yields on mortgage-backed investment securities ($2
million), partially offset by lower funding costs ($2 million), an
increase in loan volumes ($3 million) and one more day in the third
quarter ($4 million).
-- Noninterest income was $197 million in the third quarter 2012 compared
to $211 million for the second quarter 2012. The $14 million decrease
was primarily due to decreases in certain non-customer driven income
categories. Net securities gains of $6 million and a $5 million annual
incentive bonus received in the second quarter 2012 were not repeated in
the third quarter, and net income from principal investing and warrants
declined $3 million.
-- Noninterest expenses were $449 million in the third quarter 2012,
compared to $433 million in the second quarter 2012. The $16 million
increase primarily reflected a $17 million increase in restructuring
expenses related to the Sterling acquisition.
-- Comerica repurchased 2.9 million shares of common stock under the share
repurchase program in the third quarter 2012. Combined with the
dividend, and in accordance with the capital plan approved earlier this
year, $119 million, or 101 percent of net income, was returned to
shareholders in the third quarter (89 percent, excluding the third
quarter restructuring charge).
Net Interest Income
(dollar amounts
in millions) 3rd Qtr '12 2nd Qtr '12 3rd Qtr '11
--------------- ----------- ----------- -----------
Net interest
income $427 $435 $423
Net interest
margin 2.96% 3.10% 3.18%
Selected average
balances (a):
Total earning
assets $57,801 $56,653 $53,243
Total loans 43,597 43,228 40,098
Total investment
securities 9,791 9,728 8,158
Federal Reserve
Bank deposits
(excess
liquidity) 4,160 3,463 4,800
Total deposits 49,857 48,679 45,098
Total
noninterest-
bearing deposits 21,469 20,128 17,511
----------------- ------ ------ ------
a) Average balances in 3rd quarter
2011 included Sterling balances
from July 28 through September
30, 2011.
--- -------------------------------
-- Net interest income of $427 million in the third quarter 2012 decreased
$8 million compared to the second quarter 2012.
-- Second quarter 2012 included an unusually high amount of interest
received on nonaccrual loans, which declined by $4 million in the
third quarter. In addition, third quarter 2012 included a $2 million
negative residual value adjustment to assets in the leasing
portfolio.
-- The continued shift in the loan portfolio mix reduced net interest
income $6 million, primarily due to the decrease in higher-yielding
commercial real estate loans, the increase in lower-yielding
commercial loans, the maturity of higher-yielding fixed-rate loans
and positive credit quality migration throughout the loan portfolio.
-- Accretion of the purchase discount on the acquired Sterling loan
portfolio decreased $3 million, to $15 million in the third quarter
2012, compared to $18 million in the second quarter 2012. For the
fourth quarter of 2012, $7 million to $9 million of accretion is
expected to be recognized.
-- Interest earned on investment securities available-for-sale
decreased $2 million, as a result of lower reinvestment yields on
mortgage-backed investment securities.
-- An increase in loan volumes ($3 million), one more day in the third
quarter ($4 million) and lower funding costs ($2 million) partially
offset the items noted above.
-- Average earning assets increased $1.1 billion in the third quarter 2012,
compared to the second quarter 2012, primarily reflecting a $697 million
increase in excess liquidity and a $369 million increase in average
loans.
-- Average deposits increased $1.2 billion in the third quarter 2012,
compared to the second quarter 2012, primarily due to a $1.3 billion
increase in average noninterest-bearing deposits, partially offset by a
decrease in customer certificates of deposit. The rate paid on total
average interest-bearing deposits decreased 1 basis point, to 24 basis
points.
-- Net interest margin of 2.96 percent decreased 14 basis points compared
to the second quarter 2012. In addition to the decrease from the
unusually high amount of nonaccrual interest received in the second
quarter (3 basis points) and the negative leasing residual value
adjustment in the third quarter (2 basis points), net interest margin
was negatively impacted by lower accretion on the acquired Sterling loan
portfolio (2 basis points), continued shift in mix in the loan portfolio
(3 basis points), lower reinvestment yields on mortgage-backed
securities (2 basis points) and the increase in excess liquidity (3
basis points). Lower funding costs partially offset the decline (1 basis
point).
Noninterest Income
Noninterest income totaled $197 million for the third quarter 2012 compared to $211 million for the second quarter 2012. The $14 million decrease was primarily due to decreases in certain non-customer driven income categories. Net securities gains of $6 million and a $5 million annual incentive bonus received from Comerica's third-party credit card provider in the second quarter 2012 were not repeated in the third quarter, and net income from principal investing and warrants declined $3 million. Additionally, customer derivative income decreased $3 million in the third quarter 2012. These declines were partially offset by a $5 million increase in deferred compensation asset returns. The increase in deferred compensation asset returns is offset by an increase in deferred compensation expense in noninterest expenses.
Noninterest Expenses
Noninterest expenses totaled $449 million in the third quarter 2012 compared to $433 million in the second quarter 2012. The $16 million increase was primarily due to increases of $17 million in restructuring expenses and $3 million in salaries expense, partially offset by a decrease of $5 million in legal expenses. Additionally, noninterest expenses were reduced by $6 million in the third quarter 2012 and $3 million in the second quarter due to gains on sales of assets. Restructuring charges related to the Sterling acquisition are substantially complete. The increase in salaries expense was primarily due to a $5 million increase in deferred compensation expense, partially offset by a $3 million decrease in executive incentive compensation.
Credit Quality
"Credit quality continued to be strong," said Babb. "With 39 basis points of net charge-offs and watch list loans at 8.3 percent of the total loan portfolio, we are well within our historical normal range."
(dollar amounts in millions) 3rd Qtr '12 2nd Qtr '12 3rd Qtr '11
--------------------------- ----------- ----------- -----------
Net credit-related charge-offs $43 $45 $77
Net credit-related charge-offs/
Average total loans 0.39% 0.42% 0.77%
Provision for credit losses $22 $19 $35
Nonperforming loans (a) 692 747 958
Nonperforming assets (NPAs) (a) 755 814 1,045
NPAs/Total loans and foreclosed
property 1.71% 1.85% 2.53%
Loans past due 90 days or more and
still accruing $36 $43 $81
Allowance for loan losses 647 667 767
Allowance for credit losses on
lending-related commitments (b) 35 36 27
--- --- ---
Total allowance for credit losses 682 703 794
Allowance for loan losses/Total
loans 1.46% 1.52% 1.86%
Allowance for loan losses/
Nonperforming loans 94 89 80
-------------------------- --- --- ---
(a) Excludes loans
acquired with
credit
impairment.
(b) Included in "Accrued expenses and
other liabilities" on the
consolidated balance sheets.
---------------------------------
-- Internal watch list loans continued the downward trend, declining $182
million in the third quarter 2012, to $3.7 billion at September 30,
2012. Nonperforming assets decreased $59 million to $755 million at
September 30, 2012.
-- During the third quarter 2012, $35 million of borrower relationships
over $2 million were transferred to nonaccrual status, a decrease of $12
million from the second quarter 2012.
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $63.3 billion and $7.1 billion, respectively, at September 30, 2012, compared to $62.7 billion and 7.0 billion, respectively, at June 30, 2012. There were approximately 191 million common shares outstanding at September 30, 2012. Comerica repurchased $90 million of common stock (2.9 million shares) under the share repurchase program during the third quarter 2012. Combined with the dividend of $0.15 per share in the third quarter 2012, and in accordance with the capital plan approved earlier this year, share repurchases and dividends returned 101 percent of third quarter 2012 net income to shareholders (89 percent, excluding the third quarter restructuring charge).
Comerica's tangible common equity ratio was 10.25% at September 30, 2012, a decrease of 2 basis points from June 30, 2012. The estimated Tier 1 common capital ratio decreased 6 basis points, to 10.32% at September 30, 2012, from June 30, 2012.
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 7 percent to 8 percent.
-- Net interest income increasing 4 percent to 5 percent.
-- Net credit-related charge-offs and provision for credit losses
declining.
-- Noninterest income increasing 1 percent to 2 percent.
-- Noninterest expenses increasing or decreasing 1 percent.
-- Effective tax rate of approximately 26 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 September 30, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2012 results compared to second quarter 2012.
The following table presents net income (loss) by business segment.
(dollar amounts
in millions) 3rd Qtr '12 2nd Qtr '12 3rd Qtr '11
--------------- ----------- ----------- -----------
Business Bank $211 88% $210 84% $179 86%
Retail Bank 10 4 19 8 19 9
Wealth Management 18 8 20 8 11 5
----------------- --- --- --- --- --- ---
239 100% 249 100% 209 100%
Finance (103) (95) (91)
Other (a) (19) (10) (20)
-------- --- --- ---
Total $117 $144 $98
----- ---- ---- ---
(a) Includes items not directly
associated with the three
major business segments or
the Finance Division.
Business Bank
(dollar amounts in millions) 3rd Qtr 2nd Qtr 3rd Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $386 $385 $363
Provision for credit losses 15 12 18
Noninterest income 76 83 77
Noninterest expenses 144 151 164
Net income 211 210 179
Net credit-related charge-
offs 27 26 40
Selected average balances:
Assets 34,863 34,376 30,608
Loans 33,856 33,449 29,957
Deposits 25,142 24,145 21,759
-------- ------ ------ ------
-- Average loans increased $407 million, primarily due to increases in
Mortgage Banker Finance and Middle Market, partially offset by a
decrease in Commercial Real Estate. The increase in Middle Market
primarily reflected increases in Energy and Technology and Life
Sciences.
-- Average deposits increased $997 million. The increase was broad-based,
reflecting increases in Middle Market, Corporate, Commercial Real Estate
and Mortgage Banker Finance.
-- Net interest income increased $1 million, primarily due to higher loan
volumes, increased net funds transfer pricing (FTP) credits, as a result
of higher deposit balances, and one more day in the third quarter,
partially offset by decreases in loan yields and accretion on the
acquired Sterling loan portfolio.
-- The provision for credit losses increased $3 million, primarily
reflecting increases in Middle Market and Mortgage Banker Finance,
partially offset by a decrease in Commercial Real Estate. The increase
in Middle Market primarily reflected increases in Technology and Life
Sciences, National Dealer Services and Energy, partially offset by a
decrease in general Middle Market.
-- Noninterest income decreased $7 million, primarily due to decreases in
commercial lending fees and warrant income.
-- Noninterest expenses decreased $7 million, primarily due to decreases in
net allocated corporate overhead expense and processing charges, and a
third quarter gain on sale of assets; partially offset by an increase in
legal expenses.
Retail Bank
(dollar amounts in millions) 3rd Qtr 2nd Qtr 3rd Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $161 $161 $173
Provision for credit losses 6 3 16
Noninterest income 41 47 47
Noninterest expenses 181 177 175
Net income (loss) 10 19 19
Net credit-related charge-
offs 13 9 28
Selected average balances:
Assets 5,964 5,946 5,985
Loans 5,265 5,250 5,483
Deposits 20,682 20,525 19,792
-------- ------ ------ ------
-- Average deposits increased $157 million, primarily due to an increase in
Small Business.|
-- The provision for credit losses increased $3 million, primarily due to
an increase in Small Business.
-- Noninterest income decreased $6 million, primarily due to a $5 million
annual incentive bonus received in the second quarter 2012 from
Comerica's third-party credit card provider.
-- Noninterest expenses increased $4 million, primarily due to small
increases in several noninterest expense categories.
Wealth Management
(dollar amounts in millions) 3rd Qtr 2nd Qtr 3rd Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $47 $46 $45
Provision for credit losses 3 2 7
Noninterest income 62 66 56
Noninterest expenses 78 79 77
Net income 18 20 11
Net credit-related charge-
offs 3 10 9
Selected average balances:
Assets 4,566 4,604 4,674
Loans 4,476 4,529 4,658
Deposits 3,667 3,640 3,198
-------- ----- ----- -----
-- Average loans decreased $53 million, primarily due to a decrease in
Private Banking. |
-- Average deposits increased $27 million, primarily due to an increase in
Private Banking.
-- Noninterest income decreased $4 million, primarily due a decrease in
gains on the sale of auction-rate securities.
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 September 30, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2012 results compared to second quarter 2012.
The following table presents net income (loss) by market segment.
(dollar amounts
in millions) 3rd Qtr '12 2nd Qtr '12 3rd Qtr '11
--------------- ----------- ----------- -----------
Midwest $71 30% $75 31% $60 28%
Western 70 29 69 27 50 23
Texas 45 19 51 20 64 31
Florida (1) - (5) (2) 1 1
Other Markets 41 17 47 19 22 11
International 13 5 12 5 12 6
------------- --- --- --- --- --- ---
239 100% 249 100% 209 100%
Finance & Other
(a) (122) (105) (111)
--------------- ---- ---- ----
Total $117 $144 $98
----- ---- ---- ---
(a) Includes items not directly
associated with the
geographic markets.
Midwest Market
(dollar amounts in millions) 3rd Qtr 2nd Qtr 3rd Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $194 $196 $199
Provision for credit losses 2 1 20
Noninterest income 95 96 96
Noninterest expenses 175 177 183
Net income 71 75 60
Net credit-related charge-
offs 12 10 33
Selected average balances:
Assets 13,784 14,028 14,118
Loans 13,468 13,766 13,873
Deposits 19,628 19,227 18,510
-------- ------ ------ ------
-- Average loans decreased $298 million, primarily due to decreases in
Middle Market, Commercial Real Estate, Corporate, and Private Banking.
-- Average deposits increased $401 million, primarily due to increases in
Corporate, Middle Market and Small Business, partially offset by a
decrease in Personal Banking.
-- Net interest income decreased $2 million, primarily due to decreases in
loan volumes and yields, partially offset by one more day in the third
quarter 2012 and an increase in net FTP credits, primarily as a result
of higher deposit balances and lower loan balances.
Western Market
(dollar amounts in millions) 3rd Qtr 2nd Qtr 3rd Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $181 $177 $166
Provision for credit losses - 1 13
Noninterest income 34 37 32
Noninterest expenses 105 104 106
Net income 70 69 50
Net credit-related charge-
offs 10 12 32
Selected average balances:
Assets 13,442 13,170 12,110
Loans 13,163 12,920 11,889
Deposits 15,192 14,371 12,975
-------- ------ ------ ------
-- Average loans increased $243 million, primarily due to increases in
Middle Market and Corporate. The increase in Middle Market primarily
reflected increases in Technology and Life Sciences and National Dealer
Services.
-- Average deposits increased $821 million, primarily due to increases in
Middle Market, Commercial Real Estate and Small Business. The increase
in Middle Market was broad-based.
-- Net interest income increased $4 million, primarily due to an increase
in loan volumes, one more day in the third quarter 2012, and an increase
in net FTP credits as a result of higher deposit balances.
-- Noninterest income decreased $3 million, primarily due to a decrease in
warrant income.
Texas Market
(dollar amounts in millions) 3rd Qtr 2nd Qtr 3rd Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $139 $143 $143
Provision for credit losses 10 7 (8)
Noninterest income 30 31 29
Noninterest expenses 89 88 81
Net income 45 51 64
Net credit-related charge-
offs 7 4 2
Selected average balances:
Assets 10,327 10,270 8,510
Loans 9,585 9,506 8,145
Deposits 9,941 10,185 8,865
-------- ----- ------ -----
-- Average loans increased $79 million, primarily due to an increase in
Middle Market, partially offset by a decrease in Commercial Real Estate.
The increase in Middle Market was primarily due to an increase in
Energy.
-- Average deposits decreased $244 million, primarily reflecting decreases
in Middle Market, Small Business and Private Banking. The decrease in
Middle Market primarily reflected decreases in Technology and Life
Sciences and Energy.
-- Net interest income decreased $4 million, primarily due to a decrease in
accretion on the acquired Sterling loan portfolio and lower loan yields,
partially offset by an increase in loan volumes and one more day in the
third quarter 2012.
-- The provision for credit losses increased $3 million, primarily due to
an increase in Private Banking.
Florida Market
(dollar amounts in millions) 3rd Qtr 2nd Qtr 3rd Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $10 $11 $11
Provision for credit losses 5 11 2
Noninterest income 3 4 4
Noninterest expenses 10 11 11
Net income (1) (5) 1
Net credit-related charge-
offs 9 10 5
Selected average balances:
Assets 1,309 1,407 1,450
Loans 1,328 1,429 1,477
Deposits 512 446 404
-------- --- --- ---
-- Average loans decreased $101 million, primarily due to decreases in
Commercial Real Estate and Private Banking.
-- Average deposits increased $66 million, primarily due to an increase in
Private Banking.
-- The provision for credit losses decreased $6 million, primarily due to
decreases in Private Banking and Middle Market.
Conference Call and Webcast
Comerica will host a conference call to review third quarter 2012 financial results at 7 a.m. CT Wednesday, October 17, 2012. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 31764718). 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 October 31, 2012. The conference call replay can be accessed by calling (855) 859-2056 or (404) 537-3406 (event ID No. 31764718). 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 Nine Months Ended
------------------ -----------------
September 30, June 30, September 30, September 30,
(in millions, except per share data) 2012 2012 2011 2012 2011
----------------------------------- ---- ---- ---- ---- ----
PER COMMON SHARE AND COMMON STOCK DATA
Diluted net income $0.61 $0.73 $0.51 $2.00 $1.61
Cash dividends declared 0.15 0.15 0.10 0.40 0.30
Common shareholders' equity (at period end) 37.01 36.18 34.94
Tangible common equity (at period end) (a) 33.56 32.76 31.57
Average diluted shares (in thousands) 191,492 194,487 191,634 193,991 182,602
------------------------------------ ------- ------- ------- ------- -------
KEY RATIOS
Return on average common shareholders' equity 6.67% 8.22% 5.91% 7.46% 6.44%
Return on average assets 0.74 0.93 0.67 0.84 0.71
Tier 1 common capital ratio (a) (b) 10.32 10.38 10.57
Tier 1 risk-based capital ratio (b) 10.32 10.38 10.65
Total risk-based capital ratio (b) 13.63 13.90 14.84
Leverage ratio (b) 10.71 10.92 11.41
Tangible common equity ratio (a) 10.25 10.27 10.43
------------------------------- ----- ----- -----
AVERAGE BALANCES
Commercial loans $26,700 $25,983 $22,127 $25,810 $21,769
Real estate construction loans:
Commercial Real Estate business line (c) 999 1,035 1,269 1,029 1,501
Other business lines (d) 390 385 430 391 417
--- --- --- --- ---
Total real estate construction loans 1,389 1,420 1,699 1,420 1,918
Commercial mortgage loans:
Commercial Real Estate business line (c) 2,140 2,443 2,244 2,367 2,046
Other business lines (d) 7,530 7,540 8,031 7,584 7,856
----- ----- ----- ----- -----
Total commercial mortgage loans 9,670 9,983 10,275 9,951 9,902
Lease financing 852 869 936 873 960
International loans 1,302 1,265 1,163 1,257 1,212
Residential mortgage loans 1,488 1,487 1,606 1,498 1,577
Consumer loans 2,196 2,221 2,292 2,225 2,272
----- ----- ----- ----- -----
Total loans 43,597 43,228 40,098 43,034 39,610
Earning assets 57,801 56,653 53,243 56,884 50,923
Total assets 63,276 61,950 58,238 62,284 55,526
Noninterest-bearing deposits 21,469 20,128 17,511 20,415 16,259
Interest-bearing deposits 28,388 28,551 27,587 28,538 26,149
------ ------ ------ ------ ------
Total deposits 49,857 48,679 45,098 48,953 42,408
Common shareholders' equity 7,045 7,002 6,633 6,996 6,150
--------------------------- ----- ----- ----- ----- -----
NET INTEREST INCOME
Net interest income (fully taxable equivalent basis) $428 $435 $424 $1,306 $1,212
Fully taxable equivalent adjustment 1 - 1 2 3
Net interest margin (fully taxable equivalent basis) 2.96% 3.10% 3.18% 3.08% 3.19%
--------------------------------------------------- ---- ---- ---- ---- ----
CREDIT QUALITY
Nonaccrual loans $665 $719 $929
Reduced-rate loans 27 28 29
--- --- ---
Total nonperforming loans (e) 692 747 958
Foreclosed property 63 67 87
--- --- ---
Total nonperforming assets (e) 755 814 1,045
Loans past due 90 days or more and still accruing 36 43 81
Gross loan charge-offs 59 64 90 $185 $338
Loan recoveries 16 19 13 52 70
--- --- --- --- ---
Net loan charge-offs 43 45 77 133 268
Allowance for loan losses 647 667 767
Allowance for credit losses on lending-related commitments 35 36 27
--- --- ---
Total allowance for credit losses 682 703 794
Allowance for loan losses as a percentage of total loans 1.46% 1.52% 1.86%
Net loan charge-offs as a percentage of average total loans (f) 0.39 0.42 0.77 0.41% 0.90%
Nonperforming assets as a percentage of total loans and
foreclosed property (e) 1.71 1.85 2.53
Allowance for loan losses as a percentage of total nonperforming
loans 94 89 80
---------------------------------------------------------------- --- --- ---
(a) See Reconciliation of Non-GAAP
Financial Measures.
(b) September 30, 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) Lending-related commitment
charge-offs were zero in all
periods presented.
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
September 30, June 30, December 31, September 30,
(in millions, except share data) 2012 2012 2011 2011
------------------------------- ---- ---- ---- ----
(unaudited) (unaudited) (unaudited)
ASSETS
Cash and due from banks $933 $1,076 $982 $981
Interest-bearing deposits with banks 3,005 3,065 2,574 4,217
Other short-term investments 146 170 149 137
Investment securities available-for-
sale 10,569 9,940 10,104 9,732
Commercial loans 27,460 27,016 24,996 23,113
Real estate construction loans 1,392 1,377 1,533 1,648
Commercial mortgage loans 9,559 9,830 10,264 10,539
Lease financing 837 858 905 927
International loans 1,277 1,224 1,170 1,046
Residential mortgage loans 1,495 1,469 1,526 1,643
Consumer loans 2,174 2,218 2,285 2,309
-------------- ----- ----- ----- -----
Total loans 44,194 43,992 42,679 41,225
Less allowance for loan losses (647) (667) (726) (767)
------------------------------ ---- ---- ---- ----
Net loans 43,547 43,325 41,953 40,458
Premises and equipment 625 667 675 685
Accrued income and other assets 4,489 4,407 4,571 4,678
------------------------------- ----- ----- ----- -----
Total assets $63,314 $62,650 $61,008 $60,888
------------ ------- ------- ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $21,753 $21,330 $19,764 $19,116
Money market and interest-bearing
checking deposits 20,407 20,008 20,311 20,237
Savings deposits 1,589 1,629 1,524 1,771
Customer certificates of deposit 5,742 6,045 5,808 5,980
Other time deposits - - - 45
Foreign office time deposits 486 376 348 303
---------------------------- --- --- --- ---
Total interest-bearing deposits 28,224 28,058 27,991 28,336
------------------------------- ------ ------ ------ ------
Total deposits 49,977 49,388 47,755 47,452
Short-term borrowings 63 83 70 164
Accrued expenses and other
liabilities 1,450 1,409 1,371 1,312
Medium- and long-term debt 4,740 4,742 4,944 5,009
-------------------------- ----- ----- ----- -----
Total liabilities 56,230 55,622 54,140 53,937
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares 1,141 1,141 1,141 1,141
Capital surplus 2,153 2,144 2,170 2,162
Accumulated other comprehensive loss (253) (301) (356) (230)
Retained earnings 5,831 5,744 5,546 5,471
Less cost of common stock in treasury
-36,790,174 shares at 9/30/12,
33,889,392 shares at 6/30/12,
30,831,076 shares at 12/31/11 and
29,238,425 shares at 9/30/11 (1,788) (1,700) (1,633) (1,593)
------------------------------------- ------ ------ ------ ------
Total shareholders' equity 7,084 7,028 6,868 6,951
-------------------------- ----- ----- ----- -----
Total liabilities and shareholders'
equity $63,314 $62,650 $61,008 $60,888
----------------------------------- ------- ------- ------- -------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(in millions, except
per share data) 2012 2011 2012 2011
-------------------- ---- ---- ---- ----
INTEREST INCOME
Interest and fees on
loans $400 $405 $1,219 $1,149
Interest on investment
securities 57 54 179 170
Interest on short-
term investments 3 4 9 9
------------------ --- --- --- ---
Total interest income 460 463 1,407 1,328
INTEREST EXPENSE
Interest on deposits 17 24 54 69
Interest on medium-
and long-term debt 16 16 49 50
------------------- --- --- --- ---
Total interest expense 33 40 103 119
---------------------- --- --- --- ---
Net interest income 427 423 1,304 1,209
Provision for credit
losses 22 35 63 126
-------------------- --- --- --- ---
Net interest income
after provision for
credit losses 405 388 1,241 1,083
NONINTEREST INCOME
Service charges on
deposit accounts 53 53 162 156
Fiduciary income 39 37 116 115
Commercial lending
fees 22 22 71 64
Letter of credit fees 19 19 54 55
Card fees 12 17 35 47
Foreign exchange
income 9 11 29 30
Bank-owned life
insurance 10 10 30 27
Brokerage fees 5 5 14 17
Net securities gains - 12 11 18
Other noninterest
income 28 15 92 81
----------------- --- --- --- ---
Total noninterest
income 197 201 614 610
NONINTEREST EXPENSES
Salaries 192 192 582 565
Employee benefits 61 53 181 153
----------------- --- --- --- ---
Total salaries and
employee benefits 253 245 763 718
Net occupancy expense 40 44 121 122
Equipment expense 17 17 50 49
Outside processing fee
expense 27 25 79 74
Software expense 23 22 67 65
Merger and
restructuring charges 25 33 33 38
FDIC insurance expense 9 8 29 35
Advertising expense 7 7 21 21
Other real estate
expense 2 5 6 19
Other noninterest
expenses 46 57 161 151
----------------- --- --- --- ---
Total noninterest
expenses 449 463 1,330 1,292
----------------- --- --- ----- -----
Income before income
taxes 153 126 525 401
Provision for income
taxes 36 28 134 104
-------------------- --- --- --- ---
NET INCOME 117 98 391 297
Less income allocated
to participating
securities 1 1 4 3
--------------------- --- --- --- ---
Net income
attributable to
common shares $116 $97 $387 $294
---------------- ---- --- ---- ----
Earnings per common share:
Basic $0.61 $0.51 $2.00 $1.63
Diluted 0.61 0.51 2.00 1.61
Comprehensive income 165 176 494 456
Cash dividends
declared on common
stock 29 20 78 55
Cash dividends
declared per common
share 0.15 0.10 0.40 0.30
-------------------- ---- ---- ---- ----
CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Third Second First Fourth Third Third Quarter 2012 Compared To:
Quarter Quarter Quarter Quarter Quarter Second Quarter 2012 Third Quarter 2011
(in millions, except per share data) 2012 2012 2012 2011 2011 Amount Percent Amount Percent
----------------------------------- ---- ---- ---- ---- ---- ------ ------- ------ -------
INTEREST INCOME
Interest and fees on loans $400 $408 $411 $415 $405 $(8) (2)% $(5) (1)%
Interest on investment securities 57 59 63 63 54 (2) (4) 3 4
Interest on short-term investments 3 3 3 3 4 - - (1) (5)
---------------------------------- --- --- --- --- --- --- --- --- ---
Total interest income 460 470 477 481 463 (10) (2) (3) (1)
INTEREST EXPENSE
Interest on deposits 17 18 19 21 24 (1) (4) (7) (26)
Interest on medium- and long-term debt 16 17 16 16 16 (1) (5) - -
-------------------------------------- --- --- --- --- --- --- --- --- ---
Total interest expense 33 35 35 37 40 (2) (5) (7) (15)
---------------------- --- --- --- --- --- --- --- --- ---
Net interest income 427 435 442 444 423 (8) (2) 4 1
Provision for credit losses 22 19 22 18 35 3 14 (13) (38)
--------------------------- --- --- --- --- --- --- --- --- ---
Net interest income after provision 405 416 420 426 388 (11) (2) 17 4
for credit losses
NONINTEREST INCOME
Service charges on deposit accounts 53 53 56 52 53 - - - -
Fiduciary income 39 39 38 36 37 - - 2 7
Commercial lending fees 22 24 25 23 22 (2) (10) - -
Letter of credit fees 19 18 17 18 19 1 8 - -
Card fees 12 12 11 11 17 - - (5) (30)
Foreign exchange income 9 10 10 10 11 (1) (3) (2) (15)
Bank-owned life insurance 10 10 10 10 10 - - - -
Brokerage fees 5 4 5 5 5 1 2 - -
Net securities gains (losses) - 6 5 (4) 12 (6) N/M (12) N/M
Other noninterest income 28 35 29 21 15 (7) (18) 13 89
------------------------ --- --- --- --- --- --- --- --- ---
Total noninterest income 197 211 206 182 201 (14) (7) (4) (2)
NONINTEREST EXPENSES
Salaries 192 189 201 205 192 3 1 - -
Employee benefits 61 61 59 52 53 - - 8 16
----------------- --- --- --- --- --- --- --- --- ---
Total salaries and employee benefits 253 250 260 257 245 3 1 8 3
Net occupancy expense 40 40 41 47 44 - - (4) (7)
Equipment expense 17 16 17 17 17 1 2 - -
Outside processing fee expense 27 26 26 27 25 1 - 2 4
Software expense 23 21 23 23 22 2 6 1 5
Merger and restructuring charges 25 8 - 37 33 17 N/M (8) (22)
FDIC insurance expense 9 10 10 8 8 (1) - 1 28
Advertising expense 7 7 7 7 7 - - - -
Other real estate expense 2 - 4 3 5 2 N/M (3) (65)
Other noninterest expenses 46 55 60 53 57 (9) (15) (11) (21)
-------------------------- --- --- --- --- --- --- --- --- ---
Total noninterest expenses 449 433 448 479 463 16 4 (14) (3)
-------------------------- --- --- --- --- --- --- --- --- ---
Income before income taxes 153 194 178 129 126 (41) (21) 27 23
Provision for income taxes 36 50 48 33 28 (14) (27) 8 33
-------------------------- --- --- --- --- --- --- --- --- ---
NET INCOME 117 144 130 96 98 (27) (18) 19 20
Less income allocated to participating securities 1 2 1 1 1 (1) (12) - -
------------------------------------------------- --- --- --- --- --- --- --- --- ---
Net income attributable to common shares $116 $142 $129 $95 $97 $(26) (18)% $19 20%
---------------------------------------- ---- ---- ---- --- --- ---- ---- --- ---
Earnings per common share:
Basic $0.61 $0.73 $0.66 $0.48 $0.51 $(0.12) (16)% $0.10 20%
Diluted 0.61 0.73 0.66 0.48 0.51 (0.12) (16) 0.10 20
Comprehensive income (loss) 165 169 160 (30) 176 (4) (2) (11) (6)
Cash dividends declared on common stock 29 29 20 20 20 - - 9 45
Cash dividends declared per common share 0.15 0.15 0.10 0.10 0.10 - - 0.05 50
---------------------------------------- ---- ---- ---- ---- ---- --- --- ---- ---
N/M - Not Meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
2012 2011
---- ----
(in millions) 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
------------ ------- ------- ------- ------- -------
Balance at beginning of period $667 $704 $726 $767 $806
Loan charge-offs:
Commercial 19 26 25 28 33
Real estate construction:
Commercial Real Estate business
line (a) 2 2 2 4 11
Other business lines (b) - 1 - 1 -
----------------------- --- --- --- --- ---
Total real estate construction 2 3 2 5 11
Commercial mortgage:
Commercial Real Estate business
line (a) 12 16 13 17 12
Other business lines (b) 13 11 13 24 21
----------------------- --- --- --- --- ---
Total commercial mortgage 25 27 26 41 33
International 1 - 2 2 -
Residential mortgage 6 3 2 2 4
Consumer 6 5 5 7 9
-------- --- --- --- --- ---
Total loan charge-offs 59 64 62 85 90
Recoveries on loans previously charged-off:
Commercial 7 10 9 11 5
Real estate construction 3 1 1 4 3
Commercial mortgage 5 4 3 9 3
International - - 1 - -
Residential mortgage - - 1 - 1
Consumer 1 4 2 1 1
-------- --- --- --- --- ---
Total recoveries 16 19 17 25 13
---------------- --- --- --- --- ---
Net loan charge-offs 43 45 45 60 77
Provision for loan losses 23 8 23 19 38
------------------------- --- --- --- --- ---
Balance at end of period $647 $667 $704 $726 $767
------------------------ ---- ---- ---- ---- ----
Allowance for loan losses as a
percentage of total loans 1.46% 1.52% 1.64% 1.70% 1.86%
Net loan charge-offs as a
percentage of average total loans 0.39 0.42 0.43 0.57 0.77
---------------------------------- ---- ---- ---- ---- ----
Primarily
charge-
offs of
loans to
real estate
investors
and
(a) 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
2012 2011
---- ----
(in millions) 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
------------ ------- ------- ------- ------- -------
Balance at
beginning of
period $36 $25 $26 $27 $30
Add: Provision
for credit
losses on
lending-related
commitments (1) 11 (1) (1) (3)
---------------- --- --- --- --- ---
Balance at end of
period $35 $36 $25 $26 $27
----------------- --- --- --- --- ---
Unfunded lending-
related
commitments sold $ - $ - $ - $ - $ -
----------------- --- --- --- --- --- --- --- --- --- ---
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2012 2011
---- ----
(in millions) 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
------------ ------- ------- ------- ------- -------
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial $154 $175 $205 $237 $258
Real estate construction:
Commercial Real Estate
business line (a) 45 60 77 93 109
Other business lines (b) 6 9 8 8 3
----------------------- --- --- --- --- ---
Total real estate
construction 51 69 85 101 112
Commercial mortgage:
Commercial Real Estate
business line (a) 137 155 174 159 198
Other business lines (b) 219 220 275 268 275
----------------------- --- --- --- --- ---
Total commercial mortgage 356 375 449 427 473
Lease financing 3 4 4 5 5
International - - 4 8 7
------------- --- --- --- --- ---
Total nonaccrual business
loans 564 623 747 778 855
Retail loans:
Residential mortgage 69 76 69 71 65
Consumer:
Home equity 28 16 9 5 4
Other consumer 4 4 5 6 5
-------------- --- --- --- --- ---
Total consumer 32 20 14 11 9
-------------- --- --- --- --- ---
Total nonaccrual retail
loans 101 96 83 82 74
----------------------- --- --- --- --- ---
Total nonaccrual loans 665 719 830 860 929
Reduced-rate loans 27 28 26 27 29
------------------ --- --- --- --- ---
Total nonperforming loans
(c) 692 747 856 887 958
Foreclosed property 63 67 67 94 87
------------------- --- --- --- --- ---
Total nonperforming assets
(c) $755 $814 $923 $981 $1,045
-------------------------- ---- ---- ---- ---- ------
Nonperforming loans as a
percentage of total loans 1.57% 1.70% 1.99% 2.08% 2.32%
Nonperforming assets as a
percentage of total loans 1.71 1.85 2.14 2.29 2.53
and foreclosed property
Allowance for loan losses as
a percentage of total 94 89 82 82 80
nonperforming loans
Loans past due 90 days or
more and still accruing $36 $43 $50 $58 $81
------------------------- --- --- --- --- ---
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at
beginning of period $719 $830 $860 $929 $941
Loans transferred to
nonaccrual (d) 35 47 69 99 130
Nonaccrual business loan
gross charge-offs (e) (46) (56) (55) (76) (76)
Loans transferred to accrual
status (d) - (41) - - (15)
Nonaccrual business loans
sold (f) (20) (16) (7) (19) (15)
Payments/Other (g) (23) (45) (37) (73) (36)
------------------ --- --- --- --- ---
Nonaccrual loans at end of
period $665 $719 $830 $860 $929
-------------------------- ---- ---- ---- ---- ----
(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 $46 $56 $55 $76 $76
Performing watch list loans 1 - - - 1
Consumer and residential
mortgage loans 12 8 7 9 13
--- --- --- --- ---
Total gross loan charge-offs $59 $64 $62 $85 $90
--- --- --- --- ---
(f) Analysis of loans sold:
Nonaccrual business loans $20 $16 $7 $19 $15
Performing watch list loans 42 7 11 - 16
--- --- --- --- ---
Total loans sold $62 $23 $18 $19 $31
--- --- --- --- ---
(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
Nine Months Ended
-----------------
September 30, 2012 September 30, 2011
------------------ ------------------
Average Average Average Average
(dollar amounts in millions) Balance Interest Rate Balance Interest Rate
--------------------------- ------- -------- ---- ------- -------- ----
Commercial loans $25,810 $673 3.48% $21,769 $604 3.70%
Real estate construction loans 1,420 47 4.48 1,918 59 4.12
Commercial mortgage loans 9,951 337 4.51 9,902 306 4.12
Lease financing 873 19 2.92 960 25 3.53
International loans 1,257 35 3.73 1,212 35 3.89
Residential mortgage loans 1,498 52 4.66 1,577 63 5.34
Consumer loans 2,225 57 3.44 2,272 59 3.47
-------------- ----- --- ---- ----- --- ----
Total loans (a) 43,034 1,220 3.79 39,610 1,151 3.88
Auction-rate securities available-for-sale 294 2 0.78 497 3 0.75
Other investment securities available-for-sale 9,509 178 2.57 7,131 168 3.20
---------------------------------------------- ----- --- ---- ----- --- ----
Total investment securities available-for-sale 9,803 180 2.51 7,628 171 3.03
Interest-bearing deposits with banks (b) 3,909 8 0.26 3,557 7 0.24
Other short-term investments 138 1 1.80 128 2 2.14
---------------------------- --- --- ---- --- --- ----
Total earning assets 56,884 1,409 3.32 50,923 1,331 3.50
Cash and due from banks 967 908
Allowance for loan losses (707) (860)
Accrued income and other assets 5,140 4,555
----- -----
Total assets $62,284 $55,526
------- -------
Money market and interest-bearing checking
deposits $20,583 26 0.18 $18,539 36 0.26
Savings deposits 1,589 1 0.06 1,516 1 0.11
Customer certificates of deposit 5,993 25 0.54 5,666 30 0.70
Foreign office and other time deposits 373 2 0.64 428 2 0.50
-------------------------------------- --- --- ---- --- --- ----
Total interest-bearing deposits 28,538 54 0.25 26,149 69 0.35
Short-term borrowings 78 - 0.12 137 - 0.15
Medium- and long-term debt 4,846 49 1.36 5,702 50 1.17
-------------------------- ----- --- ---- ----- --- ----
Total interest-bearing sources 33,462 103 0.41 31,988 119 0.50
Noninterest-bearing deposits 20,415 16,259
Accrued expenses and other liabilities 1,411 1,129
Total shareholders' equity 6,996 6,150
----- -----
Total liabilities and shareholders' equity $62,284 $55,526
------- -------
Net interest income/rate spread (FTE) $1,306 2.91 $1,212 3.00
------ ------
FTE adjustment $2 $3
--- ---
Impact of net noninterest-bearing sources of funds 0.17 0.19
-------------------------------------------------- ---- ----
Net interest margin (as a percentage of average earning assets)
(FTE) (a) (b) 3.08% 3.19%
--------------------------------------------------------------- ---- ----
(a) Accretion of the purchase
discount on the acquired loan
portfolio of $58 million and
$27 million in the nine months
ended September 30, 2012 and
2011, respectively, increased
the net interest margin by 14
basis points and 7 basis points
in the nine months ended
September 30, 2012 and 2011,
respectively.
(b) Excess liquidity, represented by
average balances deposited with
the Federal Reserve Bank,
reduced the net interest margin
by 20 basis points and 22 basis
points in the nine months ended
September 30, 2012 and 2011,
respectively.
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
------------------
September 30, 2012 June 30, 2012 September 30, 2011
------------------ ------------- ------------------
Average Average Average Average Average Average
(dollar amounts in millions) Balance Interest Rate Balance Interest Rate Balance Interest Rate
--------------------------- ------- -------- ---- ------- -------- ---- ------- -------- ----
Commercial loans $26,700 $227 3.38% $25,983 $227 3.52% $22,127 $207 3.70%
Real estate construction loans 1,389 15 4.36 1,420 15 4.50 1,699 23 5.28
Commercial mortgage loans 9,670 106 4.34 9,983 112 4.46 10,275 115 4.42
Lease financing 852 4 2.04 869 7 3.28 936 8 3.46
International loans 1,302 12 3.77 1,265 12 3.66 1,163 11 4.01
Residential mortgage loans 1,488 17 4.67 1,487 17 4.53 1,606 21 5.30
Consumer loans 2,196 19 3.44 2,221 18 3.37 2,292 20 3.56
-------------- ----- --- ---- ----- --- ---- ----- --- ----
Total loans (a) 43,597 400 3.66 43,228 408 3.79 40,098 405 4.01
Auction-rate securities available-for-sale 234 1 0.97 296 - 0.82 437 1 0.63
Other investment securities available-for-sale 9,557 57 2.42 9,432 59 2.55 7,721 54 2.87
---------------------------------------------- ----- --- ---- ----- --- ---- ----- --- ----
Total investment securities available-for-sale 9,791 58 2.38 9,728 59 2.49 8,158 55 2.74
Interest-bearing deposits with banks (b) 4,276 3 0.26 3,556 3 0.26 4,851 3 0.23
Other short-term investments 137 - 1.88 141 - 1.55 136 1 2.30
---------------------------- --- --- ---- --- --- ---- --- --- ----
Total earning assets 57,801 461 3.19 56,653 470 3.35 53,243 464 3.47
Cash and due from banks 971 931 969
Allowance for loan losses (673) (710) (814)
Accrued income and other assets 5,177 5,076 4,840
----- ----- -----
Total assets $63,276 $61,950 $58,238
------- ------- -------
Money market and interest-bearing checking
deposits $20,495 8 0.17 $20,458 8 0.18 $19,595 13 0.25
Savings deposits 1,618 - 0.04 1,607 1 0.07 1,659 - 0.14
Customer certificates of deposit 5,894 8 0.52 6,107 9 0.53 5,878 10 0.66
Foreign office and other time deposits 381 1 0.71 379 - 0.64 455 1 0.49
-------------------------------------- --- --- ---- --- --- ---- --- --- ----
Total interest-bearing deposits 28,388 17 0.24 28,551 18 0.25 27,587 24 0.33
Short-term borrowings 89 - 0.12 68 - 0.12 204 - 0.08
Medium- and long-term debt 4,745 16 1.35 4,854 17 1.40 5,168 16 1.23
-------------------------- ----- --- ---- ----- --- ---- ----- --- ----
Total interest-bearing sources 33,222 33 0.40 33,473 35 0.42 32,959 40 0.47
Noninterest-bearing deposits 21,469 20,128 17,511
Accrued expenses and other liabilities 1,540 1,347 1,135
Total shareholders' equity 7,045 7,002 6,633
----- ----- -----
Total liabilities and shareholders' equity $63,276 $61,950 $58,238
------- ------- -------
Net interest income/rate spread (FTE) $428 2.79 $435 2.93 $424 3.00
---- ---- ----
FTE adjustment $1 $ - $1
--- --- --- ---
Impact of net noninterest-bearing sources of funds 0.17 0.17 0.18
-------------------------------------------------- ---- ---- ----
Net interest margin (as a percentage of average earning assets)
(FTE) (a) (b) 2.96% 3.10% 3.18%
--------------------------------------------------------------- ---- ---- ----
(a) Accretion of the purchase
discount on the acquired loan
portfolio of $15 million, $18
million and $27 million in the
third and second quarters of
2012 and the third quarter of
2011, respectively, increased
the net interest margin by 10
basis points, 13 basis points
and 20 basis points in the
third and second quarters of
2012 and the third quarter of
2011, respectively.
(b) Excess liquidity, represented by
average balances deposited with
the Federal Reserve Bank,
reduced the net interest margin
by 21 basis points and by 18
basis points in the third and
second quarters of 2012,
respectively, and by 29 basis
points in the third quarter of
2011.
CONSOLIDATED STATISTICAL DATA (unaudited)
Comerica Incorporated and Subsidiaries
September 30, June 30, March 31, December 31, September 30,
(in millions, except per share data) 2012 2012 2012 2011 2011
----------------------------------- ---- ---- ---- ---- ----
Commercial loans:
Floor plan $2,276 $2,406 $2,152 $1,822 $1,209
Other 25,184 24,610 23,488 23,174 21,904
----- ------ ------ ------ ------ ------
Total commercial loans 27,460 27,016 25,640 24,996 23,113
Real estate construction loans:
Commercial Real Estate business line (a) 1,003 991 1,055 1,103 1,226
Other business lines (b) 389 386 387 430 422
----------------------- --- --- --- --- ---
Total real estate construction loans 1,392 1,377 1,442 1,533 1,648
Commercial mortgage loans:
Commercial Real Estate business line (a) 2,020 2,315 2,501 2,507 2,602
Other business lines (b) 7,539 7,515 7,578 7,757 7,937
----------------------- ----- ----- ----- ----- -----
Total commercial mortgage loans 9,559 9,830 10,079 10,264 10,539
Lease financing 837 858 872 905 927
International loans 1,277 1,224 1,256 1,170 1,046
Residential mortgage loans 1,495 1,469 1,485 1,526 1,643
Consumer loans:
Home equity 1,570 1,584 1,612 1,655 1,683
Other consumer 604 634 626 630 626
-------------- --- --- --- --- ---
Total consumer loans 2,174 2,218 2,238 2,285 2,309
-------------------- ----- ----- ----- ----- -----
Total loans $44,194 $43,992 $43,012 $42,679 $41,225
----------- ------- ------- ------- ------- -------
Goodwill $635 $635 $635 $635 $635
Core deposit intangible 23 25 27 29 32
Loan servicing rights 2 3 3 3 3
Tier 1 common capital ratio (c) (d) 10.32% 10.38% 10.27% 10.37% 10.57%
Tier 1 risk-based capital ratio (d) 10.32 10.38 10.27 10.41 10.65
Total risk-based capital ratio (d) 13.63 13.90 13.99 14.25 14.84
Leverage ratio (d) 10.71 10.92 10.94 10.92 11.41
Tangible common equity ratio (c) 10.25 10.27 10.21 10.27 10.43
Common shareholders' equity per share of common stock $37.01 $36.18 $35.44 $34.80 $34.94
Tangible common equity per share of common stock (c) 33.56 32.76 32.06 31.42 31.57
Market value per share for the quarter:
High 33.38 32.88 34.00 27.37 35.79
Low 29.32 27.88 26.25 21.53 21.48
Close 31.05 30.71 32.36 25.80 22.97
Quarterly ratios:
Return on average common shareholders' equity 6.67% 8.22% 7.50% 5.51% 5.91%
Return on average assets 0.74 0.93 0.84 0.63 0.67
Efficiency ratio 71.68 67.53 69.70 75.97 75.59
Number of banking centers 490 493 495 494 502
Number of employees - full time equivalent 9,008 9,014 9,195 9,397 9,701
------------------------------------------ ----- ----- ----- ----- -----
Primarily
loans to
real estate
investors
and
(a) developers.
(b) Primarily loans secured by owner-
occupied real estate.
(c) See Reconciliation of Non-GAAP
Financial Measures.
(d) September 30, 2012 ratios are
estimated.
PARENT COMPANY ONLY BALANCE SHEETS (unaudited)
Comerica Incorporated
September 30, December 31, September 30,
(in millions, except share
data) 2012 2011 2011
-------------------------- ---- ---- ----
ASSETS
Cash and due from
subsidiary bank $13 $7 3
Short-term investments
with subsidiary bank 418 411 440
Other short-term
investments 88 90 86
Investment in subsidiaries,
principally banks 7,200 7,011 7,098
Premises and equipment 4 4 3
Other assets 150 177 189
------------ --- --- ---
Total assets $7,873 $7,700 $7,819
------------ ------ ------ ------
LIABILITIES AND SHAREHOLDERS' EQUITY
Medium- and long-term debt $632 $666 $722
Other liabilities 157 166 146
----------------- --- --- ---
Total liabilities 789 832 868
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares 1,141 1,141 1,141
Capital surplus 2,153 2,170 2,162
Accumulated other
comprehensive loss (253) (356) (230)
Retained earnings 5,831 5,546 5,471
Less cost of common stock
in treasury -36,790,174
shares at 9/30/12,
30,831,076 shares at
12/31/11, and 29,238,425
shares at 9/30/11 (1,788) (1,633) (1,593)
------------------------- ------ ------ ------
Total shareholders' equity 7,084 6,868 6,951
-------------------------- ----- ----- -----
Total liabilities and
shareholders' equity $7,873 $7,700 $7,819
--------------------- ------ ------ ------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Comerica Incorporated and Subsidiaries
Accumulated
Common Stock Other Total
------------
Shares Capital Comprehensive Retained Treasury Shareholders'
(in millions, except per share data) 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 - - - - 297 - 297
Other comprehensive income, net of tax - - - 159 - - 159
Cash dividends declared on common stock ($0.30 per share) - - - - (55) - (55)
Purchase of common stock (2.7) - - - - (75) (75)
Acquisition of Sterling Bancshares, Inc. 24.3 122 681 - - - 803
Net issuance of common stock under employee stock plans 0.8 - (29) - (18) 47 -
Share-based compensation - - 29 - - - 29
--- --- --- --- --- --- ---
BALANCE AT SEPTEMBER 30, 2011 198.9 $1,141 $2,162 $(230) $5,471 $(1,593) $6,951
----------------------------- ----- ------ ------ ----- ------ ------- ------
BALANCE AT DECEMBER 31, 2011 197.3 $1,141 $2,170 $(356) $5,546 $(1,633) $6,868
Net income - - - - 391 - 391
Other comprehensive income, net of tax - - - 103 - - 103
Cash dividends declared on common stock ($0.40 per share) - - - - (78) - (78)
Purchase of common stock (7.1) - - - - (215) (215)
Net issuance of common stock under employee stock plans 1.2 - (48) - (28) 62 (14)
Share-based compensation - - 29 - - - 29
Other - - 2 - - (2) -
----- --- --- --- --- --- --- ---
BALANCE AT SEPTEMBER 30, 2012 191.4 $1,141 $2,153 $(253) $5,831 $(1,788) $7,084
----------------------------- ----- ------ ------ ----- ------ ------- ------
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in millions) Business Retail Wealth
Three Months Ended September 30, 2012 Bank Bank Management Finance Other Total
------------------------------------- ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest income (expense) (FTE) $386 $161 $47 $(176) $10 $428
Provision for credit losses 15 6 3 - (2) 22
Noninterest income 76 41 62 14 4 197
Noninterest expenses 144 181 78 3 43 449
Provision (benefit) for income taxes (FTE) 92 5 10 (62) (8) 37
--- --- --- --- ---
Net income (loss) $211 $10 $18 $(103) $(19) $117
---- --- --- ----- ---- ----
Net credit-related charge-offs $27 $13 $3 - - $43
Selected average balances:
Assets $34,863 $5,964 $4,566 $12,166 $5,717 $63,276
Loans 33,856 5,265 4,476 - - 43,597
Deposits 25,142 20,682 3,667 193 173 49,857
Statistical data:
Return on average assets (a) 2.42% 0.18% 1.61% N/M N/M 0.74%
Efficiency ratio 31.23 89.39 71.14 N/M N/M 71.68
----- ----- ----- --- --- -----
Business Retail Wealth
Three Months Ended June 30, 2012 Bank Bank Management Finance Other Total
-------------------------------- ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest income (expense) (FTE) $385 $161 $46 $(166) $9 $435
Provision for credit losses 12 3 2 - 2 19
Noninterest income 83 47 66 17 (2) 211
Noninterest expenses 151 177 79 2 24 433
Provision (benefit) for income taxes (FTE) 95 9 11 (56) (9) 50
--- --- --- --- ---
Net income (loss) $210 $19 $20 $(95) $(10) $144
---- --- --- ---- ---- ----
Net credit-related charge-offs $26 $9 $10 - - $45
Selected average balances:
Assets $34,376 $5,946 $4,604 $11,953 $5,071 $61,950
Loans 33,449 5,250 4,529 - - 43,228
Deposits 24,145 20,525 3,640 177 192 48,679
Statistical data:
Return on average assets (a) 2.44% 0.35% 1.76% N/M N/M 0.93%
Efficiency ratio 32.30 85.17 73.98 N/M N/M 67.53
---------------- ----- ----- ----- --- --- -----
Business Retail Wealth
Three Months Ended September 30, 2011 Bank Bank Management Finance Other Total
------------------------------------- ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest income (expense) (FTE) $363 $173 $45 $(168) 11 $424
Provision for credit losses 18 16 7 - (6) 35
Noninterest income 77 47 56 26 (5) 201
Noninterest expenses 164 175 77 3 44 463
Provision (benefit) for income taxes (FTE) 79 10 6 (54) (12) 29
--- --- --- --- --- ---
Net income (loss) $179 $19 $11 $(91) $(20) $98
---- --- --- ---- ---- ---
Net credit-related charge-offs $40 $28 $9 - - $77
Selected average balances:
Assets $30,608 $5,985 $4,674 $10,210 $6,761 $58,238
Loans 29,957 5,483 4,658 - - 40,098
Deposits 21,759 19,792 3,198 236 113 45,098
Statistical data:
Return on average assets (a) 2.33% 0.38% 0.95% N/M N/M 0.67%
Efficiency ratio 37.38 79.17 78.06 N/M N/M 75.59
---------------- ----- ----- ----- --- --- -----
(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) Other Finance
Three Months Ended September 30, 2012 Midwest Western Texas Florida Markets International & Other Total
------------------------------------- ------- ------- ----- ------- ------- ------------- ------- -----
Earnings summary:
Net interest income (expense) (FTE) $194 $181 $139 $10 $51 $19 $(166) $428
Provision for credit losses 2 - 10 5 6 1 (2) 22
Noninterest income 95 34 30 3 7 10 18 197
Noninterest expenses 175 105 89 10 16 8 46 449
Provision (benefit) for income taxes (FTE) 41 40 25 (1) (5) 7 (70) 37
--- --- --- --- --- --- --- ---
Net income (loss) $71 $70 $45 $(1) $41 $13 $(122) $117
--- --- --- --- --- --- ----- ----
Net credit-related charge-offs $12 $10 $7 $9 $4 1 - $43
Selected average balances:
Assets $13,784 $13,442 $10,327 $1,309 $4,621 $1,910 $17,883 $63,276
Loans 13,468 13,163 9,585 1,328 4,266 1,787 - 43,597
Deposits 19,628 15,192 9,941 512 2,823 1,395 366 49,857
Statistical data:
Return on average assets (a) 1.38% 1.74% 1.61% (0.29)% 3.54% 2.65% N/M 0.74%
Efficiency ratio 60.40 48.63 52.50 76.90 27.38 28.28 N/M 71.68
---------------- ----- ----- ----- ----- ----- ----- --- -----
Other Finance
Three Months Ended June 30, 2012 Midwest Western Texas Florida Markets International & Other Total
-------------------------------- ------- ------- ----- ------- ------- ------------- ------- -----
Earnings summary:
Net interest income (expense) (FTE) $196 $177 $143 $11 $46 $19 $(157) $435
Provision for credit losses 1 1 7 11 (4) 1 2 19
Noninterest income 96 37 31 4 19 9 15 211
Noninterest expenses 177 104 88 11 18 9 26 433
Provision (benefit) for income taxes (FTE) 39 40 28 (2) 4 6 (65) 50
--- --- --- --- --- --- --- ---
Net income (loss) $75 $69 $51 $(5) $47 $12 $(105) $144
--- --- --- --- --- --- ----- ----
Net credit-related charge-offs $10 $12 $4 $10 $9 $ - - $45
Selected average balances:
Assets $14,028 $13,170 $10,270 $1,407 $4,183 $1,868 $17,024 $61,950
Loans 13,766 12,920 9,506 1,429 3,837 1,770 - 43,228
Deposits 19,227 14,371 10,185 446 2,728 1,353 369 48,679
Statistical data:
Return on average assets (a) 1.48% 1.78% 1.78% (1.35)% 4.53% 2.54% N/M 0.93%
Efficiency ratio 60.51 48.44 50.96 77.45 30.43 29.78 N/M 67.53
---------------- ----- ----- ----- ----- ----- ----- --- -----
Other Finance
Three Months Ended September 30, 2011 Midwest Western Texas Florida Markets International & Other Total
------------------------------------- ------- ------- ----- ------- ------- ------------- ------- -----
Earnings summary:
Net interest income (expense) (FTE) $199 $166 $143 $11 $41 $21 $(157) $424
Provision for credit losses 20 13 (8) 2 12 2 (6) 35
Noninterest income 96 32 29 4 10 9 21 201
Noninterest expenses 183 106 81 11 25 10 47 463
Provision (benefit) for income taxes (FTE) 32 29 35 1 (8) 6 (66) 29
--- --- --- --- --- --- --- ---
Net income (loss) $60 $50 $64 $1 $22 $12 $(111) $98
--- --- --- --- --- --- ----- ---
Net credit-related charge-offs $33 $32 $2 $5 $5 $ - - $77
Selected average balances:
Assets $14,118 $12,110 $8,510 $1,450 $3,374 $1,705 $16,971 $58,238
Loans 13,873 11,889 8,145 1,477 3,082 1,632 - 40,098
Deposits 18,510 12,975 8,865 404 2,392 1,603 349 45,098
Statistical data:
Return on average assets (a) 1.22% 1.42% 2.66% 0.29% 2.66% 2.76% N/M 0.67%
Efficiency ratio 62.08 53.68 46.83 78.39 50.21 31.22 N/M 75.59
---------------- ----- ----- ----- ----- ----- ----- --- -----
(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
September 30, June 30, March 31, December 31, September 30,
(dollar amounts in millions) 2012 2012 2012 2011 2011
--------------------------- ---- ---- ---- ---- ----
Tier 1 Common Capital Ratio:
Tier 1 capital (a) (b) $6,685 $6,676 $6,647 $6,582 $6,560
Less:
Trust preferred securities - - - 25 49
--- --- --- --- ---
Tier 1 common capital (b) $6,685 $6,676 $6,647 $6,557 $6,511
------------------------ ------ ------ ------ ------ ------
Risk-weighted assets (a) (b) $64,772 $64,312 $64,742 $63,244 $61,593
--------------------------- ------- ------- ------- ------- -------
Tier 1 risk-based capital ratio (b) 10.32% 10.38% 10.27% 10.41% 10.65%
Tier 1 common capital ratio (b) 10.32 10.38 10.27 10.37 10.57
------------------------------ ----- ----- ----- ----- -----
Tangible Common Equity Ratio:
Common shareholders' equity $7,084 $7,028 $6,985 $6,868 $6,951
Less:
Goodwill 635 635 635 635 635
Other intangible assets 25 28 30 32 35
--- --- --- --- ---
Tangible common equity $6,424 $6,365 $6,320 $6,201 $6,281
---------------------- ------ ------ ------ ------ ------
Total assets $63,314 $62,650 $62,593 $61,008 $60,888
Less:
Goodwill 635 635 635 635 635
Other intangible assets 25 28 30 32 35
--- --- --- --- ---
Tangible assets $62,654 $61,987 $61,928 $60,341 $60,218
--------------- ------- ------- ------- ------- -------
Common equity ratio 11.19% 11.22% 11.16% 11.26% 11.42%
Tangible common equity ratio 10.25 10.27 10.21 10.27 10.43
---------------------------- ----- ----- ----- ----- -----
Tangible Common Equity per Share of Common Stock:
Common shareholders' equity $7,084 $7,028 $6,985 $6,868 $6,951
Tangible common equity 6,424 6,365 6,320 6,201 6,281
---------------------- ----- ----- ----- ----- -----
Shares of common stock outstanding (in millions) 191 194 197 197 199
----------------------------------------------- --- --- --- --- ---
Common shareholders' equity per share of common
stock $37.01 $36.18 $35.44 $34.80 $34.94
Tangible common equity per share of common stock 33.56 32.76 32.06 31.42 31.57
------------------------------------------------ ----- ----- ----- ----- -----
(a) Tier 1 capital and risk-
weighted assets as defined
by regulation.
(b) September 30, 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 ratio removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets. 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
