DALLAS, Jan. 16, 2013 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported fourth quarter 2012 net income of $130 million, compared to $117 million for the third quarter 2012. Earnings per fully diluted share were 68 cents for the fourth quarter 2012, compared to 61 cents for the third quarter 2012.
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Full-year 2012 net income was $521 million, an increase of $128 million, or 33 percent, compared to 2011. 2012 net income included restructuring expenses associated with the acquisition of Sterling Bancshares, Inc. (Sterling) of $35 million ($22 million, after tax), compared to $75 million ($47 million, after tax) for 2011. Earnings per fully diluted share were $2.67 for 2012, compared to $2.09 for 2011.
(dollar
amounts
in
millions,
except
per
share
data) 4th Qtr '12 3rd Qtr '12 4th Qtr '11
--------- ----------- ----------- -----------
Net
interest
income
(a) $424 $427 $444
Provision
for
credit
losses 16 22 18
Noninterest
income 204 197 182
Noninterest
expenses
(b) 427 449 479
Provision
for
income
taxes 55 36 33
Net
income 130 117 96
Net
income
attributable
to
common
shares 128 116 95
Diluted
income
per
common
share 0.68 0.61 0.48
Average
diluted
shares
(in
millions) 188 191 197
Tier
1
common
capital
ratio
(d) 10.11% (c) 10.35% 10.37%
Tangible
common
equity
ratio
(d) 9.71 10.25 10.27
-------- ---- ----- -----
(a) Included
accretion of
the purchase
discount on
the acquired
Sterling loan
portfolio of
$13 million
($8 million,
after tax),
$15 million
($9 million,
after tax) and
$26 million
($16 million,
after tax) in
the fourth
quarter 2012,
third quarter
2012 and
fourth quarter
2011,
respectively.
(b) Included restructuring expenses of $2
million ($1 million, after tax), $25
million ($16 million, after tax) and
$37 million ($23 million, after tax)
in the fourth quarter 2012, third
quarter 2012 and fourth quarter
2011, respectively, associated with
the acquisition of Sterling.
(c) December 31, 2012 ratio is estimated.
(d) See Reconciliation of Non-GAAP
Financial Measures.
"Loan and fee income growth combined with expense control contributed to our 11 percent increase in net income, when compared to the third quarter," said Ralph W. Babb Jr., chairman and chief executive officer. "In this slow growing national economy, we continue to benefit from our position in growth markets and industry expertise, which helped drive an increase in average total loans of $522 million, primarily reflecting an increase of $762 million, or 3 percent, in commercial loans. We continue to capitalize on opportunities by allocating resources to faster growing markets and segments.
"Average total deposits increased $1.4 billion in the fourth quarter to a record $51.3 billion, primarily reflecting an increase of $1.3 billion, or 6 percent, in noninterest-bearing deposits."
"Excluding accretion, net interest income was stable in the fourth quarter, and noninterest income increased $7 million to $204 million, primarily due to increases in customer-driven categories. Credit quality continued to be strong and our capital position remains a source of strength to support our growth. We repurchased 3.1 million shares in the fourth quarter and 10.1 million shares for the full-year 2012 under our share repurchase program. Combined with dividends, we returned 79 percent of 2012 net income to shareholders.
"Looking ahead, we believe our focus on relationships, growth markets, industry expertise and expense management should assist us in increasing returns to shareholders and provide us the momentum that will not only carry us through an extended low-rate environment, but enable us to succeed in it, too."
Fourth Quarter and Full-Year 2012 Overview
Fourth Quarter 2012 Compared to Third Quarter 2012
-- Average total loans increased $522 million, or 1 percent, to $44.1
billion, primarily reflecting an increase of $762 million, or 3 percent,
in commercial loans, partially offset by a decrease of $241 million, or
2 percent, in commercial real estate loans (commercial mortgage and real
estate construction loans). The increase in commercial loans was
primarily driven by increases in National Dealer Services, Energy,
general Middle Market and Mortgage Banker Finance, partially offset by a
decrease in Corporate. Period-end loans increased $1.9 billion, or 4
percent, to $46.1 billion, primarily reflecting an increase of $2.1
billion, or 7 percent, in commercial loans, partially offset by a
decrease of $239 million, or 2 percent, in commercial real estate loans.
-- Average total deposits increased $1.4 billion, to $51.3 billion,
primarily reflecting an increase of $1.3 billion, or 6 percent, in
noninterest-bearing deposits. Period-end deposits increased $2.2
billion, to $52.2 billion.
-- Net interest income was $424 million in the fourth quarter 2012 compared
to $427 million in the third quarter 2012. Excluding the $2 million
decrease in the accretion of the purchase discount on the acquired
Sterling loan portfolio, net interest income was stable.
-- Strong credit quality continued in the fourth quarter 2012. Nonaccrual
loans decreased $146 million, to $519 million at December 31, 2012. Net
credit-related charge-offs decreased $6 million to $37 million, or 0.34
percent of average loans, in the fourth quarter 2012. The provision for
credit losses was $16 million in the fourth quarter 2012 compared to $22
million in the third quarter 2012.
-- Noninterest income increased $7 million to $204 million in the fourth
quarter 2012 compared to $197 million for the third quarter 2012. The
increase was primarily due to increases in customer driven categories.
-- Noninterest expenses decreased $22 million to $427 million in the fourth
quarter 2012, compared to $449 million in the third quarter 2012. Fourth
quarter 2012 included final restructuring expenses of $2 million related
to the Sterling acquisition, a decrease of $23 million compared to the
third quarter 2012.
-- Comerica repurchased 3.1 million shares of common stock under the share
repurchase program in the fourth quarter 2012. Combined with the
dividend, $121 million, or 93 percent of net income, was returned to
shareholders in the fourth quarter.
Full-Year 2012 Compared to Full-Year 2011
-- Net income of $521 million for 2012 increased $128 million, or 33
percent, compared to 2011.
-- Average total loans increased $3.2 billion, or 8 percent, to $43.3
billion in 2012, in part due to the acquisition of Sterling and
reflecting an increase of $4.0 billion, or 18 percent, in commercial
loans, partially offset by a decrease of $636 million in commercial real
estate loans. The increase in commercial loans was primarily driven by
increases in Energy, Mortgage Banker Finance, National Dealer Services,
general Middle Market, Technology and Life Sciences, and Corporate.
Period-end total loans increased $3.4 billion, or 8 percent, to $46.1
billion from year-end 2011 to year-end 2012.
-- Average total deposits increased $5.8 billion, or 13 percent, to $49.5
billion in 2012, in part due to the acquisition of Sterling. Period-end
total deposits increased $4.4 billion, or 9 percent.
-- Net interest income increased $75 million, or 5 percent, primarily due
to an increase in average earning assets of $5.4 billion and an $18
million increase in the accretion of the purchase discount on the
acquired Sterling loan portfolio, partially offset by a decrease in
yields.
-- Credit quality improved significantly. The provision for credit losses
declined $65 million to $79 million in 2012, compared to 2011. Net
credit-related charge-offs decreased $158 million to $170 million.
-- Noninterest income increased $26 million compared to 2011, primarily in
customer-driven categories.
-- Noninterest expenses decreased $14 million. 2012 included
Sterling-related merger and restructuring charges of $35 million,
compared to $75 million in 2011. Salaries and employee benefits expense
increased $43 million, primarily due to increased pension expense and
the impact of Sterling.
-- 10.1 million shares were repurchased in 2012, which, combined with
dividends, returned 79 percent of 2012 net income to shareholders.
Net Interest Income
(dollar amounts
in millions) 4th Qtr '12 3rd Qtr '12 4th Qtr '11
--------------- ----------- ----------- -----------
Net interest
income $424 $427 $444
Net interest
margin 2.87% 2.96% 3.19%
Selected average
balances:
Total earning
assets $59,276 $57,801 $55,676
Total loans 44,119 43,597 41,454
Total investment
securities 10,250 9,791 9,781
Federal Reserve
Bank deposits
(excess
liquidity) 4,638 4,160 4,216
Total deposits 51,292 49,857 47,779
Total
noninterest-
bearing deposits 22,758 21,469 19,176
----------------- ------ ------ ------
-- Net interest income of $424 million in the fourth quarter 2012 decreased
$3 million compared to the third quarter 2012.
-- An increase in loan volumes increased net interest income by $4
million.
-- The continued shift in the loan portfolio mix reduced net interest
income $4 million. The change in loan portfolio mix primarily
reflected a decrease in higher-yielding commercial real estate
loans, an increase in lower-yielding commercial loans, the maturity
of higher-yielding fixed-rate loans and positive credit quality
migration throughout the loan portfolio.
-- A decline in LIBOR reduced net interest income $2 million.
-- Accretion of the purchase discount on the acquired Sterling loan
portfolio decreased $2 million to $13 million in the fourth quarter
2012, compared to $15 million in the third quarter 2012.
-- Interest earned on investment securities available-for-sale
decreased $2 million, primarily as a result of lower reinvestment
yields on mortgage-backed investment securities, partially offset by
an increase in volume.
-- Funding costs decreased $1 million due to lower deposit rates. In
addition, third quarter 2012 included a $2 million negative residual
value adjustment to assets in the leasing portfolio.
-- Average earning assets increased $1.5 billion in the fourth quarter
2012, compared to the third quarter 2012, primarily reflecting a $522
million increase in average loans, a $478 million increase in excess
liquidity and a $459 million increase in average investment securities
available-for-sale.
-- Average deposits increased $1.4 billion in the fourth quarter 2012,
compared to the third quarter 2012, primarily due to a $1.3 billion
increase in average noninterest-bearing deposits. The rate paid on total
average interest-bearing deposits decreased 2 basis points, to 22 basis
points.
-- The net interest margin of 2.87 percent decreased 9 basis points
compared to the third quarter 2012. The net interest margin was
negatively impacted by the continued shift in mix in the loan portfolio
(4 basis points), lower yields on mortgage-backed securities (3 basis
points), the decline in LIBOR (2 basis points), the increase in excess
liquidity (2 basis points), and lower accretion on the acquired Sterling
loan portfolio (1 basis point). The third quarter negative residual
value adjustment (2 basis points) and lower funding costs (1 basis
point) partially offset the decline.
Noninterest Income
Noninterest income increased $7 million to $204 million for the fourth quarter 2012 compared to $197 million for the third quarter 2012. The increase was primarily due to increases in customer driven categories, including increases in commercial lending fees of $3 million, customer derivative income of $3 million and fiduciary income of $3 million, partially offset by a decrease in letter of credit fees of $2 million.
Noninterest Expenses
Noninterest expenses decreased $22 million to $427 million in the fourth quarter 2012, compared to $449 million in the third quarter 2012. The decrease was primarily due to decreases of $23 million in restructuring expenses, $4 million in legal fees and $2 million in employee benefits expense, partially offset by an increase of $4 million in severance expense. In addition, noninterest expenses were reduced by $6 million in the third quarter 2012 due to gains on sales of assets. Restructuring charges related to the Sterling acquisition are complete.
Provision for Income Taxes
The provision for income taxes was $55 million in the fourth quarter 2012, compared to $36 million in the third quarter 2012. The $19 million increase in the provision for income taxes reflected the increase in income before income taxes, as well as adjustments for certain discrete state tax items totaling $5 million in the fourth quarter 2012. In addition, the third quarter 2012 provision for income taxes included a benefit of $4 million from interest on tax refunds, net of tax.
Credit Quality
"Credit quality continued to be strong in the fourth quarter, with lower nonaccrual loans, watch list loans and provision for credit losses," said Babb. "With net charge-offs of 34 basis points, we are well within our historically normal range. We have demonstrated throughout the cycle that we can effectively manage credit."
(dollar amounts in millions) 4th Qtr '12 3rd Qtr '12 4th Qtr '11
--------------------------- ----------- ----------- -----------
Net credit-related charge-offs $37 $43 $60
Net credit-related charge-offs/
Average total loans 0.34% 0.39% 0.57%
Provision for credit losses $16 $22 $18
Nonperforming loans (a) 541 692 887
Nonperforming assets (NPAs) (a) 587 755 981
NPAs/Total loans and foreclosed
property 1.27% 1.71% 2.29%
Loans past due 90 days or more and
still accruing $23 $36 $58
Allowance for loan losses 629 647 726
Allowance for credit losses on
lending-related commitments (b) 32 35 26
--- --- ---
Total allowance for credit losses 661 682 752
Allowance for loan losses/Period-
end total loans 1.37% 1.46% 1.70%
Allowance for loan losses/Average
total loans 1.43 1.48 1.75
Allowance for loan losses/
Nonperforming loans 116 94 82
-------------------------- --- --- ---
(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 $565
million in the fourth quarter 2012, to $3.1 billion at December 31,
2012. Nonperforming assets decreased $168 million to $587 million at
December 31, 2012.
-- During the fourth quarter 2012, $36 million of borrower relationships
over $2 million were transferred to nonaccrual status, an increase of $1
million from the third quarter 2012.
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $65.4 billion and $6.9 billion, respectively, at December 31, 2012, compared to $63.3 billion and $7.1 billion, respectively, at September 30, 2012. There were approximately 188 million common shares outstanding at December 31, 2012. Comerica repurchased $93 million of common stock (3.1 million shares) under the share repurchase program during the fourth quarter 2012. Combined with the dividend of $0.15 per share in the fourth quarter 2012, share repurchases and dividends returned 93 percent of fourth quarter 2012 net income to shareholders. Common shareholders' equity also reflected a $160 million decline in accumulated other comprehensive income, net of tax, including temporary unrealized losses on investment securities available-for-sale of $49 million and a net decline of $111 million due to actuarial losses as a result of changes in defined benefit plan assumptions, net of amortization. For full-year 2012, share repurchases totaled $304 million (10.1 million shares), which, combined with dividends, returned 79 percent of 2012 net income to shareholders.
Comerica's tangible common equity ratio was 9.71 percent at December 31, 2012, a decrease of 54 basis points from September 30, 2012. The estimated Tier 1 common capital ratio decreased 24 basis points, to 10.11 percent at December 31, 2012, from September 30, 2012. The estimated Tier 1 common ratio under fully phased-in Basel III (as proposed) was 9.1 percent at December 31, 2012.
Full-Year 2013 Outlook
For 2013, management expects the following compared to 2012, assuming a continuation of the current slow growing economic environment:
-- Continued growth in average loans at a slower pace, with economic
uncertainty impacting demand and a continued focus on maintaining
pricing and structure discipline in a competitive environment.
-- Lower net interest income, reflecting both a decline of $40 million to
$50 million in purchase accounting accretion and the effect of continued
low rates. Loan growth should partially offset the impact of low rates
on loans and securities.
-- Provision for credit losses stable, reflecting loan growth offset by a
decline in nonperforming loans and net charge-offs.
-- Increase in customer-driven noninterest income, reflecting continued
cross-sell initiatives and selective pricing adjustments. (Outlook does
not include expectations for non-customer driven income).
-- Lower noninterest expense, reflecting further cost savings due to tight
expense control and no restructuring expenses.
-- Income tax expense to approximate 36.5 percent of pre-tax income less
approximately $66 million in tax benefits.
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 December 31, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses fourth quarter 2012 results compared to third quarter 2012.
The following table presents net income (loss) by business segment.
(dollar amounts
in millions) 4th Qtr '12 3rd Qtr '12 4th Qtr '11
--------------- ----------- ----------- -----------
Business Bank $212 90% $211 84% $201 94%
Retail Bank 8 3 10 8 10 4
Wealth Management 16 7 18 8 5 2
----------------- --- --- --- --- --- ---
236 100% 239 100% 216 100%
Finance (105) (103) (94)
Other (a) (1) (19) (26)
-------- --- --- ---
Total $130 $117 $96
----- ---- ---- ---
(a) Includes items not directly
associated with the three
major business segments or
the Finance Division.
Business Bank
(dollar amounts in millions) 4th Qtr 3rd Qtr 4th Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $393 $386 $381
Provision for credit losses 8 15 (6)
Noninterest income 79 76 73
Noninterest expenses 149 144 162
Net income 212 211 201
Net credit-related charge-
offs 26 27 32
Selected average balances:
Assets 35,362 34,863 32,151
Loans 34,325 33,856 31,260
Deposits 26,051 25,143 23,296
-------- ------ ------ ------
-- Average loans increased $469 million, primarily reflecting increases in
Middle Market and Mortgage Banker Finance, partially offset by decreases
in Corporate and Commercial Real Estate. The increase in Middle Market
was primarily due to increases in National Dealer Services, Energy and
general Middle Market.
-- Average deposits increased $908 million, primarily reflecting increases
in Corporate, Middle Market and Mortgage Banker Finance. The increase in
Middle Market was primarily due to an increase in the Financial Services
Division.
-- Net interest income increased $7 million, primarily due to a decrease in
net funds transfer pricing (FTP) charges on loans and an increase in
loan volume, partially offset by a decrease in accretion on the acquired
Sterling loan portfolio.
-- The provision for credit losses decreased $7 million, primarily
reflecting decreases in Corporate and Commercial Real Estate, partially
offset by an increase in Middle Market. The increase in Middle Market
primarily reflected increases in the Environmental Services Group and
general Middle Market.
-- Noninterest income increased $3 million, primarily due to increases in
commercial lending fees and customer derivative income, partially offset
by a decrease in letter of credit fees.
-- Noninterest expenses increased $5 million, primarily due to increases in
salaries expenses and net allocated corporate overhead expenses,
partially offset by a decrease in legal expenses. The increase in
salaries primarily reflected increases in severance and business unit
incentives. In addition, noninterest expenses were reduced in the third
quarter due to gains on sales of assets.
Retail Bank
(dollar amounts in millions) 4th Qtr 3rd Qtr 4th Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $156 $161 $176
Provision for credit losses 7 6 15
Noninterest income 43 41 35
Noninterest expenses 181 181 182
Net income (loss) 8 10 10
Net credit-related charge-
offs 6 13 16
Selected average balances:
Assets 5,952 5,964 6,250
Loans 5,255 5,265 5,571
Deposits 20,910 20,682 20,715
-------- ------ ------ ------
-- Average loans decreased $10 million, primarily due to a decrease in
Personal Banking.|
-- Average deposits increased $228 million, primarily due to an increase in
Small Business.
-- Net interest income decreased $5 million, primarily due to a decrease in
net FTP funding credits on deposits and lower accretion on the acquired
Sterling loan portfolio.
-- Noninterest income increased $2 million, primarily due to an increase in
customer derivative income.
Wealth Management
(dollar amounts in millions) 4th Qtr 3rd Qtr 4th Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $47 $47 $47
Provision for credit losses 2 3 11
Noninterest income 65 62 55
Noninterest expenses 84 78 83
Net income 16 18 5
Net credit-related charge-
offs 5 3 12
Selected average balances:
Assets 4,686 4,566 4,672
Loans 4,539 4,476 4,623
Deposits 3,798 3,667 3,400
-------- ----- ----- -----
-- Average loans increased $63 million, primarily due to an increase in
Private Banking. |
-- Average deposits increased $131 million, primarily due to increases in
Private Banking.
-- Noninterest income increased $3 million, primarily the result of
increases in fiduciary income and net securities gains.
-- Noninterest expenses increased $6 million, primarily as a result of an
operational loss.
The decrease in the net loss of $18 million in the Other segment primarily reflected the after-tax impact of the decrease in restructuring expenses in the fourth quarter 2012, compared to the third quarter 2012.
Geographic Market Segments
The geographic market segments were realigned in the fourth quarter 2012 to reflect Comerica's three largest geographic markets: Michigan, California and Texas. Other Markets includes Florida, Arizona, the International Finance division and businesses that have a significant presence outside of the three primary geographic markets. The tables below present the geographic market results based on the methodologies in effect at December 31, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses fourth quarter 2012 results compared to third quarter 2012.
The following table presents net income (loss) by market segment.
(dollar
amounts
in
millions) 4th Qtr '12 3rd Qtr '12 4th Qtr '11
---------- ----------- ----------- -----------
Michigan $74 31% $71 30% $54 25%
California 64 27 70 29 67 31
Texas 45 19 45 19 55 26
Other
Markets 53 23 53 22 40 18
-------- --- --- --- --- --- ---
236 100% 239 100% 216 100%
Finance &
Other (a) (106) (122) (120)
---------- ---- ---- ----
Total $130 $117 $96
----- ---- ---- ---
(a) Includes items not directly
associated with the
geographic markets.
Michigan Market
(dollar amounts in millions) 4th Qtr 3rd Qtr 4th Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $193 $194 $202
Provision for credit losses (9) 2 20
Noninterest income 98 95 85
Noninterest expenses 183 175 185
Net income 74 71 54
Net credit-related charge-
offs 1 12 32
Selected average balances:
Assets 13,782 13,784 13,976
Loans 13,415 13,475 13,725
Deposits 20,019 19,628 19,076
-------- ------ ------ ------
-- Average loans decreased $60 million, primarily due to decreases in
Corporate, Personal Banking and Commercial Real Estate, partially offset
by an increase in Middle Market, primarily in National Dealer Services.
-- Average deposits increased $391 million, primarily due to increases in
Corporate, Middle Market and Small Business.
-- The provision for credit losses decreased $11 million, primarily due to
a decrease in general Middle Market.
-- Noninterest income increased $3 million, primarily reflecting increases
in customer derivative income and commercial lending fees.
-- Noninterest expenses increased $8 million, primarily due to an
operational loss and third quarter 2012 gains on sales of assets that
reduced noninterest expenses.
California Market
(dollar amounts in millions) 4th Qtr 3rd Qtr 4th Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $180 $178 $166
Provision for credit losses 6 5 (12)
Noninterest income 35 34 32
Noninterest expenses 100 98 101
Net income 64 70 67
Net credit-related charge-
offs 12 11 5
Selected average balances:
Assets 13,551 13,173 11,959
Loans 13,275 12,915 11,743
Deposits 15,457 14,965 13,472
-------- ------ ------ ------
-- Average loans increased $360 million, primarily due to an increase in
Middle Market, primarily reflecting an increase in National Dealer
Services.
-- Average deposits increased $492 million, primarily due to increases in
Middle Market and Private Banking. The increase in Middle Market was
primarily due to an increase in general Middle Market.
-- Net interest income increased $2 million, primarily due to an increase
in average loan balances and a decrease in net FTP funding charges.
-- The provision for loan losses increased $1 million, primarily due to an
increase in Middle Market, partially offset by decreases in Commercial
Real Estate and Corporate.
-- Noninterest expenses increased $2 million, primarily due to nominal
increases in several categories, partially offset by a decrease in legal
expenses.
Texas Market
(dollar amounts in millions) 4th Qtr 3rd Qtr 4th Qtr
'12 '12 '11
--------------------------- -------- -------- --------
Net interest income (FTE) $138 $139 $158
Provision for credit losses 9 10 8
Noninterest income 31 30 26
Noninterest expenses 90 89 89
Net income 45 45 55
Net credit-related charge-
offs 5 7 4
Selected average balances:
Assets 10,555 10,327 9,712
Loans 9,818 9,585 8,952
Deposits 9,809 9,941 10,333
-------- ----- ----- ------
-- Average loans increased $233 million, primarily due to an increase in
Middle Market. The increase in Middle Market was primarily due to an
increase in Energy.
-- Average deposits decreased $132 million, primarily reflecting decreases
in Middle Market and Corporate, partially offset by increases in Small
Business and Personal Banking.
-- Net interest income decreased $1 million, primarily due to a decrease in
accretion on the acquired Sterling loan portfolio.
-- The provision for credit losses decreased $1 million, primarily due to a
decrease in Private Banking.
Conference Call and Webcast
Comerica will host a conference call to review fourth quarter 2012 financial results at 7 a.m. CT Wednesday, January 16, 2013. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 80972031). 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 January 31, 2013. The conference call replay can be accessed by calling (855) 859-2056 or (404) 537-3406 (event ID No. 80972031). 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 or determinations; 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 and "Item 1A. Risk Factors" beginning on page 73 of Comerica's Quarterly Report on Form 10-Q for the quarter ended September 30, 2012. 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 Years Ended
------------------ -----------
December 31, September 30, December 31, December 31,
(in millions, except per share data) 2012 2012 2011 2012 2011
----------------------------------- ---- ---- ---- ---- ----
PER COMMON SHARE AND COMMON STOCK DATA
Diluted net income $0.68 $0.61 $0.48 $2.67 $2.09
Cash dividends declared 0.15 0.15 0.10 0.55 0.40
Common shareholders' equity (at period end) 36.87 37.01 34.80
Tangible common equity (at period end) (a) 33.38 33.56 31.42
Average diluted shares (in thousands) 187,954 191,492 196,729 192,473 186,168
------------------------------------ ------- ------- ------- ------- -------
KEY RATIOS
Return on average common shareholders' equity 7.36% 6.67% 5.51% 7.43% 6.18%
Return on average assets 0.81 0.74 0.63 0.83 0.69
Tier 1 common capital ratio (a) (b) 10.11 10.35 10.37
Tier 1 risk-based capital ratio (b) 10.11 10.35 10.41
Total risk-based capital ratio (b) 13.11 13.67 14.25
Leverage ratio (b) 10.52 10.73 10.92
Tangible common equity ratio (a) 9.71 10.25 10.27
------------------------------- ---- ----- -----
AVERAGE BALANCES
Commercial loans $27,462 $26,700 $23,515 $26,224 $22,208
Real estate construction loans:
Commercial Real Estate business line (c) 1,033 999 1,189 1,031 1,429
Other business lines (d) 266 390 430 359 414
--- --- --- --- ---
Total real estate construction loans 1,299 1,389 1,619 1,390 1,843
Commercial mortgage loans:
Commercial Real Estate business line (c) 1,939 2,140 2,552 2,259 2,217
Other business lines (d) 7,580 7,530 7,836 7,583 7,808
----- ----- ----- ----- -----
Total commercial mortgage loans 9,519 9,670 10,388 9,842 10,025
Lease financing 839 852 919 864 950
International loans 1,314 1,302 1,128 1,272 1,191
Residential mortgage loans 1,525 1,488 1,591 1,505 1,580
Consumer loans 2,161 2,196 2,294 2,209 2,278
----- ----- ----- ----- -----
Total loans 44,119 43,597 41,454 43,306 40,075
Earning assets 59,276 57,801 55,676 57,484 52,121
Total assets 64,559 63,276 61,045 62,855 56,917
Noninterest-bearing deposits 22,758 21,469 19,176 21,004 16,994
Interest-bearing deposits 28,534 28,388 28,603 28,536 26,768
------ ------ ------ ------ ------
Total deposits 51,292 49,857 47,779 49,540 43,762
Common shareholders' equity 7,062 7,045 6,947 7,012 6,351
--------------------------- ----- ----- ----- ----- -----
NET INTEREST INCOME
Net interest income (fully taxable equivalent basis) $425 $428 $445 $1,731 $1,657
Fully taxable equivalent adjustment 1 1 1 3 4
Net interest margin (fully taxable equivalent basis) 2.87% 2.96% 3.19% 3.03% 3.19%
--------------------------------------------------- ---- ---- ---- ---- ----
CREDIT QUALITY
Nonaccrual loans $519 $665 $860
Reduced-rate loans 22 27 27
--- --- ---
Total nonperforming loans (e) 541 692 887
Foreclosed property 46 63 94
--- --- ---
Total nonperforming assets (e) 587 755 981
Loans past due 90 days or more and still accruing 23 36 58
Gross loan charge-offs 60 59 85 $245 $423
Loan recoveries 23 16 25 75 95
--- --- --- --- ---
Net loan charge-offs 37 43 60 170 328
Allowance for loan losses 629 647 726
Allowance for credit losses on lending-related commitments 32 35 26
--- --- ---
Total allowance for credit losses 661 682 752
Allowance for loan losses as a percentage of total loans 1.37% 1.46% 1.70%
Net loan charge-offs as a percentage of average total loans (f) 0.34 0.39 0.57 0.39% 0.82%
Nonperforming assets as a percentage of total loans and
foreclosed property (e) 1.27 1.71 2.29
Allowance for loan losses as a percentage of total nonperforming
loans 116 94 82
---------------------------------------------------------------- --- --- ---
(a) See Reconciliation of Non-GAAP
Financial Measures.
(b) December 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) Lending-related commitment
charge-offs were zero in all
periods presented.
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
December 31, September 30, December 31,
(in millions, except share data) 2012 2012 2011
------------------------------- ---- ---- ----
(unaudited) (unaudited)
ASSETS
Cash and due from banks $1,395 $933 $982
Federal funds sold 100 - -
Interest-bearing deposits with banks 3,039 3,005 2,574
Other short-term investments 125 146 149
Investment securities available-for-sale 10,297 10,569 10,104
Commercial loans 29,513 27,460 24,996
Real estate construction loans 1,240 1,392 1,533
Commercial mortgage loans 9,472 9,559 10,264
Lease financing 859 837 905
International loans 1,293 1,277 1,170
Residential mortgage loans 1,527 1,495 1,526
Consumer loans 2,153 2,174 2,285
-------------- ----- ----- -----
Total loans 46,057 44,194 42,679
Less allowance for loan losses (629) (647) (726)
------------------------------ ---- ---- ----
Net loans 45,428 43,547 41,953
Premises and equipment 622 625 675
Accrued income and other assets 4,353 4,489 4,571
------------------------------- ----- ----- -----
Total assets $65,359 $63,314 $61,008
------------ ------- ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $23,279 $21,753 $19,764
Money market and interest-bearing checking deposits 21,284 20,407 20,311
Savings deposits 1,606 1,589 1,524
Customer certificates of deposit 5,531 5,742 5,808
Foreign office time deposits 502 486 348
---------------------------- --- --- ---
Total interest-bearing deposits 28,923 28,224 27,991
------------------------------- ------ ------ ------
Total deposits 52,202 49,977 47,755
Short-term borrowings 110 63 70
Accrued expenses and other liabilities 1,385 1,450 1,371
Medium- and long-term debt 4,720 4,740 4,944
-------------------------- ----- ----- -----
Total liabilities 58,417 56,230 54,140
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares 1,141 1,141 1,141
Capital surplus 2,162 2,153 2,170
Accumulated other comprehensive loss (413) (253) (356)
Retained earnings 5,931 5,831 5,546
Less cost of common stock in treasury -39,889,610
shares at 12/31/12, 36,790,174 shares at 9/30/12 and
30,831,076 shares at 12/31/11 (1,879) (1,788) (1,633)
----------------------------------------------------- ------ ------ ------
Total shareholders' equity 6,942 7,084 6,868
-------------------------- ----- ----- -----
Total liabilities and shareholders' equity $65,359 $63,314 $61,008
------------------------------------------ ------- ------- -------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended Years Ended
December 31, December 31,
------------ ------------
(in millions, except
per share data) 2012 2011 2012 2011
-------------------- ---- ---- ---- ----
INTEREST INCOME
Interest and fees on
loans $398 $415 $1,617 $1,564
Interest on investment
securities 55 63 234 233
Interest on short-
term investments 3 3 12 12
------------------ --- --- --- ---
Total interest income 456 481 1,863 1,809
INTEREST EXPENSE
Interest on deposits 16 21 70 90
Interest on medium-
and long-term debt 16 16 65 66
------------------- --- --- --- ---
Total interest expense 32 37 135 156
---------------------- --- --- --- ---
Net interest income 424 444 1,728 1,653
Provision for credit
losses 16 18 79 144
-------------------- --- --- --- ---
Net interest income
after provision for
credit losses 408 426 1,649 1,509
NONINTEREST INCOME
Service charges on
deposit accounts 52 52 214 208
Fiduciary income 42 36 158 151
Commercial lending
fees 25 23 96 87
Letter of credit fees 17 18 71 73
Card fees 12 11 47 58
Foreign exchange
income 9 10 38 40
Bank-owned life
insurance 9 10 39 37
Brokerage fees 5 5 19 22
Net securities gains
(losses) 1 (4) 12 14
Other noninterest
income 32 21 124 102
----------------- --- --- --- ---
Total noninterest
income 204 182 818 792
NONINTEREST EXPENSES
Salaries 196 205 778 770
Employee benefits 59 52 240 205
----------------- --- --- --- ---
Total salaries and
employee benefits 255 257 1,018 975
Net occupancy expense 42 47 163 169
Equipment expense 15 17 65 66
Outside processing fee
expense 28 27 107 101
Software expense 23 23 90 88
Merger and
restructuring charges 2 37 35 75
FDIC insurance expense 9 8 38 43
Advertising expense 6 7 27 28
Other real estate
expense 3 3 9 22
Other noninterest
expenses 44 53 205 204
----------------- --- --- --- ---
Total noninterest
expenses 427 479 1,757 1,771
----------------- --- --- ----- -----
Income before income
taxes 185 129 710 530
Provision for income
taxes 55 33 189 137
-------------------- --- --- --- ---
NET INCOME 130 96 521 393
Less income allocated
to participating
securities 2 1 6 4
--------------------- --- --- --- ---
Net income
attributable to
common shares $128 $95 $515 $389
---------------- ---- --- ---- ----
Earnings per common
share:
Basic $0.68 $0.48 $2.68 $2.11
Diluted 0.68 0.48 2.67 2.09
Comprehensive income
(loss) (30) (30) 464 426
Cash dividends
declared on common
stock 28 20 106 75
Cash dividends
declared per common
share 0.15 0.10 0.55 0.40
-------------------- ---- ---- ---- ----
CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Fourth Third Second First Fourth Fourth Quarter 2012 Compared To:
--------------------------------
Quarter Quarter Quarter Quarter Quarter Third Quarter 2012 Fourth Quarter 2011
(in millions, except per share data) 2012 2012 2012 2012 2011 Amount Percent Amount Percent
----------------------------------- ---- ---- ---- ---- ---- ------ ------- ------ -------
INTEREST INCOME
Interest and fees on loans $398 $400 $408 $411 $415 $(2) - % $(17) (4)%
Interest on investment securities 55 57 59 63 63 (2) (2) (8) (12)
Interest on short-term investments 3 3 3 3 3 - - - -
---------------------------------- --- --- --- --- --- --- --- --- ---
Total interest income 456 460 470 477 481 (4) (1) (25) (5)
INTEREST EXPENSE
Interest on deposits 16 17 18 19 21 (1) (6) (5) (23)
Interest on medium- and long-term debt 16 16 17 16 16 - - - -
-------------------------------------- --- --- --- --- --- --- --- --- ---
Total interest expense 32 33 35 35 37 (1) (3) (5) (13)
---------------------- --- --- --- --- --- --- --- --- ---
Net interest income 424 427 435 442 444 (3) - (20) (4)
Provision for credit losses 16 22 19 22 18 (6) (25) (2) (7)
--------------------------- --- --- --- --- --- --- --- --- ---
Net interest income after provision 408 405 416 420 426 3 1 (18) (4)
for credit losses
NONINTEREST INCOME
Service charges on deposit accounts 52 53 53 56 52 (1) (2) - -
Fiduciary income 42 39 39 38 36 3 4 6 14
Commercial lending fees 25 22 24 25 23 3 19 2 8
Letter of credit fees 17 19 18 17 18 (2) (8) (1) (10)
Card fees 12 12 12 11 11 - - 1 10
Foreign exchange income 9 9 10 10 10 - - (1) (13)
Bank-owned life insurance 9 10 10 10 10 (1) (7) (1) (8)
Brokerage fees 5 5 4 5 5 - - - -
Net securities gains (losses) 1 - 6 5 (4) 1 N/M 5 N/M
Other noninterest income 32 28 35 29 21 4 5 11 55
------------------------ --- --- --- --- --- --- --- --- ---
Total noninterest income 204 197 211 206 182 7 4 22 12
NONINTEREST EXPENSES
Salaries 196 192 189 201 205 4 3 (9) (5)
Employee benefits 59 61 61 59 52 (2) (4) 7 13
----------------- --- --- --- --- --- --- --- --- ---
Total salaries and employee benefits 255 253 250 260 257 2 1 (2) (1)
Net occupancy expense 42 40 40 41 47 2 4 (5) (10)
Equipment expense 15 17 16 17 17 (2) (6) (2) (11)
Outside processing fee expense 28 27 26 26 27 1 7 1 6
Software expense 23 23 21 23 23 - - - -
Merger and restructuring charges 2 25 8 - 37 (23) (94) (35) (95)
FDIC insurance expense 9 9 10 10 8 - - 1 6
Advertising expense 6 7 7 7 7 (1) (16) (1) (15)
Other real estate expense 3 2 - 4 3 1 36 - -
Other noninterest expenses 44 46 55 60 53 (2) (2) (9) (16)
-------------------------- --- --- --- --- --- --- --- --- ---
Total noninterest expenses 427 449 433 448 479 (22) (5) (52) (11)
-------------------------- --- --- --- --- --- --- --- --- ---
Income before income taxes 185 153 194 178 129 32 20 56 43
Provision for income taxes 55 36 50 48 33 19 50 22 64
-------------------------- --- --- --- --- --- --- --- --- ---
NET INCOME 130 117 144 130 96 13 11 34 36
Less income allocated to participating securities 2 1 2 1 1 1 12 1 82
------------------------------------------------- --- --- --- --- --- --- --- --- ---
Net income attributable to common shares $128 $116 $142 $129 $95 $12 11% $33 36%
---------------------------------------- ---- ---- ---- ---- --- --- --- --- ---
Earnings per common share:
Basic $0.68 $0.61 $0.73 $0.66 $0.48 $0.07 11% $0.20 42%
Diluted 0.68 0.61 0.73 0.66 0.48 0.07 11 0.20 42
Comprehensive income (loss) (30) 165 169 160 (30) (195) N/M - -
Cash dividends declared on common stock 28 29 29 20 20 (1) (1) 8 43
Cash dividends declared per common share 0.15 0.15 0.15 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) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
------------ ------- ------- ------- ------- -------
Balance at beginning of period $647 $667 $704 $726 $767
Loan charge-offs:
Commercial 42 19 26 25 28
Real estate construction:
Commercial Real Estate business
line (a) 1 2 2 2 4
Other business lines (b) - - 1 - 1
----------------------- --- --- --- --- ---
Total real estate construction 1 2 3 2 5
Commercial mortgage:
Commercial Real Estate business
line (a) 5 12 16 13 17
Other business lines (b) 6 13 11 13 24
----------------------- --- --- --- --- ---
Total commercial mortgage 11 25 27 26 41
International - 1 - 2 2
Residential mortgage 2 6 3 2 2
Consumer 4 6 5 5 7
-------- --- --- --- --- ---
Total loan charge-offs 60 59 64 62 85
Recoveries on loans previously
charged-off:
Commercial 13 7 10 9 11
Real estate construction 1 3 1 1 4
Commercial mortgage 6 5 4 3 9
International 1 - - 1 -
Residential mortgage 1 - - 1 -
Consumer 1 1 4 2 1
-------- --- --- --- --- ---
Total recoveries 23 16 19 17 25
---------------- --- --- --- --- ---
Net loan charge-offs 37 43 45 45 60
Provision for loan losses 19 23 8 23 19
------------------------- --- --- --- --- ---
Balance at end of period $629 $647 $667 $704 $726
------------------------ ---- ---- ---- ---- ----
Allowance for loan losses as a
percentage of total loans 1.37% 1.46% 1.52% 1.64% 1.70%
Net loan charge-offs as a
percentage of average total loans 0.34 0.39 0.42 0.43 0.57
---------------------------------- ---- ---- ---- ---- ----
Primarily
charge-
offs of
loans to
real estate
investors
and
(a) developers.
Primarily
charge-
offs of
loans
secured by
owner-
occupied
real
(b) estate.
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited)
Comerica Incorporated and Subsidiaries
2012 2011
---- ----
(in millions) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
------------ ------- ------- ------- ------- -------
Balance at
beginning of
period $35 $36 $25 $26 $27
Add: Provision
for credit
losses on
lending-related
commitments (3) (1) 11 (1) (1)
---------------- --- --- --- --- ---
Balance at end of
period $32 $35 $36 $25 $26
----------------- --- --- --- --- ---
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2012 2011
---- ----
(in millions) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
------------ ------- ------- ------- ------- -------
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial $103 $154 $175 $205 $237
Real estate construction:
Commercial Real Estate
business line (a) 30 45 60 77 93
Other business lines (b) 3 6 9 8 8
----------------------- --- --- --- --- ---
Total real estate
construction 33 51 69 85 101
Commercial mortgage:
Commercial Real Estate
business line (a) 94 137 155 174 159
Other business lines (b) 181 219 220 275 268
----------------------- --- --- --- --- ---
Total commercial mortgage 275 356 375 449 427
Lease financing 3 3 4 4 5
International - - - 4 8
------------- --- --- --- --- ---
Total nonaccrual business
loans 414 564 623 747 778
Retail loans:
Residential mortgage 70 69 76 69 71
Consumer:
Home equity 31 28 16 9 5
Other consumer 4 4 4 5 6
-------------- --- --- --- --- ---
Total consumer 35 32 20 14 11
-------------- --- --- --- --- ---
Total nonaccrual retail
loans 105 101 96 83 82
----------------------- --- --- --- --- ---
Total nonaccrual loans 519 665 719 830 860
Reduced-rate loans 22 27 28 26 27
------------------ --- --- --- --- ---
Total nonperforming loans
(c) 541 692 747 856 887
Foreclosed property 46 63 67 67 94
------------------- --- --- --- --- ---
Total nonperforming assets
(c) $587 $755 $814 $923 $981
-------------------------- ---- ---- ---- ---- ----
Nonperforming loans as a
percentage of total loans 1.17% 1.57% 1.70% 1.99% 2.08%
Nonperforming assets as a
percentage of total loans 1.27 1.71 1.85 2.14 2.29
and foreclosed property
Allowance for loan losses as
a percentage of total 116 94 89 82 82
nonperforming loans
Loans past due 90 days or
more and still accruing $23 $36 $43 $50 $58
------------------------- --- --- --- --- ---
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at
beginning of period $665 $719 $830 $860 $929
Loans transferred to
nonaccrual (d) 36 35 47 69 99
Nonaccrual business loan
gross charge-offs (e) (54) (46) (56) (55) (76)
Loans transferred to accrual
status (d) - - (41) - -
Nonaccrual business loans
sold (f) (48) (20) (16) (7) (19)
Payments/Other (g) (80) (23) (45) (37) (73)
------------------ --- --- --- --- ---
Nonaccrual loans at end of
period $519 $665 $719 $830 $860
-------------------------- ---- ---- ---- ---- ----
(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 $54 $46 $56 $55 $76
Performing watch list loans - 1 - - -
Consumer and residential
mortgage loans 6 12 8 7 9
--- --- --- --- ---
Total gross loan charge-offs $60 $59 $64 $62 $85
--- --- --- --- ---
(f) Analysis of loans sold:
Nonaccrual business loans $48 $20 $16 $7 $19
Performing watch list loans 24 42 7 11 -
--- --- --- --- ---
Total loans sold $72 $62 $23 $18 $19
--- --- --- --- ---
(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
Years Ended
-----------
December 31, 2012 December 31, 2011
----------------- -----------------
Average Average Average Average
(dollar amounts in millions) Balance Interest Rate Balance Interest Rate
--------------------------- ------- -------- ---- ------- -------- ----
Commercial loans $26,224 $903 3.44% $22,208 $820 3.69%
Real estate construction loans 1,390 62 4.44 1,843 80 4.37
Commercial mortgage loans 9,842 437 4.44 10,025 424 4.23
Lease financing 864 26 3.01 950 33 3.51
International loans 1,272 47 3.73 1,191 46 3.83
Residential mortgage loans 1,505 68 4.55 1,580 83 5.27
Consumer loans 2,209 76 3.42 2,278 80 3.50
-------------- ----- --- ---- ----- --- ----
Total loans (a) 43,306 1,619 3.74 40,075 1,566 3.91
Auction-rate securities available-for-sale 275 2 0.79 479 4 0.72
Other investment securities available-for-sale 9,640 233 2.48 7,692 231 3.06
---------------------------------------------- ----- --- ---- ----- --- ----
Total investment securities available-for-sale 9,915 235 2.43 8,171 235 2.91
Interest-bearing deposits with banks (b) 4,129 10 0.26 3,746 9 0.24
Other short-term investments 134 2 1.65 129 3 2.17
---------------------------- --- --- ---- --- --- ----
Total earning assets 57,484 1,866 3.27 52,121 1,813 3.49
Cash and due from banks 983 921
Allowance for loan losses (693) (838)
Accrued income and other assets 5,081 4,713
----- -----
Total assets $62,855 $56,917
------- -------
Money market and interest-bearing checking
deposits $20,629 35 0.17 $19,088 47 0.25
Savings deposits 1,593 1 0.06 1,550 2 0.11
Customer certificates of deposit 5,902 31 0.53 5,719 39 0.68
Foreign office and other time deposits 412 3 0.63 411 2 0.48
-------------------------------------- --- --- ---- --- --- ----
Total interest-bearing deposits 28,536 70 0.25 26,768 90 0.33
Short-term borrowings 76 - 0.12 138 - 0.13
Medium- and long-term debt 4,818 65 1.36 5,519 66 1.20
-------------------------- ----- --- ---- ----- --- ----
Total interest-bearing sources 33,430 135 0.41 32,425 156 0.48
Noninterest-bearing deposits 21,004 16,994
Accrued expenses and other liabilities 1,409 1,147
Total shareholders' equity 7,012 6,351
----- -----
Total liabilities and shareholders' equity $62,855 $56,917
------- -------
Net interest income/rate spread (FTE) $1,731 2.86 $1,657 3.01
------ ------
FTE adjustment $3 $4
--- ---
Impact of net noninterest-bearing sources of
funds 0.17 0.18
-------------------------------------------- ---- ----
Net interest margin (as a percentage of average
earning assets) (FTE) (a) (b) 3.03% 3.19%
----------------------------------------------- ---- ----
(a) Accretion of the purchase
discount on the acquired loan
portfolio of $71 million and
$53 million in the 2012 and
2011, respectively, increased
the net interest margin by 12
basis points and 10 basis
points in the 2012 and 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 22 basis
points in the 2012 and 2011,
respectively.
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
------------------
December 31, 2012 September 30, 2012 December 31, 2011
----------------- ------------------ -----------------
Average Average Average Average Average Average
(dollar amounts in millions) Balance Interest Rate Balance Interest Rate Balance Interest Rate
--------------------------- ------- -------- ---- ------- -------- ---- ------- -------- ----
Commercial loans $27,462 $230 3.33% $26,700 $227 3.38% $23,515 $216 3.64%
Real estate construction loans 1,299 15 4.32 1,389 15 4.36 1,619 21 5.26
Commercial mortgage loans 9,519 100 4.22 9,670 106 4.34 10,388 119 4.54
Lease financing 839 7 3.27 852 4 2.04 919 8 3.44
International loans 1,314 12 3.73 1,302 12 3.77 1,128 10 3.63
Residential mortgage loans 1,525 16 4.24 1,488 17 4.67 1,591 20 5.06
Consumer loans 2,161 19 3.38 2,196 19 3.44 2,294 21 3.58
-------------- ----- --- ---- ----- --- ---- ----- --- ----
Total loans (a) 44,119 399 3.60 43,597 400 3.66 41,454 415 3.98
Auction-rate securities available-for-sale 216 - 0.81 234 1 0.97 426 1 0.64
Other investment securities available-for-sale 10,034 55 2.25 9,557 57 2.42 9,355 62 2.74
---------------------------------------------- ------ --- ---- ----- --- ---- ----- --- ----
Total investment securities available-for-sale 10,250 55 2.22 9,791 58 2.38 9,781 63 2.64
Interest-bearing deposits with banks (b) 4,785 2 0.25 4,276 3 0.26 4,308 3 0.24
Other short-term investments 122 1 1.13 137 - 1.88 133 1 2.26
---------------------------- --- --- ---- --- --- ---- --- --- ----
Total earning assets 59,276 457 3.08 57,801 461 3.19 55,676 482 3.45
Cash and due from banks 1,030 971 959
Allowance for loan losses (654) (673) (773)
Accrued income and other assets 4,907 5,177 5,183
----- ----- -----
Total assets $64,559 $63,276 $61,045
------- ------- -------
Money market and interest-bearing checking
deposits $20,770 9 0.16 $20,495 8 0.17 $20,716 12 0.21
Savings deposits 1,603 - 0.03 1,618 - 0.04 1,652 - 0.12
Customer certificates of deposit 5,634 6 0.49 5,894 8 0.52 5,872 9 0.60
Foreign office and other time deposits 527 1 0.60 381 1 0.71 363 - 0.40
-------------------------------------- --- --- ---- --- --- ---- --- --- ----
Total interest-bearing deposits 28,534 16 0.22 28,388 17 0.24 28,603 21 0.29
Short-term borrowings 70 - 0.12 89 - 0.12 142 - 0.07
Medium- and long-term debt 4,735 16 1.35 4,745 16 1.35 4,976 16 1.30
-------------------------- ----- --- ---- ----- --- ---- ----- --- ----
Total interest-bearing sources 33,339 32 0.38 33,222 33 0.40 33,721 37 0.44
Noninterest-bearing deposits 22,758 21,469 19,176
Accrued expenses and other liabilities 1,400 1,540 1,201
Total shareholders' equity 7,062 7,045 6,947
----- ----- -----
Total liabilities and shareholders' equity $64,559 $63,276 $61,045
------- ------- -------
Net interest income/rate spread (FTE) $425 2.70 $428 2.79 $445 3.01
---- ---- ----
FTE adjustment $1 $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) 2.87% 2.96% 3.19%
----------------------------------------------- ---- ---- ----
(a) Accretion of the purchase
discount on the acquired loan
portfolio of $13 million, $15
million and $26 million in the
fourth and third quarters of
2012 and the fourth quarter of
2011, respectively, increased
the net interest margin by 9
basis points, 10 basis points
and 19 basis points in the
fourth and third quarters of
2012 and the fourth quarter of
2011, respectively.
(b) Excess liquidity, represented by
average balances deposited with
the Federal Reserve Bank,
reduced the net interest margin
by 22 basis points and by 21
basis points in the fourth and
third quarters of 2012,
respectively, and by 24 basis
points in the fourth quarter of
2011.
CONSOLIDATED STATISTICAL DATA (unaudited)
Comerica Incorporated and Subsidiaries
December 31, September 30, June 30, March 31, December 31,
(in millions, except per share data) 2012 2012 2012 2012 2011
----------------------------------- ---- ---- ---- ---- ----
Commercial loans:
Floor plan $2,939 $2,276 $2,406 $2,152 $1,822
Other 26,574 25,184 24,610 23,488 23,174
----- ------ ------ ------ ------ ------
Total commercial loans 29,513 27,460 27,016 25,640 24,996
Real estate construction loans:
Commercial Real Estate business line (a) 1,049 1,003 991 1,055 1,103
Other business lines (b) 191 389 386 387 430
----------------------- --- --- --- --- ---
Total real estate construction loans 1,240 1,392 1,377 1,442 1,533
Commercial mortgage loans:
Commercial Real Estate business line (a) 1,873 2,020 2,315 2,501 2,507
Other business lines (b) 7,599 7,539 7,515 7,578 7,757
----------------------- ----- ----- ----- ----- -----
Total commercial mortgage loans 9,472 9,559 9,830 10,079 10,264
Lease financing 859 837 858 872 905
International loans 1,293 1,277 1,224 1,256 1,170
Residential mortgage loans 1,527 1,495 1,469 1,485 1,526
Consumer loans:
Home equity 1,537 1,570 1,584 1,612 1,655
Other consumer 616 604 634 626 630
-------------- --- --- --- --- ---
Total consumer loans 2,153 2,174 2,218 2,238 2,285
-------------------- ----- ----- ----- ----- -----
Total loans $46,057 $44,194 $43,992 $43,012 $42,679
----------- ------- ------- ------- ------- -------
Goodwill $635 $635 $635 $635 $635
Core deposit intangible 20 23 25 27 29
Loan servicing rights 2 2 3 3 3
Tier 1 common capital ratio (c) (d) 10.11% 10.35% 10.38% 10.27% 10.37%
Tier 1 risk-based capital ratio (d) 10.11 10.35 10.38 10.27 10.41
Total risk-based capital ratio (d) 13.11 13.67 13.90 13.99 14.25
Leverage ratio (d) 10.52 10.73 10.92 10.94 10.92
Tangible common equity ratio (c) 9.71 10.25 10.27 10.21 10.27
Common shareholders' equity per share of common stock $36.87 $37.01 $36.18 $35.44 $34.80
Tangible common equity per share of common stock (c) 33.38 33.56 32.76 32.06 31.42
Market value per share for the quarter:
High 32.14 33.38 32.88 34.00 27.37
Low 27.72 29.32 27.88 26.25 21.53
Close 30.34 31.05 30.71 32.36 25.80
Quarterly ratios:
Return on average common shareholders' equity 7.36% 6.67% 8.22% 7.50% 5.51%
Return on average assets 0.81 0.74 0.93 0.84 0.63
Efficiency ratio 68.08 71.68 67.53 69.70 75.97
Number of banking centers 489 490 493 495 494
Number of employees - full time equivalent 8,967 9,008 9,014 9,195 9,397
------------------------------------------ ----- ----- ----- ----- -----
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) December 31, 2012 ratios are
estimated.
PARENT COMPANY ONLY BALANCE SHEETS (unaudited)
Comerica Incorporated
December 31, September 30, December 31,
(in millions, except share data) 2012 2012 2011
------------------------------- ---- ---- ----
ASSETS
Cash and due from subsidiary bank $2 $13 7
Short-term investments with subsidiary bank 431 418 411
Other short-term investments 88 88 90
Investment in subsidiaries, principally banks 7,045 7,200 7,011
Premises and equipment 4 4 4
Other assets 150 150 177
------------ --- --- ---
Total assets $7,720 $7,873 $7,700
------------ ------ ------ ------
LIABILITIES AND SHAREHOLDERS' EQUITY
Medium- and long-term debt $629 $632 $666
Other liabilities 149 157 166
----------------- --- --- ---
Total liabilities 778 789 832
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares 1,141 1,141 1,141
Capital surplus 2,162 2,153 2,170
Accumulated other comprehensive loss (413) (253) (356)
Retained earnings 5,931 5,831 5,546
Less cost of common stock in treasury -39,889,610
shares at 12/31/12, 36,790,174 shares at 9/30/12 and
30,831,076 shares at 12/31/11 (1,879) (1,788) (1,633)
----------------------------------------------------- ------ ------ ------
Total shareholders' equity 6,942 7,084 6,868
-------------------------- ----- ----- -----
Total liabilities and shareholders' equity $7,720 $7,873 $7,700
------------------------------------------ ------ ------ ------
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 - - - - 393 - 393
Other comprehensive income, net of tax - - - 33 - - 33
Cash dividends declared on common stock ($0.40 per share) - - - - (75) - (75)
Purchase of common stock (4.3) - - - - (116) (116)
Acquisition of Sterling Bancshares, Inc. 24.3 122 681 - - - 803
Net issuance of common stock under employee stock plans 0.8 - (29) - (19) 48 -
Share-based compensation - - 37 - - - 37
------------------------ --- --- --- --- --- --- ---
BALANCE AT DECEMBER 31, 2011 197.3 $1,141 $2,170 $(356) $5,546 $(1,633) $6,868
Net income - - - - 521 - 521
Other comprehensive loss, net of tax - - - (57) - - (57)
Cash dividends declared on common stock ($0.55 per share) - - - - (106) - (106)
Purchase of common stock (10.2) - - - - (308) (308)
Net issuance of common stock under employee stock plans 1.2 - (46) - (30) 63 (13)
Share-based compensation - - 37 - - - 37
Other - - 1 - - (1) -
----- --- --- --- --- --- --- ---
BALANCE AT DECEMBER 31, 2012 188.3 $1,141 $2,162 $(413) $5,931 $(1,879) $6,942
---------------------------- ----- ------ ------ ----- ------ ------- ------
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in millions) Business Retail Wealth
Three Months Ended December 31, 2012 Bank Bank Management Finance Other Total
------------------------------------ ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest income (expense) (FTE) $393 $156 $47 $(181) $10 $425
Provision for credit losses 8 7 2 - (1) 16
Noninterest income 79 43 65 15 2 204
Noninterest expenses 149 181 84 3 10 427
Provision (benefit) for income taxes (FTE) 103 3 10 (64) 4 56
--- --- --- --- ---
Net income (loss) $212 $8 $16 $(105) $(1) $130
---- --- --- ----- --- ----
Net credit-related charge-offs $26 $6 $5 - - $37
Selected average balances:
Assets $35,362 $5,952 $4,686 $12,439 $6,120 $64,559
Loans 34,325 5,255 4,539 - - 44,119
Deposits 26,051 20,910 3,798 320 213 51,292
Statistical data:
Return on average assets (a) 2.41% 0.14% 1.35% N/M N/M 0.81%
Efficiency ratio 31.49 90.68 76.96 N/M N/M 68.08
----- ----- ----- --- --- -----
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 25,143 20,682 3,667 193 172 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 December 31, 2011 Bank Bank Management Finance Other Total
------------------------------------ ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest income (expense) (FTE) $381 $176 $47 $(169) 10 $445
Provision for credit losses (6) 15 11 - (1) 19
Noninterest income 73 35 55 18 1 182
Noninterest expenses 162 182 83 3 48 478
Provision (benefit) for income taxes (FTE) 97 4 3 (60) (10) 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 31,260 5,571 4,623 - - 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 35.87 84.52 82.18 N/M N/M 75.97
---------------- ----- ----- ----- --- --- -----
(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 December 31, 2012 Michigan California Texas Markets & Other Total
------------------------------------ -------- ---------- ----- ------- ------- -----
Earnings summary:
Net interest income (expense) (FTE) $193 $180 $138 $85 $(171) $425
Provision for credit losses (9) 6 9 11 (1) 16
Noninterest income 98 35 31 23 17 204
Noninterest expenses 183 100 90 41 13 427
Provision (benefit) for income taxes (FTE) 43 45 25 3 (60) 56
--- --- --- --- --- ---
Net income (loss) $74 $64 $45 $53 $(106) $130
--- --- --- --- ----- ----
Net credit-related charge-offs $1 $12 $5 $19 - $37
Selected average balances:
Assets $13,782 $13,551 $10,555 $8,112 $18,559 $64,559
Loans 13,415 13,275 9,818 7,611 - 44,119
Deposits 20,019 15,457 9,809 5,474 533 51,292
Statistical data:
Return on average assets (a) 1.40% 1.56% 1.63% 2.65% N/M 0.81%
Efficiency ratio 62.77 46.47 53.38 38.84 N/M 68.08
---------------- ----- ----- ----- ----- --- -----
Other Finance
Three Months Ended September 30, 2012 Michigan California Texas Markets & Other Total
------------------------------------- -------- ---------- ----- ------- ------- -----
Earnings summary:
Net interest income (expense) (FTE) $194 $178 $139 $83 $(166) $428
Provision for credit losses 2 5 10 7 (2) 22
Noninterest income 95 34 30 20 18 197
Noninterest expenses 175 98 89 41 46 449
Provision (benefit) for income taxes (FTE) 41 39 25 2 (70) 37
--- --- --- --- --- ---
Net income (loss) $71 $70 $45 $53 $(122) $117
--- --- --- --- ----- ----
Net credit-related charge-offs $12 $11 $7 $13 - $43
Selected average balances:
Assets $13,784 $13,173 $10,327 $8,109 $17,883 $63,276
Loans 13,475 12,915 9,585 7,622 - 43,597
Deposits 19,628 14,965 9,941 4,958 365 49,857
Statistical data:
Return on average assets (a) 1.38% 1.75% 1.61% 2.64% N/M 0.74%
Efficiency ratio 60.40 46.13 52.50 40.00 N/M 71.68
---------------- ----- ----- ----- ----- --- -----
Other Finance
Three Months Ended December 31, 2011 Michigan California Texas Markets & Other Total
------------------------------------ -------- ---------- ----- ------- ------- -----
Earnings summary:
Net interest income (expense) (FTE) $202 $166 $158 $78 $(159) $445
Provision for credit losses 20 (12) 8 4 (1) 19
Noninterest income 85 32 26 20 19 182
Noninterest expenses 185 101 89 52 51 478
Provision (benefit) for income taxes (FTE) 28 42 32 2 (70) 34
--- --- --- --- --- ---
Net income (loss) $54 $67 $55 $40 $(120) $96
--- --- --- --- ----- ---
Net credit-related charge-offs $32 $5 $4 $19 - $60
Selected average balances:
Assets $13,976 $11,959 $9,712 $7,426 $17,972 $61,045
Loans 13,725 11,743 8,952 7,034 - 41,454
Deposits 19,076 13,472 10,333 4,530 368 47,779
Statistical data:
Return on average assets (a) 1.07% 1.86% 1.92% 2.14% N/M 0.63%
Efficiency ratio 63.84 51.18 48.23 53.73 N/M 75.97
---------------- ----- ----- ----- ----- --- -----
(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
December 31, September 30, June 30, March 31, December 31,
(dollar amounts in millions) 2012 2012 2012 2012 2011
--------------------------- ---- ---- ---- ---- ----
Tier 1 Common Capital Ratio:
Tier 1 capital (a) (b) $6,705 $6,685 $6,676 $6,647 $6,582
Less:
Trust preferred securities - - - - 25
--- --- --- --- ---
Tier 1 common capital (b) $6,705 $6,685 $6,676 $6,647 $6,557
------------------------ ------ ------ ------ ------ ------
Risk-weighted assets (a) (b) $66,312 $64,568 $64,312 $64,742 $63,244
--------------------------- ------- ------- ------- ------- -------
Tier 1 risk-based capital ratio (b) 10.11% 10.35% 10.38% 10.27% 10.41%
Tier 1 common capital ratio (b) 10.11 10.35 10.38 10.27 10.37
------------------------------ ----- ----- ----- ----- -----
Basel III Tier 1 Common Capital Ratio:
Tier 1 common capital (b) $6,705
Basel III proposed adjustments (c) (452)
--------------------------------- ----
Basel III Tier 1 common capital (c) $6,253
---------------------------------- ------
Risk-weighted assets (a) (b) $66,312
Basel III proposed adjustments (c) 2,410
-----
Basel III risk-weighted assets (c) $68,722
--------------------------------- -------
Tier 1 common capital ratio (b) 10.1%
Basel III Tier 1 common capital ratio (c) 9.1
---------------------------------------- ---
Tangible Common Equity Ratio:
Common shareholders' equity $6,942 $7,084 $7,028 $6,985 $6,868
Less:
Goodwill 635 635 635 635 635
Other intangible assets 22 25 28 30 32
--- --- --- --- ---
Tangible common equity $6,285 $6,424 $6,365 $6,320 $6,201
---------------------- ------ ------ ------ ------ ------
Total assets $65,359 $63,314 $62,650 $62,593 $61,008
Less:
Goodwill 635 635 635 635 635
Other intangible assets 22 25 28 30 32
--- --- --- --- ---
Tangible assets $64,702 $62,654 $61,987 $61,928 $60,341
--------------- ------- ------- ------- ------- -------
Common equity ratio 10.62% 11.19% 11.22% 11.16% 11.26%
Tangible common equity ratio 9.71 10.25 10.27 10.21 10.27
---------------------------- ---- ----- ----- ----- -----
Tangible Common Equity per Share of Common Stock:
Common shareholders' equity $6,942 $7,084 $7,028 $6,985 $6,868
Tangible common equity 6,285 6,424 6,365 6,320 6,201
---------------------- ----- ----- ----- ----- -----
Shares of common stock outstanding (in millions) 188 191 194 197 197
----------------------------------------------- --- --- --- --- ---
Common shareholders' equity per share of common
stock $36.87 $37.01 $36.18 $35.44 $34.80
Tangible common equity per share of common stock 33.38 33.56 32.76 32.06 31.42
------------------------------------------------ ----- ----- ----- ----- -----
(a) Tier 1 capital and risk-
weighted assets as defined
by regulation.
(b) December 31, 2012 Tier 1
capital and risk-weighted
assets are estimated.
(c) December 31, 2012 Basel III
Tier 1 common capital and
risk-weighted assets are
estimated based on the
proposed rules for the U.S.
adoption of the Basel III
regulatory capital
framework issued in June
2012.
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 Basel III Tier 1 common capital ratio further adjusts Tier 1 common capital and risk-weighted assets to account for the proposed changes issued in the U.S. banking regulators proposed rules for the U.S. adoption of the Basel III regulatory capital framework issued in June 2012. 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
