DALLAS, April 16, 2013 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported first quarter 2013 net income of $134 million, compared to $130 million for the fourth quarter 2012. Earnings per fully diluted share were 70 cents for the first quarter 2013, compared to 68 cents for the fourth quarter 2012.
(Logo: http://photos.prnewswire.com/prnh/20010807/CMALOGO)
(dollar
amounts
in
millions,
except
per
share
data) 1st Qtr '13 4th Qtr '12 1st Qtr '12
--------- ----------- ----------- -----------
Net
interest
income
(a) $416 $424 $442
Provision
for
credit
losses 16 16 22
Noninterest
income 200 204 206
Noninterest
expenses 416 427 448
Provision
for
income
taxes 50 55 48
Net
income 134 130 130
Net
income
attributable
to
common
shares 132 128 129
Diluted
income
per
common
share 0.70 0.68 0.66
Average
diluted
shares
(in
millions) 187 188 196
Tier
1
common
capital
ratio
(c) 10.40% (b) 10.17% 10.30%
Tangible
common
equity
ratio
(c) 9.86 9.76 10.25
-------- ---- ---- -----
(a)
Included
accretion of
the purchase
discount on
the acquired
loan
portfolio of
$11 million
($7 million,
after tax),
$13 million
($8 million,
after tax)
and $25
million ($16
million,
after tax) in
the first
quarter 2013,
fourth
quarter 2012
and first
quarter 2012,
respectively.
(b) March 31, 2013 ratio is estimated.
(c) See Reconciliation of Non-GAAP
Financial Measures
--- -------------------------------
"Broad-based average loan growth in each of our primary geographic markets, together with tight expense controls, contributed to our increased net income in the first quarter," said Ralph W. Babb Jr., chairman and chief executive officer. "Our commercial banking expertise drove our overall loan growth. An expected decline in Mortgage Banker Finance was more than offset by increases in general Middle Market, National Dealer Services, Energy, and Technology and Life Sciences. Credit quality continued to be stable.
"We remain focused on total payout to shareholders, reflected by share repurchases and dividends, while maintaining our strong capital ratios. We repurchased 2.1 million shares in the first quarter and combined with dividends, we returned 77 percent of first quarter net income to shareholders. On March 14, we announced that the Federal Reserve had completed its 2013 capital plan review and did not object to our capital plan and contemplated capital distributions. Our capital plan includes up to $288 million in share repurchases for the four-quarter period that ends in the first quarter 2014."
First Quarter 2013 Compared to Fourth Quarter 2012
-- Average total loans increased $498 million, or 1 percent, to $44.6
billion, primarily reflecting an increase of $594 million, or 2 percent,
in commercial loans, partially offset by a decrease of $106 million, or
1 percent, in combined commercial mortgage and real estate construction
loans. A $356 million decrease in Mortgage Banker Finance was more than
offset by broad-based increases in other business lines, including
general Middle Market, National Dealer Services, Energy, and Technology
and Life Sciences. Period-end total loans decreased $990 million, or 2
percent, to $45.1 billion, primarily reflecting a decrease of $687
million in Mortgage Banker Finance.
-- Average total deposits decreased $590 million, to $50.7 billion,
primarily reflecting a decrease of $1.3 billion, or 6 percent, in
noninterest-bearing deposits. The decrease in average
noninterest-bearing deposits reflected a $675 million decrease in the
Financial Services Division, which provides services to title and escrow
companies. Period-end total deposits decreased $74 million to $52.1
billion, reflecting a decrease of $502 million in noninterest-bearing
deposits, largely offset by increases of $267 million in money market
and interest-bearing checking deposits and $222 million in customer
certificates of deposit.
-- Net interest income was $416 million in the first quarter 2013, compared
to $424 million in the fourth quarter 2012. The $8 million decrease in
net interest income was primarily due to two fewer days in the first
quarter. Accretion of the purchase discount on the acquired loan
portfolio was $11 million in the first quarter 2013, compared to $13
million in the fourth quarter 2012.
-- Stable credit quality continued in the first quarter 2013. The provision
for credit losses of $16 million in the first quarter 2013 was unchanged
compared to the fourth quarter 2012.
-- Noninterest income decreased $4 million to $200 million in the first
quarter 2013, compared to $204 million in the fourth quarter 2012,
primarily reflecting decreases in customer derivative income and
commercial lending fees from high fourth quarter 2012 levels.
-- Noninterest expenses decreased $11 million to $416 million in the first
quarter 2013, compared to $427 million in the fourth quarter 2012,
primarily due to a decrease in salaries expense.
-- Comerica repurchased 2.1 million shares of common stock ($71 million) in
the first quarter 2013 under the 2012 capital plan. Combined with
dividends, 77 percent of net income was returned to shareholders in the
first quarter 2013.
-- As previously announced, the Federal Reserve completed its review of
Comerica's 2013 capital plan in the first quarter 2013 and did not
object to the capital distributions contemplated in the plan, including
up to $288 million of share repurchases for the four-quarter period
ending March 31, 2014.
-- Capital remained solid at March 31, 2013, as evidenced by an estimated
Tier 1 common capital ratio of 10.40 percent and an estimated Tier 1
common capital ratio under fully phased-in Basel III (as proposed) of
9.4 percent.
Net Interest Income
-------------------
(dollar amounts
in millions) 1st Qtr '13 4th Qtr '12 1st Qtr '12
--------------- ----------- ----------- -----------
Net interest
income $416 $424 $442
Net interest
margin 2.88% 2.87% 3.19%
Selected average
balances:
Total earning
assets $58,607 $59,276 $56,185
Total loans 44,617 44,119 42,269
Total investment
securities 10,021 10,250 9,889
Federal Reserve
Bank deposits
(excess
liquidity) 3,669 4,638 3,799
Total deposits 50,692 51,282 48,311
Total
noninterest-
bearing
deposits 21,506 22,758 19,637
------------- ------ ------ ------
-- Net interest income of $416 million in the first quarter 2013 decreased
$8 million compared to the fourth quarter 2012.
-- Two fewer days in the first quarter 2013 decreased net interest
income by $7 million.
-- An increase in loan volumes increased net interest income by $4
million.
-- Lower loan yields due to shifts in the loan portfolio mix decreased
net interest income by $2 million and a decline in LIBOR decreased
net interest income by $1 million.
-- A decrease in the accretion of the purchase discount on the acquired
loan portfolio decreased net interest income by $2 million.
-- A decrease in funding costs increased net interest income by $2
million. The rate paid on total average interest-bearing deposits
decreased 1 basis point to 21 basis points for the first quarter
2013.
-- Lower reinvestment yields on mortgage-backed investment securities
and a decrease in average balances decreased net interest income by
$2 million.
-- Average earning assets decreased $669 million in the first quarter 2013,
compared to the fourth quarter 2012, primarily reflecting decreases of
$969 million in excess liquidity and $229 million in average investment
securities available-for-sale, partially offset by a $498 million
increase in average loans.
-- The net interest margin of 2.88 percent increased 1 basis point compared
to the fourth quarter 2012. The increase in net interest margin was
primarily due to the benefit provided by a decrease in excess liquidity
(4 basis points) and lower deposit costs (1 basis point), partially
offset by lower loan yields (2 basis points), lower accretion on the
acquired loan portfolio (1 basis point) and lower yields on
mortgage-backed investment securities (1 basis point).
Noninterest Income
Noninterest income decreased $4 million to $200 million for the first quarter 2013, compared to $204 million for the fourth quarter 2012. The decrease was primarily due to decreases of $5 million in customer derivative income and $4 million in commercial lending fees, both from high fourth quarter 2012 levels, partially offset by a $3 million seasonal increase in service charges on deposit accounts.
Noninterest Expenses
Noninterest expenses decreased $11 million to $416 million in the first quarter 2013, compared to $427 million in the fourth quarter 2012. The decrease was primarily due to decreases of $8 million in salaries expense, largely reflecting two fewer days in the quarter and a decrease in severance expense, $3 million in net occupancy expense, $2 million in restructuring expenses and $2 million in other real estate expense, partially offset by an increase of $4 million in employee benefits expense, primarily due to an increase in pension expense.
Provision for Income Taxes
The provision for income taxes was $50 million in the first quarter 2013, compared to $55 million in the fourth quarter 2012. The fourth quarter 2012 provision for income taxes included adjustments for certain discrete state tax items totaling $5 million.
Credit Quality
"Our strong credit culture continued to be reflected in solid credit quality metrics," said Babb. "We had lower net charge-offs along with a decline in nonperforming assets. Our provision for credit losses was basically unchanged from the fourth quarter 2012."
(dollar amounts in millions) 1st Qtr '13 4th Qtr '12 1st Qtr '12
--------------------------- ----------- ----------- -----------
Net credit-related charge-offs $24 $37 $45
Net credit-related charge-offs/
Average total loans 0.21% 0.34% 0.43%
Provision for credit losses $16 $16 $22
Nonperforming loans (a) 515 541 856
Nonperforming assets (NPAs) (a) 555 595 923
NPAs/Total loans and foreclosed
property 1.23% 1.29% 2.14%
Loans past due 90 days or more and
still accruing $25 $23 $50
Allowance for loan losses 617 629 704
Allowance for credit losses on
lending-related commitments (b) 36 32 25
--- --- ---
Total allowance for credit losses 653 661 729
Allowance for loan losses/Period-
end total loans 1.37% 1.37% 1.64%
Allowance for loan losses/
Nonperforming loans 120 116 82
-------------------------- --- --- ---
Excludes
loans
acquired
with credit
(a) impairment.
(b) Included in "Accrued expenses
and other liabilities" on the
consolidated balance sheets.
--- -----------------------------
-- Nonaccrual loans decreased $25 million, to $494 million at March 31,
2013, compared to $519 million at December 31, 2012.
-- Internal watch list loans remained stable at $3.1 billion at both March
31, 2013 and December 31, 2012.
-- During the first quarter 2013, $34 million of borrower relationships
over $2 million were transferred to nonaccrual status, a decrease of $2
million from the fourth quarter 2012.
Full-Year 2013 Outlook
For full-year 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.
-- Customer-driven noninterest income relatively stable, reflecting
cross-sell initiatives and selective pricing adjustments partially
offset by regulatory pressures on certain products, such as customer
derivatives. 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.
-- Effective tax rate of approximately 27.5 percent.
Business Segments
Comerica's operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank and Wealth Management. The Finance Division is also reported as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at March 31, 2013 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2013 results compared to fourth quarter 2012.
The following table presents net income (loss) by business segment.
(dollar amounts
in millions) 1st Qtr '13 4th Qtr '12 1st Qtr '12
--------------- ----------- ----------- -----------
Business Bank $198 85% $209 90% $203 89%
Retail Bank 10 4 8 3 13 6
Wealth
Management 25 11 16 7 13 5
----------- --- --- --- --- --- ---
233 100% 233 100% 229 100%
Finance (98) (100) (88)
Other (a) (1) (3) (11)
-------- --- --- ---
Total $134 $130 $130
----- ---- ---- ----
(a) Includes items not directly
associated with the three
major business segments or
the Finance Division.
Business Bank
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'13 '12 '12
--------------------------- -------- -------- --------
Net interest income (FTE) $375 $387 $373
Provision for credit losses 20 6 2
Noninterest income 77 79 81
Noninterest expenses 146 149 158
Net income 198 209 203
Net credit-related charge-
offs 16 26 28
Selected average balances:
Assets 35,780 35,359 33,178
Loans 34,753 34,325 32,238
Deposits 25,514 26,051 23,997
-------- ------ ------ ------
-- Average loans increased $428 million, primarily reflecting an increase
in Middle Market, partially offset by a decrease in Mortgage Banker
Finance. The increase in Middle Market was primarily due to increases in
general Middle Market, National Dealer Services, Energy, and Technology
and Life Sciences.
-- Average deposits decreased $537 million, primarily reflecting a decrease
in Middle Market, partially offset by an increase in Corporate. The
decrease in Middle Market was primarily due to decreases in the
Financial Services Division, Technology and Life Sciences, and Energy.
-- Net interest income decreased $12 million, primarily due to two fewer
days in the quarter, a decrease in funds transfer pricing (FTP) credits,
due to a decrease in average deposits, and lower loan yields, partially
offset by the benefit provided by an increase in average loans.
-- The provision for credit losses increased $14 million, primarily
reflecting an increase due to the impact of enhancements to the approach
used to estimate probability of default statistics used in determining
the allowance for loan losses, partially offset by improvements in
credit quality.
-- Noninterest income decreased $2 million, primarily due to decreases in
commercial lending fees, customer derivative income and letter of credit
fees, partially offset by an increase in service charges on deposit
accounts.
-- Noninterest expenses decreased $3 million, primarily due to decreases in
salaries expense and legal fees.
Retail Bank
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'13 '12 '12
--------------------------- -------- -------- --------
Net interest income (FTE) $155 $156 $167
Provision for credit losses 6 7 6
Noninterest income 41 43 42
Noninterest expenses 175 181 183
Net income (loss) 10 8 13
Net credit-related charge-
offs 8 6 12
Selected average balances:
Assets 5,973 5,952 6,173
Loans 5,276 5,255 5,462
Deposits 21,049 20,910 20,373
-------- ------ ------ ------
-- Average loans increased $21 million, primarily due to an increase in
Small Business, partially offset by a decrease in Retail Banking.
-- Average deposits increased $139 million, primarily due to an increase in
Retail Banking, partially offset by a decrease in Small Business.
-- Noninterest income decreased $2 million, primarily due to decreases in
customer derivative income in Small Business and service charges on
deposit accounts.
-- Noninterest expense decreased $6 million, primarily due to a decrease in
salaries expense and smaller decreases in several other noninterest
expense categories.
Wealth Management
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'13 '12 '12
--------------------------- -------- -------- --------
Net interest income (FTE) $46 $47 $47
Provision for credit losses (6) 2 12
Noninterest income 65 65 65
Noninterest expenses 79 84 80
Net income 25 16 13
Net credit-related charge-
offs - 5 5
Selected average balances:
Assets 4,738 4,686 4,636
Loans 4,588 4,539 4,569
Deposits 3,682 3,798 3,611
-------- ----- ----- -----
-- Average loans increased $49 million, primarily due to an increase in
Private Banking.
-- Average deposits decreased $116 million, primarily due to a decrease in
Private Banking.
-- The provision for credit losses decreased $8 million, primarily due to
improvements in credit quality, partially offset by the impact of
enhancements to the approach used to estimate probability of default
statistics used in determining the allowance for loan losses.
-- Noninterest expenses decreased $5 million, primarily due to an
operational loss recorded in the fourth quarter and a decrease in
salaries expense.
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 March 31, 2013 and are presented on a fully taxable equivalent (FTE) basis.
The following table presents net income (loss) by market segment.
(a) Includes items not directly
associated with the
geographic markets.
(dollar
amounts
in
millions) 1st Qtr '13 4th Qtr '12 1st Qtr '12
---------- ----------- ----------- -----------
Michigan $77 33% $74 32% $78 34%
California 56 24 62 26 64 28
Texas 44 19 47 20 41 18
Other
Markets 56 24 50 22 46 20
-------- --- --- --- --- --- ---
233 100% 233 100% 229 100%
Finance &
Other (a) (99) (103) (99)
---------- --- ---- ---
Total $134 $130 $130
----- ---- ---- ----
-- Average loans increased $235 million in Michigan, $267 million in
California and $253 million in Texas.
-- Average deposits decreased $1.1 billion in California and increased $236
million in Michigan and $150 million in Texas. The decrease in
California was primarily due to decreases in Middle Market and Private
Banking, partially offset by an increase in Corporate. The decrease in
Middle Market primarily reflected decreases in the Financial Services
Division and Technology and Life Sciences.
-- The provision for credit losses in California increased $14 million,
primarily reflecting an increase due to the impact of enhancements in
the approach used to estimate probability of default statistics used in
determining the allowance for loan losses.
Michigan Market
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'13 '12 '12
--------------------------- -------- -------- --------
Net interest income (FTE) $189 $192 $196
Provision for credit losses (8) (8) (3)
Noninterest income 92 97 98
Noninterest expenses 168 180 179
Net income 77 74 78
Net credit-related charge-
offs 5 1 18
Selected average balances:
Assets 14,042 13,782 14,092
Loans 13,650 13,415 13,829
Deposits 20,255 20,019 19,415
-------- ------ ------ ------
California Market
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'13 '12 '12
--------------------------- -------- -------- --------
Net interest income (FTE) $171 $178 $165
Provision for credit losses 21 7 (3)
Noninterest income 35 35 33
Noninterest expenses 97 100 99
Net income 56 62 64
Net credit-related charge-
offs 10 12 11
Selected average balances:
Assets 13,795 13,549 12,310
Loans 13,542 13,275 12,096
Deposits 14,356 15,457 13,688
-------- ------ ------ ------
Texas Market
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'13 '12 '12
--------------------------- -------- -------- --------
Net interest income (FTE) $135 $136 $150
Provision for credit losses 8 4 25
Noninterest income 31 31 31
Noninterest expenses 91 90 93
Net income 44 47 41
Net credit-related charge-
offs 6 5 7
Selected average balances:
Assets 10,795 10,554 10,080
Loans 10,071 9,818 9,295
Deposits 9,959 9,809 10,229
-------- ----- ----- ------
Conference Call and Webcast
Comerica will host a conference call to review first quarter 2013 financial results at 7 a.m. CT Tuesday, April 16, 2013. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 22329365). The call and supplemental financial information can also be accessed via Comerica's "Investor Relations" page at www.comerica.com. A telephone replay will be available approximately two hours following the conference call through April 30, 2013. The conference call replay can be accessed by calling (855) 859-2056 or (404) 537-3406 (event ID No. 22329365). 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; any future acquisitions or divestitures; 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; 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 13 of Comerica's Annual Report on Form 10-K for the year ended December 31, 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
------------------
March 31, December 31, March 31,
(in
millions,
except
per
share
data) 2013 2012 2012
---------- ---- ---- ----
PER
COMMON
SHARE
AND
COMMON
STOCK
DATA
Diluted
net
income $0.70 $0.68 $0.66
Cash
dividends
declared 0.17 0.15 0.10
Common
shareholders'
equity
(at
period
end) 37.38 36.87 35.44
Tangible
common
equity
(at
period
end) (a) 33.87 33.38 32.06
Average
diluted
shares
(in
thousands) 187,442 187,954 196,021
----------- ------- ------- -------
KEY
RATIOS
Return on
average
common
shareholders'
equity 7.68% 7.36% 7.50%
Return on
average
assets 0.84 0.81 0.85
Tier 1
common
capital
ratio
(a) (b) 10.40 10.17 10.30
Tier 1
risk-
based
capital
ratio
(b) 10.40 10.17 10.30
Total
risk-
based
capital
ratio
(b) 13.45 13.18 14.03
Leverage
ratio
(b) 10.76 10.57 10.99
Tangible
common
equity
ratio
(a) 9.86 9.76 10.25
-------- ---- ---- -----
AVERAGE
BALANCES
Commercial
loans $28,056 $27,462 $24,736
Real
estate
construction
loans:
Commercial
Real
Estate
business
line (c) 1,116 1,033 1,056
Other
business
lines
(d) 198 266 397
--- --- ---
Total
real
estate
construction
loans 1,314 1,299 1,453
Commercial
mortgage
loans:
Commercial
Real
Estate
business
line (c) 1,836 1,939 2,520
Other
business
lines
(d) 7,562 7,580 7,682
----- ----- -----
Total
commercial
mortgage
loans 9,398 9,519 10,202
Lease
financing 857 839 897
International
loans 1,282 1,314 1,205
Residential
mortgage
loans 1,556 1,525 1,519
Consumer
loans 2,154 2,161 2,257
----- ----- -----
Total
loans 44,617 44,119 42,269
Earning
assets 58,607 59,276 56,185
Total
assets 63,451 64,257 61,345
Noninterest-
bearing
deposits 21,506 22,758 19,637
Interest-
bearing
deposits 29,186 28,524 28,674
------ ------ ------
Total
deposits 50,692 51,282 48,311
Common
shareholders'
equity 6,956 7,062 6,939
-------------- ----- ----- -----
NET
INTEREST
INCOME
Net
interest
income
(fully
taxable
equivalent
basis) $416 $425 $443
Fully
taxable
equivalent
adjustment - 1 1
Net
interest
margin
(fully
taxable
equivalent
basis) 2.88% 2.87% 3.19%
----------- ---- ---- ----
CREDIT
QUALITY
Nonaccrual
loans $494 $519 $830
Reduced-
rate
loans 21 22 26
--- --- ---
Total
nonperforming
loans
(e) 515 541 856
Foreclosed
property 40 54 67
--- --- ---
Total
nonperforming
assets
(e) 555 595 923
Loans
past due
90 days
or more
and
still
accruing 25 23 50
Gross
loan
charge-
offs 38 60 62
Loan
recoveries 14 23 17
--- --- ---
Net loan
charge-
offs 24 37 45
Allowance
for loan
losses 617 629 704
Allowance
for
credit
losses on
lending-
related
commitments 36 32 25
--- --- ---
Total
allowance
for
credit
losses 653 661 729
Allowance
for loan
losses as
a
percentage
of total
loans 1.37% 1.37% 1.64%
Net loan
charge-
offs as
a
percentage
of
average
total
loans
(f) 0.21 0.34 0.43
Nonperforming
assets
as a
percentage
of total
loans
and
foreclosed
property
(e) 1.23 1.29 2.14
Allowance
for loan
losses as
a
percentage
of total
nonperforming
loans 120 116 82
-------------- --- --- ---
See
Reconciliation
of Non-GAAP
Financial
(a) Measures.
(b) March 31, 2013 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
March 31, December 31, March 31,
(in millions, except share data) 2013 2012 2012
------------------------------- ---- ---- ----
(unaudited) (unaudited)
ASSETS
Cash and due from banks $877 $1,395 $984
Federal funds sold - 100 10
Interest-bearing deposits with banks 4,720 3,039 2,965
Other short-term investments 115 125 180
Investment securities available-
for-sale 10,286 10,297 10,061
Commercial loans 28,508 29,513 25,640
Real estate construction loans 1,396 1,240 1,442
Commercial mortgage loans 9,317 9,472 10,079
Lease financing 853 859 872
International loans 1,269 1,293 1,256
Residential mortgage loans 1,568 1,527 1,485
Consumer loans 2,156 2,153 2,238
-------------- ----- ----- -----
Total loans 45,067 46,057 43,012
Less allowance for loan losses (617) (629) (704)
------------------------------ ---- ---- ----
Net loans 44,450 45,428 42,308
Premises and equipment 618 622 670
Accrued income and other assets 3,819 4,063 5,147
------------------------------- ----- ----- -----
Total assets $64,885 $65,069 $62,325
------------ ------- ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $22,777 $23,279 $20,741
Money market and interest-bearing
checking deposits 21,540 21,273 20,502
Savings deposits 1,652 1,606 1,586
Customer certificates of deposit 5,753 5,531 6,145
Foreign office time deposits 395 502 332
---------------------------- --- --- ---
Total interest-bearing deposits 29,340 28,912 28,565
------------------------------- ------ ------ ------
Total deposits 52,117 52,191 49,306
Short-term borrowings 58 110 82
Accrued expenses and other
liabilities 1,023 1,106 1,033
Medium- and long-term debt 4,699 4,720 4,919
-------------------------- ----- ----- -----
Total liabilities 57,897 58,127 55,340
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares 1,141 1,141 1,141
Capital surplus 2,157 2,162 2,154
Accumulated other comprehensive loss (410) (413) (326)
Retained earnings 6,020 5,931 5,630
Less cost of common stock in
treasury -41,361,612 shares at
3/31/13, 39,889,610 shares at
12/31/12 and 31,032,920 shares at
3/31/12 (1,920) (1,879) (1,614)
---------------------------------- ------ ------ ------
Total shareholders' equity 6,988 6,942 6,985
-------------------------- ----- ----- -----
Total liabilities and shareholders'
equity $64,885 $65,069 $62,325
----------------------------------- ------- ------- -------
CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
First Fourth Third Second First First Quarter 2013 Compared To:
Quarter Quarter Quarter Quarter Quarter Fourth Quarter 2012 First Quarter 2012
(in millions, except per share data) 2013 2012 2012 2012 2012 Amount Percent Amount Percent
----------------------------------- ---- ---- ---- ---- ---- ------ ------- ------ -------
INTEREST INCOME
Interest and fees on loans $390 $398 $400 $408 $411 $(8) (2)% $(21) (5)%
Interest on investment securities 53 55 57 59 63 (2) (4) (10) (16)
Interest on short-term investments 3 3 3 3 3 - - - -
---------------------------------- --- --- --- --- --- --- --- --- ---
Total interest income 446 456 460 470 477 (10) (2) (31) (7)
INTEREST EXPENSE
Interest on deposits 15 16 17 18 19 (1) (7) (4) (21)
Interest on medium- and long-term debt 15 16 16 17 16 (1) (3) (1) (6)
-------------------------------------- --- --- --- --- --- --- --- --- ---
Total interest expense 30 32 33 35 35 (2) (5) (5) (14)
---------------------- --- --- --- --- --- --- --- --- ---
Net interest income 416 424 427 435 442 (8) (2) (26) (6)
Provision for credit losses 16 16 22 19 22 - - (6) (27)
--------------------------- --- --- --- --- --- --- --- --- ---
Net interest income after provision 400 408 405 416 420 (8) (2) (20) (5)
for credit losses
NONINTEREST INCOME
Service charges on deposit accounts 55 52 53 53 56 3 5 (1) (2)
Fiduciary income 43 42 39 39 38 1 4 5 11
Commercial lending fees 21 25 22 24 25 (4) (17) (4) (14)
Letter of credit fees 16 17 19 18 17 (1) (7) (1) (7)
Card fees 12 12 12 12 11 - - 1 6
Foreign exchange income 9 9 9 10 10 - - (1) (4)
Bank-owned life insurance 9 9 10 10 10 - - (1) (12)
Brokerage fees 5 5 5 4 5 - - - -
Net securities gains - 1 - 6 5 (1) (89) (5) (96)
Other noninterest income 30 32 28 35 29 (2) (1) 1 1
------------------------ --- --- --- --- --- --- --- --- ---
Total noninterest income 200 204 197 211 206 (4) (2) (6) (3)
NONINTEREST EXPENSES
Salaries 188 196 192 189 201 (8) (4) (13) (7)
Employee benefits 63 59 61 61 59 4 7 4 6
----------------- --- --- --- --- --- --- --- --- ---
Total salaries and employee benefits 251 255 253 250 260 (4) (1) (9) (4)
Net occupancy expense 39 42 40 40 41 (3) (7) (2) (6)
Equipment expense 15 15 17 16 17 - - (2) (10)
Outside processing fee expense 28 28 27 26 26 - - 2 7
Software expense 22 23 23 21 23 (1) (2) (1) (3)
Merger and restructuring charges - 2 25 8 - (2) N/M - -
FDIC insurance expense 9 9 9 10 10 - - (1) (10)
Advertising expense 6 6 7 7 7 - - (1) (15)
Other real estate expense 1 3 2 - 4 (2) (58) (3) (70)
Other noninterest expenses 45 44 46 55 60 1 - (15) (26)
-------------------------- --- --- --- --- --- --- --- --- ---
Total noninterest expenses 416 427 449 433 448 (11) (3) (32) (7)
-------------------------- --- --- --- --- --- --- --- --- ---
Income before income taxes 184 185 153 194 178 (1) (1) 6 3
Provision for income taxes 50 55 36 50 48 (5) (9) 2 4
-------------------------- --- --- --- --- --- --- --- --- ---
NET INCOME 134 130 117 144 130 4 3 4 3
Less income allocated to participating
securities 2 2 1 2 1 - - 1 21
-------------------------------------- --- --- --- --- --- --- --- --- ---
Net income attributable to common shares $132 $128 $116 $142 $129 $4 3% $3 2%
---------------------------------------- ---- ---- ---- ---- ---- --- --- --- ---
Earnings per common share:
Basic $0.71 $0.68 $0.61 $0.73 $0.66 $0.03 4% $0.05 8%
Diluted 0.70 0.68 0.61 0.73 0.66 0.02 3 0.04 6
Comprehensive income (loss) 137 (30) 165 169 160 167 N/M (23) (15)
Cash dividends declared on common stock 32 28 29 29 20 4 12 12 61
Cash dividends declared per common share 0.17 0.15 0.15 0.15 0.10 0.02 13 0.07 70
---------------------------------------- ---- ---- ---- ---- ---- ---- --- ---- ---
N/M - Not Meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
2013 2012
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
------------ ------- ------- ------- ------- -------
Balance at beginning of period $629 $647 $667 $704 $726
Loan charge-offs:
Commercial 21 42 19 26 25
Real estate construction:
Commercial Real Estate business
line (a) - 1 2 2 2
Other business lines (b) - - - 1 -
----------------------- --- --- --- --- ---
Total real estate construction - 1 2 3 2
Commercial mortgage:
Commercial Real Estate business
line (a) 1 5 12 16 13
Other business lines (b) 12 6 13 11 13
----------------------- --- --- --- --- ---
Total commercial mortgage 13 11 25 27 26
International - - 1 - 2
Residential mortgage 1 2 6 3 2
Consumer 3 4 6 5 5
-------- --- --- --- --- ---
Total loan charge-offs 38 60 59 64 62
Recoveries on loans previously
charged-off:
Commercial 6 13 7 10 9
Real estate construction 1 1 3 1 1
Commercial mortgage 5 6 5 4 3
International - 1 - - 1
Residential mortgage 1 1 - - 1
Consumer 1 1 1 4 2
-------- --- --- --- --- ---
Total recoveries 14 23 16 19 17
---------------- --- --- --- --- ---
Net loan charge-offs 24 37 43 45 45
Provision for loan losses 12 19 23 8 23
------------------------- --- --- --- --- ---
Balance at end of period $617 $629 $647 $667 $704
------------------------ ---- ---- ---- ---- ----
Allowance for loan losses as a
percentage of total loans 1.37% 1.37% 1.46% 1.52% 1.64%
Net loan charge-offs as a
percentage of average total loans 0.21 0.34 0.39 0.42 0.43
---------------------------------- ---- ---- ---- ---- ----
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
2013 2012
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
------------ ------- ------- ------- ------- -------
Balance at
beginning of
period $32 $35 $36 $25 $26
Add: Provision for
credit losses on
lending-related
commitments 4 (3) (1) 11 (1)
------------------ --- --- --- --- ---
Balance at end of
period $36 $32 $35 $36 $25
----------------- --- --- --- --- ---
Unfunded lending-
related
commitments sold $2 $ - $ - $ - $ -
----------------- --- --- --- --- --- --- --- --- ---
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2013 2012
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
------------ ------- ------- ------- ------- -------
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial $102 $103 $154 $175 $205
Real estate construction:
Commercial Real Estate
business line (a) 30 30 45 60 77
Other business lines (b) 3 3 6 9 8
----------------------- --- --- --- --- ---
Total real estate
construction 33 33 51 69 85
Commercial mortgage:
Commercial Real Estate
business line (a) 86 94 137 155 174
Other business lines (b) 178 181 219 220 275
----------------------- --- --- --- --- ---
Total commercial mortgage 264 275 356 375 449
Lease financing - 3 3 4 4
International - - - - 4
------------- --- --- --- --- ---
Total nonaccrual business
loans 399 414 564 623 747
Retail loans:
Residential mortgage 65 70 69 76 69
Consumer:
Home equity 28 31 28 16 9
Other consumer 2 4 4 4 5
-------------- --- --- --- --- ---
Total consumer 30 35 32 20 14
-------------- --- --- --- --- ---
Total nonaccrual retail
loans 95 105 101 96 83
----------------------- --- --- --- --- ---
Total nonaccrual loans 494 519 665 719 830
Reduced-rate loans 21 22 27 28 26
------------------ --- --- --- --- ---
Total nonperforming loans
(c) 515 541 692 747 856
Foreclosed property 40 54 63 67 67
------------------- --- --- --- --- ---
Total nonperforming assets
(c) $555 $595 $755 $814 $923
-------------------------- ---- ---- ---- ---- ----
Nonperforming loans as a
percentage of total loans 1.14% 1.17% 1.57% 1.70% 1.99%
Nonperforming assets as a
percentage of total loans 1.23 1.29 1.71 1.85 2.14
and foreclosed property
Allowance for loan losses as
a percentage of total 120 116 94 89 82
nonperforming loans
Loans past due 90 days or
more and still accruing $25 $23 $36 $43 $50
------------------------- --- --- --- --- ---
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at
beginning of period $519 $665 $719 $830 $860
Loans transferred to
nonaccrual (d) 34 36 35 47 69
Nonaccrual business loan
gross charge-offs (e) (34) (54) (46) (56) (55)
Loans transferred to accrual
status (d) - - - (41) -
Nonaccrual business loans
sold (f) (7) (48) (20) (16) (7)
Payments/Other (g) (18) (80) (23) (45) (37)
------------------ --- --- --- --- ---
Nonaccrual loans at end of
period $494 $519 $665 $719 $830
-------------------------- ---- ---- ---- ---- ----
(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 $34 $54 $46 $56 $55
Performing watch list loans - - 1 - -
Consumer and residential
mortgage loans 4 6 12 8 7
--- --- --- --- ---
Total gross loan charge-offs $38 $60 $59 $64 $62
--- --- --- --- ---
(f) Analysis of loans sold:
Nonaccrual business loans $7 $48 $20 $16 $7
Performing watch list loans 12 24 42 7 11
--- --- --- --- ---
Total loans sold $19 $72 $62 $23 $18
--- --- --- --- ---
(g) Includes net changes related to nonaccrual loans with balances less than $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed
property. Excludes business loan gross charge-offs and business nonaccrual loans sold.
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
------------------
March 31, 2013 December 31, 2012 March 31, 2012
-------------- ----------------- --------------
Average Average Average Average Average
(dollar amounts in millions) Balance Interest Rate Balance Interest Balance Interest Rate
--------------------------- ------- -------- ---- ------- -------- ------- -------- ----
Commercial loans $28,056 $229 3.31% $27,462 $230 3.33% $24,736 $219 3.56%
Real estate construction loans 1,314 13 4.15 1,299 15 4.32 1,453 17 4.58
Commercial mortgage loans 9,398 95 4.08 9,519 100 4.22 10,202 119 4.73
Lease financing 857 7 3.23 839 7 3.27 897 8 3.41
International loans 1,282 11 3.62 1,314 12 3.73 1,205 11 3.76
Residential mortgage loans 1,556 17 4.39 1,525 16 4.24 1,519 18 4.77
Consumer loans 2,154 18 3.36 2,161 19 3.38 2,257 20 3.49
-------------- ----- --- ---- ----- --- ---- ----- --- ----
Total loans (a) 44,617 390 3.54 44,119 399 3.60 42,269 412 3.92
Auction-rate securities available-for-sale 176 - 0.31 216 - 0.81 352 - 0.63
Other investment securities available-for-sale 9,845 53 2.21 10,034 55 2.25 9,537 63 2.73
---------------------------------------------- ----- --- ---- ------ --- ---- ----- --- ----
Total investment securities available-for-sale 10,021 53 2.17 10,250 55 2.22 9,889 63 2.65
Interest-bearing deposits with banks (b) 3,852 2 0.27 4,785 2 0.25 3,892 2 0.26
Other short-term investments 117 1 2.30 122 1 1.13 135 1 1.97
---------------------------- --- --- ---- --- --- ---- --- --- ----
Total earning assets 58,607 446 3.09 59,276 457 3.08 56,185 478 3.44
Cash and due from banks 979 1,030 999
Allowance for loan losses (633) (654) (737)
Accrued income and other assets 4,498 4,605 4,898
----- ----- -----
Total assets $63,451 $64,257 $61,345
------- ------- -------
Money market and interest-bearing checking deposits $21,294 7 0.14 $20,760 9 0.16 $20,795 10 0.19
Savings deposits 1,623 - 0.03 1,603 - 0.03 1,543 - 0.08
Customer certificates of deposit 5,744 7 0.47 5,634 6 0.49 5,978 8 0.57
Foreign office time deposits 525 1 0.55 527 1 0.60 358 1 0.57
---------------------------- --- --- ---- --- --- ---- --- --- ----
Total interest-bearing deposits 29,186 15 0.21 28,524 16 0.22 28,674 19 0.26
Short-term borrowings 123 - 0.11 70 - 0.12 78 - 0.11
Medium- and long-term debt 4,707 15 1.32 4,735 16 1.35 4,940 16 1.34
-------------------------- ----- --- ---- ----- --- ---- ----- --- ----
Total interest-bearing sources 34,016 30 0.36 33,329 32 0.38 33,692 35 0.42
Noninterest-bearing deposits 21,506 22,758 19,637
Accrued expenses and other liabilities 973 1,108 1,077
Total shareholders' equity 6,956 7,062 6,939
----- ----- -----
Total liabilities and shareholders' equity $63,451 $64,257 $61,345
------- ------- -------
Net interest income/rate spread (FTE) $416 2.73 $425 2.70 $443 3.02
---- ---- ----
FTE adjustment $ - $1 $1
--- --- --- ---
Impact of net noninterest-bearing sources of funds 0.15 0.17 0.17
-------------------------------------------------- ---- ---- ----
Net interest margin (as a percentage of average earning assets) (FTE)
(a) (b) 2.88% 2.87% 3.19%
--------------------------------------------------------------------- ---- ---- ----
(a) Accretion of the purchase
discount on the acquired loan
portfolio of $11 million, $13
million and $25 million in
the first quarter of 2013 and
the fourth and first quarters
of 2012, respectively,
increased the net interest
margin by 8 basis points, 9
basis points and 18 basis
points in the first quarter
of 2013 and the fourth and
first quarters of 2012,
respectively.
(b) Excess liquidity, represented
by average balances deposited
with the Federal Reserve
Bank, reduced the net
interest margin by 17 basis
points in the first quarter
of 2013 and by 22 basis
points and 21 basis points in
the fourth and first quarters
of 2012, respectively.
CONSOLIDATED STATISTICAL DATA (unaudited)
Comerica Incorporated and Subsidiaries
March 31, December 31, September 30, June 30, March 31,
(in millions, except per share data) 2013 2012 2012 2012 2012
----------------------------------- ---- ---- ---- ---- ----
Commercial loans:
Floor plan $2,963 $2,939 $2,276 $2,406 $2,152
Other 25,545 26,574 25,184 24,610 23,488
----- ------ ------ ------ ------ ------
Total commercial loans 28,508 29,513 27,460 27,016 25,640
Real estate construction loans:
Commercial Real Estate business line (a) 1,185 1,049 1,003 991 1,055
Other business lines (b) 211 191 389 386 387
----------------------- --- --- --- --- ---
Total real estate construction loans 1,396 1,240 1,392 1,377 1,442
Commercial mortgage loans:
Commercial Real Estate business line (a) 1,812 1,873 2,020 2,315 2,501
Other business lines (b) 7,505 7,599 7,539 7,515 7,578
----------------------- ----- ----- ----- ----- -----
Total commercial mortgage loans 9,317 9,472 9,559 9,830 10,079
Lease financing 853 859 837 858 872
International loans 1,269 1,293 1,277 1,224 1,256
Residential mortgage loans 1,568 1,527 1,495 1,469 1,485
Consumer loans:
Home equity 1,498 1,537 1,570 1,584 1,612
Other consumer 658 616 604 634 626
-------------- --- --- --- --- ---
Total consumer loans 2,156 2,153 2,174 2,218 2,238
-------------------- ----- ----- ----- ----- -----
Total loans $45,067 $46,057 $44,194 $43,992 $43,012
----------- ------- ------- ------- ------- -------
Goodwill $635 $635 $635 $635 $635
Core deposit intangible 19 20 23 25 27
Loan servicing rights 2 2 2 3 3
Tier 1 common capital ratio (c) (d) 10.40% 10.17% 10.38% 10.43% 10.30%
Tier 1 risk-based capital ratio (c) 10.40 10.17 10.38 10.43 10.30
Total risk-based capital ratio (c) 13.45 13.18 13.70 13.96 14.03
Leverage ratio (c) 10.76 10.57 10.78 10.97 10.99
Tangible common equity ratio (d) 9.86 9.76 10.30 10.31 10.25
Common shareholders' equity per share of
common stock $37.38 $36.87 $37.01 $36.18 $35.44
Tangible common equity per share of common
stock (d) 33.87 33.38 33.56 32.76 32.06
Market value per share for the quarter:
High 36.99 32.14 33.38 32.88 34.00
Low 30.73 27.72 29.32 27.88 26.25
Close 35.95 30.34 31.05 30.71 32.36
Quarterly ratios:
Return on average common shareholders'
equity 7.68% 7.36% 6.67% 8.22% 7.50%
Return on average assets 0.84 0.81 0.75 0.93 0.85
Efficiency ratio (e) 67.58 68.08 71.68 67.53 69.70
Number of banking centers 487 487 490 493 495
Number of employees - full time equivalent 8,932 8,967 9,008 9,014 9,195
------------------------------------------ ----- ----- ----- ----- -----
Primarily
loans to
real estate
investors
and
(a) developers.
(b) Primarily loans secured by owner-
occupied real estate.
(c) March 31, 2013 ratios are
estimated.
(d) See Reconciliation of Non-GAAP
Financial Measures.
Noninterest expenses as a
percentage of the sum of net
interest income (FTE) and
noninterest income excluding net
(e) securities gains.
PARENT COMPANY ONLY BALANCE SHEETS (unaudited)
Comerica
Incorporated
March 31, December 31, March 31,
(in millions,
except share
data) 2013 2012 2012
------------- ---- ---- ----
ASSETS
Cash and due
from
subsidiary
bank $23 $2 6
Short-term
investments
with
subsidiary
bank 450 431 388
Other short-
term
investments 91 88 94
Investment in
subsidiaries,
principally
banks 7,054 7,045 7,120
Premises and
equipment 4 4 5
Other assets 156 150 183
------------ --- --- ---
Total assets $7,778 $7,720 $7,796
------------ ------ ------ ------
LIABILITIES
AND
SHAREHOLDERS'
EQUITY
Medium- and
long-term
debt $626 $629 $660
Other
liabilities 164 149 151
------------ --- --- ---
Total
liabilities 790 778 811
Common stock
-$5 par
value:
Authorized -
325,000,000
shares
Issued -
228,164,824
shares 1,141 1,141 1,141
Capital
surplus 2,157 2,162 2,154
Accumulated
other
comprehensive
loss (410) (413) (326)
Retained
earnings 6,020 5,931 5,630
Less cost of
common stock 3/31/12
in treasury
-41,361,612
shares at
3/31/13,
39,889,610
shares at
12/31/12 and
31,032,920
shares at (1,920) (1,879) (1,614)
------------ ------ ------ ------
Total
shareholders'
equity 6,988 6,942 6,985
-------------- ----- ----- -----
Total
liabilities
and
shareholders'
equity $7,778 $7,720 $7,796
-------------- ------ ------ ------
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, 2011 197.3 $1,141 $2,170 $(356) $5,546 $(1,633) $6,868
Net income - - - - 130 - 130
Other comprehensive income, net of tax - - - 30 - - 30
Cash dividends declared on common stock
($0.10 per share) - - - - (20) - (20)
Purchase of common stock (1.2) - - - - (36) (36)
Net issuance of common stock under employee
stock plans 1.1 - (32) - (26) 58 -
Share-based compensation - - 13 - - - 13
Other (0.1) - 3 - - (3) -
----- ---- --- --- --- --- --- ---
BALANCE AT MARCH 31, 2012 197.1 $1,141 $2,154 $(326) $5,630 $(1,614) $6,985
------------------------- ----- ------ ------ ----- ------ ------- ------
BALANCE AT DECEMBER 31, 2012 188.3 $1,141 $2,162 $(413) $5,931 $(1,879) $6,942
Net income - - - - 134 - 134
Other comprehensive income, net of tax - - - 3 - - 3
Cash dividends declared on common stock
($0.17 per share) - - - - (32) - (32)
Purchase of common stock (2.2) - - - - (74) (74)
Net issuance of common stock under employee
stock plans 0.7 - (15) - (13) 33 5
Share-based compensation - - 10 - - - 10
BALANCE AT MARCH 31, 2013 186.8 $1,141 $2,157 $(410) $6,020 $(1,920) $6,988
------------------------- ----- ------ ------ ----- ------ ------- ------
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in millions) Business Retail Wealth
Three Months Ended March 31, 2013 Bank Bank Management Finance Other Total
--------------------------------- ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest income (expense) (FTE) $375 $155 $46 $(167) $7 $416
Provision for credit losses 20 6 (6) - (4) 16
Noninterest income 77 41 65 14 3 200
Noninterest expenses 146 175 79 3 13 416
Provision (benefit) for income taxes (FTE) 88 5 13 (58) 2 50
--- --- --- --- ---
Net income (loss) $198 $10 $25 $(98) $(1) $134
---- --- --- ---- --- ----
Net credit-related charge-offs $16 $8 $ - - - $24
Selected average balances:
Assets $35,780 $5,973 $4,738 $11,747 $5,213 $63,451
Loans 34,753 5,276 4,588 - - 44,617
Deposits 25,514 21,049 3,682 275 172 50,692
Statistical data:
Return on average assets (a) 2.21% 0.18% 2.12% N/M N/M 0.84%
Efficiency ratio (b) 32.30 89.37 71.09 N/M N/M 67.58
------------------- ----- ----- ----- --- --- -----
Business Retail Wealth
Three Months Ended December 31, 2012 Bank Bank Management Finance Other Total
------------------------------------ ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest income (expense) (FTE) $387 $156 $47 $(176) $11 $425
Provision for credit losses 6 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) 102 3 10 (64) 5 56
--- --- --- --- ---
Net income (loss) $209 $8 $16 $(100) $(3) $130
---- --- --- ----- --- ----
Net credit-related charge-offs $26 $6 $5 - - $37
Selected average balances:
Assets $35,359 $5,952 $4,686 $12,137 $6,123 $64,257
Loans 34,325 5,255 4,539 - - 44,119
Deposits 26,051 20,910 3,798 310 213 51,282
Statistical data:
Return on average assets (a) 2.37% 0.15% 1.35% N/M N/M 0.81%
Efficiency ratio (b) 31.93 90.36 76.88 N/M N/M 68.08
------------------- ----- ----- ----- --- --- -----
Business Retail Wealth
Three Months Ended March 31, 2012 Bank Bank Management Finance Other Total
--------------------------------- ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest income (expense) (FTE) $373 $167 $47 $(152) 8 $443
Provision for credit losses 2 6 12 - 2 22
Noninterest income 81 42 65 13 5 206
Noninterest expenses 158 183 80 3 24 448
Provision (benefit) for income taxes (FTE) 91 7 7 (54) (2) 49
--- --- --- --- --- ---
Net income (loss) $203 $13 $13 $(88) $(11) $130
---- --- --- ---- ---- ----
Net credit-related charge-offs $28 $12 $5 - - $45
Selected average balances:
Assets $33,178 $6,173 $4,636 $11,827 $5,531 $61,345
Loans 32,238 5,462 4,569 - - 42,269
Deposits 23,997 20,373 3,611 161 169 48,311
Statistical data:
Return on average assets (a) 2.45% 0.25% 1.07% N/M N/M 0.85%
Efficiency ratio (b) 34.86 87.54 75.00 N/M N/M 69.70
------------------- ----- ----- ----- --- --- -----
(a) Return on average assets
is calculated based on the
greater of average assets
or average liabilities and
attributed equity.
(b) Noninterest expenses as
a percentage of the sum of
net interest income (FTE)
and noninterest income
excluding net securities
gains.
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 March 31, 2013 Michigan California Texas Markets & Other Total
--------------------------------- -------- ---------- ----- ------- ------- -----
Earnings summary:
Net interest income (expense) (FTE) $189 $171 $135 $81 $(160) $416
Provision for credit losses (8) 21 8 (1) (4) 16
Noninterest income 92 35 31 25 17 200
Noninterest expenses 168 97 91 44 16 416
Provision (benefit) for income taxes (FTE) 44 32 23 7 (56) 50
--- --- --- --- --- ---
Net income (loss) $77 $56 $44 $56 $(99) $134
--- --- --- --- ---- ----
Net credit-related charge-offs $5 $10 $6 $3 $ - $24
Selected average balances:
Assets $14,042 $13,795 $10,795 $7,859 $16,960 $63,451
Loans 13,650 13,542 10,071 7,354 - 44,617
Deposits 20,255 14,356 9,959 5,675 447 50,692
Statistical data:
Return on average assets (a) 1.47% 1.45% 1.54% 2.86% N/M 0.84%
Efficiency ratio (b) 59.53 47.04 54.99 42.11 N/M 67.58
------------------- ----- ----- ----- ----- --- -----
Other Finance
Three Months Ended December 31, 2012 Michigan California Texas Markets & Other Total
------------------------------------ -------- ---------- ----- ------- ------- -----
Earnings summary:
Net interest income (expense) (FTE) $192 $178 $136 $84 $(165) $425
Provision for credit losses (8) 7 4 12 1 16
Noninterest income 97 35 31 24 17 204
Noninterest expenses 180 100 90 44 13 427
Provision (benefit) for income taxes (FTE) 43 44 26 2 (59) 56
--- --- --- --- --- ---
Net income (loss) $74 $62 $47 $50 $(103) $130
--- --- --- --- ----- ----
Net credit-related charge-offs $1 $12 $5 $19 $ - $37
Selected average balances:
Assets $13,782 $13,549 $10,554 $8,112 $18,260 $64,257
Loans 13,415 13,275 9,818 7,611 - 44,119
Deposits 20,019 15,457 9,809 5,474 523 51,282
Statistical data:
Return on average assets (a) 1.42% 1.50% 1.71% 2.48% N/M 0.81%
Efficiency ratio (b) 62.16 47.04 53.87 41.35 N/M 68.08
------------------- ----- ----- ----- ----- --- -----
Other Finance
Three Months Ended March 31, 2012 Michigan California Texas Markets & Other Total
--------------------------------- -------- ---------- ----- ------- ------- -----
Earnings summary:
Net interest income (expense) (FTE) $196 $165 $150 $76 $(144) $443
Provision for credit losses (3) (3) 25 1 2 22
Noninterest income 98 33 31 26 18 206
Noninterest expenses 179 99 93 50 27 448
Provision (benefit) for income taxes (FTE) 40 38 22 5 (56) 49
--- --- --- --- --- ---
Net income (loss) $78 $64 $41 $46 $(99) $130
--- --- --- --- ---- ----
Net credit-related charge-offs $18 $11 $7 $9 $ - $45
Selected average balances:
Assets $14,092 $12,310 $10,080 $7,505 $17,358 $61,345
Loans 13,829 12,096 9,295 7,049 - 42,269
Deposits 19,415 13,688 10,229 4,649 330 48,311
Statistical data:
Return on average assets (a) 1.53% 1.74% 1.43% 2.43% N/M 0.85%
Efficiency ratio (b) 60.88 50.50 51.10 51.93 N/M 69.70
------------------- ----- ----- ----- ----- --- -----
(a) Return on average assets
is calculated based on the
greater of average assets
or average liabilities and
attributed equity.
(b) Noninterest expenses as
a percentage of the sum of
net interest income (FTE)
and noninterest income
excluding net securities
gains.
FTE -Fully Taxable
Equivalent
N/M - Not Meaningful
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
Comerica Incorporated and Subsidiaries
March 31, December 31, September 30, June 30, March 31,
(dollar amounts in millions) 2013 2012 2012 2012 2012
--------------------------- ---- ---- ---- ---- ----
Tier 1 Common Capital Ratio:
Tier 1 capital (a) (b) $6,748 $6,705 $6,685 $6,676 $6,647
Less:
Trust preferred securities - - - - -
--- --- --- --- ---
Tier 1 common capital (b) $6,748 $6,705 $6,685 $6,676 $6,647
------------------------ ------ ------ ------ ------ ------
Risk-weighted assets (a) (b) $64,895 $65,954 $64,432 $64,028 $64,526
--------------------------- ------- ------- ------- ------- -------
Tier 1 risk-based capital
ratio (b) 10.40% 10.17% 10.38% 10.43% 10.30%
Tier 1 common capital ratio
(b) 10.40 10.17 10.38 10.43 10.30
--------------------------- ----- ----- ----- ----- -----
Basel III Tier 1 Common Capital Ratio:
Tier 1 capital (b) $6,748
Basel III proposed
adjustments (c) (410)
------------------ ----
Basel III Tier 1 common
capital (c) $6,338
----------------------- ------
Risk-weighted assets (a) (b) $64,895
Basel III proposed
adjustments (c) 2,609
-----
Basel III risk-weighted
assets (c) $67,504
----------------------- -------
Tier 1 common capital ratio
(b) 10.4%
Basel III Tier 1 common
capital ratio (c) 9.4
----------------------- ---
Tangible Common Equity Ratio:
Common shareholders' equity $6,988 $6,942 $7,084 $7,028 $6,985
Less:
Goodwill 635 635 635 635 635
Other intangible assets 21 22 25 28 30
--- --- --- --- ---
Tangible common equity $6,332 $6,285 $6,424 $6,365 $6,320
---------------------- ------ ------ ------ ------ ------
Total assets $64,885 $65,069 $63,000 $62,380 $62,325
Less:
Goodwill 635 635 635 635 635
Other intangible assets 21 22 25 28 30
--- --- --- --- ---
Tangible assets $64,229 $64,412 $62,340 $61,717 $61,660
--------------- ------- ------- ------- ------- -------
Common equity ratio 10.77% 10.67% 11.24% 11.27% 11.21%
Tangible common equity ratio 9.86 9.76 10.30 10.31 10.25
---------------------------- ---- ---- ----- ----- -----
Tangible Common Equity per Share of Common
Stock:
Common shareholders' equity $6,988 $6,942 $7,084 $7,028 $6,985
Tangible common equity 6,332 6,285 6,424 6,365 6,320
---------------------- ----- ----- ----- ----- -----
Shares of common stock
outstanding (in millions) 187 188 191 194 197
-------------------------- --- --- --- --- ---
Common shareholders' equity
per share of common stock $37.38 $36.87 $37.01 $36.18 $35.44
Tangible common equity per
share of common stock 33.87 33.38 33.56 32.76 32.06
-------------------------- ----- ----- ----- ----- -----
(a) Tier 1 capital and
risk-weighted assets as
defined by regulation.
(b) March 31, 2013 Tier 1
capital and risk-weighted
assets are estimated.
(c) March 31, 2013 Basel
III Tier 1 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
