DALLAS, Oct. 16, 2013 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported third quarter 2013 net income of $147 million, compared to $143 million for the second quarter 2013 and $117 million for the third quarter 2012. Earnings per diluted share were 78 cents for the third quarter 2013, compared to 76 cents for the second quarter 2013 and 61 cents for the third quarter 2012.
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(dollar amounts in 3rd 2nd 3rd
millions, except per Qtr Qtr Qtr
share data) '13 '13 '12
--------------------- ---- ---- ----
Net interest income (a) $412 $414 $427
Provision for credit
losses 8 13 22
Noninterest income 214 208 197
Noninterest expenses 417 416 449 (b)
Provision for income
taxes 54 50 36
Net income 147 143 117
Net income attributable
to common shares 145 141 116
Diluted income per
common share 0.78 0.76 0.61
Average diluted shares
(in millions) 187 187 191
Tier 1 common capital
ratio (d) 10.74% (c) 10.43% 10.37%
Basel III Tier 1 common
capital ratio (d) (e) 10.4 10.1 10.0
Tangible common equity
ratio (d) 9.87 10.04 10.30
---------------------- ---- ----- -----
(a) Included accretion of the
purchase discount on the
acquired loan portfolio of $8
million, $7 million and $15
million in the third quarter
2013, second quarter 2013 and
third quarter 2012,
respectively.
(b) Included restructuring expenses
of $25 million associated with
the 2011 acquisition of
Sterling Bancshares, Inc.
(c) September 30, 2013 ratio is
estimated.
(d) See Reconciliation of Non-GAAP
Financial Measures.
(e) Estimated ratios based on the
standardized approach in the
final rule and excluding most
elements of accumulated other
comprehensive income (AOCI).
"Fee income growth, expense control and continued solid credit quality contributed to our 28 percent year-over-year increase in earnings per share," said Ralph W. Babb Jr., chairman and chief executive officer. "Average total loans were up $497 million, or 1 percent, on a year-over-year basis, but decreased $799 million, or 2 percent, compared to the second quarter. Loan volume in the third quarter compared to the second quarter was impacted by the continued economic uncertainty and the understandable caution of our customers, as well as seasonality in auto-dealer floor plan loans and a decline in refinance volumes impacting our mortgage warehouse business.
"Average total deposits increased $2 billion, or 4 percent, year-over-year, and $417 million, or 1 percent over second quarter, to $51.9 billion. Net interest income remained relatively stable, credit quality continued to be strong, and noninterest income grew quarter over quarter, reflecting an increase in customer-driven fee income. Our capital position continued to be a source of strength to support our growth.
"We believe our footprint is well situated in Texas, California and Michigan, and that our relationship banking strategy contributes to our continued success."
Third Quarter 2013 Compared to Third Quarter 2012
-- Average total loans increased $497 million, or 1 percent, primarily
reflecting an increase of $1.1 billion, or 4 percent, in commercial
loans, partially offset by a decrease of $594 million, or 5 percent, in
combined commercial mortgage and real estate construction loans. The
increase in commercial loans was primarily driven by increases in
National Dealer Services, general Middle Market and Energy, partially
offset by a decrease in Corporate Banking.
-- Average total deposits increased $2.0 billion, or 4 percent, primarily
reflecting increases of $1.1 billion, or 4 percent, in interest-bearing
deposits and $910 million, or 4 percent, in noninterest-bearing
deposits.
-- Net income increased by $30 million, or 25 percent, primarily as a
result of improving credit quality reflected in lower provision for
credit losses, higher customer-driven fees and lower noninterest
expenses, partially offset by a decrease in net interest income. The
decrease in net interest income was primarily due to a decrease in loan
yields and a decrease in accretion on the acquired loan portfolio,
partially offset by loan growth and a decrease in funding costs.
Third Quarter 2013 Compared to Second Quarter 2013
-- Average total loans decreased $799 million, or 2 percent, to $44.1
billion, primarily reflecting decreases of $634 million, or 2 percent,
in commercial loans and $180 million, or 2 percent, in combined
commercial mortgage and real estate construction loans. The decrease in
commercial loans was primarily driven by decreases in general Middle
Market, National Dealer Services and Mortgage Banker Finance, partially
offset by an increase in Technology and Life Sciences. The declines
generally reflected subdued demand due to economic uncertainty, a
seasonal decline in auto dealer floor plan loans and a decrease in
mortgage refinancing activity. Period-end total loans decreased $1.3
billion to $44.2 billion, primarily reflecting a $1.3 billion decrease
in commercial loans. The decrease in commercial loans was primarily
driven by decreases in Mortgage Banker Finance and National Dealer
Services.
-- Investment securities available-for-sale decreased $413 million, or 4
percent, to $9.4 billion on an average basis and decreased $143 million,
or 1 percent, to $9.5 billion on period-end basis as a result of a full
quarter impact of the decline in the fair value of the portfolio due to
the rise in long-term rates and a slowdown in the pace of purchases to
replace repayments.
-- Average total deposits increased $417 million, or 1 percent, to $51.9
billion, reflecting increases in most lines of business. Period-end
deposits increased $1.7 billion, primarily reflecting an increase of
$2.0 billion in noninterest-bearing deposits.
-- Net interest income remained relatively stable at $412 million in the
third quarter 2013, compared to $414 million in the second quarter 2013,
as the benefit from one additional day in the third quarter and improved
yields in the securities portfolio was more than offset by the impact of
a decline in loan balances and lower loan yields.
-- The provision for credit losses decreased $5 million to $8 million in
the third quarter 2013, compared to $13 million in the second quarter
2013, reflecting continued strong credit quality and decreases in loan
balances.
-- Noninterest income increased $6 million to $214 million in the third
quarter 2013 primarily reflecting an increase in customer-driven income
of $4 million.
-- Noninterest expenses increased $1 million to $417 million in the third
quarter 2013, primarily reflecting a $10 million increase in salaries
and employee benefits expense, partially offset by a $6 million decrease
in litigation-related expenses and a $4 million decrease in write-downs
on other foreclosed assets.
-- Comerica repurchased 1.7 million shares of common stock ($72 million) in
the third quarter 2013 under the share repurchase program. Combined with
dividends, 70 percent of net income was returned to shareholders in the
third quarter 2013.
-- Capital remained solid at September 30, 2013, as evidenced by an
estimated Tier 1 common capital ratio of 10.74 percent and a tangible
common equity ratio of 9.87 percent.
Net Interest Income
-------------------
(dollar amounts 3rd Qtr 2nd Qtr 3rd Qtr
in millions) '13 '13 '12
--------------- -------- -------- --------
Net interest
income $412 $414 $427
Net interest
margin 2.79% 2.83% 2.96%
Selected average
balances:
Total earning
assets $58,892 $58,928 $57,801
Total loans 44,094 44,893 43,597
Total investment
securities 9,380 9,793 9,791
Federal Reserve
Bank deposits
(excess
liquidity) 5,156 3,968 4,160
Total deposits 51,865 51,448 49,845
Total
noninterest-
bearing deposits 22,379 22,076 21,469
----------------- ------ ------ ------
-- Net interest income of $412 million in the third quarter 2013 decreased
$2 million compared to the second quarter 2013.
-- Interest on loans decreased by $7 million, primarily reflecting a
decrease in loan volumes, including volume shifts in business mix
($6 million); lower loan yields due to a decline in LIBOR ($1
million); and other loan portfolio dynamics, reflecting positive
credit migration and other shifts in portfolio mix ($5 million);
partially offset by one additional day in the third quarter ($4
million) and an increase in the accretion of the purchase discount
on the acquired loan portfolio ($1 million).
-- Interest on mortgage-backed investment securities increased net
interest income by $2 million, primarily as a result of improvement
in yields due to slowing prepayment speeds ($4 million), partially
offset by a decrease in average balances ($2 million).
-- Interest on other short-term investments increased net interest
income by $1 million as a result of an increase in balances
deposited with the Federal Reserve Bank.
-- A decrease in funding costs increased net interest income by $2
million, primarily reflecting lower deposit pricing and a shift in
the deposit mix, as well as a lower interest expense as a result of
a full-quarter impact from the maturity of debt in the second
quarter 2013.
-- The net interest margin of 2.79 percent decreased 4 basis points
compared to the second quarter 2013. The decrease in net interest margin
was primarily due to an increase in excess liquidity (-5 basis points)
and lower loan yields (-3 basis points), partially offset by the impact
of yield improvements on mortgage-backed securities (+3 basis points)
and lower funding costs (+1 basis point).
-- Average earning assets remained stable at $58.9 billion in the third
quarter 2013, compared to the second quarter 2013, as an increase of
$1.2 billion in excess liquidity offset decreases of $799 million in
average loans and $413 million in average investment securities
available-for-sale.
Noninterest Income
Noninterest income increased $6 million to $214 million for the third quarter 2013, compared to $208 million for the second quarter 2013. Customer-driven fee income increased $4 million and noncustomer-driven income increased $2 million. The increase in customer-driven fee income was primarily due to an increase in commercial lending fees of $6 million. The increase in noncustomer-driven income was primarily due to a $5 million increase in warrant income, partially offset by a decrease in income recognized from our third-party credit card provider reflecting a change in the timing of the recognition of incentives from annually to quarterly in the third quarter.
Noninterest Expenses
Noninterest expenses of $417 million in the third quarter 2013 remained relatively stable compared to the second quarter 2013, as a $10 million increase in salaries and employee benefits expense was largely offset by a $6 million decrease in litigation-related expenses as well as a $4 million decrease in write-downs on other foreclosed assets. The increase in salaries and employee benefits reflected one additional day in the third quarter 2013 and year-to-date adjustments to incentive compensation based on favorable performance relative to peers.
Credit Quality
"Credit quality continued to be strong resulting in an $8 million provision," said Babb. "Net charge-offs increased slightly from their low level, while nonperforming assets and watch list loans declined."
(dollar amounts in millions) 3rd 2nd 3rd
Qtr Qtr Qtr
'13 '13 '12
--------------------------- ---- ---- ----
Net credit-related charge-offs $19 $17 $43
Net credit-related charge-offs/
Average total loans 0.18% 0.15% 0.39%
Provision for credit losses $8 $13 $22
Nonperforming loans (a) 459 471 692
Nonperforming assets (NPAs) (a) 478 500 755
NPAs/Total loans and foreclosed
property 1.08% 1.10% 1.71%
Loans past due 90 days or more and
still accruing $25 $20 $36
Allowance for loan losses 604 613 647
Allowance for credit losses on
lending-related commitments (b) 34 36 35
--- --- ---
Total allowance for credit losses 638 649 682
Allowance for loan losses/Period-
end total loans 1.37% 1.35% 1.46%
Allowance for loan losses/
Nonperforming loans 131 130 94
-------------------------- --- --- ---
(a) Excludes loans acquired
with credit impairment.
(b) Included in "Accrued
expenses and other
liabilities" on the
consolidated balance
sheets.
--- ---------------------
-- Nonaccrual loans decreased $12 million, to $437 million at September 30,
2013, compared to $449 million at June 30, 2013.
-- Internal watch list loans decreased $210 million, to $2.7 billion at
September 30, 2013, compared to $2.9 billion at June 30, 2013.
-- During the third quarter 2013, $50 million of borrower relationships
over $2 million were transferred to nonaccrual status, an increase of
$13 million from the second quarter 2013.
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $64.7 billion and $7.0 billion, respectively, at September 30, 2013, compared to $62.9 billion and $6.9 billion, respectively, at June 30, 2013. The $1.8 billion increase in total assets primarily reflected an increase of $2.9 billion in excess liquidity, partially offset by a decrease in loans of $1.3 billion.
There were approximately 184 million common shares outstanding at September 30, 2013. Diluted weighted average shares of 187 million at September 30, 2013 were unchanged compared to June 30, 2013, as the impact of the repurchase of $72 million of common stock (1.7 million shares) under the share repurchase program during the third quarter 2013 was offset by the impact of an increase in share dilution from options and warrants due to an increase in Comerica's stock price. Combined with the dividend of $0.17 per share, share repurchases under the share repurchase program and dividends returned 70 percent of third quarter 2013 net income to shareholders.
Comerica's tangible common equity ratio was 9.87 percent at September 30, 2013, a decrease of 17 basis points from June 30, 2013. The estimated Tier 1 common capital ratio increased 31 basis points, to 10.74 percent at September 30, 2013, from June 30, 2013. The estimated Tier 1 common ratio under fully phased-in Basel III capital rules and excluding most elements of AOCI was 10.4 percent percent at September 30, 2013.
Full-Year and Fourth Quarter 2013 Outlook
Management expectations for full-year 2013 compared to full-year 2012 have not changed from the previously provided outlook, with the exception of customer-driven fees, which are expected to be modestly higher based on strong third quarter results.
For fourth quarter 2013, management expects the following, assuming a continuation of the current slow growing economic environment:
-- Average loans for the fourth quarter 2013 are expected to be stable
compared to third quarter 2013, reflecting auto-dealer floor plan loans
rebounding from seasonal low along with continued decline in mortgage
warehouse lending and economic uncertainty impacting demand.
-- Net interest income is expected to be lower for the fourth quarter 2013,
compared to third quarter 2013, due to the continued impact from the low
rate environment and a decrease in purchase accounting accretion.
-- The provision for credit losses for the fourth quarter 2013 is expected
to remain low, similar to the levels in previous 2013 quarters.
-- Customer-driven noninterest income for the fourth quarter 2013 is
expected to be relatively stable compared to third quarter 2013, while
noncustomer-driven noninterest income is expected to be lower.
-- Fourth quarter 2013 noninterest expense is expected to be slightly lower
compared to third quarter 2013, reflecting continued tight expense
control.
Business Segments
Comerica's operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank and Wealth Management. The Finance Division is also reported as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at September 30, 2013 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2013 results compared to second quarter 2013.
The following table presents net income (loss) by business segment.
(dollar amounts in 3rd Qtr 2nd Qtr 3rd Qtr
millions) '13 '13 '12
------------------ -------- -------- --------
Business Bank $209 91% $207 85% $207 88%
Retail Bank 6 3 11 5 10 4
Wealth Management 15 6 24 10 18 8
----------------- --- --- --- --- --- ---
230 100% 242 100% 235 100%
Finance (87) (98) (100)
Other (a) 4 (1) (18)
-------- --- --- ---
Total $147 $143 $117
----- --- --- ---
Includes
items
not
directly
associated
with the
three
major
business
segments
or the
Finance
(a) Division.
Business Bank
(dollar amounts in 3rd 2nd 3rd
millions) Qtr Qtr Qtr
'13 '13 '12
------------------ ---- ---- ----
Net interest income
(FTE) $368 $372 $380
Provision for credit
losses (1) 10 15
Noninterest income 89 80 76
Noninterest expenses 153 147 145
Net income 209 207 207
Net credit-related
charge-offs 9 11 27
Selected average
balances:
Assets 35,298 36,017 34,861
Loans 34,178 34,955 33,856
Deposits 26,284 25,987 25,142
-------- ------ ------ ------
-- Average loans decreased $777 million, primarily reflecting decreases in
general Middle Market, National Dealer Services and Mortgage Banker
Finance, partially offset by an increase in Technology and Life
Sciences.
-- Average deposits increased $297 million, primarily reflecting increases
in general Middle Market and Commercial Real Estate.
-- Net interest income decreased $4 million, primarily due to a decrease in
average loans and lower loan yields, partially offset by the benefit
provided by one additional day in the quarter and higher purchase
accounting accretion.
-- The provision for credit losses decreased $11 million, primarily
reflecting improved credit quality and decreases in loan balances.
-- Noninterest income increased $9 million, primarily due to an increase in
commercial lending fees and income from principal investments and
warrants.
-- Noninterest expenses increased $6 million, primarily due to an increase
in salaries expense and corporate overhead expenses, partially offset by
a decrease in write-downs on other foreclosed assets.
Retail Bank
(dollar amounts in 3rd 2nd 3rd
millions) Qtr Qtr Qtr
'13 '13 '12
------------------ ---- ---- ----
Net interest income
(FTE) $151 $154 $161
Provision for credit
losses 10 5 6
Noninterest income 45 46 41
Noninterest expenses 177 178 181
Net income 6 11 10
Net credit-related
charge-offs 7 4 13
Selected average
balances:
Assets 5,967 5,962 5,964
Loans 5,285 5,271 5,265
Deposits 21,257 21,241 20,682
-------- ------ ------ ------
-- Average loans increased $14 million, primarily due to an increase in
Small Business, partially offset by a decrease in Retail Banking.
-- Average deposits increased $16 million, primarily due to an increase in
Small Business, largely offset by a decrease in Retail Banking.
-- Net interest income decreased $3 million, primarily due to decreases in
funds transfer pricing (FTP) credits and purchase accounting accretion,
partially offset by the benefit provided by one additional day in the
quarter.
-- The provision for credit losses increased $5 million, primarily due to
an increase in specific reserves for individually evaluated loans.
-- Noninterest income remained relatively stable, primarily due to a
decrease in incentive payments received from Comerica's third-party
credit card provider, partially offset by a decrease in net securities
losses.
Wealth Management
(dollar amounts in 3rd 2nd 3rd
millions) Qtr Qtr Qtr
'13 '13 '12
------------------ ---- ---- ----
Net interest income
(FTE) $45 $46 $47
Provision for credit
losses 1 (3) 4
Noninterest income 61 65 62
Noninterest expenses 81 77 77
Net income 15 24 18
Net credit-related
charge-offs 3 2 3
Selected average
balances:
Assets 4,789 4,828 4,566
Loans 4,631 4,667 4,476
Deposits 3,782 3,701 3,667
-------- ----- ----- -----
-- Average loans decreased $36 million, primarily due to a decrease in
Private Banking.
-- Average deposits increased $81 million, primarily due to an increase in
Private Banking.
-- The provision for credit losses increased $4 million, primarily due to
an increase in specific reserves pertaining to a small number of
individually evaluated loans.
-- Noninterest income decreased $4 million, primarily reflecting decreases
in fiduciary income, investment banking fees and other small decreases
in several categories.
-- Noninterest expenses increased $4 million, primarily due to an increase
in salaries expense and corporate overhead expenses.
Geographic Market Segments
Comerica also provides market segment results for three primary geographic markets: Michigan, California and Texas. In addition to the three primary geographic markets, Other Markets is also reported as a market segment. 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 September 30, 2013 and are presented on a fully taxable equivalent (FTE) basis.
The following table presents net income (loss) by market segment.
(dollar amounts in 3rd Qtr 2nd Qtr 3rd Qtr
millions) '13 '13 '12
------------------ -------- -------- --------
Michigan $73 32% $77 32% $71 30%
California 71 31 65 27 67 29
Texas 35 15 46 19 44 19
Other Markets 51 22 54 22 53 22
------------- --- --- --- --- --- ---
230 100% 242 100% 235 100%
Finance & Other
(a) (83) (99) (118)
--------------- --- --- ----
Total $147 $143 $117
----- --- --- ---
(a) Includes items not
directly associated with
the geographic markets.
-- Average loans decreased $322 million and $237 million in Michigan and
Texas, respectively, and increased $90 million in California. Decreases
in Michigan and Texas primarily reflected decreases in Middle Market
loans. The increase in California was primarily due to increases in
Commercial Real Estate and Private Banking.
-- Average deposits increased $306 million in Michigan primarily due to an
increase in general Middle Market, partially offset by a decrease in
Retail Banking. In California, average deposits decreased $111 million
primarily reflecting a decrease in Corporate Banking, partially offset
by an increase in Commercial Real Estate. The increase in Texas of $104
million was primarily due to an increase in Corporate Banking, partially
offset by a decrease in general Middle Market.
-- Credit quality improved in all geographic markets resulting in decreases
to the provision for credit losses in Michigan and California. The
increase in the provision for credit losses in Texas was primarily due
to an increase in specific reserves pertaining to a small number of
individually evaluated loans.
Michigan Market
(dollar amounts in 3rd 2nd 3rd
millions) Qtr Qtr Qtr
'13 '13 '12
------------------ ---- ---- ----
Net interest income
(FTE) $186 $187 $193
Provision for credit
losses (8) (4) 2
Noninterest income 88 88 95
Noninterest expenses 167 161 175
Net income 73 77 71
Net credit-related
charge-offs 1 4 12
Selected average
balances:
Assets 13,744 14,022 13,785
Loans 13,276 13,598 13,475
Deposits 20,465 20,159 19,628
-------- ------ ------ ------
California Market
(dollar amounts in 3rd 2nd 3rd
millions) Qtr Qtr Qtr
'13 '13 '12
------------------ ---- ---- ----
Net interest income
(FTE) $171 $173 $176
Provision for credit
losses (3) 7 6
Noninterest income 42 36 33
Noninterest expenses 101 100 98
Net income 71 65 67
Net credit-related
charge-offs 8 12 11
Selected average
balances:
Assets 14,245 14,155 13,171
Loans 14,002 13,912 12,915
Deposits 14,567 14,671 14,964
-------- ------ ------ ------
Texas Market
(dollar amounts in 3rd 2nd 3rd
millions) Qtr Qtr Qtr
'13 '13 '12
------------------ ---- ---- ----
Net interest income
(FTE) $129 $131 $138
Provision for credit
losses 17 6 10
Noninterest income 35 34 30
Noninterest expenses 92 89 89
Net income 35 46 44
Net credit-related
charge-offs 4 (3) 7
Selected average
balances:
Assets 10,642 10,886 10,324
Loans 9,942 10,179 9,585
Deposits 10,298 10,187 9,941
-------- ------ ------ -----
Conference Call and Webcast
Comerica will host a conference call to review third quarter 2013 financial results at 7 a.m. CT Wednesday, October 16, 2013. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 60015337). The call and supplemental financial information can also be accessed via Comerica's "Investor Relations" page at www.comerica.com. A replay of the Webcast can 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 and on page 68 of the Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013. Forward-looking statements speak only as of the date they are made. Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this news release or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, June 30, September 30, September 30,
(in millions,
except per
share data) 2013 2013 2012 2013 2012
------------- ---- ---- ---- ---- ----
PER COMMON SHARE AND COMMON
STOCK DATA
Diluted net
income $0.78 $0.76 $0.61 $2.23 $2.00
Cash dividends
declared 0.17 0.17 0.15 0.51 0.40
Common
shareholders'
equity (at
period end) 37.94 37.32 37.01
Tangible
common equity
(at period
end) (a) 34.38 33.79 33.56
Average
diluted
shares (in
thousands) 187,104 186,998 191,492 187,180 193,991
----------- ------- ------- ------- ------- -------
KEY RATIOS
Return on
average
common
shareholders'
equity 8.50% 8.23% 6.67% 8.14% 7.46%
Return on
average
assets 0.92 0.90 0.75 0.89 0.84
Tier 1 common
capital ratio
(a) (b) 10.74 10.43 10.37
Tier 1 risk-
based capital
ratio (b) 10.74 10.43 10.37
Total risk-
based capital
ratio (b) 13.44 13.29 13.69
Leverage ratio
(b) 10.88 10.81 10.78
Tangible
common equity
ratio (a) 9.87 10.04 10.30
-------------- ---- ----- -----
AVERAGE BALANCES
Commercial
loans $27,759 $28,393 $26,700 $28,069 $25,810
Real estate construction
loans:
Commercial
Real Estate
business line
(c) 1,263 1,218 999 1,199 1,029
Other business
lines (d) 259 235 390 231 391
--- --- --- --- ---
Total real
estate
construction
loans 1,522 1,453 1,389 1,430 1,420
Commercial mortgage loans:
Commercial
Real Estate
business line
(c) 1,714 1,798 2,140 1,782 2,367
Other business
lines (d) 7,229 7,394 7,530 7,395 7,584
----- ----- ----- ----- -----
Total
commercial
mortgage
loans 8,943 9,192 9,670 9,177 9,951
Lease
financing 839 855 852 850 873
International
loans 1,252 1,262 1,302 1,265 1,257
Residential
mortgage
loans 1,642 1,602 1,488 1,600 1,498
Consumer loans 2,137 2,136 2,196 2,142 2,225
----- ----- ----- ----- -----
Total loans 44,094 44,893 43,597 44,533 43,034
Earning assets 58,892 58,928 57,801 58,810 56,883
Total assets 63,660 63,709 62,984 63,710 62,008
Noninterest-
bearing
deposits 22,379 22,076 21,469 21,991 20,415
Interest-
bearing
deposits 29,486 29,372 28,376 29,364 28,532
------ ------ ------ ------ ------
Total deposits 51,865 51,448 49,845 51,355 48,947
Common
shareholders'
equity 6,923 6,982 7,045 6,953 6,996
-------------- ----- ----- ----- ----- -----
NET INTEREST INCOME
Net interest
income (fully
taxable
equivalent
basis) $413 $415 $428 $1,244 $1,306
Fully taxable
equivalent
adjustment 1 1 1 2 2
Net interest
margin (fully
taxable
equivalent
basis) 2.79% 2.83% 2.96% 2.83% 3.08%
-------------- ---- ---- ---- ---- ----
CREDIT QUALITY
Nonaccrual
loans $437 $449 $665
Reduced-rate
loans 22 22 27
--- --- ---
Total
nonperforming
loans (e) 459 471 692
Foreclosed
property 19 29 63
--- --- ---
Total
nonperforming
assets (e) 478 500 755
Loans past due
90 days or
more and
still
accruing 25 20 36
Gross loan
charge-offs 39 35 59 $112 $185
Loan
recoveries 20 18 16 52 52
--- --- --- --- ---
Net loan
charge-offs 19 17 43 60 133
Allowance for
loan losses 604 613 647
Allowance for
credit losses
on lending-
related
commitments 34 36 35
--- --- ---
Total
allowance for
credit losses 638 649 682
Allowance for
loan losses
as a
percentage of
total loans 1.37% 1.35% 1.46%
Net loan
charge-offs
as a
percentage of
average total
loans (f) 0.18 0.15 0.39 0.18% 0.41%
Nonperforming
assets as a
percentage of
total loans
and
foreclosed
property (e) 1.08 1.10 1.71
Allowance for
loan losses
as a
percentage of
total
nonperforming
loans 131 130 94
-------------- --- --- ---
(a) See Reconciliation of Non-
GAAP Financial Measures.
(b) September 30, 2013 ratios are
estimated.
(c) Primarily loans to real
estate developers.
(d) Primarily loans secured by
owner-occupied real estate.
(e) Excludes loans acquired with
credit-impairment.
(f) Lending-related commitment
charge-offs were zero in
all periods presented.
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
September 30, June 30, December 31, September 30,
(in millions, except
share data) 2013 2013 2012 2012
-------------------- ---- ---- ---- ----
(unaudited) (unaudited) (unaudited)
ASSETS
Cash and due from
banks $1,384 $1,016 $1,395 $933
Federal funds sold - 31 100 -
Interest-bearing
deposits with banks 5,704 2,878 3,039 3,005
Other short-term
investments 106 119 125 146
Investment securities
available-for-sale 9,488 9,631 10,297 10,569
Commercial loans 27,897 29,186 29,513 27,460
Real estate
construction loans 1,552 1,479 1,240 1,392
Commercial mortgage
loans 8,785 9,007 9,472 9,559
Lease financing 829 843 859 837
International loans 1,286 1,209 1,293 1,277
Residential mortgage
loans 1,650 1,611 1,527 1,495
Consumer loans 2,152 2,124 2,153 2,174
-------------- ----- ----- ----- -----
Total loans 44,151 45,459 46,057 44,194
Less allowance for
loan losses (604) (613) (629) (647)
------------------ ---- ---- ---- ----
Net loans 43,547 44,846 45,428 43,547
Premises and equipment 604 604 622 625
Accrued income and
other assets 3,837 3,822 4,063 4,175
------------------ ----- ----- ----- -----
Total assets $64,670 $62,947 $65,069 $63,000
------------ ------- ------- ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing
deposits $23,896 $21,870 $23,279 $21,753
Money market and
interest-bearing
checking deposits 21,697 21,677 21,273 20,397
Savings deposits 1,645 1,677 1,606 1,589
Customer certificates
of deposit 5,180 5,594 5,531 5,742
Foreign office time
deposits 491 437 502 486
------------------- --- --- --- ---
Total interest-
bearing deposits 29,013 29,385 28,912 28,214
----------------- ------ ------ ------ ------
Total deposits 52,909 51,255 52,191 49,967
Short-term borrowings 226 131 110 63
Accrued expenses and
other liabilities 1,001 1,049 1,106 1,146
Medium- and long-
term debt 3,565 3,601 4,720 4,740
----------------- ----- ----- ----- -----
Total liabilities 57,701 56,036 58,127 55,916
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued -228,164,824
shares 1,141 1,141 1,141 1,141
Capital surplus 2,171 2,160 2,162 2,153
Accumulated other
comprehensive loss (541) (538) (413) (253)
Retained earnings 6,239 6,127 5,931 5,831
Less cost of common
stock in treasury -
44,483,659 shares at
9/30/13, 42,999,083
shares at 6/30/13,
39,889,610 shares at
12/31/12 and
36,790,174 shares at
9/30/12 (2,041) (1,979) (1,879) (1,788)
--------------------- ------ ------ ------ ------
Total shareholders'
equity 6,969 6,911 6,942 7,084
------------------- ----- ----- ----- -----
Total liabilities and
shareholders' equity $64,670 $62,947 $65,069 $63,000
--------------------- ------- ------- ------- -------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
(in
millions,
except
per
share
data) 2013 2012 2013 2012
---------- ---- ---- ---- ----
INTEREST INCOME
Interest
and fees
on loans $381 $400 $1,159 $1,219
Interest
on
investment
securities 54 57 159 179
Interest
on
short-
term
investments 4 3 10 9
------------ --- --- --- ---
Total
interest
income 439 460 1,328 1,407
INTEREST EXPENSE
Interest
on
deposits 13 17 43 54
Interest
on
medium-
and
long-
term
debt 14 16 43 49
-------- --- --- --- ---
Total
interest
expense 27 33 86 103
--------- --- --- --- ---
Net
interest
income 412 427 1,242 1,304
Provision
for
credit
losses 8 22 37 63
--------- --- --- --- ---
Net
interest
income
after
provision
for
credit
losses 404 405 1,205 1,241
NONINTEREST
INCOME
Service
charges
on
deposit
accounts 53 53 161 162
Fiduciary
income 41 39 128 116
Commercial
lending
fees 28 22 71 71
Letter of
credit
fees 17 19 49 54
Card fees 20 16 55 48
Foreign
exchange
income 9 9 27 29
Bank-
owned
life
insurance 12 10 31 30
Brokerage
fees 5 5 14 14
Net
securities
gains
(losses) 1 - (1) 11
Other
noninterest
income 28 24 87 79
------------ --- --- --- ---
Total
noninterest
income 214 197 622 614
NONINTEREST
EXPENSES
Salaries 196 192 566 582
Employee
benefits 59 61 185 181
--------- --- --- --- ---
Total
salaries
and
employee
benefits 255 253 751 763
Net
occupancy
expense 41 40 119 121
Equipment
expense 15 17 45 50
Outside
processing
fee
expense 31 27 89 79
Software
expense 22 23 66 67
Merger
and
restructuring
charges - 25 - 33
FDIC
insurance
expense 9 9 26 29
Advertising
expense 6 7 18 21
Other
real
estate
expense 1 2 3 6
Other
noninterest
expenses 37 46 132 161
------------ --- --- --- ---
Total
noninterest
expenses 417 449 1,249 1,330
------------ --- --- ----- -----
Income
before
income
taxes 201 153 578 525
Provision
for
income
taxes 54 36 154 134
--------- --- --- --- ---
NET
INCOME 147 117 424 391
Less
income
allocated
to
participating
securities 2 1 6 4
-------------- --- --- --- ---
Net
income
attributable
to
common
shares $145 $116 $418 $387
------------- ---- ---- ---- ----
Earnings per
common share:
Basic $0.80 $0.61 $2.28 $2.00
Diluted 0.78 0.61 2.23 2.00
Comprehensive
income 144 165 296 494
Cash
dividends
declared
on
common
stock 31 29 95 78
Cash
dividends
declared
per
common
share 0.17 0.15 0.51 0.40
---------- ---- ---- ---- ----
CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Third Second First Fourth Third Third Quarter 2013 Compared
To:
Quarter Quarter Quarter Quarter Quarter Second Quarter Third Quarter
2013 2012
(in millions,
except per
share data) 2013 2013 2013 2012 2012 Amount Percent Amount Percent
------------- ---- ---- ---- ---- ---- ------ ------- ------ -------
INTEREST INCOME
Interest and
fees on loans $381 $388 $390 $398 $400 $(7) (2)% $(19) (5)%
Interest on
investment
securities 54 52 53 55 57 2 6 (3) (3)
Interest on
short-term
investments 4 3 3 3 3 1 25 1 9
------------ --- --- --- --- --- --- --- --- ---
Total interest
income 439 443 446 456 460 (4) (1) (21) (4)
INTEREST EXPENSE
Interest on
deposits 13 15 15 16 17 (2) (7) (4) (23)
Interest on
medium- and
long-term debt 14 14 15 16 16 - - (2) (13)
--------------- --- --- --- --- --- --- --- --- ---
Total interest
expense 27 29 30 32 33 (2) (5) (6) (18)
-------------- --- --- --- --- --- --- --- --- ---
Net interest
income 412 414 416 424 427 (2) - (15) (3)
Provision for
credit losses 8 13 16 16 22 (5) (42) (14) (64)
-------------- --- --- --- --- --- --- --- --- ---
Net interest
income after
provision for
credit losses 404 401 400 408 405 3 1 (1) -
NONINTEREST INCOME
Service charges
on deposit
accounts 53 53 55 52 53 - - - -
Fiduciary income 41 44 43 42 39 (3) (4) 2 6
Commercial
lending fees 28 22 21 25 22 6 24 6 27
Letter of credit
fees 17 16 16 17 19 1 1 (2) (12)
Card fees 20 18 17 17 16 2 4 4 20
Foreign exchange
income 9 9 9 9 9 - - - -
Bank-owned life
insurance 12 10 9 9 10 2 22 2 23
Brokerage fees 5 4 5 5 5 1 - - -
Net securities
gains (losses) 1 (2) - 1 - 3 N/M 1 N/M
Other
noninterest
income 28 34 25 27 24 (6) (10) 4 20
------------ --- --- --- --- --- --- --- --- ---
Total
noninterest
income 214 208 200 204 197 6 3 17 9
NONINTEREST EXPENSES
Salaries 196 182 188 196 192 14 8 4 3
Employee
benefits 59 63 63 59 61 (4) (5) (2) (3)
--------- --- --- --- --- --- --- --- --- ---
Total salaries
and employee
benefits 255 245 251 255 253 10 5 2 2
Net occupancy
expense 41 39 39 42 40 2 2 1 -
Equipment
expense 15 15 15 15 17 - - (2) (8)
Outside
processing fee
expense 31 30 28 28 27 1 10 4 22
Software expense 22 22 22 23 23 - - (1) (5)
Merger and
restructuring
charges - - - 2 25 - - (25) N/M
FDIC insurance
expense 9 8 9 9 9 1 10 - -
Advertising
expense 6 6 6 6 7 - - (1) (15)
Other real
estate expense 1 1 1 3 2 - - (1) (49)
Other
noninterest
expenses 37 50 45 44 46 (13) (26) (9) (20)
------------ --- --- --- --- --- --- --- --- ---
Total
noninterest
expenses 417 416 416 427 449 1 1 (32) (7)
------------ --- --- --- --- --- --- --- --- ---
Income before
income taxes 201 193 184 185 153 8 4 48 31
Provision for
income taxes 54 50 50 55 36 4 7 18 47
------------- --- --- --- --- --- --- --- --- ---
NET INCOME 147 143 134 130 117 4 2 30 25
Less income
allocated to
participating
securities 2 2 2 2 1 - - 1 45
-------------- --- --- --- --- --- --- --- --- ---
Net income
attributable to
common shares $145 $141 $132 $128 $116 $4 2% $29 25%
---------------- ---- ---- ---- ---- ---- --- --- --- ---
Earnings per common
share:
Basic $0.80 $0.77 $0.71 $0.68 $0.61 $0.03 4% $0.19 31%
Diluted 0.78 0.76 0.70 0.68 0.61 0.02 3 0.17 28
Comprehensive
income (loss) 144 15 137 (30) 165 129 N/M (21) (13)
Cash dividends
declared on
common stock 31 32 32 28 29 (1) (1) 2 9
Cash dividends
declared per
common share 0.17 0.17 0.17 0.15 0.15 - - 0.02 13
-------------- ---- ---- ---- ---- ---- --- --- ---- ---
N/M - Not Meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
(unaudited)
Comerica Incorporated and
Subsidiaries
2013 2012
---- ----
(in 3rd 2nd 1st 4th 3rd
millions) Qtr Qtr Qtr Qtr Qtr
---------- ---- ---- ---- ---- ----
Balance
at
beginning
of
period $613 $617 $629 $647 $667
Loan
charge-
offs:
Commercial 20 19 21 42 19
Real
estate
construction:
Commercial
Real
Estate
business
line
(a) 1 2 - 1 2
Other
business
lines
(b) - - - - -
-------- --- --- --- --- ---
Total
real
estate
construction 1 2 - 1 2
Commercial
mortgage:
Commercial
Real
Estate
business
line
(a) 6 2 1 5 12
Other
business
lines
(b) 3 7 12 6 13
-------- --- --- --- --- ---
Total
commercial
mortgage 9 9 13 11 25
International - - - - 1
Residential
mortgage 1 1 1 2 6
Consumer 8 4 3 4 6
-------- --- --- --- --- ---
Total
loan
charge-
offs 39 35 38 60 59
Recoveries
on
loans
previously
charged-
off:
Commercial 8 11 6 13 7
Real
estate
construction 2 1 1 1 3
Commercial
mortgage 7 3 5 6 5
Lease
financing 1 - - - -
International - - - 1 -
Residential
mortgage 1 1 1 1 -
Consumer 1 2 1 1 1
-------- --- --- --- --- ---
Total
recoveries 20 18 14 23 16
---------- --- --- --- --- ---
Net
loan
charge-
offs 19 17 24 37 43
Provision
for
loan
losses 10 13 12 19 23
--------- --- --- --- --- ---
Balance
at
end
of
period $604 $613 $617 $629 $647
------- --- --- --- --- ---
Allowance
for
loan
losses
as
a
percentage
of
total
loans 1.37% 1.35% 1.37% 1.37% 1.46%
Net
loan
charge-
offs
as
a
percentage
of
average
total
loans 0.18 0.15 0.21 0.34 0.39
---------- ---- ---- ---- ---- ----
(a) Primarily charge-offs
of loans to real
estate 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 3rd 2nd 1st 4th 3rd
millions) Qtr Qtr Qtr Qtr Qtr
---------- --- --- --- --- ---
Balance
at
beginning
of
period $36 $36 $32 $35 $36
Add:
Provision
for
credit
losses
on
lending-
related
commitments (2) - 4 (3) (1)
----------- --- --- --- --- ---
Balance
at
end
of
period $34 $36 $36 $32 $35
------- -- -- -- -- --
Unfunded
lending-
related
commitments
sold $2 $1 $2 $ - $ -
----------- -- -- -- -- --- -- ---
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2013 2012
---- ----
(in millions) 3rd 2nd 1st 4th 3rd
Qtr Qtr Qtr Qtr Qtr
------------ ---- ---- ---- ---- ----
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial $107 $102 $102 $103 $154
Real estate
construction:
Commercial Real
Estate business
line (a) 24 26 30 30 45
Other business
lines (b) 1 2 3 3 6
-------------- --- --- --- --- ---
Total real estate
construction 25 28 33 33 51
Commercial mortgage:
Commercial Real
Estate business
line (a) 67 69 86 94 137
Other business
lines (b) 139 157 178 181 219
-------------- --- --- --- --- ---
Total commercial
mortgage 206 226 264 275 356
Lease financing - - - 3 3
Total nonaccrual
business loans 338 356 399 414 564
Retail loans:
Residential
mortgage 63 62 65 70 69
Consumer:
Home equity 34 28 28 31 28
Other consumer 2 3 2 4 4
-------------- --- --- --- --- ---
Total consumer 36 31 30 35 32
-------------- --- --- --- --- ---
Total nonaccrual
retail loans 99 93 95 105 101
---------------- --- --- --- --- ---
Total nonaccrual
loans 437 449 494 519 665
Reduced-rate
loans 22 22 21 22 27
------------ --- --- --- --- ---
Total
nonperforming
loans (c) 459 471 515 541 692
Foreclosed
property 19 29 40 54 63
---------- --- --- --- --- ---
Total
nonperforming
assets (c) $478 $500 $555 $595 $755
-------------- --- --- --- --- ---
Nonperforming
loans as a
percentage of
total loans 1.04% 1.04% 1.14% 1.17% 1.57%
Nonperforming
assets as a
percentage of
total loans and
foreclosed
property 1.08 1.10 1.23 1.29 1.71
Allowance for
loan losses as a
percentage of
total
nonperforming
loans 131 130 120 116 94
Loans past due 90
days or more and
still accruing $25 $20 $25 $23 $36
----------------- --- --- --- --- ---
ANALYSIS OF NONACCRUAL
LOANS
Nonaccrual loans
at beginning of
period $449 $494 $519 $665 $719
Loans transferred
to nonaccrual
(d) 50 37 34 36 35
Nonaccrual
business loan
gross charge-
offs (e) (25) (25) (34) (54) (46)
Nonaccrual
business loans
sold (f) (17) (9) (7) (48) (20)
Payments/Other
(g) (20) (48) (18) (80) (23)
-------------- --- --- --- --- ---
Nonaccrual loans
at end of period $437 $449 $494 $519 $665
----------------- --- --- --- --- ---
(a) Primarily loans to real estate 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 $25 $25 $34 $54 $46
Performing watch
list loans 5 5 - - 1
Consumer and
residential
mortgage loans 9 5 4 6 12
--- --- --- --- ---
Total gross loan
charge-offs $39 $35 $38 $60 $59
--- --- --- --- ---
(f) Analysis of loans sold:
Nonaccrual
business loans $17 $9 $7 $48 $20
Performing watch
list loans 31 40 12 24 42
--- --- --- --- ---
Total loans sold $48 $49 $19 $72 $62
--- --- --- --- ---
(g) Includes net changes related to nonaccrual loans with balances less than $2 million,
payments on nonaccrual loans with book balances greater than $2 million and transfers of
nonaccrual loans to foreclosed property. Excludes business loan gross charge-offs and
business nonaccrual loans sold.
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)
Comerica Incorporated and Subsidiaries
Nine Months Ended
-----------------
September 30, 2013 September 30, 2012
------------------ ------------------
Average Average Average Average
(dollar
amounts in
millions) Balance Interest Rate Balance Interest Rate
----------- ------- ------- ---- ------- ------- ----
Commercial
loans $28,069 $688 3.28% $25,810 $673 3.48%
Real estate
construction
loans 1,430 43 3.98 1,420 47 4.48
Commercial
mortgage
loans 9,177 271 3.95 9,951 337 4.51
Lease
financing 850 21 3.22 873 19 2.92
International
loans 1,265 35 3.73 1,257 35 3.73
Residential
mortgage
loans 1,600 50 4.13 1,498 52 4.66
Consumer
loans 2,142 53 3.32 2,225 57 3.44
-------- ----- --- ---- ----- --- ----
Total loans
(a) 44,533 1,161 3.49 43,034 1,220 3.79
Mortgage-
backed
securities
available-
for-sale 9,339 158 2.29 9,317 177 2.60
Other
investment
securities
available-
for-sale 390 1 0.48 486 3 0.78
----------- --- --- ---- --- --- ----
Total
investment
securities
available-
for-sale 9,729 159 2.21 9,803 180 2.51
Interest-
bearing
deposits
with banks
(b) 4,433 9 0.26 3,908 8 0.26
Other
short-
term
investments 115 1 1.38 138 1 1.80
------------ --- --- ---- --- --- ----
Total
earning
assets 58,810 1,330 3.03 56,883 1,409 3.32
Cash and
due from
banks 993 967
Allowance
for loan
losses (627) (707)
Accrued
income and
other
assets 4,534 4,865
----- -----
Total
assets $63,710 $62,008
------- -------
Money
market and
interest-
bearing
checking
deposits $21,594 22 0.13 $20,577 26 0.18
Savings
deposits 1,654 - 0.03 1,589 1 0.06
Customer
certificates
of deposit 5,603 19 0.44 5,993 25 0.54
Foreign
office
time
deposits 513 2 0.54 373 2 0.64
--------- --- --- ---- --- --- ----
Total
interest-
bearing
deposits 29,364 43 0.19 28,532 54 0.25
Short-term
borrowings 189 - 0.07 78 - 0.12
Medium-
and long-
term debt 4,109 43 1.42 4,846 49 1.36
---------- ----- --- ---- ----- --- ----
Total
interest-
bearing
sources 33,662 86 0.34 33,456 103 0.41
Noninterest-
bearing
deposits 21,991 20,415
Accrued
expenses
and other
liabilities 1,104 1,141
Total
shareholders'
equity 6,953 6,996
----- -----
Total
liabilities
and
shareholders'
equity $63,710 $62,008
------- -------
Net interest
income/rate
spread (FTE) $1,244 2.69 $1,306 2.91
------ ------
FTE adjustment $2 $2
Impact of net
noninterest-
bearing sources of
funds 0.14 0.17
------------------- ---- ----
Net interest margin
(as a percentage
of average earning
assets) (FTE) (a)
(b) 2.83% 3.08%
------------------- ---- ----
(a) Accretion of the purchase
discount on the acquired
loan portfolio of $26
million and $58 million
in the nine months ended
September 30, 2013 and
2012, respectively,
increased the net
interest margin by 6
basis points and 14 basis
points in each respective
period.
(b) Excess liquidity,
represented by average
balances deposited with
the Federal Reserve Bank,
reduced the net interest
margin by 20 basis points
in both the nine months
ended September 30, 2013
and 2012.
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
------------------
September 30, 2013 June 30, 2013 September 30, 2012
------------------ ------------- ------------------
Average Average Average Average Average Average
(dollar
amounts in
millions) Balance Interest Rate Balance Interest Rate Balance Interest Rate
----------- ------- ------- ---- ------- ------- ---- ------- ------- ----
Commercial
loans $27,759 $226 3.25% $28,393 $233 3.29% $26,700 $227 3.38%
Real estate
construction
loans 1,522 15 3.78 1,453 15 4.04 1,389 15 4.36
Commercial
mortgage
loans 8,943 88 3.90 9,192 88 3.86 9,670 106 4.34
Lease
financing 839 7 3.21 855 7 3.22 852 4 2.04
International
loans 1,252 12 3.76 1,262 12 3.81 1,302 12 3.77
Residential
mortgage
loans 1,642 17 3.98 1,602 16 4.04 1,488 17 4.67
Consumer
loans 2,137 17 3.27 2,136 18 3.30 2,196 19 3.44
-------- ----- --- ---- ----- --- ---- ----- --- ----
Total loans
(a) 44,094 382 3.44 44,893 389 3.47 43,597 400 3.66
Mortgage-
backed
securities
available-
for-sale 8,989 54 2.41 9,400 51 2.22 9,360 57 2.46
Other
investment
securities
available-
for-sale 391 - 0.43 393 1 0.52 431 1 0.86
----------- --- --- ---- --- --- ---- --- --- ----
Total
investment
securities
available-
for-sale 9,380 54 2.32 9,793 52 2.15 9,791 58 2.38
Interest-
bearing
deposits
with banks
(b) 5,308 4 0.26 4,125 3 0.26 4,276 3 0.26
Other
short-
term
investments 110 - 0.77 117 - 1.05 137 - 1.88
------------ --- --- ---- --- --- ---- --- --- ----
Total
earning
assets 58,892 440 2.97 58,928 444 3.02 57,801 461 3.19
Cash and
due from
banks 1,027 972 971
Allowance
for loan
losses (622) (625) (673)
Accrued
income and
other
assets 4,363 4,434 4,885
----- ----- -----
Total
assets $63,660 $63,709 $62,984
------- ------- -------
Money
market and
interest-
bearing
checking
deposits $21,894 7 0.13 $21,544 8 0.13 $20,483 8 0.17
Savings
deposits 1,680 - 0.04 1,658 - 0.03 1,618 - 0.04
Customer
certificates
of deposit 5,384 6 0.41 5,685 6 0.43 5,894 8 0.52
Foreign
office
time
deposits 528 - 0.48 485 1 0.60 381 1 0.71
--------- --- --- ---- --- --- ---- --- --- ----
Total
interest-
bearing
deposits 29,486 13 0.18 29,372 15 0.19 28,376 17 0.24
Short-term
borrowings 249 - 0.06 193 - 0.07 89 - 0.12
Medium-
and long-
term debt 3,590 14 1.54 4,044 14 1.43 4,745 16 1.35
---------- ----- --- ---- ----- --- ---- ----- --- ----
Total
interest-
bearing
sources 33,325 27 0.32 33,609 29 0.34 33,210 33 0.40
Noninterest-
bearing
deposits 22,379 22,076 21,469
Accrued
expenses
and other
liabilities 1,033 1,042 1,260
Total
shareholders'
equity 6,923 6,982 7,045
----- ----- -----
Total
liabilities
and
shareholders'
equity $63,660 $63,709 $62,984
------- ------- -------
Net interest
income/rate
spread (FTE) $413 2.65 $415 2.68 $428 2.79
---- ---- ----
FTE adjustment $1 $1 $1
Impact of net
noninterest-
bearing sources of
funds 0.14 0.15 0.17
------------------- ---- ---- ----
Net interest margin
(as a percentage
of average earning
assets) (FTE) (a)
(b) 2.79% 2.83% 2.96%
------------------- ---- ---- ----
(a) Accretion of the purchase
discount on the acquired
loan portfolio of $8
million, $7 million and
$15 million in the third
and second quarters of
2013 and the third
quarter of 2012,
respectively, increased
the net interest margin
by 5 basis points, 5
basis points and 10 basis
points in each respective
period.
(b) Excess liquidity,
represented by average
balances deposited with
the Federal Reserve Bank,
reduced the net interest
margin by 24 basis points
and 18 basis points in
the third and second
quarters of 2013 and 21
basis points in the third
quarter of 2012,
respectively.
CONSOLIDATED STATISTICAL DATA (unaudited)
Comerica Incorporated and Subsidiaries
September 30, June 30, March 31, December 31, September 30,
(in
millions,
except per
share
data) 2013 2013 2013 2012 2012
----------- ---- ---- ---- ---- ----
Commercial loans:
Floor plan $2,869 $3,241 $2,963 $2,939 $2,276
Other 25,028 25,945 25,545 26,574 25,184
----- ------ ------ ------ ------ ------
Total
commercial
loans 27,897 29,186 28,508 29,513 27,460
Real estate construction
loans:
Commercial
Real
Estate
business
line (a) 1,283 1,223 1,185 1,049 1,003
Other
business
lines (b) 269 256 211 191 389
---------- --- --- --- --- ---
Total real
estate
construction
loans 1,552 1,479 1,396 1,240 1,392
Commercial mortgage
loans:
Commercial
Real
Estate
business
line (a) 1,592 1,743 1,812 1,873 2,020
Other
business
lines (b) 7,193 7,264 7,505 7,599 7,539
---------- ----- ----- ----- ----- -----
Total
commercial
mortgage
loans 8,785 9,007 9,317 9,472 9,559
Lease
financing 829 843 853 859 837
International
loans 1,286 1,209 1,269 1,293 1,277
Residential
mortgage
loans 1,650 1,611 1,568 1,527 1,495
Consumer loans:
Home equity 1,501 1,474 1,498 1,537 1,570
Other
consumer 651 650 658 616 604
--------- --- --- --- --- ---
Total
consumer
loans 2,152 2,124 2,156 2,153 2,174
--------- ----- ----- ----- ----- -----
Total loans $44,151 $45,459 $45,067 $46,057 $44,194
----------- ------- ----- ------- ------- -------
Goodwill $635 $635 $635 $635 $635
Core
deposit
intangible 17 18 19 20 23
Loan
servicing
rights 1 2 2 2 2
Tier 1
common
capital
ratio (c)
(d) 10.74% 10.43% 10.37% 10.14% 10.37%
Tier 1
risk-
based
capital
ratio (c) 10.74 10.43 10.37 10.14 10.37
Total risk-
based
capital
ratio (c) 13.44 13.29 13.41 13.15 13.69
Leverage
ratio (c) 10.88 10.81 10.75 10.57 10.78
Tangible
common
equity
ratio (d) 9.87 10.04 9.86 9.76 10.30
Common
shareholders'
equity per
share of
common
stock $37.94 $37.32 $37.41 $36.87 $37.01
Tangible
common
equity per
share of
common
stock (d) 34.38 33.79 33.90 33.38 33.56
Market value per share
for the quarter:
High 43.49 40.44 36.99 32.14 33.38
Low 38.56 33.55 30.73 27.72 29.32
Close 39.31 39.83 35.95 30.34 31.05
Quarterly ratios:
Return on
average
common
shareholders'
equity 8.50% 8.23% 7.68% 7.36% 6.67%
Return on
average
assets 0.92 0.90 0.84 0.81 0.75
Efficiency
ratio (e) 66.66 66.43 67.58 68.08 71.68
Number of
banking
centers 484 484 487 487 490
Number of
employees
-full
time
equivalent 8,918 8,929 9,001 9,035 9,079
----------- ----- ----- ----- ----- -----
(a) Primarily loans to real
estate developers.
(b) Primarily loans secured by
owner-occupied real estate.
(c) September 30, 2013 ratios are
estimated.
(d) See Reconciliation of Non-
GAAP Financial Measures.
(e) Noninterest expenses as a
percentage of the sum of net
interest income (FTE) and
noninterest income excluding
net securities gains.
PARENT COMPANY ONLY BALANCE SHEETS (unaudited)
Comerica Incorporated
September 30, December 31, September 30,
(in millions, except
SHARE data) 2013 2012 2012
-------------------- ---- ---- ----
ASSETS
Cash and due from
subsidiary bank $36 $2 $13
Short-term
investments with
subsidiary bank 480 431 418
Other short-term
investments 92 88 88
Investment in
subsidiaries,
principally banks 7,008 7,045 7,200
Premises and equipment 4 4 4
Other assets 134 150 150
------------ --- --- ---
Total assets $7,754 $7,720 $7,873
------------ ------ ------ ------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Medium- and long-
term debt $620 $629 $632
Other liabilities 165 149 157
----------------- --- --- ---
Total liabilities 785 778 789
Common stock -$5 par
value:
Authorized -
325,000,000 shares
Issued -228,164,824
shares 1,141 1,141 1,141
Capital surplus 2,171 2,162 2,153
Accumulated other
comprehensive loss (541) (413) (253)
Retained earnings 6,239 5,931 5,831
Less cost of common
stock in treasury -
44,483,659 shares at
9/30/13, 39,889,610
shares at 12/31/12
and 36,790,174 shares
at 9/30/12 (2,041) (1,879) (1,788)
---------------------- ------ ------ ------
Total shareholders'
equity 6,969 6,942 7,084
------------------- ----- ----- -----
Total liabilities and
shareholders' equity $7,754 $7,720 $7,873
--------------------- ------ ------ ------
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 - - - - 391 - 391
Other
comprehensive
income, net of
tax - - - 103 - - 103
Cash dividends
declared on
common stock
($0.40 per
share) - - - - (78) - (78)
Purchase of
common stock (7.1) - - - - (215) (215)
Net issuance of
common stock
under employee
stock plans 1.2 - (48) - (28) 62 (14)
Share-based
compensation - - 29 - - - 29
Other - - 2 - - (2) -
----- --- --- --- --- --- --- ---
BALANCE AT
SEPTEMBER 30,
2012 191.4 $1,141 $2,153 $(253) $5,831 $(1,788) $7,084
-------------- ----- ------ ------ ----- ------ ------- ------
BALANCE AT
DECEMBER 31,
2012 188.3 $1,141 $2,162 $(413) $5,931 $(1,879) $6,942
Net income - - - - 424 - 424
Other
comprehensive
loss, net of
tax - - - (128) - - (128)
Cash dividends
declared on
common stock
($0.51 per
share) - - - - (95) - (95)
Purchase of
common stock (5.8) - - - - (218) (218)
Net issuance of
common stock
under employee
stock plans 1.2 - (18) - (21) 56 17
Share-based
compensation - - 27 - - - 27
BALANCE AT
SEPTEMBER 30,
2013 183.7 $1,141 $2,171 $(541) $6,239 $(2,041) $6,969
-------------- ----- ------ ------ ----- ------ ------- ------
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar
amounts in
millions) Business Retail Wealth
Three
Months
Ended
September
30, 2013 Bank Bank Management Finance Other Total
---------- ---- ---- ---------- ------- ----- -----
Earnings summary:
Net
interest
income
(expense)
(FTE) $368 $151 $45 $(159) $8 $413
Provision
for credit
losses (1) 10 1 - (2) 8
Noninterest
income 89 45 61 18 1 214
Noninterest
expenses 153 177 81 2 4 417
Provision
(benefit)
for income
taxes
(FTE) 96 3 9 (56) 3 55
--- --- --- --- ---
Net income
(loss) $209 $6 $15 $(87) $4 $147
---- --- --- ---- --- ----
Net credit-
related
charge-
offs $9 $7 $3 - - $19
Selected average
balances:
Assets $35,298 $5,967 $4,789 $11,097 $6,509 $63,660
Loans 34,178 5,285 4,631 - - 44,094
Deposits 26,284 21,257 3,782 319 223 51,865
Statistical data:
Return on
average
assets (a) 2.38% 0.12% 1.21% N/M N/M 0.92%
Efficiency
ratio (b) 33.50 90.27 77.22 N/M N/M 66.66
----- ----- ----- --- --- -----
Business Retail Wealth
Three
Months
Ended June
30, 2013 Bank Bank Management Finance Other Total
----------- ---- ---- ---------- ------- ----- -----
Earnings summary:
Net
interest
income
(expense)
(FTE) $372 $154 $46 $(165) $8 $415
Provision
for credit
losses 10 5 (3) - 1 13
Noninterest
income 80 46 65 15 2 208
Noninterest
expenses 147 178 77 3 11 416
Provision
(benefit)
for income
taxes
(FTE) 88 6 13 (55) (1) 51
--- --- --- --- ---
Net income
(loss) $207 $11 $24 $(98) $(1) $143
---- --- --- ---- --- ----
Net credit-
related
charge-
offs $11 $4 $2 - - $17
Selected average
balances:
Assets $36,017 $5,962 $4,828 $11,514 $5,388 $63,709
Loans 34,955 5,271 4,667 - - 44,893
Deposits 25,987 21,241 3,701 283 236 51,448
Statistical data:
Return on
average
assets (a) 2.30% 0.20% 2.00% N/M N/M 0.90%
Efficiency
ratio (b) 32.41 87.98 69.86 N/M N/M 66.43
---------- ----- ----- ----- --- --- -----
Business Retail Wealth
Three
Months
Ended
September
30, 2012 Bank Bank Management Finance Other Total
---------- ---- ---- ---------- ------- ----- -----
Earnings summary:
Net
interest
income
(expense)
(FTE) $380 $161 $47 $(170) 10 $428
Provision
for credit
losses 15 6 4 - (3) 22
Noninterest
income 76 41 62 14 4 197
Noninterest
expenses 145 181 77 3 43 449
Provision
(benefit)
for income
taxes
(FTE) 89 5 10 (59) (8) 37
--- --- --- --- --- ---
Net income
(loss) $207 $10 $18 $(100) $(18) $117
---- --- --- ----- ---- ----
Net credit-
related
charge-
offs $27 $13 $3 - - $43
Selected average
balances:
Assets $34,861 $5,964 $4,566 $11,873 $5,720 $62,984
Loans 33,856 5,265 4,476 - - 43,597
Deposits 25,142 20,682 3,667 181 173 49,845
Statistical data:
Return on
average
assets (a) 2.38% 0.19% 1.59% N/M N/M 0.75%
Efficiency
ratio (b) 31.67 89.07 71.04 N/M N/M 71.68
---------- ----- ----- ----- --- --- -----
(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
& Other
Three
Months
Ended
September
30, 2013 Michigan California Texas Total
Markets
--- ---
Earnings summary:
Net
interest
income
(expense)
(FTE) $186 $171 $129 $78 $(151) $413
Provision
for credit
losses (8) (3) 17 4 (2) 8
Noninterest
income 88 42 35 30 19 214
Noninterest
expenses 167 101 92 51 6 417
Provision
(benefit)
for income
taxes
(FTE) 42 44 20 2 (53) 55
--- --- --- --- --- ---
Net income
(loss) $73 $71 $35 $51 $(83) $147
--- --- --- --- ---- ----
Net credit-
related
charge-
offs $1 $8 $4 $6 $ - $19
Selected average
balances:
Assets $13,744 $14,245 $10,642 $7,423 $17,606 $63,660
Loans 13,276 14,002 9,942 6,874 - 44,094
Deposits 20,465 14,567 10,298 5,993 542 51,865
Statistical data:
Return on
average
assets (a) 1.38% 1.84% 1.21% 2.73% N/M 0.92%
Efficiency
ratio (b) 60.89 47.37 56.52 47.65 N/M 66.66
---------- ----- ----- ----- ----- --- -----
Other Finance
Markets & Other
Three
Months
Ended June
30, 2013 Michigan California Texas Total
----------- -------- -------- ----- -----
Earnings summary:
Net
interest
income
(expense)
(FTE) $187 $173 $131 $81 $(157) $415
Provision
for credit
losses (4) 7 6 3 1 13
Noninterest
income 88 36 34 33 17 208
Noninterest
expenses 161 100 89 52 14 416
Provision
(benefit)
for income
taxes
(FTE) 41 37 24 5 (56) 51
--- --- --- --- --- ---
Net income
(loss) $77 $65 $46 $54 $(99) $143
--- --- --- --- ---- ----
Net credit-
related
charge-
offs $4 $12 $(3) $4 $ - $17
Selected average
balances:
Assets $14,022 $14,155 $10,886 $7,744 $16,902 $63,709
Loans 13,598 13,912 10,179 7,204 - 44,893
Deposits 20,159 14,671 10,187 5,912 519 51,448
Statistical data:
Return on
average
assets (a) 1.47% 1.65% 1.62% 2.79% N/M 0.90%
Efficiency
ratio (b) 58.17 47.73 53.39 46.04 N/M 66.43
---------- ----- ----- ----- ----- --- -----
Other Finance
Markets & Other
Three
Months
Ended
September
30, 2012 Michigan California Texas Total
---------- -------- -------- ----- -----
Earnings summary:
Net
interest
income
(expense)
(FTE) $193 $176 $138 $81 $(160) $428
Provision
for credit
losses 2 6 10 7 (3) 22
Noninterest
income 95 33 30 21 18 197
Noninterest
expenses 175 98 89 41 46 449
Provision
(benefit)
for income
taxes
(FTE) 40 38 25 1 (67) 37
--- --- --- --- --- ---
Net income
(loss) $71 $67 $44 $53 $(118) $117
--- --- --- --- ----- ----
Net credit-
related
charge-
offs $12 $11 $7 $13 $ - $43
Selected average
balances:
Assets $13,785 $13,171 $10,324 $8,111 $17,593 $62,984
Loans 13,475 12,915 9,585 7,622 - 43,597
Deposits 19,628 14,964 9,941 4,958 354 49,845
Statistical data:
Return on
average
assets (a) 1.39% 1.69% 1.62% 2.53% N/M 0.75%
Efficiency
ratio (b) 60.06 46.68 52.96 41.78 N/M 71.68
---------- ----- ----- ----- ----- --- -----
(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
September 30, June 30, March 31, December 31, September 30,
(dollar
amounts in
millions) 2013 2013 2013 2012 2012
----------- ---- ---- ---- ---- ----
Tier 1 Common Capital
Ratio:
Tier 1 and
Tier 1
common
capital
(a) (b) $6,863 $6,800 $6,748 $6,705 $6,685
---------- ------ ------ ------ ------ ------
Risk-
weighted
assets (a)
(b) $63,917 $65,220 $65,099 $66,115 $64,486
----------- ------- ----- ------- ------- -------
Tier 1 and
Tier 1
common
risk-
based
capital
ratio (b) 10.74% 10.43% 10.37% 10.14% 10.37%
Basel III Tier 1 Common
Capital Ratio:
Tier 1
common
capital
(b) $6,863 $6,800 $6,748 $6,705 $6,685
Basel III
adjustments
(c) - - (1) (39) (17)
------------ --- --- --- --- ---
Basel III
Tier 1
common
capital
(c) 6,863 6,800 6,747 6,666 6,668
--------- ----- ----- ----- ----- -----
Risk-
weighted
assets (a)
(b) $63,917 $65,220 $65,099 $66,115 $64,486
Basel III
adjustments
(c) 2,295 2,091 1,996 1,854 2,313
----- ----- ----- ----- -----
Basel III
risk-
weighted
assets (c) $66,212 $67,311 $67,095 $67,969 $66,799
----------- ------- ----- ------- ------- -------
Tier 1
common
capital
ratio (b) 10.7% 10.4% 10.4% 10.1% 10.4%
Basel III
Tier 1
common
capital
ratio (c) 10.4 10.1 10.1 9.8 10.0
---------- ---- ---- ---- --- ----
Tangible Common Equity
Ratio:
Common
shareholders'
equity $6,969 $6,911 $6,988 $6,942 $7,084
Less:
Goodwill 635 635 635 635 635
Other
intangible
assets 18 20 21 22 25
--- --- --- --- ---
Tangible
common
equity $6,316 $6,256 $6,332 $6,285 $6,424
-------- ------ ------ ------ ------ ------
Total
assets $64,670 $62,947 $64,885 $65,069 $63,000
Less:
Goodwill 635 635 635 635 635
Other
intangible
assets 18 20 21 22 25
--- --- --- --- ---
Tangible
assets $64,017 $62,292 $64,229 $64,412 $62,340
-------- ------- ----- ------- ------- -------
Common
equity
ratio 10.78% 10.98% 10.77% 10.67% 11.24%
Tangible
common
equity
ratio 9.87 10.04 9.86 9.76 10.30
-------- ---- ----- ---- ---- -----
Tangible Common Equity
per Share of Common
Stock:
Common
shareholders'
equity $6,969 $6,911 $6,988 $6,942 $7,084
Tangible
common
equity 6,316 6,256 6,332 6,285 6,424
-------- ----- ----- ----- ----- -----
Shares of
common
stock
outstanding
(in
millions) 184 185 187 188 191
------------ --- --- --- --- ---
Common
shareholders'
equity per
share of
common
stock $37.94 $37.32 $37.41 $36.87 $37.01
Tangible
common
equity per
share of
common
stock 34.38 33.79 33.90 33.38 33.56
----------- ----- ----- ----- ----- -----
(a) Tier 1 capital and risk-
weighted assets as defined by
regulation.
(b) September 30, 2013 Tier 1
capital and risk-weighted
assets are estimated.
(c) Estimated ratios based on the
standardized approach in the
final rule for the U.S.
adoption of the Basel III
regulatory capital framework
and excluding most elements
of AOCI.
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 final rule approved by U.S. banking regulators in July 2013 for the U.S. adoption of the Basel III regulatory capital framework. The final Basel III capital rules are effective January 1, 2015 for banking organizations subject to the standardized approach. 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
