DALLAS, April 17, 2015 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported first quarter 2015 net income of $134 million, compared to $149 million for the fourth quarter 2014 and $139 million for the first quarter 2014. Earnings per diluted share were 73 cents for the first quarter 2015, compared to 80 cents for the fourth quarter 2014 and 73 cents for the first quarter 2014.
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(dollar
amounts
in
millions,
except
per
share
data) 1st Qtr '15 4th Qtr '14 1st Qtr '14
--------- ----------- ----------- -----------
Net
interest
income $413 $415 $410
Provision
for
credit
losses 14 2 9
Noninterest
income
(a) 256 225 208
Noninterest
expenses
(a) 460 419 406
Provision
for
income
taxes 61 70 64
Net
income 134 149 139
Net
income
attributable
to
common
shares 132 148 137
Diluted
income
per
common
share 0.73 0.80 0.73
Average
diluted
shares
(in
millions) 182 184 187
Basel
III
common
equity
Tier
1
capital
ratio
(b)
(c) 10.43% n/a n/a
Tier
1
common
capital
ratio
(b)
(d) n/a 10.50% 10.58%
Tangible
common
equity
ratio
(d) 9.97 9.85 10.20
-------- ---- ---- -----
(a) Effective
January 1,
2015,
contractual
changes to a
card program
resulted in a
change to the
accounting
presentation
of the related
revenues and
expenses. The
effect of this
change was an
increase of
$44 million to
both
noninterest
income and
noninterest
expenses in
the first
quarter 2015.
(b) Basel III capital rules (standardized
approach) became effective for
Comerica on January 1, 2015. The
ratio reflects transitional
treatment for certain regulatory
deductions and adjustments. For
further information, see "Balance
Sheet and Capital Management".
Capital ratios for prior periods are
based on Basel I rules.
(c) March 31, 2015 ratio is estimated.
(d) See Reconciliation of Non-GAAP
Financial Measures.
n/a - not applicable.
---------------------
"Our first quarter results reflect our strong focus on relationships and ability to generate loans in a highly competitive environment as we maintain our pricing and credit discipline," said Ralph W. Babb, Jr., chairman and chief executive officer. "Average loans were up $3.1 billion, or 7 percent, compared to a year ago. Relative to the fourth quarter, average loans grew $790 million, or 2 percent, with growth across all of our markets. Average loans in our Energy business line increased about $200 million, peaking in February, then declining as customers adjusted their cash flow needs and were able to access the capital markets. Average loan growth was also driven by increases in Technology and Life Sciences, National Dealer Services, general Middle Market and Small Business.
"First quarter net interest income was relatively stable, and credit quality continued to be strong. Our capital position remains solid. Share repurchases under our equity repurchase program, combined with dividends, returned $95 million to shareholders in the first quarter. We remain focused on the long term and carrying out our relationship banking strategy, which has served us well over many cycles, and we continue to believe we are positioned to benefit from a rising rate environment."
First Quarter 2015 Compared to Fourth Quarter 2014
-- Average total loans increased $790 million, or 2 percent, to $48.2
billion, primarily reflecting a $699 million increase in commercial
loans. The increase in commercial loans was primarily driven by
increases in Energy, general Middle Market, Technology and Life Sciences
and National Dealer Services. Average loans increased across all
markets. Period-end total loans increased $479 million, to $49.1
billion.
-- Average total deposits decreased $770 million, or 1 percent, to $57.0
billion, following robust growth of $2.6 billion, or 5 percent, in the
fourth quarter 2014. The decrease primarily reflected a decline in
noninterest-bearing deposits of $807 million, largely driven by
Corporate Banking. Period-end total deposits increased $84 million, to
$57.6 billion.
-- Net interest income remained relatively stable at $413 million.
-- Overall credit quality remained strong. The allowance for credit losses
increased $5 million, primarily reflecting the impact of loan growth and
increased reserves for loans related to energy((a)), including a
qualitative component, partially offset by improvements in credit
quality in the remainder of the portfolio. Net charge-offs were $8
million, or 0.07 percent of average loans, in the first quarter 2015,
compared to $1 million, or 0.01 percent, in the fourth quarter 2014. As
a result, the provision for credit losses increased to $14 million in
the first quarter 2015.
-- Excluding the impact of a change in accounting presentation for a card
program ($44 million), noninterest income decreased $13 million in the
first quarter 2015, primarily reflecting decreases in customer
derivative income and commercial lending fees.
-- Excluding the impact of the change in accounting presentation for a card
program ($44 million), noninterest expenses decreased $3 million in the
first quarter 2015, primarily reflecting lower net occupancy and
consulting expenses, partially offset by a seasonal net increase in
compensation expense.
-- Capital remained solid at March 31, 2015, as evidenced by an estimated
common equity Tier 1 capital ratio of 10.43 percent and a tangible
common equity ratio of 9.97 percent. As previously announced, the
Federal Reserve completed its 2015 Comprehensive Capital Analysis and
Review (CCAR) in March 2015 and did not object to the capital
distributions contemplated in Comerica's capital plan. Basel III capital
rules became effective for Comerica on January 1, 2015.
-- Comerica repurchased approximately 1.4 million shares of common stock
during the first quarter 2015 under the equity repurchase program.
Together with dividends of $0.20 per share, $95 million was returned to
shareholders.
First Quarter 2015 Compared to First Quarter 2014
-- Average total loans increased $3.1 billion, or 7 percent, reflecting
increases in almost all lines of business.
-- Average total deposits increased $4.2 billion, or 8 percent, driven by
an increase in noninterest-bearing deposits of $3.5 billion, or 15
percent, and reflecting increases in all major lines of business.
-- Net income decreased $5 million, or 3 percent, primarily reflecting
revenue increases offset by higher outside processing expenses related
to revenue generating activities and increases in the provision for
credit losses and technology-related contract labor expenses.
((a) )Loans related to energy at March 31, 2015 included approximately $3.6 billion of outstanding loans in our Energy business line as well as approximately $750 million of loans in other lines of business to companies that have a sizable portion of their revenue related to energy or could be otherwise disproportionately negatively impacted by prolonged low oil and gas prices.
Net Interest Income
-------------------
(dollar amounts
in millions) 1st Qtr '15 4th Qtr '14 1st Qtr '14
--------------- ----------- ----------- -----------
Net interest
income $413 $415 $410
Net interest
margin 2.64% 2.57% 2.77%
Selected average
balances:
Total earning
assets $63,480 $64,453 $59,916
Total loans 48,151 47,361 45,075
Total investment
securities 9,907 9,365 9,282
Federal Reserve
Bank deposits 5,176 7,463 5,311
Total deposits 56,990 57,760 52,770
Total
noninterest-
bearing deposits 26,697 27,504 23,236
----------------- ------ ------ ------
-- Net interest income decreased $2 million to $413 million in the first
quarter 2015, compared to the fourth quarter 2014.
-- Interest on loans decreased $4 million, primarily reflecting the
impact of two fewer days in the first quarter (-$7 million), a
decrease in accretion of the purchase discount on the acquired loan
portfolio (-$6 million), lower loan prepayment fees and interest
recognized on nonaccrual loans (-$4 million), partially offset by
the impact of a negative residual value adjustment to assets in the
leasing portfolio in the fourth quarter 2014 (+$7 million) and the
benefit from an increase in average loan balances (+$6 million).
-- Interest on investment securities increased $2 million, reflecting
an increase in average balances (+$3 million), partially offset by
lower yields (-$1 million).
-- The net interest margin of 2.64 percent increased 7 basis points
compared to the fourth quarter 2014, primarily reflecting a decrease in
Federal Reserve Bank deposits (+9 basis points) and the impact of the
negative leasing residual value adjustment (+5 basis points), partially
offset by a decline in accretion of the purchase discount on the
acquired loan portfolio (-4 basis points) and lower loan prepayment fees
and nonaccrual interest recognized (-2 basis points).
-- Average earning assets decreased $1.0 billion, to $63.5 billion in the
first quarter 2015, compared to the fourth quarter 2014, primarily
reflecting a decrease of $2.3 billion in Federal Reserve Bank deposits,
partially offset by increases of $790 million in average loans and $542
million in average investment securities.
Noninterest Income
Effective January 1, 2015, contractual changes to a card program resulted in a change to the accounting presentation of the related revenues and expenses. The effect of the change was an increase of $44 million to both noninterest income and noninterest expenses in the first quarter 2015. Future quarters will be similarly impacted by this change.
Excluding the impact of this change, noninterest income decreased $13 million in the first quarter 2015, compared to $225 million for the fourth quarter 2014. The decrease primarily reflected decreases of $7 million in customer derivative income and $4 million in commercial lending fees from high fourth quarter 2014 levels.
Noninterest Expenses
Excluding the impact of the above-described change, noninterest expenses decreased $3 million in the first quarter 2015, compared to $419 million for the fourth quarter 2014. Net occupancy expense decreased $8 million, largely reflecting a $5 million real estate optimization charge incurred in the fourth quarter 2014 that was not repeated in the first quarter 2015 and several discrete first quarter items. Consulting fees, a component of other noninterest expenses, were $3 million lower. Salaries and benefits expense increased $8 million, primarily reflecting seasonal fluctuations including increases in share-based compensation expense and payroll taxes in the first quarter 2015, partially offset by lower healthcare costs and the impact of two fewer days in the quarter.
Credit Quality
"Credit quality continued to be strong in the first quarter," said Babb. "Net charge-offs remained low at $8 million, or 7 basis points. At this point in the cycle, our energy portfolio continues to perform well, with only modest negative credit migration. However, in light of the fact that oil and gas prices remain depressed, we expect that our criticized loans may increase from current very low levels as the year progresses. In fact, our robust allowance methodology resulted in an increase to our reserve for energy exposure, including an increase to the qualitative component, in the first quarter. Overall, we had a modest increase of $5 million in our total allowance for credit losses and an increase in the provision for credit losses to $14 million.
"Our energy customers are generally decreasing their expenditures and accessing the capital markets, among other actions, to help mitigate the impact of lower oil and gas prices on their businesses. We are actively engaged with our customers, assisting them as they navigate the cycle. Our deep understanding of the sector and our customers is a key component of how we have managed this business successfully for more than 30 years."
(dollar amounts in millions) 1st Qtr '15 4th Qtr '14 1st Qtr '14
--------------------------- ----------- ----------- -----------
Net credit-related charge-offs $8 $1 $12
Net credit-related charge-offs/
Average total loans 0.07% 0.01% 0.10%
Provision for credit losses $14 $2 $9
Nonperforming loans (a) 279 290 338
Nonperforming assets (NPAs) (a) 288 300 352
NPAs/Total loans and foreclosed
property 0.59% 0.62% 0.76%
Loans past due 90 days or more and
still accruing $12 $5 $10
Allowance for loan losses 601 594 594
Allowance for credit losses on
lending-related commitments (b) 39 41 37
--- --- ---
Total allowance for credit losses 640 635 631
Allowance for loan losses/Period-
end total loans 1.22% 1.22% 1.28%
Allowance for loan losses/
Nonperforming loans 216 205 176
-------------------------- --- --- ---
(a) Excludes loans acquired with credit
impairment.
(b) Included in "Accrued expenses and
other liabilities" on the
consolidated balance sheets.
-- Net charge-offs increased $7 million to $8 million, or 0.07 percent of
average loans, in the first quarter 2015, compared to $1 million, or
0.01 percent, in the fourth quarter 2014.
-- Criticized loans increased $174 million to $2.1 billion at March 31,
2015, compared to $1.9 billion at December 31, 2014, including an
increase of approximately $50 million in criticized loans related to
energy.
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $69.3 billion and $7.5 billion, respectively, at March 31, 2015, compared to $69.2 billion and $7.4 billion, respectively, at December 31, 2014.
There were approximately 178 million common shares outstanding at March 31, 2015. Share repurchases of $59 million (1.4 million shares) under the equity repurchase program, combined with dividends, returned 71 percent of first quarter 2015 net income to shareholders.
As previously announced, the Federal Reserve completed its 2015 CCAR review in March 2015 and did not object to Comerica's capital plan and capital distributions contemplated in the plan. Comerica's capital plan provides for up to $393 million in equity repurchases for the five-quarter period ending June 30, 2016. Comerica's capital plan further contemplates a 1-cent increase in the quarterly dividend to $0.21 per common share. The dividend proposal will be considered by Comerica's Board of Directors at its next scheduled meeting on April 28, 2015.
In July 2013, U.S. banking regulators issued a final rule for the U.S. adoption of the Basel III regulatory capital framework ("Basel III"). Basel III includes a more stringent definition of capital and introduces a new common equity Tier 1 capital requirement; sets forth two comprehensive methodologies for calculating risk-weighted assets, a standardized approach and an advanced approach; introduces a capital conservation buffer; and sets out minimum capital ratios and overall capital adequacy standards. As a banking organization subject to the standardized approach, Basel III became effective for Comerica on January 1, 2015. Certain deductions and adjustments to regulatory capital began phasing in on January 1, 2015 and will be fully implemented on January 1, 2018. The capital conservation buffer phases in beginning January 1, 2016 and will be fully implemented on January 1, 2019.
The estimated common equity Tier 1 capital ratio, reflective of transition provisions and excluding most elements of accumulated other comprehensive income ("AOCI"), was 10.43 percent at March 31, 2015. The estimated ratio under fully phased-in Basel III capital rules is not significantly different from the transitional ratio. Comerica's tangible common equity ratio was 9.97 percent at March 31, 2015, an increase of 12 basis points from December 31, 2014.
Full-Year 2015 Outlook
Management expectations for full-year 2015 compared to full-year 2014, assuming a continuation of the current economic and low-rate environment, are as follows:
-- Average full-year loan growth consistent with 2014, reflecting typical
seasonality throughout the year and continued focus on pricing and
structure discipline.
-- Net interest income relatively stable, assuming no rise in interest
rates, reflecting a decrease of about $30 million in purchase accounting
accretion, to about $6 million, and the impact of a continuing low rate
environment on asset yields, offset by earning asset growth.
-- Provision for credit losses higher, consistent with modest net
charge-offs and continued loan growth.
-- Noninterest income relatively stable, excluding the impact of the change
in accounting presentation for a card program. Stable noninterest income
reflects growth in fee income, particularly card fees and fiduciary
income, mostly offset by a decline in warrant income and regulatory
impacts on letter of credit and derivative income.
-- Noninterest expenses higher, excluding the impact of the change in
accounting presentation for a card program, reflecting increases in
technology, regulatory and pension expenses, as well as typical
inflationary pressures, with continued focus on driving efficiencies for
the long term.
-- Income tax expense to approximate 33 percent of pre-tax income.
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, 2015 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2015 results compared to fourth quarter 2014.
The following table presents net income (loss) by business segment.
(dollar amounts
in millions) 1st Qtr '15 4th Qtr '14 1st Qtr '14
--------------- ----------- ----------- -----------
Business Bank $189 85% $214 86% $200 86%
Retail Bank 17 8 12 5 9 4
Wealth Management 16 7 23 9 24 10
----------------- --- --- --- --- --- ---
222 100% 249 100% 233 100%
Finance (89) (100) (92)
Other (a) 1 - (2)
-------- --- --- ---
Total $134 $149 $139
----- ---- ---- ----
(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
'15 '14 '14
--------------------------- -------- -------- --------
Net interest income (FTE) $370 $387 $371
Provision for credit losses 25 10 16
Noninterest income 142 104 91
Noninterest expenses 200 148 146
Net income 189 214 200
Net credit-related charge-
offs 9 - 11
Selected average balances:
Assets 38,794 38,039 35,896
Loans 37,763 37,034 34,926
Deposits 30,169 30,925 27,023
-------- ------ ------ ------
-- Average loans increased $729 million, primarily reflecting increases in
Energy, Technology and Life Sciences, National Dealer Services and
general Middle Market.
-- Average deposits decreased $756 million, primarily reflecting a decrease
in Corporate Banking noninterest-bearing deposits.
-- Net interest income decreased $17 million, primarily due to the decrease
in average deposits and a lower funds transfer pricing (FTP) crediting
rate. The benefit from an increase in average loan balances and the
impact of a negative residual value adjustment to assets in the leasing
portfolio in the fourth quarter 2014 were largely offset by a decrease
in purchase accounting accretion and two fewer days in the quarter.
-- The allowance for credit losses increased $6 million, primarily
reflecting the impact of loan growth and increased reserves for loans
related to energy, including a qualitative component, partially offset
by improvements in credit quality in the remainder of the portfolio. The
provision for credit losses increased $15 million.
-- Excluding the impact of the change in accounting presentation for
certain card programs as described previously, noninterest income
decreased $6 million, primarily due to decreases in customer derivative
income and commercial lending fees from high fourth quarter 2014 levels.
-- Excluding the impact of the change in accounting presentation for
certain card programs as described previously, noninterest expenses
increased $8 million, primarily due to an increase in allocated
corporate overhead expenses and a seasonal net increase in salaries and
benefits expense.
Retail Bank
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'15 '14 '14
--------------------------- -------- -------- --------
Net interest income (FTE) $151 $152 $147
Provision for credit losses (8) (4) 2
Noninterest income 43 44 41
Noninterest expenses 176 182 173
Net income 17 12 9
Net credit-related charge-
offs - 3 4
Selected average balances:
Assets 6,229 6,155 6,061
Loans 5,554 5,482 5,388
Deposits 22,378 22,274 21,595
-------- ------ ------ ------
-- Average loans increased $72 million, primarily due to increases in Small
Business and consumer loans in Retail Banking.
-- Average deposits increased $104 million, primarily reflecting an
increase in money market and interest-bearing checking deposits,
partially offset by decreases in time deposits and noninterest-bearing
deposits.
-- The provision for credit losses decreased $4 million, primarily due to
credit quality improvements in Small Business.
-- Noninterest expenses decreased $6 million, primarily due to a decrease
in occupancy expense resulting from a real estate optimization charge
incurred in the fourth quarter 2014 that was not repeated in the first
quarter 2015.
Wealth Management
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'15 '14 '14
--------------------------- -------- -------- --------
Net interest income (FTE) $43 $47 $45
Provision for credit losses (1) (9) (8)
Noninterest income 58 61 60
Noninterest expenses 77 80 76
Net income 16 23 24
Net credit-related charge-
offs (recoveries) (1) (2) (3)
Selected average balances:
Assets 5,029 5,034 4,930
Loans 4,834 4,845 4,761
Deposits 3,996 4,093 3,582
-------- ----- ----- -----
-- Average deposits decreased $97 million, primarily reflecting a decrease
in noninterest-bearing deposits.
-- Net interest income decreased $4 million, primarily due to a decrease in
FTP credits, largely due to the decrease in average deposits, and two
fewer days in the quarter.
-- The provision for credit losses increased $8 million, primarily
reflecting a large benefit to the provision recognized in the fourth
quarter 2014 from a reduction in reserves due to the payoff of a single
large criticized credit.
-- Noninterest income decreased $3 million, primarily reflecting a
securities loss in the first quarter.
-- Noninterest expenses decreased $3 million, reflecting small decreases in
several categories.
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 March 31, 2015 and are presented on a fully taxable equivalent (FTE) basis.
The following table presents net income (loss) by market segment.
(dollar
amounts
in
millions) 1st Qtr '15 4th Qtr '14 1st Qtr '14
---------- ----------- ----------- -----------
Michigan $73 33% $79 32% $66 28%
California 73 33 83 33 63 27
Texas 32 14 40 16 48 21
Other
Markets 44 20 47 19 56 24
-------- --- --- --- --- --- ---
222 100% 249 100% 233 100%
Finance &
Other (a) (88) (100) (94)
---------- --- ---- ---
Total $134 $149 $139
----- ---- ---- ----
(a) Includes items not directly
associated with the
geographic markets.
-- Average loans increased $416 million in California, $208 million in
Texas (primarily Energy) and $81 million in Michigan (primarily National
Dealer Services). The increase in California was led by Technology and
Life Sciences, general Middle Market and National Dealer Services.
-- Average deposits decreased $1.2 billion in California and increased $185
million and $180 million in Texas and Michigan, respectively. The
decrease in California was primarily due to decreases in
noninterest-bearing deposits in Corporate Banking, general Middle
Market, Technology and Life Sciences and Private Banking.
-- Net interest income decreased $16 million and $8 million in California
and Texas, respectively, and increased $4 million in Michigan. The
decrease in California primarily reflected a decrease in FTP credits,
largely due to the decrease in average deposits, partially offset by the
benefit from an increase in average loans. The decrease in Texas was
primarily the result of a decrease in the accretion of the purchase
discount on the acquired loan portfolio. The increase in Michigan
primarily reflected the impact of a negative leasing residual adjustment
in the fourth quarter. Net interest income in all three markets
reflected the impact of two fewer days in the first quarter.
-- The allowance for credit losses increased $3 million in Michigan, $7
million in California and $1 million in Texas. In all markets, the
changes in reserves primarily reflected the impact of loan growth and
increased reserves for loans related to energy, including a qualitative
component, partially offset by improvements in credit quality in the
remainder of the portfolio. Net charge-offs increased $8 million in
Michigan, remained stable in California and increased $1 million in
Texas. The provision for credit losses increased $11 million in
Michigan, $7 million in California and $3 million in Texas.
-- Noninterest income decreased $8 million and $2 million in Michigan and
Texas, respectively, and was unchanged in California. The decrease in
Michigan was primarily due to decreases in customer derivative income
and commercial lending fees. The decrease in Texas was primarily due to
a decrease in commercial lending fees.
-- Noninterest expenses decreased $2 million in both Michigan and
California, and increased $1 million in Texas.
Michigan Market
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '15 '14 '14
------------------ -------- -------- --------
Net interest income (FTE) $177 $173 $183
Provision for credit
losses (8) (19) 3
Noninterest income 81 89 84
Noninterest expenses 155 157 161
Net income 73 79 66
Net credit-related
charge-offs
(recoveries) 3 (5) -
Selected average balances:
Assets 13,736 13,605 13,819
Loans 13,223 13,142 13,473
Deposits 21,710 21,530 20,642
-------- ------ ------ ------
California Market
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '15 '14 '14
------------------ -------- -------- --------
Net interest income (FTE) $176 $192 $172
Provision for credit
losses (3) (10) 11
Noninterest income 38 38 34
Noninterest expenses 100 102 96
Net income 73 83 63
Net credit-related
charge-offs 1 1 10
Selected average balances:
Assets 16,461 16,035 15,133
Loans 16,193 15,777 14,824
Deposits 16,837 18,028 14,782
-------- ------ ------ ------
Texas Market
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '15 '14 '14
------------------ -------- -------- --------
Net interest income (FTE) $131 $139 $136
Provision for credit
losses 21 18 6
Noninterest income 36 38 34
Noninterest expenses 96 95 90
Net income 32 40 48
Net credit-related
charge-offs 3 2 6
Selected average balances:
Assets 12,193 12,003 11,070
Loans 11,535 11,327 10,364
Deposits 11,010 10,825 10,875
-------- ------ ------ ------
Conference Call and Webcast
Comerica will host a conference call to review first quarter 2015 financial results at 7 a.m. CT Friday, April 17, 2015. Interested parties may access the conference call by calling (877) 523-5249 or (210) 591-1147 (event ID No. 99335770). 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," "projects," "models" 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 changes in interest rates; changes in regulation or oversight; Comerica's ability to maintain adequate sources of funding and liquidity; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers, including the energy industry; operational difficulties, failure of technology infrastructure or information security incidents; reliance on other companies to provide certain key components of business infrastructure; factors impacting noninterest expenses which are beyond Comerica's control; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; changes in Comerica's credit rating; unfavorable developments concerning credit quality; the interdependence of financial service companies; the implementation of Comerica's strategies and business initiatives; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; competitive product and pricing pressures among financial institutions within Comerica's markets; changes in customer behavior; any future strategic acquisitions or divestitures; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings or determinations; the effectiveness of methods of reducing risk exposures; the effects of terrorist activities and other hostilities; the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; changes in accounting standards and the critical nature of Comerica's accounting policies. Comerica cautions that the foregoing list of factors is not exclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to "Item 1A. Risk Factors" beginning on page 12 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2014. 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) 2015 2014 2014
----------------------------------- ---- ---- ----
PER COMMON SHARE AND COMMON STOCK DATA
Diluted net income $0.73 $0.80 $0.73
Cash dividends declared 0.20 0.20 0.19
Average diluted shares (in thousands) 182,270 183,728 186,701
------------------------------------ ------- ------- -------
KEY RATIOS
Return on average common shareholders' equity 7.20% 7.96% 7.68%
Return on average assets 0.78 0.86 0.86
Common equity tier 1 risk-based capital ratio (a) (b) 10.43 n/a n/a
Tier 1 common risk-based capital ratio (c) n/a 10.50 10.58
Tier 1 risk-based capital ratio (a) (b) 10.43 10.50 10.58
Total risk-based capital ratio (a) (b) 12.39 12.51 13.00
Leverage ratio (a) (b) 10.53 10.35 10.85
Tangible common equity ratio (c) 9.97 9.85 10.20
------------------------------- ---- ---- -----
AVERAGE BALANCES
Commercial loans $31,090 $30,391 $28,362
Real estate construction loans 1,938 1,920 1,827
Commercial mortgage loans 8,581 8,609 8,770
Lease financing 797 818 848
International loans 1,512 1,455 1,301
Residential mortgage loans 1,856 1,821 1,724
Consumer loans 2,377 2,347 2,243
----- ----- -----
Total loans 48,151 47,361 45,075
Earning assets 63,480 64,453 59,916
Total assets 68,739 69,311 64,708
Noninterest-bearing deposits 26,697 27,504 23,236
Interest-bearing deposits 30,293 30,256 29,534
------ ------ ------
Total deposits 56,990 57,760 52,770
Common shareholders' equity 7,453 7,518 7,229
--------------------------- ----- ----- -----
NET INTEREST INCOME (fully taxable equivalent basis)
Net interest income $414 $416 $411
Net interest margin 2.64% 2.57% 2.77%
------------------- ---- ---- ----
CREDIT QUALITY
Total nonperforming assets $288 $300 $352
Loans past due 90 days or more and still accruing 12 5 10
Net loan charge-offs 8 1 12
Allowance for loan losses 601 594 594
Allowance for credit losses on lending-related commitments 39 41 37
--- --- ---
Total allowance for credit losses 640 635 631
Allowance for loan losses as a percentage of total loans 1.22% 1.22% 1.28%
Net loan charge-offs as a percentage of average total loans (d) 0.07 0.01 0.10
Nonperforming assets as a percentage of total loans and
foreclosed property 0.59 0.62 0.76
Allowance for loan losses as a percentage of total nonperforming
loans 216 205 176
---------------------------------------------------------------- --- --- ---
(a) Basel III rules became effective
on January 1, 2015, with
transitional provisions. All
prior period data is based on
Basel I rules.
(b) March 31, 2015 ratios are
estimated.
(c) See Reconciliation of Non-GAAP
Financial Measures.
(d) Lending-related commitment
charge-offs were zero in all
periods presented.
n/a - not applicable.
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
March 31, December 31, March 31,
(in millions, except share data) 2015 2014 2014
------------------------------- ---- ---- ----
(unaudited) (unaudited)
ASSETS
Cash and due from banks $1,170 $1,026 $1,186
Interest-bearing deposits with banks 4,792 5,045 4,434
Other short-term investments 101 99 105
Investment securities available-for-
sale 8,214 8,116 9,487
Investment securities held-to-
maturity 1,871 1,935 -
Commercial loans 32,091 31,520 29,774
Real estate construction loans 1,917 1,955 1,847
Commercial mortgage loans 8,558 8,604 8,801
Lease financing 792 805 849
International loans 1,433 1,496 1,250
Residential mortgage loans 1,859 1,831 1,751
Consumer loans 2,422 2,382 2,217
-------------- ----- ----- -----
Total loans 49,072 48,593 46,489
Less allowance for loan losses (601) (594) (594)
------------------------------ ---- ---- ----
Net loans 48,471 47,999 45,895
Premises and equipment 531 532 583
Accrued income and other assets 4,186 4,438 3,991
------------------------------- ----- ----- -----
Total assets $69,336 $69,190 $65,681
------------ ------- ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $27,394 $27,224 $23,955
Money market and interest-bearing
checking deposits 23,727 23,954 22,485
Savings deposits 1,817 1,752 1,742
Customer certificates of deposit 4,497 4,421 5,099
Foreign office time deposits 135 135 469
---------------------------- --- --- ---
Total interest-bearing deposits 30,176 30,262 29,795
------------------------------- ------ ------ ------
Total deposits 57,570 57,486 53,750
Short-term borrowings 80 116 160
Accrued expenses and other
liabilities 1,500 1,507 954
Medium- and long-term debt 2,686 2,679 3,534
-------------------------- ----- ----- -----
Total liabilities 61,836 61,788 58,398
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares 1,141 1,141 1,141
Capital surplus 2,188 2,188 2,182
Accumulated other comprehensive loss (370) (412) (325)
Retained earnings 6,841 6,744 6,414
Less cost of common stock in treasury
-50,114,399 shares at 3/31/15,
49,146,225 shares at 12/31/14, and
46,492,524 shares at 3/31/14 (2,300) (2,259) (2,129)
------------------------------------- ------ ------ ------
Total shareholders' equity 7,500 7,402 7,283
-------------------------- ----- ----- -----
Total liabilities and shareholders'
equity $69,336 $69,190 $65,681
----------------------------------- ------- ------- -------
CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
First Fourth Third Second First First Quarter 2015 Compared To:
-------------------------------
Quarter Quarter Quarter Quarter Quarter Fourth Quarter 2014 First Quarter 2014
(in millions, except per share data) 2015 2014 2014 2014 2014 Amount Percent Amount Percent
----------------------------------- ---- ---- ---- ---- ---- ------ ------- ------ -------
INTEREST INCOME
Interest and fees on loans $379 $383 $381 $385 $376 $(4) (1)% $3 1%
Interest on investment securities 53 51 52 53 55 2 4 (2) (3)
Interest on short-term investments 3 4 3 3 4 (1) (28) (1) -
---------------------------------- --- --- --- --- --- --- --- --- ---
Total interest income 435 438 436 441 435 (3) (1) - -
INTEREST EXPENSE
Interest on deposits 11 12 11 11 11 (1) (4) - -
Interest on medium- and long-term debt 11 11 11 14 14 - - (3) (14)
-------------------------------------- --- --- --- --- --- --- --- --- ---
Total interest expense 22 23 22 25 25 (1) (2) (3) (9)
---------------------- --- --- --- --- --- --- --- --- ---
Net interest income 413 415 414 416 410 (2) (1) 3 1
Provision for credit losses 14 2 5 11 9 12 N/M 5 52
--------------------------- --- --- --- --- --- --- --- --- ---
Net interest income after provision for credit losses 399 413 409 405 401 (14) (4) (2) -
NONINTEREST INCOME
Service charges on deposit accounts 55 53 54 54 54 2 4 1 2
Fiduciary income 48 47 44 45 44 1 2 4 8
Commercial lending fees 25 29 26 23 20 (4) (14) 5 24
Card fees 68 24 23 22 23 44 N/M 45 N/M
Letter of credit fees 13 14 14 15 14 (1) (6) (1) (9)
Bank-owned life insurance 9 8 11 11 9 1 1 - -
Foreign exchange income 10 10 9 12 9 - - 1 11
Brokerage fees 4 4 4 4 5 - - (1) (7)
Net securities (losses) gains (2) - (1) - 1 (2) N/M (3) N/M
Other noninterest income 26 36 31 34 29 (10) (25) (3) (8)
------------------------ --- --- --- --- --- --- --- --- ---
Total noninterest income 256 225 215 220 208 31 14 48 23
NONINTEREST EXPENSES
Salaries and benefits expense 253 245 248 240 247 8 3 6 3
Net occupancy expense 38 46 46 39 40 (8) (17) (2) (6)
Equipment expense 13 14 14 15 14 (1) (4) (1) (7)
Outside processing fee expense 78 33 31 30 28 45 N/M 50 N/M
Software expense 23 23 25 25 22 - - 1 6
Litigation-related expense 1 - (2) 3 3 1 N/M (2) (66)
FDIC insurance expense 9 8 9 8 8 1 11 1 19
Advertising expense 6 7 5 5 6 (1) (17) - -
Gain on debt redemption - - (32) - - - - - -
Other noninterest expenses 39 43 53 39 38 (4) (9) 1 3
-------------------------- --- --- --- --- --- --- --- --- ---
Total noninterest expenses 460 419 397 404 406 41 10 54 13
-------------------------- --- --- --- --- --- --- --- --- ---
Income before income taxes 195 219 227 221 203 (24) (11) (8) (4)
Provision for income taxes 61 70 73 70 64 (9) (14) (3) (5)
-------------------------- --- --- --- --- --- --- --- --- ---
NET INCOME 134 149 154 151 139 (15) (10) (5) (3)
Less income allocated to participating securities 2 1 2 2 2 1 N/M - -
------------------------------------------------- --- --- --- --- --- --- --- --- ---
Net income attributable to common shares $132 $148 $152 $149 $137 $(16) (10)% $(5) (3)%
---------------------------------------- ---- ---- ---- ---- ---- ---- ---- --- ---
Earnings per common share:
Basic $0.75 $0.83 $0.85 $0.83 $0.76 $(0.08) (10)% $(0.01) (1)%
Diluted 0.73 0.80 0.82 0.80 0.73 (0.07) (9) - -
Comprehensive income 176 54 141 172 205 122 N/M (29) (14)
Cash dividends declared on common stock 36 36 36 36 35 - - 1 3
Cash dividends declared per common share 0.20 0.20 0.20 0.20 0.19 - - 0.01 5
---------------------------------------- ---- ---- ---- ---- ---- --- --- ---- ---
N/M - Not Meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
2015 2014
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
------------ ------- ------- ------- ------- -------
Balance at beginning of
period $594 $592 $591 $594 $598
Loan charge-offs:
Commercial 19 8 13 19 19
Commercial mortgage - 2 7 5 8
International 2 6 - - -
Residential mortgage - 1 1 - -
Consumer 2 3 3 4 3
-------- --- --- --- --- ---
Total loan charge-offs 23 20 24 28 30
Recoveries on loans
previously charged-off:
Commercial 9 6 6 11 11
Real estate construction - 2 1 1 -
Commercial mortgage 3 10 12 3 3
Lease financing - - - - 2
Residential mortgage 1 - 1 3 -
Consumer 2 1 1 1 2
-------- --- --- --- --- ---
Total recoveries 15 19 21 19 18
---------------- --- --- --- --- ---
Net loan charge-offs 8 1 3 9 12
Provision for loan losses 16 4 4 6 8
Foreign currency
translation adjustment (1) (1) - - -
----------------------- --- --- --- --- ---
Balance at end of period $601 $594 $592 $591 $594
------------------------ ---- ---- ---- ---- ----
Allowance for loan losses
as a percentage of total
loans 1.22% 1.22% 1.24% 1.23% 1.28%
Net loan charge-offs as
a percentage of average
total loans 0.07 0.01 0.03 0.08 0.10
------------------------ ---- ---- ---- ---- ----
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited)
Comerica Incorporated and Subsidiaries
2015 2014
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
------------ ------- ------- ------- ------- -------
Balance at
beginning of
period $41 $43 $42 $37 $36
Add: Provision
for credit
losses on
lending-related
commitments (2) (2) 1 5 1
---------------- --- --- --- --- ---
Balance at end of
period $39 $41 $43 $42 $37
----------------- --- --- --- --- ---
Unfunded lending-
related
commitments sold $1 $ - $9 $ - $ -
----------------- --- --- --- --- --- --- --- ---
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2015 2014
---- ----
(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 $113 $109 $93 $72 $54
Real estate construction 1 2 18 19 19
Commercial mortgage 82 95 144 156 162
International 1 - - - -
Total nonaccrual business
loans 197 206 255 247 235
Retail loans:
Residential mortgage 37 36 42 45 48
Consumer:
Home equity 31 30 31 32 32
Other consumer 1 1 1 2 2
-------------- --- --- --- --- ---
Total consumer 32 31 32 34 34
-------------- --- --- --- --- ---
Total nonaccrual retail
loans 69 67 74 79 82
----------------------- --- --- --- --- ---
Total nonaccrual loans 266 273 329 326 317
Reduced-rate loans 13 17 17 21 21
------------------ --- --- --- --- ---
Total nonperforming loans
(a) 279 290 346 347 338
Foreclosed property 9 10 11 13 14
------------------- --- --- --- --- ---
Total nonperforming assets
(a) $288 $300 $357 $360 $352
-------------------------- ---- ---- ---- ---- ----
Nonperforming loans as a
percentage of total loans 0.57% 0.60% 0.73% 0.73% 0.73%
Nonperforming assets as a
percentage of total loans 0.59 0.62 0.75 0.75 0.76
and foreclosed property
Allowance for loan losses as
a percentage of total 216 205 171 170 176
nonperforming loans
Loans past due 90 days or
more and still accruing $12 $5 $13 $7 $10
------------------------- --- --- --- --- ---
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at
beginning of period $273 $329 $326 $317 $350
Loans transferred to
nonaccrual (b) 39 41 54 53 19
Nonaccrual business loan
gross charge-offs (c) (21) (16) (20) (24) (27)
Loans transferred to accrual
status (b) (4) (18) - - -
Nonaccrual business loans
sold (d) (2) (24) (3) (6) (3)
Payments/Other (e) (19) (39) (28) (14) (22)
------------------ --- --- --- --- ---
Nonaccrual loans at end of
period $266 $273 $329 $326 $317
-------------------------- ---- ---- ---- ---- ----
(a) Excludes loans acquired with credit impairment.
(b) Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(c) Analysis of gross loan charge-offs:
Nonaccrual business loans $21 $16 $20 $24 $27
Performing criticized loans - - - - -
Consumer and residential
mortgage loans 2 4 4 4 3
--- --- --- --- ---
Total gross loan charge-offs $23 $20 $24 $28 $30
--- --- --- --- ---
(d) Analysis of loans sold:
Nonaccrual business loans $2 $24 $3 $6 $3
Performing criticized loans 7 5 - 8 6
--- --- --- --- ---
Total criticized loans sold $9 $29 $3 $14 $9
--- --- --- --- ---
(e) 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, 2015 December 31, 2014 March 31, 2014
-------------- ----------------- --------------
Average Average Average Average Average Average
(dollar amounts in millions) Balance Interest Rate Balance Interest Rate Balance Interest Rate
--------------------------- ------- -------- ---- ------- -------- ---- ------- -------- ----
Commercial loans $31,090 $235 3.06% $30,391 $238 3.11% $28,362 $221 3.17%
Real estate construction loans 1,938 16 3.36 1,920 16 3.40 1,827 15 3.40
Commercial mortgage loans 8,581 73 3.44 8,609 81 3.70 8,770 86 3.97
Lease financing 797 6 3.05 818 (1) (0.43) 848 9 4.07
International loans 1,512 14 3.71 1,455 13 3.68 1,301 12 3.68
Residential mortgage loans 1,856 17 3.76 1,821 18 3.86 1,724 17 3.86
Consumer loans 2,377 19 3.21 2,347 19 3.20 2,243 17 3.16
-------------- ----- --- ---- ----- --- ---- ----- --- ----
Total loans (a) 48,151 380 3.19 47,361 384 3.22 45,075 377 3.39
Mortgage-backed securities (b) 9,071 51 2.26 8,954 50 2.27 8,911 55 2.42
Other investment securities 836 2 1.10 411 1 0.49 371 - 0.43
--------------------------- --- --- ---- --- --- ---- --- --- ----
Total investment securities (b) 9,907 53 2.16 9,365 51 2.19 9,282 55 2.34
Interest-bearing deposits with banks 5,323 3 0.26 7,622 4 0.26 5,448 4 0.26
Other short-term investments 99 - 1.11 105 - 0.48 111 - 0.66
---------------------------- --- --- ---- --- --- ---- --- --- ----
Total earning assets 63,480 436 2.78 64,453 439 2.71 59,916 436 2.94
Cash and due from banks 1,027 937 913
Allowance for loan losses (601) (597) (603)
Accrued income and other assets 4,833 4,518 4,482
----- ----- -----
Total assets $68,739 $69,311 $64,708
------- ------- -------
Money market and interest-bearing checking
deposits $23,960 6 0.11 $23,841 7 0.11 $22,261 6 0.11
Savings deposits 1,786 - 0.03 1,771 - 0.03 1,700 - 0.03
Customer certificates of deposit 4,423 4 0.37 4,510 4 0.37 5,109 5 0.36
Foreign office time deposits 124 1 1.46 134 1 1.74 464 - 0.42
---------------------------- --- --- ---- --- --- ---- --- --- ----
Total interest-bearing deposits 30,293 11 0.15 30,256 12 0.15 29,534 11 0.15
Short-term borrowings 110 - 0.06 172 - 0.04 185 - 0.03
Medium- and long-term debt 2,690 11 1.72 2,678 11 1.71 3,545 14 1.53
-------------------------- ----- --- ---- ----- --- ---- ----- --- ----
Total interest-bearing sources 33,093 22 0.27 33,106 23 0.27 33,264 25 0.30
Noninterest-bearing deposits 26,697 27,504 23,236
Accrued expenses and other liabilities 1,496 1,183 979
Total shareholders' equity 7,453 7,518 7,229
----- ----- -----
Total liabilities and shareholders' equity $68,739 $69,311 $64,708
------- ------- -------
Net interest income/rate spread (FTE) $414 2.51 $416 2.44 $411 2.64
---- ---- ----
FTE adjustment $1 $1 $1
Impact of net noninterest-bearing sources of
funds 0.13 0.13 0.13
-------------------------------------------- ---- ---- ----
Net interest margin (as a percentage of average
earning assets) (FTE) (a) 2.64% 2.57% 2.77%
----------------------------------------------- ---- ---- ----
(a) Accretion of the purchase
discount on the acquired loan
portfolio of $3 million, $9
million and $12 million in the
first quarter of 2015, the
fourth quarter 2014 and the
first quarter 2014,
respectively, increased the net
interest margin by 2 basis
points, 5 basis points and 8
basis points in each respective
period.
(b) Includes investment securities
available-for-sale and
investment securities held-to-
maturity.
CONSOLIDATED STATISTICAL DATA (unaudited)
Comerica Incorporated and Subsidiaries
March 31, December 31, September 30, June 30, March 31,
(in millions, except per share data) 2015 2014 2014 2014 2014
----------------------------------- ---- ---- ---- ---- ----
Commercial loans:
Floor plan $3,544 $3,790 $3,183 $3,576 $3,437
Other 28,547 27,730 27,576 27,410 26,337
----- ------ ------ ------ ------ ------
Total commercial loans 32,091 31,520 30,759 30,986 29,774
Real estate construction loans 1,917 1,955 1,992 1,939 1,847
Commercial mortgage loans 8,558 8,604 8,603 8,747 8,801
Lease financing 792 805 805 822 849
International loans 1,433 1,496 1,429 1,352 1,250
Residential mortgage loans 1,859 1,831 1,797 1,775 1,751
Consumer loans:
Home equity 1,678 1,658 1,634 1,574 1,533
Other consumer 744 724 689 687 684
-------------- --- --- --- --- ---
Total consumer loans 2,422 2,382 2,323 2,261 2,217
-------------------- ----- ----- ----- ----- -----
Total loans $49,072 $48,593 $47,708 $47,882 $46,489
----------- ------- ------- ------- ------- -------
Goodwill $635 $635 $635 $635 $635
Core deposit intangible 12 13 14 14 15
Other intangibles 3 2 1 1 1
Common equity tier 1 capital (a) (b) 7,230 n/a n/a n/a n/a
Tier 1 common capital (c) n/a 7,169 7,105 7,027 6,962
Risk-weighted assets (a) (b) 69,314 68,273 67,106 66,911 65,788
Common equity tier 1 risk-based capital ratio (a) (b) 10.43% n/a n/a n/a n/a
Tier 1 common risk-based capital ratio (c) n/a 10.50% 10.59% 10.50% 10.58%
Tier 1 risk-based capital ratio (a) (b) 10.43 10.50 10.59 10.50 10.58
Total risk-based capital ratio (a) (b) 12.39 12.51 12.83 12.52 13.00
Leverage ratio (a) (b) 10.53 10.35 10.79 10.93 10.85
Tangible common equity ratio (c) 9.97 9.85 9.94 10.39 10.20
Common shareholders' equity per share of common stock $42.12 $41.35 $41.26 $40.72 $40.09
Tangible common equity per share of common stock (c) 38.47 37.72 37.65 37.12 36.50
Market value per share for the quarter:
High 47.94 50.14 52.72 52.60 53.50
Low 40.09 42.73 48.33 45.34 43.96
Close 45.13 46.84 49.86 50.16 51.80
Quarterly ratios:
Return on average common shareholders' equity 7.20% 7.96% 8.29% 8.27% 7.68%
Return on average assets 0.78 0.86 0.93 0.93 0.86
Efficiency ratio (d) 68.55 65.26 62.87 63.35 65.79
Number of banking centers 482 481 481 481 483
Number of employees - full time equivalent 8,831 8,876 8,913 8,901 8,907
------------------------------------------ ----- ----- ----- ----- -----
(a) Basel III
rules became
effective
January 1,
2015, with
transitional
provisions.
All prior
period data
is based on
Basel I
rules.
(b) March 31, 2015 amounts and ratios
are estimated.
(c) See Reconciliation of Non-GAAP
Financial Measures.
(d) Noninterest expenses as a
percentage of the sum of net
interest income (FTE) and
noninterest income excluding net
securities gains (losses).
n/a - not applicable.
PARENT COMPANY ONLY BALANCE SHEETS (unaudited)
Comerica Incorporated
March 31, December 31, March 31,
(in
millions,
except
share
data) 2015 2014 2014
---------- ---- ---- ----
ASSETS
Cash and
due from
subsidiary
bank $5 $ - $5
Short-
term
investments
with
subsidiary
bank 1,139 1,133 531
Other
short-
term
investments 95 94 97
Investment
in
subsidiaries,
principally
banks 7,479 7,411 7,276
Premises
and
equipment 2 2 3
Other
assets 161 142 156
------- --- --- ---
Total
assets $8,881 $8,782 $8,068
------- ------ ------ ------
LIABILITIES
AND
SHAREHOLDERS'
EQUITY
Medium-
and
long-
term
debt $1,219 $1,212 $614
Other
liabilities 162 168 171
------------ --- --- ---
Total
liabilities 1,381 1,380 785
Common
stock -
$5 par
value:
Authorized
-
325,000,000
shares
Issued -
228,164,824
shares 1,141 1,141 1,141
Capital
surplus 2,188 2,188 2,182
Accumulated
other
comprehensive
loss (370) (412) (325)
Retained
earnings 6,841 6,744 6,414
Less cost
of shares
common at
stock in 12/31/14
treasury and
- 46,492,524
50,114,339 shares
shares at
at 3/31/14
3/31/15,
49,146,225 (2,300) (2,259) (2,129)
-------------- ------ ------ ------
Total
shareholders'
equity 7,500 7,402 7,283
-------------- ----- ----- -----
Total
liabilities
and
shareholders'
equity $8,881 $8,782 $8,068
-------------- ------ ------ ------
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, 2013 182.3 $1,141 $2,179 $(391) $6,318 $(2,097) $7,150
Net income - - - - 139 - 139
Other comprehensive income, net of tax - - - 66 - - 66
Cash dividends declared on common stock ($0.19 per share) - - - - (35) - (35)
Purchase of common stock (1.7) - - - - (80) (80)
Net issuance of common stock under employee stock plans 1.1 - (11) - (8) 48 29
Share-based compensation - - 14 - - - 14
BALANCE AT MARCH 31, 2014 181.7 $1,141 $2,182 $(325) $6,414 $(2,129) $7,283
------------------------- ----- ------ ------ ----- ------ ------- ------
BALANCE AT DECEMBER 31, 2014 179.0 $1,141 $2,188 $(412) $6,744 $(2,259) $7,402
Net income - - - - 134 - 134
Other comprehensive income, net of tax - - - 42 - - 42
Cash dividends declared on common stock ($0.20 per share) - - - - (36) - (36)
Purchase of common stock (1.5) - - - - (66) (66)
Net issuance of common stock under employee stock plans 0.6 - (16) - (2) 25 7
Share-based compensation - - 16 - - - 16
Other - - - - 1 - 1
BALANCE AT MARCH 31, 2015 178.1 $1,141 $2,188 $(370) $6,841 $(2,300) $7,500
------------------------- ----- ------ ------ ----- ------ ------- ------
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in millions) Business Retail Wealth
Three Months Ended March 31, 2015 Bank Bank Management Finance Other Total
--------------------------------- ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest income (expense) (FTE) $370 $151 $43 $(152) $2 $414
Provision for credit losses 25 (8) (1) - (2) 14
Noninterest income 142 43 58 12 1 256
Noninterest expenses 200 176 77 2 5 460
Provision (benefit) for income taxes (FTE) 98 9 9 (53) (1) 62
--- --- --- --- ---
Net income (loss) $189 $17 $16 $(89) $1 $134
---- --- --- ---- --- ----
Net credit-related charge-offs (recoveries) $9 $ - $(1) $ - $ - $8
Selected average balances:
Assets $38,794 $6,229 $5,029 $12,140 $6,547 $68,739
Loans 37,763 5,554 4,834 - - 48,151
Deposits 30,169 22,378 3,996 170 277 56,990
Statistical data:
Return on average assets (a) 1.95% 0.29% 1.29% N/M N/M 0.78%
Efficiency ratio (b) 39.20 90.92 74.58 N/M N/M 68.55
------------------- ----- ----- ----- --- --- -----
Business Retail Wealth
Three Months Ended December 31, 2014 Bank Bank Management Finance Other Total
------------------------------------ ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest income (expense) (FTE) $387 $152 $47 $(177) $7 $416
Provision for credit losses 10 (4) (9) - 5 2
Noninterest income 104 44 61 16 - 225
Noninterest expenses 148 182 80 3 6 419
Provision (benefit) for income taxes (FTE) 119 6 14 (64) (4) 71
--- --- --- --- ---
Net income (loss) $214 $12 $23 $(100) $ - $149
---- --- --- ----- --- --- ----
Net credit-related charge-offs (recoveries) $ - $3 $(2) $ - $ - $1
Selected average balances:
Assets $38,039 $6,155 $5,034 $12,222 $7,861 $69,311
Loans 37,034 5,482 4,845 - - 47,361
Deposits 30,925 22,274 4,093 195 273 57,760
Statistical data:
Return on average assets (a) 2.26% 0.20% 1.79% N/M N/M 0.86%
Efficiency ratio (b) 30.13 92.61 74.48 N/M N/M 65.26
------------------- ----- ----- ----- --- --- -----
Business Retail Wealth
Three Months Ended March 31, 2014 Bank Bank Management Finance Other Total
--------------------------------- ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest income (expense) (FTE) $371 $147 $45 $(158) 6 $411
Provision for credit losses 16 2 (8) - (1) 9
Noninterest income 91 41 60 14 2 208
Noninterest expenses 146 173 76 3 8 406
Provision (benefit) for income taxes (FTE) 100 4 13 (55) 3 65
--- --- --- --- --- ---
Net income (loss) $200 $9 $24 $(92) $(2) $139
---- --- --- ---- --- ----
Net credit-related charge-offs (recoveries) $11 $4 $(3) $ - $ - $12
Selected average balances:
Assets $35,896 $6,061 $4,930 $11,129 $6,692 $64,708
Loans 34,926 5,388 4,761 - - 45,075
Deposits 27,023 21,595 3,582 353 217 52,770
Statistical data:
Return on average assets (a) 2.22% 0.15% 1.96% N/M N/M 0.86%
Efficiency ratio (b) 31.70 91.79 73.13 N/M N/M 65.79
------------------- ----- ----- ----- --- --- -----
(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, 2015 Michigan California Texas Markets & Other Total
--------------------------------- -------- ---------- ----- ------- ------- -----
Earnings summary:
Net interest income (expense) (FTE) $177 $176 $131 $80 $(150) $414
Provision for credit losses (8) (3) 21 6 (2) 14
Noninterest income 81 38 36 88 13 256
Noninterest expenses 155 100 96 102 7 460
Provision (benefit) for income taxes (FTE) 38 44 18 16 (54) 62
--- --- --- --- --- ---
Net income (loss) $73 $73 $32 $44 $(88) $134
--- --- --- --- ---- ----
Net credit-related charge-offs (recoveries) $3 $1 $3 $1 $ - $8
Selected average balances:
Assets $13,736 $16,461 $12,193 $7,662 $18,687 $68,739
Loans 13,223 16,193 11,535 7,200 - 48,151
Deposits 21,710 16,837 11,010 6,986 447 56,990
Statistical data:
Return on average assets (a) 1.30% 1.62% 1.01% 2.29% N/M 0.78%
Efficiency ratio (b) 60.22 46.82 57.43 60.01 N/M 68.55
------------------- ----- ----- ----- ----- --- -----
Other Finance
Three Months Ended December 31, 2014 Michigan California Texas Markets & Other Total
------------------------------------ -------- ---------- ----- ------- ------- -----
Earnings summary:
Net interest income (expense) (FTE) $173 $192 $139 $82 $(170) $416
Provision for credit losses (19) (10) 18 8 5 2
Noninterest income 89 38 38 44 16 225
Noninterest expenses 157 102 95 56 9 419
Provision (benefit) for income taxes (FTE) 45 55 24 15 (68) 71
--- --- --- --- --- ---
Net income (loss) $79 $83 $40 $47 $(100) $149
--- --- --- --- ----- ----
Net credit-related charge-offs (recoveries) $(5) $1 $2 $3 $ - $1
Selected average balances:
Assets $13,605 $16,035 $12,003 $7,585 $20,083 $69,311
Loans 13,142 15,777 11,327 7,115 - 47,361
Deposits 21,530 18,028 10,825 6,909 468 57,760
Statistical data:
Return on average assets (a) 1.41% 1.75% 1.32% 2.47% NM 0.86%
Efficiency ratio (b) 59.91 44.25 53.62 44.34 NM 65.26
------------------- ----- ----- ----- ----- --- -----
Other Finance
Three Months Ended March 31, 2014 Michigan California Texas Markets & Other Total
--------------------------------- -------- ---------- ----- ------- ------- -----
Earnings summary:
Net interest income (expense) (FTE) $183 $172 $136 $72 $(152) $411
Provision for credit losses 3 11 6 (10) (1) 9
Noninterest income 84 34 34 40 16 208
Noninterest expenses 161 96 90 48 11 406
Provision (benefit) for income taxes (FTE) 37 36 26 18 (52) 65
--- --- --- --- --- ---
Net income (loss) $66 $63 $48 $56 $(94) $139
--- --- --- --- ---- ----
Net credit-related charge-offs (recoveries) $ - $10 $6 $(4) $ - $12
Selected average balances:
Assets $13,819 $15,133 $11,070 $6,865 $17,821 $64,708
Loans 13,473 14,824 10,364 6,414 - 45,075
Deposits 20,642 14,782 10,875 5,901 570 52,770
Statistical data:
Return on average assets (a) 1.22% 1.59% 1.56% 3.28% N/M 0.86%
Efficiency ratio (b) 60.47 46.66 52.94 43.28 N/M 65.79
------------------- ----- ----- ----- ----- --- -----
(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) 2015 2014 2014 2014 2014
--------------------------- ---- ---- ---- ---- ----
Tier 1 Common Capital Ratio:
Tier 1 and Tier 1 common capital (a) n/a $7,169 $7,105 $7,027 $6,962
Risk-weighted assets (a) n/a 68,273 67,106 66,911 65,788
----------------------- --- ------ ------ ------ ------
Tier 1 and Tier 1 common risk-based capital ratio n/a 10.50% 10.59% 10.50% 10.58%
------------------------------------------------- --- ----- ----- ----- -----
Tangible Common Equity Ratio:
Common shareholders' equity $7,500 $7,402 $7,433 $7,369 $7,283
Less:
Goodwill 635 635 635 635 635
Other intangible assets 15 15 15 15 16
--- --- --- --- ---
Tangible common equity $6,850 $6,752 $6,783 $6,719 $6,632
---------------------- ------ ------ ------ ------ ------
Total assets $69,336 $69,190 $68,887 $65,325 $65,681
Less:
Goodwill 635 635 635 635 635
Other intangible assets 15 15 15 15 16
--- --- --- --- ---
Tangible assets $68,686 $68,540 $68,237 $64,675 $65,030
--------------- ------- ------- ------- ------- -------
Common equity ratio 10.82% 10.70% 10.79% 11.28% 11.09%
Tangible common equity ratio 9.97 9.85 9.94 10.39 10.20
---------------------------- ---- ---- ---- ----- -----
Tangible Common Equity per Share of Common Stock:
Common shareholders' equity $7,500 $7,402 $7,433 $7,369 $7,283
Tangible common equity 6,850 6,752 6,783 6,719 6,632
---------------------- ----- ----- ----- ----- -----
Shares of common stock outstanding (in millions) 178 179 180 181 182
----------------------------------------------- --- --- --- --- ---
Common shareholders' equity per share of common
stock $42.12 $41.35 $41.26 $40.72 $40.09
Tangible common equity per share of common stock 38.47 37.72 37.65 37.12 36.50
------------------------------------------------ ----- ----- ----- ----- -----
(a) Tier 1 capital and risk-
weighted assets as
defined by Basel I risk-
based capital rules.
n/a - not applicable.
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 Basel I risk-based capital rules in effect through December 31, 2014. Effective January 1, 2015, regulatory capital components and risk-weighted assets are defined by and calculated in conformity with Basel III risk-based capital rules. 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.
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SOURCE Comerica Incorporated
