DALLAS, April 19, 2016 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported first quarter 2016 net income of $60 million, compared to $116 million for the fourth quarter 2015 and $134 million for the first quarter 2015. Earnings per diluted share were 34 cents for first quarter 2016 compared to 64 cents for fourth quarter 2015 and 73 cents for first quarter 2015.
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"Our first quarter results were impacted by the current oil and gas cycle, as we significantly increased our reserve for loan losses," said Ralph W. Babb, Jr., chairman and chief executive officer. "We continue to be prudent in our reserving approach. While this approach resulted in a higher provision this quarter, our fundamental view of the energy sector has not changed significantly. Additionally, during the quarter we benefited from the December short-term rate increase, with loan yields increasing and helping to drive a $14 million increase in net interest income."
(dollar
amounts
in
millions,
except
per
share
data) 1st Qtr '16 4th Qtr '15 1st Qtr '15
--------- ----------- ----------- -----------
Net
interest
income $447 $433 $413
Provision
for
credit
losses 148 60 14
Noninterest
income 246 268 252
Noninterest
expenses 460 484 456
Provision
for
income
taxes 25 41 61
Net
income 60 116 134
Net
income
attributable
to
common
shares 59 115 132
Diluted
income
per
common
share 0.34 0.64 0.73
Average
diluted
shares
(in
millions) 176 179 182
Common
equity
Tier
1
capital
ratio
(a) 10.56% 10.54% 10.40%
Tangible
common
equity
ratio
(b) 10.23 9.70 9.97
-------- ----- ---- ----
(a) March 31, 2016 ratio is estimated.
(b) See Reconciliation of Non-GAAP Financial Measures.
----------------------------------------------------------
Comerica also announced today that it launched a comprehensive review of its expense and revenue base in order to meaningfully enhance profitability. The review is currently underway and will include the assistance of the Boston Consulting Group, a globally recognized consulting firm familiar with the challenges facing the U.S. banking industry. Given the breadth of the review, Comerica expects to provide more information around the opportunities identified by the next quarterly earnings announcement and deliver to shareholders, as soon as practical, a broad, enterprise-wide plan, designed to help reach tangible targets.
"We operate Comerica for the ultimate benefit of our shareholders, and all of our actions will be directed to maximize value, while not compromising our commitment to our clients, culture, regulatory standing, responsible underwriting and strong risk management," said Babb. "We have been undertaking a process through which we are identifying meaningful opportunities to enhance revenue, operate more efficiently and lower expenses, with the goal of building a more profitable organization that is better able to drive enhanced long-term value for shareholders. We are going to pursue our cost and revenue initiative with the urgency it deserves and continue to utilize our strengths and competitive position to improve our results."
First Quarter 2016 Compared to Fourth Quarter 2015
-- Average total loans decreased $156 million to $48.4 billion, primarily
reflecting decreases in general Middle Market, Energy and Mortgage
Banker Finance, partially offset by an increase in Commercial Real
Estate. Period-end total loans increased $293 million, to $49.4 billion.
-- Average total deposits decreased $3.0 billion to $56.7 billion,
reflecting seasonality, purposeful pricing discipline and strategic
actions in light of new liquidity coverage ratio rules, with the largest
declines in Corporate Banking, the Financial Services Division and
Municipalities. Period-end total deposits decreased $3.5 billion to
$56.4 billion. A majority of the decrease related to an elevated deposit
level associated with the government card program at year-end.
-- Net interest income increased $14 million to $447 million, primarily
reflecting an increase in loan yields, mostly due to increases in
short-term rates, and a larger average securities portfolio, partially
offset by one fewer day in the first quarter. The net interest margin
increased 23 basis points to 2.81 percent, primarily reflecting higher
loan yields and a decrease in Federal Reserve Bank deposits.
-- The provision for credit losses increased $88 million to $148 million.
The allowance for loan losses increased $90 million to $724 million,
primarily due to an increase in reserves in the Energy business line,
partially offset by improvements in credit quality. Net credit-related
charge-offs were $58 million, or 0.49 percent, including $42 million for
Energy loans.
-- Noninterest income decreased $22 million to $246 million, primarily due
to decreases of $10 million in commercial lending fees, following a
strong fourth quarter 2015, and $7 million in deferred compensation
asset returns.
-- Noninterest expenses decreased $24 million to $460 million, primarily
reflecting a decrease of $14 million in salaries and benefits expense
and smaller decreases in many other categories.
-- Capital remained solid at March 31, 2016, as evidenced by an estimated
common equity Tier 1 capital ratio of 10.56 percent and a tangible
common equity ratio of 10.23 percent.
-- Comerica repurchased approximately 1.2 million shares of common stock
under the equity repurchase program.
First Quarter 2016 Compared to First Quarter 2015
-- Average total loans increased $241 million, primarily reflecting
increases in Commercial Real Estate, Technology and Life Sciences,
National Dealer Services and Mortgage Banker Finance, partially offset
by decreases in general Middle Market, Energy and Corporate Banking.
-- Average total deposits decreased $282 million, primarily driven by a
decrease in Municipalities.
-- Net interest income increased $34 million, primarily reflecting the
benefits from higher loan yields, a larger average securities portfolio
and an increase in average loans.
-- The provision for credit losses increased $134 million, primarily due to
an increase in reserves in the Energy business line.
-- Noninterest income decreased $6 million, primarily reflecting decreases
in deferred compensation asset returns and commercial lending fees,
partially offset by an increase in card fees.
-- Noninterest expenses increased $4 million, primarily due to an increase
in technology-related expense and higher outside processing expenses
related to revenue generating activities, partially offset by a decrease
in deferred compensation plan expense.
Net Interest Income
-------------------
(dollar amounts in
millions) 1st Qtr '16 4th Qtr '15 1st Qtr '15
------------------ ----------- ----------- -----------
Net interest
income $447 $433 $413
Net interest
margin 2.81% 2.58% 2.64%
Selected average
balances:
Total earning
assets $64,123 $66,818 $63,480
Total loans 48,392 48,548 48,151
Total investment
securities 12,357 10,864 9,907
Federal Reserve
Bank deposits 3,071 7,073 5,176
Total deposits 56,708 59,736 56,990
Total noninterest-
bearing deposits 28,052 29,627 26,697
------------------ ------ ------ ------
-- Net interest income increased $14 million to $447 million in the first
quarter 2016, compared to the fourth quarter 2015.
-- Interest on loans increased $11 million, primarily reflecting an
increase in yields (+$19 million), partially offset by the effect of
one fewer day in the first quarter (-$4 million) and lower interest
recognized on nonaccrual loans (-$3 million). The increase in loan
yields primarily reflected the benefit from the increase in
short-term rates, partially offset by lower loan prepayment fees and
other portfolio dynamics.
-- Interest on investment securities increased $6 million, primarily
reflecting the reinvestment of Federal Reserve Bank deposits into
higher yielding Treasury securities in the second half of the fourth
quarter 2015.
-- Interest on temporary investments decreased $2 million, reflecting a
decrease in average Federal Reserve Bank deposit balances (-$5
million), partially offset by a benefit from the increase in
short-term rates (+$3 million).
-- The net interest margin of 2.81 percent increased 23 basis points
compared to the fourth quarter 2015, primarily due to higher loan yields
(+12 basis points) and the impact of a decrease in lower-yielding
Federal Reserve Bank deposit balances (+13 basis points), partially
offset by the decrease in interest recognized on nonaccrual loans (-2
basis points).
Noninterest Income
Noninterest income decreased $22 million to $246 million in the first quarter 2016, compared to $268 million for the fourth quarter 2015. The decrease primarily reflected decreases of $10 million in commercial lending fees, $7 million in deferred compensation asset returns and other impacts including lower bank-owned life insurance income and securities activity. The decrease in commercial lending fees reflected strong fourth quarter 2015 syndication agent fees as well as a decrease in commitment fees, which resulted from a combination of higher utilization levels and lower commitment totals in the first quarter 2016. Deferred compensation asset returns are offset by deferred compensation plan expense in noninterest expenses.
Noninterest Expenses
Noninterest expenses decreased $24 million to $460 million in the first quarter 2016, compared to $484 million for the fourth quarter 2015, primarily reflecting decreases of $14 million in salaries and benefits expense and decreases of $3 million each in consulting fee expense, advertising expense and net occupancy expense. The decrease in salaries and benefits expense primarily reflected decreases in pension expense, deferred compensation plan expense, technology-related contract labor expenses, and the impact of one fewer day in the quarter, partially offset by a seasonal increase in share-based compensation expense.
Credit Quality
"The provision for credit losses was $148 million and the allowance increased $90 million," said Babb. "The provision reflected the high end of the range in our 2016 guidance for the incremental impact of energy loans, adjusted upward for revised regulatory guidance, and includes the results of the Shared National Credit (SNC) exam. At March 31, 2016, our reserve allocation for loans in the Energy business line was nearly 8 percent. While the current oil and gas cycle presents a significant challenge, we believe we are adequately reserved. And remember, those reserves may not turn into losses. Aside from the provision for Energy loans, overall credit quality continued to be solid, and we are not detecting any noteworthy deterioration in Texas. Total net credit-related charge-offs were $58 million, or 49 basis points of average loans. Excluding Energy, net credit-related charge-offs for the remainder of the portfolio were low at $16 million, or 15 basis points."
(dollar amounts in millions) 1st Qtr '16 4th Qtr '15 1st Qtr '15
--------------------------- ----------- ----------- -----------
Credit-related charge-offs $83 $76 $23
Recoveries 25 25 15
--- --- ---
Net credit-related charge-offs 58 51 8
Net credit-related charge-offs/
Average total loans 0.49% 0.42% 0.07%
Provision for credit losses $148 $60 $14
Nonperforming loans 689 379 279
Nonperforming assets (NPAs) 714 391 288
NPAs/Total loans and foreclosed
property 1.45% 0.80% 0.59%
Loans past due 90 days or more and
still accruing $13 $17 $12
Allowance for loan losses 724 634 601
Allowance for credit losses on
lending-related commitments (a) 46 45 39
--- --- ---
Total allowance for credit losses 770 679 640
Allowance for loan losses/Period-end
total loans 1.47% 1.29% 1.22%
Allowance for loan losses/
Nonperforming loans 105 167 216
-------------------------- --- --- ---
(a) Included in "Accrued expenses and other liabilities" on the consolidated balance sheets.
------------------------------------------------------------------------------------------------
-- Energy business line loans were $3.1 billion at both March 31, 2016 and
December 31, 2015. Criticized Energy loans increased $590 million, to
$1.8 billion, including a $291 million increase in nonaccrual loans.
Energy net charge-offs were $42 million, compared to $27 million in the
fourth quarter 2015.
-- Net credit-related charge-offs increased $7 million to $58 million, or
0.49 percent of average loans, in the first quarter 2016, compared to
$51 million, or 0.42 percent, in the fourth quarter 2015. Fourth quarter
2015 included a large charge-off resulting from irregularities
associated with a single Small Business credit.
-- During the first quarter 2016, $446 million of borrower relationships
over $2 million were transferred to nonaccrual status.
-- Criticized loans increased $735 million to $3.9 billion at March 31,
2016, compared to $3.2 billion at December 31, 2015.
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $69.0 billion and $7.6 billion, respectively, at March 31, 2016, compared to $71.9 billion and $7.6 billion, respectively, at December 31, 2015.
There were approximately 175 million common shares outstanding at March 31, 2016. Repurchases under the equity repurchase program were $42 million (1.2 million shares). Diluted average shares decreased 3 million to 176 million for the first quarter 2016.
The estimated common equity Tier 1 capital ratio, reflective of transition provisions and excluding accumulated other comprehensive income ("AOCI"), was 10.56 percent at March 31, 2016. Certain deductions and adjustments to regulatory capital began phasing in on January 1, 2015 and will be fully implemented on January 1, 2018. The estimated ratio under fully phased-in Basel III capital rules is largely the same as the transitional ratio. Comerica's tangible common equity ratio was 10.23 percent at March 31, 2016, an increase of 53 basis points from December 31, 2015.
Full-Year 2016 Outlook
Excluding the first quarter energy impact on the provision for credit losses, management expectations for full-year 2016 compared to full-year 2015, assuming the energy outlook remains stable, as well as a continuation of the current economic and low-rate environment, have not changed materially. The outlook does not reflect the impact of any revenue or expense initiatives that may be undertaken as a result of the ongoing comprehensive review. Management expects such impact to be reflected in the outlook provided on the second quarter 2016 earnings call.
-- Average loans modestly higher, in line with Gross Domestic Product
growth, reflecting a continued decline in Energy more than offset by
increases in most other lines of business.
-- Net interest income higher, reflecting the benefits from the December
2015 short-term rate increase, loan growth and a larger securities
portfolio more than offsetting higher funding costs.
-- Full-year benefit from the December rise in short-term rates
expected to be more than $90 million if deposit prices remain at
current levels.
-- Provision for credit losses higher, reflecting the first quarter 2016
reserve build for Energy, with net charge-offs for the remainder of the
year between 45 basis points and 55 basis points. Additional reserve
changes dependent on developments in the oil and gas sector. Continued
solid credit quality in the remainder of the portfolio, with metrics,
absent Energy, better than historical norms.
-- Noninterest income modestly higher, primarily due to growth in card fees
from merchant processing services and government card. Continued focus
on cross-sell opportunities, including wealth management products such
as fiduciary and brokerage services.
-- Noninterest expenses higher, reflecting continued increases in
technology costs and regulatory expenses, increased outside processing
in line with growing revenue, higher FDIC insurance expense in part due
to regulatory surcharge, and typical inflationary pressures.
Additionally, 2015 benefited from a $33 million legal reserve release,
which is offset by lower pension expense in 2016.
-- Income tax expense to approximate 32 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, 2016 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2016 results compared to fourth quarter 2015.
The following table presents net income (loss) by business segment.
(dollar amounts in
millions) 1st Qtr '16 4th Qtr '15 1st Qtr '15
------------------ ----------- ----------- -----------
Business Bank $95 74% $200 91% $189 85%
Retail Bank 12 9 (1) (1) 17 8
Wealth Management 22 17 21 10 16 7
----------------- --- --- --- --- --- ---
129 100% 220 100% 222 100%
Finance (68) (102) (89)
Other (a) (1) (2) 1
-------- --- --- ---
Total $60 $116 $134
----- --- ---- ----
(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
'16 '15 '15
--------------------------- ------- ------- -------
Net interest income (FTE) $365 $387 $370
Provision for credit losses 151 41 25
Noninterest income 135 145 140
Noninterest expenses 207 206 198
Net income 95 200 189
Net credit-related charge-offs 57 35 9
Selected average balances:
Assets 38,635 38,765 38,654
Loans 37,561 37,682 37,623
Deposits 29,108 31,738 30,143
-------- ------ ------ ------
-- Average loans decreased $121 million, primarily reflecting decreases in
general Middle Market, Energy and Mortgage Banker Finance, partially
offset by an increase in Commercial Real Estate.
-- Average deposits decreased $2.6 billion, primarily reflecting decreases
in Corporate Banking, the Financial Services Division and
Municipalities. The decrease reflected seasonality, purposeful pricing
discipline and strategic actions in light of new liquidity coverage
ratio rules.
-- Net interest income decreased $22 million, primarily reflecting an
increase in net funds transfer pricing (FTP) charges and the impact of
one fewer day in the quarter, partially offset by an increase in loan
yields. The increase in net FTP charges primarily reflected an increase
in the cost of funds due to the increase in short-term market rates as
well as lower funding credits due to the decrease in average deposits.
-- The provision for credit losses increased $110 million, primarily
reflecting increases in Energy and general Middle Market, partially
offset by a decrease in Commercial Real Estate.
-- Noninterest income decreased $10 million, primarily due to a decrease in
commercial lending fees, which reflected strong fourth quarter 2015
syndication agent fees as well as a decrease in commitment fees, which
resulted from a combination of higher utilization levels and lower
commitment totals in the first quarter 2016.
Retail Bank
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '16 '15 '15
------------------ -------- -------- --------
Net interest income
(FTE) $157 $160 $151
Provision for credit
losses 3 23 (8)
Noninterest income 43 49 41
Noninterest expenses 179 191 174
Net income (loss) 12 (1) 17
Net credit-related
charge-offs 2 25 -
Selected average
balances:
Assets 6,544 6,549 6,368
Loans 5,867 5,868 5,694
Deposits 23,110 23,262 22,404
-------- ------ ------ ------
-- Average deposits decreased $152 million, primarily reflecting a decrease
in Small Business.
-- Net interest income decreased $3 million, primarily due to a decrease in
net FTP credits, largely due to the decrease in average deposits, and
the impact of one fewer day in the quarter.
-- The provision for credit losses decreased $20 million, primarily due to
a decrease in net charge-offs in Small Business.
-- Noninterest income decreased $6 million, primarily reflecting a
securities loss and small decreases in several categories.
-- Noninterest expenses decreased $12 million, primarily reflecting
decreases in salaries and benefits expense, outside processing expenses
and smaller decreases in many other categories.
Wealth Management
(dollar amounts in millions) 1st Qtr 4th Qtr 1st Qtr
'16 '15 '15
--------------------------- -------- -------- --------
Net interest income (FTE) $43 $47 $43
Provision for credit losses (5) (7) (1)
Noninterest income 59 57 58
Noninterest expenses 73 81 77
Net income 22 21 16
Net credit-related charge-
offs (recoveries) (1) (9) (1)
Selected average balances:
Assets 5,162 5,199 5,029
Loans 4,964 4,998 4,834
Deposits 4,171 4,355 3,996
-------- ----- ----- -----
-- Average loans decreased $34 million.
-- Average deposits decreased $184 million, primarily reflecting a decrease
in Private Banking.
-- Net interest income decreased $4 million, primarily due a decrease in
net FTP credits, largely due to a $184 million decrease in average
deposits as well as an increase in the cost of funds, partially offset
by higher loan yields.
-- The provision for credit losses increased $2 million to a negative
provision of $5 million in the first quarter 2016, primarily reflecting
credit quality improvements.
-- Noninterest income increased $2 million, primarily due to higher
fiduciary income.
-- Noninterest expenses decreased $8 million, primarily reflecting
decreases in operational losses, legal expenses and salaries and
benefits expense.
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, 2016 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 '16 4th Qtr '15 1st Qtr '15
----------- ----------- ----------- -----------
Michigan $72 56% $83 37% $76 35%
California 74 57 90 41 72 32
Texas (76) (59) (3) (1) 32 14
Other
Markets 59 46 50 23 42 19
-------- --- --- --- --- --- ---
129 100% 220 100% 222 100%
Finance &
Other (a) (69) (104) (88)
---------- --- ---- ---
Total $60 $116 $134
----- --- ---- ----
(a) Includes items not directly
associated with the
geographic markets.
-- Average loans decreased $212 million in Michigan, largely reflecting a
decrease in general Middle Market, and $130 million in Texas, primarily
reflecting decreases in National Dealer Services, Energy and general
Middle Market, partially offset by an increase in Commercial Real
Estate. Average loans increased $250 million in California, primarily
reflecting increases in Commercial Real Estate and National Dealer
Services.
-- Average deposits decreased $1.9 billion in California, $427 million in
Michigan and $433 million in Texas, reflecting seasonality, purposeful
pricing discipline and strategic actions in light of new liquidity
coverage ratio rules.
-- Net interest income decreased $14 million in California, $7 million in
Michigan and $8 million in Texas. The decrease in each market primarily
reflected the FTP impact of the decreases in average deposits and the
impact of one fewer day in the quarter.
-- The provision for credit losses increased $112 million in Texas, $1
million in California and $6 million in Michigan. The increase in Texas
primarily reflected increases in net charge-offs and reserves for Energy
and general Middle Market. The increase in Michigan was primarily due to
a charge-off in Corporate Banking.
-- Noninterest income decreased $5 million in Michigan, $2 million in
California and $2 million in Texas. The decreases in all markets were
primarily the result of lower syndication agent and commitment fees.
-- Noninterest expenses decreased $10 million in Michigan, $3 million in
California and $3 million in Texas. The decrease in Michigan primarily
reflected decreases in salaries and benefits expense, operational losses
and outside processing fees, partially offset by an increase in asset
disposal expense, as a benefit from the early termination of certain
leveraged leases in the fourth quarter 2015 was not repeated. The
decrease in California primarily reflected small decreases in many
categories, and the decrease in Texas was due primarily to a decrease in
salaries and benefits expense.
Michigan Market
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '16 '15 '15
------------------ -------- -------- --------
Net interest income
(FTE) $176 $183 $177
Provision for credit
losses (6) (12) (8)
Noninterest income 76 81 84
Noninterest expenses 150 160 155
Net income 72 83 76
Net credit-related
charge-offs
(recoveries) 5 (2) 3
Selected average balances:
Assets 13,402 13,601 13,736
Loans 12,774 12,986 13,223
Deposits 21,696 22,123 21,710
-------- ------ ------ ------
California Market
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '16 '15 '15
------------------ -------- -------- --------
Net interest income
(FTE) $179 $193 $176
Provision for credit
losses (6) (7) (3)
Noninterest income 38 40 34
Noninterest expenses 104 107 97
Net income 74 90 72
Net credit-related
charge-offs 8 1 1
Selected average balances:
Assets 17,541 17,297 16,461
Loans 17,283 17,033 16,193
Deposits 16,654 18,545 16,837
-------- ------ ------ ------
Texas Market
(dollar amounts in 1st Qtr 4th Qtr 1st Qtr
millions) '16 '15 '15
------------------ -------- -------- --------
Net interest income
(FTE) $123 $131 $131
Provision for credit
losses 169 57 21
Noninterest income 30 32 34
Noninterest expenses 100 103 94
Net income (loss) (76) (3) 32
Net credit-related
charge-offs 47 33 3
Selected average balances:
Assets 11,295 11,474 12,192
Loans 10,763 10,893 11,535
Deposits 10,374 10,807 11,010
-------- ------ ------ ------
Conference Call and Webcast
Comerica will host a conference call to review first quarter 2016 financial results at 7 a.m. CT Tuesday, April 19, 2016. Interested parties may access the conference call by calling (877) 523-5249 or (210) 591-1147 (event ID No. 63729781). 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, in particular the energy industry; unfavorable developments concerning credit quality; 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; reductions in Comerica's credit rating; the interdependence of financial service companies; the implementation of Comerica's strategies and business initiatives; damage to Comerica's reputation; 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, 2015. 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) 2016 2015 2015
---------- ---- ---- ----
PER
COMMON
SHARE
AND
COMMON
STOCK
DATA
Diluted
net
income $0.34 $0.64 $0.73
Cash
dividends
declared 0.21 0.21 0.20
Average
diluted
shares
(in
thousands) 176,055 179,197 182,268
---------- ------- ------- -------
KEY
RATIOS
Return
on
average
common
shareholders'
equity 3.13% 6.08% 7.20%
Return
on
average
assets 0.34 0.64 0.78
Common
equity
tier 1
and
tier 1
risk-
based
capital
ratio
(a) 10.56 10.54 10.40
Total
risk-
based
capital
ratio
(a) 12.82 12.69 12.35
Leverage
ratio
(a) 10.60 10.22 10.53
Tangible
common
equity
ratio
(b) 10.23 9.70 9.97
-------- ----- ---- ----
AVERAGE
BALANCES
Commercial
loans $30,814 $31,219 $31,090
Real
estate
construction
loans 2,114 1,961 1,938
Commercial
mortgage
loans 8,961 8,842 8,581
Lease
financing 726 750 797
International
loans 1,419 1,402 1,512
Residential
mortgage
loans 1,892 1,896 1,856
Consumer
loans 2,466 2,478 2,377
----- ----- -----
Total
loans 48,392 48,548 48,151
Earning
assets 64,123 66,818 63,480
Total
assets 69,228 71,907 68,735
Noninterest-
bearing
deposits 28,052 29,627 26,697
Interest-
bearing
deposits 28,656 30,109 30,293
------ ------ ------
Total
deposits 56,708 59,736 56,990
Common
shareholders'
equity 7,632 7,613 7,453
-------------- ----- ----- -----
NET
INTEREST
INCOME
(fully
taxable
equivalent
basis)
Net
interest
income $448 $434 $414
Net
interest
margin 2.81% 2.58% 2.64%
--------- ---- ---- ----
CREDIT
QUALITY
Total
nonperforming
assets $714 $391 $288
Loans
past
due
90
days
or
more
and
still
accruing 13 17 12
Net
credit-
related
charge-
offs 58 51 8
Allowance
for
loan
losses 724 634 601
Allowance
for
credit
losses
on
lending-
related
commitments 46 45 39
--- --- ---
Total
allowance
for
credit
losses 770 679 640
Allowance
for
loan
losses
as a
percentage
of
total
loans 1.47% 1.29% 1.22%
Net
credit-
related
charge-
offs
as a
percentage
of
average
total
loans 0.49 0.42 0.07
Nonperforming
assets
as a
percentage
of
total
loans
and
foreclosed
property 1.45 0.80 0.59
Allowance
for
loan
losses
as a
percentage
of
total
nonperforming
loans 105 167 216
------------- --- --- ---
(a) March 31, 2016 ratios are estimated.
(b) See Reconciliation of Non-GAAP
Financial Measures.
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
March 31, December 31, March 31,
(in millions, except share data) 2016 2015 2015
------------------------------- ---- ---- ----
(unaudited) (unaudited)
ASSETS
Cash and due from banks $977 $1,157 $1,170
Interest-bearing deposits with banks 2,025 4,990 4,792
Other short-term investments 94 113 101
Investment securities available-for-
sale 10,607 10,519 8,214
Investment securities held-to-maturity 1,907 1,981 1,871
Commercial loans 31,562 31,659 32,091
Real estate construction loans 2,290 2,001 1,917
Commercial mortgage loans 8,982 8,977 8,558
Lease financing 731 724 792
International loans 1,455 1,368 1,433
Residential mortgage loans 1,874 1,870 1,859
Consumer loans 2,483 2,485 2,422
-------------- ----- ----- -----
Total loans 49,377 49,084 49,072
Less allowance for loan losses (724) (634) (601)
------------------------------ ---- ---- ----
Net loans 48,653 48,450 48,471
Premises and equipment 541 550 531
Accrued income and other assets 4,203 4,117 4,183
------------------------------- ----- ----- -----
Total assets $69,007 $71,877 $69,333
------------ ------- ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $28,025 $30,839 $27,394
Money market and interest-bearing
checking deposits 22,872 23,532 23,727
Savings deposits 2,006 1,898 1,817
Customer certificates of deposit 3,401 3,552 4,497
Foreign office time deposits 47 32 135
---------------------------- --- --- ---
Total interest-bearing deposits 28,326 29,014 30,176
------------------------------- ------ ------ ------
Total deposits 56,351 59,853 57,570
Short-term borrowings 514 23 80
Accrued expenses and other liabilities 1,389 1,383 1,500
Medium- and long-term debt 3,109 3,058 2,683
-------------------------- ----- ----- -----
Total liabilities 61,363 64,317 61,833
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares 1,141 1,141 1,141
Capital surplus 2,158 2,173 2,188
Accumulated other comprehensive loss (328) (429) (370)
Retained earnings 7,097 7,084 6,841
Less cost of common stock in treasury
-53,086,733 shares at 3/31/16,
52,457,113 shares at 12/31/15, and
50,114,399 shares at 3/31/15 (2,424) (2,409) (2,300)
------------------------------------- ------ ------ ------
Total shareholders' equity 7,644 7,560 7,500
-------------------------- ----- ----- -----
Total liabilities and shareholders'
equity $69,007 $71,877 $69,333
----------------------------------- ------- ------- -------
CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
First Fourth Third Second First First Quarter 2016 Compared To:
Quarter Quarter Quarter Quarter Quarter Fourth Quarter 2015 First Quarter 2015
(in millions, except per
share data) 2016 2015 2015 2015 2015 Amount Percent Amount Percent
------------------------ ---- ---- ---- ---- ---- ------ ------- ------ -------
INTEREST INCOME
Interest and fees on
loans $406 $395 $390 $388 $378 $11 3% $28 7%
Interest on investment
securities 62 56 54 53 53 6 10 9 18
Interest on short-term
investments 4 6 4 3 4 (2) (21) - -
---------------------- --- --- --- --- --- --- --- --- ---
Total interest income 472 457 448 444 435 15 3 37 9
INTEREST EXPENSE
Interest on deposits 10 10 11 11 11 - - (1) (9)
Interest on medium- and
long-term debt 15 14 15 12 11 1 8 4 30
----------------------- --- --- --- --- --- --- --- --- ---
Total interest expense 25 24 26 23 22 1 4 3 13
---------------------- --- --- --- --- --- --- --- --- ---
Net interest income 447 433 422 421 413 $14 3 $34 8
Provision for credit
losses 148 60 26 47 14 88 n/m 134 n/m
-------------------- --- --- --- --- --- --- --- --- ---
Net interest income
after provision 299 373 396 374 399 (74) (20) (100) (25)
for credit losses
NONINTEREST INCOME
Card fees 74 75 72 68 64 (1) (1) 10 15
Service charges on
deposit accounts 55 55 57 56 55 - - - -
Fiduciary income 46 45 47 48 47 1 3 (1) (3)
Commercial lending fees 20 30 22 22 25 (10) (33) (5) (18)
Letter of credit fees 13 14 13 13 13 (1) (5) - -
Bank-owned life
insurance 9 11 10 10 9 (2) (16) - -
Foreign exchange income 10 11 10 9 10 (1) (3) - -
Brokerage fees 4 4 5 4 4 - - - -
Net securities losses (2) - - - (2) (2) n/m - -
Other noninterest income 17 23 26 27 27 (6) (29) (10) (37)
------------------------ --- --- --- --- --- --- --- --- ---
Total noninterest income 246 268 262 257 252 (22) (8) (6) (2)
NONINTEREST EXPENSES
Salaries and benefits
expense 248 262 243 251 253 (14) (5) (5) (2)
Outside processing fee
expense 79 81 84 82 74 (2) (2) 5 7
Net occupancy expense 38 41 41 39 38 (3) (7) - -
Equipment expense 13 14 13 13 13 (1) (4) - -
Software expense 29 26 26 24 23 3 11 6 21
FDIC insurance expense 11 10 9 9 9 1 5 2 24
Advertising expense 4 7 6 5 6 (3) (49) (2) (42)
Litigation-related
expense - - (3) (30) 1 - - (1) (70)
Other noninterest
expenses 38 43 40 39 39 (5) (10) (1) (1)
----------------- --- --- --- --- --- --- --- --- ---
Total noninterest
expenses 460 484 459 432 456 (24) (5) 4 1
----------------- --- --- --- --- --- --- --- --- ---
Income before income
taxes 85 157 199 199 195 (72) (46) (110) (56)
Provision for income
taxes 25 41 63 64 61 (16) (39) (36) (58)
-------------------- --- --- --- --- --- --- --- --- ---
NET INCOME 60 116 136 135 134 (56) (48) (74) (55)
Less income allocated to
participating
securities 1 1 2 1 2 - - (1) (63)
------------------------ --- --- --- --- --- --- --- --- ---
Net income attributable
to common shares $59 $115 $134 $134 $132 $(56) (48)% $(73) (55)%
----------------------- --- ---- ---- ---- ---- ---- ---- ---- ----
Earnings per common share:
Basic $0.34 $0.65 $0.76 $0.76 $0.75 $(0.31) (48)% $(0.41) (55)%
Diluted 0.34 0.64 0.74 0.73 0.73 (0.30) (47) (0.39) (53)
Comprehensive income 161 32 187 109 176 129 n/m (15) (9)
Cash dividends declared
on common stock 37 37 37 37 36 - - 1 3
Cash dividends declared
per common share 0.21 0.21 0.21 0.21 0.20 - - 0.01 5
----------------------- ---- ---- ---- ---- ---- --- --- ---- ---
n/m - not meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated
and Subsidiaries
2016 2015
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
------------ ------- ------- ------- ------- -------
Balance at beginning of
period $634 $622 $618 $601 $594
Loan charge-offs:
Commercial 72 73 30 17 19
Commercial mortgage - 1 - 2 -
Lease financing - - - 1 -
International 3 - 1 11 2
Residential mortgage - - - 1 -
Consumer 2 2 3 3 2
-------- --- --- --- --- ---
Total loan charge-offs 77 76 34 35 23
Recoveries on loans
previously charged-
off:
Commercial 12 6 8 10 9
Real estate construction - - - 1 -
Commercial mortgage 12 11 2 5 3
Residential mortgage - 1 - - 1
Consumer 1 7 1 1 2
-------- --- --- --- --- ---
Total recoveries 25 25 11 17 15
---------------- --- --- --- --- ---
Net loan charge-offs 52 51 23 18 8
Provision for loan
losses 141 63 28 35 16
Foreign currency
translation adjustment 1 - (1) - (1)
----------------------- --- --- --- --- ---
Balance at end of period $724 $634 $622 $618 $601
------------------------ ---- ---- ---- ---- ----
Allowance for loan
losses as a percentage
of total loans 1.47% 1.29% 1.27% 1.24% 1.22%
Net loan charge-offs as
a percentage of average
total loans 0.43 0.42 0.19 0.15 0.07
------------------------ ---- ---- ---- ---- ----
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited)
Comerica Incorporated and
Subsidiaries
2016 2015
---- ----
(in millions) 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
------------ ------- ------- ------- ------- -------
Balance at beginning
of period $45 $48 $50 $39 $41
Charge-offs on
lending-related
commitments (a) (6) - - (1) -
Provision for credit
losses on lending-
related commitments 7 (3) (2) 12 (2)
-------------------- --- --- --- --- ---
Balance at end of
period $46 $45 $48 $50 $39
----------------- --- --- --- --- ---
Unfunded lending-
related commitments
sold $11 $ - $ - $12 $1
-------------------- --- --- --- --- --- --- ---
(a) Charge-offs result from the sale of unfunded lending-related commitments.
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2016 2015
---- ----
(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 $547 $238 $214 $186 $113
Real estate construction - 1 1 1 1
Commercial mortgage 47 60 66 77 82
Lease financing 6 6 8 11 -
International 27 8 8 9 1
Total nonaccrual business
loans 627 313 297 284 197
Retail loans:
Residential mortgage 26 27 31 35 37
Consumer:
Home equity 27 27 28 29 31
Other consumer 1 - 1 1 1
-------------- --- --- --- --- ---
Total consumer 28 27 29 30 32
-------------- --- --- --- --- ---
Total nonaccrual retail loans 54 54 60 65 69
----------------------------- --- --- --- --- ---
Total nonaccrual loans 681 367 357 349 266
Reduced-rate loans 8 12 12 12 13
------------------ --- --- --- --- ---
Total nonperforming loans 689 379 369 361 279
Foreclosed property 25 12 12 9 9
------------------- --- --- --- --- ---
Total nonperforming assets $714 $391 $381 $370 $288
-------------------------- ---- ---- ---- ---- ----
Nonperforming loans as a
percentage of total loans 1.40% 0.77% 0.75% 0.72% 0.57%
Nonperforming assets as a
percentage of total loans and
foreclosed property 1.45 0.80 0.78 0.74 0.59
Allowance for loan losses as a
percentage of total
nonperforming loans 105 167 169 171 216
Loans past due 90 days or more
and still accruing $13 $17 $5 $18 $12
------------------------------ --- --- --- --- ---
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning
of period $367 $357 $349 $266 $273
Loans transferred to
nonaccrual (a) 446 105 69 145 39
Nonaccrual business loan gross
charge-offs (b) (75) (49) (31) (31) (21)
Loans transferred to accrual
status (a) - - - - (4)
Nonaccrual business loans sold
(c) (21) - - (1) (2)
Payments/Other (d) (36) (46) (30) (30) (19)
------------------ --- --- --- --- ---
Nonaccrual loans at end of
period $681 $367 $357 $349 $266
-------------------------- ---- ---- ---- ---- ----
(a) Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(b) Analysis of gross loan charge-offs:
Nonaccrual business loans $75 $49 $31 $31 $21
Performing business loans - 25 - - -
Consumer and residential
mortgage loans 2 2 3 4 2
--- --- --- --- ---
Total gross loan charge-offs $77 $76 $34 $35 $23
--- --- --- --- ---
(c) Analysis of loans sold:
Nonaccrual business loans $21 $ - $ - $1 $2
Performing criticized loans - 3 - - 7
--- --- --- --- ---
Total criticized loans sold $21 $3 $ - $1 $9
--- --- --- --- --- ---
(d) 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, 2016 December 31, 2015 March 31, 2015
-------------- ----------------- --------------
Average Average Average Average Average Average
(dollar amounts in
millions) Balance Interest Rate Balance Interest Rate Balance Interest Rate
------------------ ------- -------- ---- ------- -------- ---- ------- -------- ----
Commercial loans $30,814 $250 3.25% $31,219 $245 3.11% $31,090 $234 3.06%
Real estate construction
loans 2,114 19 3.66 1,961 18 3.58 1,938 16 3.36
Commercial mortgage loans 8,961 80 3.59 8,842 76 3.43 8,581 73 3.44
Lease financing 726 6 3.33 750 6 3.29 797 6 3.05
International loans 1,419 13 3.65 1,402 12 3.40 1,512 14 3.71
Residential mortgage
loans 1,892 19 3.94 1,896 18 3.75 1,856 17 3.76
Consumer loans 2,466 20 3.33 2,478 21 3.38 2,377 19 3.21
-------------- ----- --- ---- ----- --- ---- ----- --- ----
Total loans 48,392 407 3.38 48,548 396 3.24 48,151 379 3.19
Mortgage-backed
securities (a) 9,356 51 2.22 9,226 51 2.25 9,071 51 2.26
Other investment
securities 3,001 11 1.50 1,638 5 1.37 836 2 1.10
---------------- ----- --- ---- ----- --- ---- --- --- ----
Total investment
securities (a) 12,357 62 2.05 10,864 56 2.11 9,907 53 2.16
Interest-bearing
deposits with banks 3,265 4 0.50 7,300 5 0.28 5,323 4 0.26
Other short-term
investments 109 - 0.93 106 1 0.91 99 - 1.11
---------------- --- --- ---- --- --- ---- --- --- ----
Total earning assets 64,123 473 2.97 66,818 458 2.73 63,480 436 2.78
Cash and due from banks 1,068 1,071 1,027
Allowance for loan losses (680) (641) (601)
Accrued income and other
assets 4,717 4,659 4,829
----- ----- -----
Total assets $69,228 $71,907 $68,735
------- ------- -------
Money market and
interest-bearing
checking deposits $23,193 6 0.11 $24,368 6 0.11 $23,960 6 0.11
Savings deposits 1,936 - 0.02 1,883 - 0.02 1,786 - 0.03
Customer certificates of
deposit 3,477 4 0.40 3,763 4 0.39 4,423 4 0.37
Foreign office time
deposits 50 - 0.33 95 - 0.59 124 1 1.46
------------------- --- --- ---- --- --- ---- --- --- ----
Total interest-bearing
deposits 28,656 10 0.14 30,109 10 0.14 30,293 11 0.15
Short-term borrowings 365 - 0.45 92 - 0.06 110 - 0.06
Medium- and long-term
debt 3,093 15 1.94 3,089 14 1.79 2,686 11 1.73
--------------------- ----- --- ---- ----- --- ---- ----- --- ----
Total interest-bearing
sources 32,114 25 0.32 33,290 24 0.29 33,089 22 0.27
Noninterest-bearing
deposits 28,052 29,627 26,697
Accrued expenses and
other liabilities 1,430 1,377 1,496
Total shareholders'
equity 7,632 7,613 7,453
----- ----- -----
Total liabilities and
shareholders' equity $69,228 $71,907 $68,735
------- ------- -------
Net interest income/rate spread (FTE) $448 2.65 $434 2.44 $414 2.51
---- ---- ----
FTE adjustment $1 $1 $1
Impact of net noninterest-bearing sources
of funds 0.16 0.14 0.13
----------------------------------------- ---- ---- ----
Net interest margin (as a percentage of
average earning assets) (FTE) 2.81% 2.58% 2.64%
--------------------------------------- ---- ---- ----
(a) 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) 2016 2015 2015 2015 2015
------------------------ ---- ---- ---- ---- ----
Commercial loans:
Floor plan $3,902 $3,939 $3,538 $3,840 $3,544
Other 27,660 27,720 28,239 28,883 28,547
----- ------ ------ ------ ------ ------
Total commercial loans 31,562 31,659 31,777 32,723 32,091
Real estate construction
loans 2,290 2,001 1,874 1,795 1,917
Commercial mortgage loans 8,982 8,977 8,787 8,674 8,558
Lease financing 731 724 751 786 792
International loans 1,455 1,368 1,382 1,420 1,433
Residential mortgage loans 1,874 1,870 1,880 1,865 1,859
Consumer loans:
Home equity 1,738 1,720 1,714 1,682 1,678
Other consumer 745 765 777 796 744
-------------- --- --- --- --- ---
Total consumer loans 2,483 2,485 2,491 2,478 2,422
-------------------- ----- ----- ----- ----- -----
Total loans $49,377 $49,084 $48,942 $49,741 $49,072
----------- ------- ------- ------- ------- -------
Goodwill $635 $635 $635 $635 $635
Core deposit intangible 9 10 10 11 12
Other intangibles 4 4 4 4 3
Common equity tier 1
capital (a) 7,331 7,350 7,327 7,280 7,230
Risk-weighted assets (a) 69,427 69,731 69,718 69,967 69,514
Common equity tier 1 and
tier 1 risk-based capital
ratio (a) 10.56% 10.54% 10.51% 10.40% 10.40%
Total risk-based capital
ratio (a) 12.82 12.69 12.82 12.38 12.35
Leverage ratio (a) 10.60 10.22 10.28 10.56 10.53
Tangible common equity
ratio (b) 10.23 9.70 9.91 9.92 9.97
Common shareholders' equity
per share of common stock $43.66 $43.03 $43.02 $42.18 $42.12
Tangible common equity per
share of common stock (b) 39.96 39.33 39.36 38.53 38.47
Market value per share for the quarter:
High 41.74 47.44 52.93 53.45 47.94
Low 30.48 39.52 40.01 44.38 40.09
Close 37.87 41.83 41.10 51.32 45.13
Quarterly ratios:
Return on average common
shareholders' equity 3.13% 6.08% 7.19% 7.21% 7.20%
Return on average assets 0.34 0.64 0.76 0.79 0.78
Efficiency ratio (c) 66.07 69.00 66.98 63.49 68.37
Number of banking centers 477 477 477 477 482
Number of employees -full
time equivalent 8,869 8,880 8,941 8,901 8,831
------------------------- ----- ----- ----- ----- -----
(a) March 31, 2016 amounts and ratios
are estimated.
(b) See Reconciliation of Non-GAAP
Financial Measures.
(c) Noninterest expenses as a percentage
of the sum of net interest income
(FTE) and noninterest income
excluding net securities gains
(losses).
PARENT COMPANY ONLY BALANCE SHEETS (unaudited)
Comerica Incorporated
March 31, December 31, March 31,
(in millions, except share
data) 2016 2015 2015
-------------------------- ---- ---- ----
ASSETS
Cash and due from
subsidiary bank $5 $4 $5
Short-term investments
with subsidiary bank 546 569 1,139
Other short-term
investments 84 89 95
Investment in subsidiaries,
principally banks 7,612 7,523 7,479
Premises and equipment 2 3 2
Other assets 172 137 158
------------ --- --- ---
Total assets $8,421 $8,325 $8,878
------------ ------ ------ ------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Medium- and long-term debt $626 $608 $1,216
Other liabilities 151 157 162
----------------- --- --- ---
Total liabilities 777 765 1,378
Common stock -$5 par
value:
Authorized -325,000,000
shares
Issued -228,164,824 shares 1,141 1,141 1,141
Capital surplus 2,158 2,173 2,188
Accumulated other
comprehensive loss (328) (429) (370)
Retained earnings 7,097 7,084 6,841
Less cost of common stock
in treasury -53,086,733
shares at 3/31/16,
52,457,113 shares at
12/31/15 and 50,114,399
shares at 3/31/15 (2,424) (2,409) (2,300)
------------------------- ------ ------ ------
Total shareholders' equity 7,644 7,560 7,500
-------------------------- ----- ----- -----
Total liabilities and
shareholders' equity $8,421 $8,325 $8,878
--------------------- ------ ------ ------
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,
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
-------------------- ----- ------ ------ ----- ------ ------- ------
BALANCE AT DECEMBER 31,
2015 175.7 $1,141 $2,173 $(429) $7,084 $(2,409) $7,560
Net income - - - - 60 - 60
Other comprehensive
income, net of tax - - - 101 - - 101
Cash dividends declared
on common stock ($0.21
per share) - - - - (37) - (37)
Purchase of common
stock (1.4) - - - - (49) (49)
Net issuance of common
stock under employee
stock plans 0.8 - (35) - (10) 34 (11)
Share-based
compensation - - 20 - - - 20
BALANCE AT MARCH 31,
2016 175.1 $1,141 $2,158 $(328) $7,097 $(2,424) $7,644
-------------------- ----- ------ ------ ----- ------ ------- ------
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts
in millions) Business Retail Wealth
Three Months
Ended March
31, 2016 Bank Bank Management Finance Other Total
------------ ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest
income
(expense)
(FTE) $365 $157 $43 $(121) $4 $448
Provision for
credit losses 151 3 (5) - (1) 148
Noninterest
income 135 43 59 14 (5) 246
Noninterest
expenses 207 179 73 2 (1) 460
Provision
(benefit) for
income taxes
(FTE) 47 6 12 (41) 2 26
--- --- --- --- ---
Net income
(loss) $95 $12 $22 $(68) $(1) $60
--- --- --- ---- --- ---
Net credit-
related
charge-offs
(recoveries) $57 $2 $(1) $ - $ - $58
Selected average balances:
Assets $38,635 $6,544 $5,162 $14,186 $4,701 $69,228
Loans 37,561 5,867 4,964 - - 48,392
Deposits 29,108 23,110 4,171 103 216 56,708
Statistical data:
Return on
average assets
(a) 0.98% 0.20% 1.70% N/M N/M 0.34%
Efficiency
ratio (b) 41.41 88.47 71.32 N/M N/M 66.07
----- ----- ----- --- --- -----
Business Retail Wealth
Three Months
Ended December
31, 2015 Bank Bank Management Finance Other Total
--------------- ---- ---- ---------- ------- ----- -----
Earnings summary:
Net interest
income
(expense)
(FTE) $387 $160 $47 $(162) $2 $434
Provision for
credit losses 41 23 (7) - 3 60
Noninterest
income 145 49 57 15 2 268
Noninterest
expenses 206 191 81 2 4 484
Provision
(benefit) for
income taxes
(FTE) 85 (4) 9 (47) (1) 42
--- --- --- --- ---
Net income
(loss) $200 $(1) $21 $(102) $(2) $116
---- --- --- ----- --- ----
Net credit-
related
charge-offs
(recoveries) $35 $25 $(9) $ - $ - $51
Selected average balances:
Assets $38,765 $6,549 $5,199 $12,678 $8,716 $71,907
Loans 37,682 5,868 4,998 - - 48,548
Deposits 31,738 23,262 4,355 120 261 59,736
Statistical data:
Return on
average assets
(a) 2.06% (0.03)% 1.68% N/M N/M 0.64%
Efficiency
ratio (b) 38.73 91.68 77.01 N/M N/M 69.00
---------- ----- ----- ----- --- --- -----
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 140 41 58 12 1 252
Noninterest
expenses 198 174 77 2 5 456
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 $38,654 $6,368 $5,029 $12,137 $6,547 $68,735
Loans 37,623 5,694 4,834 - - 48,151
Deposits 30,143 22,404 3,996 170 277 56,990
Statistical data:
Return on
average assets
(a) 1.95% 0.30% 1.29% N/M N/M 0.78%
Efficiency
ratio (b) 38.88 90.68 74.59 N/M N/M 68.37
---------- ----- ----- ----- --- --- -----
(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, 2016 Michigan California Texas Markets & Other Total
------------ -------- ---------- ----- ------- ------- -----
Earnings summary:
Net interest
income
(expense)
(FTE) $176 $179 $123 $87 $(117) $448
Provision for
credit losses (6) (6) 169 (8) (1) 148
Noninterest
income 76 38 30 93 9 246
Noninterest
expenses 150 104 100 105 1 460
Provision
(benefit) for
income taxes
(FTE) 36 45 (40) 24 (39) 26
--- --- --- --- --- ---
Net income
(loss) $72 $74 $(76) $59 $(69) $60
--- --- ---- --- ---- ---
Net credit-
related
charge-offs
(recoveries) $5 $8 $47 $(2) $ - $58
Selected average balances:
Assets $13,402 $17,541 $11,295 $8,103 $18,887 $69,228
Loans 12,774 17,283 10,763 7,572 - 48,392
Deposits 21,696 16,654 10,374 7,665 319 56,708
Statistical data:
Return on
average assets
(a) 1.27% 1.68% (2.52)% 2.87% N/M 0.34%
Efficiency
ratio (b) 59.31 47.87 65.09 58.09 N/M 66.07
---------- ----- ----- ----- ----- --- -----
Other Finance
Three Months
Ended December
31, 2015 Michigan California Texas Markets & Other Total
--------------- -------- ---------- ----- ------- ------- -----
Earnings summary:
Net interest
income
(expense)
(FTE) $183 $193 $131 $87 $(160) $434
Provision for
credit losses (12) (7) 57 19 3 60
Noninterest
income 81 40 32 98 17 268
Noninterest
expenses 160 107 103 108 6 484
Provision
(benefit) for
income taxes
(FTE) 33 43 6 8 (48) 42
--- --- --- --- --- ---
Net income
(loss) $83 $90 $(3) $50 $(104) $116
--- --- --- --- ----- ----
Net credit-
related
charge-offs
(recoveries) $(2) $1 $33 $19 $ - $51
Selected average balances:
Assets $13,601 $17,297 $11,474 $8,141 $21,394 $71,907
Loans 12,986 17,033 10,893 7,636 - 48,548
Deposits 22,123 18,545 10,807 7,880 381 59,736
Statistical data:
Return on
average assets
(a) 1.43% 1.83% (0.10)% 2.36% N/M 0.64%
Efficiency
ratio (b) 60.92 45.99 62.85 58.01 N/M 69.00
---------- ----- ----- ----- ----- --- -----
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 84 34 34 87 13 252
Noninterest
expenses 155 97 94 103 7 456
Provision
(benefit) for
income taxes
(FTE) 38 44 18 16 (54) 62
--- --- --- --- --- ---
Net income
(loss) $76 $72 $32 $42 $(88) $134
--- --- --- --- ---- ----
Net credit-
related
charge-offs $3 $1 $3 $1 $ - $8
Selected average balances:
Assets $13,736 $16,461 $12,192 $7,662 $18,684 $68,735
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) 1.36% 1.61% 0.99% 2.21% N/M 0.78%
Efficiency
ratio (b) 59.51 46.21 57.48 60.77 N/M 68.37
---------- ----- ----- ----- ----- --- -----
(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) 2016 2015 2015 2015 2015
------------------ ---- ---- ---- ---- ----
Tangible Common Equity Ratio:
Common shareholders'
equity $7,644 $7,560 $7,622 $7,523 $7,500
Less:
Goodwill 635 635 635 635 635
Other intangible
assets 13 14 14 15 15
--- --- --- --- ---
Tangible common
equity $6,996 $6,911 $6,973 $6,873 $6,850
--------------- ------ ------ ------ ------ ------
Total assets $69,007 $71,877 $71,012 $69,945 $69,333
Less:
Goodwill 635 635 635 635 635
Other intangible
assets 13 14 14 15 15
--- --- --- --- ---
Tangible assets $68,359 $71,228 $70,363 $69,295 $68,683
--------------- ------- ------- ------- ------- -------
Common equity ratio 11.08% 10.52% 10.73% 10.76% 10.82%
Tangible common
equity ratio 10.23 9.70 9.91 9.92 9.97
--------------- ----- ---- ---- ---- ----
Tangible Common Equity per Share of
Common Stock:
Common shareholders'
equity $7,644 $7,560 $7,622 $7,523 $7,500
Tangible common
equity 6,996 6,911 6,973 6,873 6,850
--------------- ----- ----- ----- ----- -----
Shares of common
stock outstanding
(in millions) 175 176 177 178 178
------------------ --- --- --- --- ---
Common shareholders'
equity per share of
common stock $43.66 $43.03 $43.02 $42.18 $42.12
Tangible common
equity per share of
common stock 39.96 39.33 39.36 38.53 38.47
-------------------- ----- ----- ----- ----- -----
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
