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Comerica Reports First Quarter 2014 Net Income of $139 Million, or 73 Cents Per Share, Up 4 Percent From First Quarter 2013
$1 Billion Loan Growth Over Fourth Quarter 2013; Increases in Nearly All Business Lines
Drive for Efficiency Demonstrated in Well-Controlled Expenses
Continued to Maintain Strong Capital Ratios While Returning $107 Million to Shareholders

DALLAS, April 15, 2014 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported first quarter 2014 net income of $139 million, compared to $117 million for the fourth quarter 2013 and $134 million for the first quarter 2013. Earnings per diluted share were 73 cents for the first quarter 2014, compared to 62 cents for the fourth quarter 2013 and 70 cents for the first quarter 2013.

 
                         

(dollar amounts in millions, except per share data)

1st Qtr '14

 

4th Qtr '13

 

1st Qtr '13

 

Net interest income (a)

$

410

   

$

430

   

$

416

   

Provision for credit losses

9

   

9

   

16

   

Noninterest income

208

   

219

   

213

   

Noninterest expenses (b)

406

   

473

   

416

   

Provision for income taxes

64

   

50

   

63

   
             

Net income

139

   

117

   

134

   
             

Net income attributable to common shares

137

   

115

   

132

   
             

Diluted income per common share

0.73

   

0.62

   

0.70

   
             

Average diluted shares (in millions)

187

   

186

   

187

   
             

Tier 1 common capital ratio (d)

10.54

%

(c)

10.64

%

 

10.37

%

 

Basel III common equity Tier 1 capital ratio (d) (e)

10.3

   

10.3

   

10.1

   

Tangible common equity ratio (d)

10.20

   

10.07

   

9.86

   

(a)

Included accretion of the purchase discount on the acquired loan portfolio of $12 million, $23 million and $11 million in the first quarter 2014, fourth quarter 2013 and first quarter 2013, respectively.

(b)

Included litigation-related expense of $3 million, $52 million and $3 million in the first quarter 2014, fourth quarter 2013 and first quarter 2013, respectively.

(c)

March 31, 2014 ratio is estimated.

(d)

See Reconciliation of Non-GAAP Financial Measures.

(e)

Estimated ratios based on the standardized approach in the final rule and excluding most elements of accumulated other comprehensive income (AOCI).

 

"Comerica's first quarter 2014 financial results reflect solid loan growth across our footprint and nearly all of our business lines," said Ralph W. Babb Jr., chairman and chief executive officer. "The more than $1 billion, or 2 percent, increase in average total loans, compared to the fourth quarter 2013, was led by increases in general Middle Market, Commercial Real Estate, Energy, Technology & Life Sciences, and Corporate Banking, partially offset by a decrease in Mortgage Banker Finance. Other highlights in the first quarter included an increase of $458 million in period-end deposits, to $53.8 billion. We also had continued strong credit quality and well-controlled expenses. The deep and enduring relationships we have with our customers are making a positive difference in our bottom line.

"Our capital position remains a source of strength to support our growth. We repurchased 6.9 million shares under our 2013 capital plan, including 1.5 million shares in the first quarter of 2014. Combined with dividends, we returned $107 million, or 77 percent of first quarter net income, to shareholders. We were pleased the Federal Reserve did not object to our 2014 capital plan and contemplated capital distributions, including up to $236 million in share repurchases for the four-quarter period that ends in the first quarter of 2015. We remain focused on providing a good return to shareholders while maintaining our strong capital ratios."

First Quarter 2014 Compared to Fourth Quarter 2013

  • Average total loans increased $1.0 billion, or 2 percent, to $45.1 billion, primarily reflecting increases of $679 million, or 2 percent, in commercial loans and $231 million, or 2 percent, in combined commercial mortgage and real estate construction loans. The increase in commercial loans was reflected in almost all lines of business. Period-end total loans increased $1.0 billion, or 2 percent, to $46.5 billion, primarily reflecting a $959 million, or 3 percent, increase in commercial loans. The increase in commercial loans was primarily driven by increases in general Middle Market, Energy, Corporate Banking and Technology and Life Sciences.
  • Average total deposits were stable at $52.8 billion, primarily reflecting a decrease in noninterest-bearing deposits of $296 million, partially offset by an increase in money market and interest-bearing checking deposits of $231 million. Period-end deposits increased $458 million, to $53.8 billion.
  • Net interest income decreased $20 million to $410 million in the first quarter 2014, compared to $430 million in the fourth quarter 2013, and reflected decreases in both the accretion of the purchase discount on the acquired loan portfolio from an unusually high fourth quarter amount and interest collected on nonaccrual loans, as well as the impact of two fewer days in the first quarter 2014. The benefit from an increase in loan balances largely offset the impact of lower loan yields.
  • The provision for credit losses was stable at $9 million in the first quarter 2014, reflecting continued strong credit quality. Net charge-offs were $12 million, or 0.10 percent of average loans, in the first quarter 2014.
  • Noninterest income decreased $11 million to $208 million in the first quarter 2014, reflecting decreases of $6 million in customer-driven income and $5 million in noncustomer-driven income.
  • Noninterest expenses decreased $67 million to $406 million in the first quarter 2014, primarily reflecting a $49 million decrease in litigation-related expenses and an $11 million decrease in salaries and benefits expense, largely due to a decrease in pension expense.
  • As previously announced, the Federal Reserve completed its 2014 Comprehensive Capital Analysis and Review (CCAR) in March 2014 and did not object to the capital distributions contemplated in Comerica's capital plan, including up to $236 million in share repurchases for the four-quarter period ending first quarter 2015.
  • Capital remained solid at March 31, 2014, as evidenced by an estimated Tier 1 common capital ratio of 10.54 percent and a tangible common equity ratio of 10.20 percent.

First Quarter 2014 Compared to First Quarter 2013

  • Average total loans increased $458 million, or 1 percent, primarily reflecting an increase of $306 million, or 1 percent, in commercial loans, partially offset by a decrease of $115 million, or 1 percent, in combined commercial mortgage and real estate construction loans. The increase in commercial loans was primarily driven by increases in National Dealer Services, Technology and Life Sciences, and general Middle Market, partially offset by a decrease in Mortgage Banker Finance.
  • Average total deposits increased $2.1 billion, or 4 percent, primarily reflecting increases of $1.7 billion, or 8 percent, in noninterest-bearing deposits and $348 million, or 1 percent, in interest-bearing deposits.
  • Net income increased $5 million, or 4 percent, primarily the result of lower noninterest expenses and a decrease in the provision for credit losses, partially offset by decreases in net interest income and noncustomer-driven noninterest income.

Net Interest Income

                       

(dollar amounts in millions)

1st Qtr '14

 

4th Qtr '13

 

1st Qtr '13

Net interest income

$

410

   

$

430

   

$

416

 
           

Net interest margin

2.77

%

 

2.86

%

 

2.88

%

           

Selected average balances:

         

Total earning assets

$

59,916

   

$

59,924

   

$

58,607

 

Total loans

45,075

   

44,054

   

44,617

 

Total investment securities

9,282

   

9,365

   

10,021

 

Federal Reserve Bank deposits (excess liquidity)

5,311

   

6,260

   

3,669

 
           
           

Total deposits

52,770

   

52,769

   

50,692

 

Total noninterest-bearing deposits

23,236

   

23,532

   

21,506

 
  • Net interest income of $410 million in the first quarter 2014 decreased $20 million compared to the fourth quarter 2013.
    • Interest on loans decreased by $21 million, including decreases in both the accretion of the purchase discount on the acquired loan portfolio from an unusually high fourth quarter 2013 amount (-$11 million) and interest collected on nonaccrual loans (-$2 million), as well as the impact of two fewer days in the first quarter (-$7 million). The benefit from an increase in loan balances (+$8 million) largely offset the impact of lower loan yields (-$9 million).
  • The net interest margin of 2.77 percent decreased 9 basis points compared to the fourth quarter 2013. The decrease in net interest margin was primarily due to decreases in both the accretion of the purchase discount on the acquired loan portfolio from an unusually high fourth quarter 2013 amount (-8 basis points) and interest collected on nonaccrual loans (-1 basis point), as well as lower loan yields (-4 basis points), partially offset by the impact of a decrease in excess liquidity (+4 basis points).
  • Average earning assets remained stable at $59.9 billion in the first quarter 2014, compared to the fourth quarter 2013, as an increase of $1.0 billion in average loans offset a decrease of $949 million in excess liquidity.

Noninterest Income
Noninterest income decreased $11 million to $208 million for the first quarter 2014, compared to $219 million for the fourth quarter 2013. Customer-driven fee income decreased $6 million and noncustomer-driven income decreased $5 million. The decrease in customer-driven fee income was primarily due to a $7 million decrease in syndication agent fees, a component of commercial lending fees. The decrease in noncustomer-driven income was primarily due to a $4 million decrease in deferred compensation plan asset returns, which was offset by a decrease in deferred compensation expense in noninterest expenses.

Comerica early adopted an amendment to U.S. generally accepted accounting principles in the first quarter 2014 related to the accounting for affordable housing projects that qualify for the low-income housing tax credit. Amortization of the initial investment cost of qualifying projects is now recorded in the provision for income taxes together with the tax credits and benefits received. Previously, the amortization was recorded as a reduction to other noncustomer-driven noninterest income. All prior period amounts have been restated to reflect the adoption of the amendment, which resulted in offsetting increases to other noninterest income and the provision for income taxes of $14 million, $15 million and $13 million in the first quarter 2014, fourth quarter 2013 and first quarter 2013, respectively.

Noninterest Expenses
Noninterest expenses decreased $67 million to $406 million for the first quarter 2014, compared to $473 million for the fourth quarter 2013, primarily reflecting a $49 million decrease in litigation-related expenses, an $11 million decrease in salaries and benefits expense and small decreases in several other categories of noninterest expense. The decrease in litigation-related expenses reflected the impact of high fourth quarter 2013 expense due to an unfavorable jury verdict in a lender liability case. The decrease in salaries and benefits expense primarily reflected a $13 million decrease in pension expense.

Credit Quality

                       

(dollar amounts in millions)

1st Qtr '14

 

4th Qtr '13

 

1st Qtr '13

Net credit-related charge-offs

$

12

   

$

13

   

$

24

 

Net credit-related charge-offs/Average total loans

0.10

%

 

0.12

%

 

0.21

%

           

Provision for credit losses

$

9

   

$

9

   

$

16

 
           

Nonperforming loans (a)

338

   

374

   

515

 

Nonperforming assets (NPAs) (a)

352

   

383

   

555

 

NPAs/Total loans and foreclosed property

0.76

%

 

0.84

%

 

1.23

%

           

Loans past due 90 days or more and still accruing

$

10

   

$

16

   

$

25

 
           

Allowance for loan losses

594

   

598

   

617

 

Allowance for credit losses on lending-related commitments (b)

37

   

36

   

36

 

Total allowance for credit losses

631

   

634

   

653

 
           

Allowance for loan losses/Period-end total loans

1.28

%

 

1.32

%

 

1.37

%

Allowance for loan losses/Nonperforming loans

176

   

160

   

120

 
     

(a)

Excludes loans acquired with credit impairment.

 

(b)

Included in "Accrued expenses and other liabilities" on the consolidated balance sheets.

  • Nonaccrual loans decreased $33 million, to $317 million at March 31, 2014, compared to $350 million at December 31, 2013.
  • Criticized loans decreased $121 million, to $2.1 billion at March 31, 2014, compared to $2.3 billion at December 31, 2013.
  • During the first quarter 2014, $19 million of borrower relationships over $2 million were transferred to nonaccrual status, a decrease of $4 million from the fourth quarter 2013.

Balance Sheet and Capital Management
Total assets and common shareholders' equity were $65.7 billion and $7.3 billion, respectively, at March 31, 2014, compared to $65.2 billion and $7.2 billion, respectively, at December 31, 2013.

There were approximately 182 million common shares outstanding at March 31, 2014. Diluted weighted-average shares increased to 187 million in the first quarter 2014 as an increase in share dilution from options and warrants due to an increase in Comerica's stock price outpaced the impact of the repurchase of 1.5 million shares of common stock under the share repurchase program. Combined with the dividend of $0.19 per share, share repurchases of $72 million and dividends returned 77 percent of first quarter 2014 net income to shareholders.

The Federal Reserve completed its 2014 CCAR review in March 2014 and did not object to Comerica's capital plan and capital distributions contemplated in the plan. Comerica's capital plan provides for up to $236 million in share repurchases for the four-quarter period ending March 31, 2015, as well as the authority to fully redeem $150 million par value of subordinated notes due, 2024. The notes are callable at par on or after July 15, 2014 and were recorded at a carrying value of $183 million at March 31, 2014. Due to the lack of certainty about the possible execution and timing of the call, the impact of the call is not reflected in the outlook for 2014. Comerica's capital plan further contemplates a 1-cent increase in the quarterly dividend to $0.20 per common share. The dividend proposal will be considered by Comerica's Board of Directors at its next scheduled meeting on April 22, 2014. 

Comerica's tangible common equity ratio was 10.20 percent at March 31, 2014, an increase of 13 basis points from December 31, 2013. The estimated Tier 1 common capital ratio decreased 10 basis points, to 10.54 percent at March 31, 2014, from December 31, 2013. The estimated common equity Tier 1 ratio under fully phased-in Basel III capital rules and excluding most elements of AOCI was 10.3 percent percent at March 31, 2014.

Full-Year 2014 Outlook
Management expectations for full-year 2014, compared to 2013, assuming a continuation of the current economic and low rate environment, are as follows:

  • Average loan growth consistent with 3 percent growth achieved in 2013, reflecting stabilization in Mortgage Banker Finance near average fourth quarter 2013 level and continued focus on pricing and structure discipline.
  • Net interest income modestly lower, reflecting a decline in purchase accounting accretion, to $20 million to $30 million, and the effect of continued pressure from the low rate environment, partially offset by loan growth.
  • Provision for credit losses and net charge-offs stable. Increases to the allowance for credit losses due to loan growth offset by continued strong credit quality.
  • Noninterest income modestly lower, reflecting stable customer-driven fee income and lower noncustomer-driven income. Growth in fiduciary income and card fees offset by lower capital market activity.
  • Noninterest expenses lower, reflecting lower litigation-related expenses and a more than 50 percent decrease in pension expense, to $35 million to $40 million.
  • Income tax expense to approximate 32 percent of pre-tax income, reflecting the change in accounting for affordable housing projects that qualify for the low-income tax credit.

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, 2014 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2014 results compared to fourth quarter 2013.

The following table presents net income (loss) by business segment.

                                   

(dollar amounts in millions)

1st Qtr '14

 

4th Qtr '13

 

1st Qtr '13

Business Bank

$

198

 

85

%

 

$

170

 

82

%

 

$

198

 

85

%

Retail Bank

9

 

4

   

15

 

7

   

10

 

4

 

Wealth Management

26

 

11

   

24

 

11

   

25

 

11

 
 

233

 

100

%

 

209

 

100

%

 

233

 

100

%

Finance

(92)

     

(92)

     

(98)

   

Other (a)

(2)

     

     

(1)

   

     Total

$

139

     

$

117

     

$

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 '14

   

4th Qtr '13

   

1st Qtr '13

 

Net interest income (FTE)

$

371

   

$

387

   

$

375

 

Provision for credit losses

16

   

24

   

20

 

Noninterest income

87

   

95

   

90

 

Noninterest expenses

146

   

198

   

146

 

Net income

198

   

170

   

198

 
           

Net credit-related charge-offs

11

   

6

   

16

 
           

Selected average balances:

         

Assets

35,896

   

35,042

   

35,780

 

Loans

34,927

   

34,020

   

34,753

 

Deposits

27,023

   

26,873

   

25,514

 
  • Average loans increased $907 million, primarily reflecting increases in general Middle Market, Commercial Real Estate, Energy, Technology and Life Sciences, and Corporate Banking, partially offset by decreases in Mortgage Banker Finance and Entertainment.
  • Average deposits increased $150 million, primarily reflecting increases in Technology and Life Sciences and general Middle Market, partially offset by declines in Corporate Banking and Energy.
  • Net interest income decreased $16 million, primarily due to a decrease in purchase accounting accretion, two fewer days in the first quarter and lower loan yields, partially offset by the benefit provided by an increase in average loans.
  • The provision for credit losses decreased $8 million, primarily reflecting decreases in Corporate Banking and general Middle Market, partially offset by increases in Technology and Life Sciences and Commercial Real Estate.
  • Noninterest income decreased $8 million, primarily due to decreases in commercial lending fees and securities trading income.
  • Noninterest expenses decreased $52 million, primarily due to a decrease in litigation-related expenses from high fourth quarter expense due to an unfavorable jury verdict in a lender liability case.

Retail Bank

             
                       

(dollar amounts in millions)

1st Qtr '14

   

4th Qtr '13

   

1st Qtr '13

 

Net interest income (FTE)

$

146

   

$

150

   

$

155

 

Provision for credit losses

2

   

(8)

   

6

 

Noninterest income

41

   

43

   

41

 

Noninterest expenses

171

   

178

   

175

 

Net income

9

   

15

   

10

 
           

Net credit-related charge-offs

4

   

4

   

8

 
           

Selected average balances:

         

Assets

6,052

   

5,997

   

5,973

 

Loans

5,381

   

5,323

   

5,276

 

Deposits

21,361

   

21,438

   

21,049

 
  • Average loans increased $58 million, primarily due to an increase in Retail Banking.
  • Average deposits decreased $77 million, primarily due to a decrease in Small Business, partially offset by an increase in Retail Banking.
  • Net interest income decreased $4 million, primarily due to lower loan yields and two fewer days in the first quarter.
  • The provision for credit losses of $2 million increased $10 million, primarily reflecting an increase in Small Business.
  • Noninterest expenses decreased $7 million, primarily due to a decrease in salaries and benefits expense.

Wealth Management

             
                       

(dollar amounts in millions)

1st Qtr '14

   

4th Qtr '13

   

1st Qtr '13

 

Net interest income (FTE)

$

46

   

$

47

   

$

46

 

Provision for credit losses

(8)

   

(9)

   

(6)

 

Noninterest income

64

   

61

   

65

 

Noninterest expenses

78

   

80

   

79

 

Net income

26

   

24

   

25

 
           

Net credit-related (recoveries) charge-offs

(3)

   

3

   

 
           

Selected average balances:

         

Assets

4,939

   

4,873

   

4,738

 

Loans

4,767

   

4,711

   

4,588

 

Deposits

3,816

   

3,933

   

3,682

 
  • Average loans increased $56 million, primarily due to an increase in Private Banking.
  • Average deposits decreased $117 million, primarily due to a decrease in Private Banking.
  • Noninterest income increased $3 million, primarily due to an increase in fiduciary income and small increases in several other categories of noninterest income.
  • Noninterest expenses decreased $2 million, primarily due to a decrease in 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, 2014 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 '14

 

4th Qtr '13

 

1st Qtr '13

Michigan

$

68

 

29

%

 

$

32

 

15

%

 

$

78

 

34

%

California

63

 

27

   

77

 

37

   

56

 

24

 

Texas

46

 

20

   

53

 

25

   

43

 

18

 

Other Markets

56

 

24

   

47

 

23

   

56

 

24

 
 

233

 

100

%

 

209

 

100

%

 

233

 

100

%

Finance & Other (a)

(94)

     

(92)

     

(99)

   

     Total

$

139

     

$

117

     

$

134

   

(a) Includes items not directly associated with the geographic markets.

     
  • Average loans increased $150 million, $393 million and $598 million in Michigan, California and Texas, respectively. The increase in average loans was broad-based with increases in nearly all business lines.
  • Average deposits increased $141 million in Michigan primarily due to an increase in Corporate Banking, partially offset by a decrease in general Middle Market. In California, average deposits decreased $437 million, primarily due to decreases in Corporate Banking and Private Banking, partially offset by an increase in Technology and Life Sciences. The increase in Texas of $339 million was primarily due to increases in Technology and Life Sciences and general Middle Market, partially offset by a decrease in Energy.
  • Net interest income decreased in all markets, primarily reflecting the impact of two fewer days in the first quarter 2014 and, in Texas, a decrease in accretion on the acquired loan portfolio from an unusually high fourth quarter 2013 amount. The benefit from an increase in loan balances largely offset the impact of lower loan yields.
  • The provision for credit losses increased $19 million in California, primarily due to increases in general Middle Market, Commercial Real Estate and Technology and Life Sciences. In Other Markets, the provision declined $13 million, primarily due to decreases in Private Banking and Corporate Banking.
  • Noninterest expenses in Michigan decreased $57 million, primarily due to a decrease in litigation-related expenses from high fourth quarter expense due to an unfavorable jury verdict in a lender liability case.

Michigan Market

             
                       

(dollar amounts in millions)

1st Qtr '14

   

4th Qtr '13

   

1st Qtr '13

 

Net interest income (FTE)

$

183

   

$

187

   

$

190

 

Provision for credit losses

3

   

7

   

(7)

 

Noninterest income

87

   

89

   

92

 

Noninterest expenses

161

   

218

   

168

 

Net income

68

   

32

   

78

 
           

Net credit-related charge-offs (recoveries)

   

(4)

   

5

 
           

Selected average balances:

         

Assets

13,819

   

13,712

   

14,042

 

Loans

13,473

   

13,323

   

13,650

 

Deposits

20,642

   

20,501

   

20,254

 

 

California Market

               
                       

(dollar amounts in millions)

1st Qtr '14

   

4th Qtr '13

   

1st Qtr '13

 

Net interest income (FTE)

$

172

   

$

176

   

$

171

 

Provision for credit losses

11

   

(8)

   

21

 

Noninterest income

34

   

37

   

35

 

Noninterest expenses

96

   

98

   

97

 

Net income

63

   

77

   

56

 
           

Net credit-related charge-offs (recoveries)

10

   

(2)

   

10

 
           

Selected average balances:

         

Assets

15,133

   

14,710

   

13,795

 

Loans

14,824

   

14,431

   

13,542

 

Deposits

14,782

   

15,219

   

14,356

 

 

Texas Market

               
                       

(dollar amounts in millions)

1st Qtr '14

   

4th Qtr '13

   

1st Qtr '13

 

Net interest income (FTE)

$

136

   

$

147

   

$

134

 

Provision for credit losses

6

   

5

   

8

 

Noninterest income

31

   

33

   

31

 

Noninterest expenses

90

   

91

   

91

 

Net income

46

   

53

   

43

 
           

Net credit-related charge-offs

6

   

13

   

6

 
           

Selected average balances:

         

Assets

11,070

   

10,458

   

10,795

 

Loans

10,364

   

9,766

   

10,071

 

Deposits

10,875

   

10,536

   

9,959

 

Conference Call and Webcast
Comerica will host a conference call to review first quarter 2014 financial results at 7 a.m. CT Tuesday, April 15, 2014. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 10261396). 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; volatility and disruptions in global capital and credit markets; changes in Comerica's credit rating; the interdependence of financial service companies; changes in regulation or oversight; unfavorable developments concerning credit quality; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers; operational difficulties, failure of technology infrastructure or information security incidents; 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; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; competitive product and pricing pressures among financial institutions within Comerica's markets; changes in customer behavior; 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 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, 2013. Forward-looking statements speak only as of the date they are made. Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this news release or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

 
                   

CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)

Comerica Incorporated and Subsidiaries

     
       
 

Three Months Ended

 

March 31,

December 31,

March 31,

(in millions, except per share data)

2014

2013

2013

PER COMMON SHARE AND COMMON STOCK DATA

     

Diluted net income

$

0.73

 

$

0.62

 

$

0.70

 

Cash dividends declared

0.19

 

0.17

 

0.17

 

Common shareholders' equity (at period end)

40.09

 

39.23

 

37.41

 

Tangible common equity (at period end) (a)

36.50

 

35.65

 

33.90

 
       

Average diluted shares (in thousands)

186,701

 

186,166

 

187,442

 

KEY RATIOS

     

Return on average common shareholders' equity

7.68

%

6.66

%

7.68

%

Return on average assets

0.86

 

0.72

 

0.84

 

Tier 1 common capital ratio (a) (b)

10.54

 

10.64

 

10.37

 

Tier 1 risk-based capital ratio (b)

10.54

 

10.64

 

10.37

 

Total risk-based capital ratio (b)

12.95

 

13.10

 

13.41

 

Leverage ratio (b)

10.85

 

10.77

 

10.75

 

Tangible common equity ratio (a)

10.20

 

10.07

 

9.86

 

AVERAGE BALANCES

     

Commercial loans

$

28,362

 

$

27,683

 

$

28,056

 

Real estate construction loans:

     

Commercial Real Estate business line (c)

1,505

 

1,363

 

1,116

 

Other business lines (d)

322

 

289

 

198

 

Total real estate construction loans

1,827

 

1,652

 

1,314

 

Commercial mortgage loans:

     

Commercial Real Estate business line (c)

1,734

 

1,608

 

1,836

 

Other business lines (d)

7,036

 

7,106

 

7,562

 

Total commercial mortgage loans

8,770

 

8,714

 

9,398

 

Lease financing

848

 

838

 

857

 

International loans

1,301

 

1,303

 

1,282

 

Residential mortgage loans

1,724

 

1,679

 

1,556

 

Consumer loans

2,243

 

2,185

 

2,154

 

Total loans

45,075

 

44,054

 

44,617

 
       

Earning assets

59,916

 

59,924

 

58,607

 

Total assets

64,708

 

64,605

 

63,451

 
       

Noninterest-bearing deposits

23,236

 

23,532

 

21,506

 

Interest-bearing deposits

29,534

 

29,237

 

29,186

 

Total deposits

52,770

 

52,769

 

50,692

 
       

Common shareholders' equity

7,229

 

7,010

 

6,956

 

NET INTEREST INCOME

     

Net interest income (fully taxable equivalent basis)

$

411

 

$

431

 

$

416

 

Fully taxable equivalent adjustment

1

 

1

 

 

Net interest margin (fully taxable equivalent basis)

2.77

%

2.86

%

2.88

%

CREDIT QUALITY

     

Nonaccrual loans

$

317

 

$

350

 

$

494

 

Reduced-rate loans

21

 

24

 

21

 

Total nonperforming loans (e)

338

 

374

 

515

 

Foreclosed property

14

 

9

 

40

 

Total nonperforming assets (e)

352

 

383

 

555

 
       

Loans past due 90 days or more and still accruing

10

 

16

 

25

 
       

Gross loan charge-offs

30

 

41

 

38

 

Loan recoveries

18

 

28

 

14

 

Net loan charge-offs

12

 

13

 

24

 
       

Allowance for loan losses

594

 

598

 

617

 

Allowance for credit losses on lending-related commitments

37

 

36

 

36

 

Total allowance for credit losses

631

 

634

 

653

 
       

Allowance for loan losses as a percentage of total loans

1.28

%

1.32

%

1.37

%

Net loan charge-offs as a percentage of average total loans (f)

0.10

 

0.12

 

0.21

 

Nonperforming assets as a percentage of total loans and foreclosed property (e)

0.76

 

0.84

 

1.23

 

Allowance for loan losses as a percentage of total nonperforming loans

176

 

160

 

120

 
   

(a)

See Reconciliation of Non-GAAP Financial Measures.

(b)

March 31, 2014 ratios are estimated.

(c)

Primarily loans to real estate developers.

(d)

Primarily loans secured by owner-occupied real estate.

(e)

Excludes loans acquired with credit-impairment.

(f)

Lending-related commitment charge-offs were zero in all periods presented.

 
                   

 CONSOLIDATED BALANCE SHEETS

 Comerica Incorporated and Subsidiaries

     
       
 

March 31,

December 31,

March 31,

(in millions, except share data)

2014

2013

2013

 

(unaudited)

 

(unaudited)

ASSETS

     

Cash and due from banks

$

1,186

 

$

1,140

 

$

877

 
       

Interest-bearing deposits with banks

4,434

 

5,311

 

4,720

 

Other short-term investments

105

 

112

 

115

 
       

Investment securities available-for-sale

9,487

 

9,307

 

10,286

 
       

Commercial loans

29,774

 

28,815

 

28,508

 

Real estate construction loans

1,847

 

1,762

 

1,396

 

Commercial mortgage loans

8,801

 

8,787

 

9,317

 

Lease financing

849

 

845

 

853

 

International loans

1,250

 

1,327

 

1,269

 

Residential mortgage loans

1,751

 

1,697

 

1,568

 

Consumer loans

2,217

 

2,237

 

2,156

 

Total loans

46,489

 

45,470

 

45,067

 

Less allowance for loan losses

(594)

 

(598)

 

(617)

 

Net loans

45,895

 

44,872

 

44,450

 
       

Premises and equipment

583

 

594

 

618

 

Accrued income and other assets

3,991

 

3,891

 

3,819

 

Total assets

$

65,681

 

$

65,227

 

$

64,885

 
       

LIABILITIES AND SHAREHOLDERS' EQUITY

     

Noninterest-bearing deposits

$

23,955

 

$

23,875

 

$

22,777

 
       

Money market and interest-bearing checking deposits

22,485

 

22,332

 

21,540

 

Savings deposits

1,742

 

1,673

 

1,652

 

Customer certificates of deposit

5,099

 

5,063

 

5,753

 

Foreign office time deposits

469

 

349

 

395

 

Total interest-bearing deposits

29,795

 

29,417

 

29,340

 

Total deposits

53,750

 

53,292

 

52,117

 
       

Short-term borrowings

160

 

253

 

58

 

Accrued expenses and other liabilities

954

 

986

 

1,023

 

Medium- and long-term debt

3,534

 

3,543

 

4,699

 

Total liabilities

58,398

 

58,074

 

57,897

 
       

Common stock - $5 par value:

     

Authorized - 325,000,000 shares

     

Issued - 228,164,824 shares

1,141

 

1,141

 

1,141

 

Capital surplus

2,182

 

2,179

 

2,157

 

Accumulated other comprehensive loss

(325)

 

(391)

 

(410)

 

Retained earnings

6,414

 

6,321

 

6,020

 

Less cost of common stock in treasury - 46,492,524 shares at 3/31/14, 45,860,786 shares at 12/31/13 and 41,361,612 shares at 3/31/13

(2,129)

 

(2,097)

 

(1,920)

 

Total shareholders' equity

7,283

 

7,153

 

6,988

 

Total liabilities and shareholders' equity

$

65,681

 

$

65,227

 

$

64,885

 

 

 
                                                       

CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries

               
                       
 

First

Fourth

Third

Second

First

 

First Quarter 2014 Compared To:

 

Quarter

Quarter

Quarter

Quarter

Quarter

 

Fourth Quarter 2013

 

First Quarter 2013

(in millions, except per share data)

2014

2013

2013

2013

2013

 

 Amount

  Percent

 

  Amount

  Percent

INTEREST INCOME

                   

Interest and fees on loans

$

376

 

$

397

 

$

381

 

$

388

 

$

390

   

$

(21)

 

(5)%

   

$

(14)

 

(3)%

 

Interest on investment securities

55

 

55

 

54

 

52

 

53

   

 

   

2

 

2

 

Interest on short-term investments

4

 

4

 

4

 

3

 

3

   

 

   

1

 

15

 

Total interest income

435

 

456

 

439

 

443

 

446

   

(21)

 

(5)

   

(11)

 

(3)

 

INTEREST EXPENSE

                   

Interest on deposits

11

 

12

 

13

 

15

 

15

   

(1)

 

(8)

   

(4)

 

(25)

 

Interest on medium- and long-term debt

14

 

14

 

14

 

14

 

15

   

 

   

(1)

 

(13)

 

Total interest expense

25

 

26

 

27

 

29

 

30

   

(1)

 

(4)

   

(5)

 

(19)

 

Net interest income

410

 

430

 

412

 

414

 

416

   

(20)

 

(5)

   

(6)

 

(1)

 

Provision for credit losses

9

 

9

 

8

 

13

 

16

   

 

   

(7)

 

(43)

 

Net interest income after provision

for credit losses

401

 

421

 

404

 

401

 

400

   

(20)

 

(5)

   

1

 

 

NONINTEREST INCOME

                   

Service charges on deposit accounts

54

 

53

 

53

 

53

 

55

   

1

 

2

   

(1)

 

(2)

 

Fiduciary income

44

 

43

 

41

 

44

 

43

   

1

 

4

   

1

 

4

 

Commercial lending fees

20

 

28

 

28

 

22

 

21

   

(8)

 

(27)

   

(1)

 

(7)

 

Card fees

19

 

19

 

20

 

18

 

17

   

 

   

2

 

15

 

Letter of credit fees

14

 

15

 

17

 

16

 

16

   

(1)

 

(6)

   

(2)

 

(12)

 

Bank-owned life insurance

9

 

9

 

12

 

10

 

9

   

 

   

 

 

Foreign exchange income

9

 

9

 

9

 

9

 

9

   

 

   

 

 

Brokerage fees

5

 

4

 

4

 

4

 

5

   

1

 

11

   

 

 

Net securities gains (losses)

1

 

 

1

 

(2)

 

   

1

 

N/M

   

1

 

N/M

 

Other noninterest income

33

 

39

 

43

 

48

 

38

   

(6)

 

(19)

   

(5)

 

(16)

 

Total noninterest income

208

 

219

 

228

 

222

 

213

   

(11)

 

(5)

   

(5)

 

(2)

 

NONINTEREST EXPENSES

                   

Salaries and benefits expense

247

 

258

 

255

 

245

 

251

   

(11)

 

(4)

   

(4)

 

(2)

 

Net occupancy expense

40

 

41

 

41

 

39

 

39

   

(1)

 

(2)

   

1

 

3

 

Equipment expense

14

 

15

 

15

 

15

 

15

   

(1)

 

(5)

   

(1)

 

(5)

 

Outside processing fee expense

28

 

30

 

31

 

30

 

28

   

(2)

 

(4)

   

 

 

Software expense

22

 

24

 

22

 

22

 

22

   

(2)

 

(7)

   

 

 

Litigation-related expense

3

 

52

 

(4)

 

1

 

3

   

(49)

 

(94)

   

 

 

FDIC insurance expense

8

 

7

 

9

 

8

 

9

   

1

 

10

   

(1)

 

(14)

 

Advertising expense

6

 

3

 

6

 

6

 

6

   

3

 

77

   

 

 

Other noninterest expenses

38

 

43

 

42

 

50

 

43

   

(5)

 

(13)

   

(5)

 

(13)

 

Total noninterest expenses

406

 

473

 

417

 

416

 

416

   

(67)

 

(14)

   

(10)

 

(2)

 

Income before income taxes

203

 

167

 

215

 

207

 

197

   

36

 

21

   

6

 

3

 

Provision for income taxes

64

 

50

 

68

 

64

 

63

   

14

 

27

   

1

 

1

 

NET INCOME

139

 

117

 

147

 

143

 

134

   

22

 

19

   

5

 

4

 

Less income allocated to participating securities

2

 

2

 

2

 

2

 

2

   

 

   

 

 

Net income attributable to common shares

$

137

 

$

115

 

$

145

 

$

141

 

$

132

   

$

22

 

19

%

 

$

5

 

4

%

Earnings per common share:

                     

Basic

$

0.76

 

$

0.64

 

$

0.80

 

$

0.77

 

$

0.71

   

$

0.12

 

19

%

 

$

0.05

 

7

%

Diluted

0.73

 

0.62

 

0.78

 

0.76

 

0.70

   

0.11

 

18

   

0.03

 

4

 
                       

Comprehensive income

205

 

267

 

144

 

15

 

137

   

(62)

 

(23)

   

68

 

49

 
                       

Cash dividends declared on common stock

35

 

31

 

31

 

32

 

32

   

4

 

11

   

3

 

9

 

Cash dividends declared per common share

0.19

 

0.17

 

0.17

 

0.17

 

0.17

   

0.02

 

12

   

0.02

 

12

 

N/M - Not Meaningful

                               

 

 
                                 

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)

 

Comerica Incorporated and Subsidiaries

   
             
 

2014

 

2013

(in millions)

1st Qtr

 

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr

             

Balance at beginning of period

$

598

   

$

604

 

$

613

 

$

617

 

$

629

 
             

Loan charge-offs:

           

Commercial

19

   

31

 

20

 

19

 

21

 

Real estate construction:

       

Commercial Real Estate business line (a)

   

 

1

 

2

 

 

Commercial mortgage:

       

Commercial Real Estate business line (a)

5

   

1

 

6

 

2

 

1

 

Other business lines (b)

3

   

4

 

3

 

7

 

12

 

Total commercial mortgage

8

   

5

 

9

 

9

 

13

 

Residential mortgage

   

1

 

1

 

1

 

1

 

Consumer

3

   

4

 

8

 

4

 

3

 

Total loan charge-offs

30

   

41

 

39

 

35

 

38

 
             

Recoveries on loans previously charged-off:

     

Commercial

11

   

17

 

8

 

11

 

6

 

Real estate construction

   

3

 

2

 

1

 

1

 

Commercial mortgage

3

   

5

 

7

 

3

 

5

 

Lease financing

2

   

 

1

 

 

 

Residential mortgage

   

1

 

1

 

1

 

1

 

Consumer

2

   

2

 

1

 

2

 

1

 

Total recoveries

18

   

28

 

20

 

18

 

14

 

Net loan charge-offs

12

   

13

 

19

 

17

 

24

 

Provision for loan losses

8

   

7

 

10

 

13

 

12

 

Balance at end of period

$

594

   

$

598

 

$

604

 

$

613

 

$

617

 
             

Allowance for loan losses as a percentage of total loans

1.28

%

 

1.32

%

1.37

%

1.35

%

1.37

%

             

Net loan charge-offs as a percentage of average total loans

0.10

   

0.12

 

0.18

 

0.15

 

0.21

 

(a)

Primarily charge-offs of loans to real estate developers.

(b)

Primarily charge-offs of loans secured by owner-occupied real estate.

 

 
                                 

ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited)

Comerica Incorporated and Subsidiaries

       
             
 

2014

 

2013

(in millions)

1st Qtr

 

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr

             

Balance at beginning of period

$

36

   

$

34

 

$

36

 

$

36

 

$

32

 

Add: Provision for credit losses on lending-related commitments

1

   

2

 

(2)

 

 

4

 

Balance at end of period

$

37

   

$

36

 

$

34

 

$

36

 

$

36

 
             

Unfunded lending-related commitments sold

$

   

$

1

 

$

2

 

$

1

 

$

2

 

 

 
                                 

NONPERFORMING ASSETS (unaudited)

Comerica Incorporated and Subsidiaries

     
             
 

2014

 

2013

(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

$

54

   

$

81

 

$

107

 

$

102

 

$

102

 

Real estate construction:

         

Commercial Real Estate business line (a)

18

   

20

 

24

 

26

 

30

 

Other business lines (b)

1

   

1

 

1

 

2

 

3

 

Total real estate construction

19

   

21

 

25

 

28

 

33

 

Commercial mortgage:

         

Commercial Real Estate business line (a)

58

   

51

 

67

 

69

 

86

 

Other business lines (b)

104

   

105

 

139

 

157

 

178

 

Total commercial mortgage

162

   

156

 

206

 

226

 

264

 

International

   

4

 

 

 

 

Total nonaccrual business loans

235

   

262

 

338

 

356

 

399

 

Retail loans:

           

Residential mortgage

48

   

53

 

63

 

62

 

65

 

Consumer:

           

Home equity

32

   

33

 

34

 

28

 

28

 

Other consumer

2

   

2

 

2

 

3

 

2

 

Total consumer

34

   

35

 

36

 

31

 

30

 

Total nonaccrual retail loans

82

   

88

 

99

 

93

 

95

 

Total nonaccrual loans

317

   

350

 

437

 

449

 

494

 

Reduced-rate loans

21

   

24

 

22

 

22

 

21

 

Total nonperforming loans (c)

338

   

374

 

459

 

471

 

515

 

Foreclosed property

14

   

9

 

19

 

29

 

40

 

Total nonperforming assets (c)

$

352

   

$

383

 

$

478

 

$

500

 

$

555

 
             

Nonperforming loans as a percentage of total loans

0.73

%

 

0.82

%

1.04

%

1.04

%

1.14

%

Nonperforming assets as a percentage of total loans

 and foreclosed property

0.76

   

0.84

 

1.08

 

1.10

 

1.23

 

Allowance for loan losses as a percentage of total

nonperforming loans

176

   

160

 

131

 

130

 

120

 

Loans past due 90 days or more and still accruing

$

10

   

$

16

 

$

25

 

$

20

 

$

25

 
             

ANALYSIS OF NONACCRUAL LOANS

   

Nonaccrual loans at beginning of period

$

350

   

$

437

 

$

449

 

$

494

 

$

519

 

Loans transferred to nonaccrual (d)

19

   

23

 

50

 

37

 

34

 

Nonaccrual business loan gross charge-offs (e)

(27)

   

(33)

 

(25)

 

(25)

 

(34)

 

Nonaccrual business loans sold (f)

(3)

   

(14)

 

(17)

 

(9)

 

(7)

 

Payments/Other (g)

(22)

   

(63)

 

(20)

 

(48)

 

(18)

 

Nonaccrual loans at end of period

$

317

   

$

350

 

$

437

 

$

449

 

$

494

 

(a) Primarily loans to real estate developers.

(b) Primarily loans secured by owner-occupied real estate.

(c) Excludes loans acquired with credit impairment.

(d) Based on an analysis of nonaccrual loans with book balances greater than $2 million.

(e) Analysis of gross loan charge-offs:

   

Nonaccrual business loans

$

27

   

$

33

 

$

25

 

$

25

 

$

34

 

Performing criticized loans

   

3

 

5

 

5

 

 

Consumer and residential mortgage loans

3

   

5

 

9

 

5

 

4

 

Total gross loan charge-offs

$

30

   

$

41

 

$

39

 

$

35

 

$

38

 

(f) Analysis of loans sold:

           

      Nonaccrual business loans

$

3

   

$

14

 

$

17

 

$

9

 

$

7

 

      Performing criticized loans

6

   

22

 

31

 

40

 

12

 

Total criticized loans sold

$

9

   

$

36

 

$

48

 

$

49

 

$

19

 

(g) Includes net changes related to nonaccrual loans with balances less than $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed property. Excludes business loan gross charge-offs and business nonaccrual loans sold.

 

 
                                                     

ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)

Comerica Incorporated and Subsidiaries

               
                       
 

Three Months Ended

 

March 31, 2014

 

December 31, 2013

 

March 31, 2013

 

Average

 

Average

 

Average

 

Average

 

Average

 

Average

(dollar amounts in millions)

Balance

Interest

Rate

 

Balance

Interest

Rate

 

Balance

Interest

Rate

                       

Commercial loans

$

28,362

 

$

221

 

3.17

%

 

$

27,683

 

$

228

 

3.26

%

 

$

28,056

 

$

229

 

3.31

%

Real estate construction loans

1,827

 

15

 

3.40

   

1,652

 

15

 

3.50

   

1,314

 

13

 

4.15

 

Commercial mortgage loans

8,770

 

86

 

3.97

   

8,714

 

101

 

4.62

   

9,398

 

95

 

4.08

 

Lease financing

848

 

9

 

4.07

   

838

 

7

 

3.27

   

857

 

7

 

3.23

 

International loans

1,301

 

12

 

3.68

   

1,303

 

12

 

3.78

   

1,282

 

11

 

3.62

 

Residential mortgage loans

1,724

 

17

 

3.86

   

1,679

 

17

 

3.97

   

1,556

 

17

 

4.39

 

Consumer loans

2,243

 

17

 

3.16

   

2,185

 

18

 

3.24

   

2,154

 

18

 

3.36

 

Total loans (a)

45,075

 

377

 

3.39

   

44,054

 

398

 

3.58

   

44,617

 

390

 

3.54

 
                       

Mortgage-backed securities available-for-sale

8,911

 

55

 

2.42

   

8,969

 

55

 

2.46

   

9,635

 

53

 

2.25

 

Other investment securities available-for-sale

371

 

 

0.43

   

396

 

 

0.45

   

386

 

 

0.50

 

Total investment securities available-for-sale

9,282

 

55

 

2.34

   

9,365

 

55

 

2.37

   

10,021

 

53

 

2.17

 
                       

Interest-bearing deposits with banks (b)

5,448

 

4

 

0.26

   

6,400

 

4

 

0.26

   

3,852

 

2

 

0.27

 

Other short-term investments

111

 

 

0.66

   

105

 

 

0.69

   

117

 

1

 

2.30

 

Total earning assets

59,916

 

436

 

2.94

   

59,924

 

457

 

3.03

   

58,607

 

446

 

3.09

 
                       

Cash and due from banks

913

       

970

       

979

     

Allowance for loan losses

(603)

       

(609)

       

(633)

     

Accrued income and other assets

4,482

       

4,320

       

4,498

     

Total assets

$

64,708

       

$

64,605

       

$

63,451

     
                       

Money market and interest-bearing checking deposits

$

22,261

 

6

 

0.11

   

$

22,030

 

6

 

0.12

   

$

21,294

 

7

 

0.14

 

Savings deposits

1,700

 

 

0.03

   

1,667

 

 

0.03

   

1,623

 

 

0.03

 

Customer certificates of deposit

5,109

 

5

 

0.36

   

5,078

 

5

 

0.38

   

5,744

 

7

 

0.47

 

Foreign office time deposits

464

 

 

0.42

   

462

 

1

 

0.47

   

525

 

1

 

0.55

 

Total interest-bearing deposits

29,534

 

11

 

0.15

   

29,237

 

12

 

0.17

   

29,186

 

15

 

0.21

 
                       

Short-term borrowings

185

 

 

0.03

   

279

 

 

0.06

   

123

 

 

0.11

 

Medium- and long-term debt

3,545

 

14

 

1.53

   

3,563

 

14

 

1.53

   

4,707

 

15

 

1.32

 

Total interest-bearing sources

33,264

 

25

 

0.30

   

33,079

 

26

 

0.31

   

34,016

 

30

 

0.36

 
                       

Noninterest-bearing deposits

23,236

       

23,532

       

21,506

     

Accrued expenses and other liabilities

979

       

984

       

973

     

Total shareholders' equity

7,229

       

7,010

       

6,956

     

Total liabilities and shareholders' equity

$

64,708

       

$

64,605

       

$

63,451

     
                       

Net interest income/rate spread (FTE)

 

$

411

 

2.64

     

$

431

 

2.72

     

$

416

 

2.73

 
                       

FTE adjustment

 

$

1

       

$

1

       

$

   
                       

Impact of net noninterest-bearing sources of funds

   

0.13

       

0.14

       

0.15

 

Net interest margin (as a percentage of average earning assets) (FTE) (a) (b)

   

2.77

%

     

2.86

%

     

2.88

%

(a)

Accretion of the purchase discount on the acquired loan portfolio of $12 million, $23 million and $11 million in the first quarter of 2014 and the fourth and first quarters of 2013, respectively, increased the net interest margin by 8 basis points, 15 basis points and 8 basis points in each respective period.

(b)

Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 24 basis points, 31 basis points and 17 basis points in the first quarter of 2014 and the fourth and first quarters of 2013, respectively.

 

 

 
                               

CONSOLIDATED STATISTICAL DATA (unaudited)

Comerica Incorporated and Subsidiaries

     
           
 

March 31,

December 31,

September 30,

June 30,

March 31,

(in millions, except per share data)

2014

2013

2013

2013

2013

           

Commercial loans:

         

Floor plan

$

3,437

 

$

3,504

 

$

2,869

 

$

3,241

 

$

2,963

 

Other

26,337

 

25,311

 

25,028

 

25,945

 

25,545

 

Total commercial loans

29,774

 

28,815

 

27,897

 

29,186

 

28,508

 

Real estate construction loans:

         

Commercial Real Estate business line (a)

1,507

 

1,447

 

1,283

 

1,223

 

1,185

 

Other business lines (b)

340

 

315

 

269

 

256

 

211

 

Total real estate construction loans

1,847

 

1,762

 

1,552

 

1,479

 

1,396

 

Commercial mortgage loans:

         

Commercial Real Estate business line (a)

1,820

 

1,678

 

1,592

 

1,743

 

1,812

 

Other business lines (b)

6,981

 

7,109

 

7,193

 

7,264

 

7,505

 

Total commercial mortgage loans

8,801

 

8,787

 

8,785

 

9,007

 

9,317

 

Lease financing

849

 

845

 

829

 

843

 

853

 

International loans

1,250

 

1,327

 

1,286

 

1,209

 

1,269

 

Residential mortgage loans

1,751

 

1,697

 

1,650

 

1,611

 

1,568

 

Consumer loans:

         

Home equity

1,533

 

1,517

 

1,501

 

1,474

 

1,498

 

Other consumer

684

 

720

 

651

 

650

 

658

 

Total consumer loans

2,217

 

2,237

 

2,152

 

2,124

 

2,156

 

Total loans

$

46,489

 

$

45,470

 

$

44,151

 

$

45,459

 

$

45,067

 
           

Goodwill

$

635

 

$

635

 

$

635

 

$

635

 

$

635

 

Core deposit intangible

15

 

16

 

17

 

18

 

19

 

Loan servicing rights

1

 

1

 

1

 

2

 

2

 
           

Tier 1 common capital ratio (c) (d)

10.54

%

10.64

%

10.72

%

10.43

%

10.37

%

Tier 1 risk-based capital ratio (c)

10.54

 

10.64

 

10.72

 

10.43

 

10.37

 

Total risk-based capital ratio (c)

12.95

 

13.10

 

13.42

 

13.29

 

13.41

 

Leverage ratio (c)

10.85

 

10.77

 

10.88

 

10.81

 

10.75

 

Tangible common equity ratio (d)

10.20

 

10.07

 

9.87

 

10.04

 

9.86

 
           

Common shareholders' equity per share of common stock

$

40.09

 

$

39.23

 

$

37.94

 

$

37.32

 

$

37.41

 

Tangible common equity per share of common stock (d)

36.50

 

35.65

 

34.38

 

33.79

 

33.90

 

Market value per share for the quarter:

         

High

53.50

 

48.69

 

43.49

 

40.44

 

36.99

 

Low

43.96

 

38.64

 

38.56

 

33.55

 

30.73

 

Close

51.80

 

47.54

 

39.31

 

39.83

 

35.95

 
           

Quarterly ratios:

         

Return on average common shareholders' equity

7.68

%

6.66

%

8.50

%

8.23

%

7.68

%

Return on average assets

0.86

 

0.72

 

0.92

 

0.90

 

0.84

 

Efficiency ratio (e)

65.79

 

72.81

 

65.18

 

65.03

 

66.15

 
           

Number of banking centers

483

 

483

 

484

 

484

 

487

 
           

Number of employees - full time equivalent

8,907

 

8,948

 

8,918

 

8,929

 

9,001

 

(a)

Primarily loans to real estate developers.

(b)

Primarily loans secured by owner-occupied real estate.

(c)

March 31, 2014 ratios are estimated.

(d)

See Reconciliation of Non-GAAP Financial Measures.

(e)

Noninterest expenses as a percentage of the sum of net interest income (FTE) and noninterest income excluding net securities gains.

 

 
                   

PARENT COMPANY ONLY BALANCE SHEETS (unaudited)

Comerica Incorporated

     
       
 

March 31,

December 31,

March 31,

(in millions, except share data)

2014

2013

2013

       

ASSETS

     

Cash and due from subsidiary bank

$

5

 

$

31

 

$

23

 

Short-term investments with subsidiary bank

531

 

482

 

450

 

Other short-term investments

97

 

96

 

91

 

Investment in subsidiaries, principally banks

7,276

 

7,174

 

7,054

 

Premises and equipment

3

 

4

 

4

 

Other assets

156

 

139

 

156

 

      Total assets

$

8,068

 

$

7,926

 

$

7,778

 
       

LIABILITIES AND SHAREHOLDERS' EQUITY

     

Medium- and long-term debt

$

614

 

$

617

 

$

626

 

Other liabilities

171

 

156

 

164

 

      Total liabilities

785

 

773

 

790

 
       

Common stock - $5 par value:

     

    Authorized - 325,000,000 shares

     

    Issued - 228,164,824 shares

1,141

 

1,141

 

1,141

 

Capital surplus

2,182

 

2,179

 

2,157

 

Accumulated other comprehensive loss

(325)

 

(391)

 

(410)

 

Retained earnings

6,414

 

6,321

 

6,020

 

Less cost of common stock in treasury - 46,492,524 shares at 3/31/14, 45,860,786 shares at 12/31/13 and 41,361,612 shares at 3/31/13

(2,129)

 

(2,097)

 

(1,920)

 

      Total shareholders' equity

7,283

 

7,153

 

6,988

 

      Total liabilities and shareholders' equity

$

8,068

 

$

7,926

 

$

7,778

 

 

 
                                         

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, 2012

188.3

 

$

1,141

 

$

2,162

 

$

(413)

 

$

5,931

 

$

(1,879)

 

$

6,942

 

Net income

 

 

 

 

134

 

 

134

 

Other comprehensive income, net of tax

 

 

 

3

 

 

 

3

 

Cash dividends declared on common stock ($0.17 per share)

 

 

 

 

(32)

 

 

(32)

 

Purchase of common stock

(2.2)

 

 

 

 

 

(74)

 

(74)

 

Net issuance of common stock under employee stock plans

0.7

 

 

(15)

 

 

(13)

 

33

 

5

 

Share-based compensation

 

 

10

 

 

 

 

10

 

BALANCE AT MARCH 31, 2013

186.8

 

$

1,141

 

$

2,157

 

$

(410)

 

$

6,020

 

$

(1,920)

 

$

6,988

 
               

BALANCE AT DECEMBER 31, 2013

182.3

 

$

1,141

 

$

2,179

 

$

(391)

 

$

6,321

 

$

(2,097)

 

$

7,153

 

Cumulative effect of adoption of new accounting principle

 

 

 

 

(3)

 

 

(3)

 

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

 
                                               
 
 

 BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)

 Comerica Incorporated and Subsidiaries

             
                       
                       

(dollar amounts in millions)

Business

 

Retail

 

Wealth

           

Three Months Ended March 31, 2014

Bank

 

Bank

 

Management

 

Finance

 

Other

 

Total

Earnings summary:

                   

Net interest income (expense) (FTE)

$

371

   

$

146

   

$

46

   

$

(158)

   

$

6

   

$

411

 

Provision for credit losses

16

   

2

   

(8)

   

   

(1)

   

9

 

Noninterest income

87

   

41

   

64

   

14

   

2

   

208

 

Noninterest expenses

146

   

171

   

78

   

3

   

8

   

406

 

Provision (benefit) for income taxes (FTE)

98

   

5

   

14

   

(55)

   

3

   

65

 

Net income (loss)

$

198

   

$

9

   

$

26

   

$

(92)

   

$

(2)

   

$

139

 

Net credit-related charge-offs (recoveries)

$

11

   

$

4

   

$

(3)

   

$

   

$

   

$

12

 
                       

Selected average balances:

                   

Assets

$

35,896

   

$

6,052

   

$

4,939

   

$

11,129

   

$

6,692

   

$

64,708

 

Loans

34,927

   

5,381

   

4,767

   

   

   

45,075

 

Deposits

27,023

   

21,361

   

3,816

   

353

   

217

   

52,770

 
                       

Statistical data:

                   

Return on average assets (a)

2.20

%

 

0.16

%

 

2.15

%

 

N/M

   

N/M

   

0.86

%

Efficiency ratio (b)

31.96

   

91.44

   

71.31

   

N/M

   

N/M

   

65.79

 
                       
 

Business

 

Retail

 

Wealth

           

Three Months Ended December 31, 2013

Bank

 

Bank

 

Management

 

Finance

 

Other

 

Total

Earnings summary:

                   

Net interest income (expense) (FTE)

$

387

   

$

150

   

$

47

   

$

(161)

   

$

8

   

$

431

 

Provision for credit losses

24

   

(8)

   

(9)

   

   

2

   

9

 

Noninterest income

95

   

43

   

61

   

14

   

6

   

219

 

Noninterest expenses

198

   

178

   

80

   

2

   

15

   

473

 

Provision (benefit) for income taxes (FTE)

90

   

8

   

13

   

(57)

   

(3)

   

51

 

Net income (loss)

$

170

   

$

15

   

$

24

   

$

(92)

   

$

   

$

117

 

Net credit-related charge-offs

$

6

   

$

4

   

$

3

   

$

   

$

   

$

13

 
                       

Selected average balances:

                   

Assets

$

35,042

   

$

5,997

   

$

4,873

   

$

11,032

   

$

7,661

   

$

64,605

 

Loans

34,020

   

5,323

   

4,711

   

   

   

44,054

 

Deposits

26,873

   

21,438

   

3,933

   

323

   

202

   

52,769

 
                       

Statistical data:

                   

Return on average assets (a)

1.94

%

 

0.27

%

 

1.93

%

 

N/M

   

N/M

   

0.72

%

Efficiency ratio (b)

40.97

   

92.27

   

74.64

   

N/M

   

N/M

   

72.81

 
                       
 

Business

 

Retail

 

Wealth

           

Three Months Ended March 31, 2013

Bank

 

Bank

 

Management

 

Finance

 

Other

 

Total

Earnings summary:

                   

Net interest income (expense) (FTE)

$

375

   

$

155

   

$

46

   

$

(167)

   

7

   

$

416

 

Provision for credit losses

20

   

6

   

(6)

   

   

(4)

   

16

 

Noninterest income

90

   

41

   

65

   

14

   

3

   

213

 

Noninterest expenses

146

   

175

   

79

   

3

   

13

   

416

 

Provision (benefit) for income taxes (FTE)

101

   

5

   

13

   

(58)

   

2

   

63

 

Net income (loss)

$

198

   

$

10

   

$

25

   

$

(98)

   

$

(1)

   

$

134

 

Net credit-related charge-offs

$

16

   

$

8

   

$

   

$

   

$

   

$

24

 
                       

Selected average balances:

                   

Assets

$

35,780

   

$

5,973

   

$

4,738

   

$

11,747

   

$

5,213

   

$

63,451

 

Loans

34,753

   

5,276

   

4,588

   

   

   

44,617

 

Deposits

25,514

   

21,049

   

3,682

   

275

   

172

   

50,692

 
                       

Statistical data:

                   

Return on average assets (a)

2.21

%

 

0.18

%

 

2.12

%

 

N/M

   

N/M

   

0.84

%

Efficiency ratio (b)

31.38

   

89.37

   

71.09

   

N/M

   

N/M

   

66.15

 

(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, 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

87

   

34

   

31

   

40

   

16

   

208

 

Noninterest expenses

161

   

96

   

90

   

48

   

11

   

406

 

Provision (benefit) for income taxes (FTE)

38

   

36

   

25

   

18

   

(52)

   

65

 

Net income (loss)

$

68

   

$

63

   

$

46

   

$

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)

1.26

%

 

1.59

%

 

1.50

%

 

3.28

%

 

N/M

   

0.86

%

Efficiency ratio (b)

59.71

   

46.72

   

53.83

   

43.39

   

N/M

   

65.79

 
                       
             

Other

 

Finance

   

Three Months Ended December 31, 2013

Michigan

 

California

 

Texas

 

Markets

 

& Other

 

Total

Earnings summary:

                   

Net interest income (expense) (FTE)

$

187

   

$

176

   

$

147

   

$

74

   

$

(153)

   

$

431

 

Provision for credit losses

7

   

(8)

   

5

   

3

   

2

   

9

 

Noninterest income

89

   

37

   

33

   

40

   

20

   

219

 

Noninterest expenses

218

   

98

   

91

   

49

   

17

   

473

 

Provision (benefit) for income taxes (FTE)

19

   

46

   

31

   

15

   

(60)

   

51

 

Net income (loss)

$

32

   

$

77

   

$

53

   

$

47

   

$

(92)

   

$

117

 

Net credit-related charge-offs (recoveries)

$

(4)

   

$

(2)

   

$

13

   

$

6

   

$

   

$

13

 
                       

Selected average balances:

                   

Assets

$

13,712

   

$

14,710

   

$

10,458

   

$

7,032

   

$

18,693

   

$

64,605

 

Loans

13,323

   

14,431

   

9,766

   

6,534

   

   

44,054

 

Deposits

20,501

   

15,219

   

10,536

   

5,988

   

525

   

52,769

 
                       

Statistical data:

                   

Return on average assets (a)

0.59

%

 

1.90

%

 

1.80

%

 

2.68

%

 

N/M

   

0.72

%

Efficiency ratio (b)

79.04

   

46.11

   

50.84

   

42.34

   

N/M

   

72.81

 
                       
             

Other

 

Finance

   

Three Months Ended March 31, 2013

Michigan

 

California

 

Texas

 

Markets

 

& Other

 

Total

Earnings summary:

                   

Net interest income (expense) (FTE)

$

190

   

$

171

   

$

134

   

$

81

   

$

(160)

   

$

416

 

Provision for credit losses

(7)

   

21

   

8

   

(2)

   

(4)

   

16

 

Noninterest income

92

   

35

   

31

   

38

   

17

   

213

 

Noninterest expenses

168

   

97

   

91

   

44

   

16

   

416

 

Provision (benefit) for income taxes (FTE)

43

   

32

   

23

   

21

   

(56)

   

63

 

Net income (loss)

$

78

   

$

56

   

$

43

   

$

56

   

$

(99)

   

$

134

 

Net credit-related charge-offs

$

5

   

$

10

   

$

6

   

$

3

   

$

   

$

24

 
                       

Selected average balances:

                   

Assets

$

14,042

   

$

13,795

   

$

10,795

   

$

7,859

   

$

16,960

   

$

63,451

 

Loans

13,650

   

13,542

   

10,071

   

7,354

   

   

44,617

 

Deposits

20,254

   

14,356

   

9,959

   

5,676

   

447

   

50,692

 
                       

Statistical data:

                   

Return on average assets (a)

1.47

%

 

1.45

%

 

1.54

%

 

2.86

%

 

N/M

   

0.84

%

Efficiency ratio (b)

59.53

   

47.04

   

54.99

   

37.41

   

N/M

   

66.15

 

(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)

2014

2013

2013

2013

2013

           

Tier 1 Common Capital Ratio:

       

Tier 1 and Tier 1 common capital (a) (b)

$

6,961

 

$

6,895

 

$

6,862

 

$

6,800

 

$

6,748

 
           

Risk-weighted assets (a) (b)

66,051

 

64,825

 

64,027

 

65,220

 

65,099

 
           

Tier 1 and Tier 1 common risk-based capital ratio (b)

10.54

%

10.64

%

10.72

%

10.43

%

10.37

%

           

Basel III Common Equity Tier 1 Capital Ratio:

     

Tier 1 common capital (b)

$

6,961

 

$

6,895

 

$

6,862

 

$

6,800

 

$

6,748

 

Basel III adjustments (c)

(3)

 

(6)

 

(4)

 

 

(1)

 

Basel III common equity Tier 1 capital (c)

6,958

 

6,889

 

6,858

 

6,800

 

6,747

 
           

Risk-weighted assets (a) (b)

$

66,051

 

$

64,825

 

$

64,027

 

$

65,220

 

$

65,099

 

Basel III adjustments (c)

1,603

 

1,754

 

1,726

 

2,091

 

1,996

 

Basel III risk-weighted assets (c)

$

67,654

 

$

66,579

 

$

65,753

 

$

67,311

 

$

67,095

 
           

Tier 1 common capital ratio (b)

10.5

%

10.6

%

10.7

%

10.4

%

10.4

%

Basel III common equity Tier 1 capital ratio (c)

10.3

 

10.3

 

10.4

 

10.1

 

10.1

 
           

Tangible Common Equity Ratio:

     

Common shareholders' equity

$

7,283

 

$

7,153

 

$

6,969

 

$

6,911

 

$

6,988

 

Less:

         

Goodwill

635

 

635

 

635

 

635

 

635

 

Other intangible assets

16

 

17

 

18

 

20

 

21

 

Tangible common equity

$

6,632

 

$

6,501

 

$

6,316

 

$

6,256

 

$

6,332

 
           

Total assets

$

65,681

 

$

65,227

 

$

64,670

 

$

62,947

 

$

64,885

 

Less:

         

Goodwill

635

 

635

 

635

 

635

 

635

 

Other intangible assets

16

 

17

 

18

 

20

 

21

 

Tangible assets

$

65,030

 

$

64,575

 

$

64,017

 

$

62,292

 

$

64,229

 
           

Common equity ratio

11.09

%

10.97

%

10.78

%

10.98

%

10.77

%

Tangible common equity ratio

10.20

 

10.07

 

9.87

 

10.04

 

9.86

 
           

Tangible Common Equity per Share of Common Stock:

   

Common shareholders' equity

$

7,283

 

$

7,153

 

$

6,969

 

$

6,911

 

$

6,988

 

Tangible common equity

6,632

 

6,501

 

6,316

 

6,256

 

6,332

 
           

Shares of common stock outstanding (in millions)

182

 

182

 

184

 

185

 

187

 
           

Common shareholders' equity per share of common stock

$

40.09

 

$

39.23

 

$

37.94

 

$

37.32

 

$

37.41

 

Tangible common equity per share of common stock

36.50

 

35.65

 

34.38

 

33.79

 

33.90

 
   

(a)

Tier 1 capital and risk-weighted assets as defined by regulation.

(b)

March 31, 2014 Tier 1 capital and risk-weighted assets are estimated.

(c)

Estimated ratios based on the standardized approach in the final rule for the U.S. adoption of the Basel III regulatory capital framework and excluding most elements of AOCI.

The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations. The Basel III common equity Tier 1 capital ratio further adjusts Tier 1 common capital and risk-weighted assets to account for the final rule approved by U.S. banking regulators in July 2013 for the U.S. adoption of the Basel III regulatory capital framework. The final Basel III capital rules are effective January 1, 2015 for banking organizations subject to the standardized approach. The tangible common equity ratio removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets. Tangible common equity per share of common stock removes the effect of intangible assets from common shareholders equity per share of common stock. Comerica believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.

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SOURCE Comerica Incorporated

For further information: Media Contact: Wayne J. Mielke, (214) 462-4463, Investor Contacts: Darlene P. Persons, (214) 462-6831, or Brittany L. Butler, (214) 462-6834