DALLAS, July 15, 2014 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported second quarter 2014 net income of $151 million, compared to $139 million for the first quarter 2014 and $143 million for the second quarter 2013. Earnings per diluted share were 80 cents for the second quarter 2014, compared to 73 cents for the first quarter 2014 and 76 cents for the second quarter 2013.
(dollar amounts in millions, except per share data) |
2nd Qtr '14 |
1st Qtr '14 |
2nd Qtr '13 |
|||||||||
Net interest income (a) |
$ |
416 |
$ |
410 |
$ |
414 |
||||||
Provision for credit losses |
11 |
9 |
13 |
|||||||||
Noninterest income |
220 |
208 |
222 |
|||||||||
Noninterest expenses |
404 |
406 |
416 |
|||||||||
Provision for income taxes |
70 |
64 |
64 |
|||||||||
Net income |
151 |
139 |
143 |
|||||||||
Net income attributable to common shares |
149 |
137 |
141 |
|||||||||
Diluted income per common share |
0.80 |
0.73 |
0.76 |
|||||||||
Average diluted shares (in millions) |
186 |
187 |
187 |
|||||||||
Tier 1 common capital ratio (c) |
10.49 |
% |
(b) |
10.58 |
% |
10.43 |
% |
|||||
Basel III common equity Tier 1 capital ratio (c) (d) |
10.2 |
10.3 |
10.1 |
|||||||||
Tangible common equity ratio (c) |
10.39 |
10.20 |
10.04 |
(a) |
Included accretion of the purchase discount on the acquired loan portfolio of $10 million, $12 million and $7 million in the second quarter 2014, first quarter 2014 and second quarter 2013, respectively. |
|||||||||||
(b) |
June 30, 2014 ratio is estimated. |
|||||||||||
(c) |
See Reconciliation of Non-GAAP Financial Measures. |
|||||||||||
(d) |
Estimated ratios based on the standardized approach in the final rule, as fully phased-in, and excluding most elements of accumulated other comprehensive income (AOCI). |
"We recorded a 10 percent increase in earnings per share compared to the first quarter, a solid performance given this competitive and persistently low-rate environment," said Ralph W. Babb Jr., chairman and chief executive officer. "We continue to be focused on growing the bottom line by carefully managing the things we can control, such as expanding customer relationships, maintaining expense discipline as well as credit quality, all the while taking a prudent, conservative approach to capital.
"With higher customer-driven fee income and broad-based loan growth, revenue increased more than 3 percent from the first quarter. Average loans were up $1.7 billion, or 4 percent, compared to the first quarter, and period-end loans were up $1.4 billion, or 3 percent, with notable growth in virtually every business line. Average deposits were up $614 million to $53.4 billion. Credit quality continued to be strong, noninterest expenses decreased slightly, and our solid capital position continues to support our growth.
"We attribute these results to continued improvements in the economy, reflected particularly in the loan growth in Texas and California, as well as our expertise in faster growing business lines and consistent focus on relationships. Looking ahead, macro-economic conditions appear to be favorable. The market is competitive, however, we are confident in our ability to add new customer relationships and expand existing ones while maintaining our credit pricing and structure discipline."
Second Quarter 2014 Compared to First Quarter 2014
Second Quarter 2014 Compared to Second Quarter 2013
Net Interest Income
(dollar amounts in millions) |
2nd Qtr '14 |
1st Qtr '14 |
2nd Qtr '13 |
||||||||
Net interest income |
$ |
416 |
$ |
410 |
$ |
414 |
|||||
Net interest margin |
2.78 |
% |
2.77 |
% |
2.83 |
% |
|||||
Selected average balances: |
|||||||||||
Total earning assets |
$ |
60,148 |
$ |
59,916 |
$ |
58,928 |
|||||
Total loans |
46,725 |
45,075 |
44,893 |
||||||||
Total investment securities |
9,364 |
9,282 |
9,793 |
||||||||
Federal Reserve Bank deposits (excess liquidity) |
3,801 |
5,311 |
3,968 |
||||||||
Total deposits |
53,384 |
52,770 |
51,448 |
||||||||
Total noninterest-bearing deposits |
24,011 |
23,236 |
22,076 |
||||||||
Noninterest Income
Noninterest income increased $12 million to $220 million for the second quarter 2014, compared to $208 million for the first quarter 2014, largely due to an increase in customer-driven fees. The $9 million increase in customer-driven fee income was primarily due to increases of $3 million each in commercial lending fees and foreign exchange income, as well as smaller increases in several other customer-driven fee categories. Noncustomer-driven income increased $3 million, primarily due to increases in income from warrants and bank-owned life insurance.
Noninterest Expenses
Noninterest expenses decreased $2 million to $404 million for the second quarter 2014, compared to $406 million for the first quarter 2014, primarily reflecting a $7 million decrease in salaries and benefits expense as well as smaller decreases in several other noninterest expense categories, partially offset by increases of $3 million each in software expense and operational losses, and $2 million in outside processing fees. The $7 million decrease in salaries and benefits expense primarily reflected seasonal decreases in payroll taxes and share-based compensation expense, partially offset by the full quarter impact of merit increases and one more day in the second quarter.
Credit Quality |
||||||||||||
(dollar amounts in millions) |
2nd Qtr '14 |
1st Qtr '14 |
2nd Qtr '13 |
|||||||||
Net credit-related charge-offs |
$ |
9 |
$ |
12 |
$ |
17 |
||||||
Net credit-related charge-offs/Average total loans |
0.08 |
% |
0.10 |
% |
0.15 |
% |
||||||
Provision for credit losses |
$ |
11 |
$ |
9 |
$ |
13 |
||||||
Nonperforming loans (a) |
347 |
338 |
471 |
|||||||||
Nonperforming assets (NPAs) (a) |
360 |
352 |
500 |
|||||||||
NPAs/Total loans and foreclosed property |
0.75 |
% |
0.76 |
% |
1.10 |
% |
||||||
Loans past due 90 days or more and still accruing |
$ |
7 |
$ |
10 |
$ |
20 |
||||||
Allowance for loan losses |
591 |
594 |
613 |
|||||||||
Allowance for credit losses on lending-related commitments (b) |
42 |
37 |
36 |
|||||||||
Total allowance for credit losses |
633 |
631 |
649 |
|||||||||
Allowance for loan losses/Period-end total loans |
1.23 |
% |
1.28 |
% |
1.35 |
% |
||||||
Allowance for loan losses/Nonperforming loans |
170 |
176 |
130 |
(a) |
Excludes loans acquired with credit impairment. |
|||||||||||
(b) |
Included in "Accrued expenses and other liabilities" on the consolidated balance sheets. |
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $65.3 billion and $7.4 billion, respectively, at June 30, 2014, compared to $65.7 billion and $7.3 billion, respectively, at March 31, 2014.
There were approximately 181 million common shares outstanding at June 30, 2014. Comerica increased the quarterly dividend by 1 cent, or 5 percent, to $0.20 per share in the second quarter 2014. Share repurchases of $59 million (1.2 million shares), combined with dividends, returned 63 percent of second quarter 2014 net income to shareholders.
In the second quarter 2014, Comerica issued $350 million of 2.125% senior notes due in May 2019 and announced the intention to call $150 million of subordinated notes, at par, on July 15, 2014. The subordinated notes, originally due in July 2024, had a carrying value of $182 million at June 30, 2014, which will result in a gain in the third quarter 2014 of approximately $32 million.
Comerica's tangible common equity ratio was 10.39 percent at June 30, 2014, an increase of 19 basis points from March 31, 2014. The estimated Tier 1 common capital ratio decreased 9 basis points, to 10.49 percent at June 30, 2014, from March 31, 2014. The estimated common equity Tier 1 ratio under fully phased-in Basel III capital rules and excluding most elements of AOCI was 10.2 percent percent at June 30, 2014.
Full-Year 2014 Outlook
Management expectations for full-year 2014, compared to 2013, assumes a continuation of the current economic and low-rate environment and excludes the approximately $32 million gain on the July 2014 early redemption of debt, which is viewed as non-core.
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 June 30, 2014 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses second quarter 2014 results compared to first quarter 2014.
In the second quarter 2014, Comerica enhanced the approach used to determine the standard reserve factors used in estimating the allowance for credit losses, which had the effect of capturing certain elements in the quantitative component of the reserve that had formerly been included in the qualitative assessment. The impact of the change was largely neutral to the total allowance for loan losses at June 30, 2014. However, because standard reserves are allocated to the segments at the loan level, while qualitative reserves are allocated at the portfolio level, the impact of the methodology change on the allowance of each segment reflected the characteristics of the individual loans within each segment's portfolio, causing segment reserves to increase or decrease accordingly.
The following table presents net income (loss) by business segment.
(dollar amounts in millions) |
2nd Qtr '14 |
1st Qtr '14 |
2nd Qtr '13 |
||||||||||||||
Business Bank |
$ |
195 |
82 |
% |
$ |
198 |
85 |
% |
$ |
207 |
85 |
% |
|||||
Retail Bank |
15 |
6 |
9 |
4 |
11 |
5 |
|||||||||||
Wealth Management |
28 |
12 |
26 |
11 |
24 |
10 |
|||||||||||
238 |
100 |
% |
233 |
100 |
% |
242 |
100 |
% |
|||||||||
Finance |
(91) |
(92) |
(98) |
||||||||||||||
Other (a) |
4 |
(2) |
(1) |
||||||||||||||
Total |
$ |
151 |
$ |
139 |
$ |
143 |
(a) |
Includes items not directly associated with the three major business segments or the Finance Division. |
Business Bank |
|||||||||||
(dollar amounts in millions) |
2nd Qtr '14 |
1st Qtr '14 |
2nd Qtr '13 |
||||||||
Net interest income (FTE) |
$ |
376 |
$ |
371 |
$ |
372 |
|||||
Provision for credit losses |
32 |
16 |
10 |
||||||||
Noninterest income |
95 |
87 |
94 |
||||||||
Noninterest expenses |
143 |
146 |
147 |
||||||||
Net income |
195 |
198 |
207 |
||||||||
Net credit-related charge-offs |
7 |
11 |
11 |
||||||||
Selected average balances: |
|||||||||||
Assets |
37,467 |
35,896 |
36,014 |
||||||||
Loans |
36,529 |
34,927 |
34,955 |
||||||||
Deposits |
27,382 |
27,023 |
25,987 |
||||||||
Retail Bank |
|||||||||||
(dollar amounts in millions) |
2nd Qtr '14 |
1st Qtr '14 |
2nd Qtr '13 |
||||||||
Net interest income (FTE) |
$ |
149 |
$ |
146 |
$ |
154 |
|||||
Provision for credit losses |
(4) |
2 |
5 |
||||||||
Noninterest income |
41 |
41 |
46 |
||||||||
Noninterest expenses |
171 |
171 |
178 |
||||||||
Net income |
15 |
9 |
11 |
||||||||
Net credit-related charge-offs |
4 |
4 |
4 |
||||||||
Selected average balances: |
|||||||||||
Assets |
6,051 |
6,052 |
5,962 |
||||||||
Loans |
5,385 |
5,381 |
5,271 |
||||||||
Deposits |
21,648 |
21,361 |
21,241 |
||||||||
Wealth Management |
|||||||||||
(dollar amounts in millions) |
2nd Qtr '14 |
1st Qtr '14 |
2nd Qtr '13 |
||||||||
Net interest income (FTE) |
$ |
46 |
$ |
46 |
$ |
46 |
|||||
Provision for credit losses |
(9) |
(8) |
(3) |
||||||||
Noninterest income |
67 |
64 |
65 |
||||||||
Noninterest expenses |
79 |
78 |
77 |
||||||||
Net income |
28 |
26 |
24 |
||||||||
Net credit-related (recoveries) charge-offs |
(2) |
(3) |
2 |
||||||||
Selected average balances: |
|||||||||||
Assets |
4,996 |
4,939 |
4,828 |
||||||||
Loans |
4,811 |
4,767 |
4,667 |
||||||||
Deposits |
3,827 |
3,816 |
3,701 |
||||||||
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 June 30, 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) |
2nd Qtr '14 |
1st Qtr '14 |
2nd Qtr '13 |
||||||||||||||
Michigan |
$ |
80 |
34 |
% |
$ |
68 |
29 |
% |
$ |
77 |
32 |
% |
|||||
California |
63 |
26 |
63 |
27 |
65 |
27 |
|||||||||||
Texas |
36 |
15 |
46 |
20 |
46 |
19 |
|||||||||||
Other Markets |
59 |
25 |
56 |
24 |
54 |
22 |
|||||||||||
238 |
100 |
% |
233 |
100 |
% |
242 |
100 |
% |
|||||||||
Finance & Other (a) |
(87) |
(94) |
(99) |
||||||||||||||
Total |
$ |
151 |
$ |
139 |
$ |
143 |
(a) |
Includes items not directly associated with the geographic markets. |
Michigan Market |
|||||||||||
(dollar amounts in millions) |
2nd Qtr '14 |
1st Qtr '14 |
2nd Qtr '13 |
||||||||
Net interest income (FTE) |
$ |
182 |
$ |
183 |
$ |
187 |
|||||
Provision for credit losses |
(9) |
3 |
(4) |
||||||||
Noninterest income |
94 |
87 |
88 |
||||||||
Noninterest expenses |
159 |
161 |
161 |
||||||||
Net income |
80 |
68 |
77 |
||||||||
Net credit-related charge-offs (recoveries) |
10 |
— |
4 |
||||||||
Selected average balances: |
|||||||||||
Assets |
13,851 |
13,819 |
14,022 |
||||||||
Loans |
13,482 |
13,473 |
13,598 |
||||||||
Deposits |
20,694 |
20,642 |
20,159 |
California Market |
|||||||||||
(dollar amounts in millions) |
2nd Qtr '14 |
1st Qtr '14 |
2nd Qtr '13 |
||||||||
Net interest income (FTE) |
$ |
176 |
$ |
172 |
$ |
173 |
|||||
Provision for credit losses |
14 |
11 |
7 |
||||||||
Noninterest income |
39 |
34 |
36 |
||||||||
Noninterest expenses |
101 |
96 |
100 |
||||||||
Net income |
63 |
63 |
65 |
||||||||
Net credit-related charge-offs (recoveries) |
5 |
10 |
12 |
||||||||
Selected average balances: |
|||||||||||
Assets |
15,721 |
15,133 |
14,155 |
||||||||
Loans |
15,439 |
14,824 |
13,912 |
||||||||
Deposits |
15,370 |
14,782 |
14,671 |
Texas Market |
|||||||||||
(dollar amounts in millions) |
2nd Qtr '14 |
1st Qtr '14 |
2nd Qtr '13 |
||||||||
Net interest income (FTE) |
$ |
137 |
$ |
136 |
$ |
131 |
|||||
Provision for credit losses |
22 |
6 |
6 |
||||||||
Noninterest income |
31 |
31 |
34 |
||||||||
Noninterest expenses |
89 |
90 |
89 |
||||||||
Net income |
36 |
46 |
46 |
||||||||
Net credit-related charge-offs |
2 |
6 |
(3) |
||||||||
Selected average balances: |
|||||||||||
Assets |
11,661 |
11,070 |
10,886 |
||||||||
Loans |
10,966 |
10,364 |
10,179 |
||||||||
Deposits |
10,724 |
10,875 |
10,187 |
Conference Call and Webcast
Comerica will host a conference call to review second quarter 2014 financial results at 7 a.m. CT Tuesday, July 15, 2014. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 61649842). 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 |
Six Months Ended |
||||||||||||||||
June 30, |
March 31, |
June 30, |
June 30, |
||||||||||||||
(in millions, except per share data) |
2014 |
2014 |
2013 |
2014 |
2013 |
||||||||||||
PER COMMON SHARE AND COMMON STOCK DATA |
|||||||||||||||||
Diluted net income |
$ |
0.80 |
$ |
0.73 |
$ |
0.76 |
$ |
1.54 |
$ |
1.46 |
|||||||
Cash dividends declared |
0.20 |
0.19 |
0.17 |
0.39 |
0.34 |
||||||||||||
Average diluted shares (in thousands) |
186,108 |
186,701 |
186,998 |
186,402 |
187,219 |
||||||||||||
KEY RATIOS |
|||||||||||||||||
Return on average common shareholders' equity |
8.27 |
% |
7.68 |
% |
8.23 |
% |
7.97 |
% |
7.95 |
% |
|||||||
Return on average assets |
0.93 |
0.86 |
0.90 |
0.90 |
0.87 |
||||||||||||
Tier 1 common capital ratio (a) (b) |
10.49 |
10.58 |
10.43 |
||||||||||||||
Tier 1 risk-based capital ratio (b) |
10.49 |
10.58 |
10.43 |
||||||||||||||
Total risk-based capital ratio (b) |
12.50 |
13.00 |
13.29 |
||||||||||||||
Leverage ratio (b) |
10.93 |
10.85 |
10.81 |
||||||||||||||
Tangible common equity ratio (a) |
10.39 |
10.20 |
10.04 |
||||||||||||||
AVERAGE BALANCES |
|||||||||||||||||
Commercial loans |
$ |
29,890 |
$ |
28,362 |
$ |
28,393 |
$ |
29,130 |
$ |
28,225 |
|||||||
Real estate construction loans |
1,913 |
1,827 |
1,453 |
1,871 |
1,384 |
||||||||||||
Commercial mortgage loans |
8,749 |
8,770 |
9,192 |
8,759 |
9,295 |
||||||||||||
Lease financing |
850 |
848 |
855 |
849 |
856 |
||||||||||||
International loans |
1,328 |
1,301 |
1,262 |
1,315 |
1,272 |
||||||||||||
Residential mortgage loans |
1,773 |
1,724 |
1,602 |
1,749 |
1,579 |
||||||||||||
Consumer loans |
2,222 |
2,243 |
2,136 |
2,232 |
2,145 |
||||||||||||
Total loans |
46,725 |
45,075 |
44,893 |
45,905 |
44,756 |
||||||||||||
Earning assets |
60,148 |
59,916 |
58,928 |
60,033 |
58,769 |
||||||||||||
Total assets |
64,879 |
64,708 |
63,706 |
64,794 |
63,733 |
||||||||||||
Noninterest-bearing deposits |
24,011 |
23,236 |
22,076 |
23,626 |
21,793 |
||||||||||||
Interest-bearing deposits |
29,373 |
29,534 |
29,372 |
29,453 |
29,302 |
||||||||||||
Total deposits |
53,384 |
52,770 |
51,448 |
53,079 |
51,095 |
||||||||||||
Common shareholders' equity |
7,331 |
7,229 |
6,979 |
7,280 |
6,966 |
||||||||||||
NET INTEREST INCOME (fully taxable equivalent basis) |
|||||||||||||||||
Net interest income |
$ |
417 |
$ |
411 |
$ |
415 |
$ |
828 |
$ |
831 |
|||||||
Net interest margin |
2.78 |
% |
2.77 |
% |
2.83 |
% |
2.78 |
% |
2.86 |
% |
|||||||
CREDIT QUALITY |
|||||||||||||||||
Total nonperforming assets (c) |
$ |
360 |
$ |
352 |
$ |
500 |
|||||||||||
Loans past due 90 days or more and still accruing |
7 |
10 |
20 |
||||||||||||||
Net loan charge-offs |
9 |
12 |
17 |
$ |
21 |
$ |
41 |
||||||||||
Allowance for loan losses |
591 |
594 |
613 |
||||||||||||||
Allowance for credit losses on lending-related commitments |
42 |
37 |
36 |
||||||||||||||
Total allowance for credit losses |
633 |
631 |
649 |
||||||||||||||
Allowance for loan losses as a percentage of total loans |
1.23 |
% |
1.28 |
% |
1.35 |
% |
|||||||||||
Net loan charge-offs as a percentage of average total loans (d) |
0.08 |
0.10 |
0.15 |
0.09 |
% |
0.18 |
% |
||||||||||
Nonperforming assets as a percentage of total loans and foreclosed property (c) |
0.75 |
0.76 |
1.10 |
||||||||||||||
Allowance for loan losses as a percentage of total nonperforming loans |
170 |
176 |
130 |
(a) |
See Reconciliation of Non-GAAP Financial Measures. |
||||||||||||||||
(b) |
June 30, 2014 ratios are estimated. |
||||||||||||||||
(c) |
Excludes loans acquired with credit-impairment. |
||||||||||||||||
(d) |
Lending-related commitment charge-offs were zero in all periods presented. |
CONSOLIDATED BALANCE SHEETS |
||||||||||||
Comerica Incorporated and Subsidiaries |
||||||||||||
June 30, |
March 31, |
December 31, |
June 30, |
|||||||||
(in millions, except share data) |
2014 |
2014 |
2013 |
2013 |
||||||||
(unaudited) |
(unaudited) |
(unaudited) |
||||||||||
ASSETS |
||||||||||||
Cash and due from banks |
$ |
1,226 |
$ |
1,186 |
$ |
1,140 |
$ |
1,016 |
||||
Interest-bearing deposits with banks |
2,668 |
4,434 |
5,311 |
2,909 |
||||||||
Other short-term investments |
109 |
105 |
112 |
119 |
||||||||
Investment securities available-for-sale |
9,534 |
9,487 |
9,307 |
9,631 |
||||||||
Commercial loans |
30,986 |
29,774 |
28,815 |
29,186 |
||||||||
Real estate construction loans |
1,939 |
1,847 |
1,762 |
1,479 |
||||||||
Commercial mortgage loans |
8,747 |
8,801 |
8,787 |
9,007 |
||||||||
Lease financing |
822 |
849 |
845 |
843 |
||||||||
International loans |
1,352 |
1,250 |
1,327 |
1,209 |
||||||||
Residential mortgage loans |
1,775 |
1,751 |
1,697 |
1,611 |
||||||||
Consumer loans |
2,261 |
2,217 |
2,237 |
2,124 |
||||||||
Total loans |
47,882 |
46,489 |
45,470 |
45,459 |
||||||||
Less allowance for loan losses |
(591) |
(594) |
(598) |
(613) |
||||||||
Net loans |
47,291 |
45,895 |
44,872 |
44,846 |
||||||||
Premises and equipment |
562 |
583 |
594 |
604 |
||||||||
Accrued income and other assets |
3,935 |
3,991 |
3,888 |
3,819 |
||||||||
Total assets |
$ |
65,325 |
$ |
65,681 |
$ |
65,224 |
$ |
62,944 |
||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||||||
Noninterest-bearing deposits |
$ |
24,774 |
$ |
23,955 |
$ |
23,875 |
$ |
21,870 |
||||
Money market and interest-bearing checking deposits |
22,555 |
22,485 |
22,332 |
21,677 |
||||||||
Savings deposits |
1,731 |
1,742 |
1,673 |
1,677 |
||||||||
Customer certificates of deposit |
4,962 |
5,099 |
5,063 |
5,594 |
||||||||
Foreign office time deposits |
148 |
469 |
349 |
437 |
||||||||
Total interest-bearing deposits |
29,396 |
29,795 |
29,417 |
29,385 |
||||||||
Total deposits |
54,170 |
53,750 |
53,292 |
51,255 |
||||||||
Short-term borrowings |
176 |
160 |
253 |
131 |
||||||||
Accrued expenses and other liabilities |
990 |
954 |
986 |
1,049 |
||||||||
Medium- and long-term debt |
2,620 |
3,534 |
3,543 |
3,601 |
||||||||
Total liabilities |
57,956 |
58,398 |
58,074 |
56,036 |
||||||||
Common stock - $5 par value: |
||||||||||||
Authorized - 325,000,000 shares |
||||||||||||
Issued - 228,164,824 shares |
1,141 |
1,141 |
1,141 |
1,141 |
||||||||
Capital surplus |
2,175 |
2,182 |
2,179 |
2,160 |
||||||||
Accumulated other comprehensive loss |
(304) |
(325) |
(391) |
(538) |
||||||||
Retained earnings |
6,520 |
6,414 |
6,318 |
6,124 |
||||||||
Less cost of common stock in treasury - 47,194,492 shares at 6/30/14; 46,492,524 shares at 3/31/14; 45,860,786 shares at 12/31/13 and 42,999,083 shares at 6/30/13 |
(2,163) |
(2,129) |
(2,097) |
(1,979) |
||||||||
Total shareholders' equity |
7,369 |
7,283 |
7,150 |
6,908 |
||||||||
Total liabilities and shareholders' equity |
$ |
65,325 |
$ |
65,681 |
$ |
65,224 |
$ |
62,944 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) |
|||||||||||||
Comerica Incorporated and Subsidiaries |
|||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||
June 30, |
June 30, |
||||||||||||
(in millions, except per share data) |
2014 |
2013 |
2014 |
2013 |
|||||||||
INTEREST INCOME |
|||||||||||||
Interest and fees on loans |
$ |
385 |
$ |
388 |
$ |
761 |
$ |
778 |
|||||
Interest on investment securities |
53 |
52 |
108 |
105 |
|||||||||
Interest on short-term investments |
3 |
3 |
7 |
6 |
|||||||||
Total interest income |
441 |
443 |
876 |
889 |
|||||||||
INTEREST EXPENSE |
|||||||||||||
Interest on deposits |
11 |
15 |
22 |
30 |
|||||||||
Interest on medium- and long-term debt |
14 |
14 |
28 |
29 |
|||||||||
Total interest expense |
25 |
29 |
50 |
59 |
|||||||||
Net interest income |
416 |
414 |
826 |
830 |
|||||||||
Provision for credit losses |
11 |
13 |
20 |
29 |
|||||||||
Net interest income after provision for credit losses |
405 |
401 |
806 |
801 |
|||||||||
NONINTEREST INCOME |
|||||||||||||
Service charges on deposit accounts |
54 |
53 |
108 |
108 |
|||||||||
Fiduciary income |
45 |
44 |
89 |
87 |
|||||||||
Commercial lending fees |
23 |
22 |
43 |
43 |
|||||||||
Card fees |
19 |
18 |
38 |
35 |
|||||||||
Letter of credit fees |
15 |
16 |
29 |
32 |
|||||||||
Bank-owned life insurance |
11 |
10 |
20 |
19 |
|||||||||
Foreign exchange income |
12 |
9 |
21 |
18 |
|||||||||
Brokerage fees |
4 |
4 |
9 |
9 |
|||||||||
Net securities (losses) gains |
— |
(2) |
1 |
(2) |
|||||||||
Other noninterest income |
37 |
48 |
70 |
86 |
|||||||||
Total noninterest income |
220 |
222 |
428 |
435 |
|||||||||
NONINTEREST EXPENSES |
|||||||||||||
Salaries and employee benefits expense |
240 |
245 |
487 |
496 |
|||||||||
Net occupancy expense |
39 |
39 |
79 |
78 |
|||||||||
Equipment expense |
15 |
15 |
29 |
30 |
|||||||||
Outside processing fee expense |
30 |
30 |
58 |
58 |
|||||||||
Software expense |
25 |
22 |
47 |
44 |
|||||||||
Litigation-related expense |
3 |
1 |
6 |
4 |
|||||||||
FDIC insurance expense |
8 |
8 |
16 |
17 |
|||||||||
Advertising expense |
5 |
6 |
11 |
12 |
|||||||||
Other noninterest expenses |
39 |
50 |
77 |
93 |
|||||||||
Total noninterest expenses |
404 |
416 |
810 |
832 |
|||||||||
Income before income taxes |
221 |
207 |
424 |
404 |
|||||||||
Provision for income taxes |
70 |
64 |
134 |
127 |
|||||||||
NET INCOME |
151 |
143 |
290 |
277 |
|||||||||
Less income allocated to participating securities |
2 |
2 |
4 |
4 |
|||||||||
Net income attributable to common shares |
$ |
149 |
$ |
141 |
$ |
286 |
$ |
273 |
|||||
Earnings per common share: |
|||||||||||||
Basic |
$ |
0.83 |
$ |
0.77 |
$ |
1.59 |
$ |
1.48 |
|||||
Diluted |
0.80 |
0.76 |
1.54 |
1.46 |
|||||||||
Comprehensive income |
172 |
15 |
377 |
152 |
|||||||||
Cash dividends declared on common stock |
36 |
32 |
71 |
64 |
|||||||||
Cash dividends declared per common share |
0.20 |
0.17 |
0.39 |
0.34 |
CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited) |
|||||||||||||||||||||||||||
Comerica Incorporated and Subsidiaries |
|||||||||||||||||||||||||||
Second |
First |
Fourth |
Third |
Second |
Second Quarter 2014 Compared To: |
||||||||||||||||||||||
Quarter |
Quarter |
Quarter |
Quarter |
Quarter |
First Quarter 2014 |
Second Quarter 2013 |
|||||||||||||||||||||
(in millions, except per share data) |
2014 |
2014 |
2013 |
2013 |
2013 |
Amount |
Percent |
Amount |
Percent |
||||||||||||||||||
INTEREST INCOME |
|||||||||||||||||||||||||||
Interest and fees on loans |
$ |
385 |
$ |
376 |
$ |
397 |
$ |
381 |
$ |
388 |
$ |
9 |
2 |
% |
$ |
(3) |
(1) |
% |
|||||||||
Interest on investment securities |
53 |
55 |
55 |
54 |
52 |
(2) |
(2) |
1 |
3 |
||||||||||||||||||
Interest on short-term investments |
3 |
4 |
4 |
4 |
3 |
(1) |
(27) |
— |
— |
||||||||||||||||||
Total interest income |
441 |
435 |
456 |
439 |
443 |
6 |
2 |
(2) |
— |
||||||||||||||||||
INTEREST EXPENSE |
|||||||||||||||||||||||||||
Interest on deposits |
11 |
11 |
12 |
13 |
15 |
— |
— |
(4) |
(23) |
||||||||||||||||||
Interest on medium- and long-term debt |
14 |
14 |
14 |
14 |
14 |
— |
— |
— |
— |
||||||||||||||||||
Total interest expense |
25 |
25 |
26 |
27 |
29 |
— |
— |
(4) |
(16) |
||||||||||||||||||
Net interest income |
416 |
410 |
430 |
412 |
414 |
6 |
2 |
2 |
1 |
||||||||||||||||||
Provision for credit losses |
11 |
9 |
9 |
8 |
13 |
2 |
26 |
(2) |
(15) |
||||||||||||||||||
Net interest income after provision for credit losses |
405 |
401 |
421 |
404 |
401 |
4 |
1 |
4 |
1 |
||||||||||||||||||
NONINTEREST INCOME |
|||||||||||||||||||||||||||
Service charges on deposit accounts |
54 |
54 |
53 |
53 |
53 |
— |
— |
1 |
2 |
||||||||||||||||||
Fiduciary income |
45 |
44 |
43 |
41 |
44 |
1 |
2 |
1 |
4 |
||||||||||||||||||
Commercial lending fees |
23 |
20 |
28 |
28 |
22 |
3 |
16 |
1 |
3 |
||||||||||||||||||
Card fees |
19 |
19 |
19 |
20 |
18 |
— |
— |
1 |
3 |
||||||||||||||||||
Letter of credit fees |
15 |
14 |
15 |
17 |
16 |
1 |
2 |
(1) |
(11) |
||||||||||||||||||
Bank-owned life insurance |
11 |
9 |
9 |
12 |
10 |
2 |
13 |
1 |
6 |
||||||||||||||||||
Foreign exchange income |
12 |
9 |
9 |
9 |
9 |
3 |
31 |
3 |
29 |
||||||||||||||||||
Brokerage fees |
4 |
5 |
4 |
4 |
4 |
(1) |
(10) |
— |
— |
||||||||||||||||||
Net securities gains (losses) |
— |
1 |
— |
1 |
(2) |
(1) |
N/M |
2 |
N/M |
||||||||||||||||||
Other noninterest income |
37 |
33 |
39 |
43 |
48 |
4 |
16 |
(11) |
(19) |
||||||||||||||||||
Total noninterest income |
220 |
208 |
219 |
228 |
222 |
12 |
6 |
(2) |
(1) |
||||||||||||||||||
NONINTEREST EXPENSES |
|||||||||||||||||||||||||||
Salaries and benefits expense |
240 |
247 |
258 |
255 |
245 |
(7) |
(3) |
(5) |
(2) |
||||||||||||||||||
Net occupancy expense |
39 |
40 |
41 |
41 |
39 |
(1) |
(3) |
— |
— |
||||||||||||||||||
Equipment expense |
15 |
14 |
15 |
15 |
15 |
1 |
3 |
— |
— |
||||||||||||||||||
Outside processing fee expense |
30 |
28 |
30 |
31 |
30 |
2 |
6 |
— |
— |
||||||||||||||||||
Software expense |
25 |
22 |
24 |
22 |
22 |
3 |
11 |
3 |
12 |
||||||||||||||||||
Litigation-related expense |
3 |
3 |
52 |
(4) |
1 |
— |
— |
2 |
N/M |
||||||||||||||||||
FDIC insurance expense |
8 |
8 |
7 |
9 |
8 |
— |
— |
— |
— |
||||||||||||||||||
Advertising expense |
5 |
6 |
3 |
6 |
6 |
(1) |
— |
(1) |
(9) |
||||||||||||||||||
Other noninterest expenses |
39 |
38 |
43 |
42 |
50 |
1 |
5 |
(11) |
(20) |
||||||||||||||||||
Total noninterest expenses |
404 |
406 |
473 |
417 |
416 |
(2) |
— |
(12) |
(3) |
||||||||||||||||||
Income before income taxes |
221 |
203 |
167 |
215 |
207 |
18 |
9 |
14 |
7 |
||||||||||||||||||
Provision for income taxes |
70 |
64 |
50 |
68 |
64 |
6 |
10 |
6 |
10 |
||||||||||||||||||
NET INCOME |
151 |
139 |
117 |
147 |
143 |
12 |
9 |
8 |
5 |
||||||||||||||||||
Less income allocated to participating securities |
2 |
2 |
2 |
2 |
2 |
— |
— |
— |
— |
||||||||||||||||||
Net income attributable to common shares |
$ |
149 |
$ |
137 |
$ |
115 |
$ |
145 |
$ |
141 |
$ |
12 |
9 |
% |
$ |
8 |
6 |
% |
|||||||||
Earnings per common share: |
|||||||||||||||||||||||||||
Basic |
$ |
0.83 |
$ |
0.76 |
$ |
0.64 |
$ |
0.80 |
$ |
0.77 |
$ |
0.07 |
9 |
% |
$ |
0.06 |
8 |
% |
|||||||||
Diluted |
0.80 |
0.73 |
0.62 |
0.78 |
0.76 |
0.07 |
10 |
0.04 |
5 |
||||||||||||||||||
Comprehensive income |
172 |
205 |
267 |
144 |
15 |
(33) |
(16) |
157 |
N/M |
||||||||||||||||||
Cash dividends declared on common stock |
36 |
35 |
31 |
31 |
32 |
1 |
5 |
4 |
15 |
||||||||||||||||||
Cash dividends declared per common share |
0.20 |
0.19 |
0.17 |
0.17 |
0.17 |
0.01 |
5 |
0.03 |
18 |
N/M - Not Meaningful |
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited) |
||||||||||||||||
Comerica Incorporated and Subsidiaries |
||||||||||||||||
2014 |
2013 |
|||||||||||||||
(in millions) |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
2nd Qtr |
|||||||||||
Balance at beginning of period |
$ |
594 |
$ |
598 |
$ |
604 |
$ |
613 |
$ |
617 |
||||||
Loan charge-offs: |
||||||||||||||||
Commercial |
19 |
19 |
31 |
20 |
19 |
|||||||||||
Real estate construction |
— |
— |
— |
1 |
2 |
|||||||||||
Commercial mortgage |
5 |
8 |
5 |
9 |
9 |
|||||||||||
Residential mortgage |
— |
— |
1 |
1 |
1 |
|||||||||||
Consumer |
4 |
3 |
4 |
8 |
4 |
|||||||||||
Total loan charge-offs |
28 |
30 |
41 |
39 |
35 |
|||||||||||
Recoveries on loans previously charged-off: |
||||||||||||||||
Commercial |
11 |
11 |
17 |
8 |
11 |
|||||||||||
Real estate construction |
1 |
— |
3 |
2 |
1 |
|||||||||||
Commercial mortgage |
3 |
3 |
5 |
7 |
3 |
|||||||||||
Lease financing |
— |
2 |
— |
1 |
— |
|||||||||||
Residential mortgage |
3 |
— |
1 |
1 |
1 |
|||||||||||
Consumer |
1 |
2 |
2 |
1 |
2 |
|||||||||||
Total recoveries |
19 |
18 |
28 |
20 |
18 |
|||||||||||
Net loan charge-offs |
9 |
12 |
13 |
19 |
17 |
|||||||||||
Provision for loan losses |
6 |
8 |
7 |
10 |
13 |
|||||||||||
Balance at end of period |
$ |
591 |
$ |
594 |
$ |
598 |
$ |
604 |
$ |
613 |
||||||
Allowance for loan losses as a percentage of total loans |
1.23 |
% |
1.28 |
% |
1.32 |
% |
1.37 |
% |
1.35 |
% |
||||||
Net loan charge-offs as a percentage of average total loans |
0.08 |
0.10 |
0.12 |
0.18 |
0.15 |
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited) |
||||||||||||||||
Comerica Incorporated and Subsidiaries |
||||||||||||||||
2014 |
2013 |
|||||||||||||||
(in millions) |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
2nd Qtr |
|||||||||||
Balance at beginning of period |
$ |
37 |
$ |
36 |
$ |
34 |
$ |
36 |
$ |
36 |
||||||
Add: Provision for credit losses on lending-related commitments |
5 |
1 |
2 |
(2) |
— |
|||||||||||
Balance at end of period |
$ |
42 |
$ |
37 |
$ |
36 |
$ |
34 |
$ |
36 |
||||||
Unfunded lending-related commitments sold |
$ |
— |
$ |
— |
$ |
1 |
$ |
2 |
$ |
1 |
NONPERFORMING ASSETS (unaudited) |
||||||||||||||||
Comerica Incorporated and Subsidiaries |
||||||||||||||||
2014 |
2013 |
|||||||||||||||
(in millions) |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
2nd Qtr |
|||||||||||
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS |
||||||||||||||||
Nonaccrual loans: |
||||||||||||||||
Business loans: |
||||||||||||||||
Commercial |
$ |
72 |
$ |
54 |
$ |
81 |
$ |
107 |
$ |
102 |
||||||
Real estate construction |
19 |
19 |
21 |
25 |
28 |
|||||||||||
Commercial mortgage |
156 |
162 |
156 |
206 |
226 |
|||||||||||
International |
— |
— |
4 |
— |
— |
|||||||||||
Total nonaccrual business loans |
247 |
235 |
262 |
338 |
356 |
|||||||||||
Retail loans: |
||||||||||||||||
Residential mortgage |
45 |
48 |
53 |
63 |
62 |
|||||||||||
Consumer: |
||||||||||||||||
Home equity |
32 |
32 |
33 |
34 |
28 |
|||||||||||
Other consumer |
2 |
2 |
2 |
2 |
3 |
|||||||||||
Total consumer |
34 |
34 |
35 |
36 |
31 |
|||||||||||
Total nonaccrual retail loans |
79 |
82 |
88 |
99 |
93 |
|||||||||||
Total nonaccrual loans |
326 |
317 |
350 |
437 |
449 |
|||||||||||
Reduced-rate loans |
21 |
21 |
24 |
22 |
22 |
|||||||||||
Total nonperforming loans (a) |
347 |
338 |
374 |
459 |
471 |
|||||||||||
Foreclosed property |
13 |
14 |
9 |
19 |
29 |
|||||||||||
Total nonperforming assets (a) |
$ |
360 |
$ |
352 |
$ |
383 |
$ |
478 |
$ |
500 |
||||||
Nonperforming loans as a percentage of total loans |
0.73 |
% |
0.73 |
% |
0.82 |
% |
1.04 |
% |
1.04 |
% |
||||||
Nonperforming assets as a percentage of total loans and foreclosed property |
0.75 |
0.76 |
0.84 |
1.08 |
1.10 |
|||||||||||
Allowance for loan losses as a percentage of total nonperforming loans |
170 |
176 |
160 |
131 |
130 |
|||||||||||
Loans past due 90 days or more and still accruing |
$ |
7 |
$ |
10 |
$ |
16 |
$ |
25 |
$ |
20 |
||||||
ANALYSIS OF NONACCRUAL LOANS |
||||||||||||||||
Nonaccrual loans at beginning of period |
$ |
317 |
$ |
350 |
$ |
437 |
$ |
449 |
$ |
494 |
||||||
Loans transferred to nonaccrual (b) |
53 |
19 |
23 |
50 |
37 |
|||||||||||
Nonaccrual business loan gross charge-offs (c) |
(24) |
(27) |
(33) |
(25) |
(25) |
|||||||||||
Nonaccrual business loans sold (d) |
(6) |
(3) |
(14) |
(17) |
(9) |
|||||||||||
Payments/Other (e) |
(14) |
(22) |
(63) |
(20) |
(48) |
|||||||||||
Nonaccrual loans at end of period |
$ |
326 |
$ |
317 |
$ |
350 |
$ |
437 |
$ |
449 |
||||||
(a) Excludes loans acquired with credit impairment. |
||||||||||||||||
(b) Based on an analysis of nonaccrual loans with book balances greater than $2 million. |
||||||||||||||||
(c) Analysis of gross loan charge-offs: |
||||||||||||||||
Nonaccrual business loans |
$ |
24 |
$ |
27 |
$ |
33 |
$ |
25 |
$ |
25 |
||||||
Performing criticized loans |
— |
— |
3 |
5 |
5 |
|||||||||||
Consumer and residential mortgage loans |
4 |
3 |
5 |
9 |
5 |
|||||||||||
Total gross loan charge-offs |
$ |
28 |
$ |
30 |
$ |
41 |
$ |
39 |
$ |
35 |
||||||
(d) Analysis of loans sold: |
||||||||||||||||
Nonaccrual business loans |
$ |
6 |
$ |
3 |
$ |
14 |
$ |
17 |
$ |
9 |
||||||
Performing criticized loans |
8 |
6 |
22 |
31 |
40 |
|||||||||||
Total criticized loans sold |
$ |
14 |
$ |
9 |
$ |
36 |
$ |
48 |
$ |
49 |
||||||
(e) Includes net changes related to nonaccrual loans with balances less than $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed property. Excludes business loan gross charge-offs and business nonaccrual loans sold. |
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited) |
|||||||||||||||||
Comerica Incorporated and Subsidiaries |
|||||||||||||||||
Six Months Ended |
|||||||||||||||||
June 30, 2014 |
June 30, 2013 |
||||||||||||||||
Average |
Average |
Average |
Average |
||||||||||||||
(dollar amounts in millions) |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
|||||||||||
Commercial loans |
$ |
29,130 |
$ |
453 |
3.13 |
% |
$ |
28,225 |
$ |
462 |
3.30 |
% |
|||||
Real estate construction loans |
1,871 |
32 |
3.42 |
1,384 |
28 |
4.10 |
|||||||||||
Commercial mortgage loans |
8,759 |
170 |
3.92 |
9,295 |
183 |
3.97 |
|||||||||||
Lease financing |
849 |
16 |
3.66 |
856 |
14 |
3.23 |
|||||||||||
International loans |
1,315 |
24 |
3.66 |
1,272 |
23 |
3.72 |
|||||||||||
Residential mortgage loans |
1,749 |
33 |
3.84 |
1,579 |
33 |
4.21 |
|||||||||||
Consumer loans |
2,232 |
35 |
3.19 |
2,145 |
36 |
3.33 |
|||||||||||
Total loans (a) |
45,905 |
763 |
3.35 |
44,756 |
779 |
3.51 |
|||||||||||
Mortgage-backed securities available-for-sale |
8,954 |
107 |
2.39 |
9,532 |
104 |
2.18 |
|||||||||||
Other investment securities available-for-sale |
369 |
1 |
0.44 |
374 |
1 |
0.55 |
|||||||||||
Total investment securities available-for-sale |
9,323 |
108 |
2.31 |
9,906 |
105 |
2.16 |
|||||||||||
Interest-bearing deposits with banks (b) |
4,695 |
7 |
0.26 |
3,990 |
5 |
0.26 |
|||||||||||
Other short-term investments |
110 |
— |
0.63 |
117 |
1 |
1.67 |
|||||||||||
Total earning assets |
60,033 |
878 |
2.94 |
58,769 |
890 |
3.06 |
|||||||||||
Cash and due from banks |
917 |
975 |
|||||||||||||||
Allowance for loan losses |
(602) |
(629) |
|||||||||||||||
Accrued income and other assets |
4,446 |
4,618 |
|||||||||||||||
Total assets |
$ |
64,794 |
$ |
63,733 |
|||||||||||||
Money market and interest-bearing checking deposits |
$ |
22,279 |
12 |
0.11 |
$ |
21,442 |
15 |
0.14 |
|||||||||
Savings deposits |
1,721 |
— |
0.03 |
1,640 |
— |
0.03 |
|||||||||||
Customer certificates of deposit |
5,075 |
9 |
0.36 |
5,715 |
13 |
0.45 |
|||||||||||
Foreign office time deposits |
378 |
1 |
0.52 |
505 |
2 |
0.57 |
|||||||||||
Total interest-bearing deposits |
29,453 |
22 |
0.15 |
29,302 |
30 |
0.20 |
|||||||||||
Short-term borrowings |
198 |
— |
0.03 |
158 |
— |
0.09 |
|||||||||||
Medium- and long-term debt |
3,270 |
28 |
1.64 |
4,374 |
29 |
1.37 |
|||||||||||
Total interest-bearing sources |
32,921 |
50 |
0.30 |
33,834 |
59 |
0.35 |
|||||||||||
Noninterest-bearing deposits |
23,626 |
21,793 |
|||||||||||||||
Accrued expenses and other liabilities |
967 |
1,140 |
|||||||||||||||
Total shareholders' equity |
7,280 |
6,966 |
|||||||||||||||
Total liabilities and shareholders' equity |
$ |
64,794 |
$ |
63,733 |
|||||||||||||
Net interest income/rate spread (FTE) |
$ |
828 |
2.64 |
$ |
831 |
2.71 |
|||||||||||
FTE adjustment |
$ |
2 |
$ |
1 |
|||||||||||||
Impact of net noninterest-bearing sources of funds |
0.14 |
0.15 |
|||||||||||||||
Net interest margin (as a percentage of average earning assets) (FTE) (a) (b) |
2.78 |
% |
2.86 |
% |
(a) |
Accretion of the purchase discount on the acquired loan portfolio of $22 million and $18 million in the six months ended June 30, 2014 and 2013, respectively, increased the net interest margin by 7 basis points and 6 basis points in each respective period. |
(b) |
Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 20 basis points and 18 basis points in the six months ended June 30, 2014 and 2013, respectively. |
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited) |
||||||||||||||||||||||||||
Comerica Incorporated and Subsidiaries |
||||||||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||||||||
June 30, 2014 |
March 31, 2014 |
June 30, 2013 |
||||||||||||||||||||||||
Average |
Average |
Average |
Average |
Average |
Average |
|||||||||||||||||||||
(dollar amounts in millions) |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
|||||||||||||||||
Commercial loans |
$ |
29,890 |
$ |
231 |
3.10 |
% |
$ |
28,362 |
$ |
221 |
3.17 |
% |
$ |
28,393 |
$ |
233 |
3.29 |
% |
||||||||
Real estate construction loans |
1,913 |
16 |
3.44 |
1,827 |
15 |
3.40 |
1,453 |
15 |
4.04 |
|||||||||||||||||
Commercial mortgage loans |
8,749 |
85 |
3.88 |
8,770 |
86 |
3.97 |
9,192 |
88 |
3.86 |
|||||||||||||||||
Lease financing |
850 |
7 |
3.26 |
848 |
9 |
4.07 |
855 |
7 |
3.22 |
|||||||||||||||||
International loans |
1,328 |
12 |
3.64 |
1,301 |
12 |
3.68 |
1,262 |
12 |
3.81 |
|||||||||||||||||
Residential mortgage loans |
1,773 |
17 |
3.82 |
1,724 |
17 |
3.86 |
1,602 |
16 |
4.04 |
|||||||||||||||||
Consumer loans |
2,222 |
18 |
3.22 |
2,243 |
17 |
3.16 |
2,136 |
18 |
3.30 |
|||||||||||||||||
Total loans (a) |
46,725 |
386 |
3.31 |
45,075 |
377 |
3.39 |
44,893 |
389 |
3.47 |
|||||||||||||||||
Mortgage-backed securities available-for-sale |
8,996 |
53 |
2.35 |
8,911 |
55 |
2.42 |
9,415 |
51 |
2.22 |
|||||||||||||||||
Other investment securities available-for-sale |
368 |
— |
0.46 |
371 |
— |
0.43 |
378 |
1 |
0.52 |
|||||||||||||||||
Total investment securities available-for-sale |
9,364 |
53 |
2.28 |
9,282 |
55 |
2.34 |
9,793 |
52 |
2.15 |
|||||||||||||||||
Interest-bearing deposits with banks (b) |
3,949 |
3 |
0.25 |
5,448 |
4 |
0.26 |
4,125 |
3 |
0.26 |
|||||||||||||||||
Other short-term investments |
110 |
— |
0.61 |
111 |
— |
0.66 |
117 |
— |
1.05 |
|||||||||||||||||
Total earning assets |
60,148 |
442 |
2.95 |
59,916 |
436 |
2.94 |
58,928 |
444 |
3.02 |
|||||||||||||||||
Cash and due from banks |
921 |
913 |
972 |
|||||||||||||||||||||||
Allowance for loan losses |
(602) |
(603) |
(625) |
|||||||||||||||||||||||
Accrued income and other assets |
4,412 |
4,482 |
4,431 |
|||||||||||||||||||||||
Total assets |
$ |
64,879 |
$ |
64,708 |
$ |
63,706 |
||||||||||||||||||||
Money market and interest-bearing checking deposits |
$ |
22,296 |
6 |
0.10 |
$ |
22,261 |
6 |
0.11 |
$ |
21,544 |
8 |
0.13 |
||||||||||||||
Savings deposits |
1,742 |
— |
0.03 |
1,700 |
— |
0.03 |
1,658 |
— |
0.03 |
|||||||||||||||||
Customer certificates of deposit |
5,041 |
5 |
0.36 |
5,109 |
5 |
0.36 |
5,685 |
6 |
0.43 |
|||||||||||||||||
Foreign office time deposits |
294 |
— |
0.68 |
464 |
— |
0.42 |
485 |
1 |
0.60 |
|||||||||||||||||
Total interest-bearing deposits |
29,373 |
11 |
0.15 |
29,534 |
11 |
0.15 |
29,372 |
15 |
0.19 |
|||||||||||||||||
Short-term borrowings |
210 |
— |
0.03 |
185 |
— |
0.03 |
193 |
— |
0.07 |
|||||||||||||||||
Medium- and long-term debt |
2,999 |
14 |
1.77 |
3,545 |
14 |
1.53 |
4,044 |
14 |
1.43 |
|||||||||||||||||
Total interest-bearing sources |
32,582 |
25 |
0.30 |
33,264 |
25 |
0.30 |
33,609 |
29 |
0.34 |
|||||||||||||||||
Noninterest-bearing deposits |
24,011 |
23,236 |
22,076 |
|||||||||||||||||||||||
Accrued expenses and other liabilities |
955 |
979 |
1,042 |
|||||||||||||||||||||||
Total shareholders' equity |
7,331 |
7,229 |
6,979 |
|||||||||||||||||||||||
Total liabilities and shareholders' equity |
$ |
64,879 |
$ |
64,708 |
$ |
63,706 |
||||||||||||||||||||
Net interest income/rate spread (FTE) |
$ |
417 |
2.65 |
$ |
411 |
2.64 |
$ |
415 |
2.68 |
|||||||||||||||||
FTE adjustment |
$ |
1 |
$ |
1 |
$ |
1 |
||||||||||||||||||||
Impact of net noninterest-bearing sources of funds |
0.13 |
0.13 |
0.15 |
|||||||||||||||||||||||
Net interest margin (as a percentage of average earning assets) (FTE) (a) (b) |
2.78 |
% |
2.77 |
% |
2.83 |
% |
(a) |
Accretion of the purchase discount on the acquired loan portfolio of $10 million, $12 million and $7 million in the second and first quarters of 2014 and the second quarter of 2013, respectively, increased the net interest margin by 7 basis points, 8 basis points and 5 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 17 basis points, 24 basis points and 18 basis points in the second and first quarters of 2014 and the second quarter of 2013, respectively. |
CONSOLIDATED STATISTICAL DATA (unaudited) |
|||||||||||||||
Comerica Incorporated and Subsidiaries |
|||||||||||||||
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|||||||||||
(in millions, except per share data) |
2014 |
2014 |
2013 |
2013 |
2013 |
||||||||||
Commercial loans: |
|||||||||||||||
Floor plan |
$ |
3,576 |
$ |
3,437 |
$ |
3,504 |
$ |
2,869 |
$ |
3,241 |
|||||
Other |
27,410 |
26,337 |
25,311 |
25,028 |
25,945 |
||||||||||
Total commercial loans |
30,986 |
29,774 |
28,815 |
27,897 |
29,186 |
||||||||||
Real estate construction loans |
1,939 |
1,847 |
1,762 |
1,552 |
1,479 |
||||||||||
Commercial mortgage loans |
8,747 |
8,801 |
8,787 |
8,785 |
9,007 |
||||||||||
Lease financing |
822 |
849 |
845 |
829 |
843 |
||||||||||
International loans |
1,352 |
1,250 |
1,327 |
1,286 |
1,209 |
||||||||||
Residential mortgage loans |
1,775 |
1,751 |
1,697 |
1,650 |
1,611 |
||||||||||
Consumer loans: |
|||||||||||||||
Home equity |
1,574 |
1,533 |
1,517 |
1,501 |
1,474 |
||||||||||
Other consumer |
687 |
684 |
720 |
651 |
650 |
||||||||||
Total consumer loans |
2,261 |
2,217 |
2,237 |
2,152 |
2,124 |
||||||||||
Total loans |
$ |
47,882 |
$ |
46,489 |
$ |
45,470 |
$ |
44,151 |
$ |
45,459 |
|||||
Goodwill |
$ |
635 |
$ |
635 |
$ |
635 |
$ |
635 |
$ |
635 |
|||||
Core deposit intangible |
14 |
15 |
16 |
17 |
18 |
||||||||||
Loan servicing rights |
1 |
1 |
1 |
1 |
2 |
||||||||||
Tier 1 common capital ratio (a) (b) |
10.49 |
% |
10.58 |
% |
10.64 |
% |
10.72 |
% |
10.43 |
% |
|||||
Tier 1 risk-based capital ratio (a) |
10.49 |
10.58 |
10.64 |
10.72 |
10.43 |
||||||||||
Total risk-based capital ratio (a) |
12.50 |
13.00 |
13.10 |
13.42 |
13.29 |
||||||||||
Leverage ratio (a) |
10.93 |
10.85 |
10.77 |
10.88 |
10.81 |
||||||||||
Tangible common equity ratio (b) |
10.39 |
10.20 |
10.07 |
9.87 |
10.04 |
||||||||||
Common shareholders' equity per share of common stock |
$ |
40.72 |
$ |
40.09 |
$ |
39.22 |
$ |
37.93 |
$ |
37.31 |
|||||
Tangible common equity per share of common stock (b) |
37.12 |
36.50 |
35.64 |
34.37 |
33.77 |
||||||||||
Market value per share for the quarter: |
|||||||||||||||
High |
52.60 |
53.50 |
48.69 |
43.49 |
40.44 |
||||||||||
Low |
45.34 |
43.96 |
38.64 |
38.56 |
33.55 |
||||||||||
Close |
50.16 |
51.80 |
47.54 |
39.31 |
39.83 |
||||||||||
Quarterly ratios: |
|||||||||||||||
Return on average common shareholders' equity |
8.27 |
% |
7.68 |
% |
6.66 |
% |
8.50 |
% |
8.23 |
% |
|||||
Return on average assets |
0.93 |
0.86 |
0.72 |
0.92 |
0.90 |
||||||||||
Efficiency ratio (c) |
63.35 |
65.79 |
72.81 |
65.18 |
65.03 |
||||||||||
Number of banking centers |
481 |
483 |
483 |
484 |
484 |
||||||||||
Number of employees - full time equivalent |
8,901 |
8,907 |
8,948 |
8,918 |
8,929 |
(a) |
June 30, 2014 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 |
|||||||||
June 30, |
December 31, |
June 30, |
|||||||
(in millions, except share data) |
2014 |
2013 |
2013 |
||||||
ASSETS |
|||||||||
Cash and due from subsidiary bank |
$ |
5 |
$ |
31 |
$ |
3 |
|||
Short-term investments with subsidiary bank |
796 |
482 |
473 |
||||||
Other short-term investments |
96 |
96 |
92 |
||||||
Investment in subsidiaries, principally banks |
7,369 |
7,171 |
6,976 |
||||||
Premises and equipment |
2 |
4 |
4 |
||||||
Other assets |
219 |
139 |
137 |
||||||
Total assets |
$ |
8,487 |
$ |
7,923 |
$ |
7,685 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||
Medium- and long-term debt |
$ |
960 |
$ |
617 |
$ |
622 |
|||
Other liabilities |
158 |
156 |
155 |
||||||
Total liabilities |
1,118 |
773 |
777 |
||||||
Common stock - $5 par value: |
|||||||||
Authorized - 325,000,000 shares |
|||||||||
Issued - 228,164,824 shares |
1,141 |
1,141 |
1,141 |
||||||
Capital surplus |
2,175 |
2,179 |
2,160 |
||||||
Accumulated other comprehensive loss |
(304) |
(391) |
(538) |
||||||
Retained earnings |
6,520 |
6,318 |
6,124 |
||||||
Less cost of common stock in treasury - 47,194,492 shares at 6/30/14; 45,860,786 shares at 12/31/13 and 42,999,083 shares at 6/30/13 |
(2,163) |
(2,097) |
(1,979) |
||||||
Total shareholders' equity |
7,369 |
7,150 |
6,908 |
||||||
Total liabilities and shareholders' equity |
$ |
8,487 |
$ |
7,923 |
$ |
7,685 |
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) |
$ |
5,928 |
$ |
(1,879) |
$ |
6,939 |
|||||||
Net income |
— |
— |
— |
— |
277 |
— |
277 |
|||||||||||||
Other comprehensive loss, net of tax |
— |
— |
— |
(125) |
— |
— |
(125) |
|||||||||||||
Cash dividends declared on common stock ($0.34 per share) |
— |
— |
— |
— |
(64) |
— |
(64) |
|||||||||||||
Purchase of common stock |
(4.1) |
— |
— |
— |
— |
(146) |
(146) |
|||||||||||||
Net issuance of common stock under employee stock plans |
1.0 |
— |
(19) |
— |
(17) |
45 |
9 |
|||||||||||||
Share-based compensation |
— |
— |
18 |
— |
— |
— |
18 |
|||||||||||||
Other |
— |
— |
(1) |
— |
— |
1 |
— |
|||||||||||||
BALANCE AT JUNE 30, 2013 |
185.2 |
$ |
1,141 |
$ |
2,160 |
$ |
(538) |
$ |
6,124 |
$ |
(1,979) |
$ |
6,908 |
|||||||
BALANCE AT DECEMBER 31, 2013 |
182.3 |
$ |
1,141 |
$ |
2,179 |
$ |
(391) |
$ |
6,318 |
$ |
(2,097) |
$ |
7,150 |
|||||||
Net income |
— |
— |
— |
— |
290 |
— |
290 |
|||||||||||||
Other comprehensive income, net of tax |
— |
— |
— |
87 |
— |
— |
87 |
|||||||||||||
Cash dividends declared on common stock ($0.39 per share) |
— |
— |
— |
— |
(71) |
— |
(71) |
|||||||||||||
Purchase of common stock |
(3.0) |
— |
— |
— |
— |
(141) |
(141) |
|||||||||||||
Net issuance of common stock under employee stock plans |
1.6 |
— |
(25) |
— |
(17) |
74 |
32 |
|||||||||||||
Share-based compensation |
— |
— |
22 |
— |
— |
— |
22 |
|||||||||||||
Other |
— |
— |
(1) |
— |
— |
1 |
— |
|||||||||||||
BALANCE AT JUNE 30, 2014 |
180.9 |
$ |
1,141 |
$ |
2,175 |
$ |
(304) |
$ |
6,520 |
$ |
(2,163) |
$ |
7,369 |
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited) |
|||||||||||||||||||||||
Comerica Incorporated and Subsidiaries |
|||||||||||||||||||||||
(dollar amounts in millions) |
Business |
Retail |
Wealth |
||||||||||||||||||||
Three Months Ended June 30, 2014 |
Bank |
Bank |
Management |
Finance |
Other |
Total |
|||||||||||||||||
Earnings summary: |
|||||||||||||||||||||||
Net interest income (expense) (FTE) |
$ |
376 |
$ |
149 |
$ |
46 |
$ |
(160) |
$ |
6 |
$ |
417 |
|||||||||||
Provision for credit losses |
32 |
(4) |
(9) |
— |
(8) |
11 |
|||||||||||||||||
Noninterest income |
95 |
41 |
67 |
15 |
2 |
220 |
|||||||||||||||||
Noninterest expenses |
143 |
171 |
79 |
2 |
9 |
404 |
|||||||||||||||||
Provision (benefit) for income taxes (FTE) |
101 |
8 |
15 |
(56) |
3 |
71 |
|||||||||||||||||
Net income (loss) |
$ |
195 |
$ |
15 |
$ |
28 |
$ |
(91) |
$ |
4 |
$ |
151 |
|||||||||||
Net credit-related charge-offs (recoveries) |
$ |
7 |
$ |
4 |
$ |
(2) |
$ |
— |
$ |
— |
$ |
9 |
|||||||||||
Selected average balances: |
|||||||||||||||||||||||
Assets |
$ |
37,467 |
$ |
6,051 |
$ |
4,996 |
$ |
11,056 |
$ |
5,309 |
$ |
64,879 |
|||||||||||
Loans |
36,529 |
5,385 |
4,811 |
— |
— |
46,725 |
|||||||||||||||||
Deposits |
27,382 |
21,648 |
3,827 |
258 |
269 |
53,384 |
|||||||||||||||||
Statistical data: |
|||||||||||||||||||||||
Return on average assets (a) |
2.09 |
% |
0.27 |
% |
2.24 |
% |
N/M |
N/M |
0.93 |
% |
|||||||||||||
Efficiency ratio (b) |
30.43 |
89.99 |
69.66 |
N/M |
N/M |
63.35 |
|||||||||||||||||
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 |
$ |
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 June 30, 2013 |
Bank |
Bank |
Management |
Finance |
Other |
Total |
|||||||||||||||||
Earnings summary: |
|||||||||||||||||||||||
Net interest income (expense) (FTE) |
$ |
372 |
$ |
154 |
$ |
46 |
$ |
(165) |
8 |
$ |
415 |
||||||||||||
Provision for credit losses |
10 |
5 |
(3) |
— |
1 |
13 |
|||||||||||||||||
Noninterest income |
94 |
46 |
65 |
15 |
2 |
222 |
|||||||||||||||||
Noninterest expenses |
147 |
178 |
77 |
3 |
11 |
416 |
|||||||||||||||||
Provision (benefit) for income taxes (FTE) |
102 |
6 |
13 |
(55) |
(1) |
65 |
|||||||||||||||||
Net income (loss) |
$ |
207 |
$ |
11 |
$ |
24 |
$ |
(98) |
$ |
(1) |
$ |
143 |
|||||||||||
Net credit-related charge-offs |
$ |
11 |
$ |
4 |
$ |
2 |
$ |
— |
$ |
— |
$ |
17 |
|||||||||||
Selected average balances: |
|||||||||||||||||||||||
Assets |
$ |
36,014 |
$ |
5,962 |
$ |
4,828 |
$ |
11,514 |
$ |
5,388 |
$ |
63,706 |
|||||||||||
Loans |
34,955 |
5,271 |
4,667 |
— |
— |
44,893 |
|||||||||||||||||
Deposits |
25,987 |
21,241 |
3,701 |
283 |
236 |
51,448 |
|||||||||||||||||
Statistical data: |
|||||||||||||||||||||||
Return on average assets (a) |
2.30 |
% |
0.20 |
% |
2.00 |
% |
N/M |
N/M |
0.90 |
% |
|||||||||||||
Efficiency ratio (b) |
31.48 |
87.98 |
69.86 |
N/M |
N/M |
65.03 |
(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 June 30, 2014 |
Michigan |
California |
Texas |
Markets |
& Other |
Total |
|||||||||||||||||
Earnings summary: |
|||||||||||||||||||||||
Net interest income (expense) (FTE) |
$ |
182 |
$ |
176 |
$ |
137 |
$ |
76 |
$ |
(154) |
$ |
417 |
|||||||||||
Provision for credit losses |
(9) |
14 |
22 |
(8) |
(8) |
11 |
|||||||||||||||||
Noninterest income |
94 |
39 |
31 |
39 |
17 |
220 |
|||||||||||||||||
Noninterest expenses |
159 |
101 |
89 |
44 |
11 |
404 |
|||||||||||||||||
Provision (benefit) for income taxes (FTE) |
46 |
37 |
21 |
20 |
(53) |
71 |
|||||||||||||||||
Net income (loss) |
$ |
80 |
$ |
63 |
$ |
36 |
$ |
59 |
$ |
(87) |
$ |
151 |
|||||||||||
Net credit-related charge-offs (recoveries) |
$ |
10 |
$ |
5 |
$ |
2 |
$ |
(8) |
$ |
— |
$ |
9 |
|||||||||||
Selected average balances: |
|||||||||||||||||||||||
Assets |
$ |
13,851 |
$ |
15,721 |
$ |
11,661 |
$ |
7,281 |
$ |
16,365 |
$ |
64,879 |
|||||||||||
Loans |
13,482 |
15,439 |
10,966 |
6,838 |
— |
46,725 |
|||||||||||||||||
Deposits |
20,694 |
15,370 |
10,724 |
6,069 |
527 |
53,384 |
|||||||||||||||||
Statistical data: |
|||||||||||||||||||||||
Return on average assets (a) |
1.48 |
% |
1.54 |
% |
1.23 |
% |
3.23 |
% |
NM |
0.93 |
% |
||||||||||||
Efficiency ratio (b) |
57.70 |
46.78 |
52.61 |
38.94 |
NM |
63.35 |
|||||||||||||||||
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 June 30, 2013 |
Michigan |
California |
Texas |
Markets |
& Other |
Total |
|||||||||||||||||
Earnings summary: |
|||||||||||||||||||||||
Net interest income (expense) (FTE) |
$ |
187 |
$ |
173 |
$ |
131 |
$ |
81 |
$ |
(157) |
$ |
415 |
|||||||||||
Provision for credit losses |
(4) |
7 |
6 |
3 |
1 |
13 |
|||||||||||||||||
Noninterest income |
88 |
36 |
34 |
47 |
17 |
222 |
|||||||||||||||||
Noninterest expenses |
161 |
100 |
89 |
52 |
14 |
416 |
|||||||||||||||||
Provision (benefit) for income taxes (FTE) |
41 |
37 |
24 |
19 |
(56) |
65 |
|||||||||||||||||
Net income (loss) |
$ |
77 |
$ |
65 |
$ |
46 |
$ |
54 |
$ |
(99) |
$ |
143 |
|||||||||||
Net credit-related charge-offs |
$ |
4 |
$ |
12 |
$ |
(3) |
$ |
4 |
$ |
— |
$ |
17 |
|||||||||||
Selected average balances: |
|||||||||||||||||||||||
Assets |
$ |
14,022 |
$ |
14,155 |
$ |
10,886 |
$ |
7,741 |
$ |
16,902 |
$ |
63,706 |
|||||||||||
Loans |
13,598 |
13,912 |
10,179 |
7,204 |
— |
44,893 |
|||||||||||||||||
Deposits |
20,159 |
14,671 |
10,187 |
5,912 |
519 |
51,448 |
|||||||||||||||||
Statistical data: |
|||||||||||||||||||||||
Return on average assets (a) |
1.47 |
% |
1.65 |
% |
1.62 |
% |
2.79 |
% |
N/M |
0.90 |
% |
||||||||||||
Efficiency ratio (b) |
58.17 |
47.73 |
53.39 |
41.16 |
N/M |
65.03 |
(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 |
|||||||||||||||
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
|||||||||||
(dollar amounts in millions) |
2014 |
2014 |
2013 |
2013 |
2013 |
||||||||||
Tier 1 Common Capital Ratio: |
|||||||||||||||
Tier 1 and Tier 1 common capital (a) (b) |
$ |
7,027 |
$ |
6,962 |
$ |
6,895 |
$ |
6,862 |
$ |
6,800 |
|||||
Risk-weighted assets (a) (b) |
67,009 |
65,788 |
64,825 |
64,027 |
65,220 |
||||||||||
Tier 1 and Tier 1 common risk-based capital ratio (b) |
10.49 |
% |
10.58 |
% |
10.64 |
% |
10.72 |
% |
10.43 |
% |
|||||
Basel III Common Equity Tier 1 Capital Ratio: |
|||||||||||||||
Tier 1 common capital (b) |
$ |
7,027 |
$ |
6,962 |
$ |
6,895 |
$ |
6,862 |
$ |
6,800 |
|||||
Basel III adjustments (c) |
(2) |
(2) |
(6) |
(4) |
— |
||||||||||
Basel III common equity Tier 1 capital (c) |
7,025 |
6,960 |
6,889 |
6,858 |
6,800 |
||||||||||
Risk-weighted assets (a) (b) |
$ |
67,009 |
$ |
65,788 |
$ |
64,825 |
$ |
64,027 |
$ |
65,220 |
|||||
Basel III adjustments (c) |
1,599 |
1,590 |
1,754 |
1,726 |
2,091 |
||||||||||
Basel III risk-weighted assets (c) |
$ |
68,608 |
$ |
67,378 |
$ |
66,579 |
$ |
65,753 |
$ |
67,311 |
|||||
Tier 1 common capital ratio (b) |
10.5 |
% |
10.6 |
% |
10.6 |
% |
10.7 |
% |
10.4 |
% |
|||||
Basel III common equity Tier 1 capital ratio (c) |
10.2 |
10.3 |
10.3 |
10.4 |
10.1 |
||||||||||
Tangible Common Equity Ratio: |
|||||||||||||||
Common shareholders' equity |
$ |
7,369 |
$ |
7,283 |
$ |
7,150 |
$ |
6,966 |
$ |
6,908 |
|||||
Less: |
|||||||||||||||
Goodwill |
635 |
635 |
635 |
635 |
635 |
||||||||||
Other intangible assets |
15 |
16 |
17 |
18 |
20 |
||||||||||
Tangible common equity |
$ |
6,719 |
$ |
6,632 |
$ |
6,498 |
$ |
6,313 |
$ |
6,253 |
|||||
Total assets |
$ |
65,325 |
$ |
65,681 |
$ |
65,224 |
$ |
64,667 |
$ |
62,944 |
|||||
Less: |
|||||||||||||||
Goodwill |
635 |
635 |
635 |
635 |
635 |
||||||||||
Other intangible assets |
15 |
16 |
17 |
18 |
20 |
||||||||||
Tangible assets |
$ |
64,675 |
$ |
65,030 |
$ |
64,572 |
$ |
64,014 |
$ |
62,289 |
|||||
Common equity ratio |
11.28 |
% |
11.09 |
% |
10.97 |
% |
10.78 |
% |
10.98 |
% |
|||||
Tangible common equity ratio |
10.39 |
10.20 |
10.07 |
9.87 |
10.04 |
||||||||||
Tangible Common Equity per Share of Common Stock: |
|||||||||||||||
Common shareholders' equity |
$ |
7,369 |
$ |
7,283 |
$ |
7,150 |
$ |
6,966 |
$ |
6,908 |
|||||
Tangible common equity |
6,719 |
6,632 |
6,498 |
6,313 |
6,253 |
||||||||||
Shares of common stock outstanding (in millions) |
181 |
182 |
182 |
184 |
185 |
||||||||||
Common shareholders' equity per share of common stock |
$ |
40.72 |
$ |
40.09 |
$ |
39.22 |
$ |
37.93 |
$ |
37.31 |
|||||
Tangible common equity per share of common stock |
37.12 |
36.50 |
35.64 |
34.37 |
33.77 |
(a) |
Tier 1 capital and risk-weighted assets as defined by regulation. |
(b) |
June 30, 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, as fully phased-in, 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, as fully phased-in. 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