DETROIT, July 17 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today
reported second quarter 2001 earnings per share of $1.13, compared with $1.12
for the 2000 second quarter. Net income was $208 million, compared with $206
million for 2000. The company's return on common equity was 18.21 percent and
its return on assets was 1.69 percent, compared with 20.80 percent and 1.77
percent, respectively, for the 2000 second quarter. All prior period
financial information has been restated to reflect the acquisition of Imperial
Bancorp, which was completed during the first quarter 2001 and accounted for
as a pooling-of-interests.
Excluding restructuring charges of $14 million ($8 million or $0.05 per
share, net of taxes) related to the Imperial acquisition, second quarter net
income was $216 million or $1.18 per share. Comerica's return on common
equity and return on assets, excluding the restructuring charges, were 18.94
percent and 1.75 percent, respectively.
Net income for the first six months of 2001 was $1.63 per share or $302
million, compared with $2.20 per share or $403 million for the same period of
2000. Excluding restructuring charges of $103 million after tax ($0.57 per
share) and the effect of a first quarter one-time $34 million after tax ($0.19
per share) charge related to long-term incentive plans at an unconsolidated
subsidiary of Munder Capital Management (the company's investment management
subsidiary), net income for the first half was $439 million or $2.39 per
share, an increase in net income of 9 percent over the same period of 2000.
Excluding these charges, Comerica's return on common equity was 19.39 percent
and return on assets was 1.78 percent for the first six months of 2001,
compared with 20.73 percent and 1.75 percent, respectively, for the first six
months of 2000.
"Comerica's second quarter financial results reflect our continuing
ability, despite a slowing economy, to generate business loans and effectively
manage risk, while focusing on efficiency," said Eugene A. Miller, chairman,
president and chief executive officer. "Our integration of Imperial remains
on track to be completed by the first quarter of 2002 and we continue to be
well positioned to leverage our principal strengths: business lending and
asset gathering."
Net Interest Income
Net interest income for the second quarter of 2001 was $527 million, an
increase of $30 million or 6 percent from the same period last year. This
increase was due to growth in earning assets and a stable net interest margin
supported by strong growth in interest-free deposits. The net interest margin
was 4.65 percent for the second quarter of 2001 and 2000, compared with 4.55
percent in the first quarter of 2001.
Noninterest Income
Noninterest income was $203 million for the second quarter of 2001, a
decrease of $39 million or 16 percent from the same quarter last year. The
second quarter 2000 noninterest income included a $6 million nonrecurring gain
from the demutualization of an insurance carrier. Excluding the effects of
gains and losses on securities, warrant income, net gains on the sales of
businesses and the nonrecurring gain mentioned above, noninterest income
decreased 8 percent in the second quarter of 2001, compared with the second
quarter of 2000. This reflects a $19 million decrease in investment advisory
revenue from the company's Munder Capital Management subsidiary, as the market
values of technology-related stocks declined from their record highs last
year. At June 30, 2001, assets under management at Munder were $44 billion,
including $3.3 billion in the NetNet, International NetNet and Future Tech
funds, compared with $58 billion and $11.2 billion, respectively, for the
second quarter of 2000. Despite weakness in stock market-related segments,
strong gains were recorded in commercial lending fees (14 percent) and deposit
fees (10 percent), when compared with the second quarter of 2000.
Noninterest Expenses
Noninterest expenses were $373 million in the second quarter 2001, which
included $14 million of restructuring charges related to the Imperial
acquisition. This was an increase of $7 million over the comparable quarter
in 2000. Excluding the previously announced restructuring charge and a $6
million contribution to Comerica's charitable foundation in the second quarter
of 2000, noninterest expenses decreased $2 million compared with the same
quarter last year. Ongoing cost discipline and revenue-related incentives
contributed to the decline. Comerica's efficiency ratio, excluding the
restructuring charge, was 49 percent for the second quarter of 2001 and 50
percent for the second quarter of 2000.
Credit Quality
The provision for credit losses was $37 million in the second quarter of
2001, a decrease of $20 million compared with the second quarter of 2000. Net
charge-offs for the quarter were $37 million or 0.35 percent of average total
loans, compared with $37 million or 0.38 percent in the second quarter of
2000. The allowance for credit losses as a percentage of total loans at
June 30, 2001 was 1.57 percent, unchanged compared with March 31, 2001 and up
from 1.54 percent at June 30, 2000. Nonperforming assets were $480 million or
1.17 percent of loans and other real estate at June 30, 2001, compared with
$476 million or 1.16 percent at March 31, 2001, and $296 million and 0.76
percent at June 30, 2000.
For the year 2001, net charge-offs are currently expected to range from
35-to-40 basis points, while nonperforming assets are projected to range from
115-to-130 basis points of total loans and other real estate.
Outlook for 2001
Confirming the guidance after the end of the first quarter, earnings for
the full year 2001 are expected to range between $4.75 and $4.95 per share.
This earnings guidance is based on an assessment of current economic
conditions, the level of equity markets and interest rates, progress toward
business objectives and other factors, and excludes:
the restructuring charge for the Imperial merger, of which $0.57 per
share has been incurred year to date; and,
the effect of a one-time $0.19 per share charge in the first quarter
2001 related to long-term incentive plans at an unconsolidated subsidiary of
Munder.
Balance Sheet
Assets totaled $49 billion at June 30, 2001, compared with $48 billion at
June 30, 2000, while common shareholders' equity was $4.5 billion at June 30,
2001, compared with $4.0 billion one year earlier. Shares of common stock
outstanding were 178 million at June 30, 2001, compared with 177 million a
year ago. Total loans were $41 billion at June 30, 2001, compared with $39
billion a year ago. Total deposits were $37 billion at June 30, 2001,
compared with $32 billion at June 30, 2000.
Conference Call
Comerica will host a conference call to review the second quarter 2001
financial results at 8:30 a.m. ET Tuesday, July 17, 2001. Interested parties
may access the conference call by calling 706-679-5261 (event ID No. 1163093).
The call also is accessible via the Internet by clicking on "Investor
Relations" at www.comerica.com . A replay of the conference call will be
available approximately two hours following the call through July 24, 2001.
The conference call replay can be accessed by calling 800-642-1687 or
706-645-9291 (event ID No. 1163093). The replay also can be accessed through
the Internet by clicking on "Investor Relations" at www.comerica.com .
Comerica Incorporated is a multi-state financial services provider
headquartered in Detroit, with bank subsidiaries in Michigan, California, and
Texas, banking operations in Florida, and businesses in several other states.
Comerica also operates banking subsidiaries in Canada and Mexico.
Forward Looking Statement
Matters discussed in this news release contain certain forward-looking
statements that are based on management's beliefs and assumptions based on
information currently known to Comerica's management. 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 the Company's revenue, earnings or other measures of economic performance
including statements of profitability business segments and subsidiaries,
estimates of credit quality trends and current integration. Such statements
reflect the view of Comerica's management, as of the date of this conference
call with respect to future events and are subject to risks and uncertainties,
such as changes in Comerica's plans, objectives, expectations and intentions
and do not purport to speak as of any other date. Should one or more of these
risks materialize or should underlying beliefs of assumptions prove incorrect,
the Company's actual results could differ materially from those discussed in
this conference call. Factors that could cause or contribute to such
differences are changes in interest rates, changes in the accounting treatment
of any particular item, the entry of new competitors into the banking industry
as a result of the enactment of the Gramm-Leach-Bliley Act of 1999, changes in
general economic conditions and related credit and market conditions,
difficulties in integrating Imperial Bancorp or retaining key personnel and
other factors discussed in Comerica's filings with the Securities and Exchange
Commission. Forward-looking statements speak only as of the date they are
made. Comerica does not undertake to update forward-looking statements to
reflect circumstances or events that occur after the date the forward-looking
statements are made. Without limiting the foregoing, Comerica undertakes no
obligation to update earnings guidance including any of the factors that
influence earnings.
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
Three Months Ended
(in thousands, except per share data, June 30, March 31, June 30,
average balances and ratios) 2001 2001 2000
---------- ---------- ----------
PER SHARE AND COMMON STOCK DATA
Diluted net income $1.13 $0.50 $1.12
Cash dividends declared 0.44 0.44 0.40
Common shareholders' equity
(at period end) 25.32 24.80 22.34
Average diluted shares 180,387 180,248 179,393
KEY RATIOS
Return on average common equity 18.21% 8.11% 20.80%
Return on average assets 1.69% 0.76% 1.77%
Average common equity as a percentage of
average assets 9.08% 8.93% 8.34%
Core capital ratio (June 2001
estimated) 7.56% 7.41% 7.22%
Total capital ratio (June 2001
estimated) 11.40% 11.19% 10.78%
Leverage ratio (June 2001 estimated) 8.84% 8.76% 8.53%
AVERAGE BALANCES (in millions)
Commercial loans (including lease
financing) $28,090 $27,764 $26,124
International loans 2,729 2,603 2,527
Real estate construction loans 3,056 2,955 2,449
Commercial mortgage loans 5,609 5,500 5,133
Residential mortgage loans 788 800 835
Consumer loans 1,479 1,478 1,419
-------- -------- --------
Total loans $41,751 $41,100 $38,487
Earning assets 45,540 45,615 43,027
Total assets 49,388 49,331 46,501
Interest-bearing deposits 25,008 24,167 20,467
Noninterest-bearing deposits 10,219 9,370 9,073
Total interest-bearing liabilities 33,670 34,469 32,654
Common shareholders' equity 4,485 4,407 3,880
NET INTEREST INCOME
Net interest income (fully taxable equivalent
basis) $528,325 $513,340 $498,651
Fully taxable equivalent adjustment 944 1,048 958
Net interest margin 4.65% 4.55% 4.65%
CREDIT QUALITY
Nonaccrual loans $470,661 $470,478 $277,729
Reduced-rate loans 248 275 7,789
Other real estate 9,579 5,577 10,915
Total nonperforming assets 480,488 476,330 296,433
Loans 90 days past due 83,114 55,260 38,769
Gross charge-offs 46,544 45,327 44,271
Recoveries 9,751 9,916 7,339
Net charge-offs 36,793 35,411 36,932
Allowance for credit losses as a percentage
of total loans 1.57% 1.57% 1.54%
Nonperforming assets as a percentage of
total loans and other real estate 1.17% 1.16% 0.76%
Net loans charged off as a percentage of
average total loans 0.35% 0.34% 0.38%
Allowance for credit losses as a percentage
of total nonperforming assets 134% 135% 203%
ADDITIONAL DATA
Goodwill $349,099 $356,925 $380,726
Core deposit intangible 6,482 7,176 10,229
Other intangibles 1,160 1,215 3,973
Loan servicing rights 7,923 8,470 6,851
Deferred mutual fund distribution
costs 53,314 54,045 105,904
Amortization of intangibles 8,619 8,685 9,622
