DETROIT, Oct. 19 /PRNewswire-FirstCall/ -- Comerica Incorporated (NYSE: CMA) today reported third quarter 2005 earnings of $238 million, or $1.41 per diluted share, compared to $217 million, or $1.28 per diluted share, for the second quarter 2005 and $196 million, or $1.13 per diluted share, for the third quarter 2004.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010807/CMALOGO ) (dollar amounts in millions) 3rd Qtr '05 2nd Qtr '05 3rd Qtr '04 Diluted EPS $1.41 $1.28 $1.13 Net Interest Income $512 $483 $451 Net Interest Margin 4.15% 4.09% 3.86% Provision for Loan Losses $(30) $2 $ - Noninterest Income $232 $219 $206 Noninterest Expenses $422 $383 $372 Net Income $238 $217 $196 Return on Equity 18.59% 16.99% 15.68%
"Comerica's third quarter results demonstrate solid financial performance," said Ralph W. Babb Jr., chairman and chief executive officer. "They also reflect our continuing investments in people, branches and technology, which are aimed at improving the balance of our business mix."
Net Interest Income
Net interest income was $512 million for the third quarter 2005, compared to $483 million for the second quarter 2005 and $451 million for the third quarter 2004. In the third quarter 2005, the Corporation changed its warrant accounting, and recorded an adjustment to reflect its portfolio of warrants for non-marketable equity securities at fair value. Since a majority of these warrants were obtained as part of the loan origination process, the adjustment that resulted from the accounting change increased net interest income by $20 million in the third quarter 2005. The $29 million increase in net interest income from the second quarter 2005 resulted from the warrant accounting change discussed above, the spread improvement provided by non-interest bearing deposits in a rising interest rate environment, and the impact of one more day in the third quarter 2005. Average earning assets of $49.1 billion for the third quarter 2005 increased $1.7 billion from the second quarter 2005, primarily as a result of a $1.4 billion, or 3 percent, increase in average loans to $44.6 billion for the third quarter 2005. The Financial Services Division contributed $1.2 billion of the increase in average loans for the third quarter 2005. Average deposits of $41.3 billion for the third quarter 2005 increased $1.3 billion, or 3 percent, from the second quarter 2005. The Financial Services Division contributed $491 million of the increase in average deposits for the third quarter 2005. Average short-term borrowings increased $622 million in the third quarter 2005, when compared to the prior quarter.
The net interest margin increased six basis points from the second quarter 2005 to 4.15 percent in the third quarter 2005. The change in warrant accounting added 16 basis points to the net interest margin in the third quarter 2005. The net interest margin was also positively impacted by a greater contribution from noninterest-bearing deposits in a higher rate environment. Partially offsetting these increases were higher levels of low rate loans provided to customers of the Corporation's Financial Services Division.
Noninterest Income
Noninterest income was $232 million for the third quarter 2005, compared to $219 million for the second quarter 2005 and $206 million for the third quarter 2004. Included in other noninterest income in the third quarter 2005 was income (net of write-downs) from unconsolidated venture capital and private equity investments of $13 million, compared to write-downs (net of income distributions) of $5 million in the second quarter 2005. Also included in other noninterest income in the third quarter 2005 were risk management hedge ineffectiveness losses of $3 million, compared to $5 million of gains in the second quarter 2005.
Noninterest Expenses
Noninterest expenses were $422 million for the third quarter 2005, compared to $383 million for the second quarter 2005 and $372 million for the third quarter 2004. Salaries expense increased $12 million in the third quarter 2005, compared to the second quarter 2005, primarily from increases in business unit incentives, including a $4 million accrual related to the warrant accounting change discussed above. Customer services expense was $29 million in the third quarter 2005, compared to $10 million for the second quarter 2005. Customer services expense varies from period to period as a result of changes in the level of noninterest-bearing deposits in the Corporation's Financial Services Division and the earnings credit allowances provided on these deposits.
Credit Quality
(dollar amounts in millions) 3rd Qtr '05 2nd Qtr '05 3rd Qtr '04
Net Charge-offs $21 $29 $33
Net Charge-offs/
Average Total Loans 0.18% 0.27% 0.33%
Provision for Loan Losses $(30) $2 $ -
Nonperforming Assets (NPAs) $220 $246 $388
NPAs/Total Loans,
Other Real Estate &
Nonaccrual Debt Securities 0.52% 0.57% 0.98%
Allowance for Loan Losses $558 $609 $729
Allowance for Loan Losses/
Total Loans 1.33% 1.41% 1.83%
Allowance for Credit Losses on
Lending-related Commitments* $14 $15 $24
* Included in "Accrued expenses and other liabilities" on the consolidated balance sheets.
During the third quarter 2005, $81 million of loans greater than $2 million were transferred to nonaccrual status, an increase of $34 million from the second quarter 2005. Of the loans transferred to nonaccrual during the third quarter 2005, $44 million were in the airline industry. Nonperforming assets were $220 million at September 30, 2005, a decrease of $26 million from June 30, 2005.
"Continued improvement in credit quality metrics in the third quarter 2005 resulted in a $51 million decline in the allowance for loan losses from the second quarter," said Babb. "Nonperforming assets and net charge-offs continued to improve from already low levels."
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $54.3 billion and $5.1 billion, respectively, at September 30, 2005, compared to $54.7 billion and $5.1 billion, respectively, at June 30, 2005. There were approximately 165 million shares outstanding at September 30, 2005, compared to approximately 167 million shares outstanding at June 30, 2005. In the third quarter 2005, approximately 2.4 million shares were repurchased in the open market for $147 million. Comerica's third quarter 2005 estimated tier 1 common, tier 1 and total risk-based capital ratios were 8.00 percent, 8.62 percent and 11.99 percent, respectively.
Business Segments
Comerica's operations are strategically aligned into three major business segments: the Business Bank, Small Business & Personal Financial Services, and Wealth & Institutional Management. The Finance Division also is included as a segment. The financial results below are based on the internal business unit structure of the Corporation and are presented on a fully taxable equivalent (FTE) basis.
The following table presents net income (loss) by business segment.
(dollar amounts in millions) 3rd Qtr '05 2nd Qtr '05 3rd Qtr '04
Business Bank $186 75% $163 71% $173 70%
Small Business &
Personal Financial Services 40 16 49 21 48 20
Wealth & Institutional
Management 23 9 17 8 25 10
249 100% 229 100% 246 100%
Finance (20) (18) (40)
Other* 9 6 (10)
Total $238 $217 $196
* Includes items not directly associated with the major business segments or the Finance Division
Net income for the Business Bank was $186 million for the third quarter 2005, compared to $163 million for the second quarter 2005. Net interest income (FTE) of $367 million in the third quarter 2005 increased $17 million from the second quarter 2005. Third quarter 2005 net interest income (FTE) includes a $20 million adjustment resulting from the warrant accounting change discussed above, partially offset by higher levels of low rate loans in the Financial Services Division. The provision for loan losses decreased $41 million, to a negative $23 million in the third quarter 2005, compared to $18 million in the second quarter 2005, due to improvements in credit quality and an increase in recoveries. Average loans of $35.3 billion in the third quarter 2005 increased $1.2 billion, or 3 percent, compared to the second quarter 2005, primarily due to a $1.2 billion increase in loans in the Financial Services Division. Average deposits of $20.9 billion in the third quarter 2005 increased $525 million, or 3 percent, compared to the second quarter 2005, primarily due to higher deposits in the Financial Services Division. Third quarter 2005 noninterest expenses of $184 million increased $25 million from the second quarter 2005, primarily due to a $19 million increase in customer service expenses in the Financial Services Division and $4 million in incentive compensation accrual related to the warrant accounting change discussed above.
Net income for Small Business & Personal Financial Services was $40 million for the third quarter 2005, compared to $49 million for the second quarter 2005. Net interest income (FTE) of $153 million in the third quarter 2005 increased $1 million, compared to the second quarter 2005. The provision for loan losses increased $9 million, to $7 million in the third quarter 2005, compared to a negative $2 million in the second quarter 2005. Average loans of $5.9 billion in the third quarter 2005 increased $94 million, or 2 percent, over the second quarter 2005. Average deposits were $16.8 billion in the third quarter 2005, compared to $16.9 billion in the second quarter 2005.
Net income for Wealth & Institutional Management was $23 million for the third quarter 2005, compared to $17 million for the second quarter 2005. Net interest income (FTE) of $38 million in the third quarter 2005 increased $1 million from the second quarter 2005. Average loans were $3.4 billion in the third quarter 2005, compared to $3.3 billion in the second quarter 2005. Average deposits were $2.6 billion in the third quarter 2005, compared to $2.4 billion in the second quarter 2005. Noninterest income of $83 million in the third quarter 2005 increased $4 million from the second quarter 2005, primarily due to an increase in investment advisory revenue.
Geographic Market Segments
Comerica also provides market segment results for four primary geographic markets: Midwest & Other Markets, Western, Texas and Florida. The financial results below are presented on a FTE basis.
The following table presents net income (loss) by market segment.
(dollar amounts in millions) 3rd Qtr '05 2nd Qtr '05 3rd Qtr '04
Midwest & Other Markets $134 54% $111 48% $121 49%
Western 88 35 85 37 91 37
Texas 20 8 29 13 29 12
Florida 7 3 4 2 5 2
249 100% 229 100% 246 100%
Finance & Other (11) (12) (50)
Total $238 $217 $196
Net income for the Midwest & Other markets was $134 million in the third quarter 2005, compared to $111 million in the second quarter 2005. Net interest income (FTE) of $272 million in the third quarter 2005 was unchanged, compared to the second quarter 2005. The provision for loan losses declined $30 million in the third quarter 2005, compared to the second quarter 2005, due to improvements in credit quality. Average loans were $23.8 billion in the third quarter 2005, compared to $23.9 billion in the second quarter 2005. Average deposits of $18.9 billion in the third quarter 2005 remained flat, compared to the second quarter 2005.
Net income for the Western market was $88 million for the third quarter 2005, compared to $85 million for the second quarter 2005. Net interest income (FTE) of $214 million in the third quarter 2005 increased $18 million from the second quarter 2005. Third quarter 2005 net interest income (FTE) includes a $20 million adjustment resulting from the warrant accounting change discussed above, partially offset by higher levels of low rate loans in the Financial Services Division. The provision for loan losses declined $13 million in the third quarter 2005, compared to the second quarter 2005, due to improvements in credit quality. Average loans of $14.2 billion in the third quarter 2005 increased $1.3 billion, compared to the second quarter 2005, primarily due to a $1.2 billion increase in loans in the Financial Service Division. Average deposits of $17.4 billion in the third quarter 2005 increased $638 million, primarily due to higher deposits in the Financial Services Division. Third quarter 2005 noninterest expenses increased $24 million to $122 million, compared to the second quarter 2005, primarily due to a $19 million increase in customer service expenses in the Financial Services Division and $4 million in incentive compensation accrual related to the warrant accounting change discussed above.
Net income for the Texas market was $20 million for the third quarter 2005, compared to $29 million for the second quarter 2005. Net interest income (FTE) of $61 million in the third quarter 2005 increased $1 million from the second quarter 2005. The provision for loan losses increased $12 million, to $2 million in the third quarter 2005, compared to a negative $10 million in the second quarter 2005. Average loans of $5.1 billion increased $125 million, or 3 percent, compared to the second quarter 2005. Average deposits were $3.6 billion in the third quarter 2005, compared to $3.7 billion in the second quarter 2005.
Net income for the Florida market was $7 million for the third quarter 2005, compared to $4 million for the second quarter 2005.
Conference Call and Webcast
Comerica will host a conference call to review third quarter 2005 financial results at 8 a.m. ET Wednesday, October 19, 2005. Interested parties may access the conference call by calling (706) 679-5261 (event ID No. 9528943). The call and supplemental financial information can also be accessed on the Internet at http://www.comerica.com/ . A replay of the conference call will be available approximately two hours following the call through Saturday, November 19, 2005. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 9528943). A replay of the Webcast can also be accessed via Comerica's "Investor Relations" page at http://www.comerica.com/ .
Comerica Incorporated is a financial services company headquartered in Detroit, strategically aligned into three major business segments: the Business Bank, Small Business & Personal Financial Services, and Wealth & Institutional Management. Comerica focuses on relationships and helping businesses and people to be successful.
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," "feels," "expects," "estimates," "seeks," "strives," "plans," "intends," "outlook," "forecast," "position," "target," "mission," "assume," "achievable," "potential," "strategy," "goal," "aspiration," "outcome," "continue," "remain," "maintain," "trend," "objective" 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 the pace of an economic recovery and related changes in employment levels, the effects of war and other armed conflicts or acts of terrorism, the effects of natural disasters including, but not limited to, hurricanes, tornadoes, earthquakes and floods, the implementation of Comerica's strategies and business models, management's ability to maintain and expand customer relationships, management's ability to retain key officers and employees, changes in the accounting treatment of any particular item, the impact of regulatory examinations, declines or other changes in the businesses or industries in which Comerica has a concentration of loans, including, but not limited to, the automotive industry, the anticipated performance of any new banking branches, the entry of new competitors in Comerica's markets, changes in the level of fee income, changes in applicable laws and regulations, including those concerning taxes, banking, securities and insurance, changes in trade, monetary and fiscal policies, including the interest rate policies of the Board of Governors of the Federal Reserve System, fluctuations in inflation or interest rates, changes in general economic conditions and related credit and market conditions and adverse conditions in the stock market. Comerica cautions that the foregoing list of factors is not exclusive. 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
Comerica Incorporated and Subsidiaries
Three Months Ended
September 30, June 30, September 30,
(in millions, except per share 2005 2005 2004
data)
PER SHARE AND COMMON STOCK DATA
Diluted net income $1.41 $1.28 $1.13
Cash dividends declared 0.55 0.55 0.52
Common shareholders' equity (at
period end) 30.81 30.60 29.52
Average diluted shares (in
thousands) 168,387 169,608 172,864
KEY RATIOS
Return on average common
shareholders' equity 18.59% 16.99% 15.68%
Return on average assets 1.78 1.68 1.55
Average common shareholders' equity
as a percentage of average assets 9.57 9.88 9.91
Tier 1 common capital ratio* 8.00 7.88 8.16
Tier 1 risk-based capital ratio* 8.62 8.49 8.81
Total risk-based capital ratio* 11.99 12.08 13.06
Leverage ratio* 10.10 10.36 10.28
AVERAGE BALANCES
Commercial loans $25,230 $24,122 $22,096
Real estate construction loans 3,202 3,101 3,273
Commercial mortgage loans 8,631 8,513 7,951
Residential mortgage loans 1,418 1,357 1,239
Consumer loans 2,703 2,673 2,671
Lease financing 1,300 1,283 1,266
International loans 2,098 2,185 2,149
Total loans $44,582 $43,234 $40,645
Earning assets 49,066 47,412 46,426
Total assets 53,462 51,635 50,348
Interest-bearing deposits 25,540 25,005 25,722
Total interest-bearing liabilities 31,488 30,501 30,435
Noninterest-bearing deposits 15,734 14,995 14,012
Common shareholders' equity 5,116 5,100 4,990
NET INTEREST INCOME
Net interest income (fully taxable
equivalent basis) $513 $484 $452
Fully taxable equivalent adjustment 1 1 1
Net interest margin 4.15% 4.09% 3.86%
CREDIT QUALITY
Nonaccrual loans $186 $212 $361
Other real estate 34 34 27
Total nonperforming assets 220 246 388
Loans 90 days past due and still
accruing 14 24 20
Gross charge-offs 47 43 53
Recoveries 26 14 20
Net charge-offs 21 29 33
Allowance for loan losses as a
percentage of total loans 1.33% 1.41% 1.83%
Net loans charged off as a
percentage of average total loans 0.18 0.27 0.33
Nonperforming assets as a
percentage of total loans, other
real estate and nonaccrual debt
securities 0.52 0.57 0.98
Allowance for loan losses as a
percentage of total nonperforming
assets 253 248 188
ADDITIONAL DATA
Goodwill $247 $247 $247
Other intangibles 1 1 1
Loan servicing rights 19 19 20
Deferred mutual fund distribution
costs 7 7 9
Amortization of intangibles - - -
Nine Months Ended
September 30,
(in millions, except per share data) 2005 2004
PER SHARE AND COMMON STOCK DATA
Diluted net income $3.85 $3.15
Cash dividends declared 1.65 1.56
Common shareholders' equity (at
period end)
Average diluted shares (in thousands) 169,687 174,346
KEY RATIOS
Return on average common
shareholders' equity 17.11% 14.57%
Return on average assets 1.68 1.44
Average common shareholders' equity
as a percentage of average assets 9.81 9.88
Tier 1 common capital ratio*
Tier 1 risk-based capital ratio*
Total risk-based capital ratio*
Leverage ratio*
AVERAGE BALANCES
Commercial loans $24,207 $21,997
Real estate construction loans 3,119 3,293
Commercial mortgage loans 8,488 7,989
Residential mortgage loans 1,362 1,225
Consumer loans 2,703 2,650
Lease financing 1,281 1,276
International loans 2,173 2,171
Total loans $43,333 $40,601
Earning assets 47,716 46,960
Total assets 51,959 50,891
Interest-bearing deposits 25,402 26,173
Total interest-bearing liabilities 30,794 31,055
Noninterest-bearing deposits 14,955 13,910
Common shareholders' equity 5,096 5,029
NET INTEREST INCOME
Net interest income (fully taxable
equivalent basis) $1,458 $1,346
Fully taxable equivalent adjustment 3 2
Net interest margin 4.08% 3.82%
CREDIT QUALITY
Nonaccrual loans
Other real estate
Total nonperforming assets
Loans 90 days past due and still
accruing
Gross charge-offs $136 $213
Recoveries 48 54
Net charge-offs 88 159
Allowance for loan losses as a
percentage of total loans
Net loans charged off as a percentage
of average total loans 0.27% 0.52%
Nonperforming assets as a percentage
of total loans, other real estate
and nonaccrual debt securities
Allowance for loan losses as a
percentage of total nonperforming
assets
ADDITIONAL DATA
Goodwill
Other intangibles
Loan servicing rights
Deferred mutual fund distribution
costs
Amortization of intangibles $- $1
*September 30, 2005 ratios are estimated
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
(in millions, except September 30, June 30, December 31, September 30,
share data) 2005 2005 2004 2004
ASSETS
Cash and due from banks $1,795 $1,687 $1,139 $1,560
Short-term investments 3,619 3,402 3,230 5,055
Investment securities
available-for-sale 4,088 3,947 3,943 4,198
Commercial loans 22,754 23,690 22,039 21,146
Real estate construction
loans 3,289 3,168 3,053 3,276
Commercial mortgage loans 8,700 8,536 8,236 7,931
Residential mortgage loans 1,444 1,394 1,294 1,263
Consumer loans 2,696 2,701 2,751 2,722
Lease financing 1,286 1,296 1,265 1,260
International loans 1,972 2,239 2,205 2,117
Total loans 42,141 43,024 40,843 39,715
Less allowance for loan
losses (558) (609) (673) (729)
Net loans 41,583 42,415 40,170 38,986
Premises and equipment 499 481 415 399
Customers' liability on
acceptances outstanding 39 35 57 41
Accrued income and other
assets 2,726 2,722 2,812 2,720
Total assets $54,349 $54,689 $51,766 $52,959
LIABILITIES AND
SHAREHOLDERS' EQUITY
Noninterest-bearing
deposits $17,702 $19,236 $15,164 $16,811
Interest-bearing deposits 25,968 24,817 25,772 25,424
Total deposits 43,670 44,053 40,936 42,235
Short-term borrowings 241 108 193 225
Acceptances outstanding 39 35 57 41
Accrued expenses and other
liabilities 1,242 1,067 1,189 1,021
Medium- and long-term debt 4,066 4,309 4,286 4,401
Total liabilities 49,258 49,572 46,661 47,923
Common stock - $5 par value:
Authorized -
325,000,000 shares
Issued -
178,735,252 shares at
9/30/05, 6/30/05,
12/31/04 and 9/30/04 894 894 894 894
Capital surplus 448 433 421 408
Accumulated other
comprehensive loss (158) (99) (69) (24)
Retained earnings 4,683 4,546 4,331 4,222
Less cost of common stock
in treasury - 13,469,654
shares at 9/30/05,
11,513,612 shares at
6/30/05, 8,259,328 shares
at 12/31/04 and 8,169,292
shares at 9/30/04 (776) (657) (472) (464)
Total shareholders'
equity 5,091 5,117 5,105 5,036
Total liabilities and
shareholders' equity $54,349 $54,689 $51,766 $52,959
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Three Months Nine Months
Ended Ended
September 30, September 30,
(in millions, except per share data) 2005 2004 2005 2004
INTEREST INCOME
Interest and fees on loans $674 $514 $1,856 $1,510
Interest on investment securities 38 36 107 111
Interest on short-term investments 7 8 18 25
Total interest income 719 558 1,981 1,646
INTEREST EXPENSE
Interest on deposits 147 79 377 224
Interest on short-term borrowings 16 1 28 2
Interest on medium- and long-term
debt 44 27 121 76
Total interest expense 207 107 526 302
Net interest income 512 451 1,455 1,344
Provision for loan losses (30) - (27) 85
Net interest income after
provision for loan losses 542 451 1,482 1,259
NONINTEREST INCOME
Service charges on deposit accounts 55 57 163 178
Fiduciary income 44 43 133 128
Commercial lending fees 16 14 44 41
Letter of credit fees 18 17 56 49
Foreign exchange income 9 9 27 28
Brokerage fees 10 9 27 27
Investment advisory revenue, net 14 8 36 26
Card fees 10 8 28 23
Bank-owned life insurance 9 10 28 28
Equity in earnings of unconsolidated
subsidiaries 4 3 13 11
Warrant income 2 1 7 6
Net securities losses - (6) - -
Net gain on sales of businesses 1 - 1 7
Other noninterest income 40 33 98 102
Total noninterest income 232 206 661 654
NONINTEREST EXPENSES
Salaries 209 185 595 567
Employee benefits 46 40 137 119
Total salaries and employee
benefits 255 225 732 686
Net occupancy expense 30 32 90 93
Equipment expense 14 14 42 43
Outside processing fee expense 19 16 56 51
Software expense 12 11 35 31
Customer services 29 8 50 17
Litigation and operational losses 4 16 14 27
Other noninterest expenses 59 50 160 165
Total noninterest expenses 422 372 1,179 1,113
Income before income taxes 352 285 964 800
Provision for income taxes 114 89 310 250
NET INCOME $238 $196 $654 $550
Basic net income per common share $1.43 $1.15 $3.90 $3.19
Diluted net income per common share 1.41 1.13 3.85 3.15
Cash dividends declared on common
stock 92 88 277 268
Dividends per common share 0.55 0.52 1.65 1.56
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
(in millions, except per 2005 2005 2005 2004 2004
share data)
INTEREST INCOME
Interest and fees on loans $674 $616 $566 $544 $514
Interest on investment securities 38 34 35 36 36
Interest on short-term investments 7 5 6 11 8
Total interest income 719 655 607 591 558
INTEREST EXPENSE
Interest on deposits 147 122 108 91 79
Interest on short-term borrowings 16 9 3 2 1
Interest on medium- and long-term
debt 44 41 36 32 27
Total interest expense 207 172 147 125 107
Net interest income 512 483 460 466 451
Provision for loan losses (30) 2 1 (21) -
Net interest income after
provision for loan losses 542 481 459 487 451
NONINTEREST INCOME
Service charges on deposit accounts 55 54 54 53 57
Fiduciary income 44 43 46 43 43
Commercial lending fees 16 16 12 14 14
Letter of credit fees 18 18 20 17 17
Foreign exchange income 9 9 9 9 9
Brokerage fees 10 9 8 9 9
Investment advisory revenue, net 14 12 10 9 8
Card fees 10 9 9 9 8
Bank-owned life insurance 9 10 9 6 10
Equity in earnings of unconsolidated
subsidiaries 4 4 5 1 3
Warrant income 2 3 2 1 1
Net securities losses - - - - (6)
Net gain on sales of businesses 1 - - - -
Other noninterest income 40 32 26 32 33
Total noninterest income 232 219 210 203 206
NONINTEREST EXPENSES
Salaries 209 197 189 193 185
Employee benefits 46 44 47 40 40
Total salaries and employee
benefits 255 241 236 233 225
Net occupancy expense 30 28 32 32 32
Equipment expense 14 14 14 15 14
Outside processing fee expense 19 20 17 17 16
Software expense 12 11 12 12 11
Customer services 29 10 11 6 8
Litigation and operational losses 4 7 3 (3) 16
Other noninterest expenses 59 52 49 68 50
Total noninterest expenses 422 383 374 380 372
Income before income taxes 352 317 295 310 285
Provision for income taxes 114 100 96 103 89
NET INCOME $238 $217 $199 $207 $196
Basic net income per common share $1.43 $1.29 $1.18 $1.22 $1.15
Diluted net income per common share 1.41 1.28 1.16 1.21 1.13
Cash dividends declared on common
stock 92 92 93 88 88
Dividends per common share 0.55 0.55 0.55 0.52 0.52
Third Quarter 2005 Compared To:
Second Quarter Third Quarter
2005 2004
(in millions, except per share data) Amount Percent Amount Percent
INTEREST INCOME
Interest and fees on loans $58 9.6% $160 31.2%
Interest on investment securities 4 10.5 2 6.8
Interest on short-term investments 2 16.6 (1) (22.5)
Total interest income 64 9.7 161 28.8
INTEREST EXPENSE
Interest on deposits 25 20.3 68 85.2
Interest on short-term borrowings 7 77.2 15 N/M
Interest on medium- and long-term
debt 3 8.0 17 62.2
Total interest expense 35 20.3 100 92.7
Net interest income 29 5.9 61 13.6
Provision for loan losses (32) N/M (30) N/M
Net interest income after
provision for loan losses 61 12.6 91 20.2
NONINTEREST INCOME
Service charges on deposit accounts 1 4.5 (2) (1.3)
Fiduciary income 1 1.4 1 3.8
Commercial lending fees - (3.3) 2 6.2
Letter of credit fees - (0.6) 1 4.5
Foreign exchange income - (3.9) - 14.7
Brokerage fees 1 10.4 1 12.7
Investment advisory revenue, net 2 22.7 6 64.7
Card fees 1 4.5 2 24.9
Bank-owned life insurance (1) (11.5) (1) (9.1)
Equity in earnings of unconsolidated
subsidiaries - 19.0 1 64.9
Warrant income (1) (49.1) 1 6.3
Net securities losses - N/M 6 N/M
Net gain on sales of businesses 1 N/M 1 N/M
Other noninterest income 8 26.4 7 20.4
Total noninterest income 13 6.2 26 12.8
NONINTEREST EXPENSES
Salaries 12 5.6 24 12.7
Employee benefits 2 3.6 6 15.9
Total salaries and employee
benefits 14 5.3 30 13.2
Net occupancy expense 2 5.6 (2) (5.7)
Equipment expense - - - 0.5
Outside processing fee expense (1) (1.4) 3 18.7
Software expense 1 3.5 1 8.9
Customer services 19 193.1 21 249.0
Litigation and operational losses (3) (51.6) (12) (79.4)
Other noninterest expenses 7 16.4 9 20.7
Total noninterest expenses 39 10.1 50 13.5
Income before income taxes 35 11.3 67 23.7
Provision for income taxes 14 14.5 25 28.5
NET INCOME $21 9.8% $42 21.5%
Basic net income per common share $0.14 10.9% $0.28 24.3%
Diluted net income per common share 0.13 10.2 0.28 24.8
Cash dividends declared on common
stock - 0.5 4 4.1
Dividends per common share - - 0.03 5.8
N/M - Not meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
Comerica Incorporated and Subsidiaries
2005 2004
(in millions) 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
Balance at beginning of period $609 $636 $673 $729 $762
Loans charged-off:
Commercial 20 29 28 39 41
Real estate construction:
Real estate construction
business line 1 - - - 1
Other - - - - -
Total real estate
construction 1 - - - 1
Commercial mortgage:
Commercial real estate
business line - 2 2 4 -
Other 4 5 3 - 7
Total commercial mortgage 4 7 5 4 7
Residential mortgage - - - - 1
Consumer 6 3 3 5 2
Lease financing 13 3 3 4 -
International 3 1 7 3 1
Total loans charged-off 47 43 46 55 53
Recoveries on loans previously
charged-off:
Commercial 23 12 7 14 13
Real estate construction - - - - -
Commercial mortgage 1 1 - 1 1
Residential mortgage - - - - -
Consumer 2 - 1 - 1
Lease financing - - - - -
International - 1 - 5 5
Total recoveries 26 14 8 20 20
Net loans charged-off 21 29 38 35 33
Provision for loan losses (30) 2 1 (21) -
Balance at end of period $558 $609 $636 $673 $729
Allowance for loan losses as a
percentage of total loans 1.33% 1.41% 1.52% 1.65% 1.83%
Net loans charged-off as a
percentage of average total loans 0.18 0.27 0.36 0.34 0.33
Allowance for credit losses on
lending-related commitments* $14 $15 $18 $21 $24
* Included in "Accrued expenses and other liabilities" on the consolidated balance sheets.
NONPERFORMING ASSETS
Comerica Incorporated and Subsidiaries
2005 2004
(in millions) 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
SUMMARY OF NONPERFORMING
ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Commercial $81 $125 $161 $161 $181
Real estate construction:
Real estate
construction business
line 4 8 18 31 28
Other - 2 2 3 3
Total real estate
construction 4 10 20 34 31
Commercial mortgage:
Commercial real estate
business line 9 9 11 6 10
Other 35 32 38 58 70
Total commercial
mortgage 44 41 49 64 80
Residential mortgage 1 2 2 1 1
Consumer 1 2 1 1 2
Lease financing 39 9 12 15 19
International 16 23 24 36 47
Total nonaccrual
loans 186 212 269 312 361
Reduced-rate loans - - - - -
Total
nonperforming
loans 186 212 269 312 361
Other real estate 34 34 42 27 27
Nonaccrual debt securities - - - - -
Total
nonperforming
assets $220 $246 $311 $339 $388
Nonperforming loans as a
percentage of total loans 0.44% 0.49% 0.64% 0.76% 0.91%
Nonperforming assets as a
percentage of total loans,
other real estate and
nonaccrual debt
securities 0.52 0.57 0.75 0.83 0.98
Allowance for loan losses
as a percentage of total
nonperforming assets 253 248 204 198 188
Loans past due 90 days or more
and still accruing $14 $24 $23 $15 $20
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning
of period $212 $269 $312 $361 $404
Loans transferred to
nonaccrual (1) 81 47 66 71 106
Nonaccrual business loan
gross charge-offs (2) (40) (38) (42) (49) (48)
Loans transferred to
accrual status (1) - - (4) (7) -
Nonaccrual business loans
sold (3) (19) - (14) (33) (16)
Payments/Other (4) (48) (66) (49) (31) (85)
Nonaccrual loans at end of
period $186 $212 $269 $312 $361
(1) Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(2) Analysis of gross loan charge-offs:
Nonaccrual business
loans $40 $38 $42 $49 $48
Performing watch list
loans 1 2 1 1 2
Consumer loans and
residential mortgage
loans 6 3 3 5 3
Total gross loan charge-
offs $47 $43 $46 $55 $53
(3) Analysis of loans sold:
Nonaccrual business
loans $19 $- $14 $33 $16
Performing watch list
loans sold 34 7 4 7 30
Total loans sold $53 $7 $18 $40 $46
(4) Net change related to nonaccrual loans with balances less than $2 million, other than business loan gross charge-offs and nonaccrual loans sold, are included in Payments/Other.
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Three Months Ended
September 30, 2005
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans $25,230 $378 5.95%
Real estate construction loans 3,202 60 7.40
Commercial mortgage loans 8,631 138 6.37
Residential mortgage loans 1,418 20 5.76
Consumer loans 2,703 41 6.04
Lease financing 1,300 10 2.98
International loans 2,098 33 6.27
Business loan swap income - (5) -
Total loans 44,582 675 6.01
Investment securities available-for-
sale (1) 3,935 38 3.80
Short-term investments 549 7 4.76
Total earning assets 49,066 720 5.82
Cash and due from banks 1,788
Allowance for loan losses (601)
Accrued income and other assets 3,209
Total assets $53,462
Money market and NOW deposits $16,987 89 2.09
Savings deposits 1,531 2 0.52
Certificates of deposit 5,912 44 2.92
Foreign office time deposits 1,110 12 4.21
Total interest-bearing
deposits 25,540 147 2.28
Short-term borrowings 1,804 16 3.52
Medium- and long-term debt 4,144 44 4.26
Total interest-bearing sources 31,488 207 2.61
-
Noninterest-bearing deposits 15,734
Accrued expenses and other
liabilities 1,124
Common shareholders' equity 5,116
Total liabilities and
shareholders' equity $53,462
Net interest income/rate spread (FTE) $513 3.21
FTE adjustment $1
Impact of net noninterest-bearing
sources of funds 0.94
Net interest margin (as a percentage
of average earning assets) (FTE) 4.15%
Three Months Ended
June 30, 2005
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans $24,122 $329 5.46%
Real estate construction loans 3,101 54 6.99
Commercial mortgage loans 8,513 129 6.06
Residential mortgage loans 1,357 20 5.75
Consumer loans 2,673 38 5.75
Lease financing 1,283 13 4.08
International loans 2,185 31 5.77
Business loan swap income - 3 -
Total loans 43,234 617 5.72
Investment securities available-for-
sale (1) 3,681 34 3.67
Short-term investments 497 5 4.54
Total earning assets 47,412 656 5.54
Cash and due from banks 1,697
Allowance for loan losses (645)
Accrued income and other assets 3,171
Total assets $51,635
Money market and NOW deposits $17,190 77 1.80
Savings deposits 1,568 1 0.42
Certificates of deposit 5,509 36 2.57
Foreign office time deposits 738 8 4.23
Total interest-bearing
deposits 25,005 122 1.96
Short-term borrowings 1,182 9 3.06
Medium- and long-term debt 4,314 41 3.83
Total interest-bearing sources 30,501 172 2.26
Noninterest-bearing deposits 14,995
Accrued expenses and other
liabilities 1,039
Common shareholders' equity 5,100
Total liabilities and
shareholders' equity $51,635
Net interest income/rate spread (FTE) $484 3.28
FTE adjustment $1
Impact of net noninterest-bearing
sources of funds 0.81
Net interest margin (as a percentage
of average earning assets) (FTE) 4.09%
Three Months Ended
September 30, 2004
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans $22,096 $234 4.21%
Real estate construction loans 3,273 46 5.58
Commercial mortgage loans 7,951 104 5.22
Residential mortgage loans 1,239 18 5.63
Consumer loans 2,671 31 4.68
Lease financing 1,266 11 3.46
International loans 2,149 26 4.87
Business loan swap income - 45 -
Total loans 40,645 515 5.04
Investment securities available-for-
sale (1) 4,225 36 3.31
Short-term investments 1,556 8 2.17
Total earning assets 46,426 559 4.78
Cash and due from banks 1,652
Allowance for loan losses (774)
Accrued income and other assets 3,044
Total assets $50,348
Money market and NOW deposits $17,526 47 1.06
Savings deposits 1,652 1 0.36
Certificates of deposit 5,826 26 1.79
Foreign office time deposits 718 5 2.76
Total interest-bearing
deposits 25,722 79 1.22
Short-term borrowings 251 1 1.36
Medium- and long-term debt 4,462 27 2.45
Total interest-bearing sources 30,435 107 1.40
Noninterest-bearing deposits 14,012
Accrued expenses and other
liabilities 911
Common shareholders' equity 4,990
Total liabilities and
shareholders' equity $50,348
Net interest income/rate spread (FTE) $452 3.38
FTE adjustment $1
Impact of net noninterest-bearing
sources of funds 0.48
Net interest margin (as a percentage
of average earning assets) (FTE) 3.86%
(1) The average rate for investment securities available-for-sale was computed using average historical cost.
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Nine Months Ended
September 30, 2005
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans $24,207 $993 5.48%
Real estate construction loans 3,119 163 6.97
Commercial mortgage loans 8,488 385 6.07
Residential mortgage loans 1,362 58 5.70
Consumer loans 2,703 115 5.70
Lease financing 1,281 36 3.72
International loans 2,173 95 5.82
Business loan swap income - 14 -
Total loans 43,333 1,859 5.73
Investment securities available-for-sale (1) 3,802 107 3.69
Short-term investments 581 18 4.18
Total earning assets 47,716 1,984 5.55
Cash and due from banks 1,709
Allowance for loan losses (644)
Accrued income and other assets 3,178
Total assets $51,959
Money market and NOW deposits $17,326 235 1.81
Savings deposits 1,560 6 0.45
Certificates of deposit 5,661 110 2.60
Foreign office time deposits 855 26 4.08
Total interest-bearing deposits 25,402 377 1.98
Short-term borrowings 1,148 28 3.26
Medium- and long-term debt 4,244 121 3.82
Total interest-bearing sources 30,794 526 2.28
Noninterest-bearing deposits 14,955
Accrued expenses and other liabilities 1,114
Common shareholders' equity 5,096
Total liabilities and shareholders'
equity $51,959
Net interest income/rate spread (FTE) $1,458 3.27
FTE adjustment $3
Impact of net noninterest-bearing
sources of funds 0.81
Net interest margin (as a percentage
of average earning assets) (FTE) 4.08%
Nine Months Ended
September 30, 2004
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans $21,997 $669 4.06%
Real estate construction loans 3,293 129 5.24
Commercial mortgage loans 7,989 304 5.08
Residential mortgage loans 1,225 52 5.71
Consumer loans 2,650 92 4.62
Lease financing 1,276 39 4.05
International loans 2,171 73 4.46
Business loan swap income - 154 -
Total loans 40,601 1,512 4.97
Investment securities available-for-sale (1) 4,411 111 3.32
Short-term investments 1,948 25 1.73
Total earning assets 46,960 1,648 4.68
Cash and due from banks 1,681
Allowance for loan losses (805)
Accrued income and other assets 3,055
Total assets $50,891
Money market and NOW deposits $17,772 131 0.99
Savings deposits 1,636 5 0.38
Certificates of deposit 6,110 76 1.66
Foreign office time deposits 655 12 2.47
Total interest-bearing deposits 26,173 224 1.14
Short-term borrowings 275 2 1.05
Medium- and long-term debt 4,607 76 2.22
Total interest-bearing sources 31,055 302 1.30
Noninterest-bearing deposits 13,910
Accrued expenses and other liabilities 897
Common shareholders' equity 5,029
Total liabilities and shareholders'
equity $50,891
Net interest income/rate spread (FTE) $1,346 3.38
FTE adjustment $2
Impact of net noninterest-bearing
sources of funds 0.44
Net interest margin (as a percentage
of average earning assets) (FTE) 3.82%
(1) The average rate for investment securities available-for-sale was computed using average historical cost.
CONSOLIDATED STATISTICAL DATA
Comerica Incorporated and Subsidiaries
September 30, June 30, March 31,
(in millions, except per share data) 2005 2005 2005
Commercial loans:
Floor plan $2,065 $2,766 $2,668
Other 20,689 20,924 20,112
Total commercial loans 22,754 23,690 22,780
Real estate construction loans:
Real estate construction
business line 2,674 2,587 2,451
Other 615 581 584
Total real estate construction
loans 3,289 3,168 3,035
Commercial mortgage loans:
Commercial real estate business
line 1,440 1,465 1,555
Other 7,260 7,071 6,860
Total commercial mortgage loans 8,700 8,536 8,415
Residential mortgage loans 1,444 1,394 1,335
Consumer loans:
Home equity 1,818 1,867 1,797
Other consumer 878 834 903
Total consumer loans 2,696 2,701 2,700
Lease financing 1,286 1,296 1,262
International loans 1,972 2,239 2,209
Total loans $42,141 $43,024 $41,736
Goodwill $247 $247 $247
Other intangible assets 1 1 1
Loan servicing rights 19 19 19
Deferred mutual fund distribution
costs 7 7 7
Amortization of intangibles (quarterly) - - -
Tier 1 common capital ratio* 8.00% 7.88% 8.04%
Tier 1 risk-based capital ratio* 8.62 8.49 8.66
Total risk-based capital ratio* 11.99 12.08 12.49
Leverage ratio* 10.10 10.36 10.50
Book value per share $30.81 $30.60 $29.81
Market value per share for the
quarter:
High $63.38 $59.29 $61.40
Low 56.80 53.17 53.70
Close 58.90 57.80 55.08
Quarterly ratios:
Return on average common
shareholders' equity 18.59% 16.99% 15.73%
Return on average assets 1.78 1.68 1.57
Efficiency ratio 56.63 54.49 55.70
Number of banking offices 369 363 375
Number of employees - full time
equivalent 10,779 10,826 10,803
December 31, September 30,
(in millions, except per share data) 2004 2004
Commercial loans:
Floor plan $2,575 $2,270
Other 19,464 18,876
Total commercial loans 22,039 21,146
Real estate construction loans:
Real estate construction
business line 2,461 2,641
Other 592 635
Total real estate construction
loans 3,053 3,276
Commercial mortgage loans:
Commercial real estate business
line 1,556 1,498
Other 6,680 6,433
Total commercial mortgage loans 8,236 7,931
Residential mortgage loans 1,294 1,263
Consumer loans:
Home equity 1,837 1,815
Other consumer 914 907
Total consumer loans 2,751 2,722
Lease financing 1,265 1,260
International loans 2,205 2,117
Total loans $40,843 $39,715
Goodwill $247 $247
Other intangible assets 1 1
Loan servicing rights 20 20
Deferred mutual fund distribution costs 8 9
Amortization of intangibles (quarterly) - -
Tier 1 common capital ratio* 8.13% 8.16%
Tier 1 risk-based capital ratio* 8.77 8.81
Total risk-based capital ratio* 12.75 13.06
Leverage ratio* 10.37 10.28
Book value per share $29.94 $29.52
Market value per share for the
quarter:
High $63.80 $61.48
Low 57.81 53.00
Close 61.02 59.35
Quarterly ratios:
Return on average common
shareholders' equity 16.39% 15.68%
Return on average assets 1.63 1.55
Efficiency ratio 56.61 56.08
Number of banking offices 376 364
Number of employees - full time
equivalent 10,892 10,839
*September 30, 2005 ratios are estimated
PARENT COMPANY ONLY BALANCE SHEETS
Comerica Incorporated
September 30, December 31, September 30,
(in millions, except share 2005 2004 2004
data)
ASSETS
Cash and due from subsidiary bank $16 $1 $1
Short-term investments with
subsidiary bank 289 289 215
Investment in subsidiaries,
principally banks 5,597 5,585 5,611
Premises and equipment 3 3 3
Other assets 256 304 294
Total assets $6,161 $6,182 $6,124
LIABILITIES AND SHAREHOLDERS' EQUITY
Long-term debt $817 $824 $827
Other liabilities 253 253 261
Total liabilities 1,070 1,077 1,088
Common stock - $5 par value:
Authorized - 325,000,000
shares
Issued - 178,735,252
shares at 9/30/05,
12/31/04 and 9/30/04 894 894 894
Capital surplus 448 421 408
Accumulated other
comprehensive loss (158) (69) (24)
Retained earnings 4,683 4,331 4,222
Less cost of common stock in
treasury - 13,469,654
shares at 9/30/05,
8,259,328 shares at
12/31/04 and 8,169,292
shares at 9/30/04 (776) (472) (464)
Total shareholders'
equity 5,091 5,105 5,036
Total liabilities and
shareholders' equity $6,161 $6,182 $6,124
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Comerica Incorporated and Subsidiaries
Accumulated
Other Total
Comprehensive Shareholders'
(in millions, except share Common Capital Income Retained Treasury
data) Stock Surplus (Loss) Earnings Stock Equity
BALANCE AT JANUARY 1, 2004 $894 $384 $74 $3,973 $(215) $5,110
Net income - - - 550 - 550
Other comprehensive loss,
net of tax - - (98) - - (98)
Total comprehensive income 452
Cash dividends declared on
common stock ($1.56 per
share) - - - (268) - (268)
Purchase of 5,977,723 shares
of common stock - - - - (336) (336)
Net issuance of common stock
under employee stock plans - (2) - (33) 87 52
Recognition of stock-based
compensation expense - 26 - - - 26
BALANCE AT
SEPTEMBER 30, 2004 $894 $408 $(24) $4,222 $(464) $5,036
BALANCE AT JANUARY 1, 2005 $894 $421 $(69) $4,331 $(472) $5,105
Net income - - - 654 - 654
Other comprehensive loss,
net of tax - - (89) - - (89)
Total comprehensive income 565
Cash dividends declared on
common stock ($1.65
per share) - - - (277) - (277)
Purchase of 6,516,700 shares
of common stock - - - - (379) (379)
Net issuance of common stock
under employee stock plans - (5) - (25) 75 45
Recognition of stock-based
compensation expense - 32 - - - 32
BALANCE AT
SEPTEMBER 30,2005 $894 $448 $(158) $4,683 $(776) $5,091
BUSINESS SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
(dollar amounts in millions) Business Bank
September 30, June 30, September 30,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $367 $350 $345
Provision for loan losses (23) 18 (5)
Noninterest income 71 71 65
Noninterest expenses 184 159 143
Provision (benefit) for income taxes
(FTE) 91 81 99
Net income (loss) $186 $163 $173
Net charge-offs $16 $21 $28
Selected average balances:
Assets $36,661 $35,435 $32,969
Loans 35,273 34,110 31,785
Deposits 20,877 20,352 19,386
Liabilities 21,678 21,151 20,086
Attributed equity 2,548 2,501 2,438
Statistical data:
Return on average assets (1) 2.03% 1.84% 2.10%
Return on average attributed equity 29.17 26.08 28.42
Net interest margin (2) 4.12 4.10 4.30
Efficiency ratio 42.08 37.89 34.88
Finance
September 30, June 30, September 30,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $(47) $(56) $(80)
Provision for loan losses - - -
Noninterest income 11 21 16
Noninterest expenses - - -
Provision (benefit) for income taxes
(FTE) (16) (17) (24)
Net income (loss) $(20) $(18) $(40)
Net charge-offs $ - $ - $ -
Selected average balances:
Assets $5,526 $5,192 $6,737
Loans (22) (22) (17)
Deposits 1,008 338 1,123
Liabilities 6,995 5,844 5,834
Attributed equity 517 519 616
Statistical data:
Return on average assets (1) N/M N/M N/M
Return on average attributed equity N/M N/M N/M
Net interest margin (2) N/M N/M N/M
Efficiency ratio N/M N/M N/M
Small Business & Personal Financial Services
(dollar amounts in millions)
September 30, June 30, September 30,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $153 $152 $149
Provision for loan losses 7 (2) 1
Noninterest income 54 53 53
Noninterest expenses 138 132 126
Provision (benefit) for income taxes
(FTE) 22 26 27
Net income (loss) $40 $49 $48
Net charge-offs $7 $5 $4
Selected average balances:
Assets $6,575 $6,446 $6,348
Loans 5,862 5,768 5,618
Deposits 16,774 16,874 16,757
Liabilities 16,774 16,871 16,751
Attributed equity 805 792 774
Statistical data:
Return on average assets (1) 0.91% 1.10% 1.09%
Return on average attributed equity 19.79 24.56 24.64
Net interest margin (2) 3.62 3.63 3.52
Efficiency ratio 66.96 64.34 62.29
Other
September 30, June 30, September 30,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $2 $1 $ -
Provision for loan losses (10) (15) 5
Noninterest income 13 (5) (3)
Noninterest expenses 11 4 29
Provision (benefit) for income taxes
(FTE) 5 1 (27)
Net income (loss) $9 $6 $(10)
Net charge-offs $ - $ - $ -
Selected average balances:
Assets $984 $940 $803
Loans 41 43 26
Deposits 65 22 1
Liabilities 344 247 212
Attributed equity 826 876 752
Statistical data:
Return on average assets (1) N/M N/M N/M
Return on average attributed equity N/M N/M N/M
Net interest margin (2) N/M N/M N/M
Efficiency ratio N/M N/M N/M
(dollar amounts in millions) Wealth & Institutional Management
September 30, June 30, September 30,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $38 $37 $38
Provision for loan losses (4) 1 (1)
Noninterest income 83 79 75
Noninterest expenses 89 88 74
Provision (benefit) for income taxes
(FTE) 13 10 15
Net income (loss) $23 $17 $25
Net charge-offs $(2) $3 $1
Selected average balances:
Assets $3,716 $3,622 $3,491
Loans 3,428 3,335 3,233
Deposits 2,550 2,414 2,467
Liabilities 2,555 2,422 2,475
Attributed equity 420 412 410
Statistical data:
Return on average assets (1) 2.45% 1.83% 2.91%
Return on average attributed equity 21.67 16.13 24.77
Net interest margin (2) 4.35 4.38 4.65
Efficiency ratio 73.61 75.74 65.64
Total
September 30, June 30, September 30,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $513 $484 $452
Provision for loan losses (30) 2 -
Noninterest income 232 219 206
Noninterest expenses 422 383 372
Provision (benefit) for income taxes
(FTE) 115 101 90
Net income (loss) $238 $217 $196
Net charge-offs $21 $29 $33
Selected average balances:
Assets $53,462 $51,635 $50,348
Loans 44,582 43,234 40,645
Deposits 41,274 40,000 39,734
Liabilities 48,346 46,535 45,358
Attributed equity 5,116 5,100 4,990
Statistical data:
Return on average assets (1) 1.78% 1.68% 1.55%
Return on average attributed equity 18.59 16.99 15.68
Net interest margin (2) 4.15 4.09 3.86
Efficiency ratio 56.63 54.49 56.08
(1) Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.
(2) Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.
N/M - Not Meaningful
MARKET SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
(dollar amounts in millions) Midwest & Other Markets
September 30, June 30, September 30,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $272 $272 $267
Provision for loan losses - 30 20
Noninterest income 154 148 139
Noninterest expenses 233 229 207
Provision (benefit) for income taxes
(FTE) 59 50 58
Net income (loss) $134 $111 $121
Net charge-offs $23 $24 $19
Selected average balances:
Assets $25,324 $25,305 $24,021
Loans 23,832 23,879 22,731
Deposits 18,857 18,918 19,067
Liabilities 19,621 19,679 19,772
Attributed equity 2,162 2,132 2,129
Statistical data:
Return on average assets (1) 2.11% 1.76% 2.01%
Return on average attributed equity 24.71 20.88 22.72
Net interest margin (2) 4.49 4.53 4.63
Efficiency ratio 54.77 54.43 50.92
Florida
September 30, June 30, September 30,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $11 $11 $10
Provision for loan losses (4) 2 -
Noninterest income 4 4 4
Noninterest expenses 8 7 6
Provision (benefit) for income taxes
(FTE) 4 2 3
Net income (loss) $7 $4 $5
Net charge-offs $1 $ - $ -
Selected average balances:
Assets $1,446 $1,455 $1,352
Loans 1,435 1,442 1,340
Deposits 318 274 235
Liabilities 316 273 232
Attributed equity 74 68 62
Statistical data:
Return on average assets (1) 2.01% 1.04% 1.41%
Return on average attributed equity 38.96 22.09 30.55
Net interest margin (2) 3.16 2.92 3.01
Efficiency ratio 51.08 47.94 44.35
(dollar amounts in millions) Western
September 30, June 30, September 30,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $214 $196 $195
Provision for loan losses (18) (5) (17)
Noninterest income 30 32 31
Noninterest expenses 122 98 88
Provision (benefit) for income taxes
(FTE) 52 50 64
Net income (loss) $88 $85 $91
Net charge-offs $(2) $5 $14
Selected average balances:
Assets $14,920 $13,616 $12,777
Loans 14,226 12,947 12,067
Deposits 17,415 16,777 15,517
Liabilities 17,458 16,821 15,521
Attributed equity 1,055 1,042 1,002
Statistical data:
Return on average assets (1) 1.88% 1.89% 2.20%
Return on average attributed equity 33.07 32.44 36.31
Net interest margin (2) 4.87 4.69 4.98
Efficiency ratio 50.17 43.02 39.03
Finance & Other Businesses
September 30, June 30, September 30,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $(45) $(55) $(80)
Provision for loan losses (10) (15) 5
Noninterest income 24 16 13
Noninterest expenses 11 4 29
Provision (benefit) for income taxes
(FTE) (11) (16) (51)
Net income (loss) $(11) $(12) $(50)
Net charge-offs $ - $ - $ -
Selected average balances:
Assets $6,510 $6,132 $7,540
Loans 19 21 9
Deposits 1,073 360 1,124
Liabilities 7,339 6,091 6,046
Attributed equity 1,343 1,395 1,368
Statistical data:
Return on average assets (1) N/M N/M N/M
Return on average attributed equity N/M N/M N/M
Net interest margin (2) N/M N/M N/M
Efficiency ratio N/M N/M N/M
(dollar amounts in millions) Texas
September 30, June 30, September 30,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $61 $60 $60
Provision for loan losses 2 (10) (8)
Noninterest income 20 19 19
Noninterest expenses 48 45 42
Provision (benefit) for income taxes
(FTE) 11 15 16
Net income (loss) $20 $29 $29
Net charge-offs $(1) $ - $ -
Selected average balances:
Assets $5,262 $5,127 $4,658
Loans 5,070 4,945 4,498
Deposits 3,611 3,671 3,791
Liabilities 3,612 3,671 3,787
Attributed equity 482 463 429
Statistical data:
Return on average assets (1) 1.54% 2.24% 2.55%
Return on average attributed equity 16.88 24.85 27.64
Net interest margin (2) 4.73 4.86 5.30
Efficiency ratio 59.79 57.28 52.67
Total
September 30, June 30, September 30,
Three Months Ended 2005 2005 2004
Earnings summary:
Net interest income (expense) (FTE) $513 $484 $452
Provision for loan losses (30) 2 -
Noninterest income 232 219 206
Noninterest expenses 422 383 372
Provision (benefit) for income taxes
(FTE) 115 101 90
Net income (loss) $238 $217 $196
Net charge-offs $21 $29 $33
Selected average balances:
Assets $53,462 $51,635 $50,348
Loans 44,582 43,234 40,645
Deposits 41,274 40,000 39,734
Liabilities 48,346 46,535 45,358
Attributed equity 5,116 5,100 4,990
Statistical data:
Return on average assets (1) 1.78% 1.68% 1.55%
Return on average attributed equity 18.59 16.99 15.68
Net interest margin (2) 4.15 4.09 3.86
Efficiency ratio 56.63 54.49 56.08
(1) Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.
(2) Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.
N/M - Not Meaningful
Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20010807/CMALOGOSOURCE: Comerica Incorporated
CONTACT: Media Contacts: Sharon R. McMurray, +1-313-222-4881, Wayne J.
Mielke, +1-313-222-4732, or Investor Contacts: Paul E. Burdiss,
+1-313-222-2840, Paul Jaremski, +1-313-222-6317, all of Comerica Incorporated
Web site: http://www.comerica.com/
