DALLAS, Oct. 20 /PRNewswire-FirstCall/ -- Comerica Incorporated (NYSE: CMA) today reported third quarter 2009 net income of $19 million, compared to $18 million for the second quarter 2009 and $28 million for the third quarter 2008. After preferred dividends of $34 million in each of the third and second quarters of 2009, the net loss applicable to common stock was $15 million, or $0.10 per diluted share, for the third quarter 2009, compared to a net loss applicable to common stock of $16 million, or $0.10 per diluted share, for the second quarter 2009 and net income applicable to common stock of $28 million, or $0.19 per diluted share, for the third quarter 2008. Third quarter 2009 included a $311 million provision for loan losses, compared to $312 million for the second quarter 2009 and $165 million for the third quarter 2008.
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(dollar amounts in millions, except per 3rd Qtr 2nd Qtr 3rd Qtr
share data) '09 '09 '08
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Net interest income $385 $402 $466
Provision for loan losses 311 312 165
Noninterest income 315 298 240
Noninterest expenses 399 429 514
Net income 19 18 28
Preferred stock dividends to U.S. Treasury 34 34 -
Net income (loss) applicable to common stock (15) (16) 28
Diluted earnings (loss) per common share (0.10) (0.10) 0.19
Tier 1 capital ratio 12.18%(a) 11.58% 7.32%
Tangible common equity ratio (b) 7.96 7.55 7.60
Net interest margin (c) 2.68 2.73 3.11
(a) September 30, 2009 ratio is estimated.
(b) See Reconciliation of Non-GAAP Financial Measures.
(c) Excess liquidity, represented by average balances deposited with the
Federal Reserve Bank, reduced the net interest margin by 16 basis
points and 8 basis points in the third and second quarters of 2009,
respectively. Excluding excess liquidity, the net interest margin
would have been 2.84% and 2.81% in each respective period. Excess
liquidity had no impact on the net interest margin in the third
quarter 2008.
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"Our third quarter results were consistent with our prior outlook and reflect the many actions we have taken to position our company for the slow economic recovery now underway," said Ralph W. Babb Jr., chairman and chief executive officer. "These actions include the strengthening of our already strong liquidity and capital levels, the quick identification of problem loans, the building of our reserves credit by credit, and the careful management of expenses. Coupled with our strong focus on customers, we believe we are well positioned for the future, with confidence in our strategy and a dedicated workforce to deliver the results.
"In the third quarter 2009, loan demand continued to be weak and average core deposits continued to increase, as businesses and consumers remained cautious in this economic environment.
"The provision for loan losses was stable in the third quarter, with charge-offs similar to the second quarter, as expected. Our credit issues remain focused on residential real estate development."
Third Quarter 2009 Compared to Second Quarter 2009
Net Interest Income and Net Interest Margin
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3rd Qtr 2nd Qtr 3rd Qtr
(dollar amounts in millions) '09 '09 '08
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Net interest income $385 $402 $466
Net interest margin (a) 2.68% 2.73% 3.11%
Selected average balances:
Total earning assets $57,513 $59,522 $59,946
Total investment securities 9,070 9,786 8,146
Total loans 44,782 47,648 51,508
Total loans, excluding FSD loans
(primarily low-rate) 44,573 47,432 51,107
Total core deposits (b), excluding
FSD 34,165 33,059 31,441
Total noninterest-bearing deposits 13,225 12,546 10,646
Total noninterest-bearing deposits,
excluding FSD 11,967 11,132 9,104
(a) Excess liquidity, represented by average balances deposited with the
Federal Reserve Bank, reduced the net interest margin by 16 basis
points and 8 basis points in the third and second quarters of 2009,
respectively. Excluding excess liquidity, the net interest margin
would have been 2.84% and 2.81% in each respective period. Excess
liquidity had no impact on the third quarter 2008 net interest margin.
(b) Core deposits exclude other time deposits and foreign office time
deposits.
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Noninterest Income
Noninterest income was $315 million for the third quarter 2009, compared to $298 million for the second quarter 2009 and $240 million for the third quarter 2008. Several fee categories increased in the third quarter 2009, including service charges on deposit accounts ($5 million), commercial lending fees ($2 million) and letter of credit fees ($2 million). Noninterest income in the third quarter 2009 included net securities gains of $107 million, primarily from gains on sales of mortgage-backed government agency securities ($102 million) and on redemptions of auction-rate securities ($5 million), compared to net securities gains of $113 million in the second quarter 2009. Noninterest income in the third quarter 2009 also reflected a $7 million gain on the repurchase of debt, while the second quarter 2009 included a $6 million gain on the sale of Comerica's proprietary defined contribution plan recordkeeping business. The second quarter 2009 also included a $16 million loss on the termination of certain leveraged leases. Selected categories of noninterest income are highlighted in the following table.
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3rd Qtr 2nd Qtr 3rd Qtr
(in millions) '09 '09 '08
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Net securities gains $107 $113 $27
Other noninterest income
Loss on termination of leveraged leases - (16) -
Net gain (loss) from principal investing and
warrants (1) (4) 1
Deferred compensation asset returns (a) 4 8 (6)
Gain on repurchase of debt 7 - -
Net gain on sale of business - 6 -
(a) Compensation deferred by Comerica officers is invested in stocks and
bonds to reflect the investment selections of the officers. Income
(loss) earned on these assets is reported in noninterest income and
the offsetting increase (decrease) in the liability is reported in
salaries expense.
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Noninterest Expenses
Noninterest expenses were $399 million for the third quarter 2009, compared to $429 million for the second quarter 2009 and $514 million for the third quarter 2008. The $30 million decrease in noninterest expenses in the third quarter 2009, compared to the second quarter 2009, was primarily due to the second quarter 2009 industry-wide FDIC special assessment charge ($29 million). Full-time equivalent staff decreased by approximately 100 employees from June 30, 2009 and 1,000 employees, or 9 percent, from September 30, 2008. Certain categories of noninterest expenses are highlighted in the table below.
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3rd Qtr 2nd Qtr 3rd Qtr
'09 '09 '08
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Salaries
Regular salaries $142 $142 $155
Severance - (1) 2
Incentives (including commissions) 17 15 31
Deferred compensation plan costs 5 8 (6)
Share-based compensation 7 7 10
---- ---- ----
Total salaries 171 171 192
Employee benefits
Pension expense 14 14 5
Other benefits 37 39 41
---- ---- ----
Total employee benefits 51 53 46
FDIC insurance expense 15 45 5
Litigation and operational losses 3 3 105(a)
Provision for credit losses on
lending-related commitments 2 (4) 9
Other noninterest expenses
Other real estate expense 10 10 3
(a) Third quarter 2008 litigation and operational losses included a
$96 million charge related to an offer to repurchase auction-rate
securities from customers.
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Credit Quality
"We are working hard to ensure we effectively manage credit, particularly in this economic environment," Babb said. "Early recognition of issues continues to be key. We have moved credits to our workout area at the first signs of significant stress. Over the past 15 months, we have reduced, by 46 percent, our exposure to residential real estate development, the main focus of our credit issues. As a result, we expect to see a modest reduction in net charge-offs in the fourth quarter."
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3rd Qtr 2nd Qtr 3rd Qtr
(dollar amounts in millions) '09 '09 '08
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Net loan charge-offs $239 $248 $116
Net lending-related commitment charge-offs - - -
----- ----- -----
Total net credit-related charge-offs 239 248 116
Net loan charge-offs/Average total loans 2.14% 2.08% 0.90%
Net credit-related charge-offs/Average
total loans 2.14 2.08 0.90
Provision for loan losses $311 $312 $165
Provision for credit losses on lending-related
commitments 2 (4) 9
----- ----- -----
Total provision for credit losses 313 308 174
Nonperforming loans 1,196 1,130 863
Nonperforming assets (NPAs) 1,305 1,230 881
NPAs/Total loans and foreclosed property 2.99% 2.64% 1.71%
Loans past due 90 days or more and still
accruing $161 $210 $97
Allowance for loan losses 953 880 712
Allowance for credit losses on
lending-related commitments (a) 35 33 40
----- ----- -----
Total allowance for credit losses 988 913 752
Allowance for loan losses/Total loans 2.19% 1.89% 1.38%
Allowance for loan losses/Nonperforming
loans 80 78 82
(a) Included in "Accrued expenses and other liabilities" on the
consolidated balance sheets.
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Balance Sheet and Capital Management
Total assets and common shareholders' equity were $59.6 billion and $4.9 billion, respectively, at September 30, 2009, compared to $63.6 billion and $5.0 billion, respectively, at June 30, 2009. There were approximately 151 million common shares outstanding at September 30, 2009.
Comerica's tangible common equity ratio was 7.96 percent at September 30, 2009. The third quarter 2009 estimated Tier 1 common, Tier 1 and total risk-based capital ratios were 8.02 percent, 12.18 percent and 16.75 percent, respectively.
2009 Outlook
Business Segments
Comerica's continuing operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank, 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 methodologies in effect at September 30, 2009 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2009 results compared to second quarter 2009.
The following table presents net income (loss) by business segment.
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(dollar amounts in millions) 3rd Qtr '09 2nd Qtr '09 3rd Qtr '08
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Business Bank $22 N/M% $5 N/M% $65 N/M%
Retail Bank (11) (54) (18) N/M 21 57
Wealth & Institutional
Management 10 48 15 N/M (51) N/M
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21 100% 2 100% 35 100%
Finance (7) 8 (2)
Other (a) 5 8 (5)
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Total $19 $18 $28
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N/M - Not Meaningful.
(a) Includes discontinued operations and items not directly associated
with the three major business segments or the Finance Division.
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Business Bank
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(dollar amounts in millions) 3rd Qtr '09 2nd Qtr '09 3rd Qtr '08
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Net interest income (FTE) $346 $328 $323
Provision for loan losses 252 252 135
Noninterest income 72 50 75
Noninterest expenses 160 157 175
Net income 22 5 65
Net credit-related charge-offs 195 211 95
Selected average balances:
Assets 34,822 37,521 41,357
Loans 34,116 36,760 40,506
FSD loans 209 216 401
Deposits 15,735 14,827 14,933
FSD deposits 1,642 1,866 2,449
Net interest margin 4.01% 3.58% 3.18%
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Retail Bank
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(dollar amounts in millions) 3rd Qtr '09 2nd Qtr '09 3rd Qtr '08
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Net interest income (FTE) $127 $128 $142
Provision for loan losses 42 42 33
Noninterest income 50 46 80
Noninterest expenses 154 167 161
Net income (loss) (11) (18) 21
Net credit-related charge-offs 34 29 17
Selected average balances:
Assets 6,445 6,693 7,046
Loans 5,904 6,115 6,362
Deposits 17,563 17,666 16,596
Net interest margin 2.87% 2.90% 3.41%
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Wealth and Institutional Management
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(dollar amounts in millions) 3rd Qtr '09 2nd Qtr '09 3rd Qtr '08
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Net interest income (FTE) $42 $40 $37
Provision for loan losses 20 13 7
Noninterest income 66 73 71
Noninterest expenses 73 77 180
Net income (loss) 10 15 (51)
Net credit-related charge-offs 10 8 4
Selected average balances:
Assets 4,856 4,965 4,759
Loans 4,760 4,776 4,624
Deposits 2,735 2,599 2,351
Net interest margin 3.48% 3.29% 3.18%
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Geographic Market Segments
Comerica also provides market segment results for four primary geographic markets: Midwest, Western, Texas and Florida. In addition to the four primary geographic markets, Other Markets and International are also reported as market segments. The financial results below are based on methodologies in effect at September 30, 2009 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2009 results compared to second quarter 2009.
The following table presents net income (loss) by market segment.
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(dollar amounts in millions) 3rd Qtr '09 2nd Qtr '09 3rd Qtr '08
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Midwest $(6) (34)% $- N/M% $51 N/M%
Western (7) (35) (7) N/M 9 25
Texas 7 36 5 N/M 13 36
Florida (12) (59) (8) N/M (1) (3)
Other Markets 29 N/M 6 N/M (44) N/M
International 10 46 6 N/M 7 21
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21 100% 2 100% 35 100%
Finance & Other Businesses (a) (2) 16 (7)
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Total $19 $18 $28
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N/M - Not Meaningful.
(a) Includes discontinued operations and items not directly associated
with the geographic markets.
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Midwest
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(dollar amounts in millions) 3rd Qtr '09 2nd Qtr '09 3rd Qtr '08
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Net interest income (FTE) $209 $200 $197
Provision for loan losses 144 119 52
Noninterest income 107 92 142
Noninterest expenses 188 186 205
Net income (loss) (6) - 51
Net credit-related charge-offs 102 99 44
Selected average balances:
Assets 16,987 18,122 19,752
Loans 16,387 17,427 19,070
Deposits 17,395 17,166 15,857
Net interest margin 4.72% 4.56% 4.09%
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Western Market
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(dollar amounts in millions) 3rd Qtr '09 2nd Qtr '09 3rd Qtr '08
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Net interest income (FTE) $159 $154 $169
Provision for loan losses 101 90 82
Noninterest income 33 32 38
Noninterest expenses 106 113 112
Net income (loss) (7) (7) 9
Net credit-related charge-offs 95 70 51
Selected average balances:
Assets 14,114 14,901 16,633
Loans 13,923 14,684 16,387
FSD loans 209 216 401
Deposits 11,146 10,717 11,730
FSD deposits 1,469 1,678 2,255
Net interest margin 4.53% 4.20% 4.10%
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Texas Market
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(dollar amounts in millions) 3rd Qtr '09 2nd Qtr '09 3rd Qtr '08
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Net interest income (FTE) $77 $73 $73
Provision for loan losses 29 28 18
Noninterest income 22 21 27
Noninterest expenses 58 60 61
Net income 7 5 13
Total net credit-related charge-offs 22 11 9
Selected average balances:
Assets 7,444 7,798 7,945
Loans 7,221 7,547 7,691
Deposits 4,609 4,496 3,956
Net interest margin 4.22% 3.88% 3.76%
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Florida Market
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(dollar amounts in millions) 3rd Qtr '09 2nd Qtr '09 3rd Qtr '08
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Net interest income (FTE) $11 $11 $12
Provision for loan losses 24 20 7
Noninterest income 3 3 4
Noninterest expenses 10 9 10
Net loss (12) (8) (1)
Net credit-related charge-offs 9 23 3
Selected average balances:
Assets 1,673 1,820 1,900
Loans 1,674 1,820 1,900
Deposits 327 331 262
Net interest margin 2.70% 2.44% 2.54%
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Conference Call and Webcast
Comerica will host a conference call to review third quarter 2009 financial results at 7 a.m. CT Tuesday, October 20, 2009. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 31081979). The call and supplemental financial information can also be accessed on the Internet at www.comerica.com. A replay will be available approximately two hours following the conference call through October 31, 2009. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 31081979). A replay of the Webcast can also 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 & Institutional 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, China 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 the reconcilement 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," "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 further economic downturns, changes in the pace of an economic recovery and related changes in employment levels, changes in real estate values, fuel prices, energy costs or other events that could affect customer income levels or general economic conditions, changes related to the headquarters relocation or to its underlying assumptions, the effects of recently enacted legislation, such as the Emergency Economic Stabilization Act of 2008 and the American Recovery and Reinvestment Act of 2009, and actions taken by the U.S. Department of Treasury, the Board of Governors of the Federal Reserve System, the Texas Department of Banking and the Federal Deposit Insurance Corporation, 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, fires, droughts and floods, the disruption of private or public utilities, the implementation of Comerica's strategies and business models, management's ability to maintain and expand customer relationships, changes in customer borrowing, repayment, investment and deposit practices, 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 production industry and the real estate business lines, the anticipated performance of any new banking centers, 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, political or industry conditions and related credit and market conditions, the interdependence of financial service companies and adverse conditions in the stock market. 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. 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
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Three Months Ended
---------------------------------
September June 30, September
(in millions, except per share data) 30, 2009 2009 30, 2008
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PER COMMON SHARE AND COMMON STOCK DATA
Diluted net income (loss) $(0.10) $(0.10) $0.19
Cash dividends declared 0.05 0.05 0.66
Common shareholders' equity (at
period end) 31.90 32.70 33.89
Average diluted shares (in thousands) 151,478 151,490 150,795
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KEY RATIOS
Return on average common
shareholders' equity (1.27)% (1.25)% 2.25%
Return on average assets 0.12 0.11 0.18
Tier 1 common capital ratio (a) (b) 8.02 7.66 6.67
Tier 1 risk-based capital ratio (b) 12.18 11.58 7.32
Total risk-based capital ratio (b) 16.75 15.97 11.19
Leverage ratio (b) 12.45 12.11 8.57
Tangible common equity ratio (a) 7.96 7.55 7.60
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AVERAGE BALANCES
Commercial loans $23,401 $25,657 $28,521
Real estate construction loans 4,033 4,325 4,675
Commercial mortgage loans 10,359 10,476 10,511
Residential mortgage loans 1,720 1,795 1,870
Consumer loans 2,550 2,572 2,599
Lease financing 1,218 1,227 1,365
International loans 1,501 1,596 1,967
------- ------- -------
Total loans 44,782 47,648 51,508
Earning assets 57,513 59,522 59,946
Total assets 61,948 64,256 64,863
Noninterest-bearing deposits 13,225 12,546 10,646
Interest-bearing core deposits 22,582 22,379 23,244
Total core deposits 35,807 34,925 33,890
Common shareholders' equity 4,923 5,016 5,075
Total shareholders' equity 7,065 7,153 5,075
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NET INTEREST INCOME
Net interest income (fully taxable
equivalent basis) (c) $387 $404 $467
Fully taxable equivalent adjustment 2 2 1
Net interest margin (c) (d) 2.68% 2.73% 3.11%
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CREDIT QUALITY
Nonaccrual loans $1,194 $1,130 $863
Reduced-rate loans 2 - -
------- ------- -------
Total nonperforming loans 1,196 1,130 863
Foreclosed property 109 100 18
------- ------- -------
Total nonperforming assets 1,305 1,230 881
Loans past due 90 days or more and
still accruing 161 210 97
Gross loan charge-offs 245 257 122
Loan recoveries 6 9 6
------- ------- -------
Net loan charge-offs 239 248 116
Lending-related commitment charge-offs - - -
------- ------- -------
Total net credit-related charge-offs 239 248 116
Allowance for loan losses 953 880 712
Allowance for credit losses on lending-
related commitments 35 33 40
------- ------- -------
Total allowance for credit losses 988 913 752
Allowance for loan losses as a
percentage of total loans 2.19% 1.89% 1.38%
Net loan charge-offs as a percentage of
average total loans 2.14 2.08 0.90
Net credit-related charge-offs as a
percentage of average total loans 2.14 2.08 0.90
Nonperforming assets as a percentage of
total loans and foreclosed property 2.99 2.64 1.71
Allowance for loan losses as a
percentage of total nonperforming
loans 80 78 82
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(a) See Reconciliation of Non-GAAP Financial Measures.
(b) September 30, 2009 ratios are estimated
(c) Third quarter 2008 and year-to-date 2008 net interest income declined
$8 million and $38 million, respectively, due to tax-related non-cash
lease income charges. Excluding these charges, the net interest margin
would have been 3.17% and 3.16% for the three- and nine-month periods
ended September 30, 2008.
(d) Excess liquidity, represented by average balances deposited with the
Federal Reserve Bank, reduced the net interest margin by 16 basis
points, 8 basis points and 11 basis points in the third quarter 2009,
second quarter 2009 and year-to-date 2009, respectively. Excluding
excess liquidity, the net interest margin would have been 2.84%, 2.81%
and 2.76% in each respective period. Excess liquidity had no impact
on the net interest margin in third quarter 2008 or year-to-date 2008.
Nine Months Ended
------------------
September 30,
(in millions, except per share data) 2009 2008
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PER COMMON SHARE AND COMMON STOCK DATA
Diluted net income (loss) $(0.36) $1.28
Cash dividends declared 0.15 1.98
Common shareholders' equity (at period end)
Average diluted shares (in thousands) 151,441 150,783
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KEY RATIOS
Return on average common shareholders' equity (1.48)% 5.00%
Return on average assets 0.09 0.40
Tier 1 common capital ratio (a) (b)
Tier 1 risk-based capital ratio (b)
Total risk-based capital ratio (b)
Leverage ratio (b)
Tangible common equity ratio (a)
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AVERAGE BALANCES
Commercial loans $25,399 $28,992
Real estate construction loans 4,287 4,776
Commercial mortgage loans 10,422 10,343
Residential mortgage loans 1,787 1,898
Consumer loans 2,565 2,532
Lease financing 1,248 1,354
International loans 1,603 2,013
------- -------
Total loans 47,311 51,908
Earning assets 59,580 60,183
Total assets 64,296 64,917
Noninterest-bearing deposits 12,385 10,638
Interest-bearing core deposits 22,476 24,148
Total core deposits 34,861 34,786
Common shareholders' equity 4,987 5,153
Total shareholders' equity 7,124 5,153
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NET INTEREST INCOME
Net interest income (fully taxable
equivalent basis) (c) $1,177 $1,387
Fully taxable equivalent adjustment 6 3
Net interest margin (c) (d) 2.65% 3.08%
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CREDIT QUALITY
Nonaccrual loans
Reduced-rate loans
Total nonperforming loans
Foreclosed property
Total nonperforming assets
Loans past due 90 days or more and still accruing
Gross loan charge-offs $663 $356
Loan recoveries 19 18
------- -------
Net loan charge-offs 644 338
Lending-related commitment charge-offs - 1
------- -------
Total net credit-related charge-offs 644 339
Allowance for loan losses
Allowance for credit losses on lending-
related commitments
Total allowance for credit losses
Allowance for loan losses as a percentage
of total loans
Net loan charge-offs as a percentage of
average total loans 1.82% 0.87%
Net credit-related charge-offs as a percentage of
average total loans 1.82 0.87
Nonperforming assets as a percentage of total loans and
foreclosed property
Allowance for loan losses as a percentage of total
nonperforming loans
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(a) See Reconciliation of Non-GAAP Financial Measures.
(b) September 30, 2009 ratios are estimated
(c) Third quarter 2008 and year-to-date 2008 net interest income declined
$8 million and $38 million, respectively, due to tax-related non-cash
lease income charges. Excluding these charges, the net interest margin
would have been 3.17% and 3.16% for the three- and nine-month periods
ended September 30, 2008.
(d) Excess liquidity, represented by average balances deposited with the
Federal Reserve Bank, reduced the net interest margin by 16 basis
points, 8 basis points and 11 basis points in the third quarter 2009,
second quarter 2009 and year-to-date 2009, respectively. Excluding
excess liquidity, the net interest margin would have been 2.84%, 2.81%
and 2.76% in each respective period. Excess liquidity had no impact
on the net interest margin in third quarter 2008 or year-to-date 2008.
CONSOLIDATED BALANCE SHEETS (unaudited)
Comerica Incorporated and Subsidiaries
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September June December September
(in millions, except share 30, 30, 31, 30,
data) 2009 2009 2008 2008
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ASSETS
Cash and due from banks $799 $948 $913 $1,404
Federal funds sold and
securities purchased under
agreements to resell - 650 202 3
Interest-bearing deposits
with banks 2,219 3,542 2,308 25
Other short-term investments 142 129 158 222
Investment securities
available-for-sale 8,882 7,757 9,201 8,158
-
Commercial loans 22,546 24,922 27,999 28,604
Real estate construction
loans 3,870 4,152 4,477 4,565
Commercial mortgage loans 10,380 10,400 10,489 10,588
Residential mortgage loans 1,679 1,759 1,852 1,863
Consumer loans 2,544 2,562 2,592 2,644
Lease financing 1,197 1,234 1,343 1,360
International loans 1,355 1,523 1,753 1,931
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Total loans 43,571 46,552 50,505 51,555
Less allowance for loan losses (953) (880) (770) (712)
--------------------------------------------------------------------------
Net loans 42,618 45,672 49,735 50,843
Premises and equipment 657 667 683 668
Customers' liability on
acceptances outstanding 12 7 14 21
Accrued income and other
assets 4,261 4,258 4,334 3,809
--------------------------------------------------------------------------
Total assets $59,590 $63,630 $67,548 $65,153
==========================================================================
LIABILITIES AND SHAREHOLDERS'
EQUITY
Noninterest-bearing deposits $13,888 $13,558 $11,701 $12,094
-
Money market and NOW deposits 13,556 12,352 12,437 13,553
Savings deposits 1,331 1,348 1,247 1,279
Customer certificates of
deposit 7,466 8,524 8,807 8,147
Other time deposits 2,801 4,593 7,293 3,670
Foreign office time deposits 572 616 470 802
--------------------------------------------------------------------------
Total interest-bearing
deposits 25,726 27,433 30,254 27,451
--------------------------------------------------------------------------
Total deposits 39,614 40,991 41,955 39,545
Short-term borrowings 425 490 1,749 3,625
Acceptances outstanding 12 7 14 21
Accrued expenses and other
liabilities 1,252 1,478 1,625 1,486
Medium- and long-term debt 11,252 13,571 15,053 15,376
--------------------------------------------------------------------------
Total liabilities 52,555 56,537 60,396 60,053
Fixed rate cumulative
perpetual preferred stock,
series F, no par value,
$1,000 liquidation value per
share:
Authorized - 2,250,000
shares Issued - 2,250,000
shares at 9/30/09, 6/30/09
and 12/31/08 2,145 2,140 2,129 -
Common stock - $5 par value:
Authorized - 325,000,000
shares Issued - 178,735,252
shares at 9/30/09, 6/30/09,
12/31/08 and 9/30/08 894 894 894 894
Capital surplus 738 731 722 586
Accumulated other comprehensive
loss (361) (342) (309) (129)
Retained earnings 5,205 5,257 5,345 5,379
Less cost of common stock
in treasury - 27,620,576
shares at 9/30/09, 27,620,471
shares at 6/30/09, 28,244,967
shares at 12/31/2008 and
28,249,360 shares at 9/30/08 (1,586) (1,587) (1,629) (1,630)
--------------------------------------------------------------------------
Total shareholders' equity 7,035 7,093 7,152 5,100
--------------------------------------------------------------------------
Total liabilities and
shareholders' equity $59,590 $63,630 $67,548 $65,153
==========================================================================
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
--------------------------------------------------------------------------
Three Months Nine Months
Ended Ended
September 30, September 30,
-----------------------------
(in millions, except per share data) 2009 2008 2009 2008
--------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans $444 $634 $1,343 $2,037
Interest on investment securities 64 99 276 288
Interest on short-term investments 3 2 7 10
--------------------------------------------------------------------------
Total interest income 511 735 1,626 2,335
INTEREST EXPENSE
Interest on deposits 89 141 320 576
Interest on short-term borrowings - 30 2 78
Interest on medium- and long-term debt 37 98 133 297
--------------------------------------------------------------------------
Total interest expense 126 269 455 951
--------------------------------------------------------------------------
Net interest income 385 466 1,171 1,384
Provision for loan losses 311 165 826 494
--------------------------------------------------------------------------
Net interest income after provision
for loan losses 74 301 345 890
NONINTEREST INCOME
Service charges on deposit accounts 60 57 173 174
Fiduciary income 39 49 122 152
Commercial lending fees 21 17 58 53
Letter of credit fees 18 19 50 52
Card fees 13 15 37 45
Brokerage fees 7 10 24 30
Foreign exchange income 10 11 30 33
Bank-owned life insurance 8 11 26 29
Net securities gains 107 27 233 63
Other noninterest income 32 24 83 88
--------------------------------------------------------------------------
Total noninterest income 315 240 836 719
NONINTEREST EXPENSES
Salaries 171 192 513 594
Employee benefits 51 46 159 141
--------------------------------------------------------------------------
Total salaries and employee benefits 222 238 672 735
Net occupancy expense 40 40 119 114
Equipment expense 15 15 46 46
Outside processing fee expense 24 26 74 77
Software expense 21 18 61 57
FDIC insurance expense 15 5 75 9
Customer services 1 2 2 11
Litigation and operational losses 3 105 8 100
Provision for credit losses on lending-
related commitments 2 9 (3) 20
Other noninterest expenses 56 56 171 171
--------------------------------------------------------------------------
Total noninterest expenses 399 514 1,225 1,340
--------------------------------------------------------------------------
Income (loss) from continuing operations
before income taxes (10) 27 (44) 269
Provision (benefit) for income taxes (29) - (89) 76
--------------------------------------------------------------------------
Income from continuing operations 19 27 45 193
Income from discontinued
operations, net of tax - 1 1 -
--------------------------------------------------------------------------
NET INCOME 19 28 46 193
Preferred stock dividends 34 - 101 -
--------------------------------------------------------------------------
Net income (loss) applicable to common
stock $(15) $28 $(55) $193
==========================================================================
Basic earnings per common share:
Income (loss) from continuing
operations $(0.10) $0.18 $(0.37) $1.28
Net income (loss) (0.10) 0.19 (0.36) 1.28
Diluted earnings per common share:
Income (loss) from continuing
operations (0.10) 0.18 (0.37) 1.28
Net income (loss) (0.10) 0.19 (0.36) 1.28
Cash dividends declared on common stock 7 99 22 298
Cash dividends declared per common share 0.05 0.66 0.15 1.98
==========================================================================
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
--------------------------------------------------------------------------
Third Second First Fourth Third
(in millions, except per Quarter Quarter Quarter Quarter Quarter
share data) 2009 2009 2009 2008 2008
--------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans $444 $447 $452 $612 $634
Interest on investment
securities 64 103 109 101 99
Interest on short-term
investments 3 2 2 3 2
--------------------------------------------------------------------------
Total interest
income 511 552 563 716 735
INTEREST EXPENSE
Interest on deposits 89 106 125 158 141
Interest on short-term
borrowings - - 2 9 30
Interest on medium- and
long-term debt 37 44 52 118 98
--------------------------------------------------------------------------
Total interest expense 126 150 179 285 269
--------------------------------------------------------------------------
Net interest income 385 402 384 431 466
Provision for loan losses 311 312 203 192 165
--------------------------------------------------------------------------
Net interest income after
provision for loan losses 74 90 181 239 301
NONINTEREST INCOME
Service charges on deposit
accounts 60 55 58 55 57
Fiduciary income 39 41 42 47 49
Commercial lending fees 21 19 18 16 17
Letter of credit fees 18 16 16 17 19
Card fees 13 12 12 13 15
Brokerage fees 7 8 9 12 10
Foreign exchange income 10 11 9 7 11
Bank-owned life insurance 8 10 8 9 11
Net securities gains 107 113 13 4 27
Other noninterest income 32 13 38 (6) 24
--------------------------------------------------------------------------
Total noninterest income 315 298 223 174 240
NONINTEREST EXPENSES
Salaries 171 171 171 187 192
Employee benefits 51 53 55 53 46
--------------------------------------------------------------------------
Total salaries and
employee benefits 222 224 226 240 238
Net occupancy expense 40 38 41 42 40
Equipment expense 15 15 16 16 15
Outside processing fee
expense 24 25 25 27 26
Software expense 21 20 20 19 18
FDIC insurance expense 15 45 15 7 5
Customer services 1 1 - 2 2
Litigation and operational
losses 3 3 2 3 105
Provision for credit losses
on lending-related
commitments 2 (4) (1) (2) 9
Other noninterest expenses 56 62 53 57 56
--------------------------------------------------------------------------
Total noninterest expenses 399 429 397 411 514
--------------------------------------------------------------------------
Income (loss) from continuing
operations before income
taxes (10) (41) 7 2 27
Provision (benefit) for
income taxes (29) (59) (1) (17) -
--------------------------------------------------------------------------
Income from continuing
operations 19 18 8 19 27
Income from discontinued
operations, net of tax - - 1 1 1
--------------------------------------------------------------------------
NET INCOME 19 18 9 20 28
Preferred stock dividends 34 34 33 17 -
--------------------------------------------------------------------------
Net income (loss) applicable
to common stock $(15) $(16) $(24) $3 $28
==========================================================================
Basic earnings per common
share:
Income (loss) from
continuing operations $(0.10) $(0.11) $(0.16) $0.01 $0.18
Net income (loss) (0.10) (0.10) (0.16) 0.02 0.19
Diluted earnings per common
share:
Income (loss) from
continuing operations (0.10) (0.11) (0.16) 0.01 0.18
Net income (loss) (0.10) (0.10) (0.16) 0.02 0.19
Cash dividends declared on
common stock 7 8 7 50 99
Cash dividends declared per
common share 0.05 0.05 0.05 0.33 0.66
==========================================================================
N/M - Not meaningful
--------------------------------------------------------------------------
Third Quarter 2009 Compared To:
----------------------------------------
(in millions, except per Second Quarter 2009 Third Quarter 2008
share data) Amount Percent Amount Percent
--------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans $(3) (1)% $(190) (30)%
Interest on investment
securities (39) (37) (35) (35)
Interest on short-term
investments 1 31 1 23
--------------------------------------------------------------------------
Total interest income (41) (8) (224) (31)
INTEREST EXPENSE
Interest on deposits (17) (16) (52) (37)
Interest on short-term
borrowings - (72) (30) (100)
Interest on medium- and
long-term debt (7) (17) (61) (62)
--------------------------------------------------------------------------
Total interest expense (24) (17) (143) (53)
--------------------------------------------------------------------------
Net interest income (17) (4) (81) (18)
Provision for loan losses (1) - 146 88
--------------------------------------------------------------------------
Net interest income
after provision for
loan losses (16) (17) (227) (75)
NONINTEREST INCOME
Service charges on deposit
accounts 5 6 3 3
Fiduciary income (2) (5) (10) (21)
Commercial lending fees 2 12 4 22
Letter of credit fees 2 9 (1) (4)
Card fees 1 4 (2) (11)
Brokerage fees (1) (12) (3) (27)
Foreign exchange income (1) (1) (1) (1)
Bank-owned life insurance (2) (10) (3) (25)
Net securities gains (6) (5) 80 N/M
Other noninterest income 19 N/M 8 31
--------------------------------------------------------------------------
Total noninterest income 17 5 75 31
NONINTEREST EXPENSES
Salaries - - (21) (11)
Employee benefits (2) (5) 5 8
--------------------------------------------------------------------------
Total salaries and employee
benefits (2) (1) (16) (7)
Net occupancy expense 2 6 - 1
Equipment expense - (1) - 1
Outside processing fee
expense (1) (4) (2) (6)
Software expense 1 2 3 12
FDIC insurance expense (30) (66) 10 N/M
Customer services - (32) (1) (59)
Litigation and operational
losses - 24 (102) (97)
Provision for credit losses
on lending-related commitments 6 N/M (7) (73)
Other noninterest expenses (6) (10) - 2
--------------------------------------------------------------------------
Total noninterest
expenses (30) (7) (115) (22)
--------------------------------------------------------------------------
Income (loss) from
continuing
operations before income
taxes 31 74 (37) N/M
Provision (benefit) for
income taxes 30 51 (29) N/M
--------------------------------------------------------------------------
Income from continuing
operations 1 2 (8) (33)
Income from discontinued
operations, net of tax - N/M (1) N/M
--------------------------------------------------------------------------
NET INCOME 1 1 (9) (37)
Preferred stock dividends - - 34 N/M
--------------------------------------------------------------------------
Net income (loss)
applicable to
common stock $1 1% $(43) N/M%
==========================================================================
Basic earnings per
common share:
Income (loss) from
continuing operations $0.01 9% $(0.28) N/M%
Net income (loss) - - (0.29) N/M
Diluted earnings per
common share:
Income (loss) from
continuing operations 0.01 9 (0.28) N/M
Net income (loss) - - (0.29) N/M
Cash dividends declared on
common stock (1) (2) (92) (93)
Cash dividends declared per
common share - - (0.61) (92)
==========================================================================
N/M - Not meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
--------------------------------------------------------------------------
2009 2008
------------------------- ----------------
(in millions) 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
--------------------------------------------------------------------------
Balance at beginning
of period $880 $816 $770 $712 $663
Loan charge-offs:
Commercial 113 88 61 66 48
Real estate
construction:
Commercial Real Estate
business line 63 81 57 35 40
Other business lines 1 - - - -
--------------------------------------------------------------------------
Total real estate
construction 64 81 57 35 40
Commercial mortgage:
Commercial Real Estate
business line 24 23 16 21 17
Other business lines 15 23 18 8 11
--------------------------------------------------------------------------
Total commercial
mortgage 39 46 34 29 28
Residential mortgage 11 2 2 5 1
Consumer 7 12 6 7 5
Lease financing 6 24 - 1 -
International 5 4 1 1 -
--------------------------------------------------------------------------
Total loan
charge-offs 245 257 161 144 122
Recoveries on loans
previously charged-off:
Commercial 3 5 3 6 3
Real estate construction 1 - - 1 1
Commercial mortgage - 2 - 2 -
Residential mortgage - - - - -
Consumer 1 - 1 1 1
Lease financing - 1 - - 1
International 1 1 - 1 -
--------------------------------------------------------------------------
Total recoveries 6 9 4 11 6
--------------------------------------------------------------------------
Net loan charge-offs 239 248 157 133 116
Provision for loan losses 311 312 203 192 165
Foreign currency
translation adjustment 1 - - (1) -
--------------------------------------------------------------------------
Balance at end of period $953 $880 $816 $770 $712
==========================================================================
Allowance for loan losses
as a percentage of total
loans 2.19% 1.89% 1.68% 1.52% 1.38%
Net loan charge-offs as
a percentage of average
total loans 2.14 2.08 1.26 1.04 0.90
Net credit-related
charge-offs as a
percentage of
average total loans 2.14 2.08 1.26 1.04 0.90
==========================================================================
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS
(unaudited)
Comerica Incorporated and Subsidiaries
--------------------------------------------------------------------------
2009 2008
------------------------ ----------------
(in millions) 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
--------------------------------------------------------------------------
Balance at beginning of period $33 $37 $38 $40 $31
Less: Charge-offs on
lending-related
commitments(a) - - - - -
Add: Provision for credit
losses on lending-related
commitments 2 (4) (1) (2) 9
--------------------------------------------------------------------------
Balance at end of period $35 $33 $37 $38 $40
==========================================================================
Unfunded lending-related
commitments sold $1 $- $- $- $-
==========================================================================
(a) Charge-offs result from the sale of unfunded lending-related
commitments.
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
------------------------------------------------------ ----------------
2009 2008
--------------------------- ----------------
(in millions) 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
--------------------------------------------------------------------------
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Commercial $290 $327 $258 $205 $206
Real estate construction:
Commercial Real Estate
business line 542 472 426 429 386
Other business lines 4 4 5 5 5
--------------------------------------------------------------------------
Total real estate
construction 546 476 431 434 391
Commercial mortgage:
Commercial Real Estate
business line 137 134 131 132 137
Other business lines 161 175 138 130 114
--------------------------------------------------------------------------
Total commercial
mortgage 298 309 269 262 251
Residential mortgage 27 7 8 7 8
Consumer 8 7 8 6 4
Lease financing 18 - 2 1 -
International 7 4 6 2 3
--------------------------------------------------------------------------
Total nonaccrual
loans 1,194 1,130 982 917 863
Reduced-rate loans 2 - - - -
--------------------------------------------------------------------------
Total nonperforming
loans 1,196 1,130 982 917 863
Foreclosed property 109 100 91 66 18
--------------------------------------------------------------------------
Total nonperforming
assets $1,305 $1,230 $1,073 $983 $881
==========================================================================
Nonperforming loans as a
percentage of total loans 2.74% 2.43% 2.02% 1.82% 1.67%
Nonperforming assets as a
percentage of total loans
and foreclosed property 2.99 2.64 2.20 1.94 1.71
Allowance for loan losses
as a percentage of total
nonperforming loans 80 78 83 84 82
Loans past due 90 days or
more and still accruing $161 $210 $207 $125 $97
--------------------------------------------------------------------------
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at
beginning of period $1,130 $982 $917 $863 $731
Loans transferred to
nonaccrual (a) 361 419 241 258 280
Nonaccrual business
loan gross charge-offs(b) (226) (242) (153) (132) (116)
Loans transferred to
accrual status (a) (4) - (4) (11) -
Nonaccrual business loans
sold (c) (41) (10) (3) (14) (18)
Payments/Other (d) (26) (19) (16) (47) (14)
--------------------------------------------------------------------------
Nonaccrual loans at end
of period $1,194 $1,130 $982 $917 $863
==========================================================================
(a) Based on an analysis of nonaccrual loans with book balances greater
than $2 million.
(b) Analysis of gross loan charge-offs:
Nonaccrual business
loans $226 $242 $153 $132 $116
Performing watch
list loans 1 1 - - -
Consumer and
residential
mortgage loans 18 14 8 12 6
-------------------------------------------
Total gross loan
charge-offs $245 $257 $161 $144 $122
===========================================
(c) Analysis of loans sold:
Nonaccrual business
loans $41 $10 $3 $14 $18
Performing watch
list loans 24 6 - - 3
-------------------------------------------
Total loans sold $65 $16 $3 $14 $21
===========================================
(d) Includes net changes related to nonaccrual loans with balances less
than $2 million, payments on non-accrual 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
--------------------------------------------------------------------------
Nine Months Ended
--------------------------
September 30, 2009
--------------------------
Average Average
(dollar amounts in millions) Balance Interest Rate
--------------------------------------------------------------------------
Commercial loans (a) (b) $25,399 $678 3.57%
Real estate construction loans 4,287 94 2.92
Commercial mortgage loans 10,422 327 4.20
Residential mortgage loans 1,787 76 5.69
Consumer loans 2,565 71 3.71
Lease financing (c) 1,248 29 3.08
International loans 1,603 46 3.80
Business loan swap income (expense) - 25 -
--------------------------
Total loans (b) 47,311 1,346 3.80
Auction-rate securities available-for-
sale 1,040 12 1.50
Other investment securities
available-for-sale 8,617 267 4.24
--------------------------
Total investment securities
available-for-sale 9,657 279 3.93
Federal funds sold and securities
purchased under agreements to resell 24 - 0.32
Interest-bearing deposits with banks 2,426 5 0.25
Other short-term investments 162 2 1.79
--------------------------
Total earning assets 59,580 1,632 3.67
Cash and due from banks 901
Allowance for loan losses (913)
Accrued income and other assets 4,728
-------
Total assets $64,296
=======
Money market and NOW deposits (a) $12,579 49 0.52
Savings deposits 1,326 1 0.12
Customer certificates of deposit 8,571 159 2.48
--------------------------
Total interest-bearing core
deposits 22,476 209 1.25
Other time deposits 4,983 109 2.93
Foreign office time deposits 688 2 0.31
--------------------------
Total interest-bearing deposits 28,147 320 1.52
Short-term borrowings 1,262 2 0.25
Medium- and long-term debt 14,073 133 1.26
--------------------------
Total interest-bearing sources 43,482 455 1.40
---------------
Noninterest-bearing deposits (a) 12,385
Accrued expenses and other liabilities 1,305
Total shareholders' equity 7,124
-------
Total liabilities and
shareholders' equity $64,296
=======
Net interest income/rate spread (FTE) $1,177 2.27
======
FTE adjustment $6
======
Impact of net noninterest-bearing
sources of funds 0.38
--------------------------------------------------------------------------
Net interest margin (as a percentage
of average earning assets)(FTE)(b)(c)(d) 2.65%
==========================================================================
N/M - Not meaningful
(a) FSD balances included above:
Loans (primarily low-rate) $212 $3 1.87%
Interest-bearing deposits 484 2 0.60
Noninterest-bearing deposits 1,313
(b) Impact of FSD loans (primarily
low-rate) on the following:
Commercial loans (0.01)%
Total loans (0.01)
Net interest margin (FTE)
(assuming loans were
funded by noninterest-bearing
deposits) -
(c) Year-to-date 2008 net interest income declined $38 million and the net
interest margin declined eight basis points due to tax-related
non-cash lease income charges. Excluding these charges, the net
interest margin would have been 3.16% year-to-date 2008.
(d) Excess liquidity, represented by average balances deposited with the
Federal Reserve Bank, reduced the net interest margin by 11 basis
points year-to-date 2009 and had no impact on the net interest margin
year-to-date 2008. Excluding excess liquidity, the net interest
margin would have been 2.76% year-to-date 2009.
Nine Months Ended
--------------------------
September 30, 2008
--------------------------
Average Average
(dollar amounts in millions) Balance Interest Rate
--------------------------------------------------------------------------
Commercial loans (a) (b) $28,992 $1,135 5.23%
Real estate construction loans 4,776 184 5.16
Commercial mortgage loans 10,343 442 5.71
Residential mortgage loans 1,898 85 5.99
Consumer loans 2,532 100 5.29
Lease financing (c) 1,354 (4) N/M
International loans 2,013 79 5.24
Business loan swap income (expense) - 19 -
--------------------------
Total loans (b) 51,908 2,040 5.25
Auction-rate securities available-for-
sale - - -
Other investment securities
available-for-sale 7,889 288 4.88
--------------------------
Total investment securities
available-for-sale 7,889 288 4.88
Federal funds sold and securities
purchased under agreements to resell 100 2 2.40
Interest-bearing deposits with banks 19 - 2.03
Other short-term investments 267 8 4.07
--------------------------
Total earning assets 60,183 2,338 5.19
Cash and due from banks 1,228
Allowance for loan losses (661)
Accrued income and other assets 4,167
-------
Total assets $64,917
=======
Money market and NOW deposits (a) $14,774 170 1.54
Savings deposits 1,371 5 0.50
Customer certificates of deposit 8,003 200 3.35
--------------------------
Total interest-bearing core
deposits 24,148 375 2.08
Other time deposits 6,719 176 3.49
Foreign office time deposits 1,064 25 3.09
--------------------------
Total interest-bearing deposits 31,931 576 2.41
Short-term borrowings 4,084 78 2.54
Medium- and long-term debt 11,597 297 3.42
--------------------------
Total interest-bearing sources 47,612 951 2.67
---------------
Noninterest-bearing deposits (a) 10,638
Accrued expenses and other liabilities 1,514
Total shareholders' equity 5,153
-------
Total liabilities and
shareholders' equity $64,917
=======
Net interest income/rate spread (FTE) $1,387 2.52
======
FTE adjustment $3
======
Impact of net noninterest-bearing
sources of funds 0.56
--------------------------------------------------------------------------
Net interest margin (as a percentage
of average earning assets)(FTE)(b)(c)(d) 3.08%
==========================================================================
N/M - Not meaningful
(a) FSD balances included above:
Loans (primarily low-rate) $557 $6 1.36%
Interest-bearing deposits 998 16 2.11
Noninterest-bearing deposits 1,752
(b) Impact of FSD loans (primarily
low-rate) on the following:
Commercial loans (0.07)%
Total loans (0.04)
Net interest margin (FTE)
(assuming loans were
funded by noninterest-bearing
deposits) (0.02)
(c) Year-to-date 2008 net interest income declined $38 million and the net
interest margin declined eight basis points due to tax-related
non-cash lease income charges. Excluding these charges, the net
interest margin would have been 3.16% year-to-date 2008.
(d) Excess liquidity, represented by average balances deposited with the
Federal Reserve Bank, reduced the net interest margin by 11 basis
points year-to-date 2009 and had no impact on the net interest margin
year-to-date 2008. Excluding excess liquidity, the net interest
margin would have been 2.76% year-to-date 2009.
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)
Comerica Incorporated and Subsidiaries
--------------------------------------------------------------------------
Three Months Ended
-------------------------
September 30, 2009
-------------------------
Average Average
(dollar amounts in millions) Balance Interest Rate
--------------------------------------------------------------------------
Commercial loans (a) (b) $23,401 $223 3.79%
Real estate construction loans 4,033 29 2.83
Commercial mortgage loans 10,359 110 4.21
Residential mortgage loans 1,720 24 5.66
Consumer loans 2,550 24 3.68
Lease financing (c) 1,218 12 3.96
International loans 1,501 14 3.65
Business loan swap income - 9 -
-------------------------
Total loans (b) 44,782 445 3.94
Auction-rate securities available-for-sale 962 3 1.29
Other investment securities available-for-
sale 8,108 62 3.10
-------------------------
Total investment securities available-for-
sale 9,070 65 2.91
Federal funds sold and securities purchased
under agreements to resell 2 - 0.29
Interest-bearing deposits with banks 3,538 2 0.25
Other short-term investments 121 1 1.80
-------------------------
Total earning assets 57,513 513 3.55
Cash and due from banks 873
Allowance for loan losses (992)
Accrued income and other assets 4,554
-------
Total assets $61,948
=======
Money market and NOW deposits (a) $13,090 15 0.46
Savings deposits 1,347 - 0.09
Customer certificates of deposit 8,145 46 2.23
-------------------------
Total interest-bearing core deposits 22,582 61 1.07
Other time deposits 3,573 28 3.05
Foreign office time deposits 660 - 0.24
-------------------------
Total interest-bearing deposits 26,815 89 1.32
Short-term borrowings 434 - 0.13
Medium- and long-term debt 13,311 37 1.10
-------------------------
Total interest-bearing sources 40,560 126 1.23
------------
Noninterest-bearing deposits (a) 13,225
Accrued expenses and other liabilities 1,098
Total shareholders' equity 7,065
-------
Total liabilities and shareholders'
equity $61,948
=======
Net interest income/rate spread (FTE) $387 2.32
====
FTE adjustment $2
====
Impact of net noninterest-bearing
sources of funds 0.36
--------------------------------------------------------------------------
Net interest margin (as a percentage
of average earning assets)(FTE)(b)(c)(d) 2.68%
==========================================================================
N/M - Not meaningful
(a) FSD balances included above:
Loans (primarily low-rate) $209 $1 1.94%
Interest-bearing deposits 384 - 0.47
Noninterest-bearing deposits 1,258
(b) Impact of FSD loans (primarily
low-rate) on the following:
Commercial loans (0.02)%
Total loans (0.01)
Net interest margin (FTE)
(assuming loans were funded
by noninterest-bearing deposits) -
(c) Third quarter 2008 net interest income declined $8 million and the net
interest margin declined six basis points due to a tax-related
non-cash lease income charge. Excluding this charge, the net interest
margin would have been 3.17% in the third quarter 2008.
(d) Excess liquidity, represented by average balances deposited with the
Federal Reserve Bank, reduced the net interest margin by 16 basis
points and 8 basis points in the third and second quarters of 2009,
respectively. Excluding excess liquidity, the net interest margin
would have been 2.84% and 2.81% in each respective period. Excess
liquidity had no impact on the net interest margin in the third
quarter 2008.
Three Months Ended
-------------------------
June 30, 2009
-------------------------
Average Average
(dollar amounts in millions) Balance Interest Rate
--------------------------------------------------------------------------
Commercial loans (a) (b) $25,657 $225 3.55%
Real estate construction loans 4,325 32 2.95
Commercial mortgage loans 10,476 108 4.17
Residential mortgage loans 1,795 26 5.74
Consumer loans 2,572 24 3.65
Lease financing (c) 1,227 8 2.48
International loans 1,596 16 3.90
Business loan swap income - 9 -
-------------------------
Total loans (b) 47,648 448 3.77
Auction-rate securities available-for-sale 1,052 4 1.48
Other investment securities available-for-
sale 8,734 100 4.70
-------------------------
Total investment securities available-for-
sale 9,786 104 4.35
Federal funds sold and securities purchased
under agreements to resell 13 - 0.33
Interest-bearing deposits with banks 1,876 1 0.28
Other short-term investments 199 1 1.88
-------------------------
Total earning assets 59,522 554 3.75
Cash and due from banks 881
Allowance for loan losses (913)
Accrued income and other assets 4,766
-------
Total assets $64,256
=======
Money market and NOW deposits (a) $12,304 15 0.49
Savings deposits 1,354 - 0.11
Customer certificates of deposit 8,721 55 2.53
-------------------------
Total interest-bearing core deposits 22,379 70 1.26
Other time deposits 5,124 36 2.75
Foreign office time deposits 734 - 0.26
-------------------------
Total interest-bearing deposits 28,237 106 1.50
Short-term borrowings 1,010 - 0.20
Medium- and long-term debt 14,002 44 1.27
-------------------------
Total interest-bearing sources 43,249 150 1.40
------------
Noninterest-bearing deposits (a) 12,546
Accrued expenses and other liabilities 1,308
Total shareholders' equity 7,153
-------
Total liabilities and shareholders'
equity $64,256
=======
Net interest income/rate spread (FTE) $404 2.35
====
FTE adjustment $2
====
Impact of net noninterest-bearing
sources of funds 0.38
--------------------------------------------------------------------------
Net interest margin (as a percentage
of average earning assets)(FTE)(b)(c)(d) 2.73%
==========================================================================
N/M - Not meaningful
(a) FSD balances included above:
Loans (primarily low-rate) $216 $1 1.71%
Interest-bearing deposits 452 1 0.70
Noninterest-bearing deposits 1,414
(b) Impact of FSD loans (primarily
low-rate) on the following:
Commercial loans (0.01)%
Total loans (0.01)
Net interest margin (FTE)
(assuming loans were funded
by noninterest-bearing deposits) -
(c) Third quarter 2008 net interest income declined $8 million and the net
interest margin declined six basis points due to a tax-related
non-cash lease income charge. Excluding this charge, the net interest
margin would have been 3.17% in the third quarter 2008.
(d) Excess liquidity, represented by average balances deposited with the
Federal Reserve Bank, reduced the net interest margin by 16 basis
points and 8 basis points in the third and second quarters of 2009,
respectively. Excluding excess liquidity, the net interest margin
would have been 2.84% and 2.81% in each respective period. Excess
liquidity had no impact on the net interest margin in the third
quarter 2008.
Three Months Ended
-------------------------
September 30, 2008
-------------------------
Average Average
(dollar amounts in millions) Balance Interest Rate
--------------------------------------------------------------------------
Commercial loans (a) (b) $28,521 $347 4.85%
Real estate construction loans 4,675 55 4.65
Commercial mortgage loans 10,511 142 5.38
Residential mortgage loans 1,870 28 5.92
Consumer loans 2,599 31 4.83
Lease financing (c) 1,365 4 1.07
International loans 1,967 24 4.85
Business loan swap income - 4 -
-------------------------
Total loans (b) 51,508 635 4.91
Auction-rate securities available-for-sale - - -
Other investment securities available-for-
sale 8,146 99 4.85
-------------------------
Total investment securities available-for-
sale 8,146 99 4.85
Federal funds sold and securities purchased
under agreements to resell 70 - 1.87
Interest-bearing deposits with banks 20 - 1.72
Other short-term investments 202 2 3.67
-------------------------
Total earning assets 59,946 736 4.89
Cash and due from banks 1,228
Allowance for loan losses (723)
Accrued income and other assets 4,412
-------
Total assets $64,863
=======
Money market and NOW deposits (a) $14,204 45 1.26
Savings deposits 1,350 1 0.42
Customer certificates of deposit 7,690 53 2.73
-------------------------
Total interest-bearing core deposits 23,244 99 1.70
Other time deposits 5,209 37 2.81
Foreign office time deposits 814 5 2.51
-------------------------
Total interest-bearing deposits 29,267 141 1.92
Short-term borrowings 5,413 30 2.20
Medium- and long-term debt 12,880 98 3.02
-------------------------
Total interest-bearing sources 47,560 269 2.25
------------
Noninterest-bearing deposits (a) 10,646
Accrued expenses and other liabilities 1,582
Total shareholders' equity 5,075
-------
Total liabilities and shareholders'
equity $64,863
=======
Net interest income/rate spread (FTE) $467 2.64
====
FTE adjustment $1
====
Impact of net noninterest-bearing
sources of funds 0.47
--------------------------------------------------------------------------
Net interest margin (as a percentage
of average earning assets)(FTE)(b)(c)(d) 3.11%
==========================================================================
N/M - Not meaningful
(a) FSD balances included above:
Loans (primarily low-rate) $401 $2 1.74%
Interest-bearing deposits 907 4 1.65
Noninterest-bearing deposits 1,542
(b) Impact of FSD loans (primarily
low-rate) on the following:
Commercial loans (0.05)%
Total loans (0.02)
Net interest margin (FTE)
(assuming loans were funded
by noninterest-bearing deposits) (0.01)
(c) Third quarter 2008 net interest income declined $8 million and the net
interest margin declined six basis points due to a tax-related
non-cash lease income charge. Excluding this charge, the net interest
margin would have been 3.17% in the third quarter 2008.
(d) Excess liquidity, represented by average balances deposited with the
Federal Reserve Bank, reduced the net interest margin by 16 basis
points and 8 basis points in the third and second quarters of 2009,
respectively. Excluding excess liquidity, the net interest margin
would have been 2.84% and 2.81% in each respective period. Excess
liquidity had no impact on the net interest margin in the third
quarter 2008.
CONSOLIDATED STATISTICAL DATA
Comerica Incorporated and Subsidiaries
--------------------------------------------------------------------------
(in millions, except per September 30, June 30, March 31,
share data) 2009 2009 2009
--------------------------------------------------------------------------
Commercial loans:
Floor plan $857 $1,492 $1,763
Other 21,689 23,430 24,668
--------------------------------------------------------------------------
Total commercial loans 22,546 24,922 26,431
Real estate construction loans:
Commercial Real Estate business
line 3,328 3,500 3,711
Other business lines 542 652 668
--------------------------------------------------------------------------
Total real estate construction
loans 3,870 4,152 4,379
Commercial mortgage loans:
Commercial Real Estate business
line 1,678 1,728 1,659
Other business lines 8,702 8,672 8,855
--------------------------------------------------------------------------
Total commercial mortgage loans 10,380 10,400 10,514
Residential mortgage loans 1,679 1,759 1,836
Consumer loans:
Home equity 1,804 1,801 1,791
Other consumer 740 761 786
--------------------------------------------------------------------------
Total consumer loans 2,544 2,562 2,577
Lease financing 1,197 1,234 1,232
International loans 1,355 1,523 1,655
--------------------------------------------------------------------------
Total loans $43,571 $46,552 $48,624
==========================================================================
Goodwill $150 $150 $150
Loan servicing rights 8 9 10
Tier 1 common capital ratio(a)(b) 8.02% 7.66% 7.32%
Tier 1 risk-based capital ratio(b) 12.18 11.58 11.06
Total risk-based capital ratio(b) 16.75 15.97 15.36
Leverage ratio (b) 12.45 12.11 11.65
Tangible common equity ratio(a) 7.96 7.55 7.27
Book value per common share $31.90 $32.70 $33.32
Market value per share for the
quarter:
High 31.83 26.47 21.20
Low 19.94 16.03 11.72
Close 29.67 21.15 18.31
Quarterly ratios:
Return on average common
shareholders' equity (1.27)% (1.25)% (1.90)%
Return on average assets 0.12 0.11 0.06
Efficiency ratio 67.14 72.75 66.61
Number of banking centers 444 441 440
Number of employees - full time
equivalent 9,384 9,497 9,696
(a) See Reconciliation of Non-GAAP Financial Measures
(b) September 30, 2009 ratios are estimated
December 31, September 30,
(in millions, except per share data) 2008 2008
--------------------------------------------------------------------------
Commercial loans:
Floor plan $2,341 $2,151
Other 25,658 26,453
--------------------------------------------------------------------------
Total commercial loans 27,999 28,604
Real estate construction loans:
Commercial Real Estate business line 3,831 3,937
Other business lines 646 628
--------------------------------------------------------------------------
Total real estate construction loans 4,477 4,565
Commercial mortgage loans:
Commercial Real Estate business line 1,619 1,668
Other business lines 8,870 8,920
--------------------------------------------------------------------------
Total commercial mortgage loans 10,489 10,588
Residential mortgage loans 1,852 1,863
Consumer loans:
Home equity 1,781 1,693
Other consumer 811 951
--------------------------------------------------------------------------
Total consumer loans 2,592 2,644
Lease financing 1,343 1,360
International loans 1,753 1,931
--------------------------------------------------------------------------
Total loans $50,505 $51,555
==========================================================================
Goodwill $150 $150
Loan servicing rights 11 12
Tier 1 common capital ratio(a)(b) 7.08% 6.67%
Tier 1 risk-based capital ratio(b) 10.66 7.32
Total risk-based capital ratio(b) 14.72 11.19
Leverage ratio(b) 11.77 8.57
Tangible common equity ratio(a) 7.21 7.60
Book value per common share $33.31 $33.89
Market value per share for the quarter:
High 37.01 43.99
Low 15.05 19.31
Close 19.85 32.79
Quarterly ratios:
Return on average common shareholders' equity 0.19% 2.25%
Return on average assets 0.12 0.18
Efficiency ratio 68.19 75.53
Number of banking centers 439 424
Number of employees - full time equivalent 10,186 10,347
(a) See Reconciliation of Non-GAAP Financial Measures
(b) September 30, 2009 ratios are estimated
PARENT COMPANY ONLY BALANCE SHEETS (unaudited)
Comerica Incorporated
--------------------------------------------------------------------------
(in millions, except September 30, December 31, September 30,
share data) 2009 2008 2008
--------------------------------------------------------------------------
ASSETS
Cash and due from subsidiary
bank $7 $11 $16
Short-term investments with
subsidiary bank 2,169 2,329 158
Other short-term investments 84 80 99
Investment in subsidiaries,
principally banks 5,711 5,690 5,849
Premises and equipment 4 5 5
Other assets 197 210 163
--------------------------------------------------------------------------
Total assets $8,172 $8,325 $6,290
==========================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Medium- and long-term debt $992 $1,002 $969
Other liabilities 145 171 221
--------------------------------------------------------------------------
Total liabilities 1,137 1,173 1,190
Fixed rate cumulative perpetual
preferred stock, series F, no
par value, $1,000 liquidation
preference per share:
Authorized - 2,250,000 shares
Issued - 2,250,000 shares at
9/30/09 and 12/31/08 2,145 2,129 -
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 178,735,252 shares
at 09/30/09, 12/31/08 and
09/30/08 894 894 894
Capital surplus 738 722 586
Accumulated other comprehensive loss (361) (309) (129)
Retained earnings 5,205 5,345 5,379
Less cost of common stock in
treasury - 27,620,576 shares
at 9/30/09, 28,244,967 shares
at 12/31/08 and 28,249,360
shares at 9/30/08 (1,586) (1,629) (1,630)
--------------------------------------------------------------------------
Total shareholders' equity 7,035 7,152 5,100
--------------------------------------------------------------------------
Total liabilities and
shareholders' equity $8,172 $8,325 $6,290
==========================================================================
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Comerica Incorporated and Subsidiaries
--------------------------------------------------------------------------
Common Stock
(in millions, Nonredeemable --------------------
except per Preferred Shares Capital
share data) Stock Outstanding Amount Surplus
--------------------------------------------------------------------------
BALANCE AT JANUARY 1,
2008 $- 150.0 $894 $564
Net income - - - -
Other comprehensive
income, net of tax - - - -
Total comprehensive
income
Cash dividends
declared on
common stock
($1.98 per share) - - - -
Purchase of common
stock - - - -
Net issuance of
common stock
under employee
stock plans - 0.5 - (19)
Share-based
compensation - - - 41
--------------------------------------------------------------------------
BALANCE AT SEPTEMBER
30, 2008 $- 150.5 $894 $586
==========================================================================
BALANCE AT
JANUARY 1, 2009 $2,129 150.5 $894 $722
Net income - - - -
Other comprehensive
loss, net of tax - - - -
Total comprehensive
loss
Cash dividends
declared on
preferred stock - - - -
Cash dividends
declared on
common stock
($0.15 per share) - - - -
Purchase of
common stock - (0.1) - -
Accretion of
discount on
preferred stock 16 - - -
Net issuance of
common stock
under employee
stock plans - 0.7 - (13)
Share-based
compensation - - - 25
Other - - - 4
--------------------------------------------------------------------------
BALANCE AT SEPTEMBER
30, 2009 $2,145 151.1 $894 $738
==========================================================================
Accumulated
(in millions, Other Total
except per Comprehensive Retained Treasury Shareholders'
share data) Loss Earnings Stock Equity
--------------------------------------------------------------------------
BALANCE AT JANUARY 1,
2008 $(177) $5,497 $(1,661) $5,117
Net income - 193 - 193
Other comprehensive
income, net of tax 48 - - 48
------
Total comprehensive
income 241
Cash dividends
declared on
common stock
($1.98 per share) - (298) - (298)
Purchase of common
stock - - (1) (1)
Net issuance of
common stock
under employee
stock plans - (13) 32 -
Share-based
compensation - - - 41
--------------------------------------------------------------------------
BALANCE AT SEPTEMBER
30, 2008 $(129) $5,379 $(1,630) $5,100
==========================================================================
BALANCE AT
JANUARY 1, 2009 $(309) $5,345 $(1,629) $7,152
Net income - 46 - 46
Other comprehensive
loss, net of tax (52) - - (52)
------
Total comprehensive
loss (6)
Cash dividends
declared on
preferred stock - (114) - (114)
Cash dividends
declared on
common stock
($0.15 per share) - (22) - (22)
Purchase of common
stock - - (1) (1)
Accretion of
discount on
preferred stock - (16) - -
Net issuance of
common stock
under employee
stock plans - (34) 43 (4)
Share-based
compensation - - - 25
Other - - 1 5
--------------------------------------------------------------------------
BALANCE AT SEPTEMBER
30, 2009 $(361) $5,205 $(1,586) $7,035
==========================================================================
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
==========================================================================
(dollar amounts in millions) Wealth &
Three Months Ended September Business Retail Institutional
30, 2009 Bank Bank Management
--------------------------------------------------------------------------
Earnings summary:
Net interest income (expense)
(FTE) $346 $127 $42
Provision for loan losses 252 42 20
Noninterest income 72 50 66
Noninterest expenses 160 154 73
Provision (benefit) for income
taxes (FTE) (16) (8) 5
Income from discontinued operations,
net of tax - - -
--------------------------------
Net income (loss) $22 $(11) $10
================================
Net credit-related charge-offs $195 $34 $10
Selected average balances:
Assets $34,822 $6,445 $4,856
Loans 34,116 5,904 4,760
Deposits 15,735 17,563 2,735
Liabilities 16,002 17,532 2,725
Attributed equity 3,464 629 373
Statistical data:
Return on average assets (a) 0.24% (0.24)% 0.80%
Return on average attributed
equity 2.45 (6.92) 10.40
Net interest margin (b) 4.01 2.87 3.48
Efficiency ratio 38.35 86.86 70.84
==========================================================================
==========================================================================
(dollar amounts in millions)
Three Months Ended September
30, 2009 Finance Other Total
--------------------------------------------------------------------------
Earnings summary:
Net interest income (expense)
(FTE) $(136) $8 $387
Provision for loan losses - (3) 311
Noninterest income 121 6 315
Noninterest expenses 3 9 399
Provision (benefit) for income
taxes (FTE) (11) 3 (27)
Income from discontinued operations,
net of tax - - -
--------------------------------
Net income (loss) $(7) $5 $19
================================
Net credit-related charge-offs $- $- $239
Selected average balances:
Assets $11,426 $4,399 $61,948
Loans 2 - 44,782
Deposits 3,969 38 40,040
Liabilities 18,361 263 54,883
Attributed equity 959 1,640 7,065
Statistical data:
Return on average assets (a) N/M N/M 0.12%
Return on average attributed
equity N/M N/M (1.27)
Net interest margin (b) N/M N/M 2.68
Efficiency ratio N/M N/M 67.14
==========================================================================
(a) Return on average assets is calculated based on the greater of average
assets or average liabilities and attributed equity.
(b) Net interest margin is calculated based on the greater of average
earning assets or average deposits and purchased funds.
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
==========================================================================
==========================================================================
Wealth &
Three Months Ended June 30, Business Retail Institutional
2009 Bank Bank Management
--------------------------------------------------------------------------
Earnings summary:
Net interest income (expense)
(FTE) $328 $128 $40
Provision for loan losses 252 42 13
Noninterest income 50 46 73
Noninterest expenses 157 167 77
Provision (benefit) for income
taxes (FTE) (36) (17) 8
Income from discontinued operations,
net of tax - - -
--------------------------------
Net income (loss) $5 $(18) $15
================================
Net credit-related charge-offs $211 $29 $8
Selected average balances:
Assets $37,521 $6,693 $4,965
Loans 36,760 6,115 4,776
Deposits 14,827 17,666 2,599
Liabilities 15,110 17,639 2,593
Attributed equity 3,353 648 373
Statistical data:
Return on average assets (a) 0.05% (0.40)% 1.21%
Return on average attributed
equity 0.58 (11.41) 16.11
Net interest margin (b) 3.58 2.90 3.29
Efficiency ratio 41.79 95.00 69.77
==========================================================================
==========================================================================
Three Months Ended June 30,
2009 Finance Other Total
--------------------------------------------------------------------------
Earnings summary:
Net interest income (expense)
(FTE) $(101) $9 $404
Provision for loan losses - 5 312
Noninterest income 124 5 298
Noninterest expenses 7 21 429
Provision (benefit) for income
taxes (FTE) 8 (20) (57)
Income from discontinued operations,
net of tax - - -
--------------------------------
Net income (loss) $8 $8 $18
================================
Net credit-related charge-offs $- $- $248
Selected average balances:
Assets $12,320 $2,757 $64,256
Loans 3 (6) 47,648
Deposits 5,669 22 40,783
Liabilities 21,484 277 57,103
Attributed equity 1,140 1,639 7,153
Statistical data:
Return on average assets (a) N/M N/M 0.11%
Return on average attributed
equity N/M N/M (1.25)
Net interest margin (b) N/M N/M 2.73
Efficiency ratio N/M N/M 72.75
==========================================================================
(a) Return on average assets is calculated based on the greater of average
assets or average liabilities and attributed equity.
(b) Net interest margin is calculated based on the greater of average
earning assets or average deposits and purchased funds.
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
==========================================================================
==========================================================================
Wealth &
Three Months Ended September Business Retail Institutional
30, 2008 Bank Bank Management
--------------------------------------------------------------------------
Earnings summary:
Net interest income (expense)
(FTE) $323 $142 $37
Provision for loan losses 135 33 7
Noninterest income 75 80 71
Noninterest expenses 175 161 180
Provision (benefit) for income
taxes (FTE) 23 7 (28)
Income from discontinued operations,
net of tax - - -
--------------------------------
Net income (loss) $65 $21 $(51)
================================
Net credit-related charge-offs $95 $17 $4
Selected average balances:
Assets $41,357 $7,046 $4,759
Loans 40,506 6,362 4,624
Deposits 14,933 16,596 2,351
Liabilities 15,633 16,583 2,359
Attributed equity 3,318 656 340
Statistical data:
Return on average assets (a) 0.64% 0.48% (4.29)%
Return on average attributed
equity 7.98 12.53 (60.04)
Net interest margin (b) 3.18 3.41 3.18
Efficiency ratio 43.92 82.39 N/M
==========================================================================
==========================================================================
Three Months Ended September
30, 2008 Finance Other Total
--------------------------------------------------------------------------
Earnings summary:
Net interest income (expense)
(FTE) $(26) $(9) $467
Provision for loan losses - (10) 165
Noninterest income 20 (6) 240
Noninterest expenses 3 (5) 514
Provision (benefit) for income
taxes (FTE) (7) 6 1
Income from discontinued operations,
net of tax - 1 1
--------------------------------
Net income (loss) $(2) $(5) $28
================================
Net credit-related charge-offs $- $- $116
Selected average balances:
Assets $10,096 $1,605 $64,863
Loans (3) 19 51,508
Deposits 5,588 445 39,913
Liabilities 24,359 854 59,788
Attributed equity 878 (117) 5,075
Statistical data:
Return on average assets (a) N/M N/M 0.18%
Return on average attributed
equity N/M N/M 2.25
Net interest margin (b) N/M N/M 3.11
Efficiency ratio N/M N/M 75.53
==========================================================================
(a) Return on average assets is calculated based on the greater of average
assets or average liabilities and attributed equity.
(b) Net interest margin is calculated based on the greater of average
earning assets or average deposits and purchased funds.
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
==========================================================================
MARKET SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
==========================================================================
(dollar amounts in
millions)
Three Months Ended
September 30, 2009 Midwest Western Texas Florida
--------------------------------------------------------------------------
Earnings summary:
Net interest income
(expense) (FTE) $209 $159 $77 $11
Provision for loan
losses 144 101 29 24
Noninterest income 107 33 22 3
Noninterest expenses 188 106 58 10
Provision (benefit)
for income taxes (FTE) (10) (8) 5 (8)
Income from
discontinued
operations,
net of tax - - - -
---------------------------------------------
Net income (loss) $(6) $(7) $7 $(12)
=============================================
Net credit-related
charge-offs $102 $95 $22 $9
Selected average
balances:
Assets $16,987 $14,114 $7,444 $1,673
Loans 16,387 13,923 7,221 1,674
Deposits 17,395 11,146 4,609 327
Liabilities 17,667 11,060 4,618 317
Attributed equity 1,577 1,393 722 180
Statistical data:
Return on average
assets (a) (0.14)% (0.20)% 0.39% (2.81)%
Return on average
attributed equity (1.74) (1.99) 4.01 (26.20)
Net interest
margin (b) 4.72 4.53 4.22 2.70
Efficiency ratio 59.58 54.96 59.18 70.34
==========================================================================
==========================================================================
(dollar amounts in
millions) Finance
Three Months Ended Other & Other
September 30, 2009 Markets International Businesses Total
--------------------------------------------------------------------------
Earnings summary:
Net interest income
(expense) (FTE) $39 $20 $(128) $387
Provision for loan
losses 10 6 (3) 311
Noninterest income 14 9 127 315
Noninterest expenses 17 8 12 399
Provision (benefit)
for income taxes (FTE) (3) 5 (8) (27)
Income from
discontinued
operations,
net of tax - - - -
---------------------------------------------
Net income (loss) $29 $10 $(2) $19
=============================================
Net credit-related
charge-offs $10 $1 $- $239
Selected average
balances:
Assets $3,997 $1,908 $15,825 $61,948
Loans 3,683 1,892 2 44,782
Deposits 1,696 860 4,007 40,040
Liabilities 1,748 849 18,624 54,883
Attributed equity 418 176 2,599 7,065
Statistical data:
Return on average
assets (a) 2.92% 1.94% N/M 0.12%
Return on average
attributed equity 27.91 21.01 N/M (1.27)
Net interest
margin (b) 4.24 4.08 N/M 2.68
Efficiency ratio 34.57 28.39 N/M 67.14
==========================================================================
(a) Return on average assets is calculated based on the greater of average
assets or average liabilities and attributed equity.
(b) Net interest margin is calculated based on the greater of average
earning assets or average deposits and purchased funds.
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
==========================================================================
==========================================================================
Three Months
Ended June 30,
2009 Midwest Western Texas Florida
--------------------------------------------------------------------------
Earnings summary:
Net interest income
(expense) (FTE) $200 $154 $73 $11
Provision for loan
losses 119 90 28 20
Noninterest income 92 32 21 3
Noninterest expenses 186 113 60 9
Provision (benefit)
for income taxes (FTE) (13) (10) 1 (7)
Income from
discontinued
operations,
net of tax - - - -
---------------------------------------------
Net income (loss) $- $(7) $5 $(8)
=============================================
Net credit-related
charge-offs $99 $70 $11 $23
Selected average
balances:
Assets $18,122 $14,901 $7,798 $1,820
Loans 17,427 14,684 7,547 1,820
Deposits 17,166 10,717 4,496 331
Liabilities 17,461 10,625 4,505 321
Attributed equity 1,568 1,358 694 182
Statistical data:
Return on average
assets (a) 0.01% (0.19)% 0.23% (1.78)%
Return on average
attributed equity 0.10 (2.13) 2.63 (17.76)
Net interest
margin (b) 4.56 4.20 3.88 2.44
Efficiency ratio 63.68 60.67 63.98 66.24
==========================================================================
==========================================================================
Three Months Finance
Ended June 30, Other & Other
2009 Markets International Businesses Total
--------------------------------------------------------------------------
Earnings summary:
Net interest income
(expense) (FTE) $41 $17 $(92) $404
Provision for loan
losses 43 7 5 312
Noninterest income 13 8 129 298
Noninterest expenses 25 8 28 429
Provision (benefit)
for income taxes (FTE) (20) 4 (12) (57)
Income from
discontinued
operations,
net of tax - - - -
---------------------------------------------
Net income (loss) $6 $6 $16 $18
=============================================
Net credit-related
charge-offs $42 $3 $- $248
Selected average
balances:
Assets $4,488 $2,050 $15,077 $64,256
Loans 4,157 2,016 (3) 47,648
Deposits 1,582 800 5,691 40,783
Liabilities 1,643 787 21,761 57,103
Attributed equity 415 157 2,779 7,153
Statistical data:
Return on average
assets (a) 0.53% 1.13% N/M 0.11%
Return on average
attributed equity 5.77 14.71 N/M (1.25)
Net interest
margin (b) 4.00 3.27 N/M 2.73
Efficiency ratio 48.44 30.99 N/M 72.75
==========================================================================
(a) Return on average assets is calculated based on the greater of average
assets or average liabilities and attributed equity.
(b) Net interest margin is calculated based on the greater of average
earning assets or average deposits and purchased funds.
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
==========================================================================
==========================================================================
Three Months Ended
September 30, 2008 Midwest Western Texas Florida
--------------------------------------------------------------------------
Earnings summary:
Net interest income
(expense) (FTE) $197 $169 $73 $12
Provision for loan
losses 52 82 18 7
Noninterest income 142 38 27 4
Noninterest expenses 205 112 61 10
Provision (benefit)
for income taxes (FTE) 31 4 8 -
Income from
discontinued
operations,
net of tax - - - -
---------------------------------------------
Net income (loss) $51 $9 $13 $(1)
=============================================
Net credit-related
charge-offs $44 $51 $9 $3
Selected average
balances:
Assets $19,752 $16,633 $7,945 $1,900
Loans 19,070 16,387 7,691 1,900
Deposits 15,857 11,730 3,956 262
Liabilities 16,475 11,698 3,973 258
Attributed equity 1,631 1,367 623 131
Statistical data:
Return on average
assets (a) 1.05% 0.21% 0.65% (0.24)%
Return on average
attributed equity 12.69 2.60 8.22 (3.46)
Net interest
margin (b) 4.09 4.10 3.76 2.54
Efficiency ratio 64.42 54.75 63.16 67.06
==========================================================================
==========================================================================
Finance
Three Months Ended Other & Other
September 30, 2008 Markets International Businesses Total
--------------------------------------------------------------------------
Earnings summary:
Net interest income
(expense) (FTE) $36 $15 $(35) $467
Provision for loan
losses 15 1 (10) 165
Noninterest income 7 8 14 240
Noninterest expenses 117 11 (2) 514
Provision (benefit)
for income taxes (FTE) (45) 4 (1) 1
Income from
discontinued
operations,
net of tax - - 1 1
---------------------------------------------
Net income (loss) $(44) $7 $(7) $28
=============================================
Net credit-related
charge-offs $9 $- $- $116
Selected average
balances:
Assets $4,561 $2,371 $11,701 $64,863
Loans 4,189 2,255 16 51,508
Deposits 1,299 776 6,033 39,913
Liabilities 1,396 775 25,213 59,788
Attributed equity 406 156 761 5,075
Statistical data:
Return on average
assets (a) (3.86)% 1.25% N/M 0.18%
Return on average
attributed equity (43.37) 18.99 N/M 2.25
Net interest
margin (b) 3.48 2.65 N/M 3.11
Efficiency ratio N/M 43.62 N/M 75.53
==========================================================================
(a) Return on average assets is calculated based on the greater of average
assets or average liabilities and attributed equity.
(b) Net interest margin is calculated based on the greater of average
earning assets or average deposits and purchased funds.
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
==========================================================================
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
Comerica Incorporated and Subsidiaries
==========================================================================
September June March December September
(dollar amounts in 30, 30, 31, 31, 30,
millions) 2009 2009 2009 2008 2008
--------------------------------------------------------------------------
Tier 1 capital(a)(b) $7,735 $7,774 $7,760 $7,805 $5,576
Less:
Fixed rate cumulative
perpetual preferred
stock 2,145 2,140 2,134 2,129 -
Trust preferred
securities 495 495 495 495 495
--------------------------------------------------------------------------
Tier 1 common
capital(b) $5,095 $5,139 $5,131 $5,181 $5,081
==========================================================================
Risk-weighted
assets(a)(b) $63,518 $67,124 $70,135 $73,207 $76,156
Tier 1 common
capital ratio(b) 8.02% 7.66% 7.32% 7.08% 6.67%
==========================================================================
Total shareholders'
equity $7,035 $7,093 $7,183 $7,152 $5,100
Less:
Fixed rate cumulative
perpetual preferred
stock 2,145 2,140 2,134 2,129 -
Goodwill 150 150 150 150 150
Other intangible
assets 8 10 11 12 12
--------------------------------------------------------------------------
Tangible common
equity $4,732 $4,793 $4,888 $4,861 $4,938
==========================================================================
Total assets $59,590 $63,630 $67,370 $67,548 $65,153
Less:
Goodwill 150 150 150 150 150
Other
intangible
assets 8 10 11 12 12
--------------------------------------------------------------------------
Tangible assets $59,432 $63,470 $67,209 $67,386 $64,991
==========================================================================
Tangible common
equity ratio 7.96% 7.55% 7.27% 7.21% 7.60%
==========================================================================
(a) Tier 1 capital and risk-weighted assets as defined by regulation.
(b) September 30, 2009 Tier 1 capital and risk-weighted assets are
estimated.
==========================================================================
SOURCE Comerica Incorporated
Photo: http://www.newscom.com/cgi-bin/prnh/20010807/CMALOGOSOURCE: Comerica Incorporated
Web site: http://www.comerica.com/
