DALLAS, Oct. 20 /PRNewswire-FirstCall/ -- Comerica Incorporated (NYSE: CMA) today reported third quarter 2010 net income of $59 million, compared to $70 million for the second quarter 2010. Third quarter 2010 included a total provision for credit losses of $116 million, compared to $126 million for the second quarter 2010.
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(dollar amounts in millions, except per share data) | 3rd Qtr '10 | 2nd Qtr '10 | 3rd Qtr '09 | |||||||
Net interest income | $ 404 | $ 422 | $ 385 | |||||||
Provision for loan losses | 122 | 126 | 311 | |||||||
Noninterest income | 186 | 194 | 315 | |||||||
Noninterest expenses | 402 | 397 | 399 | |||||||
Net income | 59 | 70 | 19 | |||||||
Net income (loss) attributable to common shares | 59 | 69 | (16) | |||||||
Diluted income (loss) per common share | 0.33 | 0.39 | (0.10) | |||||||
Tier 1 capital ratio | 9.97 | % | (a) | 10.64 | % | 12.21 | % | |||
Tangible common equity ratio (b) | 10.39 | 10.11 | 7.96 | |||||||
Net interest margin | 3.23 | 3.28 | 2.68 | |||||||
(a) September 30, 2010 ratio is estimated and excludes trust preferred securities, fully redeemed on October 1, 2010. | ||||||||||
(b) See Reconciliation of Non-GAAP Financial Measures. | ||||||||||
"In this sluggish and still uncertain economic environment, our customers have remained understandably cautious. This is reflected in the weak loan demand and continued strong core deposit levels," said Ralph W. Babb Jr., chairman and chief executive officer. "Our solid capital and liquidity position enabled us to fully redeem our trust preferred securities on October 1, which will reduce interest expense. This uniquely positions us as the only bank in our peer group to have redeemed TARP and eliminated trust preferred securities.
"Our third quarter financial results reflected the continued improvement in credit quality and careful control of expenses. Our skill-based, relationship-driven strategy and our prudent, conservative approach to banking continued to serve us well."
Third Quarter 2010 Highlights Compared to Second Quarter 2010
Net Interest Income and Net Interest Margin
(dollar amounts in millions) | 3rd Qtr '10 | 2nd Qtr '10 | 3rd Qtr '09 | ||||||||
Net interest income | $ 404 | $ 422 | $ 385 | ||||||||
Net interest margin | 3.23 | % | 3.28 | % | 2.68 | % | |||||
Selected average balances: | |||||||||||
Total earning assets | $ 50,189 | $ 51,835 | $ 57,513 | ||||||||
Total investment securities | 6,906 | 7,262 | 9,070 | ||||||||
Federal Reserve Bank deposits (excess liquidity) (a) | 2,983 | 3,719 | 3,492 | ||||||||
Total loans | 40,102 | 40,672 | 44,782 | ||||||||
Total core deposits (b) | 38,786 | 38,928 | 35,807 | ||||||||
Total noninterest-bearing deposits | 14,920 | 15,218 | 13,225 | ||||||||
(a) See Reconciliation of Non-GAAP Financial Measures. | |||||||||||
(b) Core deposits exclude other time deposits and foreign office time deposits. | |||||||||||
Noninterest Income
Noninterest income was $186 million for the third quarter 2010, compared to $194 million for the second quarter 2010. The $8 million decrease resulted primarily from decreases of $6 million in customer derivative income (included in "other noninterest income") and $2 million in foreign exchange income, partially offset by a $3 million increase in investment banking income (included in "other noninterest income").
Noninterest Expenses
Noninterest expenses were $402 million for the third quarter 2010, compared to $397 million for the second quarter 2010. The $5 million increase in noninterest expenses in the third quarter 2010, compared to the second quarter 2010, was primarily due to increases in salaries expense ($8 million) and employee benefits expense ($2 million), partially offset by a decrease in the provision for credit losses on lending-related commitments ($6 million). The increase in salaries expense reflected the impact of one additional day in the third quarter 2010 and included an increase in share-based compensation expense of $6 million as a result of third quarter 2010 stock grants. Full-time equivalent staff decreased by approximately 300 employees, or three percent, from September 30, 2009.
Credit Quality
"The continued improvement in credit quality is reflected by the decline in net charge-offs for the fifth consecutive quarter, as well as the $10 million decline in the provision for credit losses compared to the second quarter," Babb said. "The increase in inflows to nonaccrual loans primarily reflected commercial real estate, which we believe will continue to exhibit variability with a downward trend. Overall, credit migration has actually improved, as evidenced by the $480 million decline in the watch list, which is our best early indicator of future credit quality. Our early recognition of credit issues and our ability to quickly and proactively work through them remains one of our key strengths."
(dollar amounts in millions) | 3rd Qtr '10 | 2nd Qtr '10 | 3rd Qtr '09 | |||||||||
Net credit-related charge-offs | $ 132 | $ 146 | $ 239 | |||||||||
Net credit-related charge-offs/Average total loans | 1.32 | % | 1.44 | % | 2.14 | % | ||||||
Provision for loan losses | $ 122 | $ 126 | $ 311 | |||||||||
Provision for credit losses on lending-related commitments | (6) | - | 2 | |||||||||
Total provision for credit losses | 116 | 126 | 313 | |||||||||
Nonperforming loans | 1,191 | 1,121 | 1,196 | |||||||||
Nonperforming assets (NPAs) | 1,311 | 1,214 | 1,305 | |||||||||
NPAs/Total loans and foreclosed property | 3.24 | % | 2.98 | % | 2.99 | % | ||||||
Loans past due 90 days or more and still accruing | $ 104 | $ 115 | $ 161 | |||||||||
Allowance for loan losses | 957 | 967 | 953 | |||||||||
Allowance for credit losses on lending-related commitments (a) | 38 | 44 | 35 | |||||||||
Total allowance for credit losses | 995 | 1,011 | 988 | |||||||||
Allowance for loan losses/Total loans | 2.38 | % | 2.38 | % | 2.19 | % | ||||||
Allowance for loan losses/Nonperforming loans | 80 | 86 | 80 | |||||||||
(a) Included in "Accrued expenses and other liabilities" on the consolidated balance sheets. | ||||||||||||
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $55.0 billion and $5.9 billion, respectively, at September 30, 2010, compared to $55.9 billion and $5.8 billion, respectively, at June 30, 2010. There were approximately 176 million common shares outstanding at September 30, 2010.
On October 1, 2010 Comerica fully redeemed $500 million of trust preferred securities. Subsequent to the redemption, no additional trust preferred securities remained outstanding. As previously announced, Comerica will recognize a one-time, pre-tax charge of approximately $5 million in the fourth quarter 2010, reflecting accelerated accretion of the remaining trust preferred original issuance discount. The $500 million of trust preferred securities outstanding at September 30, 2010 were excluded from Tier 1 and total capital in the computation of estimated risk-based capital ratios as of September 30, 2010.
Comerica's tangible common equity ratio was 10.39 percent at September 30, 2010, an increase of 28 basis points from June 30, 2010. The estimated Tier 1 common ratio increased 16 basis points, to 9.97 percent at September 30, 2010, from June 30, 2010. The estimated Tier 1 capital ratio was 9.97 percent at September 30, 2010, compared to 10.64 percent at June 30, 2010. The decrease in the Tier 1 capital ratio reflected the redemption of the trust preferred securities, which accounted for 83 basis points in the June 30, 2010 Tier 1 capital ratio.
Fourth Quarter 2010 Outlook
For the fourth quarter 2010, management expects:
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, 2010 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2010 results compared to second quarter 2010.
The following table presents net income (loss) by business segment.
(dollar amounts in millions) | 3rd Qtr '10 | 2nd Qtr '10 | 3rd Qtr '09 | |||||
Business Bank | $ 133 | $ 135 | $ 22 | |||||
Retail Bank | (7) | (3) | (11) | |||||
Wealth & Institutional Management | (10) | 5 | 10 | |||||
116 | 137 | 21 | ||||||
Finance | (58) | (57) | (7) | |||||
Other (a) | 1 | (10) | 5 | |||||
Total | $ 59 | $ 70 | $ 19 | |||||
(a) Includes discontinued operations and items not directly associated with the three major business segments or the Finance Division. | ||||||||
Business Bank
(dollar amounts in millions) | 3rd Qtr '10 | 2nd Qtr '10 | 3rd Qtr '09 | |||||
Net interest income (FTE) | $ 336 | $ 351 | $ 346 | |||||
Provision for loan losses | 57 | 83 | 252 | |||||
Noninterest income | 69 | 78 | 72 | |||||
Noninterest expenses | 155 | 157 | 160 | |||||
Net income | 133 | 135 | 22 | |||||
Net credit-related charge-offs | 99 | 113 | 195 | |||||
Selected average balances: | ||||||||
Assets | 30,309 | 30,609 | 34,822 | |||||
Loans | 29,940 | 30,353 | 34,116 | |||||
Deposits | 19,266 | 19,069 | 15,735 | |||||
Net interest margin | 4.45 | % | 4.63 | % | 4.01 | % | ||
Retail Bank
(dollar amounts in millions) | 3rd Qtr '10 | 2nd Qtr '10 | 3rd Qtr '09 | |||||
Earnings summary: | ||||||||
Net interest income (FTE) | $ 133 | $ 134 | $ 127 | |||||
Provision for loan losses | 24 | 20 | 42 | |||||
Noninterest income | 45 | 42 | 50 | |||||
Noninterest expenses | 165 | 160 | 154 | |||||
Net loss | (7) | (3) | (11) | |||||
Net credit-related charge-offs | 19 | 22 | 34 | |||||
Selected average balances: | ||||||||
Assets | 5,777 | 5,937 | 6,445 | |||||
Loans | 5,314 | 5,446 | 5,904 | |||||
Deposits | 16,972 | 16,930 | 17,563 | |||||
Net interest margin | 3.10 | % | 3.17 | % | 2.87 | % | ||
Wealth and Institutional Management
(dollar amounts in millions) | 3rd Qtr '10 | 2nd Qtr '10 | 3rd Qtr '09 | |||||
Earnings summary: | ||||||||
Net interest income (FTE) | $ 41 | $ 45 | $ 42 | |||||
Provision for loan losses | 37 | 19 | 20 | |||||
Noninterest income | 59 | 61 | 66 | |||||
Noninterest expenses | 78 | 79 | 73 | |||||
Net income | (10) | 5 | 10 | |||||
Net credit-related charge-offs | 14 | 11 | 10 | |||||
Selected average balances: | ||||||||
Assets | 4,855 | 4,903 | 4,856 | |||||
Loans | 4,824 | 4,840 | 4,760 | |||||
Deposits | 2,606 | 2,924 | 2,735 | |||||
Net interest margin | 3.42 | % | 3.73 | % | 3.48 | % | ||
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, 2010 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2010 results compared to second quarter 2010.
The following table presents net income (loss) by market segment.
(dollar amounts in millions) | 3rd Qtr '10 | 2nd Qtr '10 | 3rd Qtr '09 | |||
Midwest | $ 48 | $ 60 | $ (10) | |||
Western | 14 | 39 | (7) | |||
Texas | 14 | 26 | 7 | |||
Florida | (6) | (9) | (12) | |||
Other Markets | 33 | 5 | 33 | |||
International | 13 | 16 | 10 | |||
116 | 137 | 21 | ||||
Finance & Other Businesses (a) | (57) | (67) | (2) | |||
Total | $ 59 | $ 70 | $ 19 | |||
(a) Includes discontinued operations and items not directly associated with the geographic markets. | ||||||
Midwest Market
(dollar amounts in millions) | 3rd Qtr '10 | 2nd Qtr '10 | 3rd Qtr '09 | |||||
Net interest income (FTE) | $ 200 | $ 210 | $ 207 | |||||
Provision for loan losses | 38 | 34 | 148 | |||||
Noninterest income | 99 | 97 | 107 | |||||
Noninterest expenses | 186 | 181 | 188 | |||||
Net income (loss) | 48 | 60 | (10) | |||||
Net credit-related charge-offs | 61 | 44 | 102 | |||||
Selected average balances: | ||||||||
Assets | 14,445 | 14,626 | 16,623 | |||||
Loans | 14,276 | 14,592 | 16,020 | |||||
Deposits | 17,777 | 17,988 | 17,384 | |||||
Net interest margin | 4.45 | % | 4.66 | % | 4.69 | % | ||
Western Market
(dollar amounts in millions) | 3rd Qtr '10 | 2nd Qtr '10 | 3rd Qtr '09 | |||||
Net interest income (FTE) | $ 157 | $ 164 | $ 159 | |||||
Provision for loan losses | 51 | 27 | 101 | |||||
Noninterest income | 31 | 33 | 33 | |||||
Noninterest expenses | 107 | 110 | 106 | |||||
Net income (loss) | 14 | 39 | (7) | |||||
Net credit-related charge-offs | 58 | 47 | 95 | |||||
Selected average balances: | ||||||||
Assets | 12,746 | 13,006 | 14,114 | |||||
Loans | 12,556 | 12,792 | 13,923 | |||||
Deposits | 11,793 | 11,951 | 11,146 | |||||
Net interest margin | 4.96 | % | 5.13 | % | 4.53 | % | ||
Texas Market
(dollar amounts in millions) | 3rd Qtr '10 | 2nd Qtr '10 | 3rd Qtr '09 | |||||
Net interest income (FTE) | $ 78 | $ 81 | $ 77 | |||||
Provision for loan losses | 17 | (1) | 29 | |||||
Noninterest income | 21 | 23 | 22 | |||||
Noninterest expenses | 61 | 65 | 58 | |||||
Net income | 14 | 26 | 7 | |||||
Total net credit-related charge-offs | 5 | 8 | 22 | |||||
Selected average balances: | ||||||||
Assets | 6,556 | 6,652 | 7,444 | |||||
Loans | 6,357 | 6,428 | 7,221 | |||||
Deposits | 5,443 | 5,316 | 4,609 | |||||
Net interest margin | 4.87 | % | 5.05 | % | 4.22 | % | ||
Florida Market
(dollar amounts in millions) | 3rd Qtr '10 | 2nd Qtr '10 | 3rd Qtr '09 | |||||
Net interest income (FTE) | $ 10 | $ 12 | $ 11 | |||||
Provision for loan losses | 10 | 17 | 24 | |||||
Noninterest income | 4 | 4 | 3 | |||||
Noninterest expenses | 13 | 12 | 10 | |||||
Net income (loss) | (6) | (9) | (12) | |||||
Net credit-related charge-offs | 6 | 7 | 9 | |||||
Selected average balances: | ||||||||
Assets | 1,528 | 1,576 | 1,673 | |||||
Loans | 1,549 | 1,575 | 1,674 | |||||
Deposits | 364 | 404 | 327 | |||||
Net interest margin | 2.61 | % | 2.94 | % | 2.70 | % | ||
Conference Call and Webcast
Comerica will host a conference call to review third quarter 2010 financial results at 7 a.m. CT Wednesday, October 20, 2010. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 11806039). 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, 2010. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 11806039). 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 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, the effects of recently enacted legislation, actions taken by or proposed 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, legislation or regulations enacted in the future, and the impact and expiration of such legislation and regulatory actions, 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. In particular, please refer to "Item 1A. Risk Factors" beginning on page 11 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2009, "Item 1A. Risk Factors" beginning on page 67 of Comerica's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 and "Item 1A. Risk Factors" beginning on page 71 of Comerica's Quarterly Report on Form 10-Q for the quarter ended June 30, 2010. Forward-looking statements speak only as of the date they are made. Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this news release or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) | |||||||||||||
Comerica Incorporated and Subsidiaries | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September | June | September | September 30, | ||||||||||
(in millions, except per share data) | 2010 | 2010 | 2009 | 2010 | 2009 | ||||||||
PER COMMON SHARE AND COMMON STOCK DATA | |||||||||||||
Diluted net income (loss) | $ 0.33 | $ 0.39 | $ (0.10) | $ 0.34 | $ (0.37) | ||||||||
Cash dividends declared | 0.05 | 0.05 | 0.05 | 0.15 | 0.15 | ||||||||
Common shareholders' equity (at period end) | 33.19 | 32.85 | 32.36 | ||||||||||
Average diluted shares (in thousands) | 177,686 | 178,432 | 149,431 | 171,260 | 149,367 | ||||||||
KEY RATIOS | |||||||||||||
Return on average common shareholders' equity | 4.07 | % | 4.89 | % | (1.27) | % | 1.40 | % | (1.48) | % | |||
Return on average assets | 0.43 | 0.50 | 0.12 | 0.43 | 0.09 | ||||||||
Tier 1 common capital ratio (a) (b) | 9.97 | 9.81 | 8.04 | ||||||||||
Tier 1 risk-based capital ratio (b) | 9.97 | 10.64 | 12.21 | ||||||||||
Total risk-based capital ratio (b) | 14.38 | 15.03 | 16.79 | ||||||||||
Leverage ratio (b) | 10.90 | 11.36 | 12.46 | ||||||||||
Tangible common equity ratio (a) | 10.39 | 10.11 | 7.96 | ||||||||||
AVERAGE BALANCES | |||||||||||||
Commercial loans | $ 20,967 | $ 20,910 | $ 23,401 | $ 20,963 | $ 25,399 | ||||||||
Real estate construction loans | 2,625 | 2,987 | 4,033 | 2,997 | 4,287 | ||||||||
Commercial mortgage loans | 10,257 | 10,372 | 10,359 | 10,338 | 10,422 | ||||||||
Residential mortgage loans | 1,590 | 1,607 | 1,720 | 1,610 | 1,787 | ||||||||
Consumer loans | 2,421 | 2,448 | 2,550 | 2,450 | 2,565 | ||||||||
Lease financing | 1,064 | 1,108 | 1,218 | 1,100 | 1,248 | ||||||||
International loans | 1,178 | 1,240 | 1,501 | 1,233 | 1,603 | ||||||||
Total loans | 40,102 | 40,672 | 44,782 | 40,691 | 47,311 | ||||||||
Earning assets | 50,189 | 51,835 | 57,513 | 51,645 | 59,580 | ||||||||
Total assets | 54,729 | 56,258 | 61,948 | 56,158 | 64,296 | ||||||||
Noninterest-bearing deposits | 14,920 | 15,218 | 13,225 | 14,922 | 12,385 | ||||||||
Interest-bearing core deposits | 23,866 | 23,710 | 22,582 | 23,400 | 22,476 | ||||||||
Total core deposits | 38,786 | 38,928 | 35,807 | 38,322 | 34,861 | ||||||||
Common shareholders' equity | 5,842 | 5,708 | 4,923 | 5,543 | 4,987 | ||||||||
Total shareholders' equity | 5,842 | 5,708 | 7,065 | 6,134 | 7,124 | ||||||||
NET INTEREST INCOME | |||||||||||||
Net interest income (fully taxable equivalent basis) | $ 405 | $ 424 | $ 387 | $ 1,245 | $ 1,177 | ||||||||
Fully taxable equivalent adjustment | 1 | 2 | 2 | 4 | 6 | ||||||||
Net interest margin | 3.23 | % | 3.28 | % | 2.68 | % | 3.23 | % | 2.65 | % | |||
CREDIT QUALITY | |||||||||||||
Nonaccrual loans | $ 1,163 | $ 1,098 | $ 1,194 | ||||||||||
Reduced-rate loans | 28 | 23 | 2 | ||||||||||
Total nonperforming loans | 1,191 | 1,121 | 1,196 | ||||||||||
Foreclosed property | 120 | 93 | 109 | ||||||||||
Total nonperforming assets | 1,311 | 1,214 | 1,305 | ||||||||||
Loans past due 90 days or more and still accruing | 104 | 115 | 161 | ||||||||||
Gross loan charge-offs | 145 | 158 | 245 | $ 487 | $ 663 | ||||||||
Loan recoveries | 13 | 12 | 6 | 36 | 19 | ||||||||
Net loan charge-offs | 132 | 146 | 239 | 451 | 644 | ||||||||
Lending-related commitment charge-offs | - | - | - | - | - | ||||||||
Total net credit-related charge-offs | 132 | 146 | 239 | 451 | 644 | ||||||||
Allowance for loan losses | 957 | 967 | 953 | ||||||||||
Allowance for credit losses on lending-related commitments | 38 | 44 | 35 | ||||||||||
Total allowance for credit losses | 995 | 1,011 | 988 | ||||||||||
Allowance for loan losses as a percentage of total loans | 2.38 | % | 2.38 | % | 2.19 | % | |||||||
Net loan charge-offs as a percentage of average total loans | 1.32 | 1.44 | 2.14 | 1.48 | % | 1.82 | % | ||||||
Net credit-related charge-offs as a percentage of average total loans | 1.32 | 1.44 | 2.14 | 1.48 | 1.82 | ||||||||
Nonperforming assets as a percentage of total loans and foreclosed property | 3.24 | 2.98 | 2.99 | ||||||||||
Allowance for loan losses as a percentage of total nonperforming loans | 80 | 86 | 80 | ||||||||||
(a) See Reconciliation of Non-GAAP Financial Measures. | |||||||||||||
(b) September 30, 2010 ratios are estimated. | |||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||
Comerica Incorporated and Subsidiaries | ||||||
(in millions, except share data) | September | June | December | September | ||
(unaudited) | (unaudited) | (unaudited) | ||||
ASSETS | ||||||
Cash and due from banks | $ 863 | $ 816 | $ 774 | $ 799 | ||
Federal funds sold and securities purchased under agreements to resell | 100 | - | - | - | ||
Interest-bearing deposits with banks | 3,031 | 3,409 | 4,843 | 2,219 | ||
Other short-term investments | 115 | 134 | 138 | 142 | ||
Investment securities available-for-sale | 6,816 | 7,188 | 7,416 | 8,882 | ||
Commercial loans | 21,432 | 21,151 | 21,690 | 22,546 | ||
Real estate construction loans | 2,444 | 2,774 | 3,461 | 3,870 | ||
Commercial mortgage loans | 10,180 | 10,318 | 10,457 | 10,380 | ||
Residential mortgage loans | 1,586 | 1,606 | 1,651 | 1,679 | ||
Consumer loans | 2,403 | 2,443 | 2,511 | 2,544 | ||
Lease financing | 1,053 | 1,084 | 1,139 | 1,197 | ||
International loans | 1,182 | 1,226 | 1,252 | 1,355 | ||
Total loans | 40,280 | 40,602 | 42,161 | 43,571 | ||
Less allowance for loan losses | (957) | (967) | (985) | (953) | ||
Net loans | 39,323 | 39,635 | 41,176 | 42,618 | ||
Premises and equipment | 639 | 634 | 644 | 657 | ||
Customers' liability on acceptances outstanding | 13 | 24 | 11 | 12 | ||
Accrued income and other assets | 4,104 | 4,045 | 4,247 | 4,261 | ||
Total assets | $ 55,004 | $ 55,885 | $ 59,249 | $ 59,590 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Noninterest-bearing deposits | $ 15,763 | $ 15,769 | $ 15,871 | $ 13,888 | ||
Money market and NOW deposits | 17,288 | 16,062 | 14,450 | 13,556 | ||
Savings deposits | 1,363 | 1,407 | 1,342 | 1,331 | ||
Customer certificates of deposit | 5,723 | 5,893 | 6,413 | 7,466 | ||
Other time deposits | - | 165 | 1,047 | 2,801 | ||
Foreign office time deposits | 494 | 484 | 542 | 572 | ||
Total interest-bearing deposits | 24,868 | 24,011 | 23,794 | 25,726 | ||
Total deposits | 40,631 | 39,780 | 39,665 | 39,614 | ||
Short-term borrowings | 179 | 200 | 462 | 425 | ||
Acceptances outstanding | 13 | 24 | 11 | 12 | ||
Accrued expenses and other liabilities | 1,085 | 1,048 | 1,022 | 1,252 | ||
Medium- and long-term debt | 7,239 | 9,041 | 11,060 | 11,252 | ||
Total liabilities | 49,147 | 50,093 | 52,220 | 52,555 | ||
Fixed rate cumulative perpetual preferred stock, series F, no par value, $1,000 liquidation value per share: | ||||||
Authorized - 2,250,000 shares at 12/31/09 and 9/30/09 | ||||||
Issued - 2,250,000 shares at 12/31/09 and 9/30/09 | - | - | 2,151 | 2,145 | ||
Common stock - $5 par value: | ||||||
Authorized - 325,000,000 shares | ||||||
Issued - 203,878,110 shares at 9/30/10 and 6/30/10, 178,735,252 shares at 12/31/09 and 9/30/09 | 1,019 | 1,019 | 894 | 894 | ||
Capital surplus | 1,473 | 1,467 | 740 | 738 | ||
Accumulated other comprehensive loss | (238) | (240) | (336) | (361) | ||
Retained earnings | 5,171 | 5,124 | 5,161 | 5,205 | ||
Less cost of common stock in treasury - 27,394,831 shares at 9/30/10, 27,561,412 shares at 6/30/10, 27,555,623 shares at 12/31/09 and 27,620,576 shares at 9/30/09 | (1,568) | (1,578) | (1,581) | (1,586) | ||
Total shareholders' equity | 5,857 | 5,792 | 7,029 | 7,035 | ||
Total liabilities and shareholders' equity | $ 55,004 | $ 55,885 | $ 59,249 | $ 59,590 | ||
CONSOLIDATED STATEMENTS OF INCOME (unaudited) | ||||||
Comerica Incorporated and Subsidiaries | ||||||
Three Months Ended | Nine Months Ended | |||||
September 30, | September 30, | |||||
(in millions, except per share data) | 2010 | 2009 | 2010 | 2009 | ||
INTEREST INCOME | ||||||
Interest and fees on loans | $ 399 | $ 444 | $ 1,223 | $ 1,343 | ||
Interest on investment securities | 55 | 64 | 177 | 276 | ||
Interest on short-term investments | 2 | 3 | 8 | 7 | ||
Total interest income | 456 | 511 | 1,408 | 1,626 | ||
INTEREST EXPENSE | ||||||
Interest on deposits | 27 | 89 | 91 | 320 | ||
Interest on short-term borrowings | - | - | - | 2 | ||
Interest on medium- and long-term debt | 25 | 37 | 76 | 133 | ||
Total interest expense | 52 | 126 | 167 | 455 | ||
Net interest income | 404 | 385 | 1,241 | 1,171 | ||
Provision for loan losses | 122 | 311 | 423 | 826 | ||
Net interest income after provision for loan losses | 282 | 74 | 818 | 345 | ||
NONINTEREST INCOME | ||||||
Service charges on deposit accounts | 51 | 59 | 159 | 172 | ||
Fiduciary income | 38 | 40 | 115 | 123 | ||
Commercial lending fees | 22 | 21 | 66 | 58 | ||
Letter of credit fees | 19 | 18 | 56 | 50 | ||
Card fees | 15 | 13 | 43 | 37 | ||
Foreign exchange income | 8 | 10 | 28 | 30 | ||
Bank-owned life insurance | 9 | 8 | 26 | 26 | ||
Brokerage fees | 6 | 7 | 18 | 24 | ||
Net securities gains | - | 107 | 3 | 233 | ||
Other noninterest income | 18 | 32 | 60 | 83 | ||
Total noninterest income | 186 | 315 | 574 | 836 | ||
NONINTEREST EXPENSES | ||||||
Salaries | 187 | 171 | 535 | 513 | ||
Employee benefits | 47 | 51 | 136 | 159 | ||
Total salaries and employee benefits | 234 | 222 | 671 | 672 | ||
Net occupancy expense | 40 | 40 | 120 | 119 | ||
Equipment expense | 15 | 15 | 47 | 46 | ||
Outside processing fee expense | 23 | 24 | 69 | 74 | ||
Software expense | 22 | 21 | 66 | 61 | ||
FDIC insurance expense | 14 | 15 | 47 | 75 | ||
Legal fees | 9 | 8 | 26 | 25 | ||
Other real estate expense | 7 | 10 | 24 | 26 | ||
Litigation and operational losses | 2 | 3 | 5 | 7 | ||
Provision for credit losses on lending-related commitments | (6) | 2 | 1 | (3) | ||
Other noninterest expenses | 42 | 39 | 127 | 123 | ||
Total noninterest expenses | 402 | 399 | 1,203 | 1,225 | ||
Income (loss) from continuing operations before income taxes | 66 | (10) | 189 | (44) | ||
Provision (benefit) for income taxes | 7 | (29) | 25 | (89) | ||
Income from continuing operations | 59 | 19 | 164 | 45 | ||
Income from discontinued operations, net of tax | - | - | 17 | 1 | ||
NET INCOME | 59 | 19 | 181 | 46 | ||
Less: | ||||||
Preferred stock dividends | - | 34 | 123 | 101 | ||
Income allocated to participating securities | - | 1 | - | 1 | ||
Net income (loss) attributable to common shares | $ 59 | $ (16) | $ 58 | $ (56) | ||
Basic earnings per common share: | ||||||
Income (loss) from continuing operations | $ 0.34 | $ (0.10) | $ 0.24 | $ (0.38) | ||
Net income (loss) | 0.34 | (0.10) | 0.34 | (0.37) | ||
Diluted earnings per common share: | ||||||
Income (loss) from continuing operations | 0.33 | (0.10) | 0.24 | (0.38) | ||
Net income (loss) | 0.33 | (0.10) | 0.34 | (0.37) | ||
Cash dividends declared on common stock | 9 | 7 | 26 | 22 | ||
Cash dividends declared per common share | 0.05 | 0.05 | 0.15 | 0.15 | ||
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (unaudited) | ||||||||||||||
Comerica Incorporated and Subsidiaries | ||||||||||||||
Third | Second | First | Fourth | Third | Third Quarter 2010 Compared To: | |||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Second Quarter | Third Quarter | ||||||||
(in millions, except per share data) | 2010 | 2010 | 2010 | 2009 | 2009 | Amount | Percent | Amount | Percent | |||||
INTEREST INCOME | ||||||||||||||
Interest and fees on loans | $ 399 | $ 412 | $ 412 | $ 424 | $ 444 | $ (13) | (3) | % | $ (45) | (10) | % | |||
Interest on investment securities | 55 | 61 | 61 | 53 | 64 | (6) | (10) | (9) | (15) | |||||
Interest on short-term investments | 2 | 3 | 3 | 2 | 3 | (1) | (17) | (1) | (13) | |||||
Total interest income | 456 | 476 | 476 | 479 | 511 | (20) | (4) | (55) | (11) | |||||
INTEREST EXPENSE | ||||||||||||||
Interest on deposits | 27 | 29 | 35 | 52 | 89 | (2) | (8) | (62) | (70) | |||||
Interest on short-term borrowings | - | - | - | - | - | - | 9 | - | 29 | |||||
Interest on medium- and long-term debt | 25 | 25 | 26 | 31 | 37 | - | 1 | (12) | (32) | |||||
Total interest expense | 52 | 54 | 61 | 83 | 126 | (2) | (4) | (74) | (59) | |||||
Net interest income | 404 | 422 | 415 | 396 | 385 | (18) | (4) | 19 | 5 | |||||
Provision for loan losses | 122 | 126 | 175 | 256 | 311 | (4) | (3) | (189) | (61) | |||||
Net interest income after provision for loan losses | 282 | 296 | 240 | 140 | 74 | (14) | (4) | 208 | N/M | |||||
NONINTEREST INCOME | ||||||||||||||
Service charges on deposit accounts | 51 | 52 | 56 | 56 | 59 | (1) | (1) | (8) | (13) | |||||
Fiduciary income | 38 | 38 | 39 | 38 | 40 | - | (2) | (2) | (4) | |||||
Commercial lending fees | 22 | 22 | 22 | 21 | 21 | - | (2) | 1 | 5 | |||||
Letter of credit fees | 19 | 19 | 18 | 19 | 18 | - | 3 | 1 | 7 | |||||
Card fees | 15 | 15 | 13 | 14 | 13 | - | - | 2 | 13 | |||||
Foreign exchange income | 8 | 10 | 10 | 11 | 10 | (2) | (16) | (2) | (19) | |||||
Bank-owned life insurance | 9 | 9 | 8 | 9 | 8 | - | 6 | 1 | 7 | |||||
Brokerage fees | 6 | 6 | 6 | 7 | 7 | - | (4) | (1) | (19) | |||||
Net securities gains | - | 1 | 2 | 10 | 107 | (1) | N/M | (107) | N/M | |||||
Other noninterest income | 18 | 22 | 20 | 29 | 32 | (4) | (15) | (14) | (41) | |||||
Total noninterest income | 186 | 194 | 194 | 214 | 315 | (8) | (4) | (129) | (41) | |||||
NONINTEREST EXPENSES | ||||||||||||||
Salaries | 187 | 179 | 169 | 174 | 171 | 8 | 4 | 16 | 9 | |||||
Employee benefits | 47 | 45 | 44 | 51 | 51 | 2 | 3 | (4) | (7) | |||||
Total salaries and employee benefits | 234 | 224 | 213 | 225 | 222 | 10 | 4 | 12 | 5 | |||||
Net occupancy expense | 40 | 39 | 41 | 43 | 40 | 1 | 2 | - | (1) | |||||
Equipment expense | 15 | 15 | 17 | 16 | 15 | - | - | - | 1 | |||||
Outside processing fee expense | 23 | 23 | 23 | 23 | 24 | - | - | (1) | (4) | |||||
Software expense | 22 | 22 | 22 | 23 | 21 | - | 1 | 1 | 4 | |||||
FDIC insurance expense | 14 | 16 | 17 | 15 | 15 | (2) | (13) | (1) | (5) | |||||
Legal fees | 9 | 9 | 8 | 12 | 8 | - | 4 | 1 | 7 | |||||
Other real estate expense | 7 | 5 | 12 | 22 | 10 | 2 | 47 | (3) | (28) | |||||
Litigation and operational losses | 2 | 2 | 1 | 3 | 3 | - | 48 | (1) | (24) | |||||
Provision for credit losses on lending-related commitments | (6) | - | 7 | 3 | 2 | (6) | N/M | (8) | N/M | |||||
Other noninterest expenses | 42 | 42 | 43 | 40 | 39 | - | (1) | 3 | 10 | |||||
Total noninterest expenses | 402 | 397 | 404 | 425 | 399 | 5 | 1 | 3 | 1 | |||||
Income (loss) from continuing operations before income taxes | 66 | 93 | 30 | (71) | (10) | (27) | (28) | 76 | N/M | |||||
Provision (benefit) for income taxes | 7 | 23 | (5) | (42) | (29) | (16) | (68) | 36 | N/M | |||||
Income (loss) from continuing operations | 59 | 70 | 35 | (29) | 19 | (11) | (15) | 40 | N/M | |||||
Income from discontinued operations, net of tax | - | - | 17 | - | - | - | N/M | - | N/M | |||||
NET INCOME (LOSS) | 59 | 70 | 52 | (29) | 19 | (11) | (15) | 40 | N/M | |||||
Less: | ||||||||||||||
Preferred stock dividends | - | - | 123 | 33 | 34 | - | - | (34) | N/M | |||||
Income allocated to participating securities | - | 1 | - | - | 1 | (1) | N/M | (1) | N/M | |||||
Net income (loss) attributable to common shares | $ 59 | $ 69 | $ (71) | $ (62) | $ (16) | $ (10) | (15) | % | $ 75 | N/M | % | |||
Basic earnings per common share: | ||||||||||||||
Income (loss) from continuing operations | $ 0.34 | $ 0.40 | $ (0.57) | $ (0.42) | $ (0.10) | $ (0.06) | (15) | % | $ 0.44 | N/M | % | |||
Net income (loss) | 0.34 | 0.40 | (0.46) | (0.42) | (0.10) | (0.06) | (15) | 0.44 | N/M | |||||
Diluted earnings per common share: | ||||||||||||||
Income (loss) from continuing operations | 0.33 | 0.39 | (0.57) | (0.42) | (0.10) | (0.06) | (15) | 0.43 | N/M | |||||
Net income (loss) | 0.33 | 0.39 | (0.46) | (0.42) | (0.10) | (0.06) | (15) | 0.43 | N/M | |||||
Cash dividends declared on common stock | 9 | 8 | 9 | 8 | 7 | 1 | 1 | 2 | 19 | |||||
Cash dividends declared per common share | 0.05 | 0.05 | 0.05 | 0.05 | 0.05 | - | - | - | - | |||||
N/M - Not meaningful | ||||||||||||||
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited) | |||||||||||
Comerica Incorporated and Subsidiaries | |||||||||||
2010 | 2009 | ||||||||||
(in millions) | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | ||||||
Balance at beginning of period | $ 967 | $ 987 | $ 985 | $ 953 | $ 880 | ||||||
Loan charge-offs: | |||||||||||
Commercial | 38 | 65 | 49 | 113 | 113 | ||||||
Real estate construction: | |||||||||||
Commercial Real Estate business line (a) | 40 | 30 | 71 | 33 | 63 | ||||||
Other business lines (b) | 1 | - | 3 | - | 1 | ||||||
Total real estate construction | 41 | 30 | 74 | 33 | 64 | ||||||
Commercial mortgage: | |||||||||||
Commercial Real Estate business line (a) | 16 | 12 | 16 | 27 | 24 | ||||||
Other business lines (b) | 40 | 36 | 28 | 25 | 15 | ||||||
Total commercial mortgage | 56 | 48 | 44 | 52 | 39 | ||||||
Residential mortgage | 2 | 5 | 2 | 6 | 11 | ||||||
Consumer | 7 | 9 | 8 | 9 | 7 | ||||||
Lease financing | - | 1 | - | 6 | 6 | ||||||
International | 1 | - | 7 | 13 | 5 | ||||||
Total loan charge-offs | 145 | 158 | 184 | 232 | 245 | ||||||
Recoveries on loans previously charged-off: | |||||||||||
Commercial | 7 | 4 | 7 | 7 | 3 | ||||||
Real estate construction | 1 | 6 | 1 | - | 1 | ||||||
Commercial mortgage | 2 | 1 | 3 | 1 | - | ||||||
Residential mortgage | - | - | - | - | - | ||||||
Consumer | 1 | 1 | - | - | 1 | ||||||
Lease financing | 1 | - | - | - | - | ||||||
International | 1 | - | - | - | 1 | ||||||
Total recoveries | 13 | 12 | 11 | 8 | 6 | ||||||
Net loan charge-offs | 132 | 146 | 173 | 224 | 239 | ||||||
Provision for loan losses | 122 | 126 | 175 | 256 | 311 | ||||||
Foreign currency translation adjustment | - | - | - | - | 1 | ||||||
Balance at end of period | $ 957 | $ 967 | $ 987 | $ 985 | $ 953 | ||||||
Allowance for loan losses as a percentage of total loans | 2.38 | % | 2.38 | % | 2.42 | % | 2.34 | % | 2.19 | % | |
Net loan charge-offs as a percentage of average total loans | 1.32 | 1.44 | 1.68 | 2.09 | 2.14 | ||||||
Net credit-related charge-offs as a percentage of average total loans | 1.32 | 1.44 | 1.68 | 2.10 | 2.14 | ||||||
(a) Primarily charge-offs of loans to real estate investors and developers. | |||||||||||
(b) Primarily charge-offs of loans secured by owner-occupied real estate. | |||||||||||
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited) | ||||||||||
Comerica Incorporated and Subsidiaries | ||||||||||
2010 | 2009 | |||||||||
(in millions) | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |||||
Balance at beginning of period | $ 44 | $ 44 | $ 37 | $ 35 | $ 33 | |||||
Less: Charge-offs on lending-related commitments (a) | - | - | - | 1 | - | |||||
Add: Provision for credit losses on lending-related commitments | (6) | - | 7 | 3 | 2 | |||||
Balance at end of period | $ 38 | $ 44 | $ 44 | $ 37 | $ 35 | |||||
Unfunded lending-related commitments sold | $ - | $ 2 | $ - | $ 3 | $ 1 | |||||
(a) Charge-offs result from the sale of unfunded lending-related commitments. | ||||||||||
NONPERFORMING ASSETS (unaudited) | ||||||||||||
Comerica Incorporated and Subsidiaries | ||||||||||||
2010 | 2009 | |||||||||||
(in millions) | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |||||||
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS | ||||||||||||
Nonaccrual loans: | ||||||||||||
Commercial | $ 258 | $ 239 | $ 209 | $ 238 | $ 290 | |||||||
Real estate construction: | ||||||||||||
Commercial Real Estate business line (a) | 362 | 385 | 516 | 507 | 542 | |||||||
Other business lines (b) | 4 | 4 | 3 | 4 | 4 | |||||||
Total real estate construction | 366 | 389 | 519 | 511 | 546 | |||||||
Commercial mortgage: | ||||||||||||
Commercial Real Estate business line (a) | 153 | 135 | 105 | 127 | 137 | |||||||
Other business lines (b) | 304 | 257 | 226 | 192 | 161 | |||||||
Total commercial mortgage | 457 | 392 | 331 | 319 | 298 | |||||||
Residential mortgage | 59 | 53 | 58 | 50 | 27 | |||||||
Consumer | 11 | 11 | 13 | 12 | 8 | |||||||
Lease financing | 10 | 11 | 11 | 13 | 18 | |||||||
International | 2 | 3 | 4 | 22 | 7 | |||||||
Total nonaccrual loans | 1,163 | 1,098 | 1,145 | 1,165 | 1,194 | |||||||
Reduced-rate loans | 28 | 23 | 17 | 16 | 2 | |||||||
Total nonperforming loans | 1,191 | 1,121 | 1,162 | 1,181 | 1,196 | |||||||
Foreclosed property | 120 | 93 | 89 | 111 | 109 | |||||||
Total nonperforming assets | $ 1,311 | $ 1,214 | $ 1,251 | $ 1,292 | $ 1,305 | |||||||
Nonperforming loans as a percentage of total loans | 2.96 | % | 2.76 | % | 2.85 | % | 2.80 | % | 2.74 | % | ||
Nonperforming assets as a percentage of total loans and foreclosed property | 3.24 | 2.98 | 3.06 | 3.06 | 2.99 | |||||||
Allowance for loan losses as a percentage of total nonperforming loans | 80 | 86 | 85 | 83 | 80 | |||||||
Loans past due 90 days or more and still accruing | $ 104 | $ 115 | $ 83 | $ 101 | $ 161 | |||||||
ANALYSIS OF NONACCRUAL LOANS | ||||||||||||
Nonaccrual loans at beginning of period | $ 1,098 | $ 1,145 | $ 1,165 | $ 1,194 | $ 1,130 | |||||||
Loans transferred to nonaccrual (c) | 294 | 199 | 245 | 266 | 361 | |||||||
Nonaccrual business loan gross charge-offs (d) | (136) | (143) | (174) | (217) | (226) | |||||||
Loans transferred to accrual status (c) | (10) | - | - | - | (4) | |||||||
Nonaccrual business loans sold (e) | (12) | (47) | (44) | (10) | (41) | |||||||
Payments/Other (f) | (71) | (56) | (47) | (68) | (26) | |||||||
Nonaccrual loans at end of period | $ 1,163 | $ 1,098 | $ 1,145 | $ 1,165 | $ 1,194 | |||||||
(a) Primarily loans to real estate investors and developers. | ||||||||||||
(b) Primarily loans secured by owner-occupied real estate. | ||||||||||||
(c) Based on an analysis of nonaccrual loans with book balances greater than $2 million. | ||||||||||||
(d) Analysis of gross loan charge-offs: | ||||||||||||
Nonaccrual business loans | $ 136 | $ 143 | $ 174 | $ 217 | $ 226 | |||||||
Performing watch list loans | - | 1 | - | - | 1 | |||||||
Consumer and residential mortgage loans | 9 | 14 | 10 | 15 | 18 | |||||||
Total gross loan charge-offs | $ 145 | $ 158 | $ 184 | $ 232 | $ 245 | |||||||
(e) Analysis of loans sold: | ||||||||||||
Nonaccrual business loans | $ 12 | $ 47 | $ 44 | $ 10 | $ 41 | |||||||
Performing watch list loans | 7 | 15 | 12 | 1 | 24 | |||||||
Total loans sold | $ 19 | $ 62 | $ 56 | $ 11 | $ 65 | |||||||
(f) Includes net changes related to nonaccrual loans with balances less than $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed property. Excludes business loan gross charge-offs and business nonaccrual loans sold. | ||||||||||||
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited) | |||||||||||
Comerica Incorporated and Subsidiaries | |||||||||||
Nine Months Ended | |||||||||||
September 30, 2010 | September 30, 2009 | ||||||||||
(dollar amounts in millions) | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | |||||
Commercial loans | $ 20,963 | $ 614 | 3.92 | % | $ 25,399 | $ 678 | 3.57 | % | |||
Real estate construction loans | 2,997 | 69 | 3.08 | 4,287 | 94 | 2.92 | |||||
Commercial mortgage loans | 10,338 | 321 | 4.15 | 10,422 | 327 | 4.20 | |||||
Residential mortgage loans | 1,610 | 65 | 5.37 | 1,787 | 76 | 5.69 | |||||
Consumer loans | 2,450 | 65 | 3.55 | 2,565 | 71 | 3.71 | |||||
Lease financing | 1,100 | 31 | 3.72 | 1,248 | 29 | 3.08 | |||||
International loans | 1,233 | 37 | 3.96 | 1,603 | 46 | 3.80 | |||||
Business loan swap income | - | 24 | - | - | 25 | - | |||||
Total loans | 40,691 | 1,226 | 4.02 | 47,311 | 1,346 | 3.80 | |||||
Auction-rate securities available-for-sale | 789 | 6 | 1.04 | 1,040 | 12 | 1.50 | |||||
Other investment securities available-for-sale | 6,393 | 172 | 3.66 | 8,617 | 267 | 4.24 | |||||
Total investment securities available-for-sale | 7,182 | 178 | 3.36 | 9,657 | 279 | 3.93 | |||||
Federal funds sold and securities purchased under agreements to resell | 5 | - | 0.38 | 24 | - | 0.32 | |||||
Interest-bearing deposits with banks (a) | 3,641 | 7 | 0.25 | 2,426 | 5 | 0.25 | |||||
Other short-term investments | 126 | 1 | 1.64 | 162 | 2 | 1.79 | |||||
Total earning assets | 51,645 | 1,412 | 3.66 | 59,580 | 1,632 | 3.67 | |||||
Cash and due from banks | 809 | 901 | |||||||||
Allowance for loan losses | (1,033) | (913) | |||||||||
Accrued income and other assets | 4,737 | 4,728 | |||||||||
Total assets | $ 56,158 | $ 64,296 | |||||||||
Money market and NOW deposits | $ 16,035 | 38 | 0.32 | $ 12,579 | 49 | 0.52 | |||||
Savings deposits | 1,397 | 1 | 0.07 | 1,326 | 1 | 0.12 | |||||
Customer certificates of deposit | 5,968 | 42 | 0.94 | 8,571 | 159 | 2.48 | |||||
Total interest-bearing core deposits | 23,400 | 81 | 0.46 | 22,476 | 209 | 1.25 | |||||
Other time deposits | 409 | 9 | 3.04 | 4,983 | 109 | 2.93 | |||||
Foreign office time deposits | 462 | 1 | 0.27 | 688 | 2 | 0.31 | |||||
Total interest-bearing deposits | 24,271 | 91 | 0.50 | 28,147 | 320 | 1.52 | |||||
Short-term borrowings | 230 | - | 0.24 | 1,262 | 2 | 0.25 | |||||
Medium- and long-term debt | 9,521 | 76 | 1.06 | 14,073 | 133 | 1.26 | |||||
Total interest-bearing sources | 34,022 | 167 | 0.65 | 43,482 | 455 | 1.40 | |||||
Noninterest-bearing deposits | 14,922 | 12,385 | |||||||||
Accrued expenses and other liabilities | 1,080 | 1,305 | |||||||||
Total shareholders' equity | 6,134 | 7,124 | |||||||||
Total liabilities and shareholders' equity | $ 56,158 | $ 64,296 | |||||||||
Net interest income/rate spread (FTE) | $ 1,245 | 3.01 | $ 1,177 | 2.27 | |||||||
FTE adjustment | $ 4 | $ 6 | |||||||||
Impact of net noninterest-bearing sources of funds | 0.22 | 0.38 | |||||||||
Net interest margin (as a percentage of average earning assets) (FTE) (a) | 3.23 | % | 2.65 | % | |||||||
(a) Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 22 basis points and 10 basis points year-to-date in 2010 and 2009, respectively. Excluding excess liquidity, the net interest margin would have been 3.45% in 2010 and 2.75% in 2009. See Reconciliation of Non-GAAP Financial Measures. | |||||||||||
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited) | ||||||||||||||||
Comerica Incorporated and Subsidiaries | ||||||||||||||||
Three Months Ended | ||||||||||||||||
September 30, 2010 | June 30, 2010 | September 30, 2009 | ||||||||||||||
(dollar amounts in millions) | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | |||||||
Commercial loans | $ 20,967 | $ 203 | 3.84 | % | $ 20,910 | $ 206 | 3.95 | % | $ 23,401 | $ 223 | 3.79 | % | ||||
Real estate construction loans | 2,625 | 21 | 3.19 | 2,987 | 23 | 3.13 | 4,033 | 29 | 2.83 | |||||||
Commercial mortgage loans | 10,257 | 105 | 4.06 | 10,372 | 109 | 4.20 | 10,359 | 110 | 4.21 | |||||||
Residential mortgage loans | 1,590 | 21 | 5.25 | 1,607 | 22 | 5.44 | 1,720 | 24 | 5.66 | |||||||
Consumer loans | 2,421 | 21 | 3.53 | 2,448 | 22 | 3.56 | 2,550 | 24 | 3.68 | |||||||
Lease financing | 1,064 | 10 | 3.69 | 1,108 | 10 | 3.72 | 1,218 | 12 | 3.96 | |||||||
International loans | 1,178 | 12 | 3.89 | 1,240 | 13 | 4.07 | 1,501 | 14 | 3.65 | |||||||
Business loan swap income | - | 7 | - | - | 9 | - | - | 9 | - | |||||||
Total loans | 40,102 | 400 | 3.96 | 40,672 | 414 | 4.07 | 44,782 | 445 | 3.94 | |||||||
Auction-rate securities available-for-sale | 673 | 1 | 0.99 | 816 | 3 | 1.19 | 962 | 3 | 1.29 | |||||||
Other investment securities available-for-sale | 6,233 | 54 | 3.54 | 6,446 | 58 | 3.71 | 8,108 | 62 | 3.10 | |||||||
Total investment securities available-for-sale | 6,906 | 55 | 3.27 | 7,262 | 61 | 3.41 | 9,070 | 65 | 2.91 | |||||||
Federal funds sold and securities purchased under agreements to resell | 13 | - | 0.31 | 1 | - | 1.35 | 2 | - | 0.29 | |||||||
Interest-bearing deposits with banks (a) | 3,047 | 2 | 0.25 | 3,768 | 3 | 0.25 | 3,538 | 2 | 0.25 | |||||||
Other short-term investments | 121 | - | 1.53 | 132 | - | 1.65 | 121 | 1 | 1.80 | |||||||
Total earning assets | 50,189 | 457 | 3.64 | 51,835 | 478 | 3.70 | 57,513 | 513 | 3.55 | |||||||
Cash and due from banks | 843 | 795 | 873 | |||||||||||||
Allowance for loan losses | (1,003) | (1,037) | (992) | |||||||||||||
Accrued income and other assets | 4,700 | 4,665 | 4,554 | |||||||||||||
Total assets | $ 54,729 | $ 56,258 | $ 61,948 | |||||||||||||
Money market and NOW deposits | $ 16,681 | 13 | 0.31 | $ 16,354 | 13 | 0.32 | $ 13,090 | 15 | 0.46 | |||||||
Savings deposits | 1,377 | 1 | 0.08 | 1,429 | - | 0.07 | 1,347 | - | 0.09 | |||||||
Customer certificates of deposit | 5,808 | 12 | 0.87 | 5,927 | 15 | 0.92 | 8,145 | 46 | 2.23 | |||||||
Total interest-bearing core deposits | 23,866 | 26 | 0.43 | 23,710 | 28 | 0.45 | 22,582 | 61 | 1.07 | |||||||
Other time deposits | 65 | - | 0.51 | 295 | 1 | 2.14 | 3,573 | 28 | 3.05 | |||||||
Foreign office time deposits | 479 | 1 | 0.36 | 448 | - | 0.23 | 660 | - | 0.24 | |||||||
Total interest-bearing deposits | 24,410 | 27 | 0.43 | 24,453 | 29 | 0.47 | 26,815 | 89 | 1.32 | |||||||
Short-term borrowings | 208 | - | 0.35 | 248 | - | 0.27 | 434 | - | 0.13 | |||||||
Medium- and long-term debt | 8,245 | 25 | 1.21 | 9,571 | 25 | 1.04 | 13,311 | 37 | 1.10 | |||||||
Total interest-bearing sources | 32,863 | 52 | 0.63 | 34,272 | 54 | 0.63 | 40,560 | 126 | 1.23 | |||||||
Noninterest-bearing deposits | 14,920 | 15,218 | 13,225 | |||||||||||||
Accrued expenses and other liabilities | 1,104 | 1,060 | 1,098 | |||||||||||||
Total shareholders' equity | 5,842 | 5,708 | 7,065 | |||||||||||||
Total liabilities and shareholders' equity | $ 54,729 | $ 56,258 | $ 61,948 | |||||||||||||
Net interest income/rate spread (FTE) | $ 405 | 3.01 | $ 424 | 3.07 | $ 387 | 2.32 | ||||||||||
FTE adjustment | $ 1 | $ 2 | $ 2 | |||||||||||||
Impact of net noninterest-bearing sources of funds | 0.22 | 0.21 | 0.36 | |||||||||||||
Net interest margin (as a percentage of average earning assets) (FTE) (a) | 3.23 | % | 3.28 | % | 2.68 | % | ||||||||||
(a) Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 19 basis points and 23 basis points in the third and second quarters of 2010, respectively, and by 16 basis points in the third quarter of 2009. Excluding excess liquidity, the net interest margin would have been 3.42%, 3.51% and 2.84% in each respective period. See Reconciliation of Non-GAAP Financial Measures. | ||||||||||||||||
CONSOLIDATED STATISTICAL DATA (unaudited) | ||||||||||||
Comerica Incorporated and Subsidiaries | ||||||||||||
(in millions, except per share data) | September 30, 2010 | June 30, 2010 | March 31, 2010 | December 31, 2009 | September 30, 2009 | |||||||
Commercial loans: | ||||||||||||
Floor plan | $ 1,693 | $ 1,586 | $ 1,351 | $ 1,367 | $ 857 | |||||||
Other | 19,739 | 19,565 | 19,405 | 20,323 | 21,689 | |||||||
Total commercial loans | 21,432 | 21,151 | 20,756 | 21,690 | 22,546 | |||||||
Real estate construction loans: | ||||||||||||
Commercial Real Estate business line (a) | 2,023 | 2,345 | 2,754 | 3,002 | 3,342 | |||||||
Other business lines (b) | 421 | 429 | 448 | 459 | 528 | |||||||
Total real estate construction loans | 2,444 | 2,774 | 3,202 | 3,461 | 3,870 | |||||||
Commercial mortgage loans: | ||||||||||||
Commercial Real Estate business line (a) | 2,091 | 2,035 | 1,944 | 1,889 | 1,751 | |||||||
Other business lines (b) | 8,089 | 8,283 | 8,414 | 8,568 | 8,629 | |||||||
Total commercial mortgage loans | 10,180 | 10,318 | 10,358 | 10,457 | 10,380 | |||||||
Residential mortgage loans | 1,586 | 1,606 | 1,631 | 1,651 | 1,679 | |||||||
Consumer loans: | ||||||||||||
Home equity | 1,736 | 1,761 | 1,782 | 1,817 | 1,818 | |||||||
Other consumer | 667 | 682 | 690 | 694 | 726 | |||||||
Total consumer loans | 2,403 | 2,443 | 2,472 | 2,511 | 2,544 | |||||||
Lease financing | 1,053 | 1,084 | 1,120 | 1,139 | 1,197 | |||||||
International loans | 1,182 | 1,226 | 1,306 | 1,252 | 1,355 | |||||||
Total loans | $ 40,280 | $ 40,602 | $ 40,845 | $ 42,161 | $ 43,571 | |||||||
Goodwill | $ 150 | $ 150 | $ 150 | $ 150 | $ 150 | |||||||
Loan servicing rights | 5 | 6 | 6 | 7 | 8 | |||||||
Tier 1 common capital ratio (c) (d) | 9.97 | % | 9.81 | % | 9.57 | % | 8.18 | % | 8.04 | % | ||
Tier 1 risk-based capital ratio (d) | 9.97 | 10.64 | 10.38 | 12.46 | 12.21 | |||||||
Total risk-based capital ratio (d) | 14.38 | 15.03 | 14.91 | 16.93 | 16.79 | |||||||
Leverage ratio (d) | 10.90 | 11.36 | 11.00 | 13.25 | 12.46 | |||||||
Tangible common equity ratio (c) | 10.39 | 10.11 | 9.68 | 7.99 | 7.96 | |||||||
Book value per common share | $ 33.19 | $ 32.85 | $ 32.15 | $ 32.27 | $ 32.36 | |||||||
Market value per share for the quarter: | ||||||||||||
High | 40.21 | 45.85 | 39.36 | 32.30 | 31.83 | |||||||
Low | 33.11 | 35.44 | 29.68 | 26.49 | 19.94 | |||||||
Close | 37.15 | 36.83 | 38.04 | 29.57 | 29.67 | |||||||
Quarterly ratios: | ||||||||||||
Return on average common shareholders' equity | 4.07 | % | 4.89 | % | (5.61) | % | (5.10) | % | (1.27) | % | ||
Return on average assets | 0.43 | 0.50 | 0.36 | (0.19) | 0.12 | |||||||
Efficiency ratio | 67.88 | 64.47 | 66.45 | 70.68 | 67.14 | |||||||
Number of banking centers | 441 | 437 | 449 | 447 | 444 | |||||||
Number of employees - full time equivalent | 9,075 | 9,107 | 9,215 | 9,330 | 9,384 | |||||||
(a) Primarily loans to real estate investors and developers. | ||||||||||||
(b) Primarily loans secured by owner-occupied real estate. | ||||||||||||
(c) See Reconciliation of Non-GAAP Financial Measures. | ||||||||||||
(d) September 30, 2010 ratios are estimated. | ||||||||||||
PARENT COMPANY ONLY BALANCE SHEETS (unaudited) | ||||
Comerica Incorporated | ||||
(in millions, except share data) | September 30, 2010 | December 31, 2009 | September 30, 2009 | |
ASSETS | ||||
Cash and due from subsidiary bank | $ 10 | $ 5 | $ 7 | |
Short-term investments with subsidiary bank | 793 | 2,150 | 2,169 | |
Other short-term investments | 82 | 86 | 84 | |
Investment in subsidiaries, principally banks | 6,039 | 5,710 | 5,711 | |
Premises and equipment | 3 | 4 | 4 | |
Other assets | 202 | 186 | 197 | |
Total assets | $ 7,129 | $ 8,141 | $ 8,172 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Medium- and long-term debt | $ 1,155 | $ 986 | $ 992 | |
Other liabilities | 117 | 126 | 145 | |
Total liabilities | 1,272 | 1,112 | 1,137 | |
Fixed rate cumulative perpetual preferred stock, series F, no par value, $1,000 liquidation preference per share: | ||||
Authorized - 2,250,000 shares at 12/31/09 and 9/30/09 | ||||
Issued - 2,250,000 shares at 12/31/09 and 9/30/09 | - | 2,151 | 2,145 | |
Common stock - $5 par value: | ||||
Authorized - 325,000,000 shares | ||||
Issued - 203,878,110 shares at 9/30/10 and 178,735,252 shares at 12/31/09 and 9/30/09 | 1,019 | 894 | 894 | |
Capital surplus | 1,473 | 740 | 738 | |
Accumulated other comprehensive loss | (238) | (336) | (361) | |
Retained earnings | 5,171 | 5,161 | 5,205 | |
Less cost of common stock in treasury - 27,394,831 shares at 9/30/10, 27,555,623 shares at 12/31/09 and 27,620,576 shares at 9/30/09 | (1,568) | (1,581) | (1,586) | |
Total shareholders' equity | 5,857 | 7,029 | 7,035 | |
Total liabilities and shareholders' equity | $ 7,129 | $ 8,141 | $ 8,172 | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) | |||||||||
Comerica Incorporated and Subsidiaries | |||||||||
Common Stock | |||||||||
(in millions, except per share data) | Preferred Stock | Shares Outstanding | Amount | Capital Surplus | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Total Shareholders' Equity | |
BALANCE AT DECEMBER 31, 2008 | $ 2,129 | 150.5 | $ 894 | $ 722 | $ (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 | - | (0.1) | - | - | - | - | (1) | (1) | |
Accretion of discount on preferred stock | 16 | - | - | - | - | (16) | - | - | |
Net issuance of common stock under employee stock plans | - | 0.7 | - | (13) | - | (34) | 43 | (4) | |
Share-based compensation | - | - | - | 25 | - | - | - | 25 | |
Other | - | - | - | 4 | - | - | 1 | 5 | |
BALANCE AT SEPTEMBER 30, 2009 | $ 2,145 | 151.1 | $ 894 | $ 738 | $ (361) | $ 5,205 | $ (1,586) | $ 7,035 | |
BALANCE AT DECEMBER 31, 2009 | $ 2,151 | 151.2 | $ 894 | $ 740 | $ (336) | $ 5,161 | $ (1,581) | $ 7,029 | |
Net income | - | - | - | - | - | 181 | - | 181 | |
Other comprehensive income, net of tax | - | - | - | - | 98 | - | - | 98 | |
Total comprehensive income | 279 | ||||||||
Cash dividends declared on preferred stock | - | - | - | - | - | (38) | - | (38) | |
Cash dividends declared on common stock ($0.10 per share) | - | - | - | - | - | (26) | - | (26) | |
Purchase of common stock | - | (0.1) | - | - | - | - | (4) | (4) | |
Issuance of common stock | - | 25.1 | 125 | 724 | - | - | - | 849 | |
Redemption of preferred stock | (2,250) | - | - | - | - | - | - | (2,250) | |
Redemption discount accretion on preferred stock | 94 | - | - | - | - | (94) | - | - | |
Accretion of discount on preferred stock | 5 | - | - | - | - | (5) | - | - | |
Net issuance of common stock under employee stock plans | - | 0.3 | - | (11) | - | (8) | 16 | (3) | |
Share-based compensation | - | - | - | 24 | - | - | - | 24 | |
Other | - | - | - | (4) | - | - | 1 | (3) | |
BALANCE AT SEPTEMBER 30, 2010 | $ - | 176.5 | $ 1,019 | $ 1,473 | $ (238) | $ 5,171 | $ (1,568) | $ 5,857 | |
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited) | |||||||||||||
Comerica Incorporated and Subsidiaries | |||||||||||||
(dollar amounts in millions) Three Months Ended September 30, 2010 | Business Bank | Retail Bank | Wealth & Institutional Management | Finance | Other | Total | |||||||
Earnings summary: | |||||||||||||
Net interest income (expense) (FTE) | $ 336 | $ 133 | $ 41 | $ (104) | $ (1) | $ 405 | |||||||
Provision for loan losses | 57 | 24 | 37 | - | 4 | 122 | |||||||
Noninterest income | 69 | 45 | 59 | 12 | 1 | 186 | |||||||
Noninterest expenses | 155 | 165 | 78 | 2 | 2 | 402 | |||||||
Provision (benefit) for income taxes (FTE) | 60 | (4) | (5) | (36) | (7) | 8 | |||||||
Net income (loss) | $ 133 | $ (7) | $ (10) | $ (58) | $ 1 | $ 59 | |||||||
Net credit-related charge-offs | $ 99 | $ 19 | $ 14 | $ - | $ - | $ 132 | |||||||
Selected average balances: | |||||||||||||
Assets | $ 30,309 | $ 5,777 | $ 4,855 | $ 9,044 | $ 4,744 | $ 54,729 | |||||||
Loans | 29,940 | 5,314 | 4,824 | 30 | (6) | 40,102 | |||||||
Deposits | 19,266 | 16,972 | 2,606 | 386 | 100 | 39,330 | |||||||
Liabilities | 19,230 | 16,940 | 2,587 | 9,224 | 906 | 48,887 | |||||||
Attributed equity | 2,968 | 624 | 412 | 1,065 | 773 | 5,842 | |||||||
Statistical data: | |||||||||||||
Return on average assets (a) | 1.75 | % | (0.16) | % | (0.79) | % | N/M | N/M | 0.43 | % | |||
Return on average attributed equity | 17.91 | (4.43) | (9.34) | N/M | N/M | 4.07 | |||||||
Net interest margin (b) | 4.45 | 3.10 | 3.42 | N/M | N/M | 3.23 | |||||||
Efficiency ratio | 38.16 | 92.26 | 78.49 | N/M | N/M | 67.88 | |||||||
Three Months Ended June 30, 2010 | Business Bank | Retail Bank | Wealth & Institutional Management | Finance | Other | Total | |||||||
Earnings summary: | |||||||||||||
Net interest income (expense) (FTE) | $ 351 | $ 134 | $ 45 | $ (103) | $ (3) | $ 424 | |||||||
Provision for loan losses | 83 | 20 | 19 | - | 4 | 126 | |||||||
Noninterest income | 78 | 42 | 61 | 13 | - | 194 | |||||||
Noninterest expenses | 157 | 160 | 79 | 2 | (1) | 397 | |||||||
Provision (benefit) for income taxes (FTE) | 54 | (1) | 3 | (35) | 4 | 25 | |||||||
Net income (loss) | $ 135 | $ (3) | $ 5 | $ (57) | $ (10) | $ 70 | |||||||
Net credit-related charge-offs | $ 113 | $ 22 | $ 11 | $ - | $ - | $ 146 | |||||||
Selected average balances: | |||||||||||||
Assets | $ 30,609 | $ 5,937 | $ 4,903 | $ 9,343 | $ 5,466 | $ 56,258 | |||||||
Loans | 30,353 | 5,446 | 4,840 | 36 | (3) | 40,672 | |||||||
Deposits | 19,069 | 16,930 | 2,924 | 653 | 95 | 39,671 | |||||||
Liabilities | 19,040 | 16,895 | 2,909 | 10,838 | 868 | 50,550 | |||||||
Attributed equity | 3,110 | 646 | 408 | 1,005 | 539 | 5,708 | |||||||
Statistical data: | |||||||||||||
Return on average assets (a) | 1.75 | % | (0.06) | % | 0.43 | % | N/M | N/M | 0.50 | % | |||
Return on average attributed equity | 17.21 | (1.66) | 5.19 | N/M | N/M | 4.89 | |||||||
Net interest margin (b) | 4.63 | 3.17 | 3.73 | N/M | N/M | 3.28 | |||||||
Efficiency ratio | 36.92 | 89.14 | 77.57 | N/M | N/M | 64.47 | |||||||
Three Months Ended September 30, 2009 | Business Bank | Retail Bank | Wealth & Institutional Management | Finance | Other | Total | |||||||
Earnings summary: | |||||||||||||
Net interest income (expense) (FTE) | $ 346 | $ 127 | $ 42 | $ (136) | $ 8 | $ 387 | |||||||
Provision for loan losses | 252 | 42 | 20 | - | (3) | 311 | |||||||
Noninterest income | 72 | 50 | 66 | 121 | 6 | 315 | |||||||
Noninterest expenses | 160 | 154 | 73 | 3 | 9 | 399 | |||||||
Provision (benefit) for income taxes (FTE) | (16) | (8) | 5 | (11) | 3 | (27) | |||||||
Net income (loss) | $ 22 | $ (11) | $ 10 | $ (7) | $ 5 | $ 19 | |||||||
Net credit-related charge-offs | $ 195 | $ 34 | $ 10 | $ - | $ - | $ 239 | |||||||
Selected average balances: | |||||||||||||
Assets | $ 34,822 | $ 6,445 | $ 4,856 | $ 11,426 | $ 4,399 | $ 61,948 | |||||||
Loans | 34,116 | 5,904 | 4,760 | 2 | - | 44,782 | |||||||
Deposits | 15,735 | 17,563 | 2,735 | 3,969 | 38 | 40,040 | |||||||
Liabilities | 16,002 | 17,532 | 2,725 | 18,361 | 263 | 54,883 | |||||||
Attributed equity | 3,464 | 629 | 373 | 959 | 1,640 | 7,065 | |||||||
Statistical data: | |||||||||||||
Return on average assets (a) | 0.24 | % | (0.24) | % | 0.80 | % | N/M | N/M | 0.12 | % | |||
Return on average attributed equity | 2.42 | (6.92) | 10.40 | N/M | N/M | (1.27) | |||||||
Net interest margin (b) | 4.01 | 2.87 | 3.48 | N/M | N/M | 2.68 | |||||||
Efficiency ratio | 38.41 | 86.86 | 70.84 | 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 | |||||||||||||
MARKET SEGMENT FINANCIAL RESULTS (unaudited) | |||||||||||||||||
Comerica Incorporated and Subsidiaries | |||||||||||||||||
(dollar amounts in millions) Three Months Ended September 30, 2010 | Midwest | Western | Texas | Florida | Other Markets | International | Finance & Other Businesses | Total | |||||||||
Earnings summary: | |||||||||||||||||
Net interest income (expense) (FTE) | $ 200 | $ 157 | $ 78 | $ 10 | $ 47 | $ 18 | $ (105) | $ 405 | |||||||||
Provision for loan losses | 38 | 51 | 17 | 10 | 4 | (2) | 4 | 122 | |||||||||
Noninterest income | 99 | 31 | 21 | 4 | 10 | 8 | 13 | 186 | |||||||||
Noninterest expenses | 186 | 107 | 61 | 13 | 23 | 8 | 4 | 402 | |||||||||
Provision (benefit) for income taxes (FTE) | 27 | 16 | 7 | (3) | (3) | 7 | (43) | 8 | |||||||||
Net income (loss) | $ 48 | $ 14 | $ 14 | $ (6) | $ 33 | $ 13 | $ (57) | $ 59 | |||||||||
Net credit-related charge-offs | $ 61 | $ 58 | $ 5 | $ 6 | $ 2 | $ - | $ - | $ 132 | |||||||||
Selected average balances: | |||||||||||||||||
Assets | $ 14,445 | $ 12,746 | $ 6,556 | $ 1,528 | $ 4,058 | $ 1,608 | $ 13,788 | $ 54,729 | |||||||||
Loans | 14,276 | 12,556 | 6,357 | 1,549 | 3,802 | 1,538 | 24 | 40,102 | |||||||||
Deposits | 17,777 | 11,793 | 5,443 | 364 | 2,198 | 1,269 | 486 | 39,330 | |||||||||
Liabilities | 17,755 | 11,724 | 5,434 | 350 | 2,225 | 1,269 | 10,130 | 48,887 | |||||||||
Attributed equity | 1,390 | 1,304 | 663 | 166 | 340 | 141 | 1,838 | 5,842 | |||||||||
Statistical data: | |||||||||||||||||
Return on average assets (a) | 1.02 | % | 0.43 | % | 0.83 | % | (1.58) | % | 3.24 | % | 3.25 | % | N/M | 0.43 | % | ||
Return on average attributed equity | 14.06 | 4.31 | 8.20 | (14.56) | 38.63 | 37.03 | N/M | 4.07 | |||||||||
Net interest margin (b) | 4.45 | 4.96 | 4.87 | 2.61 | 4.99 | 4.51 | N/M | 3.23 | |||||||||
Efficiency ratio | 61.77 | 56.88 | 61.94 | 94.50 | 40.72 | 30.65 | N/M | 67.88 | |||||||||
Three Months Ended June 30, 2010 | Midwest | Western | Texas | Florida | Other Markets | International | Finance & Other Businesses | Total | |||||||||
Earnings summary: | |||||||||||||||||
Net interest income (expense) (FTE) | $ 210 | $ 164 | $ 81 | $ 12 | $ 44 | $ 19 | $ (106) | $ 424 | |||||||||
Provision for loan losses | 34 | 27 | (1) | 17 | 50 | (5) | 4 | 126 | |||||||||
Noninterest income | 97 | 33 | 23 | 4 | 15 | 9 | 13 | 194 | |||||||||
Noninterest expenses | 181 | 110 | 65 | 12 | 20 | 8 | 1 | 397 | |||||||||
Provision (benefit) for income taxes (FTE) | 32 | 21 | 14 | (4) | (16) | 9 | (31) | 25 | |||||||||
Net income (loss) | $ 60 | $ 39 | $ 26 | $ (9) | $ 5 | $ 16 | $ (67) | $ 70 | |||||||||
Net credit-related charge-offs | $ 44 | $ 47 | $ 8 | $ 7 | $ 40 | $ - | $ - | $ 146 | |||||||||
Selected average balances: | |||||||||||||||||
Assets | $ 14,626 | $ 13,006 | $ 6,652 | $ 1,576 | $ 3,934 | $ 1,655 | $ 14,809 | $ 56,258 | |||||||||
Loans | 14,592 | 12,792 | 6,428 | 1,575 | 3,661 | 1,591 | 33 | 40,672 | |||||||||
Deposits | 17,988 | 11,951 | 5,316 | 404 | 2,212 | 1,052 | 748 | 39,671 | |||||||||
Liabilities | 17,966 | 11,876 | 5,308 | 392 | 2,243 | 1,059 | 11,706 | 50,550 | |||||||||
Attributed equity | 1,459 | 1,358 | 672 | 161 | 352 | 162 | 1,544 | 5,708 | |||||||||
Statistical data: | |||||||||||||||||
Return on average assets (a) | 1.23 | % | 1.17 | % | 1.54 | % | (2.18) | % | 0.49 | % | 3.90 | % | N/M | 0.50 | % | ||
Return on average attributed equity | 16.36 | 11.38 | 15.29 | (21.31) | 5.52 | 39.95 | N/M | 4.89 | |||||||||
Net interest margin (b) | 4.66 | 5.13 | 5.05 | 2.94 | 4.91 | 4.62 | N/M | 3.28 | |||||||||
Efficiency ratio | 58.45 | 55.91 | 62.32 | 76.90 | 37.58 | 30.48 | N/M | 64.47 | |||||||||
Three Months Ended September 30, 2009 | Midwest | Western | Texas | Florida | Other Markets | International | Finance & Other Businesses | Total | |||||||||
Earnings summary: | |||||||||||||||||
Net interest income (expense) (FTE) | $ 207 | $ 159 | $ 77 | $ 11 | $ 41 | $ 20 | $ (128) | $ 387 | |||||||||
Provision for loan losses | 148 | 101 | 29 | 24 | 6 | 6 | (3) | 311 | |||||||||
Noninterest income | 107 | 33 | 22 | 3 | 14 | 9 | 127 | 315 | |||||||||
Noninterest expenses | 188 | 106 | 58 | 10 | 17 | 8 | 12 | 399 | |||||||||
Provision (benefit) for income taxes (FTE) | (12) | (8) | 5 | (8) | (1) | 5 | (8) | (27) | |||||||||
Net income (loss) | $ (10) | $ (7) | $ 7 | $ (12) | $ 33 | $ 10 | $ (2) | $ 19 | |||||||||
Net credit-related charge-offs | $ 102 | $ 95 | $ 22 | $ 9 | $ 10 | $ 1 | $ - | $ 239 | |||||||||
Selected average balances: | |||||||||||||||||
Assets | $ 16,623 | $ 14,114 | $ 7,444 | $ 1,673 | $ 4,361 | $ 1,908 | $ 15,825 | $ 61,948 | |||||||||
Loans | 16,020 | 13,923 | 7,221 | 1,674 | 4,050 | 1,892 | 2 | 44,782 | |||||||||
Deposits | 17,384 | 11,146 | 4,609 | 327 | 1,707 | 860 | 4,007 | 40,040 | |||||||||
Liabilities | 17,658 | 11,060 | 4,618 | 316 | 1,758 | 849 | 18,624 | 54,883 | |||||||||
Attributed equity | 1,563 | 1,393 | 722 | 180 | 432 | 176 | 2,599 | 7,065 | |||||||||
Statistical data: | |||||||||||||||||
Return on average assets (a) | (0.22) | % | (0.20) | % | 0.39 | % | (2.81) | % | 2.98 | % | 1.94 | % | N/M | 0.12 | % | ||
Return on average attributed equity | (2.67) | (1.99) | 3.99 | (26.20) | 30.10 | 21.01 | N/M | (1.27) | |||||||||
Net interest margin (b) | 4.69 | 4.53 | 4.22 | 2.70 | 4.00 | 4.08 | N/M | 2.68 | |||||||||
Efficiency ratio | 59.96 | 54.96 | 59.16 | 70.34 | 33.54 | 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 | |||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) | |||||||
Comerica Incorporated and Subsidiaries | |||||||
Nine Months Ended September 30, | |||||||
(dollar amounts in millions) | 2010 | 2009 | |||||
Net interest income (FTE) | $ 1,245 | $ 1,177 | |||||
Less: | |||||||
Interest earned on excess liquidity (a) | 7 | 4 | |||||
Net interest income (FTE), excluding excess liquidity | $ 1,238 | $ 1,173 | |||||
Average earning assets | $ 51,645 | $ 59,580 | |||||
Less: | |||||||
Average net unrealized gains on investment securities available-for-sale | 108 | 184 | |||||
Average earning assets for net interest margin (FTE) | 51,537 | 59,396 | |||||
Less: | |||||||
Excess liquidity (a) | 3,594 | 2,385 | |||||
Average earning assets for net interest margin (FTE), excluding excess liquidity | $ 47,943 | $ 57,011 | |||||
Net interest margin (FTE) | 3.23 | % | 2.65 | % | |||
Net interest margin (FTE), excluding excess liquidity | 3.45 | 2.75 | |||||
Impact of excess liquidity on net interest margin (FTE) | (0.22) | (0.10) | |||||
2010 | 2009 | |||||||||||||||
3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | ||||||||||||
Net interest income (FTE) | $ 405 | $ 424 | $ 416 | $ 398 | $ 387 | |||||||||||
Less: | ||||||||||||||||
Interest earned on excess liquidity (a) | 2 | 2 | 3 | 1 | 2 | |||||||||||
Net interest income (FTE), excluding excess liquidity | $ 403 | $ 422 | $ 413 | $ 397 | $ 385 | |||||||||||
Average earning assets | $ 50,189 | $ 51,835 | $ 52,941 | $ 53,953 | $ 57,513 | |||||||||||
Less: | ||||||||||||||||
Average net unrealized gains on investment securities available-for-sale | 180 | 80 | 62 | 107 | 102 | |||||||||||
Average earning assets for net interest margin (FTE) | 50,009 | 51,755 | 52,879 | 53,846 | 57,411 | |||||||||||
Less: | ||||||||||||||||
Excess liquidity (a) | 2,983 | 3,719 | 4,092 | 2,453 | 3,492 | |||||||||||
Average earning assets for net interest margin (FTE), excluding excess liquidity | $ 47,026 | $ 48,036 | $ 48,787 | $ 51,393 | $ 53,919 | |||||||||||
Net interest margin (FTE) | 3.23 | % | 3.28 | % | 3.18 | % | 2.94 | % | 2.68 | % | ||||||
Net interest margin (FTE), excluding excess liquidity | 3.42 | 3.51 | 3.42 | 3.07 | 2.84 | |||||||||||
Impact of excess liquidity on net interest margin (FTE) | (0.19) | (0.23) | (0.24) | (0.13) | (0.16) | |||||||||||
(a) Excess liquidity represented by interest earned on and average balances deposited with the Federal Reserve Bank (FRB). | ||||||||||||||||
The net interest margin (FTE), excluding excess liquidity, removes interest earned on balances deposited with the FRB from net interest income (FTE) and average balances deposited with the FRB from average earning assets from the numerator and denominator of the net interest margin (FTE) ratio, respectively. Comerica believes this measurement provides meaningful information to investors, regulators, management and others of the impact on net interest income and net interest margin resulting from Comerica's short-term investment in low yielding instruments. | ||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) | ||||||||||||||||
Comerica Incorporated and Subsidiaries | ||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||
2010 | 2010 | 2010 | 2009 | 2009 | ||||||||||||
Tier 1 capital (a) (b) | $ 5,939 | $ 6,371 | $ 6,311 | $ 7,704 | $ 7,735 | |||||||||||
Less: | ||||||||||||||||
Fixed rate cumulative perpetual preferred stock | - | - | - | 2,151 | 2,145 | |||||||||||
Trust preferred securities | - | 495 | 495 | 495 | 495 | |||||||||||
Tier 1 common capital (b) | $ 5,939 | $ 5,876 | $ 5,816 | $ 5,058 | $ 5,095 | |||||||||||
Risk-weighted assets (a) (b) | $ 59,550 | $ 59,877 | $ 60,792 | $ 61,815 | $ 63,355 | |||||||||||
Tier 1 common capital ratio (b) | 9.97 | % | 9.81 | % | 9.57 | % | 8.18 | % | 8.04 | % | ||||||
Total shareholders' equity | $ 5,857 | $ 5,792 | $ 5,668 | $ 7,029 | $ 7,035 | |||||||||||
Less: | ||||||||||||||||
Fixed rate cumulative perpetual preferred stock | - | - | - | 2,151 | 2,145 | |||||||||||
Goodwill | 150 | 150 | 150 | 150 | 150 | |||||||||||
Other intangible assets | 6 | 6 | 7 | 8 | 8 | |||||||||||
Tangible common equity | $ 5,701 | $ 5,636 | $ 5,511 | $ 4,720 | $ 4,732 | |||||||||||
Total assets | $ 55,004 | $ 55,885 | $ 57,106 | $ 59,249 | $ 59,590 | |||||||||||
Less: | ||||||||||||||||
Goodwill | 150 | 150 | 150 | 150 | 150 | |||||||||||
Other intangible assets | 6 | 6 | 7 | 8 | 8 | |||||||||||
Tangible assets | $ 54,848 | $ 55,729 | $ 56,949 | $ 59,091 | $ 59,432 | |||||||||||
Tangible common equity ratio | 10.39 | % | 10.11 | % | 9.68 | % | 7.99 | % | 7.96 | % | ||||||
(a) Tier 1 capital and risk-weighted assets as defined by regulation. | ||||||||||||||||
(b) September 30, 2010 Tier 1 capital and risk-weighted assets are estimated. | ||||||||||||||||
The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations. The tangible common equity removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets. Comerica believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry. | ||||||||||||||||
SOURCE Comerica Incorporated