DALLAS, Oct. 19, 2011 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported third quarter 2011 net income of $98 million, an increase of $2 million compared to $96 million for the second quarter 2011. Third quarter 2011 included merger and restructuring charges of $33 million ($21 million, after tax; $0.11 per diluted share) associated with the acquisition of Sterling, completed on July 28, 2011, compared to $5 million ($3 million, after tax; $0.02 per diluted share) in the second quarter 2011.
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(dollar amounts in millions, except per share data) |
3rd Qtr '11 |
2nd Qtr '11 |
3rd Qtr '10 |
||||||
Net interest income |
$ 423 |
$ 391 |
$ 404 |
||||||
Provision for loan losses |
38 |
47 |
122 |
||||||
Noninterest income |
201 |
202 |
186 |
||||||
Noninterest expenses (a) |
460 |
409 |
402 |
||||||
Provision for income taxes |
28 |
41 |
7 |
||||||
Net income |
98 |
96 |
59 |
||||||
Net income attributable to common shares |
97 |
95 |
59 |
||||||
Diluted income per common share |
0.51 |
0.53 |
0.33 |
||||||
Average diluted shares (in millions) |
192 |
178 |
178 |
||||||
Tier 1 common capital ratio (c) |
10.57 |
% |
(b) |
10.53 |
% |
9.96 |
% |
||
Tangible common equity ratio (c) |
10.43 |
10.90 |
10.39 |
||||||
Net interest margin (d) |
3.18 |
3.14 |
3.23 |
||||||
(a) Included restructuring expenses of $33 million and $5 million in the third and second quarters of 2011, respectively, associated with the acquisition of Sterling on July 28, 2011. (b) September 30, 2011 ratio is estimated. (c) See Reconciliation of Non-GAAP Financial Measures. (d) Excess liquidity reduced the net interest margin by 29 basis points, 21 basis points and 19 basis points in the 3rd quarter 2011, 2nd quarter 2011 and 3rd quarter 2010, respectively. |
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"Our third quarter results reflect our acquisition of Sterling, which expands our growth in Texas, a state expected to outperform the national economy again this year," said Ralph W. Babb Jr., chairman and chief executive officer. "Systems integrations are on track and expected to be completed by year-end. We plan to capitalize on revenue synergies, including opportunities to leverage distribution channels to increase commercial lending and cross-sales of cash management and other services, as well as wealth management products. In short, the Sterling acquisition provides an exceptional growth opportunity in one of the most attractive markets in the U.S.
"The Sterling acquisition primarily drove our $2 billion increase in period-end loans in the third quarter. Comerica legacy loans reflected increases in Texas, as well as in commercial loans, primarily in Specialty Businesses, including Mortgage Banker Finance, Technology and Life Sciences and Energy Lending; offset by decreases in National Dealer Services, Global Corporate Banking and Small Business Banking."
"With the uncertain national and global economies, we have heightened our focus on revenue generating initiatives and expense controls," said Babb. "In addition to delivering the revenue and expense synergies from the Sterling acquisition, we plan to reallocate resources to faster growing businesses, leverage opportunities to lower deposit pricing and continue to utilize technology to produce efficiencies, among many other action items. By continuing to strengthen our franchise, we believe we will be able to drive growth in this challenging economic environment."
Third Quarter 2011 Highlights Compared to Second Quarter 2011
Net Interest Income and Net Interest Margin
(dollar amounts in millions) |
3rd Qtr '11 |
2nd Qtr '11 |
3rd Qtr '10 |
|||||||
Net interest income |
$ 423 |
$ 391 |
$ 404 |
|||||||
Net interest margin |
3.18 |
% |
3.14 |
% |
3.23 |
% |
||||
Selected average balances (a): |
||||||||||
Total earning assets |
$ 53,243 |
$ 50,136 |
$ 50,189 |
|||||||
Total investment securities |
8,158 |
7,407 |
6,906 |
|||||||
Federal Reserve Bank deposits (excess liquidity) |
4,800 |
3,382 |
2,983 |
|||||||
Total loans |
40,098 |
39,174 |
40,102 |
|||||||
Total core deposits (b) |
44,643 |
41,067 |
38,786 |
|||||||
Total noninterest-bearing deposits |
17,511 |
15,786 |
14,920 |
|||||||
(a) Average balances in 3rd quarter 2011 include Sterling balances from July 28 through September 30, 2011. (b) Core deposits exclude other time deposits and foreign office time deposits. |
||||||||||
Noninterest Income
Noninterest income was $201 million for the third quarter 2011, compared to $202 million for the second quarter 2011. The $1 million decrease primarily resulted from decreases in fiduciary income ($2 million) and other noninterest income ($14 million), partially offset by increases in net securities gains ($8 million) and several fee categories. The decrease in other noninterest income primarily resulted from decreases in deferred compensation asset returns ($7 million) (offset by a decrease in deferred compensation plan costs in noninterest expense) and principal investing and warrants ($4 million). Noninterest income included $16 million from Sterling in the third quarter 2011, which included net securities gains of $11 million, primarily due to the repositioning of the acquired Sterling investment securities portfolio.
Noninterest Expenses
Noninterest expenses totaled $460 million in the third quarter 2011, an increase of $51 million from the second quarter 2011. The increase in non-interest expenses primarily reflected an increase in merger and restructuring charges of $28 million and $18 million of noninterest expenses from Sterling operations. Merger and restructuring charges include the incremental costs to integrate the operations of Sterling. Such expenses include costs related to terminations of certain existing Sterling leases and other contracts, systems integration and related charges, estimated severance and other employee-related charges, and other transaction costs.
Provision for Income Taxes
The provision for income taxes was $28 million, a decrease of $13 million from the previous quarter. The second quarter 2011 provision for income taxes included net after-tax charges of $8 million for various tax items.
Credit Quality
"We continue to be very pleased with our broad-based, steady improvement in credit quality," said Babb. "This was the ninth consecutive quarter of decline in net charge-offs, with a $13 million decrease. Internal watch list loans and nonperforming loans continued to trend downward for both Comerica legacy loans and the Sterling loan portfolio. We continued to see reductions in inflows to nonaccrual loans and positive migration in other credit metrics. Our customers, generally, are in a stronger position today, with higher liquidity, lower leverage and increased efficiency. These positive attributes will assist them in whatever economic scenario emerges in the coming months. As a result of the overall improvements in credit quality we have seen, the provision for loan losses declined to $38 million."
(dollar amounts in millions) |
3rd Qtr '11 |
2nd Qtr '11 |
3rd Qtr '10 |
||||||||
Net credit-related charge-offs |
$ 77 |
$ 90 |
$ 132 |
||||||||
Net credit-related charge-offs/Average total loans |
0.77 |
% |
0.92 |
% |
1.32 |
% |
|||||
Provision for loan losses |
$ 38 |
$ 47 |
$ 122 |
||||||||
Provision for credit losses on lending-related commitments |
(3) |
(2) |
(6) |
||||||||
Total provision for credit losses |
35 |
45 |
116 |
||||||||
Nonperforming loans (a) |
958 |
974 |
1,191 |
||||||||
Nonperforming assets (NPAs) (a) |
1,045 |
1,044 |
1,311 |
||||||||
NPAs/Total loans and foreclosed property |
2.53 |
% |
2.66 |
% |
3.24 |
% |
|||||
Loans past due 90 days or more and still accruing |
$ 81 |
$ 64 |
$ 104 |
||||||||
Allowance for loan losses |
767 |
806 |
957 |
||||||||
Allowance for credit losses on lending-related commitments (b) |
27 |
30 |
38 |
||||||||
Total allowance for credit losses |
794 |
836 |
995 |
||||||||
Allowance for loan losses/Total loans (c) |
1.86 |
% |
2.06 |
% |
2.38 |
% |
|||||
Allowance for loan losses/Nonperforming loans |
80 |
83 |
80 |
||||||||
(a) Excludes loans acquired with credit impairment. (b) Included in "Accrued expenses and other liabilities" on the consolidated balance sheets. (c) Reflects the impact of acquired loans, which were initially recorded at fair value, with no related allowance for loan losses. |
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Credit Quality (continued)
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $60.9 billion and $7.0 billion, respectively, at September 30, 2011, compared to $54.1 billion and $6.0 billion, respectively, at June 30, 2011. There were approximately 199 million common shares outstanding at September 30, 2011. Comerica repurchased 2.1 million shares of common stock in the open market during the third quarter 2011 under the share repurchase program.
As previously announced, Comerica completed the acquisition of Sterling on July 28, 2011. In connection with the acquisition, Comerica issued approximately 24 million shares of common stock. The fair value of assets acquired included $2.1 billion of loans and $1.5 billion of investment securities, and liabilities assumed included $4.0 billion of deposits. Goodwill resulting from the acquisition totaled $485 million.
Comerica's tangible common equity ratio was 10.43 percent at September 30, 2011, a decrease of 47 basis points from June 30, 2011. The estimated Tier 1 common capital ratio increased four basis points, to 10.57 percent at September 30, 2011, from June 30, 2011.
Fourth Quarter 2011 Outlook
For the fourth quarter 2011, compared to the third quarter 2011, management expects the following, assuming a continuation of the current economic environment:
Business Segments
Comerica's operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank, and Wealth Management. The Finance Division is also 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, 2011 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2011 results compared to second quarter 2011.
The following table presents net income (loss) by business segment.
(dollar amounts in millions) |
3rd Qtr '11 |
2nd Qtr '11 |
3rd Qtr '10 |
|||||||||
Business Bank |
$ 179 |
86 |
% |
$ 176 |
95 |
% |
$ 133 |
114 |
% |
|||
Retail Bank |
19 |
9 |
(3) |
(2) |
(7) |
(6) |
||||||
Wealth Management |
11 |
5 |
12 |
7 |
(10) |
(8) |
||||||
209 |
100 |
% |
185 |
100 |
% |
116 |
100 |
% |
||||
Finance |
(91) |
(87) |
(58) |
|||||||||
Other (a) |
(20) |
(2) |
1 |
|||||||||
Total |
$ 98 |
$ 96 |
$ 59 |
|||||||||
(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 '11 |
2nd Qtr '11 |
3rd Qtr '10 |
||||
Net interest income (FTE) |
$ 363 |
$ 342 |
$ 336 |
||||
Provision for loan losses |
20 |
6 |
57 |
||||
Noninterest income |
77 |
79 |
69 |
||||
Noninterest expenses |
162 |
158 |
155 |
||||
Net income |
179 |
176 |
133 |
||||
Net credit-related charge-offs |
40 |
54 |
99 |
||||
Selected average balances: |
|||||||
Assets |
30,602 |
29,893 |
30,309 |
||||
Loans |
29,949 |
29,380 |
29,940 |
||||
Deposits |
21,754 |
20,396 |
19,266 |
||||
Net interest margin |
4.81 |
% |
4.65 |
% |
4.45 |
% |
|
Retail Bank
(dollar amounts in millions) |
3rd Qtr '11 |
2nd Qtr '11 |
3rd Qtr '10 |
||||
Net interest income (FTE) |
$ 173 |
$ 141 |
$ 133 |
||||
Provision for loan losses |
17 |
24 |
24 |
||||
Noninterest income |
47 |
46 |
45 |
||||
Noninterest expenses |
174 |
162 |
165 |
||||
Net income ( loss ) |
19 |
(3) |
(7) |
||||
Net credit-related charge-offs |
28 |
22 |
19 |
||||
Selected average balances: |
|||||||
Assets |
5,991 |
5,453 |
5,777 |
||||
Loans |
5,489 |
4,999 |
5,314 |
||||
Deposits |
19,797 |
17,737 |
16,972 |
||||
Net interest margin |
3.46 |
% |
3.22 |
% |
3.10 |
% |
|
Wealth Management
(dollar amounts in millions) |
3rd Qtr '11 |
2nd Qtr '11 |
3rd Qtr '10 |
||||
Net interest income (FTE) |
$ 45 |
$ 48 |
$ 41 |
||||
Provision for loan losses |
6 |
14 |
37 |
||||
Noninterest income |
56 |
63 |
59 |
||||
Noninterest expenses |
78 |
76 |
78 |
||||
Net income ( loss ) |
11 |
12 |
(10) |
||||
Net credit-related charge-offs |
9 |
14 |
14 |
||||
Selected average balances: |
|||||||
Assets |
4,674 |
4,728 |
4,855 |
||||
Loans |
4,652 |
4,742 |
4,824 |
||||
Deposits |
3,198 |
2,978 |
2,606 |
||||
Net interest margin |
3.85 |
% |
4.07 |
% |
3.42 |
% |
|
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, 2011 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2011 results compared to second quarter 2011.
The following table presents net income (loss) by market segment.
(dollar amounts in millions) |
3rd Qtr '11 |
2nd Qtr '11 |
3rd Qtr '10 |
|||||||||
Midwest |
$ 59 |
28 |
% |
$ 62 |
34 |
% |
$ 48 |
42 |
% |
|||
Western |
49 |
23 |
50 |
27 |
14 |
12 |
||||||
Texas |
65 |
31 |
33 |
18 |
14 |
12 |
||||||
Florida |
1 |
1 |
(5) |
(3) |
(6) |
(5) |
||||||
Other Markets |
23 |
11 |
30 |
16 |
33 |
28 |
||||||
International |
12 |
6 |
15 |
8 |
13 |
11 |
||||||
209 |
100 |
% |
185 |
100 |
% |
116 |
100 |
% |
||||
Finance & Other Businesses (a) |
(111) |
(89) |
(57) |
|||||||||
Total |
$ 98 |
$ 96 |
$ 59 |
|||||||||
(a) Includes discontinued operations and items not directly associated with the geographic markets. |
||||||||||||
Midwest Market
(dollar amounts in millions) |
3rd Qtr '11 |
2nd Qtr '11 |
3rd Qtr '10 |
||||
Net interest income (FTE) |
$ 199 |
$ 204 |
$ 200 |
||||
Provision for loan losses |
21 |
15 |
38 |
||||
Noninterest income |
96 |
100 |
99 |
||||
Noninterest expenses |
183 |
183 |
186 |
||||
Net income |
59 |
62 |
48 |
||||
Net credit-related charge-offs |
33 |
37 |
61 |
||||
Selected average balances: |
|||||||
Assets |
14,123 |
14,267 |
14,445 |
||||
Loans |
13,873 |
14,051 |
14,276 |
||||
Deposits |
18,511 |
18,319 |
17,777 |
||||
Net interest margin |
4.27 |
% |
4.46 |
% |
4.45 |
% |
|
Western Market
(dollar amounts in millions) |
3rd Qtr '11 |
2nd Qtr '11 |
3rd Qtr '10 |
||||
Net interest income (FTE) |
$ 166 |
$ 166 |
$ 157 |
||||
Provision for loan losses |
14 |
20 |
51 |
||||
Noninterest income |
32 |
37 |
31 |
||||
Noninterest expenses |
106 |
108 |
107 |
||||
Net income |
49 |
50 |
14 |
||||
Net credit-related charge-offs |
32 |
26 |
58 |
||||
Selected average balances: |
|||||||
Assets |
12,110 |
12,329 |
12,746 |
||||
Loans |
11,889 |
12,121 |
12,556 |
||||
Deposits |
12,975 |
12,458 |
11,793 |
||||
Net interest margin |
5.06 |
% |
5.35 |
% |
4.96 |
% |
|
Texas Market
(dollar amounts in millions) |
3rd Qtr '11 |
2nd Qtr '11 |
3rd Qtr '10 |
||||
Net interest income (FTE) |
$ 143 |
$ 89 |
$ 78 |
||||
Provision for loan losses |
(7) |
(2) |
17 |
||||
Noninterest income |
29 |
25 |
21 |
||||
Noninterest expenses |
79 |
63 |
61 |
||||
Net income |
65 |
33 |
14 |
||||
Total net credit-related charge-offs |
2 |
3 |
5 |
||||
Selected average balances: |
|||||||
Assets |
8,510 |
7,081 |
6,556 |
||||
Loans |
8,145 |
6,871 |
6,357 |
||||
Deposits |
8,865 |
6,175 |
5,443 |
||||
Net interest margin |
6.40 |
% |
5.19 |
% |
4.87 |
% |
|
Florida Market
(dollar amounts in millions) |
3rd Qtr '11 |
2nd Qtr '11 |
3rd Qtr '10 |
||||
Net interest income (FTE) |
$ 11 |
$ 12 |
$ 10 |
||||
Provision for loan losses |
2 |
11 |
10 |
||||
Noninterest income |
4 |
4 |
4 |
||||
Noninterest expenses |
11 |
12 |
13 |
||||
Net income (loss) |
1 |
(5) |
(6) |
||||
Net credit-related charge-offs |
5 |
15 |
6 |
||||
Selected average balances: |
|||||||
Assets |
1,450 |
1,534 |
1,528 |
||||
Loans |
1,477 |
1,565 |
1,549 |
||||
Deposits |
404 |
396 |
364 |
||||
Net interest margin |
2.94 |
% |
3.14 |
% |
2.61 |
% |
|
Conference Call and Webcast
Comerica will host a conference call to review third quarter 2011 financial results at 7 a.m. CT Wednesday, October 19, 2011. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 11574116). The call and supplemental financial information can also be accessed on the Internet at www.comerica.com. A telephone replay will be available approximately two hours following the conference call through October 31, 2011. The conference call replay can be accessed by calling (855) 859-2056 or (404) 537-3406 (event ID No. 11574116). 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 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," "opportunity," "initiative," "outcome," "continue," "remain," "maintain," "trend," "objective," "pending," "looks forward" and variations of such words and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "might," "can," "may" or similar expressions, as they relate to Comerica or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of Comerica's management based on information known to Comerica's management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica's management for future or past operations, products or services, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability. Such statements reflect the view of Comerica's management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Comerica's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in general economic, political or industry conditions and related credit and market conditions; changes in trade, monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; adverse conditions in the capital markets; the interdependence of financial service companies; changes in regulation or oversight, including the effects of recently enacted legislation, actions taken by or proposed by the U.S. 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; unfavorable developments concerning credit quality; the acquisition of Sterling Bancshares, Inc., or any future acquisitions; the effects of more stringent capital or liquidity requirements; 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 implementation of Comerica's strategies and business models, including the anticipated performance of any new banking centers and the implementation of revenue enhancements and efficiency improvements; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties or information security problems; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; the entry of new competitors in Comerica's markets; changes in customer borrowing, repayment, investment and deposit practices; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings; the effectiveness of methods of reducing risk exposures; the effects of war and other armed conflicts or acts of terrorism and the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods. 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 16 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2010, "Item 1A. Risk Factors" beginning on page 65 of Comerica's Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 and "Item 1A. Risk Factors" beginning on page 74 of Comerica's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011. 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 30, |
June 30, |
September 30, |
September 30, |
|||||||||
(in millions, except per share data) |
2011 |
2011 |
2010 |
2011 |
2010 |
|||||||
PER COMMON SHARE AND COMMON STOCK DATA |
||||||||||||
Diluted net income |
$ 0.51 |
$ 0.53 |
$ 0.33 |
$ 1.61 |
$ 0.34 |
|||||||
Cash dividends declared |
0.10 |
0.10 |
0.05 |
0.30 |
0.15 |
|||||||
Common shareholders' equity (at period end) |
34.94 |
34.15 |
33.19 |
|||||||||
Average diluted shares (in thousands) |
191,634 |
177,602 |
177,686 |
182,602 |
171,260 |
|||||||
KEY RATIOS |
||||||||||||
Return on average common shareholders' equity |
5.91 |
% |
6.41 |
% |
4.07 |
% |
6.44 |
% |
1.40 |
% |
||
Return on average assets |
0.67 |
0.70 |
0.43 |
0.71 |
0.43 |
|||||||
Tier 1 common capital ratio (a) (b) |
10.57 |
10.53 |
9.96 |
|||||||||
Tier 1 risk-based capital ratio (b) |
10.65 |
10.53 |
9.96 |
|||||||||
Total risk-based capital ratio (b) |
14.84 |
14.80 |
14.37 |
|||||||||
Leverage ratio (b) |
11.41 |
11.40 |
10.91 |
|||||||||
Tangible common equity ratio (a) |
10.43 |
10.90 |
10.39 |
|||||||||
AVERAGE BALANCES |
||||||||||||
Commercial loans |
$ 22,127 |
$ 21,677 |
$ 20,967 |
$ 21,769 |
$ 20,963 |
|||||||
Real estate construction loans: |
||||||||||||
Commercial Real Estate business line (c) |
1,269 |
1,486 |
2,203 |
1,501 |
2,559 |
|||||||
Other business lines (d) |
430 |
395 |
422 |
417 |
438 |
|||||||
Total real estate construction loans |
1,699 |
1,881 |
2,625 |
1,918 |
2,997 |
|||||||
Commercial mortgage loans: |
||||||||||||
Commercial Real Estate business line (c) |
2,244 |
1,912 |
2,065 |
2,046 |
2,005 |
|||||||
Other business lines (d) |
8,031 |
7,724 |
8,192 |
7,856 |
8,333 |
|||||||
Total commercial mortgage loans |
10,275 |
9,636 |
10,257 |
9,902 |
10,338 |
|||||||
Residential mortgage loans |
1,606 |
1,525 |
1,590 |
1,577 |
1,610 |
|||||||
Consumer loans |
2,292 |
2,243 |
2,421 |
2,272 |
2,450 |
|||||||
Lease financing |
936 |
958 |
1,064 |
960 |
1,100 |
|||||||
International loans |
1,163 |
1,254 |
1,178 |
1,212 |
1,233 |
|||||||
Total loans |
40,098 |
39,174 |
40,102 |
39,610 |
40,691 |
|||||||
Earning assets |
53,243 |
50,136 |
50,189 |
50,923 |
51,645 |
|||||||
Total assets |
58,238 |
54,517 |
54,729 |
55,526 |
56,158 |
|||||||
Noninterest-bearing deposits |
17,511 |
15,786 |
14,920 |
16,259 |
14,922 |
|||||||
Interest-bearing core deposits |
27,132 |
25,281 |
23,866 |
25,721 |
23,400 |
|||||||
Total core deposits |
44,643 |
41,067 |
38,786 |
41,980 |
38,322 |
|||||||
Common shareholders' equity |
6,633 |
5,972 |
5,842 |
6,150 |
5,543 |
|||||||
Total shareholders' equity |
6,633 |
5,972 |
5,842 |
6,150 |
6,134 |
|||||||
NET INTEREST INCOME |
||||||||||||
Net interest income (fully taxable equivalent basis) |
$ 424 |
$ 392 |
$ 405 |
$ 1,212 |
$ 1,245 |
|||||||
Fully taxable equivalent adjustment |
1 |
1 |
1 |
3 |
4 |
|||||||
Net interest margin (fully taxable equivalent basis) |
3.18 |
% |
3.14 |
% |
3.23 |
% |
3.19 |
% |
3.23 |
% |
||
CREDIT QUALITY |
||||||||||||
Nonaccrual loans |
$ 929 |
$ 941 |
$ 1,163 |
|||||||||
Reduced-rate loans |
29 |
33 |
28 |
|||||||||
Total nonperforming loans (e) |
958 |
974 |
1,191 |
|||||||||
Foreclosed property (f) |
87 |
70 |
120 |
|||||||||
Total nonperforming assets (e) |
1,045 |
1,044 |
1,311 |
|||||||||
Loans past due 90 days or more and still accruing |
81 |
64 |
104 |
|||||||||
Gross loan charge-offs |
90 |
125 |
145 |
$ 338 |
$ 487 |
|||||||
Loan recoveries |
13 |
35 |
13 |
70 |
36 |
|||||||
Net loan charge-offs |
77 |
90 |
132 |
268 |
451 |
|||||||
Lending-related commitment charge-offs |
- |
- |
- |
- |
- |
|||||||
Total net credit-related charge-offs |
77 |
90 |
132 |
268 |
451 |
|||||||
Allowance for loan losses |
767 |
806 |
957 |
|||||||||
Allowance for credit losses on lending-related commitments |
27 |
30 |
38 |
|||||||||
Total allowance for credit losses |
794 |
836 |
995 |
|||||||||
Allowance for loan losses as a percentage of total loans (g) |
1.86 |
% |
2.06 |
% |
2.38 |
% |
||||||
Net loan charge-offs as a percentage of average total loans |
0.77 |
0.92 |
1.32 |
0.90 |
% |
1.48 |
% |
|||||
Net credit-related charge-offs as a percentage of average total loans |
0.77 |
0.92 |
1.32 |
0.90 |
1.48 |
|||||||
Nonperforming assets as a percentage of total loans and foreclosed property (e) |
2.53 |
2.66 |
3.24 |
|||||||||
Allowance for loan losses as a percentage of total nonperforming loans |
80 |
83 |
80 |
|||||||||
(a) See Reconciliation of Non-GAAP Financial Measures. (b) September 30, 2011 ratios are estimated. (c) Primarily loans to real estate investors and developers. (d) Primarily loans secured by owner-occupied real estate. (e) Excludes loans acquired with credit-impairment. (f) Included Sterling foreclosed property of $24 million at September 30, 2011. (g) Reflects the impact of acquired loans, which were initially recorded at fair value with no related allowance for loan losses. |
||||||||||||
CONSOLIDATED BALANCE SHEETS |
||||||
Comerica Incorporated and Subsidiaries |
||||||
September 30, |
June 30, |
December 31, |
September 30, |
|||
(in millions, except share data) |
2011 |
2011 |
2010 |
2010 |
||
(unaudited) |
(unaudited) |
(unaudited) |
||||
ASSETS |
||||||
Cash and due from banks |
$ 981 |
$ 987 |
$ 668 |
$ 863 |
||
Federal funds sold and securities purchased under agreements to resell |
- |
- |
- |
100 |
||
Interest-bearing deposits with banks |
4,217 |
2,479 |
1,415 |
3,031 |
||
Other short-term investments |
137 |
124 |
141 |
115 |
||
Investment securities available-for-sale |
9,732 |
7,537 |
7,560 |
6,816 |
||
Commercial loans |
23,113 |
22,052 |
22,145 |
21,432 |
||
Real estate construction loans |
1,648 |
1,728 |
2,253 |
2,444 |
||
Commercial mortgage loans |
10,539 |
9,579 |
9,767 |
10,180 |
||
Residential mortgage loans |
1,643 |
1,491 |
1,619 |
1,586 |
||
Consumer loans |
2,309 |
2,232 |
2,311 |
2,403 |
||
Lease financing |
927 |
949 |
1,009 |
1,053 |
||
International loans |
1,046 |
1,162 |
1,132 |
1,182 |
||
Total loans |
41,225 |
39,193 |
40,236 |
40,280 |
||
Less allowance for loan losses |
(767) |
(806) |
(901) |
(957) |
||
Net loans |
40,458 |
38,387 |
39,335 |
39,323 |
||
Premises and equipment |
685 |
641 |
630 |
639 |
||
Customers' liability on acceptances outstanding |
8 |
10 |
9 |
13 |
||
Accrued income and other assets |
4,670 |
3,976 |
3,909 |
4,104 |
||
Total assets |
$ 60,888 |
$ 54,141 |
$ 53,667 |
$ 55,004 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||
Noninterest-bearing deposits |
$ 19,116 |
$ 16,344 |
$ 15,538 |
$ 15,763 |
||
Money market and NOW deposits |
20,237 |
18,033 |
17,622 |
17,288 |
||
Savings deposits |
1,771 |
1,462 |
1,397 |
1,363 |
||
Customer certificates of deposit |
5,980 |
5,551 |
5,482 |
5,723 |
||
Other time deposits |
45 |
- |
- |
- |
||
Foreign office time deposits |
303 |
368 |
432 |
494 |
||
Total interest-bearing deposits |
28,336 |
25,414 |
24,933 |
24,868 |
||
Total deposits |
47,452 |
41,758 |
40,471 |
40,631 |
||
Short-term borrowings |
164 |
67 |
130 |
179 |
||
Acceptances outstanding |
8 |
10 |
9 |
13 |
||
Accrued expenses and other liabilities |
1,304 |
1,062 |
1,126 |
1,085 |
||
Medium- and long-term debt |
5,009 |
5,206 |
6,138 |
7,239 |
||
Total liabilities |
53,937 |
48,103 |
47,874 |
49,147 |
||
Common stock - $5 par value: |
||||||
Authorized - 325,000,000 shares |
||||||
Issued - 228,164,824 shares at 9/30/11 and 203,878,110 shares at 6/30/11, |
||||||
12/31/10 and 9/30/10 |
1,141 |
1,019 |
1,019 |
1,019 |
||
Capital surplus |
2,162 |
1,472 |
1,481 |
1,473 |
||
Accumulated other comprehensive loss |
(230) |
(308) |
(389) |
(238) |
||
Retained earnings |
5,471 |
5,395 |
5,247 |
5,171 |
||
Less cost of common stock in treasury - 29,238,425 shares at 9/30/11, 27,092,427 shares at 6/30/11, 27,342,518 shares at 12/31/10, and 27,394,831 shares at 9/30/10 |
(1,593) |
(1,540) |
(1,565) |
(1,568) |
||
Total shareholders' equity |
6,951 |
6,038 |
5,793 |
5,857 |
||
Total liabilities and shareholders' equity |
$ 60,888 |
$ 54,141 |
$ 53,667 |
$ 55,004 |
||
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) |
2011 |
2010 |
2011 |
2010 |
||
INTEREST INCOME |
||||||
Interest and fees on loans |
$ 405 |
$ 399 |
$ 1,149 |
$ 1,223 |
||
Interest on investment securities |
54 |
55 |
170 |
177 |
||
Interest on short-term investments |
4 |
2 |
9 |
8 |
||
Total interest income |
463 |
456 |
1,328 |
1,408 |
||
INTEREST EXPENSE |
||||||
Interest on deposits |
24 |
27 |
69 |
91 |
||
Interest on medium- and long-term debt |
16 |
25 |
50 |
76 |
||
Total interest expense |
40 |
52 |
119 |
167 |
||
Net interest income |
423 |
404 |
1,209 |
1,241 |
||
Provision for loan losses |
38 |
122 |
134 |
423 |
||
Net interest income after provision for loan losses |
385 |
282 |
1,075 |
818 |
||
NONINTEREST INCOME |
||||||
Service charges on deposit accounts |
53 |
51 |
156 |
159 |
||
Fiduciary income |
37 |
38 |
115 |
115 |
||
Commercial lending fees |
22 |
22 |
64 |
66 |
||
Letter of credit fees |
19 |
19 |
55 |
56 |
||
Card fees |
17 |
15 |
47 |
43 |
||
Foreign exchange income |
11 |
8 |
30 |
28 |
||
Bank-owned life insurance |
10 |
9 |
27 |
26 |
||
Brokerage fees |
5 |
6 |
17 |
18 |
||
Net securities gains |
12 |
- |
18 |
3 |
||
Other noninterest income |
15 |
18 |
81 |
60 |
||
Total noninterest income |
201 |
186 |
610 |
574 |
||
NONINTEREST EXPENSES |
||||||
Salaries |
192 |
187 |
565 |
535 |
||
Employee benefits |
53 |
47 |
153 |
136 |
||
Total salaries and employee benefits |
245 |
234 |
718 |
671 |
||
Net occupancy expense |
44 |
40 |
122 |
120 |
||
Equipment expense |
17 |
15 |
49 |
47 |
||
Outside processing fee expense |
25 |
23 |
74 |
69 |
||
Software expense |
22 |
22 |
65 |
66 |
||
Merger and restructuring charges |
33 |
- |
38 |
- |
||
FDIC insurance expense |
8 |
14 |
35 |
47 |
||
Legal fees |
12 |
9 |
29 |
26 |
||
Advertising expense |
7 |
7 |
21 |
23 |
||
Other real estate expense |
5 |
7 |
19 |
24 |
||
Litigation and operational losses |
8 |
2 |
16 |
5 |
||
Provision for credit losses on lending-related commitments |
(3) |
(6) |
(8) |
1 |
||
Other noninterest expenses |
37 |
35 |
106 |
104 |
||
Total noninterest expenses |
460 |
402 |
1,284 |
1,203 |
||
Income from continuing operations before income taxes |
126 |
66 |
401 |
189 |
||
Provision for income taxes |
28 |
7 |
104 |
25 |
||
Income from continuing operations |
98 |
59 |
297 |
164 |
||
Income from discontinued operations, net of tax |
- |
- |
- |
17 |
||
NET INCOME |
98 |
59 |
297 |
181 |
||
Less: |
||||||
Preferred stock dividends |
- |
- |
- |
123 |
||
Income allocated to participating securities |
1 |
- |
3 |
- |
||
Net income attributable to common shares |
$ 97 |
$ 59 |
$ 294 |
$ 58 |
||
Basic earnings per common share: |
||||||
Income from continuing operations |
$ 0.51 |
$ 0.34 |
$ 1.63 |
$ 0.24 |
||
Net income |
0.51 |
0.34 |
1.63 |
0.34 |
||
Diluted earnings per common share: |
||||||
Income from continuing operations |
0.51 |
0.33 |
1.61 |
0.24 |
||
Net income |
0.51 |
0.33 |
1.61 |
0.34 |
||
Cash dividends declared on common stock |
20 |
9 |
55 |
26 |
||
Cash dividends declared per common share |
0.10 |
0.05 |
0.30 |
0.15 |
||
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (unaudited) |
||||||||||||||
Comerica Incorporated and Subsidiaries |
||||||||||||||
Third |
Second |
First |
Fourth |
Third |
Third Quarter 2011 Compared To: |
|||||||||
Quarter |
Quarter |
Quarter |
Quarter |
Quarter |
Second Quarter 2011 |
Third Quarter 2010 |
||||||||
(in millions, except per share data) |
2011 |
2011 |
2011 |
2010 |
2010 |
Amount |
Percent |
Amount |
Percent |
|||||
INTEREST INCOME |
||||||||||||||
Interest and fees on loans |
$ 405 |
$ 369 |
$ 375 |
$ 394 |
$ 399 |
$ 36 |
9 |
% |
$ 6 |
1 |
% |
|||
Interest on investment securities |
54 |
59 |
57 |
49 |
55 |
(5) |
(7) |
(1) |
- |
|||||
Interest on short-term investments |
4 |
3 |
2 |
2 |
2 |
1 |
41 |
2 |
49 |
|||||
Total interest income |
463 |
431 |
434 |
445 |
456 |
32 |
7 |
7 |
1 |
|||||
INTEREST EXPENSE |
||||||||||||||
Interest on deposits |
24 |
23 |
22 |
24 |
27 |
1 |
3 |
(3) |
(13) |
|||||
Interest on short-term borrowings |
- |
- |
- |
1 |
- |
- |
3 |
- |
(78) |
|||||
Interest on medium- and long-term debt |
16 |
17 |
17 |
15 |
25 |
(1) |
(8) |
(9) |
(36) |
|||||
Total interest expense |
40 |
40 |
39 |
40 |
52 |
- |
(2) |
(12) |
(24) |
|||||
Net interest income |
423 |
391 |
395 |
405 |
404 |
32 |
8 |
19 |
5 |
|||||
Provision for loan losses |
38 |
47 |
49 |
57 |
122 |
(9) |
(19) |
(84) |
(69) |
|||||
Net interest income after provision for loan losses |
385 |
344 |
346 |
348 |
282 |
41 |
12 |
103 |
36 |
|||||
NONINTEREST INCOME |
||||||||||||||
Service charges on deposit accounts |
53 |
51 |
52 |
49 |
51 |
2 |
5 |
2 |
3 |
|||||
Fiduciary income |
37 |
39 |
39 |
39 |
38 |
(2) |
(7) |
(1) |
(2) |
|||||
Commercial lending fees |
22 |
21 |
21 |
29 |
22 |
1 |
1 |
- |
(1) |
|||||
Letter of credit fees |
19 |
18 |
18 |
20 |
19 |
1 |
2 |
- |
(1) |
|||||
Card fees |
17 |
15 |
15 |
15 |
15 |
2 |
6 |
2 |
12 |
|||||
Foreign exchange income |
11 |
10 |
9 |
11 |
8 |
1 |
14 |
3 |
30 |
|||||
Bank-owned life insurance |
10 |
9 |
8 |
14 |
9 |
1 |
14 |
1 |
10 |
|||||
Brokerage fees |
5 |
6 |
6 |
7 |
6 |
(1) |
(4) |
(1) |
(8) |
|||||
Net securities gains |
12 |
4 |
2 |
- |
- |
8 |
N/M |
12 |
N/M |
|||||
Other noninterest income |
15 |
29 |
37 |
31 |
18 |
(14) |
(47) |
(3) |
(18) |
|||||
Total noninterest income |
201 |
202 |
207 |
215 |
186 |
(1) |
(1) |
15 |
7 |
|||||
NONINTEREST EXPENSES |
||||||||||||||
Salaries |
192 |
185 |
188 |
205 |
187 |
7 |
4 |
5 |
3 |
|||||
Employee benefits |
53 |
50 |
50 |
43 |
47 |
3 |
6 |
6 |
13 |
|||||
Total salaries and employee benefits |
245 |
235 |
238 |
248 |
234 |
10 |
4 |
11 |
5 |
|||||
Net occupancy expense |
44 |
38 |
40 |
42 |
40 |
6 |
12 |
4 |
9 |
|||||
Equipment expense |
17 |
17 |
15 |
16 |
15 |
- |
3 |
2 |
9 |
|||||
Outside processing fee expense |
25 |
25 |
24 |
27 |
23 |
- |
2 |
2 |
10 |
|||||
Software expense |
22 |
20 |
23 |
23 |
22 |
2 |
5 |
- |
- |
|||||
Merger and restructuring charges |
33 |
5 |
- |
- |
- |
28 |
N/M |
33 |
N/M |
|||||
FDIC insurance expense |
8 |
12 |
15 |
15 |
14 |
(4) |
(42) |
(6) |
(49) |
|||||
Legal fees |
12 |
8 |
9 |
9 |
9 |
4 |
39 |
3 |
32 |
|||||
Advertising expense |
7 |
7 |
7 |
8 |
7 |
- |
- |
- |
(5) |
|||||
Other real estate expense |
5 |
6 |
8 |
5 |
7 |
(1) |
(2) |
(2) |
(28) |
|||||
Litigation and operational losses |
8 |
5 |
3 |
6 |
2 |
3 |
83 |
6 |
N/M |
|||||
Provision for credit losses on lending-related commitments |
(3) |
(2) |
(3) |
(3) |
(6) |
(1) |
(52) |
3 |
49 |
|||||
Other noninterest expenses |
37 |
33 |
36 |
41 |
35 |
4 |
18 |
2 |
10 |
|||||
Total noninterest expenses |
460 |
409 |
415 |
437 |
402 |
51 |
12 |
58 |
14 |
|||||
Income before income taxes |
126 |
137 |
138 |
126 |
66 |
(11) |
(8) |
60 |
88 |
|||||
Provision for income taxes |
28 |
41 |
35 |
30 |
7 |
(13) |
(33) |
21 |
N/M |
|||||
NET INCOME |
98 |
96 |
103 |
96 |
59 |
2 |
2 |
39 |
65 |
|||||
Less: |
||||||||||||||
Income allocated to participating securities |
1 |
1 |
1 |
1 |
- |
- |
(9) |
1 |
65 |
|||||
Net income attributable to common shares |
$ 97 |
$ 95 |
$ 102 |
$ 95 |
$ 59 |
$ 2 |
2 |
% |
$ 38 |
65 |
% |
|||
Earnings per common share: |
||||||||||||||
Basic |
$ 0.51 |
$ 0.54 |
$ 0.58 |
$ 0.54 |
$ 0.34 |
$ (0.03) |
(6) |
% |
$ 0.17 |
50 |
% |
|||
Diluted |
0.51 |
0.53 |
0.57 |
0.53 |
0.33 |
(0.02) |
(4) |
0.18 |
55 |
|||||
Cash dividends declared on common stock |
20 |
18 |
17 |
18 |
9 |
2 |
11 |
11 |
N/M |
|||||
Cash dividends declared per common share |
0.10 |
0.10 |
0.10 |
0.10 |
0.05 |
- |
- |
0.05 |
N/M |
|||||
N/M - Not meaningful |
||||||||||||||
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited) |
|||||||||||
Comerica Incorporated and Subsidiaries |
|||||||||||
2011 |
2010 |
||||||||||
(in millions) |
3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
||||||
Balance at beginning of period |
$ 806 |
$ 849 |
$ 901 |
$ 957 |
$ 967 |
||||||
Loan charge-offs: |
|||||||||||
Commercial |
33 |
66 |
65 |
43 |
38 |
||||||
Real estate construction: |
|||||||||||
Commercial Real Estate business line (a) |
11 |
12 |
8 |
34 |
40 |
||||||
Other business lines (b) |
- |
- |
1 |
- |
1 |
||||||
Total real estate construction |
11 |
12 |
9 |
34 |
41 |
||||||
Commercial mortgage: |
|||||||||||
Commercial Real Estate business line (a) |
12 |
8 |
9 |
9 |
16 |
||||||
Other business lines (b) |
21 |
23 |
25 |
34 |
40 |
||||||
Total commercial mortgage |
33 |
31 |
34 |
43 |
56 |
||||||
Residential mortgage |
4 |
7 |
2 |
5 |
2 |
||||||
Consumer |
9 |
9 |
8 |
15 |
7 |
||||||
Lease financing |
- |
- |
- |
- |
- |
||||||
International |
- |
- |
5 |
- |
1 |
||||||
Total loan charge-offs |
90 |
125 |
123 |
140 |
145 |
||||||
Recoveries on loans previously charged-off: |
|||||||||||
Commercial |
5 |
13 |
4 |
7 |
7 |
||||||
Real estate construction |
3 |
5 |
2 |
3 |
1 |
||||||
Commercial mortgage |
3 |
5 |
9 |
10 |
2 |
||||||
Residential mortgage |
1 |
1 |
- |
1 |
- |
||||||
Consumer |
1 |
1 |
1 |
2 |
1 |
||||||
Lease financing |
- |
6 |
5 |
4 |
1 |
||||||
International |
- |
4 |
1 |
- |
1 |
||||||
Total recoveries |
13 |
35 |
22 |
27 |
13 |
||||||
Net loan charge-offs |
77 |
90 |
101 |
113 |
132 |
||||||
Provision for loan losses |
38 |
47 |
49 |
57 |
122 |
||||||
Balance at end of period |
$ 767 |
$ 806 |
$ 849 |
$ 901 |
$ 957 |
||||||
Allowance for loan losses as a percentage of total loans (c) |
1.86 |
% |
2.06 |
% |
2.17 |
% |
2.24 |
% |
2.38 |
% |
|
Net loan charge-offs as a percentage of average total loans |
0.77 |
0.92 |
1.03 |
1.13 |
1.32 |
||||||
Net credit-related charge-offs as a percentage of average total loans |
0.77 |
0.92 |
1.03 |
1.13 |
1.32 |
||||||
(a) Primarily charge-offs of loans to real estate investors and developers. (b) Primarily charge-offs of loans secured by owner-occupied real estate. (c) Reflects the impact of acquired loans, which were initially recorded at fair value with no related allowance for loan losses. |
|||||||||||
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited) |
||||||||||
Comerica Incorporated and Subsidiaries |
||||||||||
2011 |
2010 |
|||||||||
(in millions) |
3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
|||||
Balance at beginning of period |
$ 30 |
$ 32 |
$ 35 |
$ 38 |
$ 44 |
|||||
Add: Provision for credit losses on lending-related commitments |
(3) |
(2) |
(3) |
(3) |
(6) |
|||||
Balance at end of period |
$ 27 |
$ 30 |
$ 32 |
$ 35 |
$ 38 |
|||||
Unfunded lending-related commitments sold |
$ - |
$ 3 |
$ 2 |
$ - |
$ - |
|||||
NONPERFORMING ASSETS (unaudited) |
||||||||||||
Comerica Incorporated and Subsidiaries |
||||||||||||
2011 |
2010 |
|||||||||||
(in millions) |
3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
|||||||
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS |
||||||||||||
Nonaccrual loans: |
||||||||||||
Business loans: |
||||||||||||
Commercial |
$ 258 |
$ 261 |
$ 226 |
$ 252 |
$ 258 |
|||||||
Real estate construction: |
||||||||||||
Commercial Real Estate business line (a) |
109 |
137 |
195 |
259 |
362 |
|||||||
Other business lines (b) |
3 |
2 |
3 |
4 |
4 |
|||||||
Total real estate construction |
112 |
139 |
198 |
263 |
366 |
|||||||
Commercial mortgage: |
||||||||||||
Commercial Real Estate business line (a) |
198 |
186 |
197 |
181 |
153 |
|||||||
Other business lines (b) |
275 |
269 |
293 |
302 |
304 |
|||||||
Total commercial mortgage |
473 |
455 |
490 |
483 |
457 |
|||||||
Lease financing |
5 |
6 |
7 |
7 |
10 |
|||||||
International |
7 |
7 |
4 |
2 |
2 |
|||||||
Total nonaccrual business loans |
855 |
868 |
925 |
1,007 |
1,093 |
|||||||
Retail loans: |
||||||||||||
Residential mortgage |
65 |
60 |
58 |
55 |
59 |
|||||||
Consumer: |
||||||||||||
Home equity |
4 |
4 |
6 |
5 |
5 |
|||||||
Other consumer |
5 |
9 |
7 |
13 |
6 |
|||||||
Total consumer |
9 |
13 |
13 |
18 |
11 |
|||||||
Total nonaccrual retail loans |
74 |
73 |
71 |
73 |
70 |
|||||||
Total nonaccrual loans |
929 |
941 |
996 |
1,080 |
1,163 |
|||||||
Reduced-rate loans |
29 |
33 |
34 |
43 |
28 |
|||||||
Total nonperforming loans (c) |
958 |
974 |
1,030 |
1,123 |
1,191 |
|||||||
Foreclosed property (d) |
87 |
70 |
74 |
112 |
120 |
|||||||
Total nonperforming assets (c) |
$ 1,045 |
$ 1,044 |
$ 1,104 |
$ 1,235 |
$ 1,311 |
|||||||
Nonperforming loans as a percentage of total loans |
2.32 |
% |
2.49 |
% |
2.63 |
% |
2.79 |
% |
2.96 |
% |
||
Nonperforming assets as a percentage of total loans and foreclosed property |
2.53 |
2.66 |
2.81 |
3.06 |
3.24 |
|||||||
Allowance for loan losses as a percentage of total nonperforming loans |
80 |
83 |
82 |
80 |
80 |
|||||||
Loans past due 90 days or more and still accruing |
$ 81 |
$ 64 |
$ 72 |
$ 62 |
$ 104 |
|||||||
ANALYSIS OF NONACCRUAL LOANS |
||||||||||||
Nonaccrual loans at beginning of period |
$ 941 |
$ 996 |
$ 1,080 |
$ 1,163 |
$ 1,098 |
|||||||
Loans transferred to nonaccrual (e) |
130 |
150 |
149 |
173 |
290 |
|||||||
Nonaccrual business loan gross charge-offs (f) |
(76) |
(109) |
(111) |
(120) |
(136) |
|||||||
Loans transferred to accrual status (e) |
(15) |
- |
(4) |
(4) |
(10) |
|||||||
Nonaccrual business loans sold (g) |
(15) |
(9) |
(60) |
(41) |
(12) |
|||||||
Payments/Other (h) |
(36) |
(87) |
(58) |
(91) |
(67) |
|||||||
Nonaccrual loans at end of period |
$ 929 |
$ 941 |
$ 996 |
$ 1,080 |
$ 1,163 |
|||||||
(a) Primarily loans to real estate investors and developers. |
||||||||||||
(b) Primarily loans secured by owner-occupied real estate. |
||||||||||||
(c) Excludes loans acquired with credit impairment. |
||||||||||||
(d) Included Sterling foreclosed property of $24 million at September 30, 2011. |
||||||||||||
(e) Based on an analysis of nonaccrual loans with book balances greater than $2 million. |
||||||||||||
(f) Analysis of gross loan charge-offs: |
||||||||||||
Nonaccrual business loans |
$ 76 |
$ 109 |
$ 111 |
$ 120 |
$ 136 |
|||||||
Performing watch list loans |
1 |
- |
2 |
- |
- |
|||||||
Consumer and residential mortgage loans |
13 |
16 |
10 |
20 |
9 |
|||||||
Total gross loan charge-offs |
$ 90 |
$ 125 |
$ 123 |
$ 140 |
$ 145 |
|||||||
(g) Analysis of loans sold: |
||||||||||||
Nonaccrual business loans |
$ 15 |
$ 9 |
$ 60 |
$ 41 |
$ 12 |
|||||||
Performing watch list loans |
16 |
6 |
35 |
29 |
7 |
|||||||
Total loans sold |
$ 31 |
$ 15 |
$ 95 |
$ 70 |
$ 19 |
|||||||
(h) 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) |
|||||||||||
Comerica Incorporated and Subsidiaries |
|||||||||||
Nine Months Ended |
|||||||||||
September 30, 2011 |
September 30, 2010 |
||||||||||
Average |
Average |
Average |
Average |
||||||||
(dollar amounts in millions) |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
|||||
Commercial loans |
$ 21,769 |
$ 603 |
3.70 |
% |
$ 20,963 |
$ 614 |
3.92 |
% |
|||
Real estate construction loans |
1,918 |
59 |
4.12 |
2,997 |
69 |
3.08 |
|||||
Commercial mortgage loans |
9,902 |
306 |
4.12 |
10,338 |
321 |
4.15 |
|||||
Residential mortgage loans |
1,577 |
63 |
5.34 |
1,610 |
65 |
5.37 |
|||||
Consumer loans |
2,272 |
59 |
3.47 |
2,450 |
65 |
3.55 |
|||||
Lease financing |
960 |
25 |
3.53 |
1,100 |
31 |
3.72 |
|||||
International loans |
1,212 |
35 |
3.89 |
1,233 |
37 |
3.96 |
|||||
Business loan swap income |
- |
1 |
- |
- |
24 |
- |
|||||
Total loans (a) |
39,610 |
1,151 |
3.88 |
40,691 |
1,226 |
4.02 |
|||||
Auction-rate securities available-for-sale |
497 |
3 |
0.75 |
789 |
6 |
1.04 |
|||||
Other investment securities available-for-sale |
7,131 |
168 |
3.20 |
6,393 |
172 |
3.66 |
|||||
Total investment securities available-for-sale |
7,628 |
171 |
3.03 |
7,182 |
178 |
3.36 |
|||||
Federal funds sold and securities purchased under agreements to resell |
2 |
- |
0.33 |
5 |
- |
0.38 |
|||||
Interest-bearing deposits with banks (b) |
3,555 |
7 |
0.24 |
3,641 |
7 |
0.25 |
|||||
Other short-term investments |
128 |
2 |
2.14 |
126 |
1 |
1.64 |
|||||
Total earning assets |
50,923 |
1,331 |
3.50 |
51,645 |
1,412 |
3.66 |
|||||
Cash and due from banks |
908 |
809 |
|||||||||
Allowance for loan losses |
(860) |
(1,033) |
|||||||||
Accrued income and other assets |
4,555 |
4,737 |
|||||||||
Total assets |
$ 55,526 |
$ 56,158 |
|||||||||
Money market and NOW deposits |
$ 18,539 |
36 |
0.26 |
$ 16,035 |
38 |
0.32 |
|||||
Savings deposits |
1,516 |
1 |
0.11 |
1,397 |
1 |
0.07 |
|||||
Customer certificates of deposit |
5,666 |
30 |
0.70 |
5,968 |
42 |
0.94 |
|||||
Total interest-bearing core deposits |
25,721 |
67 |
0.35 |
23,400 |
81 |
0.46 |
|||||
Other time deposits |
26 |
- |
0.38 |
409 |
9 |
3.04 |
|||||
Foreign office time deposits |
402 |
2 |
0.51 |
462 |
1 |
0.27 |
|||||
Total interest-bearing deposits |
26,149 |
69 |
0.35 |
24,271 |
91 |
0.50 |
|||||
Short-term borrowings |
137 |
- |
0.15 |
230 |
- |
0.24 |
|||||
Medium- and long-term debt |
5,702 |
50 |
1.17 |
9,521 |
76 |
1.06 |
|||||
Total interest-bearing sources |
31,988 |
119 |
0.50 |
34,022 |
167 |
0.65 |
|||||
Noninterest-bearing deposits |
16,259 |
14,922 |
|||||||||
Accrued expenses and other liabilities |
1,129 |
1,080 |
|||||||||
Total shareholders' equity |
6,150 |
6,134 |
|||||||||
Total liabilities and shareholders' equity |
$ 55,526 |
$ 56,158 |
|||||||||
Net interest income/rate spread (FTE) |
$ 1,212 |
3.00 |
$ 1,245 |
3.01 |
|||||||
FTE adjustment |
$ 3 |
$ 4 |
|||||||||
Impact of net noninterest-bearing sources of funds |
0.19 |
0.22 |
|||||||||
Net interest margin (as a percentage |
|||||||||||
of average earning assets) (FTE) (a) (b) |
3.19 |
% |
3.23 |
% |
|||||||
(a) Accretion of the purchase discount on the acquired loan portfolio of $27 million increased the net interest margin by seven basis points year-to-date 2011. (b) Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 22 basis points both year-to-date 2011 and 2010. |
|||||||||||
ANALYSIS OF NET INTEREST INCOME (FTE) |
||||||||||||||||
Comerica Incorporated and Subsidiaries |
||||||||||||||||
Three Months Ended |
||||||||||||||||
September 30, 2011 |
June 30, 2011 |
September 30, 2010 |
||||||||||||||
Average |
Average |
Average |
Average |
Average |
Average |
|||||||||||
(dollar amounts in millions) |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
|||||||
Commercial loans |
$ 22,127 |
$ 207 |
3.70 |
% |
$ 21,677 |
$ 196 |
3.65 |
% |
$ 20,967 |
$ 203 |
3.84 |
% |
||||
Real estate construction loans |
1,699 |
23 |
5.28 |
1,881 |
17 |
3.75 |
2,625 |
21 |
3.19 |
|||||||
Commercial mortgage loans |
10,275 |
115 |
4.42 |
9,636 |
96 |
3.98 |
10,257 |
105 |
4.06 |
|||||||
Residential mortgage loans |
1,606 |
21 |
5.30 |
1,525 |
21 |
5.50 |
1,590 |
21 |
5.25 |
|||||||
Consumer loans |
2,292 |
20 |
3.56 |
2,243 |
20 |
3.42 |
2,421 |
21 |
3.53 |
|||||||
Lease financing |
936 |
8 |
3.46 |
958 |
8 |
3.50 |
1,064 |
10 |
3.69 |
|||||||
International loans |
1,163 |
11 |
4.01 |
1,254 |
12 |
3.80 |
1,178 |
12 |
3.89 |
|||||||
Business loan swap income |
- |
- |
- |
- |
- |
- |
- |
7 |
- |
|||||||
Total loans (a) |
40,098 |
405 |
4.01 |
39,174 |
370 |
3.79 |
40,102 |
400 |
3.96 |
|||||||
Auction-rate securities available-for-sale |
437 |
1 |
0.63 |
500 |
1 |
0.71 |
673 |
1 |
0.99 |
|||||||
Other investment securities available-for-sale |
7,721 |
54 |
2.87 |
6,907 |
58 |
3.40 |
6,233 |
54 |
3.54 |
|||||||
Total investment securities available-for-sale |
8,158 |
55 |
2.74 |
7,407 |
59 |
3.20 |
6,906 |
55 |
3.27 |
|||||||
Federal funds sold and securities purchased under agreements to resell |
- |
- |
0.44 |
2 |
- |
0.33 |
13 |
- |
0.31 |
|||||||
Interest-bearing deposits with banks (b) |
4,851 |
3 |
0.23 |
3,433 |
3 |
0.25 |
3,047 |
2 |
0.25 |
|||||||
Other short-term investments |
136 |
1 |
2.30 |
120 |
- |
1.39 |
121 |
- |
1.53 |
|||||||
Total earning assets |
53,243 |
464 |
3.47 |
50,136 |
432 |
3.46 |
50,189 |
457 |
3.64 |
|||||||
Cash and due from banks |
969 |
872 |
843 |
|||||||||||||
Allowance for loan losses |
(814) |
(859) |
(1,003) |
|||||||||||||
Accrued income and other assets |
4,840 |
4,368 |
4,700 |
|||||||||||||
Total assets |
$ 58,238 |
$ 54,517 |
$ 54,729 |
|||||||||||||
Money market and NOW deposits |
$ 19,595 |
$ 13 |
0.25 |
$ 18,207 |
$ 11 |
0.26 |
$ 16,681 |
$ 13 |
0.31 |
|||||||
Savings deposits |
1,659 |
- |
0.14 |
1,465 |
1 |
0.09 |
1,377 |
1 |
0.08 |
|||||||
Customer certificates of deposit |
5,878 |
10 |
0.66 |
5,609 |
10 |
0.70 |
5,808 |
12 |
0.87 |
|||||||
Total interest-bearing core deposits |
27,132 |
23 |
0.33 |
25,281 |
22 |
0.35 |
23,866 |
26 |
0.43 |
|||||||
Other time deposits |
76 |
- |
0.38 |
- |
- |
- |
65 |
- |
0.51 |
|||||||
Foreign office time deposits |
379 |
1 |
0.52 |
413 |
1 |
0.52 |
479 |
1 |
0.36 |
|||||||
Total interest-bearing deposits |
27,587 |
24 |
0.33 |
25,694 |
23 |
0.35 |
24,410 |
27 |
0.43 |
|||||||
Short-term borrowings |
204 |
- |
0.08 |
112 |
- |
0.14 |
208 |
- |
0.35 |
|||||||
Medium- and long-term debt |
5,168 |
16 |
1.23 |
5,821 |
17 |
1.20 |
8,245 |
25 |
1.21 |
|||||||
Total interest-bearing sources |
32,959 |
40 |
0.47 |
31,627 |
40 |
0.51 |
32,863 |
52 |
0.63 |
|||||||
Noninterest-bearing deposits |
17,511 |
15,786 |
14,920 |
|||||||||||||
Accrued expenses and other liabilities |
1,135 |
1,132 |
1,104 |
|||||||||||||
Total shareholders' equity |
6,633 |
5,972 |
5,842 |
|||||||||||||
Total liabilities and shareholders' equity |
$ 58,238 |
$ 54,517 |
$ 54,729 |
|||||||||||||
Net interest income/rate spread (FTE) |
$ 424 |
3.00 |
$ 392 |
2.95 |
$ 405 |
3.01 |
||||||||||
FTE adjustment |
$ 1 |
$ 1 |
$ 1 |
|||||||||||||
Impact of net noninterest-bearing sources of funds |
0.18 |
0.19 |
0.22 |
|||||||||||||
Net interest margin (as a percentage of average earning assets) (FTE) (a) (b) |
3.18 |
% |
3.14 |
% |
3.23 |
% |
||||||||||
(a) Accretion of the purchase discount on the acquired loan portfolio of $27 million increased the net interest margin by 20 basis points in the third quarter 2011. (b) Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 29 basis points and by 21 points in the third and second quarters of 2011, respectively, and by 19 basis points in the third quarter of 2010. |
||||||||||||||||
CONSOLIDATED STATISTICAL DATA (unaudited) |
||||||||||||
Comerica Incorporated and Subsidiaries |
||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
||||||||
(in millions, except per share data) |
2011 |
2011 |
2011 |
2010 |
2010 |
|||||||
Commercial loans: |
||||||||||||
Floor plan |
$ 1,209 |
$ 1,478 |
$ 1,893 |
$ 2,017 |
$ 1,693 |
|||||||
Other |
21,904 |
20,574 |
19,467 |
20,128 |
19,739 |
|||||||
Total commercial loans |
23,113 |
22,052 |
21,360 |
22,145 |
21,432 |
|||||||
Real estate construction loans: |
||||||||||||
Commercial Real Estate business line (a) |
1,164 |
1,343 |
1,606 |
1,826 |
2,023 |
|||||||
Other business lines (b) |
484 |
385 |
417 |
427 |
421 |
|||||||
Total real estate construction loans |
1,648 |
1,728 |
2,023 |
2,253 |
2,444 |
|||||||
Commercial mortgage loans: |
||||||||||||
Commercial Real Estate business line (a) |
2,271 |
1,930 |
1,918 |
1,937 |
2,091 |
|||||||
Other business lines (b) |
8,268 |
7,649 |
7,779 |
7,830 |
8,089 |
|||||||
Total commercial mortgage loans |
10,539 |
9,579 |
9,697 |
9,767 |
10,180 |
|||||||
Residential mortgage loans |
1,643 |
1,491 |
1,550 |
1,619 |
1,586 |
|||||||
Consumer loans: |
||||||||||||
Home equity |
1,683 |
1,622 |
1,661 |
1,704 |
1,736 |
|||||||
Other consumer |
626 |
610 |
601 |
607 |
667 |
|||||||
Total consumer loans |
2,309 |
2,232 |
2,262 |
2,311 |
2,403 |
|||||||
Lease financing |
927 |
949 |
958 |
1,009 |
1,053 |
|||||||
International loans |
1,046 |
1,162 |
1,326 |
1,132 |
1,182 |
|||||||
Total loans |
$ 41,225 |
$ 39,193 |
$ 39,176 |
$ 40,236 |
$ 40,280 |
|||||||
Goodwill |
$ 635 |
$ 150 |
$ 150 |
$ 150 |
$ 150 |
|||||||
Core deposit intangible |
32 |
- |
- |
- |
- |
|||||||
Loan servicing rights |
3 |
4 |
4 |
5 |
5 |
|||||||
Tier 1 common capital ratio (c) (d) |
10.57 |
% |
10.53 |
% |
10.35 |
% |
10.13 |
% |
9.96 |
% |
||
Tier 1 risk-based capital ratio (d) |
10.65 |
10.53 |
10.35 |
10.13 |
9.96 |
|||||||
Total risk-based capital ratio (d) |
14.84 |
14.80 |
14.80 |
14.54 |
14.37 |
|||||||
Leverage ratio (d) |
11.41 |
11.40 |
11.37 |
11.26 |
10.91 |
|||||||
Tangible common equity ratio (c) |
10.43 |
10.90 |
10.43 |
10.54 |
10.39 |
|||||||
Book value per common share |
$ 34.94 |
$ 34.15 |
$ 33.25 |
$ 32.82 |
$ 33.19 |
|||||||
Market value per share for the quarter: |
||||||||||||
High |
35.79 |
39.00 |
43.53 |
43.44 |
40.21 |
|||||||
Low |
21.48 |
33.08 |
36.20 |
34.43 |
33.11 |
|||||||
Close |
22.97 |
34.57 |
36.72 |
42.24 |
37.15 |
|||||||
Quarterly ratios: |
||||||||||||
Return on average common shareholders' equity |
5.91 |
% |
6.41 |
% |
7.08 |
% |
6.53 |
% |
4.07 |
% |
||
Return on average assets |
0.67 |
0.70 |
0.77 |
0.71 |
0.43 |
|||||||
Efficiency ratio |
75.11 |
69.33 |
69.05 |
70.38 |
67.88 |
|||||||
Number of banking centers |
502 |
446 |
445 |
444 |
441 |
|||||||
Number of employees - full time equivalent (e) |
9,701 |
8,915 |
8,955 |
9,001 |
9,075 |
|||||||
(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, 2011 ratios are estimated. (e) Included 749 Sterling employees at September 30, 2011. |
||||||||||||
PARENT COMPANY ONLY BALANCE SHEETS (unaudited) |
|||||
Comerica Incorporated |
|||||
September 30, |
December 31, |
September 30, |
|||
(in millions, except share data) |
2011 |
2010 |
2010 |
||
ASSETS |
|||||
Cash and due from subsidiary bank |
$ 3 |
$ - |
$ 10 |
||
Short-term investments with subsidiary bank |
440 |
327 |
793 |
||
Other short-term investments |
86 |
86 |
82 |
||
Investment in subsidiaries, principally banks |
7,098 |
5,957 |
6,039 |
||
Premises and equipment |
3 |
4 |
3 |
||
Other assets |
189 |
181 |
202 |
||
Total assets |
$ 7,819 |
$ 6,555 |
$ 7,129 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Medium- and long-term debt |
$ 722 |
$ 635 |
$ 1,155 |
||
Other liabilities |
146 |
127 |
117 |
||
Total liabilities |
868 |
762 |
1,272 |
||
Common stock - $5 par value: |
|||||
Authorized - 325,000,000 shares |
|||||
Issued - 228,164,824 shares at 9/30/2011 and 203,878,110 shares at 12/31/2010 and 9/30/2010 |
1,141 |
1,019 |
1,019 |
||
Capital surplus |
2,162 |
1,481 |
1,473 |
||
Accumulated other comprehensive loss |
(230) |
(389) |
(238) |
||
Retained earnings |
5,471 |
5,247 |
5,171 |
||
Less cost of common stock in treasury - 29,238,425 shares at 9/30/11, 27,342,518 shares at 12/31/10, and 27,394,831 shares at 9/30/10 |
(1,593) |
(1,565) |
(1,568) |
||
Total shareholders' equity |
6,951 |
5,793 |
5,857 |
||
Total liabilities and shareholders' equity |
$ 7,819 |
$ 6,555 |
$ 7,129 |
||
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) |
|||||||||
Comerica Incorporated and Subsidiaries |
|||||||||
Accumulated |
|||||||||
Common Stock |
Other |
Total |
|||||||
Preferred |
Shares |
Capital |
Comprehensive |
Retained |
Treasury |
Shareholders' |
|||
(in millions, except per share data) |
Stock |
Outstanding |
Amount |
Surplus |
Loss |
Earnings |
Stock |
Equity |
|
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 ($0.15 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 |
|
BALANCE AT DECEMBER 31, 2010 |
$ - |
176.5 |
$ 1,019 |
$ 1,481 |
$ (389) |
$ 5,247 |
$ (1,565) |
$ 5,793 |
|
Net income |
- |
- |
- |
- |
- |
297 |
- |
297 |
|
Other comprehensive income, net of tax |
- |
- |
- |
- |
159 |
- |
- |
159 |
|
Total comprehensive income |
456 |
||||||||
Cash dividends declared on common stock ($0.30 per share) |
- |
- |
- |
- |
- |
(55) |
- |
(55) |
|
Purchase of common stock |
- |
(2.7) |
- |
- |
- |
- |
(75) |
(75) |
|
Acquisition of Sterling Bancshares, Inc. |
- |
24.3 |
122 |
681 |
- |
- |
- |
803 |
|
Net issuance of common stock under employee stock plans |
- |
0.8 |
- |
(29) |
- |
(18) |
47 |
- |
|
Share-based compensation |
- |
- |
- |
29 |
- |
- |
- |
29 |
|
BALANCE AT SEPTEMBER 30, 2011 |
$ - |
198.9 |
$ 1,141 |
$ 2,162 |
$ (230) |
$ 5,471 |
$ (1,593) |
$ 6,951 |
|
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited) |
|||||||||||||
Comerica Incorporated and Subsidiaries |
|||||||||||||
(dollar amounts in millions) Three Months Ended September 30, 2011 |
Business Bank |
Retail Bank |
Wealth Management |
Finance |
Other |
Total |
|||||||
Earnings summary: |
|||||||||||||
Net interest income (expense) (FTE) |
$ 363 |
$ 173 |
$ 45 |
$ (167) |
$ 10 |
$ 424 |
|||||||
Provision for loan losses |
20 |
17 |
6 |
- |
(5) |
38 |
|||||||
Noninterest income |
77 |
47 |
56 |
25 |
(4) |
201 |
|||||||
Noninterest expenses |
162 |
174 |
78 |
3 |
43 |
460 |
|||||||
Provision (benefit) for income taxes (FTE) |
79 |
10 |
6 |
(54) |
(12) |
29 |
|||||||
Net income (loss) |
$ 179 |
$ 19 |
$ 11 |
$ (91) |
$ (20) |
$ 98 |
|||||||
Net credit-related charge-offs |
$ 40 |
$ 28 |
$ 9 |
$ - |
$ - |
$ 77 |
|||||||
Selected average balances: |
|||||||||||||
Assets |
$ 30,602 |
$ 5,991 |
$ 4,674 |
$ 10,176 |
$ 6,795 |
$ 58,238 |
|||||||
Loans |
29,949 |
5,489 |
4,652 |
2 |
6 |
40,098 |
|||||||
Deposits |
21,754 |
19,797 |
3,198 |
236 |
113 |
45,098 |
|||||||
Statistical data: |
|||||||||||||
Return on average assets (a) |
2.34 |
% |
0.38 |
% |
0.95 |
% |
N/M |
N/M |
0.67 |
% |
|||
Net interest margin (b) |
4.81 |
3.46 |
3.85 |
N/M |
N/M |
3.18 |
|||||||
Efficiency ratio |
36.70 |
78.97 |
78.00 |
N/M |
N/M |
75.11 |
|||||||
Three Months Ended June 30, 2011 |
Business Bank |
Retail Bank |
Wealth Management |
Finance |
Other |
Total |
|||||||
Earnings summary: |
|||||||||||||
Net interest income (expense) (FTE) |
$ 342 |
$ 141 |
$ 48 |
$ (147) |
$ 8 |
$ 392 |
|||||||
Provision for loan losses |
6 |
24 |
14 |
- |
3 |
47 |
|||||||
Noninterest income |
79 |
46 |
63 |
11 |
3 |
202 |
|||||||
Noninterest expenses |
158 |
162 |
76 |
3 |
10 |
409 |
|||||||
Provision (benefit) for income taxes (FTE) |
81 |
4 |
9 |
(52) |
- |
42 |
|||||||
Net income (loss) |
$ 176 |
$ (3) |
$ 12 |
$ (87) |
$ (2) |
$ 96 |
|||||||
Net credit-related charge-offs |
$ 54 |
$ 22 |
$ 14 |
$ - |
$ - |
$ 90 |
|||||||
Selected average balances: |
|||||||||||||
Assets |
$ 29,893 |
$ 5,453 |
$ 4,728 |
$ 9,406 |
$ 5,037 |
$ 54,517 |
|||||||
Loans |
29,380 |
4,999 |
4,742 |
48 |
5 |
39,174 |
|||||||
Deposits |
20,396 |
17,737 |
2,978 |
239 |
130 |
41,480 |
|||||||
Statistical data: |
|||||||||||||
Return on average assets (a) |
2.35 |
% |
(0.06) |
% |
1.03 |
% |
N/M |
N/M |
0.70 |
% |
|||
Net interest margin (b) |
4.65 |
3.22 |
4.07 |
N/M |
N/M |
3.14 |
|||||||
Efficiency ratio |
37.41 |
86.48 |
71.40 |
N/M |
N/M |
69.33 |
|||||||
Three Months Ended September 30, 2010 |
Business Bank |
Retail Bank |
Wealth 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 |
|||||||
Statistical data: |
|||||||||||||
Return on average assets (a) |
1.75 |
% |
(0.16) |
% |
(0.79) |
% |
N/M |
N/M |
0.43 |
% |
|||
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 |
|||||||
(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, 2011 |
Midwest |
Western |
Texas |
Florida |
Other Markets |
International |
Finance & Other Businesses |
Total |
|||||||||
Earnings summary: |
|||||||||||||||||
Net interest income (expense) (FTE) |
$ 199 |
$ 166 |
$ 143 |
$ 11 |
$ 41 |
$ 21 |
$ (157) |
$ 424 |
|||||||||
Provision for loan losses |
21 |
14 |
(7) |
2 |
11 |
2 |
(5) |
38 |
|||||||||
Noninterest income |
96 |
32 |
29 |
4 |
10 |
9 |
21 |
201 |
|||||||||
Noninterest expenses |
183 |
106 |
79 |
11 |
25 |
10 |
46 |
460 |
|||||||||
Provision (benefit) for income taxes (FTE) |
32 |
29 |
35 |
1 |
(8) |
6 |
(66) |
29 |
|||||||||
Net income (loss) |
$ 59 |
$ 49 |
$ 65 |
$ 1 |
$ 23 |
$ 12 |
$ (111) |
$ 98 |
|||||||||
Net credit-related charge-offs |
$ 33 |
$ 32 |
$ 2 |
$ 5 |
$ 5 |
$ - |
$ - |
$ 77 |
|||||||||
Selected average balances: |
|||||||||||||||||
Assets |
$ 14,123 |
$ 12,110 |
$ 8,510 |
$ 1,450 |
$ 3,369 |
$ 1,705 |
$ 16,971 |
$ 58,238 |
|||||||||
Loans |
13,873 |
11,889 |
8,145 |
1,477 |
3,075 |
1,631 |
8 |
40,098 |
|||||||||
Deposits |
18,511 |
12,975 |
8,865 |
404 |
2,391 |
1,603 |
349 |
45,098 |
|||||||||
Statistical data: |
|||||||||||||||||
Return on average assets (a) |
1.21 |
% |
1.42 |
% |
2.70 |
% |
0.29 |
% |
2.78 |
% |
2.76 |
% |
N/M |
0.67 |
% |
||
Net interest margin (b) |
4.27 |
5.06 |
6.40 |
2.94 |
5.36 |
5.00 |
N/M |
3.18 |
|||||||||
Efficiency ratio |
61.73 |
53.15 |
46.18 |
78.07 |
50.15 |
31.23 |
N/M |
75.11 |
|||||||||
Three Months Ended June 30, 2011 |
Midwest |
Western |
Texas |
Florida |
Other Markets |
International |
Finance & Other Businesses |
Total |
|||||||||
Earnings summary: |
|||||||||||||||||
Net interest income (expense) (FTE) |
$ 204 |
$ 166 |
$ 89 |
$ 12 |
$ 41 |
$ 19 |
$ (139) |
$ 392 |
|||||||||
Provision for loan losses |
15 |
20 |
(2) |
11 |
5 |
(5) |
3 |
47 |
|||||||||
Noninterest income |
100 |
37 |
25 |
4 |
13 |
9 |
14 |
202 |
|||||||||
Noninterest expenses |
183 |
108 |
63 |
12 |
21 |
9 |
13 |
409 |
|||||||||
Provision (benefit) for income taxes (FTE) |
44 |
25 |
20 |
(2) |
(2) |
9 |
(52) |
42 |
|||||||||
Net income (loss) |
$ 62 |
$ 50 |
$ 33 |
$ (5) |
$ 30 |
$ 15 |
$ (89) |
$ 96 |
|||||||||
Net credit-related charge-offs (recoveries) |
$ 37 |
$ 26 |
$ 3 |
$ 15 |
$ 11 |
$ (2) |
$ - |
$ 90 |
|||||||||
Selected average balances: |
|||||||||||||||||
Assets |
$ 14,267 |
$ 12,329 |
$ 7,081 |
$ 1,534 |
$ 3,101 |
$ 1,762 |
$ 14,443 |
$ 54,517 |
|||||||||
Loans |
14,051 |
12,121 |
6,871 |
1,565 |
2,823 |
1,690 |
53 |
39,174 |
|||||||||
Deposits |
18,319 |
12,458 |
6,175 |
396 |
2,451 |
1,312 |
369 |
41,480 |
|||||||||
Statistical data: |
|||||||||||||||||
Return on average assets (a) |
1.28 |
% |
1.48 |
% |
1.84 |
% |
(1.29) |
% |
3.89 |
% |
3.33 |
% |
N/M |
0.70 |
% |
||
Net interest margin (b) |
4.46 |
5.35 |
5.19 |
3.14 |
5.88 |
4.40 |
N/M |
3.14 |
|||||||||
Efficiency ratio |
60.31 |
53.17 |
55.16 |
77.62 |
40.47 |
33.16 |
N/M |
69.33 |
|||||||||
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 |
|||||||||
Statistical data: |
|||||||||||||||||
Return on average assets (a) |
1.04 |
% |
0.42 |
% |
0.83 |
% |
(1.58) |
% |
3.20 |
% |
3.25 |
% |
N/M |
0.43 |
% |
||
Net interest margin (b) |
4.45 |
4.96 |
4.87 |
2.61 |
4.99 |
4.51 |
N/M |
3.23 |
|||||||||
Efficiency ratio |
61.47 |
57.12 |
62.01 |
94.50 |
41.39 |
30.65 |
N/M |
67.88 |
|||||||||
(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 30, |
June 30, |
March 31, |
December 31, |
September 30, |
|||||||||||
(dollar amounts in millions) |
2011 |
2011 |
2011 |
2010 |
2010 |
||||||||||
Tier 1 Common Capital Ratio: |
|||||||||||||||
Tier 1 capital (a) (b) |
$ 6,560 |
$ 6,193 |
$ 6,107 |
$ 6,027 |
$ 5,940 |
||||||||||
Less: |
|||||||||||||||
Trust preferred securities |
49 |
- |
- |
- |
- |
||||||||||
Tier 1 common capital (b) |
$ 6,511 |
$ 6,193 |
$ 6,107 |
$ 6,027 |
$ 5,940 |
||||||||||
Risk-weighted assets (a) (b) |
$ 61,604 |
$ 58,795 |
$ 58,998 |
$ 59,506 |
$ 59,608 |
||||||||||
Tier 1 capital ratio (b) |
10.65 |
% |
10.53 |
% |
10.35 |
% |
10.13 |
% |
9.96 |
% |
|||||
Tier 1 common capital ratio (b) |
10.57 |
10.53 |
10.35 |
10.13 |
9.96 |
||||||||||
Tangible Common Equity Ratio: |
|||||||||||||||
Total common shareholders' equity |
$ 6,951 |
$ 6,038 |
$ 5,877 |
$ 5,793 |
$ 5,857 |
||||||||||
Less: |
|||||||||||||||
Goodwill |
635 |
150 |
150 |
150 |
150 |
||||||||||
Other intangible assets |
35 |
4 |
5 |
6 |
6 |
||||||||||
Tangible common equity |
$ 6,281 |
$ 5,884 |
$ 5,722 |
$ 5,637 |
$ 5,701 |
||||||||||
Total assets |
$ 60,888 |
$ 54,141 |
$ 55,017 |
$ 53,667 |
$ 55,004 |
||||||||||
Less: |
|||||||||||||||
Goodwill |
635 |
150 |
150 |
150 |
150 |
||||||||||
Other intangible assets |
35 |
4 |
5 |
6 |
6 |
||||||||||
Tangible assets |
$ 60,218 |
$ 53,987 |
$ 54,862 |
$ 53,511 |
$ 54,848 |
||||||||||
Common equity ratio |
11.42 |
% |
11.15 |
% |
10.68 |
% |
10.80 |
% |
10.65 |
% |
|||||
Tangible common equity ratio |
10.43 |
10.90 |
10.43 |
10.54 |
10.39 |
||||||||||
(a) Tier 1 capital and risk-weighted assets as defined by regulation. (b) September 30, 2011 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