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Comerica Reports First Quarter 2002 Earnings

DETROIT, April 16 /PRNewswire-FirstCall/ --
Comerica Incorporated (NYSE: CMA - news) today reported 2002 first quarter earnings
of $1.20 per diluted share, or $214 million, compared to $0.50 per diluted
share, or $94 million, for the first quarter 2001.
Excluding the first
quarter 2001 after-tax merger-related and restructuring charges of $95 million
associated with the Imperial Bancorp merger, and a one-time $34 million after-
tax charge related to long-term incentive plans at an unconsolidated
subsidiary, net income for the first quarter of 2001 was $223 million, or
$1.21 per diluted share.(Photo: )``While loan volumes were basically flat, Comerica reported solid operating
results,'' said Ralph W. Babb Jr., president and chief executive officer.
``Even though the national economy is again expanding, borrowers are being
cautious.''Net Interest IncomeNet interest income for the first quarter was up five percent to $540
million, compared with $512 million for the first quarter of last year.
Average earning assets grew slightly compared to the first quarter 2001,
increasing less than one percent to $45.9 billion.
The net interest margin
increased to 4.77 percent in the first quarter of 2002 compared with 4.55
percent for the comparable quarter of 2001, reflecting the success in deposit-
gathering and interest rate risk management.
Average deposits increased seven
percent over last year's first quarter, primarily due to growth in
noninterest-bearing deposits and market-priced sources of funding.
Title and
escrow deposits in the California-based Financial Services business unit drove
the noninterest-bearing deposit growth of 16 percent over last year's first
quarter, supported by a favorable interest rate environment.Noninterest IncomeNoninterest income was $197 million for the first quarter of 2002, an
increase of $27 million, or 16 percent, from the same quarter last year.
Noninterest income in the first quarter of 2001 included an $11 million gain
associated with the purchase and subsequent sale of interest rate derivative
contracts and was reduced by a $26 million deferred distribution cost
impairment charge and a one-time $53 million charge from an unconsolidated
subsidiary of Munder Capital Management.
Excluding the effects of the large
unusual items noted above, gains and losses on securities, warrant income and
divestitures, noninterest income decreased $15 million, a reduction of seven
percent over the same period last year.Non-investment market-related fees, consisting of service charges,
commercial lending fees and letter of credit fees, were up $6 million (eight
percent) on a combined basis from the $77 million level in the first quarter
last year.Investment advisory revenue from assets under management at the company's
Munder Capital Management subsidiary declined $6 million, or 39 percent
relative to first quarter 2001, excluding the $26 million deferred
distribution cost impairment charge in the first quarter 2001.
The decrease
was primarily attributable to the decline in the market values of technology-
related stocks.
At March 31, 2002, assets under management at Munder were $33
billion, including $1.8 billion in the NetNet, International NetNet and Future
Tech funds, compared with $36.2 billion and $2.9 billion at the same time last
year, and $35.4 billion and $2.1 billion at December 31, 2001.
Net remaining
deferred distribution costs subject to impairment at March 31, 2002, were $31
million, compared to $54 million at March 31, 2001.Noninterest ExpensesNoninterest expenses for the first quarter of 2002 were $336 million, a
decrease of 25 percent from $450 million during the first quarter of 2001.
Noninterest expenses in the first quarter of 2001 included goodwill
amortization of $8 million.
Goodwill amortization was discontinued January 1,
2002, as a result of new accounting rules.
Also affecting the first quarter
of 2001 was a $94 million merger-related and restructuring charge associated
with the Imperial Bancorp acquisition.
Excluding these items, and the impact
of divestitures, noninterest expenses declined by $11 million or three
Contributing to this decline were savings in salaries and benefits
of $10 million, primarily from staff reductions as a result of integrating
Imperial and reduced revenue-related incentives.
Comerica's efficiency ratio
was 45 percent at March 31, 2002, compared with 54 percent, excluding the
merger-related and restructuring charge, at March 31, 2001.
Credit Quality
1st Qtr '02 4th Qtr '01 1st Qtr '01
Net Charge-offs (in millions) $60 $59 $35
Net Charge-offs/Average Total Loans 0.58% 0.57% 0.34%
Loan Loss Provision (in millions) $75 $69 $72
Nonperforming Assets (NPAs)
(in millions) $667 $627 $476
NPAs/Total Loans and
Other Real Estate 1.64% 1.52% 1.16%
Allowance for Credit Losses
(in millions) $670 $655 $645
Allowance for
Credit Losses/Total Loans 1.64% 1.59% 1.57%