CMA - news) today
reported record 1998 earnings. Comerica reported earnings per share of
$3.72, up 17 percent from $3.19 per share in 1997. Net income was $607
million, up 14 percent from $530 million for 1997. Return on common equity
was 22.54 percent and return on assets was 1.74 percent, compared to 21.32
percent and 1.52 percent, respectively, for 1997.
Net income for the fourth quarter of 1998 was $158 million or $0.97 per
share, up 13 percent from $140 million or $0.85 per share for the same period
in 1997. Return on common equity was 22.49 percent and return on assets was
1.78 percent, compared to 21.68 percent and 1.57 percent, respectively, for
the fourth quarter of 1997.
``We are pleased to announce another year of record earnings,'' said Eugene
A. Miller, chairman and chief executive officer. ``Our financial performance
reflects continued strong loan demand and the successful implementation of
revenue enhancement and expense control strategies, while maintaining a
historically high level of asset quality. Nineteen ninety eight was a year of
change, which included exiting certain non-relationship consumer businesses to
focus reinvestment on our strength -- commercial lending -- successfully
completing Direction 2000 and making significant progress in our year 2000
readiness.''
Net interest income for the fourth quarter of 1998 was $371 million, an
increase of $5 million from the same period last year. Net interest income
and the net interest margin were both affected by the sale of $2.0 billion of
indirect consumer loans and non-relationship credit card receivables in the
second quarter of 1998. The net interest margin was 4.54 percent for the
fourth quarter of 1998, compared to 4.48 percent for the comparable quarter of
1997.
Noninterest income was $167 million for the fourth quarter of 1998,
compared to $141 million for the same quarter last year. Excluding the
effect of certain nonrecurring items, securities gains and divestitures in
both periods, noninterest income increased 12 percent in the fourth quarter of
1998, compared to the fourth quarter of 1997.
Noninterest expenses were $263 million for the fourth quarter of 1998,
compared to $257 million in 1997. Excluding the effect of certain
nonrecurring items and divestitures in both periods, noninterest expenses
increased 5.7 percent in the fourth quarter of 1998, compared to the fourth
quarter of 1997.
The provision for credit losses was $36 million in the fourth quarter of
1998, a decrease of $1 million compared to the same period in 1997. Net
charge-offs for the quarter were $23 million or 0.30 percent of average total
loans, compared with $25 million or 0.36 percent in the fourth quarter of
1997. Nonperforming assets were $121 million or 0.39 percent of loans and
other real estate at December 31, 1998, compared to $103 million or 0.36
percent at December 31, 1997.
Assets totaled $37 billion at December 31, 1998, compared with $36 billion
one year earlier, while common shareholders' equity was $2.8 billion, compared
to $2.5 billion in 1997. Shares of common stock outstanding at December 31,
1998 were 156 million compared to 157 million at December 31, 1997. Total
loans were $31 billion and total deposits were $24 billion at year-end 1998.
Total loans and total deposits at year-end 1997 were $29 billion and $23
billion, respectively.
Comerica Incorporated is a multi-state financial services provider
headquartered in Detroit that operates banking subsidiaries in Michigan,
California and Texas. Comerica also operates banking subsidiaries in Canada
and Mexico. Comerica is celebrating its 150th anniversary in 1999.
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
(in thousands, except per share data)
Three Months Ended
December 31
1998 1997
INTEREST INCOME
Interest and fees on loans $601,165 $603,633
Interest on investment
securities:
Taxable 47,522 74,117
Exempt from federal income
tax 1,478 2,319
Total interest on investment
securities 49,000 76,436
Interest on short-term investments 1,956 2,094
Total interest income 652,121 682,163
INTEREST EXPENSE
Interest on deposits 163,472 170,601
Interest on short-term
borrowings:
Federal funds purchased and
securities sold under
agreements to repurchase 42,961 27,958
Other borrowed funds 7,559 18,859
Interest on medium- and
long-term debt 77,991 110,227
Net interest rate swap income (10,612) (11,364)
Total interest expense 281,371 316,281
Net interest income 370,750 365,882
Provision for credit losses 36,000 37,000
Net interest income after
provision for credit losses 334,750 328,882
NONINTEREST INCOME
Income from fiduciary
activities 42,742 40,465
Service charges on deposit
accounts 40,133 36,093
Securities gains 6,081 3,836
Other noninterest income 78,431 60,370
Total noninterest income 167,387 140,764
NONINTEREST EXPENSES
Salaries and employee benefits 150,290 135,257
Net occupancy expense 23,038 21,681
Equipment expense 14,897 15,471
Telecommunications expense 7,423 7,045
Other noninterest expenses 67,403 77,914
Total noninterest expenses 263,051 257,368
Income before income taxes 239,086 212,278
Provision for income taxes 81,266 72,351
NET INCOME $157,820 $139,927
Net income applicable to
common stock $153,545 $135,652
Basic net income per common
share $0.99 $0.86
Diluted net income per common
share $0.97 $0.85
Cash dividends declared on
common stock $49,788 $44,996
Dividends per common share $0.32 $0.29
Year Ended
December 31
1998 1997
INTEREST INCOME
Interest and fees on loans $2,382,329 $2,317,844
Interest on investment
securities:
Taxable 218,378 310,399
Exempt from federal income
tax 7,252 10,797
Total interest on investment
securities 225,630 321,196
Interest on short-term investments 8,815 8,363
Total interest income 2,616,774 2,647,403
INTEREST EXPENSE
Interest on deposits 647,825 673,265
Interest on short-term
borrowings:
Federal funds purchased and
securities sold under
agreements to repurchase 136,616 110,752
Other borrowed funds 49,095 98,258
Interest on medium- and
long-term debt 367,777 374,022
Net interest rate swap income (45,810) (51,670)
Total interest expense 1,155,503 1,204,627
Net interest income 1,461,271 1,442,776
Provision for credit losses 113,000 146,000
Net interest income after
provision for credit losses 1,348,271 1,296,776
NONINTEREST INCOME
Income from fiduciary
activities 166,374 147,336
Service charges on deposit
accounts 157,416 141,078
Securities gains 6,116 5,195
Other noninterest income 273,242 234,343
Total noninterest income 603,148 527,952
NONINTEREST EXPENSES
Salaries and employee benefits 565,303 538,926
Net occupancy expense 89,911 89,380
Equipment expense 60,147 61,759
Telecommunications expense 27,613 28,010
Other noninterest expenses 277,070 289,911
Total noninterest expenses 1,020,044 1,007,986
Income before income taxes 931,375 816,742
Provision for income taxes 324,299 286,266
NET INCOME $607,076 $530,476
Net income applicable to
common stock $589,976 $513,376
Basic net income per common
share $3.79 $3.24
Diluted net income per common
share $3.72 $3.19
Cash dividends declared on
common stock $199,403 $181,272
Dividends per common share $1.28 $1.15
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
(in thousands, except share data)
Dec. 31, Dec. 31,
1998 1997
ASSETS
Cash and due from banks $1,773,100 $1,927,087
Short-term investments 109,640 202,957
Investment securities
available for sale 2,712,165 4,005,962
Commercial loans 19,086,541 15,805,549
International loans 2,713,259 2,085,090
Real estate construction
loans 1,079,614 940,910
Commercial mortgage loans 4,179,271 3,633,785
Residential mortgage loans 1,037,941 1,565,445
Consumer loans 1,861,630 4,347,665
Lease financing 646,607 516,600
Total loans 30,604,863 28,895,044
Less allowance for credit
losses (452,409) (424,147)
Net loans 30,152,454 28,470,897
Premises and equipment 352,650 380,157
Customers' liability on
acceptances outstanding 12,335 18,392
Accrued income and other
assets 1,488,487 1,286,946
Total assets $36,600,831 $36,292,398
LIABILITIES AND SHAREHOLDERS'
EQUITY
Noninterest-bearing deposits $6,999,337 $6,761,202
Interest-bearing deposits 17,313,796 15,825,115
Total deposits 24,313,133 22,586,317
Federal funds purchased and
securities sold under
agreements to repurchase 3,108,985 592,860
Other borrowed funds 471,168 2,600,041
Acceptances outstanding 12,335 18,392
Accrued expenses and other
liabilities 366,338 446,625
Medium- and long-term debt 5,282,259 7,286,387
Total liabilities 33,554,218 33,530,622
Nonredeemable preferred stock
- $50 stated value:
Authorized - 5,000,000 shares
Issued - 5,000,000 shares at
12/31/98 and 12/31/97 250,000 250,000
Common stock - $5 par value:
Authorized - 325,000,000
shares
Issued - 157,233,088 shares
at 12/31/98 and 156,815,367
shares at 12/31/97 786,165 784,077
Capital surplus 24,649 -
Unrealized gains and losses
on investment securities
available for sale (6,455) (1,937)
Retained earnings 2,086,589 1,731,419
Deferred compensation (5,202) (1,783)
Less cost of common stock in
treasury - 1,351,997 shares
at 12/31/98 (89,133) -
Total shareholders'
equity 3,046,613 2,761,776
Total liabilities and
shareholders' equity $36,600,831 $36,292,398
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
(in thousands, except per share data,
average balances and ratios)
Three Months Ended
December 31
1998 1997
PER SHARE AND COMMON STOCK
DATA
Diluted net income $0.97 $0.85
Cash dividends declared 0.32 0.29
Common shareholders' equity
(at December 31) 17.94 16.02
Average diluted shares 158,197 160,220
KEY RATIOS (in percent)
Return on average common
equity 22.49 21.68
Return on average assets 1.78 1.57
Average common equity as a
percentage of average assets 7.71 7.03
Core capital ratio (1998 estimated) 6.36 6.28
Total capital ratio (1998 estimated) 10.45 9.90
Leverage ratio (1998 estimated) 7.68 7.09
AVERAGE BALANCES (in millions)
Commercial loans (including
lease financing) $18,864 $15,417
International loans 2,612 2,086
Real estate construction loans 1,061 963
Commercial mortgage loans 4,040 3,626
Residential mortgage loans 1,113 1,607
Consumer loans 1,870 4,403
Total loans $29,560 $28,102
Earning assets 32,613 32,670
Total assets 35,445 35,613
Interest-bearing deposits 16,571 15,960
Noninterest-bearing deposits 6,268 6,055
Total interest-bearing
liabilities 25,802 26,347
Common shareholders' equity 2,731 2,503
NET INTEREST INCOME
Net interest
income (fully taxable
equivalent basis) $372,298 $368,049
Fully taxable equivalent
adjustment 1,548 2,168
Net interest margin (in percent) 4.54 4.48
CREDIT QUALITY
Nonaccrual loans $108,233 $78,159
Reduced-rate loans 7,464 7,583
Other real estate 4,956 17,046
Total nonperforming assets 120,653 102,788
Loans 90 days past due 40,209 52,805
Gross charge-offs 29,746 37,678
Recoveries 7,226 12,243
Net charge-offs 22,520 25,435
Allowance for credit losses
as a percentage of total
loans (in percent) 1.48 1.47
Nonperforming assets as a
percentage of total
loans and other real
estate (in percent) 0.39 0.36
Net loans charged off as
a percentage of average
total loans (in percent) 0.30 0.36
Allowance for credit losses
as a percentage of total
nonperforming assets (in
percent) 375 413
ADDITIONAL DATA
Goodwill $344,347 $231,974
Core deposit intangible 18,035 23,345
Other intangibles 2,286 3,117
Loan servicing rights 4,223 28,476
Amortization of intangibles 8,485 7,243
Year Ended
December 31
1998 1997
PER SHARE AND COMMON STOCK
DATA
Diluted net income $3.72 $3.19
Cash dividends declared 1.28 1.15
Common shareholders' equity
(at December 31)
Average diluted shares 158,757 161,040
KEY RATIOS (in percent)
Return on average common
equity 22.54 21.32
Return on average assets 1.74 1.52
Average common equity as a
percentage of average assets 7.48 6.91
Core capital ratio (1998 estimated)
Total capital ratio (1998 estimated)
Leverage ratio (1998 estimated)
AVERAGE BALANCES (in millions)
Commercial loans (including
lease financing) $17,549 $14,681
International loans 2,342 1,953
Real estate construction loans 989 866
Commercial mortgage loans 3,819 3,547
Residential mortgage loans 1,325 1,676
Consumer loans 2,575 4,486
Total loans $28,599 $27,209
Earning assets 32,113 32,025
Total assets 34,987 34,869
Interest-bearing deposits 16,102 16,131
Noninterest-bearing deposits 6,151 5,815
Total interest-bearing
liabilities 25,554 25,929
Common shareholders' equity 2,617 2,408
NET INTEREST INCOME
Net interest
income (fully taxable
equivalent basis) $1,468,422 $1,452,218
Fully taxable equivalent
adjustment 7,151 9,443
Net interest margin (in percent) 4.57 4.53
CREDIT QUALITY
Nonaccrual loans
Reduced-rate loans
Other real estate
Total nonperforming assets
Loans 90 days past due
Gross charge-offs $125,627 $131,140
Recoveries 40,889 42,122
Net charge-offs 84,738 89,018
Allowance for credit losses
as a percentage of total
loans (in percent)
Nonperforming assets as a
percentage of total
loans and other real
estate (in percent)
Net loans charged off as
a percentage of average
total loans (in percent) 0.30 0.33
Allowance for credit losses
as a percentage of total
nonperforming assets (in
percent)
ADDITIONAL DATA
Goodwill
Core deposit intangible
Other intangibles
Loan servicing rights
Amortization of intangibles 30,414 28,375
