DETROIT, Jan. 20 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today
reported record 1997 earnings. On January 15, 1998, the Board of Directors of
Comerica Incorporated declared a three-for-two stock split, effected in the
form of a 50 percent stock dividend. Diluted earnings per share presented is
in accordance with Statement on Financial Accounting Standards (SFAS) No. 128,
"Earnings per Share," giving effect to the stock split. Comerica reported
earnings per share of $4.78 (or $3.19 on a post-split basis), up 34 percent
from $3.58 per share (or $2.38 on a post-split basis -- up 17 percent from
$2.73 excluding the restructuring charge for the Direction 2000 Phase III
strategic initiative). Net income was $530 million, up 27 percent from $417
million for 1996 (up 11 percent from $477 million, excluding the restructuring
charge). Return on common equity was 21.32 percent and return on assets was
1.52 percent, compared to 15.98 percent and 1.22 percent (18.33 percent and
1.40 percent excluding the restructuring charge), respectively, for 1996.
Net income for the fourth quarter of 1997 was $140 million or $1.27 per
share ($0.85 on a post-split basis), up 130 percent from $61 million or $0.52
per share (or $0.35 on a post-split basis --up 16 percent from $121 million or
$0.71 excluding the restructuring charge) for the same period in 1996. Return
on common equity was 21.68 percent and return on assets was 1.57 percent,
compared to 9.42 percent and 0.72 percent (19.41 percent and 1.44 percent
excluding the restructuring charge), respectively, for the fourth quarter of
1996.
Net interest income for the fourth quarter of 1997 was up 4 percent
compared to the similar period in 1996, as a result of continued strong loan
growth. Average loans increased $2.6 billion, or 10 percent, over last year's
fourth quarter. The decrease in net interest margin, from 4.61 percent for
the comparable quarter of 1996 to 4.48 percent for the fourth quarter of 1997,
was principally associated with a greater reliance on higher cost sources of
funds to support the growth in earning assets.
Noninterest income was $141 million for the fourth quarter of 1997,
compared to $132 million for the same quarter last year. Excluding the effect
of securities gains and divestures in both periods, noninterest income
increased 12 percent in the fourth quarter of 1997, compared to the fourth
quarter of 1996. Higher levels of fiduciary income and retail and commercial
fee income accounted for the majority of this increase.
Noninterest expenses were $257 million for the fourth quarter of 1997,
compared to $356 million ($266 million excluding the restructuring charge) in
1996. Excluding the expenses associated with large nonrecurring items and
divestures in both periods, noninterest expenses increased 3 percent in the
fourth quarter of 1997, compared to the same quarter of 1996.
"Our financial performance, evidenced by strong revenue growth and
superior credit quality, reflects the efforts of an exceptional team of
employees," said Eugene A. Miller, chairman and chief executive officer.
The provision for loan losses was $37 million in the fourth quarter of
1997, an increase of $5 million compared to the same period in 1996. Net
charge-offs for the quarter were $25 million or 0.36 percent of average total
loans, compared with $22 million or 0.35 percent in the fourth quarter of
1996. Nonperforming assets were $103 million or 0.36 percent of loans and
other real estate at December 31, 1997, compared to $140 million or 0.53
percent at December 31, 1996.
At December 31, 1997, assets totaled $36 billion, compared with $34
billion one year earlier, and common shareholders' equity was $2.5 billion,
compared to $2.4 billion in 1996. Shares of common stock outstanding at
December 31, 1997 were 105 million (or 157 million on a post-split basis)
compared to 107 million at December 31, 1996. Total loans at year-end were
$29 billion, compared to $26 billion a year earlier, and year-end deposits
were $23 billion, compared to $22 billion at December 31, 1996.
Comerica Incorporated is a diversified financial services provider
headquartered in Detroit that operates banking subsidiaries in Michigan,
California, Texas and Florida.
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
(in thousands, except per share data)
Three Months Ended
December 31
1997 1996
INTEREST INCOME
Interest and fees on loans $603,633 $543,083
Interest on investment
securities:
Taxable 74,117 84,498
Exempt from federal income
tax 2,319 3,189
Total interest on investment
securities 76,436 87,687
Trading account interest 74 54
Interest on federal funds
sold and securities purchased
under agreements to resell 1,393 756
Interest on time deposits
with banks (106) 395
Interest on loans held for sale 733 762
Total interest income 682,163 632,737
INTEREST EXPENSE
Interest on deposits 170,601 165,161
Interest on short-term
borrowings:
Federal funds purchased and
securities sold under
agreements to repurchase 27,958 34,059
Other borrowed funds 18,859 22,343
Interest on medium- and
long-term debt 110,227 70,750
Net interest rate swap income (11,364) (12,837)
Total interest expense 316,281 279,476
Net interest income 365,882 353,261
Provision for loan losses 37,000 32,000
Net interest income after
provision for loan losses 328,882 321,261
NONINTEREST INCOME
Income from fiduciary
activities 40,465 34,094
Service charges on deposit
accounts 36,093 35,075
Customhouse broker fees - -
Revolving credit fees 5,253 5,935
Securities gains 5,836 10,194
Other noninterest income 53,117 47,110
Total noninterest income 140,764 132,408
NONINTEREST EXPENSES
Salaries and employee benefits 135,257 136,769
Net occupancy expense 21,681 22,821
Equipment expense 15,471 17,483
FDIC insurance expense 845 695
Telecommunications expense 7,045 7,659
Restructuring charge - 90,000
Other noninterest expenses 77,069 80,793
Total noninterest expenses 257,368 356,220
Income before income taxes 212,278 97,449
Provision for income taxes 72,351 36,633
NET INCOME $139,927 $60,816
Net income applicable to
common stock $135,652 $56,541
Basic net income per common
share $0.86 $0.35
Diluted net income per common
share $0.85 $0.35
Cash dividends declared on
common stock $44,996 $41,789
Dividends per common share $0.29 $0.26
Year Ended
December 31
1997 1996
INTEREST INCOME
Interest and fees on loans $2,317,844 $2,160,981
Interest on investment
securities:
Taxable 310,399 372,331
Exempt from federal income
tax 10,797 17,443
Total interest on investment
securities 321,196 389,774
Trading account interest 231 210
Interest on federal funds
sold and securities purchased
under agreements to resell 4,381 5,068
Interest on time deposits
with banks 1,084 1,827
Interest on loans held for sale 2,667 4,920
Total interest income 2,647,403 2,562,780
INTEREST EXPENSE
Interest on deposits 673,265 685,539
Interest on short-term
borrowings:
Federal funds purchased and
securities sold under
agreements to repurchase 110,752 111,729
Other borrowed funds 98,258 107,155
Interest on medium- and
long-term debt 374,022 294,990
Net interest rate swap income (51,670) (48,911)
Total interest expense 1,204,627 1,150,502
Net interest income 1,442,776 1,412,278
Provision for loan losses 146,000 114,000
Net interest income after
provision for loan losses 1,296,776 1,298,278
NONINTEREST INCOME
Income from fiduciary
activities 147,336 133,482
Service charges on deposit
accounts 141,078 140,436
Customhouse broker fees - 10,764
Revolving credit fees 19,439 22,670
Securities gains 5,695 13,588
Other noninterest income 214,404 186,014
Total noninterest income 527,952 506,954
NONINTEREST EXPENSES
Salaries and employee benefits 538,926 560,784
Net occupancy expense 89,380 99,211
Equipment expense 61,759 68,827
FDIC insurance expense 3,029 8,139
Telecommunications expense 28,010 29,092
Restructuring charge - 90,000
Other noninterest expenses 286,882 302,973
Total noninterest expenses 1,007,986 1,159,026
Income before income taxes 816,742 646,206
Provision for income taxes 286,266 229,045
NET INCOME $530,476 $417,161
Net income applicable to
common stock $513,376 $408,136
Basic net income per common
share $3.24 $2.41
Diluted net income per common
share $3.19 $2.38
Cash dividends declared on
common stock $181,272 $170,067
Dividends per common share $1.15 $1.01
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
(in thousands, except share data)
Dec. 31, Dec. 31,
1997 1996
ASSETS
Cash and due from banks $1,927,087 $1,901,760
Interest-bearing deposits
with banks 3,319 27,329
Federal funds sold and
securities purchased
under agreements to
resell 149,801 32,200
Trading account securities 9,102 6,009
Loans held for sale 40,735 38,069
Investment securities
available for sale 4,005,962 4,800,034
Commercial loans 15,805,549 13,520,246
International loans 2,085,090 1,706,388
Real estate construction
loans 940,910 750,760
Commercial mortgage loans 3,633,785 3,445,562
Residential mortgage loans 1,565,445 1,743,876
Consumer loans 4,347,665 4,634,258
Lease financing 516,600 405,618
Total loans 28,895,044 26,206,708
Less allowance for loan
losses (424,147) (367,165)
Net loans 28,470,897 25,839,543
Premises and equipment 380,157 407,663
Customers' liability on
acceptances outstanding 18,392 33,102
Accrued income and other
assets 1,286,946 1,120,362
Total assets $36,292,398 $34,206,071
LIABILITIES AND SHAREHOLDERS'
EQUITY
Demand deposits
(noninterest-bearing) $6,761,202 $6,712,985
Interest-bearing deposits 15,825,115 15,654,188
Total deposits 22,586,317 22,367,173
Federal funds purchased and
securities sold under
agreements to repurchase 592,860 1,395,540
Other borrowed funds 2,600,041 3,093,651
Acceptances outstanding 18,392 33,102
Accrued expenses and other
liabilities 446,625 459,267
Medium- and long-term debt 7,286,387 4,241,769
Total liabilities 33,530,622 31,590,502
Nonredeemable preferred stock
- $50 stated value:
Authorized - 5,000,000 shares
Issued - 5,000,000 shares at
12/31/97 and 12/31/96 250,000 250,000
Common stock - $5 par value:
Authorized - 250,000,000
shares
Issued - 156,815,367 shares
at 12/31/97 and 107,297,345
shares at 12/31/96 784,077 536,487
Capital surplus - -
Unrealized gains and losses
on investment securities
available for sale (1,937) (22,789)
Retained earnings 1,731,419 1,854,116
Deferred compensation (1,783) (2,245)
Total shareholders'
equity 2,761,776 2,615,569
Total liabilities and
shareholders' equity $36,292,398 $34,206,071
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
(in thousands, except per share data,
average balances and ratios)
Three Months Ended
December 31
1997 1996
PER SHARE AND COMMON STOCK
DATA
Diluted net income $0.85 $0.35
Diluted net income (excluding
restructuring charge) N/A 0.71
Cash dividends declared 0.29 0.26
Common shareholders' equity
(at December 31) 16.02 14.70
Average diluted shares 160,220 163,331
KEY RATIOS (in percent)
Return on average common
equity 21.68 9.42
Return on average common
equity (excluding restructuring
charge) N/A 19.41
Return on average assets 1.57 0.72
Return on average assets (excluding
restructuring charge) N/A 1.44
Average common equity as a
percentage of average assets 7.03 7.13
Core capital ratio 7.07 7.18
Total capital ratio 11.14 10.99
Leverage ratio 7.09 7.07
AVERAGE BALANCES (in millions)
Commercial loans (including
lease financing) $15,417 $13,323
International loans 2,086 1,670
Real estate construction loans 963 744
Commercial mortgage loans 3,626 3,424
Residential mortgage loans 1,607 1,760
Consumer loans 4,403 4,574
Total loans $28,102 $25,495
Earning assets 32,670 30,744
Total assets 35,613 33,645
Interest-bearing deposits 15,960 16,088
Noninterest-bearing deposits 6,055 5,791
Total interest-bearing
liabilities 26,347 24,781
Common shareholders' equity 2,503 2,400
NET INTEREST INCOME
Net interest
income (fully taxable
equivalent basis) $368,049 $356,116
Fully taxable equivalent
adjustment 2,168 2,855
Net interest margin (in percent) 4.48 4.61
CREDIT QUALITY
Nonaccrual loans $78,159 $103,294
Reduced-rate loans 7,583 8,009
Other real estate 17,046 28,398
Total nonperforming assets 102,788 139,701
Loans 90 days past due 52,805 51,748
Gross charge-offs 37,678 35,258
Recoveries 12,243 12,967
Net charge-offs 25,435 22,291
Allowance for loan losses
as a percentage of total
loans (in percent) 1.47 1.40
Nonperforming assets as a
percentage of total
loans and other real
estate (in percent) 0.36 0.53
Net loans charged off as
a percentage of average
total loans (in percent) 0.36 0.35
Allowance for loan losses
as a percentage of total
nonperforming assets (in
percent) 413 263
ADDITIONAL DATA
Goodwill $231,974 $250,926
Core deposit intangible 23,345 28,688
Other intangibles 3,117 5,709
Mortgage servicing rights 28,476 22,744
Year Ended
December 31
1997 1996
PER SHARE AND COMMON STOCK
DATA
Diluted net income $3.19 $2.38
Diluted net income (excluding
restructuring charge) N/A 2.73
Cash dividends declared 1.15 1.01
Common shareholders' equity
(at December 31)
Average diluted shares 161,040 171,227
KEY RATIOS (in percent)
Return on average common
equity 21.32 15.98
Return on average common
equity (excluding restructuring
charge) N/A 18.33
Return on average assets 1.52 1.22
Return on average assets (excluding
restructuring charge) N/A 1.40
Average common equity as a
percentage of average assets 6.91 7.47
Core capital ratio
Total capital ratio
Leverage ratio
AVERAGE BALANCES (in millions)
Commercial loans (including
lease financing) $14,681 $13,037
International loans 1,953 1,541
Real estate construction loans 866 707
Commercial mortgage loans 3,547 3,483
Residential mortgage loans 1,676 1,960
Consumer loans 4,486 4,624
Total loans $27,209 $25,352
Earning assets 32,025 31,370
Total assets 34,869 34,195
Interest-bearing deposits 16,131 16,669
Noninterest-bearing deposits 5,815 5,589
Total interest-bearing
liabilities 25,929 25,519
Common shareholders' equity 2,408 2,554
NET INTEREST INCOME
Net interest
income (fully taxable
equivalent basis) $1,452,218 $1,426,976
Fully taxable equivalent
adjustment 9,443 14,698
Net interest margin (in percent) 4.53 4.54
CREDIT QUALITY
Nonaccrual loans
Reduced-rate loans
Other real estate
Total nonperforming assets
Loans 90 days past due
Gross charge-offs $131,140 $125,912
Recoveries 42,122 41,363
Net charge-offs 89,018 84,549
Allowance for loan 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) 0.33 0.33
Allowance for loan losses
as a percentage of total
nonperforming assets (in
percent)
ADDITIONAL DATA
Goodwill
Core deposit intangible
Other intangibles
Mortgage servicing rights
SOURCE Comerica Incorporated
