DETROIT, July 15 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today
reported second quarter diluted earnings per share of $0.92, compared to $0.78
in 1997, an increase of 18 percent. Net income was $150 million, up 16
percent from $130 million for the second quarter of 1997. Return on common
equity was 22.57 percent and return on assets was 1.74 percent, compared to
21.31 percent and 1.49 percent, respectively, for the second quarter of 1997.
Net income for the first six months of 1998 was $1.80 per share or $295
million, compared to $1.52 or $253 million for the same period in 1997,
increases of 18 percent and 16 percent, respectively. Return on common equity
was 22.33 percent and return on assets was 1.67 percent for the first six
months of 1998, compared to 20.86 percent and 1.48 percent, respectively, for
the first six months of 1997.
"Our financial performance in the second quarter reinforces the success of
our internal performance improvement program, which we called Direction 2000,"
said Eugene A. Miller, chairman and chief executive officer. "Our financial
results reflect strong business loan growth coupled with excellent credit
quality, as well as higher fiduciary and wholesale fee income. They also
reflect our continued strong control of noninterest expenses, which resulted
in an efficiency ratio below 50 percent."
Net interest income for the second quarter of 1998 was $364 million,
unchanged 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. Excluding the
impact of the consumer sale, net interest income would have increased 4
percent. Net interest margin was 4.62 percent in the second quarter of 1998,
compared to 4.57 percent for the comparable quarter of 1997.
Noninterest income was $149 million for the second quarter of 1998,
compared to $121 million for the same quarter last year. Included in second
quarter 1998 noninterest income is a $9 million gain on the sale of the
mortgage servicing business and the aforementioned consumer loans. Excluding
the effect of certain nonrecurring items and divestitures in both periods,
noninterest income increased 15 percent in the second quarter of 1998 compared
to the second quarter of 1997.
Noninterest expenses were $253 million for the second quarter of 1998, up
$4 million or 2 percent from the second quarter of 1997.
The provision for credit losses was $28 million in the second quarter of
1998, a decrease of $6 million compared to the same period in 1997. Net
charge-offs for the quarter were $19 million or 0.27 percent of average total
loans, compared with $21 million or 0.31 percent in the second quarter of
1997. Nonperforming assets were $96 million or 0.34 percent of loans and
other real estate at June 30, 1998, compared to $94 million or 0.34 percent at
June 30, 1997. The allowance as a percent of loans was 1.57 percent at
June 30, 1998, compared to 1.46 percent at the end of the second quarter of
1997 and 1.47 percent at December 31, 1997.
Assets totaled $35 billion at June 30, 1998, compared to $36 billion in
1997, while common shareholders' equity was $2.6 billion in 1998, compared to
$2.4 billion in 1997. Shares of common stock outstanding at June 30, 1998
were 155 million compared to 158 million (on a post-split basis) at June 30,
1997. Total loans were $28 billion and total deposits were $23 billion, at
June 30, 1998 and 1997.
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
June 30
1998 1997
Interest Income
Interest and fees on loans $ 590,427 $ 578,441
Interest on investment
securities:
Taxable 56,582 79,534
Exempt from federal income
tax 1,927 2,937
Total interest on investment
securities 58,509 82,471
Interest on short-term investments 2,294 2,414
Total interest income 651,230 663,326
Interest Expense
Interest on deposits 160,927 169,805
Interest on short-term
borrowings:
Federal funds purchased and
securities sold under
agreements to repurchase 27,605 27,068
Other borrowed funds 17,563 29,597
Interest on medium- and
long-term debt 93,879 86,501
Net interest rate swap
income (13,222) (13,173)
Total interest expense 286,752 299,798
Net interest income 364,478 363,528
Provision for credit losses 28,000 34,000
Net interest income after
provision for credit losses 336,478 329,528
Noninterest Income
Income from fiduciary
activities 42,009 36,173
Service charges on deposit
accounts 39,517 34,995
Securities gains/(losses) 11 (234)
Other noninterest income 67,258 50,513
Total noninterest income 148,795 121,447
Noninterest Expenses
Salaries and employee benefits 137,994 135,443
Net occupancy expense 21,579 22,096
Equipment expense 15,167 15,165
Telecommunications expense 6,361 6,927
Other noninterest expenses 72,198 69,628
Total noninterest expenses 253,299 249,259
Income before income taxes 231,974 201,716
Provision for income taxes 81,591 72,006
Net income $ 150,383 $ 129,710
Net income applicable to
common stock $ 146,108 $ 125,435
Basic net income per common
share $ 0.94 $ 0.79
Diluted net income per common
share $ 0.92 $ 0.78
Cash dividends declared on
common stock $ 49,792 $ 45,341
Dividends per common share $ 0.32 $ 0.29
Six Months Ended
June 30
1998 1997
Interest Income
Interest and fees on loans $ 1,197,417 $1,124,013
Interest on investment
securities:
Taxable 118,888 156,017
Exempt from federal income
tax 4,020 5,992
Total interest on investment
securities 122,908 162,009
Interest on short-term investments 4,766 4,547
Total interest income 1,325,091 1,290,569
Interest Expense
Interest on deposits 328,064 329,471
Interest on short-term
borrowings:
Federal funds purchased and
securities sold under
agreements to repurchase 58,202 55,518
Other borrowed funds 30,812 56,586
Interest on medium- and
long-term debt 203,707 162,182
Net interest rate swap
income (25,780) (28,501)
Total interest expense 595,005 575,256
Net interest income 730,086 715,313
Provision for credit losses 56,000 75,000
Net interest income after
provision for credit losses 674,086 640,313
Noninterest Income
Income from fiduciary
activities 82,744 69,249
Service charges on deposit
accounts 77,967 69,949
Securities gains/(losses) (139) 263
Other noninterest income 123,075 111,380
Total noninterest income 283,647 250,841
Noninterest Expenses
Salaries and employee benefits 272,761 268,358
Net occupancy expense 44,340 45,388
Equipment expense 30,291 31,233
Telecommunications expense 12,983 14,071
Other noninterest expenses 142,797 138,946
Total noninterest expenses 503,172 497,996
Income before income taxes 454,561 393,158
Provision for income taxes 159,795 139,676
Net income $ 294,766 $ 253,482
Net income applicable to
common stock $ 286,216 $ 244,932
Basic net income per common
share $ 1.83 $ 1.54
Diluted net income per common
share $ 1.80 $ 1.52
Cash dividends declared on
common stock $ 99,965 $ 91,023
Dividends per common share $ 0.64 $ 0.57
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
(in thousands, except share data)
June 30 Dec. 31
1998 1997
Assets
Cash and due from banks $ 2,222,463 $ 1,927,087
Short-term investments 264,777 202,957
Investment securities available
for sale 3,396,952 4,005,962
Commercial loans 16,891,406 15,805,549
International loans 2,389,783 2,085,090
Real estate construction
loans 981,975 940,910
Commercial mortgage loans 3,788,052 3,633,785
Residential mortgage loans 1,360,363 1,565,445
Consumer loans 1,999,634 4,347,665
Lease financing 591,418 516,600
Total loans 28,002,631 28,895,044
Less allowance for credit
losses (438,875) (424,147)
Net loans 27,563,756 28,470,897
Premises and equipment 361,003 380,157
Customers' liability on
acceptances outstanding 26,252 18,392
Accrued income and other
assets 1,214,802 1,286,946
Total assets $35,050,005 $36,292,398
Liabilities and Shareholders'
Equity
Demand deposits
(noninterest-bearing) $ 6,392,257 $ 6,761,202
Interest-bearing deposits 16,226,376 15,825,115
Total deposits 22,618,633 22,586,317
Federal funds purchased and
securities sold under
agreements to repurchase 1,049,308 592,860
Other borrowed funds 2,542,210 2,600,041
Acceptances outstanding 26,254 18,392
Accrued expenses and other
liabilities 324,616 446,625
Medium- and long-term debt 5,662,180 7,286,387
Total liabilities 32,223,201 33,530,622
Nonredeemable preferred stock
- $50 stated value:
Authorized - 5,000,000 shares
Issued - 5,000,000 shares at
6/30/98, 12/31/97 and 6/30/97 250,000 250,000
Common stock - $5 par value:
Authorized - 325,000,000
shares
Issued - 157,187,518 shares
at 6/30/98, 156,815,367
shares at 12/31/97 and
105,620,404 shares at
6/30/97 785,938 784,077
Capital surplus 14,889 -
Unrealized gains and losses
on investment securities
available for sale (5,206) (1,937)
Retained earnings 1,904,223 1,731,419
Deferred compensation (3,071) (1,783)
Less cost of common stock in
treasury - 1,818,965 shares
at 6/30/98 (119,969) -
Total shareholders' equity 2,826,804 2,761,776
Total liabilities and
shareholders' equity $35,050,005 $36,292,398
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
(in thousands, except share data)
June 30
1997
Assets
Cash and due from banks $ 1,949,851
Short-term investments 177,391
Investment securities
available for sale 4,808,231
Commercial loans 14,687,352
International loans 2,022,621
Real estate construction
loans 867,787
Commercial mortgage loans 3,554,351
Residential mortgage loans 1,687,900
Consumer loans 4,474,213
Lease financing 430,514
Total loans 27,724,738
Less allowance for credit
losses (404,525)
Net loans 27,320,213
Premises and equipment 388,827
Customers' liability on
acceptances outstanding 30,737
Accrued income and other
assets 1,179,053
Total assets $35,854,303
Liabilities and Shareholders'
Equity
Demand deposits
(noninterest-bearing) $ 6,858,247
Interest-bearing deposits 15,818,294
Total deposits 22,676,541
Federal funds purchased and
securities sold under
agreements to repurchase 500,011
Other borrowed funds 3,534,555
Acceptances outstanding 30,737
Accrued expenses and other
liabilities 373,748
Medium- and long-term debt 6,070,543
Total liabilities 33,186,135
Nonredeemable preferred stock
- $50 stated value:
Authorized - 5,000,000 shares
Issued - 5,000,000 shares at
6/30/98, 12/31/97 and 6/30/97 250,000
Common stock - $5 par value:
Authorized - 325,000,000
shares
Issued - 157,187,518 shares
at 6/30/98, 156,815,367
shares at 12/31/97 and
105,620,404 shares at
6/30/97 528,102
Capital surplus -
Unrealized gains and losses
on investment securities
available for sale (13,993)
Retained earnings 1,906,324
Deferred compensation (2,265)
Less cost of common stock in
treasury - 1,818,965 shares
at 6/30/98 -
Total shareholders' equity 2,668,168
Total liabilities and
shareholders' equity $35,854,303
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
(in thousands, except per share data,
average balances and ratios)
Three Months Ended
June 30
1998 1997
Per Share and Common Stock
Data
Diluted net income $ 0.92 $ 0.78
Cash dividends declared 0.32 0.29
Common shareholders' equity
(at June 30) 16.59 15.26
Average diluted shares 159,013 160,707
Key Ratios (in percent)
Return on average common
equity 22.57 21.31
Return on average assets 1.74 1.49
Average common equity as a
percent of average assets 7.47 6.76
Core capital ratio 7.20 6.91
Total capital ratio 11.22 11.08
Leverage ratio 7.52 6.97
Average Balances (in millions)
Commercial loans (including
lease financing) $ 17,472 $ 14,569
International loans 2,261 1,924
Real estate construction loans 946 820
Commercial mortgage loans 3,738 3,523
Residential mortgage loans 1,404 1,702
Consumer loans 2,322 4,508
Total loans $ 28,143 $ 27,046
Earning assets 31,803 32,009
Total assets 34,640 34,814
Interest-bearing deposits 15,931 16,412
Noninterest-bearing deposits 6,165 5,715
Total interest-bearing
liabilities 25,241 26,077
Common shareholders' equity 2,589 2,354
Net Interest Income
Net interest
income (fully taxable
equivalent basis) $ 366,414 $ 366,067
Fully taxable equivalent
adjustment 1,936 2,539
Net interest margin (in percent) 4.62 4.57
Credit Quality
Nonaccrual loans $ 81,014 $ 57,159
Reduced-rate loans 8,260 9,889
Other real estate 6,591 26,754
Total nonperforming assets 95,865 93,802
Loans 90 days past due 37,423 53,620
Gross charge-offs 33,792 31,061
Recoveries 15,019 10,168
Net charge-offs 18,773 20,893
Allowance for credit losses
as a percentage of total
loans (in percent) 1.57 1.46
Nonperforming assets as a
percentage of total
loans and other real
estate (in percent) .34 .34
Net loans charged off as
a percentage of average
total loans (in percent) .27 .31
Allowance for credit losses
as a percentage of total
nonperforming assets (in
percent) 458 431
Additional Data
Goodwill $ 221,185 $ 242,558
Core deposit intangible 20,690 26,017
Other intangibles 2,695 4,758
Loan servicing rights 3,417 31,241
Six Months Ended
June 30
1998 1997
Per Share and Common Stock
Data
Diluted net income $ 1.80 $ 1.52
Cash dividends declared .64 .57
Common shareholders' equity
(at June 30)
Average diluted shares 159,391 161,547
Key Ratios (in percent)
Return on average common
equity 22.33 20.86
Return on average assets 1.67 1.48
Average common equity as a
percent of average assets 7.27 6.84
Core capital ratio
Total capital ratio
Leverage ratio
Average Balances (in millions)
Commercial loans (including
lease financing) $ 16,995 $ 14,238
International loans 2,173 1,855
Real estate construction loans 945 788
Commercial mortgage loans 3,700 3,497
Residential mortgage loans 1,462 1,718
Consumer loans 3,255 4,544
Total loans $ 28,530 $ 26,640
Earning assets 32,367 31,565
Total assets 35,270 34,346
Interest-bearing deposits 16,116 16,186
Noninterest-bearing deposits 6,082 5,696
Total interest-bearing
liabilities 25,948 25,570
Common shareholders' equity 2,563 2,348
Net Interest Income
Net interest
income (fully taxable
equivalent basis) $ 733,992 $ 720,329
Fully taxable equivalent
adjustment 3,906 5,016
Net interest margin (in percent) 4.56 4.58
Credit Quality
Nonaccrual loans
Reduced-rate loans
Other real estate
Total nonperforming assets
Loans 90 days past due
Gross charge-offs $ 66,630 $ 59,537
Recoveries 25,358 21,897
Net charge-offs 41,272 37,640
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) 0.29 0.28
Allowance for credit losses
as a percentage of total
nonperforming assets (in
percent)
Additional Data
Goodwill
Core deposit intangible
Other intangibles
Loan servicing rights
SOURCE Comerica Incorporated
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