DETROIT, Jan. 18 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported record 1999 earnings per share of $4.14, compared to $3.72 in 1998, an increase of 11 percent. Net income was $673 million, up 11 percent from $607 million for 1998. Return on common equity was 21.86 percent and return on assets was 1.82 percent, compared to 22.54 percent and 1.74 percent, respectively, for 1998.
Net income for the fourth quarter of 1999 was $1.08 per share or $176 million, compared to $0.97 per share or $158 million for the same period in 1998, both increases of 11 percent. Return on common equity was 21.60 percent and return on assets was 1.84 percent, compared to 22.49 percent and 1.78 percent, respectively, for the fourth quarter of 1998.
"We are pleased to announce that 1999 was yet another year of record earnings for Comerica," said Eugene A. Miller, chairman, president and chief executive officer. "Our continued strong commercial loan growth, together with our commitment to maintaining asset quality, managing interest rate risk, generating growth in fee income and controlling the growth in expenses, contributed to our financial success in 1999."
Net interest income for the fourth quarter of 1999 was $408 million, an increase of $37 million or 10 percent from the same period last year. This increase was primarily due to an increase in average commercial loans of 13 percent over last year's fourth quarter. The net interest margin was 4.60 percent in the fourth quarter of 1999, compared to 4.54 for the comparable quarter of 1998.
Noninterest income was $195 million for the fourth quarter of 1999, an increase of $28 million or 16 percent from $167 million for the same quarter last year. Excluding a $9 million gain on the sale of a warrant received due to an investment in a joint venture and divestitures in both periods, noninterest income increased $22 million or 14 percent over the fourth quarter last year. An increase in fiduciary, investment management and letter of credit fees supported the increase in noninterest income.
Noninterest expenses were $288 million for the fourth quarter of 1999, compared to $263 million in 1998. Salaries and employee benefits expense increased, due primarily to annual merit increases and higher levels of revenue-related incentives. Excluding the effect of large nonrecurring items and divestitures in both periods, noninterest expenses increased 4 percent in the fourth quarter of 1999, compared to the same period in 1998.
The provision for credit losses was $45 million for the fourth quarter of 1999, an increase of $9 million compared to the same period last year. Net charge-offs for the quarter were $32 million or 0.39 percent of average total loans, compared to $23 million or 0.30 percent in the fourth quarter of 1998. Nonperforming assets were $182 million or 0.56 percent of loans and other real estate at December 31, 1999, compared to $121 million or 0.39 percent at December 31, 1998. The allowance for credit losses as a percent of loans was 1.46 percent at December 31, 1999, compared to 1.48 at December 31, 1998.
Assets totaled $39 billion at December 31, 1999, compared to $37 billion in 1998, while common stockholders' equity was $3.2 billion at December 31, 1999, compared to $2.8 billion a year earlier. Shares of common stock outstanding at December 31, 1999 were 157 million compared to 156 million at December 31, 1998. Total loans were $33 billion at December 31, 1999, compared to $31 billion a year ago. Total deposits were $23 billion at December 31, 1999, compared to $24 billion in 1998.
Comerica Incorporated is a multi-state financial services provider headquartered in Detroit, with banking subsidiaries in Michigan, California and Texas, banking operations in Florida, and businesses in nine other states. Comerica also operates banking subsidiaries in Canada and Mexico.
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
(in thousands, except per share data)
Three Months Ended
December 31
1999 1998
INTEREST INCOME
Interest and fees on loans $682,495 $601,165
Interest on investment
securities:
Taxable 42,461 47,522
Exempt from federal income tax 903 1,478
Total interest on investment
securities 43,364 49,000
Interest on short-term investments 3,979 1,956
Total interest income 729,838 652,121
INTEREST EXPENSE
Interest on deposits 153,707 163,472
Interest on short-term borrowings 44,759 50,520
Interest on medium- and
long-term debt 126,984 77,991
Net interest rate swap income (3,887) (10,612)
Total interest expense 321,563 281,371
Net interest income 408,275 370,750
Provision for credit losses 45,000 36,000
Net interest income after
provision for credit losses 363,275 334,750
NONINTEREST INCOME
Fiduciary and investment
management income 65,299 51,819
Service charges on deposit
accounts 41,793 40,133
Commercial lending fees 13,675 15,476
Letter of credit fees 10,636 7,967
Securities gains 3,512 6,081
Other noninterest income 59,953 45,911
Total noninterest income 194,868 167,387
NONINTEREST EXPENSES
Salaries and employee benefits 165,375 150,290
Net occupancy expense 22,011 23,038
Equipment expense 15,479 14,897
Outside processing fee expense 11,230 11,131
Restructuring charge - (6,840)
Other noninterest expenses 73,718 70,535
Total noninterest expenses 287,813 263,051
Income before income taxes 270,330 239,086
Provision for income taxes 94,649 81,266
NET INCOME $175,681 $157,820
Net income applicable to
common stock $171,406 $153,545
Basic net income per common
share $1.10 $0.99
Diluted net income per common
share $1.08 $0.97
Cash dividends declared on
common stock $56,281 $49,788
Dividends per common share $0.36 $0.32
Year Ended
December 31
1999 1998
INTEREST INCOME
Interest and fees on loans $2,500,978 $2,382,329
Interest on investment
securities:
Taxable 156,933 218,378
Exempt from federal income tax 4,647 7,252
Total interest on investment
securities 161,580 225,630
Interest on short-term investments 10,152 8,815
Total interest income 2,672,710 2,616,774
INTEREST EXPENSE
Interest on deposits 590,335 647,825
Interest on short-term borrowings 179,133 185,711
Interest on medium- and
long-term debt 410,367 367,777
Net interest rate swap income (54,266) (45,810)
Total interest expense 1,125,569 1,155,503
Net interest income 1,547,141 1,461,271
Provision for credit losses 114,000 113,000
Net interest income after
provision for credit losses 1,433,141 1,348,271
NONINTEREST INCOME
Fiduciary and investment
management income 240,574 184,354
Service charges on deposit accounts 169,173 157,416
Commercial lending fees 48,887 43,326
Letter of credit fees 38,468 31,127
Securities gains 5,453 6,116
Other noninterest income 214,333 180,809
Total noninterest income 716,888 603,148
NONINTEREST EXPENSES
Salaries and employee benefits 640,357 565,303
Net occupancy expense 93,728 89,911
Equipment expense 61,092 60,147
Outside processing fee expense 47,754 42,785
Restructuring charge - (6,840)
Other noninterest expenses 274,026 268,738
Total noninterest expenses 1,116,957 1,020,044
Income before income taxes 1,033,072 931,375
Provision for income taxes 360,483 324,299
NET INCOME $672,589 $607,076
Net income applicable to
common stock $655,489 $589,976
Basic net income per common share $4.20 $3.79
Diluted net income per common share $4.14 $3.72
Cash dividends declared on
common stock $224,837 $199,403
Dividends per common share $1.44 $1.28
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
(in thousands, except share data)
Dec. 31, Dec. 31,
1999 1998
ASSETS
Cash and due from banks $1,201,990 $1,773,100
Short-term investments 612,959 109,640
Investment securities
available for sale 2,739,464 2,712,165
Commercial loans 20,654,658 19,086,541
International loans 2,573,003 2,713,259
Real estate construction
loans 1,709,261 1,079,614
Commercial mortgage loans 4,774,052 4,179,271
Residential mortgage loans 870,029 1,037,941
Consumer loans 1,350,725 1,861,630
Lease financing 761,550 646,607
Total loans 32,693,278 30,604,863
Less allowance for credit
losses (476,470) (452,409)
Net loans 32,216,808 30,152,454
Premises and equipment 330,728 352,650
Customers' liability on
acceptances outstanding 43,810 12,335
Accrued income and other
assets 1,507,573 1,488,487
Total assets $38,653,332 $36,600,831
LIABILITIES AND SHAREHOLDERS'
EQUITY
Noninterest-bearing deposits $6,136,038 $6,999,337
Interest-bearing deposits 17,155,365 17,313,796
Total deposits 23,291,403 24,313,133
Federal funds purchased and
securities sold under
agreements to repurchase 1,332,397 3,108,985
Other borrowed funds 1,435,634 471,168
Acceptances outstanding 43,810 12,335
Accrued expenses and other
liabilities 495,587 366,338
Medium- and long-term debt 8,579,857 5,282,259
Total liabilities 35,178,688 33,554,218
Nonredeemable preferred stock
- $50 stated value:
Authorized - 5,000,000 shares
Issued - 5,000,000 shares at
12/31/99 and 12/31/98 250,000 250,000
Common stock - $5 par value:
Authorized - 325,000,000
shares
Issued - 157,233,107 shares
at 12/31/99 and 157,233,088
shares at 12/31/98 786,166 786,165
Capital surplus 35,092 24,649
Accumulated nonowner changes
in equity (31,702) (6,455)
Retained earnings 2,485,204 2,086,589
Deferred compensation (2,955) (5,202)
Less cost of common stock in
treasury - 715,496 shares at
12/31/99 and 1,351,997 shares
at 12/31/98 (47,161) (89,133)
Total shareholders'
equity 3,474,644 3,046,613
Total liabilities and
shareholders' equity $38,653,332 $36,600,831
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
(in thousands, except per share data,
average balances and ratios)
Three Months Ended
December 31
1999 1998
PER SHARE AND COMMON STOCK
DATA
Diluted net income $1.08 $0.97
Cash dividends declared 0.36 0.32
Common shareholders' equity
(at December 31) 20.60 17.94
Average diluted shares 158,316 158,197
KEY RATIOS (in percent)
Return on average common
equity 21.60 22.49
Return on average assets 1.84 1.78
Average common equity as a
percentage of average assets 8.31 7.71
Core capital ratio (1999 estimated) 6.98 6.26
Total capital ratio
(1999 estimated) 10.76 10.28
Leverage ratio (1999 estimated) 8.40 7.68
AVERAGE BALANCES (in millions)
Commercial loans (including
lease financing) $21,184 $18,864
International loans 2,537 2,612
Real estate construction loans 1,658 1,061
Commercial mortgage loans 4,623 4,040
Residential mortgage loans 870 1,113
Consumer loans 1,825 1,870
Total loans $32,697 $29,560
Earning assets 35,297 32,613
Total assets 38,194 35,445
Interest-bearing deposits 16,321 16,571
Noninterest-bearing deposits 6,309 6,268
Total interest-bearing
liabilities 27,974 25,802
Common shareholders' equity 3,174 2,731
NET INTEREST INCOME
Net interest
income (fully taxable
equivalent basis) $409,345 $372,298
Fully taxable equivalent
adjustment 1,070 1,548
Net interest margin (in percent) 4.60 4.54
CREDIT QUALITY
Nonaccrual loans $165,093 $108,233
Reduced-rate loans 7,347 7,464
Other real estate 9,595 4,956
Total nonperforming assets 182,035 120,653
Loans 90 days past due 47,676 40,209
Gross charge-offs 44,626 29,746
Recoveries 12,636 7,226
Net charge-offs 31,990 22,520
Allowance for credit losses
as a percentage of total
loans (in percent) 1.46 1.48
Nonperforming assets as a
percentage of total
loans and other real
estate (in percent) 0.56 0.39
Net loans charged off as
a percentage of average
total loans (in percent) 0.39 0.30
Allowance for credit losses
as a percentage of total
nonperforming assets (in
percent) 262 375
ADDITIONAL DATA
Goodwill $316,469 $344,347
Core deposit intangible 12,767 18,035
Other intangibles 1,587 2,286
Loan servicing rights 4,605 4,223
Amortization of intangibles 8,504 8,485
Year Ended
December 31
1999 1998
PER SHARE AND COMMON STOCK
DATA
Diluted net income $4.14 $3.72
Cash dividends declared 1.44 1.28
Common shareholders' equity
(at December 31)
Average diluted shares 158,397 158,757
KEY RATIOS (in percent)
Return on average common
equity 21.86 22.54
Return on average assets 1.82 1.74
Average common equity as a
percentage of average assets 8.11 7.48
Core capital ratio (1999 estimated)
Total capital ratio (1999 estimated)
Leverage ratio (1999 estimated)
AVERAGE BALANCES (in millions)
Commercial loans (including
lease financing) $20,363 $17,549
International loans 2,627 2,342
Real estate construction loans 1,364 989
Commercial mortgage loans 4,461 3,819
Residential mortgage loans 929 1,325
Consumer loans 1,816 2,575
Total loans $31,560 $28,599
Earning assets 34,079 32,113
Total assets 36,960 34,987
Interest-bearing deposits 16,264 16,102
Noninterest-bearing deposits 6,255 6,151
Total interest-bearing
liabilities 27,035 25,554
Common shareholders' equity 2,999 2,617
NET INTEREST INCOME
Net interest
income (fully taxable
equivalent basis) $1,552,018 $1,468,422
Fully taxable equivalent
adjustment 4,877 7,151
Net interest margin (in percent) 4.55 4.57
CREDIT QUALITY
Nonaccrual loans
Reduced-rate loans
Other real estate
Total nonperforming assets
Loans 90 days past due
Gross charge-offs $120,976 $125,627
Recoveries 31,004 40,889
Net charge-offs 89,972 84,738
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 0.30
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 33,921 30,414
SOURCE Comerica Incorporated
