DETROIT, Jan. 16 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today
reported 2001 fourth quarter earnings of $1.11 per diluted share, or $199
million, compared to $0.94 per diluted share, or $173 million, for the fourth
quarter 2000. Affecting the quarter were $25 million ($0.10 per share) of
restructuring charges, an $8 million ($0.03 per share) gain on the sale of
substantially all of the assets of a deposit-servicing subsidiary, and a $5
million ($0.02 per share) gain from the demutualization of an insurance
carrier. Restructuring charges included the remaining merger-related
restructuring costs of $21 million for the previously announced acquisition of
Imperial Bancorp, and $4 million of charges incurred at Official Payments
Corporation ("OPAY") (Nasdaq: OPAY), a majority-owned subsidiary formerly
owned by Imperial.
(Photo: http://www.newscom.com/cgi-bin/prnh/20010807/CMALOGO )
Net income for 2001 was $3.88 per diluted share, or $710 million, versus
$4.31 per diluted share, or $791 million, for 2000. Excluding restructuring
charges, and the effect in the first quarter of a one-time $0.19 per share
charge related to long-term incentive plans at an unconsolidated subsidiary of
Munder Capital Management, earnings per share for 2001 were $4.80.
"Despite significant declines in interest rates during the year, we were
once again able to demonstrate our ability to manage interest rate risk," said
Ralph W. Babb Jr., president and chief executive officer. "As we enter 2002,
we are well positioned to continue our highly disciplined approach to serving
our customers and managing various types of risk. We will continue to
leverage our core competencies of business banking and asset gathering in the
future."
Net Interest Income
Net interest income for the fourth quarter was up three percent to $536
million, compared with $519 million for the fourth quarter of last year.
Earning assets also increased three percent, and the net interest margin
remained stable at 4.64 percent for both the fourth quarters of 2001 and 2000,
reflecting the success of the corporation's interest rate risk management
policy. The sectors of the commercial loan portfolio with strong average loan
growth when compared to the fourth quarter of last year were commercial
mortgage ($663 million), international ($456 million) and real estate
construction ($381 million). Average deposits increased 14 percent over last
year's fourth 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 20 percent over last year's fourth quarter.
Noninterest Income
Noninterest income was $215 million for the fourth quarter of 2001, a
decrease of $1 million or less than one percent from the same quarter last
year. Non-investment market-related fees, consisting of service charges,
commercial lending fees and letters of credit fees, were up $11 million (14
percent) on a combined basis from the $80 million level in the fourth quarter
last year and up $4 million (5 percent) from the third quarter.
"Integrated treasury management products and international trade service
expertise complement our core underwriting strength and allow Comerica to be
the full-service provider of choice to middle market companies in our
markets," Babb said.
Investment advisory revenue from assets under management at the company's
Munder Capital Management subsidiary declined $15 million, or 58 percent
relative to fourth quarter 2000, excluding the $7 million deferred
distribution cost impairment charge in the fourth quarter 2000. The decrease
was primarily attributable to the decline in the market values of technology-
related stocks, despite a slight recovery at the end of 2001. At December 31,
2001, assets under management at Munder were $35.4 billion, including $2.1
billion in the NetNet, International NetNet and Future Tech funds, compared
with $39.9 billion and $5.1 billion in the technology funds at the same time
last year. Net remaining deferred distribution costs subject to impairment at
December 31, 2001, were $33 million compared to $86 million at December 31,
2000.
Noninterest income for the fourth quarter of 2001 included an $8 million
gain from the sale of substantially all of the assets of a bankruptcy deposit-
servicing subsidiary and a $5 million gain from the demutualization of an
insurance carrier. Noninterest income in the fourth quarter of 2000 included
a $13 million gain associated with the sale of revolving credit and bankcard
loans, a write-down of $7 million of low income housing investments accounted
for under the equity method and an additional $6 million of low income housing
investment write-downs where the underlying investment is accounted for under
the cost method. Excluding the net gains on the sale of businesses, the
deferred distribution cost impairment charge discussed previously, the low
income housing investments write-downs, the effects of gains and losses on
securities, warrant income and divestitures, noninterest income was $202
million, a reduction of six percent over the same period last year.
Noninterest Expense
The decline in noninterest income was offset by reduced noninterest
expenses. Excluding this quarter's merger-related and OPAY restructuring
charges of $25 million, noninterest expenses declined by $30 million compared
to the fourth quarter of 2000. Contributing to this decline were savings due
to the successful integration of Imperial and a reduction of salaries and
benefits of $14 million, primarily as a result of a reduction in revenue-
related incentives.
Restructuring charges of $21 million in the fourth quarter of 2001 and
$173 million year-to-date complete the charges associated with the Imperial
merger. The additional $4 million in the fourth quarter 2001 represents
Comerica's portion of charges taken by OPAY.
"Excluding restructuring charges, an efficiency ratio of 46 percent for
the quarter is evidence of our ongoing cost discipline," added Babb. "With
the successful integration of the Imperial systems, we expect to fully realize
cost savings in 2002."
Credit Quality
4th Qtr '01 3rd Qtr '01 4th Qtr '00
Net Charge-offs (in millions) $ 59 $ 58 $ 94
Net Charge-offs/Average Total Loans 0.57% 0.56% 0.94%
Loan Loss Provision (in millions) $ 69 $ 58 $ 88
Nonperforming Assets (NPAs)
(in millions) $627 $616 $339
NPAs/Total Loans and Other
Real Estate 1.52% 1.52% 0.84%
Allowance for Credit Losses
(in millions) $655 $645 $608
Allowance for Credit Losses/
Total Loans 1.59% 1.59% 1.51%
