DETROIT, July 15 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today
reported second quarter diluted earnings per share of $1.03, compared to $0.92
in 1998, an increase of 12 percent.
Net income was $167 million, up 11
percent from $150 million for the second quarter of 1998.
Return on common
equity was 22.08 percent and return on assets was 1.83 percent, compared to
22.57 percent and 1.74 percent, respectively, for the second quarter of 1998.Net income for the first six months of 1999 was $2.01 per share or $326
million, compared
to $1.80 per share or $295 million for the same period in
1998, increases of 12 percent and 11 percent, respectively.
Return on common
equity was 21.99 percent and return on assets was 1.80 percent for the first
six months of 1999, compared to 22.33 percent and 1.67 percent, respectively,
for the first six months of 1998.``Our financial performance in the second quarter reflects our continued
commitment to create shareholder value through strong commercial loan growth,
superior asset quality and operating efficiency and investment in high-growth
businesses,'' said Eugene A. Miller, chairman and chief executive officer.Net interest income for the second quarter of 1999 was $380 million, an
increase of $15 million or 4 percent from the same period last year.
Net
interest income was affected by the sale of $2.0 billion of indirect consumer
loans and nonrelationship credit card receivables during the second quarter of
1998.
Excluding the impact of the consumer sale, net interest income would
have increased 5 percent.
The net interest margin was 4.53 percent in the
second quarter of 1999, compared to 4.62 for the comparable quarter of 1998.Noninterest income was $195 million for the second quarter of 1999,
compared to $149 million for the same quarter last year.
Included in second
quarter 1999 noninterest income was a $21 million nonrecurring gain on the
sale of Comerica's ownership in an ATM network provider.
Growth in fiduciary,
investment management and commercial fees, excluding the effect of large
nonrecurring items, acquisitions and divestitures in both periods, supported a
16 percent noninterest income increase in the second quarter of 1999, compared
to the second quarter of 1998.Noninterest expenses were $289 million for the second quarter of 1999,
compared to $253 million in 1998.
Excluding the effect of large nonrecurring
items, including a $5 million contribution to Comerica's charitable
foundation, acquisitions and divestitures in both periods, noninterest
expenses increased 11 percent in the second quarter of 1999, compared to the
second quarter of 1998.
Approximately one-half of this increase was directly
attributable to year 2000 readiness initiatives and revenue-related
incentives.The provision for credit losses was $28 million in both the second quarter
of 1999 and 1998.
Net charge-offs for the quarter were $21 million or 0.26
percent of average total loans, compared to $19 million or 0.27 percent in the
second quarter of 1998.
Nonperforming assets were $144 million or 0.46
percent of loans and other real estate at June 30, 1999, compared to $160
million or 0.52 percent at March 31, 1999, $121 million or 0.39 percent at
December 31, 1998, and $96 million or 0.34 percent at June 30, 1998.
The
allowance for credit losses as a percent of loans was 1.46 percent at June 30,
1999, compared to 1.48 at December 31, 1998, and 1.57 percent at the end of
the second quarter of 1998.Assets totaled $37 billion at June 30, 1999, compared to $35 billion in
1998, while common stockholders' equity was $3.0 billion at June 30, 1999,
compared to $2.6 billion a year earlier. Shares of common stock outstanding at
June 30, 1999, were 156 million compared to 155 million at June 30, 1998.
Total loans were $32 billion at June 30, 1999, compared to $28 billion a year
ago.
Total deposits were $22 billion at June 30, 1999, compared to $23
billion in 1998.Comerica Incorporated is a multi-state financial services provider
headquartered in Detroit, with bank subsidiaries in Michigan, California and
Texas, banking operations in Florida, and businesses in seven other states.
Comerica also operates banking subsidiaries in Canada and Mexico.
Comerica is
celebrating its 150th anniversary in 1999.
CONSOLIDATED STATEMENTS OF INCOMEComerica Incorporated and Subsidiaries(in thousands, except per share data)Three Months EndedJune 301999
1998Interest IncomeInterest and fees on loans
$600,325
$590,427Interest on investmentsecurities:Taxable
37,906
56,582Exempt from federal incometax
1,261
1,927Total interest on investmentsecurities
39,167
58,509Interest on short-term investments
2,009
2,294Total interest income
641,501
651,230
Interest ExpenseInterest on deposits
139,807
160,927Interest on short-termborrowings:Federal funds purchased andsecurities sold underagreements to repurchase
36,967
27,605Other borrowed funds
6,439
17,563Interest on medium- andlong-term debt
96,283
93,879Net interest rate swapincome
(17,637)
(13,222)Total interest expense
261,859
286,752Net interest income
379,642
364,478Provision for credit losses
28,000
28,000Net interest income afterprovision for credit losses
351,642
336,478
Noninterest Income
Fiduciary and investment
management income 59,839 42,009
Service charges on deposit
accounts 42,520 39,517
Commercial lending fees 11,315 9,0l9
Securities gains/(losses) 690 11
Other noninterest income 80,287 58,239
Total noninterest income 194,651 148,795
Noninterest Expenses
Salaries and employee benefits 162,567 137,994
Net occupancy expense 23,975 21,579
Equipment expense 15,442 15,167
Outside processing fee expense 12,341 11,291
Other noninterest expenses 74,555 67,268
Total noninterest expenses 288,880 253,299
Income before income taxes 257,413 231,974
Provision for income taxes 90,031 81,591
Net income $167,382 $150,383
Net income applicable to
common stock $163,107 $146,108
Basic net income per common
share $1.04 $0.94
Diluted net income per common
share $1.03 $0.92
Cash dividends declared on
common stock $56,181 $49,792
Dividends per common share $0.36 $0.32
Six Months Ended
June 30
1999 1998
Interest Income
Interest and fees on loans $1,186,687 $1,197,417
Interest on investment
securities:
Taxable 77,623 1l8,888
Exempt from federal income
tax 2,636 4,020
Total interest on investment
securities 80,259 122,908
Interest on short-term investments 3,990 4,766
Total interest income 1,270,936 1,325,091
Interest Expense
Interest on deposits 289,481 328,064
Interest on short-term
borrowings:
Federal funds purchased and
securities sold under
agreements to repurchase 76,918 58,202
Other borrowed funds 11,860 30,812
Interest on medium- and
long-term debt 180,714 203,707
Net interest rate swap
income (36,511) (25,780)
Total interest expense 522,462 595,005
Net interest income 748,474 730,086
Provision for credit losses 48,000 56,000
Net interest income after
provision for credit losses 700,474 674,086
Noninterest Income
Fiduciary and investment
management income 114,782 82,744
Service charges on deposit
accounts 84,218 77,967
Commercial lending fees 21,211 17,149
Securities gains/(losses) 1,892 (139)
Other noninterest income 129,442 105,926
Total noninterest income 351,545 283,647
Noninterest Expenses
Salaries and employee benefits 315,050 272,761
Net occupancy expense 47,069 44,340
Equipment expense 30,293 30,291
Outside processing fee expense 25,195 21,027
Other noninterest expenses 134,687 134,753
Total noninterest expenses 552,294 503,172
Income before income taxes 499,725 454,561
Provision for income taxes 173,231 159,795
Net income $326,494 $294,766
Net income applicable to
common stock $317,944 $286,216
Basic net income per common
share $2.04 $1.83
Diluted net income per common
share $2.01 $1.80
Cash dividends declared on
common stock $112,330 $99,965
Dividends per common share $0.72 $0.64
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
(in thousands, except share data)
June 30 Dec. 31
1999 1998
Assets
Cash and due from banks $1,535,721 $1,773,100
Short-term investments 85,182 109,640
Investment securities available
for sale 2,345,236 2,712,165
Commercial loans 19,647,781 19,086,541
International loans 2,629,303 2,713,259
Real estate construction
loans 1,377,101 1,079,614
Commercial mortgage loans 4,536,512 4,179,271
Residential mortgage loans 903,189 1,037,941
Consumer loans 1,800,840 1,861,630
Lease financing 671,525 646,607
Total loans 31,566,251 30,604,863
Less allowance for credit
losses (460,397) (452,409)
Net loans 31,105,854 30,152,454
Premises and equipment 345,298 352,650
Customers' liability on
acceptances outstanding 15,164 12,335
Accrued income and other
assets 1,518,032 1,488,487
Total assets $36,950,487 $36,600,831
Liabilities and Shareholders'
Equity
Noninterest-bearing deposits $6,515,942 $6,999,337
Interest-bearing deposits 15,837,640 17,313,796
Total deposits 22,353,582 24,313,133
Federal funds purchased and
securities sold under
agreements to repurchase 2,833,235 3,108,985
Other borrowed funds 912,330 471,168
Acceptances outstanding 15,164 12,335
Accrued expenses and other
liabilities 357,712 366,338
Medium- and long-term debt 7,231,275 5,282,259
Total liabilities 33,703,298 33,554,218
Nonredeemable preferred stock
- $50 stated value:
Authorized - 5,000,000 shares
Issued - 5,000,000,000 shares
at 6/30/99, 12/31/98 and
6/30/98 250,000 250,000
Common stock - $5 par value:
Authorized - 325,000,000
shares
Issued - 157,233,107 shares
at 6/30/99, 157,233,088
shares at 12/31/98 and
157,187,518 shares at
6/30/98 786,166 786,165
Capital surplus 31,946 24,649
Accumulated nonowner changes
in equity (26,058) (6,455)
Retained earnings 2,271,378 2,086,589
Deferred compensation (4,107) (5,202)
Less cost of common stock in
treasury - 942,715 shares
at 6/30/99, 1,351,997 shares
at 12/31/98 and 1,818,965
shares at 6/30/98 (62,136) (89,133)
Total shareholders' equity 3,247,189 3,046,613
Total liabilities and
shareholders' equity $36,950,487 $36,600,831
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
(in thousands, except share data)
June 30
1998
Assets
Cash and due from banks $2,222,463
Short-term investments 264,777
Investment securities
available for sale 3,396,952
Commercial loans 16,891,406
International loans 2,389,783
Real estate construction
loans 981,975
Commercial mortgage loans 3,788,052
Residential mortgage loans 1,360,363
Consumer loans 1,999,634
Lease financing 591,418
Total loans 28,002,631
Less allowance for credit
losses (438,875)
Net loans 27,563,756
Premises and equipment 361,003
Customers' liability on
acceptances outstanding 26,252
Accrued income and other
assets 1,214,802
Total assets $35,050,005
Liabilities and Shareholders'
Equity
Noninterest-bearing deposits $6,392,257
Interest-bearing deposits 16,226,376
Total deposits 22,618,633
Federal funds purchased and
securities sold under
agreements to repurchase 1,049,308
Other borrowed funds 2,542,210
Acceptances outstanding 26,252
Accrued expenses and other
liabilities 324,618
Medium- and long-term debt 5,662,180
Total liabilities 32,223,201
Nonredeemable preferred stock
- $50 stated value:
Authorized - 5,000,000 shares
Issued - 5,000,000 shares at
6/30/99, 12/31/98 and 6/30/98 250,000
Common stock - $5 par value:
Authorized - 325,000,000
shares
Issued - 157,233,107 shares
at 6/30/99, 157,233,088
shares at 12/31/98 and
157,187,518 shares at
6/30/98 785,938
Capital surplus 14,889
Accumulated nonowner changes
in equity (5,206)
Retained earnings 1,904,223
Deferred compensation (3,071)
Less cost of common stock in
treasury - 942,715 shares
at 6/30/99, 1,315,997 shares
at 12/31/98 and 1,818,965
shares at 6/30/98 (119,969)
Total shareholders' equity 2,826,804
Total liabilities and
shareholders' equity $35,050,005
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
(in thousands, except per share data,
average balances and ratios)
Three Months Ended
June 30
1999 1998
Per Share and Common Stock
Data
Diluted net income $1.03 $0.92
Cash dividends declared 0.36 0.32
Common shareholders' equity
(at June 30) 19.18 16.59
Average diluted shares 158,576 159,013
Key Ratios (in percent)
Return on average common
equity 22.08 22.57
Return on average assets 1.83 1.74
Average common equity as a
percent of average assets 8.07 7.47
Core capital ratio (l999 estimated) 6.74 6.47
Total capital ratio
(1999 estimated) 10.75 10.09
Leverage ratio (1999 estimated) 8.08 7.52
Average Balances (in millions)
Commercial loans (including
lease financing) $20,108 $17,472
International loans 2,666 2,261
Real estate construction loans 1,264 946
Commercial mortgage loans 4,434 3,738
Residential mortgage loans 937 1,404
Consumer loans 1,799 2,322
Total loans $31,208 $28,143
Earning assets 33,717 31,803
Total assets 36,624 34,640
Interest-bearing deposits 15,930 15,931
Noninterest-bearing deposits 6,275 6,165
Total interest-bearing
liabilities 26,769 25,241
Common shareholders' equity 2,955 2,589
Net Interest Income
Net interest
income (fully taxable
equivalent basis) $380,914 $366,414
Fully taxable equivalent
adjustment 1,272 1,936
Net interest margin (in percent) 4.53 4.62
Credit Quality
Nonaccrual loans $132,000 $81,014
Reduced-rate loans 7,342 8,260
Other real estate 5,056 6,591
Total nonperforming assets 144,398 95,865
Loans 90 days past due 54,747 37,423
Gross charge-offs 27,417 33,792
Recoveries 6,860 15,019
Net charge-offs 20,557 18,773
Allowance for credit losses
as a percentage of total
loans (in percent) 1.46 1.57
Nonperforming assets as a
percentage of total
loans and other real
estate (in percent) .46 .34
Net loans charged off as
a percentage of average
total loans (in percent) .26 .27
Allowance for credit losses
as a percentage of total
nonperforming assets (in
percent) 319 458
Additional Data
Goodwill $330,393 $221,185
Core deposit intangible 15,380 20,690
Other intangibles 1,997 2,695
Loan servicing rights 4,211 3,417
Amortization of intangibles 8,460 6,731
Six Months Ended
June 30
1999 1998
Per Share and Common Stock
Data
Diluted net income $2.01 $1.80
Cash dividends declared .72 .64
Common shareholder's equity
(at June 30)
Average diluted shares 158,463 159,391
Key Ratios (in percent)
Return on average common
equity 21.99 22.33
Return on average assets 1.80 1.67
Average common equity as a
percent of average assets 7.95 7.27
Core capital ratio (1999 estimated)
Total capital ratio (1999 estimated)
Leverage ratio (1999 estimated)
Average Balances (in millions)
Commercial loans (including
lease financing) $19,884 $16,995
International loans 2,672 2,173
Real estate construction loans 1,192 945
Commercial mortgage loans 4,352 3,700
Residential mortgage loans 981 1,462
Consumer loans 1,815 3,255
Total loans $30,896 $28,530
Earning assets 33,473 32,367
Total assets 36,355 35,270
Interest-bearing deposits 16,211 16,116
Noninterest-bearing deposits 6,257 6,082
Total interest-bearing
liabilities 26,569 25,948
Common shareholders' equity 2,892 2,563
Net Interest Income
Net interest
income (fully taxable
equivalent basis) $751,133 $733,992
Fully taxable equivalent
adjustment 2,659 3,906
Net interest margin (in percent) 4.52 4.56
Credit Quality
Nonaccrual loans
Reduced-rate loans
Other real estate
Total nonperforming assets
Loans 90 days past due
Gross charge-offs $52,127 $66,630
Recoveries 12,089 25,358
Net charge-offs 40,038 41,272
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) 0.26 0.29
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 16,937 13,462
