CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
------------------
December 31, September 30, December 31,
(in millions, except per
share data) 2009 2009 2008
------------------------ ---- ---- ----
PER COMMON SHARE AND
COMMON STOCK DATA
Diluted net income (loss) $(0.41) $(0.10) $0.02
Cash dividends declared 0.05 0.05 0.33
Common shareholders'
equity (at period end) 31.82 31.90 33.31
Average diluted shares (in
thousands) 151,516 151,478 150,834
-------------------------- ------- ------- -------
KEY RATIOS
Return on average common
shareholders' equity (5.10) % (1.27) % 0.19 %
Return on average assets (0.19) 0.12 0.12
Tier 1 common capital
ratio (a) (b) 8.18 8.04 7.08
Tier 1 risk-based capital
ratio (b) 12.46 12.21 10.66
Total risk-based capital
ratio (b) 16.93 16.79 14.72
Leverage ratio (b) 13.22 12.46 11.77
Tangible common equity
ratio (a) 7.99 7.96 7.21
---------------------- ---- ---- ----
AVERAGE BALANCES
Commercial loans $21,971 $23,401 $28,507
Real estate construction
loans 3,703 4,033 4,536
Commercial mortgage loans 10,393 10,359 10,613
Residential mortgage loans 1,664 1,720 1,851
Consumer loans 2,517 2,550 2,639
Lease financing 1,181 1,218 1,359
International loans 1,324 1,501 1,833
----- ----- -----
Total loans 42,753 44,782 51,338
Earning assets 53,953 57,513 61,134
Total assets 58,396 61,948 65,981
Noninterest-bearing
deposits 14,430 13,225 10,575
Interest-bearing core
deposits 22,312 22,582 22,523
Total core deposits 36,742 35,807 33,098
Common shareholders'
equity 4,876 4,923 5,206
Total shareholders' equity 7,024 7,065 6,301
-------------------------- ----- ----- -----
NET INTEREST INCOME
Net interest income (fully
taxable equivalent basis)
(c) $398 $387 $434
Fully taxable equivalent
adjustment 2 2 3
Net interest margin (c)
(d) 2.94 % 2.68 % 2.82 %
----------------------- ---- ---- ----
CREDIT QUALITY
Nonaccrual loans $1,163 $1,194 $917
Reduced-rate loans 18 2 -
--- --- ---
Total nonperforming loans 1,181 1,196 917
Foreclosed property 111 109 66
--- --- ---
Total nonperforming assets 1,292 1,305 983
Loans past due 90 days or
more and still accruing 101 161 125
Gross loan charge-offs 233 245 144
Loan recoveries 8 6 11
--- --- ---
Net loan charge-offs 225 239 133
Lending-related
commitment charge-offs - - -
--- --- ---
Total net credit-related
charge-offs 225 239 133
Allowance for loan losses 985 953 770
Allowance for credit
losses on lending-
related commitments 37 35 38
--- --- ---
Total allowance for credit
losses 1,022 988 808
Allowance for loan losses
as a percentage of total
loans 2.34 % 2.19 % 1.52 %
Net loan charge-offs as a
percentage of average
total loans 2.10 2.14 1.04
Net credit-related
charge-offs as a
percentage of average
total loans 2.10 2.14 1.04
Nonperforming assets as a
percentage of total loans
and foreclosed property 3.06 2.99 1.94
Allowance for loan losses
as a percentage of total
nonperforming loans 83 80 84
------------------------- --- --- ---
Years Ended
-----------
December 31,
(in millions, except per share data) 2009 2008
------------------------------------ ---- ----
PER COMMON SHARE AND COMMON STOCK DATA
Diluted net income (loss) $(0.77) $1.29
Cash dividends declared 0.20 2.31
Common shareholders' equity (at period
end)
Average diluted shares (in thousands) 151,460 151,035
------------------------------------- ------- -------
KEY RATIOS
Return on average common shareholders'
equity (2.37) % 3.79 %
Return on average assets 0.03 0.33
Tier 1 common capital ratio (a) (b)
Tier 1 risk-based capital ratio (b)
Total risk-based capital ratio (b)
Leverage ratio (b)
Tangible common equity ratio (a)
--------------------------------
AVERAGE BALANCES
Commercial loans $24,534 $28,870
Real estate construction loans 4,140 4,715
Commercial mortgage loans 10,415 10,411
Residential mortgage loans 1,756 1,886
Consumer loans 2,553 2,559
Lease financing 1,231 1,356
International loans 1,533 1,968
----- -----
Total loans 46,162 51,765
Earning assets 58,162 60,422
Total assets 62,809 65,185
Noninterest-bearing deposits 12,900 10,623
Interest-bearing core deposits 22,435 23,739
Total core deposits 35,335 34,362
Common shareholders' equity 4,959 5,166
Total shareholders' equity 7,099 5,442
-------------------------- ----- -----
NET INTEREST INCOME
Net interest income (fully taxable
equivalent basis) (c) $1,575 $1,821
Fully taxable equivalent adjustment 8 6
Net interest margin (c) (d) 2.72 % 3.02 %
--------------------------- ---- ----
CREDIT QUALITY
Nonaccrual loans
Reduced-rate loans
Total nonperforming loans
Foreclosed property
Total nonperforming assets
Loans past due 90 days or more and still
accruing
Gross loan charge-offs $896 $500
Loan recoveries 27 29
--- ---
Net loan charge-offs 869 471
Lending-related commitment charge-offs - 1
--- ---
Total net credit-related charge-offs 869 472
Allowance for loan losses
Allowance for credit losses on lending-
related commitments
Total allowance for credit losses
Allowance for loan losses as a percentage
of total loans
Net loan charge-offs as a percentage of
average total loans 1.88 % 0.91 %
Net credit-related charge-offs as a
percentage of average total loans 1.88 0.91
Nonperforming assets as a percentage of
total loans and foreclosed property
Allowance for loan losses as a percentage
of total nonperforming loans
-----------------------------------------
(a) See Reconciliation of Non-GAAP Financial Measures.
(b) December 31, 2009 ratios are estimated
(c) Year-to-date 2008 net interest income declined $38 million due
to tax-related non-cash lease income charges. Excluding these
charges, the net interest margin would have been 3.08%
for the year ended December 31, 2008.
(d) Excess liquidity, represented by average balances deposited with
the Federal Reserve Bank, reduced the net interest margin by 13
basis points, 16 basis points and 11 basis points in the
fourth quarter 2009, third quarter 2009 and full-year 2009,
respectively. Excluding excess liquidity, the net interest margin
would have been 3.07%, 2.84% and 2.83% in each respective
period. Excess liquidity reduced the net interest margin by 3 basis
points and one basis point in the fourth quarter 2008 and full-year
2008, respectively.
CONSOLIDATED BALANCE SHEETS (unaudited)
Comerica Incorporated and Subsidiaries
December 31, September 30,
(in millions, except share data) 2009 2009
-------------------------------- ---- ----
ASSETS
Cash and due from banks $774 $799
Federal funds sold and securities
purchased under agreements to resell - -
Interest-bearing deposits with banks 4,843 2,219
Other short-term investments 138 142
Investment securities available-for-sale 7,416 8,882
Commercial loans 21,690 22,546
Real estate construction loans 3,461 3,870
Commercial mortgage loans 10,457 10,380
Residential mortgage loans 1,651 1,679
Consumer loans 2,511 2,544
Lease financing 1,139 1,197
International loans 1,252 1,355
------------------- ----- -----
Total loans 42,161 43,571
Less allowance for loan losses (985) (953)
------------------------------ ---- ----
Net loans 41,176 42,618
Premises and equipment 644 657
Customers' liability on acceptances
outstanding 11 12
Accrued income and other assets 4,261 4,261
------------------------------- ----- -----
Total assets $59,263 $59,590
------------ ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $15,871 $13,888
Money market and NOW deposits 14,450 13,556
Savings deposits 1,342 1,331
Customer certificates of deposit 6,413 7,466
Other time deposits 1,047 2,801
Foreign office time deposits 542 572
---------------------------- --- ---
Total interest-bearing deposits 23,794 25,726
------------------------------- ------ ------
Total deposits 39,665 39,614
Short-term borrowings 462 425
Acceptances outstanding 11 12
Accrued expenses and other liabilities 1,036 1,252
Medium- and long-term debt 11,060 11,252
-------------------------- ------ ------
Total liabilities 52,234 52,555
Fixed rate cumulative perpetual preferred
stock, series F,
no par value, $1,000 liquidation value per
share:
Authorized - 2,250,000 shares
Issued -2,250,000 shares at 12/31/09,
9/30/09 and 12/31/08 2,151 2,145
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued -178,735,252 shares at 12/31/09,
9/30/09 and 12/31/08 894 894
Capital surplus 740 738
Accumulated other comprehensive loss (336) (361)
Retained earnings 5,161 5,205
Less cost of common stock in treasury -
27,555,623 shares at 12/31/09, 27,620,576
shares
at 9/30/09 and 28,244,967 shares at
12/31/08 (1,581) (1,586)
----------------------------------- ------ ------
Total shareholders' equity 7,029 7,035
-------------------------- ----- -----
Total liabilities and shareholders' equity $59,263 $59,590
------------------------------------------ ------- -------
December 31,
(in millions, except share data) 2008
-------------------------------- ----
ASSETS
Cash and due from banks $913
Federal funds sold and securities purchased under
agreements to resell 202
Interest-bearing deposits with banks 2,308
Other short-term investments 158
Investment securities available-for-sale 9,201
Commercial loans 27,999
Real estate construction loans 4,477
Commercial mortgage loans 10,489
Residential mortgage loans 1,852
Consumer loans 2,592
Lease financing 1,343
International loans 1,753
------------------- -----
Total loans 50,505
Less allowance for loan losses (770)
------------------------------ ----
Net loans 49,735
Premises and equipment 683
Customers' liability on acceptances outstanding 14
Accrued income and other assets 4,334
------------------------------- -----
Total assets $67,548
------------ -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $11,701
Money market and NOW deposits 12,437
Savings deposits 1,247
Customer certificates of deposit 8,807
Other time deposits 7,293
Foreign office time deposits 470
---------------------------- ---
Total interest-bearing deposits 30,254
------------------------------- ------
Total deposits 41,955
Short-term borrowings 1,749
Acceptances outstanding 14
Accrued expenses and other liabilities 1,625
Medium- and long-term debt 15,053
-------------------------- ------
Total liabilities 60,396
Fixed rate cumulative perpetual preferred stock, series F,
no par value, $1,000 liquidation value per share:
Authorized - 2,250,000 shares
Issued -2,250,000 shares at 12/31/09, 9/30/09 and
12/31/08 2,129
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued -178,735,252 shares at 12/31/09, 9/30/09 and
12/31/08 894
Capital surplus 722
Accumulated other comprehensive loss (309)
Retained earnings 5,345
Less cost of common stock in treasury -27,555,623 shares
at 12/31/09, 27,620,576 shares
at 9/30/09 and 28,244,967 shares at 12/31/08 (1,629)
-------------------------------------------- ------
Total shareholders' equity 7,152
-------------------------- -----
Total liabilities and shareholders' equity $67,548
------------------------------------------ -------
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
December 31,
------------
(in millions, except per share data) 2009 2008
------------------------------------ ---- ----
INTEREST INCOME
Interest and fees on loans $424 $612
Interest on investment securities 53 101
Interest on short-term investments 2 3
---------------------------------- --- ---
Total interest income 479 716
INTEREST EXPENSE
Interest on deposits 52 158
Interest on short-term borrowings - 9
Interest on medium- and long-term debt 31 118
-------------------------------------- --- ---
Total interest expense 83 285
---------------------- --- ---
Net interest income 396 431
Provision for loan losses 257 192
------------------------- --- ---
Net interest income after
provision for loan losses 139 239
NONINTEREST INCOME
Service charges on deposit accounts 56 55
Fiduciary income 38 47
Commercial lending fees 21 16
Letter of credit fees 19 17
Card fees 14 13
Foreign exchange income 11 7
Bank-owned life insurance 9 9
Brokerage fees 7 12
Net securities gains 10 4
Other noninterest income 29 (6)
------------------------ --- ---
Total noninterest income 214 174
NONINTEREST EXPENSES
Salaries 174 187
Employee benefits 51 53
----------------- --- ---
Total salaries and employee benefits 225 240
Net occupancy expense 43 42
Equipment expense 16 16
Outside processing fee expense 23 27
FDIC insurance expense 15 7
Software expense 23 19
Other real estate expense 22 5
Legal fees 12 10
Litigation and operational losses 3 3
Customer services 2 2
Provision for credit losses on lending-
related commitments 2 (2)
Other noninterest expenses 38 42
-------------------------- --- ---
Total noninterest expenses 424 411
-------------------------- --- ---
Income (loss) from continuing operations
before income taxes (71) 2
Provision (benefit) for income taxes (42) (17)
------------------------------------ --- ---
Income (loss) from continuing operations (29) 19
Income from discontinued operations, net
of tax - 1
---------------------------------------- --- ---
NET INCOME (LOSS) (29) 20
Preferred stock dividends 33 17
------------------------- --- ---
Net income (loss) applicable to common
stock $(62) $3
-------------------------------------- ---- ---
Basic earnings per common share:
Income (loss) from continuing operations $(0.41) $0.01
Net income (loss) (0.41) 0.02
Diluted earnings per common share:
Income (loss) from continuing operations (0.41) 0.01
Net income (loss) (0.41) 0.02
Cash dividends declared on common stock 8 50
Cash dividends declared per common share 0.05 0.33
---------------------------------------- ---- ----
Years Ended
December 31,
------------
(in millions, except per share data) 2009 2008
------------------------------------ ---- ----
INTEREST INCOME
Interest and fees on loans $1,767 $2,649
Interest on investment securities 329 389
Interest on short-term investments 9 13
---------------------------------- --- ---
Total interest income 2,105 3,051
INTEREST EXPENSE
Interest on deposits 372 734
Interest on short-term borrowings 2 87
Interest on medium- and long-term debt 164 415
-------------------------------------- --- ---
Total interest expense 538 1,236
---------------------- --- -----
Net interest income 1,567 1,815
Provision for loan losses 1,083 686
------------------------- ----- ---
Net interest income after
provision for loan losses 484 1,129
NONINTEREST INCOME
Service charges on deposit accounts 228 229
Fiduciary income 161 199
Commercial lending fees 79 69
Letter of credit fees 69 69
Card fees 51 58
Foreign exchange income 41 40
Bank-owned life insurance 35 38
Brokerage fees 31 42
Net securities gains 243 67
Other noninterest income 112 82
------------------------ --- ---
Total noninterest income 1,050 893
NONINTEREST EXPENSES
Salaries 687 781
Employee benefits 210 194
----------------- --- ---
Total salaries and employee benefits 897 975
Net occupancy expense 162 156
Equipment expense 62 62
Outside processing fee expense 97 104
FDIC insurance expense 90 16
Software expense 84 76
Other real estate expense 48 10
Legal fees 37 29
Litigation and operational losses 10 103
Customer services 4 13
Provision for credit losses on lending-
related commitments (1) 18
Other noninterest expenses 159 189
-------------------------- --- ---
Total noninterest expenses 1,649 1,751
-------------------------- ----- -----
Income (loss) from continuing operations
before income taxes (115) 271
Provision (benefit) for income taxes (131) 59
------------------------------------ ---- ---
Income (loss) from continuing operations 16 212
Income from discontinued operations, net
of tax 1 1
---------------------------------------- --- ---
NET INCOME (LOSS) 17 213
Preferred stock dividends 134 17
------------------------- --- ---
Net income (loss) applicable to common
stock $(117) $196
-------------------------------------- ----- ----
Basic earnings per common share:
Income (loss) from continuing operations $(0.78) $1.29
Net income (loss) (0.77) 1.30
Diluted earnings per common share:
Income (loss) from continuing operations (0.78) 1.29
Net income (loss) (0.77) 1.29
Cash dividends declared on common stock 30 348
Cash dividends declared per common share 0.20 2.31
---------------------------------------- ---- ----
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Fourth Third Second
Quarter Quarter Quarter
(in millions, except per
share data) 2009 2009 2009
------------------------ ---- ---- ----
INTEREST INCOME
Interest and fees on loans $424 $444 $447
Interest on investment
securities 53 64 103
Interest on short-term
investments 2 3 2
---------------------- --- --- ---
Total interest income 479 511 552
INTEREST EXPENSE
Interest on deposits 52 89 106
Interest on short-term
borrowings - - -
Interest on medium- and
long-term debt 31 37 44
----------------------- --- --- ---
Total interest expense 83 126 150
---------------------- --- --- ---
Net interest income 396 385 402
Provision for loan losses 257 311 312
------------------------- --- --- ---
Net interest income after
provision
for loan losses 139 74 90
NONINTEREST INCOME
Service charges on deposit
accounts 56 59 55
Fiduciary income 38 40 41
Commercial lending fees 21 21 19
Letter of credit fees 19 18 16
Card fees 14 13 12
Foreign exchange income 11 10 11
Bank-owned life insurance 9 8 10
Brokerage fees 7 7 8
Net securities gains 10 107 113
Other noninterest income 29 32 13
------------------------ --- --- ---
Total noninterest income 214 315 298
NONINTEREST EXPENSES
Salaries 174 171 171
Employee benefits 51 51 53
----------------- --- --- ---
Total salaries and employee
benefits 225 222 224
Net occupancy expense 43 40 38
Equipment expense 16 15 15
Outside processing fee
expense 23 24 25
FDIC insurance expense 15 15 45
Software expense 23 21 20
Other real estate expense 22 10 9
Legal fees 12 8 10
Litigation and operational
losses 3 3 2
Customer services 2 1 1
Provision for credit losses
on lending-related
commitments 2 2 (4)
Other noninterest expenses 38 38 44
-------------------------- --- --- ---
Total noninterest expenses 424 399 429
-------------------------- --- --- ---
Income (loss) from
continuing operations
before income taxes (71) (10) (41)
Provision (benefit) for
income taxes (42) (29) (59)
----------------------- --- --- ---
Income (loss) from
continuing operations (29) 19 18
Income from discontinued
operations, net of tax - - -
------------------------ --- --- ---
NET INCOME (LOSS) (29) 19 18
Preferred stock dividends 33 34 34
------------------------- --- --- ---
Net income (loss)
applicable to common stock $(62) $(15) $(16)
--------------------------- ---- ---- ----
Basic earnings per common
share:
Income (loss) from
continuing operations $(0.41) $(0.10) $(0.11)
Net income (loss) (0.41) (0.10) (0.10)
Diluted earnings per common
share:
Income (loss) from
continuing operations (0.41) (0.10) (0.11)
Net income (loss) (0.41) (0.10) (0.10)
Cash dividends declared on
common stock 8 7 8
Cash dividends declared per
common share 0.05 0.05 0.05
--------------------------- ---- ---- ----
N/M - Not meaningful
First Fourth
Quarter Quarter
(in millions, except per share data) 2009 2008
------------------------------------ ---- ----
INTEREST INCOME
Interest and fees on loans $452 $612
Interest on investment securities 109 101
Interest on short-term investments 2 3
---------------------------------- --- ---
Total interest income 563 716
INTEREST EXPENSE
Interest on deposits 125 158
Interest on short-term borrowings 2 9
Interest on medium- and long-term debt 52 118
-------------------------------------- --- ---
Total interest expense 179 285
---------------------- --- ---
Net interest income 384 431
Provision for loan losses 203 192
------------------------- --- ---
Net interest income after
provision
for loan losses 181 239
NONINTEREST INCOME
Service charges on deposit accounts 58 55
Fiduciary income 42 47
Commercial lending fees 18 16
Letter of credit fees 16 17
Card fees 12 13
Foreign exchange income 9 7
Bank-owned life insurance 8 9
Brokerage fees 9 12
Net securities gains 13 4
Other noninterest income 38 (6)
------------------------ --- ---
Total noninterest income 223 174
NONINTEREST EXPENSES
Salaries 171 187
Employee benefits 55 53
----------------- --- ---
Total salaries and employee benefits 226 240
Net occupancy expense 41 42
Equipment expense 16 16
Outside processing fee expense 25 27
FDIC insurance expense 15 7
Software expense 20 19
Other real estate expense 7 5
Legal fees 7 10
Litigation and operational losses 2 3
Customer services - 2
Provision for credit losses on lending-
related commitments (1) (2)
Other noninterest expenses 39 42
-------------------------- --- ---
Total noninterest expenses 397 411
-------------------------- --- ---
Income (loss) from continuing operations
before income taxes 7 2
Provision (benefit) for income taxes (1) (17)
------------------------------------ --- ---
Income (loss) from continuing operations 8 19
Income from discontinued operations, net
of tax 1 1
---------------------------------------- --- ---
NET INCOME (LOSS) 9 20
Preferred stock dividends 33 17
------------------------- --- ---
Net income (loss) applicable to common
stock $(24) $3
-------------------------------------- ---- ---
Basic earnings per common share:
Income (loss) from continuing operations $(0.16) $0.01
Net income (loss) (0.16) 0.02
Diluted earnings per common share:
Income (loss) from continuing operations (0.16) 0.01
Net income (loss) (0.16) 0.02
Cash dividends declared on common stock 7 50
Cash dividends declared per common share 0.05 0.33
---------------------------------------- ---- ----
N/M - Not meaningful
Fourth Quarter 2009
-------------------
Compared To:
------------
Third Quarter 2009
(in millions, except per share data) Amount Percent
------------------------------------ ------ -------
INTEREST INCOME
Interest and fees on loans $(20) (4) %
Interest on investment securities (11) (18)
Interest on short-term investments (1) (25)
---------------------------------- --- ---
Total interest income (32) (6)
INTEREST EXPENSE
Interest on deposits (37) (43)
Interest on short-term borrowings - (63)
Interest on medium- and long-term debt (6) (15)
-------------------------------------- --- ---
Total interest expense (43) (34)
---------------------- --- ---
Net interest income 11 3
Provision for loan losses (54) (17)
------------------------- --- ---
Net interest income after
provision
for loan losses 65 89
NONINTEREST INCOME
Service charges on deposit accounts (3) (6)
Fiduciary income (2) (2)
Commercial lending fees - 3
Letter of credit fees 1 6
Card fees 1 3
Foreign exchange income 1 -
Bank-owned life insurance 1 10
Brokerage fees - (8)
Net securities gains (97) (90)
Other noninterest income (3) (7)
------------------------ --- ---
Total noninterest income (101) (32)
NONINTEREST EXPENSES
Salaries 3 2
Employee benefits - 2
----------------- --- ---
Total salaries and employee benefits 3 2
Net occupancy expense 3 6
Equipment expense 1 3
Outside processing fee expense (1) (6)
FDIC insurance expense - -
Software expense 2 8
Other real estate expense 12 N/M
Legal fees 4 41
Litigation and operational losses - (27)
Customer services 1 31
Provision for credit losses on lending-
related commitments - (19)
Other noninterest expenses - 13
-------------------------- --- ---
Total noninterest expenses 25 6
-------------------------- --- ---
Income (loss) from continuing operations
before income taxes (61) N/M
Provision (benefit) for income taxes (13) (48)
------------------------------------ --- ---
Income (loss) from continuing operations (48) N/M
Income from discontinued operations, net
of tax - N/M
---------------------------------------- --- ---
NET INCOME (LOSS) (48) N/M
Preferred stock dividends (1) -
------------------------- --- ---
Net income (loss) applicable to common
stock $(47) N/M %
-------------------------------------- ---- --- ---
Basic earnings per common share:
Income (loss) from continuing operations $(0.31) N/M %
Net income (loss) (0.31) N/M
Diluted earnings per common share:
Income (loss) from continuing operations (0.31) N/M
Net income (loss) (0.31) N/M
Cash dividends declared on common stock 1 2
Cash dividends declared per common share - -
---------------------------------------- --- ---
N/M - Not meaningful
Fourth Quarter 2009
-------------------
Compared To:
------------
Fourth Quarter 2008
(in millions, except per share data) Amount Percent
------------------------------------ ------ -------
INTEREST INCOME
Interest and fees on loans $(188) (31) %
Interest on investment securities (48) (48)
Interest on short-term investments (1) (21)
---------------------------------- --- ---
Total interest income (237) (33)
INTEREST EXPENSE
Interest on deposits (106) (68)
Interest on short-term borrowings (9) (99)
Interest on medium- and long-term debt (87) (74)
-------------------------------------- --- ---
Total interest expense (202) (71)
---------------------- ---- ---
Net interest income (35) (8)
Provision for loan losses 65 34
------------------------- --- ---
Net interest income after
provision
for loan losses (100) (41)
NONINTEREST INCOME
Service charges on deposit accounts 1 1
Fiduciary income (9) (18)
Commercial lending fees 5 33
Letter of credit fees 2 8
Card fees 1 2
Foreign exchange income 4 38
Bank-owned life insurance - 3
Brokerage fees (5) (40)
Net securities gains 6 N/M
Other noninterest income 35 N/M
------------------------ --- --
Total noninterest income 40 23
NONINTEREST EXPENSES
Salaries (13) (7)
Employee benefits (2) (3)
----------------- --- ---
Total salaries and employee benefits (15) (6)
Net occupancy expense 1 2
Equipment expense - (5)
Outside processing fee expense (4) (17)
FDIC insurance expense 8 N/M
Software expense 4 18
Other real estate expense 17 N/M
Legal fees 2 24
Litigation and operational losses - 5
Customer services - (27)
Provision for credit losses on lending-
related commitments 4 N/M
Other noninterest expenses (4) (5)
-------------------------- --- ---
Total noninterest expenses 13 3
-------------------------- --- ---
Income (loss) from continuing operations
before income taxes (73) N/M
Provision (benefit) for income taxes (25) N/M
------------------------------------ --- --
Income (loss) from continuing operations (48) N/M
Income from discontinued operations, net
of tax (1) (92)
---------------------------------------- --- ---
NET INCOME (LOSS) (49) N/M
Preferred stock dividends 16 95
------------------------- --- ---
Net income (loss) applicable to common
stock $(65) N/M %
-------------------------------------- ---- --- ---
Basic earnings per common share:
Income (loss) from continuing operations $(0.42) N/M %
Net income (loss) (0.43) N/M
Diluted earnings per common share:
Income (loss) from continuing operations (0.42) N/M
Net income (loss) (0.43) N/M
Cash dividends declared on common stock (42) (85)
Cash dividends declared per common share (0.28) (85)
---------------------------------------- ----- ---
N/M - Not meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
2009
----
(in millions) 4th Qtr 3rd Qtr
------------- ------- -------
Balance at beginning of period $953 $880
Loan charge-offs:
Commercial 114 113
Real estate construction:
Commercial Real Estate business line (a) 33 63
Other business lines (b) - 1
------------------------ --- ---
Total real estate construction 33 64
Commercial mortgage:
Commercial Real Estate business line (a) 27 24
Other business lines (b) 25 15
------------------------ --- ---
Total commercial mortgage 52 39
Residential mortgage 6 11
Consumer 9 7
Lease financing 6 6
International 13 5
------------- --- ---
Total loan charge-offs 233 245
Recoveries on loans previously charged-off:
Commercial 7 3
Real estate construction - 1
Commercial mortgage 1 -
Residential mortgage - -
Consumer - 1
Lease financing - -
International - 1
------------- --- ---
Total recoveries 8 6
---------------- --- ---
Net loan charge-offs 225 239
Provision for loan losses 257 311
Foreign currency translation adjustment - 1
--------------------------------------- --- ---
Balance at end of period $985 $953
------------------------ ---- ----
Allowance for loan losses as a percentage of
total loans 2.34 % 2.19 %
Net loan charge-offs as a percentage of
average total loans 2.10 2.14
Net credit-related charge-offs as a
percentage of average total loans 2.10 2.14
----------------------------------- ---- ----
2009
----
(in millions) 2nd Qtr 1st Qtr
------------- ------- -------
Balance at beginning of period $816 $770
Loan charge-offs:
Commercial 88 61
Real estate construction:
Commercial Real Estate business line (a) 81 57
Other business lines (b) - -
------------------------ --- ---
Total real estate construction 81 57
Commercial mortgage:
Commercial Real Estate business line (a) 23 16
Other business lines (b) 23 18
------------------------ --- ---
Total commercial mortgage 46 34
Residential mortgage 2 2
Consumer 12 6
Lease financing 24 -
International 4 1
------------- --- ---
Total loan charge-offs 257 161
Recoveries on loans previously charged-off:
Commercial 5 3
Real estate construction - -
Commercial mortgage 2 -
Residential mortgage - -
Consumer - 1
Lease financing 1 -
International 1 -
------------- --- ---
Total recoveries 9 4
---------------- --- ---
Net loan charge-offs 248 157
Provision for loan losses 312 203
Foreign currency translation adjustment - -
--------------------------------------- --- ---
Balance at end of period $880 $816
------------------------ ---- ----
Allowance for loan losses as a percentage
of total loans 1.89 % 1.68 %
Net loan charge-offs as a percentage of
average total loans 2.08 1.26
Net credit-related charge-offs as a
percentage of average total loans 2.08 1.26
----------------------------------- ---- ----
2008
----
(in millions) 4th Qtr
------------- -------
Balance at beginning of period $712
Loan charge-offs:
Commercial 66
Real estate construction:
Commercial Real Estate business line (a) 35
Other business lines (b) -
------------------------ ---
Total real estate construction 35
Commercial mortgage:
Commercial Real Estate business line (a) 21
Other business lines (b) 8
------------------------ ---
Total commercial mortgage 29
Residential mortgage 5
Consumer 7
Lease financing 1
International 1
------------- ---
Total loan charge-offs 144
Recoveries on loans previously charged-off:
Commercial 6
Real estate construction 1
Commercial mortgage 2
Residential mortgage -
Consumer 1
Lease financing -
International 1
------------- ---
Total recoveries 11
---------------- ---
Net loan charge-offs 133
Provision for loan losses 192
Foreign currency translation adjustment (1)
--------------------------------------- ---
Balance at end of period $770
------------------------ ----
Allowance for loan losses as a percentage of
total loans 1.52 %
Net loan charge-offs as a percentage of
average total loans 1.04
Net credit-related charge-offs as a
percentage of average total loans 1.04
----------------------------------- ----
(a) Primarily charge-offs of loans to real estate investors and
developers.
(b) Primarily charge-offs of loans secured by owner-occupied real estate.
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED
COMMITMENTS (unaudited)
Comerica Incorporated and Subsidiaries
2009
----
(in millions) 4th Qtr 3rd Qtr
------------- ------- -------
Balance at beginning of period $35 $33
Less: Charge-offs on lending-related
commitments (a) - -
Add: Provision for credit losses on lending-
related commitments 2 2
-------------------------------------------- --- ---
Balance at end of period $37 $35
------------------------ --- ---
Unfunded lending-related commitments sold $- $1
----------------------------------------- --- ---
2009
----
(in millions) 2nd Qtr 1st Qtr
------------- ------- -------
Balance at beginning of period $37 $38
Less: Charge-offs on lending-related
commitments (a) - -
Add: Provision for credit losses on lending-
related commitments (4) (1)
-------------------------------------------- --- ---
Balance at end of period $33 $37
------------------------ --- ---
Unfunded lending-related commitments sold $- $-
----------------------------------------- --- ---
2008
----
(in millions) 4th Qtr
------------- -------
Balance at beginning of period $40
Less: Charge-offs on lending-related
commitments (a) -
Add: Provision for credit losses on lending-
related commitments (2)
-------------------------------------------- ---
Balance at end of period $38
------------------------ ---
Unfunded lending-related commitments sold $-
----------------------------------------- ---
(a) Charge-offs result from the sale of unfunded lending-related
commitments.
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2009
----
(in millions) 4th Qtr 3rd Qtr
------------- ------- -------
SUMMARY OF NONPERFORMING ASSETS AND
PAST DUE LOANS
Nonaccrual loans:
Commercial $238 $290
Real estate construction:
Commercial Real Estate business line
(a) 507 542
Other business lines (b) 4 4
------------------------ --- ---
Total real estate construction 511 546
Commercial mortgage:
Commercial Real Estate business line
(a) 127 137
Other business lines (b) 192 161
------------------------ --- ---
Total commercial mortgage 319 298
Residential mortgage 48 27
Consumer 12 8
Lease financing 13 18
International 22 7
------------- --- ---
Total nonaccrual loans 1,163 1,194
Reduced-rate loans 18 2
------------------ --- ---
Total nonperforming loans 1,181 1,196
Foreclosed property 111 109
------------------- --- ---
Total nonperforming assets $1,292 $1,305
-------------------------- ------ ------
Nonperforming loans as a percentage of
total loans 2.80 % 2.74 %
Nonperforming assets as a percentage
of total loans
and foreclosed property 3.06 2.99
Allowance for loan losses as a
percentage
of total nonperforming loans 83 80
Loans past due 90 days or more and
still accruing $101 $161
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of
period $1,194 $1,130
Loans transferred to nonaccrual (c) 266 361
Nonaccrual business loan gross charge-
offs (d) (218) (226)
Loans transferred to accrual status
(c) - (4)
Nonaccrual business loans sold (e) (10) (41)
Payments/Other (f) (69) (26)
------------------ --- ---
Nonaccrual loans at end of period $1,163 $1,194
--------------------------------- ------ ------
(a) Primarily loans to real estate
investors and developers.
(b) Primarily loans secured by owner-
occupied real estate.
(c) Based on an analysis of nonaccrual
loans with book
balances greater than $2 million.
(d) Analysis of gross loan charge-
offs:
Nonaccrual business loans $218 $226
Performing watch list loans - 1
Consumer and residential mortgage
loans 15 18
--- ---
Total gross loan charge-offs $233 $245
---- ----
(e) Analysis of loans sold:
Nonaccrual business loans $10 $41
Performing watch list loans 1 24
--- ---
Total loans sold $11 $65
--- ---
2009
----
(in millions) 2nd Qtr 1st Qtr
------------- ------- -------
SUMMARY OF NONPERFORMING ASSETS AND
PAST DUE LOANS
Nonaccrual loans:
Commercial $327 $258
Real estate construction:
Commercial Real Estate business line
(a) 472 426
Other business lines (b) 4 5
------------------------ --- ---
Total real estate construction 476 431
Commercial mortgage:
Commercial Real Estate business line
(a) 134 131
Other business lines (b) 175 138
------------------------ --- ---
Total commercial mortgage 309 269
Residential mortgage 7 8
Consumer 7 8
Lease financing - 2
International 4 6
------------- --- ---
Total nonaccrual loans 1,130 982
Reduced-rate loans - -
------------------ --- ---
Total nonperforming loans 1,130 982
Foreclosed property 100 91
------------------- --- ---
Total nonperforming assets $1,230 $1,073
-------------------------- ------ ------
Nonperforming loans as a percentage of
total loans 2.43 % 2.02 %
Nonperforming assets as a percentage
of total loans
and foreclosed property 2.64 2.20
Allowance for loan losses as a
percentage
of total nonperforming loans 78 83
Loans past due 90 days or more and
still accruing $210 $207
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of
period $982 $917
Loans transferred to nonaccrual (c) 419 241
Nonaccrual business loan gross charge-
offs (d) (242) (153)
Loans transferred to accrual status
(c) - (4)
Nonaccrual business loans sold (e) (10) (3)
Payments/Other (f) (19) (16)
------------------ --- ---
Nonaccrual loans at end of period $1,130 $982
--------------------------------- ------ ----
(a) Primarily loans to real estate
investors and developers.
(b) Primarily loans secured by owner-
occupied real estate.
(c) Based on an analysis of nonaccrual
loans with book
balances greater than $2 million.
(d) Analysis of gross loan charge-
offs:
Nonaccrual business loans $242 $153
Performing watch list loans 1 -
Consumer and residential mortgage
loans 14 8
--- ---
Total gross loan charge-offs $257 $161
---- ----
(e) Analysis of loans sold:
Nonaccrual business loans $10 $3
Performing watch list loans 6 -
--- ---
Total loans sold $16 $3
--- ---
2008
----
(in millions) 4th Qtr
------------- -------
SUMMARY OF NONPERFORMING ASSETS AND
PAST DUE LOANS
Nonaccrual loans:
Commercial $205
Real estate construction:
Commercial Real Estate business line
(a) 429
Other business lines (b) 5
------------------------ ---
Total real estate construction 434
Commercial mortgage:
Commercial Real Estate business line
(a) 132
Other business lines (b) 130
------------------------ ---
Total commercial mortgage 262
Residential mortgage 7
Consumer 6
Lease financing 1
International 2
------------- ---
Total nonaccrual loans 917
Reduced-rate loans -
------------------ ---
Total nonperforming loans 917
Foreclosed property 66
------------------- ---
Total nonperforming assets $983
-------------------------- ----
Nonperforming loans as a percentage of
total loans 1.82 %
Nonperforming assets as a percentage
of total loans
and foreclosed property 1.94
Allowance for loan losses as a
percentage
of total nonperforming loans 84
Loans past due 90 days or more and
still accruing $125
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of
period $863
Loans transferred to nonaccrual (c) 258
Nonaccrual business loan gross charge-
offs (d) (132)
Loans transferred to accrual status
(c) (11)
Nonaccrual business loans sold (e) (14)
Payments/Other (f) (47)
------------------ ---
Nonaccrual loans at end of period $917
--------------------------------- ----
(a) Primarily loans to real estate
investors and developers.
(b) Primarily loans secured by owner-
occupied real estate.
(c) Based on an analysis of nonaccrual
loans with book
balances greater than $2 million.
(d) Analysis of gross loan charge-
offs:
Nonaccrual business loans $132
Performing watch list loans -
Consumer and residential mortgage
loans 12
---
Total gross loan charge-offs $144
----
(e) Analysis of loans sold:
Nonaccrual business loans $14
Performing watch list loans -
---
Total loans sold $14
---
(f) Includes net changes related to nonaccrual loans with balances
less than $2 million, payments on non-accrual loans with book
balances greater than $2 million
and transfers of nonaccrual loans to foreclosed property. Excludes
business loan gross charge-offs and business nonaccrual loans sold.
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)
Comerica Incorporated and Subsidiaries
Years Ended
-----------
December 31, 2009
-----------------
Average Average
(dollar amounts in millions) Balance Interest Rate
---------------------------- ------- -------- ----
Commercial loans (a) (b) $24,534 $890 3.63 %
Real estate construction loans 4,140 121 2.92
Commercial mortgage loans 10,415 437 4.20
Residential mortgage loans 1,756 97 5.53
Consumer loans 2,553 94 3.68
Lease financing (c) 1,231 40 3.25
International loans 1,533 58 3.79
Business loan swap income - 34 -
--- --- ---
Total loans (b) 46,162 1,771 3.84
Auction-rate securities available-
for-sale 1,010 15 1.47
Other investment securities available-
for-sale 8,378 318 3.88
----- --- ----
Total investment securities available-
for-sale 9,388 333 3.61
Federal funds sold and securities
purchased
under agreements to resell 18 - 0.32
Interest-bearing deposits with banks
(d) 2,440 6 0.25
Other short-term investments 154 3 1.74
--- --- ----
Total earning assets 58,162 2,113 3.64
Cash and due from banks 883
Allowance for loan losses (947)
Accrued income and other assets 4,711
-----
Total assets $62,809
-------
Money market and NOW deposits (a) $12,965 63 0.49
Savings deposits 1,339 2 0.11
Customer certificates of deposit 8,131 183 2.26
----- --- ----
Total interest-bearing core deposits 22,435 248 1.11
Other time deposits 4,103 121 2.96
Foreign office time deposits 653 2 0.29
--- --- ----
Total interest-bearing deposits 27,191 371 1.37
Short-term borrowings 1,000 2 0.24
Medium- and long-term debt 13,334 165 1.23
------ --- ----
Total interest-bearing sources 41,525 538 1.29
--- ----
Noninterest-bearing deposits (a) 12,900
Accrued expenses and other liabilities 1,285
Total shareholders' equity 7,099
-----
Total liabilities and shareholders'
equity $62,809
-------
Net interest income/rate spread (FTE) $1,575 2.35
------
FTE adjustment $8
---
Impact of net noninterest-bearing
sources of funds 0.37
---------------- ----
Net interest margin (as a percentage
of average earning assets) (FTE) (b)
(c) (d) 2.72 %
------------------------------------ ----
N/M - Not meaningful
(a) FSD balances included above:
Loans (primarily low-rate) $210 $3 1.65 %
Interest-bearing deposits 448 2 0.54
Noninterest-bearing deposits 1,306
(b) Impact of FSD loans (primarily low-
rate) on the following:
Commercial loans (0.02) %
Total loans (0.01)
Net interest margin (FTE) (assuming
loans were
funded by noninterest-bearing
deposits) -
Years Ended
-----------
December 31, 2008
-----------------
Average Average
(dollar amounts in millions) Balance Interest Rate
---------------------------- ------- -------- ----
Commercial loans (a) (b) $28,870 $1,468 5.08 %
Real estate construction loans 4,715 231 4.89
Commercial mortgage loans 10,411 580 5.57
Residential mortgage loans 1,886 112 5.94
Consumer loans 2,559 130 5.08
Lease financing (c) 1,356 8 0.59
International loans 1,968 101 5.13
Business loan swap income - 24 -
--- --- ---
Total loans (b) 51,765 2,654 5.13
Auction-rate securities available-
for-sale 193 6 2.95
Other investment securities available-
for-sale 7,908 384 4.88
----- --- ----
Total investment securities available-
for-sale 8,101 390 4.83
Federal funds sold and securities
purchased
under agreements to resell 93 2 2.08
Interest-bearing deposits with banks
(d) 219 1 0.61
Other short-term investments 244 10 3.98
--- --- ----
Total earning assets 60,422 3,057 5.06
Cash and due from banks 1,185
Allowance for loan losses (691)
Accrued income and other assets 4,269
-----
Total assets $65,185
-------
Money market and NOW deposits (a) $14,245 207 1.45
Savings deposits 1,344 6 0.45
Customer certificates of deposit 8,150 263 3.23
----- --- ----
Total interest-bearing core deposits 23,739 476 2.01
Other time deposits 6,715 232 3.45
Foreign office time deposits 926 26 2.77
--- --- ----
Total interest-bearing deposits 31,380 734 2.34
Short-term borrowings 3,763 87 2.30
Medium- and long-term debt 12,457 415 3.33
------ --- ----
Total interest-bearing sources 47,600 1,236 2.59
----- ----
Noninterest-bearing deposits (a) 10,623
Accrued expenses and other liabilities 1,520
Total shareholders' equity 5,442
-----
Total liabilities and shareholders'
equity $65,185
-------
Net interest income/rate spread (FTE) $1,821 2.47
------
FTE adjustment $6
---
Impact of net noninterest-bearing
sources of funds 0.55
---------------- ----
Net interest margin (as a percentage
of average earning assets) (FTE) (b)
(c) (d) 3.02 %
------------------------------------ ----
N/M - Not meaningful
(a) FSD balances included above:
Loans (primarily low-rate) $498 $7 1.40 %
Interest-bearing deposits 957 19 1.99
Noninterest-bearing deposits 1,643
(b) Impact of FSD loans (primarily low-
rate) on the following:
Commercial loans (0.07) %
Total loans (0.03)
Net interest margin (FTE) (assuming
loans were
funded by noninterest-bearing
deposits) (0.01)
(c) 2008 net interest income declined $38 million and the net
interest margin declined six basis points due to tax-related non-
cash lease income charges. Excluding these charges,
the net interest margin would have been 3.08%.
(d) Excess liquidity, represented by average balances deposited with
the Federal Reserve Bank, reduced the net interest margin by 11
basis points and one basis point in 2009 and
2008, respectively. Excluding excess liquidity, the net interest
margin would have been 2.83% in 2009 and 3.03% in 2008.
Photo: http://www.newscom.com/cgi-bin/prnh/20010807/CMALOGOSOURCE: Comerica Incorporated
Web site: http://www.comerica.com/
