COMERICA REPORTS FIRST QUARTER 2012 RESULTS
Net Income of $130 Million Up 36 Percent From Fourth Quarter 2011
Average Total Loans Increased - Driven by a $1.2 Billion, 5 Percent Increase in Commercial Loans
Customer-Driven Fee Income Increased 6 Percent
DALLAS/April 17, 2012 -- Comerica Incorporated (NYSE: CMA) today reported first quarter 2012 net income of $130 million, an increase of $34 million compared to $96 million for the fourth quarter 2011.
(dollar amounts in millions, except per share data) | 1st Qtr '12 | 4th Qtr '11 | 1st Qtr '11 | ||||||||
Net interest income | $ | 443 | $ | 444 | $ | 395 | |||||
Provision for loan losses | 23 | 19 | 49 | ||||||||
Noninterest income | 206 | 182 | 207 | ||||||||
Noninterest expenses | 448 | 478 | (a) | 415 | |||||||
Provision for income taxes | 48 | 33 | 35 | ||||||||
Net income | 130 | 96 | 103 | ||||||||
Net income attributable to common shares | 129 | 95 | 102 | ||||||||
Diluted income per common share | 0.66 | 0.48 | (a) | 0.57 | |||||||
Average diluted shares (in millions) | 196 | 197 | 178 | ||||||||
Tier 1 common capital ratio (c) | 10.33 | % | (b) | 10.37 | % | 10.35 | % | ||||
Tangible common equity ratio (c) | 10.21 | 10.27 | 10.43 | ||||||||
(a) | Included restructuring expenses of $37 million ($23 million, after tax; $0.12 per diluted share) in fourth quarter 2011, associated with the acquisition of Sterling on July 28, 2011. |
(b) | March 31, 2012 ratio is estimated. |
(c) | See Reconciliation of Non-GAAP Financial Measures. |
"We were pleased by the continued growth in average total loans in the first quarter, driven by a $1.2 billion, or 5 percent, increase in average commercial loans," said Ralph W. Babb Jr., chairman and chief executive officer. "The increase in average commercial loans, when compared to the fourth quarter of 2011, was broad-based, across a majority of business lines and all major markets.
"Noninterest income increased $24 million, driven by a $10 million, or 6 percent, increase in customer-driven fees, offsetting the headwinds of regulatory reform.
"We continue to approach capital management from a position of strength," said Babb. "As we announced on March 14, 2012, the Federal Reserve did not object to our capital plan and the capital distributions contemplated in the plan. The capital plan, which was approved by our board of directors, provides for up to $375 million in equity repurchases from the first quarter 2012 through the first quarter 2013. We had $33 million in equity repurchases under the share repurchase program in the first quarter 2012. A dividend proposal that would increase the quarterly dividend 50 percent, from 10 cents per share to 15 cents per share, will be considered by our board at its next meeting on April 24, 2012."
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COMERICA REPORTS FIRST QUARTER 2012 NET INCOME OF $130 MILLION - 2
First Quarter 2012 Highlights Compared to Fourth Quarter 2011
• | Net income of $130 million, or $0.66 per fully diluted share, increased 36 percent compared to fourth quarter 2011. |
• | Average total loans increased $815 million, or 2 percent, primarily reflecting an increase of $1.2 billion, or 5 percent, in commercial loans, partially offset by a decrease of $352 million, or 3 percent, in commercial real estate loans (commercial mortgage and real estate construction loans). The increase in commercial loans was broad-based, primarily driven by increases in National Dealer Services, Energy, Global Corporate Banking, Middle Market Banking, and Technology and Life Sciences. |
• | Period-end loans increased $333 million, or 1 percent, from December 31, 2011 to March 31, 2012, primarily reflecting an increase of $644 million, or 3 percent, in commercial loans, partially offset by a $276 million, or 2 percent, decrease in commercial real estate loans. The increase in period-end commercial loans was primarily driven by increases in National Dealer Services, Middle Market Banking, Global Corporate Banking and Energy, partially offset by decreases in Mortgage Banker Finance and Small Business Banking. |
• | Average deposits increased $532 million, or 1 percent, primarily reflecting an increase of $461 million in noninterest-bearing deposits. Period end deposits increased $1.5 billion from December 31, 2011 to a record $49.3 billion at March 31, 2012, while funding costs continued to decline. The increase in average deposits primarily reflected increases in Global Corporate Banking, the Financial Services Division, Technology and Life Sciences, and Private Banking, partially offset by decreases in Small Business Banking and Energy. |
• | Credit quality continued to improve in the first quarter 2012. Net credit-related charge-offs of $45 million decreased for the eleventh consecutive quarter. The provision for loan losses was $23 million in the first quarter 2012, compared to $19 million in the fourth quarter 2011. |
• | Noninterest income increased to $206 million in the first quarter 2012, compared to $182 million for the fourth quarter 2011. The $24 million increase in large part resulted from increases in customer-driven fee income categories. |
• | Noninterest expenses decreased $30 million to $448 million in the first quarter 2012, compared to the fourth quarter 2011. The decrease was primarily due to a $37 million decrease in merger and restructuring charges related to the Sterling acquisition. |
• | As previously announced, the Federal Reserve completed its review of Comerica's 2012 Capital Plan in the first quarter 2012 and did not object to the capital distributions contemplated in the plan, including up to $375 million of equity repurchases in the five-quarter period ending March 31, 2013 and a 50 percent increase in the quarterly dividend. Comerica repurchased 1.1 million shares of common stock under the share repurchase program in the first quarter 2012. |
Net Interest Income
(dollar amounts in millions) | 1st Qtr '12 | 4th Qtr '11 | 1st Qtr '11 | ||||||||
Net interest income | $ | 443 | $ | 444 | $ | 395 | |||||
Net interest margin | 3.19 | % | 3.19 | % | 3.25 | % | |||||
Selected average balances: | |||||||||||
Total earning assets | $ | 56,186 | $ | 55,676 | $ | 49,347 | |||||
Total investment securities | 9,889 | 9,781 | 7,311 | ||||||||
Total loans | 42,269 | 41,454 | 39,551 | ||||||||
Total deposits | 48,311 | 47,779 | 40,598 | ||||||||
Total noninterest-bearing deposits | 19,637 | 19,176 | 15,459 | ||||||||
• | Net interest income of $443 million in the first quarter 2012 decreased $1 million compared to the fourth quarter 2011, as the benefit from a $510 million increase in average earning assets ($7 million) and lower funding costs ($2 million) was offset by lower loan yields ($5 million) and one less day in the quarter ($5 million). The lower loan yields reflected a shift in the average loan portfolio mix, largely due to the decrease in average commercial real estate loans and the increase in average commercial loans. Accretion of the purchase discount on the acquired Sterling loan portfolio was $25 million in the first quarter 2012, compared to $26 million in the fourth quarter 2011. For the remainder of 2012, $35 million |
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COMERICA REPORTS FIRST QUARTER 2012 NET INCOME OF $130 MILLION - 3
to $45 million of accretion is expected to be recognized.
• | Average earning assets increased $510 million in the first quarter 2012 compared to the fourth quarter 2011, primarily reflecting increases of $815 million in average loans and $108 million in average investment securities available-for-sale, partially offset by a $417 million decrease in average Federal Reserve Bank deposits. |
• | Average deposits increased $532 million in the first quarter 2012, compared to the fourth quarter 2011, primarily due to a $461 million increase in average noninterest-bearing deposits. |
Noninterest Income
Noninterest income was $206 million for the first quarter 2012, compared to $182 million for the fourth quarter 2011. The $24 million increase primarily resulted from a $10 million, or 6 percent, increase in customer-driven fee income and a $9 million increase in net securities gains. The increase in customer-driven fee income included increases in service charges on deposit accounts ($4 million), investment banking fees ($3 million), fiduciary income ($2 million) and commercial lending fees ($2 million). The increase in net securities gains reflected an increase of $4 million in gains from redemptions of auction-rate securities in the first quarter 2012, when compared to fourth quarter 2011, and $5 million in charges in the fourth quarter 2011 related to a derivative contract tied to the conversion rate of Visa Class B shares.
Noninterest Expenses
Noninterest expenses totaled $448 million in the first quarter 2012, a decrease of $30 million compared to $478 million in the fourth quarter 2011. The decrease in noninterest expenses was primarily due to decreases in merger and restructuring charges ($37 million), net occupancy expense ($6 million), and salaries expense ($4 million), partially offset by increases in employee benefits expense ($8 million), primarily due to an increase in pension expense, and litigation and legal expenses ($5 million), included in other noninterest expenses. The decrease in net occupancy expense in part reflected savings related to increased efficiency in space utilization. Restructuring charges of approximately $40 million are expected to be incurred for the remainder of 2012, with $5 million to $10 million expected in second quarter 2012.
Credit Quality
(dollar amounts in millions) | 1st Qtr '12 | 4th Qtr '11 | 1st Qtr '11 | ||||||||
Net credit-related charge-offs | $ | 45 | $ | 60 | $ | 101 | |||||
Net credit-related charge-offs/Average total loans | 0.43 | % | 0.57 | % | 1.03 | % | |||||
Provision for loan losses | $ | 23 | $ | 19 | $ | 49 | |||||
Provision for credit losses on lending-related commitments | (1 | ) | (1 | ) | (3 | ) | |||||
Total provision for credit losses | 22 | 18 | 46 | ||||||||
Nonperforming loans (a) | 856 | 887 | 1,030 | ||||||||
Nonperforming assets (NPAs) (a) | 923 | 981 | 1,104 | ||||||||
NPAs/Total loans and foreclosed property | 2.14 | % | 2.29 | % | 2.81 | % | |||||
Loans past due 90 days or more and still accruing | $ | 50 | $ | 58 | $ | 72 | |||||
Allowance for loan losses | 704 | 726 | 849 | ||||||||
Allowance for credit losses on lending-related commitments (b) | 25 | 26 | 32 | ||||||||
Total allowance for credit losses | 729 | 752 | 881 | ||||||||
Allowance for loan losses/Total loans (c) | 1.64 | % | 1.70 | % | 2.17 | % | |||||
Allowance for loan losses/Nonperforming loans | 82 | 82 | 82 | ||||||||
(a) | Excludes loans acquired with credit impairment. |
(b) | Included in "Accrued expenses and other liabilities" on the consolidated balance sheets. |
(c) | Reflects the impact of acquired loans, which were initially recorded at fair value, with no related allowance for loan losses. |
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COMERICA REPORTS FIRST QUARTER 2012 NET INCOME OF $130 MILLION - 4
"Credit quality continued to improve in the first quarter," said Babb. "Net charge-offs, which decreased $15 million to $45 million in the first quarter, are at the lowest level since the third quarter of 2007. The provision for loan losses was relatively stable. Our expectation is that we will continue to see the provision and net-charge offs at these levels for the remainder of the year assuming the current level of economic growth is sustained."
• | Net credit-related charge-offs decreased $15 million to $45 million in the first quarter 2012, from $60 million in the fourth quarter 2011. The decrease in net credit-related charge-offs was broad-based, spread across many business lines. |
• | The provision for loan losses was $23 million in the first quarter 2012, compared to $19 million in the fourth quarter 2011. The change in the provision for loan losses reflects increased loan volumes. |
• | Internal watch list loans continued the downward trend, declining $261 million in the first quarter 2012, to $4.2 billion at March 31, 2012. Nonperforming assets decreased $58 million to $923 million at March 31, 2012. |
• | During the first quarter 2012, $69 million of borrower relationships over $2 million were transferred to nonaccrual status, a decrease of $30 million from the fourth quarter 2011. |
• | The allowance for loan losses to total loans ratio was 1.64 percent and 1.70 percent at March 31, 2012 and December 31, 2011, respectively. |
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $62.6 billion and $7.0 billion, respectively, at March 31, 2012, compared to $61.0 billion and $6.9 billion, respectively, at December 31, 2011. There were approximately 197 million common shares outstanding at March 31, 2012. Comerica repurchased $33 million of common stock (1.1 million shares) under the share repurchase program during the first quarter 2012.
The Federal Reserve completed its review of Comerica's 2012 Capital Plan in March 2012 and did not object to the capital distributions contemplated in the plan. The capital plan provides for up to $375 million in equity repurchases for the five-quarter period ending March 31, 2013. The capital plan, which was approved by Comerica's Board of Directors, further contemplates a 50 percent increase in Comerica's quarterly dividend, from 10 cents per share to 15 cents per share. The dividend proposal will be considered by the Board at its April 24, 2012 meeting. In addition, the capital plan includes the authority to redeem the remaining $25 million of trust preferred securities outstanding as of March 31, 2012.
Comerica's tangible common equity ratio was 10.21% at March 31, 2012, a decrease of 6 basis points from December 31, 2011. The estimated Tier 1 common capital ratio decreased 4 basis points, to 10.33% at March 31, 2012, from December 31, 2011.
Full-Year 2012 Outlook Compared to Full-Year 2011
For 2012, management expects the following, assuming a continuation of the current economic environment:
• | Average loans increasing moderately. |
• | Net interest income increasing moderately. |
• | Net credit-related charge-offs and provision for credit losses declining. |
• | Noninterest income relatively stable. |
• | Noninterest expenses relatively stable. |
• | Effective tax rate of approximately 27 percent. |
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COMERICA REPORTS FIRST QUARTER 2012 NET INCOME OF $130 MILLION - 5
Business Segments
Comerica's operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank and Wealth Management. The Finance Division is also reported as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at March 31, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2012 results compared to fourth quarter 2011.
The following table presents net income (loss) by business segment.
(dollar amounts in millions) | 1st Qtr '12 | 4th Qtr '11 | 1st Qtr '11 | ||||||||||||||
Business Bank | $ | 206 | 89 | % | $ | 201 | 94 | % | $ | 167 | 93 | % | |||||
Retail Bank | 14 | 6 | 10 | 4 | (2 | ) | (1 | ) | |||||||||
Wealth Management | 11 | 5 | 5 | 2 | 14 | 8 | |||||||||||
231 | 100 | % | 216 | 100 | % | 179 | 100 | % | |||||||||
Finance | (92 | ) | (94 | ) | (75 | ) | |||||||||||
Other (a) | (9 | ) | (26 | ) | (1 | ) | |||||||||||
Total | 130 | $ | 96 | $ | 103 | ||||||||||||
(a) Includes discontinued operations and items not directly associated with the three major business segments or the Finance Division.
Business Bank
(dollar amounts in millions) | 1st Qtr '12 | 4th Qtr '11 | 1st Qtr '11 | ||||||||
Net interest income (FTE) | $ | 379 | $ | 383 | $ | 341 | |||||
Provision for loan losses | 1 | (4 | ) | 18 | |||||||
Noninterest income | 81 | 73 | 77 | ||||||||
Noninterest expenses | 159 | 161 | 160 | ||||||||
Net income | 206 | 201 | 167 | ||||||||
Net credit-related charge-offs | 28 | 32 | 73 | ||||||||
Selected average balances: | |||||||||||
Assets | 33,184 | 32,151 | 30,092 | ||||||||
Loans | 32,240 | 31,257 | 29,609 | ||||||||
Deposits | 23,997 | 23,296 | 20,084 | ||||||||
• | Average loans increased $983 million, primarily due to increases in National Dealer Services, Energy, Global Corporate Banking, Technology and Life Sciences, and Middle Market, partially offset by a decline in Commercial Real Estate. |
• | Average deposits increased $701 million, primarily due to increases in the Financial Services Division, Global Corporate Banking, and Technology and Life Sciences, partially offset by a decline in Energy. |
• | Net interest income decreased $4 million, primarily due to one less day in the quarter. The benefit from increases in average loan balances and lower deposit rates was offset by an increase in net funds transfer pricing (FTP) funding costs and lower loan yields. |
• | The provision for loan losses increased $5 million, primarily reflecting increases in Middle Market and Commercial Real Estate, partially offset by a decrease in Technology and Life Sciences. |
• | Noninterest income increased $8 million, primarily reflecting increases in service charges on deposit accounts, commercial lending fees, warrant income and customer derivative income. |
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COMERICA REPORTS FIRST QUARTER 2012 NET INCOME OF $130 MILLION - 6
Retail Bank
(dollar amounts in millions) | 1st Qtr '12 | 4th Qtr '11 | 1st Qtr '11 | ||||||||
Net interest income (FTE) | $ | 167 | $ | 176 | $ | 139 | |||||
Provision for loan losses | 4 | 15 | 23 | ||||||||
Noninterest income | 42 | 35 | 42 | ||||||||
Noninterest expenses | 184 | 182 | 162 | ||||||||
Net income (loss) | 14 | 10 | (2 | ) | |||||||
Net credit-related charge-offs | 12 | 16 | 23 | ||||||||
Selected average balances: | |||||||||||
Assets | 6,173 | 6,250 | 5,558 | ||||||||
Loans | 5,462 | 5,571 | 5,106 | ||||||||
Deposits | 20,373 | 20,715 | 17,360 | ||||||||
• | Average loans declined $109 million, primarily due to decreases in Personal Banking and Small Business Banking. |
• | Average deposits decreased $342 million, primarily due to a decrease in Small Business Banking. |
• | Net interest income decreased $9 million, primarily due to a decrease in FTP funding credits, one less day in the quarter and lower loan yields, partially offset by lower deposit rates. |
• | The provision for loan losses decreased $11 million, reflecting declines in both Personal Banking and Small Business Banking. |
• | Noninterest income increased $7 million, primarily due to a fourth quarter 2011 charge of $5 million related to a derivative contract tied to the conversion rate of Visa Class B shares. |
Wealth Management
(dollar amounts in millions) | 1st Qtr '12 | 4th Qtr '11 | 1st Qtr '11 | ||||||||
Net interest income (FTE) | $ | 47 | $ | 46 | $ | 44 | |||||
Provision for loan losses | 14 | 10 | 8 | ||||||||
Noninterest income | 65 | 55 | 64 | ||||||||
Noninterest expenses | 81 | 83 | 78 | ||||||||
Net income | 11 | 5 | 14 | ||||||||
Net credit-related charge-offs | 5 | 12 | 5 | ||||||||
Selected average balances: | |||||||||||
Assets | 4,636 | 4,672 | 4,809 | ||||||||
Loans | 4,565 | 4,618 | 4,807 | ||||||||
Deposits | 3,611 | 3,400 | 2,800 | ||||||||
• | Average loans decreased $53 million. |
• | Average deposits increased $211 million, primarily reflecting an increase in Private Banking. |
• | Net interest income increased $1 million, primarily due to an increase in average deposit balances. |
• | The provision for loan losses increased $4 million, primarily due to an increase in the Florida market. |
• | Noninterest income increased $10 million, primarily due to increases in gains on the redemption of auction-rate securities, investment banking fees and fiduciary income. |
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COMERICA REPORTS FIRST QUARTER 2012 NET INCOME OF $130 MILLION - 7
Geographic Market Segments
Comerica also provides market segment results for four primary geographic markets: Midwest, Western, Texas and Florida. In addition to the four primary geographic markets, Other Markets and International are also reported as market segments. The financial results below are based on methodologies in effect at March 31, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2012 results compared to fourth quarter 2011.
The following table presents net income (loss) by market segment.
(dollar amounts in millions) | 1st Qtr '12 | 4th Qtr '11 | 1st Qtr '11 | ||||||||||||||
Midwest | $ | 68 | 30 | % | $ | 53 | 25 | % | $ | 53 | 29 | % | |||||
Western | 65 | 28 | 65 | 30 | 51 | 28 | |||||||||||
Texas | 49 | 21 | 55 | 26 | 29 | 16 | |||||||||||
Florida | (1 | ) | — | (1 | ) | (1 | ) | (4 | ) | (2 | ) | ||||||
Other Markets | 38 | 16 | 32 | 15 | 38 | 22 | |||||||||||
International | 12 | 5 | 12 | 5 | 12 | 7 | |||||||||||
231 | 100 | % | 216 | 100 | % | 179 | 100 | % | |||||||||
Finance & Other Businesses (a) | (101 | ) | (120 | ) | (76 | ) | |||||||||||
Total | $ | 130 | $ | 96 | $ | 103 | |||||||||||
(a) Includes discontinued operations and items not directly associated with the geographic markets.
Midwest Market
(dollar amounts in millions) | 1st Qtr '12 | 4th Qtr '11 | 1st Qtr '11 | ||||||||
Net interest income (FTE) | $ | 198 | $ | 202 | $ | 203 | |||||
Provision for loan losses | 10 | 20 | 34 | ||||||||
Noninterest income | 98 | 85 | 100 | ||||||||
Noninterest expenses | 183 | 185 | 188 | ||||||||
Net income | 68 | 53 | 53 | ||||||||
Net credit-related charge-offs | 18 | 32 | 46 | ||||||||
Selected average balances: | |||||||||||
Assets | 14,095 | 13,976 | 14,303 | ||||||||
Loans | 13,829 | 13,725 | 14,104 | ||||||||
Deposits | 19,415 | 19,076 | 18,230 | ||||||||
• | Average loans increased $104 million, primarily due to an increase in National Dealer Services. |
• | Average deposits increased $339 million, primarily due to increases in Personal Banking and the Financial Services Division. |
• | Net interest income decreased $4 million, primarily due one less day in the quarter, lower loan yields, and lower net FTP funding credits, partially offset by an increase in average loan balances and lower deposit rates. |
• | The provision for loan losses decreased $10 million, primarily reflecting decreases in Small Business Banking, Commercial Real Estate, Personal Banking and Global Corporate Banking, partially offset by an increase in Middle Market. |
• | Noninterest income increased $13 million, primarily due to fourth quarter 2011 charges of $5 million related to a derivative contract tied to the conversion rate of Visa Class B shares and increases in investment banking fees, commercial lending fees, service charges on deposit accounts and fiduciary income. |
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COMERICA REPORTS FIRST QUARTER 2012 NET INCOME OF $130 MILLION - 8
Western Market
(dollar amounts in millions) | 1st Qtr '12 | 4th Qtr '11 | 1st Qtr '11 | ||||||||
Net interest income (FTE) | $ | 171 | $ | 170 | $ | 164 | |||||
Provision for loan losses | (7 | ) | (12 | ) | 11 | ||||||
Noninterest income | 33 | 33 | 37 | ||||||||
Noninterest expenses | 107 | 109 | 109 | ||||||||
Net income | 65 | 65 | 51 | ||||||||
Net credit-related charge-offs | 11 | 5 | 26 | ||||||||
Selected average balances: | |||||||||||
Assets | 12,623 | 12,266 | 12,590 | ||||||||
Loans | 12,383 | 12,026 | 12,383 | ||||||||
Deposits | 13,897 | 13,671 | 12,235 | ||||||||
• | Average loans increased $357 million, primarily due to increases in National Dealer Services and Technology and Life Sciences. |
• | Average deposits increased $226 million, primarily due to an increase in the Financial Services Division. |
• | Net interest income increased $1 million, primarily due to an increase in average loan balances, partially offset by lower loan yields and one less day in the quarter. |
• | The provision for loan losses increased $5 million, primarily reflecting increases in Commercial Real Estate, Small Business Banking and Middle Market, partially offset by a decrease in Technology and Life Sciences. |
Texas Market
(dollar amounts in millions) | 1st Qtr '12 | 4th Qtr '11 | 1st Qtr '11 | ||||||||
Net interest income (FTE) | $ | 151 | $ | 158 | $ | 87 | |||||
Provision for loan losses | 14 | 8 | 4 | ||||||||
Noninterest income | 31 | 26 | 23 | ||||||||
Noninterest expenses | 92 | 89 | 61 | ||||||||
Net income | 49 | 55 | 29 | ||||||||
Net credit-related charge-offs | 7 | 4 | 8 | ||||||||
Selected average balances: | |||||||||||
Assets | 10,082 | 9,712 | 7,031 | ||||||||
Loans | 9,295 | 8,952 | 6,824 | ||||||||
Deposits | 10,229 | 10,333 | 5,786 | ||||||||
• | Average loans increased $343 million, led by an increase in Energy, as well as increases in Middle Market and Global Corporate Banking, partially offset by a decrease in Commercial Real Estate. |
• | Average deposits decreased $104 million, primarily reflecting a decrease in Energy. |
• | Net interest income decreased $7 million, primarily due to lower loan yields, an increase in net FTP funding costs, and one less day in the quarter, partially offset by an increase in average loan balances and lower deposit rates. |
• | The provision for loan losses increased $6 million, primarily due to increases in Commercial Real Estate and Middle Market, partially offset by a decrease in Technology and Life Sciences. |
• | Noninterest income increased $5 million, primarily due to increases across numerous categories. |
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COMERICA REPORTS FIRST QUARTER 2012 NET INCOME OF $130 MILLION - 9
Florida Market
(dollar amounts in millions) | 1st Qtr '12 | 4th Qtr '11 | 1st Qtr '11 | ||||||||
Net interest income (FTE) | $ | 10 | $ | 11 | $ | 11 | |||||
Provision for loan losses | 6 | 4 | 8 | ||||||||
Noninterest income | 4 | 4 | 4 | ||||||||
Noninterest expenses | 9 | 13 | 12 | ||||||||
Net income | (1 | ) | (1 | ) | (4 | ) | |||||
Net credit-related charge-offs | 2 | 7 | 8 | ||||||||
Selected average balances: | |||||||||||
Assets | 1,416 | 1,435 | 1,553 | ||||||||
Loans | 1,418 | 1,457 | 1,580 | ||||||||
Deposits | 424 | 435 | 367 | ||||||||
• | Average loans decreased $39 million. |
• | The provision for loan losses increased $2 million, primarily due to an increase in Private Banking, partially offset by a decrease in Commercial Real Estate. |
• | Noninterest expenses decreased $4 million, due to decreases across numerous categories. |
Conference Call and Webcast
Comerica will host a conference call to review first quarter 2012 financial results at 7 a.m. CT Tuesday, April 17, 2012. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 62064995). The call and supplemental financial information can also be accessed via Comerica's "Investor Relations" page at www.comerica.com. A telephone replay will be available approximately two hours following the conference call through April 30, 2012. The conference call replay can be accessed by calling (855) 859-2056 or (404) 537-3406 (event ID No. 62064995). A replay of the Webcast can also be accessed via Comerica's “Investor Relations” page at www.comerica.com.
Comerica Incorporated is a financial services company headquartered in Dallas, Texas, and strategically aligned by three major business segments: The Business Bank, The Retail Bank and Wealth Management. Comerica focuses on relationships and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico.
This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Comerica's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as a reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
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COMERICA REPORTS FIRST QUARTER 2012 NET INCOME OF $130 MILLION - 10
Forward-looking Statements
Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “believes,” “contemplates,” “feels,” “expects,” “estimates,” “seeks,” “strives,” “plans,” “intends,” “outlook,” “forecast,” “position,” “target,” “mission,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “opportunity,” “initiative,” “outcome,” “continue,” “remain,” “maintain,” “on course,” “trend,” “objective,” “looks forward” and variations of such words and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, as they relate to Comerica or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of Comerica's management based on information known to Comerica's management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica's management for future or past operations, products or services, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability. Such statements reflect the view of Comerica's management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Comerica's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in general economic, political or industry conditions; changes in monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets; changes in Comerica's credit rating; the interdependence of financial service companies; changes in regulation or oversight; unfavorable developments concerning credit quality; the acquisition of Sterling Bancshares, Inc., or any future acquisitions; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers; the implementation of Comerica's strategies and business models, including the implementation of revenue enhancements and efficiency improvements; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties, failure of technology infrastructure or information security incidents; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; competitive product and pricing pressures among financial institutions within Comerica's markets; changes in customer behavior; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings; the effectiveness of methods of reducing risk exposures; the effects of terrorist activities and other hostilities; the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; changes in accounting standards and the critical nature of Comerica's accounting policies. Comerica cautions that the foregoing list of factors is not exclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to “Item 1A. Risk Factors” beginning on page 12 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2011. Forward-looking statements speak only as of the date they are made. Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this news release or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Media Contact: | Investor Contacts: |
Wayne J. Mielke | Darlene P. Persons |
(214) 462-4463 | (214) 462-6831 |
Brittany Butler | |
(214) 462-6834 | |
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) | |||||||||
Comerica Incorporated and Subsidiaries | |||||||||
Three Months Ended | |||||||||
March 31, | December 31, | March 31, | |||||||
(in millions, except per share data) | 2012 | 2011 | 2011 | ||||||
PER COMMON SHARE AND COMMON STOCK DATA | |||||||||
Diluted net income | $ | 0.66 | $ | 0.48 | $ | 0.57 | |||
Cash dividends declared | 0.10 | 0.10 | 0.10 | ||||||
Common shareholders' equity (at period end) | 35.44 | 34.80 | 33.25 | ||||||
Tangible common equity (at period end) (a) | 32.06 | 31.42 | 32.37 | ||||||
Average diluted shares (in thousands) | 196,021 | 196,729 | 178,425 | ||||||
KEY RATIOS | |||||||||
Return on average common shareholders' equity | 7.50 | % | 5.51 | % | 7.08 | % | |||
Return on average assets | 0.84 | 0.63 | 0.77 | ||||||
Tier 1 common capital ratio (a) (b) | 10.33 | 10.37 | 10.35 | ||||||
Tier 1 risk-based capital ratio (b) | 10.37 | 10.41 | 10.35 | ||||||
Total risk-based capital ratio (b) | 14.11 | 14.25 | 14.80 | ||||||
Leverage ratio (b) | 10.97 | 10.92 | 11.37 | ||||||
Tangible common equity ratio (a) | 10.21 | 10.27 | 10.43 | ||||||
AVERAGE BALANCES | |||||||||
Commercial loans | $ | 24,736 | $ | 23,515 | $ | 21,496 | |||
Real estate construction loans: | |||||||||
Commercial Real Estate business line (c) | 1,056 | 1,189 | 1,754 | ||||||
Other business lines (d) | 397 | 430 | 425 | ||||||
Total real estate construction loans | 1,453 | 1,619 | 2,179 | ||||||
Commercial mortgage loans: | |||||||||
Commercial Real Estate business line (c) | 2,520 | 2,552 | 1,978 | ||||||
Other business lines (d) | 7,682 | 7,836 | 7,812 | ||||||
Total commercial mortgage loans | 10,202 | 10,388 | 9,790 | ||||||
Lease financing | 897 | 919 | 987 | ||||||
International loans | 1,205 | 1,128 | 1,219 | ||||||
Residential mortgage loans | 1,519 | 1,591 | 1,599 | ||||||
Consumer loans | 2,257 | 2,294 | 2,281 | ||||||
Total loans | 42,269 | 41,454 | 39,551 | ||||||
Earning assets | 56,186 | 55,676 | 49,347 | ||||||
Total assets | 61,613 | 61,045 | 53,775 | ||||||
Noninterest-bearing deposits | 19,637 | 19,176 | 15,459 | ||||||
Interest-bearing deposits | 28,674 | 28,603 | 25,139 | ||||||
Total deposits | 48,311 | 47,779 | 40,598 | ||||||
Common shareholders' equity | 6,939 | 6,947 | 5,835 | ||||||
NET INTEREST INCOME | |||||||||
Net interest income (fully taxable equivalent basis) | $ | 444 | $ | 445 | $ | 396 | |||
Fully taxable equivalent adjustment | 1 | 1 | 1 | ||||||
Net interest margin (fully taxable equivalent basis) | 3.19 | % | 3.19 | % | 3.25 | % | |||
CREDIT QUALITY | |||||||||
Nonaccrual loans | $ | 830 | $ | 860 | $ | 996 | |||
Reduced-rate loans | 26 | 27 | 34 | ||||||
Total nonperforming loans (e) | 856 | 887 | 1,030 | ||||||
Foreclosed property | 67 | 94 | 74 | ||||||
Total nonperforming assets (e) | 923 | 981 | 1,104 | ||||||
Loans past due 90 days or more and still accruing | 50 | 58 | 72 | ||||||
Gross loan charge-offs | 62 | 85 | 123 | ||||||
Loan recoveries | 17 | 25 | 22 | ||||||
Net loan charge-offs | 45 | 60 | 101 | ||||||
Allowance for loan losses | 704 | 726 | 849 | ||||||
Allowance for credit losses on lending-related commitments | 25 | 26 | 32 | ||||||
Total allowance for credit losses | 729 | 752 | 881 | ||||||
Allowance for loan losses as a percentage of total loans (f) | 1.64 | % | 1.70 | % | 2.17 | % | |||
Net loan charge-offs as a percentage of average total loans (g) | 0.43 | 0.57 | 1.03 | ||||||
Nonperforming assets as a percentage of total loans and foreclosed property (e) | 2.14 | 2.29 | 2.81 | ||||||
Allowance for loan losses as a percentage of total nonperforming loans | 82 | 82 | 82 | ||||||
(a) | See Reconciliation of Non-GAAP Financial Measures. |
(b) | March 31, 2012 ratios are estimated. |
(c) | Primarily loans to real estate investors and developers. |
(d) | Primarily loans secured by owner-occupied real estate. |
(e) | Excludes loans acquired with credit-impairment. |
(f) | Reflects the impact of acquired loans, which were initially recorded at fair value with no related allowance for loan losses. |
(g) | Lending-related commitment charge-offs were zero in all periods presented. |
11
CONSOLIDATED BALANCE SHEETS | |||||||||
Comerica Incorporated and Subsidiaries | |||||||||
March 31, | December 31, | March 31, | |||||||
(in millions, except share data) | 2012 | 2011 | 2011 | ||||||
(unaudited) | (unaudited) | ||||||||
ASSETS | |||||||||
Cash and due from banks | $ | 984 | $ | 982 | $ | 875 | |||
Federal funds sold | 10 | — | — | ||||||
Interest-bearing deposits with banks | 2,966 | 2,574 | 3,570 | ||||||
Other short-term investments | 180 | 149 | 154 | ||||||
Investment securities available-for-sale | 10,061 | 10,104 | 7,406 | ||||||
Commercial loans | 25,640 | 24,996 | 21,360 | ||||||
Real estate construction loans | 1,442 | 1,533 | 2,023 | ||||||
Commercial mortgage loans | 10,079 | 10,264 | 9,697 | ||||||
Lease financing | 872 | 905 | 958 | ||||||
International loans | 1,256 | 1,170 | 1,326 | ||||||
Residential mortgage loans | 1,485 | 1,526 | 1,550 | ||||||
Consumer loans | 2,238 | 2,285 | 2,262 | ||||||
Total loans | 43,012 | 42,679 | 39,176 | ||||||
Less allowance for loan losses | (704 | ) | (726 | ) | (849 | ) | |||
Net loans | 42,308 | 41,953 | 38,327 | ||||||
Premises and equipment | 670 | 675 | 637 | ||||||
Accrued income and other assets | 5,414 | 4,571 | 4,048 | ||||||
Total assets | $ | 62,593 | $ | 61,008 | $ | 55,017 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
Noninterest-bearing deposits | $ | 20,741 | $ | 19,764 | $ | 16,357 | |||
Money market and NOW deposits | 20,502 | 20,311 | 17,888 | ||||||
Savings deposits | 1,586 | 1,524 | 1,457 | ||||||
Customer certificates of deposit | 6,145 | 5,808 | 5,672 | ||||||
Foreign office time deposits | 332 | 348 | 499 | ||||||
Total interest-bearing deposits | 28,565 | 27,991 | 25,516 | ||||||
Total deposits | 49,306 | 47,755 | 41,873 | ||||||
Short-term borrowings | 82 | 70 | 61 | ||||||
Accrued expenses and other liabilities | 1,301 | 1,371 | 1,090 | ||||||
Medium- and long-term debt | 4,919 | 4,944 | 6,116 | ||||||
Total liabilities | 55,608 | 54,140 | 49,140 | ||||||
Common stock - $5 par value: | |||||||||
Authorized - 325,000,000 shares | |||||||||
Issued - 228,164,824 shares at 3/31/12 and 12/31/11 | |||||||||
and 203,878,110 shares at 3/31/11 | 1,141 | 1,141 | 1,019 | ||||||
Capital surplus | 2,154 | 2,170 | 1,464 | ||||||
Accumulated other comprehensive loss | (326 | ) | (356 | ) | (382 | ) | |||
Retained earnings | 5,630 | 5,546 | 5,317 | ||||||
Less cost of common stock in treasury - 31,032,920 shares at 3/31/12, | |||||||||
30,831,076 shares at 12/31/11 and 27,103,941 shares at 3/31/11 | (1,614 | ) | (1,633 | ) | (1,541 | ) | |||
Total shareholders' equity | 6,985 | 6,868 | 5,877 | ||||||
Total liabilities and shareholders' equity | $ | 62,593 | $ | 61,008 | $ | 55,017 | |||
12
CONSOLIDATED STATEMENTS OF INCOME (unaudited) | ||||||
Comerica Incorporated and Subsidiaries | ||||||
Three Months Ended | ||||||
March 31, | ||||||
(in millions, except per share data) | 2012 | 2011 | ||||
INTEREST INCOME | ||||||
Interest and fees on loans | $ | 411 | $ | 375 | ||
Interest on investment securities | 64 | 57 | ||||
Interest on short-term investments | 3 | 2 | ||||
Total interest income | 478 | 434 | ||||
INTEREST EXPENSE | ||||||
Interest on deposits | 19 | 22 | ||||
Interest on medium- and long-term debt | 16 | 17 | ||||
Total interest expense | 35 | 39 | ||||
Net interest income | 443 | 395 | ||||
Provision for loan losses | 23 | 49 | ||||
Net interest income after provision for loan losses | 420 | 346 | ||||
NONINTEREST INCOME | ||||||
Service charges on deposit accounts | 56 | 52 | ||||
Fiduciary income | 38 | 39 | ||||
Commercial lending fees | 25 | 21 | ||||
Letter of credit fees | 17 | 18 | ||||
Card fees | 11 | 15 | ||||
Foreign exchange income | 9 | 9 | ||||
Bank-owned life insurance | 10 | 8 | ||||
Brokerage fees | 6 | 6 | ||||
Net securities gains | 5 | 2 | ||||
Other noninterest income | 29 | 37 | ||||
Total noninterest income | 206 | 207 | ||||
NONINTEREST EXPENSES | ||||||
Salaries | 201 | 188 | ||||
Employee benefits | 60 | 50 | ||||
Total salaries and employee benefits | 261 | 238 | ||||
Net occupancy expense | 41 | 40 | ||||
Equipment expense | 17 | 15 | ||||
Outside processing fee expense | 26 | 24 | ||||
Software expense | 23 | 23 | ||||
FDIC insurance expense | 10 | 15 | ||||
Advertising expense | 7 | 7 | ||||
Other real estate expense | 4 | 8 | ||||
Other noninterest expenses | 59 | 45 | ||||
Total noninterest expenses | 448 | 415 | ||||
Income before income taxes | 178 | 138 | ||||
Provision for income taxes | 48 | 35 | ||||
NET INCOME | 130 | 103 | ||||
Less income allocated to participating securities | 1 | 1 | ||||
Net income attributable to common shares | $ | 129 | $ | 102 | ||
Earnings per common share: | ||||||
Basic | $ | 0.66 | $ | 0.58 | ||
Diluted | 0.66 | 0.57 | ||||
Comprehensive income | 160 | 110 | ||||
Cash dividends declared on common stock | 20 | 17 | ||||
Cash dividends declared per common share | 0.10 | 0.10 | ||||
13
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (unaudited) | |||||||||||||||||||||||||||
Comerica Incorporated and Subsidiaries | |||||||||||||||||||||||||||
First | Fourth | Third | Second | First | First Quarter 2012 Compared To: | ||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Fourth Quarter 2011 | First Quarter 2011 | |||||||||||||||||||||
(in millions, except per share data) | 2012 | 2011 | 2011 | 2011 | 2011 | Amount | Percent | Amount | Percent | ||||||||||||||||||
INTEREST INCOME | |||||||||||||||||||||||||||
Interest and fees on loans | $ | 411 | $ | 415 | $ | 405 | $ | 369 | $ | 375 | $ | (4 | ) | (1 | )% | $ | 36 | 10 | % | ||||||||
Interest on investment securities | 64 | 63 | 54 | 59 | 57 | 1 | 1 | 7 | 11 | ||||||||||||||||||
Interest on short-term investments | 3 | 3 | 4 | 3 | 2 | — | (6 | ) | 1 | 34 | |||||||||||||||||
Total interest income | 478 | 481 | 463 | 431 | 434 | (3 | ) | (1 | ) | 44 | 10 | ||||||||||||||||
INTEREST EXPENSE | |||||||||||||||||||||||||||
Interest on deposits | 19 | 21 | 24 | 23 | 22 | (2 | ) | (10 | ) | (3 | ) | (17 | ) | ||||||||||||||
Interest on medium- and long-term debt | 16 | 16 | 16 | 17 | 17 | — | 1 | (1 | ) | (1 | ) | ||||||||||||||||
Total interest expense | 35 | 37 | 40 | 40 | 39 | (2 | ) | (5 | ) | (4 | ) | (11 | ) | ||||||||||||||
Net interest income | 443 | 444 | 423 | 391 | 395 | (1 | ) | — | 48 | 12 | |||||||||||||||||
Provision for loan losses | 23 | 19 | 38 | 47 | 49 | 4 | 21 | (26 | ) | (53 | ) | ||||||||||||||||
Net interest income after provision for loan losses | 420 | 425 | 385 | 344 | 346 | (5 | ) | (1 | ) | 74 | 21 | ||||||||||||||||
NONINTEREST INCOME | |||||||||||||||||||||||||||
Service charges on deposit accounts | 56 | 52 | 53 | 51 | 52 | 4 | 8 | 4 | 6 | ||||||||||||||||||
Fiduciary income | 38 | 36 | 37 | 39 | 39 | 2 | 7 | (1 | ) | (1 | ) | ||||||||||||||||
Commercial lending fees | 25 | 23 | 22 | 21 | 21 | 2 | 5 | 4 | 20 | ||||||||||||||||||
Letter of credit fees | 17 | 18 | 19 | 18 | 18 | (1 | ) | (3 | ) | (1 | ) | (6 | ) | ||||||||||||||
Card fees | 11 | 11 | 17 | 15 | 15 | — | (2 | ) | (4 | ) | (24 | ) | |||||||||||||||
Foreign exchange income | 9 | 10 | 11 | 10 | 9 | (1 | ) | (11 | ) | — | 6 | ||||||||||||||||
Bank-owned life insurance | 10 | 10 | 10 | 9 | 8 | — | (2 | ) | 2 | 15 | |||||||||||||||||
Brokerage fees | 6 | 5 | 5 | 6 | 6 | 1 | 15 | — | (10 | ) | |||||||||||||||||
Net securities gains (losses) | 5 | (4 | ) | 12 | 4 | 2 | 9 | N/M | 3 | N/M | |||||||||||||||||
Other noninterest income | 29 | 21 | 15 | 29 | 37 | 8 | 38 | (8 | ) | (19 | ) | ||||||||||||||||
Total noninterest income | 206 | 182 | 201 | 202 | 207 | 24 | 13 | (1 | ) | — | |||||||||||||||||
NONINTEREST EXPENSES | |||||||||||||||||||||||||||
Salaries | 201 | 205 | 192 | 185 | 188 | (4 | ) | (2 | ) | 13 | 7 | ||||||||||||||||
Employee benefits | 60 | 52 | 53 | 50 | 50 | 8 | 14 | 10 | 18 | ||||||||||||||||||
Total salaries and employee benefits | 261 | 257 | 245 | 235 | 238 | 4 | 1 | 23 | 10 | ||||||||||||||||||
Net occupancy expense | 41 | 47 | 44 | 38 | 40 | (6 | ) | (11 | ) | 1 | 4 | ||||||||||||||||
Equipment expense | 17 | 17 | 17 | 17 | 15 | — | (4 | ) | 2 | 8 | |||||||||||||||||
Outside processing fee expense | 26 | 27 | 25 | 25 | 24 | (1 | ) | (3 | ) | 2 | 10 | ||||||||||||||||
Software expense | 23 | 23 | 22 | 20 | 23 | — | 1 | — | 1 | ||||||||||||||||||
Merger and restructuring charges | — | 37 | 33 | 5 | — | (37 | ) | (98 | ) | — | N/M | ||||||||||||||||
FDIC insurance expense | 10 | 8 | 8 | 12 | 15 | 2 | 19 | (5 | ) | (31 | ) | ||||||||||||||||
Advertising expense | 7 | 7 | 7 | 7 | 7 | — | 2 | — | — | ||||||||||||||||||
Other real estate expense | 4 | 3 | 5 | 6 | 8 | 1 | 21 | (4 | ) | (57 | ) | ||||||||||||||||
Other noninterest expenses | 59 | 52 | 54 | 44 | 45 | 7 | 13 | 14 | 31 | ||||||||||||||||||
Total noninterest expenses | 448 | 478 | 460 | 409 | 415 | (30 | ) | (6 | ) | 33 | 8 | ||||||||||||||||
Income before income taxes | 178 | 129 | 126 | 137 | 138 | 49 | 38 | 40 | 29 | ||||||||||||||||||
Provision for income taxes | 48 | 33 | 28 | 41 | 35 | 15 | 43 | 13 | 37 | ||||||||||||||||||
NET INCOME | 130 | 96 | 98 | 96 | 103 | 34 | 36 | 27 | 26 | ||||||||||||||||||
Less income allocated to participating securities | 1 | 1 | 1 | 1 | 1 | — | 72 | — | 33 | ||||||||||||||||||
Net income attributable to common shares | $ | 129 | $ | 95 | $ | 97 | $ | 95 | $ | 102 | $ | 34 | 36 | % | $ | 27 | 26 | % | |||||||||
Earnings per common share: | |||||||||||||||||||||||||||
Basic | $ | 0.66 | $ | 0.48 | $ | 0.51 | $ | 0.54 | $ | 0.58 | $ | 0.18 | 38 | % | $ | 0.08 | 14 | % | |||||||||
Diluted | 0.66 | 0.48 | 0.51 | 0.53 | 0.57 | 0.18 | 38 | 0.09 | 16 | ||||||||||||||||||
Comprehensive income (loss) | 160 | (30 | ) | 176 | 170 | 110 | 190 | N/M | 50 | 46 | |||||||||||||||||
Cash dividends declared on common stock | 20 | 20 | 20 | 18 | 17 | — | (1 | ) | 3 | 11 | |||||||||||||||||
Cash dividends declared per common share | 0.10 | 0.10 | 0.10 | 0.10 | 0.10 | — | — | — | — | ||||||||||||||||||
N/M - Not Meaningful
14
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited) | ||||||||||||||||
Comerica Incorporated and Subsidiaries | ||||||||||||||||
2012 | 2011 | |||||||||||||||
(in millions) | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |||||||||||
Balance at beginning of period | $ | 726 | $ | 767 | $ | 806 | $ | 849 | $ | 901 | ||||||
Loan charge-offs: | ||||||||||||||||
Commercial | 25 | 28 | 33 | 66 | 65 | |||||||||||
Real estate construction: | ||||||||||||||||
Commercial Real Estate business line (a) | 2 | 4 | 11 | 12 | 8 | |||||||||||
Other business lines (b) | — | 1 | — | — | 1 | |||||||||||
Total real estate construction | 2 | 5 | 11 | 12 | 9 | |||||||||||
Commercial mortgage: | ||||||||||||||||
Commercial Real Estate business line (a) | 13 | 17 | 12 | 8 | 9 | |||||||||||
Other business lines (b) | 13 | 24 | 21 | 23 | 25 | |||||||||||
Total commercial mortgage | 26 | 41 | 33 | 31 | 34 | |||||||||||
International | 2 | 2 | — | — | 5 | |||||||||||
Residential mortgage | 2 | 2 | 4 | 7 | 2 | |||||||||||
Consumer | 5 | 7 | 9 | 9 | 8 | |||||||||||
Total loan charge-offs | 62 | 85 | 90 | 125 | 123 | |||||||||||
Recoveries on loans previously charged-off: | ||||||||||||||||
Commercial | 9 | 11 | 5 | 13 | 4 | |||||||||||
Real estate construction | 1 | 4 | 3 | 5 | 2 | |||||||||||
Commercial mortgage | 3 | 9 | 3 | 5 | 9 | |||||||||||
Lease financing | — | — | — | 6 | 5 | |||||||||||
International | 1 | — | — | 4 | 1 | |||||||||||
Residential mortgage | 1 | — | 1 | 1 | — | |||||||||||
Consumer | 2 | 1 | 1 | 1 | 1 | |||||||||||
Total recoveries | 17 | 25 | 13 | 35 | 22 | |||||||||||
Net loan charge-offs | 45 | 60 | 77 | 90 | 101 | |||||||||||
Provision for loan losses | 23 | 19 | 38 | 47 | 49 | |||||||||||
Balance at end of period | $ | 704 | $ | 726 | $ | 767 | $ | 806 | $ | 849 | ||||||
Allowance for loan losses as a percentage of total loans (c) | 1.64 | % | 1.70 | % | 1.86 | % | 2.06 | % | 2.17 | % | ||||||
Net loan charge-offs as a percentage of average total loans | 0.43 | 0.57 | 0.77 | 0.92 | 1.03 | |||||||||||
(a) | Primarily charge-offs of loans to real estate investors and developers. |
(b) | Primarily charge-offs of loans secured by owner-occupied real estate. |
(c) | Reflects the impact of acquired loans, which were initially recorded at fair value with no related allowance for loan losses. |
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited) | ||||||||||||||||
Comerica Incorporated and Subsidiaries | ||||||||||||||||
2012 | 2011 | |||||||||||||||
(in millions) | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |||||||||||
Balance at beginning of period | $ | 26 | $ | 27 | $ | 30 | $ | 32 | $ | 35 | ||||||
Add: Provision for credit losses on lending-related commitments | (1 | ) | (1 | ) | (3 | ) | (2 | ) | (3 | ) | ||||||
Balance at end of period | $ | 25 | $ | 26 | $ | 27 | $ | 30 | $ | 32 | ||||||
Unfunded lending-related commitments sold | $ | — | $ | — | $ | — | $ | 3 | $ | 2 | ||||||
15
NONPERFORMING ASSETS (unaudited) | ||||||||||||||||
Comerica Incorporated and Subsidiaries | ||||||||||||||||
2012 | 2011 | |||||||||||||||
(in millions) | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |||||||||||
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS | ||||||||||||||||
Nonaccrual loans: | ||||||||||||||||
Business loans: | ||||||||||||||||
Commercial | $ | 205 | $ | 237 | $ | 258 | $ | 261 | $ | 226 | ||||||
Real estate construction: | ||||||||||||||||
Commercial Real Estate business line (a) | 77 | 93 | 109 | 137 | 195 | |||||||||||
Other business lines (b) | 8 | 8 | 3 | 2 | 3 | |||||||||||
Total real estate construction | 85 | 101 | 112 | 139 | 198 | |||||||||||
Commercial mortgage: | ||||||||||||||||
Commercial Real Estate business line (a) | 174 | 159 | 198 | 186 | 197 | |||||||||||
Other business lines (b) | 275 | 268 | 275 | 269 | 293 | |||||||||||
Total commercial mortgage | 449 | 427 | 473 | 455 | 490 | |||||||||||
Lease financing | 4 | 5 | 5 | 6 | 7 | |||||||||||
International | 4 | 8 | 7 | 7 | 4 | |||||||||||
Total nonaccrual business loans | 747 | 778 | 855 | 868 | 925 | |||||||||||
Retail loans: | ||||||||||||||||
Residential mortgage | 69 | 71 | 65 | 60 | 58 | |||||||||||
Consumer: | ||||||||||||||||
Home equity | 9 | 5 | 4 | 4 | 6 | |||||||||||
Other consumer | 5 | 6 | 5 | 9 | 7 | |||||||||||
Total consumer | 14 | 11 | 9 | 13 | 13 | |||||||||||
Total nonaccrual retail loans | 83 | 82 | 74 | 73 | 71 | |||||||||||
Total nonaccrual loans | 830 | 860 | 929 | 941 | 996 | |||||||||||
Reduced-rate loans | 26 | 27 | 29 | 33 | 34 | |||||||||||
Total nonperforming loans (c) | 856 | 887 | 958 | 974 | 1,030 | |||||||||||
Foreclosed property | 67 | 94 | 87 | 70 | 74 | |||||||||||
Total nonperforming assets (c) | $ | 923 | $ | 981 | $ | 1,045 | $ | 1,044 | $ | 1,104 | ||||||
Nonperforming loans as a percentage of total loans | 1.99 | % | 2.08 | % | 2.32 | % | 2.49 | % | 2.63 | % | ||||||
Nonperforming assets as a percentage of total loans and foreclosed property | 2.14 | 2.29 | 2.53 | 2.66 | 2.81 | |||||||||||
Allowance for loan losses as a percentage of total nonperforming loans | 82 | 82 | 80 | 83 | 82 | |||||||||||
Loans past due 90 days or more and still accruing | $ | 50 | $ | 58 | $ | 81 | $ | 64 | $ | 72 | ||||||
ANALYSIS OF NONACCRUAL LOANS | ||||||||||||||||
Nonaccrual loans at beginning of period | $ | 860 | $ | 929 | $ | 941 | $ | 996 | $ | 1,080 | ||||||
Loans transferred to nonaccrual (d) | 69 | 99 | 130 | 150 | 149 | |||||||||||
Nonaccrual business loan gross charge-offs (e) | (55 | ) | (76 | ) | (76 | ) | (109 | ) | (111 | ) | ||||||
Loans transferred to accrual status (d) | — | — | (15 | ) | — | (4 | ) | |||||||||
Nonaccrual business loans sold (f) | (7 | ) | (19 | ) | (15 | ) | (16 | ) | (60 | ) | ||||||
Payments/Other (g) | (37 | ) | (73 | ) | (36 | ) | (80 | ) | (58 | ) | ||||||
Nonaccrual loans at end of period | $ | 830 | $ | 860 | $ | 929 | $ | 941 | $ | 996 | ||||||
(a) Primarily loans to real estate investors and developers. | ||||||||||||||||
(b) Primarily loans secured by owner-occupied real estate. | ||||||||||||||||
(c) Excludes loans acquired with credit impairment. | ||||||||||||||||
(d) Based on an analysis of nonaccrual loans with book balances greater than $2 million. | ||||||||||||||||
(e) Analysis of gross loan charge-offs: | ||||||||||||||||
Nonaccrual business loans | $ | 55 | $ | 76 | $ | 76 | $ | 109 | $ | 111 | ||||||
Performing watch list loans | — | — | 1 | — | 2 | |||||||||||
Consumer and residential mortgage loans | 7 | 9 | 13 | 16 | 10 | |||||||||||
Total gross loan charge-offs | $ | 62 | $ | 85 | $ | 90 | $ | 125 | $ | 123 | ||||||
(f) Analysis of loans sold: | ||||||||||||||||
Nonaccrual business loans | $ | 7 | $ | 19 | $ | 15 | $ | 16 | $ | 60 | ||||||
Performing watch list loans | 11 | — | 16 | 6 | 35 | |||||||||||
Total loans sold | $ | 18 | $ | 19 | $ | 31 | $ | 22 | $ | 95 | ||||||
(g) Includes net changes related to nonaccrual loans with balances less than $2 million, payments on nonaccrual 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. | ||||||||||||||||
16
ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited) | ||||||||||||||||||||||||||
Comerica Incorporated and Subsidiaries | ||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||
March 31, 2012 | December 31, 2011 | March 31, 2011 | ||||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | |||||||||||||||||||||
(dollar amounts in millions) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||
Commercial loans | $ | 24,736 | $ | 219 | 3.56 | % | $ | 23,515 | $ | 216 | 3.64 | % | $ | 21,496 | $ | 201 | 3.76 | % | ||||||||
Real estate construction loans | 1,453 | 17 | 4.58 | 1,619 | 21 | 5.26 | 2,179 | 19 | 3.51 | |||||||||||||||||
Commercial mortgage loans | 10,202 | 119 | 4.73 | 10,388 | 119 | 4.54 | 9,790 | 95 | 3.95 | |||||||||||||||||
Lease financing | 897 | 8 | 3.41 | 919 | 8 | 3.44 | 987 | 9 | 3.62 | |||||||||||||||||
International loans | 1,205 | 11 | 3.76 | 1,128 | 10 | 3.63 | 1,219 | 12 | 3.87 | |||||||||||||||||
Residential mortgage loans | 1,519 | 18 | 4.77 | 1,591 | 20 | 5.06 | 1,599 | 21 | 5.24 | |||||||||||||||||
Consumer loans | 2,257 | 20 | 3.49 | 2,294 | 21 | 3.58 | 2,281 | 19 | 3.42 | |||||||||||||||||
Total loans (a) | 42,269 | 412 | 3.92 | 41,454 | 415 | 3.98 | 39,551 | 376 | 3.85 | |||||||||||||||||
Auction-rate securities available-for-sale | 352 | 1 | 0.63 | 426 | 1 | 0.64 | 554 | 1 | 0.88 | |||||||||||||||||
Other investment securities available-for-sale | 9,537 | 63 | 2.73 | 9,355 | 62 | 2.74 | 6,757 | 56 | 3.37 | |||||||||||||||||
Total investment securities available-for-sale | 9,889 | 64 | 2.65 | 9,781 | 63 | 2.64 | 7,311 | 57 | 3.17 | |||||||||||||||||
Federal funds sold | 9 | — | 0.29 | 15 | — | 0.32 | 3 | — | 0.32 | |||||||||||||||||
Interest-bearing deposits with banks (b) | 3,884 | 2 | 0.26 | 4,293 | 3 | 0.24 | 2,354 | 1 | 0.26 | |||||||||||||||||
Other short-term investments | 135 | 1 | 1.97 | 133 | 1 | 2.26 | 128 | 1 | 2.68 | |||||||||||||||||
Total earning assets | 56,186 | 479 | 3.44 | 55,676 | 482 | 3.45 | 49,347 | 435 | 3.57 | |||||||||||||||||
Cash and due from banks | 999 | 959 | 884 | |||||||||||||||||||||||
Allowance for loan losses | (737 | ) | (773 | ) | (908 | ) | ||||||||||||||||||||
Accrued income and other assets | 5,165 | 5,183 | 4,452 | |||||||||||||||||||||||
Total assets | $ | 61,613 | $ | 61,045 | $ | 53,775 | ||||||||||||||||||||
Money market and NOW deposits | $ | 20,795 | 10 | 0.19 | $ | 20,716 | 12 | 0.21 | $ | 17,797 | 12 | 0.26 | ||||||||||||||
Savings deposits | 1,543 | — | 0.08 | 1,652 | — | 0.12 | 1,421 | — | 0.09 | |||||||||||||||||
Customer certificates of deposit | 5,978 | 8 | 0.57 | 5,872 | 9 | 0.60 | 5,509 | 10 | 0.76 | |||||||||||||||||
Foreign office and other time deposits | 358 | 1 | 0.57 | 363 | — | 0.40 | 412 | — | 0.49 | |||||||||||||||||
Total interest-bearing deposits | 28,674 | 19 | 0.26 | 28,603 | 21 | 0.29 | 25,139 | 22 | 0.37 | |||||||||||||||||
Short-term borrowings | 78 | — | 0.11 | 142 | — | 0.07 | 94 | — | 0.31 | |||||||||||||||||
Medium- and long-term debt | 4,940 | 16 | 1.34 | 4,976 | 16 | 1.30 | 6,128 | 17 | 1.10 | |||||||||||||||||
Total interest-bearing sources | 33,692 | 35 | 0.42 | 33,721 | 37 | 0.44 | 31,361 | 39 | 0.51 | |||||||||||||||||
Noninterest-bearing deposits | 19,637 | 19,176 | 15,459 | |||||||||||||||||||||||
Accrued expenses and other liabilities | 1,345 | 1,201 | 1,120 | |||||||||||||||||||||||
Total shareholders' equity | 6,939 | 6,947 | 5,835 | |||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 61,613 | $ | 61,045 | $ | 53,775 | ||||||||||||||||||||
Net interest income/rate spread (FTE) | $ | 444 | 3.02 | $ | 445 | 3.01 | $ | 396 | 3.06 | |||||||||||||||||
FTE adjustment | $ | 1 | $ | 1 | $ | 1 | ||||||||||||||||||||
Impact of net noninterest-bearing sources of funds | 0.17 | 0.18 | 0.19 | |||||||||||||||||||||||
Net interest margin (as a percentage of average earning assets) (FTE) (a) (b) | 3.19 | % | 3.19 | % | 3.25 | % | ||||||||||||||||||||
(a) Accretion of the purchase discount on the acquired loan portfolio of $25 million in the first quarter of 2012 and $26 million in the fourth quarter of 2011 increased the net interest margin by 18 basis points in the first quarter of 2012 and by 19 basis points in the fourth quarter of 2011.
(b) Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 21 basis points in the first quarter of 2012, and by 24 basis points and 14 basis points in the fourth and first quarters of 2011, respectively.
17
CONSOLIDATED STATISTICAL DATA (unaudited) | |||||||||||||||||||
Comerica Incorporated and Subsidiaries | |||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
(in millions, except per share data) | 2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||
Commercial loans: | |||||||||||||||||||
Floor plan | $ | 2,152 | $ | 1,822 | $ | 1,209 | $ | 1,478 | $ | 1,893 | |||||||||
Other | 23,488 | 23,174 | 21,904 | 20,574 | 19,467 | ||||||||||||||
Total commercial loans | 25,640 | 24,996 | 23,113 | 22,052 | 21,360 | ||||||||||||||
Real estate construction loans: | |||||||||||||||||||
Commercial Real Estate business line (a) | 1,055 | 1,103 | 1,226 | 1,343 | 1,606 | ||||||||||||||
Other business lines (b) | 387 | 430 | 422 | 385 | 417 | ||||||||||||||
Total real estate construction loans | 1,442 | 1,533 | 1,648 | 1,728 | 2,023 | ||||||||||||||
Commercial mortgage loans: | |||||||||||||||||||
Commercial Real Estate business line (a) | 2,501 | 2,507 | 2,602 | 1,930 | 1,918 | ||||||||||||||
Other business lines (b) | 7,578 | 7,757 | 7,937 | 7,649 | 7,779 | ||||||||||||||
Total commercial mortgage loans | 10,079 | 10,264 | 10,539 | 9,579 | 9,697 | ||||||||||||||
Lease financing | 872 | 905 | 927 | 949 | 958 | ||||||||||||||
International loans | 1,256 | 1,170 | 1,046 | 1,162 | 1,326 | ||||||||||||||
Residential mortgage loans | 1,485 | 1,526 | 1,643 | 1,491 | 1,550 | ||||||||||||||
Consumer loans: | |||||||||||||||||||
Home equity | 1,612 | 1,655 | 1,683 | 1,622 | 1,661 | ||||||||||||||
Other consumer | 626 | 630 | 626 | 610 | 601 | ||||||||||||||
Total consumer loans | 2,238 | 2,285 | 2,309 | 2,232 | 2,262 | ||||||||||||||
Total loans | $ | 43,012 | $ | 42,679 | $ | 41,225 | $ | 39,193 | $ | 39,176 | |||||||||
Goodwill | $ | 635 | $ | 635 | $ | 635 | $ | 150 | $ | 150 | |||||||||
Core deposit intangible | 27 | 29 | 32 | — | — | ||||||||||||||
Loan servicing rights | 3 | 3 | 3 | 4 | 4 | ||||||||||||||
Tier 1 common capital ratio (c) (d) | 10.33 | % | 10.37 | % | 10.57 | % | % | 10.53 | % | % | 10.35 | % | |||||||
Tier 1 risk-based capital ratio (d) | 10.37 | 10.41 | 10.65 | 10.53 | 10.35 | ||||||||||||||
Total risk-based capital ratio (d) | 14.11 | 14.25 | 14.84 | 14.80 | 14.80 | ||||||||||||||
Leverage ratio (d) | 10.97 | 10.92 | 11.41 | 11.40 | 11.37 | ||||||||||||||
Tangible common equity ratio (c) | 10.21 | 10.27 | 10.43 | 10.90 | 10.43 | ||||||||||||||
Common shareholders' equity per share of common stock | $ | 35.44 | $ | 34.80 | $ | 34.94 | $ | 34.15 | $ | 33.25 | |||||||||
Tangible common equity per share of common stock (c) | 32.06 | 31.42 | 31.57 | 33.28 | 32.37 | ||||||||||||||
Market value per share for the quarter: | |||||||||||||||||||
High | 34.00 | 27.37 | 35.79 | 39.00 | 43.53 | ||||||||||||||
Low | 26.25 | 21.53 | 21.48 | 33.08 | 36.20 | ||||||||||||||
Close | 32.36 | 25.80 | 22.97 | 34.57 | 36.72 | ||||||||||||||
Quarterly ratios: | |||||||||||||||||||
Return on average common shareholders' equity | 7.50 | % | % | 5.51 | % | % | 5.91 | % | % | 6.41 | % | % | 7.08 | % | |||||
Return on average assets | 0.84 | 0.63 | 0.67 | 0.70 | 0.77 | ||||||||||||||
Efficiency ratio | 69.50 | 75.78 | 75.11 | 69.33 | 69.05 | ||||||||||||||
Number of banking centers | 495 | 494 | 502 | 446 | 445 | ||||||||||||||
Number of employees - full time equivalent | 9,195 | 9,397 | 9,701 | 8,915 | 8,955 | ||||||||||||||
(a) | Primarily loans to real estate investors and developers. |
(b) | Primarily loans secured by owner-occupied real estate. |
(c) | See Reconciliation of Non-GAAP Financial Measures. |
(d) | March 31, 2012 ratios are estimated. |
18
PARENT COMPANY ONLY BALANCE SHEETS (unaudited) | ||||||||||||||||||||
Comerica Incorporated | ||||||||||||||||||||
March 31, | December 31, | March 31, | ||||||||||||||||||
(in millions, except share data) | 2012 | 2011 | 2011 | |||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from subsidiary bank | $ | 6 | $ | 7 | 7 | |||||||||||||||
Short-term investments with subsidiary bank | 388 | 411 | 334 | |||||||||||||||||
Other short-term investments | 94 | 90 | 90 | |||||||||||||||||
Investment in subsidiaries, principally banks | 7,120 | 7,011 | 6,033 | |||||||||||||||||
Premises and equipment | 5 | 4 | 3 | |||||||||||||||||
Other assets | 183 | 177 | 174 | |||||||||||||||||
Total assets | $ | 7,796 | $ | 7,700 | $ | 6,641 | ||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||
Medium- and long-term debt | $ | 660 | $ | 666 | $ | 631 | ||||||||||||||
Other liabilities | 151 | 166 | 133 | |||||||||||||||||
Total liabilities | 811 | 832 | 764 | |||||||||||||||||
Common stock - $5 par value: | ||||||||||||||||||||
Authorized - 325,000,000 shares | ||||||||||||||||||||
Issued - 228,164,824 shares at 3/31/12 and 12/31/11 and 203,878,110 shares at 3/31/11 | 1,141 | 1,141 | 1,019 | |||||||||||||||||
Capital surplus | 2,154 | 2,170 | 1,464 | |||||||||||||||||
Accumulated other comprehensive loss | (326 | ) | (356 | ) | (382 | ) | ||||||||||||||
Retained earnings | 5,630 | 5,546 | 5,317 | |||||||||||||||||
Less cost of common stock in treasury - 31,032,920 shares at 3/31/12, 30,831,076 shares at 12/31/11, and 27,103,941 shares at 3/31/11 | (1,614 | ) | (1,633 | ) | (1,541 | ) | ||||||||||||||
Total shareholders' equity | 6,985 | 6,868 | 5,877 | |||||||||||||||||
Total liabilities and shareholders' equity | $ | 7,796 | $ | 7,700 | $ | 6,641 | ||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) | ||||||||||||||||||||
Comerica Incorporated and Subsidiaries | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Common Stock | Other | Total | ||||||||||||||||||
Shares | Capital | Comprehensive | Retained | Treasury | Shareholders' | |||||||||||||||
(in millions, except per share data) | Outstanding | Amount | Surplus | Loss | Earnings | Stock | Equity | |||||||||||||
BALANCE AT DECEMBER 31, 2010 | 176.5 | $ | 1,019 | $ | 1,481 | $ | (389 | ) | $ | 5,247 | $ | (1,565 | ) | $ | 5,793 | |||||
Net income | — | — | — | — | 103 | — | 103 | |||||||||||||
Other comprehensive income, net of tax | — | — | — | 7 | — | — | 7 | |||||||||||||
Cash dividends declared on common stock ($0.10 per share) | — | — | — | — | (17 | ) | — | (17 | ) | |||||||||||
Purchase of common stock | (0.5 | ) | — | — | — | — | (21 | ) | (21 | ) | ||||||||||
Net issuance of common stock under employee stock plans | 0.8 | — | (30 | ) | — | (16 | ) | 45 | (1 | ) | ||||||||||
Share-based compensation | — | — | 13 | — | — | — | 13 | |||||||||||||
BALANCE AT MARCH 31, 2011 | 176.8 | $ | 1,019 | $ | 1,464 | $ | (382 | ) | $ | 5,317 | $ | (1,541 | ) | $ | 5,877 | |||||
BALANCE AT DECEMBER 31, 2011 | 197.3 | $ | 1,141 | $ | 2,170 | $ | (356 | ) | $ | 5,546 | $ | (1,633 | ) | $ | 6,868 | |||||
Net income | — | — | — | — | 130 | — | 130 | |||||||||||||
Other comprehensive income, net of tax | — | — | — | 30 | — | — | 30 | |||||||||||||
Cash dividends declared on common stock ($0.10 per share) | — | — | — | — | (20 | ) | — | (20 | ) | |||||||||||
Purchase of common stock | (1.2 | ) | — | — | — | — | (36 | ) | (36 | ) | ||||||||||
Net issuance of common stock under employee stock plans | 1.1 | — | (32 | ) | — | (26 | ) | 58 | — | |||||||||||
Share-based compensation | — | — | 13 | — | — | — | 13 | |||||||||||||
Other | (0.1 | ) | — | 3 | — | — | (3 | ) | — | |||||||||||
BALANCE AT MARCH 31, 2012 | 197.1 | $ | 1,141 | $ | 2,154 | $ | (326 | ) | $ | 5,630 | $ | (1,614 | ) | $ | 6,985 | |||||
19
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited) | |||||||||||||||||||||||
Comerica Incorporated and Subsidiaries | |||||||||||||||||||||||
(dollar amounts in millions) | Business | Retail | Wealth | ||||||||||||||||||||
Three Months Ended March 31, 2012 | Bank | Bank | Management | Finance | Other | Total | |||||||||||||||||
Earnings summary: | |||||||||||||||||||||||
Net interest income (expense) (FTE) | $ | 379 | $ | 167 | $ | 47 | $ | (156 | ) | $ | 7 | $ | 444 | ||||||||||
Provision for loan losses | 1 | 4 | 14 | — | 4 | 23 | |||||||||||||||||
Noninterest income | 81 | 42 | 65 | 13 | 5 | 206 | |||||||||||||||||
Noninterest expenses | 159 | 184 | 81 | 3 | 21 | 448 | |||||||||||||||||
Provision (benefit) for income taxes (FTE) | 94 | 7 | 6 | (54 | ) | (4 | ) | 49 | |||||||||||||||
Net income (loss) | $ | 206 | $ | 14 | $ | 11 | $ | (92 | ) | $ | (9 | ) | $ | 130 | |||||||||
Net credit-related charge-offs | $ | 28 | $ | 12 | $ | 5 | — | — | $ | 45 | |||||||||||||
Selected average balances: | |||||||||||||||||||||||
Assets | $ | 33,184 | $ | 6,173 | $ | 4,636 | $ | 12,095 | $ | 5,525 | $ | 61,613 | |||||||||||
Loans | 32,240 | 5,462 | 4,565 | 2 | — | 42,269 | |||||||||||||||||
Deposits | 23,997 | 20,373 | 3,611 | 161 | 169 | 48,311 | |||||||||||||||||
Statistical data: | |||||||||||||||||||||||
Return on average assets (a) | 2.49 | % | 0.27 | % | 0.97 | % | N/M | N/M | 0.84 | % | |||||||||||||
Efficiency ratio | 34.74 | 87.73 | 75.23 | N/M | N/M | 69.50 | |||||||||||||||||
Business | Retail | Wealth | |||||||||||||||||||||
Three Months Ended December 31, 2011 | Bank | Bank | Management | Finance | Other | Total | |||||||||||||||||
Earnings summary: | |||||||||||||||||||||||
Net interest income (expense) (FTE) | $ | 383 | $ | 176 | $ | 46 | $ | (169 | ) | $ | 9 | $ | 445 | ||||||||||
Provision for loan losses | (4 | ) | 15 | 10 | — | (2 | ) | 19 | |||||||||||||||
Noninterest income | 73 | 35 | 55 | 18 | 1 | 182 | |||||||||||||||||
Noninterest expenses | 161 | 182 | 83 | 3 | 49 | 478 | |||||||||||||||||
Provision (benefit) for income taxes (FTE) | 98 | 4 | 3 | (60 | ) | (11 | ) | 34 | |||||||||||||||
Net income (loss) | $ | 201 | $ | 10 | $ | 5 | $ | (94 | ) | $ | (26 | ) | $ | 96 | |||||||||
Net credit-related charge-offs | $ | 32 | $ | 16 | $ | 12 | — | — | $ | 60 | |||||||||||||
Selected average balances: | |||||||||||||||||||||||
Assets | $ | 32,151 | $ | 6,250 | $ | 4,672 | $ | 11,959 | $ | 6,013 | $ | 61,045 | |||||||||||
Loans | 31,257 | 5,571 | 4,618 | 3 | 5 | 41,454 | |||||||||||||||||
Deposits | 23,296 | 20,715 | 3,400 | 200 | 168 | 47,779 | |||||||||||||||||
Statistical data: | |||||||||||||||||||||||
Return on average assets (a) | 2.50 | % | 0.18 | % | 0.45 | % | N/M | N/M | 0.63 | % | |||||||||||||
Efficiency ratio | 35.55 | 84.31 | 82.12 | N/M | N/M | 75.78 | |||||||||||||||||
Business | Retail | Wealth | |||||||||||||||||||||
Three Months Ended March 31, 2011 | Bank | Bank | Management | Finance | Other | Total | |||||||||||||||||
Earnings summary: | |||||||||||||||||||||||
Net interest income (expense) (FTE) | $ | 341 | $ | 139 | $ | 44 | $ | (135 | ) | 7 | $ | 396 | |||||||||||
Provision for loan losses | 18 | 23 | 8 | — | — | 49 | |||||||||||||||||
Noninterest income | 77 | 42 | 64 | 18 | 6 | 207 | |||||||||||||||||
Noninterest expenses | 160 | 162 | 78 | 2 | 13 | 415 | |||||||||||||||||
Provision (benefit) for income taxes (FTE) | 73 | (2 | ) | 8 | (44 | ) | 1 | 36 | |||||||||||||||
Net income (loss) | $ | 167 | $ | (2 | ) | $ | 14 | $ | (75 | ) | $ | (1 | ) | $ | 103 | ||||||||
Net credit-related charge-offs | $ | 73 | $ | 23 | $ | 5 | — | — | $ | 101 | |||||||||||||
Selected average balances: | |||||||||||||||||||||||
Assets | $ | 30,092 | $ | 5,558 | $ | 4,809 | $ | 9,370 | $ | 3,946 | $ | 53,775 | |||||||||||
Loans | 29,609 | 5,106 | 4,807 | 22 | 7 | 39,551 | |||||||||||||||||
Deposits | 20,084 | 17,360 | 2,800 | 249 | 105 | 40,598 | |||||||||||||||||
Statistical data: | |||||||||||||||||||||||
Return on average assets (a) | 2.22 | % | (0.05 | )% | 1.14 | % | N/M | N/M | 0.77 | % | |||||||||||||
Efficiency ratio | 38.14 | 89.19 | 74.38 | N/M | N/M | 69.05 | |||||||||||||||||
(a) | Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity. |
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
20
MARKET SEGMENT FINANCIAL RESULTS (unaudited) | |||||||||||||||||||||||||||||||
Comerica Incorporated and Subsidiaries | |||||||||||||||||||||||||||||||
Finance | |||||||||||||||||||||||||||||||
(dollar amounts in millions) | Other | & Other | |||||||||||||||||||||||||||||
Three Months Ended March 31, 2012 | Midwest | Western | Texas | Florida | Markets | International | Businesses | Total | |||||||||||||||||||||||
Earnings summary: | |||||||||||||||||||||||||||||||
Net interest income (expense) (FTE) | $ | 198 | $ | 171 | $ | 151 | $ | 10 | $ | 45 | $ | 18 | $ | (149 | ) | $ | 444 | ||||||||||||||
Provision for loan losses | 10 | (7 | ) | 14 | 6 | (3 | ) | (1 | ) | 4 | 23 | ||||||||||||||||||||
Noninterest income | 98 | 33 | 31 | 4 | 14 | 8 | 18 | 206 | |||||||||||||||||||||||
Noninterest expenses | 183 | 107 | 92 | 9 | 24 | 9 | 24 | 448 | |||||||||||||||||||||||
Provision (benefit) for income taxes (FTE) | 35 | 39 | 27 | — | — | 6 | (58 | ) | 49 | ||||||||||||||||||||||
Net income (loss) | $ | 68 | $ | 65 | $ | 49 | $ | (1 | ) | $ | 38 | $ | 12 | $ | (101 | ) | $ | 130 | |||||||||||||
Net credit-related charge-offs | $ | 18 | $ | 11 | $ | 7 | $ | 2 | $ | 6 | $ | 1 | — | $ | 45 | ||||||||||||||||
Selected average balances: | |||||||||||||||||||||||||||||||
Assets | $ | 14,095 | $ | 12,623 | $ | 10,082 | $ | 1,416 | $ | 4,021 | $ | 1,756 | $ | 17,620 | $ | 61,613 | |||||||||||||||
Loans | 13,829 | 12,383 | 9,295 | 1,418 | 3,693 | 1,649 | 2 | 42,269 | |||||||||||||||||||||||
Deposits | 19,415 | 13,897 | 10,229 | 424 | 2,628 | 1,388 | 330 | 48,311 | |||||||||||||||||||||||
Statistical data: | |||||||||||||||||||||||||||||||
Return on average assets (a) | 1.33 | % | 1.75 | % | 1.72 | % | (0.21 | )% | 3.77 | % | 2.73 | % | N/M | 0.84 | % | ||||||||||||||||
Efficiency ratio | 61.78 | 52.50 | 50.33 | 68.94 | 44.62 | 33.02 | N/M | 69.50 | |||||||||||||||||||||||
Finance | |||||||||||||||||||||||||||||||
Other | & Other | ||||||||||||||||||||||||||||||
Three Months Ended December 31, 2011 | Midwest | Western | Texas | Florida | Markets | International | Businesses | Total | |||||||||||||||||||||||
Earnings summary: | |||||||||||||||||||||||||||||||
Net interest income (expense) (FTE) | $ | 202 | $ | 170 | $ | 158 | $ | 11 | $ | 46 | $ | 18 | $ | (160 | ) | $ | 445 | ||||||||||||||
Provision for loan losses | 20 | (12 | ) | 8 | 4 | — | 1 | (2 | ) | 19 | |||||||||||||||||||||
Noninterest income | 85 | 33 | 26 | 4 | 7 | 8 | 19 | 182 | |||||||||||||||||||||||
Noninterest expenses | 185 | 109 | 89 | 13 | 23 | 7 | 52 | 478 | |||||||||||||||||||||||
Provision (benefit) for income taxes (FTE) | 29 | 41 | 32 | (1 | ) | (2 | ) | 6 | (71 | ) | 34 | ||||||||||||||||||||
Net income (loss) | $ | 53 | $ | 65 | $ | 55 | $ | (1 | ) | $ | 32 | $ | 12 | $ | (120 | ) | $ | 96 | |||||||||||||
Net credit-related charge-offs | $ | 32 | $ | 5 | $ | 4 | $ | 7 | $ | 10 | 2 | — | $ | 60 | |||||||||||||||||
Selected average balances: | |||||||||||||||||||||||||||||||
Assets | $ | 13,976 | $ | 12,266 | $ | 9,712 | $ | 1,435 | $ | 4,016 | $ | 1,668 | $ | 17,972 | $ | 61,045 | |||||||||||||||
Loans | 13,725 | 12,026 | 8,952 | 1,457 | 3,718 | 1,568 | 8 | 41,454 | |||||||||||||||||||||||
Deposits | 19,076 | 13,671 | 10,333 | 435 | 2,414 | 1,482 | 368 | 47,779 | |||||||||||||||||||||||
Statistical data: | |||||||||||||||||||||||||||||||
Return on average assets (a) | 1.07 | % | 1.77 | % | 1.92 | % | (0.37 | )% | 3.15 | % | 2.78 | % | N/M | 0.63 | % | ||||||||||||||||
Efficiency ratio | 63.47 | 53.94 | 48.13 | 92.29 | 44.64 | 28.20 | N/M | 75.78 | |||||||||||||||||||||||
Finance | |||||||||||||||||||||||||||||||
Other | & Other | ||||||||||||||||||||||||||||||
Three Months Ended March 31, 2011 | Midwest | Western | Texas | Florida | Markets | International | Businesses | Total | |||||||||||||||||||||||
Earnings summary: | |||||||||||||||||||||||||||||||
Net interest income (expense) (FTE) | $ | 203 | $ | 164 | $ | 87 | $ | 11 | $ | 41 | $ | 18 | $ | (128 | ) | $ | 396 | ||||||||||||||
Provision for loan losses | 34 | 11 | 4 | 8 | (7 | ) | (1 | ) | — | 49 | |||||||||||||||||||||
Noninterest income | 100 | 37 | 23 | 4 | 11 | 8 | 24 | 207 | |||||||||||||||||||||||
Noninterest expenses | 188 | 109 | 61 | 12 | 21 | 9 | 15 | 415 | |||||||||||||||||||||||
Provision (benefit) for income taxes (FTE) | 28 | 30 | 16 | (1 | ) | — | 6 | (43 | ) | 36 | |||||||||||||||||||||
Net income (loss) | $ | 53 | $ | 51 | $ | 29 | $ | (4 | ) | $ | 38 | $ | 12 | $ | (76 | ) | $ | 103 | |||||||||||||
Net credit-related charge-offs | $ | 46 | $ | 26 | $ | 8 | $ | 8 | $ | 9 | 4 | — | $ | 101 | |||||||||||||||||
Selected average balances: | |||||||||||||||||||||||||||||||
Assets | $ | 14,303 | $ | 12,590 | $ | 7,031 | $ | 1,553 | $ | 3,247 | $ | 1,735 | $ | 13,316 | $ | 53,775 | |||||||||||||||
Loans | 14,104 | 12,383 | 6,824 | 1,580 | 2,960 | 1,671 | 29 | 39,551 | |||||||||||||||||||||||
Deposits | 18,230 | 12,235 | 5,786 | 367 | 2,298 | 1,328 | 354 | 40,598 | |||||||||||||||||||||||
Statistical data: | |||||||||||||||||||||||||||||||
Return on average assets (a) | 1.07 | % | 1.54 | % | 1.65 | % | (0.93 | )% | 4.74 | % | 2.79 | % | N/M | 0.77 | % | ||||||||||||||||
Efficiency ratio | 62.11 | 54.34 | 55.39 | 80.08 | 41.67 | 34.62 | N/M | 69.05 | |||||||||||||||||||||||
(a) | Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity. |
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) | |||||||||||||||||||
Comerica Incorporated and Subsidiaries | |||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
(dollar amounts in millions) | 2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||
Tier 1 Common Capital Ratio: | |||||||||||||||||||
Tier 1 capital (a) (b) | $ | 6,672 | $ | 6,582 | $ | 6,560 | $ | 6,193 | $ | 6,107 | |||||||||
Less: | |||||||||||||||||||
Trust preferred securities | 25 | 25 | 49 | — | — | ||||||||||||||
Tier 1 common capital (b) | $ | 6,647 | $ | 6,557 | $ | 6,511 | $ | 6,193 | $ | 6,107 | |||||||||
Risk-weighted assets (a) (b) | $ | 64,362 | $ | 63,244 | $ | 61,593 | $ | 58,795 | $ | 58,998 | |||||||||
Tier 1 risk-based capital ratio (b) | 10.37 | % | 10.41 | % | 10.65 | % | 10.53 | % | 10.35 | % | |||||||||
Tier 1 common capital ratio (b) | 10.33 | 10.37 | 10.57 | 10.53 | 10.35 | ||||||||||||||
Tangible Common Equity Ratio: | |||||||||||||||||||
Common shareholders' equity | $ | 6,985 | $ | 6,868 | $ | 6,951 | $ | 6,038 | $ | 5,877 | |||||||||
Less: | |||||||||||||||||||
Goodwill | 635 | 635 | 635 | 150 | 150 | ||||||||||||||
Other intangible assets | 30 | 32 | 35 | 4 | 5 | ||||||||||||||
Tangible common equity | $ | 6,320 | $ | 6,201 | $ | 6,281 | $ | 5,884 | $ | 5,722 | |||||||||
Total assets | $ | 62,593 | $ | 61,008 | $ | 60,888 | $ | 54,141 | $ | 55,017 | |||||||||
Less: | |||||||||||||||||||
Goodwill | 635 | 635 | 635 | 150 | 150 | ||||||||||||||
Other intangible assets | 30 | 32 | 35 | 4 | 5 | ||||||||||||||
Tangible assets | $ | 61,928 | $ | 60,341 | $ | 60,218 | $ | 53,987 | $ | 54,862 | |||||||||
Common equity ratio | 11.16 | % | 11.26 | % | 11.42 | % | 11.15 | % | 10.68 | % | |||||||||
Tangible common equity ratio | 10.21 | 10.27 | 10.43 | 10.90 | 10.43 | ||||||||||||||
Tangible Common Equity per Share of Common Stock: | |||||||||||||||||||
Common shareholders' equity | $ | 6,985 | $ | 6,868 | $ | 6,951 | $ | 6,038 | $ | 5,877 | |||||||||
Tangible common equity | 6,320 | 6,201 | 6,281 | 5,884 | 5,722 | ||||||||||||||
Shares of common stock outstanding (in millions) | 197 | 197 | 199 | 177 | 177 | ||||||||||||||
Common shareholders' equity per share of common stock | $ | 35.44 | $ | 34.80 | $ | 34.94 | $ | 34.15 | $ | 33.25 | |||||||||
Tangible common equity per share of common stock | 32.06 | 31.42 | 31.57 | 33.28 | 32.37 | ||||||||||||||
(a) Tier 1 capital and risk-weighted assets as defined by regulation.
(b) March 31, 2012 Tier 1 capital and risk-weighted assets are estimated.
The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations. The tangible common equity removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets and tangible common equity per share of common stock removes the effect of intangible assets from common shareholders equity per share of common stock. Comerica believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.
22
