Exhibit

EX-99.1 2 a2019q3pressrelease-ex991.htm EXHIBIT 99.1 Exhibit

Dallas, TX/October 16, 2019

THIRD QUARTER 2019 NET INCOME OF $292 MILLION, $1.96 PER SHARE

Broad-based Fee Income Growth and Expense Discipline Kept Efficiency Ratio Below 52 percent

Average Deposits Increased More Than $700 Million During the Quarter

“Throughout our 170-year history, we have managed through many different economic, credit and interest rate cycles,” said Curtis C. Farmer, president and chief executive officer. “Our third quarter results demonstrate our ability to drive a strong return on equity of 16 percent and a return on assets of 1.6 percent, despite recent declines in interest rates. Broad-based fee income growth, solid credit quality, the benefit of discrete tax adjustments and continued active capital management were positive contributors to our performance. In addition, our careful cost control helped keep our efficiency ratio low at under 52 percent. We remain focused on building relationships within our diverse footprint and maintaining our credit and expense discipline in order to continue to produce strong performance metrics.”



(dollar amounts in millions, except per share data)	3rd Qtr '19			2nd Qtr '19			3rd Qtr '18
FINANCIAL RESULTS
Net interest income	$	586		$	603		$	599
Provision for credit losses	35			44			—
Noninterest income	256			250			234
Noninterest expenses	435			424			452
Pre-tax income	372			385			381
Provision for income taxes	80			87			63
Net income	$	292		$	298		$	318

Diluted earnings per share	$	1.96		$	1.94		$	1.86

Average loans	50,887			50,963			48,584
Average deposits	55,716			54,995			56,093

Return on average assets	1.61		%	1.68		%	1.77		%
Return on average shareholders' equity	15.97			16.41			16.15
Efficiency ratio (a)	51.54			49.65			52.93
Net interest margin	3.52			3.67			3.60
Common equity Tier 1 capital ratio (b)	9.92			10.18			11.68
Common equity ratio	9.88			10.10			10.90
Shareholders' equity per share	$	49.96		$	48.89		$	46.92
Tangible equity per share (c)	45.52			44.61			43.05


(a)	Noninterest expenses as a percentage of net interest income and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares.


(b)	September 30, 2019 ratio is estimated.

Third Quarter 2019 Compared to Second Quarter 2019 Overview

Balance sheet items discussed in terms of average balances.

Loans were stable at $50.9 billion.


•	Change in portfolio mix reflected seasonality, including an increase in Mortgage Banker Finance offset by decreases in National Dealer Services and general Middle Market. Mortgage Banker Finance also benefited from elevated refinancing activity.


•	Loan yields decreased 17 basis points to 4.83 percent, primarily due to lower short-term interest rates.

Deposits increased $721 million, or 1 percent, to $55.7 billion.


•	Interest-bearing deposits increased $768 million. Noninterest-bearing deposits were stable.


•	Interest-bearing deposit costs increased 5 basis points to 99 basis points due to continued growth in relationship-based deposits.

Net interest income decreased $17 million to $586 million.


•	The benefit from one additional day in the quarter was more than offset by the net impact of lower interest rates.

Provision for credit losses decreased $9 million to $35 million.


•	Net credit-related charge-offs were $42 million, or 0.33 percent of average loans, including Energy net charge-offs of $34 million.


•	The allowance for loan losses decreased $5 million to $652 million, or 1.27 percent of total loans.

Noninterest income increased $6 million to $256 million.


•	Reflected increases of $2 million each in commercial lending fees and card fees, as well as smaller increases in other categories.


•	Deferred compensation asset returns were $3 million (offset in noninterest expenses) compared to none in second quarter 2019.

Noninterest expenses increased $11 million to $435 million.


•	Salaries and benefits expense increased $8 million, primarily reflecting increases in deferred compensation expense (offset in noninterest income) and benefits, as well as the impact of one additional day in the quarter.


•	Also included increases of $2 million each in occupancy and software expenses.

Provision for income taxes decreased $7 million.


•	Included discrete tax benefits of $5 million primarily resulting from deferred tax adjustments related to annual state tax filings.

Capital position remained solid with a common equity Tier 1 capital ratio of 9.92 percent.


•	Returned a total of $467 million to shareholders, including dividends and the repurchase of $370 million of common stock (5.7 million shares) under the share repurchase program.

Third Quarter 2019 Compared to Third Quarter 2018 Overview

Balance sheet items discussed in terms of average balances.

Loans increased $2.3 billion, or 5 percent.


•	Reflected increases in Energy, Mortgage Banker Finance, National Dealer Services and general Middle Market.


•	Loan yields increased 9 basis points, primarily reflecting higher short-term interest rates.

Deposits remained stable at $55.7 billion.


•	Interest-bearing deposits increased $2.5 billion, primarily reflecting increases of $1.1 billion in other time deposits, $912 million in money market and interest-bearing checking deposits and $541 million in customer certificates of deposits.


•	Noninterest-bearing deposits decreased $2.8 billion. The decline in noninterest-bearing deposits was primarily the result of customers shifting balances to interest-bearing deposits and utilizing their deposits to fund growth, acquisitions and capital expenditures as well as choosing other investment options.


•	Interest-bearing deposit costs increased 48 basis points due to continued management of deposit pricing to attract and retain customers as well as the increase in other time deposits.

Net interest income decreased $13 million.


•	Included increases due to higher loan balances and the impact of higher short-term rates on loans and securities.


•	The increases were more than offset by higher deposit costs, the impact of lower Federal Reserve Bank deposits as well as higher interest-bearing deposits and debt.

Provision for credit losses increased $35 million compared to no provision in third quarter 2018.


•	The provision increase resulted from loan growth and a $191 million increase in total criticized loans.


•	Nonaccrual loans, a component of criticized loans, decreased $10 million.

Excluding a third quarter 2018 loss of $20 million related to securities repositioning, noninterest income increased $2 million.


•	Primarily reflected increases of $6 million in card fees and $2 million each in fiduciary income and commercial lending fees, partially offset by decreases of $2 million each in customer derivative income and service charges on deposit accounts as well as smaller decreases in other categories.

Excluding third quarter 2018 restructuring charges of $12 million, noninterest expenses decreased $5 million.


•	Primarily reflected a decrease of $5 million in FDIC insurance expense.

Provision for income taxes increased $17 million.


•	Included $5 million and $23 million in discrete tax benefits primarily resulting from the adjustments to annual state tax filings in third quarter 2019 and a review of certain tax capitalization and recovery positions in third quarter 2018, respectively.

Net Interest Income

Balance sheet items presented and discussed in terms of average balances.



(dollar amounts in millions)	3rd Qtr '19			2nd Qtr '19			3rd Qtr '18
Net interest income	$	586		$	603		$	599

Net interest margin	3.52		%	3.67		%	3.60		%

Selected balances:
Total earning assets	$	66,285		$	65,890		$	65,842
Total loans	50,887			50,963			48,584
Total investment securities	12,203			12,091			11,761
Federal Reserve Bank deposits	2,834			2,479			5,180

Total deposits	55,716			54,995			56,093
Total noninterest-bearing deposits	26,351			26,398			29,193
Short-term borrowings	268			927			85
Medium- and long-term debt	7,100			6,712			6,153

Net interest income decreased $17 million, and net interest margin decreased 15 basis points, compared to second quarter 2019.

•

Interest on loans decreased $16 million and reduced net interest margin by 13 basis points. The impact of lower short-term rates (-$26 million, -15 basis points) was partially offset by one additional day in the quarter (+$6 million), negative residual value adjustments to assets in the leasing portfolio in second quarter 2019 (+$2 million, +1 basis point) and an increase in loan fees (+$2 million, +1 basis point).


•	Interest on short-term investments was unchanged and reduced net interest margin by 2 basis points, primarily reflecting lower rates (-$2 million, -1 basis point), partially offset by an increase in lower-yielding deposits with the Federal Reserve Bank (+$2 million, -1 basis point).


•	Interest expense on deposits increased $6 million and reduced net interest margin by 3 basis points, due to higher deposit costs ($4 million, 2 basis points) and higher deposit balances ($2 million, 1 basis point).


•	Interest expense on debt decreased $5 million and increased net interest margin by 3 basis points, due to lower rates ($5 million, 3 basis points).

Credit Quality

“Credit quality remained solid with net charge-offs of $42 million, or 33 basis points, which is within our historical norm of 20 to 40 basis points,” said Farmer. “While charge-offs were higher compared to recent quarters, we do not see this as a trend. Charge-offs of $34 million were a result of additional valuation impairments on select energy credits as capital markets remained soft. Problem assets remained relatively low, with nonperforming assets at only 44 basis points and criticized loans less than 4 percent of total loans. We continue to maintain a reserve of 1.27 percent, including healthy reserves for Energy.”



(dollar amounts in millions)	3rd Qtr '19			2nd Qtr '19			3rd Qtr '18
Credit-related charge-offs	$	61		$	44		$	25
Recoveries	19			11			10
Net credit-related charge-offs	42			33			15
Net credit-related charge-offs/Average total loans	0.33		%	0.26		%	0.13		%

Provision for credit losses	$	35		$	44		$	—

Nonperforming loans	226			230			239
Nonperforming assets (NPAs)	229			233			240
NPAs/Total loans and foreclosed property	0.44		%	0.45		%	0.49		%

Loans past due 90 days or more and still accruing	$	31		$	17		$	28

Allowance for loan losses	652			657			664
Allowance for credit losses on lending-related commitments (a)	29			31			33
Total allowance for credit losses	681			688			697

Allowance for loan losses/Period-end total loans	1.27		%	1.27		%	1.35		%
Allowance for loan losses/Nonperforming loans	2.9x			2.9x			2.8x


(a)	Included in accrued expenses and other liabilities on the Consolidated Balance Sheets.


•	The allowance for loan losses decreased $5 million to $652 million at September 30, 2019, or 1.27 percent of total loans, reflecting increased Energy reserves offset by continued strong credit quality in the remainder of the portfolio.


•	Criticized loans were $1.9 billion, or 3.6 percent of total loans, at September 30, 2019. Criticized loans are generally consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities.


•	Net charge-offs of $42 million or 33 basis points of average loans.


◦	Net charge-offs from Energy loans were $34 million, compared to $25 million in the second quarter.


◦	Excluding Energy, net charge-offs as a percentage of average loans were 6 basis points


•	Nonperforming assets decreased $4 million to $229 million at September 30, 2019, compared to $233 million at June 30, 2019. Nonperforming assets as a percentage of total loans and foreclosed property decreased to 0.44 percent, compared to 0.45 percent at June 30, 2019.


•	Energy business line loans were $2.4 billion, or 4.70 percent of total loans at September 30, 2019.

Fourth Quarter 2019 Outlook

For the fourth quarter 2019 compared to third quarter 2019, management expects the following:


•	Average loans stable, reflecting growth in several lines of business, including a seasonal increase in National Dealer Services, offset by a decrease in Mortgage Banker Finance due to seasonality and lower refinancing activity.


•	Average deposits stable with continued focus on attracting and retaining relationship-based deposits.


•	Decline in net interest income due to the net impact of lower interest rates of approximately $35 million (includes a 25 basis point anticipated reduction in the federal funds rate in December 2019), as well as lower interest recoveries and loan fees from elevated third quarter levels.


•	Provision for credit losses of $25 million to $45 million and net charge-offs to remain low, with continued solid credit quality.


•	Noninterest income relatively stable, excluding the impact of deferred compensation asset returns, with higher syndication fees and fiduciary income in third quarter 2019 that are unlikely to repeat.


•	Noninterest expenses modestly higher, reflecting higher outside processing expenses, technology expenditures as well as seasonal and inflationary pressures.


•	Income tax expense to be approximately 23 percent of pre-tax income.


•	Common equity Tier 1 capital ratio target of approximately 10 percent with continued active capital management.

Full-Year 2019 Outlook Update

Consistent with the fourth quarter outlook, management now expects the following for full-year 2019 compared to full-year 2018:


•	Growth in average loans of 4 percent.


•	Decline in average deposits of 1 to 2 percent.


•	Net interest income stable to 1 percent lower (includes a 25 basis point anticipated reduction in the federal funds rate in December 2019).


•	Provision for credit losses of 15 to 20 basis points of total loans.


•	Growth in noninterest income of greater than 2 percent.


•	Stable noninterest expenses excluding 2018 restructuring charges of $53 million.

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. Comerica also provides market segment results for three primary geographic markets: Michigan, California and Texas. In addition to the three primary geographic markets, Other Markets is also reported as a market segment. Other Markets includes Florida, Arizona, the International Finance division and businesses that have a significant presence outside of the three primary geographic markets. For a summary of business segment and geographic market quarterly results, see the Business Segment Financial Results and Market Segment Financial Results tables included later in this report. From time to time, Comerica may make reclassifications among the segments to reflect management's current view of the segments, and methodologies may be modified as the management accounting system is enhanced and changes occur in the organizational structure and/or product lines. The financial results provided are based on the internal business unit and geographic market structures of Comerica and methodologies in effect at September 30, 2019. A discussion of business segment and geographic market year-to-date results will be included in Comerica's Third Quarter 2019 Form 10-Q.

Conference Call and Webcast

Comerica will host a conference call to review third quarter 2019 financial results at 7 a.m. CT Wednesday, October 16, 2019. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (Event ID No. 9596359). The call and supplemental financial information can also be accessed via Comerica's "Investor Relations" page at www.comerica.com. A replay of the Webcast can 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.

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 track,” “trend,” “objective,” “looks forward,” “projects,” “models” 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 as well as 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; operational, systems or infrastructure failures; reliance on other companies to provide certain key components of business infrastructure; cybersecurity risks; whether Comerica may achieve opportunities for revenue enhancements and efficiency improvements under the GEAR Up initiative, or changes in the scope or assumptions underlying the GEAR Up initiative; Comerica's ability to maintain adequate sources of funding and liquidity; the effects of more stringent capital requirements; declines or other changes in the businesses or industries of Comerica's customers; unfavorable developments concerning credit quality; changes in regulation or oversight; heightened legislative and regulatory focus on cybersecurity and data privacy; fluctuations in interest rates and their impact on deposit pricing; transitions away from LIBOR towards new interest rate benchmarks; reductions in Comerica's credit rating; damage to Comerica's reputation; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; competitive product and pricing pressures among financial institutions within Comerica's markets; the interdependence of financial service companies; the implementation of Comerica's strategies and business initiatives; changes in customer behavior; management's ability to maintain and expand customer relationships; the effectiveness of methods of reducing risk exposures; the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; the impacts of future legislative, administrative or judicial changes to tax regulations; any future strategic acquisitions or divestitures; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings or determinations; losses due to fraud; the effects of terrorist activities and other hostilities; changes in accounting standards; the critical nature of Comerica's accounting policies; controls and procedures failures; and the volatility of Comerica’s stock price. Comerica cautions that the foregoing list of factors is not all-inclusive. 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, 2018. 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 Contacts:	Investor Contacts:
Wendy Bridges	Darlene P. Persons
(214) 462-4443	(214) 462-6831

Louis H. Mora	Chelsea R. Smith
(214) 462-6669	(214) 462-6834



CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
Comerica Incorporated and Subsidiaries

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
(in millions, except per share data)	2019			2019			2018			2019			2018
PER COMMON SHARE AND COMMON STOCK DATA
Diluted net income	$	1.96		$	1.94		$	1.86		$	6.02		$	5.32
Cash dividends declared	0.67			0.67			0.60			2.01			1.24

Average diluted shares (in thousands)	148,079			153,189			170,057			153,562			172,862
PERFORMANCE RATIOS
Return on average common shareholders' equity	15.97		%	16.41		%	16.15		%	16.94		%	15.64		%
Return on average assets	1.61			1.68			1.77			1.75			1.75
Efficiency ratio (a)	51.54			49.65			52.93			50.66			54.12
CAPITAL
Common equity tier 1 capital (b)	$	6,892		$	7,060		$	7,750
Risk-weighted assets (b)	69,479			69,371			66,344
Common shareholders' equity per share of common stock	49.96			48.89			46.92
Tangible common equity per share of common stock	45.52			44.61			43.05
Common equity tier 1 and tier 1 risk-based capital ratio (b)	9.92		%	10.18		%	11.68		%
Total risk-based capital ratio (b)	11.91			12.17			13.76
Leverage ratio (b)	9.61			9.90			10.85
Common equity ratio	9.88			10.10			10.90
Tangible common equity ratio (c)	9.09			9.30			10.09
AVERAGE BALANCES
Commercial loans	$	32,329		$	32,607		$	30,371		$	32,135		$	30,494
Real estate construction loans	3,344			3,319			3,198			3,301			3,152
Commercial mortgage loans	9,264			9,060			9,084			9,108			9,158
Lease financing	578			546			464			548			462
International loans	1,007			1,025			1,072			1,015			1,017
Residential mortgage loans	1,920			1,943			1,962			1,943			1,988
Consumer loans	2,445			2,463			2,433			2,464			2,473
Total loans	50,887			50,963			48,584			50,514			48,744

Earning assets	66,285			65,890			65,842			65,604			65,326
Total assets	71,736			71,252			71,210			70,927			70,689

Noninterest-bearing deposits	26,351			26,398			29,193			26,539			29,457
Interest-bearing deposits	29,365			28,597			26,900			28,370			26,547
Total deposits	55,716			54,995			56,093			54,909			56,004

Common shareholders' equity	7,254			7,285			7,817			7,332			7,907
NET INTEREST INCOME
Net interest income	$	586		$	603		$	599		$	1,795		$	1,738
Net interest margin	3.52		%	3.67		%	3.60		%	3.66		%	3.54		%
CREDIT QUALITY
Total nonperforming assets	$	229		$	233		$	240

Loans past due 90 days or more and still accruing	31			17			28

Net credit-related charge-offs	42			33			15			$	86		$	40

Allowance for loan losses	652			657			664
Allowance for credit losses on lending-related commitments	29			31			33
Total allowance for credit losses	681			688			697

Allowance for loan losses as a percentage of total loans	1.27		%	1.27		%	1.35		%
Net credit-related charge-offs as a percentage of average total loans	0.33			0.26			0.13			0.22		%	0.11		%
Nonperforming assets as a percentage of total loans and foreclosed property	0.44			0.45			0.49
Allowance for loan losses as a percentage of total nonperforming loans	2.9x			2.9x			2.8x
OTHER KEY INFORMATION
Number of banking centers	436			436			435
Number of employees - full time equivalent	7,725			7,693			7,834


(a)	Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares.


(b)	September 30, 2019 ratios are estimated.


(c)	See Reconciliation of Non-GAAP Financial Measures.



CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries

	September 30,			June 30,			December 31,			September 30,
(in millions, except share data)	2019			2019			2018			2018
	(unaudited)			(unaudited)						(unaudited)
ASSETS
Cash and due from banks	$	1,229		$	1,029		$	1,390		$	945

Interest-bearing deposits with banks	2,888			2,552			3,171			4,894
Other short-term investments	146			140			134			136

Investment securities available-for-sale	12,429			12,338			12,045			11,862

Commercial loans	32,890			33,326			31,976			30,889
Real estate construction loans	3,377			3,292			3,077			3,158
Commercial mortgage loans	9,234			9,217			9,106			9,019
Lease financing	578			575			507			471
International loans	1,055			1,024			1,013			1,090
Residential mortgage loans	1,906			1,924			1,970			1,947
Consumer loans	2,451			2,443			2,514			2,436
Total loans	51,491			51,801			50,163			49,010
Less allowance for loan losses	(652		)	(657		)	(671		)	(664		)
Net loans	50,839			51,144			49,492			48,346

Premises and equipment	467			470			475			472
Accrued income and other assets	4,850			4,864			4,111			4,793
Total assets	$	72,848		$	72,537		$	70,818		$	71,448

LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	27,134		$	27,001		$	28,690		$	29,301

Money market and interest-bearing checking deposits	23,992			22,195			22,560			22,449
Savings deposits	2,156			2,162			2,172			2,192
Customer certificates of deposit	2,853			2,441			2,131			2,051
Other time deposits	647			1,726			—			—
Foreign office time deposits	27			12			8			13
Total interest-bearing deposits	29,675			28,536			26,871			26,705
Total deposits	56,809			55,537			55,561			56,006

Short-term borrowings	51			1,733			44			84
Accrued expenses and other liabilities	1,477			1,386			1,243			1,154
Medium- and long-term debt	7,311			6,558			6,463			6,418
Total liabilities	65,648			65,214			63,311			63,662

Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares	1,141			1,141			1,141			1,141
Capital surplus	2,172			2,168			2,148			2,144
Accumulated other comprehensive loss	(336		)	(382		)	(609		)	(611		)
Retained earnings	9,369			9,176			8,781			8,587
Less cost of common stock in treasury - 84,028,400 shares at 9/30/19, 78,367,534 shares at 6/30/19, 68,081,176 shares as 12/31/18 and 62,224,198 shares at 9/30/18	(5,146		)	(4,780		)	(3,954		)	(3,475		)
Total shareholders' equity	7,200			7,323			7,507			7,786
Total liabilities and shareholders' equity	$	72,848		$	72,537		$	70,818		$	71,448



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in millions, except per share data)	2019		2018			2019			2018
INTEREST INCOME
Interest and fees on loans	$	619	$	581		$	1,875		$	1,658
Interest on investment securities	75		66			222			194
Interest on short-term investments	17		28			51			63
Total interest income	711		675			2,148			1,915
INTEREST EXPENSE
Interest on deposits	73		35			192			79
Interest on short-term borrowings	2		1			9			1
Interest on medium- and long-term debt	50		40			152			97
Total interest expense	125		76			353			177
Net interest income	586		599			1,795			1,738
Provision for credit losses	35		—			66			(17		)
Net interest income after provision for credit losses	551		599			1,729			1,755
NONINTEREST INCOME
Card fees	67		61			195			180
Service charges on deposit accounts	51		53			153			160
Fiduciary income	53		51			154			155
Commercial lending fees	23		21			66			62
Foreign exchange income	11		12			33			36
Letter of credit fees	10		9			29			30
Bank-owned life insurance	11		11			31			29
Brokerage fees	7		7			21			20
Net securities losses	—		(20		)	(8		)	(19		)
Other noninterest income	23		29			70			73
Total noninterest income	256		234			744			726
NONINTEREST EXPENSES
Salaries and benefits expense	253		254			763			759
Outside processing fee expense	66		65			194			190
Occupancy expense	39		38			113			113
Software expense	30		32			87			95
Equipment expense	13		12			37			34
FDIC insurance expense	6		11			17			36
Advertising expense	10		8			24			22
Restructuring charges	—		12			—			39
Other noninterest expenses	18		20			57			58
Total noninterest expenses	435		452			1,292			1,346
Income before income taxes	372		381			1,181			1,135
Provision for income taxes	80		63			252			210
NET INCOME	292		318			929			925
Less income allocated to participating securities	2		2			5			6
Net income attributable to shares	$	290	$	316		$	924		$	919
Earnings per share:
Basic	$	1.98	$	1.89		$	6.08		$	5.41
Diluted	1.96		1.86			6.02			5.32

Comprehensive income	338		296			1,202			764

Cash dividends declared on stock	97		100			302			210
Cash dividends declared per share	0.67		0.60			2.01			1.24



CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries

	Third		Second		First			Fourth		Third			Third Quarter 2019 Compared to:
	Quarter		Quarter		Quarter			Quarter		Quarter			Second Quarter 2019					Third Quarter 2018
(in millions, except per share data)	2019		2019		2019			2018		2018			Amount			Percent		Amount			Percent
INTEREST INCOME
Interest and fees on loans	$	619	$	635	$	621		$	604	$	581		$	(16	)	(3	)%	$	38		7	%
Interest on investment securities	75		75		72			71		66			—			—		9			13
Interest on short-term investments	17		17		17			29		28			—			—		(11		)	(40	)
Total interest income	711		727		710			704		675			(16		)	(2	)	36			5
INTEREST EXPENSE
Interest on deposits	73		67		52			43		35			6			9		38			n/m
Interest on short-term borrowings	2		6		1			—		1			(4		)	(72	)	1			n/m
Interest on medium- and long-term debt	50		51		51			47		40			(1		)	(2	)	10			23
Total interest expense	125		124		104			90		76			1			1		49			64
Net interest income	586		603		606			614		599			(17		)	(3	)	(13		)	(2	)
Provision for credit losses	35		44		(13		)	16		—			(9		)	(21	)	35			n/m
Net interest income after provision for credit losses	551		559		619			598		599			(8		)	(1	)	(48		)	(8	)
NONINTEREST INCOME
Card fees	67		65		63			64		61			2			2		6			10
Service charges on deposit accounts	51		51		51			51		53			—			—		(2		)	(4	)
Fiduciary income	53		52		49			51		51			1			2		2			5
Commercial lending fees	23		21		22			23		21			2			8		2			9
Foreign exchange income	11		11		11			11		12			—			—		(1		)	(6	)
Letter of credit fees	10		10		9			10		9			—			—		1			2
Bank-owned life insurance	11		11		9			10		11			—			—		—			—
Brokerage fees	7		7		7			7		7			—			—		—			—
Net securities losses	—		—		(8		)	—		(20		)	—			—		20			n/m
Other noninterest income	23		22		25			23		29			1			6		(6		)	(18	)
Total noninterest income	256		250		238			250		234			6			3		22			10
NONINTEREST EXPENSES
Salaries and benefits expense	253		245		265			250		254			8			4		(1		)	(1	)
Outside processing fee expense	66		65		63			65		65			1			1		1			1
Occupancy expense	39		37		37			39		38			2			6		1			3
Software expense	30		28		29			30		32			2			6		(2		)	(6	)
Equipment expense	13		12		12			14		12			1			1		1			1
FDIC insurance expense	6		6		5			6		11			—			—		(5		)	(45	)
Advertising expense	10		9		5			8		8			1			19		2			21
Restructuring charges	—		—		—			14		12			—			—		(12		)	n/m
Other noninterest expenses	18		22		17			22		20			(4		)	(15	)	(2		)	(1	)
Total noninterest expenses	435		424		433			448		452			11			3		(17		)	(4	)
Income before income taxes	372		385		424			400		381			(13		)	(3	)	(9		)	(2	)
Provision for income taxes	80		87		85			90		63			(7		)	(7	)	17			28
NET INCOME	292		298		339			310		318			(6		)	(2	)	(26		)	(8	)
Less income allocated to participating securities	2		1		2			2		2			1			2		—			—
Net income attributable to shares	$	290	$	297	$	337		$	308	$	316		$	(7	)	(2	)%	$	(26	)	(8	)%
Earnings per share:
Basic	$	1.98	$	1.95	$	2.14		$	1.91	$	1.89		$	0.03		1	%	$	0.09		5	%
Diluted	1.96		1.94		2.11			1.88		1.86			0.02			1		0.10			5

Comprehensive income	338		429		435			312		296			(91		)	(21	)	42			14

Cash dividends declared on stock	97		100		105			99		100			(3		)	(3	)	(3		)	(3	)
Cash dividends declared per share	0.67		0.67		0.67			0.60		0.60			—			—		0.07			12

n/m - not meaningful



ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries

	2019									2018
(in millions)	3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr

Balance at beginning of period	$	657		$	647		$	671		$	664		$	677

Loan charge-offs:
Commercial	59			42			18			19			23
Commercial mortgage	—			—			1			2			—
International	—			1			—			—			1
Residential mortgage	1			—			—			—			—
Consumer	1			1			1			—			1
Total loan charge-offs	61			44			20			21			25

Recoveries on loans previously charged-off:
Commercial	17			7			8			8			8
Commercial mortgage	—			3			—			—			1
Residential mortgage	1			—			—			1			—
Consumer	1			1			1			1			1
Total recoveries	19			11			9			10			10
Net loan charge-offs	42			33			11			11			15
Provision for loan losses	37			43			(13		)	19			1
Foreign currency translation adjustment	—			—			—			(1		)	1
Balance at end of period	$	652		$	657		$	647		$	671		$	664

Allowance for loan losses as a percentage of total loans	1.27		%	1.27		%	1.29		%	1.34		%	1.35		%

Net loan charge-offs as a percentage of average total loans	0.33			0.26			0.08			0.09			0.13



ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited)
Comerica Incorporated and Subsidiaries

	2019							2018
(in millions)	3rd Qtr			2nd Qtr		1st Qtr		4th Qtr			3rd Qtr

Balance at beginning of period	$	31		$	30	$	30	$	33		$	34
Add: Provision for credit losses on lending-related commitments	(2		)	1		—		(3		)	(1		)
Balance at end of period	$	29		$	31	$	30	$	30		$	33



NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries

	2019									2018
(in millions)	3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr

SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial	$	152		$	155		$	114		$	141		$	149
Commercial mortgage	13			12			16			20			22
Lease financing	—			1			2			2			2
International	2			3			3			3			4
Total nonaccrual business loans	167			171			135			166			177
Retail loans:
Residential mortgage	36			35			37			36			34
Consumer:
Home equity	17			18			19			19			19
Total nonaccrual retail loans	53			53			56			55			53
Total nonaccrual loans	220			224			191			221			230
Reduced-rate loans	6			6			7			8			9
Total nonperforming loans	226			230			198			229			239
Foreclosed property	3			3			1			1			1
Total nonperforming assets	$	229		$	233		$	199		$	230		$	240

Nonperforming loans as a percentage of total loans	0.44		%	0.44		%	0.39		%	0.46		%	0.49		%
Nonperforming assets as a percentage of total loans and foreclosed property	0.44			0.45			0.40			0.46			0.49
Allowance for loan losses as a multiple of total nonperforming loans	2.9x			2.9x			3.3x			2.9x			2.8x
Loans past due 90 days or more and still accruing	$	31		$	17		$	24		$	16		$	28

ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of period	$	224		$	191		$	221		$	230		$	254
Loans transferred to nonaccrual (a)	85			93			4			42			35
Nonaccrual loan gross charge-offs	(61		)	(44		)	(20		)	(21		)	(25		)
Loans transferred to accrual status (a)	—			—			—			(3		)	—
Nonaccrual loans sold	—			(5		)	—			(5		)	(9		)
Payments/Other (b)	(28		)	(11		)	(14		)	(22		)	(25		)
Nonaccrual loans at end of period	$	220		$	224		$	191		$	221		$	230
(a) Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(b) 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.



ANALYSIS OF NET INTEREST INCOME (unaudited)
Comerica Incorporated and Subsidiaries

	Nine Months Ended
	September 30, 2019							September 30, 2018
	Average					Average		Average					Average
(dollar amounts in millions)	Balance			Interest		Rate		Balance			Interest		Rate

Commercial loans	$	32,135		$	1,191	4.97	%	$	30,494		$	1,037	4.54	%
Real estate construction loans	3,301			140		5.67		3,152			120		5.08
Commercial mortgage loans	9,108			342		5.02		9,158			315		4.61
Lease financing	548			14		3.34		462			13		3.85
International loans	1,015			40		5.26		1,017			37		4.88
Residential mortgage loans	1,943			56		3.87		1,988			56		3.76
Consumer loans	2,464			92		4.98		2,473			80		4.32
Total loans	50,514			1,875		4.96		48,744			1,658		4.55

Mortgage-backed securities	9,320			172		2.44		9,109			158		2.25
Other investment securities	2,764			50		2.42		2,714			36		1.72
Total investment securities	12,084			222		2.43		11,823			194		2.13

Interest-bearing deposits with banks	2,866			49		2.29		4,625			63		1.82
Other short-term investments	140			2		1.32		134			—		0.90
Total earning assets	65,604			2,148		4.37		65,326			1,915		3.90

Cash and due from banks	896							1,200
Allowance for loan losses	(668		)					(702		)
Accrued income and other assets	5,095							4,865
Total assets	$	70,927						$	70,689

Money market and interest-bearing checking deposits	$	23,006		157		0.91		$	22,219		72		0.43
Savings deposits	2,164			1		0.04		2,205			1		0.04
Customer certificates of deposit	2,383			19		1.09		2,090			6		0.40
Other time deposits	804			15		2.45		3			—		1.86
Foreign office time deposits	13			—		1.51		30			—		1.17
Total interest-bearing deposits	28,370			192		0.91		26,547			79		0.40

Short-term borrowings	472			9		2.39		59			1		1.79
Medium- and long-term debt	6,837			152		2.92		5,647			97		2.27
Total interest-bearing sources	35,679			353		1.31		32,253			177		0.73

Noninterest-bearing deposits	26,539							29,457
Accrued expenses and other liabilities	1,377							1,072
Total shareholders' equity	7,332							7,907
Total liabilities and shareholders' equity	$	70,927						$	70,689

Net interest income/rate spread				$	1,795	3.06					$	1,738	3.17

Impact of net noninterest-bearing sources of funds						0.60							0.37
Net interest margin (as a percentage of average earning assets)						3.66	%						3.54	%



ANALYSIS OF NET INTEREST INCOME (unaudited)
Comerica Incorporated and Subsidiaries

	Three Months Ended
	September 30, 2019							June 30, 2019							September 30, 2018
	Average					Average		Average					Average		Average					Average
(dollar amounts in millions)	Balance			Interest		Rate		Balance			Interest		Rate		Balance			Interest		Rate

Commercial loans	$	32,329		$	392	4.82	%	$	32,607		$	405	5.00	%	$	30,371		$	365	4.74	%
Real estate construction loans	3,344			47		5.53		3,319			47		5.74		3,198			43		5.38
Commercial mortgage loans	9,264			112		4.82		9,060			116		5.12		9,084			110		4.84
Lease financing	578			6		3.83		546			3		2.32		464			4		3.69
International loans	1,007			13		5.12		1,025			14		5.30		1,072			13		4.99
Residential mortgage loans	1,920			18		3.84		1,943			19		3.92		1,962			18		3.71
Consumer loans	2,445			31		4.92		2,463			31		5.02		2,433			28		4.49
Total loans	50,887			619		4.83		50,963			635		5.00		48,584			581		4.74

Mortgage-backed securities	9,408			58		2.45		9,326			58		2.45		9,063			54		2.30
Other investment securities	2,795			17		2.45		2,765			17		2.47		2,698			12		1.72
Total investment securities	12,203			75		2.45		12,091			75		2.45		11,761			66		2.17

Interest-bearing deposits with banks	3,049			16		2.13		2,694			16		2.37		5,362			28		2.03
Other short-term investments	146			1		1.28		142			1		1.34		135			—		1.04
Total earning assets	66,285			711		4.26		65,890			727		4.42		65,842			675		4.05

Cash and due from banks	864							900							1,107
Allowance for loan losses	(673		)					(660		)					(681		)
Accrued income and other assets	5,260							5,122							4,942
Total assets	$	71,736						$	71,252						$	71,210

Money market and interest-bearing checking deposits	$	23,485		57		0.97		$	22,913		53		0.93		$	22,573		32		0.56
Savings deposits	2,155			1		0.04		2,169			—		0.03		2,208			1		0.05
Customer certificates of deposit	2,627			8		1.30		2,346			7		1.10		2,086			2		0.48
Other time deposits	1,085			7		2.46		1,156			7		2.46		8			—		1.86
Foreign office time deposits	13			—		1.45		13			—		1.54		25			—		1.25
Total interest-bearing deposits	29,365			73		0.99		28,597			67		0.94		26,900			35		0.51

Short-term borrowings	268			2		2.29		927			6		2.42		85			1		1.95
Medium- and long-term debt	7,100			50		2.71		6,712			51		3.00		6,153			40		2.55
Total interest-bearing sources	36,733			125		1.33		36,236			124		1.36		33,138			76		0.90

Noninterest-bearing deposits	26,351							26,398							29,193
Accrued expenses and other liabilities	1,398							1,333							1,062
Total shareholders' equity	7,254							7,285							7,817
Total liabilities and shareholders' equity	$	71,736						$	71,252						$	71,210

Net interest income/rate spread				$	586	2.93					$	603	3.06					$	599	3.15

Impact of net noninterest-bearing sources of funds						0.59							0.61							0.45
Net interest margin (as a percentage of average earning assets)						3.52	%						3.67	%						3.60	%



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 JUNE 30, 2018	170.9		$	1,141	$	2,144		$	(589	)	$	8,374		$	(2,991	)	$	8,079
Net income	—		—		—			—			318			—			318
Other comprehensive loss, net of tax	—		—		—			(22		)	—			—			(22		)
Cash dividends declared on common stock ($0.60 per share)	—		—		—			—			(100		)	—			(100		)
Purchase of common stock	(5.3	)	—		(7		)	—			—			(493		)	(500		)
Net issuance of common stock under employee stock plans	0.2		—		2			—			(3		)	5			4
Net issuance of common stock for warrants	0.1		—		(2		)	—			(2		)	4			—
Share-based compensation	—		—		7			—			—			—			7
BALANCE AT SEPTEMBER 30, 2018	165.9		$	1,141	$	2,144		$	(611	)	$	8,587		$	(3,475	)	$	7,786

BALANCE AT JUNE 30, 2019	149.8		$	1,141	$	2,168		$	(382	)	$	9,176		$	(4,780	)	$	7,323
Net income	—		—		—			—			292			—			292
Other comprehensive income, net of tax	—		—		—			46			—			—			46
Cash dividends declared on common stock ($0.67 per share)	—		—		—			—			(97		)	—			(97		)
Purchase of common stock	(5.7	)	—		—			—			—			(370		)	(370		)
Net issuance of common stock under employee stock plans	—		—		(1		)	—			(2		)	4			1
Share-based compensation	—		—		5			—			—			—			5
BALANCE AT SEPTEMBER 30, 2019	144.1		$	1,141	$	2,172		$	(336	)	$	9,369		$	(5,146	)	$	7,200

BALANCE AT DECEMBER 31, 2017	172.9		$	1,141	$	2,122		$	(451	)	$	7,887		$	(2,736	)	$	7,963
Cumulative effect of change in accounting principles	—		—		—			1			14			—			15
Net income	—		—		—			—			925			—			925
Other comprehensive loss, net of tax	—		—		—			(161		)	—			—			(161		)
Cash dividends declared on common stock ($1.24 per share)	—		—		—			—			(210		)	—			(210		)
Purchase of common stock	(8.7	)	—		(7		)	—			—			(821		)	(828		)
Net issuance of common stock under employee stock plans	1.5		—		(9		)	—			(24		)	74			41
Net issuance of common stock for warrants	0.2		—		(3		)	—			(5		)	8			—
Share-based compensation	—		—		41			—			—			—			41
BALANCE AT SEPTEMBER 30, 2018	165.9		$	1,141	$	2,144		$	(611	)	$	8,587		$	(3,475	)	$	7,786

BALANCE AT DECEMBER 31, 2018	160.1		$	1,141	$	2,148		$	(609	)	$	8,781		$	(3,954	)	$	7,507
Cumulative effect of change in accounting principle	—		—		—			—			(14		)	—			(14		)
Net income	—		—		—			—			929			—			929
Other comprehensive income, net of tax	—		—		—			273			—			—			273
Cash dividends declared on common stock ($2.01 per share)	—		—		—			—			(302		)	—			(302		)
Purchase of common stock	(16.6	)	—		—			—			—			(1,229		)	(1,229		)
Net issuance of common stock under employee stock plans	0.6		—		(13		)	—			(25		)	37			(1		)
Share-based compensation	—		—		37			—			—			—			37
BALANCE AT SEPTEMBER 30, 2019	144.1		$	1,141	$	2,172		$	(336	)	$	9,369		$	(5,146	)	$	7,200



BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries


(dollar amounts in millions)	Business			Retail			Wealth
Three Months Ended September 30, 2019	Bank			Bank			Management			Finance			Other				Total
Earnings summary:
Net interest income (expense)	$	420		$	142		$	47		$	(38	)	$	15			$	586
Provision for credit losses	39			(2		)	(3		)	—			1				35
Noninterest income	140			31			69			12			4				256
Noninterest expenses	199			149			69			(1		)	19				435
Provision (benefit) for income taxes	74			5			12			(8		)	(3		)	(a)	80
Net income (loss)	$	248		$	21		$	38		$	(17	)	$	2			$	292
Net credit-related charge-offs (recoveries)	$	43		$	1		$	(2	)	$	—		$	—			$	42

Selected average balances:
Assets	$	45,459		$	2,871		$	5,032		$	14,392		$	3,982			$	71,736
Loans	43,889			2,114			4,884			—			—				50,887
Deposits	28,917			20,761			3,775			2,049			214				55,716

Statistical data:
Return on average assets (b)	2.17		%	0.39		%	3.01		%	n/m			n/m				1.61		%
Efficiency ratio (c)	35.62			84.54			59.79			n/m			n/m				51.54

	Business			Retail			Wealth
Three Months Ended June 30, 2019	Bank			Bank			Management			Finance			Other				Total
Earnings summary:
Net interest income (expense)	$	420		$	146		$	46		$	(24	)	$	15			$	603
Provision for credit losses	52			1			(5		)	—			(4		)		44
Noninterest income	136			33			68			14			(1		)		250
Noninterest expenses	195			147			67			—			15				424
Provision (benefit) for income taxes	71			7			13			(4		)	—				87
Net income (loss)	$	238		$	24		$	39		$	(6	)	$	3			$	298
Net credit-related charge-offs (recoveries)	$	35		$	—		$	(2	)	$	—		$	—			$	33

Selected average balances:
Assets	$	45,321		$	2,839		$	5,071		$	14,242		$	3,779			$	71,252
Loans	43,926			2,107			4,930			—			—				50,963
Deposits	28,251			20,649			3,740			2,174			181				54,995

Statistical data:
Return on average assets (b)	2.11		%	0.44		%	3.10		%	n/m			n/m				1.68		%
Efficiency ratio (c)	34.98			82.26			58.99			n/m			n/m				49.65

	Business			Retail			Wealth
Three Months Ended September 30, 2018	Bank			Bank			Management			Finance			Other				Total
Earnings summary:
Net interest income (expense)	$	414		$	140		$	46		$	(16	)	$	15			$	599
Provision for credit losses	—			1			1			—			(2		)		—
Noninterest income	137			35			66			(7		)	3				234
Noninterest expenses	211			153			72			(1		)	17				452
Provision (benefit) for income taxes	76			5			10			(8		)	(20		)	(a)	63
Net income (loss)	$	264		$	16		$	29		$	(14	)	$	23			$	318
Net credit-related charge-offs	$	14		$	—		$	1		$	—		$	—			$	15

Selected average balances:
Assets	$	43,165		$	2,621		$	5,068		$	13,696		$	6,660			$	71,210
Loans	41,591			2,057			4,936			—			—				48,584
Deposits	30,286			20,765			3,988			929			125				56,093

Statistical data:
Return on average assets (b)	2.43		%	0.31		%	2.28		%	n/m			n/m				1.77		%
Efficiency ratio (c)	38.24			86.96			63.93			n/m			n/m				52.93


(a)	Included discrete tax benefits of $5 million and $23 million for the three months ended September 30, 2019 and 2018, respectively.


(b)	Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.


(c)	Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares.

n/m - not meaningful



MARKET SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries


(dollar amounts in millions)										Other			Finance
Three Months Ended September 30, 2019	Michigan			California			Texas			Markets			& Other				Total
Earnings summary:
Net interest income (expense)	$	185		$	203		$	125		$	96		$	(23	)		$	586
Provision for credit losses	(1		)	(6		)	50			(9		)	1				35
Noninterest income	74			41			31			94			16				256
Noninterest expenses	139			102			86			90			18				435
Provision (benefit) for income taxes	27			37			5			22			(11		)	(a)	80
Net income (loss)	$	94		$	111		$	15		$	87		$	(15	)		$	292
Net credit-related charge-offs (recoveries)	$	6		$	5		$	34		$	(3	)	$	—			$	42

Selected average balances:
Assets	$	13,213		$	18,726		$	11,462		$	9,961		$	18,374			$	71,736
Loans	12,554			18,393			10,805			9,135			—				50,887
Deposits	20,164			16,725			8,705			7,859			2,263				55,716

Statistical data:
Return on average assets (b)	1.78		%	2.37		%	0.48		%	3.47		%	n/m				1.61		%
Efficiency ratio (c)	53.31			41.64			55.57			47.19			n/m				51.54

										Other			Finance
Three Months Ended June 30, 2019	Michigan			California			Texas			Markets			& Other				Total
Earnings summary:
Net interest income (expense)	$	186		$	208		$	124		$	94		$	(9	)		$	603
Provision for credit losses	(10		)	(4		)	49			13			(4		)		44
Noninterest income	72			40			34			91			13				250
Noninterest expenses	134			99			84			92			15				424
Provision (benefit) for income taxes	30			39			6			16			(4		)		87
Net income (loss)	$	104		$	114		$	19		$	64		$	(3	)		$	298
Net credit-related charge-offs	$	—		$	7		$	26		$	—		$	—			$	33

Selected average balances:
Assets	$	13,239		$	19,228		$	11,342		$	9,422		$	18,021			$	71,252
Loans	12,704			18,928			10,684			8,647			—				50,963
Deposits	19,816			16,325			8,668			7,831			2,355				54,995

Statistical data:
Return on average assets (b)	2.01		%	2.37		%	0.69		%	2.76		%	n/m				1.68		%
Efficiency ratio (c)	52.04			39.96			52.86			49.56			n/m				49.65

										Other			Finance
Three Months Ended September 30, 2018	Michigan			California			Texas			Markets			& Other				Total
Earnings summary:
Net interest income (expense)	$	185		$	200		$	120		$	95		$	(1	)		$	599
Provision for credit losses	4			3			(9		)	4			(2		)		—
Noninterest income	76			43			33			86			(4		)		234
Noninterest expenses	144			106			89			97			16				452
Provision (benefit) for income taxes	25			34			16			16			(28		)	(a)	63
Net income	$	88		$	100		$	57		$	64		$	9			$	318
Net credit-related charge-offs (recoveries)	$	8		$	5		$	3		$	(1	)	$	—			$	15

Selected average balances:
Assets	$	13,055		$	18,349		$	10,263		$	9,187		$	20,356			$	71,210
Loans	12,424			18,074			9,694			8,392			—				48,584
Deposits	20,720			16,894			8,902			8,523			1,054				56,093

Statistical data:
Return on average assets (b)	1.63		%	2.18		%	2.18		%	2.74		%	n/m				1.77		%
Efficiency ratio (c)	54.96			43.10			58.06			54.02			n/m				52.93


(a)	Included discrete tax benefits of $5 million and $23 million for the three months ended September 30, 2019 and 2018, respectively.


(b)	Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.


(c)	Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares.

n/m - not meaningful



RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
Comerica Incorporated and Subsidiaries

Comerica believes non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate the adequacy of equity and our performance trends. Comerica believes the adjusted financial results provide a greater understanding of ongoing operations and enhance the comparability of results with prior periods. Tangible equity is used by Comerica to measure the quality of capital and the return relative to balance sheet risk.



ADJUSTED FINANCIAL RESULTS	Three Months Ended
	September 30,			June 30,			September 30,
(dollar amounts in millions, except per share data)	2019			2019			2018
Noninterest Income:
Noninterest income	$	256		$	250		$	234
Securities repositioning	—			—			20
Adjusted noninterest income	$	256		$	250		$	254
Noninterest Expenses:
Noninterest expenses	$	435		$	424		$	452
Restructuring charges	—			—			(12		)
Adjusted noninterest expenses	$	435		$	424		$	440
Pre-tax Income:
Pre-tax income	$	372		$	385		$	381
Securities repositioning	—			—			20
Restructuring charges	—			—			12
Adjusted pre-tax income	$	372		$	385		$	413
Provision for Income Taxes:
Provision for income taxes	$	80		$	87		$	63
Tax on securities repositioning	—			—			5
Tax on restructuring charges	—			—			3
Discrete tax items	5			—			23
Adjusted provision for income taxes	$	85		$	87		$	94
Net Income:
Net income	$	292		$	298		$	318
Securities repositioning, net of tax	—			—			15
Restructuring charges, net of tax	—			—			9
Discrete tax items	(5		)	—			(23		)
Adjusted net income	$	287		$	298		$	319
Diluted Earnings per Share:
Diluted earnings per share	$	1.96		$	1.94		$	1.86
Securities repositioning, net of tax	—			—			0.09
Restructuring charges, net of tax	—			—			0.05
Discrete tax items	(0.03		)	—			(0.14		)
Adjusted diluted earnings per share	$	1.93		$	1.94		$	1.86
Efficiency Ratio:
Reported	51.54		%	49.65		%	52.93		%
Adjusted	51.54			49.65			51.59

Securities repositioning refers to third quarter 2018 losses incurred on the sale of approximately $1.3 billion of treasury securities that were replaced by higher-yielding treasuries with a similar duration of 3 years. Discrete tax items include benefits from state deferred tax adjustments in third quarter 2019 and benefits from a review of certain tax capitalization and recovery positions in third quarter 2018.



RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) (Continued)
Comerica Incorporated and Subsidiaries



	September 30,			June 30,			September 30,
(dollar amounts in millions)	2019			2019			2018

Tangible Equity Ratio:
Shareholders' equity	$	7,200		$	7,323		$	7,786
Less:
Goodwill	635			635			635
Other intangible assets	4			4			6
Tangible equity	$	6,561		$	6,684		$	7,145

Total assets	$	72,848		$	72,537		$	71,448
Less:
Goodwill	635			635			635
Other intangible assets	4			4			6
Tangible assets	$	72,209		$	71,898		$	70,807

Equity ratio	9.88		%	10.10		%	10.90		%
Tangible equity ratio	9.09			9.30			10.09

Tangible Equity per Share of Stock:
Shareholders' equity	$	7,200		$	7,323		$	7,786
Tangible equity	6,561			6,684			7,145

Shares of stock outstanding (in millions)	144			150			166

Shareholders' equity per share of stock	$	49.96		$	48.89		$	46.92
Tangible equity per share of stock	45.52			44.61			43.05

The tangible equity ratio removes the effect of intangible assets from capital and total assets. Tangible equity per share of stock removes the effect of intangible assets from shareholders' equity per share of stock.