-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HMbPwYjdZI2Gg57jQqSpg/XbrjSnLuXo0Z4wm0wxAk0VYtdNOri+goRlOsjfK6cQ NQ9O5/dWCdbTp3SnzJkHnQ== 0000950124-01-500349.txt : 20010418 0000950124-01-500349.hdr.sgml : 20010418 ACCESSION NUMBER: 0000950124-01-500349 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010417 ITEM INFORMATION: FILED AS OF DATE: 20010417 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMERICA INC /NEW/ CENTRAL INDEX KEY: 0000028412 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 381998421 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-10706 FILM NUMBER: 1604069 BUSINESS ADDRESS: STREET 1: 411 W LAFAYETTE CITY: DETROIT STATE: MI ZIP: 48226-3509 BUSINESS PHONE: 3132229743 MAIL ADDRESS: STREET 1: 411 W LAFAYETTE CITY: DETROIT STATE: MI ZIP: 48226-3509 FORMER COMPANY: FORMER CONFORMED NAME: DETROITBANK CORP DATE OF NAME CHANGE: 19850311 8-K 1 k61756e8-k.txt CURRENT REPORT DATED APRIL 17, 2001 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: April 17, 2001 (Date of earliest event reported) Commission File No.: 1-10706 Comerica Incorporated Delaware 38-1998421 (State of Incorporation) (I.R.S. Employer Identification No.) 500 Woodward Avenue Detroit, Michigan 48226 Address of principal executive offices (Zip Code) (800) 521-1190 Registrant's Telephone Number, including area code (Former name, former address and former fiscal year, if changed since last report) ITEM 9. REGULATION FD DISCLOSURE On April 17, 2001, Comerica Incorporated("Comerica") issued a news release announcing its earnings for the first quarter ended March 31, 2001. The information contained in the news release, which is attached as Exhibit 99.1 to this report, is incorporated herein by reference as permitted by General Instruction G to Form 8-K. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. COMERICA INCORPORATED April 17, 2001 By: /s/ George W. Madison ---------------------------- George W. Madison Executive Vice President, General Counsel and Corporate Secretary EXHIBIT INDEX
Exhibit No. Description - ----------- ------------ 99.1 News release of Comerica Incorporated, dated April 17, 2001.
EX-99.1 2 k61756ex99-1.txt REGULATION FD DISCLOSURE 1 EXHIBIT 99.1 COMERICA REPORTS FIRST QUARTER 2001 EARNINGS - - $0.50 EPS V. $1.08 EPS 1-Q-00 - - $1.21 EPS BEFORE ONE TIME/SPECIAL CHARGES - IMPERIAL RESTRUCTURING CHARGE OF $0.52 PER SHARE; INTEGRATION ON SCHEDULE - ONE-TIME, $0.19 PER SHARE U.K. SUBSIDIARY CHARGE DETROIT/April 17, 2001 -- Comerica Incorporated (NYSE: CMA) today reported first quarter 2001 earnings per share of $0.50, compared with $1.08 for the 2000 first quarter, a decrease of 54 percent. Net income was $94 million, compared with $197 million for 2000. The company's return on common equity was 8.11 percent and its return on assets was 0.76 percent, compared with 20.66 percent and 1.72 percent, respectively, for the 2000 first quarter. All prior period financial information has been restated to reflect the acquisition of Imperial Bancorp, which was completed during the first quarter 2001 and accounted for as a pooling-of-interests. Excluding the previously announced $95 million after-tax restructuring charge for the Imperial merger and the effect of a one-time $34 million after-tax charge related to long-term incentive plans at an unconsolidated subsidiary of Munder Capital Management (the company's investment management subsidiary), net income for the first quarter of 2001 was $223 million, or $1.21 per share. On this basis, Comerica's return on common equity and return on assets were 19.85 percent and 1.81 percent, respectively. "Comerica delivered solid core operating results during the first quarter of 2001, generating continued loan and deposit growth, while maintaining expense discipline and satisfactory credit quality trends. The integration of our recent acquisition of the $7 billion Imperial Bancorp continues on schedule and according to plan," said Eugene A. Miller, chairman, president, and chief executive officer. "A slowing economy and volatility in the securities markets can be expected to slow the pace of earnings growth across the industry; nonetheless, we believe Comerica is well positioned to sustain its evolution into one of the nation's leading middle-market focused financial services providers. - more - 2 COMERICA REPORTS FIRST QUARTER 2001 EARNINGS -- 2 "Given demographic and wealth management trends, the asset and fund management business remains an important component of our long-term strategy to enhance our sources of recurring, noninterest income. However, we are disappointed to report both a special one-time charge related to incentive compensation plans at a foreign subsidiary of Munder, and an additional deferred distribution costs impairment charge of $17 million after-tax related to decreases in the net asset value of technology mutual funds at Munder," Miller added. Net interest income for the first quarter of 2001 totaled $512 million, an increase of $28 million, or 6 percent, from the same period last year. This increase was primarily due to an increase in average business loans of $4 billion, or 11 percent, over last year's first quarter. Adjusting for the divestiture of revolving check credit and bankcard loans in the first quarter of 2000, net interest income increased $37 million, or 8 percent, over the same period last year. The net interest margin was 4.55 percent for the first quarter of 2001, compared with 4.60 percent for the comparable quarter of 2000. Excluding the effect of the divestiture, the net interest margin decreased 2 basis points from the same period in 2000, primarily as a result of the changing mix of funding required to support the company's continued strong pace of commercial lending. Noninterest income was $170 million for the first quarter of 2001, compared with $255 million for the same quarter last year. Noninterest income in the first quarter of 2001 was reduced by the $26 million impairment charge ($17 million after-tax) and a one-time $53 million charge ($34 million after-tax) related to an unconsolidated subsidiary which is discussed more fully below. Noninterest income benefited from securities gains of $24 million, and $11 million of net gains resulting from the purchase and subsequent sale, all within the first quarter, of interest rate derivative contracts which failed to meet Comerica's stringent risk-reduction criteria. Noninterest income in the first quarter of 2000 included a $30 million gain associated with the sale of revolving check credit and bankcard loans mentioned above. Excluding the effect of securities gains, warrant income and large, nonrecurring items and the impact of last year's revolving check credit and bankcard loan sale, noninterest income increased 3 percent in the first quarter 2001 from the first quarter of 2000. - more - 3 COMERICA REPORTS FIRST QUARTER 2001 EARNINGS -- 3 The $26 million pre-tax deferred distribution costs impairment charge at Munder resulted from the company's reassessment of its ability to recover the unamortized cost of the commissions to brokers for selling certain shares, principally shares in Munder's NetNet, International NetNet and Future Technology funds. Net asset values in these technology funds suffered as market conditions weakened significantly following the peak in the first half of 2000. After a fourth quarter 2000 impairment charge of $7 million, this sector of the equity markets declined another 26 percent in the first quarter 2001. This prompted Comerica's current revaluation of expected future cash flows from the funds, which are based on a percentage of assets under management and early redemption fees. Net remaining deferred distribution costs at March 31, 2001, were $54 million. Excluding the impairment charges, investment advisory revenues totaled $17 million in the first quarter of 2001, a decrease of $8 million from the fourth quarter 2000 and $17 million from the first quarter 2000. The decrease is primarily attributable to the decline in the market values of technology-related stocks from their record highs during the first quarter of last year. At March 31, 2001, assets under management at Munder were $44 billion, including $2.9 billion in the NetNet, International NetNet and Future Tech funds. Munder manages and offers 15 wrap-fee products, 24 equity funds, 8 fixed income funds, 6 money market and 2 balanced funds covering a wide array of investment options, including its original menu of "Growth at a Reasonable Price" or "GARP" offerings. The $53 million pre-tax charge is related to long-term incentive plans at a United Kingdom subsidiary, Framlington Holdings Limited, of which Munder is a minority owner. In May 2000, the announcement that the majority owner was being acquired triggered a change-in-control provision which fully vested all options and restricted shares. In March 2001, all outstanding options held by employees were exercised and their shares were sold to Framlington, requiring U.S. accounting recognition of the expense. The pre-tax charge, included in equity in earnings of unconsolidated subsidiaries, reflects Munder's portion of the resulting expense. Noninterest expenses, which included $94 million of the previously announced merger-related restructuring charge, were $450 million in the first quarter of 2001, compared with $367 million in 2000, an increase of 23 percent. Excluding the restructuring charge, noninterest expenses decreased $11 million, or 3 percent, compared with the same quarter last year, primarily due to a decline in revenue-related incentives. -more - 4 COMERICA REPORTS FIRST QUARTER 2001 EARNINGS -- 4 Income tax expense was reduced $7 million for a tax benefit related to the Imperial Bancorp acquisition that was immediately recognizable, but only after Imperial became part of Comerica. The provision for credit losses was $72 million in the first quarter of 2001, an increase of $5 million compared with the first quarter of 2000. Included in the 2001 provision for credit losses is a merger-related charge of $25 million to conform the credit policies of Imperial with Comerica. Net charge-offs for the quarter were $35 million or 0.34 percent of average total loans, compared with $34 million or 0.36 percent in the first quarter of 2000. Nonperforming assets were $476 million or 1.16 percent of loans and other real estate at March 31, 2001, compared with $339 million or 0.84 percent at December 31, 2000, and $230 million or 0.61 percent at March 31, 2000. The increase in nonperforming assets from year-end includes the addition of one $70 million loan to a commercial finance company. The allowance for credit losses as a percent of loans was 1.57 percent at March 31, 2001, a 3 basis point increase from 1.54 percent at March 31, 2000. The level of nonperforming assets currently is expected to trend toward historical averages, in a range of 115 to 130 basis points of total loans and other real estate for the year 2001. Outlook for 2001: Earnings for the full year 2001, excluding the restructuring charge for the Imperial merger, of which $0.52 cents per share was included in the current quarter, and the effect of a one-time $0.19 cents per share charge related to long-term incentive plans at an unconsolidated subsidiary of Munder, are expected to range between $4.75 and $4.95 per share, based on an assessment of current economic conditions, the level of equity markets and interest rates, progress toward business objectives and other factors. Assets totaled $50 billion at March 31, 2001, and $47 billion at March 31, 2000, while common shareholders' equity was $4.4 billion at March 31, 2001, compared to $3.8 billion one year earlier. Shares of common stock outstanding were 178 million at March 31, 2001 and 177 million at March 31, 2000. Total loans were $41 billion at March 31, 2001, compared to $38 billion a year ago. Total deposits were $37 billion at March 31, 2001, compared to $29 billion at March 31, 2000. - more - 5 COMERICA REPORTS FIRST QUARTER 2001 EARNINGS -- 5 A conference call reviewing Comerica's first quarter 2001 financial results will be held at 8:30 a.m. ET today, April 17, 2001. Interested parties may access the conference call by calling (706) 679-5261 (event ID No. 92476). The call is also accessible through the Investor Relations link on Comerica's home page at www.comerica.com. A replay of the conference call will be available approximately two hours following the call through April 24, 2001. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 92476). The replay can also be accessed through the Investor Relations link on Comerica's home page at www.comerica.com. SAFE HARBOR STATEMENT Matters discussed in this news release contain certain forward-looking statements that are based on management's beliefs and assumptions based on information currently known to Comerica's management. Forward-looking statements may include descriptions of plans or objectives of Comerica's management for future or past operations, products or services, and forecasts of the Company's revenues, earnings or other measures of economic performance including statements of profitability of business segments and subsidiaries, estimates of credit quality trends and current integration. Such statements reflect the view of Comerica's management, as of the date of this conference call, with respect to future events and are subject to risks and uncertainties, such as changes in Comerica's plans, objectives, expectations and intentions and do not purport to speak as of any other date. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, the Company's actual results could differ materially from those discussed in this conference call. Factors that could cause or contribute to such differences are changes in interest rates, changes in the industries in which Comerica has a concentration of loans, changes in the level of fee revenues, changes in the accounting treatment of any particular item, the entry of new competitors into the banking industry as a result of the enactment of the Gramm-Leach-Bliley Act of 1999, changes in general economic conditions and related credit and market conditions, difficulties in integrating Imperial Bancorp or retaining key personnel and other factors discussed in Comerica's filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made. Comerica does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. Without limiting the foregoing, Comerica undertakes no obligation to update earnings guidance including any of the factors that influence earnings. Comerica Incorporated is a multi-state financial services provider headquartered in Detroit, with bank subsidiaries in Michigan, California and Texas, banking operations in Florida, and businesses in several other states. Comerica has an investment services affiliate, Munder Capital Management, and operates banking subsidiaries in Canada and Mexico. ###
MEDIA CONTACT: INVESTOR CONTACT: - ------------- ---------------- Sharon R. McMurray Judith S. Love (313) 222-4881 (313) 222-2840
6 CONSOLIDATED FINANCIAL HIGHLIGHTS Comerica Incorporated and Subsidiaries
Three Months Ended (in thousands, except per share data, March 31, December 31, March 31, average balances and ratios) 2001 2000 2000 ----------- ------------ ----------- PER SHARE AND COMMON STOCK DATA Diluted net income $0.50 $0.94 $1.08 Cash dividends declared 0.44 0.40 0.40 Common shareholders' equity (at period end) 24.80 23.98 21.51 Average diluted shares 180,248 179,453 179,232 KEY RATIOS Return on average common equity 8.11% 16.05% 20.66% Return on average assets 0.76% 1.43% 1.72% Average common equity as a percentage of average assets 8.93% 8.70% 8.17% Core capital ratio (March 2001 estimated) 7.36% 7.35% 7.29% Total capital ratio (March 2001 estimated) 11.13% 11.11% 11.00% Leverage ratio (March 2001 estimated) 8.77% 8.74% 8.38% AVERAGE BALANCES (in millions) Commercial loans (including lease financing) $27,764 $26,997 $25,096 International loans 2,603 2,547 2,598 Real estate construction loans 2,955 2,826 2,282 Commercial mortgage loans 5,500 5,275 5,000 Residential mortgage loans 800 810 859 Consumer loans 1,478 1,466 1,408 ----------- ------------ ----------- Total loans $41,100 $39,921 $37,243 Earning assets 45,615 44,586 42,312 Total assets 49,331 48,221 45,697 Interest-bearing deposits 24,167 22,727 20,215 Noninterest-bearing deposits 9,370 9,357 8,612 Total interest-bearing liabilities 34,469 33,650 32,425 Common shareholders' equity 4,407 4,195 3,733 NET INTEREST INCOME Net interest income (fully taxable equivalent basis) $513,340 $520,040 $484,554 Fully taxable equivalent adjustment 1,048 841 959 Net interest margin 4.55% 4.64% 4.60% CREDIT QUALITY Nonaccrual loans $470,478 $331,361 $209,391 Reduced-rate loans 275 2,306 8,888 Other real estate 5,577 5,577 11,357 Total nonperforming assets 476,330 339,244 229,636 Loans 90 days past due 55,260 36,176 40,894 Gross charge-offs 45,327 100,855 37,121 Recoveries 9,916 7,293 3,569 Net charge-offs 35,411 93,562 33,552 Allowance for credit losses as a percentage of total loans 1.57% 1.51% 1.54% Nonperforming assets as a percentage of total loans and other real estate 1.16% 0.84% 0.61% Net loans charged off as a percentage of average total loans 0.34% 0.94% 0.36% Allowance for credit losses as a percentage of total nonperforming assets 135% 179% 253% ADDITIONAL DATA Goodwill $356,925 $366,550 $388,232 Core deposit intangible 7,176 7,883 11,481 Other intangibles 1,215 3,472 4,047 Loan servicing rights 8,470 6,657 6,396 Deferred mutual fund distribution costs 54,045 85,849 87,199 Amortization of intangibles 8,685 9,549 8,731
7 CONSOLIDATED BALANCE SHEETS Comerica Incorporated and Subsidiaries
March 31, December 31, March 31, (in thousands, except share data) 2001 2000 2000 ----------- ----------- ----------- ASSETS Cash and due from banks $ 2,008,803 $ 1,930,682 $ 1,855,110 Short-term investments 1,990,563 1,730,158 1,912,380 Investment securities available for sale 3,207,455 3,890,725 3,583,006 Commercial loans 26,373,429 26,009,336 24,519,861 International loans 2,653,902 2,571,156 2,565,966 Real estate construction loans 2,973,895 2,915,168 2,422,371 Commercial mortgage loans 5,570,134 5,360,601 5,078,245 Residential mortgage loans 793,075 807,064 849,912 Consumer loans 1,472,015 1,477,135 1,407,541 Lease financing 1,088,908 1,029,164 815,293 ----------- ----------- ----------- Total loans 40,925,358 40,169,624 37,659,189 Less allowance for credit losses (644,556) (608,110) (581,482) ----------- ----------- ----------- Net loans 40,280,802 39,561,514 37,077,707 Premises and equipment 360,145 364,246 364,104 Customers' liability on acceptances outstanding 26,917 26,668 17,179 Accrued income and other assets 2,395,541 2,030,063 1,852,333 ----------- ----------- ----------- TOTAL ASSETS $50,270,226 $49,534,056 $46,661,819 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Noninterest-bearing deposits $11,530,699 $10,188,475 $ 9,538,966 Interest-bearing deposits 25,255,219 23,665,808 19,856,778 ----------- ----------- ----------- Total deposits 36,785,918 33,854,283 29,395,744 Short-term borrowings 679,802 2,093,381 4,442,670 Acceptances outstanding 26,917 26,668 17,179 Accrued expenses and other liabilities 819,774 800,386 675,561 Medium- and long-term debt 7,289,301 8,259,179 8,073,259 ----------- ----------- ----------- Total liabilities 45,601,712 45,033,897 42,604,413 Nonredeemable preferred stock - $50 stated value: Authorized - 5,000,000 shares Issued - 5,000,000 shares at 3/31/01, 12/31/00 and 3/31/00 250,000 250,000 250,000 Common stock - $5 par value: Authorized - 325,000,000 shares Issued - 178,337,648 shares at 3/31/01, 177,703,678 shares at 12/31/00 and 177,901,802 shares at 3/31/00 891,688 888,519 889,509 Capital surplus 326,134 301,414 313,493 Unearned employee stock ownership plan - 176,462 shares at 3/31/01 and 12/31/00 and 64,993 shares at 3/31/00 (6,750) (6,750) (3,000) Accumulated other comprehensive income 127,490 12,097 (37,345) Retained earnings 3,086,915 3,085,784 2,714,213 Deferred compensation (6,963) (14,494) (22,321) Less cost of common stock in treasury - 289,397 shares at 12/31/00 and 826,342 shares at 3/31/00 - (16,411) (47,143) ----------- ----------- ----------- Total shareholders' equity 4,668,514 4,500,159 4,057,406 ----------- ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $50,270,226 $49,534,056 $46,661,819 =========== =========== ===========
8 CONSOLIDATED STATEMENTS OF INCOME Comerica Incorporated and Subsidiaries
Three Months Ended --------------------------- March 31, March 31, (in thousands, except per share data) 2001 2000 ----------- ----------- INTEREST INCOME Interest and fees on loans $ 865,333 $ 778,173 Interest on investment securities 64,625 61,447 Interest on short-term investments 10,502 31,799 ----------- ----------- Total interest income 940,460 871,419 INTEREST EXPENSE Interest on deposits 271,927 202,896 Interest on short-term borrowings 39,392 53,940 Interest on medium- and long-term debt 116,849 130,988 ----------- ----------- Total interest expense 428,168 387,824 ----------- ----------- Net interest income 512,292 483,595 Provision for credit losses 72,000 66,894 ----------- ----------- Net interest income after provision for credit losses 440,292 416,701 NONINTEREST INCOME Fiduciary income 45,426 45,199 Investment advisory revenue, net (9,489) 33,829 Service charges on deposit accounts 49,914 45,752 Commercial lending fees 13,854 12,381 Letter of credit fees 12,776 12,857 Warrant income 3,122 7,374 Securities gains 23,744 5,437 Net gain on sales of businesses - 30,484 Equity in earnings of unconsolidated subsidiaries (53,300) 2,927 Other noninterest income 83,935 58,580 ----------- ----------- Total noninterest income 169,982 254,820 NONINTEREST EXPENSES Salaries and employee benefits 206,776 211,827 Net occupancy expense 28,316 27,798 Equipment expense 19,397 18,946 Outside processing fee expense 15,827 14,487 Restructuring charge 94,304 - Customer services 9,258 8,176 Other noninterest expenses 76,099 85,561 ----------- ----------- Total noninterest expenses 449,977 366,795 ----------- ----------- Income before income taxes 160,297 304,726 Provision for income taxes 66,705 107,695 ----------- ----------- NET INCOME $ 93,592 $ 197,031 =========== =========== Net income applicable to common stock $ 89,317 $ 192,756 =========== =========== Basic net income per common share $ 0.50 $ 1.09 Diluted net income per common share $ 0.50 $ 1.08 Cash dividends declared on common stock $ 78,389 $ 62,519 Dividends per common share $ 0.44 $ 0.40
9 CONSOLIDATED QUARTERLY STATEMENTS OF INCOME Comerica Incorporated and Subsidiaries
First Fourth Third Quarter Quarter Quarter (in thousands, except per share data) 2001 2000 2000 -------- -------- -------- INTEREST INCOME Interest and fees on loans $865,333 $898,831 $868,351 Interest on investment securities 64,625 69,688 66,096 Interest on short-term investments 10,502 16,712 14,527 -------- -------- -------- Total interest income 940,460 985,231 948,974 INTEREST EXPENSE Interest on deposits 271,927 277,775 253,737 Interest on short-term borrowings 39,392 48,457 46,936 Interest on medium- and long-term debt 116,849 139,800 144,619 -------- -------- -------- Total interest expense 428,168 466,032 445,292 -------- -------- -------- Net interest income 512,292 519,199 503,682 Provision for credit losses 72,000 88,006 43,300 -------- -------- -------- Net interest income after provision for credit losses 440,292 431,193 460,382 NONINTEREST INCOME Fiduciary income 45,426 46,297 44,643 Investment advisory revenue, net (9,489) 18,431 34,097 Service charges on deposit accounts 49,914 47,848 47,657 Commercial lending fees 13,854 19,288 16,435 Letter of credit fees 12,776 12,491 12,777 Warrant income 3,122 324 16,713 Securities gains 23,744 2,285 1,316 Net gain on sales of businesses - 13,184 4,000 Equity in earnings of unconsolidated subsidiaries (53,300) 717 5,358 Other noninterest income 83,935 55,145 61,005 -------- -------- -------- Total noninterest income 169,982 216,010 244,001 NONINTEREST EXPENSES Salaries and employee benefits 206,776 215,328 215,151 Net occupancy expense 28,316 28,180 27,082 Equipment expense 19,397 19,595 19,160 Outside processing fee expense 15,827 14,363 15,465 Restructuring charge 94,304 - - Customer services 9,258 10,642 9,240 Other noninterest expenses 76,099 87,974 89,306 -------- -------- -------- Total noninterest expenses 449,977 376,082 375,404 -------- -------- -------- Income before income taxes 160,297 271,121 328,979 Provision for income taxes 66,705 98,525 113,921 -------- -------- -------- NET INCOME $ 93,592 $172,596 $215,058 ======== ======== ======== Net income applicable to common stock $ 89,317 $168,321 $210,783 ======== ======== ======== Basic net income per common share $ 0.50 $ 0.95 $ 1.19 Diluted net income per common share $ 0.50 $ 0.94 $ 1.17 Cash dividends declared on common stock $ 78,389 $ 62,706 $ 62,601 Dividends per common share $ 0.44 $ 0.40 $ 0.40 N/M-Not meaningful
10 CONSOLIDATED QUARTERLY STATEMENTS OF INCOME Comerica Incorporated and Subsidiaries
Second First Quarter Quarter (in thousands, except per share data) 2000 2000 -------- -------- INTEREST INCOME Interest and fees on loans $833,916 $778,173 Interest on investment securities 62,102 61,447 Interest on short-term investments 14,711 31,799 -------- -------- Total interest income 910,729 871,419 INTEREST EXPENSE Interest on deposits 216,873 202,896 Interest on short-term borrowings 66,039 53,940 Interest on medium- and long-term debt 130,124 130,988 -------- -------- Total interest expense 413,036 387,824 -------- -------- Net interest income 497,693 483,595 Provision for credit losses 56,600 66,894 -------- -------- Net interest income after provision for credit losses 441,093 416,701 NONINTEREST INCOME Fiduciary income 44,721 45,199 Investment advisory revenue, net 32,154 33,829 Service charges on deposit accounts 47,571 45,752 Commercial lending fees 12,578 12,381 Letter of credit fees 13,835 12,857 Warrant income 5,450 7,374 Securities gains 7,257 5,437 Net gain on sales of businesses 2,631 30,484 Equity in earnings of unconsolidated subsidiaries 5,019 2,927 Other noninterest income 70,634 58,580 -------- -------- Total noninterest income 241,850 254,820 NONINTEREST EXPENSES Salaries and employee benefits 209,150 211,827 Net occupancy expense 27,066 27,798 Equipment expense 18,831 18,946 Outside processing fee expense 14,226 14,487 Restructuring charge - - Customer services 8,824 8,176 Other noninterest expenses 88,145 85,561 -------- -------- Total noninterest expenses 366,242 366,795 -------- -------- Income before income taxes 316,701 304,726 Provision for income taxes 110,651 107,695 -------- -------- NET INCOME $206,050 $197,031 ======== ======== Net income applicable to common stock $201,775 $192,756 ======== ======== Basic net income per common share $ 1.14 $ 1.09 Diluted net income per common share $ 1.12 $ 1.08 Cash dividends declared on common stock $ 62,451 $ 62,519 Dividends per common share $ 0.40 $ 0.40 N/M-Not meaningful
11 CONSOLIDATED QUARTERLY STATEMENTS OF INCOME Comerica Incorporated and Subsidiaries
First Quarter 2001 Compared To: Fourth Quarter 2000 First Quarter 2000 (in thousands, except per share data) Amount Percent Amount Percent -------- ------- -------- ------- INTEREST INCOME Interest and fees on loans $(33,498) (3.7)% $ 87,160 11.2% Interest on investment securities (5,063) (7.3) 3,178 5.2 Interest on short-term investments (6,210) (37.2) (21,297) (67.0) -------- ------- -------- ------- Total interest income (44,771) (4.5) 69,041 7.9 INTEREST EXPENSE Interest on deposits (5,848) (2.1) 69,031 34.0 Interest on short-term borrowings (9,065) (18.7) (14,548) (27.0) Interest on medium- and long-term debt (22,951) (16.4) (14,139) (10.8) -------- ------- -------- ------- Total interest expense (37,864) (8.1) 40,344 10.4 -------- ------- -------- ------- Net interest income (6,907) (1.3) 28,697 5.9 Provision for credit losses (16,006) (18.2) 5,106 7.6 -------- ------- -------- ------- Net interest income after provision for credit losses 9,099 2.1 23,591 5.7 NONINTEREST INCOME Fiduciary income (871) (1.9) 227 0.5 Investment advisory revenue, net (27,920) (151.5) (43,318) (128.0) Service charges on deposit accounts 2,066 4.3 4,162 9.1 Commercial lending fees (5,434) (28.2) 1,473 11.9 Letter of credit fees 285 2.3 (81) (0.6) Warrant income 2,798 N/M (4,252) (57.7) Securities gains 21,459 N/M 18,307 N/M Net gain on sales of businesses (13,184) N/M (30,484) N/M Equity in earnings of unconsolidated subsidiaries (54,017) N/M (56,227) N/M Other noninterest income 28,790 52.2 25,355 43.3 -------- ------- -------- ------- Total noninterest income (46,028) (21.3) (84,838) (33.3) NONINTEREST EXPENSES Salaries and employee benefits (8,552) (4.0) (5,051) (2.4) Net occupancy expense 136 0.5 518 1.9 Equipment expense (198) (1.0) 451 2.4 Outside processing fee expense 1,464 10.2 1,340 9.2 Restructuring charge 94,304 N/M 94,304 N/M Customer services (1,384) (13.0) 1,082 13.2 Other noninterest expenses (11,875) (13.5) (9,462) (11.1) -------- ------- -------- ------- Total noninterest expenses 73,895 19.6 83,182 22.7 -------- ------- -------- ------- Income before income taxes (110,824) (40.9) (144,429) (47.4) Provision for income taxes (31,820) (32.3) (40,990) (38.1) -------- ------- -------- ------- NET INCOME $(79,004) (45.8)% $(103,439) (52.5)% ======== ======= ======== ======= Net income applicable to common stock $(79,004) (46.9)% $(103,439) (53.7)% ======== ======= ======== ======= Basic net income per common share $ (0.45) (47.4)% $ (0.59) (54.1)% Diluted net income per common share $ (0.44) (46.8)% $ (0.58) (53.7)% Cash dividends declared on common stock $ 15,683 25.0 % $ 15,870 25.4 % Dividends per common share $ 0.04 10.0 % $ 0.04 10.0 % N/M-Not meaningful
12 QUARTERLY SELECTED ASSET QUALITY DATA Comerica Incorporated and Subsidiaries
2001 2000 -------- ----------------------- (in thousands) 1st QTR 4th QTR 3rd QTR -------- -------- -------- ALLOWANCE FOR CREDIT LOSSES Beginning period balance $608,110 $613,663 $601,117 Loans charged off: Commercial (38,610) (99,211) (39,836) International (3,136) - (580) Real estate construction (1,000) - - Commercial mortgage (1,526) (9) (64) Residential mortgage - (84) (2) Consumer (942) (1,074) (792) Lease financing (113) (477) (7) -------- -------- -------- Total loans charged off (45,327) (100,855) (41,281) Recoveries on loans previously charged off: Commercial 6,982 4,604 8,797 Real estate construction 116 119 7 Commercial mortgage 136 1,009 18 Residential mortgage 431 - - Consumer 1,625 1,531 1,687 Lease financing 626 30 36 -------- -------- -------- Total recoveries 9,916 7,293 10,545 -------- -------- -------- Net loans charged off (35,411) (93,562) (30,736) Provision for credit losses 72,000 88,006 43,300 Foreign currency translation adjustment (143) 3 (18) -------- -------- -------- Balance at period end $644,556 $608,110 $613,663 ======== ======== ======== As a percent of total loans 1.57% 1.51% 1.57% Net loans charged off to average total loans 0.34 0.94 0.31 NONPERFORMING ASSETS Nonaccrual loans: Commercial $389,206 $244,390 $229,026 International 48,721 57,929 36,770 Real estate construction 6,942 4,542 4,947 Commercial mortgage 18,356 17,398 17,251 Residential mortgage 289 185 522 Consumer 3,147 3,080 3,322 Lease financing 3,817 3,837 4,051 -------- -------- -------- Total nonaccrual loans 470,478 331,361 295,889 Reduced-rate loans 275 2,306 2,271 -------- -------- -------- Total nonperforming loans 470,753 333,667 298,160 Other real estate 5,577 5,577 5,007 -------- -------- -------- Total nonperforming assets $476,330 $339,244 $303,167 ======== ======== ======== Nonperforming loans as a percentage of total loans 1.15% 0.83% 0.76% Nonperforming assets as a percentage of total loans and other real estate 1.16 0.84 0.78 Allowance for credit losses as a percentage of total nonperforming assets 135 179 202 Loans past due 90 days or more $ 55,260 $ 36,176 $ 53,427
13 QUARTERLY SELECTED ASSET QUALITY DATA Comerica Incorporated and Subsidiaries
2000 ------------------------ (in thousands) 2nd QTR 1st QTR -------- -------- ALLOWANCE FOR CREDIT LOSSES Beginning period balance $581,482 $548,147 Loans charged off: Commercial (37,719) (22,585) International (2,851) (7,750) Real estate construction - - Commercial mortgage (437) - Residential mortgage (48) - Consumer (3,135) (6,309) Lease financing (81) (477) -------- -------- Total loans charged off (44,271) (37,121) Recoveries on loans previously charged off: Commercial 4,897 1,466 Real estate construction 7 13 Commercial mortgage 545 112 Residential mortgage (7) 28 Consumer 1,860 1,872 Lease financing 37 78 -------- -------- Total recoveries 7,339 3,569 -------- -------- Net loans charged off (36,932) (33,552) Provision for credit losses 56,600 66,894 Foreign currency translation adjustment (33) (7) -------- -------- Balance at period end $601,117 $581,482 ======== ======== As a percent of total loans 1.54% 1.54% Net loans charged off to average total loans 0.38 0.36 NONPERFORMING ASSETS Nonaccrual loans: Commercial $226,094 $153,807 International 25,242 36,482 Real estate construction 248 249 Commercial mortgage 17,189 8,750 Residential mortgage 505 528 Consumer 3,490 4,935 Lease financing 4,961 4,640 -------- -------- Total nonaccrual loans 277,729 209,391 Reduced-rate loans 7,789 8,888 -------- -------- Total nonperforming loans 285,518 218,279 Other real estate 10,915 11,357 -------- -------- Total nonperforming assets $296,433 $229,636 ======== ======== Nonperforming loans as a percentage of total loans 0.73% 0.58% Nonperforming assets as a percentage of total loans and other real estate 0.76 0.61 Allowance for credit losses as a percentage of total nonperforming assets 203 253 Loans past due 90 days or more $ 38,769 $ 40,894
14 ANALYSIS OF NET INTEREST INCOME (FTE) Comerica Incorporated and Subsidiaries
Three Months Ended ----------------------------------------------------------- March 31, 2001 December 31, 2000 ---------------------------- --------------------------- Average Average Average Average (dollar amounts in millions) Balance Interest Rate Balance Interest Rate ---------------------------- --------------------------- Commercial loans $26,705 $552.4 8.39% $26,036 $599.3 9.16% International loans 2,603 58.5 9.12 2,547 61.8 9.65 Real estate construction loans 2,955 69.8 9.58 2,826 73.6 10.35 Commercial mortgage loans 5,500 116.1 8.56 5,275 118.7 8.95 Residential mortgage loans 800 15.5 7.74 810 15.6 7.72 Consumer loans 1,478 33.7 9.21 1,466 34.4 9.37 Lease financing 1,059 17.0 6.42 961 15.4 6.40 Business loan swap income/(expense) - 3.0 - - (19.5) - ---------------------------- --------------------------- Total loans 41,100 866.0 8.54 39,921 899.3 8.96 Investment securities available for sale (1) 3,881 65.0 6.74 3,856 70.0 7.72 Short-term investments 634 10.5 6.74 809 16.8 8.24 ---------------------------- --------------------------- Total earning assets 45,615 941.5 8.36 44,586 986.1 8.80 Cash and due from banks 1,776 1,905 Allowance for credit losses (621) (622) Other assets 2,561 2,352 ------- ------- Total Assets $49,331 $48,221 ======= ======= Money market and NOW accounts $ 9,456 74.9 3.21 $ 9,361 82.1 3.49 Savings deposits 1,323 5.0 1.52 1,351 5.9 1.73 Certificates of deposit 12,901 182.1 5.73 11,524 177.6 6.13 Foreign office time deposits 487 9.9 8.22 491 12.2 9.88 ---------------------------- --------------------------- Total interest-bearing deposits 24,167 271.9 4.56 22,727 277.8 4.86 Short-term borrowings 2,573 39.4 6.21 2,830 48.5 6.81 Medium- and long-term debt 7,729 116.9 6.13 8,093 139.8 6.88 ---------------------------- --------------------------- Total interest-bearing sources 34,469 428.2 5.04 33,650 466.1 5.51 Noninterest-bearing deposits 9,370 9,357 Other liabilities 835 769 Preferred stock 250 250 Common shareholders' equity 4,407 4,195 ------- ------- Total Liabilities and Shareholders' Equity $49,331 $48,221 ======= ======= Net interest income/Rate spread (FTE) $513.3 3.32 $520.0 3.29 ====== ====== FTE adjustment $ 1.0 $ 0.8 ====== ====== Impact of net noninterest-bearing sources of funds 1.23 1.35 ---- ---- Net interest margin as a percent of average earning assets (FTE) 4.55% 4.64% ==== ====
(1) The average rate for investment securities available for sale was computed using average historical cost. 15 ANALYSIS OF NET INTEREST INCOME (FTE) Comerica Incorporated and Subsidiaries
Three Months Ended ---------------------------- March 31, 2000 ---------------------------- Average Average (dollar amounts in millions) Balance Interest Rate ---------------------------- Commercial loans $24,287 $507.8 8.41% International loans 2,598 56.2 8.70 Real estate construction loans 2,282 54.8 9.66 Commercial mortgage loans 5,000 106.1 8.53 Residential mortgage loans 859 16.2 7.56 Consumer loans 1,408 31.1 8.86 Lease financing 809 13.1 6.46 Business loan swap income/(expense) - (6.6) - ---------------------------- Total loans 37,243 778.7 8.41 Investment securities available for sale (1) 3,550 61.9 6.88 Short-term investments 1,519 31.8 8.41 ---------------------------- Total earning assets 42,312 872.4 8.28 Cash and due from banks 1,800 Allowance for credit losses (559) Other assets 2,144 ------- Total Assets $45,697 ======= Money market and NOW accounts $ 9,192 67.6 2.96 Savings deposits 1,432 5.6 1.58 Certificates of deposit 8,375 109.3 5.25 Foreign office time deposits 1,216 20.4 6.73 ---------------------------- Total interest-bearing deposits 20,215 202.9 4.04 Short-term borrowings 3,589 53.9 6.05 Medium- and long-term debt 8,621 131.0 6.11 ---------------------------- Total interest-bearing sources 32,425 387.8 4.81 Noninterest-bearing deposits 8,612 Other liabilities 677 Preferred stock 250 Common shareholders' equity 3,733 ------- Total Liabilities and Shareholders' Equity $45,697 ======= Net interest income/Rate spread (FTE) $484.6 3.47 ====== FTE adjustment $ 1.0 ====== Impact of net noninterest-bearing sources of funds 1.13 ----- Net interest margin as a percent of average earning assets (FTE) 4.60% =====
(1) The average rate for investment securities available for sale was computed using average historical cost. 16 CONSOLIDATED STATISTICAL DATA Comerica Incorporated and Subsidiaries
March 31, December 31, September 30, (In thousands, except per share data) 2001 2000 2000 ----------- ----------- ----------- Commercial loans: Floor plan $ 2,217,405 $ 2,063,619 $ 1,559,050 Other 24,156,024 23,945,717 23,851,548 ----------- ----------- ----------- Total commercial 26,373,429 26,009,336 25,410,598 International loans 2,653,902 2,571,156 2,483,910 Real estate construction loans 2,973,895 2,915,168 2,771,393 Commercial mortgage loans 5,570,134 5,360,601 5,195,445 Residential mortgage loans 793,075 807,064 817,483 Consumer loans: Credit card 21,303 21,517 19,995 Home equity 964,753 976,100 954,427 Other consumer 485,959 479,518 483,667 ----------- ----------- ----------- Total consumer 1,472,015 1,477,135 1,458,089 Lease financing 1,088,908 1,029,164 940,241 ----------- ----------- ----------- Total loans $40,925,358 $40,169,624 $39,077,159 =========== =========== =========== Goodwill $ 356,925 $ 366,550 $ 374,611 Core deposit intangible 7,176 7,883 9,056 Other intangible assets 1,215 3,472 3,723 Loan servicing rights 8,470 6,657 6,644 Deferred mutual fund distribution costs 54,045 85,849 104,307 Amortization of intangibles (quarterly) 8,685 9,549 9,596 Leverage ratio* 8.77% 8.74% 8.75% Tier 1 risk-based capital ratio* 7.36 7.35 7.36 Total risk-based capital ratio* 11.13 11.11 11.32 Book value per share $ 24.80 $ 23.98 $ 23.22 Market value for the quarter: High $ 65.15 $ 61.13 $ 59.44 Low 53.00 47.19 45.00 Close 61.50 59.38 58.44 Return on average common equity 8.11% 16.05% 20.87% Return on average assets 0.76 1.43 1.83 Efficiency ratio 68.22 51.25 50.23 Number of commercial banking offices 353 354 347 Number of employees-full time equivalent 11,525 11,444 11,387
* March 31, 2001 ratios estimated 17 CONSOLIDATED STATISTICAL DATA Comerica Incorporated and Subsidiaries
June 30, March 31, (In thousands, except per share data) 2000 2000 ----------- ----------- Commercial loans: Floor plan $ 1,853,836 $ 1,815,606 Other 23,547,430 22,704,255 ----------- ----------- Total commercial 25,401,266 24,519,861 International loans 2,612,539 2,565,966 Real estate construction loans 2,576,986 2,422,371 Commercial mortgage loans 5,145,662 5,078,245 Residential mortgage loans 828,092 849,912 Consumer loans: Credit card 26,945 22,657 Home equity 938,191 901,107 Other consumer 473,235 483,777 ----------- ----------- Total consumer 1,438,371 1,407,541 Lease financing 858,065 815,293 ----------- ----------- Total loans $38,860,981 $37,659,189 =========== =========== Goodwill $ 380,726 $ 388,232 Core deposit intangible 10,229 11,481 Other intangible assets 3,973 4,047 Deferred mutual fund distribution costs 105,904 87,199 Loan servicing rights 6,851 6,396 Amortization of intangibles (quarterly) 9,622 8,731 Leverage ratio* 8.53% 8.38% Tier 1 risk-based capital ratio* 7.22 7.29 Total risk-based capital ratio* 10.78 11.00 Book value per share $ 22.34 $ 21.51 Market value for the quarter: High $ 54.38 $ 46.25 Low 39.88 32.94 Close 44.88 41.88 Return on average common equity 20.80% 20.66% Return on average assets 1.77 1.72 Efficiency ratio 49.95 49.98 Number of commercial banking offices 346 347 Number of employees-full time equivalent 11,614 11,513
* March 31, 2001 ratios estimated 18 PARENT COMPANY ONLY BALANCE SHEETS Comerica Incorporated
March 31, December 31, March 31, (in thousands, except share data) 2001 2000 2000 ----------- ----------- ----------- ASSETS Cash and due from banks $ 90,603 $ 9,918 $ 247 Time deposits with banks 6,400 112,100 68,500 Investment securities available for sale 50 47,262 25,024 Investment in subsidiaries, principally banks 4,876,415 4,634,579 4,259,863 Premises and equipment 3,310 3,391 4,141 Other assets 136,334 66,009 50,957 ----------- ----------- ----------- TOTAL ASSETS $ 5,113,112 $ 4,873,259 $ 4,408,732 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Commercial paper $ 116,983 $ 79,985 $ 74,891 Long-term debt 163,886 157,414 158,263 Advances from nonbanking subsidiaries - 4,453 - Other liabilities 163,729 131,248 118,172 ----------- ----------- ----------- Total liabilities 444,598 373,100 351,326 Nonredeemable preferred stock - $50 stated value: Authorized - 5,000,000 shares Issued - 5,000,000 shares at 3/31/01, 12/31/00, and 3/31/00 250,000 250,000 250,000 Common stock - $5 par value: Authorized - 325,000,000 shares Issued - 178,337,648 shares at 3/31/01, 177,703,678 shares at 12/31/00 and 177,901,802 shares at 3/31/00 891,688 888,519 889,509 Capital surplus 326,134 301,414 313,493 Unearned employee stock ownership plan shares - 176,642 shares at 3/31/01 and 12/31/00 and 64,993 shares at 3/31/00 (6,750) (6,750) (3,000) Accumulated other comprehensive income 127,490 12,097 (37,345) Retained earnings 3,086,915 3,085,784 2,714,213 Deferred compensation (6,963) (14,494) (22,321) Less cost of common stock in treasury - 289,397 shares at 12/31/00 and 826,342 shares at 3/31/00 - (16,411) (47,143) ----------- ----------- ----------- Total shareholders' equity 4,668,514 4,500,159 4,057,406 ----------- ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 5,113,112 $ 4,873,259 $ 4,408,732 =========== =========== ===========
19 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Comerica Incorporated and Subsidiaries
Nonredeem- Accumulated able Other (in thousands, except Preferred Common Capital Comprehensive Retained share data) Stock Stock Surplus Income Earnings --------- -------- -------- -------- ---------- BALANCES AT JANUARY 1, 2000 $250,000 $889,453 $226,001 $(21,704) $2,677,210 Net income for 2000 - - - - 197,031 Other comprehensive income, net of tax - - - (15,641) - Total comprehensive income - - - - - Common stock dividend - - 84,906 - (84,927) Cash dividends declared: Preferred stock - - - - (4,275) Common stock - - - - (62,519) Purchase and retirement of 41,400 shares of common stock - (207) (1,902) - - Purchase of 331,362 shares of common stock - - - - - Net issuance of common stock under employee stock plans - 263 4,488 - (8,307) Amortization of deferred compensation - - - - - -------- -------- -------- -------- ---------- BALANCES AT MARCH 31, 2000 $250,000 $889,509 $313,493 $(37,345) $2,714,213 ======== ======== ======== ======== ========== BALANCES AT JANUARY 1, 2001 $250,000 $888,519 $301,414 $ 12,097 $3,085,784 Net income for 2001 - - - - 93,592 Other comprehensive income, net of tax - - - 115,393 - Total comprehensive income - - - - - Cash dividends declared: Preferred stock - - - - (4,275) Common stock - - - - (78,389) Purchase of 45,000 shares of common stock - - - - - Net issuance of common stock under employee stock plans - 3,169 24,720 - (9,797) Amortization of deferred compensation - - - - - -------- -------- -------- -------- ---------- BALANCES AT MARCH 31, 2001 $250,000 $891,688 $326,134 $127,490 $3,086,915 ======== ======== ======== ======== ==========
20 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Comerica Incorporated and Subsidiaries
Unearned Employee Stock Total (in thousands, except Ownership Deferred Treasury Shareholders' share data) Plan Shares Compensation Stock Equity ---------- ------------ --------- ---------- BALANCES AT JANUARY 1, 2000 $(3,750) $(21,998) $(47,161) $3,948,051 Net income for 2000 - - - 197,031 Other comprehensive income, net of tax - - - (15,641) ---------- Total comprehensive income - - - 181,390 Common stock dividend - - - (21) Cash dividends declared: Preferred stock - - - (4,275) Common stock - - - (62,519) Purchase and retirement of 41,400 shares of common stock - - - (2,109) Purchase of 331,362 shares of common stock - - (13,112) (13,112) Net issuance of common stock under employee stock plans 750 (2,711) 13,130 7,613 Amortization of deferred compensation - 2,388 - 2,388 ------- -------- -------- ---------- BALANCES AT MARCH 31, 2000 $(3,000) $(22,321) $(47,143) $4,057,406 ======= ======== ======== ========== BALANCES AT JANUARY 1, 2001 $(6,750) $(14,494) $(16,411) $4,500,159 Net income for 2001 - - - 93,592 Other comprehensive income, net of tax - - - 115,393 ---------- Total comprehensive income - - - 208,985 Cash dividends declared: Preferred stock - - - (4,275) Common stock - - - (78,389) Purchase of 45,000 shares of common stock - - (2,760) (2,760) Net issuance of common stock under employee stock plans - (3,857) 19,171 33,406 Amortization of deferred compensation - 11,388 - 11,388 ------- ------- -------- ---------- BALANCES AT MARCH 31, 2001 $(6,750) $(6,963) $ - $4,668,514 ======= ======= ======== ==========
-----END PRIVACY-ENHANCED MESSAGE-----