10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 1-10706

Comerica Incorporated

(Exact name of registrant as specified in its charter)

Delaware	38-1998421
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

Comerica Bank Tower

1717 Main Street, MC 6404

Dallas, Texas 75201

(Address of principal executive offices)

(Zip Code)

(214) 462-6831

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨     No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

$5 par value common stock:

Outstanding as of July 25, 2011: 176,777,667 shares

COMERICA INCORPORATED AND SUBSIDIARIES

TABLE OF CONTENTS

ITEM 1. Financial Statements
Consolidated Balance Sheets at June 30, 2011 (unaudited), December 31, 2010 and June 30, 2010 (unaudited)	3
Consolidated Statements of Income for the Three Months and Six Months Ended June 30, 2011 and 2010 (unaudited)	4
Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2011 and 2010 (unaudited)	5
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010 (unaudited)	6
Notes to Consolidated Financial Statements (unaudited)	7
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	74
ITEM 4. Controls and Procedures	74
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings	74
ITEM 1A. Risk Factors	74
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	74
ITEM 6. Exhibits	75
Signature	77

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

Comerica Incorporated and Subsidiaries

(in millions, except share data)	June 30, 2011			December 31, 2010			June 30, 2010
	(unaudited)						(unaudited)
ASSETS
Cash and due from banks	$	987		$	668		$	816
Interest-bearing deposits with banks		2,479			1,415			3,409
Other short-term investments		124			141			134
Investment securities available-for-sale		7,537			7,560			7,188
Commercial loans		22,052			22,145			21,151
Real estate construction loans		1,728			2,253			2,774
Commercial mortgage loans		9,579			9,767			10,318
Residential mortgage loans		1,491			1,619			1,606
Consumer loans		2,232			2,311			2,443
Lease financing		949			1,009			1,084
International loans		1,162			1,132			1,226
Total loans		39,193			40,236			40,602
Less allowance for loan losses		(806	)		(901	)		(967	)
Net loans		38,387			39,335			39,635
Premises and equipment		641			630			634
Customers’ liability on acceptances outstanding		10			9			24
Accrued income and other assets		3,976			3,909			4,045
Total assets	$	54,141		$	53,667		$	55,885
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits	$	16,344		$	15,538		$	15,769
Money market and NOW deposits		18,033			17,622			16,062
Savings deposits		1,462			1,397			1,407
Customer certificates of deposit		5,551			5,482			5,893
Other time deposits		—			—			165
Foreign office time deposits		368			432			484
Total interest-bearing deposits		25,414			24,933			24,011
Total deposits		41,758			40,471			39,780
Short-term borrowings		67			130			200
Acceptances outstanding		10			9			24
Accrued expenses and other liabilities		1,062			1,126			1,048
Medium- and long-term debt		5,206			6,138			9,041
Total liabilities		48,103			47,874			50,093
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 203,878,110 shares		1,019			1,019			1,019
Capital surplus		1,472			1,481			1,467
Accumulated other comprehensive loss		(308	)		(389	)		(240	)
Retained earnings		5,395			5,247			5,124
Less cost of common stock in treasury - 27,092,427 shares at 6/30/11, 27,342,518 shares at 12/31/10, and 27,561,412 shares at 6/30/10		(1,540	)		(1,565	)		(1,578	)
Total shareholders’ equity		6,038			5,793			5,792
Total liabilities and shareholders’ equity	$	54,141		$	53,667		$	55,885

See notes to consolidated financial statements.

3

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

Comerica Incorporated and Subsidiaries

	Three Months Ended June  30,					Six Months Ended June 30,
(in millions, except per share data)	2011			2010		2011			2010
INTEREST INCOME
Interest and fees on loans	$	369		$	412	$	744		$	824
Interest on investment securities		59			61		116			122
Interest on short-term investments		3			3		5			6
Total interest income		431			476		865			952
INTEREST EXPENSE
Interest on deposits		23			29		45			64
Interest on medium- and long-term debt		17			25		34			51
Total interest expense		40			54		79			115
Net interest income		391			422		786			837
Provision for loan losses		47			126		96			301
Net interest income after provision for loan losses		344			296		690			536
NONINTEREST INCOME
Service charges on deposit accounts		51			52		103			108
Fiduciary income		39			38		78			77
Commercial lending fees		21			22		42			44
Letter of credit fees		18			19		36			37
Card fees		15			15		30			28
Foreign exchange income		10			10		19			20
Bank-owned life insurance		9			9		17			17
Brokerage fees		6			6		12			12
Net securities gains		4			1		6			3
Other noninterest income		29			22		66			42
Total noninterest income		202			194		409			388
NONINTEREST EXPENSES
Salaries		185			179		373			348
Employee benefits		50			45		100			89
Total salaries and employee benefits		235			224		473			437
Net occupancy expense		38			39		78			80
Equipment expense		17			15		32			32
Outside processing fee expense		25			23		49			46
Software expense		20			22		43			44
FDIC insurance expense		12			16		27			33
Legal fees		8			9		17			17
Advertising expense		7			7		14			15
Other real estate expense		6			5		14			17
Litigation and operational losses		5			2		8			3
Merger and restructuring charges		5			—		5			—
Provision for credit losses on lending-related commitments		(2	)		—		(5	)		7
Other noninterest expenses		33			35		69			70
Total noninterest expenses		409			397		824			801
Income from continuing operations before income taxes		137			93		275			123
Provision for income taxes		41			23		76			18
Income from continuing operations		96			70		199			105
Income from discontinued operations, net of tax		—			—		—			17
NET INCOME		96			70		199			122
Less:
Preferred stock dividends		—			—		—			123
Income allocated to participating securities		1			1		2			—
Net income (loss) attributable to common shares	$	95		$	69	$	197		$	(1	)
Basic earnings per common share:
Income (loss) from continuing operations	$	0.54		$	0.40	$	1.12		$	(0.11	)
Net income (loss)		0.54			0.40		1.12			(0.01	)
Diluted earnings per common share:
Income (loss) from continuing operations		0.53			0.39		1.10			(0.11	)
Net income (loss)		0.53			0.39		1.10			(0.01	)
Cash dividends declared on common stock		18			8		35			18
Cash dividends declared per common share		0.10			0.05		0.20			0.10

See notes to consolidated financial statements.

4

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)

Comerica Incorporated and Subsidiaries

												Accumulated Other
				Common Stock																	Total
(in millions, except per share data)	Preferred Stock			Shares Outstanding			Amount		Capital Surplus			Comprehensive Loss			Retained Earnings			Treasury Stock			Shareholders’ Equity
BALANCE AT DECEMBER 31, 2009	$	2,151			151.2		$	894	$	740		$	(336	)	$	5,161		$	(1,581	)	$	7,029
Net income		—			—			—		—			—			122			—			122
Other comprehensive income, net of tax		—			—			—		—			96			—			—			96
Total comprehensive income																						218
Cash dividends declared on preferred stock		—			—			—		—			—			(38	)		—			(38	)
Cash dividends declared on common stock ($0.10 per share)		—			—			—		—			—			(18	)		—			(18	)
Purchase of common stock		—			—			—		—			—			—			(4	)		(4	)
Issuance of common stock		—			25.1			125		724			—			—			—			849
Redemption of preferred stock		(2,250	)		—			—		—			—			—			—			(2,250	)
Redemption discount accretion on preferred stock		94			—			—		—			—			(94	)		—			—
Accretion of discount on preferred stock		5			—			—		—			—			(5	)		—			—
Net issuance of common stock under employee stock plans		—			—			—		(5	)		—			(4	)		6			(3	)
Share-based compensation		—			—			—		11			—			—			—			11
Other		—			—			—		(3	)		—			—			1			(2	)
BALANCE AT JUNE 30, 2010	$	—			176.3		$	1,019	$	1,467		$	(240	)	$	5,124		$	(1,578	)	$	5,792
BALANCE AT DECEMBER 31, 2010	$	—			176.5		$	1,019	$	1,481		$	(389	)	$	5,247		$	(1,565	)	$	5,793
Net income		—			—			—		—			—			199			—			199
Other comprehensive income, net of tax		—			—			—		—			81			—			—			81
Total comprehensive income																						280
Cash dividends declared on common stock ($0.20 per share)		—			—			—		—			—			(35	)		—			(35	)
Purchase of common stock		—			(0.5	)		—		—			—			—			(21	)		(21	)
Net issuance of common stock under employee stock plans		—			0.8			—		(30	)		—			(16	)		46			—
Share-based compensation		—			—			—		21			—			—			—			21
BALANCE AT JUNE 30, 2011	$	—			176.8		$	1,019	$	1,472		$	(308	)	$	5,395		$	(1,540	)	$	6,038

See notes to consolidated financial statements.

5

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Comerica Incorporated and Subsidiaries

	Six Months Ended June 30,
(in millions)	2011			2010
OPERATING ACTIVITIES
Net income	$	199		$	122
Income from discontinued operations, net of tax		—			17
Income from continuing operations, net of tax		199			105
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		96			301
Provision for credit losses on lending-related commitments		(5	)		7
Provision for deferred income taxes		23			1
Depreciation and software amortization		59			62
Share-based compensation expense		21			11
Net amortization of securities		12			8
Net securities gains		(6	)		(3	)
Excess tax benefits from share-based compensation arrangements		(1	)		(1	)
Net decrease in trading securities		14			5
Net decrease (increase) in loans held-for-sale		3			(1	)
Net decrease in accrued income receivable		5			9
Net decrease in accrued expenses		(40	)		(9	)
Other, net		82			228
Discontinued operations, net		—			17
Net cash provided by operating activities		462			740
INVESTING ACTIVITIES
Proceeds from maturities and redemptions of investment securities available-for-sale		1,031			681
Proceeds from sales of investment securities available-for-sale		5			209
Purchases of investment securities available-for-sale		(1,028	)		(521	)
Proceeds from sales of indirect private equity and venture capital funds		33			—
Net decrease in loans		822			1,200
Net increase in fixed assets		(57	)		(36	)
Net increase in customers’ liability on acceptances outstanding		(1	)		(13	)
Sales of Federal Home Loan Bank stock		36			41
Net cash provided by investing activities		841			1,561
FINANCING ACTIVITIES
Net increase in deposits		1,134			126
Net decrease in short-term borrowings		(63	)		(262	)
Net increase in acceptances outstanding		1			13
Repayments of medium- and long-term debt		(940	)		(2,116	)
Proceeds from issuance of common stock		—			849
Redemption of preferred stock		—			(2,250	)
Proceeds from issuance of common stock under employee stock plans		3			4
Excess tax benefits from share-based compensation arrangements		1			1
Purchase of common stock for treasury		(21	)		(4	)
Dividends paid on common stock		(35	)		(16	)
Dividends paid on preferred stock		—			(38	)
Net cash provided by (used in) financing activities		80			(3,693	)
Net increase (decrease) in cash and cash equivalents		1,383			(1,392	)
Cash and cash equivalents at beginning of period		2,083			5,617
Cash and cash equivalents at end of period	$	3,466		$	4,225
Interest paid	$	76		$	125
Income taxes, tax deposits and tax-related interest paid	$	47		$	19
Noncash investing and financing activities:
Loans transferred to other real estate	$	30		$	41
Pending settlement of matured investment securities available-for-sale		110			—

See notes to consolidated financial statements.

6

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 1 – BASIS OF PRESENTATION AND ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation were included. The results of operations for the six months ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. Certain items in prior periods were reclassified to conform to the current presentation. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report of Comerica Incorporated and Subsidiaries (the Corporation) on Form 10-K for the year ended December 31, 2010.

Pending Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income,” (ASU 2011-05). The Corporation will adopt ASU 2011-05, which revises the way in which comprehensive income is presented in the financial statements, in its consolidated financial statements in the first quarter 2012. The provisions of ASU 2011-05 give companies the option to present total comprehensive income, components of net income, and components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. While the provisions of ASU 2011-05 will amend the presentation of comprehensive income, the adoption of ASU 2011-05 will not have any effect on the Corporation’s financial condition and results of operations.

In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The Corporation will adopt ASU 2011-04, which generally aligns the principles of fair value measurements with International Financial Reporting Standards (IFRSs), in its consolidated financial statements in the first quarter 2012. The provisions of ASU 2011-04 clarify the application of existing fair value measurement requirements, and expand the disclosure requirements for fair value measurements. While the provisions of ASU 2011-04 will increase the Corporation’s fair value disclosures the Corporation does not expect the adoption of ASU 2011-04 to have any effect on the Corporation’s financial condition and results of operations.

In April 2011, the FASB issued ASU No. 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring,” (ASU 2011-02). The Corporation will adopt ASU 2011-02, which clarifies existing guidance used by creditors to determine when a modification represents a concession, in its consolidated financial statements in the third quarter 2011. While the provisions of ASU 2011-02 may increase the amount of the Corporation’s receivables that are considered troubled debt restructurings and will expand the Corporation’s disclosures on troubled debt restructurings, the Corporation expects minimal impact to the allowance for loan losses and does not expect the adoption of ASU 2011-02 to have a material effect on the Corporation’s financial condition and results of operations.

NOTE 2 –ACQUISITION

On July 28, 2011 (the “acquisition date”), the Corporation acquired all the outstanding common stock of Sterling Bancshares, Inc. (“Sterling”), a bank holding company headquartered in Houston, Texas, in a stock-for-stock transaction. Sterling common shareholders and holders of outstanding Sterling phantom stock units received 0.2365 shares of the Corporation’s common stock in exchange for each share of Sterling common stock or phantom stock unit. As a result, the Corporation issued approximately 24 million common shares, subject to payment of cash in lieu of fractional shares, with an acquisition date fair value of $793 million, based on the Corporation’s closing stock price of $32.67 on July 27, 2011. Based on the merger agreement, outstanding and unexercised options to purchase Sterling common stock were converted into fully vested options to purchase common stock of the Corporation. In addition, outstanding warrants to purchase Sterling common stock were converted into warrants to purchase common stock of the Corporation. The fair value of total consideration paid to acquire Sterling was approximately $803 million. The Corporation incurred $5 million of pre-integration and transaction costs prior to the acquisition closing date that are included in “merger and restructuring charges” in the consolidated statements of income. However, the assets acquired and liabilities assumed from Sterling, the consideration paid to acquire Sterling, and the results of Sterling’s operations are not reflected in consolidated financial statements as of and for the three- and six-month periods ended June 30, 2011. The acquisition of Sterling significantly expands the Corporation’s presence in Texas, particularly in the Houston and San Antonio areas, and gives the Corporation the ability to leverage additional marketing capacity to offer a wide array of products through a larger distribution network, particularly to middle market and small business companies.

7

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 2 –ACQUISITION (continued)

The assets and liabilities of Sterling were recorded on the consolidated balance sheets at estimated fair value as of the acquisition date. The initial accounting for the acquisition was incomplete at the time these financial statements were issued. The following purchase price allocation is preliminary and may change as additional information becomes available and additional analyses are completed. Preliminary initial goodwill of $469 million was recorded after adjusting for the preliminary fair value of net identifiable assets acquired.

(in millions)	Initial Allocation
Fair value of consideration paid:
Common stock issued (a)	$	793
Warrants issued		7
Stock options issued		3
Cash in lieu of fractional shares (a)
Total consideration paid		803
Fair value of identifiable assets acquired:
Cash and cash equivalents		730
Investment securities available-for-sale		1,527
Total loans		2,109
Premises and equipment		35
Core deposit intangible		41
Accrued income and other assets		288
Total identifiable assets acquired		4,730
Fair value of liabilities assumed:
Deposits		4,076
Short-term borrowings		20
Medium- and long-term debt		262
Accrued expenses and other liabilities		38
Total liabilities assumed		4,396
Fair value of net identifiable assets acquired		334
Goodwill resulting from acquistion	$	469

(a) Due to the limited time since the acquisition date, the number of shares of common stock issued and the amount of cash paid in lieu of fractional shares has yet to be determined. The fair value of common stock issued includes the fair value of any potential fractional shares.

The goodwill resulting from the acquisition represents the inherent long-term value expected from the business opportunities created from combining Sterling with the Corporation. None of the goodwill recognized will be deductible for income tax purposes. Due to the limited time since the acquisition date, the allocation of the preliminary goodwill attributable to the acquisition of Sterling to the Corporation’s business segments was incomplete at the time these financial statements were issued. Additionally, the pro forma revenues and net income of the combined entity are yet to be determined. This information will be included in the Corporation’s Form 10-Q for the period ending September 30, 2011.

The core deposit intangible will be amortized on an accelerated basis over the estimated life, currently expected to be approximately 10 years.

8

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 2 –ACQUISITION (continued)

In conjunction with the Sterling acquisition, the acquired impaired loan portfolio was accounted for at preliminary fair value as follows.

(In millions)	Impaired Loans
Contractually required principal and interest	$	322
Contractual cash flows not expected to be collected (nonaccretable difference)		165
Expected cash flows		157
Interest component of expected cash flows (accretable yield)		26
Estimated fair value at acquisition	$	131

Information regarding acquired loans not deemed impaired at acquisition was as follows.

(In millions)	Nonimpaired Loans
Contractually required principal and interest	$	2,468
Contractual cash flows not expected to be collected		206
Estimated fair value at acquisition		1,978

Loans acquired in the Sterling acquisition were initially recorded at fair value with no separate allowance for loan losses. The Corporation reviewed the loans at acquisition to determine which loans should be considered purchased impaired loans and aggregated the impaired loans into pools of loans based on common risk characteristics. The Corporation defined impaired loans as those that were either not accruing interest or exhibited credit risk factors consistent with nonperforming loans at the acquisition date.

The Corporation estimated the total cash flows expected to be collected from the pools of loans, which includes undiscounted expected principal and interest. The excess of the total cash flows expected to be collected over the fair value of the related loans represents the accretable yield, which is recognized as interest income on a level-yield basis over the life of the related loans. The difference between the undiscounted contractual principal and interest and the total cash flows expected to be collected is the nonaccretable difference, which reflects the impact of estimated credit losses and other factors. Subsequent decreases in the expected cash flows will require the Corporation to evaluate the need for additions to the allowance for loan losses. Subsequent improvements in expected cash flows will result in the recognition of additional interest income over the then remaining lives of the loan pools.

For acquired loans not deemed impaired at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans. Subsequent to the acquisition date, methods utilized to estimate the required allowance for loan losses for these loans is similar to originated loans; however, a provision for loan losses will be recorded only to the extent the required allowance exceeds any remaining credit discounts.

NOTE 3 – FAIR VALUE MEASUREMENTS

The Corporation utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, the Corporation uses present value techniques and other valuation methods to estimate the fair values of its financial instruments. These valuation methods require considerable judgment and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used.

Fair value is an estimate of the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (i.e., not a forced transaction, such as a liquidation or distressed sale) between market participants at the measurement date. However, the calculated fair value estimates in many instances cannot be substantiated by comparison to independent markets and, in many cases, may not be realizable in a current sale of the financial instrument.

Trading securities, investment securities available-for-sale, derivatives and deferred compensation plan liabilities are recorded at fair value on a recurring basis. Additionally, from time to time, the Corporation may be required to record other assets and liabilities at fair value on a nonrecurring basis, such as impaired loans, other real estate (primarily foreclosed property), nonmarketable equity securities and certain other assets and liabilities. These nonrecurring fair value adjustments typically involve write-downs of individual assets or application of lower of cost or fair value accounting.

9

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 3 – FAIR VALUE MEASUREMENTS (continued)

The Corporation categorizes assets and liabilities recorded at fair value into a three-level hierarchy, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1	Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2	Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3	Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

Following is a description of the valuation methodologies and key inputs used to measure financial assets and liabilities recorded at fair value, as well as a description of the methods and significant assumptions used to estimate fair value disclosures for financial instruments not recorded at fair value in their entirety on a recurring basis. For financial assets and liabilities recorded at fair value, the description includes the level of the fair value hierarchy in which the assets or liabilities are classified. Transfers of assets or liabilities between levels of the fair value hierarchy are recognized at the beginning of the reporting period, when applicable.

Cash and due from banks, federal funds sold and securities purchased under agreements to resell, and interest-bearing deposits with banks

Due to the short-term nature, the carrying amount of these instruments approximates the estimated fair value.

Trading securities and associated deferred compensation plan liabilities

Securities held for trading purposes and associated deferred compensation plan liabilities are recorded at fair value and included in “other short-term investments” and “accrued expenses and other liabilities,” respectively, on the consolidated balance sheets. Level 1 securities held for trading purposes include assets related to employee deferred compensation plans, which are invested in mutual funds, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and other securities traded on an active exchange, such as the New York Stock Exchange. Deferred compensation plan liabilities represent the fair value of the obligation to the employee, which corresponds to the fair value of the invested assets. Level 2 trading securities include municipal bonds and mortgage-backed securities issued by U.S. government-sponsored entities and corporate debt securities. Securities classified as Level 3 include securities in less liquid markets and securities not rated by a credit agency. The methods used to value trading securities are the same as the methods used to value investment securities available-for-sale, discussed below.

Loans held-for-sale

Loans held-for-sale, included in “other short-term investments” on the consolidated balance sheets, are recorded at the lower of cost or fair value. The fair value of loans held-for-sale is based on what secondary markets are currently offering for portfolios with similar characteristics. As such, the Corporation classifies loans held-for-sale subjected to nonrecurring fair value adjustments as Level 2.

Investment securities available-for-sale

Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available or the market is deemed to be inactive at the measurement date, an adjustment to the quoted prices may be necessary. In some circumstances, the Corporation may conclude that a change in valuation technique or the use of multiple valuation techniques may be appropriate to estimate an instrument’s fair value. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include residential mortgage-backed securities issued by U.S. government-sponsored enterprises, corporate debt securities and state and municipal securities. The fair value of Level 2 securities was determined using quoted prices of securities with similar characteristics or pricing models based on observable market data inputs, primarily interest rates, spreads and prepayment information. Securities classified as Level 3, of which the substantial majority are auction-rate securities (ARS), represent securities in less liquid markets requiring significant

10

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 3 – FAIR VALUE MEASUREMENTS (continued)

management assumptions when determining fair value. Due to the lack of a robust secondary auction-rate securities market with active fair value indicators, fair value at June 30, 2011, December 31, 2010 and June 30, 2010 was determined using an income approach based on a discounted cash flow model utilizing two significant assumptions: discount rate (including a liquidity risk premium) and workout period. The discount rate was calculated using credit spreads of the underlying collateral or similar securities plus a liquidity risk premium. The liquidity risk premium was based on observed industry auction-rate securities valuations by third parties and incorporated the rate at which the various types of similar ARS had been redeemed or sold since acquisition in 2008. The workout period was based on an assessment of publicly available information on efforts to re-establish functioning markets for these securities and the Corporation’s redemption experience. As of June 30, 2011, approximately 61 percent of the aggregate ARS par value had been redeemed or sold since acquisition at or above carrying value.

Loans

The Corporation does not record loans at fair value on a recurring basis. However, periodically, the Corporation records nonrecurring adjustments to the carrying value of loans based on fair value measurements. Loans for which it is probable that payment of interest or principal will not be made in accordance with the contractual terms of the original loan agreement are considered impaired. Impaired loans are reported as nonrecurring fair value measurements when an allowance is established based on the fair value of collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the Corporation classifies the impaired loan as nonrecurring Level 2. When management determines that the fair value of the collateral requires additional adjustments, either as a result of non-current appraisal value or when there is no observable market price, the Corporation classifies the impaired loan as nonrecurring Level 3.

Business loans consist of commercial, real estate construction, commercial mortgage, lease financing and international loans. The estimated fair value for variable rate business loans that reprice frequently is based on carrying values adjusted for estimated credit losses and other adjustments that would be expected to be made by a market participant in an active market. The fair value for other business loans and retail loans are estimated using a discounted cash flow model that employs interest rates currently offered on the loans, adjusted by an amount for estimated credit losses and other adjustments that would be expected to be made by a market participant in an active market. The rates take into account the expected yield curve, as well as an adjustment for prepayment risk, when applicable.

Customers’ liability on acceptances outstanding and acceptances outstanding

The carrying amount of these instruments approximates the estimated fair value, due to their short-term nature.

Derivative assets and derivative liabilities

Derivative instruments held or issued for risk management or customer-initiated activities are traded in over-the-counter markets where quoted market prices are not readily available. Fair value for over-the-counter derivative instruments is measured using internally developed models that use primarily market observable inputs, such as yield curves and option volatilities. Included in the fair value of over-the-counter derivative instruments are credit valuation adjustments reflecting counterparty credit risk and credit risk of the Corporation. These adjustments are determined by applying a credit spread for the counterparty or the Corporation, as appropriate, to the total expected exposure of the derivative after considering collateral and other master netting arrangements. These adjustments, which are considered Level 3 inputs, are based on estimates of current credit spreads to evaluate the likelihood of default. The Corporation assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives. As a result, the Corporation classified its over-the-counter derivative valuations in Level 2 of the fair value hierarchy. Examples of Level 2 derivative instruments are interest rate swaps and energy derivative and foreign exchange contracts.

The Corporation also holds a portfolio of warrants for generally nonmarketable equity securities. These warrants are primarily from high technology, non-public companies obtained as part of the loan origination process. Warrants which contain a net exercise provision or a non-contingent put right embedded in the warrant agreement are accounted for as derivatives and recorded at fair value using a Black-Scholes valuation model with five inputs: risk-free rate, expected life, volatility, exercise price, and the per share market value of the underlying company. The Corporation classifies warrants accounted for as derivatives as recurring Level 3.

11

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 3 – FAIR VALUE MEASUREMENTS (continued)

The Corporation holds a derivative contract associated with the 2008 sale of its remaining ownership of Visa Inc. (Visa) Class B shares. Under the terms of the derivative contract, the Corporation will compensate the counterparty primarily for dilutive adjustments made to the conversion factor of the Visa Class B to Class A shares based on the ultimate outcome of litigation involving Visa. Conversely, the Corporation will be compensated by the counterparty for any increase in the conversion factor from anti-dilutive adjustments. The fair value of the derivative contract was based on unobservable inputs consisting of management’s estimate of the litigation outcome, timing of litigation settlements and payments related to the derivative. The Corporation classifies the derivative liability as recurring Level 3.

Nonmarketable equity securities

The Corporation has a portfolio of indirect private equity and venture capital investments. These funds generally cannot be redeemed and the majority are not readily marketable. Distributions from these funds are received by the Corporation as a result of the liquidation of underlying investments of the funds and/or as income distributions. It is estimated that the underlying assets of the funds will be liquidated over a period of up to 15 years. The value of these investments is at risk to changes in equity markets, general economic conditions and a variety of other factors. The investments are accounted for on the cost or equity method and are individually reviewed for impairment on a quarterly basis by comparing the carrying value to the estimated fair value. These investments may be carried at fair value on a nonrecurring basis when they are deemed to be impaired and written down to fair value. For such investments, fair value measurement guidance permits the use of net asset value, provided the net asset value is calculated by the fund in compliance with fair value measurement guidance applicable to investment companies. Where there is not a readily determinable fair value, the Corporation estimates fair value for indirect private equity and venture capital investments based on the Corporation’s percentage ownership in the net asset value of the entire fund, as reported by the fund, after indication that the fund adheres to applicable fair value measurement guidance. For those funds where the net asset value is not reported by the fund, the Corporation derives the fair value of the fund by estimating the fair value of each underlying investment in the fund. In addition to using qualitative information about each underlying investment, as provided by the fund, the Corporation gives consideration to information pertinent to the specific nature of the debt or equity investment, such as relevant market conditions, offering prices, operating results, financial conditions, exit strategy and other qualitative information, as available. The lack of an independent source to validate fair value estimates, including the impact of future capital calls and transfer restrictions, is an inherent limitation in the valuation process.

The Corporation also holds restricted equity investments, primarily Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) stock. Restricted equity securities are not readily marketable and are recorded at cost (par value) and evaluated for impairment based on the ultimate recoverability of the par value. No significant observable market data for these instruments is available. The Corporation considers the profitability and asset quality of the issuer, dividend payment history and recent redemption experience, when determining the ultimate recoverability of the par value. The Corporation’s investment in FHLB stock totaled $92 million and $128 million at June 30, 2011 and December 31, 2010, respectively, and its investment in FRB stock totaled $59 million at both June 30, 2011 and December 31, 2010. The Corporation believes its investments in FHLB and FRB stock are recoverable at par.

The Corporation classifies nonmarketable equity securities subjected to nonrecurring fair value adjustments as Level 3.

Other real estate

Other real estate is included in “accrued income and other assets” on the consolidated balance sheets and includes primarily foreclosed property. Foreclosed property is initially recorded at fair value, less costs to sell, at the date of foreclosure, establishing a new cost basis. Subsequently, foreclosed property is carried at the lower of cost or fair value, less costs to sell. Other real estate may be carried at fair value on a nonrecurring basis when fair value is less than cost. Fair value is based upon independent market prices, appraised value or management’s estimate of the value. Foreclosed property carried at fair value based on an observable market price or a current appraised value is classified by the Corporation as nonrecurring Level 2. When management determines that the fair value of the foreclosed property requires additional adjustments, either as a result of a non-current appraisal or when there is no observable market price, the Corporation classifies the foreclosed property as nonrecurring Level 3.

Loan servicing rights

Loan servicing rights, included in “accrued income and other assets” on the consolidated balance sheets, are subject to impairment testing. A valuation model is used for impairment testing, which utilizes a discounted cash flow analysis using interest rates and prepayment speed assumptions currently quoted for comparable instruments and a

12

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 3 – FAIR VALUE MEASUREMENTS (continued)

discount rate determined by management. If the valuation model reflects a value less than the carrying value, loan servicing rights are adjusted to fair value through a valuation allowance as determined by the model. As such, the Corporation classifies loan servicing rights subjected to nonrecurring fair value adjustments as Level 3.

Deposit liabilities

The estimated fair value of checking, savings and certain money market deposit accounts is represented by the amounts payable on demand. The estimated fair value of term deposits is calculated by discounting the scheduled cash flows using the period-end rates offered on these instruments.

Short-term borrowings

The carrying amount of federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings approximates the estimated fair value.

Medium- and long-term debt

The carrying value of variable-rate FHLB advances approximates the estimated fair value. The estimated fair value of the Corporation’s remaining variable- and fixed-rate medium- and long-term debt is based on quoted market values. If quoted market values are not available, the estimated fair value is based on the market values of debt with similar characteristics.

Credit-related financial instruments

The estimated fair value of unused commitments to extend credit and standby and commercial letters of credit is represented by the estimated cost to terminate or otherwise settle the obligations with the counterparties. This amount is approximated by the fees currently charged to enter into similar arrangements, considering the remaining terms of the agreements and any changes in the credit quality of counterparties since the agreements were executed. This estimate of fair value does not take into account the significant value of the customer relationships and the future earnings potential involved in such arrangements as the Corporation does not believe that it would be practicable to estimate a representational fair value for these items.

13

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 3 – FAIR VALUE MEASUREMENTS (continued)

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The following tables present the recorded amount of assets and liabilities measured at fair value on a recurring basis as of June 30, 2011 and December 31, 2010.

(in millions)	Total		Level 1		Level 2		Level 3
June 30, 2011
Trading securities:
Deferred compensation plan assets	$	90	$	90	$	—	$	—
Residential mortgage-backed securities (a)		5		—		5		—
State and municipal securities		8		—		6		2
Corporate debt securities		1		—		1		—
Total trading securities		104		90		12		2
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities		20		20		—		—
Residential mortgage-backed securities (a)		6,899		—		6,899		—
State and municipal securities (b)		26		—		—		26
Corporate debt securities:
Auction-rate debt securities		1		—		—		1
Other corporate debt securities		49		—		48		1
Equity and other non-debt securities:
Auction-rate preferred securities		437		—		—		437
Money market and other mutual funds		105		105		—		—
Total investment securities available-for-sale		7,537		125		6,947		465
Derivative assets:
Interest rate contracts		513		—		513		—
Energy derivative contracts		100		—		100		—
Foreign exchange contracts		47		—		47		—
Warrants		8		—		—		8
Total derivative assets		668		—		660		8
Total assets at fair value	$	8,309	$	215	$	7,619	$	475
Derivative liabilities:
Interest rate contracts	$	223	$	—	$	223	$	—
Energy derivative contracts		100		—		100		—
Foreign exchange contracts		40		—		40		—
Other		1		—		—		1
Total derivative liabilities		364		—		363		1
Deferred compensation plan liabilities		90		90		—		—
Total liabilities at fair value	$	454	$	90	$	363	$	1

(a) Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

(b) Primarily auction-rate securities.

14

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 3 – FAIR VALUE MEASUREMENTS (continued)

(in millions)	Total		Level 1		Level 2		Level 3
December 31, 2010
Trading securities:
Deferred compensation plan assets	$	86	$	86	$	—	$	—
Residential mortgage-backed securities (a)		7		—		7		—
Other government-sponsored enterprise securities		1		—		1		—
State and municipal securities		19		—		19		—
Corporate debt securities		4		—		4		—
Other securities		1		—		—		1
Total trading securities		118		86		31		1
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities		131		131		—		—
Residential mortgage-backed securities (a)		6,709		—		6,709		—
State and municipal securities (b)		39		—		—		39
Corporate debt securities:
Auction-rate debt securities		1		—		—		1
Other corporate debt securities		26		—		25		1
Equity and other non-debt securities:
Auction-rate preferred securities		570		—		—		570
Money market and other mutual funds		84		84		—		—
Total investment securities available-for-sale		7,560		215		6,734		611
Derivative assets:
Interest rate contracts		542		—		542		—
Energy derivative contracts		103		—		103		—
Foreign exchange contracts		51		—		51		—
Warrants		7		—		—		7
Total derivative assets		703		—		696		7
Total assets at fair value	$	8,381	$	301	$	7,461	$	619
Derivative liabilities:
Interest rate contracts	$	249	$	—	$	249	$	—
Energy derivative contracts		103		—		103		—
Foreign exchange contracts		48		—		48		—
Other		1		—		—		1
Total derivative liabilities		401		—		400		1
Deferred compensation plan liabilities		86		86		—		—
Total liabilities at fair value	$	487	$	86	$	400	$	1

(a) Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

(b) Primarily auction-rate securities.

There were no significant transfers of assets or liabilities recorded at fair value on a recurring basis into or out of Level 1 and Level 2 fair value measurements during the three- and six-month periods ended June 30, 2011 and 2010.

15

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 3 – FAIR VALUE MEASUREMENTS (continued)

The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three- and six-month periods ended June 30, 2011 and 2010.

			Net Realized/Unrealized Gains (Losses)
	Balance at Beginning  of Period		Recorded in Earnings						Recorded in  Other Comprehensive Income (Pre- tax)											Balance at End of  Period
(in millions)			Realized			Unrealized						Purchases		Sales			Settlements
Three months ended June 30, 2011
Trading securities:
State and municipal securities	$	—	$	—		$	—		$	—		$	2	$	—		$	—		$	2
Investment securities available-for-sale:
State and municipal securities (a)		26		—			—			—			—		—			—			26
Auction-rate debt securities		1		—			—			—			—		—			—			1
Other corporate debt securities		1		—			—			—			—		—			—			1
Auction-rate preferred securities		504		4			—			8			—		(79	)		—			437
Total investment securities available-for-sale		532		4			—			8			—		(79	)		—			465
Derivative assets:
Warrants		8		5			—			—			—		(5	)		—			8
Derivative liabilities:
Other		2		—			—			—			—		—			(1	)		1
Three months ended June 30, 2010
Trading securities:
State and municipal securities	$	—	$	—		$	—		$	—		$	3	$	—		$	—		$	3
Investment securities available-for-sale:
State and municipal securities (a)		45		—			—			(3	)		—		—			—			42
Auction-rate debt securities		144		2			—			9			—		(103	)		—			52
Other corporate debt securities		1		—			—			—			—		—			—			1
Auction-rate preferred securities		663		3			—			(9	)		—		(48	)		—			609
Total investment securities available-for-sale		853		5			—			(3	)		—		(151	)		—			704
Derivative assets:
Warrants		7		—			1			—			—		(1	)		—			7
Derivative liabilities:
Other		—		(1	)		(2	)		—			—		—			(1	)		2

(a) Primarily auction-rate securities

			Net Realized/Unrealized Gains (Losses)
	Balance at Beginning of Period		Recorded in Earnings						Recorded in Other Comprehensive Income (Pre-tax)											Balance at End of Period
(in millions)			Realized			Unrealized						Purchases		Sales			Settlements
Six months ended June 30, 2011
Trading securities:
State and municipal securities	$	—	$	—		$	—		$	—		$	2	$	—		$	—		$	2
Other securities		1		—			—			—			—		(1	)		—			—
Total trading securities		1		—			—			—			2		(1	)		—			2
Investment securities available-for-sale:
State and municipal securities (a)		39		—			—			—			—		(13	)		—			26
Auction-rate debt securities		1		—			—			—			—		—			—			1
Other corporate debt securities		1		—			—			—			—		—			—			1
Auction-rate preferred securities		570		7			—			(3	)		—		(137	)		—			437
Total investment securities available-for-sale		611		7			—			(3	)		—		(150	)		(0	)		465
Derivative assets:
Warrants		7		7			1			—			—		(7	)		—			8
Derivative liabilities:
Other		1		—			(1	)		—			—		—			(1	)		1
Six months ended June 30, 2010
Trading securities:
State and municipal securities	$	—	$	—		$	—		$	—		$	3	$	—		$	—		$	3
Investment securities available-for-sale:
State and municipal securities (a)		46		—			—			(4	)		—		—			—			42
Auction-rate debt securities		150		2			—			4			—		(104	)		—			52
Other corporate debt securities		7		27			—			—			—		—			(33	)		1
Auction-rate preferred securities		706		5			—			(8	)		—		(94	)		—			609
Total investment securities available-for-sale		909		34			—			(8	)		—		(198	)		(33	)		704
Derivative assets:
Warrants		7		2			1			—			—		(3	)		—			7
Derivative liabilities:
Other		—		(1	)		(2	)		—			—		—			(1	)		2

(a) Primarily auction-rate securities

16

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

There were no transfers of assets or liabilities recorded at fair value on a recurring basis into or out of Level 3 fair value measurements during the three- and six-month periods ended June 30, 2011 and 2010.

The following table presents the income statement classification of realized and unrealized gains and losses due to changes in fair value recorded in earnings for the three- and six-month periods ended June 30, 2011 and 2010 for recurring Level 3 assets and liabilities, as shown in the previous table.

	Net Securities Gains (Losses)						Other Noninterest Income				Discontinued Operations		Total
(in millions)	Realized			Unrealized			Realized		Unrealized		Realized		Realized			Unrealized
Three months ended June 30, 2011
Investment securities available-for-sale:
Auction-rate preferred securities	$	4		$	—		$	—	$	—	$	—	$	4		$	—
Derivative assets:
Warrants		—			—			5		—		—		5			—
Three months ended June 30, 2010
Investment securities available-for-sale:
Auction-rate debt securities	$	2		$	—		$	—	$	—	$	—	$	2		$	—
Auction-rate preferred securities		3			—			—		—		—		3			—
Total investment securities available-for-sale		5			—			—		—		—		5			—
Derivative assets:
Warrants		—			—			—		1		—		—			1
Derivative liabilities:
Other		(1	)		(2	)		—		—		—		(1	)		(2	)
Six months ended June 30, 2011
Investment securities available-for-sale:
Auction-rate preferred securities	$	7		$	—		$	—	$	—	$	—	$	7		$	—
Derivative assets:
Warrants		—			—			7		1		—		7			1
Derivative liabilities:
Other		—			(1	)		—		—		—		—			(1	)
Six months ended June 30, 2010
Investment securities available-for-sale:
Auction-rate debt securities	$	2		$	—		$	—	$	—	$	—	$	2		$	—
Other corporate debt securities		—			—			—		—		27		27			—
Auction-rate preferred securities		5			—			—		—		—		5			—
Total investment securities available-for-sale		7			—			—		—		27		34			—
Derivative assets:
Warrants		—			—			2		1		—		2			1
Derivative liabilities:
Other		(1	)		(2	)		—		—		—		(1	)		(2	)

(a) Primarily auction-rate securities

17

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 3 – FAIR VALUE MEASUREMENTS (continued)

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The Corporation may be required, from time to time, to record certain assets and liabilities at fair value on a nonrecurring basis. These include assets that are recorded at the lower of cost or fair value that were recognized at fair value below cost at the end of the period. Assets and liabilities recorded at fair value on a nonrecurring basis are presented in the following table.

(in millions)	Total		Level 2		Level 3
June 30, 2011
Loans held-for-sale:
Residential mortgage	$	7	$	7	$	—
Loans:
Commercial		221		—		221
Real estate construction		129		—		129
Commercial mortgage		363		—		363
Residential mortgage		10		—		10
Lease financing		6		—		6
International		7		—		7
Total loans		736		—		736
Nonmarketable equity securities		2		—		2
Other real estate		26		—		26
Loan servicing rights		4		—		4
Total assets at fair value	$	775	$	7	$	768
Total liabilities at fair value	$	—	$	—	$	—
December 31, 2010
Loans held-for-sale:
Residential mortgage	$	6	$	6	$	—
Loans:
Commercial		200		—		200
Real estate construction		247		—		247
Commercial mortgage		398		—		398
Lease financing		7		—		7
International		2		—		2
Total loans		854		—		854
Nonmarketable equity securities		9		—		9
Other real estate		33		—		33
Loan servicing rights		5		—		5
Total assets at fair value	$	907	$	6	$	901
Total liabilities at fair value	$	—	$	—	$	—

18

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 3 – FAIR VALUE MEASUREMENTS (continued)

Estimated Fair Values of Financial Instruments Not Recorded at Fair Value in their Entirety on a Recurring Basis

The Corporation typically holds the majority of its financial instruments until maturity and thus does not expect to realize many of the estimated fair value amounts disclosed. The disclosures also do not include estimated fair value amounts for items that are not defined as financial instruments, but which have significant value. These include such items as core deposit intangibles, the future earnings potential of significant customer relationships and the value of trust operations and other fee generating businesses. The Corporation believes the imprecision of an estimate could be significant.

The carrying amount and estimated fair value of financial instruments not recorded at fair value in their entirety on a recurring basis on the Corporation’s consolidated balance sheets are as follows:

	June 30, 2011						December 31, 2010
(in millions)	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
Assets
Cash and due from banks	$	987		$	987		$	668		$	668
Interest-bearing deposits with banks		2,479			2,479			1,415			1,415
Loans held-for-sale		20			20			23			23
Total loans, net of allowance for loan losses (a)		38,387			38,456			39,335			39,212
Customers’ liability on acceptances outstanding		10			10			9			9
Nonmarketable equity securities (b)		16			28			47			77
Loan servicing rights		4			4			5			5
Liabilities
Demand deposits (noninterest-bearing)		16,344			16,344			15,538			15,538
Interest-bearing deposits		25,414			25,423			24,933			24,945
Total deposits		41,758			41,767			40,471			40,483
Short-term borrowings		67			67			130			130
Acceptances outstanding		10			10			9			9
Medium- and long-term debt		5,206			5,129			6,138			6,008
Credit-related financial instruments		(93	)		(93	)		(99	)		(99	)

(a) Included $736 million and $854 million of impaired loans recorded at fair value on a nonrecurring basis at June 30, 2011 and December 31, 2010, respectively.

(b) Included $2 million and $9 million of nonmarketable equity securities recorded at fair value on a nonrecurring basis at June 30, 2011 and December 31, 2010, respectively.

19

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 4 – INVESTMENT SECURITIES

A summary of the Corporation’s investment securities available-for-sale follows:

(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2011
U.S. Treasury and other U.S. government agency securities	$	20	$	—	$	—	$	20
Residential mortgage-backed securities (a)		6,741		169		11		6,899
State and municipal securities (b)		32		—		6		26
Corporate debt securities:
Auction-rate debt securities		1		—		—		1
Other corporate debt securities		49		—		—		49
Equity and other non-debt securities:
Auction-rate preferred securities		467		2		32		437
Money market and other mutual funds		105		—		—		105
Total investment securities available-for-sale	$	7,415	$	171	$	49	$	7,537
December 31, 2010
U.S. Treasury and other U.S. government agency securities	$	131	$	—	$	—	$	131
Residential mortgage-backed securities (a)		6,653		95		39		6,709
State and municipal securities (b)		46		—		7		39
Corporate debt securities:
Auction-rate debt securities		1		—		—		1
Other corporate debt securities		26		—		—		26
Equity and other non-debt securities:
Auction-rate preferred securities		597		3		30		570
Money market and other mutual funds		84		—		—		84
Total investment securities available-for-sale	$	7,538	$	98	$	76	$	7,560

(a) Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

(b) Primarily auction-rate securities.

20

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 4 – INVESTMENT SECURITIES (continued)

A summary of the Corporation’s investment securities available-for-sale in an unrealized loss position as of June 30, 2011 and December 31, 2010 follows:

	Impaired
	Less than 12 months				12 months or more				Total
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2011
Residential mortgage-backed securities (a)	$	1,263	$	11	$	—	$	—	$	1,263	$	11
State and municipal securities (b)		—		—		25		6		25		6
Equity and other non-debt securities:
Auction-rate preferred securities		—		—		345		32		345		32
Total impaired securities	$	1,263	$	11	$	370	$	38	$	1,633	$	49
December 31, 2010
Residential mortgage-backed securities (a)	$	1,702	$	39	$	—	$	—	$	1,702	$	39
State and municipal securities (b)		—		—		38		7		38		7
Equity and other non-debt securities:
Auction-rate preferred securities		—		—		436		30		436		30
Total impaired securities	$	1,702	$	39	$	474	$	37	$	2,176	$	76

(a) Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

(b) Primarily auction-rate securities.

As of June 30, 2011, 94 percent of the Corporation’s auction-rate portfolio was rated Aaa/AAA by the credit rating agencies.

At June 30, 2011, the Corporation had 208 securities in an unrealized loss position with no credit impairment, including 152 auction-rate preferred securities, 30 residential mortgage-backed securities and 26 state and municipal auction-rate securities. The unrealized losses for these securities resulted from changes in market interest rates and liquidity. The Corporation ultimately expects full collection of the carrying amount of these securities, does not intend to sell the securities in an unrealized loss position, and it is not more-likely-than-not that the Corporation will be required to sell the securities in an unrealized loss position prior to recovery of amortized cost. The Corporation does not consider these securities to be other-than-temporarily impaired at June 30, 2011.

Sales, calls and write-downs of investment securities available-for-sale resulted in the following gains and losses, recorded in “net securities gains” on the consolidated statements of income, computed based on the adjusted cost of the specific security.

	Six Months Ended June 30,
(in millions)	2011			2010
Securities gains	$	7		$	9
Securities losses		(1	)		(6	)
Total net securities gains	$	6		$	3

21

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 4 – INVESTMENT SECURITIES (continued)

The table below summarizes the amortized cost and fair values of debt securities by contractual maturity. Securities with multiple maturity dates are classified in the period of final maturity. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(in millions)	Amortized		Fair
June 30, 2011	Cost		Value
Contractual maturity
Within one year	$	69	$	69
After one year through five years		466		473
After five years through ten years		55		56
After ten years		6,253		6,397
Subtotal		6,843		6,995
Equity and other nondebt securities:
Auction-rate preferred securities		467		437
Money market and other mutual funds		105		105
Total investment securities available-for-sale	$	7,415	$	7,537

Included in the contractual maturity distribution in the table above were auction-rate securities with a total amortized cost and fair value of $32 million and $26 million, respectively. Auction-rate securities are long-term, floating rate instruments for which interest rates are reset at periodic auctions. At each successful auction, the Corporation has the option to sell the security at par value. Additionally, the issuers of auction-rate securities generally have the right to redeem or refinance the debt. As a result, the expected life of auction-rate securities may differ significantly from the contractual life. Also included in the table above were residential mortgage-backed securities with a total amortized cost and fair value of $6,741 million and $6,899 million, respectively. The actual cash flows of mortgage-backed securities may differ from contractual maturity as the borrowers of the underlying loans may exercise prepayment options.

At June 30, 2011, investment securities with a carrying value of $2.3 billion were pledged where permitted or required by law to secure $1.7 billion of liabilities, primarily public and other deposits of state and local government agencies and derivative instruments.

NOTE 5 – CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES

The following table summarizes nonperforming assets as of June 30, 2011 and December 31, 2010.

(in millions)	June 30, 2011		December 31, 2010
Nonaccrual loans	$	941	$	1,080
Reduced-rate loans (a)		33		43
Total nonperforming loans		974		1,123
Foreclosed property		70		112
Total nonperforming assets	$	1,044	$	1,235

(a) Reduced-rate business loans totaled $13 million and $26 million, respectively, and reduced-rate
retail loans totaled $20 million and $17 million, respectively, at June 30, 2011 and
December 31, 2010.

22

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 5 – CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES (continued)

The following presents an aging analysis of loans as of June 30, 2011 and December 31, 2010.

	Loans Past Due and Still Accruing
(in millions)	30-59 Days		60-89 Days		90 Days or More		Total		Nonaccrual Loans		Current Loans		Total Loans
June 30, 2011
Business loans:
Commercial	$	131	$	20	$	11	$	162	$	261	$	21,629	$	22,052
Real estate construction:
Commercial Real Estate business line (a)		15		1		2		18		137		1,188		1,343
Other business lines (b)		10		—		—		10		2		373		385
Total real estate construction		25		1		2		28		139		1,561		1,728
Commercial mortgage:
Commercial Real Estate business line (a)		31		13		7		51		186		1,693		1,930
Other business lines (b)		71		10		18		99		269		7,281		7,649
Total commercial mortgage		102		23		25		150		455		8,974		9,579
Lease financing		—		—		—		—		6		943		949
International		—		—		—		—		7		1,155		1,162
Total business loans		258		44		38		340		868		34,262		35,470
Retail loans:
Residential mortgage		16		4		15		35		60		1,396		1,491
Consumer:
Home equity		10		5		6		21		4		1,597		1,622
Other consumer		5		1		5		11		9		590		610
Total consumer		15		6		11		32		13		2,187		2,232
Total retail loans		31		10		26		67		73		3,583		3,723
Total loans	$	289	$	54	$	64	$	407	$	941	$	37,845	$	39,193
December 31, 2010
Business loans:
Commercial	$	84	$	28	$	3	$	115	$	252	$	21,778	$	22,145
Real estate construction:
Commercial Real Estate business line (a)		27		—		17		44		259		1,523		1,826
Other business lines (b)		2		—		5		7		4		416		427
Total real estate construction		29		—		22		51		263		1,939		2,253
Commercial mortgage:
Commercial Real Estate business line (a)		8		1		—		9		181		1,747		1,937
Other business lines (b)		28		25		16		69		302		7,459		7,830
Total commercial mortgage		36		26		16		78		483		9,206		9,767
Lease financing		—		—		—		—		7		1,002		1,009
International		1		—		—		1		2		1,129		1,132
Total business loans		150		54		41		245		1,007		35,054		36,306
Retail loans:
Residential mortgage		33		23		7		63		55		1,501		1,619
Consumer:
Home equity		11		4		10		25		5		1,674		1,704
Other consumer		4		2		4		10		13		584		607
Total consumer		15		6		14		35		18		2,258		2,311
Total retail loans		48		29		21		98		73		3,759		3,930
Total loans	$	198	$	83	$	62	$	343	$	1,080	$	38,813	$	40,236

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

23

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 5 – CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES (continued)

The following table details the changes in the allowance for loan losses for the three- and six-month periods ended June 30, 2011 and 2010 and related loan amounts as of June 30, 2011 and 2010.

	June 30, 2011
(in millions)	Business Loans			Retail Loans			Total			June 30, 2010
Three Months Ended
Allowance for loan losses:
Balance at beginning of period	$	786		$	63		$	849		$	987
Loan charge-offs		(109	)		(16	)		(125	)		(158	)
Recoveries on loans previously charged-off		33			2			35			12
Net loan charge-offs		(76	)		(14	)		(90	)		(146	)
Provision for loan losses		28			19			47			126
Balance at end of period	$	738		$	68		$	806		$	967
Six Months Ended
Allowance for loan losses:
Balance at beginning of period	$	839		$	62		$	901		$	985
Loan charge-offs		(222	)		(26	)		(248	)		(342	)
Recoveries on loans previously charged-off		54			3			57			23
Net loan charge-offs		(168	)		(23	)		(191	)		(319	)
Provision for loan losses		67			29			96			301
Balance at end of period	$	738		$	68		$	806		$	967
Allowance for loan losses:
Individually evaluated for impairment	$	172		$	4		$	176		$	205
Collectively evaluated for impairment		566			64			630			762
Total allowance for loan losses	$	738		$	68		$	806		$	967
Loans:
Individually evaluated for impairment	$	808		$	49		$	857		$	956
Collectively evaluated for impairment		34,662			3,674			38,336			39,646
Total loans evaluated for impairment	$	35,470		$	3,723		$	39,193		$	40,602

Changes in the allowance for credit losses on lending-related commitments, included in “accrued expenses and other liabilities” on the consolidated balance sheets, are summarized in the following table.

	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)	2011			2010		2011			2010
Balance at beginning of period	$	32		$	44	$	35		$	37
Provision for credit losses on lending-related commitments		(2	)		—		(5	)		7
Balance at end of period	$	30		$	44	$	30		$	44
Unfunded lending-related commitments sold	$	3		$	2	$	5		$	2

24

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 5 – CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES (continued)

The following table presents additional information regarding individually evaluated impaired loans.

	Recorded Investment In:
(in millions)	Impaired Loans with No Related Allowance		Impaired Loans with Related Allowance		Total Impaired Loans		Unpaid Principal Balance		Related Allowance for Loan Losses
June 30, 2011
Business loans:
Commercial	$	10	$	258	$	268	$	416	$	69
Real estate construction:
Commercial Real Estate business line (a)		—		128		128		217		19
Other business lines (b)		—		3		3		10		2
Total real estate construction		—		131		131		227		21
Commercial mortgage:
Commercial Real Estate business line (a)		—		183		183		225		37
Other business lines (b)		—		213		213		282		42
Total commercial mortgage		—		396		396		507		79
Lease financing		—		6		6		14		1
International		—		7		7		13		2
Total business loans		10		798		808		1,177		172
Retail loans:
Residential mortgage		3		38		41		47		3
Consumer loans:
Other consumer		—		8		8		13		1
Total retail loans		3		46		49		60		4
Total individually evaluated impaired loans	$	13	$	844	$	857	$	1,237	$	176
December 31, 2010
Business loans:
Commercial	$	9	$	237	$	246	$	398	$	55
Real estate construction:
Commercial Real Estate business line (a)		—		249		249		400		51
Other business lines (b)		—		—		—		—		—
Total real estate construction		—		249		249		400		51
Commercial mortgage:
Commercial Real Estate business line (a)		—		178		178		282		35
Other business lines (b)		—		245		245		325		49
Total commercial mortgage		—		423		423		607		84
Lease financing		—		7		7		15		1
International		—		2		2		2		1
Total business loans		9		918		927		1,422		192
Retail loans:
Residential mortgage		8		29		37		41		3
Consumer loans:
Other consumer		—		10		10		14		2
Total retail loans		8		39		47		55		5
Total individually evaluated impaired loans	$	17	$	957	$	974	$	1,477	$	197

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

25

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 5 – CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES (continued)

The following table presents information regarding average individually evaluated impaired loans and the related interest recognized for the three- and six-month periods ended June 30, 2011 and 2010.

	2011				2010
(in millions)	Average Impaired Loans for the Period		Interest Income Recognized for the Period		Average Impaired Loans for the Period		Interest Income Recognized for the Period
Three Months Ended June 30
Business loans:
Commercial	$	242	$	4	$	213	$	3
Real estate construction:
Commercial Real Estate business line (a)		159		—		339		1
Other business lines (b)		1		—		3		—
Total real estate construction		160		—		342		1
Commercial mortgage:
Commercial Real Estate business line (a)		192		1		151		1
Other business lines (b)		224		1		212		1
Total commercial mortgage		416		2		363		2
Lease financing		7		—		11		—
International		6		—		5		—
Total business loans		831		6		934		6
Retail loans:
Residential mortgage		41		—		31		—
Consumer loans:
Other consumer		7		—		2		—
Total retail loans		48		—		33		—
Total individually evaluated impaired loans	$	879	$	6	$	967	$	6
Six Months Ended June 30
Business loans:
Commercial	$	244	$	5	$	206	$	3
Real estate construction:
Commercial Real Estate business line (a)		189		—		390		1
Other business lines (b)		1		—		2		—
Total real estate construction		190		—		392		1
Commercial mortgage:
Commercial Real Estate business line (a)		187		1		144		1
Other business lines (b)		231		2		175		1
Total commercial mortgage		418		3		319		2
Lease financing		7		—		12		—
International		4		—		14		1
Total business loans		863		8		943		7
Retail loans:
Residential mortgage		39		—		28		—
Consumer loans:
Other consumer		8		—		2		—
Total retail loans		47		—		30		—
Total individually evaluated impaired loans	$	910	$	8	$	973	$	7

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

26

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 5 – CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES (continued)

The following table presents loans by credit quality indicator, based on internal risk ratings assigned to each business loan at the time of approval and subjected to subsequent reviews, generally at least annually, and to pools of retail loans with similar risk characteristics.

	Internally Assigned Rating
(in millions)	Pass (a)		Special Mention (b)		Substandard (c)		Nonaccrual (d)		Total
June 30, 2011
Business loans:
Commercial	$	20,099	$	900	$	792	$	261	$	22,052
Real estate construction:
Commercial Real Estate business line (e)		820		202		184		137		1,343
Other business lines (f)		341		24		18		2		385
Total real estate construction		1,161		226		202		139		1,728
Commercial mortgage:
Commercial Real Estate business line (e)		1,179		328		237		186		1,930
Other business lines (f)		6,400		504		476		269		7,649
Total commercial mortgage		7,579		832		713		455		9,579
Lease financing		912		11		20		6		949
International		1,061		60		34		7		1,162
Total business loans		30,812		2,029		1,761		868		35,470
Retail loans:
Residential mortgage		1,400		5		26		60		1,491
Consumer:
Home equity		1,573		16		29		4		1,622
Other consumer		581		10		10		9		610
Total consumer		2,154		26		39		13		2,232
Total retail loans		3,554		31		65		73		3,723
Total loans	$	34,366	$	2,060	$	1,826	$	941	$	39,193
December 31, 2010
Business loans:
Commercial	$	19,884	$	1,015	$	994	$	252	$	22,145
Real estate construction:
Commercial Real Estate business line (e)		1,025		333		209		259		1,826
Other business lines (f)		383		20		20		4		427
Total real estate construction		1,408		353		229		263		2,253
Commercial mortgage:
Commercial Real Estate business line (e)		1,104		372		280		181		1,937
Other business lines (f)		6,595		508		425		302		7,830
Total commercial mortgage		7,699		880		705		483		9,767
Lease financing		962		13		27		7		1,009
International		963		112		55		2		1,132
Total business loans		30,916		2,373		2,010		1,007		36,306
Retail loans:
Residential mortgage		1,541		6		17		55		1,619
Consumer:
Home equity		1,662		26		11		5		1,704
Other consumer		575		8		11		13		607
Total consumer		2,237		34		22		18		2,311
Total retail loans		3,778		40		39		73		3,930
Total loans	$	34,694	$	2,413	$	2,049	$	1,080	$	40,236

(a) Includes all loans not included in the categories of special mention, substandard or nonaccrual.

(b) Special mention loans are accruing loans that have potential credit weaknesses that deserve management’s close attention, such as loans to borrowers who may be experiencing financial difficulties that may result in deterioration of repayment prospects from the borrower at some future date. Included in the special mention category were $509 million and $546 million at June 30, 2011 and December 31, 2010, respectively, of loans proactively monitored by management that were considered “pass” by regulatory authorities.

(c) Substandard loans are accruing loans that have a well-defined weakness, or weaknesses, such as loans to borrowers who may be experiencing losses from operations or inadequate liquidity of a degree and duration that jeopardizes the orderly repayment of the loan. Substandard loans also are distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. This category is generally consistent with the “substandard” category as defined by regulatory authorities.

(d) Nonaccrual loans are loans for which the accrual of interest has been discontinued. For further information, refer to the Nonperforming Assets subheading in Note 1 - Summary of Significant Accounting Policies - on page 76 of the Corporation’s Annual Report for the year ended December 31, 2010. This category is generally consistent with the “doubtful” category as defined by regulatory authorities.

(e) Primarily loans to real estate investors and developers.

(f) Primarily loans secured by owner-occupied real estate.

27

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 6 – DERIVATIVE AND CREDIT-RELATED FINANCIAL INSTRUMENTS

In the normal course of business, the Corporation enters into various transactions involving derivative and credit-related financial instruments to manage exposure to fluctuations in interest rate, foreign currency and other market risks and to meet the financing needs of customers. These financial instruments involve, to varying degrees, elements of market and credit risk. Derivatives are carried at fair value in the consolidated financial statements. Market and credit risk are included in the determination of fair value.

Market risk is the potential loss that may result from movements in interest rates, foreign currency exchange rates or energy commodity prices that cause an unfavorable change in the value of a financial instrument. The Corporation manages this risk by establishing monetary exposure limits and monitoring compliance with those limits. Market risk inherent in interest rate and energy contracts entered into on behalf of customers is mitigated by taking offsetting positions, except in those circumstances when the amount, tenor and/or contract rate level results in negligible economic risk, whereby the cost of purchasing an offsetting contract is not economically justifiable. The Corporation mitigates most of the inherent market risk in foreign exchange contracts entered into on behalf of customers by taking offsetting positions and manages the remainder through individual foreign currency position limits and aggregate value-at-risk limits. These limits are established annually and reviewed quarterly. Market risk inherent in derivative instruments held or issued for risk management purposes is typically offset by changes in the fair value of the assets or liabilities being hedged.

Credit risk is the possible loss that may occur in the event of nonperformance by the counterparty to a financial instrument. For customer-initiated derivatives, the Corporation attempts to minimize credit risk arising from financial instruments by evaluating the creditworthiness of each counterparty, adhering to the same credit approval process used for traditional lending activities and obtaining collateral as deemed necessary.

For derivatives with dealer counterparties, the Corporation utilizes both counterparty risk limits and monitoring procedures as well as master netting arrangements and bilateral collateral agreements to facilitate the management of credit risk. Master netting arrangements effectively reduce credit risk by permitting settlement, on a net basis, of contracts entered into with the same counterparty. Bilateral collateral agreements require daily exchange of cash or highly rated securities issued by the U.S. Treasury or other U.S. government agencies to collateralize amounts due to either party beyond certain risk limits. At June 30, 2011, counterparties had pledged marketable investment securities to secure approximately 85 percent of the fair value of contracts with bilateral collateral agreements in an unrealized gain position. For those counterparties not covered under bilateral collateral agreements, collateral is obtained, if deemed necessary, based on the results of management’s credit evaluation of the counterparty. Collateral varies, but may include cash, investment securities, accounts receivable, equipment or real estate. Included in the fair value of derivative instruments are credit valuation adjustments reflecting counterparty credit risk. These adjustments are determined by applying a credit spread for the counterparty or the Corporation, as appropriate, to the total expected exposure of the derivative.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position on June 30, 2011 was $114 million, for which the Corporation had pledged collateral of $99 million in the normal course of business. The credit-risk-related contingent features require the Corporation’s debt to maintain an investment grade credit rating from each of the major credit rating agencies. If the Corporation’s debt were to fall below investment grade, the counterparties to the derivative instruments could require additional overnight collateral on derivative instruments in net liability positions. If the credit-risk-related contingent features underlying these agreements had been triggered on June 30, 2011, the Corporation would have been required to assign an additional $15 million of collateral to its counterparties.

28

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 6 – DERIVATIVE AND CREDIT-RELATED FINANCIAL INSTRUMENTS (continued)

Derivative Instruments

The following table presents the composition of the Corporation’s derivative instruments held or issued for risk management purposes or in connection with customer-initiated and other activities at June 30, 2011 and December 31, 2010. The table excludes commitments, warrants accounted for as derivatives and a derivative related to the Corporation’s 2008 sale of its remaining ownership of Visa shares.

	June 30, 2011						December 31, 2010
	Notional/ Contract Amount (b)		Fair Value (a)				Notional/ Contract Amount (b)		Fair Value (a)
			Asset Derivatives		Liability Derivatives				Asset Derivatives		Liability Derivatives
(in millions)
Risk management purposes
Derivatives designated as hedging instruments
Interest rate contracts:
Swaps - cash flow - receive fixed/pay floating	$	—	$	—	$	—	$	800	$	3	$	—
Swaps - fair value - receive fixed/pay floating		1,450		261		—		1,600		263		—
Total risk management interest rate swaps designated as hedging instruments		1,450		261		—		2,400		266		—
Derivatives used as economic hedges
Foreign exchange contracts:
Spot, forwards and swaps		386		2		1		220		2		—
Total risk management purposes	$	1,836	$	263	$	1	$	2,620	$	268	$	—
Customer-initiated and other activities
Interest rate contracts:
Caps and floors written	$	553	$	—	$	5	$	697	$	—	$	7
Caps and floors purchased		553		5		—		697		7		—
Swaps		9,231		247		218		9,126		269		242
Total interest rate contracts		10,337		252		223		10,520		276		249
Energy derivative contracts:
Caps and floors written		1,254		—		71		1,106		—		62
Caps and floors purchased		1,254		71		—		1,106		62		—
Swaps		413		29		29		411		41		41
Total energy derivative contracts		2,921		100		100		2,623		103		103
Foreign exchange contracts:
Spot, forwards, futures, options and swaps		2,621		45		39		2,497		49		48
Total customer-initiated and other activities	$	15,879	$	397	$	362	$	15,640	$	428	$	400
Total derivatives	$	17,715	$	660	$	363	$	18,260	$	696	$	400

(a) Asset derivatives are included in “accrued income and other assets” and liability derivatives are included in “accrued expenses and other liabilities” on the consolidated balance sheets. Included in the fair value of derivative assets and liabilities are credit valuation adjustments reflecting counterparty credit risk and credit risk of the Corporation. The fair value of derivative assets included credit valuation adjustments for counterparty credit risk totaling $4 million and $5 million at June 30, 2011 and December 31, 2010, respectively.

(b) Notional or contract amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets.

29

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 6 – DERIVATIVE AND CREDIT-RELATED FINANCIAL INSTRUMENTS (continued)

Risk Management

As an end-user, the Corporation employs a variety of financial instruments for risk management purposes, including cash instruments, such as investment securities, as well as derivative instruments. Activity related to these instruments is centered predominantly in the interest rate markets and mainly involves interest rate swaps. Various other types of instruments also may be used to manage exposures to market risks, including interest rate caps and floors, total return swaps, foreign exchange forward contracts and foreign exchange swap agreements.

As part of a fair value hedging strategy, the Corporation entered into interest rate swap agreements for interest rate risk management purposes. These interest rate swap agreements effectively modify the Corporation’s exposure to interest rate risk by converting fixed-rate debt to a floating rate. These agreements involve the receipt of fixed-rate interest amounts in exchange for floating-rate interest payments over the life of the agreement, without an exchange of the underlying principal amount.

Risk management fair value interest rate swaps generated net interest income of $18 million and $36 million for the three- and six-month periods ended June 30, 2011, respectively, compared to net interest income of $20 million and $39 million for the three- and six-month periods ended June 30, 2010, respectively.

The net gains (losses) recognized in other noninterest income (i.e., the ineffective portion) in the consolidated statements of income on risk management derivatives designated as fair value hedges of fixed-rate debt was as follows.

	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)	2011		2010			2011		2010
Interest rate swaps	$	—	$	(1	)	$	1	$	(2	)

As part of a cash flow hedging strategy, the Corporation had entered into interest rate swap agreements that effectively converted a portion of existing and forecasted floating-rate loans to a fixed-rate basis, thus reducing the impact of interest rate changes on future interest income over the life of the agreements. In the first quarter 2011, the remaining $800 million notional amount of interest rate swap agreements outstanding at December 31, 2010 matured. As of June 30, 2011 the Corporation had no interest rate swap agreements designated as cash flow hedges of loans outstanding.

The net gains (losses) recognized in income and OCI on risk management derivatives designated as cash flow hedges of loans for the three- and six-month periods ended June 30, 2011 and 2010 are displayed in the table below.

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2011		2010		2011			2010
Interest rate swaps
Gain (loss) recognized in OCI (effective portion)	$	—	$	1	$	(2	)	$	7
Gain (loss) recognized in other noninterest income (ineffective portion)		—		—		1			(3	)
Gain reclassified from accumulated OCI into interest and fees on loans (effective portion)		—		9		1			17

Foreign exchange rate risk arises from changes in the value of certain assets and liabilities denominated in foreign currencies. The Corporation employs spot and forward contracts in addition to swap contracts to manage exposure to these and other risks.

30

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 6 – DERIVATIVE AND CREDIT-RELATED FINANCIAL INSTRUMENTS (continued)

The Corporation recognized an insignificant amount of net gains (losses) on risk management derivative instruments used as economic hedges in other noninterest income in the consolidated statements of income in the three- and six-month periods ended June 30, 2011 and 2010.

The following table summarizes the expected weighted average remaining maturity of the notional amount of risk management interest rate swaps and the weighted average interest rates associated with amounts expected to be received or paid on interest rate swap agreements as of June 30, 2011 and December 31, 2010.

			Weighted Average
(dollar amounts in millions)	Notional Amount		Remaining Maturity (in years)		Receive Rate			Pay Rate (a)
June 30, 2011
Swaps - fair value - receive fixed/pay floating rate
Medium- and long-term debt designation	$	1,450		5.9		5.45	%		0.45	%
Total risk management interest rate swaps	$	1,450
December 31, 2010
Swaps - cash flow - receive fixed/pay floating rate
Variable rate loan designation	$	800		0.1		4.75	%		3.25	%
Swaps - fair value - receive fixed/pay floating rate
Medium- and long-term debt designation		1,600		7.1		5.73			0.85
Total risk management interest rate swaps	$	2,400

(a) Variable rates paid on receive fixed swaps are based on prime and six-month LIBOR rates in effect at June 30, 2011 and December 31, 2010.

Management believes these hedging strategies achieve the desired relationship between the rate maturities of assets and funding sources which, in turn, reduce the overall exposure of net interest income to interest rate risk, although there can be no assurance that such strategies will be successful.

Customer-Initiated and Other

Fee income is earned from entering into various transactions at the request of customers (customer-initiated contracts), principally foreign exchange contracts, interest rate contracts and energy derivative contracts. For customer-initiated foreign exchange contracts, the Corporation mitigates most of the inherent market risk by taking offsetting positions and manages the remainder through individual foreign currency position limits and aggregate value-at-risk limits. These limits are established annually and reviewed quarterly.

For those customer-initiated derivative contracts which were not offset or where the Corporation holds a speculative position within the limits described above, the Corporation recognized an insignificant amount of net gains in “other noninterest income” in the consolidated statements of income in both the three-month periods ended June 30, 2011 and 2010, and an insignificant amount and $1 million of net gains in the six-month periods ended June 30, 2011 and 2010, respectively.

31

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 6 – DERIVATIVE AND CREDIT-RELATED FINANCIAL INSTRUMENTS (continued)

Fair values of customer-initiated and other derivative instruments represent the net unrealized gains or losses on such contracts and are recorded in the consolidated balance sheets. Changes in fair value are recognized in the consolidated statements of income. The net gains recognized in income on customer-initiated derivative instruments, net of the impact of offsetting positions, were as follows.

		Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	Location of Gain	2011		2010		2011		2010
Interest rate contracts	Other noninterest income	$	2	$	4	$	8	$	7
Energy derivative contracts	Other noninterest income		1		1		1		1
Foreign exchange contracts	Foreign exchange income		9		10		17		19
Total		$	12	$	15	$	26	$	27

Additional information regarding the nature, terms and associated risks of derivative instruments can be found in the Corporation’s 2010 Annual Report on page 55 and in Notes 1 and 9 to the consolidated financial statements.

Credit-Related Financial Instruments

The Corporation issues off-balance sheet financial instruments in connection with commercial and consumer lending activities. The Corporation’s credit risk associated with these instruments is represented by the contractual amounts indicated in the following table.

(in millions)	June 30, 2011		December 31, 2010
Unused commitments to extend credit:
Commercial and other	$	23,612	$	23,578
Bankcard, revolving check credit and home equity loan commitments		1,565		1,568
Total unused commitments to extend credit	$	25,177	$	25,146
Standby letters of credit	$	5,282	$	5,453
Commercial letters of credit		132		93
Other credit-related financial instruments		1		1

The Corporation maintains an allowance to cover probable credit losses inherent in lending-related commitments, including unused commitments to extend credit, letters of credit and financial guarantees. At June 30, 2011 and December 31, 2010, the allowance for credit losses on lending-related commitments, included in “accrued expenses and other liabilities” on the consolidated balance sheets, was $30 million and $35 million, respectively.

Unused Commitments to Extend Credit

Commitments to extend credit are legally binding agreements to lend to a customer, provided there is no violation of any condition established in the contract. These commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many commitments expire without being drawn upon, the total contractual amount of commitments does not necessarily represent future cash requirements of the Corporation. Commercial and other unused commitments are primarily variable rate commitments. The allowance for credit losses on lending-related commitments included $13 million and $16 million, at June 30, 2011 and December 31, 2010, respectively, for probable credit losses inherent in the Corporation’s unused commitments to extend credit.

At June 30, 2011 and December 31, 2010, commitments to lend additional funds to borrowers whose terms have been modified in troubled debt restructurings totaled $10 million and $7 million, respectively.

32

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 6 – DERIVATIVE AND CREDIT-RELATED FINANCIAL INSTRUMENTS (continued)

Standby and Commercial Letters of Credit

Standby letters of credit represent conditional obligations of the Corporation which guarantee the performance of a customer to a third party. Standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. Commercial letters of credit are issued to finance foreign or domestic trade transactions. These contracts expire in decreasing amounts through the year 2019. The Corporation may enter into participation arrangements with third parties that effectively reduce the maximum amount of future payments which may be required under standby and commercial letters of credit. These risk participations covered $257 million and $298 million of the $5.4 billion and $5.5 billion standby and commercial letters of credit outstanding at June 30, 2011 and December 31, 2010, respectively.

The carrying value of the Corporation’s standby and commercial letters of credit, included in “accrued expenses and other liabilities” on the consolidated balance sheet, totaled $80 million at June 30, 2011, including $63 million of deferred fees and $17 million in the allowance for credit losses on lending-related commitments. At December 31, 2010, the comparable amounts were $83 million, $64 million and $19 million, respectively.

The following table presents a summary of internally classified watch list standby and commercial letters of credit at June 30, 2011 and December 31, 2010. The Corporation’s internal watch list is generally consistent with loans in the Special Mention, Substandard and Doubtful (nonaccrual) categories defined by regulatory authorities. The Corporation manages credit risk through underwriting, periodically reviewing and approving its credit exposures using Board committee approved credit policies and guidelines.

(dollar amounts in millions)	June 30, 2011			December 31, 2010
Total watch list standby and commercial letters of credit	$	233		$	243
As a percentage of total outstanding standby and commercial letters of credit		4.3	%		4.4	%

Other credit-related financial instruments

The Corporation enters into credit risk participation agreements, under which the Corporation assumes credit exposure associated with a borrower’s performance related to certain interest rate derivative contracts. The Corporation is not a party to the interest rate derivative contracts and only enters into these credit risk participation agreements in instances in which the Corporation is also a party to the related loan participation agreement for such borrowers. The Corporation manages its credit risk on the credit risk participation agreements by monitoring the creditworthiness of the borrowers, which is based on the normal credit review process had it entered into the derivative instruments directly with the borrower. The notional amount of such credit risk participation agreement reflects the pro-rata share of the derivative instrument, consistent with its share of the related participated loan. As of June 30, 2011 and December 31, 2010, the total notional amount of the credit risk participation agreements was approximately $305 million and $316 million, respectively, and the fair value, included in customer-initiated interest rate contracts recorded in “accrued expenses and other liabilities” on the consolidated balance sheets, was insignificant for each period. The maximum estimated exposure to these agreements, as measured by projecting a maximum value of the guaranteed derivative instruments, assuming 100 percent default by all obligors on the maximum values, was approximately $12 million at both June 30, 2011 and December 31, 2010. In the event of default, the lead bank has the ability to liquidate the assets of the borrower, in which case the lead bank would be required to return a percentage of the recouped assets to the participating banks. As of June 30, 2011, the credit risk participation agreements had a weighted average remaining maturity for outstanding agreements of 2.5 years.

In 2008, the Corporation sold its remaining ownership of Visa Class B shares and entered into a derivative contract. Under the terms of the derivative contract, the Corporation will compensate the counterparty primarily for dilutive adjustments made to the conversion factor of the Visa Class B shares to Class A shares based on the ultimate outcome of litigation involving Visa. Conversely, the Corporation will be compensated by the counterparty for any increase in the conversion factor from anti-dilutive adjustments. The notional amount of the derivative contract was equivalent to approximately 780 thousand Visa Class B shares. The fair value of the derivative liability, included in “accrued expenses and other liabilities” on the consolidated balance sheets, was $1 million at both June 30, 2011 and December 31, 2010.

33

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 7 – VARIABLE INTEREST ENTITIES (VIEs)

The Corporation evaluates its interest in certain entities to determine if these entities meet the definition of a VIE and whether the Corporation is the primary beneficiary and should consolidate the entity based on the variable interests it held both at inception and when there is a change in circumstances that require a reconsideration. The following provides a summary of the VIEs in which the Corporation has an interest.

The Corporation has a limited partnership interest in 149 low income housing tax credit/historic rehabilitation tax credit partnerships. These entities meet the definition of a VIE; however, the Corporation is not the primary beneficiary of the entities, as the general partner has both the power to direct the activities that most significantly impact the economic performance of the entities and the obligation to absorb losses or the right to receive benefits that could be significant to the entities. While the partnership agreements allow the limited partners, through a majority vote, to remove the general partner, this right is not deemed to be substantive as the general partner can only be removed for cause.

The Corporation accounts for its interest in these partnerships on either the cost or equity method. Exposure to loss as a result of the Corporation’s involvement with these entities at June 30, 2011 was limited to the book basis of the Corporation’s investment of approximately $337 million, which includes unused commitments for future investments.

As a limited partner, the Corporation obtains income tax credits and deductions from the operating losses of these low income housing tax credit/historic rehabilitation tax credit partnerships, which are recorded as a reduction of income tax expense (or an increase to income tax benefit) and a reduction of federal income taxes payable. These income tax credits and deductions are allocated to the funds’ investors based on their ownership percentages. Investment balances, including all legally binding commitments to fund future investments, are included in “accrued income and other assets” on the consolidated balance sheets, with amortization and other write-downs of investments recorded in “other noninterest income” on the consolidated statements of income. In addition, a liability is recognized in “accrued expenses and other liabilities” on the consolidated balance sheets for all legally binding unfunded commitments to fund low income housing partnerships ($78 million at June 30, 2011).

The Corporation provided no financial or other support that was not contractually required to any of the above VIEs during the six-month periods ended June 30, 2011 and 2010.

The following table summarizes the impact of these VIEs on line items on the Corporation’s consolidated statements of income.

	Three Months Ended						Six Months Ended
(in millions)	June 30,						June 30,
Classification in Earnings	2011			2010			2011			2010
Other noninterest income	$	(13	)	$	(12	)	$	(26	)	$	(24	)
Provision (benefit) for income taxes (a)		(13	)		(12	)		(26	)		(24	)

(a) Income tax credits from low income housing tax credit/historic rehabilitation tax credit partnerships.

Additional information regarding the Corporation’s consolidation policy can be found in Note 1 to the consolidated financial statements in the Corporation’s 2010 Annual Report.

34

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 8 – MEDIUM- AND LONG-TERM DEBT

Medium- and long-term debt is summarized as follows:

(in millions)	June 30, 2011		December 31, 2010
Parent company
Subordinated notes:
4.80% subordinated notes due 2015	$	337	$	337
Medium-term notes:
3.00% notes due 2015		298		298
Total parent company		635		635
Subsidiaries
Subordinated notes:
5.70% subordinated notes due 2014		279		280
5.75% subordinated notes due 2016		692		691
5.20% subordinated notes due 2017		572		568
8.375% subordinated notes due 2024		191		191
7.875% subordinated notes due 2026		215		213
Total subordinated notes		1,949		1,943
Medium-term notes:
Floating-rate based on LIBOR indices due 2011 to 2012		583		1,017
Federal Home Loan Bank advances:
Floating-rate based on LIBOR indices due 2011 to 2014		2,000		2,500
Other notes:
6.0% - 6.4% fixed-rate notes due 2020		39		43
Total subsidiaries		4,571		5,503
Total medium- and long-term debt	$	5,206	$	6,138

The carrying value of medium- and long-term debt was adjusted to reflect the gain or loss attributable to the risk hedged with interest rate swaps.

All subordinated notes with maturities greater than one year qualify as Tier 2 capital.

Comerica Bank (the Bank), a subsidiary of the Corporation, is a member of the FHLB, which provides short- and long-term funding collateralized by mortgage-related assets to its members. FHLB advances bear interest at variable rates based on LIBOR and were secured by a blanket lien on $15 billion of real estate-related loans at June 30, 2011.

NOTE 9 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) includes the change in net unrealized gains and losses on investment securities available-for-sale, the change in accumulated net gains and losses on cash flow hedges and the change in the accumulated defined benefit and other postretirement plans adjustment. Total comprehensive income was $280 million and $218 million for the six months ended June 30, 2011 and 2010, respectively. The $62 million increase in total comprehensive income for the six months ended June 30, 2011, when compared to the same period in the prior year, resulted primarily from a $77 million increase in net income, partially offset by a $29 million after-tax decrease in net unrealized gains on investment securities available-for-sale. The following table presents reconciliations of the components of accumulated other comprehensive income (loss) for the six months ended June 30, 2011 and 2010.

35

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 9 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (continued)

	Six Months Ended June 30,
(in millions)	2011			2010
Accumulated net unrealized gains on investment securities available-for-sale:
Balance at beginning of period, net of tax	$	14		$	11
Net unrealized holding gains arising during the period		106			149
Less: Reclassification adjustment for net gains included in net income		6			3
Change in net unrealized gains before income taxes		100			146
Less: Provision for income taxes		37			54
Change in net unrealized gains on investment securities available-for-sale, net of tax		63			92
Balance at end of period, net of tax	$	77		$	103
Accumulated net gains on cash flow hedges:
Balance at beginning of period, net of tax	$	2		$	18
Net cash flow hedge gains (losses) arising during the period		(2	)		7
Less: Reclassification adjustment for net gains included in net income		1			17
Change in net cash flow hedge gains (losses) before income taxes		(3	)		(10	)
Less: Provision (benefit) for income taxes		(1	)		(4	)
Change in net cash flow hedge gains, net of tax		(2	)		(6	)
Balance at end of period, net of tax	$	—		$	12
Accumulated defined benefit pension and other postretirement plans adjustment:
Balance at beginning of period, net of tax	$	(405	)	$	(365	)
Net defined benefit pension and other postretirement adjustment arising during the period		7			—
Less: Adjustment for amounts recognized as components of net periodic benefit cost during the period		(24	)		(16	)
Change in defined benefit pension and other postretirement plans adjustment before income taxes		31			16
Less: Provision for income taxes		11			6
Change in defined benefit pension and other postretirement plans adjustment, net of tax		20			10
Balance at end of period, net of tax	$	(385	)	$	(355	)
Total accumulated other comprehensive loss at end of period, net of tax	$	(308	)	$	(240	)

36

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 10 – NET INCOME (LOSS) PER COMMON SHARE

Basic and diluted income (loss) from continuing operations per common share and net income (loss) per common share for the three- and six-month periods ended June 30, 2011 and 2010 are presented in the following table.

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share data)	2011		2010		2011		2010
Basic and diluted
Income from continuing operations	$	96	$	70	$	199	$	105
Less:
Preferred stock dividends		—		—		—		29
Redemption discount accretion on preferred stock		—		—		—		94
Income allocated to participating securities		1		1		2		—
Income (loss) from continuing operations attributable to common shares	$	95	$	69	$	197	$	(18	)
Net income	$	96	$	70	$	199	$	122
Less:
Preferred stock dividends		—		—		—		29
Redemption discount accretion on preferred stock		—		—		—		94
Income allocated to participating securities		1		1		2		—
Net income (loss) attributable to common shares	$	95	$	69	$	197	$	(1	)
Basic average common shares		175		175		175		165
Basic income (loss) from continuing operations per common share	$	0.54	$	0.40	$	1.12	$	(0.11	)
Basic net income (loss) per common share	$	0.54	$	0.40	$	1.12	$	(0.01	)
Basic average common shares		175		175		175		165
Dilutive common stock equivalents:
Net effect of the assumed exercise of stock options		—		—		—		—
Net effect of the assumed exercise of warrants		3		3		3		—
Diluted average common shares		178		178		178		165
Diluted income (loss) from continuing operations per common share	$	0.53	$	0.39	$	1.10	$	(0.11	)
Diluted net income (loss) per common share	$	0.53	$	0.39	$	1.10	$	(0.01	)

The following average shares related to outstanding options to purchase shares of common stock were not included in the computation of diluted net income (loss) per common share because the exercise prices of the options were greater than the average market price of common shares for the period.

	Three Months Ended June  30,				Six Months Ended June  30,
(shares in millions)	2011		2010		2011		2010
Average shares related to outstanding options		16.8		13.9		16.2		14.4
Range of exercise prices	$	36.24 - $64.50	$	40.32 - $64.50	$	36.24 - $64.50	$	39.19 - $64.50

Due to the net loss from continuing operations attributable to common shares for the six months ended June 30, 2010, common stock equivalents for options to purchase 5.1 million shares and warrants to purchase 11.5 million shares, with average exercise prices less than the average market price of common shares for the period, were excluded from the computation of diluted net loss per common share, as their inclusion would have been anti-dilutive.

37

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 11 – EMPLOYEE BENEFIT PLANS

Net periodic benefit costs are charged to “employee benefits expense” on the consolidated statements of income. The components of net periodic benefit cost for the Corporation’s qualified pension plan, non-qualified pension plan and postretirement benefit plan are as follows:

Qualified Defined Benefit Pension Plan	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2011			2010			2011			2010
Service cost	$	8		$	8		$	16		$	15
Interest cost		19			19			38			36
Expected return on plan assets		(29	)		(28	)		(58	)		(57	)
Amortization of unrecognized prior service cost		1			2			2			4
Amortization of unrecognized net loss		9			4			18			8
Net periodic benefit cost	$	8		$	5		$	16		$	6
Non-Qualified Defined Benefit Pension Plan	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2011			2010			2011			2010
Service cost	$	1		$	1		$	2		$	2
Interest cost		3			2			5			4
Amortization of unrecognized prior service cost		(1	)		(1	)		(1	)		(1	)
Amortization of unrecognized net loss		1			1			2			2
Net periodic benefit cost	$	4		$	3		$	8		$	7
Postretirement Benefit Plan	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2011			2010			2011			2010
Interest cost	$	1		$	1		$	2		$	2
Expected return on plan assets		(1	)		(1	)		(2	)		(2	)
Amortization of unrecognized transition obligation		1			1			2			2
Amortization of unrecognized net loss		1			1			1			1
Net periodic benefit cost	$	2		$	2		$	3		$	3

For further information on the Corporation’s employee benefit plans, refer to Note 18 to the consolidated financial statements in the Corporation’s 2010 Annual Report.

NOTE 12 – INCOME TAXES AND TAX-RELATED ITEMS

The provision for federal income taxes is computed by applying the statutory federal income tax rate to income before income taxes as reported in the consolidated financial statements after deducting non-taxable items, principally income on bank-owned life insurance, and deducting tax credits related to investments in low income housing partnerships. Tax interest, state taxes and foreign taxes are then added to the federal tax provision.

Beginning in the first quarter of 2011, the Corporation applied an estimated annual effective tax rate to interim period pre-tax income to calculate the income tax provision for the quarter, in accordance with the principal method prescribed by the accounting guidance established for computing income taxes in interim periods. Prior to 2011, specifically for the interim periods beginning second quarter 2009 through December 31, 2010, the Corporation applied an alternative method permitted under the accounting guidance to calculate interim period income taxes. Under the alternative method, interim period income taxes were based on each discrete quarter’s pre-tax income (loss). The method was used by the Corporation due the volatility and uncertainty in the economy in those periods. Given the diminishing economic volatility and the Corporation’s ability to render more reliable estimates of pre-tax income in 2011, the principal method was applied beginning in the first quarter 2011. The Corporation determined it was impracticable to retroactively apply the principal method to the prior interim periods.

38

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 12 – INCOME TAXES AND TAX – RELATED ITEMS (continued)

At June 30, 2011, net unrecognized tax benefits were $27 million, compared to net unrecognized tax benefits of $5 million at June 30, 2010. The increase in unrecognized tax benefits of $22 million from June 30, 2010 to June 30, 2011 was primarily the result of the recognition of a settlement agreement with the Internal Revenue Service (IRS) regarding the repatriation of foreign earnings on a structured investment transaction and the recognition of other federal settlements. The Corporation anticipates that it is reasonably possible that final settlement of federal and state tax issues will result in a decrease of net unrecognized tax benefits of $30 million within the next twelve months. Accrued interest payable on tax liabilities was insignificant at June 30, 2011 and $17 million at June 30, 2010. The $17 million decrease in accrued interest from June 30, 2010 to June 30, 2011 was primarily the result of the aforementioned settlements with tax authorities.

In the ordinary course of business, the Corporation enters into certain transactions that have tax consequences. From time to time, the IRS may question and/or challenge specific interpretative tax positions taken by the Corporation with respect to those transactions. The Corporation believes that its tax returns were filed based upon applicable statutes, regulations and case law in effect at the time of the transactions. The IRS, an administrative authority or a court, if presented with the transactions, could disagree with the Corporation’s interpretation of the tax law.

Based on current knowledge and probability assessment of various potential outcomes, the Corporation believes that current tax reserves are adequate and the amount of any incremental liability arising is not expected to have a material adverse effect on the Corporation’s consolidated financial condition or results of operations. Probabilities and outcomes are reviewed as events unfold, and adjustments to the reserves are made when necessary.

NOTE 13 – CONTINGENT LIABILITIES

Legal Proceedings

The Corporation and certain of its subsidiaries are subject to various pending or threatened legal proceedings arising out of the normal course of business or operations. The Corporation believes it has meritorious defenses to the claims asserted against it in its currently outstanding legal proceedings and, with respect to such legal proceedings, intends to continue to defend itself vigorously, litigating or settling cases according to management’s judgment as to what is in the best interests of the Corporation and its shareholders. On at least a quarterly basis, the Corporation assesses its liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. On a case-by-case basis, reserves are established for those legal claims for which it is probable that a loss will be incurred and the amount of such loss can be reasonably estimated. The actual costs of resolving these claims may be substantially higher or lower than the amounts reserved. Litigation-related expense of $3 million and $1 million were included in “litigation and operational losses” on the consolidated statements of income for the six months ended June 30, 2011 and 2010, respectively. Based on current knowledge, and after consultation with legal counsel, management believes that current reserves are adequate, and the amount of any incremental liability arising from these matters is not expected to have a material adverse effect on the Corporation’s consolidated financial condition, consolidated results of operations or consolidated cash flows. However, in the event of significant unexpected future developments on existing cases, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to the Corporation’s consolidated financial condition, consolidated results of operations or consolidated cash flows.

For other matters, where a loss is not probable, the Corporation has not established legal reserves. In determining whether it is possible to provide an estimate of loss or range of possible loss, the Corporation reviews and evaluates its material litigation on an ongoing basis, in conjunction with legal counsel, in light of potentially relevant factual and legal developments. Based on current knowledge, expectation of future earnings, and after consultation with legal counsel, management believes the maximum amount of reasonably possible losses would not have a material adverse effect on the Corporation’s consolidated financial condition, consolidated results of operations or consolidated cash flows. However, in the event of unexpected future developments, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to the Corporations consolidated financial condition, consolidated results of operations or consolidated cash flows.

39

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 13 – CONTINGENT LIABILITIES (continued)

The damages alleged by plaintiffs or claimants may be overstated, unsubstantiated by legal theory, unsupported by the facts, and/or bear no relation to the ultimate award that a court, jury or agency might impose. In view of the inherent difficulty of predicting the outcome of such matters, the Corporation cannot state with confidence a range of reasonably possible losses, nor what the eventual outcome of these matters will be. However, based on current knowledge and after consultation with legal counsel, management believes the maximum amount of reasonably possible losses would not have a material adverse effect on the Corporation’s consolidated financial condition.

For information regarding income tax contingencies, refer to Note 12.

NOTE 14 – BUSINESS SEGMENT INFORMATION

The Corporation has strategically aligned its operations into three major business segments: the Business Bank, the Retail Bank, and Wealth Management. These business segments are differentiated based on the type of customer and the related products and services provided. In addition to the three major business segments, the Finance Division is also reported as a segment. Business segment results are produced by the Corporation’s internal management accounting system. This system measures financial results based on the internal business unit structure of the Corporation. Information presented is not necessarily comparable with similar information for any other financial institution. The management accounting system assigns balance sheet and income statement items to each business segment using certain methodologies, which are regularly reviewed and refined. For comparability purposes, amounts in all periods are based on business segments and methodologies in effect at June 30, 2011. These methodologies may be modified as the management accounting system is enhanced and changes occur in the organizational structure and/or product lines.

For a description of the business activities of each business segment and further information on the methodologies, which form the basis for these results, refer to Note 23 to the consolidated financial statements in the Corporation’s 2010 Annual Report.

40

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 14 – BUSINESS SEGMENT INFORMATION (continued)

Business segment financial results for the six months ended June 30, 2011 and 2010 are shown in the following table.

(dollar amounts in millions) Six Months Ended June 30, 2011	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	682		$	282		$	92		$	(283	)	$	15		$	788
Provision for loan losses		24			47			23			—			2			96
Noninterest income		156			87			128			27			11			409
Noninterest expenses		316			325			155			6			22			824
Provision (benefit) for income taxes (FTE)		155			2			16			(98	)		3			78
Net income (loss)	$	343		$	(5	)	$	26		$	(164	)	$	(1	)	$	199
Net credit-related charge-offs	$	126		$	46		$	19		$	—		$	—		$	191
Selected average balances:
Assets	$	29,991		$	5,505		$	4,769		$	9,360		$	4,523		$	54,148
Loans		29,493			5,053			4,774			35			6			39,361
Deposits		20,241			17,549			2,889			244			118			41,041
Statistical data:
Return on average assets (a)		2.29	%		(0.06	)%		1.08	%		N/M			N/M			0.73	%
Net interest margin (b)		4.65			3.24			3.91			N/M			N/M			3.19
Efficiency ratio		37.78			87.81			72.87			N/M			N/M			69.19
Six Months Ended June 30, 2010	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	692		$	265		$	87		$	(209	)	$	5		$	840
Provision for loan losses		219			52			31			—			(1	)		301
Noninterest income		152			86			122			26			2			388
Noninterest expenses		319			314			153			4			11			801
Provision (benefit) for income taxes (FTE)		83			(5	)		9			(71	)		5			21
Income from discontinued operations, net of tax		—			—			—			—			17			17
Net income (loss)	$	223		$	(10	)	$	16		$	(116	)	$	9		$	122
Net credit-related charge-offs	$	251		$	47		$	21		$	—		$	—		$	319
Selected average balances:
Assets	$	30,949		$	6,021		$	4,883		$	9,379		$	5,653		$	56,885
Loans		30,633			5,522			4,815			23			(3	)		40,990
Deposits		18,413			16,825			2,858			934			95			39,125
Statistical data:
Return on average assets (a)		1.44	%		(0.11	)%		0.67	%		N/M			N/M			0.43	%
Net interest margin (b)		4.55			3.17			3.64			N/M			N/M			3.23
Efficiency ratio		37.84			88.79			75.39			N/M			N/M			65.45

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

(b) Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.

FTE - Fully Taxable Equivalent

N/M - Not Meaningful

41

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 14 – BUSINESS SEGMENT INFORMATION (continued)

The Corporation’s management accounting system also produces market segment results for the Corporation’s four primary geographic markets: Midwest, Western, Texas and Florida. In addition to the four primary geographic markets, Other Markets and International are also reported as market segments. Market segment results are provided as supplemental information to the business segment results and may not meet all operating segment criteria as set forth in ASC Topic 280, Segment Reporting. For comparability purposes, amounts in all periods are based on market segments and methodologies in effect at June 30, 2011.

The Midwest market consists of operations located in the states of Michigan, Ohio and Illinois. Currently, Michigan operations represent the significant majority of the Midwest market.

The Western market consists of the states of California, Arizona, Nevada, Colorado and Washington. Currently, California operations represent the significant majority of the Western market.

The Texas and Florida markets consist of operations located in the states of Texas and Florida, respectively.

Other Markets include businesses with a national perspective, the Corporation’s investment management and trust alliance businesses as well as activities in all other markets in which the Corporation has operations, except for the International market, as described below.

The International market represents the activity of the Corporation’s international finance division, which provides banking services primarily to foreign-owned, North American-based companies and secondarily to international operations of North American-based companies.

The Finance & Other Businesses segment includes the Corporation’s securities portfolio, asset and liability management activities, discontinued operations, the income and expense impact of equity and cash not assigned to specific business/market segments, tax benefits not assigned to specific business/market segments and miscellaneous other expenses of a corporate nature. This segment includes responsibility for managing the Corporation’s funding, liquidity and capital needs, performing interest sensitivity analysis and executing various strategies to manage the Corporation’s exposure to liquidity, interest rate risk and foreign exchange risk.

42

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 14 – BUSINESS SEGMENT INFORMATION (continued)

Market segment financial results for the six months ended June 30, 2011 and 2010 are shown in the following table.

(dollar amounts in millions) Six Months Ended June 30, 2011	Midwest			Western			Texas			Florida			Other Markets			International			Finance & Other Businesses			Total
Earnings summary:
Net interest income (expense) (FTE)	$	407		$	330		$	176		$	23		$	82		$	38		$	(268	)	$	788
Provision for loan losses		49			31			2			19			(2	)		(5	)		2			96
Noninterest income		200			74			48			7			24			18			38			409
Noninterest expenses		371			217			124			24			41			19			28			824
Provision (benefit) for income taxes (FTE)		72			55			36			(4	)		(1	)		15			(95	)		78
Net income (loss)	$	115		$	101		$	62		$	(9	)	$	68		$	27		$	(165	)	$	199
Net credit-related charge-offs	$	81		$	52		$	12		$	23		$	21		$	2		$	—		$	191
Selected average balances:
Assets	$	14,287		$	12,459		$	7,056		$	1,543		$	3,171		$	1,749		$	13,883		$	54,148
Loans		14,077			12,250			6,848			1,573			2,891			1,681			41			39,361
Deposits		18,273			12,347			5,982			382			2,375			1,320			362			41,041
Statistical data:
Return on average assets (a)		1.18	%		1.51	%		1.75	%		(1.11	)%		4.31	%		3.06	%		N/M			0.73	%
Net interest margin (b)		4.48			5.39			5.18			2.98			5.81			4.37			N/M			3.19
Efficiency ratio		61.14			53.77			55.27			78.79			41.42			33.87			N/M			69.19
Six Months Ended June 30, 2010	Midwest			Western			Texas			Florida			Other Markets			International			Finance & Other Businesses			Total
Earnings summary:
Net interest income (expense) (FTE)	$	415		$	325		$	160		$	21		$	86		$	37		$	(204	)	$	840
Provision for loan losses		114			86			16			19			75			(8	)		(1	)		301
Noninterest income		198			69			43			7			25			18			28			388
Noninterest expenses		366			215			125			21			43			16			15			801
Provision (benefit) for income taxes (FTE)		47			32			22			(4	)		(26	)		16			(66	)		21
Income from discontinued operations, net of tax		—			—			—			—			—			—			17			17
Net income (loss)	$	86		$	61		$	40		$	(8	)	$	19		$	31		$	(107	)	$	122
Net credit-related charge-offs	$	98		$	112		$	33		$	17		$	54		$	5		$	—		$	319
Selected average balances:
Assets	$	14,915		$	13,090		$	6,771		$	1,576		$	3,859		$	1,642		$	15,032		$	56,885
Loans		14,777			12,886			6,565			1,575			3,578			1,589			20			40,990
Deposits		17,526			11,939			5,137			382			2,099			1,013			1,029			39,125
Statistical data:
Return on average assets (a)		0.92	%		0.90	%		1.18	%		(1.00	)%		1.03	%		3.70	%		N/M			0.43	%
Net interest margin (b)		4.75			5.08			4.92			2.74			4.88			4.63			N/M			3.23
Efficiency ratio		59.37			54.74			61.44			74.63			40.96			29.81			N/M			65.45

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

(b) Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.

FTE - Fully Taxable Equivalent

N/M - Not Meaningful

43

Notes to Consolidated Financial Statements (unaudited)

Comerica Incorporated and Subsidiaries

NOTE 15 – DISCONTINUED OPERATIONS

In December 2006, the Corporation sold its ownership interest in Munder Capital Management (Munder), an investment advisory subsidiary, to an investor group. The sale agreement included an interest-bearing contingent note.

In the first quarter 2010, the Corporation and the investor group that acquired Munder negotiated a cash settlement of the note receivable for $35 million, which resulted in a $27 million gain ($17 million, after tax), recorded in “income from discontinued operations, net of tax” on the consolidated statements of income. The settlement paid the note in full and concluded the Corporation’s financial arrangements with Munder.

The components of net income from discontinued operations for the six-month period ended June 30, 2010 are shown in the following table. There was no income from discontinued operations for the three-month periods ended June 30, 2011 and 2010 or the six-month period ended June 30, 2011.

(in millions, except per share data)	Six Months Ended June 30, 2010
Income from discontinued operations before income taxes	$	27
Provision for income taxes		10
Net income from discontinued operations	$	17
Earnings per common share from discontinued operations:
Basic	$	0.10
Diluted		0.10

44

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This report includes forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Any statements in this report 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,” “feels,” “expects,” “estimates,” “seeks,” “strives,” “plans,” “intends,” “outlook,” “forecast,” “position,” “target,” “mission,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “opportunity,” “initiative,” “outcome,” “continue,” “remain,” “maintain,” “trend,” “objective,” “pending,” “looks forward” and variations of such words and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, as they relate to the Corporation or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of the Corporation’s management based on information known to the Corporation’s management as of the date of this report and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of the Corporation’s management for future or past operations, products or services, and forecasts of the Corporation’s revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability. Such statements reflect the view of the Corporation’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, the Corporation’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 and related credit and market conditions; changes in trade, monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; adverse conditions in the capital markets; the interdependence of financial service companies; changes in regulation or oversight, including the effects of recently enacted legislation, actions taken by or proposed by the U.S. Treasury, the Board of Governors of the Federal Reserve System, the Texas Department of Banking and the Federal Deposit Insurance Corporation, legislation or regulations enacted in the future, and the impact and expiration of such legislation and regulatory actions; unfavorable developments concerning credit quality; the acquisition of Sterling Bancshares, Inc., or any future acquisitions; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries in which the Corporation has a concentration of loans, including, but not limited to, the automotive production industry and the real estate business lines; the implementation of the Corporation’s strategies and business models, including the anticipated performance of any new banking centers; the Corporation’s ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties or information security problems; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; the entry of new competitors in the Corporation’s markets; changes in customer borrowing, repayment, investment and deposit practices; management’s ability to maintain and expand customer relationships; management’s ability to retain key officers and employees; the impact of legal and regulatory proceedings; the effectiveness of methods of reducing risk exposures; the effects of war and other armed conflicts or acts of terrorism and the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods. The Corporation cautions that the foregoing list of factors is not exclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to “Item 1A. Risk Factors” beginning on page 16 of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2010, “Item 1A. Risk Factors” beginning on page 65 of the Corporation’s Quarterly Report on Form 10Q for the quarter ended March 31, 2011 and “Item 1A. Risk Factors” beginning on page 74 of the Corporation’s Quarterly Report on Form 10Q for the quarter ended June 30, 2011. Forward-looking statements speak only as of the date they are made. The Corporation 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 report, the Corporation claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

45

Acquisition of Sterling Bancshares, Inc.

On July 28, 2011 (the “acquisition date”), the Corporation acquired all the outstanding common stock of Sterling Bancshares, Inc. (“Sterling”), a bank holding company headquartered in Houston, Texas, in a stock-for-stock transaction. Sterling common shareholders and holders of outstanding Sterling phantom stock units received 0.2365 shares of the Corporation’s common stock in exchange for each share of Sterling common stock or phantom stock unit. As a result, the Corporation issued approximately 24 million common shares, subject to payment of cash in lieu of fractional shares, with an acquisition date fair value of $793 million, based on the Corporation’s closing stock price of $32.67 on July 27, 2011. Based on the merger agreement, outstanding and unexercised options to purchase Sterling common stock were converted into fully vested options to purchase common stock of the Corporation. In addition, outstanding warrants to purchase Sterling common stock were converted into warrants to purchase common stock of the Corporation. The fair value of total consideration paid to acquire Sterling was approximately $803 million. The Corporation incurred $5 million of pre-integration and transaction costs prior to the acquisition closing date that are included in “merger and restructuring charges” in the consolidated statements of income. However, the assets acquired and liabilities assumed from Sterling, the consideration paid to acquire Sterling, and the results of Sterling’s operations are not reflected in consolidated financial statements as of and for the three- and six-month periods ended June 30, 2011. The acquisition of Sterling significantly expands the Corporation’s presence in Texas, particularly in the Houston and San Antonio areas, and gives the Corporation the ability to leverage additional marketing capacity to offer a wide array of products through a larger distribution network, particularly to middle market and small business companies.

Results of Operations

Net income for the three months ended June 30, 2011 was $96 million, an increase of $26 million from $70 million reported for the three months ended June 30, 2010. The increase in net income in the second quarter 2011, compared to the same period in 2010, was primarily due to an $81 million decrease in the provision for credit losses ($79 million decrease in the provision for loan losses and a $2 million decrease in the provision for credit losses on lending-related commitments), partially offset by an increase of $18 million in the provision for income taxes and a $31 million decrease in net interest income. Net income per diluted common share was $0.53 in the second quarter 2011, compared to $0.39 for the same period one year ago.

Net income for the first six months of 2011 was $199 million, an increase of $77 million from $122 million reported for the six months ended June 30, 2010. The increase in net income for the six months ended June 30, 2011 from the comparable 2010 period was primarily due to a $217 million decrease in the provision for credit losses ($205 million decrease in the provision for loan losses and a $12 million decrease in the provision for credit losses on lending-related commitments), partially offset by an increase of $58 million in the provision for income taxes and a decrease of $51 million in net interest income. Net income attributable to common shares was $197 million for the first six months of 2011, compared to a net loss attributable to common shares of $1 million for the same period one year ago. There were no preferred stock dividends included in net income attributable to common shares for the six months ended June 30, 2011, compared to $123 million of preferred stock dividends, including a $94 million one-time redemption charge reflected in the net loss attributable to common shares, for the same period one year ago. The decrease in preferred stock dividends was due to the first quarter 2010 full redemption of $2.25 billion of preferred stock issued to the U.S. Treasury. Diluted net income per common share was $1.10 for the first six months of 2011, compared to a diluted net loss per common share of $0.01 for the comparable 2010 period.

46

Second-Half 2011 Outlook (Combined Comerica and Sterling Results) Compared to First-Half 2011 (Comerica Only Results)

For the second half of 2011, management expects the following combined results, based on the incorporation of the projected results of Sterling operations from the acquisition closing date of July 28, 2011 through year-end 2011, compared to Comerica-only results for the first half of 2011, assuming a continuation of modest growth in the economy. The estimated purchase accounting impacts incorporated in this outlook are preliminary and may not be indicative of actual amounts that will be recorded as additional information becomes available and as additional analyses are performed.

• A mid-single digit increase in average loans, primarily due to the acquisition of Sterling loans at fair value. The pace of decline of loans in the Commercial Real Estate business line is expected to decrease in the second half of 2011. Average loans in the National Dealer Services business line are expected to be lower in the third quarter and rebound in the fourth quarter of 2011.

• Average earning assets of approximately $52.5 billion, reflecting increases, primarily related to Sterling, in average loans and average investment securities available-for-sale, partially offset by a decrease in excess liquidity.

• An average net interest margin of 3.35 percent to 3.40 percent, reflecting the benefit from the accretion of the purchase discount on the acquired Sterling loan portfolio ($35 million to $45 million; 13 basis points to 17 basis points), a reduction in excess liquidity, no increase in the Federal Funds rate, and LIBOR consistent with second quarter 2011 levels.

• Net credit-related charge-offs between $165 million and $185 million for the second half of 2011. The provision for credit losses is expected to be between $65 million and $85 million for the second half of 2011.

• A mid-single digit decline in noninterest income in the second half of 2011 compared to the first half of 2011, primarily due to the impact of regulatory changes and a reduction of net income from principal investing and warrants, partially offset by the inclusion of Sterling.

• Excluding merger and restructuring charges, a high single-digit increase in noninterest expenses in the second half of 2011 compared to the first half of 2011, primarily due to the addition of Sterling.

• Total merger and restructuring charges of approximately $80 million, after-tax ($125 million pre-tax), with about $25 million, after-tax, recognized in each of the third and fourth quarters of 2011, and the remainder recognized in 2012.

• Total acquisition synergies of approximately 35 percent of Sterling expenses, or about $56 million, with the majority realized in 2012.

• For the second half of 2011, income tax expense to approximate 36 percent of income before income taxes less approximately $33 million in tax benefits.

• Continue share repurchase program that, combined with dividend payments, results in a payout up to 50 percent of full-year earnings.

47

Net Interest Income

Net interest income was $391 million for the three months ended June 30, 2011, a decrease of $31 million compared to $422 million for the same period in 2010. The decrease in net interest income in the second quarter 2011, compared to the same period in 2010, resulted primarily from a decline in average earning assets, the maturity of interest rate swaps at positive spreads, maturities of higher-yield fixed-rate loans and decreases in LIBOR rates, partially offset by a continued shift in funding sources toward lower-cost funds, along with maturities and redemptions of higher-cost medium- and long-term debt. The “Quarterly Analysis of Net Interest Income & Rate/Volume – Fully Taxable Equivalent” table of this financial review details the components of the change in net interest income on a fully taxable equivalent (FTE) basis for the three months ended June 30, 2011, compared to the same period in the prior year. Average earning assets decreased $1.7 billion, or three percent, to $50.1 billion in the second quarter 2011, compared to $51.8 billion in the second quarter 2010, primarily due to a $1.5 billion, or four percent, decrease in average loans, to $39.2 billion. The net interest margin (FTE) for the three months ended June 30, 2011 decreased 14 basis points to 3.14 percent, from 3.28 percent for the comparable period in 2010, primarily due to LIBOR-based loan rates declining faster than deposit rates, a decrease in loan spreads and the maturity of interest rate swaps at positive spreads.

Net interest income was $786 million for the six months ended June 30, 2011, a decrease of $51 million compared to $837 million for the same period in 2010. The decrease in net interest income in the six months ended 2011, compared to the same period in 2010, was primarily due to the same reasons cited in the quarterly discussion above. The “Year-to-date Analysis of Net Interest Income & Rate/Volume – Fully Taxable Equivalent” table provides an analysis of net interest income for the first six months of 2011 on a FTE basis, compared to the same period in the prior year. Average earning assets decreased $2.7 billion, or five percent, to $49.7 billion for the six months ended June 30, 2011, compared to $52.4 billion for the same period in the prior year, primarily due to a $1.6 billion, or four percent, decrease in average loans, to $39.4 billion and a $1.0 billion, or 27 percent, decrease in average interest-bearing deposits with banks. The net interest margin (FTE) for the six months ended June 30, 2011 decreased four basis points to 3.19 percent, from 3.23 percent for the same period in 2010, primarily due to the same reasons cited in the quarterly discussion above, partially offset by a reduction in excess liquidity. The net interest margin was reduced by approximately 18 basis points and 24 basis points in the first six months of 2011 and 2010, respectively, from excess liquidity. Excess liquidity was represented by $2.8 billion and $3.9 billion of average balances deposited with the Federal Reserve Bank (FRB) in the first six months of 2011 and 2010, respectively, included in “interest-bearing deposits with banks” in the consolidated balance sheets. Refer to the “Supplemental Financial Data” section of this financial review for reconcilements of non-GAAP financial measures.

For further discussion of the effects of market rates on net interest income, refer to the “Market Risk” section of this financial review.

For full-year 2011, management expects an average net interest margin of 3.35 percent to 3.40 percent, reflecting the benefit from the accretion of the purchase discount on the acquired Sterling loan portfolio ($35 million to $45 million; 13 basis points to 17 basis points), a reduction in excess liquidity, no increase in the Federal Funds rate, and LIBOR consistent with second quarter 2011 levels.

48

Quarterly Analysis of Net Interest Income & Rate/Volume – Fully Taxable Equivalent (FTE)

	Three Months Ended
	June 30, 2011								June 30, 2010
(dollar amounts in millions)	Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate
Commercial loans	$	21,677		$	196		3.65	%	$	20,910		$	206		3.95	%
Real estate construction loans		1,881			17		3.75			2,987			23		3.13
Commercial mortgage loans		9,636			96		3.98			10,372			109		4.20
Residential mortgage loans		1,525			21		5.50			1,607			22		5.44
Consumer loans		2,243			20		3.42			2,448			22		3.56
Lease financing		958			8		3.50			1,108			10		3.72
International loans		1,254			12		3.80			1,240			13		4.07
Business loan swap income		—			—		—			—			9		—
Total loans		39,174			370		3.79			40,672			414		4.07
Auction-rate securities available-for-sale		500			1		0.71			816			3		1.19
Other investment securities available-for-sale		6,907			58		3.40			6,446			58		3.71
Total investment securities available-for-sale		7,407			59		3.20			7,262			61		3.41
Federal funds sold and securities purchased under agreements to resell		2			—		0.33			1			—		1.35
Interest-bearing deposits with banks (a)		3,433			3		0.25			3,768			3		0.25
Other short-term investments		120			—		1.39			132			—		1.65
Total earning assets		50,136			432		3.46			51,835			478		3.70
Cash and due from banks		872								795
Allowance for loan losses		(859	)							(1,037	)
Accrued income and other assets		4,368								4,665
Total assets	$	54,517							$	56,258
Money market and NOW deposits	$	18,207			11		0.26		$	16,354			13		0.32
Savings deposits		1,465			1		0.09			1,429			—		0.07
Customer certificates of deposit		5,609			10		0.70			5,927			15		0.92
Total interest-bearing core deposits		25,281			22		0.35			23,710			28		0.45
Other time deposits		—			—		—			295			1		2.14
Foreign office time deposits		413			1		0.52			448			—		0.23
Total interest-bearing deposits		25,694			23		0.35			24,453			29		0.47
Short-term borrowings		112			—		0.14			248			—		0.27
Medium- and long-term debt		5,821			17		1.20			9,571			25		1.04
Total interest-bearing sources		31,627			40		0.51			34,272			54		0.63
Noninterest-bearing deposits		15,786								15,218
Accrued expenses and other liabilities		1,132								1,060
Total shareholders’ equity		5,972								5,708
Total liabilities and shareholders’ equity	$	54,517							$	56,258
Net interest income/rate spread (FTE)				$	392		2.95					$	424		3.07
FTE adjustment				$	1							$	2
Impact of net noninterest-bearing sources of funds							0.19								0.21
Net interest margin (as a percentage of average earning assets) (FTE) (a)							3.14	%							3.28	%

(a) Excess liquidity, represented by average balances deposited with the FRB, reduced the net interest margin by 21 basis points and 23 basis points in the second quarter of 2011 and 2010, respectively. Excluding excess liquidity, the net interest margin would have been 3.35% and 3.51% in each respective period. See Supplemental Financial Data section for reconcilements of non-GAAP financial measures.

49

Quarterly Analysis of Net Interest Income & Rate/Volume – Fully Taxable Equivalent (FTE) (continued)

	Three Months Ended June 30, 2011/June 30, 2010
(in millions)	Increase (Decrease) Due to Rate			Increase (Decrease) Due to Volume (a)			Net Increase (Decrease)
Loans	$	(29	)	$	(15	)	$	(44	)
Investment securities available-for-sale		(5	)		3			(2	)
Total earning assets		(34	)		(12	)		(46	)
Interest-bearing deposits		(5	)		(1	)		(6	)
Medium- and long-term debt		3			(11	)		(8	)
Total interest-bearing sources		(2	)		(12	)		(14	)
Net interest income/rate spread (FTE)	$	(32	)	$	—		$	(32	)

(a) Rate/Volume variances are allocated to variances due to volume.

50

Year-to-Date Analysis of Net Interest Income & Rate/Volume – Fully Taxable Equivalent (FTE)

	Six Months Ended
	June 30, 2011								June 30, 2010
(dollar amounts in millions)	Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate
Commercial loans	$	21,586		$	396		3.70	%	$	20,961		$	411		3.95	%
Real estate construction loans		2,029			36		3.62			3,185			48		3.03
Commercial mortgage loans		9,713			191		3.96			10,380			216		4.19
Residential mortgage loans		1,562			42		5.37			1,620			44		5.43
Consumer loans		2,262			39		3.42			2,464			44		3.57
Lease financing		972			17		3.56			1,119			21		3.73
International loans		1,237			24		3.83			1,261			25		4.00
Business loan swap income		—			1		—			—			17		—
Total loans		39,361			746		3.82			40,990			826		4.06
Auction-rate securities available-for-sale		527			2		0.80			847			5		1.06
Other investment securities available-for-sale		6,832			114		3.39			6,475			118		3.72
Total investment securities available-for-sale		7,359			116		3.19			7,322			123		3.40
Federal funds sold and securities purchased under agreements to resell		2			—		0.32			1			—		1.17
Interest-bearing deposits with banks (a)		2,897			4		0.25			3,944			5		0.25
Other short-term investments		124			1		2.05			128			1		1.70
Total earning assets		49,743			867		3.51			52,385			955		3.67
Cash and due from banks		878								792
Allowance for loan losses		(883	)							(1,048	)
Accrued income and other assets		4,410								4,756
Total assets	$	54,148							$	56,885
Money market and NOW deposits	$	18,003			23		0.26		$	15,709			25		0.32
Savings deposits		1,443			1		0.09			1,407			—		0.07
Customer certificates of deposit		5,559			20		0.73			6,049			30		0.97
Total interest-bearing core deposits		25,005			44		0.36			23,165			55		0.48
Other time deposits		—			—		—			584			9		3.18
Foreign office time deposits		413			1		0.50			453			—		0.22
Total interest-bearing deposits		25,418			45		0.36			24,202			64		0.54
Short-term borrowings		103			—		0.21			241			—		0.19
Medium- and long-term debt		5,974			34		1.15			10,169			51		0.99
Total interest-bearing sources		31,495			79		0.51			34,612			115		0.67
Noninterest-bearing deposits		15,623								14,923
Accrued expenses and other liabilities		1,126								1,067
Total shareholders’ equity		5,904								6,283
Total liabilities and shareholders’ equity	$	54,148							$	56,885
Net interest income/rate spread (FTE)				$	788		3.00					$	840		3.00
FTE adjustment				$	2							$	3
Impact of net noninterest-bearing sources of funds							0.19								0.23
Net interest margin (as a percentage of average earning assets) (FTE) (a)							3.19	%							3.23	%

(a) Excess liquidity, represented by average balances deposited with the FRB, reduced the net interest margin by 18 basis points and 24 basis points year-to-date in 2011 and 2010, respectively. Excluding excess liquidity, the net interest margin would have been 3.37% and 3.47% in each respective period. See Supplemental Financial Data section for reconcilements of non-GAAP financial measures.

51

Year-to-Date Analysis of Net Interest Income & Rate/Volume – Fully Taxable Equivalent (FTE)

	Six Months Ended June 30, 2011/June 30, 2010
(in millions)	Increase (Decrease) Due to Rate			Increase (Decrease) Due to Volume (a)			Net Increase (Decrease)
Loans	$	(49	)	$	(31	)	$	(80	)
Investment securities available-for-sale		(11	)		4			(7	)
Interest-bearing deposits with banks		—			(1	)		(1	)
Total earning assets		(60	)		(28	)		(88	)
Interest-bearing deposits		(11	)		(8	)		(19	)
Medium- and long-term debt		8			(25	)		(17	)
Total interest-bearing sources		(3	)		(33	)		(36	)
Net interest income/rate spread (FTE)	$	(57	)	$	5		$	(52	)

(a) Rate/Volume variances are allocated to variances due to volume.

Provision for Credit Losses

The provision for credit losses includes both the provision for loan losses and the provision for credit losses on lending-related commitments. The provision for loan losses was $47 million for the second quarter 2011, compared to $126 million for the same period in 2010. The provision for loan losses for the first six months of 2011 was $96 million, compared to $301 million for the same period in 2010. The Corporation establishes this provision to maintain an adequate allowance for loan losses, which is discussed under the “Credit Risk” subheading in the “Risk Management” section of this financial review. The decreases of $79 million and $205 million in the provision for loan losses in the three- and six month periods ended June 30, 2011, respectively, when compared to the same periods in 2010, resulted primarily from improvements in credit quality. Improvements in credit quality included a decline of $715 million, to $4.8 billion, in the Corporation’s watch list loans from December 31, 2010 to June 30, 2011. The Corporation’s internal watch list is generally consistent with loans in the Special Mention, Substandard and Doubtful (nonaccrual) categories defined by regulatory authorities. Additional indicators of improved credit quality included a decrease in the inflow to nonaccrual (based on an analysis of nonaccrual loans with book balances greater than $2 million) of $115 million and a decrease in net credit-related charge-offs of $128 million in the six month period ended June 30, 2011, compared to the same period in the prior year.

Moderate U.S. economic growth through the second half of 2010 gave way to a slow growth “soft patch” in the first half of 2011. Real gross domestic product growth for the first quarter of 2011 registered just 1.9 percent annualized and second quarter growth is expected be about the same. U.S. job growth dwindled in May and June, totaling just 43,000 net new jobs for the two months. Three sets of factors converged to pull the economy into a soft patch. These factors are characterized by their expected duration: transitory, medium term and long term. Transitory factors include bad winter and spring weather, high crude oil and gasoline prices early in the year, and the Japan disaster at the end of March which resulted in supply-chain bottlenecks for U.S. manufacturers. Medium term factors that will weigh on economic growth through the remainder of 2011 include still-weak housing markets, constrained consumer spending, and the state and local government budget crisis. Long term factors dragging on economic growth into 2012 and beyond include a lower rate of population growth, an unwind of various federal government efforts to stimulate the economy, and eventual caps and cuts in federal spending, expected to come as a result of current negotiations on the federal debt ceiling. The Texas economy has maintained some forward momentum through the soft patch, while California and Michigan have experienced mildly deteriorating labor market conditions in the second quarter of 2011. Fortunately, the transitory factors are proving to be transitory. Automobile production is expected to increase through the second half of 2011, stabilizing durable goods manufacturing in the second half of the year. This and other forward-looking indicators point to moderately improving economic conditions in the Corporation’s primary geographic markets in late 2011.

Total net credit-related charge-offs include net charge-offs on both loans and lending-related commitments. Net loan charge-offs for the second quarter 2011 decreased $56 million to $90 million, or 0.92 percent of average total loans, compared to $146 million, or 1.44 percent for the second quarter 2010. The decrease in net loan charge-offs in the second quarter 2011, compared to the second quarter 2010, consisted primarily of decreases in net loan charge-offs in the Middle Market ($34 million) and Commercial Real Estate ($23 million) business lines. By geographic market, net loan charge-offs decreased in all markets, with the exception of Florida, in the second quarter 2011, compared to the same period in 2010, with the largest decreases noted in the Other Markets ($29 million) and Western ($21 million) markets. In the Florida market, net loan charge-offs increased $8 million, primarily due to increases in the Private Banking and Middle Market business lines.

52

Net loan charge-offs for the first six months of 2011 were $191 million, compared to $319 million for the same period in 2010. The $128 million decrease in net loan charge-offs for the first six months of 2011, compared to the same period in 2010, consisted primarily of decreases in net loan charge-offs in the Commercial Real Estate ($98 million), Specialty Businesses ($17 million), and Middle Market ($14 million) business lines, partially offset by an increase in the Global Corporate Banking Business Line ($7 million). By geographic market, net loan charge-offs decreased in all markets, with the exception of Florida, for the six-month period ended June 30, 2011, compared to the same period in 2010, with the largest decreases noted in the Western ($60 million), Other Markets ($33 million) and Texas ($22 million) markets. In the Florida market, net loan charge-offs increased $6 million, primarily due to increases in the Middle Market and Private Banking business lines.

The provision for credit losses on lending-related commitments was a benefit of $2 million and $5 million for the three- and six-month periods ended June 30, 2011, compared to provisions of zero and $7 million for the comparable periods in 2010. The decreases of $2 million and $12 million for the three- and six-month periods ended June 30, 2011, when compared to the same periods in 2010, respectively, resulted primarily from improved credit quality in unfunded commitments in the Midwest, Western and Texas markets. The Corporation establishes this provision to maintain an adequate allowance to cover probable credit losses inherent in lending-related commitments, which is discussed under the “Credit Risk” subheading in the “Risk Management” section of this financial review. Lending-related commitment charge-offs were insignificant in both the three- and six-month periods ended June 30, 2011 and 2010.

An analysis of allowance for credit losses and nonperforming assets is presented under the “Credit Risk” subheading in the “Risk Management” section of this financial review.

Management expects net credit-related charge-offs between $165 million and $185 million for the second half of 2011. The provision for credit losses is expected to be between $65 million and $85 million for the second half of 2011.

Noninterest Income

Noninterest income was $202 million for the three months ended June 30, 2011, an increase of $8 million, or four percent, compared to $194 million for the same period in 2010, resulting primarily from increases of $5 million in net income from principal investing and warrants and $3 million in net securities gains.

Noninterest income was $409 million for the first six months of 2011, an increase of $21 million, or five percent, compared to the same period in 2010, resulting primarily from increases in net income from principal investing and warrants ($10 million), risk management hedge gains ($7 million), deferred compensation asset returns ($6 million) and net securities gains ($3 million), partially offset by a decrease in service charges on deposit accounts ($5 million).

Management expects a mid-single digit decline in noninterest income for the second half of 2011, compared to the first half of 2011, primarily due to the impact of regulatory changes and a reduction of net income from principal investing and warrants, partially offset by the inclusion of Sterling.

Noninterest Expenses

Noninterest expenses were $409 million for the three months ended June 30, 2011, an increase of $12 million, or three percent, from $397 million for the comparable period in 2010, resulting primarily from increases in salaries expense ($6 million), employee benefits expense ($5 million) and merger and restructuring charges ($5 million), partially offset by a decrease in FDIC insurance expense ($4 million).

Noninterest expenses were $824 million for the first six months of 2011, an increase of $23 million, or three percent, compared to $801 million for the comparable period in 2010. The increase in noninterest expense resulted primarily from increases in salaries expense ($25 million), employee benefits expense ($11 million), merger and restructuring charges ($5 million) and litigation and operational losses ($5 million), partially offset by decreases in the provision for credit losses on lending-related commitments ($12 million) and FDIC insurance expense ($6 million). The increase in salaries expense reflected increases in incentive compensation ($12 million), share-based compensation ($11 million) and deferred compensation asset returns ($6 million) (offset by an increase in deferred compensation asset returns in noninterest income), partially offset by a decrease in regular salaries ($4 million).

53

Excluding merger and restructuring charges related to the acquisition of Sterling, management expects a high single-digit increase in noninterest expenses in the second half of 2011 compared to the first half of 2011, primarily due to the addition of Sterling. Management expects total merger and restructuring charges of approximately $80 million, after-tax ($125 million pre-tax), with about $25 million, after-tax, recognized in each of the third and fourth quarters of 2011, and the remainder recognized in 2012.

Provision for Income Taxes

The provision for income taxes for the second quarter 2011 was $41 million, compared to $23 million for the same period in 2010. The $18 million increase in the provision for income taxes in the three-month period ended June 30, 2011, compared to the same period in 2010, was primarily due to an increase in income before taxes in the second quarter 2011, compared to the same quarter in the prior year, and a $19 million charge related to a final settlement agreement with the Internal Revenue Service involving the repatriation of foreign earnings on a structured investment transaction, partially offset by a release of tax reserves of $9 million due to the Corporation’s planned participation in a recently enacted State of California voluntary compliance initiative. The Corporation has no other investment structures with uncertain tax positions.

For the first six months of 2011, the provision for income taxes was $76 million, an increase of $58 million compared to the same period in 2010. The increase in the provision for income taxes was primarily due to the same reasons cited in the quarterly discussion above.

Net deferred tax assets were $310 million at June 30, 2011, compared to $383 million at December 31, 2010, a decrease of $73 million, resulting primarily from a reduction in deferred tax assets due to decreases in the allowance for loan losses and unrealized gains recognized in other comprehensive income. Deferred tax assets were evaluated for realization and it was determined that no valuation allowance was needed at both June 30, 2011 and December 31, 2010. This conclusion was based on available evidence of loss carryback capacity, projected future reversals of existing taxable temporary differences and assumptions made regarding future events. For further information on income taxes, refer to Note 12 to these unaudited consolidated financial statements.

For the second half of 2011, management expects income tax expense to approximate 36 percent of income before income taxes less approximately $33 million in tax benefits.

Income from Discontinued Operations, Net of Tax

In the first six months of 2011, there was no income from discontinued operations, net of tax. Income from discontinued operations, net of tax, for the first six months of 2010 was $17 million, reflecting a first quarter after-tax gain from the cash settlement of a note receivable related to the 2006 sale of an investment advisory subsidiary. For further information on the cash settlement of the note and discontinued operations, refer to Note 15 to these unaudited consolidated financial statements.

Business Segments

The Corporation’s operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank and Wealth Management. These business segments are differentiated based on the products and services provided. In addition to the three major business segments, the Finance Division is also reported as a segment. The Other category includes discontinued operations and items not directly associated with these business segments or the Finance Division. Note 14 to these unaudited consolidated financial statements presents financial results of these business segments for the six months ended June 30, 2011 and 2010. For a description of the business activities of each business segment and the methodologies which form the basis for these results, refer to Note 14 to these unaudited consolidated financial statements and Note 23 to the consolidated financial statements in the Corporation’s 2010 Annual Report.

54

The following table presents net income (loss) by business segment.

	Six Months Ended June 30,
(dollar amounts in millions)	2011					2010
Business Bank	$	343		94	%	$	223		97	%
Retail Bank		(5	)	(1	)		(10	)	(4	)
Wealth Management		26		7			16		7
		364		100	%		229		100	%
Finance		(164	)				(116	)
Other (a)		(1	)				9
Total	$	199				$	122

(a) Includes discontinued operations and items not directly associated with the three major business segments or the Finance Division.

The Business Bank’s net income of $343 million increased $120 million in the six months ended June 30, 2011, compared to the six months ended June 30, 2010. Net interest income (FTE) of $682 million decreased $10 million in the six months ended June 30, 2011 compared to the same period in the prior year, as the benefit provided by a $1.8 billion increase in average deposits and an increase in loan spreads was offset by a $1.1 billion decrease in average loans. The provision for loan losses of $24 million decreased $195 million from the comparable period in the prior year, primarily reflecting decreases in the Commercial Real Estate (in all markets) and Middle Market (primarily in the Other Markets and Midwest markets) business lines. Net credit-related charge-offs of $126 million decreased $125 million from the comparable period in the prior year, primarily due to a decrease in charge-offs in the Commercial Real Estate business line. Noninterest income of $156 million increased $4 million from the comparable prior year period, primarily due to increases in warrant income ($5 million) and customer derivative income ($3 million), partially offset by a decrease in investment banking fees ($3 million). Noninterest expenses of $316 million decreased $3 million from the same period in the prior year, primarily due to decreases in the provision for credit losses on lending commitments ($12 million), other real estate expense ($3 million) and nominal decreases in other noninterest expense categories, partially offset by increases in allocated corporate overhead expenses ($13 million) and salaries expense ($4 million). The provision for income taxes (FTE) of $155 million for the six month period ended June 30, 2011 increased $72 million, compared to $83 million for the comparable period the prior year, primarily resulting from an increase in income before income taxes.

The net loss for the Retail Bank was $5 million in the six months ended June 30, 2011, compared to a net loss of $10 million in the six months ended June 30, 2010. Net interest income (FTE) of $282 million increased $17 million from the comparable period in the prior year, primarily due to an increase in loan and deposit spreads and the benefit provided by a $724 million increase in average deposits, partially offset by a $469 million decrease in average loans. The provision for loan losses decreased $5 million from the comparable period in the prior year, reflecting a decrease in the Small Business business line (primarily the Midwest market), partially offset by an increase in the Personal Banking business line (primarily the Midwest Market). Net credit-related charge-offs of $46 million decreased $1 million from the comparable period in the prior year. Noninterest income of $87 million increased $1 million from the comparable prior year period, primarily due to nominal increases in other noninterest income categories, partially offset by a $4 million decrease in service charges on deposit accounts. Noninterest expenses of $325 million increased $11 million from the same period in the prior year, primarily due to an increase in allocated corporate overhead expenses ($7 million).

Wealth Management’s net income of $26 million increased $10 million in the six months ended June 30, 2011, compared to the six months ended June 30, 2010. Net interest income (FTE) of $92 million increased $5 million from the comparable period in the prior year, primarily due to increases in loan and deposit spreads. The provision for loan losses decreased $8 million from the comparable period in the prior year, primarily reflecting a decrease in the Midwest market. Net credit-related charge-offs of $19 million decreased $2 million from the comparable period in the prior year, primarily due to a decrease in the Western market, partially offset by an increase in the Florida market. Noninterest income of $128 million increased $6 million from the comparable period in the prior year, primarily due to a $3 million increase in investment banking fees and nominal increases in other noninterest income categories. Noninterest expenses of $155 million increased $2 million, primarily due to an increase in allocated corporate overhead expenses ($4 million).

The net loss for the Finance Division was $164 million in the six months ended June 30, 2011, compared to a net loss of $116 million in the six months ended June 30, 2010. Net interest expense (FTE) increased $74 million in the six months ended June 30, 2011, compared to the same period in the prior year. Net interest expense (FTE) in the Finance Division is primarily impacted by the Corporation’s internal funds transfer methodology. The methodology is designed to centralize interest rate risk in the Finance Division and to measure profitability across all interest rate environments. To that end, the Finance Division pays the three major business segments for the long-

55

term value of deposits based on their assumed lives. The three major business segments pay the Finance Division for funding based on the repricing and term characteristics of their loans. Noninterest income increased $1 million from the comparable period in the prior year, primarily due to a $7 million increase in risk management hedge income, partially offset by a $2 million gain on the repurchase of subordinated debt in the first quarter 2010 and nominal decreases in other noninterest income categories. Noninterest expenses increased $2 million from the same period in the prior year primarily due to a $2 million increase in salaries expense.

The Other category’s net income decreased $10 million to a net loss of $1 million in the six months ended June 30, 2011, compared to the six months ended June 30, 2010. The decrease in net income primarily reflected a $5 million increase in principal investing and warrant income, more than offset by the $17 million after-tax discontinued operations gain recorded in the first quarter 2010.

Market Segments

The Corporation’s management accounting system also produces market segment results for the Corporation’s four primary geographic markets: Midwest, Western, Texas and Florida. In addition to the four primary geographic markets, Other Markets and International are also reported as market segments. Note 14 to these unaudited consolidated financial statements contains a description and presents financial results of these market segments for the six months ended June 30, 2011 and 2010.

The following table presents net income (loss) by market segment.

	Six Months Ended June 30,
(dollar amounts in millions)	2011					2010
Midwest	$	115		31	%	$	86		38	%
Western		101		28			61		26
Texas		62		17			40		17
Florida		(9	)	(2	)		(8	)	(3	)
Other Markets		68		19			19		9
International		27		7			31		13
		364		100	%		229		100	%
Finance & Other Businesses (a)		(165	)				(107	)
Total	$	199				$	122

(a) Includes discontinued operations and items not directly associated with the market segments.

The Midwest market’s net income of $115 million increased $29 million in the six months ended June 30, 2011, compared to the six months ended June 30, 2010. Net interest income (FTE) of $407 million decreased $8 million from the comparable period in the prior year, primarily due to a $700 million decrease in average loans, partially offset by an increase in deposit spreads and the benefit provided by a $747 million increase in average deposits. The provision for loan losses decreased $65 million, reflecting decreases in the Middle Market, Commercial Real Estate, Specialty Businesses, Private Banking and Small Business business lines, partially offset by an increase in the Global Corporate Banking business line. Net credit-related charge-offs of $81 million decreased $17 million from the comparable period in the prior year, primarily due to decreases in charge-offs in the Commercial Real Estate and Specialty Businesses business lines, partially offset by an increase in the Global Corporate Banking business line. Noninterest income of $200 million increased $2 million from the comparable period in the prior year, as a decrease in service charges on deposit accounts ($4 million) was more than offset by nominal increases in other noninterest income categories. Noninterest expenses of $371 million increased $5 million from the same period in the prior year, primarily due to an increase in allocated corporate overhead expenses ($11 million), partially offset by a decrease in the provision for credit losses on lending-related commitments ($7 million). The provision for income taxes (FTE) of $72 million for the six month period ended June 30, 2011, increased $25 million, compared to the same period in the prior year, primarily resulting from an increase in income before income taxes.

The Western market’s net income of $101 million increased $40 million in the six months ended June 30, 2011, compared to the six months ended June 30, 2010. Net interest income (FTE) of $330 million increased $5 million from the comparable prior year period, primarily due to an increase in loan and deposit spreads and the benefit provided by a $408 million increase in average deposits, partially offset by a $636 million decrease in average loans. The provision for loan losses decreased $55 million, primarily reflecting decreases in the Commercial Real Estate and Specialty Businesses business lines. Net credit-related charge-offs of $52 million decreased $60 million from the comparable period in the prior year, primarily due to a decrease in charge-offs in the Commercial

56

Real Estate business line. Noninterest income of $74 million increased $5 million from the comparable period in the prior year primarily due to an increase in net income from principal investing and warrants ($7 million). Noninterest expenses of $217 million increased $2 million from the same period in the prior year, primarily due to increases in allocated corporate overhead expenses ($8 million), partially offset by decreases in the provision for credit losses on lending-commitments ($3 million) and other real estate expense ($3 million). The provision for income taxes (FTE) of $55 million for the six month period ended June 30, 2011, increased $23 million, compared to $32 million for the comparable period in the prior year, primarily resulting from an increase in income before income taxes.

The Texas market’s net income increased $22 million to $62 million in the six months ended June 30, 2011, compared to the six months ended June 30, 2010. Net interest income (FTE) of $176 million increased $16 million from the comparable period in the prior year, primarily due to an increase in loan and deposit spreads and the benefit provided by increases of $845 million in average deposits and $283 million in average loans. The provision for loan losses decreased $14 million, primarily reflecting a decrease in the Commercial Real Estate business line, partially offset by an increase in the Middle Market business line. Net credit-related charge-offs of $12 million decreased $21 million from the comparable period in the prior year, primarily due to a decrease in the Commercial Real Estate business line. Noninterest income of $48 million increased $5 million from the comparable period in the prior year due to nominal increases in several noninterest income categories. Noninterest expenses of $124 million decreased $1 million from the comparable period in the prior year primarily due to decreases in the provision for credit losses on lending-commitments ($3 million) and other real estate expenses ($2 million), partially offset by an increase in allocated corporate overhead expenses ($4 million). The provision for income taxes (FTE) of $36 million for the six month period ended June 30, 2011, increased $14 million, compared to $22 million for the comparable period the prior year, primarily resulting from an increase in income before income taxes.

The net loss in the Florida market was $9 million in the six months ended June 30, 2011, compared to a net loss of $8 million in the six months ended June 30, 2010. Net interest income (FTE) of $23 million increased $2 million from the comparable period in the prior year primarily due to an increase in loan spreads. The provision for loan losses of $19 million in the six months ended June 30, 2011, was unchanged compared to the same period in the prior year, as a decrease in the Commercial Real Estate business line was primarily offset by an increase in the Middle Market business line. Net credit-related charge-offs of $23 million increased $6 million from the comparable period in the prior year, primarily due to increases in the Middle Market and Private Banking business lines. Noninterest income of $7 million was unchanged from the comparable period in the prior year. Noninterest expenses of $24 million increased $3 million from the comparable period in the prior year, primarily due to nominal increases in several noninterest expense categories.

The Other Markets’ net income increased $49 million, to $68 million, in the six months ended June 30, 2011, compared to the six months ended June 30, 2010. Net interest income (FTE) of $82 million decreased $4 million from the comparable period in the prior year primarily due to a $687 million decrease in average loans, partially offset by an increase in loan and deposit spreads and the benefit provided by a $276 million increase in average deposits. The provision for loan losses decreased $77 million, primarily reflecting decreases in the Middle Market and Commercial Real Estate business lines. Net credit-related charge-offs of $21 million decreased $33 from the comparable period in the prior year, primarily due to decreases in charge-offs in the Commercial Real Estate and Middle Market business lines. Noninterest income of $24 million decreased $1 million from the comparable period in the prior year, primarily due to a decrease in investment banking fees ($3 million), partially offset by nominal increases in several noninterest income categories. Noninterest expenses of $41 million decreased $2 million from the comparable period in the prior year. The benefit for income taxes (FTE) of $1 million for the six month period ended June 30, 2011, decreased $25 million, compared to a benefit of $26 million for the comparable period in the prior year, primarily due to an increase in income before income taxes.

The International market’s net income decreased $4 million to $27 million in the six months ended June 30, 2011, compared to the six months ended June 30, 2010. Net interest income (FTE) of $38 million increased $1 million from the comparable period in the prior year, primarily due to increases of $307 million in average deposits and $92 million in average loans, partially offset by a decline in loan spreads. The provision for loan losses increased $3 million to a benefit of $5 million in the six months ended June 30, 2011, compared to a benefit of $8 million for the same period in 2010. Noninterest income of $18 million was unchanged from the comparable period in the prior year. Noninterest expenses of $19 million increased $3 million from the comparable period in the prior year.

The net loss for Finance & Other Businesses was $165 million in the six months ended June 30, 2011, compared to a net loss of $107 million in the six months ended June 30, 2010. The $58 million increase in net loss was due to the same reasons noted in the Finance Division and the Other category discussions under the “Business Segments” heading above.

57

The following table lists the number of the Corporation’s banking centers by market segment.

	June 30,
	2011		2010
Midwest (Michigan)		218		217
Western:
California		104		100
Arizona		17		16
Total Western		121		116
Texas		95		93
Florida		11		10
International		1		1
Total		446		437

Financial Condition

Total assets increased $474 million to $54.1 billion at June 30, 2011, compared to $53.7 billion at December 31, 2010, primarily due to increases of $1.1 billion in interest-bearing deposits with banks and $319 million in cash and due from banks, partially offset by a decrease in total loans of $1.0 billion. On an average basis, total assets increased $761 million in the second quarter 2011, compared to the fourth quarter 2010, resulting primarily from an increase in average interest-bearing deposits with banks of $1.6 billion, partially offset by a decrease in average total loans of $825 million to $39.2 billion.

The following tables show the change in average loans by business line and geographic market in the second quarter 2011, compared to the fourth quarter 2010.

	Three Months Ended
(dollar amounts in millions)	June 30, 2011		December 31, 2010		Change			Percent Change
Average Loans By Business Line:
Middle Market	$	12,024	$	11,770	$	254			2	%
Commercial Real Estate		4,023		4,740		(717	)		(15	)
Global Corporate Banking		4,756		4,344		412			9
National Dealer Services		3,603		3,763		(160	)		(4	)
Specialty Businesses (a)		4,974		5,330		(356	)		(7	)
Total Business Bank		29,380		29,947		(567	)		(2	)
Small Business		3,323		3,407		(84	)		(2	)
Personal Financial Services		1,676		1,785		(109	)		(6	)
Total Retail Bank		4,999		5,192		(193	)		(4	)
Private Banking		4,742		4,820		(78	)		(2	)
Total Wealth Management		4,742		4,820		(78	)		(2	)
Finance/Other		53		40		13			32
Total loans	$	39,174	$	39,999	$	(825	)		(2	)%
Average Loans By Geographic Market:
Midwest	$	14,051	$	14,219	$	(168	)		(1	)%
Western		12,121		12,497		(376	)		(3	)
Texas		6,871		6,435		436			7
Florida		1,565		1,612		(47	)		(3	)
Other Markets		2,823		3,651		(828	)		(23	)
International		1,690		1,545		145			9
Finance/Other		53		40		13			32
Total loans	$	39,174	$	39,999	$	(825	)		(2	)%

(a) Includes Energy, Technology and Life Sciences, Mortgage Banker Finance, Leasing, Entertainment and Financial Services Division

N/M – not meaningful

58

Average loans decreased $825 million, or two percent, to $39.2 billion at June 30, 2011, compared to December 31, 2010, reflecting increases in the Global Corporate Banking ($412 million), Middle Market ($254 million) and Energy Lending ($187 million) (included in Specialty Businesses) business lines. These increases were more than offset by decreases in the Commercial Real Estate ($717 million), Mortgage Banker Finance ($487 million) (included in Specialty Businesses), National Dealer Services ($160 million) and Personal Financial Services ($109 million) business lines. Mortgage Banker Finance provides short-term financing to borrowers in the mortgage banking industry who originate and refinance residential mortgage loans which they subsequently sell in the secondary market (mortgage warehousing loans). Average loans in Mortgage Banker Finance, included in “Commercial Loans” on the consolidated balance sheets, declined 44 percent to $614 million at June 30, 2011, compared to $1.1 billion at December 31, 2010, primarily due to a decline in consumer refinance volumes during the three months ended June 30, 2011 compared to the fourth quarter 2010. The decrease in average loans in the National Dealer Services business line primarily reflected the impact of supply-chain disruptions related to the earthquake and tsunami in Japan in March 2011. Average loans in the Commercial Real Estate business line continued to decline, as the Corporation continued to work through the nonperforming portfolio and customers accessed external sources of long-term refinancing. By market, increases in average loans in the Texas ($436 million) and International ($145 million) markets were more than offset by decreases in Other Markets ($828 million), which included Mortgage Banker Finance, Western ($376 million) and Midwest ($168 million) markets.

Management expects average earning assets of approximately $52.5 billion for the second half of 2011, reflecting increases, primarily related to Sterling, in average loans and average investment securities available-for-sale, partially offset by a decrease in excess liquidity. The pace of decline of loans in the Commercial Real Estate business line is expected to decrease in the second half of 2011. Average loans in the National Dealer Services business line are expected to be lower in the third quarter and rebound in the fourth quarter of 2011.

Total liabilities increased $229 million to $48.1 billion at June 30, 2011, compared to December 31, 2010, primarily due to a $1.3 billion increase in total deposits, partially offset by a $932 million decrease in medium- and long-term debt. On an average basis, total liabilities increased $659 million in the second quarter 2011, compared to the fourth quarter 2010. Average core deposits, which exclude other time deposits and foreign office time deposits, were $41.1 billion for the second quarter 2011, compared to $39.9 billion for the fourth quarter 2010, primarily reflecting increases of $905 million in money market and NOW deposits and $179 million in noninterest-bearing deposits. Within average core deposits, increases from the fourth quarter 2010 to the second quarter 2011 were noted in the Global Corporate Banking ($550 million), Specialty Businesses ($550 million), Personal Banking ($420 million, and Private Banking ($248 million) business lines, partially offset by a decrease in the Middle Market business line ($552 million). By geographic market, average core deposits increased in all major markets in the second quarter 2011, compared to the fourth quarter 2010.

Capital

Total shareholders’ equity increased $245 million to $6.0 billion at June 30, 2011, compared to December 31, 2010. The following table presents a summary of changes in total shareholders’ equity for the six months ended June 30, 2011.

(in millions)
Balance at January 1, 2011				$	5,793
Retention of earnings (net income less cash dividends declared)					164
Change in accumulated other comprehensive income (loss):
Investment securities available-for-sale	$	63
Cash flow hedges		(2	)
Defined benefit and other postretirement plans		20
Total change in accumulated other comprehensive income (loss)					81
Repurchase of common stock					(21	)
Share-based compensation					21
Balance at June 30, 2011				$	6,038

59

On November 16, 2010, the Board of Directors authorized the Corporation to repurchase up to 12.6 million shares of Comerica Incorporated outstanding common stock, and authorized the purchase of up to all 11.5 million of Comerica Incorporated’s original outstanding warrants, which expire November 14, 2018. There is no expiration date for the Corporation’s share repurchase program. For further information regarding the repurchase program, refer to Note 14 to the consolidated financial statements in the Corporation’s 2010 Annual Report. The following table summarizes the Corporation’s repurchase activity during the six months ended June 30, 2011.

(shares in thousands)	Total Number of Shares and Warrants Purchased (a)		Average Price Paid Per Share		Average Price Paid Per Warrant (b)		Total Number of Shares and Warrants Purchased as Part of Publicly Announced Repurchase Plans or Programs		Remaining Repurchase Authorization (c)
Total first quarter 2011		548	$	39.40	$	—		400		23,656
April 2011		3		37.30		—		—		23,656
May 2011		—		—		—		—		23,656
June 2011		—		—		—		—		23,656
Total second quarter 2011		3		37.27		—		—		23,656
Total 2011		551	$	39.38	$	—		400		23,656

(a) Included approximately 151 thousand shares purchased pursuant to deferred compensation plans and shares purchased from employees to pay for taxes related to restricted stock vesting under the terms of an employee share-based compensation plan. These transactions are not considered part of the Corporation’s repurchase program.

(b) The Corporation made no repurchases of warrants under the repurchase program during the six months ended June 30, 2011.

(c) Maximum number of shares and warrants that may yet be purchased under the publicly announced plans or programs.

Management expects to continue the share repurchase program that, combined with dividend payments, results in a payout up to 50 percent of earnings for full-year 2011.

Risk-based regulatory capital standards are designed to make regulatory capital requirements more sensitive to differences in credit risk profiles among banking institutions and to account for off-balance sheet exposure. Assets and off-balance sheet items are assigned to broad risk categories, each with specified risk-weighting factors. The resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance sheet items. As shown in the table below, the Tier 1 common capital, Tier 1 risk-based capital, Total risk-based capital and leverage ratios increased from December 31, 2010 to June 30, 2011. These increases were primarily due to a decrease in risk-weighted assets resulting from a decrease in loans, partially offset by an increase in interest-bearing deposits with banks, which carry a lower risk weight. The tangible common equity ratio increased 36 basis points primarily due to an increase in tangible common equity, reflecting an increase in retained earnings, partially offset by an increase in tangible assets.

In December 2009, the Basel Committee on Banking Supervision (the Basel Committee) released proposed Basel III guidance on bank capital and liquidity. In September 2010, the Basel Committee proposed higher global minimum capital standards, including a minimum Tier 1 common capital ratio and additional capital and liquidity requirements, with rules expected to be implemented between 2013 and 2019. Adoption in the U.S. is expected to occur over a similar timeframe, but the final form of the U.S. rules is not yet certain. The Corporation believes that the expected impacts from changes in the components of capital and the calculation of risk-weighted assets would not be material. A higher degree of uncertainty exists regarding the implementation and interpretation of the liquidity rules. If subject to these rules, the Corporation expects the liquidity requirements to be manageable. While uncertainty exists in both the final form of the Basel III guidance and whether or not the Corporation will be required to adopt the guidelines, the Corporation is closely monitoring the development of the guidance.

The Corporation’s capital ratios exceeded minimum regulatory requirements as follows:

	June 30, 2011					December 31, 2010
(dollar amounts in millions)	Capital		Ratio			Capital		Ratio
Tier 1 common (a) (b)	$	6,193		10.53	%	$	6,027		10.13	%
Tier 1 risk-based (4.00% – minimum) (b)		6,193		10.53			6,027		10.13
Total risk-based (8.00% – minimum) (b)		8,705		14.81			8,651		14.54
Leverage (3.00% – minimum) (b)		6,193		11.39			6,027		11.26
Tangible common equity (a)		5,883		10.90			5,637		10.54

(a) See Supplemental Financial Data section for reconcilements of non-GAAP financial measures.

(b) June 30, 2011 capital and ratios are estimated.

60

At June 30, 2011, the Corporation and its U.S. banking subsidiaries exceeded the ratios required for an institution to be considered “well capitalized” (Tier 1 risk-based capital, total risk-based capital and leverage ratios greater than six percent, 10 percent and five percent, respectively).

Risk Management

The following updated information should be read in conjunction with the “Risk Management” section on pages 38-60 in the Corporation’s 2010 Annual Report.

Credit Risk

Allowance for Credit Losses and Nonperforming Assets

The allowance for credit losses includes both the allowance for loan losses and the allowance for credit losses on lending-related commitments. The allowance for loan losses represents management’s assessment of probable, estimable losses inherent in the Corporation’s loan portfolio. The allowance for loan losses includes specific allowances, based on individual evaluations of certain loans and loan relationships, and allowances for pools of loans with similar risk characteristics for the remaining business and retail loans. The Corporation defines business loans as those belonging to the commercial, real estate construction, commercial mortgage, lease financing and international loan portfolios. Retail loans consist of traditional residential mortgage, home equity and other consumer loans.

The total allowance for loan losses is sufficient to absorb incurred losses inherent in the total loan portfolio. Unanticipated economic events, including political, economic and regulatory instability could cause changes in the credit characteristics of the portfolio and result in an unanticipated increase in the allowance. Inclusion of other industry-specific portfolio exposures in the allowance, as well as significant increases in the current portfolio exposures, could also increase the amount of the allowance. Any of these events, or some combination thereof, may result in the need for additional provision for loan losses in order to maintain an allowance that complies with credit risk and accounting policies. The allowance for loan losses was $806 million at June 30, 2011, compared to $901 million at December 31, 2010, a decrease of $95 million, or 11 percent. The decrease resulted primarily from improvements in credit quality, including a decline of $715 million in the Corporation’s watch list loans from December 31, 2010 to June 30, 2011, and a $1.0 billion decrease in loan balances from December 31, 2010 to June 30, 2011. The decrease in the allowance for loan losses primarily reflected decreases in the Commercial Real Estate (all markets) and Middle Market (primarily the Midwest and Other markets) business lines, partially offset by an increase in the Middle Market business line in the Western market. The allowance for loan losses as a percentage of total period-end loans was 2.06 percent at June 30, 2011, compared to 2.24 percent at December 31, 2010. Nonperforming loans of $974 million at June 30, 2011 decreased $149 million, compared to December 31, 2010. All large nonperforming loans are individually reviewed each quarter for potential charge-offs and reserves. Charge-offs are taken as amounts are determined to be uncollectible based on a qualitative assessment of the recoverability of the principal amount from collateral and other cash flow sources. A measure of the level of charge-offs already taken on nonperforming loans is the current book balance as a percentage of the contractual amount owed. At June 30, 2011, nonperforming loans were charged-off to 53 percent of the contractual amount, compared to 54 percent at December 31, 2010. This level of write-downs is consistent with losses experienced on loan defaults in the first six months of 2011 and in recent years. The allowance as a percentage of total nonperforming loans, a ratio which results from the actions noted above, was 83 percent at June 30, 2011, compared to 80 percent at December 31, 2010. The Corporation’s loan portfolio is primarily composed of business loans, which, in the event of default, are typically carried on the books at fair value as nonperforming assets for a longer period of time than are consumer loans, resulting in a lower nonperforming loan allowance coverage when compared to banking organizations with higher concentrations of consumer loans.

The allowance for credit losses on lending-related commitments, included in “accrued expenses and other liabilities” on the consolidated balance sheets, includes specific allowances, based on individual evaluations of certain letters of credit in a manner consistent with business loans, and allowances based on the pools of the remaining letters of credit and all unused commitments to extend credit within each internal risk rating. A probability of draw estimate is applied to the commitment amount, and the result is multiplied by standard reserve factors consistent with business loans. In general, the probability of draw for letters of credit is considered certain for all letters of credit supporting loans and for letters of credit assigned an internal risk rating generally consistent with regulatory defined substandard or doubtful. Other letters of credit and all unfunded commitments have a lower probability of draw.

61

The allowance for credit losses on lending-related commitments was $30 million at June 30, 2011, a decrease of $5 million from $35 million at December 31, 2010.

Nonperforming assets include loans on nonaccrual status, loans which have been renegotiated to less than the original contractual rates (reduced-rate loans) and real estate which has been acquired through foreclosure and is awaiting disposition (foreclosed property). Nonperforming assets decreased $191 million to $1.0 billion at June 30, 2011, from $1.2 billion at December 31, 2010, and are summarized in the following table.

(in millions)	June 30, 2011			December 31, 2010
Nonaccrual loans:
Business loans:
Commercial	$	261		$	252
Real estate construction:
Commercial Real Estate business line (a)		137			259
Other business lines (b)		2			4
Total real estate construction		139			263
Commercial mortgage:
Commercial Real Estate business line (a)		186			181
Other business lines (b)		269			302
Total commercial mortgage		455			483
Lease financing		6			7
International		7			2
Total nonaccrual business loans		868			1,007
Retail loans:
Residential mortgage		60			55
Consumer:
Home equity		4			5
Other consumer		9			13
Total consumer		13			18
Total nonaccrual retail loans		73			73
Total nonaccrual loans		941			1,080
Reduced-rate loans		33			43
Total nonperforming loans		974			1,123
Foreclosed property		70			112
Total nonperforming assets	$	1,044		$	1,235
Nonperforming loans as a percentage of total loans		2.49	%		2.79	%
Nonperforming assets as a percentage of total loans and foreclosed property		2.66			3.06
Allowance for loan losses as a percentage of total nonperforming loans		83			80
Loans past due 90 days or more and still accruing	$	64		$	62
Loans past due 90 days or more and still accruing as a percentage of total loans		0.16	%		0.15	%

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

62

The following table presents a summary of changes in nonaccrual loans.

	Three Months Ended
(in millions)	June 30, 2011			March 31, 2011			December 31, 2010
Nonaccrual loans at beginning of period	$	996		$	1,080		$	1,163
Loans transferred to nonaccrual (a)		163			166			180
Nonaccrual business loan gross charge-offs (b)		(109	)		(111	)		(120	)
Loans transferred to accrual status (a)		—			(4	)		(4	)
Nonaccrual business loans sold (c)		(9	)		(60	)		(41	)
Payments/Other (d)		(100	)		(75	)		(98	)
Nonaccrual loans at end of period	$	941		$	996		$	1,080
(a)    Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(b)    Analysis of gross loan charge-offs:
Nonaccrual business loans	$	109		$	111		$	120
Performing watch list loans		—			2			—
Retail		16			10			20
Total gross loan charge-offs	$	125		$	123		$	140
(c)    Analysis of loans sold:
Nonaccrual business loans	$	9		$	60		$	41
Performing watch list loans		6			35			29
Total loans sold	$	15		$	95		$	70

(d) Includes net changes related to nonaccrual loans with balances less than $2 million, payments on nonaccrual loans with book balances greater than $2 million, transfers of nonaccrual loans to foreclosed property and retail loan charge-offs. Excludes business loan gross charge-offs and business nonaccrual loans sold.

There were 27 loan relationships with balances greater than $2 million, totaling $163 million, transferred to nonaccrual status in the second quarter 2011, a decrease of $3 million from $166 million in the first quarter 2011. Of the transfers to nonaccrual in the second quarter 2011, $76 million were from the Middle Market business line, primarily in the Midwest and Western markets, and $29 million were from Commercial Real Estate business line, primarily in the Florida, Western and Other markets. There were four loan relationships greater than $10 million, totaling $57 million, transferred to nonaccrual in the second quarter 2011, including $45 million and $12 million to companies in the Middle Market and Specialty Businesses business lines, respectively.

The following table presents the number of nonaccrual loan relationships and balance by size of relationship at June 30, 2011.

(dollar amounts in millions) Nonaccrual Relationship Size	Number of Relationships		Balance
Under $2 million (a)		893	$	231
$2 million - $5 million		63		202
$5 million - $10 million		21		155
$10 million - $25 million		22		324
Greater than $25 million		1		29
Total loan relationships at June 30, 2011		1,000	$	941

(a) For nonaccrual balances under $2 million, number of relationships is represented by the number of borrowers.

63

The following table presents a summary of nonaccrual loans at June 30, 2011 and loan relationships transferred to nonaccrual and net loan charge-offs for the three months ended June 30, 2011, based primarily on the Standard Industrial Classification (SIC) industry categories.

(dollar amounts in millions)	June 30, 2011				Three Months Ended June 30, 2011
Industry Category	Nonaccrual Loans				Loans Transferred to Nonaccrual (a)				Net Loan Charge-Offs (Recoveries)
Real Estate	$	379	41	%	$	45	28	%	$	21	23	%
Services		126	13			33	20			11	13
Finance		72	8			19	12			1	1
Residential Mortgage		60	6			—	—			6	8
Retail Trade		52	6			2	1			6	6
Wholesale Trade		50	5			31	19			4	4
Contractors		33	4			2	1			1	1
Transportation & Warehousing		32	3			15	9			21	23
Manufacturing		32	3			13	8			1	1
Holding & Other Invest. Co.		30	3			—	—			4	5
Hotels, etc.		29	3			—	—			1	1
Utilities		15	2			—	—			2	2
Entertainment		12	1			—	—			1	2
Natural Resources		11	1			—	—			1	1
Other (b)		8	1			3	2			9	9
Total	$	941	100	%	$	163	100	%	$	90	100	%

(a) Based on an analysis of nonaccrual loan relationships with book balances greater than $2 million.

(b) Consumer, excluding residential mortgage and certain personal purpose nonaccrual loans and net charge-offs, are included in the “Other” category.

Business loans are generally placed on nonaccrual status when management determines that full collection of principal or interest is unlikely or when principal or interest payments are 90 days past due, unless the loan is fully collateralized and in the process of collection. The primary driver of when the principal amount of a business loan should be fully or partially charged off is based on a qualitative assessment of the recoverability of the principal amount from collateral and other cash flow sources. Residential mortgage and home equity loans are generally placed on nonaccrual status and charged off to current appraised values, less costs to sell, during the foreclosure process, normally no later than 180 days past due. Other consumer loans are generally not placed on nonaccrual status and are charged off at no later than 120 days past due, earlier if deemed uncollectible. Loan amounts in excess of probable future cash collections are charged off to an amount that management ultimately expects to collect. At the time a loan is placed on nonaccrual status, interest previously accrued but not collected is charged against current income. Income on such loans is then recognized only to the extent that cash is received and the future collection of principal is probable. Generally, a loan may be returned to accrual status when all delinquent principal and interest have been received and the Corporation expects repayment of the remaining contractual principal and interest, or when the loan is both well secured and in the process of collection. For a further discussion of impaired loans refer to Note 1 to the consolidated financial statements in the Corporation’s 2010 Annual Report.

At June 30, 2011, troubled debt restructurings totaled $212 million, of which $141 million were included in nonperforming loans ($108 million nonaccrual loans and $33 million reduced-rate loans) and $71 million were included in performing loans. Performing restructured loans included $51 million of commercial loans (primarily in the Middle Market and Specialty Businesses business lines) and $20 million of commercial mortgage loans (primarily in the Middle Market business line) at June 30, 2011. At December 31, 2010, troubled debt restructurings totaled $165 million, including $44 million performing restructured loans, $78 million nonaccrual loans and $43 million reduced-rate loans. The $47 million increase in troubled debt restructurings was primarily due to increases in the Specialty Businesses and Middle Market business lines.

Loans past due 90 days or more and still accruing interest generally represent loans that are well collateralized and in a continuing process that is expected to result in repayment or restoration to current status. Loans past due 90 days or more and still accruing increased $2 million, to $64 million at June 30, 2011, compared to $62 million at December 31, 2010 and are summarized in the following table. Loans past due 30-89 days increased $62 million to $343 million at June 30, 2011, compared to $281 million at December 31, 2010.

64

Loans past due 90 days or more and still accruing are summarized in the following table.

(in millions)	June 30, 2011		December 31, 2010
Business loans:
Commercial	$	11	$	3
Real estate construction		2		22
Commercial mortgage		25		16
Total business loans		38		41
Retail loans:
Residential mortgage		15		7
Consumer		11		14
Total retail loans		26		21
Total loans past due 90 days or more and still accruing	$	64	$	62

The following table presents a summary of total internally classified watch list loans. Watch list loans that meet certain criteria are individually subjected to quarterly credit quality reviews, and the Corporation may establish specific allowances for such loans. The $715 million decrease in total watch list loans, compared to December 31, 2010, is reflected in the decrease in the allowance for loan losses in the same period.

(dollar amounts in millions)	June 30, 2011			March 31, 2011			December 31, 2010
Total watch list loans	$	4,827		$	5,166		$	5,542
As a percentage of total loans		12.3	%		13.2	%		13.8	%

The following table presents a summary of foreclosed property by property type.

(in millions)	June 30, 2011		March 31, 2011		December 31, 2010
Construction, land development and other land	$	45	$	36	$	60
Single family residential properties		12		13		20
Multi-family residential properties		1		1		—
Other non-land, nonresidential properties		12		24		32
Total foreclosed property	$	70	$	74	$	112

At June 30, 2011, foreclosed property totaled $70 million and consisted of approximately 191 properties, compared to $112 million and approximately 230 properties at December 31, 2010.

The following table presents a summary of changes in foreclosed property.

	Three Months Ended
(in millions)	June 30, 2011			March 31, 2011			December 31, 2010
Foreclosed property at beginning of period	$	74		$	112		$	120
Acquired in foreclosure		17			13			21
Write-downs		(2	)		(7	)		(5	)
Foreclosed property sold (a)		(19	)		(44	)		(25	)
Capitalized expenditures		—			—			1
Foreclosed property at end of period	$	70		$	74		$	112
(a) Net gain (loss) on foreclosed property sold	$	(2	)	$	2		$	4

At June 30, 2011, there were eight foreclosed properties with a carrying value greater than $2 million, totaling $27 million, compared to 10 foreclosed properties totaling $61 million at December 31, 2010. Of the foreclosed properties with balances greater than $2 million at June 30, 2011, $14 million and $13 million were in the Commercial Real Estate and the Middle Market business lines, respectively. At June 30, 2011, there were no foreclosed properties with a carrying value greater than $10 million, compared to two foreclosed properties, totaling $29 million at December 31, 2010.

65

Commercial and Residential Real Estate Lending

The following table summarizes the Corporation’s commercial real estate loan portfolio by loan category as of June 30, 2011 and December 31, 2010.

(in millions)	June 30, 2011		December 31, 2010
Real estate construction loans:
Commercial Real Estate business line (a)	$	1,343	$	1,826
Other business lines (b)		385		427
Total real estate construction loans	$	1,728	$	2,253
Commercial mortgage loans:
Commercial Real Estate business line (a)	$	1,930	$	1,937
Other business lines (b)		7,649		7,830
Total commercial mortgage loans	$	9,579	$	9,767

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

The Corporation limits risk inherent in its commercial real estate lending activities by limiting exposure to those borrowers directly involved in the commercial real estate markets and adhering to conservative policies on loan-to-value ratios for such loans. Commercial real estate loans, consisting of real estate construction and commercial mortgage loans, totaled $11.3 billion at June 30, 2011, of which $3.3 billion, or 29 percent, were to borrowers in the Commercial Real Estate business line, which includes loans to residential real estate investors and developers. The remaining $8.0 billion, or 71 percent, of commercial real estate loans in other business lines consisted primarily of owner-occupied commercial mortgages which bear credit characteristics similar to non-commercial real estate business loans.

The real estate construction portfolio totaled $1.7 billion at June 30, 2011. The real estate construction loan portfolio primarily contains loans made to long-time customers with satisfactory completion experience. However, the significant and sudden decline in residential real estate activity that began in late 2008 in the Western, Florida and Midwest markets proved extremely difficult for many of the smaller residential real estate developers. Of the $1.3 billion of real estate construction loans in the Commercial Real Estate business line, $137 million were on nonaccrual status at June 30, 2011, including single family projects totaling $37 million (primarily in the Western and Florida markets), retail projects totaling $35 million (primarily in the Western and Florida markets), residential land development projects totaling $30 million (primarily in the Western market) and multi-use projects totaling $27 million (primarily in the Western market). Real estate construction loan net charge-offs in the Commercial Real Estate business line totaled $14 million for the six months ended June 30, 2011, including $7 million from residential land development projects (primarily in the Western market) and $4 million from multi-use projects (primarily in the Western market).

The commercial mortgage loan portfolio totaled $9.6 billion at June 30, 2011 and included $1.9 billion in the Commercial Real Estate business line and $7.7 billion in other business lines. Of the $1.9 billion of commercial mortgage loans in the Commercial Real Estate business line, $186 million were on nonaccrual status at June 30, 2011, including retail projects totaling $55 million (primarily in the Midwest market), multi-family projects totaling $24 million (primarily in the Florida market), multi-use projects totaling $24 million (primarily in the Other market), single family projects totaling $21 million (primarily in the Other market) and medical office projects totaling $20 million in the Midwest market. Commercial mortgage loan net charge-offs in the Commercial Real Estate business line totaled $9 million for the six months ended June 30, 2011, primarily including net charge-offs of $4 million from multi-family projects (primarily in the Florida market) and $3 million from retail projects in the Midwest market.

66

The geographic distribution and project type of commercial real estate loans are important factors in diversifying credit risk within the portfolio. The following table reflects real estate construction and commercial mortgage loans to borrowers in the Commercial Real Estate business line by project type and location of property.

(dollar amounts in millions)	June 30, 2011
	Location of Property															December 31, 2010
Project Type:	Western		Michigan		Texas		Florida		Other Markets		Total		% of Total			Total		% of Total
Real estate construction loans:
Commercial Real Estate business line:
Residential:
Single family	$	74	$	9	$	23	$	22	$	13	$	141		10	%	$	196		10	%
Land development		25		8		30		6		23		92		7			157		9
Total residential		99		17		53		28		36		233		17			353		19
Other construction:
Multi-family		128		—		161		56		68		413		31			579		32
Retail		84		46		222		26		29		407		30			485		27
Multi-use		72		—		51		—		8		131		10			201		11
Office		57		5		44		—		—		106		8			119		6
Commercial		—		6		9		—		—		15		1			47		3
Land development		8		9		9		—		—		26		2			24		1
Other		10		—		—		2		—		12		1			18		1
Total	$	458	$	83	$	549	$	112	$	141	$	1,343		100	%	$	1,826		100	%
Commercial mortgage loans:
Commercial Real Estate business line:
Residential:
Single family	$	1	$	3	$	15	$	5	$	38	$	62		3	%	$	69		4	%
Land carry		45		26		15		32		9		127		7			133		6
Total residential		46		29		30		37		47		189		10			202		10
Other commercial mortgage:
Multi-family		128		51		131		177		27		514		27			404		22
Retail		152		91		33		57		17		350		18			386		20
Multi-use		116		39		38		—		52		245		12			249		13
Land carry		122		49		19		13		28		231		12			239		12
Office		104		36		6		24		14		184		10			221		11
Commercial		63		36		11		—		33		143		7			121		6
Other		14		47		—		—		13		74		4			115		6
Total	$	745	$	378	$	268	$	308	$	231	$	1,930		100	%	$	1,937		100	%

Residential real estate development loans totaled $422 million at June 30, 2011, a decrease of $133 million, or 24 percent, from $555 million at December 31, 2010.

The following table summarizes the Corporation’s residential mortgage and home equity loan portfolio by geographic market as of June 30, 2011.

	June 30, 2011
(dollar amounts in millions)	Residential Mortgage Loans		% of Total			Home Equity Loans		% of Total
Geographic market:
Midwest	$	517		35	%	$	986		61	%
Western		510		34			442		27
Texas		232		16			148		9
Florida		229		15			46		3
Other Markets		3		—			—		—
Total	$	1,491		100	%	$	1,622		100	%

67

Residential real estate loans, which consist of traditional residential mortgages and home equity loans and lines of credit, totaled $3.1 billion at June 30, 2011. Residential mortgages totaled $1.5 billion at June 30, 2011, and were primarily larger, variable-rate mortgages originated and retained for certain private banking relationship customers. Of the $1.5 billion of residential mortgage loans outstanding, $60 million were on nonaccrual status at June 30, 2011. The home equity portfolio totaled $1.6 billion at June 30, 2011, of which $1.4 billion was outstanding under primarily variable-rate, interest-only home equity lines of credit and $185 million consisted of closed-end home equity loans. Of the $1.6 billion of home equity loans outstanding, $4 million were on nonaccrual status at June 30, 2011. A substantial majority of the home equity portfolio was secured by junior liens.

The Corporation rarely originates residential real estate loans with a loan-to-value ratio above 100 percent at origination, has no sub-prime mortgage programs and does not originate payment-option adjustable-rate mortgages or other nontraditional mortgages that allow negative amortization. A significant majority of residential mortgage originations are sold in the secondary market. Since 2008, the Corporation has used a third party to originate, document and underwrite residential mortgage loans on behalf of the Corporation. Under this arrangement, the third party assumes any repurchase liability for the loans it originates. The Corporation has repurchase liability exposure for residential mortgage loans originated prior to 2008, however based on historical experience, the Corporation believes such exposure, which could be triggered by early payment defaults by borrowers or by underwriting discrepancies, is minimal. The residential real estate portfolio is principally located within the Corporation’s primary geographic markets. The economic recession and significant declines in home values in the Western, Florida and Midwest markets following the financial market turmoil beginning in the fall of 2008 adversely impacted the residential real estate portfolio. At June 30, 2011, the Corporation estimated that, of the $15 million total residential mortgage loans past due 90 days or more and still accruing interest, approximately $2 million exceeded 90 percent of the current value of the underlying collateral, based on S&P/Case-Shiller home price indices. To account for this exposure, the Corporation factors changes in home values into estimated loss ratios for residential real estate loans, using index-based estimates by major metropolitan area, resulting in an increased allowance allocated for residential real estate loans when home values decline. Additionally, to mitigate increasing credit exposure due to depreciating home values, the Corporation periodically reviews home equity lines of credit and makes line reductions or converts outstanding balances at line maturity to closed-end, amortizing loans when necessary.

Shared National Credits

Shared National Credit (SNC) loans are facilities greater than $20 million shared by three or more federally supervised financial institutions that are reviewed annually by regulatory authorities at the agent bank level. The results of the 2011 SNC Exam were reflected in the second quarter 2011 credit metrics. The Corporation generally seeks to obtain ancillary business at the origination of a SNC relationship. Loans classified as SNC loans (approximately 900 borrowers at June 30, 2011) totaled $7.5 billion at June 30, 2011, compared to $7.3 billion at December 31, 2010. SNC net loan charge-offs totaled $13 million and $14 million for the three- and six-month periods ended June 30, 2011, respectively. SNC loans, diversified by both business line and geographic market, comprised approximately 19 percent and 18 percent of total loans at June 30, 2011 and December 31, 2010, respectively. SNC loans are held to the same credit underwriting standards as the remainder of the loan portfolio and face similar credit challenges.

Automotive Lending

Loans in the National Dealer Services business line include floor plan financing and other loans to automotive dealerships. Floor plan loans, included in “commercial loans” in the consolidated balance sheets, totaled $1.5 billion at June 30, 2011, a decrease of $539 million compared to $2.0 billion at December 31, 2010, primarily reflecting the impact of supply chain disruptions caused by the catastrophic earthquake and tsunami in Japan in March 2011, as the significant majority of the decrease in floor plan loans was concentrated in automotive franchises selling Japanese-made vehicles. Other loans to automotive dealers in the National Dealer Services business line totaled $1.9 billion, including $1.4 billion of owner-occupied commercial real estate mortgage loans, at both June 30, 2011 and December 31, 2010. Automotive lending also includes loans to borrowers involved with automotive production, primarily Tier 1 and Tier 2 suppliers. Loans to borrowers involved with automotive production totaled approximately $1.0 billion at June 30, 2011, compared to $831 million at December 31, 2010.

68

State and Local Municipalities

In the normal course of business, the Corporation serves the needs of state and local municipalities in multiple capacities, including traditional banking products such as deposit services, loans and letters of credit, investment banking services such as bond underwriting and private placements, and by investing in municipal securities.

The following table summarizes the Corporation’s direct exposure to state and local municipalities as of June 30, 2011 and December 31, 2010.

(in millions)	June 30, 2011		December 31, 2010
Loans outstanding	$	39	$	27
Lease financing		413		446
Investment securities available-for-sale		26		39
Trading account securities		8		19
Standby letters of credit		78		80
Unused commitments to extend credit		23		12
Total direct exposure to state and local municipalities	$	587	$	623

Indirect exposure comprised $345 million auction-rate preferred securities collateralized by municipal securities at June 30, 2011, compared to $436 million at December 31, 2010. Additionally, the Corporation is exposed to Automated Clearing House (ACH) transaction risk for those municipalities utilizing this electronic payment and/or deposit method and similar products in their cash flow management. The Corporation sets limits on ACH activity during the underwriting process.

Extensions of credit to state and local municipalities are subjected to the same underwriting standards as other business loans. At June 30, 2011 and December 31, 2010, all outstanding municipal loans and leases were performing according to contractual terms and none were included in the Corporation’s internal watch list. Municipal leases are secured by the underlying equipment, and a substantial majority of the leases are fully defeased with AAA-rated U.S. government securities. Substantially all municipal investment securities available-for sale are auction-rate securities. All auction-rate securities are reviewed quarterly for other-than-temporary impairment. All auction-rate municipal securities were rated investment grade, and all auction-rate preferred securities collateralized by municipal securities were rated AAA or the equivalent and were adequately collateralized at both June 30, 2011 and December 31, 2010. Municipal securities are held in the trading account for resale to customers. In addition, Comerica Securities, a broker-dealer subsidiary of Comerica Bank, underwrites bonds issued by municipalities. All bonds underwritten by Comerica Securities are sold to third party investors.

European Exposure

The Corporation does not hold any sovereign exposure to Portugal, Ireland, Italy, Greece or Spain. The Corporation’s international strategy as it pertains to Europe is to focus on European corporations doing business in North America, with an emphasis on the major geographic markets. Credit limits to banks domiciled in the aforementioned countries totaled less than $15 million at June 30, 2011. In addition, exposure to corporations in the aforementioned European countries was less than $125 million at June 30, 2011.

For further discussion of credit risk, see the “Credit Risk” section on pages 38-52 in the Corporation’s 2010 Annual Report.

69

Market and Liquidity Risk

Interest Rate Risk

Net interest income is the predominant source of revenue for the Corporation. Interest rate risk arises primarily through the Corporation’s core business activities of extending loans and accepting deposits. The Corporation’s balance sheet is predominantly characterized by floating-rate loans funded by a combination of core deposits and wholesale borrowings. Approximately 80 percent of the Corporation’s loans were floating at June 30, 2011, of which approximately 70 percent were based on LIBOR and 30 percent were based on Prime. This creates a natural imbalance between the floating-rate loan portfolio and the more slowly repricing deposit products. The result is that growth and/or contraction in the Corporation’s core businesses will lead to sensitivity to interest rate movements in the absence of mitigating actions. Examples of such actions are purchasing investment securities, primarily fixed-rate, which provide liquidity to the balance sheet and act to mitigate the inherent interest sensitivity, and hedging the sensitivity with interest rate swaps. The Corporation actively manages its exposure to interest rate risk, with the principal objective of optimizing net interest income and the economic value of equity while operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity.

The Corporation frequently evaluates net interest income under various balance sheet and interest rate scenarios, looking at both 12 and 24 month time horizons, using simulation modeling analysis as its principal risk management evaluation technique. The results of these analyses provide the information needed to assess the balance sheet structure. Changes in economic activity, whether domestic or international, different from those management included in its simulation analyses could translate into a materially different interest rate environment than currently expected. Management evaluates a base case net interest income under an unchanged interest rate environment and what is believed to be the most likely balance sheet structure. This base case net interest income is then evaluated against non-parallel interest rate scenarios that increase and decrease 200 basis points in a linear fashion from the base case over twelve months, resulting in an average change in interest rates of 100 basis points over the period. Due to the current low level of interest rates, the analysis reflects a declining interest rate scenario of a 25 basis point drop, to zero percent. In addition, consistent with each interest rate scenario, adjustments to asset prepayment levels, yield curves, and overall balance sheet mix and growth assumptions are made. These assumptions are inherently uncertain and, as a result, the model may not precisely predict the impact of higher or lower interest rates on net interest income. Actual results may differ from simulated results due to timing, magnitude and frequency of changes in interest rates, market conditions and management strategies, among other factors. However, the model can indicate the likely direction of change. Existing derivative instruments entered into for risk management purposes are included in these analyses, but no additional hedging is forecasted.

The table below, as of June 30, 2011 and December 31, 2010, displays the estimated impact on net interest income during the next 12 months by relating the base case scenario results to those from the rising and declining rate scenarios described above. These results do not reflect the impact of the acquisition of Sterling. The Corporation expects the sensitivity of net interest income to changes in interest rates will not be materially different with the addition of Sterling.

	June 30, 2011						December 31, 2010
(dollar amounts in millions)	Amount			%			Amount			%
Sensitivity of net interest income to changes in interest rates:
+200 basis points	$	118			8	%	$	104			7	%
- 25 basis points (to zero percent)		(17	)		(1	)		(15	)		(1	)

In addition to the simulation analysis, an economic value of equity analysis is performed for a longer term view of the interest rate risk position. The economic value of equity analysis begins with an estimate of the economic value of the financial assets and liabilities on the Corporation’s balance sheet, derived through discounting cash flows based on actual rates at the end of the period, and then applies the estimated impact of rate movements to the economic value of assets, liabilities and off-balance sheet instruments. The economic value of equity is then calculated as the difference between the estimated market value of assets and liabilities net of the impact of off-balance sheet instruments. As with net interest income shocks, a variety of alternative scenarios are performed to measure the impact on economic value of equity, including changes in the level, slope and shape of the yield curve.

70

The table below, as of June 30, 2011 and December 31, 2010, displays the estimated impact on the economic value of equity from a 200 basis point immediate parallel increase or decrease in interest rates. Similar to the simulation analysis above, due to the current low level of interest rates, the economic value of equity analyses below reflect an interest rate scenario of an immediate 25 basis point drop, to zero percent, while the rising interest rate scenario reflects an immediate 200 basis point rise. The change in the sensitivity of the economic value of equity to a 200 basis point parallel increase in rates between December 31, 2010 and June 30, 2011 was primarily driven by changes in market interest rates, deposit mix, and the Corporation’s mortgage-backed securities portfolio’s forecasted prepayments.

	June 30, 2011						December 31, 2010
(dollar amounts in millions)	Amount			%			Amount			%
Sensitivity of economic value of equity to changes in interest rates:
+200 basis points	$	365			4	%	$	435			5	%
- 25 basis points (to zero percent)		(96	)		(1	)		(100	)		(1	)

Wholesale Funding

The Corporation satisfies liquidity requirements with either liquid assets or various funding sources. Liquid assets, which totaled $8.8 billion at June 30, 2011, compared to $7.8 billion at December 31, 2010, provide a reservoir of liquidity. Liquid assets include cash and due from bank, federal funds sold and securities purchased under agreements to resell, interest-bearing deposits with banks, other short-term investments and unencumbered investment securities available-for-sale. At June 30, 2011, the Corporation held excess liquidity, represented by $2.4 billion deposited with the FRB, compared to $1.3 billion at December 31, 2010.

The Corporation may access the purchased funds market when necessary, which includes certificates of deposit issued to institutional investors in denominations in excess of $100,000 and to retail customers in denominations of less than $100,000 through brokers (“other time deposits” on the consolidated balance sheets), foreign office time deposits and short-term borrowings. Purchased funds totaled $435 million at June 30, 2011, compared to $562 million at December 31, 2010. Capacity for incremental purchased funds at June 30, 2011, consisted largely of federal funds purchased, brokered certificates of deposits and securities sold under agreements to repurchase. In addition, the Corporation is a member of the Federal Home Loan Bank of Dallas, Texas (FHLB), which provides short- and long-term funding to its members through advances collateralized by real estate-related assets. The actual borrowing capacity is contingent on the amount of collateral available to be pledged to the FHLB. As of June 30, 2011, the Corporation had $2.0 billion of outstanding borrowings from the FHLB with remaining maturities ranging from May 2013 to May 2014. The Corporation also maintains a shelf registration statement with the Securities and Exchange Commission from which it may issue debt and/or equity securities. Additionally, the Bank had the ability to issue up to $14 billion of debt at June 30, 2011 under an existing $15 billion medium-term senior note program which allows the issuance of debt with maturities between three months and 30 years.

Other Market Risks

Certain components of the Corporation’s noninterest income, primarily fiduciary income, are at risk to fluctuations in the market values of underlying assets, particularly equity and debt securities. Other components of noninterest income, primarily brokerage fees, are at risk to changes in the volume of market activity.

At June 30, 2011, the Corporation had a $16 million portfolio of investments in indirect private equity and venture capital funds, with commitments of $6 million to fund additional investments in future periods, compared to a portfolio of $47 million at December 31, 2010. During the six months ended June 30, 2011, the Corporation sold 49 funds for a total of $33 million and recognized a net gain of $2 million. The value of these investments is at risk to changes in equity markets, general economic conditions and a variety of other factors. The majority of these investments are not readily marketable and are included in “accrued income and other assets” on the consolidated balance sheets. The investments are individually reviewed for impairment on a quarterly basis by comparing the carrying value to the estimated fair value.

For further discussion of market risk, see Note 6 to these unaudited consolidated financial statements and pages 52-59 in the Corporation’s 2010 Annual Report.

71

The Dodd-Frank Wall Street Reform and Consumer Protection Act

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Financial Reform Act”) was signed into law. The Financial Reform Act provides for, among other matters, increased regulatory supervision and examination of financial institutions, the imposition of more stringent capital requirements on financial institutions and increased regulation of derivatives and hedging transactions. Provided below is an overview of key elements of the Financial Reform Act relevant to the Corporation. Most of the provisions contained in the Financial Reform Act will be effective immediately upon enactment; however, many have delayed effective dates. Implementation of the Financial Reform Act will require many new mandatory and discretionary rules to be made by federal regulatory agencies over the next several years. The estimates of the impact on the Corporation discussed below are based on the limited information currently available and, given the uncertainty of the timing and scope of the impact, are subject to change until final rulemaking is complete.

• Interest on Demand Deposits: Allows interest on commercial demand deposits, which could lead to increased cost of commercial demand deposits, depending on the interplay of interest, deposit credits and service charges.

• Unlimited Deposit Insurance Extension: Provides unlimited deposit insurance on noninterest-bearing accounts from December 31, 2010 to December 31, 2012. There will not be a separate assessment for unlimited deposit insurance coverage for this period.

• Deposit Insurance: Changes the definition of assessment base from domestic deposits to net assets (average consolidated total assets less average tangible equity), increases the deposit insurance fund’s minimum reserve ratio and permanently increases general deposit insurance coverage from $100,000 to $250,000. The Corporation expects 2011 FDIC insurance expense to be lower than the 2010 expense.

• Derivatives: Allows continued trading of foreign exchange and interest rate derivatives. Requires banks to shift energy, uncleared commodities and agriculture derivatives to a separately capitalized subsidiary within their holding company. Directly impacts client-driven energy derivatives business (approximately $1 million in annual revenue, based on full-year 2010).

• Interchange Fee: Limits debit card transaction processing fees that card issuers can charge to merchants. Based on the final Federal Reserve Board rules, estimated annual revenue from debit card PIN and signature-based interchange fees in 2011 is expected to decrease by approximately $4 million, compared to full-year 2010.

• Trust Preferred Securities: Prohibits holding companies with more than $15 billion in assets from including trust preferred securities as Tier 1 capital, and allows for a phase-in period of three years, beginning January 1, 2013. As of June 30, 2011, the Corporation had no outstanding trust preferred securities.

Critical Accounting Policies

The Corporation’s consolidated financial statements are prepared based on the application of accounting policies, the most significant of which are described in Note 1 to the consolidated financial statements included in the Corporation’s 2010 Annual Report. These policies require numerous estimates and strategic or economic assumptions, which may prove inaccurate or subject to variations. Changes in underlying factors, assumptions or estimates could have a material impact on the Corporation’s future financial condition and results of operations. At December 31, 2010, the most critical of these significant accounting policies were the policies related to allowance for credit losses, valuation methodologies, goodwill, pension plan accounting and income taxes. These policies were reviewed with the Audit Committee of the Corporation’s Board of Directors and are discussed more fully on pages 60-68 in the Corporation’s 2010 Annual Report. As of the date of this report, the Corporation does not believe that there has been a material change in the nature or categories of the critical accounting policies or estimates and assumptions from those discussed in the Corporation’s 2010 Annual Report.

72

Supplemental Financial Data

The following tables provide a reconciliation of non-GAAP financial measures used in this financial review with financial measures defined by GAAP.

	Three Months Ended June 30,						Six Months Ended June 30,
(dollar amounts in millions)	2011			2010			2011			2010
Impact of Excess Liquidity on Net Interest Margin (FTE):
Net interest income (FTE)	$	392		$	424		$	788		$	840
Less:
Interest earned on excess liquidity (a)		2			2			3			5
Net interest income (FTE), excluding excess liquidity	$	390		$	422		$	785		$	835
Average earning assets	$	50,136		$	51,835		$	49,743		$	52,385
Less:
Average net unrealized gains on investment securities available-for-sale		74			80			48			71
Average earning assets for net interest margin (FTE)		50,062			51,755			49,695			52,314
Less:
Excess liquidity (a)		3,382			3,719			2,843			3,905
Average earning assets for net interest margin (FTE), excluding excess liquidity	$	46,680		$	48,036		$	46,852		$	48,409
Net interest margin (FTE)		3.14	%		3.28	%		3.19	%		3.23	%
Net interest margin (FTE), excluding excess liquidity		3.35			3.51			3.37			3.47
Impact of excess liquidity on net interest margin (FTE)		(0.21	)		(0.23	)		(0.18	)		(0.24	)

	June 30, 2011			December 31, 2010
Tier 1 Common Capital Ratio:
Tier 1 capital (b) (c)	$	6,193		$	6,027
Tier 1 common capital (c)		6,193			6,027
Risk-weighted assets (b) (c)		58,790		$	59,506
Tier 1 capital ratio (c)		10.53	%		10.13	%
Tier 1 common capital ratio (c)		10.53			10.13
Tangible Common Equity Ratio:
Total shareholders’ equity	$	6,038		$	5,793
Less:
Goodwill		150			150
Other intangible assets		4			6
Tangible common equity	$	5,884		$	5,637
Total assets	$	54,141		$	53,667
Less:
Goodwill		150			150
Other intangible assets		4			6
Tangible assets	$	53,987		$	53,511
Common equity ratio		11.15	%		10.80	%
Tangible common equity ratio		10.90			10.54

(a) Excess liquidity represented by interest earned on and average balances deposited with the FRB.

(b) Tier 1 capital and risk-weighted assets as defined by regulation.

(c) June 30, 2011 Tier 1 capital and risk-weighted assets are estimated.

The net interest margin (FTE), excluding excess liquidity, removes interest earned on balances deposited with the FRB from net interest income (FTE) and average balances deposited with the FRB from average earning assets from the numerator and denominator of the net interest margin (FTE) ratio, respectively. The Corporation believes this measurement provides meaningful information to investors, regulators, management and others of the impact on net interest income and net interest margin resulting from the Corporation’s short-term investment in low yielding instruments.

The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations. The tangible common equity ratio removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets. The Corporation believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.

73

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Quantitative and qualitative disclosures for the current period can be found in the “Market and Liquidity Risk” section of “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

ITEM 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. The Corporation maintains a set of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed by the Corporation in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Corporation’s management, including the Corporation’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management has evaluated, with the participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Corporation’s disclosure controls and procedures as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on the evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, the Corporation’s disclosure controls and procedures are effective.

(b) Changes in Internal Control Over Financial Reporting. During the period to which this report relates, there have not been any changes in the Corporation’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or that are reasonably likely to materially affect, such controls.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

For information regarding the Corporation’s legal proceedings, see “Part I. Item 1. Note 13 – Contingent Liabilities,” which is incorporated herein by reference.

ITEM 1A. Risk Factors

Other than as set forth below, there has been no material change in the Corporation’s risk factors as previously disclosed in our Form 10-K for the fiscal year ended December 31, 2010 in response to Part I, Item 1A. of such Form 10-K. Such risk factors are incorporated herein by reference.

Below we amend the following risk factor discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010:

General political, economic or industry conditions, either domestically or internationally, may be less favorable than expected.

Local, domestic, and international economic, political and industry specific conditions affect the financial services industry, directly and indirectly. Conditions such as or related to inflation, recession, unemployment, volatile interest rates, international conflicts and other factors, such as real estate values, energy costs, fuel prices, state and local municipal budget deficits and government spending and the U.S. national debt, outside of our control may, directly and indirectly, adversely affect Comerica. As has been the case with the impact of recent economic conditions, economic downturns could result in the delinquency of outstanding loans, which could have a material adverse impact on Comerica’s earnings.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

For information regarding the Corporation’s purchase of equity securities, see “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Capital,” which is incorporated herein by reference.

74

ITEM 6. Exhibits

(2.1)	Agreement and Plan of Merger, dated as of January 16, 2011, by and between Comerica Incorporated and Sterling Bancshares, Inc. (the schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K) (filed as Annex B to Amendment No. 2 to Registrant’s Registration Statement on Form S-4 (File No. 333-172211), and incorporated herein by reference).
(3.1)	Restated Certificate of Incorporation of Comerica Incorporated (filed as Exhibit 3.1 to Registrant’s Current Report on Form 8-K dated August 4, 2010, and incorporated herein by reference).
(3.2)	Certificate of Amendment to Restated Certificate of Incorporation of Comerica Incorporated (filed as Exhibit 3.2 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, and incorporated herein by reference).
(3.3)	Amended and Restated Bylaws of Comerica Incorporated (filed as Exhibit 3.3 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, and incorporated herein by reference).
(4)	[In accordance with Regulation S-K Item No. 601(b)(4)(iii), the Registrant is not filing copies of instruments defining the rights of holders of long-term debt because none of those instruments authorizes debt in excess of 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. The Registrant hereby agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.]
(4.1)	Warrant Agreement, dated as of June 9, 2010, between Comerica Incorporated (as successor to Sterling Bancshares, Inc.) and America Stock Transfer & Trust Company, LLC (filed as Exhibit 4.1 to Sterling Bancshares, Inc.’s Registration Statement on Form 8-A12B filed on June 10, 2010 (File No. 001-34768) and incorporated herein by reference).
(4.2)	Form of Warrant (filed as Exhibit 4.2 to Registrant’s Registration Statement on Form S-4 (File No. 333-172211), and incorporated herein by reference).
(10.1)	Comerica Incorporated 2011 Management Incentive Plan (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated April 26, 2011, and incorporated herein by reference).
(10.2)	1999 Comerica Incorporated Amended and Restated Deferred Compensation Plan (amended and restated on July 26, 2011) (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated July 26, 2011, and incorporated herein by reference).
(10.3)	1999 Comerica Incorporated Amended and Restated Common Stock Deferred Incentive Award Plan (amended and restated on July 26, 2011) (filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K dated July 26, 2011, and incorporated herein by reference).
(10.4)	Form of Standard Comerica Incorporated Non-Employee Director Restricted Stock Unit Agreement under the Comerica Incorporated Amended and Restated Incentive Plan for Non-Employee Directors (Version 4).
(31.1)	Chairman, President and CEO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)
(31.2)	Executive Vice President and CFO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

75

(32)

Section 1350 Certification of Periodic Report (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

(101)

Financial statements from Quarterly Report on Form 10-Q of the Corporation for the quarter ended June 30, 2011, formatted in Extensible Business Reporting Language: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Changes in Shareholders’ Equity, (iv) the Consolidated Statement of Cash Flows and (v) the Notes to Consolidated Financial Statements. †

†             As provided in Rule 406T of Regulation S-T, this information shall not be deemed “filed” for purposes of Section 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 or otherwise subject to liability under those sections.

76

SIGNATURE

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 thereunto duly authorized.

COMERICA INCORPORATED

(Registrant)

/s/ Muneera S. Carr

Muneera S. Carr

Senior Vice President and

Chief Accounting Officer

Date: August 2, 2011

77

EXHIBIT INDEX

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated as of January 16, 2011, by and between Comerica Incorporated and Sterling Bancshares, Inc. (the schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K) (filed as Annex B to Amendment No. 2 to Registrant’s Registration Statement on Form S-4 (File No. 333-172211), and incorporated herein by reference).
3.1	Restated Certificate of Incorporation of Comerica Incorporated (filed as Exhibit 3.1 to Registrant’s Current Report on Form 8-K dated August 4, 2010, and incorporated herein by reference).
3.2	Certificate of Amendment to Restated Certificate of Incorporation of Comerica Incorporated (filed as Exhibit 3.2 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, and incorporated herein by reference).
3.3	Amended and Restated Bylaws of Comerica Incorporated (filed as Exhibit 3.3 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, and incorporated herein by reference).
4	[In accordance with Regulation S-K Item No. 601(b)(4)(iii), the Registrant is not filing copies of instruments defining the rights of holders of long-term debt because none of those instruments authorizes debt in excess of 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. The Registrant hereby agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.]
4.1	Warrant Agreement, dated as of June 9, 2010, between Comerica Incorporated (as successor to Sterling Bancshares, Inc.) and America Stock Transfer & Trust Company, LLC (filed as Exhibit 4.1 to Sterling Bancshares, Inc.’s Registration Statement on Form 8-A12B filed on June 10, 2010 (File No. 001-34768) and incorporated herein by reference).
4.2	Form of Warrant (filed as Exhibit 4.2 to Registrant’s Registration Statement on Form S-4 (File No. 333-172211), and incorporated herein by reference).
10.1	Comerica Incorporated 2011 Management Incentive Plan (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated April 26, 2011, and incorporated herein by reference).
10.2	1999 Comerica Incorporated Amended and Restated Deferred Compensation Plan (amended and restated on July 26, 2011) (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated July 26, 2011, and incorporated herein by reference).
10.3	1999 Comerica Incorporated Amended and Restated Common Stock Deferred Incentive Award Plan (amended and restated on July 26, 2011) (filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K dated July 26, 2011, and incorporated herein by reference).

78

10.4	Form of Standard Comerica Incorporated Non-Employee Director Restricted Stock Unit Agreement under the Comerica Incorporated Amended and Restated Incentive Plan for Non-Employee Directors (Version 4).
31.1	Chairman, President and CEO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)
31.2	Executive Vice President and CFO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)
32	Section 1350 Certification of Periodic Report (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)
101	Financial statements from Quarterly Report on Form 10-Q of the Corporation for the quarter ended June 30, 2011, formatted in Extensible Business Reporting Language: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Changes in Shareholders’ Equity, (iv) the Consolidated Statement of Cash Flows and (v) the Notes to Consolidated Financial Statements. †

†            As provided in Rule 406T of Regulation S-T, this information shall not be deemed “filed” for purposes of Section 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 or otherwise subject to liability under those sections.

79

EX-10.4

Exhibit 10.4

COMERICA INCORPORATED

NON-EMPLOYEE DIRECTOR

RESTRICTED STOCK UNIT AGREEMENT

THIS AGREEMENT is made as of the      day of                     , 20    , by and between Comerica Incorporated, a Delaware corporation (hereinafter referred to as the “Corporation”), and <Director Name> (hereinafter referred to as the “Director”). Any undefined terms appearing herein as defined terms shall have the same meaning as they do in the Comerica Incorporated Amended and Restated Incentive Plan for Non-Employee Directors, as amended from time to time (the “Plan”).

WITNESSETH THAT:

WHEREAS, the Corporation desires to grant to the Director an award of Restricted Stock Units (“RSUs”) under the Plan and the terms hereinafter set forth:

NOW, THEREFORE, in consideration of the premises, and of the mutual agreements hereinafter set forth, it is covenanted and agreed as follows:

1. Award. Pursuant to the provisions of the Plan, the Corporation awards                      RSUs (the “Award”) to the Director on                      (the “Date of Award”). Each RSU shall represent an unfunded, unsecured right for the Director to receive one (1) share of the Corporation’s common stock, par value $5.00 per share (the “Common Stock”), or its cash equivalent, as described in this Agreement.

2. Ownership Rights. The Director has no voting or other ownership rights in the Corporation arising from the Award of RSUs under this Agreement.

3. Dividends. The Director shall be credited with dividend equivalents equal to the dividends the Director would have received if the Director had been the owner of a number of shares of Common Stock equal to the number of RSUs credited to the Director on such dividend payment date (the “Dividend Equivalent”). Any Dividend Equivalent deriving from a cash dividend shall be converted into additional RSUs based on the Fair Market Value of Common Stock on the dividend payment date (or, if the dividend payment date is not a day during which the New York Stock Exchange is open for trading (“NYSE Trading Day”), then on the first NYSE Trading Day following the dividend payment date). Any Dividend Equivalent deriving from a dividend of shares of Common Stock shall be converted into additional RSUs on a one-for-one basis. The Director shall continue to be credited with Dividend Equivalents until the Settlement Date (defined below). The Dividend Equivalents so credited shall be subject to the same terms and conditions as the corresponding Award, and they shall vest (or, if applicable, be forfeited) and be settled in the same manner and at the same time as the corresponding Award, as if they had been granted at the same time as such Award.

4. Vesting. Except as provided in Section 6, the Award shall vest one year after the Date of Award, with such vesting contingent upon the Director’s continued service as a director of the Corporation for a period of one year after the Date of Award. If a Director’s service as a director of the Corporation terminates for any reason prior to the date on which the Award vests, the Award and all corresponding Dividend Equivalents shall be forfeited, and no shares of Common Stock or other payment shall be made to the Director in respect of the Award or any corresponding Dividend Equivalents.

5. Settlement. Once vested, the Award will be settled as follows:

(a) In General. Subject to Section 6(a) hereof, the Award will be settled in Common Stock. Subject to the terms of the Plan, settlement of the Award shall occur on the one-year anniversary of the date that the Director has a Separation from Service (other than as a result of the Director’s Disability); or, in the case of (i) the Director’s death or Separation from Service due to Disability or (ii) a Change of Control, settlement of the Award shall occur as of such earlier date set forth in Section 6 hereof (the “Settlement Date”). On the Settlement Date, the Corporation shall, with respect to an Award that is to be settled in Common Stock, issue or cause there to be transferred to the Director (or, in the case of the Director’s death, to the Director’s designated beneficiary or estate, as applicable or, in the case of the

1

Director’s Disability, to the Director’s guardian or legal representative, if applicable and if permissible under applicable law) a number of shares of Common Stock equal to the aggregate number of RSUs granted to the Director under this Agreement (including, without limitation, the RSUs attributable to Dividend Equivalents) (the “Settlement Shares”).

(b) Termination of Rights. Upon the issuance or transfer of Settlement Shares in settlement of the Award (including, without limitation, the RSUs attributable to Dividend Equivalents), the Award shall be settled in full and the Director (or his or her designated beneficiary or estate, in the case of death) shall have no further rights with respect to the Award.

(c) Certificates or Book Entry. As of the Settlement Date, the Corporation shall, at the discretion of the Committee or its designee, either issue one or more certificates in the Director’s name for such Settlement Shares or evidence book-entry registration of the Settlement Shares in the Director’s name (or, in the case of death, to the Director’s designated beneficiary, if any).

(d) Conditions to Delivery. Notwithstanding any other provision of this Agreement, the Corporation shall not be required to evidence book-entry registration or issue or deliver any certificate or certificates representing Settlement Shares in the event the Corporation reasonably anticipates that such registration, issuance or delivery would violate Federal securities laws or other applicable law; provided that the Corporation must evidence book-entry registration or issue or deliver said certificate or certificates at the earliest date at which the Corporation reasonably anticipates that such registration, issuance or delivery would not cause such violation.

(e) Legends. The Settlement Shares shall be subject to such stop transfer orders and other restrictions as the Committee may deem reasonably advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Settlement Shares are listed, any applicable Federal or state laws or the Corporation’s Certificate of Incorporation and Bylaws, and the Committee may cause a legend or legends to be put on or otherwise apply to any certificates or book-entry position representing Settlement Shares to make appropriate reference to such restrictions.

6. Change of Control; Death, Disability or Retirement. Notwithstanding anything in this Agreement to the contrary:

(a) Upon a Change of Control, the Award (including, without limitation, the RSUs attributable to Dividend Equivalents) shall immediately and fully vest and become nonforfeitable and such Award shall be settled in cash (rather than Settlement Shares) within the 30-day period following the date of such Change of Control.

(b) In the event of the Director’s death or Separation from Service due to Disability or following Retirement while serving as a director with the Corporation, the Award (including, without limitation, the RSUs attributable to Dividend Equivalents) shall immediately and fully vest and become nonforfeitable and the Award shall be settled as set forth in Section 5; provided, however, that in the case of the Director’s death or Separation from Service due to Disability, the Award shall be settled in Settlement Shares within the 30-day period following the date of such Director’s death or Separation from Service, as applicable.

(c) The Committee shall have the sole and absolute discretion to determine whether the termination of the Director’s membership on the board of directors of the Corporation is by reason of Disability, as defined by the Plan and in accordance with Internal Revenue Code Section 409A.

7. Transferability. Unless otherwise determined by the Committee, the RSUs subject to this Award (including, without limitation, Dividend Equivalents) may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Director otherwise than by will or by the

2

laws of intestacy, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Corporation or any Subsidiary or Affiliate; provided, however, that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

8. Adjustment in Award. In the event the number of outstanding shares of Common Stock changes as a result of any stock split, stock dividend, recapitalization, merger, consolidation, reorganization, combination, or exchange of shares, split-up, split-off, spin-off, liquidation or other similar change in capitalization, or any distribution made to holders of Common Stock other than cash dividends, the number or kind of shares subject to this Award shall be automatically adjusted, and the Committee shall be authorized to make such other equitable adjustments of the Award or shares of Common Stock issuable pursuant thereto so that the value of the interest of the Director shall not be decreased by reason of the occurrence of such event. Any such adjustment shall be deemed conclusive and binding on the Corporation, the Director, his or her beneficiaries and all other interested parties.

9. Administration; Amendment. This Award has been made pursuant to a determination by the Committee and/or the Board of Directors of the Corporation, and the Committee shall have plenary authority to interpret, in its sole and absolute discretion, any provision of this Agreement and to make any determinations necessary or advisable for the administration of this Agreement. All such interpretations and determinations shall be final and binding on all persons, including the Corporation, the Director, his or her beneficiaries and all other interested parties. Subject to the terms of the Plan, this Agreement may be amended, in whole or in part, at any time by the Committee; provided, however, that no amendment to this Agreement may adversely affect the Director’s rights under this Agreement without the Director’s consent except such an amendment made to cause the Award to comply with applicable law, stock exchange rules or accounting rules.

10. Binding Nature of Plan. The Award is subject to the Plan. The Director agrees to be bound by all terms and provisions of the Plan and related administrative rules and procedures, including, without limitation, terms and provisions and administrative rules and procedures adopted and/or modified after the granting of the Award. In the event any provisions hereof are inconsistent with those of the Plan, the provisions of the Plan shall control, except to the extent expressly modified herein pursuant to authority granted under the Plan.

11. Applicable Law. The validity, construction and effect of this Agreement and any rules and regulations relating to the Agreement shall be determined in accordance with the laws of the State of Delaware, unless preempted by federal law, and also in accordance with Internal Revenue Code Section 409A and any interpretive authorities promulgated thereunder.

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on its behalf, and the Director has signed this Agreement to evidence the Director’s acceptance of the terms hereof, all as of the date first above written.

COMERICA INCORPORATED

By:

Ralph W. Babb, Jr.

Chairman, President and CEO

DIRECTOR

Name: <Director Name>

3

EX-31.1

Exhibit (31.1) – Chairman, President and CEO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

CERTIFICATION OF PERIODIC REPORT

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ralph W. Babb, Jr., Chairman, President and Chief Executive Officer of Comerica Incorporated (the “Registrant”), certify that:

1. I have reviewed this report on Form 10-Q of the Registrant for the quarterly period ended June 30, 2011;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 2, 2011	/s/ Ralph W. Babb, Jr.
	Ralph W. Babb, Jr.
	Chairman, President and Chief Executive Officer

EX-31.2

Exhibit (31.2) – Executive Vice President and CFO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

CERTIFICATION OF PERIODIC REPORT

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Elizabeth S. Acton, Executive Vice President and Chief Financial Officer of Comerica Incorporated (the “Registrant”), certify that:

1. I have reviewed this report on Form 10-Q of the Registrant for the quarterly period ended June 30, 2011;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 2, 2011	/s/ Elizabeth S. Acton
	Elizabeth S. Acton
	Executive Vice President and Chief Financial Officer

EX-32

Exhibit (32) Section 1350 Certification of Periodic Report (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

CERTIFICATION OF PERIODIC REPORT

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Ralph W. Babb, Jr., Chairman, President and Chief Executive Officer, and Elizabeth S. Acton, Executive Vice President and Chief Financial Officer, of Comerica Incorporated (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 2, 2011	/s/ Ralph W. Babb, Jr.
	Ralph W. Babb, Jr.
	Chairman, President and Chief Executive Officer
	/s/ Elizabeth S. Acton
	Elizabeth S. Acton
	Executive Vice President and Chief Financial Officer

XML



Credit Quality and Allowance for Credit Losses (Nonaccrual, Reduced-Rate Loans and Foreclosed Property) (Details) (USD $) In Millions	Jun. 30, 2011		Dec. 31, 2010
Nonaccrual loans	$ 941		$ 1,080
Reduced-rate loans	33	[1]	43	[1]
Total nonperforming loans	974		1,123
Foreclosed property	70		112
Total nonperforming assets	1,044		1,235
Business Loans [Member]
Nonaccrual loans	868		1,007
Reduced-rate loans	13		26
Retail Loans [Member]
Nonaccrual loans	73		73
Reduced-rate loans	$ 20		$ 17

[1] Reduced-rate business loans totaled $13 million and $26 million, respectively, and reduced-rate retail loans totaled $20 million and $17 million, respectively, at June 30, 2011 and December 31, 2010.

XML



Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010
Consolidated Balance Sheets
Common stock, par value	$ 5	$ 5	$ 5
Common stock, authorized shares	325,000,000	325,000,000	325,000,000
Common stock, issued shares	203,878,110	203,878,110	203,878,110
Shares in treasury	27,092,427	27,342,518	27,561,412

XML



Consolidated Statements of Income (USD $) In Millions, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
INTEREST INCOME
Interest and fees on loans	$ 369	$ 412	$ 744	$ 824
Interest on investment securities	59	61	116	122
Interest on short-term investments	3	3	5	6
Total interest income	431	476	865	952
INTEREST EXPENSE
Interest on deposits	23	29	45	64
Interest on medium- and long-term debt	17	25	34	51
Total interest expense	40	54	79	115
Net interest income	391	422	786	837
Provision for loan losses	47	126	96	301
Net interest income after provision for loan losses	344	296	690	536
NONINTEREST INCOME
Service charges on deposit accounts	51	52	103	108
Fiduciary income	39	38	78	77
Commercial lending fees	21	22	42	44
Letter of credit fees	18	19	36	37
Card fees	15	15	30	28
Foreign exchange income	10	10	19	20
Bank-owned life insurance	9	9	17	17
Brokerage fees	6	6	12	12
Net securities gains	4	1	6	3
Other noninterest income	29	22	66	42
Total noninterest income	202	194	409	388
NONINTEREST EXPENSES
Salaries	185	179	373	348
Employee benefits	50	45	100	89
Total salaries and employee benefits	235	224	473	437
Net occupancy expense	38	39	78	80
Equipment expense	17	15	32	32
Outside processing fee expense	25	23	49	46
Software expense	20	22	43	44
FDIC insurance expense	12	16	27	33
Legal fees	8	9	17	17
Advertising expense	7	7	14	15
Other real estate expense	6	5	14	17
Litigation and operational losses	5	2	8	3
Merger and restructuring charges	5		5
Provision for credit losses on lending-related commitments	(2)		(5)	7
Other noninterest expenses	33	35	69	70
Total noninterest expenses	409	397	824	801
Income from continuing operations before income taxes	137	93	275	123
Provision for income taxes	41	23	76	18
Income from continuing operations	96	70	199	105
Income from discontinued operations, net of tax				17
NET INCOME	96	70	199	122
Less: Preferred stock dividends				123
Less: Income allocated to participating securities	1	1	2
Net income (loss) attributable to common shares	95	69	197	(1)
Basic earnings per common share:
Income (loss) from continuing operations	$ 0.54	$ 0.40	$ 1.12	$ (0.11)
Net income (loss)	$ 0.54	$ 0.40	$ 1.12	$ (0.01)
Diluted earnings per common share:
Income (loss) from continuing operations	$ 0.53	$ 0.39	$ 1.10	$ (0.11)
Net income (loss)	$ 0.53	$ 0.39	$ 1.10	$ (0.01)
Cash dividends declared on common stock	$ 18	$ 8	$ 35	$ 18
Cash dividends declared per common share	$ 0.10	$ 0.05	$ 0.20	$ 0.10

XML



Accumulated Other Comprehensive Income (Loss) (Schedule of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $) In Millions				6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010	Jun. 30, 2011 Accumulated Net Unrealized Gains on Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Accumulated Net Unrealized Gains on Investment Securities Available-For-Sale [Member]	Jun. 30, 2011 Accumulated Net Gains on Cash Flow Hedges [Member]	Jun. 30, 2010 Accumulated Net Gains on Cash Flow Hedges [Member]	Jun. 30, 2011 Accumulated Defined Benefit Pension and Other Postretirement Plans Adjustment [Member]	Jun. 30, 2010 Accumulated Defined Benefit Pension and Other Postretirement Plans Adjustment [Member]
Balance at beginning of period, net of tax				$ 14	$ 11
Net unrealized holding gains arising during the period				106	149
Less: Reclassification adjustment for net gains included in net income				6	3
Change in net unrealized gains before income taxes				100	146
Less: Provision for income taxes				37	54
Change in net unrealized gains on investment securities available-for-sale, net of tax				63	92
Balance at end of period, net of tax				77	103
Balance at beginning of period, net of tax						2	18
Net cash flow hedge gains (losses) arising during the period						(2)	7
Less: Reclassification adjustment for net gains included in net income						1	17
Change in net cash flow hedge gains (losses) before income taxes						(3)	(10)
Less: Provision (benefit) for income taxes						(1)	(4)
Change in net cash flow hedge gains, net of tax						(2)	(6)
Balance at end of period, net of tax							12
Balance at beginning of period, net of tax								(405)	(365)
Net defined benefit pension and other postretirement adjustment arising during the period								7
Less: Adjustment for amounts recognized as components of net periodic benefit cost during the period								(24)	(16)
Change in defined benefit pension and other postretirement plans adjustment before income taxes								31	16
Less: Provision for income taxes								11	6
Change in defined benefit pension and other postretirement plans adjustment, net of tax								20	10
Balance at end of period, net of tax								(385)	(355)
Total accumulated other comprehensive loss at end of period, net of tax	$ (308)	$ (389)	$ (240)

XML



Credit Quality and Allowance for Credit Losses (Changes in the Allowance for Credit Losses on Lending-Related Commitments) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Credit Quality and Allowance for Credit Losses
Balance at beginning of period	$ 32	$ 44	$ 35	$ 37
Provision for credit losses on lending-related commitments	(2)		(5)	7
Balance at end of period	30	44	30	44
Unfunded lending-related commitments sold	$ 3	$ 2	$ 5	$ 2

XML



Acquisition (Tables)

6 Months Ended

Jun. 30, 2011

Acquisition

Fair Value of Consideration Paid, Assets Acquired, Liabilities Assumed and Resulting Goodwill

(in millions)	Initial Allocation
Fair value of consideration paid:
Common stock issued (a)	$	793
Warrants issued		7
Stock options issued		3
Cash in lieu of fractional shares (a)
Total consideration paid		803
Fair value of identifiable assets acquired:
Cash and cash equivalents		730
Investment securities available-for-sale		1,527
Total loans		2,109
Premises and equipment		35
Core deposit intangible		41
Accrued income and other assets		288
Total identifiable assets acquired		4,730
Fair value of liabilities assumed:
Deposits		4,076
Short-term borrowings		20
Medium- and long-term debt		262
Accrued expenses and other liabilities		38
Total liabilities assumed		4,396
Fair value of net identifiable assets acquired		334
Goodwill resulting from acquistion	$	469

Acquired Impaired Loan Portfolio at Fair Value

(In millions)	Impaired Loans
Contractually required principal and interest	$	322
Contractual cash flows not expected to be collected (nonaccretable difference)		165
Expected cash flows		157
Interest component of expected cash flows (accretable yield)		26
Estimated fair value at acquisition	$	131

Acquired Nonimpaired Loan Portfolio at Fair Value

(In millions)	Nonimpaired Loans
Contractually required principal and interest	$	2,468
Contractual cash flows not expected to be collected		206
Estimated fair value at acquisition		1,978

XML



Discontinued Operations (Narrative) (Details) (USD $) In Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Mar. 31, 2010	Jun. 30, 2011	Jun. 30, 2010
Discontinued Operations
Cash settlement of contingent note receivable			$ 35
Gain from disposal of discontinued operation, before tax			27
Gain from disposal of discontinued operations, net of tax			17
Income from discontinued operations before income taxes	$ 0	$ 0		$ 0	$ 27

XML



Document and Entity Information	6 Months Ended
	Jun. 30, 2011	Jul. 25, 2011
Document and Entity Information
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Entity Registrant Name	COMERICA INC /NEW/
Entity Central Index Key	0000028412
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		176,777,667

XML



Investment Securities (Gains and Losses on Available-for-Sale Securities) (Details) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Investment Securities
Securities gains	$ 7	$ 9
Securities losses	(1)	(6)
Total net securities gains	$ 6	$ 3

XML



Credit Quality and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2011

Credit Quality and Allowance for Credit Losses

Schedule of Nonaccrual, Reduced-Rate Loans and Foreclosed Property

(in millions)	June 30, 2011		December 31, 2010
Nonaccrual loans	$	941	$	1,080
Reduced-rate loans (a)		33		43
Total nonperforming loans		974		1,123
Foreclosed property		70		112
Total nonperforming assets	$	1,044	$	1,235

(a) Reduced-rate business loans totaled $13 million and $26 million, respectively, and reduced-rate retail loans totaled $20 million and $17 million, respectively, at June 30, 2011 and December 31, 2010.

Aging Analysis of Loans

	Loans Past Due and Still Accruing
(in millions)		30-59 Days		60-89 Days		90 Days or More		Total		Nonaccrual Loans		Current Loans		Total Loans (c)
June 30, 2011
Business loans:
Commercial		$	131	$	20	$	11	$	162	$	261	$	21,629	$	22,052
Real estate construction:
Commercial Real Estate business line (a)			15		1		2		18		137		1,188		1,343
Other business lines (b)			10		—		—		10		2		373		385
Total real estate construction			25		1		2		28		139		1,561		1,728
Commercial mortgage:
Commercial Real Estate business line (a)			31		13		7		51		186		1,693		1,930
Other business lines (b)			71		10		18		99		269		7,281		7,649
Total commercial mortgage			102		23		25		150		455		8,974		9,579
Lease financing			—		—		—		—		6		943		949
International			—		—		—		—		7		1,155		1,162
Total business loans			258		44		38		340		868		34,262		35,470
Retail loans:
Residential mortgage			16		4		15		35		60		1,396		1,491
Consumer:
Home equity			10		5		6		21		4		1,597		1,622
Other consumer			5		1		5		11		9		590		610
Total consumer			15		6		11		32		13		2,187		2,232
Total retail loans			31		10		26		67		73		3,583		3,723
Total loans		$	289	$	54	$	64	$	407	$	941	$	37,845	$	39,193
December 31, 2010
Business loans:
Commercial		$	84	$	28	$	3	$	115	$	252	$	21,778	$	22,145
Real estate construction:
Commercial Real Estate business line (a)			27		—		17		44		259		1,523		1,826
Other business lines (b)			2		—		5		7		4		416		427
Total real estate construction			29		—		22		51		263		1,939		2,253
Commercial mortgage:
Commercial Real Estate business line (a)			8		1		—		9		181		1,747		1,937
Other business lines (b)			28		25		16		69		302		7,459		7,830
Total commercial mortgage			36		26		16		78		483		9,206		9,767
Lease financing			—		—		—		—		7		1,002		1,009
International			1		—		—		1		2		1,129		1,132
Total business loans			150		54		41		245		1,007		35,054		36,306
Retail loans:
Residential mortgage			33		23		7		63		55		1,501		1,619
Consumer:
Home equity			11		4		10		25		5		1,674		1,704
Other consumer			4		2		4		10		13		584		607
Total consumer			15		6		14		35		18		2,258		2,311
Total retail loans			48		29		21		98		73		3,759		3,930
Total loans		$	198	$	83	$	62	$	343	$	1,080	$	38,813	$	40,236

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

Changes in the Allowance for Loan Losses and Related Loan Amounts

	June 30, 2011
(in millions)	Business Loans			Retail Loans			Total			June 30, 2010
Three Months Ended
Allowance for loan losses:
Balance at beginning of period	$	786		$	63		$	849		$	987
Loan charge-offs		(109	)		(16	)		(125	)		(158	)
Recoveries on loans previously charged-off		33			2			35			12
Net loan charge-offs		(76	)		(14	)		(90	)		(146	)
Provision for loan losses		28			19			47			126
Balance at end of period	$	738		$	68		$	806		$	967
Six Months Ended
Allowance for loan losses:
Balance at beginning of period	$	839		$	62		$	901		$	985
Loan charge-offs		(222	)		(26	)		(248	)		(342	)
Recoveries on loans previously charged-off		54			3			57			23
Net loan charge-offs		(168	)		(23	)		(191	)		(319	)
Provision for loan losses		67			29			96			301
Balance at end of period	$	738		$	68		$	806		$	967
Allowance for loan losses:
Individually evaluated for impairment	$	172		$	4		$	176		$	205
Collectively evaluated for impairment		566			64			630			762
Total allowance for loan losses	$	738		$	68		$	806		$	967
Loans:
Individually evaluated for impairment	$	808		$	49		$	857		$	956
Collectively evaluated for impairment		34,662			3,674			38,336			39,646
Total loans evaluated for impairment	$	35,470		$	3,723		$	39,193		$	40,602

Changes in the Allowance for Credit Losses on Lending-Related Commitments

	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)	2011			2010		2011			2010
Balance at beginning of period	$	32		$	44	$	35		$	37
Provision for credit losses on lending-related commitments		(2	)		—		(5	)		7
Balance at end of period	$	30		$	44	$	30		$	44
Unfunded lending-related commitments sold	$	3		$	2	$	5		$	2

Individually Evaluated Impaired Loans

	Recorded Investment In:
(in millions)		Impaired Loans with No Related Allowance		Impaired Loans with Related Allowance		Total Impaired Loans		Unpaid Principal Balance		Related Allowance for Loan Losses
June 30, 2011
Business loans:
Commercial		$	10	$	258	$	268	$	416	$	69
Real estate construction:
Commercial Real Estate business line (a)			—		128		128		217		19
Other business lines (b)			—		3		3		10		2
Total real estate construction			—		131		131		227		21
Commercial mortgage:
Commercial Real Estate business line (a)			—		183		183		225		37
Other business lines (b)			—		213		213		282		42
Total commercial mortgage			—		396		396		507		79
Lease financing			—		6		6		14		1
International			—		7		7		13		2
Total business loans			10		798		808		1,177		172
Retail loans:
Residential mortgage			3		38		41		47		3
Consumer loans:
Other consumer			—		8		8		13		1
Total retail loans			3		46		49		60		4
Total individually evaluated impaired loans		$	13	$	844	$	857	$	1,237	$	176
December 31, 2010
Business loans:
Commercial		$	9	$	237	$	246	$	398	$	55
Real estate construction:
Commercial Real Estate business line (a)			—		249		249		400		51
Other business lines (b)			—		—		—		—		—
Total real estate construction			—		249		249		400		51
Commercial mortgage:
Commercial Real Estate business line (a)			—		178		178		282		35
Other business lines (b)			—		245		245		325		49
Total commercial mortgage			—		423		423		607		84
Lease financing			—		7		7		15		1
International			—		2		2		2		1
Total business loans			9		918		927		1,422		192
Retail loans:
Residential mortgage			8		29		37		41		3
Consumer loans:
Other consumer			—		10		10		14		2
Total retail loans			8		39		47		55		5
Total individually evaluated impaired loans		$	17	$	957	$	974	$	1,477	$	197

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

The following table presents information regarding average individually evaluated impaired loans and the related interest recognized for the three- and six-month periods ended June 30, 2011 and 2010.

	2011				2010
(in millions)	Average Impaired Loans for the Period		Interest Income Recognized for the Period		Average Impaired Loans for the Period		Interest Income Recognized for the Period
Three Months Ended June 30
Business loans:
Commercial	$	242	$	4	$	213	$	3
Real estate construction:
Commercial Real Estate business line (a)		159		—		339		1
Other business lines (b)		1		—		3		—
Total real estate construction		160		—		342		1
Commercial mortgage:
Commercial Real Estate business line (a)		192		1		151		1
Other business lines (b)		224		1		212		1
Total commercial mortgage		416		2		363		2
Lease financing		7		—		11		—
International		6		—		5		—
Total business loans		831		6		934		6
Retail loans:
Residential mortgage		41		—		31		—
Consumer loans:
Other consumer		7		—		2		—
Total retail loans		48		—		33		—
Total individually evaluated impaired loans	$	879	$	6	$	967	$	6
Six Months Ended June 30
Business loans:
Commercial	$	244	$	5	$	206	$	3
Real estate construction:
Commercial Real Estate business line (a)		189		—		390		1
Other business lines (b)		1		—		2		—
Total real estate construction		190		—		392		1
Commercial mortgage:
Commercial Real Estate business line (a)		187		1		144		1
Other business lines (b)		231		2		175		1
Total commercial mortgage		418		3		319		2
Lease financing		7		—		12		—
International		4		—		14		1
Total business loans		863		8		943		7
Retail loans:
Residential mortgage		39		—		28		—
Consumer loans:
Other consumer		8		—		2		—
Total retail loans		47		—		30		—
Total individually evaluated impaired loans	$	910	$	8	$	973	$	7

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

Average Individually Evaluated Impaired Loans and Related Interest Recognized

	2011				2010
(in millions)	Average Impaired Loans for the Period		Interest Income Recognized for the Period		Average Impaired Loans for the Period		Interest Income Recognized for the Period
Three Months Ended June 30
Business loans:
Commercial	$	242	$	4	$	213	$	3
Real estate construction:
Commercial Real Estate business line (a)		159		—		339		1
Other business lines (b)		1		—		3		—
Total real estate construction		160		—		342		1
Commercial mortgage:
Commercial Real Estate business line (a)		192		1		151		1
Other business lines (b)		224		1		212		1
Total commercial mortgage		416		2		363		2
Lease financing		7		—		11		—
International		6		—		5		—
Total business loans		831		6		934		6
Retail loans:
Residential mortgage		41		—		31		—
Consumer loans:
Other consumer		7		—		2		—
Total retail loans		48		—		33		—
Total individually evaluated impaired loans	$	879	$	6	$	967	$	6
Six Months Ended June 30
Business loans:
Commercial	$	244	$	5	$	206	$	3
Real estate construction:
Commercial Real Estate business line (a)		189		—		390		1
Other business lines (b)		1		—		2		—
Total real estate construction		190		—		392		1
Commercial mortgage:
Commercial Real Estate business line (a)		187		1		144		1
Other business lines (b)		231		2		175		1
Total commercial mortgage		418		3		319		2
Lease financing		7		—		12		—
International		4		—		14		1
Total business loans		863		8		943		7
Retail loans:
Residential mortgage		39		—		28		—
Consumer loans:
Other consumer		8		—		2		—
Total retail loans		47		—		30		—
Total individually evaluated impaired loans	$	910	$	8	$	973	$	7

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

Loans by Credit Quality Indicator

	Internally Assigned Rating
(in millions)	Pass (a)		Special Mention (b)		Substandard (c)		Nonaccrual (d)		Total
June 30, 2011
Business loans:
Commercial	$	20,099	$	900	$	792	$	261	$	22,052
Real estate construction:
Commercial Real Estate business line (e)		820		202		184		137		1,343
Other business lines (f)		341		24		18		2		385
Total real estate construction		1,161		226		202		139		1,728
Commercial mortgage:
Commercial Real Estate business line (e)		1,179		328		237		186		1,930
Other business lines (f)		6,400		504		476		269		7,649
Total commercial mortgage		7,579		832		713		455		9,579
Lease financing		912		11		20		6		949
International		1,061		60		34		7		1,162
Total business loans		30,812		2,029		1,761		868		35,470
Retail loans:
Residential mortgage		1,400		5		26		60		1,491
Consumer:
Home equity		1,573		16		29		4		1,622
Other consumer		581		10		10		9		610
Total consumer		2,154		26		39		13		2,232
Total retail loans		3,554		31		65		73		3,723
Total loans	$	34,366	$	2,060	$	1,826	$	941	$	39,193
December 31, 2010
Business loans:
Commercial	$	19,884	$	1,015	$	994	$	252	$	22,145
Real estate construction:
Commercial Real Estate business line (e)		1,025		333		209		259		1,826
Other business lines (f)		383		20		20		4		427
Total real estate construction		1,408		353		229		263		2,253
Commercial mortgage:
Commercial Real Estate business line (e)		1,104		372		280		181		1,937
Other business lines (f)		6,595		508		425		302		7,830
Total commercial mortgage		7,699		880		705		483		9,767
Lease financing		962		13		27		7		1,009
International		963		112		55		2		1,132
Total business loans		30,916		2,373		2,010		1,007		36,306
Retail loans:
Residential mortgage		1,541		6		17		55		1,619
Consumer:
Home equity		1,662		26		11		5		1,704
Other consumer		575		8		11		13		607
Total consumer		2,237		34		22		18		2,311
Total retail loans		3,778		40		39		73		3,930
Total loans	$	34,694	$	2,413	$	2,049	$	1,080	$	40,236

(a) Includes all loans not included in the categories of special mention, substandard or nonaccrual.

(b) Special mention loans are accruing loans that have potential credit weaknesses that deserve management's close attention, such as loans to borrowers who may be experiencing financial difficulties that may result in deterioration of repayment prospects from the borrower at some future date. Included in the special mention category were $509 million and $546 million at June 30, 2011 and December 31, 2010, respectively, of loans proactively monitored by management that were considered "pass" by regulatory authorities.

(c) Substandard loans are accruing loans that have a well-defined weakness, or weaknesses, such as loans to borrowers who may be experiencing losses from operations or inadequate liquidity of a degree and duration that jeopardizes the orderly repayment of the loan. Substandard loans also are distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. This category is generally consistent with the "substandard" category as defined by regulatory authorities.

(d) Nonaccrual loans are loans for which the accrual of interest has been discontinued. For further information, refer to the Nonperforming Assets subheading in Note 1 - Summary of Significant Accounting Policies - on page 76 of the Corporation's Annual Report for the year ended December 31, 2010. This category is generally consistent with the "doubtful" category as defined by regulatory authorities.

(e) Primarily loans to real estate investors and developers.

(f) Primarily loans secured by owner-occupied real estate.

XML



Investment Securities (Investment Securities Available-for-Sale in an Unrealized Loss Position) (Details) (USD $) In Millions	6 Months Ended		12 Months Ended
	Jun. 30, 2011		Dec. 31, 2010
Unrealized loss position, Impaired Less than 12 months, Fair Value	$ 1,263		$ 1,702
Unrealized loss position, Impaired Less than 12 months, Unrealized Losses	11		39
Unrealized loss position, Impaired 12 months or more, Fair Value	370		474
Unrealized loss position, Impaired 12 months or more, Unrealized Losses	38		37
Impaired, Total Fair Value	1,633		2,176
Impaired, Total Unrealized Losses	49		76
Residential Mortgage-Backed Securities [Member]
Unrealized loss position, Impaired Less than 12 months, Fair Value	1,263	[1]	1,702	[1]
Unrealized loss position, Impaired Less than 12 months, Unrealized Losses	11	[1]	39	[1]
Impaired, Total Fair Value	1,263	[1]	1,702	[1]
Impaired, Total Unrealized Losses	11	[1]	39	[1]
State And Municipal Securities [Member]
Unrealized loss position, Impaired 12 months or more, Fair Value	25	[2]	38	[2]
Unrealized loss position, Impaired 12 months or more, Unrealized Losses	6	[2]	7	[2]
Impaired, Total Fair Value	25	[2]	38	[2]
Impaired, Total Unrealized Losses	6	[2]	7	[2]
Auction-Rate Preferred Securities [Member]
Unrealized loss position, Impaired 12 months or more, Fair Value	345		436
Unrealized loss position, Impaired 12 months or more, Unrealized Losses	32		30
Impaired, Total Fair Value	345		436
Impaired, Total Unrealized Losses	$ 32		$ 30

[1] Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

[2] Primarily auction-rate securities.

XML



Contingent Liabilities (Details) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Contingent Liabilities
Litigation-related expense	$ 3	$ 1

XML



Credit Quality and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2011

Credit Quality and Allowance for Credit Losses

Credit Quality and Allowance for Credit Losses

NOTE 5 – CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES

The following table summarizes nonperforming assets as of June 30, 2011 and December 31, 2010.

(in millions)	June 30, 2011		December 31, 2010
Nonaccrual loans	$	941	$	1,080
Reduced-rate loans (a)		33		43
Total nonperforming loans		974		1,123
Foreclosed property		70		112
Total nonperforming assets	$	1,044	$	1,235

(a) Reduced-rate business loans totaled $13 million and $26 million, respectively, and reduced-rate retail loans totaled $20 million and $17 million, respectively, at June 30, 2011 and December 31, 2010.

The following presents an aging analysis of loans as of June 30, 2011 and December 31, 2010.

	Loans Past Due and Still Accruing
(in millions)		30-59 Days		60-89 Days		90 Days or More		Total		Nonaccrual Loans		Current Loans		Total Loans (c)
June 30, 2011
Business loans:
Commercial		$	131	$	20	$	11	$	162	$	261	$	21,629	$	22,052
Real estate construction:
Commercial Real Estate business line (a)			15		1		2		18		137		1,188		1,343
Other business lines (b)			10		—		—		10		2		373		385
Total real estate construction			25		1		2		28		139		1,561		1,728
Commercial mortgage:
Commercial Real Estate business line (a)			31		13		7		51		186		1,693		1,930
Other business lines (b)			71		10		18		99		269		7,281		7,649
Total commercial mortgage			102		23		25		150		455		8,974		9,579
Lease financing			—		—		—		—		6		943		949
International			—		—		—		—		7		1,155		1,162
Total business loans			258		44		38		340		868		34,262		35,470
Retail loans:
Residential mortgage			16		4		15		35		60		1,396		1,491
Consumer:
Home equity			10		5		6		21		4		1,597		1,622
Other consumer			5		1		5		11		9		590		610
Total consumer			15		6		11		32		13		2,187		2,232
Total retail loans			31		10		26		67		73		3,583		3,723
Total loans		$	289	$	54	$	64	$	407	$	941	$	37,845	$	39,193
December 31, 2010
Business loans:
Commercial		$	84	$	28	$	3	$	115	$	252	$	21,778	$	22,145
Real estate construction:
Commercial Real Estate business line (a)			27		—		17		44		259		1,523		1,826
Other business lines (b)			2		—		5		7		4		416		427
Total real estate construction			29		—		22		51		263		1,939		2,253
Commercial mortgage:
Commercial Real Estate business line (a)			8		1		—		9		181		1,747		1,937
Other business lines (b)			28		25		16		69		302		7,459		7,830
Total commercial mortgage			36		26		16		78		483		9,206		9,767
Lease financing			—		—		—		—		7		1,002		1,009
International			1		—		—		1		2		1,129		1,132
Total business loans			150		54		41		245		1,007		35,054		36,306
Retail loans:
Residential mortgage			33		23		7		63		55		1,501		1,619
Consumer:
Home equity			11		4		10		25		5		1,674		1,704
Other consumer			4		2		4		10		13		584		607
Total consumer			15		6		14		35		18		2,258		2,311
Total retail loans			48		29		21		98		73		3,759		3,930
Total loans		$	198	$	83	$	62	$	343	$	1,080	$	38,813	$	40,236

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

The following table details the changes in the allowance for loan losses for the three- and six-month periods ended June 30, 2011 and 2010 and related loan amounts as of June 30, 2011 and 2010.

	June 30, 2011
(in millions)	Business Loans			Retail Loans			Total			June 30, 2010
Three Months Ended
Allowance for loan losses:
Balance at beginning of period	$	786		$	63		$	849		$	987
Loan charge-offs		(109	)		(16	)		(125	)		(158	)
Recoveries on loans previously charged-off		33			2			35			12
Net loan charge-offs		(76	)		(14	)		(90	)		(146	)
Provision for loan losses		28			19			47			126
Balance at end of period	$	738		$	68		$	806		$	967
Six Months Ended
Allowance for loan losses:
Balance at beginning of period	$	839		$	62		$	901		$	985
Loan charge-offs		(222	)		(26	)		(248	)		(342	)
Recoveries on loans previously charged-off		54			3			57			23
Net loan charge-offs		(168	)		(23	)		(191	)		(319	)
Provision for loan losses		67			29			96			301
Balance at end of period	$	738		$	68		$	806		$	967
Allowance for loan losses:
Individually evaluated for impairment	$	172		$	4		$	176		$	205
Collectively evaluated for impairment		566			64			630			762
Total allowance for loan losses	$	738		$	68		$	806		$	967
Loans:
Individually evaluated for impairment	$	808		$	49		$	857		$	956
Collectively evaluated for impairment		34,662			3,674			38,336			39,646
Total loans evaluated for impairment	$	35,470		$	3,723		$	39,193		$	40,602

Changes in the allowance for credit losses on lending-related commitments, included in "accrued expenses and other liabilities" on the consolidated balance sheets, are summarized in the following table.

	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)	2011			2010		2011			2010
Balance at beginning of period	$	32		$	44	$	35		$	37
Provision for credit losses on lending-related commitments		(2	)		—		(5	)		7
Balance at end of period	$	30		$	44	$	30		$	44
Unfunded lending-related commitments sold	$	3		$	2	$	5		$	2

The following table presents additional information regarding individually evaluated impaired loans.

	Recorded Investment In:
(in millions)		Impaired Loans with No Related Allowance		Impaired Loans with Related Allowance		Total Impaired Loans		Unpaid Principal Balance		Related Allowance for Loan Losses
June 30, 2011
Business loans:
Commercial		$	10	$	258	$	268	$	416	$	69
Real estate construction:
Commercial Real Estate business line (a)			—		128		128		217		19
Other business lines (b)			—		3		3		10		2
Total real estate construction			—		131		131		227		21
Commercial mortgage:
Commercial Real Estate business line (a)			—		183		183		225		37
Other business lines (b)			—		213		213		282		42
Total commercial mortgage			—		396		396		507		79
Lease financing			—		6		6		14		1
International			—		7		7		13		2
Total business loans			10		798		808		1,177		172
Retail loans:
Residential mortgage			3		38		41		47		3
Consumer loans:
Other consumer			—		8		8		13		1
Total retail loans			3		46		49		60		4
Total individually evaluated impaired loans		$	13	$	844	$	857	$	1,237	$	176
December 31, 2010
Business loans:
Commercial		$	9	$	237	$	246	$	398	$	55
Real estate construction:
Commercial Real Estate business line (a)			—		249		249		400		51
Other business lines (b)			—		—		—		—		—
Total real estate construction			—		249		249		400		51
Commercial mortgage:
Commercial Real Estate business line (a)			—		178		178		282		35
Other business lines (b)			—		245		245		325		49
Total commercial mortgage			—		423		423		607		84
Lease financing			—		7		7		15		1
International			—		2		2		2		1
Total business loans			9		918		927		1,422		192
Retail loans:
Residential mortgage			8		29		37		41		3
Consumer loans:
Other consumer			—		10		10		14		2
Total retail loans			8		39		47		55		5
Total individually evaluated impaired loans		$	17	$	957	$	974	$	1,477	$	197

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

The following table presents information regarding average individually evaluated impaired loans and the related interest recognized for the three- and six-month periods ended June 30, 2011 and 2010.

	2011				2010
(in millions)	Average Impaired Loans for the Period		Interest Income Recognized for the Period		Average Impaired Loans for the Period		Interest Income Recognized for the Period
Three Months Ended June 30
Business loans:
Commercial	$	242	$	4	$	213	$	3
Real estate construction:
Commercial Real Estate business line (a)		159		—		339		1
Other business lines (b)		1		—		3		—
Total real estate construction		160		—		342		1
Commercial mortgage:
Commercial Real Estate business line (a)		192		1		151		1
Other business lines (b)		224		1		212		1
Total commercial mortgage		416		2		363		2
Lease financing		7		—		11		—
International		6		—		5		—
Total business loans		831		6		934		6
Retail loans:
Residential mortgage		41		—		31		—
Consumer loans:
Other consumer		7		—		2		—
Total retail loans		48		—		33		—
Total individually evaluated impaired loans	$	879	$	6	$	967	$	6
Six Months Ended June 30
Business loans:
Commercial	$	244	$	5	$	206	$	3
Real estate construction:
Commercial Real Estate business line (a)		189		—		390		1
Other business lines (b)		1		—		2		—
Total real estate construction		190		—		392		1
Commercial mortgage:
Commercial Real Estate business line (a)		187		1		144		1
Other business lines (b)		231		2		175		1
Total commercial mortgage		418		3		319		2
Lease financing		7		—		12		—
International		4		—		14		1
Total business loans		863		8		943		7
Retail loans:
Residential mortgage		39		—		28		—
Consumer loans:
Other consumer		8		—		2		—
Total retail loans		47		—		30		—
Total individually evaluated impaired loans	$	910	$	8	$	973	$	7

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

The following table presents loans by credit quality indicator, based on internal risk ratings assigned to each business loan at the time of approval and subjected to subsequent reviews, generally at least annually, and to pools of retail loans with similar risk characteristics.

	Internally Assigned Rating
(in millions)	Pass (a)		Special Mention (b)		Substandard (c)		Nonaccrual (d)		Total
June 30, 2011
Business loans:
Commercial	$	20,099	$	900	$	792	$	261	$	22,052
Real estate construction:
Commercial Real Estate business line (e)		820		202		184		137		1,343
Other business lines (f)		341		24		18		2		385
Total real estate construction		1,161		226		202		139		1,728
Commercial mortgage:
Commercial Real Estate business line (e)		1,179		328		237		186		1,930
Other business lines (f)		6,400		504		476		269		7,649
Total commercial mortgage		7,579		832		713		455		9,579
Lease financing		912		11		20		6		949
International		1,061		60		34		7		1,162
Total business loans		30,812		2,029		1,761		868		35,470
Retail loans:
Residential mortgage		1,400		5		26		60		1,491
Consumer:
Home equity		1,573		16		29		4		1,622
Other consumer		581		10		10		9		610
Total consumer		2,154		26		39		13		2,232
Total retail loans		3,554		31		65		73		3,723
Total loans	$	34,366	$	2,060	$	1,826	$	941	$	39,193
December 31, 2010
Business loans:
Commercial	$	19,884	$	1,015	$	994	$	252	$	22,145
Real estate construction:
Commercial Real Estate business line (e)		1,025		333		209		259		1,826
Other business lines (f)		383		20		20		4		427
Total real estate construction		1,408		353		229		263		2,253
Commercial mortgage:
Commercial Real Estate business line (e)		1,104		372		280		181		1,937
Other business lines (f)		6,595		508		425		302		7,830
Total commercial mortgage		7,699		880		705		483		9,767
Lease financing		962		13		27		7		1,009
International		963		112		55		2		1,132
Total business loans		30,916		2,373		2,010		1,007		36,306
Retail loans:
Residential mortgage		1,541		6		17		55		1,619
Consumer:
Home equity		1,662		26		11		5		1,704
Other consumer		575		8		11		13		607
Total consumer		2,237		34		22		18		2,311
Total retail loans		3,778		40		39		73		3,930
Total loans	$	34,694	$	2,413	$	2,049	$	1,080	$	40,236

(a) Includes all loans not included in the categories of special mention, substandard or nonaccrual.

(b) Special mention loans are accruing loans that have potential credit weaknesses that deserve management's close attention, such as loans to borrowers who may be experiencing financial difficulties that may result in deterioration of repayment prospects from the borrower at some future date. Included in the special mention category were $509 million and $546 million at June 30, 2011 and December 31, 2010, respectively, of loans proactively monitored by management that were considered "pass" by regulatory authorities.

(c) Substandard loans are accruing loans that have a well-defined weakness, or weaknesses, such as loans to borrowers who may be experiencing losses from operations or inadequate liquidity of a degree and duration that jeopardizes the orderly repayment of the loan. Substandard loans also are distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. This category is generally consistent with the "substandard" category as defined by regulatory authorities.

(d) Nonaccrual loans are loans for which the accrual of interest has been discontinued. For further information, refer to the Nonperforming Assets subheading in Note 1 - Summary of Significant Accounting Policies - on page 76 of the Corporation's Annual Report for the year ended December 31, 2010. This category is generally consistent with the "doubtful" category as defined by regulatory authorities.

(e) Primarily loans to real estate investors and developers.

(f) Primarily loans secured by owner-occupied real estate.

XML



Derivative and Credit-Related Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2011

Derivative and Credit-Related Financial Instruments

Schedule of Derivative Instruments

	June 30, 2011						December 31, 2010
	Notional/ Contract Amount (b)		Fair Value (a)				Notional/ Contract Amount (b)		Fair Value (a)
			Asset Derivatives		Liability Derivatives				Asset Derivatives		Liability Derivatives
(in millions)
Risk management purposes
Derivatives designated as hedging instruments
Interest rate contracts:
Swaps - cash flow - receive fixed/pay floating	$	—	$	—	$	—	$	800	$	3	$	—
Swaps - fair value - receive fixed/pay floating		1,450		261		—		1,600		263		—
Total risk management interest rate swaps designated as hedging instruments		1,450		261		—		2,400		266		—
Derivatives used as economic hedges
Foreign exchange contracts:
Spot, forwards and swaps		386		2		1		220		2		—
Total risk management purposes	$	1,836	$	263	$	1	$	2,620	$	268	$	—
Customer-initiated and other activities
Interest rate contracts:
Caps and floors written	$	553	$	—	$	5	$	697	$	—	$	7
Caps and floors purchased		553		5		—		697		7		—
Swaps		9,231		247		218		9,126		269		242
Total interest rate contracts		10,337		252		223		10,520		276		249
Energy derivative contracts:
Caps and floors written		1,254		—		71		1,106		—		62
Caps and floors purchased		1,254		71		—		1,106		62		—
Swaps		413		29		29		411		41		41
Total energy derivative contracts		2,921		100		100		2,623		103		103
Foreign exchange contracts:
Spot, forwards, futures, options and swaps		2,621		45		39		2,497		49		48
Total customer-initiated and other activities	$	15,879	$	397	$	362	$	15,640	$	428	$	400
Total derivatives	$	17,715	$	660	$	363	$	18,260	$	696	$	400

(a) Asset derivatives are included in "accrued income and other assets" and liability derivatives are included in "accrued expenses and other liabilities" on the consolidated balance sheets. Included in the fair value of derivative assets and liabilities are credit valuation adjustments reflecting counterparty credit risk and credit risk of the Corporation. The fair value of derivative assets included credit valuation adjustments for counterparty credit risk totaling $4 million and $5 million at June 30, 2011 and December 31, 2010, respectively.

(b) Notional or contract amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets.

Net Gains (Losses) Recognized in Other Noninterest Income-Risk Management Derivatives-Fair Value Hedges

	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)	2011		2010			2011		2010
Interest rate swaps	$	—	$	(1	)	$	1	$	(2	)

Schedule of Net Gains (Losses) Recognized in Income and OCI-Risk Management Derivatives-Cash Flow Hedges

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2011		2010		2011			2010
Interest rate swaps
Gain (loss) recognized in OCI (effective portion)	$	—	$	1	$	(2	)	$	7
Gain (loss) recognized in other noninterest income (ineffective portion)		—		—		1			(3	)
Gain reclassified from accumulated OCI into interest and fees on loans (effective portion)		—		9		1			17

Schedule of Weighted Average Maturity and Interest Rates on Risk Management Interest Rate Swaps

			Weighted Average
(dollar amounts in millions)	Notional Amount		Remaining Maturity (in years)		Receive Rate			Pay Rate (a)
June 30, 2011
Swaps - fair value - receive fixed/pay floating rate
Medium- and long-term debt designation	$	1,450		5.9		5.45	%		0.45	%
Total risk management interest rate swaps	$	1,450
December 31, 2010
Swaps - cash flow - receive fixed/pay floating rate
Variable rate loan designation	$	800		0.1		4.75	%		3.25	%
Swaps - fair value - receive fixed/pay floating rate
Medium- and long-term debt designation		1,600		7.1		5.73			0.85
Total risk management interest rate swaps	$	2,400

(a) Variable rates paid on receive fixed swaps are based on prime and six-month LIBOR rates in effect at June 30, 2011 and December 31, 2010.

Schedule of Net Gains Recognized in Income on Customer-Initiated Derivatives

		Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	Location of Gain	2011		2010		2011		2010
Interest rate contracts	Other noninterest income	$	2	$	4	$	8	$	7
Energy derivative contracts	Other noninterest income		1		1		1		1
Foreign exchange contracts	Foreign exchange income		9		10		17		19
Total		$	12	$	15	$	26	$	27

Schedule of Financial Instruments with Off-Balance Sheet Credit Risk

(in millions)	June 30, 2011		December 31, 2010
Unused commitments to extend credit:
Commercial and other	$	23,612	$	23,578
Bankcard, revolving check credit and home equity loan commitments		1,565		1,568
Total unused commitments to extend credit	$	25,177	$	25,146
Standby letters of credit	$	5,282	$	5,453
Commercial letters of credit		132		93
Other credit-related financial instruments		1		1

Summary of Internally Classified Watch List Letters of Credit

(dollar amounts in millions)	June 30, 2011			December 31, 2010
Total watch list standby and commercial letters of credit	$	233		$	243
As a percentage of total outstanding standby and commercial letters of credit		4.3	%		4.4	%

XML



Fair Value Measurements (Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis) (Details) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Total assets at fair value on a nonrecurring basis	$ 775	$ 907
Level 2 [Member] | Residential Mortgage loans Held- for-Sale [Member]
Total assets at fair value on a nonrecurring basis	7	6
Residential Mortgage loans Held- for-Sale [Member]
Total assets at fair value on a nonrecurring basis	7	6
Level 3 [Member] | Commercial Loans [Member]
Total assets at fair value on a nonrecurring basis	221	200
Commercial Loans [Member]
Total assets at fair value on a nonrecurring basis	221	200
Level 3 [Member] | Real Estate Construction Loans [Member]
Total assets at fair value on a nonrecurring basis	129	247
Real Estate Construction Loans [Member]
Total assets at fair value on a nonrecurring basis	129	247
Level 3 [Member] | Commercial Mortgage Loans [Member]
Total assets at fair value on a nonrecurring basis	363	398
Commercial Mortgage Loans [Member]
Total assets at fair value on a nonrecurring basis	363	398
Level 3 [Member] | Residential Mortgage [Member]
Total assets at fair value on a nonrecurring basis	10
Residential Mortgage [Member]
Total assets at fair value on a nonrecurring basis	10
Level 3 [Member] | Lease Financing Loans [Member]
Total assets at fair value on a nonrecurring basis	6	7
Lease Financing Loans [Member]
Total assets at fair value on a nonrecurring basis	6	7
Level 3 [Member] | International Loans [Member]
Total assets at fair value on a nonrecurring basis	7	2
International Loans [Member]
Total assets at fair value on a nonrecurring basis	7	2
Level 3 [Member] | Total Loans [Member]
Total assets at fair value on a nonrecurring basis	736	854
Total Loans [Member]
Total assets at fair value on a nonrecurring basis	736	854
Level 3 [Member] | Nonmarketable Equity Securities [Member]
Total assets at fair value on a nonrecurring basis	2	9
Nonmarketable Equity Securities [Member]
Total assets at fair value on a nonrecurring basis	2	9
Level 3 [Member] | Other Real Estate [Member]
Total assets at fair value on a nonrecurring basis	26	33
Other Real Estate [Member]
Total assets at fair value on a nonrecurring basis	26	33
Level 3 [Member] | Loan Servicing Rights [Member]
Total assets at fair value on a nonrecurring basis	4	5
Loan Servicing Rights [Member]
Total assets at fair value on a nonrecurring basis	4	5
Level 2 [Member]
Total assets at fair value on a nonrecurring basis	7	6
Level 3 [Member]
Total assets at fair value on a nonrecurring basis	$ 768	$ 901

XML



Acquisition (Acquired NonImpaired Loan Portfolio at Fair Value) (Details) (Nonimpaired Loans [Member], USD $) In Millions	Jul. 28, 2011
Nonimpaired Loans [Member]
Contractually required principal and interest	$ 2,468
Contractual cash flows not expected to be collected	206
Estimated fair value at acquisition	$ 1,978

XML



Investment Securities (Tables)

6 Months Ended

Jun. 30, 2011

Investment Securities

Summary of Investment Securities Available-For-Sale

(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2011
U.S. Treasury and other U.S. government agency securities	$	20	$	—	$	—	$	20
Residential mortgage-backed securities (a)		6,741		169		11		6,899
State and municipal securities (b)		32		—		6		26
Corporate debt securities:
Auction-rate debt securities		1		—		—		1
Other corporate debt securities		49		—		—		49
Equity and other non-debt securities:
Auction-rate preferred securities		467		2		32		437
Money market and other mutual funds		105		—		—		105
Total investment securities available-for-sale	$	7,415	$	171	$	49	$	7,537
December 31, 2010
U.S. Treasury and other U.S. government agency securities	$	131	$	—	$	—	$	131
Residential mortgage-backed securities (a)		6,653		95		39		6,709
State and municipal securities (b)		46		—		7		39
Corporate debt securities:
Auction-rate debt securities		1		—		—		1
Other corporate debt securities		26		—		—		26
Equity and other non-debt securities:
Auction-rate preferred securities		597		3		30		570
Money market and other mutual funds		84		—		—		84
Total investment securities available-for-sale	$	7,538	$	98	$	76	$	7,560

(a) Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

(b) Primarily auction-rate securities.

Summary of Investment Securities Available-For-Sale in Unrealized Loss Positions

	Impaired
	Less than 12 months				12 months or more				Total
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2011
Residential mortgage-backed securities (a)	$	1,263	$	11	$	—	$	—	$	1,263	$	11
State and municipal securities (b)		—		—		25		6		25		6
Equity and other non-debt securities:
Auction-rate preferred securities		—		—		345		32		345		32
Total impaired securities	$	1,263	$	11	$	370	$	38	$	1,633	$	49
December 31, 2010
Residential mortgage-backed securities (a)	$	1,702	$	39	$	—	$	—	$	1,702	$	39
State and municipal securities (b)		—		—		38		7		38		7
Equity and other non-debt securities:
Auction-rate preferred securities		—		—		436		30		436		30
Total impaired securities	$	1,702	$	39	$	474	$	37	$	2,176	$	76

(a) Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

(b) Primarily auction-rate securities.

Gains and Losses on Available-For-Sale Securities

	Six Months Ended June 30,
(in millions)	2011			2010
Securities gains	$	7		$	9
Securities losses		(1	)		(6	)
Total net securities gains	$	6		$	3

Contractual Maturity Distribution of Debt Securities

(in millions)	Amortized		Fair
June 30, 2011	Cost		Value
Contractual maturity
Within one year	$	69	$	69
After one year through five years		466		473
After five years through ten years		55		56
After ten years		6,253		6,397
Subtotal		6,843		6,995
Equity and other nondebt securities:
Auction-rate preferred securities		467		437
Money market and other mutual funds		105		105
Total investment securities available-for-sale	$	7,415	$	7,537

XML



Net Income (Loss) per Common Share

6 Months Ended

Jun. 30, 2011

Net Income (Loss) per Common Share

Net Income (Loss) per Common Share

NOTE 10 – NET INCOME (LOSS) PER COMMON SHARE

Basic and diluted income (loss) from continuing operations per common share and net income (loss) per common share for the three- and six-month periods ended June 30, 2011 and 2010 are presented in the following table.

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share data)	2011		2010		2011		2010
Basic and diluted
Income from continuing operations	$	96	$	70	$	199	$	105
Less:
Preferred stock dividends		—		—		—		29
Redemption discount accretion on preferred stock		—		—		—		94
Income allocated to participating securities		1		1		2		—
Income (loss) from continuing operations attributable to common shares	$	95	$	69	$	197	$	(18	)
Net income	$	96	$	70	$	199	$	122
Less:
Preferred stock dividends		—		—		—		29
Redemption discount accretion on preferred stock		—		—		—		94
Income allocated to participating securities		1		1		2		—
Net income (loss) attributable to common shares	$	95	$	69	$	197	$	(1	)
Basic average common shares		175		175		175		165
Basic income (loss) from continuing operations per common share	$	0.54	$	0.40	$	1.12	$	(0.11	)
Basic net income (loss) per common share	$	0.54	$	0.40	$	1.12	$	(0.01	)
Basic average common shares		175		175		175		165
Dilutive common stock equivalents:
Net effect of the assumed exercise of stock options		—		—		—		—
Net effect of the assumed exercise of warrants		3		3		3		—
Diluted average common shares		178		178		178		165
Diluted income (loss) from continuing operations per common share	$	0.53	$	0.39	$	1.10	$	(0.11	)
Diluted net income (loss) per common share	$	0.53	$	0.39	$	1.10	$	(0.01	)

The following average shares related to outstanding options to purchase shares of common stock were not included in the computation of diluted net income (loss) per common share because the exercise prices of the options were greater than the average market price of common shares for the period.

	Three Months Ended June  30,				Six Months Ended June  30,
(shares in millions)	2011		2010		2011		2010
Average shares related to outstanding options		16.8		13.9		16.2		14.4
Range of exercise prices	$	36.24 - $64.50	$	40.32 - $64.50	$	36.24 - $64.50	$	39.19 - $64.50

Due to the net loss from continuing operations attributable to common shares for the six months ended June 30, 2010, common stock equivalents for options to purchase 5.1 million shares and warrants to purchase 11.5 million shares, with average exercise prices less than the average market price of common shares for the period, were excluded from the computation of diluted net loss per common share, as their inclusion would have been anti-dilutive.

XML



Basis of Presentation and Accounting Policies

6 Months Ended

Jun. 30, 2011

Basis of Presentation and Accounting Policies

Basis of Presentation and Accounting Policies

NOTE 1 – BASIS OF PRESENTATION AND ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation were included. The results of operations for the six months ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. Certain items in prior periods were reclassified to conform to the current presentation. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report of Comerica Incorporated and Subsidiaries (the Corporation) on Form 10-K for the year ended December 31, 2010.

Pending Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-05, "Comprehensive Income (Topic 220): Presentation of Comprehensive Income," (ASU 2011-05). The Corporation will adopt ASU 2011-05, which revises the way in which comprehensive income is presented in the financial statements, in its consolidated financial statements in the first quarter 2012. The provisions of ASU 2011-05 give companies the option to present total comprehensive income, components of net income, and components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. While the provisions of ASU 2011-05 will amend the presentation of comprehensive income, the adoption of ASU 2011-05 will not have any effect on the Corporation's financial condition and results of operations.

In May 2011, the FASB issued ASU No. 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs." The Corporation will adopt ASU 2011-04, which generally aligns the principles of fair value measurements with International Financial Reporting Standards (IFRSs), in its consolidated financial statements in the first quarter 2012. The provisions of ASU 2011-04 clarify the application of existing fair value measurement requirements, and expand the disclosure requirements for fair value measurements. While the provisions of ASU 2011-04 will increase the Corporation's fair value disclosures the Corporation does not expect the adoption of ASU 2011-04 to have any effect on the Corporation's financial condition and results of operations.

In April 2011, the FASB issued ASU No. 2011-02, "Receivables (Topic 310): A Creditor's Determination of Whether a Restructuring is a Troubled Debt Restructuring," (ASU 2011-02). The Corporation will adopt ASU 2011-02, which clarifies existing guidance used by creditors to determine when a modification represents a concession, in its consolidated financial statements in the third quarter 2011. While the provisions of ASU 2011-02 may increase the amount of the Corporation's receivables that are considered troubled debt restructurings and will expand the Corporation's disclosures on troubled debt restructurings, the Corporation expects minimal impact to the allowance for loan losses and does not expect the adoption of ASU 2011-02 to have a material effect on the Corporation's financial condition and results of operations.

XML



Acquisition (Narrative) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011	Jul. 28, 2011	Jul. 27, 2011
Business acquisition date		July 28, 2011
Stock conversion ratio			0.2365
Closing stock price				$ 32.67
Fair value of total consideration paid			$ 803
Initial goodwill			469
Core deposit intangible amortization period (in years)		10
Pre-integration and transaction costs incurred	5	5
Common Stock [Member]
Common stock, issued shares		24,000,000
Common stock value issued			$ 793

XML



Variable Interest Entities (VIEs)

6 Months Ended

Jun. 30, 2011

Variable Interest Entities (VIEs)

Variable Interest Entities (VIEs)

NOTE 7 – VARIABLE INTEREST ENTITIES (VIEs)

The Corporation evaluates its interest in certain entities to determine if these entities meet the definition of a VIE and whether the Corporation is the primary beneficiary and should consolidate the entity based on the variable interests it held both at inception and when there is a change in circumstances that require a reconsideration. The following provides a summary of the VIEs in which the Corporation has an interest.

The Corporation has a limited partnership interest in 149 low income housing tax credit/historic rehabilitation tax credit partnerships. These entities meet the definition of a VIE; however, the Corporation is not the primary beneficiary of the entities, as the general partner has both the power to direct the activities that most significantly impact the economic performance of the entities and the obligation to absorb losses or the right to receive benefits that could be significant to the entities. While the partnership agreements allow the limited partners, through a majority vote, to remove the general partner, this right is not deemed to be substantive as the general partner can only be removed for cause.

The Corporation accounts for its interest in these partnerships on either the cost or equity method. Exposure to loss as a result of the Corporation's involvement with these entities at June 30, 2011 was limited to the book basis of the Corporation's investment of approximately $337 million, which includes unused commitments for future investments.

As a limited partner, the Corporation obtains income tax credits and deductions from the operating losses of these low income housing tax credit/historic rehabilitation tax credit partnerships, which are recorded as a reduction of income tax expense (or an increase to income tax benefit) and a reduction of federal income taxes payable. These income tax credits and deductions are allocated to the funds' investors based on their ownership percentages. Investment balances, including all legally binding commitments to fund future investments, are included in "accrued income and other assets" on the consolidated balance sheets, with amortization and other write-downs of investments recorded in "other noninterest income" on the consolidated statements of income. In addition, a liability is recognized in "accrued expenses and other liabilities" on the consolidated balance sheets for all legally binding unfunded commitments to fund low income housing partnerships ($78 million at June 30, 2011).

The Corporation provided no financial or other support that was not contractually required to any of the above VIEs during the six-month periods ended June 30, 2011 and 2010.

The following table summarizes the impact of these VIEs on line items on the Corporation's consolidated statements of income.

	Three Months Ended						Six Months Ended
(in millions)	June 30,						June 30,
Classification in Earnings	2011			2010			2011			2010
Other noninterest income	$	(13	)	$	(12	)	$	(26	)	$	(24	)
Provision (benefit) for income taxes (a)		(13	)		(12	)		(26	)		(24	)

(a) Income tax credits from low income housing tax credit/historic rehabilitation tax credit partnerships.

Additional information regarding the Corporation's consolidation policy can be found in Note 1 to the consolidated financial statements in the Corporation's 2010 Annual Report.

XML



Income Taxes and Tax-Related Items

6 Months Ended

Jun. 30, 2011

Income Taxes and Tax-Related Items

Income Taxes and Tax-Related Items

NOTE 12 – INCOME TAXES AND TAX-RELATED ITEMS

The provision for federal income taxes is computed by applying the statutory federal income tax rate to income before income taxes as reported in the consolidated financial statements after deducting non-taxable items, principally income on bank-owned life insurance, and deducting tax credits related to investments in low income housing partnerships. Tax interest, state taxes and foreign taxes are then added to the federal tax provision.

Beginning in the first quarter of 2011, the Corporation applied an estimated annual effective tax rate to interim period pre-tax income to calculate the income tax provision for the quarter, in accordance with the principal method prescribed by the accounting guidance established for computing income taxes in interim periods. Prior to 2011, specifically for the interim periods beginning second quarter 2009 through December 31, 2010, the Corporation applied an alternative method permitted under the accounting guidance to calculate interim period income taxes. Under the alternative method, interim period income taxes were based on each discrete quarter's pre-tax income (loss). The method was used by the Corporation due the volatility and uncertainty in the economy in those periods. Given the diminishing economic volatility and the Corporation's ability to render more reliable estimates of pre-tax income in 2011, the principal method was applied beginning in the first quarter 2011. The Corporation determined it was impracticable to retroactively apply the principal method to the prior interim periods.

At June 30, 2011, net unrecognized tax benefits were $27 million, compared to net unrecognized tax benefits of $5 million at June 30, 2010. The increase in unrecognized tax benefits of $22 million from June 30, 2010 to June 30, 2011 was primarily the result of the recognition of a settlement agreement with the Internal Revenue Service (IRS) regarding the repatriation of foreign earnings on a structured investment transaction and the recognition of other federal settlements. The Corporation anticipates that it is reasonably possible that final settlement of federal and state tax issues will result in a decrease of net unrecognized tax benefits of$30 million within the next twelve months. Accrued interest payable on tax liabilities was insignificant at June 30, 2011 and $17 million at June 30, 2010. The $17 million decrease in accrued interest from June 30, 2010 to June 30, 2011 was primarily the result of the aforementioned settlements with tax authorities.

In the ordinary course of business, the Corporation enters into certain transactions that have tax consequences. From time to time, the IRS may question and/or challenge specific interpretative tax positions taken by the Corporation with respect to those transactions. The Corporation believes that its tax returns were filed based upon applicable statutes, regulations and case law in effect at the time of the transactions. The IRS, an administrative authority or a court, if presented with the transactions, could disagree with the Corporation's interpretation of the tax law.

Based on current knowledge and probability assessment of various potential outcomes, the Corporation believes that current tax reserves are adequate and the amount of any incremental liability arising is not expected to have a material adverse effect on the Corporation's consolidated financial condition or results of operations. Probabilities and outcomes are reviewed as events unfold, and adjustments to the reserves are made when necessary.

XML



Net Income (Loss) per Common Share (Basic and Diluted Income (Loss) from Continuing Operations per Common Share) (Details) (USD $) In Millions, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Income from continuing operations	$ 96	$ 70	$ 199	$ 105
Less: Income allocated to participating securities	(1)	(1)	(2)
Net income (loss) attributable to common shares	95	69	197	(1)
Net income	96	70	199	122
Basic income (loss) from continuing operations per common share	$ 0.54	$ 0.40	$ 1.12	$ (0.11)
Basic net income (loss) per common share	$ 0.54	$ 0.40	$ 1.12	$ (0.01)
Diluted income (loss) from continuing operations per common share	$ 0.53	$ 0.39	$ 1.10	$ (0.11)
Diluted net income (loss) per common share	$ 0.53	$ 0.39	$ 1.10	$ (0.01)
Net Income [Member]
Less: Preferred stock dividends				29
Less: Redemption discount accretion on preferred stock				94
Less: Income allocated to participating securities	1	1	2
Net income (loss) attributable to common shares	95	69	197	(1)
Net income	96	70	199	122
Segment, Continuing Operations [Member]
Income from continuing operations	96	70	199	105
Less: Preferred stock dividends				29
Less: Redemption discount accretion on preferred stock				94
Less: Income allocated to participating securities	1	1	2
Net income (loss) attributable to common shares	$ 95	$ 69	$ 197	$ (18)
Earnings Per Share, Basic [Member]
Basic average common shares	175	175	175	165
Basic income (loss) from continuing operations per common share	$ 0.54	$ 0.40	$ 1.12	$ (0.11)
Basic net income (loss) per common share	$ 0.54	$ 0.40	$ 1.12	$ (0.01)
Earnings Per Share, Diluted [Member]
Net effect of the assumed exercise of warrants	3	3	3
Diluted average common shares	178	178	178	165
Diluted income (loss) from continuing operations per common share	$ 0.53	$ 0.39	$ 1.10	$ (0.11)
Diluted net income (loss) per common share	$ 0.53	$ 0.39	$ 1.10	$ (0.01)

XML



Medium- and Long-Term Debt

6 Months Ended

Jun. 30, 2011

Medium- and Long-Term Debt

Medium- and Long-Term Debt

NOTE 8 – MEDIUM- AND LONG-TERM DEBT

Medium- and long-term debt is summarized as follows:

(in millions)	June 30, 2011		December 31, 2010
Parent company
Subordinated notes:
4.80% subordinated notes due 2015	$	337	$	337
Medium-term notes:
3.00% notes due 2015		298		298
Total parent company		635		635
Subsidiaries
Subordinated notes:
5.70% subordinated notes due 2014		279		280
5.75% subordinated notes due 2016		692		691
5.20% subordinated notes due 2017		572		568
8.375% subordinated notes due 2024		191		191
7.875% subordinated notes due 2026		215		213
Total subordinated notes		1,949		1,943
Medium-term notes:
Floating-rate based on LIBOR indices due 2011 to 2012		583		1,017
Federal Home Loan Bank advances:
Floating-rate based on LIBOR indices due 2011 to 2014		2,000		2,500
Other notes:
6.0% - 6.4% fixed-rate notes due 2020		39		43
Total subsidiaries		4,571		5,503
Total medium- and long-term debt	$	5,206	$	6,138

The carrying value of medium- and long-term debt was adjusted to reflect the gain or loss attributable to the risk hedged with interest rate swaps.

All subordinated notes with maturities greater than one year qualify as Tier 2 capital.

Comerica Bank (the Bank), a subsidiary of the Corporation, is a member of the FHLB, which provides short- and long-term funding collateralized by mortgage-related assets to its members. FHLB advances bear interest at variable rates based on LIBOR and were secured by a blanket lien on $15 billion of real estate-related loans at June 30, 2011.

XML



Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2011

Employee Benefit Plans

Net Periodic Defined Benefit Cost

Qualified Defined Benefit Pension Plan	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2011			2010			2011			2010
Service cost	$	8		$	8		$	16		$	15
Interest cost		19			19			38			36
Expected return on plan assets		(29	)		(28	)		(58	)		(57	)
Amortization of unrecognized prior service cost		1			2			2			4
Amortization of unrecognized net loss		9			4			18			8
Net periodic benefit cost	$	8		$	5		$	16		$	6
Non-Qualified Defined Benefit Pension Plan	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2011			2010			2011			2010
Service cost	$	1		$	1		$	2		$	2
Interest cost		3			2			5			4
Amortization of unrecognized prior service cost		(1	)		(1	)		(1	)		(1	)
Amortization of unrecognized net loss		1			1			2			2
Net periodic benefit cost	$	4		$	3		$	8		$	7
Postretirement Benefit Plan	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2011			2010			2011			2010
Interest cost	$	1		$	1		$	2		$	2
Expected return on plan assets		(1	)		(1	)		(2	)		(2	)
Amortization of unrecognized transition obligation		1			1			2			2
Amortization of unrecognized net loss		1			1			1			1
Net periodic benefit cost	$	2		$	2		$	3		$	3

XML



Derivative and Credit-Related Financial Instruments

6 Months Ended

Jun. 30, 2011

Derivative and Credit-Related Financial Instruments

Derivative and Credit-Related Financial Instruments

NOTE 6 – DERIVATIVE AND CREDIT-RELATED FINANCIAL INSTRUMENTS

In the normal course of business, the Corporation enters into various transactions involving derivative and credit-related financial instruments to manage exposure to fluctuations in interest rate, foreign currency and other market risks and to meet the financing needs of customers. These financial instruments involve, to varying degrees, elements of market and credit risk. Derivatives are carried at fair value in the consolidated financial statements. Market and credit risk are included in the determination of fair value.

Market risk is the potential loss that may result from movements in interest rates, foreign currency exchange rates or energy commodity prices that cause an unfavorable change in the value of a financial instrument. The Corporation manages this risk by establishing monetary exposure limits and monitoring compliance with those limits. Market risk inherent in interest rate and energy contracts entered into on behalf of customers is mitigated by taking offsetting positions, except in those circumstances when the amount, tenor and/or contract rate level results in negligible economic risk, whereby the cost of purchasing an offsetting contract is not economically justifiable. The Corporation mitigates most of the inherent market risk in foreign exchange contracts entered into on behalf of customers by taking offsetting positions and manages the remainder through individual foreign currency position limits and aggregate value-at-risk limits. These limits are established annually and reviewed quarterly. Market risk inherent in derivative instruments held or issued for risk management purposes is typically offset by changes in the fair value of the assets or liabilities being hedged.

Credit risk is the possible loss that may occur in the event of nonperformance by the counterparty to a financial instrument. For customer-initiated derivatives, the Corporation attempts to minimize credit risk arising from financial instruments by evaluating the creditworthiness of each counterparty, adhering to the same credit approval process used for traditional lending activities and obtaining collateral as deemed necessary.

For derivatives with dealer counterparties, the Corporation utilizes both counterparty risk limits and monitoring procedures as well as master netting arrangements and bilateral collateral agreements to facilitate the management of credit risk. Master netting arrangements effectively reduce credit risk by permitting settlement, on a net basis, of contracts entered into with the same counterparty. Bilateral collateral agreements require daily exchange of cash or highly rated securities issued by the U.S. Treasury or other U.S. government agencies to collateralize amounts due to either party beyond certain risk limits. At June 30, 2011, counterparties had pledged marketable investment securities to secure approximately 85 percent of the fair value of contracts with bilateral collateral agreements in an unrealized gain position. For those counterparties not covered under bilateral collateral agreements, collateral is obtained, if deemed necessary, based on the results of management's credit evaluation of the counterparty. Collateral varies, but may include cash, investment securities, accounts receivable, equipment or real estate. Included in the fair value of derivative instruments are credit valuation adjustments reflecting counterparty credit risk. These adjustments are determined by applying a credit spread for the counterparty or the Corporation, as appropriate, to the total expected exposure of the derivative.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position on June 30, 2011 was $114 million, for which the Corporation had pledged collateral of $99 million in the normal course of business. The credit-risk-related contingent features require the Corporation's debt to maintain an investment grade credit rating from each of the major credit rating agencies. If the Corporation's debt were to fall below investment grade, the counterparties to the derivative instruments could require additional overnight collateral on derivative instruments in net liability positions. If the credit-risk-related contingent features underlying these agreements had been triggered on June 30, 2011, the Corporation would have been required to assign an additional $15 million of collateral to its counterparties.

Derivative Instruments

The following table presents the composition of the Corporation's derivative instruments held or issued for risk management purposes or in connection with customer-initiated and other activities at June 30, 2011 and December 31, 2010. The table excludes commitments, warrants accounted for as derivatives and a derivative related to the Corporation's 2008 sale of its remaining ownership of Visa shares.

	June 30, 2011						December 31, 2010
	Notional/ Contract Amount (b)		Fair Value (a)				Notional/ Contract Amount (b)		Fair Value (a)
			Asset Derivatives		Liability Derivatives				Asset Derivatives		Liability Derivatives
(in millions)
Risk management purposes
Derivatives designated as hedging instruments
Interest rate contracts:
Swaps - cash flow - receive fixed/pay floating	$	—	$	—	$	—	$	800	$	3	$	—
Swaps - fair value - receive fixed/pay floating		1,450		261		—		1,600		263		—
Total risk management interest rate swaps designated as hedging instruments		1,450		261		—		2,400		266		—
Derivatives used as economic hedges
Foreign exchange contracts:
Spot, forwards and swaps		386		2		1		220		2		—
Total risk management purposes	$	1,836	$	263	$	1	$	2,620	$	268	$	—
Customer-initiated and other activities
Interest rate contracts:
Caps and floors written	$	553	$	—	$	5	$	697	$	—	$	7
Caps and floors purchased		553		5		—		697		7		—
Swaps		9,231		247		218		9,126		269		242
Total interest rate contracts		10,337		252		223		10,520		276		249
Energy derivative contracts:
Caps and floors written		1,254		—		71		1,106		—		62
Caps and floors purchased		1,254		71		—		1,106		62		—
Swaps		413		29		29		411		41		41
Total energy derivative contracts		2,921		100		100		2,623		103		103
Foreign exchange contracts:
Spot, forwards, futures, options and swaps		2,621		45		39		2,497		49		48
Total customer-initiated and other activities	$	15,879	$	397	$	362	$	15,640	$	428	$	400
Total derivatives	$	17,715	$	660	$	363	$	18,260	$	696	$	400

(a) Asset derivatives are included in "accrued income and other assets" and liability derivatives are included in "accrued expenses and other liabilities" on the consolidated balance sheets. Included in the fair value of derivative assets and liabilities are credit valuation adjustments reflecting counterparty credit risk and credit risk of the Corporation. The fair value of derivative assets included credit valuation adjustments for counterparty credit risk totaling $4 million and $5 million at June 30, 2011 and December 31, 2010, respectively.

(b) Notional or contract amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets.

Risk Management

As an end-user, the Corporation employs a variety of financial instruments for risk management purposes, including cash instruments, such as investment securities, as well as derivative instruments. Activity related to these instruments is centered predominantly in the interest rate markets and mainly involves interest rate swaps. Various other types of instruments also may be used to manage exposures to market risks, including interest rate caps and floors, total return swaps, foreign exchange forward contracts and foreign exchange swap agreements.

As part of a fair value hedging strategy, the Corporation entered into interest rate swap agreements for interest rate risk management purposes. These interest rate swap agreements effectively modify the Corporation's exposure to interest rate risk by converting fixed-rate debt to a floating rate. These agreements involve the receipt of fixed-rate interest amounts in exchange for floating-rate interest payments over the life of the agreement, without an exchange of the underlying principal amount.

Risk management fair value interest rate swaps generated net interest income of $18 million and $36 million for the three- and six-month periods ended June 30, 2011, respectively, compared to net interest income of $20 million and $39 million for the three- and six-month periods ended June 30, 2010, respectively.

The net gains (losses) recognized in other noninterest income (i.e., the ineffective portion) in the consolidated statements of income on risk management derivatives designated as fair value hedges of fixed-rate debt was as follows.

	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)	2011		2010			2011		2010
Interest rate swaps	$	—	$	(1	)	$	1	$	(2	)

As part of a cash flow hedging strategy, the Corporation had entered into interest rate swap agreements that effectively converted a portion of existing and forecasted floating-rate loans to a fixed-rate basis, thus reducing the impact of interest rate changes on future interest income over the life of the agreements. In the first quarter 2011, the remaining $800 million notional amount of interest rate swap agreements outstanding at December 31, 2010 matured. As of June 30, 2011 the Corporation had no interest rate swap agreements designated as cash flow hedges of loans outstanding.

The net gains (losses) recognized in income and OCI on risk management derivatives designated as cash flow hedges of loans for the three- and six-month periods ended June 30, 2011 and 2010 are displayed in the table below.

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2011		2010		2011			2010
Interest rate swaps
Gain (loss) recognized in OCI (effective portion)	$	—	$	1	$	(2	)	$	7
Gain (loss) recognized in other noninterest income (ineffective portion)		—		—		1			(3	)
Gain reclassified from accumulated OCI into interest and fees on loans (effective portion)		—		9		1			17

Foreign exchange rate risk arises from changes in the value of certain assets and liabilities denominated in foreign currencies. The Corporation employs spot and forward contracts in addition to swap contracts to manage exposure to these and other risks.

The Corporation recognized an insignificant amount of net gains (losses) on risk management derivative instruments used as economic hedges in other noninterest income in the consolidated statements of income in the three- and six-month periods ended June 30, 2011 and 2010.

The following table summarizes the expected weighted average remaining maturity of the notional amount of risk management interest rate swaps and the weighted average interest rates associated with amounts expected to be received or paid on interest rate swap agreements as of June 30, 2011 and December 31, 2010.

			Weighted Average
(dollar amounts in millions)	Notional Amount		Remaining Maturity (in years)		Receive Rate			Pay Rate (a)
June 30, 2011
Swaps - fair value - receive fixed/pay floating rate
Medium- and long-term debt designation	$	1,450		5.9		5.45	%		0.45	%
Total risk management interest rate swaps	$	1,450
December 31, 2010
Swaps - cash flow - receive fixed/pay floating rate
Variable rate loan designation	$	800		0.1		4.75	%		3.25	%
Swaps - fair value - receive fixed/pay floating rate
Medium- and long-term debt designation		1,600		7.1		5.73			0.85
Total risk management interest rate swaps	$	2,400

(a) Variable rates paid on receive fixed swaps are based on prime and six-month LIBOR rates in effect at June 30, 2011 and December 31, 2010.

Management believes these hedging strategies achieve the desired relationship between the rate maturities of assets and funding sources which, in turn, reduce the overall exposure of net interest income to interest rate risk, although there can be no assurance that such strategies will be successful.

Customer-Initiated and Other

Fee income is earned from entering into various transactions at the request of customers (customer-initiated contracts), principally foreign exchange contracts, interest rate contracts and energy derivative contracts. For customer-initiated foreign exchange contracts, the Corporation mitigates most of the inherent market risk by taking offsetting positions and manages the remainder through individual foreign currency position limits and aggregate value-at-risk limits. These limits are established annually and reviewed quarterly.

For those customer-initiated derivative contracts which were not offset or where the Corporation holds a speculative position within the limits described above, the Corporation recognized an insignificant amount of net gains in "other noninterest income" in the consolidated statements of income in both the three-month periods ended June 30, 2011 and 2010, and an insignificant amount and $1 million of net gains in the six-month periods ended June 30, 2011 and 2010, respectively.

Fair values of customer-initiated and other derivative instruments represent the net unrealized gains or losses on such contracts and are recorded in the consolidated balance sheets. Changes in fair value are recognized in the consolidated statements of income. The net gains recognized in income on customer-initiated derivative instruments, net of the impact of offsetting positions, were as follows.

		Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	Location of Gain	2011		2010		2011		2010
Interest rate contracts	Other noninterest income	$	2	$	4	$	8	$	7
Energy derivative contracts	Other noninterest income		1		1		1		1
Foreign exchange contracts	Foreign exchange income		9		10		17		19
Total		$	12	$	15	$	26	$	27

Additional information regarding the nature, terms and associated risks of derivative instruments can be found in the Corporation's 2010 Annual Report on page 55 and in Notes 1 and 9 to the consolidated financial statements.

Credit-Related Financial Instruments

The Corporation issues off-balance sheet financial instruments in connection with commercial and consumer lending activities. The Corporation's credit risk associated with these instruments is represented by the contractual amounts indicated in the following table.

(in millions)	June 30, 2011		December 31, 2010
Unused commitments to extend credit:
Commercial and other	$	23,612	$	23,578
Bankcard, revolving check credit and home equity loan commitments		1,565		1,568
Total unused commitments to extend credit	$	25,177	$	25,146
Standby letters of credit	$	5,282	$	5,453
Commercial letters of credit		132		93
Other credit-related financial instruments		1		1

The Corporation maintains an allowance to cover probable credit losses inherent in lending-related commitments, including unused commitments to extend credit, letters of credit and financial guarantees. At June 30, 2011 and December 31, 2010, the allowance for credit losses on lending-related commitments, included in "accrued expenses and other liabilities" on the consolidated balance sheets, was $30 million and $35 million, respectively.

Unused Commitments to Extend Credit

Commitments to extend credit are legally binding agreements to lend to a customer, provided there is no violation of any condition established in the contract. These commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many commitments expire without being drawn upon, the total contractual amount of commitments does not necessarily represent future cash requirements of the Corporation. Commercial and other unused commitments are primarily variable rate commitments. The allowance for credit losses on lending-related commitments included $13 million and $16 million, at June 30, 2011 and December 31, 2010, respectively, for probable credit losses inherent in the Corporation's unused commitments to extend credit.

At June 30, 2011 and December 31, 2010, commitments to lend additional funds to borrowers whose terms have been modified in troubled debt restructurings totaled $10 million and $7 million, respectively.

Standby and Commercial Letters of Credit

Standby letters of credit represent conditional obligations of the Corporation which guarantee the performance of a customer to a third party. Standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. Commercial letters of credit are issued to finance foreign or domestic trade transactions. These contracts expire in decreasing amounts through the year 2019. The Corporation may enter into participation arrangements with third parties that effectively reduce the maximum amount of future payments which may be required under standby and commercial letters of credit. These risk participations covered $257 million and $298 million of the $5.4 billion and $5.5 billion standby and commercial letters of credit outstanding at June 30, 2011 and December 31, 2010, respectively.

The carrying value of the Corporation's standby and commercial letters of credit, included in "accrued expenses and other liabilities" on the consolidated balance sheet, totaled $80 million at June 30, 2011, including $63 million of deferred fees and $17 million in the allowance for credit losses on lending-related commitments. At December 31, 2010, the comparable amounts were $83 million, $64 million and $19 million, respectively.

The following table presents a summary of internally classified watch list standby and commercial letters of credit at June 30, 2011 and December 31, 2010. The Corporation's internal watch list is generally consistent with loans in the Special Mention, Substandard and Doubtful (nonaccrual) categories defined by regulatory authorities. The Corporation manages credit risk through underwriting, periodically reviewing and approving its credit exposures using Board committee approved credit policies and guidelines.

(dollar amounts in millions)	June 30, 2011			December 31, 2010
Total watch list standby and commercial letters of credit	$	233		$	243
As a percentage of total outstanding standby and commercial letters of credit		4.3	%		4.4	%

Other credit-related financial instruments

The Corporation enters into credit risk participation agreements, under which the Corporation assumes credit exposure associated with a borrower's performance related to certain interest rate derivative contracts. The Corporation is not a party to the interest rate derivative contracts and only enters into these credit risk participation agreements in instances in which the Corporation is also a party to the related loan participation agreement for such borrowers. The Corporation manages its credit risk on the credit risk participation agreements by monitoring the creditworthiness of the borrowers, which is based on the normal credit review process had it entered into the derivative instruments directly with the borrower. The notional amount of such credit risk participation agreement reflects the pro-rata share of the derivative instrument, consistent with its share of the related participated loan. As of June 30, 2011 and December 31, 2010, the total notional amount of the credit risk participation agreements was approximately $305 million and $316 million, respectively, and the fair value, included in customer-initiated interest rate contracts recorded in "accrued expenses and other liabilities" on the consolidated balance sheets, was insignificant for each period. The maximum estimated exposure to these agreements, as measured by projecting a maximum value of the guaranteed derivative instruments, assuming 100 percent default by all obligors on the maximum values, was approximately $12 million at both June 30, 2011 and December 31, 2010. In the event of default, the lead bank has the ability to liquidate the assets of the borrower, in which case the lead bank would be required to return a percentage of the recouped assets to the participating banks. As of June 30, 2011, the credit risk participation agreements had a weighted average remaining maturity for outstanding agreements of 2.5 years.

In 2008, the Corporation sold its remaining ownership of Visa Class B shares and entered into a derivative contract. Under the terms of the derivative contract, the Corporation will compensate the counterparty primarily for dilutive adjustments made to the conversion factor of the Visa Class B shares to Class A shares based on the ultimate outcome of litigation involving Visa. Conversely, the Corporation will be compensated by the counterparty for any increase in the conversion factor from anti-dilutive adjustments. The notional amount of the derivative contract was equivalent to approximately 780 thousand Visa Class B shares. The fair value of the derivative liability, included in "accrued expenses and other liabilities" on the consolidated balance sheets, was $1 million at both June 30, 2011 and December 31, 2010.

XML



Credit Quality and Allowance for Credit Losses (Changes in the Allowance for Loan Losses and Related Loan Amounts) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Balance at beginning of period	$ 849	$ 987	$ 901	$ 985
Loan charge-offs	(125)	(158)	(248)	(342)
Recoveries on loans previously charged-off	35	12	57	23
Net loan charge-offs	(90)	(146)	(191)	(319)
Provision for loan losses	47	126	96	301
Balance at end of period	806	967	806	967
Allowance for loan losses individually evaluated for impairment	176	205	176	205
Allowance for loan losses collectively evaluated for impairment	630	762	630	762
Total allowance for loan losses	806	967	806	967
Loans individually evaluated for impairment	857	956	857	956
Loans collectively evaluated for impairment	38,336	39,646	38,336	39,646
Total loans	39,193	40,602	39,193	40,602	40,236
Business Loans [Member]
Balance at beginning of period	786		839
Loan charge-offs	(109)		(222)
Recoveries on loans previously charged-off	33		54
Net loan charge-offs	(76)		(168)
Provision for loan losses	28		67
Balance at end of period	738		738
Allowance for loan losses individually evaluated for impairment	172		172
Allowance for loan losses collectively evaluated for impairment	566		566
Total allowance for loan losses	738		738
Loans individually evaluated for impairment	808		808
Loans collectively evaluated for impairment	34,662		34,662
Total loans	35,470		35,470		36,306
Retail Loans [Member]
Balance at beginning of period	63		62
Loan charge-offs	(16)		(26)
Recoveries on loans previously charged-off	2		3
Net loan charge-offs	(14)		(23)
Provision for loan losses	19		29
Balance at end of period	68		68
Allowance for loan losses individually evaluated for impairment	4		4
Allowance for loan losses collectively evaluated for impairment	64		64
Total allowance for loan losses	68		68
Loans individually evaluated for impairment	49		49
Loans collectively evaluated for impairment	3,674		3,674
Total loans	$ 3,723		$ 3,723		$ 3,930

XML



Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Consolidated Statements of Changes in Shareholders' Equity
Cash dividends declared on common stock, per share	$ 0.10	$ 0.05	$ 0.20	$ 0.10

XML



Acquisition

6 Months Ended

Jun. 30, 2011

Acquisition

Acquisition

NOTE 2 –ACQUISITION

On July 28, 2011 (the "acquisition date"), the Corporation acquired all the outstanding common stock of Sterling Bancshares, Inc. ("Sterling"), a bank holding company headquartered in Houston, Texas, in a stock-for-stock transaction. Sterling common shareholders and holders of outstanding Sterling phantom stock units received 0.2365 shares of the Corporation's common stock in exchange for each share of Sterling common stock or phantom stock unit. As a result, the Corporation issued approximately 24 million common shares, subject to payment of cash in lieu of fractional shares, with an acquisition date fair value of $793 million, based on the Corporation's closing stock price of $32.67 on July 27, 2011. Based on the merger agreement, outstanding and unexercised options to purchase Sterling common stock were converted into fully vested options to purchase common stock of the Corporation. In addition, outstanding warrants to purchase Sterling common stock were converted into warrants to purchase common stock of the Corporation. The fair value of total consideration paid to acquire Sterling was approximately $803 million. The Corporation incurred $5 million of pre-integration and transaction costs prior to the acquisition closing date that are included in "merger and restructuring charges" in the consolidated statements of income. However, the assets acquired and liabilities assumed from Sterling, the consideration paid to acquire Sterling, and the results of Sterling's operations are not reflected in consolidated financial statements as of and for the three- and six-month periods ended June 30, 2011. The acquisition of Sterling significantly expands the Corporation's presence in Texas, particularly in the Houston and San Antonio areas, and gives the Corporation the ability to leverage additional marketing capacity to offer a wide array of products through a larger distribution network, particularly to middle market and small business companies.

The assets and liabilities of Sterling were recorded on the consolidated balance sheets at estimated fair value as of the acquisition date. The initial accounting for the acquisition was incomplete at the time these financial statements were issued. The following purchase price allocation is preliminary and may change as additional information becomes available and additional analyses are completed. Preliminary initial goodwill of $469 million was recorded after adjusting for the preliminary fair value of net identifiable assets acquired.

(in millions)	Initial Allocation
Fair value of consideration paid:
Common stock issued (a)	$	793
Warrants issued		7
Stock options issued		3
Cash in lieu of fractional shares (a)
Total consideration paid		803
Fair value of identifiable assets acquired:
Cash and cash equivalents		730
Investment securities available-for-sale		1,527
Total loans		2,109
Premises and equipment		35
Core deposit intangible		41
Accrued income and other assets		288
Total identifiable assets acquired		4,730
Fair value of liabilities assumed:
Deposits		4,076
Short-term borrowings		20
Medium- and long-term debt		262
Accrued expenses and other liabilities		38
Total liabilities assumed		4,396
Fair value of net identifiable assets acquired		334
Goodwill resulting from acquistion	$	469

(a) Due to the limited time since the acquisition date, the number of shares of common stock issued and the amount of cash paid in lieu of fractional shares has yet to be determined. The fair value of common stock issued includes the fair value of any potential fractional shares.

The goodwill resulting from the acquisition represents the inherent long-term value expected from the business opportunities created from combining Sterling with the Corporation. None of the goodwill recognized will be deductible for income tax purposes. Due to the limited time since the acquisition date, the allocation of the preliminary goodwill attributable to the acquisition of Sterling to the Corporation's business segments was incomplete at the time these financial statements were issued. Additionally, the pro forma revenues and net income of the combined entity are yet to be determined. This information will be included in the Corporation's Form 10-Q for the period ending September 30, 2011.

The core deposit intangible will be amortized on an accelerated basis over the estimated life, currently expected to be approximately 10 years.

In conjunction with the Sterling acquisition, the acquired impaired loan portfolio was accounted for at preliminary fair value as follows.

(In millions)	Impaired Loans
Contractually required principal and interest	$	322
Contractual cash flows not expected to be collected (nonaccretable difference)		165
Expected cash flows		157
Interest component of expected cash flows (accretable yield)		26
Estimated fair value at acquisition	$	131

Information regarding acquired loans not deemed impaired at acquisition was as follows.

(In millions)	Nonimpaired Loans
Contractually required principal and interest	$	2,468
Contractual cash flows not expected to be collected		206
Estimated fair value at acquisition		1,978

Loans acquired in the Sterling acquisition were initially recorded at fair value with no separate allowance for loan losses. The Corporation reviewed the loans at acquisition to determine which loans should be considered purchased impaired loans and aggregated the impaired loans into pools of loans based on common risk characteristics. The Corporation defined impaired loans as those that were either not accruing interest or exhibited credit risk factors consistent with nonperforming loans at the acquisition date.

The Corporation estimated the total cash flows expected to be collected from the pools of loans, which includes undiscounted expected principal and interest. The excess of the total cash flows expected to be collected over the fair value of the related loans represents the accretable yield, which is recognized as interest income on a level-yield basis over the life of the related loans. The difference between the undiscounted contractual principal and interest and the total cash flows expected to be collected is the nonaccretable difference, which reflects the impact of estimated credit losses and other factors. Subsequent decreases in the expected cash flows will require the Corporation to evaluate the need for additions to the allowance for loan losses. Subsequent improvements in expected cash flows will result in the recognition of additional interest income over the then remaining lives of the loan pools.

For acquired loans not deemed impaired at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans. Subsequent to the acquisition date, methods utilized to estimate the required allowance for loan losses for these loans is similar to originated loans; however, a provision for loan losses will be recorded only to the extent the required allowance exceeds any remaining credit discounts.

XML



Fair Value Measurements (Assets and Liabilities Recorded at Fair Value on a Recurring Basis) (Details) (USD $) In Millions	Jun. 30, 2011		Dec. 31, 2010		Jun. 30, 2010
Trading securities	$ 104		$ 118
Investment securities available-for-sale	7,537		7,560		7,188
Derivative assets	668		703
Total assets at fair value	8,309		8,381
Derivative liabilities	364		401
Deferred compensation plan liabilities	90		86
Total liabilities at fair value	454		487
Interest Rate Contracts [Member]
Derivative assets	513		542
Derivative liabilities	223		249
Interest Rate Contracts [Member] | Level 2 [Member]
Derivative assets	513		542
Derivative liabilities	223		249
Energy Derivative Contracts [Member]
Derivative assets	100		103
Derivative liabilities	100		103
Energy Derivative Contracts [Member] | Level 2 [Member]
Derivative assets	100		103
Derivative liabilities	100		103
Foreign Exchange Contracts [Member]
Derivative assets	47		51
Derivative liabilities	40		48
Foreign Exchange Contracts [Member] | Level 2 [Member]
Derivative assets	47		51
Derivative liabilities	40		48
Warrants [Member]
Derivative assets	8		7
Warrants [Member] | Level 3 [Member]
Derivative assets	8		7
Other Derivative Liabilities [Member]
Derivative liabilities	1		1
Other Derivative Liabilities [Member] | Level 3 [Member]
Derivative liabilities	1		1
Corporate Debt Securities [Member] | Auction-Rate Debt Securities [Member]
Investment securities available-for-sale	1		1
Corporate Debt Securities [Member] | Auction-Rate Debt Securities [Member] | Level 3 [Member]
Investment securities available-for-sale	1		1
Corporate Debt Securities [Member] | Other Corporate Debt Securities [Member]
Investment securities available-for-sale	49		26
Corporate Debt Securities [Member] | Other Corporate Debt Securities [Member] | Level 2 [Member]
Investment securities available-for-sale	48		25
Corporate Debt Securities [Member] | Other Corporate Debt Securities [Member] | Level 3 [Member]
Investment securities available-for-sale	1		1
Corporate Debt Securities [Member]
Trading securities	1		4
Corporate Debt Securities [Member] | Level 2 [Member]
Trading securities	1		4
Equity and Other Non-Debt Securities [Member] | Auction-Rate Preferred Securities [Member]
Investment securities available-for-sale	437		570
Equity and Other Non-Debt Securities [Member] | Auction-Rate Preferred Securities [Member] | Level 3 [Member]
Investment securities available-for-sale	437		570
Equity and Other Non-Debt Securities [Member] | Money Market and Other Mutual Funds [Member]
Investment securities available-for-sale	105		84
Equity and Other Non-Debt Securities [Member] | Money Market and Other Mutual Funds [Member] | Level 1 [Member]
Investment securities available-for-sale	105		84
U.S. Treasury and Other U.S. Government Agency Securities [Member]
Investment securities available-for-sale	20		131
U.S. Treasury and Other U.S. Government Agency Securities [Member] | Level 1 [Member]
Investment securities available-for-sale	20		131
State And Municipal Securities [Member]
Investment securities available-for-sale	26	[1]	39	[1]
State And Municipal Securities [Member] | Level 3 [Member]
Investment securities available-for-sale	26	[1]	39	[1]
State And Municipal Securities [Member]
Trading securities	8		19
Investment securities available-for-sale	26		39
State And Municipal Securities [Member] | Level 2 [Member]
Trading securities	6		19
State And Municipal Securities [Member] | Level 3 [Member]
Trading securities	2
Deferred Compensation Plan Assets [Member]
Trading securities	90		86
Deferred Compensation Plan Assets [Member] | Level 1 [Member]
Trading securities	90		86
Residential Mortgage-Backed Securities [Member] | Level 2 [Member]
Trading securities	5	[2]	7	[2]
Investment securities available-for-sale	6,899	[2]	6,709	[2]
Residential Mortgage-Backed Securities [Member]
Trading securities	5	[2]	7	[2]
Investment securities available-for-sale	6,899	[2]	6,709	[2]
Other Government-Sponsored Enterprise Securities [Member]
Trading securities			1
Other Government-Sponsored Enterprise Securities [Member] | Level 2 [Member]
Trading securities			1
Other Securities [Member]
Trading securities			1
Other Securities [Member] | Level 3 [Member]
Trading securities			1
Level 1 [Member]
Trading securities	90		86
Investment securities available-for-sale	125		215
Total assets at fair value	215		301
Deferred compensation plan liabilities	90		86
Total liabilities at fair value	90		86
Level 2 [Member]
Trading securities	12		31
Investment securities available-for-sale	6,947		6,734
Derivative assets	660		696
Total assets at fair value	7,619		7,461
Derivative liabilities	363		400
Total liabilities at fair value	363		400
Level 3 [Member]
Trading securities	2		1
Investment securities available-for-sale	465		611
Derivative assets	8		7
Total assets at fair value	475		619
Derivative liabilities	1		1
Total liabilities at fair value	$ 1		$ 1

[1] Primarily auction-rate securities.

[2] Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

XML



Net Income (Loss) per Common Share (Tables)

6 Months Ended

Jun. 30, 2011

Net Income (Loss) per Common Share

Basic and Diluted Income (Loss) from Continuing Operations per Common Share

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share data)	2011		2010		2011		2010
Basic and diluted
Income from continuing operations	$	96	$	70	$	199	$	105
Less:
Preferred stock dividends		—		—		—		29
Redemption discount accretion on preferred stock		—		—		—		94
Income allocated to participating securities		1		1		2		—
Income (loss) from continuing operations attributable to common shares	$	95	$	69	$	197	$	(18	)
Net income	$	96	$	70	$	199	$	122
Less:
Preferred stock dividends		—		—		—		29
Redemption discount accretion on preferred stock		—		—		—		94
Income allocated to participating securities		1		1		2		—
Net income (loss) attributable to common shares	$	95	$	69	$	197	$	(1	)
Basic average common shares		175		175		175		165
Basic income (loss) from continuing operations per common share	$	0.54	$	0.40	$	1.12	$	(0.11	)
Basic net income (loss) per common share	$	0.54	$	0.40	$	1.12	$	(0.01	)
Basic average common shares		175		175		175		165
Dilutive common stock equivalents:
Net effect of the assumed exercise of stock options		—		—		—		—
Net effect of the assumed exercise of warrants		3		3		3		—
Diluted average common shares		178		178		178		165
Diluted income (loss) from continuing operations per common share	$	0.53	$	0.39	$	1.10	$	(0.11	)
Diluted net income (loss) per common share	$	0.53	$	0.39	$	1.10	$	(0.01	)

Average Shares Excluded from Diluted Net Income (Loss) per Share Computations due to Exercise Price Higher than Market Price

	Three Months Ended June  30,				Six Months Ended June  30,
(shares in millions)	2011		2010		2011		2010
Average shares related to outstanding options		16.8		13.9		16.2		14.4
Range of exercise prices	$	36.24 - $64.50	$	40.32 - $64.50	$	36.24 - $64.50	$	39.19 - $64.50

XML



Derivative and Credit-Related Financial Instruments (Narrative) (Details) (USD $) Share data in Thousands, unless otherwise specified	3 Months Ended			6 Months Ended
	Jun. 30, 2011	Mar. 31, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Derivative and Credit-Related Financial Instruments
Percentage of derivative contracts in an unrealized gain position with bilateral collateral agreements secured by marketable investment securities	85.00%			85.00%
Aggregate fair value of all derivative instruments with credit-risk contingent features that were in a liability position	$ 114,000,000			$ 114,000,000
Collateral pledged for aggregate fair value of all derivative instruments with credit-risk contingent features that were in a liability position	99,000,000			99,000,000
Additional required overnight collateral on derivatives with credit-risk contingent features at period end should the credit-risk contingent features be triggered	15,000,000			15,000,000
Net interest income generated by risk management fair value interest rate swaps	18,000,000		20,000,000	36,000,000	39,000,000
Notional amount of interest rate swap agreements under a cash flow hedging strategy that matured during the period		800,000,000
Net gains recognized in other noninterest income for customer-initiated foreign exchange contracts not offset by the Corporation				1,000,000	1,000,000
Allowance for credit losses on lending-related commitments	30,000,000			30,000,000		35,000,000
Carrying value of unused commitments to extend credit	13,000,000			13,000,000		16,000,000
Commitments to lend additional funds in connection with troubled debt restructurings	10,000,000			10,000,000		7,000,000
Latest year of contract expiration on standby and commercial letters of credit	2019			2019
Risk participation agreements covering standby and commercial letters of credit	257,000,000			257,000,000		298,000,000
Standby and Commercial letters of credit	5,400,000,000			5,400,000,000		5,500,000,000
Carrying value of standby and commercial letters of credit, included in accrued expenses and other liabilities	80,000,000			80,000,000		83,000,000
Carrying value of standby and commercial letters of credit included in deferred fees	63,000,000			63,000,000		64,000,000
Carrying value of standby and commercial letters of credit in the allowance for credit losses on lending-related commitments	17,000,000			17,000,000		19,000,000
Total notional amount of the credit risk participation agreements	305,000,000			305,000,000		316,000,000
Maximum estimated exposure to credit risk participation agreements	12,000,000			12,000,000		12,000,000
Weighted average remaining maturity of credit risk participation agreements, in years	2.5			2.5
Notional amount of derivative contract in Visa Class B shares	780			780
Fair value of Visa Class B derivative contract	$ 1,000,000			$ 1,000,000		$ 1,000,000

XML



Derivative and Credit-Related Financial Instruments (Net Gains (Losses) Recognized in Other Noninterest Income-Risk Management Derivatives-Fair Value Hedges) (Details) (USD $) In Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Derivative and Credit-Related Financial Instruments
Interest rate swaps	$ (1)	$ 1	$ (2)

XML



Credit Quality and Allowance for Credit Losses (Aging Analysis of Loans) (Details) (USD $) In Millions	Jun. 30, 2011		Dec. 31, 2010		Jun. 30, 2010
30-59 days past due, still accruing	$ 289		$ 198
60-89 days past due, still accruing	54		83
90 days or more past due, still accruing	64		62
Total past due loans, still accruing	407		343
Nonaccrual loans	941		1,080
Current loans	37,845		38,813
Total loans	39,193		40,236		40,602
Business Loans [Member]
30-59 days past due, still accruing	258		150
60-89 days past due, still accruing	44		54
90 days or more past due, still accruing	38		41
Total past due loans, still accruing	340		245
Nonaccrual loans	868		1,007
Current loans	34,262		35,054
Total loans	35,470		36,306
Business Loans [Member] | Commercial Loans [Member]
30-59 days past due, still accruing	131		84
60-89 days past due, still accruing	20		28
90 days or more past due, still accruing	11		3
Total past due loans, still accruing	162		115
Nonaccrual loans	261		252
Current loans	21,629		21,778
Total loans	22,052		22,145
Business Loans [Member] | Real Estate Construction [Member]
30-59 days past due, still accruing	25		29
60-89 days past due, still accruing	1
90 days or more past due, still accruing	2		22
Total past due loans, still accruing	28		51
Nonaccrual loans	139		263
Current loans	1,561		1,939
Total loans	1,728		2,253
Business Loans [Member] | Real Estate Construction [Member] | Commercial Real Estate Business Line [Member]
30-59 days past due, still accruing	15	[1]	27	[1]
60-89 days past due, still accruing	1	[1]
90 days or more past due, still accruing	2	[1]	17	[1]
Total past due loans, still accruing	18	[1]	44	[1]
Nonaccrual loans	137	[1]	259	[1]
Current loans	1,188	[1]	1,523	[1]
Total loans	1,343	[1]	1,826	[1]
Business Loans [Member] | Real Estate Construction [Member] | Other Business Lines [Member]
30-59 days past due, still accruing	10	[2]	2	[2]
90 days or more past due, still accruing			5	[2]
Total past due loans, still accruing	10	[2]	7	[2]
Nonaccrual loans	2	[2]	4	[2]
Current loans	373	[2]	416	[2]
Total loans	385	[2]	427	[2]
Business Loans [Member] | Commercial Mortgage [Member]
30-59 days past due, still accruing	102		36
60-89 days past due, still accruing	23		26
90 days or more past due, still accruing	25		16
Total past due loans, still accruing	150		78
Nonaccrual loans	455		483
Current loans	8,974		9,206
Total loans	9,579		9,767
Business Loans [Member] | Commercial Mortgage [Member] | Commercial Real Estate Business Line [Member]
30-59 days past due, still accruing	31	[1]	8	[1]
60-89 days past due, still accruing	13	[1]	1	[1]
90 days or more past due, still accruing	7	[1]
Total past due loans, still accruing	51	[1]	9	[1]
Nonaccrual loans	186	[1]	181	[1]
Current loans	1,693	[1]	1,747	[1]
Total loans	1,930	[1]	1,937	[1]
Business Loans [Member] | Commercial Mortgage [Member] | Other Business Lines [Member]
30-59 days past due, still accruing	71	[2]	28	[2]
60-89 days past due, still accruing	10	[2]	25	[2]
90 days or more past due, still accruing	18	[2]	16	[2]
Total past due loans, still accruing	99	[2]	69	[2]
Nonaccrual loans	269	[2]	302	[2]
Current loans	7,281	[2]	7,459	[2]
Total loans	7,649	[2]	7,830	[2]
Business Loans [Member] | Lease Financing Loan [Member]
Nonaccrual loans	6		7
Current loans	943		1,002
Total loans	949		1,009
Business Loans [Member] | International Loan [Member]
30-59 days past due, still accruing			1
Total past due loans, still accruing			1
Nonaccrual loans	7		2
Current loans	1,155		1,129
Total loans	1,162		1,132
Retail Loans [Member]
30-59 days past due, still accruing	31		48
60-89 days past due, still accruing	10		29
90 days or more past due, still accruing	26		21
Total past due loans, still accruing	67		98
Nonaccrual loans	73		73
Current loans	3,583		3,759
Total loans	3,723		3,930
Retail Loans [Member] | Residential Mortgage Loan [Member]
30-59 days past due, still accruing	16		33
60-89 days past due, still accruing	4		23
90 days or more past due, still accruing	15		7
Total past due loans, still accruing	35		63
Nonaccrual loans	60		55
Current loans	1,396		1,501
Total loans	1,491		1,619
Retail Loans [Member] | Consumer Loans [Member]
30-59 days past due, still accruing	15		15
60-89 days past due, still accruing	6		6
90 days or more past due, still accruing	11		14
Total past due loans, still accruing	32		35
Nonaccrual loans	13		18
Current loans	2,187		2,258
Total loans	2,232		2,311
Retail Loans [Member] | Consumer Loans [Member] | Home Equity [Member]
30-59 days past due, still accruing	10		11
60-89 days past due, still accruing	5		4
90 days or more past due, still accruing	6		10
Total past due loans, still accruing	21		25
Nonaccrual loans	4		5
Current loans	1,597		1,674
Total loans	1,622		1,704
Retail Loans [Member] | Consumer Loans [Member] | Other Consumer [Member]
30-59 days past due, still accruing	5		4
60-89 days past due, still accruing	1		2
90 days or more past due, still accruing	5		4
Total past due loans, still accruing	11		10
Nonaccrual loans	9		13
Current loans	590		584
Total loans	$ 610		$ 607

[1] Primarily loans to real estate investors and developers.

[2] Primarily loans secured by owner-occupied real estate.

XML



Derivative and Credit-Related Financial Instruments (Schedule of Financial Instruments with Off-Balance Sheet Credit Risk) (Details) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Commercial and Other [Member] | Unused Commitments to Extend Credit [Member]
Loss contingency, range of possible loss, maximum	$ 23,612	$ 23,578
Bankcard, Revolving Check Credit and Home Equity Loan Commitments [Member] | Unused Commitments to Extend Credit [Member]
Loss contingency, range of possible loss, maximum	1,565	1,568
Standby Letters of Credit [Member]
Loss contingency, range of possible loss, maximum	5,282	5,453
Commercial Letters of Credit [Member]
Loss contingency, range of possible loss, maximum	132	93
Other Credit-Related Financial Instruments [Member]
Loss contingency, estimate of possible loss	1	1
Unused Commitments to Extend Credit [Member]
Loss contingency, range of possible loss, maximum	$ 25,177	$ 25,146

XML



Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

Fair Value Measurements

NOTE 3 – FAIR VALUE MEASUREMENTS

The Corporation utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, the Corporation uses present value techniques and other valuation methods to estimate the fair values of its financial instruments. These valuation methods require considerable judgment and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used.

Fair value is an estimate of the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (i.e., not a forced transaction, such as a liquidation or distressed sale) between market participants at the measurement date. However, the calculated fair value estimates in many instances cannot be substantiated by comparison to independent markets and, in many cases, may not be realizable in a current sale of the financial instrument.

Trading securities, investment securities available-for-sale, derivatives and deferred compensation plan liabilities are recorded at fair value on a recurring basis. Additionally, from time to time, the Corporation may be required to record other assets and liabilities at fair value on a nonrecurring basis, such as impaired loans, other real estate (primarily foreclosed property), nonmarketable equity securities and certain other assets and liabilities. These nonrecurring fair value adjustments typically involve write-downs of individual assets or application of lower of cost or fair value accounting.

The Corporation categorizes assets and liabilities recorded at fair value into a three-level hierarchy, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1	Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2	Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3	Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

Following is a description of the valuation methodologies and key inputs used to measure financial assets and liabilities recorded at fair value, as well as a description of the methods and significant assumptions used to estimate fair value disclosures for financial instruments not recorded at fair value in their entirety on a recurring basis. For financial assets and liabilities recorded at fair value, the description includes the level of the fair value hierarchy in which the assets or liabilities are classified. Transfers of assets or liabilities between levels of the fair value hierarchy are recognized at the beginning of the reporting period, when applicable.

Cash and due from banks, federal funds sold and securities purchased under agreements to resell, and interest-bearing deposits with banks

Due to the short-term nature, the carrying amount of these instruments approximates the estimated fair value.

Trading securities and associated deferred compensation plan liabilities

Securities held for trading purposes and associated deferred compensation plan liabilities are recorded at fair value and included in "other short-term investments" and "accrued expenses and other liabilities," respectively, on the consolidated balance sheets. Level 1 securities held for trading purposes include assets related to employee deferred compensation plans, which are invested in mutual funds, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and other securities traded on an active exchange, such as the New York Stock Exchange. Deferred compensation plan liabilities represent the fair value of the obligation to the employee, which corresponds to the fair value of the invested assets. Level 2 trading securities include municipal bonds and mortgage-backed securities issued by U.S. government-sponsored entities and corporate debt securities. Securities classified as Level 3 include securities in less liquid markets and securities not rated by a credit agency. The methods used to value trading securities are the same as the methods used to value investment securities available-for-sale, discussed below.

Loans held-for-sale

Loans held-for-sale, included in "other short-term investments" on the consolidated balance sheets, are recorded at the lower of cost or fair value. The fair value of loans held-for-sale is based on what secondary markets are currently offering for portfolios with similar characteristics. As such, the Corporation classifies loans held-for-sale subjected to nonrecurring fair value adjustments as Level 2.

Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available or the market is deemed to be inactive at the measurement date, an adjustment to the quoted prices may be necessary. In some circumstances, the Corporation may conclude that a change in valuation technique or the use of multiple valuation techniques may be appropriate to estimate an instrument's fair value. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include residential mortgage-backed securities issued by U.S. government-sponsored enterprises, corporate debt securities and state and municipal securities. The fair value of Level 2 securities was determined using quoted prices of securities with similar characteristics or pricing models based on observable market data inputs, primarily interest rates, spreads and prepayment information. Securities classified as Level 3, of which the substantial majority are auction-rate securities (ARS), represent securities in less liquid markets requiring significant management assumptions when determining fair value. Due to the lack of a robust secondary auction-rate securities market with active fair value indicators, fair value at June 30, 2011, December 31, 2010 and June 30, 2010 was determined using an income approach based on a discounted cash flow model utilizing two significant assumptions: discount rate (including a liquidity risk premium) and workout period. The discount rate was calculated using credit spreads of the underlying collateral or similar securities plus a liquidity risk premium. The liquidity risk premium was based on observed industry auction-rate securities valuations by third parties and incorporated the rate at which the various types of similar ARS had been redeemed or sold since acquisition in 2008. The workout period was based on an assessment of publicly available information on efforts to re-establish functioning markets for these securities and the Corporation's redemption experience. As of June 30, 2011, approximately 61 percent of the aggregate ARS par value had been redeemed or sold since acquisition at or above carrying value.

Loans

The Corporation does not record loans at fair value on a recurring basis. However, periodically, the Corporation records nonrecurring adjustments to the carrying value of loans based on fair value measurements. Loans for which it is probable that payment of interest or principal will not be made in accordance with the contractual terms of the original loan agreement are considered impaired. Impaired loans are reported as nonrecurring fair value measurements when an allowance is established based on the fair value of collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the Corporation classifies the impaired loan as nonrecurring Level 2. When management determines that the fair value of the collateral requires additional adjustments, either as a result of non-current appraisal value or when there is no observable market price, the Corporation classifies the impaired loan as nonrecurring Level 3.

Business loans consist of commercial, real estate construction, commercial mortgage, lease financing and international loans. The estimated fair value for variable rate business loans that reprice frequently is based on carrying values adjusted for estimated credit losses and other adjustments that would be expected to be made by a market participant in an active market. The fair value for other business loans and retail loans are estimated using a discounted cash flow model that employs interest rates currently offered on the loans, adjusted by an amount for estimated credit losses and other adjustments that would be expected to be made by a market participant in an active market. The rates take into account the expected yield curve, as well as an adjustment for prepayment risk, when applicable.

Customers' liability on acceptances outstanding and acceptances outstanding

The carrying amount of these instruments approximates the estimated fair value, due to their short-term nature.

Derivative assets and derivative liabilities

Derivative instruments held or issued for risk management or customer-initiated activities are traded in over-the-counter markets where quoted market prices are not readily available. Fair value for over-the-counter derivative instruments is measured using internally developed models that use primarily market observable inputs, such as yield curves and option volatilities. Included in the fair value of over-the-counter derivative instruments are credit valuation adjustments reflecting counterparty credit risk and credit risk of the Corporation. These adjustments are determined by applying a credit spread for the counterparty or the Corporation, as appropriate, to the total expected exposure of the derivative after considering collateral and other master netting arrangements. These adjustments, which are considered Level 3 inputs, are based on estimates of current credit spreads to evaluate the likelihood of default. The Corporation assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives. As a result, the Corporation classified its over-the-counter derivative valuations in Level 2 of the fair value hierarchy. Examples of Level 2 derivative instruments are interest rate swaps and energy derivative and foreign exchange contracts.

The Corporation also holds a portfolio of warrants for generally nonmarketable equity securities. These warrants are primarily from high technology, non-public companies obtained as part of the loan origination process. Warrants which contain a net exercise provision or a non-contingent put right embedded in the warrant agreement are accounted for as derivatives and recorded at fair value using a Black-Scholes valuation model with five inputs: risk-free rate, expected life, volatility, exercise price, and the per share market value of the underlying company. The Corporation classifies warrants accounted for as derivatives as recurring Level 3.

The Corporation holds a derivative contract associated with the 2008 sale of its remaining ownership of Visa Inc. (Visa) Class B shares. Under the terms of the derivative contract, the Corporation will compensate the counterparty primarily for dilutive adjustments made to the conversion factor of the Visa Class B to Class A shares based on the ultimate outcome of litigation involving Visa. Conversely, the Corporation will be compensated by the counterparty for any increase in the conversion factor from anti-dilutive adjustments. The fair value of the derivative contract was based on unobservable inputs consisting of management's estimate of the litigation outcome, timing of litigation settlements and payments related to the derivative. The Corporation classifies the derivative liability as recurring Level 3.

Nonmarketable equity securities

The Corporation has a portfolio of indirect private equity and venture capital investments. These funds generally cannot be redeemed and the majority are not readily marketable. Distributions from these funds are received by the Corporation as a result of the liquidation of underlying investments of the funds and/or as income distributions. It is estimated that the underlying assets of the funds will be liquidated over a period of up to 15 years. The value of these investments is at risk to changes in equity markets, general economic conditions and a variety of other factors. The investments are accounted for on the cost or equity method and are individually reviewed for impairment on a quarterly basis by comparing the carrying value to the estimated fair value. These investments may be carried at fair value on a nonrecurring basis when they are deemed to be impaired and written down to fair value. For such investments, fair value measurement guidance permits the use of net asset value, provided the net asset value is calculated by the fund in compliance with fair value measurement guidance applicable to investment companies. Where there is not a readily determinable fair value, the Corporation estimates fair value for indirect private equity and venture capital investments based on the Corporation's percentage ownership in the net asset value of the entire fund, as reported by the fund, after indication that the fund adheres to applicable fair value measurement guidance. For those funds where the net asset value is not reported by the fund, the Corporation derives the fair value of the fund by estimating the fair value of each underlying investment in the fund. In addition to using qualitative information about each underlying investment, as provided by the fund, the Corporation gives consideration to information pertinent to the specific nature of the debt or equity investment, such as relevant market conditions, offering prices, operating results, financial conditions, exit strategy and other qualitative information, as available. The lack of an independent source to validate fair value estimates, including the impact of future capital calls and transfer restrictions, is an inherent limitation in the valuation process.

The Corporation also holds restricted equity investments, primarily Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) stock. Restricted equity securities are not readily marketable and are recorded at cost (par value) and evaluated for impairment based on the ultimate recoverability of the par value. No significant observable market data for these instruments is available. The Corporation considers the profitability and asset quality of the issuer, dividend payment history and recent redemption experience, when determining the ultimate recoverability of the par value. The Corporation's investment in FHLB stock totaled $92 million and $128 million at June 30, 2011 and December 31, 2010, respectively, and its investment in FRB stock totaled $59 million at both June 30, 2011 and December 31, 2010. The Corporation believes its investments in FHLB and FRB stock are recoverable at par.

The Corporation classifies nonmarketable equity securities subjected to nonrecurring fair value adjustments as Level 3.

Other real estate

Other real estate is included in "accrued income and other assets" on the consolidated balance sheets and includes primarily foreclosed property. Foreclosed property is initially recorded at fair value, less costs to sell, at the date of foreclosure, establishing a new cost basis. Subsequently, foreclosed property is carried at the lower of cost or fair value, less costs to sell. Other real estate may be carried at fair value on a nonrecurring basis when fair value is less than cost. Fair value is based upon independent market prices, appraised value or management's estimate of the value. Foreclosed property carried at fair value based on an observable market price or a current appraised value is classified by the Corporation as nonrecurring Level 2. When management determines that the fair value of the foreclosed property requires additional adjustments, either as a result of a non-current appraisal or when there is no observable market price, the Corporation classifies the foreclosed property as nonrecurring Level 3.

Loan servicing rights

Loan servicing rights, included in "accrued income and other assets" on the consolidated balance sheets, are subject to impairment testing. A valuation model is used for impairment testing, which utilizes a discounted cash flow analysis using interest rates and prepayment speed assumptions currently quoted for comparable instruments and a discount rate determined by management. If the valuation model reflects a value less than the carrying value, loan servicing rights are adjusted to fair value through a valuation allowance as determined by the model. As such, the Corporation classifies loan servicing rights subjected to nonrecurring fair value adjustments as Level 3.

Deposit liabilities

The estimated fair value of checking, savings and certain money market deposit accounts is represented by the amounts payable on demand. The estimated fair value of term deposits is calculated by discounting the scheduled cash flows using the period-end rates offered on these instruments.

Short-term borrowings

The carrying amount of federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings approximates the estimated fair value.

Medium- and long-term debt

The carrying value of variable-rate FHLB advances approximates the estimated fair value. The estimated fair value of the Corporation's remaining variable- and fixed-rate medium- and long-term debt is based on quoted market values. If quoted market values are not available, the estimated fair value is based on the market values of debt with similar characteristics.

Credit-related financial instruments

The estimated fair value of unused commitments to extend credit and standby and commercial letters of credit is represented by the estimated cost to terminate or otherwise settle the obligations with the counterparties. This amount is approximated by the fees currently charged to enter into similar arrangements, considering the remaining terms of the agreements and any changes in the credit quality of counterparties since the agreements were executed. This estimate of fair value does not take into account the significant value of the customer relationships and the future earnings potential involved in such arrangements as the Corporation does not believe that it would be practicable to estimate a representational fair value for these items.

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The following tables present the recorded amount of assets and liabilities measured at fair value on a recurring basis as of June 30, 2011 and December 31, 2010.

(in millions)	Total		Level 1		Level 2		Level 3
June 30, 2011
Trading securities:
Deferred compensation plan assets	$	90	$	90	$	—	$	—
Residential mortgage-backed securities (a)		5		—		5		—
State and municipal securities		8		—		6		2
Corporate debt securities		1		—		1		—
Total trading securities		104		90		12		2
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities		20		20		—		—
Residential mortgage-backed securities (a)		6,899		—		6,899		—
State and municipal securities (b)		26		—		—		26
Corporate debt securities:
Auction-rate debt securities		1		—		—		1
Other corporate debt securities		49		—		48		1
Equity and other non-debt securities:
Auction-rate preferred securities		437		—		—		437
Money market and other mutual funds		105		105		—		—
Total investment securities available-for-sale		7,537		125		6,947		465
Derivative assets:
Interest rate contracts		513		—		513		—
Energy derivative contracts		100		—		100		—
Foreign exchange contracts		47		—		47		—
Warrants		8		—		—		8
Total derivative assets		668		—		660		8
Total assets at fair value	$	8,309	$	215	$	7,619	$	475
Derivative liabilities:
Interest rate contracts	$	223	$	—	$	223	$	—
Energy derivative contracts		100		—		100		—
Foreign exchange contracts		40		—		40		—
Other		1		—		—		1
Total derivative liabilities		364		—		363		1
Deferred compensation plan liabilities		90		90		—		—
Total liabilities at fair value	$	454	$	90	$	363	$	1

(a) Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

(b) Primarily auction-rate securities.

(in millions)	Total		Level 1		Level 2		Level 3
December 31, 2010
Trading securities:
Deferred compensation plan assets	$	86	$	86	$	—	$	—
Residential mortgage-backed securities (a)		7		—		7		—
Other government-sponsored enterprise securities		1		—		1		—
State and municipal securities		19		—		19		—
Corporate debt securities		4		—		4		—
Other securities		1		—		—		1
Total trading securities		118		86		31		1
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities		131		131		—		—
Residential mortgage-backed securities (a)		6,709		—		6,709		—
State and municipal securities (b)		39		—		—		39
Corporate debt securities:
Auction-rate debt securities		1		—		—		1
Other corporate debt securities		26		—		25		1
Equity and other non-debt securities:
Auction-rate preferred securities		570		—		—		570
Money market and other mutual funds		84		84		—		—
Total investment securities available-for-sale		7,560		215		6,734		611
Derivative assets:
Interest rate contracts		542		—		542		—
Energy derivative contracts		103		—		103		—
Foreign exchange contracts		51		—		51		—
Warrants		7		—		—		7
Total derivative assets		703		—		696		7
Total assets at fair value	$	8,381	$	301	$	7,461	$	619
Derivative liabilities:
Interest rate contracts	$	249	$	—	$	249	$	—
Energy derivative contracts		103		—		103		—
Foreign exchange contracts		48		—		48		—
Other		1		—		—		1
Total derivative liabilities		401		—		400		1
Deferred compensation plan liabilities		86		86		—		—
Total liabilities at fair value	$	487	$	86	$	400	$	1

(a) Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

(b) Primarily auction-rate securities.

There were no significant transfers of assets or liabilities recorded at fair value on a recurring basis into or out of Level 1 and Level 2 fair value measurements during the three- and six-month periods ended June 30, 2011 and 2010.

The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three- and six-month periods ended June 30, 2011 and 2010.

			Net Realized/Unrealized Gains (Losses)
	Balance at Beginning  of Period		Recorded in Earnings						Recorded in  Other Comprehensive Income (Pre- tax)											Balance at End of  Period
(in millions)			Realized			Unrealized						Purchases		Sales			Settlements
Three months ended June 30, 2011
Trading securities:
State and municipal securities	$	—	$	—		$	—		$	—		$	2	$	—		$	—		$	2
Investment securities available-for-sale:
State and municipal securities (a)		26		—			—			—			—		—			—			26
Auction-rate debt securities		1		—			—			—			—		—			—			1
Other corporate debt securities		1		—			—			—			—		—			—			1
Auction-rate preferred securities		504		4			—			8			—		(79	)		—			437
Total investment securities available-for-sale		532		4			—			8			—		(79	)		—			465
Derivative assets:
Warrants		8		5			—			—			—		(5	)		—			8
Derivative liabilities:
Other		2		—			—			—			—		—			(1	)		1
Three months ended June 30, 2010
Trading securities:
State and municipal securities	$	—	$	—		$	—		$	—		$	3	$	—		$	—		$	3
Investment securities available-for-sale:
State and municipal securities (a)		45		—			—			(3	)		—		—			—			42
Auction-rate debt securities		144		2			—			9			—		(103	)		—			52
Other corporate debt securities		1		—			—			—			—		—			—			1
Auction-rate preferred securities		663		3			—			(9	)		—		(48	)		—			609
Total investment securities available-for-sale		853		5			—			(3	)		—		(151	)		—			704
Derivative assets:
Warrants		7		—			1			—			—		(1	)		—			7
Derivative liabilities:
Other		—		(1	)		(2	)		—			—		—			(1	)		2

(a) Primarily auction-rate securities

			Net Realized/Unrealized Gains (Losses)
	Balance at Beginning of Period		Recorded in Earnings						Recorded in Other Comprehensive Income (Pre-tax)											Balance at End of Period
(in millions)			Realized			Unrealized						Purchases		Sales			Settlements
Six months ended June 30, 2011
Trading securities:
State and municipal securities	$	—	$	—		$	—		$	—		$	2	$	—		$	—		$	2
Other securities		1		—			—			—			—		(1	)		—			—
Total trading securities		1		—			—			—			2		(1	)		—			2
Investment securities available-for-sale:
State and municipal securities (a)		39		—			—			—			—		(13	)		—			26
Auction-rate debt securities		1		—			—			—			—		—			—			1
Other corporate debt securities		1		—			—			—			—		—			—			1
Auction-rate preferred securities		570		7			—			(3	)		—		(137	)		—			437
Total investment securities available-for-sale		611		7			—			(3	)		—		(150	)		(0	)		465
Derivative assets:
Warrants		7		7			1			—			—		(7	)		—			8
Derivative liabilities:
Other		1		—			(1	)		—			—		—			(1	)		1
Six months ended June 30, 2010
Trading securities:
State and municipal securities	$	—	$	—		$	—		$	—		$	3	$	—		$	—		$	3
Investment securities available-for-sale:
State and municipal securities (a)		46		—			—			(4	)		—		—			—			42
Auction-rate debt securities		150		2			—			4			—		(104	)		—			52
Other corporate debt securities		7		27			—			—			—		—			(33	)		1
Auction-rate preferred securities		706		5			—			(8	)		—		(94	)		—			609
Total investment securities available-for-sale		909		34			—			(8	)		—		(198	)		(33	)		704
Derivative assets:
Warrants		7		2			1			—			—		(3	)		—			7
Derivative liabilities:
Other		—		(1	)		(2	)		—			—		—			(1	)		2

(a) Primarily auction-rate securities

There were no transfers of assets or liabilities recorded at fair value on a recurring basis into or out of Level 3 fair value measurements during the three- and six-month periods ended June 30, 2011 and 2010.

The following table presents the income statement classification of realized and unrealized gains and losses due to changes in fair value recorded in earnings for the three- and six-month periods ended June 30, 2011 and 2010 for recurring Level 3 assets and liabilities, as shown in the previous table.

	Net Securities Gains (Losses)						Other Noninterest Income				Discontinued Operations		Total
(in millions)	Realized			Unrealized			Realized		Unrealized		Realized		Realized			Unrealized
Three months ended June 30, 2011
Investment securities available-for-sale:
Auction-rate preferred securities	$	4		$	—		$	—	$	—	$	—	$	4		$	—
Derivative assets:
Warrants		—			—			5		—		—		5			—
Three months ended June 30, 2010
Investment securities available-for-sale:
Auction-rate debt securities	$	2		$	—		$	—	$	—	$	—	$	2		$	—
Auction-rate preferred securities		3			—			—		—		—		3			—
Total investment securities available-for-sale		5			—			—		—		—		5			—
Derivative assets:
Warrants		—			—			—		1		—		—			1
Derivative liabilities:
Other		(1	)		(2	)		—		—		—		(1	)		(2	)
Six months ended June 30, 2011
Investment securities available-for-sale:
Auction-rate preferred securities	$	7		$	—		$	—	$	—	$	—	$	7		$	—
Derivative assets:
Warrants		—			—			7		1		—		7			1
Derivative liabilities:
Other		—			(1	)		—		—		—		—			(1	)
Six months ended June 30, 2010
Investment securities available-for-sale:
Auction-rate debt securities	$	2		$	—		$	—	$	—	$	—	$	2		$	—
Other corporate debt securities		—			—			—		—		27		27			—
Auction-rate preferred securities		5			—			—		—		—		5			—
Total investment securities available-for-sale		7			—			—		—		27		34			—
Derivative assets:
Warrants		—			—			2		1		—		2			1
Derivative liabilities:
Other		(1	)		(2	)		—		—		—		(1	)		(2	)

(a) Primarily auction-rate securities

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The Corporation may be required, from time to time, to record certain assets and liabilities at fair value on a nonrecurring basis. These include assets that are recorded at the lower of cost or fair value that were recognized at fair value below cost at the end of the period. Assets and liabilities recorded at fair value on a nonrecurring basis are presented in the following table.

(in millions)	Total		Level 2		Level 3
June 30, 2011
Loans held-for-sale:
Residential mortgage	$	7	$	7	$	—
Loans:
Commercial		221		—		221
Real estate construction		129		—		129
Commercial mortgage		363		—		363
Residential mortgage		10		—		10
Lease financing		6		—		6
International		7		—		7
Total loans		736		—		736
Nonmarketable equity securities		2		—		2
Other real estate		26		—		26
Loan servicing rights		4		—		4
Total assets at fair value	$	775	$	7	$	768
Total liabilities at fair value	$	—	$	—	$	—
December 31, 2010
Loans held-for-sale:
Residential mortgage	$	6	$	6	$	—
Loans:
Commercial		200		—		200
Real estate construction		247		—		247
Commercial mortgage		398		—		398
Lease financing		7		—		7
International		2		—		2
Total loans		854		—		854
Nonmarketable equity securities		9		—		9
Other real estate		33		—		33
Loan servicing rights		5		—		5
Total assets at fair value	$	907	$	6	$	901
Total liabilities at fair value	$	—	$	—	$	—

Estimated Fair Values of Financial Instruments Not Recorded at Fair Value in their Entirety on a Recurring Basis

The Corporation typically holds the majority of its financial instruments until maturity and thus does not expect to realize many of the estimated fair value amounts disclosed. The disclosures also do not include estimated fair value amounts for items that are not defined as financial instruments, but which have significant value. These include such items as core deposit intangibles, the future earnings potential of significant customer relationships and the value of trust operations and other fee generating businesses. The Corporation believes the imprecision of an estimate could be significant.

The carrying amount and estimated fair value of financial instruments not recorded at fair value in their entirety on a recurring basis on the Corporation's consolidated balance sheets are as follows:

	June 30, 2011						December 31, 2010
(in millions)	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
Assets
Cash and due from banks	$	987		$	987		$	668		$	668
Interest-bearing deposits with banks		2,479			2,479			1,415			1,415
Loans held-for-sale		20			20			23			23
Total loans, net of allowance for loan losses (a)		38,387			38,456			39,335			39,212
Customers' liability on acceptances outstanding		10			10			9			9
Nonmarketable equity securities (b)		16			28			47			77
Loan servicing rights		4			4			5			5
Liabilities
Demand deposits (noninterest-bearing)		16,344			16,344			15,538			15,538
Interest-bearing deposits		25,414			25,423			24,933			24,945
Total deposits		41,758			41,767			40,471			40,483
Short-term borrowings		67			67			130			130
Acceptances outstanding		10			10			9			9
Medium- and long-term debt		5,206			5,129			6,138			6,008
Credit-related financial instruments		(93	)		(93	)		(99	)		(99	)

(a) Included $736 million and $854 million of impaired loans recorded at fair value on a nonrecurring basis at June 30, 2011 and December 31, 2010, respectively.

(b) Included $2 million and $9 million of nonmarketable equity securities recorded at fair value on a nonrecurring basis at June 30, 2011 and December 31, 2010, respectively.

XML



Income Taxes and Tax-Related Items (Details) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Income Taxes and Tax-Related Items
Unrecognized Tax Benefits	$ 27	$ 5
Increase in unrecognized tax benefits	22
Reasonably possible decrease in unrecognized tax benefits in next 12 months	30
Accrued interest payable on unrecognized tax positions		17
Decrease in accrued interest payable on unrecognized tax positions	$ 17

XML



Fair Value Measurements (Realized and Unrealized Gains and Losses Due to Changes in Fair Value ) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Other Derivative Liabilities [Member] | Net Securities Gains (Losses) [Member]
Realized gains (losses) on liabilities recorded in earnings, fair value		$ (1)		$ (1)
Unrealized gains (losses) on liabilities recorded in earnings, fair value		(2)	(1)	(2)
Net Securities Gains (Losses) [Member] | Auction-Rate Debt Securities [Member] | Total Investment Securities Available-For-Sale [Member]
Realized gains (losses) on assets recorded in earnings, fair value				2
Auction-Rate Preferred Securities [Member] | Total Investment Securities Available-For-Sale [Member] | Net Securities Gains (Losses) [Member]
Realized gains (losses) on assets recorded in earnings, fair value	4	3		5
Total Investment Securities Available-For-Sale [Member] | Net Securities Gains (Losses) [Member] | Auction-Rate Preferred Securities [Member]
Realized gains (losses) on assets recorded in earnings, fair value			7
Auction-Rate Debt Securities [Member] | Total Investment Securities Available-For-Sale [Member] | Net Securities Gains (Losses) [Member]
Realized gains (losses) on assets recorded in earnings, fair value		2
Total Investment Securities Available-For-Sale [Member] | Net Securities Gains (Losses) [Member]
Realized gains (losses) on assets recorded in earnings, fair value		5		7
Warrants [Member] | Other Noninterest Income [Member]
Realized gains (losses) on assets recorded in earnings, fair value	5		7	2
Unrealized gains (losses) on assets recorded in earnings, fair value		1	1	1
Discontinued Operations [Member] | Other Corporate Debt Securities [Member] | Total Investment Securities Available-For-Sale [Member]
Realized gains (losses) on assets recorded in earnings, fair value				27
Total Investment Securities Available-For-Sale [Member] | Discontinued Operations [Member]
Realized gains (losses) on assets recorded in earnings, fair value				27
Warrants [Member]
Realized gains (losses) on assets recorded in earnings, fair value	5		7	2
Unrealized gains (losses) on assets recorded in earnings, fair value		1	1	1
Other Derivative Liabilities [Member]
Realized gains (losses) on liabilities recorded in earnings, fair value		(1)		(1)
Unrealized gains (losses) on liabilities recorded in earnings, fair value		(2)	(1)	(2)
Auction-Rate Debt Securities [Member] | Total Investment Securities Available-For-Sale [Member]
Realized gains (losses) on assets recorded in earnings, fair value		2		2
Other Corporate Debt Securities [Member] | Total Investment Securities Available-For-Sale [Member]
Realized gains (losses) on assets recorded in earnings, fair value				27
Auction-Rate Preferred Securities [Member] | Total Investment Securities Available-For-Sale [Member]
Realized gains (losses) on assets recorded in earnings, fair value	4	3	7	5
Total Investment Securities Available-For-Sale [Member]
Realized gains (losses) on assets recorded in earnings, fair value		$ 5		$ 34

XML



Variable Interest Entities (VIEs) (Tables)

6 Months Ended

Jun. 30, 2011

Variable Interest Entities (VIEs)

Impact of VIEs on the Consolidated Statements of Income

	Three Months Ended						Six Months Ended
(in millions)	June 30,						June 30,
Classification in Earnings	2011			2010			2011			2010
Other noninterest income	$	(13	)	$	(12	)	$	(26	)	$	(24	)
Provision (benefit) for income taxes (a)		(13	)		(12	)		(26	)		(24	)

(a) Income tax credits from low income housing tax credit/historic rehabilitation tax credit partnerships.

XML



Variable Interest Entities (VIEs) (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Variable Interest Entities (VIEs)
Number of partnership interests in low-income housing tax credit/historic rehabilitation tax credit partnerships	149
Corporation's investment in low-income housing partnerships	$ 337
Unfunded commitments to fund low-income housing partnerships	78
Corporation provided financial or other support not contractually required to VIEs	$ 0	$ 0

XML



Business Segment Information (Business Segment Financial Results) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011		Jun. 30, 2010
Net interest income (expense) (FTE)			$ 788		$ 840
Provision for loan losses	47	126	96		301
Noninterest income	202	194	409		388
Noninterest expenses	409	397	824		801
Provision (benefit) for income taxes (FTE)			78		21
Income from discontinued operations, net of tax					17
Net income (loss)	96	70	199		122
Net credit-related charge-offs	191	319	191		319
Assets, average	54,148	56,885	54,148		56,885
Loans, average			39,361		40,990
Deposits, average			41,041		39,125
Return on average assets			0.73%	[1]	0.43%	[1]
Net interest margin			3.19%	[2]	3.23%	[2]
Efficiency ratio			69.19%		65.45%
Business Bank [Member]
Net interest income (expense) (FTE)			682		692
Provision for loan losses			24		219
Noninterest income			156		152
Noninterest expenses			316		319
Provision (benefit) for income taxes (FTE)			155		83
Net income (loss)			343		223
Net credit-related charge-offs	126	251	126		251
Assets, average	29,991	30,949	29,991		30,949
Loans, average			29,493		30,633
Deposits, average			20,241		18,413
Return on average assets			2.29%	[1]	1.44%	[1]
Net interest margin			4.65%	[2]	4.55%	[2]
Efficiency ratio			37.78%		37.84%
Retail Bank [Member]
Net interest income (expense) (FTE)			282		265
Provision for loan losses			47		52
Noninterest income			87		86
Noninterest expenses			325		314
Provision (benefit) for income taxes (FTE)			2		(5)
Net income (loss)			(5)		(10)
Net credit-related charge-offs	46	47	46		47
Assets, average	5,505	6,021	5,505		6,021
Loans, average			5,053		5,522
Deposits, average			17,549		16,825
Return on average assets			(0.06%)	[1]	(0.11%)	[1]
Net interest margin			3.24%	[2]	3.17%	[2]
Efficiency ratio			87.81%		88.79%
Wealth Management [Member]
Net interest income (expense) (FTE)			92		87
Provision for loan losses			23		31
Noninterest income			128		122
Noninterest expenses			155		153
Provision (benefit) for income taxes (FTE)			16		9
Net income (loss)			26		16
Net credit-related charge-offs	19	21	19		21
Assets, average	4,769	4,883	4,769		4,883
Loans, average			4,774		4,815
Deposits, average			2,889		2,858
Return on average assets			1.08%	[1]	0.67%	[1]
Net interest margin			3.91%	[2]	3.64%	[2]
Efficiency ratio			72.87%		75.39%
Finance [Member]
Net interest income (expense) (FTE)			(283)		(209)
Noninterest income			27		26
Noninterest expenses			6		4
Provision (benefit) for income taxes (FTE)			(98)		(71)
Net income (loss)			(164)		(116)
Assets, average	9,360	9,379	9,360		9,379
Loans, average			35		23
Deposits, average			244		934
Other [Member]
Net interest income (expense) (FTE)			15		5
Provision for loan losses			2		(1)
Noninterest income			11		2
Noninterest expenses			22		11
Provision (benefit) for income taxes (FTE)			3		5
Income from discontinued operations, net of tax					17
Net income (loss)			(1)		9
Assets, average	4,523	5,653	4,523		5,653
Loans, average			6		(3)
Deposits, average			$ 118		$ 95

[1] Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.

[2] Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.

XML



Derivative and Credit-Related Financial Instruments (Schedule of Weighted Average Maturity and Interest Rates on Risk Management Interest Rate Swaps) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2011		Dec. 31, 2010
Notional amount	$ 17,715	[1]	$ 18,260	[1]
Risk Management Purposes [Member] | Swaps - Cash Flow Hedge - Receive Fixed/Pay Floating [Member] | Variable Rate Loan Designation [Member]
Notional amount			800
Weighted average remaining maturity of interest rate swap agreements, in years			0.1
Weighted average receive rate			4.75%
Weighted average pay rate			3.25%	[2]
Risk Management Purposes [Member] | Interest Rate Contracts [Member]
Notional amount	1,450		2,400
Risk Management Purposes [Member] | Swaps - Fair Value Hedge - Receive Fixed/Pay Floating [Member] | Medium- and Long-Term Debt Designation [Member]
Notional amount	1,450		1,600
Weighted average remaining maturity of interest rate swap agreements, in years	5.9		7.1
Weighted average receive rate	5.45%		5.73%
Weighted average pay rate	0.45%	[2]	0.85%	[2]
Risk Management Purposes [Member]
Notional amount	$ 1,836	[1]	$ 2,620	[1]

[1] Notional or contract amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets.

[2] Variable rates paid on receive fixed swaps are based on prime and six-month LIBOR rates in effect at June 30, 2011 and December 31, 2010.

XML



Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2011

Business Segment Information

Business Segment Financial Results

(dollar amounts in millions) Six Months Ended June 30, 2011	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	682		$	282		$	92		$	(283	)	$	15		$	788
Provision for loan losses		24			47			23			—			2			96
Noninterest income		156			87			128			27			11			409
Noninterest expenses		316			325			155			6			22			824
Provision (benefit) for income taxes (FTE)		155			2			16			(98	)		3			78
Net income (loss)	$	343		$	(5	)	$	26		$	(164	)	$	(1	)	$	199
Net credit-related charge-offs	$	126		$	46		$	19		$	—		$	—		$	191
Selected average balances:
Assets	$	29,991		$	5,505		$	4,769		$	9,360		$	4,523		$	54,148
Loans		29,493			5,053			4,774			35			6			39,361
Deposits		20,241			17,549			2,889			244			118			41,041
Statistical data:
Return on average assets (a)		2.29	%		(0.06	)%		1.08	%		N/M			N/M			0.73	%
Net interest margin (b)		4.65			3.24			3.91			N/M			N/M			3.19
Efficiency ratio		37.78			87.81			72.87			N/M			N/M			69.19
Six Months Ended June 30, 2010	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	692		$	265		$	87		$	(209	)	$	5		$	840
Provision for loan losses		219			52			31			—			(1	)		301
Noninterest income		152			86			122			26			2			388
Noninterest expenses		319			314			153			4			11			801
Provision (benefit) for income taxes (FTE)		83			(5	)		9			(71	)		5			21
Income from discontinued operations, net of tax		—			—			—			—			17			17
Net income (loss)	$	223		$	(10	)	$	16		$	(116	)	$	9		$	122
Net credit-related charge-offs	$	251		$	47		$	21		$	—		$	—		$	319
Selected average balances:
Assets	$	30,949		$	6,021		$	4,883		$	9,379		$	5,653		$	56,885
Loans		30,633			5,522			4,815			23			(3	)		40,990
Deposits		18,413			16,825			2,858			934			95			39,125
Statistical data:
Return on average assets (a)		1.44	%		(0.11	)%		0.67	%		N/M			N/M			0.43	%
Net interest margin (b)		4.55			3.17			3.64			N/M			N/M			3.23
Efficiency ratio		37.84			88.79			75.39			N/M			N/M			65.45

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

(b) Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.

Market Segment Financial Results

(dollar amounts in millions) Six Months Ended June 30, 2011	Midwest			Western			Texas			Florida			Other Markets			International			Finance & Other Businesses			Total
Earnings summary:
Net interest income (expense) (FTE)	$	407		$	330		$	176		$	23		$	82		$	38		$	(268	)	$	788
Provision for loan losses		49			31			2			19			(2	)		(5	)		2			96
Noninterest income		200			74			48			7			24			18			38			409
Noninterest expenses		371			217			124			24			41			19			28			824
Provision (benefit) for income taxes (FTE)		72			55			36			(4	)		(1	)		15			(95	)		78
Net income (loss)	$	115		$	101		$	62		$	(9	)	$	68		$	27		$	(165	)	$	199
Net credit-related charge-offs	$	81		$	52		$	12		$	23		$	21		$	2		$	—		$	191
Selected average balances:
Assets	$	14,287		$	12,459		$	7,056		$	1,543		$	3,171		$	1,749		$	13,883		$	54,148
Loans		14,077			12,250			6,848			1,573			2,891			1,681			41			39,361
Deposits		18,273			12,347			5,982			382			2,375			1,320			362			41,041
Statistical data:
Return on average assets (a)		1.18	%		1.51	%		1.75	%		(1.11	)%		4.31	%		3.06	%		N/M			0.73	%
Net interest margin (b)		4.48			5.39			5.18			2.98			5.81			4.37			N/M			3.19
Efficiency ratio		61.14			53.77			55.27			78.79			41.42			33.87			N/M			69.19
Six Months Ended June 30, 2010	Midwest			Western			Texas			Florida			Other Markets			International			Finance & Other Businesses			Total
Earnings summary:
Net interest income (expense) (FTE)	$	415		$	325		$	160		$	21		$	86		$	37		$	(204	)	$	840
Provision for loan losses		114			86			16			19			75			(8	)		(1	)		301
Noninterest income		198			69			43			7			25			18			28			388
Noninterest expenses		366			215			125			21			43			16			15			801
Provision (benefit) for income taxes (FTE)		47			32			22			(4	)		(26	)		16			(66	)		21
Income from discontinued operations, net of tax		—			—			—			—			—			—			17			17
Net income (loss)	$	86		$	61		$	40		$	(8	)	$	19		$	31		$	(107	)	$	122
Net credit-related charge-offs	$	98		$	112		$	33		$	17		$	54		$	5		$	—		$	319
Selected average balances:
Assets	$	14,915		$	13,090		$	6,771		$	1,576		$	3,859		$	1,642		$	15,032		$	56,885
Loans		14,777			12,886			6,565			1,575			3,578			1,589			20			40,990
Deposits		17,526			11,939			5,137			382			2,099			1,013			1,029			39,125
Statistical data:
Return on average assets (a)		0.92	%		0.90	%		1.18	%		(1.00	)%		1.03	%		3.70	%		N/M			0.43	%
Net interest margin (b)		4.75			5.08			4.92			2.74			4.88			4.63			N/M			3.23
Efficiency ratio		59.37			54.74			61.44			74.63			40.96			29.81			N/M			65.45

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

(b) Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.

XML



Fair Value Measurements (Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended						3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended				6 Months Ended						3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2011 Warrants [Member]	Jun. 30, 2010 Warrants [Member]	Jun. 30, 2011 Warrants [Member]	Jun. 30, 2010 Warrants [Member]	Jun. 30, 2011 Other Derivative Liabilities [Member]	Jun. 30, 2010 Other Derivative Liabilities [Member]	Jun. 30, 2011 Other Derivative Liabilities [Member]	Jun. 30, 2010 Other Derivative Liabilities [Member]	Jun. 30, 2011 Other Derivative Assets [Member]	Jun. 30, 2010 State And Municipal Securities [Member] Total Investment Securities Available-For-Sale [Member]		Jun. 30, 2011 State And Municipal Securities [Member] Total Investment Securities Available-For-Sale [Member]		Jun. 30, 2010 State And Municipal Securities [Member] Total Investment Securities Available-For-Sale [Member]		Mar. 31, 2011 State And Municipal Securities [Member] Total Investment Securities Available-For-Sale [Member]		Jun. 30, 2010 Auction-Rate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Auction-Rate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Auction-Rate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Auction-Rate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2011 Auction-Rate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Mar. 31, 2011 Auction-Rate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Dec. 31, 2010 Auction-Rate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Other Corporate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Other Corporate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2011 Other Corporate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Mar. 31, 2011 Other Corporate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Dec. 31, 2010 Other Corporate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Mar. 31, 2010 Other Corporate Debt Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2011 Auction-Rate Preferred Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Auction-Rate Preferred Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2011 Auction-Rate Preferred Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Auction-Rate Preferred Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2011 Auction-Rate Preferred Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Auction-Rate Preferred Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2011 Auction-Rate Preferred Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Auction-Rate Preferred Securities [Member] Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2011 Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2011 Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2010 Total Investment Securities Available-For-Sale [Member]	Jun. 30, 2011 State And Municipal Securities [Member] Total Trading Securities [Member]	Jun. 30, 2010 State And Municipal Securities [Member] Total Trading Securities [Member]	Jun. 30, 2011 State And Municipal Securities [Member] Total Trading Securities [Member]	Jun. 30, 2010 State And Municipal Securities [Member] Total Trading Securities [Member]	Jun. 30, 2011 Total Trading Securities [Member]	Jun. 30, 2011 Other Securities [Member] Total Trading Securities [Member]
Balance at beginning of period	$ 8	$ 7	$ 7	$ 7						$ 45	[1]	$ 39	[1]	$ 46	[1]	$ 26	[1]			$ 144	$ 150	$ 1	$ 1	$ 1		$ 7	$ 1	$ 1	$ 1	$ 1					$ 504	$ 663	$ 570	$ 706	$ 532	$ 853	$ 611	$ 909							$ 1	$ 1
Realized gain (loss) recorded in earnings	5		7	2														2	2	2	2				27	27					4	3	7	5	4	3	7	5	4	5	7	34	5	34
Unrealized gain (loss) recorded in earnings		1	1	1
Gain (loss) recorded in other comprehensive income (pre-tax)										(3)	[1]			(4)	[1]					9	4														8	(9)	(3)	(8)	8	(3)	(3)	(8)
Purchases																																													2	3	2	3	2
Sales	(5)	(1)	(7)	(3)								(13)	[1]							(103)	(104)														(79)	(48)	(137)	(94)	(79)	(151)	(150)	(198)							(1)	(1)
Settlements																										(33)															0	(33)
Balance at end of period	8	7	8	7						42	[1]	26	[1]	42	[1]	26	[1]			52	52	1	1	1		1	1	1	1	1					437	609	437	609	465	704	465	704			2	3	2	3	2
Balance at beginning of period					2		1
Realized gains (losses) on liabilities recorded in earnings, fair value						(1)		(1)
Unrealized gain (loss) recorded in earnings						(2)	(1)	(2)
Settlements					(1)	(1)	(1)	(1)
Balance at end of period					$ 1	$ 2	$ 1	$ 2

[1] Primarily auction-rate securities.

XML



Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2011

Accumulated Other Comprehensive Income (Loss)

Schedule of Accumulated Other Comprehensive Income (Loss)

	Six Months Ended June 30,
(in millions)	2011			2010
Accumulated net unrealized gains on investment securities available-for-sale:
Balance at beginning of period, net of tax	$	14		$	11
Net unrealized holding gains arising during the period		106			149
Less: Reclassification adjustment for net gains included in net income		6			3
Change in net unrealized gains before income taxes		100			146
Less: Provision for income taxes		37			54
Change in net unrealized gains on investment securities available-for-sale, net of tax		63			92
Balance at end of period, net of tax	$	77		$	103
Accumulated net gains on cash flow hedges:
Balance at beginning of period, net of tax	$	2		$	18
Net cash flow hedge gains (losses) arising during the period		(2	)		7
Less: Reclassification adjustment for net gains included in net income		1			17
Change in net cash flow hedge gains (losses) before income taxes		(3	)		(10	)
Less: Provision (benefit) for income taxes		(1	)		(4	)
Change in net cash flow hedge gains, net of tax		(2	)		(6	)
Balance at end of period, net of tax	$	—		$	12
Accumulated defined benefit pension and other postretirement plans adjustment:
Balance at beginning of period, net of tax	$	(405	)	$	(365	)
Net defined benefit pension and other postretirement adjustment arising during the period		7			—
Less: Adjustment for amounts recognized as components of net periodic benefit cost during the period		(24	)		(16	)
Change in defined benefit pension and other postretirement plans adjustment before income taxes		31			16
Less: Provision for income taxes		11			6
Change in defined benefit pension and other postretirement plans adjustment, net of tax		20			10
Balance at end of period, net of tax	$	(385	)	$	(355	)
Total accumulated other comprehensive loss at end of period, net of tax	$	(308	)	$	(240	)

XML



Employee Benefit Plans

6 Months Ended

Jun. 30, 2011

Employee Benefit Plans

Employee Benefit Plans

NOTE 11 – EMPLOYEE BENEFIT PLANS

Net periodic benefit costs are charged to "employee benefits expense" on the consolidated statements of income. The components of net periodic benefit cost for the Corporation's qualified pension plan, non-qualified pension plan and postretirement benefit plan are as follows:

Qualified Defined Benefit Pension Plan	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2011			2010			2011			2010
Service cost	$	8		$	8		$	16		$	15
Interest cost		19			19			38			36
Expected return on plan assets		(29	)		(28	)		(58	)		(57	)
Amortization of unrecognized prior service cost		1			2			2			4
Amortization of unrecognized net loss		9			4			18			8
Net periodic benefit cost	$	8		$	5		$	16		$	6
Non-Qualified Defined Benefit Pension Plan	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2011			2010			2011			2010
Service cost	$	1		$	1		$	2		$	2
Interest cost		3			2			5			4
Amortization of unrecognized prior service cost		(1	)		(1	)		(1	)		(1	)
Amortization of unrecognized net loss		1			1			2			2
Net periodic benefit cost	$	4		$	3		$	8		$	7
Postretirement Benefit Plan	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2011			2010			2011			2010
Interest cost	$	1		$	1		$	2		$	2
Expected return on plan assets		(1	)		(1	)		(2	)		(2	)
Amortization of unrecognized transition obligation		1			1			2			2
Amortization of unrecognized net loss		1			1			1			1
Net periodic benefit cost	$	2		$	2		$	3		$	3

For further information on the Corporation's employee benefit plans, refer to Note 18 to the consolidated financial statements in the Corporation's 2010 Annual Report.

XML



Credit Quality and Allowance for Credit Losses (Credit Quality Indicators1) (Details) (USD $) In Millions	Jun. 30, 2011		Dec. 31, 2010		Jun. 30, 2010
Total loans	$ 39,193		$ 40,236		$ 40,602
Business Loans [Member]
Total loans	35,470		36,306
Business Loans [Member] | Commercial Loans [Member]
Total loans	22,052		22,145
Business Loans [Member] | Commercial Loans [Member] | Pass [Member]
Total loans	20,099	[1]	19,884	[1]
Business Loans [Member] | Commercial Loans [Member] | Special Mention [Member]
Total loans	900	[2]	1,015	[2]
Business Loans [Member] | Commercial Loans [Member] | Substandard [Member]
Total loans	792	[3]	994	[3]
Business Loans [Member] | Commercial Loans [Member] | Nonaccrual [Member]
Total loans	261	[4]	252	[4]
Business Loans [Member] | Real Estate Construction [Member]
Total loans	1,728		2,253
Business Loans [Member] | Real Estate Construction [Member] | Commercial Real Estate Business Line [Member]
Total loans	1,343	[5]	1,826	[5]
Business Loans [Member] | Real Estate Construction [Member] | Commercial Real Estate Business Line [Member] | Pass [Member]
Total loans	820	[1],[5]	1,025	[1],[5]
Business Loans [Member] | Real Estate Construction [Member] | Commercial Real Estate Business Line [Member] | Special Mention [Member]
Total loans	202	[2],[5]	333	[2],[5]
Business Loans [Member] | Real Estate Construction [Member] | Commercial Real Estate Business Line [Member] | Substandard [Member]
Total loans	184	[3],[5]	209	[3],[5]
Business Loans [Member] | Real Estate Construction [Member] | Commercial Real Estate Business Line [Member] | Nonaccrual [Member]
Total loans	137	[4],[5]	259	[4],[5]
Business Loans [Member] | Real Estate Construction [Member] | Other Business Lines [Member]
Total loans	385	[6]	427	[6]
Business Loans [Member] | Real Estate Construction [Member] | Other Business Lines [Member] | Pass [Member]
Total loans	341	[1],[6]	383	[1],[6]
Business Loans [Member] | Real Estate Construction [Member] | Other Business Lines [Member] | Special Mention [Member]
Total loans	24	[2],[6]	20	[2],[6]
Business Loans [Member] | Real Estate Construction [Member] | Other Business Lines [Member] | Substandard [Member]
Total loans	18	[3],[6]	20	[3],[6]
Business Loans [Member] | Real Estate Construction [Member] | Other Business Lines [Member] | Nonaccrual [Member]
Total loans	2	[4],[6]	4	[4],[6]
Business Loans [Member] | Real Estate Construction [Member] | Pass [Member]
Total loans	1,161	[1]	1,408	[1]
Business Loans [Member] | Real Estate Construction [Member] | Special Mention [Member]
Total loans	226	[2]	353	[2]
Business Loans [Member] | Real Estate Construction [Member] | Substandard [Member]
Total loans	202	[3]	229	[3]
Business Loans [Member] | Real Estate Construction [Member] | Nonaccrual [Member]
Total loans	139	[4]	263	[4]
Business Loans [Member] | Commercial Mortgage [Member]
Total loans	9,579		9,767
Business Loans [Member] | Commercial Mortgage [Member] | Commercial Real Estate Business Line [Member]
Total loans	1,930	[5]	1,937	[5]
Business Loans [Member] | Commercial Mortgage [Member] | Commercial Real Estate Business Line [Member] | Pass [Member]
Total loans	1,179	[1],[5]	1,104	[1],[5]
Business Loans [Member] | Commercial Mortgage [Member] | Commercial Real Estate Business Line [Member] | Special Mention [Member]
Total loans	328	[2],[5]	372	[2],[5]
Business Loans [Member] | Commercial Mortgage [Member] | Commercial Real Estate Business Line [Member] | Substandard [Member]
Total loans	237	[3],[5]	280	[3],[5]
Business Loans [Member] | Commercial Mortgage [Member] | Commercial Real Estate Business Line [Member] | Nonaccrual [Member]
Total loans	186	[4],[5]	181	[4],[5]
Business Loans [Member] | Commercial Mortgage [Member] | Other Business Lines [Member]
Total loans	7,649	[6]	7,830	[6]
Business Loans [Member] | Commercial Mortgage [Member] | Other Business Lines [Member] | Pass [Member]
Total loans	6,400	[1],[6]	6,595	[1],[6]
Business Loans [Member] | Commercial Mortgage [Member] | Other Business Lines [Member] | Special Mention [Member]
Total loans	504	[2],[6]	508	[2],[6]
Business Loans [Member] | Commercial Mortgage [Member] | Other Business Lines [Member] | Substandard [Member]
Total loans	476	[3],[6]	425	[3],[6]
Business Loans [Member] | Commercial Mortgage [Member] | Other Business Lines [Member] | Nonaccrual [Member]
Total loans	269	[4],[6]	302	[4],[6]
Business Loans [Member] | Commercial Mortgage [Member] | Pass [Member]
Total loans	7,579	[1]	7,699	[1]
Business Loans [Member] | Commercial Mortgage [Member] | Special Mention [Member]
Total loans	832	[2]	880	[2]
Business Loans [Member] | Commercial Mortgage [Member] | Substandard [Member]
Total loans	713	[3]	705	[3]
Business Loans [Member] | Commercial Mortgage [Member] | Nonaccrual [Member]
Total loans	455	[4]	483	[4]
Business Loans [Member] | Lease Financing Loan [Member]
Total loans	949		1,009
Business Loans [Member] | Lease Financing Loan [Member] | Pass [Member]
Total loans	912	[1]	962	[1]
Business Loans [Member] | Lease Financing Loan [Member] | Special Mention [Member]
Total loans	11	[2]	13	[2]
Business Loans [Member] | Lease Financing Loan [Member] | Substandard [Member]
Total loans	20	[3]	27	[3]
Business Loans [Member] | Lease Financing Loan [Member] | Nonaccrual [Member]
Total loans	6	[4]	7	[4]
Business Loans [Member] | International Loan [Member]
Total loans	1,162		1,132
Business Loans [Member] | International Loan [Member] | Pass [Member]
Total loans	1,061	[1]	963	[1]
Business Loans [Member] | International Loan [Member] | Special Mention [Member]
Total loans	60	[2]	112	[2]
Business Loans [Member] | International Loan [Member] | Substandard [Member]
Total loans	34	[3]	55	[3]
Business Loans [Member] | International Loan [Member] | Nonaccrual [Member]
Total loans	7	[4]	2	[4]
Business Loans [Member] | Pass [Member]
Total loans	30,812	[1]	30,916	[1]
Business Loans [Member] | Special Mention [Member]
Total loans	2,029	[2]	2,373	[2]
Business Loans [Member] | Substandard [Member]
Total loans	1,761	[3]	2,010	[3]
Business Loans [Member] | Nonaccrual [Member]
Total loans	868	[4]	1,007	[4]
Pass [Member]
Total loans	34,366	[1]	34,694	[1]
Special Mention [Member]
Total loans	2,060	[2]	2,413	[2]
Special mention loans considered pass by regulatory authorities	509		546
Substandard [Member]
Total loans	1,826	[3]	2,049	[3]
Nonaccrual [Member]
Total loans	$ 941	[4]	$ 1,080	[4]

[1] Includes all loans not included in the categories of special mention, substandard or nonaccrual.

[2] Special mention loans are accruing loans that have potential credit weaknesses that deserve management's close attention, such as loans to borrowers who may be experiencing financial difficulties that may result in deterioration of repayment prospects from the borrower at some future date. Included in the special mention category were $509 million and $546 million at June 30, 2011 and December 31, 2010, respectively, of loans proactively monitored by management that were considered "pass" by regulatory authorities.

[3] Substandard loans are accruing loans that have a well-defined weakness, or weaknesses, such as loans to borrowers who may be experiencing losses from operations or inadequate liquidity of a degree and duration that jeopardizes the orderly repayment of the loan. Substandard loans also are distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. This category is generally consistent with the "substandard" category as defined by regulatory authorities.

[4] Nonaccrual loans are loans for which the accrual of interest has been discontinued. For further information, refer to the Nonperforming Assets subheading in Note 1 - Summary of Significant Accounting Policies - on page 76 of the Corporation's Annual Report for the year ended December 31, 2010. This category is generally consistent with the "doubtful" category as defined by regulatory authorities.

[5] Primarily loans to real estate investors and developers.

[6] Primarily loans secured by owner-occupied real estate.

XML



Discontinued Operations (Net Income from Discontinued Operations) (Details) (USD $) In Millions, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Discontinued Operations
Income from discontinued operations before income taxes	$ 0	$ 0	$ 0	$ 27
Provision for income taxes				10
Net income from discontinued operations				$ 17
Earnings per common share from discontinued operations, Basic				$ 0.10
Earnings per common share from discontinued operations, Diluted				$ 0.10

XML



Net Income (Loss) per Common Share (Average Shares Excluded from Diluted Net Income (Loss) per Share Computations due to Exercise Price Higher than Market Price) (Details) (USD $) In Millions, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net Income (Loss) per Common Share
Average shares related to outstanding options	16.8	13.9	16.2	14.4
Range of exercise prices minimum	$ 36.24	$ 40.32	$ 36.24	$ 39.19
Range of exercise prices maximum	$ 64.50	$ 64.50	$ 64.50	$ 64.50

XML



Derivative and Credit-Related Financial Instruments (Schedule of Net Gains (Losses) Recognized in Income and OCI-Risk Management Derivatives-Cash Flow Hedges) (Details) (Risk Management Purposes [Member], Swaps - Cash Flow Hedge - Receive Fixed/Pay Floating [Member], USD $) In Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Risk Management Purposes [Member] | Swaps - Cash Flow Hedge - Receive Fixed/Pay Floating [Member]
Gain (loss) recognized in OCI (effective portion)	$ 1	$ (2)	$ 7
Gain (loss) recognized in other noninterest income (ineffective portion)		1	(3)
Gain reclassified from accumulated OCI into interest and fees on loans (effective portion)	$ 9	$ 1	$ 17

XML



Investment Securities

6 Months Ended

Jun. 30, 2011

Investment Securities

Investment Securities

NOTE 4 – INVESTMENT SECURITIES

A summary of the Corporation's investment securities available-for-sale follows:

(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2011
U.S. Treasury and other U.S. government agency securities	$	20	$	—	$	—	$	20
Residential mortgage-backed securities (a)		6,741		169		11		6,899
State and municipal securities (b)		32		—		6		26
Corporate debt securities:
Auction-rate debt securities		1		—		—		1
Other corporate debt securities		49		—		—		49
Equity and other non-debt securities:
Auction-rate preferred securities		467		2		32		437
Money market and other mutual funds		105		—		—		105
Total investment securities available-for-sale	$	7,415	$	171	$	49	$	7,537
December 31, 2010
U.S. Treasury and other U.S. government agency securities	$	131	$	—	$	—	$	131
Residential mortgage-backed securities (a)		6,653		95		39		6,709
State and municipal securities (b)		46		—		7		39
Corporate debt securities:
Auction-rate debt securities		1		—		—		1
Other corporate debt securities		26		—		—		26
Equity and other non-debt securities:
Auction-rate preferred securities		597		3		30		570
Money market and other mutual funds		84		—		—		84
Total investment securities available-for-sale	$	7,538	$	98	$	76	$	7,560

(a) Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

(b) Primarily auction-rate securities.

A summary of the Corporation's investment securities available-for-sale in an unrealized loss position as of June 30, 2011 and December 31, 2010 follows:

	Impaired
	Less than 12 months				12 months or more				Total
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2011
Residential mortgage-backed securities (a)	$	1,263	$	11	$	—	$	—	$	1,263	$	11
State and municipal securities (b)		—		—		25		6		25		6
Equity and other non-debt securities:
Auction-rate preferred securities		—		—		345		32		345		32
Total impaired securities	$	1,263	$	11	$	370	$	38	$	1,633	$	49
December 31, 2010
Residential mortgage-backed securities (a)	$	1,702	$	39	$	—	$	—	$	1,702	$	39
State and municipal securities (b)		—		—		38		7		38		7
Equity and other non-debt securities:
Auction-rate preferred securities		—		—		436		30		436		30
Total impaired securities	$	1,702	$	39	$	474	$	37	$	2,176	$	76

(a) Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

(b) Primarily auction-rate securities.

As of June 30, 2011, 94 percent of the Corporation's auction-rate portfolio was rated Aaa/AAA by the credit rating agencies.

At June 30, 2011, the Corporation had 208 securities in an unrealized loss position with no credit impairment, including 152 auction-rate preferred securities, 30 residential mortgage-backed securities and 26 state and municipal auction-rate securities. The unrealized losses for these securities resulted from changes in market interest rates and liquidity. The Corporation ultimately expects full collection of the carrying amount of these securities, does not intend to sell the securities in an unrealized loss position, and it is not more-likely-than-not that the Corporation will be required to sell the securities in an unrealized loss position prior to recovery of amortized cost. The Corporation does not consider these securities to be other-than-temporarily impaired at June 30, 2011.

Sales, calls and write-downs of investment securities available-for-sale resulted in the following gains and losses, recorded in "net securities gains" on the consolidated statements of income, computed based on the adjusted cost of the specific security.

	Six Months Ended June 30,
(in millions)	2011			2010
Securities gains	$	7		$	9
Securities losses		(1	)		(6	)
Total net securities gains	$	6		$	3

The table below summarizes the amortized cost and fair values of debt securities by contractual maturity. Securities with multiple maturity dates are classified in the period of final maturity. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(in millions)	Amortized		Fair
June 30, 2011	Cost		Value
Contractual maturity
Within one year	$	69	$	69
After one year through five years		466		473
After five years through ten years		55		56
After ten years		6,253		6,397
Subtotal		6,843		6,995
Equity and other nondebt securities:
Auction-rate preferred securities		467		437
Money market and other mutual funds		105		105
Total investment securities available-for-sale	$	7,415	$	7,537

Included in the contractual maturity distribution in the table above were auction-rate securities with a total amortized cost and fair value of $32 million and $26 million, respectively. Auction-rate securities are long-term, floating rate instruments for which interest rates are reset at periodic auctions. At each successful auction, the Corporation has the option to sell the security at par value. Additionally, the issuers of auction-rate securities generally have the right to redeem or refinance the debt. As a result, the expected life of auction-rate securities may differ significantly from the contractual life. Also included in the table above were residential mortgage-backed securities with a total amortized cost and fair value of $6,741 million and $6,899 million, respectively. The actual cash flows of mortgage-backed securities may differ from contractual maturity as the borrowers of the underlying loans may exercise prepayment options.

At June 30, 2011, investment securities with a carrying value of $2.3 billion were pledged where permitted or required by law to secure $1.7 billion of liabilities, primarily public and other deposits of state and local government agencies and derivative instruments.

XML



Business Segment Information

6 Months Ended

Jun. 30, 2011

Business Segment Information

Business Segment Information

NOTE 14 – BUSINESS SEGMENT INFORMATION

The Corporation has strategically aligned its operations into three major business segments: the Business Bank, the Retail Bank, and Wealth Management. These business segments are differentiated based on the type of customer and the related products and services provided. In addition to the three major business segments, the Finance Division is also reported as a segment. Business segment results are produced by the Corporation's internal management accounting system. This system measures financial results based on the internal business unit structure of the Corporation. Information presented is not necessarily comparable with similar information for any other financial institution. The management accounting system assigns balance sheet and income statement items to each business segment using certain methodologies, which are regularly reviewed and refined. For comparability purposes, amounts in all periods are based on business segments and methodologies in effect at June 30, 2011. These methodologies may be modified as the management accounting system is enhanced and changes occur in the organizational structure and/or product lines.

For a description of the business activities of each business segment and further information on the methodologies, which form the basis for these results, refer to Note 23 to the consolidated financial statements in the Corporation's 2010 Annual Report.

Business segment financial results for the six months ended June 30, 2011 and 2010 are shown in the following table.

(dollar amounts in millions) Six Months Ended June 30, 2011	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	682		$	282		$	92		$	(283	)	$	15		$	788
Provision for loan losses		24			47			23			—			2			96
Noninterest income		156			87			128			27			11			409
Noninterest expenses		316			325			155			6			22			824
Provision (benefit) for income taxes (FTE)		155			2			16			(98	)		3			78
Net income (loss)	$	343		$	(5	)	$	26		$	(164	)	$	(1	)	$	199
Net credit-related charge-offs	$	126		$	46		$	19		$	—		$	—		$	191
Selected average balances:
Assets	$	29,991		$	5,505		$	4,769		$	9,360		$	4,523		$	54,148
Loans		29,493			5,053			4,774			35			6			39,361
Deposits		20,241			17,549			2,889			244			118			41,041
Statistical data:
Return on average assets (a)		2.29	%		(0.06	)%		1.08	%		N/M			N/M			0.73	%
Net interest margin (b)		4.65			3.24			3.91			N/M			N/M			3.19
Efficiency ratio		37.78			87.81			72.87			N/M			N/M			69.19
Six Months Ended June 30, 2010	Business Bank			Retail Bank			Wealth Management			Finance			Other			Total
Earnings summary:
Net interest income (expense) (FTE)	$	692		$	265		$	87		$	(209	)	$	5		$	840
Provision for loan losses		219			52			31			—			(1	)		301
Noninterest income		152			86			122			26			2			388
Noninterest expenses		319			314			153			4			11			801
Provision (benefit) for income taxes (FTE)		83			(5	)		9			(71	)		5			21
Income from discontinued operations, net of tax		—			—			—			—			17			17
Net income (loss)	$	223		$	(10	)	$	16		$	(116	)	$	9		$	122
Net credit-related charge-offs	$	251		$	47		$	21		$	—		$	—		$	319
Selected average balances:
Assets	$	30,949		$	6,021		$	4,883		$	9,379		$	5,653		$	56,885
Loans		30,633			5,522			4,815			23			(3	)		40,990
Deposits		18,413			16,825			2,858			934			95			39,125
Statistical data:
Return on average assets (a)		1.44	%		(0.11	)%		0.67	%		N/M			N/M			0.43	%
Net interest margin (b)		4.55			3.17			3.64			N/M			N/M			3.23
Efficiency ratio		37.84			88.79			75.39			N/M			N/M			65.45

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

(b) Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.

FTE - Fully Taxable Equivalent

N/M - Not Meaningful

The Corporation's management accounting system also produces market segment results for the Corporation's four primary geographic markets: Midwest, Western, Texas and Florida. In addition to the four primary geographic markets, Other Markets and International are also reported as market segments. Market segment results are provided as supplemental information to the business segment results and may not meet all operating segment criteria as set forth in ASC Topic 280, Segment Reporting. For comparability purposes, amounts in all periods are based on market segments and methodologies in effect at June 30, 2011.

The Midwest market consists of operations located in the states of Michigan, Ohio and Illinois. Currently, Michigan operations represent the significant majority of the Midwest market.

The Western market consists of the states of California, Arizona, Nevada, Colorado and Washington. Currently, California operations represent the significant majority of the Western market.

The Texas and Florida markets consist of operations located in the states of Texas and Florida, respectively.

Other Markets include businesses with a national perspective, the Corporation's investment management and trust alliance businesses as well as activities in all other markets in which the Corporation has operations, except for the International market, as described below.

The International market represents the activity of the Corporation's international finance division, which provides banking services primarily to foreign-owned, North American-based companies and secondarily to international operations of North American-based companies.

The Finance & Other Businesses segment includes the Corporation's securities portfolio, asset and liability management activities, discontinued operations, the income and expense impact of equity and cash not assigned to specific business/market segments, tax benefits not assigned to specific business/market segments and miscellaneous other expenses of a corporate nature. This segment includes responsibility for managing the Corporation's funding, liquidity and capital needs, performing interest sensitivity analysis and executing various strategies to manage the Corporation's exposure to liquidity, interest rate risk and foreign exchange risk.

Market segment financial results for the six months ended June 30, 2011 and 2010 are shown in the following table.

(dollar amounts in millions) Six Months Ended June 30, 2011	Midwest			Western			Texas			Florida			Other Markets			International			Finance & Other Businesses			Total
Earnings summary:
Net interest income (expense) (FTE)	$	407		$	330		$	176		$	23		$	82		$	38		$	(268	)	$	788
Provision for loan losses		49			31			2			19			(2	)		(5	)		2			96
Noninterest income		200			74			48			7			24			18			38			409
Noninterest expenses		371			217			124			24			41			19			28			824
Provision (benefit) for income taxes (FTE)		72			55			36			(4	)		(1	)		15			(95	)		78
Net income (loss)	$	115		$	101		$	62		$	(9	)	$	68		$	27		$	(165	)	$	199
Net credit-related charge-offs	$	81		$	52		$	12		$	23		$	21		$	2		$	—		$	191
Selected average balances:
Assets	$	14,287		$	12,459		$	7,056		$	1,543		$	3,171		$	1,749		$	13,883		$	54,148
Loans		14,077			12,250			6,848			1,573			2,891			1,681			41			39,361
Deposits		18,273			12,347			5,982			382			2,375			1,320			362			41,041
Statistical data:
Return on average assets (a)		1.18	%		1.51	%		1.75	%		(1.11	)%		4.31	%		3.06	%		N/M			0.73	%
Net interest margin (b)		4.48			5.39			5.18			2.98			5.81			4.37			N/M			3.19
Efficiency ratio		61.14			53.77			55.27			78.79			41.42			33.87			N/M			69.19
Six Months Ended June 30, 2010	Midwest			Western			Texas			Florida			Other Markets			International			Finance & Other Businesses			Total
Earnings summary:
Net interest income (expense) (FTE)	$	415		$	325		$	160		$	21		$	86		$	37		$	(204	)	$	840
Provision for loan losses		114			86			16			19			75			(8	)		(1	)		301
Noninterest income		198			69			43			7			25			18			28			388
Noninterest expenses		366			215			125			21			43			16			15			801
Provision (benefit) for income taxes (FTE)		47			32			22			(4	)		(26	)		16			(66	)		21
Income from discontinued operations, net of tax		—			—			—			—			—			—			17			17
Net income (loss)	$	86		$	61		$	40		$	(8	)	$	19		$	31		$	(107	)	$	122
Net credit-related charge-offs	$	98		$	112		$	33		$	17		$	54		$	5		$	—		$	319
Selected average balances:
Assets	$	14,915		$	13,090		$	6,771		$	1,576		$	3,859		$	1,642		$	15,032		$	56,885
Loans		14,777			12,886			6,565			1,575			3,578			1,589			20			40,990
Deposits		17,526			11,939			5,137			382			2,099			1,013			1,029			39,125
Statistical data:
Return on average assets (a)		0.92	%		0.90	%		1.18	%		(1.00	)%		1.03	%		3.70	%		N/M			0.43	%
Net interest margin (b)		4.75			5.08			4.92			2.74			4.88			4.63			N/M			3.23
Efficiency ratio		59.37			54.74			61.44			74.63			40.96			29.81			N/M			65.45

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

(b) Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.

FTE - Fully Taxable Equivalent

N/M - Not Meaningful

XML



Derivative and Credit-Related Financial Instruments (Summary of Internally Classified Watch List Letters of Credit) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2011	Dec. 31, 2010
Derivative and Credit-Related Financial Instruments
Total watch list standby and commercial letters of credit	$ 233	$ 243
As a percentage of total outstanding standby and commercial letters of credit	4.30%	4.40%

XML



Derivative and Credit-Related Financial Instruments (Schedule of Net Gains Recognized in Income on Customer-Initiated Derivatives) (Details) (Customer-Initiated and Other Activities [Member], USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Total	$ 12	$ 15	$ 26	$ 27
Interest Rate Contracts [Member] | Other Noninterest Income [Member]
Total	2	4	8	7
Energy Derivative Contracts [Member] | Other Noninterest Income [Member]
Total	1	1	1	1
Foreign Exchange Contracts [Member] | Foreign Exchange Income [Member]
Total	$ 9	$ 10	$ 17	$ 19

XML



Fair Value Measurements (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Fair Value Measurements
ARS portfolio redeemed or sold since acquisition, percentage			61.00%
Underlying assets of funds, estimated liquidation period, years			15
Federal home loan bank stock	$ 92		$ 92		$ 128
Federal reserve bank stock	59		59		59
Significant transfers between Level 1 and Level 2 of the fair value hierarchy	0	0	0	0
Transfers into or out of Level 3 of the fair value hierarchy	$ 0	$ 0	$ 0	$ 0

XML



Accumulated Other Comprehensive Income (Loss) (Narrative) (Details) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Accumulated Other Comprehensive Income (Loss)
Total comprehensive income (loss)	$ 280	$ 218
Increase in total comprehensive income	62
Increase in net income	77
Decrease in net unrealized gains on investment securities available-for-sale, net of tax	$ 29

XML



Medium- and Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2011

Medium- and Long-Term Debt

Schedule of Medium- and Long-Term Debt

(in millions)	June 30, 2011		December 31, 2010
Parent company
Subordinated notes:
4.80% subordinated notes due 2015	$	337	$	337
Medium-term notes:
3.00% notes due 2015		298		298
Total parent company		635		635
Subsidiaries
Subordinated notes:
5.70% subordinated notes due 2014		279		280
5.75% subordinated notes due 2016		692		691
5.20% subordinated notes due 2017		572		568
8.375% subordinated notes due 2024		191		191
7.875% subordinated notes due 2026		215		213
Total subordinated notes		1,949		1,943
Medium-term notes:
Floating-rate based on LIBOR indices due 2011 to 2012		583		1,017
Federal Home Loan Bank advances:
Floating-rate based on LIBOR indices due 2011 to 2014		2,000		2,500
Other notes:
6.0% - 6.4% fixed-rate notes due 2020		39		43
Total subsidiaries		4,571		5,503
Total medium- and long-term debt	$	5,206	$	6,138

XML



Consolidated Statements of Changes in Shareholders' Equity (USD $) In Millions	Preferred Stock [Member]	Common Stock [Member]	Capital Surplus [Member]	Accumulated Other Comprehensive Loss [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Total
BALANCE at Dec. 31, 2009	$ 2,151	$ 894	$ 740	$ (336)	$ 5,161	$ (1,581)	$ 7,029
BALANCE (in shares) at Dec. 31, 2009		151.2
Net income					122		122
Other comprehensive income, net of tax				96			96
Total comprehensive income							218
Cash dividends declared on preferred stock					(38)		(38)
Cash dividends declared on common stock ($0.20 and $0.10 per share for the six months ended 2011 and 2010 respectively)					(18)		(18)
Purchase of common stock						(4)	(4)
Issuance of common stock		125	724				849
Issuance of common stock (in shares)		25.1
Redemption of preferred stock	(2,250)						(2,250)
Redemption discount accretion on preferred stock	94				(94)
Accretion of discount on preferred stock	5				(5)
Net issuance of common stock under employee stock plans			(5)		(4)	6	(3)
Share-based compensation			11				11
Other			(3)			1	(2)
BALANCE at Jun. 30, 2010		1,019	1,467	(240)	5,124	(1,578)	5,792
BALANCE (in shares) at Jun. 30, 2010		176.3
BALANCE at Dec. 31, 2010		1,019	1,481	(389)	5,247	(1,565)	5,793
BALANCE (in shares) at Dec. 31, 2010		176.5
Net income					199		199
Other comprehensive income, net of tax				81			81
Total comprehensive income							280
Cash dividends declared on common stock ($0.20 and $0.10 per share for the six months ended 2011 and 2010 respectively)					(35)		(35)
Purchase of common stock						(21)	(21)
Purchase of common stock (in shares)		(0.5)
Net issuance of common stock under employee stock plans			(30)		(16)	46
Net issuance of common stock under employee stock plans (in shares)		0.8
Share-based compensation			21				21
BALANCE at Jun. 30, 2011		$ 1,019	$ 1,472	$ (308)	$ 5,395	$ (1,540)	$ 6,038
BALANCE (in shares) at Jun. 30, 2011		176.8

XML



Discontinued Operations

6 Months Ended

Jun. 30, 2011

Discontinued Operations

Discontinued Operations

NOTE 15 – DISCONTINUED OPERATIONS

In December 2006, the Corporation sold its ownership interest in Munder Capital Management (Munder), an investment advisory subsidiary, to an investor group. The sale agreement included an interest-bearing contingent note.

In the first quarter 2010, the Corporation and the investor group that acquired Munder negotiated a cash settlement of the note receivable for $35 million, which resulted in a $27 million gain ($17 million, after tax), recorded in "income from discontinued operations, net of tax" on the consolidated statements of income. The settlement paid the note in full and concluded the Corporation's financial arrangements with Munder.

The components of net income from discontinued operations for the six-month period ended June 30, 2010 are shown in the following table. There was no income from discontinued operations for the three-month periods ended June 30, 2011 and 2010 or the six-month period ended June 30, 2011.

(in millions, except per share data)	Six Months Ended June 30, 2010
Income from discontinued operations before income taxes	$	27
Provision for income taxes		10
Net income from discontinued operations	$	17
Earnings per common share from discontinued operations:
Basic	$	0.10
Diluted		0.10

XML



Fair Value Measurements (Carrying Amount and Estimated Fair Value of Financial Instruments Not Recorded at Fair Value) (Details) (USD $) In Millions				6 Months Ended		12 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010	Jun. 30, 2011 Carrying Amount [Member]		Dec. 31, 2010 Carrying Amount [Member]		Jun. 30, 2011 Estimated Fair Value [Member]		Dec. 31, 2010 Estimated Fair Value [Member]
Cash and due from banks	$ 987	$ 668	$ 816	$ 987		$ 668		$ 987		$ 668
Interest-bearing deposits with banks	2,479	1,415	3,409	2,479		1,415		2,479		1,415
Loans held-for-sale				20		23		20		23
Total loans, net of allowance for loan losses	38,387	39,335	39,635	38,387	[1]	39,335	[1]	38,456	[1]	39,212	[1]
Customers' liability on acceptances outstanding	10	9	24	10		9		10		9
Nonmarketable equity securities				16	[2]	47	[2]	28	[2]	77	[2]
Loan servicing rights				4		5		4		5
Demand deposits (noninterest-bearing)	16,344	15,538	15,769	16,344		15,538		16,344		15,538
Interest-bearing deposits	25,414	24,933	24,011	25,414		24,933		25,423		24,945
Total deposits	41,758	40,471	39,780	41,758		40,471		41,767		40,483
Short-term borrowings	67	130	200	67		130		67		130
Acceptances outstanding	10	9	24	10		9		10		9
Medium- and long-term debt	5,206	6,138	9,041	5,206		6,138		5,129		6,008
Credit-related financial instruments				(93)		(99)		(93)		(99)
Fair value assets measured on nonrecurring basis impaired loans	736	854
Fair value assets measured on nonrecurring basis nonmarketable equity securities	$ 2	$ 9

[1] Included $736 million and $854 million of impaired loans recorded at fair value on a nonrecurring basis at June 30, 2011 and December 31, 2010, respectively.

[2] Included $2 million and $9 million of nonmarketable equity securities recorded at fair value on a nonrecurring basis at June 30, 2011 and December 31, 2010, respectively.

XML



Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

(in millions)	Total		Level 1		Level 2		Level 3
June 30, 2011
Trading securities:
Deferred compensation plan assets	$	90	$	90	$	—	$	—
Residential mortgage-backed securities (a)		5		—		5		—
State and municipal securities		8		—		6		2
Corporate debt securities		1		—		1		—
Total trading securities		104		90		12		2
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities		20		20		—		—
Residential mortgage-backed securities (a)		6,899		—		6,899		—
State and municipal securities (b)		26		—		—		26
Corporate debt securities:
Auction-rate debt securities		1		—		—		1
Other corporate debt securities		49		—		48		1
Equity and other non-debt securities:
Auction-rate preferred securities		437		—		—		437
Money market and other mutual funds		105		105		—		—
Total investment securities available-for-sale		7,537		125		6,947		465
Derivative assets:
Interest rate contracts		513		—		513		—
Energy derivative contracts		100		—		100		—
Foreign exchange contracts		47		—		47		—
Warrants		8		—		—		8
Total derivative assets		668		—		660		8
Total assets at fair value	$	8,309	$	215	$	7,619	$	475
Derivative liabilities:
Interest rate contracts	$	223	$	—	$	223	$	—
Energy derivative contracts		100		—		100		—
Foreign exchange contracts		40		—		40		—
Other		1		—		—		1
Total derivative liabilities		364		—		363		1
Deferred compensation plan liabilities		90		90		—		—
Total liabilities at fair value	$	454	$	90	$	363	$	1

(a) Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

(b) Primarily auction-rate securities.

(in millions)	Total		Level 1		Level 2		Level 3
December 31, 2010
Trading securities:
Deferred compensation plan assets	$	86	$	86	$	—	$	—
Residential mortgage-backed securities (a)		7		—		7		—
Other government-sponsored enterprise securities		1		—		1		—
State and municipal securities		19		—		19		—
Corporate debt securities		4		—		4		—
Other securities		1		—		—		1
Total trading securities		118		86		31		1
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities		131		131		—		—
Residential mortgage-backed securities (a)		6,709		—		6,709		—
State and municipal securities (b)		39		—		—		39
Corporate debt securities:
Auction-rate debt securities		1		—		—		1
Other corporate debt securities		26		—		25		1
Equity and other non-debt securities:
Auction-rate preferred securities		570		—		—		570
Money market and other mutual funds		84		84		—		—
Total investment securities available-for-sale		7,560		215		6,734		611
Derivative assets:
Interest rate contracts		542		—		542		—
Energy derivative contracts		103		—		103		—
Foreign exchange contracts		51		—		51		—
Warrants		7		—		—		7
Total derivative assets		703		—		696		7
Total assets at fair value	$	8,381	$	301	$	7,461	$	619
Derivative liabilities:
Interest rate contracts	$	249	$	—	$	249	$	—
Energy derivative contracts		103		—		103		—
Foreign exchange contracts		48		—		48		—
Other		1		—		—		1
Total derivative liabilities		401		—		400		1
Deferred compensation plan liabilities		86		86		—		—
Total liabilities at fair value	$	487	$	86	$	400	$	1

(a) Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

(b) Primarily auction-rate securities.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

			Net Realized/Unrealized Gains (Losses)
	Balance at Beginning  of Period		Recorded in Earnings						Recorded in  Other Comprehensive Income (Pre- tax)											Balance at End of  Period
(in millions)			Realized			Unrealized						Purchases		Sales			Settlements
Three months ended June 30, 2011
Trading securities:
State and municipal securities	$	—	$	—		$	—		$	—		$	2	$	—		$	—		$	2
Investment securities available-for-sale:
State and municipal securities (a)		26		—			—			—			—		—			—			26
Auction-rate debt securities		1		—			—			—			—		—			—			1
Other corporate debt securities		1		—			—			—			—		—			—			1
Auction-rate preferred securities		504		4			—			8			—		(79	)		—			437
Total investment securities available-for-sale		532		4			—			8			—		(79	)		—			465
Derivative assets:
Warrants		8		5			—			—			—		(5	)		—			8
Derivative liabilities:
Other		2		—			—			—			—		—			(1	)		1
Three months ended June 30, 2010
Trading securities:
State and municipal securities	$	—	$	—		$	—		$	—		$	3	$	—		$	—		$	3
Investment securities available-for-sale:
State and municipal securities (a)		45		—			—			(3	)		—		—			—			42
Auction-rate debt securities		144		2			—			9			—		(103	)		—			52
Other corporate debt securities		1		—			—			—			—		—			—			1
Auction-rate preferred securities		663		3			—			(9	)		—		(48	)		—			609
Total investment securities available-for-sale		853		5			—			(3	)		—		(151	)		—			704
Derivative assets:
Warrants		7		—			1			—			—		(1	)		—			7
Derivative liabilities:
Other		—		(1	)		(2	)		—			—		—			(1	)		2

(a) Primarily auction-rate securities

			Net Realized/Unrealized Gains (Losses)
	Balance at Beginning of Period		Recorded in Earnings						Recorded in Other Comprehensive Income (Pre-tax)											Balance at End of Period
(in millions)			Realized			Unrealized						Purchases		Sales			Settlements
Six months ended June 30, 2011
Trading securities:
State and municipal securities	$	—	$	—		$	—		$	—		$	2	$	—		$	—		$	2
Other securities		1		—			—			—			—		(1	)		—			—
Total trading securities		1		—			—			—			2		(1	)		—			2
Investment securities available-for-sale:
State and municipal securities (a)		39		—			—			—			—		(13	)		—			26
Auction-rate debt securities		1		—			—			—			—		—			—			1
Other corporate debt securities		1		—			—			—			—		—			—			1
Auction-rate preferred securities		570		7			—			(3	)		—		(137	)		—			437
Total investment securities available-for-sale		611		7			—			(3	)		—		(150	)		(0	)		465
Derivative assets:
Warrants		7		7			1			—			—		(7	)		—			8
Derivative liabilities:
Other		1		—			(1	)		—			—		—			(1	)		1
Six months ended June 30, 2010
Trading securities:
State and municipal securities	$	—	$	—		$	—		$	—		$	3	$	—		$	—		$	3
Investment securities available-for-sale:
State and municipal securities (a)		46		—			—			(4	)		—		—			—			42
Auction-rate debt securities		150		2			—			4			—		(104	)		—			52
Other corporate debt securities		7		27			—			—			—		—			(33	)		1
Auction-rate preferred securities		706		5			—			(8	)		—		(94	)		—			609
Total investment securities available-for-sale		909		34			—			(8	)		—		(198	)		(33	)		704
Derivative assets:
Warrants		7		2			1			—			—		(3	)		—			7
Derivative liabilities:
Other		—		(1	)		(2	)		—			—		—			(1	)		2

(a) Primarily auction-rate securities

Location in Earnings of Realized and Unrealized Gains and Losses Due to Changes in Fair Value of Level 3 Assets and Liabilities

	Net Securities Gains (Losses)						Other Noninterest Income				Discontinued Operations		Total
(in millions)	Realized			Unrealized			Realized		Unrealized		Realized		Realized			Unrealized
Three months ended June 30, 2011
Investment securities available-for-sale:
Auction-rate preferred securities	$	4		$	—		$	—	$	—	$	—	$	4		$	—
Derivative assets:
Warrants		—			—			5		—		—		5			—
Three months ended June 30, 2010
Investment securities available-for-sale:
Auction-rate debt securities	$	2		$	—		$	—	$	—	$	—	$	2		$	—
Auction-rate preferred securities		3			—			—		—		—		3			—
Total investment securities available-for-sale		5			—			—		—		—		5			—
Derivative assets:
Warrants		—			—			—		1		—		—			1
Derivative liabilities:
Other		(1	)		(2	)		—		—		—		(1	)		(2	)
Six months ended June 30, 2011
Investment securities available-for-sale:
Auction-rate preferred securities	$	7		$	—		$	—	$	—	$	—	$	7		$	—
Derivative assets:
Warrants		—			—			7		1		—		7			1
Derivative liabilities:
Other		—			(1	)		—		—		—		—			(1	)
Six months ended June 30, 2010
Investment securities available-for-sale:
Auction-rate debt securities	$	2		$	—		$	—	$	—	$	—	$	2		$	—
Other corporate debt securities		—			—			—		—		27		27			—
Auction-rate preferred securities		5			—			—		—		—		5			—
Total investment securities available-for-sale		7			—			—		—		27		34			—
Derivative assets:
Warrants		—			—			2		1		—		2			1
Derivative liabilities:
Other		(1	)		(2	)		—		—		—		(1	)		(2	)

(a) Primarily auction-rate securities

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

(in millions)	Total		Level 2		Level 3
June 30, 2011
Loans held-for-sale:
Residential mortgage	$	7	$	7	$	—
Loans:
Commercial		221		—		221
Real estate construction		129		—		129
Commercial mortgage		363		—		363
Residential mortgage		10		—		10
Lease financing		6		—		6
International		7		—		7
Total loans		736		—		736
Nonmarketable equity securities		2		—		2
Other real estate		26		—		26
Loan servicing rights		4		—		4
Total assets at fair value	$	775	$	7	$	768
Total liabilities at fair value	$	—	$	—	$	—
December 31, 2010
Loans held-for-sale:
Residential mortgage	$	6	$	6	$	—
Loans:
Commercial		200		—		200
Real estate construction		247		—		247
Commercial mortgage		398		—		398
Lease financing		7		—		7
International		2		—		2
Total loans		854		—		854
Nonmarketable equity securities		9		—		9
Other real estate		33		—		33
Loan servicing rights		5		—		5
Total assets at fair value	$	907	$	6	$	901
Total liabilities at fair value	$	—	$	—	$	—

Estimated Fair Values of Financial Instruments not Recorded at Fair Value in Their Entirety on a Recurring Basis

	June 30, 2011						December 31, 2010
(in millions)	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
Assets
Cash and due from banks	$	987		$	987		$	668		$	668
Interest-bearing deposits with banks		2,479			2,479			1,415			1,415
Loans held-for-sale		20			20			23			23
Total loans, net of allowance for loan losses (a)		38,387			38,456			39,335			39,212
Customers' liability on acceptances outstanding		10			10			9			9
Nonmarketable equity securities (b)		16			28			47			77
Loan servicing rights		4			4			5			5
Liabilities
Demand deposits (noninterest-bearing)		16,344			16,344			15,538			15,538
Interest-bearing deposits		25,414			25,423			24,933			24,945
Total deposits		41,758			41,767			40,471			40,483
Short-term borrowings		67			67			130			130
Acceptances outstanding		10			10			9			9
Medium- and long-term debt		5,206			5,129			6,138			6,008
Credit-related financial instruments		(93	)		(93	)		(99	)		(99	)

(a) Included $736 million and $854 million of impaired loans recorded at fair value on a nonrecurring basis at June 30, 2011 and December 31, 2010, respectively.

(b) Included $2 million and $9 million of nonmarketable equity securities recorded at fair value on a nonrecurring basis at June 30, 2011 and December 31, 2010, respectively.

XML



Net Income (Loss) per Common Share (Narrative) (Details) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Shares excluded from computation of diluted net loss per share	16.8	13.9	16.2	14.4
Options [Member]
Shares excluded from computation of diluted net loss per share				5.1
Warrant to Purchase Shares [Member]
Shares excluded from computation of diluted net loss per share				11.5

XML



Medium- and Long-Term Debt (Narrative) (Details) (USD $) In Billions	Jun. 30, 2011
Medium- and Long-Term Debt
Blanket lien, real-estate related loans	$ 15

XML



Consolidated Statements of Cash Flows (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
OPERATING ACTIVITIES
Net income	$ 199	$ 122
Income from discontinued operations, net of tax		17
Income from continuing operations, net of tax	199	105
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	96	301
Provision for credit losses on lending-related commitments	(5)	7
Provision for deferred income taxes	23	1
Depreciation and software amortization	59	62
Share-based compensation expense	21	11
Net amortization of securities	12	8
Net securities gains	(6)	(3)
Excess tax benefits from share-based compensation arrangements	(1)	(1)
Net decrease in trading securities	14	5
Net decrease (increase) in loans held-for-sale	3	(1)
Net decrease in accrued income receivable	5	9
Net decrease in accrued expenses	(40)	(9)
Other, net	82	228
Discontinued operations, net		17
Net cash provided by operating activities	462	740
INVESTING ACTIVITIES
Proceeds from maturities and redemptions of investment securities available-for-sale	1,031	681
Proceeds from sales of investment securities available-for-sale	5	209
Purchases of investment securities available-for-sale	(1,028)	(521)
Proceeds from sales of indirect private equity and venture capital funds	33
Net decrease in loans	822	1,200
Net increase in fixed assets	(57)	(36)
Net increase in customers' liability on acceptances outstanding	(1)	(13)
Sales of Federal Home Loan Bank stock	36	41
Net cash provided by investing activities	841	1,561
FINANCING ACTIVITIES
Net increase in deposits	1,134	126
Net decrease in short-term borrowings	(63)	(262)
Net increase in acceptances outstanding	1	13
Repayments of medium- and long-term debt	(940)	(2,116)
Proceeds from issuance of common stock		849
Redemption of preferred stock		(2,250)
Proceeds from issuance of common stock under employee stock plans	3	4
Excess tax benefits from share-based compensation arrangements	1	1
Purchase of common stock for treasury	(21)	(4)
Dividends paid on common stock	(35)	(16)
Dividends paid on preferred stock		(38)
Net cash provided by (used in) financing activities	80	(3,693)
Net increase (decrease) in cash and cash equivalents	1,383	(1,392)
Cash and cash equivalents at beginning of period	2,083	5,617
Cash and cash equivalents at end of period	3,466	4,225
Interest paid	76	125
Income taxes, tax deposits and tax-related interest paid	47	19
Noncash investing and financing activities:
Loans transferred to other real estate	30	41
Pending settlement of matured investment securities available-for-sale	$ 110

XML



Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2011

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

NOTE 9 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) includes the change in net unrealized gains and losses on investment securities available-for-sale, the change in accumulated net gains and losses on cash flow hedges and the change in the accumulated defined benefit and other postretirement plans adjustment. Total comprehensive income was $280 million and $218 million for the six months ended June 30, 2011 and 2010, respectively. The $62 million increase in total comprehensive income for the six months ended June 30, 2011, when compared to the same period in the prior year, resulted primarily from a $77 million increase in net income, partially offset by a $29 million after-tax decrease in net unrealized gains on investment securities available-for-sale. The following table presents reconciliations of the components of accumulated other comprehensive income (loss) for the six months ended June 30, 2011 and 2010.

	Six Months Ended June 30,
(in millions)	2011			2010
Accumulated net unrealized gains on investment securities available-for-sale:
Balance at beginning of period, net of tax	$	14		$	11
Net unrealized holding gains arising during the period		106			149
Less: Reclassification adjustment for net gains included in net income		6			3
Change in net unrealized gains before income taxes		100			146
Less: Provision for income taxes		37			54
Change in net unrealized gains on investment securities available-for-sale, net of tax		63			92
Balance at end of period, net of tax	$	77		$	103
Accumulated net gains on cash flow hedges:
Balance at beginning of period, net of tax	$	2		$	18
Net cash flow hedge gains (losses) arising during the period		(2	)		7
Less: Reclassification adjustment for net gains included in net income		1			17
Change in net cash flow hedge gains (losses) before income taxes		(3	)		(10	)
Less: Provision (benefit) for income taxes		(1	)		(4	)
Change in net cash flow hedge gains, net of tax		(2	)		(6	)
Balance at end of period, net of tax	$	—		$	12
Accumulated defined benefit pension and other postretirement plans adjustment:
Balance at beginning of period, net of tax	$	(405	)	$	(365	)
Net defined benefit pension and other postretirement adjustment arising during the period		7			—
Less: Adjustment for amounts recognized as components of net periodic benefit cost during the period		(24	)		(16	)
Change in defined benefit pension and other postretirement plans adjustment before income taxes		31			16
Less: Provision for income taxes		11			6
Change in defined benefit pension and other postretirement plans adjustment, net of tax		20			10
Balance at end of period, net of tax	$	(385	)	$	(355	)
Total accumulated other comprehensive loss at end of period, net of tax	$	(308	)	$	(240	)

XML



Credit Quality and Allowance for Credit Losses (Average Individually Evaluated Impaired Loans and the Related Interest) (Details) (USD $) In Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010		Jun. 30, 2011		Jun. 30, 2010
Average Impaired Loans for the Period	$ 879		$ 967		$ 910		$ 973
Interest Income Recognized for the Period	6		6		8		7
Business Loans [Member]
Average Impaired Loans for the Period	831		934		863		943
Interest Income Recognized for the Period	6		6		8		7
Business Loans [Member] | Real Estate Construction [Member]
Average Impaired Loans for the Period	160		342		190		392
Interest Income Recognized for the Period			1				1
Business Loans [Member] | Real Estate Construction [Member] | Commercial Real Estate Business Line [Member]
Average Impaired Loans for the Period	159	[1]	339	[1]	189	[1]	390	[1]
Interest Income Recognized for the Period			1	[1]			1	[1]
Business Loans [Member] | Real Estate Construction [Member] | Other Business Lines [Member]
Average Impaired Loans for the Period	1	[2]	3	[2]	1	[2]	2	[2]
Business Loans [Member] | Commercial Mortgage [Member]
Average Impaired Loans for the Period	416		363		418		319
Interest Income Recognized for the Period	2		2		3		2
Business Loans [Member] | Commercial Mortgage [Member] | Commercial Real Estate Business Line [Member]
Average Impaired Loans for the Period	192	[1]	151	[1]	187	[1]	144	[1]
Interest Income Recognized for the Period	1	[1]	1	[1]	1	[1]	1	[1]
Business Loans [Member] | Commercial Mortgage [Member] | Other Business Lines [Member]
Average Impaired Loans for the Period	224	[2]	212	[2]	231	[2]	175	[2]
Interest Income Recognized for the Period	1	[2]	1	[2]	2	[2]	1	[2]
Business Loans [Member] | Lease Financing Loan [Member]
Average Impaired Loans for the Period	7		11		7		12
Business Loans [Member] | International Loan [Member]
Average Impaired Loans for the Period	6		5		4		14
Interest Income Recognized for the Period							1
Business Loans [Member] | Commercial Loan [Member]
Average Impaired Loans for the Period	242		213		244		206
Interest Income Recognized for the Period	4		3		5		3
Retail Loans [Member]
Average Impaired Loans for the Period	48		33		47		30
Retail Loans [Member] | Residential Mortgage Loan [Member]
Average Impaired Loans for the Period	41		31		39		28
Retail Loans [Member] | Other Consumer [Member]
Average Impaired Loans for the Period	$ 7		$ 2		$ 8		$ 2

[1] Primarily loans to real estate investors and developers.

[2] Primarily loans secured by owner-occupied real estate.

XML



Derivative and Credit-Related Financial Instruments (Schedule of Derivative Instruments) (Details) (USD $) In Millions	Jun. 30, 2011		Dec. 31, 2010
Notional/Contract Amount	$ 17,715	[1]	$ 18,260	[1]
Fair Value of Asset Derivatives	660	[2]	696	[2]
Fair Value of Liability Derivatives	363	[2]	400	[2]
Derivative Credit Valuation Adjustment For Counterparty Credit Risk	4		5
Risk Management Purposes [Member]
Notional/Contract Amount	1,836	[1]	2,620	[1]
Fair Value of Asset Derivatives	263	[2]	268	[2]
Fair Value of Liability Derivatives	1	[2]
Risk Management Purposes [Member] | Derivatives Used As Economic Hedges [Member] | Foreign Exchange Contracts [Member] | Spot, Forward and Swaps [Member]
Notional/Contract Amount	386	[1]	220	[1]
Fair Value of Asset Derivatives	2	[2]	2	[2]
Fair Value of Liability Derivatives	1	[2]
Risk Management Purposes [Member] | Swaps - Cash Flow Hedge - Receive Fixed/Pay Floating [Member] | Interest Rate Contracts [Member] | Derivatives Designated as Hedging Instruments [Member]
Notional/Contract Amount			800	[1]
Fair Value of Asset Derivatives			3	[2]
Risk Management Purposes [Member] | Swaps - Fair Value Hedge - Receive Fixed/Pay Floating [Member] | Interest Rate Contracts [Member] | Derivatives Designated as Hedging Instruments [Member]
Notional/Contract Amount	1,450	[1]	1,600	[1]
Fair Value of Asset Derivatives	261	[2]	263	[2]
Risk Management Purposes [Member] | Interest Rate Contracts [Member] | Derivatives Designated as Hedging Instruments [Member]
Notional/Contract Amount	1,450	[1]	2,400	[1]
Fair Value of Asset Derivatives	261	[2]	266	[2]
Customer-Initiated and Other Activities [Member]
Notional/Contract Amount	15,879	[1]	15,640	[1]
Fair Value of Asset Derivatives	397	[2]	428	[2]
Fair Value of Liability Derivatives	362	[2]	400	[2]
Customer-Initiated and Other Activities [Member] | Caps and Floors Written [Member] | Interest Rate Contracts [Member]
Notional/Contract Amount	553	[1]	697	[1]
Fair Value of Liability Derivatives	5	[2]	7	[2]
Customer-Initiated and Other Activities [Member] | Caps and Floors Written [Member] | Energy Derivative Contracts [Member]
Notional/Contract Amount	1,254	[1]	1,106	[1]
Fair Value of Liability Derivatives	71	[2]	62	[2]
Customer-Initiated and Other Activities [Member] | Caps and Floors Purchased [Member] | Interest Rate Contracts [Member]
Notional/Contract Amount	553	[1]	697	[1]
Fair Value of Asset Derivatives	5	[2]	7	[2]
Customer-Initiated and Other Activities [Member] | Caps and Floors Purchased [Member] | Energy Derivative Contracts [Member]
Notional/Contract Amount	1,254	[1]	1,106	[1]
Fair Value of Asset Derivatives	71	[2]	62	[2]
Customer-Initiated and Other Activities [Member] | Swaps [Member] | Interest Rate Contracts [Member]
Notional/Contract Amount	9,231	[1]	9,126	[1]
Fair Value of Asset Derivatives	247	[2]	269	[2]
Fair Value of Liability Derivatives	218	[2]	242	[2]
Customer-Initiated and Other Activities [Member] | Swaps [Member] | Energy Derivative Contracts [Member]
Notional/Contract Amount	413	[1]	411	[1]
Fair Value of Asset Derivatives	29	[2]	41	[2]
Fair Value of Liability Derivatives	29	[2]	41	[2]
Customer-Initiated and Other Activities [Member] | Interest Rate Contracts [Member]
Notional/Contract Amount	10,337	[1]	10,520	[1]
Fair Value of Asset Derivatives	252	[2]	276	[2]
Fair Value of Liability Derivatives	223	[2]	249	[2]
Customer-Initiated and Other Activities [Member] | Energy Derivative Contracts [Member]
Notional/Contract Amount	2,921	[1]	2,623	[1]
Fair Value of Asset Derivatives	100	[2]	103	[2]
Fair Value of Liability Derivatives	100	[2]	103	[2]
Customer-Initiated and Other Activities [Member] | Foreign Exchange Contracts [Member] | Spot, Forwards, Futures, Options and Swaps [Member]
Notional/Contract Amount	2,621	[1]	2,497	[1]
Fair Value of Asset Derivatives	45	[2]	49	[2]
Fair Value of Liability Derivatives	$ 39	[2]	$ 48	[2]

[1] Notional or contract amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets.

[2] Asset derivatives are included in "accrued income and other assets" and liability derivatives are included in "accrued expenses and other liabilities" on the consolidated balance sheets. Included in the fair value of derivative assets and liabilities are credit valuation adjustments reflecting counterparty credit risk and credit risk of the Corporation. The fair value of derivative assets included credit valuation adjustments for counterparty credit risk totaling $4 million and $5 million at June 30, 2011 and December 31, 2010, respectively.

XML



Medium- and Long-Term Debt (Schedule of Medium- and Long-Term Debt) (Details) (USD $) In Millions, unless otherwise specified				6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010	Jun. 30, 2011 4.80% Subordinated Note Due 2015 [Member] Parent Company [Member]	Dec. 31, 2010 4.80% Subordinated Note Due 2015 [Member] Parent Company [Member]	Jun. 30, 2011 3.00% Notes Due 2015 [Member] Parent Company [Member]	Dec. 31, 2010 3.00% Notes Due 2015 [Member] Parent Company [Member]	Jun. 30, 2011 5.70% Subordinated Note Due 2014 [Member] Subsidiaries [Member]	Dec. 31, 2010 5.70% Subordinated Note Due 2014 [Member] Subsidiaries [Member]	Jun. 30, 2011 5.75% Subordinated Notes Due 2016 [Member] Subsidiaries [Member]	Dec. 31, 2010 5.75% Subordinated Notes Due 2016 [Member] Subsidiaries [Member]	Jun. 30, 2011 5.20% Subordinated Notes Due 2017 [Member] Subsidiaries [Member]	Dec. 31, 2010 5.20% Subordinated Notes Due 2017 [Member] Subsidiaries [Member]	Jun. 30, 2011 8.375% Subordinated Note Due 2024 [Member] Subsidiaries [Member]	Dec. 31, 2010 8.375% Subordinated Note Due 2024 [Member] Subsidiaries [Member]	Jun. 30, 2011 7.875% Subordinated Note Due 2026 [Member] Subsidiaries [Member]	Dec. 31, 2010 7.875% Subordinated Note Due 2026 [Member] Subsidiaries [Member]	Jun. 30, 2011 Floating Rate Based on LIBOR Indices Due 2011 to 2012 [Member] Subsidiaries [Member]	Dec. 31, 2010 Floating Rate Based on LIBOR Indices Due 2011 to 2012 [Member] Subsidiaries [Member]	Jun. 30, 2011 Floating Rate Based on LIBOR Indices Due 2011 to 2014 [Member] Subsidiaries [Member]	Dec. 31, 2010 Floating Rate Based on LIBOR Indices Due 2011 to 2014 [Member] Subsidiaries [Member]	Jun. 30, 2011 6.0% - 6.4% Fixed-Rate Notes Due 2020 [Member] Subsidiaries [Member]	Dec. 31, 2010 6.0% - 6.4% Fixed-Rate Notes Due 2020 [Member] Subsidiaries [Member]	Jun. 30, 2011 Parent Company [Member]	Dec. 31, 2010 Parent Company [Member]	Jun. 30, 2011 Subsidiaries [Member]	Dec. 31, 2010 Subsidiaries [Member]
Total subordinated notes				$ 337	$ 337			$ 279	$ 280	$ 692	$ 691	$ 572	$ 568	$ 191	$ 191	$ 215	$ 213									$ 1,949	$ 1,943
Medium-term notes						298	298											583	1,017
Federal Home Loan Bank advances																				2,000	2,500
Other notes																						39	43
Total medium and long-term debt	$ 5,206	$ 6,138	$ 9,041																					$ 635	$ 635	$ 4,571	$ 5,503
Interest rate				4.80%		3.00%		5.70%		5.75%		5.20%		8.375%		7.875%
Maturity date				Dec. 31, 2015		Dec. 31, 2015		Dec. 31, 2014		Dec. 31, 2016		Dec. 31, 2017		Dec. 31, 2024		Dec. 31, 2026						Dec. 31, 2020
Maturity date range, start																		2011		2011
Maturity date range, end																		2012		2014
Interest rate minimum																						6.0
Interest rate maximum																						6.4

XML



Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2011

Discontinued Operations

Net Income from Discontinued Operations

(in millions, except per share data)	Six Months Ended June 30, 2010
Income from discontinued operations before income taxes	$	27
Provision for income taxes		10
Net income from discontinued operations	$	17
Earnings per common share from discontinued operations:
Basic	$	0.10
Diluted		0.10

XML



Contingent Liabilities

6 Months Ended

Jun. 30, 2011

Contingent Liabilities

Contingent Liabilities

NOTE 13 – CONTINGENT LIABILITIES

Legal Proceedings

The Corporation and certain of its subsidiaries are subject to various pending or threatened legal proceedings arising out of the normal course of business or operations. The Corporation believes it has meritorious defenses to the claims asserted against it in its currently outstanding legal proceedings and, with respect to such legal proceedings, intends to continue to defend itself vigorously, litigating or settling cases according to management's judgment as to what is in the best interests of the Corporation and its shareholders. On at least a quarterly basis, the Corporation assesses its liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. On a case-by-case basis, reserves are established for those legal claims for which it is probable that a loss will be incurred and the amount of such loss can be reasonably estimated. The actual costs of resolving these claims may be substantially higher or lower than the amounts reserved. Litigation-related expense of $3 million and $1 million were included in "litigation and operational losses" on the consolidated statements of income for the six months ended June 30, 2011 and 2010, respectively. Based on current knowledge, and after consultation with legal counsel, management believes that current reserves are adequate, and the amount of any incremental liability arising from these matters is not expected to have a material adverse effect on the Corporation's consolidated financial condition, consolidated results of operations or consolidated cash flows. However, in the event of significant unexpected future developments on existing cases, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to the Corporation's consolidated financial condition, consolidated results of operations or consolidated cash flows.

For other matters, where a loss is not probable, the Corporation has not established legal reserves. In determining whether it is possible to provide an estimate of loss or range of possible loss, the Corporation reviews and evaluates its material litigation on an ongoing basis, in conjunction with legal counsel, in light of potentially relevant factual and legal developments. Based on current knowledge, expectation of future earnings, and after consultation with legal counsel, management believes the maximum amount of reasonably possible losses would not have a material adverse effect on the Corporation's consolidated financial condition, consolidated results of operations or consolidated cash flows. However, in the event of unexpected future developments, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to the Corporations consolidated financial condition, consolidated results of operations or consolidated cash flows.

The damages alleged by plaintiffs or claimants may be overstated, unsubstantiated by legal theory, unsupported by the facts, and/or bear no relation to the ultimate award that a court, jury or agency might impose. In view of the inherent difficulty of predicting the outcome of such matters, the Corporation cannot state with confidence a range of reasonably possible losses, nor what the eventual outcome of these matters will be. However, based on current knowledge and after consultation with legal counsel, management believes the maximum amount of reasonably possible losses would not have a material adverse effect on the Corporation's consolidated financial condition.

For information regarding income tax contingencies, refer to Note 12.

XML



Consolidated Balance Sheets (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010
ASSETS
Cash and due from banks	$ 987	$ 668	$ 816
Interest-bearing deposits with banks	2,479	1,415	3,409
Other short-term investments	124	141	134
Investment securities available-for-sale	7,537	7,560	7,188
Commercial loans	22,052	22,145	21,151
Real estate construction loans	1,728	2,253	2,774
Commercial mortgage loans	9,579	9,767	10,318
Residential mortgage loans	1,491	1,619	1,606
Consumer loans	2,232	2,311	2,443
Lease financing	949	1,009	1,084
International loans	1,162	1,132	1,226
Total loans	39,193	40,236	40,602
Less allowance for loan losses	(806)	(901)	(967)
Net loans	38,387	39,335	39,635
Premises and equipment	641	630	634
Customers' liability on acceptances outstanding	10	9	24
Accrued income and other assets	3,976	3,909	4,045
Total assets	54,141	53,667	55,885
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	16,344	15,538	15,769
Money market and NOW deposits	18,033	17,622	16,062
Savings deposits	1,462	1,397	1,407
Customer certificates of deposit	5,551	5,482	5,893
Other time deposits			165
Foreign office time deposits	368	432	484
Total interest-bearing deposits	25,414	24,933	24,011
Total deposits	41,758	40,471	39,780
Short-term borrowings	67	130	200
Acceptances outstanding	10	9	24
Accrued expenses and other liabilities	1,062	1,126	1,048
Medium- and long-term debt	5,206	6,138	9,041
Total liabilities	48,103	47,874	50,093
Common stock - $5 par value: Authorized - 325,000,000 shares; Issued - 203,878,110 shares	1,019	1,019	1,019
Capital surplus	1,472	1,481	1,467
Accumulated other comprehensive loss	(308)	(389)	(240)
Retained earnings	5,395	5,247	5,124
Less cost of common stock in treasury - 27,092,427 shares at 6/30/11, 27,342,518 shares at 12/31/10, and 27,561,412 shares at 6/30/10	(1,540)	(1,565)	(1,578)
Total shareholders' equity	6,038	5,793	5,792
Total liabilities and shareholders' equity	$ 54,141	$ 53,667	$ 55,885

XML



Acquisition (Assets and Liabilities at Estimated Fair Value on Acquisition Date) (Details) (USD $) In Millions	Jul. 28, 2011
Fair value of consideration paid	$ 803
Premises and equipment	35
Core deposit intangible	41
Accrued income and other assets	288
Total identifiable assets acquired	4,730
Accrued expenses and other liabilities	38
Total liabilities assumed	4,396
Fair value of net identifiable assets acquired	334
Goodwill resulting from acquisition	469
Common Stock Issued [Member]
Fair value of consideration paid	793	[1]
Warrants Issued [Member]
Fair value of consideration paid	7
Stock Options Issued [Member]
Fair value of consideration paid	3
Cash and Cash Equivalents [Member]
Fair value of identifiable assets acquired	730
Investment Securities Available-for-Sale [Member]
Fair value of identifiable assets acquired	1,527
Total Loans [Member]
Fair value of identifiable assets acquired	2,109
Deposits [Member]
Fair value of liabilities assumed	4,076
Short-Term Borrowings [Member]
Fair value of liabilities assumed	20
Medium- and Long-Term Debt [Member]
Fair value of liabilities assumed	$ 262

[1] Due to the limited time since the acquisition date, the number of shares of common stock issued and the amount of cash paid in lieu of fractional shares has yet to be determined. The fair value of common stock issued includes the fair value of any potential fractional shares.

XML



Business Segment Information (Market Segment Financial Results) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011		Jun. 30, 2010
Net interest income (expense) (FTE)			$ 788		$ 840
Provision for loan losses	47	126	96		301
Noninterest income	202	194	409		388
Noninterest expenses	409	397	824		801
Provision (benefit) for income taxes (FTE)			78		21
Income from discontinued operations, net of tax					17
Net income (loss)	96	70	199		122
Net credit-related charge-offs	191	319	191		319
Assets, average	54,148	56,885	54,148		56,885
Loans, average			39,361		40,990
Deposits, average			41,041		39,125
Return on average assets, ratio			0.73%	[1]	0.43%	[1]
Net interest margin, ratio			3.19%	[2]	3.23%	[2]
Efficiency ratio			69.19%		65.45%
Midwest [Member]
Net interest income (expense) (FTE)			407		415
Provision for loan losses			49		114
Noninterest income			200		198
Noninterest expenses			371		366
Provision (benefit) for income taxes (FTE)			72		47
Net income (loss)			115		86
Net credit-related charge-offs	81	98	81		98
Assets, average	14,287	14,915	14,287		14,915
Loans, average			14,077		14,777
Deposits, average			18,273		17,526
Return on average assets, ratio			1.18%	[1]	0.92%	[1]
Net interest margin, ratio			4.48%	[2]	4.75%	[2]
Efficiency ratio			61.14%		59.37%
Western [Member]
Net interest income (expense) (FTE)			330		325
Provision for loan losses			31		86
Noninterest income			74		69
Noninterest expenses			217		215
Provision (benefit) for income taxes (FTE)			55		32
Net income (loss)			101		61
Net credit-related charge-offs	52	112	52		112
Assets, average	12,459	13,090	12,459		13,090
Loans, average			12,250		12,886
Deposits, average			12,347		11,939
Return on average assets, ratio			1.51%	[1]	0.90%	[1]
Net interest margin, ratio			5.39%	[2]	5.08%	[2]
Efficiency ratio			53.77%		54.74%
Texas [Member]
Net interest income (expense) (FTE)			176		160
Provision for loan losses			2		16
Noninterest income			48		43
Noninterest expenses			124		125
Provision (benefit) for income taxes (FTE)			36		22
Net income (loss)			62		40
Net credit-related charge-offs	12	33	12		33
Assets, average	7,056	6,771	7,056		6,771
Loans, average			6,848		6,565
Deposits, average			5,982		5,137
Return on average assets, ratio			1.75%	[1]	1.18%	[1]
Net interest margin, ratio			5.18%	[2]	4.92%	[2]
Efficiency ratio			55.27%		61.44%
Florida [Member]
Net interest income (expense) (FTE)			23		21
Provision for loan losses			19		19
Noninterest income			7		7
Noninterest expenses			24		21
Provision (benefit) for income taxes (FTE)			(4)		(4)
Net income (loss)			(9)		(8)
Net credit-related charge-offs	23	17	23		17
Assets, average	1,543	1,576	1,543		1,576
Loans, average			1,573		1,575
Deposits, average			382		382
Return on average assets, ratio			(1.11%)	[1]	(1.00%)	[1]
Net interest margin, ratio			2.98%	[2]	2.74%	[2]
Efficiency ratio			78.79%		74.63%
Other Markets [Member]
Net interest income (expense) (FTE)			82		86
Provision for loan losses			(2)		75
Noninterest income			24		25
Noninterest expenses			41		43
Provision (benefit) for income taxes (FTE)			(1)		(26)
Net income (loss)			68		19
Net credit-related charge-offs	21	54	21		54
Assets, average	3,171	3,859	3,171		3,859
Loans, average			2,891		3,578
Deposits, average			2,375		2,099
Return on average assets, ratio			4.31%	[1]	1.03%	[1]
Net interest margin, ratio			5.81%	[2]	4.88%	[2]
Efficiency ratio			41.42%		40.96%
International [Member]
Net interest income (expense) (FTE)			38		37
Provision for loan losses			(5)		(8)
Noninterest income			18		18
Noninterest expenses			19		16
Provision (benefit) for income taxes (FTE)			15		16
Net income (loss)			27		31
Net credit-related charge-offs	2	5	2		5
Assets, average	1,749	1,642	1,749		1,642
Loans, average			1,681		1,589
Deposits, average			1,320		1,013
Return on average assets, ratio			3.06%	[1]	3.70%	[1]
Net interest margin, ratio			4.37%	[2]	4.63%	[2]
Efficiency ratio			33.87%		29.81%
Finance & Other Businesses [Member]
Net interest income (expense) (FTE)			(268)		(204)
Provision for loan losses			2		(1)
Noninterest income			38		28
Noninterest expenses			28		15
Provision (benefit) for income taxes (FTE)			(95)		(66)
Income from discontinued operations, net of tax					17
Net income (loss)			(165)		(107)
Assets, average	13,883	15,032	13,883		15,032
Loans, average			41		20
Deposits, average			$ 362		$ 1,029

[1] Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.

[2] Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.

XML



Employee Benefit Plans (Net Periodic Defined Benefit Cost) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Qualified Defined Benefit Pension Plan [Member]
Service cost	$ 8	$ 8	$ 16	$ 15
Interest cost	19	19	38	36
Expected return on plan assets	(29)	(28)	(58)	(57)
Amortization of unrecognized prior service cost	1	2	2	4
Amortization of unrecognized net loss	9	4	18	8
Net periodic benefit cost	8	5	16	6
Non-Qualified Defined Benefit Pension Plan [Member]
Service cost	1	1	2	2
Interest cost	3	2	5	4
Amortization of unrecognized prior service cost	(1)	(1)	(1)	(1)
Amortization of unrecognized net loss	1	1	2	2
Net periodic benefit cost	4	3	8	7
Postretirement Benefit Plan [Member]
Interest cost	1	1	2	2
Expected return on plan assets	(1)	(1)	(2)	(2)
Amortization of unrecognized transition obligation	1	1	2	2
Amortization of unrecognized net loss	1	1	1	1
Net periodic benefit cost	$ 2	$ 2	$ 3	$ 3

XML



Investment Securities (Contractual Maturity Distribution of Debt Securities) (Details) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010
Total investment securities available-for-sale, Amortized Cost	$ 7,415	$ 7,538
Total investment securities available-for-sale, Fair Value	7,537	7,560	7,188
Within one year, Amortized Cost	69
After one year through five years, Amortized Cost	466
After five years through ten years, Amortized Cost	55
After ten years, Amortized Cost	6,253
Subtotal, Amortized Cost	6,843
Within one year, Fair Value	69
After one year through five years, Fair Value	473
After five years through ten years, Fair Value	56
After ten years, Fair Value	6,397
Subtotal, Fair Value	6,995
Auction-Rate Preferred Securities [Member]
Total investment securities available-for-sale, Amortized Cost	467
Total investment securities available-for-sale, Fair Value	437
Money Market and Other Mutual Funds [Member]
Total investment securities available-for-sale, Amortized Cost	105
Total investment securities available-for-sale, Fair Value	$ 105

XML



Credit Quality and Allowance for Credit Losses (Credit Quality Indicators2) (Details) (USD $) In Millions	Jun. 30, 2011		Dec. 31, 2010		Jun. 30, 2010
Total loans	$ 39,193		$ 40,236		$ 40,602
Retail Loans [Member]
Total loans	3,723		3,930
Retail Loans [Member] | Residential Mortgage Loan [Member]
Total loans	1,491		1,619
Retail Loans [Member] | Residential Mortgage Loan [Member] | Pass [Member]
Total loans	1,400	[1]	1,541	[1]
Retail Loans [Member] | Residential Mortgage Loan [Member] | Special Mention [Member]
Total loans	5	[2]	6	[2]
Retail Loans [Member] | Residential Mortgage Loan [Member] | Substandard [Member]
Total loans	26	[3]	17	[3]
Retail Loans [Member] | Residential Mortgage Loan [Member] | Nonaccrual [Member]
Total loans	60	[4]	55	[4]
Retail Loans [Member] | Consumer Loans [Member]
Total loans	2,232		2,311
Retail Loans [Member] | Consumer Loans [Member] | Home Equity [Member]
Total loans	1,622		1,704
Retail Loans [Member] | Consumer Loans [Member] | Home Equity [Member] | Pass [Member]
Total loans	1,573	[1]	1,662	[1]
Retail Loans [Member] | Consumer Loans [Member] | Home Equity [Member] | Special Mention [Member]
Total loans	16	[2]	26	[2]
Retail Loans [Member] | Consumer Loans [Member] | Home Equity [Member] | Substandard [Member]
Total loans	29	[3]	11	[3]
Retail Loans [Member] | Consumer Loans [Member] | Home Equity [Member] | Nonaccrual [Member]
Total loans	4	[4]	5	[4]
Retail Loans [Member] | Consumer Loans [Member] | Other Consumer [Member]
Total loans	610		607
Retail Loans [Member] | Consumer Loans [Member] | Other Consumer [Member] | Pass [Member]
Total loans	581	[1]	575	[1]
Retail Loans [Member] | Consumer Loans [Member] | Other Consumer [Member] | Special Mention [Member]
Total loans	10	[2]	8	[2]
Retail Loans [Member] | Consumer Loans [Member] | Other Consumer [Member] | Substandard [Member]
Total loans	10	[3]	11	[3]
Retail Loans [Member] | Consumer Loans [Member] | Other Consumer [Member] | Nonaccrual [Member]
Total loans	9	[4]	13	[4]
Retail Loans [Member] | Consumer Loans [Member] | Pass [Member]
Total loans	2,154	[1]	2,237	[1]
Retail Loans [Member] | Consumer Loans [Member] | Special Mention [Member]
Total loans	26	[2]	34	[2]
Retail Loans [Member] | Consumer Loans [Member] | Substandard [Member]
Total loans	39	[3]	22	[3]
Retail Loans [Member] | Consumer Loans [Member] | Nonaccrual [Member]
Total loans	13	[4]	18	[4]
Retail Loans [Member] | Pass [Member]
Total loans	3,554	[1]	3,778	[1]
Retail Loans [Member] | Special Mention [Member]
Total loans	31	[2]	40	[2]
Retail Loans [Member] | Substandard [Member]
Total loans	65	[3]	39	[3]
Retail Loans [Member] | Nonaccrual [Member]
Total loans	73	[4]	73	[4]
Pass [Member]
Total loans	34,366	[1]	34,694	[1]
Special Mention [Member]
Total loans	2,060	[2]	2,413	[2]
Substandard [Member]
Total loans	1,826	[3]	2,049	[3]
Nonaccrual [Member]
Total loans	$ 941	[4]	$ 1,080	[4]

[1] Includes all loans not included in the categories of special mention, substandard or nonaccrual.

[2] Special mention loans are accruing loans that have potential credit weaknesses that deserve management's close attention, such as loans to borrowers who may be experiencing financial difficulties that may result in deterioration of repayment prospects from the borrower at some future date. Included in the special mention category were $509 million and $546 million at June 30, 2011 and December 31, 2010, respectively, of loans proactively monitored by management that were considered "pass" by regulatory authorities.

[3] Substandard loans are accruing loans that have a well-defined weakness, or weaknesses, such as loans to borrowers who may be experiencing losses from operations or inadequate liquidity of a degree and duration that jeopardizes the orderly repayment of the loan. Substandard loans also are distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. This category is generally consistent with the "substandard" category as defined by regulatory authorities.

[4] Nonaccrual loans are loans for which the accrual of interest has been discontinued. For further information, refer to the Nonperforming Assets subheading in Note 1 - Summary of Significant Accounting Policies - on page 76 of the Corporation's Annual Report for the year ended December 31, 2010. This category is generally consistent with the "doubtful" category as defined by regulatory authorities.

XML



Variable Interest Entities (VIEs) (Impact of VIEs on the Consolidated Statements of Income) (Details) (USD $) In Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010		Jun. 30, 2011		Jun. 30, 2010
Other noninterest income	$ 29		$ 22		$ 66		$ 42
Provision for income taxes	41		23		76		18
Variable Interest Entity [Member]
Other noninterest income	(13)		(12)		(26)		(24)
Provision for income taxes	$ (13)	[1]	$ (12)	[1]	$ (26)	[1]	$ (24)	[1]

[1] Income tax credits from low income housing tax credit/historic rehabilitation tax credit partnerships.

XML



Investment Securities (Narrative) (Details) (USD $)

6 Months Ended

Jun. 30, 2011

Percent of auction-rate securities with credit rated Aaa/AAA

As of June 30, 2011, 94 percent of the Corporation's auction-rate portfolio was rated Aaa/AAA by the credit rating agencies.

Securities with no credit impairment in unrealized loss position

208

Total, amortized cost

$ 6,843,000,000

Total, fair value

6,995,000,000

State and Municipal Auction-Rate Securities [Member]

Securities with no credit impairment in unrealized loss position

26

Residential Mortgage-Backed Securities [Member]

Securities with no credit impairment in unrealized loss position

30

Total, amortized cost

6,741,000,000

Total, fair value

6,899,000,000

Total Investment Securities Available-For-Sale [Member]

Carrying value of securities pledged

2,300,000,000

Liabilities secured by pledged collateral

1,700,000,000

Auction-Rate Preferred Securities [Member]

Securities with no credit impairment in unrealized loss position

152

Auction Rate Securities [Member]

Total, amortized cost

32,000,000

Total, fair value

$ 26,000,000

XML



Investment Securities (Investment Securities Available-for-Sale) (Details) (USD $) In Millions	6 Months Ended		12 Months Ended
	Jun. 30, 2011		Dec. 31, 2010		Jun. 30, 2010
Amortized Cost	$ 7,415		$ 7,538
Gross Unrealized Gains	171		98
Gross Unrealized Losses	49		76
Total investment securities available-for-sale, Fair Value	7,537		7,560		7,188
U.S. Treasury and Other U.S. Government Agency Securities [Member]
Amortized Cost	20		131
Total investment securities available-for-sale, Fair Value	20		131
Residential Mortgage-Backed Securities [Member]
Amortized Cost	6,741	[1]	6,653	[1]
Gross Unrealized Gains	169	[1]	95	[1]
Gross Unrealized Losses	11	[1]	39	[1]
Total investment securities available-for-sale, Fair Value	6,899	[2]	6,709	[2]
State And Municipal Securities [Member]
Amortized Cost	32	[3]	46	[3]
Gross Unrealized Losses	6	[3]	7	[3]
Total investment securities available-for-sale, Fair Value	26		39
Auction-Rate Debt Securities [Member]
Amortized Cost	1		1
Total investment securities available-for-sale, Fair Value	1		1
Other Corporate Debt Securities [Member]
Amortized Cost	49		26
Total investment securities available-for-sale, Fair Value	49		26
Auction-Rate Preferred Securities [Member]
Amortized Cost	467		597
Gross Unrealized Gains	2		3
Gross Unrealized Losses	32		30
Total investment securities available-for-sale, Fair Value	437		570
Money Market and Other Mutual Funds [Member]
Amortized Cost	105		84
Total investment securities available-for-sale, Fair Value	$ 105		$ 84

[1] Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

[2] Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.

[3] Primarily auction-rate securities.

XML



Credit Quality and Allowance for Credit Losses (Additional Information Regarding Individually Evaluated Impaired Loans) (Details) (USD $) In Millions	Jun. 30, 2011		Dec. 31, 2010
Individually evaluated impaired loans with no related allowance	$ 13		$ 17
Individually evaluated impaired loans with related allowance	844		957
Total individually evaluated impaired loans	857		974
Unpaid principal balance	1,237		1,477
Related allowance for loan losses	176		197
Business Loans [Member]
Individually evaluated impaired loans with no related allowance	10		9
Individually evaluated impaired loans with related allowance	798		918
Total individually evaluated impaired loans	808		927
Unpaid principal balance	1,177		1,422
Related allowance for loan losses	172		192
Business Loans [Member] | Real Estate Construction [Member]
Individually evaluated impaired loans with no related allowance
Individually evaluated impaired loans with related allowance	131		249
Total individually evaluated impaired loans	131		249
Unpaid principal balance	227		400
Related allowance for loan losses	21		51
Business Loans [Member] | Real Estate Construction [Member] | Commercial Real Estate Business Line [Member]
Individually evaluated impaired loans with no related allowance		[1]
Individually evaluated impaired loans with related allowance	128	[1]	249	[1]
Total individually evaluated impaired loans	128	[1]	249	[1]
Unpaid principal balance	217	[1]	400	[1]
Related allowance for loan losses	19	[1]	51	[1]
Business Loans [Member] | Real Estate Construction [Member] | Other Business Lines [Member]
Individually evaluated impaired loans with no related allowance		[2]		[2]
Individually evaluated impaired loans with related allowance	3	[2]		[2]
Total individually evaluated impaired loans	3	[2]		[2]
Unpaid principal balance	10	[2]		[2]
Related allowance for loan losses	2	[2]		[2]
Business Loans [Member] | Commercial Mortgage [Member]
Individually evaluated impaired loans with no related allowance
Individually evaluated impaired loans with related allowance	396		423
Total individually evaluated impaired loans	396		423
Unpaid principal balance	507		607
Related allowance for loan losses	79		84
Business Loans [Member] | Commercial Mortgage [Member] | Commercial Real Estate Business Line [Member]
Individually evaluated impaired loans with no related allowance		[1]
Individually evaluated impaired loans with related allowance	183	[1]	178	[1]
Total individually evaluated impaired loans	183	[1]	178	[1]
Unpaid principal balance	225	[1]	282	[1]
Related allowance for loan losses	37	[1]	35	[1]
Business Loans [Member] | Commercial Mortgage [Member] | Other Business Lines [Member]
Individually evaluated impaired loans with no related allowance		[2]
Individually evaluated impaired loans with related allowance	213	[2]	245	[2]
Total individually evaluated impaired loans	213	[2]	245	[2]
Unpaid principal balance	282	[2]	325	[2]
Related allowance for loan losses	42	[2]	49	[2]
Business Loans [Member] | Lease Financing Loan [Member]
Individually evaluated impaired loans with no related allowance
Individually evaluated impaired loans with related allowance	6		7
Total individually evaluated impaired loans	6		7
Unpaid principal balance	14		15
Related allowance for loan losses	1		1
Business Loans [Member] | International Loan [Member]
Individually evaluated impaired loans with no related allowance
Individually evaluated impaired loans with related allowance	7		2
Total individually evaluated impaired loans	7		2
Unpaid principal balance	13		2
Related allowance for loan losses	2		1
Business Loans [Member] | Commercial Loan [Member]
Individually evaluated impaired loans with no related allowance	10		9
Individually evaluated impaired loans with related allowance	258		237
Total individually evaluated impaired loans	268		246
Unpaid principal balance	416		398
Related allowance for loan losses	69		55
Retail Loans [Member]
Individually evaluated impaired loans with no related allowance	3		8
Individually evaluated impaired loans with related allowance	46		39
Total individually evaluated impaired loans	49		47
Unpaid principal balance	60		55
Related allowance for loan losses	4		5
Retail Loans [Member] | Residential Mortgage Loan [Member]
Individually evaluated impaired loans with no related allowance	3		8
Individually evaluated impaired loans with related allowance	38		29
Total individually evaluated impaired loans	41		37
Unpaid principal balance	47		41
Related allowance for loan losses	3		3
Retail Loans [Member] | Consumer Loans [Member] | Other Consumer [Member]
Individually evaluated impaired loans with no related allowance
Individually evaluated impaired loans with related allowance	8		10
Total individually evaluated impaired loans	8		10
Unpaid principal balance	13		14
Related allowance for loan losses	$ 1		$ 2

[1] Primarily loans to real estate investors and developers.

[2] Primarily loans secured by owner-occupied real estate.

XML



Acquisition (Acquired Impaired Loan Portfolio at Fair Value) (Details) (Impaired Loans [Member], USD $) In Millions	Jul. 28, 2011
Impaired Loans [Member]
Contractually required principal and interest	$ 322
Contractual cash flows not expected to be collected (nonaccretable difference)	165
Expected cash flows	157
Interest component of expected cash flows (accretable yield)	26
Estimated fair value at acquisition	$ 131