Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )
 October 16, 2015 - 6:40 AM EDT
Print Email Article Font Down Font Up
Comerica Reports Third Quarter 2015 Net Income Of $136 Million, Or 74 Cents Per Share

Average Loan Growth of $1.8 Billion, or 4 Percent, and Average Deposit Growth of $4.0 Billion, or 7 Percent, Compared to Third Quarter 2014 Returned $96 Million to Shareholders Through Share Repurchases and Dividends Credit Quality Remained Strong

DALLAS, Oct. 16, 2015 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported third quarter 2015 net income of $136 million, compared to $135 million for the second quarter 2015 and $154 million for the third quarter 2014. Earnings per diluted share were 74 cents for third quarter 2015 compared to 73 cents for second quarter 2015 and 82 cents for third quarter 2014.

Comerica logo.

 
















(dollar amounts in millions, except per share data)

3rd Qtr '15

2nd Qtr '15

3rd Qtr '14

Net interest income

$

422



$

421



$

414



Provision for credit losses

26



47



5



Noninterest income (a)

264



261



215



Noninterest expenses (a) (b)

461



436



397


(c)

Provision for income taxes

63



64



73










Net income

136



135



154










Net income attributable to common shares

134



134



152










Diluted income per common share

0.74



0.73



0.82










Average diluted shares (in millions)

181



182



185










Basel III common equity Tier 1 capital ratio (d) (e)

10.58

%


10.40

%


n/a



Tier 1 common capital ratio (d) (f)

n/a



n/a



10.59

%


Tangible common equity ratio (f)

9.91



9.92



9.94



(a)

Effective January 1, 2015, contractual changes to a card program resulted in a change to the accounting presentation of the related revenues and expenses. The effect of this change was increases of $48 million and $44 million to both noninterest income and noninterest expenses in both the third and second quarters of 2015, respectively.

(b)

Included net releases of litigation reserves of $3 million, $30 million and $2 million in the third quarter 2015, second quarter 2015 and third quarter 2014, respectively.

(c)

Reflected a net benefit of $8 million from certain third quarter 2014 actions, including a $32 million gain on the early redemption of debt, a $9 million contribution to the Comerica Charitable Foundation and other charges totaling $15 million.

(d)

Basel III capital rules (standardized approach) became effective for Comerica on January 1, 2015. The ratio reflects transitional treatment for certain regulatory deductions and adjustments. For further information, see "Balance Sheet and Capital Management". Capital ratios for prior periods are based on Basel I rules.

(e)

September 30, 2015 ratio is estimated.

(f)

See Reconciliation of Non-GAAP Financial Measures.

n/a - not applicable.

 

"Our third quarter results demonstrate the benefits of our geographic and business line diversity. " said Ralph W. Babb, Jr., chairman and chief executive officer. "Average loans grew $1.8 billion, or 4 percent, and deposits were up $4.0 billion, or 7 percent, compared to a year ago.

"Net interest income remained stable compared to the second quarter and noninterest income increased $3 million, or 1 percent, including growth in card fees, an area of increased focus for us. We continued to tightly manage expenses in the third quarter, even while faced with rising technology and regulatory costs. Overall credit quality remained strong. As far as loans related to energy(a), we saw negative migration; however, as expected, net charge-offs continued to be low and nonaccruals increased a modest $7 million.

"Our capital position is solid," said Babb. "Stock repurchases under our equity repurchase program, combined with dividends, returned $96 million to shareholders in the third quarter. Our Trusted Advisor approach to relationship banking continues to make a positive difference as we remain focused on the long term."

Third Quarter 2015 Compared to Second Quarter 2015

  • Average total loans increased $139 million to $49.0 billion, with increases in Technology and Life Sciences and Commercial Real Estate offset by decreases in Corporate Banking, general Middle Market and Energy. Period-end total loans decreased $799 million, to $48.9 billion, largely driven by seasonal decreases in Mortgage Banker Finance and general Middle Market.
  • Average total deposits increased $1.7 billion, or 3 percent, to $59.1 billion, primarily driven by a $1.3 billion increase in noninterest-bearing deposits. Average total deposits increased in almost all lines of business. Period-end total deposits increased $508 million to $58.8 billion.
  • Net interest income increased $1 million to $422 million compared to second quarter 2015. The benefits from one additional day in the quarter and increases in average earning assets were largely offset by an increase in interest expense on debt and lower loan yields.
  • The allowance for loan losses increased $4 million compared to June 30, 2015, primarily due to increases in reserves related to Technology and Life Sciences and energy exposure, partially offset by lower loan balances and improved credit quality in the remainder of the portfolio. Net charge-offs were $23 million, or 0.19 percent of average loans, in the third quarter 2015, compared to $18 million, or 0.15 percent, in the second quarter 2015. As a result, the provision for credit losses was $26 million for the third quarter 2015.
  • Noninterest income increased $3 million in the third quarter 2015, including a $3 million increase in card fees.
  • Noninterest expenses increased $25 million in the third quarter 2015, primarily reflecting a $3 million net release of litigation reserves in the third quarter 2015, compared to a net release of $30 million in the second quarter 2015.
  • Capital remained solid at September 30, 2015, as evidenced by an estimated common equity Tier 1 capital ratio of 10.58 percent and a tangible common equity ratio of 9.91 percent.
  • Comerica repurchased approximately 1.2 million shares of common stock under the equity repurchase program, which, together with dividends, returned $96 million to shareholders.

Third Quarter 2015 Compared to Third Quarter 2014

  • Average total loans increased $1.8 billion, or 4 percent, primarily reflecting increases in almost all lines of business, partially offset by a $400 million decrease in Corporate Banking.
  • Average total deposits increased $4.0 billion, or 7 percent, primarily driven by increases of $3.3 billion in noninterest-bearing deposits and $1.2 billion in money market and NOW deposits, partially offset by a decrease of $592 million in customer certificates of deposit. Average deposits increased in almost all lines of business and across all markets.
  • Net interest income increased $8 million, largely due to earning asset growth, partially offset by a $4 million increase in interest expense on debt.
  • The provision for credit losses increased $21 million, primarily due to increases in reserves related to Technology and Life Sciences and energy exposure.
  • Excluding the impact of a change to the accounting presentation for a card program, which increased both noninterest income and noninterest expenses by $48 million in the third quarter 2015, noninterest income increased $1 million.
  • Noninterest expenses increased $8 million, excluding the above-described change in accounting presentation for a card program and the net benefit of $8 million in the third quarter 2014 from certain cost-saving actions, primarily due to an increase in technology-related contract labor expenses and higher outside processing expenses related to revenue generating activities.

(a) Loans related to energy at September 30, 2015 included approximately $3.2 billion of outstanding loans in our Energy business line as well as approximately $615 million of loans in other lines of business to companies that have a sizable portion of their revenue related to energy or could be otherwise disproportionately negatively impacted by prolonged low oil and gas prices.


Net Interest Income













(dollar amounts in millions)

3rd Qtr '15


2nd Qtr '15


3rd Qtr '14

Net interest income

$

422



$

421



$

414








Net interest margin

2.54

%


2.65

%


2.67

%







Selected average balances:






Total earning assets

$

66,191



$

63,981



$

61,672


Total loans

48,972



48,833



47,159


Total investment securities

10,232



9,936



9,388


Federal Reserve Bank deposits

6,710



4,968



4,877














Total deposits

59,140



57,398



55,163


Total noninterest-bearing deposits

28,623



27,365



25,275




  • Net interest income increased $1 million to $422 million in the third quarter 2015, compared to the second quarter 2015.
    • Interest on loans increased $2 million, reflecting the impact of one additional day in the third quarter (+$4 million) and the benefit from an increase in average loan balances (+$1 million), partially offset by a decrease in yields (-$3 million). The decrease in loan yields primarily reflected the impact of growth in high quality, lower yielding loans as well as a decrease in fee income due to the summer slowdown, partially offset by the benefit from an increase in LIBOR and the favorable impact from higher yields on loans related to energy due to negative credit migration.
    • Interest on investment securities and Federal Reserve Bank deposits each increased $1 million, primarily reflecting increased average balances.
    • Interest expense on debt increased $3 million, primarily reflecting the impact of debt issued in June and July 2015.
  • The net interest margin of 2.54 percent decreased 11 basis points compared to the second quarter 2015, primarily due to the impact of the increase in Federal Reserve Bank deposit balances (-6 basis points), lower loan yields (-2 basis points) and the impact of increased debt (-2 basis points).

Noninterest Income
Noninterest income increased $3 million in the third quarter 2015, compared to $261 million for the second quarter 2015. The increase primarily reflected increases of $4 million in hedge ineffectiveness income, $3 million in card fees and $3 million in warrant-related income, partially offset by decreases of $5 million in deferred compensation asset returns and $4 million in investment banking income. The decrease in deferred compensation asset returns was offset by a decrease in deferred compensation plan expense in noninterest expenses.

Noninterest Expenses
Noninterest expenses increased $25 million in the third quarter 2015, compared to $436 million for the second quarter 2015, primarily reflecting a $3 million net release of litigation reserves in the third quarter 2015, compared to a net release of $30 million in the second quarter 2015, as well as increases of $2 million each in occupancy and software expense, partially offset by an $8 million decrease in salaries and benefits expense. The decrease in salaries and benefits expense primarily reflected a decrease in deferred compensation plan expense, lower share-based compensation expense as a result of forfeitures, and lower benefits expense, partially offset by an increase in technology-related contract labor expenses and the impact of one additional day in the quarter.

Credit Quality
"At 19 basis points, net charge-offs remain well below the historical normal level. Gross charge-offs declined slightly, while recoveries were down, primarily due to timing," said Babb. "The provision for credit losses was $26 million and the allowance increased $4 million. This reflects modestly higher reserves for both Technology and Life Sciences and loans related to energy. This marks the fourth consecutive quarter that we have prudently increased our reserves for energy, a result of increasing criticized loans and sustained low energy prices. While negative credit migration is anticipated, any losses are expected to be manageable. We continue to feel comfortable with our energy portfolio."















(dollar amounts in millions)

3rd Qtr '15


2nd Qtr '15


3rd Qtr '14

Loan charge-offs

$

34



$

35



$

24


Loan recoveries

11



17



21


Net loan charge-offs

23



18



3


Net loan charge-offs/Average total loans

0.19

%


0.15

%


0.03

%







Provision for credit losses

$

26



$

47



$

5








Nonperforming loans (a)

369



361



346


Nonperforming assets (NPAs) (a)

381



370



357


NPAs/Total loans and foreclosed property

0.78

%


0.74

%


0.75

%







Loans past due 90 days or more and still accruing

$

5



$

18



$

13








Allowance for loan losses

622



618



592


Allowance for credit losses on lending-related commitments (b)

48



50



43


Total allowance for credit losses

670



668



635








Allowance for loan losses/Period-end total loans

1.27

%


1.24

%


1.24

%

Allowance for loan losses/Nonperforming loans

169



171



171


(a)

Excludes loans acquired with credit impairment.


(b)

Included in "Accrued expenses and other liabilities" on the consolidated balance sheets.

 

  • Net charge-offs increased $5 million to $23 million, or 0.19 percent of average loans, in the third quarter 2015, compared to $18 million, or 0.15 percent, in the second quarter 2015.
  • During the third quarter 2015, $69 million of borrower relationships over $2 million were transferred to nonaccrual status, of which $25 million were loans related to energy.
  • Criticized loans increased $537 million to $2.9 billion at September 30, 2015, compared to $2.4 billion at June 30, 2015, reflecting an increase of approximately $480 million in criticized loans related to energy.

Balance Sheet and Capital Management
Total assets and common shareholders' equity were $71.0 billion and $7.6 billion, respectively, at September 30, 2015, compared to $69.9 billion and $7.5 billion, respectively, at June 30, 2015.

There were approximately 177 million common shares outstanding at September 30, 2015. Share repurchases of $59 million (1.2 million shares) under the equity repurchase program, combined with dividends of 21 cents per share, returned 71 percent of third quarter 2015 net income to shareholders. Diluted average shares decreased 2 million to 181 million for the third quarter 2015.

The estimated common equity Tier 1 capital ratio, reflective of transition provisions and excluding accumulated other comprehensive income ("AOCI"), was 10.58 percent at September 30, 2015. Certain deductions and adjustments to regulatory capital began phasing in on January 1, 2015 and will be fully implemented on January 1, 2018. The estimated ratio under fully phased-in Basel III capital rules is largely the same as the transitional ratio. Comerica's tangible common equity ratio was 9.91 percent at September 30, 2015, a decrease of 1 basis point from June 30, 2015.

Full-Year and Fourth Quarter 2015 Outlook
Management expectations for full-year 2015 compared to full-year 2014 have not changed from the previously provided outlook.

For fourth quarter 2015 compared to third quarter 2015, management expects the following, assuming a continuation of the current economic and low-rate environment:

  • Average loans relatively stable, reflecting a seasonal decline in Mortgage Banker Finance, a continued decline in Energy and small increases in other lines of business.
  • Net interest income relatively stable, with a contribution from earning asset growth approximately offset by continued pressure on yields from the low rate environment.
  • Provision for credit losses remains low, with fourth quarter provision at a level similar to the third quarter. Continued negative migration of loans related to energy is possible, which may be offset by lower exposure balances.
  • Noninterest income slightly higher, with growth in card fees, along with fiduciary income and investment banking fees should markets improve. The levels of warrant income, hedge ineffectiveness income and deferred compensation asset losses experienced in the third quarter 2015 are not expected to repeat, but are difficult to predict.
  • Noninterest expenses moderately higher, reflecting seasonal increases in benefits expense, outside processing, marketing and occupancy expenses. The levels of litigation-related expense, share-based compensation and deferred compensation plan expense experienced in the third quarter 2015 are not expected to repeat, but are difficult to predict.

Business Segments
Comerica's operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank and Wealth Management. The Finance Division is also reported as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at September 30, 2015 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2015 results compared to second quarter 2015.

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







(dollar amounts in millions)

3rd Qtr '15


2nd Qtr '15


3rd Qtr '14

Business Bank

$

194


85

%


$

182


81

%


$

211


92

%

Retail Bank

13


6



18


8



7


3


Wealth Management

21


9



26


11



12


5



228


100

%


226


100

%


230


100

%

Finance

(93)




(90)




(73)



Other (a)

1




(1)




(3)



  Total

$

136




$

135




$

154



(a)

Includes items not directly associated with the three major business segments or the Finance Division.

 




Business Bank













(dollar amounts in millions)

3rd Qtr '15



2nd Qtr '15



3rd Qtr '14


Net interest income (FTE)

$

380



$

375



$

376


Provision for credit losses

30



61



(4)


Noninterest income

145



140



97


Noninterest expenses

202



176



152


Net income

194



182



211








Net loan charge-offs

23



22



(2)








Selected average balances:






Assets

39,210



39,135



37,751


Loans

38,113



38,109



36,746


Deposits

31,397



30,229



28,815


  • Average loans increased $4 million, primarily reflecting increases in Technology and Life Sciences, Commercial Real Estate and Entertainment, largely offset by decreases in Corporate Banking, general Middle Market and Energy.
  • Average deposits increased $1.2 billion, primarily reflecting increases in general Middle Market, Technology and Life Sciences and Corporate Banking, partially offset by a decrease in Commercial Real Estate.
  • Net interest income increased $5 million, primarily reflecting the impact of one additional day in the quarter and an increase in net funds transfer pricing (FTP) credits, largely due to the increase in average deposits, partially offset by lower loan yields.
  • The allowance for loan losses increased $5 million compared to June 30, 2015, primarily due to increases in reserves related to Technology and Life Sciences and energy exposure, partially offset by lower loan balances and improvements in credit quality in the remainder of the portfolio. As a result, the provision for credit losses was $30 million for the third quarter 2015.
  • Noninterest income increased $5 million, primarily due to increases in customer derivative income and warrant-related income, partially offset by a decrease in investment banking fees.
  • Noninterest expenses increased $26 million, primarily reflecting the impact of a net release in litigation reserves in the second quarter 2015, partially offset by a decrease in salaries and benefits expense.

Retail Bank













(dollar amounts in millions)

3rd Qtr '15



2nd Qtr '15



3rd Qtr '14


Net interest income (FTE)

$

158



$

155



$

153


Provision for credit losses

2



(8)




Noninterest income

49



46



42


Noninterest expenses

185



182



185


Net income

13



18



7








Net loan charge-offs

1



1










Selected average balances:






Assets

6,518



6,459



6,273


Loans

5,835



5,770



5,605


Deposits

23,079



22,747



22,042


  • Average loans increased $65 million, reflecting increases in Small Business and consumer loans in Retail Banking.
  • Average deposits increased $332 million, primarily reflecting an increase in noninterest-bearing deposits.
  • Net interest income increased $3 million, primarily due to an increase in net FTP credits, largely due to the increase in average deposits and the impact of one additional day in the quarter.
  • The provision for credit losses was $2 million, compared to a negative provision of $8 million in the second quarter 2015.
  • Noninterest income increased $3 million, primarily reflecting an increase in card fees.
  • Noninterest expenses increased $3 million, primarily reflecting increases in occupancy and outside processing expenses.

Wealth Management













(dollar amounts in millions)

3rd Qtr '15



2nd Qtr '15



3rd Qtr '14


Net interest income (FTE)

$

45



$

45



$

45


Provision for credit losses

(3)



(9)



7


Noninterest income

59



60



59


Noninterest expenses

74



74



78


Net income

21



26



12








Net loan charge-offs (recoveries)

(1)



(5)



5








Selected average balances:






Assets

5,228



5,153



4,998


Loans

5,024



4,954



4,808


Deposits

4,188



4,060



3,924


  • Average loans increased $70 million.
  • Average deposits increased $128 million, primarily reflecting increases in money market and checking deposits.
  • Net interest income remained stable quarter over quarter. The benefits from loan and deposit growth and the impact of one additional day in the quarter were offset by lower yields and a decrease in the FTP crediting rate.
  • The provision for credit losses increased $6 million, from a negative provision of $9 million in the second quarter 2015 to a negative provision of $3 million in the third quarter 2015, primarily reflecting lower net recoveries in the third quarter 2015.
  • Noninterest income decreased $1 million, primarily due to lower fiduciary income.

Geographic Market Segments
Comerica also provides market segment results for three primary geographic markets: Michigan, California and Texas. In addition to the three primary geographic markets, Other Markets is also reported as a market segment. Other Markets includes Florida, Arizona, the International Finance division and businesses that have a significant presence outside of the three primary geographic markets. The tables below present the geographic market results based on the methodologies in effect at September 30, 2015 and are presented on a fully taxable equivalent (FTE) basis.

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







(dollar amounts in millions)

3rd Qtr '15


2nd Qtr '15


3rd Qtr '14

Michigan

$

71


31

%


$

98


44

%


$

66


29

%

California

62


27



71


31



63


27


Texas

36


16



14


6



42


18


Other Markets

59


26



43


19



59


26



228


100

%


226


100

%


230


100

%

Finance & Other (a)

(92)




(91)




(76)



  Total

$

136




$

135




$

154



(a)

 Includes items not directly associated with the geographic markets.

 

  • Average loans increased $360 million in California and decreased $257 million in Texas and $67 million in Michigan (primarily general Middle Market). The increase in California was led by Technology and Life Sciences, Entertainment and Private Banking, partially offset by a decrease in general Middle Market. In Texas, average loans decreased in almost all lines of business.
  • Average deposits increased $1.1 billion and $240 million in California and Michigan, respectively, and decreased $206 million in Texas. The increases in California and Michigan reflected increases in almost all lines of business, partially offset by decreases in Commercial Real Estate (in both markets) and Corporate Banking (in Michigan). The decrease in Texas primarily reflected decreases in general Middle Market, Technology and Life Sciences, and Energy, partially offset by an increase in Small Business.
  • Net interest income increased $6 million and $1 million in California and Michigan, respectively, and decreased $1 million in Texas. The increase in California primarily reflected the benefit from an increase in net FTP credits, largely due to the increase in average deposits, and the impact of one additional day in the quarter.
  • The provision for credit losses decreased $33 million in Texas and increased $20 million and $19 million in California and Michigan, respectively. The decrease in Texas primarily reflected a smaller reserve build for Energy in the third quarter 2015, compared to the second quarter 2015. In California, the provision increased primarily as a result of increased reserves for Technology and Life Sciences, while the increase in Michigan was primarily the result of increased provisions in general Middle Market, Retail Banking and Corporate Banking.
  • Noninterest income increased $3 million and $1 million in Texas and California, respectively, and was unchanged in Michigan. The increase in Texas was primarily due to increases in customer derivative income, foreign exchange income and small increases in several categories, partially offset by a decrease in investment banking income.
  • Noninterest expenses increased $24 million in Michigan, primarily reflecting the impact of a net release in litigation reserves in the second quarter 2015, partially offset by small decreases in several categories, and increased $3 million and $2 million in Texas and California, respectively.

Michigan Market













(dollar amounts in millions)

3rd Qtr '15



2nd Qtr '15



3rd Qtr '14


Net interest income (FTE)

$

180



$

179



$

179


Provision for credit losses

6



(13)



(8)


Noninterest income

85



85



83


Noninterest expenses

152



128



166


Net income

71



98



66








Net loan charge-offs (recoveries)

9



(2)



3








Selected average balances:






Assets

13,856



13,852



13,724


Loans

13,223



13,290



13,248


Deposits

21,946



21,706



21,214



California Market













(dollar amounts in millions)

3rd Qtr '15



2nd Qtr '15



3rd Qtr '14


Net interest income (FTE)

$

187



$

181



$

182


Provision for credit losses

24



4



14


Noninterest income

38



37



37


Noninterest expenses

102



100



102


Net income

62



71



63








Net loan charge-offs

10



6



6








Selected average balances:






Assets

17,060



16,696



15,768


Loans

16,789



16,429



15,509


Deposits

18,372



17,275



16,350



Texas Market













(dollar amounts in millions)

3rd Qtr '15



2nd Qtr '15



3rd Qtr '14


Net interest income (FTE)

$

129



$

130



$

130


Provision for credit losses

10



43



3


Noninterest income

34



31



36


Noninterest expenses

97



94



96


Net income

36



14



42








Net loan charge-offs

4



5










Selected average balances:






Assets

11,578



11,878



11,835


Loans

10,997



11,254



11,147


Deposits

10,753



10,959



10,633


 

Conference Call and Webcast
Comerica will host a conference call to review third quarter 2015 financial results at 7 a.m. CT Friday, October 16, 2015. Interested parties may access the conference call by calling (877) 523-5249 or (210) 591-1147 (event ID No. 28321461). The call and supplemental financial information can also be accessed via Comerica's "Investor Relations" page at www.comerica.com. A replay of the Webcast can be accessed via Comerica's "Investor Relations" page at www.comerica.com.

Comerica Incorporated is a financial services company headquartered in Dallas, Texas, and strategically aligned by three major business segments: The Business Bank, The Retail Bank and Wealth Management. Comerica focuses on relationships and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico.

This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Comerica's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as a reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Forward-looking Statements
Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "believes," "contemplates," "feels," "expects," "estimates," "seeks," "strives," "plans," "intends," "outlook," "forecast," "position," "target," "mission," "assume," "achievable," "potential," "strategy," "goal," "aspiration," "opportunity," "initiative," "outcome," "continue," "remain," "maintain," "on course," "trend," "objective," "looks forward," "projects," "models" and variations of such words and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "might," "can," "may" or similar expressions, as they relate to Comerica or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of Comerica's management based on information known to Comerica's management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica's management for future or past operations, products or services, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability. Such statements reflect the view of Comerica's management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Comerica's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in general economic, political or industry conditions; changes in monetary and fiscal policies, including changes in interest rates; changes in regulation or oversight; Comerica's ability to maintain adequate sources of funding and liquidity; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers, including the energy industry; operational difficulties, failure of technology infrastructure or information security incidents; reliance on other companies to provide certain key components of business infrastructure; factors impacting noninterest expenses which are beyond Comerica's control; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; changes in Comerica's credit rating; unfavorable developments concerning credit quality; the interdependence of financial service companies; the implementation of Comerica's strategies and business initiatives; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; competitive product and pricing pressures among financial institutions within Comerica's markets; changes in customer behavior; any future strategic acquisitions or divestitures; 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 or determinations; the effectiveness of methods of reducing risk exposures; the effects of terrorist activities and other hostilities; the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; changes in accounting standards and the critical nature of Comerica's accounting policies. Comerica cautions that the foregoing list of factors is not exclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to "Item 1A. Risk Factors" beginning on page 12 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2014. Forward-looking statements speak only as of the date they are made. Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this news release or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.


CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)




Comerica Incorporated and Subsidiaries













Three Months Ended


Nine Months Ended


September 30,

June 30,

September 30,


September 30,

(in millions, except per share data)

2015

2015

2014


2015

2014

PER COMMON SHARE AND COMMON STOCK DATA







Diluted net income

$

0.74


$

0.73


$

0.82



$

2.20


$

2.35


Cash dividends declared

0.21


0.21


0.20



0.62


0.59









Average diluted shares (in thousands)

180,714


182,422


185,401



181,807


186,064


KEY RATIOS







Return on average common shareholders' equity

7.19

%

7.21

%

8.29

%


7.20

%

8.08

%

Return on average assets

0.76


0.79


0.93



0.78


0.91


Common equity tier 1 risk-based capital ratio (a) (b)

10.58


10.40


n/a





Tier 1 common risk-based capital ratio (c)

n/a


n/a


10.59





Tier 1 risk-based capital ratio (a) (b)

10.58


10.40


10.59





Total risk-based capital ratio (a) (b)

12.91


12.38


12.83





Leverage ratio (a) (b)

10.29


10.56


10.79





Tangible common equity ratio (c)

9.91


9.92


9.94





AVERAGE BALANCES







Commercial loans

$

31,900


$

31,788


$

30,188



$

31,596


$

29,487


Real estate construction loans

1,833


1,807


1,973



1,859


1,905


Commercial mortgage loans

8,691


8,672


8,698



8,648


8,739


Lease financing

788


795


823



793


840


International loans

1,401


1,453


1,417



1,455


1,349


Residential mortgage loans

1,882


1,877


1,792



1,872


1,763


Consumer loans

2,477


2,441


2,268



2,432


2,244


Total loans

48,972


48,833


47,159



48,655


46,327









Earning assets

66,191


63,981


61,672



64,561


60,585


Total assets

71,333


68,963


66,398



69,688


65,335









Noninterest-bearing deposits

28,623


27,365


25,275



27,569


24,182


Interest-bearing deposits

30,517


30,033


29,888



30,282


29,599


Total deposits

59,140


57,398


55,163



57,851


53,781









Common shareholders' equity

7,559


7,512


7,411



7,508


7,324


NET INTEREST INCOME (fully taxable equivalent basis)







Net interest income

$

423


$

422


$

415



$

1,259


$

1,243


Net interest margin

2.54

%

2.65

%

2.67

%


2.61

%

2.74

%

CREDIT QUALITY







Total nonperforming assets

$

381


$

370


$

357












Loans past due 90 days or more and still accruing

5


18


13












Net loan charge-offs

23


18


3



$

49


$

24









Allowance for loan losses

622


618


592





Allowance for credit losses on lending-related commitments

48


50


43





Total allowance for credit losses

670


668


635












Allowance for loan losses as a percentage of total loans

1.27

%

1.24

%

1.24

%




Net loan charge-offs as a percentage of average total loans

0.19


0.15


0.03



0.14

%

0.07

%

Nonperforming assets as a percentage of total loans and foreclosed property

0.78


0.74


0.75





Allowance for loan losses as a percentage of total nonperforming loans

169


171


171








(a)

Basel III rules became effective on January 1, 2015, with transitional provisions. All prior period data is based on Basel I rules.

(b)

September 30, 2015 ratios are estimated.

(c)

See Reconciliation of Non-GAAP Financial Measures.

n/a - not applicable.

 

CONSOLIDATED BALANCE SHEETS

Comerica Incorporated and Subsidiaries











September 30,

June 30,

December 31,

September 30,

(in millions, except share data)

2015

2015

2014

2014


(unaudited)

(unaudited)


(unaudited)

ASSETS





Cash and due from banks

$

1,101


$

1,148


$

1,026


$

1,039







Interest-bearing deposits with banks

6,099


4,817


5,045


6,748


Other short-term investments

107


119


99


112







Investment securities available-for-sale

8,749


8,267


8,116


9,468


Investment securities held-to-maturity

1,863


1,952


1,935








Commercial loans

31,777


32,723


31,520


30,759


Real estate construction loans

1,874


1,795


1,955


1,992


Commercial mortgage loans

8,787


8,674


8,604


8,603


Lease financing

751


786


805


805


International loans

1,382


1,420


1,496


1,429


Residential mortgage loans

1,880


1,865


1,831


1,797


Consumer loans

2,491


2,478


2,382


2,323


Total loans

48,942


49,741


48,593


47,708


Less allowance for loan losses

(622)


(618)


(594)


(592)


Net loans

48,320


49,123


47,999


47,116







Premises and equipment

541


541


532


524


Accrued income and other assets

4,232


3,978


4,434


3,876


Total assets

$

71,012


$

69,945


$

69,186


$

68,883







LIABILITIES AND SHAREHOLDERS' EQUITY





Noninterest-bearing deposits

$

28,697


$

28,167


$

27,224


$

27,490







Money market and interest-bearing checking deposits

23,948


23,786


23,954


23,523


Savings deposits

1,853


1,841


1,752


1,753


Customer certificates of deposit

4,126


4,367


4,421


4,698


Foreign office time deposits

144


99


135


117


Total interest-bearing deposits

30,071


30,093


30,262


30,091


Total deposits

58,768


58,260


57,486


57,581







Short-term borrowings

109


56


116


202


Accrued expenses and other liabilities

1,413


1,265


1,507


1,002


Medium- and long-term debt

3,100


2,841


2,675


2,665


Total liabilities

63,390


62,422


61,784


61,450







Common stock - $5 par value:





Authorized - 325,000,000 shares





Issued - 228,164,824 shares

1,141


1,141


1,141


1,141


Capital surplus

2,165


2,158


2,188


2,183


Accumulated other comprehensive loss

(345)


(396)


(412)


(317)


Retained earnings

7,007


6,908


6,744


6,631


Less cost of common stock in treasury - 51,010,418 shares at 9/30/15, 49,803,515 shares at 6/30/15, 49,146,225 shares at 12/31/14, and 47,992,721 shares at 9/30/14

(2,346)


(2,288)


(2,259)


(2,205)


Total shareholders' equity

7,622


7,523


7,402


7,433


Total liabilities and shareholders' equity

$

71,012


$

69,945


$

69,186


$

68,883


 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries













Three Months Ended


Nine Months Ended


September 30,


September 30,

(in millions, except per share data)

2015

2014


2015

2014

INTEREST INCOME






Interest and fees on loans

$

390


$

381



$

1,156


$

1,142


Interest on investment securities

54


52



160


160


Interest on short-term investments

4


3



11


10


Total interest income

448


436



1,327


1,312


INTEREST EXPENSE






Interest on deposits

11


11



33


33


Interest on medium- and long-term debt

15


11



38


39


Total interest expense

26


22



71


72


Net interest income

422


414



1,256


1,240


Provision for credit losses

26


5



87


25


Net interest income after provision for credit losses

396


409



1,169


1,215


NONINTEREST INCOME






Service charges on deposit accounts

56


54



167


162


Fiduciary income

47


44



142


133


Commercial lending fees

22


26



69


69


Card fees

75


23



214


68


Letter of credit fees

13


14



39


43


Bank-owned life insurance

10


11



29


31


Foreign exchange income

10


9



29


30


Brokerage fees

5


4



13


13


Net securities losses


(1)



(2)



Other noninterest income

26


31



80


94


Total noninterest income

264


215



780


643


NONINTEREST EXPENSES






Salaries and benefits expense

243


248



747


735


Net occupancy expense

41


46



118


125


Equipment expense

14


14



40


43


Outside processing fee expense

86


31



249


89


Software expense

26


25



73


72


Litigation-related expense

(3)


(2)



(32)


4


FDIC insurance expense

9


9



27


25


Advertising expense

6


5



17


16


Gain on debt redemption


(32)




(32)


Other noninterest expenses

39


53



117


130


Total noninterest expenses

461


397



1,356


1,207


Income before income taxes

199


227



593


651


Provision for income taxes

63


73



188


207


NET INCOME

136


154



405


444


Less income allocated to participating securities

2


2



5


6


Net income attributable to common shares

$

134


$

152



$

400


$

438


Earnings per common share:






Basic

$

0.76


$

0.85



$

2.27


$

2.44


Diluted

0.74


0.82



2.20


2.35








Comprehensive income

187


141



472


518








Cash dividends declared on common stock

37


36



110


107


Cash dividends declared per common share

0.21


0.20



0.62


0.59


 

CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries
























Third

Second

First

Fourth

Third


Third Quarter 2015 Compared To:


Quarter

Quarter

Quarter

Quarter

Quarter


Second Quarter 2015


Third Quarter 2014

(in millions, except per share data)

2015

2015

2015

2014

2014


Amount

Percent


Amount

Percent

INTEREST INCOME












Interest and fees on loans

$

390


$

388


$

378


$

383


$

381



$

2


%


$

9


2

%

Interest on investment securities

54


53


53


51


52



1


2



2


3


Interest on short-term investments

4


3


4


4


3



1


39



1


38


Total interest income

448


444


435


438


436



4


1



12


3


INTEREST EXPENSE












Interest on deposits

11


11


11


12


11








Interest on medium- and long-term debt

15


12


11


11


11



3


22



4


27


Total interest expense

26


23


22


23


22



3


12



4


12


Net interest income

422


421


413


415


414



$

1




$

8


2


Provision for credit losses

26


47


14


2


5



(21)


(44)



21


n/m


Net interest income after provision

for credit losses

396


374


399


413


409



22


6



(13)


(3)


NONINTEREST INCOME












Service charges on deposit accounts

56


56


55


53


54






2


4


Fiduciary income

47


48


47


47


44



(1)


(3)



3


5


Commercial lending fees

22


22


25


29


26






(4)


(13)


Card fees

75


72


67


24


23



3


4



52


n/m


Letter of credit fees

13


13


13


14


14






(1)


(8)


Bank-owned life insurance

10


10


9


8


11






(1)



Foreign exchange income

10


9


10


10


9



1


10



1


8


Brokerage fees

5


4


4


4


4



1


6



1


20


Net securities losses



(2)



(1)






1


n/m


Other noninterest income

26


27


27


36


31



(1)




(5)


(17)


Total noninterest income

264


261


255


225


215



3


1



49


23


NONINTEREST EXPENSES












Salaries and benefits expense

243


251


253


245


248



(8)


(3)



(5)


(2)


Net occupancy expense

41


39


38


46


46



2


5



(5)


(11)


Equipment expense

14


13


13


14


14



1


4





Outside processing fee expense

86


86


77


33


31






55


n/m


Software expense

26


24


23


23


25



2


8



1


4


Litigation-related expense

(3)


(30)


1



(2)



27


88



(1)


n/m


FDIC insurance expense

9


9


9


8


9








Advertising expense

6


5


6


7


5



1


10



1


8


Gain on debt redemption





(32)






32


n/m


Other noninterest expenses

39


39


39


43


53






(14)


(25)


Total noninterest expenses

461


436


459


419


397



25


6



64


16


Income before income taxes

199


199


195


219


227






(28)


(12)


Provision for income taxes

63


64


61


70


73



(1)


(2)



(10)


(14)


NET INCOME

136


135


134


149


154



1




(18)


(12)


Less income allocated to participating securities

2


1


2


1


2



1






Net income attributable to common shares

$

134


$

134


$

132


$

148


$

152



$


%


$

(18)


(11)%


Earnings per common share:












Basic

$

0.76


$

0.76


$

0.75


$

0.83


$

0.85



$


%


$

(0.09)


(11)%


Diluted

0.74


0.73


0.73


0.80


0.82



0.01


1



(0.08)


(10)














Comprehensive income

187


109


176


54


141



78


72



46


33














Cash dividends declared on common stock

37


37


36


36


36






1


3


Cash dividends declared per common share

0.21


0.21


0.20


0.20


0.20






0.01


5


n/m - not meaningful

 

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)

Comerica Incorporated and Subsidiaries















2015


2014

(in millions)

3rd Qtr

2nd Qtr

1st Qtr


4th Qtr

3rd Qtr








Balance at beginning of period

$

618


$

601


$

594



$

592


$

591









Loan charge-offs:







Commercial

30


17


19



8


13


Commercial mortgage


2




2


7


Lease financing


1






International

1


11


2



6



Residential mortgage


1




1


1


Consumer

3


3


2



3


3


Total loan charge-offs

34


35


23



20


24









Recoveries on loans previously charged-off:







Commercial

8


10


9



6


6


Real estate construction


1




2


1


Commercial mortgage

2


5


3



10


12


Residential mortgage



1




1


Consumer

1


1


2



1


1


Total recoveries

11


17


15



19


21


Net loan charge-offs

23


18


8



1


3


Provision for loan losses

28


35


16



4


4


Foreign currency translation adjustment

(1)



(1)



(1)



Balance at end of period

$

622


$

618


$

601



$

594


$

592









Allowance for loan losses as a percentage of total loans

1.27

%

1.24

%

1.22

%


1.22

%

1.24

%








Net loan charge-offs as a percentage of average total loans

0.19


0.15


0.07



0.01


0.03


 


ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited)

Comerica Incorporated and Subsidiaries















2015


2014

(in millions)

3rd Qtr

2nd Qtr

1st Qtr


4th Qtr

3rd Qtr








Balance at beginning of period

$

50


$

39


$

41



$

43


$

42


Less: Charge-offs on lending-related commitments (a)


1






Add: Provision for credit losses on lending-related commitments

(2)


12


(2)



(2)


1


Balance at end of period

$

48


$

50


$

39



$

41


$

43









Unfunded lending-related commitments sold

$


$

12


$

1



$


$

9


(a)

Charge-offs result from the sale of unfunded lending-related commitments.


 



NONPERFORMING ASSETS (unaudited)

Comerica Incorporated and Subsidiaries















2015


2014

(in millions)

3rd Qtr

2nd Qtr

1st Qtr


4th Qtr

3rd Qtr








SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS




Nonaccrual loans:







Business loans:







  Commercial

$

214


$

186


$

113



$

109


$

93


  Real estate construction

1


1


1



2


18


  Commercial mortgage

66


77


82



95


144


  Lease financing

8


11






  International

8


9


1





    Total nonaccrual business loans

297


284


197



206


255


Retail loans:







  Residential mortgage

31


35


37



36


42


  Consumer:







  Home equity

28


29


31



30


31


  Other consumer

1


1


1



1


1


    Total consumer

29


30


32



31


32


Total nonaccrual retail loans

60


65


69



67


74


Total nonaccrual loans

357


349


266



273


329


Reduced-rate loans

12


12


13



17


17


Total nonperforming loans (a)

369


361


279



290


346


Foreclosed property

12


9


9



10


11


Total nonperforming assets (a)

$

381


$

370


$

288



$

300


$

357









Nonperforming loans as a percentage of total loans

0.75

%

0.72

%

0.57

%


0.60

%

0.73

%

Nonperforming assets as a percentage of total loans

and foreclosed property

0.78


0.74


0.59



0.62


0.75


Allowance for loan losses as a percentage of total

nonperforming loans

169


171


216



205


171


Loans past due 90 days or more and still accruing

$

5


$

18


$

12



$

5


$

13









ANALYSIS OF NONACCRUAL LOANS







Nonaccrual loans at beginning of period

$

349


$

266


$

273



$

329


$

326


Loans transferred to nonaccrual (b)

69


145


39



41


54


Nonaccrual business loan gross charge-offs (c)

(31)


(31)


(21)



(16)


(20)


Loans transferred to accrual status (b)



(4)



(18)



Nonaccrual business loans sold (d)


(1)


(2)



(24)


(3)


Payments/Other (e)

(30)


(30)


(19)



(39)


(28)


Nonaccrual loans at end of period

$

357


$

349


$

266



$

273


$

329


(a) Excludes loans acquired with credit impairment.

(b) Based on an analysis of nonaccrual loans with book balances greater than $2 million.

(c) Analysis of gross loan charge-offs:







Nonaccrual business loans

$

31


$

31


$

21



$

16


$

20


Consumer and residential mortgage loans

3


4


2



4


4


Total gross loan charge-offs

$

34


$

35


$

23



$

20


$

24


(d) Analysis of loans sold:







Nonaccrual business loans

$


$

1


$

2



$

24


$

3


Performing criticized loans



7



5



Total criticized loans sold

$


$

1


$

9



$

29


$

3


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

 

ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)

Comerica Incorporated and Subsidiaries

















Nine Months Ended


September 30, 2015


September 30, 2014


Average


Average


Average


Average

(dollar amounts in millions)

Balance

Interest

Rate


Balance

Interest

Rate









Commercial loans

$

31,596


$

721


3.05

%


$

29,487


$

689


3.12

%

Real estate construction loans

1,859


48


3.44



1,905


49


3.42


Commercial mortgage loans

8,648


220


3.40



8,739


246


3.77


Lease financing

793


19


3.13



840


20


3.23


International loans

1,455


39


3.63



1,349


37


3.64


Residential mortgage loans

1,872


53


3.78



1,763


50


3.81


Consumer loans

2,432


59


3.23



2,244


54


3.21


Total loans (a)

48,655


1,159


3.19



46,327


1,145


3.30










Mortgage-backed securities (b)

9,076


151


2.23



8,976


159


2.36


Other investment securities

950


9


1.18



369


1


0.44


Total investment securities (b)

10,026


160


2.13



9,345


160


2.28










Interest-bearing deposits with banks

5,774


11


0.25



4,803


10


0.25


Other short-term investments

106



0.78



110



0.60


Total earning assets

64,561


1,330


2.76



60,585


1,315


2.90










Cash and due from banks

1,054





932




Allowance for loan losses

(614)





(602)




Accrued income and other assets

4,687





4,420




Total assets

$

69,688





$

65,335












Money market and interest-bearing checking deposits

$

23,973


20


0.11



$

22,571


18


0.11


Savings deposits

1,827



0.02



1,734



0.03


Customer certificates of deposit

4,359


12


0.37



4,990


13


0.36


Foreign office time deposits

123


1


1.13



304


2


0.68


Total interest-bearing deposits

30,282


33


0.14



29,599


33


0.15










Short-term borrowings

93



0.05



209



0.03


Medium- and long-term debt

2,843


38


1.80



3,061


39


1.67


Total interest-bearing sources

33,218


71


0.28



32,869


72


0.29










Noninterest-bearing deposits

27,569





24,182




Accrued expenses and other liabilities

1,393





960




Total shareholders' equity

7,508





7,324




Total liabilities and shareholders' equity

$

69,688





$

65,335












Net interest income/rate spread (FTE)


$

1,259


2.48




$

1,243


2.61










FTE adjustment


$

3





$

3











Impact of net noninterest-bearing sources of funds



0.13





0.13


Net interest margin (as a percentage of average earning assets) (FTE) (a)



2.61

%




2.74

%

(a)

Accretion of the purchase discount on the acquired loan portfolio of $6 million and $25 million in the nine months ended September 30, 2015 and 2014, respectively, increased the net interest margin by 1 basis point and 6 basis points in each respective period.

(b)

Includes investment securities available-for-sale and investment securities held-to-maturity.

 

ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)

Comerica Incorporated and Subsidiaries

























Three Months Ended


September 30, 2015


June 30, 2015


September 30, 2014


Average


Average


Average


Average


Average


Average

(dollar amounts in millions)

Balance

Interest

Rate


Balance

Interest

Rate


Balance

Interest

Rate













Commercial loans

$

31,900


$

244


3.04

%


$

31,788


$

243


3.07

%


$

30,188


$

236


3.11

%

Real estate construction loans

1,833


16


3.47



1,807


16


3.51



1,973


17


3.41


Commercial mortgage loans

8,691


74


3.39



8,672


73


3.38



8,698


76


3.45


Lease financing

788


6


3.16



795


6


3.19



823


4


2.33


International loans

1,401


13


3.51



1,453


13


3.68



1,417


13


3.59


Residential mortgage loans

1,882


18


3.79



1,877


18


3.78



1,792


17


3.76


Consumer loans

2,477


20


3.21



2,441


20


3.25



2,268


19


3.24


Total loans (a)

48,972


391


3.17



48,833


389


3.20



47,159


382


3.22














Mortgage-backed securities (b)

9,099


50


2.21



9,057


50


2.23



9,020


52


2.29


Other investment securities

1,133


4


1.26



879


3


1.16



368



0.43


Total investment securities (b)

10,232


54


2.11



9,936


53


2.13



9,388


52


2.22














Interest-bearing deposits with banks

6,869


4


0.25



5,110


3


0.25



5,015


3


0.25


Other short-term investments

118



0.82



102



0.42



110



0.54


Total earning assets

66,191


449


2.70



63,981


445


2.79



61,672


437


2.82














Cash and due from banks

1,095





1,041





963




Allowance for loan losses

(628)





(613)





(601)




Accrued income and other assets

4,675





4,554





4,364




Total assets

$

71,333





$

68,963





$

66,398
















Money market and interest-bearing checking deposits

$

24,298


7


0.11



$

23,659


6


0.11



$

23,146


6


0.11


Savings deposits

1,860



0.02



1,834



0.02



1,759



0.03


Customer certificates of deposit

4,232


4


0.37



4,422


4


0.37



4,824


4


0.36


Foreign office time deposits

127



0.70



118


1


1.26



159


1


1.43


Total interest-bearing deposits

30,517


11


0.14



30,033


11


0.14



29,888


11


0.15














Short-term borrowings

91



0.04



78



0.04



231



0.03


Medium- and long-term debt

3,175


15


1.85



2,661


12


1.83



2,649


11


1.75


Total interest-bearing sources

33,783


26


0.30



32,772


23


0.28



32,768


22


0.28














Noninterest-bearing deposits

28,623





27,365





25,275




Accrued expenses and other liabilities

1,368





1,314





944




Total shareholders' equity

7,559





7,512





7,411




Total liabilities and shareholders' equity

$

71,333





$

68,963





$

66,398
















Net interest income/rate spread (FTE)


$

423


2.40




$

422


2.51




$

415


2.54














FTE adjustment


$

1





$

1





$

1















Impact of net noninterest-bearing sources of funds



0.14





0.14





0.13


Net interest margin (as a percentage of average earning assets) (FTE) (a)



2.54

%




2.65

%




2.67

%



(a)

Accretion of the purchase discount on the acquired loan portfolio of $2 million, $2 million and $3 million in the third quarter 2015, the second quarter 2015 and the third quarter 2014, respectively, increased the net interest margin by 1 basis point, 1 basis point and 2 basis points in each respective period.

(b)

Includes investment securities available-for-sale and investment securities held-to-maturity.

 


CONSOLIDATED STATISTICAL DATA (unaudited)

Comerica Incorporated and Subsidiaries













September 30,

June 30,

March 31,

December 31,

September 30,

(in millions, except per share data)

2015

2015

2015

2014

2014







Commercial loans:






Floor plan

$

3,538


$

3,840


$

3,544


$

3,790


$

3,183


Other

28,239


28,883


28,547


27,730


27,576


Total commercial loans

31,777


32,723


32,091


31,520


30,759


Real estate construction loans

1,874


1,795


1,917


1,955


1,992


Commercial mortgage loans

8,787


8,674


8,558


8,604


8,603


Lease financing

751


786


792


805


805


International loans

1,382


1,420


1,433


1,496


1,429


Residential mortgage loans

1,880


1,865


1,859


1,831


1,797


Consumer loans:






Home equity

1,714


1,682


1,678


1,658


1,634


Other consumer

777


796


744


724


689


Total consumer loans

2,491


2,478


2,422


2,382


2,323


Total loans

$

48,942


$

49,741


$

49,072


$

48,593


$

47,708








Goodwill

$

635


$

635


$

635


$

635


$

635


Core deposit intangible

10


11


12


13


14


Other intangibles

4


4


3


2


1








Common equity tier 1 capital (a) (b)

7,327


7,280


7,230


n/a


n/a


Tier 1 common capital (c)

n/a


n/a


n/a


7,169


7,105


Risk-weighted assets (a) (b)

69,232


69,967


69,514


68,273


67,106








Common equity tier 1 risk-based capital ratio (a) (b)

10.58

%

10.40

%

10.40

%

n/a


n/a


Tier 1 common risk-based capital ratio (c)

n/a


n/a


n/a


10.50

%

10.59

%

Tier 1 risk-based capital ratio (a) (b)

10.58


10.40


10.40


10.50


10.59


Total risk-based capital ratio (a) (b)

12.91


12.38


12.35


12.51


12.83


Leverage ratio (a) (b)

10.29


10.56


10.53


10.35


10.79


Tangible common equity ratio (c)

9.91


9.92


9.97


9.85


9.94








Common shareholders' equity per share of common stock

$

43.02


$

42.18


$

42.12


$

41.35


$

41.26


Tangible common equity per share of common stock (c)

39.36


38.53


38.47


37.72


37.65


Market value per share for the quarter:






High

52.93


53.45


47.94


50.14


52.72


Low

40.01


44.38


40.09


42.73


48.33


Close

41.10


51.32


45.13


46.84


49.86








Quarterly ratios:






Return on average common shareholders' equity

7.19

%

7.21

%

7.20

%

7.96

%

8.29

%

Return on average assets

0.76


0.79


0.78


0.86


0.93


Efficiency ratio (d)

67.08


63.68


68.50


65.26


62.87








Number of banking centers

477


477


482


481


481








Number of employees - full time equivalent

8,941


8,901


8,831


8,876


8,913





(a)

Basel III rules became effective January 1, 2015, with transitional provisions. All prior period data is based on Basel I rules.


(b)

September 30, 2015 amounts and ratios are estimated.

(c)

See Reconciliation of Non-GAAP Financial Measures.

(d)

Noninterest expenses as a percentage of the sum of net interest income (FTE) and noninterest income excluding net securities gains (losses).

n/a - not applicable.

 

PARENT COMPANY ONLY BALANCE SHEETS (unaudited)

Comerica Incorporated









September 30,

December 31,

September 30,

(in millions, except share data)

2015

2014

2014





ASSETS




Cash and due from subsidiary bank

$

5


$


$

5


Short-term investments with subsidiary bank

563


1,133


1,136


Other short-term investments

89


94


97


Investment in subsidiaries, principally banks

7,596


7,411


7,433


Premises and equipment

2


2


2


Other assets

138


138


130


  Total assets

$

8,393


$

8,778


$

8,803






LIABILITIES AND SHAREHOLDERS' EQUITY




Medium- and long-term debt

$

618


$

1,208


$

1,198


Other liabilities

153


168


172


  Total liabilities

771


1,376


1,370






Common stock - $5 par value:




Authorized - 325,000,000 shares




Issued - 228,164,824 shares

1,141


1,141


1,141


Capital surplus

2,165


2,188


2,183


Accumulated other comprehensive loss

(345)


(412)


(317)


Retained earnings

7,007


6,744


6,631


Less cost of common stock in treasury - 51,010,418 shares at 9/30/15, 49,146,225 shares at 12/31/14 and 47,992,721 shares at 9/30/14

(2,346)


(2,259)


(2,205)


  Total shareholders' equity

7,622


7,402


7,433


  Total liabilities and shareholders' equity

$

8,393


$

8,778


$

8,803


 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)

Comerica Incorporated and Subsidiaries


















Accumulated





Common Stock


Other



Total


Shares


Capital

Comprehensive

Retained

Treasury

Shareholders'

(in millions, except per share data)

Outstanding

Amount

Surplus

Loss

Earnings

Stock

Equity









BALANCE AT DECEMBER 31, 2013

182.3


$

1,141


$

2,179


$

(391)


$

6,318


$

(2,097)


$

7,150


Net income





444



444


Other comprehensive income, net of tax




74




74


Cash dividends declared on common stock ($0.59 per share)





(107)



(107)


Purchase of common stock

(4.1)






(200)


(200)


Net issuance of common stock under employee stock plans

2.0



(26)



(24)


91


41


Share-based compensation



31





31


Other



(1)




1



BALANCE AT SEPTEMBER 30, 2014

180.2


$

1,141


$

2,183


$

(317)


$

6,631


$

(2,205)


$

7,433










BALANCE AT DECEMBER 31, 2014

179.0


$

1,141


$

2,188


$

(412)


$

6,744


$

(2,259)


$

7,402


Net income





405



405


Other comprehensive income, net of tax




67




67


Cash dividends declared on common stock ($0.62 per share)





(110)



(110)


Purchase of common stock

(3.8)






(175)


(175)


Purchase and retirement of warrants



(10)





(10)


Net issuance of common stock under employee stock plans

1.0



(21)



(10)


45


14


Net issuance of common stock for warrants

1.0



(21)



(22)


43



Share-based compensation



29





29


BALANCE AT SEPTEMBER 30, 2015

177.2


$

1,141


$

2,165


$

(345)


$

7,007


$

(2,346)


$

7,622


 

BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)

Comerica Incorporated and Subsidiaries




































(dollar amounts in millions)

Business


Retail


Wealth







Three Months Ended September 30, 2015

Bank


Bank


Management


Finance


Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

380



$

158



$

45



$

(162)



$

2



$

423


Provision for credit losses

30



2



(3)





(3)



26


Noninterest income

145



49



59



15



(4)



264


Noninterest expenses

202



185



74



2



(2)



461


Provision (benefit) for income taxes (FTE)

99



7



12



(56)



2



64


Net income (loss)

$

194



$

13



$

21



$

(93)



$

1



$

136


Net loan charge-offs (recoveries)

$

23



$

1



$

(1)



$



$



$

23














Selected average balances:












Assets

$

39,210



$

6,518



$

5,228



$

12,177



$

8,200



$

71,333


Loans

38,113



5,835



5,024







48,972


Deposits

31,397



23,079



4,188



212



264



59,140














Statistical data:












Return on average assets (a)

1.98

%


0.23

%


1.62

%


N/M



N/M



0.76

%

Efficiency ratio (b)

38.41



89.33



71.11



N/M



N/M



67.08















Business


Retail


Wealth







Three Months Ended June 30, 2015

Bank


Bank


Management


Finance


Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

375



$

155



$

45



$

(155)



$

2



$

422


Provision for credit losses

61



(8)



(9)





3



47


Noninterest income

140



46



60



14



1



261


Noninterest expenses

176



182



74



3



1



436


Provision (benefit) for income taxes (FTE)

96



9



14



(54)





65


Net income (loss)

$

182



$

18



$

26



$

(90)



$

(1)



$

135


Net loan charge-offs (recoveries)

$

22



$

1



$

(5)



$



$



$

18














Selected average balances:












Assets

$

39,135



$

6,459



$

5,153



$

11,721



$

6,495



$

68,963


Loans

38,109



5,770



4,954







48,833


Deposits

30,229



22,747



4,060



93



269



57,398














Statistical data:












Return on average assets (a)

1.87

%


0.30

%


2.01

%


N/M



N/M



0.79

%

Efficiency ratio (b)

34.19



89.88



70.27



N/M



N/M



63.68















Business


Retail


Wealth







Three Months Ended September 30, 2014

Bank


Bank


Management


Finance


Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

376



$

153



$

45



$

(166)



7



$

415


Provision for credit losses

(4)





7





2



5


Noninterest income

97



42



59



15



2



215


Noninterest expenses

152



185



78



(29)



11



397


Provision (benefit) for income taxes (FTE)

114



3



7



(49)



(1)



74


Net income (loss)

$

211



$

7



$

12



$

(73)



$

(3)



$

154


Net loan charge-offs (recoveries)

$

(2)



$



$

5



$



$



$

3














Selected average balances:












Assets

$

37,751



$

6,273



$

4,998



$

11,023



$

6,353



$

66,398


Loans

36,746



5,605



4,808







47,159


Deposits

28,815



22,042



3,924



128



254



55,163














Statistical data:












Return on average assets (a)

2.24

%


0.12

%


0.98

%


N/M



N/M



0.93

%

Efficiency ratio (b)

32.12



94.64



75.00



N/M



N/M



62.87


(a)

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

(b)

Noninterest expenses as a percentage of the sum of net interest income (FTE) and noninterest income excluding net securities gains.

FTE - Fully Taxable Equivalent

N/M - Not Meaningful

 

MARKET SEGMENT FINANCIAL RESULTS (unaudited)

Comerica Incorporated and Subsidiaries



































(dollar amounts in millions)







Other


Finance



Three Months Ended September 30, 2015

Michigan


California


Texas


Markets


& Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

180



$

187



$

129



$

87



$

(160)



$

423


Provision for credit losses

6



24



10



(11)



(3)



26


Noninterest income

85



38



34



96



11



264


Noninterest expenses

152



102



97



110





461


Provision (benefit) for income taxes (FTE)

36



37



20



25



(54)



64


Net income (loss)

$

71



$

62



$

36



$

59



$

(92)



$

136


Net loan charge-offs

$

9



$

10



$

4



$



$



$

23














Selected average balances:












Assets

$

13,856



$

17,060



$

11,578



$

8,462



$

20,377



$

71,333


Loans

13,223



16,789



10,997



7,963





48,972


Deposits

21,946



18,372



10,753



7,593



476



59,140














Statistical data:












Return on average assets (a)

1.23

%


1.27

%


1.16

%


2.82

%


N/M



0.76

%

Efficiency ratio (b)

57.49



45.28



59.54



59.86



N/M



67.08





















Other


Finance



Three Months Ended June 30, 2015

Michigan


California


Texas


Markets


& Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

179



$

181



$

130



$

85



$

(153)



$

422


Provision for credit losses

(13)



4



43



10



3



47


Noninterest income

85



37



31



93



15



261


Noninterest expenses

128



100



94



110



4



436


Provision (benefit) for income taxes (FTE)

51



43



10



15



(54)



65


Net income (loss)

$

98



$

71



$

14



$

43



$

(91)



$

135


Net loan charge-offs (recoveries)

$

(2)



$

6



$

5



$

9



$



$

18














Selected average balances:












Assets

$

13,852



$

16,696



$

11,878



$

8,321



$

18,216



$

68,963


Loans

13,290



16,429



11,254



7,860





48,833


Deposits

21,706



17,275



10,959



7,096



362



57,398














Statistical data:












Return on average assets (a)

1.73

%


1.54

%


0.46

%


2.05

%


N/M



0.79

%

Efficiency ratio (b)

48.21



46.04



58.20



61.45



N/M



63.68





















Other


Finance



Three Months Ended September 30, 2014

Michigan


California


Texas


Markets


& Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

179



$

182



$

130



$

83



$

(159)



$

415


Provision for credit losses

(8)



14



3



(6)



2



5


Noninterest income

83



37



36



42



17



215


Noninterest expenses

166



102



96



51



(18)



397


Provision (benefit) for income taxes (FTE)

38



40



25



21



(50)



74


Net income (loss)

$

66



$

63



$

42



$

59



$

(76)



$

154


Net loan charge-offs (recoveries)

$

3



$

6



$



$

(6)



$



$

3














Selected average balances:












Assets

$

13,724



$

15,768



$

11,835



$

7,695



$

17,376



$

66,398


Loans

13,248



15,509



11,147



7,255





47,159


Deposits

21,214



16,350



10,633



6,584



382



55,163














Statistical data:












Return on average assets (a)

1.19

%


1.47

%


1.40

%


3.07

%


N/M



0.93

%

Efficiency ratio (b)

62.91



46.49



57.91



41.46



N/M



62.87


(a)

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

(b)

Noninterest expenses as a percentage of the sum of net interest income (FTE) and noninterest income excluding net securities gains.

FTE - Fully Taxable Equivalent

N/M - Not Meaningful

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

Comerica Incorporated and Subsidiaries













September 30,

June 30,

March 31,

December 31,

September 30,

(dollar amounts in millions)

2015

2015

2015

2014

2014







Tier 1 Common Capital Ratio:






Tier 1 and Tier 1 common capital (a)

n/a


n/a


n/a


$

7,169


$

7,105








Risk-weighted assets (a)

n/a


n/a


n/a


68,269


67,102








Tier 1 and Tier 1 common risk-based capital ratio

n/a


n/a


n/a


10.50

%

10.59

%







Tangible Common Equity Ratio:






Common shareholders' equity

$

7,622


$

7,523


$

7,500


$

7,402


$

7,433


Less:






Goodwill

635


635


635


635


635


Other intangible assets

14


15


15


15


15


Tangible common equity

$

6,973


$

6,873


$

6,850


$

6,752


$

6,783








Total assets

$

71,012


$

69,945


$

69,333


$

69,186


$

68,883


Less:






Goodwill

635


635


635


635


635


Other intangible assets

14


15


15


15


15


Tangible assets

$

70,363


$

69,295


$

68,683


$

68,536


$

68,233








Common equity ratio

10.73

%

10.76

%

10.82

%

10.70

%

10.79

%

Tangible common equity ratio

9.91


9.92


9.97


9.85


9.94








Tangible Common Equity per Share of Common Stock:






Common shareholders' equity

$

7,622


$

7,523


$

7,500


$

7,402


$

7,433


Tangible common equity

6,973


6,873


6,850


6,752


6,783








Shares of common stock outstanding (in millions)

177


178


178


179


180








Common shareholders' equity per share of common stock

$

43.02


$

42.18


$

42.12


$

41.35


$

41.26


Tangible common equity per share of common stock

39.36


38.53


38.47


37.72


37.65


(a)

Tier 1 capital and risk-weighted assets as defined by Basel I risk-based capital rules.

n/a - not applicable.

 

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 Basel I risk-based capital rules in effect through December 31, 2014. Effective January 1, 2015, regulatory capital components and risk-weighted assets are defined by and calculated in conformity with Basel III risk-based capital rules. 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. Tangible common equity per share of common stock removes the effect of intangible assets from common shareholders equity per share of common stock. Comerica believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.

Logo - http://photos.prnewswire.com/prnh/20010807/CMALOGO

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/comerica-reports-third-quarter-2015-net-income-of-136-million-or-74-cents-per-share-300160944.html

SOURCE Comerica Incorporated


Source: PR Newswire (October 16, 2015 - 6:40 AM EDT)

News by QuoteMedia
www.quotemedia.com