DALLAS, April 17, 2015 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported first quarter 2015 net income of $134 million, compared to $149 million for the fourth quarter 2014 and $139 million for the first quarter 2014. Earnings per diluted share were 73 cents for the first quarter 2015, compared to 80 cents for the fourth quarter 2014 and 73 cents for the first quarter 2014.

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(dollar amounts in millions, except per share data)

1st Qtr '15


4th Qtr '14


1st Qtr '14


Net interest income

$

413



$

415



$

410



Provision for credit losses

14



2



9



Noninterest income (a)

256



225



208



Noninterest expenses (a)

460



419



406



Provision for income taxes

61



70



64










Net income

134



149



139










Net income attributable to common shares

132



148



137










Diluted income per common share

0.73



0.80



0.73










Average diluted shares (in millions)

182



184



187










Basel III common equity Tier 1 capital ratio (b) (c)

10.43

%


n/a



n/a



Tier 1 common capital ratio (b) (d)

n/a



10.50

%


10.58

%


Tangible common equity ratio (d)

9.97



9.85



10.20



(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 an increase of $44 million to both noninterest income and noninterest expenses in the first quarter 2015.

(b)

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.

(c)

March 31, 2015 ratio is estimated.

(d)

See Reconciliation of Non-GAAP Financial Measures.

n/a - not applicable.

"Our first quarter results reflect our strong focus on relationships and ability to generate loans in a highly competitive environment as we maintain our pricing and credit discipline," said Ralph W. Babb, Jr., chairman and chief executive officer. "Average loans were up $3.1 billion, or 7 percent, compared to a year ago. Relative to the fourth quarter, average loans grew $790 million, or 2 percent, with growth across all of our markets. Average loans in our Energy business line increased about $200 million, peaking in February, then declining as customers adjusted their cash flow needs and were able to access the capital markets. Average loan growth was also driven by increases in Technology and Life Sciences, National Dealer Services, general Middle Market and Small Business.

"First quarter net interest income was relatively stable, and credit quality continued to be strong. Our capital position remains solid. Share repurchases under our equity repurchase program, combined with dividends, returned $95 million to shareholders in the first quarter. We remain focused on the long term and carrying out our relationship banking strategy, which has served us well over many cycles, and we continue to believe we are positioned to benefit from a rising rate environment."

First Quarter 2015 Compared to Fourth Quarter 2014 

  • Average total loans increased $790 million, or 2 percent, to $48.2 billion, primarily reflecting a $699 million increase in commercial loans. The increase in commercial loans was primarily driven by increases in Energy, general Middle Market, Technology and Life Sciences and National Dealer Services. Average loans increased across all markets. Period-end total loans increased $479 million, to $49.1 billion.
  • Average total deposits decreased $770 million, or 1 percent, to $57.0 billion, following robust growth of $2.6 billion, or 5 percent, in the fourth quarter 2014. The decrease primarily reflected a decline in noninterest-bearing deposits of $807 million, largely driven by Corporate Banking. Period-end total deposits increased $84 million, to $57.6 billion.
  • Net interest income remained relatively stable at $413 million.
  • Overall credit quality remained strong. The allowance for credit losses increased $5 million, primarily reflecting the impact of loan growth and increased reserves for loans related to energy(a), including a qualitative component, partially offset by improvements in credit quality in the remainder of the portfolio. Net charge-offs were $8 million, or 0.07 percent of average loans, in the first quarter 2015, compared to $1 million, or 0.01 percent, in the fourth quarter 2014. As a result, the provision for credit losses increased to $14 million in the first quarter 2015.
  • Excluding the impact of a change in accounting presentation for a card program ($44 million), noninterest income decreased $13 million in the first quarter 2015, primarily reflecting decreases in customer derivative income and commercial lending fees.
  • Excluding the impact of the change in accounting presentation for a card program ($44 million), noninterest expenses decreased $3 million in the first quarter 2015, primarily reflecting lower net occupancy and consulting expenses, partially offset by a seasonal net increase in compensation expense.
  • Capital remained solid at March 31, 2015, as evidenced by an estimated common equity Tier 1 capital ratio of 10.43 percent and a tangible common equity ratio of 9.97 percent. As previously announced, the Federal Reserve completed its 2015 Comprehensive Capital Analysis and Review (CCAR) in March 2015 and did not object to the capital distributions contemplated in Comerica's capital plan. Basel III capital rules became effective for Comerica on January 1, 2015.
  • Comerica repurchased approximately 1.4 million shares of common stock during the first quarter 2015 under the equity repurchase program. Together with dividends of $0.20 per share, $95 million was returned to shareholders.

First Quarter 2015 Compared to First Quarter 2014

  • Average total loans increased $3.1 billion, or 7 percent, reflecting increases in almost all lines of business.
  • Average total deposits increased $4.2 billion, or 8 percent, driven by an increase in noninterest-bearing deposits of $3.5 billion, or 15 percent, and reflecting increases in all major lines of business.
  • Net income decreased $5 million, or 3 percent, primarily reflecting revenue increases offset by higher outside processing expenses related to revenue generating activities and increases in the provision for credit losses and technology-related contract labor expenses.

(a) Loans related to energy at March 31, 2015 included approximately $3.6 billion of outstanding loans in our Energy business line as well as approximately $750 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)

1st Qtr '15


4th Qtr '14


1st Qtr '14

Net interest income

$

413



$

415



$

410








Net interest margin

2.64

%


2.57

%


2.77

%







Selected average balances:






Total earning assets

$

63,480



$

64,453



$

59,916


Total loans

48,151



47,361



45,075


Total investment securities

9,907



9,365



9,282


Federal Reserve Bank deposits

5,176



7,463



5,311














Total deposits

56,990



57,760



52,770


Total noninterest-bearing deposits

26,697



27,504



23,236


 

  • Net interest income decreased $2 million to $413 million in the first quarter 2015, compared to the fourth quarter 2014.
    • Interest on loans decreased $4 million, primarily reflecting the impact of two fewer days in the first quarter (-$7 million), a decrease in accretion of the purchase discount on the acquired loan portfolio (-$6 million), lower loan prepayment fees and interest recognized on nonaccrual loans (-$4 million), partially offset by the impact of a negative residual value adjustment to assets in the leasing portfolio in the fourth quarter 2014 (+$7 million) and the benefit from an increase in average loan balances (+$6 million).
    • Interest on investment securities increased $2 million, reflecting an increase in average balances (+$3 million), partially offset by lower yields (-$1 million).
  • The net interest margin of 2.64 percent increased 7 basis points compared to the fourth quarter 2014, primarily reflecting a decrease in Federal Reserve Bank deposits (+9 basis points) and the impact of the negative leasing residual value adjustment (+5 basis points), partially offset by a decline in accretion of the purchase discount on the acquired loan portfolio (-4 basis points) and lower loan prepayment fees and nonaccrual interest recognized (-2 basis points).
  • Average earning assets decreased $1.0 billion, to $63.5 billion in the first quarter 2015, compared to the fourth quarter 2014, primarily reflecting a decrease of $2.3 billion in Federal Reserve Bank deposits, partially offset by increases of $790 million in average loans and $542 million in average investment securities.

Noninterest Income
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 the change was an increase of $44 million to both noninterest income and noninterest expenses in the first quarter 2015. Future quarters will be similarly impacted by this change.

Excluding the impact of this change, noninterest income decreased $13 million in the first quarter 2015, compared to $225 million for the fourth quarter 2014. The decrease primarily reflected decreases of $7 million in customer derivative income and $4 million in commercial lending fees from high fourth quarter 2014 levels.

Noninterest Expenses
Excluding the impact of the above-described change, noninterest expenses decreased $3 million in the first quarter 2015, compared to $419 million for the fourth quarter 2014. Net occupancy expense decreased $8 million, largely reflecting a $5 million real estate optimization charge incurred in the fourth quarter 2014 that was not repeated in the first quarter 2015 and several discrete first quarter items. Consulting fees, a component of other noninterest expenses, were $3 million lower. Salaries and benefits expense increased $8 million, primarily reflecting seasonal fluctuations including increases in share-based compensation expense and payroll taxes in the first quarter 2015, partially offset by lower healthcare costs and the impact of two fewer days in the quarter.

Credit Quality
"Credit quality continued to be strong in the first quarter," said Babb. "Net charge-offs remained low at $8 million, or 7 basis points. At this point in the cycle, our energy portfolio continues to perform well, with only modest negative credit migration. However, in light of the fact that oil and gas prices remain depressed, we expect that our criticized loans may increase from current very low levels as the year progresses. In fact, our robust allowance methodology resulted in an increase to our reserve for energy exposure, including an increase to the qualitative component, in the first quarter. Overall, we had a modest increase of $5 million in our total allowance for credit losses and an increase in the provision for credit losses to $14 million.

"Our energy customers are generally decreasing their expenditures and accessing the capital markets, among other actions, to help mitigate the impact of lower oil and gas prices on their businesses. We are actively engaged with our customers, assisting them as they navigate the cycle. Our deep understanding of the sector and our customers is a key component of how we have managed this business successfully for more than 30 years."
















(dollar amounts in millions)

1st Qtr '15


4th Qtr '14


1st Qtr '14

Net credit-related charge-offs

$

8



$

1



$

12


Net credit-related charge-offs/Average total loans

0.07

%


0.01

%


0.10

%







Provision for credit losses

$

14



$

2



$

9








Nonperforming loans (a)

279



290



338


Nonperforming assets (NPAs) (a)

288



300



352


NPAs/Total loans and foreclosed property

0.59

%


0.62

%


0.76

%







Loans past due 90 days or more and still accruing

$

12



$

5



$

10








Allowance for loan losses

601



594



594


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

39



41



37


Total allowance for credit losses

640



635



631








Allowance for loan losses/Period-end total loans

1.22

%


1.22

%


1.28

%

Allowance for loan losses/Nonperforming loans

216



205



176


(a)

Excludes loans acquired with credit impairment.

(b)

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



 

  • Net charge-offs increased $7 million to $8 million, or 0.07 percent of average loans, in the first quarter 2015, compared to $1 million, or 0.01 percent, in the fourth quarter 2014.
  • Criticized loans increased $174 million to $2.1 billion at March 31, 2015, compared to $1.9 billion at December 31, 2014, including an increase of approximately $50 million in criticized loans related to energy.

Balance Sheet and Capital Management
Total assets and common shareholders' equity were $69.3 billion and $7.5 billion, respectively, at March 31, 2015, compared to $69.2 billion and $7.4 billion, respectively, at December 31, 2014.

There were approximately 178 million common shares outstanding at March 31, 2015. Share repurchases of $59 million (1.4 million shares) under the equity repurchase program, combined with dividends, returned 71 percent of first quarter 2015 net income to shareholders.

As previously announced, the Federal Reserve completed its 2015 CCAR review in March 2015 and did not object to Comerica's capital plan and capital distributions contemplated in the plan. Comerica's capital plan provides for up to $393 million in equity repurchases for the five-quarter period ending June 30, 2016. Comerica's capital plan further contemplates a 1-cent increase in the quarterly dividend to $0.21 per common share. The dividend proposal will be considered by Comerica's Board of Directors at its next scheduled meeting on April 28, 2015.

In July 2013, U.S. banking regulators issued a final rule for the U.S. adoption of the Basel III regulatory capital framework ("Basel III"). Basel III includes a more stringent definition of capital and introduces a new common equity Tier 1 capital requirement; sets forth two comprehensive methodologies for calculating risk-weighted assets, a standardized approach and an advanced approach; introduces a capital conservation buffer; and sets out minimum capital ratios and overall capital adequacy standards. As a banking organization subject to the standardized approach, Basel III became effective for Comerica on January 1, 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 capital conservation buffer phases in beginning January 1, 2016 and will be fully implemented on January 1, 2019.

The estimated common equity Tier 1 capital ratio, reflective of transition provisions and excluding most elements of accumulated other comprehensive income ("AOCI"), was 10.43 percent at March 31, 2015. The estimated ratio under fully phased-in Basel III capital rules is not significantly different from the transitional ratio. Comerica's tangible common equity ratio was 9.97 percent at March 31, 2015, an increase of 12 basis points from December 31, 2014.

Full-Year 2015 Outlook
Management expectations for full-year 2015 compared to full-year 2014, assuming a continuation of the current economic and low-rate environment, are as follows:

  • Average full-year loan growth consistent with 2014, reflecting typical seasonality throughout the year and continued focus on pricing and structure discipline.
  • Net interest income relatively stable, assuming no rise in interest rates, reflecting a decrease of about $30 million in purchase accounting accretion, to about $6 million, and the impact of a continuing low rate environment on asset yields, offset by earning asset growth.
  • Provision for credit losses higher, consistent with modest net charge-offs and continued loan growth.
  • Noninterest income relatively stable, excluding the impact of the change in accounting presentation for a card program. Stable noninterest income reflects growth in fee income, particularly card fees and fiduciary income, mostly offset by a decline in warrant income and regulatory impacts on letter of credit and derivative income.
  • Noninterest expenses higher, excluding the impact of the change in accounting presentation for a card program, reflecting increases in technology, regulatory and pension expenses, as well as typical inflationary pressures, with continued focus on driving efficiencies for the long term.
  • Income tax expense to approximate 33 percent of pre-tax income.

Business Segments
Comerica's operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank and Wealth Management. The Finance Division is also reported as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at March 31, 2015 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses first quarter 2015 results compared to fourth quarter 2014.

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




















(dollar amounts in millions)

1st Qtr '15


4th Qtr '14


1st Qtr '14

Business Bank

$

189


85

%


$

214


86

%


$

200


86

%

Retail Bank

17


8



12


5



9


4


Wealth Management

16


7



23


9



24


10



222


100

%


249


100

%


233


100

%

Finance

(89)




(100)




(92)



Other (a)

1




—




(2)



   Total

$

134




$

149




$

139



(a)

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

 


Business Bank














(dollar amounts in millions)

1st Qtr '15



4th Qtr '14



1st Qtr '14


Net interest income (FTE)

$

370



$

387



$

371


Provision for credit losses

25



10



16


Noninterest income

142



104



91


Noninterest expenses

200



148



146


Net income

189



214



200








Net credit-related charge-offs

9



—



11








Selected average balances:






Assets

38,794



38,039



35,896


Loans

37,763



37,034



34,926


Deposits

30,169



30,925



27,023


 

  • Average loans increased $729 million, primarily reflecting increases in Energy, Technology and Life Sciences, National Dealer Services and general Middle Market.
  • Average deposits decreased $756 million, primarily reflecting a decrease in Corporate Banking noninterest-bearing deposits.
  • Net interest income decreased $17 million, primarily due to the decrease in average deposits and a lower funds transfer pricing (FTP) crediting rate. The benefit from an increase in average loan balances and the impact of a negative residual value adjustment to assets in the leasing portfolio in the fourth quarter 2014 were largely offset by a decrease in purchase accounting accretion and two fewer days in the quarter.
  • The allowance for credit losses increased $6 million, primarily reflecting the impact of loan growth and increased reserves for loans related to energy, including a qualitative component, partially offset by improvements in credit quality in the remainder of the portfolio. The provision for credit losses increased $15 million.
  • Excluding the impact of the change in accounting presentation for certain card programs as described previously, noninterest income decreased $6 million, primarily due to decreases in customer derivative income and commercial lending fees from high fourth quarter 2014 levels.
  • Excluding the impact of the change in accounting presentation for certain card programs as described previously, noninterest expenses increased $8 million, primarily due to an increase in allocated corporate overhead expenses and a seasonal net increase in salaries and benefits expense.

 


Retail Bank














(dollar amounts in millions)

1st Qtr '15



4th Qtr '14



1st Qtr '14


Net interest income (FTE)

$

151



$

152



$

147


Provision for credit losses

(8)



(4)



2


Noninterest income

43



44



41


Noninterest expenses

176



182



173


Net income

17



12



9








Net credit-related charge-offs

—



3



4








Selected average balances:






Assets

6,229



6,155



6,061


Loans

5,554



5,482



5,388


Deposits

22,378



22,274



21,595


 

  • Average loans increased $72 million, primarily due to increases in Small Business and consumer loans in Retail Banking.
  • Average deposits increased $104 million, primarily reflecting an increase in money market and interest-bearing checking deposits, partially offset by decreases in time deposits and noninterest-bearing deposits.
  • The provision for credit losses decreased $4 million, primarily due to credit quality improvements in Small Business.
  • Noninterest expenses decreased $6 million, primarily due to a decrease in occupancy expense resulting from a real estate optimization charge incurred in the fourth quarter 2014 that was not repeated in the first quarter 2015.

 


Wealth Management














(dollar amounts in millions)

1st Qtr '15



4th Qtr '14



1st Qtr '14


Net interest income (FTE)

$

43



$

47



$

45


Provision for credit losses

(1)



(9)



(8)


Noninterest income

58



61



60


Noninterest expenses

77



80



76


Net income

16



23



24








Net credit-related charge-offs (recoveries)

(1)



(2)



(3)








Selected average balances:






Assets

5,029



5,034



4,930


Loans

4,834



4,845



4,761


Deposits

3,996



4,093



3,582


 

  • Average deposits decreased $97 million, primarily reflecting a decrease in noninterest-bearing deposits.
  • Net interest income decreased $4 million, primarily due to a decrease in FTP credits, largely due to the decrease in average deposits, and two fewer days in the quarter.
  • The provision for credit losses increased $8 million, primarily reflecting a large benefit to the provision recognized in the fourth quarter 2014 from a reduction in reserves due to the payoff of a single large criticized credit.
  • Noninterest income decreased $3 million, primarily reflecting a securities loss in the first quarter.
  • Noninterest expenses decreased $3 million, reflecting small decreases in several categories.

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 March 31, 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)

1st Qtr '15


4th Qtr '14


1st Qtr '14

Michigan

$

73


33

%


$

79


32

%


$

66


28

%

California

73


33



83


33



63


27


Texas

32


14



40


16



48


21


Other Markets

44


20



47


19



56


24



222


100

%


249


100

%


233


100

%

Finance & Other (a)

(88)




(100)




(94)



   Total

$

134




$

149




$

139



(a)

Includes items not directly associated with the geographic markets.

 

  • Average loans increased $416 million in California, $208 million in Texas (primarily Energy) and $81 million in Michigan (primarily National Dealer Services). The increase in California was led by Technology and Life Sciences, general Middle Market and National Dealer Services.
  • Average deposits decreased $1.2 billion in California and increased $185 million and $180 million in Texas and Michigan, respectively. The decrease in California was primarily due to decreases in noninterest-bearing deposits in Corporate Banking, general Middle Market, Technology and Life Sciences and Private Banking.
  • Net interest income decreased $16 million and $8 million in California and Texas, respectively, and increased $4 million in Michigan. The decrease in California primarily reflected a decrease in FTP credits, largely due to the decrease in average deposits, partially offset by the benefit from an increase in average loans. The decrease in Texas was primarily the result of a decrease in the accretion of the purchase discount on the acquired loan portfolio. The increase in Michigan primarily reflected the impact of a negative leasing residual adjustment in the fourth quarter. Net interest income in all three markets reflected the impact of two fewer days in the first quarter.
  • The allowance for credit losses increased $3 million in Michigan, $7 million in California and $1 million in Texas. In all markets, the changes in reserves primarily reflected the impact of loan growth and increased reserves for loans related to energy, including a qualitative component, partially offset by improvements in credit quality in the remainder of the portfolio. Net charge-offs increased $8 million in Michigan, remained stable in California and increased $1 million in Texas. The provision for credit losses increased $11 million in Michigan, $7 million in California and $3 million in Texas.
  • Noninterest income decreased $8 million and $2 million in Michigan and Texas, respectively, and was unchanged in California. The decrease in Michigan was primarily due to decreases in customer derivative income and commercial lending fees. The decrease in Texas was primarily due to a decrease in commercial lending fees.
  • Noninterest expenses decreased $2 million in both Michigan and California, and increased $1 million in Texas.

 

Michigan Market














(dollar amounts in millions)

1st Qtr '15



4th Qtr '14



1st Qtr '14


Net interest income (FTE)

$

177



$

173



$

183


Provision for credit losses

(8)



(19)



3


Noninterest income

81



89



84


Noninterest expenses

155



157



161


Net income

73



79



66








Net credit-related charge-offs (recoveries)

3



(5)



—








Selected average balances:






Assets

13,736



13,605



13,819


Loans

13,223



13,142



13,473


Deposits

21,710



21,530



20,642



California Market














(dollar amounts in millions)

1st Qtr '15



4th Qtr '14



1st Qtr '14


Net interest income (FTE)

$

176



$

192



$

172


Provision for credit losses

(3)



(10)



11


Noninterest income

38



38



34


Noninterest expenses

100



102



96


Net income

73



83



63








Net credit-related charge-offs

1



1



10








Selected average balances:






Assets

16,461



16,035



15,133


Loans

16,193



15,777



14,824


Deposits

16,837



18,028



14,782



Texas Market














(dollar amounts in millions)

1st Qtr '15



4th Qtr '14



1st Qtr '14


Net interest income (FTE)

$

131



$

139



$

136


Provision for credit losses

21



18



6


Noninterest income

36



38



34


Noninterest expenses

96



95



90


Net income

32



40



48








Net credit-related charge-offs

3



2



6








Selected average balances:






Assets

12,193



12,003



11,070


Loans

11,535



11,327



10,364


Deposits

11,010



10,825



10,875


Conference Call and Webcast
Comerica will host a conference call to review first quarter 2015 financial results at 7 a.m. CT Friday, April 17, 2015. Interested parties may access the conference call by calling (877) 523-5249 or (210) 591-1147 (event ID No. 99335770). 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


March 31,

December 31,

March 31,

(in millions, except per share data)

2015

2014

2014

PER COMMON SHARE AND COMMON STOCK DATA




Diluted net income

$

0.73


$

0.80


$

0.73


Cash dividends declared

0.20


0.20


0.19






Average diluted shares (in thousands)

182,270


183,728


186,701


KEY RATIOS




Return on average common shareholders' equity

7.20

%

7.96

%

7.68

%

Return on average assets

0.78


0.86


0.86


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

10.43


n/a


n/a


Tier 1 common risk-based capital ratio (c)

n/a


10.50


10.58


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

10.43


10.50


10.58


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

12.39


12.51


13.00


Leverage ratio (a) (b)

10.53


10.35


10.85


Tangible common equity ratio (c)

9.97


9.85


10.20


AVERAGE BALANCES




Commercial loans

$

31,090


$

30,391


$

28,362


Real estate construction loans

1,938


1,920


1,827


Commercial mortgage loans

8,581


8,609


8,770


Lease financing

797


818


848


International loans

1,512


1,455


1,301


Residential mortgage loans

1,856


1,821


1,724


Consumer loans

2,377


2,347


2,243


Total loans

48,151


47,361


45,075






Earning assets

63,480


64,453


59,916


Total assets

68,739


69,311


64,708






Noninterest-bearing deposits

26,697


27,504


23,236


Interest-bearing deposits

30,293


30,256


29,534


Total deposits

56,990


57,760


52,770






Common shareholders' equity

7,453


7,518


7,229


NET INTEREST INCOME (fully taxable equivalent basis)







Net interest income

$

414


$

416


$

411


Net interest margin

2.64

%

2.57

%

2.77

%

CREDIT QUALITY




Total nonperforming assets

$

288


$

300


$

352






Loans past due 90 days or more and still accruing

12


5


10






Net loan charge-offs

8


1


12






Allowance for loan losses

601


594


594


Allowance for credit losses on lending-related commitments

39


41


37


Total allowance for credit losses

640


635


631






Allowance for loan losses as a percentage of total loans

1.22

%

1.22

%

1.28

%

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

0.07


0.01


0.10


Nonperforming assets as a percentage of total loans and foreclosed property

0.59


0.62


0.76


Allowance for loan losses as a percentage of total nonperforming loans

216


205


176


(a)

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

(b)

March 31, 2015 ratios are estimated.

(c)

See Reconciliation of Non-GAAP Financial Measures.

(d)

Lending-related commitment charge-offs were zero in all periods presented.

n/a - not applicable.

 

 

CONSOLIDATED BALANCE SHEETS

Comerica Incorporated and Subsidiaries






March 31,

December 31,

March 31,

(in millions, except share data)

2015

2014

2014


(unaudited)


(unaudited)

ASSETS




Cash and due from banks

$

1,170


$

1,026


$

1,186






Interest-bearing deposits with banks

4,792


5,045


4,434


Other short-term investments

101


99


105






Investment securities available-for-sale

8,214


8,116


9,487


Investment securities held-to-maturity

1,871


1,935


—






Commercial loans

32,091


31,520


29,774


Real estate construction loans

1,917


1,955


1,847


Commercial mortgage loans

8,558


8,604


8,801


Lease financing

792


805


849


International loans

1,433


1,496


1,250


Residential mortgage loans

1,859


1,831


1,751


Consumer loans

2,422


2,382


2,217


Total loans

49,072


48,593


46,489


Less allowance for loan losses

(601)


(594)


(594)


Net loans

48,471


47,999


45,895






Premises and equipment

531


532


583


Accrued income and other assets

4,186


4,438


3,991


Total assets

$

69,336


$

69,190


$

65,681






LIABILITIES AND SHAREHOLDERS' EQUITY




Noninterest-bearing deposits

$

27,394


$

27,224


$

23,955






Money market and interest-bearing checking deposits

23,727


23,954


22,485


Savings deposits

1,817


1,752


1,742


Customer certificates of deposit

4,497


4,421


5,099


Foreign office time deposits

135


135


469


Total interest-bearing deposits

30,176


30,262


29,795


Total deposits

57,570


57,486


53,750






Short-term borrowings

80


116


160


Accrued expenses and other liabilities

1,500


1,507


954


Medium- and long-term debt

2,686


2,679


3,534


Total liabilities

61,836


61,788


58,398






Common stock - $5 par value:




Authorized - 325,000,000 shares




Issued - 228,164,824 shares

1,141


1,141


1,141


Capital surplus

2,188


2,188


2,182


Accumulated other comprehensive loss

(370)


(412)


(325)


Retained earnings

6,841


6,744


6,414


Less cost of common stock in treasury - 50,114,399 shares at 3/31/15, 49,146,225 shares at 12/31/14, and 46,492,524 shares at 3/31/14

(2,300)


(2,259)


(2,129)


Total shareholders' equity

7,500


7,402


7,283


Total liabilities and shareholders' equity

$

69,336


$

69,190


$

65,681


 

 

CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries














First

Fourth

Third

Second

First


First Quarter 2015 Compared To:


Quarter

Quarter

Quarter

Quarter

Quarter


Fourth Quarter 2014


First Quarter 2014

(in millions, except per share data)

2015

2014

2014

2014

2014


Amount

Percent


Amount

Percent

INTEREST INCOME




























Interest and fees on loans

$

379


$

383


$

381


$

385


$

376



$

(4)


(1)%



$

3


1

%

Interest on investment securities

53


51


52


53


55



2


4



(2)


(3)


Interest on short-term investments

3


4


3


3


4



(1)


(28)



(1)


—


Total interest income

435


438


436


441


435



(3)


(1)



—


—


INTEREST EXPENSE





















Interest on deposits

11


12


11


11


11



(1)


(4)



—


—


Interest on medium- and long-term debt

11


11


11


14


14



—


—



(3)


(14)


 Total interest expense

22


23


22


25


25



(1)


(2)



(3)


(9)


 Net interest income

413


415


414


416


410



(2)


(1)



3


1


Provision for credit losses

14


2


5


11


9



12


N/M



5


52


Net interest income after provision for credit losses

399


413


409


405


401



(14)


(4)



(2)


—


NONINTEREST INCOME





















Service charges on deposit accounts

55


53


54


54


54



2


4



1


2


Fiduciary income

48


47


44


45


44



1


2



4


8


Commercial lending fees

25


29


26


23


20



(4)


(14)



5


24


Card fees

68


24


23


22


23



44


N/M



45


N/M


Letter of credit fees

13


14


14


15


14



(1)


(6)



(1)


(9)


Bank-owned life insurance

9


8


11


11


9



1


1



—


—


Foreign exchange income

10


10


9


12


9



—


—



1


11


Brokerage fees

4


4


4


4


5



—


—



(1)


(7)


Net securities (losses) gains

(2)


—


(1)


—


1



(2)


N/M



(3)


N/M


Other noninterest income

26


36


31


34


29



(10)


(25)



(3)


(8)


Total noninterest income

256


225


215


220


208



31


14



48


23


NONINTEREST EXPENSES





















Salaries and benefits expense

253


245


248


240


247



8


3



6


3


Net occupancy expense

38


46


46


39


40



(8)


(17)



(2)


(6)


Equipment expense

13


14


14


15


14



(1)


(4)



(1)


(7)


Outside processing fee expense

78


33


31


30


28



45


N/M



50


N/M


Software expense

23


23


25


25


22



—


—



1


6


Litigation-related expense

1


—


(2)


3


3



1


N/M



(2)


(66)


FDIC insurance expense

9


8


9


8


8



1


11



1


19


Advertising expense

6


7


5


5


6



(1)


(17)



—


—


Gain on debt redemption

—


—


(32)


—


—



—


—



—


—


Other noninterest expenses

39


43


53


39


38



(4)


(9)



1


3


Total noninterest expenses

460


419


397


404


406



41


10



54


13


Income before income taxes

195


219


227


221


203



(24)


(11)



(8)


(4)


Provision for income taxes

61


70


73


70


64



(9)


(14)



(3)


(5)


NET INCOME

134


149


154


151


139



(15)


(10)



(5)


(3)


Less income allocated to participating securities

2


1


2


2


2



1


N/M



—


—


Net income attributable to common shares

$

132


$

148


$

152


$

149


$

137



$

(16)


(10)%



$

(5)


(3)%


Earnings per common share:












Basic

$

0.75


$

0.83


$

0.85


$

0.83


$

0.76



$

(0.08)


(10)%



$

(0.01)


(1)%


Diluted

0.73


0.80


0.82


0.80


0.73



(0.07)


(9)



—


—














Comprehensive income

176


54


141


172


205



122


N/M



(29)


(14)














Cash dividends declared on common stock

36


36


36


36


35



—


—



1


3


Cash dividends declared per common share

0.20


0.20


0.20


0.20


0.19



—


—



0.01


5



N/M - Not Meaningful

 

 

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)

Comerica Incorporated and Subsidiaries









2015


2014

(in millions)

1st Qtr


4th Qtr

3rd Qtr

2nd Qtr

1st Qtr








Balance at beginning of period

$

594



$

592


$

591


$

594


$

598









Loan charge-offs:











Commercial

19



8


13


19


19


Commercial mortgage

—



2


7


5


8


International

2



6


—


—


—


Residential mortgage

—



1


1


—


—


Consumer

2



3


3


4


3


Total loan charge-offs

23



20


24


28


30









Recoveries on loans previously charged-off:













Commercial

9



6


6


11


11


Real estate construction

—



2


1


1


—


Commercial mortgage

3



10


12


3


3


Lease financing

—



—


—


—


2


Residential mortgage

1



—


1


3


—


Consumer

2



1


1


1


2


Total recoveries

15



19


21


19


18


Net loan charge-offs

8



1


3


9


12


Provision for loan losses

16



4


4


6


8


Foreign currency translation adjustment

(1)



(1)


—


—


—


Balance at end of period

$

601



$

594


$

592


$

591


$

594









Allowance for loan losses as a percentage of total loans

1.22

%


1.22

%

1.24

%

1.23

%

1.28

%








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

0.07



0.01


0.03


0.08


0.10


 

 



















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

Comerica Incorporated and Subsidiaries









2015


2014

(in millions)

1st Qtr


4th Qtr

3rd Qtr

2nd Qtr

1st Qtr








Balance at beginning of period

$

41



$

43


$

42


$

37


$

36


Add: Provision for credit losses on lending-related commitments

(2)



(2)


1


5


1


Balance at end of period

$

39



$

41


$

43


$

42


$

37









Unfunded lending-related commitments sold

$

1



$

—


$

9


$

—


$

—


 

 

NONPERFORMING ASSETS (unaudited)

Comerica Incorporated and Subsidiaries









2015


2014

(in millions)

1st Qtr


4th Qtr

3rd Qtr

2nd Qtr

1st Qtr








SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS



Nonaccrual loans:







Business loans:







 Commercial

$

113



$

109


$

93


$

72


$

54


 Real estate construction

1



2


18


19


19


 Commercial mortgage

82



95


144


156


162


 International

1



—


—


—


—


 Total nonaccrual business loans

197



206


255


247


235


Retail loans:







 Residential mortgage

37



36


42


45


48


 Consumer:







 Home equity

31



30


31


32


32


 Other consumer

1



1


1


2


2


    Total consumer

32



31


32


34


34


  Total nonaccrual retail loans

69



67


74


79


82


Total nonaccrual loans

266



273


329


326


317


Reduced-rate loans

13



17


17


21


21


Total nonperforming loans (a)

279



290


346


347


338


Foreclosed property

9



10


11


13


14


Total nonperforming assets (a)

$

288



$

300


$

357


$

360


$

352









Nonperforming loans as a percentage of total loans

0.57

%


0.60

%

0.73

%

0.73

%

0.73

%

Nonperforming assets as a percentage of total loans

and foreclosed property

0.59



0.62


0.75


0.75


0.76


Allowance for loan losses as a percentage of total

nonperforming loans

216



205


171


170


176


Loans past due 90 days or more and still accruing

$

12



$

5


$

13


$

7


$

10









ANALYSIS OF NONACCRUAL LOANS

















Nonaccrual loans at beginning of period

$

273



$

329


$

326


$

317


$

350


Loans transferred to nonaccrual (b)

39



41


54


53


19


Nonaccrual business loan gross charge-offs (c)

(21)



(16)


(20)


(24)


(27)


Loans transferred to accrual status (b)

(4)



(18)


—


—


—


Nonaccrual business loans sold (d)

(2)



(24)


(3)


(6)


(3)


Payments/Other (e)

(19)



(39)


(28)


(14)


(22)


Nonaccrual loans at end of period

$

266



$

273


$

329


$

326


$

317


(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

$

21



$

16


$

20


$

24


$

27


Performing criticized loans

—



—


—


—


—


Consumer and residential mortgage loans

2



4


4


4


3


Total gross loan charge-offs

$

23



$

20


$

24


$

28


$

30


(d) Analysis of loans sold:



Nonaccrual business loans

$

2



$

24


$

3


$

6


$

3


Performing criticized loans

7



5


—


8


6


Total criticized loans sold

$

9



$

29


$

3


$

14


$

9


(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














Three Months Ended


March 31, 2015


December 31, 2014


March 31, 2014


Average


Average


Average


Average


Average


Average

(dollar amounts in millions)

Balance

Interest

Rate


Balance

Interest

Rate


Balance

Interest

Rate













Commercial loans

$

31,090


$

235


3.06

%


$

30,391


$

238


3.11

%


$

28,362


$

221


3.17

%

Real estate construction loans

1,938


16


3.36



1,920


16


3.40



1,827


15


3.40


Commercial mortgage loans

8,581


73


3.44



8,609


81


3.70



8,770


86


3.97


Lease financing

797


6


3.05



818


(1)


(0.43)



848


9


4.07


International loans

1,512


14


3.71



1,455


13


3.68



1,301


12


3.68


Residential mortgage loans

1,856


17


3.76



1,821


18


3.86



1,724


17


3.86


Consumer loans

2,377


19


3.21



2,347


19


3.20



2,243


17


3.16


Total loans (a)

48,151


380


3.19



47,361


384


3.22



45,075


377


3.39














Mortgage-backed securities (b)

9,071


51


2.26



8,954


50


2.27



8,911


55


2.42


Other investment securities

836


2


1.10



411


1


0.49



371


—


0.43


Total investment securities (b)

9,907


53


2.16



9,365


51


2.19



9,282


55


2.34














Interest-bearing deposits with banks

5,323


3


0.26



7,622


4


0.26



5,448


4


0.26


Other short-term investments

99


—


1.11



105


—


0.48



111


—


0.66


Total earning assets

63,480


436


2.78



64,453


439


2.71



59,916


436


2.94














Cash and due from banks

1,027





937





913




Allowance for loan losses

(601)





(597)





(603)




Accrued income and other assets

4,833





4,518





4,482




Total assets

$

68,739





$

69,311





$

64,708
















Money market and interest-bearing checking deposits

$

23,960


6


0.11



$

23,841


7


0.11



$

22,261


6


0.11


Savings deposits

1,786


—


0.03



1,771


—


0.03



1,700


—


0.03


Customer certificates of deposit

4,423


4


0.37



4,510


4


0.37



5,109


5


0.36


Foreign office time deposits

124


1


1.46



134


1


1.74



464


—


0.42


Total interest-bearing deposits

30,293


11


0.15



30,256


12


0.15



29,534


11


0.15














Short-term borrowings

110


—


0.06



172


—


0.04



185


—


0.03


Medium- and long-term debt

2,690


11


1.72



2,678


11


1.71



3,545


14


1.53


Total interest-bearing sources

33,093


22


0.27



33,106


23


0.27



33,264


25


0.30














Noninterest-bearing deposits

26,697





27,504





23,236




Accrued expenses and other liabilities

1,496





1,183





979




Total shareholders' equity

7,453





7,518





7,229




Total liabilities and shareholders' equity

$

68,739





$

69,311





$

64,708
















Net interest income/rate spread (FTE)


$

414


2.51




$

416


2.44




$

411


2.64














FTE adjustment


$

1





$

1





$

1















Impact of net noninterest-bearing sources of funds



0.13





0.13





0.13


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



2.64

%




2.57

%




2.77

%

(a)

 Accretion of the purchase discount on the acquired loan portfolio of $3 million, $9 million and $12 million in the first quarter of 2015, the fourth quarter 2014 and the first quarter 2014, respectively, increased the net interest margin by 2 basis points, 5 basis points and 8 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








March 31,

December 31,

September 30,

June 30,

March 31,

(in millions, except per share data)

2015

2014

2014

2014

2014







Commercial loans:






Floor plan

$

3,544


$

3,790


$

3,183


$

3,576


$

3,437


Other

28,547


27,730


27,576


27,410


26,337


Total commercial loans

32,091


31,520


30,759


30,986


29,774


Real estate construction loans

1,917


1,955


1,992


1,939


1,847


Commercial mortgage loans

8,558


8,604


8,603


8,747


8,801


Lease financing

792


805


805


822


849


International loans

1,433


1,496


1,429


1,352


1,250


Residential mortgage loans

1,859


1,831


1,797


1,775


1,751


Consumer loans:






Home equity

1,678


1,658


1,634


1,574


1,533


Other consumer

744


724


689


687


684


Total consumer loans

2,422


2,382


2,323


2,261


2,217


Total loans

$

49,072


$

48,593


$

47,708


$

47,882


$

46,489








Goodwill

$

635


$

635


$

635


$

635


$

635


Core deposit intangible

12


13


14


14


15


Other intangibles

3


2


1


1


1








Common equity tier 1 capital (a) (b)

7,230


n/a


n/a


n/a


n/a


Tier 1 common capital (c)

n/a


7,169


7,105


7,027


6,962


Risk-weighted assets (a) (b)

69,314


68,273


67,106


66,911


65,788








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

10.43

%

n/a


n/a


n/a


n/a


Tier 1 common risk-based capital ratio (c)

n/a


10.50

%

10.59

%

10.50

%

10.58

%

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

10.43


10.50


10.59


10.50


10.58


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

12.39


12.51


12.83


12.52


13.00


Leverage ratio (a) (b)

10.53


10.35


10.79


10.93


10.85


Tangible common equity ratio (c)

9.97


9.85


9.94


10.39


10.20








Common shareholders' equity per share of common stock

$

42.12


$

41.35


$

41.26


$

40.72


$

40.09


Tangible common equity per share of common stock (c)

38.47


37.72


37.65


37.12


36.50


Market value per share for the quarter:



High

47.94


50.14


52.72


52.60


53.50


Low

40.09


42.73


48.33


45.34


43.96


Close

45.13


46.84


49.86


50.16


51.80








Quarterly ratios:






Return on average common shareholders' equity

7.20

%

7.96

%

8.29

%

8.27

%

7.68

%

Return on average assets

0.78


0.86


0.93


0.93


0.86


Efficiency ratio (d)

68.55


65.26


62.87


63.35


65.79








Number of banking centers

482


481


481


481


483








Number of employees - full time equivalent

8,831


8,876


8,913


8,901


8,907




(a)

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

(b)

March 31, 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






March 31,

December 31,

March 31,

(in millions, except share data)

2015

2014

2014





ASSETS




Cash and due from subsidiary bank

$

5


$

—


$

5


Short-term investments with subsidiary bank

1,139


1,133


531


Other short-term investments

95


94


97


Investment in subsidiaries, principally banks

7,479


7,411


7,276


Premises and equipment

2


2


3


Other assets

161


142


156


  Total assets

$

8,881


$

8,782


$

8,068






LIABILITIES AND SHAREHOLDERS' EQUITY




Medium- and long-term debt

$

1,219


$

1,212


$

614


Other liabilities

162


168


171


  Total liabilities

1,381


1,380


785






Common stock - $5 par value:




 Authorized - 325,000,000 shares




 Issued - 228,164,824 shares

1,141


1,141


1,141


Capital surplus

2,188


2,188


2,182


Accumulated other comprehensive loss

(370)


(412)


(325)


Retained earnings

6,841


6,744


6,414


Less cost of common stock in treasury - 50,114,339 shares at 3/31/15, 49,146,225 shares at 12/31/14 and 46,492,524 shares at 3/31/14

(2,300)


(2,259)


(2,129)


  Total shareholders' equity

7,500


7,402


7,283


  Total liabilities and shareholders' equity

$

8,881


$

8,782


$

8,068


 

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

—


—


—


—


139


—


139


Other comprehensive income, net of tax

—


—


—


66


—


—


66


Cash dividends declared on common stock ($0.19 per share)

—


—


—


—


(35)


—


(35)


Purchase of common stock

(1.7)


—


—


—


—


(80)


(80)


Net issuance of common stock under employee stock plans

1.1


—


(11)


—


(8)


48


29


Share-based compensation

—


—


14


—


—


—


14


BALANCE AT MARCH 31, 2014

181.7


$

1,141


$

2,182


$

(325)


$

6,414


$

(2,129)


$

7,283










BALANCE AT DECEMBER 31, 2014

179.0


$

1,141


$

2,188


$

(412)


$

6,744


$

(2,259)


$

7,402


Net income

—


—


—


—


134


—


134


Other comprehensive income, net of tax

—


—


—


42


—


—


42


Cash dividends declared on common stock ($0.20 per share)

—


—


—


—


(36)


—


(36)


Purchase of common stock

(1.5)


—


—


—


—


(66)


(66)


Net issuance of common stock under employee stock plans

0.6


—


(16)


—


(2)


25


7


Share-based compensation

—


—


16


—


—


—


16


Other

—


—


—


—


1


—


1


BALANCE AT MARCH 31, 2015

178.1


$

1,141


$

2,188


$

(370)


$

6,841


$

(2,300)


$

7,500


 

BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)

Comerica Incorporated and Subsidiaries

























(dollar amounts in millions)

Business


Retail


Wealth







Three Months Ended March 31, 2015

Bank


Bank


Management


Finance


Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

370



$

151



$

43



$

(152)



$

2



$

414


Provision for credit losses

25



(8)



(1)



—



(2)



14


Noninterest income

142



43



58



12



1



256


Noninterest expenses

200



176



77



2



5



460


Provision (benefit) for income taxes (FTE)

98



9



9



(53)



(1)



62


Net income (loss)

$

189



$

17



$

16



$

(89)



$

1



$

134


Net credit-related charge-offs (recoveries)

$

9



$

—



$

(1)



$

—



$

—



$

8














Selected average balances:












Assets

$

38,794



$

6,229



$

5,029



$

12,140



$

6,547



$

68,739


Loans

37,763



5,554



4,834



—



—



48,151


Deposits

30,169



22,378



3,996



170



277



56,990














Statistical data:












Return on average assets (a)

1.95

%


0.29

%


1.29

%


N/M



N/M



0.78

%

Efficiency ratio (b)

39.20



90.92



74.58



N/M



N/M



68.55















Business


Retail


Wealth







Three Months Ended December 31, 2014

Bank


Bank


Management


Finance


Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

387



$

152



$

47



$

(177)



$

7



$

416


Provision for credit losses

10



(4)



(9)



—



5



2


Noninterest income

104



44



61



16



—



225


Noninterest expenses

148



182



80



3



6



419


Provision (benefit) for income taxes (FTE)

119



6



14



(64)



(4)



71


Net income (loss)

$

214



$

12



$

23



$

(100)



$

—



$

149


Net credit-related charge-offs (recoveries)

$

—



$

3



$

(2)



$

—



$

—



$

1














Selected average balances:












Assets

$

38,039



$

6,155



$

5,034



$

12,222



$

7,861



$

69,311


Loans

37,034



5,482



4,845



—



—



47,361


Deposits

30,925



22,274



4,093



195



273



57,760














Statistical data:












Return on average assets (a)

2.26

%


0.20

%


1.79

%


N/M



N/M



0.86

%

Efficiency ratio (b)

30.13



92.61



74.48



N/M



N/M



65.26















Business


Retail


Wealth







Three Months Ended March 31, 2014

Bank


Bank


Management


Finance


Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

371



$

147



$

45



$

(158)



6



$

411


Provision for credit losses

16



2



(8)



—



(1)



9


Noninterest income

91



41



60



14



2



208


Noninterest expenses

146



173



76



3



8



406


Provision (benefit) for income taxes (FTE)

100



4



13



(55)



3



65


Net income (loss)

$

200



$

9



$

24



$

(92)



$

(2)



$

139


Net credit-related charge-offs (recoveries)

$

11



$

4



$

(3)



$

—



$

—



$

12














Selected average balances:












Assets

$

35,896



$

6,061



$

4,930



$

11,129



$

6,692



$

64,708


Loans

34,926



5,388



4,761



—



—



45,075


Deposits

27,023



21,595



3,582



353



217



52,770














Statistical data:












Return on average assets (a)

2.22

%


0.15

%


1.96

%


N/M



N/M



0.86

%

Efficiency ratio (b)

31.70



91.79



73.13



N/M



N/M



65.79


(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 March 31, 2015

Michigan


California


Texas


Markets


& Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

177



$

176



$

131



$

80



$

(150)



$

414


Provision for credit losses

(8)



(3)



21



6



(2)



14


Noninterest income

81



38



36



88



13



256


Noninterest expenses

155



100



96



102



7



460


Provision (benefit) for income taxes (FTE)

38



44



18



16



(54)



62


Net income (loss)

$

73



$

73



$

32



$

44



$

(88)



$

134


Net credit-related charge-offs (recoveries)

$

3



$

1



$

3



$

1



$

—



$

8














Selected average balances:












Assets

$

13,736



$

16,461



$

12,193



$

7,662



$

18,687



$

68,739


Loans

13,223



16,193



11,535



7,200



—



48,151


Deposits

21,710



16,837



11,010



6,986



447



56,990














Statistical data:












Return on average assets (a)

1.30

%


1.62

%


1.01

%


2.29

%


N/M



0.78

%

Efficiency ratio (b)

60.22



46.82



57.43



60.01



N/M



68.55





















Other


Finance



Three Months Ended December 31, 2014

Michigan


California


Texas


Markets


& Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

173



$

192



$

139



$

82



$

(170)



$

416


Provision for credit losses

(19)



(10)



18



8



5



2


Noninterest income

89



38



38



44



16



225


Noninterest expenses

157



102



95



56



9



419


Provision (benefit) for income taxes (FTE)

45



55



24



15



(68)



71


Net income (loss)

$

79



$

83



$

40



$

47



$

(100)



$

149


Net credit-related charge-offs (recoveries)

$

(5)



$

1



$

2



$

3



$

—



$

1














Selected average balances:












Assets

$

13,605



$

16,035



$

12,003



$

7,585



$

20,083



$

69,311


Loans

13,142



15,777



11,327



7,115



—



47,361


Deposits

21,530



18,028



10,825



6,909



468



57,760














Statistical data:












Return on average assets (a)

1.41

%


1.75

%


1.32

%


2.47

%


NM



0.86

%

Efficiency ratio (b)

59.91



44.25



53.62



44.34



NM



65.26





















Other


Finance



Three Months Ended March 31, 2014

Michigan


California


Texas


Markets


& Other


Total

Earnings summary:












Net interest income (expense) (FTE)

$

183



$

172



$

136



$

72



$

(152)



$

411


Provision for credit losses

3



11



6



(10)



(1)



9


Noninterest income

84



34



34



40



16



208


Noninterest expenses

161



96



90



48



11



406


Provision (benefit) for income taxes (FTE)

37



36



26



18



(52)



65


Net income (loss)

$

66



$

63



$

48



$

56



$

(94)



$

139


Net credit-related charge-offs (recoveries)

$

—



$

10



$

6



$

(4)



$

—



$

12














Selected average balances:












Assets

$

13,819



$

15,133



$

11,070



$

6,865



$

17,821



$

64,708


Loans

13,473



14,824



10,364



6,414



—



45,075


Deposits

20,642



14,782



10,875



5,901



570



52,770














Statistical data:












Return on average assets (a)

1.22

%


1.59

%


1.56

%


3.28

%


N/M



0.86

%

Efficiency ratio (b)

60.47



46.66



52.94



43.28



N/M



65.79


(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








March 31,

December 31,

September 30,

June 30,

March 31,

(dollar amounts in millions)

2015

2014

2014

2014

2014







Tier 1 Common Capital Ratio:






Tier 1 and Tier 1 common capital (a)

n/a


$

7,169


$

7,105


$

7,027


$

6,962








Risk-weighted assets (a)

n/a


68,273


67,106


66,911


65,788








Tier 1 and Tier 1 common risk-based capital ratio

n/a


10.50

%

10.59

%

10.50

%

10.58

%







Tangible Common Equity Ratio:






Common shareholders' equity

$

7,500


$

7,402


$

7,433


$

7,369


$

7,283


Less:






Goodwill

635


635


635


635


635


Other intangible assets

15


15


15


15


16


Tangible common equity

$

6,850


$

6,752


$

6,783


$

6,719


$

6,632








Total assets

$

69,336


$

69,190


$

68,887


$

65,325


$

65,681


Less:






Goodwill

635


635


635


635


635


Other intangible assets

15


15


15


15


16


Tangible assets

$

68,686


$

68,540


$

68,237


$

64,675


$

65,030








Common equity ratio

10.82

%

10.70

%

10.79

%

11.28

%

11.09

%

Tangible common equity ratio

9.97


9.85


9.94


10.39


10.20








Tangible Common Equity per Share of Common Stock:






Common shareholders' equity

$

7,500


$

7,402


$

7,433


$

7,369


$

7,283


Tangible common equity

6,850


6,752


6,783


6,719


6,632








Shares of common stock outstanding (in millions)

178


179


180


181


182








Common shareholders' equity per share of common stock

$

42.12


$

41.35


$

41.26


$

40.72


$

40.09


Tangible common equity per share of common stock

38.47


37.72


37.65


37.12


36.50


(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.

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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/comerica-reports-first-quarter-2015-net-income-of-134-million-or-73-cents-per-share-300067670.html

SOURCE Comerica Incorporated

Copyright 2015 PR Newswire

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