/FIRST AND FINAL ADD -- CLTH029 -- Comerica Earnings/
PRNewswire
(:CMA)
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
Three Months Ended Years Ended
Dec. Sept. Dec. Dec. Dec.
31, 30, 31, 31, 31,
(in millions, except per share data) 2006 2006 2005 2006 2005
PER SHARE AND COMMON STOCK DATA
Diluted income from continuing
operations $1.16 $1.20 $1.04 $4.81 $4.84
Diluted net income 1.87 1.23 1.25 5.49 5.11
Cash dividends declared 0.59 0.59 0.55 2.36 2.20
Common shareholders' equity
(at period end) 32.70 32.79 31.11
Average diluted shares
(in thousands) 160,063 162,438 165,738 162,488 168,685
KEY RATIOS
Return on average common
shareholders' equity 22.63% 15.38% 16.28% 17.24% 16.90%
Return on average assets 2.07 1.41 1.53 1.58 1.64
Average common shareholders'
equity as a percentage of
average assets 9.16 9.16 9.42 9.15 9.71
Tier 1 common capital ratio * 7.51 7.48 7.78
Tier 1 risk-based capital ratio * 7.99 8.04 8.38
Total risk-based capital ratio * 11.59 11.25 11.65
Leverage ratio * 9.74 9.68 9.97
AVERAGE BALANCES
Commercial loans $27,609 $27,534 $25,666 $27,341 $24,575
Real estate construction loans 4,204 4,064 3,416 3,905 3,194
Commercial mortgage loans 9,515 9,362 8,799 9,278 8,566
Residential mortgage loans 1,647 1,602 1,465 1,570 1,388
Consumer loans 2,468 2,474 2,675 2,533 2,696
Lease financing 1,335 1,323 1,288 1,314 1,283
International loans 1,790 1,766 1,940 1,809 2,114
Total loans 48,568 48,125 45,249 47,750 43,816
Earning assets 53,289 52,500 49,764 52,291 48,232
Total assets 57,612 56,790 54,130 56,579 52,506
Interest-bearing deposits 30,554 29,133 26,320 28,939 25,633
Total interest-bearing liabilities 38,334 37,555 32,683 37,000 31,270
Noninterest-bearing deposits 12,649 12,723 15,158 13,135 15,007
Common shareholders' equity 5,280 5,203 5,101 5,176 5,097
NET INTEREST INCOME
Net interest income
(fully taxable equivalent basis) $503 $502 $501 $1,986 $1,960
Fully taxable equivalent adjustment 1 - 1 3 4
Net interest margin 3.75% 3.79% 4.00% 3.79% 4.06%
CREDIT QUALITY
Nonaccrual loans $214 $174 $138
Other real estate 18 23 24
Total nonperforming assets 232 197 162
Loans 90 days past due and still
accruing 14 18 16
Gross loan charge-offs 31 17 38 $98 $174
Recoveries 9 14 16 38 64
Net loan charge-offs 22 3 22 60 110
Lending-related commitment charge-offs 1 5 6 12 6
Total net credit-related charge-offs 23 8 28 72 116
Allowance for loan losses 493 493 516
Allowance for credit losses on
lending-related commitments 26 31 33
Total allowance for credit losses 519 524 549
Allowance for loan losses as a
percentage of total loans 1.04% 1.06% 1.19%
Net loan charge-offs as a
percentage of average total loans 0.18 0.02 0.20 0.13% 0.25%
Net credit-related charge-offs as
a percentage of average total loans 0.19 0.06 0.25 0.15 0.26
Nonperforming assets as a
percentage of total loans and
other real estate 0.49 0.42 0.37
Allowance for loan losses as a
percentage of total nonperforming
assets 213 251 319
* December 31, 2006 ratios are estimated
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
December September December
31, 30, 31,
(in millions, except share data) 2006 2006 2005
ASSETS
Cash and due from banks $1,434 $1,456 $1,609
Federal funds sold and securities
purchased under agreements to resell 2,632 3,473 937
Other short-term investments 327 259 222
-
Investment securities available-for-
sale 3,662 3,931 4,240
-
Commercial loans 26,265 25,755 23,545
Real estate construction loans 4,203 4,122 3,482
Commercial mortgage loans 9,659 9,485 8,867
Residential mortgage loans 1,677 1,622 1,485
Consumer loans 2,423 2,498 2,697
Lease financing 1,353 1,321 1,295
International loans 1,851 1,712 1,876
Total loans 47,431 46,515 43,247
Less allowance for loan losses (493) (493) (516)
Net loans 46,938 46,022 42,731
Premises and equipment 568 540 510
Customers' liability on acceptances
outstanding 56 64 59
Accrued income and other assets 2,384 2,729 2,705
Total assets $58,001 $58,474 $53,013
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $13,901 $15,132 $15,666
Money market and NOW deposits 15,250 14,711 17,064
Savings deposits 1,365 1,378 1,454
Customer certificates of deposit 7,223 7,057 5,679
Institutional certificates of deposit 5,783 5,783 1,750
Foreign office time deposits 1,405 869 818
Total interest-bearing deposits 31,026 29,798 26,765
Total deposits 44,927 44,930 42,431
Short-term borrowings 635 225 302
Acceptances outstanding 56 64 59
Accrued expenses and other
liabilities 1,281 1,292 1,192
Medium- and long-term debt 5,949 6,755 3,961
Total liabilities 52,848 53,266 47,945
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 178,735,252 shares at
12/31/06, 9/30/06, and 12/31/05 894 894 894
Capital surplus 520 507 461
Accumulated other comprehensive loss (324) (128) (170)
Retained earnings 5,282 5,079 4,796
Less cost of common stock in treasury
- 21,161,161 shares at 12/31/06,
19,892,137 shares at 9/30/06, and
15,834,985 shares at 12/31/05 (1,219) (1,144) (913)
Total shareholders' equity 5,153 5,208 5,068
Total liabilities and
shareholders' equity $58,001 $58,474 $53,013
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Three Months
Ended Years Ended
December 31, December 31,
(in millions, except per share data) 2006 2005 2006 2005
INTEREST INCOME
Interest and fees on loans $858 $697 $3,216 $2,554
Interest on investment securities 42 41 174 148
Interest on short-term investments 12 6 32 24
Total interest income 912 744 3,422 2,726
INTEREST EXPENSE
Interest on deposits 298 171 1,005 548
Interest on short-term borrowings 15 24 130 52
Interest on medium- and long-term
debt 97 49 304 170
Total interest expense 410 244 1,439 770
Net interest income 502 500 1,983 1,956
Provision for loan losses 22 (20) 37 (47)
Net interest income after
provision for loan losses 480 520 1,946 2,003
NONINTEREST INCOME
Service charges on deposit accounts 54 55 218 218
Fiduciary income 47 43 180 174
Commercial lending fees 19 19 65 63
Letter of credit fees 16 14 64 70
Foreign exchange income 10 10 38 37
Brokerage fees 10 9 40 36
Card fees 12 11 46 39
Bank-owned life insurance 9 10 40 38
Warrant income (loss) (1) 2 (1) 9
Net securities gains 1 - - -
Net gain (loss) on sales of
businesses - - (12) 1
Income from lawsuit settlement 47 - 47 -
Other noninterest income 38 34 130 134
Total noninterest income 262 207 855 819
NONINTEREST EXPENSES
Salaries 231 212 823 786
Employee benefits 42 45 184 178
Total salaries and employee
benefits 273 257 1,007 964
Net occupancy expense 34 30 125 118
Equipment expense 14 14 55 53
Outside processing fee expense 21 21 85 77
Software expense 15 14 56 49
Customer services 14 19 47 69
Litigation and operational losses 4 6 11 14
Provision for credit losses on
lending-related commitments (4) 25 5 18
Other noninterest expenses 86 83 283 251
Total noninterest expenses 457 469 1,674 1,613
Income from continuing operations
before income taxes 285 258 1,127 1,209
Provision for income taxes 100 87 345 393
Income from continuing operations 185 171 782 816
Income from discontinued operations,
net of tax 114 36 111 45
NET INCOME $299 $207 $893 $861
Basic earnings per common share:
Income from continuing operations $1.17 $1.05 $4.88 $4.90
Net income 1.89 1.27 5.57 5.17
Diluted earnings per common share:
Income from continuing operations 1.16 1.04 4.81 4.84
Net income 1.87 1.25 5.49 5.11
Cash dividends declared on common stock 94 90 380 367
Dividends per common share 0.59 0.55 2.36 2.20
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Fourth Third Second First Fourth
Quarter Quarter Quarter Quarter Quarter
(in millions, except per share data) 2006 2006 2006 2006 2005
INTEREST INCOME
Interest and fees on loans $858 $843 $792 $723 $697
Interest on investment securities 42 43 45 44 41
Interest on short-term investments 12 7 8 5 6
Total interest income 912 893 845 772 744
INTEREST EXPENSE
Interest on deposits 298 272 236 199 171
Interest on short-term borrowings 15 28 45 42 24
Interest on medium- and long-term
debt 97 91 64 52 49
Total interest expense 410 391 345 293 244
Net interest income 502 502 500 479 500
Provision for loan losses 22 15 27 (27) (20)
Net interest income after
provision for loan losses 480 487 473 506 520
NONINTEREST INCOME
Service charges on deposit accounts 54 56 54 54 55
Fiduciary income 47 45 44 44 43
Commercial lending fees 19 16 15 15 19
Letter of credit fees 16 17 15 16 14
Foreign exchange income 10 9 9 10 10
Brokerage fees 10 10 10 10 9
Card fees 12 11 12 11 11
Bank-owned life insurance 9 8 10 13 10
Warrant income (loss) (1) (5) 4 1 2
Net securities gains (losses) 1 - 1 (2) -
Net loss on sales of businesses - (7) - (5) -
Income from lawsuit settlement 47 - - - -
Other noninterest income 38 35 29 28 34
Total noninterest income 262 195 203 195 207
NONINTEREST EXPENSES
Salaries 231 202 197 193 212
Employee benefits 42 48 44 50 45
Total salaries and employee
benefits 273 250 241 243 257
Net occupancy expense 34 31 30 30 30
Equipment expense 14 13 15 13 14
Outside processing fee expense 21 21 22 21 21
Software expense 15 13 14 14 14
Customer services 14 11 9 13 19
Litigation and operational losses 4 3 3 1 6
Provision for credit losses on
lending-related commitments (4) (5) 1 13 25
Other noninterest expenses 86 62 54 81 83
Total noninterest expenses 457 399 389 429 469
Income from continuing operations
before income taxes 285 283 287 272 258
Provision for income taxes 100 88 92 65 87
Income from continuing operations 185 195 195 207 171
Income (loss) from discontinued
operations, net of tax 114 5 5 (13) 36
NET INCOME $299 $200 $200 $194 $207
Basic earnings per common share:
Income from continuing
operations $1.17 $1.22 $1.21 $1.28 $1.05
Net income 1.89 1.25 1.24 1.20 1.27
Diluted earnings per common share:
Income from continuing
operations 1.16 1.20 1.19 1.26 1.04
Net income 1.87 1.23 1.22 1.18 1.25
Cash dividends declared on common
stock 94 94 96 96 90
Dividends per common share 0.59 0.59 0.59 0.59 0.55
N/M - Not meaningful
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Fourth Quarter 2006 Compared To:
Third Quarter Fourth Quarter
2006 2005
(in millions, except per share data) Amount Percent Amount Percent
INTEREST INCOME
Interest and fees on loans $15 1.8 % $161 23.0 %
Interest on investment securities (1) (1.2) 1 2.6
Interest on short-term investments 5 77.5 6 92.0
Total interest income 19 2.2 168 22.5
INTEREST EXPENSE
Interest on deposits 26 9.7 127 73.4
Interest on short-term borrowings (13) (50.3) (9) (41.5)
Interest on medium- and long-term debt 6 7.4 48 102.5
Total interest expense 19 4.8 166 67.8
Net interest income - 0.2 2 0.4
Provision for loan losses 7 N/M 42 N/M
Net interest income after
provision for loan losses (7) (1.2) (40) (7.6)
NONINTEREST INCOME
Service charges on deposit accounts (2) (2.6) (1) (1.0)
Fiduciary income 2 5.3 4 9.0
Commercial lending fees 3 25.5 - 0.4
Letter of credit fees (1) (3.1) 2 19.4
Foreign exchange income 1 8.1 - 3.1
Brokerage fees - 4.3 1 11.2
Card fees 1 2.2 1 7.7
Bank-owned life insurance 1 2.1 (1) (11.0)
Warrant income (loss) 4 N/M (3) N/M
Net securities gains (losses) 1 N/M 1 N/M
Net loss on sales of businesses 7 N/M - -
Income from lawsuit settlement 47 N/M 47 N/M
Other noninterest income 3 11.3 4 11.3
Total noninterest income 67 34.2 55 26.9
NONINTEREST EXPENSES
Salaries 29 13.9 19 8.9
Employee benefits (6) (9.5) (3) (5.2)
Total salaries and employee
benefits 23 9.4 16 6.4
Net occupancy expense 3 6.8 4 12.2
Equipment expense 1 3.2 - 4.9
Outside processing fee expense - 2.9 - 0.9
Software expense 2 11.6 1 7.4
Customer services 3 17.1 (5) (31.9)
Litigation and operational losses 1 96.7 (2) (11.8)
Provision for credit losses on
lending-related commitments 1 N/M (29) N/M
Other noninterest expenses 24 41.2 3 3.4
Total noninterest expenses 58 14.8 (12) (2.3)
Income from continuing operations
before income taxes 2 0.6 27 10.2
Provision for income taxes 12 13.3 13 15.1
Income from continuing operations (10) (5.1) 14 7.7
Income (loss) from discontinued
operations, net of tax 109 N/M 78 N/M
NET INCOME $99 49.3 % $92 43.9 %
Basic earnings per common share:
Income from continuing
operations $(0.05) (4.1)% $0.12 11.4 %
Net income 0.64 51.2 0.62 48.8
Diluted earnings per common share:
Income from continuing
operations (0.04) (3.3) 0.12 11.5
Net income 0.64 52.0 0.62 49.6
Cash dividends declared on common
stock - (1.2) 4 3.9
Dividends per common share - - 0.04 7.3
N/M - Not meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
Comerica Incorporated and Subsidiaries
2006 2005
(in millions) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
Balance at beginning of period $493 $481 $472 $516 $558
Loan charge-offs:
Commercial 7 9 16 12 14
Real estate construction:
Real estate construction
business line - - - - 1
Other - - - - -
Total real estate
construction - - - - 1
Commercial mortgage:
Commercial real estate
business line 3 1 - - -
Other 4 4 3 2 1
Total commercial
mortgage 7 5 3 2 1
Residential mortgage - - - - 1
Consumer 13 3 4 3 3
Lease financing 3 - 1 6 18
International 1 - 1 2 -
Total loan charge-offs 31 17 25 25 38
Recoveries on loans previously
charged-off:
Commercial 5 13 5 4 13
Real estate construction - - - - -
Commercial mortgage 1 1 - 2 1
Residential mortgage - - - - -
Consumer 1 - 1 1 2
Lease financing - - - - -
International 2 - 1 1 -
Total recoveries 9 14 7 8 16
Net loan charge-offs 22 3 18 17 22
Provision for loan losses 22 15 27 (27) (20)
Balance at end of period $493 $493 $481 $472 $516
Allowance for loan losses as a
percentage of total loans 1.04 % 1.06 % 1.04 % 1.06 % 1.19 %
Net loan charge-offs as a
percentage of average total loans 0.18 0.02 0.15 0.14 0.20
Net credit-related charge-offs as
a percentage of average total
loans 0.19 0.06 0.16 0.19 0.25
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED
COMMITMENTS
Comerica Incorporated and Subsidiaries
2006 2005
(in millions) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
Balance at beginning of period $31 $41 $41 $33 $14
Charge-offs on lending-related
commitments (1) 1 5 1 5 6
Provision for credit losses on
lending-related commitments (4) (5) 1 13 25
Balance at end of period $26 $31 $41 $41 $33
Unfunded lending-related commitments
sold $20 $28 $14 $52 $20
(1) Charge-offs result from the sale of unfunded lending-related
commitments.
NONPERFORMING ASSETS
Comerica Incorporated and Subsidiaries
2006 2005
(in millions) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
SUMMARY OF NONPERFORMING
ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Commercial $97 $83 $74 $53 $65
Real estate construction:
Real estate
construction
business line 18 4 5 2 3
Other 2 - - - -
Total real estate
construction 20 4 5 2 3
Commercial mortgage:
Commercial real
estate business line 18 10 11 11 6
Other 54 46 35 29 29
Total commercial
mortgage 72 56 46 40 35
Residential mortgage 1 1 1 1 2
Consumer 4 5 3 2 2
Lease financing 8 12 12 7 13
International 12 13 16 17 18
Total nonaccrual
loans 214 174 157 122 138
Reduced-rate loans - - - - -
Total
nonperforming
loans 214 174 157 122 138
Other real estate 18 23 17 19 24
Total
nonperforming
assets $232 $197 $174 $141 $162
Nonperforming loans as a
percentage of total loans 0.45% 0.37% 0.34% 0.27% 0.32%
Nonperforming assets as a
percentage of total loans
and other real estate 0.49 0.42 0.37 0.32 0.37
Allowance for loan losses as
a percentage of total
nonperforming assets 213 251 278 334 319
Loans past due 90 days or
more and still accruing $14 $18 $15 $16 $16
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning
of period $174 $157 $122 $138 $186
Loans transferred to
nonaccrual (1) 66 39 51 20 28
Nonaccrual business loan
gross charge-offs (2) (16) (14) (21) (21) (34)
Loans transferred to
accrual status (1) - - - - (11)
Nonaccrual business
loans sold (3) - - - (9) (4)
Payments/Other (4) (10) (8) 5 (6) (27)
Nonaccrual loans at end of
period $214 $174 $157 $122 $138
(1) Based on an analysis of nonaccrual loans with book balances greater
than $2 million.
(2) Analysis of gross loan charge-offs:
Nonaccrual business
loans $16 $14 $21 $21 $34
Performing watch list
loans 2 - - 1 -
Consumer and residential
mortgage loans 13 3 4 3 4
Total gross loan charge-
offs $31 $17 $25 $25 $38
(3) Analysis of loans sold:
Nonaccrual business
loans $- $- $- $9 $4
Performing watch list
loans 25 7 15 30 15
Total loans sold $25 $7 $15 $39 $19
(4) Net change related to nonaccrual loans with balances less than $2
million, other than business loan gross charge-offs and nonaccrual
loans sold, are included in Payments/Other.
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Three Months Ended
December 31, 2006 September 30, 2006
(dollar amounts in Average Average Average Average
millions) Balance Interest Rate Balance Interest Rate
Commercial loans (1) (2) $27,609 $502 7.21% $27,534 $498 7.18%
Real estate construction
loans 4,204 92 8.72 4,064 90 8.79
Commercial mortgage loans
(1) 9,515 178 7.43 9,362 175 7.42
Residential mortgage loans 1,647 25 6.11 1,602 24 6.08
Consumer loans 2,468 46 7.34 2,474 45 7.32
Lease financing 1,335 13 3.88 1,323 13 4.00
International loans 1,790 33 7.25 1,766 33 7.35
Business loan swap expense - (30) - - (35) -
Total loans (2) 48,568 859 7.02 48,125 843 6.96
Investment securities
available-for-sale 3,842 42 4.27 3,887 43 4.22
Federal funds sold and
securities purchased
under agreements to
resell 325 4 5.38 282 4 5.39
Other short-term
investments 554 8 5.80 206 3 6.23
Total earning assets 53,289 913 6.79 52,500 893 6.74
Cash and due from banks 1,460 1,561
Allowance for loan losses (504) (495)
Accrued income and other
assets 3,367 3,224
Total assets $57,612 $56,790
Money market and NOW
deposits (1) $14,705 117 3.15 $14,885 116 3.07
Savings deposits (1) 1,376 3 0.90 1,434 3 0.87
Customer certificates of
deposit (1) 7,191 80 4.39 6,710 70 4.17
Institutional certificates
of deposit 5,783 79 5.44 5,180 72 5.45
Foreign office time
deposits 1,499 19 5.06 924 11 4.96
Total interest-
bearing deposits 30,554 298 3.87 29,133 272 3.70
Short-term borrowings 1,053 15 5.30 2,125 28 5.29
Medium- and long-term debt 6,727 97 5.76 6,297 91 5.73
Total interest-
bearing sources 38,334 410 4.24 37,555 391 4.13
Noninterest-bearing
deposits (1) 12,649 12,723
Accrued expenses and other
liabilities 1,349 1,309
Common shareholders'
equity 5,280 5,203
Total liabilities and
shareholders' equity $57,612 $56,790
Net interest income/rate
spread (FTE) $503 2.55 $502 2.61
FTE adjustment $1 $-
Impact of net noninterest-
bearing sources of funds 1.20 1.18
Net interest margin (as a
percentage of average
earning assets) (FTE) (2) 3.75% 3.79%
(1) FSD balances included
above:
Loans (primarily low-
rate) $1,909 $3 0.66% $2,093 $3 0.64%
Interest-bearing
deposits 1,338 13 3.94 1,465 15 3.95
Noninterest-bearing
deposits 3,953 4,079
(2) Impact of FSD loans
(primarily low-rate) on
the following:
Commercial loans (0.49)% (0.54)%
Total loans (0.25) (0.28)
Net interest margin
(FTE) (assuming
loans were funded by
noninterest-bearing
deposits) (0.11) (0.14)
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Three Months Ended
December 31, 2005
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans (1) (2) $25,666 $387 5.99 %
Real estate construction loans 3,416 68 7.94
Commercial mortgage loans (1) 8,799 149 6.70
Residential mortgage loans 1,465 22 5.87
Consumer loans 2,675 43 6.45
Lease financing 1,288 13 4.08
International loans 1,940 32 6.52
Business loan swap expense - (16) -
Total loans (2) 45,249 698 6.13
Investment securities available-for-
sale 4,037 41 3.97
Federal funds sold and securities
purchased under agreements to resell 317 3 4.26
Other short-term investments 161 3 7.70
Total earning assets 49,764 745 5.94
Cash and due from banks 1,757
Allowance for loan losses (562)
Accrued income and other assets 3,171
Total assets $54,130
Money market and NOW deposits (1) $17,152 102 2.36
Savings deposits (1) 1,502 1 0.61
Customer certificates of deposit (1) 5,582 45 3.18
Institutional certificates of deposit 1,141 12 4.16
Foreign office time deposits 943 11 4.46
Total interest-bearing deposits 26,320 171 2.59
Short-term borrowings 2,350 24 4.06
Medium- and long-term debt 4,013 49 4.77
Total interest-bearing sources 32,683 244 2.96
Noninterest-bearing deposits (1) 15,158
Accrued expenses and other
liabilities 1,188
Common shareholders' equity 5,101
Total liabilities and
shareholders' equity $54,130
Net interest income/rate spread (FTE) $501 2.98
FTE adjustment $1
Impact of net noninterest-bearing
sources of funds 1.02
Net interest margin (as a percentage
of average earning assets) (FTE) (2) 4.00 %
(1) FSD balances included above:
Loans (primarily low-rate) $2,769 $3 0.38 %
Interest-bearing deposits 2,613 22 3.38
Noninterest-bearing deposits 5,866
(2) Impact of FSD loans (primarily
low-rate) on the following:
Commercial loans (0.68)%
Total loans (0.37)
Net interest margin (FTE)
(assuming loans were
funded by noninterest-
bearing deposits) (0.22)
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Years Ended
December 31, 2006 December 31, 2005
(dollar amounts Average Average Average Average
in millions) Balance Interest Rate Balance Interest Rate
Commercial loans
(1)(2)(3) $27,341 $1,877 6.87% $24,575 $1,381 5.62%
Real estate construction
loans 3,905 336 8.61 3,194 231 7.23
Commercial mortgage
loans (1) 9,278 675 7.27 8,566 534 6.23
Residential mortgage
loans 1,570 95 6.02 1,388 80 5.74
Consumer loans 2,533 181 7.13 2,696 159 5.89
Lease financing 1,314 52 4.00 1,283 49 3.81
International loans 1,809 127 7.01 2,114 126 5.98
Business loan swap
expense - (124) - - (2) -
Total loans (2) (3) 47,750 3,219 6.74 43,816 2,558 5.84
Investment securities
available-for-sale 3,992 174 4.22 3,861 148 3.76
Federal funds sold
and securities purchased
under agreements to resell 283 14 5.15 390 12 3.29
Other short-term
investments 266 18 6.69 165 12 7.22
Total earning assets 52,291 3,425 6.53 48,232 2,730 5.65
Cash and due from banks 1,557 1,721
Allowance for loan losses (499) (623)
Accrued income and other
assets 3,230 3,176
Total assets $56,579 $52,506
Money market and NOW
deposits (1) $15,373 443 2.88 $17,282 337 1.95
Savings deposits (1) 1,441 11 0.79 1,545 7 0.49
Customer certificates
of deposit (1) 6,505 261 4.01 5,418 148 2.73
Institutional certificates
of deposit 4,489 235 5.23 511 19 3.72
Foreign office time
deposits 1,131 55 4.82 877 37 4.18
Total interest-
bearing deposits 28,939 1,005 3.47 25,633 548 2.14
Short-term borrowings 2,654 130 4.89 1,451 52 3.59
Medium- and long-term
debt 5,407 304 5.63 4,186 170 4.05
Total interest-
bearing sources 37,000 1,439 3.89 31,270 770 2.46
Noninterest-bearing
deposits (1) 13,135 15,007
Accrued expenses and
other liabilities 1,268 1,132
Common shareholders'
equity 5,176 5,097
Total liabilities
and shareholders'
equity $56,579 $52,506
Net interest income/rate
spread (FTE) $1,986 2.64 $1,960 3.19
FTE adjustment $3 $4
Impact of net
noninterest-bearing
sources of funds 1.15 0.87
Net interest margin
(as a percentage
of average earning
assets) (FTE) (2) (3) 3.79% 4.06%
(1) FSD balances
included above:
Loans (primarily
low-rate) $2,363 $13 0.57% $1,893 $8 0.45%
Interest-bearing
deposits 1,710 66 3.86 2,600 76 2.91
Noninterest-bearing
deposits 4,374 5,851
(2) Impact of FSD loans
(primarily low-rate)
on the following:
Commercial loans (0.59)% (0.43)%
Total loans (0.32) (0.24)
Net interest margin
(FTE) (assuming
loans were funded
by noninterest-
bearing deposits) (0.16) (0.15)
(3) Impact of 2005 warrant
accounting change on
the following:
Commercial loans $ 20 0.08%
Total loans 20 0.05
Net interest
margin (FTE) 20 0.04
CONSOLIDATED STATISTICAL DATA
Comerica Incorporated and Subsidiaries
Dec. Sept. June March Dec.
(in millions, except 31, 30, 30, 31, 31,
per share data) 2006 2006 2006 2006 2005
Commercial loans:
Floor plan $3,198 $2,628 $3,166 $3,078 $2,847
Other 23,067 23,127 22,762 21,660 20,698
Total commercial loans 26,265 25,755 25,928 24,738 23,545
Real estate construction loans:
Real estate construction
business line 3,449 3,352 3,222 2,996 2,831
Other 754 770 736 683 651
Total real estate
construction loans 4,203 4,122 3,958 3,679 3,482
Commercial mortgage loans:
Commercial real estate business
line 1,534 1,529 1,537 1,483 1,450
Other 8,125 7,956 7,826 7,663 7,417
Total commercial
mortgage loans 9,659 9,485 9,363 9,146 8,867
Residential mortgage loans 1,677 1,622 1,568 1,516 1,485
Consumer loans:
Home equity 1,591 1,668 1,740 1,748 1,775
Other consumer 832 830 753 859 922
Total consumer loans 2,423 2,498 2,493 2,607 2,697
Lease financing 1,353 1,321 1,325 1,292 1,295
International loans 1,851 1,712 1,764 1,761 1,876
Total loans $47,431 $46,515 $46,399 $44,739 $43,247
Goodwill $ 151 $ 213 $ 213 $ 213 $ 213
Loan servicing rights 14 15 16 17 19
Tier 1 common capital ratio* 7.51% 7.48% 7.69% 7.66% 7.78%
Tier 1 risk-based capital ratio* 7.99 8.04 8.26 8.24 8.38
Total risk-based capital ratio * 11.59 11.25 11.55 11.68 11.65
Leverage ratio* 9.74 9.68 9.83 9.84 9.97
Book value per share $32.70 $32.79 $31.99 $31.39 $31.11
Market value per share for
the quarter:
High $59.72 $58.95 $60.10 $58.62 $60.25
Low 55.82 51.45 50.12 54.23 53.60
Close 58.68 56.92 51.99 57.97 56.76
Quarterly ratios:
Return on average common
shareholders' equity 22.63% 15.38% 15.50% 15.33% 16.28%
Return on average assets 2.07 1.41 1.41 1.41 1.53
Efficiency ratio 59.81 57.15 55.41 63.39 66.13
Number of banking offices 393 382 378 374 383
Number of employees -
full time equivalent
Continuing operations 10,700 10,568 10,549 10,517 10,636
Discontinued operations - 167 169 170 180
* December 31, 2006 ratios are estimated
PARENT COMPANY ONLY BALANCE SHEETS
Comerica Incorporated
Dec. 31, Sept. 30, Dec. 31,
(in millions, except share data) 2006 2006 2005
ASSETS
Cash and due from subsidiary bank $122 $7 $11
Short-term investments with subsidiary
bank 246 294 264
Other short-term investments 92 88 -
Investment in subsidiaries,
principally banks 5,586 5,719 5,587
Premises and equipment 4 4 3
Other assets 152 150 257
Total assets $6,202 $6,262 $6,122
LIABILITIES AND SHAREHOLDERS' EQUITY
Long-term debt $806 $807 $813
Other liabilities 243 247 241
Total liabilities 1,049 1,054 1,054
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 178,735,252 shares at
12/31/06, 9/30/06 and 12/31/05 894 894 894
Capital surplus 520 507 461
Accumulated other comprehensive loss (324) (128) (170)
Retained earnings 5,282 5,079 4,796
Less cost of common stock in treasury
- 21,161,161 shares at 12/31/06,
19,892,137 shares at 9/30/06 and
15,834,985 shares at 12/31/05 (1,219) (1,144) (913)
Total shareholders' equity 5,153 5,208 5,068
Total liabilities and
shareholders' equity $6,202 $6,262 $6,122
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Comerica Incorporated and Subsidiaries
Accumulated
Other Total
(in millions, Common Stock Compre- Treas- Share-
except per In Capital hensive Retained ury holders'
share data) Shares Amount Surplus Loss Earnings Stock Equity
BALANCE AT JANUARY
1, 2005 170.5 $894 $421 $(69) $4,331 $(472) $5,105
Net income - - - - 861 - 861
Other comprehensive
loss, net of tax - - - (101) - - (101)
Total comprehensive
income 760
Cash dividends
declared on common
stock ($2.20 per
share) - - - - (367) - (367)
Purchase of common
stock (9.0) - - - - (525) (525)
Net issuance of
common stock under
employee stock
plans 1.4 - (4) - (29) 84 51
Recognition of
share-based
compensation
expense - - 44 - - - 44
BALANCE AT DECEMBER
31, 2005 162.9 $894 $461 $(170) $4,796 $(913) $5,068
BALANCE AT JANUARY
1, 2006 162.9 $894 $461 $(170) $4,796 $(913) $5,068
Net income - - - - 893 - 893
Other comprehensive
income, net of tax - - - 55 - - 55
Total comprehensive
income 948
Cash dividends
declared on common
stock ($2.36 per
share) - - - - (380) - (380)
Purchase of common
stock (6.7) - - - - (384) (384)
Net issuance of
common stock under
employee stock
plans 1.7 - (15) - (27) 95 53
Recognition of
share-based
compensation
expense - - 57 - - - 57
Employee deferred
compensation
obligations (0.3) - 17 - - (17) -
SFAS 158 transition
adjustment, net of
tax - - - (209) - - (209)
BALANCE AT DECEMBER
31, 2006 157.6 $894 $520 $(324) $5,282 $(1,219) $5,153
BUSINESS SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
(dollar amounts in millions) Business Bank
December September December
31, 30, 31,
Three Months Ended 2006 2006 2005
Earnings summary:
Net interest income (expense) (FTE) $335 $332 $337
Provision for loan losses 15 15 (31)
Noninterest income 116 55 71
Noninterest expenses 185 166 226
Provision (benefit) for income taxes
(FTE) 94 61 77
Income from discontinued operations,
net of tax - - -
Net income (loss) $157 $145 $136
Net credit-related charge-offs $6 $2 $21
Selected average balances:
Assets $39,897 $39,722 $37,166
Loans 38,766 38,473 35,849
Deposits 17,111 17,183 20,578
Liabilities 18,004 18,122 21,361
Attributed equity 2,749 2,639 2,585
Statistical data:
Return on average assets (1) 1.58 % 1.46 % 1.46 %
Return on average attributed equity 22.91 21.94 21.00
Net interest margin (2) 3.43 3.41 3.76
Efficiency ratio 41.08 42.81 55.23
Retail Bank
December September December
31, 30, 31,
Three Months Ended 2006 2006 2005
Earnings summary:
Net interest income (expense) (FTE) $159 $160 $156
Provision for loan losses 6 6 8
Noninterest income 53 53 51
Noninterest expenses 169 153 154
Provision (benefit) for income taxes
(FTE) 12 18 16
Income from discontinued operations,
net of tax - - -
Net income (loss) $25 $36 $29
Net credit-related charge-offs $16 $6 $8
Selected average balances:
Assets $6,786 $6,741 $6,599
Loans 6,073 6,037 5,891
Deposits 16,968 16,742 16,778
Liabilities 16,979 16,746 16,776
Attributed equity 831 825 826
Statistical data:
Return on average assets (1) 0.56 % 0.83 % 0.67 %
Return on average attributed equity 11.95 17.58 14.32
Net interest margin (2) 3.71 3.80 3.75
Efficiency ratio 79.92 71.81 74.05
Wealth & Institutional Management
December September December
31, 30, 31,
Three Months Ended 2006 2006 2005
Earnings summary:
Net interest income (expense) (FTE) $36 $37 $39
Provision for loan losses 2 - 2
Noninterest income 67 64 63
Noninterest expenses 89 79 96
Provision (benefit) for income taxes
(FTE) 2 7 2
Income from discontinued operations,
net of tax - - -
Net income (loss) $10 $15 $2
Net credit-related charge-offs $1 $- $1
Selected average balances:
Assets $3,822 $3,714 $3,631
Loans 3,673 3,577 3,470
Deposits 2,351 2,327 2,557
Liabilities 2,349 2,326 2,555
Attributed equity 309 295 319
Statistical data:
Return on average assets (1) 1.04 % 1.59 % 0.28 %
Return on average attributed equity 12.92 20.06 3.15
Net interest margin (2) 3.90 4.13 4.46
Efficiency ratio 86.16 77.98 94.40
Finance
December September December
31, 30, 31,
Three Months Ended 2006 2006 2005
Earnings summary:
Net interest income (expense) (FTE) $(26) $(28) $(32)
Provision for loan losses - - -
Noninterest income 16 16 22
Noninterest expenses 6 - 1
Provision (benefit) for income taxes
(FTE) (11) (7) (7)
Income from discontinued operations,
net of tax - - -
Net income (loss) $(5) $(5) $(4)
Net credit-related charge-offs $- $- $-
Selected average balances:
Assets $5,727 $5,277 $5,482
Loans 25 18 (9)
Deposits 6,817 5,682 1,615
Liabilities 14,633 14,072 7,983
Attributed equity 568 496 469
Statistical data:
Return on average assets (1) N/M N/M N/M
Return on average attributed equity N/M N/M N/M
Net interest margin (2) N/M N/M N/M
Efficiency ratio N/M N/M N/M
Other
December September December
31, 30, 31,
Three Months Ended 2006 2006 2005
Earnings summary:
Net interest income (expense) (FTE) $(1) $1 $1
Provision for loan losses (1) (6) 1
Noninterest income 10 7 -
Noninterest expenses 8 1 (8)
Provision (benefit) for income taxes
(FTE) 4 9 -
Income from discontinued operations,
net of tax 114 5 36
Net income (loss) $112 $9 $44
Net credit-related charge-offs $- $- $(2)
Selected average balances:
Assets $1,380 $1,336 $1,252
Loans 31 20 48
Deposits (44) (78) (50)
Liabilities 367 321 354
Attributed equity 823 948 902
Statistical data:
Return on average assets (1) N/M N/M N/M
Return on average attributed equity N/M N/M N/M
Net interest margin (2) N/M N/M N/M
Efficiency ratio N/M N/M N/M
Total
December September December
31, 30, 31,
Three Months Ended 2006 2006 2005
Earnings summary:
Net interest income (expense) (FTE) $503 $502 $501
Provision for loan losses 22 15 (20)
Noninterest income 262 195 207
Noninterest expenses 457 399 469
Provision (benefit) for income taxes
(FTE) 101 88 88
Income from discontinued operations,
net of tax 114 5 36
Net income (loss) $299 $200 $207
Net credit-related charge-offs $23 $8 $28
Selected average balances:
Assets $57,612 $56,790 $54,130
Loans 48,568 48,125 45,249
Deposits 43,203 41,856 41,478
Liabilities 52,332 51,587 49,029
Attributed equity 5,280 5,203 5,101
Statistical data:
Return on average assets (1) 2.07 % 1.41 % 1.53 %
Return on average attributed equity 22.63 15.38 16.28
Net interest margin (2) 3.75 3.79 4.00
Efficiency ratio 59.81 57.15 66.13
(1) Return on average assets is calculated based on the greater of
average assets or average liabilities and attributed equity.
(2) Net interest margin is calculated based on the greater of average
earning assets or average deposits and purchased funds.
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
MARKET SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
(dollar amounts in millions) Midwest & Other Markets
December September December
31, 30, 31,
Three Months Ended 2006 2006 2005
Earnings summary:
Net interest income (expense) (FTE) $270 $274 $272
Provision for loan losses 34 21 (16)
Noninterest income 137 126 129
Noninterest expenses 252 227 288
Provision (benefit) for income taxes
(FTE) 33 41 46
Income from discontinued operations,
net of tax - - -
Net income (loss) $88 $111 $83
Net credit-related charge-offs $23 $5 $27
Selected average balances:
Assets $25,165 $25,286 $24,799
Loans 24,010 24,043 23,512
Deposits 18,159 18,243 18,833
Liabilities 19,007 19,095 19,571
Attributed equity 2,073 2,013 2,065
Statistical data:
Return on average assets (1) 1.40 % 1.75 % 1.34 %
Return on average attributed equity 17.02 21.99 16.07
Net interest margin (2) 4.44 4.49 4.55
Efficiency ratio 61.85 56.77 71.76
Western
December September December
31, 30, 31,
Three Months Ended 2006 2006 2005
Earnings summary:
Net interest income (expense) (FTE) $179 $176 $188
Provision for loan losses (15) 4 (4)
Noninterest income 75 23 34
Noninterest expenses 122 108 124
Provision (benefit) for income taxes
(FTE) 63 31 38
Income from discontinued operations,
net of tax - - -
Net income (loss) $84 $56 $64
Net credit-related charge-offs $(2) $- $1
Selected average balances:
Assets $16,699 $16,557 $15,646
Loans 16,156 16,000 14,963
Deposits 14,168 14,005 17,048
Liabilities 14,205 14,075 17,090
Attributed equity 1,150 1,105 1,087
Statistical data:
Return on average assets (1) 2.00 % 1.35 % 1.41 %
Return on average attributed equity 29.05 20.24 23.55
Net interest margin (2) 4.38 4.37 4.37
Efficiency ratio 48.24 54.14 55.99
Texas
December September December
31, 30, 31,
Three Months Ended 2006 2006 2005
Earnings summary:
Net interest income (expense) (FTE) $69 $67 $62
Provision for loan losses 3 (1) (2)
Noninterest income 20 19 19
Noninterest expenses 59 54 55
Provision (benefit) for income taxes
(FTE) 10 11 10
Income from discontinued operations,
net of tax - - -
Net income (loss) $17 $22 $18
Net credit-related charge-offs $2 $3 $(1)
Selected average balances:
Assets $6,704 $6,475 $5,451
Loans 6,429 6,202 5,251
Deposits 3,811 3,691 3,718
Liabilities 3,824 3,707 3,719
Attributed equity 566 544 502
Statistical data:
Return on average assets (1) 1.03 % 1.39 % 1.38 %
Return on average attributed equity 12.18 16.51 14.92
Net interest margin (2) 4.26 4.28 4.73
Efficiency ratio 66.14 62.20 67.03
Florida
December September December
31, 30, 31,
Three Months Ended 2006 2006 2005
Earnings summary:
Net interest income (expense) (FTE) $12 $12 $10
Provision for loan losses 1 (3) 1
Noninterest income 4 4 3
Noninterest expenses 10 9 9
Provision (benefit) for income taxes
(FTE) 2 3 1
Income from discontinued operations,
net of tax - - -
Net income (loss) $3 $7 $2
Net credit-related charge-offs $- $- $3
Selected average balances:
Assets $1,937 $1,859 $1,500
Loans 1,917 1,842 1,484
Deposits 292 313 314
Liabilities 296 317 312
Attributed equity 100 97 76
Statistical data:
Return on average assets (1) 0.67 % 1.46 % 0.56 %
Return on average attributed equity 13.04 27.91 11.07
Net interest margin (2) 2.63 2.63 2.70
Efficiency ratio 63.07 56.49 64.82
Finance & Other Businesses
December September December
31, 30, 31,
Three Months Ended 2006 2006 2005
Earnings summary:
Net interest income (expense) (FTE) $(27) $(27) $(31)
Provision for loan losses (1) (6) 1
Noninterest income 26 23 22
Noninterest expenses 14 1 (7)
Provision (benefit) for income taxes
(FTE) (7) 2 (7)
Income from discontinued operations,
net of tax 114 5 36
Net income (loss) $107 $4 $40
Net credit-related charge-offs $- $- $(2)
Selected average balances:
Assets $7,107 $6,613 $6,734
Loans 56 38 39
Deposits 6,773 5,604 1,565
Liabilities 15,000 14,393 8,337
Attributed equity 1,391 1,444 1,371
Statistical data:
Return on average assets (1) N/M N/M N/M
Return on average attributed equity N/M N/M N/M
Net interest margin (2) N/M N/M N/M
Efficiency ratio N/M N/M N/M
Total
December September December
31, 30, 31,
Three Months Ended 2006 2006 2005
Earnings summary:
Net interest income (expense) (FTE) $503 $502 $501
Provision for loan losses 22 15 (20)
Noninterest income 262 195 207
Noninterest expenses 457 399 469
Provision (benefit) for income taxes
(FTE) 101 88 88
Income from discontinued operations,
net of tax 114 5 36
Net income (loss) $299 $200 $207
Net credit-related charge-offs $23 $8 $28
Selected average balances:
Assets $57,612 $56,790 $54,130
Loans 48,568 48,125 45,249
Deposits 43,203 41,856 41,478
Liabilities 52,332 51,587 49,029
Attributed equity 5,280 5,203 5,101
Statistical data:
Return on average assets (1) 2.07 % 1.41 % 1.53 %
Return on average attributed equity 22.63 15.38 16.28
Net interest margin (2) 3.75 3.79 4.00
Efficiency ratio 59.81 57.15 66.13
(1) Return on average assets is calculated based on the greater of
average assets or average liabilities and attributed equity.
(2) Net interest margin is calculated based on the greater of average
earning assets or average deposits and purchased funds.
FTE - Fully Taxable Equivalent
N/M - Not Meaningful
SOURCE: Comerica Incorporated
