DALLAS, Jan. 17 /PRNewswire-FirstCall/ -- Comerica Incorporated (NYSE: CMA) today reported fourth quarter 2007 income from continuing operations of $117 million, or $0.77 per diluted share, compared to $180 million, or $1.17 per diluted share, for the third quarter 2007 and $185 million, or $1.16 per diluted share, for the fourth quarter 2006. Fourth quarter 2007 included a $108 million provision for loan losses, compared to $45 million for the third quarter 2007 and $22 million for the fourth quarter 2006. Fourth quarter 2007 also included $13 million of noninterest expense related to Comerica's membership in Visa, Inc. (Visa) and fourth quarter 2006 included $47 million of noninterest income from a lawsuit settlement.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010807/CMALOGO ) (dollar amounts in millions, except per share data) 4th Qtr '07 3rd Qtr '07 4th Qtr '06 Net interest income $489 $503 $502 Provision for loan losses 108 45 22 Noninterest income 230 230 262 Noninterest expenses 450 423 457 Income from continuing operations, net of tax 117 180 185 Net income 119 181 299 Diluted EPS from continuing operations 0.77 1.17 1.16 Diluted EPS from discontinued operations* 0.02 0.01 0.71 Diluted EPS 0.79 1.18 1.87 Return on average common shareholders' equity from continuing operations 9.18% 14.24% 14.03% Return on average common shareholders' equity 9.34 14.38 22.63 Net interest margin 3.43 3.66 3.75 * In the fourth quarter 2006, Comerica sold its stake in Munder Capital Management (Munder) and reports Munder as a discontinued operation in all periods presented.
Income from continuing operations for 2007 was $682 million, or $4.40 per diluted share, compared to $782 million, or $4.81 per diluted share, for 2006. The provision for loan losses was $212 million for 2007, compared to $37 million for 2006. Return on average common shareholders' equity from continuing operations was 13.41 percent for 2007 and 15.11 percent for 2006.
"2007 was a challenging year for the banking industry, including Comerica," said Ralph W. Babb Jr., chairman and chief executive officer. "While we continued to execute our strategy, reflected by strong loan growth, particularly in our high growth markets, challenges in the residential real estate development portfolio affected our performance. Our fourth quarter earnings were largely impacted by an increase in the provision for loan losses and a decline in the net interest margin, driven in part by a decision to increase the securities portfolio and a competitive funding environment. Our fourth quarter expenses were impacted by a $13 million charge related to Visa and $2 million of moving costs related to our previously announced headquarters relocation.
"We opened 30 new banking centers in 2007, 28 of them in our high-growth markets of Texas, California and Arizona. We also relocated our corporate headquarters from Detroit to Dallas, positioning our company in a more central location with greater accessibility to all of our markets. Our capital position remains solid and provides us with a cushion to weather continued challenges in the economic environment and the flexibility to continue to invest in our growth markets."
Fourth Quarter and Full Year 2007 Highlights
Fourth Quarter 2007 Compared to Third Quarter 2007
-- On an annualized basis, excluding Financial Services Division (FSD)
loans, average loans increased nine percent, led by growth of 28
percent in the Texas market, eight percent in the Western market, six
percent in the Florida market and two percent in the Midwest market
-- The net interest margin was 3.43 percent in the fourth quarter 2007, a
decrease of 23 basis points from 3.66 percent in the third quarter
2007, largely due to securities purchases, competitive loan pricing,
interest reversals on new nonaccrual loans, a competitive deposit
pricing environment that had a muted reaction to recent Federal Reserve
rate cuts and an increase in borrowings at higher market-driven costs
due to disruptions in financial markets
-- Net credit-related charge-offs were $64 million, or 50 basis points as
a percent of average total loans, for the fourth quarter 2007, compared
to $40 million, or 32 basis points as a percent of average total loans,
for the third quarter 2007
-- Noninterest income remained flat at $230 million and included positive
trends in fiduciary income, service charges on deposit accounts and
commercial lending fees, offset by a decrease in net income from
principal investing and warrants
-- Noninterest expenses increased $27 million from the third quarter 2007,
mostly due to the recording of a $13 million estimated liability
related to membership in Visa and a $9 million increase in salaries
expense, primarily due to increases in severance and deferred
compensation plan costs (offset by an increase in deferred compensation
asset returns in noninterest income)
-- Open market share repurchases in the fourth quarter 2007 totaled 1.0
million shares, or one percent of total shares outstanding at September
30, 2007
Full Year 2007 Compared to Full Year 2006
-- Excluding Financial Services Division loans, average loan growth was
seven percent, with 16 percent growth in the Texas market, 13 percent
in the Western market and 11 percent in the Florida market, with the
Midwest market down one percent
-- The net interest margin was 3.66 percent
-- Total revenue increased two percent, including four percent growth in
noninterest income. Excluding a $47 million Financial Services
Division-related lawsuit settlement and the $12 million loss on the
sale of the Mexican bank charter in 2006, total revenue growth was
three percent, and noninterest income growth was eight percent
-- Net credit-related charge-offs were 31 basis points as a percent of
average total loans for 2007, compared to 15 basis points for 2006
-- Noninterest expenses increased $17 million, or one percent, from 2006.
2007 included incremental expenses related to new banking centers ($23
million), the Visa charge discussed above ($13 million) and costs
associated with the previously announced headquarters move to Dallas,
Texas ($6 million). 2006 included interest on tax liabilities ($38
million), which was classified in the "provision for income taxes" in
2007 (see "Tax-related items" below). Full time equivalent employees
increased less than one percent from December 31, 2006, to December 31,
2007, even with the addition of 30 new banking centers during the
period
-- Open market share repurchases in 2007 totaled 10.0 million shares, or
six percent of total shares outstanding at December 31, 2006
Net Interest Income and Net Interest Margin
(dollar amounts in millions) 4th Qtr '07 3rd Qtr '07 4th Qtr '06
Net interest income $489 $503 $502
Net interest margin 3.43% 3.66% 3.75%
Selected average balances:
Total earning assets $56,621 $54,641 $53,289
Total loans 50,699 49,874 48,568
Total loans, excluding FSD loans
(primarily low-rate) 49,758 48,683 46,659
Total interest-bearing deposits 31,834 30,276 30,554
Total noninterest-bearing
deposits 10,533 10,840 12,649
Total noninterest-bearing
deposits, excluding FSD 8,473 8,265 8,696
-- The $14 million decrease in net interest income in the fourth quarter
2007, when compared to third quarter 2007, resulted primarily from
competitive loan pricing and a competitive deposit pricing environment
that had a muted reaction to recent Federal Reserve rate cuts,
partially offset by growth in earning assets.
-- The net interest margin of 3.43 percent declined 23 basis points,
reflecting securities purchases, competitive loan pricing, a
competitive deposit pricing environment, interest reversals on new
nonaccrual loans and an increase in borrowings at higher market-driven
costs due to disruptions in financial markets. The impact of a decline
in average Financial Services Division noninterest bearing deposits was
largely offset by a decline in average Financial Services Division
loans (primarily low-rate).
Noninterest Income
Noninterest income was $230 million for the fourth quarter 2007, compared to $230 million for the third quarter 2007 and $262 million for the fourth quarter 2006. Noninterest income in the fourth quarter 2007, compared to the third quarter 2007, included positive trends in fiduciary income, service charges on deposit accounts, commercial lending fees and an increase in deferred compensation asset returns, offset by a decrease in net income from principal investing and warrants. Fourth quarter 2006 noninterest income included $47 million from the settlement of a Financial Services Division- related lawsuit. Certain categories of noninterest income are highlighted in the table below.
(in millions) 4th Qtr '07 3rd Qtr '07 4th Qtr '06
Net income from principal
investing and warrants $6 $11 $3
Net securities gains 3 4 1
Income from lawsuit settlement - - 47
Other noninterest income
Deferred compensation asset
returns* 2 (2) 3
Investment banking fees 3 4 10
* Compensation deferred by Comerica officers is invested in stocks and
bonds to reflect the investment selections of the officers. Income
(loss) earned on these assets is reported in noninterest income and the
offsetting increase (decrease) in the liability is reported in salaries
expense.
Noninterest Expenses
Noninterest expenses were $450 million for the fourth quarter 2007, compared to $423 million for the third quarter 2007 and $457 million for the fourth quarter 2006. The $27 million increase in noninterest expenses in the fourth quarter 2007, compared to the third quarter 2007, reflected $13 million to record an estimated liability related to membership in Visa (discussed below), a $9 million increase in salaries expense and a $3 million increase in the provision for credit losses on lending-related commitments, partially offset by a $4 million decrease in customer services expense. The increase in salaries expense was primarily due to increases in severance and deferred compensation plan costs (offset by an increase in deferred compensation asset returns in noninterest income). Customer services expense varies from period to period as a result of changes in the level of noninterest-bearing deposits in the Corporation's Financial Services Division, the earnings credit allowance provided on these deposits and a competitive environment. In addition, noninterest expenses included approximately $2 million of costs related to the previously announced relocation of Comerica's headquarters to Dallas, Texas, in both the fourth quarter and third quarters of 2007, reflected in salaries and other noninterest expenses.
Members of the Visa card association participate in a loss sharing arrangement to allocate financial responsibilities arising from any potential adverse resolution of certain antitrust lawsuits challenging the practices of the association. Comerica recorded a $13 million expense in the fourth quarter 2007 (in "litigation and operational losses") related to this loss sharing arrangement. Comerica believes that its share of the proceeds from the expected initial public offering of Visa, anticipated in the first quarter 2008, will exceed its share of recorded losses.
Certain categories of noninterest expenses are highlighted in the table below.
4th Qtr '07 3rd Qtr '07 4th Qtr '06
Salaries
Regular salaries $163 $162 $162
Severance 3 - 5
Incentives 36 35 48
Deferred compensation plan costs 2 (2) 4
Share-based compensation 12 12 12
Total salaries 216 207 231
Employee benefits 48 49 42
Customer services 7 11 14
Litigation and operational losses 18 6 4
Provision for credit losses on
lending-related commitments 3 - (4)
Other noninterest expenses
Interest on tax liabilities* n/a n/a 15
Charitable Foundation contribution 2 - 10
Other real estate expense 3 3 (2)
Redemption premium on trust
preferred securities - - 3
* Effective with the adoption of FASB Interpretation No. 48, "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement
No. 109," Comerica changed its accounting policy and prospectively began
to classify interest on tax liabilities in the "provision for income
taxes." Prior to January 1, 2007, interest on tax liabilities was
classified in "other noninterest expenses."
n/a - not applicable
Tax-related Items
Interest on tax liabilities was classified in the "provision for income taxes" in 2007 and in "other noninterest expenses" in 2006. Fourth quarter 2007 interest on tax liabilities reflected a $9 million reduction ($6 million after-tax) of interest resulting from a settlement with the Internal Revenue Service on asset depreciation.
Fourth quarter 2006 reflected a charge of $31 million after-tax to Comerica's combined tax and related interest reserves for disallowed loan benefits related to a series of loans to foreign borrowers based on settlements discussed with the Internal Revenue Service. Of the total, $22 million was included in the provision for income taxes and $14 million ($9 million after-tax) was for tax-related interest included in other noninterest expenses.
Credit Quality
"We increased the provision for loan losses by $63 million from the third quarter, due to the continued residential real estate development challenges in Michigan and California," said Babb.
-- The allowance to loan ratio increased to 1.10 percent at December 31,
2007, from 1.03 percent at September 30, 2007
-- The provision for loan losses and loan quality reflected ongoing
challenges to the residential real estate development industry located
in Michigan (Midwest market) and both northern and southern California
(Western market)
-- Nonperforming assets increased to 83 basis points of total loans and
foreclosed property for the fourth quarter 2007. During the fourth
quarter 2007, $185 million of loan relationships greater than $2
million were transferred to nonaccrual status, an increase of $91
million from the third quarter 2007. Of the transfers of loan
relationships greater than $2 million to nonaccrual in the fourth
quarter 2007, $143 million were in the real estate industry, $60
million were from the Midwest market and $103 million were from the
Western market
(dollar amounts in millions) 4th Qtr '07 3rd Qtr '07 4th Qtr '06
Net loan charge-offs $63 $40 $22
Net lending-related commitment
charge-offs 1 - 1
Total net credit-related
charge-offs 64 40 23
Net loan charge-offs/Average
total loans 0.50% 0.32% 0.18%
Net credit-related charge-
offs/Average total loans 0.50 0.32 0.19
Provision for loan losses $108 $45 $22
Provision for credit losses on
lending-related commitments 3 - (4)
Total provision for
credit losses 111 45 18
Nonperforming assets (NPAs) 423 291 232
NPAs/Total loans and
foreclosed property 0.83% 0.59% 0.49%
Allowance for loan losses $557 $512 $493
Allowance for credit losses on
lending-related commitments* 21 19 26
Total allowance for
credit losses 578 531 519
Allowance for loan
losses/Total loans 1.10% 1.03% 1.04%
Allowance for loan
losses/Nonperforming loans 138 188 231
*Included in "Accrued expenses and other liabilities" on the consolidated
balance sheets.
Balance Sheet and Capital Management
Total assets and common shareholders' equity were $62.3 billion and $5.1 billion, respectively, at December 31, 2007, compared to $60.0 billion and $5.1 billion, respectively, at September 30, 2007. There were approximately 150 million shares outstanding at December 31, 2007, compared to 151 million shares outstanding at September 30, 2007. Open market share repurchases for the current and prior quarter and full year 2007 are shown in the following table:
4th Qtr '07 3rd Qtr '07 Full Year 2007
Number Number Number
(in millions) of Shares Amount of Shares Amount of Shares Amount
Open market
share repurchases 1.0 $47 2.0 $109 10.0 $580
Comerica's fourth quarter 2007 estimated Tier 1 common, Tier 1 and total risk-based capital ratios were 6.80 percent, 7.46 percent and 11.11 percent, respectively.
Full Year 2008 Outlook Compared to Full Year 2007 from Continuing Operations
-- Mid to high single-digit average loan growth, excluding Financial
Services Division loans, with flat growth in the Midwest market, high
single-digit growth in the Western market and low double-digit growth
in the Texas market
-- Average earning asset growth in excess of average loan growth
-- Average Financial Services Division noninterest-bearing deposits of
$1.2 to $1.4 billion. Financial Services Division loans will fluctuate
in tandem with the level of noninterest-bearing deposits
-- Based on a 50 basis point Federal Reserve rate cut in January and a 25
basis point cut in March 2008, average full year net interest margin
between 3.20 and 3.25 percent, including the effects of higher levels
of securities, lower value of noninterest-bearing deposits, absence of
the benefit of maturing swaps with negative spreads (10 basis points
in 2007) and the 2008 FAS 91 impact discussed below
-- Average net credit-related charge-offs between 40 and 50 basis points
of average loans, with a provision for credit losses exceeding net
charge-offs
-- Low single-digit growth in noninterest income
-- Low single-digit decline in noninterest expenses, excluding the
provision for credit losses on lending-related commitments and
including the 2008 FAS 91 impact discussed below
-- Effective tax rate of about 32 percent
-- Maintain a Tier one common capital ratio similar to year-end 2007
-- Statement of Financial Accounting Standards No. 91 (FAS 91) -
Accounting for Loan Origination Fees and Costs. Beginning in 2008, a
change in the application of FAS 91 will result in deferral and
amortization (over the loan life) to net interest income of more fees
and costs. Based on assumptions for loan growth, loan fees and average
loan life, the estimated impact on 2008, compared to 2007, will be to
lower the net interest margin by about 3-4 basis points (approximately
$20 million), lower noninterest expenses by about 3-4 percent
(approximately $60 million) and increase earnings per share by about
four cents per quarter
Business Segments
Comerica's continuing operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank, and Wealth & Institutional Management. The Finance Division also is included as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at December 31, 2007 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses fourth quarter 2007 results compared to third quarter 2007.
The following table presents net income (loss) by business segment.
(dollar amounts in millions) 4th Qtr '07 3rd Qtr '07 4th Qtr '06
Business Bank $90 88% $134 72% $154 80%
Retail Bank (1) (1) 32 17 27 14
Wealth & Institutional
Management 13 13 20 11 11 6
102 100% 186 100% 192 100%
Finance 1 2 (4)
Other* 16 (7) 111
Total $119 $181 $299
* Includes discontinued operations and items not directly associated with
the three major business segments or the Finance Division.
Business Bank
(dollar amounts in millions) 4th Qtr '07 3rd Qtr '07 4th Qtr '06
Net interest income (FTE) $327 $332 $335
Provision for loan losses 88 43 15
Noninterest income 80 82 116
Noninterest expenses 186 177 194
Net income 90 134 154
Net credit-related charge-offs 50 30 6
Selected average balances:
Assets 41,327 40,796 39,872
Loans 40,285 39,746 38,766
FSD loans 941 1,191 1,909
Deposits 15,931 15,948 17,110
FSD deposits 3,181 3,789 5,291
Net interest margin 3.22% 3.31% 3.43%
-- Average loans, excluding the Financial Services Division, increased
$789 million, or eight percent on an annualized basis, with strong
growth in Energy, Middle Market and Technology and Life Sciences
-- Average deposits increased $591 million, excluding the $608 million
decline in the Financial Services Division, primarily due to growth in
Technology and Life Sciences, Global Corporate and Middle Market,
partially offset by a decrease in Commercial Real Estate
-- The net interest margin of 3.22 percent decreased nine basis points,
primarily due to narrowing loan and deposit spreads resulting from
competitive loan and deposit pricing
-- The provision for loan losses increased $45 million, primarily due to
declining credit quality in Commercial Real Estate (residential real
estate developers) and increased reserves in Technology and Life
Sciences primarily related to a single customer, partially offset by a
decline in reserves related to the automotive supplier portfolio, which
continued to reduce in size and exhibited stable credit quality metrics
-- Noninterest expenses increased $9 million, primarily due to an increase
in net corporate overhead expenses resulting from year end adjustments
to allocation rates
Retail Bank
(dollar amounts in millions) 4th Qtr '07 3rd Qtr '07 4th Qtr '06
Net interest income (FTE) $151 $159 $159
Provision for loan losses 26 7 6
Noninterest income 55 56 53
Noninterest expenses 182 160 164
Net income (1) 32 27
Net credit-related charge-offs 14 9 16
Selected average balances:
Assets 6,998 6,854 6,810
Loans 6,229 6,111 6,100
Deposits 17,254 17,144 16,969
Net interest margin 3.47% 3.68% 3.71%
-- Average loans increased $118 million, or eight percent on an annualized
basis, primarily due to growth in the Small Business Banking portfolio
in the Texas and Western markets
-- Average deposits increased $110 million, primarily due to growth in the
Western and Texas markets
-- The net interest margin of 3.47 percent decreased 21 basis points,
primarily due to a decline in deposit spreads resulting from
competitive pricing
-- The provision for loan losses increased $19 million, primarily due to a
modest increase in charge-offs related to Small Business Banking
-- Noninterest expenses increased $22 million, primarily due to the Visa-
related expense discussed above, an increase in net corporate overhead
expenses for the same reason noted in the Business Bank and an increase
in expenses related to the opening of 17 new banking centers in the
fourth quarter
Wealth and Institutional Management
(dollar amounts in millions) 4th Qtr '07 3rd Qtr '07 4th Qtr '06
Net interest income (FTE) $36 $36 $36
Provision for loan losses 1 (5) 2
Noninterest income 72 70 67
Noninterest expenses 86 81 86
Net income 13 20 11
Net credit-related charge-offs - 1 1
Selected average balances:
Assets 4,321 4,152 3,794
Loans 4,146 3,989 3,646
Deposits 2,552 2,378 2,351
Net interest margin 3.41% 3.58% 3.90%
-- Average loans increased $157 million, or 16 percent on an annualized
basis
-- Average deposits increased $174 million, primarily due to an increase
money market investment deposits in the Western market
-- The net interest margin of 3.41 percent declined 17 basis points,
primarily due to lower loan and deposit spreads resulting from
competitive pricing
-- The provision for loan losses increased $6 million. The third quarter
negative provision included a large improvement related to a single
customer in the Midwest market
-- Noninterest income increased $2 million, primarily in fiduciary income
-- Noninterest expenses increased $5 million, partially due to an increase
in net corporate overhead expenses, for the same reason noted in the
Business Bank
Geographic Market Segments
Comerica also provides market segment results for four primary geographic markets: Midwest, Western, Texas and Florida. In addition to the four primary geographic markets, Other Markets and International are also reported as market segments. In the fourth quarter 2007, Comerica revised the definition of Other Markets to include businesses with a national perspective, which were previously included primarily in the Midwest market. The financial results below are based on methodologies in effect at December 31, 2007 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses fourth quarter 2007 results compared to third quarter 2007.
The following table presents net income (loss) by market segment.
(dollar amounts in
millions) 4th Qtr '07 3rd Qtr '07 4th Qtr '06
Midwest $55 55% $75 41% $58 30%
Western (5) (5) 50 27 83 44
Texas 12 12 26 14 17 9
Florida (1) (1) 3 1 3 1
Other Markets 30 29 17 9 24 12
International 11 10 15 8 7 4
102 100% 186 100% 192 100%
Finance & Other* 17 (5) 107
Total $119 $181 $299
* Includes discontinued operations and items not directly associated with the geographic markets.
Midwest
(dollar amounts in millions) 4th Qtr '07 3rd Qtr '07 4th Qtr '06
Net interest income (FTE) $206 $216 $224
Provision for loan losses 20 15 40
Noninterest income 120 119 116
Noninterest expenses 218 206 215
Net income 55 75 58
Net credit-related charge-offs 38 23 12
Selected average balances:
Assets 19,228 19,131 19,297
Loans 18,602 18,526 18,671
Deposits 16,117 15,636 15,860
Net interest margin 4.38% 4.60% 4.74%
-- Average loans increased $76 million, or two percent on an annualized
basis, primarily due to increases in the Global Corporate, Private
Banking, National Dealer Services and Small Business Banking lines of
business, partially offset by a decrease in Middle Market Banking
-- Average deposits increased $481 million, primarily in the Global
Corporate and Small Business Banking lines of business
-- The net interest margin of 4.38 percent declined 22 basis points,
primarily due to a decline in loan and deposit spreads resulting from
competitive loan and deposit pricing
-- The provision for loan losses increased $5 million, primarily due to an
increase in credit risk in the Commercial Real Estate line of business
(residential real estate developers) and a modest increase in charge-
offs related to Small Business Banking, partially offset by a decline
in reserves related to the automotive supplier portfolio, which
continued to reduce in size and exhibited stable credit quality metrics
-- Noninterest expenses increased $12 million, partially due to the Visa-
related expense as discussed above, the provision for credit losses on
lending-related commitments and net corporate overhead expenses, for
the same reason noted in the Business Bank
Western Market
(dollar amounts in millions) 4th Qtr '07 3rd Qtr '07 4th Qtr '06
Net interest income (FTE) $173 $177 $178
Provision for loan losses 92 23 (15)
Noninterest income 35 36 74
Noninterest expenses 121 110 122
Net income (5) 50 83
Net credit-related charge-offs 22 7 (2)
Selected average balances:
Assets 17,137 17,095 16,572
Loans 16,615 16,543 16,037
FSD loans 941 1,191 1,909
Deposits 13,012 13,009 14,145
FSD deposits 3,045 3,607 5,130
Net interest margin 4.13% 4.24% 4.40%
-- Excluding the Financial Services Division, average loans increased $322
million, or eight percent on an annualized basis, primarily due to \
growth in the Middle Market Banking, Technology and Life Sciences and
Private Banking lines of business
-- Excluding the Financial Services Division, average deposits increased
$565 million, primarily due to growth in the Middle Market Banking,
Private Banking, Retail Banking, Technology and Life Sciences and
Entertainment Lending lines of business
-- The net interest margin of 4.13 percent declined 11 basis points due to
a decline in deposits spreads resulting from competitive pricing
-- The provision for loan losses increased $69 million, primarily due to a
decline in credit quality in Commercial Real Estate (residential real
estate developers), a modestly higher level of charge-offs related to
Small Business Banking and increased reserves in Technology and Life
Sciences primarily related to a single customer
-- Noninterest expenses increased $11 million, primarily due to banking
center expansion, the Visa-related expense discussed above, advertising
expenses and net corporate overhead expenses, for the same reason noted
in the Business Bank, partially offset by a decrease in customer
service expenses
-- Eleven new banking centers were opened in the fourth quarter, eight in
California and three in Arizona. In 2007, a total of 13 new banking
centers were opened in California and three in Arizona
Texas Market
(dollar amounts in millions) 4th Qtr '07 3rd Qtr '07 4th Qtr '06
Net interest income (FTE) $72 $71 $69
Provision for loan losses 8 (2) 3
Noninterest income 23 24 20
Noninterest expenses 67 58 59
Net income 12 26 17
Total net credit-related charge-
offs 3 1 2
Selected average balances:
Assets 7,678 7,172 6,631
Loans 7,382 6,902 6,360
Deposits 3,935 3,920 3,794
Net interest margin 3.85% 4.08% 4.27%
-- Average loans increased $480 million, or 28 percent on an annualized
basis, primarily in Energy, Small Business Banking and Global Corporate
-- Average deposits increased $15 million
-- The net interest margin of 3.85 percent decreased 23 basis points,
primarily due to narrowing deposit spreads resulting from competitive
pricing
-- The provision for loan losses increased $10 million, primarily due to a
modestly higher level of charge-offs related to Small Business Banking
-- Noninterest expenses increased $9 million, primarily due to an increase
in advertising expenses, the Visa-related expense discussed above and
an increase in net corporate overhead expenses, for the same reason
noted in the Business Bank
-- Six new banking centers were opened in the fourth quarter, and a total
of 12 new banking centers were opened in 2007
Florida Market
(dollar amounts in millions) 4th Qtr '07 3rd Qtr '07 4th Qtr '06
Net interest income (FTE) $12 $13 $11
Provision for loan losses 5 3 1
Noninterest income 4 4 4
Noninterest expenses 12 10 10
Net income (1) 3 3
Net credit-related charge-offs - 1 -
Selected average balances:
Assets 1,731 1,706 1,631
Loans 1,717 1,692 1,611
Deposits 299 271 292
Net interest margin 2.70% 2.97% 2.80%
-- Average loans increased $25 million, or six percent on an annualized
basis
-- Average deposits increased $28 million
-- The net interest margin of 2.70 percent decreased 27 basis points,
primarily due to a decrease in loan spreads resulting from competitive
pricing
-- The provision for loan losses increased $2 million, primarily due to a
decline in credit quality in the Commercial Real Estate line of
business
Conference Call and Webcast
Comerica will host a conference call to review fourth quarter 2007 financial results at 7 a.m. CT Thursday, January 17, 2008. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 28504995). The call and supplemental financial information can also be accessed on the Internet at http://www.comerica.com/. A replay will be available approximately two hours following the conference call until January 31, 2008. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 28504995). A replay of the Webcast can also be accessed via Comerica's "Investor Relations" page at http://www.comerica.com/.
Comerica Incorporated is a financial services company headquartered in Dallas, Texas, and strategically aligned into three major business segments: the Business Bank, the Retail Bank, and Wealth & Institutional Management. Comerica focuses on relationships and helping people and businesses be successful. Comerica Bank locations can be found in Michigan, California, Texas, Arizona and Florida, with select businesses operating in several other states, and Canada and Mexico
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," "feels," "expects," "estimates," "seeks," "strives," "plans," "intends," "outlook," "forecast," "position," "target," "mission," "assume," "achievable," "potential," "strategy," "goal," "aspiration," "outcome," "continue," "remain," "maintain," "trend," "objective" 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 the pace of an economic recovery and related changes in employment levels, changes related to the headquarters relocation or to its underlying assumptions, the effects of war and other armed conflicts or acts of terrorism, the effects of natural disasters including, but not limited to, hurricanes, tornadoes, earthquakes and floods, the disruption of private or public utilities, the implementation of Comerica's strategies and business models, management's ability to maintain and expand customer relationships, changes in customer borrowing, repayment, investment and deposit practices, management's ability to retain key officers and employees, changes in the accounting treatment of any particular item, the impact of regulatory examinations, declines or other changes in the businesses or industries in which Comerica has a concentration of loans, including, but not limited to, the automotive production industry and the real estate business lines, the anticipated performance of any new banking centers, the entry of new competitors in Comerica's markets, changes in the level of fee income, changes in applicable laws and regulations, including those concerning taxes, banking, securities and insurance, changes in trade, monetary and fiscal policies, including the interest rate policies of the Board of Governors of the Federal Reserve System, fluctuations in inflation or interest rates, changes in general economic, political or industry conditions and related credit and market conditions, and adverse conditions in the stock market. Comerica cautions that the foregoing list of factors is not exclusive. 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.
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SOURCE: Comerica Incorporated
CONTACT: Media: Wayne J. Mielke, +1-214-462-4463, Investors: Darlene P.
Persons, +1-313-222-2840, or Paul Jaremski, +1-214-969-6476, all of Comerica
Incorporated
