/FIRST AND FINAL ADD -- CLTH016 -- Comerica Incorporated Earings/
PRNewswire
(:CMA)
CONSOLIDATED FINANCIAL HIGHLIGHTS
Comerica Incorporated and Subsidiaries
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30,
(in millions, except
per share data) 2008 2008 2007 2008 2007
PER SHARE AND COMMON STOCK
DATA
Diluted income from
continuing operations $0.37 $0.73 $1.25 $1.10 $2.44
Diluted net income 0.37 0.73 1.25 1.09 2.45
Cash dividends declared 0.66 0.66 0.64 1.32 1.28
Common shareholders' equity
(at period end) 33.78 34.93 32.74
Average diluted shares
(in thousands) 150,819 150,734 156,632 150,774 157,774
KEY RATIOS
Return on average common
shareholders' equity from
continuing operations 4.26% 8.51% 15.44% 6.38% 15.15%
Return on average common
shareholders' equity 4.25 8.42 15.44 6.34 15.16
Return on average assets
from continuing operations 0.34 0.69 1.35 0.51 1.34
Return on average assets 0.33 0.68 1.35 0.51 1.34
Average common shareholders'
equity as a percentage of
average assets 7.87 8.12 8.75 8.00 8.84
Tier 1 common capital ratio * 6.72 6.75 7.18
Tier 1 risk-based capital
ratio * 7.36 7.40 7.87
Total risk-based capital
ratio * 11.11 11.06 11.71
Leverage ratio * 8.55 8.82 9.68
AVERAGE BALANCES
Commercial loans $29,280 $29,178 $28,324 $29,230 $28,042
Real estate construction
loans 4,843 4,811 4,501 4,827 4,376
Commercial mortgage loans 10,374 10,142 9,634 10,258 9,654
Residential mortgage loans 1,906 1,916 1,791 1,911 1,748
Consumer loans 2,549 2,449 2,331 2,499 2,368
Lease financing 1,352 1,347 1,287 1,349 1,280
International loans 2,063 2,009 1,925 2,036 1,879
Total loans 52,367 51,852 49,793 52,110 49,347
Earning assets 61,088 59,518 54,304 60,303 53,729
Total assets 65,963 63,927 58,118 64,945 57,606
Interest-bearing deposits 33,116 33,440 30,049 33,278 30,232
Total interest-bearing
liabilities 48,483 46,793 40,157 47,638 39,332
Noninterest-bearing
deposits 10,648 10,622 11,633 10,635 11,897
Common shareholders' equity 5,193 5,192 5,088 5,193 5,090
NET INTEREST INCOME
Net interest income
(fully taxable equivalent
basis)** $443 $477 $510 $920 $1,013
Fully taxable equivalent
adjustment 1 1 1 2 2
Net interest margin** 2.91% 3.22% 3.76% 3.07% 3.79%
CREDIT QUALITY
Nonaccrual loans $730 $538 $244
Reduced-rate loans - - -
Total nonperforming loans 730 538 244
Foreclosed property 17 22 15
Total nonperforming assets 747 560 259
Loans past due 90 days or
more and still accruing 112 80 29
Gross loan charge-offs 118 116 43 $234 $77
Loan recoveries 6 6 13 12 31
Net loan charge-offs 112 110 30 222 46
Lending-related
commitment charge-offs 1 - - 1 3
Total net credit-related
charge-offs 113 110 30 223 49
Allowance for loan losses 663 605 507
Allowance for credit losses
on lending-related commitments 31 25 19
Total allowance for credit
losses 694 630 526
Allowance for loan losses as
a percentage of total loans 1.28% 1.16% 1.04%
Net loan charge-offs as a
percentage of average total
loans 0.86 0.85 0.24 0.85% 0.19%
Net credit-related charge-offs
as a percentage of average
total loans 0.86 0.85 0.24 0.86 0.20
Nonperforming assets as a
percentage of total loans and
foreclosed property 1.44 1.07 0.53
Allowance for loan losses as
a percentage of total
nonperforming loans 91 112 207
* June 30, 2008 ratios are estimated
** Second quarter 2008 net interest income declined $30 million due to a tax-related non-cash lease income charge. Excluding this charge, the net interest margin would have been 3.10% and 3.17% for the three- and six-month periods ended June 30, 2008.
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
June 30, March 31, Dec. 31, June 30,
(in millions, except share data) 2008 2008 2007 2007
ASSETS
Cash and due from banks $1,698 $1,929 $1,440 $1,372
Federal funds sold and securities
purchased under agreements to resell 77 45 36 1,217
Other short-term investments 249 356 373 251
Investment securities available-for-
sale 8,243 8,563 6,296 4,368
Commercial loans 28,763 29,475 28,223 27,146
Real estate construction loans 4,684 4,646 4,816 4,513
Commercial mortgage loans 10,504 10,482 10,048 9,728
Residential mortgage loans 1,879 1,926 1,915 1,839
Consumer loans 2,594 2,448 2,464 2,321
Lease financing 1,351 1,341 1,351 1,314
International loans 1,976 2,034 1,926 1,904
Total loans 51,751 52,352 50,743 48,765
Less allowance for loan losses (663) (605) (557) (507)
Net loans 51,088 51,747 50,186 48,258
Premises and equipment 674 670 650 616
Customers' liability on acceptances
outstanding 15 28 48 40
Accrued income and other assets 3,959 3,679 3,302 2,448
Total assets $66,003 $67,017 $62,331 $58,570
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $11,860 $12,792 $11,920 $12,763
Money market and NOW deposits 14,506 15,601 15,261 15,212
Savings deposits 1,391 1,408 1,325 1,397
Customer certificates of deposit 7,746 8,191 8,357 7,567
Institutional certificates of deposit 5,940 7,752 6,147 5,479
Foreign office time deposits 879 1,075 1,268 789
Total interest-bearing deposits 30,462 34,027 32,358 30,444
Total deposits 42,322 46,819 44,278 43,207
Short-term borrowings 4,075 2,434 2,807 297
Acceptances outstanding 15 28 48 40
Accrued expenses and other liabilities 1,651 1,679 1,260 1,269
Medium- and long-term debt 12,858 10,800 8,821 8,748
Total liabilities 60,921 61,760 57,214 53,561
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 178,735,252 shares at
6/30/08, 3/31/08, 12/31/07 and
6/30/07 894 894 894 894
Capital surplus 576 565 564 539
Accumulated other comprehensive loss (207) (67) (177) (308)
Retained earnings 5,451 5,496 5,497 5,391
Less cost of common stock in treasury
- 28,281,490 shares at 6/30/08,
28,233,996 shares at 3/31/08,
28,747,097 shares at 12/31/07 and
25,725,671 shares at 6/30/07 (1,632) (1,631) (1,661) (1,507)
Total shareholders' equity 5,082 5,257 5,117 5,009
Total liabilities and
shareholders' equity $66,003 $67,017 $62,331 $58,570
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Three Months Ended Six Months Ended
June 30, June 30,
(in millions, except per share data) 2008 2007 2008 2007
INTEREST INCOME
Interest and fees on loans $633 $882 $1,403 $1,733
Interest on investment securities 101 46 189 88
Interest on short-term investments 3 5 8 13
Total interest income 737 933 1,600 1,834
INTEREST EXPENSE
Interest on deposits 182 284 $435 570
Interest on short-term borrowings 19 24 48 46
Interest on medium- and long-term debt 94 116 199 207
Total interest expense 295 424 682 823
Net interest income 442 509 918 1,011
Provision for loan losses 170 36 329 59
Net interest income after
provision for loan losses 272 473 589 952
NONINTEREST INCOME
Service charges on deposit accounts 59 55 117 109
Fiduciary income 51 49 103 98
Commercial lending fees 21 17 38 33
Letter of credit fees 18 15 33 31
Foreign exchange income 12 10 22 19
Brokerage fees 10 10 20 21
Card fees 16 14 30 26
Bank-owned life insurance 8 9 18 19
Net securities gains 14 - 36 -
Net gain on sales of businesses - 2 - 3
Other noninterest income 33 44 62 69
Total noninterest income 242 225 479 428
NONINTEREST EXPENSES
Salaries 202 215 402 421
Employee benefits 48 50 95 96
Total salaries and employee
benefits 250 265 497 517
Net occupancy expense 36 33 74 68
Equipment expense 16 15 31 30
Outside processing fee expense 28 24 51 44
Software expense 20 15 39 30
Customer services 3 11 9 25
Litigation and operational losses
(recoveries) 3 (9) (5) (6)
Provision for credit losses on
lending-related commitments 7 (2) 11 (4)
Other noninterest expenses 60 59 119 114
Total noninterest expenses 423 411 826 818
Income from continuing operations
before income taxes 91 287 242 562
Provision for income taxes 35 91 76 177
Income from continuing operations 56 196 166 385
Income (loss) from discontinued
operations, net of tax - - (1) 1
NET INCOME $56 $196 $165 $386
Basic earnings per common share:
Income from continuing operations $0.37 $1.28 $1.11 $2.49
Net income 0.37 1.28 1.10 2.49
Diluted earnings per common share:
Income from continuing operations 0.37 1.25 1.10 2.44
Net income 0.37 1.25 1.09 2.45
Cash dividends declared on common
stock 100 98 199 199
Dividends per common share 0.66 0.64 1.32 1.28
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
Second First Fourth Third Second
(in millions, except per Quarter Quarter Quarter Quarter Quarter
share data) 2008 2008 2007 2007 2007
INTEREST INCOME
Interest and fees on loans $633 $770 $873 $895 $882
Interest on investment securities 101 88 66 52 46
Interest on short-term investments 3 5 5 5 5
Total interest income 737 863 944 952 933
INTEREST EXPENSE
Interest on deposits 182 253 303 294 284
Interest on short-term borrowings 19 29 30 29 24
Interest on medium- and long-term
debt 94 105 122 126 116
Total interest expense 295 387 455 449 424
Net interest income 442 476 489 503 509
Provision for loan losses 170 159 108 45 36
Net interest income after
provision for loan losses 272 317 381 458 473
NONINTEREST INCOME
Service charges on deposit accounts 59 58 57 55 55
Fiduciary income 51 52 52 49 49
Commercial lending fees 21 17 23 19 17
Letter of credit fees 18 15 16 16 15
Foreign exchange income 12 10 10 11 10
Brokerage fees 10 10 11 11 10
Card fees 16 14 14 14 14
Bank-owned life insurance 8 10 9 8 9
Net securities gains 14 22 3 4 -
Net gain on sales of businesses - - - - 2
Other noninterest income 33 29 35 43 44
Total noninterest income 242 237 230 230 225
NONINTEREST EXPENSES
Salaries 202 200 216 207 215
Employee benefits 48 47 48 49 50
Total salaries and employee
benefits 250 247 264 256 265
Net occupancy expense 36 38 36 34 33
Equipment expense 16 15 15 15 15
Outside processing fee expense 28 23 24 23 24
Software expense 20 19 17 16 15
Customer services 3 6 7 11 11
Litigation and operational losses
(recoveries) 3 (8) 18 6 (9)
Provision for credit losses on
lending-related commitments 7 4 3 - (2)
Other noninterest expenses 60 59 66 62 59
Total noninterest expenses 423 403 450 423 411
Income from continuing operations
before income taxes 91 151 161 265 287
Provision for income taxes 35 41 44 85 91
Income from continuing operations 56 110 117 180 196
Income (loss) from discontinued
operations, net of tax - (1) 2 1 -
NET INCOME $56 $109 $119 $181 $196
Basic earnings per common share:
Income from continuing
operations $0.37 $0.74 $0.78 $1.18 $1.28
Net income 0.37 0.73 0.80 1.20 1.28
Diluted earnings per common share:
Income from continuing
operations 0.37 0.73 0.77 1.17 1.25
Net income 0.37 0.73 0.79 1.18 1.25
Cash dividends declared on common
stock 100 99 97 97 98
Dividends per common share 0.66 0.66 0.64 0.64 0.64
Second Quarter 2008 Compared To:
First Quarter Second Quarter
2008 2007
(in millions, except per share data) Amount Percent Amount Percent
INTEREST INCOME
Interest and fees on loans $(137) (18)% $(249) (28)
Interest on investment securities 13 14 55 N/M
Interest on short-term investments (2) (27) (2) (40)
Total interest income (126) (15) (196) (21)
INTEREST EXPENSE
Interest on deposits (71) (28) (102) (36)
Interest on short-term borrowings (10) (32) (5) (20)
Interest on medium- and long-term debt (11) (10) (22) (19)
Total interest expense (92) (24) (129) (31)
Net interest income (34) (7) (67) (13)
Provision for loan losses 11 7 134 N/M
Net interest income after
provision for loan losses (45) (14) (201) (43)
NONINTEREST INCOME
Service charges on deposit accounts 1 - 4 5
Fiduciary income (1) (3) 2 3
Commercial lending fees 4 30 4 28
Letter of credit fees 3 19 3 18
Foreign exchange income 2 20 2 22
Brokerage fees - 1 - 2
Card fees 2 14 2 19
Bank-owned life insurance (2) (12) (1) (8)
Net securities gains (8) N/M 14 N/M
Net gain on sales of businesses - N/M (2) N/M
Other noninterest income 4 9 (11) (26)
Total noninterest income 5 2 17 7
NONINTEREST EXPENSES
Salaries 2 1 (13) (6)
Employee benefits 1 - (2) (4)
Total salaries and employee benefits 3 1 (15) (6)
Net occupancy expense (2) (4) 3 11
Equipment expense 1 3 1 3
Outside processing fee expense 5 21 4 17
Software expense 1 4 5 37
Customer services (3) (52) (8) (75)
Litigation and operational losses
(recoveries) 11 N/M 12 N/M
Provision for credit losses on
lending-related commitments 3 68 9 N/M
Other noninterest expenses 1 1 1 -
Total noninterest expenses 20 5 12 3
Income from continuing operations
before income taxes (60) (40) (196) (68)
Provision for income taxes (6) (13) (56) (61)
Income from continuing operations (54) (50) (140) (72)
Income (loss) from discontinued
operations, net of tax 1 N/M - N/M
NET INCOME $(53) (49)% $(140) (72)
Basic earnings per common share:
Income from continuing operations $(0.37) (50)% $(0.91) (71)
Net income (0.36) (49) (0.91) (71)
Diluted earnings per common share:
Income from continuing operations (0.36) (49) (0.88) (70)
Net income (0.36) (49) (0.88) (70)
Cash dividends declared on common stock 1 - 2 1
Dividends per common share - - 0.02 3
N/M - Not meaningful
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
Comerica Incorporated and Subsidiaries
2008 2007
(in millions) 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
Balance at beginning of period $605 $557 $512 $507 $500
Loan charge-offs:
Commercial 36 33 27 30 19
Real estate construction:
Commercial Real Estate
business line 57 52 24 6 6
Other business lines - 1 1 2 2
Total real estate
construction 57 53 25 8 8
Commercial mortgage:
Commercial Real Estate
business line 14 20 7 2 3
Other business lines 7 2 9 4 10
Total commercial mortgage 21 22 16 6 13
Residential mortgage 1 - - - -
Consumer 3 7 4 3 3
Lease financing - - - - -
International - 1 - - -
Total loan charge-offs 118 116 72 47 43
Recoveries on loans previously
charged-off:
Commercial 5 3 7 5 5
Real estate construction - 1 - - -
Commercial mortgage 1 1 1 1 2
Residential mortgage - - - - -
Consumer - 1 1 1 1
Lease financing - - - - -
International - - - - 5
Total recoveries 6 6 9 7 13
Net loan charge-offs 112 110 63 40 30
Provision for loan losses 170 159 108 45 36
Foreign currency translation
adjustment - (1) - - 1
Balance at end of period $663 $605 $557 $512 $507
Allowance for loan losses as
a percentage of total loans 1.28 1.16 1.10 1.03 1.04
Net loan charge-offs as a
percentage of average total
loans 0.86 0.85 0.50 0.32 0.24
Net credit-related charge-offs
as a percentage of average
total loans 0.86 0.85 0.50 0.32 0.24
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS
Comerica Incorporated and Subsidiaries
2008 2007
(in millions) 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
Balance at beginning of period $25 $21 $19 $19 $21
Less: Charge-offs on
lending-related commitments (1) 1 - 1 - -
Add: Provision for credit losses
on lending-related commitments 7 4 3 - (2)
Balance at end of period $31 $25 $21 $19 $19
Unfunded lending-related
commitments sold $2 $3 $22 $- $-
(1) Charge-offs result from the sale of unfunded lending-related commitments.
NONPERFORMING ASSETS
Comerica Incorporated and Subsidiaries
2008 2007
(in millions) 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
SUMMARY OF NONPERFORMING
ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Commercial $155 $87 $75 $64 $88
Real estate construction:
Commercial Real Estate
business line 322 271 161 55 37
Other business lines 4 4 6 4 7
Total real estate
construction 326 275 167 59 44
Commercial mortgage:
Commercial Real Estate
business line 143 105 66 63 20
Other business lines 95 64 75 77 84
Total commercial mortgage 238 169 141 140 104
Residential mortgage 4 1 1 1 1
Consumer 4 3 3 4 3
Lease financing - - - - -
International 3 3 4 4 4
Total nonaccrual loans 730 538 391 272 244
Reduced-rate loans - - 13 - -
Total nonperforming loans 730 538 404 272 244
Foreclosed property 17 22 19 19 15
Total nonperforming assets $747 $560 $423 $291 $259
Nonperforming loans as a
percentage of total loans 1.41 % 1.03 % 0.80 % 0.55 % 0.50 %
Nonperforming assets as a
percentage of total loans
and foreclosed property 1.44 1.07 0.83 0.59 0.53
Allowance for loan losses as
a percentage of total
nonperforming loans 91 112 138 188 207
Loans past due 90 days or
more and still accruing $112 $80 $54 $56 $29
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at
beginning of period $538 $391 $272 $244 $218
Loans transferred to
nonaccrual (1) 304 281 185 94 107
Nonaccrual business loan
gross charge-offs (2) (113) (108) (68) (44) (40)
Loans transferred to
accrual status (1) - - - (5) (8)
Nonaccrual business loans
sold (3) - (15) - (11) -
Payments/Other (4) 1 (11) 2 (6) (33)
Nonaccrual loans at end of
period $730 $538 $391 $272 $244
(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 $113 $108 $68 $44 $40
Performing watch list loans 1 1 - - -
Consumer and residential
mortgage loans 4 7 4 3 3
Total gross loan
charge-offs $118 $116 $72 $47 $43
(3) Analysis of loans sold:
Nonaccrual business loans $- $15 $- $11 $-
Performing watch list loans 7 6 13 - -
Total loans sold $7 $21 $13 $11 $-
(4) Includes net changes related to nonaccrual loans with less than $2 million, other than business loan gross charge-offs and nonaccrual loans sold, and payments on nonaccrual loans with book balances greater than $2 million.
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Six Months Ended
June 30, 2008 June 30, 2007
(dollar amounts in Average Average Average Average
millions) Balance Interest Rate Balance Interest Rate
Commercial loans (1)(2) $29,230 $786 5.41% $28,042 $1,016 7.31%
Real estate construction
loans 4,827 130 5.40 4,376 186 8.55
Commercial mortgage
loans 10,258 300 5.88 9,654 353 7.37
Residential mortgage
loans 1,911 58 6.02 1,748 54 6.13
Consumer loans 2,499 69 5.53 2,368 84 7.15
Lease financing (3) 1,349 (8) N/M 1,280 21 3.26
International loans 2,036 55 5.42 1,879 66 7.12
Business loan swap
income (expense) - 15 - - (45) -
Total loans (2) 52,110 1,405 5.42 49,347 1,735 7.08
Investment securities
available-for-sale 7,759 189 4.91 3,916 88 4.40
Federal funds sold and
securities purchased
under agreements to
resell 115 1 2.56 235 6 5.38
Other short-term
investments 319 7 4.08 231 7 6.00
Total earning assets 60,303 1,602 5.34 53,729 1,836 6.87
Cash and due from banks 1,229 1,410
Allowance for loan losses (630) (509)
Accrued income and other
assets 4,043 2,976
Total assets $64,945 $57,606
Money market and NOW
deposits (1) $15,063 125 1.67 $14,788 225 3.06
Savings deposits 1,382 4 0.54 1,400 6 0.88
Customer certificates
of deposit 8,161 148 3.64 7,404 163 4.45
Institutional certificates
of deposit 7,482 139 3.73 5,652 152 5.43
Foreign office time
deposits 1,190 19 3.29 988 24 4.90
Total interest-bearing
deposits 33,278 435 2.63 30,232 570 3.80
Short-term borrowings 3,411 48 2.82 1,736 46 5.31
Medium- and long-term
debt 10,949 199 3.66 7,364 207 5.68
Total interest-bearing
sources 47,638 682 2.88 39,332 823 4.22
Noninterest-bearing
deposits (1) 10,635 11,897
Accrued expenses and
other liabilities 1,479 1,287
Shareholders' equity 5,193 5,090
Total liabilities and
shareholders' equity $64,945 $57,606
Net interest income/rate
spread (FTE) $920 2.46 $1,013 2.65
FTE adjustment $2 $2
Impact of net
noninterest-bearing
sources of funds 0.61 1.14
Net interest margin (as
a percentage of average
earning assets)
(FTE) (2) (3) 3.07% 3.79%
N/M - Not meaningful
(1) FSD balances
included above:
Loans (primarily
low-rate) $635 $4 1.23% $1,575 $5 0.60%
Interest-bearing
deposits 1,044 12 2.31 1,238 24 3.90
Noninterest-bearing
deposits 1,858 3,363
(2) Impact of FSD loans
(primarily low-rate)
on the following:
Commercial loans (0.10)% (0.40)%
Total loans (0.05) (0.22)
Net interest margin
(FTE) (assuming loans
were funded by
noninterest-bearing
deposits) (0.02) (0.11)
(3) 2008 net interest
income declined $30
million and the net
interest margin declined
by 10 basis points due
to a tax-related non-cash
lease income charge.
Excluding this charge,
the net interest margin
would have been 3.17%.
ANALYSIS OF NET INTEREST INCOME (FTE)
Comerica Incorporated and Subsidiaries
Three Months Ended
June 30, 2008 March 31, 2008
(dollar amounts in Average Average Average Average
millions) Balance Interest Rate Balance Interest Rate
Commercial loans (1) (2) $29,280 $357 4.90% $29,178 $429 5.93%
Real estate construction
loans 4,843 59 4.89 4,811 71 5.92
Commercial mortgage loans 10,374 141 5.47 10,142 159 6.29
Residential mortgage loans 1,906 29 6.03 1,916 29 6.01
Consumer loans 2,549 32 5.06 2,449 37 6.02
Lease financing (3) 1,352 (19) N/M 1,347 11 3.22
International loans 2,063 25 4.86 2,009 30 6.01
Business loan swap income
(expense) - 10 - - 5 -
Total loans (2) 52,367 634 4.87 51,852 771 5.98
Investment securities
available-for-sale 8,296 101 4.89 7,222 88 4.93
Federal funds sold and
securities purchased
under agreements to resell 150 1 2.17 80 1 3.28
Other short-term
investments 275 2 3.73 364 4 4.34
Total earning assets 61,088 738 4.86 59,518 864 5.84
Cash and due from banks 1,217 1,240
Allowance for loan losses (664) (596)
Accrued income and other
assets 4,322 3,765
Total assets $65,963 $63,927
Money market and NOW
deposits (1) $14,784 46 1.26 $15,341 79 2.06
Savings deposits 1,405 2 0.45 1,359 2 0.64
Customer certificates of
deposit 8,037 64 3.20 8,286 84 4.07
Institutional certificates
of deposit 7,707 61 3.21 7,257 77 4.28
Foreign office time
deposits 1,183 8 2.77 1,197 11 3.81
Total interest-
bearing deposits 33,116 181 2.20 33,440 253 3.05
Short-term borrowings 3,326 19 2.33 3,497 29 3.28
Medium- and long-term debt 12,041 95 3.15 9,856 105 4.27
Total interest-
bearing sources 48,483 295 2.45 46,793 387 3.32
Noninterest-bearing
deposits (1) 10,648 10,622
Accrued expenses and other
liabilities 1,639 1,320
Shareholders' equity 5,193 5,192
Total liabilities and
shareholders' equity $65,963 $63,927
Net interest income/rate
spread (FTE) $443 2.41 $477 2.52
FTE adjustment $1 $1
Impact of net noninterest-
bearing
sources of funds 0.50 0.70
Net interest margin (as a
percentage
of average earning
assets) (FTE) (2) (3) 2.91% 3.22%
N/M - Not meaningful
(1) FSD balances included
above:
Loans (primarily low-
rate) $469 $2 1.42% $802 $2 1.12%
Interest-bearing
deposits 994 4 1.81 1,094 8 2.77
Noninterest-bearing
deposits 1,823 1,894
(2) Impact of FSD loans
(primarily low-rate) on
the following:
Commercial loans (0.06)% (0.13)%
Total loans (0.03) (0.08)
Net interest margin
(FTE) (assuming
loans were funded by
noninterest-bearing
deposits) (0.01) (0.03)
(3) Second quarter 2008 net
interest income declined $30
million and the net interest
margin declined by 19 basis
points due to a tax-related
non-cash lease income charge.
Excluding this charge, the
net interest margin would have
been 3.10%.
Three Months Ended
June 30, 2007
Average Average
(dollar amounts in millions) Balance Interest Rate
Commercial loans (1) (2) $28,324 $517 7.31 %
Real estate construction loans 4,501 95 8.45
Commercial mortgage loans 9,634 178 7.39
Residential mortgage loans 1,791 28 6.15
Consumer loans 2,331 41 7.15
Lease financing (3) 1,287 11 3.33
International loans 1,925 34 7.17
Business loan swap income (expense) - (21) -
Total loans (2) 49,793 883 7.11
Investment securities available-for-
sale 4,085 46 4.46
Federal funds sold and securities
purchased under agreements to resell 195 2 5.37
Other short-term investments 231 3 5.21
Total earning assets 54,304 934 6.89
Cash and due from banks 1,341
Allowance for loan losses (516)
Accrued income and other assets 2,989
Total assets $58,118
Money market and NOW deposits (1) $14,825 114 3.08
Savings deposits 1,419 3 0.91
Customer certificates of deposit 7,463 83 4.46
Institutional certificates of deposit 5,484 74 5.43
Foreign office time deposits 858 10 4.81
Total interest-bearing deposits 30,049 284 3.80
Short-term borrowings 1,816 24 5.30
Medium- and long-term debt 8,292 116 5.63
Total interest-bearing sources 40,157 424 4.24
Noninterest-bearing deposits (1) 11,633
Accrued expenses and other liabilities 1,240
Shareholders' equity 5,088
Total liabilities and shareholders'
equity $58,118
Net interest income/rate spread (FTE) $510 2.65
FTE adjustment $1
Impact of net noninterest-bearing
sources of funds 1.11
Net interest margin (as a percentage
of average earning assets) (FTE)
(2) (3) 3.76%
N/M - Not meaningful
(1) FSD balances included above:
Loans (primarily low-rate) $1,580 $2 0.52%
Interest-bearing deposits 1,228 12 3.88
Noninterest-bearing deposits 3,277
(2) Impact of FSD loans (primarily
low-rate) on the following:
Commercial loans (0.40)%
Total loans (0.21)
Net interest margin (FTE)
(assuming loans were funded
by noninterest-bearing deposits) (0.10)
(3) Second quarter 2008 net interest
income declined $30 million and the
net interest margin declined by 19
basis points due to a tax-related
non-cash lease income charge.
Excluding this charge, the net
interest margin would have been 3.10%.
CONSOLIDATED STATISTICAL DATA
Comerica Incorporated and Subsidiaries
(in millions, except June 30, March 31, Dec. 31, Sept. 30, June 30,
per share data) 2008 2008 2007 2007 2007
Commercial loans:
Floor plan $2,645 $2,913 $2,878 $2,601 $3,012
Other 26,118 26,562 25,345 24,791 24,134
Total commercial
loans 28,763 29,475 28,223 27,392 27,146
Real estate
construction loans:
Commercial Real Estate
business line 4,013 3,990 4,089 4,007 3,777
Other business lines 671 656 727 752 736
Total real estate
construction loans 4,684 4,646 4,816 4,759 4,513
Commercial mortgage
loans:
Commercial Real Estate
business line 1,620 1,541 1,377 1,467 1,344
Other business lines 8,884 8,941 8,671 8,527 8,384
Total commercial
mortgage loans 10,504 10,482 10,048 9,994 9,728
Residential mortgage
loans 1,879 1,926 1,915 1,892 1,839
Consumer loans:
Home equity 1,649 1,619 1,616 1,582 1,585
Other consumer 945 829 848 815 736
Total consumer loans 2,594 2,448 2,464 2,397 2,321
Lease financing 1,351 1,341 1,351 1,319 1,314
International loans 1,976 2,034 1,926 1,843 1,904
Total loans $51,751 $52,352 $50,743 $49,596 $48,765
Goodwill $150 $150 $150 $150 $150
Loan servicing rights 12 12 12 13 13
Tier 1 common capital
ratio* 6.72% 6.75% 6.85% 7.01% 7.18%
Tier 1 risk-based
capital ratio* 7.36 7.40 7.51 7.68 7.87
Total risk-based
capital ratio * 11.11 11.06 11.20 11.44 11.71
Leverage ratio* 8.55 8.82 9.26 9.60 9.68
Book value per share $33.78 $34.93 $34.12 $33.56 $32.74
Market value per share
for the quarter:
High 40.62 45.19 54.88 61.34 63.89
Low 25.61 34.51 39.62 50.26 58.18
Close 25.63 35.08 43.53 51.28 59.47
Quarterly ratios:
Return on average
common shareholders'
equity from
continuing operations 4.26% 8.51% 9.20% 14.27% 15.44%
Return on average
common shareholders'
equity 4.25 8.42 9.35 14.41 15.44
Return on average
assets from
continuing operations 0.34 0.69 0.77 1.22 1.35
Return on average
assets 0.33 0.68 0.79 1.23 1.35
Efficiency ratio 63.02 58.25 62.76 58.00 55.97
Number of banking centers 416 420 417 403 402
Number of employees -
full time equivalent 10,530 10,643 10,782 10,683 10,687
* June 30, 2008 ratios are estimated
PARENT COMPANY ONLY BALANCE SHEETS
Comerica Incorporated
(in millions, except June 30, Dec. 31, June 30,
share data) 2008 2007 2007
ASSETS
Cash and due from subsidiary bank $4 $1 $9
Short-term investments with subsidiary bank 179 224 353
Other short-term investments 105 102 103
Investment in subsidiaries, principally banks 5,818 5,840 5,617
Premises and equipment 4 4 3
Other assets 169 166 147
Total assets $6,279 $6,337 $6,232
LIABILITIES AND SHAREHOLDERS' EQUITY
Medium- and long-term debt $967 $968 $946
Other liabilities 230 252 277
Total liabilities 1,197 1,220 1,223
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 178,735,252 shares at
6/30/08, 12/31/07, and 6/30/07 894 894 894
Capital surplus 576 564 539
Accumulated other comprehensive loss (207) (177) (308)
Retained earnings 5,451 5,497 5,391
Less cost of common stock in treasury -
28,281,490 shares at 6/30/08, 28,747,097
shares at 12/31/07 and 25,725,671 shares
at 6/30/07 (1,632) (1,661) (1,507)
Total shareholders' equity 5,082 5,117 5,009
Total liabilities and shareholders'
equity $6,279 $6,337 $6,232
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Comerica Incorporated and Subsidiaries
Accumulated
Common Stock Other Total
Compre- Treas- Share-
(in millions, except In Capital hensive Retained ury holders'
per share data) Shares Amount Surplus Loss Earnings Stock Equity
BALANCE AT JANUARY 1,
2007 157.6 $894 $520 $(324) $5,230 $(1,219) $5,101
Net income - - - - 386 - 386
Other comprehensive
income, net of tax - - - 16 - - 16
Total comprehensive
income 402
Cash dividends declared
on common stock ($1.28
per share) - - - - (199) - (199)
Purchase of common
stock (6.9) - - - - (425) (425)
Net issuance of common
stock under employee
stock plans 2.3 - (17) - (26) 138 95
Recognition of share-
based compensation
expense - - 35 - - - 35
Employee deferred
compensation
obligations - - 1 - - (1) -
BALANCE AT JUNE 30,
2007 153.0 $894 $539 $(308) $5,391 $(1,507) $5,009
BALANCE AT JANUARY 1,
2008 150.0 $894 $564 $(177) $5,497 $(1,661) $5,117
Net income - - - - 165 - 165
Other comprehensive
income, net of tax - - - (30) - - (30)
Total comprehensive
income - - - - - - 135
Cash dividends declared
on common stock ($1.32
per share) - - - - (199) - (199)
Net issuance of common
stock under employee
stock plans 0.5 - (19) - (12) 29 (2)
Recognition of share-
based compensation
expense - - 31 - - - 31
BALANCE AT JUNE 30,
2008 150.5 $894 $576 $(207) $5,451 $(1,632) $5,082
BUSINESS SEGMENT FINANCIAL RESULTS
Comerica Incorporated and Subsidiaries
Wealth &
(dollar amounts in millions) Business Retail Institutional
Three Months Ended June 30, 2008 Bank Bank Management
Earnings summary:
Net interest income (expense) (FTE) $296 $146 $37
Provision for loan losses 123 29 5
Noninterest income 92 54 74
Noninterest expenses 185 161 83
Provision (benefit) for income taxes
(FTE) 23 3 9
Loss from discontinued operations,
net of tax - - -
Net income (loss) $57 $7 $14
Net credit-related charge-offs $96 $14 $3
Selected average balances:
Assets $42,335 $7,100 $4,646
Loans 41,510 6,348 4,502
Deposits 15,384 17,043 2,493
Liabilities 16,156 17,041 2,501
Attributed equity 3,277 657 333
Statistical data:
Return on average assets (1) 0.53 % 0.15 % 1.19 %
Return on average attributed equity 6.86 4.13 16.57
Net interest margin (2) 2.85 3.44 3.28
Efficiency ratio 49.26 80.61 75.20
Three Months Ended June 30, 2008 Finance Other Total
Earnings summary:
Net interest income (expense) (FTE) $(28) $(8) $443
Provision for loan losses - 13 170
Noninterest income 18 4 242
Noninterest expenses 2 (8) 423
Provision (benefit) for income taxes
(FTE) (7) 8 36
Loss from discontinued operations,
net of tax - - -
Net income (loss) $(5) $(17) $56
Net credit-related charge-offs $- $- $113
Selected average balances:
Assets $10,333 $1,549 $65,963
Loans 5 2 52,367
Deposits 8,409 435 43,764
Liabilities 24,334 738 60,770
Attributed equity 949 (23) 5,193
Statistical data:
Return on average assets (1) N/M N/M 0.33 %
Return on average attributed equity N/M N/M 4.25
Net interest margin (2) N/M N/M 2.91
Efficiency ratio N/M N/M 63.02
Wealth &
Business Retail Institutional
Three Months Ended March 31, 2008 Bank Bank Management
Earnings summary:
Net interest income (expense) (FTE) $329 $148 $36
Provision for loan losses 147 17 -
Noninterest income 74 74 75
Noninterest expenses 176 143 79
Provision (benefit) for income taxes
(FTE) 18 22 12
Income from discontinued operations,
net of tax - - -
Net income (loss) $62 $40 $20
Net credit-related charge-offs $99 $10 $1
Selected average balances:
Assets $42,129 $7,144 $4,468
Loans 41,219 6,276 4,315
Deposits 15,878 17,162 2,637
Liabilities 16,687 17,170 2,646
Attributed equity 3,168 725 331
Statistical data:
Return on average assets (1) 0.59 % 0.89 % 1.79 %
Return on average attributed equity 7.83 22.00 24.10
Net interest margin (2) 3.20 3.47 3.33
Efficiency ratio 44.05 70.99 70.95
Three Months Ended March 31, 2008 Finance Other Total
Earnings summary:
Net interest income (expense) (FTE) $(26) $(10) $477
Provision for loan losses - (5) 159
Noninterest income 18 (4) 237
Noninterest expenses 3 2 403
Provision (benefit) for income taxes
(FTE) (8) (2) 42
Income from discontinued operations,
net of tax - (1) (1)
Net income (loss) $(3) $(10) $109
Net credit-related charge-offs $- $- $110
Selected average balances:
Assets $8,644 $1,542 $63,927
Loans 5 37 51,852
Deposits 8,142 243 44,062
Liabilities 21,636 596 58,735
Attributed equity 902 66 5,192
Statistical data:
Return on average assets (1) N/M N/M 0.68 %
Return on average attributed equity N/M N/M 8.42
Net interest margin (2) N/M N/M 3.22
Efficiency ratio N/M N/M 58.25
Wealth &
Business Retail Institutional
Three Months Ended June 30, 2007 Bank Bank Management
Earnings summary:
Net interest income (expense) (FTE) $344 $171 $36
Provision for loan losses 32 4 2
Noninterest income 68 57 70
Noninterest expenses 176 160 79
Provision (benefit) for income taxes
(FTE) 64 22 9
Income from discontinued operations,
net of tax - - -
Net income (loss) $140 $42 $16
Net credit-related charge-offs $24 $6 $-
Selected average balances:
Assets $40,847 $6,828 $4,009
Loans 39,824 6,100 3,860
Deposits 16,432 17,191 2,295
Liabilities 17,262 17,204 2,303
Attributed equity 2,914 846 325
Statistical data:
Return on average assets (1) 1.37 % 0.94 % 1.59 %
Return on average attributed equity 19.23 20.09 19.65
Net interest margin (2) 3.45 4.00 3.74
Efficiency ratio 42.80 69.93 74.65
Three Months Ended June 30, 2007 Finance Other Total
Earnings summary:
Net interest income (expense) (FTE) $(35) $(6) $510
Provision for loan losses - (2) 36
Noninterest income 16 14 225
Noninterest expenses 3 (7) 411
Provision (benefit) for income taxes
(FTE) (11) 8 92
Income from discontinued operations,
net of tax - - -
Net income (loss) $(11) $9 $196
Net credit-related charge-offs $- $- $30
Selected average balances:
Assets $5,297 $1,137 $58,118
Loans 2 7 49,793
Deposits 5,840 (76) 41,682
Liabilities 16,033 228 53,030
Attributed equity 595 408 5,088
Statistical data:
Return on average assets (1) N/M N/M 1.35 %
Return on average attributed equity N/M N/M 15.44
Net interest margin (2) N/M N/M 3.76
Efficiency ratio N/M N/M 55.97
(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)
Three Months Ended June 30, 2008 Midwest Western Texas Florida
Earnings summary:
Net interest income (expense) (FTE) $172 $171 $74 $12
Provision for loan losses 24 113 6 7
Noninterest income 136 34 22 4
Noninterest expenses 205 115 63 11
Provision (benefit) for income taxes
(FTE) 27 (3) 10 (1)
Income from discontinued operations,
net of tax - - - -
Net income (loss) $52 $(20) $17 $(1)
Net credit-related charge-offs $42 $59 $3 $8
Selected average balances:
Assets $19,891 $17,241 $8,063 $1,854
Loans 19,255 16,918 7,795 1,851
Deposits 16,056 12,345 4,061 306
Liabilities 16,750 12,326 4,076 302
Attributed equity 1,649 1,336 614 118
Statistical data:
Return on average assets (1) 1.05 % (0.46)% 0.81 % (0.37)%
Return on average attributed equity 12.67 (5.97) 10.66 (5.84)
Net interest margin (2) 3.58 4.04 3.78 2.50
Efficiency ratio 69.48 56.09 65.55 72.21
Finance
Other Inter- & Other
Three Months Ended June 30, 2008 Markets national Businesses Total
Earnings summary:
Net interest income (expense) (FTE) $36 $14 $(36) $443
Provision for loan losses 7 - 13 170
Noninterest income 16 8 22 242
Noninterest expenses 25 10 (6) 423
Provision (benefit) for income taxes
(FTE) (3) 5 1 36
Income from discontinued operations,
net of tax - - - -
Net income (loss) $23 $7 $(22) $56
Net credit-related charge-offs $1 $- $- $113
Selected average balances:
Assets $4,589 $2,443 $11,882 $65,963
Loans 4,212 2,329 7 52,367
Deposits 1,375 777 8,844 43,764
Liabilities 1,466 778 25,072 60,770
Attributed equity 389 161 926 5,193
Statistical data:
Return on average assets (1) 1.96 % 1.21 % N/M 0.33 %
Return on average attributed equity 23.17 18.31 N/M 4.25
Net interest margin (2) 3.41 2.42 N/M 2.91
Efficiency ratio 48.61 45.61 N/M 63.02
Three Months Ended March 31, 2008 Midwest Western Texas Florida
Earnings summary:
Net interest income (expense) (FTE) $205 $172 $74 $11
Provision for loan losses 20 114 8 12
Noninterest income 136 33 24 5
Noninterest expenses 186 108 58 10
Provision (benefit) for income taxes
(FTE) 48 (7) 12 (2)
Income from discontinued operations,
net of tax - - - -
Net income (loss) $87 $(10) $20 $(4)
Net credit-related charge-offs $28 $66 $5 $10
Selected average balances:
Assets $19,656 $17,263 $7,932 $1,891
Loans 19,030 16,882 7,642 1,877
Deposits 16,127 12,848 4,005 362
Liabilities 16,814 12,849 4,022 358
Attributed equity 1,663 1,270 619 125
Statistical data:
Return on average assets (1) 1.76 % (0.23)% 1.00 % (0.76)%
Return on average attributed equity 20.83 (3.19) 12.88 (11.57)
Net interest margin (2) 4.30 4.07 3.83 2.55
Efficiency ratio 57.48 52.99 61.28 61.24
Finance
Other Inter- & Other
Three Months Ended March 31, 2008 Markets national Businesses Total
Earnings summary:
Net interest income (expense) (FTE) $36 $15 $(36) $477
Provision for loan losses 13 (3) (5) 159
Noninterest income 17 8 14 237
Noninterest expenses 26 10 5 403
Provision (benefit) for income taxes
(FTE) (5) 6 (10) 42
Income from discontinued operations,
net of tax - - (1) (1)
Net income (loss) $19 $10 $(13) $109
Net credit-related charge-offs $- $1 $- $110
Selected average balances:
Assets $4,633 $2,366 $10,186 $63,927
Loans 4,140 2,239 42 51,852
Deposits 1,534 801 8,385 44,062
Liabilities 1,643 817 22,232 58,735
Attributed equity 384 163 968 5,192
Statistical data:
Return on average assets (1) 1.61 % 1.76 % N/M 0.68 %
Return on average attributed equity 19.47 25.50 N/M 8.42
Net interest margin (2) 3.42 2.69 N/M 3.22
Efficiency ratio 50.41 44.09 N/M 58.25
Three Months Ended June 30, 2007 Midwest Western Texas Florida
Earnings summary:
Net interest income (expense) (FTE) $227 $188 $71 $11
Provision for loan losses 25 5 3 2
Noninterest income 117 32 20 3
Noninterest expenses 203 113 56 9
Provision (benefit) for income taxes
(FTE) 40 38 11 1
Income from discontinued operations,
net of tax - - - -
Net income (loss) $76 $64 $21 $2
Net credit-related charge-offs
(recoveries) $29 $4 $1 $1
Selected average balances:
Assets $19,213 $17,257 $6,844 $1,666
Loans 18,656 16,715 6,570 1,649
Deposits 15,651 13,595 3,836 290
Liabilities 16,309 13,633 3,852 293
Attributed equity 1,713 1,206 594 90
Statistical data:
Return on average assets (1) 1.58 % 1.51 % 1.20 % 0.50 %
Return on average attributed equity 17.78 21.59 13.87 9.33
Net interest margin (2) 4.85 4.53 4.32 2.64
Efficiency ratio 59.08 51.14 61.92 63.90
Finance
Other Inter- & Other
Three Months Ended June 30, 2007 Markets national Businesses Total
Earnings summary:
Net interest income (expense) (FTE) $35 $19 $(41) $510
Provision for loan losses 9 (6) (2) 36
Noninterest income 14 9 30 225
Noninterest expenses 23 11 (4) 411
Provision (benefit) for income taxes
(FTE) (3) 8 (3) 92
Income from discontinued operations,
net of tax - - - -
Net income (loss) $20 $15 $(2) $196
Net credit-related charge-offs
(recoveries) $- $(5) $- $30
Selected average balances:
Assets $4,430 $2,274 $6,434 $58,118
Loans 4,049 2,145 9 49,793
Deposits 1,299 1,247 5,764 41,682
Liabilities 1,416 1,266 16,261 53,030
Attributed equity 327 155 1,003 5,088
Statistical data:
Return on average assets (1) 1.79 % 2.61 % N/M 1.35 %
Return on average attributed equity 24.18 38.38 N/M 15.44
Net interest margin (2) 3.48 3.35 N/M 3.76
Efficiency ratio 46.16 40.12 N/M 55.97
(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
