FULL-YEAR 2022 NET INCOME OF $1.2 BILLION, $8.47 PER SHARE
FOURTH QUARTER 2022 NET INCOME OF $350 MILLION, $2.58 PER SHARE
Record Revenue, Robust Loan Growth and Excellent Credit Quality
Maintained Expense Discipline while Supporting Growth Initiatives
"Today we reported record annual earnings per share of $8.47,” said Curtis C. Farmer, Comerica Chairman and Chief Executive Officer. “We generated 8% growth in average loans, excluding PPP loan activity (3% growth with PPP), our highest rate of organic growth in well over a decade, as we expanded relationships and won new customers. Our revenue increased 19% to $3.5 billion, supporting strategic investments in our business while lowering our efficiency ratio to 56%. Credit quality remained excellent. In summary, a successful performance resulting in our ROE increasing to 18.6% and ROA to 1.3%.
"We ended the year strong with fourth quarter net income of $350 million or $2.58 per share. Average loans grew $1.3 billion, or over 2%, and we modestly increased reserves consistent with loan growth and the softening economic outlook. Average deposits decreased; however, we began to see positive trends resulting from pricing actions. Expenses reflected investments in our business that support our revenue-generating activities, and credit quality remained exceptional.
"Moving into 2023, we feel well-positioned to continue to deliver superior financial results with our strong business and geographic profile, loan momentum, reduced interest rate exposure and proven credit discipline. Delivering positive operating leverage remains a priority while we strategically invest to drive growth. Our customers and colleagues have proven their agility, and we remain committed to their success regardless of the economic environment.”
(dollar amounts in millions, except per share data)
4th Qtr '22
3rd Qtr '22
2022
2021
FINANCIAL RESULTS
Net interest income
$
742
$
707
$
2,466
$
1,844
Provision for credit losses
33
28
60
(384)
Noninterest income
278
278
1,068
1,123
Noninterest expenses
541
502
1,998
1,861
Pre-tax income
446
455
1,476
1,490
Provision for income taxes
96
104
325
322
Net income
$
350
$
351
$
1,151
$
1,168
Diluted earnings per common share
$
2.58
$
2.60
$
8.47
$
8.35
Average loans
52,375
51,113
50,460
49,083
Average deposits
71,355
73,976
75,481
77,681
Return on average assets
1.65
%
1.63
%
1.32
%
1.30
%
Return on average common shareholders' equity
27.92
23.28
18.63
15.15
Net interest margin
3.74
3.50
3.02
2.21
Efficiency ratio (a)
53.00
50.75
56.32
62.42
Common equity Tier 1 capital ratio (b)
10.02
9.93
10.02
10.13
Tier 1 capital ratio (b)
10.52
10.45
10.52
10.70
(a)Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding a derivative contract tied to the conversion rate of Visa Class B shares and changes in the value of shares obtained through monetization of warrants.
(b)December 31, 2022 ratios are estimated.
Fourth Quarter 2022 Compared to Third Quarter 2022 Overview
Balance sheet items discussed in terms of average balances unless otherwise noted.
Loans increased $1.3 billion to $52.4 billion.
•Increases of $879 million in Commercial Real Estate, $331 million in National Dealer Services, $193 million in Corporate Banking, $131 million in Wealth Management and $119 million in Entertainment Lending, partially offset by a decrease of $329 million in Mortgage Banker Finance.
•Average yield on loans (including swaps) increased 81 basis points to 5.45%, primarily driven by higher short-term rates.
Securities decreased $1.4 billion to $19.1 billion.
•Decrease driven by the full quarter impact of market valuation adjustments to the mortgage-backed securities portfolio made in the third quarter.
•Period-end unrealized losses on securities, included in accumulated other comprehensive loss, decreased $73 million to $3.0 billion.
•Average yield on securities increased 3 basis points to 2.11% as lower-yielding securities were paid down.
Deposits decreased $2.6 billion to $71.4 billion.
•Noninterest-bearing and interest-bearing deposits decreased $1.9 billion and $756 million, respectively, due to strategic deposit management as well as customers utilizing balances to fund business activities.
•The average cost of interest-bearing deposits increased 77 basis points to 97 basis points, reflecting relationship-focused pricing in a rising-rate environment.
Net interest income increased $35 million to $742 million.
•Driven by the benefit of higher short-term rates and loan growth, partially offset by lower deposits held with the Federal Reserve Bank as well as higher short-term borrowings.
•Net interest margin increased 24 basis points to 3.74%, driven by higher rates.
Provision for credit losses increased $5 million to $33 million.
•The allowance for credit losses increased $37 million to $661 million at December 31, 2022, reflecting loan growth and continued strong credit metrics as well as a modest deterioration in economic forecasts. As a percentage of total loans, the allowance for credit losses was 1.24%, an increase of 3 basis points.
Noninterest income of $278 million was stable.
•Increases of $9 million in deferred compensation asset returns (offset in noninterest expenses) and $8 million in risk management hedging income were more than offset by decreases of $12 million in derivative income (energy and interest rate), $3 million in service charges on deposit accounts and $3 million in fiduciary income. The increase in risk management hedging income (included in other noninterest income) related to an increase in price alignment (PA) income received for centrally cleared risk management positions.
Noninterest expenses increased $39 million to $541 million.
•Increases of $13 million in other noninterest expenses, $11 million in salaries and benefits expense, $9 million in occupancy expense and $5 million in advertising expense.
◦Other noninterest expenses included increases of $5 million in consulting fees and $3 million each in legal fees and travel and entertainment expense.
◦Salaries and benefits expense included increases of $9 million in deferred compensation expense (offset in other noninterest income), $8 million in severance related to modernization initiatives as well as $4 million in merit increases and staff additions, partially offset by decreases of $7 million in performance-based compensation and $4 million in contract labor.
◦Expenses for certain modernization initiatives increased $11 million to $18 million. These initiatives related to transformation of the retail banking delivery model, alignment of corporate facilities and optimization of technology platforms, comprised of transitional real estate costs (reported in occupancy expense), severance and contract labor (reported in salaries and benefits expense) and asset impairments (reported in other noninterest expenses).
Common equity Tier 1 capital ratio of 10.02% and a Tier 1 capital ratio of 10.52%.
•Declared dividends of $89 million on common stock and $6 million on preferred stock.
2
Full-Year 2022 Compared to Full-Year 2021 Overview
Balance sheet items discussed in terms of average balances unless otherwise noted.
Loans increased $1.4 billion, or 3%, to $50.5 billion.
•Excluding the impact of a $2.2 billion decline in PPP loans, loans increased $3.6 billion, or 8%.
•Increases of $1.1 billion in Corporate Banking, $749 million in general Middle Market, $564 million in Equity Fund Services, $408 million in Environmental Services, $284 million in National Dealer Services, $161 million in Commercial Real Estate and $158 million in Entertainment Lending, partially offset by decreases of $1.3 billion in Mortgage Banker Finance, $476 million in Business Banking and $319 million in Retail Banking.
•Average yield on loans increased 102 basis points to 4.27%, primarily driven by the increase in short-term rates and higher loan balances, partially offset by the net impact of PPP loans.
Securities increased $3.3 billion, or 21%, to $19.0 billion.
•Reflects investment of a portion of excess liquidity into mortgage-backed securities, partly offset by maturities of Treasury securities.
•Period-end unrealized losses on securities, included in accumulated other comprehensive loss, was $3.0 billion, compared to $130 million at the end of the previous year.
•Average yield on securities increased 18 basis points to 1.97% from higher yields on purchases and reinvestments.
Deposits decreased $2.2 billion, or 3%, to $75.5 billion.
•Interest-bearing deposits decreased $2.8 billion due to strategic deposit management and customers utilizing balances to fund business activities, partially offset by a $577 million increase in noninterest-bearing deposits.
•The average cost of interest-bearing deposits increased 24 basis points to 30 basis points, reflecting relationship-focused pricing in a rising-rate environment.
Net interest income increased $622 million to $2.5 billion.
•Higher short-term rates and growth in loans and securities balances, partly offset the net impact of PPP loans.
•Net interest margin increased 81 basis points to 3.02%, driven by higher rates and a decrease in lower-yielding deposits held with the Federal Reserve Bank.
Provision for credit losses increased to an expense of $60 million from a benefit of $384 million.
•The allowance for credit losses increased $43 million, reflecting loan growth and continued strong credit metrics as well as a modest deterioration in economic forecasts. As a percentage of total loans, the allowance for credit losses decreased 2 basis points.
•Net loan charge-offs were $17 million, or 0.03% of average loans, compared to net recoveries of $10 million during 2021.
Noninterest income decreased $55 million to $1.1 billion.
•Decreases of $56 million in other noninterest income and $25 million in card fees, partially offset by increases of $10 million in derivative income, $7 million in brokerage fees and $5 million in commercial lending fees.
◦Other noninterest income included decreases of $32 million in deferred compensation asset returns (offset in noninterest expenses), $30 million in warrant-related income and $7 million in investment banking fees, partially offset by an $8 million increase in risk management hedging income related to an increase in PA income received for centrally cleared risk management positions.
Noninterest expenses increased $137 million to $2.0 billion, which included $38 million in expenses for certain modernization initiatives detailed above.
•Increases of $75 million in salaries and benefits expense, $23 million in operational losses, $14 million in occupancy expense, $10 million in travel and entertainment expense, $9 million each in FDIC insurance expense and consulting fees, as well as smaller increases in other categories, partially offset by decreases of $15 million in outside processing fee expense, $8 million in non-salary pension expense and $7 million in legal-related expenses.
◦The increase in salaries and benefits expense included increases of $28 million from annual merit increases, $24 million in performance-based compensation, $18 million in stock-based compensation, $16 million in contract labor and $11 million in severance, partially offset by a decrease of $32 million in deferred compensation expense (offset in other noninterest income).
Returned a total of $391 million to common shareholders.
•Declared dividends of $356 million on common stock and $23 million on preferred stock.
3
Net Interest Income
Balance sheet items presented and discussed in terms of average balances.
(dollar amounts in millions)
4th Qtr '22
3rd Qtr '22
2022
2021
Net interest income
$
742
$
707
$
2,466
$
1,844
Net interest margin
3.74
%
3.50
%
3.02
%
2.21
%
Selected balances:
Total earning assets
$
75,538
$
77,012
$
79,025
$
83,719
Total loans
52,375
51,113
50,460
49,083
Total investment securities
19,129
20,540
19,015
15,724
Federal Reserve Bank deposits
3,693
4,967
9,036
18,347
Total deposits
71,355
73,976
75,481
77,681
Total noninterest-bearing deposits
39,955
41,820
42,018
41,441
Short-term borrowings
1,583
144
436
2
Medium- and long-term debt
3,020
2,827
2,818
3,035
Net interest income increased $35 million, and net interest margin increased 24 basis points compared to third quarter 2022. Amounts shown in parenthesis represent the impacts to net interest income and net interest margin, respectively.
•Interest income on loans increased $122 million and improved net interest margin by 56 basis points, driven by higher short-term rates (+$102 million, +52 basis points), higher loan balances (+$19 million, +3 basis points) and other portfolio dynamics (+$1 million, +1 basis point).
•Interest income on investment securities decreased $1 million and improved net interest margin by 2 basis points due to ordinary shifts in the mix of the investment portfolio.
•Interest income on short-term investments increased $5 million and improved net interest margin by 11 basis points, reflecting higher short-term rates (+$24 million, +12 basis points), partially offset by a decrease of $1.3 billion in deposits with the Federal Reserve (-$19 million, -1 basis point).
•Interest expense on deposits increased $62 million and reduced net interest margin by 30 basis points, due to higher rates (-$63 million, -31 basis points), partially offset by lower average deposit balances (+$1 million, +1 basis point).
•Interest expense on debt increased $29 million and reduced net interest margin by 15 basis points, driven by higher rates (-$10 million, -5 basis points) and an increase in average debt, primarily from short-term borrowings (-$19 million,-10 basis points).
The net impact of higher rates to the fourth quarter 2022 net interest income was an increase of $53 million and 28 basis points to the net interest margin.
4
Credit Quality
"Credit quality remained excellent with $4 million in net recoveries in the fourth quarter and only 3 basis points in net charge-offs for the year," said Farmer. "Criticized (including nonaccrual) loans declined, remaining well below historical averages at 3% of total loans, and our coverage ratio increased. Customers continue to mitigate inflationary pressures where possible and remain optimistic about their ability to navigate the environment. A slightly more negative view of the economy increased our allowance for credit losses to 1.24% of total loans. With our relationship model and consistent approach to credit, we feel well-positioned to continue supporting our customers while maintaining a low risk profile."
(dollar amounts in millions)
4th Qtr '22
3rd Qtr '22
4th Qtr '21
Credit-related charge-offs
$
11
$
26
$
20
Recoveries
15
13
24
Net credit-related (recoveries) charge-offs
(4)
13
(4)
Net credit-related (recoveries) charge-offs/Average total loans
(0.03
%)
0.10
%
(0.03
%)
Provision for credit losses
$
33
$
28
$
(25)
Nonperforming loans
244
262
268
Nonperforming assets (NPAs)
244
262
269
NPAs/Total loans and foreclosed property
0.46
%
0.51
%
0.55
%
Loans past due 90 days or more and still accruing
$
23
$
72
$
27
Allowance for loan losses
610
576
588
Allowance for credit losses on lending-related commitments (a)
51
48
30
Total allowance for credit losses
661
624
618
Allowance for credit losses/Period-end total loans
1.24
%
1.21
%
1.26
%
Allowance for credit losses/Nonperforming loans
2.7x
2.4x
2.3x
(a) Included in accrued expenses and other liabilities on the Consolidated Balance Sheets.
•The allowance for credit losses increased $37 million to $661 million at December 31, 2022, or 1.24% of total loans, reflecting loan growth and continued strong credit metrics as well as a modest deterioration in economic forecasts.
•Criticized loans decreased $54 million to $1.6 billion, or 3% of total loans. Criticized loans are generally consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities.
◦The decrease in criticized loans was primarily driven by Corporate Banking, Environmental Services, Technology and Life Sciences as well as Energy, partially offset by increases in general Middle Market.
•Nonperforming assets decreased $18 million to $244 million, or 0.46% of total loans and foreclosed property, compared to 0.51% in third quarter 2022.
•Net recoveries totaled $4 million, compared to net charge-offs of $13 million in third quarter 2022.
5
Strategic Lines of Business
Comerica's operations are strategically aligned into three major business segments: the Commercial Bank, the Retail Bank and Wealth Management. The Finance Division is also reported as a segment. For a summary of business segment quarterly results, see the Business Segment Financial Results tables included later in this report. From time to time, Comerica may make reclassifications among the segments to reflect management's current view of the segments, and methodologies may be modified as the management accounting system is enhanced and changes occur in the organizational structure and/or product lines. The financial results provided are based on the internal business unit structures of Comerica and methodologies in effect at December 31, 2022. A discussion of business segment year-to-date results will be included in Comerica's December 31, 2022 Form 10-K.
Conference Call and Webcast
Comerica will host a conference call to review fourth quarter 2022 financial results at 7 a.m. CT Thursday, January 19, 2023. Interested parties may access the conference call by calling (877) 336-4440 or (409) 207-6984 (Event ID No. 4619582). The call and supplemental financial information, as well as a replay of the Webcast, can also be accessed via Comerica's "Investor Relations" page at www.comerica.com.
Comerica Incorporated is a financial services company headquartered in Dallas, Texas, and strategically aligned by three major business segments: the Commercial Bank, the Retail Bank and Wealth Management. Comerica focuses on relationships and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico.
This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Comerica's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as a reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
6
Forward-looking Statements
Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “believes,” “contemplates,” “feels,” “expects,” “estimates,” “seeks,” “strives,” “plans,” “intends,” “outlook,” “forecast,” “position,” “target,” “mission,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “opportunity,” “initiative,” “outcome,” “continue,” “remain,” “maintain,” “on track,” “trend,” “objective,” “looks forward,” “projects,” “models” and variations of such words and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, as they relate to Comerica or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of Comerica's management based on information known to Comerica's management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica's management for future or past operations, products or services, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries as well as 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 include credit risks (unfavorable developments concerning credit quality; declines or other changes in the businesses or industries of Comerica's customers; and changes in customer behavior); market risks (changes in monetary and fiscal policies; fluctuations in interest rates and their impact on deposit pricing; and transitions away from LIBOR towards new interest rate benchmarks); liquidity risks (Comerica's ability to maintain adequate sources of funding and liquidity; reductions in Comerica's credit rating; and the interdependence of financial service companies); technology risks (cybersecurity risks and heightened legislative and regulatory focus on cybersecurity and data privacy); operational risks (operational, systems or infrastructure failures; reliance on other companies to provide certain key components of business infrastructure; the impact of legal and regulatory proceedings or determinations; losses due to fraud; and controls and procedures failures); compliance risks (changes in regulation or oversight, or changes in Comerica’s status with respect to existing regulations or oversight; the effects of stringent capital requirements; and the impacts of future legislative, administrative or judicial changes to tax regulations); strategic risks (damage to Comerica's reputation; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; competitive product and pricing pressures among financial institutions within Comerica's markets; the implementation of Comerica's strategies and business initiatives; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; and any future strategic acquisitions or divestitures); and other general risks (impacts from the COVID-19 global pandemic; changes in general economic, political or industry conditions; the effectiveness of methods of reducing risk exposures; the effects of catastrophic events; changes in accounting standards and the critical nature of Comerica's accounting policies; and the volatility of Comerica’s stock price). Comerica cautions that the foregoing list of factors is not all-inclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to “Item 1A. Risk Factors” beginning on page 13 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2021. 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.
Media Contacts:
Investor Contacts:
Nicole Hogan
Kelly Gage
(214) 462-6657
(214) 462-6831
Louis H. Mora
Morgan Mathers
(214) 462-6669
(214) 462-6731
7
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
Years Ended
December 31,
September 30,
December 31,
December 31,
(in millions, except per share data)
2022
2022
2021
2022
2021
PER COMMON SHARE AND COMMON STOCK DATA
Diluted earnings per common share
$
2.58
$
2.60
$
1.66
$
8.47
$
8.35
Cash dividends declared
0.68
0.68
0.68
2.72
2.72
Average diluted shares (in thousands)
132,382
132,479
132,870
132,554
136,566
PERFORMANCE RATIOS
Return on average common shareholders' equity
27.92
%
23.28
%
11.88
%
18.63
%
15.15
%
Return on average assets
1.65
1.63
0.93
1.32
1.30
Efficiency ratio (a)
53.00
50.75
64.24
56.32
62.42
CAPITAL
Common equity tier 1 capital (b), (c)
$
7,884
$
7,616
$
7,064
Tier 1 capital (b), (c)
8,278
8,010
7,458
Risk-weighted assets (b)
78,682
76,661
69,708
Common equity tier 1 capital ratio (b), (c)
10.02
%
9.93
%
10.13
%
Tier 1 capital ratio (b), (c)
10.52
10.45
10.70
Total capital ratio (b)
12.48
12.41
12.35
Leverage ratio (b)
9.54
9.20
7.74
Common shareholders' equity per share of common stock
$
36.55
$
35.70
$
57.41
Tangible common equity per share of common stock (c)
31.62
30.77
52.46
Common equity ratio
5.60
%
5.55
%
7.93
%
Tangible common equity ratio (c)
4.89
4.82
7.30
AVERAGE BALANCES
Commercial loans
$
30,585
$
30,573
$
27,925
$
29,846
$
29,283
Real estate construction loans
2,978
2,457
2,968
2,607
3,609
Commercial mortgage loans
12,752
12,180
11,212
12,135
10,610
Lease financing
753
690
634
680
596
International loans
1,227
1,234
1,177
1,246
1,063
Residential mortgage loans
1,786
1,761
1,810
1,776
1,813
Consumer loans
2,294
2,218
2,099
2,170
2,109
Total loans
52,375
51,113
47,825
50,460
49,083
Earning assets
75,538
77,012
89,898
79,025
83,719
Total assets
83,808
85,422
96,692
87,272
90,152
Noninterest-bearing deposits
39,955
41,820
45,980
42,018
41,441
Interest-bearing deposits
31,400
32,156
38,557
33,463
36,240
Total deposits
71,355
73,976
84,537
75,481
77,681
Common shareholders' equity
4,887
5,897
7,408
6,057
7,559
Total shareholders' equity
5,281
6,291
7,802
6,451
7,953
NET INTEREST INCOME
Net interest income
$
742
$
707
$
461
$
2,466
$
1,844
Net interest margin
3.74
%
3.50
%
2.04
%
3.02
%
2.21
%
CREDIT QUALITY
Nonperforming assets
$
244
$
262
$
269
Loans past due 90 days or more and still accruing
23
72
27
Net credit-related charge-offs (recoveries)
(4)
13
(4)
$
17
$
(10)
Allowance for loan losses
610
576
588
Allowance for credit losses on lending-related commitments
51
48
30
Total allowance for credit losses
661
624
618
Allowance for credit losses as a percentage of total loans
1.24
%
1.21
%
1.26
%
Net loan (recoveries) charge-offs as a percentage of average total loans
(0.03)
0.10
(0.03)
0.03
%
(0.02
%)
Nonperforming assets as a percentage of total loans and foreclosed property
0.46
0.51
0.55
Allowance for credit losses as a multiple of total nonperforming loans
2.7x
2.4x
2.3x
OTHER KEY INFORMATION
Number of banking centers
410
410
433
Number of employees - full time equivalent
7,488
7,432
7,442
(a) Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding a derivative contract tied to the conversion rate of Visa Class B shares and changes in the value of shares obtained through monetization of warrants.
(b) December 31, 2022 ratios are estimated.
(c) See Reconciliations of Non-GAAP Financial Measures and Regulatory Ratios.
8
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
December 31,
September 30,
December 31,
(in millions, except share data)
2022
2022
2021
(unaudited)
(unaudited)
ASSETS
Cash and due from banks
$
1,758
$
1,735
$
1,236
Interest-bearing deposits with banks
4,524
4,235
21,443
Other short-term investments
157
159
197
Investment securities available-for-sale
19,012
19,452
16,986
Commercial loans
30,909
30,713
29,366
Real estate construction loans
3,105
2,617
2,948
Commercial mortgage loans
13,306
12,438
11,255
Lease financing
760
713
640
International loans
1,197
1,216
1,208
Residential mortgage loans
1,814
1,753
1,771
Consumer loans
2,311
2,262
2,097
Total loans
53,402
51,712
49,285
Allowance for loan losses
(610)
(576)
(588)
Net loans
52,792
51,136
48,697
Premises and equipment
400
412
454
Accrued income and other assets
6,763
7,014
5,603
Total assets
$
85,406
$
84,143
$
94,616
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits
$
39,945
$
42,296
$
45,800
Money market and interest-bearing checking deposits
26,290
25,663
31,349
Savings deposits
3,225
3,375
3,167
Customer certificates of deposit
1,762
1,661
1,973
Other time deposits
124
—
—
Foreign office time deposits
51
21
50
Total interest-bearing deposits
31,452
30,720
36,539
Total deposits
71,397
73,016
82,339
Short-term borrowings
3,211
508
—
Accrued expenses and other liabilities
2,593
2,534
1,584
Medium- and long-term debt
3,024
3,016
2,796
Total liabilities
80,225
79,074
86,719
Fixed-rate reset non-cumulative perpetual preferred stock, series A, no par value, $100,000 liquidation preference per share:
Authorized - 4,000 shares
Issued - 4,000 shares
394
394
394
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares
1,141
1,141
1,141
Capital surplus
2,220
2,209
2,175
Accumulated other comprehensive loss
(3,742)
(3,587)
(212)
Retained earnings
11,258
11,005
10,494
Less cost of common stock in treasury - 97,197,962 shares at 12/31/22, 97,244,273 shares at 9/30/22 and 97,476,872 shares at 12/31/21
(6,090)
(6,093)
(6,095)
Total shareholders' equity
5,181
5,069
7,897
Total liabilities and shareholders' equity
$
85,406
$
84,143
$
94,616
9
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Comerica Incorporated and Subsidiaries
Three Months Ended
Years Ended
December 31,
December 31,
(in millions, except per share data)
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
INTEREST INCOME
Interest and fees on loans
$
719
$
393
$
2,153
$
1,594
Interest on investment securities
118
71
414
280
Interest on short-term investments
39
10
105
27
Total interest income
876
474
2,672
1,901
INTEREST EXPENSE
Interest on deposits
78
5
102
22
Interest on short-term borrowings
16
—
17
—
Interest on medium- and long-term debt
40
8
87
35
Total interest expense
134
13
206
57
Net interest income
742
461
2,466
1,844
Provision for credit losses
33
(25)
60
(384)
Net interest income after provision for credit losses
709
486
2,406
2,228
NONINTEREST INCOME
Card fees
68
71
273
298
Fiduciary income
55
60
233
231
Service charges on deposit accounts
47
50
195
195
Commercial lending fees
28
28
109
104
Derivative income
23
27
109
99
Bank-owned life insurance
10
11
47
43
Letter of credit fees
10
10
38
40
Brokerage fees
7
3
21
14
Other noninterest income
30
29
43
99
Total noninterest income
278
289
1,068
1,123
NONINTEREST EXPENSES
Salaries and benefits expense
318
292
1,208
1,133
Outside processing fee expense
63
66
251
266
Occupancy expense
53
44
175
161
Software expense
41
38
161
155
Equipment expense
14
12
50
50
Advertising expense
14
10
38
35
FDIC insurance expense
7
5
31
22
Other noninterest expenses
31
19
84
39
Total noninterest expenses
541
486
1,998
1,861
Income before income taxes
446
289
1,476
1,490
Provision for income taxes
96
61
325
322
NET INCOME
350
228
1,151
1,168
Less:
Income allocated to participating securities
2
1
6
5
Preferred stock dividends
6
6
23
23
Net income attributable to common shares
$
342
$
221
$
1,122
$
1,140
Earnings per common share:
Basic
$
2.61
$
1.69
$
8.56
$
8.45
Diluted
2.58
1.66
8.47
8.35
Comprehensive income (loss)
195
223
(2,379)
892
Cash dividends declared on common stock
89
89
356
365
Cash dividends declared per common share
0.68
0.68
2.72
2.72
10
CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Fourth
Third
Second
First
Fourth
Fourth Quarter 2022 Compared to:
Quarter
Quarter
Quarter
Quarter
Quarter
Third Quarter 2022
Fourth Quarter 2021
(in millions, except per share data)
2022
2022
2022
2022
2021
Amount
Percent
Amount
Percent
INTEREST INCOME
Interest and fees on loans
$
719
$
597
$
454
$
383
$
393
$
122
20
%
$
326
83
%
Interest on investment securities
118
119
100
77
71
(1)
—
47
64
Interest on short-term investments
39
34
23
9
10
5
13
29
n/m
Total interest income
876
750
577
469
474
126
17
402
84
INTEREST EXPENSE
Interest on deposits
78
16
4
4
5
62
n/m
73
n/m
Interest on short-term borrowings
16
1
—
—
—
15
n/m
16
n/m
Interest on medium- and long-term debt
40
26
12
9
8
14
57
32
n/m
Total interest expense
134
43
16
13
13
91
n/m
121
n/m
Net interest income
742
707
561
456
461
35
5
281
61
Provision for credit losses
33
28
10
(11)
(25)
5
16
58
n/m
Net interest income after provision
for credit losses
709
679
551
467
486
30
5
223
46
NONINTEREST INCOME
Card fees
68
67
69
69
71
1
2
(3)
(4)
Fiduciary income
55
58
62
58
60
(3)
(6)
(5)
(9)
Service charges on deposit accounts
47
50
50
48
50
(3)
(7)
(3)
(7)
Commercial lending fees
28
29
30
22
28
(1)
(6)
—
—
Derivative income
23
35
29
22
27
(12)
(35)
(4)
(12)
Bank-owned life insurance
10
12
12
13
11
(2)
(17)
(1)
(6)
Letter of credit fees
10
10
9
9
10
—
—
—
—
Brokerage fees
7
6
4
4
3
1
16
4
n/m
Other noninterest income
30
11
3
(1)
29
19
n/m
1
6
Total noninterest income
278
278
268
244
289
—
—
(11)
(4)
NONINTEREST EXPENSES
Salaries and benefits expense
318
307
294
289
292
11
4
26
10
Outside processing fee expense
63
64
62
62
66
(1)
—
(3)
(4)
Occupancy expense
53
44
40
38
44
9
19
9
21
Software expense
41
40
41
39
38
1
—
3
4
Equipment expense
14
12
13
11
12
2
16
2
15
Advertising expense
14
9
8
7
10
5
42
4
28
FDIC insurance expense
7
8
8
8
5
(1)
(1)
2
57
Other noninterest expenses
31
18
16
19
19
13
81
12
65
Total noninterest expenses
541
502
482
473
486
39
8
55
11
Income before income taxes
446
455
337
238
289
(9)
(2)
157
54
Provision for income taxes
96
104
76
49
61
(8)
(8)
35
57
NET INCOME
350
351
261
189
228
(1)
(1)
122
54
Less:
Income allocated to participating securities
2
2
1
1
1
—
—
1
70
Preferred stock dividends
6
6
5
6
6
—
—
—
—
Net income attributable to common shares
$
342
$
343
$
255
$
182
$
221
$
(1)
(1
%)
$
121
55
%
Earnings per common share:
Basic
$
2.61
$
2.63
$
1.94
$
1.39
$
1.69
$
(0.02)
(1
%)
$
0.92
54
%
Diluted
2.58
2.60
1.92
1.37
1.66
(0.02)
(1)
0.92
55
Comprehensive income (loss)
195
(1,282)
(520)
(772)
223
1,477
n/m
(28)
(12)
Cash dividends declared on common stock
89
89
89
89
89
—
—
—
—
Cash dividends declared per common share
0.68
0.68
0.68
0.68
0.68
—
—
—
—
n/m - not meaningful
11
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES (unaudited)
Comerica Incorporated and Subsidiaries
2022
2021
(in millions)
4th Qtr
3rd Qtr
2nd Qtr
1st Qtr
4th Qtr
Balance at beginning of period:
Allowance for loan losses
$
576
$
563
$
554
$
588
$
609
Allowance for credit losses on lending-related commitments
48
46
45
30
30
Allowance for credit losses
624
609
599
618
639
Loan charge-offs:
Commercial
10
25
13
15
14
Real estate construction
—
—
—
1
—
Commercial mortgage
—
—
—
1
2
International
—
—
—
—
3
Consumer
1
1
—
1
1
Total loan charge-offs
11
26
13
18
20
Recoveries on loans previously charged-off:
Commercial
13
12
12
8
23
Real estate construction
1
—
—
—
—
Commercial mortgage
—
—
—
1
—
Residential mortgage
—
1
—
—
1
Consumer
1
—
1
1
—
Total recoveries
15
13
13
10
24
Net loan (recoveries) charge-offs
(4)
13
—
8
(4)
Provision for credit losses:
Provision for loan losses
30
26
9
(26)
(25)
Provision for credit losses on lending-related commitments
3
2
1
15
—
Provision for credit losses
33
28
10
(11)
(25)
Balance at end of period:
Allowance for loan losses
610
576
563
554
588
Allowance for credit losses on lending-related commitments
51
48
46
45
30
Allowance for credit losses
$
661
$
624
$
609
$
599
$
618
Allowance for credit losses as a percentage of total loans
1.24
%
1.21
%
1.18
%
1.21
%
1.26
%
Net loan (recoveries) charge-offs as a percentage of average total loans
(0.03)
0.10
—
0.06
(0.03)
12
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2022
2021
(in millions)
4th Qtr
3rd Qtr
2nd Qtr
1st Qtr
4th Qtr
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial
$
142
$
154
$
161
$
163
$
173
Real estate construction
3
4
4
4
6
Commercial mortgage
23
25
29
27
32
International
3
5
5
5
5
Total nonaccrual business loans
171
188
199
199
216
Retail loans:
Residential mortgage
53
56
49
53
36
Consumer:
Home equity
15
14
13
14
12
Other consumer
1
1
1
3
—
Total nonaccrual retail loans
69
71
63
70
48
Total nonaccrual loans
240
259
262
269
264
Reduced-rate loans
4
3
3
4
4
Total nonperforming loans
244
262
265
273
268
Foreclosed property
—
—
1
1
1
Total nonperforming assets
$
244
$
262
$
266
$
274
$
269
Nonperforming loans as a percentage of total loans
0.46
%
0.51
%
0.52
%
0.55
%
0.54
%
Nonperforming assets as a percentage of total loans and foreclosed property
0.46
0.51
0.52
0.55
0.55
Allowance for credit losses as a multiple of total nonperforming loans
2.7x
2.4x
2.3x
2.2x
2.3x
Loans past due 90 days or more and still accruing
$
23
$
72
$
12
$
26
$
27
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of period
$
259
$
262
$
269
$
264
$
291
Loans transferred to nonaccrual (a)
16
45
30
41
15
Nonaccrual loan gross charge-offs
(11)
(26)
(13)
(18)
(20)
Loans transferred to accrual status (a)
(7)
—
—
(4)
—
Nonaccrual loans sold
(2)
(4)
(9)
—
—
Payments/other (b)
(15)
(18)
(15)
(14)
(22)
Nonaccrual loans at end of period
$
240
$
259
$
262
$
269
$
264
(a)Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(b)Includes net changes related to nonaccrual loans with balances less than or equal to $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed property.
13
ANALYSIS OF NET INTEREST INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Years Ended
December 31, 2022
December 31, 2021
Average
Average
Average
Average
(dollar amounts in millions)
Balance
Interest
Rate
Balance
Interest
Rate
Commercial loans (a), (b)
$
29,846
$
1,278
4.28
%
$
29,283
$
1,009
3.45
%
Real estate construction loans
2,607
132
5.07
3,609
123
3.40
Commercial mortgage loans
12,135
513
4.22
10,610
305
2.88
Lease financing (c)
680
21
3.12
596
(2)
(0.37)
International loans
1,246
56
4.46
1,063
33
3.14
Residential mortgage loans
1,776
56
3.16
1,813
55
3.04
Consumer loans
2,170
97
4.49
2,109
71
3.34
Total loans
50,460
2,153
4.27
49,083
1,594
3.25
Mortgage-backed securities (d)
16,199
385
2.14
11,747
224
1.92
U.S. Treasury securities (e)
2,816
29
0.98
3,977
56
1.42
Total investment securities
19,015
414
1.97
15,724
280
1.79
Interest-bearing deposits with banks (f)
9,376
104
1.02
18,729
27
0.14
Other short-term investments
174
1
0.81
183
—
0.22
Total earning assets
79,025
2,672
3.27
83,719
1,901
2.27
Cash and due from banks
1,481
1,006
Allowance for loan losses
(569)
(729)
Accrued income and other assets
7,335
6,156
Total assets
$
87,272
$
90,152
Money market and interest-bearing checking deposits (g)
$
28,347
94
0.33
$
31,063
18
0.06
Savings deposits
3,304
2
0.05
3,018
—
0.01
Customer certificates of deposit
1,756
5
0.30
2,110
4
0.21
Other time deposits
16
1
4.17
—
—
—
Foreign office time deposits
40
—
1.05
49
—
0.08
Total interest-bearing deposits
33,463
102
0.30
36,240
22
0.06
Federal funds purchased
82
3
3.28
2
—
—
Other short-term borrowings
354
14
4.08
—
—
—
Medium- and long-term debt
2,818
87
3.07
3,035
35
1.11
Total interest-bearing sources
36,717
206
0.56
39,277
57
0.14
Noninterest-bearing deposits
42,018
41,441
Accrued expenses and other liabilities
2,086
1,481
Shareholders' equity
6,451
7,953
Total liabilities and shareholders' equity
$
87,272
$
90,152
Net interest income/rate spread
$
2,466
2.71
$
1,844
2.13
Impact of net noninterest-bearing sources of funds
0.31
0.08
Net interest margin (as a percentage of average earning assets)
3.02
%
2.21
%
(a)Interest income on commercial loans included $(25) million and $95 million of business loan swap (loss) income for the years ended December 31, 2022 and 2021, respectively.
(b)Included PPP loans with average balances of $147 million and $2.3 billion, interest income of $11 million and $111 million and average yields of 7.25% and 4.77% for the year ended December 31, 2022 and 2021, respectively.
(c)The year ended December 31, 2021 included residual value adjustments totaling $20 million, or a 4 basis point impact to average loan yield.
(d)Average balances included $(1.8) billion and $61 million of unrealized (losses) gains for the years ended December 31, 2022 and 2021, respectively; yields calculated gross of these unrealized gains and losses.
(e)Average balances included $(117) million and $27 million of unrealized (losses) gains for the years ended December 31, 2022 and 2021, respectively; yields calculated gross of these unrealized gains and losses.
(f)Average balances excluded $769 million and $375 million of collateral posted and netted against derivative liability positions for the years ended December 31, 2022 and 2021, respectively; yields calculated gross of derivative netting amounts.
(g)Average balances excluded $128 million and $156 million of collateral received and netted against derivative asset positions for the years ended December 31, 2022 and 2021, respectively; rates calculated gross of derivative netting amounts.
14
ANALYSIS OF NET INTEREST INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
December 31, 2022
September 30, 2022
December 31, 2021
Average
Average
Average
Average
Average
Average
(dollar amounts in millions)
Balance
Interest
Rate
Balance
Interest
Rate
Balance
Interest
Rate
Commercial loans (a), (b)
$
30,585
$
402
5.21
%
$
30,573
$
362
4.69
%
$
27,925
$
240
3.42
%
Real estate construction loans
2,978
51
6.83
2,457
33
5.44
2,968
26
3.52
Commercial mortgage loans
12,752
189
5.86
12,180
141
4.59
11,212
81
2.89
Lease financing
753
8
4.35
690
4
2.10
634
5
2.89
International loans
1,227
20
6.22
1,234
15
4.89
1,177
9
3.06
Residential mortgage loans
1,786
15
3.52
1,761
16
3.47
1,810
14
3.02
Consumer loans
2,294
34
5.88
2,218
26
4.77
2,099
18
3.29
Total loans
52,375
719
5.45
51,113
597
4.64
47,825
393
3.26
Mortgage-backed securities (c)
16,373
111
2.28
17,752
111
2.25
13,303
61
1.85
U.S. Treasury securities (d)
2,756
7
0.97
2,788
8
0.97
3,303
10
1.18
Total investment securities
19,129
118
2.11
20,540
119
2.08
16,606
71
1.71
Interest-bearing deposits with banks (e)
3,868
39
3.82
5,194
33
2.12
25,271
10
0.15
Other short-term investments
166
—
1.52
165
1
0.96
196
—
0.21
Total earning assets
75,538
876
4.41
77,012
750
3.71
89,898
474
2.10
Cash and due from banks
1,528
1,529
1,105
Allowance for loan losses
(576)
(563)
(605)
Accrued income and other assets
7,318
7,444
6,294
Total assets
$
83,808
$
85,422
$
96,692
Money market and interest-bearing checking deposits (f)
$
26,301
73
1.09
$
27,125
15
0.22
$
33,326
4
0.05
Savings deposits
3,306
1
0.13
3,365
1
0.05
3,148
—
0.01
Customer certificates of deposit
1,700
3
0.65
1,632
—
0.21
2,032
1
0.19
Other time deposits
62
1
4.21
—
—
—
—
—
—
Foreign office time deposits
31
—
2.81
34
—
1.42
51
—
0.07
Total interest-bearing deposits
31,400
78
0.97
32,156
16
0.20
38,557
5
0.05
Federal funds purchased
241
2
3.59
79
1
2.50
2
—
—
Other short-term borrowings
1,342
14
4.14
65
—
3.04
—
—
—
Medium- and long-term debt
3,020
40
5.28
2,827
26
3.60
2,819
8
1.17
Total interest-bearing sources
36,003
134
1.47
35,127
43
0.48
41,378
13
0.13
Noninterest-bearing deposits
39,955
41,820
45,980
Accrued expenses and other liabilities
2,569
2,184
1,532
Shareholders' equity
5,281
6,291
7,802
Total liabilities and shareholders' equity
$
83,808
$
85,422
$
96,692
Net interest income/rate spread
$
742
2.94
$
707
3.23
$
461
1.97
Impact of net noninterest-bearing sources of funds
0.80
0.27
0.07
Net interest margin (as a percentage of average earning assets)
3.74
%
3.50
%
2.04
%
(a)Interest income on commercial loans included $(70) million, $(2) million and $23 million of business loan swap (loss) income for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively.
(b)Included PPP loans with average balances of $40 million, $67 million and $689 million, interest income of $1 million, $1 million and $16 million and average yields of 3.52%, 7.71% and 8.97% for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively.
(c)Average balances included $3.0 billion, $2.0 billion and $80 million of unrealized losses for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively; yields calculated gross of these unrealized losses.
(d)Average balances included $157 million, $134 million and $6 million of unrealized losses for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively; yields calculated gross of these unrealized losses.
(e)Average balances excluded $96 million, $1.1 billion and $558 million of collateral posted and netted against derivative liability positions for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively; yields calculated gross of derivative netting amounts.
(f)Average balances excluded $183 million, $189 million and $165 million of collateral received and netted against derivative asset positions for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively; rates calculated gross of derivative netting amounts.
15
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Comerica Incorporated and Subsidiaries
Accumulated
Nonredeemable
Common Stock
Other
Total
Preferred
Shares
Capital
Comprehensive
Retained
Treasury
Shareholders'
(in millions, except per share data)
Stock
Outstanding
Amount
Surplus
(Loss) Income
Earnings
Stock
Equity
BALANCE AT SEPTEMBER 30, 2021
$
394
131.0
$
1,141
$
2,170
$
(207)
$
10,366
$
(6,061)
$
7,803
Net income
—
—
—
—
—
228
—
228
Other comprehensive loss, net of tax
—
—
—
—
(5)
—
—
(5)
Cash dividends declared on common stock ($0.68 per share)
—
—
—
—
—
(89)
—
(89)
Cash dividends declared on preferred stock
—
—
—
—
—
(6)
—
(6)
Purchase of common stock
—
(0.5)
—
—
—
—
(50)
(50)
Net issuance of common stock under employee stock plans
—
0.2
—
—
—
(5)
16
11
Share-based compensation
—
—
—
5
—
—
—
5
BALANCE AT DECEMBER 31, 2021
$
394
130.7
$
1,141
$
2,175
$
(212)
$
10,494
$
(6,095)
$
7,897
BALANCE AT SEPTEMBER 30, 2022
$
394
130.9
$
1,141
$
2,209
$
(3,587)
$
11,005
$
(6,093)
$
5,069
Net income
—
—
—
—
—
350
—
350
Other comprehensive loss, net of tax
—
—
—
—
(155)
—
—
(155)
Cash dividends declared on common stock ($0.68 per share)
—
—
—
—
—
(89)
—
(89)
Cash dividends declared on preferred stock
—
—
—
—
—
(6)
—
(6)
Net issuance of common stock under employee stock plans
—
0.1
—
(1)
—
(2)
3
—
Share-based compensation
—
—
—
12
—
—
—
12
BALANCE AT DECEMBER 31, 2022
$
394
131.0
$
1,141
$
2,220
$
(3,742)
$
11,258
$
(6,090)
$
5,181
BALANCE AT DECEMBER 31, 2020
$
394
139.2
$
1,141
$
2,185
$
64
$
9,727
$
(5,461)
$
8,050
Net income
—
—
—
—
—
1,168
—
1,168
Other comprehensive loss, net of tax
—
—
—
—
(276)
—
—
(276)
Cash dividends declared on common stock ($2.72 per share)
—
—
—
—
—
(365)
—
(365)
Cash dividends declared on preferred stock
—
—
—
—
—
(23)
—
(23)
Purchase of common stock
—
(9.5)
—
(24)
—
—
(699)
(723)
Net issuance of common stock under employee stock plans
—
1.0
—
(27)
—
(13)
65
25
Share-based compensation
—
—
—
41
—
—
—
41
BALANCE AT DECEMBER 31, 2021
$
394
130.7
$
1,141
$
2,175
$
(212)
$
10,494
$
(6,095)
$
7,897
Net income
—
—
—
—
—
1,151
—
1,151
Other comprehensive loss, net of tax
—
—
—
—
(3,530)
—
—
(3,530)
Cash dividends declared on common stock ($2.72 per share)
—
—
—
—
—
(356)
—
(356)
Cash dividends declared on preferred stock
—
—
—
—
—
(23)
—
(23)
Purchase of common stock
—
(0.4)
—
—
—
—
(36)
(36)
Net issuance of common stock under employee stock plans
—
0.7
—
(15)
—
(8)
41
18
Share-based compensation
—
—
—
60
—
—
—
60
BALANCE AT DECEMBER 31, 2022
$
394
131.0
$
1,141
$
2,220
$
(3,742)
$
11,258
$
(6,090)
$
5,181
16
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in millions)
Commercial
Retail
Wealth
Three Months Ended December 31, 2022
Bank
Bank
Management
Finance
Other
Total
Earnings summary:
Net interest income (expense)
$
521
$
216
$
61
$
(69)
$
13
$
742
Provision for credit losses
31
4
(2)
—
—
33
Noninterest income
146
33
72
22
5
278
Noninterest expenses
250
182
89
1
19
541
Provision (benefit) for income taxes
84
13
10
(12)
1
96
Net income (loss)
$
302
$
50
$
36
$
(36)
$
(2)
$
350
Net credit-related (recoveries) charge-offs
$
(4)
$
—
$
(1)
$
—
$
1
$
(4)
Selected average balances:
Assets
$
49,641
$
2,878
$
5,230
$
20,264
$
5,795
$
83,808
Loans
45,122
2,155
5,104
—
(6)
52,375
Deposits
39,173
26,027
5,198
782
175
71,355
Statistical data:
Return on average assets (a)
2.41
%
0.71
%
2.55
%
n/m
n/m
1.65
%
Efficiency ratio (b)
37.53
73.38
66.84
n/m
n/m
53.00
Commercial
Retail
Wealth
Three Months Ended September 30, 2022
Bank
Bank
Management
Finance
Other
Total
Earnings summary:
Net interest income (expense)
$
478
$
188
$
55
$
(22)
$
8
$
707
Provision for credit losses
16
2
5
—
5
28
Noninterest income
169
29
77
6
(3)
278
Noninterest expenses
242
170
87
—
3
502
Provision (benefit) for income taxes
94
11
10
(6)
(5)
104
Net income (loss)
$
295
$
34
$
30
$
(10)
$
2
$
351
Net credit-related charge-offs
$
6
$
—
$
—
$
—
$
7
$
13
Selected average balances:
Assets
$
48,323
$
2,799
$
5,097
$
22,133
$
7,070
$
85,422
Loans
44,043
2,066
4,973
—
31
51,113
Deposits
41,471
26,665
5,293
383
164
73,976
Statistical data:
Return on average assets (a)
2.42
%
0.51
%
2.08
%
n/m
n/m
1.63
%
Efficiency ratio (b)
37.54
76.81
65.92
n/m
n/m
50.75
Commercial
Retail
Wealth
Three Months Ended December 31, 2021
Bank
Bank
Management
Finance
Other
Total
Earnings summary:
Net interest income (expense)
$
385
$
138
$
41
$
(103)
$
—
$
461
Provision for credit losses
(21)
1
(3)
—
(2)
(25)
Noninterest income
168
33
72
10
6
289
Noninterest expenses
229
164
85
—
8
486
Provision (benefit) for income taxes
77
—
7
(22)
(1)
61
Net income (loss)
$
268
$
6
$
24
$
(71)
$
1
$
228
Net credit-related (recoveries) charge-offs
$
(6)
$
1
$
1
$
—
$
—
$
(4)
Selected average balances:
Assets
$
43,684
$
2,898
$
4,935
$
18,460
$
26,715
$
96,692
Loans
40,960
2,084
4,794
—
(13)
47,825
Deposits
50,821
26,714
5,724
954
324
84,537
Statistical data:
Return on average assets (a)
1.95
%
0.07
%
1.61
%
n/m
n/m
0.93
%
Efficiency ratio (b)
41.19
95.17
74.64
n/m
n/m
64.24
(a)Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.
(b)Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding a derivative contract tied to the conversion rate of Visa Class B shares and changes in the value of shares obtained through monetization of warrants.
n/m - not meaningful
17
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND REGULATORY RATIOS (unaudited)
Comerica Incorporated and Subsidiaries
Comerica believes non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate the adequacy of common equity and our performance trends. Tangible common equity is used by Comerica to measure the quality of capital and the return relative to balance sheet risk.
Common equity tier 1 capital ratio removes preferred stock from the Tier 1 capital ratio as defined by and calculated in conformity with bank regulations. The tangible common equity ratio removes the effect of intangible assets from capital and total assets. Tangible common equity per share of common stock removes the effect of intangible assets from common shareholders' equity per share of common stock. Comerica believes that the presentation of tangible common equity adjusted for the impact of accumulated other comprehensive loss provides a greater understanding of ongoing operations and enhances comparability with prior periods.
