SECOND QUARTER 2022 NET INCOME OF $261 MILLION, $1.92 PER SHARE
Earnings Per Share Increased 40% Over First Quarter 2022
Strong Revenue Growth, Solid Expense Control and Excellent Credit Quality
Benefits from Higher Interest Rates, Strong Loan Growth and Liquidity Deployment
ROE of 17% and Efficiency Ratio of 58%
"Our second quarter earnings per share increased 40% over the first quarter and revenue grew 18%,” said Curt C. Farmer, Comerica Chairman and Chief Executive Officer. “These results reflect the rising rate environment, including prudent actions taken to lock in higher rates. In addition, loan growth in the second quarter was one of the highest in our history, with increases in nearly every business line. Credit quality was excellent and fee income increased 10%. Higher revenue, combined with careful expense management as we continue to invest in our colleagues and platforms, resulted in a significant improvement in our efficiency ratio to 58%. Overall, it was a strong quarter with a return on equity of 17%. While there is a great deal of economic uncertainty, we feel positive about the path we are on."
(dollar amounts in millions, except per share data)
2nd Qtr '22
1st Qtr '22
2nd Qtr '21
FINANCIAL RESULTS
Net interest income
$
561
$
456
$
465
Provision for credit losses
10
(11)
(135)
Noninterest income
268
244
284
Noninterest expenses
482
473
463
Pre-tax income
337
238
421
Provision for income taxes
76
49
93
Net income
$
261
$
189
$
328
Diluted earnings per common share
$
1.92
$
1.37
$
2.32
Average loans
50,027
48,273
49,828
Average deposits
77,589
79,103
75,520
Return on average assets
1.18
%
0.84
%
1.50
%
Return on average common shareholders' equity
16.72
10.10
17.10
Net interest margin
2.74
2.19
2.29
Efficiency ratio (a)
58.03
66.91
61.72
Common equity Tier 1 capital ratio (b)
9.72
9.93
10.35
Tier 1 capital ratio (b)
10.24
10.48
10.93
Common equity ratio
6.95
7.45
8.53
Common shareholders' equity per share of common stock
$
46.19
$
50.80
$
56.28
Tangible common equity per share of common stock (c)
41.25
45.86
51.43
(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)June 30, 2022 ratios are estimated.
(c)See Reconciliations of Non-GAAP Financial Measures and Regulatory Ratios.
Second Quarter 2022 Compared to First Quarter 2022 Overview
Balance sheet items discussed in terms of average balances unless otherwise noted.
Loans increased $1.8 billion to $50.0 billion.
•Growth in nearly every line of business, notably $401 million in National Dealer Services, $395 million in general Middle Market, $341 million in Corporate Banking and $298 million in Equity Fund Services. Commercial Real Estate decreased $142 million.
•Paycheck Protection Program (PPP) loans declined $186 million to $149 million.
•Average yield on loans increased 42 basis points to 3.64%, primarily driven by higher short-term rates.
Securities increased $1.7 billion to $19.0 billion.
•Increase of $1.8 billion in mortgage-backed securities reflected continued deployment of excess liquidity to reduce asset sensitivity, partially offset by a decrease of $103 million in Treasury securities.
•Average yield on securities increased 18 basis points to 1.92% due to higher yields on purchases and reinvestments.
Deposits decreased $1.5 billion to $77.6 billion.
•Interest-bearing and noninterest-bearing deposits decreased $1.0 billion and $501 million, respectively, due to strategic deposit management as well as customers utilizing balances to fund business activities. Highly rate- sensitive businesses, such as Municipalities and Financial Institutions (both part of general Middle Market), Corporate Banking, National Dealer Services and Technology and Life Sciences largely contributed to the decline, partly offset by growth in Wealth Management and Retail deposits.
•The average cost of interest-bearing deposits remained stable at 5 basis points.
Net interest income increased $105 million to $561 million.
•Driven by the benefit of higher short-term rates as well as growth in loan and securities balances.
•Net interest margin increased 55 basis points to 2.74%, reflecting higher rates and a decrease in lower-yielding deposits held with the Federal Reserve Bank.
Provision for credit losses increased to an expense of $10 million from a benefit of $11 million.
•The allowance for credit losses increased $10 million to $609 million at June 30, 2022, reflecting loan growth, strong credit metrics and an uncertain economic environment. As a percentage of total loans, the allowance for credit losses was 1.18%, a decrease of 3 basis points.
Noninterest income increased $24 million to $268 million.
•Increases of $8 million each in commercial lending fees (mostly syndication agent fees) and warrant-related income, $7 million in derivative income (mostly due to a $5 million increase in credit valuation adjustments) and $4 million in fiduciary income, partially offset by a $7 million decrease in deferred compensation asset returns (offset in noninterest expenses).
Noninterest expenses increased $9 million to $482 million.
•Increases of $8 million in certain technology-related costs and $5 million in salaries and benefits expense, as well as increases of $2 million each in litigation-related and occupancy expenses, partially offset by a decrease of $5 million in operational losses and a $4 million refund related to a favorable state tax ruling.
◦Technology-related costs included consulting, software and equipment expenses.
◦Salaries and benefits expense included increases of $17 million in performance-based compensation and $4 million each in contract labor, staff insurance and merit increases, partially offset by a $19 million net decrease from seasonal items and $7 million in deferred compensation expense (offset in other noninterest income). Seasonal items included decreases of $18 million in annual stock-based compensation and $5 million in payroll taxes, partially offset by increases of $2 million each in 401K expense and one additional day.
◦Included $7 million of expenses for asset impairments and consulting fees (reported in other noninterest expenses) as well as severance costs and contract labor (reported in salaries and benefits) for certain modernization initiatives related to transformation of the retail banking delivery model, alignment of corporate facilities and optimization of technology platform.
Capital position remained solid with a common equity Tier 1 capital ratio of 9.72% and a Tier 1 capital ratio of 10.24%.
•Declared dividends of $89 million on common stock and $5 million on preferred stock.
2
Second Quarter 2022 Compared to Second Quarter 2021 Overview
Balance sheet items discussed in terms of average balances.
Loans were relatively stable at $50.0 billion, including a $3.3 billion decline in PPP loans.
•Increases in Corporate Banking, Equity Fund Services, general Middle Market and Environmental Services were mostly offset by decreases in Mortgage Banker Finance, Business Banking, Personal Banking and Commercial Real Estate.
•Average yield on loans increased 39 basis points, primarily reflecting the increase in short-term rates, partially offset by the net impact of PPP loans.
Securities increased $3.6 billion, or 24%.
•Reflects investment of a portion of excess liquidity into mortgage-backed securities, partly offset by maturities of Treasury securities.
•Average yield on securities increased 10 basis points, reflecting higher yields on reinvestments.
Deposits increased $2.1 billion, or 3%.
•Most business lines experienced growth as noninterest-bearing deposits increased $2.6 billion, partially offset by a decrease of $509 million in interest-bearing deposits, due to customers' solid profitability and capital markets activity as well as the liquidity injected into the economy through fiscal and monetary actions.
•The average cost of interest-bearing deposits decreased 1 basis point, reflecting prudent management of relationship pricing.
Net interest income increased $96 million.
•Higher short-term rates and volume of earning assets, partially offset by the net impact of PPP loans.
Provision for credit losses increased to an expense of $10 million from a benefit of $135 million.
•The allowance for credit losses decreased $74 million, primarily reflecting strong credit quality and sustained improvements in the economic forecast. As a percentage of total loans, the allowance for credit losses decreased 18 basis points.
Noninterest income decreased $16 million.
•Decreases in deferred compensation asset returns (offset in noninterest expenses) and card fees (higher activity in 2021 from stimulus payments), partially offset by increases in derivative income, service charges on deposit accounts, commercial lending fees and bank-owned life insurance.
Noninterest expenses increased $19 million.
•Increases in salaries and benefits expense, consulting fees, software expense and operational losses, partially offset by decreases in outside processing fee expense and litigation-related expenses as well as a refund from a favorable state tax ruling received in second quarter 2022.
3
Net Interest Income
Balance sheet items presented and discussed in terms of average balances.
(dollar amounts in millions)
2nd Qtr '22
1st Qtr '22
2nd Qtr '21
Net interest income
$
561
$
456
$
465
Net interest margin
2.74
%
2.19
%
2.29
%
Selected balances:
Total earning assets
$
80,093
$
83,570
$
81,533
Total loans
50,027
48,273
49,828
Total investment securities
19,029
17,327
15,403
Federal Reserve Bank deposits
10,409
17,267
15,701
Total deposits
77,589
79,103
75,520
Total noninterest-bearing deposits
42,918
43,419
40,340
Medium- and long-term debt
2,656
2,767
2,858
Net interest income increased $105 million, and net interest margin increased 55 basis points compared to first quarter 2022.
•Interest income on loans increased $71 million and improved net interest margin by 29 basis points, due to higher short-term rates (+$52 million, +26 basis points), higher loan balances (+$15 million, +3 basis points) and one additional day in the quarter (+$4 million).
•Interest income on investment securities increased $23 million and improved net interest margin by 1 basis point due to portfolio growth and higher short-term rates.
•Interest income on short-term investments increased $14 million and improved net interest margin by 26 basis points due to higher short-term rates (+$29 million, +15 basis points) as well as a decrease of $6.9 billion in lower-yielding deposits with the Federal Reserve (-$15 million, +11 basis points).
•Interest expense on medium- and long-term debt increased $3 million and reduced net interest margin by 1 basis point.
The net impact of higher rates to the second quarter 2022 net interest income was an increase of $82 million and 42 basis points to the net interest margin.
4
Credit Quality
"Credit quality remained excellent in the second quarter with no net charge-offs and declines in criticized and nonaccrual loans,” said Farmer. “Strong credit metrics, loan growth and economic uncertainty resulted in a relatively stable allowance for credit losses at 1.18% of loans and a provision of only $10 million. The allowance to nonaccrual loans remained strong at 2.3 times. Overall, our customers have been able to manage through the challenging environment, while performing well and maintaining strong balance sheets."
(dollar amounts in millions)
2nd Qtr '22
1st Qtr '22
2nd Qtr '21
Credit-related charge-offs
$
13
$
18
$
8
Recoveries
13
10
19
Net credit-related (recoveries) charge-offs
—
8
(11)
Net credit-related charge-offs/Average total loans
—
%
0.06
%
(0.09
%)
Provision for credit losses
$
10
$
(11)
$
(135)
Nonperforming loans
265
273
319
Nonperforming assets (NPAs)
266
274
320
NPAs/Total loans and foreclosed property
0.52
%
0.55
%
0.64
%
Loans past due 90 days or more and still accruing
$
12
$
26
$
27
Allowance for loan losses
563
554
652
Allowance for credit losses on lending-related commitments (a)
46
45
31
Total allowance for credit losses
609
599
683
Allowance for credit losses/Period-end total loans
1.18
%
1.21
%
1.36
%
Allowance for credit losses/Period-end total loans excluding PPP loans
1.19
1.22
1.44
Allowance for credit losses/Nonperforming loans
2.3x
2.2x
2.1x
(a) Included in accrued expenses and other liabilities on the Consolidated Balance Sheets.
•The allowance for credit losses increased $10 million to $609 million at June 30, 2022, or 1.18% of total loans, reflecting loan growth, strong credit metrics and an uncertain economic environment.
•Criticized loans decreased $113 million to $1.5 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 general Middle Market, Business Banking, Energy and Corporate Banking, partially offset by an increase in Technology and Life Sciences.
•Nonperforming assets decreased $8 million to $266 million, or 0.52% of total loans and foreclosed property, compared to 0.55% in first quarter 2022.
◦Nonaccrual retail loans decreased by $7 million.
•There were no net charge-offs compared to $8 million in first 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 June 30, 2022. A discussion of business segment year-to-date results will be included in Comerica's Second Quarter 2022 Form 10-Q.
Conference Call and Webcast
Comerica will host a conference call to review second quarter 2022 financial results at 7 a.m. CT Wednesday, July 20, 2022. 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
Darlene P. Persons
(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
Six Months Ended
June 30,
March 31,
June 30,
June 30,
(in millions, except per share data)
2022
2022
2021
2022
2021
PER COMMON SHARE AND COMMON STOCK DATA
Diluted earnings per common share
$
1.92
$
1.37
$
2.32
$
3.29
$
4.76
Cash dividends declared
0.68
0.68
0.68
1.36
1.36
Average diluted shares (in thousands)
132,446
132,912
138,070
132,687
139,566
PERFORMANCE RATIOS
Return on average common shareholders' equity
16.72
%
10.10
%
17.10
%
13.13
%
17.57
%
Return on average assets
1.18
0.84
1.50
1.01
1.59
Efficiency ratio (a)
58.03
66.91
61.72
62.11
62.12
CAPITAL
Common equity tier 1 capital (b), (c)
$
7,348
$
7,169
$
7,004
Tier 1 capital (b), (c)
7,742
7,563
7,398
Risk-weighted assets (b)
75,584
72,195
67,685
Common equity tier 1 capital ratio (b), (c)
9.72
%
9.93
%
10.35
%
Tier 1 capital ratio (b), (c)
10.24
10.48
10.93
Total capital ratio (b)
11.75
12.04
12.95
Leverage ratio (b)
8.63
8.25
8.45
Common shareholders' equity per share of common stock
$
46.19
$
50.80
$
56.28
Tangible common equity per share of common stock (c)
41.25
45.86
51.43
Common equity ratio
6.95
%
7.45
%
8.53
%
Tangible common equity ratio (c)
6.26
6.77
7.85
AVERAGE BALANCES
Commercial loans
$
29,918
$
28,275
$
30,042
$
29,101
$
30,502
Real estate construction loans
2,332
2,659
4,191
2,494
4,164
Commercial mortgage loans
11,947
11,647
10,093
11,798
10,022
Lease financing
642
635
578
639
585
International loans
1,303
1,220
1,034
1,262
999
Residential mortgage loans
1,773
1,785
1,817
1,779
1,813
Consumer loans
2,112
2,052
2,073
2,082
2,121
Total loans
50,027
48,273
49,828
49,155
50,206
Earning assets
80,093
83,570
81,533
81,822
80,036
Total assets
88,810
91,150
87,860
89,974
86,218
Noninterest-bearing deposits
42,918
43,419
40,340
43,167
38,858
Interest-bearing deposits
34,671
35,684
35,180
35,175
34,609
Total deposits
77,589
79,103
75,520
78,342
73,467
Common shareholders' equity
6,131
7,344
7,563
6,734
7,654
Total shareholders' equity
6,525
7,738
7,957
7,128
8,048
NET INTEREST INCOME
Net interest income
$
561
$
456
$
465
$
1,017
$
908
Net interest margin
2.74
%
2.19
%
2.29
%
2.47
%
2.29
%
CREDIT QUALITY
Nonperforming assets
$
266
$
274
$
320
Loans past due 90 days or more and still accruing
12
26
27
Net credit-related charge-offs (recoveries)
—
8
(11)
$
8
$
(8)
Allowance for loan losses
563
554
652
Allowance for credit losses on lending-related commitments
46
45
31
Total allowance for credit losses
609
599
683
Allowance for credit losses as a percentage of total loans
1.18
%
1.21
%
1.36
%
Net loan charge-offs (recoveries) as a percentage of average total loans
—
0.06
(0.09)
0.03
%
(0.03
%)
Nonperforming assets as a percentage of total loans and foreclosed property
0.52
0.55
0.64
Allowance for credit losses as a multiple of total nonperforming loans
2.3x
2.2x
2.1x
OTHER KEY INFORMATION
Number of banking centers
433
433
431
Number of employees - full time equivalent
7,436
7,484
7,532
(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) June 30, 2022 ratios are estimated.
(c) See Reconciliations of Non-GAAP Financial Measures and Regulatory Ratios.
8
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
June 30,
March 31,
December 31,
June 30,
(in millions, except share data)
2022
2022
2021
2021
(unaudited)
(unaudited)
(unaudited)
ASSETS
Cash and due from banks
$
1,631
$
1,466
$
1,236
$
1,008
Interest-bearing deposits with banks
5,902
12,084
21,443
15,493
Other short-term investments
160
181
197
183
Investment securities available-for-sale
20,829
18,810
16,986
15,837
Commercial loans
31,259
29,562
29,366
30,207
Real estate construction loans
2,465
2,301
2,948
3,172
Commercial mortgage loans
11,855
11,992
11,255
11,334
Lease financing
653
644
640
589
International loans
1,291
1,248
1,208
1,036
Residential mortgage loans
1,753
1,769
1,771
1,807
Consumer loans
2,178
2,047
2,097
2,083
Total loans
51,454
49,563
49,285
50,228
Allowance for loan losses
(563)
(554)
(588)
(652)
Net loans
50,891
49,009
48,697
49,576
Premises and equipment
422
444
454
454
Accrued income and other assets
7,054
7,171
5,603
5,804
Total assets
$
86,889
$
89,165
$
94,616
$
88,355
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits
$
42,308
$
42,677
$
45,800
$
40,514
Money market and interest-bearing checking deposits
28,409
29,746
31,349
30,319
Savings deposits
3,342
3,300
3,167
3,095
Customer certificates of deposit
1,686
1,854
1,973
2,115
Foreign office time deposits
20
31
50
23
Total interest-bearing deposits
33,457
34,931
36,539
35,552
Total deposits
75,765
77,608
82,339
76,066
Accrued expenses and other liabilities
2,059
1,839
1,584
1,504
Medium- and long-term debt
2,630
2,682
2,796
2,854
Total liabilities
80,454
82,129
86,719
80,424
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
394
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares
1,141
1,141
1,141
1,141
Capital surplus
2,204
2,194
2,175
2,163
Accumulated other comprehensive loss
(1,954)
(1,173)
(212)
(120)
Retained earnings
10,752
10,585
10,494
10,202
Less cost of common stock in treasury - 97,387,508 shares at 6/30/22, 97,435,493 shares at 3/31/22, 97,476,872 shares at 12/31/21 and 94,247,402 shares at 6/30/21
(6,102)
(6,105)
(6,095)
(5,849)
Total shareholders' equity
6,435
7,036
7,897
7,931
Total liabilities and shareholders' equity
$
86,889
$
89,165
$
94,616
$
88,355
9
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Comerica Incorporated and Subsidiaries
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions, except per share data)
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
INTEREST INCOME
Interest and fees on loans
$
454
$
404
$
837
$
790
Interest on investment securities
100
70
177
139
Interest on short-term investments
23
5
32
9
Total interest income
577
479
1,046
938
INTEREST EXPENSE
Interest on deposits
4
5
8
12
Interest on medium- and long-term debt
12
9
21
18
Total interest expense
16
14
29
30
Net interest income
561
465
1,017
908
Provision for credit losses
10
(135)
(1)
(317)
Net interest income after provision for credit losses
551
600
1,018
1,225
NONINTEREST INCOME
Card fees
69
84
138
155
Fiduciary income
62
60
120
113
Service charges on deposit accounts
50
47
98
95
Commercial lending fees
30
27
52
45
Derivative income
29
22
51
52
Bank-owned life insurance
12
9
25
20
Letter of credit fees
9
10
18
20
Brokerage fees
4
4
8
8
Other noninterest income
3
21
2
46
Total noninterest income
268
284
512
554
NONINTEREST EXPENSES
Salaries and benefits expense
294
277
583
559
Outside processing fee expense
62
71
124
135
Software expense
41
38
80
77
Occupancy expense
40
38
78
77
Equipment expense
13
13
24
25
Advertising expense
8
9
15
15
FDIC insurance expense
8
7
16
13
Other noninterest expenses
16
10
35
9
Total noninterest expenses
482
463
955
910
Income before income taxes
337
421
575
869
Provision for income taxes
76
93
125
191
NET INCOME
261
328
450
678
Less:
Income allocated to participating securities
1
2
2
3
Preferred stock dividends
5
5
11
11
Net income attributable to common shares
$
255
$
321
$
437
$
664
Earnings per common share:
Basic
$
1.94
$
2.35
$
3.33
$
4.81
Diluted
1.92
2.32
3.29
4.76
Comprehensive (loss) income
(520)
313
(1,292)
494
Cash dividends declared on common stock
89
92
178
187
Cash dividends declared per common share
0.68
0.68
1.36
1.36
10
CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Second
First
Fourth
Third
Second
Second Quarter 2022 Compared to:
Quarter
Quarter
Quarter
Quarter
Quarter
First Quarter 2022
Second Quarter 2021
(in millions, except per share data)
2022
2022
2021
2021
2021
Amount
Percent
Amount
Percent
INTEREST INCOME
Interest and fees on loans
$
454
$
383
$
393
$
411
$
404
$
71
19
%
$
50
12
%
Interest on investment securities
100
77
71
70
70
23
28
30
44
Interest on short-term investments
23
9
10
8
5
14
n/m
18
n/m
Total interest income
577
469
474
489
479
108
23
98
21
INTEREST EXPENSE
Interest on deposits
4
4
5
5
5
—
—
(1)
(16)
Interest on medium- and long-term debt
12
9
8
9
9
3
40
3
47
Total interest expense
16
13
13
14
14
3
30
2
22
Net interest income
561
456
461
475
465
105
23
96
21
Provision for credit losses
10
(11)
(25)
(42)
(135)
21
n/m
145
n/m
Net interest income after provision
for credit losses
551
467
486
517
600
84
18
(49)
(8)
NONINTEREST INCOME
Card fees
69
69
71
72
84
—
—
(15)
(18)
Fiduciary income
62
58
60
58
60
4
6
2
3
Service charges on deposit accounts
50
48
50
50
47
2
5
3
5
Commercial lending fees
30
22
28
31
27
8
30
3
8
Derivative income
29
22
27
20
22
7
30
7
29
Bank-owned life insurance
12
13
11
12
9
(1)
(9)
3
32
Letter of credit fees
9
9
10
10
10
—
—
(1)
(6)
Brokerage fees
4
4
3
3
4
—
—
—
—
Other noninterest income
3
(1)
29
24
21
4
n/m
(18)
(84)
Total noninterest income
268
244
289
280
284
24
10
(16)
(6)
NONINTEREST EXPENSES
Salaries and benefits expense
294
289
292
282
277
5
2
17
6
Outside processing fee expense
62
62
66
65
71
—
—
(9)
(12)
Software expense
41
39
38
40
38
2
6
3
5
Occupancy expense
40
38
44
40
38
2
5
2
5
Equipment expense
13
11
12
13
13
2
9
—
—
Advertising expense
8
7
10
10
9
1
13
(1)
(7)
FDIC insurance expense
8
8
5
4
7
—
—
1
28
Other noninterest expenses
16
19
19
11
10
(3)
(13)
6
72
Total noninterest expenses
482
473
486
465
463
9
2
19
4
Income before income taxes
337
238
289
332
421
99
41
(84)
(20)
Provision for income taxes
76
49
61
70
93
27
53
(17)
(18)
NET INCOME
261
189
228
262
328
72
39
(67)
(20)
Less:
Income allocated to participating securities
1
1
1
1
2
—
—
(1)
(9)
Preferred stock dividends
5
6
6
6
5
(1)
—
—
—
Net income attributable to common shares
$
255
$
182
$
221
$
255
$
321
$
73
40
%
$
(66)
(21
%)
Earnings per common share:
Basic
$
1.94
$
1.39
$
1.69
$
1.92
$
2.35
$
0.55
40
%
$
(0.41)
(17
%)
Diluted
1.92
1.37
1.66
1.90
2.32
0.55
40
(0.40)
(17)
Comprehensive (loss) income
(520)
(772)
223
175
313
252
(33)
(833)
n/m
Cash dividends declared on common stock
89
89
89
89
92
—
—
(3)
(7)
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)
2nd Qtr
1st Qtr
4th Qtr
3rd Qtr
2nd Qtr
Balance at beginning of period:
Allowance for loan losses
$
554
$
588
$
609
$
652
$
777
Allowance for credit losses on lending-related commitments
45
30
30
31
30
Allowance for credit losses
599
618
639
683
807
Loan charge-offs:
Commercial
13
15
14
24
7
Real estate construction
—
1
—
—
—
Commercial mortgage
—
1
2
—
—
International
—
—
3
2
—
Consumer
—
1
1
—
1
Total loan charge-offs
13
18
20
26
8
Recoveries on loans previously charged-off:
Commercial
12
8
23
22
18
Commercial mortgage
—
1
—
—
—
International
—
—
—
—
1
Residential mortgage
—
—
1
1
—
Consumer
1
1
—
1
—
Total recoveries
13
10
24
24
19
Net loan charge-offs (recoveries)
—
8
(4)
2
(11)
Provision for credit losses:
Provision for loan losses
9
(26)
(25)
(41)
(136)
Provision for credit losses on lending-related commitments
1
15
—
(1)
1
Provision for credit losses
10
(11)
(25)
(42)
(135)
Balance at end of period:
Allowance for loan losses
563
554
588
609
652
Allowance for credit losses on lending-related commitments
46
45
30
30
31
Allowance for credit losses
$
609
$
599
$
618
$
639
$
683
Allowance for credit losses as a percentage of total loans
1.18
%
1.21
%
1.26
%
1.33
%
1.36
%
Allowance for credit losses as a percentage of total loans excluding PPP loans
1.19
1.22
1.27
1.35
1.44
Net loan charge-offs (recoveries) as a percentage of average total loans
—
0.06
(0.03)
0.01
(0.09)
12
NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries
2022
2021
(in millions)
2nd Qtr
1st Qtr
4th Qtr
3rd Qtr
2nd Qtr
SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial
$
161
$
163
$
173
$
200
$
221
Real estate construction
4
4
6
6
4
Commercial mortgage
29
27
32
30
31
International
5
5
5
8
—
Total nonaccrual business loans
199
199
216
244
256
Retail loans:
Residential mortgage
49
53
36
35
41
Consumer:
Home equity
13
14
12
12
14
Other consumer
1
3
—
—
—
Total nonaccrual retail loans
63
70
48
47
55
Total nonaccrual loans
262
269
264
291
311
Reduced-rate loans
3
4
4
4
8
Total nonperforming loans
265
273
268
295
319
Foreclosed property
1
1
1
1
—
Other repossessed assets
—
—
—
—
1
Total nonperforming assets
$
266
$
274
$
269
$
296
$
320
Nonperforming loans as a percentage of total loans
0.52
%
0.55
%
0.54
%
0.61
%
0.64
%
Nonperforming assets as a percentage of total loans and foreclosed property
0.52
0.55
0.55
0.62
0.64
Allowance for credit losses as a multiple of total nonperforming loans
2.3x
2.2x
2.3x
2.2x
2.1x
Loans past due 90 days or more and still accruing
$
12
$
26
$
27
$
12
$
27
ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of period
$
269
$
264
$
291
$
311
$
314
Loans transferred to nonaccrual (a)
30
41
15
55
62
Nonaccrual loan gross charge-offs
(13)
(18)
(20)
(26)
(8)
Loans transferred to accrual status (a)
—
(4)
—
(8)
—
Nonaccrual loans sold
(9)
—
—
(9)
—
Payments/other (b)
(15)
(14)
(22)
(32)
(57)
Nonaccrual loans at end of period
$
262
$
269
$
264
$
291
$
311
(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
Six Months Ended
June 30, 2022
June 30, 2021
Average
Average
Average
Average
(dollar amounts in millions)
Balance
Interest
Rate
Balance
Interest
Rate
Commercial loans (a) (b)
$
29,101
$
514
3.56
%
$
30,502
$
507
3.36
%
Real estate construction loans
2,494
48
3.82
4,164
69
3.34
Commercial mortgage loans
11,798
183
3.13
10,022
142
2.86
Lease financing (c)
639
9
2.95
585
(8)
(2.87)
International loans
1,262
21
3.38
999
16
3.19
Residential mortgage loans
1,779
25
2.83
1,813
28
3.11
Consumer loans
2,082
37
3.55
2,121
36
3.39
Total loans
49,155
837
3.43
50,206
790
3.17
Mortgage-backed securities (d)
15,321
163
1.99
10,657
105
1.98
U.S. Treasury securities (e)
2,862
14
0.99
4,493
34
1.56
Total investment securities
18,183
177
1.83
15,150
139
1.86
Interest-bearing deposits with banks
14,302
32
0.44
14,507
9
0.11
Other short-term investments
182
—
0.42
173
—
0.24
Total earning assets
81,822
1,046
2.54
80,036
938
2.36
Cash and due from banks
1,434
976
Allowance for loan losses
(568)
(835)
Accrued income and other assets
7,286
6,041
Total assets
$
89,974
$
86,218
Money market and interest-bearing checking deposits
$
30,008
6
0.05
$
29,505
10
0.07
Savings deposits
3,272
—
0.02
2,911
—
0.02
Customer certificates of deposit
1,847
2
0.18
2,141
2
0.23
Foreign office time deposits
48
—
0.34
52
—
0.09
Total interest-bearing deposits
35,175
8
0.05
34,609
12
0.07
Short-term borrowings
3
—
0.56
2
—
0.05
Medium- and long-term debt
2,711
21
1.55
3,232
18
1.07
Total interest-bearing sources
37,889
29
0.16
37,843
30
0.15
Noninterest-bearing deposits
43,167
38,858
Accrued expenses and other liabilities
1,790
1,469
Shareholders' equity
7,128
8,048
Total liabilities and shareholders' equity
$
89,974
$
86,218
Net interest income/rate spread
$
1,017
2.38
$
908
2.21
Impact of net noninterest-bearing sources of funds
0.09
0.08
Net interest margin (as a percentage of average earning assets)
2.47
%
2.29
%
(a)Interest income on commercial loans included $47 million and $48 million of business loan swap income for the six months ended June 30, 2022 and 2021, respectively.
(b)Included PPP loans with average balances of $242 million and $3.5 billion, interest income of $9 million and $62 million and average yields of 7.50% and 3.57% for the six months ended June 30, 2022 and 2021, respectively.
(c)The six months ended June 30, 2021 included residual value adjustments totaling $17 million, or a 7 basis point impact to average loan yield.
(d)Average balances included $(1.1) billion and $124 million of unrealized gains and losses for the six months ended June 30, 2022 and 2021, respectively; yields calculated gross of these unrealized gains and losses.
(e)Average balances included $(88) million and $45 million of unrealized gains and losses for the six months ended June 30, 2022 and 2021, respectively; yields calculated gross of these unrealized gains and losses.
14
ANALYSIS OF NET INTEREST INCOME (unaudited)
Comerica Incorporated and Subsidiaries
Three Months Ended
June 30, 2022
March 31, 2022
June 30, 2021
Average
Average
Average
Average
Average
Average
(dollar amounts in millions)
Balance
Interest
Rate
Balance
Interest
Rate
Balance
Interest
Rate
Commercial loans (a) (b)
$
29,918
$
282
3.77
%
$
28,275
$
232
3.34
%
$
30,042
$
255
3.38
%
Real estate construction loans
2,332
24
4.05
2,659
24
3.62
4,191
34
3.30
Commercial mortgage loans
11,947
99
3.33
11,647
84
2.92
10,093
72
2.87
Lease financing
642
4
3.01
635
5
2.89
578
4
2.82
International loans
1,303
12
3.66
1,220
9
3.09
1,034
8
3.21
Residential mortgage loans
1,773
14
3.16
1,785
11
2.51
1,817
14
3.09
Consumer loans
2,112
19
3.64
2,052
18
3.47
2,073
17
3.37
Total loans
50,027
454
3.64
48,273
383
3.22
49,828
404
3.25
Mortgage-backed securities (c)
16,218
93
2.07
14,413
70
1.88
11,053
53
1.94
U.S. Treasury securities (d)
2,811
7
0.98
2,914
7
1.00
4,350
17
1.53
Total investment securities
19,029
100
1.92
17,327
77
1.74
15,403
70
1.82
Interest-bearing deposits with banks
10,861
23
0.85
17,781
9
0.19
16,126
5
0.11
Other short-term investments
176
—
0.66
189
—
0.19
176
—
0.20
Total earning assets
80,093
577
2.83
83,570
469
2.26
81,533
479
2.36
Cash and due from banks
1,421
1,446
982
Allowance for loan losses
(555)
(581)
(755)
Accrued income and other assets
7,851
6,715
6,100
Total assets
$
88,810
$
91,150
$
87,860
Money market and interest-bearing checking deposits
$
29,513
3
0.05
$
30,506
3
0.04
$
29,993
4
0.06
Savings deposits
3,330
—
0.02
3,213
—
0.01
3,021
—
0.01
Customer certificates of deposit
1,774
1
0.18
1,921
1
0.19
2,126
1
0.22
Other time deposits
1
—
0.30
—
—
—
—
—
—
Foreign office time deposits
53
—
0.54
44
—
0.11
40
—
0.10
Total interest-bearing deposits
34,671
4
0.05
35,684
4
0.05
35,180
5
0.06
Short-term borrowings
5
—
0.64
1
—
0.13
2
—
0.05
Medium- and long-term debt
2,656
12
1.85
2,767
9
1.27
2,858
9
1.18
Total interest-bearing sources
37,332
16
0.19
38,452
13
0.14
38,040
14
0.15
Noninterest-bearing deposits
42,918
43,419
40,340
Accrued expenses and other liabilities
2,035
1,541
1,523
Shareholders' equity
6,525
7,738
7,957
Total liabilities and shareholders' equity
$
88,810
$
91,150
$
87,860
Net interest income/rate spread
$
561
2.64
$
456
2.12
$
465
2.21
Impact of net noninterest-bearing sources of funds
0.10
0.07
0.08
Net interest margin (as a percentage of average earning assets)
2.74
%
2.19
%
2.29
%
(a)Interest income on commercial loans included $25 million, $22 million and $24 million of business loan swap income for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021, respectively.
(b)Included PPP loans with average balances of $149 million, $335 million and $3.5 billion, interest income of $4 million, $5 million and $32 million and average yields of 9.63%, 6.54% and 3.66% for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021, respectively.
(c)Average balances included $(1.7) billion, $(562) million and $91 million of unrealized gains and losses for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021, respectively; yields calculated gross of these unrealized gains and losses.
(d)Average balances included $(118) million, $(57) million and $33 million of unrealized gains and losses for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021, respectively; yields calculated gross of these unrealized gains and losses.
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 MARCH 31, 2021
$
394
139.6
$
1,141
$
2,183
$
(105)
$
9,975
$
(5,436)
$
8,152
Net income
—
—
—
—
—
328
—
328
Other comprehensive loss, net of tax
—
—
—
—
(15)
—
—
(15)
Cash dividends declared on common stock ($0.68 per share)
—
—
—
—
—
(92)
—
(92)
Cash dividends declared on preferred stock
—
—
—
—
—
(5)
—
(5)
Purchase of common stock
—
(5.8)
—
(24)
—
—
(426)
(450)
Net issuance of common stock under employee stock plans
—
0.1
—
(3)
—
(4)
13
6
Share-based compensation
—
—
—
7
—
—
—
7
BALANCE AT JUNE 30, 2021
$
394
133.9
$
1,141
$
2,163
$
(120)
$
10,202
$
(5,849)
$
7,931
BALANCE AT MARCH 31, 2022
$
394
130.7
$
1,141
$
2,194
$
(1,173)
$
10,585
$
(6,105)
$
7,036
Net income
—
—
—
—
—
261
—
261
Other comprehensive loss, net of tax
—
—
—
—
(781)
—
—
(781)
Cash dividends declared on common stock ($0.68 per share)
—
—
—
—
—
(89)
—
(89)
Cash dividends declared on preferred stock
—
—
—
—
—
(5)
—
(5)
Net issuance of common stock under employee stock plans
—
0.1
—
(1)
—
—
3
2
Share-based compensation
—
—
—
11
—
—
—
11
BALANCE AT JUNE 30, 2022
$
394
130.8
$
1,141
$
2,204
$
(1,954)
$
10,752
$
(6,102)
$
6,435
BALANCE AT DECEMBER 31, 2020
$
394
139.2
$
1,141
$
2,185
$
64
$
9,727
$
(5,461)
$
8,050
Net income
—
—
—
—
—
678
—
678
Other comprehensive loss, net of tax
—
—
—
—
(184)
—
—
(184)
Cash dividends declared on common stock ($1.36 per share)
—
—
—
—
—
(187)
—
(187)
Cash dividends declared on preferred stock
—
—
—
—
—
(11)
—
(11)
Purchase of common stock
—
(5.9)
—
(24)
—
—
(429)
(453)
Net issuance of common stock under employee stock plans
—
0.6
—
(27)
—
(5)
41
9
Share-based compensation
—
—
—
29
—
—
—
29
BALANCE AT JUNE 30, 2021
$
394
133.9
$
1,141
$
2,163
$
(120)
$
10,202
$
(5,849)
$
7,931
BALANCE AT DECEMBER 31, 2021
$
394
130.7
$
1,141
$
2,175
$
(212)
$
10,494
$
(6,095)
$
7,897
Net income
—
—
—
—
—
450
—
450
Other comprehensive loss, net of tax
—
—
—
—
(1,742)
—
—
(1,742)
Cash dividends declared on common stock ($1.36 per share)
—
—
—
—
—
(178)
—
(178)
Cash dividends declared on preferred stock
—
—
—
—
—
(11)
—
(11)
Purchase of common stock
—
(0.4)
—
—
—
—
(36)
(36)
Net issuance of common stock under employee stock plans
—
0.5
—
(10)
—
(3)
29
16
Share-based compensation
—
—
—
39
—
—
—
39
BALANCE AT JUNE 30, 2022
$
394
130.8
$
1,141
$
2,204
$
(1,954)
$
10,752
$
(6,102)
$
6,435
16
BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries
(dollar amounts in millions)
Commercial
Retail
Wealth
Three Months Ended June 30, 2022
Bank
Bank
Management
Finance
Other
Total
Earnings summary:
Net interest income (expense)
$
399
$
147
$
47
$
(33)
$
1
$
561
Provision for credit losses
8
(2)
4
—
—
10
Noninterest income
160
32
77
12
(13)
268
Noninterest expenses
237
173
89
—
(17)
482
Provision (benefit) for income taxes
70
2
7
(7)
4
76
Net income (loss)
$
244
$
6
$
24
$
(14)
$
1
$
261
Net credit-related charge-offs (recoveries)
$
2
$
(1)
$
(1)
$
—
$
—
$
—
Selected average balances:
Assets
$
47,451
$
2,769
$
4,963
$
21,071
$
12,556
$
88,810
Loans
43,171
2,015
4,832
—
9
50,027
Deposits
43,744
27,145
5,966
520
214
77,589
Statistical data:
Return on average assets (a)
2.00
%
0.09
%
1.52
%
n/m
n/m
1.18
%
Efficiency ratio (b)
42.38
95.87
71.82
n/m
n/m
58.03
Commercial
Retail
Wealth
Three Months Ended March 31, 2022
Bank
Bank
Management
Finance
Other
Total
Earnings summary:
Net interest income (expense)
$
356
$
130
$
36
$
(64)
$
(2)
$
456
Provision for credit losses
(23)
7
2
—
3
(11)
Noninterest income
132
28
72
18
(6)
244
Noninterest expenses
234
164
83
—
(8)
473
Provision (benefit) for income taxes
65
(4)
6
(12)
(6)
49
Net income (loss)
$
212
$
(9)
$
17
$
(34)
$
3
$
189
Net credit-related charge-offs (recoveries)
$
9
$
—
$
(1)
$
—
$
—
$
8
Selected average balances:
Assets
$
44,882
$
2,807
$
4,858
$
19,235
$
19,368
$
91,150
Loans
41,549
2,013
4,713
—
(2)
48,273
Deposits
46,040
26,861
5,303
680
219
79,103
Statistical data:
Return on average assets (a)
1.71
%
(0.14)
%
1.21
%
n/m
n/m
0.84
%
Efficiency ratio (b)
47.32
103.82
76.79
n/m
n/m
66.91
Commercial
Retail
Wealth
Three Months Ended June 30, 2021
Bank
Bank
Management
Finance
Other
Total
Earnings summary:
Net interest income (expense)
$
402
$
145
$
43
$
(127)
$
2
$
465
Provision for credit losses
(123)
(7)
(4)
—
(1)
(135)
Noninterest income
167
30
71
9
7
284
Noninterest expenses
204
173
77
1
8
463
Provision (benefit) for income taxes
111
1
9
(26)
(2)
93
Net income (loss)
$
377
$
8
$
32
$
(93)
$
4
$
328
Net credit-related (recoveries) charge-offs
$
(12)
$
1
$
—
$
—
$
—
$
(11)
Selected average balances:
Assets
$
44,283
$
3,395
$
5,063
$
17,461
$
17,658
$
87,860
Loans
42,350
2,533
4,936
—
9
49,828
Deposits
43,682
25,573
5,103
944
218
75,520
Statistical data:
Return on average assets (a)
3.21
%
0.12
%
2.40
%
n/m
n/m
1.50
%
Efficiency ratio (b)
35.99
98.06
66.85
n/m
n/m
61.72
(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.
