/SECOND AND FINAL ADD -- DA41365 -- Comerica Incorporated Earnings/

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• USA - English

ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)

Comerica Incorporated and Subsidiaries

Three Months Ended

December 31, 2009

September 30, 2009

December 31, 2008

Average

Average

Average

Average

Average

Average

(dollar amounts in millions)

Balance

Interest

Rate

Balance

Interest

Rate

Balance

Interest

Rate

Commercial loans (a) (b)

$            21,971 

$              212   

3.84   

%

$               23,401   

$        223   

3.79   

%

$              28,507   

$          334   

4.65   

%

Real estate construction loans

3,703 

27   

2.90   

4,033   

29   

2.83   

4,536   

46   

4.08   

Commercial mortgage loans

10,393 

110   

4.19   

10,359   

110   

4.21   

10,613   

138   

5.17   

Residential mortgage loans

1,664 

21   

5.01   

1,720   

24   

5.66   

1,851   

27   

5.80   

Consumer loans

2,517 

23   

3.59   

2,550   

24   

3.68   

2,639   

30   

4.49   

Lease financing

1,181 

11   

3.80   

1,218   

12   

3.96   

1,359   

12   

3.63   

International loans

1,324 

12   

3.73   

1,501   

14   

3.65   

1,833   

22   

4.78   

Business loan swap income

- 

9   

-   

-   

9   

-   

-   

5   

-   

Total loans (b)

42,753 

425   

3.95   

44,782   

445   

3.94   

51,338   

614   

4.76   

Auction-rate securities available-for-sale

923 

3   

1.37   

962   

3   

1.29   

769   

6   

2.95   

Other investment securities available-for-sale

7,664 

51   

2.67   

8,108   

62   

3.10   

7,965   

96   

4.86   

Total investment securities available-for-sale

8,587 

54   

2.53   

9,070   

65   

2.91   

8,734   

102   

4.69   

Federal funds sold and securities purchased

 under agreements to resell

1 

-   

0.29   

2   

-   

0.29   

75   

-   

0.83   

Interest-bearing deposits with banks (c)

2,480 

1   

0.25   

3,538   

2   

0.25   

811   

1   

0.50   

Other short-term investments

132 

1   

1.55   

121   

1   

1.80   

176   

2   

3.59   

Total earning assets

53,953 

481   

3.55   

57,513   

513   

3.55   

61,134   

719   

4.68   

Cash and due from banks

831 

873   

1,056   

Allowance for loan losses

(1,048)

(992)  

(780)  

Accrued income and other assets

4,660 

4,554   

4,571   

Total assets

$             58,396 

$               61,948   

$               65,981   

Money market and NOW deposits (a)

$             14,113 

14   

0.39   

$               13,090   

15   

0.46   

$               12,670   

37   

1.16   

Savings deposits

1,376 

-   

0.08   

1,347   

-   

0.09   

1,264   

1   

0.29   

Customer certificates of deposit

6,823 

25   

1.42   

8,145   

46   

2.23   

8,589   

63   

2.91   

Total interest-bearing core deposits

22,312 

39   

0.69   

22,582   

61   

1.07   

22,523   

101   

1.78   

Other time deposits

1,493 

12   

3.22   

3,573   

28   

3.05   

6,702   

56   

3.35   

Foreign office time deposits

550 

-   

0.22   

660   

-   

0.24   

516   

1   

0.81   

Total interest-bearing deposits

24,355 

51   

0.83   

26,815   

89   

1.32   

29,741   

158   

2.12   

Short-term borrowings

222 

-   

0.09   

434   

-   

0.13   

2,808   

9   

1.27   

Medium- and long-term debt

11,140 

32   

1.12   

13,311   

37   

1.10   

15,016   

118   

3.14   

Total interest-bearing sources

35,717 

83   

0.92   

40,560   

126   

1.23   

47,565   

285   

2.39   

Noninterest-bearing deposits (a)

14,430 

13,225   

10,575   

Accrued expenses and other liabilities

1,225 

1,098   

1,540   

Total shareholders' equity

7,024 

7,065   

6,301   

Total liabilities and shareholders' equity

$          58,396 

$               61,948   

$               65,981   

Net interest income/rate spread (FTE)

$              398   

2.63   

$         387   

2.32   

$           434   

2.29   

FTE adjustment

$                   2   

$             2   

$               3   

Impact of net noninterest-bearing

 sources of funds

0.31   

0.36   

0.53   

Net interest margin (as a percentage

 of average earning assets) (FTE) (b) (c)

2.94   

%

2.68   

%

2.82   

%

N/M - Not meaningful

(a) FSD balances included above:

Loans (primarily low-rate)

$                205 

$                   -   

0.98   

%

$                    209   

$              1   

1.94   

%

$                    323   

$                1   

1.60   

%

Interest-bearing deposits

342 

-   

0.30   

384   

-   

0.47   

834   

3   

1.55   

Noninterest-bearing deposits

1,285 

1,258   

1,320   

(b) Impact of FSD loans (primarily low-rate) on the following:

Commercial loans

(0.03)  

%

(0.02)  

%

(0.03)  

%

Total loans

(0.01)  

(0.01)  

(0.02)  

Net interest margin (FTE) (assuming loans

   were funded by noninterest-bearing

   deposits)

(0.01)  

-   

-   

(c) Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 13 basis points and 16 basis points in the fourth and third quarters of 2009, respectively,

    and by 3 basis points in the fourth quarter of 2008.  Excluding excess liquidity, the net interest margin would have been 3.07%, 2.84% and 2.85% in each respective period.

CONSOLIDATED STATISTICAL DATA (unaudited)

Comerica Incorporated and Subsidiaries

December 31,

September 30,

June 30,

March 31,

December 31,

(in millions, except per share data)

2009

2009

2009

2009

2008

Commercial loans:

    Floor plan

$              1,367   

$                 857   

$              1,492   

$              1,763   

$              2,341   

    Other

20,323   

21,689   

23,430   

24,668   

25,658   

Total commercial loans

21,690   

22,546   

24,922   

26,431   

27,999   

Real estate construction loans:

    Commercial Real Estate business line (a)

2,988   

3,328   

3,500   

3,711   

3,831   

    Other business lines (b)

473   

542   

652   

668   

646   

Total real estate construction loans

3,461   

3,870   

4,152   

4,379   

4,477   

Commercial mortgage loans:

    Commercial Real Estate business line (a)

1,824   

1,678   

1,728   

1,659   

1,619   

    Other business lines (b)

8,633   

8,702   

8,672   

8,855   

8,870   

Total commercial mortgage loans

10,457   

10,380   

10,400   

10,514   

10,489   

Residential mortgage loans

1,651   

1,679   

1,759   

1,836   

1,852   

Consumer loans:

    Home equity

1,803   

1,804   

1,801   

1,791   

1,781   

    Other consumer

708   

740   

761   

786   

811   

Total consumer loans

2,511   

2,544   

2,562   

2,577   

2,592   

Lease financing

1,139   

1,197   

1,234   

1,232   

1,343   

International loans

1,252   

1,355   

1,523   

1,655   

1,753   

Total loans

$            42,161   

$            43,571   

$            46,552   

$            48,624   

$            50,505   

Goodwill

$                 150   

$                 150   

$                 150   

$                 150   

$                 150   

Loan servicing rights

7   

8   

9   

10   

11   

Tier 1 common capital ratio (c) (d)

8.18   

%

8.04   

%

7.66   

%

7.32   

%

7.08   

%

Tier 1 risk-based capital ratio (d)

12.46   

12.21   

11.58   

11.06   

10.66   

Total risk-based capital ratio (d)

16.93   

16.79   

15.97   

15.36   

14.72   

Leverage ratio (d)

13.22   

12.46   

12.11   

11.65   

11.77   

Tangible common equity ratio (c)

7.99   

7.96   

7.55   

7.27   

7.21   

Book value per common share

$              31.82   

$              31.90   

$              32.70   

$              33.32   

$              33.31   

Market value per share for the quarter:

    High

32.30   

31.83   

26.47   

21.20   

37.01   

    Low

26.49   

19.94   

16.03   

11.72   

15.05   

    Close

29.57   

29.67   

21.15   

18.31   

19.85   

Quarterly ratios:

    Return on average common shareholders' equity

(5.10)  

%

(1.27)  

%

(1.25)  

%

(1.90)  

%

0.19   

%

    Return on average assets

(0.19)  

0.12   

0.11   

0.06   

0.12   

    Efficiency ratio

70.52   

67.14   

72.75   

66.61   

68.19   

Number of banking centers

447   

444   

441   

440   

439   

Number of employees - full time equivalent

9,330   

9,384   

9,497   

9,696   

10,186   

(a) Primarily loans to real estate investors and developers.

(b) Primarily loans secured by owner-occupied real estate.

(c) See Reconciliation of Non-GAAP Financial Measures.

(d) December 31, 2009 ratios are estimated.

PARENT COMPANY ONLY BALANCE SHEETS (unaudited)

Comerica Incorporated

December 31,

September 30,

December 31,

(in millions, except share data) 

2009

2009

2008

ASSETS

Cash and due from subsidiary bank

$                     5 

$                     7 

$                  11 

Short-term investments with subsidiary bank

2,150 

2,169 

2,329 

Other short-term investments

86 

84 

80 

Investment in subsidiaries, principally banks

5,710 

5,711 

5,690 

Premises and equipment

4 

4 

5 

Other assets

186 

197 

210 

     Total assets

$              8,141 

$              8,172 

$             8,325 

LIABILITIES AND SHAREHOLDERS' EQUITY

Medium- and long-term debt

$                 986 

$                 992 

$             1,002 

Other liabilities

126 

145 

171 

     Total liabilities

1,112 

1,137 

1,173 

Fixed rate cumulative perpetual preferred stock, series F,

  no par value, $1,000 liquidation preference per share:

    Authorized - 2,250,000 shares

    Issued  - 2,250,000 shares at 12/31/09, 09/30/09 and 12/31/08

2,151 

2,145 

2,129 

Common stock - $5 par value:

  Authorized - 325,000,000 shares

   Issued - 178,735,252 shares at 12/31/09, 09/30/09 and 12/31/08

894 

894 

894 

Capital surplus

740 

738 

722 

Accumulated other comprehensive loss

(336)

(361)

(309)

Retained earnings

5,161 

5,205 

5,345 

Less cost of common stock in treasury - 27,555,623 shares at 12/31/09, 27,620,576 shares

  at 09/30/09 and 28,244,967 shares at 12/31/08

(1,581)

(1,586)

(1,629)

     Total shareholders' equity

7,029 

7,035 

7,152 

     Total liabilities and shareholders' equity

$              8,141 

$              8,172 

$             8,325 

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

Earnings

Stock

Equity

BALANCE AT JANUARY 1, 2008

$                        - 

150.0 

$                   894 

$                 564 

$                 (177)

$              5,497 

$             (1,661)

$             5,117 

Net income

- 

- 

- 

- 

- 

213 

- 

213 

Other comprehensive loss, net of tax

- 

- 

- 

- 

(132)

- 

- 

(132)

Total comprehensive income

81 

Cash dividends declared on common stock ($2.31 per share)

- 

- 

- 

- 

- 

(348)

- 

(348)

Purchase of common stock

- 

- 

- 

- 

- 

- 

(1)

(1)

Issuance of preferred stock and related warrant

2,126 

- 

- 

124 

- 

- 

- 

2,250 

Accretion of discount on preferred stock

3 

- 

- 

- 

- 

(3)

- 

- 

Net issuance of common stock under employee stock plans

- 

0.5 

- 

(19)

- 

(14)

33 

- 

Share-based compensation

- 

- 

- 

53 

- 

- 

- 

53 

BALANCE AT DECEMBER 31, 2008

$                2,129 

150.5 

$                   894 

$                 722 

$                 (309)

$              5,345 

$             (1,629)

$             7,152 

Net income

- 

- 

- 

- 

- 

17 

- 

17 

Other comprehensive loss, net of tax

- 

- 

- 

- 

(27)

- 

- 

(27)

Total comprehensive loss

(10)

Cash dividends declared on preferred stock

- 

- 

- 

- 

- 

(113)

- 

(113)

Cash dividends declared on common stock ($0.20 per share)

- 

- 

- 

- 

- 

(30)

- 

(30)

Purchase of common stock

- 

(0.1)

- 

- 

- 

- 

(1)

(1)

Accretion of discount on preferred stock

22 

- 

- 

- 

- 

(22)

- 

- 

Net issuance of common stock under employee stock plans

- 

0.8 

- 

(15)

- 

(36)

48 

(3)

Share-based compensation

- 

- 

- 

32 

- 

- 

- 

32 

Other

- 

- 

- 

1 

- 

- 

1 

2 

BALANCE AT DECEMBER 31, 2009

$                2,151 

151.2 

$                   894 

$                 740 

$                 (336)

$              5,161 

$             (1,581)

$             7,029 

BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)

Comerica Incorporated and Subsidiaries

Wealth &

(dollar amounts in millions)

Business  

Retail

Institutional

Three Months Ended December 31, 2009

Bank

Bank

Management

Finance

Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$                343   

$                129   

$                  42   

$               (125)  

$                    9   

$                398   

Provision for loan losses

180   

36   

19   

-   

22   

257   

Noninterest income

77   

48   

60   

26   

3   

214   

Noninterest expenses

164   

161   

76   

2   

21   

424   

Provision (benefit) for income taxes (FTE)

11   

(8)  

2   

(39)  

(6)  

(40)  

Income from discontinued operations,

 net of tax

-   

-   

-   

-   

-   

-   

Net income (loss)

$                  65   

$                 (12)  

$                    5   

$                 (62)  

$                 (25)  

$                 (29)  

Net credit-related charge-offs

$                183   

$                  30   

$                  12   

$                     -   

$                     -   

$                225   

Selected average balances:

Assets

$           32,655   

$             6,257   

$             4,841   

$           10,683   

$             3,960   

$           58,396   

Loans

32,289   

5,733   

4,746   

-   

(15)  

42,753   

Deposits

16,944   

17,020   

2,849   

1,892   

80   

38,785   

Liabilities

16,903   

16,978   

2,837   

13,722   

932   

51,372   

Attributed equity

3,376   

606   

373   

899   

1,770   

7,024   

Statistical data:

Return on average assets (a)

0.80   

%

(0.27)  

%

0.38   

%

N/M

N/M

(0.19)  

%

Return on average attributed equity

7.70   

(7.76)  

4.91   

N/M

N/M

(5.10)  

Net interest margin (b)

4.21   

3.02   

3.50   

N/M

N/M

2.94   

Efficiency ratio

38.98   

90.98   

75.98   

N/M

N/M

70.52   

Wealth &

Business  

Retail

Institutional

Three Months Ended September 30, 2009

Bank

Bank

Management

Finance

Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$                346   

$                127   

$                  42   

$               (136)  

$                    8   

$                387   

Provision for loan losses

252   

42   

20   

-   

(3)  

311   

Noninterest income

72   

50   

66   

121   

6   

315   

Noninterest expenses

160   

154   

73   

3   

9   

399   

Provision (benefit) for income taxes (FTE)

(16)  

(8)  

5   

(11)  

3   

(27)  

Income from discontinued operations,

 net of tax

-   

-   

-   

-   

-   

-   

Net income (loss)

$                  22   

$                 (11)  

$                  10   

$                   (7)  

$                    5   

$                  19   

Net credit-related charge-offs

$                195   

$                  34   

$                  10   

$                     -   

$                     -   

$                239   

Selected average balances:

Assets

$           34,822   

$             6,445   

$             4,856   

$           11,426   

$             4,399   

$           61,948   

Loans

34,116   

5,904   

4,760   

2   

-   

44,782   

Deposits

15,735   

17,563   

2,735   

3,969   

38   

40,040   

Liabilities

16,002   

17,532   

2,725   

18,361   

263   

54,883   

Attributed equity

3,464   

629   

373   

959   

1,640   

7,065   

Statistical data:

Return on average assets (a)

0.24   

%

(0.24)  

%

0.80   

%

N/M

N/M

0.12   

%

Return on average attributed equity

2.45   

(6.92)  

10.40   

N/M

N/M

(1.27)  

Net interest margin (b)

4.01   

2.87   

3.48   

N/M

N/M

2.68   

Efficiency ratio

38.35   

86.86   

70.84   

N/M

N/M

67.14   

Wealth &

Business  

Retail

Institutional

Three Months Ended December 30, 2008

Bank

Bank

Management

Finance

Other

Total

Earnings summary:

Net interest income (expense) (FTE)

$                329   

$                129   

$                  38   

$                 (66)  

$                    4   

$                434   

Provision for loan losses

138   

44   

13   

-   

(3)  

192   

Noninterest income

61   

49   

73   

13   

(22)  

174   

Noninterest expenses

172   

180   

80   

3   

(24)  

411   

Provision (benefit) for income taxes (FTE)

27   

(12)  

5   

(19)  

(15)  

(14)  

Income from discontinued operations,