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COMERICA INCORPORATED
2001 FORM 10-K
Securities and Exchange Commission
Washington, DC 20549
Form 10-K
Annual Report Pursuant
to Section 13 or 15(d) of
the Securities Exchange Act of 1934,
For the fiscal year ended December 31, 2001.
Commission file number 1-10706
Comerica Incorporated
Comerica Tower at Detroit Center
500 Woodward Avenue, MC 3391
Detroit, Michigan 48226
1-800-521-1190
Incorporated in the State of Delaware,
IRS Employer Identification No. 38-1998421.
Securities registered pursuant to Section 12(b) of the Act:
- - Common Stock, $5 par value
- - Rights to acquire Series D Preferred Stock, no par value
These securities are registered on the New York Stock Exchange.
Securities registered pursuant to Section 12(g) of the Act:
- - 7 1/4 percent Subordinated Notes due in 2007.
- - 9.98% Series B Capital Securities of Imperial Capital Trust I due
2026.*
- - 7.60% Trust Preferred of Comerica Capital Trust I due 2050.
- --------
*The registrant has reporting obligations for these securities
which were acquired in connection with the merger of Imperial Bancorp with and
into Comerica Holdings Incorporated, a wholly-owned subsidiary of the
registrant. As a result of the merger, Imperial Capital Trust became a
wholly-owned indirect subsidiary of the registrant.
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The registrant: (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
No disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
contained in the definitive proxy statement incorporated by reference in Part
III of this Form 10-K.
At March 27, 2002, the registrant's common stock, $5 par value, held by
nonaffiliates had an aggregate market value of $10,684,734,720.54 based on the
closing price on the New York Stock Exchange on that date of $63.34 per share
and 168,688,581 shares of common stock held by nonaffiliates. For purposes of
this Form 10-K only, it has been assumed that all common shares Comerica's Trust
Department holds for Comerica and Comerica's employee plans, and all common
shares the registrant's directors and executive officers hold, are held by
affiliates.
At March 27, 2002, the registrant had outstanding 178,735,252 shares of its
common stock, $5 par value.
DOCUMENTS INCORPORATED
BY REFERENCE:
1. Parts I and II:
Items 1-8--Annual Report to Shareholders for the year ended December 31, 2001.
2. Part III:
Items 10-13--Proxy Statement for the Annual Meeting of Shareholders to be held
May 21, 2002.
PART I
ITEM 1. BUSINESS
GENERAL
Comerica Incorporated ("Comerica" or the "Corporation") is a multi-state
financial services provider, incorporated under the laws of the State of
Delaware, headquartered in Detroit, Michigan. Based on assets as of December 31,
2001, it was the 17th largest bank holding company in the United States and the
largest bank holding company headquartered in Michigan in terms of both total
assets and total deposits. Comerica was formed in 1973 to acquire the
outstanding common stock of Comerica Bank (formerly Comerica Bank-Detroit), one
of Michigan's oldest banks ("Comerica Bank"). Since that time, Comerica has
acquired financial institutions in California, Texas and Florida, and, in 1997,
formed Comerica Bank-Mexico, S.A. In 2001, Comerica established its Canadian
branch and the assets and the majority of the liabilities of Comerica
Bank-Canada were transferred to Comerica's Canadian branch. Comerica intends to
dissolve the shell subsidiary, Comerica Bank-Canada in 2002. In 2001, Comerica
also merged its two national banking
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subsidiaries, Comerica Bank, National Association and Comerica Bank & Trust,
National Association, with Comerica Bank & Trust, National Association as the
surviving bank. On January 29, 2001, Comerica completed its acquisition of
Imperial Bancorp, and as of September 29, 2001, Comerica merged its two
California banking subsidiaries, Comerica Bank-California and Imperial Bank,
with Comerica Bank-California as the surviving bank. As of December 31, 2001,
Comerica owned directly or indirectly all the outstanding common stock of six
banking and fifty-five non-banking subsidiaries. At December 31, 2001, Comerica
had total assets of approximately $50.7 billion, total deposits of approximately
$37.5 billion, total loans (net of unearned income) of approximately $41.2
billion and common shareholders' equity of approximately $4.8 billion.
BUSINESS STRATEGY
Comerica has strategically aligned its operations into three major lines of
business: the Business Bank, the Individual Bank and the Investment Bank. The
Business Bank is comprised of middle market lending, asset-based lending, large
corporate banking, international financial services and speciality deposit
gathering. This line of business meets the needs of medium-size businesses,
multinational corporations and governmental entities by offering various
products and services, including commercial loans and lines of credit, deposits,
cash management, capital market products, international trade finance, letters
of credit, foreign exchange management services and loan syndication services.
The Individual Bank includes consumer lending, consumer deposit gathering,
mortgage loan origination and servicing, small business banking (annual sales
under $10 million) and private banking. This line of business offers a variety
of consumer products, including deposit accounts, installment loans, student
loans, home equity lines of credit and residential mortgage loans. In addition,
a full range of financial services is provided to small businesses and
municipalities. Private lending and personal trust services are also provided to
meet the personal financial needs of affluent individuals (as defined by
individual net income or wealth).
The Investment Bank is responsible for the sale of mutual fund and annuity
products, as well as life, disability and long-term care insurance products.
This line of business also offers institutional trust products, retirement
services and provides investment management and advisory services, investment
banking and discount securities brokerage services.
Comerica has positioned itself to deliver financial services in its four primary
geographic markets: Michigan, Texas, California and Florida, with operations in
19 other states, Canada and Mexico.
In addition to the three major lines of business, the Finance segment is also
significant. The Finance segment includes Comerica's securities portfolio and
asset and liability management activities. This segment is responsible for
managing Comerica's funding, liquidity and capital needs, performing interest
sensitivity gap and earnings simulation analysis and executing various
strategies to manage Comerica's exposure to liquidity and interest rate risk.
3
SUPERVISION AND REGULATION
Banks, financial holding companies and financial institutions are highly
regulated at both the state and federal level. Comerica is subject to
supervision and regulation by the Federal Reserve Board ("FRB") under the Bank
Holding Company Act of 1956, as amended (the "Act").
The Gramm-Leach-Bliley Act of 1999 expanded the activities in which a bank
holding company, which is eligible to be a financial holding company, could
engage. The conditions to be a financial holding company include the requirement
that each deposit institution subsidiary of the holding company be
well-capitalized and well-managed.
On December 19, 2000, Comerica became a financial holding company. As a
financial holding company, Comerica may affiliate with securities firms and
insurance companies and engage in other activities that are financial in nature.
Activities that are "financial in nature" include, but are not limited to:
securities underwriting; dealing and market marking; sponsoring mutual funds and
investment companies; insurance underwriting and agency; merchant banking;
travel agent services; real estate development; and activities that the FRB has
determined to be closely related to banking. A bank holding company that is not
also a financial holding company is limited to engaging in banking and such
other activities previously determined by the FRB to be closely related to
banking.
Comerica Bank is chartered by the State of Michigan and is supervised and
regulated by the Division of Financial Institutions, Office of Financial and
Insurance Services of the State of Michigan and the FRB. Comerica Bank-Texas is
chartered by the State of Texas and is supervised and regulated by the Texas
Department of Banking and the FRB. Comerica Bank & Trust, National Association
is chartered under federal law and subject to supervision and regulation by the
Office of the Comptroller of the Currency ("OCC"). Comerica Bank-California is
chartered by the State of California and is supervised and regulated by the
California Department of Financial Institutions and the FRB. Comerica Bank,
Comerica Bank & Trust, National Association, Comerica Bank-California and
Comerica Bank-Texas are members of the Federal Reserve System ("FRS"). The
deposits of all the foregoing banks are insured by the Bank Insurance Fund
("BIF") of the Federal Deposit Insurance Corporation ("FDIC") to the extent
provided by law. Comerica Bank-Mexico, S.A. is chartered under the laws of
Mexico and is supervised and regulated by the Ministry of Finance and Public
Credit, the Bank of Mexico, and the Mexican National Banking Commission.
Comerica Bank-Canada is chartered under the laws of Ontario, Canada and is
supervised and regulated by the Office of the Superintendent of Financial
Institutions Canada and the Canada Deposit Insurance Corporation.
The FRB supervises non-banking activities conducted by companies owned by
Comerica Bank, Comerica Bank-California and Comerica Bank-Texas and the OCC
supervises non-banking activities conducted by companies owned by Comerica Bank
& Trust, National Association. In addition, Comerica's non-banking subsidiaries
are subject to supervision and regulation by various state and federal agencies,
including, but not limited to, the National Association of Securities Dealers,
Inc. (in the case of Comerica Securities, Inc. and Comerica Capital Markets
Corporation), the Department of Insurance of the State of Michigan (in the case
of Comerica Insurance Services,
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Inc.), and the Securities and Exchange Commission (in the case of Munder Capital
Management, the Corporation's investment advisory subsidiary).
No FRB approval is required for Comerica to acquire a company, other than a bank
holding company or bank, engaged in activities that are financial in nature or
incidental to activities that are financial in nature, as determined by the FRB.
Prior FRB approval is required before Comerica may acquire the beneficial
ownership or control of more than 5% of the voting shares or substantially all
of the assets of a bank holding company, bank or savings association. If any
subsidiary bank of Comerica ceases to be "well capitalized" or "well managed"
under applicable regulatory standards, the Federal Reserve Board may, among
other actions, order Comerica to divest the subsidiary bank. Alternatively,
Comerica may elect to conform its non-banking activities to those permissible
for a bank holding company that is not also a financial holding company. If any
subsidiary bank of Comerica receives a rating under the Community Reinvestment
Act of 1977 of less than satisfactory, Comerica will be prohibited from engaging
in new activities or acquiring companies other than bank holding companies,
banks or savings associations.
Various governmental requirements, including Sections 23A and 23B of the Federal
Reserve Act and Regulation W, limit borrowings by Comerica and its nonbank
subsidiaries from its affiliate insured depository institutions, and also limit
various other transactions between Comerica and its nonbank subsidiaries, on the
one hand, and its affiliate insured depository institutions, on the other. For
example, Section 23A of the Federal Reserve Act limits to no more than 10% of
its total capital the aggregate outstanding amount of any insured depository
institution's loans and other "covered transactions" with any particular nonbank
affiliate, and limits to no more than 20% of its total capital the aggregate
outstanding amount of any insured depository institution's covered transactions
with all of its nonbank affiliates. Section 23A of the Federal Reserve Act also
generally requires that an insured depository institution's loans to its nonbank
affiliates be secured, and Section 23B of the Federal Reserve Act generally
requires that an insured depository institution's transactions with its nonbank
affiliates be on arms-length terms.
Set forth below are summaries of selected laws and regulations applicable to
Comerica and its subsidiaries. The summaries are not complete and are qualified
in their entirety by references to the particular statutes and regulations. A
change in applicable law or regulation could have a material effect on the
business of Comerica.
Interstate Banking and Branching
Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 (the "Interstate Act"), a bank holding company became able to acquire banks
in states other than its home state, without regard to the permissibility of
such acquisition under state law, but subject to any state requirement that the
bank has been organized and operating for a minimum period of time, not to
exceed five years, and the requirement that the bank holding company, prior to
and following the proposed acquisition, control no more than ten percent of the
total amount of deposits of insured depository institutions in the United States
and no more than thirty percent of such deposits in that state (or such amount
as established by state law).
5
The Interstate Act also authorizes banks to merge across state lines, thereby
creating interstate branching. All of the states in which Comerica's banking
subsidiaries are located allow interstate branching. Furthermore, under the
Interstate Act, a bank is now able to open new branches in a state in which it
does not already have banking operations if such state enacts a law permitting
such de novo branching.
Since the provision permitting interstate bank acquisitions became effective,
Comerica has had enhanced opportunities to acquire banks in any state subject to
approval by the appropriate federal and state regulatory agencies. Under the
Interstate Act, Comerica has the opportunity to consolidate its affiliate banks
to create one bank with branches in more than one state, or to establish
branches in different states, subject to any state "opt-in" and "opt-out"
provisions.
Dividends
Comerica is a legal entity separate and distinct from its banking and other
subsidiaries. Most of Comerica's revenues result from dividends its bank
subsidiaries pay it. There are statutory and regulatory requirements applicable
to the payment of dividends by subsidiary banks to Comerica as well as by
Comerica to its shareholders. Certain, but not all, of these requirements are
discussed below.
Each state bank subsidiary that is a member of the FRS and each national banking
association is required by federal law to obtain the prior approval of the FRB
or the OCC, as the case may be, for the declaration and payment of dividends, if
the total of all dividends declared by the board of directors of such bank in
any calendar year will exceed the total of (i) such bank's retained net income
(as defined and interpreted by regulation) for that year plus (ii) the retained
net income (as defined and interpreted by regulation) for the preceding two
years, less any required transfers to surplus or to fund the retirement of
preferred stock. Further, federal regulatory agencies can prohibit a banking
institution or bank holding company from engaging in unsafe and unsound business
practices and could prohibit the payment of dividends if such payment could be
deemed an unsafe and unsound banking practice. In addition, Comerica's state
bank subsidiaries are also subject to limitations under state law regarding the
amount of earnings that may be paid out as dividends, and require prior approval
for payments of dividends that exceed certain levels.
At January 1, 2002, Comerica's subsidiary banks, without obtaining prior
governmental approvals, could declare aggregate dividends of approximately $641
million from retained net profits of the preceding two years, plus an amount
approximately equal to the net profits (as measured under current regulations),
if any, earned for the period from January 1, 2002 through the date of
declaration. Comerica's subsidiary banks paid dividends of $580 million in 2001,
$339 million in 2000, and $261 million in 1999.
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Source of Strength
According to Federal Reserve Board policy, bank holding companies are expected
to act as a source of strength to each subsidiary bank and to commit resources
to support each subsidiary bank. This support may be required at times when a
bank holding company may not be able to provide such support. Similarly, under
the cross-guarantee provisions of the Federal Deposit Insurance Act, in the
event of a loss suffered or anticipated by the FDIC (either as a result of the
default of a banking or thrift subsidiary or related to FDIC assistance provided
to a subsidiary in danger of default) the other banking subsidiaries may be
assessed for the FDIC's loss, subject to certain exceptions.
FDICIA
FDICIA substantially revised the bank regulatory and funding provisions of the
Federal Deposit Insurance Act and made revisions to several other federal
banking statutes. Among other things, FDICIA requires the federal banking
agencies to take "prompt corrective action" in respect of depository
institutions that do not meet minimum capital requirements. FDICIA establishes
five capital tiers: "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" and "critically
undercapitalized." A depository institution's capital tier will depend upon
where its capital levels are in relation to various relevant capital measures,
which, among others, include a Tier 1 and total risk-based capital measure and a
leverage ratio capital measure, and certain other factors.
Regulations establishing the specific capital tiers provide that, for a
depository institution to be well capitalized it must have a total risk-based
capital ratio of at least 10 percent, a Tier 1 risk-based capital ratio of at
least 6 percent, a Tier 1 leverage ratio of at least 5 percent and not be
subject to any specific capital order or directive. For an institution to be
adequately capitalized it must have a total risk-based capital ratio of at least
8 percent, a Tier 1 risk-based capital ratio of at least 4 percent and a Tier 1
leverage ratio of at least 4 percent (and in some cases 3 percent). Under
certain circumstances, the appropriate banking agency may treat a well
capitalized, adequately capitalized or undercapitalized institution as if the
institution were in the next lower capital category. As of December 31, 2001,
each of the banking subsidiaries of Comerica were well capitalized under these
regulations.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to
limitations on growth and certain activities and are required to submit an
acceptable capital restoration plan. The federal banking agencies may not accept
a capital plan without determining, among other things, that the plan is based
on realistic assumptions and is likely to succeed in restoring the depository
institution's capital. In addition, for a capital restoration plan to be
acceptable, the depository institution's parent holding company must guarantee
for a specific time period that the institution will comply with such capital
restoration plan. The aggregate liability of the parent holding company under
the guaranty is limited to the lesser of (i) an amount equal to 5
7
percent of the depository institution's total assets at the time it became
undercapitalized, or (ii) the amount that is necessary (or would have been
necessary) to bring the institution into compliance with all capital standards
applicable with respect to such institution as of the time it fails to comply
with the plan. If a depository institution fails to submit or implement an
acceptable plan, it is treated as if it is significantly undercapitalized.
Significantly undercapitalized depository institutions are subject to a number
of requirements and restrictions. Specifically, such a depository institution
may be required to do one or more of the following: sell sufficient voting stock
to become adequately capitalized, reduce the interest rates it pays on deposits,
reduce its rate of asset growth, dismiss certain senior executive officers or
directors, and stop accepting deposits from correspondent banks. Critically
undercapitalized institutions are subject to the appointment of a receiver or
conservator or such other action as the FDIC and the applicable federal banking
agency shall determine appropriate.
Under FDICIA, the FDIC is permitted to provide financial assistance to an
insured bank before appointment of a conservator or receiver only if (i) such
assistance would be the least costly method of meeting the FDIC's insurance
obligations, (ii) grounds for appointment of a conservator or a receiver exist
or are likely to exist in the future, (iii) it is unlikely that the bank can
meet all capital standards without assistance and (iv) the bank's management has
been competent, has complied with applicable laws, regulations, rules and
supervisory directives and has not engaged in any insider dealing, speculative
practice or other abusive activity.
FDICIA also contains a variety of other provisions that may affect the
operations of depository institutions including reporting requirements,
regulatory standards for real estate lending, "truth in savings" provisions, the
requirement that a depository institution give 90 days prior notice to customers
and regulatory authorities before closing any branch and a prohibition on the
acceptance or renewal of brokered deposits by depository institutions that are
not well capitalized or are adequately capitalized and have not received a
waiver from the FDIC. Comerica's United States subsidiary banks are all
well-capitalized and may accept brokered deposits.
Capital Requirements
The FRB imposes, on Comerica, risk-based capital requirements and guidelines,
which are substantially similar to the capital requirements and guidelines
imposed by the FRB, the OCC and the FDIC on depository institutions under their
jurisdictions.
The FRB may set higher capital requirements for holding companies whose
circumstances warrant it. For example, holding companies experiencing internal
growth or making acquisitions are expected to maintain strong capital positions
substantially above the minimum supervisory levels, without significant reliance
on intangible assets. The FRB also considers a "tangible Tier 1 leverage ratio"
(deducting all intangibles) and other indications of capital strength in
evaluating proposals for expansion or new activities.
8
The FRB, FDIC and OCC rules require Comerica to incorporate market and interest
rate risk components into their risk-based capital standards. Under the market
risk requirements, capital is allocated to support the amount of market risk
related to a financial institution's ongoing trading activities.
As an additional means to identify problems in the financial management of
depository institutions, FDICIA requires federal bank regulatory agencies to
establish certain non-capital safety and soundness standards for institutions
for which they are the primary federal regulator. The standards relate generally
to operations and management, asset quality, interest rate exposure and
executive compensation. The agencies are authorized to take action against
institutions that fail to meet such standards.
FDIC Insurance Assessments
Comerica's subsidiary banks are subject to FDIC deposit insurance assessments.
The FDIC operates a risk-based deposit premium assessment system under which
each depository institution is placed in one of nine assessment categories based
on certain capital and supervisory measures. The deposit insurance assessment
schedule published by the FDIC for the assessment period commencing January 1,
1998, maintained the nine categories but provided for major reductions in the
assessment rates for institutions insured by BIF. These reductions occurred
because the balance in BIF had reached or surpassed the "designated reserve
ratio" set by law for the balance in the fund to maintain with respect to
BIF-insured deposits. The FDIC has continued these reduced assessment levels.
There is legislation pending in a committee in the House of Representatives to
change these assessment levels. It is uncertain if such legislation will be
enacted and, if enacted, the form of such legislation.
Enforcement Powers of Federal Banking Agencies
The FRB and other federal banking agencies have broad enforcement powers,
including the power to terminate deposit insurance, impose substantial fines and
other civil and criminal penalties and appoint a conservator or receiver.
Failure to comply with applicable laws, regulations and supervisory agreements
could subject Comerica or its banking subsidiaries, as well as officers and
directors of these organizations, to administrative sanctions and potentially
substantial civil penalties.
COMPETITION
Banking is a highly competitive business. The Michigan banking subsidiary of the
Corporation competes primarily with Detroit and outstate Michigan banks for
loans, deposits and trust accounts. Through its offices in Arizona, California,
Colorado, Connecticut, Florida, Georgia, Indiana, Illinois, Nevada, and Texas,
Comerica competes with other financial institutions for various types of loans.
9
At year-end 2001, Comerica was the largest financial holding company
headquartered in Michigan in terms of total assets and deposits. Based on the
Interstate Act as described above and the Gramm-Leach Bliley Act, Comerica
believes that the level of competition in all geographic markets will increase
in the future. Comerica's banking subsidiaries also face competition from other
financial intermediaries, including savings and loan associations, consumer
finance companies, leasing companies and credit unions.
EMPLOYEES
As of December 31, 2001, Comerica and its subsidiaries had 10,307 full-time and
1,485 part-time employees.
ITEM 2. PROPERTIES
The executive offices of the Corporation are located in the Comerica Tower at
Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226. Comerica and its
subsidiaries occupy 14 floors of the building, which is leased through Comerica
Bank from an unaffiliated third party. This lease extends through January 2007.
As of December 31, 2001, Comerica, through its banking affiliates, operates a
total of 496 banking branches, trust services locations, and loan production or
other financial services offices, in the States of Michigan, California, Texas
and Florida. Of these, 212 were owned and 284 were leased. Affiliates also
operate from leased spaces in Daphne, Alabama; Phoenix, Arizona; Denver
Colorado; Darien, Connecticut; Oakbrook Terrace, Chicago and Barrington,
Illinois; Indianapolis, Indiana; New Orleans, Louisiana; Boston, Massachusetts;
Minneapolis, Minnesota; Durham and Charlotte, North Carolina; Red Bank, New
Jersey; Las Vegas, Nevada; New York, New York; Beachwood, West Chester,
Cincinnati and Toledo, Ohio; Portland, Oregon; King of Prussia, Pennsylvania;
Knoxville and Memphis, Tennessee; Reston, Virginia; Bellevue, Kirkland and
Olympia, Washington; Sao Paulo, Brazil; Mexico City, Mexico; Queretaro, Mexico;
Monterey, Mexico; Wanchai, Hong Kong; and Toronto, Ontario, Canada.
The Corporation owns a check processing center in Livonia, Michigan; a ten-story
building in the central business district of Detroit that houses certain
departments of the Corporation and Comerica Bank; and a building in Auburn
Hills, Michigan, used mainly for lending functions and operations.
In 1983, Comerica entered into a sale/leaseback agreement with an unaffiliated
party covering an operations center which was built in Auburn Hills, Michigan,
and now is occupied by various departments of the Corporation and Comerica Bank.
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ITEM 3. LEGAL PROCEEDINGS
The Corporation and its subsidiaries are parties to litigation and claims
arising in the normal course of their activities. Although the amount of
ultimate liability, if any, with respect to such matters cannot be determined
with reasonable certainty, management, after consultation with legal counsel,
believes that the litigation and claims, some of which are substantial, will not
have a material adverse effect on the Corporation's consolidated financial
position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Corporation did not submit any matters for a shareholders' vote in the
fourth quarter of 2001.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The common stock of Comerica Incorporated is traded on the New York Stock
Exchange (NYSE Trading Symbol: CMA). At March 27, 2002, there were approximately
16,915 record holders of the Corporation's common stock.
Quarterly cash dividends were declared during 2001 and 2000, totaling $1.76 and
$1.60 per common share per year, respectively. The following table sets forth,
for the periods indicated, the high and low sale prices per share of the
Corporation's common stock as reported on the NYSE Composite Transactions Tape
for all quarters of 2001 and 2000.
- ---------------------------------------------------------------------
Dividend Dividend*
Quarter High Low Per Share Yield
- ---------------------------------------------------------------------
2001
Fourth $58.40 $44.02 $0.44 3.4%
Third 63.88 50.27 0.44 3.1
Second 62.75 50.73 0.44 3.1
First 65.15 53.00 0.44 3.0
2000
Fourth $61.13 $47.19 $0.40 3.0%
Third 59.44 45.00 0.40 3.1
Second 54.38 39.88 0.40 3.4
First 46.25 32.94 0.40 4.1
* Dividend yield is calculated by annualizing the quarterly dividend per
share and dividing by an average of the high and low price in the
quarter.
ITEM 6. SELECTED FINANCIAL DATA
The response to this item is included on page 23 of the Corporation's Annual
Report to Shareholders for the year ended December 31, 2001, which page is
hereby incorporated by reference.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The response to this item includes the discussion set forth below and the
information included under the caption "Financial Review and Report" on pages 23
through 41 of the Corporation's Annual Report to Shareholders for the year ended
December 31, 2001, which pages are hereby incorporated by reference.
CONTRACTUAL OBLIGATIONS AND CREDIT-RELATED COMMITMENTS
As disclosed in the footnotes to the Consolidated Financial Statements
incorporated by reference, the Corporation has certain obligations to make
future payments under contracts and credit-related financial instruments and
commitments. At December 31, 2001, aggregate contractual obligations and
credit-related commitments are summarized as follows:
(in millions)
PAYMENTS DUE BY PERIOD
----------------------------------------------
Less 1 - 3 3 - 5 After 5
Contractual obligations Total Than Years Years Years
1 Year
===========================================================================================================================
Medium- and long-term debt $5,402 $1,558 $ 780 $ 185 $ 2,879
Leases and other noncancellable obligations 540 70 126 89 255
- ---------------------------------------------------------------------------------------------------------------------------
Total contractual cash obligations $5,942 $1,628 $ 906 274 3,134
REMAINING MATURITY OF CREDIT-RELATED
COMMITMENTS
--------------------------------------------------------------
Credit-related commitments Less 1 - 3 3 - 5 After 5
Total Than Years Years Years
1 Year
===========================================================================================================================
Unused commitments to extend credit $28,695 $17,93 $7,244 3,300 $215
6
Standby letters of credit and financial guarantees 5,118 3,556 916 506 140
Commercial letters of credit 258 258 - - -
Credit default swaps 7 - 7 - -
- ---------------------------------------------------------------------------------------------------------------------------
Total credit-related commitments $34,078 21,750 8,167 3,806 355
===========================================================================================================================
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The response to this item is included on pages 37 through 41 of the
Corporation's Annual Report to Shareholders for the year ended December 31,
2001, which pages are hereby incorporated by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to this item is included on pages 42 through 71 of the
Corporation's Annual Report to Shareholders for the year ended December 31,
2001, which pages are hereby incorporated by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The response to this item will be included under the sections captioned
"Information About Nominees and Incumbent Directors," "Executive Officers" and
"Section 16(a) Beneficial Ownership Reporting Compliance" of the Corporation's
definitive Proxy Statement relating to the Annual Meeting of Shareholders to be
held on May 21, 2002, which sections are hereby incorporated by reference.
ITEM 11. EXECUTIVE COMPENSATION
The response to this item will be included under the sections captioned
"Compensation of Directors" and "Compensation of Executive Officers" of the
Corporation's definitive Proxy Statement relating to the Annual Meeting of
Shareholders to be held on May 21, 2002, which sections are hereby incorporated
by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The response to this item will be included under the sections captioned
"Security Ownership of Certain Beneficial Owners" and "Security Ownership of
Management" of the Corporation's definitive Proxy Statement relating to the
Annual Meeting of Shareholders to be held on May 21, 2002, which sections are
hereby incorporated by reference.
14
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The response to this item will be included under the sections captioned
"Transactions of Directors and Executive Officers with Comerica" and
"Information about Nominees and Incumbent Directors" of the Corporation's
definitive Proxy Statement relating to the Annual Meeting of Shareholders to be
held on May 21, 2002, which sections are hereby incorporated by reference.
15
Comerica Incorporated and Subsidiaries
FORM 10-K CROSS-REFERENCE INDEX
Certain information required to be included in this Form 10-K is included in the
2001 Annual Report to Shareholders or in the 2002 Proxy Statement used in
connection with the 2002 annual meeting of shareholders to be held on May 21,
2002.
The following cross-reference index shows the page location in the 2001 Annual
Report or the section of the 2002 Proxy Statement of only that information which
is to be incorporated by reference into this Form 10-K.
All other sections of the 2001 Annual Report or the 2002 Proxy Statement are not
required in this Form 10-K and are not to be considered a part of this Form
10-K.
Page Number of 2001
Annual Report or Section
of 2002 Proxy Statement
PART I
ITEM 1. Business................................................................................Included herein
ITEM 2. Properties..............................................................................Included herein
ITEM 3. Legal Proceedings.......................................................................Included herein
ITEM 4. Submission of Matters to a Vote of Security Holders -- The Corporation did not submit any matters for the
shareholders' vote in the fourth quarter of 2001.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Security Holder Matters...............Included herein
ITEM 6. Selected Financial Data..............................................................................23
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.............23-41
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk........................................37-41
ITEM 8. Financial Statements and Supplementary Data:
Comerica Incorporated and Subsidiaries
Consolidated Balance Sheets....................................................................42
Consolidated Statements of Income..............................................................43
Consolidated Statements of Changes in Shareholders' Equity.....................................44
Consolidated Statements of Cash Flows..........................................................45
Notes to Consolidated Financial Statements .................................................. 46-67
Report of Management.................................................................................68
Report of Independent Auditors.......................................................................68
Statistical Disclosure by Bank Holding Companies:
Analysis of Net Interest Income - Fully Taxable Equivalent ..........................................25
Rate-Volume Analysis - Fully Taxable Equivalent......................................................26
Analysis of the Allowance for Credit Losses..........................................................28
Analysis of Investment Securities and Loans..........................................................32
Loan Maturities and Interest Rate Sensitivity........................................................33
Allocation of the Allowance for Credit Losses........................................................33
Mexican Cross-Border Risk............................................................................33
Analysis of Investment Securities Portfolio - Fully Taxable Equivalent...............................34
Summary of Nonperforming Assets and Past Due Loans...................................................36
Schedule of Rate Sensitive Assets and Liabilities ...................................................38
Remaining Expected Maturity of Risk Management Interest Rate Swaps ..................................39
Deposits - Maturity Distribution of Domestic Certificates of Deposit of $100,000 and Over...........50
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure - None.
PART III
ITEM 10. Directors and Executive Officers of the Registrant.............Information About Nominees and Incumbent
16
Directors, Executive Officers of the Corporation
and Section 16(a) Beneficial Ownership Reporting
Compliance
ITEM 11. Executive Compensation.................Compensation of Directors and Compensation of Executive Officers
ITEM 12. Security Ownership of Certain Beneficial Owners and Management............Security Ownership of Certain
Beneficial Owners and Security
Ownership of Management
ITEM 13. Certain Relationships and Related Transactions............................Transactions of Directors and
Executive Officers with Comerica
and Information about Nominees
and Incumbent Directors
17
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
1. Financial Statements: The financial statements that are
filed as part of this report are listed under Item 8 in
the Form 10-K Cross-Reference Index on page 12.
2. All of the schedules for which provision is made in the
applicable accounting regulations of the Securities and
Exchange Commission are either not required under the
related instruction, the required information is contained
elsewhere in the Form 10-K, or the schedules are
inapplicable and therefore have been omitted.
Exhibits:
Exhibit Document Number*
3.1(a) Restated Certificate of Incorporation of Comerica
Incorporated, as amended(1)
3.1(b) Certificate of Amendment to Restated Certificate of
Incorporation of Comerica Incorporated(2)
3.2 Amended and restated bylaws of Comerica Incorporated
(3)
4 Rights Agreement between Comerica Incorporated and
Comerica Bank(4)
10.1+ Comerica Incorporated Amended and Restated 1997
Long-Term Incentive Plan (restated 2001)
10.2+ Comerica Incorporated Amended and Restated
Management Incentive Plan (restated 2001)
10.3+ Comerica Incorporated Director Fee Deferral Plan(5)
10.4+ Benefit Equalization Plan for Employees of Comerica
Incorporated(5)
10.5+ Comerica Incorporated's Retirement Plan for
Non-Employee Directors(6)
10.6+ Manufacturers National Corporation's 1987 and 1989
Stock Option Plans for Key Employees(6)
10.7+ Manufacturers National Corporation's Executive
Incentive Plan(6)
10.8+ Manufacturers National Corporation's Key Employee
Retention Plan(6)
10.9+ Form of Employment Agreement (Exec. Off.)(7)
10.10+ Form of Director Indemnification Agreement between
Comerica Incorporated and its directors(4)
10.11+ Employment Continuation Agreement with Eugene A.
Miller(6)
10.12+ Employment Agreement with Ralph W. Babb, Jr. (8)
10.13+ Supplemental Pension and Retiree Medical Agreement
with Ralph W.
18
Babb, Jr.(9)
10.14+ Comerica Incorporated Deferred Compensation Plan,
1997 Amendment and Restatement(4)
10.17+ Form of Comerica Incorporated Senior Officer
Severance Plan between registrant and listed
officers, January 1, 1997(4)
10.18+ 1999 Comerica Incorporated Deferred Compensation
Plan, January 1, 1999 (3)
10.19+ 1999 Comerica Incorporated Deferred 3 Year ROE Award
Plan, January 1, 1999 (3)
10.20+ Amended and Restated Comerica Incorporated Stock
Option Plan For Non-Employee Directors, January 20,
2000 (3)
10.21+ Comerica Incorporated 1999 Discretionary Director
Fee Deferral Plan May 21, 1999 (3)
10.22+ Comerica Incorporated 1999 Common Stock Director Fee
Deferral Plan May 21, 1999 (3)
10.23+ 1986 Imperial Bancorp Stock Option Plan (as amended)
11 Statement regarding Computation of Per Share
Earnings(10)
13 Incorporated Sections of Registrant's 2001 Annual
Report to Shareholders
21 Subsidiaries of Registrant
23(a) Consent of Ernst & Young LLP
23(b) Consent of KPMG LLP
99.1 Independent Auditors' Report of KPMG LLP
19
- ---------------------------------------
(1) Filed as Exhibit 3.1 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996, and
incorporated herein by reference.
(2) Filed as Exhibit 3.1 to Registrant's Registrant Statement
on Form S-4, No. 333-51042.
(3) Filed as the same exhibit number to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1999,
and incorporated herein by reference.
(4) Filed as Exhibit 4 to Registrant's Current Report on Form
8-K dated June 18, 1996, regarding the Registrant's
Rights Agreement with Comerica Bank, and incorporated
herein by reference.
(5) Filed as the same exhibit number to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1996,
and incorporated herein by reference.
(6) Filed as the same exhibit number to the Registrant's
Annual Report on Form 10-K for the year ended December
31, 1992 and incorporated herein by reference.
(7) Filed as Exhibit 10.9 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1997 --
Commission File Number 1-10706 and incorporated herein by
reference.
(8) Filed as Exhibit 10.1 to Registrant's Form 10-Q for the
quarter ended June 30, 1998 and incorporated herein by
reference.
(9) Filed as Exhibit 10.2 to Registrant's Form 10-Q for the
quarter ended June 30, 1998 and incorporated herein by
reference.
(10) Incorporated by reference from Note 13 on page 53 of
Registrant's 2001 Annual Report to Shareholders
attached hereto as Exhibit 13.
+ Management compensation plan.
(b) The Corporation did not file any Current Reports on Form 8-K
during the fourth quarter of 2001.
20
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized in the City of Detroit,
State of Michigan on the 26th day of March, 2002.
COMERICA INCORPORATED
/s/ Eugene A. Miller
- -----------------------------------------------------
Eugene A. Miller
Chairman
/s/ Ralph W. Babb, Jr.
- -----------------------------------------------------
Ralph W. Babb, Jr.
President and Chief Executive Officer
Chief Financial Officer
/s/ Marvin J. Elenbaas
- -----------------------------------------------------
Marvin J. Elenbaas
Senior Vice President and Controller
(Chief Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons in the capacities indicated on the 26th
day of March, 2002.
BY DIRECTORS
/s/ Ralph W. Babb, Jr.
- -----------------------------------------------------
Ralph W. Babb, Jr.
/s/ Lillian Bauder
- -----------------------------------------------------
Lillian Bauder
/s/ Joseph J. Buttigieg, III
- -----------------------------------------------------
Joseph J. Buttigieg, III
/s/ James F. Cordes
- -----------------------------------------------------
James F. Cordes
/s/ Peter D. Cummings
- -----------------------------------------------------
Peter D. Cummings
/s/ J. Philip DiNapoli
- -----------------------------------------------------
J. Philip DiNapoli
21
/s/ Anthony F. Earley, Jr.
- -----------------------------------------------------
Anthony F. Earley, Jr.
/s/ Max M. Fisher
- -----------------------------------------------------
Max M. Fisher
- -----------------------------------------------------
Roger Fridholm
/s/ Todd W. Herrick
- -----------------------------------------------------
Todd W. Herrick
/s/ David Baker Lewis
- -----------------------------------------------------
David Baker Lewis
/s/ John D. Lewis
- -----------------------------------------------------
John D. Lewis
/s/ Wayne B. Lyon
- -----------------------------------------------------
Wayne B. Lyon
/s/ Eugene A. Miller
- -----------------------------------------------------
Eugene A. Miller
/s/ Alfred A. Piergallini
- -----------------------------------------------------
Alfred A. Piergallini
/s/ John W. Porter
- -----------------------------------------------------
John W. Porter
- -----------------------------------------------------
Howard F. Sims
/s/ Robert S. Taubman
- -----------------------------------------------------
Robert S. Taubman
/s/ William P. Vititoe
- -----------------------------------------------------
William P. Vititoe
/s/ Martin D. Walker
- -----------------------------------------------------
Martin D. Walker
/s/ Patricia M. Wallington
- -----------------------------------------------------
Patricia M. Wallington
/s/ Gail L. Warden
- -----------------------------------------------------
Gail L. Warden
22
/s/ Kenneth L. Way
- -----------------------------------------------------
Kenneth L. Way
23
Exhibit Index
Exhibit Exhibit
Number Description
- ------ -----------
10.1 Comerica Incorporated Amended and Restated 1997
Long-Term Incentive Plan (restated 2001)
10.2 Comerica Incorporated Amended and Restated Management
Incentive Plan (restated 2001)
10.23 1986 Imperial Bancorp Stock Option Plan (as amended)
13 Incorporated Sections of Registrant's 2001 Annual Report
to Shareholders
21 Subsidiaries of Registrant
23(a) Consent of Ernst & Young LLP
23(b) Consent of KPMG LLP
99.1 Independent Auditors' Report of KPMG LLP