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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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, 1997.
Commission file number 1-10706
Comerica Incorporated
Comerica Tower at Detroit Center
500 Woodward Avenue
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
- - Preferred Stock Series E, $50.00 liquidation preference per share
These securities are registered on the New York Stock Exchange.
Securities registered pursuant to Section 12(g) of the Act:
- - 10 1/8 percent Subordinated
Debentures due in 1998
- - 9 3/4 percent Subordinated
Notes due 1999
- - 7 1/4 percent Subordinated
Notes due in 2007
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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.
Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, nor will it be contained in the definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K as.
At March 23, 1998, the registrant's common stock, $5 par value, held by
nonaffiliates had an aggregate market value of $10,516,786,140 based on the
closing price on the New York Stock Exchange on that date of $105.00 per share
and 100,159,868 shares of common stock held by nonaffiliates. For purposes of
this Form 10-K only, it has been assumed that all common shares held by the
Trust Department of Comerica for Comerica's employee plans and by the
registrant's directors and executive officers are held by affiliates.
At March 23, 1997, the registrant had outstanding 104,838,086 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, 1997.
2. Part III:
Items 10-13--Proxy Statement for the Annual Meeting of Shareholders to be held
May 15, 1998.
PART I
ITEM 1. BUSINESS
GENERAL
Comerica Incorporated ("Comerica" or the "Corporation") is a registered bank
holding company incorporated under the laws of the State of Delaware,
headquartered in Detroit, Michigan. Based on assets as of December 31, 1997, it
was the 25th 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, Comerica formed
Comerica Bank-Mexico, S.A. As of December 31, 1997, Comerica owned directly or
indirectly all the outstanding common stock of six banking and thirty-two
non-banking subsidiaries. At December 31, 1997, Comerica had total assets of
approximately $36.3 billion, total deposits of approximately $22.6 billion,
total loans (net of unearned income) of approximately $28.9 billion and common
shareholders' equity of approximately $2.5 billion.
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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 and international financial services. 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 $5 million) and private banking. This line of business offers a variety of
consumer products, including deposit accounts, direct and indirect installment
loans, credit cards, 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.
The core businesses are tailored to each of Comerica's four primary geographic
markets: Michigan, Texas, California and Florida.
Phase III of Direction 2000
In 1996, Comerica finalized the design of Direction 2000, the strategic effort
to prepare the organization for the new millennium. Following Comerica's 1995
organization of its business units into the Business, Individual and Investment
Banks, and the subsequent alignment and consolidation of back-office areas,
Comerica in 1996 identified which business lines it believed were best managed
on a local basis and a national basis, and realigned its support functions to
optimally link them to business strategies and corporate objectives. In the
third and final phase of this effort, Comerica employees systematically reviewed
all functions of the organization. Their objectives were to determine first, if
the work was absolutely necessary, and second, if they were doing the work in
the most efficient way possible. Comerica's goal was to improve customer
service, increase efficiency, enhance revenue and position Comerica to achieve
its financial objectives. Comerica employees identified myriad ways to serve
customers better, including simplifying the referral and delivery of its
services, empowering colleagues with additional authority and reducing their
clerical responsibilities. In addition to reducing overhead costs and enhancing
revenues, the results of Phase III are expected to support future investments in
growth businesses, geographic expansion, marketing, technology and talent.
By the end of the fourth quarter of 1997, Comerica had implemented approximately
eighty percent of Phase III of Direction 2000. Comerica expects Phase III of
Direction 2000, when fully implemented by the first quarter of 1998, to reduce
overhead costs and increase revenues on an
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annualized pre-tax basis by $110 million. The full annual effect of the Phase
III implementation will not be realized until 1999. Several factors, however,
such as an economic downturn, changes in monetary or governmental policies or
changes in interest rates could cause the actual results to differ materially
from these forward-looking projections.
Shareholder Value
On January 15, 1998, the board of directors of Comerica declared a three-for-two
split of Comerica's common stock to be effected in the form of a 50% stock
dividend payable on April 1, 1998. The Board of Directors has authorized the
repurchase of up to 27 million shares (or 40.5 million shares on a post-split
basis) of Comerica's common stock for general corporate purposes, acquisitions
and employee benefit plans. At December 31, 1997, Comerica had repurchased 12.2
million shares (or 18.3 million shares on a post-split basis) under this
program, reflecting its commitment to optimize its capital position and focus on
shareholder value. The share repurchase activity is beneficial to shareholders
who sell their shares by providing additional liquidity to the marketplace and
allowing for the efficient redistribution of ownership. For shareholders who
remain, the repurchase activity leverages ownership through a smaller base of
common shares over which earnings are spread.
SUPERVISION AND REGULATION
Banks, bank holding companies and financial institutions are highly regulated at
both the state and federal level. As a bank holding company, 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"). Under the Act, the
Corporation is prohibited from engaging in activities other than those of
banking or of managing or controlling banks or from acquiring or retaining
direct or indirect ownership or control of voting shares of any company which is
not a bank or bank holding company unless the activities engaged in by the
Corporation or the company whose voting shares are acquired by the Corporation
are activities which, generally, the FRB determines to be so closely related to
the business of banking as to be a proper incident thereto.
Comerica Bank is chartered by the State of Michigan and is supervised and
regulated by the Financial Institutions Bureau of the State of Michigan.
Comerica Bank-Texas is chartered by the State of Texas and is supervised and
regulated by the Texas Department of Banking. Comerica Bank-Midwest, N.A. and
Comerica Bank-Ann Arbor, N.A. are 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 State Banking Department. Comerica
Bank & Trust, FSB is chartered under federal law and subject to supervision and
regulation by the Office of Thrift Supervision. Comerica Bank, Comerica Bank-Ann
Arbor, N.A. and Comerica Bank-Midwest, N.A. are members of the Federal Reserve
System ("FRS"). 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. State member
banks are also regulated by the FRB and state non-member banks are also
regulated by the Federal Deposit Insurance Corporation ("FDIC"). The deposits of
all the banks are insured by the Bank Insurance Fund ("BIF") of the FDIC
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to the extent provided by law, except that the deposits of Comerica Bank &
Trust, FSB are insured by the FDIC's Savings Association Insurance Fund (SAIF).
The FRB supervises non-banking activities conducted by companies owned by
Comerica and Comerica Bank and the OCC supervises non-banking activities
conducted by companies owned by Comerica Bank-Ann-Arbor, N.A. 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 the Department of Insurance of the State of Michigan (in the case of
Comerica Insurance, Inc.).
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, beginning September 29, 1995, 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 or following the proposed acquisition, controls
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).
The Interstate Act also authorizes banks to merge across state lines, thereby
creating interstate branching. This provision, which was effective June 1, 1997,
allowed each state, prior to the effective date, the opportunity to opt out of
this provision, thereby prohibiting interstate branching in that state. Of those
states in which Comerica's banking subsidiaries are located, only Texas has
elected to "opt out" of the interstate branching provisions. The Texas "opt-out"
expires in September 1999. 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
(other than Comerica Bank-Texas, which is subject to the Texas "opt out"
provisions) 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.
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Dividends
Comerica is a legal entity separate and distinct from its banking and other
subsidiaries. Most of Comerica's revenues result from dividends paid to it by
its bank subsidiaries. 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.
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 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. In addition, these banks may only pay
dividends to the extent that retained net profits (including the portion
transferred to surplus) exceed bad debts (as defined by regulation). 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 that
are not members of the FRS are also subject to limitations under state law
regarding the amount of earnings that may be paid out as dividends. Comerica
Bank & Trust, FSB is subject to limitations under federal law regarding the
payment of dividends.
At January 1, 1998, Comerica's subsidiary banks, without obtaining prior
governmental approvals, could declare aggregate dividends of approximately $361
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, 1998 through the date of
declaration. Comerica's subsidiary banks paid dividends of $354 million in 1997,
$322 million in 1996 and $184 million in 1995.
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) one of 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,
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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 an
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, 1997, each of the banking subsidiaries of
Comerica were considered to be well capitalized.
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 percent of the
depository institution's total assets at the time it became undercapitalized,
and (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, including orders to sell sufficient voting
stock to become adequately capitalized, requirements to reduce total assets,
restrictions on interest rates, deposits and asset growth and orders to improve
management cessation of receipt of deposits from correspondent banks. Critically
undercapitalized institutions are subject to the appointment of a receiver or
conservator.
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
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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 new 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. Under regulations relating to the brokered deposit
prohibition, Comerica's United States subsidiary banks are all well-capitalized
and may accept brokered deposits without restriction.
FDIC Insurance Assessments
Comerica's subsidiary banks are subject to FDIC deposit insurance assessments.
On January 1, 1994, a permanent risk-based deposit premium assessment system
became effective 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 has 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. For similar reasons, SAIF has reduced the assessment
rates for institutions insured by SAIF. As a result of these reduced rates,
highly-rated banks (including Comerica's banking subsidiaries) have experienced
significant reductions in deposit insurance costs.
The Corporation's FDIC expenses decreased significantly by $5 million, or 63
percent, in 1997, primarily due to a one time $5 million OAKAR deposit charge in
1996. The new rate schedule, which continues to determine assessments based on a
bank's risk-based capital levels, virtually eliminated each subsidiary bank's
BIF annual deposit insurance premium. As of the beginning of 1997, each
subsidiary bank's deposit insurance assessment rate is predicated upon the level
of insurance premiums necessary to maintain bank insurance fund ratio at a level
of 1.25 percent of insured deposits, plus an amount equal to interest due on the
Financing Corporation bonds issued during the savings and loan crisis. In 1998,
deposit insurance expense will approximate $3 million based on current deposit
levels and current deposit assessment rates.
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
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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, Florida, Indiana, Illinois, Nevada, Ohio and Texas, Comerica competes
with other financial institutions for various types of loans. Through its
Florida subsidiary, Comerica competes with many companies, including financial
institutions, for trust business.
At year-end 1997, Comerica was the largest bank holding company headquartered in
Michigan in terms of total assets and deposits. Based on the Interstate Act as
described above, the Corporation 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, 1997, Comerica and its subsidiaries had 8,834 full-time and
2,043 part-time employees.
ITEM 2. PROPERTIES
The executive offices of the Corporation are located in the Comerica Tower at
Detroit Center, 500 Woodward Ave., Detroit, Michigan 48226. Comerica and its
subsidiaries occupy 15 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, 1997, Comerica Bank operated 271 offices within the State of
Michigan, of which 208 were owned and 63 were leased. Four other banking
affiliates operate 97 offices in California, Florida, and Texas. The affiliates
own 33 of their offices and lease 64 offices. One banking affiliate also
operates from leased space in Toledo, Ohio.
The Corporation owns an operations and 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 consumer lending functions.
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 materially adverse effect on the Corporation's consolidated financial
position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to shareholders in the fourth quarter of 1997.
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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 23, 1998, there were approximately
16,434 holders of the Corporation's common stock. On January 15, 1998, the board
of directors of Comerica declared a three-for-two stock split of the
Corporation's common stock to be effected in the form of a 50% stock dividend
payable on April 1, 1998. The stock prices and dividend information contained in
this table have been adjusted to give effect to the stock split.
Quarterly cash dividends were declared during 1997 and 1996, totaling $1.16 and
$1.01 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 1997 and 1996.
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Dividend Dividend*
Quarter High Low Per Share Yield
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1997
Fourth $ 61.875 $ 50.167 $ 0.29 2.1%
Third 53.250 45.042 0.29 2.4
Second 46.750 35.917 0.29 2.8
First 42.083 34.167 0.29 3.0
1996
Fourth $ 39.583 $ 33.500 $ 0.26 2.8%
Third 36.000 26.750 0.26 3.3
Second 29.917 26.833 0.26 3.7
First 27.917 24.166 0.23 3.5
* 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 19 of the Corporation's Annual
Report to Shareholders for the year ended December 31, 1997, which page is
hereby incorporated by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The response to this item is included under the caption "Financial Review and
Report" on pages 20
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through 33 of the Corporation's Annual Report to Shareholders for the year ended
December 31, 1997, which pages are hereby incorporated by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The response to this item is included on pages 33 through 36 of the
Corporation's Annual Report to Shareholders for the year ended December 31,
1997, which pages are hereby incorporated by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to this item is included on pages 37 through 65 of the
Corporation's Annual Report to Shareholders for the year ended December 31,
1997, 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
"Election of Directors" and "Executive Officers of the Corporation" of the
Corporation's definitive Proxy Statement relating to the Annual Meeting of
Shareholders to be held on May 15, 1998, 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 15, 1998, 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 15, 1998, which are hereby
incorporated by reference.
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 the Corporation" and
"Election of Directors - 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 15, 1998, which sections are hereby incorporated
by reference.
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Comerica Incorporated and Subsidiaries
FORM 10-K CROSS-REFERENCE INDEX
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Certain information required to be included in this Form 10-K is included in the
1997 Annual Report to Shareholders or in the 1998 Proxy Statement used in
connection with the 1998 annual meeting of shareholders to be held on May 15,
1998.
The following cross-reference index shows the page location in the 1997 Annual
Report or the section of the 1998 Proxy Statement of only that information which
is to be incorporated by reference into this Form 10-K.
All other sections of the 1997 Annual Report or the 1998 Proxy Statement are not
required in this Form 10-K and should not be considered a part
thereof.
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Page Number of 1997
Annual Report or Section
of 1998 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 -- no matters were
voted upon by security holders in the fourth quarter of 1997.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Security Holder Matters...........Included herein
ITEM 6. Selected Financial Data..........................................................................19
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations...............................................................................20-36
ITEM 8. Financial Statements and Supplementary Data:
Comerica Incorporated and Subsidiaries
Consolidated Balance Sheets..................................................................37
Consolidated Statements of Income............................................................38
Consolidated Statements of Changes in Shareholders' Equity...................................39
Consolidated Statements of Cash Flows........................................................40
Notes to Consolidated Financial Statements.......................................................41
Report of Management.............................................................................60
Report of Independent Auditors...................................................................60
Statistical Disclosure by Bank Holding Companies:
Analysis of Net Interest Income - Fully Taxable Equivalent ......................................21
Rate-Volume Analysis - Fully Taxable Equivalent..................................................22
Analysis of the Allowance for Loan Losses........................................................24
Analysis of Investment Securities and Loans......................................................28
Allocation of the Allowance for Loan Losses......................................................29
Loan Maturities and Interest Rate Sensitivity....................................................29
Mexican Cross-Border Risk........................................................................29
Maturity Distribution of Domestic Certificates of Deposit of $100,000 and Over..................30
Analysis of Investment Securities Portfolio - Fully Taxable Equivalent...........................31
Summary of Nonperforming Assets and Past Due Loans...............................................31
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........................Election of Directors and
Executive Officers of the Corporation
ITEM 11. Executive Compensation...............................................Compensation of Directors and
Compensation of Executive Officers
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14
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 the Corporation and
Election of Directors- Information about
Nominees and Incumbent Directors.
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 13.
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 Restated Certificate of Incorporation of Comerica
Incorporated, as amended**
3.2 Amended and restated bylaws of Comerica
Incorporated**
4 Rights Agreement between Comerica Incorporated and
Comerica Bank***
10.1+ Comerica Incorporated 1997 Long-Term Incentive Plan**
10.2+ Comerica Incorporated Management Incentive
Plan, 1997**
10.3+ Comerica Incorporated Director Fee Deferral Plan**
10.4+ Benefit Equalization Plan for Employees of
Comerica Incorporated**
10.5+ Comerica Incorporated's Directors Retirement Plan****
14
15
10.6+ Manufacturers National Corporation's 1987 and 1989
Stock Option Plans for Key Employees****
10.7+ Manufacturers National Corporation's Executive
Incentive Plan****
10.8+ Manufacturers National Corporation's Key Employee
Retention Plan****
10.9+ Form of Employment Agreement (Exec. Off)
10.10+ Form of Director Indemnification Agreement between
Comerica Incorporated and its directors**
10.11+ Employment Continuation Agreement with
Eugene A. Miller****
10.12+ Severance Agreement with Michael T. Monahan ******
10.13+ Management Continuation Agreement with
Ralph W. Babb Jr.******
10.14+ Employment Agreement with Ralph W. Babb Jr.******
10.15+ Comerica Incorporated Deferred Compensation Plan,
1997 Amendment and Restatement**
10.17+ Form of Comerica Incorporated Senior Officer
Severance Plan between registrant and listed
officers, January 1, 1997**
11 Statement regarding Computation of Per Share
Earnings*****
13 Required portions of Registrant's 1997 Annual
Report to Shareholders
21 Subsidiaries of the Corporation
23 Consent of Ernst & Young LLP
27.1 1997 Financial Data Schedule (EDGAR version only)
27.2 1997 Restated Quarterly Financial Data Schedules
(EDGAR version only)
27.3 1996 Financial Data Schedules (EDGAR version only)
27.4 1995 Financial Data Schedules (EDGAR version only)
(b) No reports on Form 8-K were filed by the Corporation
during the last quarter of 1997.
** 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.
*** A report was filed on Form 8-K dated June 18, 1996,
regarding the Registrant's Rights Agreement with
Comerica Bank.
**** Incorporated by reference from Registrant's Annual
Report on Form 10-K for the year ended December 31,
1992 -- Commission File Number 0-7269.
***** Incorporated by reference from Note 11 on page 47 of
Registrant's Annual Report to Shareholders attached
hereto as Exhibit 13.
****** Incorporated by reference from Registrant's Annual
Report on Form 10-K for the year ended December 31,
1995--Commission File Number 1-10706.
+ Management compensation plan.
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16
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 20th day of March, 1998.
COMERICA INCORPORATED
/s/ Eugene A. Miller
- -----------------------------------------------------
Eugene A. Miller
Chairman and Chief Executive Officer
/s/ Ralph W. Babb Jr.
- -----------------------------------------------------
Ralph W. Babb Jr.
Executive Vice President and 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 March
20, 1998.
BY DIRECTORS
/s/ E. Paul Casey
- -----------------------------------------------------
E. Paul Casey
/s/ James F. Cordes
- -----------------------------------------------------
James F. Cordes
/s/ J. Philip DiNapoli
- -----------------------------------------------------
J. Philip DiNapoli
/s/ Max M. Fisher
- -----------------------------------------------------
Max M. Fisher
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17
/s/ John D. Lewis
- -----------------------------------------------------
John D. Lewis
/s/ Patricia Shontz Longe
- -----------------------------------------------------
Patricia Shontz Longe, Ph.D.
/s/ Wayne B. Lyon
- -----------------------------------------------------
Wayne B. Lyon
/s/ Gerald V. MacDonald
- -----------------------------------------------------
Gerald V. MacDonald
/s/ Eugene A. Miller
- -----------------------------------------------------
Eugene A. Miller
/s/ Michael T. Monahan
- -----------------------------------------------------
Michael T. Monahan
/s/ Alfred A. Piergallini
- -----------------------------------------------------
Alfred A. Piergallini
/s/ Howard F. Sims
- -----------------------------------------------------
Howard F. Sims
/s/ Martin D. Walker
- -----------------------------------------------------
Martin D. Walker
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18
Exhibit Index
-------------
Exhibit
No. Description
- ------- -----------
10.9 Employment Agreement (Exec. Off)
13 Required portions of Registrant's 1997 Annual
Report to Shareholders
21 Subsidiaries of Registrant
23 Consent of Independent Auditors
27.1 1997 Financial Data Schedule (EDGAR version only)
27.2 1997 Restated Quarterly Financial Data Schedules (EDGAR
version only)
27.3 1996 Restated Financial Data Schedules (EDGAR version only)
27.4 1995 Restated Financial Data Schedules (EDGAR version only)