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| 8-K - 8-K - COMERICA INC /NEW/ | mayjune2014investorpresent.htm |
Comerica Incorporated May & June 2014Investor Presentation 2 Safe Harbor Statement Any statements in this presentation that are not historical facts are forward-looking statements as defined in the Private Securities LitigationReform Act of 1995. Words such as “anticipates,” “believes,” “contemplates,” “feels,” “expects,” “estimates,” “seeks,” “strives,” “plans,” “intends,”“outlook,” “forecast,” “position,” “target,” “mission,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “opportunity,” “initiative,”“outcome,” “continue,” “remain,” “maintain,” “on course,” “trend,” “objective,” “looks forward,” “projects,” “models” and variations of such words andsimilar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, as theyrelate to Comerica or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated onthe beliefs and assumptions of Comerica's management based on information known to Comerica's management as of the date of thispresentation and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives ofComerica's management for future or past operations, products or services, and forecasts of Comerica's revenue, earnings or other measures ofeconomic performance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability.Such statements reflect the view of Comerica's management as of this date with respect to future events and are subject to risks anduncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Comerica's actual resultscould differ materially from those discussed. Factors that could cause or contribute to such differences are changes in general economic, politicalor industry conditions; changes in monetary and fiscal policies, including changes in interest rates; volatility and disruptions in global capital andcredit markets; changes in Comerica's credit rating; the interdependence of financial service companies; changes in regulation or oversight;unfavorable developments concerning credit quality; the effects of more stringent capital or liquidity requirements; declines or other changes in thebusinesses or industries of Comerica's customers; operational difficulties, failure of technology infrastructure or information security incidents; theimplementation of Comerica's strategies and business initiatives; Comerica's ability to utilize technology to efficiently and effectively develop,market and deliver new products and services; changes in the financial markets, including fluctuations in interest rates and their impact on depositpricing; competitive product and pricing pressures among financial institutions within Comerica's markets; changes in customer behavior; anyfuture strategic acquisitions or divestitures; management's ability to maintain and expand customer relationships; management's ability to retainkey officers and employees; the impact of legal and regulatory proceedings or determinations; the effectiveness of methods of reducing riskexposures; the effects of terrorist activities and other hostilities; the effects of catastrophic events including, but not limited to, hurricanes,tornadoes, earthquakes, fires and floods; changes in accounting standards and the critical nature of Comerica's accounting policies. Comericacautions that the foregoing list of factors is not exclusive. For discussion of factors that may cause actual results to differ from expectations, pleaserefer to our filings with the Securities and Exchange Commission. In particular, please refer to “Item 1A. Risk Factors” beginning on page 12 ofComerica's Annual Report on Form 10-K for the year ended December 31, 2013. Forward-looking statements speak only as of the date they aremade. Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur afterthe date the forward-looking statements are made. For any forward-looking statements made in this presentation or in any documents, Comericaclaims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
3 Comerica: A Brief Overview At 3/31/14 ● 1Source: SNL Financial. At 12/31/13 ● 2See Supplemental Financial Data slides for reconciliation of non-GAAP financial measures. Estimated ratios based on the standardized approach in the final rule and excluding most elements of accumulated other comprehensive income (AOCI) Loans by Business Line(1Q14 Average) Wealth Management$4.8B11% Business Bank$34.9B77% Retail Bank$5.4B12% California$14.8B33% Texas$10.4B23% Michigan$13.5B30% Other Markets$6.4B14% Loans by Geography(1Q14 Average) 22nd largest U.S. financial holding company1 $66 billion in assets Strong presence in Texas, California, and Michigan Three primary lines of business: Business Bank, Retail Bank, and Wealth Management Founded 164 years ago Strong capital position • Estimated Basel III Tier 1 common capital ratio2: 10.3% 4 Well Positioned for the Future As of 3/31/14 ● 1Analysis based on non-parallel gradual increase in interest rates over 12 months; For methodology see the Company’s Form 10Q for the quarter ended 3/31/14, as filed with the SEC ● 2Increased quarterly dividend to $0.20 per share in 2Q14. • Strong capital base; Well positioned for Basel III capital rules• Continue share buyback; Increased dividend2 Active in Managing Capital • Strong credit culture leads to solid credit metrics• Weathered cycle well relative to peers Maintaining Asset Quality • 200 bps increase in rates expected to result in >10% increase in net interest income1 Positioned for Rising Rates • Positioned in faster growing markets andindustries• Cross sell helping to drive fee income Growing Loans & Fee Income • Lowest cost deposits and largest percentage of funding from DDA among peers• Holding new and renewed loan spreads Maintaining Pricing Discipline • Continued tight expense controlControlling Expenses
5 Financial Summary $ in millions, except per share data ● 1Calculated using net income attributable to common shares ● 2See Supplemental Financial Data slides for a reconciliation of non-GAAP financial measures ● 3Estimated ratios based on the standardized approach in the final rule and excluding most elements of accumulated other comprehensive income (AOCI) 1Q14 4Q13 1Q13 Diluted income per common share1 $0.73 $0.62 $0.70 Net interest income $410 $430 $416 Loan accretion 12 23 11 Provision for credit losses 9 9 16 Noninterest income 208 219 213 Noninterest expenses 406 473 416 Litigation-related expenses 3 52 3 Net income 139 117 134 Total average loans $45,075 $44,054 $44,617 Total average deposits 52,770 52,769 50,692 Tier 1 common capital ratio2 10.58% 10.64% 10.37% Basel III Tier 1 common capital ratio2,3 10.3% 10.3% 10.1% Average diluted shares (millions) 187 186 187 6 First Quarter 2014 Results $ in millions ● 1Q14 compared to 4Q13 ● 1Shares repurchased under the share repurchase program Key Performance Drivers Loan growth across footprint & nearly all businesses lines Net interest income declined with lower accretion & nonaccrual interest collected as well as 2 fewer days; loan growth & lower funding costs offset lower loan yields Credit quality remained strong Customer-driven fees impacted by slower syndication activity Noninterest expenses decreased from unusually high litigation-related expenses in 4Q13, decline in pension expense & continued drive for efficiency 1Q14 Change From4Q13 1Q13Total average loans 45,075 1,021 458 Commercial loans 28,362 679 306 Total average deposits 52,770 1 2,078 Noninterest-bearing deposits 23,236 (296) 1,730 Net interest income 410 (20) (6) Loan accretion 12 (11) 1 Provision for credit losses 9 -- (7) Net loan charge-offs 12 (1) (12) Noninterest income 208 (11) (5) Customer-driven fee income 184 (6) (1) Noninterest expenses 406 (67) (10) Net income 139 22 5 Shares repurchased1 1.5MM shares or $72MM
Best Regional Bank: Southwest Based on:• Assets• Profitability• Strategic Relationships• Customer Service• Competitive Pricing• Innovative Products 7 1Based on nearly 14,000 interviews with businesses with sales of $10-$500MM across the country ● 2Based on over 17,000 interviews with businesses with sales $1-$10MM across the country ● 3Overall Satisfaction – West. Comparisons are based on only those banks operating in each region. 2013 Greenwich AwardsMost Awards of any US Bank Middle Market1 SmallBusiness2 Overall Satisfaction Relationship Manager Capability Financial Stability Investment Banking International Service Likelihood to Recommend Personal Banking Satisfaction Treasury Management: • Overall Satisfaction • Accuracy of Operations • Customer Service • Product Capabilities • Sales Specialist Performance 3 Recent Award Announcements 8 Banking Center Footprint Has EvolvedReflecting Our Balanced Growth Strategy 1At 3/31/14 1Q14 2003 72% 44% 14% 28% 12% 22% 2% 2% 4% 360 Banking Centers 483 Banking Centers 215 136 105 9 18 Banking Centers By State1
9 Loan Growth in All Primary Markets $ in billions 10.1 10.2 9.9 9.8 10.4 1Q13 2Q13 3Q13 4Q13 1Q14 Average Loans 10.0 10.2 10.3 10.5 10.9 1Q13 2Q13 3Q13 4Q13 1Q14 Average Deposits 13.5 13.9 14.0 14.4 14.8 1Q13 2Q13 3Q13 4Q13 1Q14 Average Loans 14.4 14.7 14.6 15.2 14.8 1Q13 2Q13 3Q13 4Q13 1Q14 Average Deposits 13.6 13.6 13.3 13.4 13.5 1Q13 2Q13 3Q13 4Q13 1Q14 Average Loans 20.3 20.2 20.5 20.6 20.6 1Q13 2Q13 3Q13 4Q13 1Q14 Average Deposits +6% +3% +3% -3% +1% +1% 10 Average Loan Growth of $1BAmong Highest in Peer Group 1Source: SNL Financial Total Loans($ in billions) 44.6 44.9 44.1 44.1 45.1 45.5 46.5 3.54 3.47 3.44 3.58 3.39 1Q13 2Q13 3Q13 4Q13 1Q14 4Q13 1Q14 Loan Yields Average Balances Period-end Average Loan Growth1(1Q14 vs. 4Q13) 3.9% 2.3% 2.3% 2.1% 1.9% 1.3% 1.2% 0.8% 0.7% 0.2% -0.9 % -1.4 % BOK F CMA ST I KEY FITB ZIO N SNV MTB HBA N BBT RF FHN Peer Average: 1.1%
11 Commercial Loan Growth of $679MMAcross Nearly All Business Lines 1Q14 compared to 4Q13 ● 1Utilization of commercial commitments as a percentage of total commercial commitments at period-end Commercial Loans($ in billions) 2.8 3.1 2.9 3.2 3.2 3.5 3.41.7 1.8 1.6 1.1 0.9 1.4 1.428.1 28.4 27.8 27.7 28.4 28.8 29.8 1Q13 2Q13 3Q13 4Q13 1Q14 4Q13 1Q14 National Dealer Floor Plan Mortgage Banker Average Balances Period-end Commitments grew $416MM to $53.2B1, driven by increases in Commercial Real Estate, Energy & Technology and Life Sciences Line utilization of 48.3%, up from 47.1%1 Loan pipeline increased with growth in nearly all business lines 12 Deposits Remain StrongDeposit Costs Declined Modestly 1Interest cost on interest-bearing deposits ● 2Source: SNL Financial. 1Q14 interest incurred on deposits as a percentage of average deposits. ● 3Source: SNL Financial. Excludes MTB as amounts were not available as of 5/9/14 50.7 51.4 51.9 52.8 52.8 53.3 53.8 0.21 0.19 0.18 0.17 0.15 1Q13 2Q13 3Q13 4Q13 1Q14 4Q13 1Q14 Deposit Rates Average Balances Period-end Strong Deposit Base($ in billions)1 Lowest Cost of Deposits 2 (In basis points) 27 26 20 20 20 19 19 19 12 11 10 8 SNV BOK F HBA N STI FITB FHN KEY BB T RF ZIO N MTB CMA Higher Deposits per Banking Center3($ in millions) 56 65 68 70 74 76 8 9 97 101 101 111 RF KEY HBA N BBT FITB SNV ST I FHN ZIO N BOK F CMA
13 Loans by Business and Market Average $ in billions Middle Market: Serving companies with revenues generally between $20-$500MM Corporate Banking: Serving companies (and their U.S. based subsidiaries) with revenues generally over $500MM Small Business: Serving companies with revenues generally under $20MM By Line of Business 1Q14 4Q13 1Q13 Middle MarketGeneralEnergyNational Dealer ServicesEntertainmentTech. & Life SciencesEnvironmental Services $13.53.05.30.52.30.9 $13.22.85.30.62.10.8 $13.43.04.90.62.00.8 Total Middle Market $25.5 $24.8 $24.7 Corporate BankingUS BankingInternational 2.71.8 2.61.8 2.81.8 Mortgage Banker Finance 0.9 1.1 1.7 Commercial Real Estate 4.0 3.8 3.7 BUSINESS BANK $34.9 $34.1 $34.7 Small Business 3.6 3.6 3.6 Retail Banking 1.8 1.7 1.7 RETAIL BANK $5.4 $5.3 $5.3 Private Banking 4.8 4.7 4.6 WEALTH MANAGEMENT $4.8 $4.7 $4.6 TOTAL $45.1 $44.1 $44.6 By Market 1Q14 4Q13 1Q13 Michigan $13.5 $13.4 $13.6 California 14.8 14.4 13.5 Texas 10.4 9.8 10.1 Other Markets 6.4 6.5 7.4 TOTAL $45.1 $44.1 $44.6 14 Deposits by Business and Market Average $ in billions Middle Market: Serving companies with revenues generally between $20-$500MM Corporate Banking: Serving companies (and their U.S. based subsidiaries) with revenues generally over $500MM Small Business: Serving companies with revenues generally under $20MM By Line of Business 1Q14 4Q13 1Q13 Middle MarketGeneralEnergyNational Dealer ServicesEntertainmentTech. & Life SciencesEnvironmental Services $14.10.50.20.15.70.1 $13.90.60.20.25.20.2 $14.10.40.20.15.00.2 Total Middle Market $20.7 $20.3 $20.0 Corporate BankingUS BankingInternational 2.51.7 2.81.8 2.31.5 Mortgage Banker Finance 0.6 0.6 0.6 Commercial Real Estate 1.5 1.5 1.2 BUSINESS BANK $27.0 $27.0 $25.6 Small Business 2.6 2.8 2.6 Retail Banking 18.8 18.6 18.4 RETAIL BANK $21.4 $21.4 $21.0 Private Banking 3.8 3.9 3.7 WEALTH MANAGEMENT $3.8 $3.9 $3.7 Finance/ Other 0.6 0.5 0.4 TOTAL $52.8 $52.8 $50.7 By Market 1Q14 4Q13 1Q13 Michigan $20.6 $20.6 $20.2 California 14.8 15.2 14.4 Texas 10.9 10.5 10.0 Other Markets 5.9 6.0 5.7 Finance/ Other 0.6 0.5 0.4 TOTAL $52.8 $52.8 $50.7
15 General Middle Market At 3/31/14 Represents largest segment at 30% of total average loans Strong pipeline Average tenure of a relationship manager is 9 years 9.8 10.6 10.9 11 .4 11.2 11.2 12 .1 12.7 13 .5 13.5 14. 1 14.6 14.1 13.8 14.0 13.9 14. 1 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 13.6 13.4 13.0 13.0 13.0 13. 2 13.1 13.0 13.0 13.1 13.1 13.2 13 .4 13.5 13.2 13.2 13. 5 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 Average Loans($ in billions) Average Deposits($ in billions)Average Loans by Market(1Q14 average balance) California$4.1B 30% Texas$2.4B 18% Michigan$6.8B 50% Other Markets$0.2B 2% 16 National Dealer Services At 3/31/14 ● 1Other includes obligations where a primary franchise is indeterminable (rental car and leasing companies, heavy truck, recreational vehicles, and non-floor plan loans) Toyota/Lexus15% Honda/Acura 15% Ford 9% GM 9% Chrysler 9% Mercedes 3%Nissan/ Infiniti 8%Other European 10% Other Asian 11% Other111% Franchise Distribution(Based on period-end loan outstandings) Geographic DispersionCalifornia 61% Texas 8%Michigan 19% Other 12% Average Loans($ in billions) 65+ years of Floor Plan lending, with over 20 years on a national basis Top tier strategy Focus on “Mega Dealer” (five or more dealerships in group) Excellent credit quality Robust monitoring of company inventory and performance 1.9 1.7 1.3 1.5 1.9 2.3 2.3 2.5 2.8 3.1 2.9 3.2 3.2 3.8 3.6 3.1 3.4 3.8 4.3 4.3 4.6 4.9 5.1 4.9 5.3 5.3 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 Floor Plan
17 Mortgage Banker Finance 1MBA Origination Volumes $ in billions. Source: Mortgage Bankers Association Mortgage Finance Forecast as of 3/17/14 Average Deposits($ in millions) Average Loans($ in millions) 40+ years’ experience with reputation for consistent, reliable approach Provide short-term warehouse financing: bridge from origination of residential mortgage until sale into end market Extensive backroom provides collateral monitoring and customer service Focus on full banking relationships 360 481 52 3 551 6 37 513 372 399 4 41 454 49 7 62 5 645 665 643 566 565 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 425 707 943 1 ,101 566 61 4 923 1,53 5 1,48 3 1,50 7 1,99 6 2,09 4 1,73 7 1,81 5 1,60 5 1,10 9 886 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 MBA MortgageOrigination Volumes1 18 Energy At 3/31/14 30+ years’ experience through the cycles Focus on middle market companies Excellent credit quality Deep relationships with significant ancillary noncredit products Average Loans($ in millions) 1,29 6 1,14 9 1,19 6 1,26 9 1,42 3 1,45 6 1,63 5 1,94 7 2,30 5 2,45 2 2,64 1 2,85 1 3,00 2 2,95 1 2,89 5 2,75 2 2,98 2 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 152 233 430 444 50 1 493 492 865 686 567 533 512 411 48 8 529 60 8 493 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 Average Deposits($ in millions) Natural Gas Oil Mixed Midstream11% Service15% Exploration & Production 74% Diverse Customer Base(Based on period-end loan outstandings)
19 Technology and Life Sciences At 3/31/14 20+ year history Products and services tailored to meet the needs of emerging companies throughout their lifecycle Strong relationships with top-tier investors National business headquartered in Palo Alto, CA, operating from 13 offices in the U.S. and Toronto Top notch relationship managers with extensive industry expertise Average Loans($ in billions) 1.1 1.1 1.1 1.2 1.2 1.2 1 .3 1.5 1. 6 1.7 1. 8 1.9 2.0 1.9 2.0 2 .1 2.3 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 3.3 3.4 3.3 3.5 3. 7 4.1 4.2 4.4 4 .7 5.1 5.2 5.2 5.0 5.0 5.1 5.2 5 .7 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 Average Deposits($ in billions) 20 Commercial Real Estate Line of Business At 3/31/14 ● 1Includes CRE line of business loans not secured by real estate 5.7 5.4 5.1 4.8 4.4 4.0 4.4 4.6 4.4 4.3 3.9 3.7 3.7 3.8 3.8 3.8 4 .0 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 Commercial MortgagesReal Estate ConstructionCommercial & Other Average Loans($ in billions) 4.7 4.8 4.9 5.2 5.4 1Q13 2Q13 3Q13 4Q13 1Q14 Commitments($ in billions; Based on Period-end commitments) 160+ years experience with focus on well-established developers, primarily in our footprint Provide construction and mini-perm mortgage financing Real Estate Construction average loans up for the past 6 quarters +14% 1
21 Small Business Serving companies with annual revenues generally between $2-$20MM Adding Relationship Managers in Texas, California & Arizona Recently streamlined loan approval process Expanded Business Banking Specialist Program Average Loans($ in billions) 3.5 3.4 3.3 3.3 3.2 3.2 3.6 3.6 3.5 3.4 3.4 3.5 3. 6 3.6 3.6 3.6 3.6 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 1.5 1.5 1.6 1.7 1.7 1. 7 2.7 3. 0 2.6 2.5 2.6 2.7 2.6 2.7 2.7 2. 8 2.6 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 4Q1 3 1Q1 4 Average Deposits($ in billions) 22 Shared National Credit Relationships At 3/31/14 ● Shared National Credit (SNC): Facilities greater than $20 million shared by three or more federally supervised financial institutions which are reviewed by regulatory authorities at the agent bank level. Period-end Loans of $10.1B Commercial Real Estate$0.6B 6% Corporate $2.8B 28% General$2.3B 23% National Dealer $0.4B 4% Energy$3.0B 29% Entertainment$0.2B 2% Tech. & Life Sciences$0.3B 3% Environmental Services $0.4B 4% Mortgage Banker$0.1B 1% = Total Middle Market (65%) Approximately 865 borrowers Strategy: Pursue full relationships with ancillary business Comerica is agent for approx. 15% Adhere to same credit underwriting standards as rest of loan book Credit quality mirrors total portfolio
23 Government Card Programs At 3/31/14 ● 1Source: the Nilson Report July 2013 ● 2Final rule announced 12/22/10 ● 3Based on a 2013 survey conducted by KRC Research ● 4Checks eliminated since December 2010. Source: U.S. Department of the Treasury Growing Average Noninterest-Bearing Deposits($ in millions) 185 290 532 650 720 948 1,221 1,369 2007 2008 2009 2010 2011 2012 2013 1Q14 US Treasury ProgramState Card Programs #1 prepaid card issuer1 in US Service 32 state and local government benefit programs Service US Treasury DirectExpress Program:• Exclusive provider of prepaid debit cards with a contract through January 2015• Over 5 million cards registered• Phasing out checks2As of 5/1/11, new benefit recipientsAs of 3/1/13, current check recipients• 94% of Direct Express card holders report they are totally satisfied3• Nearly 8MM monthly benefit checks eliminated, resulting in significant taxpayer savings4 24 Continued Strong Credit QualityOne of the Lowest NCO Ratios Among Peers 1Source: SNL Financial ● 2Criticized loans are consistent with regulatory defined Special Mention, Substandard, Doubtful and Loss loan classifications 24 17 19 13 12 21 15 18 12 10 1Q13 2Q13 3Q13 4Q13 1Q14 NCO Ratio 2,894 2,695 2,461 2,260 2,139 1Q13 2Q13 3Q13 4Q13 1Q14 Net Loan Charge-offs($ in millions) Criticized Loans2($ in millions) (In basis points) Allowance for Loan Losses($ in millions) 617 613 604 598 594 1.2 1.3 1.3 1.6 1.8 1Q13 2Q13 3Q13 4Q13 1Q14 NPL Coverage -8 8 10 14 20 30 34 39 43 43 54 74 BOK F ZIO N CMA KE Y MTB SNV ST I HBA N FHN RF BBT FITB 1Q14 Net Charge-Off Ratio vs. Peers1(In basis points)
25 Nonperforming Assets At 3/31/14 ● 11Q14 compared to 4Q13 Middle Market$51MM Other $79MM Commercial Real Estate$79MM Private Banking$29MM Small Business$79MM Nonperforming Assets($ in millions) 555 500 478 383 3521.23 1.10 1.08 0.84 0.76 1Q13 2Q13 3Q13 4Q13 1Q14 Nonperforming Assets as aPercentage of Total Loans + ORE Nonperforming Assets of $352MM, a $31MM decrease, included1:• Nonaccrual loans down $33MM • Foreclosed Property of $14MM Troubled Debt Restructurings (TDRs) of $173MM, included:• $63MM Performing Restructured• $21MM Reduced Rate • $89MM Nonaccrual TDR Nonaccrual Loans of $317MM 26 Securities Portfolio Stable At 3/31/14 ● 1Estimated as of 3/31/14 MBS Portfolio: • Duration of 4.0 years1 • Duration extends to 4.6 years under a 200 bps instantaneous rate increase1 • Net unrealized pre-tax loss of $10MM • Net unamortized premium of $65MM • Slower prepayment speeds (including a retrospective adjustment to premium amortization similar to 3Q13 & 4Q13) added $3MM or 12 bps to the yield • Investing prepayments from MBS portfolio into Level 1 High Quality Liquid Assets (HQLA), such as GNMA securities 9.6 9.4 9.0 9.0 8.9 8.9 9.1 10.0 9.8 9.4 9.4 9.3 9.3 9.5 2.25 2.22 2.41 2.46 2.42 1Q13 2Q13 3Q13 4Q13 1Q14 4Q13 1Q14 MBS Other MBS Yield Securities Portfolio($ in billions) Average Balances Period-end
27 Net Interest IncomeLoan Growth & Lower Funding Costs Offset Low Rate Environment 11Q14 compared to 4Q13 Net Interest Income and Rate NIM1: $430MM 4Q13 2.86% -11 Loan accretion -0.08 -7 2 fewer days in 1Q14 -- -2 Interest on non-accrual loans -0.01 +8 $1B in loan growth -- +1 Lower funding costs -- -9 Lower loan yields:- 1bp 30-day LIBOR decline- Portfolio dynamics -0.04 -- Excess liquidity decrease +0.04 $410MM 1Q14 2.77% 405 407 404 407 398 11 7 8 23 12 416 414 412 430 410 2.88 2.83 2.79 2.86 2.77 1Q13 2Q13 3Q13 4Q13 1Q14 Accretion NIM Net Interest Income($ in millions) 28 Interest Rate Sensitivity At 3/31/14 ● 1Analysis based on non-parallel gradual 200 basis point increase in interest rates over 12 months; For methodology see the Company’s Form 10Q, as filed with the SEC. Estimates based on simulation modeling analysis. ●2NIB = Noninterest-bearing ● 3Source: SNL Financial 213 202 180 1Q14 1Q14 1Q14 Sensitivity: Gradual 200 bps Rate Rise1 &Incremental Decrease in Avg. NIB2 DepositsEstimated Annual Impact to Net Interest Income($ in millions) $1B dec reas e in N IB d epo sits $3B dec reas e in N IB d epo sits Why is Comerica Asset Sensitive? • Large proportion of floating rate loans and <5% have floors• Securities comprise ≈15% of earning assets• Relatively large deposit base• Balance sheet is not currently hedged with interest rate swaps 27% 28% 28% 29% 30 % 32% 33% 35 % 37% 37% 41 % 45% FHN SNV BBT HBA N STI FITB R F KEY BOK F MTB ZIO N CMA Noninterest-Bearing as a Percent of Total Deposits3(1Q14 average balances) Fixed Rate~15% Libor-Based~65% Prime-Based~20% Loan Portfolio: Primarily Floating Rate
29 Noninterest Income 1Q14 compared to 4Q13 ● 1Customer-driven fee income includes service charges on deposit accounts, fiduciary income, commercial lending fees, letter of credit fees, card fees, foreign exchange income, brokerage fees and customer-driven components of other noninterest income ● 2Offsetting impact to other noncustomer-driven income and provision for income taxes Customer-driven fee income: - $8MM Commercial Lending Fees (primarily slow syndication activity) - $2MM Customer Derivatives +$1MM Deposit Service Charges +$1MM Fiduciary Income +$1MM Brokerage Fees Noncustomer-driven fee income: - $4MM Deferred Comp (offset in expenses)• Numbers presented reflect adoption of GAAP amendment related to projects that qualify for low-income housing tax credit2 185 191 195 190 184 28 31 33 29 24 213 222 228 219 208 1Q13 2Q13 3Q13 4Q13 1Q14 Customer-DrivenNoncustomer-Driven 1 Noninterest Income ($ in millions) 30 Continued Tight Expense Control 1Q14 compared to 4Q13 ● 13Q13 litigation-related expenses were a benefit of $4MM 52 416 416 417 473 406 1Q13 2Q13 3Q13 4Q13 1Q14 Litigation-Related Expenses Noninterest Expense($ in millions) Noninterest expenses decline $67MM: - $49MM Litigation-related Expenses, following unfavorable jury verdict impacting 4Q13- $11MM Salaries & Benefits:- $13MM Pension Expense- $4MM Deferred Comp (offset in noninterest income)+$6MM Annual stock comp & higher payroll taxes partially offset by 2 fewer days & lower healthcare• Smaller decreases in several categories 1
31 At 3/31/14 ● 1Source: SNL Financial Noninterest Expenses Decline YoY1(1Q14 vs. 1Q13) -9.1 % -8.5 % -3.7 % -3.1 % -2.8 % -2.8 % -1.2 % -1.0 % -0.6 % 0.2% 0.4% 11.3 % BOK F FHN RF CMA FITB KE Y SNV BBT ST I ZIO N HBA N MTB Utilizing technology to improve productivity Selected outsourcing of services Lower pension expense due to improved market performance and long-term rates Expenses Opportunities Controlling What We Can ControlExpense Discipline 4,979 5,161 5,350 5,469 5,632 5,690 5,780 5,898 6,460 6,795 6,925 7,374 RF HBAN ZION BBT FHN SNV MTB BOKF KEY FITB STI CMA Assets Per Employee1($ in 000’s) 32 Active Capital Management 1Source: SNL Financial. Excludes RF as amounts were not available as of 5/9/14 ● 2Outlook as of 5/12/14 Tangible Common Equity Ratio1(As of 3/31/14) 10.7 8 10.2 0 10.1 3 10.0 6 8.93 8.58 8.41 8.37 8.33 8.24 7.61 SNV CMA KE Y BOK F FITB HBA N STI FHN MTB ZIO N BBT 2013 Capital Plan completed: $288MM or 6.9MM shares repurchased 2Q13 through 1Q14• $72MM or 1.5MM shares repurchased in 1Q14 Increased quarterly dividend 12% to $0.19 per share in 1Q14 2014 Capital Plan target2: Up to $236MM share repurchases over four quarters (2Q14 through 1Q15) Increased quarterly dividend 5% to $0.20 per share in 2Q14 Average diluted shares of 186.7MM, increased 535,000 from 4Q13 due to: Increased average stock price affecting dilution from warrants and employee options Vesting of annual employee stock grants
33 Solid Shareholder ReturnIncreasing Bottom Line & Book Value 1Dividends per common share ● 2Numbers presented reflect adoption of U.S. GAAP amendment related to projects that qualify for the low-income housing tax credit 2.09 2.67 2.85 2011 2012 2013 0.40 0.55 0.68 2011 2012 2013 Earning Per Share Growth($ per share) +70% Book Value Per Share Growth2($ per share) 34.79 36.86 39.22 2011 2012 2013 +13% Dividends Per Share1 Growth($ per share) +36% 47% 79% 76% 19% 21% 23% FY11 FY12 FY13 Shares Repurchased Dividend Shareholder Payout 34 Maintaining Focus on Long-Term GoalsMoving Toward Goals, Despite Prolonged Low Rate Environment Goal as of 5/12/14 ● 1Numbers presented reflect adoption of U.S. GAAP amendment related to projects that qualify for thelow-income housing tax credit Efficiency Ratio1 Return on Average Assets (ROA) 71.2% 67.9% 67.3% 65.8% 2011 2012 2013 1Q14 0.69% 0.83% 0.85% 0.86% 2011 2012 2013 1Q14 Long-TermGoal: Above 1.30% Long-TermGoal: Below 60%
35 Factors Expected to Drive Long-Term Efficiency Ratio Goal Goal as of 5/12/14 2013 Long-Term Goal1 Efficiency Ratio:67% Efficiency Ratio:<60% Expense Growth of 0 - 2% Fee Income Growth of 2 - 4% Loan Growth of 3 - 5% • Increase cross-sell penetration • Collaboration between businesses Focused growth:• Target markets • Allocation of resources to faster growing businesses • Relationship driven • Normalized rates not necessary to reach long-term goal • Continued focus on operating leverage ≈1% ≈2% Normal (≈3.5%) Fed Funds 36 Holding Company Debt Rating As of 5/1/14 ● Source: SNL Financial ● Debt Ratings are not a recommendation to buy, sell, or hold securities Senior Unsecured/Long-Term Issuer Rating S&P Moody’s Fitch BB&T A- A2 A+ BOK Financial A- A2 A Comerica A- A3 A M&T Bank A- A3 A- KeyCorp BBB+ Baa1 A- Fifth Third BBB+ Baa1 A SunTrust BBB Baa1 BBB+ Huntington BBB Baa1 A- Regions Financial BBB- Ba1 BBB- Zions Bancorporation BBB- Ba1 BBB- First Horizon National Corp BB+ Baa3 BBB- Synovus Financial Corp BB- B1 BB Wells Fargo & Company A+ A2 AA- U.S. Bancorp A+ A1 AA- JP Morgan A A3 A+ PNC Financial Services Group A- A3 A+ Bank of America A- Baa2 A Pee r Ba nks Larg e Ba nks
Supplemental Financial DataReconciliation of non-GAAP financial measures with financial measures defined by GAAP ($ in millions) 37 The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations. The tangible common equity ratio removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets.The Corporation believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.1Tier 1 Capital and risk-weighted assets as defined and calculated in accordance with regulation.Numbers presented reflect adoption of U.S. GAAP amendment related to projects that qualify for the low-income housing tax credit. 3/31/14 12/31/13 9/30/13 6/30/13 3/31/13 Tier 1 and Tier 1 common capital1Risk-weighted assets1Tier 1 and Tier 1 common capital ratio 6,96265,78810.58% 6,89564,82510.64% 6,86264,02710.72% 6,80065,22010.43% 6,74865,09910.37% Total shareholders’ equityLess: GoodwillLess: Other intangible assets $7,28363516 $7,15063517 $6,96663518 $6,90863520 $6,98563521 Tangible common equity $6,632 $6,498 $6,313 $6,253 $6,329Total assetsLess: GoodwillLess: Other intangible assets $65,68163516 $65,22463517 $64,66763518 $62,94463520 $64,88263521Tangible assets $65,030 $64,572 $64,014 $62,289 $64,226Tangible common equity ratio 10.20% 10.07% 9.87% 10.04% 9.86% Supplemental Financial DataTier 1 Common Equity under Basel III ($ in millions) 38 The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations. The Basel III Tier 1 common capital ratio further adjusts Tier 1 common capital and risk-weighted assets to account for the final rule approved by U.S. banking regulators in July 2013 for the U.S. adoption of the Basel III regulatory capital framework. The final Basel III capital rules are effective January 1, 2015 for banking organizations subject to the standardized approach. The Corporation believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.1Tier 1 Capital and risk-weighted assets as defined in accordance with regulation.2Estimated ratios based on the standardized approach in the final rule for the U.S. adoption of the Basel III regulatory capital framework and excluding most elements of AOCI. Numbers presented reflect adoption of U.S. GAAP amendment related to projects that qualify for the low-income housing tax credit Basel III Tier 1 Common Capital Ratio 3/31/14 12/31/13 9/30/13 6/30/13 3/31/13 Tier 1 common capital1Basel III adjustments2 $6,962(2) $6,895(6) $6,862(4) $6,800-- $6,748(1) Basel III Tier 1 common capital2 $6,960 $6,889 $6,858 $6,800 $6,747 Risk-weighted assets1Basel III adjustments2 $65.7881,590 $64,8251,754 $64,0271,726 $65,2202,091 $65,0991,996Basel III risk-weighted assets2 $67,378 $66,579 $65,753 $67,311 $67,095 Tier 1 common capital ratioBasel III Tier 1 common capital ratio2 10.6%10.3% 10.6%10.3% 10.7%10.4% 10.4%10.1% 10.4%10.1%
