COMERICA INC /NEW/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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EX-99.2 - EXHIBIT 99.2 - COMERICA INC /NEW/	cma-20181231ex992.htm
8-K - 8-K - COMERICA INC /NEW/	a2018q4pressrelease-form8xk.htm

Dallas, TX/January 16, 2019

COMERICA REPORTS FOURTH QUARTER 2018 NET INCOME OF $310 MILLION

Earnings Per Share of $1.88 for Fourth Quarter and $7.20 for Full-Year 2018

Increase of 74 Percent for Full-Year 2018 Compared to 2017

Fourth Quarter and Full-Year 2018 Performance Reflects Robust Revenue Growth, Strong Credit Quality, Prudent Expense Control and Active Capital Management

Full-Year 2018 Benefited from Reduction in Tax Rate and Discrete Tax Items

“The fourth quarter and full-year 2018 results demonstrate our ability to carefully manage loan and deposit pricing in a rising-rate environment, produce strong credit quality, successfully execute our GEAR Up initiatives, and meaningfully reduce excess capital. We also benefited from a lower tax rate due to tax reform," said Ralph W. Babb, Jr., chairman and chief executive officer. "All together, these drove a return on equity of over 16 percent for the fourth quarter. We believe we are well positioned to continue to increase our bottom line as we drive revenue growth and positive operating leverage, while achieving favorable credit metrics. In addition, we expect to maintain our robust returns, while properly managing our capital base to support growth and investment in our businesses. In summary, we remain focused on our relationship banking strategy, which we expect will continue to enhance shareholder value."



(dollar amounts in millions, except per share data)	4th Qtr '18			3rd Qtr '18			2018			2017
FINANCIAL RESULTS
Net interest income	$	614		$	599		$	2,352		$	2,061
Provision for credit losses	16			—			(1		)	74
Noninterest income (a)	250			234			976			1,107
Noninterest expenses (a)	448			452			1,794			1,860
Pre-tax income	400			381			1,535			1,234
Provision for income taxes	90			63			300			491
Net income	$	310		$	318		$	1,235		$	743

Diluted earnings per common share	$	1.88		$	1.86		$	7.20		$	4.14
Efficiency ratio (b)	51.93		%	52.93		%	53.56		%	58.64		%
Net interest margin	3.70			3.60			3.58			3.11
Common equity Tier 1 capital ratio (c)	11.12			11.68			11.12			11.68
Common equity ratio	10.60			10.90			10.60			11.13

ADJUSTED FINANCIAL RESULTS (d)
Net interest income	$	614		$	599		$	2,352		$	2,061
Provision for credit losses	16			—			(1		)	74
Noninterest income (a)	250			254			996			989
Noninterest expenses (a)	434			440			1,741			1,692
Pre-tax income	414			413			1,608			1,284
Provision for income taxes	93			94			365			437
Net income	$	321		$	319		$	1,243		$	847

Diluted earnings per common share	$	1.95		$	1.86		$	7.24		$	4.73
Efficiency ratio (b)	50.70		%	51.59		%	52.58		%	55.41		%

(a) Noninterest income included a $7 million loss and $3 million gain for the fourth and third quarter 2018, respectively, as well as a $2 million loss and $8 million gain for full-year 2018 and 2017, respectively, relating to deferred compensation plans. Offsetting amounts included in noninterest expenses for the same periods. (b) Noninterest expenses as a percentage of net interest income and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares. (c) December 31, 2018 ratio is estimated. (d) Financial results presented on an adjusted basis to facilitate trend analysis. See Reconciliation of Non-GAAP Financial Measures.

The following table includes items used to arrive at adjusted net income in the Adjusted Financial Results (see Reconciliation of Non-GAAP Financial Measures).



	4th Qtr '18				3rd Qtr '18						2018						2017
(in millions, except per share data)	Amount		Per Share		Amount			Per Share			Amount			Per Share			Amount		Per Share
Restructuring charges, net of tax	$	11	$	0.07	$	9		$	0.05		$	41		$	0.24		$	29	$	0.16
Securities repositioning, net of tax	—		—		15			0.09			15			0.09			—		—
Discrete tax items	—		—		(23		)	(0.14		)	(48		)	(0.29		)	72		0.41
One-time employee bonus, net of tax	—		—		—			—			—			—			3		0.02

Fourth Quarter 2018 Compared to Third Quarter 2018 Overview

The commentary below discusses noninterest income and noninterest expenses on an adjusted basis, which includes certain adjustments management considers helpful to facilitate trend analysis. See Reconciliation of Non-GAAP Financial Measures.

Average total loans increased $248 million to $48.8 billion.


•	Primarily reflected increases in National Dealer Services and Energy, partially offset by a decrease in Mortgage Banker Finance.


•	The increase in National Dealer Services and decrease in Mortgage Banker Finance were due to typical seasonality factors.


•	Loan yields increased 16 basis points, primarily reflecting an increase in short-term rates (+21 basis points), partially offset by a decrease in loan fees (-3 basis points) and the impact of other loan dynamics (-2 basis points).

Average total deposits decreased $364 million to $55.7 billion.


•	Primarily reflected decreases in Corporate Banking, Retail Banking and Technology and Life Sciences, partially offset by increases in general Middle Market and Wealth Management.


•	Noninterest-bearing deposits decreased $593 million, partially offset by a $229 million increase in interest-bearing deposits reflecting more efficient cash management by customers.


•	Interest-bearing deposit costs increased 11 basis points due to continued focus on relationship-based deposit pricing as short-term interest rates increased.

Net interest income increased $15 million to $614 million.


•	Included a net benefit from higher interest rates of $18 million from managing loan and deposit pricing in a rising rate environment.


•	Net interest margin increased 10 basis points to 3.70 percent mostly due to the increase in interest rates.

Provision for credit losses was $16 million.


•	Net credit-related charge-offs decreased to $11 million, or 0.09 percent of average loans in the fourth quarter 2018.


•	The allowance for loan losses increased $7 million to $671 million, or 1.34 percent of total loans.

Adjusted noninterest income decreased $4 million to $250 million.


•	Reflected a $10 million decrease in deferred compensation asset returns (offset in noninterest expenses), partially offset by a $3 million increase in card fees and smaller increases in other categories.


•	A loss related to repositioning of the securities portfolio was $20 million in third quarter 2018.

Adjusted noninterest expenses decreased $6 million to $434 million.


•	Due to decreases of $5 million in FDIC insurance expense and $4 million in salaries and benefits expense, partially offset by small increases in other categories.


•	The decrease in salaries and benefits expense was primarily due to a $10 million decline in deferred compensation expense (offset in noninterest income), partially offset by an increase in technology-related labor costs.


•	Restructuring charges were $14 million and $12 million in fourth and third quarter 2018, respectively. The fourth quarter 2018 charges were the final charges of the GEAR-Up Initiatives.

Provision for income taxes increased $27 million to $90 million.


•	Reflected discrete tax benefit items of $23 million in third quarter 2018 and higher pre-tax earnings.

Capital position remained solid at December 31, 2018.


•	Returned a total of $599 million to shareholders, including dividends and the repurchase of $500 million of common stock (6.3 million shares) under the equity repurchase program.

Full-Year 2018 Compared to Full-Year 2017 Overview

Effective January 1, 2018, the Corporation adopted Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers." As a result, revenue from certain products is now presented net of costs. The commentary below discusses noninterest income and noninterest expenses on an adjusted basis to eliminate the variances attributable to the impact of adoption. Adjusted basis also includes other adjustments management considers helpful to facilitate trend analysis. See Reconciliation of Non-GAAP Financial Measures.

Average total loans increased $208 million to $48.8 billion.


•	Primarily reflected increases in Technology and Life Sciences as well as National Dealer Services, partially offset by decreases in Corporate Banking and Energy.

Average total deposits decreased $1.3 billion to $55.9 billion.


•	With the largest decrease in general Middle Market driven by a $925 million decline in Municipalities.


•	Noninterest-bearing deposits decreased $1.8 billion, partially offset by a $449 million increase in interest-bearing deposits.

Net interest income increased $291 million to $2.4 billion.


•	Driven by the net benefit from higher short-term rates.

Provision for credit losses decreased $75 million to a $1 million benefit.


•	Reflected a decline in total criticized loans of $683 million.


•	Net credit-related charge-offs improved to 0.11 percent of average loans, compared to 0.19 percent in 2017.

Adjusted noninterest income increased $7 million.


•	Primarily reflected increases of $24 million in card fees (adjusted basis) and $8 million in fiduciary income, partially offset by decreases of $11 million in service charges on deposit accounts (adjusted basis) and $10 million in deferred compensation asset returns (offset in noninterest expenses).


•	The decrease in service charges on deposit accounts (adjusted basis) included higher earnings credit allowances provided to customers due to the increase in short-term interest rates.


•	The loss related to repositioning of the securities portfolio was $20 million in 2018.

Adjusted noninterest expenses increased $49 million.


•	Reflected increases of $48 million in salaries and benefits expense and $7 million in outside processing fee expense (adjusted basis), partially offset by a $9 million decrease in FDIC insurance expense.


•	The increase in salaries and benefits expense was driven by higher share-based and incentive compensation tied to financial performance as well as merit increases and technology-related labor costs, partially offset by decreases in workforce and deferred compensation expense (offset in noninterest income).

Provision for income taxes decreased $191 million to $300 million.


•	Reflected a decrease in the impact of discrete tax items from a $72 million net charge in 2017 to a benefit of $48 million in 2018. The $72 million net charge in 2017 included a $107 million adjustment to deferred tax assets due to the change in the statutory tax rate.


•	Also included the impact of the decrease in the statutory tax rate in 2018, partially offset by an increase in pre-tax income.

Returned $1.6 billion to shareholders, an increase of $903 million compared to 2017.


•	Repurchased $1.3 billion, or approximately 14.8 million shares, of common stock during 2018 under the equity repurchase program.


•	Increased the dividend 69 percent to $1.84 per share.

Net Interest Income



(dollar amounts in millions)	4th Qtr '18			3rd Qtr '18			2018			2017
Net interest income	$	614		$	599		$	2,352		$	2,061

Net interest margin	3.70		%	3.60		%	3.58		%	3.11		%

Selected average balances:
Total earning assets	$	65,661		$	65,842		$	65,410		$	66,300
Total loans	48,832			48,584			48,766			48,558
Total investment securities	11,773			11,761			11,810			12,207
Federal Reserve Bank deposits	4,754			5,180			4,495			5,233


Total deposits	55,729			56,093			55,935			57,258
Total noninterest-bearing deposits	28,600			29,193			29,241			31,013
Medium- and long-term debt	6,420			6,153			5,842			4,969

Net interest income increased $15 million to $614 million in the fourth quarter 2018, compared to the third quarter 2018.


•	The net increase from higher rates was $18 million, reflecting interest benefits to loans (+$25 million), short-term investments (+$3 million) and securities (+$1 million), partially offset by higher costs on deposits (-$7 million) and debt (-$4 million).

•

Net interest income was also impacted by an increase in interest on investment securities due to the repositioning of the portfolio (+$4 million), higher average loan balances (+$3 million), a decrease in loan fees (-$3 million), lower average short-term investment balances (-$2 million), higher average debt balances (-$2 million), the impact of other loan dynamics (-$2 million) and higher average interest-bearing deposits (-$1 million).

The net interest margin increased 10 basis points to 3.70 percent in the fourth quarter 2018, compared to the third quarter 2018.


•	The net benefit of 11 basis points from higher rates reflected higher yields on loans (+15 basis points), short-term investments (+2 basis points) and securities (+1 basis point), partially offset by higher costs on deposits (-4 basis points) and debt (-3 basis points).


•	The net benefit from rates (+11 basis points) and the securities repositioning benefit (+2 basis points) were partially offset by a decrease in loan fees (-2 basis points) and the impact of other balance sheet dynamics (-1 basis point).

Credit Quality

“Credit quality was strong for the fourth quarter and full year of 2018 with net charge-offs of 9 basis points and 11 basis points, respectively," said Babb. "Nonperforming loans continue to decline and are at an exceptionally low level. Our allowance remains very healthy at a reserve ratio of 1.34 percent. As we closely monitor the portfolio, we are not seeing any concerning trends. We expect our portfolio to continue to perform well, yet begin to migrate towards a more normal credit environment in the latter half of 2019."



(dollar amounts in millions)	4th Qtr '18			3rd Qtr '18			4th Qtr '17
Credit-related charge-offs	$	21		$	25		$	29
Recoveries	10			10			13
Net credit-related charge-offs	11			15			16
Net credit-related charge-offs/Average total loans	0.09		%	0.13		%	0.13		%

Provision for credit losses	$	16		$	—		$	17

Nonperforming loans	229			239			410
Nonperforming assets (NPAs)	230			240			415
NPAs/Total loans and foreclosed property	0.46		%	0.49		%	0.84		%

Loans past due 90 days or more and still accruing	$	16		$	28		$	35

Allowance for loan losses	671			664			712
Allowance for credit losses on lending-related commitments (a)	30			33			42
Total allowance for credit losses	701			697			754

Allowance for loan losses/Period-end total loans	1.34		%	1.35		%	1.45		%
Allowance for loan losses/Nonperforming loans	2.9x			2.8x			1.7x


(a)	Included in "Accrued expenses and other liabilities" on the consolidated balance sheets.


•	The allowance for loan losses increased $7 million to $671 million at December 31, 2018, or 1.34 percent of total loans, reflecting continued improvement in credit migration and an increase in loans.


•	Criticized loans decreased $122 million to $1.5 billion, including a $64 million decrease in Energy. Criticized loans as a percentage of total loans were 3.1 percent at December 31, 2018, compared to 3.4 percent at September 30, 2018. Criticized loans are generally consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities.


•	Nonperforming loans decreased $10 million to $229 million at December 31, 2018. Nonperforming loans as a percentage of total loans decreased to 0.46 percent at December 31, 2018, compared to 0.49 percent at September 30, 2018.

Full-Year 2019 Outlook

For full-year 2019 compared to full-year 2018 reported results, management expects the following, assuming a continuation of the current economic and rate environment:


•	Growth in average loans of 2 percent to 4 percent, reflecting increases in most lines of business.


•	Decline in average deposits of 1 percent to 2 percent from a decrease in noninterest-bearing deposits.


•	Growth in net interest income of 4 percent to 5 percent from the full-year net benefit of higher interest rates ($130 million to $150 million), growth in average loans and repositioning the securities portfolio, partially offset by higher average debt and lower interest recoveries.


•	Provision for credit losses of 15 basis points to 25 basis points and net charge-offs to remain low.


•	Noninterest income higher by 2 percent to 3 percent, benefiting from growth in card fees and fiduciary income, partially offset by lower service charges on deposit accounts and lower derivative income.

•

Noninterest expenses lower by 3 percent, reflecting the end of restructuring charges from the GEAR Up initiatives ($53 million in full-year 2018), FDIC insurance expense lower by $16 million from the discontinuance of the surcharge, lower compensation and pension expense, partially offset by higher outside processing expenses in line with growing revenue, technology expenditures and typical inflationary pressures.


◦	Lower compensation driven by incentive compensation, partially offset by merit increases.


•	Income tax expense to be approximately 23 percent of pre-tax income, excluding any tax impact from employee stock transactions.


◦	Full-year 2018 included discrete tax benefits of $48 million.


•	Common equity Tier 1 capital ratio target of 9.5 percent to 10 percent through continued return of excess capital.

Business Segments

Comerica's operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank and Wealth Management. The Finance Division is also reported as a segment. Comerica also provides market segment results for three primary geographic markets: Michigan, California and Texas. In addition to the three primary geographic markets, Other Markets is also reported as a market segment. Other Markets includes Florida, Arizona, the International Finance division and businesses that have a significant presence outside of the three primary geographic markets. For a summary of business segment and geographic market quarterly results, see the Business Segment Financial Results and Market Segment Financial Results tables included later in this report. From time to time, the Corporation may make reclassifications among the segments to reflect management's current view of the segments, and methodologies may be modified as the management accounting system is enhanced and changes occur in the organizational structure and/or product lines. During the third quarter 2018, the Small Business component was reclassified from Retail Bank to Business Bank. The financial results provided are based on the internal business unit and geographic market structures of Comerica and methodologies in effect at December 31, 2018. A discussion of business segment and geographic market year-to-date results will be included in Comerica's 2018 Form 10-K.

Conference Call and Webcast

Comerica will host a conference call to review fourth quarter 2018 financial results at 10 a.m. CT Wednesday January 16, 2019. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (Event ID No. 5976458). The call and supplemental financial information can also be accessed via Comerica's "Investor Relations" page at www.comerica.com. A replay of the Webcast can be accessed via Comerica's “Investor Relations” page at www.comerica.com.

Comerica Incorporated is a financial services company headquartered in Dallas, Texas, and strategically aligned by three major business segments: The Business Bank, The Retail Bank and Wealth Management. Comerica focuses on relationships and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico.

This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Comerica's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as a reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Forward-looking Statements

Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “believes,” “contemplates,” “feels,” “expects,” “estimates,” “seeks,” “strives,” “plans,” “intends,” “outlook,” “forecast,” “position,” “target,” “mission,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “opportunity,” “initiative,” “outcome,” “continue,” “remain,” “maintain,” “on track,” “trend,” “objective,” “looks forward,” “projects,” “models” and variations of such words and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, as they relate to Comerica or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of Comerica's management based on information known to Comerica's management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica's management for future or past operations, products or services, including the GEAR Up initiative, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries as well as estimates of the economic benefits of the GEAR Up initiative, estimates of credit trends and global stability. Such statements reflect the view of Comerica's management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Comerica's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in general economic, political or industry conditions; changes in monetary and fiscal policies; whether Comerica may achieve opportunities for revenue enhancements and efficiency improvements under the GEAR Up initiative, or changes in the scope or assumptions underlying the GEAR Up initiative; operational difficulties, failure of technology infrastructure or information security incidents; reliance on other companies to provide certain key components of business infrastructure; Comerica's ability to maintain adequate sources of funding and liquidity; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers; unfavorable developments concerning credit quality; changes in regulation or oversight; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; transitions away from LIBOR towards new interest rate benchmarks; reductions in Comerica's credit rating; damage to Comerica's reputation; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; competitive product and pricing pressures among financial institutions within Comerica's markets; the interdependence of financial service companies; the implementation of Comerica's strategies and business initiatives; changes in customer behavior; management's ability to maintain and expand customer relationships; the effectiveness of methods of reducing risk exposures; the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; the effects of recent tax reform and potential legislative, administrative or judicial changes or interpretations related to these and other tax regulations; any future strategic acquisitions or divestitures; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings or determinations; the effects of terrorist activities and other hostilities; changes in accounting standards; the critical nature of Comerica's accounting policies and the volatility of Comerica’s stock price. Comerica cautions that the foregoing list of factors is not all-inclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to “Item 1A. Risk Factors” beginning on page 11 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2017 and "Item 1A. Risk Factors" beginning on page 59 of Comerica's Quarterly Report on Form 10-Q for the quarter ended June 30, 2018. Forward-looking statements speak only as of the date they are made. Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this news release or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.



Media Contact:	Investor Contacts:
Yolanda Y. Walker	Darlene P. Persons
(214) 462-4443	(214) 462-6831

	Chelsea R. Smith
	(214) 462-6834



CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
Comerica Incorporated and Subsidiaries

	Three Months Ended									Years Ended
	December 31,			September 30,			December 31,			December 31,
(in millions, except per share data)	2018			2018			2017			2018			2017
PER COMMON SHARE AND COMMON STOCK DATA
Diluted net income	$	1.88		$	1.86		$	0.63		$	7.20		$	4.14
Cash dividends declared	0.60			0.60			0.30			1.84			1.09

Average diluted shares (in thousands)	163,501			170,057			175,818			170,500			178,125
PERFORMANCE RATIOS
Return on average common shareholders' equity	16.36		%	16.15		%	5.58		%	15.82		%	9.34		%
Return on average assets	1.74			1.77			0.62			1.75			1.04
Efficiency ratio (a)	51.93			52.93			58.14			53.56			58.64
CAPITAL
Common equity tier 1 capital (b)	$	7,470		$	7,750		$	7,773
Risk-weighted assets (b)	67,168			66,344			66,575
Common shareholders' equity per share of common stock	46.89			46.92			46.07
Tangible common equity per share of common stock	42.89			43.05			42.34
Common equity tier 1 and tier 1 risk-based capital ratio (b)	11.12		%	11.68		%	11.68		%
Total risk-based capital ratio (b)	13.18			13.76			13.84
Leverage ratio (b)	10.51			10.85			10.89
Common equity ratio	10.60			10.90			11.13
Tangible common equity ratio (c)	9.78			10.09			10.32
AVERAGE BALANCES
Commercial loans	$	30,651		$	30,371		$	30,719		$	30,534		$	30,415
Real estate construction loans	3,164			3,198			3,031			3,155			2,958
Commercial mortgage loans	9,051			9,084			9,054			9,131			9,005
Lease financing	495			464			470			470			509
International loans	1,035			1,072			1,122			1,021			1,157
Residential mortgage loans	1,968			1,962			2,014			1,983			1,989
Consumer loans	2,468			2,433			2,523			2,472			2,525
Total loans	48,832			48,584			48,933			48,766			48,558

Earning assets	65,661			65,842			66,167			65,410			66,300
Total assets	70,830			71,210			71,398			70,724			71,452

Noninterest-bearing deposits	28,600			29,193			31,780			29,241			31,013
Interest-bearing deposits	27,129			26,900			25,861			26,694			26,245
Total deposits	55,729			56,093			57,641			55,935			57,258

Common shareholders' equity	7,519			7,817			7,987			7,809			7,952
NET INTEREST INCOME
Net interest income	$	614		$	599		$	545		$	2,352		$	2,061
Net interest margin	3.70		%	3.60		%	3.27		%	3.58		%	3.11		%
CREDIT QUALITY
Total nonperforming assets	$	230		$	240		$	415

Loans past due 90 days or more and still accruing	16			28			35

Net credit-related charge-offs	11			15			16			$	51		$	92

Allowance for loan losses	671			664			712
Allowance for credit losses on lending-related commitments	30			33			42
Total allowance for credit losses	701			697			754

Allowance for loan losses as a percentage of total loans	1.34		%	1.35		%	1.45		%
Net credit-related charge-offs as a percentage of average total loans	0.09			0.13			0.13			0.11		%	0.19		%
Nonperforming assets as a percentage of total loans and foreclosed property	0.46			0.49			0.84
Allowance for loan losses as a multiple of total nonperforming loans	2.9x			2.8x			1.7x
OTHER KEY INFORMATION
Number of banking centers	436			435			438
Number of employees - full time equivalent	7,865			7,834			7,999


(a)	Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares.


(b)	December 31, 2018 ratios are estimated.


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



CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries

	December 31,			September 30,			December 31,
(in millions, except share data)	2018			2018			2017
	(unaudited)			(unaudited)
ASSETS
Cash and due from banks	$	1,390		$	945		$	1,438

Interest-bearing deposits with banks	3,171			4,894			4,407
Other short-term investments	134			136			96

Investment securities available-for-sale	12,045			11,862			10,938
Investment securities held-to-maturity	—			—			1,266

Commercial loans	31,976			30,889			31,060
Real estate construction loans	3,077			3,158			2,961
Commercial mortgage loans	9,106			9,019			9,159
Lease financing	507			471			468
International loans	1,013			1,090			983
Residential mortgage loans	1,970			1,947			1,988
Consumer loans	2,514			2,436			2,554
Total loans	50,163			49,010			49,173
Less allowance for loan losses	(671		)	(664		)	(712		)
Net loans	49,492			48,346			48,461

Premises and equipment	475			472			466
Accrued income and other assets	4,111			4,793			4,495
Total assets	$	70,818		$	71,448		$	71,567

LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	28,690		$	29,301		$	32,071

Money market and interest-bearing checking deposits	22,560			22,449			21,500
Savings deposits	2,172			2,192			2,152
Customer certificates of deposit	2,131			2,051			2,165
Foreign office time deposits	8			13			15
Total interest-bearing deposits	26,871			26,705			25,832
Total deposits	55,561			56,006			57,903

Short-term borrowings	44			84			10
Accrued expenses and other liabilities	1,243			1,154			1,069
Medium- and long-term debt	6,463			6,418			4,622
Total liabilities	63,311			63,662			63,604

Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares	1,141			1,141			1,141
Capital surplus	2,148			2,144			2,122
Accumulated other comprehensive loss	(609		)	(611		)	(451		)
Retained earnings	8,781			8,587			7,887
Less cost of common stock in treasury - 68,081,176 shares at 12/31/18; 62,224,198 shares at 9/30/18 and 55,306,483 shares at 12/31/17	(3,954		)	(3,475		)	(2,736		)
Total shareholders' equity	7,507			7,786			7,963
Total liabilities and shareholders' equity	$	70,818		$	71,448		$	71,567



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries

	Three Months Ended				Years Ended
	December 31,				December 31,
(in millions, except per share data)	2018		2017		2018			2017
INTEREST INCOME
Interest and fees on loans	$	604	$	498	$	2,262		$	1,872
Interest on investment securities	71		64		265			250
Interest on short-term investments	29		16		92			60
Total interest income	704		578		2,619			2,182
INTEREST EXPENSE
Interest on deposits	43		13		122			42
Interest on short-term borrowings	—		—		1			3
Interest on medium- and long-term debt	47		20		144			76
Total interest expense	90		33		267			121
Net interest income	614		545		2,352			2,061
Provision for credit losses	16		17		(1		)	74
Net interest income after provision for credit losses	598		528		2,353			1,987
NONINTEREST INCOME
Card fees	64		91		244			333
Service charges on deposit accounts	51		55		211			227
Fiduciary income	51		50		206			198
Commercial lending fees	23		22		85			85
Letter of credit fees	10		11		40			45
Bank-owned life insurance	10		12		39			43
Foreign exchange income	11		12		47			45
Brokerage fees	7		6		27			23
Net securities losses	—		—		(19		)	—
Other noninterest income	23		26		96			108
Total noninterest income	250		285		976			1,107
NONINTEREST EXPENSES
Salaries and benefits expense	250		248		1,009			961
Outside processing fee expense	65		99		255			366
Net occupancy expense	39		40		152			154
Equipment expense	14		11		48			45
Restructuring charges	14		13		53			45
Software expense	30		31		125			126
FDIC insurance expense	6		13		42			51
Advertising expense	8		9		30			28
Litigation-related expense	1		—		1			(2		)
Other noninterest expenses	21		19		79			86
Total noninterest expenses	448		483		1,794			1,860
Income before income taxes	400		330		1,535			1,234
Provision for income taxes	90		218		300			491
NET INCOME	310		112		1,235			743
Less income allocated to participating securities	2		—		8			5
Net income attributable to common shares	$	308	$	112	$	1,227		$	738
Earnings per common share:
Basic	$	1.91	$	0.65	$	7.31		$	4.23
Diluted	1.88		0.63		7.20			4.14

Comprehensive income	312		107		1,076			762

Cash dividends declared on common stock	99		52		309			193
Cash dividends declared per common share	0.60		0.30		1.84			1.09



CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries

	Fourth		Third			Second			First		Fourth		Fourth Quarter 2018 Compared To:
	Quarter		Quarter			Quarter			Quarter		Quarter		Third Quarter 2018					Fourth Quarter 2017
(in millions, except per share data)	2018		2018			2018			2018		2017		Amount			Percent		Amount			Percent
INTEREST INCOME
Interest and fees on loans	$	604	$	581		$	568		$	509	$	498	$	23		4	%	$	106		21	%
Interest on investment securities	71		66			64			64		64		5			8		7			12
Interest on short-term investments	29		28			18			17		16		1			3		13			73
Total interest income	704		675			650			590		578		29			4		126			22
INTEREST EXPENSE
Interest on deposits	43		35			28			16		13		8			22		30			N/M
Interest on short-term borrowings	—		1			—			—		—		(1		)	N/M		—			—
Interest on medium- and long-term debt	47		40			32			25		20		7			15		27			N/M
Total interest expense	90		76			60			41		33		14			18		57			N/M
Net interest income	614		599			590			549		545		15			3		69			13
Provision for credit losses	16		—			(29		)	12		17		16			N/M		(1		)	(7	)
Net interest income after provision for credit losses	598		599			619			537		528		(1		)	—		70			13
NONINTEREST INCOME
Card fees	64		61			60			59		91		3			6		(27		)	(30	)
Service charges on deposit accounts	51		53			53			54		55		(2		)	(4	)	(4		)	(9	)
Fiduciary income	51		51			52			52		50		—			—		1			2
Commercial lending fees	23		21			23			18		22		2			5		1			3
Letter of credit fees	10		9			11			10		11		1			6		(1		)	(5	)
Bank-owned life insurance	10		11			9			9		12		(1		)	(8	)	(2		)	(12	)
Foreign exchange income	11		12			12			12		12		(1		)	(1	)	(1		)	(2	)
Brokerage fees	7		7			6			7		6		—			—		1			7
Net securities (losses) gains	—		(20		)	—			1		—		20			N/M		—			—
Other noninterest income	23		29			22			22		26		(6		)	(20	)	(3		)	(12	)
Total noninterest income	250		234			248			244		285		16			7		(35		)	(13	)
NONINTEREST EXPENSES
Salaries and benefits expense	250		254			250			255		248		(4		)	(2	)	2			1
Outside processing fee expense	65		65			64			61		99		—			—		(34		)	(34	)
Net occupancy expense	39		38			37			38		40		1			1		(1		)	(4	)
Equipment expense	14		12			11			11		11		2			11		3			20
Restructuring charges	14		12			11			16		13		2			24		1			17
Software expense	30		32			32			31		31		(2		)	(5	)	(1		)	(3	)
FDIC insurance expense	6		11			12			13		13		(5		)	(50	)	(7		)	(56	)
Advertising expense	8		8			8			6		9		—			—		(1		)	(11	)
Litigation-related expense	1		—			—			—		—		1			N/M		1			N/M
Other noninterest expenses	21		20			23			15		19		1			5		2			11
Total noninterest expenses	448		452			448			446		483		(4		)	(1	)	(35		)	(7	)
Income before income taxes	400		381			419			335		330		19			5		70			21
Provision for income taxes	90		63			93			54		218		27			42		(128		)	(59	)
NET INCOME	310		318			326			281		112		(8		)	(3	)	198			N/M
Less income allocated to participating securities	2		2			2			2		—		—			—		2			N/M
Net income attributable to common shares	$	308	$	316		$	324		$	279	$	112	$	(8	)	(3	)%	$	196		N/M
Earnings per common share:
Basic	$	1.91	$	1.89		$	1.90		$	1.62	$	0.65	$	0.02		1	%	$	1.26		N/M
Diluted	1.88		1.86			1.87			1.59		0.63		0.02			1		1.25			N/M

Comprehensive income	312		296			290			178		107		16			5		205			N/M

Cash dividends declared on common stock	99		100			58			52		52		(1		)	(3	)	47			90
Cash dividends declared per common share	0.60		0.60			0.34			0.30		0.30		—			—		0.30			N/M

N/M - not meaningful



ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)
Comerica Incorporated and Subsidiaries

	2018												2017
(in millions)	4th Qtr			3rd Qtr			2nd Qtr			1st Qtr			4th Qtr

Balance at beginning of period	$	664		$	677		$	698		$	712		$	712

Loan charge-offs:
Commercial	19			23			17			36			26
Commercial mortgage	2			—			1			—			1
International	—			1			—			—			1
Consumer	—			1			2			1			1
Total loan charge-offs	21			25			20			37			29

Recoveries on loans previously charged-off:
Commercial	8			8			20			8			7
Commercial mortgage	—			1			1			—			2
International	—			—			1			—			2
Residential mortgage	1			—			—			—			1
Consumer	1			1			1			1			1
Total recoveries	10			10			23			9			13
Net loan charge-offs (recoveries)	11			15			(3		)	28			16
Provision for loan losses	19			1			(23		)	14			16
Foreign currency translation adjustment	(1		)	1			(1		)	—			—
Balance at end of period	$	671		$	664		$	677		$	698		$	712

Allowance for loan losses as a percentage of total loans	1.34		%	1.35		%	1.36		%	1.42		%	1.45		%

Net loan charge-offs (recoveries) as a percentage of average total loans	0.09			0.13			(0.02		)	0.23			0.13



ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited)
Comerica Incorporated and Subsidiaries

	2018												2017
(in millions)	4th Qtr			3rd Qtr			2nd Qtr			1st Qtr			4th Qtr

Balance at beginning of period	$	33		$	34		$	40		$	42		$	41
Add: Provision for credit losses on lending-related commitments	(3		)	(1		)	(6		)	(2		)	1
Balance at end of period	$	30		$	33		$	34		$	40		$	42



NONPERFORMING ASSETS (unaudited)
Comerica Incorporated and Subsidiaries

	2018												2017
(in millions)	4th Qtr			3rd Qtr			2nd Qtr			1st Qtr			4th Qtr

SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANS
Nonaccrual loans:
Business loans:
Commercial	$	141		$	149		$	171		$	242		$	309
Commercial mortgage	20			22			29			29			31
Lease financing	2			2			2			3			4
International	3			4			4			4			6
Total nonaccrual business loans	166			177			206			278			350
Retail loans:
Residential mortgage	36			34			29			29			31
Consumer:
Home equity	19			19			19			19			21
Total nonaccrual retail loans	55			53			48			48			52
Total nonaccrual loans	221			230			254			326			402
Reduced-rate loans	8			9			8			8			8
Total nonperforming loans	229			239			262			334			410
Foreclosed property	1			1			2			5			5
Total nonperforming assets	$	230		$	240		$	264		$	339		$	415

Nonperforming loans as a percentage of total loans	0.46		%	0.49		%	0.53		%	0.68		%	0.83		%
Nonperforming assets as a percentage of total loans and foreclosed property	0.46			0.49			0.53			0.69			0.84
Allowance for loan losses as a multiple of total nonperforming loans	2.9x			2.8x			2.6x			2.1x			1.7x
Loans past due 90 days or more and still accruing	$	16		$	28		$	20		$	36		$	35

ANALYSIS OF NONACCRUAL LOANS
Nonaccrual loans at beginning of period	$	230		$	254		$	326		$	402		$	444
Loans transferred to nonaccrual (a)	42			35			49			71			73
Nonaccrual loan gross charge-offs	(21		)	(25		)	(20		)	(37		)	(29		)
Loans transferred to accrual status (a)	(3		)	—			—			(3		)	—
Nonaccrual loans sold	(5		)	(9		)	(15		)	(10		)	(22		)
Payments/Other (b)	(22		)	(25		)	(86		)	(97		)	(64		)
Nonaccrual loans at end of period	$	221		$	230		$	254		$	326		$	402
(a) Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(b) Includes net changes related to nonaccrual loans with balances less than $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed property.



ANALYSIS OF NET INTEREST INCOME (unaudited)
Comerica Incorporated and Subsidiaries

	Years Ended
	December 31, 2018							December 31, 2017
	Average Balance					Average Rate		Average Balance					Average Rate
(dollar amounts in millions)				Interest							Interest

Commercial loans	$	30,534		$	1,416	4.64	%	$	30,415		$	1,162	3.82	%
Real estate construction loans	3,155			164		5.21		2,958			124		4.18
Commercial mortgage loans	9,131			429		4.69		9,005			358		3.97
Lease financing	470			18		3.82		509			13		2.63
International loans	1,021			51		4.97		1,157			47		4.07
Residential mortgage loans	1,983			75		3.77		1,989			74		3.70
Consumer loans	2,472			109		4.41		2,525			94		3.70
Total loans	48,766			2,262		4.64		48,558			1,872		3.85

Mortgage-backed securities	9,099			214		2.28		9,330			202		2.17
Other investment securities	2,711			51		1.86		2,877			48		1.66
Total investment securities	11,810			265		2.19		12,207			250		2.05

Interest-bearing deposits with banks	4,700			91		1.94		5,443			60		1.09
Other short-term investments	134			1		0.96		92			—		0.64
Total earning assets	65,410			2,619		3.99		66,300			2,182		3.29

Cash and due from banks	1,135							1,209
Allowance for loan losses	(695		)					(728		)
Accrued income and other assets	4,874							4,671
Total assets	$	70,724						$	71,452

Money market and interest-bearing checking deposits	$	22,378		111		0.50		$	21,585		33		0.15
Savings deposits	2,199			1		0.04		2,133			—		0.02
Customer certificates of deposit	2,092			10		0.46		2,471			9		0.36
Foreign office time deposits	25			—		1.19		56			—		0.64
Total interest-bearing deposits	26,694			122		0.46		26,245			42		0.16

Short-term borrowings	62			1		1.90		277			3		1.14
Medium- and long-term debt	5,842			144		2.42		4,969			76		1.51
Total interest-bearing sources	32,598			267		0.82		31,491			121		0.38

Noninterest-bearing deposits	29,241							31,013
Accrued expenses and other liabilities	1,076							996
Total shareholders' equity	7,809							7,952
Total liabilities and shareholders' equity	$	70,724						$	71,452

Net interest income/rate spread				$	2,352	3.17					$	2,061	2.91

Impact of net noninterest-bearing sources of funds						0.41							0.20
Net interest margin (as a percentage of average earning assets)						3.58	%						3.11	%



ANALYSIS OF NET INTEREST INCOME (unaudited)
Comerica Incorporated and Subsidiaries

	Three Months Ended
	December 31, 2018							September 30, 2018							December 31, 2017
	Average Balance					Average Rate		Average Balance					Average Rate		Average Balance					Average Rate
(dollar amounts in millions)				Interest							Interest							Interest

Commercial loans	$	30,651		$	379	4.91	%	$	30,371		$	365	4.74	%	$	30,719		$	311	4.02	%
Real estate construction loans	3,164			44		5.57		3,198			43		5.38		3,031			34		4.44
Commercial mortgage loans	9,051			114		4.96		9,084			110		4.84		9,054			93		4.08
Lease financing	495			5		3.74		464			4		3.69		470			4		3.38
International loans	1,035			14		5.25		1,072			13		4.99		1,122			12		4.41
Residential mortgage loans	1,968			19		3.81		1,962			18		3.71		2,014			19		3.66
Consumer loans	2,468			29		4.67		2,433			28		4.49		2,523			25		3.92
Total loans	48,832			604		4.90		48,584			581		4.74		48,933			498		4.04

Mortgage-backed securities	9,069			56		2.37		9,063			54		2.30		9,315			52		2.19
Other investment securities	2,704			15		2.30		2,698			12		1.72		2,840			12		1.69
Total investment securities	11,773			71		2.35		11,761			66		2.17		12,155			64		2.07

Interest-bearing deposits with banks	4,920			28		2.28		5,362			28		2.03		4,987			16		1.30
Other short-term investments	136			1		1.12		135			—		1.04		92			—		0.58
Total earning assets	65,661			704		4.23		65,842			675		4.05		66,167			578		3.46

Cash and due from banks	940							1,107							1,274
Allowance for loan losses	(673		)					(681		)					(726		)
Accrued income and other assets	4,902							4,942							4,683
Total assets	$	70,830						$	71,210						$	71,398

Money market and interest-bearing checking deposits	$	22,849		39		0.67		$	22,573		32		0.56		$	21,402		10		0.19
Savings deposits	2,181			—		0.05		2,208			1		0.05		2,152			—		0.02
Customer certificates of deposit	2,090			4		0.62		2,094			2		0.48		2,259			3		0.35
Foreign office time deposits	9			—		1.37		25			—		1.25		48			—		0.76
Total interest-bearing deposits	27,129			43		0.62		26,900			35		0.51		25,861			13		0.19

Short-term borrowings	72			—		2.18		85			1		1.95		116			—		1.16
Medium- and long-term debt	6,420			47		2.81		6,153			40		2.55		4,631			20		1.69
Total interest-bearing sources	33,621			90		1.04		33,138			76		0.90		30,608			33		0.42

Noninterest-bearing deposits	28,600							29,193							31,780
Accrued expenses and other liabilities	1,090							1,062							1,023
Total shareholders' equity	7,519							7,817							7,987
Total liabilities and shareholders' equity	$	70,830						$	71,210						$	71,398

Net interest income/rate spread				$	614	3.19					$	599	3.15					$	545	3.04

Impact of net noninterest-bearing sources of funds						0.51							0.45							0.23
Net interest margin (as a percentage of average earning assets)						3.70	%						3.60	%						3.27	%



CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Comerica Incorporated and Subsidiaries

								Accumulated
	Common Stock							Other									Total
	Shares				Capital			Comprehensive			Retained			Treasury			Shareholders'
(in millions, except per share data)	Outstanding		Amount		Surplus			Loss			Earnings			Stock			Equity

BALANCE AT DECEMBER 31, 2016	175.3		$	1,141	$	2,135		$	(383	)	$	7,331		$	(2,428	)	$	7,796
Cumulative effect of change in accounting principle	—		—		3			—			(2		)	—			1
Net income	—		—		—			—			743			—			743
Other comprehensive income, net of tax	—		—		—			19			—			—			19
Cash dividends declared on common stock ($1.09 per share)	—		—		—			—			(193		)	—			(193		)
Purchase of common stock	(7.5	)	—		—			—			—			(544		)	(544		)
Net issuance of common stock under employee stock plans	3.3		—		(24		)	—			(26		)	152			102
Net issuance of common stock for warrants	1.8		—		(30		)	—			(53		)	83			—
Share-based compensation	—		—		39			—			—			—			39
Reclassification of certain deferred tax effects	—		—		—			(87		)	87			—			—
Other	—		—		(1		)	—			—			1			—
BALANCE AT DECEMBER 31, 2017	172.9		1,141		2,122			(451		)	7,887			(2,736		)	7,963
Cumulative effect of change in accounting principles	—		—		—			1			14			—			15
Net income	—		—		—			—			1,235			—			1,235
Other comprehensive loss, net of tax	—		—		—			(159		)	—			—			(159		)
Cash dividends declared on common stock ($1.84 per share)	—		—		—			—			(309		)	—			(309		)
Purchase of common stock	(14.9	)	—		(3		)	—			—			(1,326		)	(1,329		)
Net issuance of common stock under employee stock plans	1.5		—		(9		)	—			(23		)	75			43
Net issuance of common stock for warrants	0.6		—		(10		)	—			(23		)	33			—
Share-based compensation	—		—		48			—			—			—			48
BALANCE AT DECEMBER 31, 2018	160.1		$	1,141	$	2,148		$	(609	)	$	8,781		$	(3,954	)	$	7,507



BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries


(dollar amounts in millions)	Business			Retail			Wealth
Three Months Ended December 31, 2018	Bank			Bank			Management			Finance			Other				Total
Earnings summary:
Net interest income (expense)	$	414		$	146		$	48		$	(9	)	$	15			$	614
Provision for credit losses	15			—			(1		)	—			2				16
Noninterest income	143			36			66			11			(6		)		250
Noninterest expenses	212			153			75			(1		)	9				448
Provision (benefit) for income taxes	61			6			8			(2		)	17				90
Net income (loss)	$	269		$	23		$	32		$	5		$	(19	)		$	310
Net credit-related charge-offs (recoveries)	$	12		$	—		$	(1	)	$	—		$	—			$	11

Selected average balances:
Assets	$	43,211		$	2,647		$	5,156		$	13,613		$	6,203			$	70,830
Loans	41,731			2,080			5,021			—			—				48,832
Deposits	29,961			20,588			4,126			916			138				55,729

Statistical data:
Return on average assets (a)	2.47		%	0.44		%	2.49		%	N/M			N/M				1.74		%
Efficiency ratio (b)	38.14			83.77			65.85			N/M			N/M				51.93

	Business			Retail			Wealth
Three Months Ended September 30, 2018	Bank			Bank			Management			Finance			Other				Total
Earnings summary:
Net interest income (expense)	$	413		$	141		$	46		$	(16	)	$	15			$	599
Provision for credit losses	(1		)	1			2			—			(2		)		—
Noninterest income	137			35			66			(7		)	3				234
Noninterest expenses	210			153			72			(1		)	18				452
Provision (benefit) for income taxes	77			5			9			(8		)	(20		)	(c)	63
Net income (loss)	$	264		$	17		$	29		$	(14	)	$	22			$	318
Net credit-related charge-offs	$	14		$	—		$	1		$	—		$	—			$	15

Selected average balances:
Assets	$	43,165		$	2,621		$	5,068		$	13,696		$	6,660			$	71,210
Loans	41,591			2,057			4,936			—			—				48,584
Deposits	30,286			20,765			3,988			929			125				56,093

Statistical data:
Return on average assets (a)	2.43		%	0.31		%	2.28		%	N/M			N/M				1.77		%
Efficiency ratio (b)	38.24			86.81			63.93			N/M			N/M				52.93

	Business			Retail			Wealth
Three Months Ended December 31, 2017	Bank			Bank			Management			Finance			Other				Total
Earnings summary:
Net interest income (expense)	$	394		$	123		$	43		$	(25	)	$	10			$	545
Provision for credit losses	17			(1		)	(5		)	—			6				17
Noninterest income	166			39			64			14			2				285
Noninterest expenses	239			160			73			(1		)	12				483
Provision (benefit) for income taxes	110			1			15			(8		)	100			(c)	218
Net income (loss)	$	194		$	2		$	24		$	(2	)	$	(106	)		$	112
Net credit-related charge-offs (recoveries)	$	17		$	—		$	(1	)	$	—		$	—			$	16

Selected average balances:
Assets	$	43,116		$	2,629		$	5,352		$	13,940		$	6,361			$	71,398
Loans	41,633			2,075			5,225			—			—				48,933
Deposits	32,011			20,938			4,184			394			114				57,641

Statistical data:
Return on average assets (a)	1.79		%	0.04		%	1.82		%	(0.06		)%	N/M				0.62		%
Efficiency ratio (b)	42.71			98.24			67.91			9.23			N/M				58.14


(a)	Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.


(b)	Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares.


(c)	Included discrete tax items of $23 million benefit and $103 million provision for the third quarter 2018 and fourth quarter 2017, respectively.

N/M - Not Meaningful



MARKET SEGMENT FINANCIAL RESULTS (unaudited)
Comerica Incorporated and Subsidiaries


(dollar amounts in millions)										Other			Finance
Three Months Ended December 31, 2018	Michigan			California			Texas			Markets			& Other				Total
Earnings summary:
Net interest income	$	188		$	207		$	121		$	92		$	6			$	614
Provision for credit losses	(7		)	36			(16		)	2			1				16
Noninterest income	74			40			36			96			4				250
Noninterest expenses	145			108			92			95			8				448
Provision for income taxes	23			22			16			14			15				90
Net income (loss)	$	101		$	81		$	65		$	77		$	(14	)		$	310
Net credit-related charge-offs	$	—		$	9		$	1		$	1		$	—			$	11

Selected average balances:
Assets	$	12,958		$	18,537		$	10,472		$	9,047		$	19,816			$	70,830
Loans	12,457			18,279			9,889			8,207			—				48,832
Deposits	20,245			17,230			8,919			8,281			1,054				55,729

Statistical data:
Return on average assets (a)	1.92		%	1.73		%	2.48		%	3.37		%	N/M				1.74		%
Efficiency ratio (b)	55.42			44.05			58.52			50.26			N/M				51.93

										Other			Finance
Three Months Ended September 30, 2018	Michigan			California			Texas			Markets			& Other				Total
Earnings summary:
Net interest income (expense)	$	185		$	199		$	121		$	95		$	(1	)		$	599
Provision for credit losses	4			3			(9		)	4			(2		)		—
Noninterest income	75			43			33			86			(3		)		234
Noninterest expenses	143			104			90			98			17				452
Provision (benefit) for income taxes	25			34			16			15			(27		)	(c)	63
Net income	$	88		$	101		$	57		$	64		$	8			$	318
Net credit-related charge-offs (recoveries)	$	8		$	5		$	4		$	(2	)	$	—			$	15

Selected average balances:
Assets	$	13,055		$	18,336		$	10,271		$	9,193		$	20,355			$	71,210
Loans	12,424			18,074			9,702			8,384			—				48,584
Deposits	20,721			16,894			8,904			8,520			1,054				56,093

Statistical data:
Return on average assets (a)	1.63		%	2.18		%	2.18		%	2.75		%	N/M				1.77		%
Efficiency ratio (b)	54.90			43.12			58.05			53.97			N/M				52.93

										Other			Finance
Three Months Ended December 31, 2017	Michigan			California			Texas			Markets			& Other				Total
Earnings summary:
Net interest income (expense)	$	175		$	190		$	114		$	82		$	(16	)		$	545
Provision for credit losses	6			33			(27		)	—			5				17
Noninterest income	81			43			34			111			16				285
Noninterest expenses	150			107			95			120			11				483
Provision for income taxes	36			36			31			22			93			(c)	218
Net income (loss)	$	64		$	57		$	49		$	51		$	(109	)		$	112
Net credit-related charge-offs	$	1		$	5		$	10		$	—		$	—			$	16

Selected average balances:
Assets	$	13,583		$	18,461		$	10,305		$	8,748		$	20,301			$	71,398
Loans	12,798			18,236			9,795			8,104			—				48,933
Deposits	21,806			18,222			9,366			7,738			509				57,641

Statistical data:
Return on average assets (b)	1.13		%	1.17		%	1.84		%	2.29		%	N/M				0.62		%
Efficiency ratio (c)	58.55			45.93			63.88			62.40			N/M				58.14


(a)	Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.


(b)	Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares.


(c)	Included discrete tax items of $23 million benefit and $103 million provision for the third quarter 2018 and fourth quarter 2017, respectively.

N/M - Not Meaningful



RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
Comerica Incorporated and Subsidiaries

Comerica believes non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate the adequacy of common equity and performance trends. Comerica believes the adjusted financial results provide a greater understanding of ongoing operations and enhance comparability of results with prior periods. Tangible common equity is used by Comerica to measure the quality of capital and the return relative to balance sheet risk.



ADJUSTED FINANCIAL RESULTS	Three Months Ended						Years Ended
	December 31,			September 30,			December 31,
(dollar amounts in millions, except per share data)	2018			2018			2018			2017
Noninterest Income:
Noninterest income	$	250		$	234		$	976		$	1,107
Securities repositioning	—			20			20			—
Proforma effect of adoption of accounting standard	—			—			—			(118		)
Adjusted noninterest income	$	250		$	254		$	996		$	989
Noninterest Expenses:
Noninterest expenses	$	448		$	452		$	1,794		$	1,860
Restructuring charges	(14		)	(12		)	(53		)	(45		)
One-time employee bonus	—			—			—			(5		)
Proforma effect of adoption of accounting standard	—			—			—			(118		)
Adjusted noninterest expenses	$	434		$	440		$	1,741		$	1,692
Pre-tax Income:
Pre-tax income	$	400		$	381		$	1,535		$	1,234
Securities repositioning	—			20			20			—
Restructuring charges	14			12			53			45
One-time employee bonus	—			—			—			5
Adjusted pre-tax income	$	414		$	413		$	1,608		$	1,284
Provision for Income Taxes:
Provision for income taxes	$	90		$	63		$	300		$	491
Tax on securities repositioning	—			5			5			—
Tax on restructuring charges	3			3			12			16
Tax on one-time employee bonus	—			—			—			2
Discrete tax items	—			23			48			(72		)
Adjusted provision for income taxes	$	93		$	94		$	365		$	437
Net Income:
Net Income	$	310		$	318		$	1,235		$	743
Securities repositioning, net of tax	—			15			15			—
Restructuring charges, net of tax	11			9			41			29
One-time employee bonus, net of tax	—			—			—			3
Discrete tax items	—			(23		)	(48		)	72
Adjusted net income	$	321		$	319		$	1,243		$	847

Diluted Earnings per Common Share:
Diluted earnings per common share	$	1.88		$	1.86		$	7.20		$	4.14
Securities repositioning, net of tax	—			0.09			0.09			—
Restructuring charges, net of tax	0.07			0.05			0.24			0.16
One-time employee bonus, net of tax	—			—			—			0.02
Discrete tax items	—			(0.14		)	(0.29		)	0.41
Adjusted diluted earnings per common share	$	1.95		$	1.86		$	7.24		$	4.73

Efficiency Ratio:
Reported	51.93		%	52.93		%	53.56		%	58.64		%
Adjusted	50.70			51.59			52.58			55.41

Securities repositioning refers to losses incurred on the sale of $1.3 billion of treasury securities that were replaced by higher-yielding treasuries with a similar duration of 3 years. Proforma effect of the adoption of accounting standard relates to the proforma 2017 impact of the new revenue recognition standard that became effective January 1, 2018 that is not reflected in 2017 results. Discrete tax items primarily include the charge to adjust deferred taxes resulting from the Tax Cuts and Jobs Act, tax benefits from the review of tax capitalization and recovery positions on fixed assets and software on the 2017 tax return as well as from employee stock transactions.



	December 31,			September 30,			December 31,
(dollar amounts in millions)	2018			2018			2017
Tangible Common Equity Ratio:
Common shareholders' equity	$	7,507		$	7,786		$	7,963
Less:
Goodwill	635			635			635
Other intangible assets	6			6			8
Tangible common equity	$	6,866		$	7,145		$	7,320

Total assets	$	70,818		$	71,448		$	71,567
Less:
Goodwill	635			635			635
Other intangible assets	6			6			8
Tangible assets	$	70,177		$	70,807		$	70,924

Common equity ratio	10.60		%	10.90		%	11.13		%
Tangible common equity ratio	9.78			10.09			10.32

Tangible Common Equity per Share of Common Stock:
Common shareholders' equity	$	7,507		$	7,786		$	7,963
Tangible common equity	6,866			7,145			7,320

Shares of common stock outstanding (in millions)	160			166			173

Common shareholders' equity per share of common stock	$	46.89		$	46.92		$	46.07
Tangible common equity per share of common stock	42.89			43.05			42.34

The tangible common equity ratio removes the effect of intangible assets from capital and total assets. Tangible common equity per share of common stock removes the effect of intangible assets from common shareholders equity per share of common stock.

COMERICA INC /NEW/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - January 16, 2019

Attached files

COMERICA INC /NEW/ Reports