Attached files
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| EX-99.1 - EXHIBIT 99.1 - COMERICA INC /NEW/ | a2018q4pressrelease-ex991.htm |
| 8-K - 8-K - COMERICA INC /NEW/ | a2018q4pressrelease-form8xk.htm |
Comerica Incorporated Fourth Quarter 2018 and Full-Year 2018 Financial Review January 16, 2019 Safe Harbor Statement Any statements in this presentation 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 presentation 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 Growth in Efficiency and Revenue initiative (“GEAR Up”), 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 presentation 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. 2
Financial Summary ($ in millions, except per share data) 4Q18 3Q18 2018 2017 Earnings per share1 $1.88 $1.86 $7.20 $4.14 Adjusted earnings per share1,2 1.95 1.86 7.24 4.73 Net interest income 614 599 2,352 2,061 Provision for credit losses 16 -0- (1) 74 Noninterest income3 250 234 976 1,107 Adjusted noninterest income2,4 250 254 996 989 Noninterest expenses 448 452 1,794 1,860 Adjusted noninterest expenses2 434 440 1,741 1,692 Provision for income taxes 90 63 300 491 Adjusted provision for income taxes2 93 94 365 437 Net income 310 318 1,235 743 Adjusted net income2 321 319 1,243 847 ROE5 16.36% 16.15% 15.82% 9.34% ROA6 1.74 1.77 1.75 1.04 Efficiency Ratio7 51.93% 52.93% 53.56% 58.64% 1Diluted earnings per common share ● 2See Reconciliation of Non-GAAP Financial Measures in Appendix ● 3Includes gain/(loss) related to deferred compensation plan as follows: $(7)MM in 4Q18; $3MM in 3Q18; $(2)MM in FY18; $8MM in FY17. Amounts offset in noninterest expense. ● 43Q18 adj. excludes $20MM loss related to repositioning of securities portfolio ● 5Return on average common shareholders’ equity ● 6Return on average assets ● 7Noninterest expenses as a percentage of net interest income & noninterest income excluding net gains (losses) from securities & derivative contract tied to the conversion rate of Visa Class B shares 3 Reconciliation of Adjusted Net Income 4Q18 3Q18 FY18 FY17 Per Per Per Per ($ in millions, except per share data) $ Share1 $ Share1 $ Share1 $ Share1 Net income $310 $1.88 $318 $1.86 $1,235 $7.20 $743 $4.14 Securities repositioning2 - - 15 0.09 15 0.09 - - Restructuring charges2 11 0.07 9 0.05 41 0.24 29 0.16 Discrete tax benefits - - (23) (0.14) (48) (0.29) 72 0.41 One-time employee bonus2 ---- - - 30.02 Adjusted net income $321 $1.95 $319 $1.86 $1,243 $7.24 $847 $4.73 Efficiency Ratio4 51.93% 52.93% 53.56% 58.64% Adjusted Efficiency Ratio3,4 50.70 51.59 52.58 55.41 1Based on diluted average common shares ● 2Net of tax ● 3See Reconciliation of Non-GAAP Financial Measures in Appendix ● 4Noninterest expenses as a percentage of net interest income & noninterest income excluding net gains (losses) from securities & a derivative contract tied to the conversion rate of Visa Class B shares 4
Full-Year 2018 Results Robust revenue, strong credit, expense control & capital management Net Interest Income Efficiency Ratio1 Net Charge-offs2 ($ in millions) (In basis points) 2,352 67.5% 2,061 58.6% 32 1,797 53.6% 19 11 2016 2017 2018 2016 2017 2018 2016 2017 2018 Pre-tax Income Diluted Earnings Return on Average Common ($ in millions) Per Share Shareholders’ Equity $7.20 1,535 1,234 15.82% $4.14 670 9.34% $2.68 6.22% 2016 2017 2018 2016 2017 2018 2016 2017 2018 1Noninterest expenses as a percentage of net interest income & noninterest income excluding net gains (losses) from securities & a derivative contract tied to the conversion rate of Visa Class B shares ● 2Net credit-related charge-offs/average total loans 5 Fourth Quarter 2018 Results Revenue growth & tight cost control results in ROE of 16% Change From Key QoQ Performance Drivers ($ in millions, except per share data) 4Q18 3Q18 4Q17 Average loans $48,832 $248 $(101) . Loan growth accelerated in December Average deposits 55,729 (364) (1,912) . Deposits relatively stable, as expected Net interest income $614 $15 $69 . Net interest income reflects loan & deposit pricing control as rates rose; Net interest Provision for credit losses 16 16 (1) margin increased 10 bps to 3.70% Noninterest income1 250 16 (35) . Strong credit quality continued Adjusted Noninterest income2,3 250 (4) (1) . Ex-deferred comp3, adjusted noninterest Noninterest expenses1 448 (4) (35) income grew $6MM with higher card fees Adjusted Noninterest expense2,3 434 (6) 3 . Ex-deferred comp3, adjusted expenses Provision for income tax 90 27 (128) increased $5MM with higher technology spend partly offset by lower FDIC expense Net income 310 (8) 198 . 3Q18 discrete tax benefits of $23MM Earnings per share4 $1.88 $0.02 $1.25 Adjusted Earnings per share2,4 1.95 0.09 0.67 . Repurchased 6.3MM shares; returned $599MM to shareholders through buyback Equity repurchases5 $500 - $352 & dividend Dividend declared 0.60 - 0.30 4Q18 compared to 3Q18 ● 13Q18 included $20MM loss related to repositioning of securities portfolio; 4Q17 excludes impact of accounting change ● 2See Reconciliation of Non-GAAP Financial Measures in Appendix ● 3Includes gain/(loss) related to deferred compensation plan of $(7)MM in 4Q18 & $3MM in 3Q18. Amounts offset in noninterest expense ● 4Diluted earnings per common share ● 54Q18 repurchases under the equity repurchase program 6
Average Loans Growth accelerates in December; Loan yields increase 16 basis points Total Loans Average loans increase $248MM ($ in billions) Loan Yields + $363MM National Dealer Services 50.2 + $220MM Energy 49.2 48.9 48.8 49.0 - $284MM Mortgage Banker 48.4 48.6 Loan yield +16 bps +21 bps increase in rates - 3 bps loan fees 4.90 - 2 bps portfolio dynamics 4.74 4.63 4.26 Loan Commitments 4.04 ($ in millions; Period-end) 51.8 53.1 49.8 49.6 51.1 4Q17 1Q18 2Q18 3Q18 4Q18 3Q18 4Q18 Average Balances Period-end 4Q17 1Q18 2Q18 3Q18 4Q18 4Q18 compared to 3Q18 7 Average Deposits Deposits relatively stable; Rates increase 11 basis points Total Deposits ($ in billions) Deposit Rates1 57.6 56.1 55.8 56.1 55.7 56.0 55.6 Average deposits decrease $364MM - $285MM Corporate Banking - $176MM Retail Banking - $174MM Technology & Life Sciences + $261MM General Middle Market + $138MM Wealth Management Loan to deposit ratio2 of 90% 0.62 0.51 0.42 0.25 0.19 4Q17 1Q18 2Q18 3Q18 4Q18 3Q18 4Q18 Average Balances Period-end 4Q18 compared to 3Q18 ● 1Interest costs on interest-bearing deposits ● 2At 12/31/18 8
Securities Portfolio Yields increase 18 basis points Securities Portfolio ($ in billions) Treasury Securities & Other Mortgage-backed Securities (MBS) Securities Yields Duration of 3.0 years1 . Extends to 3.6 years under a 200 bps 12.1 11.9 11.8 11.8 11.8 11.9 12.0 instantaneous rate increase1 Net unrealized pre-tax loss of $181MM2 Net unamortized premium of $13MM3 9.3 9.2 9.1 9.1 9.1 9.2 9.3 Yields benefitted from . Repositioning of $1.3B Treasuries (9/27/18) . Typical quarterly paydown of $400MM - 2.35 $500MM being replaced at higher yield 2.17 2.07 2.09 2.12 4Q17 1Q18 2Q18 3Q18 4Q18 3Q18 4Q18 Average Balances Period-end 12/31/18 ● 1Estimated as of 12/31/18 ● 2Net unrealized pre-tax gain/loss on the available-for-sale (AFS) portfolio ● 3Net unamortized premium on the MBS portfolio 9 Net Interest Income NIM increases 10 basis points Net Interest Income $599MM 3Q18 3.60% ($ in millions) NIM + 23MM Loans + 0.12 614 590 599 +$25MM Higher rates +0.15 + 3MM Higher balances --- 549 545 - 3MM Loan fees -0.02 -2MMPortfolio dynamics -0.01 + 1MM Balances at Fed + 0.03 + 3MM Higher rates +0.02 3.70 - 2MM Lower balances +0.01 3.62 3.60 + 5MM Securities + 0.03 3.41 + 4MM Portfolio reposition +0.02 3.27 + 1MM Higher rates +0.01 - 8MM Deposits - 0.04 -7MM Higher rates -0.04 -1MM Balance mix --- - 6MM Wholesale funding - 0.04 -4MM Higher rates -0.03 4Q17 1Q18 2Q18 3Q18 4Q18 -2MM Higher balances -0.01 Net Impact due to rates: $614MM 4Q18 3.70% $18MM & 11 bps on the NIM 4Q18 compared to 3Q18 10
Credit Quality Strong Positive credit migration continued Allowance for Credit Losses ($ in millions) Allowance for Loan Losses as a % of Total Loans $11MM in net charge-offs2 or 9 bps 754 738 711 697 701 . $21MM Gross Charge-offs (3Q18 $25MM) . $10MM Recoveries (3Q18 $10MM) 1.45 1.42 1.36 1.35 1.34 $122MM decrease in criticized loans . Energy criticized loans decreased $64MM 4Q17 1Q18 2Q18 3Q18 4Q18 Criticized Loans1 Allowance for Loan Losses / total NPLs ($ in millions) NALs Criticized as a % of Total Loans 2,231 2.8 x 2.9 x 2,120 2.6 x 1,765 1,670 1,548 2.1 x 1.7 x 4.5 4.3 3.5 3.4 3.1 402 326 254 230 221 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 12/31/18 ●1Criticized loans are consistent with regulatory defined Special Mention, Substandard, & Doubtful categories ● 2Net credit-related charge-offs 11 Noninterest Income Customer-driven fees increase 2% Noninterest Income1,2 ($ in millions) Securities losses due to repositioning + $20MM Securities losses Impact of accounting change - $10MM Deferred comp (offset in noninterest expense) 285 + $3MM Card fees 34 254 244 248 250 + $2MM Commercial lending (syndication fees) 251 20 234 GEAR Up Supported Fee Growth ($ in millions) Card Fees +10% Fiduciary +4% Brokerage +17% (ex. accounting change1) 333 244 198 206 112 27 - - 23 - 221 4Q17 1Q18 2Q18 3Q18 4Q18 2017 2018 2017 2018 2017 2018 4Q18 compared to 3Q18 ● 1See Reconciliation of Non-GAAP Financial Measures in Appendix ● 2Includes gain/(loss) related to deferred compensation plan as follows: $(7)MM in 4Q18; $3MM in 3Q18; $1MM in 2Q18,1Q18 & 4Q17. Amounts offset in noninterest expense for same periods. 12
Noninterest Expense Careful cost management drives efficiency ratio1 below 52% Noninterest Expenses2 ($ in millions) Impact of accounting change - $4MM Salaries & benefits Restructuring 1X employee bonus $5MM 4Q17 - Deferred comp (offset in noninterest income) 483 + Technology related contract labor 34 446 448 452 448 - $5MM FDIC assessment 12 13 16 11 14 440 + $2MM Equipment 431 430 437 434 GEAR Up Drives Efficiency Improvements (In percentage points) Efficiency Ratio1 Adj. Efficiency Ratio1,2 58.1 54.2 51.9 50.7 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 4Q18 4Q17 4Q18 4Q18 compared to 3Q18 ● 1Noninterest expenses as a percentage of net interest income & noninterest income excluding net gains (losses) from securities & a derivative contract tied to the conversion rate of Visa Class B shares ● 2See Reconciliation of Non-GAAP Financial Measures in Appendix 13 Active Capital Management Capital Target 9.5% - 10.0% CET1 by FYE191 4Q18 share activity Increasing Shareholder Payout ($ in millions) . 6.3MM shares repurchased2 ($500MM) Equity Repurchases Dividends 1,627 FY18 share activity 309 . Returned $1.6B to shareholders • 14.8MM shares repurchased ($1.3B) 724 • Increased dividend 69% to $1.84 per share 392 390 457 193 1,318 154 Solid performance & strong capital position enables 143 148 531 249 242 303 continued meaningful return of capital 2014 2015 2016 2017 2018 Strong Capital Generation (CET1)3 Dividends Per Share Growth (In percentage points) 11.68 1.84 11.09 11.12 10.50 10.54 1.09 0.89 0.79 0.83 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 12/31/18 ● 1Outlook as of 1/16/19 ● 2Shares repurchased under equity repurchase program ● 34Q18 Estimated 14
Benefit from Rise in Interest Rates Balance sheet remains well-positioned for current rate environment Loans Predominantly Floating Rate Estimated increase in FY19 ($ in billions; 4Q18 Period-end) Fixed Rate net interest income resulting from ~10% full-year benefits of FY18 rate increases Prime-Based Total ~15% ~$130-150MM $50.2 30-day LIBOR ~65% Outcomes may differ due to many variables, including balance sheet movements (loan, deposit & wholesale 60-day+ LIBOR funding levels), pace of LIBOR rise & deposit betas ~10% Cumulative Impact of Rate Increases1 Deposits Primarily Noninterest-bearing 4.90 ($ in billions; 4Q18 Average) - 2.20 3.17 Retail Commercial Noninterest- Noninterest- Beta 89% Beta 25% bearing bearing 0.62 8% Total 44% - $55.7 0.25 0.14 Retail Commercial Interest- Interest- 3Q15 4Q18 3Q15 4Q18 3Q15 4Q18 bearing bearing 28% 20% Fed Funds Loan Yields Deposit Costs 12/31/18 ● Outlook as of 1/16/19 ● 1Beta: change in loan yields or interest-bearing deposit costs expressed as a percentage of the increase in the federal funds rate 15 Management Outlook for FY19 Continue to drive shareholder value Assuming continuation of current economic & rate environment Average • Growth in most business lines + 2-4% Loans • Maintain pricing & underwriting discipline Average • Customers’ efficient management of cash driving a decline in noninterest-bearing deposits -1-2% Deposits • Continued focus on relationship approach to attract and retain customers Net Interest • Net benefit from higher rates ($130-150MM), loan growth & securities portfolio repositioning + 4-5% Income • Headwinds: higher wholesale funding & lower nonaccrual recoveries Provision 15-25 bps • Strong credit quality continues; Net charge-offs to remain low Noninterest • Increases in card and fiduciary fees + 2-3% Income • Partly offset by lower derivatives & deposit service charges Noninterest • Stable, excluding FY18 $53MM in restructuring expenses -3% • Lower compensation (incentives partly offset by merit), pension, & FDIC expense ($16MM) Expenses • Rise in outside processing tied to revenue, technology costs & inflationary pressures • Excludes impact from employee stock transactions Tax Rate ~23% • FY18 included $48MM in discrete benefits • Reach target by FYE19 through continued return of excess capital at a measured pace Capital 9.5-10% • Strong performance & excess capital drive buyback which is a significant contributor to CET1 Target Management increasing earnings per share Outlook as of 1/16/19 ● FY19 outlook compared to FY18 actual results based on GAAP reported amounts 16
Appendix Average Loans by Business and Market By Line of Business 4Q18 3Q18 4Q17 By Market 4Q18 3Q18 4Q17 Middle Market Michigan $12.4 $12.4 $12.8 General $11.7 $11.7 $11.7 Energy 2.0 1.8 2.0 California 18.3 18.1 18.2 National Dealer Services 7.4 7.0 7.1 Entertainment 0.8 0.7 0.7 Texas 9.9 9.7 9.8 Tech. & Life Sciences 3.9 4.0 3.5 Other Markets1 8.2 8.4 8.1 Environmental Services 1.2 1.1 1.0 Total Middle Market $27.0 $26.4 $26.0 TOTAL $48.8 $48.6 $48.9 Corporate Banking US Banking 2.9 2.9 3.4 International 1.3 1.4 1.4 . Middle Market: Serving companies with Commercial Real Estate 5.2 5.3 5.2 revenues generally between $20-$500MM Mortgage Banker Finance 1.7 2.0 1.9 . Corporate Banking: Serving companies (and Small Business 3.6 3.7 3.8 their U.S. based subsidiaries) with revenues BUSINESS BANK $41.7 $41.6 $41.6 generally over $500MM Retail Banking 2.1 2.1 2.1 . Small Business: Serving companies with RETAIL BANK $2.1 $2.1 $2.1 revenues generally under $20MM Private Banking 5.0 4.9 5.2 WEALTH MANAGEMENT $5.0 $4.9 $5.2 TOTAL $48.8 $48.6 $48.9 $ in billions ● Totals shown above may not foot due to rounding ● 1Other Markets includes Florida, Arizona, the International Finance Division and businesses that have a significant presence outside of the three primary geographic markets 18
Full-Year Average Loans by Business and Market By Line of Business 2018 2017 By Market 2018 2017 Middle Market Michigan $12.5 $12.7 General $11.8 $11.9 Energy 1.9 2.1 California 18.3 18.0 National Dealer Services 7.3 7.0 Entertainment 0.7 0.7 Texas 9.8 10.0 Tech. & Life Sciences 3.8 3.3 Other Markets1 8.1 7.9 Environmental Services 1.1 0.9 Total Middle Market $26.6 $25.8 TOTAL $48.8 $48.6 Corporate Banking US Banking 3.0 3.2 International 1.3 1.5 . Middle Market: Serving companies with Commercial Real Estate 5.3 5.2 revenues generally between $20-$500MM Mortgage Banker Finance 1.7 1.8 . Corporate Banking: Serving companies (and Small Business 3.7 3.8 their U.S. based subsidiaries) with revenues BUSINESS BANK $41.6 $41.2 generally over $500MM Retail Banking 2.1 2.1 . Small Business: Serving companies with RETAIL BANK $2.1 $2.1 revenues generally under $20MM Private Banking 5.1 5.2 WEALTH MANAGEMENT $5.1 $5.3 TOTAL $48.8 $48.6 $ in billions ● Totals shown above may not foot due to rounding ● 1Other Markets includes Florida, Arizona, the International Finance Division and businesses that have a significant presence outside of the three primary geographic markets 19 Average Deposits by Business and Market By Line of Business 4Q18 3Q18 4Q17 By Market 4Q18 3Q18 4Q17 Middle Market Michigan $20.2 $20.7 $21.8 General $13.7 $13.4 $14.6 Energy 0.5 0.5 0.6 California 17.2 16.9 18.2 National Dealer Services 0.3 0.3 0.3 Texas 8.9 8.9 9.4 Entertainment 0.1 0.1 0.1 1 Tech. & Life Sciences 6.1 6.3 5.7 Other Markets 8.3 8.5 7.7 Environmental Services 0.1 0.1 0.2 Finance/Other2 1.1 1.1 0.5 Total Middle Market $20.9 $20.8 $21.5 TOTAL $55.7 $56.1 $57.6 Corporate Banking US Banking 2.0 2.1 2.4 International 1.8 2.0 2.1 . Middle Market: Serving companies with Commercial Real Estate 1.5 1.5 2.1 revenues generally between $20-$500MM Mortgage Banker Finance 0.6 0.7 0.6 Small Business 3.1 3.1 3.3 . Corporate Banking: Serving companies (and BUSINESS BANK $30.0 $30.3 $32.0 their U.S. based subsidiaries) with revenues Retail Banking 20.6 20.8 20.9 generally over $500MM RETAIL BANK $20.6 $20.8 $20.9 . Small Business: Serving companies with Private Banking 3.9 3.7 4.0 revenues generally under $20MM WEALTH MANAGEMENT $4.1 $4.0 $4.2 Finance/Other2 1.1 1.1 0.5 TOTAL $55.7 $56.1 $57.6 $ in billions ● Totals shown above may not foot due to rounding ● 1Other Markets includes Florida, Arizona, the International Finance Division and businesses that have a significant presence outside of the three primary geographic markets ● 2Finance/Other includes items not directly associated with the geographic markets or the three major business segments 20
Full-Year Average Deposits by Business and Market By Line of Business 2018 2017 By Market 2018 2017 Middle Market Michigan $20.8 $21.8 General $13.6 $14.5 Energy 0.5 0.7 California 17.0 17.5 National Dealer Services 0.3 0.3 Texas 9.0 9.6 Entertainment 0.1 0.1 1 Tech. & Life Sciences 6.1 5.7 Other Markets 8.1 7.9 Environmental Services 0.1 0.1 Finance/Other2 1.1 0.4 Total Middle Market $20.8 $21.5 TOTAL $55.9 $57.3 Corporate Banking US Banking 2.1 2.2 International 1.9 2.2 . Middle Market: Serving companies with Commercial Real Estate 1.5 2.1 revenues generally between $20-$500MM Mortgage Banker Finance 0.6 0.7 Small Business 3.1 3.2 . Corporate Banking: Serving companies (and BUSINESS BANK $30.1 $32.0 their U.S. based subsidiaries) with revenues Retail Banking 20.8 20.8 generally over $500MM RETAIL BANK $20.8 $20.8 . Small Business: Serving companies with Private Banking 3.7 3.8 revenues generally under $20MM WEALTH MANAGEMENT $3.9 $4.1 Finance/Other2 1.1 0.4 TOTAL $55.9 $57.3 $ in billions ● Totals shown above may not foot due to rounding ● 1Other Markets includes Florida, Arizona, the International Finance Division and businesses that have a significant presence outside of the three primary geographic markets ● 2Finance/Other includes items not directly associated with the geographic markets or the three major business segments 21 Interest Rate Sensitivity Remain well positioned for rising rates 0.1 Standard Model Assumptions Estimated Net Interest Income: Annual (12 month) Sensitivities 200 bps gradual, Interest Rates Based on Various Assumptions non-parallel rise Additional Scenarios are Relative to 4Q18 Standard Model ($ in millions) Loan Balances Modest increase Deposit Balances Moderate decrease Historical price movements Deposit Pricing (Beta) ~150 with short-term rates ~140 Held flat with prepayment ~115 Securities Portfolio reinvestment ~80 Loan Spreads Held at current levels ~65 Third-party projections and MBS Prepayments historical experience No additions Hedging (Swaps) modeled Up 100 bps Addl. $2B Addl. 20% Standard Addl. ~3% Deposit Increase in Model Loan Growth Decline Beta 12/31/18 ● For methodology see the Company’s Form 10-Q, as filed with the SEC. Estimates are based on simulation modeling analysis. 22
Commercial Real Estate Line of Business Long history of working with well established, proven developers CRE by Property Type1 CRE by Market1 ($ in millions; Period-end) ($ in millions; Period-end, based on location of property) Single Office Family Multi use Michigan 7% 5% Commercial 8% 4% 10% Land Carry Other 5% 16% Retail California Other 10% Total 45% Total 6% $4,430 $4,430 Texas Multifamily 34% 50% Credit Quality CRE by Loan Type ($ in millions; Period-end) 4Q17 3Q18 4Q18 ($ in millions; Period-end) 3Q18 4Q18 Criticized2 $66 $85 $84 Real Estate Construction $2,780 53% $2,687 53% Ratio 1.3% 1.6% 1.7% Commercial Mortgages 1,760 33% 1,743 34% Nonaccrual $3 $3 $2 $4,540 86% $4,430 87% Ratio 0.06% 0.05% 0.04% Commercial & Other 720 14% 661 13% Net charge-offs (recoveries) -0- -0- -0- Total $5,260 100% $5,091 100% 12/31/18 ● 1Excludes CRE line of business loans not secured by real estate ● 2Criticized loans are consistent with regulatory defined Special Mention, Substandard & Doubtful categories 23 Energy Line of Business Credit quality continues to improve; balances stable Energy Line of Business Loans . Focus on full relationships with larger, ($ in millions; Period-end) sophisticated E&P companies (access to a Midstream Services Exploration & Production variety of capital sources, hedging & diverse 2,163 geographic footprint) . Expect to maintain portfolio at ~4% of total loans 1,836 1,848 1,832 1,734 Mixed . Robust analysis of collateral18% 1,771 Energy Line of Business 1 1,346 1,395 Criticized Loans 1,499 508 1,400 468 ($ in millions) NALs 319 269 205 195 152 94 91 100 295 301 298 243 233 108 102 60 53 48 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 12/31/18 ● 1Criticized loans are consistent with regulatory defined Special Mention, Substandard & Doubtful categories 24
12/31/18 recreational vehicles, andnon-floorplanloans) recreational 12/31/18 Other Asian Other Toyota/Lexus 11% 65+ yearsoffloor plan lending National DealerServices with reputationforconsistent, reliable approach experience years 50+ Mortgage BankerFinance . . . . . . . ● ● 12% 1 1 Other includes obligations where a primary franchiseis obligations Other includes (MBA) Source: MortgageBankers Association Mortgage Financ 14% As of 4Q18: Period-end loans:$2.0B Strong creditquality home purchasesas Underlying mortgagesare Granular portfolio with100+relationships Focus onfullbanking relationships monitoring andcustomerservice Extensive backroomprovidescollateral market residential mortgageorigin Provide warehousefin 1 • • • Michigan 22% Other 13% Other Texas 8% 22% Michigan 57% California No charge-offsNo since2010 Industry: 74%purchase Comerica: 87%purchase (Based on period-end loan outstandings) (Based Franchise Distribution Geographic Dispersion Other European Honda/Acura 12% $8.1B Total Total 14% opposed to refinances opposed to ancing: bridgefrom ation tosaleend typically relatedto 1 Nissan/ Infiniti Ford 9% 5% indeterminable (rental companies, heavytruck, car and leasing indeterminable Mercedes Fiat/Chrysler 3% e Forecast as of 12/20/18; 4Q18 also estimated 4Q18 also Forecast asof12/20/18; e 12% GM 8% 4Q13 3.2 5.3 . . . . Floor Plan MBA Mortgage Originations Forecast 3Q13 1,605 Q811 Q931 4Q19 3Q19 2Q19 1Q19 4Q18 1Q14 3.2 5.3 392 1,109 performance company inventory and Robust monitoringof Strong creditquality dealerships ingroup) more Focus on“MegaDealer”(fiveor Top tierstrategy 4Q13 2Q14 3.5 5.7 1Q14 886 3Q14 3.2 5.5 2Q14 1,319 4Q14 3.4 5.7 3Q14 1,595 Actual MBAMortgage Origination Volumes 1Q15 3.5 5.9 315 4Q14 1,397 2Q15 3.6 6.0 1Q15 1,399 Average Loans Average Loans 3Q15 3.5 6.0 Purchase 2Q15 2,089 ● 2 3Q15 2,136 ($ in millions) 4Q15 3.7 6.2 ($ in billions) ($ in billions) $ in billions 1Q16 3.8 6.2 4Q15 1,742 448 2Q16 4.0 6.5 1Q16 1,674 2Q16 2,145 3Q16 3.8 6.3 Refinance 4Q16 4.0 6.6 3Q16 2,544 4Q16 2,352 1Q17 4.1 6.8 460 1Q17 1,450 2Q17 4.3 7.1 2Q17 1,780 3Q17 3.9 6.9 3Q17 1,974 4Q17 4.1 7.1 4Q17 1,861 1,2 1Q18 4.2 7.3 1Q18 1,435 2Q18 4.3 7.4 396 2Q18 1,784 3Q18 3.8 7.0 1 3Q18 1,961 4Q18 4.1 7.4 4Q18 26 25 1,677
Technology and Life Sciences 20+ years experience provides competitive advantage Technology & Life Sciences Avg. Loans ($ in billions) . Strong relationships with top-tier investors Equity Fund Services 3.8 4.0 3.9 . Granular portfolio: ~760 customers (including 3.5 3.5 ~245 customers in Equity Fund Services) 3.3 . Manage concentration to numerous verticals to ensure widely diversified portfolio 2.6 2.5 1.9 2.0 2.1 2.4 . Closely monitor cash balances and maintain robust backroom operation 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 . 11 offices throughout US & Canada Customer Segment Overview (based on period-end loans) . Recent growth driven by Equity Fund Services Growth • Commercial banking services for venture ~15% capital & private equity firms Leveraged Equity Fund Finance • Bridge financing for capital calls Total Services ~10% $3.8B ~65% • Strong credit profile Early Stage ~5% Late Stage ~5% 12/31/18 27 GEAR Up: Growth in Efficiency And Revenue Helping drive revenue growth & expense reductions Incremental Total Expense 2016 ~$ 25MM+ ~$ 25MM+ 72% Benefits 52% 2017 ~$125MM ~$150MM Efficiency ratio1 ≤60% by 2018 ~$ 50MM ~$200MM FYE18 2019 ~$ 15MM ~$215MM 2Q16 4Q18 Revenue 2017 ~$ 30MM ~$ 30MM Benefits 2018 ~$ 40MM ~$ 70MM 16.36% 2019 ~$ 20MM ~$ 90MM Driving to a double-digit 5.44% Restructuring 2016 $ 93MM $ 93MM ROE Expenses 2017 $ 45MM $138MM 2Q16 4Q18 2018 $ 53MM $191MM Pre-tax $ ● Estimates & outlook as of 1/16/19 ● GEAR Up initiative launched post 2Q16 ● 1Noninterest expenses as a percentage of net interest income & noninterest income excluding net gains (losses) from securities & a derivative contract tied to the conversion rate of Visa Class B shares 28
Holding Company Debt Rating Senior Unsecured/Long-Term Issuer Rating Moody’s S&P Fitch BB&T A2 A- A+ Cullen Frost A3 A- -- M&T Bank A3 A- A Comerica A3 BBB+ A BOK Financial Corporation A3 BBB+ A Huntington Baa1 BBB+ A- Fifth Third Baa1 BBB+ A- Peer Banks KeyCorp Baa1 BBB+ A- SunTrust Baa1 BBB+ A- Regions Financial Baa2 BBB+ BBB+ First Horizon National Corp Baa3 BBB- BBB- Zions Bancorporation Baa3 BBB+ BBB U.S. Bancorp A1 A+ AA- Wells Fargo & Company A2 A- A+ PNC Financial Services Group A3 A- A+ JP Morgan A2 A- AA- Large Banks Bank of America A3 A- A+ As of 1/15/19 ● Source: S&P Global Market Intelligence ● Debt Ratings are not a recommendation to buy, sell, or hold securities 29 Reconciliation of Non-GAAP Financial Measures (dollar amounts in millions, except per share data) 4Q18 3Q18 4Q17 (dollar amounts in millions, except per share data) 4Q18 3Q18 4Q17 Noninterest Income: Net Income: Noninterest income $250 $234 $285 Net income $310 $318 $112 Securities repositioning — 20 — Securities repositioning, net of tax — 15 — Proforma effect of adopting new accounting standard — — (34) Restructuring charges, net of tax 11 9 8 Adjusted noninterest income $250 $254 $251 One-time employee bonus, net of tax — — 3 Noninterest Expenses: Discrete tax items — (23) 103 Noninterest expenses $448 $452 $483 Adjusted net income $321 $319 $226 Restructuring charges (14) (12) (13) Diluted Earnings per Common Share: One-time employee bonus — — (5) Diluted earnings per common share $1.88 $1.86 $0.63 Proforma effect of adopting new accounting standard — — (34) Securities repositioning, net of tax — 0.09 — Adjusted noninterest expenses $434 $440 $431 Restructuring charges, net of tax 0.07 0.05 0.04 Pre-tax Income: One-time employee bonus, net of tax — — 0.02 Pre-tax income $400 $381 $330 Discrete tax items — (0.14) (0.59) Securities repositioning — 20 — Adjusted diluted earnings per common share $1.95 $1.86 $1.28 Restructuring charges 14 12 13 Efficiency ratio: One-time employee bonus — — 5 Reported 51.93% 52.93% 58.14% Adjusted pre-tax income $414 $413 $348 Adjusted 50.70 51.59 54.23 Provision for Income Taxes: Provision for Income Taxes: $90 $63 $218 • 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 Tax on securities repositioning — 5 — recovery positions on fixed assets and software on the 2017 tax return as well as from Tax on restructuring charges 3 3 5 employee stock transactions. Tax on one-time employee bonus — — 2 • Securities repositioning refers to losses on sale of securities resulting from Discrete tax items — 23 (103) repositioning $1.3 billion of treasury securities by purchasing securities yielding higher Adjusted provision for income taxes $93 $94 $122 interest while retaining a duration of 3 years. • Proforma effect of the adoption of accounting standard relates to the impact of the new revenue recognition standard that became effective January 1, 2018 and is not reflected in 2017 results. Comerica believes non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate our performance trends. Comerica believes the adjusted data shown above and in this presentation provides a greater understanding of ongoing operations and enhances comparability of results with prior periods. 30
Reconciliation of Non-GAAP Financial Measures (dollar amounts in millions, except per share data) 2018 2017 (dollar amounts in millions, except per share data) 2018 2017 Noninterest Income: Net Income: Noninterest income $976 $1,107 Net income $1,235 $743 Securities repositioning 20 — Securities repositioning, net of tax 15 — Proforma effect of adopting new accounting standard — (118) Restructuring charges, net of tax 41 29 Adjusted noninterest income $996 $989 One-time employee bonus, net of tax — 3 Noninterest Expenses: Discrete tax items (48) 72 Noninterest expenses $1,794 $1,860 Adjusted net income $1,243 $847 Restructuring charges (53) (45) Diluted Earnings per Common Share: One-time employee bonus — (5) Diluted earnings per common share $7.20 $4.14 Proforma effect of adopting new accounting standard — (118) Securities repositioning, net of tax 0.09 — Adjusted noninterest expenses $1,741 $1,692 Restructuring charges, net of tax 0.24 0.16 Pre-tax Income: One-time employee bonus, net of tax — 0.02 Pre-tax income $1,535 $1,234 Discrete tax items (0.29) 0.41 Securities repositioning 20 — Adjusted diluted earnings per common share $7.24 $4.73 Restructuring charges 53 45 Efficiency ratio: One-time employee bonus — 5 Reported 53.56% 58.64% Adjusted pre-tax income $1,608 $1,284 Adjusted 52.58 55.41 Provision for Income Taxes: Provision for Income Taxes: $300 $491 • 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 Tax on securities repositioning 5 — recovery positions on fixed assets and software on the 2017 tax return as well as from Tax on restructuring charges 12 16 employee stock transactions. Tax on one-time employee bonus — 2 • Securities repositioning refers to losses on sale of securities resulting from Discrete tax items 48 (72) repositioning $1.3 billion of treasury securities by purchasing securities yielding higher Adjusted provision for income taxes $365 $437 interest while retaining a duration of 3 years. • Proforma effect of the adoption of accounting standard relates to the impact of the new revenue recognition standard that became effective January 1, 2018 and is not reflected in 2017 results. Comerica believes non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate our performance trends. Comerica believes the adjusted data shown above and in this presentation provides a greater understanding of ongoing operations and enhances comparability of results with prior periods. 31