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Press release from PR Newswire

Comerica Reports Third Quarter 2011 Net Income of $98 Million

Wednesday, October 19, 2011

Comerica Reports Third Quarter 2011 Net Income of $98 Million06:40 EDT Wednesday, October 19, 2011Acquisition of Sterling Bancshares, Inc. (Sterling) Expands Growth in Texas Commercial Loans and Texas Drive Period-End Legacy Comerica Growth Share Repurchases IncreaseDALLAS, Oct. 19, 2011 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported third quarter 2011 net income of $98 million, an increase of $2 million compared to $96 million for the second quarter 2011. Third quarter 2011 included merger and restructuring charges of $33 million ($21 million, after tax; $0.11 per diluted share) associated with the acquisition of Sterling, completed on July 28, 2011, compared to $5 million ($3 million, after tax; $0.02 per diluted share) in the second quarter 2011.(Logo:  http://photos.prnewswire.com/prnh/20010807/CMALOGO)(dollar amounts in millions, except per share data)3rd Qtr '112nd Qtr '113rd Qtr '10Net interest income$  423$  391$  404Provision for loan losses3847122Noninterest income201202186Noninterest expenses (a)460409402Provision for income taxes28417Net income 989659Net income attributable to common shares979559Diluted income per common share0.510.530.33Average diluted shares (in millions)192178178Tier 1 common capital ratio (c)10.57% (b) 10.53%9.96%Tangible common equity ratio (c)10.4310.9010.39Net interest margin (d)3.183.143.23(a) Included restructuring expenses of $33 million and $5 million in the third and second quarters of 2011, respectively, associated with the acquisition of Sterling on July 28, 2011.(b) September 30, 2011 ratio is estimated.(c) See Reconciliation of Non-GAAP Financial Measures.(d) Excess liquidity reduced the net interest margin by 29 basis points, 21 basis points and 19 basis points in the 3rd quarter 2011, 2nd quarter 2011 and 3rd quarter 2010, respectively."Our third quarter results reflect our acquisition of Sterling, which expands our growth in Texas, a state expected to outperform the national economy again this year," said Ralph W. Babb Jr., chairman and chief executive officer.  "Systems integrations are on track and expected to be completed by year-end.  We plan to capitalize on revenue synergies, including opportunities to leverage distribution channels to increase commercial lending and cross-sales of cash management and other services, as well as wealth management products.  In short, the Sterling acquisition provides an exceptional growth opportunity in one of the most attractive markets in the U.S."The Sterling acquisition primarily drove our $2 billion increase in period-end loans in the third quarter.  Comerica legacy loans reflected increases in Texas, as well as in commercial loans, primarily in Specialty Businesses, including Mortgage Banker Finance, Technology and Life Sciences and Energy Lending; offset by decreases in National Dealer Services, Global Corporate Banking and Small Business Banking."  "With the uncertain national and global economies, we have heightened our focus on revenue generating initiatives and expense controls," said Babb.  "In addition to delivering the revenue and expense synergies from the Sterling acquisition, we plan to reallocate resources to faster growing businesses, leverage opportunities to lower deposit pricing and continue to utilize technology to produce efficiencies, among many other action items.  By continuing to strengthen our franchise, we believe we will be able to drive growth in this challenging economic environment."Third Quarter 2011 Highlights Compared to Second Quarter 2011Period-end total loans increased $2.0 billion, primarily due to the addition of Sterling. Comerica legacy period-end loans primarily reflected an increase in Specialty Businesses ($1.0 billion; 20 percent), offset by decreases in the National Dealer Services ($290 million; 9 percent), Global Corporate Banking ($194 million; 4 percent), Commercial Real Estate ($152 million; 4 percent) and Small Business Banking ($125 million; 4 percent) business lines.  The increase in period-end Comerica legacy loans in Specialty Businesses primarily reflected increases in Mortgage Banker Finance ($450 million), Technology and Life Sciences ($264 million) and Energy Lending ($208 million). Specialty Businesses, along with $393 million from Sterling, were the primary contributors to the $1.1 billion increase in period-end commercial loans. Comerica legacy commercial loans increased $668 million, or three percent. In the Texas market, Comerica legacy period-end total loans increased $113 million, or two percent.    Average core deposits increased $3.5 billion in the third quarter 2011, with increases in all major markets, led by the Texas market, which reflected average Sterling core deposits of $2.5 billion. The net interest margin of 3.18 percent increased four basis points compared to the second quarter 2011, primarily resulting from the acquisition of the Sterling loan portfolio.  Accretion of the purchase discount on the acquired Sterling loan portfolio increased the net interest margin by 20 basis points, partially offset by the impact of an increase in excess liquidity (-8 basis points) and accelerated premium amortization due to increased prepayment activity on mortgage-backed investment securities (-6 basis points). Credit quality continued to improve in the third quarter 2011. Net credit-related charge-offs decreased $13 million to $77 million.  Watch list loans and nonperforming loans continued to trend downward for both Comerica legacy loans and the acquired Sterling loan portfolio.  Noninterest expenses increased $51 million to $460 million in the third quarter 2011, compared to the second quarter 2011. Third quarter 2011 noninterest expenses included $18 million of noninterest expenses from Sterling operations and $33 million of merger and restructuring charges related to the Sterling acquisition, up from $5 million in the second quarter 2011.Comerica repurchased 2.1 million shares of common stock under the share repurchase program in the third quarter 2011, compared to 400,000 shares repurchased in the first half of 2011.Net Interest Income and Net Interest Margin(dollar amounts in millions)3rd Qtr '112nd Qtr '113rd Qtr '10Net interest income$      423$      391$      404Net interest margin 3.18%3.14%3.23%Selected average balances (a):Total earning assets$ 53,243$ 50,136$ 50,189Total investment securities8,1587,4076,906Federal Reserve Bank deposits (excess liquidity) 4,8003,3822,983Total loans40,09839,17440,102Total core deposits (b)44,64341,06738,786Total noninterest-bearing deposits17,51115,78614,920(a) Average balances in 3rd quarter 2011 include Sterling balances from July 28 through September 30, 2011.(b) Core deposits exclude other time deposits and foreign office time deposits.The $32 million increase in net interest income in the third quarter 2011, when compared to the second quarter 2011, resulted primarily from an increase in average earning assets and the accretion of the purchase discount on the acquired Sterling loan portfolio of $27 million, partially offset by accelerated premium amortization of $8 million due to increased prepayment activity on mortgage-backed investment securities. The net interest margin of 3.18 percent increased four basis points compared to the second quarter 2011.  The increase in the net interest margin resulted primarily from the acquisition of the Sterling loan portfolio, partially offset by the impact of an increase in excess liquidity (-8 basis points) and accelerated premium amortization on mortgage-backed investment securities (-6 basis points).  Accretion of the purchase discount on the acquired Sterling loan portfolio increased the net interest margin by 20 basis points.Average earning assets increased $3.1 billion, primarily due to increases of $924 million in average loans, $751 million in average investment securities available-for-sale and $1.4 billion in excess liquidity.  Sterling contributed $1.4 billion and $700 million, respectively, to the increases in average loans and average investment securities available-for-sale.Third quarter 2011 average core deposits increased $3.5 billion compared to second quarter 2011. Noninterest-bearing deposits increased $1.7 billion, money market and interest-bearing checking deposits increased $1.4 billion and customer certificates of deposit increased $269 million. Sterling provided $2.5 billion of the total increase in average core deposits.   Noninterest IncomeNoninterest income was $201 million for the third quarter 2011, compared to $202 million for the second quarter 2011.  The $1 million decrease primarily resulted from decreases in fiduciary income ($2 million) and other noninterest income ($14 million), partially offset by increases in net securities gains ($8 million) and several fee categories.  The decrease in other noninterest income primarily resulted from decreases in deferred compensation asset returns ($7 million) (offset by a decrease in deferred compensation plan costs in noninterest expense) and principal investing and warrants ($4 million).  Noninterest income included $16 million from Sterling in the third quarter 2011, which included net securities gains of $11 million, primarily due to the repositioning of the acquired Sterling investment securities portfolio.  Noninterest Expenses Noninterest expenses totaled $460 million in the third quarter 2011, an increase of $51 million from the second quarter 2011. The increase in non-interest expenses primarily reflected an increase in merger and restructuring charges of $28 million and $18 million of noninterest expenses from Sterling operations.  Merger and restructuring charges include the incremental costs to integrate the operations of Sterling.  Such expenses include costs related to terminations of certain existing Sterling leases and other contracts, systems integration and related charges, estimated severance and other employee-related charges, and other transaction costs. Provision for Income TaxesThe provision for income taxes was $28 million, a decrease of $13 million from the previous quarter.  The second quarter 2011 provision for income taxes included net after-tax charges of $8 million for various tax items.Credit Quality"We continue to be very pleased with our broad-based, steady improvement in credit quality," said Babb.  "This was the ninth consecutive quarter of decline in net charge-offs, with a $13 million decrease.  Internal watch list loans and nonperforming loans continued to trend downward for both Comerica legacy loans and the Sterling loan portfolio.  We continued to see reductions in inflows to nonaccrual loans and positive migration in other credit metrics. Our customers, generally, are in a stronger position today, with higher liquidity, lower leverage and increased efficiency.  These positive attributes will assist them in whatever economic scenario emerges in the coming months.  As a result of the overall improvements in credit quality we have seen, the provision for loan losses declined to $38 million."(dollar amounts in millions)3rd Qtr '112nd Qtr '113rd Qtr '10Net credit-related charge-offs$    77$    90$  132Net credit-related charge-offs/Average total loans0.77%0.92%1.32%Provision for loan losses$    38$    47$  122Provision for credit losses on lending-related commitments(3)(2)(6)Total provision for credit losses3545116Nonperforming loans (a)9589741,191Nonperforming assets (NPAs) (a)1,0451,0441,311NPAs/Total loans and foreclosed property 2.53%2.66%3.24%Loans past due 90 days or more and still accruing$    81$    64$  104Allowance for loan losses767806957Allowance for credit losses on lending-related commitments (b)273038Total allowance for credit losses794836995Allowance for loan losses/Total loans (c)1.86%2.06%2.38%Allowance for loan losses/Nonperforming loans 808380(a) Excludes loans acquired with credit impairment.(b) Included in "Accrued expenses and other liabilities" on the consolidated balance sheets.(c) Reflects the impact of acquired loans, which were initially recorded at fair value, with no related allowance for loan losses.Credit Quality (continued)Net credit-related charge-offs decreased $13 million to $77 million in the third quarter 2011, from $90 million in the second quarter 2011. The decrease in net credit-related charge-offs primarily reflected a decrease of $18 million in the Middle Market business line, partially offset by an increase of $8 million in the Commercial Real Estate business line.Watch list loans and nonperforming loans continued to trend downward for both Comerica legacy loans and the acquired Sterling loan portfolio.  Internal watch list loans increased $142 million to $5.0 billion from June 30, 2011 to September 30, 2011, due to the inclusion of $405 million of Sterling watch list loans at September 30, 2011.During the third quarter 2011, $130 million of borrower relationships greater than $2 million were transferred to nonaccrual status, a decrease of $20 million from the second quarter 2011.  Of the transfers of borrower relationships greater than $2 million to nonaccrual in the third quarter 2011, $63 million were from the Middle Market business line, primarily in the Western and Midwest markets, and $48 million were from the Commercial Real Estate business line, primarily in the Western market. Nonperforming loans decreased $16 million, compared to June 30, 2011, to $958 million, or 2.32 percent of total loans, at September 30, 2011.  Nonperforming assets included $24 million of Sterling foreclosed property at September 30, 2011.  The allowance for loan losses to total loans ratio was 1.86 percent and 2.06 percent at September 30, 2011 and June 30, 2011, respectively.  The decrease in the ratio primarily reflected the impact of the Sterling loans recorded at fair value at acquisition without a corresponding allowance for loan losses.  The remaining fair value discount on Sterling acquired loans was $236 million at September 30, 2011.Balance Sheet and Capital ManagementTotal assets and common shareholders' equity were $60.9 billion and $7.0 billion, respectively, at September 30, 2011, compared to $54.1 billion and $6.0 billion, respectively, at June 30, 2011. There were approximately 199 million common shares outstanding at September 30, 2011. Comerica repurchased 2.1 million shares of common stock in the open market during the third quarter 2011 under the share repurchase program.As previously announced, Comerica completed the acquisition of Sterling on July 28, 2011.  In connection with the acquisition, Comerica issued approximately 24 million shares of common stock.  The fair value of assets acquired included $2.1 billion of loans and $1.5 billion of investment securities, and liabilities assumed included $4.0 billion of deposits. Goodwill resulting from the acquisition totaled $485 million.Comerica's tangible common equity ratio was 10.43 percent at September 30, 2011, a decrease of 47 basis points from June 30, 2011.  The estimated Tier 1 common capital ratio increased four basis points, to 10.57 percent at September 30, 2011, from June 30, 2011.  Fourth Quarter 2011 OutlookFor the fourth quarter 2011, compared to the third quarter 2011, management expects the following, assuming a continuation of the current economic environment:A low-single digit increase in average total loans, largely reflecting the impact of one additional month of Sterling. Period-end loans are expected to be relatively stable.  In the fourth quarter 2011, loans in the National Dealer Services business line are expected to grow, Mortgage Banker Finance loan growth is expected to moderate, and loans in the Commercial Real Estate business line are expected to continue to decrease.  Average earning assets of approximately $54.5 billion, reflecting increases, primarily related to Sterling, in average loans and average investment securities available-for-sale.  An average net interest margin of about 3.15 percent, reflecting the benefit from an increase in mortgage-backed investment securities, one additional month of Sterling and lower excess liquidity, offset by a reduction in the accretion of the purchase discount on the acquired Sterling loan portfolio ($15 million to $20 million, compared to $27 million in the third quarter 2011).Net credit-related charge-offs between $65 million and $75 million for the fourth quarter 2011. The provision for credit losses is expected to trend modestly lower from the third quarter 2011.A mid-single digit decline in noninterest income in the fourth quarter 2011 compared to the third quarter 2011, primarily due to the impact of regulatory changes and no significant net securities gains expected in the fourth quarter 2011, partially offset by one additional month of Sterling noninterest income in the fourth quarter 2011. Excluding merger and restructuring charges, a low- to mid-single digit increase in noninterest expenses in the fourth quarter 2011 compared to the third quarter 2011, primarily due to one additional month of Sterling expenses in the fourth quarter 2011.Merger and restructuring charges of approximately $25 million, after-tax, ($40 million, pre-tax) recognized in the fourth quarter 2011.Total acquisition synergies of approximately 35 percent of Sterling expenses, or about $56 million, with the majority realized in 2012.For fourth quarter 2011, income tax expense to approximate 36 percent of income before income taxes less approximately $17 million in tax benefits.Continue share repurchase program that, combined with dividend payments, results in a payout up to 50 percent of full-year earnings.Business SegmentsComerica's operations are strategically aligned into three major business segments: the Business Bank, the Retail Bank, and Wealth Management.  The Finance Division is also included as a segment. The financial results below are based on the internal business unit structure of the Corporation and methodologies in effect at September 30, 2011 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2011 results compared to second quarter 2011.The following table presents net income (loss) by business segment.(dollar amounts in millions)3rd Qtr '112nd Qtr '113rd Qtr '10Business Bank$ 17986%$ 17695%$ 133114%Retail Bank199(3)(2)(7)(6)Wealth Management115127(10)(8)209100%185100%116100%Finance(91)(87)(58)Other (a)(20)(2)1     Total$   98$   96$   59(a) Includes discontinued operations and items not directly associated with the three major business segments or the Finance Division.Business Bank(dollar amounts in millions)3rd Qtr '112nd Qtr '113rd Qtr '10Net interest income (FTE)$         363$          342$         336Provision for loan losses20657Noninterest income777969Noninterest expenses162158155Net income 179176133Net credit-related charge-offs405499Selected average balances:Assets30,60229,89330,309Loans29,94929,38029,940Deposits21,75420,39619,266Net interest margin 4.81%4.65%4.45%Average loans increased $569 million, primarily due to the addition of Sterling and increases in Mortgage Banker Finance, Technology and Life Sciences and Global Corporate Banking, partially offset by decreases in National Dealer Services, Commercial Real Estate and Middle Market.Average deposits increased $1.4 billion, primarily due to the addition of Sterling and increases in Global Corporate Banking, the Financial Services Division and Technology and Life Sciences, partially offset by a decrease in Mortgage Banker Finance.The net interest margin of 4.81 percent increased 16 basis points, primarily due to the benefit from the accretion of the purchase discount on the acquired Sterling loan portfolio.The provision for loan losses increased $14 million, primarily reflecting increases in Commercial Real Estate and Leasing, partially offset by declines in Middle Market and Global Corporate Banking.Noninterest expenses increased $4 million, reflecting expenses from Sterling operations of $5 million and increases in net allocated corporate overhead expenses, legal fees and the provision for credit losses on lending-related commitments, partially offset by decreases in incentive compensation and FDIC insurance expense.Retail Bank (dollar amounts in millions)3rd Qtr '112nd Qtr '113rd Qtr '10Net interest income (FTE)$         173$          141$         133Provision for loan losses172424Noninterest income474645Noninterest expenses174162165Net income ( loss )19(3)(7)Net credit-related charge-offs282219Selected average balances:Assets5,9915,4535,777Loans5,4894,9995,314Deposits19,79717,73716,972Net interest margin 3.46%3.22%3.10%Average loans increased $490 million, primarily due to the addition of Sterling, partially offset by decreases in Small Business Banking and Personal Banking. Average deposits increased $2.1 billion. Sterling contributed $1.9 billion of the increase in average deposits.The net interest margin of 3.46 percent increased 24 basis points, primarily reflecting the benefit from the accretion of the purchase discount on the acquired Sterling loan portfolio.The provision for loan losses decreased $7 million, reflecting declines in both Small Business Banking and Personal Banking.Noninterest expenses increased $12 million, primarily due to the Sterling acquisition, partially offset by a decrease in FDIC insurance expense.Wealth Management (dollar amounts in millions)3rd Qtr '112nd Qtr '113rd Qtr '10Net interest income (FTE)$           45$            48$           41Provision for loan losses61437Noninterest income566359Noninterest expenses787678Net income ( loss )1112(10)Net credit-related charge-offs91414Selected average balances:Assets4,6744,7284,855Loans4,6524,7424,824Deposits3,1982,9782,606Net interest margin 3.85%4.07%3.42%Average loans decreased $90 million. Average deposits increased $220 million, primarily reflecting an increase in the Western market. The net interest margin of 3.85 percent decreased 22 basis points, primarily due to a decrease in loan spreads, partially offset by an increase in deposit balances.The provision for loan losses decreased $8 million, primarily reflecting decreases in the Midwest and Florida markets.Noninterest income decreased $7 million, primarily due to a decrease in fiduciary income.Geographic Market SegmentsComerica also provides market segment results for four primary geographic markets: Midwest, Western, Texas and Florida.  In addition to the four primary geographic markets, Other Markets and International are also reported as market segments.  The financial results below are based on methodologies in effect at September 30, 2011 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2011 results compared to second quarter 2011.The following table presents net income (loss) by market segment.(dollar amounts in millions)3rd Qtr '112nd Qtr '113rd Qtr '10Midwest $  5928%$ 6234%$ 4842%Western492350271412Texas653133181412Florida11(5)(3)(6)(5)Other Markets231130163328International1261581311209100%185100%116100%Finance & Other Businesses (a)(111)(89)(57)     Total$  98$ 96$ 59(a) Includes discontinued operations and items not directly associated with the geographic markets.Midwest Market(dollar amounts in millions)3rd Qtr '112nd Qtr '113rd Qtr '10Net interest income (FTE)$         199$          204$         200Provision for loan losses211538Noninterest income9610099Noninterest expenses183183186Net income596248Net credit-related charge-offs333761Selected average balances:Assets14,12314,26714,445Loans13,87314,05114,276Deposits18,51118,31917,777Net interest margin 4.27%4.46%4.45%Average loans decreased $178 million, with an increase in Global Corporate Banking more than offset by declines in most other business lines. Average deposits increased $192 million, primarily due to an increase in Global Corporate Banking.The net interest margin of 4.27 percent decreased 19 basis points, primarily due to decreases in loan and deposit spreads and a decline in loan balances.The provision for loan losses increased $6 million, primarily reflecting an increase in Middle Market, partially offset by a decline in Global Corporate Banking.Noninterest income decreased $4 million, primarily due to decreases in fiduciary income and investment banking fees.Western Market(dollar amounts in millions)3rd Qtr '112nd Qtr '113rd Qtr '10Net interest income (FTE)$         166$          166$         157Provision for loan losses142051Noninterest income323731Noninterest expenses106108107Net income495014Net credit-related charge-offs322658Selected average balances:Assets12,11012,32912,746Loans11,88912,12112,556Deposits12,97512,45811,793Net interest margin 5.06%5.35%4.96%Average loans decreased $232 million, primarily due to a decrease in National Dealer Services.  Average deposits increased $517 million, reflecting increases in most business lines.The net interest margin of 5.06 percent decreased 29 basis points, primarily due to decreases in loan and deposit spreads and a decline in loan balances.The provision for loan losses decreased $6 million, primarily reflecting a decrease in Middle Market, partially offset by an increase in Commercial Real Estate.Noninterest income decreased $5 million, primarily due to a decrease in warrant income.Texas Market (dollar amounts in millions)3rd Qtr '112nd Qtr '113rd Qtr '10Net interest income (FTE)$         143$            89$           78Provision for loan losses(7)(2)17Noninterest income292521Noninterest expenses796361Net income 653314Total net credit-related charge-offs235Selected average balances:Assets8,5107,0816,556Loans8,1456,8716,357Deposits8,8656,1755,443Net interest margin 6.40%5.19%4.87%Average loans increased $1.3 billion, primarily due to the addition of Sterling.Average deposits increased $2.7 billion, primarily reflecting the addition of Sterling and an increase in Global Corporate Banking.The net interest margin of 6.40 percent increased 121 basis points, primarily reflecting the benefit from the accretion of the purchase discount on the acquired Sterling loan portfolio and higher loan spreads, partially offset by a decline in deposit spreads.The provision for loan losses decreased $5 million, primarily reflecting a decrease in Middle Market.Noninterest income increased $4 million, primarily due to increases in warrant income and service charges on deposit accounts related to the Sterling acquisition.Noninterest expenses increased $16 million, primarily due to the Sterling acquisition.Florida Market(dollar amounts in millions)3rd Qtr '112nd Qtr '113rd Qtr '10Net interest income (FTE)$           11$            12$           10Provision for loan losses21110Noninterest income444Noninterest expenses111213Net income (loss)1(5)(6)Net credit-related charge-offs5156Selected average balances:Assets1,4501,5341,528Loans1,4771,5651,549Deposits404396364Net interest margin 2.94%3.14%2.61%Average loans decreased $88 million, primarily due to decreases in National Dealer Services and Commercial Real Estate.The net interest margin of 2.94 percent decreased 20 basis points, primarily due to decreases in loan and deposits spreads.The provision for loan losses decreased $9 million, primarily reflecting decreases in Commercial Real Estate, Middle Market and Private Banking. Conference Call and WebcastComerica will host a conference call to review third quarter 2011 financial results at 7 a.m. CT Wednesday, October 19, 2011. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 11574116). The call and supplemental financial information can also be accessed on the Internet at www.comerica.com.  A telephone replay will be available approximately two hours following the conference call through October 31, 2011. The conference call replay can be accessed by calling (800) 642-1687 or (706) 645-9291 (event ID No. 11574116). A replay of the Webcast can also 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 the reconcilement 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," "feels," "expects," "estimates," "seeks," "strives," "plans," "intends," "outlook," "forecast," "position," "target," "mission," "assume," "achievable," "potential," "strategy," "goal," "aspiration," "opportunity," "initiative," "outcome," "continue," "remain," "maintain," "trend," "objective," "pending," "looks forward" 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, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability. Such statements reflect the view of Comerica's management as of this date with respect to future events and are subject to risks 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 and related credit and market conditions; changes in trade, monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; adverse conditions in the capital markets; the interdependence of financial service companies; changes in regulation or oversight, including the effects of recently enacted legislation, actions taken by or proposed by the U.S. Treasury, the Board of Governors of the Federal Reserve System, the Texas Department of Banking and the Federal Deposit Insurance Corporation, legislation or regulations enacted in the future, and the impact and expiration of such legislation and regulatory actions; unfavorable developments concerning credit quality; the acquisition of Sterling Bancshares, Inc., or any future acquisitions; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries in which Comerica has a concentration of loans, including, but not limited to, the automotive production industry and the real estate business lines; the implementation of Comerica's strategies and business models, including the anticipated performance of any new banking centers and the implementation of revenue enhancements and efficiency improvements; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties or information security problems; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; the entry of new competitors in Comerica's markets; changes in customer borrowing, repayment, investment and deposit practices; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings; the effectiveness of methods of reducing risk exposures; the effects of war and other armed conflicts or acts of terrorism and the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods. Comerica cautions that the foregoing list of factors is not exclusive. 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 16 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2010, "Item 1A. Risk Factors" beginning on page 65 of Comerica's Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 and "Item 1A. Risk Factors" beginning on page 74 of Comerica's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011. 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.CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)Comerica Incorporated and SubsidiariesThree Months EndedNine Months EndedSeptember 30,June 30,September 30,September 30,(in millions, except per share data)20112011201020112010PER COMMON SHARE AND COMMON STOCK DATADiluted net income $     0.51$     0.53$     0.33$     1.61$     0.34Cash dividends declared0.100.100.050.300.15Common shareholders' equity (at period end)34.9434.1533.19Average diluted shares (in thousands)191,634177,602177,686182,602171,260KEY RATIOSReturn on average common shareholders' equity5.91%6.41%4.07%6.44%1.40%Return on average assets0.670.700.430.710.43Tier 1 common capital ratio (a) (b)10.5710.539.96Tier 1 risk-based capital ratio (b)10.6510.539.96Total risk-based capital ratio (b)14.8414.8014.37Leverage ratio (b)11.4111.4010.91Tangible common equity ratio (a)10.4310.9010.39AVERAGE BALANCES Commercial loans $ 22,127$ 21,677$ 20,967$ 21,769$ 20,963Real estate construction loans:      Commercial Real Estate business line (c)1,2691,4862,2031,5012,559      Other business lines (d)430395422417438                Total real estate construction loans1,6991,8812,6251,9182,997Commercial mortgage loans:     Commercial Real Estate business line (c)2,2441,9122,0652,0462,005     Other business lines (d)8,0317,7248,1927,8568,333                Total commercial mortgage loans10,2759,63610,2579,90210,338Residential mortgage loans 1,6061,5251,5901,5771,610Consumer loans 2,2922,2432,4212,2722,450Lease financing9369581,0649601,100International loans1,1631,2541,1781,2121,233Total loans40,09839,17440,10239,61040,691Earning assets53,24350,13650,18950,92351,645Total assets58,23854,51754,72955,52656,158Noninterest-bearing deposits17,51115,78614,92016,25914,922Interest-bearing core deposits27,13225,28123,86625,72123,400Total core deposits44,64341,06738,78641,98038,322Common shareholders' equity6,6335,9725,8426,1505,543Total shareholders' equity6,6335,9725,8426,1506,134NET INTEREST INCOMENet interest income (fully taxable equivalent basis) $      424$      392$      405$   1,212$   1,245Fully taxable equivalent adjustment11134Net interest margin (fully taxable equivalent basis)3.18%3.14%3.23%3.19%3.23%CREDIT QUALITYNonaccrual loans$      929$      941$   1,163Reduced-rate loans293328Total nonperforming loans (e)9589741,191Foreclosed property (f)8770120Total nonperforming assets (e)1,0451,0441,311Loans past due 90 days or more and still accruing8164104Gross loan charge-offs90125145$      338$      487Loan recoveries1335137036Net loan charge-offs7790132268451Lending-related commitment charge-offs-----Total net credit-related charge-offs7790132268451Allowance for loan losses767806957Allowance for credit losses on lending-related commitments273038Total allowance for credit losses794836995Allowance for loan losses as a percentage of total loans (g)1.86%2.06%2.38%Net loan charge-offs as a percentage of average total loans 0.770.921.320.90%1.48%Net credit-related charge-offs as a percentage of average total loans 0.770.921.320.901.48Nonperforming assets as a percentage of total loans and foreclosed property (e)2.532.663.24Allowance for loan losses as a percentage of total nonperforming loans808380(a) See Reconciliation of Non-GAAP Financial Measures.(b) September 30, 2011 ratios are estimated.(c) Primarily loans to real estate investors and developers.(d) Primarily loans secured by owner-occupied real estate.(e) Excludes loans acquired with credit-impairment.(f) Included Sterling foreclosed property of $24 million at September 30, 2011.(g) Reflects the impact of acquired loans, which were initially recorded at fair value with no related allowance for loan losses.CONSOLIDATED BALANCE SHEETS Comerica Incorporated and Subsidiaries September 30,June 30,December 31,September 30,(in millions, except share data)2011201120102010(unaudited)(unaudited)(unaudited)ASSETSCash and due from banks$                 981$         987$               668$                 863Federal funds sold and securities purchased under agreements to resell---100Interest-bearing deposits with banks4,2172,4791,4153,031Other short-term investments137124141115Investment securities available-for-sale9,7327,5377,5606,816Commercial loans23,11322,05222,14521,432Real estate construction loans1,6481,7282,2532,444Commercial mortgage loans10,5399,5799,76710,180Residential mortgage loans1,6431,4911,6191,586Consumer loans2,3092,2322,3112,403Lease financing9279491,0091,053International loans1,0461,1621,1321,182Total loans41,22539,19340,23640,280Less allowance for loan losses(767)(806)(901)(957)Net loans40,45838,38739,33539,323Premises and equipment685641630639Customers' liability on acceptances outstanding810913Accrued income and other assets4,6703,9763,9094,104Total assets$            60,888$    54,141$          53,667$            55,004LIABILITIES AND SHAREHOLDERS' EQUITYNoninterest-bearing deposits$            19,116$    16,344$          15,538$            15,763Money market and NOW deposits 20,23718,03317,62217,288Savings deposits1,7711,4621,3971,363Customer certificates of deposit5,9805,5515,4825,723Other time deposits45---Foreign office time deposits303368432494Total interest-bearing deposits28,33625,41424,93324,868Total deposits47,45241,75840,47140,631Short-term borrowings16467130179Acceptances outstanding810913Accrued expenses and other liabilities1,3041,0621,1261,085Medium- and long-term debt5,0095,2066,1387,239Total liabilities53,93748,10347,87449,147Common stock - $5 par value:     Authorized - 325,000,000 shares     Issued - 228,164,824 shares at 9/30/11 and 203,878,110 shares at 6/30/11,          12/31/10  and 9/30/10 1,1411,0191,0191,019Capital surplus2,1621,4721,4811,473Accumulated other comprehensive loss(230)(308)(389)(238)Retained earnings5,4715,3955,2475,171Less cost of common stock in treasury - 29,238,425 shares at 9/30/11, 27,092,427 shares at 6/30/11, 27,342,518 shares at 12/31/10, and 27,394,831 shares at 9/30/10(1,593)(1,540)(1,565)(1,568)Total shareholders' equity6,9516,0385,7935,857Total liabilities and shareholders' equity$            60,888$    54,141$          53,667$            55,004CONSOLIDATED STATEMENTS OF INCOME (unaudited)Comerica Incorporated and SubsidiariesThree Months EndedNine Months EndedSeptember 30, September 30, (in millions, except per share data)2011201020112010INTEREST INCOMEInterest and fees on loans$  405$  399$ 1,149$ 1,223Interest on investment securities5455170177Interest on short-term investments4298Total interest income4634561,3281,408INTEREST EXPENSEInterest on deposits24276991Interest on medium- and long-term debt16255076Total interest expense4052119167Net interest income4234041,2091,241Provision for loan losses38122134423Net interest income after provision for loan losses3852821,075818NONINTEREST INCOMEService charges on deposit accounts5351156159Fiduciary income3738115115Commercial lending fees22226466Letter of credit fees 19195556Card fees17154743Foreign exchange income1183028Bank-owned life insurance1092726Brokerage fees561718Net securities gains 12-183Other noninterest income15188160Total noninterest income201186610574NONINTEREST EXPENSESSalaries192187565535Employee benefits5347153136     Total salaries and employee benefits245234718671Net occupancy expense4440122120Equipment expense17154947Outside processing fee expense25237469Software expense22226566Merger and restructuring charges33-38-FDIC insurance expense8143547Legal fees1292926Advertising expense772123Other real estate expense571924Litigation and operational losses82165Provision for credit losses on lending-related commitments(3)(6)(8)1Other noninterest expenses3735106104Total noninterest expenses4604021,2841,203Income from continuing operations before income taxes 12666401189Provision for income taxes28710425Income from continuing operations9859297164Income from discontinued operations, net of tax---17NET INCOME9859297181Less:    Preferred stock dividends---123    Income allocated to participating securities1-3-Net income attributable to common shares$    97$    59$    294$      58Basic earnings per common share:      Income from continuing operations$ 0.51$ 0.34$   1.63$   0.24      Net income 0.510.341.630.34Diluted earnings per common share:     Income from continuing operations0.510.331.610.24     Net income 0.510.331.610.34Cash dividends declared on common stock2095526Cash dividends declared per common share0.100.050.300.15CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (unaudited)Comerica Incorporated and SubsidiariesThirdSecondFirstFourthThirdThird Quarter 2011 Compared To:QuarterQuarterQuarterQuarterQuarterSecond Quarter 2011Third Quarter 2010(in millions, except per share data)20112011201120102010AmountPercentAmountPercentINTEREST INCOMEInterest and fees on loans$    405$    369$    375$    394$    399$        369%$           61%Interest on investment securities5459574955(5)(7)(1)-Interest on short-term investments43222141249Total interest income46343143444545632771INTEREST EXPENSEInterest on deposits242322242713(3)(13)Interest on short-term borrowings---1--3-(78)Interest on medium- and long-term debt1617171525(1)(8)(9)(36)Total interest expense4040394052-(2)(12)(24)Net interest income423391395405404328195Provision for loan losses38474957122(9)(19)(84)(69)Net interest income after provision for loan losses385344346348282411210336NONINTEREST INCOMEService charges on deposit accounts53515249512523Fiduciary income3739393938(2)(7)(1)(2)Commercial lending fees222121292211-(1)Letter of credit fees 191818201912-(1)Card fees171515151526212Foreign exchange income11109118114330Bank-owned life insurance1098149114110Brokerage fees56676(1)(4)(1)(8)Net securities gains 1242--8 N/M 12 N/M Other noninterest income1529373118(14)(47)(3)(18)Total noninterest income201202207215186(1)(1)157NONINTEREST EXPENSESSalaries1921851882051877453Employee benefits535050434736613     Total salaries and employee benefits245235238248234104115Net occupancy expense443840424061249Equipment expense1717151615-329Outside processing fee expense2525242723-2210Software expense222023232225--Merger and restructuring charges335---28 N/M 33 N/M FDIC insurance expense812151514(4)(42)(6)(49)Legal fees128999439332Advertising expense77787---(5)Other real estate expense56857(1)(2)(2)(28)Litigation and operational losses853623836 N/M Provision for credit losses on lending-related commitments(3)(2)(3)(3)(6)(1)(52)349Other noninterest expenses3733364135418210Total noninterest expenses46040941543740251125814Income before income taxes12613713812666(11)(8)6088Provision for income taxes284135307(13)(33)21 N/M NET INCOME98961039659223965Less:    Income allocated to participating securities1111--(9)165Net income attributable to common shares$      97$      95$    102$      95$      59$          22%$         3865%Earnings per common share:     Basic$   0.51$   0.54$   0.58$   0.54$   0.34$   (0.03)(6)%$      0.1750%     Diluted0.510.530.570.530.33(0.02)(4)0.1855Cash dividends declared on common stock20181718921111 N/M Cash dividends declared per common share0.100.100.100.100.05--0.05 N/M N/M - Not meaningfulANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)Comerica Incorporated and Subsidiaries20112010(in millions)3rd Qtr2nd Qtr1st Qtr4th Qtr3rd QtrBalance at beginning of period$       806$        849$         901$        957$        967Loan charge-offs:    Commercial3366654338    Real estate construction:        Commercial Real Estate business line (a)111283440        Other business lines (b)--1-1          Total real estate construction111293441    Commercial mortgage:        Commercial Real Estate business line (a)1289916        Other business lines (b)2123253440          Total commercial mortgage3331344356    Residential mortgage47252    Consumer998157    Lease financing-----    International--5-1        Total loan charge-offs90125123140145Recoveries on loans previously charged-off:    Commercial513477    Real estate construction35231    Commercial mortgage359102    Residential mortgage11-1-    Consumer11121    Lease financing-6541    International-41-1        Total recoveries1335222713Net loan charge-offs7790101113132Provision for loan losses38474957122Balance at end of period$       767$        806$         849$        901$        957Allowance for loan losses as a percentage of total loans (c)1.86%2.06%2.17%2.24%2.38%Net loan charge-offs as a percentage of average total loans0.770.921.031.131.32Net credit-related charge-offs as a percentage of average total loans0.770.921.031.131.32(a) Primarily charge-offs of loans to real estate investors and developers.(b) Primarily charge-offs of loans secured by owner-occupied real estate.(c) Reflects the impact of acquired loans, which were initially recorded at fair value with no related allowance for loan losses.  ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited)Comerica Incorporated and Subsidiaries20112010(in millions)3rd Qtr2nd Qtr1st Qtr4th Qtr3rd QtrBalance at beginning of period$         30$          32$           35$          38$          44Add: Provision for credit losses on lending-related commitments(3)(2)(3)(3)(6)Balance at end of period$         27$          30$           32$          35$          38Unfunded lending-related commitments sold$            -$            3$             2$            -$            -NONPERFORMING ASSETS (unaudited)Comerica Incorporated and Subsidiaries20112010(in millions) 3rd Qtr 2nd Qtr1st Qtr 4th Qtr 3rd Qtr SUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANSNonaccrual loans:Business loans:Commercial$      258$    261$    226$     252$      258Real estate construction:Commercial Real Estate business line (a)109137195259362Other business lines (b)32344Total real estate construction112139198263366Commercial mortgage:Commercial Real Estate business line (a)198186197181153Other business lines (b)275269293302304Total commercial mortgage473455490483457Lease financing567710International77422Total nonaccrual business loans 8558689251,0071,093Retail loans:Residential mortgage6560585559Consumer:Home equity44655Other consumer 597136Total consumer 913131811Total nonaccrual retail loans7473717370Total nonaccrual loans9299419961,0801,163Reduced-rate loans2933344328Total nonperforming loans (c)9589741,0301,1231,191Foreclosed property (d)877074112120Total nonperforming assets (c)$   1,045$ 1,044$ 1,104$  1,235$   1,311Nonperforming loans as a percentage of total loans2.32%2.49%2.63%2.79%2.96%Nonperforming assets as a percentage of total loans and foreclosed property2.532.662.813.063.24Allowance for loan losses as a percentage of total nonperforming loans         8083828080Loans past due 90 days or more and still accruing$        81$      64$      72$       62$      104ANALYSIS OF NONACCRUAL LOANSNonaccrual loans at beginning of period$      941$    996$ 1,080$  1,163$   1,098     Loans transferred to nonaccrual (e)130150149173290     Nonaccrual business loan gross charge-offs (f)(76)(109)(111)(120)(136)     Loans transferred to accrual status (e)(15)-(4)(4)(10)     Nonaccrual business loans sold (g)(15)(9)(60)(41)(12)     Payments/Other (h)(36)(87)(58)(91)(67)Nonaccrual loans at end of period$      929$    941$    996$  1,080$   1,163(a) Primarily loans to real estate investors and developers.(b) Primarily loans secured by owner-occupied real estate.(c) Excludes loans acquired with credit impairment.(d) Included Sterling foreclosed property of $24 million at September 30, 2011.(e) Based on an analysis of nonaccrual loans with book balances greater than $2 million.(f) Analysis of gross loan charge-offs:      Nonaccrual business loans$        76$    109$    111$     120$      136      Performing watch list loans1-2--      Consumer and residential mortgage loans131610209Total gross loan charge-offs$        90$    125$    123$     140$      145(g) Analysis of loans sold:      Nonaccrual business loans$        15$        9$      60$       41$        12      Performing watch list loans 16635297Total loans sold$        31$      15$      95$       70$        19(h) Includes net changes related to nonaccrual loans with balances less than $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed property. Excludes business loan gross charge-offs and business nonaccrual loans sold.ANALYSIS OF NET INTEREST INCOME (FTE)Comerica Incorporated and SubsidiariesNine Months EndedSeptember 30, 2011September 30, 2010AverageAverageAverageAverage(dollar amounts in millions)BalanceInterestRateBalanceInterestRateCommercial loans$   21,769$      6033.70%$   20,963$      6143.92%Real estate construction loans1,918594.122,997693.08Commercial mortgage loans 9,9023064.1210,3383214.15Residential mortgage loans1,577635.341,610655.37Consumer loans2,272593.472,450653.55Lease financing960253.531,100313.72International loans1,212353.891,233373.96Business loan swap income-1--24-Total loans (a)39,6101,1513.8840,6911,2264.02Auction-rate securities available-for-sale49730.7578961.04Other investment securities available-for-sale7,1311683.206,3931723.66Total investment securities available-for-sale 7,6281713.037,1821783.36Federal funds sold and securities purchased under agreements to resell2-0.335-0.38Interest-bearing deposits with banks (b)3,55570.243,64170.25Other short-term investments12822.1412611.64Total earning assets50,9231,3313.5051,6451,4123.66Cash and due from banks908809Allowance for loan losses(860)(1,033)Accrued income and other assets4,5554,737Total assets$   55,526$   56,158Money market and NOW deposits$   18,539360.26$   16,035380.32Savings deposits 1,51610.111,39710.07Customer certificates of deposit 5,666300.705,968420.94Total interest-bearing core deposits25,721670.3523,400810.46Other time deposits26-0.3840993.04Foreign office time deposits40220.5146210.27Total interest-bearing deposits26,149690.3524,271910.50Short-term borrowings137-0.15230-0.24Medium- and long-term debt5,702501.179,521761.06Total interest-bearing sources31,9881190.5034,0221670.65Noninterest-bearing deposits16,25914,922Accrued expenses and other liabilities1,1291,080Total shareholders' equity6,1506,134Total liabilities and shareholders' equity$   55,526$   56,158Net interest income/rate spread (FTE)$   1,2123.00$   1,2453.01FTE adjustment$          3$          4Impact of net noninterest-bearing sources of funds0.190.22Net interest margin (as a percentage  of average earning assets) (FTE) (a) (b)3.19%3.23%(a) Accretion of the purchase discount on the acquired loan portfolio of $27 million increased the net interest margin by seven basis points year-to-date 2011.(b) Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 22 basis  points both year-to-date 2011 and 2010.  ANALYSIS OF NET INTEREST INCOME (FTE)Comerica Incorporated and SubsidiariesThree Months EndedSeptember 30, 2011June 30, 2011September 30, 2010AverageAverageAverageAverageAverageAverage(dollar amounts in millions)BalanceInterestRateBalanceInterestRateBalanceInterestRateCommercial loans$   22,127$      2073.70%$   21,677$      1963.65%$   20,967$      2033.84%Real estate construction loans1,699235.281,881173.752,625213.19Commercial mortgage loans 10,2751154.429,636963.9810,2571054.06Residential mortgage loans1,606215.301,525215.501,590215.25Consumer loans2,292203.562,243203.422,421213.53Lease financing93683.4695883.501,064103.69International loans1,163114.011,254123.801,178123.89Business loan swap income-------7-Total loans (a)40,0984054.0139,1743703.7940,1024003.96Auction-rate securities available-for-sale43710.6350010.7167310.99Other investment securities available-for-sale7,721542.876,907583.406,233543.54Total investment securities available-for-sale 8,158552.747,407593.206,906553.27Federal funds sold and securities purchased under agreements to resell--0.442-0.3313-0.31Interest-bearing deposits with banks (b)4,85130.233,43330.253,04720.25Other short-term investments13612.30120-1.39121-1.53Total earning assets53,2434643.4750,1364323.4650,1894573.64Cash and due from banks969872843Allowance for loan losses(814)(859)(1,003)Accrued income and other assets4,8404,3684,700Total assets$   58,238$   54,517$   54,729Money market and NOW deposits$   19,595$        130.25$   18,207$        110.26$   16,681$        130.31Savings deposits 1,659-0.141,46510.091,37710.08Customer certificates of deposit 5,878100.665,609100.705,808120.87Total interest-bearing core deposits27,132230.3325,281220.3523,866260.43Other time deposits76-0.38---65-0.51Foreign office time deposits37910.5241310.5247910.36Total interest-bearing deposits27,587240.3325,694230.3524,410270.43Short-term borrowings204-0.08112-0.14208-0.35Medium- and long-term debt5,168161.235,821171.208,245251.21Total interest-bearing sources32,959400.4731,627400.5132,863520.63Noninterest-bearing deposits17,51115,78614,920Accrued expenses and other liabilities1,1351,1321,104Total shareholders' equity6,6335,9725,842Total liabilities and shareholders' equity$   58,238$   54,517$   54,729Net interest income/rate spread (FTE)$      4243.00$      3922.95$      4053.01FTE adjustment$          1$          1$          1Impact of net noninterest-bearing sources of funds0.180.190.22Net interest margin (as a percentage of average earning assets) (FTE) (a) (b)3.18%3.14%3.23%(a) Accretion of the purchase discount on the acquired loan portfolio of $27 million increased the net interest margin by 20 basis points in the third quarter 2011.(b) Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 29 basis points and by 21 points in the third and second quarters of 2011, respectively, and by 19 basis points in the third quarter of 2010.CONSOLIDATED STATISTICAL DATA (unaudited)Comerica Incorporated and SubsidiariesSeptember 30,June 30,March 31,December 31,September 30,(in millions, except per share data)20112011201120102010Commercial loans:     Floor plan$                 1,209$      1,478$        1,893$               2,017$                 1,693     Other 21,90420,57419,46720,12819,739Total commercial loans23,11322,05221,36022,14521,432Real estate construction loans:     Commercial Real Estate business line (a)1,1641,3431,6061,8262,023     Other business lines (b)484385417427421Total real estate construction loans1,6481,7282,0232,2532,444Commercial mortgage loans:     Commercial Real Estate business line (a)2,2711,9301,9181,9372,091     Other business lines (b)8,2687,6497,7797,8308,089Total commercial mortgage loans10,5399,5799,6979,76710,180Residential mortgage loans1,6431,4911,5501,6191,586Consumer loans:     Home equity1,6831,6221,6611,7041,736     Other consumer626610601607667Total consumer loans2,3092,2322,2622,3112,403Lease financing9279499581,0091,053International loans1,0461,1621,3261,1321,182Total loans$               41,225$    39,193$      39,176$             40,236$               40,280Goodwill$                    635$         150$           150$                  150$                    150Core deposit intangible32----Loan servicing rights34455Tier 1 common capital ratio (c) (d)10.57%10.53%10.35%10.13%9.96%Tier 1 risk-based capital ratio (d)10.6510.5310.3510.139.96Total risk-based capital ratio (d)14.8414.8014.8014.5414.37Leverage ratio (d)11.4111.4011.3711.2610.91Tangible common equity ratio (c)10.4310.9010.4310.5410.39Book value per common share$                 34.94$      34.15$        33.25$               32.82$                 33.19Market value per share for the quarter:     High35.7939.0043.5343.4440.21     Low21.4833.0836.2034.4333.11     Close22.9734.5736.7242.2437.15Quarterly ratios:     Return on average common shareholders' equity5.91%6.41%7.08%6.53%4.07%     Return on average assets0.670.700.770.710.43     Efficiency ratio75.1169.3369.0570.3867.88Number of banking centers502446445444441Number of employees - full time equivalent (e)9,7018,9158,9559,0019,075(a) Primarily loans to real estate investors and developers.(b) Primarily loans secured by owner-occupied real estate.(c) See Reconciliation of Non-GAAP Financial Measures.(d) September 30, 2011 ratios are estimated.(e) Included 749 Sterling employees at September 30, 2011.PARENT COMPANY ONLY BALANCE SHEETS (unaudited)Comerica IncorporatedSeptember 30,December 31,September 30,(in millions, except share data)2011 2010 2010 ASSETSCash and due from subsidiary bank$                      3$                     -$                    10Short-term investments with subsidiary bank440327793Other short-term investments868682Investment in subsidiaries, principally banks7,0985,9576,039Premises and equipment343Other assets189181202      Total assets$               7,819$             6,555$               7,129LIABILITIES AND SHAREHOLDERS' EQUITYMedium- and long-term debt$                  722$                635$               1,155Other liabilities146127117      Total liabilities8687621,272Common stock - $5 par value:    Authorized - 325,000,000 shares    Issued - 228,164,824 shares at 9/30/2011 and 203,878,110 shares at 12/31/2010 and 9/30/20101,1411,0191,019Capital surplus2,1621,4811,473Accumulated other comprehensive loss(230)(389)(238)Retained earnings5,4715,2475,171Less cost of common stock in treasury -  29,238,425 shares at 9/30/11, 27,342,518 shares at 12/31/10, and 27,394,831 shares at 9/30/10(1,593)(1,565)(1,568)      Total shareholders' equity6,9515,7935,857      Total liabilities and shareholders' equity$               7,819$             6,555$               7,129CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)Comerica Incorporated and SubsidiariesAccumulatedCommon StockOtherTotalPreferredShares CapitalComprehensiveRetainedTreasuryShareholders'(in millions, except per share data)Stock Outstanding AmountSurplusLossEarningsStockEquityBALANCE AT DECEMBER 31, 2009$      2,151151.2$      894$     740$                   (336)$               5,161$            (1,581)$               7,029Net income-----181-181Other comprehensive income, net of tax----98--98Total comprehensive income279Cash dividends declared on preferred stock -----(38)-(38)Cash dividends declared on common stock ($0.15 per share)-----(26)-(26)Purchase of common stock-(0.1)----(4)(4)Issuance of common stock-25.1125724---849Redemption of preferred stock(2,250)------(2,250)Redemption discount accretion on preferred stock94----(94)--Accretion of discount on preferred stock5----(5)--Net issuance of common stock under employee stock plans-0.3-(11)-(8)16(3)Share-based compensation ---24---24Other    ---(4)--1(3)BALANCE AT SEPTEMBER 30, 2010$             -176.5$   1,019$  1,473$                   (238)$               5,171$            (1,568)$               5,857BALANCE AT DECEMBER 31, 2010$             -176.5$   1,019$  1,481$                   (389)$               5,247$            (1,565)$               5,793Net income-----297-297Other comprehensive income, net of tax----159--159Total comprehensive income456Cash dividends declared on common stock ($0.30 per share)-----(55)-(55)Purchase of common stock-(2.7)----(75)(75)Acquisition of Sterling Bancshares, Inc.-24.3122681---803Net issuance of common stock under employee stock plans-0.8-(29)-(18)47-Share-based compensation ---29---29BALANCE AT SEPTEMBER 30, 2011$             -198.9$   1,141$  2,162$                   (230)$               5,471$            (1,593)$               6,951BUSINESS SEGMENT FINANCIAL RESULTS (unaudited) Comerica Incorporated and Subsidiaries (dollar amounts in millions)Three Months Ended September 30, 2011BusinessBankRetailBankWealthManagementFinanceOtherTotalEarnings summary:Net interest income (expense) (FTE)$           363$           173$             45$          (167)$             10$           424Provision for loan losses20176-(5)38Noninterest income77475625(4)201Noninterest expenses16217478343460Provision (benefit) for income taxes (FTE)79106(54)(12)29Net income (loss)$           179$             19$             11$            (91)$            (20)$             98Net credit-related charge-offs$             40$             28$               9$                -$                -$             77Selected average balances:Assets$      30,602$        5,991$        4,674$      10,176$        6,795$      58,238Loans29,9495,4894,6522640,098Deposits21,75419,7973,19823611345,098Statistical data:Return on average assets (a)2.34%0.38%0.95% N/M N/M 0.67%Net interest margin (b)4.813.463.85 N/M N/M 3.18Efficiency ratio36.7078.9778.00 N/M N/M 75.11Three Months Ended June 30, 2011BusinessBankRetailBankWealthManagementFinanceOtherTotalEarnings summary:Net interest income (expense) (FTE)$           342$           141$             48$          (147)$               8$           392Provision for loan losses62414-347Noninterest income794663113202Noninterest expenses15816276310409Provision (benefit) for income taxes (FTE)8149(52)-42Net income (loss)$           176$              (3)$             12$            (87)$              (2)$             96Net credit-related charge-offs$             54$             22$             14$                -$                -$             90Selected average balances:Assets$      29,893$        5,453$        4,728$        9,406$        5,037$      54,517Loans29,3804,9994,74248539,174Deposits20,39617,7372,97823913041,480Statistical data:Return on average assets (a)2.35%(0.06)%1.03% N/M N/M 0.70%Net interest margin (b)4.653.224.07 N/M N/M 3.14Efficiency ratio37.4186.4871.40 N/M N/M 69.33Three Months Ended September 30, 2010BusinessBankRetailBankWealthManagementFinanceOtherTotalEarnings summary:Net interest income (expense) (FTE)$           336$           133$             41$          (104)$              (1)$           405Provision for loan losses572437-4122Noninterest income694559121186Noninterest expenses1551657822402Provision (benefit) for income taxes (FTE)60(4)(5)(36)(7)8Net income (loss)$           133$              (7)$            (10)$            (58)$               1$             59Net credit-related charge-offs$             99$             19$             14$                -$                -$           132Selected average balances:Assets$      30,309$        5,777$        4,855$        9,044$        4,744$      54,729Loans29,9405,3144,82430(6)40,102Deposits19,26616,9722,60638610039,330Statistical data:Return on average assets (a)1.75%(0.16)%(0.79)% N/M N/M 0.43%Net interest margin (b)4.453.103.42 N/M N/M 3.23Efficiency ratio38.1692.2678.49 N/M N/M 67.88(a) Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.(b) Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.FTE - Fully Taxable EquivalentN/M - Not MeaningfulMARKET SEGMENT FINANCIAL RESULTS (unaudited) Comerica Incorporated and Subsidiaries (dollar amounts in millions)Three Months Ended September 30, 2011MidwestWesternTexasFloridaOtherMarketsInternationalFinance& OtherBusinessesTotalEarnings summary:Net interest income (expense) (FTE)$      199$      166$    143$      11$       41$                21$        (157)$      424Provision for loan losses2114(7)2112(5)38Noninterest income963229410921201Noninterest expenses1831067911251046460Provision (benefit) for income taxes (FTE)3229351(8)6(66)29Net income (loss)$        59$        49$      65$        1$       23$                12$        (111)$        98Net credit-related charge-offs $        33$        32$        2$        5$         5$                  -$              -$        77Selected average balances:Assets$ 14,123$ 12,110$ 8,510$ 1,450$  3,369$           1,705$     16,971$ 58,238Loans13,87311,8898,1451,4773,0751,631840,098Deposits18,51112,9758,8654042,3911,60334945,098Statistical data:Return on average assets (a)1.21%1.42%2.70%0.29%2.78%2.76% N/M 0.67%Net interest margin (b)4.275.066.402.945.365.00 N/M 3.18Efficiency ratio61.7353.1546.1878.0750.1531.23 N/M 75.11Three Months Ended June 30, 2011MidwestWesternTexasFloridaOtherMarketsInternationalFinance& OtherBusinessesTotalEarnings summary:Net interest income (expense) (FTE)$      204$      166$      89$      12$       41$                19$        (139)$      392Provision for loan losses1520(2)115(5)347Noninterest income1003725413914202Noninterest expenses183108631221913409Provision (benefit) for income taxes (FTE)442520(2)(2)9(52)42Net income (loss)$        62$        50$      33$      (5)$       30$                15$          (89)$        96Net credit-related charge-offs (recoveries)$        37$        26$        3$      15$       11$                (2)$              -$        90Selected average balances:Assets$ 14,267$ 12,329$ 7,081$ 1,534$  3,101$           1,762$     14,443$ 54,517Loans14,05112,1216,8711,5652,8231,6905339,174Deposits18,31912,4586,1753962,4511,31236941,480Statistical data:Return on average assets (a)1.28%1.48%1.84%(1.29)%3.89%3.33% N/M 0.70%Net interest margin (b)4.465.355.193.145.884.40 N/M 3.14Efficiency ratio60.3153.1755.1677.6240.4733.16 N/M 69.33Three Months Ended September 30, 2010MidwestWesternTexasFloridaOtherMarketsInternationalFinance& OtherBusinessesTotalEarnings summary:Net interest income (expense) (FTE)$      200$      157$      78$      10$       47$                18$        (105)$      405Provision for loan losses385117104(2)4122Noninterest income993121410813186Noninterest expenses18610761132384402Provision (benefit) for income taxes (FTE)27167(3)(3)7(43)8Net income (loss)$        48$        14$      14$      (6)$       33$                13$          (57)$        59Net credit-related charge-offs $        61$        58$        5$        6$         2$                  -$              -$      132Selected average balances:Assets$ 14,445$ 12,746$ 6,556$ 1,528$  4,058$           1,608$     13,788$ 54,729Loans14,27612,5566,3571,5493,8021,5382440,102Deposits17,77711,7935,4433642,1981,26948639,330Statistical data:Return on average assets (a)1.04%0.42%0.83%(1.58)%3.20%3.25% N/M 0.43%Net interest margin (b)4.454.964.872.614.994.51 N/M 3.23Efficiency ratio61.4757.1262.0194.5041.3930.65 N/M 67.88(a) Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.(b) Net interest margin is calculated based on the greater of average earning assets or average deposits and purchased funds.FTE - Fully Taxable EquivalentN/M - Not MeaningfulRECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) Comerica Incorporated and SubsidiariesSeptember 30,June 30,March 31,December 31,September 30,(dollar amounts in millions)20112011201120102010Tier 1 Common Capital Ratio:Tier 1 capital (a) (b)$   6,560$   6,193$   6,107$   6,027$   5,940Less:Trust preferred securities49----Tier 1 common capital (b)$   6,511$   6,193$   6,107$   6,027$   5,940Risk-weighted assets (a) (b)$ 61,604$ 58,795$ 58,998$ 59,506$ 59,608Tier 1 capital ratio (b)10.65%10.53%10.35%10.13%9.96%Tier 1 common capital ratio (b)10.5710.5310.3510.139.96Tangible Common Equity Ratio:Total common shareholders' equity$   6,951$   6,038$   5,877$   5,793$   5,857Less:Goodwill635150150150150Other intangible assets354566Tangible common equity$   6,281$   5,884$   5,722$   5,637$   5,701Total assets$ 60,888$ 54,141$ 55,017$ 53,667$ 55,004Less:Goodwill635150150150150Other intangible assets354566Tangible assets$ 60,218$ 53,987$ 54,862$ 53,511$ 54,848Common equity ratio11.42%11.15%10.68%10.80%10.65%Tangible common equity ratio 10.4310.9010.4310.5410.39(a) Tier 1 capital and risk-weighted assets as defined by regulation.(b) September 30, 2011 Tier 1 capital and risk-weighted assets are estimated.The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations.  The tangible common equity removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets.  Comerica believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.SOURCE Comerica IncorporatedFor further information: Media, Wayne J. Mielke, +1-214-462-4463, or Investors, Darlene P. Persons, +1-214-462-6831, or Tracy Fralick, +1-214-462-6834, all of Comerica Incorporated