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Press release from PR Newswire

Comerica Reports Third Quarter 2012 Net Income Of $117 Million

Wednesday, October 17, 2012

Comerica Reports Third Quarter 2012 Net Income Of $117 Million06:40 EDT Wednesday, October 17, 2012Customer Relationship Focus Supports Loan and Deposit Growth Average Total Loan Growth Continues - Driven by a $717 Million, 3 Percent Increase in Commercial Loans Average Deposits Increase to Record Level of $50 Billion Strong Capital Supports Shareholder Return of $119 MillionDALLAS, Oct. 17, 2012 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) today reported third quarter 2012 net income of $117 million, compared to $144 million for the second quarter 2012. Earnings per fully diluted share was 61 cents compared to 73 cents for the second quarter 2012. Third quarter 2012 earnings per fully diluted share included restructuring expenses of 8 cents associated with the acquisition of Sterling Bancshares, Inc. (Sterling) compared to 2 cents for the second quarter 2012.(Logo: http://photos.prnewswire.com/prnh/20010807/CMALOGO)(dollar amounts in millions, except per share data)3rd Qtr '122nd Qtr '123rd Qtr '11Net interest income (a)$427$435$423Provision for credit losses221935Noninterest income197211201Noninterest expenses (b)449433463Provision for income taxes365028Net income11714498Net income attributable to common shares11614297Diluted income per common share0.610.730.51Average diluted shares (in millions)191194192Tier 1 common capital ratio (d)10.32%(c)10.38%10.57%Tangible common equity ratio (d)10.2510.2710.43(a)Included accretion of the purchase discount on the acquired Sterling loan portfolio of $15 million ($9 million, after tax), $18 million ($11 million, after tax) and $27 million ($17 million, after tax) in the third and second quarter 2012 and the third quarter 2011, respectively.(b)Included restructuring expenses of $25 million ($16 million, after tax), $8 million ($5 million, after tax) and $33 million ($21 million, after tax) in the third and second quarter 2012 and the third quarter 2011, respectively, associated with the acquisition of Sterling.(c)September 30, 2012 ratio is estimated.(d)See Reconciliation of Non-GAAP Financial Measures."Our customer relationship focus supported loan and deposit growth in the third quarter, despite a slow growing national economy," said Ralph W. Babb Jr., chairman and chief executive officer. "Average loans were up $369 million, or 1 percent, compared to the second quarter, primarily reflecting an increase of $717 million, or 3 percent, in commercial loans. This was the ninth consecutive quarter of average commercial loan growth, resulting in more than a 20 percent year-over-year increase, including our acquisition of Sterling in July 2011. The increase in average commercial loans in the third quarter was primarily driven by increases in Mortgage Banker Finance, Technology and Life Sciences, and Energy."Net interest income declined slightly, reflecting the expected continued shift in loan portfolio mix and decline in accretion, as well as a decline in nonaccrual interest received and a leasing residual value adjustment. Lower loan and securities portfolio yields were partially offset by increased loan volume.'' "Strong noninterest-bearing deposit growth continued in the third quarter. We had record average deposits of $50 billion in the third quarter 2012, with an increase of $1 billion, primarily driven by the increase in noninterest-bearing deposits. "Our capital position remained a source of strength. We repurchased 2.9 million shares in the third quarter under our share repurchase program. Combined with our dividend, we returned $119 million to shareholders in the third quarter."Third Quarter 2012 Compared to Second Quarter 2012 Average total loans increased $369 million, or 1 percent, primarily reflecting an increase of $717 million, or 3 percent, in commercial loans, partially offset by a decrease of $344 million, or 3 percent, in commercial real estate loans (commercial mortgage and real estate construction loans). The increase in commercial loans was primarily driven by increases in Mortgage Banker Finance, Technology and Life Sciences and Energy. Average total deposits increased $1.2 billion, to $49.9 billion, primarily reflecting an increase of $1.3 billion, or 7 percent, in noninterest-bearing deposits. Strong credit quality continued in the third quarter 2012. Nonaccrual loans decreased $54 million, to $665 million at September 30, 2012. Net credit-related charge-offs decreased $2 million to $43 million, or 0.39 percent of average loans, in the third quarter 2012. The provision for credit losses was $22 million in the third quarter 2012 compared to $19 million in the second quarter 2012. Net interest income was $427 million in the third quarter 2012 compared to $435 million in the second quarter 2012. The $8 million decrease in net interest income was primarily due to a decline in nonaccrual interest received($4 million) and a leasing residual value adjustment ($2 million), as well as the expected continued shift in the mix of the loan portfolio ($6 million), a decrease in the accretion of the purchase discount on the acquired Sterling loan portfolio ($3 million) and lower reinvestment yields on mortgage-backed investment securities ($2 million), partially offset by lower funding costs ($2 million), an increase in loan volumes ($3 million) and one more day in the third quarter ($4 million). Noninterest income was $197 million in the third quarter 2012 compared to $211 million for the second quarter 2012. The $14 million decrease was primarily due to decreases in certain non-customer driven income categories. Net securities gains of $6 million and a $5 million annual incentive bonus received in the second quarter 2012 were not repeated in the third quarter, and net income from principal investing and warrants declined $3 million. Noninterest expenses were $449 million in the third quarter 2012, compared to $433 million in the second quarter 2012. The $16 million increase primarily reflected a $17 million increase in restructuring expenses related to the Sterling acquisition. Comerica repurchased 2.9 million shares of common stock under the share repurchase program in the third quarter 2012. Combined with the dividend, and in accordance with the capital plan approved earlier this year, $119 million, or 101 percent of net income, was returned to shareholders in the third quarter (89 percent, excluding the third quarter restructuring charge).Net Interest Income(dollar amounts in millions)3rd Qtr '122nd Qtr '123rd Qtr '11Net interest income$427$435$423Net interest margin2.96%3.10%3.18%Selected average balances (a):Total earning assets$57,801$56,653$53,243Total loans43,59743,22840,098Total investment securities9,7919,7288,158Federal Reserve Bank deposits (excess liquidity)4,1603,4634,800Total deposits49,85748,67945,098Total noninterest-bearing deposits21,46920,12817,511a) Average balances in 3rd quarter 2011 included Sterling balances from July 28 through September 30, 2011.Net interest income of $427 million in the third quarter 2012 decreased $8 million compared to the second quarter 2012. Second quarter 2012 included an unusually high amount of interest received on nonaccrual loans, which declined by $4 million in the third quarter. In addition, third quarter 2012 included a $2 million negative residual value adjustment to assets in the leasing portfolio. The continued shift in the loan portfolio mix reduced net interest income $6 million, primarily due to the decrease in higher-yielding commercial real estate loans, the increase in lower-yielding commercial loans, the maturity of higher-yielding fixed-rate loans and positive credit quality migration throughout the loan portfolio. Accretion of the purchase discount on the acquired Sterling loan portfolio decreased $3 million, to $15 million in the third quarter 2012, compared to $18 million in the second quarter 2012. For the fourth quarter of 2012, $7 million to $9 million of accretion is expected to be recognized. Interest earned on investment securities available-for-sale decreased $2 million, as a result of lower reinvestment yields on mortgage-backed investment securities. An increase in loan volumes ($3 million), one more day in the third quarter ($4 million) and lower funding costs ($2 million) partially offset the items noted above.Average earning assets increased $1.1 billion in the third quarter 2012, compared to the second quarter 2012, primarily reflecting a $697 million increase in excess liquidity and a $369 million increase in average loans. Average deposits increased $1.2 billion in the third quarter 2012, compared to the second quarter 2012, primarily due to a $1.3 billion increase in average noninterest-bearing deposits, partially offset by a decrease in customer certificates of deposit. The rate paid on total average interest-bearing deposits decreased 1 basis point, to 24 basis points. Net interest margin of 2.96 percent decreased 14 basis points compared to the second quarter 2012. In addition to the decrease from the unusually high amount of nonaccrual interest received in the second quarter (3 basis points) and the negative leasing residual value adjustment in the third quarter (2 basis points), net interest margin was negatively impacted by lower accretion on the acquired Sterling loan portfolio (2 basis points), continued shift in mix in the loan portfolio (3 basis points), lower reinvestment yields on mortgage-backed securities (2 basis points) and the increase in excess liquidity (3 basis points). Lower funding costs partially offset the decline (1 basis point).Noninterest IncomeNoninterest income totaled $197 million for the third quarter 2012 compared to $211 million for the second quarter 2012. The $14 million decrease was primarily due to decreases in certain non-customer driven income categories. Net securities gains of $6 million and a $5 million annual incentive bonus received from Comerica's third-party credit card provider in the second quarter 2012 were not repeated in the third quarter, and net income from principal investing and warrants declined $3 million. Additionally, customer derivative income decreased $3 million in the third quarter 2012. These declines were partially offset by a $5 million increase in deferred compensation asset returns. The increase in deferred compensation asset returns is offset by an increase in deferred compensation expense in noninterest expenses. Noninterest ExpensesNoninterest expenses totaled $449 million in the third quarter 2012 compared to $433 million in the second quarter 2012. The $16 million increase was primarily due to increases of $17 million in restructuring expenses and $3 million in salaries expense, partially offset by a decrease of $5 million in legal expenses. Additionally, noninterest expenses were reduced by $6 million in the third quarter 2012 and $3 million in the second quarter due to gains on sales of assets. Restructuring charges related to the Sterling acquisition are substantially complete. The increase in salaries expense was primarily due to a $5 million increase in deferred compensation expense, partially offset by a $3 million decrease in executive incentive compensation. Credit Quality"Credit quality continued to be strong," said Babb. "With 39 basis points of net charge-offs and watch list loans at 8.3 percent of the total loan portfolio, we are well within our historical normal range."(dollar amounts in millions)3rd Qtr '122nd Qtr '123rd Qtr '11Net credit-related charge-offs$43$45$77Net credit-related charge-offs/Average total loans0.39%0.42%0.77%Provision for credit losses$22$19$35Nonperforming loans (a)692747958Nonperforming assets (NPAs) (a)7558141,045NPAs/Total loans and foreclosed property1.71%1.85%2.53%Loans past due 90 days or more and still accruing$36$43$81Allowance for loan losses647667767Allowance for credit losses on lending-related commitments (b)353627Total allowance for credit losses682703794Allowance for loan losses/Total loans1.46%1.52%1.86%Allowance for loan losses/Nonperforming loans948980(a)Excludes loans acquired with credit impairment.(b)Included in "Accrued expenses and other liabilities" on the consolidated balance sheets.Internal watch list loans continued the downward trend, declining $182 million in the third quarter 2012, to $3.7 billion at September 30, 2012. Nonperforming assets decreased $59 million to $755 million at September 30, 2012. During the third quarter 2012, $35 million of borrower relationships over $2 million were transferred to nonaccrual status, a decrease of $12 million from the second quarter 2012. Balance Sheet and Capital ManagementTotal assets and common shareholders' equity were $63.3 billion and $7.1 billion, respectively, at September 30, 2012, compared to $62.7 billion and 7.0 billion, respectively, at June 30, 2012. There were approximately 191 million common shares outstanding at September 30, 2012. Comerica repurchased $90 million of common stock (2.9 million shares) under the share repurchase program during the third quarter 2012. Combined with the dividend of $0.15 per share in the third quarter 2012, and in accordance with the capital plan approved earlier this year, share repurchases and dividends returned 101 percent of third quarter 2012 net income to shareholders (89 percent, excluding the third quarter restructuring charge). Comerica's tangible common equity ratio was 10.25% at September 30, 2012, a decrease of 2 basis points from June 30, 2012. The estimated Tier 1 common capital ratio decreased 6 basis points, to 10.32% at September 30, 2012, from June 30, 2012.Full-Year 2012 Outlook Compared to Full-Year 2011For 2012, management expects the following, assuming a continuation of the current economic environment:Average loans increasing 7 percent to 8 percent. Net interest income increasing 4 percent to 5 percent. Net credit-related charge-offs and provision for credit losses declining. Noninterest income increasing 1 percent to 2 percent. Noninterest expenses increasing or decreasing 1 percent. Effective tax rate of approximately 26 percent.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 reported 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, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2012 results compared to second quarter 2012.The following table presents net income (loss) by business segment.(dollar amounts in millions)3rd Qtr '122nd Qtr '123rd Qtr '11Business Bank$21188%$21084%$17986%Retail Bank104198199Wealth Management188208115239100%249100%209100%Finance(103)(95)(91)Other (a)(19)(10)(20)    Total$117$144$98(a) Includes items not directly associated with the three major business segments or the Finance Division.Business Bank(dollar amounts in millions)3rd Qtr '122nd Qtr '123rd Qtr '11Net interest income (FTE)$386$385$363Provision for credit losses151218Noninterest income768377Noninterest expenses144151164Net income211210179Net credit-related charge-offs272640Selected average balances:Assets34,86334,37630,608Loans33,85633,44929,957Deposits25,14224,14521,759Average loans increased $407 million, primarily due to increases in Mortgage Banker Finance and Middle Market, partially offset by a decrease in Commercial Real Estate. The increase in Middle Market primarily reflected increases in Energy and Technology and Life Sciences. Average deposits increased $997 million. The increase was broad-based, reflecting increases in Middle Market, Corporate, Commercial Real Estate and Mortgage Banker Finance. Net interest income increased $1 million, primarily due to higher loan volumes, increased net funds transfer pricing (FTP) credits, as a result of higher deposit balances, and one more day in the third quarter, partially offset by decreases in loan yields and accretion on the acquired Sterling loan portfolio. The provision for credit losses increased $3 million, primarily reflecting increases in Middle Market and Mortgage Banker Finance, partially offset by a decrease in Commercial Real Estate. The increase in Middle Market primarily reflected increases in Technology and Life Sciences, National Dealer Services and Energy, partially offset by a decrease in general Middle Market. Noninterest income decreased $7 million, primarily due to decreases in commercial lending fees and warrant income. Noninterest expenses decreased $7 million, primarily due to decreases in net allocated corporate overhead expense and processing charges, and a third quarter gain on sale of assets; partially offset by an increase in legal expenses.Retail Bank (dollar amounts in millions)3rd Qtr '122nd Qtr '123rd Qtr '11Net interest income (FTE)$161$161$173Provision for credit losses6316Noninterest income414747Noninterest expenses181177175Net income (loss)101919Net credit-related charge-offs13928Selected average balances:Assets5,9645,9465,985Loans5,2655,2505,483Deposits20,68220,52519,792Average deposits increased $157 million, primarily due to an increase in Small Business.| The provision for credit losses increased $3 million, primarily due to an increase in Small Business. Noninterest income decreased $6 million, primarily due to a $5 million annual incentive bonus received in the second quarter 2012 from Comerica's third-party credit card provider. Noninterest expenses increased $4 million, primarily due to small increases in several noninterest expense categories.Wealth Management (dollar amounts in millions)3rd Qtr '122nd Qtr '123rd Qtr '11Net interest income (FTE)$47$46$45Provision for credit losses327Noninterest income626656Noninterest expenses787977Net income182011Net credit-related charge-offs3109Selected average balances:Assets4,5664,6044,674Loans4,4764,5294,658Deposits3,6673,6403,198Average loans decreased $53 million, primarily due to a decrease in Private Banking. | Average deposits increased $27 million, primarily due to an increase in Private Banking. Noninterest income decreased $4 million, primarily due a decrease in gains on the sale of auction-rate securities.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, 2012 and are presented on a fully taxable equivalent (FTE) basis. The accompanying narrative addresses third quarter 2012 results compared to second quarter 2012.The following table presents net income (loss) by market segment.(dollar amounts in millions)3rd Qtr '122nd Qtr '123rd Qtr '11Midwest$7130%$7531%$6028%Western702969275023Texas451951206431Florida(1)?(5)(2)11Other Markets411747192211International135125126239100%249100%209100%Finance & Other (a)(122)(105)(111)    Total$117$144$98(a) Includes items not directly associated with the geographic markets.Midwest Market(dollar amounts in millions)3rd Qtr '122nd Qtr '123rd Qtr '11Net interest income (FTE)$194$196$199Provision for credit losses2120Noninterest income959696Noninterest expenses175177183Net income717560Net credit-related charge-offs121033Selected average balances:Assets13,78414,02814,118Loans13,46813,76613,873Deposits19,62819,22718,510Average loans decreased $298 million, primarily due to decreases in Middle Market, Commercial Real Estate, Corporate, and Private Banking. Average deposits increased $401 million, primarily due to increases in Corporate, Middle Market and Small Business, partially offset by a decrease in Personal Banking. Net interest income decreased $2 million, primarily due to decreases in loan volumes and yields, partially offset by one more day in the third quarter 2012 and an increase in net FTP credits, primarily as a result of higher deposit balances and lower loan balances.Western Market(dollar amounts in millions)3rd Qtr '122nd Qtr '123rd Qtr '11Net interest income (FTE)$181$177$166Provision for credit losses?113Noninterest income343732Noninterest expenses105104106Net income706950Net credit-related charge-offs101232Selected average balances:Assets13,44213,17012,110Loans13,16312,92011,889Deposits15,19214,37112,975Average loans increased $243 million, primarily due to increases in Middle Market and Corporate. The increase in Middle Market primarily reflected increases in Technology and Life Sciences and National Dealer Services. Average deposits increased $821 million, primarily due to increases in Middle Market, Commercial Real Estate and Small Business. The increase in Middle Market was broad-based. Net interest income increased $4 million, primarily due to an increase in loan volumes, one more day in the third quarter 2012, and an increase in net FTP credits as a result of higher deposit balances. Noninterest income decreased $3 million, primarily due to a decrease in warrant income.Texas Market (dollar amounts in millions)3rd Qtr '122nd Qtr '123rd Qtr '11Net interest income (FTE)$139$143$143Provision for credit losses107(8)Noninterest income303129Noninterest expenses898881Net income455164Net credit-related charge-offs742Selected average balances:Assets10,32710,2708,510Loans9,5859,5068,145Deposits9,94110,1858,865Average loans increased $79 million, primarily due to an increase in Middle Market, partially offset by a decrease in Commercial Real Estate. The increase in Middle Market was primarily due to an increase in Energy. Average deposits decreased $244 million, primarily reflecting decreases in Middle Market, Small Business and Private Banking. The decrease in Middle Market primarily reflected decreases in Technology and Life Sciences and Energy. Net interest income decreased $4 million, primarily due to a decrease in accretion on the acquired Sterling loan portfolio and lower loan yields, partially offset by an increase in loan volumes and one more day in the third quarter 2012. The provision for credit losses increased $3 million, primarily due to an increase in Private Banking.Florida Market(dollar amounts in millions)3rd Qtr '122nd Qtr '123rd Qtr '11Net interest income (FTE)$10$11$11Provision for credit losses5112Noninterest income344Noninterest expenses101111Net income(1)(5)1Net credit-related charge-offs9105Selected average balances:Assets1,3091,4071,450Loans1,3281,4291,477Deposits512446404Average loans decreased $101 million, primarily due to decreases in Commercial Real Estate and Private Banking. Average deposits increased $66 million, primarily due to an increase in Private Banking. The provision for credit losses decreased $6 million, primarily due to decreases in Private Banking and Middle Market.Conference Call and WebcastComerica will host a conference call to review third quarter 2012 financial results at 7 a.m. CT Wednesday, October 17, 2012. Interested parties may access the conference call by calling (800) 309-2262 or (706) 679-5261 (event ID No. 31764718). The call and supplemental financial information can also be accessed via Comerica's "Investor Relations" page at www.comerica.com. A telephone replay will be available approximately two hours following the conference call through October 31, 2012. The conference call replay can be accessed by calling (855) 859-2056 or (404) 537-3406 (event ID No. 31764718). 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 a reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.Forward-looking Statements Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "believes," "contemplates," "feels," "expects," "estimates," "seeks," "strives," "plans," "intends," "outlook," "forecast," "position," "target," "mission," "assume," "achievable," "potential," "strategy," "goal," "aspiration," "opportunity," "initiative," "outcome," "continue," "remain," "maintain," "on course," "trend," "objective," "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; changes in monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets; changes in Comerica's credit rating; the interdependence of financial service companies; changes in regulation or oversight; 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 of Comerica's customers; the implementation of Comerica's strategies and business models, including 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, failure of technology infrastructure or information security incidents; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; competitive product and pricing pressures among financial institutions within Comerica's markets; changes in customer behavior; 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 terrorist activities and other hostilities; the effects of catastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; changes in accounting standards and the critical nature of Comerica's accounting policies. 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 12 of Comerica's Annual Report on Form 10-K for the year ended December 31, 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)20122012201120122011PER COMMON SHARE AND COMMON STOCK DATADiluted net income$0.61$0.73$0.51$2.00$1.61Cash dividends declared0.150.150.100.400.30Common shareholders' equity (at period end)37.0136.1834.94Tangible common equity (at period end) (a)33.5632.7631.57Average diluted shares (in thousands)191,492194,487191,634193,991182,602KEY RATIOSReturn on average common shareholders' equity6.67%8.22%5.91%7.46%6.44%Return on average assets0.740.930.670.840.71Tier 1 common capital ratio (a) (b)10.3210.3810.57Tier 1 risk-based capital ratio (b)10.3210.3810.65Total risk-based capital ratio (b)13.6313.9014.84Leverage ratio (b)10.7110.9211.41Tangible common equity ratio (a)10.2510.2710.43AVERAGE BALANCESCommercial loans$26,700$25,983$22,127$25,810$21,769Real estate construction loans:Commercial Real Estate business line (c)9991,0351,2691,0291,501Other business lines (d)390385430391417Total real estate construction loans1,3891,4201,6991,4201,918Commercial mortgage loans:Commercial Real Estate business line (c)2,1402,4432,2442,3672,046Other business lines (d)7,5307,5408,0317,5847,856Total commercial mortgage loans9,6709,98310,2759,9519,902Lease financing852869936873960International loans1,3021,2651,1631,2571,212Residential mortgage loans1,4881,4871,6061,4981,577Consumer loans2,1962,2212,2922,2252,272Total loans43,59743,22840,09843,03439,610Earning assets57,80156,65353,24356,88450,923Total assets63,27661,95058,23862,28455,526Noninterest-bearing deposits21,46920,12817,51120,41516,259Interest-bearing deposits28,38828,55127,58728,53826,149Total deposits49,85748,67945,09848,95342,408Common shareholders' equity7,0457,0026,6336,9966,150NET INTEREST INCOMENet interest income (fully taxable equivalent basis)$428$435$424$1,306$1,212Fully taxable equivalent adjustment1?123Net interest margin (fully taxable equivalent basis)2.96%3.10%3.18%3.08%3.19%CREDIT QUALITYNonaccrual loans$665$719$929Reduced-rate loans272829Total nonperforming loans (e)692747958Foreclosed property636787Total nonperforming assets (e)7558141,045Loans past due 90 days or more and still accruing364381Gross loan charge-offs596490$185$338Loan recoveries1619135270Net loan charge-offs434577133268Allowance for loan losses647667767Allowance for credit losses on lending-related commitments353627Total allowance for credit losses682703794Allowance for loan losses as a percentage of total loans1.46%1.52%1.86%Net loan charge-offs as a percentage of average total loans (f)0.390.420.770.41%0.90%Nonperforming assets as a percentage of total loans and foreclosed property (e)1.711.852.53Allowance for loan losses as a percentage of total nonperforming loans948980(a)See Reconciliation of Non-GAAP Financial Measures.(b)September 30, 2012 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)Lending-related commitment charge-offs were zero in all periods presented.CONSOLIDATED BALANCE SHEETSComerica Incorporated and SubsidiariesSeptember 30,June 30,December 31,September 30,(in millions, except share data)2012201220112011(unaudited)(unaudited)(unaudited)ASSETSCash and due from banks$933$1,076$982$981Interest-bearing deposits with banks3,0053,0652,5744,217Other short-term investments146170149137Investment securities available-for-sale10,5699,94010,1049,732Commercial loans27,46027,01624,99623,113Real estate construction loans1,3921,3771,5331,648Commercial mortgage loans9,5599,83010,26410,539Lease financing837858905927International loans1,2771,2241,1701,046Residential mortgage loans1,4951,4691,5261,643Consumer loans2,1742,2182,2852,309Total loans44,19443,99242,67941,225Less allowance for loan losses(647)(667)(726)(767)Net loans43,54743,32541,95340,458Premises and equipment625667675685Accrued income and other assets4,4894,4074,5714,678Total assets$63,314$62,650$61,008$60,888LIABILITIES AND SHAREHOLDERS' EQUITYNoninterest-bearing deposits$21,753$21,330$19,764$19,116Money market and interest-bearing checking deposits20,40720,00820,31120,237Savings deposits1,5891,6291,5241,771Customer certificates of deposit5,7426,0455,8085,980Other time deposits???45Foreign office time deposits486376348303Total interest-bearing deposits28,22428,05827,99128,336Total deposits49,97749,38847,75547,452Short-term borrowings638370164Accrued expenses and other liabilities1,4501,4091,3711,312Medium- and long-term debt4,7404,7424,9445,009Total liabilities56,23055,62254,14053,937Common stock - $5 par value:Authorized - 325,000,000 sharesIssued - 228,164,824 shares1,1411,1411,1411,141Capital surplus2,1532,1442,1702,162Accumulated other comprehensive loss(253)(301)(356)(230)Retained earnings5,8315,7445,5465,471Less cost of common stock in treasury - 36,790,174 shares at 9/30/12, 33,889,392 shares at 6/30/12, 30,831,076 shares at 12/31/11 and 29,238,425 shares at 9/30/11(1,788)(1,700)(1,633)(1,593)Total shareholders' equity7,0847,0286,8686,951Total liabilities and shareholders' equity$63,314$62,650$61,008$60,888CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)Comerica Incorporated and SubsidiariesThree Months EndedNine Months EndedSeptember 30,September 30,(in millions, except per share data)2012201120122011INTEREST INCOMEInterest and fees on loans$400$405$1,219$1,149Interest on investment securities5754179170Interest on short-term investments3499Total interest income4604631,4071,328INTEREST EXPENSEInterest on deposits17245469Interest on medium- and long-term debt16164950Total interest expense3340103119Net interest income4274231,3041,209Provision for credit losses223563126Net interest income after provision for credit losses4053881,2411,083NONINTEREST INCOMEService charges on deposit accounts5353162156Fiduciary income3937116115Commercial lending fees22227164Letter of credit fees19195455Card fees12173547Foreign exchange income9112930Bank-owned life insurance10103027Brokerage fees551417Net securities gains?121118Other noninterest income28159281Total noninterest income197201614610NONINTEREST EXPENSESSalaries192192582565Employee benefits6153181153Total salaries and employee benefits253245763718Net occupancy expense4044121122Equipment expense17175049Outside processing fee expense27257974Software expense23226765Merger and restructuring charges25333338FDIC insurance expense982935Advertising expense772121Other real estate expense25619Other noninterest expenses4657161151Total noninterest expenses4494631,3301,292Income before income taxes153126525401Provision for income taxes3628134104NET INCOME11798391297Less income allocated to participating securities1143Net income attributable to common shares$116$97$387$294Earnings per common share:Basic$0.61$0.51$2.00$1.63Diluted0.610.512.001.61Comprehensive income165176494456Cash dividends declared on common stock29207855Cash dividends declared per common share0.150.100.400.30CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME (unaudited)Comerica Incorporated and SubsidiariesThirdSecondFirstFourthThirdThird Quarter 2012 Compared To:QuarterQuarterQuarterQuarterQuarterSecond Quarter 2012Third Quarter 2011(in millions, except per share data)20122012201220112011AmountPercentAmountPercentINTEREST INCOMEInterest and fees on loans$400$408$411$415$405$(8)(2)%$(5)(1)%Interest on investment securities5759636354(2)(4)34Interest on short-term investments33334??(1)(5)Total interest income460470477481463(10)(2)(3)(1)INTEREST EXPENSEInterest on deposits1718192124(1)(4)(7)(26)Interest on medium- and long-term debt1617161616(1)(5)??Total interest expense3335353740(2)(5)(7)(15)Net interest income427435442444423(8)(2)41Provision for credit losses2219221835314(13)(38)Net interest income after provision for credit losses405416420426388(11)(2)174NONINTEREST INCOMEService charges on deposit accounts5353565253????Fiduciary income3939383637??27Commercial lending fees2224252322(2)(10)??Letter of credit fees191817181918??Card fees1212111117??(5)(30)Foreign exchange income910101011(1)(3)(2)(15)Bank-owned life insurance1010101010????Brokerage fees5455512??Net securities gains (losses)?65(4)12(6)N/M(12)N/MOther noninterest income2835292115(7)(18)1389Total noninterest income197211206182201(14)(7)(4)(2)NONINTEREST EXPENSESSalaries19218920120519231??Employee benefits6161595253??816Total salaries and employee benefits2532502602572453183Net occupancy expense4040414744??(4)(7)Equipment expense171617171712??Outside processing fee expense27262627251?24Software expense23212323222615Merger and restructuring charges258?373317N/M(8)(22)FDIC insurance expense9101088(1)?128Advertising expense77777????Other real estate expense2?4352N/M(3)(65)Other noninterest expenses4655605357(9)(15)(11)(21)Total noninterest expenses449433448479463164(14)(3)Income before income taxes153194178129126(41)(21)2723Provision for income taxes3650483328(14)(27)833NET INCOME1171441309698(27)(18)1920Less income allocated to participating securities12111(1)(12)??Net income attributable to common shares$116$142$129$95$97$(26)(18)%$1920%Earnings per common share:Basic$0.61$0.73$0.66$0.48$0.51$(0.12)(16)%$0.1020%Diluted0.610.730.660.480.51(0.12)(16)0.1020Comprehensive income (loss)165169160(30)176(4)(2)(11)(6)Cash dividends declared on common stock2929202020??945Cash dividends declared per common share0.150.150.100.100.10??0.0550N/M - Not MeaningfulANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (unaudited)Comerica Incorporated and Subsidiaries20122011(in millions)3rd Qtr2nd Qtr1st Qtr4th Qtr3rd QtrBalance at beginning of period$667$704$726$767$806Loan charge-offs:Commercial1926252833Real estate construction:Commercial Real Estate business line (a)222411Other business lines (b)?1?1?Total real estate construction232511Commercial mortgage:Commercial Real Estate business line (a)1216131712Other business lines (b)1311132421Total commercial mortgage2527264133International1?22?Residential mortgage63224Consumer65579Total loan charge-offs5964628590Recoveries on loans previously charged-off:Commercial7109115Real estate construction31143Commercial mortgage54393International??1??Residential mortgage??1?1Consumer14211Total recoveries1619172513Net loan charge-offs4345456077Provision for loan losses238231938Balance at end of period$647$667$704$726$767Allowance for loan losses as a percentage of total loans1.46%1.52%1.64%1.70%1.86%Net loan charge-offs as a percentage of average total loans0.390.420.430.570.77(a)Primarily charge-offs of loans to real estate investors and developers.(b)Primarily charge-offs of loans secured by owner-occupied real estate.ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LENDING-RELATED COMMITMENTS (unaudited)Comerica Incorporated and Subsidiaries20122011(in millions)3rd Qtr2nd Qtr1st Qtr4th Qtr3rd QtrBalance at beginning of period$36$25$26$27$30Add: Provision for credit losses on lending-related commitments(1)11(1)(1)(3)Balance at end of period$35$36$25$26$27Unfunded lending-related commitments sold$?$?$?$?$?NONPERFORMING ASSETS (unaudited)Comerica Incorporated and Subsidiaries20122011(in millions)3rd Qtr2nd Qtr1st Qtr4th Qtr3rd QtrSUMMARY OF NONPERFORMING ASSETS AND PAST DUE LOANSNonaccrual loans:Business loans:Commercial$154$175$205$237$258Real estate construction:Commercial Real Estate business line (a)45607793109Other business lines (b)69883Total real estate construction516985101112Commercial mortgage:Commercial Real Estate business line (a)137155174159198Other business lines (b)219220275268275Total commercial mortgage356375449427473Lease financing34455International??487Total nonaccrual business loans564623747778855Retail loans:Residential mortgage6976697165Consumer:Home equity2816954Other consumer44565Total consumer322014119Total nonaccrual retail loans10196838274Total nonaccrual loans665719830860929Reduced-rate loans2728262729Total nonperforming loans (c)692747856887958Foreclosed property6367679487Total nonperforming assets (c)$755$814$923$981$1,045Nonperforming loans as a percentage of total loans1.57%1.70%1.99%2.08%2.32%Nonperforming assets as a percentage of total loansand foreclosed property1.711.852.142.292.53Allowance for loan losses as a percentage of total nonperforming loans9489828280Loans past due 90 days or more and still accruing$36$43$50$58$81ANALYSIS OF NONACCRUAL LOANSNonaccrual loans at beginning of period$719$830$860$929$941Loans transferred to nonaccrual (d)35476999130Nonaccrual business loan gross charge-offs (e)(46)(56)(55)(76)(76)Loans transferred to accrual status (d)?(41)??(15)Nonaccrual business loans sold (f)(20)(16)(7)(19)(15)Payments/Other (g)(23)(45)(37)(73)(36)Nonaccrual loans at end of period$665$719$830$860$929(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) Based on an analysis of nonaccrual loans with book balances greater than $2 million.(e) Analysis of gross loan charge-offs:Nonaccrual business loans$46$56$55$76$76Performing watch list loans1???1Consumer and residential mortgage loans1287913Total gross loan charge-offs$59$64$62$85$90(f) Analysis of loans sold:Nonaccrual business loans$20$16$7$19$15Performing watch list loans42711?16Total loans sold$62$23$18$19$31(g) 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) (unaudited)Comerica Incorporated and SubsidiariesNine Months EndedSeptember 30, 2012September 30, 2011AverageAverageAverageAverage(dollar amounts in millions)BalanceInterestRateBalanceInterestRateCommercial loans$25,810$6733.48%$21,769$6043.70%Real estate construction loans1,420474.481,918594.12Commercial mortgage loans9,9513374.519,9023064.12Lease financing873192.92960253.53International loans1,257353.731,212353.89Residential mortgage loans1,498524.661,577635.34Consumer loans2,225573.442,272593.47Total loans (a)43,0341,2203.7939,6101,1513.88Auction-rate securities available-for-sale29420.7849730.75Other investment securities available-for-sale9,5091782.577,1311683.20Total investment securities available-for-sale9,8031802.517,6281713.03Interest-bearing deposits with banks (b)3,90980.263,55770.24Other short-term investments13811.8012822.14Total earning assets56,8841,4093.3250,9231,3313.50Cash and due from banks967908Allowance for loan losses(707)(860)Accrued income and other assets5,1404,555Total assets$62,284$55,526Money market and interest-bearing checking deposits$20,583260.18$18,539360.26Savings deposits1,58910.061,51610.11Customer certificates of deposit5,993250.545,666300.70Foreign office and other time deposits37320.6442820.50Total interest-bearing deposits28,538540.2526,149690.35Short-term borrowings78?0.12137?0.15Medium- and long-term debt4,846491.365,702501.17Total interest-bearing sources33,4621030.4131,9881190.50Noninterest-bearing deposits20,41516,259Accrued expenses and other liabilities1,4111,129Total shareholders' equity6,9966,150Total liabilities and shareholders' equity$62,284$55,526Net interest income/rate spread (FTE)$1,3062.91$1,2123.00FTE adjustment$2$3Impact of net noninterest-bearing sources of funds0.170.19Net interest margin (as a percentage of average earning assets) (FTE) (a) (b)3.08%3.19%(a)  Accretion of the purchase discount on the acquired loan portfolio of $58 million and $27 million in the nine months ended September 30, 2012 and 2011, respectively, increased the net interest margin by 14 basis points and 7 basis points in the nine months ended September 30, 2012 and 2011, respectively.(b)   Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 20 basis points and 22 basis points in the nine months ended September 30, 2012 and 2011, respectively.ANALYSIS OF NET INTEREST INCOME (FTE) (unaudited)Comerica Incorporated and SubsidiariesThree Months EndedSeptember 30, 2012June 30, 2012September 30, 2011AverageAverageAverageAverageAverageAverage(dollar amounts in millions)BalanceInterestRateBalanceInterestRateBalanceInterestRateCommercial loans$26,700$2273.38%$25,983$2273.52%$22,127$2073.70%Real estate construction loans1,389154.361,420154.501,699235.28Commercial mortgage loans9,6701064.349,9831124.4610,2751154.42Lease financing85242.0486973.2893683.46International loans1,302123.771,265123.661,163114.01Residential mortgage loans1,488174.671,487174.531,606215.30Consumer loans2,196193.442,221183.372,292203.56Total loans (a)43,5974003.6643,2284083.7940,0984054.01Auction-rate securities available-for-sale23410.97296?0.8243710.63Other investment securities available-for-sale9,557572.429,432592.557,721542.87Total investment securities available-for-sale9,791582.389,728592.498,158552.74Interest-bearing deposits with banks (b)4,27630.263,55630.264,85130.23Other short-term investments137?1.88141?1.5513612.30Total earning assets57,8014613.1956,6534703.3553,2434643.47Cash and due from banks971931969Allowance for loan losses(673)(710)(814)Accrued income and other assets5,1775,0764,840Total assets$63,276$61,950$58,238Money market and interest-bearing checking deposits$20,49580.17$20,45880.18$19,595130.25Savings deposits1,618?0.041,60710.071,659?0.14Customer certificates of deposit5,89480.526,10790.535,878100.66Foreign office and other time deposits38110.71379?0.6445510.49Total interest-bearing deposits28,388170.2428,551180.2527,587240.33Short-term borrowings89?0.1268?0.12204?0.08Medium- and long-term debt4,745161.354,854171.405,168161.23Total interest-bearing sources33,222330.4033,473350.4232,959400.47Noninterest-bearing deposits21,46920,12817,511Accrued expenses and other liabilities1,5401,3471,135Total shareholders' equity7,0457,0026,633Total liabilities and shareholders' equity$63,276$61,950$58,238Net interest income/rate spread (FTE)$4282.79$4352.93$4243.00FTE adjustment$1$?$1Impact of net noninterest-bearing sources of funds0.170.170.18Net interest margin (as a percentage of average earning assets) (FTE) (a) (b)2.96%3.10%3.18%(a)  Accretion of the purchase discount on the acquired loan portfolio of $15 million, $18 million and $27 million in the third and second quarters of 2012 and the third quarter of 2011, respectively, increased the net interest margin by 10 basis points, 13 basis points and 20 basis points in the third and second quarters of 2012 and the third quarter of 2011, respectively.(b)   Excess liquidity, represented by average balances deposited with the Federal Reserve Bank, reduced the net interest margin by 21 basis points and by 18 basis points in the third and second quarters of 2012, respectively, and by 29 basis points in the third quarter of 2011.CONSOLIDATED STATISTICAL DATA (unaudited)Comerica Incorporated and SubsidiariesSeptember 30,June 30,March 31,December 31,September 30,(in millions, except per share data)20122012201220112011Commercial loans:Floor plan$2,276$2,406$2,152$1,822$1,209Other25,18424,61023,48823,17421,904Total commercial loans27,46027,01625,64024,99623,113Real estate construction loans:Commercial Real Estate business line (a)1,0039911,0551,1031,226Other business lines (b)389386387430422Total real estate construction loans1,3921,3771,4421,5331,648Commercial mortgage loans:Commercial Real Estate business line (a)2,0202,3152,5012,5072,602Other business lines (b)7,5397,5157,5787,7577,937Total commercial mortgage loans9,5599,83010,07910,26410,539Lease financing837858872905927International loans1,2771,2241,2561,1701,046Residential mortgage loans1,4951,4691,4851,5261,643Consumer loans:Home equity1,5701,5841,6121,6551,683Other consumer604634626630626Total consumer loans2,1742,2182,2382,2852,309Total loans$44,194$43,992$43,012$42,679$41,225Goodwill$635$635$635$635$635Core deposit intangible2325272932Loan servicing rights23333Tier 1 common capital ratio (c) (d)10.32%10.38%10.27%10.37%10.57%Tier 1 risk-based capital ratio (d)10.3210.3810.2710.4110.65Total risk-based capital ratio (d)13.6313.9013.9914.2514.84Leverage ratio (d)10.7110.9210.9410.9211.41Tangible common equity ratio (c)10.2510.2710.2110.2710.43Common shareholders' equity per share of common stock$37.01$36.18$35.44$34.80$34.94Tangible common equity per share of common stock (c)33.5632.7632.0631.4231.57Market value per share for the quarter:High33.3832.8834.0027.3735.79Low29.3227.8826.2521.5321.48Close31.0530.7132.3625.8022.97Quarterly ratios:Return on average common shareholders' equity6.67%8.22%7.50%5.51%5.91%Return on average assets0.740.930.840.630.67Efficiency ratio71.6867.5369.7075.9775.59Number of banking centers490493495494502Number of employees - full time equivalent9,0089,0149,1959,3979,701(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, 2012 ratios are estimated.PARENT COMPANY ONLY BALANCE SHEETS (unaudited)Comerica IncorporatedSeptember 30,December 31,September 30,(in millions, except share data)201220112011ASSETSCash and due from subsidiary bank$13$73Short-term investments with subsidiary bank418411440Other short-term investments889086Investment in subsidiaries, principally banks7,2007,0117,098Premises and equipment443Other assets150177189    Total assets$7,873$7,700$7,819LIABILITIES AND SHAREHOLDERS' EQUITYMedium- and long-term debt$632$666$722Other liabilities157166146    Total liabilities789832868Common stock - $5 par value:Authorized - 325,000,000 sharesIssued - 228,164,824 shares1,1411,1411,141Capital surplus2,1532,1702,162Accumulated other comprehensive loss(253)(356)(230)Retained earnings5,8315,5465,471Less cost of common stock in treasury - 36,790,174 shares at 9/30/12, 30,831,076 shares at 12/31/11, and 29,238,425 shares at 9/30/11(1,788)(1,633)(1,593)    Total shareholders' equity7,0846,8686,951    Total liabilities and shareholders' equity$7,873$7,700$7,819CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)Comerica Incorporated and SubsidiariesAccumulatedCommon StockOtherTotalSharesCapitalComprehensiveRetainedTreasuryShareholders'(in millions, except per share data)OutstandingAmountSurplusLossEarningsStockEquityBALANCE AT DECEMBER 31, 2010176.5$1,019$1,481$(389)$5,247$(1,565)$5,793Net income????297?297Other comprehensive income, net of tax???159??159Cash 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 plans0.8?(29)?(18)47?Share-based compensation??29???29BALANCE AT SEPTEMBER 30, 2011198.9$1,141$2,162$(230)$5,471$(1,593)$6,951BALANCE AT DECEMBER 31, 2011197.3$1,141$2,170$(356)$5,546$(1,633)$6,868Net income????391?391Other comprehensive income, net of tax???103??103Cash dividends declared on common stock ($0.40 per share)????(78)?(78)Purchase of common stock(7.1)????(215)(215)Net issuance of common stock under employee stock plans1.2?(48)?(28)62(14)Share-based compensation??29???29Other??2??(2)?BALANCE AT SEPTEMBER 30, 2012191.4$1,141$2,153$(253)$5,831$(1,788)$7,084BUSINESS SEGMENT FINANCIAL RESULTS (unaudited)Comerica Incorporated and Subsidiaries(dollar amounts in millions)BusinessRetailWealthThree Months Ended September 30, 2012BankBankManagementFinanceOtherTotalEarnings summary:Net interest income (expense) (FTE)$386$161$47$(176)$10$428Provision for credit losses1563?(2)22Noninterest income764162144197Noninterest expenses14418178343449Provision (benefit) for income taxes (FTE)92510(62)(8)37Net income (loss)$211$10$18$(103)$(19)$117Net credit-related charge-offs$27$13$3??$43Selected average balances:Assets$34,863$5,964$4,566$12,166$5,717$63,276Loans33,8565,2654,476??43,597Deposits25,14220,6823,66719317349,857Statistical data:Return on average assets (a)2.42%0.18%1.61%N/MN/M0.74%Efficiency ratio31.2389.3971.14N/MN/M71.68BusinessRetailWealthThree Months Ended June 30, 2012BankBankManagementFinanceOtherTotalEarnings summary:Net interest income (expense) (FTE)$385$161$46$(166)$9$435Provision for credit losses1232?219Noninterest income83476617(2)211Noninterest expenses15117779224433Provision (benefit) for income taxes (FTE)95911(56)(9)50Net income (loss)$210$19$20$(95)$(10)$144Net credit-related charge-offs$26$9$10??$45Selected average balances:Assets$34,376$5,946$4,604$11,953$5,071$61,950Loans33,4495,2504,529??43,228Deposits24,14520,5253,64017719248,679Statistical data:Return on average assets (a)2.44%0.35%1.76%N/MN/M0.93%Efficiency ratio32.3085.1773.98N/MN/M67.53BusinessRetailWealthThree Months Ended September 30, 2011BankBankManagementFinanceOtherTotalEarnings summary:Net interest income (expense) (FTE)$363$173$45$(168)11$424Provision for credit losses18167?(6)35Noninterest income77475626(5)201Noninterest expenses16417577344463Provision (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$30,608$5,985$4,674$10,210$6,761$58,238Loans29,9575,4834,658??40,098Deposits21,75919,7923,19823611345,098Statistical data:Return on average assets (a)2.33%0.38%0.95%N/MN/M0.67%Efficiency ratio37.3879.1778.06N/MN/M75.59(a)Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.FTE - Fully Taxable EquivalentN/M - Not MeaningfulMARKET SEGMENT FINANCIAL RESULTS (unaudited)Comerica Incorporated and Subsidiaries(dollar amounts in millions)OtherFinanceThree Months Ended September 30, 2012MidwestWesternTexasFloridaMarketsInternational& OtherTotalEarnings summary:Net interest income (expense) (FTE)$194$181$139$10$51$19$(166)$428Provision for credit losses2?10561(2)22Noninterest income953430371018197Noninterest expenses175105891016846449Provision (benefit) for income taxes (FTE)414025(1)(5)7(70)37Net income (loss)$71$70$45$(1)$41$13$(122)$117Net credit-related charge-offs$12$10$7$9$41?$43Selected average balances:Assets$13,784$13,442$10,327$1,309$4,621$1,910$17,883$63,276Loans13,46813,1639,5851,3284,2661,787?43,597Deposits19,62815,1929,9415122,8231,39536649,857Statistical data:Return on average assets (a)1.38%1.74%1.61%(0.29)%3.54%2.65%N/M0.74%Efficiency ratio60.4048.6352.5076.9027.3828.28N/M71.68OtherFinanceThree Months Ended June 30, 2012MidwestWesternTexasFloridaMarketsInternational& OtherTotalEarnings summary:Net interest income (expense) (FTE)$196$177$143$11$46$19$(157)$435Provision for credit losses11711(4)1219Noninterest income963731419915211Noninterest expenses177104881118926433Provision (benefit) for income taxes (FTE)394028(2)46(65)50Net income (loss)$75$69$51$(5)$47$12$(105)$144Net credit-related charge-offs$10$12$4$10$9$??$45Selected average balances:Assets$14,028$13,170$10,270$1,407$4,183$1,868$17,024$61,950Loans13,76612,9209,5061,4293,8371,770?43,228Deposits19,22714,37110,1854462,7281,35336948,679Statistical data:Return on average assets (a)1.48%1.78%1.78%(1.35)%4.53%2.54%N/M0.93%Efficiency ratio60.5148.4450.9677.4530.4329.78N/M67.53OtherFinanceThree Months Ended September 30, 2011MidwestWesternTexasFloridaMarketsInternational& OtherTotalEarnings summary:Net interest income (expense) (FTE)$199$166$143$11$41$21$(157)$424Provision for credit losses2013(8)2122(6)35Noninterest income963229410921201Noninterest expenses1831068111251047463Provision (benefit) for income taxes (FTE)3229351(8)6(66)29Net income (loss)$60$50$64$1$22$12$(111)$98Net credit-related charge-offs$33$32$2$5$5$??$77Selected average balances:Assets$14,118$12,110$8,510$1,450$3,374$1,705$16,971$58,238Loans13,87311,8898,1451,4773,0821,632?40,098Deposits18,51012,9758,8654042,3921,60334945,098Statistical data:Return on average assets (a)1.22%1.42%2.66%0.29%2.66%2.76%N/M0.67%Efficiency ratio62.0853.6846.8378.3950.2131.22N/M75.59(a)Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.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)20122012201220112011Tier 1 Common Capital Ratio:Tier 1 capital (a) (b)$6,685$6,676$6,647$6,582$6,560Less:Trust preferred securities???2549Tier 1 common capital (b)$6,685$6,676$6,647$6,557$6,511Risk-weighted assets (a) (b)$64,772$64,312$64,742$63,244$61,593Tier 1 risk-based capital ratio (b)10.32%10.38%10.27%10.41%10.65%Tier 1 common capital ratio (b)10.3210.3810.2710.3710.57Tangible Common Equity Ratio:Common shareholders' equity$7,084$7,028$6,985$6,868$6,951Less:Goodwill635635635635635Other intangible assets2528303235Tangible common equity$6,424$6,365$6,320$6,201$6,281Total assets$63,314$62,650$62,593$61,008$60,888Less:Goodwill635635635635635Other intangible assets2528303235Tangible assets$62,654$61,987$61,928$60,341$60,218Common equity ratio11.19%11.22%11.16%11.26%11.42%Tangible common equity ratio10.2510.2710.2110.2710.43Tangible Common Equity per Share of Common Stock:Common shareholders' equity$7,084$7,028$6,985$6,868$6,951Tangible common equity6,4246,3656,3206,2016,281Shares of common stock outstanding (in millions)191194197197199Common shareholders' equity per share of common stock$37.01$36.18$35.44$34.80$34.94Tangible common equity per share of common stock33.5632.7632.0631.4231.57(a)  Tier 1 capital and risk-weighted assets as defined by regulation.(b)  September 30, 2012 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 ratio removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets. Tangible common equity per share of common stock removes the effect of intangible assets from common shareholders equity per share of common stock. Comerica 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 Contact, Wayne J. Mielke, +1 (214) 462-4463, or Investor Contacts, Darlene P. Persons, +1 (214) 462-6831, or Brittany L. Butler, +1 (214) 462-6834