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| 8-K - 8-K - COMERICA INC /NEW/ | bankofamericaform8-k.htm |
Comerica Incorporated Bank of America Merrill Lynch Banking and Financial Services ConferenceNovember 13-14, 2012 Ralph W. Babb, Jr. Karen ParkhillChairman and CEO Vice Chairman and CFO Safe Harbor Statement 2 Any statements in this presentation that are not historical facts are forward-looking statements as defined in the Private Securities Litigation ReformAct 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 orconditional 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'smanagement based on information known to Comerica's management as of the date of this presentation and do not purport to speak as of any otherdate. 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 ofprofitability, business segments and subsidiaries, estimates of credit trends and global stability. Such statements reflect the view of Comerica'smanagement as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize orshould underlying beliefs or assumptions prove incorrect, Comerica's actual results could differ materially from those discussed. Factors that couldcause 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'scredit rating; the interdependence of financial service companies; changes in regulation or oversight; unfavorable developments concerning creditquality; the acquisition of Sterling Bancshares, Inc., or any future acquisitions; the effects of more stringent capital or liquidity requirements; declinesor 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 andeffectively develop, market and deliver new products and services; operational difficulties, failure of technology infrastructure or information securityincidents; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; competitive product and pricingpressures among financial institutions within Comerica's markets; changes in customer behavior; management's ability to maintain and expandcustomer relationships; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings; the effectivenessof methods of reducing risk exposures; the effects of terrorist activities and other hostilities; the effects of catastrophic events including, but notlimited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; changes in accounting standards and the critical nature of Comerica'saccounting policies. Comerica cautions that the foregoing list of factors is not exclusive. For discussion of factors that may cause actual results todiffer from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to “Item 1A. RiskFactors” beginning on page 12 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2011 and “Item 1A. Risk Factors”beginning on page 73 of the Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012. Forward-looking statementsspeak 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 thispresentation or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the PrivateSecurities Litigation Reform Act of 1995.
Comerica: A Brief Overview Among the top 25 U.S. bank holding companies $63 billion in assets Strong presence in Texas, California, and Michigan Three primary lines of business: Business Bank, Retail Bank, and Wealth Management Founded over 160 years ago Strong capital position• Tier 1 Common Ratio 10.35%3 3 Business Segment Revenue1 Business Bank $1,39060% Retail Bank $61926% WM $33314% Market Segment Revenue2 Other Markets $1808% Western$63327% International $84 4% Texas$52622% Florida$422% Midwest$87737% At 9/30/12; $ in millions (MM) 1YTD 9/30/12; YTD revenues (FTE) of $2,342MM from major business segments ($1,920MM from continuing operations (FTE) including Finance & Other Businesses); 2YTD 9/30/12: YTD revenues (FTE) of $2,342MM from major geographic markets ($1,920MM from continuing operations (FTE) including Finance & Other Businesses) based on office of origination; Midwest includes: MI, OH, IL; Western includes: CA, AZ, NV, CO, WA; Other Markets include markets not separately identified above in addition to businesses with a national perspective. 3See Supplemental Financial Data slides for reconciliation of non-GAAP financial measures Loan Growth Outpacing Peers 4At 9/30/2012. 1Source: SNL Financial. Includes Sterling Bancshares loans from July 28, 2011. -5.5 % - 3.4% 1.1% 2 .9% 6.0% 6.0% 6.1% 8.2% 8.7 % 8.8% 9.1 % 9.4% Peer Average: 4.8% Total Average Loan Growth1(3Q12 vs. 3Q11) 40.1 41.5 42.3 43.2 43.6 44.0 44.2 3Q11 4Q11 1Q12 2Q12 3Q12 2Q12 3Q12 Sterling Total Loan Growth ($B) Nine consecutive quarters of average loan growth Line utilization was 48.2%, relatively stable from 48.8% in 2Q12 Commitments increased $1.2B to $49.7B, with increases in all commercial businesses and markets Loan pipeline remains strong Average Balances Period-end
Largest U.S. commercial bank with corporate headquarters in Texas Acquisition of Sterling completed July 28, 2011 – Increased deposit share to #91 in Texas Comerica Texas Economic Activity Index2 up 38% from cycle low Focus: Texas Market 8.9 10.3 10.2 10.2 9.9 3Q11 4Q11 1Q12 2Q12 3Q12 Average Deposit Balances ($ in B) 5 8.1 9.0 9.3 9.5 9.6 3Q11 4Q11 1Q12 2Q12 3Q12 Average Loan Balances ($ in B) At 9/30/2012. Includes Sterling Bancshares from July 28, 2011. 1Source: FDIC June 2012. 2As of October 2012. 3Source: Comerica Economics forecast of nonfarm payroll data based on Bureau of Labor Statistics, as compiled by Moody’s Analytics. Analysis as of August 2012. 1.1 2.7 3.3 2.2 1.9 1.4 3.1 3.6 2.2 1.9 0.0 1.0 2.0 3.0 4.0 US Average Austin Houston North Texas San Antonio 2012f 2013f Year Over Year Projected Job Growth3 Focus: Midwest Market Established: 1849 Maintained #2 position in Michigan, with an increased deposit market share from 20111 Comerica Michigan Economic Activity Index2 up 78% from cycle low 18.5 19.1 19.4 19.2 19.6 3Q11 4Q11 1Q12 2Q12 3Q12 Average Deposit Balances ($ in B) At 9/30/2012. 1Source: FDIC June 2012. 2As of October 2012. 3Source: Comerica Economics forecast of nonfarm payroll data based on Bureau of Labor Statistics, as compiled by Moody’s Analytics. Analysis as of August 2012. 6 13.9 13.7 13.8 13.8 13.5 3Q11 4Q11 1Q12 2Q12 3Q12 Average Loan Balances ($ in B) -3% 1.1 1.5 1.1 1.4 1.7 1.5 0.0 0.5 1.0 1.5 2.0 US Average Central W. MI Detroit 2012f 2013f Year Over Year Projected Job Growth3
Focus: Western Market Established: 1991 Increased deposit market share from 20111 Comerica California Economic Activity Index2 up 43% from cycle low 13.0 13.7 13.9 14.4 15.2 3Q11 4Q11 1Q12 2Q12 3Q12 Average Deposit Balances ($ in B) 7 11.9 12.0 12.4 12.9 13.2 3Q11 4Q11 1Q12 2Q12 3Q12 Average Loan Balances ($ in B) 1.1 2.3 1.8 1.3 1.4 2.5 2.7 1.3 0.0 0.5 1.0 1.5 2.0 2.5 3.0 US Average Phoenix No. CA So. CA 2012f 2013f Year Over Year Projected Job Growth3 At 9/30/2012. 1Source: FDIC June 2012. 2As of October 2012. 3Source: Comerica Economics forecast of nonfarm payroll data based on Bureau of Labor Statistics, as compiled by Moody’s Analytics. Analysis as of August 2012. Focus: Mortgage Banker Finance 8 40+ years experience with reputation for consistent, reliable approach Provide short-term warehouse financing: bridge from origination of residential mortgage until sale into end market Extensive backroom provides collateral monitoring and customer service Focus on full banking relationships: 87% of customers have 3 or more products Excellent credit quality 563 657 504 564 425 707 943 1,10 1 566 614 923 1,53 5 1,48 3 1,50 7 1,99 6 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Average Loan OutstandingsMBA Mortgage Origination VolumesMBA Mortgage Origination Volume Estimates Average Loans ($ MMs) 198 2 80 319 254 360 481 52 3 551 6 37 513 372 399 4 41 454 49 7 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 Average Deposits ($ MMs) MBA = Mortgage Banker Association
Focus: Energy • 30+ years experience through the cycles • Focus on middle market companies• Excellent credit quality• Deep relationships with significant ancillary noncredit products • Diverse customer base1: Natural Gas Oil Mixed Midstream 20% Service 10% Exploration & Production 70% $ in millions. 1Based on 3Q12 period end loans outstanding. 1,81 1 1,65 6 1,46 9 1,32 7 1,29 6 1,14 9 1,19 6 1,26 9 1,42 3 1,45 6 1,63 5 1,94 7 2,30 5 2,45 2 2,64 1 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 Average Loans ($ MMs) 67 71 84 107 152 233 430 444 50 1 493 492 865 686 567 533 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 Average Deposits ($ MMs) 9 Focus:Commercial Real Estate Line of Business 10 6,84 3 6,65 2 6,36 5 6,04 5 5,74 4 5,37 4 5,09 6 4,75 4 4,42 8 4,03 4 4,43 6 4,57 7 4,36 5 4,30 5 3,92 4 Commercial & OtherReal Estate ConstructionCommercial Mortgages Pace of Decline Expected to Slow Commercial Real Estate (CRE) Line of Business1 160+ years experience with focus on well-established developers, primarily in our footprint Provide construction financing with mini-perm mortgage to bridge project to end-market Extensive backroom construction monitoring and customer service Focus on full banking relationships: 70% of customers have depository accounts 3,629 3,802 4,151 4,228 4,248 3Q11 4Q11 1Q12 2Q12 3Q12 CRE Commitments2 $ in millions. At 9/30/12. 1Average loan balances. Outlook as of November 13, 2012. 2Based on period end commitments.
At 9/30/12 1Source: 2012 Nilson Report, a leading payment systems publication. 2Final rule announced 12/22/10 Focus: Government Card Programs #2 prepaid card issuer1 in US Service 32 state and local government benefit programs with over 5.6MM cards issued Service US Treasury DirectExpress Program:• Exclusive provider of prepaid debit cards with a contract through January 2015• Over 3.4 million cards registered• Phasing out checks2As of 5/1/11, new benefit recipientsAs of 3/1/13, current check recipients 11 185 290 532 650 720 930 2007 2008 2009 2010 2011 YTD 2012 US Treasury Program State Card Programs Growing Average Noninterest-Bearing Deposits ($ MMs) 2,501 1,349 866 628 312 840 1Y 2Y 3Y 4Y 5Y Greaterthan 5 12 As of 9/30/12. 1Expected cash flow based on contractual amortization and maturities. 2Stated rate on instrument. 3As of 6/30/12. Excludes SNV and ZION as amounts were not reported. Fixed Rate Loan Principal Cash Flows1 ($ in MM) 0% 20% 40% 60% 80% 100% CMA FHN KEY RF MTB HBAN STI BOKF FITB BBT 3 Months or Less Greater Than 3 Months Faster Re-pricing or Maturity Date3 Loan portfolio: ≈15% fixed rate and ≈85% floating rate of which 75% LIBOR based (primarily 30-day) Fixed rate portfolio: Weighted average life of 2.63 years and coupon rate of 4.24% Rate floors are minimal (<10% of loans) Smaller Fixed Rate Loan Portfolio with Shorter Maturity Profile 4.29 4.23 4.16 Coupon Rate2 3.98 3.99 4.48
13 At 9/30/12. 1Reflects prepayment assumptions. 2Stated rate on instrument. 3Outlook as of November 13, 2012. 15-Year Agency Pass-Through$5.7B 57% 10-Year Agency Pass-Through$0.1B 1% CMO$4.3B 42% 3,204 1,965 1,319 954 700 1,576 1Y 2Y 3Y 4Y 5Y Greaterthan 5 Expected MBS Principal Cash Flows1,3($ in MM) MBS Securities Portfolio Total average MBS portfolio of $9.4B at 3Q12 • Duration of 2.7 years • Net unrealized pre-tax gain $323MM• Unamortized premium of about $105MM• Expect continued pace of prepayment $850MM-950MM for 4Q123 Highly Liquid, Short Duration MBS Securities Portfolio 2.86 2.84 2.92 2.94 2.95 Coupon Rate2 3.03 Growing Deposit Base: Provides Low Cost Funding 14 24% 26% 27 % 28% 30% 3 2% 33% 35 % 36% 36% 4 0% 43% Noninterest-bearing as a Percent of Total Deposits2 0.14 0.1 8 0.18 0 .25 0.28 0.3 1 0.33 0.3 4 0.34 0.3 5 0.38 0.4 0 Interest Costs on Total Deposits3 (%) 1Average balances at 9/30/12. 2Source: SNL Financial, at 9/30/12. 3Source: SNL Financial. 3Q12 interest incurred on deposits as a percent of average deposits. MMIA$20.5B 41% Customer CDs$5.9B 12% Other interest-bearing deposits$2.0B 4%Noninterest-bearing deposits$21.5B 43% Large Proportion of Noninterest-bearing Deposits1 45.1 47.8 48.3 48.7 49.9 49.4 50.0 0.33 0.29 0.26 0.25 0.24 3Q11 4Q11 1Q12 2Q12 3Q12 2Q12 3Q12 Sterling Deposit Rates Average Balances Period-end Deposit Costs Decline as Deposits Grow ($ in B)
Strong Credit Quality $ in millions. 1Watch list is generally consistent with regulatory defined Special Mention, Substandard and Doubtful (nonaccrual) loans. 2Source: SNL Financial 15 958 887 856 747 692 4,969 4,467 4,206 3,835 3,653 3Q11 4Q11 1Q12 2Q12 3Q12 Accruing Watch list Loans Nonperforming Loans Watch list1 & NPLs Continue to Trend Down 88% 90% 90% 91% 92% 3Q11 4Q11 1Q12 2Q12 3Q12 Accruing WatchList & Nonperforming Loans Remaining Portfolio Positive Credit Migration1 0 2 4 6 2008 2009 2010 2011 3Q12 Peer Range Peer Group Average CMA NCO Ratio: Lower Then Peer Average2 Consistent credit underwriting policies Positive credit migration reflected in loan yields Credit metrics within historical normal range Cross Sell Helping to Drive Fee Income… 16 Business Bank % withDeposit Acct.’s % withTreasury Mgmt. % with 3 or More Products1 ≈ 5,000 Lending Relationships ≈ 75% ≈ 55% ≈ 60% ≈ 10,000 Total Relationships ≈ 85% ≈ 50% ≈ 40% Wealth Management % withDeposit Acct.’s % withCreditProducts % with 3 or More Products1 ≈ 18,000 Total Relationships ≈ 65% ≈ 50% ≈ 10% Small Business ≈ 156,000 Total Relationships ≈ 90% ≈ 20% N/A Business Bank data as of August 2012; Wealth Management data as of September 2012; Retail data as of March 20121Products include: Cash Management, Deposit, Credit Facility, Commercial Card, Merchant Services, Comerica Securities, Trust Services, Consumer Loan, Foreign Exchange, Derivatives, Insurance, Private Banking. Focused on Collaboration between businesses: Set goals Incent behaviors Provide training Hold contests Give recognition Remove barriers Share success stories Hold accountablePersonal Banking≈ 747,000 Total Relationships ≈ 65% ≈ 5% N/A
17 … Including Treasury Management and Lending Fees 69 79 95 87 95 2008 2009 2010 2011 2012 Annualized Commercial Lending Fees ($ in MM) 229 228 208 208 216 2008 2009 2010 2011 2012 Annualized Service Charges on Deposit Accounts ($ in MM) Treasury Management CMA ExceedsNormative Standard2 Operations accuracy Online services Services that meet needs Solutions to meet needs Value delivered Innovative Products Credit Services Responsiveness Willingness to lend Competitive pricing Value delivered * 1Performed by an independent third party on behalf of Comerica. 2For Small Business and Middle Market Customers. * = Middle Market customers rank Comerica Best in Class. 2012 Customer Loyalty & Commitment Study1 * Disciplined Expense Management 18 11,4 44 11,3 50 11,2 87 11,2 09 10,8 92 10,8 16 10,7 00 10,7 82 10,1 86 9,33 0 9,00 1 9,39 7 9,00 8 $4,3 30 $4,4 71 $4,7 22 $4,6 92 $4,7 53 $4,9 01 $5,4 21 $5,7 81 $6,6 31 $6,3 50 $5,9 62 $6,4 92 $7,0 29 Employees Assets/Employee Historical Assets/ Employee $4,811 $5,115 $5,131 $5,214 $5,353 $5,492 $5,614 $5,618 $5,651 $5,861 $6,185 $7,029 HBAN SNV ZION RF BBT KEY FHN MTB FITB BOKF STI CMA Assets/ Employee Compared to Peers $ in thousands. At 9/30/12. Source: SNL Financial.
Continued Focus on Efficiency Improvements Goal as of November 13, 2012. Long-TermGoal: Below 60% 19 Revenue & efficiency improvements• Vendor consolidation• Selective outsourcing• Leverage technology• Selectively increase product pricing• Reallocate resources to faster growing areas Assisting in offsetting headwinds• Low rate environment• Pension• Healthcare• Regulatory Can drive future operating leverage• Capacity to grow 69% 68%59% 66% 69% 67% 72% 70% 2007 2008 2009 2010 2011 YTD2012 Restructuring 20 year average: 59% Efficiency Ratio Long-TermGoal: Below 60% 20 Capital Position and Shareholder Payout Remain Strong, Even Under Proposed Rules 1Source: Company 10-Q’s as of 9/30/12, except for FHN which was sourced from company reports. Excludes MTB, SNV and ZION as amounts were not available. Peer ratios may be estimates. Peer impact may be calculated using different assumptions and may not be comparable. Impact is estimated and subject to final rulemaking. Comerica may be affected by other changes due to Basel III. See Supplemental Financial Data slides for reconciliation of non-GAAP financial measures.2Excluding the third quarter restructuring charge total shareholder payout ratio was 89%. Basel III Capital Ratios – CMA and Peer Banks1 15% 21% 25% 26% 60% 76% 41% 81% 101% 1Q12 2Q12 3Q12 DividendsShare Repurchases Shareholder Payout Ratio 2 12.4% 10.4% 9.4% 9.0% 8.8% 8.7% 8.2% 8.0% 8.0% 13.0% 11.3% 10.4% 9.7% 10.3% 10.5% 10.7% 9.5% 9.8% BOKF KEY CMA FITB HBAN RF FHN BBT STI Basel III Tier 1 CommonBasel III ImpactBasel I Tier 1 Common+
• Highest Payout among peers• Strong capital base; Ratios among highest in peer group Active Capital Mgmt • Positive Trends• Improvement for eleven consecutive quarters• Weathered cycle well relative to peers Asset Quality • Positioned for rising rates; 200 bps increase in rates expected to result in 10% increase in net interest income2 Interest Rate Sensitivity • Positioned in faster growing markets andindustries• Cross sell helping to drive fee income Loan & Fee Income Growth • Lowest cost deposits and largest percentage of funding from DDA among peers• Holding new and renewed loan spreads Maintain Deposit & Loan Spreads • Continued decrease in expenses despite headwinds1Expense Control 21 Well Positioned for the Future As of 9/30/12. 1Decrease excludes restructuring charges. Headwinds include a full year of Sterling expenses, increased health care costs and pension expenses. 2Analysis based on non-parallel ramp in interest rates over 12 months; See 10Q filing with SEC for methodology. Appendix
Financial Results $ in millions, except per share data. 1Calculated using net income attributable to common shares. 3Q12 2Q12 3Q11 Diluted income per common share1 $0.61 $0.73 $0.51 Net interest income $427 $435 $423 Purchase loan accretion 15 18 27 Noninterest income 197 211 201 Provision for credit losses 22 19 35 Noninterest expenses 449 433 463 Restructuring expenses 25 8 33 Net income 117 144 98 Total loans (average) $43,597 $43,228 $40,098 Total deposits (average) 49,857 48,679 45,098 Tier 1 capital ratio 10.35% 10.38% 10.65% Average diluted shares (millions) 191 194 192 23 1,63 5 1,94 7 2,30 5 2,45 2 2,64 1 3Q11 4Q11 1Q12 2Q12 3Q12 488 545 614 635 691 3Q11 4Q11 1Q12 2Q12 3Q12 Loan Performance in Select Portfolios Average $ in millions. Includes Sterling Bancshares loans from July 28, 2011. Environmental Services Energy 1,34 6 1,51 7 1,64 3 1,65 9 1,83 1 3Q11 4Q11 1Q12 2Q12 3Q12 Tech and Life Sciences 24 535 563 576 622 615 3Q11 4Q11 1Q12 2Q12 3Q12 Entertainment
• Approximately 900 borrowers• Strategy: Full relationships with ancillary business• Comerica is agent for approximately 18%• Adhere to same credit underwriting standards as rest of loan book • Credit quality mirrors total portfolio September 30, 2012: $9.3 billion Period-end outstandings as of September 30, 2012. Shared National Credit (SNC): Facilities greater than $20 million shared by three or more federally supervised financial institutions which are reviewed by regulatory authorities at the agent bank level. Commercial Real Estate$0.7B 8% Corporate $2.8B 30% General$2.3B 25% National Dealer $0.4B 4% Energy$2.4B 26% Entertainment$0.2B 2% Tech. & Life Sciences$0.3B 3% Mortgage Banker $0.2B 2% 25 Focus:Shared National Credit Relationships = Total Middle Market (60%) 3Q12 compared to 2Q12 Nonperforming Assets Nonperforming Assets of $755MM, a $59MM decrease, included: Nonaccrual loans decreased $54MM Foreclosed Property decreased to $63MM Troubled Debt Restructurings (TDRs) of $328MM, included: $120MM Performing Restructured $27MM Reduced Rate $181MM Nonaccrual TDR September 30, 2012Nonaccrual Loans $665 millionBy Business Middle Market$206MM Corporate $10MM Commercial Real Estate$188MM Private Banking$70MM Small Business$100MMOther$91MM 26
Net Interest Income Down Slightly 3Q12 compared to 2Q12. 1At 9/30/12; Analysis based on non-parallel ramp in interest rates over 12 months; See 10K filing with SEC for methodology. 396 418 418 417 412 27 26 25 18 15 423 444 443 435 427 3.18 3.19 3.19 3.10 2.96 3Q11 4Q11 1Q12 2Q12 3Q12 Accretion NIM Net Interest Income ($MM) 27 Balance sheet remains well positioned for a rising rate environment1: 200 basis points annual rate increase equates to ≈$170MM expected increase in net interest income Approximately 85% of loans are floating of which 75% are LIBOR based 28 Factors Expected to DriveLong-Term ROA Goal 2011 ROA Long-Term ROA Goal1 0.69% >1.30%Managed Expense Growth of 1- 2% Fee Income Growth of 4 - 5% Loan Growth of 5 - 6% • Increase cross-sell penetration • Collaboration between businesses Focused growth:• Target markets • Allocation of resources to faster growing businesses • Relationship driven • Normalized rates not necessary to reach long-term goal Fed Funds Many factors at play, none of which move independently • Continued focus on operating leverage 1Goal as of November 13, 2012 Normal (≈3.5%) <2% <1%
Senior Unsecured/Long-Term Issuer Rating S&P Moody’s Fitch DBRS BB&T A- A2 A+ A (high) Comerica A- A3 A A M&T Bank A- A3 A- A (low) BOK Financial BBB+ A2 A A (low) KeyCorp BBB+ Baa1 A- BBB (high) SunTrust BBB Baa1 BBB+ A (low) Fifth Third BBB Baa1 A- A (low) Huntington BBB Baa1 BBB+ BBB First Horizon National Corp BBB- Baa2 BBB Regions Financial BBB- Ba3 BBB- BBB Zions Bancorporation BBB- Ba3 BBB- BBB (low) Synovus Financial Corp B B2 BB- Wells Fargo & Company A+ A2 AA- AA U.S. Bancorp A+ Aa3 AA- AA JP Morgan A A2 A+ A (high) PNC Financial Services Group A- A3 A+ A (high) Bank of America A- Baa2 A A Holding Company Debt Ratings As of 11/6/12; Source: SNL Financial; Debt Ratings are not a recommendation to buy, sell, or hold securities. 29 Pee r Ba nks Larg e Ba nks Supplemental Financial DataReconciliation of non-GAAP financial measures with financial measures defined by GAAP ($ in millions) The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations. The tangible common equity ratio removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets.The Corporation believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.1Tier 1 Capital and risk-weighted assets as defined and calculated in accordance with regulation. 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11Tier 1 capital1Less: Trust preferred securities $6,685-- $6,676-- $6,647-- $6,58225 $6,56049Tier 1 common capital2Risk-weighted assets1,2Tier 1 common capital ratio2 6,68564,56810.35% 6,67664,31210.38% 6,64764,74210.27% 6,55763,24410.37% 6,51161,59310.57% Total shareholders’ equityLess: GoodwillLess: Other intangible assets $7,08463525 $7,02863528 $6,98563530 $6,86863532 $6,95163535 Tangible common equity $6,424 $6,365 $6,320 $6,201 $6,281Total assetsLess: GoodwillLess: Other intangible assets $63,31463525 $62,65063528 $62,59363530 $61,00863532 $60,88863535Tangible assets $62,654 $61,987 $61,928 $60,341 $60,218Tangible common equity ratio 10.25% 10.27% 10.21% 10.27% 10.43% 30
Supplemental Financial DataTier 1 Common Equity under Basel III (estimated) ($ in billions) Basel III calculations reflect adjustments for the related elements as proposed by regulatory authorities. Basel III impact is estimated and subject to final rulemaking. The Corporation may be affected by other changes due to Basel III. The Corporation believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.1Tier 1 Capital and risk-weighted assets as defined and calculated in accordance with regulation.2Includes AFS mark-to-market and defined benefit pension liability.3The amount of regulatory capital and risk-weighted assets estimated under Basel III (as fully phased-in on January 1, 2019) is based upon the Corporation’s interpretation of the federal banking agencies’ notices of proposed rulemaking, which implement Basel III and the Standardized Approach. Tier 1 Common Equity under Basel III (estimated) 9/30/12Tier 1 common capital under Basel I1Adjustments from Basel I to Basel III:Cumulative other comprehensive income2 $6.7 (0.3)Tier 1 common equity anticipated under Basel III3 $6.4 Risk-weighted assets under Basel I1Adjustments from Basel I to Basel III:Unused commitments < 1 YearReal estate relatedOther $64.6 1.31.00.8Risk-weighted assets anticipated under Basel III3 $67.7 Tier 1 common equity to total risk-weighted assets anticipated under Basel III 9.4% 31