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| 8-K - 8-K - COMERICA INC /NEW/ | a2013baabform8-k.htm |
Comerica Incorporated BancAnalysts Association of Boston, Inc.November 7- 8, 2013 Lars AndersonVice Chairman, The Business Bank Karen ParkhillVice Chairman and CFO Safe Harbor Statement Any statements in this presentation that are not historical facts are forward-looking statements as defined in the Private Securities LitigationReform 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 similarexpressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, as they relate toComerica or its management, are intended to identify forward-looking statements. These forward-looking statements are predicated on thebeliefs and assumptions of Comerica's management based on information known to Comerica's management as of the date of this presentationand do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica'smanagement for future or past operations, products or services, and forecasts of Comerica's revenue, earnings or other measures of economicperformance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability. Suchstatements 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 differmaterially from those discussed. Factors that could cause or contribute to such differences are changes in general economic, political orindustry conditions; changes in monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; volatility anddisruptions 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; any future acquisitions or divestitures; the effects ofmore stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers; theimplementation of Comerica's strategies and business models; 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 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 ordeterminations; the effectiveness of methods of reducing risk exposures; the effects of terrorist activities and other hostilities; the effects ofcatastrophic events including, but not limited to, hurricanes, tornadoes, earthquakes, fires, droughts and floods; changes in accountingstandards and the critical nature of Comerica's accounting policies. Comerica cautions that the foregoing list of factors is not exclusive. Fordiscussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and ExchangeCommission. In particular, please refer to “Item 1A. Risk Factors” beginning on page 13 of Comerica's Annual Report on Form 10-K for the yearended December 31, 2012 and "Item 1A. Risk Factors" beginning on page 68 of the Corporation's Quarterly Report on Form 10-Q for thequarter ended June 30, 2013. Forward-looking statements speak only as of the date they are made. Comerica does not undertake to updateforward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements aremade. For any forward-looking statements made in this presentation or in any documents, Comerica claims the protection of the safe harbor forforward-looking statements contained in the Private Securities Litigation Reform Act of 1995. 2
The Business Bank: A Brief Overview 3 3Q13 Loan Balances 3Q13 Deposit BalancesFinance/ Other$0.5B1% Retail Bank$21.3B 41% WealthManagement$3.8B7% Business Bank$26.3B51% At 9/30/13 ● Average balances ● Right charts: $ in billions Wealth Management$4.6B11% Business Bank$34.2B77% Retail Bank$5.3B12% Business Bank Loan GrowthCommitments Increased 5% from 3Q12 Business Bank Deposit GrowthReflects High Level of Customer Liquidity 25.1 26.1 25.6 26.0 26.3 3Q12 4Q12 1Q13 2Q13 3Q13 +5% 33.8 34.3 34.7 34.9 34.2 3Q12 4Q12 1Q13 2Q13 3Q13 +1% +3% Diverse Geography & Industry ExpertisePositioned For Long-Term Growth 4 Business Bank Loan Balances Business Bank Deposit Balances OtherMarkets$5.2B20% California$10.2B38% Texas$4.6B18% Michigan$6.3B24% 3Q13 average balances California$11.5B33% Texas$7.5B22% Michigan$9.1B27% Other Markets$6.1B18% Business Bank Diverse Loan Portfolio General Middle Market$13.2B 39%Entertainment$0.6B 2% Energy$2.9B 8% Environmental Services$0.8B 2% National Dealer$4.9B 14% Tech. & Life Sciences$2.0B 6% Corporate Banking$4.4B 13% Mortgage Banker$1.6B 5% Commercial Real Estate$3.8B 11% = Total Middle Market - 71%
4.8% 3.5% 2.2% Texas California Michigan 5 Positioned in Larger, Faster Growing Markets State GDP Growth 2012 vs. 20112 - Ranking Based on 2012 GDP Dollars US Average:2.5% 0.98 1.24 1.34 1.38 1.49 1.55 2.16 2.71 3.86 8.34 San Jose Dallas San Diego San Antonio Phoenix Philadelpia Houston Chicago Los Angeles New York Located in 7 of the Top 10 Most Populous Cities1 1Chart: Population in millions. Source: US Census Bureau, released in 2013 ● 2Source: US Bureau of Economic Analysis. 2012 advance statistics, released 6/6/13 Ne York Los ngeles hicago ouston Philadelphia Phoenix San ntonio San iego allas San Jose #2 #1 #13 Established Texas presence: 1988 Moved headquarters to Dallas: 2007 Largest U.S. commercial bank with corporate headquarters in Texas Acquisition of Sterling completed July 2011 Increased deposit share in Dallas-Fort Worth and Austin from 20121 Comerica Texas Economic Activity Index2 up 44% from cycle low 6 At 9/30/13 ● Charts: $ in billions. Average balances ● 1Source: FDIC June 2013 ● 2August 2013 economic activity index, published October 2013 Substantial Growth Opportunities in Texas Business Bank TX Loans Business Bank TX Noninterest Income 14.2 15.1 15.4 19.2 19.3 3Q12 4Q12 1Q13 2Q13 3Q13 +36% 5.6 5.9 6.1 6.2 6.1 1.6 1.5 1.4 1.4 1.3 7.3 7.4 7.6 7.7 7.5 3Q12 4Q12 1Q13 2Q13 3Q13 C&I CRE All Other +8%
$22.5 $23.5 $22.8 $23.6 $22.5 $46.8 $47.6 $47.9 $48.4 $48.9 35% 45% 55% 65% 3Q12 4Q12 1Q13 2Q13 3Q13 Outstandings Commitments Utilization $ in billions ● 1Utilization of commercial commitments as a percentage of total commercial commitments at period end ●2Average balances. Source: Automotive News ● 3Average balances. MBA Origination Volumes $ in billions. Source: Mortgage Bankers Association Mortgage Finance Forecast as of 10/29/13 7 Business Bank Commitments Continue to Grow Commitments and Outstandings1 +5% 1.9 1.7 1.3 1.5 1.9 2.3 2.3 2.5 2.8 3.1 2.9 3.8 3.6 3.1 3.4 3.8 4.3 4.3 4.6 4.9 5.1 4.9 54 54 50 52 54 58 58 59 60 61 63 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 Floor PlanIndustry: Inventory Days Supply (Period End)Industry: Inventory Days Supply (Avg) National Dealer Services23Q Trend In-Line with Seasonality Mortgage Banker Finance33Q Trend Reflects Falling Refinance Volumes 0.6 0.6 1.0 1.5 1.5 1.5 2.0 2.1 1.7 1.8 1.6 200 300 400 500 600 700 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 MBA MortgageOrigination Volumes13.1 13.2 13.4 13.5 13.214.1 14.6 14.1 13.8 14.0 3Q12 4Q12 1Q13 2Q13 3Q13 Loans Deposits General Middle Market3Q Deposits Increase, Line Utilization Declines 58 Disciplined Growth Results in Superior Credit Performance 8 NCO Ratio: Lower Than Peer Average1 0 1 2 3 4 5 6 2008 2009 2010 2011 2012 1Q13 2Q13 3Q13 Peer Range Peer Average CMA 1Source: SNL Financial ● 2$ in millions. Watch list is generally consistent with regulatory defined Special Mention, Substandard and Doubtful (nonaccrual) loans 0.01 0.09 0.18 0.28 0 .36 0.40 0 .46 0.47 0.4 9 0.49 0.5 3 0.60 BOK F ZIO N CMA KE Y MTB FHN ST I SNV FITB BB T HBA N RF 3Q13 NCO Ratio1 Consistent credit underwriting policies Positive credit migration reflected in loan yields Robust credit portfolio analytics assist in navigating the cycles 2,724 2,182 2,226 2,061 1,912 929 905 884 825 765 3,653 3,088 3,110 2,886 2,676 3Q12 4Q12 1Q13 2Q13 3Q13 Business Bank Retail Bank + WMWatch List Continues to Trend Down2
Highly Experienced TeamA Competitive Advantage Deep Local Knowledge 9 Michigan Market President22 years Texas Market President29 years California Market President142 years Industry Expertise - Average Years Bus. Line Mgr. – 27 Group Mgr. – 15 Relationship Mgr. –8 Technology & Life Sciences Bus. Line Mgr. – 32 Group Mgr. – 28 Relationship Mgr. – 8 Bus. Line Mgr. – 34 Group Mgr. – 13 Relationship Mgr. – 4 Mortgage Banker Finance Bus. Line Mgr. – 40 Group Mgr. – 28 Relationship Mgr. – 9 Energy National Dealer Services 1.8 2.0 2012 YTD 2013 2.6 2.9 2012 YTD 2013 1.8 1.7 2012 YTD 2013 4.3 5.0 2012 YTD 2013 Average Loans Average Loans Average Loans Average Loans Charts: $ in billions ● 142 years with Comerica, 24 years in the California market -3%+13% +15% +17% Incenting Balanced PerformanceAligned to Strategy 10 Relationship Manager ScorecardQuarterly Benchmarking Sales• Pipeline• Closed Commitments & Deposits• Fee Income• Cross-sell metrics• Customer calls Portfolio (loans, deposits, customers) Profitability • Net income• ROE• Loan Spreads Asset Quality Accountability
57 59 59 61 62 3Q12 4Q12 1Q13 2Q13 3Q13 Driving Efficiency in the Business BankProduces Operating Leverage 11 Allocating resources to faster growing segments to ensure there is capacity to support expansion Leveraging technology to increase efficiency of Relationship Managers (RMs) Number of RMs down 3%, while commitments are up 5% from 3Q12 RM quarterly production, or closed commitments, up 11% from 3Q12 At 9/30/13 ● Top chart: $ in thousands ● Bottom chart: $ in millions Noninterest Income Per RM 195 204 199 218 238 3Q12 4Q12 1Q13 2Q13 3Q13 +22% +8% Loans + Deposits Managed Per Employee Middle Market StrengthLong-Tenured, Deep Relationships Company with revenues generally between $20-$500MM Annual Fee Income ≈$40,000 Loan Outstandings ≈$5MM Commitments ≈$10MM Deposits ≈$1MM >50% of Middle Market customers have been with Comerica for 10+ years 12 36 38 41 42 39 3Q12 4Q12 1Q13 2Q13 3Q13 General Middle Market Average Loans General Middle MarketNoninterest Income 13.1 13.2 13.4 13.5 13.2 3Q12 4Q12 1Q13 2Q13 3Q13 Top chart: $ in billions ● Bottom chart: $ in millions ● 1Comerica ranking in MI, CA and TX among top five competitors for companies with $20-500 million in revenues Typical Middle Market Relationship Recognized for ExcellenceGreenwich Associates first half 2013 survey of Middle Market Banking customers1: Overall Customer SatisfactionEase of doing businessCapability of senior relationship managerReputation as a leader for Investment Banking, Credit & International Services Overall satisfaction of branch performance +9% +1% +3%
Wide Array of Products and ServicesDrive Cross-sell Success 13 Noninterest Income At 9/30/13 ● Chart: $ in millions 76 79 77 80 89 197 204 200 208 214 3Q12 4Q12 1Q13 2Q13 3Q13 Business Bank Business Bank Relationships Deposit Acct.’s Treasury Mgmt. 3 or MoreProducts ≈ 5,000 Lending ≈ 75% ≈ 60% ≈ 65% ≈ 9,000 Total ≈ 85% ≈ 50% ≈ 45% Educate, train, incent teamwork Building deep relationships Business Bank products:• Treasury Management• Commercial Card• Merchant Services• Letters of Credit• Foreign Exchange• Insurance Wealth Management products:• Private Banking • Asset Management• Securities/ Capital Markets • 401K/ Trust Advisory Retail Bank products:• On the Job Banking Comerica Collaborates +17% Growing Fee IncomeAs Payments Migrate to Electronic Means 14 Growing Card RevenueBusiness to Business (B2B) Payment Volume by Type1 1In 2012. Source: Phoenix Hecht Treasury Management Monitor ● 2Source: The Nilson Report July 2013 ●Right Chart: $ in millions Check65% ACH20% Wire Transfer8% Credit/ Debit Card7% 9.5 9.8 10.3 11.3 11.5 3Q12 4Q12 1Q13 2Q13 3Q13 Commercial CardGovernment Card +21% Comerica Commercial Card Rankings The Nilson Report 2012 rankings2: Prepaid commercial cardsFleet cardsOverall commercial card issuersPurchasing cards Corporate cards
Collaboration with Wealth Management Business Owner Advisory Service Integrated solutions to meet business and personal goals Business owner planning substantially expands the scope of more traditional “Financial Planning” to include: Tax Strategy Planning Wealth Transfer Planning Charitable Planning Business Planning Wealth Planning Family Business Continuation Addressing Family Issues Business Succession Planning Successes1 Over $500MM Loans, Deposits & AUM 350 or About 90% of Relationship Managers made referrals >900 Referrals made >25% Close rate 15 Business Owner Advisory Services Business Bank Wealth Management 1Success since inception of program in 2012 Third Quarter 2013 ResultsKey Performance Drivers 16 $ in millions, except per share data $0.61 $0.68 $0.70 $0.76 $0.78 3Q12 4Q12 1Q13 2Q13 3Q13 Diluted EPSEarnings Per Common Share +28% +3% 22 16 16 13 8 3Q12 4Q12 1Q13 2Q13 3Q13 Provision for Credit Losses 427 424 416 414 412 197 204 200 208 214 624 628 616 622 626 3Q12 4Q12 1Q13 2Q13 3Q13 Net Interest Income Noninterest IncomeTotal Revenue 424 425 416 416 417 449 427 416 416 417 3Q12 4Q12 1Q13 2Q13 3Q13 RestructuringNoninterest Expense
At 9/30/13 ● 1Analysis based on non-parallel gradual increase in interest rates over 12 months; For methodology see the Company’s Form 10Q for the quarter ended 9/30/13, as filed with the SEC ● 2Source: SNL Financial. As of 6/30/13 ●3Source: SNL Financial. Average balances Faster Loan Re-pricing/Maturity Date2 0% 20% 40% 60% 80% 100% CMA FHN KEY RF FITB MTB HBAN STI BOKF ZION SNV BBT Less Than 3 Months Greater Than 3 Months 17 Floating rate loans: ≈85% (primarily 30-day LIBOR) Rate floors: ≈5% Securities: ≈15% of earning assets Relatively large deposit base Balance sheet is not currently hedged with interest rate swaps Interest Rate Sensitivity1Gradual 200 bps Rate Rise Interest Rate Sensitivity Positioned for Rising Rates 172 178 181 187 210 3Q12 4Q12 1Q13 2Q13 3Q13 Noninterest-Bearing as a Percentof Total Deposits3 25.5 % 27.1 % 27.2 % 28.8 % 30.3 % 32.0 % 32.8 % 36.3 % 37.6 % 37.6 % 40.7 % 45.2 % SNV BBT FHN HBAN STI FITB RF MTB KEY BOKF ZION CMA Comerica is Asset Sensitive Disciplined Expense ManagementLarge Enough to Benefit From Economies of Scale 18 $4,738 $4,856 $5,376 $5,577 $5,873 $6,055 $6,204 $6,504 $7,252 HBAN RF BBT FHN BOKF KEY FITB STI CMA At 9/30/13 ● Right chart: $ in thousands. Source: SNL Financial. Excludes MTB, SNV and ZION as amounts were not reported as of 11/4/13 Assets Per Employee Compared to Peers Efficiency improvements• Allocating resources to faster growing markets and business• Leveraging technology• Vendor consolidation• Selective outsourcing Assisting in offsetting headwinds• Low rate environment• Pension• Healthcare• Regulatory Continued Tight Expense Control
Efficiency Ratio and ROA Goals 19 Goal as of 11/6/13 Efficiency Ratio Return on Average Assets (ROA) 59% 66% 69% 67% 72% 69% 67% 2007 2008 2009 2010 2011 2012 YTD2013 20 year average: 59% 1.17% 0.33% 0.03% 0.50% 0.69% 0.83% 0.89% 2007 2008 2009 2010 2011 2012 YTD2013 20 year average: 1.18% Long-TermGoal: Above 1.30% Long-TermGoal: Below 60% 47% 79% 77% 72% 70% 19% 21% 24% 22% 21% FY11 FY12 1Q13 2Q13 3Q13 Shares Repurchased Dividend 20 Continued Strong Capital Position 1Outlook as of 11/6/13 2013 Capital Plan target1:• Up to $288MM share repurchase over four quarters (2Q13 through 1Q14)• 2Q13 1.9MM shares repurchased ($72MM)• 3Q13 1.7MM shares repurchased ($72MM) Benefit from regional bank size in new capital rules• Option to opt out of AOCI• Less onerous RWA calculation through Standardized Approach• Possible lower D-SIB buffer• Not subject to Supplementary Leverage Ratio Average Shareholder Payout77% of Earnings from 1997-2007Approach Capital Management From a Position of Strength
21 As of 9/30/13 ● 1Analysis based on non-parallel gradual increase in interest rates over 12 months; For methodology see the Company’s Form 10Q for the quarter ended 9/30/13, as filed with the SEC Well Positioned for the Future Loans • Positioned in faster growing markets and industries • Maintain pricing & structure discipline Expenses • Continued tight expense control • Lowest cost deposits & largest percentage DDA funding vs. peers Asset Quality • Strong credit culture leads to solid credit metrics • Weathered cycle well relative to peers Capital Manager • One of the highest shareholder payouts in peer group • Strong capital base; Well positioned for Basel III capital rules Rising Rates • Well positioned for rising rates • 200 bps increase in rates expected to result in >10% increase in net interest income1 Appendix
Financial Summary 23 3Q13 2Q13 3Q12 Diluted income per common share1 $0.78 $0.76 $0.61 Net interest income $412 $414 $427 Loan accretion 8 7 15 Provision for credit losses 8 13 22 Noninterest income 214 208 197 Noninterest expenses 417 416 449 Restructuring expenses -- -- 25 Net income 147 143 117 Total average loans $44,094 $44,893 $43,597 Total average deposits 51,865 51,448 49,845 Tier 1 common capital ratio3 10.74%2 10.43% 10.37% Basel III Tier 1 common capital ratio3,4 10.4% 10.1% 10.0% Average diluted shares (millions) 187 187 191 $ in millions, except per share data ● 1Calculated using net income attributable to common shares ● 2Estimated ● 3See Supplemental Financial Data slides for a reconciliation of non-GAAP financial measures ● 4Estimated ratios based on the standardized approach in the final rule and excluding most elements of accumulated other comprehensive income (AOCI) Loans by Business and Market 24 Middle Market: Serving companies with revenues generally between $20-$500MM Corporate Banking: Serving companies (and their U.S. based subsidiaries) with revenues generally over $500MM Small Business: Serving companies with revenues generally under $20MM Average $ in billions By Line of Business 3Q13 2Q13 3Q12 Middle MarketGeneralEnergyNational Dealer ServicesEntertainmentTech. & Life SciencesEnvironmental Services $13.22.94.90.62.00.8 $13.53.05.10.61.90.8 $13.12.64.30.61.80.7 Total Middle Market $24.4 $24.9 $23.1 Corporate BankingUS BankingInternational 2.71.7 2.71.7 3.01.8 Mortgage Banker Finance 1.6 1.8 2.0 Commercial Real Estate 3.8 3.8 3.9 BUSINESS BANK $34.2 $34.9 $33.8 Small Business 3.6 3.6 3.5 Retail Banking 1.7 1.7 1.8 RETAIL BANK $5.3 $5.3 $5.3 Private Banking 4.6 4.7 4.5 WEALTH MANAGEMENT $4.6 $4.7 $4.5 TOTAL $44.1 $44.9 $43.6 By Market 3Q13 2Q13 3Q12 Michigan $13.3 $13.6 $13.5 California 14.0 13.9 12.9 Texas 9.9 10.2 9.6 Other Markets 6.9 7.2 7.6 TOTAL $44.1 $44.9 $43.6
Deposits by Business and Market 25 Middle Market: Serving companies with revenues generally between $20-$500MM Corporate Banking: Serving companies (and their U.S. based subsidiaries) with revenues generally over $500MM Small Business: Serving companies with revenues generally under $20MM Average $ in billions By Line of Business 3Q13 2Q13 3Q12 Middle MarketGeneralEnergyNational Dealer ServicesEntertainmentTech. & Life SciencesEnvironmental Services $14.00.50.20.15.10.2 $13.80.50.20.15.00.2 $14.10.50.20.15.20.1 Total Middle Market $20.1 $19.8 $20.2 Corporate BankingUS BankingInternational 2.41.8 2.61.6 1.91.4 Mortgage Banker Finance 0.6 0.7 0.5 Commercial Real Estate 1.4 1.3 1.1 BUSINESS BANK $26.3 $26.0 $25.1 Small Business 2.7 2.7 2.6 Retail Banking 18.6 18.5 18.1 RETAIL BANK $21.3 $21.2 $20.7 Private Banking 3.8 3.7 3.7 WEALTH MANAGEMENT $3.8 $3.7 $3.7 Finance/ Other 0.5 0.5 0.4 TOTAL $51.9 $51.4 $49.9 By Market 3Q13 2Q13 3Q12 Michigan $20.5 $20.1 $19.6 California 14.6 14.7 15.0 Texas 10.3 10.2 9.9 Other Markets 6.0 5.9 5.0 Finance/ Other 0.5 0.5 0.4 TOTAL $51.9 $51.4 $49.9 Mortgage Banker Finance 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 Average Deposits 198 2 80 319 254 360 481 52 3 551 6 37 513 372 399 4 41 454 49 7 62 5 645 665 643 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 563 6 57 504 56 4 425 707 943 1 ,101 566 61 4 923 1,53 5 1,48 3 1,50 7 1,99 6 2,09 4 1,73 7 1,81 5 1,60 5 1Q0 9 2Q0 9 3Q0 9 4Q0 9 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 Average Loans Charts: $ in millions 26
National Dealer Services Line of Business 27 Toyota/Lexus18% Honda/Acura 15% Ford 9% GM 10% Chrysler 8% Mercedes 3%Nissan/ Infiniti 8% Other European 9% Other Asian 10% Other210% 65+ years of Floor Plan lending, with over 20 years on a national basis Top tier strategy Majority are “Mega Dealer” (five or more dealerships in group) Excellent credit quality Robust monitoring of company inventory and performance Geographic DispersionCalifornia 61% Texas 8%Michigan 18% Other 12% 3.5 3.5 3.5 4.3 4.9 5.1 4.9 4.92009 2010 2011 2012 1Q13 2Q13 3Q13 3Q13 Loan Balances ($ in Billions) Average Period End 1Franchise distribution based on 9/30/13 period-end (PE) outstandings ● 2Other includes obligations where a primary franchise is indeterminable (rental car and leasing companies, heavy truck, recreational vehicles, and non-floor plan loans). Franchise Distribution1 Natural Gas Oil Mixed Midstream13% Service15% Energy 28 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 2,85 1 3,00 2 2,95 1 2,89 5 1Q0 9 2Q0 9 3Q0 9 4Q0 9 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 Average Loans Average Deposits 30+ years’ experience through the cycles Focus on middle market companies Excellent credit quality Deep relationships with significant ancillary noncredit products Exploration & Production 72% Charts: $ in millions ● 1Based on 3Q13 period-end loans outstanding 67 71 84 107 152 233 430 444 50 1 493 492 865 686 567 533 512 411 48 8 529 1Q0 9 2Q0 9 3Q0 9 4Q0 9 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 Diverse Customer Base1
Technology and Life Sciences 20+ year history Products and services tailored to meet the needs of emerging technology and life science companies throughout their lifecycle Strong relationships with top-tier investors National business headquartered in Palo Alto, CA, operating from 13 offices in the U.S. and Toronto Top notch relationship managers with extensive industry expertise Average Loans Average Deposits 1,71 6 1,52 1 1,37 1 1,28 0 1,09 8 1,14 7 1,12 0 1,16 2 1,19 3 1,21 7 1,34 6 1,51 7 1,64 3 1,65 9 1,83 1 1,88 6 2,00 8 1,91 3 2,02 4 1Q0 9 2Q0 9 3Q0 9 4Q0 9 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 2,64 9 2,72 7 2,85 6 3,19 8 3,26 9 3,42 4 3,34 5 3,49 8 3,73 0 4,11 6 4,23 1 4,44 0 4,70 3 5,06 5 5,20 8 5,16 6 5,02 6 4,99 6 5,05 1 1Q0 9 2Q0 9 3Q0 9 4Q0 9 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 At 9/30/13 ● Charts: $ in millions 29 30 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 3,72 7 3,69 3 3,79 1 3,75 2 1Q0 9 2Q0 9 3Q0 9 4Q0 9 1Q1 0 2Q1 0 3Q1 0 4Q1 0 1Q1 1 2Q1 1 3Q1 1 4Q1 1 1Q1 2 2Q1 2 3Q1 2 4Q1 2 1Q1 3 2Q1 3 3Q1 3 Commercial MortgagesReal Estate ConstructionCommercial & Other 160+ years experience with focus on well-established developers, primarily in our footprint Provides construction and mini-perm mortgage financing Real Estate Construction average loans up for the past 4 quarters 4,248 4,345 4,655 4,703 4,817 3Q12 4Q12 1Q13 2Q13 3Q13 +13% At 9/30/13 ● Charts: $ in millions ● 1Includes CRE line of business loans not secured by real estate ● 2Based on period-end commitments CRE Line of BusinessAverage Loans CRE Commitments2 Commercial Real Estate Line of Business 1
Shared National Credit Relationships 31 Approximately 865 borrowers Strategy: Pursue 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 Commercial Real Estate$0.5B 6% Corporate $2.5B 27% General$2.1B 23%National Dealer $0.4B 4% Energy$2.6B 28% Entertainment$0.3B 3% Tech. & Life Sciences$0.3B 3% Environmental Services $0.3B 4% Mortgage Banker$0.2B 2% September 30, 2013: $9.2B Period-end outstandings as of 9/30/13 ● 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. = Total Middle Market (65%) Charts: $ in millions ● 3Q13 compared to 2Q13 Nonperforming Assets of $478MM, a $22MM decrease, included:• Nonaccrual loans decreased $12MM • Foreclosed Property decreased to $19MM Troubled Debt Restructurings (TDRs) of $205MM, included:• $60MM Performing Restructured• $22MM Reduced Rate • $123MM Nonaccrual TDR September 30, 2013Nonaccrual Loans $437MMBy Business Middle Market$111MM Corporate $2MM Commercial Real Estate$100MM Private Banking$44MM Small Business$85MM Other$95MM 32 Nonperforming Assets Nonperforming Assets 755 595 555 500 4781.71 1.29 1.23 1.10 1.08 3Q12 4Q12 1Q13 2Q13 3Q13 Nonperforming Assets as aPercentage of Total Loans + ORE
Growing Average Noninterest-Bearing Deposits Government Card Programs 33 #1 prepaid card issuer1 in US Service 32 state and local government benefit programs Service US Treasury DirectExpress Program:• Exclusive provider of prepaid debit cards with a contract through January 2015• Over 4.5 million cards registered• Phasing out checks2As of 5/1/11, new benefit recipientsAs of 3/1/13, current check recipients• 95% of Direct Express card holders report they are satisfied3• Nearly 8MM monthly benefit checks eliminated, resulting in significant taxpayer savings4185 290 532 650 720 948 1,189 2007 2008 2009 2010 2011 2012 YTD2013 US Treasury ProgramState Card Programs At 9/30/13 ● Chart: $ in millions ● 1Source: the Nilson Report July 2013 ● 2Final rule announced 12/22/10 ● 3Based on a June 2012 survey. Source: U.S. Department of the Treasury ● 4Checks eliminated since December 2010. Source: U.S. Department of the Treasury 34 2012 Long-Term Goal1 Efficiency Ratio:69% Efficiency Ratio:<60% Expense Growth of 0 - 2% Fee Income Growth of 2 - 4% Loan Growth of 3 - 5% • 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 • Continued focus on operating leverage 1Goal as of 11/6/13 ≈1% ≈2% Normal (≈3.5%) Fed Funds Factors Expected to Drive Long-Term Efficiency Ratio Goal
Senior Unsecured/Long-Term Issuer Rating S&P Moody’s Fitch DBRS BB&T A- A2 A+ A (high) Comerica A- A3 A A BOK Financial A- A2 A A (low) M&T Bank A- A3 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 A- BBB First Horizon National Corp BBB- Baa3 BBB- Regions Financial BBB- Ba1 BBB- BBB Zions Bancorporation BBB- Ba1 BBB- BBB (low) Synovus Financial Corp BB- B1 BB Wells Fargo & Company A+ A2 AA- AA U.S. Bancorp A+ A1 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 35 Pee r Ba nks Larg e Ba nks As of 11/4/13 ● Source: SNL Financial ● Debt Ratings are not a recommendation to buy, sell, or hold securities Supplemental Financial DataReconciliation of non-GAAP financial measures with financial measures defined by GAAP ($ in millions) 36 9/30/13 6/30/13 3/31/13 12/31/12 9/30/12 Tier 1 and Tier 1 common capital1,2Risk-weighted assets1,2Tier 1 and Tier 1 common capital ratio2 6,86363,91710.74% 6,80065,22010.43% 6,74865,09910.37% 6,70566,11510.14% 6,68564,48610.37% Total shareholders’ equityLess: GoodwillLess: Other intangible assets $6,96963518 $6,91163520 $6,98863521 $6,94263522 $7,08463525 Tangible common equity $6,316 $6,256 $6,332 $6,285 $6,424Total assetsLess: GoodwillLess: Other intangible assets $64,67063518 $62,94763520 $64,88563521 $65,06963522 $63,00063525Tangible assets $64,017 $62,292 $64,229 $64,412 $62,340Tangible common equity ratio 9.87% 10.04% 9.86% 9.76% 10.30% The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations. The tangible common equity ratio removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets.The Corporation believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.1Tier 1 Capital and risk-weighted assets as defined and calculated in accordance with regulation.2September 30, 2013 Tier 1 Capital and Risk-Weighted assets are estimated.
Supplemental Financial DataTier 1 Common Equity under Basel III ($ in millions) 37 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 Basel III Tier 1 common capital ratio further adjusts Tier 1 common capital and risk-weighted assets to account for the final rule approved by U.S. banking regulators in July 2013 for the U.S. adoption of the Basel III regulatory capital framework. The final Basel III capital rules are effective January 1, 2015 for banking organizations subject to the standardized approach. 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 in accordance with regulation.2September 30, 2013 Tier 1 Capital and Risk-Weighted assets are estimated.3Estimated ratios based on the standardized approach in the final rule for the U.S. adoption of the Basel III regulatory capital framework and excluding most elements of AOCI. Basel III Tier 1 Common Capital Ratio 9/30/13 6/30/13 3/31/13 12/31/12 9/30/12 Tier 1 common capital2Basel III adjustments3 $6,863-- $6,800-- $6,748(1) $6,705(39) $6,685(17) Basel III Tier 1 common capital3 $6,863 $6,800 $6,747 $6,666 $6,668 Risk-weighted assets1,2Basel III adjustments3 $63,9172,295 $65,2202,091 $65,0991,996 $66,1151,854 $64,4862,313Basel III risk-weighted assets3 $66,212 $67,311 $67,095 $67,969 $66,799 Tier 1 common capital ratio2Basel III Tier 1 common capital ratio3 10.7%10.4% 10.4%10.1% 10.4%10.1% 10.1%9.8% 10.4%10.0%