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| 8-K - 8-K - COMERICA INC /NEW/ | a2013goldmansachs8-k.htm |
Comerica Incorporated Goldman Sachs Financial Services ConferenceDecember 10 - 11, 2013 Ralph W. Babb, Jr.Chairman and Chief Executive Officer 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
Comerica: A Brief Overview 21st largest U.S. financial holding company1 $65 billion in assets Strong presence in Texas, California, and Michigan Three primary lines of business: Business Bank, Retail Bank, and Wealth Management Founded 164 years ago Strong capital position• Estimated Basel III Tier 1 common capital ratio3: 10.4% 3 Business Line Average Loan Balances2 At 9/30/13 ● 1Source: SNL Financial ● 23Q13 average balances ● 3See Supplemental Financial Data slides for reconciliation of non-GAAP financial measures. Estimated ratios based on the standardized approach in the final rule and excluding most elements of accumulated other comprehensive income (AOCI) Wealth Management$4.6B11% Business Bank$34.2B77% Retail Bank$5.3B12% California$14.0B32% Texas$9.9B22% Michigan$13.3B30% Other Markets$6.9B16% GeographicAverage Loan Balances2 4.8% 3.5% 2.2% Texas California Michigan 4 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 Angeles Chicago Houston Philadelphia Phoenix San Antonio San Diego Dallas San Jose #2 #1 #13
Focus on Growth in California and TexasMaintain Leadership Position in Michigan 5 7.7 9.6 10.1 2011 2012 YTD 2013 Average Loan Balances 7.8 10.0 10.1 2011 2012 YTD 2013 Average Deposit Balances 11.8 12.7 13.8 2011 2012 YTD 2013 Average Loan Balances 12.7 14.6 14.5 2011 2012 YTD 2013 Average Deposit Balances 13.9 13.6 13.5 2011 2012 YTD 2013 Average Loan Balances 18.5 19.6 20.3 2011 2012 YTD 2013 Average Deposit Balances +9% +8% +5% -2% Growth percentage is shown as the compound annual growth rate +17% +16% Fourth Quarter Loan UpdateSoft Economy, Customer Cautiousness & Continued Discipline 6 $ in billions● 4Q13 average balance through 11/30/13. These results are preliminary and subject to change ● 1Utilization of commercial commitments as a percentage of total commercial commitments at period end ● 2MBA Origination Volumes $ in billions - Source: Mortgage Banker Association Mortgage Finance Forecast as of 11/26/13 ● 3Inventory days on hand 4Q13 balance as of 10/31/13. Source: Automotive News Mortgage Banker Finance2Trend Reflects Falling Refinance Volumes 2.0 2.1 1.7 1.8 1.6 1.1 200 300 400 500 600 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 thru11/30 MBA Mortgage Origination Volumes Quarter to Date Loan TrendsAverage Loans Stable with 3Q National Dealer normal season rebound Mortgage Banker decline continued – in line with industry volume Commitments and utilization rate stable Continued pressure on yield from low rate environment and portfolio mix shift Positive trend with period end balances higher than average balances 23.8 24.8 24.2 24.9 23.5 23.6 49.4 50.3 50.6 51.2 51.8 52.0 35% 45% 55% 65% 3Q12 4Q12 1Q13 2Q13 3Q13 11/30/13 Outstandings Commitments Utilization 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 3.1 3.8 3.6 3.1 3.4 3.8 4.3 4.3 4.6 4.9 5.1 4.9 5.1 54 54 50 52 54 58 58 59 60 61 63 77 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13thru11/30Floor PlanIndustry: Inventory Days Supply (Period End) National Dealer Services34Q Rebound in Line With Seasonality
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 ● 3Source: SNL Financial. Average balances Faster Loan Re-pricing/Maturity Date2 0% 20% 40% 60% 80% 100% CMA FHN KE Y RF MTB FITB HBA N STI BOK F ZIO N SNV BBT Less Than 3 Months Greater Than 3 Months 7 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 26% 27% 27% 2 9% 30% 32 % 33% 3 6% 38% 38% 4 1% 4 5% SNV BBT FHN HBA N STI FITB R F MTB KEY BOK F ZIO N CMA Comerica is Asset Sensitive Superior Credit Performance Reflection of Disciplined Growth 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 At 9/30/13 ● 1Source: SNL Financial ● 2Quarterly allowance for loan losses as divided by the last twelve months (LTM) of net loan charge-offs 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 Credit metrics at or below historical normal levels Consistent credit underwriting policies Positive credit migration reflected in loan yields Robust credit portfolio analytics assist in navigating the cycles 335% 370% 414% 507% 623% 3Q12 4Q12 1Q13 2Q13 3Q13 Allowance Coverage Ratio for LTM of Net Loan Charge-offs2 Strong Credit Culture
Emphasis on Cross-sell of Products and ServicesShould Increase Noninterest Income 9 Noninterest Income At 9/30/13 ● Charts: $ in millions ● 1Customer-driven fee income includes service charges on deposit accounts, fiduciary income, commercial lending fees, letter of credit fees, card fees, foreign exchange income, brokerage fees and customer-driven components of other noninterest income ● 2Source: The Nilson Report July 2013 Growing Card Revenue 184 191 185 191 195 13 13 15 17 19 197 204 200 208 214 3Q12 4Q12 1Q13 2Q13 3Q13 Customer-Driven Noncustomer-Driven1 +9% 9.5 9.8 10.3 11.3 11.5 3Q12 4Q12 1Q13 2Q13 3Q13 Commercial Card Government Card +21% Comerica Commercial Card Rankings The Nilson Report 2012 rankings2: Prepaid commercial cardsFleet cardsOverall commercial card issuersPurchasing cards Corporate cards 424 425 416 416 417 449 427 416 416 417 3Q12 4Q12 1Q13 2Q13 3Q13 Restructuring Disciplined Expense ManagementLarge Enough to Benefit From Economies of Scale 10 $4,738 $4,856 $5,339 $5,376 $5,479 $5,549 $5,577 $5,873 $6,055 $6,204 $6,504 $7,252 HBAN RF ZION BBT MTB SNV FHN BOKF KEY FITB STI CMA Noninterest Expense -7% At 9/30/13 ● Left chart: $ in millions ● Right chart: $ in thousands. Source: SNL Financial Assets Per Employee Compared to Peers
Sustainable Reduction in Costs 11 5,722 5,639 5,515 5,364 4,935 4,855 625 610 580 5,989 5,545 5,435 2008 2009 2010 2011 2012 2Q13 Legacy Sterling 10,186 9,330 9,001 8,861 9,035 8,918 536 9,397 2008 2009 2010 2011 2012 3Q13 Legacy Sterling Number of Employees (FTE) Real Estate Square Footage2 Energy Use (MWh) 15,450 13,978 156,123 153,452 145,771 149,005 148,266 145,941 2008 2009 2010 2011 2012 2Q13 Legacy Sterling -5% -7% -12% 1Rolling four quarters ending on 6/30/13 ● 2In thousands 1 Opportunities to Realize Operating Leverage Introducing new and enhanced treasury management products Cross-sell to expand relationships Expand Trust Alliance to grow fiduciary fees Allocating resources to faster growing markets & businesses Utilizing technology to improve productivity Selective outsourcing of services Lower pension expense as long rates rise Impact from continued low rate environment Declining purchase accounting accretion Increasing healthcare & regulatory costs 12 Revenue Opportunities Headwinds/ Challenges Expense Opportunities Efficiency Ratio 59% 66% 69% 67% 72% 69% 67% 2007 2008 2009 2010 2011 2012 YTD2013 Long-TermGoal1: Below 60% 20 year average: 59% 1Goal as of 12/9/13 Return on Average Assets (ROA) 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-TermGoal1: Above 1.30%
Proposed Basel III Liquidity Coverage Ratio (LCR)Estimate is Currently Compliant on a Fully Phased-In Basis Business lines continue to assess product and pricing strategy under proposed rules Developing funding and investment composition strategies • Currently, investing pre-payments from MBS portfolio into Tier I high quality liquid assets (HQLA), such as GNMA securities 13 $5.6B ≈$12.1B ≈$11.5B High Quality LiquidAssets Net Cash Outflows Excess Liquidity ≈105% Cash, Treasuries, MBS (partial credit) At 9/30/13 ● The Liquidity Coverage Ratio (LCR) is a proposed regulatory ratio that is not a GAAP financial measure, and there is no comparable GAAP financial measure. Comerica estimates its LCR based on a preliminary analysis of the proposed rule, Basel III guidelines published to date and other factors. According to the proposed rule, the LCR is generally to be calculated by dividing unencumbered, high quality liquid assets by the estimate of net cash outflows over an acute 21-day stressed time period. The estimated LCR is preliminary and subject to further analysis and final rulemaking; accordingly, there may be significant changes to the method used to calculate the LCR in the future which could materially impact the current estimate. For a further discussion of the Basel III regulatory framework, see the Company’s Form 10Q for the quarter ended 9/30/13, as filed with the SEC. Deposit runoff,Committed line utilization,Contractual loan maturity (inflow) Highest daily liquidity requirement during 21-days for non-advanced banks(including CMA), as opposed to a 30-days for advanced banks. Effectivelyresulting in a 70% LCR requirement (Modified Requirement) Estimated Liquidity Coverage Ratioas of September 30, 2013 Regional Bank Benefit Actions Being Taken inAnticipation of Final Rule Option to opt out of AOCI Less onerous RWA calculation through Standardized Approach Possible lower D-SIB buffer Not subject to Supplementary Leverage Ratio 10.6 1 9.92 9.87 9.73 9.42 8.97 8.96 8.36 8.08 7.90 7.82 6.93 SNV KEY CMA BOK F FITB R F HBA N STI MTB ZIO N FHN BBT Approach Capital from a Position of Strength 14 Tangible Common Equity Ratio1 10.4% 10.4% Basel IIITier 1 Common Basel IIITier 1 Benefit From Regional Bank Size in New Capital Rules Well Above the Minimum Regulatory Standard2 Regulatory Standard: 8.5% Regulatory Standard: 7.0% At 9/30/13 ● 1Source: SNL Financial● 2See Supplemental Financial Data slides for reconciliation of non-GAAP financial measures. Estimated ratios based on the standardized approach in the final rule and excluding most elements of accumulated other comprehensive income (AOCI)
Active Capital ManagementContinue to Repurchase Shares 15 1,125 2,884 2,928 3,118 2,090 1,910 1,714$29 $30 $31 $30 $34 $38 $42 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Share Repurchases Per Quarter Shares Repurchased2 Weighted Average Purchase Price $33 $88 $90 $93 $71 $72 $72 Total $375 million2012 Capital Plan 2013 Capital Plan To Date 2013 Capital Plan target1:• Up to $288MM share repurchase over four quarters (2Q13 through 1Q14) • 2Q13 & 3Q13: 3.6MM shares repurchased ($144MM) Total Repurchase ($ in millions) Shareholder Payout 47% 79% 77% 72% 70% 19% 21% 24% 22% 21% FY11 FY12 1Q13 2Q13 3Q13 Shares Repurchased Dividend 1Outlook as of 12/9/13 ● 2Shares in thousands. Shares repurchased under share repurchase program • One of the Highest Payouts in peer group• Strong capital base; Well positioned for Basel III capital rules Active in Managing Capital • Strong credit culture leads to solid credit metrics• Weathered cycle well relative to peers Maintaining Asset Quality • 200 bps increase in rates expected to result in >10% increase in net interest income1 Positioned for Rising Rates • Positioned in faster growing markets andindustries• Cross sell helping to drive fee income Growing Loans & Fee Income • Lowest cost deposits and largest percentage of funding from DDA among peers• Holding new and renewed loan spreads Maintaining Pricing Discipline • Continued tight expense controlControlling Expenses 16 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
Appendix Financial Summary 18 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 ratio2 10.72% 10.43% 10.37% Basel III Tier 1 common capital ratio2,3 10.4% Average diluted shares (millions) 187 187 191 $ in millions, except per share data ● 1Calculated using net income attributable to common shares ● 2See Supplemental Financial Data slides for a reconciliation of non-GAAP financial measures ● 3Estimated ratios based on the standardized approach in the final rule and excluding most elements of accumulated other comprehensive income (AOCI)
Third Quarter 2013 ResultsKey Performance Drivers 19 $ 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 Loans by Business and Market 20 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 21 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 Diverse Geography & Industry ExpertisePositioned For Long-Term Growth 22 Business Line Deposit Balances Geographic Deposit Balances Other Markets $6.0B12% California$14.6B28% Finance & Other$0.5B1%Texas$10.3B20% 3Q13 average balances Diverse Loan Portfolio = Total Middle Market (55%) General Middle Market$13.2B 29%Entertainment$0.6B 1% Energy$2.9B 7% Environmental Services$0.8B 2% National Dealer$4.9B 11% Tech. & Life Sciences$2.0B 5% Corporate Banking$4.4B 10% Mortgage Banker$1.6B 4% Commercial Real Estate$3.8B 9% Small Business$3.6B 8%Retail Banking$1.7B 4% Private Banking$4.6B 10% Michigan$20.5B39% Finance/ Other$0.5B1% Retail Bank$21.3B 41% WealthManagement$3.8B7% Business Bank$26.3B51%
23 General Middle Market At 9/30/13 ● Charts: $ in billions ● 1Comerica ranking in MI, CA and TX among top five competitors for companies with $20-500 million in revenues 8.9 8.9 9.2 9.6 9.8 10 .6 10.9 11. 4 11.2 11.2 12 .1 12.7 13 .5 13.5 14. 1 14.6 14.1 13.8 14.0 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 Deposits 16.5 15.9 15.0 14.2 13.6 13.4 13.0 13.0 13.0 13.2 13.1 13.0 13.0 13.1 13.1 13.2 13. 4 13.5 13.2 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 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 Avg. customer tenure: 10+ years 51% of customers >10 years: 60% of Michigan customers 52% of California customers 31% of Texas customers ≈30% of Michigan customers have been with Comerica for more than 25 years Long-Tenured, Deep Relationships Average Loans 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 At 9/30/13 ● Charts: $ in millions 24
National Dealer Services Line of Business 25 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 26 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% At 9/30/13 ● 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 27 28 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 29 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 30 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 31 #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 32 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 12/9/13 ≈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) Fifth Third BBB+ Baa1 A A (low) SunTrust BBB Baa1 BBB+ A (low) Huntington BBB Baa1 A- BBB Regions Financial BBB- Ba1 BBB- BBB Zions Bancorporation BBB- Ba1 BBB- BBB (low) First Horizon National Corp BB+ Baa3 BBB- Synovus Financial Corp BB- B1 BB Wells Fargo & Company A+ A2 AA- AA U.S. Bancorp A+ A1 AA- AA JP Morgan A A3 A+ A (high) PNC Financial Services Group A- A3 A+ A (high) Bank of America A- Baa2 A A Holding Company Debt Ratings 33 Pee r Ba nks Larg e Ba nks As of 12/3/13 ● 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) 34 9/30/13 6/30/13 3/31/13 12/31/12 9/30/12 Tier 1 and Tier 1 common capital1Risk-weighted assets1Tier 1 and Tier 1 common capital ratio 6,86264,02710.72% 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 $6,424 Total assetsLess: GoodwillLess: Other intangible assets $64,67063518 $62,94763520 $64,88563521 $65,06963522 $63,00063525 Tangible assets $64,017 $62,292 $64,229 $64,412 $62,340 Tangible common equity ratio 9.87% 10.04% 9.86% 9.76% 10.30% The Tier 1 common capital ratio removes preferred stock and qualifying trust preferred securities from Tier 1 capital as defined by and calculated in conformity with bank regulations. The tangible common equity ratio removes preferred stock and the effect of intangible assets from capital and the effect of intangible assets from total assets.The Corporation believes these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of common equity and to compare against other companies in the industry.1Tier 1 Capital and risk-weighted assets as defined and calculated in accordance with regulation.
Supplemental Financial DataTier 1 Common Equity under Basel III ($ in millions) 35 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.2Estimated 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 Tier 1 common capitalBasel III adjustments2 $6,862(4) Basel III Tier 1 common capital2 $6,858 Risk-weighted assets1Basel III adjustments2 $64,0271,713Basel III risk-weighted assets2 $65,740 Tier 1 common capital ratioBasel III Tier 1 common capital ratio2 10.7%10.4%