Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - COMERICA INC /NEW/ | cma-20160630ex992.htm |
| EX-99.1 - EXHIBIT 99.1 - COMERICA INC /NEW/ | cma-20160630ex991.htm |
| 8-K - 8-K - COMERICA INC /NEW/ | cma-20160630form8k.htm |
Any statements in this document 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,” “projects,” “models” 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 document 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, including the GEAR Up initiative, and forecasts of Comerica's
revenue, earnings or other measures of economic performance, including statements of profitability,
business segments and subsidiaries, as well as estimates of the economic benefits of the GEAR Up
initiative, 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 changes in interest rates; changes in
regulation or oversight; Comerica's ability to maintain adequate sources of funding and liquidity; the
effects of more stringent capital or liquidity requirements; declines or other changes in the businesses
or industries of Comerica's customers, in particular the energy industry; unfavorable developments
concerning credit quality; operational difficulties, failure of technology infrastructure or information
security incidents; reliance on other companies to provide certain key components of business
infrastructure; factors impacting noninterest expenses which are beyond Comerica's control; changes
in the financial markets, including fluctuations in interest rates and their impact on deposit pricing;
reductions in Comerica's credit rating; whether Comerica may achieve opportunities for revenue
enhancements and efficiency improvements under the GEAR Up initiative, or changes in the scope or
assumptions underlying the GEAR Up initiative; the interdependence of financial service companies;
the implementation of Comerica's strategies and business initiatives; damage to Comerica's reputation;
Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new
products and services; competitive product and pricing pressures among financial institutions within
Comerica's markets; changes in customer behavior; any future strategic acquisitions or divestitures;
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 or determinations; 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, 2015 and “Item 1A. Risk Factors” beginning on page 54 of Comerica’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2016. 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 or in any other documents,
Comerica claims the protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995.
Safe Harbor Statement
EXPENSE
REDUCTION
EXPECTATIONS
TO DATE
A reduction in expenses of ~$110 million is expected by year-end 2017,
increasing to ~$160 million by year-end 2018.
Consolidate office & operations space
Consolidate ~40 banking centers
(about 8% of total network)
RATIONALIZE REAL ESTATE
Eliminate ~9% of total workforce
over the next year by consolidating
functions and responsibilities
Decrease management layers to
move closer to the customers and
accelerate decision making
REDUCE WORKFORCE
Significantly reduce the number of IT
applications
Optimize infrastructure
Further automate operational processes
ENHANCE INFORMATION
TECHNOLOGY (IT) CAPABILITIES
Increase speed to loan approval through
further centralization and digitalization
Eliminate redundancies and enhance
data collection and analysis
STREAMLINE CREDIT PROCESS
REVENUE
ENHANCEMENT
OPPORTUNITIES
TO DATE
Planned revenue enhancements of ~$30 million are expected by year-end 2017,
increasing to ~$70 million by year-end 2018.
Focus on new products with greater
contribution margins
Expand products, sales tools and
training
Improve customer analytics to identify
opportunities
DEEPEN CUSTOMER RELATIONSHIPS
Leverage technology to increase productivity
and reduce time to close
Ramp-up Merchant Services to significantly
increase customer penetration
Realign incentives
Standardize approach across all markets for sales, training and performance management
ACCELERATE GROWTH IN MIDDLE MARKET BANKING
MEMBER FDIC. EQUAL OPPORTUNITY LENDER.
Estimates and outlook as of July 19, 2016
~$140 million
by year-end 2017
~$230 million (annual run-rate)
by year-end 2018
PRE-TAX BENEFITS
Total pre-tax restructuring charges of ~$140 to $160 million through 2018
RESTRUCTURING CHARGES
Low 60s% by year-end 2017
≤ 60% by mid-year 2018
(assumes no rate increases)
EFFICIENCY RATIO
Through this initiative, our actions will take us a long way toward achieving
a double-digit Return on Equity.INITIAL
FINANCIAL
TARGETS
Through our comprehensive review and analysis
over the past several months, we have identified
20+ work streams focused on enhancing revenue
and reducing expenses. We are moving expeditiously,
and implementation has started. Our executive team,
who owns this initiative, will provide quarterly
updates on our progress towards our financial targets.
PROCESS
Further enhance revenue and
reduce expenses by:
•
•
driving high-growth opportunities; and
supporting speed, simplicity and
agility in decision-making and action.
GOAL
To strengthen our competitive position, and ensure that we remain a strong partner and trusted advisor to our customers, for the
ultimate benefit of our shareholders, we are fundamentally changing the way we operate in many areas of our business. To date
through the GEAR Up initiative, Comerica has already identified efficiency and revenue actions that are expected to drive at least
$230 million in additional pre-tax income. Moreover, we are pursuing additional opportunities that will further enhance our profitability.
Any statements in this document 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,” “projects,” “models” 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 document 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, including the GEAR Up initiative, and forecasts of Comerica's
revenue, earnings or other measures of economic performance, including statements of profitability,
business segments and subsidiaries, as well as estimates of the economic benefits of the GEAR Up
initiative, 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 changes in interest rates; changes in
regulation or oversight; Comerica's ability to maintain adequate sources of funding and liquidity; the
effects of more stringent capital or liquidity requirements; declines or other changes in the businesses
or industries of Comerica's customers, in particular the energy industry; unfavorable developments
concerning credit quality; operational difficulties, failure of technology infrastructure or information
security incidents; reliance on other companies to provide certain key components of business
infrastructure; factors impacting noninterest expenses which are beyond Comerica's control; changes
in the financial markets, including fluctuations in interest rates and their impact on deposit pricing;
reductions in Comerica's credit rating; whether Comerica may achieve opportunities for revenue
enhancements and efficiency improvements under the GEAR Up initiative, or changes in the scope or
assumptions underlying the GEAR Up initiative; the interdependence of financial service companies;
the implementation of Comerica's strategies and business initiatives; damage to Comerica's reputation;
Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new
products and services; competitive product and pricing pressures among financial institutions within
Comerica's markets; changes in customer behavior; any future strategic acquisitions or divestitures;
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 or determinations; 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, 2015 and “Item 1A. Risk Factors” beginning on page 54 of Comerica’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2016. 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 or in any other documents,
Comerica claims the protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995.
Safe Harbor Statement
EXPENSE
REDUCTION
EXPECTATIONS
TO DATE
A reduction in expenses of ~$110 million is expected by year-end 2017,
increasing to ~$160 million by year-end 2018.
Consolidate office & operations space
Consolidate ~40 banking centers
(about 7% of total network)
RATIONALIZE REAL ESTATE
Eliminate ~9% of total workforce
over the next year by consolidating
functions and responsibilities
Decrease management layers to
move closer to the customers and
accelerate decision making
REDUCE WORKFORCE
Significantly reduce the number of IT
applications
Optimize infrastructure
Further automate operational processes
ENHANCE INFORMATION
TECHNOLOGY (IT) CAPABILITIES
Increase speed to loan approval through
further centralization and digitalization
Eliminate redundancies and enhance
data collection and analysis
STREAMLINE CREDIT PROCESS
REVENUE
ENHANCEMENT
OPPORTUNITIES
TO DATE
Planned revenue enhancements of ~$30 million are expected by year-end 2017,
increasing to ~$70 million by year-end 2018.
Focus on new products with greater
contribution margins
Expand products, sales tools and
training
Improve customer analytics to identify
opportunities
DEEPEN CUSTOMER RELATIONSHIPS
Leverage technology to increase productivity
and reduce time to close
Ramp-up Merchant Services to significantly
increase customer penetration
Realign incentives
Standardize approach across all markets for sales, training and performance management
ACCELERATE GROWTH IN MIDDLE MARKET BANKING
MEMBER FDIC. EQUAL OPPORTUNITY LENDER.
Estimates and outlook as of July 19, 2016
~$140 million
by year-end 2017
~$230 million (annual run-rate)
by year-end 2018
PRE-TAX BENEFITS
Total pre-tax restructuring charges of ~$140 to $160 million through 2018
RESTRUCTURING CHARGES
Low 60s% by year-end 2017
≤ 60% by mid-year 2018
(assumes no rate increases)
EFFICIENCY RATIO
Through this initiative, our actions will take us a long way toward achieving
a double-digit Return on Equity.INITIAL
FINANCIAL
TARGETS
Through our comprehensive review and analysis
over the past several months, we have identified
20+ work streams focused on enhancing revenue
and reducing expenses. We are moving expeditiously,
and implementation has started. Our executive team,
who owns this initiative, will provide quarterly
updates on our progress towards our financial targets.
PROCESS
Further enhance revenue and
reduce expenses by:
•
•
driving high-growth opportunities; and
supporting speed, simplicity and
agility in decision-making and action.
GOAL
Comerica has already identified opportunities that are expected to drive at least $230 million in additional pre-tax income through
the GEAR Up initiative. Furthermore, we are pursuing additional opportunities that will further enhance our profitability. To achieve
this result, we are fundamentally changing the way we operate in many areas of our business. We believe this positions us to better
compete, despite current market conditions and a tough banking environment, and ensures we remain a strong partner and trusted
advisor to our customers, for the ultimate benefit of our shareholders.