Comerica Incorporated First Quarter 2014 Financial Review April - PowerPoint PPT Presentation

Comerica Incorporated First Quarter 2014 Financial Review April 15, 2014

Safe Harbor Statement Any statements in this presentation 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 presentation and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica's management for future or past operations, products or services, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, estimates of credit trends and global stability. Such statements reflect the view of Comerica's management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Comerica's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in general economic, political or industry conditions; changes in monetary and fiscal policies, including changes in interest rates; volatility and disruptions in global capital and credit markets; changes in Comerica's credit rating; the interdependence of financial service companies; changes in regulation or oversight; unfavorable developments concerning credit quality; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Comerica's customers; operational difficulties, failure of technology infrastructure or information security incidents; the implementation of Comerica's strategies and business initiatives; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; competitive product and pricing pressures among financial institutions within Comerica's markets; changes in customer behavior; 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 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, 2013. 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 presentation or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. 2

Financial Summary 1Q14 4Q13 1Q13 Diluted income per common share 1 $0.73 $0.62 $0.70 Net interest income $410 $430 $416 Loan accretion 12 23 11 Provision for credit losses 9 9 16 Noninterest income 208 219 213 Noninterest expenses 406 473 416 3 52 3 Litigation-related expenses Net income 139 117 134 Total average loans $45,075 $44,054 $44,617 Total average deposits 52,770 52,769 50,692 Tier 1 common capital ratio 2 10.54% 4 10.64% 10.37% Basel III Tier 1 common capital ratio 2,3 10.3% 10.3% 10.1% Average diluted shares (millions) 187 186 187 $ in millions, except per share data ● 1 Calculated using net income attributable to common shares ● 2 See Supplemental Financial Data slides for a reconciliation of non-GAAP financial measures ● 3 Estimated ratios based on the standardized approach in the final rule and excluding most elements of accumulated other comprehensive income (AOCI) ● 4 Estimated 3

First Quarter 2014 Results Change From Key Performance Drivers 1Q14 4Q13 1Q13 Total average loans 45,075 1,021 458  Loan growth across footprint & nearly Commercial loans 28,362 679 306 all businesses lines 52,770 1 2,078 Total average deposits  Net interest income declined with lower accretion & nonaccrual interest Noninterest-bearing deposits 23,236 (296) 1,730 collected as well as 2 fewer days; Net interest income 410 (20) (6) loan growth & lower funding costs Loan accretion 12 (11) 1 offset lower loan yields Provision for credit losses 9 -- (7)  Credit quality remained strong Net loan charge-offs 12 (1) (12)  Customer-driven fees impacted by Noninterest income 208 (11) (5) slower syndication activity 184 (6) (1) Customer-driven fee income  Noninterest expenses decreased Noninterest expenses 406 (67) (10) from unusually high litigation-related expenses in 4Q13, decline in pension Net income 139 22 5 expense & continued drive for Shares repurchased 1 1.5MM shares or $72MM efficiency $ in millions ● 1Q14 compared to 4Q13 ● 1 Shares repurchased under the share repurchase program 4

Loan Growth in All Primary Markets Average Loans Average Loans Average Loans 10.4 14.8 13.7 13.6 10.2 14.4 13.5 10.1 13.3 13.3 9.9 9.8 14.0 13.9 13.5 +6% +3% +1% 1Q13 2Q13 3Q13 4Q13 1Q14 1Q13 2Q13 3Q13 4Q13 1Q14 1Q13 2Q13 3Q13 4Q13 1Q14 Average Deposits Average Deposits Average Deposits 20.6 15.2 20.5 20.5 20.3 20.2 14.8 14.7 14.6 14.4 10.9 10.5 10.3 10.2 10.0 +1% -3% +3% 1Q13 2Q13 3Q13 4Q13 1Q14 1Q13 2Q13 3Q13 4Q13 1Q14 1Q13 2Q13 3Q13 4Q13 1Q14 $ in billions 5

Average Loan Growth of $1B Led by Commercial Loan Growth of $679MM Total Loans Commercial Loans ($ in billions) ($ in billions) Loan Yields 46.5 45.5 National Dealer Floor Plan Mortgage Banker 45.1 44.9 44.6 29.8 44.1 44.1 28.8 28.4 28.4 28.1 27.8 27.7 1.4 1.4 0.9 1.8 1.7 1.1 1.6 3.4 3.2 3.5 2.8 3.1 3.2 2.9 3.58 3.54 3.47 3.44 3.39 1Q13 2Q13 3Q13 4Q13 1Q14 4Q13 1Q14 1Q13 2Q13 3Q13 4Q13 1Q14 4Q13 1Q14 Average Balances Period-end Average Balances Period-end  Lower accretion & nonaccrual interest collected impacted loan yield (-12bps)  Commitments grew $416MM to $53.2B 1 , driven by increases in Commercial Real Estate, Energy & Technology and Life Sciences  Line utilization of 48.3%, up from 47.1% 1  Loan pipeline increased with growth in nearly all business lines 1Q14 compared to 4Q13 ● 1 Utilization of commercial commitments as a percentage of total commercial commitments at period-end 6

Deposits Remain Strong Deposit Costs Declined Modestly Strong Deposit Base ($ in billions) 1 Deposit Rates 53.8 53.3 52.8 52.8 51.9 Total average deposits stable 2 : 51.4 50.7 • Noninterest-bearing deposits decreased $296MM • Interest-bearing deposits increased $297MM, primarily Money Market and interest-bearing checking • Deposit rates declined due to selective pricing adjustments & maturities of higher priced CDs 0.21 0.19 0.18 0.17 Loan to Deposit Ratio 3 of 86% 0.15 1Q13 2Q13 3Q13 4Q13 1Q14 4Q13 1Q14 Average Balances Period-end 1 Interest cost on interest-bearing deposits ● 2 1Q14 compared to 4Q13 ● 3 At 3/31/14 7