Comerica Incorporated Fourth Quarter 2014 Financial Review January - PowerPoint PPT Presentation

Comerica Incorporated Fourth Quarter 2014 Financial Review January 16, 2015

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 4Q14 3Q14 2014 2013 $0.80 $0.82 $3.16 $2.85 Diluted income per common share Impact from certain actions 1 ($0.02) $0.03 $415 $414 $1,655 $1,672 Net interest income 9 3 34 49 Loan accretion 2 5 27 46 Provision for credit losses 225 215 868 882 Noninterest income 419 1 397 1 1,626 1,722 3 Noninterest expenses 4 (8) Efficiency-related & Other Actions 1 149 154 593 541 Net income $47,361 $47,159 $46,588 $44,412 Total average loans 57,760 55,163 54,784 51,711 Total average deposits 10.53% 4 10.59% 10.53% 4 10.64% Tier 1 common capital ratio 2 10.3% 10.4% 10.3% 10.3% Basel III Tier 1 common capital ratio 2,4 Average diluted shares (millions) 184 185 185 187 $ in millions, except per share data ● 1 Reflected 4Q14 actions of $4MM, or $3MM after-tax and 3Q14 actions which resulted in a net benefit of $8MM, or $5MM after-tax. ● 2 See Supplemental Financial Data slides for a reconciliation of non-GAAP financial measures ● 3 Included litigation-related expense of $52MM in 4Q13, related to an unfavorable jury verdict in a lender 3 liability case. ● 4 Estimated

Full-Year 2014 Results Key YoY Performance Drivers From FY13  EPS increased 11% FY14 Chg $ Chg % 46,588 2,176 5% Total average loans  Solid average loan & deposit growth with increases in all businesses 54,784 3,073 6% Total average deposits  Net interest income modestly lower due 1,655 (17) (1%) Net interest income to accretion decline. Impact from loan 34 (15) (31%) Loan accretion portfolio dynamics & low rates 27 (19) (41%) Provision for credit losses predominately offset by loan growth 25 (48) N/M Net loan charge-offs Credit quality remained strong  868 (14) (2%) Noninterest income  Noninterest income declined due to 768 5 1% Customer-driven fee income noncustomer-driven categories 1,626 (96) (6%) Noninterest expenses  Expenses remained well controlled; Litigation-related ($48MM) & pension 593 52 10% Net income ($47MM) expenses declined 3.16 0.31 11% Earnings per share (EPS) 1  Share repurchases 3 , combined with 37.72 2.08 6% Tangible Book Value Per dividends, returned $392MM to Share 2 shareholders 5.2MM shares or $249MM Shares repurchased 3 $ in millions, except per share data ● Full-year 2014 compared to full-year 2013 ● 1 EPS based on diluted income per share ● 2 See Supplemental Financial Data slides for reconciliation of non-GAAP financial measures ● 3 Shares repurchased under the share repurchase program 4

Fourth Quarter 2014 Results Change From 4Q14 3Q14 4Q13 Key QoQ Performance Drivers 47,361 202 3,307 Total average loans  Average loans increased slightly across 57,760 2,597 4,991 Total average deposits most businesses 415 1 (15) Net interest income Robust deposit growth of 5%  9 6 (14) Loan accretion  Net interest income stable 2 (3) (7) Provision for credit losses  Credit quality was strong 1 (2) (12) Net loan charge-offs  Noninterest income reflects higher 225 10 6 Noninterest income customer derivative income 201 11 11 Customer-driven fee income Expenses increased from efficiency-  419 2 22 2 (54) 1 Noninterest expenses related actions along with increases in technology-related contract labor and 4 12 N/A Efficiency-related & Other Actions 2 seasonal increases in other categories 149 (5) 32 Net income  Share repurchases 4 , combined with 0.80 (0.02) 0.18 Earnings per share (EPS) 3 dividends, returned $95 million to 37.72 0.07 2.08 Tangible Book Value Per shareholders Share 2 1.3MM shares or $59MM Shares repurchased 4 $ in millions, except per share data ● 4Q14 compared to 3Q14 ● 1 Included litigation-related expense of $52MM in 4Q13, related to an unfavorable jury verdict in a lender liability case. ● 2 Reflected 4Q14 actions of $4MM, or $3MM after-tax. 3Q14 actions resulted in a net benefit of $8MM, or $5MM after-tax. ● 3 EPS based on diluted income per share ● 4 Shares 5 repurchased under the share repurchase program

Diverse Footprint Drives Growth Average Loans Average Loans Average Loans 11.3 13.4 13.5 13.5 11.1 15.8 13.3 11.0 13.2 15.5 15.4 14.8 10.4 14.4 9.8 +2% -1% +2% -1% +16% +9% 4Q13 1Q14 2Q14 3Q14 4Q14 4Q13 1Q14 2Q14 3Q14 4Q14 4Q13 1Q14 2Q14 3Q14 4Q14 Average Deposits Average Deposits Average Deposits 21.6 21.2 18.0 10.9 10.8 20.7 10.7 20.6 20.6 10.5 10.6 16.4 15.4 15.2 14.8 +10% +2% +2% +5% +19% +3% 4Q13 1Q14 2Q14 3Q14 4Q14 4Q13 1Q14 2Q14 3Q14 4Q14 4Q13 1Q14 2Q14 3Q14 4Q14 $ in billions 6