<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-10706
Comerica Incorporated
(Exact name of registrant as specified in its charter)
Delaware 38-1998421
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Comerica Tower at Detroit Center
Detroit, Michigan
48226
(Address of principal executive offices)
(Zip Code)
(313) 222-3300
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
$5 par value common stock:
outstanding as of July 31, 1996: 114,979,000 shares
<PAGE>
<PAGE> 2
PART I. FINANCIAL INFORMATION
<TABLE>
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
<CAPTION>
June 30, December 31, June 30,
(In thousands, except share data) 1996 1995 1995
----------- ------------ -----------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 1,677,375 $ 2,028,375 $ 1,674,750
Interest-bearing deposits with banks 228,589 23,568 112,417
Federal funds sold and securities
purchased under agreements to
resell 442,850 203,798 608,300
Trading account securities 5,032 10,668 9,313
Loans held for sale 58,454 511,562 142,100
Investment securities available
for sale 5,590,562 6,859,310 2,897,875
Investment securities held to
maturity (estimated fair value
of $4,757,777 at 6/30/95) - - 4,804,396
----------- ----------- -----------
Total investment securities 5,590,562 6,859,310 7,702,271
Commercial loans 13,208,865 12,041,009 11,687,285
International loans 1,505,585 1,384,814 1,223,631
Real estate construction loans 698,592 641,432 521,530
Commercial mortgage loans 3,603,524 3,254,041 3,175,013
Residential mortgage loans 2,009,141 2,221,359 2,501,476
Consumer loans 4,643,212 4,570,015 4,610,586
Lease financing 360,038 329,608 274,600
----------- ----------- -----------
Total loans 26,028,957 24,442,278 23,994,121
Less allowance for loan losses (364,601) (341,344) (337,879)
----------- ----------- -----------
Net loans 25,664,356 24,100,934 23,656,242
Premises and equipment 462,480 455,002 460,170
Customers' liability on acceptances
outstanding 104,027 21,135 40,460
Accrued income and other assets 1,152,402 1,255,522 1,045,453
----------- ----------- -----------
TOTAL ASSETS $35,386,127 $35,469,874 $35,451,476
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits (noninterest-
bearing) $ 6,280,195 $ 5,579,536 $ 5,239,315
Interest-bearing deposits 16,176,726 15,461,213 15,062,885
Deposits in foreign offices 491,418 2,126,466 1,586,916
----------- ----------- -----------
Total deposits 22,948,339 23,167,215 21,889,116
Federal funds purchased and
securities sold under
agreements to repurchase 355,547 3,206,612 476,563
Other borrowed funds 3,790,109 1,467,550 5,870,111
Acceptances outstanding 104,027 21,135 40,460
Accrued expenses and other
liabilities 276,881 355,219 279,208
Medium- and long-term debt 5,045,054 4,644,416 4,411,281
----------- ----------- -----------
Total liabilities 32,519,957 32,862,147 32,966,739
Nonredeemable preferred stock
- $50 stated value:
Authorized - 5,000,000 shares
Issued - 5,000,000 shares at
6/30/96 250,000 - -
Common stock - $5 par value:
Authorized - 250,000,000 shares
Issued-119,294,531 shares at
6/30/96, 115,094,531 shares at
12/31/95 and 115,212,031 shares
at 6/30/95 596,473 575,473 576,060
Capital surplus 509,432 408,644 417,274
Unrealized gains and losses on
investment securities available
for sale (81,428) (4,141) (2,268)
Retained earnings 1,773,684 1,640,980 1,510,008
Less cost of common stock in
treasury-4,371,333 shares at 6/30/96,
490,704 shares at 12/31/95 and
627,316 shares at 6/30/95 (181,991) (13,229) (16,337)
----------- ----------- -----------
Total shareholders' equity 2,866,170 2,607,727 2,484,737
----------- ----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $35,386,127 $35,469,874 $35,451,476
=========== =========== ===========
/TABLE
<PAGE>
<PAGE> 3
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
-------------------- ------------------------
(In thousands, except per share data) 1996 1995 1996 1995
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $540,923 $527,860 $1,077,801 $1,017,603
Interest on investment securities:
Taxable 93,300 119,423 201,621 238,414
Exempt from federal income tax 5,055 7,054 10,383 13,824
-------- -------- ---------- ----------
Total interest on investment
securities 98,355 126,477 212,004 252,238
Trading account interest 46 103 121 154
Interest on federal funds sold and
securities purchased under agreements
to resell 1,403 1,908 3,147 2,636
Interest on time deposits with banks 326 2,251 444 6,451
Interest on loans held for sale 1,139 1,393 3,105 2,532
-------- -------- ---------- ----------
Total interest income 642,192 659,992 1,296,622 1,281,614
INTEREST EXPENSE
Interest on deposits 171,927 182,411 352,817 354,236
Interest on short-term borrowings:
Federal funds purchased and securities
sold under agreements to repurchase 23,857 41,676 57,053 82,052
Other borrowed funds 27,762 40,348 57,301 70,749
Interest on medium- and long-term debt 76,071 69,786 147,321 134,526
Net interest rate swap (income)/expense (13,914) 2,720 (23,620) 4,514
-------- -------- ---------- ----------
Total interest expense 285,703 336,941 590,872 646,077
-------- -------- ---------- ----------
Net interest income 356,489 323,051 705,750 635,537
Provision for loan losses 25,000 15,500 53,500 27,500
-------- -------- ---------- ----------
Net interest income after
provision for loan losses 331,489 307,551 652,250 608,037
NONINTEREST INCOME
Income from fiduciary activities 33,289 31,993 66,894 62,734
Service charges on deposit accounts 35,600 32,141 70,740 63,988
Customhouse broker fees 2,640 9,099 10,764 18,348
Revolving credit fees 4,518 9,379 11,442 16,254
Securities gains 3,310 71 3,670 272
Other noninterest income 41,433 35,749 94,708 72,175
-------- -------- ---------- ----------
Total noninterest income 120,790 118,432 258,218 233,771
NONINTEREST EXPENSES
Salaries and employee benefits 143,036 140,760 288,960 277,867
Net occupancy expense 25,742 24,390 52,573 48,657
Equipment expense 16,790 16,854 34,836 33,883
FDIC insurance expense 639 11,073 1,265 21,918
Telecommunications expense 7,419 7,104 15,057 14,797
Other noninterest expenses 76,570 72,401 156,480 139,676
-------- -------- ---------- ----------
Total noninterest expenses 270,196 272,582 549,171 536,798
-------- -------- ---------- ----------
Income before income taxes 182,083 153,401 361,297 305,010
Provision for income taxes 63,862 51,869 126,470 103,456
-------- -------- ---------- ----------
NET INCOME $118,221 $101,532 $ 234,827 $ 201,554
======== ======== ========== ==========
Net income applicable to common stock $118,221 $101,532 $ 234,827 $ 201,554
======== ======== ========== ==========
Net income per share $1.00 $0.86 $1.98 $1.71
Average common and common
equivalent shares 118,098 118,438 118,620 117,865
Cash dividends declared $45,088 $40,932 $86,327 $78,148
Dividends per share $0.39 $0.35 $0.74 $0.67
</TABLE>
<PAGE>
<PAGE> 4
<TABLE>
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Comerica Incorporated and Subsidiaries
<CAPTION>
Nonredeem-
able Unrealized Total
Preferred Common Capital Gains/ Retained Treasury Shareholders'
(in thousands) Stock Stock Surplus (Losses) Earnings Stock Equity
--------- --------- --------- ---------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCES AT
JANUARY 1,
1995 $ - $596,473 $525,052 $ (55,039) $1,390,405 $ (65,111) $2,391,780
Net income for
1995 - - - - 201,554 - 201,554
Cash dividends
declared - - - - (78,148) - (78,148)
Purchase of
1,346,600
shares - - - - - (36,623) (36,623)
Purchase and
retirement of
4,082,500
shares - (20,413) (109,168) - - - (129,581)
Issuance of
shares:
Employee stock
plans - - (242) - (3,803) 10,834 6,789
Acquisitions - - 1,137 - - 74,563 75,700
Amortization of
deferred
compensation - - 495 - - - 495
Change in
unrealized
gains/(losses)
on securities
available for
sale - - - 52,771 - - 52,771
-------- -------- -------- --------- --------- --------- ----------
BALANCES AT
JUNE 30,
1995 $ - $576,060 $417,274 $ (2,268) $1,510,008 $ (16,337) $2,484,737
======== ======== ======== ========== ========== ========= ==========
BALANCES AT
JANUARY 1,
1996 $ - $575,473 $408,644 $ (4,141) $1,640,980 $ (13,229) $2,607,727
Net income for
1996 - - - - 234,827 - 234,827
Issuance of
preferred
stock 250,000 - (3,125) - - - 246,875
Cash dividends
declared
on common
stock - - - - (86,327) - (86,327)
Purchase of
4,986,626
shares of
common stock - - - - - (208,653) (208,653)
Issuance of
common stock
for:
Employee
stock plans - - 4,993 - (16,004) 30,633 19,622
Acquisitions - 21,000 98,472 - 208 9,258 128,938
Amortization of
deferred
compensation - - 448 - - - 448
Change in
unrealized
gains/(losses)
on securities
available for
sale - - - (77,287) - - (77,287)
-------- -------- -------- --------- --------- --------- ----------
BALANCES AT
JUNE 30,
1996 $250,000 $596,473 $509,432 $ (81,428) $1,773,684 $(181,991) $2,866,170
======== ======== ======== ========== ========== ========= ==========
</TABLE>
<PAGE>
<PAGE> 5
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Comerica Incorporated and Subsidiaries
<CAPTION>
Six Months Ended
June 30
---------------------------
(in thousands) 1996 1995
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 234,827 $ 201,554
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 53,500 27,500
Depreciation 33,540 31,223
Net (increase) decrease in trading
account securities 5,636 (4,981)
Net (increase) decrease in loans held
for sale 453,108 (50,553)
Net (increase) decrease in accrued
income receivable 10,171 (17,341)
Net increase (decrease) in accrued expenses (108,735) 39,990
Net amortization of intangibles 16,069 14,112
Funding for employee benefit plans (25,000) (125,000)
Other, net 213,863 (62,589)
------------ ------------
Total adjustments 652,152 (147,639)
------------ ------------
Net cash provided by operating
activities 886,979 53,915
INVESTING ACTIVITIES:
Net (increase) decrease in interest-bearing
deposits with banks (204,965) 266,456
Net increase in federal funds sold
and securities purchased under agreements
to resell (169,052) (527,000)
Proceeds from sale of investment securities
available for sale 1,079,019 21,353
Proceeds from maturity of investment
securities available for sale 695,040 193,722
Purchases of investment securities
available for sale (367,060) (29,769)
Proceeds from maturity of investment
securities held to maturity - 347,917
Purchases of investment securities
held to maturity - (145,978)
Net increase in loans (other
than purchased loans) (931,537) (1,538,707)
Purchase of loans (11,490) (35,867)
Fixed assets, net (31,533) (36,855)
Net increase in customers'
liability on acceptances outstanding (82,892) (6,828)
Net cash provided by acquisitions/sale 94,232 28,794
------------ ------------
Net cash provided by (used in)
investing activities 69,762 (1,462,762)
FINANCING ACTIVITIES:
Net decrease in deposits (1,230,907) (961,940)
Net increase (decrease) in short-term
borrowings (537,291) 2,141,266
Net increase in acceptances
outstanding 82,892 6,828
Proceeds from issuance of medium- and
long-term debt 1,101,000 1,360,000
Repayments and purchases of medium- and
long-term debt (700,362) (1,051,306)
Proceeds from issuance of preferred stock 246,875 -
Proceeds from issuance of common stock
and other capital transactions 20,070 7,284
Purchase of common stock for treasury (208,653) (166,204)
Dividends paid (81,365) (74,644)
------------ ------------
Net cash provided by (used in)
financing activities (1,307,741) 1,261,284
------------ ------------
Net decrease in cash and due from banks (351,000) (147,563)
Cash and due from banks at beginning of year 2,028,375 1,822,313
------------ ------------
Cash and due from banks at end of period $ 1,677,375 $ 1,674,750
============ ============
Interest paid $ 634,240 $ 614,182
============ ============
Income taxes paid $ 127,238 $ 103,725
============ ============
Noncash investing and financing activities:
Loan transfers to other real estate $ 5,872 $ 13,175
============ ============
Stock issued for acquisitions $ 128,938 $ 75,700
============ ============
</TABLE> <PAGE>
<PAGE> 6
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 1 - Basis of Presentation
The accompanying unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, the statements do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the six months ended June 30, 1996 are not
necessarily indicative of the results that may be expected for the year
ended December 31, 1996. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Comerica Incorporated and Subsidiaries' annual report on Form 10-K for the
year ended December 31, 1995.
Note 2 - Investment Securities
At June 30, 1996 investment securities having a carrying value of
$4.0 billion were pledged where permitted or required by law to secure
liabilities and public and other deposits, including deposits of the State
of Michigan of $29 million.
Note 3 - Allowance for Loan Losses
The following analyzes the changes in the allowance for loan losses
included in the consolidated balance sheets:
<TABLE>
<CAPTION>
(in thousands) 1996 1995
--------- ---------
<S> <C> <C>
Balance at January 1 $ 341,344 $ 326,195
Allowance acquired 10,370 3,260
Loans charged off (57,950) (38,870)
Recoveries on loans previously
charged off 17,337 19,794
--------- ---------
Net loans charged off (40,613) (19,076)
Provision for loan losses 53,500 27,500
--------- ---------
Balance at June 30 $ 364,601 $ 337,879
========= =========
</TABLE>
A loan is considered impaired if it is probable that interest and
principal payments will not be made in accordance with the contractual
terms of the loan agreement. Consistent with this definition, all
nonaccrual and reduced-rate loans (with the exception of residential
mortgage and consumer loans) are impaired. Impaired loans averaged $121
million and $129 million for the quarter and six months ended June 30,
1996, respectively. Of the $116 million period-end impaired loans,
approximately $75 million required an allowance for loan losses of $25
million in accordance with SFAS No. 114. The remaining impaired loan
balance represents loans for which the fair value exceeded the recorded
investment in the loan.
<PAGE>
<PAGE> 7
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 4 - Medium- and Long-term Debt
Medium- and long-term debt consisted of the following at June 30,
1996 and December 31, 1995:
<TABLE>
<CAPTION>
(in thousands) June 30, 1996 December 31, 1995
------------- -----------------
<S> <C> <C>
Parent Company
9.75% subordinated notes
due 1999 $ 74,737 $ 74,692
10.125% subordinated debentures
due 1998 74,840 74,800
7.25% subordinated notes due
2007 148,623 148,584
---------- ----------
Total parent company 298,200 298,076
Subsidiaries
Subordinated notes:
8.375% subordinated notes due
2024 147,821 147,782
7.25% subordinated notes due
2002 149,009 148,931
6.875% subordinated notes due
2008 99,104 99,066
7.125% subordinated notes due
2013 148,056 148,000
---------- ----------
Total subordinated notes 543,990 543,779
Medium-term notes:
Floating rate based on Treasury
bill indices 1,049,838 1,099,701
Floating rate based on Prime
indices 450,000 550,000
Floating rate based on LIBOR
indices 1,423,958 624,937
Fixed rate notes with interest
rates ranging from 5.50%
to 6.875% 1,273,684 1,523,433
---------- ----------
Total medium-term notes 4,197,480 3,798,071
Notes payable maturing on dates
ranging from 1996 through 2015 5,384 4,490
---------- ----------
Total subsidiaries 4,746,854 4,346,340
---------- ----------
Total medium- and long-term
debt $5,045,054 $4,644,416
========== ==========
</TABLE>
Note 5 - Income Taxes
The provision for income taxes is computed by applying statutory
federal income tax rates to income before income taxes as reported in the
financial statements after deducting non-taxable items, principally
interest income on state and municipal securities. <PAGE>
<PAGE> 8
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 6 - Off-Balance-Sheet Derivatives and Foreign Exchange Contracts
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------------------------ ------------------------------
Notional/ Notional/
Contract Unrealized Fair Contract Unrealized Fair
Amount Gains Losses Value Amount Gains Losses Value
(in millions) (1) (2) (3) (1) (2) (3)
------------------------------ ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Risk Management
Interest rate contracts
Swaps (4) $ 8,841 $ 27 $(161) $(134) $5,925 $ 88 $(20) $(68)
Options, caps and
floors purchased 56 - - - 40 19 (21) (2)
Caps written 152 - - - 154 - - -
Foreign exchange contracts
Spot and forwards 506 4 (1) 3 229 2 (1) 1
Swaps 45 1 (1) - 50 8 - 8
------- ---- ----- ----- ------ ---- ---- ----
Total risk management 9,600 32 (163) (131) 6,398 117 (42) (75)
Customer Initiated and
Other
Interest rate contracts
Caps written 425 - (1) (1) 360 - - -
Floors purchased 2 - - - - - - -
Swaps - - - - 3 - - -
Foreign exchange contracts
Spot, forward, futures
and options 830 8 (5) 3 320 5 (5) -
------- ---- ----- ----- ------ ---- ----- ----
Total customer
initiated and other 1,257 8 (6) 2 683 5 (5) -
------- ---- ----- ----- ------ ---- ----- ----
Total derivatives and
foreign exchange
contracts $10,857 $ 40 $(169) $(129) $7,081 $122 $(47) $(75)
======= ==== ===== ===== ====== ==== ===== ====
(1) Notional or contract amounts, which represent the extent of involvement in the
derivatives market, are generally used to determine the contractual cash flows required in
accordance with the terms of the agreement. These amounts are typically not exchanged,
significantly exceed amounts subject to credit or market risk, and are not reflected in the
consolidated balance sheets.
(2) Represents credit risk, which is measured as the cost to replace, at current market
rates, contracts in a profitable position. Credit risk is calculated before consideration
is given to bilateral collateral agreements or master netting arrangements that effectively
reduce credit risk.
(3) The fair values of derivatives and foreign exchange contracts generally represent the
estimated amounts the Corporation would receive or pay to terminate or otherwise settle the
contracts at the balance sheet date. The fair values of customer initiated and other
derivatives and foreign exchange contracts are reflected in the consolidated balance sheets.
Futures contracts are subject to daily cash settlements; therefore, the fair value of these
instruments is zero.
(4) Includes index amortizing swaps with a notional amount of $5,337 million and $3,688
million at June 30, 1996 and December 31, 1995, respectively. These swaps had net unrealized
loss of $123 million at June 30, 1996 versus a net unrealized gain of $4 million at December
31, 1995. As of June 30, 1996 index amortizing swaps had an average expected life of
approximately 3.09 years with a stated maturity that averaged 4.87 years.
</TABLE>
<PAGE>
<PAGE> 9
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 6 - Off-Balance-Sheet Derivatives and Foreign Exchange Contracts
(Continued)
Risk Management
- ---------------
Interest rate risk arises in the normal course of business to the
extent there is a difference between the repricing and maturity
characteristics of interest-earning assets and interest-bearing
liabilities. This gap in the balance sheet structure reflects the
sensitivity of the Corporation's net interest income to a change in
interest rates. Foreign exchange rate risk arises from changes in the
value of certain assets and liabilities denominated in foreign currencies.
The Corporation employs on-balance sheet instruments such as investment
securities, as well as off-balance sheet derivative financial instruments
and foreign exchange contracts to manage exposure to these and other
risks, including liquidity risk.
As an end-user, the Corporation mainly accesses the interest rate
markets to obtain off-balance sheet derivatives instruments for use
principally in connection with asset and liability management activities.
Interest rate swaps are predominantly utilized with the objective of
managing the sensitivity of net interest income to interest rate
fluctuations. To accomplish this objective, interest rate swaps are
primarily used to modify the interest rate characteristics of certain
assets and liabilities (for example, from a floating rate to a fixed rate,
a fixed rate to a floating rate, or from one floating rate index to
another). This strategy permits the achievement of an optimal match
between the rate maturities of assets and their funding sources which, in
turn, reduces the overall exposure of net interest income to interest rate
risk.
The following table summarizes the expected maturity distribution of
the notional amount of interest rate swaps used for risk management
purposes. The table also indicates the weighted average interest rates
associated with amounts to be received or paid on interest rate swap
agreements as of June 30, 1996. The swaps are grouped by the assets or
liabilities to which they have been designated.
Various other types of off-balance sheet financial instruments may
also be used to manage interest rate and foreign currency risks associated
with specific assets or liabilities, including interest rate caps and
floors, forward and futures interest and foreign exchange rate contracts,
and foreign exchange rate swaps, which are reflected in the table above.
At June 30, 1996 and December 31, 1995, the notional amounts of
commitments to purchase securities totaled $21 million and $16 million,
respectively; the notional amounts of commitments to sell securities
totaled $17 million and $14 million, respectively; and the notional
amounts of commitments to sell mortgage loans totaled $40 million and $147
million, respectively. These commitments, which are similar in nature to
forward contracts, are not reflected in the above table due to the
immaterial impact they have on the financial statements.
Customer Initiated and Other
- -----------------------------
The Corporation earns additional income by executing various
transactions, primarily foreign exchange contracts and interest rate caps,
at the request of customers. Market risk arising from customer initiated
foreign exchange contracts is significantly minimized by entering into
offsetting transactions. Average fair values and income from customer
initiated and other foreign exchange contracts were not material for the
quarter ended June 30, 1996 and for the year ended December 31, 1995.
<PAGE>
<PAGE> 10
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 6 - Off-Balance-Sheet Derivatives and Foreign Exchange Contracts
(Continued)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Remaining Expected Maturity of Risk Management Interest Rate Swaps:
2001- Dec. 31,
(dollar amounts in millions) 1996 1997 1998 1999 2000 2014 Total 1995
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Variable rate asset
designation:
Receive fixed swaps
Generic $ 50 $ - $ - $ - $ - $ - $ 50 $ 50
Amortizing 8 84 100 - - - 192 200
Index Amortizing 361 1,486 881 1,087 672 850 5,337 3,688
Weighted average: (1)
Receive rate 6.38% 5.65% 6.25% 6.39% 6.16% 6.38% 6.13% 6.02%
Pay rate 5.45% 5.49% 5.50% 5.50% 5.49% 5.50% 5.49% 5.84%
Fixed rate asset designation:
Generic pay fixed swaps $ 35 $ - $ - $ 2 $ - $ - $ 37 $ 37
Weighted average: (1)
Receive rate 5.33% -% -% 5.77% -% -% 5.35% 5.76%
Pay rate 7.05% -% -% 8.73% -% -% 7.14% 7.14%
Medium- and long-term debt
designation:
Generic receive fixed swaps $ 300 $ 950 $ - $ - $200 $ 700 $2,150 $1,375
Weighted average: (1)
Receive rate 5.67% 5.76% -% -% 6.91% 7.65% 6.47% 7.01%
Pay rate 5.40% 5.40% -% -% 5.59% 5.53% 5.46% 5.80%
Generic pay fixed swaps $ 25 $ - $ - $ - $ - $ - $ 25 $ 25
Weighted average: (1)
Receive rate 5.81% -% -% -% -% -% 5.81% 5.70%
Pay rate 8.28% -% -% -% -% -% 8.28% 8.28%
Floating/Floating swaps $ 625 $ 400 $ - $ - $ - $ - $1,025 $ 550
Weighted average: (2)
Receive rate 5.37% 5.19% -% -% -% -% 5.30% 5.76%
Pay rate 5.40% 5.38% -% -% -% -% 5.39% 5.75%
Total notional amount $1,404 $2,920 $981 $1,089 $872 $1,550 $8,816 $5,925
- -----------------------------------------------------------------------------------------
(1) Variable rates are based on LIBOR rates paid or received at June 30, 1996.
(2) Variable rates paid are based on LIBOR at June 30, 1996, while variable rates
received are based on prime or LIBOR.
- -----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE> 11
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 6 - Off-Balance-Sheet Derivatives and Foreign Exchange Contracts
(Continued)
Customer initiated interest rate caps generally are not offset by
other on- or off-balance sheet financial instruments; however, authority
limits have been established for engaging in these transactions in order
to minimize risk exposure. As a result, average fair values and income
from this activity were not significant for the six-month period ended
June 30, 1996 and for the year ended December 31, 1995.
Available credit lines on fixed rate credit card and check product
accounts, which expose the Corporation to the risk of a reduction in net
interest income as rates increase, totaled approximately $2.1 billion at
June 30, 1996 and $2.0 billion at December 31, 1995. Market risk exposure
arising from these revolving credit commitments is very limited, however,
since it is unlikely that a significant number of customers with these
accounts will simultaneously borrow up to their maximum available credit
lines.
Off-Balance-Sheet Derivative and Foreign Exchange Activity
- ----------------------------------------------------------
The following table provides a reconciliation of the beginning and
ending notional amounts for interest rate derivatives and foreign exchange
contracts.
<TABLE>
<CAPTION>
Customer Initiated
Risk Management and Other
----------------------- -----------------------
Interest Foreign Interest Foreign
Rate Exchange Rate Exchange
(in millions) Contracts Contracts Contracts Contracts
----------------------- -----------------------
<S> <C> <C> <C> <C>
Balances at December 31, 1995 $ 6,119 $ 279 $ 363 $ 320
Additions 3,469 2,595 178 18,961
Maturities/amortizations (539) (2,323) (114) (18,451)
Terminations - - - -
------- ------- ----- --------
Balances at June 30, 1996 $ 9,049 $ 551 $ 427 $ 830
======= ======= ===== ========
</TABLE>
Additional information regarding the nature, terms and attendant risks of
the above off-balance sheet derivatives and foreign exchange contracts, along
with information on derivative accounting policies, can be found in the
Corporation's 1995 annual report on page 30 and in Notes 1 and 17 to the
consolidated financial statements.
<PAGE>
<PAGE> 12
ITEM 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition
-----------------------
Results of Operations
- ---------------------
Net income for the quarter ended June 30, 1996 was $118 million, up
$16 million, or 16 percent, from $102 million reported for the second
quarter of 1995. Net income per share increased 16 percent to $1.00 from
$0.86 a year ago. Return on average common shareholders' equity was 17.73
percent and return on average assets was 1.37 percent, compared to 16.02
percent and 1.19 percent, respectively, for the comparable quarter last
year.
Net income for the first six months of 1996 was $235 million or
$1.98 per share, compared to $202 million or $1.71 for the same period in
1995. Return on common equity was 17.50 percent and return on assets was
1.35 percent, compared to 16.28 percent and 1.20 percent, respectively,
for the first six months of 1995.
Acquisitions
- ------------
In January 1996, the Corporation completed the acquisition of
Metrobank, headquartered in Los Angeles, California, for $125 million of
common stock, in a transaction accounted for as a purchase. Metrobank
contributed total assets of $1.2 billion, loans of $700 million and
deposits of $1 billion, as well as nonperforming assets of $18 million.
Metrobank's results of operations are reflected in the consolidated
statement of income for the six months ended June 30, 1996.
Net Interest Income
- -------------------
The Rate-Volume Analyses in Table I details the components of the
change in net interest income (FTE) for the quarter ended June 30, 1996.
On a fully taxable equivalent (FTE) basis, net interest income was $361
million for the three months ended June 30, 1996, an increase of $32
million, or 10 percent, over the amount reported for the comparable
quarter in 1995. The improvement was primarily the result of loan growth,
both internally and through acquisitions, and an increase in the net
interest margin.
Average total loans for the second quarter of 1996 increased $2.1
billion, or 9 percent, over the second quarter of 1995, driven primarily
by growth in the commercial and commercial mortgage portfolios. Average
commercial loans rose $1.5 billion, or 13 percent, while average
commercial mortgage loans grew $372 million, or 12 percent. Average
investment securities were reduced $1.9 billion, or 32 percent, to allow
a shift in the mix of earning assets toward higher-yielding loans. This
shift was the primary factor in the rise in net interest margin. The net
interest margin for the three months ended June 30, 1996, was 4.55
percent, an increase of 40 basis points from 4.15 percent for the second
quarter of 1995.
Table II provides an analysis of net interest income for the first
six months of 1996. On an FTE basis, net interest income for the six
months ended June 30, 1996 was $714 million compared to $647 million for
the same period in 1995. This increase was due to the same factors
indicated in the quarterly discussion. Average total loans increased $2.4
billion for the first six months of 1996 compared to the first six months
of 1995. The net interest margin for the six months ended June 30, 1996
was 4.47 percent compared to 4.16 percent for the same period in 1995.<PAGE>
<PAGE> 13
Net income generated by the risk management interest rate swap
portfolio resulted in a contribution of 18 basis points to the net
interest margin in the second quarter of 1996, compared to a 3 basis-point
reduction in the year-earlier quarter. The contribution for the first six
months of 1996 was 15 basis points compared to a 3 basis point reduction
in 1995. Interest rate swaps permit management to control the sensitivity
of net interest income to fluctuations in interest rates in a manner
similar to on-balance sheet investment securities but without significant
impact to capital or liquidity. These instruments are designated against
certain assets and liabilities, therefore, their impact on net interest
income is generally offset by and should be considered in relation to the
level of net interest income generated by the related on-balance sheet
assets and liabilities.
In addition to using interest rate swaps and other off-balance sheet
instruments to control the Corporation's exposure to interest rate risk,
management attempts to minimize the effect of movements in interest rates
on net interest income by regularly performing interest sensitivity gap
and earnings simulation analyses. At June 30, 1996, the Corporation was
in a liability sensitive position of $671 million (on an elasticity-
adjusted basis), or 2 percent of earning assets. The earnings simulation
analysis performed at the end of the quarter covers the calendar year 1997
and reflects changes to both interest rates and loan, investment and
deposit volumes. For 1997, forecasted net interest income could decline
$16 million, or less than 2 percent, for a 200 basis point rise in short-
term interest rates. Given a 200 basis point decline in short-term
interest rates, forecasted net interest income could decline $20 million,
or less than 2 percent, due principally to an anticipated weaker economy
and lower loan volumes. These results are within established corporate
policy guidelines. The preceding forward-looking statements are based on
current expectations, but there are numerous factors that could cause
variances in these projections as economic, industry and competitive
conditions change.
Provision for Loan Losses
- -------------------------
The provision for loan losses for the second quarter of 1996 was $25
million, up $10 million from the second quarter of 1995. The provision
for the first six months of 1996 was $54 million compared to $28 for the
same period in 1995. The provision is predicated upon maintaining an
adequate allowance for loan losses, which is discussed in the section
entitled "Financial Condition."
Noninterest Income
- ------------------
Noninterest income was $121 million for the three months ended June
30, 1996, an increase of $22 million, or 2 percent, over the same period
in 1995. Excluding the effects of nonrecurring items, divestitures and
acquisitions, noninterest income rose $8 million for the second quarter of
1996, a 7 percent increase over the corresponding period in 1995. The
improvement in noninterest income was primarily attributable to a $3
million increase in service charges on retail and commercial deposits and
$3 million in securities gains. Other noninterest income grew in excess
of $3 million, or 10 percent, from the second quarter of 1995, benefiting
principally from a climb in fees and commissions generated by the
securities brokerage and insurance businesses. For the first six months
of 1996 noninterest income rose $14 million, or 6 percent, over the same
period in 1995, excluding nonrecurring items, divestitures and
acquisitions. Service charges and other noninterest income were the
primary contributors to this increase.
<PAGE>
<PAGE> 14
<TABLE>
TABLE I - QUARTERLY ANALYSIS OF NET INTEREST INCOME & RATE/VOLUME (FTE)
<CAPTION>
Three Months Ended
-------------------------------------------------------------
June 30, 1996 June 30, 1995
----------------------------- -----------------------------
Average Average Average Average
(in millions) Balance Interest Rate Balance Interest Rate
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Loans $25,592 $542 8.51% $23,505 $530 9.03%
Investment securities 5,895 101 6.78 7,814 130 6.64
Other earning assets 202 3 5.77 342 6 6.71
- ----------------------------------------------------------------------------------------------
Total earning assets 31,689 646 8.17 31,661 666 8.42
Interest-bearing deposits 16,918 172 4.09 16,916 182 4.33
Short-term borrowings 3,938 51 5.28 5,436 82 6.05
Medium- and long-term debt 4,986 76 6.13 4,359 70 6.42
Net interest rate swap
(income)/expense (1) - (14) - - 3 -
- ----------------------------------------------------------------------------------------------
Total interest-bearing
sources $25,842 285 4.45 $26,711 337 5.06
-------------- ---------------
Net interest income/
Rate spread (FTE) $361 3.72 $329 3.36
==== ====
FTE adjustments $ 4 $ 6
==== ====
Impact of net noninterest-bearing
sources of funds 0.83 0.79
- ----------------------------------------------------------------------------------------------
Net interest margin as a percent of
average earning assets (FTE) 4.55% 4.15%
==============================================================================================
(1) After allocation of the income or expense generated by interest rate swaps for the three
months ended June 30, 1996, to the related assets and liabilities, the average yield on total loans
was 8.66 percent as of June 30, 1996, compared to 8.93 percent a year ago. The average cost of
funds for medium- and long-term debt was 5.74 percent as of June 30, 1996, compared to 6.19 percent
a year earlier.
Increase Increase
(Decrease) (Decrease) Net
Due to Due to Increase
Rate Volume* (Decrease)
---------- ---------- ----------
(in millions)
Loans $(31) $ 43 $ 12
Investment securities 3 (32) (29)
Other earning assets (1) (2) (3)
----------------------------
Total earning assets (29) 9 (20)
Interest-bearing deposits (10) - (10)
Short-term borrowings (11) (20) (31)
Medium- and long-term debt (3) 9 6
Net interest rate swap
(income)/expense (17) - (17)
----------------------------
Total interest-bearing sources (41) (11) (52)
----------------------------
Net interest income/Rate spread (FTE) $ 12 $ 20 $ 32
============================
* Rate/Volume variances are allocated to variances due to volume.
/TABLE
<PAGE>
<PAGE> 15
<TABLE>
TABLE II - YEAR-TO-DATE ANALYSIS OF NET INTEREST INCOME & RATE/VOLUME (FTE)
<CAPTION>
Six Months Ended
-------------------------------------------------------------
June 30, 1996 June 30, 1995
----------------------------- -----------------------------
Average Average Average Average
(in millions) Balance Interest Rate Balance Interest Rate
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Loans $25,368 $1,080 8.56% $22,938 $1,022 8.96%
Investment securities 6,423 218 6.75 7,816 259 6.61
Other earning assets 225 7 6.17 359 12 6.67
- ----------------------------------------------------------------------------------------------
Total earning assets 32,016 1,305 8.17 31,113 1,293 8.34
Interest-bearing deposits 17,154 353 4.14 16,849 354 4.24
Short-term borrowings 4,289 114 5.36 5,160 153 5.97
Medium- and long-term debt 4,797 147 6.17 4,197 134 6.45
Net interest rate swap
(income)/expense (1) - (23) - - 5 -
- ----------------------------------------------------------------------------------------------
Total interest-bearing
sources $26,240 591 4.53 $26,206 646 4.97
----------------- ------------------
Net interest income/
Rate spread (FTE) $ 714 3.64 $ 647 3.37
====== ======
FTE adjustment $ 8 $ 12
====== ======
Impact of net noninterest-bearing
sources of funds 0.83 0.79
- ----------------------------------------------------------------------------------------------
Net interest margin as a percent of
average earning assets (FTE) 4.47% 4.16%
==============================================================================================
(1) After allocation of the income or expense generated by interest rate swaps for the six
months ended June 30, 1996, to the related assets and liabilities, the average yield on total
loans was 8.68 percent as of June 30, 1996, compared to 8.82 percent a year ago. The average
cost of funds for medium- and long-term debt was 5.79 percent as of June 30, 1996, compared to
6.17 percent a year earlier.
Increase Increase
(Decrease) (Decrease) Net
Due to Due to Increase
Rate Volume* (Decrease)
---------- ---------- ----------
(in millions)
Loans $(43) $101 $ 58
Investment securities 6 (47) (41)
Other earning assets (2) (3) (5)
----------------------------
Total earning assets (39) 51 12
Interest-bearing deposits (7) 6 (1)
Short-term borrowings (15) (24) (39)
Medium- and long-term debt (6) 19 13
Net interest rate swap
(income)/expense (28) - (28)
----------------------------
Total interest-bearing sources (56) 1 (55)
----------------------------
Net interest income/Rate spread (FTE) $ 17 $ 50 $ 67
============================
* Rate/Volume variances are allocated to variances due to volume.
/TABLE
<PAGE>
<PAGE> 16
Noninterest Expenses
- --------------------
Noninterest expenses decreased 1 percent, or $2 million, to $270
million for the three months ended June 30, 1996. This total includes $3
million in charges related to the Corporation's previously announced
internal efficiency improvement program. After adjusting for the effects
of acquisitions, divestitures, the reduction in FDIC insurance expenses,
and the aforementioned charges, noninterest expenses increased less than
1 percent, or $2 million. This nominal increase in noninterest expenses
reflects management's efforts to maintain a stable operating expense
level.
Excluding the effects of acquisitions, divestitures, the reduction
in FDIC expense, and nonrecurring items, noninterest expense for the first
six months of 1996 remained relatively unchanged compared to the same
period in 1995.
Provision for Income Taxes
- --------------------------
The provision for income taxes for the second quarter of 1996
totaled $64 million, an increase of 23 percent compared to $52 million
reported for the same period a year ago. The effective tax rate increased
to 35 percent for the second quarter of 1996 from 34 percent for the
second quarter of 1995, as a result of lower tax-exempt income.
Financial Condition
- -------------------
Total assets were $35.4 billion at June 30, 1996, or essentially
unchanged since December 31, 1995. Earning assets grew 1 percent to $32.4
billion since year-end 1995, as $1.0 billion of investment securities were
sold to partially fund the $1.6 billion, or 6 percent, increase in loans
during the first six months of the year. Loan growth 1996 has been
concentrated in the commercial and commercial mortgage loan categories,
which rose $1.2 billion, or 10 percent, and $349 million, or 11 percent,
respectively, since December 31, 1995.
Total liabilities fell $342 million, or 2 percent, to $32.5 billion
since December 31, 1995, primarily due to a $1.6 billion decrease in
foreign office deposits and an $529 million reduction in short-term
borrowings. The overall decline in liabilities was net of a $1.4 billion
increase in domestic deposits, reflecting the Metrobank acquisition.
Allowance for Loan Losses and Nonperforming Assets
- --------------------------------------------------
Management determines the adequacy of the allowance for loan losses
by applying projected loss ratios to the risk-ratings of loans, both
individually and by category. The projected loss ratios incorporate such
factors as recent loan loss experience, current economic conditions and
trends, geographic dispersion of borrowers, trends in past due and
nonaccrual amounts, risk characteristics of various categories and
concentrations of loans, and transfer risks.
<PAGE>
<PAGE> 17
At June 30, 1996, the allowance for loan losses was $365 million, an
increase of $23 million, or 7 percent, since December 31, 1995. The
allowance as a percentage of total loans remained constant at 1.40 percent
since December 31, 1995. As a percentage of total nonperforming assets,
the allowance increased from 209 percent at year-end 1995 to 227 percent
at June 30, 1996.
Net charge-offs for the second quarter of 1996 were $18 million, or
0.28 percent of average total loans, compared with $13 million, or 0.22
percent, for the year-earlier quarter. The rise in total net charge-offs
over the second quarter last year was primarily the result of credit card
charge-offs increasing in the base portfolio and 1995 special credit card
promotions. An analysis of the allowance for loan losses is presented in
the notes to the consolidated financial statements.
Despite the addition of $18 million in nonperforming assets from the
Metrobank transaction, total nonperforming assets have declined slightly
since December 31, 1995, and were categorized as follows:
<TABLE>
<CAPTION>
June 30, December 31,
(in thousands) 1996 1995
------------- ------------
<S> <C> <C>
Nonaccrual loans:
Commercial $ 82,702 $ 87,195
Real estate construction 4,713 6,578
Commercial mortgage 25,809 31,123
Residential mortgage 5,143 5,507
------------- ------------
Total nonaccrual loans 118,367 130,403
Reduced-rate loans 7,203 3,244
------------- ------------
Total nonperforming loans 125,570 133,647
Other real estate 34,770 29,384
------------- ------------
Total nonperforming assets $ 160,340 $ 163,031
============= ============
Loans past due 90 days or more $ 60,102 $ 57,134
============= ============
</TABLE>
Nonperforming assets as a percentage of total loans and other real
estate at June 30, 1996 and December 31, 1995, were 0.62 percent and 0.67
percent, respectively.
Capital
- -------
Common shareholders' equity was up $86 million from December 31,
1995 to June 30, 1996, excluding the change in unrealized losses on
investment securities available for sale. The increase was due to
retention of $149 million in earnings and the issuance of $125 million of
common stock in connection with the acquisition of Metrobank in January
1996, offset by the repurchase of 5 million shares of common stock under
various corporate programs.
<PAGE>
<PAGE> 18
During the second quarter, the Corporation issued 5 million shares
of Fixed/Adjustable Rate Noncumulative Preferred Stock, Series E, with a
stated value of $50 per share. Dividends are payable quarterly,
commencing October 1, 1996, at a rate of 6.84% per annum through July 1,
2001. Thereafter, the rate will be equal to .625% plus an effective rate,
but not less than 7.34% nor greater than 13.34%. The effective rate will
be equal to the highest of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Thirty Year Constant Maturity Rate (as defined in
the prospectus). The Corporation, at its option, may redeem all or part
of the outstanding shares on or after July 1, 2001.
Capital ratios continue to comfortably exceed minimum regulatory
requirements as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
Leverage ratio (3.00 - minimum) 7.72% 6.87%
Tier 1 risk-based capital
ratio (4.0 - minimum) 8.04 7.63
Total risk-based capital
ratio (8.0 - minimum) 11.39 11.21
</TABLE>
At June 30, 1996, the capital ratios of all the Corporation's
banking subsidiaries exceeded the minimum ratios required of a "well
capitalized" institution as defined in the final rule under FDICIA.
Other Matters
- -------------
On August 2, 1996, the Corporation sold its $1.4 billion Illinois
subsidiary, Comerica Bank-Illinois, for approximately $190 million in
cash.
On May 18, 1996, the Corporation sold the business and certain
assets of John V. Carr & Son, Inc., the wholly owned customs brokerage and
freight forwarding subsidiary of Comerica Bank.
In March 1996, the Corporation formed a strategic alliance with
National Data Corporation's subsidiary, National Data Payment Systems
(NDPS), to provide the Corporation's business customers with a
comprehensive line of merchant credit card processing systems and
services. The Corporation provides merchant contracts and multi-state
marketing opportunities to the new joint venture, Comerica Merchant
Alliance, while NDPS provides processing, settlement, authorization and
marketing support.
As disclosed in Part I, Item 3 of Form 10-K for the year ended
December 31, 1995, a lawsuit was filed on July 24, 1990, by the State of
Michigan against a subsidiary bank involving hazardous waste issues. The
Corporation's motion for summary judgment was granted in January 1993,
however, the State of Michigan has filed an appeal that is still pending.
Management believes that even if the summary judgment is not upheld on
appeal, the results of this action will not have a materially adverse
effect on the Corporation's consolidated financial position. Although,
depending upon the amount of the ultimate liability, if any, and the
consolidated results of operations in the year of final resolution, the
legal action may have a materially adverse effect on the consolidated
results of operation in that year.<PAGE>
<PAGE> 19
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
(11) Statement re: Computation of Earnings Per Share
(b) Reports on Form 8-K
June 18, 1996 - New Shareholder Rights Agreement
June 21, 1996 - Sale of 5,000,000 shares of Series E Preferred Stock
<PAGE>
<PAGE> 20
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
COMERICA INCORPORATED
--------------------------------------
(Registrant)
/s/Ralph W. Babb, Jr.
--------------------------------------
Ralph W. Babb, Jr.
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
/s/Arthur W. Hermann
--------------------------------------
Arthur W. Hermann
Senior Vice President and Controller
(Principal Accounting Officer)
Date: August 9, 1996
<PAGE>
<PAGE> 1
Exhibit (11) - Statement Re: Computation of Earnings Per Share
<TABLE>
COMPUTATION OF EARNINGS PER SHARE
Comerica Incorporated and Subsidiaries
<CAPTION>
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
------------------- -------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Primary:
Average shares outstanding 116,202 117,400 116,810 117,008
Common stock equivalent:
Net effect of the assumed
exercise of stock options 1,896 1,038 1,810 857
-------- -------- -------- --------
Primary average shares 118,098 118,438 118,620 117,865
======== ======== ======== ========
Net income $118,221 $101,532 $234,827 $201,554
-------- -------- -------- --------
Primary net income per share $1.00 $0.86 $1.98 $1.71
Fully diluted:
Average shares outstanding 116,202 117,400 116,810 117,008
Common stock equivalent:
Net effect of the assumed
exercise of stock options 1,982 1,237 2,014 1,176
-------- -------- -------- --------
Fully diluted average shares 118,184 118,637 118,824 118,184
======== ======== ======== ========
Net income $118,221 $101,532 $234,827 $201,554
Less preferred stock dividends - - - -
-------- -------- -------- --------
Net income applicable to common
stock $118,221 $101,532 $234,827 $201,554
======== ======== ======== ========
Fully diluted net income
per share $1.00 $0.86 $1.98 $1.71
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE JUNE 1996 FORM 10Q FOR COMERICA INCORPORATED AND SUBSIDIARIES
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,677,375
<INT-BEARING-DEPOSITS> 228,589
<FED-FUNDS-SOLD> 442,850
<TRADING-ASSETS> 5,032
<INVESTMENTS-HELD-FOR-SALE> 5,590,562
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 26,028,957
<ALLOWANCE> 364,601
<TOTAL-ASSETS> 35,386,127
<DEPOSITS> 22,948,339
<SHORT-TERM> 4,145,656
<LIABILITIES-OTHER> 380,908
<LONG-TERM> 5,045,054
<COMMON> 596,473
0
250,000
<OTHER-SE> 2,019,697
<TOTAL-LIABILITIES-AND-EQUITY> 35,386,127
<INTEREST-LOAN> 1,077,801
<INTEREST-INVEST> 212,004
<INTEREST-OTHER> 6,817
<INTEREST-TOTAL> 1,296,622
<INTEREST-DEPOSIT> 352,817
<INTEREST-EXPENSE> 590,872
<INTEREST-INCOME-NET> 705,750
<LOAN-LOSSES> 53,500
<SECURITIES-GAINS> 3,670
<EXPENSE-OTHER> 549,171
<INCOME-PRETAX> 361,297
<INCOME-PRE-EXTRAORDINARY> 234,827
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 234,827
<EPS-PRIMARY> 1.98
<EPS-DILUTED> 1.98
<YIELD-ACTUAL> 4.47
<LOANS-NON> 118,367
<LOANS-PAST> 60,102
<LOANS-TROUBLED> 7,203
<LOANS-PROBLEM> 394,354
<ALLOWANCE-OPEN> 341,344
<CHARGE-OFFS> 57,950
<RECOVERIES> 17,337
<ALLOWANCE-CLOSE> 364,601
<ALLOWANCE-DOMESTIC> 278,817
<ALLOWANCE-FOREIGN> 2,416
<ALLOWANCE-UNALLOCATED> 83,368
</TABLE>
