<PAGE> 1
FORM 10-Q/A
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 March 31, 1998
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 April 30, 1998: 156,612,000 shares
<PAGE>
<PAGE> 2
Explanatory Note
On May 15, 1998, Comerica Incorporated (the "Corporation") filed its
Quarterly Report on Form 10-Q for the quarterly period ended March 31,
1998, with the Securities and Exchange Commission (the "Commission").
The Corporation is now filing with the Commission its amended
Quarterly Report on Form 10-Q/A. The sole purpose for filing the amended
Quarterly Report is to correct for the inadvertent omission of footnote 5,
Income Taxes. Each of the other figures set forth in the Quarterly Report
on Form 10-Q is correct.
For ease of reference, this amended Quarterly Report contains all of
the information required to be set forth in a Quarterly Report on Form
10-Q.
<PAGE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
<TABLE>
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
<CAPTION>
March 31, December 31, March 31,
(In thousands, except share data) 1998 1997 1997
------------- ------------ -------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 1,883,135 $ 1,927,087 $ 1,703,871
Interest-bearing deposits with banks 3,671 3,319 66,847
Federal funds sold and securities
purchased under agreements to
resell 94,171 149,801 53,650
Trading account securities 4,064 9,102 6,319
Assets held for sale 2,132,337 40,735 30,970
Investment securities available
for sale 3,744,532 4,005,962 4,798,923
Commercial loans 16,498,894 15,805,549 14,158,843
International loans 2,084,372 2,085,090 1,933,784
Real estate construction loans 912,100 940,910 786,227
Commercial mortgage loans 3,696,455 3,633,785 3,509,272
Residential mortgage loans 1,462,667 1,565,445 1,722,274
Consumer loans 2,000,608 4,347,665 4,514,663
Lease financing 554,017 516,600 424,624
----------- ----------- -----------
Total loans 27,209,113 28,895,044 27,049,687
Less allowance for credit losses (429,648) (424,147) (391,418)
----------- ----------- -----------
Net loans 26,779,465 28,470,897 26,658,269
Premises and equipment 362,905 380,157 397,955
Customers' liability on acceptances
outstanding 12,081 18,392 34,692
Accrued income and other assets 1,475,990 1,286,946 1,116,212
----------- ----------- -----------
TOTAL ASSETS $36,492,351 $36,292,398 $34,867,708
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits (noninterest-
bearing) $ 6,211,420 $ 6,761,202 $ 6,491,323
Interest-bearing deposits 16,981,882 15,825,115 15,656,476
----------- ----------- -----------
Total deposits 23,193,302 22,586,317 22,147,799
Federal funds purchased and
securities sold under
agreements to repurchase 2,387,061 592,860 1,500,964
Other borrowed funds 914,094 2,600,041 2,663,017
Acceptances outstanding 12,081 18,392 34,692
Accrued expenses and other
liabilities 422,111 446,625 459,716
Medium- and long-term debt 6,736,815 7,286,387 5,492,082
----------- ----------- -----------
Total liabilities 33,665,464 33,530,622 32,298,270
Nonredeemable preferred stock
- $50 stated value:
Authorized - 5,000,000 shares
Issued - 5,000,000 shares at
3/31/98, 12/31/97 and 3/31/97 250,000 250,000 250,000
Common stock - $5 par value:
Authorized - 250,000,000 shares
Issued-157,188,873 shares at
3/31/98, 156,815,367 shares at
12/31/97 and 105,861,240 shares
at 3/31/97 785,944 784,077 529,306
Capital surplus 12,906 - -
Unrealized gains and losses on
investment securities available
for sale 4,425 (1,937) (49,847)
Retained earnings 1,814,056 1,731,419 1,842,488
Deferred compensation (1,570) (1,783) (2,509)
Less cost of common stock in
treasury- 578,661 shares at
03/31/98 (38,874) - -
----------- ----------- -----------
Total shareholders' equity 2,826,887 2,761,776 2,569,438
----------- ----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $36,492,351 $36,292,398 $34,867,708
=========== =========== ===========
/TABLE
<PAGE>
<PAGE> 4
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
<CAPTION>
Three Months Ended
March 31
--------------------
(In thousands, except per share data) 1998 1997
-------- --------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $606,990 $545,572
Interest on investment securities:
Taxable 62,306 76,483
Exempt from federal income tax 2,093 3,055
-------- --------
Total interest on investment
securities 64,399 79,538
Trading account interest 44 65
Interest on federal funds sold and
securities purchased under agreements
to resell 1,560 728
Interest on time deposits with banks 42 747
Interest on assets held for sale 826 593
-------- --------
Total interest income 673,861 627,243
INTEREST EXPENSE
Interest on deposits 167,137 159,666
Interest on short-term borrowings:
Federal funds purchased and securities
sold under agreements to repurchase 30,597 28,450
Other borrowed funds 13,249 26,989
Interest on medium- and long-term debt 109,828 75,681
Net interest rate swap income (12,558) (15,328)
-------- --------
Total interest expense 308,253 275,458
-------- --------
Net interest income 365,608 351,785
Provision for credit losses 28,000 41,000
-------- --------
Net interest income after
provision for credit losses 337,608 310,785
NONINTEREST INCOME
Income from fiduciary activities 40,735 33,076
Service charges on deposit accounts 38,450 34,954
Securities gains/(losses) (1,150) 122
Other noninterest income 56,817 61,242
-------- --------
Total noninterest income 134,852 129,394
NONINTEREST EXPENSES
Salaries and employee benefits 134,767 132,915
Net occupancy expense 22,761 23,292
Equipment expense 15,124 16,068
Telecommunications expense 6,622 7,144
Other noninterest expenses 70,599 69,318
-------- --------
Total noninterest expenses 249,873 248,737
-------- --------
Income before income taxes 222,587 191,442
Provision for income taxes 78,204 67,670
-------- --------
NET INCOME $144,383 $123,772
======== ========
Net income applicable to common stock $140,108 $119,497
======== ========
Basic net income per common share $ 0.89 $ 0.75
Diluted net income per common share $ 0.88 $ 0.74
Cash dividends declared on common stock $ 50,191 $ 45,682
Dividends per common share $ 0.32 $ 0.29
</TABLE>
<PAGE>
<PAGE> 5
<TABLE>
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Comerica Incorporated and Subsidiaries
<CAPTION>
Nonredeem-
able Unrealized Total
Preferred Common Capital Gains/ Retained Deferred Treasury Shareholders'
(in thousands) Stock Stock Surplus (Losses) Earnings Compensation Stock Equity
--------- --------- --------- ---------- ---------- ------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCES AT JANUARY 1, 1997 $250,000 $536,487 $ - $ (22,789) $1,854,116 $ (2,245) $ - $2,615,569
Net income for 1997 - - - - 123,772 - - 123,772
Nonowner changes in equity:
Unrealized holding
gains/(losses) arising
during the period - - - (41,506) - - - (41,506)
Less: Reclassification
adjustment for gains/
(losses) included in
net income - - - 122 - - - 122
Nonowner changes in equity
before income taxes - - - (41,628) - - - (41,628)
Provision for income taxes
related to nonowner changes
in equity - - - (14,570) - - - (14,570)
Nonowner changes in equity,
net of tax - - - (27,058) - - - (27,058)
Net income and nonowner changes
in equity - - - - - - - 96,714
Cash dividends declared:
Preferred stock - - - - (4,275) - - (4,275)
Common stock - - - - (45,682) - - (45,682)
Purchase and retirement of
1,810,250 shares of common
stock - (9,051) - - (98,495) - - (107,546)
Issuance of common stock under
employee stock plans - 1,870 - - 13,052 (530) - 14,392
Amortization of deferred
compensation - - - - - 266 - 266
-------- -------- --------- --------- ---------- --------- -------- ----------
BALANCES AT MARCH 31, 1997 $250,000 $529,306 $ - $ (49,847) $1,842,488 $ (2,509) $ - $2,569,438
======== ======== ========= ======== ========== ========= ======== ==========
BALANCES AT JANUARY 1, 1998 $250,000 $784,077 $ - $ (1,937) $1,731,419 $ (1,783) $ - $2,761,776
Net income for 1998 - - - - 144,383 - - 144,383
Nonowner changes in equity:
Unrealized holding gains/
(losses) arising during
the period - - - 8,638 - - - 8,638
Less: Reclassification
adjustment for gains/
(losses) included in net
income - - - (1,150) - - - (1,150)
Nonowner changes in equity
before income taxes - - - 9,788 - - - 9,788
Provision for income taxes
related to nonowner changes
in equity - - - 3,426 - - - 3,426
Nonowner changes in equity,
net of tax - - - 6,362 - - - 6,362
Net income and nonowner changes
in equity - - - - - - - 150,745
Cash dividends declared:
Preferred stock - - - - (4,275) - - (4,275)
Common stock - - - - (50,173) - - (50,173)
Purchase of 729,450 shares of
common stock - - - - - - (48,847) (48,847)
Purchase and retirement of
60,000 shares of common stock - (300) (3,182) - - - - (3,482)
Issuance of common stock under
employee stock plans - 2,167 16,088 - (7,298) - 9,973 20,930
Amortization of deferred
compensation - - - - - 213 - 213
-------- -------- --------- --------- ---------- --------- -------- ----------
BALANCES AT MARCH 31, 1998 $250,000 $785,944 $ 12,906 $ 4,425 $1,814,056 $ (1,570) $(38,874) $2,826,887
======== ======== ========= ========= ========== ========== ======== ==========
/TABLE
<PAGE>
<PAGE> 6
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Comerica Incorporated and Subsidiaries
<CAPTION>
Three Months Ended
March 31
---------------------------
(in thousands) 1998 1997
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 144,383 $ 123,772
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for credit losses 28,000 41,000
Depreciation 14,115 15,359
Restructuring charge (7,775) (15,386)
Net (increase) decrease in trading
account securities 5,038 (310)
Net (increase) decrease in assets held
for sale (28,665) 7,099
Net (increase) decrease in accrued income
receivable 16,985 (11,091)
Net increase in accrued expenses 332 15,835
Net amortization of intangibles 6,731 7,111
Other, net (241,992) 59,319
------------ ------------
Total adjustments (207,231) 118,936
------------ ------------
Net cash provided by (used in)
operating activities (62,848) 242,708
INVESTING ACTIVITIES:
Net increase in interest-bearing
deposits with banks (352) (39,518)
Net (increase) decrease in federal funds sold
and securities purchased under agreements
to resell 55,630 (21,450)
Proceeds from sale of investment securities
available for sale 17,193 12,818
Proceeds from maturity of investment
securities available for sale 239,364 211,261
Purchases of investment securities
available for sale (7,103) (305,321)
Net increase in loans (other than purchased
loans) (365,180) (826,082)
Purchase of loans (1,115) (33,644)
Fixed assets, net (4,461) (5,651)
Net (increase) decrease in customers' liability
on acceptances outstanding 6,311 (1,590)
------------ ------------
Net cash used in investing activities (59,713) (1,009,177)
FINANCING ACTIVITIES:
Net increase (decrease) in deposits 606,985 (219,374)
Net increase (decrease) in short-term borrowings 108,254 (325,210)
Net increase (decrease) in acceptances
outstanding (6,311) 1,590
Proceeds from issuance of medium- and
long-term debt 800,000 1,450,000
Repayments and purchases of medium- and
long-term debt (1,349,572) (199,687)
Proceeds from issuance of common stock
and other capital transactions 20,930 14,922
Purchase of common stock for treasury
and retirement (52,329) (107,546)
Dividends paid (49,348) (46,115)
------------ ------------
Net cash provided by
financing activities 78,609 568,580
------------ ------------
Net decrease in cash and due from banks (43,952) (197,889)
Cash and due from banks at beginning of year 1,927,087 1,901,760
------------ ------------
Cash and due from banks at end of period $ 1,883,135 $ 1,703,871
============ ============
Interest paid $ 356,163 $ 283,987
============ ============
Income taxes paid $ 233 $ 5,935
============ ============
Noncash investing and financing activities:
Loan transfers to assets held for sale $ 2,029,727 $ -
Loan transfers to other real estate 1,284 1,771
============ ============
</TABLE> <PAGE>
<PAGE> 7
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 three months ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1998. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
annual report of Comerica Incorporated and Subsidiaries (the
"Corporation") on Form 10-K for the year ended December 31, 1997.
Derivative financial instruments, including foreign exchange
contracts, may be used to manage the Corporation's exposure to interest
rate and foreign currency risks. These instruments are treated as hedges,
and accounted for on an accrual basis, since there is a high correlation
with the on-balance sheet instrument being hedged. If this correlation
ceases to exist, the existing unrealized gain or loss is amortized over
the remaining term of the instrument, and future changes in fair value are
accounted for on a mark-to-market basis. Derivative financial instruments
executed as a service to customers are accounted for on a mark-to-market
basis. For further information, refer to the Accounting Policies footnote
in the Corporation's 1997 annual report.
Note 2 - Investment Securities
At March 31, 1998, investment securities having a carrying value of
$2.5 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 $32 million.
Note 3 - Allowance for Credit Losses
The following analyzes the changes in the allowance for credit
losses included in the consolidated balance sheets:
<TABLE>
<CAPTION>
1998 1997
(in thousands) --------- ---------
<S> <C> <C>
Balance at January 1 $ 424,147 $ 367,165
Charge offs (32,838) (28,476)
Recoveries 10,339 11,729
--------- ---------
Net charge offs (22,499) (16,747)
Provision for credit losses 28,000 41,000
--------- ---------
Balance at March 31 $ 429,648 $ 391,418
========= =========
</TABLE>
Statement of Financial Accounting Standards (SFAS) No. 114,
"Accounting by Creditors for Impairment of a Loan," considers a loan
impaired when it is probable that interest and principal payments will not
be made in accordance with the contractual terms of the loan agreement.
<PAGE> 8
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 3 - Allowance for Credit Losses (continued)
Consistent with this definition, all nonaccrual and reduced-rate loans
(with the exception of residential mortgage and consumer loans) are
impaired. Impaired loans averaged $68 million for the quarter ended March
31, 1998, compared to $78 million for the comparable period last year.
The following are period-end balances:
<TABLE>
<CAPTION>
(in thousands) March 31, 1998 December 31, 1997
-------------- -----------------
<S> <C> <C>
Total impaired loans $63,406 $70,470
Impaired loans requiring
an allowance 52,718 60,376
Impairment allowance 10,013 20,358
</TABLE>
Those impaired loans not requiring an allowance represent loans for which
the fair value exceeded the recorded investment in the loan.
Note 4 - Medium- and Long-term Debt
Medium- and long-term debt consisted of the following at March 31,
1998 and December 31, 1997:
<TABLE>
<CAPTION>
(in thousands) March 31, 1998 December 31, 1997
-------------- -----------------
<S> <C> <C>
Parent Company
9.75% subordinated notes
due 1999 $ 74,900 $ 74,877
10.125% subordinated debentures
due 1998 74,986 74,965
7.25% subordinated notes due 2007 148,547 148,509
---------- ----------
Total parent company 298,433 298,351
Subsidiaries
Subordinated notes:
7.25% subordinated notes due 2007 198,150 198,100
7.875% subordinated notes due 2026 146,941 146,914
8.375% subordinated notes due 2024 147,957 147,938
7.25% subordinated notes due 2002 149,285 149,246
6.875% subordinated notes due 2008 99,238 99,220
7.125% subordinated notes due 2013 148,251 148,224
---------- ----------
Total subordinated notes 889,822 889,642
Medium-term notes:
Floating rate based on Treasury bill
indices 486,996 487,000
Floating rate based on Prime indices 1,000,000 1,100,007
Floating rate based on LIBOR indices 3,011,879 2,811,793
Floating rate based on Federal Funds
indices 200,000 349,998
Fixed rate notes with interest rates
ranging from 5.75% to 6.875% 849,685 1,349,596
---------- ----------
Total medium-term notes 5,548,560 6,098,394
Total subsidiaries 6,438,382 6,988,036
---------- ----------
Total medium- and long-term
debt $6,736,815 $7,286,387
========== ==========
/TABLE
<PAGE>
<PAGE> 9
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
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. State and foreign
taxes are then added to the federal provision.<PAGE>
<PAGE> 10
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 6 - Off-Balance Sheet Derivatives and Foreign Exchange Contracts
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
------------------------------ ------------------------------
Notional/ Notional/
Contract Unrealized Fair Contract Unrealized Fair
(in millions) Amount Gains Losses Value Amount Gains Losses Value
(1) (2) (3) (1) (2) (3)
------------------------------ ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Risk Management
Interest rate contracts
Swaps (4) $ 8,070 $138 $ (5) $ 133 $ 8,515 $137 $ (14) $ 123
Floors purchased 50 - - - 52 - - -
Caps written 1 - - - - - - -
Foreign exchange contracts
Spot and forward 397 11 (13) (2) 445 12 (9) 3
Swaps 145 3 - 3 154 5 - 5
------- ---- ----- ----- ------- ---- ----- -----
Total risk management 8,663 152 (18) 134 9,166 154 (23) 131
Customer Initiated and
Other
Interest rate contracts
Caps written 301 - (1) (1) 314 - - -
Caps and floors
purchased 160 1 - 1 32 - - -
Swaps 150 3 (3) - 150 6 (6) -
Foreign exchange contracts
Spot, forward
and options 1,625 6 (4) 2 1,837 37 (33) 4
------- ---- ----- ----- ------- ---- ----- -----
Total customer initiated
and other 2,236 10 (8) 2 2,333 43 (39) 4
------- ---- ----- ----- ------- ---- ----- -----
Total derivatives and
foreign exchange
contracts $10,899 $162 $ (26) $ 136 $11,499 $197 $ (62) $ 135
======= ==== ===== ===== ======= ==== ===== =====
(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 $3,126 million and $3,521 million
at March 31, 1998 and December 31, 1997, respectively. These swaps had net unrealized gains of
$4 million and net unrealized losses of $4 million at March 31, 1998 and December 31, 1997,
respectively. As of March 31, 1998 index amortizing swaps had an average expected life of
approximately 2 years with a stated maturity that averaged 4 years.
</TABLE>
<PAGE> 11
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). Management believes this strategy achieves 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, although there can be no assurance that such a strategy will be
successful.
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 March 31, 1998. The swaps are grouped by the assets or
liabilities to which they have been designated.
The Corporation also uses various other types of off-balance sheet
financial instruments 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 March 31, 1998 and December 31, 1997, the notional
amounts of commitments to purchase and sell U.S. Treasury and municipal
bond securities related to the Corporation's trading account totaled $65
million and $2 million, respectively; the notional amounts of commitments
to sell mortgage loans totaled $23 million and $30 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, interest rate caps and
forward rate agreements, at the request of customers. The Corporation
minimizes market risk arising from customer initiated foreign exchange
contracts and forward rate agreements 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
March 31, 1998 and for the year ended December 31, 1997.
<PAGE>
<PAGE> 12
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, the
Corporation has established authority limits 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
three-month period ended March 31, 1998 and for the year ended December
31, 1997.
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 $1.7 billion at
March 31, 1998 and $1.8 billion at December 31, 1997. Management believes
that 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.
<PAGE>
<PAGE> 13
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 Interest Rate Swaps:
(dollar amounts 2003- Dec. 31,
in millions) 1998 1999 2000 2001 2002 2026 Total 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Variable rate asset
designation:
Receive fixed swaps
Generic $ - $ - $ 700 $ 800 $ - $ - $ 1,500 $ 700
Amortizing - - - - - - - 100
Index amortizing 624 734 790 366 423 173 3,110 3,504
Weighted average: (1)
Receive rate 6.36% 6.36% 6.33% 6.12% 6.41% 6.20% 6.29% 6.33%
Pay rate 5.67% 5.66% 5.68% 5.68% 5.66% 5.69% 5.67% 5.90%
Floating/floating
swaps (3) $ - $ - $ 55 $ - $ - $ - $ 55 $ 55
Fixed rate asset
designation:
Pay fixed swaps
Generic $ - $ 2 $ - $ - $ - $ - $ 2 $ 2
Index amortizing 3 3 10 - - - 16 17
Weighted average: (1)
Receive rate 5.69% 5.78% 5.69% -% -% -% 5.72% 5.97%
Pay rate 5.34% 6.70% 5.34% -% -% -% 5.72% 5.85%
Medium- and long-term
debt designation:
Generic receive
fixed swaps $ 450 $ - $ 200 $ - $ 150 $ 900 $1,700 $2,200
Weighted average: (1)
Receive rate 6.03% -% 6.91% -% 7.37% 7.66% 7.11% 6.84%
Pay rate 5.52% -% 5.68% -% 5.85% 5.78% 5.70% 5.83%
Floating/floating
swaps $1,650 $ - $ 37 $ - $ - $ - $1,687 $1,937
Weighted average: (2)
Receive rate 5.69% -% 5.36% -% -% -% 5.68% 5.73%
Pay rate 5.62% -% 5.62% -% -% -% 5.62% 5.77%
Total notional amount $2,727 $ 739 $1,792 $1,166 $ 573 $1,073 $8,070 $8,515
(1) Variable rates are based on LIBOR rates paid or received at March 31, 1998.
(2) Variable rates paid are based on LIBOR at March 31, 1998, while variable rates received
are based on prime.
(3) Variable rates paid were 5.79%, based on LIBOR at March 31, 1998, while variable rates
received represent the return on principal only total return swaps. This return is
based on principal paydowns of the referenced securities as well as changes in market value.
/TABLE
<PAGE>
<PAGE> 14
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 6 - Off-Balance Sheet Derivatives and Foreign Exchange Contracts
(continued)
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, 1997 $ 8,567 $ 599 $ 496 $ 1,837
Additions 802 1,518 270 9,267
Maturities/amortizations (1,248) (1,575) (155) (9,479)
Terminations - - - -
------- ------- ------ -------
Balances at March 31, 1998 $ 8,121 $ 542 $ 611 $ 1,625
======= ======= ====== =======
</TABLE>
Additional information regarding the nature, terms and associated
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 1997 annual report on page 33 and in Notes
1 and 18 to the consolidated financial statements.
<PAGE>
<PAGE> 15
ITEM 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
-------------------
Results of Operations
- ---------------------
Net income for the quarter ended March 31, 1998 was $144 million, up
$20 million, or 17 percent, from $124 million reported for the first
quarter of 1997. Diluted net income per share increased 19 percent to
$0.88 from $0.74 a year ago. Return on average common shareholders'
equity was 22.09 percent and return on average assets was 1.61 percent,
compared to 20.41 percent and 1.46 percent, respectively, for the
comparable quarter last year.
On January 15, 1998, the Corporation's board of directors declared
a three-for-two stock split, effected in the form of a 50 percent stock
dividend paid on April 1, 1998, as well as increased the quarterly cash
dividend 12 percent to $0.32 per share. All per share data included in
the financial statements and managements discussion and analysis have been
retroactively adjusted to reflect the split.
Net Interest Income
- -------------------
The rate-volume analysis in Table I details the components of the
change in net interest income on a fully taxable equivalent (FTE) basis
for the quarter ended March 31, 1998. On a FTE basis, net interest income
was $368 million for the three months ended March 31, 1998, an increase of
$14 million over the comparable quarter in 1997.
The net interest margin for the three months ended March 31, 1998,
was 4.50 percent, a decrease of 9 basis points from 4.59 percent for the
first quarter of 1997. This decrease in net interest margin was primarily
due to a greater reliance on higher cost interest-bearing sources of funds
to support the growth in earning assets.
Net income generated by the risk management interest rate swap
portfolio resulted in a contribution of 15 basis points to the net
interest margin in the first quarter of 1998, compared to a 20 basis-point
contribution in the year-earlier quarter. 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 monitor the effect of movements in interest rates
on net interest income by regularly performing interest sensitivity gap
and earnings simulation analyses. At March 31, 1998, the Corporation was
in an asset sensitive position of $2.6 billion (on an elasticity adjusted
basis), or 8 percent of earning assets. The earnings simulation analysis
performed at the end of the quarter reflects changes to both interest
rates and loan, investment and deposit volumes. The measurement of risk
exposure at March 31, 1998 for a 200 basis point rise in short-term
interest rates identified approximately $9 million, or 1 percent, of net
interest income at risk during the next 12 months. If short-term interest
rates decline 200 basis points, the Corporation will have approximately
$40 million, or 3 percent, of net interest income at risk. These results
are within established corporate policy guidelines.<PAGE>
<PAGE> 16
<TABLE>
TABLE I - QUARTERLY ANALYSIS OF NET INTEREST INCOME & RATE/VOLUME (FTE)
<CAPTION>
Three Months Ended
-------------------------------------------------------------
March 31, 1998 March 31, 1997
----------------------------- -----------------------------
Average Average Average Average
(in millions) Balance Interest Rate Balance Interest Rate
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Loans $28,921 $608 8.50% $26,229 $547 8.43%
Investment securities 3,848 66 6.84 4,745 81 6.81
Other earning assets 168 2 5.97 141 2 6.17
- ----------------------------------------------------------------------------------------------
Total earning assets 32,937 676 8.30 31,115 630 8.17
Interest-bearing deposits 16,303 167 4.16 15,958 160 4.06
Short-term borrowings 3,206 44 5.55 4,249 55 5.29
Medium- and long-term debt 7,155 110 6.21 4,850 76 6.31
Net interest rate swap (income)/
expense (1) - (13) - - (15) -
- ----------------------------------------------------------------------------------------------
Total interest-bearing
sources $26,664 308 4.68 $25,057 276 4.45
----------------- -----------------
Net interest income/
Rate spread (FTE) $368 3.62 $354 3.72
====== ======
FTE adjustment $2 $2
====== ======
Impact of net noninterest-
bearing sources of funds 0.88 0.87
- ----------------------------------------------------------------------------------------------
Net interest margin as a percent
of average earning assets (FTE) 4.50% 4.59%
==============================================================================================
(1) After allocation of the income or expense generated by interest rate swaps for the three
months ended March 31, 1998, to the related assets and liabilities, the average yield on total
loans was 8.59 percent as of March 31, 1998, compared to 8.56 percent a year ago. The average cost
of funds for medium- and long-term debt was 5.83 percent as of March 31, 1998, compared to 5.77
percent a year earlier.
Increase Increase
(Decrease) (Decrease) Net
Due to Due to Increase
Rate Volume* (Decrease)
---------- ---------- ----------
(in millions)
Loans $ 8 $ 53 $ 61
Investment securities - (15) (15)
Other earning assets - - -
------------------------------
Total earning assets 8 38 46
Interest-bearing deposits 2 5 7
Short-term borrowings 3 (14) (11)
Medium- and long-term debt (1) 35 34
Net interest rate swap (income)/expense 2 - 2
------------------------------
Total interest-bearing sources 6 26 32
------------------------------
Net interest income/Rate spread (FTE) $ 2 $ 12 $ 14
==============================
* Rate/Volume variances are allocated to variances due to volume.
/TABLE
<PAGE>
<PAGE> 17
Provision for Credit Losses
- ---------------------------
The provision for credit losses for the first quarter of 1998 was
$28 million, an increase of $13 million from the first quarter of 1997.
The Corporation establishes this provision to maintain an adequate
allowance for credit losses, which is discussed in the section entitled
"Allowance for Credit Losses and Nonperforming Assets."
Noninterest Income
- ------------------
Noninterest income was $135 million for the three months ended March
31, 1998, an increase of $6 million, or 4 percent over the same period in
1997. Excluding the effect of certain large nonrecurring items,
principally a $17 million gain on the sale of the bond indenture services
business in the first quarter of 1997 and divestitures in both periods,
noninterest income increased 20 percent in the first quarter of 1998
compared to the first quarter of 1997. Accounting for the majority of
this increase were higher levels of fiduciary income, service charges and
retail and commercial fee income.
Noninterest Expenses
- --------------------
Noninterest expenses were $250 million for the quarter ended March
31, 1998, an increase of $1 million, or less than 1 percent, from the
first quarter of 1997. This nominal increase reflects management's
continued focus on efficiency and recognition of the positive effects of
Direction 2000: Phase III.
Provision for Income Taxes
- --------------------------
The provision for income taxes for the first quarter of 1998 totaled
$78 million, an increase of 16 percent compared to $68 million reported
for the same period a year ago. The effective tax rate was 35 percent for
the first quarter of both 1998 and 1997.
Strategic Lines of Business
- ---------------------------
The Corporation has strategically aligned its operations into three
major lines of business: the Business Bank, the Individual Bank and the
Investment Bank. The following table presents the financial results of
these business lines for the three months ended March 31, 1998 and 1997.
For a description of the business activities of each line of business and
the methodologies which form the basis for these results, refer to the
discussion entitled "Strategic Lines of Business" on page 26 of the
Corporation's 1997 annual report.
<PAGE>
<PAGE> 18
<TABLE>
Table II - Strategic Lines of Business Financial Results
<CAPTION>
Three Months Ended March 31
Business Individual Investment
Bank Bank Bank* Other Total
- -----------------------------------------------------------------------------------------------------------------
(in millions) 1998 1997 1998 1997 1998 1997 1998 1997 1998 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Average assets $21,538 $18,523 $9,356 $9,612 $ 35 $ 26 $4,979 $5,711 $35,908 $33,872
Total revenues (FTE) 207 183 254 249 28 24 13 28 502 484
Net income 86 74 55 44 2 1 1 5 144 124
Return on average
assets 1.60% 1.60% 1.21% 1.00% 21.93% 3.70% 0.05% 0.18% 1.61% 1.46%
Return on average
common equity 27.50% 28.85% 26.59% 22.84% 31.98% 14.82% 1.33% 3.86% 22.09% 20.41%
* Net income was reduced by charges for fees internally transferred to other lines of business for referrals to the
Investment Bank. If excluded, Investment Bank net income would have been $3 million and $1 million and return on
average common equity would have been 48.74% and 21.61%, in 1998 and 1997, respectively.
/TABLE
<PAGE>
<PAGE> 19
Financial Condition
- -------------------
Total assets were $36.5 billion at March 31, 1998, compared with
$36.3 billion at December 31, 1997. Included in "Assets held for sale" at
March 31, 1998, are approximately $2.1 billion of assets of the Individual
Bank which the Corporation intends to sell. These assets, which include
consumer loans, certain credit card receivables and mortgage servicing
rights are being carried at the lower of cost or market. No write-down
was necessary as a result of the reclassification. The section entitled
"Other Matters" discusses additional information regarding these asset
sales. The Corporation has continued to generate commercial loan growth
in 1998. Since December 31, 1997, commercial loans have increased $693
million, or 4 percent. Total loans decreased $1.7 billion, or 6 percent,
since year-end 1997 due to the reclassification of assets held for sale
discussed above. The increase in commercial loans was partially funded by
runoff of investment securities, which declined $261 million, or 7
percent, since December 31, 1997.
Total liabilities increased $135 million, or less than 1 percent, to
$33.7 billion since December 31, 1997. Interest-bearing deposits
increased $1.2 billion, or 7 percent, since December 31, 1997. This
increase was offset by declines of $550 million in both noninterest-
bearing deposits and medium- and long-term debt.
Allowance for Credit Losses and Nonperforming Assets
- ----------------------------------------------------
The Corporation maintains the allowance for credit losses at a level
that in management's judgement is adequate to provide for estimated
probable credit losses inherent in on- and off-balance sheet credit
exposure. The allowance for credit losses attributable to off-balance
sheet exposure is not material. Management determines the adequacy of the
allowance for credit 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 credit 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. However, the
Corporation cannot assure that the actual loss ratios will not vary from
those projected.
At March 31, 1998, the allowance for credit losses was $430 million,
an increase of $6 million, or 1 percent, since December 31, 1997. The
allowance as a percentage of total loans increased to 1.58 percent,
compared to 1.47 percent at December 31, 1997. As a percentage of total
nonperforming assets, the allowance increased from 413 percent at year-end
1997 to 488 percent at March 31, 1998.
Net charge-offs for the first quarter of 1998 were $22 million, or
0.31 percent of average total loans, compared with $17 million, or 0.26
percent, for the year-earlier quarter. An analysis of the allowance for
credit losses is presented in Note 5 to the consolidated financial
statements.
<PAGE>
<PAGE> 20
Nonperforming assets declined $15 million, or 14 percent, since
December 31, 1997, and were categorized as follows:
<TABLE>
<CAPTION>
(in thousands) March 31, 1998 December 31, 1997
-------------- -----------------
<S> <C> <C>
Nonaccrual loans:
Commercial $ 55,892 $ 58,914
International 500 1,000
Real estate construction 2,265 3,438
Commercial mortgage 9,765 11,088
Residential mortgage 5,024 3,719
--------- ---------
Total nonaccrual loans 73,446 78,159
Reduced-rate loans 8,207 7,583
--------- ---------
Total nonperforming loans 81,653 85,742
Other real estate 6,306 17,046
--------- ---------
Total nonperforming
assets $ 87,959 $ 102,788
========= =========
Loans past due 90 days or
more-domestic $ 61,110 $ 52,805
========= =========
</TABLE>
Nonperforming assets as a percentage of total loans and other real
estate at March 31, 1998 and December 31, 1997, were 0.32 percent and 0.36
percent, respectively.
Capital
- -------
Common shareholders' equity was up $59 million from December 31,
1997 to March 31, 1998, excluding the change in unrealized gains/(losses)
on investment securities available for sale. The increase was primarily
due to the retention of $90 million in earnings, offset by the repurchase
of 0.8 million shares of common stock under various corporate programs.
Capital ratios continue to comfortably exceed minimum regulatory
requirements as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------- -----------
<S> <C> <C>
Leverage ratio (3.00 - minimum) 7.21% 7.09%
Tier 1 risk-based capital
ratio (4.0 - minimum) 7.10 7.07
Total risk-based capital
ratio (8.0 - minimum) 11.10 11.14
</TABLE>
At March 31, 1998, 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.
<PAGE>
<PAGE> 21
Other Matters
- -------------
In April 1998, the Corporation completed the sale of $186 million of
its non-relationship credit card accounts and $1.8 billion of indirect
automobile and marine/RV loans. Combined with the sale of mortgage
servicing rights, for which an agreement has been signed but settlement
has yet to occur, the Corporation expects to record a nominal gain. These
assets were classified as "Assets held for sale" at March 31, 1998.
Included in Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition are forward-looking statements based
on current expectations or the assumptions made in the earnings simulation
analyses, but numerous factors could cause variances in these projections,
and their underlying assumptions, such as changes in interest rates and
the industries where the Corporation has a concentration of loans.
<PAGE>
<PAGE> 22
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
(11) Statement re: Computation of Earnings Per Share
(21) Subsidiaries of Registrant
(27) Financial Data Schedule
(b) Reports on Form 8-K
The Corporation did not file any reports on Form 8-K during the
three months ended March 31, 1998.
<PAGE>
<PAGE> 23
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/Marvin J. Elenbaas
--------------------------------------
Marvin J. Elenbaas
Senior Vice President and Controller
(Principal Accounting Officer)
Date: May 15, 1998<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
March 31
-------------------
1998 1997
-------- -------
<S> <C> <C>
Basic:
Average shares outstanding 156,717 159,901
Net income $144,383 $123,772
Less preferred stock dividends 4,275 4,275
-------- --------
Net income applicable to common stock $140,108 $119,497
======== ========
Basic net income per share $0.89 $0.75
Diluted
Average shares outstanding 156,717 159,901
Nonvested stock 190 208
Common stock equivalent:
Net effect of the assumed exercise
of stock options 2,861 2,290
-------- --------
Diluted average shares 159,768 162,399
======== ========
Net income $144,383 $123,772
Less preferred stock dividends 4,275 4,275
-------- --------
Net income applicable to common stock $140,108 $119,497
======== ========
Diluted net income per share $0.88 $0.74
</TABLE>
<PAGE>
<PAGE> 1
Exhibit (21) - Subsidiaries of Registrant
<TABLE>
<CAPTION>
Name State or Jurisdiction of Incorporation
- ---- --------------------------------------
or Organization
---------------
<S> <C>
Comerica Investment Services, Inc. Michigan
Comerica Capital Markets Corporation Michigan
Comerica Insurance Services, Inc. Michigan
Comerica Insurance Group, Inc. Michigan
Comerica Securities, Inc. Michigan
Wilson, Kemp & Associates, Inc. Michigan
WAM Holdings, Inc. Delaware
Comerica AutoLease, Inc. Michigan
VRB Corp. Michigan
Comerica International Corporation U.S.
Comerica International (Canada), Limited Ontario, Canada
Comerica International (Canada) Properties Ontario, Canada
Limited
Comerica Trust Company of Bermuda, Ltd. Bermuda
Comerica Holdings Incorporated Delaware
CMT Holdings, Inc. Texas
Comerica Merchant Services, Inc. Delaware
Interstate Select Insurance Services, Inc. California
Comerica Acceptance Corporation Michigan
Comerica Assurance Ltd Bermuda
Comerica Corporate Services Incorporated Michigan
Comerica Insurance Company Arizona
Comerica Properties Corporation Michigan
Professional Life Underwriters Services, Inc. Michigan
Comerica Trade Services Limited Hong Kong
Comerica Leasing Corporation Michigan
Comerica Management Co., Inc. Michigan
Munder UK, LLC Delaware
Comerica Networking, Inc. Michigan
Comerica England Branch Bermuda
Viyella Finance Bermuda
Comerica London Branch Bermuda
Comerica UK Branch Bermuda
Comerica West Incorporated Delaware
Comerica Bank-Mexico, S.A. Mexico
Comerica Bank-California California
Comerica Bank-Texas Texas
Comerica Bank & Trust, F.S.B. Florida
Comerica Bank-Midwest, N.A. United States
Comerica Bank-Ann Arbor, N.A. United States
Comerica Bank-Canada Canada
Comerica Bank Michigan
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE MARCH 1998 FORM 10-Q 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,883,135
<INT-BEARING-DEPOSITS> 3,671
<FED-FUNDS-SOLD> 94,171
<TRADING-ASSETS> 4,064
<INVESTMENTS-HELD-FOR-SALE> 3,744,532
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 27,209,113
<ALLOWANCE> 429,648
<TOTAL-ASSETS> 36,492,351
<DEPOSITS> 23,193,302
<SHORT-TERM> 3,301,155
<LIABILITIES-OTHER> 434,192
<LONG-TERM> 6,736,815
<COMMON> 785,944
0
250,000
<OTHER-SE> 1,790,943
<TOTAL-LIABILITIES-AND-EQUITY> 36,492,351
<INTEREST-LOAN> 606,990
<INTEREST-INVEST> 64,399
<INTEREST-OTHER> 2,472
<INTEREST-TOTAL> 673,861
<INTEREST-DEPOSIT> 167,137
<INTEREST-EXPENSE> 308,253
<INTEREST-INCOME-NET> 365,608
<LOAN-LOSSES> 28,000
<SECURITIES-GAINS> (1,150)
<EXPENSE-OTHER> 249,873
<INCOME-PRETAX> 222,587
<INCOME-PRE-EXTRAORDINARY> 144,383
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 144,383
<EPS-PRIMARY> 0.89
<EPS-DILUTED> 0.88
<YIELD-ACTUAL> 4.50
<LOANS-NON> 73,446
<LOANS-PAST> 61,110
<LOANS-TROUBLED> 8,207
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 424,147
<CHARGE-OFFS> 32,838
<RECOVERIES> 10,339
<ALLOWANCE-CLOSE> 429,648
<ALLOWANCE-DOMESTIC> 194,705
<ALLOWANCE-FOREIGN> 4,203
<ALLOWANCE-UNALLOCATED> 230,740
</TABLE>
