<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 March 31, 2000
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, 2000: 156,424,000 shares
<PAGE> 2
PART I. FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
<TABLE>
<CAPTION>
March 31, December 31, March 31,
(In thousands, except share data) 2000 1999 1999
------------- ------------ -------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 1,444,127 $ 1,201,990 $ 1,489,205
Short-term investments 204,075 612,959 84,275
Investment securities available
for sale 2,667,400 2,739,464 2,484,883
Commercial loans 21,472,144 20,654,658 19,361,893
International loans 2,565,966 2,573,003 2,677,582
Real estate construction loans 1,871,592 1,709,261 1,165,498
Commercial mortgage loans 4,981,168 4,774,052 4,361,292
Residential mortgage loans 849,359 870,029 975,321
Consumer loans 1,368,733 1,350,725 1,800,993
Lease financing 755,298 761,550 639,966
----------- ----------- -----------
Total loans 33,864,260 32,693,278 30,982,545
Less allowance for credit losses (502,954) (476,470) (452,936)
----------- ----------- -----------
Net loans 33,361,306 32,216,808 30,529,609
Premises and equipment 318,101 330,728 347,479
Customers' liability on acceptances
outstanding 17,179 43,810 11,374
Accrued income and other assets 1,648,126 1,507,573 1,500,717
----------- ----------- -----------
TOTAL ASSETS $39,660,314 $38,653,332 $36,447,542
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $ 6,342,570 $ 6,136,038 $ 6,701,698
Interest-bearing deposits 16,965,975 17,155,365 15,883,633
----------- ----------- -----------
Total deposits 23,308,545 23,291,403 22,585,331
Federal funds purchased and
securities sold under
agreements to repurchase 3,465,102 1,332,397 3,144,172
Other borrowed funds 879,555 1,435,634 389,594
Acceptances outstanding 17,179 43,810 11,374
Accrued expenses and other
liabilities 524,207 495,587 426,480
Medium- and long-term debt 7,900,388 8,579,857 6,731,749
----------- ----------- -----------
Total liabilities 36,094,976 35,178,688 33,288,700
Nonredeemable preferred stock
- $50 stated value:
Authorized - 5,000,000 shares
Issued - 5,000,000 shares at
3/31/00, 12/31/99 and 3/31/99 250,000 250,000 250,000
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued-157,233,107 shares at
3/31/00, 12/31/99 and 3/31/99 786,166 786,166 786,166
Capital surplus 36,440 35,092 30,729
Accumulated nonowner changes in equity (42,864) (31,702) (3,917)
Retained earnings 2,587,819 2,485,204 2,168,145
Deferred compensation (5,080) (2,955) (4,591)
Less cost of common stock in
treasury- 826,342 shares at
3/31/00, 715,496 shares at
12/31/99 and 1,026,993 shares
at 3/31/99 (47,143) (47,161) (67,690)
----------- ----------- -----------
Total shareholders' equity 3,565,338 3,474,644 3,158,842
----------- ----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $39,660,314 $38,653,332 $36,447,542
=========== =========== ===========
</TABLE>
<PAGE> 3
CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
<TABLE>
<CAPTION>
Three Months Ended
March 31
---------------------------
(In thousands, except per share data) 2000 1999
-------- --------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $693,840 $586,362
Interest on investment securities:
Taxable 47,803 39,717
Exempt from federal income tax 803 1,375
-------- --------
Total interest on investment
securities 48,606 41,092
Interest on short-term investments 17,419 1,981
-------- --------
Total interest income 759,865 629,435
INTEREST EXPENSE
Interest on deposits 169,171 149,674
Interest on short-term borrowings 52,459 45,372
Interest on medium- and long-term debt 129,952 84,431
Net interest rate swap (income)/expense 3,340 (18,874)
-------- --------
Total interest expense 354,922 260,603
-------- --------
Net interest income 404,943 368,832
Provision for credit losses 55,000 20,000
-------- --------
Net interest income after
provision for credit losses 349,943 348,832
NONINTEREST INCOME
Fiduciary and investment management
income 79,028 54,943
Service charges on deposit accounts 43,892 41,698
Commercial lending fees 11,215 9,896
Letter of credit fees 10,694 8,491
Securities gains 253 1,202
Other noninterest income 75,615 40,664
-------- --------
Total noninterest income 220,697 156,894
NONINTEREST EXPENSES
Salaries and employee benefits 168,001 152,483
Net occupancy expense 24,954 23,094
Equipment expense 15,074 14,851
Outside processing fee expense 12,332 12,854
Other noninterest expenses 75,662 60,132
-------- --------
Total noninterest expenses 296,023 263,414
-------- --------
Income before income taxes 274,617 242,312
Provision for income taxes 96,901 83,200
-------- --------
NET INCOME $177,716 $159,112
======== ========
Net income applicable to common stock $173,441 $154,837
======== ========
Basic net income per common share $1.11 $0.99
Diluted net income per common share $1.10 $0.98
Cash dividends declared on common stock $62,519 $56,149
Dividends per common share $0.40 $0.36
</TABLE>
<PAGE> 4
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Comerica Incorporated and Subsidiaries
<TABLE>
<CAPTION>
Nonredeem- Accumulated
able Nonowner Total
Preferred Common Capital Changes Retained Deferred Treasury Shareholders'
(in thousands) Stock Stock Surplus in Equity Earnings Compensation Stock Equity
--------- --------- --------- ---------- ---------- ------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCES AT JANUARY 1, 1999 $250,000 $786,165 $ 24,649 $ (6,455) $2,086,589 $ (5,202) $ (89,133) $3,046,613
Net income for 1999 - - - - 159,112 - - 159,112
Nonowner changes in equity,
net of tax - - - 2,538 - - - 2,538
----------
Net income and nonowner
changes in equity - - - - - - - 161,650
Cash dividends declared:
Preferred stock - - - - (4,275) - - (4,275)
Common stock - - - - (56,149) - - (56,149)
Purchase of 44,082 shares
of common stock - - - - - - (2,885) (2,885)
Net issuance of common stock
under employee stock plans - 1 6,080 - (17,132) 34 24,328 13,311
Amortization of deferred
compensation - - - - - 577 - 577
-------- -------- --------- --------- ---------- --------- --------- ----------
BALANCES AT MARCH 31, 1999 $250,000 $786,166 $ 30,729 $ (3,917) $2,168,145 $ (4,591) $ (67,690) $3,158,842
======== ======== ========= ========= ========== ========= ========= ==========
BALANCES AT JANUARY 1, 2000 $250,000 $786,166 $ 35,092 $ (31,702) $2,485,204 $ (2,955) $ (47,161) $3,474,644
Net income for 2000 - - - - 177,716 - - 177,716
Nonowner changes in equity,
net of tax - - - (11,162) - - - (11,162)
----------
Net income and nonowner
changes in equity - - - - - - - 166,554
Cash dividends declared:
Preferred stock - - - - (4,275) - - (4,275)
Common stock - - - - (62,519) - - (62,519)
Purchase of 331,362 shares
of common stock - - - - - - (13,112) (13,112)
Net issuance of common stock
under employee stock plans - - 1,348 - (8,307) (2,711) 13,130 3,460
Amortization of deferred
compensation - - - - - 586 - 586
-------- -------- --------- --------- ---------- --------- --------- ----------
BALANCES AT MARCH 31, 2000 $250,000 $786,166 $ 36,440 $ (42,864) $2,587,819 $ (5,080) $ (47,143) $3,565,338
======== ======== ========= ========= ========== ========= ========= ==========
</TABLE>
<PAGE> 5
CONSOLIDATED STATEMENTS OF CASH FLOWS
Comerica Incorporated and Subsidiaries
<TABLE>
<CAPTION>
Three Months Ended
March 31
---------------------------------
(in thousands) 2000 1999
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 177,716 $ 159,112
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for credit losses 55,000 20,000
Depreciation 13,861 14,193
Net (increase) decrease in trading account
securities 9,549 (1,827)
Net decrease in assets held for sale 20,635 26,225
Net increase in accrued income
receivable (18,087) (22,307)
Net increase in accrued expenses 3,984 56,088
Net amortization of intangibles 8,516 8,477
Other, net (90,951) (1,900)
------------ ------------
Total adjustments 2,507 98,949
------------ ------------
Net cash provided by
operating activities 180,223 258,061
INVESTING ACTIVITIES:
Net increase in interest-bearing deposits
with banks (21,678) (583)
Net (increase) decrease in federal funds sold and
securities purchased under agreements
to resell (56,383) 1,550
Proceeds from sale of investment securities
available for sale 1,408 2,849
Proceeds from maturity of investment
securities available for sale 112,955 235,613
Purchases of investment securities
available for sale (63,014) (6,785)
Net increase in loans (1,199,498) (397,155)
Fixed assets, net (1,234) (9,022)
Net decrease in customers' liability on
acceptances outstanding 26,631 961
Net cash provided by acquisitions/sales 445,274 -
------------ ------------
Net cash used in investing activities (755,539) (172,572)
FINANCING ACTIVITIES:
Net increase (decrease) in deposits 17,142 (1,727,802)
Net increase (decrease) in short-term borrowings 1,576,626 (46,387)
Net decrease in acceptances outstanding (26,631) (961)
Proceeds from issuance of medium- and
long-term debt 1,470,981 2,250,000
Repayments and purchases of medium- and
long-term debt (2,150,450) (800,510)
Proceeds from issuance of common stock
and other capital transactions 3,460 13,277
Purchase of common stock for treasury
and retirement (13,112) (2,885)
Dividends paid (60,563) (54,116)
------------ ------------
Net cash provided by (used in)
financing activities 817,453 (369,384)
------------ ------------
Net increase (decrease) in cash and due
from banks 242,137 (283,895)
Cash and due from banks at beginning of year 1,201,990 1,773,100
------------ ------------
Cash and due from banks at end of period $ 1,444,127 $ 1,489,205
============ ============
Interest paid $ 356,789 $ 260,974
============ ============
Income taxes paid $ 91,823 $ 645
============ ============
Noncash investing and financing activities:
Loan transfers to other real estate $ 1,796 $ 297
============ ============
</TABLE>
<PAGE> 6
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 1 - Basis of Presentation and Accounting Policies
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, 2000, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2000. Certain items in prior periods have been reclassified
to conform to the current presentation. 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, 1999.
The Corporation may use derivative financial instruments, including
foreign exchange contracts, 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 1999 annual
report.
<PAGE> 7
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 1 - Basis of Presentation and Accounting Policies (continued)
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities." The Statement will require the Corporation to recognize all
derivatives on the balance sheet at fair value. Derivatives that are not hedges
must be adjusted to fair value through income. If the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of derivatives
will either be offset against the change in fair value of the hedged assets,
liabilities, or firm commitments through earnings or recognized in accumulated
nonowner changes in equity until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be immediately
recognized in earnings.
In June 1999, the FASB issued Statement No. 137, "Accounting for
Derivative Instruments and Hedging Activities-Deferral of the Effective Date of
FASB Statement No. 133." Statement 137 amended the required effective date of
Statement 133, requiring adoption of Statement 133 in years beginning after June
15, 2000. The Corporation expects to adopt Statement 133 effective January 1,
2001. The Corporation is in the process of assessing what the effect of
Statement 133 will be on the earnings and financial position of the Corporation.
Note 2 - Investment Securities
At March 31, 2000, investment securities having a carrying value of
$1.8 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 $52 million.
<PAGE> 8
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
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>
(in thousands) 2000 1999
--------- ---------
<S> <C> <C>
Balance at January 1 $ 476,470 $ 452,409
Charge-offs (31,731) (24,710)
Recoveries 3,222 5,229
--------- ---------
Net charge-offs (28,509) (19,481)
Provision for credit losses 55,000 20,000
Foreign currency translation
adjustment (7) 8
--------- ---------
Balance at March 31 $ 502,954 $ 452,936
========= =========
</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. Consistent with this
definition, all nonaccrual and reduced-rate loans (with the exception of
residential mortgage and consumer loans) are impaired. Impaired loans averaged
$179 million for the three months ended March 31, 2000, compared to $131 million
for the comparable period last year. The following are period-end balances:
<TABLE>
<CAPTION>
(in thousands) March 31, 2000 December 31, 1999
-------------- -----------------
<S> <C> <C>
Total impaired loans $168,054 $159,165
Impaired loans requiring
an allowance 157,600 155,828
Impairment allowance 44,123 51,753
</TABLE>
Those impaired loans not requiring an allowance represent loans for which the
fair value exceeded the recorded investment in the loan.
<PAGE> 9
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 March 31, 2000
and December 31, 1999:
<TABLE>
<CAPTION>
(in thousands) March 31, 2000 December 31, 1999
--------------- -----------------
<S> <C> <C>
Parent Company
7.25% subordinated notes due 2007 $ 158,263 $ 158,543
Subsidiaries
Subordinated notes:
7.25% subordinated notes due 2007 198,552 198,502
7.875% subordinated notes due 2026 173,000 173,217
8.375% subordinated notes due 2024 155,233 155,287
7.25% subordinated notes due 2002 149,600 149,561
6.875% subordinated notes due 2008 103,616 103,729
7.125% subordinated notes due 2013 154,747 154,834
6.00% subordinated notes due 2008 248,066 248,010
---------- ----------
Total subordinated notes 1,182,814 1,183,140
Medium-term notes:
Floating rate based on Treasury bill
indices 37,000 37,000
Floating rate based on Prime indices 895,998 1,224,993
Floating rate based on LIBOR indices 5,412,418 5,762,320
Fixed rate notes with interest rate
of 6.65% 199,978 199,944
---------- ----------
Total medium-term notes 6,545,394 7,224,257
Notes payable 13,917 13,917
---------- ----------
Total subsidiaries 7,742,125 8,421,314
---------- ----------
Total medium- and long-term debt $7,900,388 $8,579,857
========== ==========
</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 income on
bank-owned life insurance and interest income on state and municipal securities.
State and foreign taxes are then added to the federal provision.
<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, 2000 December 31, 1999
-------------------------------------- ------------------------------------
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 swaps $ 8,923 $ 20 $ (191) $ (171) $ 8,518 $ 17 $ (172) $ (155)
Foreign exchange contracts:
Spot, forward and options 1,154 30 (28) 2 1,098 33 (23) 10
Swaps 115 -- (10) (10) 115 -- (5) (5)
------- -------- -------- -------- ------- ----- ------- --------
Total risk management 10,192 50 (229) (179) 9,731 50 (200) (150)
Customer-Initiated and Other
Interest rate contracts:
Caps and floors written 200 -- (1) (1) 166 -- (1) (1)
Caps and floors purchased 179 1 -- 1 141 1 -- 1
Swaps 292 3 (3) -- 256 2 (2) --
Foreign exchange contracts:
Spot, forward and options 656 14 (11) 3 579 14 (11) 3
------- -------- -------- -------- ------- ----- ------- --------
Total customer-initiated
and other 1,327 18 (15) 3 1,142 17 (14) 3
------- -------- -------- -------- ------- ----- ------- --------
Total derivatives and
foreign exchange contracts $11,519 $ 68 $ (244) $ (176) $10,873 $ 67 $ (214) $ (147)
======= ======== ======== ========= ======= ===== ======= ========
</TABLE>
(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.
<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 due to
differences in 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 derivative instruments for use principally
in connection with asset and liability management activities. The Corporation
principally utilizes interest rate swaps with the overall objective of
mitigating adverse impacts to net interest income from changes in interest
rates. To accomplish this objective, the Corporation uses interest rate swaps
primarily 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 Corporation also uses various other types of off-balance sheet
financial instruments to mitigate interest rate and foreign currency risks
associated with specific assets or liabilities, which are reflected in the table
above. Such instruments include interest rate caps and floors, foreign exchange
forward contracts, and foreign exchange cross-currency swaps.
<PAGE> 12
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 6 - Off-Balance Sheet Derivatives and Foreign Exchange Contracts
(continued)
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,
2000. The swaps are grouped by the assets or liabilities to which they have been
designated.
At March 31, 2000 and December 31, 1999, the notional amounts of
commitments to purchase and sell U.S. Treasury and municipal bond securities
related to the Corporation's trading account totaled $10 million and $4 million,
respectively. These commitments, which are similar in nature to forward
contracts, are not reflected in the preceding 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,
floors and swaps to accommodate the needs of customers requesting such services.
The Corporation minimizes market risk arising from customer-initiated foreign
exchange contracts by entering into offsetting transactions. Average fair values
and income from customer-initiated and other foreign exchange contracts were not
material for the three-month period ended March 31, 2000 and for the year ended
December 31, 1999.
Customer-initiated interest rate caps, floors and swaps 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 material for the three-month period ended March 31,
2000 and for the year ended December 31, 1999.
<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 Risk Management Interest Rate Swaps:
2005- Dec. 31,
(dollar amounts in millions) 2000 2001 2002 2003 2004 2026 Total 1999
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Variable rate asset
designation:
Receive fixed swaps
Generic $ 400 $3,250 $2,850 $ 600 $ - $ - $7,100 $6,800
Index amortizing 132 - - - - - 132 149
Weighted average: (1)
Receive rate 6.28% 5.68% 7.14% 10.01% -% -% 6.66% 6.36%
Pay rate 6.13% 6.09% 7.58% 8.86% -% -% 6.91% 6.71%
Fixed rate asset designation:
Pay fixed swaps
Generic $ 11 $ - $ - $ - $ - $ - $ 11 $ 13
Index amortizing 6 - - - - - 6 7
Amortizing - - 2 - - - 2 2
Weighted average: (1)
Receive rate 6.07% -% 5.36% -% -% -% 6.01% 6.37%
Pay rate 5.93% -% 6.05% -% -% -% 5.94% 5.93%
Fixed Rate Deposit
Designation:
Receive fixed swaps
Generic $ 46 $ 88 $ 1 $ - $ - $ - $ 135 $ 10
Weighted average:(1)
Receive rate 5.40% 6.93% 7.05% -% -% -% 6.42% 5.16%
Pay rate 2.44% 6.15% 6.15% -% -% -% 4.85% 5.01%
Medium- and long-term debt
designation:
Generic receive fixed swaps $ 200 $ - $ 150 $ - $ - $1,150 $1,500 $1,500
Weighted average: (1)
Receive rate 6.91% -% 7.37% -% -% 6.79% 6.86% 6.86%
Pay rate 6.10% -% 6.09% -% -% 6.15% 6.14% 5.95%
Floating/floating swaps $ 37 $ - $ - $ - $ - $ - $ 37 $ 37
Weighted average: (2)
Receive rate 6.47% -% -% -% -% -% 6.47% 5.93%
Pay rate 6.03% -% -% -% -% -% 6.03% 6.19%
Total notional amount $ 832 $3,338 $3,003 $ 600 $ - $1,150 $8,923 $8,518
- -------------------------------------------------------------------------------------------------
(1) Variable rates are based on LIBOR, CDOR or prime rates paid or received at March 31, 2000.
(2) Variable rates paid are based on LIBOR at March 31, 2000, while variable rates received are
based on the two-year Constant Treasury Maturity Rate.
- -------------------------------------------------------------------------------------------------
</TABLE>
<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) Swaps Contracts Contracts Contracts
--------------------- ---------------------
<S> <C> <C> <C> <C>
Balances at December 31, 1999 $ 8,518 $ 1,213 $ 563 $ 579
Additions 736 3,550 132 10,759
Maturities/amortizations (331) (3,494) (24) (10,682)
------- ------- ----- --------
Balances at March 31, 2000 $ 8,923 $ 1,269 $ 671 $ 656
======= ======= ===== ========
</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 1999 annual report on page 38 and in Notes 1 and 18 to the
consolidated financial statements.
Note 7 - Business Segment Information
The Corporation has strategically aligned its operations into three
major lines of business: the Business Bank, the Individual Bank and the
Investment Bank. These lines of business are differentiated based on the
products and services provided. In addition to the three major lines of
business, the Finance Division is also reported as a segment. Lines of business
results are produced by the Corporation's internal management
<PAGE> 15
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 7 - Business Segment Information (continued)
accounting system. This system measures financial results based on the internal
organizational structure of the Corporation; information presented is not
necessarily comparable with any other financial institution. Lines of
business/segment financial results for the three months ended March 31, 2000 and
1999 are presented below.
Three Months Ended March 31
<TABLE>
<CAPTION>
Business Individual Investment
Bank Bank Bank*
- ----------------------------------------------------------------------------
(dollar amounts
in millions) 2000 1999 2000 1999 2000 1999
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Average assets $27,941 $25,127 $7,031 $6,967 $ 405 $ 230
Total revenues (FTE) 273 238 293 235 63 41
Net income 111 75 93 57 6 2
Return on average
assets 1.59% 1.20% 2.02% 1.27% 5.89% 3.82%
Return on average
common equity 22.68% 20.08% 49.73% 32.48% 7.72% 4.57%
</TABLE>
<TABLE>
<CAPTION>
Finance Other Total
- ----------------------------------------------------------------------------
2000 1999 2000 1999 2000 1999
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Average assets $ 4,063 $ 3,971 $ (151) $(212) $39,289 $36,083
Total revenues (FTE) (2) 13 - - 627 527
Net income (2) 8 (30) 17 178 159
Return on average
assets (0.05)% 0.24% N/M N/M 1.81% 1.76%
Return on average
common equity (2.08)% 9.39% N/M N/M 21.35% 21.90%
</TABLE>
* 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 $9 million and $4 million, and
return on average common equity would have been 10.91% and 7.60%, in 2000
and 1999, respectively.
N/M - Not Meaningful
<PAGE> 16
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 7 - Business Segment Information (continued)
For a description of the business activities of each line of business and the
methodologies which form the basis for these results, refer to Note 22 to the
consolidated financial statements in the Corporation's 1999 annual report. The
financial results for Munder Capital Management, the Corporation's investment
advisory subsidiary, are included in results of the Investment Bank. Prior to
2000, the financial results for Munder were included in the Other category. For
comparability purposes, 1999 results for the Investment Bank and the Other
category have been restated to reflect this change in the organizational
structure of the Corporation.
<PAGE> 17
Notes to Consolidated Financial Statements
Comerica Incorporated and Subsidiaries
Note 8 - Nonowner Changes in Equity
Nonowner changes in equity include the change in unrealized gains and
losses on investment securities available for sale and the change in the
accumulated foreign currency translation adjustment. The Consolidated Statements
of Changes in Shareholders' Equity include only the combined, net of tax,
nonowner changes in equity. The following presents reconciliations of the
components of accumulated nonowner changes in equity for the three months ended
March 31, 2000 and 1999.
<TABLE>
<CAPTION>
Three Months Ended
March 31
--------------------
2000 1999
-------- --------
<S> <C> <C>
(in thousands)
Net unrealized gains (losses) on
investment securities available for sale:
Balance at beginning of year $(32,717) $(7,688)
Net unrealized holding gains (losses)
arising during the period (12,542) 5,946
Less: Reclassification adjustment for
gains (losses) included in net income 253 1,202
-------- -------
Change in net unrealized gains (losses)
before income taxes (12,795) 4,744
Provision for income taxes (4,414) 1,349
-------- -------
Change in net unrealized gains (losses)
on investment securities available
for sale, net of tax ( 8,381) 3,395
-------- -------
Balance at March 31 $(41,098) $(4,293)
Accumulated foreign currency translation adjustment:
Balance at beginning of year $ 1,015 $ 1,233
Net translation gains (losses) arising
during the period (2,781) (857)
Less: Reclassification adjustment for
gains (losses) included in net income - -
-------- -------
Change in translation adjustment before
income taxes (2,781) (857)
Provision for income taxes - -
-------- -------
Change in foreign currency translation
adjustment, net of tax (2,781) (857)
-------- -------
Balance at March 31 $ (1,766) $ 376
-------- -------
Total accumulated nonowner changes in
equity, net of taxes, at March 31 $(42,864) $(3,917)
======== =======
</TABLE>
<PAGE> 18
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, 2000, was $178 million, up $19
million, or 12 percent, from $159 million reported for the first quarter of
1999. Diluted net income per share increased 12 percent to $1.10 from $0.98 a
year ago. Return on average common shareholders' equity was 21.35 percent and
return on average assets was 1.81 percent, compared to 21.90 percent and 1.76
percent, respectively, for the comparable quarter last year.
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, 2000. On a FTE basis, net interest income was $406 million for
the three months ended March 31, 2000, an increase of $36 million, or 10
percent, from the comparable quarter in 1999. The increase in net interest
income was primarily due to a 12 percent increase in average corporate loans and
an increase in average common shareholders' equity. The net interest margin for
the three months ended March 31, 2000, was 4.47 percent, a decrease of 4 basis
points from 4.51 percent for the first quarter of 1999. The decrease in the net
interest margin was primarily due to a reduction in net interest rate swap
income and a greater reliance on medium- and long-term debt in the mix of
interest-bearing liabilities. This was partially offset by an increase in the
impact of net noninterest-bearing sources of funds. With core deposit balances
growing at rates slower than earning assets, a greater reliance on purchased
funds is expected, which will gradually reduce the margin.
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
<PAGE> 19
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 exposure to interest rate risk, management attempts to
evaluate the effect of movements in interest rates on net interest income by
regularly performing interest sensitivity gap and earnings simulation analyses.
At March 31, 2000, the Corporation was in an asset sensitive position of $773
million (on an elasticity adjusted basis), or two 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, 2000, for a 200 basis point decline in
short-term interest rates identified approximately $36 million, or two percent,
of forecasted net interest income at risk during the next 12 months. If
short-term interest rates rise 200 basis points, forecasted net interest income
at risk would be approximately $16 million, or one percent. The results of these
simulations are within established corporate policy guidelines.
<PAGE> 20
TABLE I - QUARTERLY ANALYSIS OF NET INTEREST INCOME & RATE/VOLUME (FTE)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------------------------------
March 31, 2000 March 31, 1999
----------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Average Average Average Average
(dollar amounts in millions) Balance Interest Rate Balance Interest Rate
- ----------------------------------------------------------------------------------------------
Loans $33,207 $694 8.41% $30,581 $587 7.77%
Investment securities 2,672 49 7.18 2,546 42 6.55
Other earning assets 539 18 12.96 99 2 8.21
- ----------------------------------------------------------------------------------------------
Total earning assets 36,418 761 8.38 33,226 631 7.68
Interest-bearing deposits 17,121 169 3.97 16,494 150 3.68
Short-term borrowings 3,482 53 6.06 3,769 45 4.88
Medium- and long-term debt 8,444 130 6.18 6,103 85 5.59
Net interest rate swap (income)/
expense (1) - 3 - - (19) -
- ----------------------------------------------------------------------------------------------
Total interest-bearing
sources $29,047 355 4.91 $26,366 261 4.00
-------------- ---------------
Net interest income/
Rate spread (FTE) $406 3.47 $370 3.68
==== ====
FTE adjustment $ 1 $ 1
==== ====
Impact of net noninterest-bearing
sources of funds 1.00 0.83
- ----------------------------------------------------------------------------------------------
Net interest margin as a percent of
average earning assets (FTE) 4.47% 4.51%
==============================================================================================
</TABLE>
(1) After allocation of the income or expense generated by interest rate swaps
for the three months ended March 31, 2000, to the related assets and
liabilities, the average yield on total loans was 8.33 percent as of March 31,
2000, compared to 7.97 percent a year ago. The average cost of funds for medium-
and long-term debt was 6.05 percent as of March 31, 2000, compared to 5.33
percent a year earlier.
<TABLE>
<CAPTION>
Increase Increase
(Decrease) (Decrease) Net
Due to Due to Increase
Rate Volume* (Decrease)
(in millions) ---------- ---------- ----------
<S> <C> <C> <C>
Loans $ 52 $ 55 $ 107
Investment securities 5 2 7
Other earning assets 1 15 16
------------------------------
Total earning assets 58 72 130
Interest-bearing deposits 10 9 19
Short-term borrowings 12 (4) 8
Medium- and long-term debt 10 35 45
Net interest rate swap
(income)/expense 22 - 22
------------------------------
Total interest-bearing sources 54 40 94
------------------------------
Net interest income/Rate spread (FTE) $ 4 $ 32 $ 36
==============================
</TABLE>
* Rate/Volume variances are allocated to variances due to volume.
<PAGE> 21
Provision for Credit Losses
The provision for credit losses was $55 million for the first quarter of
2000, compared to $20 million for the same period in 1999. 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 $221 million for the three months ended March 31,
2000, an increase of $64 million, or 41 percent, over the same period in 1999.
During the first quarter of 2000, the Corporation announced an alliance to
provide third party credit card and check-accessed line of credit services to
the Corporation's customers and sold $457 million of revolving check credit and
bankcard loans. A gain of approximately $30 million, net of costs incurred as a
result of the sale and the estimated fair value of recourse obligations inherent
in the agreement, was recognized in noninterest income in the first quarter
2000. Excluding the $30 million gain, noninterest income increased 21 percent in
the first quarter of 2000, compared to the first quarter of 1999. Strong
investment advisory fee growth of $23 million at Munder Capital Management
contributed to growth in noninterest income.
Noninterest Expenses
Noninterest expenses were $296 million for the first quarter ended March
31, 2000, an increase of $33 million, or 12 percent, from the first quarter of
1999. Salaries and benefits expense increased in the first quarter of 2000 over
the same quarter a year ago, due primarily to annual merit increases and higher
levels of revenue-related incentives.
Provision for Income Taxes
The provision for income taxes for the first quarter of 2000 totaled
<PAGE> 22
$97 million, an increase of 16 percent compared to $83 million reported for the
same period a year ago. The effective tax rate was 35 percent for the first
quarter of 2000 and 34 percent for the first quarter of 1999.
Financial Condition
Total assets were $39.7 billion at March 31, 2000, compared with $36.4
billion at March 31, 1999. The Corporation has continued to generate growth in
corporate loans in 2000. Since December 31, 1999, domestic commercial loans have
increased $817 million, or four percent, real estate construction loans have
increased $162 million, or nine percent, and commercial mortgage loans have
increased $207 million, or four percent. Short-term investments decreased $409
million from year-end 1999, due primarily to the sale of bankcard and revolving
check credit loans mentioned previously, which were classified as held for sale
at December 31, 1999.
Total liabilities increased $916 million, or three percent, since December
31, 1999 to $36.1 billion. Total deposits remained stable and totaled $23.3
billion at March 31, 2000 and December 31, 1999. Total short-term borrowings
increased $1.6 billion since year-end 1999 while medium- and long-term debt
decreased $679 million, or eight percent.
Allowance for Credit Losses and Nonperforming Assets
The allowance for credit losses represents management's assessment of
probable losses inherent in the Corporation's loan portfolio, including all
binding commitments to lend. The allowance provides for probable losses that
have been identified with specific customer relationships and for probable
losses believed to be inherent but that have not been specifically identified.
The Corporation allocates the allowance for credit losses to each loan category
based on a defined methodology which has been in use, without material change,
for several years. Internal risk ratings are assigned to each corporate loan at
the time of approval
<PAGE> 23
and are subject to subsequent periodic reviews by the senior management of the
Credit Policy Group. Corporate loans are defined as those belonging to the
commercial, international, real estate construction, commercial mortgage and
lease financing categories. A detailed credit quality review is performed
quarterly on large corporate loans which have deteriorated below certain levels
of credit risk. A specific portion of the allowance is allocated to such loans
based upon this review. The portion of the allowance allocated to the remaining
corporate loans is determined by applying projected loss ratios to each risk
rating based on numerous factors identified below. The portion of the allowance
allocated to consumer loans is determined by applying projected loss ratios to
various segments of the loan portfolio. Projected loss ratios incorporate
factors such as recent charge-off experience, current economic conditions and
trends, geographic dispersion of borrowers, and trends with respect to past due
and nonaccrual amounts. The allocated reserve was $271 million at March 31, 2000
and year-end 1999.
Actual loss ratios experienced in the future could vary from those
projected. This uncertainty occurs because other factors affecting the
determination of probable losses inherent in the loan portfolio may exist which
are not necessarily captured by the application of historical loss ratios. To
ensure a higher degree of confidence, an unallocated allowance is also
maintained. The unallocated portion of the loss reserve reflects management's
view that the reserve should have a margin that recognizes the imprecision
underlying the process of estimating expected credit losses. Determination of
the probable losses inherent in the portfolio, which are not necessarily
captured by the allocated methodology discussed above, involves the exercise of
judgement. Factors which were considered in the evaluation of the adequacy of
the Corporation's unallocated reserve include portfolio exposures to the
healthcare, high technology and energy industries, customers engaged in
sub-prime lending, as well as Indonesian and Latin American transfer risks and
the risk associated with new customer relationships. The unallocated allowance
was $232 million at
<PAGE> 24
March 31, 2000, an increase of $27 million from December 31, l999. This increase
in the unallocated allowance was primarily due to increases in loan balances to
healthcare customers and increased risk in the energy sector due to the
volatility of energy prices.
Management also considers industry norms and the expectations from rating
agencies and banking regulators in determining the adequacy of the allowance.
The total allowance, including the unallocated amount, is available to absorb
losses from any segment of the portfolio.
At March 31, 2000, the allowance for credit losses was $503 million, an
increase of $27 million since December 31, 1999. The allowance as a percentage
of total loans was 1.49 percent, compared to 1.46 percent at December 31, 1999.
As a percentage of nonperforming assets, the allowance was 264 percent at March
31, 2000, versus 262 percent at year-end 1999.
Net charge-offs for the first quarter of 2000 were $29 million, or 0.34
percent of average total loans, compared with $19 million, or 0.25 percent, for
the year-earlier quarter. An analysis of the allowance for credit losses is
presented in Note 5 to the year-end 1999 consolidated financial statements.
<PAGE> 25
Nonperforming assets increased $9 million, or five percent, since December
31, 1999, and were categorized as follows:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
(in thousands) ------------- ------------
<S> <C> <C>
Nonaccrual loans:
Commercial $ 127,974 $ 110,606
International 36,482 44,046
Real estate construction 249 249
Commercial mortgage 8,289 9,620
Residential mortgage 509 572
------------ -----------
Total nonaccrual loans 173,503 165,093
Reduced-rate loans 6,905 7,347
------------ -----------
Total nonperforming
loans 180,408 172,440
Other real estate 10,422 9,595
------------ -----------
Total nonperforming
assets $ 190,830 $ 182,035
============ ==========
Loans past due 90 days or more $ 39,523 $ 47,676
============ ==========
</TABLE>
The increase in commercial nonaccrual loans from December 31, 1999, was
primarily related to a customer in the energy industry. Nonperforming assets as
a percentage of total loans and other real estate were 0.56 percent at March 31,
2000 and December 31, 1999.
Capital
Common shareholders' equity increased $102 million from December 31, 1999
to March 31, 2000, excluding nonowner changes in equity. The increase was
primarily due to the retention of $111 million in earnings and a $4 million
increase related to employee stock plan activity, offset by a $13 million
decrease in equity from stock repurchase activity.
<PAGE> 26
Capital ratios exceed minimum regulatory requirements as follows:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------- ------------
<S> <C> <C>
Leverage ratio (3.00 - minimum) 8.24% 8.39%
Tier 1 risk-based capital ratio
(4.0 - minimum) 6.88 6.95
Total risk-based capital ratio
(8.0 - minimum) 10.63 10.72
</TABLE>
At March 31, 2000, the capital ratios of all the Corporation's banking
subsidiaries exceeded the minimum ratios required of "well capitalized"
institutions as defined in the final rule under FDICIA.
Other Matters
The Corporation initiated an extensive enterprise-wide and centrally
managed project to prepare its computer systems, applications and infrastructure
for year 2000 readiness. The year 2000 team included the active involvement of
senior executives as well as seasoned project managers and business unit
liaisons from throughout the Corporation. To date, the Corporation has
experienced no known significant system, supplier or customer failures
attributable to the year 2000 date change. The cost of the Corporation's year
2000 project included internal and external development costs, asset impairment
write-offs and the cost of software and hardware for systems that were not ready
or would not have been ready by the year 2000. The year 2000 project cost, both
internal and external, totaled approximately $50 million. Of the $50 million
incurred, $12 million was for capital assets which the Corporation is expensing
over their useful lives. The project was staffed with external resources as well
as internal staff redeployed from less time-sensitive assignments. The
redeployment of existing staff did not have a material adverse effect on the
Corporation's business, results of operations or financial position.
This report includes forward-looking statements based on
<PAGE> 27
management's current expectations and/or the assumptions made in the earnings
simulation analyses. Numerous factors could cause variances in these projections
and their underlying assumptions, such as changes in interest rates, the
industries where the Corporation has a concentration of loans, changes in the
level of fee income, the impact of the Internet on banking, the entry of new
competitors into the banking industry as a result of the enactment of the
Gramm-Leach-Bliley Act of 1999, changing economic conditions and continuing
consolidations in the banking industry.
<PAGE> 28
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Statement re: Computation of Earnings Per Share
(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, 2000.
<PAGE> 29
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.
Vice Chairman and Chief Financial Officer
Date: May 15, 2000
<PAGE> 30
Exhibit Index
-------------
Exhibit No. Description
- ----------- -----------
11 Statement re: Computation of Earnings Per Share
27 Financial Data Schedule
<PAGE> 1
EXHIBIT (11) - Statement Re: Computation of Earnings Per Share
COMPUTATION OF EARNINGS PER SHARE
Comerica Incorporated and Subsidiaries
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------
2000 1999
------- --------
<S> <C> <C>
Basic:
Average shares outstanding 156,269 155,857
======== ========
Net income $177,716 $159,112
Less preferred stock dividends 4,275 4,275
-------- --------
Net income applicable to common
stock $173,441 $154,837
======== ========
Basic net income per share $1.11 $0.99
Diluted:
Average shares outstanding 156,269 155,857
Nonvested stock 166 176
Common stock equivalent:
Net effect of the assumed
exercise of stock options 1,267 2,401
-------- --------
Diluted average shares 157,702 158,434
======== ========
Net income $177,716 $159,112
Less preferred stock dividends 4,275 4,275
-------- --------
Net income applicable to common
stock $173,441 $154,837
======== ========
Diluted net income per share $1.10 $0.98
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
2000 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-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,444,127
<INT-BEARING-DEPOSITS> 35,599
<FED-FUNDS-SOLD> 134,337
<TRADING-ASSETS> 6,820
<INVESTMENTS-HELD-FOR-SALE> 2,667,400
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 33,864,260
<ALLOWANCE> 502,954
<TOTAL-ASSETS> 39,660,314
<DEPOSITS> 23,308,545
<SHORT-TERM> 4,344,657
<LIABILITIES-OTHER> 541,386
<LONG-TERM> 7,900,388
0
250,000
<COMMON> 786,166
<OTHER-SE> 2,529,172
<TOTAL-LIABILITIES-AND-EQUITY> 39,660,314
<INTEREST-LOAN> 693,840
<INTEREST-INVEST> 48,606
<INTEREST-OTHER> 17,419
<INTEREST-TOTAL> 759,865
<INTEREST-DEPOSIT> 169,171
<INTEREST-EXPENSE> 354,922
<INTEREST-INCOME-NET> 404,943
<LOAN-LOSSES> 55,000
<SECURITIES-GAINS> 253
<EXPENSE-OTHER> 296,023
<INCOME-PRETAX> 274,617
<INCOME-PRE-EXTRAORDINARY> 177,716
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 177,716
<EPS-BASIC> 1.11
<EPS-DILUTED> 1.10
<YIELD-ACTUAL> 4.47
<LOANS-NON> 173,503
<LOANS-PAST> 39,523
<LOANS-TROUBLED> 6,905
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 476,470
<CHARGE-OFFS> 31,731
<RECOVERIES> 3,222
<ALLOWANCE-CLOSE> 502,954
<ALLOWANCE-DOMESTIC> 233,833
<ALLOWANCE-FOREIGN> 36,875
<ALLOWANCE-UNALLOCATED> 232,246
</TABLE>
