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Actionable news in CMA: COMERICA INCORPORATED,

Comerica: Average Loan Growth Of

The following excerpt is from the company's SEC filing.

$1.8 Billion

4 Percent

Average Deposit Growth of

$4.0 Billion

7 Percent

, Compared to

Third Quarter 2014

Returned

$96 Million

to Shareholders Through Share Repurchases and Dividends

Credit Quality Remained Strong

DALLAS/

October 16, 2015

-- Comerica Incorporated (NYSE: CMA) today reported

third quarter 2015

net income of

$136 million

, compared to

$135 million

for the

second quarter 2015

$154 million

third quarter 2014

. Earnings per diluted share were

74 cents

73 cents

82 cents

(dollar amounts in millions, except per share data)

3rd Qtr '15

2nd Qtr '15

3rd Qtr '14

Net interest income

Provision for credit losses

Noninterest income (a)

Noninterest expenses (a) (b)

Provision for income taxes

Net income

Net income attributable to common shares

Diluted income per common share

Average diluted shares (in millions)

Basel III common equity Tier 1 capital ratio (d) (e)

Tier 1 common capital ratio (d) (f)

Tangible common equity ratio (f)

Effective January 1, 2015, contractual changes to a card program resulted in a change to the accounting presentation of the related revenues and expenses. The effect of this change was increases of $48 million and $44 million to both noninterest income and noninterest expenses in both the third and second quarters of 2015, respectively.

Included net releases of litigation reserves of

$3 million

$30 million

$2 million

in the third quarter 2015, second quarter 2015 and third quarter 2014, respectively.

Reflected a net benefit of $8 million from certain third quarter 2014 actions, including a $32 million gain on the early redemption of debt, a $9 million contribution to the Comerica Charitable Foundation and other charges totaling $15 million.

Basel III capital rules (standardized approach) became effective for Comerica on January 1, 2015. The ratio reflects transitional treatment for certain regulatory deductions and adjustments. For further information, see "Balance Sheet and Capital Management". Capital ratios for prior periods are based on Basel I rules.

September 30, 2015

ratio is estimated.

See Reconciliation of Non-GAAP Financial Measures.

n/a - not applicable.

"Our third quarter results demonstrate the benefits of our geographic and business line diversity. ” said Ralph W. Babb, Jr., chairman and chief executive officer. "Average loans grew

$1.8 billion

4 percent

, and deposits were up

$4.0 billion

7 percent

, compared to a year ago.

"Net interest income remained stable compared to the second quarter and noninterest income increased

1 percent

, including growth in card fees, an area of increased focus for us. We continued to tightly manage expenses in the third quarter, even while faced with rising technology and regulatory costs.

Overall

-more-

COMERICA REPORTS THIRD QUARTER 2015 NET INCOME OF $136 MILLION -

credit quality remained strong. As far as loans related to energy

, we saw negative migration; however, as expected, net charge-offs continued to be low and nonaccruals increased a modest $7 million.

"Our capital position is solid,” said Babb. "Stock repurchases under our equity repurchase program, combined with dividends, returned

$96 million

to shareholders in the third quarter. Our Trusted Advisor approach to relationship banking continues to make a positive difference as we remain focused on the long term."

Third Quarter 2015

Second Quarter 2015

Average total loans increased

$139 million

$49.0 billion

, with increases in Technology and Life Sciences and Commercial Real Estate offset by decreases in Corporate Banking, general Middle Market and Energy. Period-end total loans decreased

$799 million

$48.9 billion

, largely driven by seasonal decreases in Mortgage Banker Finance and general Middle Market.

Average total deposits increased

$1.7 billion

3 percent

$59.1 billion

, primarily driven by a

$1.3 billion

increase in noninterest-bearing deposits. Average total deposits increased in almost all lines of business. Period-end total deposits increased

$508 million

$58.8 billion

Net interest income increased

$1 million

$422 million

. The benefits from one additional day in the quarter and increases in average earning assets were largely offset by an increase in interest expense on debt and lower loan yields.

The allowance for loan losses increased

$4 million

June 30, 2015

, primarily due to increases in reserves related to Technology and Life Sciences and energy exposure, partially offset by lower loan balances and improved credit quality in the remainder of the portfolio. Net charge-offs were

$23 million

0.19 percent

of average loans, in the

$18 million

0.15 percent

. As a result, the provision for credit losses was

$26 million

Noninterest income increased

increase in card fees.

Noninterest expenses increased

$25 million

, primarily reflecting a

net release of litigation reserves in the

compared to a net release of

Capital remained solid at

, as evidenced by an estimated common equity Tier 1 capital ratio of

10.58 percent

and a tangible common equity ratio of

9.91 percent

Comerica repurchased approximately

1.2 million

shares of common stock under the equity repurchase program, which, together with dividends, returned

to shareholders.

, primarily reflecting increases in almost all lines of business, partially offset by a $400 million decrease in Corporate Banking

, primarily driven by increases of

$3.3 billion

in noninterest-bearing deposits and

$1.2 billion

in money market and NOW deposits, partially offset by a decrease of

$592 million

in customer certificates of deposit. Average deposits increased in almost all lines of business and across all markets.

, largely due to earning asset growth, partially offset by a

increase in interest expense on debt.

The provision for credit losses increased

$21 million

, primarily due to increases in reserves related to Technology and Life Sciences and energy exposure.

Excluding the impact of a change to the accounting presentation for a card program, which increased both noninterest income and noninterest expenses by $48 million in the

, noninterest income increased $1 million.

Noninterest expenses increased $8 million, excluding the above-described change in accounting presentation for a card program and the net benefit of $8 million in the third quarter 2014 from certain cost-saving actions, primarily due to an increase in technology-related contract labor expenses and higher outside processing expenses related to revenue generating activities.

Loans related to energy at September 30, 2015 included approximately $3.2 billion of outstanding loans in our Energy business line as well as approximately $615 million of loans in other lines of business to companies that have a sizable

portion of their revenue related to energy or could be otherwise disproportionately negatively impacted by prolonged low oil and gas prices.

Net Interest Income

(dollar amounts in millions)

Net interest margin

Selected average balances:

Total earning assets

66,191

63,981

61,672

Total loans

48,972

48,833

47,159

Total investment securities

10,232

Federal Reserve Bank deposits

Total deposits

59,140

57,398

55,163

Total noninterest-bearing deposits

28,623

27,365

25,275

, compared to the

Interest on loans increased

, reflecting the impact of one additional day in the third quarter (+$4 million) and the benefit from an increase in average loan balances (+$1 million), partially offset by a decrease in yields (-$3 million). The decrease in loan yields primarily reflected the impact of growth in high quality, lower yielding loans as well as a decrease in fee income due to the summer slowdown, partially offset by the benefit from an increase in LIBOR and the favorable impact from higher yields on loans related to energy due to negative credit migration.

Interest on investment securities and Federal Reserve Bank deposits each increased $1 million, primarily reflecting increased average balances.

Interest expense on debt increased

, primarily reflecting the impact of debt issued in June and July 2015.

The net interest margin of

2.54 percent

11 basis points

, primarily due to the impact of the increase in Federal Reserve Bank deposit balances (-6 basis points), lower loan yields (-2 basis points) and the impact of increased debt (-2 basis points).

Noninterest Income

$261 million

. The increase primarily reflected increases of $4 million in hedge ineffectiveness income,

in card fees and $3 million in warrant-related income, partially offset by decreases of $5 million in deferred compensation asset returns and $4 million in investment banking income. The decrease in deferred compensation asset returns was offset by a decrease in deferred compensation plan expense in noninterest expenses.

Noninterest Expenses

$436 million

, as well as increases of $2 million each in occupancy and software expense, partially offset by an

decrease in salaries and benefits expense. The decrease in salaries and benefits expense primarily reflected a decrease in deferred compensation plan expense, lower share-based compensation expense as a result of forfeitures, and lower benefits expense, partially offset by an increase in technology-related contract labor expenses and the impact of one additional day in the quarter.

“At 19 basis points, net charge-offs remain well below the historical normal level. Gross charge-offs declined slightly, while recoveries were down, primarily due to timing,” said Babb. “The provision for credit losses was

and the allowance increased

. This reflects modestly higher reserves for both

Technology and Life Sciences and loans related to energy. This marks the fourth consecutive quarter that we have prudently increased our reserves for energy, a result of increasing criticized loans and sustained low energy prices. While negative credit migration is anticipated, any losses are expected to be manageable. We continue to feel comfortable with our energy portfolio.”

Loan charge-offs

Loan recoveries

Net loan charge-offs

Net loan charge-offs/Average total loans

Nonperforming loans (a)

Nonperforming assets (NPAs) (a)

NPAs/Total loans and foreclosed property

Loans past due 90 days or more and still accruing

Allowance for loan losses

Allowance for credit losses on lending-related commitments (b)

Total allowance for credit losses

Allowance for loan losses/Period-end total loans

Allowance for loan losses/Nonperforming loans

Excludes loans acquired with credit impairment.

Included in "Accrued expenses and other liabilities" on the consolidated balance sheets.

Net charge-offs increased

During the

, $69 million of borrower relationships over $2 million were transferred to nonaccrual status, of which $25 million were loans related to energy.

Criticized loans increased

$537 million

$2.9 billion

$2.4 billion

, reflecting an increase of approximately $480 million in criticized loans related to energy.

Total assets and common shareholders' equity were

$71.0 billion

$7.6 billion

, respectively, at

$69.9 billion

$7.5 billion

There were approximately

177 million

common shares outstanding at

. Share repurchases of

$59 million

shares) under the equity repurchase program, combined with dividends of

21 cents

per share, returned

71 percent

net income to shareholders. Diluted average shares decreased

181 million

The estimated common equity Tier 1 capital ratio, reflective of transition provisions and excluding accumulated other...


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