UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________

FORM 10-Q

______________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

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 incorporation or organization)	(I.R.S. Employer Identification No.)

Comerica Bank Tower

1717 Main Street, MC 6500

Dallas, Texas 75201

(Address of principal executive offices)

(Zip Code)

(214) 462-6831

(Registrant’s telephone number, including area code) 

_________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $5 par value	CMA	New York Stock Exchange

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 ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ 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 26, 2023: 131,669,861 shares

COMERICA INCORPORATED AND SUBSIDIARIES

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets at March 31, 2023 (unaudited) and December 31, 2022	1
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2023 and 2022 (unaudited)	2
Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31. 2023 and 2022 (unaudited)	3
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (unaudited)	4
Notes to Consolidated Financial Statements (unaudited)	5
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	60
ITEM 4. Controls and Procedures	60
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings	60
ITEM 1A. Risk Factors	60
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	61
ITEM 6. Exhibits	62
Signature	63

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

Comerica Incorporated and Subsidiaries

(in millions, except share data)	March 31, 2023		December 31, 2022
	(unaudited)
ASSETS
Cash and due from banks	$	1,563	$	1,758
Interest-bearing deposits with banks	9,171		4,524
Other short-term investments	354		157
Investment securities available-for-sale	18,295		19,012
Commercial loans	31,630		30,909
Real estate construction loans	3,567		3,105
Commercial mortgage loans	13,592		13,306
Lease financing	766		760
International loans	1,233		1,197
Residential mortgage loans	1,822		1,814
Consumer loans	2,316		2,311
Total loans	54,926		53,402
Allowance for loan losses	(641)		(610)
Net loans	54,285		52,792
Premises and equipment	399		400
Accrued income and other assets	7,060		6,763
Total assets	$	91,127	$	85,406
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits	$	33,173	$	39,945
Money market and interest-bearing checking deposits	24,323		26,290
Savings deposits	2,998		3,225
Customer certificates of deposit	2,077		1,762
Other time deposits	2,116		124
Foreign office time deposits	19		51
Total interest-bearing deposits	31,533		31,452
Total deposits	64,706		71,397
Short-term borrowings	11,016		3,211
Accrued expenses and other liabilities	2,327		2,593
Medium- and long-term debt	7,084		3,024
Total liabilities	85,133		80,225
Fixed rate reset non-cumulative perpetual preferred stock, series A, no par value, $100,000 liquidation preference per share:
Authorized - 4,000 shares
Issued - 4,000 shares	394		394
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares	1,141		1,141
Capital surplus	2,209		2,220
Accumulated other comprehensive loss	(3,171)		(3,742)
Retained earnings	11,476		11,258
Less cost of common stock in treasury - 96,631,155 shares at 3/31/2023 and 97,197,962 shares at 12/31/2022	(6,055)		(6,090)
Total shareholders’ equity	5,994		5,181
Total liabilities and shareholders’ equity	$	91,127	$	85,406

See notes to consolidated financial statements (unaudited).

1

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Comerica Incorporated and Subsidiaries 

	Three Months Ended March 31,
(in millions, except per share data)	2023		2022
INTEREST INCOME
Interest and fees on loans	$	777	$	383
Interest on investment securities	113		77
Interest on short-term investments	59		9
Total interest income	949		469
INTEREST EXPENSE
Interest on deposits	118		4
Interest on short-term borrowings	66		—
Interest on medium- and long-term debt	57		9
Total interest expense	241		13
Net interest income	708		456
Provision for credit losses	30		(11)
Net interest income after provision for credit losses	678		467
NONINTEREST INCOME
Card fees	69		69
Fiduciary income	58		58
Service charges on deposit accounts	46		48
Capital markets income	39		29
Commercial lending fees	18		16
Bank-owned life insurance	10		13
Letter of credit fees	10		9
Brokerage fees	8		4
Other noninterest income	24		(2)
Total noninterest income	282		244
NONINTEREST EXPENSES
Salaries and benefits expense	326		289
Outside processing fee expense	64		62
Occupancy expense	41		38
Software expense	40		39
FDIC Insurance expense	13		8
Equipment expense	12		11
Advertising expense	8		7
Other noninterest expenses	47		19
Total noninterest expenses	551		473
Income before income taxes	409		238
Provision for income taxes	85		49
NET INCOME	324		189
Less:
Income allocated to participating securities	1		1
Preferred stock dividends	6		6
Net income attributable to common shares	$	317	$	182
Earnings per common share:
Basic	$	2.41	$	1.39
Diluted	2.39		1.37
Comprehensive income (loss)	895		(772)
Cash dividends declared on common stock	94		89
Cash dividends declared per common share	0.71		0.68

See notes to consolidated financial statements (unaudited).

2

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)

Comerica Incorporated and Subsidiaries

								Accumulated Other Comprehensive Loss
	Nonredeemable Preferred Stock		Common Stock											Total Shareholders' Equity
			Shares Outstanding			Capital Surplus				Retained Earnings		Treasury Stock
(in millions, except per share data)				Amount
BALANCE AT DECEMBER 31, 2021	$	394	130.7	$	1,141	$	2,175	$	(212)	$	10,494	$	(6,095)	$	7,897
Net income	—		—	—		—		—		189		—		189
Other comprehensive loss, net of tax	—		—	—		—		(961)		—		—		(961)
Cash dividends declared on common stock ($0.68 per share)	—		—	—		—		—		(89)		—		(89)
Cash dividends declared on preferred stock	—		—	—		—		—		(6)		—		(6)
Purchase of common stock	—		(0.4)	—		—		—		—		(36)		(36)
Net issuance of common stock under employee stock plans	—		0.4	—		(9)		—		(3)		26		14
Share-based compensation	—		—	—		28		—		—		—		28
BALANCE AT MARCH 31, 2022	$	394	130.7	$	1,141	$	2,194	$	(1,173)	$	10,585	$	(6,105)	$	7,036
BALANCE AT DECEMBER 31, 2022	$	394	131.0	$	1,141	$	2,220	$	(3,742)	$	11,258	$	(6,090)	$	5,181
Net income	—		—	—		—		—		324		—		324
Other comprehensive income, net of tax	—		—	—		—		571		—		—		571
Cash dividends declared on common stock ($0.71 per share)	—		—	—		—		—		(94)		—		(94)
Cash dividends declared on preferred stock	—		—	—		—		—		(6)		—		(6)
Net issuance of common stock under employee stock plans	—		0.5	—		(39)		—		(6)		35		(10)
Share-based compensation	—		—	—		28		—		—		—		28
BALANCE AT MARCH 31, 2023	$	394	131.5	$	1,141	$	2,209	$	(3,171)	$	11,476	$	(6,055)	$	5,994

See notes to consolidated financial statements (unaudited).

3

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Comerica Incorporated and Subsidiaries

	Three Months Ended March 31,
(in millions)	2023		2022
OPERATING ACTIVITIES
Net income	$	324	$	189
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	30		(11)
Benefit for deferred income taxes	(9)		(2)
Depreciation and amortization	20		23
Net periodic defined benefit credit	(7)		(22)
Share-based compensation expense	28		28
Net amortization of securities	5		10
Net change in:
Accrued income receivable	(34)		(1)
Accrued expenses payable	(102)		(93)
Other, net	207		(831)
Net cash provided by (used in) operating activities	462		(710)
INVESTING ACTIVITIES
Investment securities available-for-sale:
Maturities and redemptions