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COMERICA INC /NEW/ - Quarter Report: 2019 June (Form 10-Q)

Table of Contents

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 June 30, 2019
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 6404
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 July 25, 2019: 149,361,136 shares


Table of Contents

COMERICA INCORPORATED AND SUBSIDIARIES
TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35
 
 
 
 
 
 
 
 
59
 
 
59
 
 
59
 
 
59
 
 
60



Table of Contents

Part I. FINANCIAL INFORMATION
Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
(in millions, except share data)
June 30, 2019
 
December 31, 2018
 
(unaudited)
 
 
ASSETS
 
 
 
Cash and due from banks
$
1,029

 
$
1,390

 
 
 
 
Interest-bearing deposits with banks
2,552

 
3,171

Other short-term investments
140

 
134

 
 
 
 
Investment securities available-for-sale
12,338

 
12,045

 
 
 
 
Commercial loans
33,326

 
31,976

Real estate construction loans
3,292

 
3,077

Commercial mortgage loans
9,217

 
9,106

Lease financing
575

 
507

International loans
1,024

 
1,013

Residential mortgage loans
1,924

 
1,970

Consumer loans
2,443

 
2,514

Total loans
51,801

 
50,163

Less allowance for loan losses
(657
)
 
(671
)
Net loans
51,144

 
49,492

 
 
 
 
Premises and equipment
470

 
475

Accrued income and other assets
4,864

 
4,111

Total assets
$
72,537

 
$
70,818

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Noninterest-bearing deposits
$
27,001

 
$
28,690

 
 
 
 
Money market and interest-bearing checking deposits
22,195

 
22,560

Savings deposits
2,162

 
2,172

Customer certificates of deposit
2,441

 
2,131

Other time deposits
1,726

 

Foreign office time deposits
12

 
8

Total interest-bearing deposits
28,536

 
26,871

Total deposits
55,537

 
55,561

 
 
 
 
Short-term borrowings
1,733

 
44

Accrued expenses and other liabilities
1,386

 
1,243

Medium- and long-term debt
6,558

 
6,463

Total liabilities
65,214

 
63,311

 
 
 
 
Common stock - $5 par value:
 
 
 
Authorized - 325,000,000 shares
 
 
 
Issued - 228,164,824 shares
1,141

 
1,141

Capital surplus
2,168

 
2,148

Accumulated other comprehensive loss
(382
)
 
(609
)
Retained earnings
9,176

 
8,781

Less cost of common stock in treasury - 78,367,534 shares at 6/30/19 and 68,081,176 shares at 12/31/18
(4,780
)
 
(3,954
)
Total shareholders’ equity
7,323

 
7,507

Total liabilities and shareholders’ equity
$
72,537

 
$
70,818

See notes to consolidated financial statements (unaudited).

1

Table of Contents
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Comerica Incorporated and Subsidiaries 


 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in millions, except per share data)
2019
 
2018
 
2019
 
2018
INTEREST INCOME
 
 
 
 
 
 
 
Interest and fees on loans
$
635

 
$
568

 
$
1,256

 
$
1,077

Interest on investment securities
75

 
64

 
147

 
128

Interest on short-term investments
17

 
18

 
34

 
35

Total interest income
727

 
650

 
1,437

 
1,240

INTEREST EXPENSE
 
 
 
 
 
 
 
Interest on deposits
67

 
28

 
119

 
44

Interest on short-term borrowings
6

 

 
7

 

Interest on medium- and long-term debt
51

 
32

 
102

 
57

Total interest expense
124

 
60

 
228

 
101

Net interest income
603

 
590

 
1,209

 
1,139

Provision for credit losses
44

 
(29
)
 
31

 
(17
)
Net interest income after provision for credit losses
559

 
619

 
1,178

 
1,156

NONINTEREST INCOME
 
 
 
 
 
 
 
Card fees
65

 
60

 
128

 
119

Service charges on deposit accounts
51

 
53

 
102

 
107

Fiduciary income
52

 
52

 
101

 
104

Commercial lending fees
21

 
23

 
43

 
41

Foreign exchange income
11

 
12

 
22

 
24

Letter of credit fees
10

 
11

 
19

 
21

Bank-owned life insurance
11

 
9

 
20

 
18

Brokerage fees
7

 
6

 
14

 
13

Net securities gains (losses)

 

 
(8
)
 
1

Other noninterest income
22

 
22

 
47

 
44

Total noninterest income
250

 
248

 
488

 
492

NONINTEREST EXPENSES
 
 
 
 
 
 
 
Salaries and benefits expense
245

 
250

 
510

 
505

Outside processing fee expense
65

 
64

 
128

 
125

Net occupancy expense
37

 
37

 
74

 
75

Software expense
28

 
32

 
57

 
63

Equipment expense
12

 
11

 
24

 
22

FDIC insurance expense
6

 
12

 
11

 
25

Advertising expense
9

 
8

 
14

 
14

Restructuring charges

 
11

 

 
27

Other noninterest expenses
22

 
23

 
39

 
38

Total noninterest expenses
424

 
448

 
857

 
894

Income before income taxes
385

 
419

 
809

 
754

Provision for income taxes
87

 
93

 
172

 
147

NET INCOME
298

 
326

 
637

 
607

Less income allocated to participating securities
1

 
2

 
3

 
4

Net income attributable to shares
$
297

 
$
324

 
$
634

 
$
603

Earnings per share:
 
 
 
 
 
 
 
Basic
$
1.95

 
$
1.90

 
$
4.10

 
$
3.52

Diluted
1.94

 
1.87

 
4.06

 
3.46

 
 
 
 
 
 
 
 
Comprehensive income
429

 
290

 
864

 
468

 
 
 
 
 
 
 
 
Cash dividends declared on stock
100

 
58

 
205

 
110

Cash dividends declared per share
0.67

 
0.34

 
1.34

 
0.64

See notes to consolidated financial statements (unaudited).


2

Table of Contents
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)
Comerica Incorporated and Subsidiaries


 
 
 
 
Accumulated
 
 
 
 
Common Stock
 
Other
 
 
Total
 
Shares
 
Capital
Comprehensive
Retained
Treasury
Shareholders'
(in millions, except per share data)
Outstanding
Amount
Surplus
Loss
Earnings
Stock
Equity
 
 
 
 
 
 
 
 
BALANCE AT MARCH 31, 2018
172.5

$
1,141

$
2,134

$
(553
)
$
8,110

$
(2,832
)
$
8,000

Net income




326


326

Other comprehensive loss, net of tax



(36
)


(36
)
Cash dividends declared on common stock ($0.34 per share)




(58
)

(58
)
Purchase of common stock
(1.7
)




(169
)
(169
)
Net issuance of common stock under employee stock plans
0.1




(4
)
10

6

Share-based compensation


10




10

BALANCE AT JUNE 30, 2018
170.9

$
1,141

$
2,144

$
(589
)
$
8,374

$
(2,991
)
$
8,079

 
 
 
 
 
 
 
 
BALANCE AT MARCH 31, 2019
155.4

$
1,141

$
2,159

$
(513
)
$
8,979

$
(4,357
)
$
7,409

Net income




298


298

Other comprehensive income, net of tax



131



131

Cash dividends declared on common stock ($0.67 per share)




(100
)

(100
)
Purchase of common stock
(5.7
)




(425
)
(425
)
Net issuance of common stock under employee stock plans
0.1


1


(1
)
2

2

Share-based compensation


8




8

BALANCE AT JUNE 30, 2019
149.8

$
1,141

$
2,168

$
(382
)
$
9,176

$
(4,780
)
$
7,323

 
 
 
 
 
 
 
 
BALANCE AT DECEMBER 31, 2017
172.9

$
1,141

$
2,122

$
(451
)
$
7,887

$
(2,736
)
$
7,963

Cumulative effect of change in accounting principles



1

14


15

Net income




607


607

Other comprehensive loss, net of tax



(139
)


(139
)
Cash dividends declared on common stock ($0.64 per share)




(110
)

(110
)
Purchase of common stock
(3.4
)




(328
)
(328
)
Net issuance of common stock under employee stock plans
1.3


(11
)

(21
)
69

37

Net issuance of common stock for warrants
0.1


(1
)

(3
)
4


Share-based compensation


34




34

BALANCE AT JUNE 30, 2018
170.9

$
1,141

$
2,144

$
(589
)
$
8,374

$
(2,991
)
$
8,079

 
 
 
 
 
 
 
 
BALANCE AT DECEMBER 31, 2018
160.1

$
1,141

$
2,148

$
(609
)
$
8,781

$
(3,954
)
$
7,507

Cumulative effect of change in accounting principle




(14
)

(14
)
Net income




637


637

Other comprehensive income, net of tax



227



227

Cash dividends declared on common stock ($1.34 per share)




(205
)

(205
)
Purchase of common stock
(10.9
)




(859
)
(859
)
Net issuance of common stock under employee stock plans
0.6


(12
)

(23
)
33

(2
)
Share-based compensation


32




32

BALANCE AT JUNE 30, 2019
149.8

$
1,141

$
2,168

$
(382
)
$
9,176

$
(4,780
)
$
7,323

See notes to consolidated financial statements (unaudited).



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Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Comerica Incorporated and Subsidiaries


 
Six Months Ended June 30,
(in millions)
2019
 
2018
OPERATING ACTIVITIES
 
 
 
Net income
$
637

 
$
607

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Provision for credit losses
31

 
(17
)
(Benefit) provision for deferred income taxes
(4
)
 
14

Depreciation and amortization
57

 
60

Net periodic defined benefit credit
(14
)
 
(10
)
Share-based compensation expense
32

 
34

Net amortization of securities
1

 
2

Net securities losses (gains)
8

 
(1
)
Net gains on sales of foreclosed property

 
(1
)
Net change in:
 
 
 
Accrued income receivable
(12
)
 
(38
)
Accrued expenses payable
(86
)
 
(51
)
Other, net
(225
)
 
15

Net cash provided by operating activities
425

 
614

INVESTING ACTIVITIES
 
 
 
Investment securities available-for-sale:
 
 
 
Maturities and redemptions
991

 
895

Sales
987

 
5

Purchases
(2,043
)
 
(891
)
Net change in loans
(1,685
)
 
(651
)
Proceeds from sales of foreclosed property

 
6

Net increase in premises and equipment
(29
)
 
(41
)
Purchases of Federal Home Loan Bank stock
(49
)
 
(41
)
Proceeds from bank-owned life insurance settlements
7

 
3

Other, net

 
(1
)
Net cash used in investing activities
(1,821
)
 
(716
)
FINANCING ACTIVITIES
 
 
 
Net change in:
 
 
 
Deposits
(209
)
 
(737
)
Short-term borrowings
1,689

 
48

Medium- and long-term debt:
 
 
 
Maturities
(350
)
 

Issuances and advances
350

 
1,000

Common stock:
 
 
 
Repurchases
(872
)
 
(337
)
Cash dividends paid
(203
)
 
(104
)
Issuances under employee stock plans
11

 
46

Other, net

 
1

Net cash provided by (used in) financing activities
416

 
(83
)
Net decrease in cash and cash equivalents
(980
)
 
(185
)
Cash and cash equivalents at beginning of period
4,561

 
5,845

Cash and cash equivalents at end of period
$
3,581

 
$
5,660

Interest paid
$
220

 
$
99

Income tax paid
161

 
94

Noncash investing and financing activities:
 
 
 
Loans transferred to other real estate
2

 
2

Securities transferred from held-to-maturity to available-for-sale

 
1,266

Securities transferred from available-for-sale to equity securities

 
81

See notes to consolidated financial statements (unaudited).

4

Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

NOTE 1 - BASIS OF PRESENTATION AND ACCOUNTING POLICIES
Organization
The accompanying unaudited consolidated financial statements were prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) 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 GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation were included. The results of operations for the six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. Certain items in prior periods were 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, 2018.
Leases
Effective January 1, 2019, the Corporation adopted the provisions of Accounting Standards Update (ASU) No. 2016-02, “Leases (Topic 842),” (ASU 2016-02), for all open leases with a term greater than one year as of the adoption date, using the modified retrospective approach. Prior comparable periods are presented in accordance with previous guidance under Accounting Standards Codification (ASC) 840, “Leases.”
Topic 842 requires the recognition of a lease liability, measured as the present value of unpaid lease payments for operating leases where the Corporation is the lessee, and a corresponding right-of-use (ROU) asset for the right to use the leased properties. The Corporation elected not to reassess whether contracts are or contain leases, lease classification or initial direct costs for existing leases, a set of practical expedients for transition provided by ASU 2016-12. Further, the Corporation elected the practical expedient to use hindsight in determining the lease term and assessing impairment. The election of the hindsight practical expedient resulted in longer lease terms for a limited number of strategic locations based on relevant factors as of the adoption date.
The impact at adoption was increases of $329 million and $343 million to total assets and liabilities, respectively, and a $14 million reduction to retained earnings. The increase in total assets was due to the recognition of ROU assets recorded in accrued income and other assets, and the increase in total liabilities was due to corresponding recognition of lease payment liabilities recorded in accrued expenses and other liabilities.
Operating lease liabilities reflect the Corporation’s obligation to make future lease payments, primarily for real estate locations. Lease terms typically comprise contractual terms but may include extension options reasonably certain of being exercised at lease inception for certain strategic locations such as regional headquarters. Payments are discounted using the rate the Corporation would pay to borrow amounts equal to the lease payments over the lease term (the Corporation’s incremental borrowing rate). The Corporation does not separate lease and non-lease components for contracts in which it is the lessee. ROU assets are measured based on lease liabilities adjusted for incentives as well as accrued and prepaid rent. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Common area maintenance and other executory costs are the main components of variable lease payments. Operating and variable lease expenses are recorded in net occupancy expense in the Consolidated Statements of Income.
The Corporation is the lessor in sales-type, direct finance and leveraged lease arrangements. Leases are recorded at the principal balance outstanding, net of unearned income and charge-offs. Interest income is recognized using the interest method. The impact of adopting Topic 842 for lessor accounting was not significant.
Pending Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," (ASU 2016-13), which addresses concerns regarding the perceived delay in recognition of credit losses under the existing incurred loss model. The amendment introduces a new, single model for recognizing credit losses on all financial instruments presented on a cost basis. Under the new model, entities must estimate current expected credit losses by considering all available relevant information, including historical and current conditions, as well as reasonable and supportable forecasts of future events. The update also requires additional qualitative and quantitative disclosure to allow users to better understand the credit risk within the portfolio and the methodologies for determining the allowance for credit losses.
ASU 2016-13 is effective for the Corporation on January 1, 2020 and must be applied using the modified retrospective approach with limited exceptions. The Corporation’s cross-functional implementation team, led by the Chief Financial Officer and Chief Credit Officer, continue to make progress in accordance with the detailed implementation plan for adoption. In prior periods, the Corporation developed and completed internal validations of new credit estimation models. The Corporation has implemented new processes and controls for the execution of the new model and is in the process of testing them. The implementation

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Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

team continues to challenge current model assumptions and outputs, refine the qualitative framework and finalize policies and disclosures. Additionally, limited parallel runs, which began in the fourth quarter 2018, will be enhanced throughout 2019 as more end-to-end processes, controls and policies are finalized.
Incorporating reasonable and supportable forecasts of economic conditions into the estimate of expected credit losses will require significant judgment, such as selecting economic variables and forecast scenarios as well as determining the appropriate length of the forecast horizon. Management will select economic variables it believes to be most relevant based on the composition of the loan portfolio and customer base, likely to include forecasted levels of employment, gross domestic product, corporate bond and treasury spreads, industrial production levels, consumer and commercial real estate price indices as well as housing statistics. Different economic forecasts ranging from more benign to more severe will be evaluated each reporting period to forecast losses over the contractual life of the loan portfolio. The Corporation anticipates using a two-year forecast horizon, which encompasses most of the remaining contractual life of its portfolio of commercial loans.
The ultimate impact of ASU 2016-13 will depend on the composition of the portfolio as well as economic conditions and forecasts at the time of adoption. Based on current factors, the overall allowance for credit losses is not expected to materially change due to the portfolio’s relatively short average contractual life. The commercial portfolio, comprising the majority of the Corporation’s portfolio, consists of loans and lending arrangements with short contractual maturities that are expected to result in a slight reduction to the allowance for credit losses. The allowance for credit losses is expected to increase for the consumer portfolio given its longer contractual maturities. ASU 2016-13 will be adopted in first quarter 2020.
NOTE 2 – FAIR VALUE MEASUREMENTS
The Corporation utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, the Corporation uses present value techniques and other valuation methods to estimate the fair values of its financial instruments. These valuation methods require considerable judgment and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used.
Equity securities, investment securities available-for-sale, derivatives and deferred compensation plan assets and liabilities are recorded at fair value on a recurring basis. Additionally, from time to time, the Corporation may be required to record other assets and liabilities at fair value on a nonrecurring basis, such as impaired loans, other real estate (primarily foreclosed property), nonmarketable equity securities and certain other assets and liabilities. These nonrecurring fair value adjustments typically involve write-downs of individual assets or application of lower of cost or fair value accounting.
Refer to Note 1 to the consolidated financial statements in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2018 for further information about the fair value hierarchy, descriptions of the valuation methodologies and key inputs used to measure financial assets and liabilities recorded at fair value, as well as a description of the methods and significant assumptions used to estimate fair value disclosures for financial instruments not recorded at fair value in their entirety on a recurring basis.

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Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Assets and Liabilities Recorded at Fair Value on a Recurring Basis
The following tables present the recorded amount of assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018.
(in millions)
Total
 
Level 1
 
Level 2
 
Level 3
 
June 30, 2019
 
 
 
 
 
 
 
 
Deferred compensation plan assets
$
89

 
$
89

 
$

 
$

 
Equity securities
47

 
47

 

 

 
Investment securities available-for-sale:
 
 
 
 
 
 
 
 
U.S. Treasury and other U.S. government agency securities
2,793

 
2,793

 

 

 
Residential mortgage-backed securities (a)
9,545

 

 
9,545

 

 
Total investment securities available-for-sale
12,338

 
2,793

 
9,545

 

 
Derivative assets:
 
 
 
 
 
 
 
 
Interest rate contracts
210

 

 
189

 
21

 
Energy derivative contracts
129

 

 
129

 

 
Foreign exchange contracts
11

 

 
11

 

 
Total derivative assets
350

 

 
329

 
21

 
Total assets at fair value
$
12,824

 
$
2,929

 
$
9,874

 
$
21

 
Derivative liabilities:
 
 
 
 
 
 
 
 
Interest rate contracts
$
36

 
$

 
$
36

 
$

 
Energy derivative contracts
125

 

 
125

 

 
Foreign exchange contracts
10

 

 
10

 

 
Total derivative liabilities
171

 

 
171

 

 
Deferred compensation plan liabilities
89

 
89

 

 

 
Total liabilities at fair value
$
260

 
$
89

 
$
171

 
$

 
December 31, 2018
 
 
 
 
 
 
 
 
Deferred compensation plan assets
$
88

 
$
88

 
$

 
$

 
Equity securities
43

 
43

 

 

 
Investment securities available-for-sale:
 
 
 
 
 
 
 
 
U.S. Treasury and other U.S. government agency securities
2,727

 
2,727

 

 

 
Residential mortgage-backed securities (a)
9,318

 

 
9,318

 

 
Total investment securities available-for-sale
12,045

 
2,727


9,318



 
Derivative assets:
 
 
 
 
 
 
 
 
Interest rate contracts
67

 

 
58

 
9

 
Energy derivative contracts
189

 

 
189

 

 
Foreign exchange contracts
19

 

 
19

 

 
Total derivative assets
275

 

 
266

 
9

 
Total assets at fair value
$
12,451

 
$
2,858

 
$
9,584

 
$
9

 
Derivative liabilities:
 
 
 
 
 
 
 
 
Interest rate contracts
$
70

 
$

 
$
70

 
$

 
Energy derivative contracts
186

 

 
186

 

 
Foreign exchange contracts
13

 

 
13

 

 
Total derivative liabilities
269

 

 
269

 

 
Deferred compensation plan liabilities
88

 
88

 

 

 
Total liabilities at fair value
$
357

 
$
88

 
$
269

 
$

 
(a)
Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
There were no transfers of assets or liabilities recorded at fair value on a recurring basis into or out of Level 1, Level 2 and Level 3 fair value measurements during each of the three- and six-month periods ended June 30, 2019 and 2018.

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Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three- and six-month periods ended June 30, 2019 and 2018.
 
 
 
 
 
Net Realized/Unrealized Gains (Losses) (Pretax) Recorded in Earnings (b)
 
 
 
 
 
Balance 
at
Beginning
of Period
 
Change in Classification (a)
 
 
 
 
Balance at End of Period
 
 
 
 
Sales and Redemptions
 
(in millions)
 
 
Realized
Unrealized
 
 
Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
$
14

 
$

 
$

 
$
7

 
 
$

 
$
21

 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
$
7

 
$


$

 
$
(1
)
 
 
$

 
$
6

 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
$
9

 

 

 
12

 
 

 
21

 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Equity securities
$

 
$
44

 
$

 
$

 
 
$
(44
)
 
$

Investment securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal securities (c)
5

 

 

 

 
 
(5
)
 

Equity and other non-debt securities (c)
44

 
(44
)
 

 

 
 

 

Total investment securities available-for-sale
49

 
(44
)
 

 

 
 
(5
)
 

Derivative assets:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
14

 



 
(8
)
 
 

 
6


(a)
Reflects the reclassification of equity securities resulting from the adoption of ASU 2016-01.
(b)
Realized and unrealized gains and losses due to changes in fair value are recorded in other noninterest income on the Consolidated Statements of Comprehensive Income.
(c)
Auction-rate securities.
Assets and Liabilities at Fair Value on a Nonrecurring Basis
The Corporation may be required to record certain assets and liabilities at fair value on a nonrecurring basis. These include assets that are recorded at the lower of cost or fair value, and were recognized at fair value since it was less than cost at the end of the period.
The following table presents assets recorded at fair value on a nonrecurring basis at June 30, 2019 and December 31, 2018. No liabilities were recorded at fair value on a nonrecurring basis at June 30, 2019 and December 31, 2018.
(in millions)
Level 3
June 30, 2019
 
Loans:
 
Commercial
$
51

Commercial mortgage
2

Total assets at fair value
$
53

December 31, 2018
 
Loans:
 
Commercial
$
33

Commercial mortgage
2

Total assets at fair value
$
35

Level 3 assets recorded at fair value on a nonrecurring basis at June 30, 2019 and December 31, 2018 included loans for which a specific allowance was established based on the fair value of collateral. The unobservable inputs were the additional adjustments applied by management to the appraised values to reflect such factors as non-current appraisals and revisions to estimated time to sell. These adjustments are determined based on qualitative judgments made by management on a case-by-case basis and are not quantifiable inputs, although they are used in the determination of fair value.

8

Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Estimated Fair Values of Financial Instruments Not Recorded at Fair Value on a Recurring Basis
The Corporation typically holds the majority of its financial instruments until maturity and thus does not expect to realize many of the estimated fair value amounts disclosed. The disclosures also do not include estimated fair value amounts for items that are not defined as financial instruments, but which have significant value. These include such items as core deposit intangibles, the future earnings potential of significant customer relationships and the value of trust operations and other fee generating businesses. The Corporation believes the imprecision of an estimate could be significant.
The carrying amount and estimated fair value of financial instruments not recorded at fair value in their entirety on a recurring basis on the Corporation’s Consolidated Balance Sheets are as follows:
 
Carrying
Amount
 
Estimated Fair Value
(in millions)
 
Total
 
Level 1
 
Level 2
 
Level 3
June 30, 2019
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
1,029

 
$
1,029

 
$
1,029

 
$

 
$

Interest-bearing deposits with banks
2,552

 
2,552

 
2,552

 

 

Loans held-for-sale
4

 
4

 

 
4

 

Total loans, net of allowance for loan losses (a)
51,144

 
51,292

 

 

 
51,292

Customers’ liability on acceptances outstanding
4

 
4

 
4

 

 

Restricted equity investments
297

 
297

 
297

 

 

Nonmarketable equity securities (b)
6

 
10

 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Demand deposits (noninterest-bearing)
27,001

 
27,001

 

 
27,001

 

Interest-bearing deposits
24,369

 
24,369

 

 
24,369

 

Customer certificates of deposit
2,441

 
2,427

 

 
2,427

 

Other time deposits
1,726

 
1,727

 

 
1,727

 

Total deposits
55,537

 
55,524

 

 
55,524

 

Short-term borrowings
1,733

 
1,733

 
1,733

 

 

Acceptances outstanding
4

 
4

 
4

 

 

Medium- and long-term debt
6,558

 
6,568

 

 
6,568

 

Credit-related financial instruments
(55
)
 
(55
)
 

 

 
(55
)
December 31, 2018
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
1,390

 
$
1,390

 
$
1,390

 
$

 
$

Interest-bearing deposits with banks
3,171

 
3,171

 
3,171

 

 

Loans held-for-sale
3

 
3

 

 
3

 

Total loans, net of allowance for loan losses (a)
49,492

 
48,889

 

 

 
48,889

Customers’ liability on acceptances outstanding
4

 
4

 
4

 

 

Restricted equity investments
248

 
248

 
248

 

 

Nonmarketable equity securities (b)
6

 
11

 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Demand deposits (noninterest-bearing)
28,690

 
28,690

 

 
28,690

 

Interest-bearing deposits
24,740

 
24,740

 

 
24,740

 

Certificates of deposit
2,131

 
2,100

 

 
2,100

 

Total deposits
55,561

 
55,530

 

 
55,530

 

Short-term borrowings
44

 
44

 
44

 

 

Acceptances outstanding
4

 
4

 
4

 

 

Medium- and long-term debt
6,463

 
6,436

 

 
6,436

 

Credit-related financial instruments
(57
)
 
(57
)
 

 

 
(57
)
(a)
Included $53 million and $35 million of impaired loans recorded at fair value on a nonrecurring basis at June 30, 2019 and December 31, 2018, respectively.
(b)
Certain investments that are measured at fair value using the net asset value have not been classified in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheets.

9

Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

NOTE 3 - INVESTMENT SECURITIES
A summary of the Corporation’s investment securities follows:
(in millions)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
June 30, 2019
 
 
 
 
 
 
 
Investment securities available-for-sale:
 
 
 
 
 
 
 
U.S. Treasury and other U.S. government agency securities
$
2,744

 
$
49

 
$

 
$
2,793

Residential mortgage-backed securities (a)
9,537

 
61

 
53

 
9,545

Total investment securities available-for-sale
$
12,281

 
$
110

 
$
53

 
$
12,338

 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
Investment securities available-for-sale:
 
 
 
 
 
 
 
U.S. Treasury and other U.S. government agency securities
$
2,732

 
$
14

 
$
19

 
$
2,727

Residential mortgage-backed securities (a)
9,493

 
22

 
197

 
9,318

Total investment securities available-for-sale
$
12,225

 
$
36

 
$
216

 
$
12,045

(a)
Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
A summary of the Corporation’s investment securities in an unrealized loss position as of June 30, 2019 and December 31, 2018 follows:
 
Temporarily Impaired
 
Less than 12 Months
 
12 Months or more
 
Total
(in millions)
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed securities (a)
271

 

 
 
4,194

 
53

 
 
4,465

 
53

 
Total temporarily impaired securities
$
271

 
$

 
 
$
4,194


$
53

 
 
$
4,465

 
$
53

 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and other U.S. government agency securities
$

 
$

 
 
$
1,457

 
$
19

 
 
$
1,457

 
$
19

 
Residential mortgage-backed securities (a)
1,008

 
9

 
 
6,412

 
188

 
 
7,420

 
197

 
Total temporarily impaired securities
$
1,008

 
$
9

 
 
$
7,869

 
$
207

 
 
$
8,877

 
$
216

 
(a)
Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
At June 30, 2019, the Corporation had 206 residential mortgage-backed securities securities in an unrealized loss position with no credit impairment. The unrealized losses for these securities resulted from changes in market interest rates and liquidity, not changes in credit quality. The Corporation ultimately expects full collection of the carrying amount of these securities, does not intend to sell the securities in an unrealized loss position, and it is not more-likely-than-not that the Corporation will be required to sell the securities in an unrealized loss position prior to recovery of amortized cost. The Corporation does not consider these securities to be other-than-temporarily impaired at June 30, 2019.
Sales, calls and write-downs of investment securities available-for-sale resulted in the following gains and losses recorded in net securities (losses) gains on the Consolidated Statements of Comprehensive Income, computed based on the adjusted cost of the specific security. There were no significant gains or losses of investment securities available-for-sale during both the three months ended June 30, 2019 and 2018.
 
Six Months Ended June 30,
(in millions)
2019
 
2018
Securities gains
$

 
$
1

Securities losses
(8
)
 

Net securities (losses) gains
$
(8
)
 
$
1



10

Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

The following table summarizes the amortized cost and fair values of debt securities by contractual maturity. Securities with multiple maturity dates are classified in the period of final maturity. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
(in millions)
 
June 30, 2019
Amortized Cost
 
Fair Value
Contractual maturity
 
 
 
After one year through five years
$
2,788

 
$
2,839

After five years through ten years
1,288

 
1,295

After ten years
8,205

 
8,204

Total investment securities
$
12,281

 
$
12,338


Included in the contractual maturity distribution in the table above were residential mortgage-backed securities with total amortized cost and fair value of $9.5 billion. The actual cash flows of mortgage-backed securities may differ from contractual maturity as the borrowers of the underlying loans may exercise prepayment options.
At June 30, 2019, investment securities with a carrying value of $311 million were pledged where permitted or required by law to secure $259 million of liabilities, primarily public and other deposits of state and local government agencies as well as derivative instruments.

11

Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

NOTE 4 – CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES
The following table presents an aging analysis of the recorded balance of loans.
 
Loans Past Due and Still Accruing
 
 
 
 
 
 
(in millions)
30-59
Days
 
60-89 
Days
 
90 Days
or More
 
Total
 
Nonaccrual
Loans
 
Current
Loans
 
Total 
Loans
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
$
44

 
$
22

 
$
11

 
$
77

 
$
155

 
$
33,094

 
$
33,326

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (a)
16

 

 

 
16

 

 
2,920

 
2,936

Other business lines (b)

 

 

 

 

 
356

 
356

Total real estate construction
16

 

 

 
16

 

 
3,276

 
3,292

Commercial mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (a)
2

 
35

 

 
37

 
2

 
1,858

 
1,897

Other business lines (b)
5

 
7

 
6

 
18

 
10

 
7,292

 
7,320

Total commercial mortgage
7

 
42

 
6

 
55

 
12

 
9,150

 
9,217

Lease financing

 

 

 

 
1

 
574

 
575

International
5

 

 

 
5

 
3

 
1,016

 
1,024

Total business loans
72

 
64

 
17

 
153

 
171

 
47,110

 
47,434

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
26

 
2

 

 
28

 
35

 
1,861

 
1,924

Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity
3

 
1

 

 
4

 
18

 
1,731

 
1,753

Other consumer
1

 

 

 
1

 

 
689

 
690

Total consumer
4

 
1

 

 
5

 
18

 
2,420

 
2,443

Total retail loans
30

 
3

 

 
33

 
53

 
4,281

 
4,367

Total loans
$
102

 
$
67

 
$
17

 
$
186

 
$
224

 
$
51,391

 
$
51,801

December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
$
34

 
$
26

 
$
8

 
$
68

 
$
141

 
$
31,767

 
$
31,976

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (a)
6

 

 

 
6

 

 
2,681

 
2,687

Other business lines (b)
6

 

 

 
6

 

 
384

 
390

Total real estate construction
12

 

 

 
12

 

 
3,065

 
3,077

Commercial mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (a)
4

 

 

 
4

 
2

 
1,737

 
1,743

Other business lines (b)
32

 
5

 
8

 
45

 
18

 
7,300

 
7,363

Total commercial mortgage
36

 
5

 
8

 
49

 
20

 
9,037

 
9,106

Lease financing

 

 

 

 
2

 
505

 
507

International

 

 

 

 
3

 
1,010

 
1,013

Total business loans
82

 
31

 
16

 
129

 
166

 
45,384

 
45,679

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
11

 
3

 

 
14

 
36

 
1,920

 
1,970

Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity
4

 
1

 

 
5

 
19

 
1,741

 
1,765

Other consumer
1

 

 

 
1

 

 
748

 
749

Total consumer
5

 
1

 

 
6

 
19

 
2,489

 
2,514

Total retail loans
16

 
4

 

 
20

 
55

 
4,409

 
4,484

Total loans
$
98

 
$
35

 
$
16

 
$
149

 
$
221

 
$
49,793

 
$
50,163

(a)
Primarily loans to real estate developers.
(b)
Primarily loans secured by owner-occupied real estate.

12

Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

The following table presents loans by credit quality indicator, based on internal risk ratings assigned to each business loan at the time of approval and subjected to subsequent reviews, generally at least annually, and to pools of retail loans with similar risk characteristics.
 
Internally Assigned Rating
 
 
(in millions)
Pass (a)
 
Special
Mention (b)
 
Substandard (c)
 
Nonaccrual (d)
 
Total
June 30, 2019
 
 
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
Commercial
$
31,818

 
$
703

 
$
650

 
$
155

 
$
33,326

Real estate construction:
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (e)
2,887

 
49

 

 

 
2,936

Other business lines (f)
353

 
3

 

 

 
356

Total real estate construction
3,240

 
52

 

 

 
3,292

Commercial mortgage:
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (e)
1,840

 
14

 
41

 
2

 
1,897

Other business lines (f)
7,105

 
135

 
70

 
10

 
7,320

Total commercial mortgage
8,945

 
149

 
111

 
12

 
9,217

Lease financing
557

 
14

 
3

 
1

 
575

International
993

 
19

 
9

 
3

 
1,024

Total business loans
45,553

 
937

 
773

 
171

 
47,434

 
 
 
 
 
 
 
 
 
 
Retail loans:
 
 
 
 
 
 
 
 
 
Residential mortgage
1,887

 
2

 

 
35

 
1,924

Consumer:
 
 
 
 
 
 
 
 
 
Home equity
1,727

 

 
8

 
18

 
1,753

Other consumer
686

 
4

 

 

 
690

Total consumer
2,413

 
4

 
8

 
18

 
2,443

Total retail loans
4,300

 
6

 
8

 
53

 
4,367

Total loans
$
49,853

 
$
943

 
$
781

 
$
224

 
$
51,801

December 31, 2018
 
 
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
Commercial
$
30,817

 
$
464

 
$
554

 
$
141

 
$
31,976

Real estate construction:
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (e)
2,664

 
23

 

 

 
2,687

Other business lines (f)
382

 
8

 

 

 
390

Total real estate construction
3,046

 
31

 

 

 
3,077

Commercial mortgage:
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (e)
1,682

 
14

 
45

 
2

 
1,743

Other business lines (f)
7,157

 
118

 
70

 
18

 
7,363

Total commercial mortgage
8,839

 
132

 
115

 
20

 
9,106

Lease financing
500

 
3

 
2

 
2

 
507

International
996

 
4

 
10

 
3

 
1,013

Total business loans
44,198

 
634

 
681

 
166

 
45,679

 
 
 
 
 
 
 
 
 
 
Retail loans:
 
 
 
 
 
 
 
 
 
Residential mortgage
1,931

 
3

 

 
36

 
1,970

Consumer:
 
 
 
 
 
 
 
 
 
Home equity
1,738

 

 
8

 
19

 
1,765

Other consumer
748

 
1

 

 

 
749

Total consumer
2,486

 
1

 
8

 
19

 
2,514

Total retail loans
4,417

 
4

 
8

 
55

 
4,484

Total loans
$
48,615

 
$
638

 
$
689

 
$
221

 
$
50,163

(a)
Includes all loans not included in the categories of special mention, substandard or nonaccrual.
(b)
Special mention loans are accruing loans that have potential credit weaknesses that deserve management’s close attention, such as loans to borrowers who may be experiencing financial difficulties that may result in deterioration of repayment prospects from the borrower at some future date. This category is generally consistent with the "special mention" category as defined by regulatory authorities.
(c)
Substandard loans are accruing loans that have a well-defined weakness, or weaknesses, such as loans to borrowers who may be experiencing losses from operations or inadequate liquidity of a degree and duration that jeopardizes the orderly repayment of the loan. Substandard loans also are distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. This category is generally consistent with the "substandard" category as defined by regulatory authorities.
(d)
Nonaccrual loans are loans for which the accrual of interest has been discontinued. For further information regarding nonaccrual loans, refer to the Nonperforming Assets subheading in Note 1 - Basis of Presentation and Accounting Policies - on pages F-52 and F-53 in the Corporation's 2018 Annual Report. A significant majority of nonaccrual loans are generally consistent with the "substandard" category and the remainder are generally consistent with the "doubtful" category as defined by regulatory authorities.
(e)
Primarily loans to real estate developers.
(f)
Primarily loans secured by owner-occupied real estate.

13

Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

The following table summarizes nonperforming assets.
(in millions)
June 30, 2019
 
December 31, 2018
Nonaccrual loans
$
224

 
$
221

Reduced-rate loans (a)
6

 
8

Total nonperforming loans
230

 
229

Foreclosed property (b)
3

 
1

Total nonperforming assets
$
233

 
$
230

(a)
Comprised of reduced-rate retail loans.
(b)
Included $3 million of foreclosed residential real estate properties at June 30, 2019, compared to none at December 31, 2018.
There were no retail loans secured by residential real estate properties in process of foreclosure included in nonaccrual loans at June 30, 2019, compared to $1 million at December 31, 2018.
Allowance for Credit Losses
The following table details the changes in the allowance for loan losses and related loan amounts.
 
2019
 
2018
(in millions)
Business Loans
 
Retail Loans
 
Total
 
Business Loans
 
Retail Loans
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
608

 
$
39

 
$
647

 
$
653

 
$
45

 
$
698

Loan charge-offs
(43
)
 
(1
)
 
(44
)
 
(18
)
 
(2
)
 
(20
)
Recoveries on loans previously charged-off
10

 
1

 
11

 
22

 
1

 
23

Net loan (charge-offs) recoveries
(33
)
 

 
(33
)
 
4

 
(1
)
 
3

Provision for loan losses
43

 

 
43

 
(21
)
 
(2
)
 
(23
)
Foreign currency translation adjustment

 

 

 
(1
)
 

 
(1
)
Balance at end of period
$
618

 
$
39

 
$
657

 
$
635

 
$
42

 
$
677

 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
627

 
$
44

 
$
671

 
$
661

 
$
51

 
$
712

Loan charge-offs
(62
)
 
(2
)
 
(64
)
 
(54
)
 
(3
)
 
(57
)
Recoveries on loans previously charged-off
18

 
2

 
20

 
30

 
2

 
32

Net loan charge-offs
(44
)
 

 
(44
)
 
(24
)
 
(1
)
 
(25
)
Provision for loan losses
35

 
(5
)
 
30

 
(1
)
 
(8
)
 
(9
)
Foreign currency translation adjustment

 

 

 
(1
)
 

 
(1
)
Balance at end of period
$
618

 
$
39

 
$
657

 
$
635

 
$
42

 
$
677

 
 
 
 
 
 
 
 
 
 
 
 
As a percentage of total loans
1.30
%
 
0.89
%
 
1.27
%
 
1.40
%
 
0.96
%
 
1.36
%
 
 
 
 
 
 
 
 
 
 
 
 
June 30
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
38

 
$
1

 
$
39

 
$
39

 
$

 
$
39

Collectively evaluated for impairment
580

 
38

 
618

 
596

 
42

 
638

Total allowance for loan losses
$
618

 
$
39

 
$
657

 
$
635

 
$
42

 
$
677

Loans:
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
207

 
$
33

 
$
240

 
$
310

 
$
30

 
$
340

Collectively evaluated for impairment
47,227

 
4,334

 
51,561

 
45,052

 
4,400

 
49,452

Total loans evaluated for impairment
$
47,434

 
$
4,367

 
$
51,801

 
$
45,362

 
$
4,430

 
$
49,792



14

Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Changes in the allowance for credit losses on lending-related commitments, included in accrued expenses and other liabilities on the Consolidated Balance Sheets, are summarized in the following table.
&