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COMERICA INC /NEW/ - Quarter Report: 2022 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, 2022
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)
___________________________________________________________________________________
Delaware38-1998421
(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 classTrading symbolName of each exchange on which registered
Common Stock, $5 par valueCMANew 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 26, 2022: 130,819,770 shares


Table of Contents
COMERICA INCORPORATED AND SUBSIDIARIES
TABLE OF CONTENTS


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, 2022December 31, 2021
(unaudited)
ASSETS
Cash and due from banks$1,631 $1,236 
Interest-bearing deposits with banks5,902 21,443 
Other short-term investments160 197 
Investment securities available-for-sale20,829 16,986 
Commercial loans31,259 29,366 
Real estate construction loans2,465 2,948 
Commercial mortgage loans11,855 11,255 
Lease financing653 640 
International loans1,291 1,208 
Residential mortgage loans1,753 1,771 
Consumer loans2,178 2,097 
Total loans51,454 49,285 
Allowance for loan losses(563)(588)
Net loans50,891 48,697 
Premises and equipment422 454 
Accrued income and other assets7,054 5,603 
Total assets$86,889 $94,616 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits$42,308 $45,800 
Money market and interest-bearing checking deposits28,409 31,349 
Savings deposits3,342 3,167 
Customer certificates of deposit1,686 1,973 
Foreign office time deposits20 50 
Total interest-bearing deposits33,457 36,539 
Total deposits75,765 82,339 
Accrued expenses and other liabilities2,059 1,584 
Medium- and long-term debt2,630 2,796 
Total liabilities80,454 86,719 
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 surplus2,204 2,175 
Accumulated other comprehensive loss(1,954)(212)
Retained earnings10,752 10,494 
Less cost of common stock in treasury - 97,387,508 shares at 6/30/2022 and 97,476,872 shares at 12/31/2021
(6,102)(6,095)
Total shareholders’ equity6,435 7,897 
Total liabilities and shareholders’ equity$86,889 $94,616 
See notes to consolidated financial statements (unaudited).
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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)2022202120222021
INTEREST INCOME
Interest and fees on loans$454 $404 $837 $790 
Interest on investment securities100 70 177 139 
Interest on short-term investments23 32 
Total interest income577 479 1,046 938 
INTEREST EXPENSE
Interest on deposits12 
Interest on medium- and long-term debt12 21 18 
Total interest expense16 14 29 30 
Net interest income561 465 1,017 908 
Provision for credit losses10 (135)(1)(317)
Net interest income after provision for credit losses551 600 1,018 1,225 
NONINTEREST INCOME
Card fees69 84 138 155 
Fiduciary income62 60 120 113 
Service charges on deposit accounts50 47 98 95 
Commercial lending fees30 27 52 45 
Derivative income29 22 51 52 
Bank-owned life insurance12 25 20 
Letter of credit fees10 18 20 
Brokerage fees
Other noninterest income21 46 
Total noninterest income268 284 512 554 
NONINTEREST EXPENSES
Salaries and benefits expense294 277 583 559 
Outside processing fee expense62 71 124 135 
Software expense41 38 80 77 
Occupancy expense40 38 78 77 
Equipment expense13 13 24 25 
Advertising expense15 15 
FDIC insurance expense16 13 
Other noninterest expenses16 10 35 
Total noninterest expenses482 463 955 910 
Income before income taxes337 421 575 869 
Provision for income taxes76 93 125 191 
NET INCOME261 328 450 678 
Less:
Income allocated to participating securities
Preferred stock dividends11 11 
Net income attributable to common shares$255 $321 $437 $664 
Earnings per common share:
Basic$1.94 $2.35 $3.33 $4.81 
Diluted1.92 2.32 3.29 4.76 
Comprehensive (loss) income(520)313 (1,292)494 
Cash dividends declared on common stock89 92 178 187 
Cash dividends declared per common share0.68 0.68 1.36 1.36 
See notes to consolidated financial statements (unaudited).

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

Accumulated
Nonredeemable Common StockOtherTotal
Preferred SharesCapitalComprehensiveRetainedTreasuryShareholders'
(in millions, except per share data)StockOutstandingAmountSurplus(Loss) IncomeEarningsStockEquity
BALANCE AT MARCH 31, 2021$394 139.6 $1,141 $2,183 $(105)$9,975 $(5,436)$8,152 
Net income— — — — — 328 — 328 
Other comprehensive loss, net of tax— — — — (15)— — (15)
Cash dividends declared on common stock ($0.68 per share)
— — — — — (92)— (92)
Cash dividends on preferred stock— — — — — (5)— (5)
Purchase of common stock— (5.8)— (24)— — (426)(450)
Net issuance of common stock under employee stock plans— 0.1 — (3)— (4)13 
Share-based compensation— — — — — — 
BALANCE AT JUNE 30, 2021$394 133.9 $1,141 $2,163 $(120)$10,202 $(5,849)$7,931 
BALANCE AT MARCH 31, 2022$394 130.7 $1,141 $2,194 $(1,173)$10,585 $(6,105)$7,036 
Net income— — — — — 261 — 261 
Other comprehensive loss, net of tax— — — — (781)— — (781)
Cash dividends declared on common stock ($0.68 per share)
— — — — — (89)— (89)
Cash dividends declared on preferred stock— — — — — (5)— (5)
Net issuance of common stock under employee stock plans— 0.1 — (1)— — 
Share-based compensation— — — 11 — — — 11 
BALANCE AT JUNE 30, 2022$394 130.8 $1,141 $2,204 $(1,954)$10,752 $(6,102)$6,435 
BALANCE AT DECEMBER 31, 2020$394 139.2 $1,141 $2,185 $64 $9,727 $(5,461)$8,050 
Net income— — — — — 678 — 678 
Other comprehensive loss, net of tax— — — — (184)— — (184)
Cash dividends declared on common stock ($1.36 per share)
— — — — — (187)— (187)
Cash dividends declared on preferred stock— — — — — (11)— (11)
Purchase of common stock— (5.9)— (24)— — (429)(453)
Net issuance of common stock under employee stock plans— 0.6 — (27)— (5)41 
Share-based compensation— — — 29 — — — 29 
BALANCE AT JUNE 30, 2021$394 133.9 $1,141 $2,163 $(120)$10,202 $(5,849)$7,931 
BALANCE AT DECEMBER 31, 2021$394 130.7 $1,141 $2,175 $(212)$10,494 $(6,095)$7,897 
Net income— — — — — 450 — 450 
Other comprehensive loss, net of tax— — — — (1,742)— — (1,742)
Cash dividends declared on common stock ($1.36 per share)
— — — — — (178)— (178)
Cash dividends declared on preferred stock— — — — — (11)— (11)
Purchase of common stock— (0.4)— — — — (36)(36)
Net issuance of common stock under employee stock plans— 0.5 — (10)— (3)29 16 
Share-based compensation— — — 39 — — — 39 
BALANCE AT JUNE 30, 2022$394 130.8 $1,141 $2,204 $(1,954)$10,752 $(6,102)$6,435 
See notes to consolidated financial statements (unaudited).


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

Six Months Ended June 30,
(in millions)20222021
OPERATING ACTIVITIES
Net income$450 $678 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses(1)(317)
(Benefit) provision for deferred income taxes(23)69 
Depreciation and amortization46 51 
Net periodic defined benefit credit(45)(41)
Share-based compensation expense39 29 
Net amortization of securities18 16 
Net gains on sales of foreclosed property and other repossessed assets(2)— 
Net change in:
Accrued income receivable(42)
Accrued expenses payable(44)31 
Other, net(748)(514)
Net cash (used in) provided by operating activities(352)
INVESTING ACTIVITIES
Investment securities available-for-sale:
Maturities and redemptions1,454 2,819 
Purchases(7,141)(3,828)
Net change in loans(2,528)2,616 
Proceeds from sales of foreclosed property and other repossessed assets
Net increase in premises and equipment(41)(35)
Federal Home Loan Bank stock:
Redemptions— 115 
Proceeds from bank-owned life insurance settlements14 
Other, net(12)
Net cash (used in) provided by investing activities(8,239)1,689 
FINANCING ACTIVITIES
Net change in:
Deposits(6,346)2,481 
Medium- and long-term debt:
Maturities and redemptions— (2,800)
Preferred stock:
Cash dividends paid(11)(11)
Common stock:
Repurchases(40)(459)
Cash dividends paid(178)(190)
Issuances under employee stock plans21 18 
Other, net(1)
Net cash used in financing activities(6,555)(958)
Net (decrease) increase in cash and cash equivalents(15,146)734 
Cash and cash equivalents at beginning of period22,679 15,767 
Cash and cash equivalents at end of period$7,533 $16,501 
Interest paid$28 $30 
Income taxes paid102 96 
See notes to consolidated financial statements (unaudited).
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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, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. 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, 2021.
Recently Issued Accounting Pronouncements
In March 2022, the FASB issued ASU No. 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosures” (ASU 2022-02), which eliminates the accounting for troubled debt restructuring (TDR) while expanding modification and vintage disclosure requirements. Under the previous guidance, a TDR occurs when a loan to a borrower experiencing financial difficulty is restructured with a concession provided that a creditor would not otherwise consider. ASU 2022-02 removes the TDR accounting model, instead requiring modifications to apply existing refinancing and restructuring guidance. The update also requires additional disclosures on the nature, magnitude and subsequent performance of certain types of modifications with borrowers experiencing financial difficulties. ASU 2022-02 further included a requirement to disclose gross charge-offs incurred by year of origination of the related loan or lease. ASU 2022-02 is effective for the Corporation on January 1, 2023, and must be applied prospectively, except that the recognition and measurement of TDRs may be applied using a modified retrospective approach. Early adoption is permitted. The Corporation is evaluating the impact of the new guidance to its disclosures but does not expect there to be a material impact on its financial condition or results of operation.
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.
Investment securities available-for-sale, derivatives, deferred compensation plans and equity securities with readily determinable fair values (primarily money market mutual funds) 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, 2021 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, 2022 and December 31, 2021.
(in millions)TotalLevel 1Level 2Level 3
June 30, 2022
Deferred compensation plan assets$91 $91 $— $— 
Equity securities51 51 — — 
Investment securities available-for-sale:
U.S. Treasury securities2,802 2,802 — — 
Residential mortgage-backed securities (a)13,165 — 13,165 — 
Commercial mortgage-backed securities (a)4,862 — 4,862 — 
Total investment securities available-for-sale20,829 2,802 18,027 — 
Derivative assets:
Interest rate contracts126 — 126 — 
Energy contracts1,591 — 1,591 — 
Foreign exchange contracts45 — 45 — 
Total derivative assets1,762 — 1,762 — 
Total assets at fair value$22,733 $2,944 $19,789 $— 
Derivative liabilities:
Interest rate contracts$401 $— $401 $— 
Energy contracts1,583 — 1,583 — 
Foreign exchange contracts35 — 35 — 
Other financial derivative12 — — 12 
Total derivative liabilities2,031 — 2,019 12 
Deferred compensation plan liabilities91 91 — — 
Total liabilities at fair value$2,122 $91 $2,019 $12 
December 31, 2021
Deferred compensation plan assets$113 $113 $— $— 
Equity securities62 62 — — 
Investment securities available-for-sale:
U.S. Treasury securities2,993 2,993 — — 
Residential mortgage-backed securities (a)13,288 — 13,288 — 
Commercial mortgage-backed securities (a)705 — 705 — 
Total investment securities available-for-sale16,986 2,993 13,993 — 
Derivative assets:
Interest rate contracts239 — 213 26 
Energy contracts670 — 670 — 
Foreign exchange contracts19 — 19 — 
Total derivative assets928 — 902 26 
Total assets at fair value$18,089 $3,168 $14,895 $26 
Derivative liabilities:
Interest rate contracts$69 $— $69 $— 
Energy contracts662 — 662 — 
Foreign exchange contracts16 — 16 — 
Other financial derivative13 — — 13 
Total derivative liabilities760 — 747 13 
Deferred compensation plan liabilities113 113 — — 
Total liabilities at fair value$873 $113 $747 $13 
(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 3 fair value measurements during each of the three- and six-month periods ended June 30, 2022 and 2021.
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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, 2022 and 2021.
Net Realized/Unrealized Gains (Losses) (Pretax) Recorded in Earnings (a)
(in millions)Balance at Beginning of PeriodRealizedUnrealizedSettlementsBalance at End of Period
Three Months Ended June 30, 2022
Derivative assets:
Interest rate contracts$12 $— $— $(12)$— 
Derivative liabilities:
Other financial derivative(12)— — — (12)
Three Months Ended June 30, 2021
Derivative assets:
Interest rate contracts$24 $— $$— $29 
Derivative liabilities:
Other financial derivative(11)— (1)— (12)
Six Months Ended June 30, 2022
Derivative assets:
Interest rate contracts$26 $— $— $(26)$— 
Derivative liabilities:
Other financial derivative(13)— — (12)
Six Months Ended June 30, 2021
Derivative assets:
Interest rate contracts$39 $— $(10)$— $29 
Derivative liabilities:
Other financial derivative(11)— (1)— (12)
(a)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.

Assets and Liabilities Recorded 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.
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Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries
The following table presents assets recorded at fair value on a nonrecurring basis at June 30, 2022 and December 31, 2021. No liabilities were recorded at fair value on a nonrecurring basis at June 30, 2022 and December 31, 2021.
(in millions)Level 3
June 30, 2022
Loans:
Commercial$63 
Real estate construction
Commercial mortgage16 
Total assets at fair value$81 
December 31, 2021
Loans:
Commercial$125 
Real estate construction
Commercial mortgage17 
International
Total assets at fair value$150 
Level 3 assets recorded at fair value on a nonrecurring basis at June 30, 2022 and December 31, 2021 included both nonaccrual loans and TDRs 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 observable inputs, although they are used in the determination of fair value.
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.
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Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries
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)TotalLevel 1Level 2Level 3
June 30, 2022
Assets
Cash and due from banks$1,631 $1,631 $1,631 $— $— 
Interest-bearing deposits with banks5,902 5,902 5,902 — — 
Other short-term investments13 13 13 — — 
Loans held-for-sale— — 
Total loans, net of allowance for loan losses (a)50,891 48,582 — — 48,582 
Customers’ liability on acceptances outstanding— — 
Restricted equity investments92 92 92 — — 
Nonmarketable equity securities (b)11 
Liabilities
Demand deposits (noninterest-bearing)42,308 42,308 — 42,308 — 
Interest-bearing deposits31,771 31,771 — 31,771 — 
Customer certificates of deposit1,686 1,659 — 1,659 — 
Total deposits75,765 75,738 — 75,738 — 
Acceptances outstanding— — 
Medium- and long-term debt2,630 2,630 — 2,630 — 
Credit-related financial instruments(75)(75)— — (75)
December 31, 2021
Assets
Cash and due from banks$1,236 $1,236 $1,236 $— $— 
Interest-bearing deposits with banks21,443 21,443 21,443 — — 
Other short-term investments 16 16 16 — — 
Loans held-for-sale — — 
Total loans, net of allowance for loan losses (a)48,697 49,127 — — 49,127 
Customers’ liability on acceptances outstanding— — 
Restricted equity investments92 92 92 — — 
Nonmarketable equity securities (b) 10 
Liabilities
Demand deposits (noninterest-bearing)45,800 45,800 — 45,800 — 
Interest-bearing deposits34,566 34,566 — 34,566 — 
Customer certificates of deposit1,973 1,968 — 1,968 — 
Total deposits82,339 82,334 — 82,334 — 
Acceptances outstanding— — 
Medium- and long-term debt2,796 2,854 — 2,854 — 
Credit-related financial instruments(59)(59)— — (59)
(a)Included $81 million and $150 million of loans recorded at fair value on a nonrecurring basis at June 30, 2022 and December 31, 2021, 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.
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Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries
NOTE 3 - INVESTMENT SECURITIES
A summary of the Corporation’s investment securities, which are defined by the Corporation as debt securities reported on the Consolidated Balance Sheet as investment securities available-for-sale, follows:
(in millions)Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
June 30, 2022
Investment securities available-for-sale:
U.S. Treasury securities$2,925 $— $123 $2,802 
Residential mortgage-backed securities (a)14,767 1,603 13,165 
Commercial mortgage-backed securities (a)5,093 232 4,862 
Total investment securities available-for-sale$22,785 $$1,958 $20,829 
December 31, 2021
Investment securities available-for-sale:
U.S. Treasury securities$3,010 $22 $39 $2,993 
Residential mortgage-backed securities (a)13,397 67 176 13,288 
Commercial mortgage-backed securities (a)709 705 
Total investment securities available-for-sale$17,116 $91 $221 $16,986 
(a)Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
A summary of the Corporation’s investment securities in an unrealized loss position as of June 30, 2022 and December 31, 2021 follows:
 Less than 12 Months12 Months or moreTotal
(in millions)Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
June 30, 2022
U.S. Treasury securities$1,098 $$1,704 $118 $2,802 $123 
Residential mortgage-backed securities (a)10,475 1,124 2,497 479 12,972 1,603 
Commercial mortgage-backed securities (a)4,494 232 — — 4,494 232 
Total temporarily impaired securities$16,067 $1,361 $4,201 $597 $20,268 $1,958 
December 31, 2021
U.S. Treasury securities$465 $$1,334 $33 $1,799 $39 
Residential mortgage-backed securities (a)7,197 128 1,128 48 8,325 176 
Commercial mortgage-backed securities (a)346 — — 346 
Total temporarily impaired securities$8,008 $140 $2,462 $81 $10,470 $221 
(a)Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
Unrealized losses on investment securities resulted from changes in market interest rates. The Corporation’s portfolio is comprised of securities issued or guaranteed by the U.S. government or government-sponsored enterprises. As such, it is expected that the securities would not be settled at a price less than the amortized cost of the investments. Further, the Corporation does not intend to sell the investments, and it is not more likely than not that it will be required to sell the investments before recovery of amortized costs. At June 30, 2022, the Corporation had 1,211 securities in an unrealized loss position with no allowance for credit losses, comprised of 28 U.S. Treasury securities, 944 residential mortgage-backed securities and 239 commercial mortgage-backed securities.
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Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries
Interest receivable on investment securities totaled $49 million at June 30, 2022 and $36 million at December 31, 2021 and was included in accrued income and other assets on the Consolidated Balance Sheets.
Sales, calls and write-downs of investment securities available-for-sale, computed based on the adjusted cost of the specific security, resulted in no gains or losses during the three months ended and six months ended June 30, 2022 or June 30, 2021.
The following table summarizes the amortized cost and fair values of investment securities by contractual maturity. Securities with multiple maturity dates are classified in the period of final maturity. The actual cash flows of mortgage-backed securities may differ as borrowers of the underlying loans may exercise prepayment options. 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, 2022Amortized CostFair Value
Contractual maturity
Within one year$1,101 $1,096 
After one year through five years2,092 1,971 
After five years through ten years5,018 4,787 
After ten years14,574 12,975 
Total investment securities$22,785 $20,829 
At June 30, 2022, investment securities with a carrying value of $2.8 billion were pledged where permitted or required by law, including $1.3 billion pledged to the Federal Home Loan Bank (FHLB) as collateral for potential future borrowings and $1.6 billion to secure $977 million of liabilities, primarily public and other deposits of state and local government agencies as well as derivative instruments. For information on FHLB borrowings, refer to Note 7.





























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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 amortized cost basis of loans.
Loans Past Due and Still Accruing   
(in millions)30-59
Days
60-89 
Days
90 Days
or More
TotalNonaccrual
Loans
Current
Loans (a)
Total 
Loans
June 30, 2022
Business loans:
Commercial$51 $$$62 $161 $31,036 $31,259 
Real estate construction:
Commercial Real Estate business line (b)
— — — 1,947 1,949 
Other business lines (c)— 507 516 
Total real estate construction2,454 2,465 
Commercial mortgage:
Commercial Real Estate business line (b)
41 — — 41 3,605 3,647 
Other business lines (c)60 70 28 8,110 8,208 
Total commercial mortgage101 111 29 11,715 11,855 
Lease financing— — — 647 653 
International— — 1,282 1,291 
Total business loans160 18 12 190 199 47,134 47,523 
Retail loans:
Residential mortgage21 — 22 49 1,682 1,753 
Consumer:
Home equity— 13 1,615 1,632 
Other consumer— — 541 546 
Total consumer— 14 2,156 2,178 
Total retail loans28 — 30 63 3,838 3,931 
Total loans$188 $20 $12 $220 $262 $50,972 $51,454 
December 31, 2021
Business loans:
Commercial$35 $18 $$59 $173 $29,134 $29,366 
Real estate construction:
Commercial Real Estate business line (b)
— — — — — 2,391 2,391 
Other business lines (c)15 — 16 535 557 
Total real estate construction15 — 16 2,926 2,948 
Commercial mortgage:
Commercial Real Estate business line (b)
— — — — 3,337 3,338 
Other business lines (c)18 16 38 31 7,848 7,917 
Total commercial mortgage18 16 38 32 11,185 11,255 
Lease financing— — — 635 640 
International14 1,189 1,208 
Total business loans78 31 23 132 216 45,069 45,417 
Retail loans:
Residential mortgage— — 36 1,731 1,771 
Consumer:
Home equity— 12 1,514 1,533 
Other consumer32 37 — 527 564 
Total consumer36 44 12 2,041 2,097 
Total retail loans40 48 48 3,772 3,868 
Total loans$118 $35 $27 $180 $264 $48,841 $49,285 
(a)Includes $22 million of loans with deferred payments not considered past due in accordance with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) at December 31, 2021.
(b)Primarily loans to real estate developers.
(c)Primarily loans secured by owner-occupied real estate.

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Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries
The following table presents loans by credit quality indicator (CQI) and vintage year. CQI is 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. Vintage year is the year of origination or major modification.
June 30, 2022
Vintage Year
(in millions)20222021202020192018PriorRevolversRevolvers Converted to TermTotal
Business loans:
Commercial:
Pass (a)$2,637 (b)$4,101 (b)$1,255 (b)$1,284 $703 $1,233 $18,847 $$30,068 
Criticized (c)23 154 113 107 61 107 624 1,191 
Total commercial2,660 4,255 1,368 1,391 764 1,340 19,471 10 31,259 
Real estate construction
Pass (a)225 780 765 422 142 38 89 — 2,461 
Criticized (c)— — — — — — 
Total real estate construction225 780 768 422 143 38 89 — 2,465 
Commercial mortgage
Pass (a)1,569 2,490 1,736 1,475 1,185 2,750 438 — 11,643 
Criticized (c)28 42 36 25 80 — — 212 
Total commercial mortgage1,570 2,518 1,778 1,511 1,210 2,830 438 — 11,855 
Lease financing
Pass (a)152 154 78 54 43 145 — — 626 
Criticized (c)— — 27 
Total lease financing158 157 80 62 50 146 — — 653 
International
Pass (a)283 287 81 74 31 15 487 — 1,258 
Criticized (c)— — — 11 10 — 33 
Total international283 287 88 74 36 26 497 — 1,291 
Total business loans4,896 7,997 4,082 3,460 2,203 4,380 20,495 10 47,523 
Retail loans:
Residential mortgage
Pass (a)184 405 488 138 74 414 — — 1,703 
Criticized (c)— 35 — — 50 
Total residential mortgage184 409 490 146 75 449 — — 1,753 
Consumer:
Home equity
Pass (a)— — — — — 11 1,566 40 1,617 
Criticized (c)— — — — — — 12 15 
Total home equity— — — — — 11 1,578 43 1,632 
Other consumer
Pass (a)48 50 59 11 366 — 544 
Criticized (c)— — — — — — 
Total other consumer48 50 59 10 11 367 — 546 
Total consumer48 50 59 10 22 1,945 43 2,178 
Total retail loans232 459 549 156 76 471 1,945 43 3,931 
Total loans$5,128 $8,456 $4,631 $3,616 $2,279 $4,851 $22,440 $53 $51,454 
Table continues on the following page.

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Table of Contents
Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries
December 31, 2021
Vintage Year
20212020201920182017PriorRevolversRevolvers Converted to TermTotal
Business loans:
Commercial:
Pass (a)$5,270 (b)$1,740 (b)$1,528 $947 $713 $763 $17,241 $10 $28,212 
Criticized (c)101 120 105 86 26 94 620 1,154 
Total commercial5,371 1,860 1,633 1,033 739 857 17,861 12 29,366 
Real estate construction:
Pass (a)458 858 849 424 158 34 132 — 2,913 
Criticized (c)— — 13 — 35 
Total real estate construction458 861 849 437 166 42 135 — 2,948 
Commercial mortgage:
Pass (a)2,491 1,932 1,444 1,343 1,018 2,298 481 — 11,007 
Criticized (c)17 44 50 22 23 87 — 248 
Total commercial mortgage2,508 1,976 1,494 1,365 1,041 2,385 486 — 11,255 
Lease financing
Pass (a)166 88 97 50 38 179 — — 618 
Criticized (c)— 10 — — 22 
Total lease financing166 90 107 58 39 180 — — 640 
International
Pass (a)381 141 103 29 16 480 — 1,151 
Criticized (c)20 10 — 57 
Total international 401 151 106 34 24 487 — 1,208 
Total business loans8,904 4,938 4,189 2,927 1,990 3,488 18,969 12 45,417 
Retail loans:
Residential mortgage
Pass (a)443 527 164 83 111 407 — — 1,735 
Criticized (c)— 21 — — 36 
Total residential mortgage448 527 165 85 118 428 — — 1,771 
Consumer:
Home equity
Pass (a)— — — — — 11 1,460 45 1,516 
Criticized (c)— — — — — 12 17 
Total home equity— — — — — 12 1,472 49 1,533 
Other consumer
Pass (a)101 68 13 31 337 — 560 
Criticized (c)— — — — — — — 
Total other consumer101 68 13 31 341 — 564 
Total consumer101 68 13 43 1,813 49 2,097 
Total retail loans549 595 178 94 119 471 1,813 49 3,868 
Total loans$9,453 $5,533 $4,367 $3,021 $2,109 $3,959 $20,782 $61 $49,285 
(a)Includes all loans not included in the categories of special mention, substandard or nonaccrual.
(b)Includes Small Business Administration Paycheck Protection Program (PPP) loans of $90 million and $458 million at June 30, 2022 and December 31, 2021, respectively.
(c)Includes loans with an internal rating of special mention, substandard loans for which the accrual of interest has not been discontinued and nonaccrual loans. Special mention loans 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. Accruing substandard loans 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 are also distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. 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 page F-52 in the Corporation's 2021 Annual Report. These categories are generally consistent with the "special mention" and "substandard" categories as defined by regulatory authorities. A minority of nonaccrual loans are consistent with the "doubtful" category.

Loan interest receivable totaled $149 million and $120 million at June 30, 2022 and December 31, 2021, respectively and was included in accrued income and other assets on the Consolidated Balance Sheets.

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Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries
Allowance for Credit Losses
The following table details the changes in the allowance for credit losses.
 20222021
(in millions)Business LoansRetail LoansTotalBusiness LoansRetail LoansTotal
Three Months Ended June 30
Balance at beginning of period:
Allowance for loan losses$493 $61 $554 $709 $68 $777 
Allowance for credit losses on lending-related commitments33 12 45 22 30 
Allowance for credit losses526 73 599 731 76 807 
Loan charge-offs(13)— (13)(7)(1)(8)
Recoveries on loans previously charged-off12 13 19 — 19 
Net loan (charge-offs) recoveries(1)— 12 (1)11 
Provision for credit losses:
Provision for loan losses10 (1)(132)(4)(136)
Provision for credit losses on lending-related commitments— (1)
Provision for credit losses11 (1)10 (130)(5)(135)
Balance at end of period:
Allowance for loan losses502 61 563 589 63 652 
Allowance for credit losses on lending-related commitments34 12 46 24 31 
Allowance for credit losses$536 $73 $609 $613 $70 $683 
Six Months Ended June 30
Balance at beginning of period
Allowance for loan losses$531 $57 $588 $895 $53 $948 
Allowance for credit losses on lending-related commitments24 30 35 44 
Allowance for credit losses555 63 618 930 62 992 
Loan charge-offs(30)(1)(31)(22)(2)(24)
Recoveries on loans previously charged-off21 23 31 32 
Net loan (charge-offs) recoveries(9)(8)(1)
Provision for credit losses:
Provision for loan losses(20)(17)(315)11 (304)
Provision for credit losses on lending-related commitments10 16 (11)(2)(13)
Provision for credit losses(10)(1)(326)(317)
Balance at end of period:
Allowance for loan losses502 61 563 589 63 652 
Allowance for credit losses on lending-related commitments34 12 46 24 31 
Allowance for credit losses$536 $73 $609 $613 $70 $683 
Allowance for loan losses as a percentage of total loans1.06 %1.55 %1.09 %1.27 %1.63 %1.30 %
Allowance for credit losses as a percentage of total loans1.13 1.85 1.18 1.32 1.80 1.36 









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Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries
Nonaccrual Loans
The following table presents additional information regarding nonaccrual loans. Interest income of $2 million was recognized on nonaccrual loans for both the three months ended June 30, 2022 and 2021, and $4 million for both the six months ended June 30, 2022 and 2021.
(in millions)Nonaccrual
Loans with
No Related
Allowance
Nonaccrual
Loans with
Related
Allowance
Total
Nonaccrual
Loans
June 30, 2022
Business loans:
Commercial$67 $94 $161 
Real estate construction:
Other business lines (a)— 
Commercial mortgage:
Commercial Real Estate business line (b)— 
Other business lines (a)24 28 
Total commercial mortgage25 29 
International— 
Total business loans76 123 199 
Retail loans:
Residential mortgage49 — 49 
Consumer:
Home equity13 — 13 
Other consumer— 
Total consumer14 — 14 
Total retail loans63 — 63 
Total nonaccrual loans$139 $123 $262 
December 31, 2021
Business loans:
Commercial$