Comerica Incorporated (NYSE: CMA) is a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Business Bank, The Retail Bank, and Wealth Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico.
We have taken significant steps to transform our company for the better. As a result of the hard work of our entire team, an action-oriented improvement plan and a sharp focus on results, we emerged from 2016 a stronger and more confident organization, well positioned for the road ahead. This was positively reflected in our stock’s performance and increased profitability as we moved through the year.
As always, we are committed to providing exceptional experiences for our customers and serving as their trusted advisor, while diligently working to reduce costs and drive efficiencies. Although we have consistently posted superior average loans and deposits per employee relative to our peers, we recognized that we needed to do more to improve returns and enhance shareholder value. As a result, in July 2016, we announced a transformational, enterprise-wide initiative to help grow efficiency and revenues, which we call GEAR Up.
Today, GEAR Up is already making a substantial contribution to our bottom line. Through GEAR Up, we identified and began in earnest executing on more than 20 work streams. As promised, we achieved more than $25 million in expense savings in 2016. In total, by the end of 2018, we expect to drive at least $270 million in additional pretax income, relative to when we began the program.
Expanded product offerings, enhanced sales tools and training and better customer analytics are expected to increase customer penetration of our products. We’ve also streamlined leadership across our organization to support speed and simplicity of getting business done, which has resulted in renewed vigor and focus for our colleagues.
We’ve taken a multifaceted approach to cutting costs, including reducing our workforce by approximately nine percent, redesigning our retirement program, optimizing real estate, streamlining operational processes, selectively outsourcing technology functions and reducing technology system applications.
Workforce reductions included the elimination of about 30 percent of our management positions in order to get closer to our customers and accelerate decision making, while ensuring we maintain our high standards for customer service and deep expertise and experience. Our new retirement program continues to provide highly competitive benefits and is expected to contribute approximately $33 million in savings in 2017. We are implementing technological enhancements, such as digitizing our credit processes to enhance data collection and analysis and improve the customer experience, as well as optimizing our infrastructure and substantially reducing the number of IT applications across the bank.
And we have also begun rationalizing our real estate. While we remain committed to our footprint, with the advancement of technology and customers' migration to a broader use of digital channels, we need less space to operate our business. The consolidation of 38 banking centers, or about eight percent of our network, of which four were closed in the second quarter and 15 were closed in the fourth quarter, is expected to result in $10 million to $13 million per annum in savings. This is net of customer attrition, which is expected to be nominal as we have another banking center within two to five miles for the bulk of the locations that are being closed. Also, we have developed a plan to consolidate operations and office space, and are targeting a 500,000-square-foot reduction in real estate, which should result in approximately $7 million in savings in 2018.
Collectively, these actions take us a long way towards our goal of achieving a double-digit return on equity in 2018. We expect to meet or exceed this goal with sustained growth, net of investment, normal credit costs, continued equity buybacks and assuming only a modest increase in rates. In addition, we are targeting an efficiency ratio of at or below 60 percent by year-end 2018 and we believe that the December increase in rates will help us reach this goal even faster. Importantly, while rising rates can be a significant benefit to Comerica, we are committed to these initiatives and are not relying on rate increases or a better economic environment to achieve our objectives.
We believe our stock’s performance in part reflects that investors recognize the value of our GEAR Up initiative. In 2016, Comerica's stock increased 63 percent, compared to a year ago, outperforming all of our peers as well as the KBW Index and S&P 500 Index. In fact, in the S&P 500 Index, we were the best performing financial stock and among the top 10 performers overall.
I, along with our executive team, remain very confident that we will continue to meet the financial targets that we have established for GEAR Up. We expect the actions we are taking will ensure that we remain a strong partner and trusted advisor for our clients in the future, while enhancing shareholder value and achieving a higher level of returns for our shareholders.
2016 Financial Highlights
We reported 2016 net income of $477 million or $2.68 per share, which included $0.34 in restructuring charges. Earnings per share increased six percent over 2015, excluding these restructuring charges,* as we began to reap the benefits of our GEAR Up initiatives, as well as rising rates. Also, we increased the size of our equity buyback by 25 percent, which is a reflection of our strong capital position and solid financial performance.
Excluding the $641 million reduction in energy loans, average loans increased over $1 billion or 2 percent. The most notable increases in average loans came from areas where we have deep expertise, such as Commercial Real Estate, National Dealer Services, and Mortgage Banker Finance.
Average deposits have grown 32 percent over the last five years and reflect our focus on building long-term client relationships. In 2016, noninterest-bearing deposits increased $1.7 billion, or 6 percent, while interest-bearing deposits declined $2.2 billion. Altogether, total average deposits declined one percent and reflected the adjustments made in early 2016 for the new Liquidity Coverage Ratio (LCR) requirements, which were mostly offset by significant growth in the third and fourth quarter of 2016.
*Earnings per share decreased 6 percent over 2015, including restructuring charges. For 2016, earnings per share excluding restructuring charges is calculated by taking the net income available to common shareholders ($473 million), plus restructuring charges net of tax ($59 million), divided by diluted average common shares (177 million).
We had $1.8 billion of net interest income in 2016, an increase of 6 percent, primarily the result of higher interest rates, loan growth and a larger securities portfolio, partially offset by modestly higher debt costs.
Credit quality continued to be strong. The provision for credit losses increased primarily due to a larger reserve required for Energy loans in the first quarter of 2016, partially offset by improvements in the remainder of the portfolio. Net charge-offs of 32 basis points were at the low end of our through-the-cycle average, and excluding energy line of business, our net charge-offs were 13 basis points.
With respect to noninterest income, customer-driven fees increased $22 million, or over two percent. We had a large increase in card fees, as well as growth in fiduciary, foreign exchange and brokerage fees as we continue to focus on growing and expanding relationships.
Noninterest expenses declined $23 million after excluding restructuring charges of $93 million, as well as a $33 million release of litigation reserves in 2015. Our GEAR Up initiative drove over $25 million in expense savings.
In June 2016, we announced that the Federal Reserve did not object to our 2016 Capital Plan. In April and July 2016, our board of directors increased the quarterly cash dividend for common stock by 5 percent and 4.5 percent, respectively, to 23 cents per share. We repurchased 6.6 million shares in 2016 under our equity repurchase program. Through the buyback and dividends, we returned $458 million, or 96 percent, of 2016 net income to shareholders. Our regulatory capital levels remain comfortably above the threshold to be considered well-capitalized.
In summary, the skillful execution of our GEAR Up initiative, a modest rise in rates, and a 25 percent increase in our equity repurchase program resulted in a six percent increase in our 2016 earnings per share before restructuring expenses, and improvements in our efficiency ratio and returns on assets and equity. Our book value increased three percent over the past year, to $44.47, and tangible book value per share increased four percent over the past year, to $40.79, as we continue to focus on creating long-term shareholder value.**
**See Supplemental Financial Data section for reconcilements of non-GAAP financial measures.
Relationship Banking Strategy and Balanced Geographic Footprint Keys to Success
Our relationship banking strategy and balanced geographic markets are important drivers of our success. Comerica strives to be the trusted advisor to our clients, providing them with financial products and services they need to prosper. Our geographic footprint is well situated and provides diversity and significant growth opportunities. We remain committed to delivering exceptional customer experiences that exceed expectations and deliver a higher level of banking.
Regarding our footprint, we have a strong presence in the major metropolitan areas of Texas, California and Michigan, providing us with a balanced market presence. We also have locations in Arizona and Florida, with certain businesses operating in several other states, as well as Canada and Mexico. While our unique geographic footprint provides us with economic diversity, we operate as ‘one bank’ and our policies, procedures and systems are integrated across our footprint. A single platform provides significant synergies and is highly efficient and cost effective.
TEXAS: We’ve had a presence in Texas for almost three decades and moved our corporate headquarters to Dallas nearly 10 years ago. We have operations throughout Dallas-Fort Worth, Houston, Austin, and San Antonio. We continue to leverage our standing as the largest U.S. commercial bank headquartered in the state to generate new customer relationships.
The Texas economy has proved to be very resilient in adjusting to the challenging low oil price environment. We believe that the state’s important energy sector is starting to turn the corner, aided by firmer prices and strong demand. We expect Texas to continue to generate new jobs and business opportunities, supported by a healthier energy sector and a stronger U.S. economy in 2017.
CALIFORNIA: We have had a presence in California for more than 25 years. San Jose serves as our market headquarters. Additionally, we have a presence in the Greater San Francisco area, Los Angeles, Orange County, San Diego, Sacramento, and Santa Cruz/Monterey.
We expect California’s economy to be a solid performer in 2017. Expanding U.S. and global economies plus the accelerated diffusion of new technologies into the broader economy will support the state’s important technology sector. Likewise, improving domestic and international economic conditions are positive factors for the state’s entertainment industry.
MICHIGAN: In Michigan, we operate in Detroit, which is our market headquarters, as well as in the Detroit metropolitan area, Ann Arbor, Battle Creek, Grand Rapids, Jackson, Kalamazoo, Lansing, Midland, and Muskegon. We have maintained a continuous presence in Michigan since 1849, and continue to hold the second largest deposit market share in the state, based on the latest FDIC deposit market share survey.
The Michigan economy continues to improve, buoyed by a strengthening manufacturing sector. U.S. auto sales remain strong and the auto industry is in the midst of an exciting surge in new technologies, including the innovation of state-of-the-art “smart car” driving systems. Michigan’s leading academic institutions are playing a key role in developing these new technologies and incubating new business opportunities.
Our Three Strategic Lines of Business
In addition to our diverse footprint, growth is driven by our three strategic lines of business. Our model continues to be weighted toward commercial banking through our Business Bank and complemented by the Retail Bank and Wealth Management.
Within the Business Bank, Middle Market Banking remains our "bread and butter." It is where we have a competitive advantage due to the depth and breadth of our expertise in this area. As part of our GEAR Up initiative, we are taking steps to nationalize our middle market sales process. We are doing this by leveraging our best practices and conducting business in a consistent manner throughout our enterprise. Our focus is on sales enablement, organizational consistency, operational efficiency and talent management. Nationalizing our middle market sales process will be an important initiative for us throughout 2017. And it is expected to result in improved productivities, revenue generation and reduced expenses.
In May, Comerica was honored to be selected by the U.S. Treasury to be their Financial Agent providing merchant card services, also known as Card Acquiring Services. With a five year contract, this business includes approximately 7,000 merchant accounts, representing a multitude of government agencies, and an estimated $12 billion in annual payments volume. This expands our relationship with the U.S. Treasury, which already included DirectExpress®, the program that provides Social Security payments via a pre-paid card, and myRA®, a savings option for those who do not have access to a retirement savings plan at work.
Our Retail Bank continues to focus on ensuring we have the products, services and locations to meet customer needs. In addition to strategically repositioning our banking center network through consolidations and relocations, we completed more than two dozen interior refurbishments in 2016, which included transitions to new design concepts and teller cash recyclers to improve efficiency.
We also successfully deployed transformational technologies at our Greenville banking center in Dallas, building upon the successful deployment of these technologies at banking centers in Michigan and California. Approximately 90 percent of transactions at the Greenville banking center are processed via the ATMs and BankerConnect, our interactive teller-like machine. In addition, we introduced Comerica-branded ATMs at the highly-trafficked Detroit Metropolitan Airport.
Also within the Retail Bank, we made Web Banking and Bill Pay upgrades, including the launch of Web Banking Combined View, which allows our Web Banking customers to combine accounts with different taxpayer identification numbers under one Web Banking ID, fulfilling a significant customer request. Furthermore, we launched a web-based Comerica Insurance Services platform that enables customers to compare shop and buy a variety of insurance products from multiple providers.
Small Business successes in 2016 included the integration of a new centralized underwriting center that supports relationships up to $1.5 million in exposure. This contributed to improved speed-to-market for these types of loans.
Wealth Management enables us to bring private banking, investment management and fiduciary services to our Business Bank and Retail Bank clients. In large part due to our GEAR Up initiative, Wealth Management made notable progress in growing loans and fee income, while controlling expenses, and managing risk appropriately. In 2017, we will launch the Wealth Productivity Transformation initiative, which includes the implementation of a relationship management tool that we believe will enable our colleagues to drive market share and better serve our clients. Wealth Management also expects to leverage technology to increase productivity, increase share of wallet, and reduce time to close.
Well Positioned for Rising Rates
The Federal Reserve increased its benchmark rate 25 basis points in December 2016, marking only the second change it has made to the short-term benchmark rate in eight years. As I previously mentioned, our 2016 financial results benefited meaningfully from the December 2015 rate increase. Comerica's business model continues to be well positioned for a rising rate environment.
Our balance sheet is sensitive to movement in interest rates, since the majority of our revenue is derived from the interest we receive on loans we provide to our clients. Our loan portfolio represents over two-thirds of our total assets as of December 31, 2016, and over 90 percent of our loans are floating rate. Therefore, as rates rise, our portfolio reprices quickly. In addition, more than 50 percent of our deposits are noninterest-bearing, and, as such, are less impacted by movement in rates. They also provide us a source of low-cost funding as loan growth continues.
Energy Portfolio Weathering the Cycle
At year-end 2016, our energy loans had declined $820 million, or 27 percent, from one year ago, bringing our Energy line of business to less than five percent of our total loans. Energy Services, which has been most significantly impacted this cycle, represented less than one percent of our total loan portfolio. The performance of our Energy portfolio has improved. While oil prices have been relatively stable, we continue to be cautious and believe we are properly reserved with our loan loss reserve allocation at over seven percent of Energy loans as of December 31, 2016. We remain committed to the energy sector and believe that in cycles such as the current one, we can further cement our relationship with our clients.
Recent Additions Enhance Strong Board
Our board appointed two new independent directors in 2016: Michael Van de Ven, who is the chief operating officer of Southwest Airlines, and Mike Collins, who had a distinguished 37-year career at the Federal Reserve Bank of Philadelphia. We have a strong and diverse board with a good mix of industry, financial and leadership backgrounds. Given the regulated nature of our industry as well as its cyclicality, we believe it is important to have long-tenured directors with a deep understanding of our business and environment. However, we also recognize the importance of bringing fresh perspectives.
Investments in Cybersecurity Continue
The cybersecurity threat environment is intensifying and Comerica's defenses are ready. Over the past several years, Comerica has met this escalating environment with significant investments in its cybersecurity defensive posture, building a robust program with advanced identification, protection, detection, response and recovery capabilities. We have established a cybersecurity capability that leverages industry standard frameworks and targeted regulatory guidance to provide wide coverage, which we evaluate regularly through independent assessments. Our security operations center and intelligence capabilities are monitoring our systems 24/7, constantly adjusting our defenses to the changing threat environment.
Opportunities for Regulatory Relief
The national election is bringing change to Washington, D.C. and with it, optimism for regulatory relief for banks, particularly those of our size. It now appears to be a legislative priority to reduce complex and costly regulations that burden banks and impact the flow of credit to businesses. We believe there is potential for revision or elimination of certain aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act that could benefit Comerica and the industry as a whole. This includes changes to the definition of a systemically important financial institution (SIFI) from the current $50 billion and above in assets to either a higher asset threshold or a metrics-based formula to determine a firm's true complexity and risk profile. We believe a positive change to the SIFI designation would be a major step toward the kind of regulatory relief that would potentially spur increased lending to businesses, reduce compliance expenses, and allow us to manage capital and liquidity to meet our needs in a more prudent manner.
Our Strong Commitment to Community, Diversity, Financial Literacy and Sustainability
Comerica continued its commitment to the communities in which we operate in 2016. Comerica contributed more than $8 million to not-for-profit organizations in the markets we serve, and, in addition, our employees raised nearly $1.7 million for the United Way and Black United Fund. Our team also donated their personal time and talents - about $1.3 million worth in volunteer hours - to make a positive difference in our local communities.
Some of the recognition we received for our efforts included the prestigious Corporate Social Responsibility Award from the Financial Services Roundtable. In addition, Comerica was named as one of the 50 most community-minded companies in the nation as part of the Civic 50, an initiative of Points of Light, the world's largest organization dedicated to volunteer service.
Our community “Shred Day” events continue to serve as the largest, most visible and most successful brand awareness, public education, colleague engagement, and community service campaigns that we host. Working with event partner Iron Mountain at shred-day events in Dallas, Houston, Phoenix and Detroit, we securely destroyed and recycled more than 800,000 pounds of paper in 2016, while gathering donations for local food banks. These signature events continue to provide a triple bottom line: helping reduce fraud and identity theft, freeing up hundreds of tons of space in local landfills, and raising awareness of hunger in our communities.
We marked the fifth year of the Comerica Hatch Detroit Contest by more than doubling our commitment. In addition to providing the grand prize for the winning idea for a new retail business, we invested funds to help launch even more small businesses in the city. Fifteen new businesses are now open, thanks to the contest's success. We sponsored a similar contest in Dallas with the Dallas Entrepreneur Center and Tech Wildcatters. These contests offer us an opportunity to advance the aspirations of entrepreneurs in our markets.
Diversity is an important core value at Comerica. We support 39 diversity-focused teams within the bank that promote employee engagement, business outreach, and diversity awareness and learning among colleagues. Comerica's focus on diversity has been favorably recognized, as we earned a third consecutive perfect 100 rating on the Human Rights Campaign Foundation's 2017 Corporate Equality Index, a national benchmarking survey and report on corporate policies and practices related to LGBT workplace equality.
Black Enterprise magazine placed Comerica on its 2016 “40 Best Companies for Diversity” list. Comerica also ranked No. 2 on the DiversityInc 2016 Top 10 Regional Companies for Diversity. In addition, we were named to LATINO magazine’s 2016 “LATINO 100” list, the fourth annual listing of the top 100 companies providing the most opportunities for Latinos in such areas as education, hiring, workforce diversity, minority business development, governance and philanthropy.
We also ranked among 2016's "Best Places for Women and Diverse Managers to Work" by Diversity MBA, which is a national leadership organization targeting leadership and talent management among professionals, managers and executives. In addition, Comerica was named among the "Top 25 Companies for Diversity in Texas" by the National Diversity Council. The award is based on women and minority representation in executive leadership and on boards of directors.
We continued to expand our financial education efforts throughout our footprint in 2016, with some impressive results. The Comerica Money $ense program, which has been incorporated into the classrooms of 41 elementary schools throughout Maricopa, Palm Beach and Broward counties in Florida, is a web-based financial education program designed by leading technology company, EverFi. During the 2015-2016 school year, more than 2,100 students were served by the Comerica-funded program, with more than 6,000 learning modules completed to help predominantly low- and moderate-income students learn how to make wise financial decisions.
Comerica recognizes the business value created through sustainability and that’s why it is embedded in our core values. We continued our progress on reducing our environmental footprint in line with Comerica’s 2020 Environmental Sustainability Goals and remain ahead of pace on our efforts to reduce greenhouse gas emissions, water consumption, and paper use by 2020. In addition, we exceeded our goal of reducing waste sent to the landfill four years ahead of schedule by achieving a 24.1 percent reduction compared to our goal of 20 percent. Also, Comerica continues to support a green economy with nearly $900 million of environmentally beneficial loans and commitments to companies in 13 different categories.
In 2016, we were once again recognized for our climate change management strategy and emissions reduction efforts through CDP (formerly known as the Carbon Disclosure Project), receiving an “A-“ rating, among the highest scores in the U.S. financial services industry. Our work on supply chain sustainability earned Comerica its third consecutive Green Supply Chain Award from Supply & Demand Chain Executive magazine, and we were pleased to be listed on the FTSE4Good index series for the 8th consecutive year.
Positioned for Future Growth
In closing, 2016 was a pivotal year with the development and implementation of our enterprise-wide GEAR Up initiative. We have made significant progress in executing the expense savings and are fully committed to delivering on the efficiency and revenue opportunities to further enhance our profitability and shareholder value. We also benefited meaningfully from increased interest rates and our overall credit metrics remained strong as we continued to navigate the energy cycle. In addition, there has been much discussion in Washington, D.C. about plans to reduce taxes, provide regulatory relief and fiscal stimulus to drive economic growth. While there is no certainty as to what changes may prevail, we believe our customers and Comerica should benefit if changes are made. We believe we are well positioned for the future as our geographic footprint is well situated and our relationship banking strategy can drive superior growth of loans, deposits and fee income over time.
Thank you for your continued support.
(1) Audit Committee
(2) Governance, Compensation and Nominating Committee
(3) Qualified Legal Compliance Committee
(4) Enterprise Risk Committee
* Committee Chairperson
Delaware |
38-1998421 | |
(State
or Other Jurisdiction of Incorporation) |
(IRS
Employer Identification
Number) |
Large
accelerated
filer ý |
Accelerated
filer o |
Non-accelerated
filer o
(Do not
check if a smaller
reporting
company) |
Smaller
reporting
company o |
F-1 | |
S-1 | |
E-1 |
• |
People: Including the
competence, integrity and succession planning of
customers. |
• |
Purpose: The legal, logical
and productive purposes of the credit
facility. |
• |
Payment: Including the
source, timing and probability of
payment. |
• |
Protection: Including
obtaining alternative sources of repayment, securing the loan, as
appropriate, with collateral and/or third-party guarantees and ensuring
appropriate legal documentation is
obtained. |
• |
Perspective: The
risk/reward relationship and pricing elements (cost of funds; servicing
costs; time value of money; credit risk). |
• |
The borrower's business
model. |
• |
Periodic review of
financial statements including financial statements audited by an
independent certified public accountant when
appropriate. |
• |
The pro-forma financial
condition including financial
projections. |
• |
The borrower's sources and
uses of funds. |
• |
The borrower's debt service
capacity. |
• |
The guarantor's financial
strength. |
• |
A comprehensive review of
the quality and value of collateral, including independent third-party
appraisals of machinery and equipment and commercial real estate, as
appropriate, to determine the advance
rates. |
• |
Physical inspection of
collateral and audits of receivables, as
appropriate. |
• |
General
political, economic or industry conditions, either domestically or
internationally, may be less favorable than
expected. |
• |
Governmental
monetary and fiscal policies may adversely affect the financial services
industry, and therefore impact Comerica's financial condition and results
of operations. |
• |
Proposed
revenue enhancements and efficiency improvements may not be
achieved. |
• |
Comerica
must maintain adequate sources of funding and liquidity to meet regulatory
expectations, support its operations and fund outstanding
liabilities. |
• |
Compliance
with more stringent capital and liquidity requirements may adversely
affect Comerica. |
• |
Declines
in the businesses or industries of Comerica's customers - in particular,
the energy industry - could cause increased credit losses or decreased
loan balances, which could adversely affect
Comerica. |
• |
Unfavorable
developments concerning credit quality could adversely affect Comerica's
financial results. |
• |
Operational
difficulties, failure of technology infrastructure or information security
incidents could adversely affect Comerica's business and
operations. |
• |
Comerica
relies on other companies to provide certain key components of its
business infrastructure, and certain failures could materially adversely
affect operations. |
• |
Changes
in the financial markets, including fluctuations in interest rates and
their impact on deposit pricing, could adversely affect Comerica's net
interest income and balance sheet. |
• |
Reduction
in our credit ratings could adversely affect Comerica and/or the holders
of its securities. |
• |
The
soundness of other financial institutions could adversely affect
Comerica. |
• |
The
introduction, implementation, withdrawal, success and timing of business
initiatives and strategies may be less successful or may be different than
anticipated, which could adversely affect Comerica's
business. |
• |
Damage
to Comerica’s reputation could damage its
businesses. |
• |
Comerica
may not be able to utilize technology to efficiently and effectively
develop, market, and deliver new products and services to its customers.
|
• |
Competitive
product and pricing pressures among financial institutions within
Comerica's markets may change. |
• |
Changes
in customer behavior may adversely impact Comerica's business, financial
condition and results of operations. |
• |
Any
future strategic acquisitions or divestitures may present certain risks to
Comerica's business and operations. |
• |
Management's
ability to maintain and expand customer relationships may differ from
expectations. |
• |
Management's
ability to retain key officers and employees may
change. |
• |
Legal
and regulatory proceedings and related matters with respect to the
financial services industry, including those directly involving Comerica
and its subsidiaries, could adversely affect Comerica or the financial
services industry in general. |
• |
Methods
of reducing risk exposures might not be
effective. |
• |
Terrorist
activities or other hostilities may adversely affect the general economy,
financial and capital markets, specific industries, and
Comerica. |
• |
Catastrophic
events, including, but not limited to, hurricanes, tornadoes, earthquakes,
fires, droughts and floods, may adversely affect the general economy,
financial and capital markets, specific industries, and
Comerica. |
• |
The tax
treatment of corporations could be subject to potential legislative,
administrative or judicial changes or
interpretations. |
• |
Changes
in accounting standards could materially impact Comerica's financial
statements. |
• |
Comerica's
accounting policies and processes are critical to the reporting of
financial condition and results of operations. They require management to
make estimates about matters that are uncertain.
|
Quarter |
High |
Low |
Dividends Per
Share |
Dividend Yield* | |||||||||||
2016 |
|||||||||||||||
Fourth |
$ |
70.44 |
|
$ |
46.75 |
|
$ |
0.23 |
|
1.6 |
% | ||||
Third |
47.81 |
|
38.39 |
|
0.23 |
|
2.1 |
| |||||||
Second |
47.55 |
|
36.27 |
|
0.22 |
|
2.1 |
| |||||||
First |
41.74 |
|
30.48 |
|
0.21 |
|
2.3 |
| |||||||
2015 |
|||||||||||||||
Fourth |
$ |
47.44 |
|
$ |
39.52 |
|
$ |
0.21 |
|
1.9 |
% | ||||
Third |
52.93 |
|
40.01 |
|
0.21 |
|
1.8 |
| |||||||
Second |
53.45 |
|
44.38 |
|
0.21 |
|
1.7 |
| |||||||
First |
47.94 |
|
40.09 |
|
0.20 |
|
1.8 |
| |||||||
*
Dividend yield is calculated by annualizing the quarterly dividend per
share and dividing by an average of the high and low price in the
quarter. |
(shares
in thousands) |
Total Number of Shares
and
Warrants Purchased
as Part
of Publicly
Announced
Repurchase
Plans
or Programs (a) |
Remaining
Repurchase
Authorization
(b) |
Total Number
of
Shares
Purchased
(c) |
Average
Price
Paid Per
Share | ||||||||
Total
first quarter 2016 |
1,183 |
|
15,721 |
|
1,393 |
|
$ |
35.26 |
| |||
Total
second quarter 2016 |
1,483 |
|
14,238 |
|
1,488 |
|
43.78 |
| ||||
Total
third quarter 2016 |
2,123 |
|
22,114 |
|
(d) |
2,134 |
|
45.66 |
| |||
October
2016 |
839 |
|
19,575 |
|
842 |
|
49.88 |
| ||||
November
2016 |
644 |
|
17,834 |
|
645 |
|
57.10 |
| ||||
December
2016 |
302 |
|
15,694 |
|
307 |
|
67.27 |
| ||||
Total
fourth quarter 2016 |
1,785 |
|
15,694 |
|
1,794 |
|
55.45 |
| ||||
Total
2016 |
6,574 |
|
15,694 |
|
6,809 |
|
$ |
45.70 |
|
(a) |
Comerica
made no repurchases of warrants under the repurchase program during the
year ended December 31,
2016.
Upon exercise of a warrant, the number of shares with a value equal to the
aggregate exercise price is withheld from an exercising warrant holder as
payment (known as a "net exercise provision"). During the year ended
December 31,
2016,
Comerica withheld the equivalent of approximately 2,319,000 shares
to cover an aggregate of $68.2
million
in exercise price and issued approximately 2,317,000 shares
to the exercising warrant holders. Shares withheld in connection with the
net exercise provision are not included in the total number of shares or
warrants purchased in the above table. |
(b) |
Maximum
number of shares and warrants that may yet be purchased under the publicly
announced plans or programs. |
(c) |
Includes
approximately 235,000 shares
(including 9,000 shares
in the quarter ended December 31,
2016)
purchased pursuant to deferred compensation plans and shares purchased
from employees to pay for taxes related to restricted stock vesting under
the terms of an employee share-based compensation plan and 26 shares
purchased by affiliated purchasers through employee benefits plan
transactions during the year ended December 31,
2016.
These transactions are not considered part of Comerica's repurchase
program. |
(d) |
Includes
July 26, 2016 equity repurchase authorization for up to an additional 10.0
million shares. |
1. |
Financial
Statements: The financial statements that are filed as part of this report
are included in the Financial Section on pages F-44 through
F-111. | |
2. |
All
of the schedules for which provision is made in the applicable accounting
regulations of the SEC are either not required under the related
instruction, the required information is contained elsewhere in the
Form 10-K, or the schedules are inapplicable and therefore have been
omitted. | |
3. |
Exhibits:
The exhibits listed on the Exhibit Index on pages E-1 through E-5 of this
Form 10-K are filed with this report or are incorporated herein by
reference. |
(dollar
amounts in millions, except per share data) |
|||||||||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 |
2013 |
2012 | ||||||||||||||
EARNINGS
SUMMARY |
|||||||||||||||||||
Net
interest income |
$ |
1,797 |
|
$ |
1,689 |
|
$ |
1,655 |
|
$ |
1,672 |
|
$ |
1,728 |
| ||||
Provision
for credit losses |
248 |
|
147 |
|
27 |
|
46 |
|
79 |
| |||||||||
Noninterest
income (a) |
1,051 |
|
1,035 |
|
857 |
|
874 |
|
863 |
| |||||||||
Noninterest
expenses (a) |
1,930 |
|
(b) |
1,827 |
|
1,615 |
|
1,714 |
|
1,750 |
| ||||||||
Provision
for income taxes |
193 |
|
229 |
|
277 |
|
245 |
|
241 |
| |||||||||
Net
income |
477 |
|
521 |
|
593 |
|
541 |
|
521 |
| |||||||||
Net
income attributable to common shares |
473 |
|
515 |
|
586 |
|
533 |
|
515 |
| |||||||||
PER
SHARE OF COMMON STOCK |
|||||||||||||||||||
Diluted
earnings per common share |
$ |
2.68 |
|
$ |
2.84 |
|
$ |
3.16 |
|
$ |
2.85 |
|
$ |
2.67 |
| ||||
Cash
dividends declared |
0.89 |
|
0.83 |
|
0.79 |
|
0.68 |
|
0.55 |
| |||||||||
Common
shareholders’ equity |
44.47 |
|
43.03 |
|
41.35 |
|
39.22 |
|
36.86 |
| |||||||||
Tangible
common equity (c) |
40.79 |
|
39.33 |
|
37.72 |
|
35.64 |
|
33.36 |
| |||||||||
Market
value |
68.11 |
|
41.83 |
|
46.84 |
|
47.54 |
|
30.34 |
| |||||||||
Average
diluted shares (in millions) |
177 |
|
181 |
|
185 |
|
187 |
|
192 |
| |||||||||
YEAR-END
BALANCES |
|||||||||||||||||||
Total
assets |
$ |
72,978 |
|
$ |
71,877 |
|
$ |
69,186 |
|
$ |
65,224 |
|
$ |
65,066 |
| ||||
Total
earning assets |
67,518 |
|
66,687 |
|
63,788 |
|
60,200 |
|
59,618 |
| |||||||||
Total
loans |
49,088 |
|
49,084 |
|
48,593 |
|
45,470 |
|
46,057 |
| |||||||||
Total
deposits |
58,985 |
|
59,853 |
|
57,486 |
|
53,292 |
|
52,191 |
| |||||||||
Total
medium- and long-term debt |
5,160 |
|
3,058 |
|
2,675 |
|
3,543 |
|
4,720 |
| |||||||||
Total
common shareholders’ equity |
7,796 |
|
7,560 |
|
7,402 |
|
7,150 |
|
6,939 |
| |||||||||
AVERAGE
BALANCES |
|||||||||||||||||||
Total
assets |
$ |
71,743 |
|
$ |
70,247 |
|
$ |
66,336 |
|
$ |
63,933 |
|
$ |
62,569 |
| ||||
Total
earning assets |
66,545 |
|
65,129 |
|
61,560 |
|
59,091 |
|
57,483 |
| |||||||||
Total
loans |
48,996 |
|
48,628 |
|
46,588 |
|
44,412 |
|
43,306 |
| |||||||||
Total
deposits |
57,741 |
|
58,326 |
|
54,784 |
|
51,711 |
|
49,533 |
| |||||||||
Total
medium- and long-term debt |
4,917 |
|
2,905 |
|
2,963 |
|
3,972 |
|
4,818 |
| |||||||||
Total
common shareholders’ equity |
7,674 |
|
7,534 |
|
7,373 |
|
6,965 |
|
7,009 |
| |||||||||
CREDIT
QUALITY |
|||||||||||||||||||
Total
allowance for credit losses |
$ |
771 |
|
$ |
679 |
|
$ |
635 |
|
$ |
634 |
|
$ |
661 |
| ||||
Total
nonperforming loans |
590 |
|
379 |
|
290 |
|
374 |
|
541 |
| |||||||||
Foreclosed
property |
17 |
|
12 |
|
10 |
|
9 |
|
54 |
| |||||||||
Total
nonperforming assets |
607 |
|
391 |
|
300 |
|
383 |
|
595 |
| |||||||||
Net
credit-related charge-offs |
157 |
|
101 |
|
25 |
|
73 |
|
170 |
| |||||||||
Net credit-related
charge-offs as a percentage of average total loans |
0.32 |
% |
0.21 |
% |
0.05 |
% |
0.16 |
% |
0.39 |
% | |||||||||
Allowance for loan losses as
a percentage of total period-end loans |
1.49 |
|
1.29 |
|
1.22 |
|
1.32 |
|
1.37 |
| |||||||||
Allowance for loan losses as
a percentage of total nonperforming loans |
124 |
|
167 |
|
205 |
|
160 |
|
116 |
| |||||||||
RATIOS |
|||||||||||||||||||
Net
interest margin (fully taxable equivalent) |
2.71 |
% |
2.60 |
% |
2.70 |
% |
2.84 |
% |
3.03 |
% | |||||||||
Return
on average assets |
0.67 |
|
0.74 |
|
0.89 |
|
0.85 |
|
0.83 |
| |||||||||
Return
on average common shareholders’ equity |
6.22 |
|
6.91 |
|
8.05 |
|
7.76 |
|
7.43 |
| |||||||||
Dividend
payout ratio |
32.48 |
|
28.33 |
|
24.09 |
|
23.29 |
|
20.52 |
| |||||||||
Average common shareholders’
equity as a percentage of average assets |
10.70 |
|
10.73 |
|
11.11 |
|
10.90 |
|
11.21 |
| |||||||||
Common equity tier 1 capital
as a percentage of risk-weighted assets (d) |
11.09 |
|
10.54 |
|
n/a |
|
n/a |
|
n/a |
| |||||||||
Tier
1 capital as a percentage of risk-weighted assets (d) |
11.09 |
|
10.54 |
|
10.50 |
|
10.64 |
|
10.14 |
| |||||||||
Common
equity ratio |
10.68 |
|
10.52 |
|
10.70 |
|
10.97 |
|
10.67 |
| |||||||||
Tangible
common equity as a percentage of tangible assets (c) |
9.89 |
|
9.70 |
|
9.85 |
|
10.07 |
|
9.76 |
|
(a) |
Effective
January 1, 2015, contractual changes to a card program resulted in a
change to the accounting presentation of the related revenues and
expenses. The effect of this change was an increase of $177 million in
2015 to both noninterest income and noninterest expenses. Amounts prior to
2015 reflect revenues from this card program net of related noninterest
expenses. |
(b) |
Noninterest
expenses in 2016 included restructuring charges of $93
million. |
(c) |
See
Supplemental Financial Data section for reconcilements of non-GAAP
financial measures. |
(d) |
Ratios
calculated based on the risk-based capital requirements in effect at the
time. The U.S. implementation of the Basel III regulatory capital
framework became effective on January 1, 2015, with transitional
provisions. |
• |
2016 progress included a
reduction in workforce and a significant reduction in retirement plan
expense due to a new retirement program, which together resulted in 2016
expense savings of more than $25 million, as well as the consolidation of
19 banking centers. For additional information regarding retirement plan
changes, refer to the "Critical Accounting Policies" section of this
financial review and Note 17 to the consolidated
financial statements. |
• |
Expense reductions are
expected to save an additional $125 million in full-year 2017, relative to
the 2016 GEAR Up savings of more than $25 million, and increase to
approximately $200 million in full-year 2018. This is to be achieved
through continued savings from the reduction in workforce and the new
retirement program, streamlining operational processes, real estate
optimization, including consolidating an additional 19 banking centers in
2017 as well as reducing office and operations space, selective
outsourcing of technology functions and reduction of technology system
applications. |
• |
Revenue enhancements are
expected to ramp-up to approximately $30 million in full-year 2017,
gradually increasing to approximately $70 million in full-year 2018,
through expanded product offerings, enhanced sales tools and training and
improved customer analytics to drive
opportunities. |
• |
Pre-tax restructuring
charges of $140 million to $160 million in total are expected to be
incurred through 2018. This includes restructuring charges totaling
$93
million, which
were incurred through December 31,
2016, and an
additional $25 million to $50 million expected in 2017. For additional
information regarding restructuring charges, refer to Note 22
to the consolidated financial statements. |
• |
Net income was $477 million in 2016, a decrease of
$44
million, or
8
percent,
compared to $521 million in 2015. Net income per diluted
common share was $2.68 in 2016, compared to $2.84
in 2015.
Excluding the after-tax impact of restructuring charges associated with
GEAR Up of $59 million, or $0.34 per share, net income increased $15
million, or 3 percent. |
• |
Average loans were
$49.0
billion in
2016,
an increase of $368 million, or 1
percent,
compared to 2015.
Excluding a $641 million decrease in Energy, average loans increased $1.0
billion, primarily reflecting increases in Commercial Real Estate,
National Dealer Services and Mortgage Banker Finance, partially offset by
decreases in general Middle Market and Corporate
Banking. |
• |
Average deposits decreased
$585
million, or
1
percent, to
$57.7
billion in
2016,
compared to 2015.
The decrease in average deposits reflected a decrease of $2.2 billion, or 7
percent, in
interest-bearing deposits, partially offset by an increase of $1.7 billion, or 6
percent, in
average noninterest-bearing deposits. The decrease in interest-bearing
deposits reflected decreases of $1.3
billion, or
6
percent, in
money market and interest-bearing checking deposits and $1.0 billion, or 24
percent, in
customer certificates of deposit. The decrease in average deposits
primarily reflected purposeful pricing discipline and strategic actions in
light of new Liquidity Coverage Ratio (LCR) rules, with the largest
decreases in |
• |
Net interest income was
$1.8
billion in
2016,
an increase
of $108
million, or
6
percent,
compared to 2015.
The increase
in net interest income resulted primarily from higher interest rates, loan
growth and a larger securities portfolio, partially offset by higher debt
costs. |
• |
The provision for credit
losses was $248 million in 2016, an increase of
$101
million
compared to 2015,
primarily reflecting increased reserves for Energy and energy-related
loans recorded in the first quarter 2016, partially offset by improved
credit quality in the remainder of the portfolio. Net credit-related
charge-offs were $157
million, or
0.32
percent of
average loans, for 2016, an increase of
$46
million
compared to 2015.
The increase was primarily due to an increase in charge-offs in the Energy
portfolio. |
• |
Noninterest income
increased $16
million, or
2
percent, in
2016,
compared to 2015.
Customer-driven fees increased $22 million and non-fee categories declined
$6 million. An increase in card fees as well as growth in fiduciary,
customer derivative and foreign exchange income was partially offset by
lower commercial lending fees and investment banking
income. |
• |
Noninterest expenses
increased $103
million, or
6
percent, in
2016,
compared to 2015.
Excluding $93
million of
restructuring charges related to the GEAR Up initiative and $33 million from the net release of
litigation reserves in 2015, noninterest expenses
decreased $23
million. This
primarily reflected a decrease of $48
million in
salaries and benefits expense, including GEAR Up savings estimated to be
in excess of $25 million as well as an additional decrease in pension
expense, partially offset by the impact of merit increases and one
additional day in 2016. Additionally, increases
in technology expense, outside processing fees and FDIC insurance premiums
were partially offset by decreases in state business taxes and gains from
the early termination of leveraged lease
transactions. |
• |
The provision for income
taxes decreased $36
million in
2016,
compared to 2015.
The effective tax rate was 28.8 percent in 2016, compared to 30.5 percent
in 2015,
primarily reflecting a $10 million increase in tax benefits from the early
termination of certain leveraged lease
transactions. |
• |
The quarterly dividend was
increased to 22 cents
per share in April 2016 and to 23
cents per
share in July 2016. |
• |
The Corporation repurchased
approximately 6.6 million shares of common stock
during 2016
under the equity repurchase program. Together with dividends of
$0.89
per share, $458 million, or 96
percent of
2016
net income, was returned to shareholders. |
• |
Average loans higher, in
line with Gross Domestic Product growth, reflecting increases in most
lines of business and reduced headwinds from a declining Energy
portfolio. |
• |
Net interest income higher,
reflecting the benefit from the December 2016 short-term rate increase and
loan growth, partially offset by higher funding costs and minor loan yield
comparison. |
◦ |
Full-year benefit from the
December rise in short-term rates expected to be more than $70 million,
assuming a 25 percent deposit beta. |
• |
Provision for credit losses
lower, with continued solid performance of the overall
portfolio. |
◦ |
Provision and net
charge-offs in line with historical normal levels of 30-40 basis
points. |
• |
Noninterest income higher,
with the execution of GEAR Up opportunities, modest growth in treasury
management and card fees, as well as wealth management products such as
fiduciary and brokerage services. |
◦ |
Increase of 4 percent to 6
percent. |
• |
Noninterest expenses lower,
reflecting lower restructuring charges and an additional $125 million in
GEAR Up savings, relative to 2016 GEAR Up savings of more than $25
million. Outside processing is expected to increase in line with growing
revenue. Headwinds include increased technology costs and higher FDIC
insurance expense, as well as typical inflationary pressure. The gains of
$13 million in 2016 from early terminations of certain leveraged lease
transactions are not expected to repeat. |
◦ |
Restructuring charges of
$25 million to $50 million, compared to $93 million in
2016. |
◦ |
Remaining noninterest
expenses 1 percent to 2 percent lower. |
◦ |
Decrease of 4 percent to 5
percent including restructuring charges. |
• |
Income tax expense to
approximate 33 percent of pre-tax income excluding the impact of discrete
items such as the tax benefit related to stock compensation of
approximately $14 million recorded during January
2017. |
(dollar
amounts in millions) |
||||||||||||||||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | |||||||||||||||||||||||
Average
Balance |
Interest |
Average
Rate
(a) |
Average
Balance |
Interest |
Average
Rate
(a) |
Average
Balance |
Interest |
Average
Rate
(a) | ||||||||||||||||||
Commercial
loans |
$ |
31,062 |
|
$ |
1,008 |
|
3.26 |
% |
$ |
31,501 |
|
$ |
962 |
|
3.07 |
% |
$ |
29,715 |
|
$ |
923 |
|
3.12 |
% | ||
Real
estate construction loans |
2,508 |
|
91 |
|
3.63 |
|
1,884 |
|
66 |
|
3.48 |
|
1,909 |
|
65 |
|
3.41 |
| ||||||||
Commercial
mortgage loans |
8,981 |
|
314 |
|
3.49 |
|
8,697 |
|
296 |
|
3.41 |
|
8,706 |
|
327 |
|
3.75 |
| ||||||||
Lease
financing |
684 |
|
18 |
|
2.65 |
|
783 |
|
25 |
|
3.17 |
|
834 |
|
19 |
|
2.33 |
| ||||||||
International
loans |
1,367 |
|
50 |
|
3.63 |
|
1,441 |
|
51 |
|
3.58 |
|
1,376 |
|
50 |
|
3.65 |
| ||||||||
Residential
mortgage loans |
1,894 |
|
71 |
|
3.76 |
|
1,878 |
|
71 |
|
3.77 |
|
1,778 |
|
68 |
|
3.82 |
| ||||||||
Consumer
loans |
2,500 |
|
83 |
|
3.32 |
|
2,444 |
|
80 |
|
3.26 |
|
2,270 |
|
73 |
|
3.20 |
| ||||||||
Total
loans (b) (c) |
48,996 |
|
1,635 |
|
3.34 |
|
48,628 |
|
1,551 |
|
3.20 |
|
46,588 |
|
1,525 |
|
3.28 |
| ||||||||
Mortgage-backed
securities |
9,356 |
|
203 |
|
2.19 |
|
9,113 |
|
202 |
|
2.24 |
|
8,970 |
|
209 |
|
2.33 |
| ||||||||
Other
investment securities |
2,992 |
|
44 |
|
1.51 |
|
1,124 |
|
14 |
|
1.25 |
|
380 |
|
2 |
|
0.45 |
| ||||||||
Total
investment securities (d) |
12,348 |
|
247 |
|
2.02 |
|
10,237 |
|
216 |
|
2.13 |
|
9,350 |
|
211 |
|
2.26 |
| ||||||||
Interest-bearing
deposits with banks |
5,099 |
|
26 |
|
0.51 |
|
6,158 |
|
16 |
|
0.26 |
|
5,513 |
|
14 |
|
0.26 |
| ||||||||
Other
short-term investments |
102 |
|
1 |
|
0.61 |
|
106 |
|
1 |
|
0.81 |
|
109 |
|
— |
|
0.57 |
| ||||||||
Total
earning assets |
66,545 |
|
1,909 |
|
2.88 |
|
65,129 |
|
1,784 |
|
2.75 |
|
61,560 |
|
1,750 |
|
2.85 |
| ||||||||
Cash
and due from banks |
1,146 |
|
1,059 |
|
934 |
|
||||||||||||||||||||
Allowance
for loan losses |
(730 |
) |
(621 |
) |
(601 |
) |
||||||||||||||||||||
Accrued
income and other assets |
4,782 |
|
4,680 |
|
4,443 |
|
||||||||||||||||||||
Total
assets |
$ |
71,743 |
|
$ |
70,247 |
|
$ |
66,336 |
|
|||||||||||||||||
Money
market and interest-bearing checking deposits |
$ |
22,744 |
|
27 |
|
0.11 |
|
$ |
24,073 |
|
26 |
|
0.11 |
|
$ |
22,891 |
|
24 |
|
0.11 |
| |||||
Savings
deposits |
2,013 |
|
— |
|
0.02 |
|
1,841 |
|
— |
|
0.02 |
|
1,744 |
|
1 |
|
0.03 |
| ||||||||
Customer
certificates of deposit |
3,200 |
|
13 |
|
0.40 |
|
4,209 |
|
16 |
|
0.37 |
|
4,869 |
|
18 |
|
0.36 |
| ||||||||
Foreign
office time deposits (e) |
33 |
|
— |
|
0.35 |
|
116 |
|
1 |
|
1.02 |
|
261 |
|
2 |
|
0.82 |
| ||||||||
Total
interest-bearing deposits |
27,990 |
|
40 |
|
0.14 |
|
30,239 |
|
43 |
|
0.14 |
|
29,765 |
|
45 |
|
0.15 |
| ||||||||
Short-term
borrowings |
138 |
|
— |
|
0.45 |
|
93 |
|
— |
|
0.05 |
|
200 |
|
— |
|
0.04 |
| ||||||||
Medium-
and long-term debt (f) |
4,917 |
|
72 |
|
1.45 |
|
2,905 |
|
52 |
|
1.80 |
|
2,963 |
|
50 |
|
1.68 |
| ||||||||
Total
interest-bearing sources |
33,045 |
|
112 |
|
0.34 |
|
33,237 |
|
95 |
|
0.29 |
|
32,928 |
|
95 |
|
0.29 |
| ||||||||
Noninterest-bearing
deposits |
29,751 |
|
28,087 |
|
25,019 |
|
||||||||||||||||||||
Accrued
expenses and other liabilities |
1,273 |
|
1,389 |
|
1,016 |
|
||||||||||||||||||||
Total
shareholders’ equity |
7,674 |
|
7,534 |
|
7,373 |
|
||||||||||||||||||||
Total
liabilities and shareholders’ equity |
$ |
71,743 |
|
$ |
70,247 |
|
$ |
66,336 |
|
|||||||||||||||||
Net
interest income/rate spread |
$ |
1,797 |
|
2.54 |
|
$ |
1,689 |
|
2.46 |
|
$ |
1,655 |
|
2.56 |
| |||||||||||
Impact
of net noninterest-bearing sources of funds |
|
0.17 |
|
0.14 |
|
0.14 |
| |||||||||||||||||||
Net interest margin (as a
percentage of average earning assets) (b) (d) |
|
|
2.71 |
% |
|
|
2.60 |
% |
|
|
2.70 |
% |
(a) |
Average
rate is calculated on a fully taxable equivalent (FTE) basis using a
federal tax rate of 35%. The FTE adjustment to net interest income was $4
million in each of the three years
presented. |
(b) |
Accretion
of the purchase discount on the acquired loan portfolio of $4
million,
$7
million
and $34
million
in 2016,
2015 and
2014,
respectively, increased the net interest margin by 1 basis
point in both 2016 and
2015 and
6 basis
points in 2014. |
(c) |
Nonaccrual
loans are included in average balances reported and in the calculation of
average rates. |
(d) |
Includes
investment securities available-for-sale and investment securities
held-to-maturity. Average rate based on average historical cost. Carrying
value exceeded average historical cost by
$143
million,
$100
million
and $12
million
in 2016,
2015 and
2014,
respectively. |
(e) |
Includes
substantially all deposits by foreign depositors; deposits are primarily
in excess of $100,000. |
(f) |
Medium-
and long-term debt average balances included $162
million,
$160
million
and $192
million
in 2016,
2015 and
2014,
respectively, for the gain attributed to the risk hedged with interest
rate swaps. Interest expense on medium-and long-term debt was reduced by
$60
million,
$70
million,
and $72
million
in 2016,
2015 and
2014,
respectively, for the net gains on these fair value hedge
relationships. |
(in
millions) |
|||||||||||||||||||||||||
Years
Ended December 31 |
2016/2015 |
2015/2014 | |||||||||||||||||||||||
Increase
(Decrease)
Due to Rate |
Increase
(Decrease)
Due to
Volume (a) |
Net
Increase
(Decrease) |
Increase
(Decrease)
Due to Rate |
Increase
(Decrease)
Due to
Volume (a) |
Net
Increase
(Decrease) | ||||||||||||||||||||
Interest
Income: |
|||||||||||||||||||||||||
Commercial
loans |
$ |
60 |
|
$ |
(14 |
) |
$ |
46 |
|
$ |
(15 |
) |
$ |
54 |
|
$ |
39 |
|
|||||||
Real
estate construction loans |
2 |
|
23 |
|
25 |
|
2 |
|
(1 |
) |
1 |
|
|||||||||||||
Commercial
mortgage loans |
8 |
|
10 |
|
18 |
|
(31 |
) |
— |
|
(31 |
) |
|||||||||||||
Lease
financing |
(4 |
) |
(3 |
) |
(7 |
) |
8 |
|
(2 |
) |
6 |
|
|||||||||||||
International
loans |
1 |
|
(2 |
) |
(1 |
) |
(1 |
) |
2 |
|
1 |
|
|||||||||||||
Residential
mortgage loans |
— |
|
— |
|
— |
|
(1 |
) |
4 |
|
3 |
|
|||||||||||||
Consumer
loans |
1 |
|
2 |
|
3 |
|
1 |
|
6 |
|
7 |
|
|||||||||||||
Total
loans |
68 |
|
16 |
|
84 |
|
(37 |
) |
(b) |
63 |
|
26 |
|
(b) | |||||||||||
Mortgage-backed
securities |
(4 |
) |
5 |
|
1 |
|
(8 |
) |
1 |
|
(7 |
) |
|||||||||||||
Other
investment securities |
3 |
|
27 |
|
30 |
|
3 |
|
9 |
|
12 |
|
|||||||||||||
Total
investment securities (c) |
(1 |
) |
32 |
|
31 |
|
(5 |
) |
10 |
|
5 |
|
|||||||||||||
Interest-bearing
deposits with banks |
15 |
|
(5 |
) |
10 |
|
— |
|
2 |
|
2 |
|
|||||||||||||
Other
short-term investments |
— |
|
— |
|
— |
|
— |
|
1 |
|
1 |
|
|||||||||||||
Total
interest income |
82 |
|
43 |
|
125 |
|
(42 |
) |
76 |
|
34 |
|
|||||||||||||
Interest
Expense: |
|||||||||||||||||||||||||
Money
market and interest-bearing checking deposits |
2 |
|
(1 |
) |
1 |
|
— |
|
2 |
|
2 |
|
|||||||||||||
Savings
deposits |
— |
|
— |
|
— |
|
(1 |
) |
— |
|
(1 |
) |
|||||||||||||
Customer
certificates of deposit |
1 |
|
(4 |
) |
(3 |
) |
1 |
|
(3 |
) |
(2 |
) |
|||||||||||||
Foreign
office time deposits |
(1 |
) |
— |
|
(1 |
) |
1 |
|
(2 |
) |
(1 |
) |
|||||||||||||
Total
interest-bearing deposits |
2 |
|
(5 |
) |
(3 |
) |
1 |
|
(3 |
) |
(2 |
) |
|||||||||||||
Medium-
and long-term debt |
9 |
|
11 |
|
20 |
|
3 |
|
(1 |
) |
2 |
|
|||||||||||||
Total
interest expense |
11 |
|
6 |
|
17 |
|
4 |
|
(4 |
) |
— |
|
|||||||||||||
Net
interest income |
$ |
71 |
|
$ |
37 |
|
$ |
108 |
|
$ |
(46 |
) |
$ |
80 |
|
$ |
34 |
|
(a) |
Rate/volume
variances are allocated to variances due to
volume. |
(b) |
Reflected
a decrease of $27
million
in accretion of the purchase discount on the acquired loan portfolio in
2015. |
(c) |
Includes
investment securities available-for-sale and investment securities
held-to-maturity. |
(in
millions) |
||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | |||||||||
Card
fees |
$ |
303 |
|
(a) |
$ |
276 |
|
(a) |
$ |
81 |
|
|
Service
charges on deposit accounts |
219 |
|
223 |
|
215 |
|
||||||
Fiduciary
income |
190 |
|
187 |
|
180 |
|
||||||
Commercial
lending fees |
89 |
|
99 |
|
98 |
|
||||||
Letter
of credit fees |
50 |
|
53 |
|
57 |
|
||||||
Bank-owned
life insurance |
42 |
|
40 |
|
39 |
|
||||||
Foreign
exchange income |
42 |
|
40 |
|
40 |
|
||||||
Brokerage
fees |
19 |
|
17 |
|
17 |
|
||||||
Net
securities losses |
(5 |
) |
(2 |
) |
— |
|
||||||
Other
noninterest income (b) |
102 |
|
102 |
|
130 |
|
||||||
Total
noninterest income |
$ |
1,051 |
|
$ |
1,035 |
|
$ |
857 |
|
(a) |
Effective
January 1, 2015, contractual changes to a card program resulted in a
change to the accounting presentation of the related revenues and
expenses. The effect of this change was an increase to card fees of $182
million in 2016 and $177 million in 2015. |
(b) |
The
table below provides further details on certain categories included in
other noninterest income. |
(in
millions) |
|||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||||
Customer
derivative income |
$ |
27 |
|
$ |
18 |
|
$ |
22 |
|
||||
Insurance
commissions |
10 |
|
10 |
|
13 |
|
|||||||
Investment
banking fees |
7 |
|
12 |
|
18 |
|
|||||||
Income
from principal investing and warrants |
7 |
|
6 |
|
10 |
|
|||||||
Securities
trading income |
6 |
|
9 |
|
9 |
|
|||||||
Deferred
compensation asset returns (a) |
3 |
|
— |
|
6 |
|
|||||||
Income
from unconsolidated subsidiaries |
(2 |
) |
2 |
|
8 |
|
|||||||
All
other noninterest income |
44 |
|
45 |
|
44 |
|
|||||||
Other
noninterest income |
$ |
102 |
|
$ |
102 |
|
$ |
130 |
|
(a) |
Compensation
deferred by the Corporation's officers and directors is invested based on
investment selections of the officers and directors. Income earned on
these assets is reported in noninterest income and the offsetting change
in liability is reported in salaries and benefits
expense. |
(in
millions) |
||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | |||||||||
Salaries
and benefits expense |
$ |
961 |
|
$ |
1,009 |
|
$ |
980 |
|
|||
Outside
processing fee expense |
336 |
|
(a) |
318 |
|
(a) |
111 |
|
||||
Net
occupancy expense |
157 |
|
159 |
|
171 |
|
||||||
Equipment
expense |
53 |
|
53 |
|
57 |
|
||||||
Restructuring
expense |
93 |
|
— |
|
— |
|
||||||
Software
expense |
119 |
|
99 |
|
95 |
|
||||||
FDIC
insurance expense |
54 |
|
37 |
|
33 |
|
||||||
Advertising
expense |
21 |
|
24 |
|
23 |
|
||||||
Litigation-related
expense |
1 |
|
(32 |
) |
4 |
|
||||||
Gain
on debt redemption |
— |
|
— |
|
(32 |
) |
||||||
Other
noninterest expenses |
135 |
|
160 |
|
173 |
|
||||||
Total
noninterest expenses |
$ |
1,930 |
|
$ |
1,827 |
|
$ |
1,615 |
|
(a) |
Effective
January 1, 2015, contractual changes to a card program resulted in a
change to the accounting presentation of the related revenues and
expenses. The effect of this change was an increase to outside processing
fee expense of $182 million in 2016 and $177 million in
2015. |
(dollar
amounts in millions) |
||||||||||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | |||||||||||||||||
Business
Bank |
$ |
638 |
|
88 |
% |
$ |
762 |
|
85 |
% |
$ |
822 |
|
86 |
% | |||||
Retail
Bank |
7 |
|
1 |
|
47 |
|
5 |
|
44 |
|
5 |
| ||||||||
Wealth
Management |
76 |
|
11 |
|
85 |
|
10 |
|
84 |
|
9 |
| ||||||||
721 |
|
100 |
% |
894 |
|
100 |
% |
950 |
|
100 |
% | |||||||||
Finance |
(244 |
) |
(373 |
) |
(359 |
) |
||||||||||||||
Other
(a) |
— |
|
— |
|
2 |
|
||||||||||||||
Total |
$ |
477 |
|
|
$ |
521 |
|
|
$ |
593 |
|
(dollar
amounts in millions) |
||||||||||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | |||||||||||||||||
Michigan |
$ |
247 |
|
34 |
% |
$ |
324 |
|
36 |
% |
$ |
287 |
|
30 |
% | |||||
California |
270 |
|
38 |
|
295 |
|
33 |
|
272 |
|
28 |
| ||||||||
Texas |
(21 |
) |
(3 |
) |
78 |
|
9 |
|
167 |
|
18 |
| ||||||||
Other
Markets |
225 |
|
31 |
|
197 |
|
22 |
|
224 |
|
24 |
| ||||||||
721 |
|
100 |
% |
894 |
|
100 |
% |
950 |
|
100 |
% | |||||||||
Finance
& Other (a) |
(244 |
) |
(373 |
) |
(357 |
) |
||||||||||||||
Total |
$ |
477 |
|
|
$ |
521 |
|
|
$ |
593 |
|
|
December
31 |
2016 |
2015 |
2014 | |||||
Michigan |
209 |
|
214 |
|
214 |
| ||
Texas |
127 |
|
133 |
|
135 |
| ||
California |
97 |
|
103 |
|
104 |
| ||
Other
Markets: |
||||||||
Arizona |
17 |
|
19 |
|
18 |
| ||
Florida |
7 |
|
7 |
|
9 |
| ||
Canada |
1 |
|
1 |
|
1 |
| ||
Total
Other Markets |
25 |
|
27 |
|
28 |
| ||
Total |
458 |
|
477 |
|
481 |
|
(in
millions) |
|||||||||||||||||||
December
31 |
2016 |
2015 |
2014 |
2013 |
2012 | ||||||||||||||
Investment
securities available-for-sale: |
|||||||||||||||||||
U.S.
Treasury and other U.S. government agency securities |
$ |
2,779 |
|
$ |
2,763 |
|
$ |
526 |
|
$ |
45 |
|
$ |
35 |
| ||||
Residential
mortgage-backed securities (a) |
7,872 |
|
7,545 |
|
7,274 |
|
(b) |
8,926 |
|
9,920 |
| ||||||||
State
and municipal securities |
7 |
|
9 |
|
23 |
|
22 |
|
23 |
| |||||||||
Corporate
debt securities |
— |
|
1 |
|
51 |
|
56 |
|
58 |
| |||||||||
Equity
and other non-debt securities |
129 |
|
201 |
|
242 |
|
258 |
|
261 |
| |||||||||
Total
investment securities available-for-sale |
10,787 |
|
10,519 |
|
8,116 |
|
9,307 |
|
10,297 |
| |||||||||
Investment
securities held to maturity: |
|||||||||||||||||||
Residential
mortgage-backed securities (a) |
1,582 |
|
1,981 |
|
1,935 |
|
(b) |
— |
|
— |
| ||||||||
Total
investment securities |
$ |
12,369 |
|
$ |
12,500 |
|
$ |
10,051 |
|
$ |
9,307 |
|
$ |
10,297 |
| ||||
Commercial
loans |
$ |
30,994 |
|
$ |
31,659 |
|
$ |
31,520 |
|
$ |
28,815 |
|
$ |
29,513 |
| ||||
Real
estate construction loans |
2,869 |
|
2,001 |
|
1,955 |
|
1,762 |
|
1,240 |
| |||||||||
Commercial
mortgage loans |
8,931 |
|
8,977 |
|
8,604 |
|
8,787 |
|
9,472 |
| |||||||||
Lease
financing |
572 |
|
724 |
|
805 |
|
845 |
|
859 |
| |||||||||
International
loans: |
|||||||||||||||||||
Banks
and other financial institutions |
2 |
|
— |
|
31 |
|
4 |
|
2 |
| |||||||||
Commercial
and industrial |
1,256 |
|
1,368 |
|
1,465 |
|
1,323 |
|
1,291 |
| |||||||||
Total
international loans |
1,258 |
|
1,368 |
|
1,496 |
|
1,327 |
|
1,293 |
| |||||||||
Residential
mortgage loans |
1,942 |
|
1,870 |
|
1,831 |
|
1,697 |
|
1,527 |
| |||||||||
Consumer
loans: |
|||||||||||||||||||
Home
equity |
1,800 |
|
1,720 |
|
1,658 |
|
1,517 |
|
1,537 |
| |||||||||
Other
consumer |
722 |
|
765 |
|
724 |
|
720 |
|
616 |
| |||||||||
Total
consumer loans |
2,522 |
|
2,485 |
|
2,382 |
|
2,237 |
|
2,153 |
| |||||||||
Total
loans |
$ |
49,088 |
|
$ |
49,084 |
|
$ |
48,593 |
|
$ |
45,470 |
|
$ |
46,057 |
|
(a) |
Issued
and/or guaranteed by U.S. government agencies or U.S. government-sponsored
enterprises. |
(b) |
During
the fourth quarter 2014, the Corporation transferred residential
mortgage-backed securities from available-for-sale to
held-to-maturity. |
(dollar
amounts in millions) |
Percent
Change | |||||||||||||
Years
Ended December 31 |
2016 |
2015 |
Change |
|||||||||||
Average
Loans: |
||||||||||||||
Commercial
loans by business line: |
||||||||||||||
General
Middle Market |
$ |
9,759 |
|
$ |
10,289 |
|
$ |
(530 |
) |
(5 |
)% | |||
National
Dealer Services |
4,728 |
|
4,333 |
|
395 |
|
9 |
| ||||||
Energy |
2,736 |
|
3,365 |
|
(629 |
) |
(19 |
) | ||||||
Technology
and Life Sciences |
3,061 |
|
2,933 |
|
128 |
|
4 |
| ||||||
Environmental
Services |
844 |
|
845 |
|
(1 |
) |
— |
| ||||||
Entertainment |
665 |
|
618 |
|
47 |
|
8 |
| ||||||
Total
Middle Market |
21,793 |
|
22,383 |
|
(590 |
) |
(3 |
) | ||||||
Corporate
Banking |
2,863 |
|
3,088 |
|
(225 |
) |
(7 |
) | ||||||
Mortgage
Banker Finance |
2,180 |
|
1,843 |
|
337 |
|
18 |
| ||||||
Commercial
Real Estate |
913 |
|
884 |
|
29 |
|
3 |
| ||||||
Total
Business Bank commercial loans |
27,749 |
|
|
28,198 |
|
(449 |
) |
(2 |
) | |||||
Total
Retail Bank commercial loans |
1,910 |
|
1,931 |
|
(21 |
) |
(1 |
) | ||||||
Total
Wealth Management commercial loans |
1,403 |
|
1,372 |
|
31 |
|
2 |
| ||||||
Total
commercial loans |
31,062 |
|
31,501 |
|
(439 |
) |
(1 |
) | ||||||
Real
estate construction loans |
2,508 |
|
1,884 |
|
624 |
|
33 |
| ||||||
Commercial
mortgage loans |
8,981 |
|
8,697 |
|
284 |
|
3 |
| ||||||
Lease
financing |
684 |
|
783 |
|
(99 |
) |
(13 |
) | ||||||
International
loans |
1,367 |
|
1,441 |
|
(74 |
) |
(5 |
) | ||||||
Residential
mortgage loans |
1,894 |
|
1,878 |
|
16 |
|
1 |
| ||||||
Consumer
loans: |
||||||||||||||
Home
equity |
1,767 |
|
1,693 |
|
74 |
|
4 |
| ||||||
Other
consumer |
733 |
|
751 |
|
(18 |
) |
(2 |
) | ||||||
Consumer
loans |
2,500 |
|
2,444 |
|
56 |
|
2 |
| ||||||
Total
loans |
$ |
48,996 |
|
$ |
48,628 |
|
$ |
368 |
|
1 |
% | |||
Average
Loans By Geographic Market: |
||||||||||||||
Michigan |
$ |
12,614 |
|
$ |
13,180 |
|
$ |
(566 |
) |
(4 |
)% | |||
California |
17,574 |
|
16,613 |
|
961 |
|
6 |
| ||||||
Texas |
10,637 |
|
11,168 |
|
(531 |
) |
(5 |
) | ||||||
Other
Markets |
8,171 |
|
7,667 |
|
504 |
|
7 |
| ||||||
Total
loans |
$ |
48,996 |
|
$ |
48,628 |
|
$ |
368 |
|
1 |
% |
Maturity
(a) |
Weighted
Average
Maturity | ||||||||||||||||||||||||||
(dollar
amounts in millions) |
Within
1 Year |
1
- 5 Years |
5
- 10 Years |
After
10 Years |
Total | ||||||||||||||||||||||
December 31,
2016 |
Amount |
Yield |
Amount |
Yield |
Amount |
Yield |
Amount |
Yield |
Amount |
Yield |
Years | ||||||||||||||||
U.S. Treasury and other U.S.
government agency securities |
$ |
30 |
|
0.83 |
% |
$ |
2,749 |
|
1.58 |
% |
$ |
— |
|
— |
% |
$ |
— |
|
— |
% |
$ |
2,779 |
|
1.57 |
% |
3.0 |
|
Residential
mortgage-backed securities (b) |
— |
|
— |
|
98 |
|
2.10 |
|
1,763 |
|
2.74 |
|
7,593 |
|
1.98 |
|
9,454 |
|
2.12 |
|
18.0 |
| |||||
State
and municipal securities (c) |
— |
|
— |
|
— |
|
— |
|
2 |
|
1.83 |
|
5 |
|
1.83 |
|
7 |
|
1.83 |
|
11.6 |
| |||||
Equity
and other non-debt securities: |
|||||||||||||||||||||||||||
Auction-rate
preferred securities (d) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
47 |
|
1.52 |
|
47 |
|
1.52 |
|
— |
| |||||
Money
market and other mutual funds (e) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
82 |
|
— |
|
82 |
|
— |
|
— |
| |||||
Total
investment securities |
$ |
30 |
|
0.83 |
% |
$ |
2,847 |
|
1.60 |
% |
$ |
1,765 |
|
2.73 |
% |
$ |
7,727 |
|
1.98 |
% |
$ |
12,369 |
|
2.00 |
% |
14.7 |
|
(dollar
amounts in millions) |
Percent
Change | |||||||||||||
Years
Ended December 31 |
2016 |
2015 |
Change |
|||||||||||
Noninterest-bearing
deposits |
$ |
29,751 |
|
$ |
28,087 |
|
$ |
1,664 |
|
6 |
% | |||
Money
market and interest-bearing checking deposits |
22,744 |
|
24,073 |
|
(1,329 |
) |
(6 |
) | ||||||
Savings
deposits |
2,013 |
|
1,841 |
|
172 |
|
9 |
| ||||||
Customer
certificates of deposit |
3,200 |
|
4,209 |
|
(1,009 |
) |
(24 |
) | ||||||
Foreign
office time deposits |
33 |
|
116 |
|
(83 |
) |
(72 |
) | ||||||
Total
deposits |
$ |
57,741 |
|
$ |
58,326 |
|
$ |
(585 |
) |
(1 |
)% | |||
Short-term
borrowings |
$ |
138 |
|
$ |
93 |
|
$ |
45 |
|
48 |
% | |||
Medium-
and long-term debt |
4,917 |
|
2,905 |
|
2,012 |
|
69 |
| ||||||
Total
borrowed funds |
$ |
5,055 |
|
$ |
2,998 |
|
$ |
2,057 |
|
69 |
% |
(in
millions) |
|
||||||
Balance
at January 1, 2016 |
$ |
7,560 |
| ||||
Net
income |
477 |
| |||||
Cash
dividends declared on common stock |
(154 |
) | |||||
Purchase
of common stock |
(310 |
) | |||||
Other
comprehensive income (loss): |
|||||||
Investment
securities available-for-sale |
$ |
(42 |
) |
||||
Defined
benefit and other postretirement plans |
88 |
|
|||||
Total
other comprehensive income (loss) |
46 |
| |||||
Issuance
of common stock under employee stock plans |
143 |
| |||||
Share-based
compensation |
34 |
| |||||
Balance
at December 31, 2016 |
|
$ |
7,796 |
|
(shares
in thousands) |
Total Number of Shares and
Warrants Purchased as
Part
of Publicly Announced Repurchase Plans or Programs
(a) |
Remaining
Repurchase
Authorization (b) |
Total Number
of
Shares
Purchased
(c) |
Average Price
Paid Per
Share | ||||||||
Total
first quarter 2016 |
1,183 |
|
15,721 |
|
1,393 |
|
$ |
35.26 |
| |||
Total
second quarter 2016 |
1,483 |
|
14,238 |
|
1,488 |
|
43.78 |
| ||||
Total
third quarter 2016 |
2,123 |
|
22,114 |
|
(d) |
2,134 |
|
45.66 |
| |||
October
2016 |
839 |
|
19,575 |
|
842 |
|
49.88 |
| ||||
November
2016 |
644 |
|
17,834 |
|
645 |
|
57.10 |
| ||||
December
2016 |
302 |
|
15,694 |
|
307 |
|
67.27 |
| ||||
Total
fourth quarter 2016 |
1,785 |
|
15,694 |
|
1,794 |
|
55.45 |
| ||||
Total
2016 |
6,574 |
|
15,694 |
|
6,809 |
|
$ |
45.70 |
|
(a) |
The
Corporation made no repurchases of warrants under the repurchase program
during the year ended December 31,
2016.
Upon exercise of a warrant, the number of shares with a value equal to the
aggregate exercise price is withheld from an exercising warrant holder as
payment (known as a "net exercise provision"). During the year ended
December 31,
2016,
the Corporation withheld the equivalent of approximately 2,319,000 shares
to cover an aggregate of $68.2
million
in exercise price and issued approximately 2,317,000 shares
to the exercising warrant holders. Shares withheld in connection with the
net exercise provision are not included in the total number of shares or
warrants purchased in the above table. |
(b) |
Maximum
number of shares and warrants that may yet be purchased under the publicly
announced plans or programs. |
(c) |
Includes
approximately 235,000 shares
(including 9,000 shares
for the quarter ended December 31,
2016)
purchased pursuant to deferred compensation plans and shares purchased
from employees to pay for taxes related to restricted stock vesting under
the terms of an employee share-based compensation plan and 26 shares
purchased by affiliated purchasers through employee benefits plan
transactions during the year ended December 31,
2016.
These transactions are not considered part of the Corporation's repurchase
program. |
(d) |
Includes
July 26,
2016
equity repurchase authorization for up to an additional 10
million
shares. |
December 31,
2016 |
December 31,
2015 | |||||||
Common
equity tier 1 capital to risk-weighted assets |
4.50 |
% |
(a) |
4.50 |
% |
|||
Tier
1 capital to risk-weighed assets |
6.00 |
|
(a) |
6.00 |
|
|||
Total
capital to risk-weighted assets |
8.00 |
|
(a) |
8.00 |
|
|||
Capital
conservation buffer |
0.625 |
|
(a) |
— |
|
|||
Tier
1 capital to adjusted average assets (leverage ratio) |
4.00 |
|
4.00 |
|
(a) |
In
addition to the minimum risk-based capital requirements, the Corporation
is required to maintain a minimum capital conservation buffer in the form
of common equity, in order to avoid restrictions on capital distributions
and discretionary bonuses. The required amount of the capital conservation
buffer, is being phased in beginning at 0.625% on January 1, 2016 and
ultimately increasing to 2.5% on January 1,
2019. |
December 31,
2016 |
December 31,
2015 | ||||||||||||
(dollar
amounts in millions) |
Capital/Assets |
Ratio |
Capital/Assets |
Ratio | |||||||||
Common
equity tier 1 and tier 1 risk-based |
$ |
7,540 |
|
11.09 |
% |
$ |
7,350 |
|
10.54 |
% | |||
Total
risk-based |
9,018 |
|
13.27 |
|
8,852 |
|
12.69 |
| |||||
Leverage |
7,540 |
|
10.18 |
|
7,350 |
|
10.22 |
| |||||
Common
equity |
7,796 |
|
10.68 |
|
7,560 |
|
10.52 |
| |||||
Tangible
common equity (a) |
7,151 |
|
9.89 |
|
6,911 |
|
9.70 |
| |||||
Risk-weighted
assets |
67,966 |
|
69,731 |
|
(a) |
See
Supplemental Financial Data section for reconcilements of non-GAAP
financial measures. |
(dollar
amounts in millions) |
|||||||||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 |
2013 |
2012 | ||||||||||||||
Balance
at beginning of year |
$ |
634 |
|
$ |
594 |
|
$ |
598 |
|
$ |
629 |
|
$ |
726 |
| ||||
Loan
charge-offs: |
|||||||||||||||||||
Commercial |
181 |
|
139 |
|
59 |
|
91 |
|
112 |
| |||||||||
Real
estate construction |
— |
|
— |
|
— |
|
3 |
|
8 |
| |||||||||
Commercial
mortgage |
3 |
|
3 |
|
22 |
|
36 |
|
89 |
| |||||||||
Lease
financing |
— |
|
1 |
|
— |
|
— |
|
— |
| |||||||||
International |
23 |
|
14 |
|
6 |
|
— |
|
3 |
| |||||||||
Residential
mortgage |
— |
|
1 |
|
2 |
|
4 |
|
13 |
| |||||||||
Consumer |
7 |
|
10 |
|
13 |
|
19 |
|
20 |
| |||||||||
Total
loan charge-offs |
214 |
|
168 |
|
102 |
|
153 |
|
245 |
| |||||||||
Recoveries: |
|||||||||||||||||||
Commercial |
43 |
|
33 |
|
34 |
|
42 |
|
39 |
| |||||||||
Real
estate construction |
— |
|
1 |
|
4 |
|
7 |
|
6 |
| |||||||||
Commercial
mortgage |
20 |
|
21 |
|
28 |
|
20 |
|
18 |
| |||||||||
Lease
financing |
— |
|
— |
|
2 |
|
1 |
|
— |
| |||||||||
International |
— |
|
— |
|
— |
|
— |
|
2 |
| |||||||||
Residential
mortgage |
1 |
|
2 |
|
4 |
|
4 |
|
2 |
| |||||||||
Consumer |
4 |
|
11 |
|
5 |
|
6 |
|
8 |
| |||||||||
Total
recoveries |
68 |
|
68 |
|
77 |
|
80 |
|
75 |
| |||||||||
Net
loan charge-offs |
146 |
|
100 |
|
25 |
|
73 |
|
170 |
| |||||||||
Provision
for loan losses |
241 |
|
142 |
|
22 |
|
42 |
|
73 |
| |||||||||
Foreign
currency translation adjustment |
1 |
|
(2 |
) |
(1 |
) |
— |
|
— |
| |||||||||
Balance
at end of year |
$ |
730 |
|
$ |
634 |
|
$ |
594 |
|
$ |
598 |
|
$ |
629 |
| ||||
Net loan charge-offs during
the year as a percentage of average loans outstanding during the
year |
0.30 |
% |
0.21 |
% |
0.05 |
% |
0.16 |
% |
0.39 |
% |
Years
Ended December 31 |
2016 |
2015 |
2014 | |||||
Allowance
for loan losses as a percentage of total loans at end of
year |
1.49 |
% |
1.29 |
% |
1.22 |
% | ||
Allowance for loan losses
as a percentage of total nonperforming loans at end of
year |
124 |
|
167 |
|
205 |
| ||
Allowance for loan losses
as a multiple of total net loan charge-offs for the year |
5.0x |
|
6.3x |
|
23.5x |
|
2016 |
2015 |
2014 |
2013 |
2012 | |||||||||||||||||||||||||||
(dollar
amounts in millions) |
Allocated
Allowance |
Allowance
Ratio (a) |
% (b) |
Allocated
Allowance |
% (b) |
Allocated
Allowance |
% (b) |
Allocated
Allowance |
% (b) |
Allocated
Allowance |
% (b) | ||||||||||||||||||||
December
31 |
|||||||||||||||||||||||||||||||
Business
loans |
|||||||||||||||||||||||||||||||
Commercial |
$ |
547 |
|
1.77 |
% |
63 |
% |
$ |
448 |
|
65 |
% |
$ |
379 |
|
65 |
% |
$ |
340 |
|
63 |
% |
$ |
293 |
|
63 |
% | ||||
Real
estate construction |
21 |
|
0.72 |
|
6 |
|
12 |
|
4 |
|
20 |
|
4 |
|
16 |
|
4 |
|
16 |
|
3 |
| |||||||||
Commercial
mortgage |
93 |
|
1.05 |
|
18 |
|
93 |
|
18 |
|
120 |
|
18 |
|
159 |
|
19 |
|
227 |
|
21 |
| |||||||||
Lease
financing |
5 |
|
0.81 |
|
1 |
|
3 |
|
1 |
|
2 |
|
1 |
|
4 |
|
2 |
|
4 |
|
2 |
| |||||||||
International |
16 |
|
1.30 |
|
3 |
|
23 |
|
3 |
|
13 |
|
3 |
|
12 |
|
3 |
|
12 |
|
3 |
| |||||||||
Total
business loans |
682 |
|
1.53 |
|
91 |
|
579 |
|
91 |
|
534 |
|
91 |
|
531 |
|
91 |
|
552 |
|
92 |
| |||||||||
Retail
loans |
|||||||||||||||||||||||||||||||
Residential
mortgage |
11 |
|
0.54 |
|
4 |
|
14 |
|
4 |
|
14 |
|
4 |
|
17 |
|
4 |
|
20 |
|
3 |
| |||||||||
Consumer |
37 |
|
1.49 |
|
5 |
|
41 |
|
5 |
|
46 |
|
5 |
|
50 |
|
5 |
|
57 |
|
5 |
| |||||||||
Total
retail loans |
48 |
|
1.08 |
|
9 |
|
55 |
|
9 |
|
60 |
|
9 |
|
67 |
|
9 |
|
77 |
|
8 |
| |||||||||
Total
loans |
$ |
730 |
|
1.49 |
% |
100 |
% |
$ |
634 |
|
100 |
% |
$ |
594 |
|
100 |
% |
$ |
598 |
|
100 |
% |
$ |
629 |
|
100 |
% |
(a) |
Allocated
allowance as a percentage of related loans
outstanding. |
(b) |
Loans
outstanding as a percentage of total
loans. |
(dollar
amounts in millions) |
|||||||||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 |
2013 |
2012 | ||||||||||||||
Balance
at beginning of year |
$ |
45 |
|
$ |
41 |
|
$ |
36 |
|
$ |
32 |
|
$ |
26 |
| ||||
Charge-offs
on lending-related commitments (a) |
(11 |
) |
(1 |
) |
— |
|
— |
|
— |
| |||||||||
Provision for credit losses
on lending-related commitments |
7 |
|
5 |
|
5 |
|
4 |
|
6 |
| |||||||||
Balance
at end of year |
$ |
41 |
|
$ |
45 |
|
$ |
41 |
|
$ |
36 |
|
$ |
32 |
|
(dollar
amounts in millions) |
|||||||||||||||||||
December
31 |
2016 |
2015 |
2014 |
2013 |
2012 | ||||||||||||||
Nonaccrual
loans: |
|||||||||||||||||||
Business
loans: |
|||||||||||||||||||
Commercial |
$ |
445 |
|
$ |
238 |
|
$ |
109 |
|
$ |
81 |
|
$ |
103 |
| ||||
Real
estate construction |
— |
|
1 |
|
2 |
|
21 |
|
33 |
| |||||||||
Commercial
mortgage |
46 |
|
60 |
|
95 |
|
156 |
|
275 |
| |||||||||
Lease
financing |
6 |
|
6 |
|
— |
|
— |
|
3 |
| |||||||||
International |
14 |
|
8 |
|
— |
|
4 |
|
— |
| |||||||||
Total
nonaccrual business loans |
511 |
|
313 |
|
206 |
|
262 |
|
414 |
| |||||||||
Retail
loans: |
|||||||||||||||||||
Residential
mortgage |
39 |
|
27 |
|
36 |
|
53 |
|
70 |
| |||||||||
Consumer: |
|||||||||||||||||||
Home
equity |
28 |
|
27 |
|
30 |
|
31 |
|
31 |
| |||||||||
Other
consumer |
4 |
|
— |
|
1 |
|
4 |
|
4 |
| |||||||||
Total
consumer |
32 |
|
27 |
|
31 |
|
35 |
|
35 |
| |||||||||
Total
nonaccrual retail loans |
71 |
|
54 |
|
67 |
|
88 |
|
105 |
| |||||||||
Total
nonaccrual loans |
582 |
|
367 |
|
273 |
|
350 |
|
519 |
| |||||||||
Reduced-rate
loans |
8 |
|
12 |
|
17 |
|
24 |
|
22 |
| |||||||||
Total
nonperforming loans |
590 |
|
379 |
|
290 |
|
374 |
|
541 |
| |||||||||
Foreclosed
property |
17 |
|
12 |
|
10 |
|
9 |
|
54 |
| |||||||||
Total
nonperforming assets |
$ |
607 |
|
$ |
391 |
|
$ |
300 |
|
$ |
383 |
|
$ |
595 |
| ||||
Gross interest income that
would have been recorded had the nonaccrual and reduced-rate loans
performed in accordance with original terms |
$ |
38 |
|
$ |
27 |
|
$ |
25 |
|
$ |
34 |
|
$ |
62 |
| ||||
Interest
income recognized |
6 |
|
5 |
|
6 |
|
5 |
|
5 |
| |||||||||
Nonperforming
loans as a percentage of total loans |
1.20 |
% |
0.77 |
% |
0.60 |
% |
0.82 |
% |
1.17 |
% | |||||||||
Nonperforming assets as a
percentage of total loans and foreclosed property |
1.24 |
|
0.80 |
|
0.62 |
|
0.84 |
|
1.29 |
| |||||||||
Loans
past due 90 days or more and still accruing |
$ |
19 |
|
$ |
17 |
|
$ |
5 |
|
$ |
16 |
|
$ |
23 |
| ||||
Loans past due 90 days or
more and still accruing as a percentage of total loans |
0.04 |
% |
0.03 |
% |
0.01 |
% |
0.03 |
% |
0.05 |
% |
(in
millions) |
|||||||
December
31 |
2016 |
2015 | |||||
Nonperforming
TDRs: |
|||||||
Nonaccrual
TDRs |
$ |
225 |
|
$ |
100 |
| |
Reduced-rate
TDRs |
8 |
|
12 |
| |||
Total
nonperforming TDRs |
233 |
|
112 |
| |||
Performing
TDRs (a) |
94 |
|
128 |
| |||
Total
TDRs |
$ |
327 |
|
$ |
240 |
|
(a) |
TDRs
that do not include a reduction in the original contractual interest rate
which are performing in accordance with their modified
terms. |
(in
millions) |
|||||||
Years
Ended December 31 |
2016 |
2015 | |||||
Balance
at beginning of period |
$ |
367 |
|
$ |
273 |
| |
Loans
transferred to nonaccrual (a) |
718 |
|
358 |
| |||
Nonaccrual
business loan gross charge-offs (b) |
(207 |
) |
(132 |
) | |||
Loans
transferred to accrual status (a) |
— |
|
(4 |
) | |||
Nonaccrual
business loans sold (c) |
(73 |
) |
(3 |
) | |||
Payments/other
(d) |
(223 |
) |
(125 |
) | |||
Balance
at end of period |
$ |
582 |
|
$ |
367 |
| |
(a) Based on an analysis of
nonaccrual loans with book balances greater than $2
million. | |||||||
(b)
Analysis of gross loan charge-offs: |
|||||||
Nonaccrual
business loans |
$ |
207 |
|
$ |
132 |
| |
Performing
business loans |
— |
|
25 |
| |||
Retail
loans |
7 |
|
11 |
| |||
Total
gross loan charge-offs |
$ |
214 |
|
$ |
168 |
| |
(c)
Analysis of loans sold: |
|||||||
Nonaccrual
business loans |
$ |
73 |
|
$ |
3 |
| |
Performing
criticized loans |
— |
|
10 |
| |||
Total
criticized loans sold |
$ |
73 |
|
$ |
13 |
| |
(d) Includes net changes
related to nonaccrual loans with balances less than $2 million, payments
on nonaccrual loans with book balances greater than $2 million, transfers
of nonaccrual loans to foreclosed property and retail loan gross
charge-offs. Excludes business loan gross charge-offs and nonaccrual
business loans sold. |
2016 |
2015 | ||||||||||||
(dollar
amounts in millions) |
Number
of
Borrowers |
Balance |
Number
of
Borrowers |
Balance | |||||||||
Under
$2 million |
1,152 |
|
$ |
95 |
|
1,300 |
|
$ |
112 |
| |||
$2
million - $5 million |
18 |
|
57 |
|
12 |
|
34 |
| |||||
$5
million - $10 million |
9 |
|
60 |
|
8 |
|
57 |
| |||||
$10
million - $25 million |
14 |
|
234 |
|
4 |
|
58 |
| |||||
Greater
than $25 million |
4 |
|
136 |
|
3 |
|
106 |
| |||||
Total
|
1,197 |
|
$ |
582 |
|
1,327 |
|
$ |
367 |
|
December 31,
2016 |
Year
Ended December 31, 2016 | |||||||||||||||||||
(dollar
amounts in millions) |
Nonaccrual Loans |
Loans Transferred to
Nonaccrual (a) |
Net Loan Charge-Offs
(Recoveries) | |||||||||||||||||
Industry
Category |
||||||||||||||||||||
Mining,
Quarrying and Oil & Gas Extraction (b) |
$ |
335 |
|
58 |
% |
$ |
476 |
|
66 |
% |
$ |
91 |
|
62 |
% | |||||
Manufacturing
(b) |
64 |
|
11 |
|
87 |
|
12 |
|
28 |
|
19 |
| ||||||||
Residential
Mortgage |
39 |
|
8 |
|
16 |
|
2 |
|
(1 |
) |
(1 |
) | ||||||||
Services
(b) |
31 |
|
5 |
|
28 |
|
4 |
|
9 |
|
6 |
| ||||||||
Real
Estate and Home Builders |
20 |
|
3 |
|
— |
|
— |
|
(15 |
) |
(10 |
) | ||||||||
Health
Care and Social Assistance |
18 |
|
3 |
|
— |
|
— |
|
— |
|
— |
| ||||||||
Wholesale
Trade |
13 |
|
2 |
|
39 |
|
6 |
|
6 |
|
4 |
| ||||||||
Holding
and Other Investment Companies |
9 |
|
2 |
|
— |
|
— |
|
(1 |
) |
(1 |
) | ||||||||
Transportation
and Warehousing (b) |
7 |
|
1 |
|
24 |
|
3 |
|
11 |
|
8 |
| ||||||||
Retail
Trade |
4 |
|
1 |
|
8 |
|
1 |
|
6 |
|
4 |
| ||||||||
Information
and Communication |
3 |
|
— |
|
7 |
|
1 |
|
1 |
|
1 |
| ||||||||
Contractors
|
1 |
|
— |
|
19 |
|
3 |
|
11 |
|
8 |
| ||||||||
Other
(c) |
38 |
|
6 |
|
14 |
|
2 |
|
— |
|
— |
| ||||||||
Total |
$ |
582 |
|
100 |
% |
$ |
718 |
|
100 |
% |
$ |
146 |
|
100 |
% |
(a) |
Based on
an analysis of nonaccrual loans with book balances greater than $2
million. |
(b) |
Included
nonaccrual Energy and energy-related loans of approximately $335 million
in Mining, Quarrying and Oil & Gas Extraction, $16 million in
Services, $15 million in Manufacturing and $7 million in Transportation
and Warehousing at December 31,
2016. |
(c) |
Consumer,
excluding residential mortgage and certain personal purpose nonaccrual
loans and net charge-offs, is included in the “Other”
category. |
(dollar
amounts in millions) |
||||||||
December
31 |
2016 |
2015 | ||||||
Total
criticized loans |
$ |
2,856 |
|
$ |
3,193 |
| ||
As
a percentage of total loans |
5.8 |
% |
6.5 |
% |
(in
millions) |
||||||||
Years
Ended December 31 |
2016 |
2015 | ||||||
Balance
at beginning of period |
$ |
12 |
|
$ |
10 |
| ||
Acquired
in foreclosure |
21 |
|
12 |
| ||||
Write-downs |
— |
|
(1 |
) | ||||
Foreclosed
property sold (a) |
(16 |
) |
(9 |
) | ||||
Balance
at end of period |
$ |
17 |
|
$ |
12 |
| ||
(a)
Net gain on foreclosed property sold |
$ |
4 |
|
$ |
3 |
|
2016 |
2015 | ||||||||||||
(in
millions) |
Loans
Outstanding |
Percent of
Total Loans |
Loans
Outstanding |
Percent of
Total Loans | |||||||||
December
31 |
|||||||||||||
Production: |
|||||||||||||
Domestic |
$ |
968 |
|
$ |
892 |
|
|||||||
Foreign |
358 |
|
374 |
|
|||||||||
Total
production |
1,326 |
|
2.7 |
% |
1,266 |
|
2.6 |
% | |||||
Dealer: |
|||||||||||||
Floor
plan |
4,269 |
|
3,939 |
|
|||||||||
Other |
2,854 |
|
2,634 |
|
|||||||||
Total
dealer |
7,123 |
|
14.5 |
% |
6,573 |
|
13.4 |
% | |||||
Total
automotive |
$ |
8,449 |
|
17.2 |
% |
$ |
7,839 |
|
16.0 |
% |
(in
millions) |
|||||||
December
31 |
2016 |
2015 | |||||
Real
estate construction loans: |
|||||||
Commercial
Real Estate business line (a) |
$ |
2,485 |
|
$ |
1,681 |
| |
Other
business lines (b) |
384 |
|
320 |
| |||
Total
real estate construction loans |
$ |
2,869 |
|
$ |
2,001 |
| |
Commercial
mortgage loans: |
|||||||
Commercial
Real Estate business line (a) |
$ |
2,018 |
|
$ |
2,104 |
| |
Other
business lines (b) |
6,913 |
|
6,873 |
| |||
Total
commercial mortgage loans |
$ |
8,931 |
|
$ |
8,977 |
|
(a) |
Primarily
loans to real estate developers. |
(b) |
Primarily
loans secured by owner-occupied real
estate. |
(dollar
amounts in millions) |
2016 |
2015 | |||||||||||||||||||||||||
December
31 |
Residential Mortgage Loans |
%
of Total |
Home Equity Loans |
%
of Total |
Residential Mortgage Loans |
%
of Total |
Home Equity Loans |
%
of Total | |||||||||||||||||||
Geographic
market: |
|||||||||||||||||||||||||||
Michigan |
$ |
386 |
|
20 |
% |
$ |
748 |
|
42 |
% |
$ |
387 |
|
21 |
% |
$ |
785 |
|
46 |
% | |||||||
California |
948 |
|
49 |
|
687 |
|
38 |
|
874 |
|
47 |
|
611 |
|
35 |
| |||||||||||
Texas |
337 |
|
17 |
|
305 |
|
17 |
|
325 |
|
17 |
|
269 |
|
16 |
| |||||||||||
Other
Markets |
271 |
|
14 |
|
60 |
|
3 |
|
284 |
|
15 |
|
55 |
|
3 |
| |||||||||||
Total |
$ |
1,942 |
|
100 |
% |
$ |
1,800 |
|
100 |
% |
$ |
1,870 |
|
100 |
% |
$ |
1,720 |
|
100 |
% |
(dollar
amounts in millions) |
2016 |
2015 | |||||||||||||||||||||
December
31 |
Outstandings |
Nonaccrual |
Criticized |
Outstandings |
Nonaccrual |
Criticized | |||||||||||||||||
Exploration
and production (E&P) |
$ |
1,587 |
|
70 |
% |
$ |
294 |
|
$ |
910 |
|
$ |
2,111 |
|
69 |
% |
$ |
108 |
|
$ |
967 |
| |
Midstream |
374 |
|
17 |
|
7 |
|
45 |
|
479 |
|
15 |
|
— |
|
42 |
| |||||||
Services |
289 |
|
13 |
|
27 |
|
200 |
|
480 |
|
16 |
|
24 |
|
235 |
| |||||||
Total
Energy business line |
2,250 |
|
100 |
% |
328 |
|
1,155 |
|
3,070 |
|
100 |
% |
132 |
|
1,244 |
| |||||||
Energy-related |
397 |
|
45 |
|
171 |
|
624 |
|
29 |
|
187 |
| |||||||||||
Total
energy and energy-related |
$ |
2,647 |
|
$ |
373 |
|
$ |
1,326 |
|
$ |
3,694 |
|
$ |
161 |
|
$ |
1,431 |
| |||||
As
a percentage of total energy and energy-related loans |
14 |
% |
50 |
% |
4 |
% |
38 |
% |
(in
millions) |
||||||||
December
31 |
2016 |
2015 | ||||||
Mexico
exposure: |
||||||||
Commercial
and industrial |
$ |
649 |
|
$ |
617 |
| ||
Banks
and other financial institutions |
1 |
|
— |
| ||||
Total
outstanding |
650 |
|
617 |
| ||||
Unfunded
commitments and guarantees |
161 |
|
206 |
| ||||
Total
Mexico exposure |
$ |
811 |
|
$ |
823 |
| ||
European
exposure: |
||||||||
Commercial
and industrial |
$ |
231 |
|
$ |
285 |
| ||
Banks
and other financial institutions |
2 |
|
35 |
| ||||
Total
outstanding |
233 |
|
320 |
| ||||
Unfunded
commitments and guarantees |
410 |
|
456 |
| ||||
Total
European exposure (a) |
$ |
643 |
|
$ |
776 |
|
(a) |
Primarily
United Kingdom and the Netherlands. |
Estimated
Annual Change | |||||||||||||
(in
millions) |
2016 |
2015 | |||||||||||
December
31 |
Amount |
% |
Amount |
% | |||||||||
Change
in Interest Rates: |
|||||||||||||
Rising
200 basis points |
$ |
212 |
|
11 |
% |
$ |
212 |
|
12 |
% | |||
Declining
to zero percent |
(138 |
) |
(7 |
) |
(88 |
) |
(5 |
) |
2016 |
2015 | ||||||||||||
(in
millions) |
Amount |
% |
Amount |
% | |||||||||
Change
in Interest Rates: |
|||||||||||||
Rising
200 basis points |
$ |
1,133 |
|
10 |
% |
$ |
1,021 |
|
9 |
% | |||
Falling
to zero percent |
(891 |
) |
(7 |
) |
(538 |
) |
(5 |
) |
(in
millions) |
Loans
Maturing | ||||||||||||||
December 31,
2016 |
Within One
Year
(a) |
After One
But Within
Five
Years |
After
Five Years |
Total | |||||||||||
Commercial
loans |
$ |
15,320 |
|
$ |
14,448 |
|
$ |
1,226 |
|
$ |
30,994 |
| |||
Real
estate construction loans |
1,216 |
|
1,516 |
|
137 |
|
2,869 |
| |||||||
Commercial
mortgage loans |
1,631 |
|
4,941 |
|
2,359 |
|
8,931 |
| |||||||
International
loans |
596 |
|
659 |
|
3 |
|
1,258 |
| |||||||
Total |
$ |
18,763 |
|
$ |
21,564 |
|
$ |
3,725 |
|
$ |
44,052 |
| |||
Sensitivity
of loans to changes in interest rates: |
|||||||||||||||
Predetermined
(fixed) interest rates |
$ |
785 |
|
$ |
2,909 |
|
$ |
802 |
|
$ |
4,496 |
| |||
Floating
interest rates |
17,979 |
|
18,655 |
|
2,922 |
|
39,556 |
| |||||||
Total |
$ |
18,764 |
|
$ |
21,564 |
|
$ |
3,724 |
|
$ |
44,052 |
|
(a) |
Includes
demand loans, loans having no stated repayment schedule or maturity and
overdrafts. |
(in
millions)
Risk
Management Notional Activity |
Interest
Rate
Contracts |
Foreign
Exchange
Contracts |
Totals | ||||||||
Balance
at January 1, 2015 |
$ |
1,800 |
|
$ |
508 |
|
$ |
2,308 |
| ||
Additions |
1,025 |
|
15,846 |
|
16,871 |
| |||||
Maturities/amortizations |
(300 |
) |
(15,761 |
) |
(16,061 |
) | |||||
Balance
at December 31, 2015 |
$ |
2,525 |
|
$ |
593 |
|
$ |
3,118 |
| ||
Additions |
— |
|
13,946 |
|
13,946 |
| |||||
Maturities/amortizations |
(250 |
) |
(13,822 |
) |
(14,072 |
) | |||||
Balance at December 31,
2016 |
$ |
2,275 |
|
$ |
717 |
|
$ |
2,992 |
|
(in
millions)
Customer-Initiated
and Other Notional Activity |
Interest
Rate
Contracts |
Energy
Derivative
Contracts |
Foreign
Exchange
Contracts |
Totals | |||||||||||
Balance
at January 1, 2015 |
$ |
12,328 |
|
$ |
4,932 |
|
$ |
1,994 |
|
$ |
19,254 |
| |||
Additions |
3,365 |
|
1,498 |
|
60,054 |
|
64,917 |
| |||||||
Maturities/amortizations |
(2,199 |
) |
(3,070 |
) |
(59,757 |
) |
(65,026 |
) | |||||||
Terminations |
(1,266 |
) |
(233 |
) |
— |
|
(1,499 |
) | |||||||
Balance
at December 31, 2015 |
$ |
12,228 |
|
$ |
3,127 |
|
$ |
2,291 |
|
$ |
17,646 |
| |||
Additions |
3,505 |
|
1,347 |
|
54,478 |
|
59,330 |
| |||||||
Maturities/amortizations |
(1,469 |
) |
(1,908 |
) |
(55,250 |
) |
(58,627 |
) | |||||||
Terminations |
(941 |
) |
(339 |
) |
(10 |
) |
(1,290 |
) | |||||||
Balance at December 31,
2016 |
$ |
13,323 |
|
$ |
2,227 |
|
$ |
1,509 |
|
$ |
17,059 |
|
(in
millions) |
Minimum
Payments Due by Period | ||||||||||||||||||
December 31,
2016 |
Total |
Less
than
1
Year |
1-3
Years |
3-5
Years |
More than
5
Years | ||||||||||||||
Deposits
without a stated maturity (a) |
$ |
56,160 |
|
$ |
56,160 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
| ||||
Certificates of deposit and
other deposits with a stated maturity (a) |
2,825 |
|
2,349 |
|
382 |
|
77 |
|
17 |
| |||||||||
Short-term
borrowings (a) |
25 |
|
25 |
|
— |
|
— |
|
— |
| |||||||||
Medium-
and long-term debt (a) |
5,091 |
|
500 |
|
359 |
|
682 |
|
3,550 |
| |||||||||
Operating
leases |
392 |
|
72 |
|
122 |
|
82 |
|
116 |
| |||||||||
Commitments
to fund low income housing partnerships |
153 |
|
92 |
|
51 |
|
4 |
|
6 |
| |||||||||
Other
long-term obligations (b) |
291 |
|
86 |
|
83 |
|
33 |
|
89 |
| |||||||||
Total
contractual obligations |
$ |
64,937 |
|
$ |
59,284 |
|
$ |
997 |
|
$ |
878 |
|
$ |
3,778 |
| ||||
Medium- and long-term debt (parent company only)
(a) (c) |
$ |
600 |
|
$ |
— |
|
$ |
350 |
|
$ |
— |
|
$ |
250 |
|
(a) |
Deposits
and borrowings exclude accrued interest. |
(b) |
Includes
unrecognized tax benefits. |
(c) |
Parent
company only amounts are included in the medium- and long-term debt
minimum payments above. |
(in
millions) |
Expected
Expiration Dates by Period | ||||||||||||||||||
December 31,
2016 |
Total |
Less than
1
Year |
1-3
Years |
3-5
Years |
More than
5
Years | ||||||||||||||
Commitments to fund
indirect private equity and venture capital investments |
$ |
2 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
2 |
| ||||
Unused
commitments to extend credit |
26,991 |
|
8,554 |
|
9,884 |
|
5,985 |
|
2,568 |
| |||||||||
Standby
letters of credit and financial guarantees |
3,623 |
|
2,960 |
|
445 |
|
199 |
|
19 |
| |||||||||
Commercial
letters of credit |
46 |
|
45 |
|
1 |
|
— |
|
— |
| |||||||||
Total
commercial commitments |
$ |
30,662 |
|
$ |
11,559 |
|
$ |
10,330 |
|
$ |
6,184 |
|
$ |
2,589 |
|
Comerica Incorporated |
Comerica Bank | ||||||
December 31,
2016 |
Rating |
Outlook |
Rating |
Outlook | |||
Standard
and Poor’s (a) |
BBB+ |
Negative |
A- |
Negative |
|||
Moody’s
Investors Service |
A3 |
Negative |
A3 |
Negative |
|||
Fitch
Ratings |
A |
Negative |
A |
Negative |
|||
DBRS |
A |
Stable |
A
(High) |
Stable |
(a) |
In
February 2017, Standard and Poor's revised its outlook to
"Stable." |
Discount
rate |
4.23 |
% |
Long-term
rate of return on plan assets |
6.50 |
% |
Lump
sum payment election rate: |
||
Existing
participants |
60 |
% |
Future
participants |
80 |
% |
Mortality
table: |
||
Base
table (a) |
RP-2016 |
|
Mortality
improvement scale (a) |
MP-2016 |
|
(a) |
Issued
by the Society of Actuaries in October
2016. |
25
Basis Point | |||||||
Increase |
Decrease | ||||||
Key
Actuarial Assumption: |
|||||||
Discount
rate |
$ |
(7.0 |
) |
$ |
7.0 |
| |
Long-term
rate of return |
(6.1 |
) |
6.1 |
|
(dollar
amounts in millions) |
|||||||||||||||||||
December
31 |
2016 |
2015 |
2014 |
2013 |
2012 | ||||||||||||||
Tangible
Common Equity Ratio: |
|||||||||||||||||||
Common
shareholders' equity |
$ |
7,796 |
|
$ |
7,560 |
|
$ |
7,402 |
|
$ |
7,150 |
|
$ |
6,939 |
| ||||
Less: |
|||||||||||||||||||
Goodwill |
635 |
|
635 |
|
635 |
|
635 |
|
635 |
| |||||||||
Other
intangible assets |
10 |
|
14 |
|
15 |
|
17 |
|
22 |
| |||||||||
Tangible
common equity |
$ |
7,151 |
|
$ |
6,911 |
|
$ |
6,752 |
|
$ |
6,498 |
|
$ |
6,282 |
| ||||
Total
assets |
$ |
72,978 |
|
$ |
71,877 |
|
$ |
69,186 |
|
$ |
65,224 |
|
$ |
65,066 |
| ||||
Less: |
|||||||||||||||||||
Goodwill |
635 |
|
635 |
|
635 |
|
635 |
|
635 |
| |||||||||
Other
intangible assets |
10 |
|
14 |
|
15 |
|
17 |
|
22 |
| |||||||||
Tangible
assets |
$ |
72,333 |
|
$ |
71,228 |
|
$ |
68,536 |
|
$ |
64,572 |
|
$ |
64,409 |
| ||||
Common
equity ratio |
10.68 |
% |
10.52 |
% |
10.70 |
% |
10.97 |
% |
10.67 |
% | |||||||||
Tangible
common equity ratio |
9.89 |
|
9.70 |
|
9.85 |
|
10.07 |
|
9.76 |
| |||||||||
Tangible
Common Equity per Share of Common Stock: |
|||||||||||||||||||
Common
shareholders' equity |
$ |
7,796 |
|
$ |
7,560 |
|
$ |
7,402 |
|
$ |
7,150 |
|
$ |
6,939 |
| ||||
Tangible
common equity |
7,151 |
|
6,911 |
|
6,752 |
|
6,498 |
|
6,282 |
| |||||||||
Shares
of common stock outstanding (in millions) |
175 |
|
176 |
|
179 |
|
182 |
|
188 |
| |||||||||
Common
shareholders' equity per share of common stock |
$ |
44.47 |
|
$ |
43.03 |
|
$ |
41.35 |
|
$ |
39.22 |
|
$ |
36.86 |
| ||||
Tangible
common equity per share of common stock |
40.79 |
|
39.33 |
|
37.72 |
|
35.64 |
|
33.36 |
|
• |
general political, economic
or industry conditions, either domestically or internationally, may be
less favorable than expected; |
• |
governmental monetary and
fiscal policies may adversely affect the financial services industry, and
therefore impact the Corporation's financial condition and results of
operations; |
• |
whether the Corporation may
achieve opportunities for revenue enhancements and efficiency improvements
under the GEAR Up initiative, or changes in the scope or assumptions
underlying the GEAR Up initiative; |
• |
the Corporation must
maintain adequate sources of funding and liquidity to meet regulatory
expectations, support its operations and fund outstanding
liabilities; |
• |
compliance with more
stringent capital and liquidity requirements may adversely affect the
Corporation; |
• |
declines in the businesses
or industries of the Corporation's customers - in particular, the energy
industry - could cause increased credit losses or decreased loan balances,
which could adversely affect the
Corporation; |
• |
unfavorable developments
concerning credit quality could adversely affect the Corporation's
financial results: |
• |
operational difficulties,
failure of technology infrastructure or information security incidents
could adversely affect the Corporation's business and
operations; |
• |
changes in regulation or
oversight may have a material adverse impact on the Corporation's
operations; |
• |
the Corporation relies on
other companies to provide certain key components of its business
infrastructure, and certain failures could materially adversely affect
operations; |
• |
changes in the financial
markets, including fluctuations in interest rates and their impact on
deposit pricing, could adversely affect the Corporation's net interest
income and balance sheet; |
• |
reduction in the
Corporation's credit ratings could adversely affect the Corporation and/or
the holders of its securities; |
• |
the soundness of other
financial institutions could adversely affect the
Corporation; |
• |
the introduction,
implementation, withdrawal, success and timing of business initiatives and
strategies may be less successful or may be different than anticipated,
which could adversely affect the Corporation's
business; |
• |
damage to Comerica’s
reputation could damage its businesses; |
• |
the Corporation may not be
able to utilize technology to efficiently and effectively develop, market
and deliver new products and services to its
customers; |
• |
competitive product and
pricing pressures among financial institutions within the Corporation's
markets may change; |
• |
changes in customer
behavior may adversely impact the Corporation's business, financial
condition and results of operations; |
• |
any future strategic
acquisitions or divestitures may present certain risks to the
Corporation's business and operations; |
• |
management's ability to
maintain and expand customer relationships may differ from
expectations; |
• |
management's ability to
retain key officers and employees may
change; |
• |
legal and regulatory
proceedings and related financial services industry matters, including
those directly involving the Corporation and its subsidiaries, could
adversely affect the Corporation or the financial services industry in
general; |
• |
methods of reducing risk
exposures might not be effective; |
• |
adverse effects from
terrorist activities or other hostilities;
|
• |
catastrophic events,
including, but not limited to, hurricanes, tornadoes, earthquakes, fires,
droughts and floods, may adversely affect the general economy, financial
and capital markets, specific industries, and the
Corporation; |
• |
the tax treatment of
corporations could be subject to potential legislative, administrative or
judicial changes or interpretations; |
• |
changes in accounting
standards could materially impact the Corporation's financial statements;
and |
• |
the Corporation's
accounting policies and processes are critical to the reporting of
financial condition and results of operations. They require management to
make estimates about matters that are
uncertain. |
(in
millions, except share data) |
|||||||
December
31 |
2016 |
2015 | |||||
ASSETS |
|||||||
Cash
and due from banks |
$ |
1,249 |
|
$ |
1,157 |
| |
Interest-bearing
deposits with banks |
5,969 |
|
4,990 |
| |||
Other
short-term investments |
92 |
|
113 |
| |||
Investment
securities available-for-sale |
10,787 |
|
10,519 |
| |||
Investment
securities held-to-maturity |
1,582 |
|
1,981 |
| |||
Commercial
loans |
30,994 |
|
31,659 |
| |||
Real
estate construction loans |
2,869 |
|
2,001 |
| |||
Commercial
mortgage loans |
8,931 |
|
8,977 |
| |||
Lease
financing |
572 |
|
724 |
| |||
International
loans |
1,258 |
|
1,368 |
| |||
Residential
mortgage loans |
1,942 |
|
1,870 |
| |||
Consumer
loans |
2,522 |
|
2,485 |
| |||
Total
loans |
49,088 |
|
49,084 |
| |||
Less
allowance for loan losses |
(730 |
) |
(634 |
) | |||
Net
loans |
48,358 |
|
48,450 |
| |||
Premises
and equipment |
501 |
|
550 |
| |||
Accrued
income and other assets |
4,440 |
|
4,117 |
| |||
Total
assets |
$ |
72,978 |
|
$ |
71,877 |
| |
LIABILITIES
AND SHAREHOLDERS’ EQUITY |
|||||||
Noninterest-bearing
deposits |
$ |
31,540 |
|
$ |
30,839 |
| |
Money
market and interest-bearing checking deposits |
22,556 |
|
23,532 |
| |||
Savings
deposits |
2,064 |
|
1,898 |
| |||
Customer
certificates of deposit |
2,806 |
|
3,552 |
| |||
Foreign
office time deposits |
19 |
|
32 |
| |||
Total
interest-bearing deposits |
27,445 |
|
29,014 |
| |||
Total
deposits |
58,985 |
|
59,853 |
| |||
Short-term
borrowings |
25 |
|
23 |
| |||
Accrued
expenses and other liabilities |
1,012 |
|
1,383 |
| |||
Medium-
and long-term debt |
5,160 |
|
3,058 |
| |||
Total
liabilities |
65,182 |
|
64,317 |
| |||
Common
stock - $5 par value: |
|||||||
Authorized
- 325,000,000 shares |
|||||||
Issued - 228,164,824
shares |
1,141 |
|
1,141 |
| |||
Capital
surplus |
2,135 |
|
2,173 |
| |||
Accumulated
other comprehensive loss |
(383 |
) |
(429 |
) | |||
Retained
earnings |
7,331 |
|
7,084 |
| |||
Less cost of common stock in
treasury - 52,851,156 shares at 12/31/16 and 52,457,113 shares at
12/31/15 |
(2,428 |
) |
(2,409 |
) | |||
Total
shareholders’ equity |
7,796 |
|
7,560 |
| |||
Total
liabilities and shareholders’ equity |
$ |
72,978 |
|
$ |
71,877 |
|
(in
millions) |
|||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||
INTEREST
INCOME |
|||||||||||
Interest
and fees on loans |
$ |
1,635 |
|
$ |
1,551 |
|
$ |
1,525 |
| ||
Interest
on investment securities |
247 |
|
216 |
|
211 |
| |||||
Interest
on short-term investments |
27 |
|
17 |
|
14 |
| |||||
Total
interest income |
1,909 |
|
1,784 |
|
1,750 |
| |||||
INTEREST
EXPENSE |
|||||||||||
Interest
on deposits |
40 |
|
43 |
|
45 |
| |||||
Interest
on medium- and long-term debt |
72 |
|
52 |
|
50 |
| |||||
Total
interest expense |
112 |
|
95 |
|
95 |
| |||||
Net
interest income |
1,797 |
|
1,689 |
|
1,655 |
| |||||
Provision
for credit losses |
248 |
|
147 |
|
27 |
| |||||
Net
interest income after provision for credit losses |
1,549 |
|
1,542 |
|
1,628 |
| |||||
NONINTEREST
INCOME |
|||||||||||
Card
fees |
303 |
|
276 |
|
81 |
| |||||
Service
charges on deposit accounts |
219 |
|
223 |
|
215 |
| |||||
Fiduciary
income |
190 |
|
187 |
|
180 |
| |||||
Commercial
lending fees |
89 |
|
99 |
|
98 |
| |||||
Letter
of credit fees |
50 |
|
53 |
|
57 |
| |||||
Bank-owned
life insurance |
42 |
|
40 |
|
39 |
| |||||
Foreign
exchange income |
42 |
|
40 |
|
40 |
| |||||
Brokerage
fees |
19 |
|
17 |
|
17 |
| |||||
Net
securities losses |
(5 |
) |
(2 |
) |
— |
| |||||
Other
noninterest income |
102 |
|
102 |
|
130 |
| |||||
Total
noninterest income |
1,051 |
|
1,035 |
|
857 |
| |||||
NONINTEREST
EXPENSES |
|||||||||||
Salaries
and benefits expense |
961 |
|
1,009 |
|
980 |
| |||||
Outside
processing fee expense |
336 |
|
318 |
|
111 |
| |||||
Net
occupancy expense |
157 |
|
159 |
|
171 |
| |||||
Equipment
expense |
53 |
|
53 |
|
57 |
| |||||
Restructuring
charges |
93 |
|
— |
|
— |
| |||||
Software
expense |
119 |
|
99 |
|
95 |
| |||||
FDIC
insurance expense |
54 |
|
37 |
|
33 |
| |||||
Advertising
expense |
21 |
|
24 |
|
23 |
| |||||
Litigation-related
expense |
1 |
|
(32 |
) |
4 |
| |||||
Gain
on debt redemption |
— |
|
— |
|
(32 |
) | |||||
Other
noninterest expenses |
135 |
|
160 |
|
173 |
| |||||
Total
noninterest expenses |
1,930 |
|
1,827 |
|
1,615 |
| |||||
Income
before income taxes |
670 |
|
750 |
|
870 |
| |||||
Provision
for income taxes |
193 |
|
229 |
|
277 |
| |||||
NET
INCOME |
477 |
|
521 |
|
593 |
| |||||
Less
income allocated to participating securities |
4 |
|
6 |
|
7 |
| |||||
Net
income attributable to common shares |
$ |
473 |
|
$ |
515 |
|
$ |
586 |
| ||
Earnings
per common share: |
|||||||||||
Basic |
$ |
2.74 |
|
$ |
2.93 |
|
$ |
3.28 |
| ||
Diluted |
2.68 |
|
2.84 |
|
3.16 |
| |||||
Cash
dividends declared on common stock |
154 |
|
148 |
|
143 |
| |||||
Cash
dividends declared per common share |
0.89 |
|
0.83 |
|
0.79 |
|
(in
millions) |
|||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||
NET
INCOME |
$ |
477 |
|
$ |
521 |
|
$ |
593 |
| ||
OTHER
COMPREHENSIVE INCOME (LOSS) |
|||||||||||
Unrealized
(losses) gains on investment securities: |
|||||||||||
Net
unrealized holding (losses) gains arising during the
period |
(70 |
) |
(55 |
) |
166 |
| |||||
Less: |
|||||||||||
Reclassification adjustment
for net securities (losses) gains included in net income |
— |
|
(2 |
) |
1 |
| |||||
Net
losses realized as a yield adjustment in interest on investment
securities |
(3 |
) |
(8 |
) |
— |
| |||||
Change
in net unrealized (losses) gains before income taxes |
(67 |
) |
(45 |
) |
165 |
| |||||
Defined
benefit pension and other postretirement plans adjustment: |
|||||||||||
Actuarial
loss arising during the period |
(134 |
) |
(57 |
) |
(240 |
) | |||||
Prior
service credit arising during the period |
234 |
|
3 |
|
— |
| |||||
Adjustments for amounts
recognized as components of net periodic benefit cost: |
|||||||||||
Amortization
of actuarial net loss |
46 |
|
70 |
|
39 |
| |||||
Amortization
of prior service (credit) cost |
(7 |
) |
1 |
|
3 |
| |||||
Change in defined benefit
pension and other postretirement plans adjustment before income
taxes |
139 |
|
17 |
|
(198 |
) | |||||
Total
other comprehensive income (loss) before income taxes |
72 |
|
(28 |
) |
(33 |
) | |||||
Provision
(benefit) for income taxes |
26 |
|
(11 |
) |
(12 |
) | |||||
Total
other comprehensive income (loss), net of tax |
46 |
|
(17 |
) |
(21 |
) | |||||
COMPREHENSIVE
INCOME |
$ |
523 |
|
$ |
504 |
|
$ |
572 |
|
Common
Stock |
Accumulated
Other
Comprehensive
Loss |
Total
Shareholders’
Equity | ||||||||||||||||||||||||
(in
millions, except per share data) |
Shares
Outstanding |
Amount |
Capital
Surplus |
Retained
Earnings |
Treasury
Stock |
|||||||||||||||||||||
BALANCE
AT DECEMBER 31, 2013 |
182.3 |
|
$ |
1,141 |
|
$ |
2,179 |
|
$ |
(391 |
) |
$ |
6,318 |
|
$ |
(2,097 |
) |
$ |
7,150 |
| ||||||
Net income |
— |
|
— |
|
— |
|
— |
|
593 |
|
— |
|
593 |
| ||||||||||||
Other comprehensive income,
net of tax |
— |
|
— |
|
— |
|
(21 |
) |
— |
|
— |
|
(21 |
) | ||||||||||||
Cash dividends declared on
common stock ($0.79 per share) |
— |
|
— |
|
— |
|
— |
|
(143 |
) |
— |
|
(143 |
) | ||||||||||||
Purchase of common
stock |
(5.4 |
) |
— |
|
— |
|
— |
|
— |
|
(260 |
) |
(260 |
) | ||||||||||||
Net issuance of common stock
under employee stock plans |
2.1 |
|
— |
|
(27 |
) |
— |
|
(24 |
) |
96 |
|
45 |
| ||||||||||||
Share-based
compensation |
— |
|
— |
|
38 |
|
— |
|
— |
|
— |
|
38 |
| ||||||||||||
Other |
— |
|
— |
|
(2 |
) |
— |
|
— |
|
2 |
|
— |
| ||||||||||||
BALANCE
AT DECEMBER 31, 2014 |
179.0 |
|
1,141 |
|
2,188 |
|
(412 |
) |
6,744 |
|
(2,259 |
) |
7,402 |
| ||||||||||||
Net
income |
— |
|
— |
|
— |
|
— |
|
521 |
|
— |
|
521 |
| ||||||||||||
Other comprehensive loss,
net of tax |
— |
|
— |
|
— |
|
(17 |
) |
— |
|
— |
|
(17 |
) | ||||||||||||
Cash dividends declared on
common stock ($0.83 per share) |
— |
|
— |
|
— |
|
— |
|
(148 |
) |
— |
|
(148 |
) | ||||||||||||
Purchase of common
stock |
(5.3 |
) |
— |
|
— |
|
— |
|
— |
|
(240 |
) |
(240 |
) | ||||||||||||
Purchase
and retirement of warrants |
— |
|
— |
|
(10 |
) |
— |
|
— |
|
— |
|
(10 |
) | ||||||||||||
Net issuance of common stock
under employee stock plans |
1.0 |
|
— |
|
(22 |
) |
— |
|
(11 |
) |
47 |
|
14 |
| ||||||||||||
Net issuance of common stock
for warrants |
1.0 |
|
(21 |
) |
(22 |
) |
43 |
|
— |
| ||||||||||||||||
Share-based
compensation |
— |
|
— |
|
38 |
|
— |
|
— |
|
— |
|
38 |
| ||||||||||||
BALANCE
AT DECEMBER 31, 2015 |
175.7 |
|
1,141 |
|
2,173 |
|
(429 |
) |
7,084 |
|
(2,409 |
) |
7,560 |
| ||||||||||||
Net
income |
— |
|
— |
|
— |
|
— |
|
477 |
|
— |
|
477 |
| ||||||||||||
Other comprehensive income,
net of tax |
— |
|
— |
|
— |
|
46 |
|
— |
|
— |
|
46 |
| ||||||||||||
Cash dividends declared on
common stock ($0.89 per share) |
— |
|
— |
|
— |
|
— |
|
(154 |
) |
— |
|
(154 |
) | ||||||||||||
Purchase of common
stock |
(6.8 |
) |
— |
|
— |
|
— |
|
— |
|
(310 |
) |
(310 |
) | ||||||||||||
Net issuance of common stock
under employee stock plans |
4.1 |
|
— |
|
(15 |
) |
— |
|
(27 |
) |
185 |
|
143 |
| ||||||||||||
Net issuance of common stock
for warrants |
2.3 |
|
— |
|
(57 |
) |
— |
|
(49 |
) |
106 |
|
— |
| ||||||||||||
Share-based
compensation |
— |
|
— |
|
34 |
|
— |
|
— |
|
— |
|
34 |
| ||||||||||||
BALANCE
AT DECEMBER 31, 2016 |
175.3 |
|
$ |
1,141 |
|
$ |
2,135 |
|
$ |
(383 |
) |
$ |
7,331 |
|
$ |
(2,428 |
) |
$ |
7,796 |
|
(in
millions) |
|||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||
OPERATING
ACTIVITIES |
|||||||||||
Net
income |
$ |
477 |
|
$ |
521 |
|
$ |
593 |
| ||
Adjustments
to reconcile net income to net cash provided by operating
activities: |
|||||||||||
Provision
for credit losses |
248 |
|
147 |
|
27 |
| |||||
(Benefit)
provision for deferred income taxes |
(51 |
) |
(71 |
) |
130 |
| |||||
Depreciation
and amortization |
121 |
|
118 |
|
123 |
| |||||
Net
periodic defined benefit cost |
6 |
|
48 |
|
40 |
| |||||
Share-based
compensation expense |
34 |
|
38 |
|
38 |
| |||||
Net
amortization of securities |
8 |
|
13 |
|
13 |
| |||||
Accretion
of loan purchase discount |
(4 |
) |
(7 |
) |
(34 |
) | |||||
Net
securities losses |
5 |
|
2 |
|
— |
| |||||
Net
gains on sales of foreclosed property |
(4 |
) |
(2 |
) |
(4 |
) | |||||
Gain
on debt redemption |
— |
|
— |
|
(32 |
) | |||||
Excess
tax benefits from share-based compensation arrangements |
(9 |
) |
(3 |
) |
(7 |
) | |||||
Net
change in: |
|||||||||||
Trading
securities |
— |
|
— |
|
13 |
| |||||
Accrued
income receivable |
(20 |
) |
(12 |
) |
(4 |
) | |||||
Accrued
expenses payable |
37 |
|
(35 |
) |
(14 |
) | |||||
Other,
net |
(355 |
) |
105 |
|
(243 |
) | |||||
Net
cash provided by operating activities |
493 |
|
862 |
|
639 |
| |||||
INVESTING
ACTIVITIES |
|||||||||||
Investment
securities available-for-sale: |
|||||||||||
Maturities
and redemptions |
1,699 |
|
1,757 |
|
1,781 |
| |||||
Purchases |
(2,045 |
) |
(4,228 |
) |
(2,372 |
) | |||||
Investment
securities held-to-maturity: |
|||||||||||
Maturities
and redemptions |
402 |
|
324 |
|
— |
| |||||
Purchases |
— |
|
(362 |
) |
— |
| |||||
Net
change in loans |
(136 |
) |
(644 |
) |
(3,144 |
) | |||||
(Purchases)
sales of Federal Home Loan Bank stock |
(115 |
) |
— |
|
41 |
| |||||
Proceeds
from sales of foreclosed property |
20 |
|
12 |
|
20 |
| |||||
Net
increase in premises and equipment |
(95 |
) |
(119 |
) |
(70 |
) | |||||
Other,
net |
— |
|
5 |
|
1 |
| |||||
Net
cash used in investing activities |
(270 |
) |
(3,255 |
) |
(3,743 |
) | |||||
FINANCING
ACTIVITIES |
|||||||||||
Net
change in: |
|||||||||||
Deposits |
(998 |
) |
2,529 |
|
4,013 |
| |||||
Short-term
borrowings |
2 |
|
(93 |
) |
(137 |
) | |||||
Medium-
and long-term debt: |
|||||||||||
Maturities
and redemptions |
(650 |
) |
(606 |
) |
(1,406 |
) | |||||
Issuances |
2,800 |
|
1,016 |
|
596 |
| |||||
Common
stock: |
|||||||||||
Repurchases |
(310 |
) |
(240 |
) |
(260 |
) | |||||
Cash
dividends paid |
(152 |
) |
(147 |
) |
(137 |
) | |||||
Issuances
under employee stock plans |
152 |
|
22 |
|
49 |
| |||||
Purchase
and retirement of warrants |
— |
|
(10 |
) |
— |
| |||||
Excess
tax benefits from share-based compensation arrangements |
9 |
|
3 |
|
7 |
| |||||
Other,
net |
(5 |
) |
(5 |
) |
(1 |
) | |||||
Net
cash provided by financing activities |
848 |
|
2,469 |
|
2,724 |
| |||||
Net
increase (decrease) in cash and cash equivalents |
1,071 |
|
76 |
|
(380 |
) | |||||
Cash
and cash equivalents at beginning of period |
6,147 |
|
6,071 |
|
6,451 |
| |||||
Cash
and cash equivalents at end of period |
$ |
7,218 |
|
$ |
6,147 |
|
$ |
6,071 |
| ||
Interest
paid |
$ |
111 |
|
$ |
94 |
|
$ |
101 |
| ||
Income
taxes paid |
106 |
|
88 |
|
218 |
| |||||
Noncash
investing and financing activities: |
|||||||||||
Loans
transferred to other real estate |
21 |
|
12 |
|
16 |
| |||||
Loans
transferred from portfolio to held-for-sale |
— |
|
28 |
|
— |
| |||||
Loans
transferred from held-for-sale to portfolio |
17 |
|
— |
|
— |
| |||||
Lease
residual transferred to other assets |
— |
|
16 |
|
— |
| |||||
Securities
transferred from available-for-sale to held-to-maturity |
— |
|
— |
|
1,958 |
|
Level 1 |
Valuation
is based upon quoted prices for identical instruments traded in active
markets. | ||
Level
2 |
Valuation
is based upon quoted prices for similar instruments in active markets,
quoted prices for identical or similar instruments in markets that are not
active, and model-based valuation techniques for which all significant
assumptions are observable in the market. | ||
Level
3 |
Valuation
is generated from model-based techniques that use at least one significant
assumption not observable in the market. These unobservable assumptions
reflect estimates of assumptions that market participants would use in
pricing the asset or liability. Valuation techniques include use of option
pricing models, discounted cash flow models and similar
techniques. |
(in
millions) |
Total |
Level 1 |
Level 2 |
Level 3 |
||||||||||||
December 31,
2016 |
||||||||||||||||
Trading
securities: |
||||||||||||||||
Deferred
compensation plan assets |
$ |
87 |
|
$ |
87 |
|
$ |
— |
|
$ |
— |
|
||||
Equity
and other non-debt securities |
1 |
|
1 |
|
— |
|
— |
|
||||||||
Total
trading securities |
88 |
|
88 |
|
— |
|
— |
|
||||||||
Investment
securities available-for-sale: |
||||||||||||||||
U.S.
Treasury and other U.S. government agency securities |
2,779 |
|
2,779 |
|
— |
|
— |
|
||||||||
Residential
mortgage-backed securities (a) |
7,872 |
|
— |
|
7,872 |
|
— |
|
||||||||
State
and municipal securities |
7 |
|
— |
|
— |
|
7 |
|
(b) | |||||||
Equity
and other non-debt securities |
129 |
|
82 |
|
— |
|
47 |
|
(b) | |||||||
Total
investment securities available-for-sale |
10,787 |
|
2,861 |
|
7,872 |
|
54 |
|
||||||||
Derivative
assets: |
||||||||||||||||
Interest
rate contracts |
223 |
|
— |
|
212 |
|
11 |
|
||||||||
Energy
derivative contracts |
146 |
|
— |
|
146 |
|
— |
|
||||||||
Foreign
exchange contracts |
38 |
|
— |
|
38 |
|
— |
|
||||||||
Warrants |
3 |
|
— |
|
— |
|
3 |
|
||||||||
Total
derivative assets |
410 |
|
— |
|
396 |
|
14 |
|
||||||||
Total
assets at fair value |
$ |
11,285 |
|
$ |
2,949 |
|
$ |
8,268 |
|
$ |
68 |
|
||||
Derivative
liabilities: |
||||||||||||||||
Interest
rate contracts |
$ |
81 |
|
$ |
— |
|
$ |
81 |
|
$ |
— |
|
||||
Energy
derivative contracts |
144 |
|
— |
|
144 |
|
— |
|
||||||||
Foreign
exchange contracts |
29 |
|
— |
|
29 |
|
— |
|
||||||||
Total
derivative liabilities |
254 |
|
— |
|
254 |
|
— |
|
||||||||
Deferred
compensation plan liabilities |
87 |
|
87 |
|
— |
|
— |
|
||||||||
Total
liabilities at fair value |
$ |
341 |
|
$ |
87 |
|
$ |
254 |
|
$ |
— |
|
(a) |
Issued
and/or guaranteed by U.S. government agencies or U.S. government-sponsored
enterprises. |
(b) |
Auction-rate
securities. |
(in
millions) |
Total |
Level 1 |
Level 2 |
Level 3 |
||||||||||||
December 31,
2015 |
||||||||||||||||
Trading
securities: |
||||||||||||||||
Deferred
compensation plan assets |
$ |
89 |
|
$ |
89 |
|
$ |
— |
|
$ |
— |
|
||||
Equity
and other non-debt securities |
3 |
|
3 |
|
— |
|
— |
|
||||||||
Total
trading securities |
92 |
|
92 |
|
— |
|
— |
|
||||||||
Investment
securities available-for-sale: |
||||||||||||||||
U.S.
Treasury and other U.S. government agency securities |
2,763 |
|
2,763 |
|
— |
|
— |
|
||||||||
Residential
mortgage-backed securities (a) |
7,545 |
|
— |
|
7,545 |
|
— |
|
||||||||
State
and municipal securities |
9 |
|
— |
|
— |
|
9 |
|
(b) | |||||||
Corporate
debt securities |
1 |
|
— |
|
— |
|
1 |
|
(b) | |||||||
Equity
and other non-debt securities |
201 |
|
134 |
|
— |
|
67 |
|
(b) | |||||||
Total
investment securities available-for-sale |
10,519 |
|
2,897 |
|
7,545 |
|
77 |
|
||||||||
Derivative
assets: |
||||||||||||||||
Interest
rate contracts |
286 |
|
— |
|
277 |
|
9 |
|
||||||||
Energy
derivative contracts |
475 |
|
— |
|
475 |
|
— |
|
||||||||
Foreign
exchange contracts |
57 |
|
— |
|
57 |
|
— |
|
||||||||
Warrants |
2 |
|
— |
|
— |
|
2 |
|
||||||||
Total
derivative assets |
820 |
|
— |
|
809 |
|
11 |
|
||||||||
Total
assets at fair value |
$ |
11,431 |
|
$ |
2,989 |
|
$ |
8,354 |
|
$ |
88 |
|
||||
Derivative
liabilities: |
||||||||||||||||
Interest
rate contracts |
$ |
92 |
|
$ |
— |
|
$ |
92 |
|
$ |
— |
|
||||
Energy
derivative contracts |
472 |
|
— |
|
472 |
|
— |
|
||||||||
Foreign
exchange contracts |
46 |
|
— |
|
46 |
|
— |
|
||||||||
Total
derivative liabilities |
610 |
|
— |
|
610 |
|
— |
|
||||||||
Deferred
compensation plan liabilities |
89 |
|
89 |
|
— |
|
— |
|
||||||||
Total
liabilities at fair value |
$ |
699 |
|
$ |
89 |
|
$ |
610 |
|
$ |
— |
|
(a) |
Issued
and/or guaranteed by U.S. government agencies or U.S. government-sponsored
enterprises. |
(b) |
Auction-rate
securities. |
Net
Realized/Unrealized Gains (Losses) (Pretax) |
||||||||||||||||||||||||||
Balance
at
Beginning
of
Period |
Recorded in Earnings |
Recorded
in
Other
Comprehensive
Income |
Balance
at
End of
Period | |||||||||||||||||||||||
(in
millions) |
Realized |
Unrealized |
Redemptions |
Sales |
||||||||||||||||||||||
Year
Ended December 31, 2016 |
||||||||||||||||||||||||||
Investment securities
available-for-sale: |
||||||||||||||||||||||||||
State
and municipal securities (a) |
$ |
9 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
(2 |
) |
$ |
— |
|
$ |
7 |
| ||||||
Corporate
debt securities (a) |
1 |
|
— |
|
— |
|
— |
|
(1 |
) |
— |
|
— |
| ||||||||||||
Equity
and other non-debt securities (a) |
67 |
|
— |
|
— |
|
(1 |
) |
(c) |
(19 |
) |
— |
|
47 |
| |||||||||||
Total investment securities
available-for-sale |
77 |
|
— |
|
— |
|
(1 |
) |
(c) |
(22 |
) |
— |
|
54 |
| |||||||||||
Derivative
assets: |
||||||||||||||||||||||||||
Interest
rate contracts |
9 |
|
— |
|
2 |
|
(b) |
— |
|
— |
|
— |
|
11 |
| |||||||||||
Warrants |
2 |
|
6 |
|
(b) |
1 |
|
(b) |
— |
|
— |
|
(6 |
) |
3 |
| ||||||||||
Year
Ended December 31, 2015 |
||||||||||||||||||||||||||
Investment securities
available-for-sale: |
||||||||||||||||||||||||||
State
and municipal securities (a) |
$ |
23 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
(14 |
) |
$ |
— |
|
$ |
9 |
| ||||||
Corporate
debt securities (a) |
1 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
1 |
| ||||||||||||
Equity
and other non-debt securities (a) |
112 |
|
(2 |
) |
(d) |
— |
|
1 |
|
(c) |
(44 |
) |
— |
|
67 |
| ||||||||||
Total investment securities
available-for-sale |
136 |
|
(2 |
) |
(d) |
— |
|
1 |
|
(c) |
(58 |
) |
— |
|
77 |
| ||||||||||
Derivative
assets: |
||||||||||||||||||||||||||
Interest
rate contracts |
— |
|
— |
|
9 |
|
(b) |
— |
|
— |
|
— |
|
9 |
| |||||||||||
Warrants |
4 |
|
6 |
|
(b) |
(1 |
) |
(b) |
— |
|
— |
|
(7 |
) |
2 |
|
(a) |
Auction-rate
securities. |
(b) |
Realized
and unrealized gains and losses due to changes in fair value recorded in
"other noninterest income" on the consolidated statements of
income. |
(c) |
Recorded
in "net unrealized gains (losses) on investment securities
available-for-sale" in other comprehensive income
(loss). |
(d) |
Realized
and unrealized gains and losses due to changes in fair value recorded in
"net securities losses" on the consolidated statements of
income. |
(in
millions) |
Total |
Level
2 |
Level 3 | ||||||||
December 31,
2016 |
|||||||||||
Loans: |
|||||||||||
Commercial |
$ |
256 |
|
$ |
— |
|
$ |
256 |
| ||
Commercial
mortgage |
15 |
|
— |
|
15 |
| |||||
International |
11 |
|
— |
|
11 |
| |||||
Total
loans |
282 |
|
— |
|
282 |
| |||||
Other
real estate |
1 |
|
— |
|
1 |
| |||||
Total
assets at fair value |
$ |
283 |
|
$ |
— |
|
$ |
283 |
| ||
December 31,
2015 |
|||||||||||
Loans
held-for-sale: |
|||||||||||
Commercial |
$ |
8 |
|
$ |
8 |
|
$ |
— |
| ||
Loans: |
|||||||||||
Commercial |
134 |
|
— |
|
134 |
| |||||
Commercial
mortgage |
11 |
|
— |
|
11 |
| |||||
International |
8 |
|
— |
|
8 |
| |||||
Total
loans |
153 |
|
— |
|
153 |
| |||||
Other
real estate |
2 |
|
— |
|
2 |
| |||||
Total
assets at fair value excluding investments recorded at net asset
value |
163 |
|
8 |
|
155 |
| |||||
Other
investments recorded at net asset value: |
|||||||||||
Nonmarketable
equity securities (a) |
1 |
|
|||||||||
Total
assets at fair value |
$ |
164 |
|
(a) |
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. |
Discounted
Cash Flow Model | |||||||
Unobservable
Input | |||||||
Fair
Value
(in
millions) |
Discount
Rate |
Workout
Period (in
years) | |||||
December 31,
2016 |
|||||||
State
and municipal securities (a) |
$ |
7 |
|
4%
- 6% |
1
- 2 | ||
Equity
and other non-debt securities (a) |
47 |
|
7%
- 9% |
1
- 2 | |||
December 31,
2015 |
|||||||
State
and municipal securities (a) |
$ |
9 |
|
3%
- 8% |
1
- 2 | ||
Equity
and other non-debt securities (a) |
67 |
|
4%
- 9% |
1 |
(a) |
Auction-rate
securities. |
|
Carrying
Amount |
Estimated
Fair Value | |||||||||||||||||
(in
millions) |
Total |
Level
1 |
Level
2 |
Level
3 | |||||||||||||||
December 31,
2016 |
|||||||||||||||||||
Assets |
|||||||||||||||||||
Cash
and due from banks |
$ |
1,249 |
|
$ |
1,249 |
|
$ |
1,249 |
|
$ |
— |
|
$ |
— |
| ||||
Interest-bearing
deposits with banks |
5,969 |
|
5,969 |
|
5,969 |
|
— |
|
— |
| |||||||||
Investment
securities held-to-maturity |
1,582 |
|
1,576 |
|
— |
|
1,576 |
|
— |
| |||||||||
Loans
held-for-sale |
4 |
|
4 |
|
— |
|
4 |
|
— |
| |||||||||
Total
loans, net of allowance for loan losses (a) |
48,358 |
|
48,250 |
|
— |
|
— |
|
48,250 |
| |||||||||
Customers’
liability on acceptances outstanding |
5 |
|
5 |
|
5 |
|
— |
|
— |
| |||||||||
Restricted
equity investments |
207 |
|
207 |
|
207 |
|
— |
|
— |
| |||||||||
Nonmarketable
equity securities (b) |
11 |
|
16 |
|
|
|
|
|
|
| |||||||||
Liabilities |
|||||||||||||||||||
Demand
deposits (noninterest-bearing) |
31,540 |
|
31,540 |
|
— |
|
31,540 |
|
— |
| |||||||||
Interest-bearing
deposits |
24,639 |
|
24,639 |
|
— |
|
24,639 |
|
— |
| |||||||||
Customer
certificates of deposit |
2,806 |
|
2,731 |
|
— |
|
2,731 |
|
— |
| |||||||||
Total
deposits |
58,985 |
|
58,910 |
|
— |
|
58,910 |
|
— |
| |||||||||
Short-term
borrowings |
25 |
|
25 |
|
25 |
|
— |
|
— |
| |||||||||
Acceptances
outstanding |
5 |
|
5 |
|
5 |
|
— |
|
— |
| |||||||||
Medium-
and long-term debt |
5,160 |
|
5,132 |
|
— |
|
5,132 |
|
— |
| |||||||||
Credit-related
financial instruments |
(73 |
) |
(73 |
) |
— |
|
— |
|
(73 |
) | |||||||||
December 31,
2015 |
|||||||||||||||||||
Assets |
|||||||||||||||||||
Cash
and due from banks |
$ |
1,157 |
|
$ |
1,157 |
|
$ |
1,157 |
|
$ |
— |
|
$ |
— |
| ||||
Interest-bearing
deposits with banks |
4,990 |
|
4,990 |
|
4,990 |
|
— |
|
— |
| |||||||||
Investment
securities held-to-maturity |
1,981 |
|
1,973 |
|
— |
|
1,973 |
|
— |
| |||||||||
Loans
held-for-sale (c) |
21 |
|
21 |
|
— |
|
21 |
|
— |
| |||||||||
Total
loans, net of allowance for loan losses (a) |
48,450 |
|
48,269 |
|
— |
|
— |
|
48,269 |
| |||||||||
Customers’
liability on acceptances outstanding |
5 |
|
5 |
|
5 |
|
— |
|
— |
| |||||||||
Restricted
equity investments |
92 |
|
92 |
|
92 |
|
— |
|
— |
| |||||||||
Nonmarketable
equity securities (b) (d) |
10 |
|
18 |
|
|
|
| ||||||||||||
Liabilities |
|||||||||||||||||||
Demand
deposits (noninterest-bearing) |
30,839 |
|
30,839 |
|
— |
|
30,839 |
|
— |
| |||||||||
Interest-bearing
deposits |
25,462 |
|
25,462 |
|
— |
|
25,462 |
|
— |
| |||||||||
Customer
certificates of deposit |
3,552 |
|
3,536 |
|
— |
|
3,536 |
|
— |
| |||||||||
Total
deposits |
59,853 |
|
59,837 |
|
— |
|
59,837 |
|
— |
| |||||||||
Short-term
borrowings |
23 |
|
23 |
|
23 |
|
— |
|
— |
| |||||||||
Acceptances
outstanding |
5 |
|
5 |
|
5 |
|
— |
|
— |
| |||||||||
Medium-
and long-term debt |
3,058 |
|
3,032 |
|
— |
|
3,032 |
|
— |
| |||||||||
Credit-related
financial instruments |
(83 |
) |
(83 |
) |
— |
|
— |
|
(83 |
) |
(a) |
Included
$282
million
and $153
million
of impaired loans recorded at fair value on a nonrecurring basis at
December 31,
2016
and 2015,
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. |
(c) |
Included
$8
million
impaired loans held-for-sale recorded at fair value on a nonrecurring
basis at December 31,
2015. |
(d) |
Included
$1
million
of nonmarketable equity securities recorded at fair value on a
nonrecurring basis at December 31,
2015. |
(in
millions) |
Amortized
Cost |
Gross
Unrealized
Gains |
Gross
Unrealized
Losses |
Fair Value | |||||||||||
December 31,
2016 |
|||||||||||||||
Investment
securities available-for-sale: |
|||||||||||||||
U.S.
Treasury and other U.S. government agency securities |
$ |
2,772 |
|
$ |
8 |
|
$ |
1 |
|
$ |
2,779 |
| |||
Residential
mortgage-backed securities (a) |
7,921 |
|
48 |
|
97 |
|
7,872 |
| |||||||
State
and municipal securities |
7 |
|
— |
|
— |
|
7 |
| |||||||
Equity
and other non-debt securities |
129 |
|
1 |
|
1 |
|
129 |
| |||||||
Total
investment securities available-for-sale (b) |
$ |
10,829 |
|
$ |
57 |
|
$ |
99 |
|
$ |
10,787 |
| |||
Investment
securities held-to-maturity (c): |
|||||||||||||||
Residential
mortgage-backed securities (a) |
$ |
1,582 |
|
$ |
1 |
|
$ |
7 |
|
$ |
1,576 |
| |||
December 31,
2015 |
|||||||||||||||
Investment
securities available-for-sale: |
|||||||||||||||
U.S.
Treasury and other U.S. government agency securities |
$ |
2,769 |
|
$ |
1 |
|
$ |
7 |
|
$ |
2,763 |
| |||
Residential
mortgage-backed securities (a) |
7,513 |
|
76 |
|
44 |
|
7,545 |
| |||||||
State
and municipal securities |
9 |
|
— |
|
— |
|
9 |
| |||||||
Corporate
debt securities |
1 |
|
— |
|
— |
|
1 |
| |||||||
Equity
and other non-debt securities |
199 |
|
2 |
|
— |
|
201 |
| |||||||
Total
investment securities available-for-sale (b) |
$ |
10,491 |
|
$ |
79 |
|
$ |
51 |
|
$ |
10,519 |
| |||
Investment
securities held-to-maturity (c): |
|||||||||||||||
Residential
mortgage-backed securities (a) |
$ |
1,981 |
|
$ |
2 |
|
$ |
10 |
|
$ |
1,973 |
|
(a) |
Issued
and/or guaranteed by U.S. government agencies or U.S. government-sponsored
enterprises. |
(b) |
Included
auction-rate securities at amortized cost and fair value of $55
million
and $54
million,
respectively, as of December 31,
2016
and $76
million
and $77
million,
respectively, as of December 31,
2015. |
(c) |
The
amortized cost of investment securities held-to-maturity included net
unrealized losses of $12
million
at December 31,
2016
and $15
million
at December 31,
2015
related to securities transferred from available-for-sale, which are
included in accumulated other comprehensive
loss. |
|
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 | ||||||||||||||||||||
December 31,
2016 |
||||||||||||||||||||||||||
U.S. Treasury and other
U.S. government agency securities |
$ |
527 |
|
$ |
1 |
|
$ |
— |
|
$ |
— |
|
$ |
527 |
|
$ |
1 |
|
||||||||
Residential
mortgage-backed securities (a) |
4,992 |
|
87 |
|
1,177 |
|
32 |
|
6,169 |
|
119 |
|
||||||||||||||
State
and municipal securities (b) |
— |
|
— |
|
7 |
|
— |
|
(c) |
7 |
|
— |
|
(c) | ||||||||||||
Equity
and other non-debt securities (b) |
36 |
|
— |
|
(c) |
11 |
|
— |
|
(c) |
47 |
|
— |
|
(c) | |||||||||||
Total
impaired securities |
$ |
5,555 |
|
$ |
88 |
|
$ |
1,195 |
|
|
$ |
32 |
|
$ |
6,750 |
|
$ |
120 |
|
|||||||
December 31,
2015 |
||||||||||||||||||||||||||
U.S. Treasury and other
U.S. government agency securities |
$ |
2,265 |
|
$ |
7 |
|
$ |
— |
|
$ |
— |
|
$ |
2,265 |
|
$ |
7 |
|
||||||||
Residential
mortgage-backed securities (a) |
2,665 |
|
21 |
|
1,976 |
|
51 |
|
4,641 |
|
72 |
|
||||||||||||||
State
and municipal securities (b) |
— |
|
— |
|
9 |
|
— |
|
(c) |
9 |
|
— |
|
(c) | ||||||||||||
Corporate
debt securities (b) |
— |
|
— |
|
1 |
|
— |
|
(c) |
1 |
|
— |
|
(c) | ||||||||||||
Equity
and other non-debt securities (b) |
14 |
|
— |
|
(c) |
— |
|
— |
|
14 |
|
— |
|
(c) | ||||||||||||
Total
impaired securities |
$ |
4,944 |
|
$ |
28 |
|
$ |
1,986 |
|
$ |
51 |
|
$ |
6,930 |
|
$ |
79 |
|
(a) |
Issued
and/or guaranteed by U.S. government agencies or U.S. government-sponsored
enterprises. |
(b) |
Primarily
auction-rate securities. |
(c) |
Unrealized
losses less than $0.5 million. |
(in
millions) |
||||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | |||||||||||
Securities
gains |
$ |
— |
|
$ |
— |
|
$ |
2 |
|
|||||
Securities
losses (a) |
(5 |
) |
(2 |
) |
(2 |
) |
||||||||
Net
securities losses |
$ |
(5 |
) |
$ |
(2 |
) |
$ |
— |
|
(a) |
Primarily
charges related to a derivative contract tied to the conversion rate of
Visa Class B shares. |
(in
millions) |
Available-for-sale |
Held-to-maturity | ||||||||||||
December 31,
2016 |
Amortized
Cost |
Fair
Value |
Amortized
Cost |
Fair
Value | ||||||||||
Contractual
maturity |
||||||||||||||
Within
one year |
$ |
30 |
|
$ |
30 |
|
$ |
— |
|
$ |
— |
| ||
After
one year through five years |
2,840 |
|
2,847 |
|
— |
|
— |
| ||||||
After
five years through ten years |
1,707 |
|
1,742 |
|
23 |
|
23 |
| ||||||
After
ten years |
6,123 |
|
6,039 |
|
1,559 |
|
1,553 |
| ||||||
Subtotal |
10,700 |
|
10,658 |
|
1,582 |
|
1,576 |
| ||||||
Equity
and other non-debt securities |
129 |
|
129 |
|
— |
|
— |
| ||||||
Total
investment securities |
$ |
10,829 |
|
$ |
10,787 |
|
$ |
1,582 |
|
$ |
1,576 |
|
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 | ||||||||||||||||||||
December 31,
2016 |
|||||||||||||||||||||||||||
Business
loans: |
|||||||||||||||||||||||||||
Commercial |
$ |
30 |
|
$ |
12 |
|
$ |
14 |
|
$ |
56 |
|
$ |
445 |
|
$ |
30,493 |
|
$ |
30,994 |
| ||||||
Real
estate construction: |
|||||||||||||||||||||||||||
Commercial Real Estate
business line (a) |
— |
|
— |
|
— |
|
— |
|
— |
|
2,485 |
|
2,485 |
| |||||||||||||
Other
business lines (b) |
— |
|
— |
|
— |
|
— |
|
— |
|
384 |
|
384 |
| |||||||||||||
Total
real estate construction |
— |
|
— |
|
— |
|
— |
|
— |
|
2,869 |
|
2,869 |
| |||||||||||||
Commercial
mortgage: |
|||||||||||||||||||||||||||
Commercial Real Estate
business line (a) |
5 |
|
— |
|
— |
|
5 |
|
9 |
|
2,004 |
|
2,018 |
| |||||||||||||
Other
business lines (b) |
58 |
|
5 |
|
5 |
|
68 |
|
37 |
|
6,808 |
|
6,913 |
| |||||||||||||
Total
commercial mortgage |
63 |
|
5 |
|
5 |
|
73 |
|
46 |
|
8,812 |
|
8,931 |
| |||||||||||||
Lease
financing |
— |
|
— |
|
— |
|
— |
|
6 |
|
566 |
|
572 |
| |||||||||||||
International |
1 |
|
— |
|
— |
|
1 |
|
14 |
|
1,243 |
|
1,258 |
| |||||||||||||
Total
business loans |
94 |
|
17 |
|
19 |
|
130 |
|
511 |
|
43,983 |
|
44,624 |
| |||||||||||||
Retail
loans: |
|||||||||||||||||||||||||||
Residential
mortgage |
7 |
|
3 |
|
— |
|
10 |
|
39 |
|
1,893 |
|
1,942 |
| |||||||||||||
Consumer: |
|||||||||||||||||||||||||||
Home
equity |
4 |
|
3 |
|
— |
|
7 |
|
28 |
|
1,765 |
|
1,800 |
| |||||||||||||
Other
consumer |
1 |
|
— |
|
— |
|
1 |
|
4 |
|
717 |
|
722 |
| |||||||||||||
Total
consumer |
5 |
|
3 |
|
— |
|
8 |
|
32 |
|
2,482 |
|
2,522 |
| |||||||||||||
Total
retail loans |
12 |
|
6 |
|
— |
|
18 |
|
71 |
|
4,375 |
|
4,464 |
| |||||||||||||
Total
loans |
$ |
106 |
|
$ |
23 |
|
$ |
19 |
|
$ |
148 |
|
$ |
582 |
|
$ |
48,358 |
|
$ |
49,088 |
| ||||||
December 31,
2015 |
|||||||||||||||||||||||||||
Business
loans: |
|||||||||||||||||||||||||||
Commercial |
$ |
46 |
|
$ |
12 |
|
$ |
13 |
|
$ |
71 |
|
$ |
238 |
|
$ |
31,350 |
|
$ |
31,659 |
| ||||||
Real
estate construction: |
|||||||||||||||||||||||||||
Commercial Real Estate
business line (a) |
5 |
|
— |
|
— |
|
5 |
|
— |
|
1,676 |
|
1,681 |
| |||||||||||||
Other
business lines (b) |
3 |
|
— |
|
— |
|
3 |
|
1 |
|
316 |
|
320 |
| |||||||||||||
Total
real estate construction |
8 |
|
— |
|
— |
|
8 |
|
1 |
|
1,992 |
|
2,001 |
| |||||||||||||
Commercial
mortgage: |
|||||||||||||||||||||||||||
Commercial Real Estate
business line (a) |
7 |
|
— |
|
1 |
|
8 |
|
16 |
|
2,080 |
|
2,104 |
| |||||||||||||
Other
business lines (b) |
7 |
|
5 |
|
3 |
|
15 |
|
44 |
|
6,814 |
|
6,873 |
| |||||||||||||
Total
commercial mortgage |
14 |
|
5 |
|
4 |
|
23 |
|
60 |
|
8,894 |
|
8,977 |
| |||||||||||||
Lease
financing |
— |
|
— |
|
— |
|
— |
|
6 |
|
718 |
|
724 |
| |||||||||||||
International |
2 |
|
— |
|
— |
|
2 |
|
8 |
|
1,358 |
|
1,368 |
| |||||||||||||
Total
business loans |
70 |
|
17 |
|
17 |
|
104 |
|
313 |
|
44,312 |
|
44,729 |
| |||||||||||||
Retail
loans: |
|||||||||||||||||||||||||||
Residential
mortgage |
26 |
|
1 |
|
— |
|
27 |
|
27 |
|
1,816 |
|
1,870 |
| |||||||||||||
Consumer: |
|||||||||||||||||||||||||||
Home
equity |
5 |
|
3 |
|
— |
|
8 |
|
27 |
|
1,685 |
|
1,720 |
| |||||||||||||
Other
consumer |
7 |
|
— |
|
— |
|
7 |
|
— |
|
758 |
|
765 |
| |||||||||||||
Total
consumer |
12 |
|
3 |
|
— |
|
15 |
|
27 |
|
2,443 |
|
2,485 |
| |||||||||||||
Total
retail loans |
38 |
|
4 |
|
— |
|
42 |
|
54 |
|
4,259 |
|
4,355 |
| |||||||||||||
Total
loans |
$ |
108 |
|
$ |
21 |
|
$ |
17 |
|
$ |
146 |
|
$ |
367 |
|
$ |
48,571 |
|
$ |
49,084 |
|
(a) |
Primarily
loans to real estate developers. |
(b) |
Primarily
loans secured by owner-occupied real
estate. |
|
Internally
Assigned Rating |
| |||||||||||||||||
(in
millions) |
Pass (a) |
Special
Mention (b) |
Substandard (c) |
Nonaccrual (d) |
Total | ||||||||||||||
December 31,
2016 |
|||||||||||||||||||
Business
loans: |
|||||||||||||||||||
Commercial |
$ |
28,616 |
|
$ |
944 |
|
$ |
989 |
|
$ |
445 |
|
$ |
30,994 |
| ||||
Real
estate construction: |
|||||||||||||||||||
Commercial
Real Estate business line (e) |
2,485 |
|
— |
|
— |
|
— |
|
2,485 |
| |||||||||
Other
business lines (f) |
381 |
|
— |
|
3 |
|
— |
|
384 |
| |||||||||
Total
real estate construction |
2,866 |
|
— |
|
3 |
|
— |
|
2,869 |
| |||||||||
Commercial
mortgage: |
|||||||||||||||||||
Commercial
Real Estate business line (e) |
1,970 |
|
19 |
|
20 |
|
9 |
|
2,018 |
| |||||||||
Other
business lines (f) |
6,645 |
|
109 |
|
122 |
|
37 |
|
6,913 |
| |||||||||
Total
commercial mortgage |
8,615 |
|
128 |
|
142 |
|
46 |
|
8,931 |
| |||||||||
Lease
financing |
550 |
|
11 |
|
5 |
|
6 |
|
572 |
| |||||||||
International |
1,200 |
|
22 |
|
22 |
|
14 |
|
1,258 |
| |||||||||
Total
business loans |
41,847 |
|
1,105 |
|
1,161 |
|
511 |
|
44,624 |
| |||||||||
Retail
loans: |
|||||||||||||||||||
Residential
mortgage |
1,900 |
|
3 |
|
— |
|
39 |
|
1,942 |
| |||||||||
Consumer: |
|||||||||||||||||||
Home
equity |
1,767 |
|
1 |
|
4 |
|
28 |
|
1,800 |
| |||||||||
Other
consumer |
718 |
|
— |
|
— |
|
4 |
|
722 |
| |||||||||
Total
consumer |
2,485 |
|
1 |
|
4 |
|
32 |
|
2,522 |
| |||||||||
Total
retail loans |
4,385 |
|
4 |
|
4 |
|
71 |
|
4,464 |
| |||||||||
Total
loans |
$ |
46,232 |
|
$ |
1,109 |
|
$ |
1,165 |
|
$ |
582 |
|
$ |
49,088 |
| ||||
December 31,
2015 |
|||||||||||||||||||
Business
loans: |
|||||||||||||||||||
Commercial |
$ |
29,117 |
|
$ |
1,293 |
|
$ |
1,011 |
|
$ |
238 |
|
$ |
31,659 |
| ||||
Real
estate construction: |
|||||||||||||||||||
Commercial
Real Estate business line (e) |
1,681 |
|
— |
|
— |
|
— |
|
1,681 |
| |||||||||
Other
business lines (f) |
318 |
|
1 |
|
— |
|
1 |
|
320 |
| |||||||||
Total
real estate construction |
1,999 |
|
1 |
|
— |
|
1 |
|
2,001 |
| |||||||||
Commercial
mortgage: |
|||||||||||||||||||
Commercial
Real Estate business line (e) |
2,031 |
|
31 |
|
26 |
|
16 |
|
2,104 |
| |||||||||
Other
business lines (f) |
6,536 |
|
172 |
|
121 |
|
44 |
|
6,873 |
| |||||||||
Total
commercial mortgage |
8,567 |
|
203 |
|
147 |
|
60 |
|
8,977 |
| |||||||||
Lease
financing |
693 |
|
17 |
|
8 |
|
6 |
|
724 |
| |||||||||
International |
1,245 |
|
59 |
|
56 |
|
8 |
|
1,368 |
| |||||||||
Total
business loans |
41,621 |
|
1,573 |
|
1,222 |
|
313 |
|
44,729 |
| |||||||||
Retail
loans: |
|||||||||||||||||||
Residential
mortgage |
1,828 |
|
2 |
|
13 |
|
27 |
|
1,870 |
| |||||||||
Consumer: |
|||||||||||||||||||
Home
equity |
1,687 |
|
1 |
|
5 |
|
27 |
|
1,720 |
| |||||||||
Other
consumer |
755 |
|
3 |
|
7 |
|
— |
|
765 |
| |||||||||
Total
consumer |
2,442 |
|
4 |
|
12 |
|
27 |
|
2,485 |
| |||||||||
Total
retail loans |
4,270 |
|
6 |
|
25 |
|
54 |
|
4,355 |
| |||||||||
Total
loans |
$ |
45,891 |
|
$ |
1,579 |
|
$ |
1,247 |
|
$ |
367 |
|
$ |
49,084 |
|
(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. 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. |
(in
millions) |
December 31,
2016 |
December 31,
2015 | |||||
Nonaccrual
loans |
$ |
582 |
|
$ |
367 |
| |
Reduced-rate
loans (a) |
8 |
|
12 |
| |||
Total
nonperforming loans |
590 |
|
379 |
| |||
Foreclosed
property (b) |
17 |
|
12 |
| |||
Total
nonperforming assets |
$ |
607 |
|
$ |
391 |
|
(a) |
There
were no
reduced-rate business loans at both December 31,
2016
and at December 31,
2015.
Reduced-rate retail loans totaled $8
million
and $12
million
at December 31,
2016
and 2015,
respectively. |
(b) |
Included
foreclosed residential real estate properties of $3
million
and $9
million
at December 31,
2016
and 2015,
respectively. |
|
2016 |
2015 |
2014 | |||||||||||||||||||||||||||||
(in
millions) |
Business
Loans |
Retail
Loans |
Total |
Business
Loans |
Retail
Loans |
Total |
Business
Loans |
Retail
Loans |
Total | |||||||||||||||||||||||
Years
Ended December 31 |
||||||||||||||||||||||||||||||||
Allowance
for loan losses: |
||||||||||||||||||||||||||||||||
Balance at beginning of
period |
$ |
579 |
|
$ |
55 |
|
$ |
634 |
|
$ |
534 |
|
$ |
60 |
|
$ |
594 |
|
$ |
531 |
|
$ |
67 |
|
$ |
598 |
| |||||
Loan
charge-offs |
(207 |
) |
(7 |
) |
(214 |
) |
(157 |
) |
(11 |
) |
(168 |
) |
(87 |
) |
(15 |
) |
(102 |
) | ||||||||||||||
Recoveries on loans
previously charged-off |
63 |
|
5 |
|
68 |
|
55 |
|
13 |
|
68 |
|
68 |
|
9 |
|
77 |
| ||||||||||||||
Net loan (charge-offs)
recoveries |
(144 |
) |
(2 |
) |
(146 |
) |
(102 |
) |
2 |
|
(100 |
) |
(19 |
) |
(6 |
) |
(25 |
) | ||||||||||||||
Provision
for loan losses |
246 |
|
(5 |
) |
241 |
|
149 |
|
(7 |
) |
142 |
|
23 |
|
(1 |
) |
22 |
| ||||||||||||||
Foreign currency translation
adjustment |
1 |
|
— |
|
1 |
|
(2 |
) |
— |
|
(2 |
) |
(1 |
) |
— |
|
(1 |
) | ||||||||||||||
Balance
at end of period |
$ |
682 |
|
$ |
48 |
|
$ |
730 |
|
$ |
579 |
|
$ |
55 |
|
$ |
634 |
|
$ |
534 |
|
$ |
60 |
|
$ |
594 |
| |||||
As
a percentage of total loans |
1.53 |
% |
1.08 |
% |
1.49 |
% |
1.30 |
% |
1.26 |
% |
1.29 |
% |
1.20 |
% |
1.43 |
% |
1.22 |
% | ||||||||||||||
December 31 |
||||||||||||||||||||||||||||||||
Allowance
for loan losses: |
||||||||||||||||||||||||||||||||
Individually evaluated for
impairment |
$ |
86 |
|
$ |
3 |
|
$ |
89 |
|
$ |
53 |
|
$ |
— |
|
$ |
53 |
|
$ |
39 |
|
$ |
— |
|
$ |
39 |
| |||||
Collectively evaluated for
impairment |
596 |
|
45 |
|
641 |
|
526 |
|
55 |
|
581 |
|
495 |
|
60 |
|
555 |
| ||||||||||||||
Total allowance for loan
losses |
$ |
682 |
|
$ |
48 |
|
$ |
730 |
|
$ |
579 |
|
$ |
55 |
|
$ |
634 |
|
$ |
534 |
|
$ |
60 |
|
$ |
594 |
| |||||
Loans: |
||||||||||||||||||||||||||||||||
Individually evaluated for
impairment |
$ |
566 |
|
$ |
48 |
|
$ |
614 |
|
$ |
393 |
|
$ |
31 |
|
$ |
424 |
|
$ |
177 |
|
$ |
42 |
|
$ |
219 |
| |||||
Collectively evaluated for
impairment |
44,058 |
|
4,416 |
|
48,474 |
|
44,336 |
|
4,324 |
|
48,660 |
|
44,203 |
|
4,171 |
|
48,374 |
| ||||||||||||||
Total loans evaluated for
impairment |
$ |
44,624 |
|
$ |
4,464 |
|
$ |
49,088 |
|
$ |
44,729 |
|
$ |
4,355 |
|
$ |
49,084 |
|
$ |
44,380 |
|
$ |
4,213 |
|
$ |
48,593 |
|
(in
millions) |
|||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||
Balance
at beginning of period |
$ |
45 |
|
$ |
41 |
|
$ |
36 |
| ||
Charge-offs
on lending-related commitments (a) |
(11 |
) |
(1 |
) |
— |
| |||||
Provision
for credit losses on lending-related commitments |
7 |
|
5 |
|
5 |
| |||||
Balance
at end of period |
$ |
41 |
|
$ |
45 |
|
$ |
41 |
|
|
Recorded
Investment In: |
|
| ||||||||||||||||
(in
millions) |
Impaired
Loans
with
No
Related
Allowance |
Impaired
Loans
with
Related
Allowance |
Total
Impaired
Loans |
Unpaid
Principal
Balance |
Related
Allowance
for
Loan
Losses | ||||||||||||||
December 31,
2016 |
|||||||||||||||||||
Business
loans: |
|||||||||||||||||||
Commercial |
$ |
90 |
|
$ |
423 |
|
$ |
513 |
|
$ |
608 |
|
$ |
80 |
| ||||
Commercial
mortgage: |
|||||||||||||||||||
Commercial
Real Estate business line (a) |
— |
|
7 |
|
7 |
|
15 |
|
1 |
| |||||||||
Other
business lines (b) |
2 |
|
30 |
|
32 |
|
40 |
|
3 |
| |||||||||
Total
commercial mortgage |
2 |
|
37 |
|
39 |
|
55 |
|
4 |
| |||||||||
International |
3 |
|
11 |
|
14 |
|
20 |
|
2 |
| |||||||||
Total
business loans |
95 |
|
471 |
|
566 |
|
683 |
|
86 |
| |||||||||
Retail
loans: |
|||||||||||||||||||
Residential
mortgage |
19 |
|
9 |
|
28 |
|
30 |
|
2 |
| |||||||||
Consumer: |
|||||||||||||||||||
Home
equity |
15 |
|
— |
|
15 |
|
19 |
|
— |
| |||||||||
Other
consumer |
2 |
|
3 |
|
5 |
|
6 |
|
1 |
| |||||||||
Total
consumer |
17 |
|
3 |
|
20 |
|
25 |
|
1 |
| |||||||||
Total
retail loans (c) |
36 |
|
12 |
|
48 |
|
55 |
|
3 |
| |||||||||
Total
individually evaluated impaired loans |
$ |
131 |
|
$ |
483 |
|
$ |
614 |
|
$ |
738 |
|
$ |
89 |
| ||||
December 31,
2015 |
|||||||||||||||||||
Business
loans: |
|||||||||||||||||||
Commercial |
$ |
82 |
|
$ |
252 |
|
$ |
334 |
|
$ |
398 |
|
$ |
45 |
| ||||
Commercial
mortgage: |
|||||||||||||||||||
Commercial
Real Estate business line (a) |
7 |
|
8 |
|
15 |
|
38 |
|
1 |
| |||||||||
Other
business lines (b) |
2 |
|
32 |
|
34 |
|
55 |
|
5 |
| |||||||||
Total
commercial mortgage |
9 |
|
40 |
|
49 |
|
93 |
|
6 |
| |||||||||
International |
— |
|
10 |
|
10 |
|
17 |
|
2 |
| |||||||||
Total
business loans |
91 |
|
302 |
|
393 |
|
508 |
|
53 |
| |||||||||
Retail
loans: |
|||||||||||||||||||
Residential
mortgage |
13 |
|
— |
|
13 |
|
13 |
|
— |
| |||||||||
Consumer: |
|||||||||||||||||||
Home
equity |
12 |
|
— |
|
12 |
|
16 |
|
— |
| |||||||||
Other
consumer |
6 |
|
— |
|
6 |
|
10 |
|
— |
| |||||||||
Total
consumer |
18 |
|
— |
|
18 |
|
26 |
|
— |
| |||||||||
Total
retail loans (c) |
31 |
|
— |
|
31 |
|
39 |
|
— |
| |||||||||
Total
individually evaluated impaired loans |
$ |
122 |
|
$ |
302 |
|
$ |
424 |
|
$ |
547 |
|
$ |
53 |
|
(a) |
Primarily
loans to real estate developers. |
(b) |
Primarily
loans secured by owner-occupied real
estate. |
(c) |
Individually
evaluated retail loans generally have no related allowance for loan
losses, primarily due to policy which results in direct write-downs of
most restructured retail loans. |
Individually
Evaluated Impaired Loans | |||||||||||||||||||||||
2016 |
2015 |
2014 | |||||||||||||||||||||
(in
millions) |
Average
Balance for the Period |
Interest
Income Recognized for the Period |
Average
Balance for the Period |
Interest
Income Recognized for the Period |
Average
Balance for the Period |
Interest
Income Recognized for the Period | |||||||||||||||||
Years
Ended December 31 |
|||||||||||||||||||||||
Business
loans: |
|||||||||||||||||||||||
Commercial |
$ |
550 |
|
$ |
10 |
|
$ |
206 |
|
$ |
5 |
|
$ |
77 |
|
$ |
2 |
| |||||
Real
estate construction: |
|||||||||||||||||||||||
Commercial Real Estate
business line (a) |
— |
|
— |
|
— |
|
— |
|
14 |
|
— |
| |||||||||||
Commercial
mortgage: |
|||||||||||||||||||||||
Commercial Real Estate
business line (a) |
9 |
|
— |
|
16 |
|
— |
|
48 |
|
— |
| |||||||||||
Other
business lines (b) |
31 |
|
1 |
|
39 |
|
1 |
|
64 |
|
2 |
| |||||||||||
Total
commercial mortgage |
40 |
|
1 |
|
55 |
|
1 |
|
112 |
|
2 |
| |||||||||||
International |
18 |
|
— |
|
6 |
|
— |
|
2 |
|
— |
| |||||||||||
Total
business loans |
608 |
|
11 |
|
267 |
|
6 |
|
205 |
|
4 |
| |||||||||||
Retail
loans: |
|||||||||||||||||||||||
Residential
mortgage |
15 |
|
— |
|
21 |
|
— |
|
30 |
|
— |
| |||||||||||
Consumer: |
|||||||||||||||||||||||
Home
equity |
13 |
|
— |
|
12 |
|
— |
|
12 |
|
— |
| |||||||||||
Other
consumer |
4 |
|
— |
|
6 |
|
— |
|
4 |
|
— |
| |||||||||||
Total
consumer |
17 |
|
— |
|
18 |
|
— |
|
16 |
|
— |
| |||||||||||
Total
retail loans |
32 |
|
— |
|
39 |
|
— |
|
46 |
|
— |
| |||||||||||
Total individually
evaluated impaired loans |
$ |
640 |
|
$ |
11 |
|
$ |
306 |
|
$ |
6 |
|
$ |
251 |
|
$ |
4 |
|
(a) |
Primarily
loans to real estate developers. |
(b) |
Primarily
loans secured by owner-occupied real
estate. |
2016 |
2015 | |||||||||||||||||||||||
Type
of Modification |
Type
of Modification |
|||||||||||||||||||||||
(in
millions) |
Principal
Deferrals (a) |
Interest
Rate Reductions |
AB
Note Restructures (b) |
Total
Modifications |
Principal
Deferrals (a) |
Interest
Rate Reductions |
Total
Modifications | |||||||||||||||||
Years
Ended December 31 |
||||||||||||||||||||||||
Business
loans: |
||||||||||||||||||||||||
Commercial |
$ |
140 |
|
$ |
— |
|
$ |
48 |
|
$ |
188 |
|
$ |
160 |
|
$ |
— |
|
$ |
160 |
| |||
Commercial
mortgage: |
||||||||||||||||||||||||
Commercial Real Estate
business line (c) |
— |
|
— |
|
— |
|
— |
|
8 |
|
— |
|
8 |
| ||||||||||
Other
business lines (d) |
5 |
|
— |
|
— |
|
5 |
|
6 |
|
— |
|
6 |
| ||||||||||
Total commercial
mortgage |
5 |
|
— |
|
— |
|
5 |
|
14 |
|
— |
|
14 |
| ||||||||||
International |
— |
|
— |
|
3 |
|
3 |
|
2 |
|
— |
|
2 |
| ||||||||||
Total
business loans |
145 |
|
— |
|
51 |
|
196 |
|
176 |
|
— |
|
176 |
| ||||||||||
Retail
loans: |
||||||||||||||||||||||||
Residential
mortgage |
— |
|
2 |
|
— |
|
2 |
|
— |
|
— |
|
— |
| ||||||||||
Consumer: |
||||||||||||||||||||||||
Home
equity |
2 |
|
(e) |
1 |
|
— |
|
3 |
|
1 |
|
(e) |
2 |
|
3 |
| ||||||||
Total
retail loans |
2 |
|
3 |
|
— |
|
5 |
|
|
1 |
|
2 |
|
3 |
| |||||||||
Total
loans |
$ |
147 |
|
$ |
3 |
|
$ |
51 |
|
$ |
201 |
|
$ |
177 |
|
$ |
2 |
|
$ |
179 |
|
(a) |
Primarily
represents loan balances where terms were extended 90 days or
more at or above contractual interest
rates. |
(b) |
Loan
restructurings whereby the original loan is restructured into two notes:
an "A" note, which generally reflects the portion of the modified loan
which is expected to be collected; and a "B" note, which is either fully
charged off or exchanged for an equity interest.
|
(c) |
Primarily
loans to real estate developers. |
(d) |
Primarily
loans secured by owner-occupied real
estate. |
(e) |
Includes
bankruptcy loans for which the court has discharged the borrower's
obligation and the borrower has not reaffirmed the
debt. |
2016 |
2015 | ||||||||||||||
(in
millions) |
Balance
at December 31 |
Subsequent
Default in the Year Ended December 31 |
Balance
at December 31 |
Subsequent
Default in the Year Ended December 31 | |||||||||||
Principal
deferrals: |
|||||||||||||||
Business
loans: |
|||||||||||||||
Commercial |
$ |
140 |
|
$ |
13 |
|
$ |
160 |
|
$ |
16 |
| |||
Commercial
mortgage: |
|||||||||||||||
Commercial Real Estate
business line (a) |
— |
|
— |
|
8 |
|
1 |
| |||||||
Other
business lines (b) |
5 |
|
1 |
|
6 |
|
1 |
| |||||||
Total commercial
mortgage |
5 |
|
1 |
|
14 |
|
2 |
| |||||||
International |
— |
|
— |
|
2 |
|
— |
| |||||||
Total
business loans |
145 |
|
14 |
|
176 |
|
18 |
| |||||||
Retail
loans: |
|||||||||||||||
Consumer: |
|||||||||||||||
Home
equity |
2 |
|
(c) |
— |
|
1 |
|
(c) |
— |
| |||||
Total
principal deferrals |
$ |
147 |
|
$ |
14 |
|
$ |
177 |
|
$ |
18 |
|
(a) |
Primarily
loans to real estate developers. |
(b) |
Primarily
loans secured by owner-occupied real
estate. |
(c) |
Includes
bankruptcy loans for which the court has discharged the borrower's
obligation and the borrower has not reaffirmed the
debt. |
(in
millions) |
|
| |||||
December 31 |
2016 |
2015 | |||||
Automotive
loans: |
|||||||
Production |
$ |
1,326 |
|
$ |
1,266 |
| |
Dealer |
7,123 |
|
6,573 |
| |||
Total
automotive loans |
$ |
8,449 |
|
$ |
7,839 |
| |
Total
automotive exposure: |
|||||||
Production |
$ |
2,534 |
|
$ |
2,452 |
| |
Dealer |
8,730 |
|
8,209 |
| |||
Total
automotive exposure |
$ |
11,264 |
|
$ |
10,661 |
|
(in
millions) |
|
| |||||
December 31 |
2016 |
2015 | |||||
Real
estate construction loans: |
|||||||
Commercial
Real Estate business line (a) |
$ |
2,485 |
|
$ |
1,681 |
| |
Other
business lines (b) |
384 |
|
320 |
| |||
Total
real estate construction loans |
2,869 |
|
2,001 |
| |||
Commercial
mortgage loans: |
|||||||
Commercial
Real Estate business line (a) |
2,018 |
|
2,104 |
| |||
Other
business lines (b) |
6,913 |
|
6,873 |
| |||
Total
commercial mortgage loans |
8,931 |
|
8,977 |
| |||
Total
commercial real estate loans |
$ |
11,800 |
|
$ |
10,978 |
| |
Total
unused commitments on commercial real estate loans |
$ |
3,046 |
|
$ |
3,063 |
|
(a) |
Primarily
loans to real estate developers. |
(b) |
Primarily
loans secured by owner-occupied real
estate. |
(in
millions) |
|
| |||||
December 31 |
2016 |
2015 | |||||
Land |
$ |
86 |
|
$ |
87 |
| |
Buildings
and improvements |
831 |
|
862 |
| |||
Furniture
and equipment |
499 |
|
490 |
| |||
Total
cost |
1,416 |
|
1,439 |
| |||
Less:
Accumulated depreciation and amortization |
(915 |
) |
(889 |
) | |||
Net
book value |
$ |
501 |
|
$ |
550 |
|
(in
millions) |
| ||
Years
Ending December 31 |
| ||
2017 |
$ |
72 |
|
2018 |
66 |
| |
2019 |
56 |
| |
2020 |
46 |
| |
2021 |
36 |
| |
Thereafter |
116 |
| |
Total |
$ |
392 |
|
(in
millions) |
|||||||||
December
31 |
2016 |
2015 |
2014 | ||||||
Business
Bank |
$ |
380 |
|
$ |
380 |
|
$ |
380 |
|
Retail
Bank |
194 |
|
194 |
|
194 |
| |||
Wealth
Management |
61 |
|
61 |
|
61 |
| |||
Total |
$ |
635 |
|
$ |
635 |
|
$ |
635 |
|
(in
millions) |
|
| |||||
December 31 |
2016 |
2015 | |||||
Gross
carrying amount |
$ |
34 |
|
$ |
34 |
| |
Accumulated
amortization |
(26 |
) |
(24 |
) | |||
Net
carrying amount |
$ |
8 |
|
$ |
10 |
|
(in
millions) |
|||
Years
Ending December 31 |
|||
2017 |
$ |
2 |
|
2018 |
2 |
| |
2019 |
2 |
| |
2020 |
1 |
| |
2021 |
1 |
| |
Total |
$ |
8 |
|
|
December 31,
2016 |
December 31,
2015 | |||||||||||||||||||||
|
|
Fair
Value |
|
Fair
Value | |||||||||||||||||||
(in
millions) |
Notional/
Contract
Amount (a) |
Gross
Derivative Assets |
Gross
Derivative Liabilities |
Notional/
Contract
Amount (a) |
Gross
Derivative Assets |
Gross
Derivative Liabilities | |||||||||||||||||
Risk
management purposes |
|||||||||||||||||||||||
Derivatives
designated as hedging instruments |
|||||||||||||||||||||||
Interest
rate contracts: |
|||||||||||||||||||||||
Swaps -
fair value -
receive fixed/pay floating |
$ |
2,275 |
|
$ |
92 |
|
$ |
4 |
|
$ |
2,525 |
|
$ |
147 |
|
$ |
— |
| |||||
Derivatives
used as economic hedges |
|||||||||||||||||||||||
Foreign
exchange contracts: |
|||||||||||||||||||||||
Spot,
forwards and swaps |
717 |
|
2 |
|
2 |
|
593 |
|
3 |
|
— |
| |||||||||||
Total
risk management purposes |
2,992 |
|
94 |
|
6 |
|
3,118 |
|
150 |
|
— |
| |||||||||||
Customer-initiated
and other activities |
|||||||||||||||||||||||
Interest
rate contracts: |
|||||||||||||||||||||||
Caps
and floors written |
436 |
|
— |
|
1 |
|
253 |
|
— |
|
— |
| |||||||||||
Caps
and floors purchased |
436 |
|
1 |
|
— |
|
253 |
|
— |
|
— |
| |||||||||||
Swaps |
12,451 |
|
130 |
|
76 |
|
11,722 |
|
139 |
|
92 |
| |||||||||||
Total
interest rate contracts |
13,323 |
|
131 |
|
77 |
|
12,228 |
|
139 |
|
92 |
| |||||||||||
Energy
contracts: |
|||||||||||||||||||||||
Caps
and floors written |
419 |
|
1 |
|
31 |
|
536 |
|
— |
|
85 |
| |||||||||||
Caps
and floors purchased |
419 |
|
31 |
|
1 |
|
536 |
|
85 |
|
— |
| |||||||||||
Swaps |
1,389 |
|
114 |
|
112 |
|
2,055 |
|
390 |
|
387 |
| |||||||||||
Total
energy contracts |
2,227 |
|
146 |
|
144 |
|
3,127 |
|
475 |
|
472 |
| |||||||||||
Foreign
exchange contracts: |
|||||||||||||||||||||||
Spot,
forwards, options and swaps |
1,509 |
|
36 |
|
27 |
|
2,291 |
|
54 |
|
46 |
| |||||||||||
Total
customer-initiated and other activities |
17,059 |
|
313 |
|
248 |
|
17,646 |
|
668 |
|
610 |
| |||||||||||
Total
gross derivatives |
$ |
20,051 |
|
407 |
|
254 |
|
$ |
20,764 |
|
818 |
|
610 |
| |||||||||
Amounts offset in the
consolidated balance sheets: |
|||||||||||||||||||||||
Netting adjustment -
Offsetting derivative assets/liabilities |
(84 |
) |
(84 |
) |
(127 |
) |
(127 |
) | |||||||||||||||
Netting adjustment - Cash
collateral received/posted |
(47 |
) |
(45 |
) |
(291 |
) |
(3 |
) | |||||||||||||||
Net derivatives included in
the consolidated balance sheets (b) |
|
276 |
|
125 |
|
|
|
|
400 |
|
480 |
| |||||||||||
Amounts not offset in the
consolidated balance sheets: |
|||||||||||||||||||||||
Marketable securities
received/pledged under bilateral collateral agreements |
(19 |
) |
(8 |
) |
(137 |
) |
(3 |
) | |||||||||||||||
Net derivatives after
deducting amounts not offset in the consolidated balance
sheets |
|
|
$ |
257 |
|
$ |
117 |
|
|
|
$ |
263 |
|
$ |
477 |
|
(a) |
Notional
or contractual amounts, which represent the extent of involvement in the
derivatives market, are used to determine the contractual cash flows
required in accordance with the terms of the agreement. These amounts are
typically not exchanged, significantly exceed amounts subject to credit or
market risk and are not reflected in the consolidated balance
sheets. |
(b) |
Net
derivative assets are included in “accrued income and other assets” and
net derivative liabilities are included in “accrued expenses and other
liabilities” on the consolidated balance sheets. Included in the fair
value of net derivative assets and net derivative liabilities are credit
valuation adjustments reflecting counterparty credit risk and credit risk
of the Corporation. The fair value of net derivative assets included
credit valuation adjustments for counterparty credit risk of $5
million
at both December 31,
2016
and 2015. |
|
Weighted
Average | ||||||||||
(dollar
amounts in millions) |
Notional
Amount |
Remaining
Maturity
(in years) |
Receive Rate |
Pay Rate (a) | |||||||
December 31,
2016 |
|||||||||||
Swaps
- fair value - receive fixed/pay floating rate |
|||||||||||
Medium-
and long-term debt designation |
$ |
2,275 |
|
4.5 |
3.69 |
% |
1.80 |
% | |||
December 31,
2015 |
|||||||||||
Swaps
- fair value - receive fixed/pay floating rate |
|||||||||||
Medium-
and long-term debt designation |
2,525 |
|
5.1 |
3.89 |
|
1.11 |
|
(a) |
Variable
rates paid on receive fixed swaps are based on six-month LIBOR rates in
effect at December 31,
2016
and 2015. |
(in
millions) |
|||||||||
Years
Ended December 31 |
Location
of Gain |
2016 |
2015 | ||||||
Interest
rate contracts |
Other
noninterest income |
$ |
25 |
|
$ |
16 |
| ||
Energy
contracts |
Other
noninterest income |
2 |
|
2 |
| ||||
Foreign
exchange contracts |
Foreign
exchange income |
41 |
|
37 |
| ||||
Total |
|
$ |
68 |
|
$ |
55 |
|
(in
millions) |
|||||||
December
31 |
2016 |
2015 | |||||
Unused
commitments to extend credit: |
|||||||
Commercial
and other |
$ |
24,333 |
|
$ |
26,115 |
| |
Bankcard,
revolving check credit and home equity loan commitments |
2,658 |
|
2,414 |
| |||
Total
unused commitments to extend credit |
$ |
26,991 |
|
$ |
28,529 |
| |
Standby
letters of credit |
$ |
3,623 |
|
$ |
3,985 |
| |
Commercial
letters of credit |
46 |
|
41 |
|
(dollar
amounts in millions) |
December 31,
2016 |
December 31,
2015 | |||||
Total
criticized standby and commercial letters of credit |
$ |
135 |
|
$ |
110 |
| |
As
a percentage of total outstanding standby and commercial letters of
credit |
3.7 |
% |
2.7 |
% |
(in
millions) |
|||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||
Other
noninterest income: |
|||||||||||
Amortization
of other tax credit investments |
$ |
(1 |
) |
$ |
1 |
|
$ |
(5 |
) | ||
Provision
for income taxes: |
|||||||||||
Amortization
of LIHTC Investments |
66 |
|
62 |
|
60 |
| |||||
Low
income housing tax credits |
(62 |
) |
(61 |
) |
(59 |
) | |||||
Other
tax benefits related to tax credit entities |
(26 |
) |
(22 |
) |
(28 |
) | |||||
Total
provision for income taxes |
$ |
(22 |
) |
$ |
(21 |
) |
$ |
(27 |
) |
(in
millions) |
| ||
Years
Ending December 31 |
| ||
2017 |
$ |
2,349 |
|
2018 |
276 |
| |
2019 |
106 |
| |
2020 |
52 |
| |
2021 |
25 |
| |
Thereafter |
17 |
| |
Total |
$ |
2,825 |
|
(in
millions) |
|
| |||||
December
31 |
2016 |
2015 | |||||
Three
months or less |
$ |
510 |
|
$ |
532 |
| |
Over
three months to six months |
322 |
|
385 |
| |||
Over
six months to twelve months |
449 |
|
659 |
| |||
Over
twelve months |
230 |
|
537 |
| |||
Total |
$ |
1,511 |
|
$ |
2,113 |
|
(dollar
amounts in millions) |
Federal Funds Purchased
and Securities Sold Under
Agreements to
Repurchase |
Other
Short-term
Borrowings | |||||
December 31,
2016 |
|||||||
Amount
outstanding at year-end |
$ |
25 |
|
$ |
— |
| |
Weighted
average interest rate at year-end |
0.54 |
% |
— |
% | |||
Maximum
month-end balance during the year |
$ |
25 |
|
$ |
— |
| |
Average
balance outstanding during the year |
15 |
|
123 |
| |||
Weighted
average interest rate during the year |
0.47 |
% |
0.45 |
% | |||
December 31,
2015 |
|||||||
Amount
outstanding at year-end |
$ |
23 |
|
$ |
— |
| |
Weighted
average interest rate at year-end |
0.38 |
% |
— |
% | |||
Maximum
month-end balance during the year |
$ |
109 |
|
$ |
— |
| |
Average
balance outstanding during the year |
93 |
|
— |
| |||
Weighted
average interest rate during the year |
0.05 |
% |
— |
% | |||
December 31,
2014 |
|||||||
Amount
outstanding at year-end |
$ |
116 |
|
$ |
— |
| |
Weighted
average interest rate at year-end |
0.04 |
% |
— |
% | |||
Maximum
month-end balance during the year |
$ |
238 |
|
$ |
— |
| |
Average
balance outstanding during the year |
200 |
|
— |
| |||
Weighted
average interest rate during the year |
0.04 |
% |
— |
% |
(in
millions) |
|||||||
December
31 |
2016 |
2015 | |||||
Parent
company |
|||||||
Subordinated
notes: |
|||||||
3.80%
subordinated notes due 2026 (a) |
$ |
256 |
|
$ |
259 |
| |
Medium-term
notes: |
|||||||
2.125%
notes due 2019 (a) |
348 |
|
349 |
| |||
Total
parent company |
604 |
|
608 |
| |||
Subsidiaries |
|||||||
Subordinated
notes: |
|||||||
5.75%
subordinated notes due 2016 (a) (b) |
— |
|
659 |
| |||
5.20%
subordinated notes due 2017 (a) |
511 |
|
530 |
| |||
4.00%
subordinated notes due 2025 (a) |
347 |
|
351 |
| |||
7.875%
subordinated notes due 2026 (a) |
215 |
|
223 |
| |||
Total
subordinated notes |
1,073 |
|
1,763 |
| |||
Medium-term
notes: |
|||||||
2.50%
notes due 2020 (a) |
667 |
|
671 |
| |||
Federal
Home Loan Bank (FHLB) advances: |
|||||||
Floating-rate
based on FHLB auction rate due 2026 |
2,800 |
|
— |
| |||
Other
notes: |
|||||||
6.0%
- 6.4% fixed-rate notes due 2018 to 2020 |
16 |
|
16 |
| |||
Total
subsidiaries |
4,556 |
|
2,450 |
| |||
Total
medium- and long-term debt |
$ |
5,160 |
|
$ |
3,058 |
|
(a) |
The
fixed interest rates on these notes have been swapped to a variable rate
and designated in a hedging relationship. Accordingly, carrying value has
been adjusted to reflect the change in the fair value of the debt as a
result of changes in the benchmark rate. |
(b) |
The
fixed interest rate on $250
million
of $650
million
total par value of these notes was swapped to a variable
rate. |
(in
millions) |
| ||
Years
Ending December 31 |
| ||
2017 |
$ |
500 |
|
2018 |
2 |
| |
2019 |
357 |
| |
2020 |
682 |
| |
2021 |
— |
| |
Thereafter |
3,550 |
| |
Total |
$ |
5,091 |
|
(in
millions) |
|||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||
Accumulated
net unrealized gains (losses) on investment securities: |
|||||||||||
Balance
at beginning of period, net of tax |
$ |
9 |
|
$ |
37 |
|
$ |
(68 |
) | ||
Net
unrealized holding (losses) gains arising during the
period |
(70 |
) |
(55 |
) |
166 |
| |||||
Less:
(Benefit) provision for income taxes |
(26 |
) |
(21 |
) |
60 |
| |||||
Net
unrealized holding (losses) gains arising during the period, net of
tax |
(44 |
) |
(34 |
) |
106 |
| |||||
Less: |
|||||||||||
Net
realized (losses) gains included in net securities (losses)
gains |
— |
|
(2 |
) |
1 |
| |||||
Less:
Benefit for income taxes |
— |
|
(1 |
) |
— |
| |||||
Reclassification adjustment
for net securities (losses) gains included in net income, net of
tax |
— |
|
(1 |
) |
1 |
| |||||
Less: |
|||||||||||
Net losses realized as a
yield adjustment in interest on investment securities |
(3 |
) |
(8 |
) |
— |
| |||||
Less: Benefit for income
taxes |
(1 |
) |
(3 |
) |
— |
| |||||
Reclassification adjustment
for net losses realized as a yield adjustment included in net income, net
of tax |
(2 |
) |
(5 |
) |
— |
| |||||
Change in net unrealized
(losses) gains on investment securities, net of tax |
(42 |
) |
(28 |
) |
105 |
| |||||
Balance
at end of period, net of tax |
$ |
(33 |
) |
$ |
9 |
|
$ |
37 |
| ||
Accumulated
defined benefit pension and other postretirement plans
adjustment: |
|||||||||||
Balance
at beginning of period, net of tax |
$ |
(438 |
) |
$ |
(449 |
) |
$ |
(323 |
) | ||
Actuarial loss arising
during the period |
(134 |
) |
(57 |
) |
(240 |
) | |||||
Prior service credit
arising during the period |
234 |
|
3 |
|
— |
| |||||
Net defined benefit pension
and other postretirement adjustment arising during the
period |
100 |
|
(54 |
) |
(240 |
) | |||||
Less: Provision (benefit)
for income taxes |
37 |
|
(19 |
) |
(87 |
) | |||||
Net defined benefit pension
and other postretirement adjustment arising during the period, net of
tax |
63 |
|
(35 |
) |
(153 |
) | |||||
Amounts recognized in
salaries and benefits expense: |
|||||||||||
Amortization of actuarial
net loss |
46 |
|
70 |
|
39 |
| |||||
Amortization of prior
service (credit) cost |
(7 |
) |
1 |
|
3 |
| |||||
Total
amounts recognized in salaries and benefits expense |
39 |
|
71 |
|
42 |
| |||||
Less: Provision for income
taxes |
14 |
|
25 |
|
15 |
| |||||
Adjustment for amounts
recognized as components of net periodic benefit cost during the period,
net of tax |
25 |
|
46 |
|
27 |
| |||||
Change in defined benefit
pension and other postretirement plans adjustment, net of
tax |
88 |
|
11 |
|
(126 |
) | |||||
Balance
at end of period, net of tax |
$ |
(350 |
) |
$ |
(438 |
) |
$ |
(449 |
) | ||
Total
accumulated other comprehensive loss at end of period, net of
tax |
$ |
(383 |
) |
$ |
(429 |
) |
$ |
(412 |
) |
(in
millions, except per share data) |
|||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||
Basic
and diluted |
|||||||||||
Net
income |
$ |
477 |
|
$ |
521 |
|
$ |
593 |
| ||
Less
income allocated to participating securities |
4 |
|
6 |
|
7 |
| |||||
Net
income attributable to common shares |
$ |
473 |
|
$ |
515 |
|
$ |
586 |
| ||
Basic
average common shares |
172 |
|
176 |
|
179 |
| |||||
Basic
net income per common share |
$ |
2.74 |
|
$ |
2.93 |
|
$ |
3.28 |
| ||
Basic
average common shares |
172 |
|
176 |
|
179 |
| |||||
Dilutive
common stock equivalents: |
|||||||||||
Net
effect of the assumed exercise of stock options |
2 |
|
2 |
|
2 |
| |||||
Net
effect of the assumed exercise of warrants |
3 |
|
3 |
|
4 |
| |||||
Diluted
average common shares |
177 |
|
181 |
|
185 |
| |||||
Diluted
net income per common share |
$ |
2.68 |
|
$ |
2.84 |
|
$ |
3.16 |
|
(shares
in millions) |
|||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||
Average
outstanding options |
3.3 |
5.1 |
7.2 | ||
Range
of exercise prices |
$37.26
- $59.86 |
$46.68
- $60.82 |
$47.24
- $61.94 |
(in
millions) |
|||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||
Total
share-based compensation expense |
$ |
34 |
|
$ |
38 |
|
$ |
38 |
| ||
Related
tax benefits recognized in net income |
$ |
13 |
|
$ |
14 |
|
$ |
14 |
|
(dollar
amounts in millions) |
December 31,
2016 | ||
Total
unrecognized share-based compensation expense |
$ |
43 |
|
Weighted-average
expected recognition period (in years) |
2.9 |
|
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||
Weighted-average
grant-date fair value per option |
$ |
9.94 |
|
$ |
11.31 |
|
$ |
13.21 |
| ||
Weighted-average
assumptions: |
|||||||||||
Risk-free interest
rates |
2.01 |
% |
1.83 |
% |
2.95 |
% | |||||
Expected dividend
yield |
3.00 |
|
3.00 |
|
3.00 |
| |||||
Expected
volatility factors of the market price of
Comerica
common stock |
38 |
|
33 |
|
31 |
| |||||
Expected
option life (in years) |
6.9 |
|
6.9 |
|
5.8 |
|
|
|
Weighted-Average |
| ||||||||||
|
Number
of
Options
(in thousands) |
Exercise Price
per Share |
Remaining
Contractual
Term
(in years) |
Aggregate
Intrinsic Value
(in millions) | |||||||||
Outstanding-January
1, 2016 |
11,792 |
|
$ |
42.92 |
|
||||||||
Granted |
1,137 |
|
32.97 |
|
|||||||||
Forfeited
or expired |
(2,121 |
) |
54.74 |
|
|||||||||
Exercised |
(3,916 |
) |
43.63 |
|
|||||||||
Outstanding-December
31, 2016 |
6,892 |
|
37.24 |
|
5.4 |
|
$ |
213 |
| ||||
Outstanding, net of
expected forfeitures-December 31, 2016 |
6,472 |
|
37.31 |
|
5.3 |
|
199 |
| |||||
Exercisable-December
31, 2016 |
4,490 |
|
36.66 |
|
4.0 |
|
141 |
|
Number of
Shares
(in thousands) |
Weighted-Average
Grant-Date
Fair
Value per Share | |||||
Outstanding-January
1, 2016 |
1,910 |
|
$ |
37.41 |
| |
Granted |
574 |
|
33.41 |
| ||
Forfeited |
(267 |
) |
36.99 |
| ||
Vested |
(626 |
) |
34.45 |
| ||
Outstanding-December
31, 2016 |
1,591 |
|
$ |
37.20 |
|
Service-Based
Units |
Performance-Based
Units | ||||||||||||
Number of
Units
(in thousands) |
Weighted-Average
Grant-Date
Fair
Value per Share |
Number of
Units
(in thousands) |
Weighted-Average
Grant-Date
Fair
Value per Share | ||||||||||
Outstanding-January
1, 2016 |
413 |
|
$ |
34.77 |
|
510 |
|
$ |
44.89 |
| |||
Granted |
19 |
|
44.90 |
|
362 |
|
32.85 |
| |||||
Converted |
34 |
|
33.79 |
|
(34 |
) |
33.79 |
| |||||
Forfeited |
(12 |
) |
26.69 |
|
(46 |
) |
40.19 |
| |||||
Vested |
(285 |
) |
33.18 |
|
— |
|
— |
| |||||
Outstanding-December
31, 2016 |
169 |
|
38.97 |
|
792 |
|
40.14 |
|
Defined
Benefit Pension Plans |
|||||||||||||||||||||||||
Qualified |
Non-Qualified |
Postretirement
Benefit Plan | |||||||||||||||||||||||
(dollar
amounts in millions) |
2016 |
2015 |
2016 |
2015 |
2016 |
2015 | |||||||||||||||||||
Change
in fair value of plan assets: |
|||||||||||||||||||||||||
Fair
value of plan assets at January 1 |
$ |
2,346 |
|
$ |
2,541 |
|
$ |
— |
|
$ |
— |
|
$ |
61 |
|
$ |
67 |
| |||||||
Actual
return on plan assets |
200 |
|
(73 |
) |
— |
|
— |
|
2 |
|
— |
| |||||||||||||
Employer
contributions |
— |
|
— |
|
— |
|
— |
|
4 |
|
— |
| |||||||||||||
Benefits
paid |
(93 |
) |
(122 |
) |
(a) |
— |
|
— |
|
(5 |
) |
(6 |
) | ||||||||||||
Fair
value of plan assets at December 31 |
$ |
2,453 |
|
$ |
2,346 |
|
$ |
— |
|
$ |
— |
|
$ |
62 |
|
$ |
61 |
| |||||||
Change
in projected benefit obligation: |
|||||||||||||||||||||||||
Projected
benefit obligation at January 1 |
$ |
1,916 |
|
$ |
2,070 |
|
$ |
222 |
|
$ |
235 |
|
$ |
59 |
|
$ |
73 |
| |||||||
Service
cost |
31 |
|
35 |
|
3 |
|
4 |
|
— |
|
— |
| |||||||||||||
Interest
cost |
87 |
|
88 |
|
10 |
|
10 |
|
3 |
|
3 |
| |||||||||||||
Actuarial
loss (gain) |
161 |
|
(155 |
) |
11 |
|
(16 |
) |
(2 |
) |
(8 |
) | |||||||||||||
Benefits
paid |
(93 |
) |
(122 |
) |
(a) |
(11 |
) |
(11 |
) |
(5 |
) |
(6 |
) | ||||||||||||
Plan
change |
(200 |
) |
— |
|
(34 |
) |
— |
|
— |
|
(3 |
) | |||||||||||||
Projected
benefit obligation at December 31 |
$ |
1,902 |
|
$ |
1,916 |
|
$ |
201 |
|
$ |
222 |
|
$ |
55 |
|
$ |
59 |
| |||||||
Accumulated
benefit obligation |
$ |
1,894 |
|
$ |
1,756 |
|
$ |
198 |
|
$ |
191 |
|
$ |
55 |
|
$ |
59 |
| |||||||
Funded
status at December 31 (b) (c) |
$ |
551 |
|
$ |
430 |
|
$ |
(201 |
) |
$ |
(222 |
) |
$ |
7 |
|
$ |
2 |
| |||||||
Weighted-average
assumptions used: |
|||||||||||||||||||||||||
Discount
rate |
4.23 |
% |
4.82 |
% |
4.23 |
% |
4.82 |
% |
3.92 |
% |
4.53 |
% | |||||||||||||
Rate
of compensation increase |
3.50 |
|
3.75 |
|
3.50 |
|
3.75 |
|
n/a |
|
n/a |
| |||||||||||||
Healthcare
cost trend rate: |
|||||||||||||||||||||||||
Cost
trend rate assumed for next year |
n/a |
|
n/a |
|
n/a |
|
n/a |
|
6.50 |
|
7.00 |
| |||||||||||||
Rate to which the cost
trend rate is assumed to decline (the ultimate trend rate) |
n/a |
|
n/a |
|
n/a |
|
n/a |
|
5.00 |
|
5.00 |
| |||||||||||||
Year when rate reaches the
ultimate trend rate |
n/a |
|
n/a |
|
n/a |
|
n/a |
|
2027 |
|
2027 |
| |||||||||||||
Amounts recognized in
accumulated other comprehensive income (loss) before income
taxes: |
|||||||||||||||||||||||||
Net
actuarial loss |
$ |
(673 |
) |
$ |
(586 |
) |
$ |
(82 |
) |
$ |
(78 |
) |
$ |
(20 |
) |
$ |
(22 |
) | |||||||
Prior
service credit (cost) |
178 |
|
(21 |
) |
50 |
|
21 |
|
1 |
|
1 |
| |||||||||||||
Balance
at December 31 |
$ |
(495 |
) |
$ |
(607 |
) |
$ |
(32 |
) |
$ |
(57 |
) |
$ |
(19 |
) |
$ |
(21 |
) |
(a) |
Included
$56
million
in benefit payments made to certain terminated vested eligible
participants who elected to receive lump-sum settlements in
2015. |
(b) |
Based on
projected benefit obligation for defined benefit pension plans and
accumulated benefit obligation for postretirement benefit
plan. |
(c) |
The
Corporation recognizes the overfunded and underfunded status of the plans
in “accrued income and other assets” and “accrued expenses and other
liabilities,” respectively, on the consolidated balance
sheets. |
Defined
Benefit Pension Plans |
| ||||||||||||||
(in
millions) |
Qualified |
Non-Qualified |
Postretirement
Benefit Plan |
Total | |||||||||||
Actuarial
(loss) gain arising during the period |
$ |
(124 |
) |
$ |
(11 |
) |
$ |
1 |
|
$ |
(134 |
) | |||
Prior
service credit arising during the period |
200 |
|
34 |
|
— |
|
234 |
| |||||||
Amortization
of net actuarial loss |
38 |
|
7 |
|
1 |
|
46 |
| |||||||
Amortization
of prior service credit |
(2 |
) |
(5 |
) |
— |
|
(7 |
) | |||||||
Total
recognized in other comprehensive income |
$ |
112 |
|
$ |
25 |
|
$ |
2 |
|
$ |
139 |
|
|
Defined
Benefit Pension Plans | ||||||||||||||||||||||
(dollar
amounts in millions) |
Qualified |
Non-Qualified | |||||||||||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 |
2016 |
2015 |
2014 | |||||||||||||||||
Service
cost |
$ |
31 |
|
$ |
35 |
|
$ |
29 |
|
$ |
3 |
|
$ |
4 |
|
$ |
3 |
| |||||
Interest
cost |
87 |
|
88 |
|
88 |
|
10 |
|
10 |
|
10 |
| |||||||||||
Expected
return on plan assets |
(163 |
) |
(159 |
) |
(131 |
) |
— |
|
— |
|
— |
| |||||||||||
Amortization
of prior service (credit) cost |
(2 |
) |
4 |
|
6 |
|
(5 |
) |
(4 |
) |
(4 |
) | |||||||||||
Amortization
of net loss |
38 |
|
59 |
|
31 |
|
7 |
|
10 |
|
7 |
| |||||||||||
Net
periodic defined benefit (credit) cost |
$ |
(9 |
) |
$ |
27 |
|
$ |
23 |
|
$ |
15 |
|
$ |
20 |
|
$ |
16 |
| |||||
Actual
return on plan assets |
$ |
200 |
|
$ |
(73 |
) |
$ |
278 |
|
n/a |
|
n/a |
|
n/a |
| ||||||||
Actual
rate of return on plan assets |
8.66 |
% |
(2.95 |
)% |
13.88 |
% |
n/a |
|
n/a |
|
n/a |
| |||||||||||
Weighted-average
assumptions used: |
|||||||||||||||||||||||
Discount
rate |
4.53 |
% |
4.28 |
% |
5.17 |
% |
4.53 |
% |
4.28 |
% |
5.17 |
% | |||||||||||
Expected
long-term return on plan assets |
6.75 |
|
6.75 |
|
6.75 |
|
n/a |
|
n/a |
|
n/a |
| |||||||||||
Rate
of compensation increase |
3.75 |
|
3.75 |
|
4.00 |
|
3.75 |
|
3.75 |
|
4.00 |
|
(dollar
amounts in millions) |
Postretirement Benefit Plan | ||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||
Interest
cost |
$ |
3 |
|
$ |
3 |
|
$ |
3 |
| ||
Expected
return on plan assets |
(4 |
) |
(4 |
) |
(4 |
) | |||||
Amortization
of prior service cost |
— |
|
1 |
|
1 |
| |||||
Amortization
of net loss |
1 |
|
1 |
|
1 |
| |||||
Net
periodic postretirement benefit cost |
$ |
— |
|
$ |
1 |
|
$ |
1 |
| ||
Actual
return on plan assets |
$ |
2 |
|
$ |
— |
|
$ |
3 |
| ||
Actual
rate of return on plan assets |
2.83 |
% |
(0.53 |
)% |
4.62 |
% | |||||
Weighted-average
assumptions used: |
|||||||||||
Discount
rate |
4.53 |
% |
3.99 |
% |
4.59 |
% | |||||
Expected
long-term return on plan assets |
5.00 |
|
5.00 |
|
5.00 |
| |||||
Healthcare
cost trend rate: |
|||||||||||
Cost
trend rate assumed |
7.00 |
|
7.00 |
|
7.50 |
| |||||
Rate
to which the cost trend rate is assumed to decline (the ultimate trend
rate) |
5.00 |
|
5.00 |
|
5.00 |
| |||||
Year
that the rate reaches the ultimate trend rate |
2027 |
|
2026 |
|
2033 |
|
|
Defined Benefit Pension Plans |
||||||||||||||
(in
millions) |
Qualified |
Non-Qualified |
Postretirement
Benefit
Plan |
Total | |||||||||||
Net
loss |
$ |
43 |
|
$ |
8 |
|
$ |
1 |
|
$ |
52 |
| |||
Prior
service credit |
(19 |
) |
(8 |
) |
— |
|
(27 |
) |
One-Percentage-Point | |||||||
(in
millions) |
Increase |
Decrease | |||||
Effect
on postretirement benefit obligation |
$ |
3 |
|
$ |
(3 |
) | |
Effect
on total service and interest cost |
— |
|
— |
|
(in
millions) |
Total |
Level 1 |
Level 2 |
Level 3 | |||||||||||
December 31,
2016 |
|||||||||||||||
Cash
equivalent securities: |
|||||||||||||||
Commercial
paper |
$ |
2 |
|
$ |
— |
|
$ |
2 |
|
$ |
— |
| |||
Common
stock |
850 |
|
850 |
|
— |
|
— |
| |||||||
Fixed
income securities: |
|||||||||||||||
U.S.
Treasury and other U.S. government agency securities |
377 |
|
377 |
|
— |
|
— |
| |||||||
Corporate
and municipal bonds and notes |
709 |
|
— |
|
709 |
|
— |
| |||||||
Collateralized
mortgage obligations |
15 |
|
— |
|
15 |
|
— |
| |||||||
U.S.
government agency mortgage-backed securities |
8 |
|
— |
|
8 |
|
— |
| |||||||
Private
placements |
71 |
|
— |
|
— |
|
71 |
| |||||||
Total
investments in the fair value hierarchy |
2,032 |
|
|
1,227 |
|
|
734 |
|
|
71 |
| ||||
Investments
measured at net asset value: |
|||||||||||||||
Collective
investment funds |
416 |
|
|
|
|
|
|
| |||||||
Total
investments at fair value |
$ |
2,448 |
|
|
|
|
|
|
| ||||||
December 31,
2015 |
|||||||||||||||
Cash
equivalent securities: |
|||||||||||||||
Mutual
funds |
$ |
43 |
|
$ |
43 |
|
$ |
— |
|
$ |
— |
| |||
Equity
securities: |
|||||||||||||||
Mutual
funds |
69 |
|
69 |
|
— |
|
— |
| |||||||
Common
stock |
480 |
|
478 |
|
2 |
|
— |
| |||||||
Fixed
income securities: |
|||||||||||||||
U.S.
Treasury and other U.S. government agency securities |
368 |
|
368 |
|
— |
|
— |
| |||||||
Corporate
and municipal bonds and notes |
729 |
|
— |
|
729 |
|
— |
| |||||||
Collateralized
mortgage obligations |
18 |
|
— |
|
18 |
|
— |
| |||||||
U.S.
government agency mortgage-backed securities |
8 |
|
— |
|
8 |
|
— |
| |||||||
Private
placements |
105 |
|
— |
|
— |
|
105 |
| |||||||
Total
investments in the fair value hierarchy |
1,820 |
|
958 |
|
757 |
|
105 |
| |||||||
Investments
measured at net asset value: |
|||||||||||||||
Collective
investment funds |
527 |
|
|||||||||||||
Total
investments at fair value |
$ |
2,347 |
|
Balance at
Beginning
of
Period |
Balance at
End of Period | ||||||||||||||||||||||
Net
Gains (Losses) |
|||||||||||||||||||||||
(in
millions) |
Realized |
Unrealized |
Purchases |
Sales |
|||||||||||||||||||
Year
Ended December 31, 2016 |
|||||||||||||||||||||||
Private
placements |
$ |
105 |
|
$ |
1 |
|
$ |
3 |
|
$ |
64 |
|
$ |
(102 |
) |
$ |
71 |
| |||||
Year
Ended December 31, 2015 |
|||||||||||||||||||||||
Private
placements |
$ |
73 |
|
$ |
— |
|
$ |
(5 |
) |
$ |
108 |
|
$ |
(71 |
) |
$ |
105 |
|
Estimated
Future Benefit Payments | |||||||||||
(in
millions)
Years
Ended December 31 |
Qualified
Defined Benefit
Pension
Plan |
Non-Qualified
Defined Benefit
Pension
Plan |
Postretirement
Benefit Plan (a) | ||||||||
2017 |
$ |
120 |
|
$ |
11 |
|
$ |
6 |
| ||
2018 |
119 |
|
12 |
|
6 |
| |||||
2019 |
124 |
|
12 |
|
6 |
| |||||
2020 |
126 |
|
13 |
|
5 |
| |||||
2021 |
129 |
|
13 |
|
5 |
| |||||
2022
- 2026 |
657 |
|
65 |
|
21 |
|
(a) |
Estimated
benefit payments in the postretirement benefit plan are net of estimated
Medicare subsidies. |
(in
millions) |
|
|
| ||||||||
December
31 |
2016 |
2015 |
2014 | ||||||||
Current: |
|||||||||||
Federal |
$ |
224 |
|
$ |
275 |
|
$ |
127 |
| ||
Foreign |
5 |
|
5 |
|
6 |
| |||||
State
and local |
15 |
|
20 |
|
14 |
| |||||
Total
current |
244 |
|
300 |
|
147 |
| |||||
Deferred: |
|||||||||||
Federal |
(49 |
) |
(68 |
) |
123 |
| |||||
State
and local |
(2 |
) |
(3 |
) |
7 |
| |||||
Total
deferred |
(51 |
) |
(71 |
) |
130 |
| |||||
Total |
$ |
193 |
|
$ |
229 |
|
$ |
277 |
|
(dollar
amounts in millions) |
2016 |
2015 |
2014 | |||||||||||||||||
Years
Ended December 31 |
Amount |
Rate |
Amount |
Rate |
Amount |
Rate | ||||||||||||||
Tax
based on federal statutory rate |
$ |
235 |
|
35.0 |
% |
$ |
262 |
|
35.0 |
% |
$ |
305 |
|
35.0 |
% | |||||
State
income taxes |
8 |
|
1.2 |
|
10 |
|
1.3 |
|
13 |
|
1.5 |
| ||||||||
Affordable
housing and historic credits |
(22 |
) |
(3.3 |
) |
(22 |
) |
(2.9 |
) |
(24 |
) |
(2.8 |
) | ||||||||
Bank-owned
life insurance |
(15 |
) |
(2.3 |
) |
(15 |
) |
(2.0 |
) |
(15 |
) |
(1.7 |
) | ||||||||
Other
changes in unrecognized tax benefits |
— |
|
— |
|
— |
|
— |
|
2 |
|
0.2 |
| ||||||||
Lease
termination transactions |
(15 |
) |
(2.2 |
) |
(5 |
) |
(0.7 |
) |
— |
|
— |
| ||||||||
Tax-related
interest and penalties |
3 |
|
0.5 |
|
1 |
|
0.1 |
|
(3 |
) |
(0.3 |
) | ||||||||
Other |
(1 |
) |
(0.1 |
) |
(2 |
) |
(0.3 |
) |
(1 |
) |
(0.1 |
) | ||||||||
Provision
for income taxes |
$ |
193 |
|
28.8 |
% |
$ |
229 |
|
30.5 |
% |
$ |
277 |
|
31.8 |
% |
(in
millions) |
2016 |
2015 |
2014 | ||||||||
Balance
at January 1 |
$ |
22 |
|
$ |
14 |
|
$ |
11 |
| ||
Increases
as a result of tax positions taken during a prior period |
— |
|
8 |
|
3 |
| |||||
Decrease
related to settlements with tax authorities |
(7 |
) |
— |
|
— |
| |||||
Balance
at December 31 |
$ |
15 |
|
$ |
22 |
|
$ |
14 |
|
Jurisdiction |
Tax
Years |
Federal |
2013-2015 |
California |
2004-2015 |
(in
millions) |
|
| |||||
December
31 |
2016 |
2015 | |||||
Deferred
tax assets: |
|||||||
Allowance
for loan losses |
$ |
256 |
|
$ |
223 |
| |
Deferred
compensation |
91 |
|
113 |
| |||
Deferred
loan origination fees and costs |
20 |
|
24 |
| |||
Net
unrealized losses on investment securities
available-for-sale |
20 |
|
— |
| |||
Other
temporary differences, net |
76 |
|
69 |
| |||
Total
deferred tax asset before valuation allowance |
463 |
|
429 |
| |||
Valuation
allowance |
(3 |
) |
(3 |
) | |||
Total
deferred tax assets |
460 |
|
426 |
| |||
Deferred
tax liabilities: |
|||||||
Lease
financing transactions |
(150 |
) |
(183 |
) | |||
Defined
benefit plans |
(82 |
) |
(32 |
) | |||
Net
unrealized gains on investment securities
available-for-sale |
— |
|
(5 |
) | |||
Allowance
for depreciation |
(11 |
) |
(7 |
) | |||
Total
deferred tax liabilities |
(243 |
) |
(227 |
) | |||
Net
deferred tax asset |
$ |
217 |
|
$ |
199 |
|
(dollar
amounts in millions) |
Comerica
Incorporated
(Consolidated) |
Comerica
Bank | |||||
December 31,
2016 |
|||||||
CET1
capital (minimum $3.1 billion (Consolidated)) |
$ |
7,540 |
|
$ |
7,120 |
| |
Tier
1 capital (minimum-$4.1 billion (Consolidated)) |
7,540 |
|
7,120 |
| |||
Total
capital (minimum-$5.4 billion (Consolidated)) |
9,018 |
|
8,397 |
| |||
Risk-weighted
assets |
67,966 |
|
67,739 |
| |||
Average
assets (fourth quarter) |
74,086 |
|
73,804 |
| |||
CET1
capital to risk-weighted assets (minimum-4.5%) |
11.09 |
% |
10.51 |
% | |||
Tier
1 capital to risk-weighted assets (minimum-6.0%) |
11.09 |
|
10.51 |
| |||
Total
capital to risk-weighted assets (minimum-8.0%) |
13.27 |
|
12.40 |
| |||
Tier
1 capital to average assets (minimum-4.0%) |
10.18 |
|
9.65 |
| |||
Capital
conservation buffer |
5.09 |
|
4.40 |
| |||
December 31,
2015 |
|||||||
CET1
capital (minimum $3.1 billion (Consolidated)) |
$ |
7,350 |
|
$ |
7,081 |
| |
Tier
1 capital (minimum-$4.2 billion (Consolidated)) |
7,350 |
|
7,081 |
| |||
Total
capital (minimum-$5.6 billion (Consolidated)) |
8,852 |
|
8,366 |
| |||
Risk-weighted
assets |
69,731 |
|
69,438 |
| |||
Average
assets (fourth quarter) |
71,943 |
|
71,629 |
| |||
CET1
capital to risk-weighted assets (minimum-4.5%) |
10.54 |
% |
10.20 |
% | |||
Tier
1 capital to risk-weighted assets (minimum-6.0%) |
10.54 |
% |
10.20 |
% | |||
Total
capital to risk-weighted assets (minimum-8.0%) |
12.69 |
|
12.05 |
| |||
Tier
1 capital to average assets (minimum-4.0%) |
10.22 |
|
9.89 |
|
• |
Employee
costs:
Primarily severance costs in accordance with the Corporation’s severance
plan. |
• |
Facilities
costs: Costs
pertaining to consolidating banking centers and other facilities, such as
lease termination costs and decommissioning costs. Also includes
accelerated depreciation and impairment of owned property to be
sold. |
• |
Technology
costs:
Impairment and other costs associated with optimizing technology
infrastructure and reducing the number of
applications. |
• |
Other
costs:
Includes primarily professional fees, as well as other contract
termination fees and legal fees incurred in the execution of the
initiative. |
(in
millions) |
Employee
Costs |
Facilities
Costs |
Technology
Costs |
Other
Costs |
Total | ||||||||||||||
Year
Ended December 31, 2016 |
|||||||||||||||||||
Balance at beginning of
period |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
| ||||
Restructuring
charges |
52 |
|
15 |
|
— |
|
26 |
|
93 |
| |||||||||
Payments |
(44 |
) |
(6 |
) |
— |
|
(22 |
) |
(72 |
) | |||||||||
Adjustments for non-cash
charges (a) |
2 |
|
(5 |
) |
— |
|
— |
|
(3 |
) | |||||||||
Balance at end of
period |
$ |
10 |
|
$ |
4 |
|
$ |
— |
|
$ |
4 |
|
$ |
18 |
| ||||
Total restructuring charges
incurred to date |
$ |
52 |
|
$ |
15 |
|
$ |
— |
|
$ |
26 |
|
$ |
93 |
| ||||
Total expected restructuring
charges (b) |
55 |
|
35 |
|
$15
- $35 |
|
35 |
|
$140
- $160 |
|
(a) |
Adjustments
for non-cash charges include the benefit from forfeitures of nonvested
stock compensation in Employee Costs and accelerated depreciation expense
in Facilities Costs. |
(b) |
Restructuring
activities are expected to be substantially completed by 12/31/2018. |
(dollar
amounts in millions) |
Business
Bank |
Retail
Bank |
Wealth
Management |
Finance |
Other |
Total | |||||||||||||||||
Year
Ended December 31, 2016 | |||||||||||||||||||||||
Earnings
summary: |
|||||||||||||||||||||||
Net
interest income (expense) |
$ |
1,418 |
|
$ |
622 |
|
$ |
169 |
|
$ |
(435 |
) |
$ |
23 |
|
$ |
1,797 |
| |||||
Provision
for credit losses |
217 |
|
35 |
|
(4 |
) |
— |
|
— |
|
248 |
| |||||||||||
Noninterest
income |
572 |
|
189 |
|
243 |
|
43 |
|
4 |
|
1,051 |
| |||||||||||
Noninterest
expenses |
839 |
|
767 |
|
301 |
|
(4 |
) |
27 |
|
1,930 |
| |||||||||||
Provision
(benefit) for income taxes |
296 |
|
2 |
|
39 |
|
(144 |
) |
— |
|
193 |
| |||||||||||
Net
income (loss) |
$ |
638 |
|
$ |
7 |
|
$ |
76 |
|
$ |
(244 |
) |
$ |
— |
|
$ |
477 |
| |||||
Net
credit-related charge-offs |
$ |
145 |
|
$ |
12 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
157 |
| |||||
Selected
average balances: |
|||||||||||||||||||||||
Assets |
$ |
39,497 |
|
$ |
6,551 |
|
$ |
5,232 |
|
$ |
13,993 |
|
$ |
6,470 |
|
$ |
71,743 |
| |||||
Loans |
38,067 |
|
5,881 |
|
5,048 |
|
— |
|
— |
|
48,996 |
| |||||||||||
Deposits |
29,704 |
|
23,558 |
|
4,126 |
|
88 |
|
265 |
|
57,741 |
| |||||||||||
Statistical
data: |
|||||||||||||||||||||||
Return
on average assets (a) |
1.62 |
% |
0.03 |
% |
1.45 |
% |
N/M |
|
N/M |
|
0.67 |
% | |||||||||||
Efficiency
ratio (b) |
42.09 |
|
93.90 |
|
72.98 |
|
N/M |
|
N/M |
|
67.53 |
|
(dollar
amounts in millions) |
Business
Bank |
Retail
Bank |
Wealth
Management |
Finance |
Other |
Total | |||||||||||||||||
Year
Ended December 31, 2015 | |||||||||||||||||||||||
Earnings
summary: |
|||||||||||||||||||||||
Net
interest income (expense) |
$ |
1,498 |
|
$ |
626 |
|
$ |
179 |
|
$ |
(629 |
) |
$ |
15 |
|
$ |
1,689 |
| |||||
Provision
for credit losses |
158 |
|
8 |
|
(20 |
) |
— |
|
1 |
|
147 |
| |||||||||||
Noninterest
income |
571 |
|
185 |
|
235 |
|
44 |
|
— |
|
1,035 |
| |||||||||||
Noninterest
expenses |
778 |
|
734 |
|
305 |
|
(4 |
) |
14 |
|
1,827 |
| |||||||||||
Provision
(benefit) for income taxes |
371 |
|
22 |
|
44 |
|
(208 |
) |
— |
|
229 |
| |||||||||||
Net
income (loss) |
$ |
762 |
|
$ |
47 |
|
$ |
85 |
|
$ |
(373 |
) |
$ |
— |
|
$ |
521 |
| |||||
Net
credit-related charge-offs (recoveries) |
$ |
89 |
|
$ |
29 |
|
$ |
(17 |
) |
$ |
— |
|
$ |
— |
|
$ |
101 |
| |||||
Selected
average balances: |
|||||||||||||||||||||||
Assets |
$ |
39,501 |
|
$ |
6,474 |
|
$ |
5,153 |
|
$ |
11,764 |
|
$ |
7,355 |
|
$ |
70,247 |
| |||||
Loans |
37,883 |
|
5,792 |
|
4,953 |
|
— |
|
— |
|
48,628 |
| |||||||||||
Deposits |
30,894 |
|
22,876 |
|
4,151 |
|
138 |
|
267 |
|
58,326 |
| |||||||||||
Statistical
data: |
|||||||||||||||||||||||
Return
on average assets (a) |
1.93 |
% |
0.20 |
% |
1.65 |
% |
N/M |
|
N/M |
|
0.74 |
% | |||||||||||
Efficiency
ratio (b) |
37.58 |
|
90.37 |
|
73.26 |
|
N/M |
|
N/M |
|
66.93 |
|
(dollar
amounts in millions) |
Business
Bank |
Retail
Bank |
Wealth
Management |
Finance |
Other |
Total | |||||||||||||||||
Year
Ended December 31, 2014 | |||||||||||||||||||||||
Earnings
summary: |
|||||||||||||||||||||||
Net
interest income (expense) |
$ |
1,497 |
|
$ |
606 |
|
$ |
181 |
|
$ |
(662 |
) |
$ |
33 |
|
$ |
1,655 |
| |||||
Provision
for credit losses |
56 |
|
(7 |
) |
(21 |
) |
— |
|
(1 |
) |
27 |
| |||||||||||
Noninterest
income |
392 |
|
169 |
|
241 |
|
45 |
|
10 |
|
857 |
| |||||||||||
Noninterest
expenses |
582 |
|
715 |
|
310 |
|
(32 |
) |
40 |
|
1,615 |
| |||||||||||
Provision
(benefit) for income taxes |
429 |
|
23 |
|
49 |
|
(226 |
) |
2 |
|
277 |
| |||||||||||
Net
income (loss) |
$ |
822 |
|
$ |
44 |
|
$ |
84 |
|
$ |
(359 |
) |
$ |
2 |
|
$ |
593 |
| |||||
Net
credit-related charge-offs (recoveries) |
$ |
16 |
|
$ |
10 |
|
$ |
(1 |
) |
$ |
— |
|
$ |
— |
|
$ |
25 |
| |||||
Selected
average balances: |
|||||||||||||||||||||||
Assets |
$ |
37,428 |
|
$ |
6,255 |
|
$ |
4,988 |
|
$ |
11,268 |
|
$ |
6,397 |
|
$ |
66,336 |
| |||||
Loans |
36,198 |
|
5,585 |
|
4,805 |
|
— |
|
— |
|
46,588 |
| |||||||||||
Deposits |
28,543 |
|
21,967 |
|
3,805 |
|
215 |
|
254 |
|
54,784 |
| |||||||||||
Statistical
data: |
|||||||||||||||||||||||
Return
on average assets (a) |
2.20 |
% |
0.19 |
% |
1.69 |
% |
N/M |
|
N/M |
|
0.89 |
% | |||||||||||
Efficiency
ratio (b) |
30.74 |
|
92.10 |
|
73.76 |
|
N/M |
|
N/M |
|
64.16 |
|
(a) |
Return
on average assets is calculated based on the greater of average assets or
average liabilities and attributed
equity. |
(dollar
amounts in millions) |
Michigan |
California |
Texas |
Other
Markets |
Finance
& Other |
Total | |||||||||||||||||
Year
Ended December 31, 2016 | |||||||||||||||||||||||
Earnings
summary: |
|||||||||||||||||||||||
Net interest income
(expense) |
$ |
672 |
|
$ |
715 |
|
$ |
471 |
|
$ |
351 |
|
$ |
(412 |
) |
$ |
1,797 |
| |||||
Provision
for credit losses |
9 |
|
21 |
|
225 |
|
(7 |
) |
— |
|
248 |
| |||||||||||
Noninterest
income |
320 |
|
162 |
|
129 |
|
393 |
|
47 |
|
1,051 |
| |||||||||||
Noninterest
expenses |
620 |
|
434 |
|
408 |
|
445 |
|
23 |
|
1,930 |
| |||||||||||
Provision (benefit) for
income taxes |
116 |
|
152 |
|
(12 |
) |
81 |
|
(144 |
) |
193 |
| |||||||||||
Net
income (loss) |
$ |
247 |
|
$ |
270 |
|
$ |
(21 |
) |
$ |
225 |
|
$ |
(244 |
) |
$ |
477 |
| |||||
Net
credit-related charge-offs |
$ |
9 |
|
$ |
26 |
|
$ |
118 |
|
$ |
4 |
|
$ |
— |
|
$ |
157 |
| |||||
Selected
average balances: |
|||||||||||||||||||||||
Assets |
$ |
13,262 |
|
$ |
17,855 |
|
$ |
11,101 |
|
$ |
9,062 |
|
$ |
20,463 |
|
$ |
71,743 |
| |||||
Loans |
12,614 |
|
17,574 |
|
10,637 |
|
8,171 |
|
— |
|
48,996 |
| |||||||||||
Deposits |
21,807 |
|
17,408 |
|
10,168 |
|
8,005 |
|
353 |
|
57,741 |
| |||||||||||
Statistical
data: |
|||||||||||||||||||||||
Return
on average assets (a) |
1.09 |
% |
1.46 |
% |
(0.17 |
)% |
2.48 |
% |
N/M |
|
0.67 |
% | |||||||||||
Efficiency
ratio (b) |
62.01 |
|
49.49 |
|
67.80 |
|
59.79 |
|
N/M |
|
67.53 |
|
(dollar
amounts in millions) |
Michigan |
California |
Texas |
Other
Markets |
Finance
& Other |
Total | |||||||||||||||||
Year
Ended December 31, 2015 | |||||||||||||||||||||||
Earnings
summary: |
|||||||||||||||||||||||
Net interest income
(expense) |
$ |
715 |
|
$ |
732 |
|
$ |
519 |
|
$ |
337 |
|
$ |
(614 |
) |
$ |
1,689 |
| |||||
Provision
for credit losses |
(27 |
) |
17 |
|
131 |
|
25 |
|
1 |
|
147 |
| |||||||||||
Noninterest
income |
329 |
|
150 |
|
131 |
|
381 |
|
44 |
|
1,035 |
| |||||||||||
Noninterest
expenses |
594 |
|
405 |
|
387 |
|
431 |
|
10 |
|
1,827 |
| |||||||||||
Provision (benefit) for
income taxes |
153 |
|
165 |
|
54 |
|
65 |
|
(208 |
) |
229 |
| |||||||||||
Net
income (loss) |
$ |
324 |
|
$ |
295 |
|
$ |
78 |
|
$ |
197 |
|
$ |
(373 |
) |
$ |
521 |
| |||||
Net
credit-related charge-offs |
$ |
8 |
|
$ |
18 |
|
$ |
46 |
|
$ |
29 |
|
$ |
— |
|
$ |
101 |
| |||||
Selected
average balances: |
|||||||||||||||||||||||
Assets |
$ |
13,761 |
|
$ |
16,881 |
|
$ |
11,778 |
|
$ |
8,708 |
|
$ |
19,119 |
|
$ |
70,247 |
| |||||
Loans |
13,180 |
|
16,613 |
|
11,168 |
|
7,667 |
|
— |
|
48,628 |
| |||||||||||
Deposits |
21,873 |
|
17,763 |
|
10,882 |
|
7,403 |
|
405 |
|
58,326 |
| |||||||||||
Statistical
data: |
|||||||||||||||||||||||
Return
on average assets (a) |
1.42 |
% |
1.56 |
% |
0.62 |
% |
2.27 |
% |
N/M |
|
0.74 |
% | |||||||||||
Efficiency
ratio (b) |
56.69 |
|
45.90 |
|
59.55 |
|
59.79 |
|
N/M |
|
66.93 |
|
(dollar
amounts in millions) |
Michigan |
California |
Texas |
Other
Markets |
Finance
& Other |
Total | |||||||||||||||||
Year
Ended December 31, 2014 | |||||||||||||||||||||||
Earnings
summary: |
|||||||||||||||||||||||
Net
interest income (expense) |
$ |
712 |
|
$ |
720 |
|
$ |
542 |
|
$ |
310 |
|
$ |
(629 |
) |
$ |
1,655 |
| |||||
Provision
for credit losses |
(32 |
) |
28 |
|
50 |
|
(18 |
) |
(1 |
) |
27 |
| |||||||||||
Noninterest
income |
342 |
|
143 |
|
139 |
|
178 |
|
55 |
|
857 |
| |||||||||||
Noninterest
expenses |
639 |
|
395 |
|
368 |
|
205 |
|
8 |
|
1,615 |
| |||||||||||
Provision
(benefit) for income taxes |
160 |
|
168 |
|
96 |
|
77 |
|
(224 |
) |
277 |
| |||||||||||
Net
income (loss) |
$ |
287 |
|
$ |
272 |
|
$ |
167 |
|
$ |
224 |
|
$ |
(357 |
) |
$ |
593 |
| |||||
Net
credit-related charge-offs (recoveries) |
$ |
8 |
|
$ |
22 |
|
$ |
9 |
|
$ |
(14 |
) |
$ |
— |
|
$ |
25 |
| |||||
Selected
average balances: |
|||||||||||||||||||||||
Assets |
$ |
13,749 |
|
$ |
15,667 |
|
$ |
11,645 |
|
$ |
7,610 |
|
$ |
17,665 |
|
$ |
66,336 |
| |||||
Loans |
13,336 |
|
15,390 |
|
10,954 |
|
6,908 |
|
— |
|
46,588 |
| |||||||||||
Deposits |
21,023 |
|
16,142 |
|
10,764 |
|
6,386 |
|
469 |
|
54,784 |
| |||||||||||
Statistical
data: |
|||||||||||||||||||||||
Return
on average assets (a) |
1.31 |
% |
1.59 |
% |
1.39 |
% |
2.94 |
% |
N/M |
|
0.89 |
% | |||||||||||
Efficiency
ratio (b) |
60.41 |
|
45.64 |
|
53.93 |
|
42.26 |
|
N/M |
|
64.16 |
|
(a) |
Return
on average assets is calculated based on the greater of average assets or
average liabilities and attributed
equity. |
(in
millions, except share data) |
|
| |||||
December
31 |
2016 |
2015 | |||||
Assets |
|||||||
Cash
and due from subsidiary bank |
$ |
761 |
|
$ |
4 |
| |
Short-term
investments with subsidiary bank |
— |
|
569 |
| |||
Other
short-term investments |
87 |
|
89 |
| |||
Investment
in subsidiaries, principally banks |
7,561 |
|
7,523 |
| |||
Premises
and equipment |
2 |
|
3 |
| |||
Other
assets |
150 |
|
137 |
| |||
Total
assets |
$ |
8,561 |
|
$ |
8,325 |
| |
Liabilities
and Shareholders’ Equity |
|||||||
Medium-
and long-term debt |
$ |
604 |
|
$ |
608 |
| |
Other
liabilities |
161 |
|
157 |
| |||
Total
liabilities |
765 |
|
765 |
| |||
Common
stock - $5 par value: |
|||||||
Authorized
- 325,000,000 shares |
|||||||
Issued
- 228,164,824 shares |
1,141 |
|
1,141 |
| |||
Capital
surplus |
2,135 |
|
2,173 |
| |||
Accumulated
other comprehensive loss |
(383 |
) |
(429 |
) | |||
Retained
earnings |
7,331 |
|
7,084 |
| |||
Less cost of common stock
in treasury - 52,851,156 shares at 12/31/16 and 52,457,113 shares at
12/31/15 |
(2,428 |
) |
(2,409 |
) | |||
Total
shareholders’ equity |
7,796 |
|
7,560 |
| |||
Total
liabilities and shareholders’ equity |
$ |
8,561 |
|
$ |
8,325 |
|
(in
millions) |
|
||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||
Income |
|||||||||||
Income
from subsidiaries: |
|||||||||||
Dividends
from subsidiaries |
$ |
549 |
|
$ |
441 |
|
$ |
384 |
| ||
Other
interest income |
1 |
|
1 |
|
1 |
| |||||
Intercompany
management fees |
138 |
|
123 |
|
118 |
| |||||
Other
noninterest income |
3 |
|
1 |
|
7 |
| |||||
Total
income |
691 |
|
566 |
|
510 |
| |||||
Expenses |
|||||||||||
Interest
on medium- and long-term debt |
10 |
|
14 |
|
14 |
| |||||
Salaries
and benefits expense |
114 |
|
112 |
|
114 |
| |||||
Net
occupancy expense |
5 |
|
5 |
|
5 |
| |||||
Equipment
expense |
1 |
|
1 |
|
1 |
| |||||
Restructuring
charges |
33 |
|
— |
|
— |
| |||||
Other
noninterest expenses |
72 |
|
70 |
|
70 |
| |||||
Total
expenses |
235 |
|
202 |
|
204 |
| |||||
Income before benefit for
income taxes and equity in undistributed earnings of
subsidiaries |
456 |
|
364 |
|
306 |
| |||||
Benefit
for income taxes |
(28 |
) |
(27 |
) |
(27 |
) | |||||
Income
before equity in undistributed earnings of subsidiaries |
484 |
|
391 |
|
333 |
| |||||
Equity
in undistributed earnings of subsidiaries, principally
banks |
(7 |
) |
130 |
|
260 |
| |||||
Net
income |
477 |
|
521 |
|
593 |
| |||||
Less
income allocated to participating securities |
4 |
|
6 |
|
7 |
| |||||
Net
income attributable to common shares |
$ |
473 |
|
$ |
515 |
|
$ |
586 |
|
(in
millions) |
|
|
| ||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 | ||||||||
Operating
Activities |
|||||||||||
Net
income |
$ |
477 |
|
$ |
521 |
|
$ |
593 |
| ||
Adjustments to reconcile
net income to net cash provided by operating activities: |
|||||||||||
Undistributed
earnings of subsidiaries, principally banks |
7 |
|
(130 |
) |
(260 |
) | |||||
Depreciation
and amortization |
1 |
|
1 |
|
1 |
| |||||
Net
periodic defined benefit cost |
1 |
|
5 |
|
4 |
| |||||
Share-based
compensation expense |
14 |
|
14 |
|
16 |
| |||||
Benefit
for deferred income taxes |
(3 |
) |
— |
|
— |
| |||||
Excess
tax benefits from share-based compensation arrangements |
(9 |
) |
(3 |
) |
(7 |
) | |||||
Other,
net |
6 |
|
5 |
|
16 |
| |||||
Net
cash provided by operating activities |
494 |
|
413 |
|
363 |
| |||||
Investing
Activities |
|||||||||||
Net
change in premises and equipment |
— |
|
(1 |
) |
2 |
| |||||
Net
cash (used in) provided by investing activities |
— |
|
(1 |
) |
2 |
| |||||
Financing
Activities |
|||||||||||
Medium-
and long-term debt: |
|||||||||||
Maturities
and redemptions |
— |
|
(600 |
) |
— |
| |||||
Issuances |
— |
|
— |
|
596 |
| |||||
Common
Stock: |
|||||||||||
Repurchases |
(310 |
) |
(240 |
) |
(260 |
) | |||||
Cash
dividends paid |
(152 |
) |
(147 |
) |
(137 |
) | |||||
Issuances
of common stock under employee stock plans |
152 |
|
22 |
|
49 |
| |||||
Purchase
and retirement of warrants |
— |
|
(10 |
) |
— |
| |||||
Excess
tax benefits from share-based compensation arrangements |
9 |
|
3 |
|
7 |
| |||||
Other,
net |
(5 |
) |
— |
|
— |
| |||||
Net
cash (used in) provided by financing activities |
(306 |
) |
(972 |
) |
255 |
| |||||
Net
increase (decrease) in cash and cash equivalents |
188 |
|
(560 |
) |
620 |
| |||||
Cash
and cash equivalents at beginning of period |
573 |
|
1,133 |
|
513 |
| |||||
Cash
and cash equivalents at end of period |
$ |
761 |
|
$ |
573 |
|
$ |
1,133 |
| ||
Interest
paid |
$ |
9 |
|
$ |
16 |
|
$ |
12 |
| ||
Income
taxes recovered |
$ |
(139 |
) |
$ |
(62 |
) |
$ |
(33 |
) |
2016 | |||||||||||||||
(in
millions, except per share data) |
Fourth
Quarter |
Third
Quarter |
Second
Quarter |
First
Quarter | |||||||||||
Interest
income |
$ |
484 |
|
$ |
480 |
|
$ |
473 |
|
$ |
472 |
| |||
Interest
expense |
29 |
|
30 |
|
28 |
|
25 |
| |||||||
Net
interest income |
455 |
|
450 |
|
445 |
|
447 |
| |||||||
Provision
for credit losses |
35 |
|
16 |
|
49 |
|
148 |
| |||||||
Net
securities losses |
(2 |
) |
— |
|
(1 |
) |
(2 |
) | |||||||
Noninterest
income excluding net securities losses |
269 |
|
272 |
|
269 |
|
246 |
| |||||||
Noninterest
expenses |
461 |
|
493 |
|
518 |
|
458 |
| |||||||
Provision
for income taxes |
62 |
|
64 |
|
42 |
|
25 |
| |||||||
Net
income |
164 |
|
149 |
|
104 |
|
60 |
| |||||||
Less
income allocated to participating securities |
1 |
|
1 |
|
1 |
|
1 |
| |||||||
Net
income attributable to common shares |
$ |
163 |
|
$ |
148 |
|
$ |
103 |
|
$ |
59 |
| |||
Earnings
per common share: |
|||||||||||||||
Basic |
$ |
0.95 |
|
$ |
0.87 |
|
$ |
0.60 |
|
$ |
0.34 |
| |||
Diluted |
0.92 |
|
0.84 |
|
0.58 |
|
0.34 |
| |||||||
Comprehensive
income |
73 |
|
152 |
|
137 |
|
161 |
|
2015 | |||||||||||||||
(in
millions, except per share data) |
Fourth
Quarter |
Third
Quarter |
Second
Quarter |
First
Quarter | |||||||||||
Interest
income |
$ |
457 |
|
$ |
448 |
|
$ |
444 |
|
$ |
435 |
| |||
Interest
expense |
24 |
|
26 |
|
23 |
|
22 |
| |||||||
Net
interest income |
433 |
|
422 |
|
421 |
|
413 |
| |||||||
Provision
for credit losses |
60 |
|
26 |
|
47 |
|
14 |
| |||||||
Net
securities losses |
— |
|
— |
|
— |
|
(2 |
) | |||||||
Noninterest
income excluding net securities losses |
266 |
|
260 |
|
258 |
|
253 |
| |||||||
Noninterest
expenses |
482 |
|
457 |
|
433 |
|
455 |
| |||||||
Provision
for income taxes |
41 |
|
63 |
|
64 |
|
61 |
| |||||||
Net
income |
116 |
|
136 |
|
135 |
|
134 |
| |||||||
Less
income allocated to participating securities |
1 |
|
2 |
|
1 |
|
2 |
| |||||||
Net
income attributable to common shares |
$ |
115 |
|
$ |
134 |
|
$ |
134 |
|
$ |
132 |
| |||
Earnings
per common share: |
|||||||||||||||
Basic |
$ |
0.65 |
|
$ |
0.76 |
|
$ |
0.76 |
|
$ |
0.75 |
| |||
Diluted |
0.64 |
|
0.74 |
|
0.73 |
|
0.73 |
| |||||||
Comprehensive
income |
32 |
|
187 |
|
109 |
|
176 |
|
Ralph
W. Babb Jr. |
David
E. Duprey |
Muneera
S. Carr | ||
Chairman
and |
Executive
Vice President and |
Executive
Vice President and | ||
Chief
Executive Officer |
Chief
Financial Officer |
Chief
Accounting Officer |
(in
millions) |
|
|
|
|
| ||||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 |
2013 |
2012 | ||||||||||||||
ASSETS |
|||||||||||||||||||
Cash
and due from banks |
$ |
1,146 |
|
$ |
1,059 |
|
$ |
934 |
|
$ |
987 |
|
$ |
983 |
| ||||
Interest-bearing
deposits with banks |
5,099 |
|
6,158 |
|
5,513 |
|
4,930 |
|
4,128 |
| |||||||||
Other
short-term investments |
102 |
|
106 |
|
109 |
|
112 |
|
134 |
| |||||||||
Investment
securities |
12,348 |
|
10,237 |
|
9,350 |
|
9,637 |
|
9,915 |
| |||||||||
Commercial
loans |
31,062 |
|
31,501 |
|
29,715 |
|
27,971 |
|
26,224 |
| |||||||||
Real
estate construction loans |
2,508 |
|
1,884 |
|
1,909 |
|
1,486 |
|
1,390 |
| |||||||||
Commercial
mortgage loans |
8,981 |
|
8,697 |
|
8,706 |
|
9,060 |
|
9,842 |
| |||||||||
Lease
financing |
684 |
|
783 |
|
834 |
|
847 |
|
864 |
| |||||||||
International
loans |
1,367 |
|
1,441 |
|
1,376 |
|
1,275 |
|
1,272 |
| |||||||||
Residential
mortgage loans |
1,894 |
|
1,878 |
|
1,778 |
|
1,620 |
|
1,505 |
| |||||||||
Consumer
loans |
2,500 |
|
2,444 |
|
2,270 |
|
2,153 |
|
2,209 |
| |||||||||
Total
loans |
48,996 |
|
48,628 |
|
46,588 |
|
44,412 |
|
43,306 |
| |||||||||
Less
allowance for loan losses |
(730 |
) |
(621 |
) |
(601 |
) |
(622 |
) |
(693 |
) | |||||||||
Net
loans |
48,266 |
|
48,007 |
|
45,987 |
|
43,790 |
|
42,613 |
| |||||||||
Accrued
income and other assets |
4,782 |
|
4,680 |
|
4,443 |
|
4,477 |
|
4,796 |
| |||||||||
Total
assets |
$ |
71,743 |
|
$ |
70,247 |
|
$ |
66,336 |
|
$ |
63,933 |
|
$ |
62,569 |
| ||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY |
|||||||||||||||||||
Noninterest-bearing
deposits |
$ |
29,751 |
|
$ |
28,087 |
|
$ |
25,019 |
|
$ |
22,379 |
|
$ |
21,004 |
| ||||
Money
market and interest-bearing checking deposits |
22,744 |
|
24,073 |
|
22,891 |
|
21,704 |
|
20,622 |
| |||||||||
Savings
deposits |
2,013 |
|
1,841 |
|
1,744 |
|
1,657 |
|
1,593 |
| |||||||||
Customer
certificates of deposit |
3,200 |
|
4,209 |
|
4,869 |
|
5,471 |
|
5,902 |
| |||||||||
Other
time deposits |
— |
|
— |
|
— |
|
— |
|
— |
| |||||||||
Foreign
office time deposits |
33 |
|
116 |
|
261 |
|
500 |
|
412 |
| |||||||||
Total
interest-bearing deposits |
27,990 |
|
30,239 |
|
29,765 |
|
29,332 |
|
28,529 |
| |||||||||
Total
deposits |
57,741 |
|
58,326 |
|
54,784 |
|
51,711 |
|
49,533 |
| |||||||||
Short-term
borrowings |
138 |
|
93 |
|
200 |
|
211 |
|
76 |
| |||||||||
Accrued
expenses and other liabilities |
1,273 |
|
1,389 |
|
1,016 |
|
1,074 |
|
1,133 |
| |||||||||
Medium-
and long-term debt |
4,917 |
|
2,905 |
|
2,963 |
|
3,972 |
|
4,818 |
| |||||||||
Total
liabilities |
64,069 |
|
62,713 |
|
58,963 |
|
56,968 |
|
55,560 |
| |||||||||
Total
shareholders’ equity |
7,674 |
|
7,534 |
|
7,373 |
|
6,965 |
|
7,009 |
| |||||||||
Total
liabilities and shareholders’ equity |
$ |
71,743 |
|
$ |
70,247 |
|
$ |
66,336 |
|
$ |
63,933 |
|
$ |
62,569 |
|
(in
millions, except per share data) |
|||||||||||||||||||
Years
Ended December 31 |
2016 |
2015 |
2014 |
2013 |
2012 | ||||||||||||||
INTEREST
INCOME |
|||||||||||||||||||
Interest
and fees on loans |
$ |
1,635 |
|
$ |
1,551 |
|
$ |
1,525 |
|
$ |
1,556 |
|
$ |
1,617 |
| ||||
Interest
on investment securities |
247 |
|
216 |
|
211 |
|
214 |
|
234 |
| |||||||||
Interest
on short-term investments |
27 |
|
17 |
|
14 |
|
14 |
|
12 |
| |||||||||
Total
interest income |
1,909 |
|
1,784 |
|
1,750 |
|
1,784 |
|
1,863 |
| |||||||||
INTEREST
EXPENSE |
|||||||||||||||||||
Interest
on deposits |
40 |
|
43 |
|
45 |
|
55 |
|
70 |
| |||||||||
Interest
on medium- and long-term debt |
72 |
|
52 |
|
50 |
|
57 |
|
65 |
| |||||||||
Total
interest expense |
112 |
|
95 |
|
95 |
|
112 |
|
135 |
| |||||||||
Net
interest income |
1,797 |
|
1,689 |
|
1,655 |
|
1,672 |
|
1,728 |
| |||||||||
Provision
for credit losses |
248 |
|
147 |
|
27 |
|
46 |
|
79 |
| |||||||||
Net
interest income after provision for loan losses |
1,549 |
|
1,542 |
|
1,628 |
|
1,626 |
|
1,649 |
| |||||||||
NONINTEREST
INCOME |
|||||||||||||||||||
Card
fees |
303 |
|
276 |
|
81 |
|
78 |
|
70 |
| |||||||||
Service
charges on deposit accounts |
219 |
|
223 |
|
215 |
|
214 |
|
214 |
| |||||||||
Fiduciary
income |
190 |
|
187 |
|
180 |
|
171 |
|
158 |
| |||||||||
Commercial
lending fees |
89 |
|
99 |
|
98 |
|
99 |
|
96 |
| |||||||||
Letter
of credit fees |
50 |
|
53 |
|
57 |
|
64 |
|
71 |
| |||||||||
Bank-owned
life insurance |
42 |
|
40 |
|
39 |
|
40 |
|
39 |
| |||||||||
Foreign
exchange income |
42 |
|
40 |
|
40 |
|
36 |
|
38 |
| |||||||||
Brokerage
fees |
19 |
|
17 |
|
17 |
|
17 |
|
19 |
| |||||||||
Net
securities (losses) gains |
(5 |
) |
(2 |
) |
— |
|
(1 |
) |
12 |
| |||||||||
Other
noninterest income |
102 |
|
102 |
|
130 |
|
156 |
|
146 |
| |||||||||
Total
noninterest income |
1,051 |
|
1,035 |
|
857 |
|
874 |
|
863 |
| |||||||||
NONINTEREST
EXPENSES |
|||||||||||||||||||
Salaries
and benefits expense |
961 |
|
1,009 |
|
980 |
|
1,009 |
|
1,018 |
| |||||||||
Outside
processing fee expense |
336 |
|
318 |
|
111 |
|
111 |
|
100 |
| |||||||||
Net
occupancy expense |
157 |
|
159 |
|
171 |
|
160 |
|
163 |
| |||||||||
Equipment
expense |
53 |
|
53 |
|
57 |
|
60 |
|
65 |
| |||||||||
Restructuring
charges |
93 |
|
— |
|
— |
|
— |
|
35 |
| |||||||||
Software
expense |
119 |
|
99 |
|
95 |
|
90 |
|
90 |
| |||||||||
FDIC
insurance expense |
54 |
|
37 |
|
33 |
|
33 |
|
38 |
| |||||||||
Advertising
expense |
21 |
|
24 |
|
23 |
|
21 |
|
27 |
| |||||||||
Litigation-related
expenses |
1 |
|
(32 |
) |
4 |
|
52 |
|
23 |
| |||||||||
Gain
on debt redemption |
— |
|
— |
|
(32 |
) |
(1 |
) |
— |
| |||||||||
Other
noninterest expenses |
135 |
|
160 |
|
173 |
|
179 |
|
191 |
| |||||||||
Total
noninterest expenses |
1,930 |
|
1,827 |
|
1,615 |
|
1,714 |
|
1,750 |
| |||||||||
Income
before income taxes |
670 |
|
750 |
|
870 |
|
786 |
|
762 |
| |||||||||
Provision
for income taxes |
193 |
|
229 |
|
277 |
|
245 |
|
241 |
| |||||||||
NET
INCOME |
$ |
477 |
|
$ |
521 |
|
$ |
593 |
|
$ |
541 |
|
$ |
521 |
| ||||
Less
income allocated to participating securities |
4 |
|
6 |
|
7 |
|
8 |
|
6 |
| |||||||||
Net
income attributable to common shares |
$ |
473 |
|
$ |
515 |
|
$ |
586 |
|
$ |
533 |
|
$ |
515 |
| ||||
Earnings
per common share: |
|||||||||||||||||||
Basic |
2.74 |
|
2.93 |
|
3.28 |
|
2.92 |
|
2.68 |
| |||||||||
Diluted |
2.68 |
|
2.84 |
|
3.16 |
|
2.85 |
|
2.67 |
| |||||||||
Comprehensive
income |
523 |
|
504 |
|
572 |
|
563 |
|
464 |
| |||||||||
Cash
dividends declared on common stock |
155 |
|
148 |
|
143 |
|
126 |
|
106 |
| |||||||||
Cash
dividends declared per common share |
0.89 |
|
0.83 |
|
0.79 |
|
0.68 |
|
0.55 |
|
Years
Ended December 31 |
2016 |
2015 |
2014 |
2013 |
2012 | ||||||||||||||
Average
Rates (Fully Taxable Equivalent Basis) |
|||||||||||||||||||
Interest-bearing
deposits with banks |
0.51 |
% |
0.26 |
% |
0.26 |
% |
0.26 |
% |
0.26 |
% | |||||||||
Other
short-term investments |
0.61 |
|
0.81 |
|
0.57 |
|
1.22 |
|
1.65 |
| |||||||||
Investment
securities |
2.02 |
|
2.13 |
|
2.26 |
|
2.25 |
|
2.43 |
| |||||||||
Commercial
loans |
3.26 |
|
3.07 |
|
3.12 |
|
3.28 |
|
3.44 |
| |||||||||
Real
estate construction loans |
3.63 |
|
3.48 |
|
3.41 |
|
3.85 |
|
4.44 |
| |||||||||
Commercial
mortgage loans |
3.49 |
|
3.41 |
|
3.75 |
|
4.11 |
|
4.44 |
| |||||||||
Lease
financing |
2.65 |
|
3.17 |
|
2.33 |
|
3.23 |
|
3.01 |
| |||||||||
International
loans |
3.63 |
|
3.58 |
|
3.65 |
|
3.74 |
|
3.73 |
| |||||||||
Residential
mortgage loans |
3.76 |
|
3.77 |
|
3.82 |
|
4.09 |
|
4.55 |
| |||||||||
Consumer
loans |
3.32 |
|
3.26 |
|
3.20 |
|
3.30 |
|
3.42 |
| |||||||||
Total
loans |
3.34 |
|
3.20 |
|
3.28 |
|
3.51 |
|
3.74 |
| |||||||||
Interest
income as a percentage of earning assets |
2.88 |
|
2.75 |
|
2.85 |
|
3.03 |
|
3.27 |
| |||||||||
Domestic
deposits |
0.14 |
|
0.14 |
|
0.14 |
|
0.18 |
|
0.24 |
| |||||||||
Deposits
in foreign offices |
0.35 |
|
1.02 |
|
0.82 |
|
0.52 |
|
0.63 |
| |||||||||
Total
interest-bearing deposits |
0.14 |
|
0.14 |
|
0.15 |
|
0.19 |
|
0.25 |
| |||||||||
Short-term
borrowings |
0.45 |
|
0.05 |
|
0.04 |
|
0.07 |
|
0.12 |
| |||||||||
Medium-
and long-term debt |
1.45 |
|
1.80 |
|
1.68 |
|
1.45 |
|
1.36 |
| |||||||||
Interest
expense as a percentage of interest-bearing sources |
0.34 |
|
0.29 |
|
0.29 |
|
0.33 |
|
0.41 |
| |||||||||
Interest
rate spread |
2.54 |
|
2.46 |
|
2.56 |
|
2.70 |
|
2.86 |
| |||||||||
Impact
of net noninterest-bearing sources of funds |
0.17 |
|
0.14 |
|
0.14 |
|
0.14 |
|
0.17 |
| |||||||||
Net
interest margin as a percentage of earning assets |
2.71 |
% |
2.60 |
% |
2.70 |
% |
2.84 |
% |
3.03 |
% | |||||||||
Ratios |
|||||||||||||||||||
Return
on average common shareholders’ equity |
6.22 |
% |
6.91 |
% |
8.05 |
% |
7.76 |
% |
7.43 |
% | |||||||||
Return
on average assets |
0.67 |
|
0.74 |
|
0.89 |
|
0.85 |
|
0.83 |
| |||||||||
Efficiency
ratio (a) |
67.53 |
|
66.93 |
|
64.16 |
|
68.72 |
|
69.15 |
| |||||||||
Common equity tier 1
capital as a percentage of risk weighted assets (b) |
11.09 |
|
10.54 |
|
n/a |
|
n/a |
|
n/a |
| |||||||||
Tier
1 capital as a percentage of risk-weighted assets (b) |
11.09 |
|
10.54 |
|
10.50 |
|
10.64 |
|
10.14 |
| |||||||||
Total
capital as a percentage of risk-weighted assets |
13.27 |
|
12.69 |
|
12.51 |
|
13.10 |
|
13.15 |
| |||||||||
Common
equity ratio |
10.68 |
|
10.52 |
|
10.70 |
|
10.97 |
|
10.67 |
| |||||||||
Tangible
common equity as a percentage of tangible assets (c) |
9.89 |
|
9.70 |
|
9.85 |
|
10.07 |
|
9.76 |
| |||||||||
Per
Common Share Data |
|||||||||||||||||||
Book
value at year-end |
$ |
44.47 |
|
$ |
43.03 |
|
$ |
41.35 |
|
$ |
39.22 |
|
$ |
36.86 |
| ||||
Market
value at year-end |
68.11 |
|
41.83 |
|
46.84 |
|
47.54 |
|
30.34 |
| |||||||||
Market
value for the year |
|||||||||||||||||||
High |
70.44 |
|
53.45 |
|
53.50 |
|
48.69 |
|
34.00 |
| |||||||||
Low |
30.48 |
|
39.52 |
|
42.73 |
|
30.73 |
|
26.25 |
| |||||||||
Other
Data (share data in millions) |
|||||||||||||||||||
Average
common shares outstanding - basic |
172 |
|
176 |
|
179 |
|
183 |
|
191 |
| |||||||||
Average
common shares outstanding - diluted |
177 |
|
181 |
|
185 |
|
187 |
|
192 |
| |||||||||
Number
of banking centers |
458 |
|
477 |
|
481 |
|
483 |
|
489 |
| |||||||||
Number
of employees (full-time equivalent) |
7,960 |
|
8,880 |
|
8,876 |
|
8,948 |
|
9,035 |
|
(a) |
Noninterest
expenses as a percentage of the sum of net interest income (FTE) and
noninterest income excluding net securities gains
(losses). |
(b) |
Ratios
calculated based on the risk-based capital requirements in effect at the
time. The U.S. implementation of the Basel III regulatory capital
framework became effective on January 1, 2015, with transitional
provisions. |
(c) |
See
Supplemental Financial Data section for reconcilements of non-GAAP
financial measures. |
COMERICA
INCORPORATED | |||
By: |
|
/s/
Ralph W. Babb, Jr. | |
|
Ralph
W. Babb, Jr.
Chairman
and Chief Executive Officer |
/s/
Ralph W. Babb, Jr. |
Chairman
and Chief Executive Officer and | |
Ralph
W. Babb, Jr. |
Director
(Principal Executive Officer) | |
/s/
David E. Duprey |
Executive
Vice President and Chief Financial Officer | |
David
E. Duprey |
(Principal
Financial Officer) | |
/s/
Muneera S. Carr |
Executive
Vice President and Chief Accounting Officer | |
Muneera
S. Carr |
(Principal
Accounting Officer) | |
/s/
Michael E. Collins |
||
Michael
E. Collins |
Director | |
/s/
Roger A. Cregg |
||
Roger
A. Cregg |
Director | |
T.
Kevin DeNicola |
Director | |
Jacqueline
P. Kane |
Director | |
/s/
Richard G. Lindner |
||
Richard
G. Lindner |
Director | |
/s/
Alfred A. Piergallini |
||
Alfred
A. Piergallini |
Director | |
/s/
Robert S. Taubman |
||
Robert
S. Taubman |
Director | |
/s/
Reginald M. Turner, Jr. |
||
Reginald
M. Turner, Jr. |
Director | |
/s/
Nina G. Vaca |
||
Nina
G. Vaca |
Director | |
/s/
Michael G. Van de Ven |
||
Michael
G. Van de Ven |
Director |
3.1 |
Restated
Certificate of Incorporation of Comerica Incorporated (filed as Exhibit
3.2 to Registrant's Current Report on Form 8-K dated August 4, 2010, and
incorporated herein by reference). | |
3.2 |
Certificate
of Amendment to Restated Certificate of Incorporation of Comerica
Incorporated (filed as Exhibit 3.2 to Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2011, and incorporated herein by
reference). | |
3.3 |
Amended
and Restated Bylaws of Comerica Incorporated (filed as Exhibit 3.3 to
Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31,
2011, and incorporated herein by reference). | |
4 |
[Reference
is made to Exhibits 3.1, 3.2 and 3.3 in respect of instruments
defining the rights of security holders. In accordance with
Regulation S-K Item No. 601(b)(4)(iii), the Registrant is not
filing copies of instruments defining the rights of holders of long-term
debt because none of those instruments authorizes debt in excess of 10% of
the total assets of the registrant and its subsidiaries on a consolidated
basis. The Registrant hereby agrees to furnish a copy of any such
instrument to the SEC upon request.] | |
4.1 |
Warrant
Agreement, dated May 6, 2010, between the registrant and Wells Fargo Bank,
N.A. (filed as Exhibit 4.1 to Registrant's Registration Statement on Form
8-A dated May 7, 2010, and incorporated herein by
reference). | |
4.2 |
Form
of Warrant (filed as Exhibit 4.1 to Registrant's Registration Statement on
Form 8-A dated May 7, 2010, and incorporated herein by
reference). | |
4.3 |
Warrant
Agreement, dated as of June 9, 2010, between Comerica Incorporated (as
successor to Sterling Bancshares, Inc.) and American Stock Transfer &
Trust Company, LLC (filed as Exhibit 4.1 to Sterling Bancshares, Inc.'s
Registration Statement on Form 8-A12B filed on June 10, 2010 (File No.
001-34768) and incorporated herein by reference). | |
4.3A |
Appointment
of Wells Fargo Bank, N.A. as successor Warrant Agent under the Warrant
Agreement, dated as of June 9, 2010, of Comerica Incorporated (as
successor to Sterling Bancshares, Inc.) (filed as Exhibit 4.1 to
Registrant's Quarterly Report on Form 10-Q for the quarter ended September
30, 2015, and incorporated herein by reference). | |
4.4 |
Form
of Warrant (filed as Exhibit 4.2 to Registrant's Registration Statement on
Form S-4 (File No. 333-172211), and incorporated herein by
reference). | |
9 |
(not
applicable) | |
10.1† |
Comerica
Incorporated 2006 Amended and Restated Long-Term Incentive
Plan. | |
10.1A† |
Form
of Standard Comerica Incorporated Non-Qualified Stock Option Agreement
under the Comerica Incorporated Amended and Restated 2006 Long-Term
Incentive Plan (filed as Exhibit 10.7 to Registrant's Annual Report
on Form 10-K for the year ended December 31, 2006, and
incorporated herein by reference). | |
10.1B† |
Form
of Standard Comerica Incorporated Non-Qualified Stock Option Agreement
under the Comerica Incorporated Amended and Restated 2006 Long-Term
Incentive Plan (2011 version) (filed as Exhibit 10.44 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2010,
and incorporated herein by reference). | |
10.1C† |
Form
of Standard Comerica Incorporated Non-Qualified Stock Option Agreement
under the Comerica Incorporated Amended and Restated 2006 Long-Term
Incentive Plan (2012 version) (filed as Exhibit 10.1C to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2011, and
incorporated herein by reference). | |
10.1D† |
Form
of Standard Comerica Incorporated Non-Qualified Stock Option Agreement
under the Comerica Incorporated Amended and Restated 2006 Long-Term
Incentive Plan (2014 version) (filed as Exhibit 10.1 to Registrant's
Current Report on Form 8-K dated January 21, 2014, and incorporated herein
by reference). | |
10.1E† |
Form
of Standard Comerica Incorporated Non-Qualified Stock Option Agreement
under the Comerica Incorporated Amended and Restated 2006 Long-Term
Incentive Plan (2014 version 2) (filed as Exhibit 10.1 to Registrant's
Current Report on Form 8-K dated July 22, 2014, and incorporated herein by
reference). | |
10.1F† |
Form
of Standard Comerica Incorporated Non-Qualified Stock Option Agreement
under the Comerica Incorporated Amended and Restated 2006 Long-Term
Incentive Plan (2015 version) (filed as Exhibit 10.2 to Registrant's
Current Report on Form 8-K dated November 10, 2015, and incorporated
herein by reference). | |
10.1G† |
Form
of Standard Comerica Incorporated Non-Qualified Stock Option Agreement
under the Comerica Incorporated Amended and Restated 2006 Long-Term
Incentive Plan (2017 version). | |
10.1H† |
Form
of Standard Comerica Incorporated Restricted Stock Award Agreement
(non-cliff vesting) under the Amended and Restated Comerica Incorporated
2006 Long-Term Incentive Plan (filed as Exhibit 10.11 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2006,
and incorporated herein by reference). | |
10.1I† |
Form
of Standard Comerica Incorporated Restricted Stock Award Agreement
(non-cliff vesting) under the Amended and Restated Comerica Incorporated
2006 Long-Term Incentive Plan (2011 version) (filed as Exhibit 10.46
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2010, and incorporated herein by
reference). | |
10.1J† |
Form
of Standard Comerica Incorporated Restricted Stock Award Agreement
(non-cliff vesting) under the Amended and Restated Comerica Incorporated
2006 Long-Term Incentive Plan (2012 version) (filed as Exhibit 10.1F to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2011, and incorporated herein by reference). | |
10.1K† |
Form
of Standard Comerica Incorporated Restricted Stock Award Agreement
(non-cliff vesting) under the Amended and Restated Comerica Incorporated
2006 Long-Term Incentive Plan (2014 version) (filed as Exhibit 10.2 to
Registrant's Current Report on Form 8-K dated January 21, 2014, and
incorporated herein by reference). | |
10.1L† |
Form
of Standard Comerica Incorporated Restricted Stock Award Agreement
(non-cliff vesting) under the Amended and Restated Comerica Incorporated
2006 Long-Term Incentive Plan (2014 version 2) (filed as Exhibit 10.2 to
Registrant's Current Report on Form 8-K dated July 22, 2014, and
incorporated herein by reference). | |
10.1M† |
Form
of Standard Comerica Incorporated Restricted Stock Award Agreement
(non-cliff vesting) under the Amended and Restated Comerica Incorporated
2006 Long-Term Incentive Plan (2017 version). | |
10.1N† |
Form
of Standard Comerica Incorporated Restricted Stock Award Agreement (cliff
vesting) under the Comerica Incorporated 2006 Amended and Restated
Long-Term Incentive Plan (filed as Exhibit 99.1 to Registrant's
Current Report on Form 8-K dated January 22, 2007, and
incorporated herein by reference). | |
10.1O† |
Form
of Standard Comerica Incorporated Restricted Stock Award Agreement (cliff
vesting) under the Comerica Incorporated 2006 Amended and Restated
Long-Term Incentive Plan (2011 version) (filed as Exhibit 10.45 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 2010, and incorporated herein by
reference). | |
10.1P† |
Form
of Standard Comerica Incorporated Restricted Stock Award Agreement (cliff
vesting) under the Comerica Incorporated 2006 Amended and Restated
Long-Term Incentive Plan (2012 version) (filed as Exhibit 10.1I to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2011, and incorporated herein by reference). | |
10.1Q† |
Form
of Standard Comerica Incorporated Restricted Stock Award Agreement (cliff
vesting) under the Comerica Incorporated 2006 Amended and Restated
Long-Term Incentive Plan (2017 version). | |
10.1R† |
Form
of Standard Comerica Incorporated Restricted Stock Award Agreement (cliff
vesting) under the Comerica Incorporated 2006 Amended and Restated
Long-Term Incentive Plan (long-term restricted version) (filed as
Exhibit 10.41 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2009, and incorporated herein by
reference). | |
10.1S† |
Form
of Standard Comerica Incorporated Restricted Stock Unit Agreement under
the Amended and Restated Comerica Incorporated 2006 Long-Term Incentive
Plan (2011 version) (filed as Exhibit 10.47 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 2010, and
incorporated herein by reference). | |
10.1T† |
Form
of Standard Comerica Incorporated Restricted Stock Unit Agreement under
the Amended and Restated Comerica Incorporated 2006 Long-Term Incentive
Plan (2011 version 2) (filed as Exhibit 10.5 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 2011, and
incorporated herein by reference). | |
10.1U† |
Form
of Standard Comerica Incorporated Performance Restricted Stock Unit
Agreement under the Amended and Restated Comerica Incorporated 2006
Long-Term Incentive Plan (2012 version) (filed as Exhibit 10.1 to
Registrant's Current Report on Form 8-K dated November 19, 2012, and
incorporated herein by reference). | |
10.1V† |
Form
of Standard Comerica Incorporated Senior Executive Long-Term Performance
Restricted Stock Unit Award Agreement under the Amended and Restated
Comerica Incorporated 2006 Long-Term Incentive Plan (filed as Exhibit 10.3
to Registrant's Current Report on Form 8-K dated January 21, 2014, and
incorporated herein by reference). | |
10.1W† |
Form
of Standard Comerica Incorporated Senior Executive Long-Term Performance
Restricted Stock Unit Award Agreement under the Amended and Restated
Comerica Incorporated 2006 Long-Term Incentive Plan (2014 version 2)
(filed as Exhibit 10.3 to Registrant's Current Report on Form 8-K dated
July 22, 2014, and incorporated herein by reference). | |
10.1X† |
Form
of Standard Comerica Incorporated Senior Executive Long-Term Performance
Restricted Stock Unit Award Agreement under the Amended and Restated
Comerica Incorporated 2006 Long-Term Incentive Plan (2015 version) (filed
as Exhibit 10.1 to Registrant's Current Report on Form 8-K dated November
10, 2015, and incorporated herein by reference). | |
10.1Y† |
Form
of Standard Comerica Incorporated Senior Executive Long-Term Performance
Restricted Stock Unit Award Agreement under the Amended and Restated
Comerica Incorporated 2006 Long-Term Incentive Plan (2017
version). |
10.2† |
Comerica
Incorporated 1997 Amended and Restated Long-Term Incentive Plan (filed as
Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2001, and incorporated herein by
reference). | |
10.2A† |
Form
of Standard Comerica Incorporated Non-Qualified Stock Option Agreement
under the Amended and Restated Comerica Incorporated 1997 Long-Term
Incentive Plan (filed as Exhibit 10.4 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 2004,
and incorporated herein by reference). | |
10.3† |
Amended
and Restated Sterling Bancshares, Inc. 2003 Stock Incentive and
Compensation Plan effective April 30, 2007 (filed as Exhibit 10.1 to
Sterling Bancshares, Inc.'s Current Report on Form 8-K dated August 14,
2007 (File No. 000-20750), and incorporated herein by
reference). | |
10.4† |
Comerica
Incorporated Amended and Restated Employee Stock Purchase Plan (amended
and restated October 22, 2013) (filed as Exhibit 10.5 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2013, and
incorporated herein by reference). | |
10.5† |
Comerica
Incorporated 2011 Management Incentive Plan (filed as Exhibit 10.1 to
Registrant's Current Report on Form 8-K dated April 26, 2011, and
incorporated herein by reference). | |
10.6† |
Comerica
Incorporated 2016 Management Incentive Plan (filed as Exhibit 10.1 to
Registrant's Current Report on Form 8-K dated May 2, 2016, and
incorporated herein by reference). | |
10.7† |
Form
of Standard Comerica Incorporated No Sale Agreement under the Comerica
Incorporated Amended and Restated Management Incentive Plan (filed as
Exhibit 10.5 to Registrant's Quarterly Report on Form 10-Q for
the quarter ended September 30, 2004, and incorporated herein by
reference). | |
10.8† |
Supplemental
Retirement Income Account Plan (formerly known as the Amended and Restated
Benefit Equalization Plan for Employees of Comerica Incorporated) (amended
and restated October 13, 2016, with amendments effective January 1, 2017)
(filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K dated
January 26, 2017, and incorporated herein by reference).
| |
10.9† |
1999
Comerica Incorporated Amended and Restated Deferred Compensation Plan
(amended and restated on July 26, 2011) (filed as Exhibit 10.1 to
Registrant's Current Report on Form 8-K dated July 26, 2011, and
incorporated herein by reference). | |
10.10† |
1999
Comerica Incorporated Amended and Restated Common Stock Deferred Incentive
Award Plan (amended and restated on July 26, 2011) (filed as Exhibit 10.2
to Registrant's Current Report on Form 8-K dated July 26, 2011, and
incorporated herein by reference). | |
10.11† |
Sterling
Bancshares, Inc. Deferred Compensation Plan (as Amended and Restated)
(filed as Exhibit 4.4 to Registrant's
Registration
Statement on Form S-8 dated July 28, 2011 (Registration No. 333-175857)
and incorporated herein by reference). | |
10.12† |
Amended
and Restated Comerica Incorporated Non-Employee Director Fee Deferral Plan
(amended and restated on January 27, 2015) (filed as Exhibit 10.13 to
Registrant's Annual Report on Form 10-K for the year ended December 31,
2014, and incorporated herein by reference). | |
10.13† |
Amended
and Restated Comerica Incorporated Common Stock Non-Employee Director Fee
Deferral Plan (amended and restated on January 27, 2015) (filed as
Exhibit 10.14 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2014, and incorporated herein by
reference). | |
10.14† |
Comerica
Incorporated Amended and Restated Incentive Plan for Non-Employee
Directors (amended and restated effective May 15, 2014) (filed as
Exhibit 10.3 to Registrant's Quarterly Report on Form 10-Q for
the quarter ended March 31, 2015, and incorporated herein by
reference). | |
10.14A† |
Form
of Standard Comerica Incorporated Non-Employee Director Restricted Stock
Unit Agreement under the Comerica Incorporated Amended and Restated
Incentive Plan for Non-Employee Directors (filed as Exhibit 10.2 to
Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2005, and incorporated herein by
reference). | |
10.14B† |
Form
of Standard Comerica Incorporated Non-Employee Director Restricted Stock
Unit Agreement under the Comerica Incorporated Amended and Restated
Incentive Plan for Non-Employee Directors (Version 2) (filed as
Exhibit 10.6 to Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 2006, and incorporated herein by
reference). | |
10.14C† |
Form
of Standard Comerica Incorporated Non-Employee Director Restricted Stock
Unit Agreement under the Comerica Incorporated Amended and Restated
Incentive Plan for Non-Employee Directors (Version 2.5) (filed as
Exhibit 10.48 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2010, and incorporated herein by
reference). | |
10.14D† |
Form
of Standard Comerica Incorporated Non-Employee Director Restricted Stock
Unit Agreement under the Comerica Incorporated Amended and Restated
Incentive Plan for Non-Employee Directors (Version 3) (filed as
Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 2009, and incorporated herein by
reference). | |
10.14E† |
Form
of Standard Comerica Incorporated Non-Employee Director Restricted Stock
Unit Agreement under the Comerica Incorporated Amended and Restated
Incentive Plan for Non-Employee Directors (Version 4) (filed as Exhibit
10.4 to Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2011, and incorporated herein by reference). | |
10.15† |
2015
Comerica Incorporated Incentive Plan for Non-Employee Directors (filed as
Exhibit 10.4 to Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2015, and incorporated herein by reference).
| |
10.15A† |
Form
of Standard Comerica Incorporated Non-Employee Director Restricted Stock
Unit Agreement under the 2015 Comerica Incorporated Incentive Plan for
Non-Employee Directors (filed as Exhibit 10.1 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 2015, and
incorporated herein by reference). | |
10.16† |
Form
of Indemnification Agreement between Comerica Incorporated and certain of
its directors and officers (filed as Exhibit 10.6 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2002,
and incorporated herein by reference). | |
10.17† |
Supplemental
Benefit Agreement with Eugene A. Miller (filed as Exhibit 10.1 to
Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2002, and incorporated herein by
reference). | |
10.18† |
Supplemental
Pension and Retiree Medical Agreement with Ralph W. Babb Jr. (filed as
Exhibit 10.2 to Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1998, and incorporated herein by
reference). | |
10.19A† |
Restrictive
Covenants and General Release Agreement by and between J. Michael Fulton
and Comerica Incorporated dated April 3, 2014 (filed as Exhibit 10.1 to
Registrant's Current Report on Form 8-K dated April 3, 2014, and
incorporated herein by reference). | |
10.19B† |
Restrictive
Covenants and General Release Agreement by and between Jon W. Bilstrom and
Comerica Incorporated dated July 21, 2016 (filed as Exhibit 10.1 to
Registrant's Current Report on Form 8-K dated July 27, 2016, and
incorporated herein by reference). | |
10.19C† |
Restrictive
Covenants and General Release Agreement by and between J. Patrick Faubion
and Comerica Incorporated dated December 11, 2016. | |
10.20† |
Form
of Change of Control Employment Agreement (BE4 and Higher Version without
gross-up or window period-current) (filed as Exhibit 10.2 to Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2015,
and incorporated herein by reference). | |
10.20A† |
Schedule
of Named Executive Officers Party to Change of Control Employment
Agreement (BE4 and Higher Version without gross-up or window
period-current). | |
10.21† |
Form
of Change of Control Employment Agreement (BE4 and Higher Version) (filed
as Exhibit 10.1 to Registrant's Current Report on Form 8-K dated
November 18, 2008, and incorporated herein by
reference). | |
10.21A† |
Schedule
of Named Executive Officers Party to Change of Control Employment
Agreement (BE4 and Higher Version). | |
10.22† |
Form
of Change of Control Employment Agreement (BE4 and Higher Version without
gross-up or window period-2009 version) (filed as Exhibit 10.42 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 2009, and incorporated herein by
reference). | |
10.23† |
Form
of Change of Control Employment Agreement (BE2-BE3 Version) (filed as
Exhibit 10.2 to Registrant's Current Report on Form 8-K dated
November 18, 2008, and incorporated herein by
reference). | |
10.23A† |
Schedule
of Named Executive Officers Party to Change of Control Employment
Agreement (BE2-BE3 Version). | |
11 |
Statement
regarding Computation of Net Income Per Common Share (incorporated by
reference from Note 15 on page F-88 of this Annual Report on
Form 10-K). | |
12 |
(not
applicable) | |
13 |
(not
applicable) | |
14 |
(not
applicable) | |
16 |
(not
applicable) | |
18 |
(not
applicable) |
21 |
Subsidiaries
of Registrant. | |
22 |
(not
applicable) | |
23.1 |
Consent
of Ernst & Young LLP. | |
24 |
(not
applicable) | |
31.1 |
Chairman
and CEO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report
(pursuant to Section 302 of the Sarbanes-Oxley Act of
2002). | |
31.2 |
Executive
Vice President and CFO Rule 13a-14(a)/15d-14(a) Certification of
Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of
2002). | |
32 |
Section 1350
Certification of Periodic Report (pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002). | |
33 |
(not
applicable) | |
34 |
(not
applicable) | |
35 |
(not
applicable) | |
95 |
(not
applicable) | |
99 |
(not
applicable) | |
100 |
(not
applicable) | |
101 |
Financial
statements from Annual Report on Form 10-K of the Registrant for the
year ended December 31, 2016, formatted in Extensible Business
Reporting Language: (i) the Consolidated Balance Sheets,
(ii) the Consolidated Statements of Income, (iii) the
Consolidated Statements of Changes in Shareholders' Equity, (iv) the
Consolidated Statements of Cash Flows and (v) the Notes to
Consolidated Financial Statements. | |
† |
Management
contract or compensatory plan or arrangement. | |
|
File
No. for all filings under Exchange Act, unless otherwise noted:
1-10706. |
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