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Comerica Inc. Reports Operating Results (10-K)

February 28, 2011 | About:
10qk

10qk

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Comerica Inc. (CMA) filed Annual Report for the period ended 2010-12-31.

Comerica Inc. has a market cap of $6.85 billion; its shares were traded at around $38.83 with a P/E ratio of 57.1 and P/S ratio of 2.59. The dividend yield of Comerica Inc. stocks is 1.03%.Hedge Fund Gurus that owns CMA: Richard Pzena of Pzena Investment Management LLC, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns CMA: Pioneer Investments, David Dreman of Dreman Value Management, Jeremy Grantham of GMO LLC, John Keeley of Keeley Fund Management, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

At June 30, 2010 (the last business day of the registrants most recently completed second fiscal quarter), the registrants common stock, $5 par value, held by non-affiliates had an aggregate market value of approximately $6,296,303,671 based on the closing price on the New York Stock Exchange on that date of $36.83 per share and approximately 170,955,842 shares of common stock held by non-affiliates. For purposes of this Form 10-K only, it has been assumed that all common shares Comericas Trust Department holds for Comerica and Comericas employee plans, and all common shares the registrants directors and executive officers hold, are shares held by affiliates.

Comerica Incorporated (Comerica) is a financial services company, incorporated under the laws of the State of Delaware, and headquartered in Dallas, Texas. As of December 31, 2010, it was among the 25 largest commercial bank holding companies in the United States. Comerica was formed in 1973 to acquire the outstanding common stock of Comerica Bank, which at such time was a Michigan banking corporation and one of Michigans oldest banks (formerly Comerica Bank-Detroit). On October 31, 2007, Comerica Bank, a Michigan banking corporation, was merged with and into Comerica Bank, a Texas banking association (Comerica Bank). As of December 31, 2010, Comerica owned directly or indirectly all the outstanding common stock of 2 active banking and 48 non-banking subsidiaries. At December 31, 2010, Comerica had total assets of approximately $53.7 billion, total deposits of approximately $40.5 billion, total loans (net of unearned income) of approximately $40.2 billion and shareholders equity of approximately $5.8 billion.

Comerica Bank and Comerica Bank & Trust, National Association are required by federal law to obtain the prior approval of the FRB and/or the OCC, as the case may be, for the declaration and payment of dividends, if the total of all dividends declared by the board of directors of such bank in any calendar year will exceed the total of (i) such banks retained net income (as defined and interpreted by regulation) for that year plus (ii) the retained net income (as defined and interpreted by regulation) for the preceding two years, less any required transfers to surplus or to fund the retirement of preferred stock. At January 1, 2011, Comericas subsidiary banks could declare aggregate dividends of approximately $364 million from retained net profits of the preceding two years. Comericas subsidiary banks declared dividends of $28 million in 2010, $49 million in 2009, and $264 million in 2008 without the need for prior governmental approvals.

As of December 31, 2010, Comericas banking subsidiaries held approximately $40 billion of DIF-assessable deposits. Prior to 2007, Comericas banking subsidiaries had not paid nor been assessed deposit insurance assessments on DIF-assessable deposits under the FDICs risk related assessment system. The FDICs risk related assessment system was revised effective January 1, 2007, however, and Comericas banking subsidiaries were assessed deposit insurance premiums on a quarterly basis, beginning in June 2007. In 2008, these assessment premiums totaled $26.8 million and were first applied against the remaining credit of $17.1 million. During the second quarter of 2009, the FDIC levied an industry-wide special assessment charge on

insured financial institutions as part of the agencys efforts to rebuild DIF. In November 2009, the FDIC amended regulations that required insured institutions to prepay their estimated quarterly risk-based assessments for the fourth quarter of 2009 and for all of 2010-2012. The prepaid assessments will be applied against future quarterly assessments (as they may be so revised) until the prepaid assessment is exhausted or the balance of the prepayment is returned, whichever occurs first. Comerica paid such prepaid assessment on December 30, 2009, along with its regular quarterly risk-based deposit insurance assessment for the third quarter of 2009. In 2009, these assessment premiums totaled $281 million, including the second quarter special assessment of $29 million and prepaid assessments of $200 million (which includes assessments that will be expensed by Comerica during 2010-2012). In 2010, the assessment premiums applied against the prepayment totaled $50 million. The remaining prepayment at December 31, 2010 was $150 million, against which 2011 and 2012 DIF assessments will be applied.

Pursuant to the Capital Purchase Program, on November 14, 2008, Comerica issued to the U.S. Treasury, in exchange for aggregate consideration of $2.25 billion, (1) 2.25 million shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series F, no par value (the Series F Preferred Stock), and (2) a warrant to purchase 11,479,592 shares of Comericas common stock at an exercise price of $29.40 per share (the Warrant). The number of shares of common stock to be issued pursuant to the Warrant and the exercise price of the Warrant are subject to anti-dilution and other adjustments from time to time following, among other things, stock splits, subdivisions or combinations, certain issuances of common stock or convertible securities and certain repurchases of common stock. The Series F Preferred Stock (a) had a liquidation amount per share equal to $1,000 for an aggregate value of $2.25 billion and (b) paid a cumulative annual dividend of five percent (5%) for the first five years and nine percent (9%) on an annual basis thereafter. The Warrant expires ten years from the issuance date. Both the Series F Preferred Stock and the Warrant were accounted for as components of Comericas regulatory Tier 1 capital. The letter agreement between the U.S. Treasury and Comerica, dated November 14, 2008, including the securities purchase agreement (the Purchase Agreement) concerning the issuance and sale of the Series F Preferred Stock and the Warrant, granted the holders of the Series F Preferred Stock, the Warrant and Comerica

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