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What changed in COMERICA INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of COMERICA INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+217 added−188 removedSource: 10-K (2024-02-28) vs 10-K (2023-02-14)

Top changes in COMERICA INC's 2023 10-K

217 paragraphs added · 188 removed · 154 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

93 edited+35 added−14 removed94 unchanged
Biggest changeAt December 31, 2022, Comerica met all of its minimum risk-based capital ratio and leverage ratio requirements plus the applicable capital conservation buffer and the applicable well capitalized requirements, as shown in the table below: (dollar amounts in millions) Comerica Incorporated (Consolidated) Comerica Bank December 31, 2022 CET1 capital (minimum $3.5 billion (Consolidated)) $ 7,884 $ 7,801 Tier 1 capital (minimum $4.7 billion (Consolidated)) 8,278 7,801 Total capital (minimum $6.3 billion (Consolidated)) 9,817 9,190 Risk-weighted assets 78,871 78,781 Average assets (fourth quarter) 86,726 86,608 CET1 capital to risk-weighted assets (minimum-4.5%) 10.00 % 9.90 % Tier 1 capital to risk-weighted assets (minimum-6.0%) 10.50 9.90 Total capital to risk-weighted assets (minimum-8.0%) 12.45 11.67 Tier 1 capital to average assets (minimum-4.0%) 9.55 9.01 Capital conservation buffer (minimum-2.5%) 4.45 3.67 December 31, 2021 CET1 capital (minimum $3.1 billion (Consolidated)) $ 7,064 $ 7,634 Tier 1 capital (minimum $4.2 billion (Consolidated)) 7,458 7,634 Total capital (minimum $5.6 billion (Consolidated)) 8,608 8,584 Risk-weighted assets 69,708 69,542 Average assets (fourth quarter) 96,417 96,216 CET1 capital to risk-weighted assets (minimum-4.5%) 10.13 % 10.98 % Tier 1 capital to risk-weighted assets (minimum-6.0%) 10.70 10.98 Total capital to risk-weighted assets (minimum-8.0%) 12.35 12.34 Tier 1 capital to average assets (minimum-4.0%) 7.74 7.93 Capital conservation buffer (minimum-2.5%) 4.35 4.34 Additional information on the calculation of Comerica’s and its bank subsidiaries’ CET1 capital, Tier 1 capital, total capital and risk-weighted assets is set forth in the “Capital” section starting on page F- 14 of the Financial Section of this report and Note 20 of the Notes to Consolidated Financial Statements starting on page F- 88 of the Financial Section of this report. 4 Table of Contents Federal Deposit Insurance Corporation Improvement Act The Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) requires, among other things, the federal banking agencies to take “prompt corrective action” with respect to depository institutions that do not meet certain minimum capital requirements.
Biggest changeFailure to be well capitalized or to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators, including restrictions on the ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications, or other restrictions on growth. 4 Table of Contents At December 31, 2023, Comerica met all of its minimum risk-based capital ratio and leverage ratio requirements plus the applicable capital conservation buffer and the applicable well capitalized requirements, as shown in the table below: (dollar amounts in millions) Comerica Incorporated (Consolidated) Comerica Bank December 31, 2023 CET1 capital (minimum $3.4 billion (Consolidated)) $ 8,414 $ 8,007 Tier 1 capital (minimum $4.6 billion (Consolidated)) 8,808 8,007 Total capital (minimum $6.1 billion (Consolidated)) 10,263 9,362 Risk-weighted assets 75,901 75,783 Average assets (fourth quarter) 87,538 87,423 CET1 capital to risk-weighted assets (minimum-4.5%) 11.09 % 10.57 % Tier 1 capital to risk-weighted assets (minimum-6.0%) 11.60 10.57 Total capital to risk-weighted assets (minimum-8.0%) 13.52 12.35 Tier 1 capital to average assets (minimum-4.0%) 10.06 9.16 Capital conservation buffer (minimum-2.5%) 5.52 4.35 December 31, 2022 CET1 capital (minimum $3.5 billion (Consolidated)) $ 7,884 $ 7,801 Tier 1 capital (minimum $4.7 billion (Consolidated)) 8,278 7,801 Total capital (minimum $6.3 billion (Consolidated)) 9,817 9,190 Risk-weighted assets 78,871 78,781 Average assets (fourth quarter) 86,726 86,608 CET1 capital to risk-weighted assets (minimum-4.5%) 10.00 % 9.90 % Tier 1 capital to risk-weighted assets (minimum-6.0%) 10.50 9.90 Total capital to risk-weighted assets (minimum-8.0%) 12.45 11.67 Tier 1 capital to average assets (minimum-4.0%) 9.55 9.01 Capital conservation buffer (minimum-2.5%) 4.45 3.67 Additional information on the calculation of Comerica’s and its bank subsidiaries’ CET1 capital, Tier 1 capital, total capital and risk-weighted assets is set forth in the “Capital” section in the Financial Section of this report and Note 20 of the Notes to Consolidated Financial Statements in the Financial Section of this report.
Comerica Bank is chartered by the State of Texas and at the state level is supervised and regulated by the Texas Department of Banking under the Texas Finance Code and the Texas Administrative Code.
Comerica Bank (the "Bank") is chartered by the State of Texas and at the state level is supervised and regulated by the Texas Department of Banking under the Texas Finance Code and the Texas Administrative Code.
Comerica and its bank subsidiaries are required to maintain a minimum capital conservation buffer of 2.5 percent in order to avoid restrictions on capital distributions and discretionary bonuses. Comerica and its bank subsidiaries are also required to maintain a minimum “leverage ratio” (Tier 1 capital to non-risk-adjusted average total assets) of 4 percent.
Comerica and its bank subsidiaries are also required to maintain a minimum capital conservation buffer of 2.5 percent in order to avoid restrictions on capital distributions and discretionary bonuses, and to maintain a minimum “leverage ratio” (Tier 1 capital to non-risk-adjusted average total assets) of 4 percent.
Even though many of the requirements do not impact Comerica directly, since Comerica Bank does not meet the definition of swap dealer or major swap participant, Comerica continues to review and evaluate the extent to which such requirements impact its business indirectly.
Even though many of the requirements do not impact Comerica directly, since the Bank does not meet the definition of swap dealer or major swap participant, Comerica continues to review and evaluate the extent to which such requirements impact its business indirectly.
FDICIA also contains a variety of other provisions that may affect the operations of depository institutions including reporting requirements, regulatory standards for real estate lending, “truth in savings” provisions, the requirement that a depository institution give 90 days prior notice to customers and regulatory authorities before closing any branch, and a prohibition on the acceptance or renewal of brokered deposits by depository institutions that are not well capitalized or are adequately capitalized and have not received a waiver from the FDIC.
FDICIA also contains a variety of other provisions that may affect the operations of depository institutions including reporting requirements, regulatory standards for real estate lending, “truth in savings” provisions, the requirement that a depository institution give 90 days prior notice to customers and regulatory authorities before closing any domestic branch, and a prohibition on the acceptance or renewal of brokered deposits by depository institutions that are not well capitalized or are adequately capitalized and have not received a waiver from the FDIC.
A depository institution’s or holding company’s capital is divided into three tiers: Common Equity Tier 1 (“CET1”), additional Tier 1, and Tier 2. CET1 capital predominantly includes common shareholders’ equity, less certain deductions for goodwill, intangible assets and deferred tax assets that arise from net operating losses and tax credit carry-forwards, if any.
A depository institution’s or bank holding company’s capital is divided into three tiers: Common Equity Tier 1 (“CET1”), additional Tier 1, and Tier 2. CET1 capital predominantly includes common shareholders’ equity, less certain deductions for goodwill, intangible assets and deferred tax assets that arise from net operating losses and tax credit carry-forwards, if any.
Additional Tier 1 capital primarily includes any outstanding noncumulative perpetual preferred stock and related surplus. Comerica has also made the election to permanently exclude accumulated other comprehensive income related to debt and equity securities classified as available-for-sale, cash flow hedges, and defined benefit postretirement plans from CET1 capital.
Additional Tier 1 capital primarily includes any outstanding noncumulative perpetual preferred stock and related surplus. Comerica has also made the election to permanently exclude accumulated other comprehensive income related to debt securities classified as available-for-sale, cash flow hedges, and defined benefit postretirement plans from CET1 capital.
Certain transactions executed by Comerica Bank are also subject to regulation by the U.S. Commodity Futures Trading Commission (“CFTC”). The Department of Labor (“DOL”) regulates financial institutions providing services to plans governed by the Employee Retirement Income Security Act of 1974.
Certain transactions executed by the Bank are also subject to regulation by the U.S. Commodity Futures Trading Commission (“CFTC”). The Department of Labor (“DOL”) regulates financial institutions providing services to plans governed by the Employee Retirement Income Security Act of 1974.
Derivative Transactions As a state member bank, Comerica Bank may engage in derivative transactions, as permitted by applicable Texas and federal law. Title VII of the Dodd-Frank Act contains a comprehensive framework for over-the-counter (“OTC”) derivatives transactions.
Derivative Transactions As a state member bank, the Bank may engage in derivative transactions, as permitted by applicable Texas and federal law. Title VII of the Dodd-Frank Act contains a comprehensive framework for over-the-counter (“OTC”) derivatives transactions.
Activities that are “financial in nature” include, but are not limited to: securities underwriting; securities dealing and market making; sponsoring mutual funds and investment companies (subject to regulatory requirements described below); insurance underwriting and agency; merchant banking; and activities that the FRB determines, in consultation with the Secretary of the United States Treasury, to be financial in nature or incidental to a financial activity.
Activities that are "financial in nature" include, but are not limited to: securities underwriting; securities dealing and market making; sponsoring mutual funds and investment companies (subject to regulatory requirements described below); insurance underwriting and agency; merchant banking,; and activities that the FRB determines, in consultation with the Secretary of the United States Treasury, to be financial in nature or incidental to a financial activity.
Under the Change in Bank Control Act, a person or entity generally must provide prior notice to the FRB before acquiring the power to vote 10% or more of Comerica’s outstanding common stock. Investors should be aware of these requirements when acquiring shares of Comerica’s stock.
Under the Change in Bank Control Act, a person or entity generally must provide prior notice to the FRB before acquiring the power to vote 10% or more of a subject company's outstanding common stock. Investors should be aware of these requirements when acquiring shares of Comerica’s stock.
In calculating risk-based capital requirements, a depository institution’s or holding company’s assets and certain specified off-balance sheet items (such as unused commitments and standby letters of credit) are assigned to various risk categories defined by the FRB, each weighted differently based on the level of credit risk that is ascribed to such assets or commitments, based on counterparty type, asset class and maturity.
In calculating risk-based capital requirements, a depository institution’s or holding company’s assets and certain specified off-balance sheet items (such as unused commitments and standby letters of credit) are assigned to various risk categories defined by those agencies, each weighted differently based on the level of risk that is ascribed to such assets or commitments, based on counterparty type, asset class and maturity.
Furthermore, given that Comerica Bank is a bank with assets in excess of $10 billion dollars, it is subject to supervision and regulation by the Consumer Financial Protection Bureau ("CFPB") for purposes of assessing compliance with federal consumer financial laws.
Furthermore, given that the Bank is a bank with assets in excess of $10 billion, it is subject to supervision and regulation by the Consumer Financial Protection Bureau ("CFPB") for purposes of assessing compliance with federal consumer financial laws.
The FRB may require bank holding companies, including Comerica, to maintain capital ratios substantially in excess of mandated minimum levels, depending upon general economic conditions and a bank holding company’s particular condition, risk profile and growth plans.
The FRB may require bank holding companies to maintain capital ratios substantially in excess of mandated minimum levels, depending upon general economic conditions and a bank holding company’s particular condition, risk profile and growth plans.
Section 956 directed regulators to jointly prescribe regulations or guidelines prohibiting incentive-based payment arrangements, or any feature of any such arrangement, at covered financial institutions that encourage inappropriate risks by providing excessive compensation or that could lead to a material financial loss. This proposal supplements the final guidance issued by the banking agencies in June 2010.
Section 956 directed regulators to jointly prescribe regulations or guidelines prohibiting incentive-based payment arrangements, or any feature of any such arrangement, at covered financial institutions that encourage inappropriate risks by providing excessive compensation or that could lead to a material financial loss. This proposal would supplement the final guidance issued by the banking agencies in June 2010.
Prior approval is required before Comerica may acquire the beneficial ownership or control of more than 5% of any class of voting shares or substantially all of the assets of a bank holding company (including a financial holding company) or a bank.
Prior approval is required before a financial holding company may acquire the beneficial ownership or control of more than 5% of any class of voting shares or substantially all of the assets of a bank holding company (including another financial holding company) or a bank.
The increased assessment would improve the likelihood that the DIF reserve ratio would reach the required minimum by the statutory deadline, consistent with the FDIC’s Amended Restoration Plan. The rule is effective as of January 1, 2023.
The increased assessment would improve the likelihood that the DIF reserve ratio would reach the required minimum by the statutory deadline, consistent with the FDIC’s Amended Restoration Plan. The rule became effective as of January 1, 2023.
All full-time colleagues are granted up to 8 hours of PTO annually, and all part-time colleagues are granted up to 4 hours of PTO annually to use for volunteer events. This includes volunteer opportunities related and unrelated to Comerica. Comerica’s investment in its employees has resulted in a long-tenured workforce, with average tenure of around 12 year s of service.
All full-time colleagues are granted up to 8 hours of PTO annually, and all part-time colleagues are granted up to 4 hours of PTO annually to use for volunteer events. This includes volunteer opportunities related and unrelated to Comerica. Comerica’s investment in its employees has resulted in a long-tenured workforce, with average tenure of around 12 years of service.
“Complementary activities” are activities that the FRB determines upon application to be complementary to a financial activity and that do not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally.
"Complementary activities" are activities that the FRB determines upon application to be complementary to a financial activity and that do not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally.
There are statutory and regulatory requirements applicable to the payment of dividends by subsidiary banks to Comerica, as well as by Comerica to its shareholders. Certain, but not all, of these requirements are discussed below. No assurances can be given that Comerica’s bank subsidiaries will, in any circumstances, pay dividends to Comerica.
There are statutory and regulatory requirements applicable to the payment of dividends by subsidiary banks to 5 Table of Contents Comerica, as well as by Comerica to its shareholders. Certain, but not all, of these requirements are discussed below. No assurances can be given that Comerica’s bank subsidiaries will, in any circumstances, pay dividends to Comerica.
Comerica is subject to supervision and regulation at the federal level by the Board of Governors of the Federal Reserve System through the Federal Reserve Bank of Dallas (“FRB”) under the Bank Holding Company Act of 1956, as amended.
Comerica is subject to supervision and regulation at the federal level by the Board of Governors of the Federal Reserve System through the Federal Reserve Bank of Dallas (“FRB”) pursuant to the Bank Holding Company Act of 1956, as amended.
Moreover, incentive-based compensation of these individuals would be subject to potential clawback for seven years following vesting. Further, the rule imposes enhanced risk management controls and governance and internal policy and procedure requirements with respect to incentive compensation. Comerica is monitoring the development of this rule.
Moreover, incentive-based compensation of these individuals would be subject to potential clawback for seven years following vesting. Further, the rule would impose enhanced risk management controls and governance and internal policy and procedure requirements with respect to incentive compensation. Comerica is monitoring the development of this proposal.
For purposes of the FRB’s Regulation Y, including determining whether a bank holding company meets the requirements to be a financial holding company, bank holding companies, such as Comerica, must maintain a Tier 1 capital ratio of at least 6.0 percent and a total capital ratio of at least 10.0 percent to be well capitalized.
For purposes of the FRB’s Regulation Y, including determining whether a bank holding company meets the requirements to be a financial holding company, bank holding companies must maintain a Tier 1 capital ratio of at least 6.0 percent and a total capital ratio of at least 10.0 percent to be well capitalized.
In the case of purchasing branches in a state in which it does not already have banking operations, de novo interstate branching is permissible if under the law of the state in which the branch is to be located, a state bank chartered by that state would be permitted to establish the 7 Table of Contents branch.
In the case of purchasing branches in a state in which it does not already have banking operations, de novo interstate branching is permissible if under the law of the state in which the branch is to be located, a state bank chartered by that state would be permitted to establish the branch.
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 bank's 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.
Banks 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 bank's 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.
If the deficiencies persisted, the FRB could order Comerica to divest any subsidiary bank or to cease engaging in any activities permissible for financial holding companies that are not permissible for bank holding companies, or Comerica could elect to conform its non-banking activities to those permissible for a bank holding company that is not also a financial holding company.
If the deficiencies persist, the FRB could order the financial holding company to divest any subsidiary bank or to cease engaging in any activities permissible for financial holding companies that are not permissible for bank holding companies, or the financial holding company could elect to conform its non-banking activities to those permissible for a bank holding company that is not also a financial holding company.
Comerica Bank has elected to be a member of the Federal Reserve System under the Federal Reserve Act and, consequently, is supervised and regulated by the FRB. Comerica Bank & Trust, National Association is chartered under federal law and is subject to supervision and regulation by the Office of the Comptroller of the Currency (“OCC”) under the National Bank Act.
The Bank has elected to be a member of the Federal Reserve System under the Federal Reserve Act and, consequently, is supervised and regulated by the FRB. Comerica Bank & Trust, National Association is federally chartered and is subject to supervision and regulation by the Office of the Comptroller of the Currency (“OCC”) pursuant to the National Bank Act.
Similar state laws may impose additional requirements on Comerica and its subsidiaries. 6 Table of Contents FDIC Insurance Assessments The DIF provides deposit insurance coverage for certain deposits up to $250,000 per depositor in each deposit account category. Comerica's subsidiary banks are subject to FDIC deposit insurance assessments to maintain the DIF.
Similar state laws may impose additional requirements on Comerica and its subsidiaries. FDIC Insurance Assessments The DIF provides deposit insurance coverage for certain deposits up to $250,000 per depositor in each deposit account category. Comerica's subsidiary banks are subject to FDIC deposit insurance assessments to maintain the DIF.
Many of these changes have occurred as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and its implementing regulations, most of which are now in place.
Many regulatory changes have occurred as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and its implementing regulations, most of which are now in place.
Under the FDICIA “prompt corrective action” regime discussed above, which applies to each of Comerica Bank and Comerica Bank & Trust, National Association, a bank is specifically prohibited from paying dividends to its parent company if payment would result in the bank becoming “undercapitalized.” In addition, Comerica Bank is also subject to limitations under Texas state law regarding the amount of earnings that may be paid out as dividends to Comerica and requires prior approval for payments of dividends that exceed certain levels.
Under the FDICIA “prompt corrective action” regime discussed above, a bank is specifically prohibited from paying dividends to its parent company if payment would result in the bank becoming “undercapitalized.” In addition, the Bank is also subject to limitations under Texas state law regarding the amount of earnings that may be paid out as dividends to Comerica and requires prior approval for payments of dividends that exceed certain levels.
Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization's safety and soundness, particularly if the organization is not taking 8 Table of Contents prompt and effective measures to correct the deficiencies.
Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization's safety and soundness, particularly if the organization is not taking prompt and effective measures to correct the deficiencies.
Comerica has compliance programs required by the Volcker Rule and has either divested or received extensions for any holdings in Covered Funds. In October 2019, the five federal agencies with rulemaking authority with respect to the Volcker Rule finalized changes designed to simplify compliance with the Volcker Rule.
Comerica has compliance programs required by the Volcker Rule and has either divested or received extensions for any holdings in Covered Funds. 10 Table of Contents In October 2019, the five federal agencies with rulemaking authority with respect to the Volcker Rule finalized changes designed to simplify compliance with the Volcker Rule.
On November 18, 2021, the federal banking regulators issued the final rule regarding Computer-Security Incident Notification Requirements for Banking Organizations and Their Service Providers, which became effective April 1, 2022 and requires a bank to notify its primary federal regulator of certain cybersecurity incidents within thirty-six (36) hours after the bank determines that a cybersecurity incident has occurred.
In 2021, the federal banking regulators issued the interagency rule for Computer-Security Incident Notification Requirements for Banking Organizations and Their Service Providers, which became effective on April 1, 2022. The rule requires a bank to notify its primary federal regulator of certain cybersecurity incidents within thirty-six (36) hours after the bank determines that a cybersecurity incident has occurred.
Comerica and its bank subsidiaries, like other bank holding companies and banks, currently are required to maintain a minimum CET1 capital ratio, minimum Tier 1 capital ratio and minimum total capital ratio equal to at least 4.5 percent, 6 percent and 8 percent of their total risk-weighted assets (including certain off-balance-sheet items, such as unused commitments and standby letters of credit), respectively.
Bank holding companies and banks are currently required to maintain a CET1 capital ratio, Tier 1 capital ratio and total capital ratio equal to at least 4.5 percent, 6 percent and 8 percent of their total risk-weighted assets (including certain off-balance-sheet items, such as unused commitments and standby letters of credit), respectively.
The deposits of Comerica Bank and Comerica Bank & Trust, National Association are insured by the Deposit Insurance Fund (“DIF”) of the Federal Deposit Insurance Corporation (“FDIC”) to the extent provided by law, and therefore Comerica Bank and Comerica Bank & Trust, National Association are each also subject to regulation and examination by the FDIC.
The Bank's deposits, and those of Comerica Bank & Trust, National Association, are insured by the Deposit Insurance Fund (“DIF”) of the Federal Deposit Insurance Corporation (“FDIC”) to the fullest extent provided by law, and therefore the Bank and Comerica Bank & Trust, National Association are each also subject to regulation by the FDIC.
In considering applications for approval of acquisitions, the banking regulators may take several factors into account, including whether Comerica and its subsidiaries are well capitalized and well managed, are in compliance with anti-money laundering laws and regulations, or have CRA ratings of less than “Satisfactory.” Acquisitions of Ownership of Comerica Acquisitions of Comerica’s voting stock above certain thresholds are subject to prior regulatory notice or approval under federal banking laws, including the Bank Holding Company Act of 1956 and the Change in Bank Control Act of 1978.
In considering applications for approval of acquisitions, the banking regulators may take several factors into account, including whether the financial holding company and its subsidiaries are well capitalized and well managed, are in compliance with anti-money laundering laws and regulations, or have CRA ratings of less than “Satisfactory.” The Bank's current CRA rating is "Outstanding." 3 Table of Contents Acquisitions of Ownership of Comerica Acquisitions of Comerica’s voting stock above certain thresholds are subject to prior regulatory notice or approval under federal banking laws, including the Bank Holding Company Act of 1956 and the Change in Bank Control Act of 1978.
The privacy provisions of the Gramm-Leach-Bliley Act generally prohibit financial institutions, including Comerica and its subsidiaries, from disclosing nonpublic personal financial information of consumer customers to third parties for certain purposes (primarily marketing) unless customers have the opportunity to “opt out” of the disclosure.
The privacy provisions of the Gramm-Leach-Bliley Act generally prohibit financial institutions from disclosing nonpublic personal financial information of consumer customers to third parties for certain purposes (primarily marketing) unless customers have the opportunity to “opt out” of the disclosure.
As of December 31, 2022, Comerica owned directly or indirectly all the outstanding common stock of 2 active banking subsidiaries (Comerica Bank, a Texas banking association, and Comerica Bank & Trust, National Association) and 28 non-banking subsidiaries.
As of December 31, 2023, Comerica owned directly or indirectly all the outstanding common stock of 2 active banking subsidiaries (Comerica Bank, a Texas banking association, and Comerica Bank & Trust, National Association) as well as non-banking subsidiaries.
Under EGRRCPA bank holding companies with less than $100 billion of consolidated assets, including Comerica, are exempt from all of the Dodd-Frank enhanced prudential standards, except risk committee requirements.
Under EGRRCPA bank holding companies with less than $100 billion of consolidated assets, such as Comerica, became exempt from all of the Dodd-Frank enhanced prudential standards, except risk committee requirements.
To be well capitalized, Comerica’s bank subsidiaries are required to maintain a minimum leverage ratio, minimum CET1 capital ratio, minimum Tier 1 capital ratio and minimum total capital ratio equal to at least 5.0 percent, 6.5 percent, 8.0 percent and 10.0 percent, respectively.
To be well capitalized, banks are required to maintain a leverage ratio, CET1 capital ratio, Tier 1 capital ratio and total capital ratio equal to at least 5.0 percent, 6.5 percent, 8.0 percent and 10.0 percent, respectively.
At January 1, 2023, Comerica's subsidiary banks could declare aggregate dividends of approximately $506 million from retained net profits of the preceding two years. Comerica's subsidiary banks declared dividends of $1.0 billion in 2022, $852 million in 2021 and $498 million in 2020.
At January 1, 2024, Comerica's subsidiary banks could declare aggregate dividends of approximately $400 million from retained net profits of the preceding two years. Comerica's subsidiary banks declared dividends of $675 million in 2023, $1.0 billion in 2022 and $852 million in 2021.
As of December 31, 2022, Comerica’s U.S. colleagues had the following attributes: Female (%) Minority (%) Employees 64 42 Officials and Managers (1) 53 29 Executive Officers (2) 43 21 (1) Based on EEO-1 job classifications. (2) Using Securities and Exchange Commission definition.
As of December 31, 2023, Comerica’s U.S. colleagues had the following attributes: Female (%) Minority (%) Employees 63 43 Officials and Managers (1) 53 31 Executive Officers (2) 37 21 (1) Based on EEO-1 job classifications. (2) Using Securities and Exchange Commission definition.
This category of laws includes the Bank Secrecy Act, the Money Laundering Control Act, and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, or USA PATRIOT Act.
This category of laws includes the Currency and Foreign Transactions Reporting Act of 170, as amended (the "Bank Secrecy Act"), the Money Laundering Control Act, and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, or USA PATRIOT Act.
We provide information about the net interest income and noninterest income we received from our various classes of products and services: (1) under the caption, “Analysis of Net Interest Income” starting on page F- 4 of the Financial Section of this report; (2) under the caption “Rate/Volume Analysis” starting on page F- 5 of the Financial Section of this report; and (3) under the caption “Noninterest Income” starting on page F- 6 of the Financial Section of this report.
We provide information about the net interest income and noninterest income we received from our various classes of products and services: (1) under the caption, “Analysis of Net Interest Income” in the Financial Section of this report; (2) under the caption “Rate/Volume Analysis” in the Financial Section of this report; and (3) under the caption “Noninterest Income” in the Financial Section of this report.
For additional information specific to certain businesses within our commercial portfolio, please see the caption “Concentrations of Credit Risk" starting on page F- 20 of the Financial Section of this report.
For additional information specific to certain businesses within our commercial portfolio, please see the caption “Concentrations of Credit Risk" in the Financial Section of this report.
In 2018, with the passage of the Economic Growth, Regulatory Relief and Consumer Protection Act (“EGRRCPA”), as described below, there was some recalibration of the post-financial crisis framework; however, Comerica’s business remains subject to extensive regulation and supervision.
In 2018, with the passage of the Economic Growth, Regulatory Relief and Consumer Protection Act (“EGRRCPA”), as described below, there was some recalibration of the post-financial crisis framework; however, banks', bank holding companies' and financial institutions' businesses remain subject to extensive regulation and supervision.
In addition, Comerica’s non-banking subsidiaries are subject to supervision and regulation by various state, federal and self-regulatory agencies, including, but not limited to, the Financial Industry Regulatory Authority, Inc.
The FRB supervises non-banking activities conducted by companies directly and indirectly owned by Comerica. In addition, Comerica’s non-banking subsidiaries are subject to supervision and regulation by various state, federal and self-regulatory agencies, including, but not limited to, the Financial Industry Regulatory Authority, Inc.
At December 31, 2022, Comerica had total assets of approximately $85.4 billion, total deposits of approximately $71.4 billion, total loans of approximately $53.4 billion and shareholders’ equity of approximately $5.2 billion. Comerica has strategically aligned its operations into three major business segments: the Commercial Bank, the Retail Bank, and Wealth Management.
At December 31, 2023, Comerica had total assets of approximately $85.8 billion, total deposits of approximately $66.8 billion, total loans of approximately $52.1 billion and shareholders’ equity of approximately $6.4 billion. Comerica has strategically aligned its operations into three major business segments: the Commercial Bank, the Retail Bank, and Wealth Management.
Additionally, Comerica again received a perfect score of 100% on the Human Rights Campaign's Corporate Equality Index (for LGBTQ+ equality). There are ten Comerica Employee Resource Groups (ERGs), consisting of employees with common interests organized to promote professional development, social networking, awareness and inclusion, social impact and talent attraction and retention.
Human Rights Campaign's Corporate Equality Index (for LGBTQ+ equality) once again gave Comerica a perfect score of 100% in 2023. Comerica has thirteen Employee Resource Groups (ERGs), consisting of employees with common interests organized to promote professional development, social networking, awareness and inclusion, social impact and talent attraction and retention.
The rule defines what constitutes a reportable incident and also requires bank service providers to provide notice to their respective banking organization customers of certain cybersecurity incidents. Data privacy and data protection are areas of increasing state legislative focus.
The rule defines what constitutes a reportable incident and also requires bank service providers to provide notice to their respective banking organization customers of certain cybersecurity incidents.
Comerica Bank’s Canada branch is supervised by the Office of the Superintendent of Financial Institutions and its Mexico representative office is supervised by the Banco de México. Comerica Bank is also registered in the Cayman Islands and subject to supervision by the Cayman Islands Monetary Authority. The FRB supervises non-banking activities conducted by companies directly and indirectly owned by Comerica.
The Bank’s Canada branch is supervised by the Office of the Superintendent of Financial Institutions and its Mexico representative office is also supervised by the Banco de México. The Bank is also registered in the Cayman Islands and subject to supervision by the Cayman Islands Monetary Authority.
In 2022, over 9,900 skills-based titles were offered to Comerica colleagues and an average of around 25 hour s of training per employee were completed. Comerica also supports its employees’ involvement in external development programs and volunteerism.
In 2023, over 14,000 skills-based titles were offered to Comerica colleagues and an average of around 24 hours of training per employee were completed. Comerica also supports its employees’ involvement in external development programs and volunteerism.
Comerica is subject to competition with respect to various products and services, including, without limitation, commercial products such as loans and lines of credit, deposits, cash management (including payments solutions and card services), capital markets, international trade finance, letters of credit, foreign exchange management and loan syndications; consumer products such as loans, deposits and origination of mortgage loans and credit cards; and wealth management services such as fiduciary, private banking, retirement, securities-based lending, investment management and advisory, investment banking, brokerage and the sale of annuities and life, disability and long-term care insurance products.
Comerica is subject to competition with respect to various products and services, including, without limitation, commercial products such as loans and lines of credit, deposits, cash management (including payments solutions and card services), capital markets, international trade finance, letters of credit, foreign exchange management and loan syndications; consumer products such as loans, deposits and origination of mortgage loans and credit cards; and wealth management services such as comprehensive financial planning, trust and fiduciary services, investment management and advisory, brokerage, private banking, and business transition planning services.
Should Comerica cross the $100 billion asset threshold and thus become a Category IV firm, it will be subject to additional and more stringent regulation, which includes, but is not limited to, enhanced prudential standards for U.S. banking organizations with $100 to $250 billion of consolidated assets such as supervisory-run 2 Table of Contents stress testing; internal liquidity stress testing; and liquidity buffer requirements.
Should Comerica meet or cross the $100 billion asset threshold and thus become a Category IV institution it will be subject to additional and more stringent regulation, which includes, but is not limited to, enhanced prudential standards for U.S. banking organizations with $100 to $250 billion of consolidated assets.
Economic Growth, Regulatory Relief and Consumer Protection Act On May 24, 2018, EGRRCPA was signed into law. Among other regulatory changes, EGRRCPA amended various sections of the Dodd-Frank Act, including section 165 of Dodd-Frank Act, which was revised to raise the asset thresholds for determining the application of enhanced prudential standards for bank holding companies.
Among other regulatory changes, EGRRCPA amended various sections of the Dodd-Frank Act, including section 165 of Dodd-Frank Act, which was revised to raise the asset thresholds for determining the application of enhanced prudential standards for bank holding companies.
As of December 31, 2022, Comerica and its subsidiaries had 7,280 full-time and 369 part-time employees, primarily located in Comerica’s core markets of Michigan, Texas, California, Arizona and Florida.
As of December 31, 2023, Comerica and its subsidiaries had 7,496 full-time and 367 part-time employees, primarily located in Comerica’s primary markets of Michigan, Texas, California, Arizona, Florida and North Carolina.
Under the current system, premiums are assessed quarterly and could increase if, for example, criticized loans and/or other higher risk assets increase or balance sheet liquidity decreases. For 2022, Comerica’s FDIC insurance expense totaled $31 million.
Under the current system, premiums are 7 Table of Contents assessed quarterly and could increase if, for example, criticized loans and/or other higher risk assets increase or balance sheet liquidity decreases, or a bank's supervisory ratings worsen. For 2023, Comerica’s FDIC insurance expense totaled $180 million.
Comerica believes that the level of competition in all geographic markets will continue to increase in the future. SUPERVISION AND REGULATION Banks, bank holding companies, and financial institutions are highly regulated at both the state and federal level.
Finally, the industry continues to consolidate, which eliminates some regional and local institutions, while potentially strengthening acquirers. Comerica believes that the level of competition in all geographic markets will continue to increase in the future. SUPERVISION AND REGULATION Banks, bank holding companies, and other financial institutions are highly regulated at both the state and federal level.
Accordingly, Comerica aims to attract, develop and retain employees who can drive financial and strategic growth objectives and build long-term shareholder value. Key items related to Comerica’s human capital resources are described below. Structure .
HUMAN CAPITAL RESOURCES Comerica’s relationship banking strategy relies heavily on the personal relationships and the quality of service provided by employees. Accordingly, Comerica aims to attract, develop and retain employees who can drive financial and strategic growth objectives and build long-term shareholder value. Key items related to Comerica’s human capital resources are described below. Structure .
The initial margin requirements were issued for the purpose of ensuring safety and soundness of swap trading in light of the risk to the financial system associated with non-cleared swaps activity. 9 Table of Contents Consumer Financial Protection Bureau and Certain Recent Consumer Finance Regulations Comerica is subject to regulation by the CFPB, which has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions and possesses examination and enforcement authority over all banks and savings institutions with more than $10 billion in assets, including Comerica Bank, and their depositary affiliates.
Consumer Financial Protection Bureau and Certain Recent Consumer Finance Regulations Comerica is subject to regulation by the CFPB, which has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions and possesses examination and enforcement authority over all banks and savings institutions with more than $10 billion in assets, including the Bank, and their depository affiliates.
Use of such data is regulated under the Fair Credit Reporting Act (“FCRA”), and the FCRA also regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates, and using affiliate data for marketing purposes.
Like other lenders, the Bank and other of Comerica’s subsidiaries use credit bureau data in their underwriting activities. Use of such data is regulated under the FCRA and the FCRA also regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates, and using affiliate data for marketing purposes.
As of December 31, 2022, each of Comerica’s bank subsidiaries’ capital ratios exceeded those required for an institution to be considered “well capitalized” under these regulations. As an additional means to identify problems in the financial management of depository institutions, FDICIA requires federal bank regulatory agencies to establish certain non-capital-based safety and soundness standards for institutions any such agency supervises.
As an additional means to identify problems in the financial management of depository institutions, FDICIA requires federal bank regulatory agencies to establish certain non-capital-based safety and soundness standards for institutions any such agency supervises.
Comerica prices credit facilities to reflect risk, the related costs and the expected return, while maintaining competitiveness with other financial institutions. Loans with variable and fixed rates are underwritten to achieve expected risk-adjusted returns on the credit facilities and for the full relationship including the borrower's ability to repay the principal and interest based on such rates.
Loans with variable and fixed rates are underwritten to achieve expected risk- 11 Table of Contents adjusted returns on the credit facilities and for the full relationship including the borrower's ability to repay the principal and interest based on such rates.
Both the scope of the laws and regulations and intensity of supervision to which Comerica’s business is subject continue to increase in response to the financial crisis as well as other factors such as technological, economic and market changes.
Both the scope of the laws and regulations and intensity of supervision to which banks', bank holding companies' and financial institutions' businesses are subject continue to increase in response to the 2007-2008 financial crisis, subsequent events, and other factors such as technological, economic and market changes.
In addition to the three major business segments, Finance is also reported as a segment. Comerica operates in three primary geographic markets - Texas, California, and Michigan, as well as in Arizona and Florida, with select businesses operating in several other states, and in Canada and Mexico.
In addition to the three major business segments, Finance is also reported as a segment. Comerica operates in five primary geographic markets - Texas, California, Michigan, Arizona and Florida - and secondarily in several mountain, southeastern, and other states, and in Canada and Mexico. In 2023, Comerica announced a strategic relationship with Ameriprise to become Comerica’s new investment program provider.
Consumer and Residential Mortgage Loan Portfolios Comerica's consumer and residential mortgage loan underwriting includes an assessment of each borrower's personal financial condition, including a review of credit reports and related FICO scores (a type of credit score used to assess an applicant's credit risk) and verification of income and assets, as applicable.
For additional information specific to our CRE loan portfolio, please see the caption “Commercial Real Estate Lending” in the Financial Section of this report. 12 Table of Contents Consumer and Residential Mortgage Loan Portfolios Comerica's consumer and residential mortgage loan underwriting includes an assessment of each borrower's personal financial condition, including a review of credit reports and related FICO scores (a type of credit score used to assess an applicant's credit risk) and verification of income and assets, as applicable.
Federal and state laws impose notice and approval requirements for mergers and acquisitions of other depository institutions or bank holding companies. In many cases, no FRB approval is required for Comerica to acquire a company engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the FRB.
In many cases, no FRB approval is required for a financial holding company to acquire a company engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the FRB.
Comerica carefully manages the size of its workforce and reallocates resources as needed. As of December 31, 2022, Comerica’s total employee headcount, on a full-time equivalent basis, was 16 percent lower than as of December 31, 2015. Additionally, for 2022, Comerica managed an average of $17 million of loans and deposits per employee. Diversity .
As of December 31, 2023, Comerica’s total employee headcount, on a full-time equivalent basis, was 13 percent lower than as of December 31, 2015. Additionally, for 2023, Comerica managed an average of $16 million of loans and deposits per employee. Diversity Comerica has an organization-wide focus on an inclusive workforce that resembles the communities that it serves.
Comerica’s Chief Human Resources Officer reports directly to the Chairman, President and CEO and manages all aspects of the employee experience, including talent acquisition, diversity and inclusion, learning and development, talent management, compensation and benefits. 11 Table of Contents The Governance, Compensation and Nominating Committee of the Board is tasked with reviewing Comerica’s human capital management strategy and talent development program, including recruitment, evaluations and development activities.
Comerica’s Chief Administrative Officer and Chief Human Resources Officer reports directly to the Chairman, President and CEO and manages all aspects of the employee experience, including talent acquisition, diversity and inclusion, learning and development, talent management, compensation and benefits.
Residential mortgage loans retained in the portfolio are largely relationship based. The remaining loans are typically eligible to be sold on the secondary market. Adjustable-rate loans are limited to standard conventional loan programs.
Residential mortgage loans retained in the portfolio are largely relationship based. The remaining loans are typically eligible to be sold on the secondary market. Adjustable-rate loans are limited to standard conventional loan programs. For additional information specific to our residential real estate loan portfolio, please see the caption “Residential Real Estate Lending” in the Financial Section of this report.
The Gramm-Leach-Bliley Act also requires banks to implement a comprehensive information security program that includes administrative, technical and physical safeguards to ensure the security and confidentiality of customer records and information.
The Gramm-Leach-Bliley Act also requires banks to implement a comprehensive information security program that includes administrative, technical and physical safeguards to ensure the security and confidentiality of customer records and information. Federal banking and securities regulations also impose certain requirements on Comerica and its subsidiary banks in the event of a cyber- or computer-related security incident.
Comerica and its bank subsidiaries must maintain a CET1 capital conservation buffer of 2.5% to avoid becoming subject to restrictions on capital distributions, including dividends. Furthermore, federal regulatory agencies can prohibit a bank or bank holding company from paying dividends under circumstances in which such payment could be deemed an unsafe and unsound banking practice.
Furthermore, federal regulatory agencies can prohibit a bank or bank holding company from paying dividends under circumstances in which such payment could be deemed an unsafe and unsound banking practice.
The ERGs help support and sustain Comerica's diversity and inclusion model. These groups include Comerica African American Network; Comerica Asian Indian Association; Comerica Asian and Pacific Islander; European Connection; Mi Gente; PRISM – LGBTQ+; Quantitative Professionals; Veteran’s Leadership Network; Women’s Forum and Young Professionals. Compensation and Benefits .
These groups include All Abilities and Allies; Comerica African American Network; Comerica Asian and Pacific Islander Network; Comerica Asian Indian Association; Comerica Young Professionals Network; Comerica Quantitative Professionals Network; Jewish Heritage; PRISM – LGBTQ+; Mi Gente; The European Connection; Veteran’s Leadership Network; Women’s Forum; and Women in Technology. 13 Table of Contents Compensation and Benefits .
As a financial holding company, Comerica may affiliate with securities firms and insurance companies, and engage in activities that are financial in nature or incidental or complementary to activities that are financial in nature.
Requirements for Approval of Activities and Acquisitions The Gramm-Leach-Bliley Act expanded the activities in which a bank holding company registered as a financial holding company can engage. A financial holding company may affiliate with securities firms and insurance companies and engage in activities that are financial in nature or incidental or complementary to activities that are financial in nature.
For example, the California Consumer Privacy Act of 2018 (the “CCPA”), which became effective on January 1, 2020, applies to for-profit businesses that conduct business in California and meet certain revenue or data collection thresholds.
Data privacy and data protection are also areas of increasing state legislative focus. For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (collectively, the “CCPA”), applies to for-profit businesses that conduct business in California and meet certain revenue or data collection thresholds.
Because non-banks are not subject to many of the same regulatory restrictions as banks and bank holding companies, they can often operate with greater flexibility and lower cost structures. 1 Table of Contents Finally, the industry continues to consolidate, which eliminates some regional and local institutions, while potentially strengthening acquirers.
The ability of non-banks to provide services previously limited to traditional banks has intensified competition. Because non-banks are not subject to many of the same 1 Table of Contents regulatory restrictions as banks and bank holding companies, they can often operate with greater flexibility and lower cost structures.
In addition, they compete throughout the continental U.S., Mexico and Canada as they pursue certain businesses on a national scale that fall outside of the primary markets, such as U.S. Banking, Mortgage Banker, Environmental Services and National Dealer Services. They have strategically placed offices in faster growing markets where there is a concentration of customers and industries they serve.
COMPETITION The financial services business is highly competitive. Comerica and its subsidiaries mainly compete in their primary and secondary geographic markets, and also compete throughout the continental U.S., Mexico and Canada as they pursue certain businesses on a national scale that fall outside of the primary markets, such as U.S. Banking, Mortgage Banker, Environmental Services and National Dealer Services.
Resolution Plans As a depository institution with $50 billion or more of total consolidated assets, Comerica Bank is required to periodically file a resolution plan with the FDIC.
Regulatory and supervisory scrutiny of regional banking organizations has recently increased as a result of the bank failures in the spring of 2023. 9 Table of Contents Resolution Plans As a depository institution with $50 billion or more of total consolidated assets, the Bank is required to periodically file a resolution plan with the FDIC.
Comerica was recognized in 2022 as a Best Employer for Women by Forbes, included on Newsweek’s 2023 list of America’s Greatest Workplaces for Diversity and received five stars – the highest marking – in the category of governance as part of the 2022 Hispanic Association on Corporate Responsibility Corporate Inclusion Index.
Forbes recognized Comerica as "One of Dallas-Fort Worth's Top Workplaces." Newsweek listed Comerica in its 2024 list of America’s Greatest Workplaces for Diversity. The Hispanic Association on Corporate Responsibility rated Comerica with five stars – the highest marking – in the category of governance in its 2023 Corporate Inclusion Index.
Bank holding companies also are required to consult with the FRB before redeeming or repurchasing capital instruments, or materially increasing dividends. 5 Table of Contents Transactions with Affiliates Federal banking laws and regulations impose qualitative standards and quantitative limitations upon certain transactions between a bank and its affiliates, including between Comerica and its nonbank subsidiaries, on the one hand, and Comerica’s affiliate insured depository institutions, on the other.
Transactions with Affiliates Federal banking laws and regulations impose qualitative standards and quantitative limitations upon certain transactions between a bank and its affiliates, on the one hand, and Comerica’s affiliate insured depository institutions, on the other.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese inflationary pressures could result in missed earnings and budgetary projections causing Comerica's stock price to suffer. • Methods of reducing risk exposures might not be effective. Instruments, systems and strategies used to hedge or otherwise manage exposure to various types of credit, market, liquidity, technology, operational, compliance, financial reporting and strategic risks could be less effective than anticipated.
Biggest changeInstruments, systems and strategies used to hedge or otherwise manage exposure to various types of credit, market, liquidity, technology, operational, compliance, financial reporting and strategic risks could be less effective than anticipated. The Corporation's enterprise risk management framework provides a process for identifying, measuring, controlling and managing risks, and Comerica's management expends significant effort and resources in risk management.
Although Comerica has programs in place related to business continuity, disaster recovery and information security to maintain the confidentiality, integrity and availability of its systems, business applications and customer information, such disruptions may still give rise to interruptions in service to customers and loss or liability to Comerica, including loss of customer data.
Although Comerica has programs in place related to business continuity, disaster recovery and information security to maintain the confidentiality, integrity and availability of its systems, business applications and customer information, such disruptions may still give rise to interruptions in service to customers and loss or liability to Comerica, including loss of customer data.
Comerica's stock price can fluctuate significantly in response to a variety of factors including, among other things: • Actual or anticipated variations in quarterly results of operations. • Recommendations or projections by securities analysts. • Operating and stock price performance of other companies that investors deem comparable to Comerica. 23 Table of Contents • News reports relating to trends, concerns and other issues in the financial services industry. • Perceptions in the marketplace regarding Comerica and/or its competitors. • New technology used, or services offered, by competitors. • Significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving Comerica or its competitors. • Changes in dividends and capital returns. • Changes in government regulations. • Cyclical fluctuations. • Geopolitical conditions such as acts or threats of terrorism or military conflicts. • Activity by short sellers and changing government restrictions on such activity.
Comerica's stock price can fluctuate significantly in response to a variety of factors including, among other things: • Actual or anticipated variations in quarterly results of operations. • Recommendations or projections by securities analysts. • Operating and stock price performance of other companies that investors deem comparable to Comerica. • News reports relating to trends, concerns and other issues in the financial services industry. • Perceptions in the marketplace regarding Comerica and/or its competitors. • New technology used, or services offered, by competitors. • Significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving Comerica or its competitors. • Changes in dividends and capital returns. • Changes in government regulations. • Cyclical fluctuations. • Geopolitical conditions such as acts or threats of terrorism or military conflicts. • Activity by short sellers and changing government restrictions on such activity.
The occurrence of any failure or interruption in Comerica's operations or information systems, or any security breach, could cause reputational damage, jeopardize the confidentiality of customer information, result in a loss of customer business, subject Comerica to regulatory intervention or expose it to civil litigation and financial loss or liability, any of which could have a material adverse effect on Comerica. • Comerica relies on other companies to provide certain key components of its delivery systems, and certain failures could materially adversely affect operations.
The occurrence of any failure or interruption in Comerica's operations or information systems, or any security breach, could cause reputational damage, jeopardize the confidentiality of customer information, result in a loss of customer business, subject Comerica to regulatory intervention or expose it to civil litigation and financial loss or liability, any of which could have a material adverse effect on Comerica. 19 Table of Contents • Comerica relies on other companies to provide certain key components of its delivery systems, and certain failures could materially adversely affect operations.
Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material adverse impact on Comerica's business, financial condition or results of operations. The impact of any future legislation or regulatory actions may adversely affect Comerica's businesses or operations.
Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, legislation, changed interpretations or supervisory action, may have a material adverse impact on Comerica's business, financial condition or results of operations. The impact of any future legislation or regulatory actions may adversely affect Comerica's businesses or operations.
Comerica’s liquidity and ability to fund and run its business could be materially adversely affected by a variety of conditions and factors, including financial and credit market disruptions and volatility, a lack of market or customer confidence in financial markets in general, or deposit competition based on interest rates, which may result in a loss of customer deposits or outflows of cash or collateral and/or adversely affect Comerica's ability to access capital markets on favorable terms.
Comerica’s liquidity and ability to fund and run its business could be materially adversely affected by a variety of conditions and factors, including financial and credit market disruptions and volatility, a lack of market or customer confidence in financial markets in general, or deposit competition based on interest rates, which may result in a loss of 16 Table of Contents customer deposits or outflows of cash or collateral and/or adversely affect Comerica's ability to access capital markets on favorable terms.
If Comerica is unable to compete effectively in products and pricing in its markets, business could decline, which could have a material adverse effect on Comerica's business, financial condition or results of operations. 20 Table of Contents • 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.
If Comerica is unable to compete effectively in products and pricing in its markets, business could decline, which could have a material adverse effect on Comerica's business, financial condition or results of operations. • 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.
Additionally, certain segments of the commercial real estate industry have been under pressure due to rapidly rising interest rates, shifts in demand ( i.e., office, retail), labor and materials shortages and capital markets volatility. Finally, energy prices continued to fluctuate in 2022, and energy companies are expected to experience environmental pressure over the long-term.
Additionally, certain segments of the commercial real estate industry have been under pressure due to rapidly rising interest rates, shifts in demand ( i.e., office, retail), labor and materials shortages and capital markets volatility. Finally, energy prices continue to fluctuate and energy companies are expected to experience environmental pressure over the long-term.
Several states have also proposed or adopted cybersecurity legislation and regulations, which require, among other things, notification to affected individuals when there has been a security breach of their personal data. For more information regarding cybersecurity regulation, refer to the “Supervision and Regulation” section of this report.
Several states have also proposed or adopted cybersecurity legislation and regulations, which require, among other things, 18 Table of Contents notification to affected individuals when there has been a security breach of their personal data. For more information regarding cybersecurity regulation, refer to the “Supervision and Regulation” section of this report.
Failure to create new customer relationships and to maintain and expand existing customer relationships to the extent anticipated may adversely impact Comerica's earnings. • Management's ability to retain key officers and employees may change. Comerica's future operating results depend substantially upon the continued service of its executive officers and key personnel.
Failure to create new 22 Table of Contents customer relationships and to maintain and expand existing customer relationships to the extent anticipated may adversely impact Comerica's earnings. • Management's ability to retain key officers and employees may change. Comerica's future operating results depend substantially upon the continued service of its executive officers and key personnel.
Further, as a result of the increased sophistication of fraud 18 Table of Contents activity, Comerica continues to invest in systems, resources, and controls to detect and prevent fraud. This will result in continued ongoing investments in the future. • Controls and procedures may not prevent or detect all errors or acts of fraud.
Further, as a result of the increased sophistication of fraud activity, Comerica continues to invest in systems, resources, and controls to detect and prevent fraud. This will result in continued ongoing investments in the future. • Controls and procedures may not prevent or detect all errors or acts of fraud.
As a result, Comerica may not be able to effectively mitigate its risk exposures in particular market environments or against particular types of risk, which could have a material adverse impact on Comerica's business, financial condition or results of operations.
Nevertheless, Comerica may not be able to effectively mitigate its risk exposures in particular market environments or against particular types of risk, which could have a material adverse impact on Comerica's business, financial condition or results of operations.
Comerica relies on its employees and third parties in its day-to-day and ongoing operations, who may, as a result of human error, misconduct, malfeasance or failure, or breach of Comerica’s or of third-party systems or infrastructure, 17 Table of Contents expose Comerica to risk.
Comerica relies on its employees and third parties in its day-to-day and ongoing operations, who may, as a result of human error, misconduct, malfeasance or failure, or breach of Comerica’s or of third-party systems or infrastructure, expose Comerica to risk.
Treasury, the Texas Department of Banking, the FDIC, the FRB, the OCC, the CFPB, the CFTC, the SEC, FINRA, DOL, MSRB and other regulatory bodies. Such regulation and supervision governs and limits the activities in which Comerica may engage.
Treasury, the Texas Department of Banking, the FDIC, the FRB, the OCC, the CFPB, the CFTC, the SEC, FINRA, DOL, MSRB and other regulatory 20 Table of Contents bodies. Such regulation and supervision governs and limits the activities in which Comerica may engage.
Further, adverse publicity or negative information posted on social media websites regarding Comerica, whether or not true, may result in harm to Comerica’s prospects. • Comerica may not be able to utilize technology to efficiently and effectively develop, market, and deliver new products and services to its customers.
Further, adverse publicity or negative information posted on social media websites regarding Comerica, whether or not true, may result in harm to Comerica’s prospects. 21 Table of Contents • Comerica may not be able to utilize technology to efficiently and effectively develop, market, and deliver new products and services to its customers.
Further, cyber attacks may not be detected in a timely manner. 16 Table of Contents Cyber attacks or other information or security breaches, whether directed at Comerica or third parties, may result in a material loss or have material consequences.
Further, cyber attacks may not be detected in a timely manner. Cyber attacks or other information or security breaches, whether directed at Comerica or third parties, may result in a material loss or have material consequences.
For more information, please see "Leveraged Loans” starting on page F- 23 of the Financial Section of this report and "Automotive Lending - Production" starting on page F- 22 of the Financial Section of this report. • Declines in the businesses or industries of Comerica's customers could cause increased credit losses or decreased loan balances, which could adversely affect Comerica.
For more information, please see "Leveraged Loans” and "Automotive Lending - Production" in of the Financial Section of this report. • Declines in the businesses or industries of Comerica's customers could cause increased credit losses or decreased loan balances, which could adversely affect Comerica.
Volatility in interest rates can also result in disintermediation, which is the flow of funds away from financial institutions into direct investments, such as federal government and corporate securities and other investment vehicles, which, because of the absence of federal insurance premiums and reserve requirements, generally pay higher rates of return than financial institutions.
Volatility in interest rates can also result in disintermediation, which is the flow of funds away from financial institutions into direct investments, such as federal government and corporate securities and other investment vehicles, which generally pay higher rates of return than financial institutions.
The Federal Reserve raised interest rates seven times in 2022; if the Federal Reserve lowers interest rates in the future, it will adversely affect the interest income Comerica earns on loans and investments.
The Federal Reserve raised interest rates four times in 2023; if the Federal Reserve lowers interest rates in the future, it will adversely affect the interest income Comerica earns on loans and investments.
For more information regarding risk management, please see "Risk Management" starting on page F- 15 of the Financial Section of this report. • Catastrophic events, including pandemics, may adversely affect the general economy, financial and capital markets, specific industries, and Comerica.
For more information regarding risk management, please see "Risk Management" in the Financial Section of this report. • Catastrophic events, including pandemics, may adversely affect the general economy, financial and capital markets, specific industries, and Comerica.
The words, “anticipates,” “believes,” “contemplates,” “feels,” “expects,” “estimates,” “seeks,” “strives,” “plans,” “intends,” “outlook,” “forecast,” “position,” “target,” “mission,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “opportunity,” “initiative,” “outcome,” “continue,” “remain,” “maintain,” “on track,” “trend,” “objective,” “looks forward,” “projects,” “models” and variations of such words and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, as they relate to Comerica or its management, are intended to identify forward-looking statements.
The words, “anticipates,” “believes,” “contemplates,” “feels,” “expects,” “estimates,” “seeks,” “strives,” “plans,” “intends,” “outlook,” “forecast,” “position,” “target,” “mission,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “opportunity,” “initiative,” “outcome,” “continue,” “remain,” “maintain,” “on track,” “trend,” “objective,” “looks forward,” “projects,” “models” and variations of such words and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, as they relate to Comerica or its management, are intended to identify forward-looking statements. 14 Table of Contents Comerica cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time.
Despite efforts to ensure the integrity of Comerica’s systems and implement controls, processes, policies and other protective measures, Comerica may not be able to anticipate all security breaches, nor may it be able to implement guaranteed preventive measures against such security breaches.
Despite efforts to ensure the integrity of Comerica’s systems and implement controls, processes, policies and other protective measures, Comerica may not be able to anticipate all security breaches. Nor may it (or the third parties whose systems we rely upon) be able to implement guaranteed preventive measures against such security breaches.
Rating agencies regularly evaluate Comerica, and their ratings are based on a number of factors, including Comerica's financial strength as well as factors not entirely within its control, such as conditions affecting the financial services industry generally. There can be no assurance that Comerica will maintain its current ratings.
Rating agencies regularly evaluate Comerica, and their ratings are based on a number of factors, including Comerica's financial strength as well as factors not entirely within its control, such as conditions affecting the financial services industry generally.
For more information regarding certain of Comerica's lines of business, please see "Concentrations of Credit Risk," "Commercial Real Estate Lending," "Automotive Lending - Dealer," "Automotive Lending - Production," "Residential Real Estate Lending," and “Energy Lending” starting on page F- 20 of the Financial Section of this report.
For more information regarding certain of Comerica's lines of business, please see "Concentrations of 15 Table of Contents Credit Risk," "Commercial Real Estate Lending," "Automotive Lending - Dealer," "Automotive Lending - Production," "Residential Real Estate Lending," and “Energy Lending” in the Financial Section of this report.
Further, catastrophic events may have an impact on Comerica's customers and in turn, on Comerica. 22 Table of Contents In addition, these events have had and may continue to have an adverse impact on the U.S. and world economy in general and consumer confidence and spending in particular, which could harm Comerica's operations.
In addition, these events have had and may continue to have an adverse impact on the U.S. and world economy in general and consumer confidence and spending in particular, which could harm Comerica's operations.
Additionally, if Comerica is unable to continue to fund assets through customer bank deposits or access funding sources on favorable terms, or if Comerica suffers an increase in borrowing costs or otherwise fails to manage liquidity effectively, Comerica’s liquidity, operating margins, financial condition and results of operations may be materially adversely affected. 15 Table of Contents • Reduction in our credit ratings could adversely affect Comerica and/or the holders of its securities.
Additionally, if Comerica is for these or any other reason unable to continue to fund assets through customer bank deposits or access funding sources on favorable terms, or if Comerica suffers an increase in borrowing costs or otherwise fails to manage liquidity effectively, Comerica’s liquidity, operating margins, financial condition and results of operations may be materially adversely affected.
Comerica may become subject to new legislation or regulation concerning cybersecurity or the privacy of personally identifiable information and personal financial information or of any other information Comerica may store or maintain.
For more information regarding data privacy regulation, refer to the “Supervision and Regulation” section of this report. Comerica may become subject to new legislation or regulation concerning cybersecurity or the privacy of personally identifiable information and personal financial information or of any other information Comerica may store or maintain.
Under such circumstances, as occurred during the COVID-19 pandemic, Comerica could experience an increase in the 13 Table of Contents level of provision for credit losses and reserve for credit losses, which could adversely affect Comerica's financial results.
Under such circumstances, as occurred during and as a result of the COVID-19 pandemic and may reoccur due to other pandemics or crises, Comerica could experience an increase in the level of provision for credit losses and reserve for credit losses, which could adversely affect Comerica's financial results.
See “Critical Accounting Estimates” starting on page F- 31 of the Financial Section of this report and Note 1 of the Notes to Consolidated Financial Statements starting on page F- 43 of the Financial Section of this report. • Comerica's stock price can be volatile.
See “Critical Accounting Estimates” in the Financial Section of this report and Note 1 of the Notes to Consolidated Financial Statements in the Financial Section of this report. 25 Table of Contents • Comerica's stock price can be volatile.
For the above and other reasons, the market price of Comerica's securities may not accurately reflect the underlying value of the securities, and investors should consider this before relying on the market prices of Comerica's securities when making an investment decision. Item 1B. Unresolved Staff Comments. None.
For the above and other reasons, the market price of Comerica's securities may not accurately reflect the underlying value of the securities, and investors should consider this before relying on the market prices of Comerica's securities when making an investment decision. • An investment in Comerica's equity securities is not insured or guaranteed by the FDIC.
Further, Comerica's customers may be adversely impacted by such conditions, which could have a negative impact on Comerica's business, financial condition and results of operations.
Comerica has a high percentage of uninsured deposits and relies on its deposit base for liquidity. Further, Comerica's customers may be adversely impacted by such conditions, which could have a negative impact on Comerica's business, financial condition and results of operations.
Maintaining higher levels of capital may reduce Comerica's profitability and otherwise adversely affect its business, financial condition, or results of operations. • Tax regulations could be subject to potential legislative, administrative or judicial changes or interpretations. Federal income tax treatment of corporations may be clarified and/or modified by legislative, administrative or judicial changes or interpretations at any time.
Maintaining higher levels of capital may reduce Comerica's profitability and otherwise adversely affect its business, financial condition, or results of operations. • Changes to tax law or regulations, or changes to administrative or judicial interpretations of tax law regulations, could adversely affect Comerica.
CREDIT RISK • Changes in customer behavior due to outside factors may adversely impact Comerica's business, financial condition and results of operations.
CREDIT RISK • Changes in customer behavior due to outside factors may adversely impact Comerica's business, financial condition and results of operations. As a financial institution, the Corporation's principal activity is lending to and accepting deposits from businesses and individuals.
Because of the uncertainty surrounding management's judgments and the estimates pertaining to these matters, Comerica cannot guarantee that it will not be required to adjust accounting policies or restate prior period financial statements.
Because of the uncertainty surrounding management's judgments and the estimates pertaining to these matters, Comerica cannot guarantee that it will not be required to adjust accounting policies or restate prior period financial statements. For example, our allowances for credit losses, fair value measurement, goodwill valuation and impairment, pension plan accounting, and provisions for income taxes may prove faulty or inaccurate.
Local, domestic, and international events including economic, financial market, political and industry-specific conditions affect the financial services industry, directly and indirectly. The economic environment and market conditions in which Comerica operates continue to be uncertain.
GENERAL RISK • General political, economic or industry conditions, either domestically or internationally, may be less favorable than expected. Economic, financial market, political, and industry-specific developments may affect the financial services industry, both directly and indirectly. The economic environment and market conditions in which Comerica operates, at the local, domestic, and international levels, continue to be uncertain.
COVID-19 or other potential epidemics or pandemics, have the potential to negatively impact Comerica's and/or its clients’ costs, demand for its clients’ products, and/or the U.S. economy or certain sectors thereof and, thus, adversely affect Comerica's business, financial condition, and results of operations.
These potential events may 24 Table of Contents negatively impact Comerica's and/or its clients’ costs, demand for its clients’ products, and/or the U.S. economy or certain sectors thereof and, thus, adversely affect Comerica's business, financial condition, and results of operations. Further, catastrophic events may have an impact on Comerica's customers and in turn, on Comerica.
Additionally, some of Comerica's loan portfolios have higher risk profiles relative to the rest of our portfolio, such as Technology and Life Sciences, automotive production and the leveraged transactions book.
Additionally, some of Comerica's loan portfolios have higher risk profiles relative to the rest of our portfolio, such as Technology and Life Sciences, automotive production and the leveraged transactions book. These loan portfolios have higher levels of criticized loans than the general population, and further migration could lead to an adverse effect on credit metrics and Comerica's financial results.
Further, while Comerica has taken steps to reduce its interest rate sensitivity, those actions, such as the execution of Comerica's hedging strategy, do not fully eliminate interest rate risk.
Further, while Comerica has taken steps to reduce its interest rate sensitivity, those actions, such as the execution of Comerica's hedging strategy, do not fully eliminate interest rate risk. For a discussion of Comerica's interest rate sensiti vity and risk management strategies, please see, “Market and Liquidi ty Risk” in the Financial Section of this report.
Recently Comerica expanded its presence in the Southeastern and Mountain West regions of the U.S. If Comerica's expansion is not successful, it could adversely impact Comerica's expenses. • Management's ability to maintain and expand customer relationships may differ from expectations. The financial services industry is very competitive.
Comerica has expanded its presence in the Southeastern and Mountain West regions of the U.S.; if Comerica's expansion is not successful, it could adversely impact Comerica's expenses.
Comerica cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date the statement is made, and Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made.
Forward-looking statements speak only as of the date the statement is made, and Comerica does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.
Further, Comerica may be subject to heightened expectations, which could result in additional regulatory scrutiny, higher penalties, and more severe consequences if it is unable to meet those expectations. • Compliance with stringent capital requirements may adversely affect Comerica. Comerica is required to satisfy stringent regulatory capital standards, as set forth in the “Supervision and Regulation” section of this report.
Further, Comerica may be subject to heightened expectations, which could result in additional regulatory scrutiny, higher penalties, and more severe consequences if it is unable to meet those expectations.
Both personally identifiable information and personal financial information is increasingly subject to legislation and regulation, the intent of which is to protect the privacy of personal information that is collected and handled.
Both personally identifiable information and personal financial information is increasingly subject to legislation and regulation, the intent of which is to protect the privacy of personal information that is collected and handled. For example, the CCPA applies to for-profit businesses that conduct business in California and meet certain revenue or data collection thresholds, including Comerica.
Comerica's funding costs may increase if it raises deposit rates to avoid losing customer deposits, or if it loses customer deposits and must rely on more expensive sources of funding. In 2022, interest expense increased $149 million from 2021, due to a rising rate environment. Higher funding costs will reduce Comerica's net interest margin and net interest income.
Deposits make up a large portion of Comerica’s funding portfolio. Comerica's funding costs may increase if it raises deposit rates to avoid losing customer deposits, as we did in 2023, or if it loses customer deposits and must rely on more expensive sources of funding.
Comerica would be subject to similar risks and difficulties in connection with any future decisions to downsize, sell or close units or otherwise change the business mix of Comerica. 21 Table of Contents GENERAL RISK • General political, economic or industry conditions, either domestically or internationally, may be less favorable than expected.
These matters could have an adverse effect on Comerica for an undetermined period. Comerica would be subject to similar risks and difficulties in connection with any future decisions to downsize, sell or close units or otherwise change the business mix of Comerica.
Conditions related to inflation, recession, unemployment, volatile interest rates, international conflicts, changes in trade policies and other factors, such as real estate values, energy prices, state and local municipal budget deficits, government spending and the U.S. national debt, outside of our control may, directly and indirectly, adversely affect Comerica. • Inflation could negatively impact Comerica's business, profitability and stock price.
Furthermore, changes in trade policies or other economic policies, state and local municipal finances, federal government finances and the U.S. federal debt, are outside of our control and may affect the operating environment affecting Comerica. • Inflation could negatively impact Comerica's business, profitability and stock price.
LIQUIDITY RISK • Comerica must maintain adequate sources of funding and liquidity to meet regulatory expectations, support its operations and fund outstanding liabilities.
Further, Comerica’s transition could prompt inquiries or other actions from regulators. It could also result in disputes with counterparties regarding the terms of the arrangements Comerica seeks to change . LIQUIDITY RISK • Comerica must maintain adequate sources of funding and liquidity to meet regulatory expectations, support its operations and fund outstanding liabilities.
Any such changes could adversely affect Comerica, either directly, or indirectly as a result of effects on Comerica's customers.
Federal income tax treatment of corporations may be clarified and/or modified by legislative, administrative or judicial changes or interpretations at any time. Any such changes could adversely affect Comerica, either directly, or indirectly as a result of effects on Comerica's customers. STRATEGIC RISK • Damage to Comerica’s reputation could damage its businesses.
In addition, COVID-19 and concerns regarding the extent to which it may continue to spread, including the currently discovered and potential future variants of COVID-19, have affected, and may increasingly affect, international trade (including supply chains and export levels), travel, employee productivity, and other economic activities.
Dangerous, potentially deadly, and easily-transmitted viruses and other pathogens, and government and social reactions to such epidemics and pandemics have affected, and may again affect, international trade (including supply chains and export levels), travel, employee productivity, and other economic activities.
The U.S. economy is facing headwinds from recessionary pressures, surging interest rates, high inflation, the end of fiscal stimulus, lower housing market activity and weak export markets abroad. Foreign developments pose additional headwinds, including the impacts of the Russia-Ukraine conflict, uncertainties about China’s reopening and the impact of tighter monetary policy across much of the global economy.
The U.S. economy faces uncertainties from elevated interest rates, persistent inflation, the end of fiscal stimulus, subdued housing market activity and weak export demand.
Removed
Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.
Added
The primary source of revenue is net interest income, which is principally derived from the difference between interest earned on loans and investment securities and interest paid on deposits and other funding sources. The Corporation also provides other products and services that meet the financial needs of customers which generate noninterest income, the Corporation's secondary source of revenue.
Removed
In particular, in 2022, loan balances in Dealer Services remained low and credit quality in automotive production remained under pressure due to lingering effects of shortages in parts which depressed manufacturing, and thus sales volumes.
Added
Growth in loans, deposits and noninterest income is affected by many factors, including economic conditions in the markets the Corporation serves, the financial requirements and economic health of customers and the ability to add new customers and/or increase the number of products used by current customers.
Removed
For a discussion of Comerica's interest rate sensiti vity and risk management strategies, please see, “Market and Liquidi ty Risk” beginning on page F- 24 of the Financial Section of this report. Deposits make up a large portion of Comerica’s funding portfolio.
Added
Success in providing products and services depends on the financial needs of customers and the types of products desired.
Removed
Comerica's financial results could be materially adversely impacted by changes in financial market conditions. 14 Table of Contents • Interest rates on Comerica's outstanding financial instruments might be subject to change based on developments related to LIBOR, which could adversely affect its revenue, expenses, and the value of those financial instruments.
Added
As a regional banking organization, our credit risks (and many other of our risks) may be exacerbated by events or factors that disproportionately affect the markets in which we operate, accept deposits, make loans or invest.
Removed
On July 27, 2017, the United Kingdom’s Financial Conduct Authority ("FCA"), which regulates LIBOR, publicly announced that it intended to stop persuading or compelling banks to submit LIBOR rates after 2021.
Added
Comerica's financial results could be materially adversely impacted by changes in financial market conditions. • Comerica's transition away from the Bloomberg Short-Term Bank Yield Index, or "BSBY," could adversely affect its financial results. On November 15, 2023, Bloomberg Index Services Limited announced it will discontinue publishing BSBY on November 15, 2024.
Removed
Certain LIBOR tenors are no longer supported as of December 31, 2021, and the FCA has announced that the remaining tenors, including those most commonly used by Comerica, will cease to be supported after June 30, 2023.
Added
Comerica is transitioning a number of arrangements to other rates, primarily Secured Overnight Financing Rate (“SOFR”). As a result of this transition, interest rates on our floating rate loans, derivatives, and other financial instruments tied to BSBY rates, as well as the revenue and expenses associated with those financial instruments, may be adversely affected.
Removed
While Comerica stopped originating LIBOR-based products in the fourth quarter of 2021, it still has remaining exposure to outstanding LIBOR-based products, including loans and derivatives. As of December 31, 2022, there are approximately $16.0 billion of LIBOR-based loans.
Added
As Comerica works through the complicated product transitions involved, Comerica’s relationships with its customers may suffer. Comerica may need to make additional efforts to retain customers, avoid disruptions to customer service and ensure the products continue to fulfill their intended purposes for customers. Comerica may also be harmed by operational errors, inconsistencies or inefficiencies inherent in making these transitions.
Removed
Of these, approximately 18 percent have maturity dates prior to cessation, 46 percent mature after cessation but have fallback language and the remaining 36 percent are in process of remediation. Comerica is currently issuing new Secured Overnight Financing Rate (SOFR)-based and Bloomberg Short-Term Bank Yield Index (BSBY)-based cash and derivative products.
Added
As occurred following the collapse of certain banks early in 2023, the failure of other financial institutions could cause deposit outflows if customers were to spread deposits among several different banks to maximize their FDIC insurance, move deposits to banks deemed "too big to fail," or remove deposits from the U.S. financial system entirely.
Removed
Comerica continues to monitor market developments and regulatory updates, as well as collaborate with regulators and industry groups on the transition. The market transition away from LIBOR to an alternative reference rate is complex and could have a range of adverse effects on Comerica's business, financial condition and results of operations.
Added
Management is not currently engaged in repurchasing shares and will continue to monitor various factors, including the Corporation's earnings generation, capital needs to fund future loan growth, regulatory changes and market conditions, before resuming the share repurchase program.
Removed
In particular, such transition could: • adversely affect the interest rates paid or received on, and the revenues and expenses associated with, Comerica’s floating rate obligations, loans, deposits, derivatives, and other financial instruments tied to LIBOR rates, or other securities or financial arrangements given LIBOR’s historical role in determining market interest rates globally; • adversely affect the value of Comerica’s floating rate obligations, loans, deposits, derivatives, and other financial instruments tied to LIBOR rates, or other securities or financial arrangements given LIBOR’s historical role in determining market interest rates globally; • prompt inquiries or other actions from regulators in respect to Comerica’s selection of alternative reference rates other than SOFR; and • result in disputes, litigation or other actions with counterparties regarding the interpretation and enforceability of certain fallback language in LIBOR-based instruments.
Added
At all times, Comerica may be unable to generate sufficient returns to repurchase shares, or may choose to devote capital to other uses rather than repurchase shares. • Reduction in our credit ratings could adversely affect Comerica and/or the holders of its securities.
Removed
More information regarding the LIBOR transition is available on page F- 27 under "LIBOR Transition." The manner and impact of this transition, as well as the effect of these developments on Comerica’s funding costs, loan and investment and trading securities portfolios, asset-liability management, and business, is uncertain.
Added
Following banking industry disruptions in early 2023, Moody's downgraded the Corporation and Bank's credit ratings and changed the Corporation and Bank's outlooks to Negative related to uncertainty in the banking industry; Moody's also lowered the macro profile of the U.S. banking system, reflecting general concern around the banking industry as a whole.
Removed
For example, the CCPA, which became effective on January 1, 2020, applies to for-profit businesses that conduct business in California and meet certain revenue or data collection thresholds, including Comerica. For more information regarding data privacy regulation, refer to the “Supervision and Regulation” section of this report.
Added
Similarly following those disruptions, Standard & Poor's downgraded the Corporation and Bank's credit ratings while reaffirming their outlooks at Stable, and Fitch changed the Corporation's and the Bank's outlooks to Negative, noting relatively higher usage of brokered deposits and wholesale funding. There can be no assurance that Comerica will maintain its current ratings.
Removed
For example, the U.S. government recently enacted the Inflation Reduction Act (IRA), which includes changes to the U.S. corporate income tax system, including a 15% minimum tax based on “adjusted financial statement income” for certain large corporations, which is effective in 2023, and a 1% excise tax on share repurchases after December 31, 2022.
Added
Further, volatility in the banking industry may lead to greater reliance on third parties that provide money market or deposit sweep services. In addition, many of these transactions could expose Comerica to credit risk in the event of 17 Table of Contents default of its counterparty or client.
Removed
In addition, the current administration has announced a 19 Table of Contents proposal to increase such excise tax to 4%. While Comerica does not believe that the IRA will have a material impact on its consolidated financial statements, any future corporate tax legislation could have that effect. STRATEGIC RISK • Damage to Comerica’s reputation could damage its businesses.
Added
In particular,on July 27, 2023, the FRB, the FDIC, and the OCC issued a proposal, referred to as “Basel III Endgame,” that would result in significant changes to the U.S. regulatory capital rules for banking organizations with total consolidated assets of $100 billion or more. As of December 31, 2023, the Corporation had total assets of $85.8 billion.
Removed
These matters could have an adverse effect on Comerica for an undetermined period.
Added
While Basel III Endgame would not apply to Comerica as currently proposed, if Comerica becomes subject to those requirements or becomes subject to any other new laws or regulations related to capital and liquidity, such requirements could limit Comerica’s ability to pay dividends or make share repurchases or require Comerica to reduce business levels or to raise capital, which would have a material adverse effect on Comerica’s financial condition and results of operations. • Compliance with stringent capital requirements may adversely affect Comerica.
Removed
While some of these headwinds are expected to dissipate in 2023, U.S. debt ceiling and budget deficit concerns have increased the possibility of further credit-rating downgrades and economic slowdowns, or a recession in the U.S.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2022, affiliates also operated from leased spaces in Denver, Colorado; Wilmington, Delaware; Alpharetta, Georgia; Rosemont, Illinois; Boston, Massachusetts; Minneapolis, Minnesota; Morristown, New Jersey; New York, New York; Charlotte, North Carolina; Raleigh, North Carolina; Winston-Salem, North Carolina; Charleston, South Carolina; Greenville, South Carolina; Memphis, Tennessee; Bellevue, Washington; Monterrey, Mexico; Toronto, Ontario, Canada and Windsor, Ontario, Canada.
Biggest changeAs of December 31, 2023, affiliates also operated from owned spaces in Michigan as well as leased spaces in Delaware, Colorado, Georgia, Illinois, Massachusetts, Minnesota, New Jersey, New York, North Carolina, South Carolina, Tennessee and Washington, as well as in Mexico and Ontario, Canada. Item 3. Legal Proceedings.
This includes banking centers, trust services locations, and/or loan production or other financial services offices, primarily in the States of Texas, Michigan, California, Florida and Arizona. Of the 551 locations, 217 were owned and 334 were leased.
As of December 31, 2023, Comerica, through its banking affiliates, operated at a total of 529 banking centers, trust services locations, and/or loan production or other financial services offices, primarily in Texas, Michigan, California, Florida and Arizona. Of those, 209 were owned and 320 were leased.
Item 2. Properties. The executive offices of Comerica are located in the Comerica Bank Tower, 1717 Main Street, Dallas, Texas 75201. Comerica Bank occupies six floors of the building, plus additional space on the building's lower level.
Item 2. Properties. The executive offices of Comerica are located in the Comerica Bank Tower, 1717 Main Street, Dallas, Texas 75201. Comerica's Michigan headquarters are located at 411 W. Lafayette, Detroit, Michigan 48226.
Removed
Comerica does not own the Comerica Bank Tower space, but has naming rights to the building and leases the space from an unaffiliated third party. The lease for the majority of such space used by Comerica and its subsidiaries extends through September 2028; however, the lease for one floor will terminate sooner, in November 2023.
Added
Please see the Notes to Consolidated Financial Statements in the Financial Section of this report. Item 4. Mine Safety Disclosures. Not applicable. 27 Table of Contents PART II
Removed
Comerica's Michigan headquarters are located in a 10-story building in the central business district of Detroit, Michigan at 411 W. Lafayette, Detroit, Michigan 48226. Such building is owned by Comerica Bank. As of December 31, 2022, Comerica, through its banking affiliates, operated at a total of 551 locations.
Removed
Comerica and its subsidiaries own, among other properties, a check processing center in Livonia, Michigan, and three buildings in Auburn Hills, Michigan, used mainly for lending functions and operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePerformance Graph Our performance graph is available under the caption "Performance Graph" on page F- 2 of the Financial Section of this report. Purchases of Equity Securities by the Issuer and Affiliated Purchasers As of December 31, 2022, a total of 97.2 million shares have been authorized for repurchase under the share repurchase program since its inception in 2010.
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers As of December 31, 2023, a total of 97.2 million shares have been authorized for repurchase under the share repurchase program since its inception in 2010. There is no expiration date for Comerica's share repurchase program.
Subject to approval of the Board of Directors, applicable regulatory requirements and the Series A Preferred Stock dividend preference, Comerica expects to continue its policy of paying regular cash dividends on a quarterly basis.
Subject to approval of the Board of Directors, applicable regulatory requirements and the Series A Preferred Stock dividend preference, Comerica expects to continue a policy of paying regular cash dividends on a quarterly basis.
A discussion of dividend restrictions applicable to Comerica is set forth in Note 20 of the Notes to Consolidated Financial Statements starting on page F- 88 of the Financial Section of this report, in the "Capital" section starting on page F- 14 of the Financial Section of this report and in the “Supervision and Regulation” section of this report.
A discussion of dividend restrictions applicable to Comerica is set forth in Notes 13 and 20 of the Notes to Consolidated Financial Statements starting on pages F- 82 and F- 93 , respectively, of the Financial Section of this report, in the "Capital" section starting on page F- 16 of the Financial Section of this report and in the “Supervision and Regulation” section of this report.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information, Holders of Common Stock and Dividends The common stock of Comerica Incorporated is traded on the New York Stock Exchange (NYSE Trading Symbol: CMA). At February 10, 2023, there were approximate ly 8,031 record hold ers of Comerica's common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information, Holders of Common Stock and Dividends The common stock of Comerica Incorporated is traded on the New York Stock Exchange (NYSE Trading Symbol: CMA). At February 26, 2024, there were approximately 7,857 record holders of Comerica's common stock.
(shares in thousands) Total Number of Shares Purchased as Part of Publicly Announced Repurchase Plans or Programs Remaining Share Repurchase Authorization (a) Total Number of Shares Purchased (b) Average Price Paid Per Share Total first quarter 2022 377 4,997 399 $ 92.58 Total second quarter 2022 — 4,997 2 90.85 Total third quarter 2022 — 4,997 2 74.64 October 2022 — 4,997 2 72.44 November 2022 — 4,997 — — December 2022 — 4,997 — — Total fourth quarter 2022 — 4,997 2 72.44 Total 2022 377 4,997 405 $ 92.39 (a) Maximum number of shares that may yet be purchased under the publicly announced plans or programs.
(shares in thousands) Total Number of Shares Purchased as Part of Publicly Announced Repurchase Plans or Programs Remaining Share Repurchase Authorization (a) Total Number of Shares Purchased (b) Average Price Paid Per Share Total first quarter 2023 — 4,997 31 $ 72.78 Total second quarter 2023 — 4,997 3 42.36 Total third quarter 2023 — 4,997 3 43.37 October 2023 — 4,997 3 40.60 November 2023 — 4,997 — — December 2023 — 4,997 — — Total fourth quarter 2023 — 4,997 3 40.60 Total 2023 — 4,997 40 $ 65.89 (a) Maximum number of shares that may yet be purchased under the publicly announced plans or programs.
There is no expiration date for Comerica's share repurchase program. The following table summarizes Comerica's share repurchase activity for the year ended December 31, 2022.
The following table summarizes Comerica's share repurchase activity for the year ended December 31, 2023.
(b) Includes approximately 28,000 shares (including 2,000 shares in the quarter ended December 31, 2022) 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 during the year ended December 31, 2022.
(b) Includes approximately 40,000 shares (including 3,000 shares in the quarter ended December 31, 2023) purchased related to deferred compensation plans during the year ended December 31, 2023. These transactions are not considered part of Comerica's repurchase program. Item 6. [Reserved]
Removed
These transactions are not considered part of Comerica's repurchase program. Item 6. [Reserved]
Added
Equity Compensation Plan Information The response to this item will be included in Comerica's definitive Proxy Statement relating to the Annual Meeting of Shareholders, which sections are hereby incorporated by reference. Performance Graph Our performance graph is available under the caption "Performance Graph" on page F- 2 of the Financial Section of this report.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeItem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Reference is made to the sections entitled “2022 Overview,” “Results of Operations," "Strategic Lines of Business," "Balance Sheet and Capital Funds Analysis," "Risk Management," "Critical Accounting Estimates," "Supplemental Financial Data" and "Forward-Looking Statements" on pages F- 3 through F- 37 of the Financial Section of this report.
Biggest changeItem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Reference is made to the sections entitled “2023 Overview,” “Results of Operations," "Strategic Lines of Business," "Balance Sheet and Capital Funds Analysis," "Risk Management," "Critical Accounting Estimates," "Supplemental Financial Data" and "Forward-Looking Statements" on pages F- 3 through F- 41 of the Financial Section of this report.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. Reference is made to the subheadings entitled “Market and Liquidity Risk,” “Operational Risk,” "Technology Risk," “Compliance Risk” and “Strategic Risk” on pages F- 24 through F- 30 of the Financial Section of this report. 25 Table of Contents
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. Reference is made to the subheadings entitled “Market and Liquidity Risk,” “Operational Risk,” "Technology Risk," “Compliance Risk” and “Strategic Risk” on pages F- 27 through F- 34 of the Financial Section of this report. 28 Table of Contents

Other CMA 10-K year-over-year comparisons