Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (CapEx) (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

ed2a508fcd56394dd584ba9529593ba5bd13c83ed36609642a7c3526ef224637

Commercial Bank

- Net Interest Income

- Noninterest Income

Retail Bank

Wealth Management

Finance & Other

Total Revenue

451db710746880658bad62239ca5665b0b2696ae65b4ce4b3397726df7586290

Total Revenue (USD, millions)

Cost of Goods Sold (COGS) (USD, millions)

SG&A (USD, millions)

R&D (USD, millions)

Depreciation and Amortization (USD, millions)

Interest Expense (USD, millions)

Operating Income (EBIT) (USD, millions)

Net Income (USD, millions)

EPS - Basic (USD/share)

EPS - Diluted (USD/share)

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Current Assets (USD, millions)

Cash and Cash Equivalents (USD, millions)

Accounts Receivable (USD, millions)

Inventory (USD, millions)

Non-Current Assets (USD, millions)

Property, Plant, and Equipment (PP&E) (USD, millions)

Goodwill (USD, millions)

Intangible Assets (USD, millions)

Current Liabilities (USD, millions)

Accounts Payable (USD, millions)

Short-term Debt (USD, millions)

Accrued Expenses (USD, millions)

Non-Current Liabilities (USD, millions)

Long-term Debt (USD, millions)

Lease Liabilities (USD, millions)

Deferred Tax Liabilities (USD, millions)

Shareholders' Equity (USD, millions)

Retained Earnings (USD, millions)

Common Stock (USD, millions)

Additional Paid-in Capital (USD, millions)

cc54d0c5154b7f9936bba4fe2925d13e9407da23117893d35cbfc50561087be3

Percentage of total loans that are higher-risk commercial and industrial (HR C&I) (percentage)

Number of borrowers with a balance greater than 2 million transferred to nonaccrual status (count)

Number of banking centers in Michigan (count)

Number of banking centers in Texas (count)

Number of banking centers in California (count)

Number of banking centers in Other Markets (count)

Total number of banking centers (count)

Number of nonaccrual loan borrowers under 2 million (count)

Number of nonaccrual loan borrowers 2 million - 5 million (count)

Number of nonaccrual loan borrowers 5 million - 10 million (count)

Number of nonaccrual loan borrowers 10 million - 25 million (count)

Total number of nonaccrual loan borrowers (count)

32ea60d628d5c14081db0d05eea16bb47b59608bc77f4a01a9c06e3893541990

The **cash levels dropped sharply in Q1 2024** because the bank experienced a significant liquidity shift. Specifically, **the Cash and due from banks balance fell from $1,443 million in Q4 2023 to $689 million in Q1 2024**. This decline was primarily driven by a **decrease in total deposits** (falling from $66,762 million to $63,578 million, a drop of $3,184 million), a **reduction in short-term borrowings** (declining from $3,565 million to $0 million, implying repayment of obligations that required cash outflow), and an **increase in medium- and long-term debt** by $915 million, which only partially offset the cash outflows.  **[0000028412-24-000263_cma-20240331.htm:3]** **[0000028412-24-000246_a2024q1pressrelease-ex991.htm:10]** 

Why did cash levels drop sharply in Q1 2024?

The significant drop in total assets in Q1 2024 was primarily driven by a **decrease in interest-bearing deposits with banks** (a decline of **$3,613 million**), a **reduction in total loans** (down by **$1,291 million**), a **decline in investment securities available-for-sale** (a decrease of **$623 million**), and a **reduction in cash and due from banks** (down by **$754 million**).  **[0000028412-24-000263_cma-20240331.htm:3]** **[0000028412-24-000246_a2024q1pressrelease-ex991.htm:10]** **[CMA_3379999_2]** 

What drove the significant drop in total assets in Q1 2024?

In **Q1 2024**, the interest-bearing deposits nearly halved because they dropped from **$8,059 million** to **$4,446 million**, a decline of about **$3.6 billion**. This significant reduction was primarily driven by a decrease of **$3.1 billion** in the deposits held with the **Federal Reserve Bank (FRB)**. The bank’s **liquidity management strategy** shifted away from holding excess reserves at the FRB, and there were also adjustments in funding sources, including **brokered deposits** and **short-term borrowings**.  **[0000028412-24-000263_cma-20240331.htm:3]** **[0000028412-24-000306_cma-20240630.htm:51]** 

Why did interest-bearing deposits nearly halve in Q1 2024?

The reduction in other time deposits in Q3 2024 was primarily driven by a decline in brokered deposits. Additionally, there were **decreases of $318 million** in Technology and Life Sciences, **$284 million** in general Middle Market, and **$143 million** in Mortgage Banker Finance, which were partially offset by **increases of $167 million** in Equity Fund Services and **$142 million** in Entertainment.  **[0000028412-24-000349_cma-20240930.htm:61]** 

What factors contributed to the reduction in other time deposits in Q3 2024?

The **medium- and long-term debt increased in Q1 2024 primarily due to the issuance of **$1.0 billion** in senior notes in January 2024, which contributed to an overall increase of about **$833 million** compared to the prior quarter. This rise was partially offset by reductions in other components of the debt portfolio.  **[0000028412-24-000263_cma-20240331.htm:56]** **[0000028412-24-000263_cma-20240331.htm:29]** **[0000028412-24-000185_cma-20231231.htm:183]** 

Why did medium- and long-term debt increase in Q1 2024?

24c66487c3f2064fa688ba82d09bfd3c43b6647f027c63042f259493cb3141d1

00a280fa24ebca27c6706ecef590e1d8d4821daf60aa4a9e56cd7418a615a761

306c592d3766b5480a75d9d998f7219f10b06d2f5a6a0928f46237ceb14c887b

d5a599dfe38776124a0f8be88dd86c776744ba1cdcac46bd8ed6f7bb0b3f84b2

The surge in operating cash flow in Q4 2023 was driven by several key factors. Despite a notable decline in net income, **non-cash adjustments** played a major role. These adjustments included a **$91 million non-cash net loss** related to the cessation of BSBY hedge accounting, **$25 million in severance charges**, and a **$109 million special FDIC assessment**. Additionally, the increase in **accrued expenses payable** provided a positive boost, while deferred compensation expenses, other non-cash adjustments, and a slight decline in the **provision for credit losses** helped further support the operating cash flow. Moreover, adjustments captured under the “Other, net” category, although not detailed, also contributed to the overall improvement in cash flow.  **[CMA_3370491_2]** **[0000028412-24-000016_a2023q4pressrelease-ex991.htm:13]** **[CMA_3370491_4]** 

What factors contributed to the surge in operating cash flow in Q4 2023?

The **significant increase** in operating cash flow in FY 2023 was primarily driven by several factors, including a **substantial rise in accrued expenses payable** (increasing from **$131 million** in FY 2022 to **$348 million** in FY 2023), a **more favorable change in accrued income receivable** (improving from a **$(152) million** impact in FY 2022 to **$(65) million** in FY 2023), a **higher provision for credit losses** (rising from **$60 million** to **$89 million**), and a **notably lower negative impact in the 'Other, net' category** (from **$(614) million** in FY 2022 to **$(5) million** in FY 2023).  **[0000028412-24-000185_cma-20231231.htm:138]**  Together, these factors boosted both the operating cash flow and free cash flow.

What drove the significant increase in operating cash flow in FY 2023, which also boosted free cash flow?

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The sharp decline in Q4 2023 net income was primarily due to **significantly higher noninterest expenses**—including a **$113 million increase in FDIC insurance expense** and **rising salaries and benefits**—combined with **lower noninterest income**, notably a **$91 million loss in risk management hedging income**. Additionally, there was a **decline in net interest income** caused by lower loan balances and increased deposit costs, as well as a modest change in the provision for credit losses. This combination of factors collectively led to the sharp drop in net income in Q4 2023.  **[0000028412-24-000016_a2023q4pressrelease-ex991.htm:0]** **[0000028412-24-000016_a2023q4pressrelease-ex991.htm:13]** **[CMA_3370491_3]** 

What caused the sharp decline in net income in Q4 2023?

The **significant drop** in Income before income taxes in **Q4 2023** was primarily due to several factors. **Comerica Incorporated** faced a one-time **Special FDIC Assessment** that added **$109 million** in noninterest expenses, a **net noncash loss of $88 million** related to hedge accounting issues from the **BSBY cessation**, and **$25 million** in severance charges. Additionally, **total noninterest expenses increased** to **$718 million** compared to **$555 million** in Q3 2023, further impacting the pre-tax income.  **[CMA_3370491_2]** **[0000028412-24-000016_a2023q4pressrelease-ex991.htm:13]** **[0000028412-24-000016_a2023q4pressrelease-ex991.htm:0]** 

Why was income before income taxes so low in Q4 2023?

The spike in FDIC insurance expense in **Q4 2023** was driven primarily by a **special assessment of $109 million** imposed to recover losses from earlier bank failures, which led to a **total increase of $113 million** in the expense. This significant assessment, along with other cost adjustments, was the chief factor behind the large change in expenses.  **[0000028412-24-000185_cma-20231231.htm:87]** **[0000028412-24-000185_cma-20231231.htm:17]** **[0000028412-24-000016_a2023q4pressrelease-ex991.htm:3]** 

What drove the spike in FDIC insurance expense in Q4 2023?

The documents indicate that there wasn’t a jump in interest expense in Q3 2024—instead, the interest on short-term borrowings actually experienced a **substantial decrease**. Specifically, the interest dropped to **$1 million** in Q3 2024 from **$125 million** in Q3 2023 and **$9 million** in Q2 2024. This significant decrease was primarily driven by a dramatic reduction in the average balance of short-term borrowings, which fell from **$8,836 million** in Q3 2023 to **$77 million** in Q3 2024.  **[0000028412-24-000334_a2024q3pressrelease-ex991.htm:11]** **[0000028412-24-000334_a2024q3pressrelease-ex991.htm:14]** **[0000028412-24-000334_a2024q3pressrelease-ex991.htm:10]** 

What explains the sudden jump in interest on short-term borrowings in Q3 2024?

34f9e4e0a10e21c18f078bb2cafb3058a7fd80f9bc334918ad292100f4d7e6d3

Comerica Inc (CMA)

Financials