Comerica Incorporated : 2022 Quarterly Earnings Q4 Presentation

Comerica Incorporated

Fourth Quarter 2022 Financial Review

January 19, 2023

Safe Harbor Statement

Any statements in this presentation that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "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. These forward-looking statements are predicated on the beliefs and assumptions of Comerica's management based on information known to Comerica's management as of the date of this presentation and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Comerica's management for future or past operations, products or services, and forecasts of Comerica's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries as well as estimates of credit trends and global stability. Such statements reflect the view of Comerica's management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Comerica's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include credit risks (unfavorable developments concerning credit quality; declines or other changes in the businesses or industries of Comerica's customers; and changes in customer behavior); market risks (changes in monetary and fiscal policies; fluctuations in interest rates and their impact on deposit pricing; and transitions away from LIBOR towards new interest rate benchmarks); liquidity risks (Comerica's ability to maintain adequate sources of funding and liquidity; reductions in Comerica's credit rating; and the interdependence of financial service companies); technology risks (cybersecurity risks and heightened legislative and regulatory focus on cybersecurity and data privacy); operational risks (operational, systems or infrastructure failures; reliance on other companies to provide certain key components of business infrastructure; the impact of legal and regulatory proceedings or determinations; losses due to fraud; and controls and procedures failures); compliance risks (changes in regulation or oversight, or changes in Comerica's status with respect to existing regulations or oversight; the effects of stringent capital requirements; and the impacts of future legislative, administrative or judicial changes to tax regulations); strategic risks (damage to Comerica's reputation; Comerica's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; competitive product and pricing pressures among financial institutions within Comerica's markets; the implementation of Comerica's strategies and business initiatives; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; and any future strategic acquisitions or divestitures); and other general risks (impacts from the COVID-19 global pandemic; changes in general economic, political or industry conditions; the effectiveness of methods of reducing risk exposures; the effects of catastrophic events; changes in accounting standards; the critical nature of Comerica's accounting policies; and the volatility of Comerica's stock price). Comerica cautions that the foregoing list of factors is not all-inclusive. For discussion of factors that may cause actual results to differ from expectations, please refer to our filings with the Securities and Exchange Commission. In particular, please refer to "Item 1A. Risk Factors" beginning on page 13 of Comerica's Annual Report on Form 10-K for the year ended December 31, 2021. Forward-looking statements speak only as of the date they are made. 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. For any forward-looking statements made in this presentation or in any documents, Comerica claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

©2022, Comerica Inc. All rights reserved.

2

FY22 Review

Superior financial results & achievements aligned with refreshed core values

	Record EPS1	Record Revenue			Average Loans
$8.35	$8.47				$3.0B	$3.5B			$49B	$50B
2021	2022				2021	2022	2021	2022
	Return on Assets2	Return on Equity3			Efficiency Ratio
1.30%	1.32%					18.6%	62%	56%
			15.2%
2021	2022				2021	2022	2021	2022

1Diluted earnings per common share 2Return on average assets 3Return on average common shareholders' equity 4Commitment runs from 2021-2023

©2022, Comerica Inc. All rights reserved.

• Delivered enhanced employee benefits
• Announced Collaboration & Innovation hubs
• Achieved colleague Sustainable Engagement score of 84%
• Launched Digital Journeys to further elevate customer experience beginning with Treasury Management
• Enhanced Voice of Customer program
• Invested in transformative strategy for Payments
• Re-imaginedretail delivery model
• Prioritized cloud-first approach to data
• Achieved ~85% of $5B Small Business Financing Commitment4
• Developed BusinessHQ
• Published Inaugural TCFD report
• Recognized by Newsweek for Commitment to Corporate Responsibility & Diversity

TRUST. ACT. OWN.

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FY22 Results

Record revenue, broad-based loan growth, improved efficiency ratio & excellent credit quality

(millions, except per share data)	2022	2021	Change
			$1,377
Average loans	$50,460	$49,083
Average loans, ex. PPP	50,313	46,747	3,566
Average deposits	75,481	77,681	(2,200)
Net interest income	2,466	1,844	622
Provision for credit losses	60	(384)	444
Noninterest income1	1,068	1,123	(55)
Noninterest expenses1	1,998	1,861	137
Provision for income tax	325	322	3
Net income	1,151	1,168	(17)
Earnings per share2	$8.47	$8.35	$0.12
Efficiency Ratio	56%	62%
Return on Average Equity3,4	18.63%	15.15%
Return on Average Assets	1.32%	1.30%

Key Performance Drivers

Year over Year

• Revenue increased $567MM or 19%. Pre-tax, pre- provision net revenue (PPNR)5 up $430MM, or 39%
• Loans up 3%, or 8% ex-PPP.Broad-based growth partly offset by Mortgage Banker
• Deposits reflect customers utilizing excess cash (following $13B, or 19%, FY21 growth) & strategic pricing initiatives
• Net interest income driven by rates & loan growth
• Credit quality excellent; Net charge-offs 3 bps
• Noninterest income reflects growth in several products, more than offset by noncustomer-related categories
• Expenses include strategic investments, higher performance & stock-based compensation, & revenue-related costs

FY22 compared to FY21 1Includes gains/(losses) related to deferred comp plan of $(18)MM FY22 & $14MM FY21 2Diluted earnings per common share 3Return on common shareholders' equity 4Common shareholders' equity per share of common stock 5Refer to reconciliation of non-GAAP financial measures in appendix

©2023, Comerica Inc. All rights reserved.

4

4Q22 Results

Record revenue, continued expense management & exceptional credit quality

(millions, except				Change From
per share data)	4Q22	3Q22	4Q21	3Q22	4Q21
				$1,262
Average loans	$52,375	$51,113	$47,825	$4,550
Average loans, ex. PPP	52,335	51,046	47,136	1,289	5,199
Average deposits	71,355	73,976	84,537	(2,621)	(13,182)
Net interest income	742	707	461	35	281
Provision for credit losses	33	28	(25)	5	58
Noninterest income1	278	278	289	0	(11)
Noninterest expenses1	541	502	486	39	55
Provision for income tax	96	104	61	(8)	35
Net income	350	351	228	(1)	122
Earnings per share2	$2.58	$2.60	$1.66	$(0.02)	$0.92
Efficiency Ratio	53.00%	50.75%	64.24%
CET13	10.02%	9.93%	10.13%

Key Performance Drivers 4Q22 compared to 3Q22

• Revenue increased 4%
• Loans up 2.5% driven by broad-based growth
• Deposits declined due to customers deploying cash & prudent pricing management; Period-end interest- bearing deposits increased
• Net interest income benefitted from higher rates & loan growth, partially offset by funding needs
• Net recoveries of $4MM; Reserve ratio rises to 1.24%
• Noninterest income remained strong
• Prudent expense management, while supporting revenue growth & strategic modernization initiatives
• CET1 increased as strong capital generation outpaced loan growth

1Includes gains/(losses) related to deferred comp asset returns of $5MM 4Q21, ($3MM) 3Q22 & $6MM 4Q22	2Diluted earnings per common share 34Q22 estimated
©2022, Comerica Inc. All rights reserved.	5

Loans

Continued broad-based growth in loans & commitments; Yields up 81 bps

Loans

($ in billions)

		50.0	51.1	52.4	51.7	53.4
47.8	48.3

5.45

4.64

3.26 3.22 3.64

4Q21 1Q22 2Q22 3Q22 4Q223Q22 4Q22

Average Balances	Period-end
Loan Yields %

Average loans increased $1.3B1, or 2.5%

• $879MM Commercial Real Estate2
• • Multi-family& industrial accounted for ~85% of growth
• $331MM National Dealer Services
• $193MM Corporate Banking
• $131MM Wealth Management
• $119MM Entertainment

- $329MM Mortgage Banker

Loan Commitments Increased 5%

Growth in nearly every business line

(period-end: $ in billions)

48.7	48.9	50.9	53.7	56.5
47%	46%	46%	45%	45%
4Q21	1Q22	2Q22	3Q22	4Q22
		Utilization

4Q22 compared to 3Q22 1See Quarterly Average Loans slide in Appendix for more details 2See Commercial Real Estate slide 26 for more details

©2022, Comerica Inc. All rights reserved.

6

Deposits

Positive interest-bearing deposit trend reflects pricing actions, maintained favorable NIB mix

Deposits ($ in billions)

84.5
	79.1	77.6	74.0
			73.0
			71.4	71.4
					42.3	39.9
				0.97
			0.20		30.7	31.5
0.05	0.05	0.05
4Q21	1Q22	2Q22	3Q22	4Q22	3Q22	4Q22
	Average Balances		Period-end
		Deposit Rate1 %		IB	NIB

Strategic management of deposits & businesses utilizing excess liquidity

Average deposits decreased $2.6B

• $756MM interest-bearing
• $1.9B noninterest-bearing

• Cost of interest-bearing deposits increased to 97 bps, reflecting relationship-focused pricing
• Cumulative interest-bearing deposit beta 26% (cycle-to-date)2

Loan to Deposit Ratio Remains Low

(period-end)

130%	120%
120%
110%
100%
90%																	75%
80%
70%
60%
50%	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	1Q22	2Q22	3Q22	4Q22

4Q22 compared to 3Q22 1Interest costs on interest-bearing deposits	2Cumulative deposit beta calculated using 4Q21 average Fed funds of 0.25%
©2022, Comerica Inc. All rights reserved.	7

Securities Portfolio

Stable securities income despite paydowns

Securities Portfolio1

($ in billions)

	20.5		19.5
	19.0	19.1	19.0
16.6	17.3
	2.08	2.11
	1.92

1.71 1.74

Average portfolio decreased $1.4B

• Period-enddecreased $440MM
• • $413MM MBS & $100MM Treasury payments + $73MM fair value change
• 1Q23: Estimate repayments ~$425MM MBS2 plus $700MM treasuries2
• Duration of 5.25 years3
• • Extends to 5.98 years under +200bps instantaneous rate increase3
• Net unrealized pre-tax loss decreased to $3.0B

Securities Income

4Q21 1Q22 2Q22 3Q22 4Q223Q22 4Q22

Average Balances	Period-end
Securities Yields %

($ in millions)

100

71 77

119 118

12/31/22 1Net unaccreted discount of $55MM 2Outlook as of 1/19/23 3Estimated as of 12/31/22

4Q21

1Q22

2Q22

3Q22

4Q22

©2022, Comerica Bank. All rights reserved.	8

Net Interest Income

Record NII, grew $35MM, or 5%; benefit from rates & loan growth; NIM 3.74%, up 24 bps

Net Interest Income
($ in millions)	742
707
561

461 456

3.50 3.74

2.70

2.04 2.19

4Q21	1Q22	2Q22	3Q22	4Q22
		Net Interest Margin %

Net impact due to rates: $53MM & 28bps on the NIM

4Q22 compared to 3Q22

©2022, Comerica Inc. All rights reserved.

$707MM	3Q22		3.50%
+ 122MM	Loans		+ 0.56
+	102MM	Higher rates, incl. swaps	+	0.52
+	19MM	Higher Balances	+ 0.03
+	1MM	Other dynamics	+ 0.01
- 1MM	Securities Balances		+ 0.02
+ 5MM	Fed Deposits		+ 0.11
+	24MM	Higher rates	+ 0.12
-	19MM	Lower balances	-	0.01
- 62MM	Deposits		- 0.30
-	63MM	Higher rates	-	0.31
+	1MM	Lower balances	+ 0.01
- 29MM	Wholesale Funding		- 0.15
-	10MM	Higher rates	-	0.05
-	19MM	Higher balances	-	0.10
$742MM	4Q22		3.74%
				9

Credit Quality

Reserve reflects excellent credit metrics, loan growth & softening economic outlook

Net Charge-Offs (Recoveries)

($ in millions)

	8		13
		0
(4)				(4)
4Q21	1Q22	2Q22	3Q22	4Q22

Criticized Loans1 Well Below Historical Level

($ in millions)

1,573 1,647 1,534 1,626 1,572

3.2	3.3	3.0	3.1	2.9
4Q21	1Q22	2Q22	3Q22	4Q22
		Criticized/Loans %

Nonperforming Assets Decreased

($ in millions)

269	274	266	262	244
0.55	0.55	0.52	0.51	0.46
4Q21	1Q22	2Q22	3Q22	4Q22
		NPA/Loans %

Allowance for Credit Losses Increased Moderately

($ in millions)

661

618 599 609 624

1.26	1.21	1.18	1.21	1.24
4Q21	1Q22	2Q22	3Q22	4Q22
		ACL/Loans %

4Q22 compared to 3Q22 1Criticized loans are consistent with regulatory defined Special Mention, Substandard, & Doubtful categories

©2022, Comerica Inc. All rights reserved.

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