0000028412us-gaap:FiduciaryAndTrustMembercma:FinanceOther1MemberDomain2019-01-012019-12-310000028412cma:RetailBankMemberus-gaap:DepositAccountMember2021-01-012021-12-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 20202023
Or
☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________________________ to __________________________
Commission file number 1-10706
Comerica Incorporated
(Exact Name of Registrant as Specified in Its Charter)
Delaware38-1998421
(State or Other Jurisdiction of Incorporation)(IRS Employer Identification Number)
Comerica Bank Tower
1717 Main Street, MC 6404
Dallas, Texas 75201
(Address of Principal Executive Offices) (Zip Code)
(214) 462-6831(833) 571-0486
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of
the Exchange Act:
Title of each classTrading symbolName of each exchange on which registered
Common Stock, $5 par valueCMANew York Stock Exchange
Securities registered pursuant to Section 12(g) of the
Exchange Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No o
Indicate by check mark if registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒
Accelerated filer

☐
Non-accelerated filer☐
Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ý
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in this filing reflect the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that require a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
At June 30, 20202023 (the last business day of the registrant’s most recently completed second fiscal quarter), the registrant’s common stock, $5 par value, held by non-affiliates had an aggregate market value of approximately $5.3$5.5 billion based on the closing price on the New York Stock Exchange on that date of $38.10$42.36 per share. For purposes of this Form 10-K only, it has been assumed that all common shares


Comerica’s Trust Department holds for Comerica’s employee plans, and all common shares the registrant’s directors and executive officers hold, are shares held by affiliates.
At February 5, 2021,26, 2024, the registrant had outstanding 139,286,040132,489,667 shares of its common stock, $5 par value.
Documents Incorporated by Reference:
Part III: Items 10-14—Proxy10-14 and Part II Item 5 as to "Equity Compensation Plan Information" —Proxy Statement for the Annual Meeting of Shareholders to be held April 27, 2021.23, 2024.

Table of Contents
TABLE OF CONTENTS
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Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
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PART I
Item 1. Business.
GENERAL
Comerica Incorporated (“Comerica”) is a financial services company, incorporated under the laws of the State of Delaware in 1973, and headquartered in Dallas, Texas. Based on total assets as reported in the most recently filed Consolidated Financial Statements for Bank Holding Companies (FR Y-9C), it was among the 25 largest commercial United States (“U.S.”) financial holding companies. As of December 31, 2020,2023, 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) and 31as well as non-banking subsidiaries. At December 31, 2020,2023, Comerica had total assets of approximately $88.1$85.8 billion, total deposits of approximately $72.9$66.8 billion, total loans of approximately $52.3$52.1 billion and shareholders’ equity of approximately $8.1$6.4 billion.
Comerica has strategically aligned its operations into three major business segments: the Commercial Bank, the Retail Bank, and Wealth Management. In addition to the three major business segments, Finance is also reported as a segment.
Comerica operates in threefive primary geographic markets - Texas, California, and Michigan, as well as in Arizona and Florida with select businesses operating- 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. As such, Comerica transitioned support of specific insurance, brokerage and investment advisory activities to Ameriprise. The new name representing this strategic relationship is Comerica Financial Advisors, powered by Ameriprise Financial.
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” on page F-5 ofin the Financial Section of this report; (2) under the caption “Rate/Volume Analysis” on page F-6 ofin the Financial Section of this report; and (3) under the caption “Noninterest Income” on pages F-7 through F-8 ofin the Financial Section of this report.
COMPETITION
The financial services business is highly competitive. Comerica and its subsidiaries mainly compete in their three 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 Texas, Californiathe primary markets, such as U.S. Banking, Mortgage Banker, Environmental Services and Michigan, as well asNational Dealer Services. They have strategically placed offices in faster growing markets where there is a concentration of customers and industries they serve. Comerica has established commercial offices in North Carolina and South Carolina, private banking offices in Georgia and made investments in the statesMountain West region of Arizona and Florida. They also compete in broader, national geographic markets, as well as markets in Mexico and Canada. They arethe United States.
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 market products,markets, international trade finance, letters of credit, foreign exchange management services,and loan syndication services, consumer lending, consumer deposit gathering, mortgage loan origination,syndications; consumer products fiduciarysuch as loans, deposits and origination of mortgage loans and credit cards; and wealth management services private banking, retirementsuch as comprehensive financial planning, trust and fiduciary services, investment management and advisory, services, investmentbrokerage, private banking, services, brokerage services, the sale of annuity products, and the sale of life, disability and long-term care insurance products.business transition planning services.
Comerica competes largely on the basis of industry expertise, the range of products and services offered, pricing and reputation, customer convenience, quality customerof service, and responsiveness to customer needs and the overall relationship with our clients. Ourcustomer relationship. Comerica's competitors are large national and regionalinclude financial institutions as well as smaller financial institutions.of all sizes. Some of Comerica's larger competitors, including certain nationwide banks that have a significant presence in Comerica's market area,markets, may make available to their customershave a broader array of product, pricingproducts and structure alternatives and, due to their asset size, may more easily absorb credit losses in a larger overall portfolio.losses. Some of Comerica's competitors (larger or smaller) may have more liberal lending policies and processes. aggressive pricing standards for loans, deposits and services.
Increasingly, Comerica competes with other companies based on financial technology and capabilities, such as mobile banking applications and funds transfer. Further, Comerica's banking competitors may be subject to a significantly different or reduced degree oflesser regulation due to their asset size or types of products offered. TheySome competitors may also have the ability to more efficiently utilize resources to comply with regulations or may be able to more effectively absorb the costscost of regulations into their existing cost structure. Comerica believes that the level of competition in all geographic markets will continue to increase in the future.

regulations.
In addition to banks, Comerica'sComerica and its banking subsidiaries also face competition from other financial intermediaries, including savings and loan associations, consumer and commercial finance companies, leasing companies, venture capital funds, credit unions, investment banks, insurance companies and securities firms. Competition among providers of financial products and services continues to increase as technology advances have lowered the barriers to entry for financial technology companies, with customers having the opportunity to select from a growing variety of traditional and nontraditional alternatives, including crowdfunding, digital wallets and money transfer services. The ability of non-banking financial institutionsnon-banks to provide services previously limited to commercialtraditional banks has intensified competition. Because non-banking financial institutionsnon-banks are not subject to many of the same
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regulatory restrictions as banks and bank holding companies, they can often operate with greater flexibility and lower cost structures.
In addition,Finally, the industry continues to consolidate, which affects competition by eliminatingeliminates some regional and local institutions, while potentially strengthening acquirers. Comerica believes that the franchiseslevel of acquirers.
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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. 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”) underpursuant to the Bank Holding Company Act of 1956, as amended. 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. ComericaThe 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 Federal Reserve Bank of Dallas.FRB. Comerica Bank & Trust, National Association is federally chartered under federal law and is subject to supervision and regulation by the Office of the Comptroller of the Currency (“OCC”) underpursuant to the National Bank Act. Comerica Bank & Trust, National Association, by virtue of being a national bank, is also a member of the Federal Reserve System. Furthermore, given that Comericathe 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. The Bank's deposits, and those 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 fullest extent provided by law, and therefore Comericathe Bank and Comerica Bank & Trust, National Association are each also subject to regulation and examination by the FDIC. Certain transactions executed by Comericathe 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. ComericaThe 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.
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. (“FINRA”), the Department of Licensing and Regulatory Affairs of the State of Michigan, and the Municipal Securities Rulemaking Board (“MSRB”) and the Securities and Exchange Commission (“SEC”) (in the case of Comerica Securities, Inc.); the Department of Insurance and Financial Services of the State of Michigan (in the case of Comerica Insurance Services, Inc.); and the DOL (in the case of Comerica Securities, Inc. and Comerica Insurance Services, Inc.); and the Securities and Exchange Commission (“SEC”) (in the case of Comerica Securities, Inc. and World Asset Management, Inc.).
Both the scope of the laws and regulations and intensity of supervision to which Comerica’s business isbanks', bank holding companies' and financial institutions' businesses are subject have increased over the past decadecontinue to increase in response to the 2007-2008 financial crisis, as well assubsequent events, and other factors such as technological, economic and market changes. Many of theseregulatory 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. In 2018, with the passage of the Economic Growth, Regulatory Relief and Consumer Protection Act (“EGRRCPA”), as described below, there has beenwas some recalibration of the post-financial crisis framework; however, Comerica’s business remainsbanks', bank holding companies' and financial institutions' businesses remain subject to extensive regulation and supervision. Further, itThe failure of certain banks in the spring of 2023 played a role in another increase in bank regulation, at least some of which could apply to Comerica.
The Community Reinvestment Act of 1977 (“CRA”) requires U.S. banks to help serve the credit needs of their communities. If any bank were to receive a rating under the CRA of less than “Satisfactory,” the bank would be prohibited from engaging in certain activities. Comerica's current CRA rating is too soon for Comerica to predict what legislative or regulatory changes"Outstanding." The CRA regulations were substantially amended in 2023, which may occur as a result of the recent change in leadership resulting from the recent elections, or, if changes occur, the ultimate effect they would have upon the financial condition or results of operations of Comerica.affect future compliance.
Comerica is also subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, both as administered by the SEC, as well as the rules of the New York Stock Exchange.
Described below are material elements of selected laws and regulations applicable to Comerica and its subsidiaries. The descriptions are not intended to be complete and are qualified in their entirety by reference to the full text of the statutes and regulations described. Changes in applicable law or regulation, and in their application by regulatory agencies, cannot be predicted, but they may have a material effect on the business of Comerica and its subsidiaries.

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Economic Growth, Regulatory Relief and Consumer Protection Actand Recent Developments
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. Under EGRRCPA bank holding companies with less than $100 billion of consolidated assets, includingsuch as Comerica, arebecame exempt from all of the Dodd-Frank enhanced prudential standards, except risk committee requirements. As a result, Comerica is no longer subject to Dodd-Frank Act supervisory and company-run stress testing or required to file a resolution plan under Section 165(d) of the Dodd-Frank Act. Comericacurrently is not subject to internalthe remaining Dodd-Frank Act enhanced prudential standards or certain capital and liquidity stress testingrules to large bank holding companies and buffer requirements,depository institutions (the “Tailoring Rules”).
Should Comerica meet or cross the Comprehensive Capital Analysis$100 billion asset threshold and Review (“CCAR”) process or the Liquidity Coverage Ratio.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. In addition, Comerica is no longerwould be required to pay the supervision and regulation fee assessment under the Dodd-Frank Act.

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BanksOn 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 under EGRRCPA for banking organizations with less than $100 billion in total consolidated assets includingof $100 billion or more. Comerica's total consolidated assets are below this $100 billion threshold, but Comerica Bank, arecontinues to invest in potential preparation should it meet that threshold or regulators lower that threshold. If Comerica becomes subject to these 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.
In addition to laws and regulations focusing principally on asset thresholds, examination ratings also exempt from company-run stress testingcan affect Comerica. Adverse examination findings can result in confidential or public enforcement actions, which can affect fees, costs, operational requirements, under the EGRRCPA.and growth initiatives, at both Comerica and each of its subsidiary banks.
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. Comerica became aA financial holding company in 2000. 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. Activities that are “financial"financial in nature”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;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. “Complementary activities”"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.
In order to maintainexercise the full benefits of its status as a bank holding company and a financial holding company, Comerica and each of its depository institution subsidiaries must each remainbe considered “well capitalized” and “well managed,managed.” and Comerica, Comerica Bank and Comerica Bank & Trust, National Association are each “well capitalized” and “well managed” under FRB standards. If Comericaat any time a financial holding company or any subsidiary bank of Comerica were to cease beingis not considered “well capitalized” or “well managed” under applicable regulatory standards, the law and the FRB could place limitations on Comerica’slimit its ability to conduct the broader financial activities permissible for financial holding companies, orand impose limitations or conditions on theits conduct or activities or those of Comerica or its bank and non-bank affiliates. If the deficiencies persisted,persist, the FRB could order Comericathe 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 Comericathe 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.
In addition, Adverse examinations at the Community Reinvestment Act of 1977 (“CRA”) requires U.S. banks to help serve the credit needs of their communities. Comerica Bank’s current rating under the CRA is “satisfactory.” If any subsidiary bankbank-level also could increase costs and limit activities and growth of Comerica were to receive a rating under the CRA of less than “satisfactory,” Comerica would be prohibited from engaging in certain activities.Bank & Trust, National Association and Bank and its subsidiaries.
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 Comericaa 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. Prior approval is required before Comericaa 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 aanother financial holding company) or a bank. In considering applications for approval of acquisitions, the banking regulators may take several factors into account, including whether Comericathe 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.“Satisfactory.” The Bank's current CRA rating is "Outstanding."

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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. 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’sa subject company's outstanding common stock. On March 2, 2020, the FRB issued a final rule revising regulations related to control determinations under the Bank Holding Company Act. The final rule expands the number of presumptions for use in such determinations. Investors should be aware of these requirements when acquiring shares of Comerica’s stock.
Capital and Liquidity
Comerica and its bank subsidiaries are subject to risk-based capital requirements and guidelines imposed by the FRB, FDIC and/or the OCC. 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,those agencies, 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 asset class.maturity. 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. Tier 1 capital is equal to CET1 capital plus additional Tier 1 capital. Tier 2 capital primarily includes qualifying subordinated debt and qualifying allowance for credit losses. On September 30, 2020, the federal banking agencies issued a final rule that provides banking organizations that implement the current expected
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credit loss (“CECL”) standard during the 2020 calendar year the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period. Comerica elected this deferral and at December 31, 2020, $72 million, or a cumulative 11-basis-point benefit to the capital ratios, was deferred. More information is set forth under the caption “Capital” in the “Capital” section located on pages F-19 through F-21.Financial Section of this report. Total capital is the amount equal to Tier 1 capital plus Tier 2 Capital.
Entities that engage in trading activities that exceed specified levels also are required to maintain capital to account for market risk. Market risk includes changes in the market value of trading account, foreign exchange, and commodity positions, whether resulting from broad market movements (such as changes in the general level of interest rates, equity prices, foreign exchange rates, or commodity prices) or from position specific factors. From time to time, Comerica’s trading activities may exceed specified regulatory levels, in which case Comerica adjusts its risk-weighted assets to account for market risk as required.
Comerica and its bank subsidiaries, like other bankBank holding companies and banks are 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. 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. Comericabonuses, 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.
To be well capitalized, Comerica’s bank subsidiariesbanks are required to maintain a totalleverage ratio, CET1 capital ratio, Tier 1 capital ratio CET1and total capital ratio and a leverage ratio equal to at least 10.05.0 percent, 6.5 percent, 8.0 percent 6.5 percent and 5.010.0 percent, respectively. 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. 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.
Failure 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 Comerica’s or its bank subsidiaries’the ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications, or other restrictions on growth.
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At December 31, 2020,2023, 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, 2020
CET1 capital (minimum $3.0 billion (Consolidated))$6,919 $7,278 
Tier 1 capital (minimum $4.0 billion (Consolidated))7,313 7,278 
Total capital (minimum $5.4 billion (Consolidated))8,833 8,547 
Risk-weighted assets66,931 66,759 
Adjusted average assets (fourth quarter)84,705 84,536 
CET1 capital to risk-weighted assets (minimum 4.5%)10.34 %10.90 %
Tier 1 capital to risk-weighted assets (minimum 6.0%)10.93 10.90 
Total capital to risk-weighted assets (minimum 8.0%)13.20 12.80 
Tier 1 capital to average assets (minimum 4.0%)8.63 8.61 
Capital conservation buffer (minimum 2.5%)4.93 4.80 
December 31, 2019
CET1 capital (minimum $3.1 billion (Consolidated))$6,919 $7,199 
Tier 1 capital (minimum $4.1 billion (Consolidated))6,919 7,199 
Total capital (minimum $5.5 billion (Consolidated))8,282 8,371 
Risk-weighted assets68,273 68,071 
Adjusted average assets (fourth quarter)72,773 72,564 
CET1 capital to risk-weighted assets (minimum 4.5%)10.13 %10.58 %
Tier 1 capital to risk-weighted assets (minimum 6.0%)10.13 10.58 
Total capital to risk-weighted assets (minimum 8.0%)12.13 12.30 
Tier 1 capital to average assets (minimum 4.0%)9.51 9.92 
Capital conservation buffer (minimum 2.5%)4.13 4.30 
(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 assets75,901 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 assets78,871 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 located on pages F-19 through F-21 ofin the Financial Section
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of this report and Note 20 of the Notes to Consolidated Financial Statements located on pages F-96 through F-98 ofin the Financial Section of this report.
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. FDICIA establishes five capital tiers: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically undercapitalized.” An institution that fails to remain well capitalized becomes subject to a series of restrictions that increase in severity as its capital condition weakens. Such restrictions may include a prohibition on capital distributions, restrictions on asset growth or restrictions on the ability to receive regulatory approval of applications. The FDICIA also provides for enhanced supervisory authority over undercapitalized institutions, including authority for the appointment of a conservator or receiver for the institution.
As of December 31, 2020, 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. The standards relate generally to, among others, earnings, liquidity, operations and management, asset quality, various risk and management exposures (e.g., credit, operational, market, interest rate, etc.) and executive compensation. The agencies are authorized to take action against institutions that fail to meet such standards.
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.
Dividends
    Comerica Incorporated is a legal entity separate and distinct from its banking and other subsidiaries. Since Comerica’s consolidated net income and liquidity consists largely of net income of and dividends received from Comerica’s bank subsidiaries, Comerica’s ability to pay dividends and repurchase shares depends upon its receipt of dividends from these subsidiaries. There are statutory and regulatory requirements applicable to the payment of dividends by subsidiary banks to
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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 Bank and Comerica Bank & Trust, National AssociationBanks 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. At January 1, 2021,2024, Comerica's subsidiary banks could declare aggregate dividends of approximately $12$400 million from retained net profits of the preceding two years. Comerica's subsidiary banks declared dividends of $498$675 million in 2020, $1.22023, $1.0 billion in 20192022 and $1.1 billion$852 million in 2018.
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.2021.
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. 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, Comericathe 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.
FRB supervisory guidance generally provides that a bank holding company should not paymaintain its existing rate of dividends on common stock unless (1) the bank holding company’sorganization’s net income over the last four quarters (net of dividends paid) ispast year has been sufficient to fully fund the dividends, (2) the prospective rate of earnings retention appears consistent with the organization's capital needs, asset quality and overall financial condition of the bank holding company and its subsidiaries and (3) the bank holding companyorganization will continue to meet minimum required capital adequacy ratios. The supervisory guidance also provides that a bank holding company should inform the FRB reasonably in advance of declaring or paying a dividend that exceeds earnings for the period for which the dividend is being
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paid or that could result in a material adverse change to the bank holding company’s capital structure. BankThe guidance suggests that bank holding companies also are required to consult with the FRB before redeeming or repurchasing capital instruments, (including common stock), or materially increasing dividends. In addition, FRB regulation requires bank holding companies to provide notice to or obtain approval from the FRB prior to purchasing or redeeming equity securities under certain circumstances.
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. For example, Section 23A of the Federal Reserve Act limits the aggregate outstanding amount of any insured depository institution’s loans and other “covered transactions” with any particular nonbank affiliate (including financial subsidiaries) to no more than 10% of the institution’s total capital and limits the aggregate outstanding amount of any insured depository institution’s covered transactions with all of its nonbank affiliates to no more than 20% of its total capital. “Covered transactions” are defined by statute to include (i) a loan or extension of credit to an affiliate, (ii) a purchase of securities issued by an affiliate, (iii) a purchase of assets (unless otherwise exempted by the FRB) from the affiliate, (iv) the acceptance of securities issued by the affiliate as collateral for a loan, (v) the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate and (vi) securities borrowing or lending transactions and derivative transactions with an affiliate, to the extent that either causes a bank or its affiliate to have credit exposure to the securities borrowing/lending or derivative counterparty. Section 23A of the Federal Reserve Act also generally requires that an insured depository institution’s loans to its nonbank affiliates be, at a minimum, 100% secured, and Section 23B of the Federal Reserve Act generally requires that an insured depository institution’s transactions with its nonbank affiliates be on terms and under circumstances that are substantially the same or at least as favorable as those prevailing for comparable transactions with nonaffiliates.
Loans to Insiders
Federal banking laws also place similarReserve Act and Regulation O restrictions on loans to directors, executive officers, principal stockholders and other extensions of credit by FDIC-insured banks, such as Comerica Bank and Comerica Bank & Trust, National Association,their related interests (collectively, “insiders”) apply to all insured institutions and their subsidiaries and holding companies. These restrictions include conditions that must be met before insider loans can be made, limits on loans to an individual insider and an aggregate limitation on all loans to insiders and their directors, executive officersrelated interests. These loans cannot exceed the institution’s total unimpaired capital and principal shareholders.surplus, and the Federal Reserve Board may determine that a lesser amount is appropriate. Insiders are subject to enforcement actions for knowingly accepting loans in violation of applicable restrictions. The Dodd-Frank Act amended the statutes placing limitations on loans to insiders by including credit exposures to the person arising from a derivatives transaction, repurchase agreement, reverse repurchase agreement, securities lending transaction or securities borrowing transaction between the member bank and the person within the definition of an extension of credit.
Federal Laws Applicable to Credit Transactions
Comerica's loan operations are subject to federal laws and implementing regulations applicable to credit transactions, such as the Truth-In-Lending Act, the Home Mortgage Disclosure Act of 1975, the Equal Credit Opportunity Act, the Fair
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Credit Reporting Act of 1978-,("FCRA"), the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, the Dodd-Frank Act and rules and regulations of the various federal agencies charged with the responsibility of implementing these federal laws. State usury laws and federal laws concerning interest rates apply to interest and other charges collected or contracted for by Comerica.
Federal Laws Applicable to Deposit Operations
Comerica's deposit operations are subject to multiple federal laws, including the Right to Financial Privacy Act, the Truth in Savings Act and the Electronic Funds Transfer Act. The Dodd-Frank Act amended the Electronic Funds Transfer Act to, among other things, give the Federal Reserve Board the authority to establish rules regarding interchange fees charged for electronic debit transactions by payment card issuers having assets over $10 billion and to enforce a new statutory requirement that such fees be reasonable and proportional to the actual cost of a transaction to the issuer. The FRB is currently soliciting comments on a proposal to lower the maximum interchange fee a large debit card issuer can receive for a debit card transaction.
Data Privacy and Cybersecurity Regulation
Comerica is subject to many U.S. federal, U.S. state and international laws and regulations governing consumer data privacy protection, which require, among other things, maintaining policies and procedures to protect the non-public confidential information of customers and employees. 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. Other laws and regulations, at the international, federal and state levels, limit Comerica’s ability to share certain information with affiliates and non-affiliates for marketing and/or non-marketing purposes, or to contact customers with marketing offers. 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. Because we have a limited presence in New York, we are subject to
Federal banking and securities regulations also impose certain requirements on Comerica and its subsidiary banks in the event of the New York Department of Financial Service’s Cybersecurity Requirements for Financial Services Companies, which include maintaining a cybersecurity program and policies and breach notification requirements.
cyber- or computer-related security incident. In October 2016,2021, 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. 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. The SEC recently issued a Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure rule, which became effective in December of 2023, and which requires that a registered company file a Form 8-K to disclose the occurrence of a material cybersecurity incident within four (4) business days of determining that such an advance noticeincident has occurred. The rule also requires that a registered company include certain information regarding its information security program as part of proposed rulemaking regarding enhanced cyber risk management standards, which would apply toits annual Form 10-K filing, including a wide rangediscussion of large financial institutions, including Comerica,its processes for assessing, identifying, and their third-party service providers. The proposed standards would expand existingmanaging material risks from cybersecurity regulationsthreats and guidance to focus on cyber risk governancea description of oversight and management; management of internalcybersecurity threats at the board and external dependencies; and incident response, cyber resilience and situational awareness. In addition, the proposal contemplates more stringent standards for institutions with systems that are critical to the financial sector. Comerica continues to monitor the development of this rule.management levels.
Data privacy and data protection are also areas of increasing state legislative focus. For example, in June of 2018, the Governor of California signed into law the California Consumer Privacy Act of 2018, (theas amended by the California Privacy Rights Act of 2020 (collectively, the “CCPA”). 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. The CCPA will givegives consumers the right to request disclosure of information collected about them, and whether that information has been sold or shared with others, the right to request deletion of personal information (subject to certain exceptions), the right to opt out of the sale of the consumer’s personal information, and the right not to be discriminated against for exercising these rights. The CCPA contains several exemptions, including an exemption applicable to information that is collected, processed, sold or disclosed pursuant to the Gramm-Leach-Bliley Act. The California Attorney General adopted regulations implementing the CCPA on August 14, 2020. Comerica has a physical footprint in California and is required to comply with the CCPA. In addition, similarSimilar laws may also be adopted by other states where Comerica does business.states. The federal government may also pass data privacy or data protection legislation.
Like other lenders, Comericathe Bank and other of Comerica’s subsidiaries use credit bureau data in their underwriting activities. Use of such data is regulated under the Fair Credit Reporting Act (��FCRA”),FCRA and the FCRA also regulates reporting
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information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates, and using affiliate data for marketing purposes. 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. The FDIC imposes a risk-based deposit premium assessment system, where the assessment rates for an insured depository institution are determined by an assessment rate calculator, which is based on a number of elements to measure the risk each institution poses to the DIF. The assessment rate is applied to total average assets less tangible equity. Under the current system, premiums are
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assessed quarterly and could increase if, for example, criticized loans and/or other higher risk assets increase or balance sheet liquidity decreases.decreases, or a bank's supervisory ratings worsen. For 2020,2023, Comerica’s FDIC insurance expense totaled $33$180 million.
On October 18, 2022, the FDIC finalized a rule that would increase initial base deposit insurance assessment rates by 2 basis points, beginning with the first quarterly assessment period of 2023. The FDIC, as required under the Federal Deposit Insurance Act, established a plan in September 2020 to restore the DIF reserve ratio to meet or exceed the statutory minimum of 1.35 percent within eight years. This plan did not include an increase in the deposit insurance assessment rate. Based on the FDIC’s recent projections, however, the FDIC determined that the DIF reserve ratio is at risk of not reaching the statutory minimum by the statutory deadline of September 30, 2028 without increasing the deposit insurance assessment rates. 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.
As a result of bank failures during early 2023, regulators invoked a "systemic risk exception" in an effort to strengthen public confidence in the banking system and protect depositors. As required by law, the FDIC announced that any losses to the DIF to support uninsured depositors will be recovered by a special assessment on banking organizations. On November 16, 2023, the FDIC adopted a final rule to implement this special assessment based on a banking organization’s estimated uninsured deposits as of December 31, 2022, excluding the first $5 billion in estimated uninsured deposits. Comerica recorded an expense of $109 million as a result of this special assessment during the year ended December 31, 2023.
Anti-Money Laundering Regulations
Comerica is subject to several federal laws that are designed to combat money laundering, terrorist financing, and transactions with persons, companies or foreign governments designated by U.S. authorities ("AML laws"). This category of laws includes the BankCurrency and Foreign Transactions Reporting Act of 170, as amended (the "Bank Secrecy Act,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.
The AML laws and their implementing regulations require insured depository institutions, broker-dealers, and certain other financial institutions to have policies, procedures, and controls to detect, prevent, and report money laundering and terrorist financing. The AML laws and their regulations also provide for information sharing, subject to conditions, between federal law enforcement agencies and financial institutions, as well as among financial institutions, for counter-terrorism purposes. Federal banking regulators are required, when reviewing bank holding company acquisition and bank merger applications, to take into account the effectiveness of the anti-money laundering activities of the applicants. To comply with these obligations, Comerica and its various operating units have implemented appropriate internal practices, procedures, and controls.
The Anti-Money Laundering Act of 2020 (the “AML 2020 Act”) was enacted as part of the National Defense Authorization Act for Fiscal Year 2021. The AML 2020 Act is the most significant revision to the AML laws since the USA PATRIOT Act. The AML 2020 Act clarifies and streamlines the Bank Secrecy Act and AML obligations in the following ways: it requires U.S. entities and entities doing business in the United States to report into a national registry maintained by the Financial Crimes Enforcement Network (“FinCEN”) certain beneficial ownership information, subject to exceptions; modernizes the statutory definition of “financial institution” to include (i) entities that provide services involving “value that substitutes for currency,” which includes stored value and virtual currencies and (ii) any person engaged in the trade of antiquities, including an advisor, consultant or any other person who deals in the sale of antiquities; enhances penalties for Bank Secrecy Act and AML violations, including claw back of bonuses; increases AML whistleblower awards and expands whistleblower protections; requires the Secretary of the Treasury to establish and update every four years National AML Priorities, which are incorporated into the Bank Secrecy Act compliance programs at financial institutions subject to the Bank Secrecy Act; among other amendments. Implementing regulations concerning certain provisions of the AML 2020 Act have been proposed by FinCEN, but not all have been finalized. On September 29, 2022, FinCEN issued a final rule establishing a beneficial ownership information reporting requirement under the Corporate Transparency Act (CTA), which was passed as part of the AML 2020 Act. The rule, which became effective January 1, 2024, requires most entities created in or registered to do business in the United States, subject to certain exceptions, to report information about their beneficial owners to FinCEN.
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Office of Foreign Assets Control Regulation
    The Office of Foreign Assets Control (“OFAC”) is responsible for administering economic sanctions that affect transactions with designated foreign countries, nationals and others, as defined by various Executive Orders and Acts of Congress. OFAC-administered sanctions take many different forms. For example, sanctions may include: (1) restrictions on trade with or investment in a sanctioned country, including prohibitions against direct or indirect imports from and exports to a sanctioned country and prohibitions on U.S. persons engaging in financial transactions relating to, making investments in, or providing investment-related advice or assistance to, a sanctioned country; and (2) a blocking of assets in which the government or “specially designated nationals” of the sanctioned country have an interest, by prohibiting transfers of property subject to U.S. jurisdiction (including property in the possession or control of U.S. persons). OFAC also publishes lists of persons, organizations, and countries suspected of aiding, harboring or engaging in terrorist acts, known as Specially Designated Nationals and Blocked Persons. Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC. Failure to comply with these sanctions could have serious legal and reputational consequences.
Interstate Banking and Branching
The Interstate Banking and Branching Efficiency Act (the “Interstate Act”), as amended by the Dodd-Frank Act, permits a bank holding company, with FRB approval, to acquire banking institutions located in states other than the bank holding company's home state without regard to whether the transaction is prohibited under state law, but subject to any state requirement that the bank has been organized and operating for a minimum period of time, not to exceed five years, and the requirement that the bank holding company, prior to and following the proposed acquisition, control no more than 10 percent of the total amount of deposits of insured depository institutions in the U.S. and no more than 30 percent of such deposits in that state (or such amount as established by state law if such amount is lower than 30 percent). The Interstate Act, as amended, also authorizes banks to operate branch offices outside their home states by merging with out-of-state banks, purchasing branches in other states and by establishing de novo branches in other states, subject to various conditions. 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. A bank holding company or bank must be well capitalized and well managed in order to take advantage of these interstate banking and branching provisions.
Comerica has consolidated the majority of its banking business into one bank, Comerica Bank, with banking centers in Texas, Arizona, California, Florida and Michigan, as well as Canada.
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Source of Strength and Cross-Guarantee Requirements
Federal law and FRB regulations require that bank holding companies serve as a source of strength to each subsidiary bank and commit resources to support each subsidiary bank. This support may be required at times when a bank holding company may not be able to provide such support without adversely affecting its ability to meet other obligations. The FRB may require a bank holding company to make capital injections into a troubled subsidiary bank and may charge the bank holding company with engaging in unsafe and unsound practices if the bank holding company fails to commit resources to such a subsidiary bank or if it undertakes actions that the FRB believes might jeopardize the bank holding company’s ability to commit resources to such subsidiary bank. Under these requirements, Comerica may in the future be required to provide financial assistance to its subsidiary banks should they experience financial distress. Capital loans by Comerica to its subsidiary banks would be subordinate in right of payment to deposits and certain other debts of the subsidiary banks. In the event of Comerica’s bankruptcy, any commitment by Comerica to a federal bank regulatory agency to maintain the capital of its subsidiary banks would be assumed by the bankruptcy trustee and entitled to a priority of payment.
Similarly, under the cross-guarantee provisions of the Federal Deposit Insurance Act, in the event of a loss suffered or anticipated by the FDIC (either as a result of the failure of a banking subsidiary or related to FDIC assistance provided to such a subsidiary in danger of failure), the other banking subsidiaries may be assessed for the FDIC’s loss, subject to certain exceptions. An FDIC cross-guarantee claim against a depository institution is superior in right of payment to claims of the holding company and its affiliates against such depository institution.
Supervisory and Enforcement Powers of Federal and State Banking Agencies
The FRB and other federal and state banking agencies have broad supervisory and enforcement powers, including, without limitation, and as prescribed to each agency by applicable law, the power to conduct examinations and investigations, impose nonpublic supervisory agreements, issue cease and desist orders, terminate deposit insurance, impose substantial fines and other civil penalties and appoint a conservator or receiver. Failure to comply with applicable laws or regulations could subject Comerica or its banking subsidiaries, as well as officers and directors of these organizations, to administrative sanctions and potentially substantial civil and criminal penalties. Bank regulators regularly examine the operations of bank holding companies and banks, and the results of these examinations, as well as certain supervisory and enforcement actions, are confidential and may not be made public. Regulatory and supervisory scrutiny of regional banking organizations has recently increased as a result of the bank failures in the spring of 2023.
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Resolution Plans
As a depository institution with $50 billion or more of total consolidated assets, Comericathe Bank is required to periodically file a resolution plan with the FDIC. On April 16, 2019, the FDIC released an advanced notice of proposed rulemaking (“ANPR”) with respect to the FDIC’s bank resolution plan requirements meant to better tailor bank resolution plans to a firm’s size, complexity and risk profile. The ANPR offers two alternative approachesIn connection with this rulemaking, the FDIC placed a moratorium on resolution plans until the rulemaking process was complete.
On June 25, 2021, the FDIC lifted the moratorium on resolution plan submissions for institutions with $100 billion or more in total assets. Under the FDIC’s Statement on Resolution Plans for IDIs, an institution will be required to submit resolution planning for commenters to consider and solicits comment on how to tailorplans when it has $100 billion or more in total assets as determined based upon the requirementsaverage of the institution’s four most recent Reports of Condition and Income.
On August 29, 2023, the FDIC released a proposed rule to reflect differences in size, complexity and other factors among the population of largethat would require insured depository institutions and on whether to increase the current thresholdwith assets of at least $50 billion in assets that triggers applicationbut less than $100 billion, such as the Bank, to submit resolution-related informational filings. Comerica is monitoring the development of the rule.this proposal.
Incentive-Based Compensation
    Comerica is subject to guidance issued by the FRB, OCC and FDIC intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking. The guidance, which covers senior executives as well as other employees who, either individually or as part of a group, have the ability to expose the banking organization to material amounts of risk, is based upon the key principles that a banking organization's incentive compensation arrangements (i) should provide employees incentives that appropriately balance risk and financial results in a manner that does not encourage employees to expose their organizations to imprudent risk; (ii) should be compatible with effective controls and risk-management; and (iii) should be supported by strong corporate governance, including active and effective oversight by the organization's board of directors. Banking organizations are expected to review regularly their incentive compensation arrangements based on these three principles. Where there are deficiencies in the incentive compensation arrangements, they should be promptly addressed. 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. Similar to other large banking organizations, Comerica has been subject to a continuing review of incentive compensation policies and practices by representatives of the FRB, the Federal Reserve Bank of Dallas and the Texas Department of Banking since 2011. As part of that review, Comerica has undertaken a thorough analysis of all the incentive compensation programs throughout the organization, the individuals covered by each plan and the risks inherent in each plan’s design and implementation. Comerica has determined that risks arising from employee compensation plans are not reasonably likely to have a material adverse effect on Comerica. It is Comerica’s intent to continue monitoring regulations and best practices for sound incentive compensation practices.
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In 2016, the FRB, OCC and several other federal financial regulators revised and re-proposed rules to implement Section 956 of the Dodd-Frank Act. 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 supplementswould supplement the final guidance issued by the banking agencies in June 2010. Consistent with the Dodd-Frank Act, the proposed rule would impose heightened standards for institutions with $50 billion or more in total consolidated assets, which includes Comerica. For these larger institutions, the proposed rule would require the deferral of at least 40 percent of incentive-based payments for designated executives and significant risk-takers who individually have the ability to expose the institution to possible losses that are substantial in relation to the institution's size, capital or overall risk tolerance. Moreover, incentive-based compensation of these individuals would be subject to potential clawback for seven years following vesting. Further, the rule imposeswould 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 rule.proposal.
The Volcker Rule
Comerica is prohibited under the Volcker Rule from (1) engaging in short-term proprietary trading for its own account and (2) having certain ownership interests in and relationships with hedge funds or private equity funds ("Covered Funds"). The Volcker Rule regulations contain exemptions for market-making, hedging, underwriting and trading in U.S. government and agency obligations, and permit certain ownership interests in certain types of Covered Funds to be retained. They also permit the offering and sponsoring of Covered Funds under certain conditions. The Volcker Rule regulations impose significant compliance and reporting obligations on banking entities.
Comerica has compliance programs required by the Volcker Rule and has either divested or received extensions for any holdings in Covered Funds. Additional information on Comerica's portfolio
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Table of indirect (through funds) private equity and venture capital investments, which includes the Covered Funds, is set forth in Note 1 of the Notes to Consolidated Financial Statements located on page F-55 of the Financial Section of this report.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. The final rule formalized a three-tiered approach to compliance program requirements for banking entities based on their level of trading activity. As a banking entity with “moderate” trading assets and liabilities (less than $20 billion), Comerica is subject to simplified compliance requirements. In June 2020, regulators finalized a rule further modifying the Volcker Rule’s prohibition on banking entities investing in or sponsoring Covered Funds. The final rule modifies three areas of the rule by: streamlining the covered funds portion of the rule; addressing the extraterritorial treatment of certain foreign funds; and permitting banking entities to offer financial services and engage in other activities that do not raise concerns that the Volcker Rule was intended to address. Comerica continues to follow Volcker Rule developments.
Derivative Transactions
As a state member bank, Comericathe 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. Even though many of the requirements do not impact Comerica directly, since Comericathe 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. On November 5, 2018, the CFTC issued a final rule that sets the permanent aggregate gross notional amount threshold for the de minimis exception from the definition of swap dealer at $8 billion in swap dealing activity entered into by a person over the preceding 12 months. Comerica's swap dealing activities for purposes of the de minimis exception are currently below this threshold.
The initial margin requirements for non-centrally cleared swaps and security-based swaps will bewere effective for Comerica’s swap and security-based swap counterparties that are swap dealers or major swap participants on September 1, 2022, at which timeand such counterparties will beare required to collect initial margin from Comerica. 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.  Comerica is currently working toward meeting compliance with the initial margin requirements.
Consumer Financial Protection Bureau and Certain Recent Consumer Finance Regulations
Comerica is subject to regulation by the CFPB, which has a 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 Comericathe Bank, and their depositarydepository affiliates. Among other things, the CFPB is focused on reducing or eliminating so-called "junk fees" which include some sources of bank fee revenue.
Comerica is also subject to certain state consumer protection laws, and under the Dodd-Frank Act, state attorneys general and other state officials are empowered to enforce certain federal consumer protection laws and regulations. In recent years, state authorities have increased their focus on and enforcement of consumer protection rules. These federal and state
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consumer protection laws apply to a broad range of Comerica’s activities and to various aspects of its business and include laws relating to interest rates, fair lending, disclosures of credit terms and estimated transaction costs to consumer borrowers, debt collection practices, the use of and the provision of information to consumer reporting agencies, and the prohibition of unfair, deceptive or abusive acts or practices in connection with the offer, sale or provision of consumer financial products and services.
UNDERWRITING APPROACH
The loan portfolio is a primary source of profitability and risk, so proper loan underwriting is critical to Comerica's long-term financial success. Comerica extends credit to businesses, individuals and public entities based on sound lending principles and consistent with prudent banking practice. During the loan underwriting process, a qualitative and quantitative analysis of potential credit facilities is performed, and the credit risks associated with each relationship are evaluated. Important factors considered as part of the underwriting process for new loans and loan renewals include:
•People: Including the competence, integrity and succession planning of customers.
•Purpose: The legal, logical and productive purposes of the credit facility.
•Payment: Including the source, timing and probability of payment.
•Protection: Including obtaining alternative sources of repayment, securing the loan, as appropriate, with collateral and/or third-party guarantees and ensuring appropriate legal documentation is obtained.
•Perspective: The risk/reward relationship and pricing elements (cost of funds; servicing costs; time value of money; credit risk).
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-adjustedrisk-
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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.
Credit Approval and Monitoring    
Approval of new loan exposure and oversight and monitoring of Comerica's loan portfolio is the joint responsibility of the Credit Risk Management and Decisioning department and the Credit Underwriting department (collectively referred to as “Credit”), plus the business units (“Line”). Credit assists the Line with underwriting by providing objective financial analysis, including an assessment of the borrower's business model, balance sheet, cash flow and collateral. The approval of new loan exposure is the joint responsibility of Credit Risk Management and Decisioning and the Line. Each commercial borrower relationship is assigned an internal risk rating by Credit Risk Management and Decisioning. Further, Credit updates the assigned internal risk rating as new information becomes available as a result of periodic reviews of credit quality, a change in borrower performance or approval of new loan exposure. The goal of the internal risk rating framework is to support Comerica's risk management capability, including its ability to identify and manage changes in the credit risk profile of its portfolio, predict future losses and price the loans appropriately for risk. Finally, the Line and Credit (including its Portfolio RiskCredit Analytics and Strategy department) work together to insure the overall credit risk within the loan portfolio is consistent with the bank’sBank’s Credit Risk Appetite.
Credit Policy
Comerica maintains a comprehensive set of credit policies. Comerica's credit policies provide Line and Credit Personnel with a framework of sound underwriting practices and potential loan structures. These credit policies also provide the framework for loan committee approval authorities based on its internal risk-rating system and establish maximum exposure limits based on risk ratings and Comerica's legal lending limit. Credit, in conjunction with the Line, monitors compliance with the credit policies and modifies the existing policies as necessary. New or modified policies/guidelines require approval by the Strategic Credit Committee, chaired by Comerica's Chief Credit Officer and comprised of senior credit, market and risk management executives.
Commercial Loan Portfolio
    Commercial loans are underwritten using a comprehensive analysis of the borrower's operations. The underwriting process includes an analysis of some or all of the factors listed below:
•The borrower's business model and industry characteristics.
•Periodic review of financial statements including financial statements audited by an independent certified public accountant when appropriate.
•The proforma financial condition including financial projections.
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•The borrower's sources and uses of funds.
•The borrower's debt service capacity.
•The guarantor's financial strength.
•A comprehensive review of the quality and value of collateral, including independent third-party appraisals of machinery and equipment and commercial real estate, as appropriate, to determine the advance rates.
•Physical inspection of collateral and audits of receivables, as appropriate.
    For additional information specific to our Energy loan portfolio and certain leveraged transactions inbusinesses within our commercial portfolio, please see the captions “Energy Lending” and "Leveraged Loans" on pages F-31 through F-32caption “Concentrations of Credit Risk" in the Financial Section of this report.
Commercial Real Estate (CRE) Loan Portfolio
Comerica's CRE loan portfolio consists of real estate construction and commercial mortgage loans and includes loans to real estate developers and investors and loans secured by owner-occupied real estate. Comerica's CRE loan underwriting policies are consistent with the approach described above and provide maximum loan-to-value ratios that limit the size of a loan to a maximum percentage of the value of the real estate collateral securing the loan. The loan-to-value percentage varies by the type of collateral and is limited by advance rates established by our regulators. Our loan-to-value limitations are, in certain cases, more restrictive than those required by regulators and are influenced by other risk factors such as the financial strength of the borrower or guarantor, the equity provided to the project and the viability of the project itself. CRE loans generally require cash equity. CRE loans are normally originated with full recourse or limited recourse to all principals and owners. There are limitations to the size of a single project loan and to the aggregate dollar exposure to a single guarantor. For additional information specific to our CRE loan portfolio, please see the caption “Commercial Real Estate Lending” on pages F-29 through F-30 ofin the Financial Section of this report.
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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. After origination, internal risk ratings are assigned based on payment status and product type.
Comerica does not originate subprime loans. Although a standard industry definition for subprime loans (including subprime mortgage loans) does not exist, Comerica defines subprime loans as specific product offerings for higher risk borrowers, including individuals with one or a combination of high credit risk factors. These credit factors include low FICO scores, poor patterns of payment history, high debt-to-income ratios and elevated loan-to-value. Comerica generally considers subprime FICO scores to be those below 620 on a secured basis (excluding loans with cash or near-cash collateral and adequate income to make payments) and below 660 for unsecured loans. 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” on page F-31 ofin the Financial Section of this report.
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. As of December 31, 2020,2023, Comerica and its subsidiaries had 7,4297,496 full-time and 441367 part-time employees, primarily located in Comerica’s coreprimary markets of Michigan, Texas, California, Arizona, Florida and Florida.North Carolina. 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.
The Board of Directors and the Governance, Compensation and Nominating Committee are regularly updated onof the Board reviews Comerica’s talent development and human capital management strategies.strategy and talent development program, including recruitment, evaluations and development activities. This Committee also reviews Comerica’s employee diversity, equity and inclusion initiatives, as well as the results of those initiatives. The full Board, either directly or through one or more of its committees, is provided annual workforce updates. To enhance the Board’s understanding of Comerica's talent pipeline, the Board routinely meets with high-potential employees in formal and informal settings.
Productivity. Comerica carefully manages the size of its workforce and reallocates resources as needed. As of December 31, 2020,2023, Comerica’s total employee headcount, on a full-time equivalent basis, was 1413 percent lower than as of December 31, 2015. Additionally, for 2020,2023, Comerica managed an average of $15$16 million of loans and deposits per employee.
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Diversity. Comerica has an organization-wide focus to improve recruitment and retention of women and ethnic minorities especially in leadership positions through its diversity outreach, diversity awareness and learning program and leadership development programs.on an inclusive workforce that resembles the communities that it serves. As of December 31, 2020,2023, Comerica’s U.S. colleagues had the following attributes:
Female (%)Minority (%)
Female (%)Female (%)Minority (%)
EmployeesEmployees6541Employees6343
Officials and Managers(1)
Officials and Managers(1)
5228
Officials and Managers(1)
5331
Executive Officers(2)
Executive Officers(2)
3823
Executive Officers(2)
3721
(1) Based on EEO-1 job classifications.
(2) Using Securities and Exchange Commission definition.
Forbes recognized Comerica was recognizedas "One of Dallas-Fort Worth's Top Workplaces." Newsweek listed Comerica in 2020 asits 2024 list of America’s Greatest Workplaces for Diversity. The Hispanic Association on Corporate Responsibility rated Comerica with five stars – the DiversityInc. No. 3 Top Regional Company for Diversity and LATINA Style's Top 50 Best Company for Latinas to Workhighest marking – in the U.S, as well as receiving a perfect scorecategory of 100% on thegovernance in its 2023 Corporate Inclusion Index. Human Rights Campaign's Corporate Equality Index (for LGBTQLGBTQ+ 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 ERGs help support and sustain Comerica's diversity and inclusion model. 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.
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Compensation and Benefits. Comerica strives to provide pay, benefits and servicesprograms that help meet the varying needs of its employees. Compensation and benefits include market-competitive pay, retirement programs, broad-based bonuses, an employee stock purchase plan, health and welfare benefits, an employee assistance program, financial counseling, paid time off, family leave and flexible work schedules. Effective January 2018,In 2023, Comerica increasedkept its minimum wage to $15 per hour, and in 2020, further increased its minimum wage to $16.50at $18 per hour. Additionally, for 2023, Comerica held the proportion that employees pay for their medical and dental benefits steady, absorbing proportional cost increases. Comerica periodically reviewsexamines the main components of compensation, like salaries and benefitsbonuses, by grade level and position to ensure similar positions are paid comparativelyreceive similar pay to the extent other factors can be equalized (e.g., time in position, performance, education). Comerica also considers equitable benefits and to ensurelooks at policies and practices that Comerica has a competitive and valuable offering to meet the well-being and needspotentially drive inequities. Solicitation of its employees.salary history from applicants is prohibited.
Attraction, Development and Retention. Comerica measures the success of its talent acquisition strategy on speed and quality of acquisition, diversity of its applicant pool, and new colleagues, retention, andcolleague retention. In addition, overall performance metrics. Each of these metrics isare tracked for each of the key business lines.line. Sourcing strategies and support structures are evaluated and modified to ensure that performance targets are met consistently.
Comerica has also createdoperates and continues to evolve multiple internal programs to support the development and retention of its colleagues, including Comerica University, internal Leadership Development, and Emerging Leaders, and Senior Leadership programs designed to traindevelop high potential employees, Com-Tech college coursesa Future-Ready Technology skills program to help re-skillre- and up-skill Technology colleagues, a Managing Essentials Certificate series for managers and organizational change management learning for all colleagues. In 2020,2023, over 6,90014,000 skills-based coursestitles 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. For example, starting in October 2020, Comerica is a participant in the CEO Actionprograms and volunteerism. 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 Racevolunteer events. This includes volunteer opportunities related and Equity Fellows Program, where one or more Comerica colleagues will commit one yearunrelated to the Fellows Program while still being employed by Comerica receiving their full salary and benefits.Comerica.
Comerica’s investment in its employees has resulted in a long-tenured workforce, with average tenure of 12.5 yearsaround 12 years of service. Of the approximately 1,4852,330 open employee positions filled in 2020, 58%2023, 61% were filled by external hires and 42%39% positions were filled by internal hires. Employee turnover for 20202023 was 11.6%approximately 15%. In 2020,2023, Comerica conducted our firstits third enterprise-wide employee engagement survey, and nearly 6,700with approximately 85% of colleagues participated.
COVID-19. In 2020, in response to the COVID-19 pandemic, over 65 percent of Comerica’s colleagues were able to work remotely, and colleagues whose functions required them to be physically present were eligible for additional "Promise Pay" of up to $175 per week from late March through early June. Comerica also provided stipends to help cover unexpected dependent- and elder-care costs, no-cost health care benefits pertaining to COVID-19 and free telehealth visits and outplacement assistance for spouses of employees. While not a direct response to COVID-19, Comerica did not reduce salaries or any other benefits during this time to support our colleagues through the pandemic.participating.
AVAILABLE INFORMATION
Comerica maintains an Internet website at www.comerica.com where the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports are available without charge, as soon as reasonably practicable after those reports are filed with or furnished to the SEC. Investors should regularly review that website because Comerica regularly and routinely posts other important information there, particularly in the "Investor Relations" portion of the website.
The Code of Business Conduct and Ethics for Employees, the Code of Business Conduct and Ethics for Members of the Board of Directors and the Senior Financial Officer Code of Ethics adopted by Comerica are also available on the Internet website and are available in print to any shareholder who requests them. Such requests should be made in writing to the Corporate Secretary at Comerica Incorporated, Comerica Bank Tower, 1717 Main Street, MC 6404, Dallas, Texas 75201.
In addition, pursuant to regulations adopted by the FRB, Comerica makes additional regulatory capital-related disclosures. Under these regulations, Comerica satisfies a portion of these requirements through postings on its website, and Comerica has done so and expects to continue to do so without also providing disclosure of this information through filings with the SEC.
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Where we have included web addresses in this report, such as our web address and the web address of the SEC, we have included those web addresses as inactive textual references only. Except as specifically incorporated by reference into this report, information on those websites is not part hereof.

Item 1A.  Risk Factors.
This report includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. In addition, Comerica may make other written and oral communications from time to time that contain such statements. All statements regarding Comerica's expected financial position, strategies and growth prospects and general economic conditions Comerica expects to exist in the future are 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.
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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. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.
In addition to factors mentioned elsewhere in this report or previously disclosed in Comerica's SEC reports (accessible on the SEC's website at www.sec.gov or on Comerica's website at www.comerica.com), the factors contained below, among others, could cause actual results to differ materially from forward-looking statements, and future results could differ materially from historical performance.

CREDIT RISK
•Unfavorable developments concerning credit quality could adversely affect Comerica's financial results.
Although Comerica regularly reviews credit exposure related to its customers and various industry sectors in which it has business relationships, default risk may arise from events or circumstances that are difficult to detect or foresee. Under such circumstances, as occurred in 2020 during the COVID-19 pandemic, Comerica could experience an increase in the level of provision for credit losses, nonperforming assets, net charge-offs and reserve for credit losses, which could adversely affect Comerica's financial results.
•Declines in the businesses or industries of Comerica's customers - in particular the energy industry - could cause increased credit losses or decreased loan balances, which could adversely affect Comerica.
Comerica's business customer base consists, in part, of customers in volatile businesses and industries such as the automotive, commercial real estate, residential real estate and energy industries. These industries are sensitive to global economic conditions, supply chain factors and/or commodities prices. Any decline in one of these businesses or industries could cause increased credit losses, which in turn could adversely affect Comerica. Further, any decline in these businesses or industries could cause decreased borrowings, either due to reduced demand or reductions in the borrowing base available for each customer loan.
In particular, in 2020, energy markets, which were already experiencing stress prior to the pandemic, were further impacted by the rapid decline in demand resulting from social distancing policies. Energy prices and demand improved in the latter half of 2020 as the economy began to recover, but energy markets remain uncertain. Loans in the Energy business line were $1.6 billion, or approximately 3 percent of total loans, at December 31, 2020. At December 31, 2020, the reserve allocation for Energy loans was approximately 8 percent of the Energy portfolio. If oil and gas prices continue to remain depressed for a prolonged period of time, Comerica's energy portfolio could experience increased credit losses, which could adversely affect Comerica's financial results. Furthermore, a prolonged period of low oil prices could also have a negative impact on the Texas economy, which could have a material adverse effect on Comerica’s business, financial condition and results of operations. For more information regarding Comerica's energy portfolio, please see “Energy Lending” beginning on pages F-31 through F-32 of this report.
For more information regarding certain of Comerica's other lines of business, please see "Concentrations of Credit Risk," "Commercial Real Estate Lending," "Automotive Lending- Dealer," "Automotive Lending- Production," and "Residential Real Estate Lending" on pages F-29 through F-31 of the Financial Section of this report.
Additionally, certain industries have been particularly susceptible to the effects of the pandemic, such as retail commercial real estate, retail goods and services, hotels, arts/recreation, airlines, restaurants and bars, childcare, coffee shops, cruise lines, education, gasoline and convenience stores, religious organizations, senior living, freight and travel
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arrangements, and Comerica has outstanding loans to clients in these industries, as described below under "Other Sectors Most at Risk due to Economic Stress Resulting from COVID-19 Impacts" on page F-32 of the Financial Section of this report.
•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. 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. 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. Success in providing products and services depends on the financial needs of customers and the types of products desired.
Individual, economic, political, industry-specific conditions and other factors outside of Comerica's control, such as pandemics, inflation, military conflicts, labor shortages, supply chain constraints, fuel prices, energy costs, tariffs, real estate values or other factors that affect customer income levels, could alter predicted customer borrowing, repayment, investment and deposit practices. Such a change in these practices could materially adversely affect Comerica's ability to anticipate business needs and meet regulatory requirements.
Further, difficult economic conditions, such as a recession, may negatively affect consumer confidence levels. A decrease in consumer confidence levels would likely aggravate the adverse effects of these difficult market conditions on Comerica, Comerica's customers and others in the financial institutions industry.
Unfavorable developments concerning credit quality could adversely affect Comerica's financial results.
Although Comerica regularly reviews credit exposure related to its customers and various industry sectors in which it has business relationships, default risk may arise from events or circumstances that are difficult to detect or foresee. 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. 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. 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.
Comerica's business customer base consists, in part, of customers in volatile businesses and industries such as the automotive, commercial real estate, residential real estate and energy industries. These industries are sensitive to global economic conditions, supply chain factors and/or commodities prices. 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. Any decline in one of these businesses or industries could cause increased credit losses or reduced loan demand, which in turn could adversely affect Comerica. 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. For more information regarding certain of Comerica's lines of business, please see "Concentrations of
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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.
MARKET RISK
•Governmental monetary and fiscal policies may adversely affect the financial services industry, and therefore impact Comerica's financial condition and results of operations.
Monetary and fiscal policies of various governmental and regulatory agencies, in particular the FRB, affect the financial services industry, directly and indirectly. The FRB regulates the supply of money and credit in the U.S., and its monetary policies determine in a large part Comerica's cost of funds for lending and investing and the return that can be earned on such loans and investments. Changes in such policies, including changes in interest rates such as decreases in the federal funds rate in 2020, or changes in the FRB's balance sheet, influence the origination of loans, the value of investments, the generation of deposits and the rates received on loans and investment securities and paid on deposits. Changes in monetary and fiscal policies are beyond Comerica's control and difficult to predict. Comerica's financial condition and results of operations could be materially adversely impacted by changes in governmental monetary and fiscal policies.
•Fluctuations in interest rates and their impact on deposit pricing could adversely affect Comerica's net interest income and balance sheet.
The operations of financial institutions such as Comerica are dependent to a large degree on net interest income, which is the difference between interest income from loans and investments and interest expense on deposits and borrowings. Prevailing economic conditions and the trade, fiscal and monetary policies of the federal government and various regulatory agencies all affect market rates of interest and the availability and cost of credit, which in turn significantly affect financial institutions' net interest income and the market value of its investment securities. The Federal Reserve loweredraised interest rates significantlyfour times in 2020. A continued low2023; if the Federal Reserve lowers interest rate environmentrates in the future, it will adversely affect the interest income Comerica earns on loans and investments. 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 sensitivity,sensitivity and risk management strategies, please see, “Market and LiquidityLiquidity Risk” beginning on page F-33 ofin the Financial Section of this report.
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. Higher funding costs will reduce Comerica's net interest margin and net interest income.
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. Comerica's financial results could be materially adversely impacted by changes in financial market conditions.
•Interest rates on Comerica's outstanding financial instruments might be subject to change based on developments related to LIBOR, whichtransition away from the Bloomberg Short-Term Bank Yield Index, or "BSBY," could adversely affect its revenue, expenses, and the value of those financial instruments.results.
On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, publiclyNovember 15, 2023, Bloomberg Index Services Limited announced that it intendswill discontinue publishing BSBY on November 15, 2024. Comerica is transitioning a number of arrangements to stop persuading or compelling banks to submit LIBORother rates, after 2021. Comerica has substantial exposure to LIBOR-based products, including loans, securities, derivatives and hedges, and Comerica and the banking industry are preparing to transition away from the widespread use of LIBOR to alternative rates. Comerica began indexing new retail adjustable rate mortgages to SOFR (Securedprimarily Secured Overnight Financing Rate) in third quarter 2020. During fourth quarter 2020, Comerica began the processRate (“SOFR”).
As a result of incorporating fallback language in legacy LIBOR-based commercial loans and updated International Swaps and Derivative Association (ISDA) protocols inthis transition, interest rate derivatives. Comerica continues to monitor market developments and regulatory updates, including recent
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announcements from the ICE Benchmark Administrator to extend the cessation date for several USD LIBOR tenors to June 30, 2023, 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 effectsrates on our business, financial condition and results of operations. In particular, any 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 LIBORBSBY rates, or other securities or financial arrangements given LIBOR’s historical role in determining market interest rates globally;
•adversely affectas well as the value of Comerica’s floating rate obligations, loans, deposits, derivatives,revenue and otherexpenses associated with those financial instruments, tiedmay be adversely affected. As Comerica works through the complicated product transitions involved, Comerica’s relationships with its customers may suffer. Comerica may need to LIBOR rates,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 other securities or financial arrangements given LIBOR’s historical roleinefficiencies inherent in determining market interest rates globally;
•making these transitions. Further, Comerica’s transition could prompt inquiries or other actions from regulators in respect to Comerica’s preparation and readiness for the replacement of LIBOR with an alternative reference rate;
•regulators. It could also result in disputes litigation or other actions with counterparties regarding the interpretation and enforceabilityterms of certain fallback language in LIBOR-based securities; andthe arrangements Comerica seeks to change.
•require the transition to or development of appropriate systems and analytics to effectively transition Comerica’s risk management processes from LIBOR-based products to those based on the applicable alternative pricing benchmark, such as SOFR.
Approximately 73 percent of Comerica's loans at December 31, 2020 were tied to LIBOR, which excludes the impact of interest rate swaps converting floating-rate loans to fixed. More information regarding the LIBOR transition is available on pages F-34 through F-35 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.
LIQUIDITY RISK
•Comerica must maintain adequate sources of funding and liquidity to meet regulatory expectations, support its operations and fund outstanding liabilities.
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
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customer deposits or outflows of cash or collateral and/or adversely affect Comerica's ability to access capital markets on favorable terms.
Other conditions and factors that could materially adversely affect Comerica’s liquidity and funding include a lack of market or customer confidence in, or negative news about, Comerica or the financial services industry generally which also may result in a loss of deposits and/or negatively affect Comerica's ability to access the capital markets; the loss of customer deposits to alternative investments; counterparty availability; interest rate fluctuations; general economic conditions; and the legal, regulatory, accounting and tax environments governing Comerica's funding transactions. Many of the above conditions and factors may be caused by events over which Comerica has little or no control. There can be no assurance that significant disruption and volatility in the financial markets will not occur in the future. 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. 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.
Further,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.
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. 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.
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. 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. 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. In March 2020, S&P Global Ratings revised each of Comerica Incorporated and Comerica Bank's outlook from "Stable" to “Negative,” and in April 2020, Fitch Ratings downgraded Comerica Incorporated and Comerica Bank's long-term issuer default ratings by one notch from "A" to "A-." While recent credit rating actions have had little to no detrimental impact on
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Comerica's profitability, borrowing costs, or ability to access the capital markets, future downgrades to Comerica's or its subsidiaries' credit ratings could adversely affect Comerica's profitability, borrowing costs, or ability to access the capital markets or otherwise have a negative effect on Comerica's results of operations or financial condition. If such a reduction placed Comerica's or its subsidiaries' credit ratings below investment grade, it could also create obligations or liabilities under the terms of existing arrangements that could increase Comerica's costs under such arrangements. Additionally, a downgrade of the credit rating of any particular security issued by Comerica or its subsidiaries could negatively affect the ability of the holders of that security to sell the securities and the prices at which any such securities may be sold.
•The soundness of other financial institutions could adversely affect Comerica.
Comerica's ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. Comerica has exposure to many different industries and counterparties, and it routinely executes transactions with counterparties in the financial industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, and other institutional clients. As a result, defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, have led, and may further lead, to market-wide liquidity problems and could lead to losses or defaults by us or by other institutions. Many of these transactions could expose Comerica to credit risk in the event of default of its counterparty or client. In addition, Comerica's credit risk may be impacted when the collateral held by it cannot be monetized or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due to Comerica. 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
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default of its counterparty or client. There is no assurance that any such losses would not adversely affect, possibly materially, Comerica.
TECHNOLOGY RISK
•Comerica faces security risks, including denial of service attacks, hacking, social engineering attacks targeting Comerica’s colleagues and customers, malware intrusion or data corruption attempts, and identity theft that could result in the disclosure of confidential information, adversely affect its business or reputation, and create significant legal and financial exposure.
Comerica’s computer systems and network infrastructure and those of third parties, on which Comerica is highly dependent, are subject to security risks and could be susceptible to cyber attacks, such as denial of service attacks, hacking, terrorist activities or identity theft. Comerica’s business relies on the secure processing, transmission, storage and retrieval of confidential, proprietary and other information in its computer and data management systems and networks, and in the computer and data management systems and networks of third parties. In addition, to access Comerica’s network, products and services, its customers and other third parties may use personal mobile devices or computing devices that are outside of its network environment and are subject to their own cybersecurity risks.
Cyber attacks could include computer viruses, malicious or destructive code, phishing attacks, denial of service or information, ransomware, improper access by employees or vendors, attacks on personal email of employees, ransom demands to not expose security vulnerabilities in Comerica's systems or the systems of third parties, or other security breaches, and could result in the destruction or exfiltration of data and systems. As cyber threats continue to evolve, Comerica may be required to expend significant additional resources to continue to modify or enhance its protective measures or to investigate and remediate any information security vulnerabilities or incidents. 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, norbreaches. Nor may it (or the third parties whose systems we rely upon) be able to implement guaranteed preventive measures against such security breaches. Cyber threats are rapidly evolving and Comerica may not be able to anticipate or prevent all such attacks and could be held liable for any security breach or loss.
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. Like other financial services firms, Comerica and its third party providers continue to be the subject of cyber attacks. Although to this date Comerica has not experienced any material losses or other material consequences related to cyber attacks, future cyber attacks could be more disruptive and damaging, and Comerica may not be able to anticipate or prevent all such attacks. 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. Furthermore, the public perception that a cyber attack on Comerica’s systems has been successful, whether or not this perception is correct, may damage its reputation with customers and third parties with whom it does business. Hacking of personal information and identity theft risks, in particular, could cause serious reputational harm. A successful penetration or circumvention of system security could cause Comerica serious negative consequences, including loss of customers and business opportunities, costs associated with
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maintaining business relationships after an attack or breach; significant business disruption to Comerica’s operations and business, misappropriation, exposure, or destruction of its confidential information, intellectual property, funds, and/or those of its customers; or damage to Comerica’s or Comerica’s customers’ and/or third parties’ computers or systems, and could result in a violation of applicable privacy laws and other laws, litigation exposure, regulatory fines, penalties or intervention, loss of confidence in Comerica’s security measures, reputational damage, reimbursement or other compensatory costs, additional compliance costs, and could adversely impact its results of operations, liquidity and financial condition. In addition, although Comerica maintains insurance coverage that may cover certain cyber losses (subject to policy terms and conditions), we may not have adequate insurance coverage to compensate for losses from a cybersecurity event.
•Cybersecurity and data privacy are areas of heightened legislative and regulatory focus.
As cybersecurity and data privacy risks for banking organizations and the broader financial system have significantly increased in recent years, cybersecurity and data privacy issues have become the subject of increasing legislative and regulatory focus. The federal bank regulatory agencies have proposed enhanced cyber risk management standards, which would apply to a wide range of large financial institutions and their third-party service providers, including Comerica and its bank subsidiaries, and would focus on cyber risk governance and management, management of internal and external dependencies, and incident response, cyber resilience and situational awareness. Several states have also proposed or adopted cybersecurity legislation and regulations, which require, among other things,
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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.
Comerica receives, maintains and stores non-public personal information of Comerica’s customers and counterparties, including, but not limited to, personally identifiable information and personal financial information. The sharing, use, disclosure and protection of this information are governed by federal and state law. 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, in June of 2018, the Governor of California signed into law the CCPA. 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.
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. Comerica could be adversely affected if new legislation or regulations are adopted or if existing legislation or regulations are modified such that Comerica is required to alter its systems or require changes to its business practices or privacy policies. If cybersecurity, data privacy, data protection, data transfer or data retention laws are implemented, interpreted or applied in a manner inconsistent with Comerica’s current practices, it may be subject to fines, litigation or regulatory enforcement actions or ordered to change its business practices, policies or systems in a manner that adversely impacts Comerica’s operating results.
OPERATIONAL RISK
•Comerica’s operational or security systems or infrastructure, or those of third parties, could fail or be breached, which could disrupt Comerica’s business and adversely impact Comerica’s results of operations, liquidity and financial condition, as well as cause legal or reputational harm.
The potential for operational risk exposure exists throughout Comerica’s business and, as a result of its interactions with, and reliance on, third parties, is not limited to Comerica’s own internal operational functions. Comerica's operations rely on the secure processing, storage and transmission of confidential and other information on its technology systems and networks. These networks are subject to infrastructure failures, ongoing system maintenance and upgrades and planned network outages. The increasedComerica's use of mobile and cloud technologies, as well as the increase inits hybrid work options permitting remote work, due to the COVID-19 pandemic, can heighten these and other operational risks. Any failure, interruption or breach in security of these systems could result in failures or disruptions in Comerica's customer relationship management, general ledger, deposit, loan and other systems.
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. For example, Comerica’s ability to conduct business may be adversely affected by any significant disruptions to Comerica or to third parties with whom Comerica interacts or upon whom it relies. 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
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of customer data. In addition, Comerica’s ability to implement backup systems and other safeguards with respect to third-party systems is more limited than with respect to its own systems.
Comerica’s financial, accounting, data processing, backup or other operating or security systems and infrastructure may fail to operate properly or become disabled or damaged as a result of a number of factors, including events that are wholly or partially beyond its control, which could adversely affect its ability to process transactions or provide services. Such events may include sudden increases in customer transaction volume and/or customer activity; electrical, telecommunications or other major physical infrastructure outages; natural disasters such as earthquakes, tornadoes, hurricanes and floods; disease pandemics; cyber attacks; and events arising from local or larger scale political or social matters, including wars and terrorist acts.
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.
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•Comerica relies on other companies to provide certain key components of its delivery systems, and certain failures could materially adversely affect operations.
Comerica faces the risk of operational disruption, failure or capacity constraints due to its dependency on third party vendors for components of its delivery systems. Third party vendors provide certain key components of Comerica's delivery systems, such as cloud-based computing, networking and storage services, cash services, payment processing services, recording and monitoring services, internet connections and network access, clearing agency services, card processing services and trust processing services. While Comerica conducts due diligence prior to engaging with third party vendors and performs ongoing monitoring of vendor controls, it does not control their operations. Further, while Comerica's vendor management policies and practices are designed to comply with current regulations, these policies and practices cannot eliminate this risk. In this context, any vendor failure to properly deliver these services could adversely affect Comerica’s business operations, and result in financial loss, reputational harm, and/or regulatory action.
•Legal and regulatory proceedings and related matters with respect to the financial services industry, including those directly involving Comerica and its subsidiaries, could adversely affect Comerica or the financial services industry in general.
Comerica has been, and may in the future be, subject to various legal and regulatory proceedings. It is inherently difficult to assess the outcome of these matters, and there can be no assurance that Comerica will prevail in any proceeding or litigation. Any such matter could result in substantial cost and diversion of Comerica's efforts, which by itself could have a material adverse effect on Comerica's financial condition and operating results. Further, adverse determinations in such matters could result in fines or actions by Comerica's regulators that could materially adversely affect Comerica's business, financial condition or results of operations.
Comerica establishes reserves for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. Comerica may still incur legal costs for a matter even if it has not established a reserve. In addition, due to the inherent subjectivity of the assessments and unpredictability of the outcome of legal proceedings, the actual cost of resolving a legal claim may be substantially higher than any amounts reserved for that matter. The ultimate resolution of a pending legal proceeding, depending on the remedy sought and granted, could adversely affect Comerica's results of operations and financial condition.
•Comerica may incur losses due to fraud.
Fraudulent activity can take many forms and has escalated as more tools for accessing financial services emerge, such as real-time payments. Fraud schemes are broad and continuously evolving. Examples include but are not limited to: debit card/credit card fraud, check fraud, mechanical devices attached to ATM machines, social engineering and phishing attacks to obtain personal information, impersonation of our clients through the use of falsified or stolen credentials, employee fraud, information theft and other malfeasance. Increased deployment of technologies, such as chip card technology, defray and reduce aspects of fraud; however, criminals are turning to other sources to steal personally identifiable information in order to impersonate the consumer to commit fraud. Many of these data compromises have been widely reported in the media. 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.
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•Controls and procedures may not prevent or detect all errors or acts of fraud.
Controls and procedures are designed to provide reasonable assurance that information required to be disclosed in reports Comerica files or submits under the Exchange Act is accurately accumulated and communicated to management, and recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met, due to certain inherent limitations. These limitations include the realities that judgments in decision making can be faulty, that alternative reasoned judgments can be drawn, that breakdowns can occur because of an error or mistake, or that controls may be fraudulently circumvented. Accordingly, because of the inherent limitations in control systems, misstatements due to error or fraud may occur and not be detected.
COMPLIANCE RISK
•Changes in regulation or oversight, or changes in Comerica’s status with respect to existing regulations or oversight, may have a material adverse impact on Comerica's operations.
Comerica is subject to extensive regulation, supervision and examination by the U.S. Treasury, the Texas Department of Banking, the FDIC, the FRB, the OCC, the CFPB, the CFTC, the SEC, FINRA, DOL, MSRB and other regulatory
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bodies. Such regulation and supervision governs and limits the activities in which Comerica may engage. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on Comerica's operations and ability to make acquisitions, investigations and limitations related to Comerica's securities, the classification of Comerica's assets and determination of the level of Comerica's allowance for loan losses. 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. It
Further, even if such regulations or oversight do not change, Comerica's business may develop such that it may be subject to increased regulatory requirements. For example, if Comerica's asset size increases in the future and exceeds $100 billion in average total consolidated assets calculated over four consecutive financial quarters, Comerica will become a Category IV institution. Category IV institutions ($100 to $250 billion in assets) under the Tailoring Rules are subject to additional requirements, such as certain enhanced prudential standards and monitoring and reporting certain risk-based indicators. Under the Tailoring Rules, Category IV firms are, among other things, subject to (1) supervisory capital stress testing on a biennial basis, (2) requirements to develop and maintain a capital plan on an annual basis and (3) certain liquidity risk management and risk committee requirements, including liquidity buffer and liquidity stress testing requirements. Comerica would also incur additional assessments under Regulation TT. If Comerica becomes subject to enhanced prudential standards, it will face more stringent requirements or limitations on its business, as well as increased compliance costs, and, depending on its levels of capital and liquidity, stress test results and other factors, may be limited in the types of activities it may conduct and be limited as to how it utilizes capital. Further, Comerica may be subject to heightened expectations, which could result in additional regulatory scrutiny, higher penalties, and more severe consequences if it is too soonunable to meet those expectations. 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. 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 predict what legislativereduce business levels or regulatory changes may occur as a result of the change in leadership resulting from the recent elections, or, if changes occur, the ultimate effect theyto raise capital, which would have upon thea material adverse effect on Comerica’s financial condition orand results of operations of Comerica.operations.
•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. These requirements, and any other new laws or regulations related to capital and liquidity, or any existing requirements that Comerica becomes subject to as a result of its increased asset size, could adversely affect Comerica's ability to pay dividends or make share repurchases, or could require Comerica to reduce business levels or to raise capital, including in ways that may adversely affect its results of operations or financial condition and/or existing shareholders. Maintaining higher levels of capital may reduce Comerica's profitability and otherwise adversely affect its business, financial condition, or results of operations.
•TaxChanges to tax law or regulations, could be subjector changes to potential legislative, administrative or judicial changes or interpretations.interpretations of tax law regulations, could adversely affect Comerica.
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. For example, the current administration has indicated it may propose increases to the federal corporate statutory tax rate. An increase in the federal corporate tax rate may increase Comerica’s tax provision expense. We are unable to predict whether these changes, or other proposals, will ultimately be enacted.
STRATEGIC RISK
•Damage to Comerica’s reputation could damage its businesses.
Reputational risk is an increasing concern for businesses as customers are interested in doing business with companies they admire and trust. Such risks include compliance issues, operational challenges, or a strategic, high profile event. Comerica's business is based on the trust of its customers, communities, and entire value chain, which makes managing reputational risk extremely important. News or other publicity that impairs Comerica's reputation, or the reputation of the financial services industry generally, can therefore cause significant harm to Comerica’s business and prospects. 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.
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•Comerica may not be able to utilize technology to efficiently and effectively develop, market, and deliver new products and services to its customers.
The financial services industry experiences rapid technological change with regular introductions of new technology-driven products and services. The ability to access and use technology is an increasingly important competitive factor in the financial services industry, and having the right technology is a critically important component to customer
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satisfaction. As well, the efficient and effective utilization of technology enables financial institutions to reduce costs. Comerica's future success depends, in part, upon its ability to address the needs of its customers by using technology to market and deliver products and services that will satisfy customer demands, meet regulatory requirements, and create additional efficiencies in Comerica's operations. Comerica may not be able to effectively develop new technology-driven products and services or be successful in marketing or supporting these products and services to its customers, which could have a material adverse impact on Comerica's financial condition and results of operations.
•Competitive product and pricing pressures within Comerica's markets may change.
Comerica operates in a very competitive environment, which is characterized by competition from a number of other financial institutions in each market in which it operates. Comerica competes largely on the basis of industry expertise, the range of products and services offered, pricing and reputation, customer convenience, quality customerof service, and responsiveness to customer needs and the overall relationship with our clients. Ourcustomer relationship. Comerica's competitors are large national and regionalinclude financial institutions as well as smaller financial institutions.of all sizes. Some of Comerica's larger competitors, including certain nationwide banks that have a significant presence in Comerica's market area,markets, may make available to their customershave a broader array of product, pricingproducts and structure alternatives and, due to their asset size, may more easily absorb credit losses in a larger overall portfolio.losses. Some of Comerica's competitors (larger or smaller) may have more liberal lending policies and processes.and aggressive pricing standards for loans, deposits and services. Increasingly, Comerica competes with other companies based on financial technology and capabilities, such as mobile banking applications and funds transfer.
Additionally, the financial services industry is subject to extensive regulation. For more information, see the “Supervision and Regulation” section of this report. Such regulations may require significant additional investments in technology, personnel or other resources or place limitations on the ability of financial institutions, including Comerica, to engage in certain activities. Comerica's competitors may be subject to a significantly different or reduced degree oflesser regulation due to their asset size or types of products offered. TheySome competitors may also have the ability to more efficiently utilize resources to comply with regulations or may be able to more effectively absorb the costscost of regulations into their existing cost structure.regulations.
In addition to banks, Comerica'sComerica and its banking subsidiaries also face competition from other financial intermediaries, including savings and loan associations, consumer and commercial finance companies, leasing companies, venture capital funds, credit unions, investment banks, insurance companies and securities firms. Competition among providers of financial products and services continues to increase as technology advances have lowered the barriers to entry for financial technology companies, with customers having the opportunity to select from a growing variety of traditional and nontraditional alternatives, including crowdfunding, digital wallets and money transfer services. The ability of non-banking financial institutionsnon-banks to provide services previously limited to commercialtraditional banks has intensified competition. Because non-banking financial institutionsnon-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.
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.
Comerica makes certain projections and develops plans and strategies for its banking and financial products. If Comerica does not accurately determine demand for its banking and financial product needs, it could result in Comerica incurring significant expenses without the anticipated increases in revenue, which could result in a material adverse effect on its business. 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 recently put in place a strategic relationship with Ameriprise to become Comerica’s new investment program provider; if the relationship is not successful, it could adversely impact Comerica's reputation or results.
•Management's ability to maintain and expand customer relationships may differ from expectations.
The financial services industry is very competitive. Comerica not only vies for business opportunities with new customers, but also competes to maintain and expand the relationships it has with its existing customers. While management believes that it can continue to grow many of these relationships, Comerica will continue to experience pressures to maintain these relationships as its competitors attempt to capture its customers. Failure to create new
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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. Comerica's future operating results also depend in significant part upon its ability to attract and retain qualified management, financial, technical, marketing, sales and support personnel. Competition for qualified personnel is intense, and Comerica cannot ensure success in attracting or retaining qualified personnel. There may be
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only a limited number of persons with the requisite skills to serve in these positions, and it may be increasingly difficult for Comerica to hire personnel over time. The increased prevalence of remote work environments has intensified the competition for talent as job opportunities may be less constrained by physical geography.
Further, Comerica's ability to retain key officers and employees may be impacted by legislation and regulation affecting the financial services industry. In 2016, the FRB, OCC and several other federal financial regulators revised and re-proposed rules to implement Section 956 of the Dodd-Frank Act. 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. Consistent with the Dodd-Frank Act, the proposed rule would impose heightened standards for institutions with $50 billion or more in total consolidated assets, which includes Comerica. For these larger institutions, the proposed rule would require the deferral of at least 40 percent of incentive-based payments for designated executives and significant risk-takers who individually have the ability to expose the institution to possible losses that are substantial in relation to the institution's size, capital or overall risk tolerance. 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. Accordingly, Comerica may be at a disadvantage to offer competitive compensation compared to other financial institutions (as referenced above) or companies in other industries, which may not be subject to the same requirements.
Comerica's business, financial condition or results of operations could be materially adversely affected by the loss of any of its key employees, or Comerica's inability to attract and retain skilled employees.
•Any future strategic acquisitions or divestitures may present certain risks to Comerica's business and operations.
Difficulties in capitalizing on the opportunities presented by a future acquisition may prevent Comerica from fully achieving the expected benefits from the acquisition, or may cause the achievement of such expectations to take longer to realize than expected.
Further, the assimilation of any acquired entity's customers and markets could result in higher than expected deposit attrition, loss of key employees, disruption of Comerica's businesses or the businesses of the acquired entity or otherwise adversely affect Comerica's ability to maintain relationships with customers and employees or achieve the anticipated benefits of the acquisition. 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.
GENERAL RISK
•The COVID-19 pandemic has and will likely continue to adversely impact our business, and the ultimate impact on our business and financial results will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities in response to the pandemic.
The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets, and increased unemployment levels. In addition, the pandemic has resulted in temporary closures of many businesses and the institution of social distancing and sheltering in place requirements in many states and communities. As a result, the demand for our products and services has been, and is expected to continue to be, significantly impacted. Furthermore, the pandemic has influenced and could further influence the recognition of credit losses in our loan portfolios and has increased and could further increase our allowance for credit losses, particularly as some businesses remain closed or are forced to close again and as more customers may draw on their lines of credit or seek additional loans to help finance their businesses. Certain industries have been particularly susceptible to the effects of the pandemic, such as retail commercial real estate, retail goods and services, hotels, arts/recreation, airlines, restaurants and bars, childcare, coffee shops, cruise lines, education, gasoline and convenience stores, religious organizations, senior living, freight and travel arrangements, and Comerica has outstanding loans to clients in these industries, as described below under "Other Sectors Most at Risk due to Economic Stress Resulting from COVID-19 Impacts" on page F-32. Similarly, because of changing economic and market conditions affecting issuers, the securities we hold may lose value. We have temporarily closed and/or limited access to certain of our branches and offices or may do so in the future, and our business operations may also be disrupted if significant portions of our workforce are unable to work effectively long-term, including because of illness, quarantines, government actions, or other restrictions in connection with the pandemic. In response to the pandemic, we have also enacted hardship relief assistance for customers experiencing financial difficulty as a result of COVID-19, including fee and penalty waivers, loan deferrals or other scenarios that may help our customers. As of December 31, 2020, pandemic-related payment deferrals totaled $141 million,
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representing approximately 100 obligors and consisting of 42 percent commercial loans and 58 percent retail loans, primarily residential mortgages.
As well, we are a lender for the Small Business Administration's Paycheck Protection Program ("PPP") and other SBA, Federal Reserve or United States Treasury programs that have been or may be created in the future in response to the pandemic. These programs are new and their effects on Comerica's business are uncertain. The extent to which the COVID-19 pandemic impacts our business, results of operations, and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.
•General political, economic or industry conditions, either domestically or internationally, may be less favorable than expected.
Local, domestic, and international events including economic,Economic, financial market, political, and industry specific conditionsindustry-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. The U.S. economy contracted into a recession with unusual speedfaces uncertainties from elevated interest rates, persistent inflation, the end of fiscal stimulus, subdued housing market activity and forceweak export demand. It also faces downside risks from geopolitical conflicts around the globe, including those involving Venezuela; the Israel-Hamas War and its spread to Yemen, Lebanon, and/or other parts of the Middle East; the Ukraine-Russia War and its effects in the first half of 2020, ending the longest expansionary period in U.S. history. The U.S. governmentEurope; tensions between Taiwan and mainland China; threats from North Korea; and the Federal Reserve responded topossibility of other geopolitical shocks.
Domestically, the pandemic with unprecedented measures. In addition toelevated budget deficit, the Federal Reserve reducing the targetpossibility of a federal funds rate to zero to 0.25 percent, Congress passed the Coronavirus Aid, Relief, and Economic Security Act that included an estimated $2 trillion stimulus package. Although the U.S. economy began to recover in third quarter 2020 as social distancing policies loosened, economic metrics in fourth quarter 2020 indicate an uneven path to recovery. In December 2020, Congress amended the Coronavirus Aid, Relief, and Economic Security Act with the Consolidated Appropriations Act of 2021 to provide an additional $900 billion of stimulus relief to mitigate the continued impacts of the pandemic. While certain factors point to improving economic conditions, uncertainty remains regarding the path of the economic recovery, the mitigating impacts of government interventions, the success of vaccine distribution and the efficacy of administered vaccines,shutdown and/or debt ceiling crisis, as well as broader issues surrounding the effectsfederal budgeting process and governance, may contribute to a possibility downgrade of the change in leadership resultingU.S. sovereign credit rating, potentially causing knock-on effects for the broader economy and financial system that could include a recession.
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The Federal Reserve has rapidly tightened monetary policies during the recovery from the recent elections. Conditions related to inflation,2020 recession, unemployment, volatileincluding both increases in interest rates international conflicts,and reductions in the size of the central bank’s balance sheet, which contribute to the risk of a monetary policy error.
Fiscal and industrial policies to support the growth of targeted industries could have unanticipated effects or change unexpectedly, causing volatility in the economic performance of these industries or other parts of the economy. These effects could impact the energy industry, manufacturing, construction, auto manufacturing and retailing, or potentially other industries. Prices of energy products and services, as well as other commodities, are subject to large and unanticipated fluctuations caused by changes to supply and demand conditions, which could directly or indirectly affect Comerica’s business and/or clients.
Rapid changes to the economy have impacted demand for residential and commercial real estate, including single-family and multifamily residential properties, as well as office, industrial, and retail commercial real estate properties. These changes could affect the economic health of downtowns in major cities and other regions where economic activity has changed in recent years, and could impact real estate prices, construction activity, and/or sales.
Adverse economic conditions related a potential recession, including 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 controlinflation, unemployment, or interest rates, may, directly and indirectly, adversely affect Comerica. 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.
Prolonged periods of inflation may impact Comerica profitability by negatively impacting its fixed costs and expenses, including increasing funding costs and expense related to talent acquisition and retention, and negatively impacting the demand for its products and services. Additionally, inflation may lead to a decrease in consumer and clients purchasing power and negatively affect the need or demand for Comerica's products and services. If significant inflation continues, Comerica's business could be negatively affected by, among other things, increased default rates leading to credit losses which could decrease the appetite for new credit extensions. These 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.
The Corporation assumes various types of risk as a result of conducting business in the normal course. 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. AsThe Corporation's enterprise risk management framework provides a result,process for identifying, measuring, controlling and managing risks, and Comerica's management expends significant effort and resources in risk management. 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. The Corporation also utilizes various asset and liability management strategies to manage net interest income exposure to interest rate risk; these may not always be completely effective.
For more information regarding risk management, please see "Risk Management" on pages F-22 through F-38 ofin the Financial Section of this report.
•Catastrophic events, including pandemics, may adversely affect the general economy, financial and capital markets, specific industries, and Comerica.
Acts of terrorism, cyber-terrorism, political unrest, war, civil disturbance, armed regional and international hostilities and international responses to these hostilities, natural disasters (including tornadoes, hurricanes, earthquakes, fires, droughts and floods), global health risks or pandemics, or the threat of or perceived potential for these events could have a negative impact on us. Comerica’s business continuity and disaster recovery plans may not be successful upon the occurrence of one of these scenarios, and a significant catastrophic event anywhere in the world could materially adversely affect Comerica's operating results.
In particular, certain of the regions where Comerica operates, including California, Texas, and Florida, are known for being vulnerable to natural disasters, the nature and severity of which may be impacted by climate change.disasters. These types of natural catastrophic events have at times disrupted the local economies, Comerica's business and customers, and have caused physical damage to Comerica's property in these regions.
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. These potential events may
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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.
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. Any of these events could increase volatility in the U.S. and world financial markets, which could harm Comerica's stock price and may limit the capital resources available to Comerica and its customers. This could have a material adverse impact on
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Comerica's operating results, revenues and costs and may result in increased volatility in the market price of Comerica's common stock.
•Climate change manifesting as physical or transition risks could adversely affect Comerica's operations, businesses and customers.
There is an increasing concern over the risks of climate change and related environmental sustainability matters. The physical risks of climate change include discrete events, such as flooding and wildfires, and longer term shifts in climate patterns, such as extreme heat, sea level rise, and more frequent and prolonged drought. Such events could disrupt Comerica's operations or those of its clients or third parties on which it relies, including through direct damage to assets and indirect impacts from supply chain disruption and market volatility. Additionally, transitioning to a low carbon economy may entail extensive policy, legal, technology, and market initiatives. Transition risks, including changes in consumer preferences and additional regulatory requirements or taxes, could increase expenses and undermine business strategies. In addition, Comerica's reputation and client relationships may be damaged as a result of practices related to climate change, including its involvement, or its clients’ involvement, in certain industries or projects associated with causing or exacerbating climate change, as well as any decisions Comerica makes to continue to conduct or change its activities in response to considerations relating to climate change, including the setting of climate-related goals, commitments and targets. As climate risk is interconnected with all key risk types, Comerica is advancing its processes to embed climate risk considerations into risk management strategies such as market, credit and operational risks; however, because the timing and severity of climate change may not be predictable, risk management strategies may not be effective in mitigating climate risk exposure.
•Changes in accounting standards could materially impact Comerica's financial statements.
From time to time accounting standards setters change the financial accounting and reporting standards that govern the preparation of Comerica’s financial statements. These changes can be difficult to predict and can materially impact how Comerica records and reports its financial condition and results of operations. In some cases, Comerica could be required to apply a new or revised standard retroactively, resulting in changes to previously reported financial results, or a cumulative charge to retained earnings.
•Comerica's accounting policiesestimates and processes are critical to the reporting of financial condition and results of operations. They require management to make estimates about matters that are uncertain.
Accounting policiesestimates and processes are fundamental to how Comerica records and reports its financial condition and results of operations. Management must exercise judgment in selecting and applying many of these accounting policiesestimates and processes so they comply with U.S. Generally Accepted Accounting Principles ("GAAP"). In some cases, management must select thean accounting policy or method to apply from two or more alternatives, any of which may be reasonable under the circumstances, yet may result in the Company reporting materially different results than would have been reported under a different alternative.
Management has identified certain accounting policiesestimates as being critical because they require management's judgment to make difficult, subjective or complex judgments about matters that are uncertain. Materially different amounts could be reported under different conditions or using different assumptions or estimates. Comerica has established detailed policies and control procedures that are intended to ensure these critical accounting estimates and judgments are well controlled and applied consistently. In addition, the policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner. 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. See “Critical Accounting Policies” on pages F-39 through F-43 ofEstimates” in the Financial Section of this report and Note 1 of the Notes to Consolidated Financial Statements located on pages F-52 through F-64 ofin the Financial Section of this report.
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•Comerica's stock price can be volatile.
Stock price volatility may make it more difficult for shareholders to resell their common stock when they want and at prices they find attractive. 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.
General market fluctuations, including real or anticipated changes in the strength of the economy; industry factors and general economic and political conditions and events, such as economic slowdowns or recessions; interest rate changes, oil price volatility or credit loss trends, among other factors, could also cause Comerica's stock price to decrease regardless of operating results.
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.
Investments in Comerica’s common or preferred stock are not deposits or other obligations of a bank or savings association and are not insured or guaranteed by the FDIC or any other governmental agency.

Item 1B.  Unresolved Staff Comments.
None.

Item 1C. Cybersecurity.
Managing technology risks, including risks related to cybersecurity, is an integral part of Comerica’s enterprise risk management framework and processes. As such, Comerica uses a library of processes, risks and controls to assess, identify and manage cybersecurity risks. Comerica measures such risks in part by estimating the likelihood and potential impact of incidents. Comerica seeks to manage such these risks by designing, documenting, and implementing controls, testing those controls through compliance assessments and internal and external audits and, in some cases, by transferring the risk in whole or in part through methods such as insurance. When an incident occurs, Comerica works to remediate the incident while complying with its regulatory obligations, and then evaluate the remediation for effectiveness. Comerica communicates on risk management matters through documented policies and procedures, management and Board committee reporting, and training and other employee communications.
For a description of how cybersecurity risks may materially affect Comerica’s business strategy or results, see "Item 1A. Risk Factors.” No cybersecurity threat risks during the fiscal year ended December 31, 2023 materially affected or were reasonably likely to materially affect Comerica’s financial condition or results of operations.
Comerica engages information technology risk management employees with experience and expertise in cybersecurity. The organization consists of professionals in identity and access management, cyber defense operations, security engineering and information technology governance, risk and compliance. An Executive Vice President/ Chief Information Security Officer (with over 25 years’ experience in cybersecurity risk management) and a Chief Information Officer (with over 27 years’ experience in technology risk management) lead this team. Each reports directly to the Senior Executive Vice President / Chief Operating Officer, who reports directly to Comerica’s Chief Executive Officer and the Board of Directors. In addition, Comerica engages third parties from time to time to assess, manage and respond to cybersecurity risks through risk assessment, penetration testing, incident response, threat intelligence, education, and managed security services.
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Comerica also oversees and identifies risks from threats to third parties, such as service providers, through efforts such as monitoring, risk assessments, audits, contractual due diligence and third-party security standards.
Senior management at Comerica governs risk management and is informed about, and monitors the prevention, detection, mitigation and mediation of cybersecurity incidents, in part through working review committees on which our Chief Information Security Officer and/or Chief Information Officer serve. Each review committee receives risk management reports appropriate to its scope of review, covering matters such as assessment results, risk ratings and critical issues. They report significant matters to enterprise-wide risk committees overseeing the broad scope of risk management for the enterprise as appropriate. Through these and other efforts, senior management makes decisions and sets priorities in allocating resources to address risk management issues.
The Board’s Enterprise Risk Committee oversees all of Comerica’s risk management policies, procedures and practices, including those related to cybersecurity. Senior management generally reports quarterly, or more often as necessary, to the Enterprise Risk Committee on technology risks, including risks from cybersecurity threats. The Board’s Audit Committee and the Board as a whole also receive such reports as part of their risk management oversight roles. Board members have direct access to senior management (and others, at their request) on matters related to cybersecurity threats and may direct questions to senior management and request further information as they see fit to fulfill their oversight responsibilities.

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. 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 such space used by Comerica and its subsidiaries extends through September 2028. 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, 2020,2023, Comerica, through its banking affiliates, operated at a total of 546 locations. This includes529 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 546 locations, 217those, 209 were owned and 329320 were leased. As of December 31, 2020,2023, affiliates also operated from owned spaces in Michigan as well as leased spaces in Denver, Colorado; Wilmington, Delaware; Oakbrook Terrace, Illinois; Boston, Massachusetts; Minneapolis, Minnesota; Morristown,Delaware, Colorado, Georgia, Illinois, Massachusetts, Minnesota, New Jersey;Jersey, New York, New York; Memphis, Tennessee; McLean, Virginia; Bellevue, Washington; Monterrey, Mexico; Toronto,North Carolina, South Carolina, Tennessee and Washington, as well as in Mexico and Ontario, Canada and Windsor, Ontario, Canada. 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 3.  Legal Proceedings.
    Please see Note 21 of the Notes to Consolidated Financial Statements located on pages F-98 through F-99 ofin the Financial Section of this report.

Item 4.   Mine Safety Disclosures.
Not applicable.

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PART II

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 5, 2021,26, 2024, there were approximately 8,6297,857 record holders of Comerica's common stock.
    Subject to approval of the Board of Directors, applicable regulatory requirements and the Series A Preferred Stock dividend preference, Comerica expects to continue itsa policy of paying regular cash dividends on a quarterly basis. A discussion of dividend restrictions applicable to Comerica is set forth in Notes 13 and 20 of the Notes to Consolidated Financial Statements locatedstarting on pages F-85F-82 and F-96 through F-98F-93, respectively, of the Financial Section of this report, in the "Capital" section starting on pages F-19 through F-21page F-16 of the Financial Section of this report and in the “Supervision and Regulation” section of this report.
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-2F-2 of the Financial Section of this report.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
In March 2020, as the economic climate grew increasingly uncertain, Comerica suspended its share repurchase program, with a focus on deploying capital to meet customers' growing financing requirements, resulting in no share repurchases under the program for the remainder of the year. As of December 31, 2020,2023, a total of 87.297.2 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.
The following table summarizes Comerica's share repurchase activity for the year ended December 31, 2020.2023.
(shares in thousands)Total Number of Shares 
Purchased as Part of Publicly Announced Repurchase Plans or Programs		Remaining Repurchase Authorization 
(a)		Total Number of Shares Purchased
(b)		Average Price Paid Per 
Share
Total first quarter 20203,227 4,870 3,322 $58.70 
Total second quarter 2020— 4,870 6 28.63 
Total third quarter 2020— 4,870 7 37.94 
October 2020— 4,870 4 38.26 
November 2020— 4,870 — — 
December 2020— 4,870 — — 
Total fourth quarter 2020— 4,870 4 38.26 
Total 20203,227 4,870 3,339 $58.58 
(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.
(b)Includes approximately 112,00040,000 shares (including 4,0003,000 shares in the quarter ended December 31, 2020)2023) purchased pursuantrelated 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, 2020.2023. These transactions are not considered part of Comerica's repurchase program.

Item 6.  Selected Financial Data.[Reserved]
Reference is made to the caption “Selected Financial Data” on page F-3 of the Financial Section of this report.
Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.
    Reference is made to the sections entitled “2020“2023 Overview,” “Results of Operations," "First Quarter 2021 Outlook," "Strategic Lines of Business, and Markets," "Balance Sheet and Capital Funds Analysis," "Risk Management," "Critical Accounting Policies,Estimates," "Supplemental Financial Data" and "Forward-Looking Statements" on pages F-4F-3 through F-46F-41 of the Financial Section of this report.

Item 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-33F-27 through F-38F-34 of the Financial Section of this report.
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Item 8.  Financial Statements and Supplementary Data.
Reference is made to the sections entitled “Consolidated Balance Sheets,” “Consolidated Statements of Income,” “Consolidated Statements of Comprehensive Income,” “Consolidated Statements of Changes in Shareholders' Equity,” “Consolidated Statements of Cash Flows,” “Notes to Consolidated Financial Statements,” “Report of Management,” and “Reports of Independent Registered Public Accounting Firm,” and “Historical Review”(PCAOB ID: 42) on pages F-47F-42 through F-116F-107 of the Financial Section of this report.

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.

Item 9A.  Controls and Procedures.
Disclosure Controls and Procedures
As required by Rule 13a-15(b) of the Exchange Act, management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation as of the end of the period covered by this Annual Report on Form 10-K, of the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Comerica's disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K.
Internal Control over Financial Reporting
Management's annual report on internal control over financial reporting and the related attestation report of Comerica's registered public accounting firm are included on pages F-110F-104 and F-111F-105 in the Financial Section of this report.
As required by Rule 13a-15(d) of the Exchange Act, management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our internal control over financial reporting to determine whether any changes occurred during the last quarter of the fiscal year covered by this Annual Report on Form 10-K that have materially affected, or are reasonably likely to materially affect, Comerica's internal control over financial reporting. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that there has been no such change during the last quarter of the fiscal year covered by this Annual Report on Form 10-K that has materially affected, or is reasonably likely to materially affect, Comerica's internal control over financial reporting.

Item 9B.  Other Information.
None.

Item 9C.  Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.

PART III
Item 10.  Directors, Executive Officers and Corporate Governance.
Comerica has a Senior Financial Officer Code of Ethics that applies to the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer and the Treasurer. The Senior Financial Officer Code of Ethics is available on Comerica's website at www.comerica.com. If any substantive amendments are made to the Senior Financial Officer Code of Ethics or if Comerica grants any waiver, including any implicit waiver, from a provision of the Senior Financial Officer Code of Ethics to the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer or the Treasurer, we will disclose the nature of such amendment or waiver on our website.
The remainder of the response to this item will be included under the sections captioned “Information About Nominees,” “Board and Committee Governance,” “Committees and Meetings of Directors,” and “Executive Officers” ofin Comerica's definitive Proxy Statement relating to the Annual Meeting of Shareholders, to be held on April 27, 2021, which sections are hereby incorporated by reference.

Item 11.  Executive Compensation.
The response to this item will be included under the sections captioned “Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” “Compensation of Directors,” “Governance, Compensation and Nominating Committee Report,” “2020 Summary Compensation Table,” “2020 Grants of Plan-Based Awards,” “Outstanding Equity Awards at Fiscal Year-End 2020,” “2020 Option Exercises and Stock Vested,” “Pension Benefits at Fiscal Year-End 2020,” “2020 Nonqualified Deferred Compensation,” “Potential Payments upon Termination or Change of Control at Fiscal Year-End 2020” and "Pay Ratio Disclosure" ofin Comerica's definitive Proxy Statement relating to the Annual Meeting of Shareholders, to be held on April 27, 2021, which sections are hereby incorporated by reference.

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Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The response to this item will be included under the sections captioned “Security Ownership of Certain Beneficial Owners,” “Security Ownership of Management” and "Securities Authorized for Issuance Under Equity Compensation Plans" ofin Comerica's definitive Proxy Statement relating to the Annual Meeting of Shareholders, to be held on April 27, 2021, which sections are hereby incorporated by reference.

Item 13.  Certain Relationships and Related Transactions, and Director Independence.
The response to this item will be included under the sections captioned “Director Independence,” “Transactions with Related Persons,” and “Information about Nominees” ofin Comerica's definitive Proxy Statement relating to the Annual Meeting of Shareholders, to be held on April 27, 2021, which sections are hereby incorporated by reference.

Item 14.  Principal Accountant Fees and Services.
The response to this item will be included under the section captioned “Independent Registered Public Accounting Firm” ofin Comerica's definitive Proxy Statement relating to the Annual Meeting of Shareholders, to be held on April 27, 2021, which section issections are hereby incorporated by reference.
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PART IV

Item 15.  Exhibits and Financial Statement Schedules.
Note Regarding Reliance on Statements in Our Contracts and Other Exhibits: We include agreements and other exhibits to this Annual Report on Form 10-K to provide information regarding their terms and not to provide any other factual or disclosure information about us, our subsidiaries or affiliates, or the other parties to the agreements, or for any other purpose. The agreements and other exhibits contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement or other arrangement and (i) should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) have in many cases been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; (iii) may apply standards of materiality in a way that is different from what may be viewed as material to investors; and (iv) were made only as of the date of the applicable agreement or other exhibit, or such other date or dates as may be specified in the document and are subject to more recent developments. Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.
The following documents are filed as a part of this report:
1.
Financial Statements: The financial statements that are filed as part of this report are included in the Financial Section on pages F-47F-42 through F-113.F-107.
2.All of the schedules for which provision is made in the applicable accounting regulations of the SEC are either not required under the related instruction, the required information is contained elsewhere in the Form 10-K, or the schedules are inapplicable and therefore have been omitted.
3.Exhibits:
2(not applicable)
3.1
Restated Certificate of Incorporation of Comerica Incorporated (filed as Exhibit 3.2 to Registrant's Current Report on Form 8-K dated August 4, 2010, and incorporated herein by reference).
3.2
Certificate of Amendment to Restated Certificate of Incorporation of Comerica Incorporated (filed as Exhibit 3.2 to Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, and incorporated herein by reference).
3.3
Amended and Restated Bylaws of Comerica Incorporated (filed as Exhibit 3.3 to Registrant's Current Report on Form 8-KdatedNovember3,2020, and incorporated herein by reference).
3.4
Certificate of Designations of 5.625% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, dated May 26, 2020, of Comerica Incorporated (including the form of 5.625% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A Certificate of Comerica Incorporated attached as Exhibit A thereto) (filed as Exhibit 3.1 to Registrant's Current Report on Form 8-K dated May 26, 2020, and incorporated herein by reference).
4[Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4 in respect of instruments defining the rights of security holders. In accordance with Regulation S-K Item No. 601(b)(4)(iii), the Registrant is not filing copies of instruments defining the rights of holders of long-term debt because none of those instruments authorizes debt in excess of 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis. The Registrant hereby agrees to furnish a copy of any such instrument to the SEC upon request.]
4.1
Deposit Agreement, dated May 26, 2020, among Comerica Incorporated, Computershare Inc., Computershare Trust Company, N.A. and the holders from time to time of the depositary receipts issued thereunder (including the form of depositary share receipt attached as Exhibit A thereto) (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated May 26, 2020, and incorporated herein by reference).
4.2
Description of Registrant's Securities
9(not applicable)
10.1†
Comerica Incorporated Amended and Restated 2018 Long-Term Incentive Plan (filed as Exhibit 10.1 to Registrant's CurrentRegistrant’s Quarterly Report on Form 8-K dated April 24, 2018,10-Q for the quarter ended March 30, 2021, and incorporated herein by reference).
A†
Form of Standard Comerica Incorporated Restricted Stock Unit Agreement (cliff vesting) under the Comerica Incorporated 2018 Long-Term Incentive Plan (filed as Exhibit 10.2 to Registrant's Current Report on Form 8-K dated April 24, 2018, and incorporated herein by reference).
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B†
Form of Standard Comerica Incorporated Restricted Stock Unit Agreement (non-cliff vesting) under the Comerica Incorporated 2018 Long-Term Incentive Plan (filed as Exhibit 10.3 to Registrant's Current Report on Form 8-K dated April 24, 2018, and incorporated herein by reference).
C†
D†
E†
E†F†
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F†G†
Form of Standard Comerica Incorporated Senior Executive Long-Term Performance Restricted Stock Unit Award Agreement (Director Version) under the Comerica Incorporated 2018 Long-Term Incentive Plan (2019 version) (filed as Exhibit 10.1G10.1L to Registrant's AnnualQuarterly Report on Form 10-K10-Q for the yearquarter ended December 31, 2018),June 30, 2021, and incorporated herein by referencereference).
G†H†
H†I†
J†
K†
Form of Standard Comerica Incorporated Restricted Stock Agreement (cliff vesting) under the Comerica Incorporated 2018 Long-Term Incentive Plan (filed as Exhibit 10.6 to Registrant's Current Report on Form 8-K dated April 24, 2018, and incorporated herein by reference).
I†L†
Form of Standard Comerica Incorporated Restricted Stock Agreement (non-cliff vesting) under the Comerica Incorporated 2018 Long-Term Incentive Plan (filed as Exhibit 10.7 to Registrant's Current Report on Form 8-K dated April 24, 2018, and incorporated herein by reference).
J†M†
Form of Standard Comerica Incorporated RestrictedNon-Qualified Stock Option Agreement (cliff vesting) under the Comerica Incorporated 2018 Long-Term Incentive Plan (2-year version)(filed(filed as Exhibit 10.1H10.4 to Registrant's QuarterlyCurrent Report on Form 10-Q for the quarter ended June 30, 2020,8-K dated April 24, 2018, and incorporated herein by reference).
N†
Formof Standard Comerica Incorporated Restricted Stock Unit Award Agreement under the Comerica Incorporated 2018 Long-Term Incentive Plan (2023 non-cliff 2-3-4 version).
10.2†
Comerica Incorporated 2006 Amended and Restated Long-Term Incentive Plan (filed as Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2016, and incorporated herein by reference).
A†
Form of Standard Comerica Incorporated Non-Qualified Stock Option Agreement under the Comerica Incorporated Amended and Restated 2006 Long-Term Incentive Plan (filed as Exhibit 10.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2006, and incorporated herein by reference).
B†
Form of Standard Comerica Incorporated Non-Qualified Stock Option Agreement under the Comerica Incorporated Amended and Restated 2006 Long-Term Incentive Plan (2011 version) (filed as Exhibit 10.44 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2010, and incorporated herein by reference).
C†
Form of Standard Comerica Incorporated Non-Qualified Stock Option Agreement under the Comerica Incorporated Amended and Restated 2006 Long-Term Incentive Plan (2012 version) (filed as Exhibit 10.1C to Registrant's Annual Report on Form 10-K for the year ended December 31, 2011, and incorporated herein by reference).
D†B†
Form of Standard Comerica Incorporated Non-Qualified Stock Option Agreement under the Comerica Incorporated Amended and Restated 2006 Long-Term Incentive Plan (2014 version) (filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K dated January 21, 2014, and incorporated herein by reference).
E†C†
Form of Standard Comerica Incorporated Non-Qualified Stock Option Agreement under the Comerica Incorporated Amended and Restated 2006 Long-Term Incentive Plan (2014 version 2) (filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K dated July 22, 2014, and incorporated herein by reference).
32
Table of Contents
F†D†
Form of Standard Comerica Incorporated Non-Qualified Stock Option Agreement under the Comerica Incorporated Amended and Restated 2006 Long-Term Incentive Plan (2015 version) (filed as Exhibit 10.2 to Registrant's Current Report on Form 8-K dated November 10, 2015, and incorporated herein by reference).
G†E†
Form of Standard Comerica Incorporated Non-Qualified Stock Option Agreement under the Comerica Incorporated Amended and Restated 2006 Long-Term Incentive Plan (2017 version) (filed as Exhibit 10.1G to Registrant's Annual Report on Form 10-K for the year ended December 31, 2016, and incorporated herein by reference).
H†F†
Form of Standard Comerica Incorporated Restricted Stock Award Agreement (non-cliff vesting) under the Amended and Restated Comerica Incorporated 2006 Long-Term Incentive Plan (2014 version 2) (filed as Exhibit 10.2 to Registrant's Current Report on Form 8-K dated July 22, 2014, and incorporated herein by reference).
I†
Form of Standard Comerica Incorporated Restricted Stock Award Agreement (non-cliff vesting) under the Amended and Restated Comerica Incorporated 2006 Long-Term Incentive Plan (2017 version) (filed as Exhibit 10.1M to Registrant's Annual Report on Form 10-K for the year ended December 31, 2016, and incorporated herein by reference).
J†
Form of Standard Comerica Incorporated Restricted Stock Award Agreement (cliff vesting) under the Comerica Incorporated 2006 Amended and Restated Long-Term Incentive Plan (2017 version) (filed as Exhibit 10.1Q to Registrant's Annual Report on Form 10-K for the year ended December 31, 2016, and incorporated herein by reference).
K†
Form of Standard Comerica Incorporated Restricted Stock Unit Agreement under the Amended and Restated Comerica Incorporated 2006 Long-Term Incentive Plan (2011 version) (filed as Exhibit 10.47 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2010, and incorporated herein by reference).
29
Table of Contents
L†
Form of Standard Comerica Incorporated Restricted Stock Unit Award Agreement under the Amended and Restated Comerica Incorporated 2006 Long-Term Incentive Plan (2018 version - non-cliff vesting) (filed as Exhibit 10.2 to Registrant's Current Report on Form 8-K dated November 8, 2017, and incorporated herein by reference).
M†
Form of Standard Comerica Incorporated Restricted Stock Unit Award Agreement under the Amended and Restated Comerica Incorporated 2006 Long-Term Incentive Plan (2018 version - cliff vesting) (filed as Exhibit 10.3 to Registrant's Current Report on Form 8-K dated November 8, 2017, and incorporated herein by reference).
N†
Form of Standard Comerica Incorporated Senior Executive Long-Term Performance Restricted Stock Unit Award Agreement under the Amended and Restated Comerica Incorporated 2006 Long-Term Incentive Plan (2018 version) (filed as Exhibit 10.1Y to Registrant's Annual Report on Form 10-K for the year ended December 31, 2017, and incorporated herein by reference).
10.3†
Amended and Restated Sterling Bancshares, Inc. 2003 Stock Incentive and Compensation Plan effective April 30, 2007 (filed as Exhibit 10.1 to Sterling Bancshares, Inc.'s Current Report on Form 8-K dated August 14, 2007 (File No. 000-20750), and incorporated herein by reference).
10.4†
Comerica Incorporated Amended and Restated Employee Stock Purchase Plan (amended and restated October 22, 2013) (filed as Exhibit 10.5 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2013, and incorporated herein by reference).
10.5†
Comerica Incorporated 2016 Management Incentive Plan (filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K dated May 2, 2016, and incorporated herein by reference).
10.6†10.4†
Form of Standard Comerica Incorporated No Sale Agreement under the Comerica Incorporated Amended and Restated Management Incentive Plan (filed as Exhibit 10.5 to Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, and incorporated herein by reference).
10.7†10.5†
Supplemental Retirement Income Account Plan (formerly known as the Amended and Restated Benefit Equalization Plan for Employees of Comerica Incorporated) (amended and restated October 13, 2016, with amendments effective January 1, 2017) (filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K dated January 24, 2017, and incorporated herein by reference).
10.8†10.6†
1999 Comerica Incorporated Amended and Restated Deferred Compensation Plan (amended and restated on July 26, 2011)effective December 31, 2022) (filed as Exhibit 10.110.7 to Registrant's Current Report on Form 8-K dated July 26, 2011,November 8, 2022, and incorporated herein by reference).
10.9†10.7†
1999 Comerica Incorporated Amended and Restated Common Stock Deferred Incentive Award Plan (amended and restated on July 26, 2011)effective December 31, 2022) (filed as Exhibit 10.210.8 to Registrant's Current Report on Form 8-K dated July 26, 2011,November 8, 2022, and incorporated herein by reference).
10.10†10.8†
Sterling Bancshares, Inc. Deferred Compensation Plan (as Amended and Restated) (filed as Exhibit 4.4 to Registrant's Registration Statement on Form S-8 dated July 28, 2011 (Registration No. 333-175857) and incorporated herein by reference).
10.11†
Amended and Restated Comerica Incorporated Non-Employee Director Fee Deferral Plan (amended and restated effective July 1, 2020) (filed as Exhibit 10.11 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, and incorporated herein by reference).
10.12†10.9†
Amended and Restated Comerica Incorporated Common Stock Non-Employee Director Fee Deferral Plan (amended and restated effective July 1, 2020)(filed as Exhibit 10.12 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, and incorporated herein by reference).
10.13†10.10†
Comerica Incorporated Amended and Restated Incentive Plan for Non-Employee Directors (amended and restated effective May 15, 2014) (filed as Exhibit 10.3 to Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, and incorporated herein by reference).
A†
Form of Standard Comerica Incorporated Non-Employee Director Restricted Stock Unit Agreement under the Comerica Incorporated Amended and Restated Incentive Plan for Non-Employee Directors (filed as Exhibit 10.2 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, and incorporated herein by reference).
B†
Form of Standard Comerica Incorporated Non-Employee Director Restricted Stock Unit Agreement under the Comerica Incorporated Amended and Restated Incentive Plan for Non-Employee Directors (Version 2) (filed as Exhibit 10.6 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, and incorporated herein by reference).
C†
Form of Standard Comerica Incorporated Non-Employee Director Restricted Stock Unit Agreement under the Comerica Incorporated Amended and Restated Incentive Plan for Non-Employee Directors (Version 2.5) (filed as Exhibit 10.48 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2010, and incorporated herein by reference).
30
Table of Contents
D†
Form of Standard Comerica Incorporated Non-Employee Director Restricted Stock Unit Agreement under the Comerica Incorporated Amended and Restated Incentive Plan for Non-Employee Directors (Version 3) (filed as Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, and incorporated herein by reference).
E†
Form of Standard Comerica Incorporated Non-Employee Director Restricted Stock Unit Agreement under the Comerica Incorporated Amended and Restated Incentive Plan for Non-Employee Directors (Version 4) (filed as Exhibit 10.4 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, and incorporated herein by reference).
33
Table of Contents
10.14†10.11†
2015 Comerica Incorporated Incentive Plan for Non-Employee Directors (filed as Exhibit 10.4 to Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, and incorporated herein by reference).
A†
Form of Standard Comerica Incorporated Non-Employee Director Restricted Stock Unit Agreement under the 2015 Comerica Incorporated Incentive Plan for Non-Employee Directors (filed as Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, and incorporated herein by reference).
10.15†10.12†
Form of Indemnification Agreement between Comerica Incorporated and certain of its directors and officers (filed as Exhibit 10.6 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2002, and incorporated herein by reference).
10.16†10.13†
Supplemental Pension and Retiree Medical Agreement with Ralph W. Babb Jr. (filed as Exhibit 10.2 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998, and incorporated herein by reference).
10.17A†10.14†
10.17B†10.15†
Restrictive Covenants and General Release Agreement by and between Muneera S. Carr and Comerica Incorporated dated September 30, 2019 (filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K dated September 30, 2019, and incorporated herein by reference).
10.17C†
Restrictive Covenants and General Release Agreement by and between Ralph W. Babb, Jr. and Comerica Incorporated dated December 17, 2019 (filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K dated December 17, 2019, and incorporated herein by reference).
10.18†
Form of Change of Control Employment Agreement (BE4 and Higher Version without gross-up or window period-current) (filed as Exhibit 10.10 to Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, and incorporated herein by reference).
A†
10.19†10.16†
Form of Change of Control Employment Agreement (BE4 and Higher Version without gross-up or window period-2015 version) (filed as Exhibit 10.2 to Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, and incorporated herein by reference).
A†
10.20†10.17†
Form of Change of Control Employment Agreement (BE4 and Higher Version) (filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K dated November 18, 2008, and incorporated herein by reference).
A†
Schedule of Named Executive Officers Party to Change of Control Employment Agreement (BE4 and Higher Version).
10.21†10.18†
Form of Change of Control Employment Agreement (BE4 and Higher Version without gross-up or window period-2009 version) (filed as Exhibit 10.42 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2009, and incorporated herein by reference).
10.22†10.19†
13(not applicable)
14(not applicable)
16(not applicable)
18(not applicable)
31
Table of Contents
21
Subsidiaries of Registrant.
22(not applicable)
23.1
Consent of Ernst & Young LLP.
24(not applicable)
31.1
Chairman, President and CEO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002).
31.2
Senior Executive Vice President and CFO Rule 13a-14(a)/15d-14(a) Certification of Periodic Report (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002).
32
Section 1350 Certification of Periodic Report (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002).
33(not applicable)
34(not applicable)
34
Table of Contents
35(not applicable)
95(not applicable)
96(not applicable)
99(not applicable)
101Financial statements from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2020,2023, formatted in Inline XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Changes in Shareholders' Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements.
104The cover page from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2020,2023, formatted in Inline XBRL (included in Exhibit 101).
†Management contract or compensatory plan or arrangement.
 File No. for all filings under Exchange Act, unless otherwise noted: 1-10706.

Item 16.  Form 10-K Summary.
Not applicable.
3235
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FINANCIAL REVIEW AND REPORTS
Comerica Incorporated and Subsidiaries
F-2F-2
F-3
F-43
F-53
F-109
F-1612
F-2218
F-3935
F-4439
F-4540
Consolidated Balance Sheets
F-4742
Consolidated Statements of Income
F-4843
Consolidated Statements of Comprehensive Income
F-4944
Consolidated Statements of Changes in Shareholders’ Equity
F-5045
Consolidated Statements of Cash Flows
F-5146
F-5247
F-110104
F-111
F-114105

















F-1
Table of Contents
PERFORMANCE GRAPH
The graph shown below compares the total returns (assuming reinvestment of dividends) of Comerica Incorporated common stock, the S&P 500 Index and the KBW Bank Index. The graph assumes $100 invested in Comerica Incorporated common stock (returns based on stock prices per the NYSE) and each of the indices on December 31, 20152018 and the reinvestment of all dividends during the periods presented.
cma-20201231_g1.jpg402
201520162017201820192020
2018201820192020202120222023
Comerica IncorporatedComerica Incorporated100166215174188156Comerica Incorporated10010890146116103
KBW Bank IndexKBW Bank Index100129152125171153KBW Bank Index100136122169133132
S&P 500 IndexS&P 500 Index100112136130171203S&P 500 Index100131156200164207

The performance shown on the graph is not necessarily indicative of future performance.

F-2
Table of Contents
SELECTED FINANCIAL DATA
(dollar amounts in millions, except per share data)
Years Ended December 3120202019201820172016
EARNINGS SUMMARY
Net interest income$1,911$2,339$2,352$2,061$1,797
Provision for credit losses53774(1)74248
Noninterest income1,0011,010976(a)1,1071,051
Noninterest expenses1,7841,7431,794(a), (b)1,860(b)1,930(b)
Provision for income taxes117334300491(c)193
Net income4741,1981,235743477
Preferred stock dividends13————
Net income attributable to common shares4591,1911,227738473
PER SHARE OF COMMON STOCK
Diluted earnings per common share$3.27$7.87$7.20$4.14$2.68
Cash dividends declared2.722.681.841.090.89
Common shareholders’ equity55.0151.5746.8946.0744.47
Tangible common equity (d)50.4347.0742.8942.3440.79
Market value55.8671.7568.6986.8168.11
Average diluted shares (in millions)
140151171178177
YEAR-END BALANCES
Total assets$88,129$73,402$70,818$71,567$72,978
Total earning assets82,22767,76765,51365,88067,518
Total loans52,29150,36950,16349,17349,088
Total deposits72,86957,29555,56157,90358,985
Total medium- and long-term debt5,7287,2696,4634,6225,160
Total common shareholders’ equity7,6567,3277,5077,9637,796
Total shareholders' equity8,0507,3277,5077,9637,796
AVERAGE BALANCES
Total assets$81,146$71,488$70,724$71,452$71,743
Total earning assets75,41966,13465,41066,30066,545
Total loans51,63150,51148,76648,55848,996
Total deposits65,03855,48155,93557,25857,741
Total medium- and long-term debt6,5496,9555,8424,9694,917
Total common shareholders’ equity7,4537,3087,8097,9527,674
Total shareholders' equity7,6917,3087,8097,9527,674
CREDIT QUALITY
Total allowance for credit losses$992(d)$668$701$754$771
Total nonperforming loans350204229410590
Foreclosed property and other repossessed assets9111517
Total nonperforming assets359215230415607
Net credit-related charge-offs1961075192157
Net credit-related charge-offs as a percentage of average total loans0.38 %0.21 %0.11 %0.19 %0.32 %
Allowance for loan losses as a percentage of total period-end loans1.811.271.341.451.49
Allowance for credit losses as a percentage of total period-end loans1.901.331.401.531.57
Allowance for loan losses as a multiple of total nonperforming loans2.7x3.1x2.9x1.7x1.2x
Allowance for credit losses as a multiple of total nonperforming loans2.8x3.3x3.1x1.8x1.3x
RATIOS
Net interest margin2.54 %3.54 %3.58 %3.11 %2.71 %
Return on average assets0.581.681.751.040.67
Return on average common shareholders’ equity6.1816.3915.829.346.22
Dividend payout ratio79.7833.7125.1725.7732.48
Average common shareholders’ equity as a percentage of average assets9.1810.2211.0411.1310.70
Common equity tier 1 capital as a percentage of risk-weighted assets (e)10.3410.1311.1411.6811.09
Tier 1 capital as a percentage of risk-weighted assets (e)10.9310.1311.1411.6811.09
Common equity ratio8.699.9810.6011.1310.68
Tangible common equity as a percentage of tangible assets (e)8.029.199.7810.329.89
(a)Effective January 1, 2018, adoption of "Topic 606: Revenue from Contracts with Customers" (Topic 606) resulted in a change in presentation which records certain costs in the same category as the associated revenues. The effect of this change was to reduce noninterest income and expenses by $145 million for the year ended December 31, 2018.
(b)Noninterest expenses included restructuring charges of $53 million, $45 million and $93 million in 2018, 2017 and 2016, respectively.
(c)The provision for income taxes for 2017 was impacted by a $107 million charge to adjust deferred taxes as a result of the enactment of the Tax Cuts and Jobs Act.
(d)Allowance for credit losses for December 31, 2020 calculated using the CECL model effective first quarter 2020.
(e)See Supplemental Financial Data section for reconciliations of non-GAAP financial measures and regulatory ratios.
F-3
Table of Contents
20202023 OVERVIEW
Comerica Incorporated (the Corporation) is a financial holding company headquartered in Dallas, Texas. The Corporation's major business segments are the Commercial Bank, the Retail Bank and Wealth Management. The core businesses are tailored to each of the Corporation's three primary geographic markets: Michigan, California and Texas. Information about the activities of the Corporation's business and market segments is provided in Note 22 to the consolidated financial statements.
As a financial institution, the Corporation's principal activity is lending to and accepting deposits from businesses and individuals. 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. 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. Success in providing products and services depends on the financial needs of customers and the types of products desired.
The accounting and reporting policies of the Corporation and its subsidiaries conform to generally accepted accounting principles (GAAP) in the United States (U.S.). The Corporation's consolidated financial statements are prepared based on the application of accounting policies, the most significant of which are described in Note 1 to the consolidated financial statements. When necessary, the Corporation uses reasonable assumptions to develop estimates that affect the consolidated results of operations. The most critical of these significant accounting policiesestimates are discussed in the “Critical Accounting Policies”Estimates” section of this financial review.
Full-Year 20202023 compared to Full-Year 20192022
•Net income decreased $724$270 million or 60 percent, to $474$881 million, driven by increasedincreases in noninterest expenses and provision for credit losses, partially offset by an increase in light of the forecasted impacts related to the COVID-19 pandemic and lower net interest income resulting from a lower rate environment. due to higher short-term rates and loan growth.
•Diluted net income per common share was $3.27$6.44 in 20202023 compared to $7.87$8.47 in 2019.2022.
•Average loans increased $1.1$3.4 billion, or 27 percent, to $51.6 billion. The increase primarily reflected$53.9 billion, and included increases in Commercial Real Estate, National Dealer Services, Corporate Banking, Wealth Management and Environmental Services, partially offset by declines in Mortgage Banker Finance Commercial Real Estate and smaller increases in Business, Retail and Corporate Banking, partially offset by decreases in National Dealer Services and Energy. In 2020, the Corporation participated as a lender in the Small Business Administration's Paycheck Protection Program (PPP), created in responserelated to the COVID-19 pandemic. Average PPP loans for 2020 were $2.5 billion.planned exit from this line of business and Equity Fund Services.
•Average securities increased $1.3decreased $1.6 billion, or 118 percent, to $13.4$17.4 billion, as a portionreflecting unrealized losses and maturities of excess liquidity was invested in $1.8 billion of U.S. Treasury bonds and $500 millionsecurities, partially offset by the full-year impact of mortgage-backed securities in the third quarter 2020.purchased during 2022.
•Average deposits increased $9.6decreased $9.5 billion, or 1713 percent, to a record level of $65.0 billion, driven by customers conserving cash in an uncertain economy.$66.0 billion. Average noninterest-bearing deposits, increased $6.4which decreased $11.1 billion, or 2427 percent, whilewere impacted by customer diversification efforts following the banking industry disruption in the first quarter of 2023, partially offset by an increase in average interest-bearing deposits increased $3.2of $1.7 billion, or 11 percent.5 percent, primarily due to increases in brokered time deposits and customer certificates of deposit.
•Average short-term borrowings increased $6.8 billion to $7.2 billion, while average medium- and long-term debt increased $3.0 billion to $5.8 billion, reflecting higher Federal Home Loan Bank (FHLB) advances.
•Net interest income decreased $428increased $48 million to $1.9$2.5 billion, and the net interest margin decreased 100increased 4 basis points to 2.543.06 percent, primarily reflecting the impact of lower interest rates.largely due to higher short-term rates and average loan growth, partly offset by an increase in average borrowings and interest-bearing deposits.
•The provision for credit losses increased $463$29 million to $537$89 million, in 2020 from $74 million in 2019, reflecting average loan growth, an uncertain economic outlook and credit migration, and the forecasted impact of the COVID-19 pandemic, including the economic impacts of social distancing which peaked during the first half of 2020, and pressures on Energy.as well as changes in portfolio composition.
•Noninterest income was relatively stable at $1.0increased $10 million to $1.1 billion, reflecting increases in deferred compensation asset returns (offset in noninterest expenses), FHLB stock dividends, brokerage fees, card fees, commercial lending fees and letter of credit fees, partially offset by decreases in risk management hedging income, service charges on deposit accounts and commercial lending fees, partially offset by increases in securities trading income and card fees.capital markets income.
•Noninterest expenses increased $41$361 million to $1.8$2.4 billion, primarily due to increases in operational losses,FDIC insurance expense, salaries and benefits expense, non-salary pension expense, outside processing fee expense, (netlitigation and regulatory-related expenses, consulting fees, software expense and legal fees, partially offset by gains on the sale of cloud computing accounting classification change) and FDIC insurance expense, as well as additional expenses related to COVID-19, which included compensation and stipends to colleagues, charitable contributions, cleaning supplies, personal protective equipment and PPP technology costs.
•The provision for income taxes decreased $217 million to $117 million, primarily due to lower pre-tax income.real estate during the current year.
•The Corporation repurchased approximately 3.2 million shares ofdeclared common stock prior to the suspension of the share repurchase program in first quarter 2020 and issued cash dividends of $2.72$2.84 per share, returning a total of $567$375 million to common shareholders.
•The Additionally, the Corporation issued $400declared $23 million of 5.625% non-cumulative perpetual preferred stock in second quarter 2020, resulting in preferred dividends declared of $13 million.dividends.
F-4
Table of Contents
RESULTS OF OPERATIONS
The following provides a comparative discussion of the Corporation's consolidated results of operations for 20202023 compared to 2019.2022. A comparative discussion of results for 20192022 compared to 20182021 is provided in the "Results of Operations" section beginning on page F-6F-3 of the Corporation's 20192022 Annual Report. For a discussion

F-3
Table of the Critical Accounting Policies that affect the consolidated results of operations, see the "Critical Accounting Policies" section of this financial review.Contents
Analysis of Net Interest Income
(dollar amounts in millions)(dollar amounts in millions)
Years Ended December 31Years Ended December 31202020192018
Average
Balance		InterestAverage
Rate		Average
Balance		InterestAverage
Rate		Average
Balance		InterestAverage
Rate
Commercial loans (a)$32,144 $1,099 3.42 %$32,053 $1,544 4.81 %$30,534 $1,416 4.64 %
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31202320222021
Average
Balance		Average
Balance		InterestAverage
Rate		Average
Balance		InterestAverage
Rate		Average
Balance		InterestAverage
Rate
Commercial loans (a) (b)Commercial loans (a) (b)$30,009 $1,651 5.51 %$29,846 $1,278 4.28 %$29,283 $1,009 3.45 %
Real estate construction loansReal estate construction loans3,912 147 3.76 3,325 184 5.54 3,155 164 5.21 
Commercial mortgage loansCommercial mortgage loans9,839 320 3.25 9,170 447 4.88 9,131 429 4.69 
Lease financing594 20 3.37 557 19 3.44 470 18 3.82 
Lease financing (c)
International loansInternational loans1,028 37 3.61 1,019 52 5.13 1,021 51 4.97 
Residential mortgage loansResidential mortgage loans1,905 66 3.45 1,929 74 3.85 1,983 75 3.77 
Consumer loansConsumer loans2,209 84 3.80 2,458 119 4.85 2,472 109 4.41 
Total loans (b)51,631 1,773 3.44 50,511 2,439 4.83 48,766 2,262 4.64 
Mortgage-backed securities (c)9,820 221 2.30 9,348 230 2.44 9,099 214 2.28 
U.S. Treasury securities (d)3,612 70 1.98 2,772 67 2.43 2,711 51 1.86 
Total loans (d)
Mortgage-backed securities (e)
U.S. Treasury securities (f)
Total investment securitiesTotal investment securities13,432 291 2.21 12,120 297 2.44 11,810 265 2.19 
Interest-bearing deposits with banks10,203 28 0.27 3,360 69 2.05 4,700 91 1.94 
Interest-bearing deposits with banks (g)
Other short-term investmentsOther short-term investments153 1 0.72 143 2 1.26 134 1 0.96 
Total earning assetsTotal earning assets75,419 2,093 2.79 66,134 2,807 4.24 65,410 2,619 3.99 
Cash and due from banksCash and due from banks878 887 1,135 
Allowance for loan lossesAllowance for loan losses(900)(667)(695)
Allowance for loan losses
Allowance for loan losses
Accrued income and other assets
Accrued income and other assets
Accrued income and other assetsAccrued income and other assets5,749 5,134 4,874 
Total assetsTotal assets$81,146 $71,488 $70,724 
Money market and interest-bearing checking deposits$26,798 72 0.27 $23,417 214 0.91 $22,378 111 0.50 
Total assets
Total assets
Money market and interest-bearing checking deposits (h)
Money market and interest-bearing checking deposits (h)
Money market and interest-bearing checking deposits (h)
Savings depositsSavings deposits2,454 1 0.03 2,166 1 0.05 2,199 1 0.04 
Customer certificates of depositCustomer certificates of deposit2,626 27 1.02 2,522 30 1.18 2,090 10 0.46 
Other time depositsOther time deposits17 — 2.00 705 17 2.44 2 — 1.86 
Foreign office time deposits (e)90 1 0.42 27 — 1.39 25 — 1.19 
Foreign office time deposits
Total interest-bearing depositsTotal interest-bearing deposits31,985 101 0.31 28,837 262 0.91 26,694 122 0.46 
Short-term borrowings314 1 0.32 369 9 2.39 62 1 1.93 
Federal funds purchased
Other short-term borrowings
Medium- and long-term debt
Medium- and long-term debt
Medium- and long-term debtMedium- and long-term debt6,549 80 1.23 6,955 197 2.82 5,842 144 2.47 
Total interest-bearing sourcesTotal interest-bearing sources38,848 182 0.47 36,161 468 1.29 32,598 267 0.82 
Noninterest-bearing depositsNoninterest-bearing deposits33,053 26,644 29,241 
Accrued expenses and other liabilitiesAccrued expenses and other liabilities1,554 1,375 1,076 
Accrued expenses and other liabilities
Accrued expenses and other liabilities
Shareholders’ equity
Shareholders’ equity
Shareholders’ equityShareholders’ equity7,691 7,308 7,809 
Total liabilities and shareholders’ equityTotal liabilities and shareholders’ equity$81,146 $71,488 $70,724 
Total liabilities and shareholders’ equity
Total liabilities and shareholders’ equity
Net interest income/rate spread
Net interest income/rate spread
Net interest income/rate spreadNet interest income/rate spread$1,911 2.32 $2,339 2.95 $2,352 3.17 
Impact of net noninterest-bearing sources of fundsImpact of net noninterest-bearing sources of funds 0.22 0.59 0.41 
Net interest margin (as a percentage of average earning assets)Net interest margin (as a percentage of average earning assets) 2.54 % 3.54 % 3.58 %Net interest margin (as a percentage of average earning assets) 3.06 %  3.02 %  2.21 %
(a)Includes PPPInterest income on commercial loans included (expense) income related to swap settlements of $(602) million, $(25) million and $95 million for the years ended December 31, 2023, 2022 and 2021, respectively.
(b)Included Paycheck Protection Program (PPP) loans with average balancebalances of $2.5$30 million, $147 million and $2.3 billion, interest income of $63$1 million, $11 million and $111 million and average yieldyields of 2.49%1.65%, 7.25% and 4.77% for the yearyears ended December 31, 2020.2023, 2022 and 2021, respectively.
(b)(c)Included residual value adjustments totaling $6 million, $3 million, and $20 million, which impacted the average yield on loans by 1 basis point, 1 basis point and 4 basis points for the years ended December 31, 2023, 2022 and 2021, respectively.
(d)Nonaccrual loans are included in average balances reported and in the calculation of average rates.
(c)(e)Average balances included $213 million, $(36) million$(2.9) billion, $(1.8) billion and $(263)$61 million of unrealized (losses) gains and losses for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively; yields calculated gross of these unrealized gains and losses.
(d)(f)Average balances included $90$(115) million, $30$(117) million and $(37)$27 million of unrealized (losses) gains and losses for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively; yields calculated gross of these unrealized gains and losses.
(e)(g)Includes substantially all deposits by foreign depositors; deposits are primarily in excessAverage balances included $5 million, excluded $769 million and excluded $375 million of $100,000.collateral posted and netted against derivative liability positions for the years ended December 31, 2023, 2022 and 2021, respectively; yields calculated gross of derivative netting amounts.

(h)Average balances excluded $195 million, $128 million and $156 million of collateral received and netted against derivative asset positions for the years ended December 31, 2023, 2022 and 2021, respectively; yields calculated gross of derivative netting amounts.

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Rate/Volume Analysis
(in millions)(in millions)
Years Ended December 31Years Ended December 312020/20192019/2018
Decrease
Due to Rate		Increase
(Decrease)
Due to 
Volume (a)		Net
(Decrease)
Increase		Increase (Decrease)
Due to Rate		Increase
(Decrease)
Due to 
Volume (a)		Net
Increase
(Decrease)
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 312023/20222022/2021
Increase (Decrease)
Due to Rate (a)
Increase (Decrease)
Due to Rate (a)
Increase
(Decrease)
Due to 
Volume (a)		Net
Increase (Decrease)
Increase (Decrease)
Due to Rate (a)
Increase (Decrease)
Due to 
Volume (a)
Net
Increase (Decrease)
Interest Income:Interest Income:
Commercial loansCommercial loans$(447)$2 $(445)$54 $74 $128 
Commercial loans
Commercial loans
Real estate construction loans
Real estate construction loans
Real estate construction loansReal estate construction loans(59)22 (37)11 9 20 
Commercial mortgage loansCommercial mortgage loans(149)22 (127)16 2 18 
Commercial mortgage loans
Commercial mortgage loans
Lease financing
Lease financing
Lease financingLease financing— 1 1 (2)3 1 
International loansInternational loans(15)— (15)1 — 1 
International loans
International loans
Residential mortgage loans
Residential mortgage loans
Residential mortgage loansResidential mortgage loans(7)(1)(8)1 (2)(1)
Consumer loansConsumer loans(26)(9)(35)11 (1)10 
Consumer loans
Consumer loans
Total loans
Total loans
Total loans Total loans(703)37 (666)92 85 177 
Mortgage-backed securitiesMortgage-backed securities(14)5 (9)15 1 16 
Mortgage-backed securities
Mortgage-backed securities
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securitiesU.S. Treasury securities(12)15 3 17 (1)16 
Total investment securities Total investment securities(26)20 (6)32 — 32 
Total investment securities
Total investment securities
Interest-bearing deposits with banks
Interest-bearing deposits with banks
Interest-bearing deposits with banksInterest-bearing deposits with banks(59)18 (41)5 (27)(22)
Other short-term investmentsOther short-term investments(1)— (1)— 1 1 
Other short-term investments
Other short-term investments
Total interest income
Total interest income
Total interest incomeTotal interest income(789)75 (714)129 59 188 
Interest Expense:Interest Expense:
Interest Expense:
Interest Expense:
Money market and interest-bearing checking depositsMoney market and interest-bearing checking deposits(151)9 (142)96 7 103 
Money market and interest-bearing checking deposits
Money market and interest-bearing checking deposits
Savings deposits
Savings deposits
Savings deposits
Customer certificates of deposit
Customer certificates of deposit
Customer certificates of depositCustomer certificates of deposit(4)1 (3)10 10 20 
Other time depositsOther time deposits(16)(1)(17)— 17 17 
Other time deposits
Other time deposits
Foreign office time deposits
Foreign office time deposits
Foreign office time depositsForeign office time deposits— 1 1 — — — 
Total interest-bearing depositsTotal interest-bearing deposits(171)10 (161)106 34 140 
Short-term borrowings(8)— (8)— 8 8 
Total interest-bearing deposits
Total interest-bearing deposits
Federal funds purchased
Federal funds purchased
Federal funds purchased
Other short term borrowings
Other short term borrowings
Other short term borrowings
Medium- and long-term debt
Medium- and long-term debt
Medium- and long-term debtMedium- and long-term debt(110)(7)(117)16 37 53 
Total interest expenseTotal interest expense(289)3 (286)122 79 201 
Total interest expense
Total interest expense
Net interest incomeNet interest income$(500)$72 $(428)$7 $(20)$(13)
Net interest income
Net interest income
(a)Rate/Impact of other portfolio dynamics and interest rate swaps reflected as part of rate impact, rate/volume variances are allocated to variances due to volume.
Net interest income is the difference between interest earned on assets and interest paid on liabilities. Gains and losses related to risk management interest rate swaps that convert fixed rate debt to a floating rate and qualify as fair value hedges are included in interest expense on medium- and long-term debt. Additionally, the portion of gains and losses on risk management interest rate swaps that convert variable-rate loans to fixed rates through cash flow hedges that relate to the earnings effect of the hedged loans during the period are included in loan interest income.
Refer to the Analysis of Net Interest Income and the Rate/Volume Analysis tables above for an analysis of net interest income for the years ended December 31, 2020, 20192023, 2022 and 20182021 and details of the components of the change in net interest income for 20202023 compared to 20192022 as well as 20192022 compared to 2018.2021.
Net interest income was $1.9$2.5 billion a decreasefor the year ended December 31, 2023, an increase of $428$48 million andcompared to the year ended December 31, 2022. The increase in net interest income reflected the net benefit from higher short-term rates and loan growth, partially offset by increased balances of interest-bearing deposits and borrowings. Net interest margin decreased 100increased 4 basis points to 2.543.06 percent both primarilyfor the year ended December 31, 2023, reflecting the impact of lower interest rates. higher short-term rates, partially offset by higher- cost funding sources.
Average earning assets of $79.2 billion were relatively stable compared to the prior year and included $3.4 billion in loan growth, partially offset by declines of $1.8 billion in interest-bearing deposits with banks and $1.6 billion in investment securities. Average interest-bearing funding sources increased $9.3$11.5 billion, primarily reflectingdriven by increases of $6.8 billion in lower-yielding interest-bearing deposits with banks and $2.5short-term borrowings, $3.0 billion in PPP loans. Average funding sources increased $2.7 billion, reflecting a $3.2 billion increase in interest-bearing deposits, partially offset by a $406 million decrease in medium- and long-term debt.debt and $1.7 billion in interest-bearing deposits.
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The Corporation utilizes various asset and liability management strategies to manage net interest income exposure to interest rate risk. Refer to the “Market and Liquidity Risk” section of this financial review for additional information regarding the Corporation's asset and liability management policies and the “Balance Sheet and Capital Funds Analysis” section for further discussion on changes in earning assets and interest-bearing liabilities.
Provision for Credit Losses
The provision for credit losses which includesincreased $29 million to $89 million, reflecting average loan growth, an uncertain economic outlook and credit migration, as well as changes in portfolio composition. Net loan charge-offs increased $5 million to $22 million, or 0.04 percent of average total loans for the provisionyear ended December 31, 2023, compared to $17 million, or 0.03 percent of average total loans for loan lossesthe year ended December 31, 2022, with net charge-offs in Corporate Banking, Business Banking and theTechnology and Life Sciences partially offset by net recoveries in general Middle Market. The provision for credit losses on lending-related commitments calculated under the current expected credit loss (CECL) modelwas a benefit of $11 million for the twelve monthsyear ended December 31, 2020, increased $463 million to $537 million, primarily driven by credit migration and the forecasted impact of the COVID-19 pandemic in the first half of 2020, including the economic impacts of social distancing, as well as pressures on
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Energy. Net loan charge-offs increased $89 million to $196 million, or 0.38 percent of average total loans,2023, compared to $107an expense of $21 million or 0.21 percent. Energy net loan charge-offs increased $39 million to $125 million, while general Middle Market net loan charge-offs increased by $37 million to $38 million.for the year ended December 31, 2022.
An analysis of the allowance for credit losses and a summary of nonperforming assets are presented under the "Credit Risk" subheading in the "Risk Management" section of this financial review. FurtherFor information aboutregarding methodology used in the adoptiondetermination of CECL is presented inallowance for credit losses, refer to Note 1 to the consolidated financial statements.
Noninterest Income
(in millions)(in millions)
(in millions)
(in millions)
Years Ended December 31
Years Ended December 31
Years Ended December 31Years Ended December 31202020192018202320222021
Card feesCard fees$270 $257 $244 
Fiduciary income209 206 206 
Fiduciary income (a)
Fiduciary income (a)
Fiduciary income (a)
Service charges on deposit accountsService charges on deposit accounts185 203 211 
Service charges on deposit accounts
Service charges on deposit accounts
Capital markets income (b)
Capital markets income (b)
Capital markets income (b)
Commercial lending fees(b)
Commercial lending fees(b)
Commercial lending fees(b)Commercial lending fees(b)77 91 85 
Bank-owned life insuranceBank-owned life insurance44 41 39 
Foreign exchange income40 44 47 
Bank-owned life insurance
Bank-owned life insurance
Letter of credit feesLetter of credit fees37 38 40 
Brokerage fees21 28 27 
Net securities losses— (7)(19)
Other noninterest income (a)118 109 96 
Letter of credit fees
Letter of credit fees
Brokerage fees (a)
Brokerage fees (a)
Brokerage fees (a)
Risk management hedging (loss) income (b)
Risk management hedging (loss) income (b)
Risk management hedging (loss) income (b)
Other noninterest income (a), (b), (c)
Other noninterest income (a), (b), (c)
Other noninterest income (a), (b), (c)
Total noninterest incomeTotal noninterest income$1,001 $1,010 $976 
Total noninterest income
Total noninterest income
(a)2023 results include changes in presentation consistent with contractual terms with new investment program partner resulting in a net $2 million increase to brokerage fees with corresponding decreases of $2 million each in fiduciary income, other noninterest income and commission costs (recorded within salaries and benefits expense).
(b)Effective January 1, 2023, the Corporation reported derivative income, syndication agent fees (previously a component of commercial lending fees) and investment banking fees (previously a component of other noninterest income) as a combined item captioned by capital markets income on the Consolidated Statements of Income. Beginning with fourth quarter 2023, risk management hedging income (previously a component of other noninterest income) was presented as a separate item on the Consolidated Statements of Income. Prior periods have been adjusted to conform to this presentation, and the changes do not impact total noninterest income.
(c)The table below provides further details on certain categories included in other noninterest income.
Noninterest income was relatively stable at $1.0 billion. Decreasesincreased $10 million to $1.1 billion, reflecting increases in other noninterest income, brokerage fees, card fees, commercial lending fees and letter of credit fees, partially offset by decreases in risk management hedging income, service charges on deposit accounts commercial lending fees, brokerage fees, customer derivativeand capital markets income. Other noninterest income foreign exchange income and income from principal investing and warrants were mostly offset byincluded increases in securities trading income, card fees, investment banking fees and deferred compensation asset returns (offset in noninterest expenses). Noninterest income was also impacted by a $7 million reduction in net and FHLB stock dividends.
Brokerage fees are commissions earned for facilitating securities losses, primarily due to a repositioning loss recorded in 2019,transactions for customers as well as a gain recorded inother brokerage services provided. In November 2023, the fourth quarterCorporation transitioned support of 2019 onits retail brokerage business, including specific insurance, brokerage and investment advisory activities previously conducted by the saleCorporation's broker-dealer subsidiary, to Ameriprise Financial Institutions Group, an independent financial services broker. Since this transition, brokerage fees include income from sales of Comerica's Health Savings Account (HSA) business.select investment products of an independent financial services broker, net of commissions passed through to employees licensed by the independent broker to sell their products. Brokerage fees increased $9 million, or 47 percent, reflecting the impact of the Corporation's new investment program partner as well as increased money market funds revenue related to higher short-term rates as well as elevated transactional revenue for personal trusts.
Card fees consist primarily of interchange and other fee income earned on government prepaid card, commercial card, debit/Automated Teller Machine (ATM) card and merchant payment processing services. Card fees increased $13$7 million, or 52 percent, reflecting higher processing volumes in merchant services and ATM network bonuses, partially offset by a one-time government card vendor incentive received in 2022.
Commercial lending fees include fees assessed on the unused portion of lines of credit (unused commitment fees) and loan servicing fees. These fees increased $4 million, or 6 percent, driven by volume increaseshigher commitment fees from growth in the government card program from stimulus payments under the Coronavirus Aid, Relief, and Economic Security Act, as amended by the Consolidated Appropriations Actloan
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Table of 2021 (CARES Act), resulting in higher interchange revenue,Contents
commitments, partially offset by a decrease in commercial and consumer card volumesMortgage Banker Finance service charges due to the impactmostly completed planned exit from this line of social distancing restrictions.business.
Letter of credit fees increased $4 million, or 11 percent, reflecting an increase in standby letters of credit activity.
Risk management hedging income declined $50 million, resulting from a $91 million net loss related to Bloomberg Short-Term Bank Yield Index (BSBY) cessation, which was partially offset by a $41 million increase in price alignment income received on collateral posted for centrally cleared risk management positions. Refer to the "BSBY Cessation" subheading in the "Market and Liquidity Risk" section of this financial review, as well as Note 8 to the consolidated financial statements, for further discussion of de-designated interest rate hedges.
Service charges on deposit accounts consist primarily of charges on retail and business accounts, including fees for treasury management services. Service charges on deposit accounts decreased $18$10 million, or 9 percent. The decrease reflected pandemic-driven changes5 percent, reflecting declines in customer behavior. On commercial accounts, activity levels declined, whilevolume-based deposit fees and the elimination of certain consumer account fees as well as an increase in earnings credit allowances provided to customers increased due to growth in deposit balances. Additionally, consumer accounts were impacted bythat reduced non-sufficient fundstheir service charges.
Capital markets income consists of net gains and overdraft fees.
Commercial lending fees include fees assessedlosses recognized on customer-initiated derivative instruments, net of the unused portionimpact of lines of credit (unused commitment fees),offsetting positions, syndication agent fees, investment banking fees and loan servicingmerger and acquisition advisory fees. These fees decreased $14 million, or 15 percent, reflecting a decrease in syndication agent fees.
Foreign exchangeCapital markets income decreased $4 million, or 8 percent, due to pandemic-related disruptions to international business flows and global shutdowns throughout the year.
Brokerage fees are commissions earned for facilitating securities transactions for customers as well as other brokerage services provided. Brokerage fees decreased $7 million, or 235 percent, primarily due to unfavorable credit valuation adjustments, lower money market funds fee revenue driven by spread reductions in fees earned asinterest rate and energy derivative income and a result of the decline in the fed funds ratesyndication agent fees, partially offset by increases in early 2020.advisory fees and foreign exchange derivative income.
Other noninterest income increased $9$52 million, or 8 percent,as detailed below, driven by increases of $14 million in securities trading income due to fair value gains from previously converted warrants, $7 million in deferred compensation asset returns (offset in noninterest expenses) and $5 million in investment banking fees. These increases were partially offset byFHLB stock dividends due to higher rates and additional stock acquired during the $6 million decrease from the gain on sale of Comerica's HSA business in 2019, as well as decreases of $5 million in customer derivative income and $4 million in income from principal investing and warrants.year.
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(in millions)(in millions)
(in millions)
(in millions)
Years Ended December 31Years Ended December 31202020192018
Customer derivative income (a)$27 $32 $26 
Years Ended December 31
Years Ended December 31202320222021
FHLB and FRB stock dividends
Deferred compensation asset returns (a)
Deferred compensation asset returns (a)
Deferred compensation asset returns (a)
Securities trading incomeSecurities trading income23 9 8 
Deferred compensation asset returns (b)16 9 (2)
Investment banking fees11 6 9 
Income from principal investing and warrants3 7 4 
Net gain on sale of business (c)— 6 — 
Securities trading income
Securities trading income
Insurance commissions
Insurance commissions
Insurance commissions
All other noninterest income
All other noninterest income
All other noninterest incomeAll other noninterest income38 40 51 
Other noninterest incomeOther noninterest income$118 $109 $96 
Other noninterest income
Other noninterest income
(a)    Customer derivative income included unfavorable valuation adjustments of $18 million and $7 million for the twelve months ended December 31, 2020 and 2019, respectively, and a favorable adjustment of $2 million for the twelve months ended December 31, 2018.
(b)    Compensation deferred by the Corporation's officers and directors is invested based on investment selections of the officers and directors. Income earned on these assets is reported in noninterest income and the offsetting change in deferred compensation plan liabilities is reported in salaries and benefits expense.
(c)    Gain on sale of the Corporation's HSA business.
Noninterest Expenses
(in millions)
Years Ended December 31202020192018
Salaries and benefits expense$1,019 $1,020 $1,009 
Outside processing fee expense (a)242 264 255 
Occupancy expense156 154 152 
Software expense (a)154 117 125 
Equipment expense49 50 48 
Advertising expense35 34 30 
FDIC insurance expense33 23 42 
Restructuring charges— — 53 
Other noninterest expenses96 81 80 
Total noninterest expenses$1,784 $1,743 $1,794 
(a)Includes classification adjustments related to costs incurred in cloud computing arrangements of $33 million for the twelve months ended December 31, 2020. These adjustments reduce outside processing fee expense and increase software expense due to the prospective adoption of ASU No. 2018-15, effective January 1, 2020.
(in millions)
Years Ended December 31202320222021
Salaries and benefits expense$1,306 $1,208 $1,133 
Outside processing fee expense277 251 266 
FDIC insurance expense180 31 22 
Occupancy expense171 175 161 
Software expense171 161 155 
Equipment expense50 50 50 
Advertising expense40 38 35 
Other noninterest expenses164 84 39 
Total noninterest expenses$2,359 $1,998 $1,861 
Noninterest expenses increased $41$361 million to $1.8 billion. The change in noninterest expenses was$2.4 billion, primarily due to increases in operational losses,FDIC insurance expense, salaries and benefits expense, other noninterest expenses, outside processing fee expense (net of classification change)expenses and software expense.
FDIC insurance expense increased $149 million, reflecting $109 million in additional expense resulting from the FDIC Board of Directors' November 2023 approval of a special assessment to recover the loss to the Deposit Insurance Fund (DIF) following the failures of Silicon Valley Bank and Signature Bank. In February 2024, the FDIC indicated that it now expects a larger loss to the DIF than originally estimated and that it plans to provide institutions with an updated estimate of their total special assessment amount with its first quarter 2024 special assessment invoice, to be released in June 2024. This updated special assessment total may result in additional FDIC expense to be recorded later this year.
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Salaries and benefits expense increased $98 million, or 8 percent, reflecting increases from annual merit increases and staff additions, temporary labor and deferred compensation expense (offset in other noninterest income), partially offset by a decrease in travelincentive compensation.
Other noninterest expenses increased $80 million, or 95 percent, including increases in non-salary pension expense, litigation and entertainment expense. Expenses incurred during 2020 included approximately $18 million related to COVID-19, primarily for compensationregulatory-related expenses, consulting fees and stipends to colleagues, charitable contributions, cleaning supplies, personal protective equipment and PPP technology costs.
Salaries and benefits expense was stable at $1.0 billion, reflecting lower incentive and annual stock-based compensation, mostlylegal fees, partially offset by merit increasesa net gain on fixed asset disposals, which included gains on real estate and higher deferred compensation expense (offset in noninterest income).asset impairments.
Outside processing fee expense net of the $33 million classification change, increased $11$26 million, or 410 percent, primarily due to volume-driven increasesreflecting an increase in state program costs and data processing conversion costs, partially offset by lower card fulfillment fees and a decline in volume of government card processing expensestransactions tied to card fee revenues and increased mortgage application volumes, partially offset by decreases in service fees associated with credit and collection.revenues.
FDIC insurance expenseSoftware expenses increased $10 million, or 436 percent, to $33 million, primarily due todriven by higher risk-based assessment fees.
Other noninterest expenses increased $15 million and included increases of $16 million in operational losses related to several unrelated events, $5 million in other pension and postretirement benefitcloud computing costs and $4 millionan increase in charitable contributions, partially offset by a $10 million reduction in travelrental and entertainment expensemaintenance fees.
The above detail includes expenses for certain modernization initiatives related to the pandemic.transformation of the retail banking delivery model, alignment of corporate facilities and optimization of technology platforms. Modernization-related expenses totaled $6 million during 2023, compared to $38 million during 2022, and were comprised of transitional real estate costs (reported in occupancy expense), severance and contract labor (reported in salaries and benefits expense) as well as gains on sale of real estate assets, asset impairments and contract termination costs (reported in other noninterest expenses). The above detail also includes $25 million of severance costs during 2023 related to expense recalibration initiatives intended to enhance earnings power and create capacity for strategic and risk management initiatives.
Income Taxes and Related Items
The provision for income taxes was $117$263 million in 2020,2023, compared to $334$325 million in 2019. The $217 million decrease in the provision for income taxes primarily reflected lower pre-tax income partially offset by an $11 million decrease in tax benefits from employee stock transactions.
2022. Net deferred tax assets were $4 million$1.0 billion at December 31, 2020,2023, compared to $42 million$1.1 billion at December 31, 2019.2022. Refer to Note 18 to the consolidated financial statements for information about the components of net deferred tax assets. Deferred tax assets of $404 million$1.3 billion were evaluated for realization and it was determined that a valuation allowance of $3$6 million related tofor federal foreign tax credits and certain state net operating loss (NOL) carryforwards was needed at both December 31, 2020 and 2019. These conclusions were based2023. For further information on the Corporation’s valuation policy for deferred tax assets, refer to Note 1 of the consolidated financial statements.
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available evidence of projected future reversals of existing taxable temporary differences, assumptions made regarding future events and, when applicable, state loss carryback capacity.

FIRST QUARTER 2021 OUTLOOK
First Quarter 2021 Outlook

This outlook is based on management expectations for gradual improvement in economic conditions.
•Decline in average loans reflects decreases in Mortgage Banker Finance and Energy, partially offset by growth in National Dealer Services and general Middle Market. PPP loan forgiveness potentially exceeds additional advances.
•Average deposits to remain strong.
•Decline in net interest income with lower average loan balances, LIBOR and security yields as well as two fewer days in the quarter, partially offset by careful management of loan and deposit pricing.
•Provision for credit losses reflects pace of economic recovery; net charge-offs modestly higher.
•Decrease in noninterest income as fourth quarter levels of deferred compensation asset returns, card fees, warrants and securities trading income not expected to repeat, as well as a seasonal reduction in syndication fees; partly offset by increases in service charges on deposit accounts, fiduciary income and brokerage fees.
•Decrease in noninterest expenses reflects lower deferred compensation and pension expenses, seasonal reduction in occupancy, staff insurance and advertising, as well as two less days in the quarter; partially offset by higher annual stock-based compensation.
•Income tax expense to be approximately 22 percent of pre-tax income, excluding discrete items.
•Maintain strong capital levels. Preferred stock dividends of $6 million.
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STRATEGIC LINES OF BUSINESS AND MARKETS
The Corporation has strategically aligned its operations into three major business segments: the Commercial Bank, the Retail Bank and Wealth Management. These business segments are differentiated based on the type of customer and the related products and services provided. In addition to the three major business segments, the Finance Division is also reported as a segment. The Other category includes items not directly associated with the business segments or the Finance segment. The performance of the business segments is not comparable with the Corporation's consolidated results and is not necessarily comparable with similar information for any other financial institution. Additionally, because of the interrelationships of the various segments, the information presented is not indicative of how the segments would perform if they operated as independent entities. Market segment results are also provided for the Corporation's three primary geographic markets: Michigan, California and Texas. In addition to the three primary geographic markets, Other Markets is also reported as a market segment. Note 22 to the consolidated financial statements describes the Corporation's segment reporting methodology as well as the business activities of each business segment and presents financial results of the business and market segments for the years ended December 31, 2020, 20192023, 2022 and 2018.2021.
The Corporation's management accounting system assigns balance sheet and income statement items to each segment using certain methodologies, which are regularly reviewed and refined. These methodologies may be modified as the management accounting system is enhanced and changes occur in the organizational structure and/or product lines.
Net interest income for each segment reflects the interest income generated by earning assets less interest expense on interest-bearing liabilities plus the net impact from associated internal funds transfer pricing (FTP). funding credits and charges. The FTP methodology allocates credits to each business segment for deposits and other funds provided as well as charges for loans and other assets being funded. FTP crediting rates on deposits and other funds provided reflect the long-term value of deposits and other funding sources based on their implied maturities. Due to the longer-term nature of implied maturities, FTP crediting rates are generally less volatile than changes in interest rates observed in the market. FTP charge rates for funding loans and other assets reflect a matched cost of funds based on the pricing and duration characteristics of the assets. As a result of applying matched funding, interest revenue for each segment resulting from loans and other assets is generally not impacted by changes in interest rates. Therefore, net interest income for each segment primarily reflects the volume of loans and other earning assets at the spread over the matched cost of funds, as well as the volume of deposits at the associated FTP crediting rates. As overallGenerally, in periods of rising interest rates, decreased in 2020, business segments, particularly those focused on generating deposits, were impacted by lowerFTP charge rates for funding loans and FTP crediting rates on deposits compared to the prior year. Similarly,will increase, with FTP chargescrediting rates for deposits typically repricing at a slower pace than FTP charge rates for funding loans decreased in 2020. Effective January 1, 2019, the Corporation prospectively discontinued allocating an additional FTP charge for the cost of maintaining liquid assets to support potential draws on unfunded loan commitments.
Business Segmentsloans.
The following table presents net income (loss) by business segment.
(dollar amounts in millions)(dollar amounts in millions)
(dollar amounts in millions)
(dollar amounts in millions)
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31
Years Ended December 31Years Ended December 31202020192018202320222021
Commercial BankCommercial Bank$660 91 %$1,021 82 %$1,024 85 %Commercial Bank$1,116 81 81 %$1,057 85 85 %$1,328 89 89 %
Retail BankRetail Bank(9)(1)83 7 65 5 
Wealth ManagementWealth Management74 10 140 11 121 10 
725 100 %1,244 100 %1,210 100 %
1,382 1,382 100 %1,242 100 %1,493 100 %
FinanceFinance(252)(57)(1)
OtherOther1 11 26 
Other
Other
TotalTotal$474  $1,198  $1,235 
Total
Total
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Table of Contents
The following sections present a summary of the performance of each of the Corporation's business segments for 20202023 compared to 2019.2022.
Commercial Bank
Years Ended December 31,Percent
Change
Years Ended December 31,Years Ended December 31,Percent
Change
(dollar amounts in millions)(dollar amounts in millions)20202019ChangePercent
Change
Earnings summary:Earnings summary:
Earnings summary:
Earnings summary:
Net interest income
Net interest income
Net interest incomeNet interest income$1,608 $1,655 $(47)(3)%$2,051$1,761$29016 %
Provision for credit lossesProvision for credit losses495 88 407 n/mProvision for credit losses903258n/m
Noninterest incomeNoninterest income555 555 — — 
Noninterest expensesNoninterest expenses826 795 31 4 
Provision for income taxesProvision for income taxes182 306 (124)(41)
Net incomeNet income$660 $1,021 $(361)(35)%
Net credit-related charge-offs$192 $111 $81 74 %
Net charge-offs
Selected average balances:Selected average balances:
Selected average balances:
Selected average balances:
Loans
Loans
LoansLoans$44,123 $43,477 $646 1 %$46,435$43,481$2,9547 %
DepositsDeposits36,603 29,047 7,556 26 
n/m - not meaningful
The $646 million increaseAverage loans increased $3.0 billion and included increases in average loans primarily reflected growth in Mortgage Banker Finance, due to elevated activity, Commercial Real Estate, National Dealer Services, Corporate Banking and Business Banking,Environmental Services, partially offset by decreases in National Dealer Services, dueMortgage Banker Finance related to an imbalance in supplyplanned exit from this business and demand resulting in lower inventory, and Energy. The 2020 period included average PPP loans totaling $2.0 billion.Equity Fund Services. Average deposits increased $7.6decreased $9.6 billion, reflecting increaseswith declines in all deposit categories as customers conserved cash due to an uncertain economy. reflecting customer diversification efforts following the banking industry disruption in the first quarter of 2023. This decline was primarily driven by decreases in noninterest-bearing and money market deposits, with the largest declines in general Middle Market, Technology and Life Sciences, Business Banking, Commercial Real Estate, Corporate Banking and National Dealer Services.
The Commercial Bank's net income decreased $361increased $59 million to $660 million.$1.1 billion. Net interest income decreased $47increased $290 million to $1.6 billion, primarily due to lowerincreased loan income as well as higher FTP crediting rates on deposits related to the increase in short-term interest income from deposits (FTP basis).rates, partially offset by higher allocated net FTP charges. The provision for credit losses increased $407$58 million to $495$90 million, reflecting loan growth, an uncertain economic outlook and credit migration and the forecasted impact of the COVID-19 pandemic.migration. Net credit-related charge-offs increased $81were $20 million, relatively stable compared to $192 million, primarily due to increasesthe prior year, with net charge-offs in EnergyCorporate Banking, Business Banking and Technology and Life Sciences partially offset by net recoveries in general Middle Market. Noninterest income was stable, while noninterestdecreased $4 million, primarily due to lower capital markets income and service charges on deposit accounts, partially offset by higher securities trading income and commercial lending fees. Noninterest expenses increased $31$142 million, primarily reflecting increased corporate overhead and higherincreases in FDIC insurance expense partially offset by lower(related to special assessment), salaries and benefits expense and outside processing fee expense.
Retail Bank
Years Ended December 31,Percent
Change
Years Ended December 31,Years Ended December 31,Percent
Change
(dollar amounts in millions)(dollar amounts in millions)20202019ChangePercent
Change
Earnings summary:Earnings summary:
Earnings summary:
Earnings summary:
Net interest income
Net interest income
Net interest incomeNet interest income$502 $568 $(66)(12)%$846$680$16625 %
Provision for credit lossesProvision for credit losses7 (4)11 n/m
Noninterest incomeNoninterest income110 132 (22)(17)
Noninterest expensesNoninterest expenses619 597 22 4 
(Benefit) provision for income taxes(5)24 (29)n/m
Net (loss) income$(9)$83 $(92)n/m
Net credit-related charge-offs$1 $1 $— — %
Provision for income taxesProvision for income taxes582236n/m
Net incomeNet income$176$79$97n/m
Net charge-offs (recoveries)Net charge-offs (recoveries)$1$(1)$2n/m
Selected average balances:Selected average balances:
Selected average balances:
Selected average balances:
Loans
Loans
LoansLoans$2,468 $2,104 $364 17 %$2,236$2,063$1738 %
DepositsDeposits22,832 20,743 2,089 10 
n/m - not meaningful
Average loans increased $364 million due to loans to small businesses, including PPP loans. Average deposits increased $2.1 billion, reflecting increases in all deposit categories. The Retail Bank's net income decreased $92 million to a net loss of $9 million. Net interest income decreased $66 million to $502 million due to lower interest income from deposits (FTP basis), partially offset by higher loan interest income (FTP basis) from the increase in average balances. The provision for credit losses increased $11 million from a benefit of $4 million. Noninterest income decreased $22 million, including lower service charges on deposit accounts. Noninterest expenses increased $22 million, primarily due to higher salaries and benefits expense and operational losses.
F-11F-10
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Average loans increased $173 million while average deposits decreased $2.3 billion, reflecting decreases in all deposit categories with the exception of time deposits. The Retail Bank's net income increased $97 million to $176 million. Net interest income increased $166 million to $846 million, primarily due to higher FTP crediting rates on deposits. Noninterest income was relatively stable, while noninterest expenses increased $38 million, primarily due to increases in FDIC insurance expense (related to special assessment), partially offset by decreases in occupancy and consulting expenses.
Wealth Management
Years Ended December 31,Percent
Change
Years Ended December 31,Years Ended December 31,Percent
Change
(dollar amounts in millions)(dollar amounts in millions)20202019ChangePercent
Change
Earnings summary:Earnings summary:
Earnings summary:
Earnings summary:
Net interest income
Net interest income
Net interest incomeNet interest income$167 $183 $(16)(9)%$208$199$94 %
Provision for credit lossesProvision for credit losses35 (14)49 n/mProvision for credit losses(6)9(15)n/m
Noninterest incomeNoninterest income263 270 (7)(3)
Noninterest expensesNoninterest expenses301 283 18 6 
Provision for income taxesProvision for income taxes20 44 (24)(54)
Net incomeNet income$74 $140 $(66)(48)%Net income$90$106$(16)(17)%
Net credit-related charge-offs (recoveries)$3 $(5)$8 n/m
Net charge-offs (recoveries)Net charge-offs (recoveries)$1$(3)$4n/m
Selected average balances:Selected average balances:
Selected average balances:
Selected average balances:
Loans
Loans
LoansLoans$5,045 $4,935 $110 2 %$5,232$4,906$3267 %
DepositsDeposits4,402 3,833 569 15 
n/m - not meaningful
Average loans remained relatively stable at approximately $5.0 billion. Averagewhile average deposits increased $569 million,decreased $1.3 billion, reflecting increasesdecreases in all deposit categories. Wealth Management's net income decreased $66 million to $74 million. Net interest income decreased $16 million to $167 million, primarily due to lower interest income from deposits (FTP basis). The provision for credit losses increased $49 million from a benefit of $14 million. Net credit-related charge-offs increased $8 million to $3 million. Noninterest income decreased $7 million to $263 million, predominantly due to a decrease in brokerage fees. Noninterest expenses increased $18 million, primarily reflecting higher salaries and benefits expense and corporate overhead.
Market Segments
The following table presents net income (loss) by market segment.
(dollar amounts in millions)
Years Ended December 31202020192018
Michigan$225 31 %$369 30 %$326 27 %
California247 34 454 36 377 31 
Texas(33)(5)119 10 228 19 
Other Markets286 40 302 24 279 23 
725 100 %1,244 100 %1,210 100 %
Finance & Other(251)(46)25 
Total$474  $1,198  $1,235  
The following sections present a summary of the performance of each of the Corporation's market segments for 2020 compared to 2019.
Michigan
Years Ended December 31,Percent
Change
(dollar amounts in millions)20202019Change
Earnings summary:
Net interest income$660 $729 $(69)(10)%
Provision for credit losses95 (11)106 n/m
Noninterest income273 291 (18)(6)
Noninterest expenses559 554 5 1 
Provision for income taxes54 108 (54)(50)
Net income$225 $369 $(144)(39)%
Net credit-related charge-offs$14 $11 $3 31 %
Selected average balances:
Loans$12,509 $12,553 $(44)— %
Deposits23,500 20,081 3,419 17 
n/m - not meaningful
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Average loans were relatively stable, while average deposits increased $3.4 billion, reflecting increases in all deposit categories as customers conserved cash due to an uncertain economy. The Michigan market's net income decreased $144 million to $225 million. Net interest income decreased $69 million to $660 million, primarily due to lower interest income from deposits (FTP basis). The provision for credit losses increased $106 million from a benefit of $11 million, reflecting increases in general Middle Market, Business Banking and Corporate Banking. Noninterest income decreased $18 million, including decreases in service charges on deposit accounts, card fees and brokerage fees, while noninterest expenses were relatively stable.
California
Years Ended December 31,Percent
Change
(dollar amounts in millions)20202019Change
Earnings summary:
Net interest income$723 $808 $(85)(11)%
Provision for credit losses134 (33)167 n/m
Noninterest income147 173 (26)(15)
Noninterest expenses414 406 8 2 
Provision for income taxes75 154 (79)(51)
Net income$247 $454 $(207)(46)%
Net credit-related charge-offs$31 $8 $23 n/m
Selected average balances:
Loans$18,265 $18,413 $(148)(1)%
Deposits19,386 16,846 2,540 15 
n/m - not meaningful
Average loans were relatively stable, while average deposits increased $2.5 billion, reflecting increases in all deposit categories. The California market's net income decreased $207 million to $247 million. Net interest income decreased $85 million to $723 million, primarily due to lower interest income from deposits (FTP basis). The provision for credit losses increased $167 million from a benefit of $33 million reflecting credit migration and the forecasted impact of the COVID-19 pandemic. Net credit-related charge-offs increased $23 million to $31 million, including increases in general Middle Market and Technology and Life Sciences, partially offset by a decline in Entertainment. Noninterest income decreased $26 million to $147 million, reflecting decreases in commercial lending fees, warrant income, card fees and customer derivative income. Noninterest expenses increased $8 million, predominantly due to an increase in corporate overhead.
Texas
Years Ended December 31,Percent
Change
(dollar amounts in millions)20202019Change
Earnings summary:
Net interest income$465 $493 $(28)(5)%
Provision for credit losses270 119 151 n/m
Noninterest income120 128 (8)(7)
Noninterest expenses359 345 14 4 
(Benefit) provision for income taxes(11)38 (49)n/m
Net (loss) income$(33)$119 $(152)n/m
Net credit-related charge-offs$151 $93 $58 63 %
Selected average balances:
Loans$10,813 $10,616 $197 2 %
Deposits10,209 8,780 1,429 16 
n/m - not meaningful
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Average loans were relatively stable, while average deposits increased $1.4 billion, reflecting increases in all deposit categories. The Texas market's net income decreased $152 million to a net loss of $33 million. Net interest income decreased $28 million to $465 million, primarily due to lower interest income from deposits (FTP basis). The provision for credit losses increased $151 million to $270 million, reflecting increases in Business Banking, Commercial Real Estate and general Middle Market. Net credit-related charge-offs increased $58 million to $151 million, primarily due to increases in Energy and general Middle Market. Noninterest income decreased $8 million, including lower service charges on deposit accounts, customer derivative income, card fees and commercial lending fees, partially offset by higher investment banking fees and smaller increases in other categories. Noninterest expenses increased $14 million, predominately due to an increase in corporate overhead.
Other Markets
Years Ended December 31,Percent
Change
(dollar amounts in millions)20202019Change
Earnings summary:
Net interest income$429 $376 $53 14 %
Provision for credit losses38 (5)43 n/m
Noninterest income388 365 23 6 
Noninterest expenses414 370 44 12 
Provision for income taxes79 74 5 6 
Net income$286 $302 $(16)(5)%
Net credit-related recoveries$— $(5)$5 n/m
Selected average balances:
Loans$10,052 $8,934 $1,118 13 %
Deposits10,742 7,916 2,826 36 
n/m - not meaningful
Average loans increased $1.1 billion, which includes a sizable increase in Mortgage Banker Finance. Average deposits increased $2.8 billion, including increases in all categories with the exception of time deposits. Other Markets'Wealth Management's net income decreased $16 million to $286$90 million. Net interest income increased $53$9 million to $429$208 million, primarily due to the increase in average loans. The provision for credit losses increased $43 million from a benefit of $5 million, including increases in Corporate Banking, Technology and Life Sciences and Private Banking,higher loan income, partially offset by a decreasean increase in Mortgage Banker Finance.allocated net FTP charges. Noninterest income increased $23$9 million predominantly due to higher card fees. Noninterest$307 million, primarily driven by investment fees, while noninterest expenses increased $44$54 million, primarily reflecting increases in operational lossessalaries and corporate overhead.benefits expense, consulting expenses, outside processing fee expense and FDIC insurance expense (related to special assessment).
Finance & Other Segments
Years Ended December 31,Percent
Change
Years Ended December 31,Years Ended December 31,Percent
Change
(dollar amounts in millions)(dollar amounts in millions)20202019ChangePercent
Change
Earnings summary:Earnings summary:
Earnings summary:
Earnings summary:
Net interest expense
Net interest expense
Net interest expenseNet interest expense$(366)$(67)$(299)n/m$(591)$(174)$(417)n/m
Provision for credit lossesProvision for credit losses— 4 (4)n/m
Noninterest incomeNoninterest income73 53 20 39 %
Noninterest expensesNoninterest expenses38 68 (30)(45)Noninterest expenses123(4)127n/m
Benefit for income taxesBenefit for income taxes(80)(40)(40)96 Benefit for income taxes(166)(46)(120)n/m
Net lossNet loss$(251)$(46)$(205)n/mNet loss$(501)$(91)$(410)n/m
Selected average balances:
Selected average balances:
Selected average balances:Selected average balances:
LoansLoans$(8)$(5)$(3)60 %
Loans
Loans$—$10$(10)(100 %)
DepositsDeposits1,201 1,858 (657)(35)Deposits4,5067863,720n/m
n/m - not meaningful
Average deposits, decreased $657 million,which primarily reflecting a decrease in otherconsist of centrally-managed brokered time deposits.deposits fully insured by the FDIC, increased $3.7 billion. Net loss for the Finance &and Other category increased $205$410 million to $251$501 million. Net interest expense decreased $299increased $417 million due to decreased net FTP revenue as a result$591 million, reflecting the impact of lower rates charged to the business segments under the Corporation's internal FTP methodology. Noninterest income increased $20 million, driven by net securities losses recorded in 2019 due to securities repositioning,interest rate swaps (which are centrally managed) as well as increased securities trading and customer derivative income.balances from higher-cost funding sources. Noninterest expenses decreased $30income increased $8 million to $49 million, primarily due to lowerhigher investment fees and FHLB stock dividends, partially offset by a decrease in risk management hedging income (BSBY cessation). Noninterest expenses increased $127 million, reflecting higher salaries and benefits expense.expense and FDIC insurance expense (special assessment), partially offset by gains on the sale of real estate.
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The following table lists the Corporation's banking centers by geographic market segment.market.
December 31202020192018
Michigan189192193 
Texas123123122 
California96 96 96 
Other Markets:
Arizona17 17 17 
Florida7 7 7 
Canada111
Total Other Markets25 25 25 
Total433 436 436 
F-15
December 31202320222021
Michigan176177188
Texas116115124
California929295
Other Markets:
Arizona161717
Florida788
Canada111
Total Other Markets242626
Total408410433
Table of Contents
BALANCE SHEET AND CAPITAL FUNDS ANALYSIS
Analysis of Investment Securities and Loans
(in millions)
December 3120202019201820172016
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities$4,658 $2,792 $2,727 $2,727 $2,779 
Residential mortgage-backed securities (a)10,370 9,606 9,318 (b)8,124 7,872 
State and municipal securities— — — 5 7 
Equity and other non-debt securities— — — 82 129 
Total investment securities available-for-sale15,028 12,398 12,045 10,938 10,787 
Investment securities held to maturity:
Residential mortgage-backed securities (a)— — — (b)1,266 1,582 
Total investment securities$15,028 $12,398 $12,045 $12,204 $12,369 
Commercial loans$32,753 $31,473 $31,976 $31,060 $30,994 
Real estate construction loans4,082 3,455 3,077 2,961 2,869 
Commercial mortgage loans9,912 9,559 9,106 9,159 8,931 
Lease financing594 588 507 468 572 
International loans:
Banks and other financial institutions— — — 4 2 
Commercial and industrial926 1,009 1,013 979 1,256 
Total international loans926 1,009 1,013 983 1,258 
Residential mortgage loans1,830 1,845 1,970 1,988 1,942 
Consumer loans:
Home equity1,588 1,711 1,765 1,816 1,800 
Other consumer606 729 749 738 722 
Total consumer loans2,194 2,440 2,514 2,554 2,522 
Total loans$52,291 $50,369 $50,163 $49,173 $49,088 
(a)Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
(b)Effective with the adoption of ASU 2017-12 “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” on January 1, 2018, the Corporation transferred residential mortgage-backed securities with a book value of approximately $1.3 billion from held-to-maturity to available-for-sale.
F-16
Table of Contents
Earning Assets
Period-End Loans
(in millions)Percent
Change
December 3120232022Change
Commercial loans$27,251 $30,909 $(3,658)(12)%
Real estate construction loans5,083 3,105 1,978 64 
Commercial mortgage loans13,686 13,306 380 3 
Lease financing807 760 47 6 
International loans1,102 1,197 (95)(8)
Residential mortgage loans1,889 1,814 75 4 
Consumer loans:
Home equity1,792 1,776 16 1 
Other consumer503 535 (32)(6)
Total consumer loans2,295 2,311 (16)(1)
Total loans$52,113 $53,402 $(1,289)(2)%
On a period-end basis, total loans increased $1.9decreased $1.3 billion to $52.3$52.1 billion at December 31, 2020,2023, compared to $50.4$53.4 billion at December 31, 2019. 2022.
Average Loans
(in millions)Percent
Change
Years Ended December 3120232022Change
Average Loans By Loan Type:
Commercial loans$30,009 $29,846 $163 1 %
Real estate construction loans4,041 2,607 1,434 55 
Commercial mortgage loans13,697 12,135 1,562 13 
Lease financing776 680 96 14 
International loans1,226 1,246 (20)(2)
Residential mortgage loans1,877 1,776 101 6 
Consumer loans:
Home equity1,775 1,634 141 9 
Other consumer502 536 (34)(6)
Total consumer loans2,277 2,170 107 5 
Total loans$53,903 $50,460 $3,443 7 %
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Table of Contents
(in millions)Percent
Change
Years Ended December 3120232022Change
Average Loans By Business Line:
General Middle Market$12,568 $12,686 $(118)(1)%
National Dealer Services5,775 4,633 1,142 25 
Equity Fund Services3,001 3,345 (344)(10)
Environmental Services2,366 2,119 247 12 
Energy1,480 1,387 93 7 
Entertainment1,153 1,141 12 1 
Technology and Life Sciences865 909 (44)(5)
Total Middle Market27,208 26,220 988 4 
Commercial Real Estate9,085 6,898 2,187 32 
Corporate Banking6,044 5,528 516 9 
Business Banking3,150 3,256 (106)(3)
Mortgage Banker Finance945 1,579 (634)(40)
Total Commercial Bank46,432 43,481 2,951 7 
Total Retail Bank2,237 2,063 174 8 
Total Wealth Management5,232 4,906 326 7 
Total Finance and Other2 10 (8)(92)
Total loans$53,903 $50,460 $3,443 7 %
Average total loans increased $1.1$3.4 billion to $51.6$53.9 billion in 2020,2023, compared to $50.5 billion in 2019. The following tables provide information about the changes2022, which included a $2.2 billion increase in the Corporation's average loan portfolio in 2020 compared to 2019.
(dollar amounts in millions)Percent
Change
Years Ended December 3120202019Change
By Business Line:
General Middle Market$12,227 $12,139 $88 1 %
National Dealer Services5,967 7,652 (1,685)(22)
Equity Fund Services2,367 2,570 (203)(8)
Energy2,021 2,449 (428)(17)
Environmental Services1,406 1,200 206 17 
Technology and Life Sciences1,298 1,265 33 3 
Entertainment657 739 (82)(11)
Total Middle Market25,943 28,014 (2,071)(7)
Commercial Real Estate6,564 5,595 969 17 
Corporate Banking4,492 4,231 261 6 
Small Business3,948 3,487 461 13 
Mortgage Banker Finance3,176 2,150 1,026 48 
Total Commercial Bank44,123 43,477 646 1 
Total Retail Bank2,468 2,104 364 17 
Total Wealth Management5,045 4,935 110 2 
Total Finance and Other(5)(5)— — %
Total loans$51,631 $50,511 $1,120 2 %
By Loan Type:
Commercial loans (a)$32,144 $32,053 91 — %
Real estate construction loans3,912 3,325 587 18 
Commercial mortgage loans9,839 9,170 669 7 
Lease financing594 557 37 7 
International loans1,028 1,019 9 1 
Residential mortgage loans1,905 1,929 (24)(1)
Consumer loans:
Home equity1,667 1,741 (74)(4)
Other consumer542 717 (175)(24)
Total consumer loans2,209 2,458 (249)(10)
Total loans$51,631 $50,511 $1,120 2 %
By Geographic Market:
Michigan$12,509 $12,553 $(44)— %
California18,265 18,413 (148)(1)
Texas10,813 10,616 197 2 
Other Markets10,052 8,934 1,118 13 
Finance and Other(8)(5)(3)60 %
Total loans$51,631 $50,511 $1,120 2 %
(a) Includes PPP loans with average balances of $2.5 billion for the year ended December 31, 2020.
Middle Market business linesCommercial Real Estate, which generally serve customers with annual revenue between $30 millionserves real estate developers and $500 million. Within the Middle Market business lines, the largest changes were decreases ininvestors. National Dealer Services, and Energy. National Dealer Serviceswhich provides floor plan inventory financing and commercial mortgages to auto dealerships. The $1.7dealerships, increased by $1.1 billion, decreasewhile Corporate Banking, which serves companies with revenues generally over $500 million, increased by $516 million. These increases were partially offset by a $634 million decline in National Dealer Services loans reflected an imbalance in supply and demand resulting in lower inventory. Customers in the Energy business line are primarily engaged in the oil and gas businesses. The $428 million decrease in Energy loans reflected lower oil and gas prices as well as reduced production activity. For more information on Energy loans, refer to "Energy Lending" in the "Risk Management" section of this financial review.
F-17
Table of Contents
Mortgage Banker Finance provides short-term, revolving lines of credit to independent mortgage banking companies and therefore partly reflects the level of home sales and refinancing activity in the market as a whole. The $1.0 billion increase was primarily due to elevated activity resultingthe mostly completed planned exit from the lower interest rate environment.this line of business.
Commercial Real Estate is comprised of real estate construction and commercial mortgage loans. Real estate construction loans primarily include loans in the Commercial Real Estate business line, which generally serve commercial real estate developers. Commercial mortgage loans are loans where the primary collateral is a lien on any real property and are primarily loans secured by owner-occupied real estate. Real property is generally considered primary collateral if the value of that collateral represents more than 50 percent of the commitment at loan approval. The $969 million increase in Commercial Real Estate was primarily driven by additional draws on existing multifamily, industrial and storage construction lines, a slowdown in prepayments due to current economic conditions and increased term debt financing.
Investment Securities
(dollar amounts in millions)U.S. Treasury and other U.S. government agency securitiesResidential mortgage-backed securities (a)Total investment securities
December 31, 2020AmountYieldAmountYieldAmountYield
Maturity (b)
Within 1 year$1,570 1.31 %$1 1.56 %$1,571 1.31 %
1-5 Years3,088 1.68 209 2.35 3,297 1.72 
5-10 Years— — 716 2.22 716 2.22 
After 10 Years— — 9,444 1.57 9,444 1.57 
Total4,658 1.55 10,370 1.63 15,028 1.57 
Weighted Average Maturity (years)1.8 23.3 16.6 
(in millions)Percent
Change
December 3120232022Change
U.S. Treasury securities$1,605 $2,664 $(1,059)(40)%
Residential mortgage-backed securities (a)10,519 11,655 (1,136)(10)
Commercial mortgage-backed securities (a)4,745 4,693 52 1 %
Total investment securities$16,869 $19,012 $(2,143)(11)%
(a)Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
n/m - not meaningful
On a period-end basis, investment securities were $16.9 billion at December 31, 2023, a decrease of $2.1 billion from $19.0 billion at December 31, 2022, due to maturities of Treasury securities and paydowns of mortgage-backed securities, partially offset by an improvement in unrealized losses, from $3.0 billion at December 31, 2022 to $2.7 billion at December 31, 2023. At December 31, 2023, the effective duration of the Corporation's securities portfolio was approximately 5.5 years. On an average basis, investment securities decreased $1.6 billion to $17.4 billion in 2023, compared to $19.0 billion in 2022, primarily due to unrealized losses and maturities of Treasury securities.

(weighted average yield) (a)U.S. Treasury securitiesResidential mortgage-backed securities (b)Commercial mortgage-backed securities (b)Total investment securities
December 31, 2023
Maturity (c)
Within 1 year0.23 %3.76 %— %0.25 %
1-5 Years0.29 2.19 1.66 0.66 
5-10 Years— 1.93 2.97 2.93 
After 10 Years— 1.96 — 1.96 
Total0.26 %1.96 %2.96 %2.08 %
Weighted Average Maturity (years)1.1 26.2 8.1 19.1 
(a)Weighted average yields are calculated on the basis of yield to maturity based on the carrying value of each debt security, aggregated by type and agency.
(b)Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
(c)Based on final contractual maturity.
Investment securities were $15.0 billion at December 31, 2020 and $12.4 billion at December 31, 2019. At December 31, 2020, the weighted-average expected life
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Table of the Corporation's residential mortgage-backed securities portfolio was approximately 2.9 years. On an average basis, investment securities increased $1.3 billion to $13.4 billion in 2020, compared to $12.1 billion in 2019, as a portion of excess liquidity was invested in $1.8 billion of U.S. Treasury bonds and $500 million of mortgage-backed securities in the third quarter of 2020.Contents
The Corporation repositioned treasury securities in 2019 by selling $1.0 billion and purchasing higher-yielding treasuries, which resulted in after-tax losses of $6 million.
Interest-Bearing Deposits with Banks and Other Short-Term Investments
Interest-bearing deposits with banks, which are mostly used to manage liquidity requirements of the Corporation, primarily include deposits with the Federal Reserve Bank (FRB) and also include deposits with banks in developed countries or international banking facilities of foreign banks located in the United States. Interest-bearing deposits with banks are mostly used to manage liquidity requirements of the Corporation. Interest-bearingOn a period-end basis, interest-bearing deposits with banks increased $9.9$3.5 billion to $14.7$8.1 billion at December 31, 2020, resulting from growth in relationship-based deposits as customers conserve cash in an uncertain economy.2023. On an average basis, interest-bearing deposits with banks increased $6.8decreased $1.8 billion to $10.2$7.5 billion in 2020.2023.
Other short-term investments include federal funds sold, trading securities, money market investments and loans held-for-sale. Substantially all trading securities are deferred compensation plan assets. Loans held-for-sale typically representinclude variable-rate demand notes for which the Corporation has purchased the underlying bonds as well as residential mortgage loans originated with management's intention to sell and, from time to time, other loans that are transferred to held-for-sale. OtherOn a period-end basis, other short-term investments increased $17$242 million to $172$399 million at December 31, 2020.2023, which was driven by the above-referenced variable-rate demand notes. On an average basis, other short-term investments increased $10$165 million to $153$339 million in 2020.2023.
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Deposits and Borrowed Funds
At December 31, 2020,Period-End Deposits and Borrowed Funds
(in millions)Percent
Change
Years Ended December 3120232022Change
Noninterest-bearing deposits$27,849 $39,945 $(12,096)(30)%
Money market and interest-bearing checking deposits28,246 26,290 1,956 7 
Savings deposits2,381 3,225 (844)(26)
Customer certificates of deposit3,723 1,762 1,961 n/m
Other time deposits4,550 124 4,426 n/m
Foreign office time deposits13 51 (38)(75)
Total deposits$66,762 $71,397 $(4,635)(6)%
Short-term borrowings$3,565 $3,211 $354 11 %
Medium- and long-term debt6,206 3,024 3,182 n/m
Total borrowed funds$9,771 $6,235 $3,536 57 %
n/m - not meaningful
On a period-end basis, total deposits were $72.9decreased $4.6 billion an increase of $15.6 billion, or 27%, compared to $57.3$66.8 billion at December 31, 2019,2023, compared to $71.4 billion at December 31, 2022, reflecting increasesa decrease of $12.0$12.1 billion or 44%, in noninterest-bearing deposits, and $3.6partially offset by a $7.5 billion or 12%,increase in interest-bearing deposits. The Corporation's average
Uninsured deposits are defined as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit and amounts in any other uninsured investment or deposit account that are classified as deposits and borrowed funds balances are detailed in the following table.
(dollar amounts in millions)Percent
Change
Years Ended December 3120202019Change
Noninterest-bearing deposits$33,053 $26,644 $6,409 24 %
Money market and interest-bearing checking deposits26,798 23,417 3,381 14 
Savings deposits2,454 2,166 288 13 
Customer certificates of deposit2,626 2,522 104 4 
Other time deposits17 705 (688)(98)
Foreign office time deposits90 27 63 n/m
Total deposits$65,038 $55,481 $9,557 17 %
Short-term borrowings$314 $369 $(55)(15)
Medium- and long-term debt6,549 6,955 (406)(6)
Total borrowed funds$6,863 $7,324 $(461)(6)%
n/m - not meaningful
Averagesubject to any federal or state deposit insurance regimes. Total uninsured deposits increased $9.6were $31.5 billion to $65.0and $45.5 billion in 2020, compared to $55.5 billion in 2019, reflecting increases of $6.4 billion in noninterest-bearing and $3.2 billion in interest-bearing deposits. The increases were primarily the result of customers continuing to conserve cash in the face of the current uncertain economic climate.
There were no short-term borrowings at December 31, 2020, compared to $712023 and 2022, respectively, as calculated per regulatory guidance. The portion of domestic time deposits in excess of insurance limits was $797 million and $370 million at December 31, 2019. Short-term2023 and 2022, respectively. Time deposits otherwise uninsured, which consist of foreign office time deposits and all mature in three months or less, totaled $13 million at December 31, 2023, compared to $51 million at December 31, 2022.
On a period-end basis, short-term borrowings primarily includetotaled $3.6 billion at December 31, 2023, compared to $3.2 billion at December 31, 2022, and included federal funds purchased and short-term FHLB advancesFederal Home Loan Bank (FHLB) advances. On a period-end basis, total medium- and securities sold under agreements to repurchase. Average short-term borrowings decreased $55 million, to $314 million in 2020, compared to $369 million in 2019.
long-term debt totaled $6.2 billion at December 31, 2023, an increase of $3.2 billion from $3.0 billion at December 31, 2022. The Corporation uses medium- and long-term debt, which includes long-term FHLB advances, medium- and long-term senior notes, as well as subordinated notes and FHLB advances, to provide funding for earning assets, liquidity and regulatory capital. Total
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Average Deposits and Borrowed Funds
(in millions)Percent
Change
Years Ended December 3120232022Change
Noninterest-bearing deposits$30,882 $42,018 $(11,136)(27)%
Money market and interest-bearing checking deposits26,054 28,347 (2,293)(8)
Savings deposits2,774 3,304 (530)(16)
Customer certificates of deposit2,708 1,756 952 54 
Other time deposits3,577 16 3,561 n/m
Foreign office time deposits23 40 (17)(42)
Total deposits$66,018 $75,481 $(9,463)(13)%
Short-term borrowings$7,218 $436 $6,782 n/m
Medium- and long-term debt5,847 2,818 3,029 n/m
Total borrowed funds$13,065 $3,254 $9,811 n/m
n/m - not meaningful
(in millions)Percent
Change
Years Ended December 31,20232022Change
Average Deposits By Business Line:
General Middle Market$16,962 $20,409 $(3,447)(17)%
Technology and Life Sciences3,607 6,483 $(2,876)(44)
National Dealer Services1,022 1,526 (504)(33)
Equity Fund Services976 1,175 (199)(17)
Energy574 1,000 (426)(43)
Environmental Services361 344 17 5 
Entertainment268 267 1 — 
Total Middle Market23,770 31,204 (7,434)(24)
Corporate Banking3,788 4,381 (593)(14)
Business Banking3,569 4,289 (720)(17)
Commercial Real Estate1,582 2,175 (593)(27)
Mortgage Banker Finance310 535 (225)(42)
Total Commercial Bank33,019 42,584 (9,565)(22)
Total Retail Bank24,363 26,672 (2,309)(9)
Total Wealth Management4,130 5,439 (1,309)(24)
Total Finance and Other4,506 786 3,720 n/m
Total deposits$66,018 $75,481 $(9,463)(13)%
n/m - not meaningful
Average deposits decreased $9.5 billion to $66.0 billion in 2023, compared to $75.5 billion in 2022, reflecting an $11.1 billion decrease in noninterest-bearing deposits, partially offset by a $1.7 billion increase in interest-bearing deposits. The decline in noninterest-bearing deposits reflected customer diversification efforts following the banking industry disruption in the first quarter of 2023 as well as a shift in deposit mix from noninterest-bearing to interest-bearing due to the current higher interest rate environment, while the increase in interest-bearing deposits was primarily due to increases in brokered time deposits and customer certificates of deposit.
Average short-term borrowings increased by $6.8 billion to $7.2 billion in 2023, compared to $436 million in 2022, while average medium- and long-term debt at December 31, 2020 decreased $1.5increased $3.0 billion to $5.7$5.8 billion in 2023, compared to $7.3$2.8 billion at December 31, 2019. The decreasein 2022, primarily reflected the early redemption of $1.0 billion ofdriven by FHLB advances, as well aspartially offset by $850 million in senior notes that matured in the maturitythird quarter of $675 million of medium-term notes. Average medium- and long-term debt decreased $406 million, or 6 percent, to $6.5 billion in 2020, compared to $7.0 billion in 2019.
2023. Further information on medium- and long-term debt is provided in Note 12 to the consolidated financial statements.
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Capital
Total shareholders' equity increased $723 million$1.2 billion to $8.1$6.4 billion at December 31, 2020,2023, compared to $7.3$5.2 billion at December 31, 2019.2022. The following table presents a summary of changes in total shareholders' equity in 2020.2023.
(in millions)
  
Balance at January 1, 20202023$7,3275,181 
Cumulative effect of change in accounting principle (a)13
Net income474881 
Cash dividends declared on common stock(378)(375)
Cash dividends declared on preferred stock(13)(23)
Purchase of common stock(194)
Issuance of preferred stock394
Other comprehensive income:income, net of tax:
Investment securities$146276 
Cash flow hedges121337 
Defined benefit and other postretirement plans13681 
Total other comprehensive income, net of tax403694 
Net issuance of common stock under employee stock plans(4)
Share-based compensation2452 
Balance at December 31, 20202023$8,0506,406 
(a) Effective January 1, 2020, the Corporation adopted the provisions of ASU No. 2016-13, "Financial Instruments - Credit Losses" (Topic 326). For further information, refer to Note 1 to the consolidated financial statements.
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The following table summarizes the Corporation’s repurchase activity for the year ended December 31, 2020.2023.
(shares in thousands)Total Number of Shares Purchased as 
Part of Publicly Announced Repurchase Plans or Programs		Remaining
Repurchase
Authorization (a)		Total Number
of Shares
Purchased (b)		Average Price
Paid Per 
Share
First Quarter 20203,227 4,870 3,322 $58.70 
Second Quarter 2020— 4,870 6 28.63 
Third Quarter 2020— 4,870 7 37.94 
Fourth Quarter 2020— 4,870 4 38.26 
Total 20203,227 4,870 3,339 58.58 
(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
First Quarter 2023— 4,997 31 $72.78 
Second Quarter 2023— 4,997 3 42.36 
Third Quarter 2023— 4,997 3 43.37 
Fourth Quarter 2023— 4,997 3 40.60 
Total 2023— 4,997 40 65.89 
(a) Maximum number of shares that may yet be purchasedrepurchased under the publicly announced plans or programs.
(b) Includes approximately 112,00040,000 shares purchased pursuantrelated 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, 2020. These transactions are2023 and is not considered part of the Corporation's repurchase program.
In March 2020, as the economic climate grew increasingly uncertain, the Corporation suspended its share repurchase program with a focus on deploying capital to meet customers' growing financing requirements, resulting in no share repurchases under the program for the remainder of the year. The Corporation will continue to assess the resumption of repurchases subject to various factors including financial performance, capital needs and market conditions. Since the inception of the Corporation's share repurchase program in 2010, a total of 87.297.2 million shares have been authorized for repurchase. There is no expiration date for the share repurchase program.
In May 2020, Management is not currently engaged in repurchasing shares and will continue to monitor various factors, including the Corporation issued $400 million of 5.625% non-cumulative perpetual preferred stock, which yielded $394 million in proceeds net of underwriting discountsCorporation's earnings generation, capital needs to fund future loan growth, regulatory changes and offering expenses. See Note 13 tomarket conditions, before resuming the consolidated financial statements for further information about the terms of the preferred stock.share repurchase program.
The Corporation is preparedcontinues to continue using capital and liquidity in a responsible way to assist customers impacted by the COVID-19 crisis with a target of attaining and maintaining a Common Equity Tier 1 (CET1) capital ratio of approximately 10 percent.percent with active capital management. At December 31, 2020,2023, the Corporation's CET1 capital ratio was 10.3411.09 percent, ana increase of 21109 basis points compared to December 31, 2019.2022.
The Corporation is subject to the capital adequacy standards under the Basel III regulatory framework (Basel III). This regulatory framework establishes comprehensive methodologies for calculating regulatory capital and risk-weighted assets (RWA). Basel III also set minimum capital ratios as well as overall capital adequacy standards.
Under Basel III, regulatory capital comprises CET1 capital, additional Tier 1 capital and Tier II2 capital. 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. Additionally, the Corporation has elected to permanently exclude capital in accumulated other comprehensive income (AOCI) related to debt and equity securities classified as available-for-sale as well as for cash flow hedges and defined benefit postretirement plans from CET1, an option available to standardized approach entities under Basel III. Tier 1 capital incrementally includes noncumulative perpetual preferred stock. Tier 2 capital includes Tier 1 capital as well as subordinated debt qualifying as Tier 2 and qualifying allowance for credit losses. In 2020, the Corporation elected regulatory relief to defer the impact
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Table of adopting the CECL model for measuring credit losses on regulatory capital. At December 31, 2020, $72 million, or a cumulative 11-basis-point benefit to the capital ratios, was deferred. Also in 2020, the Corporation adopted capital rules issued by federal banking agencies that simplified certain regulatory capital rules, including the capital treatment of mortgage servicing assets, certain deferred tax assets, investments in the capital instruments of unconsolidated financial institutions and minority interests. For further information about the adoption of CECL, refer to Note 1 to the consolidated financial statement.Contents
The Corporation computes RWA using the standardized approach. Under the standardized approach, RWA is generally based on supervisory risk-weightings which vary by counterparty type and asset class. Under the Basel III standardized approach, capital is required for credit risk RWA, to cover the risk of unexpected losses due to failure of a customer or counterparty to meet its financial obligations in accordance with contractual terms; and if trading assets and liabilities exceed certain thresholds, capital is also required for market risk RWA, to cover the risk of losses due to adverse market movements or from position-specific factors.
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The following table presents the minimum ratios required.
Common equity tier 1 capital to risk-weighted assets4.5 %
Tier 1 capital to risk-weighted assets6.0 
Total capital to risk-weighted assets8.0 
Capital conservation buffer (a)2.5 
Tier 1 capital to adjusted average assets (leverage ratio)4.0 
(a)In addition to the minimum risk-based capital requirements, the Corporation is required to maintain a minimum capital conservation buffer, in the form of common equity tier 1 capital, in order to avoid restrictions on capital distributions and discretionary bonuses.
The Corporation's capital ratios exceeded minimum regulatory requirements as follows:
December 31, 2020December 31, 2019
(dollar amounts in millions)Capital/AssetsRatioCapital/AssetsRatio
Common equity tier 1 (a), (b)$6,919 10.34 %$6,919 10.13 %
Tier 1 risk-based (a), (b)7,313 10.93 6,919 10.13 
Total risk-based (a)8,833 13.20 8,282 12.13 
Leverage (a)7,313 8.63 6,919 9.51 
Common shareholders' equity7,656 8.69 7,327 9.98 
Tangible common equity (b)7,020 8.02 6,688 9.19 
Risk-weighted assets (a)66,931 68,273 
December 31, 2023December 31, 2022
(dollar amounts in millions)Capital/AssetsRatioCapital/AssetsRatio
Common equity tier 1 (a)$8,414 11.09 %$7,884 10.00 %
Tier 1 risk-based (a)8,808 11.60 8,278 10.50 
Total risk-based10,263 13.52 9,817 12.45 
Leverage8,808 10.06 8,278 9.55 
Common shareholders' equity6,012 7.00 4,787 5.60 
Tangible common equity (a)5,369 6.30 4,143 4.89 
Risk-weighted assets75,901 78,871 
(a)December 31, 2020 risk-weighted assets and ratios reflect deferral of CECL model impact as calculated per regulatory guidance.
(b)See Supplemental Financial Data section for reconciliations of non-GAAP financial measures and regulatory ratios.
At December 31, 2020,2023, the Corporation and its U.S. banking subsidiaries exceeded the capital ratios required for an institution to be considered “well capitalized” by the standards developed under the Federal Deposit Insurance Corporation Improvement Act of 1991. Refer to Note 20 to the consolidated financial statements for further discussion of regulatory capital requirements, capital ratio calculations and restrictions on the ability of the Corporation's banking subsidiaries to transfer assets to the Corporation.
The common shareholders' equity ratio increased 140 basis points to 7.00 percent at December 31, 2023, primarily due to lower unrealized losses on investment securities available-for-sale and the Corporation's cash flow hedge portfolio. The unrealized losses in the Corporation's available-for-sale investment security portfolio, which are due to market valuations since the time of initial acquisition, are not expected to be realized. The tangible common equity ratio, which excludes goodwill and other intangible assets, increased 141 basis points to 6.30 percent for the same reasons discussed above. Common shareholders' equity included $3.0 billion in accumulated other comprehensive losses, with approximately $2.3 billion of those losses relating to balances recorded in total assets, comprised of valuation adjustments to available-for-sale securities and pension assets, as well as related deferred tax assets. These amounts impacted the common shareholders' equity ratio by 328 basis points; the impact on the tangible common equity ratio using the same calculation method was 332 basis points.
Basel III Endgame Framework
On July 27, 2023, the federal banking agencies issued a notice of proposed rulemaking, commonly referred to as Basel III Endgame (the Capital Proposal) that would significantly increase the capital requirements applicable to large banking organizations with total assets of $100 billion or more. The Capital Proposal would align the regulatory capital calculation and the calculation of risk-weighted assets across large banking organizations subject to the Capital Proposal and require Category III and IV banking organizations to include most components of AOCI, including net unrealized gains and losses on available-for-sale securities, in their regulatory capital ratios. The Capital Proposal is subject to a public comment period, which ended on January 16, 2024, and, if adopted, would include a three-year transition period beginning July 1, 2025. As of December 31, 2023, the Corporation had total assets of $85.8 billion. While the Capital Proposal would not apply to the Corporation as it is currently proposed, if the Corporation becomes subject to the requirements of the Capital Proposal in the future or becomes subject to any other new laws or regulations related to capital and liquidity, such requirements could limit the Corporation’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 the Corporation’s financial condition and results of operations. If subject to the Capital Proposal, the estimated impact related to proposed inclusion of most components of AOCI would be an approximate 300 basis point decrease to common equity tier-1 capital based on December 31, 2023 financials.
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RISK MANAGEMENT
The Corporation assumes various types of risk as a result of conducting business in the normal course. The Corporation's enterprise risk management framework provides a process for identifying, measuring, controlling and managing these risks. This framework incorporates a risk assessment process, a collection of risk committees that manage the Corporation's major risk elements and a risk appetite statement that outlines the levels and types of risks the Corporation accepts. The Corporation continuously enhances its enterprise risk framework with additional processes, tools and systems designed to not only provide management with deeper insight into the various existing and emerging risks in accordance with its appetite for risk, but also to improve the Corporation's ability to control those risks and ensure that appropriate consideration is received for the risks taken.
The Corporation’s front line employees, the first line of defense, are responsible for the day-to-day management and ownership of risks, including the identification, assessment, measurement and control of risks encountered as a part of the normal course of business. Each of the major risk categories are further monitored and measured by specialized risk managers in the second line of defense within the Enterprise Risk Division, who provide oversight as well as independent and effective challenge and guidance for the risk management activities of the organization. The Enterprise Risk Division, led by the Chief Risk Officer, is responsible for designing and managing the Corporation’s enterprise risk management framework and ensures effective risk management oversight. Risk management committees serve as a point of review and escalation for those risks which may have risk interdependencies or where risk levels may be nearing the limits outlined in the Corporation’s risk appetite statement. These committees comprise senior and executive management that represent views from both the lines of business and risk management. Internal Audit, the third line of defense, monitors and assesses the overall effectiveness of the risk management framework on an ongoing basis and provides an independent, objective assessment of the Corporation’s ability to manage and control risk to management and the Audit Committee of the Board.
The Enterprise-WideEnterprise Risk Managementand Return Committee, chaired by the Chief Risk Officer, is established by the Enterprise Risk Committee of the Board and is responsible for governance over the risk management framework, providing oversight in managing the Corporation's aggregate risk position and reporting on the comprehensive portfolio of risks as well as the potential impact these risks can have on the Corporation's risk profile and resulting capital level. Capital provides the primary buffer for risk and also serves as a measuring tool when evaluating risk. The Enterprise-WideEnterprise Risk Managementand Return Committee is principally composed of senior officers and executives representing the different risk areas and business units who are appointed by the Chairman and Chief Executive Officer of the Corporation.
The Board's Enterprise Risk Committee meets quarterly and is chartered to assist the Board in promoting the best interests of the Corporation by overseeing policies and risk practices relating to enterprise-wide risk and ensuring compliance with bank regulatory obligations. Members of the Enterprise Risk Committee are selected such that the committee comprises individuals whose experiences and qualifications can lead to broad and informed views on risk matters facing the Corporation and the financial services industry. These include, but are not limited to, existing and emerging risk matters related to credit, market, liquidity, operational, technology, compliance and strategic conditions. A comprehensive risk report is submitted to the Enterprise Risk Committee each quarter providing management's view of the Corporation's aggregate risk position.
Further discussion and analyses of each major risk area are included in the following sub-sections of the Risk Management section in this financial review.
Credit Risk
Credit risk represents the risk of loss due to failure of a customer or counterparty to meet its financial obligations in accordance with contractual terms. Credit risk is found in all activities where success depends on counterparty, issuer or borrower performance. It arises any time funds are extended, committed, invested or otherwise exposed, whether reflected on or off the balance sheet. The governance structure is administered through the Strategic Credit Committee. The Strategic Credit Committee is chaired by the Chief Credit Officer and approves recommendations to address credit risk matters through credit policy, credit risk management practices and required credit risk actions. The Strategic Credit Committee also ensures a comprehensive reporting of credit risk levels and trends, including exception levels, along with identification and mitigation of emerging risks. In order to facilitate the corporate credit risk management process, various other corporate functions provide the resources for the Strategic Credit Committee to carry out its responsibilities. The Corporation manages credit risk through underwriting and periodically reviewing and approving its credit exposures using approvedin accordance with established credit policies and guidelines. Additionally, the Corporation manages credit risk through loan portfolio diversification, limiting exposure to any single industry, customer or guarantor, and selling participations and/or syndicating credit exposures above those levels it deems prudent to third parties.
The Credit Division manages credit policy and provides the resources to manage the line of business transactional credit risk, assuring that all exposure is risk rated according to the requirements of the credit risk rating policy and providing
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business segment reporting support as necessary. The Enterprise Risk Division provides credible and well-documented challenge of overall portfolio credit risk, and other credit-related attributes of the Corporation's loan portfolios, with a particular
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emphasis on all attendant modeled results. The Corporation's Asset Quality Review function, a division of Internal Audit, audits the accuracy of internal risk ratings that are assigned by the lending and credit groups. The Special Assets Group is responsible for managing the recovery process on distressed or defaulted loans and loan sales.
Portfolio RiskCredit Analytics and Strategy, within the Credit Division, provides comprehensive reporting on portfolio credit risk levels and trends, continuous assessment and verification of risk rating models, quarterly calculation of the allowance for loan losses and the allowance for credit losses on lending-related commitments and calculations of both expected and unexpected loss.
Allowance for Credit Losses
The allowance for credit losses includes both the allowance for loan losses and the allowance for credit losses on lending-related commitments. Effective January 1, 2020, the allowance for credit losses reflected the adoption of Topic 326, which requires companies to estimate credit losses using the CECL framework. As a percentage of total loans, the allowance for credit losses was 1.90 percent at December 31, 2020, compared to 1.33 percent at December 31, 2019. Excluding $3.5 billion in PPP loans, which are guaranteed by the Small Business Administration, the allowance for credit losses was 2.03 percent of total loans at December 31, 2020. The allowance for credit losses covered 2.8 times and 3.3 times total nonperforming loans at December 31, 2020 and December 31, 2019, respectively.
At adoption on January 1, 2020, the scope and severity of the economic crisis resulting from the COVID-19 pandemic were unknown. As such, the economic scenario used by the Corporation to develop its estimate of CECL as of the adoption date reflected a continued moderate U.S. economic expansion compared to 2019 levels and a stable interest rate environment, with the federal funds rate remaining in the 1.50- to 1.75-percent range. Other assumptions included the resolution of trade tensions, a calmer global economy and a strong U.S. dollar, all of which supported modest industrial production growth and stable oil prices. The forecast also assumed strong labor market conditions to support the consumer sector. Management considered the level of uncertainty regarding its economic assumptions as part of the qualitative adjustment. The adoption of CECL resulted in a $17 million day-one decrease in the allowance for credit losses, from $668 million at December 31, 2019 under the incurred loss model. See Note 1 to the consolidated financial statements for further information about the adoption of CECL.
The allowance for credit losses increased by $341$67 million from the adoption date to $992$661 million at December 31, 2020, primarily2022 to $728 million at December 31, 2023, reflecting thean uncertain economic impactsoutlook and credit migration, as well as changes in portfolio composition.
The following table presents metrics of the COVID-19 pandemicallowance for credit losses and the response by domestic and global governmental authorities, including quarantines and other social distancing policies aimed at fighting the spread of the virus. In early 2020, energy markets, which were experiencing stress prior to the pandemic, were further impacted by the rapid decline in demand resulting from social distancing policies. Energy prices and demand improved in the second half of 2020 as the economy began to recover, but energy markets remain uncertain.nonperforming loans.
December 31,20232022
Allowance for credit losses as a percentage of total loans1.40 %1.24 %
Allowance for credit losses as a multiple of total nonaccrual loans4.1x2.8x
Allowance for credit losses as a multiple of total nonperforming loans4.1x2.7x
The U.S. economy contracted into a recession with unusual speed and force ineconomic forecasts informing the first halfcurrent expected credit loss (CECL) model reflect the cumulative effects of 2020, ending the longest expansionary period in U.S. history. The U.S. government and the Federal Reserve respondedBank's tight monetary policy that are weighing on the real economy, as well as several years of elevated inflation that have largely depleted excess savings that households accumulated during the pandemic. Energy prices are projected to level off amid crosswinds from the pandemic with unprecedented measures.Russia-Ukraine conflict, rising U.S. crude production and weak demand from China and other major foreign economies. Residential and commercial real estate property prices face headwinds from the long and variable lags by which the Federal Reserve Bank's tighter monetary policy affect real asset prices.
Downside risks to growth from geopolitical risks, a potential government shutdown, the restart of student loan payments and less expansionary fiscal policy are projected to collectively contribute to slower growth in 2024. Price pressures are forecasted to gradually return to pre-pandemic norms as a modest margin of slack opens in the economy's productive capacity. The Federal Reserve reducedBank's aggressive tightening of monetary policy, including rapid increases in interest rates and reductions in the target federal funds ratesize of its balance sheet, contribute to zero to 0.25 percent and Congress passed the CARES Act that included an estimated $2 trillion stimulus package. Although the U.S. economy began to recover in third quarter 2020 as social distancing policies loosened, economic metrics in fourth quarter 2020 indicate an uneven path to recovery. In December 2020, Congress amended the CARES Act through the Consolidated Appropriations Actelevated risk of 2021 to add an additional $900 billion of stimulus relief to mitigate the continued impacts of the pandemic. While certain factors point to improving economic conditions, uncertainty remains regarding the path of the economic recovery, the mitigating impacts of government interventions, the success of vaccine distribution and the efficacy of administered vaccines, as well as the effects of the change in leadership resulting from the recent elections.a policy error or recession.
These factors shaped the 2-year reasonable and supportable forecast used by the Corporation in its CECL modeled estimate at December 31, 2020. After2023. The U.S. economy is projected to grow at a partial rebound in real gross domestic product (GDP)below-trend rate through 2024 before gradually normalizing to its trend growth in third and fourth quarters 2020, forecasted GDP reaches pre-pandemic, fourth quarter 2019 levels by the latter portion of 2021, normalizing into historical growth ratesrate. Certain economic variables, like oil prices, are expected to increase in the second half of the forecast period.short term before decreasing as inflation normalizes. Forecasts for other key economic variables including the unemployment rate and oil prices, are generally in line with GDP projections. Interest rates remain low, reflecting the Federal Reserve's expectation that rates will remain at current levels in the near-to mid-term, while corporate bond rates reflect decreasing default risk, with slight improvements as the forecasted horizon moved by one quarter. Economic forecasts for fourth quarter 2020 were generally consistent with third quarter 2020 forecasts.those of Gross Domestic Product (GDP), while interest rate forecasts reflect market expectations and recent guidance from the Federal Reserve Bank. The following table summarizes the forecasts forselect economic variables representative of the economic variables most impactfulforecasts used to develop the allowance for credit losses estimate at December 31, 2020.2023.
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Economic VariableBase Forecast
Real GDP growthGrowth peaks at 4Gradual growth to a peak near 3 percent in second and third quarters 2021, normalizing into long-termquarter 2025 before returning to a growth ratesrate of around 2 to 3 percent through 2022.percent.
Unemployment rateCurrent levels gradually decreaseRemains near 4 percent throughout the forecast period to 5 percent by fourth quarter 2022.period.
Corporate BBB bond to 10-year Treasury bond spreadsSpreads at normalized levels between 1.5 and 1.7widen to 2.4 percent throughoutby third quarter 2024 before normalizing to 2 percent by the end of the forecast period.
Oil PricesPrices steadily increase from $40current levels to $53 per barrel$84 dollars in first quarter 2024 before declining to $76 by fourth quarter 2022.the end of the forecast period.
Due to the high degree of uncertainty regarding recessionary pressures, persistent inflation, continued high interest rates and other tail risks to the ultimate economic consequences of the pandemic, as well as the effectiveness of the government's stimulus packages,outlook, management considered other economic scenarios to make appropriate qualitative adjustments for certain sectors of its lending portfolio, including more benign andas well as more severe forecasts.scenarios.
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Refer to Note 1 to the consolidated financial statements for a discussion of the methodology used in the determination of the allowance for credit losses.
Allowance for Loan Losses
The allowance for loan losses represents management’s estimates of current expected credit losses in the Corporation’s loan portfolio. Pools of loans with similar risk characteristics are collectively evaluated, while loans that no longer share risk characteristics withThe allowance for loan pools are evaluated individually.losses increased $78 million to $688 million at December 31, 2023, compared to $610 million at December 31, 2022.
Collective loss estimates are determined by applying reserve factors, designed to estimate current expected credit losses, to amortized cost balances over the remaining contractual life of the collectively evaluated portfolio. Loans with similar risk characteristics are aggregated into homogeneous pools. The allowance for loan losses also includes qualitative adjustments to bring the allowance to the level management believes is appropriate based on factors that have not otherwise been fully accounted for, including adjustments for foresight risk, input imprecisions and model imprecision. Credit losses for loans that no longer share risk characteristics with the loan pools are estimated on an individual basis. Individual credit loss estimates are typically performed for nonaccrual loans and modified loans classified as troubled debt restructurings (TDRs) and are based on one of several methods, including the estimated fair value of the underlying collateral, observable market value of similar debt or the present value of expected cash flows.    
Allowance for Credit Losses on Lending-Related Commitments
The allowance for credit losses on lending-related commitments estimates current expected credit losses on collective pools of letters of credit and unused commitments to extend credit based on reserve factors, determined in a manner similar to business loans, multiplied by a probability of draw estimate based on historical experience and credit risk, applied to commitment amounts.














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Analysis of the Allowance for Credit Losses
(dollar amounts in millions)
20202019201820172016
Balance at beginning of year
Allowance for loan losses$637 $671 $712 $730 $634 
Allowance for credit losses on lending-related commitments31 30 42 41 45 
Allowance for credit losses668 701 754 771 679 
Cumulative effect of change in accounting principle(17)— — — — 
Loan charge-offs:
Commercial232 143 95 133 181 
Commercial mortgage1 3 3 3 3 
Lease financing— — — 1 — 
International— 1 1 6 23 
Residential mortgage— 1 — — — 
Consumer5 4 4 6 7 
Total loan charge-offs238 152 103 149 214 
Recoveries on loans previously charged-off:
Commercial34 35 44 37 43 
Real estate construction— — — 1 — 
Commercial mortgage4 4 2 9 20 
International— 1 1 3 — 
Residential mortgage— 1 1 1 1 
Consumer4 4 4 6 4 
Total recoveries42 45 52 57 68 
Net loan charge-offs196 107 51 92 146 
Foreign currency translation adjustment— — (1)1 1 
Charge-offs on lending-related commitments (a)— — — — 11 
Provision for credit losses:
Provision for loan losses524 73 11 73 241 
Provision for credit losses on lending-related commitments13 1 (12)1 7 
Provision for credit losses537 74 (1)74 248 
Balance at end of year
Allowance for loan losses948 637 671 712 730 
Allowance for credit losses on lending-related commitments44 31 30 42 41 
Allowance for credit losses$992 $668 $701 $754 $771 
Allowance for loan losses as a percentage of total loans at end of year1.81 %1.27 %1.34 %1.45 %1.49 %
Allowance for loan losses as a percentage of total loans excluding PPP loans1.94 n/an/an/an/a
Allowance for credit losses as a percentage of total loans at end of year1.90 1.33 1.40 1.53 1.57 
Allowance for credit losses as a percentage of total loans excluding PPP loans2.03 n/an/an/an/a
Allowance for loan losses as a multiple of total nonperforming loans at end of year2.7x3.1x2.9x1.7x1.2x
Allowance for credit losses as a multiple of total nonperforming loans at end of year2.8x3.3x3.1x1.8x1.3x
Allowance for loan losses as a multiple of total net loan charge-offs for the year4.8x6.0x13.1x7.7x5.0x
Net loan charge-offs during the year as a percentage of average loans outstanding during the year0.38 %0.21 %0.11 %0.19 %0.30 %
(a)    Charge-offs result from the sale of unfunded lending-related commitments.
n/a - not applicable
As a percentage of total loans, the allowance for loan losses was 1.81 percent at December 31, 2020, compared to 1.27 percent at December 31, 2019. Excluding PPP loans, the allowance for loan losses was 1.94 percent of total loans at December 31, 2020. The allocation of reserves for Energy loans was approximately 8 percent in response to sustained pressures on the Energy portfolio. Nonperforming loans were 0.67 percent of total loans at December 31, 2020, compared to 0.40 percent
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at December 31, 2019, and the allowance for loan losses covered 2.7 times and 3.1 times total nonperforming loans at December 31, 2020 and 2019, respectively.
The allowance for credit losses on lending-related commitments totaled $44$40 million and $31$51 million at December 31, 20202023 and 2019,December 31, 2022, respectively.
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Analysis of the Allowance for Credit Losses
The table below details net charge-offs (recoveries) as a percentage of total loans by loan category.
202320222021
(dollar amounts in millions)Net Loan Charge-Offs (Recoveries)Net Charge-Offs (Recoveries) Ratio (a)Net Loan Charge-Offs (Recoveries)Net Charge-Offs (Recoveries) Ratio (a)Net Loan Charge-Offs (Recoveries)Net Charge-Offs (Recoveries) Ratio (a)
Commercial$9 0.03 %$18 0.06 %$(15)(0.05 %)
Commercial mortgage(1)(0.01)— — 2 0.02 
International13 1.06 — — 4 0.38 
Residential mortgage— — (1)(0.03)(2)(0.11)
Consumer1 0.04 — — 1 0.05 
Total loans$22 0.04 %$17 0.03 %$(10)(0.02 %)
(a)Net charge-offs (recoveries) as a percentage of related average loans outstanding.
Net loan charge-offs totaled $22 million for the year ended December 31, 2023, a $5 million increase from net loan charge-offs of $17 million for the year ended December 31, 2022. See "Provision for Credit Losses" in the "Results of Operations" section of this financial review for more information about net loan charge-offs.
Allocation of the Allowance for Credit Losses
20202019201820172016
202320232022
(dollar amounts in millions)(dollar amounts in millions)Allocated
Allowance		Allowance
Ratio (a)		% (b)Allocated
Allowance		% (b)Allocated
Allowance		% (b)Allocated
Allowance		% (b)Allocated
Allowance		% (b)(dollar amounts in millions)Allocated
Allowance		Allowance
Ratio (a)		% (b)Allocated
Allowance		Allowance
Ratio (a)		% (b)
December 31
December 31,
Allowance for loan losses
Allowance for loan losses
Allowance for loan losses
Business loansBusiness loans
Commercial (c)$508 1.55 %62 %$490 62 %$492 64 %$521 63 %$547 63 %
Commercial
Commercial
Commercial$303 1.11 %52 %$287 0.93 %58 %
Real estate constructionReal estate construction62 1.53 8 17 7 19 6 19 6 21 6 
Commercial mortgageCommercial mortgage299 3.02 19 81 19 99 18 91 19 93 18 
Lease financingLease financing10 1.67 1 3 1 4 1 12 1 5 1 
InternationalInternational16 1.69 2 10 2 13 2 18 2 16 3 
Total business loansTotal business loans895 1.85 92 601 91 627 91 661 91 682 91 
Retail loansRetail loans
Residential mortgageResidential mortgage16 0.87 4 7 4 9 4 13 4 11 4 
Residential mortgage
Residential mortgage
ConsumerConsumer37 1.70 4 29 5 35 5 38 5 37 5 
Total retail loansTotal retail loans53 1.32 8 36 9 44 9 51 9 48 9 
Total loansTotal loans948 1.81 %100 %$637 100 %671 100 %712 100 %730 100 %Total loans688 1.32 1.32 %100 %$610 1.14 1.14 100 100 %
Allowance for credit losses on lending-related commitmentsAllowance for credit losses on lending-related commitmentsAllowance for credit losses on lending-related commitments
Business commitmentsBusiness commitments35 28 26 38 38 
Retail commitmentsRetail commitments9 3 4 4 3 
Retail commitments
Retail commitments
Total commitments
Total commitments
Total commitmentsTotal commitments44 31 30 42 41 
Allowance for credit lossesAllowance for credit losses$992 1.90 %$668 $701 $754 $771 
Allowance for credit losses
Allowance for credit losses
(a)Allocated allowance as a percentage of related loans outstanding.
(b)Loans outstanding as a percentage of total loans.
(c)Includes PPP loans with a balance of $3.5 billion at December 31, 2020.
For additional information regarding the allowance for credit losses, refer to the "Critical Accounting Policies"Estimates" section of this financial review and Notes 1 and 4 to the consolidated financial statements.
Nonperforming Assets
Nonperforming assets include loans on nonaccrual status TDRs which have been renegotiated to less than the original contractual rates (reduced-rate loans) and foreclosed assets. TDRs include performing and nonperforming loans, with nonperforming TDRs on either nonaccrual or reduced-rate status. In accordance withEffective January 1, 2023, the Corporation prospectively adopted the provisions of Accounting Standards Update No. 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosures", which eliminated the CARES Act, the Corporation elected not to consider qualifying COVID-19-related modifications, primarily deferrals, as TDRs and does not designate such loans as past due or nonaccrual. For additional information regarding the Corporation's accounting policies for the CARES Act, referTDRs. Refer to Note 1 to the consolidated financial statements.statements for further information. At December 31, 2022, reduced-rate loans represented TDRs which had been renegotiated to less than their original contractual rates.
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The following table presents a summary of nonperforming assets and past due loans.
Summary of Nonperforming Assets and Past Due Loans
(dollar amounts in millions)
December 3120202019201820172016
Nonaccrual loans:
Business loans:
Commercial$252 $148 $141 $309 $445 
Real estate construction1 — — — — 
Commercial mortgage29 14 20 31 46 
Lease financing1 — 2 4 6 
International— — 3 6 14 
Total nonaccrual business loans283 162 166 350 511 
Retail loans:
Residential mortgage47 20 36 31 39 
Consumer:
Home equity17 17 19 21 28 
Other consumer— — — — 4 
Total consumer17 17 19 21 32 
Total nonaccrual retail loans64 37 55 52 71 
Total nonaccrual loans347 199 221 402 582 
Reduced-rate loans3 5 8 8 8 
Total nonperforming loans350 204 229 410 590 
Foreclosed property8 11 1 5 17 
Other repossessed assets1 — — — — 
Total nonperforming assets$359 $215 $230 $415 $607 
Gross interest income that would have been recorded had the nonaccrual and reduced-rate loans performed in accordance with original terms$24 $20 $19 $31 $38 
Interest income recognized6 5 4 7 6 
Nonperforming loans as a percentage of total loans0.67 %0.40 %0.46 %0.83 %1.20 %
Nonperforming assets as a percentage of total loans and foreclosed property0.69 0.43 0.46 0.84 1.24 
Loans past due 90 days or more and still accruing$45 $26 $16 $35 $19 
(dollar amounts in millions)
December 3120232022
Nonaccrual loans$178 $240 
Reduced-rate loansn/a4 
Total nonperforming loans178 244 
Foreclosed property— — 
Total nonperforming assets$178 $244 
Nonaccrual loans as a percentage of total loans0.34 %0.45 %
Nonperforming loans as a percentage of total loans0.34 0.46 
Nonperforming assets as a percentage of total loans and foreclosed property0.34 0.46 
Loans past due 90 days or more and still accruing$20 $23 
Nonperforming assets increased $144decreased $66 million to $359$178 million at December 31, 2020,2023, from $215$244 million at December 31, 2019.2022. The decrease in nonperforming assets primarily reflected decreases of $33 million in nonaccrual business loans and $29 million in nonaccrual retail loans. Nonperforming assetsloans were 0.690.34 percent of total loans and foreclosed property at December 31, 2020,2023, compared to 0.430.46 percent at December 31, 2019.
As2022. For further information regarding the composition of December 31, 2020, COVID-19-related payment deferrals totaled $141 million, or 0.27 percent of totalnonaccrual loans, representing approximately 100 obligors and consisting of 58 percent retail loans, primarily residential mortgages, and 42 percent commercial loans. Initial deferrals have expired and new requests have been nominal as customers continuerefer to adjustNote 4 to the new environment, resulting in a $244 million decrease in deferrals since third quarter 2020. Loans with COVID-19-related deferred payments on a third deferral, primarily residential mortgages, totaled $72 million at December 31, 2020 and would generally be considered TDRs if not for the provisions in the CARES Act.
The following table presents a summary of TDRs at December 31, 2020 and 2019.
(in millions)
December 3120202019
Nonperforming TDRs:
Nonaccrual TDRs$33 $36 
Reduced-rate TDRs3 5 
Total nonperforming TDRs36 41 
Performing TDRs (a)41 69 
Total TDRs$77 $110 
(a)TDRs that do not include a reduction in the original contractual interest rate which are performing in accordance with their modified terms.
During the twelve months ended December 31, 2020, $22 million of previously performing Energy TDRs were transferred to nonaccrual or charged off. At December 31, 2020, Energy TDRs totaled $9 million, all of which were on nonaccrual status, compared to $14 million at December 31, 2019.
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consolidated financial statements.
The following table presents a summary of changes in nonaccrual loans.
(in millions)(in millions)
Years Ended December 31
Years Ended December 31
Years Ended December 31Years Ended December 312020201920232022
Balance at beginning of periodBalance at beginning of period$199 $221 
Loans transferred to nonaccrual (a)Loans transferred to nonaccrual (a)482 230 
Nonaccrual loan gross charge-offsNonaccrual loan gross charge-offs(238)(152)
Loans transferred to accrual status (a)Loans transferred to accrual status (a)(3)(7)
Nonaccrual loans soldNonaccrual loans sold(14)(15)
Payments/other (b)Payments/other (b)(79)(78)
Balance at end of periodBalance at end of period$347 $199 
(a)Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(b)Includes net changes related to nonaccrual loans with balances less than or equal to $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed property.
There were 4216 borrowers with a balance greater than $2 million, totaling $482$94 million, transferred to nonaccrual status in 2020, an increase2023, a decrease of 19,7 borrowers compared to 23 borrowers totaling $230$132 million in 2019.2022. For further information about the composition of loans transferred to nonaccrual during the current period, refer to the nonaccrual information by industry category table below.
The following table presents the composition of nonaccrual loans by balance and the related number of borrowers at December 31, 20202023 and 2019.2022.
20202019
202320232022
(dollar amounts in millions)(dollar amounts in millions)Number of
Borrowers		BalanceNumber of
Borrowers		Balance(dollar amounts in millions)Number of
Borrowers		BalanceNumber of
Borrowers		Balance
Under $2 millionUnder $2 million682 $83 708 $74 
$2 million - $5 million$2 million - $5 million20 61 8 22 
$5 million - $10 million$5 million - $10 million9 73 6 49 
$10 million - $25 million$10 million - $25 million7 94 4 54 
Greater than $25 million1 36 — — 
TotalTotal719 $347 726 $199 
Total
Total
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The following table presents a summary of nonaccrual loans at December 31, 20202023 and loans transferred to nonaccrual and net loan charge-offs (recoveries) for the year ended December 31, 2020,2023, based on North American Industry Classification System (NAICS) categories.
December 31, 2023December 31, 2023Year Ended December 31, 2023
(dollar amounts in millions)(dollar amounts in millions)Nonaccrual LoansLoans Transferred to
Nonaccrual (a)		Net Loan Charge-Offs (Recoveries)
Industry Category
Manufacturing
Manufacturing
Manufacturing$42 23 %$26 28 %$5 23 %
Real Estate & Home Builders
Residential Mortgage
Transportation & Warehousing
Information & Communication
Services
Wholesale Trade
Arts, Entertainment & Recreation
Mining, Quarrying and Oil & Gas Extraction
Management of Companies and Enterprises
Retail Trade
December 31, 2020Year Ended December 31, 2020
(dollar amounts in millions)Nonaccrual LoansLoans Transferred to
Nonaccrual (a)		Net Loan Charge-Offs
Industry Category
Mining, Quarrying and Oil & Gas Extraction$114 33 %$289 60 %$125 64 %
Residential Mortgage47 14 14 3 — — 
Transportation & Warehousing36 10 36 7 — — 
Manufacturing33 10 27 6 5 3 
Wholesale Trade29 8 13 3 10 5 
Real Estate & Home Builders16 4 24 5 11 6 
Information & Communication14 4 — — 1 1 
Services12 3 21 4 8 4 
Arts, Entertainment & Recreation9 3 24 5 15 8 
Health Care & Social Assistance4 1 2 1 3 1 
Retail Trade4 1 12 2 11 5 
Contractors3 1 — — — — 
Other (b)
Other (b)
Other (b)Other (b)26 8 20 4 7 3 
TotalTotal$347 100 %$482 100 %$196 100 %Total$178 100 100 %$94 100 100 %$22 100 100 %
(a)Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(b)Consumer,Other category includes other industry categories with smaller impacts, as well as consumer, excluding residential mortgage and certain personal purpose nonaccrual loans and net charge-offs, is included in the Other category.charge-offs.
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Loans past due 90 days or more and still accruing interest generally represent loans that are well collateralizedwell-collateralized and in the process of collection. Loans past due 90 days or more increased $19decreased $3 million to $45$20 million at December 31, 2020,2023, compared to $26$23 million at December 31, 2019.2022. Loans past due 30-89 days increased $277decreased $180 million to $404$198 million at December 31, 2020,2023, compared to $127$378 million at December 31, 2019.2022. Loans past due 30 days or more and still accruing interest as a percentage of total loans were 0.42 percent and 0.75 percent at December 31, 2023 and December 31, 2022, respectively. An aging analysis of loans included in Note 4 to the consolidated financial statements provides further information about the balances comprising past due loans.
The following table presents a summary of total criticized loans. The Corporation's criticized list is consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities. Criticized loans with balances of $2 million or more on nonaccrual status or loans with balances of $1 million or more whose terms have been modified in a TDR are individually subjected to quarterly credit quality reviews, and the Corporation may establish specific allowances for such loans. A table of loans by credit quality indicator included in Note 4 to the consolidated financial statements provides further information about the balances comprising total criticized loans.
(dollar amounts in millions)(dollar amounts in millions)
December 31December 3120202019
December 31
December 3120232022
Total criticized loansTotal criticized loans$2,947 $2,120 
As a percentage of total loansAs a percentage of total loans5.6 %4.2 %As a percentage of total loans4.6 %2.9 %
The $827$833 million increase in criticized loans during the year ended December 31, 2020 included increases of $347 million in2023 was primarily driven by Commercial Real Estate and general Middle Market and $230 million in Energy.Market.
For further information regarding the Corporation's nonperforming assets policies, refer to Notes 1 and 4 to the consolidated financial statements.
Concentrations of Credit Risk
Concentrations of credit risk may exist when a number of borrowers are engaged in similar activities, or activities in the same geographic region, and have similar economic characteristics that would cause them to be similarly impacted by changes in economic or other conditions. The Corporation has concentrations of credit risk with the commercial real estate and automotive industries. All other industry concentrations, as defined by management, individually represented less than 10 percent of total loans at December 31, 2020.2023.
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Commercial Real Estate Lending
At December 31, 2020,2023, the Corporation's commercial real estate portfolio represented 2736 percent of total loans. The following table summarizes the Corporation's commercial real estate loan portfolio by loan category.
December 31, 2020December 31, 2019
December 31, 2023December 31, 2023December 31, 2022
(in millions)(in millions)Commercial Real Estate business line (a)Other (b)TotalCommercial Real Estate business line (a)Other (b)Total(in millions)Commercial Real Estate business line (a)Other (b)TotalCommercial Real Estate business line (a)Other (b)Total
Real estate construction loansReal estate construction loans$3,657 $425 $4,082 $3,044 $411 $3,455 
Commercial mortgage loansCommercial mortgage loans2,273 7,639 9,912 2,176 7,383 9,559 
Total commercial real estateTotal commercial real estate$5,930 $8,064 $13,994 $5,220 $7,794 $13,014 
(a)Primarily loans to real estate developers.
(b)Primarily loans secured by owner-occupied real estate.
The Corporation limits risk inherent in its commercial real estate lending activities by monitoring borrowers directly involved in the commercial real estate markets and adhering to conservative policies on loan-to-value ratios for such loans. Commercial real estate loans, consisting of real estate construction and commercial mortgage loans, totaled $14.0$18.8 billion at December 31, 2020. Of the total, $5.9 billion, or 42 percent, were2023. Commercial real estate loans made to borrowers in the Commercial Real Estate business line, which includes loans to real estate developers, totaled $9.3 billion, or 50 percent of total commercial real estate loans, an increase of $710 million$2.1 billion compared to December 31, 2019.2022. The Commercial Real Estate business line at December 31, 2023 was predominantly secured by multi-family and industrial properties, comprising 46 percent and 34 percent of the portfolio, respectively, with only 6 percent secured by office properties. Commercial real estate loans in other business lines totaled $8.1$9.5 billion, or 5850 percent of total commercial real estate loans, at December 31, 2020.2023, an increase of $247 million compared to December 31, 2022. These loans consisted primarily of owner-occupied commercial mortgages, which bear credit characteristics similar to non-commercial real estate business loans. Generally, loans previously reported as real estate construction are classified as commercial mortgage loans upon receipt of a certificate of occupancy.
The real estate construction loan portfolio primarily contains loans made to long-timelong-tenured customers with satisfactory completion experience. Criticized real estate construction loans in the Commercial Real Estate business line totaled $27 million and $31$86 million at December 31, 2020 and 2019, respectively.2023 compared to none at December 31, 2022. In other business lines, criticized real estate construction loans totaled $20$12 million at December 31, 2020,2023, compared to none$3 million at December 31, 2019.2022. There were no real estate construction loan net charge-offs in either of the years ended December 31, 20202023 and 2019.2022.
Commercial mortgage loans are loans where the primary collateral is a lien on any real property and are primarily loans secured by owner occupiedowner-occupied real estate. Real property is generally considered primary collateral if the value of that collateral represents more than 50 percent of the commitment at loan approval. Loans in the commercial mortgage portfolio generally mature within three to five years. Criticized commercial mortgage loans in the Commercial Real Estate business line
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totaled $73$378 million and $55$16 million at December 31, 20202023 and 2019, respectively.2022, respectively, with the increase primarily in multi-family properties. In other business lines, $440$395 million and $242$151 million of commercial mortgage loans were criticized at December 31, 20202023 and 2019,2022, respectively. Commercial mortgage loan net recoveries were $3 million and $1 million in 2020 and 2019, respectively.2023, compared to no net charge-offs in 2022.
Automotive Lending - Dealer:
The following table presents a summary of dealer loans.
20202019
December 31, 2023December 31, 2023December 31, 2022
(in millions)(in millions)Loans
Outstanding		Percent of
Total Loans		Loans
Outstanding		Percent of
Total Loans		(in millions)Loans
Outstanding		Percent of
Total Loans		Loans
Outstanding		Percent of
Total Loans
Dealer:Dealer:
Floor planFloor plan$2,344 $3,967 
Floor plan
Floor plan
Other
Other
OtherOther3,348 3,447 
Total dealerTotal dealer$5,692 10.9 %$7,414 14.7 %
Total dealer
Total dealer$6,191 11.9 %$5,367 10.1 %
Substantially all dealer loans are in the National Dealer Services business line and primarily include floor plan financing and other loans to automotive dealerships. Floor plan loans, included in commercial loans in the Consolidated Balance Sheets, totaled $2.3 billion at December 31, 2020, a decrease2023, an increase of $1.7 billion$934 million compared to $4.0$1.4 billion at December 31, 20192022, resulting from increasing vehicle levels due to an imbalance in supply and demand resulting in lower inventory.chain improvements. At December 31, 20202023 and 2019,2022, other loans in the National Dealer Services business line totaled $3.3$3.9 billion and $3.4$4.0 billion, respectively, including $2.0$2.2 billion and $2.3 billion of owner-occupied commercial real estate mortgage loans, at both December 31, 2020 and 2019. The National Dealer Services business line includes a wide array of franchises with a focus on mega dealers consisting of five or more dealerships in a group.respectively.
There were no nonaccrual dealer loans at both December 31, 2020, compared to $9 million at December 31, 2019.2023, and 2022. Additionally, there were no net charge-offs of dealer loans in either of the years ended December 31, 20202023 and 2019.2022.
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Automotive Lending- Production:
The following table presents a summary of loans to borrowers involved with automotive production.
20202019
Loans
Outstanding (a)		Percent of
Total Loans		Loans
Outstanding		Percent of
Total Loans
(in millions)
Production:
Domestic$791 $963 
Foreign302 286 
Total production$1,093 2.1 %$1,249 2.5 %
(a)Excludes PPP loans.
December 31, 2023December 31, 2022
Loans
Outstanding
Percent of
Total Loans
Loans
Outstanding
Percent of
Total Loans
(in millions)
Production:
Domestic$591 $797 
Foreign257 271 
Total production$848 1.6 %$1,068 2.0 %
Loans to borrowers involved with automotive production, primarily Tier 1 and Tier 2 suppliers, totaled $1.1 billion$848 million at December 31, 2023 and $1.2$1.1 billion at December 31, 2020 and 2019, respectively.2022. These borrowers have faced, and could face in the future, financial difficulties due to disruptions in auto production, as well as theirissues with supply chains and logistics operations as a result of the COVID-19 pandemic.and impacts resulting from labor union strikes. As such, management prudently increased allocated reserves forcontinues to monitor this portfolio in 2020.portfolio.
Nonaccrual loans to borrowers involved with automotive production totaled $7$17 million in at December 31, 2023, compared to $5 million at December 31, 2020 and $10 million at December 31, 2019. Criticized automotive production loans were 24 percent of the automotive production portfolio at December 31, 2020, compared to 15 percent at December 31, 2019.2022. Automotive production loan net charge-offs totaled $2$7 million infor the year ended December 31, 2020,2023, compared to net recoveries of $1$2 million for the same period in 2019.2022.
For further information regarding significant group concentrations of credit risk, refer to Note 5 to the consolidated financial statements.
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Residential Real Estate Lending
At December 31, 2020,2023, residential real estate loans represented 7 percent of total loans. The following table summarizes the Corporation's residential mortgage and home equity loan portfolios by geographic market.




20202019


December 31, 2023December 31, 2022
(dollar amounts in millions) December 31
Residential
Mortgage 
Loans		% of
Total		Home
Equity 
Loans		% of
Total		Residential
Mortgage 
Loans		% of
Total		Home
Equity 
Loans		% of
Total
(dollar amounts in millions)(dollar amounts in millions)Residential
Mortgage 
Loans		Percent of
Total		Home
Equity 
Loans		Percent of
Total		Residential
Mortgage 
Loans		Percent of
Total		Home
Equity 
Loans		Percent of
Total
Geographic market:Geographic market:
Michigan
Michigan
MichiganMichigan$428 23 %$540 34 %$412 22 %$603 35 %$548 29 29 %$444 25 25 %$497 27 27 %$487 27 27 %
CaliforniaCalifornia927 51 655 41 932 51 699 41 
TexasTexas254 14 328 21 275 15 346 20 
Other MarketsOther Markets221 12 65 4 226 12 63 4 
TotalTotal$1,830 100 %$1,588 100 %$1,845 100 %$1,711 100 %Total$1,889 100 100 %$1,792 100 100 %$1,814 100 100 %$1,776 100 100 %
Residential real estate loans, which consist of traditional residential mortgages and home equity loans and lines of credit, totaled $3.4$3.7 billion at December 31, 2020.2023. The residential real estate portfolio is principally located within the Corporation's primary geographic markets. Substantially all residential real estate loans past due 90 days or more are placed on nonaccrual status, and substantially all junior lien home equity loans that are current or less than 90 days past due are placed on nonaccrual status if full collection of the senior position is in doubt. At no later than 180 days past due, such loans are charged off to current appraised values less costs to sell.
Residential mortgages totaled $1.8$1.9 billion at December 31, 2020,2023, and were primarily larger, variable-rate mortgages originated and retained for certain private banking relationship customers. Of the $1.8$1.9 billion of residential mortgage loans outstanding, $47$19 million were on nonaccrual status at December 31, 2020.2023, a decrease of $34 million compared to December 31, 2022. The home equity portfolio totaled $1.6$1.8 billion at December 31, 2020,2023, of which $1.5 billion96 percent was outstanding under primarily variable-rate, interest-only home equity lines of credit, $70 million3 percent were in amortizing status and $16 million1 percent were closed-end home equity loans. Of the $1.6$1.8 billion of home equity loans outstanding, $17$21 million were on nonaccrual status at December 31, 2020.2023, an increase of $6 million compared to December 31, 2022. A majority of the home equity portfolio was secured by junior liens at December 31, 2020.2023.
Energy Lending
The Corporation has a portfolio of Energy loans that are included entirely in commercial loans in the Consolidated Balance Sheets. Customers in the Corporation's Energy business line (approximately 130120 relationships) are engaged in three segments of the oil and gas business: exploration and production (E&P), midstream and energy services.midstream. E&P generally includes such activities as searching for potential oil and gas fields, drilling exploratory wells and operating active wells. Commitments to E&P borrowers are generally subject to semi-annual borrowing base re-determinations based on a variety of factors including updated prices (reflecting market and competitive conditions), energy reserve levels and the impact of hedging. The midstream sector is generally involved in the
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transportation, storage and marketing of crude and/or refined oil and gas products. The Corporation's energy services customers provide products and services primarily to the E&P segment. Approximately 94% of loans in the Energy business line are Shared National Credits (SNC), which are facilities greater than or equal to $100 million shared by three or more federally supervised institutions, reflecting the Corporation's focus on larger middle market companies that have financing needs that generally exceed internal individual borrower credit risk limits. The Corporation seeks to develop full relationships with SNC borrowers.
The following table summarizes information about loans in the Corporation's Energy business line.
(dollar amounts in millions)(dollar amounts in millions)20202019(dollar amounts in millions)20232022
December 31December 31OutstandingsNonaccrualCriticized (a)OutstandingsNonaccrualCriticized (a)December 31OutstandingsNonaccrualCriticized (a)OutstandingsNonaccrualCriticized (a)
Exploration and production (E&P)Exploration and production (E&P)$1,295 81 %$114 $527 $1,741 78 %$43 $289 
MidstreamMidstream261 16 — 56 432 20 — 63 
Services44 3 — 13 48 2 — 14 
Total Energy business line
Total Energy business line
Total Energy business lineTotal Energy business line$1,600 100 %$114 $596 $2,221 100 %$43 $366 
As a percentage of total Energy loans7 %37 %2 %16 %
(a)Includes nonaccrual loans.
Loans in the Energy business line totaled $1.6$1.4 billion, or approximately 3 percent of total loans, at December 31, 2020,2023, a decrease of $621 million.$33 million compared to December 31, 2022. Total exposure, including unused commitments to extend credit and letters of credit, was $3.1$3.3 billion (a utilization rate of 5242 percent) and $4.3$3.4 billion (a utilization of 43 percent) at December 31, 20202023 and December 31, 2019, respectively.
The decrease in total exposure in the Energy business line primarily reflected reduced borrowing bases as a result of lower oil and gas prices as well as reduced production activity. At December 31, 2020, the Corporation had completed approximately 92 percent of the Fall borrowing base re-determinations, resulting in a modest decrease to borrowing bases. The value and coverage benefit of hedging contracts are dependent upon the oil/gas price in each contract, as well as the operational costs, which are different for each borrower. As of December 31, 2020, 75 percent of the Corporation's E&P customers had at least 50 percent of their oil and/or gas production hedged up to one year and 38 percent of customers had at least 50 percent of production hedged for two years or more.
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The Corporation's allowance methodology considers the various risk elements within the loan portfolio. When merited, the Corporation may incorporate a qualitative reserve component for Energy loans. The allocation of reserves for Energy loans was approximately 8 percent of the Energy portfolio at December 31, 2020. Energy markets, which were already experiencing stress prior to the pandemic, were further impacted by the rapid decline in demand resulting from social distancing policies. Demand and prices improved slightly in the latter half of 2020 as the economy began to recover, but energy markets remain uncertain. There were $125 million and $86 million in net credit-related charge-offs in the Energy business line for the years ended December 31, 2020 and 2019,2022, respectively. Nonaccrual Energy loans increased $71decreased $3 million to $114$4 million at December 31, 2020,2023, compared to $43$7 million at December 31, 2019.2022. Criticized Energy loans increased $230decreased $8 million to $596$4 million at December 31, 2020.2023, compared to $12 million at December 31, 2022. Energy net recoveries were $1 million for the year ended December 31, 2023, compared to net charge-offs of $3 million for the year ended December 31, 2022.
Leveraged Loans
Certain loans in the Corporation's commercial portfolio are considered leveraged transactions. These loans are typically used for mergers, acquisitions, business recapitalizations, refinancing and equity buyouts. To help mitigate the risk associated with these loans, the Corporation focuses on middle market companies with highly capable management teams, strong sponsors and solid track records of financial performance. Industries prone to cyclical downturns and acquisitions with a high degree of integration risk are generally avoided. Other considerations include the sufficiency of collateral, the level of balance sheet leverage and the adequacy of financial covenants. During the underwriting process, cash flows are stress-tested to evaluate the borrowers' abilities to handle economic downturns and an increase in interest rates. Management considers the leveraged loan portfolio to be one of the most sensitive to economic impacts stemming from the COVID-19 pandemic and social distancing policies and has continued to set aside increased reserves for this portfolio as of December 31, 2020. Certain energy, automotive production and loans in other portfolios specifically identified as subject to additional stress due to COVID-19 impacts, totaling approximately $250 million, are also considered leveraged transactions.
The FDIC defines higher-risk commercial and industrial (HR C&I) loans for assessment purposes as loans generally with leverage of four times total debt to earnings before interest, taxes and depreciation (EBITDA) as well as three times senior debt to EBITDA, excluding certain collateralized loans.
The following table summarizes information about HR C&I loans.loans, which represented 5 percent and 6 percent of total loans at December 31, 2023 and December 31, 2022, respectively.
(in millions)20202019
Outstandings$2,441 $2,553 
Criticized418 169 
Net loan charge-offs
Years ended December 31,25 6 

Other Sectors Most at Risk due to Economic Stress Resulting from COVID-19 Impacts
The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and increased unemployment levels. The resulting temporary closure of many businesses and the implementation of social distancing and sheltering in place policies has impacted, and will continue to impact, many of the Corporation’s customers. In addition to the energy, automotive production and leveraged loan portfolios, the Corporation considers the following sectors of its loan portfolio to be most vulnerable to financial risks from business disruptions caused by the pandemic spread mitigation efforts. For further discussion, see Item 1.A "Risk Factors" on page 13 of this report.
December 31, 2020
Sector based on NAICS category (dollar amounts in millions)
Loans (a)Percent of Total LoansPercent Criticized (b)Percent Nonaccrual (c)
Retail Commercial Real Estate (d)$785 1.5 %4.7 %— %
Hotels557 1.1 11.6 1.7 
Arts/Recreation238 0.5 30.4 4.5 
Retail Goods and Services228 0.4 10.4 — 
All other impacted sectors (e)1,022 2.0 9.6 0.6 
Total$2,830 5.4 %10.5 %0.9 %
(a)Excludes PPP loans.
(b)Sector criticized loans as a percentage of sector total loans.
(c)Sector nonaccrual loans as a percentage of sector total loans.
(d)Loans in the retail commercial real estate sector are primarily included in the Corporation's commercial real estate portfolio.
(e)Includes airlines, restaurants and bars, childcare, coffee shops, cruise lines, education, gasoline and convenience stores, religious organizations, senior living, freight, as well as travel arrangements.
(in millions)
December 31
20232022
Outstandings$2,814 $3,120 
Criticized332 393 
Net loan charge-offs recorded during the years ended December 31,5 20 
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Market and Liquidity Risk
Market risk represents the risk of loss due to adverse movement in prices, including interest rates, foreign exchange rates, commodity prices and equity prices. Liquidity risk represents the risk that the Corporation does not have sufficient access to funds to maintain its normal operations at all times or does not have the ability to raise or borrow funds at a reasonable cost at all times.
The Asset and Liability PolicyManagement Committee (ALCO) of the Corporation establishes and monitors compliance with the policies and risk limits pertaining to market and liquidity risk management activities. ALCO meets regularly to discuss and review market and liquidity risk management strategies and consists of executive and senior management from various areas of the Corporation, including treasury, finance, economics, lending, deposit gathering and risk management. Corporate Treasury mitigates market and liquidity risk under the direction of ALCO through the actions it takes to manage the Corporation's market, liquidity and capital positions.
The Corporation performs monthly liquidity stress testing to evaluate its ability to meet funding needs in hypothetical stressed environments. Such environments cover a series of scenarios, including both idiosyncratic and market-wide in nature, which vary in terms of duration and severity. Recent events have created greater uncertainty with respect to normal deposit patterns. Following the March 2023 banking industry disruption, the Corporation activated its contingency funding plan by increasing its cash position through wholesale funding channels and brokered deposits. The Corporation's evaluation as of December 31, 2023 projected that sufficient sources of liquidity were available under each series of events.
In addition to assessing liquidity risk on a consolidated basis, Corporate Treasury also monitors the parent company's liquidity and has established limitsliquidity coverage requirements for the minimum number of months into the future in which the parent company can meet existing and forecastedmeeting expected obligations without the support of additional dividends from subsidiaries. ALCO's policy on liquidity policyrisk management requires the parent company to maintain sufficient liquidity to meet expected capitalcash obligations, such as debt service, dividend payments and debt obligations withnormal operating expenses, over a targetperiod of 24 months but no less than 1812 months. The Corporation had liquid assets of $1.4 billion on an unconsolidated basis at December 31, 2023.
Corporate Treasury and the Enterprise Risk Division support ALCO in measuring, monitoring and managing interest rate risk as well as all other market risks. Key activities encompass: (i) providing information and analyses of the Corporation's balance sheet structure and measurement of interest rate and all other market risks; (ii) monitoring and reporting of the Corporation's positions relative to established policy limits and guidelines; (iii) developing and presenting analyses and strategies to adjust risk positions; (iv) reviewing and presenting policies and authorizations for approval; and (v) monitoring of industry trends and analytical tools to be used in the management of interest rate and all other market and liquidity risks.
Interest Rate Risk
Net interest income is the primary source of revenue for the Corporation. Interest rate risk arises in the normal course of business due to differences in the repricing and cash flow characteristics of assets and liabilities, primarily through the Corporation's core business activities of extending loans and acquiring deposits. The Corporation's balance sheet is predominantly characterized by floating-rate loans funded by core deposits. Including the impact of interest rate swaps converting floating-rate loans to fixed, the Corporation's loan composition at December 31, 20202023 was 6240 percent LIBOR, 12fixed-rate, 51 percent primeovernight to 30-day rate, 6 percent 90-day and 26greater rates and 3 percent fixed rate. Additionally, 20 percent of loans had non-zero interest rate floors protecting against future rate declines.prime. The composition of the loan portfolio creates sensitivity to interest rate movements due to the imbalance between the faster repricing of the floating-rate loan portfolio versus deposit products. In addition, the growth and/or contraction in the Corporation's loans and deposits may lead to changes in sensitivity to interest rate movements in the absence of mitigating actions. Examples of such actions are purchasing fixed-rate investment securities, which provide liquidity to the balance sheet and act to mitigate the inherent interest rate sensitivity, as well as hedging with interest rate swaps and options. Other mitigating factors include interest rate floors on a portion of the loan portfolio.
The Corporation actively manages its exposure to interest rate risk with the principal objective of optimizing net interest income and the economic value of equity while operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity.
Since no single measurement system satisfies all management objectives, a combination of techniques is used to manage interest rate risk. These techniques examine the impact of interest rate risk on net interest income and the economic value of equity under a variety of alternative scenarios, including changes in the level, slope and shape of the yield curve utilizing multiple simulation analyses. Simulation analyses produce only estimates of net interest income as the assumptions used are inherently uncertain. Actual results may differ from simulated results due to many factors, including, but not limited to, the timing, magnitude and frequency of changes in interest rates, market conditions, regulatory impacts and management strategies.
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Sensitivity of Net Interest Income to Changes in Interest Rates
The analysis of the impact of changes in interest rates on net interest income under various interest rate scenarios is management's principal risk management technique. Management models a base casebase-case net interest income under an unchanged interest rate environment. Existing derivative instruments entered into for risk management purposes as of theenvironment using a static balance sheet dates are included in the analysis, but no additional hedging is forecasted. At December 31, 2020, these derivative instruments comprise interest rate swaps that convert $2.7 billion of fixed-rate medium- and long-term debt to variable rates through fair value hedges and convert $5.6 billion of variable-rate loans to fixed rates through cash flow hedges. Additionally, included in this analysis are $10.6 billion of loans that were subject to an average interest rate floor of 0.86 percent at December 31, 2020. This base-case net interest income is then compared against interest rategenerates sensitivity scenarios in which rates rise or decline 100 basis points
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(with a floor of zero percent) in a linear, non-parallel fashion from the base case over 12 months, resulting in an average increase or decrease in short-term interest rates of 50 basis points over the period.
by changing certain model assumptions. Each scenario includes assumptions such as loan growth, investment security prepayment levels, depositor behavior yield curve changes, loan and deposit pricing, and overall balance sheet mix and growth. In this low rate environment, depositors have maintained a higher level of liquidity and theirgrowth which are in line with historical behavior may be less indicative of future trends. As a result,patterns. Additionally, the rising rate scenario reflects a greater decrease in deposits than we have experienced historically as rates rise.analysis assumes that all loan hedges qualify for hedge accounting. Changes in actual economic activity may result in a materially different interest rate environment as well as a balance sheet structure that is different from the changes management included in its simulation analysis. Model assumptions in the sensitivity scenarios at December 31, 2023 included for the rising rate scenarios, a modest increase in loan balances and a moderate decrease in deposit balances, and for the declining rate scenarios, a modest decrease in loan balances and a moderate increase in deposit balances. In addition, both scenarios assumed loan spreads held at current levels, an incremental interest-bearing deposit beta of approximately 48%, deposit mix shifts based on historical observations, partial reinvestment of securities portfolio cash flows and no additions to interest rate swaps.
The average balance of the securities portfolio included in the analysis was $17.4 billion for the year ended December 31, 2023 with an average yield of 2.10% and effective duration of 5.5 years.
The table below details components of the variable-rate loan swap portfolio at December 31, 2023.
Variable-Rate Loan Swaps (a)
(dollar amounts in millions)Notional AmountWeighted Average YieldYears to Maturity (b)
Swaps under contract at December 31, 2023 (c)$24,850 2.49 %3.9 
Weighted average notional active per period:
Full year 202322,3722.38 3.5
Full year 202423,5752.50 3.9
Full year 202522,9732.57 4.1
(a)Included $7.0 billion in swaps which no longer qualified for cash flow hedging designation following BSBY cessation. In January 2024, $4.2 billion of these swaps were re-designated, with the remaining expected to be re-designated in early 2024.
(b)Years to maturity calculated from a starting date of December 31, 2023.
(c)Includes forward starting swaps of $2.0 billion starting in 2024. Excluding forward starting swaps, the weighted average yield was 2.43%.
The analysis also includes interest rate swaps that convert $6.3 billion of fixed-rate medium- and long-term debt to variable rates through fair value hedges. Additionally, included in this analysis are $15.5 billion of loans that were subject to an average interest rate floor of 52 basis points at December 31, 2023. This base-case net interest income is then compared against interest rate scenarios in which short-term rates rise or decline 100 or 200 basis points (with a floor of zero percent) in a linear, non-parallel fashion from the base case over 12 months, resulting in an average change of 50 or 100 basis points over the period.
The table below, as of December 31, 20202023 and 2019,2022, displays the estimated impact on net interest income during the next 12 months by relating the base case scenario results to those from the rising and declining rate scenarios described above.
Estimated Annual Change
Estimated Annual ChangeEstimated Annual Change
(dollar amounts in millions)(dollar amounts in millions)20202019(dollar amounts in millions)20232022
December 31December 31Amount%Amount%December 31Amount%Amount%
Change in Interest Rates:Change in Interest Rates:Change in Interest Rates:
Rising 100 basis pointsRising 100 basis points$161 9 %Rising 100 basis points$90 4 %
Declining to zero percent(34)(2)Declining 100 basis points(135)(6)
Rising 100 basis points
Rising 100 basis points$(36)(2 %)Rising 100 basis points$10 — %
(50 basis points on average)
Declining 100 basis points
Declining 100 basis points
Declining 100 basis points
(50 basis points on average)
Rising 200 basis points
Rising 200 basis points
Rising 200 basis points
(100 basis points on average)
Declining 200 basis points
Declining 200 basis points
Declining 200 basis points
(100 basis points on average)
SensitivityIn both the 100 and 200 basis point scenarios, sensitivity to declining interest rates decreasedshifted from reducing net interest income at December 31, 20192022 to benefiting net interest income at December 31, 2020 due2023, resulting from a decline in non-maturity deposits, partially offset by an increase in time deposits. In the 100 basis point scenario, sensitivity to changesrising interest rates shifted from benefiting net interest income at December 31, 2022 to reducing net interest income at December 31, 2023, while in balance sheet composition, as well as limited remaining downward movement in rates before hitting zero percent floors. Sensitivitythe 200 basis point scenario, negative sensitivity to rising interest rates increased compared to December 31, 2022, resulting from the change in liability mix that occurred in 2023.
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At December 31, 2023, additional sensitivity scenarios applied the rising and declining 100 basis point scenario assumptions with a 60% incremental deposit beta relative to the base case scenario to assess the impact of the Corporation's deposit beta assumptions. In these rising and declining scenarios, net interest income decreased by $65 million and increased by $44 million, respectively, due to changesa more rapid repricing pace compared to the standard model assumptions. All scenarios presented for December 31, 2023 reflected a change in balance sheet composition partially offset by fixed-rate PPP lendingfollowing the March 2023 banking industry disruption, as the balance sheet maintained a higher concentration of cash as well as increased wholesale funding and an increasebrokered deposits, which contributed to the decrease in the number of variable-rate loans with active floors.net interest income in all scenarios presented.
Sensitivity of Economic Value of Equity to Changes in Interest Rates
In addition to the simulation analysis on net interest income, an economic value of equity analysis provides an alternative view of the interest rate risk position. The economic value of equity is the difference between the estimate of the economic value of the Corporation's financial assets, liabilities and off-balance sheet instruments, derived through discounting cash flows based on actual rates at the end of the period, and the estimated economic value after applying the estimated impact of rate movements. The Corporation primarily monitors the percentage change on the base-case economic value of equity. At December 31, 2020, theThe economic value of equity analysis is based on an immediate parallel 100 or 200 basis point shock with a floor of zero percent, compared to an immediate parallel 100 basis point shock at December 31, 2019.percent.
The table below, as of December 31, 20202023 and 2019,December 31, 2022, displays the estimated impact on the economic value of equity from the interest rate scenariosscenario described above.
(dollar amounts in millions)(dollar amounts in millions)20202019(dollar amounts in millions)20232022
December 31December 31Amount%Amount%December 31Amount%Amount%
Change in Interest Rates:Change in Interest Rates:Change in Interest Rates:
Rising 100 basis pointsRising 100 basis points$1,793 18 %Rising 100 basis points$716 7 %
Declining to zero percent(551)(6)Declining 100 basis points(1,178)(12)
Rising 100 basis points
Rising 100 basis points$(567)(4 %)Rising 100 basis points$(417)(3 %)
Declining 100 basis points
Rising 200 basis points
Declining 200 basis points
The negative sensitivity of the economic value of equity to rising rates increased from December 31, 20192022 to December 31, 20202023 due to changes in deposit pay ratesrunoff and expected lives,adjustments to deposit behavioral assumptions, partially offset by increased variable-rate loans with floors. The sensitivitya declining notional amount of cash flow swaps and a smaller securities portfolio. Sensitivity to declining rates decreasedincreased the economic value of equity due to changes in balance sheet composition as well as limited remaining downward movement in rates before hitting modeled zero-percent floors.the same factors.
LIBOR Transition
On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, publicly announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. The Corporation has substantial exposure to LIBOR-based products, including loans, securities, derivatives and hedges, and is preparing for a transition from LIBOR toward alternative rates. A dedicated program office and governance structure, with direction and oversight from the Chief Executive Officer, Chief Financial Officer and Chief Risk Officer, continues to guide a cross-functional implementation team to execute an enterprise LIBOR transition plan. Comerica’s enterprise transition milestones are closely aligned with recommendations from the Alternative Reference Rates Committee (ARRC) for both best practices and recommended 2020 objectives. Beginning in second quarter 2020, customer disclosure information for both consumer and commercial loans were provided for new originations. The Corporation began indexing new retail adjustable rate mortgages to SOFR (Secured Overnight Financing Rate) in third quarter 2020. During fourth quarter 2020, the Corporation began the process of incorporating fallback language in legacy LIBOR-based commercial loans and updated International Swaps and Derivative Association (ISDA) protocols in interest rate derivatives. The Corporation continues to monitor market developments and regulatory updates, including recent announcements from the ICE Benchmark Administrator to extend the cessation date for several USD LIBOR tenors to June 30, 2023, as well as collaborate with regulators and industry groups on the transition. For a
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discussion of the various risks facing the Corporation in relation to the transition away from LIBOR, see the market risk discussion within Item 1A. Risk Factors.
Loan MaturitiesLoans by Maturity and Interest Rate Sensitivity
Loans Maturing
(in millions)
December 31, 2020
Within One
Year (a)		After One
But Within
Five Years		After
Five Years		Total
Commercial loans$15,045 $16,869 $839 $32,753 
Real estate construction loans1,455 2,411 216 4,082 
Commercial mortgage loans1,773 5,012 3,127 9,912 
International loans341 529 56 926 
Total$18,614 $24,821 $4,238 $47,673 
Sensitivity of loans to changes in interest rates:
Predetermined (fixed) interest rates$360 $4,339 $489 $5,188 
Floating interest rates18,254 20,482 3,749 42,485 
Total$18,614 $24,821 $4,238 $47,673 
The contractual maturity distribution of the loan portfolio is presented below.
Loans Maturing
(in millions)
December 31, 2023
Within One
Year (a)		After One
But Within
Five Years		After Five But Within Fifteen YearsAfter Fifteen YearsTotal
Commercial loans$10,616 $15,535 $967$133 $27,251 
Real estate construction loans1,192 3,612 2754 5,083 
Commercial mortgage loans2,784 7,707 3,16926 13,686 
Lease financing270 383 154— 807 
International loans508 518 76— 1,102 
Residential mortgage loans5 7 2151,662 1,889 
Consumer loans487 152 731,583 2,295 
Total$15,862 $27,914 $4,929 $3,408 $52,113 
(a)Includes demand loans, loans having no stated repayment schedule or maturity and overdrafts.
The Corporation uses investment securities and derivative instruments as asset and liability management tools with the overall objective
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Table of managing the volatility of net interest income from changes in interest rates. These tools assist management in achieving the desiredContents
The interest rate risk management objectives. Activity related to derivative instruments currently involves interest rate swaps effectively converting fixed-rate medium- and long-term debt tocomposition of loans with a floating rate as well as variable rate loans to a fixed rate.maturity date over one year are presented below based on contractual terms.
Loans Maturing After One Year
(in millions)
December 31, 2023
Predetermined (Fixed) Interest RateFloating Interest RateTotal
Commercial loans$375 $16,260 $16,635 
Real estate construction loans74 3,817 3,891 
Commercial mortgage loans1,524 9,378 10,902 
Lease financing286 251 537 
International loans3 591 594 
Residential mortgage loans522 1,362 1,884 
Consumer loans28 1,780 1,808 
Total$2,812 $33,439 $36,251 
Risk Management Derivative Instruments
(in millions)
Risk Management Notional Activity
Interest
Rate
Contracts		Foreign
Exchange
Contracts		Totals
Balance at January 1, 2019$2,625 $302 $2,927 
Additions5,600 7,922 13,522 
Maturities/amortizations(350)(7,894)(8,244)
Balance at December 31, 2019$7,875 $330 $8,205 
Additions1,000 7,141 8,141 
Maturities/amortizations(675)(7,029)(7,704)
Balance at December 31, 2020$8,200 $442 $8,642 
The notional amountCorporation uses investment securities and derivative instruments as asset and liability management tools with the overall objective of managing the volatility of net interest income from changes in interest rates. These tools assist management in achieving the desired interest rate risk management objectives. Activity related to derivative instruments currently involves interest rate swaps totaled $8.2 billion at December 31, 2020 and $7.9 billion at December 31, 2019, which included fair value hedging strategies that convert $5.6 billion ofeffectively converting fixed-rate medium- and long-term debt to a floating rate as well as variable rate loans to a fixed rate. Notional activity for 2023 included the impact of LIBOR transition for centrally-cleared swaps, where LIBOR-based swaps were replaced with short-dated LIBOR bridge swaps that matured in 2023 and surviving forward-starting Secured Overnight Financing Rate (SOFR) swaps.
(in millions)
Risk Management Notional Activity
Interest
Rate
Contracts		Foreign
Exchange
Contracts		Totals
Balance at January 1, 2022$10,700 $452 $11,152 
Additions20,850 8,638 29,488 
Maturities/amortizations(1,800)(8,698)(10,498)
Balance at December 31, 2022$29,750 $392 $30,142 
Additions17,100 9,534 26,634 
Maturities/amortizations(9,150)(9,366)(18,516)
Terminations(6,550)— (6,550)
Balance at December 31, 2023$31,150 $560 $31,710 
The notional amount of risk management interest rate swaps totaled $31.2 billion at December 31, 2023, which included cash flow hedging strategiesswaps that convert $2.7$24.9 billion of variable-rate loans to a fixed rate as well as fair value swaps that convert $6.3 billion of fixed-rate medium- and long-term debt to a floating rate. Risk management interest rate swaps generated $121 million and $4$715 million of net interest incomeexpense for the yearsyear ended December 31, 2020 and2023, compared to no impact for the year ended December 31, 2019, respectively.2022. Of the $24.9 billion of cash flow swaps, $7.0 billion were un-designated for accounting purposes as of December 31, 2023. Refer to Note 8 to the consolidated financial statements for further discussion of de-designated interest rate hedges.
In addition to interest rate swaps, the Corporation employs various other types of derivative instruments as offsetting positions to mitigate exposures to foreign currency risks associated with specific assets and liabilities (e.g., customer loans or deposits denominated in foreign currencies). Such instruments may include foreign exchange spot and forward contracts as well as foreign exchange swap agreements.
Further information regarding risk management derivative instruments is provided in Note 8 to the consolidated financial statements.
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Customer-Initiated and Other Derivative Instruments
(in millions)
Customer-Initiated and Other Notional Activity
(in millions)
Customer-Initiated and Other Notional Activity
Interest
Rate
Contracts		Energy
Derivative
Contracts		Foreign
Exchange
Contracts		Totals
(in millions)
Customer-Initiated and Other Notional Activity
Interest
Rate
Contracts		Energy
Derivative
Contracts		Foreign
Exchange
Contracts		Totals
Balance at January 1, 2019$14,885 $2,650 $1,095 $18,630 
Balance at January 1, 2022
AdditionsAdditions6,411 2,719 38,805 47,935 
Maturities/amortizationsMaturities/amortizations(2,289)(2,198)(38,887)(43,374)
TerminationsTerminations(1,180)(82)— (1,262)
Balance at December 31, 2019$17,827 $3,089 $1,013 $21,929 
Balance at December 31, 2022
AdditionsAdditions7,660 2,607 37,743 48,010 
Maturities/amortizationsMaturities/amortizations(2,465)(2,484)(36,855)(41,804)
TerminationsTerminations(1,501)(91)— (1,592)
Balance at December 31, 2020$21,521 $3,121 $1,901 $26,543 
Balance at December 31, 2023
The Corporation sells and purchases interest rate caps and floors and enters into foreign exchange contracts, interest rate swaps and energy derivative contracts to accommodate the needs of customers requesting such services. Changes in the fair value of customer-initiated and other derivatives are recognized in earnings as they occur. To limit the market risk of these activities, the Corporation generally takes offsetting positions with dealers. The notional amounts of offsetting positions are included in the table above. Customer-initiated and other notional activity represented 75 percent and 7355 percent of total interest rate, energy and foreign exchange contracts at both December 31, 20202023 and 2019,2022, respectively.
Further information regarding customer-initiated and other derivative instruments is provided in Note 8 to the consolidated financial statements.
Liquidity RiskLIBOR Transition
On July 27, 2017, the United Kingdom’s Financial Conduct Authority (FCA), which regulates LIBOR, publicly announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. Effective March 2021, the FCA confirmed that certain LIBOR tenors would no longer be supported after December 31, 2021 and Off-Balance Sheet Arrangementsthat the remaining tenors, including those most commonly used by the Corporation, would no longer be supported after June 30, 2023. The Corporation had substantial exposure to LIBOR-based products, ceased originating LIBOR-based products in the fourth quarter 2021 and has worked to remediate its outstanding LIBOR contracts. As of December 31, 2023, LIBOR transition was substantially complete.
LiquidityBSBY Cessation
On November 15, 2023, the Bloomberg Index Services Limited (Bloomberg) announced that it will discontinue publishing the BSBY on November 15, 2024; accordingly, the Corporation was required to “de-designate” $7.0 billion of interest rate swaps used in cash flow hedges of certain BSBY-indexed loans and reclassify amounts recognized in accumulated other comprehensive income into earnings. For each de-designated swap, settlement of interest payments and changes in fair value are recorded as risk management hedging losses within other noninterest income instead of net interest income until the swap is re-designated. In January 2024, $4.2 billion of these swaps were re-designated, with the abilityremaining expected to meetbe re-designated in early 2024. The net impact of BSBY cessation to interest income on commercial loans was a $3 million benefit for the year ended December 31, 2023. Additionally, the Corporation recognized a net loss of $91 million in other noninterest income. Refer to Note 8 to the consolidated financial statements for further discussion of de-designated interest rate hedges.
At December 31, 2023, the Corporation had $33.0 billion of exposure to BSBY-based products, including $21.7 billion in loans and $11.3 billion in interest rate swaps. The Corporation is currently evaluating contracts to ensure appropriate fallback language is included, and will remediate contracts as necessary. The Corporation expects that the majority of BSBY-based contracts will organically transition to SOFR over the upcoming year, with any remaining contracts transitioning to SOFR through fallback language at the first repricing date after BSBY cessation occurs in November 2024.
Sources of Liquidity
The Corporation maintains a liquidity position that it believes will adequately satisfy its financial obligations while taking into account potential commitment draws and deposit run-off that may occur in the normal course of business. The majority of the Corporation's balance sheet is funded by customer deposits. Cash flows from loan repayments, increases in deposit accounts (including brokered deposits), activity in the securities portfolio and wholesale funding channels serve as the Corporation's primary liquidity sources.
The Corporation satisfies incremental liquidity needs with either liquid assets or external funding sources. Available liquidity includes cash, FHLB advances and Federal Reserve Bank (FRB) borrowing, comprised of borrowing through the discount window and the newly established Bank Term Funding Program (BTFP). The Corporation has pledged its investment securities portfolio to access wholesale funding as needed and does not intend to sell or restructure securities at this time.
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The Bank is a member of the FHLB of Dallas, Texas, which provides short- and long-term funding to its members through advances collateralized by real estate-related loans, certain government agency-backed securities and other eligible assets. Actual borrowing capacity is contingent on the amount of collateral pledged to the FHLB and the fair value of pledged assets, as well as applicable FHLB haircuts.
At December 31, 2023, the Bank had pledged real estate-related loans totaling $21.9 billion and investment securities totaling $6.6 billion to the FHLB, which provided for up to $17.1 billion of collateralized borrowing with the FHLB.
The FRB provides liquidity through its discount window, where banks may borrow funds based on the discounted fair value of pledged assets. Additionally, in March 2023, the FRB established the BTFP in response to the 2023 industry disruption, offering loans with up to one year in maturity to eligible depository institutions in exchange for pledged collateral in the form of U.S Treasuries, agency debt and mortgage-backed securities and other qualifying assets. Unlike other funding sources, borrowing capacity under the BTFP is based on the par value, not fair value, of collateral.
At December 31, 2023, the Bank had pledged loans totaling $24.6 billion and investment securities totaling $7.7 billion to the FRB, which provided for up to $21.0 billion and $9.3 billion of collateralized borrowing through the discount window and BTFP program, respectively. The Bank did not rely on the BTFP facility as a funding source, except to perform an operational test at the onset, and does not plan to use the facility before its announced expiration on March 11, 2024. Total available collateralized borrowings with the FRB was $30.3 billion at December 31, 2023.
The table below details the Corporation's sources of available liquidity at December 31, 2023.
(dollar amounts in millions)Total CapacityBorrowings OutstandingAvailable Liquidity
Cash on deposit with FRB (a)$7,860 
FHLB$17,081 $7,550 9,531 
FRB:
BTFP9,328 — 9,328 
Discount Window20,953 — 20,953 
Total available liquidity$47,672 
(a) Included in interest-bearing deposits with banks on the Consolidated Balance Sheet.
The Corporation may also use brokered deposits and external debt as additional sources of funding, and maintains a shelf registration statement with the Securities and Exchange Commission through which it may issue securities.The ability of the Corporation and the Bank to raise unsecured funding at competitive rates is impacted by rating agencies' views of the credit quality, liquidity, capital, earnings and other relevant factors related to the Corporation and the Bank. As of December 31, 2023, the three major rating agencies had assigned the following ratings to long-term senior unsecured obligations of the Corporation and the Bank, as well as long-term deposits at the Bank. A security rating is not a recommendation to buy, sell, or salehold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of existing assetsany other rating.
Debt RatingsDeposit Ratings
Comerica IncorporatedComerica BankComerica Bank
December 31, 2023RatingRatingOutlookRating
Moody’s Investors ServiceBaa1Baa1NegativeA1
Fitch RatingsA-A-NegativeA
Standard and Poor’sBBBBBB+Stablenot rated
Deposit Concentrations and Uninsured Deposits
The Corporation's focus is commercial customers, and accordingly, it has a larger percentage of uninsured deposits relative to financial institutions with a higher consumer focus. These deposits are well-diversified between geographies, industries and customers. At December 31, 2023, the Retail Bank and general Middle Market segments, both highly diversified and granular, accounted for 37% and 27% of the total deposit base, respectively.
Uninsured deposits are defined as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit and amounts in any other uninsured investment or the acquisitiondeposit account that are classified as deposits and are not subject to any federal or state deposit insurance regimes.
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December 31, 2023December 31, 2022
(Dollar amount in millions)AmountPercentage of total depositsAmountPercentage of total deposits
Total uninsured deposits, as calculated per regulatory guidelines$31,485 47 %$45,492 64 %
Less: affiliate deposits(4,064)(4,458)
Total uninsured deposits, excluding affiliate deposits$27,421 41 %$41,034 57 %
Time deposits otherwise uninsured, which consist of foreign office time deposits, totaled $13 million at December 31, 2023 and all mature in three months or less. Collateralized deposits, consisting of trust deposits as well as deposits of public entities and state and local government agencies, totaled $687 million at December 31, 2023, compared to $843 million at December 31, 2022.
Potential Uses of Liquidity
Various financial obligations includingsuch as contractual obligations, unfunded commitments and commercial commitments,deposit withdrawals may require future cash payments by the Corporation. Certain obligations are recognized on the Consolidated Balance Sheets, while others are off-balance sheet under U.S. generally accepted accounting principles.
The following contractual obligations table summarizes the Corporation's material noncancelable contractual obligations and future required minimum payments. Refer to Notes 9, 10, 11, 12, 18 and 2625 to the consolidated financial statements for further information regarding these contractual obligations.
Selected Contractual Obligations
Minimum Payments Due by Period
(in millions)
December 31, 2020
TotalLess than
1 Year		1-3
Years		4-5
Years		More than
5 Years
Minimum Payments Due by PeriodMinimum Payments Due by Period
(in millions)
December 31, 2023
(in millions)
December 31, 2023
TotalLess than
1 Year		1-3
Years		4-5
Years		More than
5 Years
Deposits without a stated maturity (a)Deposits without a stated maturity (a)$70,670 $70,670 
Certificates of deposit and other deposits with a stated maturity (a)Certificates of deposit and other deposits with a stated maturity (a)2,199 1,823 $322 $32 $22 
Certificates of deposit and other deposits with a stated maturity (a)
Certificates of deposit and other deposits with a stated maturity (a)
Short-term borrowings (a)
Medium- and long-term debt (a)Medium- and long-term debt (a)5,450 — 850 850 3,750 
Operating leasesOperating leases403 60 108 86 149 
Commitments to fund low income housing partnershipsCommitments to fund low income housing partnerships165 107 44 6 8 
Other long-term obligations (b)Other long-term obligations (b)325 103 75 26 121 
Other long-term obligations (b)
Other long-term obligations (b)
Total contractual obligationsTotal contractual obligations$79,212 $72,763 $1,399 $1,000 $4,050 
Medium- and long-term debt (parent company only) (a) (c)$1,650 $— $850 $— $800 
Total contractual obligations
Total contractual obligations
Medium- and long-term debt (parent company only) (a) (b)
(a)Deposits and borrowings exclude accrued interest.
(b)Includes unrecognized tax benefits.
(c)Parent company only amounts are included in the medium- and long-term debt minimum payments above.
In addition to contractual obligations, other commercial commitments of the Corporation impact liquidity. These include unused commitments to extend credit, standby letters of credit and financial guarantees, and commercial letters of credit. The following table summarizes the Corporation's commercial commitments and expected expiration dates by period.
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Commercial Commitments
Expected Expiration Dates by PeriodExpected Expiration Dates by Period
(in millions)
December 31, 2023
(in millions)
December 31, 2023
TotalLess than
1 Year		1-3
Years		4-5
Years		More than
5 Years
Expected Expiration Dates by Period
(in millions)
December 31, 2020
TotalLess than
1 Year		1-3
Years		4-5
Years		More than
5 Years
Unused commitments to extend credit
Unused commitments to extend credit
Unused commitments to extend creditUnused commitments to extend credit$26,740 $7,683 $10,817 $5,264 $2,976 
Standby letters of credit and financial guaranteesStandby letters of credit and financial guarantees3,273 2,855 296 52 70 
Commercial letters of creditCommercial letters of credit30 29 1 — — 
Total commercial commitmentsTotal commercial commitments$30,043 $10,567 $11,114 $5,316 $3,046 
Since many of these commitments expire without being fully drawn, upon, and each customer must continue to meet the conditions established in the contract, the total amount of these commercial commitments does not necessarily represent the future cash requirements of the Corporation. Refer to the “Other Market Risks” section below and Note 8 to the consolidated financial statements for a further discussion of these commercial commitments.
Wholesale Funding
The Corporation may access the purchased funds market when necessary, which includes a variety of funding sources. Capacity for incremental purchased funds at December 31, 2020 included short-term FHLB advances, the ability to purchase federal funds, sell securities under agreements to repurchase, as well as issue deposits through brokers. Purchased funds, which includes brokered deposits and short-term borrowings, decreased to $66 million at December 31, 2020, compared to $295 million at December 31, 2019, as total deposits increased, reducing the need for additional funding sources.
At December 31, 2020, the Bank had pledged loans totaling $18.0 billion which provided for up to $14.2 billion of available collateralized borrowing with the FRB.
The Bank is a member of the FHLB of Dallas, Texas, which provides short- and long-term funding to its members through advances collateralized by real estate-related assets. Actual borrowing capacity is contingent on the amount of collateral available to be pledged to the FHLB. At December 31, 2020, $19.5 billion of real estate-related loans and $4.4 billion of investment securities were pledged to the FHLB as collateral for current and potential future borrowings. The Corporation used excess liquidity to repay $2.8 billion of FHLB advances in the first quarter of 2021. Potential future borrowing capacity of approximately $12.0 billion is available at December 31, 2020.
Additionally, the Bank had the ability to issue up to $13.5 billion of debt at December 31, 2020 under an existing $15.0 billion note program which allows the issuance of debt with maturities between three months and 30 years. The Corporation also maintains a shelf registration statement with the Securities and Exchange Commission from which it may issue debt and equity securities.
The ability of the Corporation and the Bank to raise funds at competitive rates is impacted by rating agencies' views of the credit quality, liquidity, capital and earnings of the Corporation and the Bank. As of December 31, 2020, the three major rating agencies had assigned the following ratings to long-term senior unsecured obligations of the Corporation and the Bank. A security rating is not a recommendation to buy, sell, or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating.
Comerica IncorporatedComerica Bank
December 31, 2020RatingOutlookRatingOutlook
Standard and Poor’sBBB+NegativeA-Negative
Moody’s Investors ServiceA3StableA3Stable
Fitch RatingsA-StableA-Stable
The Corporation satisfies liquidity needs with either liquid assets or various funding sources. Liquid assets totaled $25.9 billion at December 31, 2020, compared to $17.9 billion at December 31, 2019. Liquid assets include cash and due from banks, federal funds sold, interest-bearing deposits with banks, other short-term investments and unencumbered investment securities.
The Corporation performs monthly liquidity stress testing to evaluate its ability to meet funding needs in hypothetical stressed environments. Such environments cover a series of broad events, distinguished in terms of duration and severity. The evaluation as of December 31, 2020 projected that sufficient sources of liquidity were available under each series of events.
Other Market Risks
Market risk related to the Corporation's trading instruments is not significant, as trading activities are limited. Certain components of the Corporation's noninterest income, primarily fiduciary income, are at risk to fluctuations in the market values of underlying assets, particularly equity and debt securities. Other components of noninterest income, primarily brokerage fees, are at risk to changes in the volume of market activity.
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Operational Risk
Operational risk represents the risk of loss resulting from inadequate or failed internal processes and people, or from external events, excluding in most cases those driven by technology (see Technology Risk below). The Corporation's definition of operational risk includes fraud; employment practice and workplace safety; clients, products and business practice; business continuity or disaster recovery; execution, delivery, and process management; third party and model risks. The definition does not include strategic or reputational risks. Although operational losses are experienced by all companies and are routinely incurred in business operations, the Corporation recognizes the need to identify and control operational losses and seeks to limit losses to a level deemed appropriate by management, as outlined in the Corporation’s risk appetite statement. The appropriate risk level is determined through consideration of the nature of the Corporation's business and the environment in which it operates, in combination with the impact from, and the possible impact on, other risks faced by the Corporation. Operational risk is mitigated through a system of internal controls that are designed to keep operating risks at appropriate levels. The Operational Risk Management Committee monitors risk management techniques and systems. The Corporation has developed a framework that includes a centralized operational risk reporting function in the Enterprise Risk Division and business/support unit risk liaisons responsible for managing operational risk specific to the respective business lines.
Technology Risk
Technology risk represents the risk of loss or adverse outcomes arising from the people, processes, applications and infrastructure that support the technology environment. The Corporation's definition of technology risk includes technology delivery risk, technology investment risk, cybersecurity risk, information security risk and information management risk. Technology risk is inclusive of the risks associated with the execution of technology processes and activities by third-party contractors and suppliers to the Corporation. Other risk types may materialize in the event of a technology risk event, such as the risk of a financial reporting error or regulatory non-compliance, and the impact of such risks are highly interdependent with operational risk.
The Technology Risk Management Committee, comprising senior and executive business unit managers, as well as managers responsible for technology, cybersecurity, information security and enterprise risk management, oversees technology risk. The Technology Risk Management Committee also ensures that appropriate actions are implemented in business units to mitigate risk to an acceptable level.
Compliance Risk
Compliance risk represents the risk of sanctions or financial loss resulting from the Corporation's failure to comply with all applicable laws, regulations and standards of good banking practice. The impact of such risks is highly interdependent with strategic risk, as the reputational impact from compliance breaches can be severe. Activities which may expose the Corporation to compliance risk include, but are not limited to, those dealing with the prevention of money laundering, privacy and data protection, community reinvestment initiatives, fair lending, consumer protection, employment and tax matters, over-the-counter derivative activities and other regulated activities.
The Enterprise-Wide Compliance Committee, comprising senior and executive business unit managers, as well as managers responsible for compliance, audit and overall risk, oversees compliance risk. This enterprise-wide approach provides a consistent view of compliance across the organization. The Enterprise-Wide Compliance Committee also ensures that appropriate actions are implemented in business units to mitigate risk to an acceptable level.
Strategic Risk
Strategic risk represents the risk of inadequate returns or possible losses due to impairment of reputation, failure to fully develop and execute business plans, failure to assess current and new opportunities in business, markets and products, failure to determine appropriate consideration for risks accepted, and any other event not identified in the defined risk categories of credit, market and liquidity, operational, technology or compliance risks. Mitigation of the various risk elements that represent strategic risk is achieved through numerous metrics and initiatives to help the Corporation better understand, measure and report on such risks. The Executive Strategic and Pricing Committee, comprised of senior managers, oversees strategic risk and ensures that strategic risk is mitigated to appropriate levels.risks.
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CRITICAL ACCOUNTING POLICIESESTIMATES
The Corporation’s consolidated financial statements are prepared based on the application of accounting policies, the most significant of which are described in Note 1. These policies require numerous estimates and strategic or economic assumptions, which may prove inaccurate or subject to variations. Changes in underlying factors, assumptions or estimates could have a material impact on the Corporation’s future financial condition and results of operations. At December 31, 2020,2023, the most critical of these significant accounting policies were the policiesestimates related to the allowance for credit losses, fair value measurement, goodwill, pension plan accounting and income taxes. These policiesestimates were reviewed with the Audit Committee of the Corporation’s Board of Directors and are discussed more fully below.
ALLOWANCE FOR CREDIT LOSSES
In accordance with CECL, the allowance for credit losses, which includes both the allowance for loan losses and the allowance for credit losses on lending-related commitments, is calculated with the objective of maintaining a reserve for current expected credit losses over the remaining contractual life of the portfolio. The Corporation uses loss factors, based on estimated probability of default for internal risk ratings and loss given default, to determine the allowance for credit losses for the majority of its portfolio. Management applies loss factors to pools of loans and lending-related commitments with similar risk characteristics, calibrates these factors using economic forecasts and incorporates qualitative adjustments. For further discussion of the methodology used in the determination of the allowance for credit losses, refer to Note 1 to the consolidated financial statements. For further discussion on the economic forecast incorporated into the 20202023 model, refer to the “Risk Management” section of this financial review.
Management's determination of the appropriateness of the allowance is based on periodic evaluations of the loan portfolio, lending-related commitments, current as well as forecasted economic factors and other relevant information. The calculation is inherently subjective and requires management to exercise significant judgment in developing assumptions for the estimate, the most significant of which are the loan risk rating process, development of economic forecasts and application of qualitative adjustments. Sensitivities are disclosed to demonstrate how changes in loan risk ratings and economic forecast scenarios may impact the allowance for credit losses. Sensitivities only consider changes to each specific assumption in isolation and their impact to the quantitative modeled results. They do not contemplate impacts to the qualitative framework.
Loan Risk Rating Process
Reserve factors are applied to pools of loans based on risk characteristics, including the Corporation's internal risk rating system; therefore, loss estimates are highly dependent on the accuracy of the risk rating assigned to each loan. The inherent imprecision in the risk rating system resulting from inaccuracy in assigning and/or entering risk ratings in the loan accounting system is monitored by the Corporation's asset quality review function. Changes to internal risk ratings, beyond the forecasted migration inherent in the credit models, would result in a different estimated allowance for credit losses. To illustrate, if 5 percent of the individual risk ratings were adjusted down by one rating across all pools, the allowance for loan losses as of December 31, 20202023 would change by approximately $9$6 million.
Forecasted Economic Variables
Management selectsutilizes models through which historical reserve factor estimates are calibrated to economic forecasts over the reasonable and supportable forecast period based on the projected performance of specific economic variables that statistically correlate with the probability of default and loss given default pools. Loss estimates revert to historical loss experience for contractual lives beyond the forecast period. Management selects economic variables it believes to be most relevant based on the composition of the loan portfolio and customer base, including forecasted levels of employment, gross domestic product, corporate bond and treasury spreads, industrial production levels, consumer and commercial real estate price indices as well as housing statistics.
The allowance for credit losses is highly sensitive to the economic forecasts used to develop the estimate. Due to the high level of uncertainty regarding significant assumptions, such as the ultimate impact of the global pandemic and effectiveness of government stimulus programs, the Corporation evaluated a range of economic scenarios, including a more severe economic forecast scenario, with varying speeds of recovery.responses to current economic risks. The following table summarizes the more severe forecast scenario for the economic variables that are most impactful.


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Economic VariableMore Severe Forecast
Real GDP growthContracts through third quarter 2021, including2024, peaking at a 5decline of 3.5 percent declineannualized in the firstsecond quarter 2021, followed by a gradual improvement2024, subsequently improving to a 2.2 percent annual growth rate above 4 percent by the end of the forecast period.
Unemployment rateCurrent levels increaseIncreases to near 107.7 percent in the second half of 2021, gradually loweringby first quarter 2025 followed by a gradual decline to below 96.9 percent by the end of the forecast period.
Corporate BBB bond to 10-year Treasury bond spreadsSpreads widen above 2.5to a peak of over 4.2 percent inbefore gradually narrowing to 2.3 percent by the near term, gradually normalizing to 2 percent or lower in 2022.end of the forecast period.
Oil PricesDecline below $25 per barrel part-way through the forecast period before improving to over $30$53 per barrel by fourthfirst quarter 2022.2025 before increasing to $61 per barrel by the end of the forecast period.
SelectingSelecting a different forecast in the current environment could result in a significantly different estimated allowance for credit losses. To illustrate, absent model overlays and other qualitative adjustments that are part of the quarterly reserving process, if the Corporation selected the more severe scenario to inform its models, the allowance for credit losses as of December 31, 20202023 would increase by approximately $515$376 million. However, factoring in model overlays and qualitative adjustments could result in a materially different estimate under a more severe scenario.
Qualitative Adjustments and Model Overlays
The Corporation includes qualitative adjustments, as appropriate, intended to capture the impact of uncertainties not reflected in the quantitative estimate, including foresight risk, model imprecisions and input imprecisions. Qualitative adjustments for foresight risk reflect the inherent imprecision in economic forecasts and may be included based on management’s evaluation of different forecast scenarios, ranging from more benign to more severe, and known recent events impacting the Corporation’s portfolio. Model imprecision adjustments and model overlays may be included to mitigate known limitations in the quantitative models. Input imprecision includes adjustments for portfolios where recent historical losses exceed expected losses or known recent events are expected to alter risk ratings once evidence is acquired, as well as a qualitative assessment of the lending environment, including underwriting standards, current economic and political conditions, and other factors affecting credit quality. Qualitative reserves at December 31, 20202023 primarily included adjustments for uncertainties related to forecasted economic variables.
Other Considerations
To the extent actual outcomes differ from management estimates, additional provision for credit losses may be required that would adversely impact earnings in future periods. The allowance is assigned to business segments, and any earnings impact resulting from actual outcomes differing from management estimates would primarily affect the Commercial Bank segment.
FAIR VALUE MEASUREMENT
Investment securities available-for-sale, derivatives and deferred compensation plan assets and associated liabilities are recorded at fair value on a recurring basis. Additionally, from time to time, other assets and liabilities may be recorded at fair value on a nonrecurring basis, such as impaired loans that have been reducedmeasured based on the fair value of the underlying collateral, loans held-for-sale recorded at the lower of cost or market, other real estate (primarily foreclosed property), nonmarketable equity securities and certain other assets and liabilities. These nonrecurringNonrecurring fair value adjustments typically involve write-downs of individual assets or application of lower of cost or fair value accounting.
Fair value is an estimate of the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (i.e., not a forced transaction, such as a liquidation or distressed sale) between market participants at the measurement date and is based on the assumptions market participants would use when pricing an asset or liability. Fair value measurement and disclosure guidance establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. Notes 1 and 2 to the consolidated financial statements include information about the fair value hierarchy, the extent to which fair value is used to measure assets and liabilities, as well as the valuation methodologies and key inputs used.
At December 31, 2020,2023, assets and liabilities measured using observable inputs that are classified as Level 1 or Level 2 represented 98.8 percent and 100 percentsubstantially all of total assets and liabilities recorded at fair value, respectively. Valuations generated from model-based techniques that use at least one significant assumption not observable in the market are considered Level 3 and reflect estimates of assumptions market participants would use in pricing the asset or liability. The valuation of Level 3 assets and liabilities are considered critical accounting estimates.
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GOODWILL
GOODWILL
Goodwill is initially recorded as the excess of the purchase price over the fair value of the net assets acquired in a business combination and is subsequently evaluated at least annually for impairment. Goodwill impairment testing is performed at the reporting unit level, equivalent to a business segment or one level below. The Corporation has three reporting units: the Commercial Bank, the Retail Bank, and Wealth Management. At December 31, 2020,2023 and 2022, goodwill totaled $635 million, including $473 million allocated to the Commercial Bank, $101 million allocated to the Retail Bank, and $61 million allocated to Wealth Management.
The Corporation performs its annual evaluation of goodwill impairment in the third quarter of each year and may elect to perform a quantitative impairment analysis or first conduct a qualitative analysis to determine if a quantitative analysis is necessary. Additionally, the Corporation evaluates goodwill impairment on an interim basis if events or changes in circumstances between annual tests indicate additional testing may be warranted to determine if goodwill might be impaired.
InDuring the first quarter 2020, economic conditions deteriorated significantly with the spread of the coronavirus global pandemic. The outbreak resulted in social distancing requirements throughout the world, severely restricting the economy. In response to the crisis, the Federal Reserve lowered the Federal Funds rate in March 2020 to close to zero. Additionally, the U.S. government initiated numerous measures to support the economy, including the CARES Act. Given the economic deterioration in the firstthird quarter of 2020,2023, the Corporation assessed whether the events and circumstances resulted in it being more likely than not that the fair value of any reporting unit was less than its carrying value. Impairment indicators considered comprised economic conditions, including projections of the duration of current conditions and timing of a potential recovery; industry and market considerations; government intervention and regulatory updates; the impact of recent eventselected to financial performance and cost factors of the reporting units; performance of the Corporation’s stock and other relevant events. The Corporation further considered the amount by which fair value exceeded book value for each unit in the most recent quantitative analysis and sensitivities performed. At the conclusion of the first quarter 2020 assessment, the Corporation determined that it was more likely than not that the fair value of each reporting unit exceeded its carrying value.
In second quarter 2020, the Corporation performedperform a quantitative goodwill impairment test in response to continued macroeconomic deterioration and the ongoing impacts to the banking industry and markets in which the Corporation operates.analysis. The estimated fair values of the reporting units were determined using a blend of two commonly used valuation techniques: the market approach and the income approach. For the market approach, valuations of reporting units considered a combination of earnings and equity multiples from companies with characteristics similar to eachthe reporting unit. Since the fair values determined under the market approach are representative of noncontrolling interests, the valuations incorporated a control premium. For the income approach, estimated future cash flows were derived from internal forecasts and economic expectations for each reporting unit. In the short- and mid-term, forecasts incorporated current economic conditions and ongoing impacts of expected monetary policy decisions by the global pandemic, including a federal funds target near zero and an elevated allowance for credit losses.Federal Reserve Bank. Long-term projections reflected normalized rate and credit environments, as well as a long-term rate of return for each reporting unit. Projections were discounted using an applicable discount rate to calculate the fair value. The discount rate was based on the imputed cost of equity capital appropriate for each reporting unit, which incorporatedincorporates the risk-free rate of return, the level of non-diversified risk associated with companies with characteristics similar to the reporting unit, a sizemarket equity risk premium, potential stock volatility, and a market equitysize risk premium. The discount rate further reflected the uncertainty of current economic conditions and potential impacts to the forecasted financial information.
The combined fair value of all units was compared to the Corporation’sCorporation's market capitalization for reasonableness. At the conclusion of the quantitative impairment test in secondthe third quarter 2020,2023, the estimated fair values of all reporting units substantially exceeded their carrying amounts, including goodwill.
The annual goodwill impairment test was performed as of the beginning of third quarter 2020. The Corporation assessed qualitative factorsperformed a hypothetical sensitivity analysis to determine whether it was more likely than not thatevaluate the impact to the estimated fair value of anyeach reporting unit was less than its carrying amount, including goodwill. Qualitative factors included economic conditions, industry and market considerations, cost factors, overall financial performance, regulatory developments and performance offrom an adverse change in the Corporation’s stock, among other events and circumstances. Atdiscount rate. A 100 basis point increase in the conclusion of the qualitative assessmentdiscount rate would result in third quarter 2020, the Corporation determined that it was more likely than not that the fair value of each reporting unit exceededto continue to substantially exceed its carrying value.
AnalyzingThe Corporation continues to monitor economic conditions that could significantly impact the impairment analysis and result in future goodwill includes considerationimpairment charges that, if incurred, could have a material adverse effect on the Corporation's results of various factors that continue to rapidly evolve and for which significant uncertainty remains, including the impact of the coronavirus global pandemic to the economy and ongoing government intervention to mitigate that impact. Further weakeningoperations in the economic environment,period such as continued decline in the performance of the reporting units or other factors, could cause the fair value of one or more of the reporting units to fall below their carrying value, resulting in a goodwill impairment charge.charges are recognized. Additionally, any new legislative or regulatory changes not anticipated in management's expectations may cause the fair value of one or more of the reporting units to fall below the carrying value, resulting in a goodwill impairment charge. Any impairment charge would not affect the Corporation's regulatory capital ratios, tangible common equity ratio or liquidity position.

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PENSION PLAN ACCOUNTING
The Corporation has a qualified and a non-qualified defined benefit pension plan. Effective January 1, 2017, benefits are calculated using a cash balance formula based on years of service, age, compensation and an interest credit based on the 30-year Treasury rate. Participants under age 60 as of December 31, 2016 are eligible to receive a frozen final average pay benefit in addition to amounts earned under the cash balance formula. Participants age 60 or older as of December 31, 2016 continue to be eligible for a final average pay benefit. The Corporation makes assumptions concerning future events that will determine the amount and timing of required benefit payments, funding requirements and defined benefit pension expense. The major assumptions are the discount rate used in determining the current benefit obligation, the long-term rate of return expected on plan assets, mix of assets within the portfolio and the projected mortality rate.
The discount rate is determined by matching the expected cash flows of the pension plans to a portfolio of high quality corporate bonds as of the measurement date, December 31. The long-term rate of return expected on plan assets is set after considering both long-term returns in the general market and long-term returns experienced by the assets in the plan. The current target asset allocation model for the plans is provided in Note 17 to the consolidated financial statements. The expected returns on these various asset categories are blended to derive one long-term return assumption. The assets are primarily invested in certain collective investment funds, common stocks, U.S. Treasury and other U.S. government agency securities, as well as corporate and municipal bonds and notes. Mortality rate assumptions are based on mortality tables published by third-partiesthird
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parties such as the Society of Actuaries, considering other available information including historical data as well as studies and publications from reputable sources.
The Corporation reviews its pension plan assumptions on an annual basis with its actuarial consultants to determine if the assumptions are reasonable and adjusts the assumptions to reflect changes in future expectations. The major assumptions used to calculate 20212024 and 2023 defined benefit plan pension expense (benefit) were as follows:
Discount rate2.71 %
Long-term rate of return on plan assets6.50 %
Mortality table:
Base table (a)Pri-2012
Mortality improvement scale (a)MP-2020
2024 2023 
Discount rate5.33 %5.60 %
Long-term rate of return on plan assets6.75 %6.50 %
Mortality table:
Base table (a)Pri-2012Pri-2012
Mortality improvement scale (a)MP-2020MP-2020
(a)Issued by the Society of Actuaries
Defined benefit plan benefit is expected to increase $37$19 million to approximately $61$45 million in 2021,2024, compared to a benefit of $24$26 million in 2020.2023. This includes service cost expense of $41$37 million and a benefit from other components of $102$82 million. Service costs are included in salaries and benefits expense, while the benefit from other components are included in other noninterest expenses on the Consolidated Statements of Income.
Changing the 2021The Corporation’s pension plan is most sensitive to changes in discount rate and long-term rate of return. A change to the discount rate implies a corresponding change in interest rates that affect the value of the plan’s fixed income assets. An increase of 25 basis points to the discount rate, including the effect of higher interest rates on the plan’s fixed income assets, would result in a net increase to pension expense of $6 million, while a decrease of 25 basis points would reduce pension expense by $6 million. Increasing the long-term rate of return by 25 basis points would impact defined benefitreduce pension expense in 2021 by $8 million and $7 million, respectively.while a decrease of 25 basis points would increase pension expense by $7 million.
Due to the long-term nature of pension plan assumptions, actual results may differ significantly from the actuarial-based estimates. Differences resulting in actuarial gains or losses are required to be recorded in shareholders' equity as part of accumulated other comprehensive loss and amortized to defined benefit pension expense in future years. Refer to Note 17 to the consolidated financial statements for further information.
INCOME TAXES
The calculation of the Corporation's income tax provision and tax-related accruals is complex and requires the use of estimates and judgments. The provision for income taxes is the sum of income taxes due for the current year and deferred taxes. Deferred taxes arise from temporary differences between the income tax basis and financial accounting basis of assets and liabilities. Accrued taxes represent the net estimated amount due to or to be received from taxing jurisdictions, currently or in the future, and are included in accrued income and other assets or accrued expenses and other liabilities on the Consolidated Balance Sheets. The Corporation assesses the relative risks and merits of tax positions for various transactions after considering statutes, regulations, judicial precedent and other available information and maintains tax accruals consistent with these assessments. The Corporation is subject to audit by taxing authorities that could question and/or challenge the tax positions taken by the Corporation.
Included in net deferred taxes are deferred tax assets. Deferred tax assets are evaluated for realization based on available evidence of projected future reversals of existing taxable temporary differences, assumptions made regarding future events and, when applicable, state loss carryback capacity. A valuation allowance is provided when it is more-likely-than-not that some portion of the deferred tax asset will not be realized. Determining whether deferred tax assets are realizable is subjective and requires the use of significant judgment.
The Corporation assesses the relative risks and merits of tax positions for various transactions after considering statutes, regulations, judicial precedent and other available information and maintains tax accruals consistent with these assessments. This assessment is complex and requires judgment. The Corporation is subject to audit by taxing authorities that could question and/or challenge the tax positions taken by the Corporation. Changes in the estimate of accrued taxes occur due to changes in tax law, interpretations of existing tax laws, new judicial or regulatory guidance, and the status of examinations conducted by taxing authorities that impact the relative risks and merits of tax positions taken by the Corporation. These changes, when they occur, impact the estimate of accrued taxes and
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could be significant to the operating results of the Corporation. For further information on tax accruals and related risks, see Note 18 to the consolidated financial statements.

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SUPPLEMENTAL FINANCIAL DATA
The Corporation believes non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate the adequacy of common equity and our performance trends. Tangible common equity is used by the Corporation to measure the quality of capital and the return relative to balance sheet risk.
Common equity tier 1 capital ratio removes preferred stock from the Tier 1 capital ratio as defined by and calculated in conformity with bank regulations. The tangible common equity ratio removes the effect of intangible assets from capital and total assets. Tangible common equity per share of common stock removes the effect of intangible assets from common shareholders' equity per share of common stock.

The following table provides a reconciliation of non-GAAP financial measures and regulatory ratios used in this financial review with financial measures defined by GAAP.

(dollar amounts in millions)20202019201820172016
Common Equity Tier 1 Capital (a):
Tier 1 capital$7,313 $6,919 $7,470 $7,773 $7,540 
Less:
Fixed-rate reset non-cumulative perpetual preferred stock394 — — — — 
Common equity tier 1 capital$6,919 $6,919 $7,470 $7,773 $7,540 
Risk-weighted assets$66,931 $68,273 $67,047 $66,575 $67,966 
Tier 1 capital ratio10.93 %10.13 %11.14 %11.68 %11.09 %
Common equity tier 1 capital ratio10.34 10.13 11.14 11.68 11.09 
Tangible Common Equity Ratio:
Total shareholders' equity$8,050 $7,327 $7,507 $7,963 $7,796 
Less:
Fixed-rate reset non-cumulative perpetual preferred stock394 — — — — 
Common shareholders' equity$7,656 $7,327 $7,507 $7,963 $7,796 
Less:
Goodwill635 635 635 635 635 
Other intangible assets1 4 6 8 10 
Tangible common equity$7,020 $6,688 $6,866 $7,320 $7,151 
Total assets$88,129 $73,402 $70,818 $71,567 $72,978 
Less:
Goodwill635 635 635 635 635 
Other intangible assets1 4 6 8 10 
Tangible assets$87,493 $72,763 $70,177 $70,924 $72,333 
Common equity ratio8.69 %9.98 %10.60 %11.13 %10.68 %
Tangible common equity ratio8.02 9.19 9.78 10.32 9.89 
Tangible Common Equity per Share of Common Stock:
Common shareholders' equity$7,656 $7,327 $7,507 $7,963 $7,796 
Tangible common equity7,020 6,688 6,866 7,320 7,151 
Shares of common stock outstanding (in millions)139 142 160 173 175 
Common shareholders' equity per share of common stock$55.01 $51.57 $46.89 $46.07 $44.47 
Tangible common equity per share of common stock50.43 47.07 42.89 42.34 40.79 
(a) December 31, 2020 tier 1 capital reflects the deferral of CECL model impact as defined by regulation.





(dollar amounts in millions)
December 3120232022
Common Equity Tier 1 Capital:
Tier 1 capital$8,808 $8,278 
Less:
Fixed-rate reset non-cumulative perpetual preferred stock394 394 
Common equity tier 1 capital$8,414 $7,884 
Risk-weighted assets$75,901 $78,871 
Tier 1 capital ratio11.60 %10.50 %
Common equity tier 1 capital ratio11.09 10.00 
Tangible Common Equity Ratio:
Total shareholders' equity$6,406 $5,181 
Less:
Fixed-rate reset non-cumulative perpetual preferred stock394 394 
Common shareholders' equity$6,012 $4,787 
Less:
Goodwill635 635 
Other intangible assets8 9 
Tangible common equity$5,369 $4,143 
Total assets$85,834 $85,406 
Less:
Goodwill635 635 
Other intangible assets8 9 
Tangible assets$85,191 $84,762 
Common equity ratio7.00 %5.60 %
Tangible common equity ratio6.30 4.89 
Tangible Common Equity per Share of Common Stock:
Common shareholders' equity$6,012 $4,787 
Tangible common equity5,369 4,143 
Shares of common stock outstanding (in millions)132 131 
Common shareholders' equity per share of common stock$45.58 $36.55 
Tangible common equity per share of common stock40.70 31.62 

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FORWARD-LOOKING STATEMENTS
This report includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. In addition, the Corporation may make other written and oral communications from time to time that contain such statements. All statements regarding the Corporation's expected financial position, strategies and growth prospects as well as general economic conditions expected to exist in the future are 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 the Corporation or its management, are intended to identify forward-looking statements. The Corporation 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 the Corporation 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.
In addition to factors mentioned elsewhere in this report or previously disclosed in the Corporation's SEC reports (accessible on the SEC's website at www.sec.gov or on the Corporation's website at www.comerica.com), actual results could differ materially from forward-looking statements and future results could differ materially from historical performance due to a variety of reasons, including but not limited to, the following factors:
•changes in customer behavior may adversely impact the Corporation's business, financial condition and results of operations;
•unfavorable developments concerning credit quality could adversely affect the Corporation's financial results;
•declines in the businesses or industries of the Corporation's customers could cause increased credit losses or decreased loan balances, which could adversely affect the Corporation, particularly the energy industry;
•changes in customer behavior may adversely impact the Corporation's business, financial condition and results of operations;Corporation;
•governmental monetary and fiscal policies may adversely affect the financial services industry, and therefore impact the Corporation's financial condition and results of operations;
•fluctuations in interest rates and their impact on deposit pricing could adversely affect the Corporation's net interest income and balance sheet;
•developments impacting LIBOR and other interest rate benchmarksthe Corporation's transition away from the Bloomberg Short-Term Bank Yield Index could adversely affect the Corporation;its financial results;
•the Corporation must maintain adequate sources of funding and liquidity to meet regulatory expectations, support its operations and fund outstanding liabilities;
•reduction in the Corporation's credit ratings could adversely affect the Corporation and/or the holders of its securities;
•the soundness of other financial institutions could adversely affect the Corporation;
•security risks, including denial of service attacks, hacking, social engineering attacks targeting the Corporation’s colleagues and customers, malware intrusion or data corruption attempts, and identity theft, could result in the disclosure of confidential information;information, adversely affect its business or reputation, and create significant legal and financial exposure;
•cybersecurity and data privacy are areas of heightened legislative and regulatory focus;
•the Corporation’s operational or security systems or infrastructure, or those of third parties, could fail or be breached;breached, , which could disrupt Comerica’s business and adversely impact the Corporation’s results of operations, liquidity and financial condition, as well as cause legal or reputational harm;
•the Corporation relies on other companies to provide certain key components of its delivery systems, and certain failures could materially adversely affect operations;
•legal and regulatory proceedings and related financial services industry matters, including those directly involving the Corporation and its subsidiaries, could adversely affect the Corporation or the financial services industry in general;
•the Corporation may incur losses due to fraud;
•controls and procedures may fail to prevent or detect all errors or acts of fraud;
•changes in regulation or oversight, or changes in Comerica’s status with respect to existing regulations or oversight, may have a material adverse impact on the Corporation's operations;
•compliance with more stringent capital requirements may adversely affect the Corporation;
•the impacts of future legislative,changes to tax law or regulations, or changes to administrative or judicial changesinterpretations of tax law or interpretations to tax regulations, are unknown;could adversely affect the Corporation;
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•damage to the Corporation’s reputation could damage its businesses;
•the Corporation may not be able to utilize technology to develop, market and deliver new products and services to its customers;
•competitive product and pricing pressures within the Corporation's markets may change;
•the introduction, implementation, withdrawal, success and timing of business initiatives and strategies may be less successful or may be different than anticipated, which could adversely affect the Corporation's business;
•management's ability to maintain and expand customer relationships may differ from expectations;
•management's ability to retain key officers and employees may change;
•any future strategic acquisitions or divestitures may present certain risks to the Corporation's business and operations;
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•impacts from the COVID-19 global pandemic;
•general political, economic or industry conditions, either domestically or internationally, may be less favorable than expected;
•inflation could negatively impact the Corporation's business, profitability and stock price;
•methods of reducing risk exposures might not be effective;
•catastrophic events, including pandemics, may adversely affect the general economy, financial and capital markets, specific industries, and the Corporation;
•climate change manifesting as physical or transition risks could adversely affect the Corporation's operations, businesses and customers;
•changes in accounting standards could materially impact the Corporation's financial statements;
•the Corporation's accounting policies and processes are critical to the reporting of financial condition and results of operations and require management to make estimates about matters that are uncertain; and
•the Corporation's stock price can be volatile.volatile; and
•an investment in the Corporations' equity securities is not insured or guaranteed by the FDIC.
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CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
(in millions, except share data)(in millions, except share data)
December 31December 3120202019
December 31
December 3120232022
ASSETS
ASSETS
ASSETSASSETS
Cash and due from banksCash and due from banks$1,031 $973 
Cash and due from banks
Cash and due from banks
Interest-bearing deposits with banksInterest-bearing deposits with banks14,736 4,845 
Other short-term investmentsOther short-term investments172 155 
Investment securities available-for-saleInvestment securities available-for-sale15,028 12,398 
Commercial loansCommercial loans32,753 31,473 
Real estate construction loansReal estate construction loans4,082 3,455 
Commercial mortgage loansCommercial mortgage loans9,912 9,559 
Lease financingLease financing594 588 
International loansInternational loans926 1,009 
Residential mortgage loansResidential mortgage loans1,830 1,845 
Consumer loansConsumer loans2,194 2,440 
Total loansTotal loans52,291 50,369 
Less allowance for loan losses(948)(637)
Allowance for loan losses
Net loansNet loans51,343 49,732 
Premises and equipmentPremises and equipment459 457 
Accrued income and other assetsAccrued income and other assets5,360 4,842 
Total assetsTotal assets$88,129 $73,402 
LIABILITIES AND SHAREHOLDERS’ EQUITYLIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits
Noninterest-bearing deposits
Noninterest-bearing depositsNoninterest-bearing deposits$39,420 $27,382 
Money market and interest-bearing checking depositsMoney market and interest-bearing checking deposits28,540 24,527 
Savings depositsSavings deposits2,710 2,184 
Customer certificates of depositCustomer certificates of deposit2,133 2,978 
Other time depositsOther time deposits0 133 
Foreign office time depositsForeign office time deposits66 91 
Total interest-bearing depositsTotal interest-bearing deposits33,449 29,913 
Total depositsTotal deposits72,869 57,295 
Short-term borrowingsShort-term borrowings0 71 
Accrued expenses and other liabilitiesAccrued expenses and other liabilities1,482 1,440 
Medium- and long-term debtMedium- and long-term debt5,728 7,269 
Total liabilitiesTotal liabilities80,079 66,075 
Fixed-rate reset non-cumulative perpetual preferred stock, series A, 0 par value, $100,000 liquidation preference per share:
Fixed-rate reset non-cumulative perpetual preferred stock, series A, no par value, $100,000 liquidation preference per share:
Authorized - 4,000 sharesAuthorized - 4,000 shares
Issued - 4,000 shares at 12/31/2020394 0 
Authorized - 4,000 shares
Authorized - 4,000 shares
Issued - 4,000 shares
Issued - 4,000 shares
Issued - 4,000 shares
Common stock - $5 par value:Common stock - $5 par value:
Authorized - 325,000,000 sharesAuthorized - 325,000,000 shares
Authorized - 325,000,000 shares
Authorized - 325,000,000 shares
Issued - 228,164,824 shares
Issued - 228,164,824 shares
Issued - 228,164,824 sharesIssued - 228,164,824 shares1,141 1,141 
Capital surplusCapital surplus2,185 2,174 
Accumulated other comprehensive income (loss)168 (235)
Accumulated other comprehensive loss
Retained earningsRetained earnings9,623 9,538 
Less cost of common stock in treasury - 88,997,430 shares at 12/31/2020 and 86,069,234 shares at 12/31/2019(5,461)(5,291)
Less cost of common stock in treasury - 96,266,568 shares at 12/31/2023 and 97,197,962 shares at 12/31/2022
Total shareholders’ equityTotal shareholders’ equity8,050 7,327 
Total liabilities and shareholders’ equityTotal liabilities and shareholders’ equity$88,129 $73,402 
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
(in millions, except per share data)(in millions, except per share data)
(in millions, except per share data)
(in millions, except per share data)
Years Ended December 31Years Ended December 31202020192018
Years Ended December 31
Years Ended December 31202320222021
INTEREST INCOMEINTEREST INCOME
INTEREST INCOME
INTEREST INCOME
Interest and fees on loans
Interest and fees on loans
Interest and fees on loansInterest and fees on loans$1,773 $2,439 $2,262 
Interest on investment securitiesInterest on investment securities291 297 265 
Interest on short-term investmentsInterest on short-term investments29 71 92 
Total interest incomeTotal interest income2,093 2,807 2,619 
INTEREST EXPENSEINTEREST EXPENSE
Interest on deposits
Interest on deposits
Interest on depositsInterest on deposits101 262 122 
Interest on short-term borrowingsInterest on short-term borrowings1 9 1 
Interest on medium- and long-term debtInterest on medium- and long-term debt80 197 144 
Total interest expenseTotal interest expense182 468 267 
Net interest incomeNet interest income1,911 2,339 2,352 
Provision for credit lossesProvision for credit losses537 74 (1)
Net interest income after provision for credit lossesNet interest income after provision for credit losses1,374 2,265 2,353 
NONINTEREST INCOMENONINTEREST INCOME
Card feesCard fees270 257 244 
Card fees
Card fees
Fiduciary incomeFiduciary income209 206 206 
Service charges on deposit accountsService charges on deposit accounts185 203 211 
Capital markets income
Commercial lending feesCommercial lending fees77 91 85 
Bank-owned life insuranceBank-owned life insurance44 41 39 
Foreign exchange income40 44 47 
Letter of credit feesLetter of credit fees37 38 40 
Brokerage feesBrokerage fees21 28 27 
Net securities losses0 (7)(19)
Risk management hedging (loss) income
Risk management hedging (loss) income
Risk management hedging (loss) income
Other noninterest incomeOther noninterest income118 109 96 
Total noninterest incomeTotal noninterest income1,001 1,010 976 
NONINTEREST EXPENSESNONINTEREST EXPENSES
Salaries and benefits expenseSalaries and benefits expense1,019 1,020 1,009 
Salaries and benefits expense
Salaries and benefits expense
Outside processing fee expenseOutside processing fee expense242 264 255 
FDIC insurance expense
Occupancy expenseOccupancy expense156 154 152 
Software expenseSoftware expense154 117 125 
Equipment expenseEquipment expense49 50 48 
Advertising expenseAdvertising expense35 34 30 
FDIC insurance expense33 23 42 
Restructuring charges0 0 53 
Other noninterest expensesOther noninterest expenses96 81 80 
Total noninterest expensesTotal noninterest expenses1,784 1,743 1,794 
Income before income taxesIncome before income taxes591 1,532 1,535 
Provision for income taxesProvision for income taxes117 334 300 
NET INCOMENET INCOME474 1,198 1,235 
Less:Less:
Income allocated to participating securitiesIncome allocated to participating securities2 7 8 
Income allocated to participating securities
Income allocated to participating securities
Preferred stock dividendsPreferred stock dividends13 0 0 
Net income attributable to common sharesNet income attributable to common shares$459 $1,191 $1,227 
Earnings per common share:Earnings per common share:
BasicBasic$3.29 $7.95 $7.31 
Basic
Basic
DilutedDiluted3.27 7.87 7.20 
Cash dividends declared on common stockCash dividends declared on common stock378 398 309 
Cash dividends declared per common shareCash dividends declared per common share2.72 2.68 1.84 
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Comerica Incorporated and Subsidiaries
(in millions)(in millions)
Years Ended December 31
Years Ended December 31
Years Ended December 31Years Ended December 31202020192018202320222021
NET INCOMENET INCOME$474 $1,198 $1,235 
OTHER COMPREHENSIVE INCOME (LOSS)OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized gains (losses) on investment securities:Unrealized gains (losses) on investment securities:
Unrealized gains (losses) on investment securities:
Unrealized gains (losses) on investment securities:
Net unrealized holding gains (losses) arising during the periodNet unrealized holding gains (losses) arising during the period191 257 (69)
Less:
Reclassification adjustment for net securities losses included in net income0 (8)(20)
Net unrealized holding gains (losses) arising during the period
Net unrealized holding gains (losses) arising during the period
Change in net unrealized gains (losses) before income taxesChange in net unrealized gains (losses) before income taxes191 265 (49)
Net gains on cash flow hedges:
Net cash flow hedge gains arising during the period before income taxes229 44 0 
Change in net unrealized gains (losses) before income taxes
Change in net unrealized gains (losses) before income taxes
Net gains (losses) on cash flow hedges:
Net cash flow hedge gains (losses) arising during the period before income taxes
Net cash flow hedge gains (losses) arising during the period before income taxes
Net cash flow hedge gains (losses) arising during the period before income taxes
Reclassification of loss related to de-designation of derivatives to other noninterest income
Less:Less:
Net cash flow hedge gains recognized in interest and fees on loans before taxes70 0 0 
Change in net cash flow hedge gains before income taxes159 44 0 
Net cash flow hedge (losses) gains recognized in interest and fees on loans before taxes
Net cash flow hedge (losses) gains recognized in interest and fees on loans before taxes
Net cash flow hedge (losses) gains recognized in interest and fees on loans before taxes
Amortization of unrealized losses related to de-designated derivatives included in interest and fees on loans
Change in net cash flow hedge gains (losses) before income taxes
Defined benefit pension and other postretirement plans adjustment:Defined benefit pension and other postretirement plans adjustment:
Actuarial gain (loss) arising during the periodActuarial gain (loss) arising during the period142 163 (191)
Actuarial gain (loss) arising during the period
Actuarial gain (loss) arising during the period
Prior service credit arising during the period
Adjustments for amounts recognized as components of net periodic benefit cost:Adjustments for amounts recognized as components of net periodic benefit cost:
Amortization of actuarial net loss
Amortization of actuarial net loss
Amortization of actuarial net lossAmortization of actuarial net loss63 42 61 
Amortization of prior service creditAmortization of prior service credit(27)(27)(27)
Change in defined benefit pension and other postretirement plans adjustment before income taxesChange in defined benefit pension and other postretirement plans adjustment before income taxes178 178 (157)
Change in defined benefit pension and other postretirement plans adjustment before income taxes
Change in defined benefit pension and other postretirement plans adjustment before income taxes
Total other comprehensive income (loss) before income taxesTotal other comprehensive income (loss) before income taxes528 487 (206)
Provision (benefit) for income taxesProvision (benefit) for income taxes125 113 (47)
Total other comprehensive income (loss), net of taxTotal other comprehensive income (loss), net of tax403 374 (159)
COMPREHENSIVE INCOME$877 $1,572 $1,076 
COMPREHENSIVE INCOME (LOSS)
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Comerica Incorporated and Subsidiaries
Accumulated
Nonredeemable
Nonredeemable
NonredeemableCommon StockOtherTotal
PreferredPreferredSharesCapitalComprehensiveRetainedTreasuryShareholders'
(in millions, except per share data)(in millions, except per share data)StockOutstandingAmountSurplusIncome (Loss)EarningsStockEquity
BALANCE AT DECEMBER 31, 2020
Net income
Net income
Net income
Other comprehensive loss, net of tax
Cash dividends declared on common stock ($2.72 per share)
Cash dividends declared on preferred stock
Purchase of common stock
Accumulated
NonredeemableCommon StockOtherTotal
PreferredSharesCapitalComprehensiveRetainedTreasuryShareholders'
(in millions, except per share data)StockOutstandingAmountSurplusIncome (Loss)EarningsStockEquity
BALANCE AT DECEMBER 31, 2017$— 172.9 $1,141 $2,122 $(451)$7,887 $(2,736)$7,963 
Cumulative effect of change in accounting principles— — — — 1 14 — 15 
Net income— — — — — 1,235 — 1,235 
Other comprehensive loss, net of tax— — — — (159)— — (159)
Cash dividends declared on common stock ($1.84 per share)— — — — — (309)— (309)
Purchase of common stock— (14.9)— (3)— — (1,326)(1,329)
Net issuance of common stock under employee stock plans
Net issuance of common stock under employee stock plansNet issuance of common stock under employee stock plans— 1.5 — (9)— (23)75 43 
Net issuance of common stock for warrants— 0.6 0 (10)0 (23)33 0 
Share-based compensation— — — 48 — — — 48 
BALANCE AT DECEMBER 31, 2018— 160.1 1,141 2,148 (609)8,781 (3,954)7,507 
Cumulative effect of change in accounting principle— — — — — (14)— (14)
Net income— — — — — 1,198 — 1,198 
Other comprehensive income, net of tax— — — — 374 — — 374 
Cash dividends declared on common stock ($2.68 per share)— — — — — (398)— (398)
Purchase of common stock— (18.7)— — — — (1,380)(1,380)
Net issuance of common stock under employee stock plansNet issuance of common stock under employee stock plans— 0.7 — (13)— (29)43 1 
Share-based compensationShare-based compensation— — — 39 — — — 39 
Share-based compensation
Share-based compensation
BALANCE AT DECEMBER 31, 2019— 142.1 $1,141 $2,174 $(235)$9,538 $(5,291)$7,327 
Cumulative effect of change in accounting principle— — — — — 13 — 13 
BALANCE AT DECEMBER 31, 2021
BALANCE AT DECEMBER 31, 2021
BALANCE AT DECEMBER 31, 2021
Net incomeNet income— — — — — 474 — 474 
Other comprehensive income, net of tax— — — — 403 — — 403 
Net income
Net income
Other comprehensive loss, net of tax
Cash dividends declared on common stock ($2.72 per share)Cash dividends declared on common stock ($2.72 per share)— — — — — (378)— (378)
Cash dividends declared on preferred stockCash dividends declared on preferred stock— — — — — (13)— (13)
Purchase of common stockPurchase of common stock— (3.4)— — — — (194)(194)
Issuance of preferred stock394 — — — — — — 394 
Net issuance of common stock under employee stock plans
Net issuance of common stock under employee stock plans
Net issuance of common stock under employee stock plansNet issuance of common stock under employee stock plans— 0.5 — (13)— (11)24 0 
Share-based compensationShare-based compensation— — — 24 — — — 24 
Share-based compensation
Share-based compensation
BALANCE AT DECEMBER 31, 2020$394 139.2 $1,141 $2,185 $168 $9,623 $(5,461)$8,050 
BALANCE AT DECEMBER 31, 2022
BALANCE AT DECEMBER 31, 2022
BALANCE AT DECEMBER 31, 2022
Net income
Net income
Net income
Other comprehensive income, net of tax
Cash dividends declared on common stock ($2.84 per share)
Cash dividends declared on preferred stock
Net issuance of common stock under employee stock plans
Net issuance of common stock under employee stock plans
Net issuance of common stock under employee stock plans
Share-based compensation
Share-based compensation
Share-based compensation
BALANCE AT DECEMBER 31, 2023
BALANCE AT DECEMBER 31, 2023
BALANCE AT DECEMBER 31, 2023
See notes to consolidated financial statements.


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CONSOLIDATED STATEMENTS OF CASH FLOWS
Comerica Incorporated and Subsidiaries

(in millions)(in millions)
(in millions)
(in millions)
Years Ended December 31Years Ended December 31202020192018
Years Ended December 31
Years Ended December 31202320222021
OPERATING ACTIVITIES
OPERATING ACTIVITIES
OPERATING ACTIVITIESOPERATING ACTIVITIES
Net incomeNet income$474 $1,198 $1,235 
Net income
Net income
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
Provision for credit losses
Provision for credit lossesProvision for credit losses537 74 (1)
(Benefit) provision for deferred income taxes(Benefit) provision for deferred income taxes(89)12 24 
Depreciation and amortizationDepreciation and amortization108 114 120 
Net periodic defined benefit creditNet periodic defined benefit credit(25)(29)(18)
Share-based compensation expenseShare-based compensation expense24 39 48 
Net amortization of securitiesNet amortization of securities15 2 3 
Accretion of loan purchase discount0 0 (1)
Net securities losses0 7 19 
Net (gains) losses on sales of foreclosed property(1)1 (1)
Net gains on sales of foreclosed and other bank property
Net gains on sales of foreclosed and other bank property
Net gains on sales of foreclosed and other bank property
Net change in:Net change in:
Net change in:
Net change in:
Accrued income receivable
Accrued income receivable
Accrued income receivableAccrued income receivable25 17 (45)
Accrued expenses payableAccrued expenses payable(29)(27)49 
Other, netOther, net(111)(318)184 
Net cash provided by operating activitiesNet cash provided by operating activities928 1,090 1,616 
INVESTING ACTIVITIESINVESTING ACTIVITIES
Investment securities available-for-sale:Investment securities available-for-sale:
Investment securities available-for-sale:
Investment securities available-for-sale:
Maturities and redemptionsMaturities and redemptions3,350 2,262 1,781 
Sales0 987 1,256 
Maturities and redemptions
Maturities and redemptions
PurchasesPurchases(5,804)(3,346)(3,032)
Purchases
Purchases
Net change in loansNet change in loans(2,136)(324)(1,045)
Proceeds from sales of foreclosed property5 1 8 
Proceeds from sales of foreclosed and other bank property
Net increase in premises and equipmentNet increase in premises and equipment(79)(86)(90)
Federal Home Loan Bank stock:Federal Home Loan Bank stock:
Purchases
Purchases
PurchasesPurchases(51)(201)(41)
RedemptionsRedemptions92 201 0 
Proceeds from bank-owned life insurance settlementsProceeds from bank-owned life insurance settlements20 10 9 
Other, netOther, net1 2 (2)
Net cash used in investing activities(4,602)(494)(1,156)
Net cash provided by (used in) investing activities
FINANCING ACTIVITIESFINANCING ACTIVITIES
Net change in:Net change in:
Net change in:
Net change in:
Deposits
Deposits
DepositsDeposits15,554 1,711 (2,082)
Short-term borrowingsShort-term borrowings(71)27 34 
Medium- and long-term debt:Medium- and long-term debt:
Maturities and redemptionsMaturities and redemptions(1,675)(350)0 
Maturities and redemptions
Maturities and redemptions
Issuances and advancesIssuances and advances0 1,050 1,850 
Preferred stock:
Issuance394 0 0 
Cash dividends paid(8)0 0 
Cash dividends paid on preferred stock
Cash dividends paid on preferred stock
Cash dividends paid on preferred stock
Common stock:Common stock:
Repurchases
Repurchases
RepurchasesRepurchases(199)(1,394)(1,338)
Cash dividends paidCash dividends paid(375)(402)(263)
Issuances under employee stock plansIssuances under employee stock plans4 18 52 
Other, netOther, net(1)1 3 
Net cash provided by (used in) financing activities13,623 661 (1,744)
Net cash (used in) provided by financing activities
Net increase (decrease) in cash and cash equivalentsNet increase (decrease) in cash and cash equivalents9,949 1,257 (1,284)
Cash and cash equivalents at beginning of periodCash and cash equivalents at beginning of period5,818 4,561 5,845 
Cash and cash equivalents at end of periodCash and cash equivalents at end of period$15,767 $5,818 $4,561 
Interest paidInterest paid$203 $462 $261 
Income taxes paidIncome taxes paid141 266 200 
Noncash investing and financing activities:
Loans transferred to other real estate1 12 3 
Securities transferred from held-to-maturity to available-for-sale0 0 1,266 
Securities transferred from available-for-sale to equity securities0 0 81 
See notes to consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

NOTE 1 - BASIS OF PRESENTATION AND ACCOUNTING POLICIES
Organization
Comerica Incorporated (the Corporation) is a registered financial holding company headquartered in Dallas, Texas. The Corporation’s major business segments are the Commercial Bank, the Retail Bank and Wealth Management. The Corporation operates in 3 primary geographic markets: Michigan, California and Texas. For further discussion of each business segment, and primary geographic market, refer to Note 22. The Corporation and its banking subsidiaries are regulated at both the state and federal levels.
The accounting and reporting policies of the Corporation conform to United States (U.S.) generally accepted accounting principles (GAAP). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from these estimates. Certain amounts in the financial statements for prior years have been reclassified to conform to the current financial statement presentation.
The following summarizes the significant accounting policies of the Corporation applied in the preparation of the accompanying consolidated financial statements.
Principles of Consolidation
The consolidated financial statements include the accounts of the Corporation and the accounts of those subsidiaries that are majority owned and in which the Corporation has a controlling financial interest. The Corporation consolidates entities not determined to be variable interest entities (VIEs) when it holds a controlling financial interest and usesapplies the cost or equity method when it holds less than a controlling financial interest. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies acquired are included from the date of acquisition.
The Corporation holds investments in certain legal entities that are considered VIEs. In general, a VIE is an entity that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations. If any of these characteristics are present, the entity is subject to a variable interests consolidation model, and consolidation is based on variable interests, not on voting interests. Variable interests are defined as contractual ownership or other moneyeconomic interests in an entity that change with fluctuations in the entity’s net asset value. The primary beneficiary is required to consolidate the VIE. The primary beneficiary is definedVIE as the party thatit has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE. The maximum potential exposure to losses relative to investments in VIEs is generally limited to the sum of the outstanding book basis and unfunded commitments for future investments.
The Corporation evaluates its investments in VIEs, both at inception and when there is a change in circumstances that requires reconsideration, to determine if the Corporation is the primary beneficiary and consolidation is required. The Corporation accounts for unconsolidated VIEs using either the proportional, cost or equity method. These investments comprise investments in community development projects which generate tax credits to their investors and are included in accrued income and other assets on the Consolidated Balance Sheets.
The proportional method is used for investments in affordable housing projects that qualify for the low-income housing tax credit (LIHTC). The equity method is used for other investments where the Corporation has the ability to exercise significant influence over thean entity’s operationoperations and financial policies. Other unconsolidated equity investments that do not meet the criteria to be accounted for under the equity method are accounted for under the cost method. Amortization and other write-downs of LIHTC investments are presented on a net basis as a component of the provision for income taxes, while income, amortization and write-downs from cost and equity method investments are recorded in other noninterest income on the Consolidated Statements of Income.
See Note 9 for additional information about the Corporation’s involvement with VIEs.
Assets held in an agency or fiduciary capacity are not assets of the Corporation and are not included in the consolidated financial statements.
See Note 9 for additional information about the Corporation’s involvement with VIEs.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

Fair Value Measurements
The Corporation utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, the Corporation uses present value techniques and other valuation methods to estimate the fair values of its financial instruments. These valuation methods require considerable judgment and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used.
Fair value is an estimate of the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (i.e., not a forced transaction, such as a liquidation or distressed sale) between market participants at the measurement date. Fair value is based on the assumptions market participants would use when pricing an asset or liability.
Investment securities available-for-sale, derivatives, deferred compensation plans and equity securities with readily determinable fair values (primarily money market mutual funds) are recorded at fair value on a recurring basis. Additionally, from time to time, the Corporation may be required to record other assets and liabilities at fair value on a nonrecurring basis, such as impaired loans, loans held for sale, other real estate (primarily foreclosed property), nonmarketable equity securities and certain other assets and liabilities. These nonrecurring fair value adjustments typically involve write-downs of individual assets or application of lower of cost or fair value accounting.
Fair value measurements and disclosures guidance establishes a three-level fair value hierarchy based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. Fair value measurements are separately disclosed by level within the fair value hierarchy. For assets and liabilities recorded at fair value, it is the Corporation’s policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements.
Level 1Valuation is based uponon quoted prices for identical instruments traded in active markets.
Level 2Valuation is based uponon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are less active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.
The Corporation generally utilizes third-party pricing services to value Level 1 and Level 2 securities. Management reviews the methodologies and assumptions used by the third-party pricing services and evaluates the values provided, principally by comparison with other available market quotes for similar instruments and/or analysis based on internal models using available third-party market data. The Corporation may occasionally adjust certain values provided by the third-party pricing service when management believes, as the result of its review, that the adjusted price most appropriately reflects the fair value of the particular security.
Fair value measurements for assets and liabilities where limited or no observable market data exists are based primarily upon estimates, often calculated based on the economic and competitive environment, the characteristics of the asset or liability and other factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, andso that changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values.
Following are descriptions of the valuation methodologies and key inputs used to measure financial assets and liabilities recorded at fair value, as well as a description of the methods and significant assumptions used to estimate fair value disclosures for financial instruments not recorded at fair value in their entirety on a recurring basis. The descriptions include an indication of the level of the fair value hierarchy in which the assets or liabilities are classified.
Cash and due from banks, federal funds sold and interest-bearing deposits with banks
Due to their short-term nature, the carrying amount of these instruments approximates the estimated fair value. As such, the Corporation classifies the estimated fair value of these instruments as Level 1.
Deferred compensation plan assets and liabilities as well as equity securities with a readily determinable fair value
The Corporation holds a portfolio of securities that includes equity securities and assets held related to deferred compensation plans. Securities and associated deferred compensation plan liabilities are recorded at fair value on a recurring
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

basis and included in other short-term investments and accrued expenses and other liabilities, respectively, on the Consolidated Balance Sheets. Level 1 securities include assets related to deferred compensation plans, which are invested in mutual funds, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and other securities traded on
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

an active exchange, such as the New York Stock Exchange. Level 2 securities include municipal bonds and residential mortgage-backed securities issued by U.S. government-sponsored entities and corporate debt securities. Deferred compensation plan liabilities represent the fair value of the obligation to the plan participant, which corresponds to the fair value of the invested assets. The methods used to value equity securities and deferred compensation plan assets are the same as the methods used to value investment securities, discussed below.
Investment securities available-for-sale
Investment securities available-for-sale are recorded at fair value on a recurring basis. The Corporation discloses estimated fair values of investment securities held-to-maturity, which is determined in the same manner as investment securities available-for-sale. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include residential mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored entities, andas well as corporate debt securities. The fair value of Level 2 securities is determined using quoted prices of securities with similar characteristics, or pricing models based on observable market data inputs, primarily interest rates, spreads and prepayment information.
Securities classified as Level 3 represent securities in less liquid markets requiring significant management assumptions when determining fair value.
Loans held-for-sale
Loans held-for-sale, included in other short-term investments on the Consolidated Balance Sheets, are recorded at the lower of cost or fair value. Loans held-for-sale may be carried at fair value on a nonrecurring basis when fair value is less than cost. TheWhen the fair value is based on what secondary markets are currently offering for portfolios with similar characteristics. As such,characteristics, the Corporation classifies both loans held-for-sale subjected to nonrecurringare classified as Level 2. When secondary market information is not available, the fair value adjustmentsis estimated based on the repricing frequency of the loans and estimated credit risk using internally-developed lifetime loss estimates, resulting in the estimated fair value of loans held-for salebeing classified as Level 2.3.
Loans
The Corporation does not record loans at fair value on a recurring basis. However, an individual allowance may be established for a loan that no longer shares risk characteristics with loan pools, typically collateral-dependent loans for which reserves are based on the fair value of the underlying collateral. Such loan values are reported as nonrecurring fair value measurements. Collateral values supporting individually evaluated loans are evaluated quarterly. When management determines that the fair value of the collateral requires additional adjustments, either as a result of non-current appraisal value or when there is no observable market price, the Corporation classifies the loan as Level 3.
The Corporation discloses fair value estimates for loans. The estimated fair value is determined based on characteristics such as loan category, repricing features and remaining maturity, and includes prepayment and credit loss estimates. Fair values are estimated using a discounted cash flow model that employs discount rates that reflects current pricing for loans with similar maturity and risk characteristics, including credit characteristics, and the cost of equity for the portfolio at the balance sheet date. The rates take into account the expected yield curve, as well as an adjustment for prepayment risk, when applicable. The Corporation classifies the estimated fair value of loans held for investment as Level 3.
Customers’ liability on acceptances outstanding and acceptances outstanding
Customers' liability on acceptances outstanding is included in accrued income and other assets and acceptances outstanding are included in accrued expenses and other liabilities on the Consolidated Balance Sheets. Due to their short-term nature, the carrying amount of these instruments approximates the estimated fair value. As such, the Corporation classifies the estimated fair value of these instruments as Level 1.
Derivative assets and derivative liabilities
Derivative instruments held or issued for risk management or customer-initiated activities are traded in over-the-counter markets where quoted market prices are not readily available. Fair value for over-the-counter derivative instruments is measured on a recurring basis using internally developed models that use primarily based on market observable inputs, such as yield curves and option volatilities. The Corporation manages credit risk on its derivative positions based on whether the derivatives are being settled through a clearinghouse or bilaterally with each counterparty. For derivative positions settled on a counterparty-by-counterparty basis, the Corporation calculates credit valuation adjustments, included in the fair value of these instruments, on the basis of its relationships at the counterparty portfolio/portfolio or master netting agreement level. These credit valuation adjustments are determined by applying a credit spread for the counterparty or the Corporation, as appropriate, to the total
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

expected exposure of the derivative after considering collateral and other master netting arrangements. These adjustments, which are considered Level 3 inputs, are based on estimates of current credit spreads to evaluate the likelihood of default. When credit valuation adjustments are significant to the overall fair value of a derivative, the Corporation classifies the over-the-counter derivative valuation in Level 3 of the fair value hierarchy; otherwise, over-the-counter derivative valuations are classified in Level 2.
Nonmarketable equity securities
The Corporation has a portfolio of indirect (through funds) private equity and venture capital investments with a carrying value of $5 million and unfunded commitments of less than $1 million, at December 31, 2020. The investments are accounted for either on the cost or equity method and are individually reviewed for impairment on a quarterly basis by comparing the carrying value to the estimated fair value. These investments may be carried at fair value on a nonrecurring basis when they are deemed to be impaired and written down to fair value. Where there is not a readily determinable fair value, the Corporation estimates fair value for indirect private equity and venture capital investments based on the net asset value, as reported by the fund.
The Corporation also holds restricted equity investments, primarily Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) stock. Restricted equity securities are not readily marketable and are recorded at cost (par value) in accrued income and other assets on the Consolidated Balance Sheets and evaluated for impairment based on the ultimate recoverability of the par value. No significant observable market data for these instruments is available. The Corporation considers the profitability and asset quality of the issuer, dividend payment history and recent redemption experience and believes its investments in FHLB and FRB stock are ultimately recoverable at par. Therefore, the carrying amount for these restricted equity investments approximates fair value. The Corporation classifies the estimated fair value of such investments as Level 1. The Corporation’s investment in FHLB stock totaled $122 million and $163 million at December 31, 2020 and 2019, and its investment in FRB stock totaled $85 million at both December 31, 2020 and 2019.
Other real estate
Other real estate is included in accrued income and other assets on the Consolidated Balance Sheets and includes primarily foreclosed property. Foreclosed property is initially recorded at fair value, less costs to sell, at the date of legal title transfer to the Corporation, establishing a new cost basis. Subsequently, foreclosed property is carried at the lower of cost or fair value, less costs to sell. Other real estate may be carried at fair value on a nonrecurring basis when fair value is less than cost. Fair value is based upon independent market prices, appraised value or management's estimate of the value of the property. When management determines that the fair value of other real estate requires additional adjustments, either as a result
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

of a non-current appraisal or when there is no observable market price, the Corporation classifies the other real estate as Level 3.
Deposit liabilities
    The estimated fair value of checking, savings and certain money market deposit accounts is represented by the amounts payable on demand. The estimated fair value of term deposits is calculated by discounting the scheduled cash flows using the period-end rates offered on these instruments. As such, the Corporation classifies the estimated fair value of deposit liabilities as Level 2.
Short-term borrowings
The carrying amount of federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings approximates the estimated fair value. As such, the Corporation classifies the estimated fair value of short-term borrowings as Level 1.
Medium- and long-term debt
    The estimated fair value of the Corporation's medium- and long-term debt is based on quoted market values when available. If quoted market values are not available, the estimated fair value is based on the market values of debt with similar characteristics. The Corporation classifies the estimated fair value of medium- and long-term debt as Level 2.
Credit-related financial instruments
Credit-related financial instruments include unused commitments to extend credit and letters of credit. These instruments generate ongoing fees which are recognized over the term of the commitment. In situations where credit losses are probable, the Corporation records an allowance. The carrying value of these instruments included in accrued expenses and other liabilities on the Consolidated Balance Sheets, which includes the carrying value of the deferred fees plus the related allowance, approximates the estimated fair value. The Corporation classifies the estimated fair value of credit-related financial instruments as Level 3.
For further information about fair value measurements refer to Note 2.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

Other Short-Term InvestmentsNonperforming Assets
Other short-term investmentsNonperforming assets include deferred compensation plan assets, equity securities with a readily determinable fair value and loans held-for-sale.    
Deferred compensation plan assets and equity securities are carried at fair value. Realized and unrealized gains or losses are included in other noninterest income on the Consolidated Statements of Income.
Loans held-for-sale, typically residential mortgages originated with the intent to sell and occasionally including other loans transferred to held-for-sale, are carried at the lower of cost or fair value. Fair value is determined in the aggregate for each portfolio. Changes in fair value and gains or losses upon sale are included in other noninterest income on the Consolidated Statements of Income.
Investment Securities
Debt securities are classified as trading, available-for-sale (AFS) or held-to-maturity. Trading securities are recorded at fair value, with unrealized gains and losses included in noninterest income on the Consolidated Statements of Income. AFS securities are recorded at fair value, with unrealized gains and losses, net of income taxes, reported as a separate component of other comprehensive income (OCI). Securities for which management has the intent and ability to hold to maturity are classified as held-to-maturity and recorded at amortized cost. Interest income is recognized using the interest method.
An AFS security is impaired if its fair value is less than amortized cost. Credit-related impairment is recognized as an allowance to investment securities available for sale on the Consolidated Balance Sheets with a corresponding adjustment to provision for credit losses on the Consolidated Statements of Income. Non-credit-related impairment is recognized as a component of OCI. If the Corporation intends to sell an impaired AFS security or more likely than not will be required to sell that security before recovering its amortized cost basis, the entire impairment amount is recognized in earnings with corresponding adjustment to the security's amortized cost basis.
For certain types of AFS securities, such as U.S. Treasuries and other securities with government guarantees, the Corporation generally expects zero credit losses. The zero-loss expectation applies to all the Corporation’s securities and no allowance for credit losses was recorded on its AFS securities portfolio at December 31, 2020.
Gains or losses on the sale of securities are computed based on the adjusted cost of the specific security sold.
For further information on investment securities, refer to Note 3.
Loans
Loans and leases originated and held for investment are recorded at the principal balance outstanding, net of unearned income, charge-offs and unamortized deferred fees and costs. Interest income is recognized on loans and leases using the interest method.
The Corporation assesses all loan modifications to determine whether a restructuring constitutes a troubled debt restructuring (TDR). A restructuring is considered a TDR when a borrower is experiencing financial difficulty and the Corporation grants a concession to the borrower. TDRs on accrual status at the original contractual rate of interest are considered performing. Nonperforming TDRs include TDRs on nonaccrual status and foreclosed assets. Effective January 1, 2023, the Corporation prospectively adopted the provisions of Accounting Standards Update No. 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosures", which eliminated the accounting for TDRs. Refer to Note 1 to the consolidated financial statements for further information. At December 31, 2022, reduced-rate loans represented TDRs which havehad been renegotiated to less than thetheir original contractual rates (reduced-rate loans).
The CARES Act, signed in to law on March 27, 2020, included provisions that provide temporary relief from TDR accounting for certain types of modifications. Under these provisions, modifications deemed to be COVID-19-related would not be considered a TDR if the loan was not more than 30 days past due as of December 31, 2019 and the deferral was executed between March 1, 2020 and the earlier of 60 days after the date of termination of the COVID-19 national emergency or December 31, 2020. The termination of these provisions was extended, to the earlier of 60 days after the COVID-19 national emergency date or January 1, 2022, with the Consolidated Appropriations Act of 2021. The banking regulators issued similar guidance, which also clarified that a COVID-19-related modification should not be considered a TDR if the borrower was current on payments at the time the underlying loan modification program was implemented and if the modification was considered to be short-term. Modifications are first evaluated for eligibility under the CARES Act, then the interagency guidance if they do not qualify for the CARES Act relief. Modifications that are not eligible for either program continue to follow the Corporation’s established TDR policy. Additionally, loans with deferrals granted due to COVID-19 are not generally reported as past due or nonaccrual.
Effective January 1, 2020, the Corporation adopted ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” (ASU 2020-04). Typically, entities must evaluaterates.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

The following table presents a summary of nonperforming assets and past due loans.
whether a loan contract modification results in a modified loan or a new loan for accounting purposes. Topic 848 allows entitiesSummary of Nonperforming Assets and Past Due Loans
(dollar amounts in millions)
December 3120232022
Nonaccrual loans$178 $240 
Reduced-rate loansn/a4 
Total nonperforming loans178 244 
Foreclosed property— — 
Total nonperforming assets$178 $244 
Nonaccrual loans as a percentage of total loans0.34 %0.45 %
Nonperforming loans as a percentage of total loans0.34 0.46 
Nonperforming assets as a percentage of total loans and foreclosed property0.34 0.46 
Loans past due 90 days or more and still accruing$20 $23 
Nonperforming assets decreased $66 million to bypass this evaluation for qualifying modifications related to reference rate reform. The Corporation will apply the relief provided by Topic 848 to qualifying contract modifications.
Loan Origination Fees and Costs
Substantially all loan origination fees and costs are deferred and amortized to net interest income over the life of the related loan or over the commitment period as a yield adjustment. Net deferred income on originated loans, including unearned income and unamortized costs, fees, premiums and discounts, totaled $145 million and $103$178 million at December 31, 20202023, from $244 million at December 31, 2022. The decrease in nonperforming assets primarily reflected decreases of $33 million in nonaccrual business loans and 2019,$29 million in nonaccrual retail loans. Nonperforming loans were 0.34 percent of total loans at December 31, 2023, compared to 0.46 percent at December 31, 2022. For further information regarding the composition of nonaccrual loans, refer to Note 4 to the consolidated financial statements.
The following table presents a summary of changes in nonaccrual loans.
(in millions)
Years Ended December 3120232022
Balance at beginning of period$240 $264 
Loans transferred to nonaccrual (a)94 132 
Nonaccrual loan gross charge-offs(62)(68)
Loans transferred to accrual status (a)(14)(11)
Nonaccrual loans sold(5)(15)
Payments/other (b)(75)(62)
Balance at end of period$178 $240 
(a)Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(b)Includes net changes related to nonaccrual loans with balances less than or equal to $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed property.
There were 16 borrowerswith a balance greater than $2 million, totaling $94 million, transferred to nonaccrual status in 2023, a decrease of 7 borrowers compared to 23 borrowers totaling $132 million in 2022. For further information about the composition of loans transferred to nonaccrual during the current period, refer to the nonaccrual information by industry category table below.
The following table presents the composition of nonaccrual loans by balance and the related number of borrowers at December 31, 2023 and 2022.
20232022
(dollar amounts in millions)Number of
Borrowers		BalanceNumber of
Borrowers		Balance
Under $2 million457 $50 475 $60 
$2 million - $5 million11 35 14 46 
$5 million - $10 million5 35 8 58 
$10 million - $25 million4 58 5 76 
Total477 $178 502 $240 
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The following table presents a summary of nonaccrual loans at December 31, 2023 and loans transferred to nonaccrual and net loan charge-offs (recoveries) for the year ended December 31, 2023, based on North American Industry Classification System (NAICS) categories.
December 31, 2023Year Ended December 31, 2023
(dollar amounts in millions)Nonaccrual LoansLoans Transferred to
Nonaccrual (a)		Net Loan Charge-Offs (Recoveries)
Industry Category
Manufacturing$42 23 %$26 28 %$5 23 %
Real Estate & Home Builders38 21 27 29 (10)(45)
Residential Mortgage19 11 — — — — 
Transportation & Warehousing16 9 5 5 5 23 
Information & Communication13 7 12 12 4 18 
Services7 4 7 7 5 22 
Wholesale Trade6 3 11 12 11 50 
Arts, Entertainment & Recreation6 3 — — — — 
Mining, Quarrying and Oil & Gas Extraction4 2 — — (1)(5)
Management of Companies and Enterprises4 2 3 4 — — 
Retail Trade1 1 — — — — 
Other (b)22 14 3 3 3 14 
Total$178 100 %$94 100 %$22 100 %
(a)Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(b)Other category includes other industry categories with smaller impacts, as well as consumer, excluding residential mortgage and certain personal purpose nonaccrual loans and net charge-offs.
Loans past due 90 days or more and still accruing interest generally represent loans that are well-collateralized and in the process of collection. Loans past due 90 days or more decreased $3 million to $20 million at December 31, 2023, compared to $23 million at December 31, 2022. Loans past due 30-89 days decreased $180 million to $198 million at December 31, 2023, compared to $378 million at December 31, 2022. Loans past due 30 days or more and still accruing interest as a percentage of total loans were 0.42 percent and 0.75 percent at December 31, 2023 and December 31, 2022, respectively. An aging analysis of loans included in Note 4 to the consolidated financial statements provides further information about the balances comprising past due loans.
The following table presents a summary of total criticized loans. The Corporation's criticized list is consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities. Criticized loans on nonaccrual status are individually subjected to quarterly credit quality reviews, and the Corporation may establish specific allowances for such loans. A table of loans by credit quality indicator included in Note 4 to the consolidated financial statements provides further information about the balances comprising total criticized loans.
(dollar amounts in millions)
December 3120232022
Total criticized loans$2,405 $1,572 
As a percentage of total loans4.6 %2.9 %
The $833 million increase in criticized loans during the year ended December 31, 2023 was primarily driven by Commercial Real Estate and general Middle Market.
For further information regarding the Corporation's nonperforming assets policies, refer to Notes 1 and 4 to the consolidated financial statements.
Concentrations of Credit Risk
Concentrations of credit risk may exist when a number of borrowers are engaged in similar activities, or activities in the same geographic region, and have similar economic characteristics that would cause them to be similarly impacted by changes in economic or other conditions. The Corporation has concentrations of credit risk with the commercial real estate and automotive industries. All other industry concentrations, as defined by management, individually represented less than 10 percent of total loans at December 31, 2023.
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Commercial Real Estate Lending
At December 31, 2023, the Corporation's commercial real estate portfolio represented 36 percent of total loans. The following table summarizes the Corporation's commercial real estate loan portfolio by loan category.
December 31, 2023December 31, 2022
(in millions)Commercial Real Estate business line (a)Other (b)TotalCommercial Real Estate business line (a)Other (b)Total
Real estate construction loans$4,570 $513 $5,083 $2,505 $600 $3,105 
Commercial mortgage loans4,727 8,959 13,686 4,681 8,625 13,306 
Total commercial real estate$9,297 $9,472 $18,769 $7,186 $9,225 $16,411 
(a)Primarily loans to real estate developers.
(b)Primarily loans secured by owner-occupied real estate.
The Corporation limits risk inherent in its commercial real estate lending activities by monitoring borrowers directly involved in the commercial real estate markets and adhering to conservative policies on loan-to-value ratios for such loans. Commercial real estate loans, consisting of real estate construction and commercial mortgage loans, totaled $18.8 billion at December 31, 2023. Commercial real estate loans made to borrowers in the Commercial Real Estate business line, which includes loans to real estate developers, totaled $9.3 billion, or 50 percent of total commercial real estate loans, an increase of $2.1 billion compared to December 31, 2022. The Commercial Real Estate business line at December 31, 2023 was predominantly secured by multi-family and industrial properties, comprising 46 percent and 34 percent of the portfolio, respectively, with only 6 percent secured by office properties. Commercial real estate loans in other business lines totaled $9.5 billion, or 50 percent of total commercial real estate loans, at December 31, 2023, an increase of $247 million compared to December 31, 2022. These loans consisted primarily of owner-occupied commercial mortgages, which bear credit characteristics similar to non-commercial real estate business loans. Generally, loans previously reported as real estate construction are classified as commercial mortgage loans upon receipt of a certificate of occupancy.
The real estate construction loan portfolio primarily contains loans made to long-tenured customers with satisfactory completion experience. Criticized real estate construction loans in the Commercial Real Estate business line totaled $86 million at December 31, 2023 compared to none at December 31, 2022. In other business lines, criticized real estate construction loans totaled $12 million at December 31, 2023, compared to $3 million at December 31, 2022. There were no real estate construction loan net charge-offs in the years ended December 31, 2023 and 2022.
Commercial mortgage loans are loans where the primary collateral is a lien on any real property and are primarily loans secured by owner-occupied real estate. Real property is generally considered primary collateral if the value of that collateral represents more than 50 percent of the commitment at loan approval. Loans in the commercial mortgage portfolio generally mature within three to five years. Criticized commercial mortgage loans in the Commercial Real Estate business line totaled $378 million and $16 million at December 31, 2023 and 2022, respectively, with the increase primarily in multi-family properties. In other business lines, $395 million and $151 million of commercial mortgage loans were criticized at December 31, 2023 and 2022, respectively. Commercial mortgage loan net recoveries were $1 million in 2023, compared to no net charge-offs in 2022.
Automotive Lending - Dealer:
The following table presents a summary of dealer loans.
December 31, 2023December 31, 2022
(in millions)Loans
Outstanding		Percent of
Total Loans		Loans
Outstanding		Percent of
Total Loans
Dealer:
Floor plan$2,313 $1,379 
Other3,878 3,988 
Total dealer$6,191 11.9 %$5,367 10.1 %
Substantially all dealer loans are in the National Dealer Services business line and primarily include floor plan financing and other loans to automotive dealerships. Floor plan loans, included in commercial loans in the Consolidated Balance Sheets, totaled $2.3 billion at December 31, 2023, an increase of $934 million compared to $1.4 billion at December 31, 2022, resulting from increasing vehicle levels due to supply chain improvements. At December 31, 2023 and 2022, other loans in the National Dealer Services business line totaled $3.9 billion and $4.0 billion, respectively, including $2.2 billion and $2.3 billion of owner-occupied commercial real estate mortgage loans, respectively.
There were no nonaccrual dealer loans at both December 31, 2023, and 2022. Additionally, there were no net charge-offs of dealer loans in either of the years ended December 31, 2023 and 2022.
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Automotive Lending- Production:
The following table presents a summary of loans to borrowers involved with automotive production.
December 31, 2023December 31, 2022
Loans
Outstanding
Percent of
Total Loans
Loans
Outstanding
Percent of
Total Loans
(in millions)
Production:
Domestic$591 $797 
Foreign257 271 
Total production$848 1.6 %$1,068 2.0 %
Loans to borrowers involved with automotive production, primarily Tier 1 and Tier 2 suppliers, totaled $848 million at December 31, 2023 and $1.1 billion at December 31, 2022. These borrowers have faced, and could face in the future, financial difficulties due to disruptions in auto production, issues with supply chains and logistics operations and impacts resulting from labor union strikes. As such, management continues to monitor this portfolio.
Nonaccrual loans to borrowers involved with automotive production totaled $17 million in at December 31, 2023, compared to $5 million at December 31, 2022. Automotive production loan net charge-offs totaled $7 million for the year ended December 31, 2023, compared to $2 million for the same period in 2022.
For further information regarding significant group concentrations of credit risk, refer to Note 5 to the consolidated financial statements.
Residential Real Estate Lending
At December 31, 2023, residential real estate loans represented 7 percent of total loans. The following table summarizes the Corporation's residential mortgage and home equity loan portfolios by geographic market.


December 31, 2023December 31, 2022
(dollar amounts in millions)Residential
Mortgage 
Loans		Percent of
Total		Home
Equity 
Loans		Percent of
Total		Residential
Mortgage 
Loans		Percent of
Total		Home
Equity 
Loans		Percent of
Total
Geographic market:
Michigan$548 29 %$444 25 %$497 27 %$487 27 %
California871 46 911 51 866 48 852 48 
Texas272 14 351 20 258 14 354 20 
Other Markets198 11 86 4 193 11 83 5 
Total$1,889 100 %$1,792 100 %$1,814 100 %$1,776 100 %
Residential real estate loans, which consist of traditional residential mortgages and home equity loans and lines of credit, totaled $3.7 billion at December 31, 2023. The residential real estate portfolio is principally located within the Corporation's primary geographic markets. Substantially all residential real estate loans past due 90 days or more are placed on nonaccrual status, and substantially all junior lien home equity loans that are current or less than 90 days past due are placed on nonaccrual status if full collection of the senior position is in doubt. At no later than 180 days past due, such loans are charged off to current appraised values less costs to sell.
Residential mortgages totaled $1.9 billion at December 31, 2023, and were primarily larger, variable-rate mortgages originated and retained for certain private banking relationship customers. Of the $1.9 billion of residential mortgage loans outstanding, $19 million were on nonaccrual status at December 31, 2023, a decrease of $34 million compared to December 31, 2022. The home equity portfolio totaled $1.8 billion at December 31, 2023, of which 96 percent was outstanding under primarily variable-rate, interest-only home equity lines of credit, 3 percent were in amortizing status and 1 percent were closed-end home equity loans. Of the $1.8 billion of home equity loans outstanding, $21 million were on nonaccrual status at December 31, 2023, an increase of $6 million compared to December 31, 2022. A majority of the home equity portfolio was secured by junior liens at December 31, 2023.
Energy Lending
The Corporation has a portfolio of Energy loans that are included entirely in commercial loans in the Consolidated Balance Sheets. Customers in the Corporation's Energy business line (approximately 120 relationships) are engaged in exploration and production (E&P) and midstream. E&P generally includes such activities as searching for potential oil and gas fields, drilling exploratory wells and operating active wells. Commitments to E&P borrowers are generally subject to semi-annual borrowing base re-determinations based on a variety of factors including updated prices (reflecting market and competitive conditions), energy reserve levels and the impact of hedging. The midstream sector is generally involved in the
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transportation, storage and marketing of crude and/or refined oil and gas products. The Corporation's energy services customers provide products and services primarily to the E&P segment. Approximately 94% of loans in the Energy business line are Shared National Credits (SNC), which are facilities greater than or equal to $100 million shared by three or more federally supervised institutions, reflecting the Corporation's focus on larger middle market companies that have financing needs that generally exceed internal individual borrower credit risk limits. The Corporation seeks to develop full relationships with SNC borrowers.
The following table summarizes information about loans in the Corporation's Energy business line.
(dollar amounts in millions)20232022
December 31OutstandingsNonaccrualCriticized (a)OutstandingsNonaccrualCriticized (a)
Exploration and production (E&P)$1,070 77 %$4 $4 $1,162 82 %$7 $12 
Midstream312 23 — — 253 18 — — 
Total Energy business line$1,382 100 %$4 $4 $1,415 100 %$7 $12 
(a)Includes nonaccrual loans.
Loans in the Energy business line totaled $1.4 billion, or 3 percent of total loans, at December 31, 2023, a decrease of $33 million compared to December 31, 2022. Total exposure, including unused commitments to extend credit and letters of credit, was $3.3 billion (a utilization rate of 42 percent) and $3.4 billion (a utilization of 43 percent) at December 31, 2023 and December 31, 2022, respectively. Nonaccrual Energy loans decreased $3 million to $4 million at December 31, 2023, compared to $7 million at December 31, 2022. Criticized Energy loans decreased $8 million to $4 million at December 31, 2023, compared to $12 million at December 31, 2022. Energy net recoveries were $1 million for the year ended December 31, 2023, compared to net charge-offs of $3 million for the year ended December 31, 2022.
Leveraged Loans
Certain loans in the Corporation's commercial portfolio are considered leveraged transactions. These loans are typically used for mergers, acquisitions, business recapitalizations, refinancing and equity buyouts. To help mitigate the risk associated with these loans, the Corporation focuses on middle market companies with highly capable management teams, strong sponsors and solid track records of financial performance. Industries prone to cyclical downturns and acquisitions with a high degree of integration risk are generally avoided. Other considerations include the sufficiency of collateral, the level of balance sheet leverage and the adequacy of financial covenants. During the underwriting process, cash flows are stress-tested to evaluate the borrowers' abilities to handle economic downturns and an increase in interest rates.
The FDIC defines higher-risk commercial and industrial (HR C&I) loans for assessment purposes as loans generally with leverage of four times total debt to earnings before interest, taxes and depreciation (EBITDA) as well as three times senior debt to EBITDA, excluding certain collateralized loans.
The following table summarizes information about HR C&I loans, which represented 5 percent and 6 percent of total loans at December 31, 2023 and December 31, 2022, respectively.
(in millions)
December 31
20232022
Outstandings$2,814 $3,120 
Criticized332 393 
Net loan charge-offs recorded during the years ended December 31,5 20 
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Market and Liquidity Risk
Market risk represents the risk of loss due to adverse movement in prices, including interest rates, foreign exchange rates, commodity prices and equity prices. Liquidity risk represents the risk that the Corporation does not have sufficient access to funds to maintain its normal operations at all times or does not have the ability to raise or borrow funds at a reasonable cost at all times.
The Asset Liability Management Committee (ALCO) of the Corporation establishes and monitors compliance with the policies and risk limits pertaining to market and liquidity risk management activities. ALCO meets regularly to discuss and review market and liquidity risk management strategies and consists of executive and senior management from various areas of the Corporation, including treasury, finance, economics, lending, deposit gathering and risk management. Corporate Treasury mitigates market and liquidity risk under the direction of ALCO through the actions it takes to manage the Corporation's market, liquidity and capital positions.
The Corporation performs monthly liquidity stress testing to evaluate its ability to meet funding needs in hypothetical stressed environments. Such environments cover a series of scenarios, including both idiosyncratic and market-wide in nature, which vary in terms of duration and severity. Recent events have created greater uncertainty with respect to normal deposit patterns. Following the March 2023 banking industry disruption, the Corporation activated its contingency funding plan by increasing its cash position through wholesale funding channels and brokered deposits. The Corporation's evaluation as of December 31, 2023 projected that sufficient sources of liquidity were available under each series of events.
In addition to assessing liquidity risk on a consolidated basis, Corporate Treasury also monitors the parent company's liquidity and has established liquidity coverage requirements for meeting expected obligations without the support of additional dividends from subsidiaries. ALCO's policy on liquidity risk management requires the parent company to maintain sufficient liquidity to meet expected cash obligations, such as debt service, dividend payments and normal operating expenses, over a period of no less than 12 months. The Corporation had liquid assets of $1.4 billion on an unconsolidated basis at December 31, 2023.
Corporate Treasury and the Enterprise Risk Division support ALCO in measuring, monitoring and managing interest rate risk as well as all other market risks. Key activities encompass: (i) providing information and analyses of the Corporation's balance sheet structure and measurement of interest rate and all other market risks; (ii) monitoring and reporting of the Corporation's positions relative to established policy limits and guidelines; (iii) developing and presenting analyses and strategies to adjust risk positions; (iv) reviewing and presenting policies and authorizations for approval; and (v) monitoring of industry trends and analytical tools to be used in the management of interest rate and all other market and liquidity risks.
Interest Rate Risk
Net deferredinterest income is the primary source of revenue for the Corporation. Interest rate risk arises in the normal course of business due to differences in the repricing and cash flow characteristics of assets and liabilities, primarily through the Corporation's core business activities of extending loans and acquiring deposits. The Corporation's balance sheet is predominantly characterized by floating-rate loans funded by core deposits. Including the impact of interest rate swaps converting floating-rate loans to fixed, the Corporation's loan composition at December 31, 2023 was 40 percent fixed-rate, 51 percent overnight to 30-day rate, 6 percent 90-day and greater rates and 3 percent prime. The composition of the loan portfolio creates sensitivity to interest rate movements due to the imbalance between the faster repricing of the floating-rate loan portfolio versus deposit products. In addition, the growth and/or contraction in the Corporation's loans and deposits may lead to changes in sensitivity to interest rate movements in the absence of mitigating actions. Examples of such actions are purchasing fixed-rate investment securities, which provide liquidity to the balance sheet and act to mitigate the inherent interest rate sensitivity, as well as hedging with interest rate swaps and options. Other mitigating factors include interest rate floors on a portion of the loan portfolio.
The Corporation actively manages its exposure to interest rate risk with the principal objective of optimizing net interest income and the economic value of equity while operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity.
Since no single measurement system satisfies all management objectives, a combination of techniques is used to manage interest rate risk. These techniques examine the impact of interest rate risk on net interest income and the economic value of equity under a variety of alternative scenarios, including changes in the level, slope and shape of the yield curve utilizing multiple simulation analyses. Simulation analyses produce only estimates of net interest income as the assumptions used are inherently uncertain. Actual results may differ from simulated results due to many factors, including, but not limited to, the timing, magnitude and frequency of changes in interest rates, market conditions, regulatory impacts and management strategies.
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Sensitivity of Net Interest Income to Changes in Interest Rates
The analysis of the impact of changes in interest rates on net interest income under various interest rate scenarios is management's principal risk management technique. Management models a base-case net interest income under an unchanged interest rate environment using a static balance sheet and generates sensitivity scenarios by changing certain model assumptions. Each scenario includes assumptions such as loan growth, investment security prepayment levels, depositor behavior and overall balance sheet mix and growth which are in line with historical patterns. Additionally, the analysis assumes that all loan hedges qualify for hedge accounting. Changes in actual economic activity may result in a materially different interest rate environment as well as a balance sheet structure that is different from the changes management included in its simulation analysis. Model assumptions in the sensitivity scenarios at December 31, 2023 included for the rising rate scenarios, a modest increase in loan balances and a moderate decrease in deposit balances, and for the declining rate scenarios, a modest decrease in loan balances and a moderate increase in deposit balances. In addition, both scenarios assumed loan spreads held at current levels, an incremental interest-bearing deposit beta of approximately 48%, deposit mix shifts based on historical observations, partial reinvestment of securities portfolio cash flows and no additions to interest rate swaps.
The average balance of the securities portfolio included in the analysis was $17.4 billion for the year ended December 31, 2023 with an average yield of 2.10% and effective duration of 5.5 years.
The table below details components of the variable-rate loan swap portfolio at December 31, 2023.
Variable-Rate Loan Swaps (a)
(dollar amounts in millions)Notional AmountWeighted Average YieldYears to Maturity (b)
Swaps under contract at December 31, 2023 (c)$24,850 2.49 %3.9 
Weighted average notional active per period:
Full year 202322,3722.38 3.5
Full year 202423,5752.50 3.9
Full year 202522,9732.57 4.1
(a)Included $7.0 billion in swaps which no longer qualified for cash flow hedging designation following BSBY cessation. In January 2024, $4.2 billion of these swaps were re-designated, with the remaining expected to be re-designated in early 2024.
(b)Years to maturity calculated from a starting date of December 31, 2023.
(c)Includes forward starting swaps of $2.0 billion starting in 2024. Excluding forward starting swaps, the weighted average yield was 2.43%.
The analysis also includes interest rate swaps that convert $6.3 billion of fixed-rate medium- and long-term debt to variable rates through fair value hedges. Additionally, included in this analysis are $15.5 billion of loans that were subject to an average interest rate floor of 52 basis points at December 31, 2023. This base-case net interest income is then compared against interest rate scenarios in which short-term rates rise or decline 100 or 200 basis points (with a floor of zero percent) in a linear, non-parallel fashion from the base case over 12 months, resulting in an average change of 50 or 100 basis points over the period.
The table below, as of December 31, 2023 and 2022, displays the estimated impact on net interest income during the next 12 months by relating the base case scenario results to those from the rising and declining rate scenarios described above.
Estimated Annual Change
(dollar amounts in millions)20232022
December 31Amount%Amount%
Change in Interest Rates:Change in Interest Rates:
Rising 100 basis points$(36)(2 %)Rising 100 basis points$10 — %
(50 basis points on average)(50 basis points on average)
Declining 100 basis points23 1 Declining 100 basis points(72)(2)
(50 basis points on average)(50 basis points on average)
Rising 200 basis points(87)(4)Rising 200 basis points(7)— 
(100 basis points on average)(100 basis points on average)
Declining 200 basis points33 1 Declining 200 basis points(156)(5)
(100 basis points on average)(100 basis points on average)
In both the 100 and 200 basis point scenarios, sensitivity to declining interest rates shifted from reducing net interest income at December 31, 20202022 to benefiting net interest income at December 31, 2023, resulting from a decline in non-maturity deposits, partially offset by an increase in time deposits. In the 100 basis point scenario, sensitivity to rising interest rates shifted from benefiting net interest income at December 31, 2022 to reducing net interest income at December 31, 2023, while in the 200 basis point scenario, negative sensitivity to rising interest rates increased compared to December 31, 2022, resulting from the change in liability mix that occurred in 2023.
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At December 31, 2023, additional sensitivity scenarios applied the rising and declining 100 basis point scenario assumptions with a 60% incremental deposit beta relative to the base case scenario to assess the impact of the Corporation's deposit beta assumptions. In these rising and declining scenarios, net interest income decreased by $65 million and increased by $44 million, respectively, due to a more rapid repricing pace compared to the standard model assumptions. All scenarios presented for December 31, 2023 reflected a change in balance sheet composition following the March 2023 banking industry disruption, as the balance sheet maintained a higher concentration of cash as well as increased wholesale funding and brokered deposits, which contributed to the decrease in net interest income in all scenarios presented.
Sensitivity of Economic Value of Equity to Changes in Interest Rates
In addition to the simulation analysis on net interest income, an economic value of equity analysis provides an alternative view of the interest rate risk position. The economic value of equity is the difference between the estimate of the economic value of the Corporation's financial assets, liabilities and off-balance sheet instruments, derived through discounting cash flows based on actual rates at the end of the period, and the estimated economic value after applying the estimated impact of rate movements. The Corporation primarily monitors the percentage change on the base-case economic value of equity. The economic value of equity analysis is based on an immediate parallel 100 or 200 basis point shock with a floor of zero percent.
The table below, as of December 31, 2023 and December 31, 2022, displays the estimated impact on the economic value of equity from the interest rate scenario described above.
(dollar amounts in millions)20232022
December 31Amount%Amount%
Change in Interest Rates:Change in Interest Rates:
Rising 100 basis points$(567)(4 %)Rising 100 basis points$(417)(3 %)
Declining 100 basis points794 6 Declining 100 basis points627 4 
Rising 200 basis points(1,254)(10)Rising 200 basis points(978)(7)
Declining 200 basis points1,363 11 Declining 200 basis points1,033 7 
The negative sensitivity of the economic value of equity to rising rates increased from December 31, 2022 to December 31, 2023 due to deposit runoff and adjustments to deposit behavioral assumptions, partially offset by a declining notional amount of cash flow swaps and a smaller securities portfolio. Sensitivity to declining rates increased the economic value of equity due to the same factors.
Loans by Maturity and Interest Rate Sensitivity
The contractual maturity distribution of the loan portfolio is presented below.
Loans Maturing
(in millions)
December 31, 2023
Within One
Year (a)		After One
But Within
Five Years		After Five But Within Fifteen YearsAfter Fifteen YearsTotal
Commercial loans$10,616 $15,535 $967$133 $27,251 
Real estate construction loans1,192 3,612 2754 5,083 
Commercial mortgage loans2,784 7,707 3,16926 13,686 
Lease financing270 383 154— 807 
International loans508 518 76— 1,102 
Residential mortgage loans5 7 2151,662 1,889 
Consumer loans487 152 731,583 2,295 
Total$15,862 $27,914 $4,929 $3,408 $52,113 
(a)Includes demand loans, loans having no stated repayment schedule or maturity and overdrafts.
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The interest rate composition of loans with a maturity date over one year are presented below based on contractual terms.
Loans Maturing After One Year
(in millions)
December 31, 2023
Predetermined (Fixed) Interest RateFloating Interest RateTotal
Commercial loans$375 $16,260 $16,635 
Real estate construction loans74 3,817 3,891 
Commercial mortgage loans1,524 9,378 10,902 
Lease financing286 251 537 
International loans3 591 594 
Residential mortgage loans522 1,362 1,884 
Consumer loans28 1,780 1,808 
Total$2,812 $33,439 $36,251 
Risk Management Derivative Instruments
The Corporation uses investment securities and derivative instruments as asset and liability management tools with the overall objective of managing the volatility of net interest income from changes in interest rates. These tools assist management in achieving the desired interest rate risk management objectives. Activity related to derivative instruments currently involves interest rate swaps effectively converting fixed-rate medium- and long-term debt to a floating rate as well as variable rate loans to a fixed rate. Notional activity for 2023 included $55the impact of LIBOR transition for centrally-cleared swaps, where LIBOR-based swaps were replaced with short-dated LIBOR bridge swaps that matured in 2023 and surviving forward-starting Secured Overnight Financing Rate (SOFR) swaps.
(in millions)
Risk Management Notional Activity
Interest
Rate
Contracts		Foreign
Exchange
Contracts		Totals
Balance at January 1, 2022$10,700 $452 $11,152 
Additions20,850 8,638 29,488 
Maturities/amortizations(1,800)(8,698)(10,498)
Balance at December 31, 2022$29,750 $392 $30,142 
Additions17,100 9,534 26,634 
Maturities/amortizations(9,150)(9,366)(18,516)
Terminations(6,550)— (6,550)
Balance at December 31, 2023$31,150 $560 $31,710 
The notional amount of risk management interest rate swaps totaled $31.2 billion at December 31, 2023, which included cash flow swaps that convert $24.9 billion of variable-rate loans to a fixed rate as well as fair value swaps that convert $6.3 billion of fixed-rate medium- and long-term debt to a floating rate. Risk management interest rate swaps generated $715 million of net fees from PPP loans.interest expense for the year ended December 31, 2023, compared to no impact for the year ended December 31, 2022. Of the $24.9 billion of cash flow swaps, $7.0 billion were un-designated for accounting purposes as of December 31, 2023. Refer to Note 8 to the consolidated financial statements for further discussion of de-designated interest rate hedges.
Loan fees on unused commitmentsIn addition to interest rate swaps, the Corporation employs various other types of derivative instruments as offsetting positions to mitigate exposures to foreign currency risks associated with specific assets and net origination fees relatedliabilities (e.g., customer loans or deposits denominated in foreign currencies). Such instruments may include foreign exchange spot and forward contracts as well as foreign exchange swap agreements.
Further information regarding risk management derivative instruments is provided in Note 8 to loans soldthe consolidated financial statements.
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Customer-Initiated and Other Derivative Instruments
(in millions)
Customer-Initiated and Other Notional Activity
Interest
Rate
Contracts		Energy
Derivative
Contracts		Foreign
Exchange
Contracts		Totals
Balance at January 1, 2022$21,000 $7,770 $1,716 $30,486 
Additions7,593 14,145 42,017 63,755 
Maturities/amortizations(3,017)(6,002)(41,029)(50,048)
Terminations(5,278)(1,392)— (6,670)
Balance at December 31, 2022$20,298 $14,521 $2,704 $37,523 
Additions16,207 11,510 44,060 71,777 
Maturities/amortizations(5,651)(10,761)(44,013)(60,425)
Terminations(8,384)(1,464)— (9,848)
Balance at December 31, 2023$22,470 $13,806 $2,751 $39,027 
The Corporation sells and purchases interest rate caps and floors and enters into foreign exchange contracts, interest rate swaps and energy derivative contracts to accommodate the needs of customers requesting such services. Changes in the fair value of customer-initiated and other derivatives are recognized in earnings as they occur. To limit the market risk of these activities, the Corporation generally takes offsetting positions with dealers. The notional amounts of offsetting positions are included in the table above. Customer-initiated and other notional activity represented 55 percent of total interest rate, energy and foreign exchange contracts at both December 31, 2023 and 2022, respectively.
Further information regarding customer-initiated and other derivative instruments is provided in Note 8 to the consolidated financial statements.
LIBOR Transition
On July 27, 2017, the United Kingdom’s Financial Conduct Authority (FCA), which regulates LIBOR, publicly announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. Effective March 2021, the FCA confirmed that certain LIBOR tenors would no longer be supported after December 31, 2021 and that the remaining tenors, including those most commonly used by the Corporation, would no longer be supported after June 30, 2023. The Corporation had substantial exposure to LIBOR-based products, ceased originating LIBOR-based products in the fourth quarter 2021 and has worked to remediate its outstanding LIBOR contracts. As of December 31, 2023, LIBOR transition was substantially complete.
BSBY Cessation
On November 15, 2023, the Bloomberg Index Services Limited (Bloomberg) announced that it will discontinue publishing the BSBY on November 15, 2024; accordingly, the Corporation was required to “de-designate” $7.0 billion of interest rate swaps used in cash flow hedges of certain BSBY-indexed loans and reclassify amounts recognized in accumulated other comprehensive income into earnings. For each de-designated swap, settlement of interest payments and changes in fair value are recorded as risk management hedging losses within other noninterest income instead of net interest income until the swap is re-designated. In January 2024, $4.2 billion of these swaps were re-designated, with the remaining expected to be re-designated in early 2024. The net impact of BSBY cessation to interest income on commercial loans was a $3 million benefit for the year ended December 31, 2023. Additionally, the Corporation recognized a net loss of $91 million in other noninterest income. Refer to Note 8 to the consolidated financial statements for further discussion of de-designated interest rate hedges.
At December 31, 2023, the Corporation had $33.0 billion of exposure to BSBY-based products, including $21.7 billion in loans and $11.3 billion in interest rate swaps. The Corporation is currently evaluating contracts to ensure appropriate fallback language is included, and will remediate contracts as necessary. The Corporation expects that the majority of BSBY-based contracts will organically transition to SOFR over the upcoming year, with any remaining contracts transitioning to SOFR through fallback language at the first repricing date after BSBY cessation occurs in November 2024.
Sources of Liquidity
The Corporation maintains a liquidity position that it believes will adequately satisfy its financial obligations while taking into account potential commitment draws and deposit run-off that may occur in the normal course of business. The majority of the Corporation's balance sheet is funded by customer deposits. Cash flows from loan repayments, increases in deposit accounts (including brokered deposits), activity in the securities portfolio and wholesale funding channels serve as the Corporation's primary liquidity sources.
The Corporation satisfies incremental liquidity needs with either liquid assets or external funding sources. Available liquidity includes cash, FHLB advances and Federal Reserve Bank (FRB) borrowing, comprised of borrowing through the discount window and the newly established Bank Term Funding Program (BTFP). The Corporation has pledged its investment securities portfolio to access wholesale funding as needed and does not intend to sell or restructure securities at this time.
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The Bank is a member of the FHLB of Dallas, Texas, which provides short- and long-term funding to its members through advances collateralized by real estate-related loans, certain government agency-backed securities and other eligible assets. Actual borrowing capacity is contingent on the amount of collateral pledged to the FHLB and the fair value of pledged assets, as well as applicable FHLB haircuts.
At December 31, 2023, the Bank had pledged real estate-related loans totaling $21.9 billion and investment securities totaling $6.6 billion to the FHLB, which provided for Credit Lossesup to $17.1 billion of collateralized borrowing with the FHLB.
The FRB provides liquidity through its discount window, where banks may borrow funds based on the discounted fair value of pledged assets. Additionally, in March 2023, the FRB established the BTFP in response to the 2023 industry disruption, offering loans with up to one year in maturity to eligible depository institutions in exchange for pledged collateral in the form of U.S Treasuries, agency debt and mortgage-backed securities and other qualifying assets. Unlike other funding sources, borrowing capacity under the BTFP is based on the par value, not fair value, of collateral.
At December 31, 2023, the Bank had pledged loans totaling $24.6 billion and investment securities totaling $7.7 billion to the FRB, which provided for up to $21.0 billion and $9.3 billion of collateralized borrowing through the discount window and BTFP program, respectively. The Bank did not rely on the BTFP facility as a funding source, except to perform an operational test at the onset, and does not plan to use the facility before its announced expiration on March 11, 2024. Total available collateralized borrowings with the FRB was $30.3 billion at December 31, 2023.
The table below details the Corporation's sources of available liquidity at December 31, 2023.
(dollar amounts in millions)Total CapacityBorrowings OutstandingAvailable Liquidity
Cash on deposit with FRB (a)$7,860 
FHLB$17,081 $7,550 9,531 
FRB:
BTFP9,328 — 9,328 
Discount Window20,953 — 20,953 
Total available liquidity$47,672 
(a) Included in interest-bearing deposits with banks on the Consolidated Balance Sheet.
The Corporation may also use brokered deposits and external debt as additional sources of funding, and maintains a shelf registration statement with the Securities and Exchange Commission through which it may issue securities.The ability of the Corporation and the Bank to raise unsecured funding at competitive rates is impacted by rating agencies' views of the credit quality, liquidity, capital, earnings and other relevant factors related to the Corporation and the Bank. As of December 31, 2023, the three major rating agencies had assigned the following ratings to long-term senior unsecured obligations of the Corporation and the Bank, as well as long-term deposits at the Bank. A security rating is not a recommendation to buy, sell, or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating.
Debt RatingsDeposit Ratings
Comerica IncorporatedComerica BankComerica Bank
December 31, 2023RatingRatingOutlookRating
Moody’s Investors ServiceBaa1Baa1NegativeA1
Fitch RatingsA-A-NegativeA
Standard and Poor’sBBBBBB+Stablenot rated
Deposit Concentrations and Uninsured Deposits
The Corporation's focus is commercial customers, and accordingly, it has a larger percentage of uninsured deposits relative to financial institutions with a higher consumer focus. These deposits are well-diversified between geographies, industries and customers. At December 31, 2023, the Retail Bank and general Middle Market segments, both highly diversified and granular, accounted for 37% and 27% of the total deposit base, respectively.
Uninsured deposits are defined as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit and amounts in any other uninsured investment or deposit account that are classified as deposits and are not subject to any federal or state deposit insurance regimes.
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December 31, 2023December 31, 2022
(Dollar amount in millions)AmountPercentage of total depositsAmountPercentage of total deposits
Total uninsured deposits, as calculated per regulatory guidelines$31,485 47 %$45,492 64 %
Less: affiliate deposits(4,064)(4,458)
Total uninsured deposits, excluding affiliate deposits$27,421 41 %$41,034 57 %
Time deposits otherwise uninsured, which consist of foreign office time deposits, totaled $13 million at December 31, 2023 and all mature in three months or less. Collateralized deposits, consisting of trust deposits as well as deposits of public entities and state and local government agencies, totaled $687 million at December 31, 2023, compared to $843 million at December 31, 2022.
Potential Uses of Liquidity
Various financial obligations such as contractual obligations, unfunded commitments and deposit withdrawals may require future cash payments by the Corporation. Certain obligations are recognized on the Consolidated Balance Sheets, while others are off-balance sheet under U.S. generally accepted accounting principles.
The following table summarizes the Corporation's material noncancelable contractual obligations and future required minimum payments. Refer to Notes 10, 11, 12, and 25 to the consolidated financial statements for further information regarding these contractual obligations.
Selected Contractual Obligations
Minimum Payments Due by Period
(in millions)
December 31, 2023
TotalLess than
1 Year		1-3
Years		4-5
Years		More than
5 Years
Deposits without a stated maturity (a)$58,476 $58,476 
Certificates of deposit and other deposits with a stated maturity (a)8,286 8,177 $88 $18 $3 
Short-term borrowings (a)3,565 3,565 — — — 
Medium- and long-term debt (a)6,300 500 2,750 2,000 1,050 
Operating leases460 70 129 92 169 
Commitments to fund low income housing partnerships
Other long-term obligations (b)
Total contractual obligations$77,087 $70,788 $2,967 $2,110 $1,222 
Medium- and long-term debt (parent company only) (a) (b)$800 $— $250 $— $550 
(a)Deposits and borrowings exclude accrued interest.
(b)Parent company only amounts are included in the medium- and long-term debt minimum payments above.
In addition to contractual obligations, other commercial commitments of the Corporation impact liquidity. These include unused commitments to extend credit, standby letters of credit and financial guarantees, and commercial letters of credit. The following table summarizes the Corporation's commercial commitments and expected expiration dates by period.
Commercial Commitments
Expected Expiration Dates by Period
(in millions)
December 31, 2023
TotalLess than
1 Year		1-3
Years		4-5
Years		More than
5 Years
Unused commitments to extend credit$31,385 $8,091 $12,497 $6,986 $3,811 
Standby letters of credit and financial guarantees3,586 3,196 231 158 1 
Commercial letters of credit48 48 — — — 
Total commercial commitments$35,019 $11,335 $12,728 $7,144 $3,812 
Since many of these commitments expire without being fully drawn, and each customer must continue to meet the conditions established in the contract, the total amount of these commercial commitments does not necessarily represent the future cash requirements of the Corporation. Refer to Note 8 to the consolidated financial statements for a further discussion of these commercial commitments.
Other Market Risks
Market risk related to the Corporation's trading instruments is not significant, as trading activities are limited. Certain components of the Corporation's noninterest income, primarily fiduciary income, are at risk to fluctuations in the market values of underlying assets, particularly equity and debt securities. Other components of noninterest income, primarily brokerage fees, are at risk to changes in the volume of market activity.
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Operational Risk
Operational risk represents the risk of loss resulting from inadequate or failed internal processes and people, or from external events, excluding in most cases those driven by technology (see Technology Risk below). The Corporation's definition of operational risk includes fraud; employment practice and workplace safety; clients, products and business practice; business continuity or disaster recovery; execution, delivery, and process management; third party and model risks. The definition does not include strategic or reputational risks. Although operational losses are experienced by all companies and are routinely incurred in business operations, the Corporation recognizes the need to identify and control operational losses and seeks to limit losses to a level deemed appropriate by management, as outlined in the Corporation’s risk appetite statement. The appropriate risk level is determined through consideration of the nature of the Corporation's business and the environment in which it operates, in combination with the impact from, and the possible impact on, other risks faced by the Corporation. Operational risk is mitigated through a system of internal controls that are designed to keep operating risks at appropriate levels. The Operational Risk Management Committee monitors risk management techniques and systems. The Corporation has developed a framework that includes a centralized operational risk reporting function in the Enterprise Risk Division and business/support unit risk liaisons responsible for managing operational risk specific to the respective business lines.
Technology Risk
    Technology risk represents the risk of loss or adverse outcomes arising from the people, processes, applications and infrastructure that support the technology environment. The Corporation's definition of technology risk includes technology delivery risk, technology investment risk, cybersecurity risk, information security risk and information management risk. Technology risk is inclusive of the risks associated with the execution of technology processes and activities by third-party contractors and suppliers to the Corporation. Other risk types may materialize in the event of a technology risk event, such as the risk of a financial reporting error or regulatory non-compliance, and the impact of such risks are highly interdependent with operational risk.
    The Technology Risk Committee, comprising senior and executive business unit managers, as well as managers responsible for technology, cybersecurity, information security and enterprise risk management, oversees technology risk. The Technology Risk Committee also ensures that appropriate actions are implemented in business units to mitigate risk to an acceptable level.
Compliance Risk
Compliance risk represents the risk of sanctions or financial loss resulting from the Corporation's failure to comply with all applicable laws, regulations and standards of good banking practice. The impact of such risks is highly interdependent with strategic risk, as the reputational impact from compliance breaches can be severe. Activities which may expose the Corporation to compliance risk include, but are not limited to, those dealing with the prevention of money laundering, privacy and data protection, community reinvestment initiatives, fair lending, consumer protection, employment and tax matters, over-the-counter derivative activities and other regulated activities.
The Enterprise-Wide Compliance Committee, comprising senior and executive business unit managers, as well as managers responsible for compliance, audit and overall risk, oversees compliance risk. This enterprise-wide approach provides a consistent view of compliance across the organization. The Enterprise-Wide Compliance Committee also ensures that appropriate actions are implemented in business units to mitigate risk to an acceptable level.
Strategic Risk
Strategic risk represents the risk of inadequate returns or possible losses due to impairment of reputation, failure to fully develop and execute business plans, failure to assess current and new opportunities in business, markets and products, failure to determine appropriate consideration for risks accepted, and any other event not identified in the defined risk categories of credit, market and liquidity, operational, technology or compliance risks. Mitigation of the various risk elements that represent strategic risk is achieved through numerous metrics and initiatives to help the Corporation better understand, measure and report on such risks.
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CRITICAL ACCOUNTING ESTIMATES
The Corporation’s consolidated financial statements are prepared based on the application of accounting policies, the most significant of which are described in Note 1. These policies require numerous estimates and strategic or economic assumptions, which may prove inaccurate or subject to variations. Changes in underlying factors, assumptions or estimates could have a material impact on the Corporation’s future financial condition and results of operations. At December 31, 2023, the most critical of these estimates related to the allowance for credit losses, fair value measurement, goodwill, pension plan accounting and income taxes. These estimates were reviewed with the Audit Committee of the Corporation’s Board of Directors and are discussed more fully below.
ALLOWANCE FOR CREDIT LOSSES
In accordance with CECL, the allowance for credit losses, which includes both the allowance for loan losses and the allowance for credit losses on lending-related commitments.
The Corporation disaggregatescommitments, is calculated with the loan portfolio into segmentsobjective of maintaining a reserve for purposes of determining the allowance for credit losses. These segments are based on the level at which the Corporation develops, documents and applies a systematic methodology to determine the allowance for credit losses. The Corporation's portfolio segments are business loans and retail loans. Business loans include the commercial, real estate construction, commercial mortgage, lease financing and international loan portfolios. Retail loans consist of residential mortgage and consumer loans, including home equity loans.
Effective January 1, 2020, the Corporation adopted the provisions of Accounting Standards Update (ASU) No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," commonly referred to as the current expected credit loss (CECL) model, for all financial assets, except those accounted for at fair value through net income, using the modified retrospective approach.
Under Topic 326, current expected credit losses are estimated over the contractual life of the loan portfolio, considering all available relevant information, including historical and current conditions as well as reasonable and supportable forecasts of future events. The previous accounting principle estimated probable, estimable losses inherent in the portfolio.
    At adoption, the Corporation’s estimate of current expected credit losses in accordance with Topic 326 resulted in a $17 million day-one decrease in the overall allowance for credit losses, from $668 million at December 31, 2019 under the incurred loss model. The Corporation recognized a corresponding $13 million increase to retained earnings and a $4 million reduction to deferred tax assets. A similar adjustment at December 31, 2019 would have caused a 2-basis-point increase in the Common Equity Tier 1 (CET1) capital ratio. Business loans, comprising approximately 91 percent of the Corporation’s total loan portfolio at transition, consist of loans and lending arrangements with generally short contractual maturities. As a result, the allowance for credit losses for business loans decreased $42 million. The allowance for credit losses increased $25 million for retail loans, given their longer contractual maturities.
For further information on the Allowance for Credit Losses, refer to Note 4.
Allowance for Loan Losses
The allowance for loan losses is estimated on a quarterly basis and represents management’s estimates of current expected credit losses in the Corporation’s loan portfolio. Pools of loans with similar risk characteristics are collectively evaluated while loans that no longer share risk characteristics with loan pools are evaluated individually.
Collective loss estimates are determined by applying loss factors, designed to estimate current expected credit losses, to amortized cost balances over the remaining contractual life of the collectively evaluated portfolio. Loans with similar risk characteristics are aggregated into homogeneous pools. Business loans are assigned to pools based primarily on business line and the Corporation’s internal risk rating system. For retail loans, pools are based on loan type, past due status and credit scores. LossThe Corporation uses loss factors, are based on estimated probability of default for each pool, set to a default horizon based on contractual life,internal risk ratings and loss given default. Historicaldefault, to determine the allowance for credit losses for the majority of its portfolio. Management applies loss factors to pools of loans and lending-related commitments with similar risk characteristics, calibrates these factors using economic forecasts and incorporates qualitative adjustments. For further discussion of the methodology used in the determination of the allowance for credit losses, refer to Note 1 to the consolidated financial statements. For further discussion on the economic forecast incorporated into the 2023 model, refer to the “Risk Management” section of this financial review.
Management's determination of the appropriateness of the allowance is based on periodic evaluations of the loan portfolio, lending-related commitments, current as well as forecasted economic factors and other relevant information. The calculation is inherently subjective and requires management to exercise significant judgment in developing assumptions for the estimate, the most significant of which are the loan risk rating process, development of economic forecasts and application of qualitative adjustments. Sensitivities are disclosed to demonstrate how changes in loan risk ratings and economic forecast scenarios may impact the allowance for credit losses. Sensitivities only consider changes to each specific assumption in isolation and their impact to the quantitative modeled results. They do not contemplate impacts to the qualitative framework.
Loan Risk Rating Process
Reserve factors are applied to pools of loans based on risk characteristics, including the Corporation's internal risk rating system; therefore, loss estimates are highly dependent on the accuracy of the risk rating assigned to each loan. The inherent imprecision in the risk rating system resulting from inaccuracy in assigning and/or entering risk ratings in the loan accounting system is monitored by the Corporation's asset quality review function. Changes to internal risk ratings, beyond the forecasted migration inherent in the credit models, would result in a different estimated allowance for credit losses. To illustrate, if 5 percent of the individual risk ratings were adjusted down by one rating across all pools, the allowance for loan losses as of December 31, 2023 would change by approximately $6 million.
Forecasted Economic Variables
Management utilizes models through which historical reserve factor estimates are calibrated to economic forecasts over the reasonable and supportable forecast period based on the projected performance of specific economic variables that statistically correlate with each of the probability of default and loss given default pools. At least annually, management considers different models when estimating credit losses, selecting ones that most reasonablyLoss estimates revert to historical loss experience for contractual lives beyond the forecast credit losses in the relevant economic environment.
The calculation of current expected credit losses is inherently subjective, as it requires management to exercise judgment in determining appropriate factors used to determine the allowance. Some of the most significant factors in the
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

quantitative allowance estimate are assigning internal risk ratings to loans, selecting the economic forecasts used to calibrate the reserve factors and determining the reasonable and supportable forecast period.
•Internal Risk Ratings: Loss factors are dependent on loan risk ratings for business loans. Risk ratings are assigned at origination, based on inherent credit risk, and may be updated based on new information that becomes available, periodic reviews of credit quality, a change in borrower performance or modifications to lending agreements.
•Economic Forecasts: Management selects economic variables it believes to be most relevant based on the composition of the loan portfolio and customer base, including forecasted levels of employment, gross domestic product, corporate bond and treasury spreads, industrial production levels, consumer and commercial real estate price indices as well as housing statistics. Different
The allowance for credit losses is highly sensitive to the economic forecasts used to develop the estimate. Due to the high level of uncertainty regarding significant assumptions, the Corporation evaluated a range of economic scenarios, including a more severe economic forecast scenario, with varying responses to current economic risks. The following table summarizes the more severe forecast scenario for the economic variables that are most impactful.
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Economic VariableMore Severe Forecast
Real GDP growthContracts through third quarter 2024, peaking at a decline of 3.5 percent annualized in second quarter 2024, subsequently improving to a 2.2 percent annual growth rate by the end of the forecast period.
Unemployment rateIncreases to 7.7 percent by first quarter 2025 followed by a gradual decline to 6.9 percent by the end of the forecast period.
Corporate BBB bond to 10-year Treasury bond spreadsSpreads widen to a peak of over 4.2 percent before gradually narrowing to 2.3 percent by the end of the forecast period.
Oil PricesDecline to $53 per barrel by first quarter 2025 before increasing to $61 per barrel by the end of the forecast period.
Selecting a different forecast in the current environment could result in a significantly different estimated allowance for credit losses. To illustrate, absent model overlays and other qualitative adjustments that are part of the quarterly reserving process, if the Corporation selected the more severe scenario to inform its models, the allowance for credit losses as of December 31, 2023 would increase by approximately $376 million. However, factoring in model overlays and qualitative adjustments could result in a materially different estimate under a more severe scenario.
Qualitative Adjustments and Model Overlays
The Corporation includes qualitative adjustments, as appropriate, intended to capture the impact of uncertainties not reflected in the quantitative estimate, including foresight risk, model imprecisions and input imprecisions. Qualitative adjustments for foresight risk reflect the inherent imprecision in economic forecasts and may be included based on management’s evaluation of different forecast scenarios, ranging from more benign to more severe, are evaluated each reporting period to forecast losses over the contractual life of the loan portfolio.
•Forecast Period: Economic forecasts are applied over the period management believes it can estimate reasonable and supportable forecasts. Forecast periods may be adjusted in response to changes in the economic environment. To estimate losses for contractual periods that extend beyond the forecast horizon, the Corporation reverts to an average historical loss experience. The Corporation typically forecasts economic variables over a two-year horizon, followed by an immediate reversion to an average historical loss experience that generally incorporates a full economic cycle. Management reviews this methodology on at least an annual basis.
The allowance for loan losses also includes qualitative adjustments to bring the allowance to the level management believes is appropriate based on factors that have not otherwise been fully accounted for, including adjustments for foresight risk, input imprecision and model imprecision. Foresight risk reflects the inherent imprecision in forecasting economic variables, including determining the depth and duration of economic cycles and their impact to relevant economic variables. The Corporation may make qualitative adjustments based on its evaluation of different forecast scenarios and known recent events impacting relevant economic variables. Input imprecision factors address the risk that certain model inputs may not reflect all available information including (i) risk factors that have not been fully addressed in internal risk ratings, (ii) changes in lending policies and procedures, (iii) changes in the level and quality of experience held by lending management, (iv) imprecision in the risk rating system and (v) limitations in data available for certain loan portfolios.Corporation’s portfolio. Model imprecision considers known model limitationsadjustments and model updates not yet fully reflectedoverlays may be included to mitigate known limitations in the quantitative estimate.
    The determination of the appropriate qualitative adjustmentmodels. Input imprecision includes adjustments for portfolios where recent historical losses exceed expected losses or known recent events are expected to alter risk ratings once evidence is based on management's analysis of current and expected economic conditions and their impact to the portfolio,acquired, as well as internal credit risk movements and a qualitative assessment of the lending environment, including underwriting standards. Management recognizesstandards, current economic and political conditions, and other factors affecting credit quality. Qualitative reserves at December 31, 2023 primarily included adjustments for uncertainties related to forecasted economic variables.
Other Considerations
To the sensitivity of various assumptions madeextent actual outcomes differ from management estimates, additional provision for credit losses may be required that would adversely impact earnings in future periods. The allowance is assigned to business segments, and any earnings impact resulting from actual outcomes differing from management estimates would primarily affect the quantitative modeling of expected lossesCommercial Bank segment.
FAIR VALUE MEASUREMENT
Investment securities available-for-sale, derivatives and deferred compensation plan assets and associated liabilities are recorded at fair value on a recurring basis. Additionally, from time to time, other assets and liabilities may adjust reserves depending upon the level of uncertainty that currently exists in one or more assumptions.
Credit losses forbe recorded at fair value on a nonrecurring basis, such as impaired loans that no longer share risk characteristics with the loan pools are estimated on an individual basis. Individual credit loss estimates are typically performed for nonaccrual loans and modified loans classified as TDRs and arehave been measured based on one of several methods, including the estimated fair value of the underlying collateral, observableloans held-for-sale recorded at the lower of cost or market, other real estate (primarily foreclosed property), nonmarketable equity securities and certain other assets and liabilities. Nonrecurring fair value adjustments typically involve write-downs of similar debtindividual assets or the presentapplication of lower of cost or fair value of expected cash flows. The Corporation considers certain loans to be collateral-dependent if the borroweraccounting.
Fair value is experiencing financial difficulty and management expects repayment for the loan to be substantially through the operation or salean estimate of the collateral. For collateral-dependent loans, lossexchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (i.e., not a forced transaction, such as a liquidation or distressed sale) between market participants at the measurement date and is based on the assumptions market participants would use when pricing an asset or liability. Fair value measurement and disclosure guidance establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. Notes 1 and 2 to the consolidated financial statements include information about the fair value hierarchy, the extent to which fair value is used to measure assets and liabilities, as well as the valuation methodologies and key inputs used.
At December 31, 2023, assets and liabilities measured using observable inputs that are classified as Level 1 or Level 2 represented substantially all of total assets and liabilities recorded at fair value, respectively. Valuations generated from model-based techniques that use at least one significant assumption not observable in the market are considered Level 3 and reflect estimates of assumptions market participants would use in pricing the asset or liability. The valuation of Level 3 assets and liabilities are based onconsidered critical accounting estimates.
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GOODWILL
Goodwill is initially recorded as the excess of the purchase price over the fair value of collateral, less estimated cost to sell (if applicable). Collateral values supporting individuallythe net assets acquired in a business combination and is subsequently evaluated loans are assessed quarterly and appraisals are typically obtained at least annually.annually for impairment. Goodwill impairment testing is performed at the reporting unit level, equivalent to a business segment or one level below. The Corporation has three reporting units: the Commercial Bank, the Retail Bank, and Wealth Management. At December 31, 2023 and 2022, goodwill totaled $635 million, including $473 million allocated to the Commercial Bank, $101 million allocated to the Retail Bank, and $61 million allocated to Wealth Management.
The total allowance for loan lossesCorporation performs its annual evaluation of goodwill impairment in the third quarter of each year and may elect to perform a quantitative impairment analysis or first conduct a qualitative analysis to determine if a quantitative analysis is sufficientnecessary. Additionally, the Corporation evaluates goodwill impairment on an interim basis if events or changes in circumstances between annual tests indicate additional testing may be warranted to absorb expected credit losses overdetermine if goodwill might be impaired.
During the contractual lifethird quarter of 2023, the Corporation elected to perform a quantitative impairment analysis. The estimated fair values of the portfolio. Unanticipated events impactingreporting units were determined using a blend of two commonly used valuation techniques: the economy, including political instability or global events affectingmarket approach and the U.S. economy, could cause changesincome approach. For the market approach, valuations of reporting units considered a combination of earnings and equity multiples from companies with characteristics similar to the reporting unit. Since the fair values determined under the market approach are representative of noncontrolling interests, the valuations incorporated a control premium. For the income approach, estimated future cash flows were derived from internal forecasts and economic expectations for each reporting unit. In the short- and mid-term, forecasts incorporated current economic conditions and impacts of expected monetary policy decisions by the Federal Reserve Bank. Long-term projections reflected normalized rate and credit environments, as well as a long-term rate of return for each reporting unit. Projections were discounted using an applicable discount rate to calculate the fair value. The discount rate was based on the imputed cost of equity capital for each reporting unit, which incorporates the risk-free rate of return, a market equity risk premium, potential stock volatility, and a size risk premium. The discount rate further reflected the uncertainty of current economic forecasts that resultconditions and potential impacts to the forecasted financial information.
The combined fair value of all units was compared to the Corporation's market capitalization for reasonableness. At the conclusion of the quantitative impairment test in the third quarter 2023, the estimated fair values of all reporting units substantially exceeded their carrying amounts, including goodwill. The Corporation performed a hypothetical sensitivity analysis to evaluate the impact to the estimated fair value of each reporting unit from an unanticipatedadverse change in the discount rate. A 100 basis point increase in the allowance. Significant increasesdiscount rate would result in the fair value of each reporting unit to continue to substantially exceed its carrying value.
The Corporation continues to monitor economic conditions that could significantly impact the impairment analysis and result in future goodwill impairment charges that, if incurred, could have a material adverse effect on the Corporation's results of operations in the period such charges are recognized. Additionally, any new legislative or regulatory changes not anticipated in management's expectations may cause the fair value of one or more of the reporting units to fall below the carrying value, resulting in a goodwill impairment charge. Any impairment charge would not affect the Corporation's regulatory capital ratios, tangible common equity ratio or liquidity position.
PENSION PLAN ACCOUNTING
The Corporation has a qualified and a non-qualified defined benefit pension plan. Effective January 1, 2017, benefits are calculated using a cash balance formula based on years of service, age, compensation and an interest credit based on the 30-year Treasury rate. Participants under age 60 as of December 31, 2016 are eligible to receive a frozen final average pay benefit in addition to amounts earned under the cash balance formula. Participants age 60 or older as of December 31, 2016 continue to be eligible for a final average pay benefit. The Corporation makes assumptions concerning future events that will determine the amount and timing of required benefit payments, funding requirements and defined benefit pension expense. The major assumptions are the discount rate used in determining the current benefit obligation, the long-term rate of return expected on plan assets, mix of assets within the portfolio exposuresand the projected mortality rate.
The discount rate is determined by matching the expected cash flows of the pension plans to a portfolio of high quality corporate bonds as of the measurement date, December 31. The long-term rate of return expected on plan assets is set after considering both long-term returns in the general market and long-term returns experienced by the assets in the plan. The current target asset allocation model for the plans is provided in Note 17 to the consolidated financial statements. The expected returns on these various asset categories are blended to derive one long-term return assumption. The assets are primarily invested in certain collective investment funds, common stocks, U.S. Treasury and other U.S. government agency securities, as well as corporate and municipal bonds and notes. Mortality rate assumptions are based on mortality tables published by third
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parties such as the Society of Actuaries, considering other available information including historical data as well as studies and publications from reputable sources.
The Corporation reviews its pension plan assumptions on an annual basis with its actuarial consultants to determine if the assumptions are reasonable and adjusts the assumptions to reflect changes in future expectations. The major assumptions used to calculate 2024 and 2023 defined benefit plan pension expense (benefit) were as follows:
2024 2023 
Discount rate5.33 %5.60 %
Long-term rate of return on plan assets6.75 %6.50 %
Mortality table:
Base table (a)Pri-2012Pri-2012
Mortality improvement scale (a)MP-2020MP-2020
(a)Issued by the Society of Actuaries
Defined benefit plan benefit is expected to increase $19 million to approximately $45 million in 2024, compared to a benefit of $26 million in 2023. This includes service cost expense of $37 million and a benefit from other components of $82 million. Service costs are included in salaries and benefits expense, while the benefit from other components are included in other noninterest expenses on the Consolidated Statements of Income.
The Corporation’s pension plan is most sensitive to changes in discount rate and long-term rate of return. A change to the discount rate implies a corresponding change in interest rates that affect the value of the plan’s fixed income assets. An increase of 25 basis points to the discount rate, including the effect of higher interest rates on the plan’s fixed income assets, would result in a net increase to pension expense of $6 million, while a decrease of 25 basis points would reduce pension expense by $6 million. Increasing the long-term rate of return by 25 basis points would reduce pension expense by $7 million, while a decrease of 25 basis points would increase pension expense by $7 million.
Due to the long-term nature of pension plan assumptions, actual results may differ significantly from the actuarial-based estimates. Differences resulting in actuarial gains or losses are required to be recorded in shareholders' equity as part of accumulated other comprehensive loss and amortized to defined benefit pension expense in future years. Refer to Note 17 to the consolidated financial statements for further information.
INCOME TAXES
The provision for income taxes is the sum of income taxes due for the current year and deferred taxes. Deferred taxes arise from temporary differences between the income tax basis and financial accounting basis of assets and liabilities. Accrued taxes represent the net estimated amount due to or to be received from taxing jurisdictions, currently or in the future, and are included in accrued income and other assets or accrued expenses and other liabilities on the Consolidated Balance Sheets.
Included in net deferred taxes are deferred tax assets. Deferred tax assets are evaluated for realization based on available evidence of projected future reversals of existing taxable temporary differences, assumptions made regarding future events and, when applicable, state loss carryback capacity. A valuation allowance is provided when it is more-likely-than-not that some portion of the deferred tax asset will not be realized. Determining whether deferred tax assets are realizable is subjective and requires the use of significant judgment.
The Corporation assesses the relative risks and merits of tax positions for various transactions after considering statutes, regulations, judicial precedent and other available information and maintains tax accruals consistent with these assessments. This assessment is complex and requires judgment. The Corporation is subject to audit by taxing authorities that could question and/or challenge the tax positions taken by the Corporation. Changes in the estimate of accrued taxes occur due to changes in tax law, interpretations of existing tax laws, new judicial or regulatory guidance, the status of examinations conducted by taxing authorities that impact the relative risks and merits of tax positions taken by the Corporation. These changes, when they occur, impact the estimate of accrued taxes and could be significant to the operating results of the Corporation. For further information on tax accruals and related risks, see Note 18 to the consolidated financial statements.

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SUPPLEMENTAL FINANCIAL DATA
The Corporation believes non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate the adequacy of common equity and performance trends. Tangible common equity is used by the Corporation to measure the quality of capital and the return relative to balance sheet risk. Common equity tier 1 capital ratio removes preferred stock from the Tier 1 capital ratio as defined by and calculated in conformity with bank regulations. The tangible common equity ratio removes the effect of intangible assets from capital and total assets. Tangible common equity per share of common stock removes the effect of intangible assets from common shareholders' equity per share of common stock.

The following table provides a reconciliation of non-GAAP financial measures and regulatory ratios used in this financial review with financial measures defined by GAAP.
(dollar amounts in millions)
December 3120232022
Common Equity Tier 1 Capital:
Tier 1 capital$8,808 $8,278 
Less:
Fixed-rate reset non-cumulative perpetual preferred stock394 394 
Common equity tier 1 capital$8,414 $7,884 
Risk-weighted assets$75,901 $78,871 
Tier 1 capital ratio11.60 %10.50 %
Common equity tier 1 capital ratio11.09 10.00 
Tangible Common Equity Ratio:
Total shareholders' equity$6,406 $5,181 
Less:
Fixed-rate reset non-cumulative perpetual preferred stock394 394 
Common shareholders' equity$6,012 $4,787 
Less:
Goodwill635 635 
Other intangible assets8 9 
Tangible common equity$5,369 $4,143 
Total assets$85,834 $85,406 
Less:
Goodwill635 635 
Other intangible assets8 9 
Tangible assets$85,191 $84,762 
Common equity ratio7.00 %5.60 %
Tangible common equity ratio6.30 4.89 
Tangible Common Equity per Share of Common Stock:
Common shareholders' equity$6,012 $4,787 
Tangible common equity5,369 4,143 
Shares of common stock outstanding (in millions)132 131 
Common shareholders' equity per share of common stock$45.58 $36.55 
Tangible common equity per share of common stock40.70 31.62 

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FORWARD-LOOKING STATEMENTS
This report includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. In addition, the Corporation may make other written and oral communications from time to time that contain such statements. All statements regarding the Corporation's expected financial position, strategies and growth prospects as well as general economic conditions expected to exist in the future are 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 the Corporation or its management, are intended to identify forward-looking statements. The Corporation 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 the Corporation 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.
In addition to factors mentioned elsewhere in this report or previously disclosed in the Corporation's SEC reports (accessible on the SEC's website at www.sec.gov or on the Corporation's website at www.comerica.com), actual results could differ materially from forward-looking statements and future results could differ materially from historical performance due to a variety of reasons, including but not limited to, the following factors:
•changes in customer behavior may adversely impact the Corporation's business, financial condition and results of operations;
•unfavorable developments concerning credit quality could adversely affect the Corporation's financial results;
•declines in the businesses or industries of the Corporation's customers could cause increased credit losses or decreased loan balances, which could adversely affect the Corporation;
•governmental monetary and fiscal policies may adversely affect the financial services industry, and therefore impact the Corporation's financial condition and results of operations;
•fluctuations in interest rates and their impact on deposit pricing could adversely affect the Corporation's net interest income and balance sheet;
•the Corporation's transition away from the Bloomberg Short-Term Bank Yield Index could adversely affect its financial results;
•the Corporation must maintain adequate sources of funding and liquidity to meet regulatory expectations, support its operations and fund outstanding liabilities;
•reduction in the Corporation's credit ratings could adversely affect the Corporation and/or the holders of its securities;
•the soundness of other financial institutions could adversely affect the Corporation;
•security risks, including denial of service attacks, hacking, social engineering attacks targeting the Corporation’s colleagues and customers, malware intrusion or data corruption attempts, and identity theft, could result in the disclosure of confidential information, adversely affect its business or reputation, and create significant legal and financial exposure;
•cybersecurity and data privacy are areas of heightened legislative and regulatory focus;
•the Corporation’s operational or security systems or infrastructure, or those of third parties, could fail or be breached, , which could disrupt Comerica’s business and adversely impact the Corporation’s results of operations, liquidity and financial condition, as well as cause legal or reputational harm;
•the Corporation relies on other companies to provide certain key components of its delivery systems, and certain failures could materially adversely affect operations;
•legal and regulatory proceedings and related financial services industry matters, including those directly involving the Corporation and its subsidiaries, could adversely affect the Corporation or the financial services industry in general;
•the Corporation may incur losses due to fraud;
•controls and procedures may fail to prevent or detect all errors or acts of fraud;
•changes in regulation or oversight, or changes in credit characteristicsComerica’s status with respect to existing regulations or oversight, may have a material adverse impact on the Corporation's operations;
•compliance with more stringent capital requirements may adversely affect the Corporation;
•changes to tax law or regulations, or changes to administrative or judicial interpretations of tax law or regulations, could also increaseadversely affect the Corporation;
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•damage to the Corporation’s reputation could damage its businesses;
•the Corporation may not be able to utilize technology to develop, market and deliver new products and services to its customers;
•competitive product and pricing pressures within the Corporation's markets may change;
•the introduction, implementation, withdrawal, success and timing of business initiatives and strategies may be less successful or may be different than anticipated, which could adversely affect the Corporation's business;
•management's ability to maintain and expand customer relationships may differ from expectations;
•management's ability to retain key officers and employees may change;
•any future strategic acquisitions or divestitures may present certain risks to the Corporation's business and operations;
•general political, economic or industry conditions, either domestically or internationally, may be less favorable than expected;
•inflation could negatively impact the Corporation's business, profitability and stock price;
•methods of reducing risk exposures might not be effective;
•catastrophic events, including pandemics, may adversely affect the general economy, financial and capital markets, specific industries, and the Corporation;
•climate change manifesting as physical or transition risks could adversely affect the Corporation's operations, businesses and customers;
•changes in accounting standards could materially impact the Corporation's financial statements;
•the Corporation's accounting policies and processes are critical to the reporting of financial condition and results of operations and require management to make estimates about matters that are uncertain;
•the Corporation's stock price can be volatile; and
•an investment in the Corporations' equity securities is not insured or guaranteed by the FDIC.
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CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
(in millions, except share data)
December 3120232022
ASSETS
Cash and due from banks$1,443 $1,758 
Interest-bearing deposits with banks8,059 4,524 
Other short-term investments399 157 
Investment securities available-for-sale16,869 19,012 
Commercial loans27,251 30,909 
Real estate construction loans5,083 3,105 
Commercial mortgage loans13,686 13,306 
Lease financing807 760 
International loans1,102 1,197 
Residential mortgage loans1,889 1,814 
Consumer loans2,295 2,311 
Total loans52,113 53,402 
Allowance for loan losses(688)(610)
Net loans51,425 52,792 
Premises and equipment445 400 
Accrued income and other assets7,194 6,763 
Total assets$85,834 $85,406 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits$27,849 $39,945 
Money market and interest-bearing checking deposits28,246 26,290 
Savings deposits2,381 3,225 
Customer certificates of deposit3,723 1,762 
Other time deposits4,550 124 
Foreign office time deposits13 51 
Total interest-bearing deposits38,913 31,452 
Total deposits66,762 71,397 
Short-term borrowings3,565 3,211 
Accrued expenses and other liabilities2,895 2,593 
Medium- and long-term debt6,206 3,024 
Total liabilities79,428 80,225 
Fixed-rate reset non-cumulative perpetual preferred stock, series A, no par value, $100,000 liquidation preference per share:
Authorized - 4,000 shares
Issued - 4,000 shares394 394 
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares1,141 1,141 
Capital surplus2,224 2,220 
Accumulated other comprehensive loss(3,048)(3,742)
Retained earnings11,727 11,258 
Less cost of common stock in treasury - 96,266,568 shares at 12/31/2023 and 97,197,962 shares at 12/31/2022(6,032)(6,090)
Total shareholders’ equity6,406 5,181 
Total liabilities and shareholders’ equity$85,834 $85,406 
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
(in millions, except per share data)
Years Ended December 31202320222021
INTEREST INCOME
Interest and fees on loans$3,340 $2,153 $1,594 
Interest on investment securities430 414 280 
Interest on short-term investments405 105 27 
Total interest income4,175 2,672 1,901 
INTEREST EXPENSE
Interest on deposits892 102 22 
Interest on short-term borrowings391 17 — 
Interest on medium- and long-term debt378 87 35 
Total interest expense1,661 206 57 
Net interest income2,514 2,466 1,844 
Provision for credit losses89 60 (384)
Net interest income after provision for credit losses2,425 2,406 2,228 
NONINTEREST INCOME
Card fees280 273 298 
Fiduciary income235 233 231 
Service charges on deposit accounts185 195 195 
Capital markets income147 154 146 
Commercial lending fees72 68 68 
Bank-owned life insurance46 47 43 
Letter of credit fees42 38 40 
Brokerage fees30 21 14 
Risk management hedging (loss) income(42)8 — 
Other noninterest income83 31 88 
Total noninterest income1,078 1,068 1,123 
NONINTEREST EXPENSES
Salaries and benefits expense1,306 1,208 1,133 
Outside processing fee expense277 251 266 
FDIC insurance expense180 31 22 
Occupancy expense171 175 161 
Software expense171 161 155 
Equipment expense50 50 50 
Advertising expense40 38 35 
Other noninterest expenses164 84 39 
Total noninterest expenses2,359 1,998 1,861 
Income before income taxes1,144 1,476 1,490 
Provision for income taxes263 325 322 
NET INCOME881 1,151 1,168 
Less:
Income allocated to participating securities4 6 5 
Preferred stock dividends23 23 23 
Net income attributable to common shares$854 $1,122 $1,140 
Earnings per common share:
Basic$6.47 $8.56 $8.45 
Diluted6.44 8.47 8.35 
Cash dividends declared on common stock375 356 365 
Cash dividends declared per common share2.84 2.72 2.72 
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Comerica Incorporated and Subsidiaries
(in millions)
Years Ended December 31202320222021
NET INCOME$881 $1,151 $1,168 
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized gains (losses) on investment securities:
Net unrealized holding gains (losses) arising during the period361 (2,903)(406)
Change in net unrealized gains (losses) before income taxes361 (2,903)(406)
Net gains (losses) on cash flow hedges:
Net cash flow hedge gains (losses) arising during the period before income taxes34 (1,329)(35)
Reclassification of loss related to de-designation of derivatives to other noninterest income(195)— — 
Less:
Net cash flow hedge (losses) gains recognized in interest and fees on loans before taxes(576)(25)95 
Amortization of unrealized losses related to de-designated derivatives included in interest and fees on loans(26)— — 
Change in net cash flow hedge gains (losses) before income taxes441 (1,304)(130)
Defined benefit pension and other postretirement plans adjustment:
Actuarial gain (loss) arising during the period96 (415)159 
Prior service credit arising during the period— — 1 
Adjustments for amounts recognized as components of net periodic benefit cost:
Amortization of actuarial net loss36 28 40 
Amortization of prior service credit(23)(23)(25)
Change in defined benefit pension and other postretirement plans adjustment before income taxes109 (410)175 
Total other comprehensive income (loss) before income taxes911 (4,617)(361)
Provision (benefit) for income taxes217 (1,087)(85)
Total other comprehensive income (loss), net of tax694 (3,530)(276)
COMPREHENSIVE INCOME (LOSS)$1,575 $(2,379)$892 
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Comerica Incorporated and Subsidiaries
Accumulated
NonredeemableCommon StockOtherTotal
PreferredSharesCapitalComprehensiveRetainedTreasuryShareholders'
(in millions, except per share data)StockOutstandingAmountSurplusIncome (Loss)EarningsStockEquity
BALANCE AT DECEMBER 31, 2020$394 139.2 $1,141 $2,185 $64 $9,727 $(5,461)$8,050 
Net income— — — — — 1,168 — 1,168 
Other comprehensive loss, net of tax— — — — (276)— — (276)
Cash dividends declared on common stock ($2.72 per share)— — — — — (365)— (365)
Cash dividends declared on preferred stock— — — — — (23)— (23)
Purchase of common stock— (9.5)— (24)— — (699)(723)
Net issuance of common stock under employee stock plans— 1.0 — (27)— (13)65 25 
Share-based compensation— — — 41 — — — 41 
BALANCE AT DECEMBER 31, 2021$394 130.7 $1,141 $2,175 $(212)$10,494 $(6,095)$7,897 
Net income— — — — — 1,151 — 1,151 
Other comprehensive loss, net of tax— — — — (3,530)— — (3,530)
Cash dividends declared on common stock ($2.72 per share)— — — — — (356)— (356)
Cash dividends declared on preferred stock— — — — — (23)— (23)
Purchase of common stock— (0.4)— — — — (36)(36)
Net issuance of common stock under employee stock plans— 0.7 — (15)— (8)41 18 
Share-based compensation— — — 60 — — — 60 
BALANCE AT DECEMBER 31, 2022$394 131.0 $1,141 $2,220 $(3,742)$11,258 $(6,090)$5,181 
Net income— — — — — 881 — 881 
Other comprehensive income, net of tax— — — — 694 — — 694 
Cash dividends declared on common stock ($2.84 per share)— — — — — (375)— (375)
Cash dividends declared on preferred stock— — — — — (23)— (23)
Net issuance of common stock under employee stock plans— 0.9 — (48)— (14)58 (4)
Share-based compensation— — — 52 — — — 52 
BALANCE AT DECEMBER 31, 2023$394 131.9 $1,141 $2,224 $(3,048)$11,727 $(6,032)$6,406 
See notes to consolidated financial statements.


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CONSOLIDATED STATEMENTS OF CASH FLOWS
Comerica Incorporated and Subsidiaries

(in millions)
Years Ended December 31202320222021
OPERATING ACTIVITIES
Net income$881 $1,151 $1,168 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses89 60 (384)
(Benefit) provision for deferred income taxes(92)(27)79 
Depreciation and amortization87 92 99 
Net periodic defined benefit credit(27)(91)(81)
Share-based compensation expense52 60 41 
Net amortization of securities19 30 36 
Net gains on sales of foreclosed and other bank property(36)(2)— 
Net change in:
Accrued income receivable(65)(152)13 
Accrued expenses payable348 131 132 
Other, net(5)(614)(469)
Net cash provided by operating activities1,251 638 634 
INVESTING ACTIVITIES
Investment securities available-for-sale:
Maturities and redemptions2,485 2,511 5,536 
Purchases— (7,470)(7,936)
Net change in loans1,265 (4,824)4,067 
Proceeds from sales of foreclosed and other bank property44 3 8 
Net increase in premises and equipment(153)(82)(70)
Federal Home Loan Bank stock:
Purchases(504)(131)— 
Redemptions325 — 115 
Proceeds from bank-owned life insurance settlements30 39 16 
Other, net2 2 (13)
Net cash provided by (used in) investing activities3,494 (9,952)1,723 
FINANCING ACTIVITIES
Net change in:
Deposits(4,634)(10,401)8,438 
Short-term borrowings354 3,211 — 
Medium- and long-term debt:
Maturities and redemptions(850)— (2,800)
Issuances and advances4,000 500 — 
Cash dividends paid on preferred stock(23)(23)(23)
Common stock:
Repurchases(17)(43)(729)
Cash dividends paid(371)(353)(369)
Issuances under employee stock plans18 28 34 
Other, net(2)(2)4 
Net cash (used in) provided by financing activities(1,525)(7,083)4,555 
Net increase (decrease) in cash and cash equivalents3,220 (16,397)6,912 
Cash and cash equivalents at beginning of period6,282 22,679 15,767 
Cash and cash equivalents at end of period$9,502 $6,282 $22,679 
Interest paid$1,449 $130 $57 
Income taxes paid317 277 157 
See notes to consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

NOTE 1 - BASIS OF PRESENTATION AND ACCOUNTING POLICIES
Organization
Comerica Incorporated (the Corporation) is a registered financial holding company headquartered in Dallas, Texas. The Corporation’s major business segments are the Commercial Bank, the Retail Bank and Wealth Management. For further discussion of each business segment, refer to Note 22. The Corporation and its banking subsidiaries are regulated at both the state and federal levels.
The accounting and reporting policies of the Corporation conform to United States (U.S.) generally accepted accounting principles (GAAP). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from these estimates. Certain amounts in the financial statements for prior years have been reclassified to conform to the current financial statement presentation.
The following summarizes the significant accounting policies of the Corporation applied in the preparation of the accompanying consolidated financial statements.
Principles of Consolidation
The consolidated financial statements include the accounts of the Corporation and the accounts of those subsidiaries that are majority owned and in which the Corporation has a controlling financial interest. The Corporation consolidates entities not determined to be variable interest entities (VIEs) when it holds a controlling financial interest and applies the cost or equity method when it holds less than a controlling financial interest. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies acquired are included from the date of acquisition.
The Corporation holds investments in certain legal entities that are considered VIEs. In general, a VIE is an entity that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the allowance. Such events,obligation to absorb losses or othersthe right to receive returns generated by its operations. If any of similar nature, may resultthese characteristics are present, the entity is subject to a variable interests consolidation model, and consolidation is based on variable interests, not on voting interests. Variable interests are defined as contractual ownership or other economic interests in an entity that change with fluctuations in the needentity’s net asset value. The primary beneficiary is required to consolidate the VIE as it has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE. The maximum potential exposure to losses relative to investments in VIEs is generally limited to the sum of the outstanding book basis and unfunded commitments for future investments.
The Corporation evaluates its investments in VIEs, both at inception and when there is a change in circumstances that requires reconsideration, to determine if the Corporation is the primary beneficiary and consolidation is required. The Corporation accounts for unconsolidated VIEs using either the proportional, cost or equity method. These investments comprise investments in community development projects which generate tax credits to their investors and are included in accrued income and other assets on the Consolidated Balance Sheets.
The proportional method is used for investments in affordable housing projects that qualify for the low-income housing tax credit (LIHTC). The equity method is used for other investments where the Corporation has the ability to exercise significant influence over an entity’s operations and financial policies. Other unconsolidated equity investments that do not meet the criteria to be accounted for under the equity method are accounted for under the cost method. Amortization and other write-downs of LIHTC investments are presented on a net basis as a component of the provision for income taxes, while income, amortization and write-downs from cost and equity method investments are recorded in other noninterest income on the Consolidated Statements of Income.
See Note 9 for additional provision for credit lossesinformation about the Corporation’s involvement with VIEs.
Assets held in order to maintain an allowance that complies with credit risk and accounting policies.
Loans deemed uncollectible are charged off and deducted from the allowance. Recoveries on loans previously charged off are added to the allowance.
Credit lossesagency or fiduciary capacity are not estimated for accrued interest receivable as interest that is deemed uncollectible is written off through interest income.assets of the Corporation and are not included in the consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

Allowance for Credit Losses on Lending-Related CommitmentsFair Value Measurements
The allowance for credit losses on lending-related commitmentsCorporation utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, the Corporation uses present value techniques and other valuation methods to estimate the fair values of its financial instruments. These valuation methods require considerable judgment and the resulting estimates current expected credit losses on collective pools of lettersfair value can be significantly affected by the assumptions made and methods used.
Fair value is an estimate of credit and unused commitmentsthe exchange price that would be received to extend creditsell an asset or paid to transfer a liability in an orderly transaction (i.e., not a forced transaction, such as a liquidation or distressed sale) between market participants at the measurement date. Fair value is based on reserve factors, determined inthe assumptions market participants would use when pricing an asset or liability.
Investment securities available-for-sale, derivatives, deferred compensation plans and equity securities with readily determinable fair values (primarily money market mutual funds) are recorded at fair value on a manner similarrecurring basis. Additionally, from time to businesstime, the Corporation may be required to record other assets and liabilities at fair value on a nonrecurring basis, such as impaired loans, multiplied byloans held for sale, other real estate (primarily foreclosed property), nonmarketable equity securities and certain other assets and liabilities. These nonrecurring fair value adjustments typically involve write-downs of individual assets or application of lower of cost or fair value accounting.
Fair value measurements and disclosures guidance establishes a probability of draw estimate,three-level fair value hierarchy based on historical experiencethe markets in which the assets and credit risk, appliedliabilities are traded and the reliability of the assumptions used to commitment amounts.determine fair value. The allowancefair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. Fair value measurements are separately disclosed by level within the fair value hierarchy. For assets and liabilities recorded at fair value, it is the Corporation’s policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements.
Level 1Valuation is based on quoted prices for identical instruments traded in active markets.
Level 2Valuation is based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are less active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.
The Corporation generally utilizes third-party pricing services to value Level 1 and Level 2 securities. Management reviews the methodologies and assumptions used by the third-party pricing services and evaluates the values provided, principally by comparison with other available market quotes for credit lossessimilar instruments and/or analysis based on lending-related commitments isinternal models using available third-party market data. The Corporation may occasionally adjust certain values provided by the third-party pricing service when management believes, as the result of its review, that the adjusted price most appropriately reflects the fair value of the particular security.
Fair value measurements for assets and liabilities where limited or no observable market data exists are based primarily upon estimates, often calculated based on the economic and competitive environment, the characteristics of the asset or liability and other factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, so that changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values.
Following are descriptions of the valuation methodologies and key inputs used to measure financial assets and liabilities recorded at fair value, as well as a description of the methods and significant assumptions used to estimate fair value disclosures for financial instruments not recorded at fair value in their entirety on a recurring basis. The descriptions include an indication of the level of the fair value hierarchy in which the assets or liabilities are classified.
Deferred compensation plan assets and liabilities as well as equity securities with a readily determinable fair value
The Corporation holds a portfolio of securities that includes equity securities and assets held related to deferred compensation plans. Securities and associated deferred compensation plan liabilities are recorded at fair value on a recurring basis and included in other short-term investments and accrued expenses and other liabilities, respectively, on the Consolidated Balance Sheets. Level 1 securities include assets related to deferred compensation plans, which are invested in mutual funds, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and other securities traded on
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

an active exchange, such as the New York Stock Exchange. Level 2 securities include municipal bonds and mortgage-backed securities issued by U.S. government-sponsored entities and corporate debt securities. Deferred compensation plan liabilities represent the fair value of the obligation to the plan participant, which corresponds to the fair value of the invested assets. The methods used to value equity securities and deferred compensation plan assets are the same as the methods used to value investment securities, discussed below.
Investment securities available-for-sale
Investment securities available-for-sale are recorded at fair value on a recurring basis. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored entities, as well as corporate debt securities. The fair value of Level 2 securities is determined using quoted prices of securities with similar characteristics, or pricing models based on observable market data inputs, primarily interest rates, spreads and prepayment information.
Securities classified as Level 3 represent securities in less liquid markets requiring significant management assumptions when determining fair value.
Loans held-for-sale
Loans held-for-sale, included in other short-term investments on the Consolidated Balance Sheets, are recorded at the lower of cost or fair value. Loans held-for-sale may be carried at fair value on a nonrecurring basis when fair value is less than cost. When the fair value is based on what secondary markets are currently offering for portfolios with similar characteristics, the corresponding chargeloans are classified as Level 2. When secondary market information is not available, the fair value is estimated based on the repricing frequency of the loans and estimated credit risk using internally-developed lifetime loss estimates, resulting in the loans being classified as Level 3.
Loans
The Corporation does not record loans at fair value on a recurring basis. However, an individual allowance may be established for a loan that no longer shares risk characteristics with loan pools, typically collateral-dependent loans for which reserves are based on the fair value of the underlying collateral. Such loan values are reported as nonrecurring fair value measurements. Collateral values supporting individually evaluated loans are evaluated quarterly. When management determines that the fair value of the collateral requires additional adjustments, either as a result of non-current appraisal value or when there is no observable market price, the Corporation classifies the loan as Level 3.
Derivative assets and derivative liabilities
Derivative instruments held or issued for risk management or customer-initiated activities are traded in over-the-counter markets where quoted market prices are not readily available. Fair value for over-the-counter derivative instruments is measured on a recurring basis using internally developed models primarily based on market observable inputs, such as yield curves and option volatilities. The Corporation manages credit risk on its derivative positions based on whether the derivatives are settled through a clearinghouse or bilaterally with each counterparty. For derivative positions settled on a counterparty-by-counterparty basis, the Corporation calculates credit valuation adjustments, included in the provisionfair value of these instruments, on the basis of its relationships at the counterparty portfolio or master netting agreement level. These credit valuation adjustments are determined by applying a credit spread for the counterparty or the Corporation, as appropriate, to the total expected exposure of the derivative after considering collateral and other master netting arrangements. These adjustments, which are considered Level 3 inputs, are based on estimates of current credit lossesspreads to evaluate the likelihood of default. When credit valuation adjustments are significant to the overall fair value of a derivative, the Corporation classifies the over-the-counter derivative valuation in Level 3 of the fair value hierarchy; otherwise, over-the-counter derivative valuations are classified in Level 2.
Other real estate
Other real estate is included in accrued income and other assets on the Consolidated StatementsBalance Sheets and includes primarily foreclosed property. Foreclosed property is initially recorded at fair value, less costs to sell, at the date of Comprehensive Income.legal title transfer to the Corporation, establishing a new cost basis. Subsequently, foreclosed property is carried at the lower of cost or fair value, less costs to sell. Other real estate may be carried at fair value on a nonrecurring basis when fair value is less than cost. Fair value is based upon independent market prices, appraised value or management's estimate of the value of the property. When management determines that the fair value of other real estate requires additional adjustments, either as a result
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

of a non-current appraisal or when there is no observable market price, the Corporation classifies the other real estate as Level 3.
For further information about fair value measurements refer to Note 2.
Nonperforming Assets
Nonperforming assets include loans on nonaccrual status and foreclosed assets. Effective January 1, 2023, the Corporation prospectively adopted the provisions of Accounting Standards Update No. 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosures", which eliminated the accounting for TDRs. Refer to Note 1 to the consolidated financial statements for further information. At December 31, 2022, reduced-rate loans represented TDRs which had been renegotiated to less than their original contractual rates.
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The following table presents a summary of nonperforming assets and past due loans.
Summary of Nonperforming Assets and Past Due Loans
(dollar amounts in millions)
December 3120232022
Nonaccrual loans$178 $240 
Reduced-rate loansn/a4 
Total nonperforming loans178 244 
Foreclosed property— — 
Total nonperforming assets$178 $244 
Nonaccrual loans as a percentage of total loans0.34 %0.45 %
Nonperforming loans as a percentage of total loans0.34 0.46 
Nonperforming assets as a percentage of total loans and foreclosed property0.34 0.46 
Loans past due 90 days or more and still accruing$20 $23 
Nonperforming assets decreased $66 million to $178 million at December 31, 2023, from $244 million at December 31, 2022. The decrease in nonperforming assets primarily reflected decreases of $33 million in nonaccrual business loans and $29 million in nonaccrual retail loans. Nonperforming loans were 0.34 percent of total loans at December 31, 2023, compared to 0.46 percent at December 31, 2022. For further information regarding the composition of nonaccrual loans, refer to Note 4 to the consolidated financial statements.
The following table presents a summary of changes in nonaccrual loans.
(in millions)
Years Ended December 3120232022
Balance at beginning of period$240 $264 
Loans transferred to nonaccrual (a)94 132 
Nonaccrual loan gross charge-offs(62)(68)
Loans transferred to accrual status (a)(14)(11)
Nonaccrual loans sold(5)(15)
Payments/other (b)(75)(62)
Balance at end of period$178 $240 
(a)Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(b)Includes net changes related to nonaccrual loans with balances less than or equal to $2 million, payments on nonaccrual loans with book balances greater than $2 million and transfers of nonaccrual loans to foreclosed property.
There were 16 borrowerswith a balance greater than $2 million, totaling $94 million, transferred to nonaccrual status in 2023, a decrease of 7 borrowers compared to 23 borrowers totaling $132 million in 2022. For further information about the composition of loans transferred to nonaccrual during the current period, refer to the nonaccrual information by industry category table below.
The following table presents the composition of nonaccrual loans by balance and the related number of borrowers at December 31, 2023 and 2022.
20232022
(dollar amounts in millions)Number of
Borrowers		BalanceNumber of
Borrowers		Balance
Under $2 million457 $50 475 $60 
$2 million - $5 million11 35 14 46 
$5 million - $10 million5 35 8 58 
$10 million - $25 million4 58 5 76 
Total477 $178 502 $240 
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The following table presents a summary of nonaccrual loans at December 31, 2023 and loans transferred to nonaccrual and net loan charge-offs (recoveries) for the year ended December 31, 2023, based on North American Industry Classification System (NAICS) categories.
December 31, 2023Year Ended December 31, 2023
(dollar amounts in millions)Nonaccrual LoansLoans Transferred to
Nonaccrual (a)		Net Loan Charge-Offs (Recoveries)
Industry Category
Manufacturing$42 23 %$26 28 %$5 23 %
Real Estate & Home Builders38 21 27 29 (10)(45)
Residential Mortgage19 11 — — — — 
Transportation & Warehousing16 9 5 5 5 23 
Information & Communication13 7 12 12 4 18 
Services7 4 7 7 5 22 
Wholesale Trade6 3 11 12 11 50 
Arts, Entertainment & Recreation6 3 — — — — 
Mining, Quarrying and Oil & Gas Extraction4 2 — — (1)(5)
Management of Companies and Enterprises4 2 3 4 — — 
Retail Trade1 1 — — — — 
Other (b)22 14 3 3 3 14 
Total$178 100 %$94 100 %$22 100 %
(a)Based on an analysis of nonaccrual loans with book balances greater than $2 million.
(b)Other category includes other industry categories with smaller impacts, as well as consumer, excluding residential mortgage and certain personal purpose nonaccrual loans and net charge-offs.
Loans past due 90 days or more and still accruing interest generally represent loans that are well-collateralized and in the process of collection. Loans past due 90 days or more decreased $3 million to $20 million at December 31, 2023, compared to $23 million at December 31, 2022. Loans past due 30-89 days decreased $180 million to $198 million at December 31, 2023, compared to $378 million at December 31, 2022. Loans past due 30 days or more and still accruing interest as a percentage of total loans were 0.42 percent and 0.75 percent at December 31, 2023 and December 31, 2022, respectively. An aging analysis of loans included in Note 4 to the consolidated financial statements provides further information about the balances comprising past due loans.
The following table presents a summary of total criticized loans. The Corporation's criticized list is consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities. Criticized loans on nonaccrual status are individually subjected to quarterly credit quality reviews, and the Corporation may establish specific allowances for such loans. A table of loans by credit quality indicator included in Note 4 to the consolidated financial statements provides further information about the balances comprising total criticized loans.
(dollar amounts in millions)
December 3120232022
Total criticized loans$2,405 $1,572 
As a percentage of total loans4.6 %2.9 %
The $833 million increase in criticized loans during the year ended December 31, 2023 was primarily driven by Commercial Real Estate and general Middle Market.
For further information regarding the Corporation's nonperforming assets policies, refer to Notes 1 and 4 to the consolidated financial statements.
Concentrations of Credit Risk
Concentrations of credit risk may exist when a number of borrowers are engaged in similar activities, or activities in the same geographic region, and have similar economic characteristics that would cause them to be similarly impacted by changes in economic or other conditions. The Corporation has concentrations of credit risk with the commercial real estate and automotive industries. All other industry concentrations, as defined by management, individually represented less than 10 percent of total loans at December 31, 2023.
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Commercial Real Estate Lending
At December 31, 2023, the Corporation's commercial real estate portfolio represented 36 percent of total loans. The following table summarizes the Corporation's commercial real estate loan portfolio by loan category.
December 31, 2023December 31, 2022
(in millions)Commercial Real Estate business line (a)Other (b)TotalCommercial Real Estate business line (a)Other (b)Total
Real estate construction loans$4,570 $513 $5,083 $2,505 $600 $3,105 
Commercial mortgage loans4,727 8,959 13,686 4,681 8,625 13,306 
Total commercial real estate$9,297 $9,472 $18,769 $7,186 $9,225 $16,411 
(a)Primarily loans to real estate developers.
(b)Primarily loans secured by owner-occupied real estate.
The Corporation limits risk inherent in its commercial real estate lending activities by monitoring borrowers directly involved in the commercial real estate markets and adhering to conservative policies on loan-to-value ratios for such loans. Commercial real estate loans, consisting of real estate construction and commercial mortgage loans, totaled $18.8 billion at December 31, 2023. Commercial real estate loans made to borrowers in the Commercial Real Estate business line, which includes loans to real estate developers, totaled $9.3 billion, or 50 percent of total commercial real estate loans, an increase of $2.1 billion compared to December 31, 2022. The Commercial Real Estate business line at December 31, 2023 was predominantly secured by multi-family and industrial properties, comprising 46 percent and 34 percent of the portfolio, respectively, with only 6 percent secured by office properties. Commercial real estate loans in other business lines totaled $9.5 billion, or 50 percent of total commercial real estate loans, at December 31, 2023, an increase of $247 million compared to December 31, 2022. These loans consisted primarily of owner-occupied commercial mortgages, which bear credit characteristics similar to non-commercial real estate business loans. Generally, loans previously reported as real estate construction are classified as commercial mortgage loans upon receipt of a certificate of occupancy.
The real estate construction loan portfolio primarily contains loans made to long-tenured customers with satisfactory completion experience. Criticized real estate construction loans in the Commercial Real Estate business line totaled $86 million at December 31, 2023 compared to none at December 31, 2022. In other business lines, criticized real estate construction loans totaled $12 million at December 31, 2023, compared to $3 million at December 31, 2022. There were no real estate construction loan net charge-offs in the years ended December 31, 2023 and 2022.
Commercial mortgage loans are loans where the primary collateral is a lien on any real property and are primarily loans secured by owner-occupied real estate. Real property is generally considered primary collateral if the value of that collateral represents more than 50 percent of the commitment at loan approval. Loans in the commercial mortgage portfolio generally mature within three to five years. Criticized commercial mortgage loans in the Commercial Real Estate business line totaled $378 million and $16 million at December 31, 2023 and 2022, respectively, with the increase primarily in multi-family properties. In other business lines, $395 million and $151 million of commercial mortgage loans were criticized at December 31, 2023 and 2022, respectively. Commercial mortgage loan net recoveries were $1 million in 2023, compared to no net charge-offs in 2022.
Automotive Lending - Dealer:
The following table presents a summary of dealer loans.
December 31, 2023December 31, 2022
(in millions)Loans
Outstanding		Percent of
Total Loans		Loans
Outstanding		Percent of
Total Loans
Dealer:
Floor plan$2,313 $1,379 
Other3,878 3,988 
Total dealer$6,191 11.9 %$5,367 10.1 %
Substantially all dealer loans are in the National Dealer Services business line and primarily include floor plan financing and other loans to automotive dealerships. Floor plan loans, included in commercial loans in the Consolidated Balance Sheets, totaled $2.3 billion at December 31, 2023, an increase of $934 million compared to $1.4 billion at December 31, 2022, resulting from increasing vehicle levels due to supply chain improvements. At December 31, 2023 and 2022, other loans in the National Dealer Services business line totaled $3.9 billion and $4.0 billion, respectively, including $2.2 billion and $2.3 billion of owner-occupied commercial real estate mortgage loans, respectively.
There were no nonaccrual dealer loans at both December 31, 2023, and 2022. Additionally, there were no net charge-offs of dealer loans in either of the years ended December 31, 2023 and 2022.
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Automotive Lending- Production:
The following table presents a summary of loans to borrowers involved with automotive production.
December 31, 2023December 31, 2022
Loans
Outstanding
Percent of
Total Loans
Loans
Outstanding
Percent of
Total Loans
(in millions)
Production:
Domestic$591 $797 
Foreign257 271 
Total production$848 1.6 %$1,068 2.0 %
Loans to borrowers involved with automotive production, primarily Tier 1 and Tier 2 suppliers, totaled $848 million at December 31, 2023 and $1.1 billion at December 31, 2022. These borrowers have faced, and could face in the future, financial difficulties due to disruptions in auto production, issues with supply chains and logistics operations and impacts resulting from labor union strikes. As such, management continues to monitor this portfolio.
Nonaccrual loans to borrowers involved with automotive production totaled $17 million in at December 31, 2023, compared to $5 million at December 31, 2022. Automotive production loan net charge-offs totaled $7 million for the year ended December 31, 2023, compared to $2 million for the same period in 2022.
For further information regarding significant group concentrations of credit risk, refer to Note 5 to the consolidated financial statements.
Residential Real Estate Lending
At December 31, 2023, residential real estate loans represented 7 percent of total loans. The following table summarizes the Corporation's residential mortgage and home equity loan portfolios by geographic market.


December 31, 2023December 31, 2022
(dollar amounts in millions)Residential
Mortgage 
Loans		Percent of
Total		Home
Equity 
Loans		Percent of
Total		Residential
Mortgage 
Loans		Percent of
Total		Home
Equity 
Loans		Percent of
Total
Geographic market:
Michigan$548 29 %$444 25 %$497 27 %$487 27 %
California871 46 911 51 866 48 852 48 
Texas272 14 351 20 258 14 354 20 
Other Markets198 11 86 4 193 11 83 5 
Total$1,889 100 %$1,792 100 %$1,814 100 %$1,776 100 %
Residential real estate loans, which consist of traditional residential mortgages and home equity loans and lines of credit, totaled $3.7 billion at December 31, 2023. The residential real estate portfolio is principally located within the Corporation's primary geographic markets. Substantially all residential real estate loans past due 90 days or more are placed on nonaccrual status, and substantially all junior lien home equity loans that are current or less than 90 days past due are placed on nonaccrual status if full collection of the senior position is in doubt. At no later than 180 days past due, such loans are charged off to current appraised values less costs to sell.
Residential mortgages totaled $1.9 billion at December 31, 2023, and were primarily larger, variable-rate mortgages originated and retained for certain private banking relationship customers. Of the $1.9 billion of residential mortgage loans outstanding, $19 million were on nonaccrual status at December 31, 2023, a decrease of $34 million compared to December 31, 2022. The home equity portfolio totaled $1.8 billion at December 31, 2023, of which 96 percent was outstanding under primarily variable-rate, interest-only home equity lines of credit, 3 percent were in amortizing status and 1 percent were closed-end home equity loans. Of the $1.8 billion of home equity loans outstanding, $21 million were on nonaccrual status at December 31, 2023, an increase of $6 million compared to December 31, 2022. A majority of the home equity portfolio was secured by junior liens at December 31, 2023.
Energy Lending
The Corporation has a portfolio of Energy loans that are included entirely in commercial loans in the Consolidated Balance Sheets. Customers in the Corporation's Energy business line (approximately 120 relationships) are engaged in exploration and production (E&P) and midstream. E&P generally includes such activities as searching for potential oil and gas fields, drilling exploratory wells and operating active wells. Commitments to E&P borrowers are generally subject to semi-annual borrowing base re-determinations based on a variety of factors including updated prices (reflecting market and competitive conditions), energy reserve levels and the impact of hedging. The midstream sector is generally involved in the
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transportation, storage and marketing of crude and/or refined oil and gas products. The Corporation's energy services customers provide products and services primarily to the E&P segment. Approximately 94% of loans in the Energy business line are Shared National Credits (SNC), which are facilities greater than or equal to $100 million shared by three or more federally supervised institutions, reflecting the Corporation's focus on larger middle market companies that have financing needs that generally exceed internal individual borrower credit risk limits. The Corporation seeks to develop full relationships with SNC borrowers.
The following table summarizes information about loans in the Corporation's Energy business line.
(dollar amounts in millions)20232022
December 31OutstandingsNonaccrualCriticized (a)OutstandingsNonaccrualCriticized (a)
Exploration and production (E&P)$1,070 77 %$4 $4 $1,162 82 %$7 $12 
Midstream312 23 — — 253 18 — — 
Total Energy business line$1,382 100 %$4 $4 $1,415 100 %$7 $12 
(a)Includes nonaccrual loans.
Loans in the Energy business line totaled $1.4 billion, or 3 percent of total loans, at December 31, 2023, a decrease of $33 million compared to December 31, 2022. Total exposure, including unused commitments to extend credit and letters of credit, was $3.3 billion (a utilization rate of 42 percent) and $3.4 billion (a utilization of 43 percent) at December 31, 2023 and December 31, 2022, respectively. Nonaccrual Energy loans decreased $3 million to $4 million at December 31, 2023, compared to $7 million at December 31, 2022. Criticized Energy loans decreased $8 million to $4 million at December 31, 2023, compared to $12 million at December 31, 2022. Energy net recoveries were $1 million for the year ended December 31, 2023, compared to net charge-offs of $3 million for the year ended December 31, 2022.
Leveraged Loans
Certain loans in the Corporation's commercial portfolio are considered leveraged transactions. These loans are typically used for mergers, acquisitions, business recapitalizations, refinancing and equity buyouts. To help mitigate the risk associated with these loans, the Corporation focuses on middle market companies with highly capable management teams, strong sponsors and solid track records of financial performance. Industries prone to cyclical downturns and acquisitions with a high degree of integration risk are generally avoided. Other considerations include the sufficiency of collateral, the level of balance sheet leverage and the adequacy of financial covenants. During the underwriting process, cash flows are stress-tested to evaluate the borrowers' abilities to handle economic downturns and an increase in interest rates.
The FDIC defines higher-risk commercial and industrial (HR C&I) loans for assessment purposes as loans generally with leverage of four times total debt to earnings before interest, taxes and depreciation (EBITDA) as well as three times senior debt to EBITDA, excluding certain collateralized loans.
The following table summarizes information about HR C&I loans, which represented 5 percent and 6 percent of total loans at December 31, 2023 and December 31, 2022, respectively.
(in millions)
December 31
20232022
Outstandings$2,814 $3,120 
Criticized332 393 
Net loan charge-offs recorded during the years ended December 31,5 20 
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Market and Liquidity Risk
Market risk represents the risk of loss due to adverse movement in prices, including interest rates, foreign exchange rates, commodity prices and equity prices. Liquidity risk represents the risk that the Corporation does not have sufficient access to funds to maintain its normal operations at all times or does not have the ability to raise or borrow funds at a reasonable cost at all times.
The Asset Liability Management Committee (ALCO) of the Corporation establishes and monitors compliance with the policies and risk limits pertaining to market and liquidity risk management activities. ALCO meets regularly to discuss and review market and liquidity risk management strategies and consists of executive and senior management from various areas of the Corporation, including treasury, finance, economics, lending, deposit gathering and risk management. Corporate Treasury mitigates market and liquidity risk under the direction of ALCO through the actions it takes to manage the Corporation's market, liquidity and capital positions.
The Corporation performs monthly liquidity stress testing to evaluate its ability to meet funding needs in hypothetical stressed environments. Such environments cover a series of scenarios, including both idiosyncratic and market-wide in nature, which vary in terms of duration and severity. Recent events have created greater uncertainty with respect to normal deposit patterns. Following the March 2023 banking industry disruption, the Corporation activated its contingency funding plan by increasing its cash position through wholesale funding channels and brokered deposits. The Corporation's evaluation as of December 31, 2023 projected that sufficient sources of liquidity were available under each series of events.
In addition to assessing liquidity risk on a consolidated basis, Corporate Treasury also monitors the parent company's liquidity and has established liquidity coverage requirements for meeting expected obligations without the support of additional dividends from subsidiaries. ALCO's policy on liquidity risk management requires the parent company to maintain sufficient liquidity to meet expected cash obligations, such as debt service, dividend payments and normal operating expenses, over a period of no less than 12 months. The Corporation had liquid assets of $1.4 billion on an unconsolidated basis at December 31, 2023.
Corporate Treasury and the Enterprise Risk Division support ALCO in measuring, monitoring and managing interest rate risk as well as all other market risks. Key activities encompass: (i) providing information and analyses of the Corporation's balance sheet structure and measurement of interest rate and all other market risks; (ii) monitoring and reporting of the Corporation's positions relative to established policy limits and guidelines; (iii) developing and presenting analyses and strategies to adjust risk positions; (iv) reviewing and presenting policies and authorizations for approval; and (v) monitoring of industry trends and analytical tools to be used in the management of interest rate and all other market and liquidity risks.
Interest Rate Risk
Net interest income is the primary source of revenue for the Corporation. Interest rate risk arises in the normal course of business due to differences in the repricing and cash flow characteristics of assets and liabilities, primarily through the Corporation's core business activities of extending loans and acquiring deposits. The Corporation's balance sheet is predominantly characterized by floating-rate loans funded by core deposits. Including the impact of interest rate swaps converting floating-rate loans to fixed, the Corporation's loan composition at December 31, 2023 was 40 percent fixed-rate, 51 percent overnight to 30-day rate, 6 percent 90-day and greater rates and 3 percent prime. The composition of the loan portfolio creates sensitivity to interest rate movements due to the imbalance between the faster repricing of the floating-rate loan portfolio versus deposit products. In addition, the growth and/or contraction in the Corporation's loans and deposits may lead to changes in sensitivity to interest rate movements in the absence of mitigating actions. Examples of such actions are purchasing fixed-rate investment securities, which provide liquidity to the balance sheet and act to mitigate the inherent interest rate sensitivity, as well as hedging with interest rate swaps and options. Other mitigating factors include interest rate floors on a portion of the loan portfolio.
The Corporation actively manages its exposure to interest rate risk with the principal objective of optimizing net interest income and the economic value of equity while operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity.
Since no single measurement system satisfies all management objectives, a combination of techniques is used to manage interest rate risk. These techniques examine the impact of interest rate risk on net interest income and the economic value of equity under a variety of alternative scenarios, including changes in the level, slope and shape of the yield curve utilizing multiple simulation analyses. Simulation analyses produce only estimates of net interest income as the assumptions used are inherently uncertain. Actual results may differ from simulated results due to many factors, including, but not limited to, the timing, magnitude and frequency of changes in interest rates, market conditions, regulatory impacts and management strategies.
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Sensitivity of Net Interest Income to Changes in Interest Rates
The analysis of the impact of changes in interest rates on net interest income under various interest rate scenarios is management's principal risk management technique. Management models a base-case net interest income under an unchanged interest rate environment using a static balance sheet and generates sensitivity scenarios by changing certain model assumptions. Each scenario includes assumptions such as loan growth, investment security prepayment levels, depositor behavior and overall balance sheet mix and growth which are in line with historical patterns. Additionally, the analysis assumes that all loan hedges qualify for hedge accounting. Changes in actual economic activity may result in a materially different interest rate environment as well as a balance sheet structure that is different from the changes management included in its simulation analysis. Model assumptions in the sensitivity scenarios at December 31, 2023 included for the rising rate scenarios, a modest increase in loan balances and a moderate decrease in deposit balances, and for the declining rate scenarios, a modest decrease in loan balances and a moderate increase in deposit balances. In addition, both scenarios assumed loan spreads held at current levels, an incremental interest-bearing deposit beta of approximately 48%, deposit mix shifts based on historical observations, partial reinvestment of securities portfolio cash flows and no additions to interest rate swaps.
The average balance of the securities portfolio included in the analysis was $17.4 billion for the year ended December 31, 2023 with an average yield of 2.10% and effective duration of 5.5 years.
The table below details components of the variable-rate loan swap portfolio at December 31, 2023.
Variable-Rate Loan Swaps (a)
(dollar amounts in millions)Notional AmountWeighted Average YieldYears to Maturity (b)
Swaps under contract at December 31, 2023 (c)$24,850 2.49 %3.9 
Weighted average notional active per period:
Full year 202322,3722.38 3.5
Full year 202423,5752.50 3.9
Full year 202522,9732.57 4.1
(a)Included $7.0 billion in swaps which no longer qualified for cash flow hedging designation following BSBY cessation. In January 2024, $4.2 billion of these swaps were re-designated, with the remaining expected to be re-designated in early 2024.
(b)Years to maturity calculated from a starting date of December 31, 2023.
(c)Includes forward starting swaps of $2.0 billion starting in 2024. Excluding forward starting swaps, the weighted average yield was 2.43%.
The analysis also includes interest rate swaps that convert $6.3 billion of fixed-rate medium- and long-term debt to variable rates through fair value hedges. Additionally, included in this analysis are $15.5 billion of loans that were subject to an average interest rate floor of 52 basis points at December 31, 2023. This base-case net interest income is then compared against interest rate scenarios in which short-term rates rise or decline 100 or 200 basis points (with a floor of zero percent) in a linear, non-parallel fashion from the base case over 12 months, resulting in an average change of 50 or 100 basis points over the period.
The table below, as of December 31, 2023 and 2022, displays the estimated impact on net interest income during the next 12 months by relating the base case scenario results to those from the rising and declining rate scenarios described above.
Estimated Annual Change
(dollar amounts in millions)20232022
December 31Amount%Amount%
Change in Interest Rates:Change in Interest Rates:
Rising 100 basis points$(36)(2 %)Rising 100 basis points$10 — %
(50 basis points on average)(50 basis points on average)
Declining 100 basis points23 1 Declining 100 basis points(72)(2)
(50 basis points on average)(50 basis points on average)
Rising 200 basis points(87)(4)Rising 200 basis points(7)— 
(100 basis points on average)(100 basis points on average)
Declining 200 basis points33 1 Declining 200 basis points(156)(5)
(100 basis points on average)(100 basis points on average)
In both the 100 and 200 basis point scenarios, sensitivity to declining interest rates shifted from reducing net interest income at December 31, 2022 to benefiting net interest income at December 31, 2023, resulting from a decline in non-maturity deposits, partially offset by an increase in time deposits. In the 100 basis point scenario, sensitivity to rising interest rates shifted from benefiting net interest income at December 31, 2022 to reducing net interest income at December 31, 2023, while in the 200 basis point scenario, negative sensitivity to rising interest rates increased compared to December 31, 2022, resulting from the change in liability mix that occurred in 2023.
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At December 31, 2023, additional sensitivity scenarios applied the rising and declining 100 basis point scenario assumptions with a 60% incremental deposit beta relative to the base case scenario to assess the impact of the Corporation's deposit beta assumptions. In these rising and declining scenarios, net interest income decreased by $65 million and increased by $44 million, respectively, due to a more rapid repricing pace compared to the standard model assumptions. All scenarios presented for December 31, 2023 reflected a change in balance sheet composition following the March 2023 banking industry disruption, as the balance sheet maintained a higher concentration of cash as well as increased wholesale funding and brokered deposits, which contributed to the decrease in net interest income in all scenarios presented.
Sensitivity of Economic Value of Equity to Changes in Interest Rates
In addition to the simulation analysis on net interest income, an economic value of equity analysis provides an alternative view of the interest rate risk position. The economic value of equity is the difference between the estimate of the economic value of the Corporation's financial assets, liabilities and off-balance sheet instruments, derived through discounting cash flows based on actual rates at the end of the period, and the estimated economic value after applying the estimated impact of rate movements. The Corporation primarily monitors the percentage change on the base-case economic value of equity. The economic value of equity analysis is based on an immediate parallel 100 or 200 basis point shock with a floor of zero percent.
The table below, as of December 31, 2023 and December 31, 2022, displays the estimated impact on the economic value of equity from the interest rate scenario described above.
(dollar amounts in millions)20232022
December 31Amount%Amount%
Change in Interest Rates:Change in Interest Rates:
Rising 100 basis points$(567)(4 %)Rising 100 basis points$(417)(3 %)
Declining 100 basis points794 6 Declining 100 basis points627 4 
Rising 200 basis points(1,254)(10)Rising 200 basis points(978)(7)
Declining 200 basis points1,363 11 Declining 200 basis points1,033 7 
The negative sensitivity of the economic value of equity to rising rates increased from December 31, 2022 to December 31, 2023 due to deposit runoff and adjustments to deposit behavioral assumptions, partially offset by a declining notional amount of cash flow swaps and a smaller securities portfolio. Sensitivity to declining rates increased the economic value of equity due to the same factors.
Loans by Maturity and Interest Rate Sensitivity
The contractual maturity distribution of the loan portfolio is presented below.
Loans Maturing
(in millions)
December 31, 2023
Within One
Year (a)		After One
But Within
Five Years		After Five But Within Fifteen YearsAfter Fifteen YearsTotal
Commercial loans$10,616 $15,535 $967$133 $27,251 
Real estate construction loans1,192 3,612 2754 5,083 
Commercial mortgage loans2,784 7,707 3,16926 13,686 
Lease financing270 383 154— 807 
International loans508 518 76— 1,102 
Residential mortgage loans5 7 2151,662 1,889 
Consumer loans487 152 731,583 2,295 
Total$15,862 $27,914 $4,929 $3,408 $52,113 
(a)Includes demand loans, loans having no stated repayment schedule or maturity and overdrafts.
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The interest rate composition of loans with a maturity date over one year are presented below based on contractual terms.
Loans Maturing After One Year
(in millions)
December 31, 2023
Predetermined (Fixed) Interest RateFloating Interest RateTotal
Commercial loans$375 $16,260 $16,635 
Real estate construction loans74 3,817 3,891 
Commercial mortgage loans1,524 9,378 10,902 
Lease financing286 251 537 
International loans3 591 594 
Residential mortgage loans522 1,362 1,884 
Consumer loans28 1,780 1,808 
Total$2,812 $33,439 $36,251 
Risk Management Derivative Instruments
The Corporation uses investment securities and derivative instruments as asset and liability management tools with the overall objective of managing the volatility of net interest income from changes in interest rates. These tools assist management in achieving the desired interest rate risk management objectives. Activity related to derivative instruments currently involves interest rate swaps effectively converting fixed-rate medium- and long-term debt to a floating rate as well as variable rate loans to a fixed rate. Notional activity for 2023 included the impact of LIBOR transition for centrally-cleared swaps, where LIBOR-based swaps were replaced with short-dated LIBOR bridge swaps that matured in 2023 and surviving forward-starting Secured Overnight Financing Rate (SOFR) swaps.
(in millions)
Risk Management Notional Activity
Interest
Rate
Contracts		Foreign
Exchange
Contracts		Totals
Balance at January 1, 2022$10,700 $452 $11,152 
Additions20,850 8,638 29,488 
Maturities/amortizations(1,800)(8,698)(10,498)
Balance at December 31, 2022$29,750 $392 $30,142 
Additions17,100 9,534 26,634 
Maturities/amortizations(9,150)(9,366)(18,516)
Terminations(6,550)— (6,550)
Balance at December 31, 2023$31,150 $560 $31,710 
The notional amount of risk management interest rate swaps totaled $31.2 billion at December 31, 2023, which included cash flow swaps that convert $24.9 billion of variable-rate loans to a fixed rate as well as fair value swaps that convert $6.3 billion of fixed-rate medium- and long-term debt to a floating rate. Risk management interest rate swaps generated $715 million of net interest expense for the year ended December 31, 2023, compared to no impact for the year ended December 31, 2022. Of the $24.9 billion of cash flow swaps, $7.0 billion were un-designated for accounting purposes as of December 31, 2023. Refer to Note 8 to the consolidated financial statements for further discussion of de-designated interest rate hedges.
In addition to interest rate swaps, the Corporation employs various other types of derivative instruments as offsetting positions to mitigate exposures to foreign currency risks associated with specific assets and liabilities (e.g., customer loans or deposits denominated in foreign currencies). Such instruments may include foreign exchange spot and forward contracts as well as foreign exchange swap agreements.
Further information regarding risk management derivative instruments is provided in Note 8 to the consolidated financial statements.
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Customer-Initiated and Other Derivative Instruments
(in millions)
Customer-Initiated and Other Notional Activity
Interest
Rate
Contracts		Energy
Derivative
Contracts		Foreign
Exchange
Contracts		Totals
Balance at January 1, 2022$21,000 $7,770 $1,716 $30,486 
Additions7,593 14,145 42,017 63,755 
Maturities/amortizations(3,017)(6,002)(41,029)(50,048)
Terminations(5,278)(1,392)— (6,670)
Balance at December 31, 2022$20,298 $14,521 $2,704 $37,523 
Additions16,207 11,510 44,060 71,777 
Maturities/amortizations(5,651)(10,761)(44,013)(60,425)
Terminations(8,384)(1,464)— (9,848)
Balance at December 31, 2023$22,470 $13,806 $2,751 $39,027 
The Corporation sells and purchases interest rate caps and floors and enters into foreign exchange contracts, interest rate swaps and energy derivative contracts to accommodate the needs of customers requesting such services. Changes in the fair value of customer-initiated and other derivatives are recognized in earnings as they occur. To limit the market risk of these activities, the Corporation generally takes offsetting positions with dealers. The notional amounts of offsetting positions are included in the table above. Customer-initiated and other notional activity represented 55 percent of total interest rate, energy and foreign exchange contracts at both December 31, 2023 and 2022, respectively.
Further information regarding customer-initiated and other derivative instruments is provided in Note 8 to the consolidated financial statements.
LIBOR Transition
On July 27, 2017, the United Kingdom’s Financial Conduct Authority (FCA), which regulates LIBOR, publicly announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. Effective March 2021, the FCA confirmed that certain LIBOR tenors would no longer be supported after December 31, 2021 and that the remaining tenors, including those most commonly used by the Corporation, would no longer be supported after June 30, 2023. The Corporation had substantial exposure to LIBOR-based products, ceased originating LIBOR-based products in the fourth quarter 2021 and has worked to remediate its outstanding LIBOR contracts. As of December 31, 2023, LIBOR transition was substantially complete.
BSBY Cessation
On November 15, 2023, the Bloomberg Index Services Limited (Bloomberg) announced that it will discontinue publishing the BSBY on November 15, 2024; accordingly, the Corporation was required to “de-designate” $7.0 billion of interest rate swaps used in cash flow hedges of certain BSBY-indexed loans and reclassify amounts recognized in accumulated other comprehensive income into earnings. For each de-designated swap, settlement of interest payments and changes in fair value are recorded as risk management hedging losses within other noninterest income instead of net interest income until the swap is re-designated. In January 2024, $4.2 billion of these swaps were re-designated, with the remaining expected to be re-designated in early 2024. The net impact of BSBY cessation to interest income on commercial loans was a $3 million benefit for the year ended December 31, 2023. Additionally, the Corporation recognized a net loss of $91 million in other noninterest income. Refer to Note 8 to the consolidated financial statements for further discussion of de-designated interest rate hedges.
At December 31, 2023, the Corporation had $33.0 billion of exposure to BSBY-based products, including $21.7 billion in loans and $11.3 billion in interest rate swaps. The Corporation is currently evaluating contracts to ensure appropriate fallback language is included, and will remediate contracts as necessary. The Corporation expects that the majority of BSBY-based contracts will organically transition to SOFR over the upcoming year, with any remaining contracts transitioning to SOFR through fallback language at the first repricing date after BSBY cessation occurs in November 2024.
Sources of Liquidity
The Corporation maintains a liquidity position that it believes will adequately satisfy its financial obligations while taking into account potential commitment draws and deposit run-off that may occur in the normal course of business. The majority of the Corporation's balance sheet is funded by customer deposits. Cash flows from loan repayments, increases in deposit accounts (including brokered deposits), activity in the securities portfolio and wholesale funding channels serve as the Corporation's primary liquidity sources.
The Corporation satisfies incremental liquidity needs with either liquid assets or external funding sources. Available liquidity includes cash, FHLB advances and Federal Reserve Bank (FRB) borrowing, comprised of borrowing through the discount window and the newly established Bank Term Funding Program (BTFP). The Corporation has pledged its investment securities portfolio to access wholesale funding as needed and does not intend to sell or restructure securities at this time.
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The Bank is a member of the FHLB of Dallas, Texas, which provides short- and long-term funding to its members through advances collateralized by real estate-related loans, certain government agency-backed securities and other eligible assets. Actual borrowing capacity is contingent on the amount of collateral pledged to the FHLB and the fair value of pledged assets, as well as applicable FHLB haircuts.
At December 31, 2023, the Bank had pledged real estate-related loans totaling $21.9 billion and investment securities totaling $6.6 billion to the FHLB, which provided for up to $17.1 billion of collateralized borrowing with the FHLB.
The FRB provides liquidity through its discount window, where banks may borrow funds based on the discounted fair value of pledged assets. Additionally, in March 2023, the FRB established the BTFP in response to the 2023 industry disruption, offering loans with up to one year in maturity to eligible depository institutions in exchange for pledged collateral in the form of U.S Treasuries, agency debt and mortgage-backed securities and other qualifying assets. Unlike other funding sources, borrowing capacity under the BTFP is based on the par value, not fair value, of collateral.
At December 31, 2023, the Bank had pledged loans totaling $24.6 billion and investment securities totaling $7.7 billion to the FRB, which provided for up to $21.0 billion and $9.3 billion of collateralized borrowing through the discount window and BTFP program, respectively. The Bank did not rely on the BTFP facility as a funding source, except to perform an operational test at the onset, and does not plan to use the facility before its announced expiration on March 11, 2024. Total available collateralized borrowings with the FRB was $30.3 billion at December 31, 2023.
The table below details the Corporation's sources of available liquidity at December 31, 2023.
(dollar amounts in millions)Total CapacityBorrowings OutstandingAvailable Liquidity
Cash on deposit with FRB (a)$7,860 
FHLB$17,081 $7,550 9,531 
FRB:
BTFP9,328 — 9,328 
Discount Window20,953 — 20,953 
Total available liquidity$47,672 
(a) Included in interest-bearing deposits with banks on the Consolidated Balance Sheet.
The Corporation may also use brokered deposits and external debt as additional sources of funding, and maintains a shelf registration statement with the Securities and Exchange Commission through which it may issue securities.The ability of the Corporation and the Bank to raise unsecured funding at competitive rates is impacted by rating agencies' views of the credit quality, liquidity, capital, earnings and other relevant factors related to the Corporation and the Bank. As of December 31, 2023, the three major rating agencies had assigned the following ratings to long-term senior unsecured obligations of the Corporation and the Bank, as well as long-term deposits at the Bank. A security rating is not a recommendation to buy, sell, or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating.
Debt RatingsDeposit Ratings
Comerica IncorporatedComerica BankComerica Bank
December 31, 2023RatingRatingOutlookRating
Moody’s Investors ServiceBaa1Baa1NegativeA1
Fitch RatingsA-A-NegativeA
Standard and Poor’sBBBBBB+Stablenot rated
Deposit Concentrations and Uninsured Deposits
The Corporation's focus is commercial customers, and accordingly, it has a larger percentage of uninsured deposits relative to financial institutions with a higher consumer focus. These deposits are well-diversified between geographies, industries and customers. At December 31, 2023, the Retail Bank and general Middle Market segments, both highly diversified and granular, accounted for 37% and 27% of the total deposit base, respectively.
Uninsured deposits are defined as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit and amounts in any other uninsured investment or deposit account that are classified as deposits and are not subject to any federal or state deposit insurance regimes.
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December 31, 2023December 31, 2022
(Dollar amount in millions)AmountPercentage of total depositsAmountPercentage of total deposits
Total uninsured deposits, as calculated per regulatory guidelines$31,485 47 %$45,492 64 %
Less: affiliate deposits(4,064)(4,458)
Total uninsured deposits, excluding affiliate deposits$27,421 41 %$41,034 57 %
Time deposits otherwise uninsured, which consist of foreign office time deposits, totaled $13 million at December 31, 2023 and all mature in three months or less. Collateralized deposits, consisting of trust deposits as well as deposits of public entities and state and local government agencies, totaled $687 million at December 31, 2023, compared to $843 million at December 31, 2022.
Potential Uses of Liquidity
Various financial obligations such as contractual obligations, unfunded commitments and deposit withdrawals may require future cash payments by the Corporation. Certain obligations are recognized on the Consolidated Balance Sheets, while others are off-balance sheet under U.S. generally accepted accounting principles.
The following table summarizes the Corporation's material noncancelable contractual obligations and future required minimum payments. Refer to Notes 10, 11, 12, and 25 to the consolidated financial statements for further information regarding these contractual obligations.
Selected Contractual Obligations
Minimum Payments Due by Period
(in millions)
December 31, 2023
TotalLess than
1 Year		1-3
Years		4-5
Years		More than
5 Years
Deposits without a stated maturity (a)$58,476 $58,476 
Certificates of deposit and other deposits with a stated maturity (a)8,286 8,177 $88 $18 $3 
Short-term borrowings (a)3,565 3,565 — — — 
Medium- and long-term debt (a)6,300 500 2,750 2,000 1,050 
Operating leases460 70 129 92 169 
Commitments to fund low income housing partnerships
Other long-term obligations (b)
Total contractual obligations$77,087 $70,788 $2,967 $2,110 $1,222 
Medium- and long-term debt (parent company only) (a) (b)$800 $— $250 $— $550 
(a)Deposits and borrowings exclude accrued interest.
(b)Parent company only amounts are included in the medium- and long-term debt minimum payments above.
In addition to contractual obligations, other commercial commitments of the Corporation impact liquidity. These include unused commitments to extend credit, standby letters of credit and financial guarantees, and commercial letters of credit. The following table summarizes the Corporation's commercial commitments and expected expiration dates by period.
Commercial Commitments
Expected Expiration Dates by Period
(in millions)
December 31, 2023
TotalLess than
1 Year		1-3
Years		4-5
Years		More than
5 Years
Unused commitments to extend credit$31,385 $8,091 $12,497 $6,986 $3,811 
Standby letters of credit and financial guarantees3,586 3,196 231 158 1 
Commercial letters of credit48 48 — — — 
Total commercial commitments$35,019 $11,335 $12,728 $7,144 $3,812 
Since many of these commitments expire without being fully drawn, and each customer must continue to meet the conditions established in the contract, the total amount of these commercial commitments does not necessarily represent the future cash requirements of the Corporation. Refer to Note 8 to the consolidated financial statements for a further discussion of these commercial commitments.
Other Market Risks
Market risk related to the Corporation's trading instruments is not significant, as trading activities are limited. Certain components of the Corporation's noninterest income, primarily fiduciary income, are at risk to fluctuations in the market values of underlying assets, particularly equity and debt securities. Other components of noninterest income, primarily brokerage fees, are at risk to changes in the volume of market activity.
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Operational Risk
Operational risk represents the risk of loss resulting from inadequate or failed internal processes and people, or from external events, excluding in most cases those driven by technology (see Technology Risk below). The Corporation's definition of operational risk includes fraud; employment practice and workplace safety; clients, products and business practice; business continuity or disaster recovery; execution, delivery, and process management; third party and model risks. The definition does not include strategic or reputational risks. Although operational losses are experienced by all companies and are routinely incurred in business operations, the Corporation recognizes the need to identify and control operational losses and seeks to limit losses to a level deemed appropriate by management, as outlined in the Corporation’s risk appetite statement. The appropriate risk level is determined through consideration of the nature of the Corporation's business and the environment in which it operates, in combination with the impact from, and the possible impact on, other risks faced by the Corporation. Operational risk is mitigated through a system of internal controls that are designed to keep operating risks at appropriate levels. The Operational Risk Management Committee monitors risk management techniques and systems. The Corporation has developed a framework that includes a centralized operational risk reporting function in the Enterprise Risk Division and business/support unit risk liaisons responsible for managing operational risk specific to the respective business lines.
Technology Risk
    Technology risk represents the risk of loss or adverse outcomes arising from the people, processes, applications and infrastructure that support the technology environment. The Corporation's definition of technology risk includes technology delivery risk, technology investment risk, cybersecurity risk, information security risk and information management risk. Technology risk is inclusive of the risks associated with the execution of technology processes and activities by third-party contractors and suppliers to the Corporation. Other risk types may materialize in the event of a technology risk event, such as the risk of a financial reporting error or regulatory non-compliance, and the impact of such risks are highly interdependent with operational risk.
    The Technology Risk Committee, comprising senior and executive business unit managers, as well as managers responsible for technology, cybersecurity, information security and enterprise risk management, oversees technology risk. The Technology Risk Committee also ensures that appropriate actions are implemented in business units to mitigate risk to an acceptable level.
Compliance Risk
Compliance risk represents the risk of sanctions or financial loss resulting from the Corporation's failure to comply with all applicable laws, regulations and standards of good banking practice. The impact of such risks is highly interdependent with strategic risk, as the reputational impact from compliance breaches can be severe. Activities which may expose the Corporation to compliance risk include, but are not limited to, those dealing with the prevention of money laundering, privacy and data protection, community reinvestment initiatives, fair lending, consumer protection, employment and tax matters, over-the-counter derivative activities and other regulated activities.
The Enterprise-Wide Compliance Committee, comprising senior and executive business unit managers, as well as managers responsible for compliance, audit and overall risk, oversees compliance risk. This enterprise-wide approach provides a consistent view of compliance across the organization. The Enterprise-Wide Compliance Committee also ensures that appropriate actions are implemented in business units to mitigate risk to an acceptable level.
Strategic Risk
Strategic risk represents the risk of inadequate returns or possible losses due to impairment of reputation, failure to fully develop and execute business plans, failure to assess current and new opportunities in business, markets and products, failure to determine appropriate consideration for risks accepted, and any other event not identified in the defined risk categories of credit, market and liquidity, operational, technology or compliance risks. Mitigation of the various risk elements that represent strategic risk is achieved through numerous metrics and initiatives to help the Corporation better understand, measure and report on such risks.
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CRITICAL ACCOUNTING ESTIMATES
The Corporation’s consolidated financial statements are prepared based on the application of accounting policies, the most significant of which are described in Note 1. These policies require numerous estimates and strategic or economic assumptions, which may prove inaccurate or subject to variations. Changes in underlying factors, assumptions or estimates could have a material impact on the Corporation’s future financial condition and results of operations. At December 31, 2023, the most critical of these estimates related to the allowance for credit losses, fair value measurement, goodwill, pension plan accounting and income taxes. These estimates were reviewed with the Audit Committee of the Corporation’s Board of Directors and are discussed more fully below.
ALLOWANCE FOR CREDIT LOSSES
In accordance with CECL, the allowance for credit losses, which includes both the allowance for loan losses and the allowance for credit losses on lending-related commitments, is calculated with the objective of maintaining a reserve for current expected credit losses over the remaining contractual life of the portfolio. The Corporation uses loss factors, based on estimated probability of default for internal risk ratings and loss given default, to determine the allowance for credit losses for the majority of its portfolio. Management applies loss factors to pools of loans and lending-related commitments with similar risk characteristics, calibrates these factors using economic forecasts and incorporates qualitative adjustments. For further discussion of the methodology used in the determination of the allowance for credit losses, refer to Note 1 to the consolidated financial statements. For further discussion on the economic forecast incorporated into the 2023 model, refer to the “Risk Management” section of this financial review.
Management's determination of the appropriateness of the allowance is based on periodic evaluations of the loan portfolio, lending-related commitments, current as well as forecasted economic factors and other relevant information. The calculation is inherently subjective and requires management to exercise significant judgment in developing assumptions for the estimate, the most significant of which are the loan risk rating process, development of economic forecasts and application of qualitative adjustments. Sensitivities are disclosed to demonstrate how changes in loan risk ratings and economic forecast scenarios may impact the allowance for credit losses. Sensitivities only consider changes to each specific assumption in isolation and their impact to the quantitative modeled results. They do not contemplate impacts to the qualitative framework.
Loan Risk Rating Process
Reserve factors are applied to pools of loans based on risk characteristics, including the Corporation's internal risk rating system; therefore, loss estimates are highly dependent on the accuracy of the risk rating assigned to each loan. The inherent imprecision in the risk rating system resulting from inaccuracy in assigning and/or entering risk ratings in the loan accounting system is monitored by the Corporation's asset quality review function. Changes to internal risk ratings, beyond the forecasted migration inherent in the credit models, would result in a different estimated allowance for credit losses. To illustrate, if 5 percent of the individual risk ratings were adjusted down by one rating across all pools, the allowance for loan losses as of December 31, 2023 would change by approximately $6 million.
Forecasted Economic Variables
Management utilizes models through which historical reserve factor estimates are calibrated to economic forecasts over the reasonable and supportable forecast period based on the projected performance of specific economic variables that statistically correlate with the probability of default and loss given default pools. Loss estimates revert to historical loss experience for contractual lives beyond the forecast period. Management selects economic variables it believes to be most relevant based on the composition of the loan portfolio and customer base, including forecasted levels of employment, gross domestic product, corporate bond and treasury spreads, industrial production levels, consumer and commercial real estate price indices as well as housing statistics.
The allowance for credit losses is highly sensitive to the economic forecasts used to develop the estimate. Due to the high level of uncertainty regarding significant assumptions, the Corporation evaluated a range of economic scenarios, including a more severe economic forecast scenario, with varying responses to current economic risks. The following table summarizes the more severe forecast scenario for the economic variables that are most impactful.
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Economic VariableMore Severe Forecast
Real GDP growthContracts through third quarter 2024, peaking at a decline of 3.5 percent annualized in second quarter 2024, subsequently improving to a 2.2 percent annual growth rate by the end of the forecast period.
Unemployment rateIncreases to 7.7 percent by first quarter 2025 followed by a gradual decline to 6.9 percent by the end of the forecast period.
Corporate BBB bond to 10-year Treasury bond spreadsSpreads widen to a peak of over 4.2 percent before gradually narrowing to 2.3 percent by the end of the forecast period.
Oil PricesDecline to $53 per barrel by first quarter 2025 before increasing to $61 per barrel by the end of the forecast period.
Selecting a different forecast in the current environment could result in a significantly different estimated allowance for credit losses. To illustrate, absent model overlays and other qualitative adjustments that are part of the quarterly reserving process, if the Corporation selected the more severe scenario to inform its models, the allowance for credit losses as of December 31, 2023 would increase by approximately $376 million. However, factoring in model overlays and qualitative adjustments could result in a materially different estimate under a more severe scenario.
Qualitative Adjustments and Model Overlays
The Corporation includes qualitative adjustments, as appropriate, intended to capture the impact of uncertainties not reflected in the quantitative estimate, including foresight risk, model imprecisions and input imprecisions. Qualitative adjustments for foresight risk reflect the inherent imprecision in economic forecasts and may be included based on management’s evaluation of different forecast scenarios, ranging from more benign to more severe, and known recent events impacting the Corporation’s portfolio. Model imprecision adjustments and model overlays may be included to mitigate known limitations in the quantitative models. Input imprecision includes adjustments for portfolios where recent historical losses exceed expected losses or known recent events are expected to alter risk ratings once evidence is acquired, as well as a qualitative assessment of the lending environment, including underwriting standards, current economic and political conditions, and other factors affecting credit quality. Qualitative reserves at December 31, 2023 primarily included adjustments for uncertainties related to forecasted economic variables.
Other Considerations
To the extent actual outcomes differ from management estimates, additional provision for credit losses may be required that would adversely impact earnings in future periods. The allowance is assigned to business segments, and any earnings impact resulting from actual outcomes differing from management estimates would primarily affect the Commercial Bank segment.
FAIR VALUE MEASUREMENT
Investment securities available-for-sale, derivatives and deferred compensation plan assets and associated liabilities are recorded at fair value on a recurring basis. Additionally, from time to time, other assets and liabilities may be recorded at fair value on a nonrecurring basis, such as impaired loans that have been measured based on the fair value of the underlying collateral, loans held-for-sale recorded at the lower of cost or market, other real estate (primarily foreclosed property), nonmarketable equity securities and certain other assets and liabilities. Nonrecurring fair value adjustments typically involve write-downs of individual assets or application of lower of cost or fair value accounting.
Fair value is an estimate of the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (i.e., not a forced transaction, such as a liquidation or distressed sale) between market participants at the measurement date and is based on the assumptions market participants would use when pricing an asset or liability. Fair value measurement and disclosure guidance establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. Notes 1 and 2 to the consolidated financial statements include information about the fair value hierarchy, the extent to which fair value is used to measure assets and liabilities, as well as the valuation methodologies and key inputs used.
At December 31, 2023, assets and liabilities measured using observable inputs that are classified as Level 1 or Level 2 represented substantially all of total assets and liabilities recorded at fair value, respectively. Valuations generated from model-based techniques that use at least one significant assumption not observable in the market are considered Level 3 and reflect estimates of assumptions market participants would use in pricing the asset or liability. The valuation of Level 3 assets and liabilities are considered critical accounting estimates.
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GOODWILL
Goodwill is initially recorded as the excess of the purchase price over the fair value of the net assets acquired in a business combination and is subsequently evaluated at least annually for impairment. Goodwill impairment testing is performed at the reporting unit level, equivalent to a business segment or one level below. The Corporation has three reporting units: the Commercial Bank, the Retail Bank, and Wealth Management. At December 31, 2023 and 2022, goodwill totaled $635 million, including $473 million allocated to the Commercial Bank, $101 million allocated to the Retail Bank, and $61 million allocated to Wealth Management.
The Corporation performs its annual evaluation of goodwill impairment in the third quarter of each year and may elect to perform a quantitative impairment analysis or first conduct a qualitative analysis to determine if a quantitative analysis is necessary. Additionally, the Corporation evaluates goodwill impairment on an interim basis if events or changes in circumstances between annual tests indicate additional testing may be warranted to determine if goodwill might be impaired.
During the third quarter of 2023, the Corporation elected to perform a quantitative impairment analysis. The estimated fair values of the reporting units were determined using a blend of two commonly used valuation techniques: the market approach and the income approach. For the market approach, valuations of reporting units considered a combination of earnings and equity multiples from companies with characteristics similar to the reporting unit. Since the fair values determined under the market approach are representative of noncontrolling interests, the valuations incorporated a control premium. For the income approach, estimated future cash flows were derived from internal forecasts and economic expectations for each reporting unit. In the short- and mid-term, forecasts incorporated current economic conditions and impacts of expected monetary policy decisions by the Federal Reserve Bank. Long-term projections reflected normalized rate and credit environments, as well as a long-term rate of return for each reporting unit. Projections were discounted using an applicable discount rate to calculate the fair value. The discount rate was based on the imputed cost of equity capital for each reporting unit, which incorporates the risk-free rate of return, a market equity risk premium, potential stock volatility, and a size risk premium. The discount rate further reflected the uncertainty of current economic conditions and potential impacts to the forecasted financial information.
The combined fair value of all units was compared to the Corporation's market capitalization for reasonableness. At the conclusion of the quantitative impairment test in the third quarter 2023, the estimated fair values of all reporting units substantially exceeded their carrying amounts, including goodwill. The Corporation performed a hypothetical sensitivity analysis to evaluate the impact to the estimated fair value of each reporting unit from an adverse change in the discount rate. A 100 basis point increase in the discount rate would result in the fair value of each reporting unit to continue to substantially exceed its carrying value.
The Corporation continues to monitor economic conditions that could significantly impact the impairment analysis and result in future goodwill impairment charges that, if incurred, could have a material adverse effect on the Corporation's results of operations in the period such charges are recognized. Additionally, any new legislative or regulatory changes not anticipated in management's expectations may cause the fair value of one or more of the reporting units to fall below the carrying value, resulting in a goodwill impairment charge. Any impairment charge would not affect the Corporation's regulatory capital ratios, tangible common equity ratio or liquidity position.
PENSION PLAN ACCOUNTING
The Corporation has a qualified and a non-qualified defined benefit pension plan. Effective January 1, 2017, benefits are calculated using a cash balance formula based on years of service, age, compensation and an interest credit based on the 30-year Treasury rate. Participants under age 60 as of December 31, 2016 are eligible to receive a frozen final average pay benefit in addition to amounts earned under the cash balance formula. Participants age 60 or older as of December 31, 2016 continue to be eligible for a final average pay benefit. The Corporation makes assumptions concerning future events that will determine the amount and timing of required benefit payments, funding requirements and defined benefit pension expense. The major assumptions are the discount rate used in determining the current benefit obligation, the long-term rate of return expected on plan assets, mix of assets within the portfolio and the projected mortality rate.
The discount rate is determined by matching the expected cash flows of the pension plans to a portfolio of high quality corporate bonds as of the measurement date, December 31. The long-term rate of return expected on plan assets is set after considering both long-term returns in the general market and long-term returns experienced by the assets in the plan. The current target asset allocation model for the plans is provided in Note 17 to the consolidated financial statements. The expected returns on these various asset categories are blended to derive one long-term return assumption. The assets are primarily invested in certain collective investment funds, common stocks, U.S. Treasury and other U.S. government agency securities, as well as corporate and municipal bonds and notes. Mortality rate assumptions are based on mortality tables published by third
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parties such as the Society of Actuaries, considering other available information including historical data as well as studies and publications from reputable sources.
The Corporation reviews its pension plan assumptions on an annual basis with its actuarial consultants to determine if the assumptions are reasonable and adjusts the assumptions to reflect changes in future expectations. The major assumptions used to calculate 2024 and 2023 defined benefit plan pension expense (benefit) were as follows:
2024 2023 
Discount rate5.33 %5.60 %
Long-term rate of return on plan assets6.75 %6.50 %
Mortality table:
Base table (a)Pri-2012Pri-2012
Mortality improvement scale (a)MP-2020MP-2020
(a)Issued by the Society of Actuaries
Defined benefit plan benefit is expected to increase $19 million to approximately $45 million in 2024, compared to a benefit of $26 million in 2023. This includes service cost expense of $37 million and a benefit from other components of $82 million. Service costs are included in salaries and benefits expense, while the benefit from other components are included in other noninterest expenses on the Consolidated Statements of Income.
The Corporation’s pension plan is most sensitive to changes in discount rate and long-term rate of return. A change to the discount rate implies a corresponding change in interest rates that affect the value of the plan’s fixed income assets. An increase of 25 basis points to the discount rate, including the effect of higher interest rates on the plan’s fixed income assets, would result in a net increase to pension expense of $6 million, while a decrease of 25 basis points would reduce pension expense by $6 million. Increasing the long-term rate of return by 25 basis points would reduce pension expense by $7 million, while a decrease of 25 basis points would increase pension expense by $7 million.
Due to the long-term nature of pension plan assumptions, actual results may differ significantly from the actuarial-based estimates. Differences resulting in actuarial gains or losses are required to be recorded in shareholders' equity as part of accumulated other comprehensive loss and amortized to defined benefit pension expense in future years. Refer to Note 17 to the consolidated financial statements for further information.
INCOME TAXES
The provision for income taxes is the sum of income taxes due for the current year and deferred taxes. Deferred taxes arise from temporary differences between the income tax basis and financial accounting basis of assets and liabilities. Accrued taxes represent the net estimated amount due to or to be received from taxing jurisdictions, currently or in the future, and are included in accrued income and other assets or accrued expenses and other liabilities on the Consolidated Balance Sheets.
Included in net deferred taxes are deferred tax assets. Deferred tax assets are evaluated for realization based on available evidence of projected future reversals of existing taxable temporary differences, assumptions made regarding future events and, when applicable, state loss carryback capacity. A valuation allowance is provided when it is more-likely-than-not that some portion of the deferred tax asset will not be realized. Determining whether deferred tax assets are realizable is subjective and requires the use of significant judgment.
The Corporation assesses the relative risks and merits of tax positions for various transactions after considering statutes, regulations, judicial precedent and other available information and maintains tax accruals consistent with these assessments. This assessment is complex and requires judgment. The Corporation is subject to audit by taxing authorities that could question and/or challenge the tax positions taken by the Corporation. Changes in the estimate of accrued taxes occur due to changes in tax law, interpretations of existing tax laws, new judicial or regulatory guidance, the status of examinations conducted by taxing authorities that impact the relative risks and merits of tax positions taken by the Corporation. These changes, when they occur, impact the estimate of accrued taxes and could be significant to the operating results of the Corporation. For further information on tax accruals and related risks, see Note 18 to the consolidated financial statements.

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SUPPLEMENTAL FINANCIAL DATA
The Corporation believes non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate the adequacy of common equity and performance trends. Tangible common equity is used by the Corporation to measure the quality of capital and the return relative to balance sheet risk. Common equity tier 1 capital ratio removes preferred stock from the Tier 1 capital ratio as defined by and calculated in conformity with bank regulations. The tangible common equity ratio removes the effect of intangible assets from capital and total assets. Tangible common equity per share of common stock removes the effect of intangible assets from common shareholders' equity per share of common stock.

The following table provides a reconciliation of non-GAAP financial measures and regulatory ratios used in this financial review with financial measures defined by GAAP.
(dollar amounts in millions)
December 3120232022
Common Equity Tier 1 Capital:
Tier 1 capital$8,808 $8,278 
Less:
Fixed-rate reset non-cumulative perpetual preferred stock394 394 
Common equity tier 1 capital$8,414 $7,884 
Risk-weighted assets$75,901 $78,871 
Tier 1 capital ratio11.60 %10.50 %
Common equity tier 1 capital ratio11.09 10.00 
Tangible Common Equity Ratio:
Total shareholders' equity$6,406 $5,181 
Less:
Fixed-rate reset non-cumulative perpetual preferred stock394 394 
Common shareholders' equity$6,012 $4,787 
Less:
Goodwill635 635 
Other intangible assets8 9 
Tangible common equity$5,369 $4,143 
Total assets$85,834 $85,406 
Less:
Goodwill635 635 
Other intangible assets8 9 
Tangible assets$85,191 $84,762 
Common equity ratio7.00 %5.60 %
Tangible common equity ratio6.30 4.89 
Tangible Common Equity per Share of Common Stock:
Common shareholders' equity$6,012 $4,787 
Tangible common equity5,369 4,143 
Shares of common stock outstanding (in millions)132 131 
Common shareholders' equity per share of common stock$45.58 $36.55 
Tangible common equity per share of common stock40.70 31.62 

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FORWARD-LOOKING STATEMENTS
This report includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. In addition, the Corporation may make other written and oral communications from time to time that contain such statements. All statements regarding the Corporation's expected financial position, strategies and growth prospects as well as general economic conditions expected to exist in the future are 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 the Corporation or its management, are intended to identify forward-looking statements. The Corporation 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 the Corporation 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.
In addition to factors mentioned elsewhere in this report or previously disclosed in the Corporation's SEC reports (accessible on the SEC's website at www.sec.gov or on the Corporation's website at www.comerica.com), actual results could differ materially from forward-looking statements and future results could differ materially from historical performance due to a variety of reasons, including but not limited to, the following factors:
•changes in customer behavior may adversely impact the Corporation's business, financial condition and results of operations;
•unfavorable developments concerning credit quality could adversely affect the Corporation's financial results;
•declines in the businesses or industries of the Corporation's customers could cause increased credit losses or decreased loan balances, which could adversely affect the Corporation;
•governmental monetary and fiscal policies may adversely affect the financial services industry, and therefore impact the Corporation's financial condition and results of operations;
•fluctuations in interest rates and their impact on deposit pricing could adversely affect the Corporation's net interest income and balance sheet;
•the Corporation's transition away from the Bloomberg Short-Term Bank Yield Index could adversely affect its financial results;
•the Corporation must maintain adequate sources of funding and liquidity to meet regulatory expectations, support its operations and fund outstanding liabilities;
•reduction in the Corporation's credit ratings could adversely affect the Corporation and/or the holders of its securities;
•the soundness of other financial institutions could adversely affect the Corporation;
•security risks, including denial of service attacks, hacking, social engineering attacks targeting the Corporation’s colleagues and customers, malware intrusion or data corruption attempts, and identity theft, could result in the disclosure of confidential information, adversely affect its business or reputation, and create significant legal and financial exposure;
•cybersecurity and data privacy are areas of heightened legislative and regulatory focus;
•the Corporation’s operational or security systems or infrastructure, or those of third parties, could fail or be breached, , which could disrupt Comerica’s business and adversely impact the Corporation’s results of operations, liquidity and financial condition, as well as cause legal or reputational harm;
•the Corporation relies on other companies to provide certain key components of its delivery systems, and certain failures could materially adversely affect operations;
•legal and regulatory proceedings and related financial services industry matters, including those directly involving the Corporation and its subsidiaries, could adversely affect the Corporation or the financial services industry in general;
•the Corporation may incur losses due to fraud;
•controls and procedures may fail to prevent or detect all errors or acts of fraud;
•changes in regulation or oversight, or changes in Comerica’s status with respect to existing regulations or oversight, may have a material adverse impact on the Corporation's operations;
•compliance with more stringent capital requirements may adversely affect the Corporation;
•changes to tax law or regulations, or changes to administrative or judicial interpretations of tax law or regulations, could adversely affect the Corporation;
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•damage to the Corporation’s reputation could damage its businesses;
•the Corporation may not be able to utilize technology to develop, market and deliver new products and services to its customers;
•competitive product and pricing pressures within the Corporation's markets may change;
•the introduction, implementation, withdrawal, success and timing of business initiatives and strategies may be less successful or may be different than anticipated, which could adversely affect the Corporation's business;
•management's ability to maintain and expand customer relationships may differ from expectations;
•management's ability to retain key officers and employees may change;
•any future strategic acquisitions or divestitures may present certain risks to the Corporation's business and operations;
•general political, economic or industry conditions, either domestically or internationally, may be less favorable than expected;
•inflation could negatively impact the Corporation's business, profitability and stock price;
•methods of reducing risk exposures might not be effective;
•catastrophic events, including pandemics, may adversely affect the general economy, financial and capital markets, specific industries, and the Corporation;
•climate change manifesting as physical or transition risks could adversely affect the Corporation's operations, businesses and customers;
•changes in accounting standards could materially impact the Corporation's financial statements;
•the Corporation's accounting policies and processes are critical to the reporting of financial condition and results of operations and require management to make estimates about matters that are uncertain;
•the Corporation's stock price can be volatile; and
•an investment in the Corporations' equity securities is not insured or guaranteed by the FDIC.
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CONSOLIDATED BALANCE SHEETS
Comerica Incorporated and Subsidiaries
(in millions, except share data)
December 3120232022
ASSETS
Cash and due from banks$1,443 $1,758 
Interest-bearing deposits with banks8,059 4,524 
Other short-term investments399 157 
Investment securities available-for-sale16,869 19,012 
Commercial loans27,251 30,909 
Real estate construction loans5,083 3,105 
Commercial mortgage loans13,686 13,306 
Lease financing807 760 
International loans1,102 1,197 
Residential mortgage loans1,889 1,814 
Consumer loans2,295 2,311 
Total loans52,113 53,402 
Allowance for loan losses(688)(610)
Net loans51,425 52,792 
Premises and equipment445 400 
Accrued income and other assets7,194 6,763 
Total assets$85,834 $85,406 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits$27,849 $39,945 
Money market and interest-bearing checking deposits28,246 26,290 
Savings deposits2,381 3,225 
Customer certificates of deposit3,723 1,762 
Other time deposits4,550 124 
Foreign office time deposits13 51 
Total interest-bearing deposits38,913 31,452 
Total deposits66,762 71,397 
Short-term borrowings3,565 3,211 
Accrued expenses and other liabilities2,895 2,593 
Medium- and long-term debt6,206 3,024 
Total liabilities79,428 80,225 
Fixed-rate reset non-cumulative perpetual preferred stock, series A, no par value, $100,000 liquidation preference per share:
Authorized - 4,000 shares
Issued - 4,000 shares394 394 
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares1,141 1,141 
Capital surplus2,224 2,220 
Accumulated other comprehensive loss(3,048)(3,742)
Retained earnings11,727 11,258 
Less cost of common stock in treasury - 96,266,568 shares at 12/31/2023 and 97,197,962 shares at 12/31/2022(6,032)(6,090)
Total shareholders’ equity6,406 5,181 
Total liabilities and shareholders’ equity$85,834 $85,406 
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
(in millions, except per share data)
Years Ended December 31202320222021
INTEREST INCOME
Interest and fees on loans$3,340 $2,153 $1,594 
Interest on investment securities430 414 280 
Interest on short-term investments405 105 27 
Total interest income4,175 2,672 1,901 
INTEREST EXPENSE
Interest on deposits892 102 22 
Interest on short-term borrowings391 17 — 
Interest on medium- and long-term debt378 87 35 
Total interest expense1,661 206 57 
Net interest income2,514 2,466 1,844 
Provision for credit losses89 60 (384)
Net interest income after provision for credit losses2,425 2,406 2,228 
NONINTEREST INCOME
Card fees280 273 298 
Fiduciary income235 233 231 
Service charges on deposit accounts185 195 195 
Capital markets income147 154 146 
Commercial lending fees72 68 68 
Bank-owned life insurance46 47 43 
Letter of credit fees42 38 40 
Brokerage fees30 21 14 
Risk management hedging (loss) income(42)8 — 
Other noninterest income83 31 88 
Total noninterest income1,078 1,068 1,123 
NONINTEREST EXPENSES
Salaries and benefits expense1,306 1,208 1,133 
Outside processing fee expense277 251 266 
FDIC insurance expense180 31 22 
Occupancy expense171 175 161 
Software expense171 161 155 
Equipment expense50 50 50 
Advertising expense40 38 35 
Other noninterest expenses164 84 39 
Total noninterest expenses2,359 1,998 1,861 
Income before income taxes1,144 1,476 1,490 
Provision for income taxes263 325 322 
NET INCOME881 1,151 1,168 
Less:
Income allocated to participating securities4 6 5 
Preferred stock dividends23 23 23 
Net income attributable to common shares$854 $1,122 $1,140 
Earnings per common share:
Basic$6.47 $8.56 $8.45 
Diluted6.44 8.47 8.35 
Cash dividends declared on common stock375 356 365 
Cash dividends declared per common share2.84 2.72 2.72 
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Comerica Incorporated and Subsidiaries
(in millions)
Years Ended December 31202320222021
NET INCOME$881 $1,151 $1,168 
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized gains (losses) on investment securities:
Net unrealized holding gains (losses) arising during the period361 (2,903)(406)
Change in net unrealized gains (losses) before income taxes361 (2,903)(406)
Net gains (losses) on cash flow hedges:
Net cash flow hedge gains (losses) arising during the period before income taxes34 (1,329)(35)
Reclassification of loss related to de-designation of derivatives to other noninterest income(195)— — 
Less:
Net cash flow hedge (losses) gains recognized in interest and fees on loans before taxes(576)(25)95 
Amortization of unrealized losses related to de-designated derivatives included in interest and fees on loans(26)— — 
Change in net cash flow hedge gains (losses) before income taxes441 (1,304)(130)
Defined benefit pension and other postretirement plans adjustment:
Actuarial gain (loss) arising during the period96 (415)159 
Prior service credit arising during the period— — 1 
Adjustments for amounts recognized as components of net periodic benefit cost:
Amortization of actuarial net loss36 28 40 
Amortization of prior service credit(23)(23)(25)
Change in defined benefit pension and other postretirement plans adjustment before income taxes109 (410)175 
Total other comprehensive income (loss) before income taxes911 (4,617)(361)
Provision (benefit) for income taxes217 (1,087)(85)
Total other comprehensive income (loss), net of tax694 (3,530)(276)
COMPREHENSIVE INCOME (LOSS)$1,575 $(2,379)$892 
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Comerica Incorporated and Subsidiaries
Accumulated
NonredeemableCommon StockOtherTotal
PreferredSharesCapitalComprehensiveRetainedTreasuryShareholders'
(in millions, except per share data)StockOutstandingAmountSurplusIncome (Loss)EarningsStockEquity
BALANCE AT DECEMBER 31, 2020$394 139.2 $1,141 $2,185 $64 $9,727 $(5,461)$8,050 
Net income— — — — — 1,168 — 1,168 
Other comprehensive loss, net of tax— — — — (276)— — (276)
Cash dividends declared on common stock ($2.72 per share)— — — — — (365)— (365)
Cash dividends declared on preferred stock— — — — — (23)— (23)
Purchase of common stock— (9.5)— (24)— — (699)(723)
Net issuance of common stock under employee stock plans— 1.0 — (27)— (13)65 25 
Share-based compensation— — — 41 — — — 41 
BALANCE AT DECEMBER 31, 2021$394 130.7 $1,141 $2,175 $(212)$10,494 $(6,095)$7,897 
Net income— — — — — 1,151 — 1,151 
Other comprehensive loss, net of tax— — — — (3,530)— — (3,530)
Cash dividends declared on common stock ($2.72 per share)— — — — — (356)— (356)
Cash dividends declared on preferred stock— — — — — (23)— (23)
Purchase of common stock— (0.4)— — — — (36)(36)
Net issuance of common stock under employee stock plans— 0.7 — (15)— (8)41 18 
Share-based compensation— — — 60 — — — 60 
BALANCE AT DECEMBER 31, 2022$394 131.0 $1,141 $2,220 $(3,742)$11,258 $(6,090)$5,181 
Net income— — — — — 881 — 881 
Other comprehensive income, net of tax— — — — 694 — — 694 
Cash dividends declared on common stock ($2.84 per share)— — — — — (375)— (375)
Cash dividends declared on preferred stock— — — — — (23)— (23)
Net issuance of common stock under employee stock plans— 0.9 — (48)— (14)58 (4)
Share-based compensation— — — 52 — — — 52 
BALANCE AT DECEMBER 31, 2023$394 131.9 $1,141 $2,224 $(3,048)$11,727 $(6,032)$6,406 
See notes to consolidated financial statements.


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CONSOLIDATED STATEMENTS OF CASH FLOWS
Comerica Incorporated and Subsidiaries

(in millions)
Years Ended December 31202320222021
OPERATING ACTIVITIES
Net income$881 $1,151 $1,168 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses89 60 (384)
(Benefit) provision for deferred income taxes(92)(27)79 
Depreciation and amortization87 92 99 
Net periodic defined benefit credit(27)(91)(81)
Share-based compensation expense52 60 41 
Net amortization of securities19 30 36 
Net gains on sales of foreclosed and other bank property(36)(2)— 
Net change in:
Accrued income receivable(65)(152)13 
Accrued expenses payable348 131 132 
Other, net(5)(614)(469)
Net cash provided by operating activities1,251 638 634 
INVESTING ACTIVITIES
Investment securities available-for-sale:
Maturities and redemptions2,485 2,511 5,536 
Purchases— (7,470)(7,936)
Net change in loans1,265 (4,824)4,067 
Proceeds from sales of foreclosed and other bank property44 3 8 
Net increase in premises and equipment(153)(82)(70)
Federal Home Loan Bank stock:
Purchases(504)(131)— 
Redemptions325 — 115 
Proceeds from bank-owned life insurance settlements30 39 16 
Other, net2 2 (13)
Net cash provided by (used in) investing activities3,494 (9,952)1,723 
FINANCING ACTIVITIES
Net change in:
Deposits(4,634)(10,401)8,438 
Short-term borrowings354 3,211 — 
Medium- and long-term debt:
Maturities and redemptions(850)— (2,800)
Issuances and advances4,000 500 — 
Cash dividends paid on preferred stock(23)(23)(23)
Common stock:
Repurchases(17)(43)(729)
Cash dividends paid(371)(353)(369)
Issuances under employee stock plans18 28 34 
Other, net(2)(2)4 
Net cash (used in) provided by financing activities(1,525)(7,083)4,555 
Net increase (decrease) in cash and cash equivalents3,220 (16,397)6,912 
Cash and cash equivalents at beginning of period6,282 22,679 15,767 
Cash and cash equivalents at end of period$9,502 $6,282 $22,679 
Interest paid$1,449 $130 $57 
Income taxes paid317 277 157 
See notes to consolidated financial statements.
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NOTE 1 - BASIS OF PRESENTATION AND ACCOUNTING POLICIES
Organization
Comerica Incorporated (the Corporation) is a registered financial holding company headquartered in Dallas, Texas. The Corporation’s major business segments are the Commercial Bank, the Retail Bank and Wealth Management. For further discussion of each business segment, refer to Note 22. The Corporation and its banking subsidiaries are regulated at both the state and federal levels.
The accounting and reporting policies of the Corporation conform to United States (U.S.) generally accepted accounting principles (GAAP). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from these estimates. Certain amounts in the financial statements for prior years have been reclassified to conform to the current financial statement presentation.
The following summarizes the significant accounting policies of the Corporation applied in the preparation of the accompanying consolidated financial statements.
Principles of Consolidation
The consolidated financial statements include the accounts of the Corporation and the accounts of those subsidiaries that are majority owned and in which the Corporation has a controlling financial interest. The Corporation consolidates entities not determined to be variable interest entities (VIEs) when it holds a controlling financial interest and applies the cost or equity method when it holds less than a controlling financial interest. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies acquired are included from the date of acquisition.
The Corporation holds investments in certain legal entities that are considered VIEs. In general, a VIE is an entity that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations. If any of these characteristics are present, the entity is subject to a variable interests consolidation model, and consolidation is based on variable interests, not on voting interests. Variable interests are defined as contractual ownership or other economic interests in an entity that change with fluctuations in the entity’s net asset value. The primary beneficiary is required to consolidate the VIE as it has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE. The maximum potential exposure to losses relative to investments in VIEs is generally limited to the sum of the outstanding book basis and unfunded commitments for future investments.
The Corporation evaluates its investments in VIEs, both at inception and when there is a change in circumstances that requires reconsideration, to determine if the Corporation is the primary beneficiary and consolidation is required. The Corporation accounts for unconsolidated VIEs using either the proportional, cost or equity method. These investments comprise investments in community development projects which generate tax credits to their investors and are included in accrued income and other assets on the Consolidated Balance Sheets.
The proportional method is used for investments in affordable housing projects that qualify for the low-income housing tax credit (LIHTC). The equity method is used for other investments where the Corporation has the ability to exercise significant influence over an entity’s operations and financial policies. Other unconsolidated equity investments that do not meet the criteria to be accounted for under the equity method are accounted for under the cost method. Amortization and other write-downs of LIHTC investments are presented on a net basis as a component of the provision for income taxes, while income, amortization and write-downs from cost and equity method investments are recorded in other noninterest income on the Consolidated Statements of Income.
See Note 9 for additional information about the Corporation’s involvement with VIEs.
Assets held in an agency or fiduciary capacity are not assets of the Corporation and are not included in the consolidated financial statements.
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Fair Value Measurements
The Corporation utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, the Corporation uses present value techniques and other valuation methods to estimate the fair values of its financial instruments. These valuation methods require considerable judgment and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used.
Fair value is an estimate of the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (i.e., not a forced transaction, such as a liquidation or distressed sale) between market participants at the measurement date. Fair value is based on the assumptions market participants would use when pricing an asset or liability.
Investment securities available-for-sale, derivatives, deferred compensation plans and equity securities with readily determinable fair values (primarily money market mutual funds) are recorded at fair value on a recurring basis. Additionally, from time to time, the Corporation may be required to record other assets and liabilities at fair value on a nonrecurring basis, such as impaired loans, loans held for sale, other real estate (primarily foreclosed property), nonmarketable equity securities and certain other assets and liabilities. These nonrecurring fair value adjustments typically involve write-downs of individual assets or application of lower of cost or fair value accounting.
Fair value measurements and disclosures guidance establishes a three-level fair value hierarchy based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. Fair value measurements are separately disclosed by level within the fair value hierarchy. For assets and liabilities recorded at fair value, it is the Corporation’s policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements.
Level 1Valuation is based on quoted prices for identical instruments traded in active markets.
Level 2Valuation is based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are less active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.
The Corporation generally utilizes third-party pricing services to value Level 1 and Level 2 securities. Management reviews the methodologies and assumptions used by the third-party pricing services and evaluates the values provided, principally by comparison with other available market quotes for similar instruments and/or analysis based on internal models using available third-party market data. The Corporation may occasionally adjust certain values provided by the third-party pricing service when management believes, as the result of its review, that the adjusted price most appropriately reflects the fair value of the particular security.
Fair value measurements for assets and liabilities where limited or no observable market data exists are based primarily upon estimates, often calculated based on the economic and competitive environment, the characteristics of the asset or liability and other factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, so that changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values.
Following are descriptions of the valuation methodologies and key inputs used to measure financial assets and liabilities recorded at fair value, as well as a description of the methods and significant assumptions used to estimate fair value disclosures for financial instruments not recorded at fair value in their entirety on a recurring basis. The descriptions include an indication of the level of the fair value hierarchy in which the assets or liabilities are classified.
Deferred compensation plan assets and liabilities as well as equity securities with a readily determinable fair value
The Corporation holds a portfolio of securities that includes equity securities and assets held related to deferred compensation plans. Securities and associated deferred compensation plan liabilities are recorded at fair value on a recurring basis and included in other short-term investments and accrued expenses and other liabilities, respectively, on the Consolidated Balance Sheets. Level 1 securities include assets related to deferred compensation plans, which are invested in mutual funds, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and other securities traded on
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an active exchange, such as the New York Stock Exchange. Level 2 securities include municipal bonds and mortgage-backed securities issued by U.S. government-sponsored entities and corporate debt securities. Deferred compensation plan liabilities represent the fair value of the obligation to the plan participant, which corresponds to the fair value of the invested assets. The methods used to value equity securities and deferred compensation plan assets are the same as the methods used to value investment securities, discussed below.
Investment securities available-for-sale
Investment securities available-for-sale are recorded at fair value on a recurring basis. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored entities, as well as corporate debt securities. The fair value of Level 2 securities is determined using quoted prices of securities with similar characteristics, or pricing models based on observable market data inputs, primarily interest rates, spreads and prepayment information.
Securities classified as Level 3 represent securities in less liquid markets requiring significant management assumptions when determining fair value.
Loans held-for-sale
Loans held-for-sale, included in other short-term investments on the Consolidated Balance Sheets, are recorded at the lower of cost or fair value. Loans held-for-sale may be carried at fair value on a nonrecurring basis when fair value is less than cost. When the fair value is based on what secondary markets are currently offering for portfolios with similar characteristics, the loans are classified as Level 2. When secondary market information is not available, the fair value is estimated based on the repricing frequency of the loans and estimated credit risk using internally-developed lifetime loss estimates, resulting in the loans being classified as Level 3.
Loans
The Corporation does not record loans at fair value on a recurring basis. However, an individual allowance may be established for a loan that no longer shares risk characteristics with loan pools, typically collateral-dependent loans for which reserves are based on the fair value of the underlying collateral. Such loan values are reported as nonrecurring fair value measurements. Collateral values supporting individually evaluated loans are evaluated quarterly. When management determines that the fair value of the collateral requires additional adjustments, either as a result of non-current appraisal value or when there is no observable market price, the Corporation classifies the loan as Level 3.
Derivative assets and derivative liabilities
Derivative instruments held or issued for risk management or customer-initiated activities are traded in over-the-counter markets where quoted market prices are not readily available. Fair value for over-the-counter derivative instruments is measured on a recurring basis using internally developed models primarily based on market observable inputs, such as yield curves and option volatilities. The Corporation manages credit risk on its derivative positions based on whether the derivatives are settled through a clearinghouse or bilaterally with each counterparty. For derivative positions settled on a counterparty-by-counterparty basis, the Corporation calculates credit valuation adjustments, included in the fair value of these instruments, on the basis of its relationships at the counterparty portfolio or master netting agreement level. These credit valuation adjustments are determined by applying a credit spread for the counterparty or the Corporation, as appropriate, to the total expected exposure of the derivative after considering collateral and other master netting arrangements. These adjustments, which are considered Level 3 inputs, are based on estimates of current credit spreads to evaluate the likelihood of default. When credit valuation adjustments are significant to the overall fair value of a derivative, the Corporation classifies the over-the-counter derivative valuation in Level 3 of the fair value hierarchy; otherwise, over-the-counter derivative valuations are classified in Level 2.
Other real estate
Other real estate is included in accrued income and other assets on the Consolidated Balance Sheets and includes primarily foreclosed property. Foreclosed property is initially recorded at fair value, less costs to sell, at the date of legal title transfer to the Corporation, establishing a new cost basis. Subsequently, foreclosed property is carried at the lower of cost or fair value, less costs to sell. Other real estate may be carried at fair value on a nonrecurring basis when fair value is less than cost. Fair value is based upon independent market prices, appraised value or management's estimate of the value of the property. When management determines that the fair value of other real estate requires additional adjustments, either as a result
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of a non-current appraisal or when there is no observable market price, the Corporation classifies the other real estate as Level 3.
For further information about fair value measurements refer to Note 2.
Other Short-Term Investments
Other short-term investments include deferred compensation plan assets, certificates of deposits, equity securities with a readily determinable fair value and loans held-for-sale.    
Deferred compensation plan assets and equity securities are carried at fair value. Realized and unrealized gains or losses are included in other noninterest income on the Consolidated Statements of Income.
Loans held-for-sale include variable-rate demand notes, residential mortgages originated with the intent to sell and occasionally other loans transferred to held-for-sale. Loans held-for-sale are carried at the lower of cost or fair value. Fair value is determined in the aggregate for each portfolio. Changes in fair value and gains or losses upon sale are included in other noninterest income on the Consolidated Statements of Income.
Investment Securities
Debt securities are classified as trading, available-for-sale (AFS) or held-to-maturity. Trading securities are recorded at fair value, with unrealized gains and losses included in noninterest income on the Consolidated Statements of Income. AFS securities are recorded at fair value, with unrealized gains and losses, net of income taxes, reported as a separate component of other comprehensive income (OCI). Securities for which management has the intent and ability to hold to maturity are classified as held-to-maturity and recorded at amortized cost. Interest income is recognized using the interest method. Substantially all of the Corporation's investment securities are classified as AFS at December 31, 2023 and 2022.
An AFS security is impaired if its fair value is less than amortized cost. Credit-related impairment is recognized as an allowance to investment securities available-for-sale on the Consolidated Balance Sheets with a corresponding adjustment to provision for credit losses on the Consolidated Statements of Income. Non-credit-related impairment is recognized as a component of OCI. If the Corporation intends to sell an impaired AFS security or more likely than not will be required to sell that security before recovering its amortized cost basis, the entire impairment amount is recognized in earnings with corresponding adjustment to the security's amortized cost basis.
For certain types of AFS securities, such as U.S. Treasuries and other securities with government guarantees, the Corporation generally expects zero credit losses. The zero-loss expectation applies to all the Corporation’s securities and no allowance for credit losses was recorded on its AFS securities portfolio at December 31, 2023.
Gains or losses on the sale of securities are computed based on the adjusted cost of the specific security sold.
For further information on investment securities, refer to Note 3.
Loans
Loans and leases originated and held for investment are recorded at the principal balance outstanding, net of unearned income, charge-offs and unamortized deferred fees and costs. Interest income is recognized on loans and leases using the interest method.
Effective January 1, 2023, the Corporation assesses all loan modifications to determine whether one is granted to a borrower experiencing financial difficulty, regardless of whether the modified loan terms include a concession. Modifications granted to borrowers experiencing financial difficulty may be in the form of an interest rate reduction, an other-than-insignificant payment delay, a term extension, principal forgiveness or a combination thereof (collectively referred to as Financially Distressed Modifications or FDMs). Prior to 2023, the Corporation assessed all loan modifications to determine whether a restructuring constituted a troubled debt restructuring (TDR). A restructuring was considered a TDR when a borrower was experiencing financial difficulty and the Corporation granted a concession to the borrower.
Certain types of modifications related to COVID-19 that were granted during 2020 and 2021 were excluded from TDR accounting. See Note 1 in the 2021 10-K for additional information.
Effective January 1, 2020, the Corporation adopted ASU No. 2020-04 "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," (ASU 2020-04). Typically, entities must evaluate whether a loan contract modification results in a modified loan or a new loan for accounting purposes. Topic 848 allows entities to bypass this evaluation for qualifying modifications related to reference rate reform. The Corporation applied the relief
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provided by Topic 848 to qualifying contract modifications transitioning away from LIBOR. After LIBOR transition was substantially complete in third quarter 2023, the Corporation no longer applied the relief guidance.
Loan Origination Fees and Costs
Substantially all loan origination fees and costs are deferred and amortized to net interest income over the life of the related loan or over the commitment period as a yield adjustment. Net deferred income on originated loans, including unearned income and unamortized costs, fees, premiums and discounts, totaled $94 million and $118 million at December 31, 2023 and 2022, respectively.
Loan fees on unused commitments and net origination fees related to loans sold are recognized in noninterest income.
Allowance for Credit Losses
The allowance for credit losses includes both the allowance for loan losses and the allowance for credit losses on lending-related commitments.
The Corporation disaggregates the loan portfolio into segments for purposes of determining the allowance for credit losses. These segments are based on the level at which the Corporation develops, documents and applies a systematic methodology to determine the allowance for credit losses. The Corporation's portfolio segments are business loans and retail loans. Business loans include the commercial, real estate construction, commercial mortgage, lease financing and international loan portfolios. Retail loans consist of residential mortgage and consumer loans, including home equity loans.
Current expected credit losses are estimated over the contractual life of the loan portfolio, considering all available relevant information, including historical and current conditions as well as reasonable and supportable forecasts of future events.
For further information on the Allowance for Credit Losses, refer to Note 4.
Allowance for Loan Losses
The allowance for loan losses is estimated on a quarterly basis and represents management’s estimates of current expected credit losses in the Corporation’s loan portfolio. Pools of loans with similar risk characteristics are collectively evaluated while loans that no longer share risk characteristics with loan pools are evaluated individually.
Collective loss estimates are determined by applying loss factors, designed to estimate current expected credit losses, to amortized cost balances over the remaining contractual life of the collectively evaluated portfolio. Loans with similar risk characteristics are aggregated into homogeneous pools. Business loans are assigned to pools based primarily on business line and the Corporation’s internal risk rating system. For retail loans, pools are based on loan type, past due status and credit scores. Loss factors are based on an estimated probability of default for each pool, set to a default horizon based on contractual life, and loss given default. Historical estimates are calibrated to economic forecasts over the reasonable and supportable forecast period based on the projected performance of specific economic variables that statistically correlate with each of the probability of default and loss given default pools. At least annually, management considers different models when estimating credit losses, selecting ones that most reasonably forecast credit losses in the relevant economic environment.
The calculation of current expected credit losses is inherently subjective, as it requires management to exercise judgment in determining appropriate factors used to determine the allowance. Some of the most significant factors in the quantitative allowance estimate are assigning internal risk ratings to loans, selecting the economic forecasts used to calibrate the reserve factors and determining the reasonable and supportable forecast period.
•Internal Risk Ratings: Loss factors are dependent on loan risk ratings for business loans. Risk ratings are assigned at origination, based on inherent credit risk, and updated based on new information that becomes available, periodic reviews of credit quality, a change in borrower performance or modifications to lending agreements.
•Economic Forecasts: Management selects economic variables it believes to be most relevant based on the composition of the loan portfolio and customer base, including forecasted levels of employment, gross domestic product, corporate bond and treasury spreads, industrial production levels, consumer and commercial real estate price indices as well as housing statistics. Different economic forecast scenarios ranging from more benign to more severe are evaluated each reporting period to forecast losses over the contractual life of the loan portfolio.
•Forecast Period: Economic forecasts are applied over the period management believes it can estimate reasonable and supportable forecasts. Forecast periods may be adjusted in response to changes in the economic environment. To estimate losses for contractual periods that extend beyond the forecast horizon, the Corporation reverts to an average historical loss
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experience. The Corporation typically forecasts economic variables over a two-year horizon, followed by an immediate reversion to an average historical loss experience that generally incorporates a full economic cycle. Management reviews this methodology on at least an annual basis.
The allowance for loan losses also includes qualitative adjustments to bring the allowance to the level management believes is appropriate based on factors that have not otherwise been fully accounted for, including adjustments for foresight risk, input imprecision and model imprecision. Foresight risk reflects the inherent imprecision in forecasting economic variables, including determining the depth and duration of economic cycles and their impact to relevant economic variables. The Corporation may make qualitative adjustments based on its evaluation of different forecast scenarios and known recent events impacting relevant economic variables. Input imprecision factors address the risk that certain model inputs may not reflect all available information including (i) risk factors that have not been fully addressed in internal risk ratings, (ii) changes in lending policies and procedures, (iii) changes in the level and quality of experience held by lending management, (iv) imprecision in the risk rating system and (v) limitations in data available for certain loan portfolios. Model imprecision considers known model limitations and model updates not yet fully reflected in the quantitative estimate.
The determination of the appropriate qualitative adjustment is based on management's analysis of current and expected economic conditions and their impact to the portfolio, as well as internal credit risk movements and a qualitative assessment of the lending environment, including underwriting standards. Management recognizes the sensitivity of various assumptions made in the quantitative modeling of expected losses and may adjust reserves depending upon the level of uncertainty that currently exists in one or more assumptions.
Credit losses for loans that no longer share risk characteristics with the loan pools are estimated on an individual basis. Individual credit loss estimates are typically performed for nonaccrual loans and are based on one of several methods, including the estimated fair value of the underlying collateral, observable market value of similar debt or the present value of expected cash flows. The Corporation considers certain loans to be collateral-dependent if the borrower is experiencing financial difficulty and management expects repayment for the loan to be substantially through the operation or sale of the collateral. For collateral-dependent loans, loss estimates are based on the fair value of collateral, less estimated cost to sell (if applicable). Collateral values supporting individually evaluated loans are assessed quarterly and appraisals are typically obtained at least annually.
The total allowance for loan losses is sufficient to absorb expected credit losses over the contractual life of the portfolio. Unanticipated events impacting the economy, including political instability or global events affecting the U.S. economy, could cause changes to expectations for current conditions and economic forecasts that result in an unanticipated increase in the allowance. Significant increases in current portfolio exposures or changes in credit characteristics could also increase the amount of the allowance. Such events, or others of similar nature, may result in the need for additional provision for credit losses in order to maintain an allowance that complies with credit risk and accounting policies.
Loans deemed uncollectible are charged off and deducted from the allowance. Recoveries on loans previously charged off are added to the allowance.
Credit losses are not estimated for accrued interest receivable as interest that is deemed uncollectible is written off through interest income.
Allowance for Credit Losses on Lending-Related Commitments
The allowance for credit losses on lending-related commitments estimates current expected credit losses on collective pools of letters of credit and unused commitments to extend credit based on reserve factors, determined in a manner similar to business loans, multiplied by a probability of draw estimate, based on historical experience and credit risk, applied to commitment amounts. The allowance for credit losses on lending-related commitments is included in accrued expenses and other liabilities on the Consolidated Balance Sheets, with the corresponding charge included in the provision for credit losses on the Consolidated Statements of Comprehensive Income.
Nonperforming Assets
Nonperforming assets consist of nonaccrual loans, reduced-rate loans and foreclosed property.
A loan is considered past due when the contractually required principal or interest payment is not received by the specified due date or, for certain loans, when a scheduled monthly payment is past due and unpaid for 30 days or more. Business loans are generally placed on nonaccrual status when management determines full collection of principal or interest is unlikely or when principal or interest payments are 90 days past due, unless the loan is fully collateralized and in the process of collection. The past-due status of a business loan is one of many indicative factors considered in determining the collectibility
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of the credit. The primary driver of when the principal amount of a business loan should be fully or partially charged-off is based on a qualitative assessment of the recoverability of the principal amount from collateral and other cash flow sources. Residential mortgage and home equity loans are generally placed on nonaccrual status once they become 90 days past due and are charged off to current appraised values less costs to sell no later than 180 days past due. In addition, junior lien home equity loans less than 90 days past due are placed on nonaccrual status if they have underlying risk characteristics that place full collection of the loan in doubt, such as when the related senior lien position is identified as seriously delinquent. Residential mortgage and consumer loans in bankruptcy for which the court has discharged the borrower's obligation and the borrower has not reaffirmed the debt are placed on nonaccrual status and written down to estimated collateral value, without regard to the actual payment status of the loan, and are classified as TDRs.loan. All other consumer loans are generally placed on nonaccrual status at 90 days past due and are charged off at no later than 120 days past due, or earlier if deemed uncollectible. Loans with payment deferrals granted due to COVID-19 are not considered past due or nonaccrual.
At the time a loan is placed on nonaccrual status, interest previously accrued but not collected is charged against current income. Principal and interest payments received on such loans are generally first applied as a reduction of principal. Income on nonaccrual loans is then recognized only to the extent that cash is received after principal has been fully repaid or future collection of principal is probable. Generally, a loan may be returned to accrual status when all delinquent principal and interest have been received and the Corporation expects repayment of the remaining contractual principal and interest, or when the loan or debt security is both well secured and in the process of collection.
Foreclosed property (primarily real estate) is initially recorded at fair value, less costs to sell, at the date of legal title transfer to the Corporation and subsequently carried at the lower of cost or fair value, less estimated costs to sell. Loans are reclassified to foreclosed property upon obtaining legal title to the collateral. Independent appraisals are obtained to substantiate the fair value of foreclosed property at the time of foreclosure and updated at least annually or upon evidence of deterioration in the property’s value. At the time of foreclosure, the adjustment for the difference between the related loan balance and fair value (less estimated costs to sell) of the property acquired is charged or credited to the allowance for loan losses. Subsequent write-downs, operating expenses and losses upon sale, if any, are charged to noninterest expenses. Foreclosed property is included in accrued income and other assets on the Consolidated Balance Sheets.
Premises and Equipment
Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation, computed using the straight-line method, is charged to occupancy expenses in the Consolidated Statements of Income over the estimated useful lives of the assets. Estimated useful lives are generally 3 years to 33 years for premises that the Corporation owns and 3 years to 8 years for furniture and equipment. Leasehold improvements are generally amortized over the terms of their respective leases or 10 years, whichever is shorter.
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Operating Leases
Operating leases with a term greater than one year are recognized as lease liabilities, measured as the present value of unpaid lease payments for operating leases where the Corporation is the lessee, and corresponding right-of-use (ROU) assets for the right to use the leased properties. Operating lease liabilities, recorded in accrued expenses and other liabilities, reflect the Corporation’s obligation to make future lease payments, primarily for real estate locations. Lease terms typically comprise contractual terms but may include extension options reasonably certain of being exercised at lease inception for certain strategic locations such as regional headquarters. Payments are discounted using the Corporation's incremental borrowing rate, or the rate it would pay to borrow amounts equal to the lease payments over the lease term. The Corporation does not separate lease and non-lease components for contracts in which it is the lessee. ROU assets, recorded in accrued income and other assets, are measured based on lease liabilities adjusted for incentives as well as accrued and prepaid rent. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Common area maintenance and other executory costs are the main components of variable lease payments. Operating and variable lease expenses are recorded in net occupancy expense on the Consolidated Statements of Income.
Software
Capitalized software, stated at cost less accumulated amortization, includes purchased software, capitalizable application development costs associated with internally developed software and cloud computing arrangements, including capitalizable implementation costs associated with hosting arrangements that are service contracts. Cloud computing arrangements include software as a service (SaaS), platform as a service (PaaS), infrastructure as a service (IaaS) and other similar hosting arrangements. The Corporation primarily utilizes SaaS and IaaS arrangements. Capitalized implementation costs of hosting arrangements that are service contracts were $61 million and $43 million, net of accumulated depreciation of $14 million and $5 million at December 31, 2023 and December 31, 2022, respectively. Depreciation expense related to these costs was $9 million and $4 million for the years ended December 31, 2023 and 2022, respectively.
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Capitalized software is included in accrued income and other assets on the Consolidated Balance Sheets. Amortization expense, generally computed on the straight-line method, is charged to software expense in the Consolidated Statements of Income over the estimated useful life of the software, generally five years, or the term of the hosting arrangement for implementation costs related to service contracts.
Cloud computing arrangements include software as a service (SaaS), platform as a service (PaaS), infrastructure as a service (IaaS) and other similar hosting arrangements. The Corporation primarily utilizes SaaS and IaaS arrangements.
Capitalized implementation costs of hosting arrangements that are service contracts were $2 million at December 31, 2020.
Effective January 1, 2020, the Corporation adopted the provisions of ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract," using a prospective approach for implementation costs incurred subsequent to the adoption of the standard. For the year ended December 31, 2020, software expense included $33 million of hosting fees that would have previously been included in outside processing fee expense.
Goodwill and Core Deposit Intangibles
Goodwill, included in accrued income and other assets on the Consolidated Balance Sheets, is initially recorded as the excess of the purchase price over the fair value of net assets acquired in a business combination and is subsequently evaluated at least annually for impairment. Goodwill impairment testing is performed at the reporting unit level, equivalent to a business segment or one level below. The Corporation has 3three reporting units: the Commercial Bank, the Retail Bank and Wealth Management.
The Corporation performs its annual evaluation of goodwill impairment in the third quarter of each year and may elect to perform a quantitative impairment analysis or first conduct a qualitative analysis to determine if a quantitative analysis is necessary. Additionally, the Corporation evaluates goodwill impairment on an interim basis if events or changes in circumstances between annual tests indicate additional testing may be warranted to determine if goodwill might be impaired. Factors considered in the assessment of the likelihood of impairment include macroeconomic conditions, industry and market considerations, stock performance of the Corporation and its peers, financial performance of the reporting units, and previous results of goodwill impairment tests, amongst other factors. Based on the results of the qualitative analysis, the Corporation determines whether a quantitative test is deemed necessary. The quantitative test compares the estimated fair value of identified reporting units with their carrying amount, including goodwill. If the estimated fair value of the reporting unit is less than the carrying value, an impairment charge would be recorded for the excess, not to exceed the amount of goodwill allocated to the reporting unit.
Core deposit intangiblesIntangibles are amortized on an accelerated basis, based on the estimated period the economic benefits are expected to be received. Core deposit intangiblesIntangibles are reviewed for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. Impairment for a finite-lived intangible asset exists if the sum of the undiscounted cash flows expected to result from the use of the asset exceeds its carrying value.
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Additional information regarding goodwill and core deposit intangibles can be found in Note 7.
Nonmarketable Equity Securities
The Corporation has certain investments that are not readily marketable. These investments include a portfolio of investments in indirect private equity and venture capital funds and restricted equity investments, which are securities the Corporation is required to hold for various reasons, primarily Federal Home Loan Bank of Dallas (FHLB) and Federal Reserve Bank (FRB) stock. These investments are accounted for on the cost or equity method and are included in accrued income and other assets on the Consolidated Balance Sheets. The investments are individually reviewed for impairment on a quarterly basis. Indirect private equity and venture capital funds are evaluated for impairment by comparing the carrying value to the estimated fair value. Impairment is charged to current earnings and the carrying value of the investment is written down accordingly. FHLB and FRB stock are recorded at cost (par value) and evaluated for impairment based on the ultimate recoverability of the par value. If the Corporation does not expect to recover the full par value, the amount by which the par value exceeds the ultimately recoverable value would be charged to current earnings and the carrying value of the investment would be written down accordingly.
Derivative Instruments and Hedging Activities
Derivative instruments are carried at fair value in either accrued income and other assets or accrued expenses and other liabilities on the Consolidated Balance Sheets. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument is determined by whether it has been designated and qualifies as part of a hedging relationship and, further, by the type of hedging relationship. The Corporation presents derivative instruments at fair value on the Consolidated Balance Sheets on a net basis when a right of offset exists, based on transactions with a single counterparty and any cash collateral paid to and/or received from that counterparty for derivative contracts that are subject to legally enforceable master netting arrangements.
For derivative instruments designated and qualifying as fair value hedges (i.e., hedging the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk), the gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in the same consolidated statement of income line that is used to present the earnings effect of the hedged item during the period of the change in fair values. For derivative instruments that are designated and qualify as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the gain or loss on the derivative
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instrument is reported as a component of other comprehensive income and reclassified into earnings in the same consolidated statement of income line item as the earnings effect of the hedged item in the same period or periods during which the hedged transaction affects earnings. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earningsrisk management hedging (loss) income on the Consolidated Statements of Income during the period of change. The net change in derivatives is included in "other, net" operating activity within the Consolidated Statements of Cash Flows.
To qualify for the use of hedge accounting, a derivative must be effective at inception and expected to be continuously effective in offsetting the risk being hedged. For derivatives designated as hedging instruments at inception, the Corporation uses either the short-cut method or applies statistical regression analysis to assess effectiveness. The short-cut method is used for $2.1$1.7 billion of notional of fair value hedges of medium- and long-term debt. This method allows for the assumption of perfect effectiveness and eliminates the requirement to further assess hedge effectiveness on these transactions. For hedge relationships to which the Corporation does not apply the short-cut method, statistical regression analysis is used at inception to assess whether the derivative used is expected to be highly effective in offsetting changes in the fair value or cash flows of the hedged item. A statistical regression or qualitative analysis is performed at each reporting period thereafter to evaluate hedge effectiveness.
The Corporation adopted Topic 848: Reference Rate Reform for derivative instruments designated and qualifying as fair value or cash flow hedges, effective January 1, 2020. As part of the adoption of Topic 848, certain hedge accounting requirements for qualifying modifications to derivative instruments due to reference rate reform are temporarily suspended.LIBOR transition were suspended through the completion of LIBOR transition in third quarter 2023. For further information on Topic 848, refer to the "Loans" policy in this Note.
Further information on the Corporation’s derivative instruments and hedging activities is included in Note 8.
Short-Term Borrowings
Securities sold under agreements to repurchase are treated as collateralized borrowings and are recorded at amounts equal to the cash received. The contractual terms of the agreements to repurchase may require the Corporation to provide additional collateral if the fair value of the securities underlying the borrowings declines during the term of the agreement.
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Financial Guarantees
Certain guarantee contracts or indemnification agreements that contingently require the Corporation, as guarantor, to make payments to the guaranteed party are initially measured at fair value and included in accrued expenses and other liabilities on the Consolidated Balance Sheets. The subsequent accounting for the liability depends on the nature of the underlying guarantee. The release from risk is accounted for under a particular guarantee when the guarantee expires or is settled, or by a systematic and rational amortization method.
Further information on the Corporation’s obligations under guarantees is included in Note 8.
Share-Based Compensation
The Corporation recognizes share-based compensation expense using the straight-line method over the requisite service period, generally based on the instruments' grant-date fair value, for all stock awards, including those with graded vesting. The requisite service period is the period an employee is required to provide service in order to vest in the award, which cannot extend beyond the date at which the employee is no longer required to perform any service to receive the share-based compensation (i.e., the retirement-eligible date). Forfeiture of stock awards and dividend equivalents are accounted for as they occur.
Certain awards are contingent upon performance and/or market conditions, which affect the number of shares ultimately issued. The Corporation periodically evaluates the probable outcome of the performance conditions and makes cumulative adjustments to compensation expense as appropriate. Market conditions are included in the determination of the fair value of the award on the date of grant. Subsequent to the grant date, market conditions have no impact on the amount of compensation expense the Corporation will recognize over the life of the award.
Further information on the Corporation’s share-based compensation plans is included in Note 16.
Revenue Recognition
Revenue from contracts with customers comprises the noninterest income earned by the Corporation in exchange for services provided to customers and is recognized when services are completed or as they are rendered, although contracts are generally short-term by nature. Services provided over a period of time are typically transferred to customers evenly over the term of the contracts and revenue is recognized accordingly over the period services are provided. Contract receivables are included in accrued income and other assets on the Consolidated Balance Sheets. Payment terms vary by services offered, and the time between completion of performance obligations and payment is typically not significant.
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Card Fees
Card fees comprise interchange and other fee income earned on government card, commercial card, debit/automated teller machine card and merchant payment processing programs. Card fees are presented net of network costs, as performance obligations for card services are limited to transaction processing and settlement with the card network on behalf of the customers. Fees for these services are primarily based on interchange rates set by the network and transaction volume. The Corporation also provides ongoing card program support services, for which fees are based on contractually agreed-upon prices and customer demand for services.
Service Charges on Deposit Accounts
Service charges on deposit accounts comprise charges on retail and business accounts, including fees for treasury management services. Treasury management services include transaction-based services related to payment processing, overdrafts, non-sufficient funds and other deposit account activity, as well as account management services that are provided over time. Business customers can earn credits depending on deposit balances maintained with the Corporation, which may be used to offset fees. Fees and credits are based on predetermined, agreed-upon rates.
Fiduciary Income
Fiduciary income includes fees and commissions from asset management, custody, recordkeeping, investment advisory and other services provided primarily to personal and institutional trust customers. Revenue is recognized as the services are performed and is based either on the market value of the assets managed or the services provided, as well as agreed-upon rates.
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Commercial Lending Fees
Commercial lending fees include both revenue from contracts with customers (primarily loan servicing fees) and other sources of revenue. Commercial loan servicing fees are based on contractually agreed-upon prices and when thetiming of services are provided. Other sources of revenue in commercial lending fees primarily include fees assessed on the unused portion of commercial lines of credit (unused commitment fees) and syndication arrangements..
Brokerage Fees    
Brokerage fees areinclude commissions earned for facilitating securities transactions for customers, as well as other brokerage services provided. Revenue is recognized when services are completed and is based on the type of services provided and agreed-upon rates. The Corporation pays commissions based on brokerage fee revenue. These are typically recognized when incurred because the amortization period is one year or less and are included in salaries and benefits expense on the Consolidated Statements of Income.Income As of November 2023, brokerage fees include income from sales of select investment products of an independent financial services broker, net of commissions passed through to employees licensed by the independent broker to sell their products.
Other Revenues    
Other revenues, consisting primarily of other retail fees, investment banking fees and insurance commissions, are typically recognized when services or transactions are completed and are based on the type of services provided and agreed-upon rates.
Except as discussed above, commissions and other incentives paid to employees are generally based on several internal and external metrics and, as a result, are not solely dependent on revenue generating activities.
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Defined Benefit Pension and Other Postretirement Costs
Defined benefit pension costs are funded consistent with the requirements of federal laws and regulations. Inherent in the determination of defined benefit pension costs are assumptions concerning future events that will affect the amount and timing of required benefit payments under the plans. These assumptions include demographic assumptions such as retirement age and mortality, a compensation rate increase, a discount rate used to determine the current benefit obligation, form of payment election and a long-term expected rate of return on plan assets. Net periodic defined benefit pension expense includes service cost, interest cost based on the assumed discount rate, an expected return on plan assets based on an actuarially derived market-related value of assets (MRVA), amortization of prior service cost or credit and amortization of net actuarial gains or losses. The market-relatedMRVA for fixed income securities and private placement assets is based on the fair value of plan assets, whereas the MRVA for other plan assets is determined by amortizing the current year’s investment gains and losses (the actual investment return net of the expected investment return) over 5 years. The amortization adjustment cannot exceed 10 percent of the fair value of assets. Prior service costs or credits include the impact of plan amendments on the liabilities and are amortized over the future service periods of active employees expected to receive benefits under the plan. Actuarial gains and losses result from experience different from that assumed and from changes in assumptions (excluding asset gains and losses not yet reflected in market-related value). Amortization of actuarial gains and losses is included as a component of net periodic defined benefit pension cost for a year if the actuarial net gain or loss exceeds 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets. If amortization is required, the excess is amortized over the average remaining service period of participating employees expected to receive benefits under the plan. Service costs are included in salaries and benefits expense, while the other components of net periodic defined benefit pension expense are included in other noninterest expenses on the Consolidated Statements of Income.
Postretirement benefit costs includes service cost, interest cost based on the assumed discount rate, an expected return on plan assets based on an actuarially derived MRVA, amortization of prior service cost or credit and amortization of net actuarial gains or losses. The components of postretirement benefit costs follow similar policies and methodologies as defined benefit pensions costs. Postretirement benefits are recognized in other noninterest expenses on the Consolidated Statements of Income during the average remaining service period of participating employees expected to receive benefits under the plan or the average remaining future lifetime of retired participants currently receiving benefits under the plan.Income.
See Note 17 for further information regarding the Corporation’s defined benefit pension and other postretirement plans.
Income Taxes
The provision for income taxes is the sum of income taxes due for the current year and deferred taxes. The Corporation classifies interest and penalties on income tax liabilities and excess tax benefits and deficiencies resulting from employee stock awards in the provision for income taxes on the Consolidated Statements of Income.
Deferred taxes arise from temporary differences between the income tax basis and financial accounting basis of assets and liabilities. Deferred tax assets are evaluated for realization based on available evidence of projected future reversals of existing taxable temporary differences, foreign tax credit limitations, assumptions made regarding future events and, when applicable, state loss carryback
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capacity. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized.
Earnings Per Share
Basic net income per common share is calculated using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each share of common stock and participating securities according to dividends declared (distributed earnings) and participation rights in undistributed earnings. Distributed and undistributed earnings are allocated between common and participating security shareholders based on their respective rights to receive dividends. Nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities (e.g., nonvested restricted stock and certain service-based restricted stock units). Undistributed net losses are not allocated to nonvested restricted shareholders, as these shareholders do not have a contractual obligation to fund the losses incurred by the Corporation. Net income attributable to common shares is then divided by the weighted-average number of common shares outstanding during the period.
Diluted net income per common share is calculated using the more dilutive of either the treasury method or the two-class method. The dilutive calculation considers common stock issuable under the assumed exercise of stock options and warrants, as well as service- and performance-based restricted stock units granted under the Corporation’s stock plans using the treasury stock method, if dilutive. Net income attributable to common shares is then divided by the total of weighted-average number of common shares and common stock equivalents outstanding during the period.
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Statements of Cash Flows
Cash and cash equivalents are defined as those amounts included in cash and due from banks and interest-bearing deposits with banks on the Consolidated Balance Sheets.
Comprehensive Income (Loss)
The Corporation presents on an annual basis the components of net income and other comprehensive income in two separate, but consecutive statements and presents on an interim basis the components of net income and a total for comprehensive income in one continuous consolidated statement of comprehensive income.

Recently Issued Accounting Pronouncements
In March 2023, the FASB issued ASU No. 2023-02 "Investments-Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)" (ASU 2023-02). ASU 2023-02 expands the permitted use of the proportional amortization method, which is currently only available to low-income housing tax credit investments, to other tax equity investments if certain conditions are met. Under the proportional amortization method, the initial cost of an investment is amortized in proportion to the income tax benefits received and both the amortization of the investment and the income tax benefits received are recognized as a component of income tax expense. The Corporation adopted this ASU on January 1, 2024 by applying the modified retrospective basis of transition or, for certain changes, a prospective basis. The update did not have a material impact on their financial statements.
In November 2023, the FASB issued ASU No. 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" (ASU 2023-07). The update requires enhanced disclosures about significant segment expenses, enhanced interim disclosure requirements, clarification for when multiple segment measures of profit or loss can be disclosed, and other requirements intended to improve overall reportable segment disclosures in annual and interim periods. ASU 2023-07 is effective for the Corporation in the annual period beginning on January 1, 2024 and interim periods beginning on January 1, 2025 with retrospective application to all prior periods presented. Early adoption is permitted. The Corporation is evaluating the impact of ASU 2023-07 on its reportable segment disclosures.
In December 2023, the FASB issued ASU No. 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" (ASU 2023-09). ASU 2023-09 requires additional annual disclosures including further disaggregation of information in the rate reconciliation, additional information for reconciling items meeting a quantitative threshold, further disaggregation of income taxes paid, and other required disclosures. ASU 2023-09 is effective for the Corporation in the annual period beginning on January 1, 2025 and applied on a prospective basis with both early adoption and retrospective application permitted. The Corporation is evaluating the impact of ASU 2023-09 on its income tax disclosures.

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NOTE 2 – FAIR VALUE MEASUREMENTS
Note 1 contains information about the fair value hierarchy, descriptions of the valuation methodologies and key inputs used to measure financial assets and liabilities recorded at fair value, as well as a description of the methods and significant assumptions used to estimate fair value disclosures for financial instruments not recorded at fair value in their entirety on a recurring basis.
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Assets and Liabilities Recorded at Fair Value on a Recurring Basis
The following tables present the recorded amount of assets and liabilities measured at fair value on a recurring basis as of December 31, 20202023 and 2019.2022.
(in millions)TotalLevel 1Level 2Level 3
December 31, 2020
Deferred compensation plan assets$107 $107 $0 $0 
Equity securities60 60 0 0 
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities4,658 4,658 0 0 
Residential mortgage-backed securities (a)10,370 0 10,370 0 
Total investment securities available-for-sale15,028 4,658 10,370 0 
Derivative assets:
Interest rate contracts531 0 492 39 
Energy derivative contracts151 0 151 0 
Foreign exchange contracts18 0 18 0 
Total derivative assets700 0 661 39 
Total assets at fair value$15,895 $4,825 $11,031 $39 
Derivative liabilities:
Interest rate contracts$61 $0 $61 $0 
Energy derivative contracts149 0 149 0 
Foreign exchange contracts19 0 19 0 
Total derivative liabilities229 0 229 0 
Deferred compensation plan liabilities107 107 0 0 
Total liabilities at fair value$336 $107 $229 $0 
(a)Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
(Table continues on following page)
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(in millions)(in millions)TotalLevel 1Level 2Level 3
December 31, 2019
(in millions)
(in millions)
December 31, 2023
December 31, 2023
December 31, 2023
Deferred compensation plan assetsDeferred compensation plan assets$95 $95 $0 $0 
Equity and other non-debt securities54 54 0 0 
Deferred compensation plan assets
Deferred compensation plan assets
Equity securities
Equity securities
Equity securities
Investment securities available-for-sale:
Investment securities available-for-sale:
Investment securities available-for-sale:
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securities
Residential mortgage-backed securities (a)
Residential mortgage-backed securities (a)
Residential mortgage-backed securities (a)
Commercial mortgage-backed securities (a)
Commercial mortgage-backed securities (a)
Commercial mortgage-backed securities (a)
Total investment securities available-for-sale
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities2,792 2,792 0 0 
Residential mortgage-backed securities (a)9,606 0 9,606 0 
Total investment securities available-for-sale
Total investment securities available-for-saleTotal investment securities available-for-sale12,398 2,792 9,606 0 
Derivative assets:Derivative assets:
Derivative assets:
Derivative assets:
Interest rate contractsInterest rate contracts211 0 189 22 
Energy derivative contracts96 0 96 0 
Interest rate contracts
Interest rate contracts
Energy contracts
Energy contracts
Energy contracts
Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts
Total derivative assets
Total derivative assets
Total derivative assets
Total assets at fair value
Total assets at fair value
Total assets at fair value
Derivative liabilities:
Derivative liabilities:
Derivative liabilities:
Interest rate contracts
Interest rate contracts
Interest rate contracts
Energy contracts
Energy contracts
Energy contracts
Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts
Other financial derivative liabilities
Other financial derivative liabilities
Other financial derivative liabilities
Total derivative liabilities
Total derivative liabilities
Total derivative liabilities
Deferred compensation plan liabilities
Deferred compensation plan liabilities
Deferred compensation plan liabilities
Total liabilities at fair value
Total liabilities at fair value
Total liabilities at fair value
December 31, 2022
December 31, 2022
December 31, 2022
Deferred compensation plan assets
Deferred compensation plan assets
Deferred compensation plan assets
Equity securities
Equity securities
Equity securities
Investment securities available-for-sale:
Investment securities available-for-sale:
Investment securities available-for-sale:
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securities
Residential mortgage-backed securities (a)
Residential mortgage-backed securities (a)
Residential mortgage-backed securities (a)
Commercial mortgage-backed securities (a)
Commercial mortgage-backed securities (a)
Commercial mortgage-backed securities (a)
Total investment securities available-for-sale
Total investment securities available-for-sale
Total investment securities available-for-sale
Derivative assets:
Derivative assets:
Derivative assets:
Interest rate contracts
Interest rate contracts
Interest rate contracts
Energy contracts
Energy contracts
Energy contracts
Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contractsForeign exchange contracts10 0 10 0 
Total derivative assetsTotal derivative assets317 0 295 22 
Total derivative assets
Total derivative assets
Total assets at fair value
Total assets at fair value
Total assets at fair valueTotal assets at fair value$12,864 $2,941 $9,901 $22 
Derivative liabilities:Derivative liabilities:
Derivative liabilities:
Derivative liabilities:
Interest rate contractsInterest rate contracts$39 $0 $39 $0 
Energy derivative contracts92 0 92 0 
Interest rate contracts
Interest rate contracts
Energy contracts
Energy contracts
Energy contracts
Foreign exchange contractsForeign exchange contracts10 0 10 0 
Foreign exchange contracts
Foreign exchange contracts
Other financial derivative liabilities
Other financial derivative liabilities
Other financial derivative liabilities
Total derivative liabilities
Total derivative liabilities
Total derivative liabilitiesTotal derivative liabilities141 0 141 0 
Deferred compensation plan liabilitiesDeferred compensation plan liabilities95 95 0 0 
Deferred compensation plan liabilities
Deferred compensation plan liabilities
Total liabilities at fair valueTotal liabilities at fair value$236 $95 $141 $0 
Total liabilities at fair value
Total liabilities at fair value
(a)Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
There were 0no transfers of assets or liabilities recorded at fair value on a recurring basis into or out of Level 3 fair value measurements during the yearyears ended December 31, 20202023 and 2019.2022.
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The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the yearyears ended December 31, 20202023 and 2019.2022.
Net Realized/Unrealized Gains (Pretax) Recorded in Earnings (a)
Balance at Beginning of PeriodSalesBalance at End of Period
Net Realized/Unrealized Gains (Pretax) Recorded in Earnings (a)
Net Realized/Unrealized Gains (Pretax) Recorded in Earnings (a)
Net Realized/Unrealized Gains (Pretax) Recorded in Earnings (a)
Balance at Beginning of Period
Balance at Beginning of Period
Balance at Beginning of PeriodSettlementsBalance at End of Period
(in millions)(in millions)Balance at Beginning of PeriodRealizedUnrealizedSalesBalance at End of Period
Year Ended December 31, 2020
Year Ended December 31, 2023
Year Ended December 31, 2023
Year Ended December 31, 2023
Derivative liabilities:
Derivative liabilities:
Derivative liabilities:
Other financial derivative
Other financial derivative
Other financial derivative
Year Ended December 31, 2022
Year Ended December 31, 2022
Year Ended December 31, 2022
Derivative assets:
Derivative assets:
Derivative assets:Derivative assets:
Interest rate contractsInterest rate contracts$22 $0 $17 $0 $39 
Interest rate contracts
Interest rate contracts
Derivative liabilities:
Other financial derivative
Other financial derivative
Other financial derivative
Year Ended December 31, 2019
Derivative assets:
Interest rate contracts$9 $1 $13 $(1)$22 
(a)Realized and unrealized gains and losses due to changes in fair value recorded in other noninterest income on the Consolidated Statements of Income.
Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis
The Corporation may be required to record certain assets and liabilities at fair value on a nonrecurring basis. These include assets that are recorded at the lower of cost or fair value, and were recognized at fair value since it was less than cost at the end of the period.
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The following table presents assets recorded at fair value on a nonrecurring basis at December 31, 20202023 and 2019. NaN2022. No liabilities were recorded at fair value on a nonrecurring basis at December 31, 20202023 and 2019.2022.
(in millions)Level 3
December 31, 20202023
Loans:
Commercial$13412 
Commercial mortgage16 
International16
Total loans44
Loans held-for-sale231
Other real estate5
Total assets at fair value$150280 
December 31, 20192022
Loans:
Commercial$7053 
Real estate construction2 
Commercial mortgage11 
Total loans66 
Other real estate9 
Total assets at fair value$7075 
Level 3 assets recorded at fair value on a nonrecurring basis at December 31, 20202023 and 2019December 31, 2022 included both nonaccrual loans and TDRs for whichwith a specific allowance was establishedand certain bank property held for sale, both measured based on the fair value of collateral. The unobservable inputs were the additional adjustments applied by management to the appraised values to reflect such factors as non-current appraisals and revisions to estimated time to sell. These adjustments are determined based on qualitative judgments made by management on a case-by-case basis and are not quantifiableobservable inputs, although they are used in the determination of fair value. At December 31, 2023, loans held-for-sale classified as Level 3 represented loans held-for-sale in less liquid markets requiring significant management assumptions when determining fair value.
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Estimated Fair Values of Financial Instruments Not Recorded at Fair Value on a Recurring Basis
The Corporation typically holds the majority of its financial instruments until maturity and thus does not expect to realize many of the estimated fair value amounts disclosed. The disclosures also do not include estimated fair value amounts for items that are not defined as financial instruments, but which have significant value. These include such items as core deposit intangibles, the future earnings potential of significant customer relationships and the value of trust operations and other fee generating businesses. The Corporation believes the imprecision of an estimate could be significant.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporatednonmarketable equity securities (primarily indirect private equity and Subsidiaries

venture capital investments) that do not have a readily determinable fair value and whose fair values are based on net asset value.
The carrying amount and estimated fair value of financial instruments not recorded at fair value in their entirety on a recurring basis on the Corporation’s Consolidated Balance Sheets are as follows:
 Carrying
Amount		Estimated Fair Value
(in millions)TotalLevel 1Level 2Level 3
December 31, 2020
Assets
Cash and due from banks$1,031 $1,031 $1,031 $0 $0 
Interest-bearing deposits with banks14,736 14,736 14,736 0 0 
Loans held-for-sale5 5 0 5 0 
Total loans, net of allowance for loan losses (a)51,343 50,601 0 0 50,601 
Customers’ liability on acceptances outstanding1 1 1 0 0 
Restricted equity investments207 207 207 0 0 
Nonmarketable equity securities (b)5 9 
Liabilities
Demand deposits (noninterest-bearing)39,420 39,420 0 39,420 0 
Interest-bearing deposits31,316 31,316 0 31,316 0 
Customer certificates of deposit2,133 2,133 0 2,133 0 
Total deposits72,869 72,869 0 72,869 0 
Acceptances outstanding1 1 1 0 0 
Medium- and long-term debt5,728 5,790 0 5,790 0 
Credit-related financial instruments(68)(68)0 0 (68)
December 31, 2019
Assets
Cash and due from banks$973 $973 $973 $0 $0 
Interest-bearing deposits with banks4,845 4,845 4,845 0 0 
Loans held-for-sale6 6 0 6 0 
Total loans, net of allowance for loan losses (a)49,732 49,975 0 0 49,975 
Customers’ liability on acceptances outstanding2 2 2 0 0 
Restricted equity investments248 248 248 0 0 
Nonmarketable equity securities (b)5 10 
Liabilities
Demand deposits (noninterest-bearing)27,382 27,382 0 27,382 0 
Interest-bearing deposits26,802 26,802 0 26,802 0 
Customer certificates of deposit2,978 2,968 0 2,968 0 
Other time deposits133 133 0 133 0 
Total deposits57,295 57,285 0 57,285 0 
Short-term borrowings71 71 71 0 0 
Acceptances outstanding2 2 2 0 0 
Medium- and long-term debt7,269 7,316 0 7,316 0 
Credit-related financial instruments(57)(57)0 0 (57)
 Carrying
Amount		Estimated Fair Value
(in millions)TotalLevel 1Level 2Level 3
December 31, 2023
Assets
Cash and due from banks$1,443 $1,443 $1,443 $— $— 
Interest-bearing deposits with banks8,059 8,059 8,059 — — 
Other short-term investments24 24 24 — — 
Total loans, net of allowance for loan losses (a)51,425 50,633 — — 50,633 
Liabilities
Demand deposits58,476 58,476 — 58,476 — 
Time deposits8,286 8,391 — 8,391 — 
Total deposits66,762 66,867 — 66,867 — 
Short-term borrowings3,565 3,565 3,565 — — 
Medium- and long-term debt6,206 6,207 — 6,207 — 
Liabilities for credit-related financial instruments(72)(72)— — (72)
December 31, 2022
Assets
Cash and due from banks$1,758 $1,758 $1,758 $— $— 
Interest-bearing deposits with banks4,524 4,524 4,524 — — 
Other short-term investments19 19 19 — — 
Total loans, net of allowance for loan losses (a)52,792 50,964 — — 50,964 
Liabilities
Demand deposits69,460 69,460 — 69,460 — 
Time deposits1,937 1,894 — 1,894 — 
Total deposits71,397 71,354 — 71,354 — 
Short-term borrowings3,211 3,211 3,211 — — 
Medium- and long-term debt3,024 3,071 — 3,071 — 
Liabilities for credit-related financial instruments(79)(79)— — (79)
(a)Included $150$44 million and $70$66 million of loans recorded at fair value on a nonrecurring basis at December 31, 20202023 and 2019,2022, respectively.
(b)Certain investments that are measured at fair value using the net asset value have not been classified in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheets.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

NOTE 3 - INVESTMENT SECURITIES
A summary of the Corporation’s investment securities follows:
(in millions)(in millions)Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value(in millions)Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
December 31, 2020
December 31, 2023
Investment securities available-for-sale:Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities$4,583 $76 $1 $4,658 
Investment securities available-for-sale:
Investment securities available-for-sale:
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securities
Residential mortgage-backed securities (a)Residential mortgage-backed securities (a)10,169 203 2 10,370 
Commercial mortgage-backed securities (a)
Total investment securities available-for-saleTotal investment securities available-for-sale$14,752 $279 $3 $15,028 
December 31, 2019
December 31, 2022
Investment securities available-for-sale:Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities$2,745 $47 $0 $2,792 
Investment securities available-for-sale:
Investment securities available-for-sale:
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securities
Residential mortgage-backed securities (a)Residential mortgage-backed securities (a)9,568 66 28 9,606 
Commercial mortgage-backed securities (a)
Total investment securities available-for-saleTotal investment securities available-for-sale$12,313 $113 $28 $12,398 
(a)Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
A summary of the Corporation’s investment securities in an unrealized loss position as of December 31, 20202023 and 20192022 follows:
Temporarily Impaired Less than 12 Months12 Months or moreTotal
Less than 12 Months12 Months or moreTotal
(in millions)Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
December 31, 2020
U.S. Treasury and other U.S. government agency securities$1,119 $1 $0 $0 $1,119 $1 
(in millions, except securities count)(in millions, except securities count)Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Count
December 31, 2023
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securities
Residential mortgage-backed securities (a)Residential mortgage-backed securities (a)952 2 0 0 952 2 
Commercial mortgage-backed securities (a)
Total temporarily impaired securitiesTotal temporarily impaired securities$2,071 $3 $0 $0 $2,071 $3 
December 31, 2019
December 31, 2022
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securities
Residential mortgage-backed securities (a)Residential mortgage-backed securities (a)$1,494 $7 $1,906 $21 $3,400 $28 
Commercial mortgage-backed securities (a)
Total temporarily impaired securitiesTotal temporarily impaired securities$1,494 $7 $1,906 $21 $3,400 $28 
(a)Issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.
Unrealized losses on investment securities resulted from changes in market interest rates and liquidity.rates. The Corporation’s portfolio is comprised of securities issued or guaranteed by the U.S. government agencies or government-sponsored enterprises. As such, it is expected that the securities would not be settled at a price less than the amortized cost of the investments. Further, the Corporation does not intend to sell the investments, and it is not more-likely-than-not that it will be required to sell the the investments before recovery of amortized costs. At December 31, 2020, the Corporation had 32No allowance for credit losses was recorded on securities in an unrealized loss position with no allowance for credit losses, comprised of 11 U.S. Treasury securities and 21 residential mortgage-backed securities.at December 31, 2023 or December 31, 2022.
Interest receivable on investment securities totaled $18$40 million and $20$49 million at December 31, 20202023 and 20192022, respectively, and was included in accrued income and other assets on the Consolidated Balance Sheets.
Sales, calls and write-downs of investment securities available-for-sale, primarily from repositioning $1.0 billion and $1.3 billion of lower-yielding treasury securities in the years ended December 31, 2019 and 2018, respectively, resulted in the following gains and losses recorded in net securities losses on the Consolidated Statements of Income, computed based on the adjusted cost of the specific security.
(in millions)
Year Ended December 31202020192018
Securities gains$1 $1 $2 
Securities losses(1)(8)(21)
Net securities losses$0 $(7)$(19)
security, resulted in no gains or losses during the years ended December 31, 2023, 2022 and 2021.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

The following table summarizes the amortized cost and fair values of debtinvestment securities by contractual maturity. Securities with multiple maturity dates are classified in the period of final maturity. The actual cash flows of mortgage-backed securities may differ as borrowers of the underlying loans may exercise prepayment options. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
(in millions)
December 31, 2020Amortized CostFair Value
Contractual maturity
Within one year$1,547 $1,571 
After one year through five years3,235 3,297 
After five years through ten years697 716 
After ten years9,273 9,444 
Total investment securities$14,752 $15,028 
Included in the contractual maturity distribution in the table above were residential mortgage-backed securities with a total amortized cost of $10.2 billion and a fair value of $10.4 billion. The actual cash flows of mortgage-backed securities may differ as borrowers of the underlying loans may exercise prepayment options.
(in millions)
December 31, 2023Amortized CostFair Value
Contractual maturity
Within one year$813 $790 
After one year through five years1,098 1,034 
After five years through ten years5,380 4,869 
After ten years12,250 10,176 
Total investment securities$19,541 $16,869 
At December 31, 2020,2023, investment securities with a carrying value of $5.1$15.6 billion were pledged where permitted or required by law, including $4.4law. Pledges included $7.7 billion pledgedto the Federal Reserve Bank (FRB) for potential future borrowings, $6.6 billion to the Federal Home Loan Bank (FHLB) as collateral for current advances and potential future borrowings of approximately $4.2as well as $1.3 billion and $646 million to secure $488$702 million of liabilities, primarilyconsisting of trust deposits, deposits of public entities and other deposits of state and local government agencies andas well as derivative instruments. For information on FHLB borrowings, refer to NoteNotes 11 and 12.
























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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

NOTE 4 – CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES
The following table presents an aging analysis of the amortized cost basis of loans.
Loans Past Due and Still Accruing   
Loans Past Due and Still Accruing
Loans Past Due and Still Accruing
Loans Past Due and Still Accruing  
(in millions)(in millions)30-59
Days		60-89 
Days		90 Days
or More		TotalNonaccrual
Loans		Current
Loans (a)		Total 
Loans		(in millions)30-59
Days		60-89 
Days		90 Days
or More		TotalNonaccrual
Loans
Current
Loans
Total 
Loans
December 31, 2020
December 31, 2023
Business loans:
Business loans:
Business loans:Business loans:
CommercialCommercial$62 $115 $33 $210 $252 $32,291 $32,753 
Commercial
Commercial
Real estate construction:Real estate construction:
Commercial Real Estate business line (b)31 0 0 31 0 3,626 3,657 
Other business lines (c)9 0 0 9 1 415 425 
Commercial Real Estate business line (a)
Commercial Real Estate business line (a)
Commercial Real Estate business line (a)
Other business lines (b)
Total real estate constructionTotal real estate construction40 0 0 40 1 4,041 4,082 
Commercial mortgage:Commercial mortgage:
Commercial Real Estate business line (b)51 1 0 52 3 2,218 2,273 
Other business lines (c)48 40 5 93 26 7,520 7,639 
Commercial Real Estate business line (a)
Commercial Real Estate business line (a)
Commercial Real Estate business line (a)
Other business lines (b)
Total commercial mortgageTotal commercial mortgage99 41 5 145 29 9,738 9,912 
Lease financingLease financing14 0 1 15 1 578 594 
InternationalInternational0 0 0 0 0 926 926 
Total business loansTotal business loans215 156 39 410 283 47,574 48,267 
Retail loans:Retail loans:
Residential mortgageResidential mortgage11 4 0 15 47 1,768 1,830 
Residential mortgage
Residential mortgage
Consumer:Consumer:
Home equity
Home equity
Home equityHome equity7 1 0 8 17 1,563 1,588 
Other consumerOther consumer10 0 6 16 0 590 606 
Total consumerTotal consumer17 1 6 24 17 2,153 2,194 
Total retail loansTotal retail loans28 5 6 39 64 3,921 4,024 
Total loansTotal loans$243 $161 $45 $449 $347 $51,495 $52,291 
December 31, 2019
December 31, 2022
Business loans:
Business loans:
Business loans:Business loans:
CommercialCommercial$27 $7 $17 $51 $148 $31,274 $31,473 
Commercial
Commercial
Real estate construction:Real estate construction:
Commercial Real Estate business line (b)6 0 0 6 0 3,038 3,044 
Other business lines (c)0 7 0 7 0 404 411 
Commercial Real Estate business line (a)
Commercial Real Estate business line (a)
Commercial Real Estate business line (a)
Other business lines (b)
Total real estate constructionTotal real estate construction6 7 0 13 0 3,442 3,455 
Commercial mortgage:Commercial mortgage:
Commercial Real Estate business line (b)9 0 0 9 2 2,165 2,176 
Other business lines (c)16 18 9 43 12 7,328 7,383 
Commercial Real Estate business line (a)
Commercial Real Estate business line (a)
Commercial Real Estate business line (a)
Other business lines (b)
Total commercial mortgageTotal commercial mortgage25 18 9 52 14 9,493 9,559 
Lease financingLease financing1 0 0 1 0 587 588 
InternationalInternational0 5 0 5 0 1,004 1,009 
Total business loansTotal business loans59 37 26 122 162 45,800 46,084 
Retail loans:Retail loans:
Residential mortgageResidential mortgage15 2 0 17 20 1,808 1,845 
Residential mortgage
Residential mortgage
Consumer:Consumer:
Home equity
Home equity
Home equityHome equity4 5 0 9 17 1,685 1,711 
Other consumerOther consumer2 3 0 5 0 724 729 
Total consumerTotal consumer6 8 0 14 17 2,409 2,440 
Total retail loansTotal retail loans21 10 0 31 37 4,217 4,285 
Total loansTotal loans$80 $47 $26 $153 $199 $50,017 $50,369 
(a)Includes $141 million of loans with deferred payments not considered past due in accordance with the CARES Act, at December 31, 2020.
(b)Primarily loans to real estate developers.
(c)(b)Primarily loans secured by owner-occupied real estate.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

The following table presents loans by credit quality indicator (CQI) and vintage year. CQICredit quality indicator is based on internal risk ratings assigned to each business loan at the time of approval and subjected to subsequent reviews, generally at least annually, and to pools of retail loans with similar risk characteristics. Vintage year is the year of origination or major modification.
December 31, 2020December 31, 2019
Vintage Year
Vintage Year
Vintage Year
Vintage Year
(in millions)
(in millions)
(in millions)(in millions)20202019201820172016PriorRevolversRevolvers Converted to TermTotalTotal
Business loans:Business loans:
Business loans:
Business loans:
Commercial:Commercial:
Commercial:
Commercial:
Pass (a)
Pass (a)
Pass (a)Pass (a)$5,991 (b)$2,316 $1,563 $1,051 $429 $755 $18,416 $17 $30,538 $29,785 
Criticized (c)30 281 191 116 64 166 1,365 2 2,215 1,688 
Criticized (b)
Criticized (b)
Criticized (b)
Total commercialTotal commercial6,021 2,597 1,754 1,167 493 921 19,781 19 32,753 31,473 
Total commercial
Total commercial
Commercial gross charge-offs
Commercial gross charge-offs
Commercial gross charge-offs
Real estate constructionReal estate construction
Real estate construction
Real estate construction
Pass (a)
Pass (a)
Pass (a)Pass (a)433 1,080 1,244 631 335 141 171 0 4,035 3,424 
Criticized (c)3 28 5 8 0 1 2 0 47 31 
Criticized (b)
Criticized (b)
Criticized (b)
Total real estate constructionTotal real estate construction436 1,108 1,249 639 335 142 173 0 4,082 3,455 
Total real estate construction
Total real estate construction
Real estate construction gross charge-offs
Real estate construction gross charge-offs
Real estate construction gross charge-offs
Commercial mortgageCommercial mortgage
Commercial mortgage
Commercial mortgage
Pass (a)
Pass (a)
Pass (a)Pass (a)2,053 1,559 1,146 1,120 818 2,272 431 0 9,399 9,262 
Criticized (c)47 130 42 45 41 193 15 0 513 297 
Criticized (b)
Criticized (b)
Criticized (b)
Total commercial mortgageTotal commercial mortgage2,100 1,689 1,188 1,165 859 2,465 446 0 9,912 9,559 
Total commercial mortgage
Total commercial mortgage
Commercial mortgage gross charge-offs
Commercial mortgage gross charge-offs
Commercial mortgage gross charge-offs
Lease financingLease financing
Lease financing
Lease financing
Pass (a)
Pass (a)
Pass (a)Pass (a)109 122 71 50 14 201 0 0 567 579 
Criticized (c)2 17 5 2 1 0 0 0 27 9 
Criticized (b)
Criticized (b)
Criticized (b)
Total lease financingTotal lease financing111 139 76 52 15 201 0 0 594 588 
Total lease financing
Total lease financing
Lease financing gross charge-offs
Lease financing gross charge-offs
Lease financing gross charge-offs
InternationalInternational
International
International
Pass (a)
Pass (a)
Pass (a)Pass (a)274 161 103 11 3 64 245 0 861 972 
Criticized (c)13 8 18 4 7 2 13 0 65 37 
Criticized (b)
Criticized (b)
Criticized (b)
Total internationalTotal international287 169 121 15 10 66 258 0 926 1,009 
Total international
Total international
International gross charge-offs
International gross charge-offs
International gross charge-offs
Total business loans
Total business loans
Total business loansTotal business loans8,955 5,702 4,388 3,038 1,712 3,795 20,658 19 48,267 46,084 
Retail loans:Retail loans:
Retail loans:
Retail loans:
Residential mortgageResidential mortgage
Residential mortgage
Residential mortgage
Pass (a)
Pass (a)
Pass (a)Pass (a)639 230 119 197 196 398 0 0 1,779 1,823 
Criticized (c)7 2 2 6 2 32 0 0 51 22 
Criticized (b)
Criticized (b)
Criticized (b)
Total residential mortgageTotal residential mortgage646 232 121 203 198 430 0 0 1,830 1,845 
Total residential mortgage
Total residential mortgage
Residential mortgage gross charge-offs
Residential mortgage gross charge-offs
Residential mortgage gross charge-offs
Consumer:
Consumer:
Consumer:Consumer:
Home equityHome equity
Home equity
Home equity
Pass (a)
Pass (a)
Pass (a)Pass (a)0 0 0 0 0 15 1,489 63 1,567 1,682 
Criticized (c)0 0 0 0 0 1 13 7 21 29 
Criticized (b)
Criticized (b)
Criticized (b)
Total home equityTotal home equity0 0 0 0 0 16 1,502 70 1,588 1,711 
Total home equity
Total home equity
Home equity gross charge-offs
Home equity gross charge-offs
Home equity gross charge-offs
Other consumerOther consumer
Other consumer
Other consumer
Pass (a)
Pass (a)
Pass (a)Pass (a)113 23 12 2 3 41 404 0 598 722 
Criticized (c)0 0 2 0 0 0 6 0 8 7 
Criticized (b)
Criticized (b)
Criticized (b)
Total other consumerTotal other consumer113 23 14 2 3 41 410 0 606 729 
Total other consumer
Total other consumer
Other consumer gross charge-offs
Other consumer gross charge-offs
Other consumer gross charge-offs
Total consumer
Total consumer
Total consumerTotal consumer113 23 14 2 3 57 1,912 70 2,194 2,440 
Total retail loansTotal retail loans759 255 135 205 201 487 1,912 70 4,024 4,285 
Total retail loans
Total retail loans
Total loansTotal loans$9,714 $5,957 $4,523 $3,243 $1,913 $4,282 $22,570 $89 $52,291 $50,369 
Total loans
Total loans
Table continues on the following page.
Table continues on the following page.
Table continues on the following page.
F-65
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

December 31, 2022
Vintage Year
20222021202020192018PriorRevolversRevolvers Converted to TermTotal
Business loans:
Commercial:
    Pass (a)$3,946 (b)$3,509 (b)$917 $1,041 $598 $1,030 $18,604 $9 $29,654 
    Criticized (b)75 274 81 69 45 78 632 1 1,255 
Total commercial4,021 3,783 998 1,110 643 1,108 19,236 10 30,909 
Real estate construction:
    Pass (a)836 1,134 633 162 102 28 207 — 3,102 
    Criticized (b)— — 3 — — — — — 3 
Total real estate construction836 1,134 636 162 102 28 207 — 3,105 
Commercial mortgage:
    Pass (a)3,349 2,501 1,825 1,394 1,050 2,182 838 — 13,139 
    Criticized (b)7 5 7 32 31 75 10 — 167 
Total commercial mortgage3,356 2,506 1,832 1,426 1,081 2,257 848 — 13,306 
Lease financing
    Pass (a)316 140 64 47 37 130 — — 734 
    Criticized (b)10 — 2 8 5 1 — — 26 
Total lease financing326 140 66 55 42 131 — — 760 
International
    Pass (a)317 161 55 88 19 14 498 — 1,152 
    Criticized (b)12 — 3 — 3 10 17 — 45 
Total international329 161 58 88 22 24 515 — 1,197 
Total business loans8,868 7,724 3,590 2,841 1,890 3,548 20,806 10 49,277 
Retail loans:
Residential mortgage
    Pass (a)327 398 480 133 68 355 — — 1,761 
    Criticized (b)4 — — 9 1 39 — — 53 
Total residential mortgage331 398 480 142 69 394 — — 1,814 
Consumer:
Home equity
    Pass (a)— — — — — 9 1,708 40 1,757 
    Criticized (b)— — — — — — 17 2 19 
Total home equity— — — — — 9 1,725 42 1,776 
Other consumer
    Pass (a)69 38 50 8 1 10 355 — 531 
    Criticized (b)— — — 1 — — 3 — 4 
Total other consumer69 38 50 9 1 10 358 — 535 
Total consumer69 38 50 9 1 19 2,083 42 2,311 
Total retail loans400 436 530 151 70 413 2,083 42 4,125 
Total loans$9,268 $8,160 $4,120 $2,992 $1,960 $3,961 $22,889 $52 $53,402 
(a)Includes all loans not included in the categories of special mention, substandard or nonaccrual.
(b)Includes $3.5 billion of Small Business Administration Paycheck Protection Program (PPP) loans at December 31, 2020.
(c)Includes loans with an internal rating of special mention, substandard loans for which the accrual of interest has not been discontinued and nonaccrual loans. Special mention loans have potential credit weaknesses that deserve management’s close attention, such as loans to borrowers who may be experiencing financial difficulties that may result in deterioration of repayment prospects from the borrower at some future date. Accruing substandard loans have a well-defined weakness, or weaknesses, such as loans to borrowers who may be experiencing losses from operations or inadequate liquidity of a degree and duration that jeopardizes the orderly repayment of the loan. Substandard loans are also distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. Nonaccrual loans are loans for which the accrual of interest has been discontinued. For further information regarding nonaccrual loans, refer to the Nonperforming Assets subheading in Note 1 - Basis of Presentation and Accounting Policies. These categories are generally consistent with the "special mention" and "substandard" categories as defined by regulatory authorities. A minority of nonaccrual loans are consistent with the "doubtful" category.
Loan interest receivable totaled $141$313 million and $172$261 million at December 31, 20202023 and 2019,2022, respectively, and was included in accrued income and other assets on the Consolidated Balance Sheets.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

Allowance for Credit Losses
The following table details the changes in the allowance for credit losses.
 202020192018
(dollar amounts in millions)Business LoansRetail LoansTotalBusiness LoansRetail LoansTotalBusiness LoansRetail LoansTotal
Years Ended December 31,
Balance at beginning of period:
Allowance for loan losses$601 $36 $637 $627 $44 $671 $661 $51 $712 
Allowance for credit losses on lending-related commitments28 3 31 26 4 30 38 4 42 
Allowance for credit losses629 39 668 653 48 701 699 55 754 
Cumulative effect of change in accounting principle(42)25 (17)0 0 0 0 0 0 
Loan charge-offs(233)(5)(238)(147)(5)(152)(99)(4)(103)
Recoveries on loans previously charged-off38 4 42 40 5 45 47 5 52 
Net loan (charge-offs) recoveries(195)(1)(196)(107)0 (107)(52)1 (51)
Provision for credit losses:
Provision for loan losses531 (7)524 81 (8)73 19 (8)11 
Provision for credit losses on lending-related commitments7 6 13 2 (1)1 (12)0 (12)
Provision for credit losses538 (1)537 83 (9)74 7 (8)(1)
Foreign currency translation adjustment0 0 0 0 0 0 (1)0 (1)
Balance at end of period:
Allowance for loan losses895 53 948 601 36 637 627 44 671 
Allowance for credit losses on lending-related commitments35 9 44 28 3 31 26 4 30 
Allowance for credit losses$930 $62 $992 $629 $39 $668 $653 $48 $701 
Allowance for loan losses as a percentage of total loans1.85 %1.32 %1.81 %1.30 %0.84 %1.27 %1.37 %0.97 %1.34 %
Allowance for loan losses as a percentage of total loans excluding PPP loans2.00 n/a1.94 n/an/an/an/an/an/a
Allowance for credit losses as a percentage of total loans1.93 1.55 1.90 1.37 0.91 1.33 1.43 1.05 1.40 
Allowance for credit losses as a percentage of total loans excluding PPP loans2.08 n/a2.03 n/an/an/an/an/an/a
n/a - not applicable
 202320222021
(in millions)Business LoansRetail LoansTotalBusiness LoansRetail LoansTotalBusiness LoansRetail LoansTotal
Years Ended December 31,
Balance at beginning of period:
Allowance for loan losses$541 $69 $610 $531 $57 $588 $895 $53 $948 
Allowance for credit losses on lending-related commitments40 11 51 24 6 30 35 9 44 
Allowance for credit losses581 80 661 555 63 618 930 62 992 
Loan charge-offs(59)(3)(62)(65)(3)(68)(67)(3)(70)
Recoveries on loans previously charged-off38 2 40 47 4 51 76 4 80 
Net loan (charge-offs) recoveries(21)(1)(22)(18)1 (17)9 1 10 
Provision for credit losses:
Provision for loan losses100 — 100 28 11 39 (373)3 (370)
Provision for credit losses on lending-related commitments(9)(2)(11)16 5 21 (11)(3)(14)
Provision for credit losses91 (2)89 44 16 60 (384)— (384)
Balance at end of period:
Allowance for loan losses620 68 688 541 69 610 531 57 588 
Allowance for credit losses on lending-related commitments31 9 40 40 11 51 24 6 30 
Allowance for credit losses$651 $77 $728 $581 $80 $661 $555 $63 $618 
Allowance for loan losses as a percentage of total loans1.29 %1.63 %1.32 %1.10 %1.67 %1.14 %1.17 %1.47 %1.19 %
Allowance for credit losses as a percentage of total loans1.36 1.85 1.40 1.18 1.96 1.24 1.22 1.63 1.26 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

Nonaccrual Loans
The following table presents additional information regarding nonaccrual loans. NaN interestInterest income of $9 million, $12 million and $11 million was recognized on nonaccrual loans for the years ended December 31, 2020, 20192023, 2022 and 2018.2021, respectively.
(in millions)(in millions)Nonaccrual Loans with No Related AllowanceNonaccrual Loans with Related AllowanceTotal
Nonaccrual
Loans		(in millions)Nonaccrual Loans with No Related AllowanceNonaccrual Loans with Related AllowanceTotal
Nonaccrual
Loans
December 31, 2020
December 31, 2023
Business loans:Business loans:
Business loans:
Business loans:
Commercial
Commercial
CommercialCommercial$57 $195 $252 
Real estate construction:Real estate construction:
Other business lines (a)Other business lines (a)0 1 1 
Other business lines (a)
Other business lines (a)
Commercial mortgage:
Commercial mortgage:
Commercial mortgage:Commercial mortgage:
Commercial Real Estate business line (b)Commercial Real Estate business line (b)1 2 3 
Other business lines (a)5 21 26 
Total commercial mortgage6 23 29 
Lease financing0 1 1 
Total business loans63 220 283 
Retail loans:
Residential mortgage47 0 47 
Consumer:
Home equity17 0 17 
Total retail loans64 0 64 
Total nonaccrual loans$127 $220 $347 
December 31, 2019
Business loans:
Commercial$29 $119 $148 
Commercial mortgage:
Commercial Real Estate business line (b)
Commercial Real Estate business line (b)Commercial Real Estate business line (b)2 0 2 
Other business lines (a)Other business lines (a)1 11 12 
Total commercial mortgageTotal commercial mortgage3 11 14 
International
International
International
Total business loansTotal business loans32 130 162 
Retail loans:Retail loans:
Retail loans:
Retail loans:
Residential mortgage
Residential mortgage
Residential mortgageResidential mortgage20 0 20 
Consumer:Consumer:
Home equityHome equity17 0 17 
Home equity
Home equity
Total consumer
Total consumer
Total consumer
Total retail loansTotal retail loans37 0 37 
Total nonaccrual loansTotal nonaccrual loans$69 $130 $199 
December 31, 2022
Business loans:
Business loans:
Business loans:
Commercial
Commercial
Commercial
Real estate construction:
Other business lines (a)
Other business lines (a)
Other business lines (a)
Commercial mortgage:
Commercial mortgage:
Commercial mortgage:
Commercial Real Estate business line (b)
Commercial Real Estate business line (b)
Commercial Real Estate business line (b)
Other business lines (a)
Total commercial mortgage
International
International
International
Total business loans
Retail loans:
Retail loans:
Retail loans:
Residential mortgage
Residential mortgage
Residential mortgage
Consumer:
Home equity
Home equity
Home equity
Other consumer
Total consumer
Total retail loans
Total nonaccrual loans
(a)Primarily loans secured by owner-occupied real estate.
(b)Primarily loans to real estate developers.

Foreclosed Properties
Foreclosed properties totaled $8 million and $11 millionwere insignificant at December 31, 20202023 and 2019, respectively. There were 0 retailDecember 31, 2022. Retail loans secured by residential real estate properties in process of foreclosure included in nonaccrual loans in eitherwere insignificant at December 31, 2023 and December 31, 2022.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Effective January 1, 2023, the Corporation adopted the provisions of ASU 2022-02, which eliminated the accounting for TDRs while expanding loan modification and vintage disclosure requirements. The update specifically required additional disclosures on loan modifications to borrowers experiencing financial difficulties that involved an interest rate reduction, other-than-insignificant payment delay, a term extension, principal forgiveness or a combination thereof.
The following table displays the amortized cost basis at December 31, 2023 of loan modifications made to borrowers experiencing financial difficulty that were restructured during the year ended December 31, 2020 and 2019.2023 by type of modification.
(in millions)Term Extension (a)Payment Delay (a)Interest Rate ReductionCombinations (b)TotalPercent of Total Class
Year Ended December 31, 2023
Business loans:
Commercial$92 $20 $10 $2 $124 0.46 %
Real estate construction:
Other business lines (c)10 — — — 10 1.92 
Total real estate construction10 — — — 10 0.19 
Commercial mortgage:
Other business lines (c)15 — — 10 25 0.28 
Total commercial mortgage15 — — 10 25 0.18 
Total business loans117 20 10 12 159 0.33 
Retail loans:
Consumer:
Home equity1 — 1 1 3 0.16 
Total consumer1 — 1 1 3 0.13 
Total retail loans1 — 1 1 3 0.07 
Total loans$118 $20 $11 $13 $162 0.31 %

(a)Represents loan balances where terms were extended or payments were delayed by a more than an insignificant time period, typically more than 180 days, at or above contractual interest rates. See Note 1 to the consolidated financial statements for further information.

(b)Relates to FDMs where more than one type of modification was made. For the year ended December 31, 2023, this primarily related to modifications where the interest rate was reduced and the term was extended.

(c)Primarily loans secured by owner-occupied real estate.


There were no commitments to lend additional funds to borrowers experiencing financial difficulty whose terms had been restructured at December 31, 2023.

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Comerica Incorporated and Subsidiaries

The following table summarizes the financial impacts of loan modifications made to specific loans during the year ended December 31, 2023.
Weighted-Average Term Extension
(in months)		Weighted-Average Interest Rate Reduction
Year Ended December 31, 2023
Business loans:
Commercial10.4 (2.01)%
Real estate construction:
Other business lines (a)9.3 — 
Total real estate construction9.3 — 
Commercial mortgage:
Other business lines (a)17.6 (0.68)
Total commercial mortgage17.6 (0.68)
Total business loans11.7 (1.35)
Retail loans:
Consumer:
Home equity145.4(3.01)
Total consumer145.4(3.01)
Total retail loans145.4 (3.01)
Total loans13.1 (1.49)%
(a)Primarily loans secured by owner-occupied real estate.
During the year ended December 31, 2023, modifications to borrowers experiencing financial difficulty included restructurings with other-than-insignificant payment delays of $6 million in the Commercial loan category.
On an ongoing basis, the Corporation monitors the performance of modified loans related to their restructured terms. Loans restructured during the year ended December 31, 2023 were current under modified terms at year ended December 31, 2023. Nonperforming restructured loans are classified as nonaccrual loans and are individually evaluated in the allowance for loan losses.
For restructured loans, a subsequent payment default is defined in terms of delinquency, when a principal or interest payment is 90 days past due or classified into nonaccrual status during the reporting period. Of the loans restructured during the 12 month period ended December 31, 2023, there were no subsequent defaults as of December 31, 2023.
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Comerica Incorporated and Subsidiaries

Troubled Debt Restructurings Prior to the Adoption of ASU 2022-02
The following table details the amortized cost basis at December 31, 2020 and 20192022 of loans considered to be TDRs that were restructured during the yearsyear ended December 31, 2020 and 2019,2022 by type of modification. In cases of loans with more than one type of modification, the loans were categorized based on the most significant modification.
20202019
Type of ModificationType of Modification
Type of Modification
Type of Modification
Type of Modification
(in millions)(in millions)Principal Deferrals (a)Interest Rate ReductionsTotal ModificationsPrincipal Deferrals (a)Interest Rate ReductionsTotal Modifications
Years Ended December 31,
(in millions)
(in millions)Principal Deferrals (a)Interest Rate ReductionsTotal Modifications
Year Ended December 31, 2022
Business loans:
Business loans:
Business loans:Business loans:
CommercialCommercial$18 $0 $18 $28 $0 $28 
Commercial
Commercial
Real estate construction:
Other business lines (b)
Other business lines (b)
Other business lines (b)
Commercial mortgage:Commercial mortgage:
Commercial mortgage:
Commercial mortgage:
Other business lines (b)
Other business lines (b)
Other business lines (b)Other business lines (b)2 0 2 0 0 0 
Total business loansTotal business loans20 0 20 28 0 28 
Total business loans
Total business loans
Retail loans:Retail loans:
Residential mortgage
Residential mortgage
Residential mortgage
Consumer:Consumer:
Home equity (c)Home equity (c)0 2 2 0 1 1 
Home equity (c)
Home equity (c)
Other consumer
Total consumer
Total retail loans
Total loansTotal loans$20 $2 $22 $28 $1 $29 
(a)Primarily represents loan balances where terms were extended by more than an insignificant time period, typically more than 180 days, at or above contractual interest rates. Also includes commercial loans restructured in bankruptcy. In accordance with the provisions of the CARES Act, 2020 balances exclude $72 million, primarily retail loans, with terms extended by more than an insignificant time period.
(b)Primarily loans secured by owner-occupied real estate.
(c)Includes bankruptcy loans for which the court has discharged the borrower's obligation and the borrower has not reaffirmed the debt.
The Corporation charges interest on principal balances outstanding during deferral periods. Additionally, none of the modifications involved forgiveness of principal. There were 0no significant commitments to lend additional funds to borrowers
whose terms have been modified in TDRs at December 31, 2020, compared to $3 million at December 31, 2019. On an ongoing basis, the Corporation monitors the performance of modified loans to their restructured terms. The allowance for loan losses continues to be reassessed on the basis of an individual evaluation of the loan.2022.
For principal deferrals, incremental deterioration in the credit quality of the loan, represented by a downgrade in the risk rating of the loan, for example, due to missed interest payments or a reduction of collateral value, iswas considered a subsequent default. For interest rate reductions, a subsequent payment default iswas defined in terms of delinquency, when a principal or interest payment iswas 90 days past due. Of the TDRs modified during the yearsyear ended December 31, 2020 and 2019,2022, there were $6 million of subsequent defaults of principal deferrals totaled $10 million and $12 million, respectively. There were 0no subsequent defaults of interest rate reductions during either of the years ended December 31, 2020 and 2019.

reductions.
NOTE 5 - SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK
Concentrations of credit risk may exist when a number of borrowers are engaged in similar activities, or activities in the same geographic region, and have similar economic characteristics that would cause them to be similarly impacted by changes in economic or other conditions. Concentrations of both on-balance sheet and off-balance sheet credit risk are controlled and monitored as part of credit policies. The Corporation is a regional financial services holding company with a geographic concentration of its on-balance-sheet and off-balance-sheet activities in Michigan, California and Texas.
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Comerica Incorporated and Subsidiaries

At December 31, 2020,2023, the Corporation's concentration of credit risk with the commercial real estate industry, which includes a portfolio of real estate construction and commercial mortgage loans, represented 2736 percent of total loans. The following table summarizes the Corporation's commercial real estate loan portfolio by loan category.
(in millions)(in millions)  (in millions)  
December 31December 3120202019December 3120232022
Real estate construction loans:Real estate construction loans:
Commercial Real Estate business line (a)Commercial Real Estate business line (a)$3,657 $3,044 
Commercial Real Estate business line (a)
Commercial Real Estate business line (a)
Other business lines (b)Other business lines (b)425 411 
Total real estate construction loansTotal real estate construction loans4,082 3,455 
Commercial mortgage loans:Commercial mortgage loans:
Commercial Real Estate business line (a)
Commercial Real Estate business line (a)
Commercial Real Estate business line (a)Commercial Real Estate business line (a)2,273 2,176 
Other business lines (b)Other business lines (b)7,639 7,383 
Total commercial mortgage loansTotal commercial mortgage loans9,912 9,559 
Total commercial real estate loansTotal commercial real estate loans$13,994 $13,014 
Total unused commitments on commercial real estate loansTotal unused commitments on commercial real estate loans$3,272 $3,557 
(a)Primarily loans to real estate developers.
(b)Primarily loans secured by owner-occupied real estate.

The Corporation also has a concentration of credit risk with the automotive industry.industry, which represented 14 percent of total loans at December 31, 2023. Outstanding loans, included in commercial loans on the Consolidated Balance Sheets, and total exposure (outstanding loans, unused commitments and standby letters of credit) to companies related to the automotive industry were as follows:

(in millions)  
December 3120202019
Automotive loans:
Production (a)$1,093 $1,249 
Dealer5,692 7,414 
Total automotive loans$6,785 $8,663 
Total automotive exposure:
Production (a)$2,267 $2,358 
Dealer9,653 9,677 
Total automotive exposure$11,920 $12,035 
(a)Excludes PPP loans.

(in millions)  
December 3120232022
Automotive loans:
Production$848 $1,068 
Dealer6,191 5,367 
Total automotive loans$7,039 $6,435 
Total automotive exposure:
Production$1,744 $2,028 
Dealer10,418 10,910 
Total automotive exposure$12,162 $12,938 
NOTE 6 - PREMISES AND EQUIPMENT
A summary of premises and equipment by major category follows:
(in millions)(in millions)  (in millions)  
December 31December 3120202019December 3120232022
LandLand$86 $86 
Buildings and improvementsBuildings and improvements847 818 
Furniture and equipmentFurniture and equipment485 513 
Total costTotal cost1,418 1,417 
Less: Accumulated depreciation and amortizationLess: Accumulated depreciation and amortization(959)(960)
Net book valueNet book value$459 $457 
The Corporation conducts a portion of its business from leased facilities and leases certain equipment. Rental expense for leased properties and equipment amounted to $79 million, $81 million and $75 million in 2020, 2019 and 2018, respectively. Refer to Note 2625 for more information on leased facilities and equipment.
Other assets included unamortized capitalized software costs of $106 million and $83 million at December 31, 2023 and 2022, respectively. Noninterest expenses included software amortization expense of $26 million, $25 million and $33 million for the years ending December 31, 2023, 2022 and 2021, respectively.
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Comerica Incorporated and Subsidiaries

NOTE 7 - GOODWILL AND CORE DEPOSIT INTANGIBLES
The following table summarizes the carrying value of goodwill by reporting unit for the years ended December 31, 20202023 and 2019.2022.
(in millions)(in millions)
(in millions)
(in millions)
December 31
December 31
December 31December 3120202019
Commercial BankCommercial Bank$473 $473 
Commercial Bank
Commercial Bank
Retail Bank
Retail Bank
Retail BankRetail Bank101 101 
Wealth ManagementWealth Management61 61 
Wealth Management
Wealth Management
TotalTotal$635 $635 
Total
Total
The Corporation performs its annual evaluation of goodwill impairment in the third quarter of each year and may elect to perform a quantitative impairment analysis or first conduct a qualitative analysis to determine if a quantitative analysis is necessary. In addition, the Corporation evaluates goodwill impairment on an interim basis if events or changes in circumstances between annual tests indicatedindicate additional testing may be warranted to determine if goodwill might be impaired.
Due to the significant deterioration of economic conditionsIn 2023 and the spread of the coronavirus global pandemic in first quarter 2020, the Corporation assessed impairment indicators and determined it was more likely than not that the fair value of each reporting unit exceeded its carrying value. In second quarter 2020, the Corporation performed an interim quantitative impairment test in response to continued macroeconomic deterioration and the ongoing impacts to the banking industry and markets in which the Corporation operates. At the conclusion of the second quarter quantitative test, the estimated fair values of all reporting units substantially exceeded their carrying values, including goodwill. In 2020 and 2019,2022, the annual test of goodwill impairment was performed as of the beginning of the third quarter, and in both periods, a qualitative assessment resulted in the Corporation determining goodwill was not impaired, as it was more likely than not that the fair value of each reporting unit exceeded its carrying value.
A summary of core deposit intangible carrying value and related accumulated amortization follows:
(in millions)  
December 3120202019
Gross carrying amount$34 $34 
Accumulated amortization(33)(32)
Net carrying amount$1 $2 
The Corporation recorded amortization expense related to the core deposit intangible of $1 million and $2 million for the years ended December 31, 2020 and 2019, respectively. The estimated future amortization of the core deposit intangible is $1 million for the year ended December 31, 2021. After December 31, 2021 the core deposit intangible will be fully amortized.
NOTE 8 - DERIVATIVE AND CREDIT-RELATED FINANCIAL INSTRUMENTS
In the normal course of business, the Corporation enters into various transactions involving derivative and credit-related financial instruments to manage exposure to fluctuations in interest rate, foreign currency and other market risks and to meet the financing needs of customers (customer-initiated derivatives). These financial instruments involve, to varying degrees, elements of market and credit risk. Market and credit risk are included in the determination of fair value.
Market risk is the potential loss that may result from movements in interest rates, foreign currency exchange rates or energy commodity prices that cause an unfavorable change in the value of a financial instrument. The Corporation manages this risk by establishing monetary exposure limits and monitoring compliance with those limits. Market risk inherent in interest rate and energy contracts entered into on behalf of customers is mitigated by taking offsetting positions, except in those circumstances when the amount, tenor and/or contract rate level results in negligible economic risk, whereby the cost of purchasing an offsetting contract is not economically justifiable. The Corporation mitigates most of the inherent market risk in foreign exchange contracts entered into on behalf of customers by taking offsetting positions and manages the remainder through individual foreign currency position limits and aggregate value-at-risk limits. These limits are established annually and positions are monitored quarterly. Market risk inherent in derivative instruments held or issued for risk management purposes is typically offset by changes in the fair value of the assets or liabilities being hedged.
Credit risk is the possible loss that may occur in the event of nonperformance by the counterparty to a financial instrument. The Corporation attempts to minimize credit risk arising from customer-initiated derivatives by evaluating the creditworthiness of each customer, adhering to the same credit approval process used for traditional lending activities and obtaining collateral as deemed necessary. Derivatives with dealer counterparties are either cleared through a clearinghouse or
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Comerica Incorporated and Subsidiaries

settled directly with a single counterparty. For derivatives settled directly with dealer counterparties, the Corporation utilizes counterparty risk limits and monitoring procedures as well as master netting arrangements and bilateral collateral agreements to facilitate the management of credit risk.
Included in the fair value of derivative instruments are credit valuation adjustments reflecting counterparty credit risk. These adjustments are determined by applying a credit spread for the counterparty or the Corporation, as appropriate, to the total expected exposure of the derivative. Master netting arrangements effectively reduce credit valuation adjustments by permitting settlement of positive and negative positions and offset cash collateral held with the same counterparty on a net basis. Bilateral collateral agreements require daily exchange of cash or highly rated securities issued by the U.S. Treasury or other U.S. government entities to collateralize amounts due to either party. At December 31, 2020,2023, counterparties with bilateral collateral agreements deposited $19$143 million of cash with the Corporation to secure the fair value of contracts in an unrealized gain position, and the Corporation had pledged $44$4 million of marketable investment securities and posted $49$14 million of cash as collateral for contracts in an unrealized loss position. For those counterparties not covered under bilateral collateral agreements, collateral is obtained, if deemed necessary, based on the results of management’s credit evaluation of the counterparty. Collateral varies, but may include cash, investment securities, accounts receivable, equipment or real estate. Included in the fair value


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Table of derivative instruments are credit valuation adjustments reflecting counterparty credit risk. These adjustments are determined by applying a credit spread for the counterparty or the Corporation, as appropriate, to the total expected exposure of the derivative. There were 0 derivative instruments with credit-risk-related contingent features that were in a liability position at December 31, 2020.Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

Derivative Instruments
Derivative instruments utilized by the Corporation are negotiated over-the-counter and primarily include swaps, caps and floors, forward contracts and options, each of which may relate to interest rates, energy commodity prices or foreign currency exchange rates. Swaps are agreements in which two parties periodically exchange cash payments based on specified indices applied to a specified notional amount until a stated maturity. Caps and floors are agreements which entitle the buyer to receive cash payments based on the difference between a specified reference rate or price and an agreed strike rate or price, applied to a specified notional amount until a stated maturity. Forward contracts are over-the-counter agreements to buy or sell an asset at a specified future date and price. Options are similar to forward contracts except the purchaser has the right, but not the obligation, to buy or sell the asset during a specified period or at a specified future date.
Over-the-counter contracts are tailored to meet the needs of the counterparties involved and, therefore, contain a greater degree of credit risk and liquidity risk than exchange-traded contracts, which have standardized terms and readily available price information. The Corporation reduces exposure to market and liquidity risks from over-the-counter derivative instruments entered into for risk management purposes, and transactions entered into to mitigate the market risk associated with customer-initiated transactions, by taking offsetting positions with investment grade domestic and foreign financial institutions and subjecting counterparties to credit approvals, limits and collateral monitoring procedures similar to those used in making other extensions of credit. In addition, certain derivative contracts executed bilaterally with a dealer counterparty in the over-the-counter market are cleared through a clearinghouse, whereby the clearinghouse becomes the counterparty to the transaction.
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Comerica Incorporated and Subsidiaries

The following table presents the composition of the Corporation’s derivative instruments held or issued for risk management purposes or in connection with customer-initiated and other activities at December 31, 20202023 and 2019.2022. The table excludes a derivative related to the Corporation's 2008 sale of its remaining ownership of Visa shares and includes accrued interest receivable and payable.
December 31, 2020December 31, 2019 December 31, 2023December 31, 2022
 Fair Value Fair Value  Fair Value Fair Value
(in millions)(in millions)Notional/
Contract
Amount (a)		Gross Derivative AssetsGross Derivative LiabilitiesNotional/
Contract
Amount (a)		Gross Derivative AssetsGross Derivative Liabilities(in millions)Notional/
Contract
Amount (a)		Gross Derivative AssetsGross Derivative LiabilitiesNotional/
Contract
Amount (a)		Gross Derivative AssetsGross Derivative Liabilities
Risk management purposesRisk management purposes
Derivatives designated as hedging instrumentsDerivatives designated as hedging instruments
Derivatives designated as hedging instruments
Derivatives designated as hedging instruments
Interest rate contracts:Interest rate contracts:
Swaps - fair value - receive fixed/ pay floating$2,650 $0 $0 $3,325 $0 $0 
Swaps - cash flow - receive fixed/
pay floating		5,550 0 0 4,550 0 0 
Interest rate contracts:
Interest rate contracts:
Fair value swaps - receive fixed/pay floating
Fair value swaps - receive fixed/pay floating
Fair value swaps - receive fixed/pay floating
Cash flow swaps - receive fixed/
pay floating (b)
Derivatives used as economic hedgesDerivatives used as economic hedges
Foreign exchange contracts:Foreign exchange contracts:
Foreign exchange contracts:
Foreign exchange contracts:
Spot, forwards and swaps
Spot, forwards and swaps
Spot, forwards and swapsSpot, forwards and swaps442 1 4 330 0 2 
Total risk management purposesTotal risk management purposes8,642 1 4 8,205 0 2 
Customer-initiated and other activitiesCustomer-initiated and other activities
Interest rate contracts:Interest rate contracts:
Interest rate contracts:
Interest rate contracts:
Caps and floors written
Caps and floors written
Caps and floors writtenCaps and floors written869 0 0 671 0 0 
Caps and floors purchasedCaps and floors purchased869 0 0 671 0 0 
SwapsSwaps19,783 531 61 16,485 211 39 
Total interest rate contractsTotal interest rate contracts21,521 531 61 17,827 211 39 
Energy contracts:Energy contracts:
Caps and floors writtenCaps and floors written503 1 33 477 0 23 
Caps and floors written
Caps and floors written
Caps and floors purchasedCaps and floors purchased503 33 1 477 23 0 
SwapsSwaps2,115 117 115 2,135 73 69 
Total energy contractsTotal energy contracts3,121 151 149 3,089 96 92 
Foreign exchange contracts:Foreign exchange contracts:
Spot, forwards, options and swapsSpot, forwards, options and swaps1,901 17 15 1,013 10 8 
Spot, forwards, options and swaps
Spot, forwards, options and swaps
Total customer-initiated and other activitiesTotal customer-initiated and other activities26,543 699 225 21,929 317 139 
Total gross derivativesTotal gross derivatives$35,185 700 229 $30,134 317 141 
Amounts offset in the Consolidated Balance Sheets:Amounts offset in the Consolidated Balance Sheets:
Netting adjustment - Offsetting derivative assets/liabilitiesNetting adjustment - Offsetting derivative assets/liabilities(83)(83)(63)(63)
Netting adjustment - Offsetting derivative assets/liabilities
Netting adjustment - Offsetting derivative assets/liabilities
Netting adjustment - Cash collateral received/postedNetting adjustment - Cash collateral received/posted(17)(48)(11)(12)
Net derivatives included in the Consolidated Balance Sheets (b)600 98 243 66 
Net derivatives included in the Consolidated Balance Sheets (c)
Amounts not offset in the Consolidated Balance Sheets:Amounts not offset in the Consolidated Balance Sheets:
Marketable securities pledged under bilateral collateral agreementsMarketable securities pledged under bilateral collateral agreements0 (42)0 (21)
Marketable securities pledged under bilateral collateral agreements
Marketable securities pledged under bilateral collateral agreements
Net derivatives after deducting amounts not offset in the Consolidated Balance SheetsNet derivatives after deducting amounts not offset in the Consolidated Balance Sheets$600 $56 $243 $45 
(a)Notional or contractual amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected on the Consolidated Balance Sheets.
(b)December 31, 2023 included $2.0 billion of forward starting swaps that will become effective on their contractual start dates in 2024.
(c)Net derivative assets are included in accrued income and other assets and net derivative liabilities are included in accrued expenses and other liabilities on the Consolidated Balance Sheets. Included in the fair value of net derivative assets and net derivative liabilities are credit valuation adjustments reflecting counterparty credit risk and credit risk of the Corporation. The fair value of net derivative assets included credit valuation adjustments for counterparty credit risk of $27$3 million and $9$2 million at December 31, 20202023 and 2019,2022, respectively.
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Comerica Incorporated and Subsidiaries

Risk Management
The Corporation's derivative instruments used for managing interest rate risk include cash flow hedging strategies that convert variable-rate loans to fixed rates and fair value hedging strategies that convert fixed-rate medium-and long-term debt to variable rates. Interest and fees on loans for the year ended December 31, 2020 included $70(expense) income related to swaps settlements of $(602) million, of cash flow hedge income, compared to NaN in$(25) million and $95 million for the years ended December 31, 20192023, 2022 and 2018.2021, respectively.
The following table details the effects of fair value hedging on the Consolidated Statements of Comprehensive Income.
(in millions)(in millions)Interest on Medium- and Long-Term Debt(in millions)Interest on Medium- and Long-Term Debt
Years Ended December 31Years Ended December 31202020192018Years Ended December 31202320222021
Total interest on medium-and long-term debt (a)Total interest on medium-and long-term debt (a)$80 $197 $144 
Fair value hedging relationships:Fair value hedging relationships:
Interest rate contracts:Interest rate contracts:
Interest rate contracts:
Interest rate contracts:
Hedged items
Hedged items
Hedged itemsHedged items109 110 74 
Derivatives designated as hedging instrumentsDerivatives designated as hedging instruments(51)(4)(7)
(a)Includes the effects of hedging.
For information on accumulated net gains on cash flow hedges, refer to Note 14.
The following table summarizestables summarize the expected weighted average remaining maturity of the notional amount of risk management interest rate swaps, the carrying amount of the related hedged items and the weighted average interest rates associated with amounts expected to be received or paid on interest rate swap agreements, and for fair value swaps, the carrying amount of the related hedged items, as of December 31, 20202023 and 2019.2022.
Cash flow swaps - receive fixed/pay floating rate on variable-rate loans (a)
(dollar amounts in millions)December 31, 2020December 31, 2019
Derivative notional amount$5,550 4,550 
Weighted average:
   Remaining maturity (in years)2.3 3.0 
   Receive rate1.87 %1.94 %
   Pay rate (a)0.15 1.71 
(dollar amounts in millions)December 31, 2023December 31, 2022
Weighted average:
   Time to maturity (in years)3.9 4.6 
   Receive rate (b)2.43 %2.35 %
   Pay rate (b), (c)5.38 4.07 
(a)Includes $7.0 billion of de-designated interest rate swaps.
(b)Excludes forward starting swaps not effective as of the period shown. December 31, 2023 excluded $2.0 billion of forward starting swaps. December 31, 2022 excluded $4.6 billion of forward starting swaps.
(c)Variable rates paid on receive fixed swaps designated as cash flow hedges arewere based on one-month LIBORBSBY or SOFR rates in effect at December 31, 20202023 and LIBOR, BSBY or SOFR rates in effect at December 31, 2019.

2022.
Fair value swaps - receive fixed/pay floating rate on medium- and long-term debt
(dollar amounts in millions)(dollar amounts in millions)December 31, 2020December 31, 2019(dollar amounts in millions)December 31, 2023December 31, 2022
Derivative notional amount$2,650 $3,325 
Carrying value of hedged items (a)Carrying value of hedged items (a)2,928 3,469 
Weighted average:Weighted average:
Remaining maturity (in years)4.6 4.6 
Time to maturity (in years)
Time to maturity (in years)
Time to maturity (in years)
Receive rate Receive rate3.68 %3.44 % Receive rate3.67 %3.52 %
Pay rate (b) Pay rate (b)1.16 2.80 
(a)Included $279$(93) million and $146$(124) million of cumulative hedging adjustments at December 31, 20202023 and 2019,2022, respectively, which
included $6$3 million and $7$4 million, respectively, of hedging adjustment on a discontinued hedging relationship.
(b)VariableFloating rates paid on receive fixed swaps designated as fair value hedges arewere based on one-SOFR rates in effect at December 31, 2023 and six-monthSOFR and LIBOR rates in effect at December 31, 20202022.
De-designated Interest Rate Swaps and 2019.Price Alignment Income
Foreign exchangeOn November 15, 2023, the Bloomberg Index Services Limited announced a permanent cessation of BSBY and all of its tenors effective November 15, 2024. Accordingly, the Corporation de-designated $7.0 billion of interest rate swaps accounted for as cash flow hedges of BSBY-indexed loans, as of November 15, 2023, because it was no longer probable that the BSBY-based loan cash flows would occur through the duration of the hedging relationships.
As a result of the de-designation, a pre-tax loss of $195 million was reclassified out of AOCI and into earnings for cash flows no longer probable of occurring. In addition, periodic settlement losses of $29 million and fair market value gains of $133 million for de-designated positions were recognized as part of noninterest income from the de-designation date of November 15, 2023 through December 31, 2023. This resulted in a net loss of $91 million recorded as a component of risk arises from changesmanagement hedging (loss) income in the value of certain assets and liabilities denominated in foreign currencies. The Corporation employs spot and forward contracts in addition to swap contracts to manage exposure to these and other risks. These instruments are used as economic hedges, and net gains or losses are included in other noninterest income on the Consolidated StatementsStatement of Income.
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Amounts in AOCI related to cash flows that continue to be probable of occurring are amortized out of AOCI and into earnings from the de-designation date through BSBY cessation, resulting in a pre-tax loss of $26 million recognized as part of interest and fees on loans as of December 31, 2023. Along with settlements no longer recognized through margin, this resulted in a net benefit of $3 million to interest and fees on loans for the year ended December 31, 2023.
For more information on accumulated net losses on cash flow hedges, refer to Note 14.
Risk management hedging (loss) income also includes price alignment income, which is income received on payments made to a central clearing party for centrally cleared derivatives. Positions are settled daily based on derivative fair values and the party receiving net settlement amounts pays price alignment, based on an earning rate, to the party making settlement payments. Price alignment income totaled $51 million for the year ending December 31, 2023, $8 million for the year ending December 31, 2022 and was insignificant for the year ending December 31, 2021.
Customer-Initiated and Other
The Corporation enters into derivative transactions at the request of customers and generally takes offsetting positions with dealer counterparties to mitigate the inherent market risk. Income primarily results from the spread between the customer derivative and the offsetting dealer position.
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For customer-initiated foreign exchange contracts where offsetting positions have not been taken, the Corporation manages the remaining inherent market risk through individual foreign currency position limits and aggregate value-at-risk limits. These limits are established annually and reviewed quarterly. For those customer-initiated derivative contracts which were not offset or where the Corporation holds a position within the limits described above, the Corporation recognized 0 net gains and losses in other noninterest income on the Consolidated Statements of Income for the years ending December 31, 2020, 2019 and 2018.
Fair values of customer-initiated and other derivative instruments represent the net unrealized gains or losses on such contracts and are recorded on the Consolidated Balance Sheets. Changes in fair value are recognized on the Consolidated Statements of Income. The net gains recognized in income on customer-initiated derivative instruments, net of the impact of offsetting positions included in derivative income, were as follows:
Years Ended December 31,
Years Ended December 31,Years Ended December 31,
(in millions)(in millions)Location of Gain202020192018(in millions)202320222021
Interest rate contractsInterest rate contractsOther noninterest income$27 $29 $26 
Energy contractsEnergy contractsOther noninterest income1 5 4 
Foreign exchange contractsForeign exchange contractsForeign exchange income40 43 47 
TotalTotal $68 $77 $77 
Credit-Related Financial Instruments
The Corporation issues off-balance sheet financial instruments in connection with commercial and consumer lending activities. The Corporation’s credit risk associated with these instruments is represented by the contractual amounts indicated in the following table.
(in millions)(in millions)
December 31December 3120202019
December 31
December 3120232022
Unused commitments to extend credit:Unused commitments to extend credit:
Commercial and otherCommercial and other$23,443 $23,681 
Bankcard, revolving check credit and home equity loan commitments3,297 3,180 
Commercial and other
Commercial and other
Bankcard, revolving credit and home equity loan commitments
Total unused commitments to extend creditTotal unused commitments to extend credit$26,740 $26,861 
Standby letters of creditStandby letters of credit$3,273 $3,320 
Commercial letters of creditCommercial letters of credit30 18 
The Corporation maintains an allowance to cover probablecurrent expected credit losses inherent in lending-related commitments, including unused commitments to extend credit, letters of credit and financial guarantees. The allowance for credit losses on lending-related commitments, included in accrued expenses and other liabilities on the Consolidated Balance Sheets, was $44$40 million and $31$51 million at December 31, 20202023 and 2019,2022, respectively.
Unused Commitments to Extend Credit
Commitments to extend credit are legally binding agreements to lend to a customer, provided there is no violation of any condition established in the contract. These commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many commitments expire without being drawn upon, the total contractual amount of commitments does not necessarily represent future cash requirements of the Corporation. Commercial and other unused commitments are primarily variable rate commitments. The allowance for credit losses on lending-related commitments
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included $37$38 million and $25$44 million at December 31, 20202023 and 2019,2022, respectively, for probableexpected credit losses inherent in the Corporation’s unused commitments to extend credit.
Standby and Commercial Letters of Credit
Standby letters of credit represent conditional obligations of the Corporation which guarantee the performance of a customer to a third party. Standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. Commercial letters of credit are issued to finance foreign or domestic trade transactions. These contracts expire in decreasing amounts through the year 2028.2033. The Corporation may enter into participation arrangements with third parties that effectively reduce the maximum amount of future payments which may be required under standby and commercial letters of credit. These risk participations covered $150$85 million and $161$107 million at December 31, 20202023 and 2019,2022, respectively, of the $3.3$3.6 billion and $3.8 billion of standby and commercial letters of credit outstanding at both December 31, 20202023 and 2019.
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2022, respectively.
The carrying value of the Corporation’s standby and commercial letters of credit, included in accrued expenses and other liabilities on the Consolidated Balance Sheets, totaled $31$34 million at December 31, 2020,2023, including $24$32 million in deferred fees and $7$2 million in the allowance for credit losses on lending-related commitments. At December 31, 2019,2022, the comparable amounts were $32$35 million, $26$28 million and $6$7 million, respectively.
The following table presents a summary of criticized standby and commercial letters of credit at December 31, 20202023 and 2019.2022. The Corporation's criticized list is consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities. The Corporation manages credit risk through underwriting, periodically reviewing and approving its credit exposures using Board committee approved credit policies and guidelines.
(dollar amounts in millions)(dollar amounts in millions)December 31, 2020December 31, 2019(dollar amounts in millions)December 31, 2023December 31, 2022
Total criticized standby and commercial letters of creditTotal criticized standby and commercial letters of credit$73 $44 
As a percentage of total outstanding standby and commercial letters of creditAs a percentage of total outstanding standby and commercial letters of credit2.2 %1.3 %As a percentage of total outstanding standby and commercial letters of credit1.4 %1.0 %
Other Credit-Related Financial Instruments
The Corporation enters into credit risk participation agreements, under which the Corporation assumes credit exposure associated with a borrower’s performance related to certain interest rate derivative contracts. The Corporation is not a party to the interest rate derivative contracts and only enters into these credit risk participation agreements in instances in which the Corporation is also a party to the related loan participation agreement for such borrowers. The Corporation manages its credit risk on the credit risk participation agreements by monitoring the creditworthiness of the borrowers, which is based on the normal credit review process as if the Corporation had it entered into the derivative instruments directly with the borrower. The notional amount of such credit risk participation agreementagreements reflects the pro-rata share of the derivative instrument, consistent with its share of the related participated loan. As of December 31, 2020 and 2019, theThe total notional amount of the credit risk participation agreements was approximately $1.1$1.0 billion and $786$951 million at December 31, 2023 and 2022, respectively, and the fair value was $3 millioninsignificant at both December 31, 20202023 and insignificant at December 31, 2019.2022. The maximum estimated exposure to these agreements, as measured by projecting a maximum value of the guaranteed derivative instruments as of the balance sheet date, assuming 100 percent default by all obligors on the maximum values, was $62 million and $20$2 million at December 31, 20202023 and 2019, respectively.insignificant at December 31, 2022. In the event of default, the lead bank has the ability to liquidate the assets of the borrower, in which case the lead bank would be required to return a percentage of the recouped assets to the participating banks. As of December 31, 2020,2023, the weighted average remaining maturity of outstanding credit risk participation agreements was 4.44.1 years.
In 2008, the Corporation sold its remaining ownership of Visa Class B shares and entered into a derivative contract. Under the terms of the derivative contract, the Corporation will compensate the counterparty primarily for dilutive adjustments made to the conversion factor of the Visa Class B shares to Class A shares based on the ultimate outcome of litigation involving Visa. Conversely, the Corporation will be compensated by the counterparty for any increase in the conversion factor from anti- dilutive adjustments. The notional amount of the derivative contract was equivalent to approximately 780,000 Visa Class B Shares. The fair value of the derivative liability, included in accrued expenses and other liabilities on the Consolidated Balance Sheets, was $12 million at both December 31, 2023 and 2022.
NOTE 9 - VARIABLE INTEREST ENTITIES (VIEs)
The Corporation evaluates its interest in certain entities to determine if these entities meet the definition of a VIE and whether the Corporation is the primary beneficiary and should consolidate the entity based on the variable interests it held both at inception and when there is a change in circumstances that requires a reconsideration.
The Corporation holds ownership interests in funds in the form of limited partnerships or limited liability companies (LLCs) investing in affordable housing projects that qualify for the low-income housing tax credit (LIHTC). The Corporation
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also directly invests in limited partnerships and LLCs which invest in community development and other projects, which generate similar tax credits to investors (other tax credit entities). As an investor, the Corporation obtains income tax credits and deductions from the operating losses of these tax credit entities. These tax credit entities meet the definition of a VIE; however, the Corporation is not the primary beneficiary of the entities, as the general partner or the managing member has both the power to direct the activities that most significantly impact the economic performance of the entities and the obligation to absorb losses or the right to receive benefits that could be significant to the entities.
The Corporation accounts for its interests in LIHTC entities using the proportional amortization method. Ownership interests in other tax credit entities are accounted for under either the cost or equity method. Exposure to loss as a result of the Corporation’s involvement in LIHTC entities and other tax credit entities at December 31, 20202023 was limited to $448$500 million and $12$29 million, respectively.
Investment balances, including all legally binding commitments to fund future investments, are included in accrued income and other assets on the Consolidated Balance Sheets. A liability is recognized in accrued expenses and other liabilities on the Consolidated Balance Sheets for all legally binding unfunded commitments to fund tax credit entities ($165231 million at December 31, 2020)2023). Amortization and other write-downs of LIHTC investments are presented on a net basis as a component of the provision for income taxes on the Consolidated Statements of Income, while amortization and write-downs of other tax credit investments are recorded in other noninterest income. The income tax credits and deductions are recorded as a reduction of income tax expense and a reduction of federal income taxes payable.
The Corporation provided no financial or other support that was not contractually required to any of the above VIEs during the years ended December 31, 2023, 2022 and 2021.
The following table summarizes the impact of these tax credit entities on the Corporation’s Consolidated Statements of Income.
(in millions)
Years Ended December 31202320222021
Other noninterest income:
Amortization of other tax credit investments$(4)$— $1 
Provision for income taxes:
Amortization of LIHTC Investments69 $72 71 
Low income housing tax credits(65)(68)(68)
Other tax benefits related to tax credit entities(21)(18)(17)
Total provision for income taxes$(17)$(14)$(14)
For further information on the Corporation’s consolidation policy, see Note 1.
NOTE 10 - DEPOSITS
At December 31, 2023, the scheduled maturities of certificates of deposit and other deposits with a stated maturity were as follows:
(in millions) 
Years Ending December 31
  
2024$8,177 
202567 
202621 
202712 
20286 
Thereafter3 
Total$8,286 
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The Corporation provided 0 financial or other support that was not contractually required to any of the above VIEs during the years ended December 31, 2020, 2019 and 2018.
The following table summarizes the impact of these tax credit entities on line items on the Corporation’s Consolidated Statements of Income.
(in millions)
Years Ended December 31202020192018
Other noninterest income:
Sales of other tax credit investments$1 $2 $5 
Provision for income taxes:
Amortization of LIHTC Investments67 $65 65 
Low income housing tax credits(63)(62)(62)
Other tax benefits related to tax credit entities(16)(13)(14)
Total provision for income taxes$(12)$(10)$(11)
For further information on the Corporation’s consolidation policy, see Note 1.
NOTE 10 - DEPOSITS
At December 31, 2020, the scheduled maturities of certificates of deposit and other deposits with a stated maturity were as follows:
(in millions) 
Years Ending December 31
  
2021$1,823 
2022298 
202324 
202412 
202520 
Thereafter22 
Total$2,199 
A maturity distribution of domestic certificates of deposit of $100,000 and over follows:
(in millions)(in millions)  (in millions)  
December 31December 3120202019December 3120232022
Three months or lessThree months or less$366 $398 
Over three months to six monthsOver three months to six months246 503 
Over six months to twelve monthsOver six months to twelve months387 819 
Over twelve monthsOver twelve months205 97 
TotalTotal$1,204 $1,817 
The aggregate amount of domestic certificates of deposit that meet or exceed the current FDIC insurance limit of $250,000 was $632 million$1.3 billion and $956$478 million at December 31, 20202023 and 2019,2022, respectively. All foreign office time deposits were in denominations of $250,000 or more and totaled $66$13 million and $91$51 million at December 31, 20202023 and 2019,2022, respectively.
NOTE 11 - SHORT-TERM BORROWINGS
Federal funds purchased and securities sold under agreements to repurchase generally mature within one to four days from the transaction date. Other short-term borrowings, which may consist of borrowed securities and short-term notes, generally mature within one to 120 days from the transaction date.
At December 31, 2020, Comerica2023 and 2022, other short-term borrowings primarily consisted of advances from the FHLB of Dallas, Texas, which provides short- and long-term funding to its members through advances collateralized by real estate-related loans, certain government agency-backed securities and other eligible assets. Actual borrowing capacity is contingent on the amount of collateral pledged to the FHLB. At December 31, 2023, the Bank (the Bank), a wholly-owned subsidiary of the Corporation, had pledged real estate-related loans totaling $18.0$21.9 billion and investment securities totaling $6.6 billion to the FHLB, which provided for up to $14.2$17.1 billion of available collateralized borrowing with the FRB.FHLB. Of the $17.1 billion total capacity at FHLB at December 31, 2023, $3.6 billion in short-term advances and $4.0 billion in medium- and long-term advances were outstanding, leaving $9.5 billion available at the FHLB at December 31, 2023.
At December 31, 2023, the Bank had pledged loans totaling $24.6 billion and investment securities totaling $7.7 billion to the FRB, which provided for up to $21.0 billion and $9.3 billion of collateralized borrowing through the discount window and BTFP program, respectively. The Bank did not rely on the BTFP facility as a funding source, except to perform an operational test at the onset, and does not plan to use the facility for the remainder of its existence. Total available collateralized borrowings with the FRB was $30.3 billion at December 31, 2023.
The following table provides a summary of short-term borrowings.
(dollar amounts in millions)Federal Funds PurchasedOther
Short-term
Borrowings
December 31, 2023
Amount outstanding at year-end$15 $3,550 
Weighted average interest rate at year-end5.30 %5.74 %
Maximum month-end balance during the year$19 $11,000 
Average balance outstanding during the year29 7,189 
Weighted average interest rate during the year4.77 %5.41 %
December 31, 2022
Amount outstanding at year-end$11 $3,200 
Weighted average interest rate at year-end4.32 %4.54 %
Maximum month-end balance during the year$1,106 $3,200 
Average balance outstanding during the year82 354 
Weighted average interest rate during the year3.28 %4.08 %
December 31, 2021
Amount outstanding at year-end$— $— 
Weighted average interest rate at year-end— %— %
Maximum month-end balance during the year$2 $— 
Average balance outstanding during the year2 — 
Weighted average interest rate during the year0.06 %— %
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The following table provides a summary of short-term borrowings.
(dollar amounts in millions)Federal Funds Purchased
and Securities Sold Under
Agreements to Repurchase		Other
Short-term
Borrowings
December 31, 2020
Amount outstanding at year-end$0 $0 
Weighted average interest rate at year-end0 %0 %
Maximum month-end balance during the year$1,513 $1,250 
Average balance outstanding during the year30 284 
Weighted average interest rate during the year0.97 %0.25 %
December 31, 2019
Amount outstanding at year-end$71 $0 
Weighted average interest rate at year-end1.50 %0 %
Maximum month-end balance during the year$835 $1,200 
Average balance outstanding during the year113 256 
Weighted average interest rate during the year2.28 %2.44 %
December 31, 2018
Amount outstanding at year-end$44 $0 
Weighted average interest rate at year-end2.39 %0 %
Maximum month-end balance during the year$182 $250 
Average balance outstanding during the year59 3 
Weighted average interest rate during the year1.91 %1.75 %
NOTE 12 - MEDIUM- AND LONG-TERM DEBT
Medium- and long-term debt is summarized as follows:
(in millions)(in millions)
December 31December 3120202019
December 31
December 3120232022
Parent companyParent company
Subordinated notes:Subordinated notes:
Subordinated notes:
Subordinated notes:
3.80% subordinated notes due 2026 (a)
3.80% subordinated notes due 2026 (a)
3.80% subordinated notes due 2026 (a)3.80% subordinated notes due 2026 (a)$280 $264 
Medium- and long-term notes:Medium- and long-term notes:
3.70% notes due 2023 (a)905 884 
3.70% notes due July 2023
3.70% notes due July 2023
3.70% notes due July 2023
4.00% notes due 2029 (a)4.00% notes due 2029 (a)633 587 
Total medium- and long-term notesTotal medium- and long-term notes1,538 1,471 
Total parent companyTotal parent company1,818 1,735 
SubsidiariesSubsidiaries
Subordinated notes:
Subordinated notes:
Subordinated notes:Subordinated notes:
4.00% subordinated notes due 2025 (a)4.00% subordinated notes due 2025 (a)380 360 
4.00% subordinated notes due 2025 (a)
4.00% subordinated notes due 2025 (a)
7.875% subordinated notes due 2026 (a)7.875% subordinated notes due 2026 (a)207 202 
5.332% subordinated notes due 2033 (a)
Total subordinated notesTotal subordinated notes587 562 
Medium- and long-term notes:Medium- and long-term notes:
2.50% notes due 2020 (a)0 674 
2.50% notes due 2024 (a)
2.50% notes due 2024 (a)
2.50% notes due 2024 (a)2.50% notes due 2024 (a)523 498 
Total medium- and long-term notesTotal medium- and long-term notes523 1,172 
Federal Home Loan Bank (FHLB) advances:Federal Home Loan Bank (FHLB) advances:
Floating-rate based on FHLB auction rate due 2026 (b)2,800 2,800 
Floating-rate based on FHLB auction rate due 20280 1,000 
5.07% advance due 2025 (a)
5.07% advance due 2025 (a)
5.07% advance due 2025 (a)
4.79% advance due 2026 (a)
4.49% advance due 2027 (a)
4.49% advance due 2028 (a)
Total FHLB advancesTotal FHLB advances2,800 3,800 
Total subsidiariesTotal subsidiaries3,910 5,534 
Total medium- and long-term debtTotal medium- and long-term debt$5,728 $7,269 
(a)The fixed interest rates on these notes have been swapped to a variable rate and designated in a hedging relationship. Accordingly, carrying value has been adjusted to reflect the change in the fair value of the debt as a result of changes in the benchmark rate.
(b)Advances totaling $2.8 billion paid in full in first quarter of 2021.
Subordinated notes with remaining maturities greater than one year qualify as Tier 2 capital.
In first quarter 2023, the Bank borrowed $4.0 billion of fixed-rate FHLB advances due between 2025 and 2028. Interest is due monthly, with principal due at maturity. Additionally, the Bank entered into fair value fixed-to-floating rate swaps in which the Bank received a weighted-average fixed rate of 3.79% and pays a floating rate based on SOFR. See Note 11 - Short-Term Borrowings for additional information about FHLB advances.
In January 2024, the Corporation issued $1.0 billion of fixed-to-floating rate senior notes due in 2030, with a rate of 5.982% for the first five years. The rate on the senior notes will reset on January 30, 2029 to SOFR plus 215.5 basis points until called or matured. Additionally, the Corporation entered into two fair value fixed-to-floating rate swaps in which the Corporation received a weighted average fixed rate of 3.77% and will pay a floating rate based on SOFR for the first five years.
Unamortized debt issuance costs deducted from the carrying amount of medium- and long-term debt totaled $6 million and $9 million at December 31, 2023 and 2022, respectively.
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The Bank, a wholly-owned subsidiary of the Corporation, is a member of the FHLB, which provides short- and long-term funding to its members through advances collateralized by real-estate related assets. The interest rate on the FHLB advances resets between four and eight weeks, based on the FHLB auction rate. At December 31, 2020, the weighted-average rate on the FHLB advances was 0.22%. Each note may be prepaid in full, without penalty, at each scheduled reset date. Borrowing capacity is contingent upon the amount of collateral available to be pledged to the FHLB. At December 31, 2020, $19.5 billion of real estate-related loans and $4.4 billion of investment securities were pledged to the FHLB as collateral for outstanding long-term advances of $2.8 billion with an additional capacity for potential future borrowings of approximately $12.0 billion.
Unamortized debt issuance costs deducted from the carrying amount of medium- and long-term debt totaled $10 million and $12 million at December 31, 2020 and 2019, respectively.
At December 31, 2020,2023, the principal maturities of medium- and long-term debt were as follows:
(in millions)(in millions) (in millions) 
Years Ending December 31Years Ending December 31
  
Years Ending December 31
  
2021$0 
20220 
2023850 
20242024500 
20252025350 
2026
2027
2028
ThereafterThereafter3,750 
TotalTotal$5,450 
NOTE 13 - SHAREHOLDERS’ EQUITY
RepurchasesIn 2022 and 2021, repurchases of common stock under the share repurchase program initially authorized in 2010 by the Board of Directors of the Corporation totaled 3.2377 thousand shares at an average price paid of $92.61 per share and 9.5 million shares at an average price paid of $58.55 in 2020, 18.6 million shares at an average price paid of $73.60$75.82 per share, in 2019 and 14.8 million shares at an average price paidrespectively. There were no repurchases of $89.21 per share in 2018.
In March 2020, ascommon stock under the economic climate grew increasingly uncertain, the Corporation temporarily suspended its share repurchase program with a focus on deploying capital to meet customers' growing financial requirements. The Corporation will continue to assess the resumption of repurchases subject to various factors including financial performance, capital needs and market conditions. Prior to suspension of the program, the Corporation repurchased $189 million under the equity repurchase program during the year ended December 31, 2020.in 2023. There is no expiration date for the Corporation's share repurchase program.
At December 31, 2020,2023, the Corporation had 4.64.3 million shares of common stock reserved for stock option exercises and restricted stock unit vesting and 176,000 shares of restricted stock outstanding to employees and directors under share-based compensation plans.vesting.
In May 2020, the Corporation issued and sold 400,000 depositary shares, each representing a 1/100th ownership interest in a share of 5.625% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, without par value, with a liquidation preference of $100,000 per share (equivalent of 1,000 per depositary share). Holders of the depositary shares will be entitled to all proportional rights and preferences of the Series A preferred stock (including dividend, voting, redemption and liquidation rights). The $400 million issuance yielded $394 million in proceeds net of underwriting discounts and offering expenses. Dividends on the Series A preferred stock accrue on a non-cumulative basis and are payable in arrears when, as and if authorized by the Corporation’s Board of Directors or a duly authorized committee of the Board and declared by the Corporation, on the first day of January, April, July and October of each year, and commenced on October 1, 2020. Under the terms of the Series A preferred stock, the ability of the Corporation to pay dividends on, make distributions with respect to, or to repurchase, redeem or acquire its common stock or any other stock ranking on parity with or junior to the Series A preferred stock, is subject to restrictions in the event that the Corporation does not declare and either pay or set aside a sum sufficient for payment of dividends on the Series A preferred stock for the immediately preceding dividend period. The Series A preferred stock is perpetual and has no maturity date, but is redeemable by the Corporation at specified times subject to regulatory considerations.
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NOTE 14 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)LOSS
The following table presents a reconciliation of the changes in the components of accumulated other comprehensive income (loss)loss and details the components of other comprehensive income (loss) for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, including the amount of income tax expense (benefit) allocated to each component of other comprehensive income (loss).
(in millions)(in millions)
Years Ended December 31Years Ended December 31202020192018
Years Ended December 31
Years Ended December 31202320222021
Accumulated net unrealized gains (losses) on investment securities:Accumulated net unrealized gains (losses) on investment securities:
Balance at beginning of period, net of taxBalance at beginning of period, net of tax$65 $(138)$(101)
Cumulative effect of change in accounting principle0 0 1 
Net unrealized holding gains (losses) arising during the period191 257 (69)
Balance at beginning of period, net of tax
Balance at beginning of period, net of tax
Net unrealized gains (losses) arising during the period
Net unrealized gains (losses) arising during the period
Net unrealized gains (losses) arising during the period
Less: Provision (benefit) for income taxesLess: Provision (benefit) for income taxes45 60 (16)
Net unrealized holding gains (losses) arising during the period, net of tax146 197 (53)
Less:
Net realized losses included in net securities losses0 (8)(20)
Less: Benefit for income taxes0 (2)(5)
Reclassification adjustment for net securities losses included in net income, net of tax0 (6)(15)
Change in net unrealized gains (losses) on investment securities, net of tax
Change in net unrealized gains (losses) on investment securities, net of tax
Change in net unrealized gains (losses) on investment securities, net of taxChange in net unrealized gains (losses) on investment securities, net of tax146 203 (38)
Balance at end of period, net of taxBalance at end of period, net of tax$211 $65 $(138)
Accumulated net gains on cash flow hedges:
Balance at end of period, net of tax
Balance at end of period, net of tax
Accumulated net (losses) gains on cash flow hedges:
Balance at beginning of period, net of taxBalance at beginning of period, net of tax$34 $0 $0 
Net cash flow hedge gains arising during the period229 44 0 
Less: Provision for income taxes56 10 0 
Change in net cash flow hedge gains arising during the period, net of tax173 34 0 
Balance at beginning of period, net of tax
Balance at beginning of period, net of tax
Net cash flow hedge gains (losses) arising during the period
Reclassification of loss related to de-designation of derivatives to other noninterest income
Less: Benefit for income taxes
Change in net cash flow hedge losses arising during the period, net of tax
Less:Less:
Net cash flow hedge gains recognized in interest and fees on loans70 0 0 
Less: Provision for income taxes18 0 0 
Reclassification adjustment for net cash flow gains included in net income, net of tax52 0 0 
Change in net cash flow hedge gains, net of tax121 34 0 
Net cash flow (losses) gains included in interest and fees on loans
Net cash flow (losses) gains included in interest and fees on loans
Net cash flow (losses) gains included in interest and fees on loans
Amortization of unrealized losses related to de-designated derivatives included in interest and fees on loans
Less: (Benefit) provision for income taxes
Reclassification adjustment for net cash flow hedge (losses) gains included in net income, net of tax
Change in net cash flow hedge gains (losses), net of tax
Balance at end of period, net of tax (a)Balance at end of period, net of tax (a)$155 $34 $0 
Accumulated defined benefit pension and other postretirement plans adjustment:Accumulated defined benefit pension and other postretirement plans adjustment:
Balance at beginning of period, net of taxBalance at beginning of period, net of tax$(334)$(471)$(350)
Balance at beginning of period, net of tax
Balance at beginning of period, net of tax
Actuarial gain (loss) arising during the periodActuarial gain (loss) arising during the period142 163 (191)
Prior service credit arising during the period
Net defined benefit pension and other postretirement plans adjustment arising during the period
Less: Provision (benefit) for income taxesLess: Provision (benefit) for income taxes34 38 (44)
Net defined benefit pension and other postretirement plans adjustment arising during the period, net of taxNet defined benefit pension and other postretirement plans adjustment arising during the period, net of tax108 125 (147)
Amounts recognized in other noninterest expenses:Amounts recognized in other noninterest expenses:
Amortization of actuarial net lossAmortization of actuarial net loss63 42 61 
Amortization of actuarial net loss
Amortization of actuarial net loss
Amortization of prior service creditAmortization of prior service credit(27)(27)(27)
Total amounts recognized in other noninterest expensesTotal amounts recognized in other noninterest expenses36 15 34 
Total amounts recognized in other noninterest expenses
Total amounts recognized in other noninterest expenses
Less: Provision for income taxesLess: Provision for income taxes8 3 8 
Adjustment for amounts recognized as components of net periodic benefit cost during the period, net of tax28 12 26 
Adjustment for amounts recognized as components of net periodic benefit credit during the period, net of tax
Change in defined benefit pension and other postretirement plans adjustment, net of taxChange in defined benefit pension and other postretirement plans adjustment, net of tax136 137 (121)
Balance at end of period, net of taxBalance at end of period, net of tax$(198)$(334)$(471)
Total accumulated other comprehensive income (loss) at end of period, net of tax$168 $(235)$(609)
Total accumulated other comprehensive loss at end of period, net of tax
Total accumulated other comprehensive loss at end of period, net of tax
Total accumulated other comprehensive loss at end of period, net of tax
(a)The Corporation expects to reclassify $72$383 million of net gains,losses, net of tax, from accumulated other comprehensive incomeloss to earnings over the next twelve months if interest yield curves and notional amounts remain at December 31, 20202023 levels.
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Comerica Incorporated and Subsidiaries

NOTE 15 - NET INCOME PER COMMON SHARE
Basic and diluted net income per common share are presented in the following table.
(in millions, except per share data)(in millions, except per share data)
Years Ended December 31Years Ended December 31202020192018
Years Ended December 31
Years Ended December 31202320222021
Basic and dilutedBasic and diluted
Net incomeNet income$474 $1,198 $1,235 
Net income
Net income
Less:Less:
Income allocated to participating securities
Income allocated to participating securities
Income allocated to participating securitiesIncome allocated to participating securities2 7 8 
Preferred stock dividendsPreferred stock dividends13 0 0 
Net income attributable to common sharesNet income attributable to common shares$459 $1,191 $1,227 
Basic average common sharesBasic average common shares139 150 168 
Basic net income per common shareBasic net income per common share$3.29 $7.95 $7.31 
Basic average common sharesBasic average common shares139 150 168 
Dilutive common stock equivalents:Dilutive common stock equivalents:
Net effect of the assumed exercise of stock awardsNet effect of the assumed exercise of stock awards1 1 2 
Net effect of the assumed exercise of warrants0 0 1 
Net effect of the assumed exercise of stock awards
Net effect of the assumed exercise of stock awards
Diluted average common shares
Diluted average common shares
Diluted average common sharesDiluted average common shares140 151 171 
Diluted net income per common shareDiluted net income per common share$3.27 $7.87 $7.20 
Declared dividends on preferred stock are excluded from net income attributable to common shares. Refer to Note 13 for further information on preferred stock.
The following average shares related to outstanding options to purchase shares of common stock were not included in the computation of diluted net income per common share because the options were anti-dilutive for the period.
(average outstanding options in thousands)
Years Ended December 31202020192018
Average outstanding options1,498543193
Range of exercise prices$49.20 - $95.25$67.53 - $95.25$95.25

(average outstanding options in thousands)
Years Ended December 31202320222021
Average outstanding options1,631543438
Range of exercise prices$49.20 - $95.25$70.18 - $95.25$79.01 - $95.25
NOTE 16 - SHARE-BASED COMPENSATION
Share-based compensation expense is charged to salaries and benefits expense on the Consolidated Statements of Income. The components oftotal share-based compensation expense for all share-based compensation plans and related tax benefits are as follows:
(in millions)(in millions)
Years Ended December 31Years Ended December 31202020192018
Years Ended December 31
Years Ended December 31202320222021
Total share-based compensation expenseTotal share-based compensation expense$24 $39 $48 
Related tax benefits recognized in net incomeRelated tax benefits recognized in net income$6 $9 $11 
The following table summarizes unrecognized compensation expense information for all share-based plans.
(dollar amounts in millions)December 31, 20202023
Total unrecognized share-based compensation expense$3243 
Weighted-average expected recognition period (in years)2.32.1 
The Corporation has share-based compensation plans under which it awards shares of restricted stock units to executive officers, directors and key personnel and stock options to executive officers and key personnel of the Corporation and its subsidiaries. Additionally, the Corporation has awarded restricted stock to executive officers and key personnel under a previous share-based compensation plan that remain unvested. Restricted stock and restricted stock units fully vest after a period ranging from three years to five years, and stock options fully vest after four years. A majority of share-based compensation awards include a retirement eligibility clause where qualified employees are exempt from the service requirements of the award. This generally results in the recognition of compensation expense at the grant date for retirement eligible employees. The maturity of each option is determined at the date of grant; however, no options may be exercised later than ten years from the date of grant. The options may have restrictions regarding exercisability. The plans provide for a grant of up to 6.17.7 million common shares, plus shares under certain plans that are
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Comerica Incorporated and Subsidiaries

under certain plans that are forfeited, expire or are canceled, which become available for re-grant. At December 31, 2020,2023, over 4.03.7 million shares were available for grant.
The Corporation used a binomial model to value stock options granted in the periods presented. Option valuation models require several inputs, including the expected stock price volatility, and changes in input assumptions can materially affect the fair value estimates. The model used may not necessarily provide a reliable single measure of the fair value of stock options. The risk-free interest rate assumption used in the binomial option-pricing model as outlined in the table below was based on the federal ten-year treasury interest rate. The expected dividend yield was based on the historical and projected long-term dividend yield patterns of the Corporation’s common shares. Expected volatility assumptions considered both the historical volatility of the Corporation’s common stock over a ten-year period and implied volatility based on actively traded options on the Corporation’s common stock with pricing terms and trade dates similar to the stock options granted. Expected option life was based on historical exercise activity over the contractual term of the option grant (ten years), excluding certain forced transactions.
The estimated weighted-average grant-date fair value per option and the underlying binomial option-pricing model assumptions are summarized in the following table:
Years Ended December 31Years Ended December 31202020192018Years Ended December 31202320222021
Weighted-average grant-date fair value per optionWeighted-average grant-date fair value per option$13.03 $22.27 $30.32 
Weighted-average assumptions:Weighted-average assumptions:
Risk-free interest ratesRisk-free interest rates1.65 %2.74 %2.63 %
Risk-free interest rates
Risk-free interest rates3.46 %1.78 %1.05 %
Expected dividend yieldExpected dividend yield4.14 3.00 3.00 
Expected volatility factors of the market price of
Comerica common stock		27 30 36 
Volatility
Expected option life (in years)Expected option life (in years)8.4 7.6 7.4 
A summary of the Corporation’s stock option activity and related information for the year ended December 31, 20202023 follows:
 Weighted-Average   Weighted-Average 
Number of
Options
(in thousands)		Exercise Price
per Share		Remaining
Contractual
Term (in years)		Aggregate
Intrinsic Value
(in millions)

Number of
Options
(in thousands)		Exercise Price
per Share		Remaining
Contractual
Term (in years)		Aggregate
Intrinsic Value
(in millions)
Outstanding-January 1, 20202,680 $49.58 
Outstanding-January 1, 2023
Granted
Granted
GrantedGranted514 61.75 
Forfeited or expiredForfeited or expired(40)67.20 
Forfeited or expired
Forfeited or expired
ExercisedExercised(275)35.91 
Outstanding-December 31, 20202,879 52.81 5.3 $30 
Exercised
Exercised
Outstanding-December 31, 2023
Outstanding-December 31, 2023
Outstanding-December 31, 2023
Exercisable-December 31, 20201,992 $45.20 4.0 $29 
Exercisable-December 31, 2023
Exercisable-December 31, 2023
Exercisable-December 31, 2023
The aggregate intrinsic value of outstanding options shown in the table above represents the total pretax intrinsic value at December 31, 2020,2023, based on the Corporation’s closing stock price of $55.86$55.81 at December 31, 2020.2023.
The total intrinsic value of stock options exercised was $6$4 million, $20$17 million and $81$29 million for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively.
A summary of the Corporation’sThere was no restricted stock award activity and related information for the year endedin 2023. The plan was fully vested as of December 31, 2020 follows:
Number of
Shares
(in thousands)		Weighted-Average
Grant-Date Fair 
Value per Share
Outstanding-January 1, 2020458 $48.64 
Forfeited(14)49.09 
Vested(268)48.48 
Outstanding-December 31, 2020176 $48.85 
2022. The total fair value of restricted stock awards that fully vested in 2022 and 2021 was $17 million, $31$4 million and $32$8 million, for the years ended December 31, 2020, 2019 and 2018, respectively.
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Comerica Incorporated and Subsidiaries

A summary of the Corporation's restricted stock unit activity and related information for the year ended December 31, 20202023 follows:
Service-Based UnitsPerformance-Based Units
Number of
Units
(in thousands)		Weighted-Average
Grant-Date Fair 
Value per Share		Number of
Units
(in thousands)		Weighted-Average
Grant-Date Fair 
Value per Share
Outstanding-January 1, 2020578 $72.34 543 $80.22 
Service-Based UnitsService-Based UnitsPerformance-Based Units
Number of
Units
(in thousands)		Number of
Units
(in thousands)		Weighted-Average
Grant-Date Fair 
Value per Share		Number of
Units
(in thousands)		Weighted-Average
Grant-Date Fair 
Value per Share
Outstanding-January 1, 2023
GrantedGranted491 49.34 374 59.74 
ForfeitedForfeited(18)76.27 (14)77.77 
Forfeited
Forfeited
VestedVested(3)67.49 (213)66.26 
Outstanding-December 31, 20201,048 61.52 690 73.48 
Outstanding-December 31, 2023
The total fair value of restricted stock units that fully vested was $12$52 million, $37$19 million and $24$21 million for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively.
The Corporation expects to satisfy the exercise of stock options and the vesting of restricted stock units and future grants of restricted stock by issuing shares of common stock out of treasury. At December 31, 2020,2023, the Corporation held 8996 million shares in treasury.
For further information on the Corporation’s share-based compensation plans, refer to Note 1.
NOTE 17 - EMPLOYEE BENEFIT PLANS
Defined Benefit Pension and Postretirement Benefit Plans
The Corporation has a qualified and non-qualified defined benefit pension plan. In October 2016, the Corporation modified its defined benefit pension plans to freeze final average pay benefits as of December 31, 2016, other than for participants who were age 60 or older as of December 31, 2016, and added a cash balance plan provision effective January 1, 2017. Active pension plan participants 60 years or older as of December 31, 2016 receive the greater of the final average pay formula or the frozen final average pay benefit as of December 31, 2016 plus the cash balance benefit earned after January 1, 2017. Employees participating in the retirement account plan as of December 31, 2016 were eligible to participate in the cash balance pension plan effective January 1, 2017. Benefits earned under the cash balance pension formula, in the form of an account balance, include contribution credits based on eligible pay earned each month, age and years of service and monthly interest credits based on the 30-year Treasury rate.
The Corporation’s postretirement benefit plan provides postretirement health care and life insurance benefits for retirees as of December 31, 1992. The plan also provides certain postretirement health care and life insurance benefits for a limited number of retirees who retired prior to January 1, 2000. For all other employees hired prior to January 1, 2000, a nominal benefit is provided. Employees hired on or after January 1, 2000 and prior to January 1, 2007 are eligible to participate in the plan on a full contributory basis until Medicare-eligible based on age and service. Employees hired on or after January 1, 2007 are not eligible to participate in the plan. The Corporation funds the pre-1992 retiree plan benefits with bank-owned life insurance. Effective January 1, 2022, the plan moved from a self-insured plan to the Medicare and pre-65 individual marketplace with a funded Health Reimbursement Arrangement account for those with subsidized coverage. This change did not have a material impact on the Corporation's consolidated financial condition, results of operations or cash flow.
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Comerica Incorporated and Subsidiaries

The following table sets forth reconciliations of plan assets and the projected benefit obligation, the weighted-average assumptions used to determine year-end benefit obligations, and the amounts recognized in accumulated other comprehensive income (loss)loss for the Corporation’s defined benefit pension plans and postretirement benefit plan at December 31, 20202023 and 2019.2022. The Corporation used a measurement date of December 31, 20202023 for these plans.
Defined Benefit Pension Plans
QualifiedNon-QualifiedPostretirement Benefit Plan
Defined Benefit Pension Plans
Qualified
Qualified
QualifiedNon-QualifiedPostretirement Benefit Plan
(dollar amounts in millions)(dollar amounts in millions)202020192020201920202019(dollar amounts in millions)202320222023202220232022
Change in fair value of plan assets:Change in fair value of plan assets:
Fair value of plan assets at January 1Fair value of plan assets at January 1$2,933 $2,458 $— $— $57 $56 
Fair value of plan assets at January 1
Fair value of plan assets at January 1
Actual return on plan assetsActual return on plan assets537 579 — — 3 5 
Plan participants' contributions0 0 — — 1 1 
Benefits paid
Benefits paid
Benefits paidBenefits paid(120)(104)— — (4)(5)
Fair value of plan assets at December 31Fair value of plan assets at December 31$3,350 $2,933 $— $— $57 $57 
Change in projected benefit obligation:Change in projected benefit obligation:
Projected benefit obligation at January 1Projected benefit obligation at January 1$2,131 $1,901 $235 $211 $48 $46 
Projected benefit obligation at January 1
Projected benefit obligation at January 1
Service costService cost32 31 1 3 0 0 
Interest costInterest cost70 80 8 9 1 2 
Actuarial loss (gain)214 223 22 25 (11)4 
Plan participants' contributions0 0 0 0 1 1 
Actuarial gain (loss)
Benefits paid
Benefits paid
Benefits paidBenefits paid(120)(104)(14)(13)(4)(5)
Projected benefit obligation at December 31
Projected benefit obligation at December 31
Projected benefit obligation at December 31Projected benefit obligation at December 31$2,327 $2,131 $252 $235 $35 $48 
Accumulated benefit obligationAccumulated benefit obligation$2,312 $2,121 $251 $234 $35 $48 
Funded status at December 31 (a) (b)Funded status at December 31 (a) (b)$1,023 $802 $(252)$(235)$22 $9 
Weighted-average assumptions used:Weighted-average assumptions used:
Discount rateDiscount rate2.71 %3.43 %2.71 %3.43 %2.43 %3.26 %
Discount rate
Discount rate5.33 %5.60 %5.33 %5.60 %5.43 %5.71 %
Rate of compensation increaseRate of compensation increase4.00 4.00 4.00 4.00 n/an/aRate of compensation increase4.50 4.25 4.25 4.50 4.50 4.25 4.25 n/an/an/a
Interest crediting rateInterest crediting rate3.79 - 5.003.79 - 5.003.79 - 5.003.79 - 5.00n/an/aInterest crediting rate4.66 - 5.253.99 - 5.254.66 - 5.253.99 - 5.25n/an/a
Healthcare cost trend rate:
Cost trend rate assumed for next yearn/an/an/an/a6.00 6.25 
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)n/an/an/an/a4.50 4.50 
Year when rate reaches the ultimate trend raten/an/an/an/a20272027
Amounts recognized in accumulated other comprehensive income (loss) before income taxes:
Amounts recognized in accumulated other comprehensive loss before income taxes:
Net actuarial loss
Net actuarial loss
Net actuarial lossNet actuarial loss$(257)$(463)$(106)$(94)$(9)$(20)
Prior service creditPrior service credit103 121 17 26 1 1 
Balance at December 31Balance at December 31$(154)$(342)$(89)$(68)$(8)$(19)
(a)Based on projected benefit obligation for defined benefit pension plans and accumulated benefit obligation for postretirement benefit plan.
(b)The Corporation recognizes the overfunded and underfunded status of the plans in accrued income and other assets and accrued expenses and other liabilities, respectively, on the Consolidated Balance Sheets.
n/a - not applicable
Because the non-qualified defined benefit pension plan has no assets, the accumulated benefit obligation exceeded the fair value of plan assets at December 31, 20202023 and December 31, 2019.2022.
The following table details the changes in plan assets and benefit obligations recognized in other comprehensive income for(loss) for the year ended December 31, 2020.2023.
Defined Benefit Pension Plans 
Defined Benefit Pension PlansDefined Benefit Pension Plans 
(in millions)(in millions)QualifiedNon-QualifiedPostretirement Benefit PlanTotal(in millions)QualifiedNon-QualifiedPostretirement Benefit PlanTotal
Actuarial gain (loss) arising during the periodActuarial gain (loss) arising during the period$153 $(22)$11 $142 
Amortization of net actuarial lossAmortization of net actuarial loss54 9 0 63 
Amortization of prior service creditAmortization of prior service credit(19)(8)0 (27)
Total recognized in other comprehensive income$188 $(21)$11 $178 
Total recognized in other comprehensive income (loss)
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Comerica Incorporated and Subsidiaries

Components of net periodic defined benefit (credit) cost and postretirement benefit credit, the actual return on plan assets and the weighted-average assumptions used were as follows:
Defined Benefit Pension Plans Defined Benefit Pension Plans
(dollar amounts in millions)(dollar amounts in millions)QualifiedNon-Qualified(dollar amounts in millions)QualifiedNon-Qualified
Years Ended December 31Years Ended December 31202020192018202020192018Years Ended December 31202320222021202320222021
Service cost (a)Service cost (a)$32 $31 $29 $1 $3 $2 
Other components of net benefit (credit) cost:Other components of net benefit (credit) cost:
Interest costInterest cost70 80 75 8 9 8 
Interest cost
Interest cost
Expected return on plan assetsExpected return on plan assets(171)(166)(165)0 0 0 
Amortization of prior service creditAmortization of prior service credit(19)(19)(19)(8)(8)(8)
Amortization of net loss54 34 51 9 7 9 
Amortization of actuarial net loss
Total other components of net benefit (credit) cost (b)Total other components of net benefit (credit) cost (b)(66)(71)(58)9 8 9 
Net periodic defined benefit (credit) costNet periodic defined benefit (credit) cost$(34)$(40)$(29)$10 $11 $11 
Actual return on plan assetsActual return on plan assets$537 $579 $(167)n/an/an/aActual return on plan assets$338 $$(777)$$291 n/an/an/a
Actual rate of return on plan assetsActual rate of return on plan assets18.72 %24.07 %(6.21)%n/an/an/aActual rate of return on plan assets13.91 %(23.02)%8.92 %n/an/a
Weighted-average assumptions used:Weighted-average assumptions used:
Discount rateDiscount rate3.43 %4.37 %3.74 %3.43 %4.37 %3.74 %
Discount rate
Discount rate5.60 %2.96 %2.71 %5.60 %2.96 %2.71 %
Expected long-term return on plan assetsExpected long-term return on plan assets6.50 6.50 6.50 n/an/an/aExpected long-term return on plan assets6.50 6.50 6.50 6.50 6.50 n/an/an/a
Rate of compensation increaseRate of compensation increase4.00 4.00 3.75 4.00 4.00 3.75 
(a)Included in salaries and benefits expense on the Consolidated Statements of Income.
(b)Included in other noninterest expenses on the Consolidated Statements of Income.
n/a - not applicable
(dollar amounts in millions)(dollar amounts in millions)Postretirement Benefit Plan(dollar amounts in millions)Postretirement Benefit Plan
Years Ended December 31Years Ended December 31202020192018Years Ended December 31202320222021
Other components of net benefit credit:Other components of net benefit credit:
Interest costInterest cost$1 $2 $2 
Interest cost
Interest cost
Expected return on plan assetsExpected return on plan assets(2)(3)(3)
Amortization of net loss0 1 1 
Net periodic postretirement benefit credit
Net periodic postretirement benefit credit
Net periodic postretirement benefit creditNet periodic postretirement benefit credit$(1)$0 $0 
Actual return on plan assetsActual return on plan assets$3 $5 $(1)
Actual rate of return on plan assetsActual rate of return on plan assets6.00 %9.14 %(2.05)%Actual rate of return on plan assets2.61 %(8.24)%(2.25)%
Weighted-average assumptions used:Weighted-average assumptions used:
Discount rateDiscount rate3.26%4.26 %3.55 %
Discount rate
Discount rate5.71 %2.79 %2.43 %
Expected long-term return on plan assetsExpected long-term return on plan assets5.005.00 5.00 
Healthcare cost trend rate:
Healthcare cost trend rate (a):
Cost trend rate assumed
Cost trend rate assumed
Cost trend rate assumedCost trend rate assumed6.256.50 6.50 n/an/a6.00
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)4.504.50 4.50 Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)n/an/a4.50
Year that the rate reaches the ultimate trend rateYear that the rate reaches the ultimate trend rate202720272027Year that the rate reaches the ultimate trend raten/an/a2027
(a)Beginning January 1, 2022, the healthcare cost trend assumption is no longer a relevant assumption due to the change from a self-insured plan to the Medicare and pre-65 individual marketplace with a funded Health Reimbursement Arrangement account.
n/a - not applicable
The expected long-term rate of return of plan assets is the average rate of return expected to be realized on funds invested or expected to be invested over the life of the plan, which has an estimated duration of approximately 129 years as of December 31, 2020.2023. The expected long-term rate of return on plan assets is set after considering both long-term returns in the general market and long-term returns experienced by the assets in the plan. The returns on the various asset categories are blended to derive onean equity and a fixed income long-term rate of return. The Corporation reviews its pension plan assumptions on an annual basis with its actuarial consultants to determine if assumptions are reasonable and adjusts the assumptions to reflect changes in future expectations.
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Comerica Incorporated and Subsidiaries

Plan Assets
The Corporation’s overall investment goals for the qualified defined benefit pension plan are to maintain a portfolio of assets of appropriate liquidity and diversification; to generate investment returns (net of all operating costs) that are reasonably anticipated to maintain the plan’s fully funded status or to reduce a funding deficit, after taking into account various factors, including reasonably anticipated future contributions, expense and the interest rate sensitivity of the plan’s assets relative to that of the plan’s liabilities; and to generate investment returns (net of all operating costs) that meet or exceed a customized benchmark as defined in the plan's investment policy. Derivative instrumentsinstruments are permissible for hedging and transactional efficiency, but only to the extent that the derivative use enhances the efficient execution of the plan’s investment policy. The plan does not directly invest in securities issued by the Corporation and its subsidiaries. The Corporation’s target allocations for plan investments are 35 percent to 45 percent to 55 percent for both equity securities and 55 percent to 65 percent for fixed income, including cash. Equity securities include collective investment and mutual funds and common stock. Fixed income securities include U.S. Treasury and other U.S. government agency securities, mortgage-backed securities, corporate bonds and notes, municipal bonds, collateralized mortgage obligations and money market funds.
Fair Value Measurements
The Corporation’s qualified defined benefit pension plan utilizes fair value measurements to record fair value adjustments and to determine fair value disclosures. The Corporation’s qualified benefit pension plan categorizes investments recorded at fair value into a three-level hierarchy, based on the markets in which the investment are traded and the reliability of the assumptions used to determine fair value. Refer to Note 1 for a description of the three-level hierarchy.
Following is a description of the valuation methodologies and key inputs used to measure the fair value of the Corporation’s qualified defined benefit pension plan investments, including an indication of the level of the fair value hierarchy in which the investments are classified.
Mutual funds
Fair value measurement is based upon the net asset value (NAV) provided by the administrator of the fund. Mutual fund NAVs are quoted in an active market exchange, such as the New York Stock Exchange, and are included in Level 1 of the fair value hierarchy.
Common stock
Fair value measurement is based upon the closing price quoted in an active market exchange, such as the New York Stock Exchange. Level 1 common stock includes domestic and foreign stock and real estate investment trusts.
U.S. Treasury and other U.S. government agency securities
Level 1 securities include U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets. Fair value measurement is based upon quoted prices in an active market exchange, such as the New York Stock Exchange. Level 2 securities include debt securities issued by U.S. government agencies and U.S. government-sponsored entities. The fair value of Level 2 securities is determined using quoted prices of securities with similar characteristics, or pricing models based on observable market data inputs, primarily interest rates and spreads.
Corporate and municipal bonds and notes
Fair value measurement is based upon quoted prices of securities with similar characteristics or pricing models based on observable market data inputs, primarily interest rates, spreads and prepayment information. Level 2 securities include corporate bonds, municipal bonds, foreign bonds and foreign notes.
Mortgage-backed securities
Fair value measurement is based upon independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security's credit rating, prepayment assumptions and other factors, such as credit loss and liquidity assumptions, and are included in Level 2 of the fair value hierarchy.
Private placements
Fair value is measured using the NAV provided by fund management as quoted prices in active markets are not available. Management considers additional discounts to the provided NAV for market and credit risk. Private placements are included in Level 3 of the fair value hierarchy.
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 Collective investment funds
Fair value measurement is based upon the NAV provided by the administrator of the fund as a practical expedient to estimate fair value. There are no unfunded commitments or redemption restrictions on the collective investment funds. The investments are redeemable daily.
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 Fair Values
The fair values of the Corporation’s qualified defined benefit pension plan investments measured at fair value on a recurring basis at December 31, 20202023 and 2019,2022, by asset category and level within the fair value hierarchy, are detailed in the table below.
(in millions)(in millions)TotalLevel 1Level 2Level 3(in millions)TotalLevel 1Level 2Level 3
December 31, 2020
December 31, 2023
Equity securities:
Mutual funds$4 $4 $0 $0 
Common stock1,266 1,266 0 0 
Fixed income securities:
Fixed income securities:
Fixed income securities:Fixed income securities:
U.S. Treasury and other U.S. government agency securitiesU.S. Treasury and other U.S. government agency securities494 492 2 0 
U.S. Treasury and other U.S. government agency securities
U.S. Treasury and other U.S. government agency securities
Corporate and municipal bonds and notesCorporate and municipal bonds and notes861 0 861 0 
Mortgage-backed securities29 0 29 0 
Private placements
Private placements
Private placementsPrivate placements58 0 0 58 
Total investments in the fair value hierarchyTotal investments in the fair value hierarchy2,712 $1,762 $892 $58 
Investments measured at net asset value:Investments measured at net asset value:
Collective investment fundsCollective investment funds637 
Collective investment funds
Collective investment funds
Total investments at fair valueTotal investments at fair value$3,349 
December 31, 2019
Equity securities:
Total investments at fair value
Total investments at fair value
December 31, 2022
December 31, 2022
December 31, 2022
Mutual funds$2 $2 $0 $0 
Common stock1,086 1,086 0 0 
Fixed income securities:Fixed income securities:
Fixed income securities:
Fixed income securities:
U.S. Treasury and other U.S. government agency securities
U.S. Treasury and other U.S. government agency securities
U.S. Treasury and other U.S. government agency securitiesU.S. Treasury and other U.S. government agency securities574 551 23 0 
Corporate and municipal bonds and notesCorporate and municipal bonds and notes734 0 734 0 
Mortgage-backed securitiesMortgage-backed securities27 0 27 0 
Private placementsPrivate placements57 0 0 57 
Private placements
Private placements
Total investments in the fair value hierarchy
Total investments in the fair value hierarchy
Total investments in the fair value hierarchyTotal investments in the fair value hierarchy2,480 $1,639 $784 $57 
Investments measured at net asset value:Investments measured at net asset value:
Collective investment funds Collective investment funds469 
Collective investment funds
Collective investment funds
Total investments at fair valueTotal investments at fair value$2,949 
Total investments at fair value
Total investments at fair value
The table below provides a summary of changes in the Corporation’s qualified defined benefit pension plan’s Level 3 investments measured at fair value on a recurring basis for the years ended December 31, 20202023 and 2019.2022.
Balance at
Beginning
of Period		Balance at
End of Period
Net Gains
Balance at
Beginning
of Period		Balance at
Beginning
of Period		Balance at
End of Period
Net Gains (Losses)
(in millions)(in millions)Balance at
Beginning
of Period		RealizedUnrealizedPurchasesSalesBalance at
End of Period
Year Ended December 31, 2020
(in millions)
(in millions)
Year Ended December 31, 2023
Year Ended December 31, 2023
Year Ended December 31, 2023
Private placementsPrivate placements$57 $1 $3 $57 $(60)$58 
Year Ended December 31, 2019
Private placementsPrivate placements$60 $3 $8 $49 $(63)$57 
Private placements
Year Ended December 31, 2022
Private placements
Private placements
Private placements
There were 0no assets in the non-qualified defined benefit pension plan at December 31, 20202023 and 2019.2022. The postretirement benefit plan is fully invested in bank-owned life insurance policies. The fair value of bank-owned life insurance policies is based on the cash surrender values of the policies as reported by the insurance companies and is classified in Level 2 of the fair value hierarchy.
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Comerica Incorporated and Subsidiaries

Cash Flows
The Corporation currently expects to make 0no employer contributions to the qualified and non-qualified defined benefit pension plans and postretirement benefit plan for the year ended December 31, 2021.2024.
Estimated Future Benefit Payments
(in millions)
Years Ended December 31
Qualified
Defined Benefit
Pension Plan		Non-Qualified
Defined Benefit
Pension Plan		Postretirement
Benefit Plan (a)
2021$147 $14 $4 
2022142 15 4 
2023143 15 3 
2024143 15 3 
2025141 15 3 
2026 - 2030689 75 11 
Estimated Future Benefit Payments
(in millions)
Years Ended December 31
Qualified
Defined Benefit
Pension Plan		Non-Qualified
Defined Benefit
Pension Plan		Postretirement
Benefit Plan (a)
2024$162 $15 $3 
2025140 15 2 
2026144 15 2 
2027142 15 2 
2028143 15 2 
2029 - 2033668 73 6 
(a)Estimated benefit payments in the postretirement benefit plan are net of estimated Medicare subsidies.
Defined Contribution Plans
Substantially all of the Corporation’s employees are eligible to participate in the Corporation’s principal defined contribution plan (a 401(k) plan). Under this plan, the Corporation makes core matching cash contributions of 100 percent of the first 4 percent of qualified earnings contributed by employees (up to the current IRS compensation limit), invested based on employee investment elections. Employee benefits expense included expense for the plan of $24$27 million for the year ended December 31, 2020, $222023 and $24 million for the yearboth years ended December 31, 20192022 and $21 million for the year ended December 31, 2018.2021.
Deferred Compensation Plans
The Corporation offers optional deferred compensation plans under which certain employees and non-employee directors (participants) may make an irrevocable election to defer incentive compensation and/or a portion of base salary until retirement or separation from the Corporation. The participant may direct deferred compensation into one or more deemed investment options. Although not required to do so, the Corporation invests actual funds into the deemed investments as directed by participants, resulting in a deferred compensation asset, recorded in other short-term investments on the Consolidated Balance Sheets that offsets the liability to participants under the plan, recorded in accrued expenses and other liabilities. The earnings from the deferred compensation asset are recorded in interest on short-term investments and other noninterest income and the related change in the liability to participants under the plan is recorded in salaries and benefits expense on the Consolidated Statements of Income.
NOTE 18 - INCOME TAXES AND TAX-RELATED ITEMS
The provision for income taxes is calculated as the sum of income taxes due for the current year and deferred taxes. Income taxes due for the current year are computed by applying federal and state tax statutes to current year taxable income. Deferred taxes arise from temporary differences between the income tax basis and financial accounting basis of assets and liabilities. Tax-related interest and penalties and foreign taxes are then added to the tax provision.
The current and deferred components of the provision for income taxes were as follows:
(in millions)   
December 31202020192018
Current:
Federal$171 $267 $227 
Foreign5 7 10 
State and local30 48 39 
Total current206 322 276 
Deferred:
Federal(79)16 29 
State and local(10)(4)3 
Remeasurement of deferred taxes0 0 (8)
Total deferred(89)12 24 
Total$117 $334 $300 
Income before income taxes of $591 million for the year ended December 31, 2020 included $19 million of foreign-source income.
(in millions)   
December 31202320222021
Current:
Federal$297 $296 $212 
Foreign9 6 5 
State and local49 50 26 
Total current355 352 243 
Deferred:
Federal(83)(24)62 
State and local(9)(3)17 
Total deferred(92)(27)79 
Total$263 $325 $322 
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Comerica Incorporated and Subsidiaries

The Tax Cuts and Jobs Act (the "Act"), enacted onIncome before income taxes of $1.1 billion for the year ended December 22, 2017, reduced the U.S. federal corporate tax rate from 35 percent to 21 percent. The amount recorded related to the remeasurement31, 2023 included $87 million of the Corporation’s deferred tax balance was a reduction of $99 million, including a provisional adjustment of $107 million recognized in 2017 and an $8 million revision to the impact recorded in 2018.foreign taxable income.
The provision for income taxes does not reflect the tax effects of unrealized gains and losses on investment securities available-for-sale, hedging transactions or the change in defined benefit pension and other postretirement plans adjustment included in accumulated other comprehensive income (loss). income. Refer to Note 14 for additional information on accumulated other comprehensive income (loss). income.
A reconciliation of expected income tax expense at the federal statutory rate to the Corporation’s provision for income taxes and effective tax rate follows:
(dollar amounts in millions)202020192018
Years Ended December 31AmountRateAmountRateAmountRate
Tax based on federal statutory rate$124 21.0 %$322 21.0 %$323 21.0 %
State income taxes17 2.8 33 2.2 35 2.3 
Employee stock transactions(1)(0.2)(12)(0.8)(23)(1.5)
Capitalization and recovery positions (a)0 0 0 0 (17)(1.1)
Affordable housing and historic credits(12)(2.0)(11)(0.7)(12)(0.8)
Bank-owned life insurance(10)(1.7)(9)(0.6)(9)(0.6)
Remeasurement of deferred taxes0 0 0 0 (8)(0.5)
FDIC insurance expense7 1.2 5 0.3 8 0.5 
Other changes in unrecognized tax benefits0 0 0 0 4 0.3 
Tax-related interest and penalties(2)(0.3)2 0.1 (3)(0.2)
Other(6)(1.0)4 0.2 2 0.1 
Provision for income taxes$117 19.8 %$334 21.7 %$300 19.5 %
(a)Tax benefits from the review of tax capitalization and recovery positions related to software and fixed assets included in the 2017 tax return.
(dollar amounts in millions)202320222021
Years Ended December 31AmountRateAmountRateAmountRate
Tax based on federal statutory rate$240 21.0 %$310 21.0 %$313 21.0 %
State income taxes35 3.1 36 2.5 35 2.4 
Affordable housing and historic credits(16)(1.4)(13)(0.9)(13)(0.9)
Bank-owned life insurance(10)(0.9)(10)(0.7)(10)(0.6)
FDIC insurance expense15 1.3 6 0.4 5 0.3 
Employee stock transactions(1)(0.1)(3)(0.2)(3)(0.2)
Tax-related interest and penalties(4)(0.4)— — — — 
Other4 0.4 (1)(0.1)(5)(0.4)
Provision for income taxes$263 23.0 %$325 22.0 %$322 21.6 %
The liability for tax-related interest and penalties, included in accrued expenses and other liabilities on the Consolidated Balance Sheets, was $6less than $1 million and $8$5 million at December 31, 20202023 and 2019,2022, respectively. The decrease in tax-related interest and penalties was primarily due to a state settlement received in 2023.
In the ordinary course of business, the Corporation enters into certain transactions that have tax consequences. From time to time, the Internal Revenue Service (IRS) may review and/or challenge specific interpretive tax positions taken by the Corporation with respect to those transactions. The Corporation believes that its tax returns were filed based upon applicable statutes, regulations and case law in effect at the time of the transactions. The IRS or other tax jurisdictions, an administrative authority or a court, if presented with the transactions, could disagree with the Corporation’s interpretation of the tax law.
A reconciliation of the beginning and ending amount of net unrecognized tax benefits follows:
(in millions)202020192018
Balance at January 1$17 $14 $10 
Increases as a result of tax positions taken during a prior period1 4 9 
Increase as a result of tax positions taken during a current period2 0 0 
Decreases related to settlements with tax authorities(1)(1)(4)
Other0 0 (1)
Balance at December 31$19 $17 $14 
The Corporation anticipates it is reasonably possible settlements with tax authorities will result in a $5 million decrease in net unrecognized tax benefits within the next twelve months.
(in millions)202320222021
Balance at January 1$16 $18 $19 
(Decrease) increase as a result of tax positions taken during a prior period— (2)1 
Increase as a result of tax positions taken during the current period1 3 3 
Decreases related to settlements with tax authorities(10)(3)(3)
Reduction as a result of expiration of statute of limitations— — (2)
Balance at December 31$7 $16 $18 
After consideration of the effect of the federal tax benefit available on unrecognized state tax benefits, the total amount of unrecognized tax benefits which, if recognized, would affect the Corporation’s effective tax rate bywas approximately $15$5 million and $14$13 million at December 31, 20202023 and 2019,2022, respectively.
The following tax years for significant jurisdictions remain subject to examination as of December 31, 2020:2023:
JurisdictionTax Years
Federal2017-20192020-2022
New York2018-2022
California2006-2007, 2014-20192020-2022
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Comerica Incorporated and Subsidiaries


Based on current knowledge and probability assessment of various potential outcomes, the Corporation believes current tax reserves are adequate, and the amount of any potential incremental liability arising is not expected to have a material adverse effect on the Corporation’s consolidated financial condition or results of operations. Probabilities and outcomes are reviewed as events unfold, and adjustments to the reserves are made when necessary.

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Comerica Incorporated and Subsidiaries

The principal components of deferred tax assets and liabilities were as follows:
(in millions)(in millions)  (in millions)  
December 31December 3120202019December 3120232022
Deferred tax assets:Deferred tax assets:
Allowance for loan losses
Allowance for loan losses
Allowance for loan lossesAllowance for loan losses$199 $134 
Deferred compensationDeferred compensation59 61 
Deferred loan origination fees and costsDeferred loan origination fees and costs19 8 
Deferred loan origination fees and costs
Deferred loan origination fees and costs
Net hedging losses
Net unrealized losses on investment securities available-for-sale
Operating lease liabilities
Operating lease liabilities
Operating lease liabilitiesOperating lease liabilities72 77 
Other temporary differences, netOther temporary differences, net55 49 
Total deferred tax assets before valuation allowanceTotal deferred tax assets before valuation allowance404 329 
Valuation allowanceValuation allowance(3)(3)
Total deferred tax assetsTotal deferred tax assets401 326 
Deferred tax liabilities:Deferred tax liabilities:
Lease financing transactionsLease financing transactions(70)(73)
Lease financing transactions
Lease financing transactions
Defined benefit plansDefined benefit plans(140)(91)
Allowance for depreciationAllowance for depreciation(11)(21)
Net hedging gains(47)(10)
Leasing Right of Use assets(64)(69)
Net unrealized gains on investment securities available-for-sale(65)(20)
Leasing right of use assets
Leasing right of use assets
Leasing right of use assets
Total deferred tax liabilities
Total deferred tax liabilities
Total deferred tax liabilitiesTotal deferred tax liabilities(397)(284)
Net deferred tax assetsNet deferred tax assets$4 $42 
Deferred tax assets included $5 million and $4 million of federal foreign tax credit carryforwards at December 31, 2023 and 2022, respectively, expiring between 2028 and 2032. In addition, there were $2 million of state net operating loss (NOL) carryforwards of $3 million at both December 31, 20202023 and 2019, which expire2022, expiring between 20202024 and 2029.2042. The Corporation believes it is more likely than not that the benefit from federal foreign tax credits and certain of these state net operating lossNOL carryforwards will not be realized and, accordingly, maintainedmaintains a federal valuation allowance of $3$5 million and a state valuation allowance of $1 million at both December 31, 20202023, compared to a federal valuation of $4 million and 2019.a state valuation allowance of $1 million in the comparable period in 2022. For further information on the Corporation’s valuation policy for deferred tax assets, refer to Note 1.
NOTE 19 - TRANSACTIONS WITH RELATED PARTIES
The Corporation’s banking subsidiaries had, and expect to have in the future, transactions with the Corporation’s directors and executive officers, companies with which these individuals are associated and certain related individuals. Such transactions were made in the ordinary course of business and included extensions of credit, leases and professional services. With respect to extensions of credit, all were made on substantially the same terms, including interest rates and collateral, as those prevailing at the same time for comparable transactions with other customers and did not, in management’s opinion, involve more than normal risk of collectibility or present other unfavorable features. The aggregate amount of loans attributable to persons who were related parties at December 31, 2020,2023 totaled $74$57 million at the beginning of 20202023 and $80$81 million at the end of 2020.2023. During 2020,2023, new loans to related parties aggregated $231$277 million and repayments totaled $225$253 million.
NOTE 20 - REGULATORY CAPITAL AND RESERVE REQUIREMENTS
Reserves required to be maintained and/or deposited with the FRB are classified in interest-bearing deposits with banks. These reserve balances vary, depending on the level of customer deposits in the Corporation’s banking subsidiaries. The average required reserve balances were $135 million and $586 million for the years ended December 31, 2020 and 2019, respectively. On March 15, 2020, the Federal Reserve Board announced the reserve requirement ratios would be reduced to zero effective March 26, 2020, eliminating reserve requirements for all depository institutions.
Banking regulations limit the transfer of assets in the form of dividends, loans or advances from the bank subsidiaries to the parent company. Under the most restrictive of these regulations, the aggregate amount of dividends which can be paid to the parent company, withwithout prior approval from bank regulatory agencies, approximated $12$400 million at January 1, 2021,2024, plus 20212024 net profits. Substantially all the assets of the Corporation’s banking subsidiaries are restricted from transfer to the parent company of the Corporation in the form of loans or advances.
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Comerica Incorporated and Subsidiaries

The Corporation’s subsidiary banks declared dividends of $498$675 million, $1.2$1.0 billion and $1.1 billion$852 million in 2020, 20192023, 2022 and 2018,2021, respectively.
The Corporation and its U.S. banking subsidiaries are subject to various regulatory capital requirements administered by federal and state banking agencies under the Basel III regulatory framework (Basel III). This regulatory framework establishes comprehensive methodologies for calculating regulatory capital and risk-weighted assets (RWA). Basel III also set minimum capital ratios as well as overall capital adequacy standards.
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Under Basel III, regulatory capital comprises Common Equity Tier 1 (CET1) capital, additional Tier 1 capital and Tier II2 capital. 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. Additionally, the Corporation has elected to permanently exclude capital in accumulated other comprehensive income (AOCI) related to debt and equity securities classified as available-for-sale as well as for cash flow hedges and defined benefit postretirement plans from CET1, an option available to standardized approach entities under Basel III. Tier 1 capital incrementally includes noncumulative perpetual preferred stock. Tier 2 capital includes Tier 1 capital as well as subordinated debt qualifying as Tier 2 and qualifying allowance for credit losses. In addition to the minimum risk-based capital requirements, the Corporation and its Bank subsidiaries are required to maintain a minimum capital conservation buffer, in the form of common equity, of 2.5 percent in order to avoid restrictions on capital distributions and discretionary bonuses.
The Corporation computes RWA using the standardized approach. Under the standardized approach, RWA is generally based on supervisory risk-weightings which vary by counterparty type and asset class. Under the Basel III standardized approach, capital is required for credit risk RWA, to cover the risk of unexpected losses due to failure of a customer or counterparty to meet its financial obligations in accordance with contractual terms; and if trading assets and liabilities exceed certain thresholds, capital is also required for market risk RWA, to cover the risk of losses due to adverse market movements or from position-specific factors.
Quantitative measures established by regulation to ensure capital adequacy require the maintenance of minimum amounts and ratios of CET1, Tier 1 and total capital (as defined in the regulations) to average and/or risk-weighted assets. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Corporation’s financial statements. At December 31, 20202023 and 2019,2022, the Corporation and its U.S. banking subsidiaries exceeded the ratios required for an institution to be considered “well capitalized”. For U.S. banking subsidiaries, those requirements were total risk-based capital, Tier 1 risk-based capital, CET1 risk-based capital and leverage ratios greater than 10 percent, 8 percent, 6.5 percent and 5 percent, respectively, at December 31, 20202023 and 2019.2022. For the Corporation, requirements to be considered "well capitalized" were total risk-based capital and Tier 1 risk-based capital ratios greater than 10 percent and 6 percent, respectively, at December 31, 20202023 and 2019.2022. There have been no conditions or events since December 31, 20202023 that management believes have changed the capital adequacy classification of the Corporation or its U.S. banking subsidiaries.
The following is a summary of the capital position of the Corporation and Comerica Bank, its principal banking subsidiary.
(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 assets75,901 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 assets78,871 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 
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Comerica Incorporated and Subsidiaries

The following is a summary of the capital position of the Corporation and Comerica Bank, its principal banking subsidiary.
(dollar amounts in millions)Comerica
Incorporated
(Consolidated)		Comerica
Bank
December 31, 2020
CET1 capital (minimum $3.0 billion (Consolidated))$6,919 $7,278 
Tier 1 capital (minimum $4.0 billion (Consolidated))7,313 7,278 
Total capital (minimum $5.4 billion (Consolidated))8,833 8,547 
Risk-weighted assets66,931 66,759 
Average assets (fourth quarter)84,705 84,536 
CET1 capital to risk-weighted assets (minimum-4.5%)10.34 %10.90 %
Tier 1 capital to risk-weighted assets (minimum-6.0%)10.93 10.90 
Total capital to risk-weighted assets (minimum-8.0%)13.20 12.80 
Tier 1 capital to average assets (minimum-4.0%)8.63 8.61 
Capital conservation buffer (minimum-2.5%)4.93 4.80 
December 31, 2019
CET1 capital (minimum $3.1 billion (Consolidated))$6,919 $7,199 
Tier 1 capital (minimum $4.1 billion (Consolidated))6,919 7,199 
Total capital (minimum $5.5 billion (Consolidated))8,282 8,371 
Risk-weighted assets68,273 68,071 
Average assets (fourth quarter)72,773 72,564 
CET1 capital to risk-weighted assets (minimum-4.5%)10.13 %10.58 %
Tier 1 capital to risk-weighted assets (minimum-6.0%)10.13 10.58 
Total capital to risk-weighted assets (minimum-8.0%)12.13 12.30 
Tier 1 capital to average assets (minimum-4.0%)9.51 9.92 
Capital conservation buffer (minimum-2.5%)4.13 4.30 
NOTE 21 - CONTINGENT LIABILITIES
Legal Proceedings
Comerica Bank, a wholly-owned subsidiary of the Corporation, was named in November 2011 as a third-party defendant in Butte Local Development v. Masters Group v. Comerica Bank (the case), for lender liability. The case was initially tried in January 2014, in the Montana Second District Judicial Court for Silver Bow County in Butte, Montana. On January 17, 2014, a jury found for Masters, resulting in an award against the Bank. On July 1, 2015, after an appeal filed by the Bank, the Montana Supreme Court reversed the judgment against the Bank and remanded the case for a new trial with instructions that Michigan contract law should apply and dismissing all other claims. In January 2017, the case was retried, without a jury, in the Second District Court, Silver Bow County, Montana. In November 2019, the court found the Bank breached its forbearance agreement. On January 17, 2020, the court conducted a hearing on the amount of costs and interest that Masters is entitled to recover. On June 12, 2020, the court found Masters is entitled to attorneys’ fees, interest and costs. The Bank is appealing the decision. Management believes that current reserves related to this case are adequate in the event of an adverse outcome.Regulatory Matters
The Corporation and certain of its subsidiaries are subject to various other pending or threatened legal proceedings arising out of the normal course of business or operations. The Corporation believes it has meritorioussubstantial defenses to the claims asserted against it in its other currently outstanding legal proceedings and, with respect to such legal proceedings, intends to continue to defend itself vigorously, litigating or settling cases according to management’s judgment as to what is in the best interests of the Corporation and its shareholders. Settlement may result from the Corporation's determination that it may be more prudent financially to settle, rather than litigate, and should not be regarded as an admission of liability.
Further, from time to time, the Corporation is also subject to examinations, inquiries and investigations by regulatory authorities in areas including, but not limited to, compliance, risk management and consumer protection, which could lead to administrative or legal proceedings or settlements. For example, the Consumer Financial Protection Bureau (CFPB) is investigating certain of the Corporation's practices, and the Corporation has responded and continues to respond to the CFPB. We are unable to predict the outcome of these discussions at this time. Remedies in these proceedings or settlements may include fines, penalties, restitution or alterations in the Corporation's business practices and may result in increased operating expenses or decreased revenues.
On at least a quarterly basis, the Corporation assesses its potential liabilities and contingencies in connection with outstanding legal proceedings and regulatory matters utilizing the latest information available. On a case-by-case basis, reservesaccruals are established for those legal claims and regulatory matters for which it is probable that a loss will be incurred either as a result of a settlement or judgment, and the amount of such loss can be reasonably estimated. The actual costs of resolving these claims and regulatory matters may be substantially higher or lower than the amounts reserved.accrued. Based on current knowledge, and after consultation with legal counsel, management believes current reservesaccruals are adequate, and the amount of any incremental liability arising from these matters is not expected to have a material adverse effect on the Corporation’s consolidated financial condition, results of operations or cash flows. Legal fees of $26 million, $17 million $15 million and $17$14 million for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively, were included in other noninterest expenses on the Consolidated Statements of Income.
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Comerica Incorporated and Subsidiaries

For matters where a loss is not probable, the Corporation has not established legal reserves.an accrual. The Corporation believes the estimate of the aggregate range of reasonably possible losses, in excess of reserves established accruals, for all legal proceedings and regulatory matters in which it is involved is from 0zero to approximately $46$202 million at December 31, 2020.2023. This estimated aggregate range of reasonably possible losses is based upon currently available information for those legal proceedings and regulatory matters in which the Corporation is involved, taking into account the Corporation’s best estimate of such losses for those legal cases and regulatory matters for which such estimate can be made. For certain legal cases and regulatory matters, the Corporation does not believe that an estimate can currently be made. The Corporation’s estimate involves significant judgment, given the varying stages of the legal proceedings and regulatory matters (including the fact many are currently in preliminary stages), the existence in certain legal proceedings of multiple defendants (including the Corporation) whose share of liability has yet to be determined, the numerous yet-unresolved issues in many of the legal proceedings and regulatory matters (including issues regarding class certification and the scope of many of the claims) and the attendant uncertainty of the various potential outcomes of such proceedings.legal proceedings and regulatory matters. Accordingly, the Corporation’s estimate will change from time to time, and actual losses may be more or less than the current estimate.
In the event of unexpected future developments, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to the Corporation's consolidated financial condition, results of operations or cash flows.
For information regarding income tax contingencies, refer to Note 18.
NOTE 22 - STRATEGIC LINES OF BUSINESS AND MARKETS
The Corporation has strategically aligned its operations into 3three major business segments: the Commercial Bank, the Retail Bank and Wealth Management. These business segments are differentiated based on the type of customer and the related products and services provided. In addition to the 3three major business segments, the Finance Division is also reported as a segment. Business segment results are produced by the Corporation’s internal management accounting system. This system measures financial results based on the internal business unit structure of the Corporation. The performance of the business segments is not comparable with the Corporation's consolidated results and is not necessarily comparable with similar information for any other financial institution. Additionally, because of the interrelationships of the various segments, the information presented is not indicative of how the segments would perform if they operated as independent entities. The management accounting system assigns balance sheet and income statement items to each business segment using certain methodologies, which are regularly reviewed and refined. From time to time, the Corporation may make reclassifications among the segments to more appropriately reflect management's current view of the segments, and methodologies may be
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modified as the management accounting system is enhanced and changes occur in the organizational structure and/or product lines. For comparability purposes, amounts in all periods are based on business unit structure and methodologies in effect at December 31, 2020.2023.
Net interest income for each segment reflects the interest income generated by earning assets less interest expense on interest-bearing liabilities plus the net impact from associated internal funds transfer pricing (FTP) funding credits and charges. The FTP methodology allocates credits to each business segment for deposits and other funds provided as well as charges for loans and other assets being funded. This credit or charge is based on matching stated or implied maturities for these assets and liabilities. The FTP crediting rates on deposits and other funds provided reflect the long-term value of deposits and other funding sources based on their implied maturity. Due to the longer-term nature of implied maturities, FTP crediting rates are generally less volatile than changes in interest rates observed in the market. FTP charge rates for funding loans and other assets reflect a matched cost of funds based on the pricing and duration characteristics of the assets. As a result of applying matched funding, interest revenue for each segment resulting from loans and other assets is generally not impacted by changes in interest rates. Therefore, net interest income for each segment primarily reflects the volume of loans and other earning assets at the spread over the matched cost of funds, as well as the volume of deposits at the associated FTP crediting rates. Generally, in periods of rising interest rates, FTP charge rates for funding loans and FTP crediting rates on deposits will increase, with FTP crediting rates for deposits typically repricing at a slower pace than FTP charge rates for funding loans.
For acquired loans and deposits, matched maturity funding is determined based on origination date. Accordingly, the FTP process reflects the transfer of interest rate risk exposures to the Corporate Treasury department within the Finance segment, where such exposures are centrally managed. Effective January 1, 2019, the Corporation prospectively discontinued allocating an additional FTP charge for the cost of maintaining liquid assets to support potential draws on unfunded loan commitments. The allowance for credit losses is allocated to the business segments based on the methodology used to estimate the consolidated allowance for credit losses described in Note 1. The related provision for credit losses is assigned based on the amount necessary to maintain an allowance for credit losses appropriate for each business segment. Noninterest income and expenses directly attributable to a line of business are assigned to that business segment. Direct expenses incurred by areas whose services support the overall Corporation are allocated to the business segments as follows: product processing expenditures are allocated based on standard unit costs applied to actual volume measurements; administrative expenses are allocated based on estimated time expended; and corporate overhead is assigned 50 percent based on the ratio of the business segment’s noninterest expenses to total noninterest expenses incurred by all business segments and 50 percent based on the ratio of the business segment’s attributed equity to total attributed equity of all business segments. Equity is attributed based on credit, operational and interest rate risks. Most of the
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equity attributed relates to credit risk, which is determined based on the credit score and expected remaining life of each loan, letter of credit and unused commitment recorded in the business segments. Operational risk is allocated based on loans and letters of credit, deposit balances, non-earning assets, trust assets under management, certain noninterest income items, and the nature and extent of expenses incurred by business units. Virtually all interest rate risk is assigned to Finance, as are the Corporation’s hedging activities.
The following discussion provides information about the activities of each business segment. A discussion of the financial results and the factors impacting 20202023 performance can be found in "Business Segments" in the "Strategic Lines of Business and Markets"Business" section of the financial review.
The Commercial Bank meets the needs of small and middle market businesses, multinational corporations and governmental entities by offering various products and services including commercial loans and lines of credit, deposits, cash management, payment solutions, card services, capital market products, international trade finance and letters of credit, foreign exchange management services and loan syndication services.credit.
The Retail Bank includes a full range of personal financial services, consisting of consumer lending, consumer deposit gathering and mortgage loan origination. This business segment offers a variety of consumer products, including deposit accounts, installment loans, credit cards, student loans, home equity lines of credit and residential mortgage loans. In addition,
this business segment offers a subset of commercial products and services to micro-businesses whose primary contact issmall businesses who are serviced through thea team of dedicated small business bankers and our branch network.
Wealth Management offersprovides products and services consisting ofto affluent, high-net worth and ultra-high-net-worth individuals and families, business owners and executives, and institutional clients, including comprehensive financial planning, trust and fiduciary services, private banking, retirement services, investment management and advisory, services, investmentbrokerage, private banking, and brokeragebusiness transition planning services. This business segment also offers the sale of annuity products, as well as life, disability and long-term care insurance products.
The Finance segment includes the Corporation’s securities portfolio and asset and liability management activities. This segment is responsible for managing the Corporation’s funding, liquidity and capital needs, performing interest sensitivity analysis and executing various strategies to manage the Corporation’s exposure to liquidity, interest rate risk and foreign exchange risk.
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The Other category includes the income and expense impact of equity and cash, tax benefits not assigned to specific business segments, charges of an unusual or infrequent nature that are not reflective of the normal operations of the business segments and miscellaneous other expenses of a corporate nature.
Business segment financial results are as follows:
(dollar amounts in millions)Commercial
Bank		Retail
Bank		Wealth ManagementFinanceOtherTotal
Year Ended December 31, 2023
Earnings summary:
Net interest income (expense)$2,051 $846 $208 $(693)$102 $2,514 
Provision for credit losses90 3 (6)— 2 89 
Noninterest income603 119 307 37 12 1,078 
Noninterest expenses1,106 728 402 12 111 2,359 
Provision (benefit) for income taxes342 58 29 (164)(2)263 
Net income (loss)$1,116 $176 $90 $(504)$3 $881 
Net charge-offs$20 $1 $1 $— $— $22 
Selected average balances:
Assets$49,458 $2,960 $5,500 $20,139 $9,137 $87,194 
Loans46,435 2,236 5,232 — — 53,903 
Deposits33,019 24,363 4,130 4,169 337 66,018 
Statistical data:
Return on average assets (a)2.26 %0.71 %1.61 %n/mn/m1.01 %
Efficiency ratio (b)41.68 74.90 78.16 n/mn/m65.56 
Year Ended December 31, 2022
Earnings summary:
Net interest income$1,761 $680 $199 $(195)$21 $2,466 
Provision for credit losses32 11 9 — 8 60 
Noninterest income607 122 298 59 (18)1,068 
Noninterest expenses964 690 348 1 (5)1,998 
Provision (benefit) for income taxes315 22 34 (39)(7)325 
Net income (loss)$1,057 $79 $106 $(98)$7 $1,151 
Net charge-offs (recoveries)$21 $(1)$(3)$— $— $17 
Selected average balances:
Assets$47,437 $2,814 $5,037 $20,912 $11,072 $87,272 
Loans43,481 2,063 4,906 — 10 50,460 
Deposits42,584 26,672 5,439 360 426 75,481 
Statistical data:
Return on average assets (a)2.23 %0.29 %1.84 %n/mn/m1.32 %
Efficiency ratio (b)40.57 85.51 69.92 n/mn/m56.32 
Table continues on the following page.
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Business segment financial results are as follows:
(dollar amounts in millions)Commercial
Bank		Retail
Bank		Wealth ManagementFinanceOtherTotal
Year Ended December 31, 2020
Earnings summary:
Net interest income (expense)$1,608 $502 $167 $(384)$18 $1,911 
Provision for credit losses495 7 35 0 0 537 
Noninterest income555 110 263 55 18 1,001 
Noninterest expenses826 619 301 2 36 1,784 
Provision (benefit) for income taxes182 (5)20 (79)(1)117 
Net income (loss)$660 $(9)$74 $(252)$1 $474 
Net credit-related charge-offs$192 $1 $3 $0 $0 $196 
Selected average balances:
Assets$45,603 $3,281 $5,162 $15,418 $11,682 $81,146 
Loans44,123 2,468 5,045 0 (5)51,631 
Deposits36,603 22,832 4,402 1,026 175 65,038 
Statistical data:
Return on average assets (a)1.45 %(0.04)%1.41 %n/mn/m0.58 %
Efficiency ratio (b)38.19 100.48 70.13 n/mn/m61.15 
Year Ended December 31, 2019
Earnings summary:
Net interest income (expense)$1,655 $568 $183 $(123)$56 $2,339
Provision for credit losses88 (4)(14)0 4 74
Noninterest income555 132 270 41 12 1,010
Noninterest expenses795 597 283 1 67 1,743
Provision (benefit) for income taxes306 24 44 (26)(14)334
Net income (loss)$1,021 $83 $140 $(57)$11 $1,198
Net credit-related charge-offs (recoveries)$111 $1 $(5)$0 $0 $107
Selected average balances:
Assets$44,946 $2,852 $5,083 $13,903 $4,704 $71,488
Loans43,477 2,104 4,935 0 (5)50,511
Deposits29,047 20,743 3,833 1,673 185 55,481
Statistical data:
Return on average assets (a)2.27 %0.39 %2.76 %n/mn/m1.68 %
Efficiency ratio (b)35.96 84.49 62.45 n/mn/m51.82 
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(dollar amounts in millions)(dollar amounts in millions)Commercial BankRetail
Bank		Wealth ManagementFinanceOtherTotal(dollar amounts in millions)Commercial BankRetail
Bank		Wealth ManagementFinanceOtherTotal
Year Ended December 31, 2018
Year Ended December 31, 2021Year Ended December 31, 2021Commercial BankRetail
Bank		Wealth ManagementFinanceOtherTotal
Earnings summary:Earnings summary:
Net interest income (expense)
Net interest income (expense)
Net interest income (expense)Net interest income (expense)$1,613 $548 $181 $(41)$51 $2,352 
Provision for credit lossesProvision for credit losses6 (1)(3)0 (3)(1)
Noninterest incomeNoninterest income547 136 266 27 0 976 
Noninterest expensesNoninterest expenses847 602 293 1 51 1,794 
Provision (benefit) for income taxesProvision (benefit) for income taxes283 18 36 (14)(23)300 
Net income (loss)Net income (loss)$1,024 $65 $121 $(1)$26 $1,235 
Net credit-related charge-offs (recoveries)$52 $0 $(1)$0 $0 $51 
Net credit-related (recoveries) charge-offs
Selected average balances:Selected average balances:
Assets
Assets
AssetsAssets$43,207 $2,633 $5,214 $13,548 $6,122 $70,724 
LoansLoans41,629 2,067 5,081 0 (11)48,766 
DepositsDeposits30,116 20,812 3,941 941 125 55,935 
Statistical data:Statistical data:
Return on average assets (a)Return on average assets (a)2.37 %0.31 %2.32 %n/mn/m1.75 %
Return on average assets (a)
Return on average assets (a)2.71 %0.15 %2.24 %n/m1.30 %
Efficiency ratio (b)Efficiency ratio (b)39.22 87.59 65.60 n/mn/m53.56 
(a)Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.
(b)Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net gains (losses) from securities, and a derivative contract tied to the conversion rate of Visa Class B shares.shares and changes in the value of shares obtained through monetization of warrants.
n/m – not meaningful
The Corporation operates in 3 primary markets - Michigan, California and Texas, as well as in Arizona and Florida, with select businesses operating in several other states, and in Canada and Mexico. The Corporation produces market segment results for the Corporation’s 3 primary geographic markets as well as Other Markets. Other Markets includes Florida, Arizona, the International Finance division and businesses with a national perspective. The Finance & Other category includes the Finance segment and the Other category as previously described. Market segment results are provided as supplemental information to the business segment results and may not meet all operating segment criteria as set forth in GAAP. For comparability purposes, amounts in all periods are based on market segments and methodologies in effect at December 31, 2020.
A discussion of the financial results and the factors impacting 2020 performance can be found in "Market Segments" in the "Strategic Lines of Business and Markets" section of the financial review.
Market segment financial results are as follows:
(dollar amounts in millions)MichiganCaliforniaTexasOther
Markets		Finance
& Other		Total
Year Ended December 31, 2020
Earnings summary:
Net interest income (expense)$660 $723 $465 $429 $(366)$1,911 
Provision for credit losses95��134 270 38 0 537 
Noninterest income273 147 120 388 73 1,001 
Noninterest expenses559 414 359 414 38 1,784 
Provision (benefit) for income taxes54 75 (11)79 (80)117 
Net income (loss)$225 $247 $(33)$286 $(251)$474 
Net credit-related charge-offs$14 $31 $151 $0 $0 $196 
Selected average balances:
Assets$13,179 $18,562 $11,287 $11,020 $27,098 $81,146 
Loans12,509 18,265 10,813 10,052 (8)51,631 
Deposits23,500 19,386 10,209 10,742 1,201 65,038 
Statistical data:
Return on average assets (a)0.92 %1.21 %(0.28)%2.45 %n/m0.58 %
Efficiency ratio (b)59.76 47.58 61.28 50.66 n/m61.15 
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(dollar amounts in millions)MichiganCaliforniaTexasOther
Markets		Finance
& Other		Total
Year Ended December 31, 2019
Earnings summary:
Net interest income (expense)$729 $808 $493 $376 $(67)$2,339 
Provision for credit losses(11)(33)119 (5)474 
Noninterest income291 173 128 365 531,010 
Noninterest expenses554 406 345 370 681,743 
Provision (benefit) for income taxes108 154 38 74 (40)334 
Net income (loss)$369 $454 $119 $302 $(46)$1,198 
Net credit-related charge-offs (recoveries)$11 $8 $93 $(5)$0$107 
Selected average balances:
Assets$13,149 $18,731 $11,269 $9,732 $18,607 $71,488 
Loans12,553 18,413 10,616 8,934 (5)50,511 
Deposits20,081 16,846 8,780 7,916 1,858 55,481 
Statistical data:
Return on average assets (a)1.77 %2.42 %1.06 %3.10 %n/m1.68 %
Efficiency ratio (b)54.01 41.28 55.59 49.90 n/m51.82 
Year Ended December 31, 2018
Earnings summary:
Net interest income$727 $786 $474 $355 $10 $2,352 
Provision for credit losses30 26 (53)(1)(3)(1)
Noninterest income296 164 130 359 27 976 
Noninterest expenses577 424 365 376 52 1,794 
Provision (benefit) for income taxes90 123 64 60 (37)300 
Net income$326 $377 $228 $279 $25 $1,235 
Net credit-related charge-offs$7 $27 $12 $5 $0 $51 
Selected average balances:
Assets$13,202 $18,422 $10,380 $9,049 $19,671 $70,724 
Loans12,531 18,161 9,812 8,273 (11)48,766 
Deposits20,770 16,951 8,991 8,157 1,066 55,935 
Statistical data:
Return on average assets (a)1.52 %2.05 %2.20 %3.08 %n/m1.75 %
Efficiency ratio (b)56.21 44.64 60.30 52.82 n/m53.56 
(a)
Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.
(b)Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net gains (losses) from securities and a derivative contract tied to the conversion rate of Visa Class B shares.
n/m – not meaningful
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NOTE 23 - PARENT COMPANY FINANCIAL STATEMENTS
BALANCE SHEETS - COMERICA INCORPORATED
(in millions, except share data)  
December 3120202019
Assets
Cash and due from subsidiary banks$1,489 $1,196 
Other short-term investments107 95 
Investment in subsidiaries, principally banks8,215 7,784 
Premises and equipment1 1 
Accrued income and other assets329 242 
Total assets$10,141 $9,318 
Liabilities and Shareholders’ Equity
Medium- and long-term debt$1,818 $1,735 
Accrued expenses and other liabilities273 256 
Total liabilities2,091 1,991 
Fixed-rate reset non-cumulative perpetual preferred stock, series A, 0 par value, $100,000 liquidation preference per share:
Authorized - 4,000 shares
Issued - 4,000 shares at 12/31/2020394 0 
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares1,141 1,141 
Capital surplus2,185 2,174 
Accumulated other comprehensive income (loss)168 (235)
Retained earnings9,623 9,538 
Less cost of common stock in treasury - 88,997,430 shares at 12/31/2020 and 86,069,234 shares at 12/31/2019(5,461)(5,291)
Total shareholders’ equity8,050 7,327 
Total liabilities and shareholders’ equity$10,141 $9,318 
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(in millions, except share data)  
December 3120232022
Assets
Cash and due from subsidiary banks$1,415 $1,810 
Other short-term investments104 92 
Receivable due from subsidiary bank— 150 
Investment in subsidiaries, principally banks5,777 4,853 
Accrued income and other assets180 191 
Total assets$7,476 $7,096 
Liabilities and Shareholders’ Equity
Medium- and long-term debt$764 $1,593 
Accrued expenses and other liabilities306 322 
Total liabilities1,070 1,915 
Fixed-rate reset non-cumulative perpetual preferred stock, series A, no par value, $100,000 liquidation preference per share:
Authorized - 4,000 shares
Issued - 4,000 shares394 394 
Common stock - $5 par value:
Authorized - 325,000,000 shares
Issued - 228,164,824 shares1,141 1,141 
Capital surplus2,224 2,220 
Accumulated other comprehensive loss(3,048)(3,742)
Retained earnings11,727 11,258 
Less cost of common stock in treasury - 96,266,568 shares at 12/31/2023 and 97,197,962 shares at 12/31/2022(6,032)(6,090)
Total shareholders’ equity6,406 5,181 
Total liabilities and shareholders’ equity$7,476 $7,096 
STATEMENTS OF INCOME - COMERICA INCORPORATED
(in millions)(in millions) 
Years Ended December 31Years Ended December 31202020192018
Years Ended December 31
Years Ended December 31202320222021
IncomeIncome
Income from subsidiaries:Income from subsidiaries:
Income from subsidiaries:
Income from subsidiaries:
Dividends from subsidiaries
Dividends from subsidiaries
Dividends from subsidiariesDividends from subsidiaries$498 $1,229 $1,135 
Other interest incomeOther interest income4 20 13 
Intercompany management feesIntercompany management fees209 224 228 
Total incomeTotal income711 1,473 1,376 
ExpensesExpenses
Interest on medium- and long-term debtInterest on medium- and long-term debt30 56 29 
Interest on medium- and long-term debt
Interest on medium- and long-term debt
Salaries and benefits expenseSalaries and benefits expense141 143 140 
Occupancy expense5 6 5 
Equipment expense1 1 1 
Restructuring charges0 0 2 
Other noninterest expensesOther noninterest expenses60 72 75 
Total expensesTotal expenses237 278 252 
Income before benefit for income taxes and equity in undistributed earnings of subsidiariesIncome before benefit for income taxes and equity in undistributed earnings of subsidiaries474 1,195 1,124 
Benefit for income taxesBenefit for income taxes(6)(9)(5)
Income before equity in undistributed earnings of subsidiariesIncome before equity in undistributed earnings of subsidiaries480 1,204 1,129 
Equity in undistributed (losses) earnings of subsidiaries, principally banks(6)(6)106 
Equity in undistributed earnings of subsidiaries, principally banks
Net incomeNet income474 1,198 1,235 
Less income allocated to participating securitiesLess income allocated to participating securities2 7 8 
Preferred stock dividendsPreferred stock dividends13 0 0 
Net income attributable to common sharesNet income attributable to common shares$459 $1,191 $1,227 
 
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STATEMENTS OF CASH FLOWS - COMERICA INCORPORATED
(in millions)(in millions)   (in millions)  
Years Ended December 31Years Ended December 31202020192018Years Ended December 31202320222021
Operating ActivitiesOperating Activities
Net incomeNet income$474 $1,198 $1,235 
Net income
Net income
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed (losses) earnings of subsidiaries, principally banks6 6 (106)
Depreciation and amortization0 1 1 
Undistributed losses of subsidiaries, principally banks
Undistributed losses of subsidiaries, principally banks
Undistributed losses of subsidiaries, principally banks
Net periodic defined benefit cost
Net periodic defined benefit cost
Net periodic defined benefit costNet periodic defined benefit cost4 4 4 
Share-based compensation expenseShare-based compensation expense11 15 21 
Benefit for deferred income taxes(1)(2)(1)
(Benefit) provision for deferred income taxes
Other, netOther, net2 28 10 
Net cash provided by operating activitiesNet cash provided by operating activities496 1,250 1,164 
Investing ActivitiesInvesting Activities
Advance to subsidiary bank
Advance to subsidiary bank
Advance to subsidiary bank
Repayment of subsidiary advance
Other, net
Net cash provided by (used in) investing activities
Financing Activities
Maturities of medium- and long-term debt
Maturities of medium- and long-term debt
Maturities of medium- and long-term debt
Capital transactions with subsidiaries(21)0 0 
Net change in premises and equipment2 0 0 
Net cash used in investing activities(19)0 0 
Financing Activities
Medium- and long-term debt:
Maturities0 (350)0 
Issuances0 550 850 
Preferred Stock:
Issuances394 0 0 
Cash dividends paid(8)0 0 
Cash dividends paid on preferred stock
Cash dividends paid on preferred stock
Cash dividends paid on preferred stock
Common Stock: Common Stock:
Repurchases
Repurchases
RepurchasesRepurchases(199)(1,394)(1,338)
Cash dividends paid Cash dividends paid(375)(402)(263)
Issuances under employee stock plansIssuances under employee stock plans4 18 52 
Net cash used in financing activitiesNet cash used in financing activities(184)(1,578)(699)
Net increase (decrease) in cash and cash equivalents293 (328)465 
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of periodCash and cash equivalents at beginning of period1,196 1,524 1,059 
Cash and cash equivalents at end of periodCash and cash equivalents at end of period$1,489 $1,196 $1,524 
Interest paidInterest paid$33 $55 $11 
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NOTE 24 - SUMMARY OF QUARTERLY FINANCIAL STATEMENTS (UNAUDITED)
The following quarterly information is unaudited. However, in the opinion of management, the information reflects all adjustments, which are necessary for the fair presentation of the results of operations, for the periods presented.
2020
(in millions, except per share data)Fourth
Quarter		Third
Quarter		Second
Quarter		First
Quarter
Interest income$489 $484 $511 $609 
Interest expense20 26 40 96 
Net interest income469 458 471 513 
Provision for credit losses(17)5 138 411 
Net securities gains (losses)0 0 1 (1)
Noninterest income excluding net securities gains (losses)265 252 246 238 
Noninterest expenses473 446 440 425 
Provision (benefit) for income taxes63 48 27 (21)
Net income (loss)215 211 113 (65)
Less:
Income allocated to participating securities1 0 1 0 
Preferred stock dividends5 8 0 0 
Net income (loss) attributable to common shares$209 $203 $112 $(65)
Earnings (loss) per common share:
Basic$1.50 $1.45 $0.81 $(0.46)
Diluted1.49 1.44 0.80 (0.46)
Comprehensive income267 169 97 344 
2019
(in millions, except per share data)Fourth
Quarter		Third
Quarter		Second
Quarter		First
Quarter
Interest income$659 $711 $727 $710 
Interest expense115 125 124 104 
Net interest income544 586 603 606 
Provision for credit losses8 35 44 (13)
Net securities gains (losses)1 0 0 (8)
Noninterest income excluding net securities gains (losses)265 256 250 246 
Noninterest expenses451 435 424 433 
Provision for income taxes82 80 87 85 
Net income269 292 298 339 
Less income allocated to participating securities2 2 1 2 
Net income attributable to common shares$267 $290 $297 $337 
Earnings per common share:
Basic$1.87 $1.98 $1.95 $2.14 
Diluted1.85 1.96 1.94 2.11 
Comprehensive income370 338 429 435 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

NOTE 25 - REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from contracts with customers comprises the noninterest income earned by the Corporation in exchange for services provided to customers. The following table presents the composition of revenue from contracts with customers, segregated from other sources of noninterest income, by business segment.
Commercial
Bank		Retail
Bank		Wealth ManagementFinance & OtherTotal
Commercial
Bank		Commercial
Bank		Retail
Bank		Wealth ManagementFinance & OtherTotal
(in millions)(in millions)Commercial
Bank		Retail
Bank		Wealth ManagementFinance & OtherTotal(in millions)
Year Ended December 31, 2020
Year Ended December 31, 2023
Revenue from contracts with customers:Revenue from contracts with customers:
Revenue from contracts with customers:
Revenue from contracts with customers:
Card fees
Card fees
Card feesCard fees$229 $38 $3 $0 $270 
Fiduciary incomeFiduciary income0 0 209 0 209 
Service charges on deposit accountsService charges on deposit accounts128 52 5 0 185 
Commercial loan servicing fees (a)Commercial loan servicing fees (a)18 0 0 0 18 
Capital markets income (b)
Brokerage feesBrokerage fees0 0 21 0 21 
Other noninterest income (b)Other noninterest income (b)28 10 17 0 55 
Total revenue from contracts with customersTotal revenue from contracts with customers403 100 255 0 758 
Other sources of noninterest incomeOther sources of noninterest income152 10 8 73 243 
Total noninterest incomeTotal noninterest income$555 $110 $263 $73 $1,001 
Year Ended December 31, 2019
Year Ended December 31, 2022
Revenue from contracts with customers:Revenue from contracts with customers:
Revenue from contracts with customers:
Revenue from contracts with customers:
Card fees
Card fees
Card feesCard fees$213 $40 $4 $0 $257 
Fiduciary incomeFiduciary income0 0 206 0 206 
Service charges on deposit accountsService charges on deposit accounts130 68 5 0 203 
Commercial loan servicing fees (a)Commercial loan servicing fees (a)18 0 0 0 18 
Capital markets income (b)
Brokerage feesBrokerage fees0 0 28 0 28 
Other noninterest income (b)Other noninterest income (b)8 11 18 0 37 
Total revenue from contracts with customersTotal revenue from contracts with customers369 119 261 0 749 
Other sources of noninterest incomeOther sources of noninterest income186 13 9 53 261 
Total noninterest incomeTotal noninterest income$555 $132 $270 $53 $1,010 
Year Ended December 31, 2018
Year Ended December 31, 2021
Revenue from contracts with customers:Revenue from contracts with customers:
Revenue from contracts with customers:
Revenue from contracts with customers:
Card fees
Card fees
Card feesCard fees$201 $39 $4 $0 $244 
Fiduciary incomeFiduciary income0 0 206 0 206 
Service charges on deposit accountsService charges on deposit accounts134 72 5 0 211 
Commercial loan servicing fees (a)Commercial loan servicing fees (a)18 0 0 0 18 
Capital markets income (b)
Brokerage feesBrokerage fees0 0 27 0 27 
Other noninterest income (b)Other noninterest income (b)12 19 17 1 49 
Total revenue from contracts with customersTotal revenue from contracts with customers365 130 259 1 755 
Other sources of noninterest incomeOther sources of noninterest income182 6 7 26 221 
Total noninterest incomeTotal noninterest income$547 $136 $266 $27 $976 
(a)Included in commercial lending fees on the Consolidated Statements of Income.
(b)Excludes derivative, warrant and other miscellaneous income.
Adjustments(c)Effective January 1, 2023, the Corporation reported derivative income, syndication agent fees (previously a component of commercial lending fees) and investment banking fees (previously a component of other noninterest income) as a combined item captioned by capital markets income on the Consolidated Statements of Comprehensive Income. Prior periods have been adjusted to revenue duringconform to this presentation, and the years ended December 31, 2020, 2019 and 2018 for refunds or credits relating to prior periods werechanges in presentation do not significant.impact total noninterest income
Revenue from contracts with customers did not generate significant contract assets and liabilities.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

NOTE 2625 - LEASES
As a lessee, the Corporation has entered into operating leases for the majority of its real estate locations, primarily retail and office space. Total lease expense for the years endingended December 31, 20202023, 2022 and 20192021 were as follows:
(in millions)(in millions)
Years Ended December 31
Years Ended December 31
Years Ended December 31Years Ended December 3120202019202320222021
Operating lease expenseOperating lease expense$64 $64 
Variable lease expenseVariable lease expense16 19 
Less sublease incomeLess sublease income(1)(2)
Total lease expenseTotal lease expense$79 $81 
At December 31, 2020, the Corporation's Right of Use (ROU) assets and operating lease liabilities were $306 million and $344 million, respectively. At December 31, 2019, ROU assets and operating lease liabilities were $329 million and $367 million, respectively. Additional detailsSupplemental balance sheet information related to the Corporation's operating leases are presented below:is summarized as follows:
(dollar amounts in millions)(dollar amounts in millions)
Years Ended December 31Years Ended December 3120202019
Lease liabilities from new ROU assets$28 $49 
Cash paid on operating lease liabilities65 67 
Years Ended December 31
Years Ended December 31202320222021
Included in accrued income and other assets
Right-of-use (ROU) assets
Right-of-use (ROU) assets
Right-of-use (ROU) assets
Included in accrued expenses and other liabilities
Operating lease liabilities
Operating lease liabilities
Operating lease liabilities
Weighted average discount rateWeighted average discount rate3.61 %3.78 %Weighted average discount rate3.72 %3.53 %3.33 %
Weighted average lease term in years8 9 
Weighted average remaining lease term in years
Supplemental cash flow information related to leases is summarized as follows:
(in millions)
Years Ended December 31202320222021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$69 $66 $66 
ROU assets obtained in exchange for new liabilities28 80 64 
As of December 31, 2020,2023, the contractual maturities of operating lease liabilities were as follows:
(in millions)(in millions)
Years Ending December 31
2021$60 
202257 
202351 
Years Ended December 31
Years Ended December 31
Years Ended December 31
2024
2024
2024202446 
2025202540 
2026
2027
2028
ThereafterThereafter149 
Total contractual maturitiesTotal contractual maturities403 
Less imputed interestLess imputed interest(59)
Total operating lease liabilitiesTotal operating lease liabilities$344 
As a lessor, the Corporation leases certain types of manufacturing and warehouse equipment as well as public and private transportation vehicles to its customers. The Corporation recognized lease-related revenue, primarily interest income from sales-type and direct financing leases of $13$40 million, $21 million and $14$12 million for the years ended December 31, 20202023, 2022 and 2019,2021, respectively. The Corporation's net investment in sales-type and direct financing leases was $391$761 million and $369$659 million at December 31, 20202023 and 2019,2022, respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries

As of December 31, 2020,2023, the contractual maturities of sales-type and direct financing lease receivables were as follows:
(in millions)(in millions)
Years Ending December 31
2021$69 
2022101 
202354 
Years Ended December 31
Years Ended December 31
Years Ended December 31
2024
2024
2024202464 
2025202533 
2026
2027
2028
ThereafterThereafter18 
Total lease payments receivableTotal lease payments receivable339 
Unguaranteed residual valuesUnguaranteed residual values72 
Less deferred interest incomeLess deferred interest income(20)
Total lease receivables (a)Total lease receivables (a)$391 
(a)Excludes net investment in leveraged leases of $203$46 million.
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REPORT OF MANAGEMENT
The management of Comerica Incorporated (the Corporation) is responsible for the accompanying consolidated financial statements and all other financial information in this Annual Report. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles and include amounts which of necessity are based on management’s best estimates and judgments and give due consideration to materiality. The other financial information herein is consistent with that in the consolidated financial statements.
In meeting its responsibility for the reliability of the consolidated financial statements, management develops and maintains effective internal controls, including those over financial reporting, as defined in the Securities and Exchange Act of 1934, as amended. The Corporation’s internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Corporation; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles, and that receipts and expenditures of the Corporation are made only in accordance with authorizations of management and directors of the Corporation; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Corporation’s assets that could have a material effect on the consolidated financial statements.
Management assessed, with participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, internal control over financial reporting as it relates to the Corporation’s consolidated financial statements presented in conformity with U.S. generally accepted accounting principles as of December 31, 2020.2023. The assessment was based on criteria for effective internal control over financial reporting described in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Based on this assessment, management determined that internal control over financial reporting is effective as it relates to the Corporation’s consolidated financial statements presented in conformity with U.S. generally accepted accounting principles as of December 31, 2020.2023.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Corporation's internal control over financial reporting as of December 31, 20202023 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their accompanying report.
The Corporation’s Board of Directors oversees management’s internal control over financial reporting and financial reporting responsibilities through its Audit Committee as well as various other committees. The Audit Committee, which consists of directors who are not officers or employees of the Corporation, meets regularly with management, internal audit and the independent public accountants to assure that the Audit Committee, management, internal auditors and the independent public accountants are carrying out their responsibilities, and to review auditing, internal control and financial reporting matters.
Curtis C. FarmerJames J. HerzogMauricio A. Ortiz
Chairman, President andSenior Executive Vice President andExecutive Vice President, andSenior Vice President and
Chief Executive OfficerChief Financial OfficerChief Accounting Officer and Controller
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Comerica Incorporated

Opinion on Internal Control over Financial Reporting
We have audited Comerica Incorporated and subsidiaries’ internal control over financial reporting as of December 31, 2020,2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Comerica Incorporated and subsidiaries (the Company)Corporation) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020,2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the CompanyCorporation as of December 31, 20202023 and 2019,2022, and the related consolidated statements of income, comprehensive income, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2020,2023, and the related notes of the CompanyCorporation and our report dated February 9, 202128, 2024 expressed an unqualified opinion thereon.

Basis for Opinion
The Company’sCorporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management. Our responsibility is to express an opinion on the Company’sCorporation’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the CompanyCorporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Dallas, TX
February 9, 202128, 2024


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Comerica Incorporated
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Comerica Incorporated and subsidiaries (the Company)Corporation) as of December 31, 20202023 and 2019,2022, and the related consolidated statements of income, comprehensive income, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2020,2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the CompanyCorporation at December 31, 20202023 and 2019,2022, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2020,2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’sCorporation’s internal control over financial reporting as of December 31, 2020,2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 9, 2021,28, 2024, expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’sCorporation’s management. Our responsibility is to express an opinion on the Company’sCorporation’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the CompanyCorporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Adoption of New Accounting Standard
As discussed in Notes 1 and 4 to the consolidated financial statements, the Company changed its method for accounting for credit losses in 2020. As explained below, auditing the Company’s allowance for credit losses, including adoption of the new accounting guidance related to the estimate of allowance for credit losses, was a critical audit matter.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Allowance for credit losses
Description of the MatterThe Company’sCorporation’s loan portfolio and the associated allowance for credit losses (ACL) were $52$52.1 billion and $992$728 million as of December 31, 2020,2023, respectively. As discussed above and in Note 1 and 4 of the financial statements, effective January 1, 2020 the Company adopted Financial Accounting Standards Board Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which resulted in a $17 million decrease to the overall allowance for credit losses. The allowance for credit losses represents management’s estimate of expected credit losses over the contractual life of the loan portfolio at the balance sheet date. The allowance for credit losses includes credit loss estimates for loans evaluated on an individual basis, such as for certain nonaccrual loans and TDR loans and collective loss estimates for homogeneous pools of loans with similar risk characteristics. The CompanyCorporation determines the allowance for homogeneous pools of loans with similar risk characteristics by applying loss factors to amortized cost balances over the remaining contractual life. Loss factors are based on estimated probability of default, set to a default horizon based on contractual life, and loss given default. Through the use of various models, historical estimates are calibrated to economic forecasts over the reasonable and supportable forecast period based on economic variables that statistically correlate with each of the probability of default and loss given default pools. Qualitative adjustments are then made to bring the allowance to the level management believes is appropriate based on factors that have not otherwise been fully accounted for in the quantitative analysis. Examples of these adjustments include 1) foresight risk, 2) input imprecision, and 3) model imprecision.


Auditing management’s estimate of the allowance for credit losses involved a high degree of subjectivity due to the highly judgmental nature of the expected loss models including management’s selection of models used to estimate quantitative components ofand the ACL, as well as qualitative adjustments included in the ACL. Management’s identification and measurement ofManagement applies significant judgment when selecting the expected loss models including management’s selection of modelsto be used to determine the allowance and the inputs used in those models as well as in applying qualitative adjustments made are highly judgmental andadjustments. These determinations could have a significant effect on the ACL.
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How We Addressed the Matter in Our Audit
We obtained an understanding of the Company’sCorporation’s process for establishing the ACL, including selection of the models, selected by management to estimate quantitative componentsinputs used in the models, monitoring of the ACLmodels, and the qualitative adjustments made to the ACL. We evaluated the design and tested the operating effectiveness of the controls and governance over 1) determining the appropriateness of the models used to estimate quantitative components of the ACL, 2) the identification and need for selection of a different model for quantitative components of the ACL, 3) the validation ofvalidating the models used to estimate quantitative components of the ACL, including completeness and accuracy of3) selecting the keyappropriate inputs and assumptions within the models, 4) monitoring of the models including the assessment of the output, 5) determining the appropriateness of the qualitative reserve methodology, including the identification and the assessment for the need for qualitative adjustments, 6) validating the reliabilityrelevance and accuracyreliability of data used to estimate the various components of the qualitative reserves, and 7) management’s review and approval of qualitative adjustments and model output.

To test the appropriateness of the models selectedused by management to estimate quantitative components of the ACL, with the support of specialists, we evaluated management’s basis for concluding on the selection of the models used when considering modeled output. For example, we evaluated the model outputmethodology and information utilized by management asmodel performance, and tested key modeling assumptions used within the basis for their model selection by independently obtaining and comparing actual historical loss data to data used and third-party macroeconomic data and information to assess the accuracy and appropriateness of the information and to consider whether new or contradictory information existed. We also evaluated model calculation design and re-performed calculations on a sample basis.
models. To test the qualitative adjustments, we evaluated the identification and measurement of the qualitative adjustments, including the basis for concluding an adjustment was warranted when considering the potential impact of foresight risk, input imprecision and model imprecision, testedevaluated the completeness and accuracyappropriateness of the data used by the CompanyCorporation to estimate the qualitative adjustments, recalculated the analyses used by management to determine the qualitative adjustments, and analyzed the changes in assumptions and components of the qualitative reserves relative to changes in the Company’sCorporation’s loan portfolio. For example, we evaluated the data and information utilized by management to estimate the qualitative adjustments by independently obtaining and comparing to historical loan data, third-party macroeconomic data, and peer bank data to assess the appropriateness of the information and to consider whether new or contradictory information existed.
We also evaluated if qualitative adjustments were based on a comprehensive framework, well-documented, and consistently applied.
/s/ Ernst & Young LLP

We have served as the Company’sCorporation’s auditor since 1992.
Dallas, TX
February 9, 202128, 2024


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HISTORICAL REVIEW - AVERAGE BALANCE SHEETS
Comerica Incorporated and Subsidiaries
CONSOLIDATED FINANCIAL INFORMATION
(in millions)     
Years Ended December 3120202019201820172016
ASSETS
Cash and due from banks$878 $887 $1,135 $1,209 $1,146 
Interest-bearing deposits with banks10,203 3,360 4,700 5,443 5,099 
Other short-term investments153 143 134 92 102 
Investment securities13,432 12,120 11,810 12,207 12,348 
Commercial loans32,144 32,053 30,534 30,415 31,062 
Real estate construction loans3,912 3,325 3,155 2,958 2,508 
Commercial mortgage loans9,839 9,170 9,131 9,005 8,981 
Lease financing594 557 470 509 684 
International loans1,028 1,019 1,021 1,157 1,367 
Residential mortgage loans1,905 1,929 1,983 1,989 1,894 
Consumer loans2,209 2,458 2,472 2,525 2,500 
Total loans51,631 50,511 48,766 48,558 48,996 
Less allowance for loan losses(900)(667)(695)(728)(730)
Net loans50,731 49,844 48,071 47,830 48,266 
Accrued income and other assets5,749 5,134 4,874 4,671 4,782 
Total assets$81,146 $71,488 $70,724 $71,452 $71,743 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits$33,053 $26,644 $29,241 $31,013 $29,751 
Money market and interest-bearing checking deposits26,798 23,417 22,378 21,585 22,744 
Savings deposits2,454 2,166 2,199 2,133 2,013 
Customer certificates of deposit2,626 2,522 2,090 2,470 3,198 
Other time deposits17 705 2 1 2 
Foreign office time deposits90 27 25 56 33 
Total interest-bearing deposits31,985 28,837 26,694 26,245 27,990 
Total deposits65,038 55,481 55,935 57,258 57,741 
Short-term borrowings314 369 62 277 138 
Accrued expenses and other liabilities1,554 1,375 1,076 996 1,273 
Medium- and long-term debt6,549 6,955 5,842 4,969 4,917 
Total liabilities73,455 64,180 62,915 63,500 64,069 
Shareholders’ equity7,691 7,308 7,809 7,952 7,674 
Total liabilities and shareholders’ equity$81,146 $71,488 $70,724 $71,452 $71,743 
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HISTORICAL REVIEW - STATEMENTS OF INCOME
Comerica Incorporated and Subsidiaries
CONSOLIDATED FINANCIAL INFORMATION
(in millions, except per share data)
Years Ended December 3120202019201820172016
INTEREST INCOME
Interest and fees on loans$1,773 $2,439 $2,262 $1,872 $1,635 
Interest on investment securities291 297 265 250 247 
Interest on short-term investments29 71 92 60 27 
Total interest income2,093 2,807 2,619 2,182 1,909 
INTEREST EXPENSE
Interest on deposits101 262 122 42 40 
Interest on short-term borrowings1 9 1 3 — 
Interest on medium- and long-term debt80 197 144 76 72 
Total interest expense182 468 267 121 112 
Net interest income1,911 2,339 2,352 2,061 1,797 
Provision for credit losses537 74 (1)74 248 
Net interest income after provision for credit losses1,374 2,265 2,353 1,987 1,549 
NONINTEREST INCOME
Card fees270 257 244 333 303 
Fiduciary income209 206 206 198 190 
Service charges on deposit accounts185 203 211 227 219 
Commercial lending fees77 91 85 85 89 
Bank-owned life insurance44 41 39 43 42 
Foreign exchange income40 44 47 45 42 
Letter of credit fees37 38 40 45 50 
Brokerage fees21 28 27 23 19 
Net securities losses— (7)(19)— — 
Other noninterest income118 109 96 108 97 
Total noninterest income1,001 1,010 976 1,107 1,051 
NONINTEREST EXPENSES
Salaries and benefits expense1,019 1,020 1,009 961 989 
Outside processing fee expense242 264 255 366 336 
Occupancy expense156 154 152 154 157 
Software expense154 117 125 126 119 
Equipment expense49 50 48 45 53 
Advertising expense35 34 30 28 21 
FDIC insurance expense33 23 42 51 54 
Restructuring charges— — 53 45 93 
Other noninterest expenses96 81 80 84 108 
Total noninterest expenses1,784 1,743 1,794 1,860 1,930 
Income before income taxes591 1,532 1,535 1,234 670 
Provision for income taxes117 334 300 491 193 
NET INCOME474 1,198 1,235 743 477 
Less:
Income allocated to participating securities2 7 8 5 4 
Preferred stock dividends13 — — — — 
Net income attributable to common shares$459 $1,191 $1,227 $738 $473 
Earnings per common share:
Basic$3.29 $7.95 $7.31 $4.23 $2.74 
Diluted3.27 7.87 7.20 4.14 2.68 
Comprehensive income877 1,572 1,076 762 523 
Cash dividends declared on common stock378 398 309 193 154 
Cash dividends declared per common share2.72 2.68 1.84 1.09 0.89 
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HISTORICAL REVIEW - STATISTICAL DATA
Comerica Incorporated and Subsidiaries
CONSOLIDATED FINANCIAL INFORMATION
Years Ended December 3120202019201820172016
Average Rates
Interest-bearing deposits with banks0.27 %2.05 %1.94 %1.09 %0.51 %
Other short-term investments0.72 1.26 0.96 0.64 0.61 
Investment securities2.21 2.44 2.19 2.05 2.02 
Commercial loans3.42 4.81 4.64 3.82 3.25 
Real estate construction loans3.76 5.54 5.21 4.18 3.63 
Commercial mortgage loans3.25 4.88 4.69 3.97 3.49 
Lease financing3.37 3.44 3.82 2.63 2.64 
International loans3.61 5.13 4.97 4.07 3.63 
Residential mortgage loans3.45 3.85 3.77 3.70 3.76 
Consumer loans3.80 4.85 4.41 3.70 3.32 
Total loans3.44 4.83 4.64 3.85 3.34 
Interest income as a percentage of earning assets2.79 4.24 3.99 3.29 2.88 
Domestic deposits0.31 0.91 0.45 0.16 0.14 
Deposits in foreign offices0.42 1.39 1.19 0.64 0.35 
Total interest-bearing deposits0.31 0.91 0.46 0.16 0.14 
Short-term borrowings0.32 2.39 1.93 1.14 0.45 
Medium- and long-term debt1.23 2.82 2.47 1.51 1.45 
Interest expense as a percentage of interest-bearing sources0.47 1.29 0.82 0.38 0.34 
Interest rate spread2.32 2.95 3.17 2.91 2.54 
Impact of net noninterest-bearing sources of funds0.22 0.59 0.41 0.20 0.17 
Net interest margin as a percentage of earning assets2.54 %3.54 %3.58 %3.11 %2.71 %
Ratios
Return on average common shareholders’ equity6.18 %16.39 %15.82 %9.34 %6.22 %
Return on average assets0.58 1.68 1.75 1.04 0.67 
Efficiency ratio (a)61.15 51.82 53.56 58.64 67.62 
Common equity tier 1 capital as a percentage of risk weighted assets10.34 10.13 11.14 11.68 11.09 
Tier 1 capital as a percentage of risk-weighted assets10.93 10.13 11.14 11.68 11.09 
Total capital as a percentage of risk-weighted assets13.20 12.13 13.21 13.84 13.27 
Common equity ratio8.69 9.98 10.60 11.13 10.68 
Tangible common equity as a percentage of tangible assets (b)8.02 9.19 9.78 10.32 9.89 
Per Common Share Data
Book value at year-end$55.01 $51.57 $46.89 $46.07 $44.47 
Market value at year-end55.86 71.75 68.69 86.81 68.11 
Market value for the year
High71.75 88.96 102.66 88.22 70.44 
Low26.05 58.54 63.69 64.04 30.48 
Other Data (share data in millions)
Average common shares outstanding - basic139 150 168 174 172 
Average common shares outstanding - diluted140 151 171 178 177 
Number of banking centers433 436 436 438 458 
Number of employees (full-time equivalent)7,681 7,747 7,865 7,999 7,960 
(a)Noninterest expenses as a percentage of the sum of net interest income and noninterest income excluding net losses from securities and a derivative contract tied to the conversion rate of Visa Class B shares.
(b)See Supplemental Financial Data section for reconciliations of non-GAAP financial measures and regulatory ratios.

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Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized as of February 9, 2021.28, 2024.
COMERICA INCORPORATED
By: /s/ Curtis C. Farmer
 
Curtis C. Farmer
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities indicated as of February 9, 2021.28, 2024.
/s/ Curtis C. FarmerChairman, President, and Chief Executive Officer and
Curtis C. FarmerDirector (Principal Executive Officer)
/s/ James J. HerzogSenior Executive Vice President and Chief Financial Officer
James J. Herzog(Principal Financial Officer)
/s/ Mauricio A. OrtizSeniorExecutive Vice President, and Chief Accounting Officer
Mauricio A. Ortiz(Principaland Controller (Principal Accounting Officer)
/s/ Arthur G. AnguloDirector
Arthur G. Angulo
/s/ Nancy AvilaDirector
Nancy Avila
/s/ Michael E. CollinsDirector
Michael E. CollinsDirector
/s/ Roger A. CreggDirector
Roger A. Cregg
/s/ M. Alan GardnerDirector
M. Alan Gardner
/s/ T. Kevin DeNicola
T. Kevin DeNicola/s Jacqueline P. KaneDirector
Jacqueline P. Kane
/s/ Derek J. KerrDirector
Derek J. Kerr
/s/ Richard G. LindnerDirector
 Richard G. Lindner
/s/ Jennifer H. SampsonDirector
Jennifer H. Sampson
/s/ Barbara R. SmithDirector
Barbara R. Smith
/s/ Robert S. TaubmanDirector
Robert S. Taubman
/s/ Robert S. TaubmanDirector
/s/ Reginald M. Turner, Jr.
Reginald M. Turner, Jr.Director
/s/ Nina G. VacaDirector
Nina G. VacaDirector
/s/ Michael G. Van de VenDirector
Michael G. Van de VenDirector
S-1