Comerica Incorporated : Q4 21 News Release

Dallas, TX/January 19, 2022

FULL-YEAR 2021 NET INCOME OF $1.2 BILLION, $8.35 PER SHARE AND FOURTH QUARTER 2021 NET INCOME OF $228 MILLION, $1.66 PER SHARE Robust Deposit Growth Supported Positive Trends in Loan Portfolio Strong Credit Quality and Fee Generation

Active Capital Management

"Our 2021 financial results were strong as we generated record earnings per share of $8.35," said Curt C. Farmer, Comerica Chairman and Chief Executive Officer. "Average deposits grew 19 percent, which supported solid loan performance in a number of businesses and provided significant excess liquidity to fund future growth. Revenue increased to $3.0 billion. While net interest income was challenged by the ultra-low-rate environment, noninterest income growth was broad-based, increasing 12 percent to an all-time high. Credit quality was excellent, and we released credit reserves. As a result of strong capital generation, we returned $1.1 billion to common shareholders through dividends and repurchases of 9.5 million, or 7 percent, of total shares. Altogether, this drove ROE to over 15 percent and ROA to 1.30 percent.

"With respect to the fourth quarter, excluding a nearly $1 billion decrease in PPP loans, average loans grew more than $600 million and we continued to drive very strong deposit growth. Robust fee income, exceptional credit quality and continued active capital management were also positive contributors to our performance. Expenses reflect investments in our people and technology to support our revenue-generating activities.

"As we look forward to the year ahead, we remain keenly focused on driving growth while maintaining our proven expense discipline as we invest in our businesses. Our customers and colleagues have successfully navigated the challenges of the past two years and today stand stronger and more confident about the future."

(dollar amounts in millions, except per share data)		4th Qtr '21		3rd Qtr '21		2021		2020
FINANCIAL RESULTS
Net interest income	$	461	$	475	$	1,844	$	1,911
Provision for credit losses		(25)		(42)		(384)		537
Noninterest income		289		280		1,123		1,001
Noninterest expenses (a)		486		465		1,861		1,754
Pre-tax income (a)		289		332		1,490		621
Provision for income taxes (a)		61		70		322		124
Net income (a)	$	228	$	262	$	1,168	$	497
Diluted earnings per common share (a)	$	1.66	$	1.90	$	8.35	$	3.43
Average loans		47,825		48,135		49,083		51,631
Average deposits		84,537		79,115		77,681		65,038
Return on average assets (a)		0.93%		1.14%		1.30%		0.61%
Return on average common shareholders' equity (a)		11.88		13.53		15.15		6.49
Net interest margin		2.04		2.23		2.21		2.54
Common equity Tier 1 capital ratio (b)		10.15		10.27		10.15		10.34
Tier 1 capital ratio (b)		10.72		10.85		10.72		10.93
Common equity ratio		7.93		7.84		7.93		8.69
Common shareholders' equity per share of common stock	$	57.41	$	56.55	$	57.41	$	55.01
Tangible common equity per share of common stock (c)		52.46		51.61		52.46		50.43

1. Recast 2020 results. See Reconciliations of Previously Reported Balances.
2. Estimated for December 31, 2021. Ratios reflect deferral of CECL model impact as calculated per regulatory guidance.
3. See Reconciliations of Non-GAAP Financial Measures and Regulatory Ratios.

Fourth Quarter 2021 Compared to Third Quarter 2021 Overview

Balance sheet items discussed in terms of average balances unless otherwise noted.

Loans remained relatively stable at $47.8 billion, including a $971 million decline to $689 million in Paycheck Protection Program (PPP) loans. Excluding the decline in PPP loans, average loans increased $661 million.

• Decreases of $308 million in Mortgage Banker Finance, $254 million in Business Banking, $218 million in Commercial Real Estate and $213 million in Retail Banking, partially offset by increases of $427 million in Corporate Banking and $192 million in general Middle Market.
• • Excluding the impact of PPP loans, growth in average loans was primarily driven by increases of $525 million in general Middle Market, $448 million in Corporate Banking and $195 million in National Dealer Services, partially offset by decreases of $305 million in Mortgage Banker Finance and $218 million in Commercial Real Estate.
• Including a $561 million decrease in PPP loans, period-end loans increased $1.1 billion to $49.3 billion, which reflected trends similar to the average balance activity along with strong seasonal growth.
• Average loan yields decreased 13 basis points to 3.26 percent, primarily driven by reduced PPP income as well as swap maturities and lower rate floors.

Securities increased $637 million, or 4 percent, to $16.6 billion.

• Increase of $972 million in mortgage-backed securities due to continued deployment of excess liquidity, partially offset by a $335 million decline in Treasury securities due to maturities.
• Average yield on securities decreased 5 basis points to 1.71 percent due to lower yields on reinvestments. Deposits increased $5.4 billion, or 7 percent, to $84.5 billion.
• Broad-basedgrowth as interest-bearing and noninterest-bearing deposits increased $1.4 billion and $4.0 billion, respectively, due to continued customer profitability and capital markets activity as well as seasonal trends and the liquidity injected into the economy through fiscal and monetary actions.
• The average cost of interest-bearing deposits decreased 1 basis point to 5 basis points, reflecting prudent management of relationship pricing.

Net interest income decreased $14 million to $461 million.

• Decrease driven by an $18 million decline in PPP income as well as swap maturities and lower rate floors on loans, partially offset by higher non-PPP loan volumes.
• Net interest margin decreased 19 basis points to 2.04 percent, primarily due to an increase in lower-yielding deposits held with the Federal Reserve Bank and the net impact of PPP forgiveness.

Provision for credit losses increased $17 million to a benefit of $25 million.

• The allowance for credit losses decreased $21 million to $618 million at December 31, 2021, reflecting a reduction in criticized loans and sustained favorable economic forecasts. As a percentage of total loans, the allowance for credit losses was 1.26 percent, a decrease of 7 basis points.
• Net loan recoveries were $4 million, or 0.03 percent of average loans.

Noninterest income increased $9 million to $289 million.

• Increases of $7 million in derivative income and $5 million in deferred compensation asset returns (offset in other noninterest expenses), partially offset by a $3 million decrease in commercial lending fees.

Noninterest expenses increased $21 million to $486 million.

• Increases of $10 million in salaries and benefits expense, $4 million in occupancy expense and $8 million in other noninterest expenses, which included a $4 million increase in legal fees.
• • The increase in salaries and benefits expense included increases of $6 million in technology-related contingent labor, $5 million each in deferred compensation expense (offset in other noninterest income) and staff insurance expense and $3 million from retention and severance payments, partially offset by a $9 million decrease in incentive compensation.

Capital position remained solid with a common equity Tier 1 capital ratio of 10.15 percent and a Tier 1 capital ratio of 10.72 percent.

• Returned a total of $139 million to common shareholders through share repurchases and dividends.
• • Repurchased $50 million of common stock (564 thousand shares) under the share repurchase program.
  • Declared dividends of $89 million on common stock and $6 million on preferred stock.

2

Full-Year 2021 Compared to Full-Year 2020 Overview

Balance sheet items discussed in terms of average balances unless otherwise noted.

Loans decreased $2.5 billion, or 5 percent, to $49.1 billion.

• Decreases of $1.6 billion in National Dealer Services, $645 million in Energy, $378 million in Technology and Life Sciences, $344 million in Mortgage Banker Finance and $289 million in general Middle Market, partially offset by increases of $414 million in Equity Fund Services, $326 million in Entertainment and $305 million in Environmental Services.
• Period-endloans decreased $3.0 billion, which was primarily driven by a $3.0 billion decline in PPP loans.
• Average yield on loans decreased 19 basis points to 3.25 percent, driven by lower rates, partially offset by higher loan fees, primarily PPP-related.

Securities increased $2.3 billion, or 17 percent, to $15.7 billion.

• Reflects investment of a portion of excess liquidity into mortgage-backed securities.
• Average yield on securities decreased 42 basis points to 1.79 percent, reflecting lower rates. Deposits increased $12.6 billion, or 19 percent, to $77.7 billion.
• Nearly every business line experienced growth as noninterest-bearing and interest-bearing deposits increased $8.4 billion and $4.3 billion, respectively, due to customers' solid profitability and capital markets activity as well as the liquidity injected into the economy through fiscal and monetary actions.
• Interest-bearingdeposit costs decreased 25 basis points to 6 basis points, reflecting prudent management of relationship pricing in a low interest rate environment.

Net interest income decreased $67 million to $1.8 billion.

• Net impact of lower rates was partially offset by an increase in PPP income. Provision for credit losses decreased $921 million to a benefit of $384 million.
• The allowance for credit losses decreased $374 million, primarily reflecting strong credit quality and the economy re-opening as well as improvements in the economic forecast and in the Energy portfolio since the onset of the pandemic in 2020. As a percentage of total loans, the allowance for credit losses decreased 64 basis points.
• Net loan recoveries were $10 million, or 0.02 percent of average loans, compared to net charge-offs of $196 million during 2020.

Noninterest income increased $122 million to $1.1 billion.

Effective January 1, 2021, the Corporation reported customer derivative income, previously a component of other noninterest income, and foreign exchange income as a combined item captioned by derivative income. See Reconciliations of Previously Reported Balances.

• Increases of $32 million in derivative income, $28 million in card fees, $27 million in commercial lending fees, $22 million in fiduciary income, $10 million in service charges on deposit accounts and $7 million in warrant- related income, partially offset by a decrease of $7 million in brokerage fees.

Noninterest expenses increased $107 million to $1.9 billion.

Effective January 1, 2021, the Corporation adopted a change in accounting method for certain components of expense related to the defined benefit pension plan. See Reconciliations of Previously Reported Balances.

• Increases of $114 million in salaries and benefits expense primarily related to strong financial performance, $24 million in outside processing fee expense, $14 million in consulting fees and $10 million in litigation-related expenses, partially offset by decreases of $34 million in pension expense (non-salary), $18 million in operational losses and $11 million in FDIC insurance expense.

• The increase in salaries and benefits expense was driven by increases of $80 million in performance-based incentive compensation (including share-based compensation), $11 million in staff insurance and $10 million in technology-related contract labor.

Provision for income taxes increased $198 million to $322 million.

• Included discrete tax benefits of $12 million related to annual federal filings, certain state matters and employee stock transactions.

Returned a total of $1.1 billion to common shareholders through share repurchases and dividends.

• Repurchased $720 million of common stock (9.5 million shares) under the share repurchase program.
• Declared dividends of $365 million on common stock and of $23 million on preferred stock.

3

Net Interest Income

Balance sheet items presented and discussed in terms of average balances.

(dollar amounts in millions)		4th Qtr '21		3rd Qtr '21		2021		2020
Net interest income	$	461	$	475	$	1,844	$	1,911
Net interest margin		2.04%		2.23%		2.21%		2.54%
Selected balances:
Total earning assets	$	89,898	$	84,788	$	83,719	$	75,419
Total loans		47,825		48,135		49,083		51,631
Total investment securities		16,606		15,969		15,724		13,432
Federal Reserve Bank deposits		24,849		20,176		18,347		9,944
Total deposits		84,537		79,115		77,681		65,038
Total noninterest-bearing deposits		45,980		41,984		41,441		33,053
Medium- and long-term debt		2,819		2,864		3,035		6,549

Net interest income decreased $14 million, and net interest margin decreased 19 basis points compared to third quarter 2021.

• Interest income on loans decreased $18 million and reduced net interest margin by 7 basis points, primarily due to the net impact of PPP activity (-$18 million, -6 basis points). Increases in interest income and margin from higher non-PPP loan balances (+$5 million, +1 basis point) were offset by swap maturities and lower rate floors (-$4 million, -1 basis point) as well as other portfolio dynamics (-$1 million, -1 basis point).
• • PPP income for the fourth quarter totaled $16 million, or 6 basis points, including $13 million in net accelerated fees resulting from forgiveness and $3 million in interest and regular amortization of deferred net fees combined.
• Interest income on investment securities increased $1 million, but reduced net interest margin by 1 basis point, as portfolio growth (+$3 million) was partially offset by the net impact of yields (-$2 million, -1 basis point).
• Interest income on short-term investments increased $2 million and reduced net interest margin by 11 basis points due to an increase in lower-yielding deposits with the Federal Reserve.
• Interest expense on debt decreased $1 million.

4

Credit Quality

"Credit metrics continued to be excellent, as evidenced by net recoveries for the quarter as well as the year, a feat not achieved in at least 30 years," said Farmer. "Criticized and nonaccrual loans decreased again in the fourth quarter, remaining at very low levels. Our allowance for credit losses declined to 1.26 percent of loans; yet coverage of nonperforming assets increased to 2.3 times. Assuming the economy remains strong, and the impacts of supply chain issues, labor constraints as well as inflation remain muted, we expect our allowance ratio to decline modestly over the next year."

(dollar amounts in millions)	4th Qtr '21	3rd Qtr '21	4th Qtr '20
Credit-relatedcharge-offs	$	20	$	26	$	39
Recoveries		24		24		10
Net credit-related (recoveries) charge-offs		(4)		2		29
Net credit-relatedcharge-offs/Average total loans		(0.03%)		0.01%		0.22%
Provision for credit losses	$	(25)	$	(42)	$	(17)
Nonperforming loans		268		295		350
Nonperforming assets (NPAs)		269		296		359
NPAs/Total loans and foreclosed property		0.55%		0.62%		0.69%
Loans past due 90 days or more and still accruing	$	27	$	12	$	45
Allowance for loan losses		588		609		948
Allowance for credit losses on lending-related commitments (a)		30		30		44
Total allowance for credit losses		618		639		992
Allowance for credit losses/Period-end total loans		1.26		1.33		1.90
Allowance for credit losses/Period-end total loans excluding PPP
loans		1.27		1.35		2.03
Allowance for credit losses/Nonperforming loans		2.3x		2.2x		2.8x

(a) Included in accrued expenses and other liabilities on the Consolidated Balance Sheets.

• The allowance for credit losses decreased $21 million to $618 million, or 1.26 percent of total loans, primarily reflecting a reduction in criticized loans, growing economic confidence and sustained favorable economic forecasts, although some level of uncertainty remains.
• Criticized loans decreased $245 million to $1.6 billion, or 3 percent of total loans. Criticized loans are generally consistent with the Special Mention, Substandard and Doubtful categories defined by regulatory authorities.
• • Criticized loans decreased in nearly all business lines, led by decreases of $90 million in Energy and $71 million in Commercial Real Estate.
• Nonperforming assets decreased $27 million to $269 million, or 0.55 percent of total loans and foreclosed property compared to 0.62 percent in third quarter 2021.
• • Nonperforming assets in Energy decreased by $14 million.
  • Loans transferred to nonaccrual totaled $15 million, a decrease of $40 million.
• Net recoveries totaled $4 million, compared to net charge-offs of $2 million in third quarter 2021.
• • Energy net recoveries totaled $19 million, compared to $16 million.

5