Comerica
Annual Report 2002

Plain-text annual report

earning customer trust every day A N N U A L R E P O R T 2 0 0 2 O U R V I S I O N Comerica is in business to help people be successful. We are committed to delivering the highest quality financial services by: Providing outstanding value and building enduring customer relationships Creating a positive environment for our colleagues, built on trust, teamwork and respect Demonstrating leadership in our communities Ensuring a consistent, superior return for our owners O U R C O R E V A L U E S Customer Service Teamwork Flexibility/Adapting to Change Trust/Integrity Ownership Learning and Personal Growth C O R P O R A T E P R O F I L E F A S T F A C T S O N C O M E R I C A Comerica Incorporated (NYSE: CMA) is a financial services company focused on business banking and asset gathering. Through its more than 500 customer-service locations, including branch, lending and investment offices, Comerica helps businesses and people be successful. Comerica is ideally positioned to deliver high quality financial services in Michigan, California and Texas, as well as in Florida, and numerous other states, Canada and Mexico. Munder Capital Management and Comerica Securities are investment services affiliates of Comerica. ◗ More than 11,000 employees focused on relationship management ◗ Among the 20 largest banking companies in the U.S., with $53 billion in total assets at December 31, 2002 ◗ 3rd largest SBA 7(a) lender in the nation, and among the top 20 U.S. bank holding companies in small business loans ◗ No.1 and 10 among the top 50 U.S. bank holding companies, in commercial loans as a percent of total assets and commercial loans, respectively C O N T E N T S 1 2 4 8 16 22 Financial Highlights At a Glance Letter to Shareholders Earning Customer Trust Our Leadership Team Financial Review and Reports (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) F I N A N C I A L H I G H L I G H T S (dollar amounts in millions, except per share data) Change Years Ended December 31 2002 2001 Amount Percent I N C O M E S T A T E M E N T Net interest income Net income Basic net income per common share Diluted net income per common share Cash dividends per common share Book value per common share Market value per common share $ 2,132 601 3.43 3.40 1.92 28.31 43.24 $ 2,102 710 3.93 3.88 1.76 27.17 57.30 $ 30 (109) (0.50) (0.48) 0.16 1.14 (14.06) R A T I O S Return on average assets Return on average common shareholders’ equity Average common shareholders’ equity as a percentage of average assets Tier 1 common capital as a percentage of risk-weighted assets 1.18% 12.31 1.43% 15.16 9.55 7.39 9.27 7.30 B A L A N C E S H E E T ( A T D E C E M B E R 3 1 ) Total assets Total earning assets Loans Business loans Deposits Common shareholders’ equity $53,301 47,780 42,281 39,954 41,775 4,947 $50,750 46,566 41,196 38,933 37,570 4,807 $ 2,551 1,214 1,085 1,021 4,205 140 1% (15) (13) (12) 9 4 (25) 5% 3 3 3 11 3 $791 $759 $710 $651 $601 $4.31 $4.13 $3.88 $3.51 $3.40 21.16% 21.78% 19.52% 15.16% 12.31% 1998 1999 2000 2001 2002 1998 1999 2000 2001 2002 1998 1999 2000 2001 2002 Net Income (in millions) Diluted Net Income per Common Share (in dollars) Return on Average Common Shareholders’ Equity (in percentages) 1 AT A G L A N C E B U S I N E S S B A N K Comerica’s Business Bank provides companies with an extensive array of credit and non-credit financial products and services. It builds long-lasting relationships with business customers, with an emphasis on middle market companies. The Business Bank offers highly professional business lending, international banking and cash management services. I N D I V I D U A L B A N K The professionals of Comerica’s Individual Bank deliver diverse products and services to consumers, and owners and managers of small businesses. Comerica’s extensive network of branch offices, automated teller machines and supermarket locations, along with web banking, gives customers easy, convenient access to the bank’s portfolio of products. A host of private banking services, including personal trust, private lending and financial planning, round out the Individual Bank’s complement of financial services. I N V E S T M E N T B A N K Comerica’s Investment Bank offers a full range of institutional trust, investment and insurance services to individuals, companies, labor unions and other entities. Major areas of focus include institutional trust, retirement services, full- service brokerage services and insurance. The Investment Bank continues to be a driving force in managing client assets. 2 O R G A N I Z A T I O N S T R E N G T H S S T R A T E G I E S Middle Market Banking includes Private Equity National Business Finance ◗ Commercial Real Estate ◗ National Dealer Services ◗ Comerica Leasing Services Global Corporate Banking ◗ U.S. Banking International Finance Treasury Management Services ◗ Corporate Finance W.Y. Campbell & Co. Private Banking Small Business Banking Personal Financial Services Investment Services ◗ Comerica Securities ◗ Munder Capital Management ◗ Wilson, Kemp & Associates Comerica Insurance Services Institutional Trust Retirement Services Strong underwriting skills; consistent provider of credit Flexibility and responsiveness Experienced and seasoned staff Leading-edge Internet-based treasury management products and services ◗ North American platform fulfills U.S., Canadian and Mexican dollar-based needs of commercial customers Emphasize relationship-focused business rather than transactional business Focus on high growth urban markets and industries ◗ Deepen relationships vertically with businesses and their owners through Connectivity* initiative Leverage depth of experience, industry knowledge and local decision making ◗ Grow middle market relationships ◗ Nationally recognized leader in small business banking ◗ Complete portfolio of diverse, competitively priced products Proven leader in gathering consumer assets Leading-edge sales and service culture, driven by a commitment to build strong customer relationships ◗ Connectivity approach ensures clients benefit from all Comerica products and services Service is a key differentiating factor in client retention Experienced and knowledgeable staff with the ability to meet customers’ expectations through all economic cycles ◗ Outstanding trust/custodial capabilities designed for distinct client segments Solid partnerships with Business Bank and Individual Bank customers ◗ One-stop shop for customized company and union retirement plans 3 Invest in new branches and additional delivery channels in high growth urban markets Introduce new deposit products, web-banking services and promotional programs ◗ Maximize the wealth management opportunities from strategic business alliances, including Dain Rauscher and PaineWebber Leverage referrals, both internally and externally, through Connectivity initiative Target small-business opportunities via comprehensive niche marketing initiatives ◗ Continue to broaden product offerings and delivery channels ◗ Maintain efficient, effective technology platforms for brokerage and trust services Focus on niche business opportunities in Institutional Trust and Retirement Services ◗ Continue to focus on staff development to provide exceptional client service ◗ Deepen existing partnerships and establish new partnerships both within and outside of Comerica *Connectivity is a corporate-wide initiative to maximize the potential of customer relationships ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ ◗ L E T T E R T O S H A R E H O L D E R S We believe we have the right business model and the right strategy to capitalize on an improving economy when improvement does come. Ralph W. Babb Jr. Chairman, President and Chief Executive Officer 4 Dear Fellow Shareholders, 2002 was a difficult year for the nation’s economy, the banking sector and Comerica. We addressed the many challenges presented by a slow economy and weak financial markets, and we made progress on many fronts, including credit quality. This is my first annual report to you as chairman of Comerica. Therefore, it’s an appropriate opportunity to present my views of where our company is today, where it’s going, and what that is likely to mean for your investment in Comerica. First and foremost, we are a lender – specifically to middle market and small business customers. Some banks have de- emphasized their focus on lending. We haven’t. We are good at commercial lending to small and middle market companies in urban markets, primarily because we deliver true relationship banking combined with solid credit management. Lending is a cyclical business, but we believe that our approach to this business has and will continue to generate attractive returns for our shareholders over time. Our other lines of business in the Individual and Investment Banks dovetail nicely with our lending business. We offer a broad range of asset management and personal financial services to entrepreneurs, business owners and other affluent individuals with the same dedication to relationship management that is the hallmark of our commercial lending business. We believe these principal lines of business, combined with enhanced risk management processes, create a platform with significant competitive advantages for Comerica. Fundamentally, we like the position we’re in. Our difficulties in 2002 should not obscure the fact that on many fronts Comerica took steps that we believe will benefit the company when the economy improves. Our commercial lending business generated modest growth at a time when many banks were unable to grow. Because we seek to lend in a measured but consistent way through all phases of the economic cycles, we expect, as we have in the past, to gain market share in the middle market. At the same time, we took steps to adjust our mix of commercial loans by reducing our exposure to large corporate and international loans that did not fit with our focus on true relationship banking. Customer Focus We are constantly fine-tuning our products for our commercial customers. For example, we made significant enhancements to the flexibility and functionality of our image services in 2002. Commercial customers can now access a wide array of image services over the Internet or through Comerica’s proprietary network. Since the creation of our image archive in 1997, we have built an active inventory of more than 2.4 billion 5 images, providing customers and employees access to every deposit and check presented to any of our image capture sites over the last five years. We also continued to help business owners and managers eliminate costly time spent preparing, distributing and reconciling paper checks through use of our Comerica CompCARDSM, which enables companies to disburse funds to their employees without using a paper check. We know our customers like what we do. Our middle market customer satisfaction rankings were among the highest of national and regional banks in all our major markets, according to a survey conducted by a global financial services research firm. And, our Treasury Management customers gave Comerica the highest marks in product rankings (e.g., accuracy, timeliness, overall capabilities), relationship management, and sales and service, according to another survey of regional and national banks. We invested $20 million to renovate branches and open new ones. This investment is key to sustaining a market- leading position in the Michigan retail banking market. Over time, we also believe it will help us enhance the performance of our other lines of business which are focused on our affluent customers, business owners and entrepreneurs. For example, $1.92 $1.76 $1.60 $1.44 $1.28 1998 1999 2000 2001 2002 Dividends per Common Share (in dollars) branches are particularly important to our small business customers, who tend to visit a branch 12 times per month. Equally gratifying, we witnessed improved rates of growth in 2002 in small business banking, private banking, asset management businesses, and retail transaction accounts, which translate into relationships. In many cases, these were double digit rates of growth, which reinforces our view that the best of these businesses is yet to come. With our primary footprint in Michigan, California, Texas and Florida, we have the critical mass to continue to grow these core businesses. At the heart of our success is relationships. During these challenging economic times, we continue to earn our customers’ trust and build and strengthen those relationships. I invite you to read about four of our customers – Dr. Toni Hoover, Wallace Tsuha of Saturn Electronics & Engineering, Luis Spinola of Azteca Enterprises & Omega Contracting, and Mark Brody of Cline Cellars – following this letter. Finally, in 2002 we took the steps we had to take to address the credit quality issues created by continued economic weakness that year. An effective emphasis on credit quality has long been a competitive advantage for Comerica and we are committed to sustaining and enhancing that competitive edge. 2003 Priorities Let me now address our priorities for 2003 in more detail. We know the economy will improve, but none of us knows when, so 2003 is a year in which we will focus on strengthening the fundamentals so that, when the economy does rebound, Comerica will be ready to grow. This year, we will maintain our focus on our core strategy – relationship-based middle 6 market lending – and continue to lend during the current economic environment, while remaining alert and disciplined about credit quality. We will continue to grow the Individual and Investment Banks to meet the needs of our small business and private banking customers, building new branches and refurbishing existing ones. Our colleagues have embraced Connectivity, our national initiative to increase fee income and our share of new and current customers’ business through cross-selling. This year, we will continue to build on their enthusiasm and success, and provide additional tools and training. And, we will strengthen our historically strong risk management process. This is a challenging environment for large, complex banks like Comerica. Consequently, we are building a strong, effective Enterprise-Wide Risk Management Program to manage risk on a consistent, coordinated basis across our company, rather than within individual operating units. During 2003, this multi-year effort will focus on designing and implementing a system to enhance our measurement and management of credit and operational risk. By continuing a strong emphasis on credit risk management, and building upon our successful management of operational and interest rate risk, we will reinforce an historic advantage over our competitors, while giving our colleagues new tools to help our customers ‘make it work.’ The outcome of all of this will be better information for making strategic decisions and allocating resources. Other Highlights In 2002, we marked the end of an era. Comerica’s leadership transition was successfully completed when Gene Miller retired October 1 after 47 years at Comerica, including the last nine as chairman and chief executive officer. Gene was a principal architect of today’s Comerica and all of my colleagues and I are deeply grateful to Comparison of Five Year Cumulative Total Return Among Comerica Incorporated, Keefe 50-Bank Index and S&P 500 Index (assumes $100 invested on 12/31/97 and reinvestment of dividends) Gene for his leadership. We wish him well as he embarks on this new phase of his life. As we have in each of the past 34 consecutive years, Comerica increased its annual dividend. In January 2003, we raised the quarterly dividend for common stock by four percent to $0.50 per share. We know improvements in growth and credit quality will parallel improvement in the economy. We are well aware that we enter 2003 with a great deal of economic and national uncertainty. Nonetheless, we believe we have the right business model and the right strategy to capitalize on an improving economy when improvement does come. Comerica has a proud 154-year history of service through many trying times for our country, our economy and the world around us. Our talented colleagues are dedicated to our core values and committed to delivering the highest quality financial services for all of our customers. I am confident that this dedication will translate into attractive future returns for our shareholders. Ralph W. Babb Jr. Chairman, President and Chief Executive Officer 7 Ann Arbor I trust their advice. 8 T O N I H O O V E R Toni Hoover knows that life doesn’t always go according to plan. Following the unexpected death of her husband, Hoover realized she needed assistance with her personal finances. Referred to Comerica by her legal counsel, Hoover met with Deb Jones and Jim Pollock of Comerica’s Private Banking group. 9 The first order of business was to create a detailed financial plan to give Hoover a solid understanding of her financial picture and a framework to meet future goals. Next, Jones and Pollock helped Hoover with her investment portfolio, estate and family gift-planning, wire transfer services, mortgage refinancing and general banking needs. As vice president of project management at Pfizer Global Research and Development, Hoover travels the world constantly. “I need advisors who can meet my hectic schedule,” Hoover said. “Deb and Jim often meet me at my office which is very convenient. “I now have the tools to build and protect my financial security,” Hoover said. “With the private bankers at Comerica, I feel like I have a whole team working on my behalf.” Auburn Hills We trust each other. 10 S AT U R N E L E C T R O N I C S & E N G I N E E R I N G , I N C . “When two people know each other, they can speak frankly to one another, and that is what Dave and I have done these past 12 years,” said Wallace “Wally” Tsuha Jr., chairman and chief executive officer of Saturn Electronics & Engineering, Inc. “Dave” is Dave Marvin, a Comerica Middle Market Banking senior manager in Michigan. 11 Saturn Electronics & Engineering, Inc., was a five-year-old company with just under $10 million in annual revenue when Tsuha and Comerica Bank first forged a financial relationship in 1990. Since then, Saturn has grown to become a $375 million, full-service global supplier of electronic components and assemblies. Among Saturn’s biggest customers are the Big Three automakers and other key Tier 1 suppliers. “Comerica understands the ups and downs of our industry, and is willing to work with us, side by side,” Tsuha said. “Unlike larger transaction-oriented banks, Comerica is all about long-term relationships, and that is important to us. “We appreciate the support of Dave and his team, and the fine work of the Business & Development Services area, too.“ Dallas He’s a trusted consultant. 12 A Z T E C A E N T E R P R I S E S & OMEGA CONTRACTING, INC. “Cash flow is the life-blood of any small business,” said Luis Spinola, president of Azteca Enterprises & Omega Contracting, Inc., Dallas-based construction contracting firms. “Jesus Guevara and the Small Business group at Comerica understand this. We’ve built a solid relationship which enables us to think outside the box to get the financing done.” 13 Spinola started his first company in 1983 with just two employees. “I used to bank elsewhere, but when I asked for an increased credit line, they turned me down,” Spinola said. “A colleague suggested I meet with the team at Comerica and I’m glad I did. They were willing to work with the construction industry, they were straightforward and very fast.” Soon, Spinola’s company won contracts throughout Texas. Azteca Enterprises & Omega Contracting now has more than 450 employees and annual revenues of some $31 million. “I have a tremendous group of employees who look for ways to accelerate growth and minimize risk. Plus, I count on Jesus Guevara for recommendations on all sorts of financial issues. He’s more than a banker, he’s a trusted consultant.” Sonoma We trust them to deliver what we need. 14 C L I N E C E L L A R S They worked together in the early 1980s and in the next decade, veteran bankers Mark Brody and Greg Belanger were tough competitors. Today, Brody is chief executive officer of Cline Cellars, a Sonoma, California winery. Belanger heads Middle Market Banking-North for Comerica Bank- California. Brody selected Comerica as the winery’s primary banker. “It made sense to go with people we knew well and a bank with a proven track record,” he said. 15 Cline Cellars is recognized for its rich, quality wines, including its highly acclaimed zinfandels and syrahs. Named as a 2002 “Winery of the Year” by Wine and Spirits magazine, Cline produces some 175,000 cases annually from its 1,000 acres of exceptional vineyards. “From industry knowledge to responsiveness, Greg, Russ Colombo, Misako Noda and the entire Comerica team have been great,” Brody said. “They ask good questions, which I appreciate.” Comerica has put together a flexible financing package for the winery, which was founded by Fred and Nancy Cline. “Comerica understands how specific products fit our distinct needs, so the bank offers us solutions that work,” Brody said. “They’re good after the sale as well as before, which I think is pretty darn important.” O U R L E A D E R S H I P T E A M C O M E R I C A I N C O R P O R A T E D B O A R D O F D I R E C T O R S A N T H O N Y F. E A R L E Y J R . Chairman and Chief Executive Officer DTE Energy Company (b) M A X M . F I S H E R Investor (b) R O G E R F R I D H O L M President St. Clair Group (e) T O D D W . H E R R I C K President and Chief Executive Officer Tecumseh Products Company (g) D A V I D B A K E R L E W I S Chairman and Founder Lewis and Munday, P.C. (f) J O H N D . L E W I S Vice Chairman Comerica Incorporated and Comerica Bank (f) R A L P H W . B A B B J R . Chairman, President and Chief Executive Officer Comerica Incorporated and Comerica Bank (d, e, f, g) L I L L I A N B A U D E R , P H . D . Vice President Corporate Affairs Masco Corporation (a, c) J O S E P H J . B U T T I G I E G I I I Vice Chairman Comerica Incorporated and Comerica Bank (g) J A M E S F. C O R D E S Retired Executive Vice President The Coastal Corporation (g) P E T E R D . C U M M I N G S Chairman Ram Development Company (c, f) J . P H I L I P D I N A P O L I President J.P. DiNapoli Companies, Inc. (a, c) 16 W A Y N E B . L Y O N Retired Chairman Lifestyle Furnishings International, Inc. (b) A L F R E D A . P I E R G A L L I N I Retired Chairman and Chief Executive Officer Novartis Consumer Health WorldWide (b) H O W A R D F. S I M S Chairman Sims Design Group, Inc. (c) R O B E R T S . T A U B M A N President and Chief Executive Officer The Taubman Company, Inc. (g) W I L L I A M P. V I T I T O E Retired Chairman and Chief Executive Officer Washington Energy Company (a) M A R T I N D . W A L K E R Retired Principal MORWAL Investments (a, b) P A T R I C I A M . W A L L I N G T O N President CIO Associates (f) G A I L L . W A R D E N President and Chief Executive Officer Henry Ford Health System (e) K E N N E T H L . W A Y Retired Chairman Lear Corporation (b) B O A R D C O M M I T T E E S (a) Audit & Legal (b) Compensation (c) Corporate Governance & Nominating (d) Executive (e) Public Responsibility (f) Trust & Investment (g) Risk Asset 17 C O M E R I C A B A N K - C A L I F O R N I A D I R E C T O R S C O M E R I C A B A N K - T E X A S D I R E C T O R S T H E O D O R E J . B I A G I N I Principal Biagini Properties J . M I C H A E L F U L T O N President and Chief Executive Officer Comerica Bank-California J A M E S F. C O R D E S Retired Executive Vice President The Coastal Corporation J A K E K A M I N Chairman South Texas Advisory Board Comerica Bank-Texas J A C K C . C A R S T E N Managing Director Horizon Ventures W A L T E R T . K A C Z M A R E K Executive Vice President Comerica Bank-California T H O M A S M . D U N N I N G Chairman and Chief Executive Officer Lockton Dunning Benefit Company W . T H O M A S M C Q U A I D Chairman and Chief Executive Officer Performance Properties Corporation L E O E . C H A V E Z , P H . D . Executive Vice President Community Foundation Silicon Valley E L I N O R W E I S S M A N S F I E L D Attorney J A C K W . C O N N E R Chairman Comerica Bank-California C H A R L E S T . O W E N President and Publisher San Diego Business Journal R U B E N E . E S Q U I V E L Vice President Community and Corporate Relations University of Texas Southwestern Medical Center N O R M A N P. C R E I G H T O N Vice Chairman Comerica Bank-California E D W A R D P. R O S K I J R . President Majestic Realty Company C H A R L E S L . G U M M E R President and Chief Executive Officer Comerica Bank-Texas J . P H I L I P D I N A P O L I President J.P. DiNapoli Companies, Inc. N . J O H N D O U G L A S President and Chief Executive Officer AM Power Radio D A V I D C . W H I T E Executive Vice President Comerica Bank-California L E W I S N . W O L F F Chairman and Chief Executive Officer Wolff DiNapoli R E V. Z A N H O L M E S J R . Retired Senior Pastor St. Luke Community United Methodist Church R A Y M O N D D . N A S H E R Chairman Comerica Bank-Texas Chairman The Nasher Company C A L V I N E . P E R S O N Owner Calvin E. Person and Associates B O O N E P O W E L L J R . Retired Chairman Baylor Health Care System I N M E M O R I A M George L. Graziadio Jr., who passed away in June 2002, served with dedication and distinction as chairman of Comerica Bank-California. We remember and honor his service to our company, including his leadership in helping bring together Imperial Bancorp with Comerica Bank-California, a combination that created the fourth largest banking company in the Golden State. 18 M A N A G E M E N T C O U N C I L R A L P H W . B A B B J R . Chairman, President and Chief Executive Officer J O N W . B I L S T R O M Executive Vice President and Chief Governance and Regulatory Affairs Officer D A L E E . G R E E N E Executive Vice President and Chief Credit Officer S U S A N R . J O S E P H Senior Vice President and General Auditor J O S E P H J . B U T T I G I E G I I I Vice Chairman Business Bank J O H N D . L E W I S Vice Chairman Individual and Investment Banks E L I Z A B E T H S . A C T O N Executive Vice President and Chief Financial Officer J O H N R . B E R A N Executive Vice President and Chief Information Officer R I C H A R D A . C O L L I S T E R Executive Vice President Corporate Staff C H A R L E S L . G U M M E R President and Chief Executive Officer Comerica Bank-Texas G E O R G E W . M A D I S O N Executive Vice President Corporate Secretary and General Counsel G E O R G E C . E S H E L M A N Executive Vice President Investment Bank J O H N R . H A G G E R T Y Executive Vice President Small Business Banking and Personal Financial Services R O N A L D P. M A R C I N E L L I Executive Vice President National Business Finance J . M I C H A E L F U L T O N President and Chief Executive Officer Comerica Bank-California T H O M A S R . J O H N S O N Executive Vice President Enterprise-Wide Risk Management Program D A V I D B . S T E P H E N S Executive Vice President Private Banking 19 C O M M E R C I A L B A N K S O T H E R U N I T S C O M E R I C A B A N K Comerica Tower at Detroit Center 500 Woodward Avenue, MC 3391 Detroit, Michigan 48226 (313) 222-4000 (248) 371-5000 Ralph W. Babb Jr. Chairman, President and Chief Executive Officer Full-service bank headquartered in Detroit with 219 branch offices, 36 ComeriMARTs and 526 ATMs at year-end 2002 in metropolitan Detroit and Ann Arbor, Battle Creek, Grand Rapids, Jackson, Kalamazoo, Lansing, Midland and Muskegon. Comerica is the largest bank headquartered in Detroit. Comerica is Michigan’s oldest banking company (1849). Florida region 1800 Corporate Blvd., N.W. Suite 100, MC 5172 Boca Raton, Florida 33431 (800) 777-7198 Specializes in Private Banking services, with 9 office locations, 4 of which are full-service branches, and 2 ATMs at year- end 2002, in Boca Raton, Fort Lauderdale, Palm Beach Gardens, Naples, Sarasota and Tampa. Other national businesses also operate in Florida. Comerica entered the Florida market in 1979. Canadian region Royal Bank Plaza, South Tower 200 Bay Street, Suite 2210 P.O. Box 61 Toronto, Ontario M5J2J2 (416) 367-3113 Specializes in providing a wide range of corporate banking, treasury, cash management and trade services in Canada. C O M E R I C A B A N K M E X I C O , S . A . Edificio Forum Andres Bello No. 10 Piso 17 Col. Chapultepec Polanco Mexico, D.F. 11560 (011) 525-279-3700 Claude H. Miller Managing Director Headquartered in Mexico City, with additional offices in Monterrey, Querétaro and Guadalajara. Comerica Bank Mexico, S.A. provides a wide range of corporate banking and trade finance services to middle market and large corporate companies. C O M E R I C A B A N K - C A L I F O R N I A 333 W. Santa Clara Street MC 4805 San Jose, California 95113 (408) 556-5000 J. Michael Fulton President and Chief Executive Officer Full-service bank headquartered in San Jose with 41 branch offices and 36 ATMs at year-end 2002 in San Jose, Sacramento, Fresno, the greater San Francisco Bay/San Jose area, Santa Cruz Coastal, greater Los Angeles/Orange County, and San Diego. Additional regional banking offices in Phoenix, Denver, and Kirkland, Wash. SBA Lending offices are located around the country, and Technology and Life Sciences Division offices serve technology centers nationwide. Comerica Bank-California is the 4th largest bank in California. Comerica entered the California market in 1991. C O M E R I C A B A N K - T E X A S 1601 Elm Street, MC 6507 Dallas, Texas 75201 (214) 589-1400 Charles L. Gummer President and Chief Executive Officer Full-service bank headquartered in Dallas with 47 branch offices, 3 ComeriMARTs and 57 ATMs at year-end 2002 in the Dallas/Fort Worth Metroplex, Austin and the greater Houston area. Comerica Bank-Texas targets owner- managed businesses by actively lending to middle market businesses, small businesses and local entrepreneurs. Comerica Bank-Texas is the 6th largest bank in Texas. Comerica entered the Texas market in 1988. 20 C O M E R I C A S E C U R I T I E S , I N C . A full-service broker-dealer that offers stocks, bonds, mutual funds and annuities to individual investors, along with investment banking services. C O M E R I C A I N S U R A N C E S E R V I C E S , I N C . Offers life, disability, long-term care, group benefits, and property and casualty insurance to businesses and individuals. P R O F E S S I O N A L L I F E U N D E R W R I T E R S S E R V I C E S , I N C . ( P L U S ) Provides life insurance, annuities and disability insurance products to independent insurance agents. M U N D E R C A P I TA L M A N A G E M E N T Provides investment advisory services to institutions, municipalities, unions, charitable organizations and individuals across North America. Also serves as investment manager for The Munder Funds. Framlington Holdings Limited, a London-based international investment advisor, is a subsidiary of Munder. W I L S O N , K E M P & A S S O C I AT E S , I N C . Provides account management services to private investors, corporations, municipalities and charitable institutions throughout the United States. W. Y. C A M P B E L L & C O M PA N Y Provides investment banking and corporate finance services to Fortune 500 companies and middle-market firms. C O M E R I C A W E S T I N C O R P O R AT E D U.S. Banking-West Group originates mid-sized loans to business customers with specific emphasis on the Western United States. C O M E R I C A L E A S I N G C O R P O R AT I O N Provides equipment leasing and financing services for businesses throughout the United States. C O M E R I C A B A N K & T R U S T Provides a national platform for the delivery of trust, investment management and other banking services. (Select businesses also having locations outside of Comerica’s primary markets) M I D D L E M A R K E T B A N K I N G Cincinnati Cleveland Denver Indianapolis Kirkland, Wash. Phoenix Portland I N S T I T U T I O N A L T R U S T Chicago I N T E R N AT I O N A L F I N A N C E Chicago Hong Kong Sao Paulo, Brazil N AT I O N A L D E A L E R S E R V I C E S Chicago Denver P R I VAT E B A N K I N G C E N T E R S Chicago Cleveland Denver Memphis Minneapolis New York City Phoenix S B A L E N D I N G Barrington, Ill. Charlotte, N.C. Chicago Cincinnati Cleveland Denver New Orleans Olympia, Wash. Phoenix Raleigh-Durham, N.C. T E C H N O L O G Y & L I F E S C I E N C E S Atlanta Boston Denver Kirkland, Wash. New York City Philadelphia Phoenix Raleigh-Durham, N.C. Reston, Va. U . S . B A N K I N G Chicago Las Vegas 21 Elizabeth S. Acton Executive Vice President and Chief Financial Officer F I N A N C I A L R E V I E W A N D R E P O R T S 24 24 32 33 36 Financial Results and Key Corporate Initiatives Earnings Performance Strategic Lines of Business Balance Sheet and Capital Funds Analysis Risk Management 46 50 76 76 Consolidated Financial Statements Notes to Consolidated Financial Statements Report of Management Report of Independent Auditors 77 Historical Review 22 

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