Comerica 2014 Annual Report Download - page 48

F-11
and across almost all business lines. The provision for credit losses on lending-related commitments was $4 million in 2013,
compared to $6 million in 2012. The $2 million decrease in the provision for credit losses on lending-related commitments resulted
primarily from the reduction of specific reserves established in 2012 for set aside/bonded stop loss commitments related to residential
real estate construction credits in the California market. The reserves for set aside/bonded stop loss commitments were reduced
in 2013 as the underlying commitments were funded and simultaneously charged-off against the allowance for loan losses. Lending-
related commitment charge-offs were insignificant in 2013 and 2012.
Noninterest income increased $12 million to $882 million in 2013, compared to $870 million in 2012. Fiduciary income
increased $13 million, or 8 percent in 2013, primarily due to an increase in personal trust fees, largely driven by an increase in the
volume of fiduciary services sold and the favorable impact on fees of market value increases. Commercial lending fees increased
$3 million, or 3 percent, primarily due to an increase in fees earned on the unused portion of lines of credit. Card fees increased
$9 million, or 14 percent in 2013, primarily reflecting volume-driven increases in commercial charge card and debit card interchange
revenue. Letter of credit fees decreased $7 million, or 10 percent in 2013, primarily due to a decrease in the volume of letters of
credit outstanding. Net securities gains (losses) decreased $13 million in 2013, primarily reflecting a decrease in gains on the
redemption of auction-rate securities. Other noninterest income increased $10 million, or 7 percent, in 2013, compared to 2012.
The increase primarily reflected increases of $6 million in deferred compensation plan asset returns, $6 million in income from
principal investing and warrants and $5 million in income from the Corporation's third-party credit card provider, partially offset
by a $5 million decrease in income from securities trading. The increase in income from the Corporation's third-party credit card
provider primarily reflected a change in the timing of the recognition of incentives from annually to quarterly in 2013. Refer to
the table provided under the “Noninterest Income” subheading previously in this section for the details of certain categories included
in other noninterest income.
Noninterest expenses decreased $35 million, or 2 percent, in 2013, compared to 2012. Salaries and benefits expense
decreased $9 million in 2013, primarily reflecting reduced staffing levels and lower executive incentive compensation, partially
offset by increases in deferred compensation expense and defined benefit pension expense, as well as annual merit increases. Net
occupancy expense decreased $8 million, primarily due to savings associated with leased properties exited in 2012, lower utility
expense and a reduction in equipment depreciation expense, partially offset by an increase in maintenance expense and an increase
in property tax expense as a result of refunds received in 2012 related to settlements of tax appeals. Outside processing fee expense
increased $12 million in 2013, primarily due to increased activity tied to fee-based revenue growth, transactional costs related to
increased volume and outsourcing of certain operational functions. Litigation-related expenses increased $29 million in 2013,
primarily reflecting an increase in legal reserves related to an unfavorable jury verdict on a lender liability case. FDIC insurance
expense decreased $5 million in 2013, primarily the result of lower assessment rates, reflecting improvements in the Corporation's
risk profile used in determining the quarterly assessment rate. Advertising expense decreased $6 million in 2013, primarily due
to timing changes related to certain marketing campaigns. Merger and restructuring charges related to the acquisition of Sterling
Bancshares, Inc. in 2011 decreased $35 million from 2012 as the integration plan was completed. Other noninterest expenses
decreased $12 million in 2013, primarily reflecting decreases of $7 million in other real estate expenses, $6 million in operational
losses, $7 million in legal fees and $5 million in core deposit intangible amortization, partially offset by an $8 million decrease in
net gains recognized on sales of assets and a $5 million loss on other foreclosed property in 2013.
The provision for income taxes increased $4 million to $245 million in 2013. An increase in taxes due to increased pretax
income in 2013 was largely offset by certain federal and state tax discrete items and the release of certain tax reserves in 2013.