Comerica 2015 Annual Report Download - page 140

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries
F-102
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, 2015
CET1 capital (minimum $3.1 billion (Consolidated)) $ 7,350 $ 7,081
Tier 1 capital (minimum-$4.2 billion (Consolidated)) 7,350 7,081
Total capital (minimum-$5.6 billion (Consolidated)) 8,852 8,366
Risk-weighted assets 69,731 69,438
Average assets (fourth quarter) 71,943 71,629
CET1 capital to risk-weighted assets (minimum-4.5%) 10.54% 10.20%
Tier 1 capital to risk-weighted assets (minimum-6.0%) 10.54 10.20
Total capital to risk-weighted assets (minimum-8.0%) 12.69 12.05
Tier 1 capital to average assets (minimum-4.0%) 10.22 9.89
December 31, 2014
Tier 1 capital (minimum-$2.7 billion (Consolidated)) $ 7,169 $ 7,051
Total capital (minimum-$5.5 billion (Consolidated)) 8,543 8,175
Risk-weighted assets 68,273 68,037
Average assets (fourth quarter) 69,284 69,092
Tier 1 capital to risk-weighted assets (minimum-4.0%) 10.50 % 10.36 %
Total capital to risk-weighted assets (minimum-8.0%) 12.51 12.02
Tier 1 capital to average assets (minimum-3.0%) 10.35 10.20
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 tried in January
2014, in the Montana Second District Judicial Court for Silver Bow County in Butte, Montana ("the court"). On January 17, 2014,
a jury awarded Masters $52 million against the Bank. On July 1, 2015, after an appeal filed by the Corporation, the Montana
Supreme court ("the court") reversed the judgment against the Corporation and remanded the case for a new trial with instructions
that Michigan law should apply. The court also reversed punitive and consequential damages previously awarded by the jury. The
Corporation believes it has meritorious defenses to the remaining claims in this case and intends to continue to defend itself
vigorously. Management believes that current reserves related to this case are adequate in the event of a negative outcome.
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 meritorious 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. On at least a quarterly basis, the Corporation
assesses its potential liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information
available. On a case-by-case basis, reserves are established for those legal claims 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 may be substantially higher or lower than the amounts reserved. Based on current knowledge, and after consultation
with legal counsel, management believes that current reserves 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,
consolidated results of operations or consolidated cash flows. Legal fees of $21 million for the year ended December 31, 2015,
and $24 million for each of the years ended December 31, 2014 and 2013, were included in "other noninterest expenses" on the
consolidated statements of income.
For matters where a loss is not probable, the Corporation has not established legal reserves. The Corporation believes the
estimate of the aggregate range of reasonably possible losses, in excess of reserves established, for all legal proceedings in which
it is involved is from zero to approximately $33 million at December 31, 2015. This estimated aggregate range of reasonably
possible losses is based upon currently available information for those proceedings in which the Corporation is involved, taking
into account the Corporation’s best estimate of such losses for those cases for which such estimate can be made. For certain cases,
the Corporation does not believe that an estimate can currently be made. The Corporation’s estimate involves significant judgment,