COMERICA INC /NEW/ (Form: 10-Q, Received: 11/05/2004 11:32:52)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2004

[ ] 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)


Delaware (State or other jurisdiction of incorporation or organization)		38-1998421 (I.R.S. Employer Identification No.)

Comerica Tower at Detroit Center
Detroit, Michigan
48226

(Address of principal executive offices)
(Zip Code)

(248) 371-5000

(Registrant’s telephone number, including area code)

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 [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

$5 par value common stock:

Outstanding as of October 31, 2004: 170,560,000 shares

COMERICA INCORPORATED AND SUBSIDIARIES

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets at September 30, 2004 (unaudited), December 31, 2003 and September 30, 2003 (unaudited)				3
Consolidated Statements of Income for the Three Months and Nine Months Ended September 30, 2004 and 2003 (unaudited)				4
Consolidated Statements of Changes in Shareholders’ Equity for the Nine Months Ended September 30, 2004 and 2003 (unaudited)				5
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2004 and 2003 (unaudited)				6
Notes to Consolidated Financial Statements (unaudited)				7
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations				24
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk				37
ITEM 4. Controls and Procedures				37
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings				39
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds				39
ITEM 6. Exhibits				40
Signatures				41
Non-Employee Director Restricted Stock Unit Agreement
Restricted Stock Award Agreement (Cliff Vesting)
Restricted Stock Award Agreement (Non-Cliff Vesting)
Non-Qualified Stock Option Agreement
No Sale Agreement under the Amended and Restated Management Incentive Plan
Amended and Restated Employee Stock Purchase Plan
Statement re: Computation of Net Income Per Common Share
Chairman, President and CEO Certification to Section 302
Executive Vice President and CFO Certification to Section 302
Certification of Periodic Report Pursuant to Section 906

ITEM 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

Comerica Incorporated and Subsidiaries


	September 30,			December 31,			September 30,
(in millions, except share data)	2004			2003			2003
	(unaudited)						(unaudited)
ASSETS
Cash and due from banks	$	1,560		$	1,527		$	1,955
Short-term investments		5,055			4,013			4,805
Investment securities available-for-sale		4,198			4,489			5,086

Commercial loans		21,146			21,579			22,030
Real estate construction loans		3,276			3,397			3,496
Commercial mortgage loans		7,931			7,878			7,631
Residential mortgage loans		1,263			1,228			1,210
Consumer loans		2,722			2,610			2,501
Lease financing		1,260			1,301			1,289
International loans		2,117			2,309			2,478

Total loans		39,715			40,302			40,635
Less allowance for loan losses		(729	)		(803	)		(802	)

Net loans		38,986			39,499			39,833
Premises and equipment		399			374			368
Customers’ liability on acceptances outstanding		41			27			22
Accrued income and other assets		2,720			2,663			2,726

Total assets	$	52,959		$	52,592		$	54,795

LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits	$	16,811		$	14,104		$	16,198
Interest-bearing deposits		25,424			27,359			27,498

Total deposits		42,235			41,463			43,696
Short-term borrowings		225			262			296
Acceptances outstanding		41			27			22
Accrued expenses and other liabilities		1,021			929			870
Medium- and long-term debt		4,401			4,801			4,818

Total liabilities		47,923			47,482			49,702

Common stock — $5 par value:
Authorized - 325,000,000 shares
Issued - 178,735,252 shares at 9/30/04, 12/31/03 and 9/30/03		894			894			894
Capital surplus		408			384			378
Accumulated other comprehensive income (loss)		(24	)		74			111
Retained earnings		4,222			3,973			3,909
Less cost of common stock in treasury - 8,169,292 shares at 9/30/04, 3,735,163 shares at 12/31/03 and 3,421,888 shares at 9/30/03		(464	)		(215	)		(199	)

Total shareholders’ equity		5,036			5,110			5,093

Total liabilities and shareholders’ equity	$	52,959		$	52,592		$	54,795

See notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

Comerica Incorporated and Subsidiaries


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in millions, except per share data)	2004			2003		2004		2003
INTEREST INCOME
Interest and fees on loans	$	514		$	530	$	1,510	$	1,700
Interest on investment securities		36			37		111		124
Interest on short-term investments		8			12		25		28

Total interest income		558			579		1,646		1,852
INTEREST EXPENSE
Interest on deposits		79			86		224		293
Interest on short-term borrowings		1			1		2		6
Interest on medium- and long-term debt		27			27		76		84

Total interest expense		107			114		302		383

Net interest income		451			465		1,344		1,469
Provision for loan losses		—			83		85		300

Net interest income after provision for loan losses		451			382		1,259		1,169
NONINTEREST INCOME
Service charges on deposit accounts		57			60		178		179
Fiduciary income		43			42		128		125
Commercial lending fees		14			16		41		46
Letter of credit fees		17			17		49		49
Foreign exchange income		9			11		28		30
Brokerage fees		9			8		27		24
Investment advisory revenue, net		8			8		26		22
Bank-owned life insurance		10			12		28		33
Equity in earnings of unconsolidated subsidiaries		3			2		11		5
Warrant income		1			1		6		1
Net securities gains (losses)		(6	)		4		—		46
Net gain on sales of businesses		—			—		7		—
Other noninterest income		41			40		125		107

Total noninterest income		206			221		654		667
NONINTEREST EXPENSES
Salaries and employee benefits		225			229		686		670
Net occupancy expense		32			34		93		96
Equipment expense		14			16		43		46
Outside processing fee expense		16			18		51		53
Software expense		11			10		31		28
Customer services		8			6		17		18
Litigation and operational losses		16			6		27		14
Other noninterest expenses		50			58		165		179

Total noninterest expenses		372			377		1,113		1,104

Income before income taxes		285			226		800		732
Provision for income taxes		89			69		250		229

NET INCOME	$	196		$	157	$	550	$	503

Net income applicable to common stock	$	196		$	157	$	550	$	503

Basic net income per common share	$	1.15		$	0.90	$	3.19	$	2.88
Diluted net income per common share		1.13			0.89		3.15		2.86
Cash dividends declared on common stock		88			88		268		262
Dividends per common share		0.52			0.50		1.56		1.50

See notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)

Comerica Incorporated and Subsidiaries


						Accumulated
						Other									Total
	Common		Capital			Comprehensive			Retained			Treasury			Shareholders’
(in millions, except share data)	Stock		Surplus			Income (Loss)			Earnings			Stock			Equity
BALANCE AT JANUARY 1, 2003	$	894	$	363		$	237		$	3,684		$	(231	)	$	4,947
Net income		—		—			—			503			—			503
Other comprehensive loss, net of tax		—		—			(126	)		—			—			(126	)

Total comprehensive income		—		—			—			—			—			377
Cash dividends declared on common stock ($1.50 per share)		—		—			—			(262	)		—			(262	)
Net issuance of common stock under employee stock plans		—		(5	)		—			(16	)		32			11
Recognition of stock-based compensation expense		—		20			—			—			—			20

BALANCE AT SEPTEMBER 30, 2003	$	894	$	378		$	111		$	3,909		$	(199	)	$	5,093

BALANCE AT JANUARY 1, 2004	$	894	$	384		$	74		$	3,973		$	(215	)	$	5,110
Net income		—		—			—			550			—			550
Other comprehensive loss, net of tax		—		—			(98	)		—			—			(98	)

Total comprehensive income		—		—			—			—			—			452
Cash dividends declared on common stock ($1.56 per share)		—		—			—			(268	)		—			(268	)
Purchase of 5,977,723 shares of common stock		—		—			—			—			(336	)		(336	)
Net issuance of common stock under employee stock plans		—		(2	)		—			(33	)		87			52
Recognition of stock-based compensation expense		—		26			—			—			—			26

BALANCE AT SEPTEMBER 30, 2004	$	894	$	408		$	(24	)	$	4,222		$	(464	)	$	5,036

See notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Comerica Incorporated and Subsidiaries


	Nine Months Ended
	September 30,
(in millions)	2004			2003
OPERATING ACTIVITIES
Net income	$	550		$	503
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		85			300
Depreciation and software amortization		52			52
Amortization of stock-based compensation expense		24			21
Net amortization of securities		20			23
Net amortization of intangibles		1			1
Net gain on sale of investment securities available-for-sale		—			(46	)
Net gain on sales of businesses		(7	)		—
Contributions to pension plan fund		(62	)		(47	)
Net (increase) decrease in trading securities		(8	)		8
Net decrease in loans held-for-sale		38			49
Net (increase) decrease in accrued income receivable		(15	)		19
Net increase in accrued expenses		81			29
Other, net		(89	)		75

Total adjustments		120			484

Net cash provided by operating activities		670			987
INVESTING ACTIVITIES
Net increase in other short-term investments		(1,072	)		(2,416	)
Proceeds from sales of investment securities available-for-sale		330			3,651
Proceeds from maturities of investment securities available-for-sale		752			4,782
Purchases of investment securities available-for-sale		(773	)		(10,400	)
Decrease in receivables for securities sold pending settlement		—			1,110
Net decrease in loans		391			1,333
Fixed assets, net		(65	)		(39	)
Net (increase) decrease in customers’ liability on acceptances outstanding		(14	)		11
Proceeds from sales of businesses		8			—

Net cash used in investing activities		(443	)		(1,968	)
FINANCING ACTIVITIES
Net increase in deposits		772			1,926
Net decrease in short-term borrowings		(37	)		(244	)
Net increase (decrease) in acceptances outstanding		14			(11	)
Proceeds from issuance of medium- and long-term debt		359			311
Repayments of medium- and long-term debt		(750	)		(700	)
Proceeds from issuance of common stock and other capital transactions		52			11
Purchase of common stock for treasury and retirement		(336	)		—
Dividends paid		(268	)		(259	)

Net cash (used in) provided by financing activities		(194	)		1,034

Net increase in cash and due from banks		33			53
Cash and due from banks at beginning of period		1,527			1,902

Cash and due from banks at end of period	$	1,560		$	1,955

Interest paid	$	296		$	354

Income taxes paid	$	126		$	130

Noncash investing and financing activities:
Loans transferred to other real estate	$	21		$	23

See notes to consolidated financial statements.

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 1 — Basis of Presentation and Accounting Policies

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the nine months ended September 30, 2004, are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. Certain items in prior periods have been reclassified to conform to the current presentation. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report of Comerica Incorporated and Subsidiaries (the “Corporation”) on Form 10-K for the year ended December 31, 2003.

Reclassifications

The Corporation issues personal purpose loans to individuals associated with commercial lending relationships. These loans, and their associated interest income, were previously classified with commercial loans. In the second quarter of 2004, the Corporation reclassified its personal purpose loans to residential mortgage loans and consumer loans. The financial statements and associated schedules for prior periods have been adjusted to reflect this reclassification. The impact on loan balances at December 31, 2003 was a decrease in commercial loans of approximately $1.4 billion, offset by increases in residential mortgage loans and consumer loans of approximately $0.4 billion and $1.0 billion, respectively.

The Corporation has foreign currency denominated assets and liabilities and hedges the resulting foreign currency exposure with forward foreign exchange contracts. The exchange rate related adjustments required to reflect the foreign currency denominated assets and liabilities at current U.S. dollar equivalent values and to reflect the related forward foreign exchange contracts at market value were previously classified with foreign exchange income. In the third quarter of 2004, the Corporation combined this risk management income with other risk management income, which resulted in a reclassification from foreign exchange income to other noninterest income on the Consolidated Statements of Income. The financial statements for prior periods have been adjusted to reflect this reclassification.

Derivative and Foreign Exchange Contracts

The Corporation uses derivative financial instruments, including foreign exchange contracts, to manage the Corporation’s exposure to interest rate and foreign currency risks. All derivative instruments are carried at fair value as either assets or liabilities on the balance sheet. 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, on the type of hedging relationship. For those derivative instruments that qualify as hedging instruments, the Corporation designates the hedging instrument as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. For further information, see Note 8.

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 1 — Basis of Presentation and Accounting Policies (continued)

Stock-Based Compensation

In 2002, the Corporation adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation” (as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure”), which the Corporation is applying prospectively to all stock-based compensation awards granted to employees after December 31, 2001. Options granted prior to January 1, 2002 continue to be accounted for under the intrinsic value method, as outlined in APB Opinion No. 25, “Accounting for Stock Issued to Employees.” The effect on net income and earnings per share, if the fair value method had been applied to all outstanding and unvested awards in each period, is presented in the table below. For further information on the Corporation’s stock-based compensation plans, refer to Note 16 to the consolidated financial statements in the Corporation’s 2003 Annual Report.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions, except per share data)	2004		2003		2004		2003
Net income applicable to common stock, as reported	$	196	$	157	$	550	$	503
Add: Stock-based compensation expense included in reported net income, net of related tax effects		1		4		15		13
Deduct: Total stock-based compensation expense determined under fair value method for all awards, net of related tax effects		3		6		20		19

Proforma net income applicable to common stock	$	194	$	155	$	545	$	497

Net income per common share:
Basic-as reported	$	1.15	$	0.90	$	3.19	$	2.88
Basic-pro forma		1.14		0.89		3.16		2.85
Diluted-as reported		1.13		0.89		3.15		2.86
Diluted-pro forma		1.12		0.88		3.13		2.82

Impairment

Goodwill and identified intangible assets that have an indefinite useful life are subject to impairment testing, which the Corporation conducts annually, or on an interim basis if events or changes in circumstances between annual tests indicate the assets might be impaired. The Corporation performs its annual impairment test for goodwill and identified intangible assets that have an indefinite useful life as of July 1 of each year. The impairment test involves assigning tangible assets and liabilities, identified intangible assets and goodwill to reporting units, which are a subset of the Corporation’s operating segments, and comparing the fair value of each reporting unit to its carrying value. If the fair value is less than the carrying value, a further test is required to measure the amount of impairment. The annual test of goodwill and intangible assets that have an indefinite life, performed as of July 1, 2004, did not indicate that an impairment charge was required.

The Corporation reviews finite lived intangible assets and other long lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable from projected undiscounted net operating cash flows. If the projected undiscounted net operating cash flows are less than the carrying amount, the Corporation recognizes a loss to reduce the carrying amount to fair value. Additional information regarding the Corporation’s goodwill, intangible assets and impairment policies can be found in the Corporation’s 2003 Annual Report on page 55 and in Notes 1, 8 and 9 to the consolidated financial statements.

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 2 — Investment Securities

At September 30, 2004, investment securities having a carrying value of $1,422 million were pledged where permitted or required by law to secure liabilities and public and other deposits of $401 million. This included securities of $886 million pledged with the Federal Reserve Bank to secure actual borrowings of $13 million at September 30, 2004, and potential borrowings of up to an additional $837 million. The remaining pledged securities of $536 million are primarily with state and local government agencies to secure $388 million of deposits and other liabilities, including deposits of the State of Michigan of $140 million at September 30, 2004.

Note 3 — Allowance for Loan Losses

The following summarizes the changes in the allowance for loan losses:


	Nine Months Ended
	September 30,
(in millions)	2004		2003
Balance at beginning of period	$	803	$	791
Loans charged-off:
Commercial		162		228
Real estate construction
Real estate construction business line		2		—
Other		—		1

Total real estate construction		2		1
Commercial mortgage
Commercial real estate business line		—		4
Other		19		12

Total commercial mortgage		19		16
Residential mortgage		1		—
Consumer		9		8
Lease financing		9		4
International		11		54

Total loans charged-off		213		311
Recoveries:
Commercial		38		12
Real estate construction		—		—
Commercial mortgage		2		1
Residential mortgage		—		—
Consumer		2		3
Lease financing		1		—
International		11		6

Total recoveries		54		22

Net loans charged-off		159		289
Provision for loan losses		85		300

Balance at end of period	$	729	$	802

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 3 — Allowance for Loan Losses (continued)

SFAS No. 114, “Accounting by Creditors for Impairment of a Loan,” considers a loan impaired when it is probable that interest and principal payments will not be made in accordance with the contractual terms of the loan agreement. Consistent with this definition, all nonaccrual and reduced-rate loans (with the exception of residential mortgage and consumer loans) are impaired. Impaired loans that are restructured and meet the requirements to be on accrual status are included with total impaired loans for the remainder of the calendar year of the restructuring. There were no loans included in the $358 million of impaired loans at September 30, 2004 that were restructured and met the requirements to be on accrual status. Impaired loans averaged $392 million and $448 million for the three and nine month periods ended September 30, 2004, compared to $590 million and $599 million, respectively, for the comparable periods in the prior year. The following presents information regarding the period-end balances of impaired loans:


	Nine Months Ended		Year Ended
(in millions)	September 30, 2004		December 31, 2003
Total period-end impaired loans	$	358	$	512
Less: Impaired loans restructured during the period on accrual status at period-end		—		(14	)

Total period-end nonaccrual business loans	$	358	$	498

Period-end impaired loans requiring an allowance	$	345	$	480

Allowance allocated to impaired loans	$	94	$	167

Those impaired loans not requiring an allowance represent loans for which the fair value exceeded the recorded investments in such loans.

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 4 — Medium- and Long-term Debt

Medium- and long-term debt consisted of the following at September 30, 2004 and December 31, 2003:


(dollar amounts in millions)	September 30, 2004		December 31, 2003
Parent company
7.25% subordinated note due 2007	$	165	$	170
4.80% subordinated note due 2015		305		301
7.60% subordinated note due 2050		357		355

Total parent company		827		826
Subsidiaries
Subordinated notes:
7.25% subordinated note due 2007		219		225
6.00% subordinated note due 2008		272		276
6.875% subordinated note due 2008		111		114
8.50% subordinated note due 2009		108		110
7.65% subordinated note due 2010		260		270
7.125% subordinated note due 2013		171		172
5.70% subordinated note due 2014		263		—
8.375% subordinated note due 2024		199		198
7.875% subordinated note due 2026		200		197
9.98% subordinated note due 2026		58		59

Total subordinated notes		1,861		1,621
Medium-term notes:
Floating rate based on LIBOR indices		485		1,135
2.95% fixed rate note		100		100
2.85% fixed rate note		99		100
Variable rate secured debt financing due 2007		1,011		997
Variable rate note due 2009		18		22

Total subsidiaries		3,574		3,975

Total medium- and long-term debt	$	4,401	$	4,801

The carrying value of medium- and long-term debt has been adjusted to reflect the gain or loss attributable to the risk hedged. In May 2004, Comerica Bank, a subsidiary of Comerica Incorporated, issued $250 million of 5.70% Subordinated Notes which are classified in medium- and long-term debt. The notes pay interest on June 1 and December 1 of each year, beginning with December 1, 2004, and mature June 1, 2014. Comerica Bank used the net proceeds for general corporate purposes.

Note 5 — Income Taxes

The provision for income taxes is computed by applying statutory federal income tax rates to income before income taxes as reported in the financial statements after deducting non-taxable items, principally income on bank-owned life insurance and interest income on state and municipal securities. State and foreign taxes are then added to the federal provision.

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 6 — Accumulated Other Comprehensive Income (Loss)

Other comprehensive income includes the change in net unrealized gains and losses on investment securities available-for-sale, the change in accumulated gains and losses on cash flow hedges, the change in the accumulated foreign currency translation adjustment and the change in accumulated minimum pension liability adjustment. The Consolidated Statements of Changes in Shareholders’ Equity on page 5 include only combined other comprehensive income, net of tax. The following table presents reconciliations of the components of accumulated other comprehensive income (loss) for the nine months ended September 30, 2004 and 2003. Total comprehensive income totaled $452 million and $377 million, for the nine months ended September 30, 2004 and 2003, respectively, and $254 million and $87 million for the three months ended September 30, 2004 and 2003, respectively. The $75 million increase in total comprehensive income in the nine month period ended September 30, 2004 when compared to the same period in the prior year resulted principally from an increase in net income ($47 million) and a decrease in net unrealized losses on investment securities available-for-sale ($30 million), due to changes in the interest rate environment.


	Nine Months Ended
	September 30,
(in millions)	2004			2003
Net unrealized gains (losses) on investment securities available-for-sale:
Balance at beginning of period	$	(23	)	$	15
Net unrealized holding gains (losses) arising during the period		(7	)		(8	)
Less: Reclassification adjustment for gains (losses) included in net income		—			46

Change in net unrealized gains (losses) before income taxes		(7	)		(54	)
Less: Provision for income taxes		(2	)		(19	)

Change in net unrealized gains (losses) on investment securities available-for-sale, net of tax		(5	)		(35	)

Balance at end of period	$	(28	)	$	(20	)

Accumulated net gains (losses) on cash flow hedges:
Balance at beginning of period	$	114		$	241
Net cash flow hedge gains (losses) arising during the period		13			92
Less: Reclassification adjustment for gains (losses) included in net income		154			231

Change in cash flow hedges before income taxes		(141	)		(139	)
Less: Provision for income taxes		(50	)		(49	)

Change in cash flow hedges, net of tax		(91	)		(90	)

Balance at end of period	$	23		$	151

Accumulated foreign currency translation adjustment:
Balance at beginning of period	$	(4	)	$	(3	)
Net translation gains (losses) arising during the period		(1	)		(2	)
Less: Provision for income taxes		—			—

Change in foreign currency translation adjustment, net of tax		(1	)		(2	)

Balance at end of period	$	(5	)	$	(5	)

Accumulated minimum pension liability adjustment:
Balance at beginning of period	$	(13	)	$	(16	)
Minimum pension liability adjustment arising during the period before income taxes		(2	)		2
Less: Provision for income taxes		(1	)		1

Change in minimum pension liability adjustment, net of tax		(1	)		1

Balance at end of period	$	(14	)	$	(15	)

Total accumulated other comprehensive income (loss), net of taxes, at end of period	$	(24	)	$	111

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 7 — Employee Benefit Plans

The components of net periodic benefit cost for the Corporation’s qualified pension plan, non-qualified pension plan and postretirement benefit plan are as follows:


	Three Months Ended						Nine Months Ended
Qualified Defined Benefit Pension Plan	September 30,						September 30,
(in millions)	2004			2003			2004			2003
Service cost	$	6		$	6		$	18		$	14
Interest cost		13			15			38			33
Expected return on plan assets		(21	)		(21	)		(63	)		(48	)
Amortization of unrecognized prior service cost		—			—			1			1
Amortization of unrecognized net loss		3			4			9			9

Net periodic benefit cost	$	1		$	4		$	3		$	9


	Three Months Ended				Nine Months Ended
Non-Qualified Defined Benefit Pension Plan	September 30,				September 30,
(in millions)	2004		2003		2004		2003
Service cost	$	1	$	1	$	3	$	2
Interest cost		1		1		4		4
Expected return on plan assets		—		—		—		—
Amortization of unrecognized prior service cost		—		—		—		—
Amortization of unrecognized net loss		1		1		2		2

Net periodic benefit cost	$	3	$	3	$	9	$	8


	Three Months Ended						Nine Months Ended
Postretirement Benefit Plan	September 30,						September 30,
(in millions)	2004			2003			2004			2003
Service cost	$	—		$	—		$	—		$	—
Interest cost		2			1			4			4
Expected return on plan assets		(1	)		(1	)		(3	)		(3	)
Amortization of unrecognized transition obligation		1			1			3			3

Net periodic benefit cost	$	2		$	1		$	4		$	4

In January 2004, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,” subsequently revised in April 2004. FSP 106-1 permits a sponsor of a postretirement health care plan that provides a prescription drug benefit to make a one-time election to defer accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) and requires certain disclosures pending issuance of accounting guidance for the federal subsidy resulting from the Act. The Act introduces a Medicare prescription drug benefit as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to the Medicare benefit. The Corporation elected to defer the accounting for the Act in accordance with FSP 106-1.

In May 2004, the FASB issued FSP 106-2, which provides guidance on the accounting for the federal subsidy resulting from the Act. FSP 106-2 requires the subsidy to be accounted for under current guidance for other postretirement benefits. As such, the effects of the subsidy on the benefits attributable to past services are accounted for as an actuarial gain. The Corporation’s entire postretirement prescription drug related liability is attributable to past services as the benefits were only provided to employees that retired prior to December 31, 1992.

The Corporation adopted the provisions of FSP 106-2 in the quarter ended September 30, 2004. In accordance with the FSP 106-2, the Corporation has determined its postretirement drug benefits to be “actuarially equivalent.” However, the enactment of the Act is not considered a “significant event;” therefore, its effects will be incorporated at December 31, 2004, the regularly scheduled measurement date for its plan assets and obligation. For further information on the Corporation’s employee benefit plans, refer to Note 17 to the consolidated financial statements in the Corporation’s 2003 Annual Report.

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 8 — Derivatives and Foreign Exchange Contracts

The following table presents the composition of derivative financial instruments and foreign exchange contracts, excluding commitments, held or issued for risk management and in connection with customer-initiated and other activities.


	September 30, 2004									December 31, 2003
	Notional/									Notional/
	Contract		Unrealized		Unrealized		Fair			Contract		Unrealized		Unrealized		Fair
	Amount		Gains		Losses		Value			Amount		Gains		Losses		Value
(in millions)	(1)		(2)				(3)			(1)		(2)				(3)
Risk management
Interest rate contracts:
Swaps	$	12,888	$	274	$	27	$	247		$	10,818	$	383	$	1	$	382
Foreign exchange contracts:
Spot, forward and options		350		7		1		6			340		23		1		22
Swaps		70		—		1		(1	)		99		—		1		(1	)

Total foreign exchange contracts		420		7		2		5			439		23		2		21

Total risk management		13,308		281		29		252			11,257		406		3		403
Customer-initiated and other
Interest rate contracts:
Caps and floors written		281		—		1		(1	)		443		—		3		(3	)
Caps and floors purchased		328		1		—		1			443		3		—		3
Swaps		1,719		22		19		3			1,416		24		21		3

Total interest rate contracts		2,328		23		20		3			2,302		27		24		3

Foreign exchange contracts:
Spot, forward and options		3,166		59		51		8			1,879		41		37		4
Swaps		28		—		—		—			25		1		1		—

Total foreign exchange contracts		3,194		59		51		8			1,904		42		38		4

Total customer-initiated and other		5,522		82		71		11			4,206		69		62		7

Total derivatives and foreign exchange contracts	$	18,830	$	363	$	100	$	263		$	15,463	$	475	$	65	$	410

(1) Notional or contract amounts, which represent the extent of involvement in the derivatives market, are generally 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 in the consolidated balance sheets.

(2) Unrealized gains represent receivables from derivative counterparties, and therefore exposes the Corporation to credit risk. This risk is measured as the cost to replace, at current market rates, contracts in a profitable position. Credit risk is calculated before consideration is given to bilateral collateral agreements or master netting arrangements that effectively reduce credit risk.

(3) The fair values of derivatives and foreign exchange contracts generally represent the estimated amounts the Corporation would receive or pay to terminate or otherwise settle the contracts at the balance sheet date. The fair values of all derivatives and foreign exchange contracts are reflected in the consolidated balance sheets.

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 8 — Derivatives and Foreign Exchange Contracts (continued)

Risk Management

Fluctuations in net interest income due to interest rate risk result from the composition of assets and liabilities and the mismatches in the timing of the repricing of these assets and liabilities. In addition, external factors such as interest rates, and the dynamics of yield curve and spread relationships can affect net interest income. The Corporation utilizes simulation analyses to project the sensitivity of the Corporation’s net interest income to changes in interest rates. The Corporation employs cash instruments, such as investment securities, as well as derivative financial instruments, to manage exposure to these and other risks, including liquidity risk.

As an end-user, the Corporation accesses the interest rate markets to obtain derivative instruments for use principally in connection with asset and liability management activities. As part of a fair value hedging strategy, the Corporation has entered into interest rate swap agreements for interest rate risk management purposes. The interest rate swap agreements effectively modify the Corporation’s exposure to interest rate risk by converting fixed-rate deposits and debt to a floating rate. These agreements involve the receipt of fixed rate interest amounts in exchange for floating rate interest payments over the life of the agreement, without an exchange of the underlying principal amount. For instruments that support a fair value hedging strategy, no ineffectiveness was required to be recorded in the statement of income.

As part of a cash flow hedging strategy, the Corporation has entered into predominantly 2 to 3 year interest rate swap agreements (weighted average original maturity of 2.7 years) that effectively convert a portion of its existing and forecasted floating-rate loans to a fixed-rate basis, thus reducing the impact of interest rate changes on future interest income over the next 2 to 3 years. Approximately 27 percent ($10.6 billion) of the Corporation’s outstanding loans were designated as the hedged items to interest rate swap agreements at September 30, 2004. During the three and nine month periods ended September 30, 2004, interest rate swap agreements designated as cash flow hedges increased interest and fees on loans by $45 million and $154 million, respectively, compared to $62 million and $231 million, respectively, for the comparable periods last year. Other noninterest income in the three and nine month periods ended September 30, 2004 included $2 million of ineffective cash flow hedge gains and $1 million of ineffective cash flow hedge losses, respectively. If interest rates, interest yield curves and notional amounts remain at their current levels, the Corporation expects to reclassify $35 million of net gains on derivative instruments from accumulated other comprehensive income to earnings during the next twelve months due to receipt of variable interest associated with the existing and forecasted floating-rate loans.

Foreign exchange rate risk arises from changes in the value of certain assets and liabilities denominated in foreign currencies. The Corporation employs cash instruments, such as investment securities, as well as derivative financial instruments and foreign exchange contracts, to manage exposure to these and other risks. In addition, the Corporation uses foreign exchange forward and option contracts to protect the value of its foreign currency investment in foreign subsidiaries. Realized and unrealized gains and losses from these hedges are not included in the statement of income, but are shown in the accumulated foreign currency translation adjustment account included in other comprehensive income, with the related amounts due to or from counterparties included in other liabilities or other assets. During the three and nine month periods ended September 30, 2004, the Corporation recognized an immaterial amount of net gains in accumulated foreign currency translation adjustment, related to the forward foreign exchange contracts.

Management believes these strategies achieve the desired relationship between the rate maturities of assets and their funding sources which, in turn, reduces the overall exposure of net interest income to interest rate risk, although, there can be no assurance that such strategies will be successful. The Corporation also uses various other types of financial instruments to mitigate interest rate and foreign currency risks associated with specific assets or liabilities, which are reflected in the preceding table. Such instruments include interest rate caps and floors, foreign exchange forward contracts, foreign exchange option contracts and foreign exchange cross-currency swaps.

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 8 — Derivatives and Foreign Exchange Contracts (continued)

The following table summarizes the expected maturity distribution of the notional amount of interest rate swaps used for risk management purposes and indicates the weighted average interest rates associated with amounts to be received or paid on interest rate swap agreements as of September 30, 2004. The swaps are grouped by the assets or liabilities to which they have been designated.

Remaining Expected Maturity of Risk Management Interest Rate Swaps as of September 30, 2004:


																			Sept. 30,			Dec. 31,
																			2004			2003
(dollar amounts in millions)	2004			2005			2006			2007			2008			2009-2026			Total			Total
Variable rate asset designation:
Generic receive fixed swaps	$	2,000		$	3,800		$	3,000		$	1,800		$	—		$	—		$	10,600		$	8,800
Weighted average: (1)
Receive rate		5.76	%		6.11	%		4.01	%		4.10	%		—	%		—	%		5.11	%		6.17	%
Pay rate		4.60			4.64			3.15			2.73			—			—			3.89			4.00
Fixed rate asset designation:
Pay fixed swaps
Generic	$	1		$	—		$	—		$	—		$	—		$	—		$	1		$	13
Amortizing		1			1			2			2			1			—			7			5
Weighted average: (2)
Receive rate		2.29	%		2.18	%		2.18	%		2.19	%		2.19	%		—	%		2.21	%		3.41	%
Pay rate		3.64			3.54			3.54			3.53			3.52			—			3.56			4.12
Fixed rate deposit designation:
Generic receive fixed swaps	$	—		$	30		$	—		$	—		$	—		$	—		$	30		$	—
Weighted average: (1)
Receive rate		—	%		1.42	%		—	%		—	%		—	%		—	%		1.42	%		—	%
Pay rate		—			1.82			—			—			—			—			1.82			—
Medium- and long-term debt designation:
Generic receive fixed swaps	$	—		$	250		$	100		$	450		$	350		$	1,100		$	2,250		$	2,000
Weighted average: (1)
Receive rate		—	%		7.04	%		2.95	%		5.82	%		6.17	%		6.17	%		6.05	%		6.09	%
Pay rate		—			1.71			1.78			1.88			1.40			1.72			1.70			1.16

Total notional amount	$	2,002		$	4,081		$	3,102		$	2,252		$	351		$	1,100		$	12,888		$	10,818

(1) Variable rates paid on receive fixed swaps are based on prime and LIBOR (with various maturities) rates in effect at September 30, 2004.

(2) Variable rates received are based on three-month and six-month LIBOR or one-month and three-month Canadian Dollar Offered Rate (CDOR) rates in effect at September 30, 2004.

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 8 — Derivatives and Foreign Exchange Contracts (continued)

The Corporation had commitments to purchase investment securities for its trading account and available-for-sale portfolios totaling $10 million at September 30, 2004 and $3 million at December 31, 2003. Commitments to sell investment securities related to the trading account totaled $8 million at September 30, 2004 and $2 million at December 31, 2003. Outstanding commitments expose the Corporation to both credit and market risk.

Customer-Initiated and Other

On a limited scale, fee income is earned from entering into various transactions, principally foreign exchange contracts and interest rate contracts at the request of customers. Market risk inherent in customer contracts is often mitigated by taking offsetting positions. The Corporation generally does not speculate in derivative financial instruments for the purpose of profiting in the short-term from favorable movements in market rates.

Fair values for customer-initiated and other derivative and foreign exchange contracts represent the net unrealized gains or losses on such contracts and are recorded in the consolidated balance sheets. Changes in fair value are recognized in the consolidated income statements. The following table provides the average unrealized gains and unrealized losses and noninterest income generated on customer-initiated and other interest rate contracts and foreign exchange contracts.


	Nine Months Ended		Year Ended		Nine Months Ended
(in millions)	September 30, 2004		December 31, 2003		September 30, 2003
Average unrealized gains	$	70	$	74	$	75
Average unrealized losses		61		67		69
Noninterest income		26		35		30

Derivative and Foreign Exchange Activity

The following table provides a reconciliation of the beginning and ending notional amounts for interest rate derivatives and foreign exchange contracts for the nine months ended September 30, 2004.


	Risk Management						Customer-Initiated and Other
	Interest Rate			Foreign Exchange			Interest Rate			Foreign Exchange
(in millions)	Contracts			Contracts			Contracts			Contracts
Balance at January 1, 2004	$	10,818		$	439		$	2,302		$	1,904
Additions		3,580			11,534			523			67,504
Maturities/amortizations		(1,510	)		(11,553	)		(368	)		(66,214	)
Terminations		—			—			(129	)		—

Balance at September 30, 2004	$	12,888		$	420		$	2,328		$	3,194

Additional information regarding the nature, terms and associated risks of the above derivatives and foreign exchange contracts, can be found in the Corporation’s 2003 Annual Report on page 49 and in Notes 1 and 22 to the consolidated financial statements.

Note 9 — Standby and Commercial Letters of Credit and Financial Guarantees

The total contractual amounts of standby letters of credit and financial guarantees and commercial letters of credit at September 30, 2004 and December 31, 2003, which represents the Corporation’s credit risk associated with these instruments, are shown in the table below.


(in millions)	September 30, 2004		December 31, 2003
Standby letters of credit and financial guarantees	$	6,307	$	6,045
Commercial letters of credit		379		261

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 9 — Standby and Commercial Letters of Credit and Financial Guarantees (continued)

Standby and commercial letters of credit and financial guarantees represent conditional obligations of the Corporation to guarantee the performance of a customer to a third party. Standby letters of credit and financial guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. These contracts expire in decreasing amounts through the year 2012. Commercial letters of credit are issued to finance foreign or domestic trade transactions and are short-term in nature. 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 letters of credit. These risk participations covered $501 million of the $6,307 million of standby letters of credit and financial guarantees outstanding at September 30, 2004. At September 30, 2004, the carrying value of the Corporation’s standby and commercial letters of credit and financial guarantees, which is included in “accrued expenses and other liabilities” on the consolidated balance sheet, totaled $76 million.

Note 10 — Contingent Liabilities

Tax Contingency

In the ordinary course of business, the Corporation enters into certain transactions that have tax consequences. From time to time, the IRS questions and/or challenges the tax position taken by the Corporation with respect to those transactions. The Corporation engaged in certain types of structured leasing transactions and a series of loans to foreign borrowers that the IRS is challenging. The Corporation believes that its tax position related to both transaction groups referred to above is proper based upon applicable statutes, regulations and case law in effect at the time of the transactions. The Corporation intends to defend its position vigorously in accordance with its view of the law controlling these activities. However, a court, or administrative authority, if presented with the transactions, could disagree with the Corporation’s interpretation of the tax law. The ultimate outcome is not known.

The Corporation currently believes it has adequate tax reserves to cover this and any other potential tax exposures the IRS could raise, based on probability assessment of various potential outcomes. Probabilities and outcomes are reviewed as events unfold, and adjustments to the reserves are made when necessary.

See “Part II. Item 1. Legal Proceedings” for information regarding the Corporation’s legal contingencies.

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 11 – Business Segment Information

The Corporation has strategically aligned its operations into three major lines of business: the Business Bank, Small Business and Personal Financial Services, and Wealth and Institutional Management. These lines of business are differentiated based on the products and services provided. In addition to the three major lines of business, the Finance Division is also reported as a segment. 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 gap and earnings simulation analysis and executing various strategies to manage the Corporation’s exposure to liquidity, interest rate risk and foreign exchange risk. The Other category includes divested business lines, the income and expense impact of equity, cash and loan loss reserves not assigned to specific business lines, tax benefits not assigned to specific business lines and miscellaneous other expenses of a corporate nature. The loan loss reserves include the unallocated allowance for loan losses and the portion of the allowance allocated based on industry specific and geographic risks. Lines of business 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. Information presented is not necessarily comparable with similar information for any other financial institution. The management accounting system assigns balance sheet and income statement items to each line of business using certain methodologies, which are constantly being refined. For comparability purposes, amounts in all periods are based on lines of business and methodologies in effect at September 30, 2004. These methodologies may be modified as management accounting systems are enhanced and changes occur in the organizational structure or product lines. For a description of the business activities of each line of business and the methodologies, which form the basis for these results, refer to Note 26 in the Corporation’s 2003 Annual Report. In the second quarter of 2004, the Corporation changed the assumptions used in allocating internal funding credits for deposits to better capture the value of deposits in line of business and market segment reports. Accordingly, the Corporation has adjusted current and prior year information to reflect these new assumptions. A discussion of the financial results and the factors impacting performance for the nine months ended September 30, 2004 can be found in the section entitled “Strategic Lines of Business” in “Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition”.

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 11 – Business Segment Information (continued)

Lines of business/business segment financial results for the nine months ended September 30, 2004 and 2003 are shown in the table below.


							Small Business and						Wealth and
							Personal Financial						Institutional
(dollar amounts in millions)	Business Bank						Services						Management
Nine Months Ended September 30,	2004			2003			2004			2003			2004			2003
Earnings summary:
Net interest income (expense) (FTE)	$	1,016		$	1,139		$	438		$	462		$	110		$	107
Provision for loan losses		(3	)		196			9			23			(1	)		19
Noninterest income		216			201			163			164			227			215
Noninterest expenses		419			440			379			405			237			246
Provision (benefit) for income taxes (FTE)		290			252			77			71			37			21

Net income (loss)	$	526		$	452		$	136		$	127		$	64		$	36

Net charge-offs	$	142		$	257		$	13		$	24		$	4		$	8

Selected average balances:
Assets	$	33,037		$	35,661		$	6,125		$	6,026		$	3,352		$	3,160
Loans		31,814			34,446			5,678			5,519			3,109			2,906
Deposits		19,308			19,920			16,811			16,858			2,529			2,114
Liabilities		19,915			20,437			16,804			16,852			2,536			2,129
Attributed equity		2,450			2,750			784			788			410			390

Statistical data:
Return on average assets (1)		2.12	%		1.69	%		1.04	%		0.96	%		2.54	%		1.52	%
Return on average attributed equity		28.59			21.96			23.25			21.50			20.75			12.32
Efficiency ratio		33.93			32.95			62.99			64.57			70.37			76.38

	Finance						Other						Total
Nine Months Ended September 30,	2004			2003			2004			2003			2004			2003
Earnings summary:
Net interest income (expense) (FTE)	$	(232	)	$	(239	)	$	14		$	2		$	1,346		$	1,471
Provision for loan losses		—			—			80			62			85			300
Noninterest income		48			87			—			—			654			667
Noninterest expenses		6			6			72			7			1,113			1,104
Provision (benefit) for income taxes (FTE)		(69	)		(80	)		(83	)		(33	)		252			231

Net income (loss)	$	(121	)	$	(78	)	$	(55	)	$	(34	)	$	550		$	503

Net charge-offs	$	—		$	—		$	—		$	—		$	159		$	289

Selected average balances:
Assets	$	7,231		$	7,524		$	1,146		$	1,146		$	50,891		$	53,517
Loans		—			—			—			—			40,601			42,871
Deposits		1,368			2,923			67			106			40,083			41,921
Liabilities		6,236			8,751			371			337			45,862			48,506
Attributed equity		677			855			708			228			5,029			5,011

Statistical data:
Return on average assets (1)		(2.24	)%		(1.08	)%		N/M			N/M			1.44	%		1.25	%
Return on average attributed equity		(23.91	)		(12.19	)		N/M			N/M			14.57			13.39
Efficiency ratio		(3.20	)		(3.18	)		N/M			N/M			55.66			52.77

(1) Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.

N/M – Not Meaningful

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 11 — Business Segment Information (continued)

The Corporation’s management accounting system also produces market segment results for the Corporation’s four primary geographic regions: Midwest and Other Markets, Western, Texas, and Florida.

Midwest and Other Markets includes all markets in which the Corporation has operations except for the Western, Texas and Florida regions, as described below. Substantially all of the Corporation’s international operations are included in the Midwest and Other Markets segment. Currently, Michigan operations represent the significant majority of this geographic region.

The Western region consists of the states of California, Arizona, Nevada, Colorado and Washington. Currently, California operations represent the significant majority of the Western region.

The Texas and Florida regions consist of the states of Texas and Florida, respectively.

The Finance and Other Businesses segment includes the Corporation’s securities portfolio, asset and liability management activities, divested business lines, the income and expense impact of equity, cash and loan loss reserves not assigned to specific business lines/market segments, tax benefits not assigned to specific business lines/market segments and miscellaneous other expenses of a corporate nature. This segment includes responsibility for managing the Corporation’s funding, liquidity and capital needs, performing interest sensitivity gap and earnings simulation analysis and executing various strategies to manage the Corporation’s exposure to liquidity, interest rate risk and foreign exchange risk.

A discussion of the market segment financial results and the factors impacting performance for the nine months ended September 30, 2004 can be found in the section entitled “Market Segments” in “Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition”.

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 11 — Business Segment Information (continued)

Market segment financial results for the nine months ended September 30, 2004 and 2003 are shown in the table below.


	Midwest and Other
(dollar amounts in millions)	Markets						Western						Texas
Nine Months Ended September 30,	2004			2003			2004			2003			2004			2003
Earnings summary:
Net interest income (expense) (FTE)	$	792		$	873		$	567		$	617		$	177		$	191
Provision for loan losses		(20	)		157			27			68			(4	)		12
Noninterest income		432			416			105			98			58			56
Noninterest expenses		634			652			256			280			128			139
Provision (benefit) for income taxes (FTE)		198			155			160			150			39			33

Net income (loss)	$	412		$	325		$	229		$	217		$	72		$	63

Net charge-offs	$	82		$	167		$	71		$	104		$	6		$	18

Selected average balances:
Assets	$	24,064		$	26,008		$	12,539		$	12,951		$	4,605		$	4,651
Loans		22,959			24,832			11,862			12,339			4,484			4,537
Deposits		19,003			18,565			15,571			15,852			3,845			4,283
Liabilities		19,633			19,110			15,560			15,843			3,835			4,273
Attributed equity		2,122			2,304			1,024			1,102			435			459

Statistical data:
Return on average assets (1)		2.28	%		1.67	%		1.84	%		1.71	%		2.08	%		1.76	%
Return on average attributed equity		25.88			18.86			29.82			26.24			22.04			18.19
Efficiency ratio		51.60			50.70			38.11			39.25			54.57			56.05


							Finance and Other
	Florida						Businesses						Total
Nine Months Ended September 30,	2004			2003			2004			2003			2004			2003
Earnings summary:
Net interest income (expense) (FTE)	$	28		$	27		$	(218	)	$	(237	)	$	1,346		$	1,471
Provision for loan losses		2			1			80			62			85			300
Noninterest income		11			10			48			87			654			667
Noninterest expenses		17			20			78			13			1,113			1,104
Provision (benefit) for income taxes (FTE)		7			6			(152	)		(113	)		252			231

Net income (loss)	$	13		$	10		$	(176	)	$	(112	)	$	550		$	503

Net charge-offs	$	—		$	—		$	—		$	—		$	159		$	289

Selected average balances:
Assets	$	1,306		$	1,168		$	8,377		$	8,739		$	50,891		$	53,517
Loans		1,296			1,163			—			—			40,601			42,871
Deposits		229			192			1,435			3,029			40,083			41,921
Liabilities		227			192			6,607			9,088			45,862			48,506
Attributed equity		63			63			1,385			1,083			5,029			5,011

Statistical data:
Return on average assets (1)		1.33	%		1.21	%		N/M			N/M			1.44	%		1.25	%
Return on average attributed equity		27.83			22.28			N/M			N/M			14.57			13.39
Efficiency ratio		44.37			52.68			N/M			N/M			55.66			52.77

(1) Return on average assets is calculated based on the greater of average assets or average liabilities and attributed equity.

N/M – Not Meaningful

Notes to Consolidated Financial Statements (unaudited)
Comerica Incorporated and Subsidiaries

Note 12 – Pending Accounting Pronouncements

In March 2004, the Emerging Issues Task Force (“EITF”), a standard setting body working under the FASB, reached a revised consensus on EITF No. 03-01, “The Meaning of Other than Temporary Impairment and its Application to Certain Investments.” The revised consensus contained a model to be used in determining whether an investment is other-than-temporarily impaired and guidance on the recognition of other-than-temporary impairment. The other-than-temporary impairment evaluation and recognition guidance was to be effective on July 1, 2004. In September 2004, the FASB issued FASB Staff Position (FSP) EITF 03-1-1, which delayed the effective date of the guidance in EITF 03-01 related to the evaluation and recognition of impairment on investments. The FASB plans to issue final authoritative guidance on this topic in the fourth quarter of 2004. When this occurs, the effect of this guidance on the Corporation’s financial condition and results of operations, if any, will be determined.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Net income for the quarter ended September 30, 2004 was $196 million, an increase of $39 million or 25 percent, from $157 million reported for the third quarter of 2003. Quarterly diluted net income per share increased 27 percent to $1.13 from $0.89 a year ago. Return on average common shareholders’ equity was 15.68 percent and return on average assets was 1.55 percent, compared to 12.55 percent and 1.16 percent, respectively, for the comparable quarter last year. The increase in earnings in the third quarter of 2004 over the comparable quarter last year resulted primarily from a $83 million decrease in the provision for loan losses, partially offset by a $15 million decline in noninterest income and a $14 million decline in net interest income.

Net income for the first nine months of 2004 was $550 million, an increase of $47 million, or nine percent, from $503 million for the comparable period last year. Diluted net income per share for the first nine months of 2004 increased ten percent to $3.15 from $2.86 a year ago. Return on average common shareholders’ equity was 14.57 percent and return on average assets was 1.44 percent for the first nine months of 2004, compared to 13.39 percent and 1.25 percent, respectively, for the first nine months of 2003. The increase in earnings for the nine months ended September 30, 2004 over the same period a year ago was due primarily to a $215 million decline in the provision for loan losses, partially offset by a $125 million decline in net interest income.

Net Interest Income

The rate-volume analysis in Table I details the components of the change in net interest income on a fully taxable equivalent (FTE) basis for the quarter ended September 30, 2004. On a FTE basis, net interest income decreased $14 million to $452 million for the three months ended September 30, 2004, from $466 million for the comparable quarter in 2003. The decrease in net interest income resulted from lower average earning assets, which decreased $3.4 billion, or seven percent, when compared to the third quarter of last year, and included a $1.6 billion decline in average short-term investments, resulting from a reduction in short-term liquidity. The net interest margin for the three months ended September 30, 2004 was 3.86%, as compared to 3.70% for the comparable period in 2003. The increase in net interest margin was the result of improved rate spreads in a higher rate environment, as well as the reduction in the low-spread short-term liquidity position held by the Corporation in the third quarter of 2004, as compared to the same period in 2003. For further discussion of the effects of market rates on net interest income, refer to “Item 3. Quantitative and Qualitative Disclosures about Market Risk”.

Table II provides an analysis of net interest income for the first nine months of 2004. On a FTE basis, net interest income for the nine months ended September 30, 2004 was $1,346 million, a decrease of $125 million, compared to $1,471 million for the same period in 2003. The decline in net interest income in the first nine months of 2004, when compared to the same period in 2003, resulted from a $2.3 billion, or five percent, decline in average earning assets. The net interest margin for the nine months ended September 30, 2004 decreased to 3.82 percent from 3.99 percent for the same period in 2003, due to interest rate swap maturities and a restructuring of the investment portfolio, designed to achieve more consistent cash flows, as well as loan spread compression experienced in the second half of 2003 and early 2004.

The Corporation expects full-year 2004 net interest margin, on average, to be about 3.85%.

Table I — Quarterly Analysis of Net Interest Income & Rate/Volume (FTE)


	Three Months Ended
	September 30, 2004								September 30, 2003
	Average					Average			Average					Average
(dollar amounts in millions)	Balance			Interest		Rate			Balance			Interest		Rate
Commercial loans	$	22,096		$	234		4.21	%	$	23,314		$	237		4.02	%
Real estate construction loans		3,273			46		5.58			3,500			44		4.94
Commercial mortgage loans		7,951			104		5.22			7,617			101		5.23
Residential mortgage loans		1,239			18		5.63			1,188			17		5.92
Consumer loans		2,671			31		4.68			2,461			30		4.94
Lease financing		1,266			11		3.46			1,273			15		4.63
International loans		2,149			26		4.87			2,528			25		3.95
Business loan swap income		—			45		—			—			62		—

Total loans		40,645			515		5.04			41,881			531		5.03
Investment securities available-for-sale (1)		4,225			36		3.31			4,817			37		3.00
Short-term investments		1,556			8		2.17			3,148			12		1.49

Total earning assets		46,426			559		4.78			49,846			580		4.61
Cash and due from banks		1,652								1,872
Allowance for loan losses		(774	)							(831	)
Accrued income and other assets		3,044								3,034

Total assets	$	50,348							$	53,921

Money market and NOW deposits	$	17,526			47		1.06		$	17,665			49		1.09
Savings deposits		1,652			1		0.36			1,566			2		0.43
Certificates of deposit		5,826			26		1.79			7,607			31		1.63
Foreign office time deposits		718			5		2.76			571			4		2.81

Total interest-bearing deposits		25,722			79		1.22			27,409			86		1.24
Short-term borrowings		251			1		1.36			447			1		1.06
Medium- and long-term debt		4,462			27		2.45			5,173			27		2.07

Total interest-bearing sources		30,435			107		1.40			33,029			114		1.37

Noninterest-bearing deposits		14,012								15,079
Accrued expenses and other liabilities		911								813
Common shareholders’ equity		4,990								5,000

Total liabilities and shareholders’ equity	$	50,348							$	53,921

Net interest income/rate spread (FTE)				$	452		3.38					$	466		3.24

FTE adjustment				$	1							$	1

Impact of net noninterest bearing sources of funds							0.48								0.46

Net interest margin (as a percentage of average earning assets) (FTE)							3.86	%							3.70	%

(1) Average rate based on average historical cost.

Table I — Quarterly Analysis of Net Interest Income & Rate/Volume (FTE) (continued)


	Three Months Ended
	September 30, 2004/September 30, 2003
	Increase		Increase
	(Decrease)		(Decrease)			Net
	Due to		Due to			Increase
(in millions)	Rate		Volume *			(Decrease)
Loans	$	—	$	(16	)	$	(16	)
Investments securities available-for-sale		4		(5	)		(1	)
Short-term investments		5		(9	)		(4	)

Total earning assets		9		(30	)		(21	)
Interest-bearing deposits		—		(7	)		(7	)
Short-term borrowings		1		(1	)		—
Medium and long-term debt		5		(5	)		—

Total interest-bearing sources		6		(13	)		(7	)

Net interest income/rate spread (FTE)	$	3	$	(17	)	$	(14	)

* Rate/Volume variances are allocated to variances due to volume.

Table II – Year-to-date Analysis of Net Interest Income & Rate/Volume (FTE)


	Nine Months Ended
	September 30, 2004								September 30, 2003
	Average					Average			Average					Average
(dollar amounts in millions)	Balance			Interest		Rate			Balance			Interest		Rate
Commercial loans	$	21,997		$	669		4.06	%	$	24,295		$	751		4.13	%
Real estate construction loans		3,293			129		5.24			3,554			134		5.05
Commercial mortgage loans		7,989			304		5.08			7,452			303		5.44
Residential mortgage loans		1,225			52		5.71			1,178			55		6.21
Consumer loans		2,650			92		4.62			2,452			95		5.16
Lease financing		1,276			39		4.05			1,280			44		4.59
International loans		2,171			73		4.46			2,660			89		4.47
Business loan swap income		—			154		—			—			231		—

Total loans		40,601			1,512		4.97			42,871			1,702		5.31
Investment securities available-for-sale (1)		4,411			111		3.32			4,440			124		3.72
Short-term investments		1,948			25		1.73			1,988			28		1.88

Total earning assets		46,960			1,648		4.68			49,299			1,854		5.03
Cash and due from banks		1,681								1,847
Allowance for loan losses		(805	)							(831	)
Accrued income and other assets		3,055								3,202

Total assets	$	50,891							$	53,517

Money market and NOW deposits	$	17,772			131		0.99		$	17,146			160		1.25
Savings deposits		1,636			5		0.38			1,565			6		0.52
Certificates of deposit		6,110			76		1.66			8,421			111		1.76
Foreign office time deposits		655			12		2.47			639			16		3.30

Total interest-bearing deposits		26,173			224		1.14			27,771			293		1.41
Short-term borrowings		275			2		1.05			622			6		1.24
Medium- and long-term debt		4,607			76		2.22			5,176			84		2.17

Total interest-bearing sources		31,055			302		1.30			33,569			383		1.53

Noninterest-bearing deposits		13,910								14,150
Accrued expenses and other liabilities		897								787
Common shareholders’ equity		5,029								5,011

Total liabilities and shareholders’ equity	$	50,891							$	53,517

Net interest income/rate spread (FTE)				$	1,346		3.38					$	1,471		3.50

FTE adjustment				$	2							$	2

Impact of net noninterest bearing sources of funds							0.44								0.49

Net interest margin (as a percentage of average earning assets) (FTE)							3.82	%							3.99	%

(1) Average rate based on average historical cost.

Table II – Year-to-date Analysis of Net Interest Income & Rate/Volume (FTE) (continued)


				Nine Months Ended
	September 30, 2004/September 30, 2003
	Increase			Increase
	(Decrease)			(Decrease)			Net
	Due to			Due to			Increase
(in millions)	Rate			Volume *			(Decrease)
Loans	$	(107	)	$	(83	)	$	(190	)
Investments securities available-for-sale		(12	)		(1	)		(13	)
Short-term investments		(2	)		(1	)		(3	)

Total earning assets		(121	)		(85	)		(206	)
Interest-bearing deposits		(46	)		(23	)		(69	)
Short-term borrowings		(1	)		(3	)		(4	)
Medium and long-term debt		2			(10	)		(8	)

Total interest-bearing sources		(45	)		(36	)		(81	)

Net interest income/rate spread (FTE)	$	(76	)	$	(49	)	$	(125	)

* Rate/Volume variances are allocated to variances due to volume.

Provision for Loan Losses

There was no provision for loan losses for the third quarter of 2004 compared to $83 million for the same period in 2003. The provision for the first nine months of 2004 was $85 million compared to $300 million for the same period in 2003. The Corporation establishes this provision to maintain an adequate allowance for loan losses, which is discussed in the section entitled “Allowance for Loan Losses and Nonperforming Assets.” The decrease in the provision for loan losses in the three and nine month periods ended September 30, 2004 over the comparable periods last year is primarily the result of improving credit quality trends, which are reflective of improved economic conditions in the Michigan market, where the Corporation has a geographic concentration of credit. Upturns in the Southeast Michigan Purchasing Management Survey and Michigan Business Activity Indices began in the fourth quarter of 2003 and accelerated in the first half of 2004. Forward-looking indicators suggest this positive movement should continue, but not accelerate, for the remainder of 2004 and 2005.

Noninterest Income

Noninterest income was $206 million for the three months ended September 30, 2004, a decrease of $15 million, or seven percent, over the same period in 2003. Noninterest income in the third quarter of 2004 included $6 million of net securities losses, principally due to a credit-related write-down of an investment in a private equity fund that is consolidated on the Corporation’s balance sheet, and $3 million of income distributions (net of write-downs) from unconsolidated venture capital and private equity investments, compared to $4 million of net securities gains and insignificant income distributions (net of write-downs) from unconsolidated venture capital and private equity investments in the third quarter of 2003. In addition, activity-based fees, defined as service charges on deposit accounts, commercial lending fees and letter of credit fees, were $88 million for the quarter ended September 30, 2004, a decrease of $5 million from the comparable quarter in 2003.

For the first nine months of 2004, noninterest income was $654 million, a decrease of $13 million, or two percent, from the first nine months of 2003. In the first nine months of 2004, the Corporation recognized warrant income of $6 million, a $7 million net gain on the sale of a portion of the Corporation’s merchant card processing business and $10 million of income distributions (net of write-downs) from unconsolidated venture capital and private equity investments, compared to warrant income of $1 million and a write-down (net of income distributions) of $8 million from unconsolidated venture capital and private equity investments recognized in the nine months ended September 30, 2003. Noninterest income in the first nine months of 2003 also included $46 million in net securities gains. Activity-based fees, as defined above, declined $6 million to $268 million for the first nine months of 2004 from the comparable period in 2003.

Management currently expects low single-digit noninterest income growth, excluding securities gains, in the full-year 2004 compared to 2003.

Noninterest Expenses

Noninterest expenses were $372 million for the quarter ended September 30, 2004, a decrease of $5 million, or one percent, from the comparable quarter in 2003. The decrease in noninterest expenses is primarily due to a $7 million reduction in stock-based compensation due to employee forfeitures and revisions to employee forfeiture assumptions for stock options. Litigation and operational losses, which include traditionally defined operating losses, such as fraud or processing problems, as well as uninsured losses and losses triggered by litigation, increased $10 million in the third quarter of 2004, when compared with the third quarter of 2003. These expenses are subject to fluctuation due to timing of insurance receipts and litigation settlements. This increase was substantially offset by a decline in other noninterest expenses. Severance expense was $1 million in both the third quarter 2004 and the third quarter 2003.

Noninterest expenses for the nine months ended September 30, 2004 were $1,113 million, an increase of $9 million, or one percent, from the first nine months of 2003. Salary and employee benefits expenses increased $16 million, to $686 million in the third quarter of 2004, from $670 million in the third quarter of 2003 as a result of annual merit increases, increased levels of management incentive expense and severance expenses, partially offset by a full-time equivalent employee reduction in staff size of approximately 400 employees from September 30, 2003 to September 30, 2004. Litigation and operational losses, as defined in the quarterly discussion above, were $27 million in the first nine months of 2004, an increase of $13 million from the comparable period last year. These increases were partially offset by a decline in other noninterest expenses, including a $4 million decline in the provision for credit losses on lending-related commitments. For the first nine months of 2004, severance expense was $8 million, compared to $1 million for the same period in 2003.

Management is currently targeting to reduce full-year 2004 noninterest expenses by $5 million — $10 million from 2003 levels, excluding severance expenses. Management expects total 2004 noninterest expenses, including severance expenses, to hold flat with 2003.

Provision for Income Taxes

The provision for income taxes for the third quarter of 2004 was $89 million, compared to $69 million for the same period a year ago. The effective tax rate was 31 percent for both the third quarter of 2004 and 2003. The provision for the first nine months of 2004 was $250 million compared to $229 million for the same period in 2003. The effective tax rate was 31 percent for both the first nine months of 2004 and 2003. Taxes in the first nine months of 2004 were reduced by a $4 million (after-tax) adjustment to the state tax reserves that resulted from the first quarter of 2004 settlement of a tax liability with the state of California. Management currently expects the effective tax rate to be 31 percent to 32 percent for the full-year 2004.

Strategic Lines of Business

The Corporation’s operations are strategically aligned into three major lines of business: the Business Bank, Small Business and Personal Financial Services, and Wealth and Institutional Management. These lines of business are differentiated based on the products and services provided. In addition to the three major lines of business, the Finance Division is also reported as a segment. The Other category includes items not directly associated with these lines of business or the Finance Division. Note 11 to the consolidated financial statements presents financial results of these businesses for the nine months ended September 30, 2004 and 2003. For a description of the business activities of each line of business and the methodologies, which form the basis for these results, refer to Note 26 in the Corporation’s 2003 Annual Report. In the second quarter of 2004, the Corporation changed the assumptions used in allocating internal funding credits for deposits to better capture the value of deposits in line of business and market segment reports. Accordingly, the Corporation has adjusted current and prior year information to reflect these new assumptions.

The following table presents net income (loss) by line of business.


	Nine Months Ended
(dollar amounts in millions)	September 30, 2004					September 30, 2003
Business Bank	$	526		72	%	$	452		73	%
Small Business and Personal Financial Services		136		19			127		21
Wealth and Institutional Management		64		9			36		6

		726		100	%		615		100	%
Finance		(121	)				(78	)
Other		(55	)				(34	)

	$	550				$	503

The Business Bank’s net income increased $74 million, or 16 percent, to $526 million in the nine months ended September 30, 2004, compared to the nine months ended September 30, 2003. Contributing to this increase was a $199 million decline in the provision for loan losses, primarily the result of improving credit quality trends, as discussed in “Provision for Loan Losses” above. Also contributing was a $15 million increase in noninterest income and a $21 million decrease in noninterest expenses. The increase in noninterest income was primarily due to a $20 million increase in income distributions (net of write-downs) from unconsolidated venture capital and private equity investments and a $7 million net gain on the sale of a portion of the Corporation’s merchant card processing business, partially offset by a $7 million decrease in net securities gains. The decrease in noninterest expenses was primarily due to a $13 million decline in corporate overhead expenses, a majority of which was due to timing differences between when an expense was reflected as a consolidated expense and when allocated to the segments, and a $10 million decline in salaries and related employee benefit expenses. Partially offsetting these increases to net income was a $123 million decline in net interest income, primarily due to a $2.6 billion (8 percent) decline in average loans and lower funding credits received on liabilities and equity.

Small Business and Personal Financial Services’ net income increased $9 million, or seven percent, to $136 million for the nine months ended September 30, 2004, compared to the nine months ended September 30, 2003. The

increase in net income was primarily due to a $14 million decline in the provision for loan losses and a $26 million decline in noninterest expenses, partially offset by a $24 million decrease in net interest income. The decline in noninterest expenses was primarily due to a $12 million decrease in corporate overhead expenses, a majority of which was due to timing differences between when an expense was reflected as a consolidated expense and when allocated to the segments, a $7 million decline in processing charges due to lower branch and other consumer related activity and a $2 million decrease in the provision for credit losses on lending-related commitments. The decline in net interest income was primarily due to lower funding credits received on liabilities and equity.

Wealth and Institutional Management’s net income increased $28 million, or 77 percent, to $64 million for the nine months ended September 30, 2004, compared to the nine months ended September 30, 2003. The increase in net income is primarily the result of a $20 million decline in the provision for loan losses and a $12 million increase in noninterest income, largely due to increases in fiduciary income and investment advisory fees.

The net loss for the Finance division was $121 million for the nine months ended September 30, 2004, compared to a net loss of $78 million for the nine months ended September 30, 2003. The higher net loss resulted primarily from a $40 million decline in net securities gains.

The net loss for the Other category was $55 million for the nine months ended September 30, 2004, compared to a net loss of $34 million for the nine months ended September 30, 2003. The primary reason for the higher net loss was an $18 million increase in unallocated loan loss provision.

Market Segments

The Corporation’s management accounting system also produces market segment results for the Corporation’s four primary geographic regions: Midwest and Other Markets, Western, Texas, and Florida. Note 11 to the consolidated financial statements presents financial results of these market segments for the nine months ended September 30, 2004 and 2003.

The following table presents net income (loss) by market segment.


	Nine Months Ended
(dollar amounts in millions)	September 30, 2004					September 30, 2003
Midwest and Other Markets	$	412		57	%	$	325		53	%
Western		229		31			217		35
Texas		72		10			63		10
Florida		13		2			10		2

		726		100	%		615		100	%
Finance and Other Businesses		(176	)				(112	)

	$	550				$	503

Midwest and Other Markets’ net income increased $87 million, or 27 percent, to $412 million for the nine months ended September 30, 2004, compared to the nine months ended September 30, 2003. Contributing to this increase was a $177 million decline in the provision for loan losses, primarily the result of improving credit quality trends, as discussed in “Provision for Loan Losses” above. Also contributing were a $16 million increase in noninterest income and an $18 million decline in noninterest expenses. The increase in noninterest income was primarily due to a $19 million increase in income distributions (net of write-downs) from unconsolidated venture capital and private equity investments, offset by a $6 million decrease in net securities gains. The decrease in noninterest expenses was primarily due to a $17 million decline in corporate overhead expenses, a majority of which was due to timing differences between when an expense was reflected as a consolidated expense and when allocated to the segments. Partially offsetting these increases to net income was an $81 million decline in net interest income, primarily due to a $1.9 billion (8 percent) decline in average loans and lower funding credits received on liabilities and equity.

The Western Region’s net income increased $12 million, or six percent, to $229 million for the nine months ended September 30, 2004, compared to the nine months ended September 30, 2003. Contributing to this increase were a $41 million decline in the provision for loan losses and a $24 million decline in noninterest expenses. The decline in noninterest expenses was primarily due to a $9 million decline in corporate overhead expenses, a majority of which was due to timing differences between when an expense was reflected as a consolidated expense and when allocated to the

segments, and a $9 million decrease in salaries and related employee benefits expenses. Partially offsetting these increases to net income was a $50 million decline in net interest income, primarily from lower funding credits received on liabilities and equity, and a $477 million (4 percent) decline in loan balances. Of the $50 million decline in net interest income, $29 million was due to lower title and escrow deposits in the Corporation’s Financial Services Group.

The Texas Region’s net income increased $9 million, or 14 percent, to $72 million for the nine months ended September 30, 2004, compared to the nine months ended September 30, 2003. Contributing to this increase was a $16 million decline in the provision for loan losses and an $11 million decline in noninterest expenses. The decline in noninterest expenses was primarily due to $4 million decrease in corporate overhead expenses, a $2 million decrease in salaries and related employee benefits expenses and a $2 million decrease in the provision for credit losses on lending-related commitments. Partially offsetting these increases to net income was a $14 million decline in net interest income, primarily due to a $438 million (10 percent) decline in average deposits, which reduced the region’s funding credits.

The Florida Region’s net income increased $3 million, or 30 percent, to $13 million for the nine months ended September 30, 2004, compared to the nine months ended September 30, 2003. Noninterest expenses decreased $3 million, primarily due to insurance proceeds related to a legal settlement.

The net loss for the Finance and Other Businesses segment was $176 million for the nine months ended September 30, 2004, compared to a net loss of $112 million for the nine months ended September 30, 2003. The higher net loss was primarily due to a $40 million decline in net securities gains and an $18 million increase in unallocated loan loss provision.

Financial Condition

Total assets were $53.0 billion at September 30, 2004 compared with $52.6 billion at year-end 2003 and $54.8 billion at September 30, 2003. Total period end loans decreased one percent from December 31, 2003 to September 30, 2004. Within loans, on an average basis, there was growth in the Private Banking (13 percent), Specialty Businesses (9 percent) and National Dealer Services (6 percent) loan portfolios, from the fourth quarter 2003 to the third quarter 2004. Average loans declined in the same periods in the Global Corporate Banking (11 percent) and Personal Financial Services (7 percent) loan portfolios. Short-term investments increased $1.0 billion from December 31, 2003 to September 30, 2004 as a result of the significant increase in short-term deposits discussed below.

Management currently expects a mid-single digit decrease in average loans in 2004, when compared to 2003 levels. Year-end 2004 loan balances are expected to remain flat when compared to year-end 2003.

Total liabilities increased $441 million, or one percent, from $47.5 billion at December 31, 2003, to $47.9 billion at September 30, 2004. Total deposits increased two percent to $42.2 billion at September 30, 2004, from $41.5 billion at year-end. Deposits in the Corporation’s Financial Services Group, which benefit from high home mortgage financing and refinancing activity and some of which are not expected to be long-lived, increased to $9.8 billion at September 30, 2004 from $7.0 billion at December 31, 2003, primarily due to strong mortgage business activity. Medium- and long-term debt decreased $400 million to $4.4 billion at September 30, 2004 from year-end levels, as a result of the maturity of $750 million of medium-term notes, partially offset by the issuance of $100 million in medium-term notes and the issuance of $250 million of subordinated notes.

Allowance for Loan Losses and Nonperforming Assets

The allowance for loan losses represents management’s assessment of probable losses inherent in the Corporation’s loan portfolio. The allowance provides for probable losses that have been identified with specific customer relationships and for probable losses believed to be inherent in the loan portfolio, but that have not been specifically identified. Internal risk ratings are assigned to each business loan at the time of approval and are subject to subsequent periodic reviews by senior management. The Corporation performs a detailed credit quality review quarterly on large business loans and certain large personal purpose loans to individuals that have deteriorated below certain levels of credit risk, and may allocate a specific portion of the allowance to such loans based upon this review. The Corporation defines business loans as those belonging to the commercial, real estate construction, commercial mortgage, lease financing and international loan portfolios. A portion of the allowance is allocated to the remaining business loans by applying projected loss ratios, based on numerous factors identified below, to the loans within each risk rating. In addition, a portion of the allowance is allocated to these remaining loans based on industry specific and geographic risks inherent in certain portfolios, including portfolio exposures to automotive suppliers, retailers, contractors, technology-related,

entertainment, air transportation and healthcare industries, small business administration loans and certain Latin American risks. The portion of the allowance allocated to loans originated in the Personal Financial Services division is determined by applying projected loss ratios to various segments of the loan portfolio. Projected loss ratios incorporate factors such as recent charge-off experience, current economic conditions and trends, trends with respect to past due and nonaccrual amounts, and are supported by underlying analysis, including information from certain portfolios on migration and loss given default studies from each geographic market. The allocated portion of the allowance was $657 million at September 30, 2004, a decrease of $105 million from December 31, 2003.

Actual loss ratios experienced in the future may vary from those projected. The uncertainty occurs because factors affecting the determination of probable losses inherent in the loan portfolio may exist which are not necessarily captured by the application of projected loss ratios or identified industry specific and geographic risks. An unallocated portion of the allowance is maintained to capture these probable losses. The unallocated allowance reflects management’s view that the allowance should recognize the margin for error inherent in the process of estimating expected loan losses. Factors that were considered in the evaluation of the adequacy of the Corporation’s unallocated allowance include the imprecision in the risk rating system, limited historical perspective in the application of the Corporation’s recently enhanced portfolio analytic tools and the risk associated with new customer relationships. The unallocated portion of the allowance was $72 million at September 30, 2004, an increase of $31 million from December 31, 2003.

The total allowance, including the unallocated amount, is available to absorb losses from any segment within the portfolio. Unanticipated economic events, including political, economic and regulatory stability in countries where the Corporation has a concentration of loans, could cause changes in the credit characteristics of the portfolio and result in an unanticipated increase in the allocated allowance. Inclusion of other industry specific and geographic portfolio exposures in the allocated allowance, as well as significant increases in the current portfolio exposures, could also increase the amount of the allocated allowance. Any of these events, or some combination, may result in the need for additional provision for loan losses in order to maintain an adequate allowance.

At September 30, 2004, the allowance for loan losses was $729 million, a decrease of $74 million from $803 million at December 31, 2003. The allowance for loan losses as a percentage of total period-end loans decreased to 1.83 percent from 1.99 percent at December 31, 2003. The Corporation also had an allowance for credit losses on lending-related commitments of $24 million and $33 million, at September 30, 2004 and December 31, 2003, respectively, which is recorded in “accrued expenses and other liabilities” on the consolidated balance sheets. These lending-related commitments include unfunded loan commitments and letters of credit.

Nonperforming assets at September 30, 2004 were $388 million, as compared to $538 million at December 31, 2003, a decrease of $150 million, or 28 percent. The allowance for loan losses as a percentage of nonperforming assets increased to 188 percent at September 30, 2004, from 149 percent at December 31, 2003.

Nonperforming assets at September 30, 2004 and December 31, 2003 were categorized as follows:


	September 30,		December 31,
(in millions)	2004		2003
Nonaccrual loans:
Commercial	$	181	$	295
Real estate construction
Real estate construction business line		28		21
Other		3		3

Total real estate construction		31		24
Commercial mortgage
Commercial real estate business line		10		3
Other		70		84

Total commercial mortgage		80		87
Residential mortgage		1		2
Consumer		2		7
Lease financing		19		24
International		47		68

Total nonaccrual loans		361		507
Reduced-rate loans		—		—

Total nonperforming loans		361		507
Other real estate		27		30
Nonaccrual debt securities		—		1

Total nonperforming assets	$	388	$	538

Loans past due 90 days or more and still accruing	$	20	$	32

The following table presents a summary of changes in nonaccrual loans.


	Three Months Ended
(in millions)	September 30, 2004			June 30, 2004			March 31, 2004
Nonaccrual loans at beginning of period	$	404		$	489		$	507
Loans transferred to nonaccrual (1)		106			63			92
Nonaccrual business loan gross charge-offs (2)		(48	)		(71	)		(80	)
Loans transferred to accrual status (1)		—			—			—
Nonaccrual business loans sold (3)		(16	)		(33	)		(14	)
Payments/Other (4)		(85	)		(44	)		(16	)

Nonaccrual loans at end of period	$	361		$	404		$	489


(1) Based on an analysis of nonaccrual loans with book balances greater than $2 million. (2) Analysis of gross loan charge-offs:

Nonaccrual business loans	$	48		$	71		$	80
Performing business loans		2			1			1
Consumer loans		3			4			3

Total gross loan charge-offs	$	53		$	76		$	84


(3) Analysis of loans sold:

Nonaccrual business loans	$	16		$	33		$	14
Performing watch list loans sold		30			14			18

Total loans sold	$	46		$	47		$	32

(4) Net change related to nonaccrual loans with balances less than $2 million, other than business loan gross charge-offs and nonaccrual loans sold, are included in Payments/Other.

Loans with balances greater than $2 million transferred to nonaccrual status were $106 million in the third quarter of 2004, up from $63 million and $92 million in the second and first quarters of 2004, respectively. There were two loans greater than $10 million transferred to nonaccrual during the third quarter of 2004. These loans totaled $30 million and are to companies in the automotive industry, one of which was an international customer.

The following table presents a summary of total internally classified nonaccrual and watch list loans (generally consistent with regulatory defined special mention, substandard and doubtful loans) at September 30, 2004, June 30, 2004 and December 31, 2003. Consistent with the decrease in nonaccrual loans from December 31, 2003 to September 30, 2004, total nonaccrual and watch list loans decreased both in dollars and as a percentage of the total loan portfolio.


(dollar amounts in millions)	September 30, 2004			June 30, 2004			December 31, 2003
Total nonaccrual and watch list loans	$	2,476		$	2,639		$	3,284
As a percentage of total loans		6.2	%		6.6	%		8.2	%

The following table presents a summary of nonaccrual loans at September 30, 2004 and loans transferred to nonaccrual and net charge-offs during the three months ended September 30, 2004, based on the Standard Industrial Classification (SIC) code.


					Three Months Ended
(dollar amounts in millions)	September 30, 2004				September 30, 2004
					Loans Transferred				Net
SIC Category	Nonaccrual Loans				To Nonaccrual *				Charge-Offs
Automotive	$	92	26	%	$	30	28	%	$	10		31	%
Real Estate		52	14			7	7			1		4
Services		40	11			5	5			1		4
Non-Automotive Manufacturing		36	10			22	21			3		9
Retail Trade		34	9			—	—			2		6
Transportation		23	6			8	7			1		3
Wholesale Trade		20	6			10	10			2		6
Airline Transportation		19	5			7	6			1		1
Entertainment		11	3			—	—			2		7
Utilities		10	3			2	2			(3	)	(8	)
Technology Related		10	3			—	—			2		6
Contractors		7	2			9	8			9		25
Other		7	2			6	6			2		6

Total	$	361	100	%	$	106	100	%	$	33		100	%

* Based on an analysis of nonaccrual loans with book balances greater than $2 million.

Shared National Credit Program (SNC) loans comprised approximately 17 percent of total nonperforming loans at September 30, 2004 and 20 percent at December 31, 2003. SNC loans are facilities greater than $20 million shared by three or more federally supervised financial institutions which are reviewed by regulatory authorities at the agent bank level. SNC loans comprised approximately 15 percent and 14 percent of total loans at September 30, 2004 and December 31, 2003, respectively. SNC loans comprised approximately $1 million of third quarter 2004 total net charge-offs.

Net charge-offs for the third quarter of 2004 were $33 million, or 0.33 percent of average total loans, compared with $83 million, or 0.79 percent, for the third quarter of 2003. The carrying value of nonaccrual loans as a percentage of contractual value declined to 53 percent at September 30, 2004 compared to 58 percent at December 31, 2003. There was no provision for loan losses for the third quarter of 2004, compared to $83 million for the same period in 2003.

Management currently expects full-year 2004 average net charge-offs to be approximately 50 basis points.

Capital

Common shareholders’ equity was $5.0 billion at September 30, 2004, a decrease of $74 million from December 31, 2003. The following table presents a summary of changes in common shareholders’ equity in the first nine months of 2004:


(in millions)
Balance at January 1, 2004	$	5,110
Retention of retained earnings (net income less cash dividends declared)		282
Recognition of stock-based compensation expense		26
Net issuance of common stock under employee stock plans		52
Change in accumulated other comprehensive income *		(98	)
Repurchase of approximately 6.0 million common shares in the open market		(336	)

Balance at September 30, 2004	$	5,036

* Includes a decrease in accumulated net gains on cash flow hedges ($91 million) and an increase in net unrealized losses on investment securities available-for-sale ($5 million), due to changes in the interest rate environment.

See “Part II. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” for information regarding the Corporation’s stock repurchases.

The Corporation’s capital ratios exceed minimum regulatory requirements as follows:


	September 30,			December 31,
	2004			2003
Tier 1 common capital ratio		8.16	%		8.04	%
Tier 1 risk-based capital ratio (4.00% — minimum)		8.81			8.72
Total risk-based capital ratio (8.00% — minimum)		13.06			12.71
Leverage ratio (3.00% — minimum)		10.28			10.13

At September 30, 2004, the Corporation and its banking subsidiaries exceeded the ratios required to be considered “well capitalized” (total risk-based capital, tier 1 risk-based capital and leverage ratios greater than 10 percent, 6 percent and 5 percent, respectively).

Critical Accounting Policies

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 included in the Corporation’s 2003 Annual Report, as updated in Note 1 to the unaudited consolidated financial statements in this report. 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. The most critical of these significant accounting policies are the policies for allowance for loan losses, pension plan accounting and goodwill. These policies are reviewed with the Audit and Legal Committee of the Corporation’s Board of Directors and are discussed more fully on pages 53-55 of the Corporation’s 2003 Annual Report. As of the date of this report, the Corporation does not believe that there has been a material change in the nature or categories of its critical accounting policies or its estimates and assumptions from those discussed in its 2003 Annual Report.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Net interest income is the predominant source of revenue for the Corporation. Interest rate risk arises primarily through the Corporation’s core business activities of extending loans and accepting deposits. The Corporation actively manages its material exposure to interest rate risk. Management attempts to evaluate the effect of movements in interest rates on net interest income and uses interest rate swaps and other instruments to manage its interest rate risk exposure. The primary tool used by the Corporation in determining its exposure to interest rate risk is net interest income simulation analysis. The net interest income simulation analysis performed at the end of each quarter reflects changes to both interest rates and loan, investment and deposit volumes. Management evaluates “base” net interest income under what is believed to be the most likely balance sheet structure and interest rate environment. This “base” net interest income is then evaluated against interest rate scenarios that increase and decrease 200 basis points (but no lower than zero percent) from the most likely rate environment. For purposes of this analysis, the rise or decline in short-term interest rates occurs ratably over four months. The measurement of risk exposure at September 30, 2004 for a decline in short-term interest rates to zero percent identified approximately $71 million, or four percent, of forecasted net interest income at risk over the next 12 months. If short-term interest rates rise 200 basis points, forecasted net interest income would be enhanced by approximately $103 million, or six percent. Corresponding measures of risk exposure at December 31, 2003 were approximately $41 million of net interest income at risk for a decline in rates to zero percent and an approximately $82 million enhancement of net interest income for a 200 basis point rise in rates. Corporate policy limits adverse change to no more than five percent of management’s most likely net interest income forecast and the Corporation is operating within this policy guideline.

Secondarily, the Corporation utilizes an economic value of equity analysis and a traditional interest sensitivity gap measure as alternative measures of interest rate risk exposure. At September 30, 2004, all three measures of interest rate risk were within established corporate policy guidelines.

At September 30, 2004, the Corporation had a $127 million portfolio of indirect (through funds) private equity and venture capital investments, and had commitments of $55 million to fund additional investments in future periods. The value of these investments is at risk to changes in equity markets, general economic conditions and a variety of other factors. The majority of these investments are not marketable and are reported in other assets. The investments are individually reviewed for impairment on a quarterly basis, by comparing the carrying value to the estimated fair value. The Corporation bases estimates of fair value for the majority of its indirect private equity and venture capital investments on the percentage ownership in the fair value of the entire fund, as reported by the fund management. In general, the Corporation does not have the benefit of the same information regarding the fund’s underlying investments as does fund management. Therefore, after indication that fund management adheres to accepted, sound and recognized valuation techniques, the Corporation generally utilizes the fair values assigned to the underlying portfolio investments by fund management. For those funds where fair value is not reported by fund management, the Corporation derives the fair value of the fund by estimating the fair value of each underlying investment in the fund. In addition to using qualitative information about each underlying investment, as provided by the fund management, the Corporation gives consideration to information pertinent to the specific nature of the debt or equity investment, such as relevant market conditions, offering prices, operating results, financial conditions, exit strategy, and other qualitative information, as available. The uncertainty in the economy and equity markets may affect the values of the fund investments.

Certain components of the Corporation’s noninterest income, primarily fiduciary income and investment advisory revenue, are at risk to fluctuations in the market values of underlying assets, particularly equity securities. Other components of noninterest income, primarily brokerage fees, are at risk to changes in the level of market activity.

For further discussion of market risk, see Note 8 and pages 46-52 of the Corporation’s 2003 Annual Report.

ITEM 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures . Management has evaluated, with the participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Corporation’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on the evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, the Corporation’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Corporation in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b) Changes in Internal Controls. During the period to which this report relates, there have not been any changes in the Corporation’s internal controls over financial reporting that have materially affected, or that are reasonably likely to materially affect, such controls.

Forward-looking statements

This report includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. All statements regarding the Corporation’s expected financial position, strategies and growth prospects and general economic conditions expected to exist in the future are forward-looking statements. The words, “anticipates,” “believes,” “feels,” “expects,” “estimates,” “seeks,” “strives,” “plans,” “intends,” “outlook,” “forecast,” “position,” “target,” “mission,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “outcome,” “continue,” “remain,” “maintain,” “trend” 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), the following factors, among others, could cause actual results to differ materially from forward-looking statements and future results could differ materially from historical performance. The Corporation cautions that these factors are not exclusive.

• general political, economic or industry conditions, either domestically or internationally, may be less favorable than expected;

• developments concerning credit quality in various industry sectors may result in an increase in the level of the Corporation’s provision for credit losses, nonperforming assets, net charge-offs and reserve for credit losses;

• demand for commercial loans and investment advisory products may not accelerate as expected;

• the mix of interest rates and maturities of the Corporation’s interest earning assets and interest-bearing liabilities (primarily loans and deposits) may be less favorable than expected;

• interest rate margin changes may be greater than expected;

• there could be fluctuations in inflation or interest rates;

• there could be changes in trade, monetary and fiscal policies, including, but not limited to, the interest rate policies of the Board of Governors of the Federal Reserve System;

• customer borrowing, repayment, investment and deposit practices generally may be different than anticipated;

• management’s ability to maintain and expand customer relationships may differ from expectations;

• the introductions, withdrawal, success and timing of business initiatives and strategies, including, but not limited to the opening of new branches or private banking offices, and plans to grow personal financial services and wealth management, may be less successful or may be different than anticipated;

• competitive product and pricing pressures among financial institutions within the Corporation’s markets may change;

• instruments, systems and strategies used to hedge or otherwise manage exposure to various types of market, credit, operational and enterprise-wide risk could be less effective than anticipated, and the Corporation may not be able to effectively mitigate its risk exposures in particular market environments or against particular types of risk;

• there could be terrorist activities or other hostilities, which may adversely affect the general economy, financial and capital markets, specific industries, and the Corporation;

• there could be changes in applicable laws and regulations, including, but not limited to, those concerning taxes, banking, securities, and insurance; and

• there could be adverse conditions in the stock market.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

The Corporation and certain of its subsidiaries are subject to various pending or threatened legal proceedings, including certain purported class actions, arising out of the normal course of business or operations. In view of the inherent difficulty of predicting the outcome of such matters, the Corporation cannot state what the eventual outcome of these matters will be. However, 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 will not have a material adverse effect on the Corporation’s consolidated financial condition or results of operations.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

On December 1, 2003, the Corporation announced it would resume its share repurchase program pursuant to its August 2001 Board of Directors’ resolutions, authorizing the repurchase of up to 10 million shares of the Corporation’s outstanding common stock. On March 23, 2004, the Board of Directors of the Corporation authorized the additional purchase of up to 10 million shares of Comerica Incorporated outstanding common stock. All share repurchases under the Corporation’s share repurchase program are transacted in the open market and are within the scope of Rule 10b-18, which provides a safe harbor for purchases in a given day if an issuer of equity securities satisfies the manner, timing, price and volume conditions of the rule when purchasing its own common shares in the open market. The following table summarizes the Corporation’s share repurchase activity for the nine months ended September 30, 2004.


							Maximum
							Number of
	Total				Total Number of Shares		Shares that May
(shares in millions)	Number of Shares		Average Price		Purchased as Part of Publicly Announced Plans		Yet be Purchased Under the Plans
Month Ended	Purchased		Paid Per Share		or Programs		or Programs
January 31, 2004		0.5	$	57.62		0.5		4.3
February 29, 2004		0.7		56.93		0.7		3.6
March 31, 2004*		1.2		54.83		1.2		12.4
April 30, 2004		0.3		52.10		0.3		12.1
May 31, 2004		0.4		53.23		0.4		11.7
June 30, 2004		1.4		55.29		1.4		10.3
July 31, 2004		0.3		58.12		0.3		10.0
August 31, 2004		0.6		58.66		0.6		9.4
September 30, 2004		0.6		59.81		0.6		8.8

Total		6.0	$	56.24		6.0		8.8

* Total remaining share repurchase authorization includes the 10 million share repurchase resolution announced on March 23, 2004.

ITEM 6. Exhibits


(10.1)		Form of Standard Comerica Incorporated Non-Employee Director Restricted Stock Unit Agreement under the Comerica Incorporated Incentive Plan for Non-Employee Directors

(10.2)		Form of Standard Comerica Incorporated Restricted Stock Award Agreement (Cliff Vesting) under the Amended and Restated Comerica Incorporated 1997 Long-Term Incentive Plan

(10.3)		Form of Standard Comerica Incorporated Restricted Stock Award Agreement (Non-Cliff Vesting) under the Amended and Restated Comerica Incorporated 1997 Long-Term Incentive Plan

(10.4)		Form of Standard Comerica Incorporated Non-Qualified Stock Option Agreement under the Amended and Restated Comerica Incorporated 1997 Long-Term Incentive Plan

(10.5)		Form of Standard Comerica Incorporated No Sale Agreement under the Amended and Restated Comerica Incorporated Management Incentive Plan

(10.6)		Comerica Incorporated Amended and Restated Employee Stock Purchase Plan

(11)		Statement re: Computation of Net Income Per Common Share

(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)		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)

SIGNATURES

Pursuant to the requirements 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.

COMERICA INCORPORATED
(Registrant)

/s/ Elizabeth S. Acton

Elizabeth S. Acton

Executive Vice President and Chief Financial Officer

/s/ Marvin J. Elenbaas

Marvin J. Elenbaas

Senior Vice President and Controller (Principal Accounting Officer)

Date: November 5, 2004

EXHIBIT INDEX


Exhibit No.		Description
10.1		Form of Standard Comerica Incorporated Non-Employee Director Restricted Stock Unit Agreement under the Comerica Incorporated Incentive Plan for Non-Employee Directors

10.2		Form of Standard Comerica Incorporated Restricted Stock Award Agreement (Cliff Vesting) under the Amended and Restated Comerica Incorporated 1997 Long-Term Incentive Plan

10.3		Form of Standard Comerica Incorporated Restricted Stock Award Agreement (Non-Cliff Vesting) under the Amended and Restated Comerica Incorporated 1997 Long-Term Incentive Plan

10.4		Form of Standard Comerica Incorporated Non-Qualified Stock Option Agreement under the Amended and Restated Comerica Incorporated 1997 Long-Term Incentive Plan

10.5		Form of Standard Comerica Incorporated No Sale Agreement under the Amended and Restated Comerica Incorporated Management Incentive Plan

10.6		Comerica Incorporated Amended and Restated Employee Stock Purchase Plan

11		Statement re: Computation of Net Income Per Common Share

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		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)

EXHIBIT 10.1

COMERICA INCORPORATED
NON-EMPLOYEE DIRECTOR
RESTRICTED STOCK UNIT AGREEMENT

THIS AGREEMENT is made as of the ____ day of __________, 2___, by and between Comerica Incorporated, a Delaware corporation (hereinafter referred to as the "Corporation"), and _______________ (hereinafter referred to as the "Director"). Any undefined terms appearing herein as defined terms shall have the same meaning as they do in the Comerica Incorporated Incentive Plan for Non-Employee Directors, as amended from time to time (the "Plan").

WITNESSETH THAT:

WHEREAS, the Corporation desires to grant to the Director an award of Restricted Stock Units ("RSUs") under the Plan and the terms hereinafter set forth:

NOW, THEREFORE, in consideration of the premises, and of the mutual agreements hereinafter set forth, it is covenanted and agreed as follows:

1. AWARD. Pursuant to the provisions of the Plan, the Corporation awards _________<insert number> RSUs (the "Award") to the Director on ___________, 2___ (the "Date of Award"). Each RSU shall represent an unfunded, unsecured right for the Director to receive one (1) share of the Corporation's common stock, par value $5.00 per share (the "Common Stock").

2. OWNERSHIP RIGHTS. The Director has no voting or other ownership rights in the Corporation arising from the Award of RSUs under this Agreement.

3. DIVIDENDS. The Director shall be credited with dividend equivalents equal to the dividends the Director would have received if the Director had been the owner of a number of shares of Common Stock equal to the number of RSUs credited to the Director on such dividend payment date (the "Dividend Equivalent"). Any Dividend Equivalent deriving from a cash dividend shall be converted into additional RSUs based on the Fair Market Value of Common Stock on the dividend payment date. Any Dividend Equivalent deriving from a dividend of shares of Common Stock shall be converted into additional RSUs on a one-for-one basis. The Director shall continue to be credited with Dividend Equivalents until the Settlement Date (defined below). The Dividend Equivalents so credited shall be subject to the same terms and conditions as the corresponding Award, and they shall vest (or, if applicable, be forfeited) and be settled in the same manner and at the same time as the corresponding Award, as if they had been granted at the same time as such Award.

4. VESTING. The Award shall vest one year after the Date of Award, with such vesting contingent upon the Director's continued service as a director of the Corporation for a period of one year after the Date of Award. Except as provided in Section 6, if a Director's service as a director of the Corporation terminates for any reason prior to the one (1) year anniversary of the Date of Award, the Award and all corresponding Dividend Equivalents shall be forfeited, and no shares of Common Stock or other payment shall be made to the Director in respect of the Award or any corresponding Dividend Equivalents.

5. SETTLEMENT. Once vested, the Award will be settled as follows:

(a) IN GENERAL. Subject to Section 6 hereof, the Award will be settled in Common Stock. Settlement of the Award shall occur as of the one-year anniversary of the date that the Director's service as a director of the Corporation terminates or, in the case of the Director's cessation of service due to death or disability or upon a Change of Control, such earlier date as set forth in
Section 6 hereof (the "Settlement Date"). On the Settlement Date, the Corporation shall issue or cause there to be transferred to the Director a number of shares of Common Stock equal to the aggregate number of RSUs granted to the Director under this Agreement (including, without limitation, the RSUs attributable to Dividend Equivalents) (the "Settlement Shares").

(b) TERMINATION OF RIGHTS. Upon the issuance or transfer of Settlement Shares in settlement of the Award (including, without limitation, the RSUs attributable to Dividend Equivalents), the Award shall be settled in full and the Director (or his or her designated beneficiary or estate, in the case of death) shall have no further rights in respect of the Award.

(c) CERTIFICATES OR BOOK ENTRY. As of the Settlement Date, the Corporation shall, at the discretion of the Committee or its designee, either issue one or more certificates in the Director's name for such Settlement Shares or evidence book-entry registration of the Settlement Shares in the Director's name (or, in the case of death, to the Director's designated beneficiary, if any).

(d) CONDITIONS TO DELIVERY. Notwithstanding any other provision of this Agreement, the Corporation shall not be required to evidence book-entry registration or issue or deliver any certificate or certificates representing Settlement Shares prior to fulfillment of all of the following conditions:

(1) Listing or approval for listing upon notice of issuance, of the Settlement Shares on the New York Stock Exchange, Inc., or such other securities exchange as may at the time be the principal market for the Common Stock;

(2) Any registration or other qualification of the Settlement Shares under any state or federal law or regulation, or the maintaining in effect of any such registration or other qualification which the Committee shall, in its sole and absolute discretion upon the advice of counsel, deem necessary or advisable; and

(3) Obtaining any other consent, approval, or permit from any state or federal governmental agency which the Committee shall, in its sole and absolute discretion after receiving the advice of counsel, determine to be necessary or advisable.

(e) LEGENDS. The Settlement Shares shall be subject to such stop transfer orders and other restrictions as the Committee may deem reasonably advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Settlement Shares are listed, any applicable federal or state laws or the Corporation's Certificate of Incorporation and Bylaws, and the Committee may cause a legend or legends to be put on or otherwise apply to any certificates or book-entry position representing Settlement Shares to make appropriate reference to such restrictions.

6. CHANGE OF CONTROL; DEATH, DISABILITY OR RETIREMENT. Notwithstanding anything in this Agreement to the contrary:

(a) Upon a Change of Control, the Award (including, without limitation, the RSUs attributable to Dividend Equivalents) shall immediately and fully vest and become nonforfeitable, any deferral or other restriction shall lapse and such Award shall be settled in cash (rather than Settlement Shares) as promptly as is practicable, but in no event later than 30 days following the date of such Change of Control.

(b) In the event of the death, disability or retirement of the Director while serving as a director with the Corporation, the Award (including, without limitation, the RSUs attributable to Dividend Equivalents) shall immediately and fully vest and become nonforfeitable, any deferral or other restriction shall lapse and the Award shall be settled as set forth in Section 5; provided, however, that in the case of the Director's cessation of service due to death or disability, the Corporation shall issue or cause there to be transferred to the Director (or, in the case of death, to the Director's designated beneficiary or, if no designated beneficiary is living on the date of the Director's death, the Director's estate) the Settlement Shares as promptly as is practicable following the date of the Director's cessation of service.

(c) The Committee shall have the sole and absolute discretion to determine whether the termination of the Director's membership on the board of directors of the Corporation is by reason of disability or retirement.

7. TRANSFERABILITY. Unless otherwise determined by the Committee, the RSUs subject to this Award (including, without limitation, Dividend Equivalents) may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Director otherwise than by will or by the laws of intestacy, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Corporation or any Subsidiary or Affiliate; provided, however, that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

8. ADJUSTMENT IN AWARD. In the event the number of outstanding shares of Common Stock changes as a result of any stock split, stock dividend, recapitalization, merger, consolidation, reorganization, combination, or exchange of shares, split-up, split-off, spin-off, liquidation or other similar change in capitalization, or any distribution made to holders of Common Stock other than cash dividends, the number or kind of shares subject to this Award shall be automatically adjusted, and the Committee shall be authorized to make such other equitable adjustments of the Award or shares of Common Stock issuable pursuant thereto so that the value of the interest of the Director shall not be decreased by reason of the occurrence of such event. Any such adjustment shall be deemed conclusive and binding on the Corporation, the Director, his or her beneficiaries and all other interested parties.

9. ADMINISTRATION; AMENDMENT. This Award has been made pursuant to a determination by the Committee and/or the Board of Directors of the Corporation, and the Committee shall have plenary authority to interpret, in its sole and absolute discretion, any provision of this Agreement and to make any determinations necessary or advisable for the administration of this Agreement. All such interpretations and determinations shall be final and binding on all persons, including the Corporation, the Director, his or her beneficiaries and all other interested parties. Subject to the terms of the Plan, this Agreement may be amended, in whole or in part, at any time by the Committee; provided, however, that no amendment to this Agreement may adversely affect the Director's rights under this Agreement without the Director's consent except such an amendment made to cause the Award to comply with applicable law, stock exchange rules or accounting rules.

10. BINDING NATURE OF PLAN. The Award is subject to the Plan. The Director agrees to be bound by all terms and provisions of the Plan and related administrative rules and procedures, including, without limitation, terms and provisions and administrative rules and procedures adopted and/or modified after the granting of the Award. In the event any provisions hereof are inconsistent with those of the Plan, the provisions of the Plan shall control, except to the extent expressly modified herein pursuant to authority granted under the Plan.

11. APPLICABLE LAW. The validity, construction, and effect of this Agreement and any rules and regulations relating to the Agreement shall be determined in accordance with the laws of the State of Delaware, without giving effect to the choice of law principles thereof.

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on its behalf, and the Director has signed this Agreement to evidence the Director's acceptance of the terms hereof, all as of the date first above written.

COMERICA INCORPORATED

By:______________________________

DIRECTOR

Name:

EXHIBIT 10.2

COMERICA INCORPORATED
RESTRICTED STOCK AWARD AGREEMENT

THIS AGREEMENT (the "Agreement") between Comerica Incorporated (the "Company") and _________ ("you") is effective as of _______________, 2___. Any undefined terms appearing herein as defined terms shall have the same meaning as they do in the Amended and Restated Comerica Incorporated 1997 Long-Term Incentive Plan (the "Plan"). The Company will provide a copy of the Plan to you upon your request.

WITNESSETH:

1. AWARD OF STOCK. Pursuant to the provisions of the Plan, the Company hereby awards you, subject to the terms and conditions of the Plan (incorporated herein by reference), and subject further to the terms and conditions in this Agreement ____________ shares of $5.00 par value common stock of the Company (the "Stock Award").

2. VESTING OF STOCK AWARD. Your Stock Award will be subject to forfeiture during the Restriction Period. The Restriction Period will begin on the date of this Agreement and end on ___________. Subject to the terms of the Plan and this Agreement, including, without limitation, your fulfillment of the employment requirements in paragraph 4 below, your Stock Award will vest and become free of restrictions at the end of the Restriction Period (except in the case of your earlier death or Disability or an earlier Change of Control of the Company, as set forth below). As soon as administratively feasible after the lapse of restrictions on and vesting of your Stock Award and your payment of any applicable taxes, the Company will deliver to you (or to your designated beneficiary if you are not then living) evidence of your ownership (by book entry or certificate), of the shares subject to the Stock Award that have vested and for which you have paid any applicable taxes. You will have a taxable event on the date the Restriction Period ends.

3. CANCELLATION OF STOCK AWARD. The Committee has the right to cancel all or any portion of the Stock Award in accordance with Section 4 of the Plan if the Committee determines in good faith that you have done any of the following: (i) committed a felony; (ii) committed fraud; (iii) embezzled; (iv) disclosed confidential information or trade secrets; (v) were terminated for cause; (vi) engaged in any activity in competition with the business of the Company or any subsidiary or affiliate of the Company; or (vii) engaged in conduct that adversely affected the Company. The Delegate shall have the power and authority to suspend all or any portion of the Stock Award if the Delegate makes in good faith the determination described in the foregoing sentence. Any such suspension of a Stock Award shall remain in effect until the suspension shall be presented to and acted on by the Committee at its next meeting. This paragraph 3 shall have no application for a two year period following a Change of Control of the Company.

4. EMPLOYMENT REQUIREMENTS. Except as provided herein, you must remain employed by the Company or one of its Affiliates during the entire Restriction Period to retain the Stock Award. If your employment ceases for any reason (other than due to your death or Disability) during the Restriction Period, including, without limitation, due to your Retirement, you will forfeit the Stock Award as of the date your employment ceases unless the Committee determines otherwise. If your employment terminates due to your death or Disability during the Restriction Period, your Stock Award will vest and become free of restriction as of the date of your death or termination of employment due to your Disability.

5. EFFECT OF A CHANGE OF CONTROL. Your Stock Award will vest and become free of restrictions on the date a Change of Control of the Company occurs.

6. NONTRANSFERABILITY. During the Restriction Period, you may not assign or transfer the Stock Award nor any of your rights pertaining thereto by any means other than by will or the laws of descent and distribution.

7. VOTING AND DIVIDENDS. During the Restriction Period, you shall have the right to vote shares subject to the Stock Award and to receive any cash dividends or cash distributions that may be paid with respect thereto. In the event of a stock dividend, stock distribution, stock split, division of shares or other corporate structure change during the Restriction Period which results in the issuance of additional shares with respect to your Stock Award, such shares will be subject to the same restrictions as your Stock Award.

terms nor in any way affect the Company's or its Affiliates' right to terminate your employment without prior notice at any time for any reason or for no reason.

9. COMPLIANCE WITH LAWS AND REGULATIONS. The Stock Award and the obligation of the Company to deliver the shares subject to the Stock Award are subject to compliance with all applicable laws, rules and regulations, to receipt of any approvals by any government or regulatory agency as may be required, and to any determinations the Company may make regarding the application of all such laws, rules and regulations.

10. BINDING NATURE OF PLAN. You agree to be bound by all terms and provisions of the Plan and related administrative rules and procedures, including terms and provisions and administrative rules and procedures adopted and/or modified after the granting of the Stock Award. In the event any provisions hereof are inconsistent with those of the Plan, the provisions of the Plan shall control. For purposes of all of your restricted stock awards granted under the Plan, you understand and agree that "Retirement" and any derivation of such term used in your restricted stock award agreements means a retirement that is approved by the Committee as required by Section 6(C) of the Plan.

11. NOTICES. Any notice to the Company under this Agreement shall be in writing to the following address or facsimile number: Human Resources - Executive Compensation, Comerica Incorporated, 500 Woodward Ave., MC 3122, Detroit, MI 48226; Facsimile Number: 313-964-3153. The Company will address any notice to you to your current address according to the Company's personnel files. All written notices provided in accordance with this paragraph shall be deemed to be given when (a) delivered to the appropriate address(es) by hand or by a nationally recognized overnight courier service (costs prepaid); (b) sent by facsimile to the appropriate facsimile number, with confirmation by telephone of transmission receipt; or (c) received by the addressee, if sent by U.S. mail to the appropriate address or by Company inter-office mail to the appropriate mail code. Either party may designate in writing some other address or facsimile number for notice under this Agreement.

12. FORCE AND EFFECT. The various provisions of this Agreement are severable in their entirety. Any judicial or legal determination of invalidity or unenforceability of any one provision shall have no effect on the continuing force and effect of the remaining provisions.

13. SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of the successors of the respective parties.

IN WITNESS WHEREOF, Comerica Incorporated has caused this Agreement to be executed by an appropriate officer and you (the Stock Award recipient) have executed this Agreement, both as of the day and year first above written.

COMERICA INCORPORATED

By:________________________

Name:
Title:

______________________         _______________________      __________________
Recipient's Signature          Print Name                   Social Security No.

EXHIBIT 10.3

COMERICA INCORPORATED
RESTRICTED STOCK AWARD AGREEMENT

THIS AGREEMENT (the "Agreement") between Comerica Incorporated (the "Company") and __________ ("you") is effective as of _______________, 2___. Any undefined terms appearing herein as defined terms shall have the same meaning as they do in the Amended and Restated Comerica Incorporated 1997 Long-Term Incentive Plan (the "Plan"). The Company will provide a copy of the Plan to you upon your request.

WITNESSETH:

1. AWARD OF STOCK. Pursuant to the provisions of the Plan, the Company hereby awards you, subject to the terms and conditions of the Plan (incorporated herein by reference), and subject further to the terms and conditions in this Agreement __________ shares of $5.00 par value common stock of the Company (the "Stock Award").

2. VESTING OF STOCK AWARD. The unvested portion of your Stock Award is subject to forfeiture. Subject to the terms of the Plan and this Agreement, including without limitation, your fulfillment of the employment requirements in paragraph 4 below, your Stock Award will vest and become free of restrictions in accordance with the following schedule (except in the case of your earlier death or Disability or an earlier Change of Control of the Company):

                                                       Percentage of Stock
                                                       Award That Will Vest
                     Date                        and Become Free of Restrictions
                     ----                        -------------------------------
On ________[generally 3 years from grant date]                ___%
On ________[generally 4 years from grant date]                ___%
On ________[generally 5 years from grant date]                ___%

As soon as administratively feasible after the vesting of any portion of your Stock Award and your payment of any applicable taxes, the Company will deliver to you (or to your designated beneficiary if you are not then living) evidence of your ownership (by book entry or certificate), of the shares subject to the Stock Award that have vested and for which you have paid any applicable taxes. You will have a taxable event on the date that each tranche of your Stock Award vests.

4. EMPLOYMENT REQUIREMENTS. Except as provided herein, you must remain employed by the Company or one of its Affiliates until your Stock Award (or portion thereof) has vested to retain the Stock Award (or portion thereof, as the case may be). If your employment ceases for any reason (other than due to your death or Disability) before your entire Stock Award has fully vested, including, without limitation, due to your Retirement, you will forfeit that portion of the Stock Award that has not vested as of the date your employment ceases unless the Committee determines otherwise. If your employment terminates due to your death or Disability prior to your Stock Award fully vesting, the unvested portion of your Stock Award will vest as of the date of your death or termination of employment due to your Disability.

5. EFFECT OF A CHANGE OF CONTROL. Your Stock Award will vest and become free of restrictions on the date a Change of Control of the Company occurs.

6. NONTRANSFERABILITY. Until it has vested, you may not assign or transfer any portion the Stock Award nor any of your rights pertaining thereto by any means other than by will or the laws of descent and distribution.

7. VOTING AND DIVIDENDS. You shall have the right to vote shares comprising any portion of the Stock Award that has not vested and to receive any cash dividends or cash distributions that may be paid with respect

thereto. In the event of a stock dividend, stock distribution, stock split, division of shares or other corporate structure change which results in the issuance of additional shares with respect to any unvested share of your Stock Award, such additional shares will be subject to the same restrictions as is such unvested share of your Stock Award.

8. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in the Plan or this Agreement shall confer on you any right to continue in the employment of the Company or its Affiliates for any given period or on any specified terms nor in any way affect the Company's or its Affiliates' right to terminate your employment without prior notice at any time for any reason or for no reason.

13. SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of the successors of the respective parties.

COMERICA INCORPORATED

By:________________________

Name:
Title:

______________________         _______________________      __________________
Recipient's Signature          Print Name                   Social Security No.

EXHIBIT 10.4

COMERICA INCORPORATED
NON-QUALIFIED STOCK OPTION AGREEMENT

THIS AGREEMENT, dated as of __________, 2___ is between Comerica Incorporated (the "Company") and __________ (the "Optionee"). Unless otherwise defined herein, capitalized terms used herein which are defined in the Amended and Restated Comerica Incorporated 1997 Long-Term Incentive Plan (the "Plan") have the same respective meanings as are set forth in the Plan. A copy of the Plan will be provided to the Optionee upon request.

WITNESSETH:

1. GRANT OF OPTION. Pursuant to the provisions of the Plan, the Company hereby awards the Optionee, subject to the terms and conditions of the Plan (incorporated herein by reference), and subject further to the terms and conditions in this Agreement, the right and option to purchase from the Company, all or any part of an aggregate of __________ shares (the "Shares") of common stock ($5.00 par value per Share) of the Company ("Common Stock") at the purchase price of $_____ per Share (the "Option").

2. EXPIRATION DATE. The Option shall expire on _________, unless it expires or is canceled earlier in accordance with the provisions of the Plan.

3. EXERCISE OF OPTION. This Option is exercisable in the following manner:

                                                                                                Maximum Percentage of Shares
                Date                                                                               Available for Exercise
                ----                                                                            ----------------------------
On or after______________________ [generally 1 year from January of grant year]                              25%
On or after______________________ [generally 2 years from January of grant year]                             50%
On or after______________________ [generally 3 years from January of grant year]                             75%
On or after______________________ [generally 4 years from January of grant year]                            100%

In the event of the Optionee's termination of employment for any reason
(including, without limitation, by reason of the Optionee's death or Disability)
other than Retirement, prior to the date the Optionee's Option is 100% vested, the Optionee's Option shall be exercisable, to the extent vested at the date of the Optionee's termination, for the period specified in Section 6(A)(4) of the Plan. In the event of the Optionee's termination due to Retirement, this Option will be canceled if it was granted in the year of Retirement; if it was not granted in the year of Retirement, it will continue to vest and be exercisable as specified in Section 6(A)(4)(a) of the Plan. Notwithstanding the foregoing, the Optionee's Option shall be 100% fully and immediately exercisable upon the occurrence of a Change of Control of the Company.

Any exercise shall be initiated by written notice to the Compensation Department of the Company specifying the number of Shares being exercised and the year of grant, and shall be accompanied by payment of the aggregate purchase price for such Shares. Optionee shall be subject to applicable tax withholding required in connection with any Option exercise.

4. CANCELLATION OF OPTION. The Committee has the right to cancel all or any portion of the Option granted herein in accordance with Section 4 of the Plan if the Committee determines in good faith that the Optionee has done any of the following: (i) committed a felony; (ii) committed fraud; (iii) embezzled; (iv) disclosed confidential information or trade secrets; (v) were terminated for cause; (vi) engaged in any activity in competition with the business of the Company or any subsidiary or affiliate of the Company; or (vii) engaged in conduct that adversely affected the Company. The Delegate shall have the power and authority to suspend all or any portion of the Option granted herein if the Delegate makes in good faith the determination described in the foregoing sentence. Any such suspension of an Option shall remain in effect until the suspension shall be presented to and acted on by the Committee at its next meeting. This paragraph 4 shall have no application for a two year period following a Change of Control of the Company.

5. COMPLIANCE WITH LAWS AND REGULATIONS. This Option and the obligation of the Company to sell and deliver the Shares hereunder shall be subject to all applicable laws, rules and regulations, and to such approvals by any government or regulatory agency as may be required.

6. OPTIONEE BOUND BY PLAN. Optionee agrees to be bound by all terms and provisions of this Agreement and of the Plan, including terms and provisions adopted after the granting of this Option but prior to the complete exercise of the Option. In the event any provisions hereof are inconsistent with those of the Plan, the provisions of the Plan shall control.

7. NOTICES. Any notice to the Company under this Agreement shall be in writing to the following address or facsimile number: Human Resources - Compensation, Comerica Incorporated, 500 Woodward Ave., MC 3122, Detroit, MI 48226; Facsimile Number: 313-964-3153. The Company will address any notice to the Optionee to the Optionee's current address according to the Company's personnel files. All written notices provided in accordance with this paragraph shall be deemed to be given when (a) delivered to the appropriate address(es) by hand or by a nationally recognized overnight courier service (costs prepaid); (b) sent by facsimile to the appropriate facsimile number(s), with confirmation by telephone of transmission receipt; or (c) received by the addressee(s), if sent by U.S. mail to the appropriate address or by Company inter-office mail to the appropriate mail code. Either party may designate in writing some other address or facsimile number for notice under this Agreement.

8. NONTRANSFERABILITY. This Option shall not be transferable other than by will or by the laws of descent and distribution, and during the lifetime of the Optionee shall be exercisable only by the Optionee, or by the Optionee's guardian or legal representative.

9. FORCE AND EFFECT. The various provisions of this Agreement are severable in their entirety. Any judicial or legal determination of invalidity or unenforceability of any one provision shall have no effect on the continuing force and effect of the remaining provisions.

10. SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of the successors of the respective parties.

11. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in the Plan or this Agreement shall confer on an employee any right to continue in the employment of the Company or its Affiliates or in any way affect the Company's or its Affiliates' right to terminate the employee's employment without prior notice at any time for any reason or for no reason.

IN WITNESS WHEREOF, Comerica Incorporated has caused this Agreement to be executed by an appropriate officer and the Optionee has executed this Agreement, both as of the day and year first above written.

COMERICA INCORPORATED

By:________________________

Name:
Title:

_____________________         _______________________      ___________________
Recipient's Signature         Print Name                   Social Security No.

EXHIBIT 10.5

COMERICA INCORPORATED
NO SALE AGREEMENT

THIS AGREEMENT (the "Agreement") between Comerica Incorporated (the "Company") and __________ (the "Award Recipient") is effective as of ________, 2___. Any undefined terms appearing herein as defined terms shall have the same meaning as they do in the Amended and Restated Comerica Incorporated Management Incentive Plan (the "Plan"). The Company will provide a copy of the Plan to the Award Recipient upon request.

1. SHARES. This Agreement applies to __________ shares of Company common stock, par value $5.00 per share (the "Shares"), earned by the Award Recipient in connection with that portion of a three-year Incentive Payment under the Plan for the ____-____ Performance Period that is automatically invested in shares of Company common stock.

2. RESTRICTIONS ON TRANSFER OF SHARES. Subject to Section 4 below, the Shares will not be transferable during the period beginning on the date of grant and ending upon the termination for any reason (including death, disability, retirement, voluntary resignation or involuntary termination, whether or not for "cause") of the Award Recipient's employment with the Company or any of its Affiliates (the "No Sale Period"). The Shares will become immediately transferable at the end of the No Sale Period. As soon as practical after termination of the Award Recipient's employment or a Change of Control of the Company, the Company will terminate the no sale restriction and, if the Award Recipient so requests (or, if the Award Recipient is not then living and if his or her designated beneficiary so requests), the Company will, at its option, either: (a) deliver to the Award Recipient (or, if the Award Recipient is not then living, to his or her designated beneficiary) a certificate that does not contain any restrictive legends, evidencing his or her ownership of the Shares (free of restrictions on transfer); or (b) make a book entry of such Shares evidencing his or her ownership of the Shares free of restrictions on transfer.

3. NONTRANSFERABILITY. The Award Recipient may not sell, assign, transfer, pledge or otherwise encumber the Shares, nor any of his or her rights pertaining thereto, during the No Sale Period, other than by will or the laws of intestacy.

4. EFFECT OF A CHANGE OF CONTROL. The No Sale Period will lapse as of the date that a Change of Control, as defined in Section 6 of the Plan, occurs.

5. COMPLIANCE WITH LAWS AND REGULATIONS. The obligation of the Company to deliver the Shares covered by this Agreement is subject to all applicable federal and state laws, rules and regulations, to any approvals by any government or regulatory agency as may be required, and to any determinations the Company may make regarding the application of all such laws, rules and regulations.

6. REINVESTMENT OF DIVIDENDS. During the No Sale Period, the Company will reinvest cash dividends paid with respect to the Shares in additional shares of common stock of the Company, and shares received pursuant to such reinvestment will be subject to the same restrictions as the Shares. In addition, in the event of a stock dividend, stock distribution, stock split, division of shares or other corporate structure change which results in the issuance of additional shares with respect to the Shares, such additional shares will be subject to the same restrictions as the Shares.

7. BINDING NATURE OF THE PLAN. The Award Recipient agrees to be bound by all terms and provisions of the Plan and related administrative rules and procedures, including terms and

provisions and administrative rules and procedures adopted and/or modified after the date of this Agreement. In the event any provisions hereof are inconsistent with those of the Plan, the provisions of the Plan shall control.

8. NOTICES. Any notice to the Company under this Agreement shall be in writing to the following address: Human Resources - Executive Compensation, Comerica Incorporated, 500 Woodward Ave., MC 3122, Detroit, MI 48226. The Company will address any notice to the Award Recipient to the Award Recipient's current address according to the Company's personnel files. All written notices provided in accordance with this paragraph shall be deemed to be given when (a) delivered to the appropriate address by hand or by a nationally recognized overnight courier service (costs prepaid); or (b) received by the addressee, if sent by U.S. mail to the appropriate address or by Company inter-office mail to the appropriate mail code. Either party may designate in writing some other address for notice under this Agreement.

10. SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of the successors of the respective parties.

11. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in the Plan or this Agreement shall confer on the Award Recipient any right to continue in the employment of the Company for any given period or on any specified terms, nor in any way affect the Company's right to terminate the Award Recipient's employment without prior notice at any time for any reason or for no reason.

IN WITNESS WHEREOF, Comerica Incorporated has caused this Agreement to be executed by an appropriate officer and the Award Recipient has executed this Agreement, both as of the day and year first above written.

COMERICA INCORPORATED

By:________________________
Name:
Title:

Award Recipient

EXHIBIT 10.6

Original Plan approved by the Compensation Committee on 11/15/96

This Amended and Restated Plan approved and ratified by the Compensation Committee on 3/22/04

This Amended and Restated Plan approved and ratified by the Board of Directors on 3/23/04

This Amended and Restated Plan approved and ratified by the Stockholders on 5/18/04

COMERICA INCORPORATED

AMENDED AND RESTATED

EMPLOYEE STOCK PURCHASE

PLAN

COMERICA INCORPORATED
AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN

TABLE OF CONTENTS

SECTION I - PURPOSE.....................................................    1

SECTION II - DEFINITIONS................................................    1

SECTION III - INTRODUCTION..............................................    4

SECTION IV - PARTICIPATION..............................................    5

SECTION V - CONTRIBUTIONS...............................................    6

SECTION VI - ACQUISITION OF CORPORATION SHARES..........................    9

SECTION VII - RIGHTS WITH RESPECT TO SHARES HELD IN PLAN................    9

SECTION VIII - WITHDRAWALS FROM PLAN....................................    9

SECTION IX - MISCELLANEOUS PROVISIONS...................................   10

SECTION X - EFFECTIVE DATE OF PLAN......................................   12

SECTION I - PURPOSE

The Board of Directors of Comerica Incorporated (the "Corporation") believes that the interests of the Corporation are served through share ownership of the Corporation by its employees. Such ownership strengthens the sense of identity between the Corporation and its employees and furthers a unity of purpose among the Corporation, its employees and its stockholders. It is the purpose of this Comerica Incorporated Amended and Restated Employee Stock Purchase Plan to provide a convenient means through which employees of the Corporation and its subsidiaries and affiliates may acquire shares in the Corporation.

SECTION II - DEFINITIONS

Whenever used in the Plan, the following terms shall have the meanings set forth below.

A. "Account" means an account established for each Participant under the Plan to hold Corporation Shares acquired for the Participant's account with Payroll Withholding Contributions, Other Permitted Contributions, Service Award Contributions, Matching Contributions, Share Retention Contributions and/or Reinvested Cash Dividends.

B. "Beneficiary(ies)" means the individual(s) to whom the balance of the Participant's Account is to be distributed in the event assets remain in such Account at the time of the Participant's death, or by whom any rights of the Participant, after the Participant's death, may be exercised.

C. "Beneficiary Designation Form" means the form used to designate the Participant's Beneficiary(ies), as such form may be modified by the Committee or the Plan Administrator from time to time.

D. "Bi-Weekly Base Pay" means the gross amount of cash compensation a Participant receives during each bi-weekly pay period, including, without limitation, base pay, incentive compensation paid through the Management Incentive Plan, or through a specific business unit incentive plan, referral awards, ROAR payments, overtime, shift differential and commissions, lump sum merit bonuses (effective as of January 22, 1999) and/or such other payments as the Committee or the Plan Administrator may determine appropriate from time to time for such purposes. Bi-Weekly Base Pay shall not include any amount which is deferred under the Deferred Compensation Plan(s).

E. "Board" means the Board of Directors of Comerica Incorporated.

F. "Code" means the Internal Revenue Code of 1986, as amended. All references to sections of the Code shall be deemed to refer to any successor provisions to such sections.

G. "Committee" means the committee appointed by the Board to administer the Plan as provided herein. Unless otherwise determined by the Board, the Compensation Committee of the Board shall be the Committee.

H. "Corporation" means Comerica Incorporated, a Delaware corporation. For purposes of Plan provisions relating to eligibility to participate or receive or make contributions, it shall also include subsidiaries and affiliates of the Corporation.

I. "Corporation Shares" means shares of $5.00 par value common stock of the Corporation.

J. "Custodian Bank" means Comerica Bank, a Michigan banking corporation, or such other institution as may be appointed by the Corporation to hold Corporation Shares in Accounts of Participants under the Plan.

K. "Deferred Compensation Plan(s)" means the 1999 Comerica Incorporated Deferred Compensation Plan, together with any and all amendments, restatements and/or modifications thereof, and/or the 1999 Comerica Incorporated Amended and Restated Common Stock Deferred Incentive Award Plan, together with any and all amendments, restatements and/or modifications thereof, or any plan adopted by the Corporation as a successor to the foregoing.

L. "Disability" has the meaning set forth in Section V(D) hereof.

M. "Employee" means an individual who renders service to the Corporation or one of its subsidiaries or affiliates as a common law employee or officer.

N. "Exchange Act" means the Securities Exchange Act of 1934, as amended.

O. "Management Incentive Plan" means the Amended and Restated Comerica Incorporated Management Incentive Plan, together with any and all amendments, restatements and/or modifications thereof, or any plan adopted by the Corporation as a successor to the foregoing.

P. "Matching Contribution" means, subject to the limitations of Section V(C) hereof, a contribution by the Corporation, the gross amount of which shall equal 15% of the aggregate amount of Payroll Withholding Contributions, Service Award Contributions and/or Other Permitted Contributions made during the previous

quarter. The Matching Contribution, net of all applicable withholding and deductions, shall be used to purchase Corporation Shares.

Q. "Other Permitted Contribution" means a non-periodic contribution of a Participant to the Plan pursuant to guidelines approved by the Committee or the Plan Administrator from time to time.

R. "Participant" means an Employee or former Employee who has an Account under the Plan.

S. "Payroll Withholding Contribution" means a contribution of a Participant under the Plan equal to the percentage of the Participant's gross Bi-Weekly Base Pay such Participant has elected to contribute to the Plan; provided, however, that in the event the Participant's pay, less all applicable withholding and deductions, is less than the amount of his or her elected contribution, the contribution shall be reduced so as not to exceed 100% of the Participant's net pay. Payroll Withholding Contributions shall be withheld by the Corporation and forwarded to the Custodian Bank, which shall utilize such contributions to purchase Corporation Shares for allocation to the Employee's Account in accordance with the provisions of the Plan.

T. "Plan" means the Comerica Incorporated Amended and Restated Employee Stock Purchase Plan, as set forth herein and as hereinafter amended and/or restated from time to time.

U. "Plan Administrator" means, unless determined otherwise by the Board or the Committee, the Director of Corporate Human Resources (or, if no individual is the Director of Corporate Human Resources, then the designated acting Director of Corporate Human Resources).

V. "Plan Year" means the fiscal year on which the records of the Plan are kept, which shall be the calendar year; provided, however, that the first Plan Year shall be the period commencing April 1, 1997 and ending December 31, 1997.

W. "Reinvested Cash Dividends" means cash dividends paid on Corporation Shares allocated to a Participant's Account which are utilized to purchase additional Corporation Shares for such Participant's Account.

X. "Retirement" has the meaning set forth in Section V(D) hereof.

Y. "Section 16 Insider" means any Participant who is designated by the Corporation as a reporting person under Section 16 of the Exchange Act.

Z. "Service Award" means a discretionary award, in the form of a Service Award Contribution, made by the Corporation in recognition of an Employee's service to the Corporation.

AA. "Service Award Contribution" means a discretionary contribution by the Corporation to be allocated to a Participant's Account in recognition of an Employee's service to the Corporation. The Service Award Contribution, net of any applicable withholding and deductions, shall be used to purchase Corporation Shares.

BB. "Share Retention Contribution" means, subject to fulfillment of the requirements in Section V(D) hereof, a contribution by the Corporation to be allocated to a Participant's Account in a Plan Year equal to 5% of the amount of Payroll Withholding Contributions, Service Award Contributions and/or Other Permitted Contributions made to such Participant's Account in the first of the two immediately preceding Plan Years as set forth in Section V(D). Share Retention Contributions shall be utilized to purchase additional Corporation Shares for the Participant's Account.

CC. "Two-Plan-Year-Period" means the two Plan Years immediately preceding the Plan Year in which a Share Retention Contribution is made.

SECTION III - INTRODUCTION

A. Administration. The Plan shall be administered by the Committee; provided, however, that the Board shall have the authority to exercise any and all duties and responsibilities assigned to the Committee under the Plan. The Committee may delegate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it, including, without limitation, the Plan Administrator. In addition, unless determined otherwise by the Board or Committee, the Plan Administrator shall handle the day-to-day administration of the Plan. The Plan Administrator may employ accountants, legal counsel and any other experts he or she deems advisable to assist in the administration of the Plan.

B. Corporation Shares. The aggregate number of Corporation Shares which may be purchased, or awarded as Service Award Contributions, under the Plan shall not exceed 5,000,000.

C. Adjustments. In the event the number of outstanding Corporation Shares changes as a result of any stock split, stock dividend, recapitalization, merger, consolidation, reorganization, combination, or exchange of shares, split-up, split-off, spin-off, liquidation or other similar change in capitalization, or any distribution made to holders of Corporation Shares other than cash dividends, the number of Corporation

Shares that may be purchased, or awarded as Service Award Contributions, under the Plan shall be automatically adjusted, and the Committee shall be authorized to make such other equitable adjustments as it deems necessary so that the value of the interest of the Participants shall not be decreased by reason of the occurrence of such event. Any such adjustment shall be deemed conclusive and binding on the Corporation, each Participant, his or her Beneficiaries and all other interested parties.

D. Supplements. From time to time, supplements may be attached by amendment to and form a part of this Plan and shall be given the same effect that such provision would have if it was incorporated within the basic text of the Plan. Such supplements may modify or supplement the provisions of the Plan as they apply to particular groups of Employees or groups of Participants, shall specify the persons affected by such supplements and shall supersede the other provisions of the Plan to the extent necessary to eliminate inconsistencies between the Plan provisions and the provisions of such supplements.

E. Non-Resident Aliens. With respect to non-resident alien Employees, the Committee or Plan Administrator may adopt one or more sets of procedures and provisions, which may be different than those included in this Plan for other Participants, with each set of procedures and provisions applying to some or all of such non-resident alien Employees, as determined by the Committee in its sole discretion or the Plan Administrator in his or her sole discretion, in order to comply with the applicable laws of the respective jurisdiction(s) in which such non-resident alien Employees live or work and/or to take into account other legal, tax, accounting and similar issues arising by virtue of the participation of such non-resident alien Employees. The adoption of any such procedures and provisions shall not be deemed an amendment to this Plan.

F. Applicable Law. To the extent not preempted by the laws of the United States, the laws of the State of Delaware shall be the controlling law in all matters relating to this Plan.

SECTION IV - PARTICIPATION

A. Eligibility. Any person who is or becomes an Employee may commence participation in the Plan as soon as administratively feasible on or subsequent to such individual's date of hire; provided, however, that for purposes of the Plan, the Committee or the Plan Administrator may exclude from eligibility non-resident aliens (or classes of non-resident aliens), if any, if the requirements of local law, rules or regulations, including without limitation, the tax, labor, accounting or securities laws, rules, regulations or consequences, make participation by such non-resident aliens (or class(es) of non-resident aliens) impractical, as determined by the Committee in its sole discretion or the Plan Administrator in his or her sole discretion.

B. Enrollment. Enrollment in the Plan shall be accomplished by such procedures as are established by the Committee or the Plan Administrator from time to time. Unless determined otherwise by the Committee or the Plan Administrator, Payroll Withholding Contributions will commence as of the first pay period which begins not less than ten days following a Participant's communication of instructions to commence such contributions. Other Permitted Contributions will be made as soon as is administratively feasible, as determined by the Committee or the Plan Administrator, following the Corporation's receipt of instructions to commence such contributions.

C. Election Changes. A Participant may increase, decrease, cease or resume the amount of his or her Payroll Withholding Contributions by communicating further instructions pursuant to such procedures as are established by the Committee or the Plan Administrator from time to time. Election changes shall become effective as soon as administratively feasible after instructions have been properly communicated. There shall be no limitation on the number of election changes a Participant may make. A discontinuance of contributions in and of itself shall not constitute a withdrawal from the Plan.

SECTION V - CONTRIBUTIONS

A. Payroll Withholding Contributions. Any Payroll Withholding Contribution shall equal at least 0.5% but not exceed 100% of a Participant's Bi-Weekly Base Pay, net of all other applicable withholding and deductions. The Corporation shall remit these contributions to the Custodian Bank promptly.

B. Other Permitted Contributions. A Participant may make Other Permitted Contributions in a single sum at such time or times permitted by the Committee or the Plan Administrator.

C. Matching Contributions. The Corporation shall make a Matching Contribution equal to 15% of the Payroll Withholding Contributions, Service Award Contributions and/or Other Permitted Contributions made by, or on behalf of, each Participant during any calendar quarter, provided there have been no withdrawals from the Participant's Account during such quarter. Matching Contributions will not be made with respect to Share Retention Contributions. In addition, Matching Contributions will not be made with respect to Payroll Withholding Contributions, Service Award Contributions and/or Other Permitted Contributions made during any Plan Year to the extent such contributions exceed $25,000 in the aggregate. Matching Contributions will be made at or after the end of each calendar quarter and shall be net of all applicable withholding and deductions. A Participant shall be eligible to receive a Matching Contribution with respect to a calendar quarter if there have been no withdrawals during such quarter, even if the Participant's employment terminated during such quarter for any reason.

D. Share Retention Contributions. Subject to the conditions and limitations of this Section V(D), the Corporation shall allocate Share Retention Contributions to the Accounts of those Participants who qualify therefor. Subject to the conditions and limitations of this Section V(D), a Participant shall qualify for a Share Retention Contribution in a Plan Year if the Participant is employed on the last day of the relevant Two-Plan-Year-Period, and if, during such Two-Plan-Year-Period, there has not been a withdrawal of any of the following:

i. Payroll Withholding Contributions, Service Award Contributions or Other Permitted Contributions made during such period;

ii. Matching Contributions made during such period;

iii. Corporation Shares purchased with any contributions referred to in to
Section V(D)(i) or (ii); or

iv. Corporation Shares purchased with dividends paid with respect to any shares referred to in Section V(D)(iii).

Share Retention Contributions will not be made with respect to Matching Contributions. In addition, Share Retention Contributions will not be made with respect to Payroll Withholding Contributions, Service Award Contributions and/or Other Permitted Contributions made during any Plan Year to the extent such contributions exceed $25,000 in the aggregate. Share Retention Contributions shall be made as soon as reasonably practicable after the first day of the Plan Year following a Two-Plan-Year-Period and shall be net of all applicable withholding and deductions.

Notwithstanding anything in this Section V(D) to the contrary, a Participant whose employment terminates by reason of Retirement, death or Disability prior to the end of a Two-Plan-Year-Period shall be eligible to receive a Share Retention Contribution with respect to such partial Two-Plan-Year-Period (consisting of the Plan Year during which the Participant's employment so terminates and the immediately preceding Plan Year) if and only if there have been no withdrawals during such period (prior to termination of employment). The Share Retention Contribution made on behalf of any such eligible terminated Participant with respect to such period shall be prorated based on the number of days during the final Plan Year that the Participant was employed.

For purposes of this Section V(D), a Participant's employment shall be considered to have terminated by reason of Retirement if he or she terminates employment with eligibility for, and elects to commence receipt of, an early or normal retirement benefit under a tax-qualified defined benefit retirement plan maintained by the Corporation, and a Participant's employment shall be considered to have terminated by reason of Disability if he or she terminates employment with eligibility for,

and is awarded, disability benefits under a long-term disability plan maintained by the Corporation.(1)

E. Service Award Contributions. The Corporation may make Service Award Contributions to the Accounts of those Employees whom it wishes to recognize for service to the Corporation. Service Award Contributions are made at the discretion of the Corporation. All Corporation Service Awards related to Corporation Shares shall be made under this Plan through such Service Award Contributions.

F. Assignment of Rights Under the Plan. Unless otherwise determined by the Committee, a Participant's Account shall not be transferable by a Participant otherwise than by will or by the laws of intestacy; provided, however, that, a Participant may, in accordance with Section IX(A) and in the manner established by the Committee, designate one or more Beneficiaries to exercise the rights of the Participant and to receive any property payable or distributable with respect to such Participant's Account upon the death of the Participant. Except as otherwise set forth in the Plan, during the Participant's lifetime, only the Participant (or, if permissible under applicable law, the Participant's guardian or legal representative) may make elections or withdrawals with respect to such Participant's Account. Unless otherwise determined by the Committee, a Participant's Account, or rights with respect to such Account, may not be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Corporation or any of its subsidiaries or affiliates.

(1) Please note that determination of disability and award of disability benefits may occur retroactively long after the Participant's employment termination date and after the date that Share Retention Contribution determinations were otherwise made for the relevant Plan Year.

SECTION VI - ACQUISITION OF CORPORATION SHARES

A. Application of Current Contributions. As soon as reasonably practicable following its receipt of Payroll Withholding Contributions, Other Permitted Contributions, Service Award Contributions, Matching Contributions and/or Share Retention Contributions, the Custodian Bank shall purchase the maximum number of Corporation Shares that the funds allocated to each Participant's Account may purchase at the then-prevailing market prices. Such purchases may be in the open market or directly from the Corporation. Corporation Shares so acquired shall be allocated to the relevant Participant's Account.

B. Reinvested Cash Dividends. Any cash dividends paid on Corporation Shares allocated to any Participant's Account shall be utilized by the Custodian Bank to purchase additional Corporation Shares at prices and in the manner specified above.

C. Book Entry. Unless otherwise determined by the Committee or the Plan Administrator, Corporation Shares held under the Plan shall be held in book entry form, and the Custodian Bank or its nominee shall be identified as the owner thereof while such Corporation Shares remain in the Plan.

SECTION VII - RIGHTS WITH RESPECT TO SHARES HELD IN PLAN

All rights accruing to an owner of record of Corporation Shares shall belong to and be vested in the Participant for whose Account such Corporation Shares are being held by the Custodian Bank, including, without limitation, the right to receive all dividends payable in respect of such Corporation Shares, the right to receive all notices of stockholders' meetings, the right to vote and the right to tender or refrain from tendering such Corporation Shares in response to a tender offer.

SECTION VIII - WITHDRAWALS FROM PLAN

A. In-Service Withdrawals. A Participant may withdraw all or any portion of the balance of his or her Account from the Plan during the Participant's employment. Unless determined otherwise by the Committee or the Plan Administrator, if the value of the Participant's Account at the time the in-service withdrawal is requested is less than the value of ten Corporation Shares at such time, distribution will be made to the Participant in cash. Otherwise, the Participant may elect to receive a distribution in the form of cash or Corporation Shares. Any brokerage commissions incurred in connection with the sale of Corporation Shares to facilitate a distribution shall be charged to the Participant's Account. A Participant shall not be entitled to receive a Matching Contribution with respect to any Payroll Withholding Contributions, Service Award Contributions and/or Other Permitted Contributions made during a calendar quarter if the Participant has made an in-service withdrawal during such quarter.

B. Termination Withdrawals. A Participant or his or her Beneficiary(ies) must submit an application to withdraw the balance of his or her account not later than ninety days after the Participant's employment terminates due to death, Disability, Retirement, voluntary resignation, involuntary dismissal or any other reason, or within ninety days after the Participant or his or her legal representative receives notice that the Plan has terminated. A withdrawal application will be provided to the Participant or Beneficiary(ies) upon the occurrence of any of the aforementioned circumstances. The application must be returned to the Custodian Bank within ninety days of receipt. If the Custodian Bank does not receive a withdrawal application by the specified deadline, it will distribute the balance of the Participant's Account to the Participant or his or her legal representative in the form of whole Corporation Shares registered in the Participant's name; provided, however, that unless determined otherwise by the Committee or the Plan Administrator, if the value of the Participant's Account on the date of distribution is less than the value of ten Corporation Shares at such time, the distribution will be made in cash. If the Custodian Bank receives a withdrawal application by the specified deadline and the value of the Participant's Account at the time the termination withdrawal is requested is less than the value of ten Corporation Shares at such time, then unless determined otherwise by the Committee or the Plan Administrator, the distribution will be made in cash. Otherwise, the Participant or his or her Beneficiary(ies) may elect to receive a distribution in the form of cash or Corporation Shares.

C. Fractional Shares and Brokerage Commissions. In all cases, cash will be paid in lieu of fractional Corporation Shares. Any brokerage commissions incurred in connection with the sale of Corporation Shares to facilitate a distribution will be charged to the Participant's Account.

D. Special Rule Applicable To Section 16 Insiders. Except as otherwise determined by the Committee, a Section 16 Insider shall not be permitted to receive a cash distribution from the Plan, if, within the previous six months, he or she (or any other person whose transactions are attributed to the Section 16 Insider under Section 16 of the Exchange Act) either (i) acquired Corporation Shares in the open market or pursuant to a private transaction; or (ii) made an election under the Plan (or under any other Plan sponsored by the Corporation) that resulted in an acquisition of equity securities of the Corporation within the meaning of that term under Section 16 of the Exchange Act. The Committee or Plan Administrator may make such other rules as are necessary to comply with
Section 16 of the Exchange Act, as amended from time to time.

SECTION IX - MISCELLANEOUS PROVISIONS

A. Designation of Beneficiary. Upon becoming a Participant of the Plan, each Participant shall submit to Comerica Incorporated, Human Resources - Compensation, 411 West Lafayette, MC 3122, Detroit, MI 48226 (or to such other unit

or person as designated by the Committee from time to time) a Beneficiary Designation Form designating one or more Beneficiaries to whom the balance of the Participant's Account is to be distributed in the event assets remain in such Account at the time of the Participant's death, or by whom any rights of the Participant, after the Participant's death, may be exercised. A Beneficiary Designation Form will be effective only if it is signed by the Participant and submitted before the Participant's death. Any subsequent Beneficiary Designation Form properly submitted will supersede any previous Beneficiary Designation Form so submitted. If a Participant designates a spouse as a Beneficiary, such designation shall automatically terminate and be of no effect following the divorce of the Participant and such individual, unless ratified in writing post-divorce.

If the primary Beneficiary shall predecease the Participant or the primary Beneficiary and the Participant die in a common disaster under such circumstances that it is impossible to determine who survived the other, the balance of the Participant's Account shall be distributed to the alternate Beneficiary(ies) who survive(s) the Participant in accordance with this Plan. If there are no alternate Beneficiaries living or in existence at the date of the Participant's death, or if the Participant has not submitted a valid Beneficiary Designation Form to the Corporation, the balance of the Participant's Account shall be distributed in accordance with the terms of the Plan to the legal representative for the benefit of the Participant's estate.

The Corporation reserves the right to distribute the balance of a Participant's Account to his or her estate notwithstanding the designation of a Beneficiary, if the Corporation is unable to locate the Beneficiary, a dispute arises among Beneficiaries or under any other circumstances the Corporation deems appropriate.

B. Withholding of Taxes. The Corporation shall withhold from any amounts payable to the Participant all Federal, state, city, or other taxes and/or other amounts as legally required by reason of Participant's participation in this Plan.

C. Expenses. All charges of the Custodian Bank, the cost of maintenance of the Accounts of Participants, the purchase of Corporation Shares, and the cost of transferring Corporation Shares to the Participants and Beneficiaries shall be borne by the Corporation; provided, however, that brokerage charges involved in the sale of Corporation Shares, if any, shall be charged to the relevant Participant's Account.

D. Compliance With Legal Requirements. The Corporation shall be bound by all applicable laws in operating this Plan and shall administer and interpret this Plan in accordance with legal requirements.

E. Amendment, Term and Termination. The Committee reserves the right to amend and/or restate the Plan at any time or to terminate the Plan. The Plan shall continue indefinitely until terminated by the Committee.

SECTION X - EFFECTIVE DATE OF PLAN

This Plan will be effective as of June 30, 2003, subject to approval by at least a majority of the outstanding shares of common stock of the Corporation present and having voting power at the meeting at which this Plan is put to a vote.

COMERICA INCORPORATED

By: /s/ James E. Lake
   ------------------
James E. Lake
Its: Senior Vice President and
Director of Human Resources

Comerica Bank, as Custodian Bank, hereby signifies the acceptance of its responsibilities contained herein.

COMERICA BANK AS CUSTODIAN BANK

By: /s/ Cheryl A. Derezinski
   -------------------------
Cheryl A. Derezinski
Its: Senior Vice President

.
.

EXHIBIT (11) - STATEMENT RE: COMPUTATION OF NET INCOME PER COMMON SHARE

COMPUTATION OF NET INCOME PER COMMON SHARE
Comerica Incorporated and Subsidiaries

                                                            Three Months Ended    Nine Months Ended
                                                               September 30,        September 30,
                                                            ------------------   ------------------
(in millions, except per share data)                        2004          2003    2004         2003
------------------------------------                        ----          ----    ----         ----
Basic:
   Net income applicable to common stock                    $ 196        $ 157   $ 550        $ 503
                                                            -----        -----   -----        -----
   Average common shares outstanding                          170          175     172          175
                                                            -----        -----   -----        -----
   Basic net income per common share                        $1.15        $0.90   $3.19        $2.88
                                                            =====        =====   =====        =====
Diluted:
   Net income applicable to common stock                    $ 196        $ 157   $ 550        $ 503
                                                            -----        -----   -----        -----
   Average common shares outstanding                          170          175     172          175
   Nonvested stock                                              1            -       1            -
   Common stock equivalent:
     Net effect of the assumed exercise of stock options        2            1       1            1
                                                            -----        -----   -----        -----
   Diluted average common shares                              173          176     174          176
                                                            -----        -----   -----        -----
   Diluted net income per common share                      $1.13        $0.89   $3.15        $2.86
                                                            =====        =====   =====        =====

Options to purchase an average 6.4 million and 9.1 million shares of common stock at exercise prices ranging from $59.24 - $71.58 and $48.92 - $71.58 were outstanding during the three months ended September 30, 2004 and 2003, respectively, and options to purchase an average 6.4 million and 9.2 million shares of common stock at exercise prices ranging from $56.19 - $71.58 and $44.91 - $71.58 were outstanding during the nine months ended September 30, 2004 and 2003, respectively, but were not included in the computation of diluted net income per common share because the options' exercise prices were greater than the average market price of common shares for the period.

EXHIBIT (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)

CERTIFICATION OF PERIODIC REPORT

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ralph W. Babb, Jr., Chairman, President and Chief Executive Officer of Comerica Incorporated (the "Registrant"), certify that:

1. I have reviewed this report on Form 10-Q of the Registrant for the quarterly period ended September 30, 2004;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date: November 5, 2004                      /s/ Ralph W. Babb, Jr.
                                            ----------------------
                                            Ralph W. Babb, Jr.
                                            Chairman, President and
                                            Chief Executive Officer

EXHIBIT (31.2) - 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)

CERTIFICATION OF PERIODIC REPORT

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Elizabeth S. Acton, Executive Vice President and Chief Financial Officer of Comerica Incorporated (the "Registrant"), certify that:

1. I have reviewed this report on Form 10-Q of the Registrant for the quarterly period ended September 30, 2004;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date:  November 5, 2004                     /s/ Elizabeth S. Acton
                                            ----------------------
                                            Elizabeth S. Acton
                                            Executive Vice President and
                                            Chief Financial Officer

EXHIBIT (32)-SECTION 1350 CERTIFICATION OF PERIODIC REPORT (PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

CERTIFICATION OF PERIODIC REPORT

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Ralph W. Babb, Jr., Chairman, President and Chief Executive Officer, and Elizabeth S. Acton, Executive Vice President and Chief Financial Officer, of Comerica Incorporated (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) The Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2004 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 5, 2004                     /s/ Ralph W. Babb, Jr.
                                            ----------------------
                                            Ralph W. Babb, Jr.
                                            Chairman, President and
                                            Chief Executive Officer

                                            /s/ Elizabeth S. Acton
                                            ----------------------
                                            Elizabeth S. Acton
                                            Executive Vice President and
                                            Chief Financial Officer


	COMERICA INCORPORATED (Registrant)
	/s/ Elizabeth S. Acton
	Elizabeth S. Acton
	Executive Vice President and Chief Financial Officer



	/s/ Marvin J. Elenbaas
	Marvin J. Elenbaas
	Senior Vice President and Controller (Principal Accounting Officer)