Company: CMA
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000028412-25-000235
Chunk: 36

Company: COMERICA INC
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 2
Chunk 36
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 Industries prone to cyclical downturns and acquisitions with a high degree of integration risk are generally avoided. Other considerations include the sufficiency of collateral, the level of balance sheet leverage and the adequacy of financial covenants. During the underwriting process, cash flows are stress-tested to evaluate the borrowers' abilities to handle economic downturns and an increase in interest rates. 

The FDIC defines higher-risk commercial and industrial (HR C&I) loans for assessment purposes as loans generally with leverage of four times total debt to earnings before interest, taxes and depreciation (EBITDA) as well as three times senior debt to EBITDA, excluding certain collateralized loans. 

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The following tables summarize information about HR C&I loans, which represented 6% of total loans at both September 30, 2025 and December 31, 2024.

(in millions)September 30, 2025December 31, 2024Outstandings$3,045 $2,836 Criticized396 300 

There were no net charge-offs of leveraged loans during the three months ended September 30, 2025, compared to $6 million in net charge-offs for the three months ended June 30, 2025. Net charge-offs of leveraged loans for the nine months ended September 30, 2025 totaled $8 million, compared to $23 million for the nine months ended September 30, 2024.

Market and Liquidity Risk

Market risk represents the risk of loss due to adverse movement in prices, including interest rates, foreign exchange rates, commodity prices and equity prices. Liquidity risk represents the risk that the Corporation does not have sufficient access to funds to maintain its normal operations at all times or does not have the ability to raise or borrow funds at a reasonable cost at all times.

The Asset Liability Management Committee (ALCO) of the Corporation establishes and monitors compliance with the policies and risk limits pertaining to market and liquidity risk management activities. ALCO meets regularly to discuss and review market and liquidity risk management strategies and consists of executives and senior management from various areas of the Corporation, including treasury, finance, economics, lending, deposit gathering and risk management. Corporate Treasury helps mitigate market and liquidity risk under the direction of ALCO through the actions it takes to manage the Corporation's market, liquidity and capital positions.

The Corporation performs monthly liquidity stress testing to evaluate its ability to meet funding needs in hypothetical stressed environments. Such environments cover a series of scenarios, including