Company: CMA
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0000028412-25-000197
Chunk: 178

Company: COMERICA INC
Filing Date: 2025-07-30
Form: 10-Q
Item: Part I, Item 8
Chunk 178
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 ContentsNotes to Consolidated Financial Statements (unaudited)Comerica Incorporated and Subsidiaries

Re-designated Interest Rate Swaps and Price Alignment IncomeOn November 15, 2023, the Bloomberg Index Services Limited (Bloomberg) announced that it would discontinue publishing the Bloomberg Short-Term Bank Yield Index (BSBY) on November 15, 2024; accordingly, the Corporation was required to “de-designate” $7.0 billion of interest rate swaps used in cash flow hedges of certain BSBY-indexed loans and reclassify amounts recognized in accumulated other comprehensive income into earnings. A total of $130 million in net losses were included in noninterest income as a result of the de-designations, consisting of $39 million during the first quarter of 2024 and $91 million during the fourth quarter of 2023. For each de-designated swap, settlement of interest payments and changes in fair value were recorded as risk management hedging losses within noninterest income instead of net interest income until re-designation. All impacted swaps were re-designated as of April 1, 2024. Amounts in accumulated other comprehensive income related to cash flows that continued to be probable of occurring were amortized out of accumulated other comprehensive income and into earnings, which resulted in no recorded pre-tax loss in interest and fees on loans for the three months ended June 30, 2025, compared to $52 million for the three months ended June 30, 2024. Additionally, the fair value of swaps at re-designation date were accreted back into accumulated other comprehensive income, resulting in benefits of $23 million for the three months ended June 30, 2025 and $49 million for the three months ended June 30, 2024. BSBY cessation and the related de-designation and re-designation of interest rate swaps led to a net decrease in accumulated other comprehensive income of $18 million for the three months ended June 30, 2025, compared to a net increase of $2 million for the three months ended June 30, 2024.For more information on accumulated net losses on cash flow hedges, refer to Note 10.Risk management hedging income (loss) also includes price alignment income, which is income received on payments made to a central clearing party for centrally cleared derivatives. Positions are settled daily based on derivative fair values and the party receiving net settlement amounts pays price alignment, based on an earning rate, to the party