Company: CMA
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000028412-25-000108
Chunk: 425

Company: COMERICA INC
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 425
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$3,117 $39,126 

The Corporation sells and purchases interest rate caps and floors and enters into foreign exchange contracts, interest rate swaps and energy derivative contracts to accommodate the needs of customers requesting such services. Changes in the fair value of customer-initiated and other derivatives are recognized in earnings as they occur. To limit the market risk of these activities, the Corporation generally takes offsetting positions with dealers. The notional amounts of offsetting positions are included in the table above. Customer-initiated and other notional activity represented 56 percent and 55 percent of total interest rate, energy and foreign exchange contracts at December 31, 2024 and 2023, respectively.

Further information regarding customer-initiated and other derivative instruments is provided in Note 8 to the consolidated financial statements.

F-31

BSBY Cessation

The Bloomberg Index Services Limited (Bloomberg) discontinued publishing BSBY on November 15, 2024. As a result, 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. For each de-designated swap, settlement of interest payments and changes in fair value were recorded as risk management hedging losses within other noninterest income instead of net interest income until re-designation. All impacted swaps were re-designated as of April 1, 2024.

BSBY cessation positively impacted interest income on commercial loans by $7 million for the year ended December 31, 2024, compared to $3 million for the year ended December 31, 2023. Additionally, the Corporation recognized net losses of $39 million and $91 million in noninterest income for the year ended December 31, 2024 and 2023, respectively. Refer to Note 8 to the consolidated financial statements for further discussion of re-designated interest rate hedges.

The Corporation has substantially completed its BSBY transition efforts and effectively all BSBY-based contracts had transitioned to other reference rates as of December 31, 2024. Any BSBY-based contracts that did not transition to SOFR or other indices in 2024 are expected to either not reprice prior to maturing in 2025 or convert to SOFR or another index at their next repricing date.

Sources of Liquidity

The Corporation maintains a liquidity position that it believes will adequately satisfy its financial