Company: CMA
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000028412-25-000108
Chunk: 7

Company: COMERICA INC
Filing Date: 2025-02-24
Form: 10-K
Item: Item 1
Chunk 7
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 related to debt securities classified as available-for-sale, cash flow hedges, and defined benefit postretirement plans from CET1 capital. Additional Tier 1 capital primarily includes any outstanding noncumulative perpetual preferred stock and related surplus. Tier 1 capital is equal to CET1 capital plus additional Tier 1 capital. Tier 2 capital primarily includes qualifying subordinated debt and qualifying allowance for credit losses. Total capital is the amount equal to Tier 1 capital plus Tier 2 capital. More information is set forth under the caption “Capital” in the Financial Section of this report.

Entities that engage in trading activities that exceed specified levels also are required to maintain capital to account for market risk. Market risk includes changes in the market value of trading account, foreign exchange, and commodity positions, whether resulting from broad market movements (such as changes in the general level of interest rates, equity prices, foreign exchange rates, or commodity prices) or from position specific factors. From time to time, Comerica’s trading activities may exceed specified regulatory levels, in which case Comerica adjusts its risk-weighted assets to account for market risk as required.

Bank holding companies and banks are currently required to maintain a CET1 capital ratio, Tier 1 capital ratio and total capital ratio equal to at least 4.5 percent, 6.0 percent and 8.0 percent of their total risk-weighted assets (including certain off-balance-sheet items, such as unused commitments and standby letters of credit), respectively. Comerica and its bank subsidiaries are also required to maintain a minimum capital conservation buffer of 2.5 percent in order to avoid restrictions on capital distributions and discretionary bonuses and to maintain a minimum “leverage ratio” (Tier 1 capital to non-risk-adjusted average total assets) of 4 percent.

To be well capitalized, banks are required to maintain a leverage ratio, CET1 capital ratio, Tier 1 capital ratio and total capital ratio equal to at least 5.0 percent, 6.5 percent, 8.0 percent and 10.0 percent, respectively. For purposes of the FRB’s Regulation Y, including determining whether a bank holding company meets the requirements to be a financial holding company, bank holding companies must maintain a Tier 1 capital ratio of at least 6.0 percent and a total capital ratio of at least 10.0 percent to be well capitalized. The FRB may require bank holding companies to maintain capital ratios substantially in excess of mandated minimum levels, depending upon general economic