Company: CMA
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000028412-25-000108
Chunk: 98

Company: COMERICA INC
Filing Date: 2025-02-24
Form: 10-K
Item: Item 1
Chunk 98
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million at December 31, 2024, compared to $688 million at December 31, 2023.

Collective loss estimates are determined by applying reserve factors, designed to estimate current expected credit losses, to amortized cost balances over the remaining contractual life of the collectively evaluated portfolio. Loans with similar risk characteristics are aggregated into homogeneous pools. The allowance for loan losses also includes qualitative adjustments to bring the allowance to the level management believes is appropriate based on factors that have not otherwise been fully accounted for, including adjustments for foresight risk, input imprecisions and model imprecision. Credit losses for loans that no longer share risk characteristics with the loan pools are estimated on an individual basis. Individual credit loss estimates are typically performed for nonaccrual loans and are based on one of several methods, including the estimated fair value of the underlying collateral, observable market value of similar debt or the present value of expected cash flows.    

Allowance for Credit Losses on Lending-Related Commitments

The allowance for credit losses on lending-related commitments estimates current expected credit losses on collective pools of letters of credit and unused commitments to extend credit based on reserve factors, determined in a manner similar to business loans, multiplied by a probability of draw estimate based on historical experience and credit risk, applied to commitment amounts. The allowance for credit losses on lending-related commitments totaled $35 million and $40 million at December 31, 2024 and December 31, 2023, respectively. 

F-21

Analysis of the Allowance for Credit Losses

The table below details net charge-offs (recoveries) as a percentage of average loans by loan category.

202420232022(dollar amounts in millions)Net Loan Charge-Offs (Recoveries)Net Charge-Offs (Recoveries) Ratio (a)Net Loan Charge-Offs (Recoveries)Net Charge-Offs (Recoveries) Ratio (a)Net Loan Charge-Offs (Recoveries)Net Charge-Offs (Recoveries) Ratio (a)Commercial$40 0.15 %$9 0.03 %$18 0.06 %Commercial mortgage13 0.09 (1)(0.01)— — Lease financing4 0.51 — — — — International(5)(0.47)13 1.06 — — Residential mortgage— — — — (