Comerica Incorporated

1849–2001

Comerica Incorporated is a multi-state financial services company based in Detroit. In 2001, Comerica had $42 billion in total assets, making it the 23rd largest bank in the United States. It operated 335 branch and supermarket offices and 700 ATMs. Except in Michigan, where its retail offerings are strong, Comerica tailors its products to small and medium-sized companies.

Born in Crisis

The Detroit of the mid-19th century was quite different from the modern Motown. The population of only 19,000 traveled on dirt roads; lumber and shipbuilding were the main industries. Similarly, the institution that preceded Comerica gave little hints of its future scale.

The Detroit Savings Fund Institute was created on March 5, 1849. Michigan governor Epaphroditus Ransom had decreed its founding to provide a safe place for wage-earners to invest their savings after a wave of bank failures. Detroit had three other banks at that time, but they were focused on business clients.

The Institute opened for business on August 17, 1849. At the end of its first day, the Institute had $41 in deposits and six customers. By year's end, this increased to $3,000 and 56 customers. Receipts reached $25,000 within two years and the number of customers increased to 300.

Elon Farnsworth, formerly Michigan's attorney general, served as the first president. The Institute was not a real bank, since it had no shareholders or capital stock. Its managers were unpaid. The Institute hired its first full-time cashier in 1855.

By 1870, the Institute had assets of $1 million. It changed its name to The Detroit Savings Bank in 1871 and reorganized as a corporation.

By 1900, Detroit Savings was a $6 million bank. The new automobile industry was beginning to fuel explosive growth in the area. Detroit's 1906 population of 290,000 would more than triple in the next quarter century.

Detroit suffered with the rest of the country after the stock market crash of October 1929. Detroit Savings was the only bank allowed to remain open during a statewide bank holiday in 1933. Soon, however, President Roosevelt's national bank holiday forced it to close. Detroit Savings changed its name to The Detroit Bank in 1936.

At the end of its first day, the Institute had $41 in deposits and six customers.

1933–1977

Creation of Future Partner: 1933

Another bank was formed in 1933 whose history would one day be linked to that of Detroit Savings. The Manufacturers National Bank of Detroit was created in 1933 by Edsel B. Ford, Henry Ford's son, and continued to hold strong ties to the Ford Motor Company.

Beginning with $3 million of Ford money, the bank's assets reached $11 million by the end of its first day in business, August 10, 1933. Unlike Detroit Savings, Manufacturers National focused on mid-sized and large corporations. It soon bought several other banks in varying degrees of solvency. Manufacturers was originally headquartered in Detroit's historical Penobscot Building, then the tallest skyscraper in town, but moved to a renovated office building in 1944.

Detroit's factories attracted thousands of workers during World War II. More women began to take teller positions, previously a job mostly held by men. Detroit Bank's president, Joseph M. Dodge, negotiated contracts for the U.S. military and worked on economic restoration programs for the defeated Axis powers.

Manufacturers bought United States Savings Bank in 1952. It merged with Industrial National Bank in 1955. That same year Detroit Bank acquired the Detroit Trust Company, forming Detroit Bank & Trust, which itself merged with The Birmingham National Bank, Ferndale National Bank, and Detroit Wabeek Bank and Trust Company in 1956. Detroit Bank's assets were more than $1 billion by the 1960s, at which time the company purchased its first computer.

Detroit Bank built a new headquarters building, completed in 1964, next to the former Detroit Trust Company building. Manufacturers moved its headquarters to the Renaissance Center in 1977.

Industry Changes in the 1970s and 1980s

The American banking industry changed substantially in the 1970s. Detroit Bank installed its first ATM (automated teller machine) in 1971. A Master Charge credit card program was adopted soon after.

The holding company DETROITBANK Corporation was formed in 1973 to exploit new industry regulations. As a holding company, DETROITBANK could offer more varied types of financial services than its bank subsidiary. It could also offer them in other states, as well as create new out-of-state banks.

1955–2000

A period of bank deregulation in the United States began in 1980. DETROITBANK changed its name to Comerica Incorporated in 1982. The company followed its retiring snowbird clients south, forming Comerica Trust Company of Florida, N.A. the same year.

The company and its future merger partner Manufacturers National were both moving to increase their presence beyond Michigan. Comerica bought its hometown rival Bank of the Commonwealth in 1983. Manufacturers National acquired Illinois-based Affiliated Banc Group, Inc. in 1987. The same year, Comerica opened a lending office in Texas.

Comerica acquired a Texas bank, Grand Bancshares, Inc., in 1988. Twenty other acquisitions of Texas banks followed. By 2000, this bank division had $3.8 billion in assets and 49 locations.

In 1991, Comerica expanded its California operations with the acquisition of Plaza Commerce Bancorp in Silicon Valley and InBancshares. The company had started an auto financing business there in 1983, which by 1988 was serving other types of businesses. By 2000, Comerica Bank-California had become the state's tenth largest bank, with 30 branch offices.

In the Sun Belt states, wrote USBanker, '[Comerica's] focus is on lending to small and middle market companies, using products like a state-of-the-art management system to take share from local competitors. Retail customers are basically `an accommodation.' Comerica preferred to operate in growing cities with plenty of smaller businesses, particularly industrial ones.

Needing more space, Comerica abandoned the Detroit Bank & Trust Building for offices at the corner of Woodward and Larned, which became known as the Comerica Tower at Detroit Center.

A 'Merger of Equals' in 1992

Comerica and Manufacturers National merged in 1992. Both banks were approximately the same size in assets ($14.3 billion and $12.5 billion, respectively) and employees (7,000 and 6,000).

The banks' CEOs promoted the merger to avoid either company being taken over by an out-of-state bank. Manufacturer's CEO Gerald V. MacDonald was picked to head the combined company, which retained the Comerica name as well as the Manufacturers blue trapezoid logo. MacDonald was succeeded in 1993 by Eugene Miller, a Comerica veteran since 1955.

1995–2003

Miller restructured the company, eliminating unprofitable enterprises, and led it into Canada and Mexico. About 60 out of 348 branches were closed, and 1,800 jobs were cut, mostly through attrition. This reengineering project was dubbed 'Direction 2000,' and lasted through 1998. Besides hiring a consulting firm, Comerica enlisted the help of its employees, receiving 2,000 suggestions on improving the bottom line.

One new area of growth was in life insurance sales, a business that states were gradually opening to banks. Comerica acquired an existing agency, Access Insurance Services, which it renamed. In 1995, the new Comerica Insurance Services began selling life, disability, and long-term care insurance at 274 branch offices in Michigan.

In early 1995, Comerica was also expanding its investment business via a merger with Munder Capital Management, based in Birmingham, Michigan. This was combined with Comerica's existing Woodbridge Capital Management and World Asset Management units, which together had $22 billion in assets to Munder's $8 billion. Comerica took a minority interest in the venture. Also in 1995, Comerica bought W.Y. Campbell, a Detroit-based investment banking operation, which became the basis for its capital markets group.

In 1996, Comerica sold off two subsidiaries, Comerica Bank-Illinois (formerly Affiliated Banc Group) and John V. Carr & Son, Inc. ABN-AMRO Holdings bought the bank, which Comerica abandoned after determining it could not grow in Illinois.

The Direction 2000 restructuring induced a short-term loss in 1996; however, the bank was again posting winning numbers in 1997. Comerica began operating in Canada in 1998 to benefit from its increasing trade with the states in which Comerica already operated. A Mexican subsidiary had been created in 1997.

Continuing Consolidation: 2000

The wave of giant banking mergers accelerated in 1998, with BankAmerica Corp. joining NationsBank Corp., Norwest Corp. joining Wells Fargo & Co., and Banc One Corp. joining First Chicago/NBD Corp., which brought Banc One, a strong retail bank, into Comerica's Detroit home. These new superbanks dwarfed Comerica in terms of assets, geographic reach, and range of products. Comerica's keys to survival were a focus on its core markets, innovation, and credit quality.

Miller took over the duties of president Michael Monahan upon his retirement in June 1999. Miller was required by company bylaws to retire at age 65 in 2003; he would most likely be succeeded by one of three vice-chairmen: John Lewis, Joseph Buttigieg, or Ralph Babb, Jr. Monahan went on to head the Munder Capital Management unit after its president quit in the fall of 1999. Comerica had been planning to reduce its majority stake in the company.

In 2000 Comerica had 11,000 employees, 1,000 of whom worked at its Detroit headquarters; it also had operations in Michigan, Florida, Texas, California, Colorado, Illinois, Indiana, Ohio, Nevada, New York, and Tennessee, as well as Mexico, Canada, and Hong Kong. Seeing a challenging future in spite of his success, CEO Eugene Miller told a meeting of the Newcomen Society in October 2000, 'Japan has one bank for 1.5 million people. ... In the U.S. we have one bank for every 25,000 people, and if you factor in credit unions, it's one for every 10,000. There simply are not enough customers to keep all, or even most, U.S. banks in business.'