Darlene Persons – Director Investor Relations Ralph Babb Jr. – President & CEO Elizabeth Acton – Executive VP & CFO Dale Green – Executive VP & Chief Credit Policy Officer

Matthew O’Connor - UBS David Rochester - Friedman, Billings, Ramsey & Co. Steven Alexopoulos - JP Morgan Brian Foran - Goldman Sachs Gary Townsend – Hill Townsend Capital Terry McEvoy - Oppenheimer & Co. Jeff Davis - FTN Midwest Research Brian Klock - Keefe, Bruyette & Woods Chris Mutascio - Stifel, Nicholaus & Company

Good morning. I would like to welcome everyone to the Comerica’s first quarter 2008 earnings conference call. (Operator Instructions) Ms. Persons you may begin your conference.

Good morning and welcome to Comerica’s first quarter 2008 earnings conference call. This is Darlene Persons, Director of Investor Relations. I am here with Ralph Babb Jr., Chairman, Beth Acton, Chief Financial Officer and Dale Green, Chief Credit Officer. A copy of our earnings release, financial statements and supplemental information is available on the Edgar section of the SEC’s website as well as on our website. Before we get started I would like to remind you that this conference call contains forward-looking statements and in that regard you should be mindful of the risks and uncertainties that can cause future results to vary from expectations. I refer you to the Safe Harbor Statement contained in the earnings release issued today which I incorporate into this call as well as our filings with the SEC. Now I will turn the call over to Ralph. Ralph Babb Jr.: Good morning. While the continued deterioration of the California residential real estate market and its affects on our residential real estate development portfolio affected our overall performance in the quarter, the remained of our loan portfolio continued to exhibit stable credit metrics. Despite the challenged economic environment we remain focused on executing our strategy as evidenced by good loan and deposit growth, particularly in our high growth markets. Our first quarter earnings per share of $0.73 from continuing operations were down from $0.77 in the fourth quarter of 2007. Our first quarter earnings were largely impacted by an increase in the provision for loan losses and a decline in the net interest margin partially offset by a pre-tax cash gain on the partial redemption of our equity interest in Visa. Net loan charge-offs increased $47 million from the fourth quarter 2007 to $110 million or 85 basis points of average total loans. Of the $110 million in charge-offs, $75 million is related to our residential real estate development portfolio. We increased the provision for loan losses by $51 million from the fourth quarter to $159 million due to the continued residential real estate development challenges in California. Our automotive supplier portfolio continued to reflect satisfactory credit quality with minimal charge-offs and inflows to non-accrual in the last few quarters. As expected the net interest margin of 3.22% declined 21 basis points from the fourth quarter largely due to planned securities purchases, expected loan growth and excess of core deposit growth and the reduced contribution of non-interest bearing funds in a lower rate environment. On an annualized basis and excluding the financial services division average loans increased 10% compared to the fourth quarter of 2007 led by 14% growth in the Texas market, 10% growth in the Western market and 9% in the Midwest market. Our expenses were well controlled in the quarter with reduced headcount even as we continued our banking center expansion program. On an annualized basis and excluding financial services division deposits and institutional certificates of deposit, total deposits were up 5% in the first quarter compared to the fourth quarter 2007 and this continued to be driven in part by our banking center expansion program. Clearly the lingering housing crisis has affected all financial institutions including Comerica and the continued struggle of California residential real estate developers in particular. The excess inventory, declining prices and extended time to sell have had a debilitating affect on the California housing market. We are aggressively addressing this situation as the market has continued to deteriorate. For example we are conducting appraisal updates as appropriate. We conduct in depth reviews of every watch list loan. We periodically stress test the portfolio and undertake a migration analysis as part of our overall analytics. We have moved additional experienced and seasoned lenders to our special assets group significantly expanding our work out area for problem credits. When appropriate we are taking advantage of debt sales through the secondary market. Dale will provide additional details on the credit process we employ which is assisting us in managing the issues and assessing the risks in order to make sure we have provided adequate reserves. We opened three banking centers in the first quarter and plan to open 29 more in 2008. All of the new banking centers we open in 2008 will be in our high growth markets. We have generated some $2 billion in new deposits since launching our banking center expansion program in late 2004. We increased our quarterly cash dividend in the first quarter by 3.1% to $0.66 a share. We have increased our annual dividend for 39 consecutive years. While there have been significant headwinds for the banking industry our capital position has remained solid and we believe continues to provide us with a cushion to weather this challenging economic environment. It also provides us with the flexibility to continue to invest in our growth markets. We expect the economy will continue to be challenged. With GDP growth essentially stalled, if not contracting in the near-term. A positive note is that due to the dollar slide, the trade sector is providing meaningful support to manufacturers including many of our business customers. With regard to the rest of the year ahead for Comerica we see an opportunity to raise loan spreads as the market continues to re-price credit quality over time. We also anticipate further loan growth particularly in our high growth markets. Credit quality will continue to be challenged primarily due to the lingering housing prices. Finally we expect expenses for the rest of the year to be well controlled. And now I’ll turn the call over to Beth and Dale who will discuss our first quarter results in more detail.

Good morning. As I review our first quarter results I will be referring to slides that we have prepared that provide additional detail on our earnings. Turning to slide three we outlined the major components of our first quarter results compared to prior periods. Today we reported first quarter 2008 earnings per share from continuing operations of $0.73 compared to $0.77 in the fourth quarter. The largest impact on our first quarter results over the fourth quarter was a $51 million increase in the provision for loan losses to $159 million reflecting challenges in the California residential real estate development portfolio. Turning to slide four and an overview of financial highlights from the quarter, we continued to have good loan growth in our high growth markets. On an annualized basis average loans excluding financial services division increased 10% led by a 14% increase in Texas and 10% in the Western markets. Deposits excluding financial services division and institutional CDs grew 5% on an annualized basis including a 12% increase in non-interest bearing deposits. This is especially noteworthy given that we lowered deposit rates during the quarter. As we expected the net interest margin decreased 21 basis points to 3.22% in the first quarter primarily reflecting a planned larger securities portfolio, expected loan growth in excess of core deposit growth and the reduced contribution of non-interest bearing funds in a lower rate environment. Credit quality exhibited weakness in the California residential real estate development portfolio. The rest of the loan portfolio continued to exhibit stable credit metrics as evidenced by the net charge-off ratio, when you exclude commercial real estate line of business of 31 basis points. Provision for loan losses for the first quarter was $159 million compared to $108 million in the fourth quarter bringing the period-end allowance to total loans to 1.16% compared to 1.10% last quarter. Dale will provide greater detail on credit quality in a moment. We continued to carefully control expenses. Non-interest expenses decreased $47 million reflecting in part the reversal of a $13 million accrued liability related to our membership in Visa. Headcount decreased by 140 or 1% of total employees. Our capital position remains solid with a Tier 1 common capital ratio of 6.71% which is within our targeted range. Slide five outlines the various factors that impacted net interest income in the first quarter. Increases in loans, the securities portfolio and non-interest bearing deposits were offset by a decline in the net interest margin. As expected the margin declined in the first quarter reflecting the negative impact from securities purchases, loan growth outpacing deposit growth and the reduced contribution of non-interest bearing deposits due to the lower rate environment. This was partially offset by a reduction in deposit rates. Slide six shows the growth of our securities portfolio over the past several quarters. We have opportunistically increased our investment securities portfolio as spreads widened. While increasing the portfolio had a 6 basis point negative impact on net interest margin in the first quarter, it contributed positively to net interest income. Also it assists us in meeting our interest rate risk management objectives. Within our securities portfolio we have invested almost exclusively in AAA rated mortgage-backed government sponsored agency securities, specifically Freddie Mac and Fannie Mae. We expect the securities portfolio will remain at the current level for the remainder of the year. Slide seven shows non-interest income levels over the past several quarters. First quarter non-interest income reflected positive trends in the fee categories indicated on this slide. The $21 million gain on sale of Visa shares was reflected in net securities gains. This was partially offset by a decrease in income from principal investing and warrants of $10 million and a decrease of $7 million in deferred compensation plan asset returns which is offset by a decrease in non-interest expense. Moving to the balance sheet and slide eight, compared to the prior year average loans excluding financial services division increased $3.8 billion or 8% paced by double-digit increases in our growth markets. We are steadily making progress toward our goal of achieving more geographic balance with markets outside of the Midwest now comprising 63% of average loans compared to 60% a year ago. Slide nine provides detail on line of business loan growth excluding financial services division. All commercial businesses and private banking lines experienced growth in each of our geographic markets in the first quarter compared to the same period last year with the exception of national dealer services in the Midwest and Western markets and middle market banking in the Midwest. The first quarter increase in specialty businesses compared to the prior year includes technology and life sciences portfolio, which grew $377 million and the energy portfolio which grew $560 million. On a linked quarter basis average loans excluding financial services division increased $1.3 billion or 10% on an annualized basis due to increases in global corporate banking $446 million, middle market $188 million, private banking $167 million, energy $136 million, national dealer services $125 million and small business banking $119 million. Now Dale Green, our Chief Credit Officer will discuss recent credit quality trends starting on slide 10.

Good morning. Credit quality weakened due to issues largely isolated to the California residential real estate development portfolio which is part of our commercial real estate line of business. The rest of the portfolio continued to exhibit stable credit metrics. Net credit related charge-offs were $110 million or 85 basis points of average total loans in the first quarter. Net charge-offs included $75 million in the commercial real estate line of business primarily due to the weakening of the California residential real estate development sector. I would like to point out as you can see on this slide, that excluding the commercial real estate line of business our net credit related charge-offs in the first quarter were 31 basis points of average loans. The provision for loan losses was $159 million, a $51 million increase from the fourth quarter due largely to the ongoing challenges in the residential real estate development specifically in California. Credit metrics in Michigan were stable and the Texas market continued to perform very well. Our watch loans were 8.8% of total loans, up from 6.9% in the fourth quarter. Non-performing assets were 107 basis points of total loans and foreclosed property. Loans past due 90 days or more and still accruing, were $80 million at March 31st, an increase of $26 million from year-end 2007. This increase was primarily due to Michigan and California residential real estate development loans. These loans continue to pay interest and are in the process of being restructured. The allowance for loan losses was 1.16% of total loans, an increase of six basis points from the fourth quarter. The allowance for loan losses was 112% of non-performing loans. On slide 11 we provide information on the makeup of the non-accrual loans. Commercial real estate which consists primarily of residential real estate development loans, comprised the largest portion of the non-accrual loans and accounted for the entire increase in non-accrual loans quarter-over-quarter. By geography 47% of non-accruals are in the Western market. As far as granularity there are 13 relationships totaling $202 million that aggregate to between $10 million and $25 million each and there are no relationships over $25 million on non-accrual status. In the first quarter we had $281 million in loans greater than $2 million transferred to non-accrual status. Western commercial real estate line of business accounted for $201 million or 71% of these transfers to non-accrual. There were no new non-accrual transfers over $2 million from the automotive supplier segment. On slide 12 we provide a breakdown of net charge-offs by geography. The increase in net charge-offs in the Western division which comprised 60% of net charge-offs in the quarter, can be attributed to the residential real estate portfolio. The commercial real estate line of business accounted for $58 million of the Western net charge-offs. These net charge-offs were evenly between Northern and Southern California. Net charge-offs for the Midwest which made up 25% of the total declined compared to the fourth quarter. The commercial real estate line of business accounted for $14 million of the Midwest charge-offs. We have been dealing with challenges of the Midwest economy for the past several years. The velocity of change is stable and we will continue to work through the problems. On slide 13 we provide a detailed breakdown by geography and project type of our commercial real estate line of business. There is further detail provided in the Appendix to these slides. Geographically the Western market, California primarily, comprised 45% of the total portfolio. Approximately 60% of California exposure is in Southern California and 40% in Northern California. On slide 14 we have provided the geographic breakdown of the commercial real estate line of business charge-offs over the last two quarters. One hundred percent of these charge-offs were from residential real estate development loans. The deterioration in the California residential development is apparent in the increase of these net charge-offs in the quarter. As far as the Midwest, as you can see, the net charge-offs declined this quarter as we have been working through the issues of falling home prices and slower absorption rates in this portfolio for several years. In the commercial real estate segment we transferred $233 million in relationships over $2 million to non-accrual loans in the first quarter. Non-accrual relationships greater than $2 million that were transferred to non-accrual comprised 29 relationships, of which 23 are located in the Western market, five are located in the Midwest and one in Texas. Again we did not have any charge-offs in the first quarter nor have we seen any deterioration in the non-residential commercial real estate portfolio. To illustrate the severity of the recent deterioration in the California residential real estate market, slide 15 includes two charts. The chart on the left of the slide shows the median price of single-family homes in California which has declined almost 14% from the fourth quarter and about 30% from a year ago. On the right the chart shows single-family building permits which have declined over 10% in the first quarter and about 33% from one year ago. Currently there are about 14 months of unsold inventory. The issues in the California real estate development portfolio are centered in one area; the California local residential real estate developer portfolio, which is outlined on slide 16. Our residential real estate portfolio in California is comprised of two components. Over the years our business development efforts in California were split into two separate and distinct groups. We had a group which focused on local, smaller residential developers which built starter and first-time move-up homes and a group which focused on larger developers which built medium to higher end homes. The problems we have in this sector are generally isolated to the local developer portfolio which has about $800 million in outstandings. This portfolio accounted for 41% of the bank’s total net-accrual loans and 100% of the Western markets commercial real estate line of business net charge-offs of $58 million in the first quarter. We believe the issues have been identified and we have not done any new business in this segment for some time nor will we be doing business in this segment for the foreseeable future. On slide 17 we provide a detail about how we are managing and assessing the risk in the residential real estate portfolio. We are monitoring the performance of our customers very closely. All relationships in our California residential real estate portfolio are being reviewed at least quarterly, or as new information becomes available. We are obtaining updated appraisals as appropriate and are having discussions with secondary market sources in order to sell exposure. We are proactively restructuring facilities where necessary. In addition we have transferred the entire California local developer group including relationship managers and administrative support to our special assets group. These experienced real estate lenders who have extensive knowledge of the California market are now working with our work out professionals. Slide 18 provides an overview of our consumer loan portfolio which includes the consumer and residential mortgage loan categories on the balance sheet. This portfolio is relatively small representing just 8% of our total loans. These loans are self-originated and are part of a full service relationship. We are not in the subprime mortgage business and the performance of our consumer portfolio has been stable. The residential mortgage portfolio continues to perform very well. Home equity delinquency is relatively stable however we remain cautious therefore we have increased reserves in the first quarter. Turning to slide 19 we have outlined a few characteristics of our home equity portfolio. Roughly three-quarters of the portfolio consists of revolving home equity lines and the remaining one-quarter are amortizing home equity loans. Again these loans were originated by us as part of a full service customer relationship. The quality of the portfolio is reflected in the solid FICO and loan to value statistics at origination. Slide 20 provides detail on the recent performance of the automotive portfolio. Our dealer business represents about 75% of the automotive outstandings. We have not experienced a significant loss in the dealer portfolio in many years as the majority of the portfolio is of a well secured floor plan nature. We expect it will continue to perform well. Looking at our non-dealer automotive exposure, we have reduced our loan outstandings $23 million in the first two months of 2008. This portfolio now represents about 3% of our total loans and we plan to continue to reduce our exposure to the automotive sector. Non-accrual loans were flat and we had minimal net credit related charge-offs in this portfolio in the first quarter. The performance of this portfolio is stable. To conclude, I would again like to say that we are clearly focused on the credit issues in the residential real estate development portfolio. Outside of residential real estate development all of our business lines are generally displaying stable credit quality. We have not seen material deterioration in other sectors as evidenced by the relatively stable non-accrual loan balances we have continued to show in our commercial and consumer loan portfolios over the past year or so. Now I’ll turn the call back to Beth.

Thanks Dale. Turning to slide 21 average core deposits which exclude financial services division of $33.8 billion increased $400 million or 5% on an annualized basis in the first quarter compared to the fourth quarter. This includes excellent growth of average non-interest bearing deposits excluding financial services division of $255 million. Also money market account balances grew $194 million in the first quarter. As I mentioned earlier we achieved this growth while we reduced deposit rates during the quarter. Non-interest bearing deposits account for about 24% of average total deposits. The largest increases in average core deposits were in private banking $85 million, middle market $81 million, retail banking $73 million, technology and life sciences $72 million and global corporate banking $46 million. On a geographic basis excluding financial services division annualized average deposits in the first quarter when compared to the fourth quarter were up 3% in the West and 2% in Texas. On slide 22 we provide an update to our financial services division which continues to be a good source of low cost funding. The rate of contraction of this business slowed considerably in the first quarter as a result of the stronger refinance volumes. In fact, on a national basis, refinanced volumes were up 55% in the first quarter as compared to the fourth quarter. However California home prices and home sales continued to fall as Dale discussed. As a result financial services division non-interest bearing deposits decreased $166 million in the first quarter. Related average loan balances decreased $139 million while customer service expense was down $1 million from the previous quarter. As the rate of decline has slowed we have increased our outlook for the financial services division in 2008 however we remain cautious. We expect non-interest bearing deposits to average about $1.7 billion to $1.9 billion and an increase from our previous outlook of $1.2 billion to $1.4 billion. We also expect that average loans will continue to fluctuate with the level of the non-interest bearing deposits. Slide 23 provides an update on the progress of our banking center expansion. As Ralph mentioned earlier we opened three new banking centers of the 32 that we plan to open this year in our high growth markets. As you can see on slide 24 our banking center expansion continues to produce the desired results. Deposits attributed to our new banking centers average nearly $2 billion for the month of March, up from nearly $1.8 billion in December. These new deposits are well distributed with 45% generated by the retail bank, 38% by the business bank and 17% by wealth and institutional management. We continue to meet our goal of having our collection of new banking centers accretive within 18 months. On slide 25 we’ve highlighted our diverse funding base. Liquidity and access to funding sources has been a hot topic recently in the banking sector. I’m pleased to say that Moody’s recently reaffirmed the banks’ senior unsecured A1 rating and stable outlook. In conjunction with the relocation of our corporate headquarters to Dallas, we joined the Federal Home Loan Bank of Dallas and subsequently drew down $2 billion at a very attractive rate. Also we recently began to tap into the repo market. As you can see on slide 26 over the last several quarters we have brought our Tier 1 common capital ratio into our target range. Our capital position compares well to our peers. This solid capital position provides us ample cushion to weather the current economic environment as well as the flexibility to continue to invest in our growth markets. Slide 27 updates our expectations for the full year 2008 compared to a full year 2007. In conjunction with a weaker economic environment we expect slower average loan growth for the remainder of 2008. We now anticipate average total loan growth for the year to be in the mid single-digit range excluding financial services division loans. Growth in the Texas market is expected to be low double-digits while we expect to achieve mid to high single-digit growth in the Western markets and low single-digit growth in the Midwest markets. Based on the Fed funds rate declining to 1.75% by mid-year, we expect an average full year net interest margin of about 3.10%. We expect the margin will be impacted by the increase in the first quarter of our securities portfolio which is expected to have a 10-basis point negative impact on the margin, the reduced value of non-interest bearing deposits in lower rate environment and loan growth continuing to outpace deposit growth. Our outlook for credit quality is for average net credit-related charge-offs of 75 to 80 basis points for the full year as the stress in the residential real estate development market continues. We continue to expect non-interest income to increase and non-interest expenses to decrease both at a low single-digit rate. Also our outlook is to maintain our Tier 1 common ratio within our targeted range. Now we’d be happy to answer any questions that you might have.

Your first question comes from Matthew O'Connor – UBS Matthew O’Connor – UBS: I was wondering if you could comment a bit on your dividend policy here, obviously the environment is getting incrementally tough and I think a lot of banks are faced with tough decisions on the dividend and yours does scream as one of the higher payout ratios, so I’m wondering what your thinking is on that?

Your question really relates to kind of our perspective on our capital position and we continue to view our capital position as strong. It continues to be in excess of our minimum targets that we have set and clearly in excess of regulatory guidelines. We also, if you looked at the slide I showed, we are better capitalized than the median of our peers and that’s both on a Tier 1 common ratio which we are focused on as well as the tangible equity to tangible asset ratio basis. Another point I’d like to make is the makeup of our capital is strong. It’s substantially composed of common equity which in the end is the ultimate protection for bond holders. We only have about 9% of our Tier 1 capital that’s in preferred stock compared to our peers on average a little in excess of 20%. And we also run our holding company and the bank dividend policies in a conservative manner. For instance in the holding company, we don’t have incremental borrowings that we use to fund the dividends and we maintain a healthy minimum cash level at the holding company and for the bank, we operate in a fashion to ensure that we have a cushion that’s in excess of the minimum required net profit rules. And a corollary to the point I made about the quality of our capital position is that we have substantial capacity if we needed to to raise Tier 1 capital and so I guess what I would say is we feel very comfortable with our capital position and it isn’t uncommon during cyclical times to have the payout be a little higher. So we’re comfortable with where we are. Matthew O’Connor – UBS: Okay, I think it’s a very good point regarding the quality of your capital which is [inaudible] a lot of other banks, but at the same time the window seems to be opening up a bit here for some of the hybrid or preferred issuance and could you just comment if you have interest on doing some issuance there?

The thing that we do periodically access on a routine basis and have for many years is the subordinated debt market for the bank and those would be things that are not uncommon for us annually or every 18 months or so to do some issuance there. So that would really be the only thing we’d probably be focused on at this juncture. Matthew O’Connor – UBS: Okay and then just a question for Ralph, have you seen more willingness among some of the smaller banks in some of your higher growth markets to potentially partner up? We keep hearing about the various small banks are heavily concentrated and some of the real estate kind of running out of capacity to go at it alone. Ralph Babb Jr.: Keeping in mind that the markets we’re in especially Texas and California, while we talked about California having the real estate problems, the rest of the economy in California has been fairly resilient as has our portfolio there. So at this point in time, I can’t say that I’ve seen any increase in activity to your question. Texas economy continues to be very strong in really all sectors and so I think part of the answer is you’re not seeing the pressures that you might expect in other areas of the country. Matthew O’Connor – UBS: Okay. Should we expect you to be opportunistic if there are some deals out there that are available or --? Ralph Babb Jr.: I think we’ve always said in the past and continue to say that if there were opportunities within our market that put us a step forward in the strategy that we’re really continued to espouse, we would certainly look at that. It has to meet all of our criteria because as we’ve said before its very important that we have an internal model that puts us on the growth plane that we want to be and that‘s part of the expansion of the banking centers which we are now getting ramped up and will ramp up for the next year or two as well, to find a point as to where that particular addition every year will be like buying small banks. The difference is you don’t have the goodwill and you don’t have the cultural issues and you don’t have the other portfolio issues. So direct answer to your question is we’ll always look at opportunities and certainly in the markets we’re in. Matthew O’Connor – UBS: Okay, thank you very much.

Your next question comes from David Rochester - Friedman, Billings, Ramsey & Co. David Rochester - Friedman, Billings, Ramsey & Co.: I noticed the commercial charge-offs were up in first quarter, can you comment on what trends you’re seeing here? Are you seeing more deterioration amongst your small business customers?

There is some softness on the small business side but really the charge-offs there are relatively small in comparison. You’ve got to remember that the small business portfolio obviously is very granular in terms of loan size; the average loan size there is less than $100,000 per deal. Those are secured guaranteed type transactions. So while there is softness there and we are watching it it’s not risen to a level of any sort of heightened concern at this point.

And I think if you look at the retail bank segment information we give which houses the small business, in fact charge-offs were down in the quarter compared to the fourth quarter. David Rochester - Friedman, Billings, Ramsey & Co. Okay well given that your charge-offs this quarter are at the higher end of your new range for 2008 charge-offs are you expecting the economy at this point to remain in a slow growth mode but not deteriorate further?

I’m expecting the economy to continue to be soft. I think that we’re – as we pointed out in our call today we’re very focused on residential real estate development primarily in the Western market. I think that particular segment will continue to be challenged as the statistics we’ve referenced point out. Home prices have declined substantially. Inventories are very high. It will take some time to run off those inventories and so we’re really looking at that segment as continuing to be challenged. As it relates to our other segments, they continue to show a pretty good performance. Our credit metrics as we pointed out continue to be good so the rest of the economy as it relates to our other businesses I think they’ll be challenged in a soft economy but I think we’re positioned to manage those pretty successfully. David Rochester - Friedman, Billings, Ramsey & Co.: Okay, you just mentioned the Western exposure there and you had talked about conducting appraisal reviews, can you give us a sense for how much of your residential construction portfolio has been appraised in the last three to six months?

I can tell you that specifically looking at that $800 million slice of the portfolio which is the sort of the local residential real estate developer piece in the Western market which we’re really focused on, we’ve probably got almost three-quarters of that appraised within the last six months and the key for us there is we’ve written those loans down unless there were other mitigating factors to the as-is values which are substantially depressed values in this market. David Rochester - Friedman, Billings, Ramsey & Co.: And for those loans that are rated substandard or NPA how often do you have to continue to update those appraisals as time goes on?

Well the rules are basically are subject to some interpretation, but essentially if you feel there’s been a continued decline since the last time you did evaluation, you need to go out and get a new appraisal and so we typically, when the loans hit classified status, make sure we’re getting appraisals that are within the last six months – no more than six months old. David Rochester - Friedman, Billings, Ramsey & Co.: And are you currently undergoing your 2008 reg exam right now and if so when will that conclude and have the regulators been encouraging more aggressive appraisal activity?

We have gone through our safety and soundness exam; we really can’t comment on that for the moment. But we review our loan loss reserving and methodology and our actual results within each quarter to get their support and [buy] and they have done that like they do every quarter. We’re not getting any particular push back on any [client]. I think they’re satisfied with our methodology and our process. So no, we’re not seeing anything of that sort. David Rochester - Friedman, Billings, Ramsey & Co.: So that’s a process that’s still ongoing right now?

Well the safety and soundness exam is concluded. David Rochester - Friedman, Billings, Ramsey & Co.: Okay, where is most of your growth in the commercial portfolio right now? Is it coming from the share national credit portfolio or smaller business?

It’s really across our geography and across our industries generally speaking so it’s pretty widespread. It’s not concentrated. We did have volume obviously in shared national credits in the quarter but frankly it was down from the prior quarter as a percentage. So it’s really very broad across wealth management, small business and many of the business bank lines, technology and life science, energy, middle markets. So it’s nice and widespread. David Rochester - Friedman, Billings, Ramsey & Co.: Would you happen to have that balance at the end of the first quarter for the shared national credit portfolio?

It’s about 22% of our loan portfolio. The details will be available in the Q. David Rochester - Friedman, Billings, Ramsey & Co.: Great, thank you very much.

Your next question comes from Steven Alexopoulos - JP Morgan Steven Alexopoulos - JP Morgan: A couple of things; in regard to the $2 billion of the securities that were added, can you just remind us of the motivation to grow the securities so much here and why so much in the first quarter rather than through the year given the dilution to capital levels?

Yes, there are two or three reasons why we have grown the investment portfolio over the last several quarters. One is the – we were getting to a level toward the middle of last year, a lower level than kind of where we want to be which is about 7% of earning assets and so actually the credit crunch arriving in the third quarter was helpful in the sense of it has really widened out the spreads on those securities. And so that provided us an opportunity to increase the portfolio but a key driver is really looking at managing of our interest rate risk. It’s very similar – our alternatives to put on swaps which have the same dynamics of receiving a fixed rate and paying a floating rate to fund those. So it’s helping us mitigate our exposure to falling interest rates over the last several quarters. So that’s the combination of circumstances of why we’ve done it. And frankly it’s been a [profitious] time in the sense that the spreads are very attractive relative to where they’ve been historically. Steven Alexopoulos - JP Morgan: Beth if you looked at your funding costs what would you say the average spread was on the securities added?

Well actually given where spreads are and given where our funding cost is it’s significantly positive. Steven Alexopoulos - JP Morgan: Could you share the – kind of like a margin on that?

No, I’d rather not. It really depends on how you want to look at it too. Incremental dollars versus the pool of dollars, I mean there are different analyses around that. Steven Alexopoulos - JP Morgan: Okay, in the 10-K you raised the charge-off guidance to the upper end of the 40 to 50 basis point range and we came in at about 85, just wondering what changed so dramatically from that point that came out late February? Was this just intense pressure in the month of March on the loan portfolio?

Well we were getting appraisals in as of the earlier question when I was talking about appraisals, was we were beginning to downgrade assets based on declining home values and we were getting appraisals in. Our estimates of values were light compared to what the appraisals were coming in as and most of the appraisals were coming in almost always on an as-is valuation. So a project might be just in the early stages of development or anywhere along the development spectrum. So as those appraisals came in and we got a lot of them in in the quarter, but towards the end of the quarter, those valuations were substantially below our expectations by a significant amount and I think the whole market was surprised by that, not just us. So that had a significant impact on our view of charge-offs and provision and clearly when we saw as-is values at such low levels we were in a position where we needed to charge those down to the as-is values in most cases. And that’s the key difference. Steven Alexopoulos - JP Morgan: Thank you.

Your next question comes from Brian Foran - Goldman Sachs Brian Foran - Goldman Sachs: If I step back and think about the guidance and the run rate as we go back to ’05 and ’06, it seems like EPS could be down by about half and a lot of this is just the margin being near 3% instead of 4%, and can you help us just think about of this is cyclical versus secular, by which I mean is this just assets sensitivity at this point in the cycle are assets fee deposits going to be permanently lower and that’s just lowers the margin potential of the bank?

There are a couple of factors that are both cyclical as well as secular I would describe. One is if you look over the last several years, for the industry in general not just for Comerica, we have seen a significant compression in commercial lending spreads. There are have been a lot of additional players besides banks in the commercial lending space and we as in industry have seen a lot of compression which I guess you could say is cyclical because times were good. But it was also in some sense a little different in the sense that there were additional players in the lending markets that hadn’t been there before. So I think we are at a point now where we’ve come down on the loan spread side from a higher level over the last few years and now with the credit crunch and the cycle coming, there is opportunity – we’re already seeing opportunity to in fact increase spreads. There is certainly a re-pricing of credit risk that’s gone on in the capital markets and that’s beginning flow through a broad sector of banking customers. The other of course is the interest rate cycle, obviously because of the nature of our balance sheet tends to have an impact on us with the lowering of rates. But we also think we are very near the end of the lowering of rates and so between loan spreads and more optimistic about going forward and we’re nearing what we think is the end of the interest rate cycle. So those are both positive things for Comerica. Brian Foran - Goldman Sachs: Okay and then I mean I guess ultimately in terms of a normalized margin or a normalized ROE or whatever metric we should focus on, I mean we’re kind of below trend earnings right now but what is the normalized earnings power of the balance sheet I guess?

That’s a very difficult question to answer because there’s so many moving parts on deposits and loans and the interest rate environment and the yield curve, I think stay tuned as we look forward into ’09. I don’t have a good picture to give you a normalized level at this juncture. Ralph Babb Jr.: I think the key will be just to emphasize something Beth said, as the turn comes and I mean its starting now. Risk is being re-priced back into the lending environment. And it had gotten to a point where it was very thin and you’ve seen that from a number of indicators in the industry and I see that coming back not only fairly quickly as we’re seeing, but also the availability of credit in various areas is not where it used to be and therefore that will have an effect on price as well. So while I can’t project whether it will come back to where it was, I think it will come back fairly substantially from where it is today. Brian Foran - Goldman Sachs: And then, reserves against the C&I portfolio, I think were 102 basis points at year-end, do you have an update of where that metric is now and what a normalized level there looks like?

Well reserves against the whole portfolio as you saw was at 1.16%, so it’s up from 110 at the end of the year and I don’t have a sense, but what we’ve said we’ve given you our guidance on charge-offs but we have also said that our provision will be about that for the foreseeable future. So that’s about all I can tell you right now. Again, we go through a process every quarter that’s very consistent and very disciplined and based on those results, obviously each quarter will result in a provision calculation. So the provision will be above charge-offs at least as I say, for the next few quarters. Brian Foran - Goldman Sachs: Thank you.

Your next question comes from Gary Townsend - Hill Townsend Capital Gary Townsend – Hill Townsend Capital: Dale a question for you, it sounds as though most of the credit weakness was concentrated in the residential construction and then a subset of that in the players – the smaller players in the California market. I was wondering is the structure that you’ve changed this last quarter with regard to the approach to the markets there, was there a legacy issue there. Was that a legacy from the Imperial Bancorp acquisition several years ago?

As we pointed out here there are fundamentally two residential real estate development-type businesses that we’ve gone after in California. One is sort of the traditional larger developers – larger local developers that have a little more staying power if you will and so forth and then there’s more the entry-level type of developer selling to the first-time home buyer or the first move-up home buyer and its that entry-level developer where the issues really are. Yes that was a business that came with Imperial but that’s a business we’ve been in now for some time and it really it’s a fundamental issue around the strength of the underlying developer and frankly the whole market, particularly in California, having substantial run up in prices which can only be sustained for so long as you know, and then the rapid deterioration that occurred. And I think it’s more along the lines of the strategy of that business. These were as I said local developers who were smaller and by definition probably and obviously it’s been demonstrated, had less flexibility. Gary Townsend – Hill Townsend Capital: Okay thanks.

Your next question comes from Terry McEvoy - Oppenheimer & Co. Terry McEvoy - Oppenheimer & Co.: Dale it sounds like the Midwest at least the problems there, may be behind the company on the commercial side, but may be some deterioration or pressure within the home equity or consumer business, is that a fair statement?

Well let me take it in the two pieces you’ve addressed. One is I would say that the credit quality issues let’s say in the Midwest are – particularly on the real estate side, are stable. The rest of the portfolio there is in pretty good shape. I will tell you that our home equity portfolio continues to perform very well. Our delinquencies are actually performing – they’re much better than the industry performance and I’m not really concerned about that home equity book. We changed our criteria some time ago. We’re pretty conservative. It hasn’t grown much. It’s self-originated. It’s got good FICO scores out of origination. Good loan to values and so forth. So all of that is paying dividends today in the sense that the credit metrics are very sound; it hasn’t grown any at all. It’s been pretty stable. But that’s okay. Terry McEvoy - Oppenheimer & Co.: And then the loan growth in the Midwest, 9% in the first quarter, just above your full year forecast. Is that seasonality or was there something beyond that in Q1?

No I think again, we talked a little bit about what that is. It’s the number of the businesses that we’ve – that have been across the aboard. There’s been some in middle markets, some in dealer and so forth, really nothing in real estate. As you can see in the footnotes, real estate has actually declined. Our real estate loans in the Midwest have actually come down quarter-over-quarter. So it’s generally across all of our other businesses and those businesses are doing well. We’ve obviously brought down our auto supplier book a bit and that’s still the direction we’re headed. So it’s no one particular area. Ralph Babb Jr.: We also had usage move up as well a bit of a turmoil in the banking industry and in the Midwest today. Terry McEvoy - Oppenheimer & Co.: And just one last question, could you just update us on the success you’re having and really transitioning your business and small business customers into personal banking, the wealth management area especially in Texas where you’ve added quite a few banking centers over the last couple of years? Ralph Babb Jr.: In Texas and really its surrounding the move, as well as it’s a strategy that we’ve had in all the markets as we talked about before in developing both wealth management and retail which we had not specifically done. We were a bit behind in product and employees as well and we’ve now brought that up to where I think we’re very competitive. I would say the reception that we’ve gotten here has been very good and the ability to bring in new customers because of being here and having a larger group of management available to call on customers is paying dividends. We are being careful in this environment not to overly expand in the short-term, just because of where the environment is today but I think we’re pretty much moving along as we expect. Actually I think it’s probably a little bit better than what we expected. Terry McEvoy - Oppenheimer & Co.: Thank you.

Your next question comes from Jeff Davis - FTN Midwest Research Jeff Davis - FTN Midwest Research: Dale the news from California I guess is grim on the resi side but would you – based on what you know today and the inflow of problems and what you can see over the horizon, would you expect the problems in that portfolio to may be peak over the next few quarters and not necessarily get better from there but deterioration stop?

Yes certainly that’s our hope. It’s a little difficult to call. We have in addition to bringing the lending areas -- the people in the lending areas into our special assets work out area which is beginning to show some positive results, we’ve also brought one of our senior real estate managers over there to manage the specific strategies around that $800 million portfolio. And as he begins to get his arms around all of that, I’m working in addition with our special assets people; we’ll have a better feel probably in another two to three weeks. But my view is based on the fact that all of these credits have now been reviewed that roughly three-quarters or so of them have gotten a lot of recent appraisals that we’re in the process of working through those. I would say that it’s an event that will continue through the rest of ’08. I would expect that the next two quarters would be the most challenging of them but again if the markets continue to not rebound a bit, not a lot just a bit, then we’ll continue to see problems throughout the rest of ’08 and potentially a little bit into ’09 in that segment. But I think based on what we see today, that the next couple of quarters will be the most challenging for us in terms of trying to get these assets monetized because all the entire environment – everyone is kind of doing the same sorts of things. There’s a lot of overhang in the market in terms of just the absolute amount of the inventory and there’s more coming on all the time. Jeff Davis - FTN Midwest Research: Great and not to put words into your mouth, but it sounds as though the balance of the portfolio is rather softening. There’s not a dramatic, or you’re not expecting a dramatic baton pass from we’ve got big issues in California resi, they’re going to spread into C&I generally and income producing commercial real estate throughout the footprint.

Clearly we haven’t seen that to date. We’re not seeing that currently yet. Certainly some softness will be here and there and spotty, maybe some middle market companies. But it’s the sort of thing you might expect in any normal sort of cycle so nothing of any significance at all at this point. Jeff Davis - FTN Midwest Research: Okay and Beth the margin guidance 310 for the year, you were 320 this quarter, does your modeling imply the margin goes down throughout the year or do we reach a bottom in a quarter or two and then start to turn up?

When we’re still having the impact obviously from the higher securities portfolio for the balance of the year, but also rates – our projections are that rates will continue to fall in the second quarter. So in April we see another rate cut. In June we see another rate cut. That will have an impact through the third quarter and then it’s less of a – obviously there’s less volatility from there. Jeff Davis - FTN Midwest Research: Okay, thank you.

Your next question comes from Brian Klock - Keefe, Bruyette & Woods Brian Klock - Keefe, Bruyette & Woods: Dale for you, I guess I just wanted to double-check some of the numbers, I think you mentioned out of the $281 million of loans transferred to non-accrual in the quarter, you broke out the 29 relationships that were Western, Midwest and Texas. Do you have the dollar amounts that were by region as well of that $281 million?

I don’t have them right in front of me but you can sort of just based on the numbers, they probably would align up somewhat similar to that in terms of the dollars frankly, but –

I can tell you, $213 million came from the West and $50 million from the Midwest out of the $281 million. Brian Klock - Keefe, Bruyette & Woods: And you also mentioned that in the [inaudible] that 41% of the non-accrual loans are from the California local portfolio, that $800 million. Now within that $800 million portfolio do you have a breakout of how much of that is land versus how much has been vertical construction?

Most of it’s in some phase of vertical construction. There’s a couple hundred million that is in land, either raw land or entitled land. So the vast majority of what’s there, about three-quarters would be in some stage of vertical construction. Brian Klock - Keefe, Bruyette & Woods: And did you say that $800 million was evenly split between Northern and Southern California?

Well a little bit more in the South; 60% in the South, 40% in the North. Brian Klock - Keefe, Bruyette & Woods: Okay. And so I guess when we look at the other $1.5 billion or so that’s in the California commercial real estate line of business, what’s the level of non-accruals there and what are you seeing as far as the reappraised property values in the rest of the California business line?

The rest of that is that other segment of the residential development I referenced earlier, it’s the developers that are typically stronger that support the loans with a guarantee that have re-margining agreements and so forth and so those loans are generally performing pretty well. We have not seen in the case of those developers any particular fall off in quality. It is softer. There is some negative migration but there’s been no significant migration downward to a default status. There’s been a couple. But most of those as I said, have some level of re-margining agreement and they’re not only able to but are quite willing to step up and re-margin and we’ve seen that occur. So those values while they’ve declined substantially there have been a fair amount of equity put in those projects. It’s still a focus for us. We’re looking at it. It’s not to the same level as that $800 million chunk we’ve been talking about.

And obviously the numbers on the commercial real estate line of business for Western also includes non-residential and as Dale mentioned earlier, that’s performing just fine; non-residential commercial real estate. Brian Klock - Keefe, Bruyette & Woods: And I guess maybe within – obviously it’s a focus here for the quarter, has been the deterioration in residential construction because of obviously the issues in that sector, have you seen any sort of contagion into the permanent mortgage, the commercial real estate within your geographies that obviously the Southern California are in? How are your permanent commercial mortgage portfolios performing?

Well the overall – again, the other portfolios including that are continuing to perform quite satisfactorily. Its really and as you can see by the absolute level of non-accruals, inflows and charge-offs, its really why we keep beating on this issue, its still all around that $800 million residential development in California because the rest even today, with the softness that’s been around the real estate continue to perform satisfactorily so we’re not really seeing any particular issues at this point.

In fact or NPAs for our commercial mortgage book are down slightly from the prior quarter. Brian Klock - Keefe, Bruyette & Woods: Great, appreciate it. Thank you.

Your next question comes from Chris Mutascio - Stifel, Nicholaus & Company Chris Mutascio - Stifel, Nicholaus & Company: Beth if I could ask, maybe Matt’s original question perhaps a different way. I’ve looked at dividend payouts and the safety of those dividend payouts, one from a capital perspective which I though you answered very well, but also from an earnings perspective. And when I look at the quarter and if I were to back out the Visa gains I can get to an annualized run rate that I guess its debatable may or may not earn the dividend payout this year. My question would be when do you start looking at the earnings part of the dividend payout and when do we get to a point that hey this environment may be here for not just a quarter or two, but it could be three, four, five, six quarters down the road? Do you start looking at the earnings side of the equation on a dividend mid-year? Going into ’09? Are we still way off from that in determining what the earnings power of the franchise could be to support the dividend payout?

I guess I’d make a couple of comments. One is as I mentioned earlier we are comfortable with our capital position. In addition it’s not unusual in a cyclical environment such as we’re having related to the California impact to have a larger payout and that will mitigate as – our expectation is that that pressure will mitigate as we get toward the end of the year. So I think we’re comfortable with looking at it. Obviously we look at it from an earnings standpoint also importantly from a capital standpoint and really the transitory nature of the situation. If we get into a different environment where we’re talking about a deeper session, then you have to reevaluate things. But we have a lot of flexibility on the capital front from a lot of different perspectives that I mentioned earlier. Chris Mutascio - Stifel, Nicholaus & Company: So I take that by end of the year it would be a better timeframe in determining whether it’s just a cyclical issue or if it’s more sustainable than that?

Well I think that’s – we always are looking at updating every quarter as part of our process of looking at our quarterly results and our outlook for the future. That obviously factors into our thinking. Chris Mutascio - Stifel, Nicholaus & Company: Appreciate it; thank you very much.

One thing I’d like to mention there was a question earlier on the spread that we’re putting securities on, and if you look at – assuming that wholesale funding is what funded the securities purchases and again it depends on your analytics of how you do that, we’re talking about an 85 basis point spread today between the yield on the securities against the wholesale funded costs of those. So someone had a question earlier; that was the answer. Ralph Babb Jr.: I think there are no other questions so I would like to thank you all for joining us for our call today and for your continued interest in Comerica. Thank you very much.