Ralph W. Babb Jr. - Chairman and Chief Executive Officer Elizabeth S. Acton - Executive Vice President and Chief Financial Officer Dale E. Greene - Executive Vice President and Chief Credit Officer Darlene P. Persons - Director, Investor Relations

David Rochester - Friedman, Billings, Ramsey & Co. Matthew O'Connor - UBS Kevin St. Pierre – Sanford Bernstein & Co., Inc. Steven Alexopoulos - JP Morgan Gary Townsend - Hill-Townsend Capital Jeff Davis - FTN Midwest Securities Terry McEvoy – Oppenheimer Chris Mutascio - Stifel Nicolaus Carl Dorf – Dorf Asset Management Heather Wolf - Merrill Lynch Andrew Marquardt - Fox-Pitt Kelton Brian Klock - Keefe, Bruyette, & Woods Hunter Murchison - Deutsche Bank Don Dunn - Pioneer Path Capital

Good morning. My name is Marianne, and I will be your conference operator today. At this time, I would like to welcome everyone to Comerica’s Second Quarter 2008 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press * then the number 1 on your telephone keypad. If you would like to withdraw your question, please press the pound key. Thank you. I would now like to turn the call over to Darlene Persons, Director of Investor Relations. Darlene P. Persons : Good morning, and welcome to Comerica’s Second Quarter 2008 Earnings Conference Call. This is Darlene Persons, Director of Investor Relations. I am here with Ralph Babb, Chairman; Beth Acton, Chief Financial Officer; and Dale Greene, Chief Credit Officer. A copy of our earnings release, financial statements, and supplemental information is available in the EDGAR section of the SEC 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. 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’ll turn the call over to Ralph. Ralph W. Babb Jr. : Good morning. Our core operating earnings remain stable and the banking environment that continued to be challenging and volatile. Our capital ratios are stable and within our targeted ranges. Our second quarter earnings per share of 37 cents were impacted by a 21-cent after-tax charge related to an updated assessment of the timing of tax deductions on certain structured lease transactions. As expected, our net credit related charge-offs were similar to the first quarter. Net credit related charge-offs were $113 million. or 86 basis points of average total loans. We increased the provision for loan losses by $11 million from the first quarter to $170 million in order to reflect the continued residential real estate development challenges in California. We have been proactive in managing problem loans, which remain largely focussed in our California residential real estate development portfolio. Virtually all of the problem loans in that portfolio were independently appraised within the last 6 months with the appropriate charge-offs taken and additional reserves established. The balance for our loan portfolio continued to experience solid credit metrics. Excluding the effect of the tax-related charge to income on certain structured lease transactions, our net interest margin was consistent with our full-year outlook. Expenses remain well controlled with reduced personnel. On an annualized basis, average loans increased 4% compared to the first quarter, led by 8% growth in the Texas market, 5% growth in the Midwest market, and 1% growth in the Western market. Period-end loans declined about $600 million from March 31 to June 30 as we work to improve returns on capital. We had good growth in non-interest income in the second quarter with increased commercial lending fees, letter of credit fees, card fees, and foreign exchange income. On an annualized basis and excluding financial services division deposits and institutional certificates of deposit, non-interest bearing deposits increased 4% in the second quarter compared to the first quarter, while average core deposits decreased $586 million. Competitive and economic pressures explain the decline in interest bearing deposits. Customers also are finding attractive alternatives to bank deposits such as in Comerica Securities where there has been asset growth. We opened two banking centers in the second quarter and have planned to open 24 more in 2008. All of the new banking centers we open in 2008 will be in our high-growth markets. Recent industry headlines have focused on capital. At Comerica, we are optimizing our capital usage with particular focus on rationalizing our loan portfolio with the appropriate credit standards, loan pricing, and return hurdles. We also are reviewing expense reduction opportunities including those resulting from the rationalization of our loan portfolio. In addition, we plan to slow our banking center expansion program. We do have a substantial capacity to raise non-diluted capital. Preferred stock accounts for only about 9% of our total capital. Given our capital position and outlook, we are comfortable with our dividend at the present time. Looking ahead, we expect the national economy to grow slightly in 2008. With its energy sector booming and its housing sector relatively strong, Texas is likely to grow about 2 percentage points faster than the US in 2008. Reflecting structural problems in the auto sector and its severe housing problems, Michigan’s economy is likely to contract again in 2008, underperforming the national economy by about 3 percentage points, similar to the average shortfall experienced in the previous 5 years. Reflecting its severe housing situation, California is likely to modestly lag national growth in 2008 as it did in 2007. We will remain vigilant in managing our problem loans and our capital while working our way through this particular cycle of the economy. During these turbulent times, we will continue to focus on our customers and on delivering the outstanding service that has been a hallmark of our company for many years. And now, I’ll turn the call over to Beth and Dale who will discuss our second quarter results in more detail. Elizabeth S. Acton : As I review our second quarter results, I will be referring to slides that we have prepared that provide additional details on our earnings. Turning to slide 3, we outlined the major components of our second quarter results compared to prior periods. Today, we reported second quarter 2008 earnings per share of $0.37. This included a 21-cent per share charge related to an updated assessment of the timing of tax deductions on certain structured lease transactions. Net charge-offs, the net interest margin excluding the charge for certain lease transactions, and our capital ratios all were within our expectations. Turning to slide 4 in an overview of the financial highlights from the quarter, loan growth slowed as we worked to optimize capital and were selective in terms of new business in a very volatile and challenging economic environment. In fact, period end loans declined about $600 million from March 31 to June 30. We continued to have good loan growth in Texas as we leveraged the re-location of our headquarters in one of the best performing state economies in the country. Non-interest bearing deposits excluding the financial services division grew 4% on an annualized basis. As we expected, the net interest margin was 3.10% in the second quarter excluding the 19 basis points impact of the tax-related charge to income on certain structured lease transactions. Credit quality was relatively stable with continued weakness evidenced in the California residential real estate development portfolio. The rest of the portfolio continued to exhibit solid credit metrics as evidenced by the net charge-off ratio excluding the commercial real estate line of business of 35 basis points. Provision for loan losses for the second quarter was $170 million compared to $159 million in the first quarter, bringing the period end allowance to total loans to 1.28% compared to 1.16% last quarter. Dale will provide greater detail on credit quality in a moment. We continue to carefully control expenses. Salary expenses remain flat as headcount decreased by 113 people or 1% of total employees. Our capital position remains stable with the tier 1 capital ratio of 7.36% which is within our targeted range. Slide 5 outlines the various factors that impacted net interest income in the second quarter. The biggest impact was a $30 million non-cash charge to lease income reflecting the reversal of previously recognized income. This resulted from our reassessment of the timing of income tax cash flows on certain structured lease transactions. The charge will fully reverse over the remaining lease terms. Excluding this charge, the net interest margin was 3.10%. The margin decline from the first quarter, primarily reflected the planned larger securities portfolio and the reduced contribution of non-interest bearing deposits in a lower rate environment. Slide 6 shows non-interest income levels over the past several quarters. Second quarter non-interest income reflected positive trends in the C categories indicated on the slide. The $21 million gain on sale of Visa shares in the first quarter and the $14 million gain from the sale of Mastercard shares in the second quarter were reflected in net securities gains. Moving to the balance sheet in slide 7, compared to the prior year, average loans increased $2.6 billion or 5%, paced by an 18% increase in our Texas market. We continue to make steady progress toward our goal of achieving more geographic balance with markets outside of the Midwest now comprising 63% of average loans. As far as line utilization, loan commitments as well as draws under-commitments declined in the second quarter with the net effect of a decrease in line utilization to slightly below 50%. Slide 8 provides detail on line of business loan growth. All commercial businesses and private banking lines experienced growth in each of our major markets in the second quarter compared to the same period last year with the exception of National Dealer Services in the Florida and Western markets. On a linked border basis, average loans increased $515 million or 5% on an annualized basis due primarily to increases in middle market to $165 million, private banking $187 million, and technology and life sciences portfolio $102 million. This was partially offset by a $333 million decrease in the financial services division and a $61 million decrease in energy. Now, Dale Greene, our Chief Credit Officer, will discuss recent credit quality trends starting on slide 9. Dale E. Greene: Good morning. Credit quality remained relatively stable with the first quarter. Our biggest challenge continues to be the ongoing issues in 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 good credit metrics. Net credit related charge-offs were $113 million or 86 basis points of average loans in the second quarter, which was consistent with the first quarter. Net charge-offs included $73 million in commercial real estate line of business primarily due to the ongoing weakness in the California residential real estate development sector. I would like to point out, as you can see on the slide, that excluding the commercial real estate line of business, our net credit related charge-offs in the second quarter were 35 basis points of average loans compared to 31 basis points in the first quarter. The provision for loan losses was $170 million, an $11 million increase from the first quarter, due largely to the ongoing challenges in the residential real estate development, specifically in California. Credit metrics in Michigan deteriorated slightly from solid levels, and the Texas market continued to perform very well. Our watch loans increased modestly to $4.8 billion or 9.3% of total loans, up from 8.8% in the first quarter. Notably, the rate of increase in watched list loans slowed considerably in the second quarter. Non-performing assets were 144 basis points of total loans on foreclosed property, or 61 basis points excluding the commercial real estate line of business. Loans past due 90 days or more and still accruing of $112 million at June 30th increased $32 million from March 31st. This increase was primarily due to Michigan and California residential real estate development loans. These loans are in the process of being restructured, continue to pay interest, and are expected to continue to pay interest on a restructured basis. The allowance for loan losses was 1.28% of total loans, an increase of 12 basis points from the first quarter. The allowance for loan losses was 91% of non-performing loans. Comerica’s portfolio was more heavily composed of commercial loans, which in the event of default are carried on the books as non-performing assets for a longer period of time, than are consumer loans, which are typically charged off when they become non-performing. Therefore, banks with a heavier commercial loan mix in their portfolios tend to have lower NPA coverage ratios than do retail-focused banks. In addition, we have written down our non-accrual loans by 28%, as described on slide 10, and on slide 10 we provide information on the makeup of the non-accrual loans. Commercial real estate which consists primarily of residential real estate development loans comprise the largest portion of the non-accrual loans. By geography, half of the non-accruals are in the Western market. As far as granularity of non-accrual loans, there are 17 relationships totalling $243 million that aggregate to between $10 and $25 million each, and there are only two relationships over $25 million each. The average write-down in non-accrual loans was 28%. In the second quarter, we had $304 million in loans greater than $2 million transferred to non-accrual status. The commercial real estate line of business accounted for $188 million or 62% of these transfers to non-accrual. On slide 11 we provide a breakdown of net charge-offs by geography. Net charge-offs in the Western market, which comprised 52% of net charge-offs in the quarter, can be largely attributed to the residential real estate developer portfolio. The commercial real estate line of business accounted for $56 million of the Western net charge-offs. Net charge-offs for the Midwest which made up 37% of the total was primarily comprised of $20 million in middle market and $13 million in the commercial real estate line of business. There was a modest increase in Midwest charge-offs from very low levels as we have been dealing with challenges of the Midwest economy for the past several quarters. On slide 12, we provide a breakdown of net charge-offs by line of business. Charge-offs were consistent with the first quarter. The commercial real estate line of business accounted for $72 million or 65% of the net loan charge-offs and can be largely attributed to the residential real estate developer portfolio. On slide 13, we provide 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. At June 30th, about 50% of this portfolio consisted of loans made to residential developers secured by the underlying real estate. Geographically, the Western market and California primarily comprise 44% of the total portfolio. On slide 14, we have provided the geographic breakdown of the commercial real estate line of business net loan charge-offs over the last two quarters; 100% of these charge-offs were from residential real estate development loans. The rate of deterioration in the California residential development portfolio has slowed as is apparent in the stable level of net charge-offs in the quarter as well as fewer inflows of non-accrual loans and a stable watch list. As far as the Midwest, as you can see, the net charge-offs declined slightly this quarter as we have been working through the issues of falling home prices and slower absorption rates in this portfolio for several years, and in Texas, there were no charge-offs in the second quarter. In the commercial real estate segment, we transferred $188 million in relationships over $2 million to non-accrual loans in the second quarter, down from $233 million in the first quarter. Again, in the non-residential commercial real estate portfolio, we did not have any net charge-offs in the second quarter nor have we seen deterioration. The issues in California are centered in one area, the California local residential real estate developer portfolio, which is outlined on slide 15. Our residential real estate portfolio in California is comprised of two components. We had a group which focused on local smaller residential developers which built starter and first-time move-up homes and a group which focuses 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 $700 million in outstandings. This portfolio accounted for 38% of the bank’s total non-accrual loans and 97% of the Western market’s commercial real estate line of business net charge-offs of $56 million in the second quarter. Virtually all of these watch list loans have been independently appraised in the last 6 months with the appropriate charge-offs taken and additional reserves established. The average charge-off plus reserves for the watch list loans is 40% of the contractual value, which is similar loss severity to recent market transactions. These net charge-offs were more heavily weighted towards Northern California, driven by Sacramento in particular. We believe the issues have been identified and we have not done any new business in this segment for some time. Slide 16 provides a breakout by geography and loan type of the Western market local residential real estate developer portfolio. The properties are diversified geographically across the state with approximately 55% of our California exposure in Southern California and 45% in Northern California. The largest concentration is in San Diego at 19% of the portfolio. As far as project type, nearly three-quarters of the portfolio is classified in the vertical construction phase. However, in a significant number of these properties, only a few homes have been constructed while the remainder of the property has the infrastructure in place but remains vacant. On slide 17, we provided detail about how we are assessing and managing the residential real estate portfolio. Virtually all of the watch list loans within our California residential real estate portfolio have been independently appraised within the past 6 months. We have charged the loan down to the independently appraised value. In addition, we have provided additional reserves of 10% to 20% of the loan’s book value. Earlier this year, we transferred the entire California local developer portfolio to our special assets group. We continue to proactively manage the workout process determining the best course of action on a case by case basis. As outlined on the slide, if a property is performing albeit with sales occurring at a slower rate than originally expected, we may continue to work with the builder through the build-down. In circumstances where there is no sales activity and the likelihood of sales picking up in the near term are slim, we are exploring opportunities to bundle and sell exposure as appropriate. There are a lot of interested buyers, and we are actively pursuing this alternative. And finally in some cases where the builders have walked away or are uncooperative, we are foreclosing or seeking receivership. 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 9% 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, and home equity delinquency is relatively stable. Slide 19 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 $150 million in the first 5 months of 2008 and over one-third or $1 billion since the end of 2005. 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 down $3 million and we had a small recovery in this portfolio in the second quarter. Performance of this portfolio is stable. To conclude, I would like again to say that we are clearly focussed on the credit issues in the residential real estate development portfolio. Based on recent independent appraisals and market conditions, we believe that we have taken the necessary charge-offs and reserves. Outside of residential real estate development, all of our business lines are generally displaying solid credit quality. We have not seen material deterioration in other sectors as evidenced by the relatively stable credit metrics we have continued to show in our commercial and consumer loan portfolios over the past year or so. And now, I’ll turn the call back to Beth. Elizabeth S. Acton: Turning to slide 20, average non-interest bearing deposits excluding financial services division grew $97 million or 4% on an annualized basis. Non-interest bearing deposits account for about 24% of our average total deposits. Also savings deposit balances grew $47 million in the second quarter. Average core deposits which exclude institutional CDs, in the financial services division of $33.2 billion, decreased $586 million in the second quarter when compared to the first quarter. Average core deposits were up over 2% year over year. The decline in interest-bearing deposits in the second quarter was due to the competitive and economic environment. In addition, customers are findings attractive alternatives to bank deposits such as Comerica Securities where we have had asset growth. On a geographic basis, excluding finance, institutional CDs, and the financial services division, annualized average deposits in the second quarter when compared to the first quarter were up 3% in Texas. On slide 21, we’ve outlined our plan to optimize capital. As evidenced by the decline in loan commitments and outstandings at the end of June, we have already made headway in rationalizing assets. We’ve increased our governance on loan pricing to ensure transactions meet higher return hurdles. All relationships need to meet the requirement of having ancillary business including shared national credit transactions, which in the past we have given 18 to 24 months to obtain non-credit business. Furthermore, we remain very selective from a risk management perspective requiring appropriate adherence to credit standards and proactively managing through the credit cycle. As far as expense control, we have consistently reduced personnel over the past several years and expect this to continue in conjunction with the loan portfolio rationalization. In addition, we will slow our banking center expansion and consolidate offices where possible. For example, in the second quarter, we consolidated 6 banking centers, closed 4 international trade services operations offices, and closed a Cleveland middle market loan production office. Given our capital position and outlook, management is comfortable with our dividend at the present time. Turning to slide 22, we believe we have a solid capital position as evidenced by the fact that we remain within our targeted ranges and well in excess of regulatory minimum guidelines. In addition, the quality of our capital is strong as preferred stock accounts for a relatively small percentage of our capital base. Therefore, we have substantial capacities to raise non-diluted preferred stock. We do not have issues that have resulted in capital calls at some other banks such as a rapidly deteriorating credit outlook, off-balance sheet assets that had to be brought on to the balance sheet, mark-to-market events on certain asset classes, or substantial charge-offs on large consumer exposures. In addition, our capital optimization plan will help us further strengthen our capital ratios throughout the balance of 2008 and into 2009. Slide 23 updates our expectations for the full year 2008 compared to full year 2007. In conjunction with our capital optimization plan, we expect slower average loan growth for the remainder of 2008. We now anticipate average loan growth for the year to be in the low single-digit range with loans declining over the remainder of 2008. Our net interest margin outlook for the full year has increased to about 3.15%, excluding the 5 basis point full-year impact of the second quarter non-cash charge to lease income. Our full-year outlook for credit quality is for net credit related charge-off of between $425 and $450 million. We expect a stress in our residential real estate development market to continue. We formerly communicated our credit outlook in terms of net charge-offs as a percentage of average loans, but given the outlook for shrinking loans, we thought it best to be more exact in our guidance on loan charge-offs. 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 capital ratio within our targeted range. Now, we’d be happy to answer any questions you may have.

[Operator Instructions]. Your first question comes from David Rochester of Friedman, Billings, Ramsey & Co. David Rochester - Friedman, Billings, Ramsey & Co.: Dale, just real quick, could you update us on the size of the watch list; I know you mentioned that growth had slowed this quarter, but do you have a number? Dale E. Greene: We just expressed that in percentage terms so you can calculate it, but it is 9.3%, up from 8.8%. I feel pretty good about that because that rate of change actually slowed considerably from the prior quarter, and obviously there’s a fair amount of the real estate in that that we’ve been talking about. David Rochester - Friedman, Billings, Ramsey & Co.: And in terms of that increase, what was that increase primarily? Was that just more of the real estate or did you have some other things in there? Dale E. Greene: It was mostly real estate, it is the migration, and as we’ve talked about it’s primarily that California local residential developer portfolio. David Rochester - Friedman, Billings, Ramsey & Co.: I know you fully reappraised that book over the past two quarters, but I know regulators are trying to get banks to keep those valuations current; so would you expect you’d have to reappraise that portfolio again to make sure that everything is up to date, and if so, should we be looking for that event in the fourth quarter or maybe the first quarter next year? Dale E. Greene: Well, we’ll reappraise periodically based on market conditions. I wouldn’t make a blanket statement that we will go across the board and reappraise everything, but as situations deteriorate, whether it’s the local economy, whether it’s specific projects, whether it’s particular environment in some markets, that will all have a bearing on the amount of reappraisal, but we’ll keep it very current and we’ve been doing that now for a while. David Rochester - Friedman, Billings, Ramsey & Co.: Just a quick question on capital, I know in the last press release you’d mentioned that you were looking to maintain a tier 1 common capital ratio within the 650 to 750 range. You changed the language a little bit this quarter to tier 1 capital ratio with a 725-825 range. It sounds like you guys are still relatively comfortable with your capital and your dividend today. Why change the language there and the ratio that you’re focusing on for your outlook? Elizabeth S. Acton: Actually we focus on both tier 1 common as well as tier 1 ratios. There is a lot more focus from outsiders to other banks looking at tier 1, so we’ve given that a little more prominence in the slides today, but we do focus on both tier 1 common and tier 1, and both of them will be within our targets that we previously enunciated. David Rochester - Friedman, Billings, Ramsey & Co.: I know you reiterated again you have the capacity to raise preferred. Given the deterioration we’ve seen in the market and the demand for this paper, are you really seeing economical opportunities to raise this kind of capital at this point? Elizabeth S. Acton: As I indicated in the slides, at the present time we do feel comfortable with our capital position, so it’s not like we have any sense that we need to go out and do anything immediately. David Rochester - Friedman, Billings, Ramsey & Co.: And in terms of opportunities that you’re seeing out there, you had mentioned that this is a lever that you guys can pull. Is this really an economical lever for you guys if you over the next 6 to 9 months felt like you wanted to either defend the dividend or just bolster capital levels? Elizabeth S. Acton: I think we obviously regularly monitor the markets, and we might consider an opportunity, but as I mentioned, we do feel comfortable with our capital position, and frankly, our efforts will be to further strengthen those ratios through the loan rationalization plan that I talked about. David Rochester - Friedman, Billings, Ramsey & Co.: Just one last one, I won’t take up any more of your time. The shared national credit portfolio, could you update us real quick on the size and the delinquencies in charge-offs on that this quarter? Elizabeth S. Acton: The shared national credit portfolio was down $400 million from the end of March to the end of June, and the credit quality metrics still on a relative basis, relative to the rest of the total portfolio, continues to be better. David Rochester - Friedman, Billings, Ramsey & Co.: Have they changed it all in terms of where they were in the first quarter? Have we seen an increase in delinquencies in charge-offs there? Elizabeth S. Acton: A little rise, mostly focused to the extent that our shared national credits in the residential real estate space.

Your next question comes from the line of Matthew O’Connor of UBS. Matthew O'Connor - UBS: You touched upon it a little bit in your prepared comments in terms of the deposit trends, but can you just flush out a little bit more the decline in period-end deposits; one, how much of that might be seasonal and is that a good starting point going forward? Elizabeth S. Acton: I think we feel good about the non-interest bearing balance situation in the second quarter. We had had actually very robust growth in the first quarter, so we saw a little more muted aspects of that pretty competitive marketplace pricing-wise, and also, as I mentioned, the alternatives out in the market away from deposits have become much more attractive, and so, as I mentioned, Comerica Securities saw a nice increase in assets in the second quarter. And also, if you look at our balances today in the second quarter versus a year ago, we’re still up from both levels really across most of the business lines and across the market, so it’s hard to diagnose one quarter what it makes, but I think we feel good about year over year and the year to date progress. Ralph W. Babb Jr.: It’s really an effect on what you’re willing to pay on the pricing on the term retail CDs, and it’s been a very competitive market in some of our markets. Matthew O'Connor – UBS: Okay, and obviously, shrinking the loan book is going to help, but as I look at the mix of your funding, there’s been a pretty big increase in wholesale borrowings, both linked quarter and year over year, so I’m just wondering about the outlook for deposits. Do you it’s going to be stable at the June 30th levels or what do you expect on that front? Elizabeth S. Acton: One of the things impacting deposit levels certainly year over year is related to the financial services division, and I do feel good about the fact that we’ve had relative stability in those balances over the last 6 months, and to the extent we worked through the housing issues. At some point, that will be frankly a positive. The additional thing I wanted to mention on the funding side is, as we had indicated in the first quarter, we in connection with our move to Dallas joining the FHLB, Federal Home Loan Bank in Dallas and had taken down $2 billion in the first quarter, and we’ve increased that to $4.5 billion in the second quarter, and that’s 3- to 6-year kind of funding at very attractive levels and that’s been a nice fit into our maturity profile, so that’s been a positive in our funding aspects too. Matthew O'Connor – UBS: That makes a lot of sense. What’s your remaining borrowing capacity? Elizabeth S. Acton: We have multi-billion capacity left; so there’s certainly more in excess of what we’ve already borrowed. Matthew O'Connor – UBS: And in just shifting gears to the capital, I know the previous callers asked some questions here. It’s such a balancing act, I think, for you guys because you have a lot of common equity, but maybe a little bit light on the other tier 1 capital component. With the market practically being shut to raise high bridge or preferred, how do you balance that into the dividend equation and what you’re thinking in terms of the balance sheet? Elizabeth S. Acton: Both our tier 1 common as well as our tier 1 ratios remain within our targets, certainly well in excess of regulatory minimum. And in addition, other measures you look at, tangible common equity ratio of 7.47% is very strong, and so as I said, we are comfortable with our present capital position. Ralph W. Babb Jr.: Which is a good position to be in because we don’t have to do anything right now.

Sanford : Kevin St. Pierre – Sanford Bernstein & Co.: Dale, of the $113 million in net charge-offs in the quarter, I was wondering if you could give us a breakup between write-downs of non-accruals versus actual realized losses? Dale E. Greene: Well, the vast majority of what we will take in charge-offs would be against that non-accrual book. There would be a little in some of the other categories, but most of what we would charge-off would be in the non-accrual book or moving to the non-accrual book. Kevin St. Pierre - Sanford Bernstein & Co.: So, as we look at connecting the dots between the increase in non-accruals versus the forward guidance for charge-offs over the next couple of quarters, it wouldn’t be correct to look at a roll forward if non-performance is being the drivers of next couple of quarters charge-offs? Dale E. Greene: No, I mean that’s a factor you need to look at that in terms of assessing charge-offs, but we take things to non-accrual somewhat conservatively, perhaps even if it’s well secured in the process of collection, but that collection could be a ways out, we’ll move it non-accrual. Clearly if it hasn’t paid interest or principal in 90 days, we’ll move it to non-accrual, so we’re pretty focused on moving things when they need to move and working it from there and moving it to our special assets group. Kevin St. Pierre - Sanford Bernstein & Co.: And on the 40% average write-down plus reserves on the watch list in the Western commercial real estate business, I was wondering if you could tell us what that level was last quarter? Dale E. Greene: It’s not commercial, it’s the residential real estate, the local developer portfolio, and it would probably be somewhere in that range. We would have written them down to probably 71% or 72%; it would probably be a very similar number. We’ve continued as we’ve gotten appraisals in to obviously take the charge-offs and provide incremental reserves, and those appraisals by and large as we’ve gotten them look like prior appraisals we’ve received in the prior 6 months; so we’ve kind of been in a pretty good position of having those numbers be above at that level. Elizabeth S. Acton: And I think we should make a distinction. When we talk about our total non-accrual book of $730 million being charged down 28%, that’s just the non-accruals. When we reference the 40%, which includes charge-offs as well as reserves on the residential real estate developer portfolio in California, that’s on the watch list, so that includes the non-performers but includes also the special mention and the sub-standard category stuff. Kevin St. Pierre - Sanford Bernstein & Co., Inc.: And then for Beth and Ralph, approaching the dividend question from a different direction. With EPS of 58 cents or so this quarter, if we exclude the lease charge and with the expectation for comparable net charge-offs over the next couple of quarters, the dividend coverage is thin to say the least. Is there any feeling or could one come at this just saying that your dividend is just too high and that over the past several years the dividend has been increased based on what might have been unsustainable levels of earnings and couldn’t we argue that your dividend is too high and that your pay-out ratio can take quite a while to come down? Ralph W. Babb Jr.: It is not unusual in a downturn in the economy to see pay-out ratios go up to high levels, and as we mentioned earlier and Beth mentioned based on our current outlook and the things that we’re doing to not only rationalize the portfolio, but we are still booking new business on the terms that we talked about as well as re-pricing business, which in the industry today risk pricing is coming back, which is important, and that was reflected as Beth was talking about the net interest margin improving over what was previously forecast. So given our current outlook is the reason we feel comfortable with where we are today. Elizabeth S. Acton: And I think if you look at it, really we’ve had a confluence of us getting to the bottom of our margin, and as we look forward, we feel like there will be improvement coming over time because loan spreads are improving; the deposit rates aren’t any lower, so the deposit environment will be okay; we’re optimizing really the relationship approach we have to customers to ensure we’re maximizing returns for those; and the real estate issues will start to fade as we look into next year, and this concern about commercial contagion spreading to other parts of our commercial portfolio, we’re not seeing; and we’ll continue to obviously control expenses. So there are a lot of good factors looking out into the future that will bode well, I think, as we move forward.

Your next question comes from the line of Steven Alexopoulos of JP Morgan. Steven Alexopoulos - JP Morgan: Just a followup; there’s a lot of capital questions, for a couple of clarifications. I guess we’ve listened to the “have room for the non-diluted capital” and that you don’t want to provide any forward-looking comments there, but if we look back even at the prior quarter or two quarters, can you just give us some color as to why we haven’t seen anything yet. Has it been the terms? Just trying to gauge what’s occurred over the past quarter or two there. Elizabeth S. Acton: We do regularly monitor the markets obviously we’re in, and we might consider an opportunity, but frankly we don’t feel compelled. Our capital ratios are stable. We’ve indicated to you all in the slides today that we have a plan to rationalize assets and to move forward in a manner that will optimize and maximize the return on the capital that we’re using into the next year. And so it just doesn’t feel like we have to go out and rush out and do something. And our capital ratios were stable in the quarter. And as I mentioned with the loan rationalization already starting to work, we thought, in the second quarter, we’ll see those ratios begin to improve in the succeeding quarters this year. Steven Alexopoulos - JP Morgan: Maybe just two quick questions for Dale; can you give some color on the performance of the dealer finance business in the quarter? Do you see any increase in pressure there? And secondly could you give us the refreshed loan to values in the residential construction book? Dale E. Greene: Dealer continues to perform extraordinarily well. We have just gone through a review of the dealer business given everything that is going on in the industry as we always do. That portfolio is carefully monitored, heavily controlled; we have a very unique back office monitoring system. Obviously, we do the audits and everything else everybody else does. Seventy percent or so of our book is all flooring. We deal with top tier dealers; that’s why we haven’t had any problems in quite some time. We will curtail units as most of what level we have now are 2008 units with some ’09s coming in. We’ll curtain if the unit gets a year old fairly quickly. So that business continues to do very well. In terms of the commercial real estate portfolio, I think, you were asking about the loan to values there have been, particular such that we’re going to these fields would have a fair amount of equity, are still in the 70%-75% range loan to value. These loans are typically guaranteed. These loans are typically filled with re-margining agreements. These are fairly well-to-do developers in that segment. We’ve seen no spillover issues from the local residential developer portfolio. So that continues to perform very well as well. Elizabeth S. Acton: And we saw no charge-offs in that during the second quarter. Dale E. Greene: So that looks pretty good for right now at least, and we’re pretty optimistic that can continue.

Your next question comes from the line of Gary Townsend of Hill-Townsend Capital. Gary Townsend - Hill-Townsend Capital: You’ve answered most of my questions. Just was noticing on an adjusted basis, your dividend pay-out ratio is about 92% of your operating earnings in the quarter. Can you just go through why you feel that that level of pay-out is prudent and why the dividend should be sustainable going forward? Ralph W. Babb Jr.: As I mentioned earlier, I think it’s not unusual to see pay-out ratios go up when you have a downturn in the economy especially in the banking sector, and given our current outlook and the things that we’ve discussed earlier as to where we think the various components are moving, we’re comfortable where we are today especially at this point in time given our capital position and our ability to raise additional capital if needed; that’s always subject to the market, and the market goes up and down, but that’s why we’re comfortable where we are today, and we will continue to manage that as we move forward as we are rationalizing the loan portfolio, improving pricing, improving returns there, and looking at the various businesses we have. As Beth mentioned earlier, we have a plan in place to improve profitability across the board.

Your next question comes from the line of Jeff Davis of FTN Midwest Securities. Jeff Davis - FTN Midwest Securities: Have you all been contacted by the FDIC with regards to Comerica being approved to acquire or, maybe better said, assume deposits from closed institutions or institutions that will be closed in the coming year, and if so do you have any interest in entering into transactions like that? Ralph W. Babb Jr.: When opportunities arise, it depends where they are and what markets they are and does it add to the strategy that we have, we would always look at that as well as look at where we are currently with the progress that we’re making and the various strategies that we have in place as we mentioned earlier, so there’s really not a pat answer for that one. It just depends on what comes up when. Jeff Davis - FTN Midwest Securities: Ralph, have they called to say Comerica is well capitalized, you’re on the approved list; if we got something, we want to show it to you. Ralph W. Babb Jr.: Communications with the regulators are confidential, and we wouldn’t comment on those kinds of communications, and I say that in a positive and not a negative way.

Your next question comes from the line of Terry McEvoy of Oppenheimer. Terry McEvoy - Oppenheimer: The Midwest market was the one market where the provision was about, call it, half of charge-offs which I found a little surprising given your comments earlier about the overall operating conditions in the Midwest. Could you just talk about that please? Dale E. Greene: A couple of things, and as we’ve indicated, as it relates to primarily to, for example, the local residential developer portfolio, the Midwest, but Michigan in particular, has been in a recession for 4 or 5 years. We haven’t made any new loans in certainly the real estate side in quite sometime. We’ve been working those down. We find them to be now, those loans, in terms of the migration, relatively stable, still problematic, but we believe we continue to take charges as appropriate and we believe the reserves are also appropriate based on what’s going on in that market today. So we got a chance to really work through those. There are a number of very good developers and projects still going on in Michigan that we are working on, older homes, and there still is some positive absorption and obviously it all is dependent upon the price. We’ve already commented on our middle market type of portfolios particularly the auto pieces and we’re bringing those down which on the auto supplier side, which I think has been a good strategy for us and we haven’t had any issues there at all from the charge-offs. And the loans we typically do there as we do in other middle market portfolios are generally well secured, typically have personal guarantees and so forth. So the Midwest, while it is still challenged, is in fact stable, and I would argue that what we’ve done there has worked very well. So that’s really the answer to the question. Terry McEvoy - Oppenheimer: And then just one last question for Beth. The margin in the Midwest, it appears that that non-cash lease income charge happened in the Midwest region. If you backed out that charge, do you know what the margin would have looked like? Elizabeth S. Acton: I haven’t split it up frankly by market, but you’re right, it is in the Midwest; and as I said overall for the company, it was worth 19 basis points. I don’t have the specific related to the market.

Your next question comes from the line of Chris Mutascio of Stifel Nicolaus. Chris Mutascio - Stifel Nicolaus: Dale, I had a question for you, if you can help me out, and I think it’s probably on the heels of the previous question. I do appreciate the color on the commercial real estate portfolios and residential construction. When I look at slides 11 and 12 of the presentation, it does look like the Midwest from a charge-off perspective is becoming a bigger and bigger piece of the overall pie of net charge-offs, and clearly I think that’s more of the commercial than the commercial real estate. So you are seeing that start to move up. If I look out more than just the next six months of the year, if I look out into ’09, could we be in a phase where we’re seeing some stabilization in the commercial real estate at the time we’re still in the early stages of commercial, the CNI portfolio, starting to deteriorate. Dale E. Greene: We could, but frankly we’re not seeing it. If you look specifically at the Midwest, those tend to be 2 or 3 middle market deals, that’s the conclusion actually of one deal that we’ve been working through with for sometime; so that’s now behind us, so there’s a charge-off that’s reflected in there for that. And then there are a couple of other deals which really I would describe them as more of one-time events; so while it pops up, and there will always be from time to time those kinds of events, a deal here or a deal there, where there’s something that’s gone astray, perhaps it’s a fraud, perhaps it’s just a troubled situation, or poor performance. Again, when you look at the portfolios in total and you isolate the Midwest in particular, again, I feel very good about where we are in terms of the quality of that portfolio. That migration is pretty stable, slightly down, but still pretty stable. I am not foreshadowing any particular concerns there at all, certainly not the middle market site, and frankly our other portfolios there have performed very well. So in this case, it’s middle market and it’s a couple of loans, and we’re working through those. Chris Mutascio - Stifel Nicolaus: Thank you. Appreciate the color.

Your next question comes from the line of Carl Dorf of Dorf Asset Management. Carl Dorf – Dorf Asset Management: One quick one. Can you tell me how are you guys carrying your Fannie and Freddie investment securities? Is it available for sale or held to maturity? How do you carry them? Elizabeth S. Acton: We own mortgage-backed securities guaranteed by Fannie and Freddies in our available for sale portfolio. We don’t own debentures, we don’t own straight debt of Fannie or Freddie or preferred equity or anything. These are mortgage-backed securities that have been unscathed really through all of the headlines. The good liquidity and health, as I said in the available for sale portfolio, AAA rated, and performing consistent with our expectations.

Your next question comes from the line of Heather Wolf of Merrill Lynch. Heather Wolf - Merrill Lynch: Dale, just a quick followup to a previous question. The three credits that you were talking in the Midwest, does that also account for the increase in the non-accrual CNI loans? Dale E. Greene: A couple of cases they were moved to non-accrual and charge-offs taken, so I would say that the majority of that increase would be related to a couple of those credits. Heather Wolf - Merrill Lynch: Okay. And what about the increase in the term commercial real estate non-accruals? Dale E. Greene: Again, those are just the loans that we’ve been working for sometime where there’s been an amortization schedule established and where there’s just been such weakness or lower absorption rates, but they just need to be moved to non-accrual status. Heather Wolf - Merrill Lynch: Also, which products drove the increase in the 90 days past due? Dale E. Greene: Those would be primarily the residential real estate local developer portfolios, primarily in Michigan and California. We will from time to time have those particularly in a market like this. Those are paying interest, and we’re in the process of restructuring; in a couple of cases, actually those restructurings have closed. Restructurings in this environment are far more complicated and take longer to achieve, and that’s the real reason that that popped up. Heather Wolf - Merrill Lynch: Beth, I noticed that you guys took another $14 million in Mastercard gains. How much more do you have left of that? Elizabeth S. Acton: We have a small number of shares left. At present market value, this is about $2.5 million, and it’s not free to trade until 2010.

Your next question comes from the line of Andrew Marquardt of Fox-Pitt Kelton. Andrew Marquardt - Fox-Pitt Kelton: Beth, in terms of the non-interest margin, can you help me understand what the underlying assumption is in terms of retail and escrow balance is for the outlook? Elizabeth S. Acton: You will find a slide on the financial services division in the appendix; we have kept the outlook we had in April which was $1.7 billion to $1.9 billion in terms of DDA. We were right in the middle of that range in the second quarter, and so our expectation would be in that range for the full year average. Andrew Marquardt - Fox-Pitt Kelton: In terms of the optimizing capital discussion, in terms of the expenses being pulled back, can you give us any color in terms of how much you think you can actually save from that? Elizabeth S. Acton: At this juncture we’re really working through the details. We’re just underway with this and have articulated to you all the $2-$3 billion level in terms of overall reduction over the next 12 months. So we’re really working through the people aspects and the expense related to it as we speak. So we’ll be able to provide more color on that really probably in January when we give our outlook for ’09.

Your next question comes from the line of Brian Klock of Keefe, Bruyette, & Woods. Brian Klock - Keefe, Bruyette, & Woods: I think a lot of my questions have been answered to this point, but I think I would just follow up on the last question, Beth. I am not sure if you have, for the second half of ’08, an idea of headcount reductions planned, or is there something you are still working through as you just mentioned? Elizabeth S. Acton: We have a culture here at Comerica that continues to find ways to do things in a more efficient fashion. If you look at our asset growth over the last 4 or 5 years, it has been significant and yet our headcount in fact is down, and that’s even with adding 95 new banking centers during that time. So it’s something we manage as part of our planning process particularly; so even when we put forward what we think headcount is going to be in our planning process, we’re very diligent in how we actually make those replacements or additions. In fact, we have, you might call it a bit of a bureaucracy, but it’s meant to be that way; when people want to add new people or replace new people, it has to come into our management policy committee for approval just to make sure we’re really serious about it and that it makes sense. So we don’t set our targets, it’s not like we’re going out and saying we’re going to have an across-the-board expense kind of program with fancy acronyms. We manage this stuff on a day-to-day basis, and that’s how we’ll carry it out over the next 12 months. Brian Klock - Keefe, Bruyette, & Woods: If I look at the personnel expense in the first and second quarter, actually you do have the headcount reductions in there, sort of FICA and FUTA, highly compensated employee expense in the first half of the year, so should we expect the run-rate for the third and fourth quarter to be lower than the $250 million that you’ve booked in the second quarter. Elizabeth S. Acton: What I’d like to say is, I guess I’ll address it in total in terms of expense. Our expense generally speaking was pretty flat for the first 6 months of the year versus the first 6 months of last year, particularly if you exclude the provision for off-balance sheet lending. And we have given an outlook that the expenses full year in ’08 will be slightly down from low single digits from ’07. So I think you can, based on the math, assume that the run-rate for total expenses in the second half of the year will be a little less.

Your next question comes from the line of Hunter Murchison of Deutsche Bank. Hunter Murchison - Deutsche Bank: Your net charge-off guidance is essentially flat for the second half of the year compared to the first half of the year, and I guess with continued home price decline and other economic pressures mounting, could you just expand on sort of what gives you comfort with that guidance. Dale E. Greene: I think the main driver of that is related directly to what we’ve been talking about on the residential real estate developer side in total. We haven’t made any new loans in that category for quite some time. Therefore, we’ve been able certainly to get our arms around the portfolio. We’ve been able to take action to monetize where we can and we’ve obviously adjusted ratings, charge-offs, and reserves appropriately. As we indicated earlier, we’re getting very current appraisals on distressed properties and we talked about that earlier. So, my view is, and we didn’t talk specifically about it or mention this in the presentation, we’re going to take a look at our ability to sell off some of the residential real estate developer assets here in the next few quarters, and we’ll see what that brings to us. And I think we’ve written those down with reserves to a point where based on what we’ve seen in the market, who knows, but we may be able to sell something in that range. So given all of that I think we’re going to continue and we’re definitely going to bring those loans down, and given that there will still be some softness in some of the other portfolios, but not to any material extent, we feel pretty comfortable about the level of charge-offs, and we are recognizing still that the provision will be in excess of charge-offs for at least the next few quarters.

Your next question comes from the line of [John Dunn of Pioneer Path Capital]. John Dunn - Pioneer Path Capital: Thank you for taking the question. My question on the net charge-off guidance is answered, but just overall, your reserve of 1.28% is pretty below peers, and I know we’ve talked about it a little bit, but what justifies such a big disparity between you and peers? Dale E. Greene: I can talk only about ourselves. The fact of the matter is as I said earlier we’re much more of a commercial organization than many of what we see. We only have 9% of our book in retail and that does have an impact as discussed. We’ve written our loans down contractual to about 72% on non-performers, and frankly, our real estate piece is even lower than that. And if you look at what’s left in the NPA category after we talked about very heavy discounting based on appraised values of real estate, we’ve got a portfolio of non-performing assets that is secured, supported by guarantees, monitored very carefully, and so forth, all of which is in our workout area where people have a lot of experience working through those issues. So, we feel that we’ve done a good job of managing the portfolios that are in NPA, but with that said and with our charge-off outlook, I still indicated that we will probably and most likely continue to build reserves over charge-offs. John Dunn - Pioneer Path Capital: You guys have any level where you think an appropriate year-end reserve level is? Dale E. Greene: Again, it’s a quarter by quarter analysis; it’s a very disciplined and an in-depth process, so I would hesitate to guess at this point where I think it will be. We’ve given our charge-off estimate and again we will in fact provide reserves above that level, but again, we’ll look at it as we always do every quarter.

At this time there are no further questions. Mr. Babb, do you have any closing remarks? Ralph W. Babb Jr.: I just want to thank everybody for joining us today and your continued interest in Comerica. Thank you very much.

Thank you for participating in today’s conference. You may now disconnect.