Darlene Persons – Director Investor Relations Ralph Babb – Chairman and Chief Executive Officer Dale Green – Chief Credit Officer Beth Acton – Chief Financial Officer Analysts : Terry Mcevoy – Oppenheimer & Co. Michael Mayo – Deutsche Bank Securities Steven Alexopoulos – J.P. Morgan Brian Klock – Keefe, Bruyette & Woods Matthew O'Connor – UBS [Paul Connelly]

At this time I would like to welcome everyone to the Comerica fourth quarter 2008 current earnings conference call. (Operator Instructions) Ms. Persons, you may begin your conference.

Good morning and welcome to Comerica’s fourth 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 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 own 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’ll turn the call over to Ralph.

Economic conditions deteriorated rapidly in the fourth quarter. Mounding job losses in an economy headed deeper into recession have dampened business and consumer confidence. We have stayed close to our customers during this incredibly tumultuous phase of the economic cycle, a testament to the skill and experience of our people and our strong focus on relationships. Our capital position is strong. Our Tier 1 capital ratio is estimated to be 10.67% at December 31. In addition, the equality of our capital is solid as evidenced by our Tier 1 common capital ratio of 7.08% and a tangible common equity ratio of 7.21%. Within this uncertain economic environment we are working diligently to leverage our strong capital, which was enhanced by our participation in the U.S. Treasury Department’s capital purchase program. With the appropriate pricing and credit standards in place we are focusing our lending efforts on new and existing relationship customers for whom we serve as trusted advisors. This includes small businesses, middle market companies and wealth management clients in Texas and California. The additional capital also enables us to support the battered housing market through our purchase of mortgaged back government agency securities. We also continue to control our expenses in this environment with several initiatives to streamline operations and leverage technology. We have reduced our workforce by about 5% since the end of 2007 and expect to reduce it another 5% largely to be completed by the end of the first quarter. In addition, we are freezing salaries in 2009 for the top 20% of our workforce. We also plan to slow our banking center expansion program and will continue to reduce our capital expenditures and discretionary expenses. Comerica customers will not be affected by our expense reduction initiatives including the workforce reductions. They will continue to benefit from the experience and expertise of relationship manager in all of our major markets. Our focus on capital and on expense controls weighed on our quarterly results. Fourth quarter earnings were impacted by increased severance costs of $0.12 and by our participation in the treasury’s capital purchase program $0.11. Our credit cost remains stable even as the economy continued its rapid deterioration in the fourth quarter. We monitor the performance of our customers in this environment very closely by conducting the appropriate credit quality reviews, risk rating migration analysis and stress testing. We aggressively manage our problem loans by moving them to our workout area at the first sign of stress. We believe we are staying ahead of the issues. Our strong focus on credit is evidenced by the continued reduction of exposure to California residential real estate development and the automotive industry given the challenges these sectors continue to face. We have continued to provide for loan losses substantially in excess of charge-offs to reflect the current economic environment. The net interest margin declined 29 basis points from the third quarter reflecting the negative impact of three Federal Reserve rate cuts totaling 175 basis points in a challenging deposit pricing environment, partially offset by improved loan pricing. Average loans, excluding the Financial Services Division, decreased 1% on an annualized basis when compared to the third quarter reflecting reduced demand from customers. This is a marked improvement over the 7% decrease in average loans we had experienced in the third quarter. Year-over-year average loans, excluding the Financial Services Division, were up 6% including 14% in our Texas market, 6% in our western market and 3% in our Michigan market. On an annualized basis, non-interest bearing deposits, excluding the Financial Services Division, increased 7% from the third quarter and were up 9% from the same period last year. We opened 15 new banking centers in the fourth quarter, seven in Texas, six in California and two in Arizona. All of the 28 banking centers we opened in 2008 were in our high-growth markets. We plan to open significantly fewer news banking centers in 2009. Our action plan is to continue to focus on credit quality and expense controls while growing new and existing customer relationships. All of this we believe will continue to serve us well in this difficult economic environment and in the future. And now I’ll turn the call over to Beth and Dale who will discuss our fourth quarter results in more detail.

As I review our fourth quarter results, I will be referring to slides that we have prepared that provide additional details on our earnings. Turning to slide three, we outline the major components of our fourth quarter results compared to prior periods. Today we reported fourth quarter 2008 diluted earnings per share of $0.02. This included a $0.12 per share severance charge as part of our workforce reduction initiatives as well as $0.11 per share related to dividends payable on our preferred stock issuance under the treasury’s capital purchase program. Our capital position is strong. The Tier 1 capital ratio is estimated to be 10.67% at December 31. In addition, the quality of our capital is solid as evidenced by our Tier 1 common capital ratio of 7.08% and a tangible common equity ratio of 7.21%. Slide four provides the after-tax impact of certain items on income including the severance and preferred dividends I just mentioned. In addition, related to the repurchase of auction-rate securities, we had a positive net impact of $8 million, which I’ll provide further detail in a moment. Slide five provides an overview of the financial results from the quarter. Average loan outstandings declined 1% on an annualized basis, excluding the Financial Services Division. This compares favorably to the 7% decline in loan outstandings in the third quarter. The rapidly deteriorating economic environment in Michigan and California resulted in decreased loan demand in the fourth quarter. However, this was partially offset by strong average loan growth in Texas, which posted a 15% increase. Non-interest bearing deposit generation, excluding the Financial Services Division, was again strong this quarter with average growth of 7% on an annualized basis. The net interest margin in the fourth quarter was 2.82% and reflected the negative impact of three Federal Reserve rate cuts totaling 175 basis points in a challenging deposit environment. This was partially offset by our focus on increasing loan spreads. Net credit related charge-offs in provisions were stable given the challenging economic backdrop. The allowance to total loans increased in the fourth quarter to 1.52% compared to 1.38% in the third quarter as we continued to provide for loan losses substantially in excess of charge-offs. We continue to successfully control expenses including further reductions in personnel. An overview of the full year is provided on slide six. Average loan growth, excluding the Financial Services Division, was 6% with growth of 14% in Texas, 6% in the western market and 3% in the Midwest. Average non-interest bearing deposits, excluding Financial Services Division, increased 6%. The net interest margin was 3.02% for 2008 reflecting the 2008 average federal funds rate decline of more than 300 basis points from the average rate for 2007. The increase in the provision for credit losses was $493 million. The largest component of the increase was commercial real estate, primarily due to the rapid deterioration in the California residential real estate development sector as housing prices continued to fall. Excluding the $88 million charge related to the repurchase of auction-rate securities in 2008, non-interest expenses decreased $28 million or 2% from 2007. Turning to slide seven and the details behind the repurchase of auction-rate securities, our offer to repurchase auction-rate securities from our customers was concluded by year end. The balance at year end totaled $1.1 billion. These assets are held in investment securities available for sale on our balance sheet. The underlying assets consist of preferred stock, closed-end mutual funds, municipal bonds and a small portion of student loans. All are generally of good credit quality but lack a liquid market to sell them. The yield in the fourth quarter was in excess of our funding costs, therefore, these securities were accretive to net income. In the third quarter we incurred a $96 million pre-tax charge primarily reflecting the difference between the par and fair value of these securities. In the fourth quarter we had an $8 million reversal of this charge as a $180 million fewer than expected securities were submitted for repurchase by customers. Also, we had net securities gains of $4 million in the fourth quarter from the sale of some of these securities. Slide eight provides details of our participation in the U.S. Treasury Capital Purchase program. On November 14, we issued $2.25 billion in preferred stock as well as a related warrant under this program. This qualifies as Tier 1 Capital and pays a 5% cumulative dividend. In addition, there is an accretion of a related discount, which resulted from the difference between the fair value and the face value of the preferred stock at issuance. This increases the effective preferred dividend rate to 6.3% or approximately $34 million per quarter. We intend to leverage this additional capital as quickly as possible as Ralph described in his opening comments. Turning to slide nine and our focus on expense management, we have reduced our workforce by almost 600 positions or over 5% of our total employee base at the end of 2007. As the decline in the economy became more rapid in the past few months we determined that further staff reductions were necessary. We expect to achieve a reduction of an additional 570 positions or about 5% of the total workforce, which will largely be completed by the end of the first quarter. All lines of business and geography are impacted with a particular emphasis on operations and staff positions. In conjunction with this action, we incurred a severance charge of $29 million in the fourth quarter. Annualized salary savings of about $35 million related to the 570 positions are expected going forward. We also plan to slow our banking center expansion program. We opened 28 banking centers in 2008 and expect to open significantly fewer in 2009 all in our growth markets of California, Texas and Arizona. Other anticipated impacts to expenses in 2009 include higher FDIC insurance costs resulting in an incremental expense of about $40 million as well as pension expense increasing about $40 million as a result of a lower discount rate and market returns. We intend to continue to reduce our capital expenditures and discretionary expenses in this challenged environment with the expectation that these savings will more than offset the increase in FDIC, pension and new banking center expenses. We believe that as a leaner more efficient organization we will be well positioned when the economy improves. Moving to the balance sheet in slide eight, compared to the fourth quarter of 2007 average loans excluding the Financial Services Division, increased $1.3 billion or 3% paced by an 8% 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. In addition, our loan portfolio is well diversified among many business lines. Average loan outstandings declined modestly in the fourth quarter compared to the third quarter. This is a marked improvement over the 7% decrease in average loans we had experienced in the third quarter. Fourth quarter loan dynamics included low demand in the Midwest and California, which was partially offset by strong loan growth in Texas. The largest decreases in the fourth quarter were noted in middle market and commercial real estate. We saw a growth in local corporate banking, energy and private banking. Line utilization was 52.7% in the fourth quarter up slightly from the 51.1% in the third quarter. The increase was focused in the areas where we maintain large corporate relationships and we believe increased utilization can be partly attributed to the dysfunctional credit markets. Now Dale Green, our Chief Credit Officer, will discuss recent credit quality trends starting on slide 11.

Net credit-related charge-offs and provisions in the fourth quarter increased modestly as the macroeconomic conditions in all our markets deteriorated more rapidly as the quarter progressed. Net credit-related charge-offs were $133 million in the fourth quarter. Net charge-offs included $59 million in the commercial real estate line of business primarily related to the California residential real estate development sector, which is similar to the third quarter level. Provision for credit-related losses of $190 million exceeded charge-offs by $57 million. In addition, provision for credit-related losses for the full year of $704 million exceeded net charge-offs by $232 million. Turning to slide 12, nonperforming assets were 194 basis points of total loans on foreclosed property or 84 basis points excluding the commercial real estate line of business. Our watch loans were $5.7 billion or 11% of total loans up from $5.5 billion in the third quarter. Inflows to nonperforming assets were consistent with the third quarter, and additions to watch list loans slowed significantly in the fourth quarter. As expected, foreclosed property increased to $66 million as a result of efforts to work through the residential real estate development portfolio particularly in California. The allowance for loan losses was 1.52% of total loans, an increase of 14 basis points from the third quarter. The allowance for loan losses increased to 84% of nonperforming loans. Comerica's portfolio is more heavily composed of commercial loans, which in the event of default are typically carried on the books as nonperforming assets for a longer period of time than our consumer loans, which are typically charged off when they become nonperforming. Therefore, banks with a heavier commercial loan mix in their portfolios tend to have lower NPA coverage ratios than do retail focus banks. In addition, we have written down our nonaccrual loans by over one-third. With regard to western residential real estate, we have obtained independent appraisals and taken the appropriate charge-offs and provided additional reserves. Recent loan sales further confirm these values. As we apply stress scenarios to this portfolio, we are comfortable with our reserve coverage. On slide 13, we provide information on the makeup of the nonaccrual loans. The largest portion of the nonaccrual loans continues to be commercial real estate, which consisted primarily of residential real estate development loans. By geography, 46% of nonaccruals are in the western market and 33% are in the Midwest. The average write-down to nonaccrual loans was 34%. As far as granularity of nonaccrual loans, there are 23 relationships totaling $307 million that aggregate to between $10 and $25 million each and there is only one relationship over $25 million. Transfers to nonaccrual slowed again in the fourth quarter with $258 million in loans greater than $2 million transferred to the nonaccrual status. This is a reduction from the $280 million transferred into nonaccrual in the third quarter and $304 million transferred in the second quarter. Commercial real estate line of business, specifically residential real estate development, accounted for $163 million or 63% of the transfers to nonaccrual in the fourth quarter. On slide 14, we provide a breakdown of net credit-related charge-offs by geography. Almost half of the net credit-related charge-offs in the quarter were in the western market of which the majority can be attributed to the residential real estate developer portfolio. Net credit-related charge-offs for the Midwest, which made up 29% of the total, was primarily comprised of $14 million in commercial real estate line of business, $10 million in middle market, and $9 million in small business. Midwest charge-offs declined modestly as we've been dealing with the challenges of the Midwest economy for the past several years. The chart also illustrates the fact that provisions have continued to be substantially in excess of charge-offs. On slide 15, we provide a detailed breakdown by geography and project type of our commercial real estate line of business, which declined slightly from the prior quarter. There is further detail provided in the appendix to these slides. At December 31, 42% of this portfolio consisted of loans made to residential real estate developers secured by the underlying real estate. Geographically, the western market, California primarily, comprised 41% of the total portfolio. On slide 16, we provided the geographic breakdown of the commercial real estate line of business net loan charge-offs over the last two quarters. Residential real estate development loans accounted for 100% of these charge-offs in the fourth quarter. The rate of deterioration in the California residential development portfolio has stabilized as is apparent in the modestly reduced level of net charge-offs in the quarter. In the commercial real estate line of business we transferred $163 million in relationships over $2 million to nonaccrual status in the fourth quarter. One hundred percent of these inflows to nonaccrual in the fourth quarter were related to residential development. As far as non-residential commercial real estate development, we work with financially strong, well-established developers who have the wherewithal to reduce the loan or restructure if collateral values decline. Also, as far as the real retail construction portfolio, the anchor tenant exposure is diverse with no significant reliance on any one retailer. Therefore, while we have seen some softness, we have not seen any significant deterioration in this portfolio. The issues in California continue to be largely centered in one area, the western local residential real estate developer portfolio, which is outlined on slide 17. This portfolio was focused on local smaller residential developers, which build starter and first-time move up homes. We continue to make progress in reducing the portfolio, which had a little over $500 million outstanding at December 31, down from over $900 million at December 31, 2007. We have not added any new business in this segment in a number of years. This portfolio accounted for 32% of the bank's total nonaccrual loans and 99% of the western markets commercial real estate line of business net charge-offs of $37 million in the fourth quarter. We continue to obtain updated independent appraisals and take the appropriate charge-offs and reserves to reflect current market values. Average charge-off plus reserves for the loans that would be generally defined as substandard and doubtful loans is approximately 47% of the contractual value, which is an increase from about 42% at the end of the third quarter. Loan sales and foreclosures related to real estate involve a lengthy process. However, we closed three single asset loan sales in the fourth quarter at values similar to our carrying value after reserves. We expect to complete the sale of others in the near future if market conditions allow. We foreclosed on several projects in the fourth quarter and expect this trend to continue for the foreseeable future. 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. As expected, given the rising unemployment rate and falling housing values, we have seen some deterioration in our consumer portfolio particularly within the home equity loan portfolio. While the issues remain manageable we have increased the loan loss reserves. Slide 19 provides detail on the recent performance of the automotive portfolio. Looking at our non-dealer automotive exposure, we have reduced our loan outstandings $345 million in 2008 and $1.2 billion or 44% 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. The performance of this portfolio continued to be excellent. Nonaccrual loans were only $16 million at year end. Net charge-offs for the full year were only $5.5 million. Given the significant challenge the sector faces, we continued to add to our stress portfolio reserves in the fourth quarter. Our auto dealer business is outlined on slide 20. Outstandings in this portfolio have declined 10% over the past year and we believe they will continue to fall in line with shrinking industry sales. This portfolio was well-diversified with the majority located in the western market and over three-quarters of the portfolio with dealerships selling foreign nameplates. These are long-term relationships. The bulk of our customers are classified as mega franchises operating multiple dealerships. 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 and we expect it will continue to perform well. To conclude on credit, our outlook is for full year 2009 net charge-off to be at a similar level as full year 2008. The length and depth of the recession will certainly impact asset quality in 2009. Early recognition of issues is key, therefore, we have stepped up the frequency of our credit reviews in certain segments and we are moving credits to our workout group at the first sign of significant stress. We have significantly increased the staffing in this area over the past year. Now I'll turn the call back to Beth.

As shown on slide 21, average non-interest bearing deposits, excluding Financial Services Division, grew $151 million or 7% on an annualized basis and increased almost $800 million or over 9% compared to a year ago levels. Growth in the fourth quarter was experienced across all of our markets and in both retail and commercial segments. Non-interest bearing core deposits account for about 30% of our average total core deposits. Total average personal banking deposits increased $491 million or 15% on an annualized basis primarily due to growth in CD balances. As far as commercial accounts, while non-interest bearing balances have increased, interest-bearing deposits, such as business money market accounts, have declined as competition has been intense and companies have utilized their cash in their businesses. In addition, some customers shifted deposit balances to Comerica Securities seeking higher returns. Deposit pricing conditions remained challenging in the fourth quarter. Fed funds rates declined 175 basis points and deposit pricing reductions lagged due to the competitive environment. In addition, we believe we have hit rate floors on a number of our products. On slide 22 we've highlighted our diverse funding base. We have multiple funding sources and our access to liquidity has been good. We funded $2.6 billion in senior debt and institutional CD maturities in the fourth quarter and had a cash position at the Fed of almost $2.3 billion at year end. As I discussed earlier, in November we issued $2.25 billion in preferred stock to the U.S. Treasury under the capital purchase program. Also, we joined the Federal Home Loan Bank of Dallas last February, and as of the end of the fourth quarter we had $8 billion outstanding. These advances are at very attractive rates with maturities of one to six years and we have significant undrawn capacity available. We've been regular participants in the Federal Reserve Term Auction Facility and have tapped into the repo market through Comerica Securities, as well as raised several billion dollars in retail brokered CDs. Finally, as of year end, our investment portfolio held nearly $8 billion of liquid AAA rated mortgage-backed Freddie Mac and Fannie Mae securities, which had an accumulated unrealized net gain of $236 million. Slide 23 updates our expectations for the full year 2009 compared to full year 2008. It is extraordinarily difficult to forecast in these turbulent times, therefore, we are providing general comments on our expectations for 2009. We will continue to focus on developing new and expanding existing relationships particularly in small business, middle market, and wealth management in Texas and California with appropriate pricing and credit standards. We believe that the net interest margin will be lower in 2009 compared to 2008 due to the impact of the 325 basis point in fed fund rate cuts in 2008. We do expect that the fed fund's rate will remain at the current level for all of 2009. Loan spread expansion is expected to continue while deposit pricing will be challenging and non-interest bearing deposits will provide less value in this very low interest rate environment. Cost saving initiatives, which I’ll describe in a moment, are expected to assist us in achieving a mid single-digit decline in non-interest expenses. Our outlook for credit quality is for full year 2009 net credit-related charge-offs to remain consistent with last year. Provisions are expected to continue to exceed charge offs. Slide 24 provides additional detail on actions we are taking to assist in weathering the current economic environment. We plan to continue to carefully control expenses. By streamlining operations and leveraging technology, we expect to reduce our work force by about 5% in the first quarter, as I had previously mentioned, as well as freezing salaries for the top 20% of the company. We have slowed the banking center expansion program and expect to further consolidate our banking center network. We will tactically reduce capital expenditure and discretionary expenses. We will continue to look for additional opportunity to increase our efficiencies. Net interest income continues to come under pressure in the current very low interest rate environment. We have had great success over the past year in increasing loan spreads and as relationships come up for renewal we expect to continue this effort. As part of our interest rate risk management strategy we added $900 million of two-year interest rate swaps in the third quarter and $800 million early in the fourth quarter. In addition, subsequent to year end we added $2 billion in mortgage-backed government agency securities to the investment portfolio to temporarily leverage the preferred stock proceeds as we work to develop new and expand existing customer relationships. Finally, we will remain diligent in managing credit. We plan to continue to reduce our exposure to auto and real estate development sectors. Loan sales, especially residential development loans, will be pursued with the appropriate pricing. We believe all of these efforts will not only assist us in managing through the current environment, but also put us in a better position when the economy improves. Now, we'd be happy to answer any questions that you may have.

(Operator Instructions) Your first question comes from Steven Alexopoulos. Steven Alexopoulos – J.P. Morgan: The first question, just looking at the dividend cut down to $0.33, just wondering was that dividend level set to where you thought you could cover it with earnings for the next couple of quarters?

Steven, we look at the divided and we will evaluate that every quarter as we do with our board in due course, and we'll base it on what our current outlook is and maintaining a solid capital position so we're positioned for future growth. Steven Alexopoulos – J.P. Morgan : Is that a yes? Ralph Babb : It means we evaluate it every quarter and looking on our current outlook and where that's going and where we think it should be accordingly and make the appropriate decision. Steven Alexopoulos – J.P. Morgan: Dale, could you just give the full year charge-offs for middle market in 2008 just in the Michigan portfolio, and wonder where you think that's going to go here in 2009? Dale Green : Well, actually the charge-off, it's interesting, the charge-offs in the middle market portfolio in Michigan have been very well behaved. When you look at charge-offs without the real estate component in our total picture it's only 66 basis points in the fourth quarter, which is only up slightly 52 basis points from the third quarter. Since the bulk of what we have tends to middle market and small business that will give you a sense of what we've done there. So in any recessionary environment for us to achieve charge-offs that would be at that level would be pretty fabulous. So that business has performed for us in a very tough economic environment for a number of years, very, very well. Steven Alexopoulos – J.P. Morgan: And maybe just one final one, Beth, could you give some color on the, it was the OCI change was $180 million increase in the OCI loss. Was that a pension adjustment? Why did that loss go up so much?

Yes. Actually there were two things. There was a positive move related to the investment portfolio gains increased but it was offset by the pension adjustment that you mentioned as 158 increased because of performance. Very common with all pension funds because of the equity market's performance in last year was reduced, so that adjustment was a bigger negative at year end versus the prior period.

Your next question comes from Mike Mayo. Michael Mayo – Deutsche Bank Securities: Could you comment more on the margin, and I guess on the one hand how much better is your loan pricing these days, and on the other hand why is deposit competition so fierce not only for you but I guess for others when you have some government insured debt that you can issue? So can you talk about the trade off between issuing that kind of government insured debt and competing so aggressively for deposits?

Yes. On the loan pricing, we continue to see as credit facilities are renewed or new ones are put on 50 to 100 basis point kinds of improvements, but as you can appreciate that takes a while to work through the entire portfolios so the effect of that is still relatively modest in a quarter. I think we'll see that be a more positive contributor to the margin in '09. On the deposit side of things, when you mention the choice of using the treasury guarantee liquidity program that is not inexpensive relative to frankly deposit pricing. Deposit pricing continues to be the best source of funding for banks because not only the spread levels where banks were issuing the guarantee program but the 100 basis points fee that's in addition to that. So I think in the end, banks and fundamentally deposits raising and gathering is the best, the most effective funding source typically for banks and will continue to be, but we're still in a very tumultuous time in the credit market. A lot of focus on that whole arena by consumers and business customers, so I think that's what’s drawn banks to be pretty aggressive I pricing. We'll see how that works. We did not see any rate reductions of any significance really until the middle of the quarter even after two rate cuts in October, so it's been slow to come. We have seen a little recently but it's not in significant amounts given the very low level of interest rates. Michael Mayo – Deutsche Bank Securities: How much would it cost to have the government insured debt relative to your cost of deposits, just roughly?

It would be significantly higher, let's call it at least 100 basis points. Michael Mayo – Deutsche Bank Securities: So it makes sense just to fight in the trenches for deposits as long as it doesn't go up more than a hundred basis points.

Exactly.

As Beth said, we did see what I'd call a rationalization begin to start late in the fourth quarter, but still when you pick up your newspaper in the mornings and look, you see a fair number of special promotions that are out there by various organizations, which if you look at it based on history you're no where near the elasticity's as to where they would be today and so that market is different in a lot of ways.

Your next question comes from Matthew O'Connor – UBS [Rob] for Matthew O'Conner – UBS: Good morning, this is Rob from Matt's office, actually. [Rob] for Matthew O'Conner – UBS: When looking at average core deposits, excluding FSD, large CDs and foreign Comerica saw a decline in deposits. What would you attribute the decline to and what's your outlook for these deposit balances going forward?

I mention in the script that we saw really the decline was focusing on the business side in business money market deposits for a couple of reasons. One, there was certainly good competition for larger deposits. The second is companies were just using more of the cash in their businesses because of declining economic environment, and thirdly there were other choices that were also attractive including as I mentioned, we were able to garner some nice increases over the last really couple of quarters in Comerica Securities and other forms of investment alternatives. So it’s really all of those together. We continue to be very focused as a company both on retail and the business side on gathering deposits and it’s strategically very important to us and we are very focused on continuing to make refinements in how we develop new products and attract customer’s deposits. So we continue to be optimistic about our deposit growth, and I think as you saw in our non-interest bearings side of things we’ve seen very good growth really every quarter over the whole 12 months. So I think we’ll work through the kind of temporary issues that I talked about and it will be a positive going forward and certainly on the consumer side, we did see, as I mentioned in the slides, a nice improvement in deposit balances. [Rob] for Matthew O'Conner – UBS: In regards to the net interest margin outlook, can you give us a sense where you expect NIM to be versus 4Q levels?

Well, as we said in the outlook, doing forecasting these days is not particularly easy. When you think about ‘09 versus ‘08, one thing you have to think about is on average rates are going to be down about 175 basis points versus last year and so the value of the 30% of our deposits are DDA. The value of those deposits is less. So that’s a factor just in and of itself. There is a partial offset to expanding loan spreads, which we see continuing to be actually a pretty positive contributor to the margin. So we expect it to be down in ‘09 versus ‘08. I would expect a fair amount of that move down would be in the first quarter with relatively more stability in as we go through the rest of the year. [Rob] for Matthew O'Conner – UBS: Any idea how much?

At this point we’re not quantifying it. The deposit environment is the tricky part of thinking about the forecasting equation. So at this juncture we’re saying its down we aren’t quantifying exactly what that means. And as I said, I think we’ll see most of that decline to the extent we have the decline, is in the first quarter. [Rob] for Matthew O'Conner – UBS: Just lastly just on your outlook for charge-offs, what gives you guys confidence that charge-offs will be stable versus 2008 when we’re seeing just the overall economy deteriorate further?

Well, I think that residential real estate is becoming less of the equation. We’ve been dealing with that for a few years at least and certainly in Michigan we’ve been dealing with that for five or six years. We haven’t added any loans to that pile in quite some time so I think the general comment on that is that’s we got our arms around it and that’s coming down and so forth. When you look at the rest of the portfolio, you can see from what we’ve said that auto is coming down. We continue to bring that down. Our dealer business will be down just because volumes will be down. We have a process here that we have followed and disciplined for quite some time and if you get into the whole conversation around the strategies we’ve employed. So I think what we’re saying is its stable the mix will change. I think it’ll be clearly a less residential real estate, a little bit more perhaps a little market of small business because as we’ve said we’ve seen some softness there, perhaps a little in commercial real estate, but I think all in that’s our view. And if you look at the economic forecast that we used in the outlook and the stimulus packages and all of the things that have been done and are likely to be done, we believe that towards the end of the year that we’ll begin to see some improvement. So for me at least that’s what gives me some confidence.

(Operator Instructions) Terry Mcevoy – Oppenheimer & Co. Terry Mcevoy – Oppenheimer & Co: Your in-house economist not too long ago put out a cautious report on the Texas economy, and I was just wondering if you could comment on what Comerica’s doing to maybe minimize the risk within Texas should that economy deteriorate, and I was somewhat surprised to see the 15% loan growth kind of consistent with what your economist pointed out. And then also, could you just talk about your exposure to the Texas homebuilder market like you’ve done to a large degree within California?

Well, we clearly have seen softness in Texas. You can’t be unaffected by what’s happening on the national scene. So when it comes to what we’re seeing here, why we haven’t seen any certainly no significant defaults at all, particularly on the real estate side, we clearly have seen the softness. When you look at the growth, the growth has generally come in kind of our core businesses, our middle market businesses, our small business these are secured transactions, full relationships and so forth. So we feel pretty good about the kind of growth that we’ve seen and kind of what’s happening in this economy. You know the key thing on real estate for me and, we’ve said it before, is clearly Texas hasn’t seen the ramp up in real estate prices that for example California and Florida in particular have seen. And Texas for us as it relates to real estate across the board continues to perform pretty well at least today.

And I would add an additional comment related to Dana Johnson’s forecast, our economist, and that is he still believes on a relative basis that Texas will out perform the national average. So of our markets that we’re in it’s clearly the best relative performer going in this years. Albeit it is slowed from a year ago levels, but there aren’t the real estate bubble issues that existed in other places. So we’re still on a relative basis pretty optimistic about Texas.

To reinforce what Beth was saying, his current numbers are he expects the U.S. to be down about 2%. He believes Texas will be down about 1% and our other markets will be lower than that. Terry Mcevoy – Oppenheimer & Co: Dale, the last time we met, I believe it was the last week of August, you had mentioned that you felt C&I losses would peak this cycle below past cycles. A lot has changed since August and I’m wondering if you still support that statement and maybe somewhat are in terms of your outlooks for charge-offs in ‘09 remaining relatively flat?

Yes. My crystal ball has gotten significantly more clouded. I think that C&I loans are clearly, as we’ve dealt with real estate and thank goodness we’ve done a lot over the last few years, as I’ve mentioned, clearly as I’ve said before you’re going to see some upticks in middle market and small business. They may be a bit higher then they’ve been in prior cycle simply because of the magnitude of what’s going on. It’s so hard to predict where this is going and that’s why all the outlooks we’ve given have been cautioned with, and I know it’s trite, but how do you really predict in this market where things are going to go? It’s very, very difficult. So all I can tell you is that we have put in place a number of things both internally in terms of some of our controls and the way we go about underwriting credit. They’re intended to mitigate the risks we run while at the same time providing opportunity for growth in our key markets and our key lines of business. So it is different today and it might be a bit higher then it has been, but again part of that is tempered with that fact that the commercial or the residential real estate piece of it I think will have less of an impact forward simply because of everything we’ve done.

And I’d add a couple of things. We have been in a recession for a year and if you look at the most recent quarter, excluding real estate, our charge-offs were 66 basis points and so we think that’s really pretty darn good performance in this environment. Ralph Babb : That’s in line with the stress testing we had done before getting into this environment and so far is holding out as your expectations.

Your next question comes from Brian Klock – Keefe, Bruyette & Woods Brian Klock – Keefe, Bruyette & Woods: Beth, actually just quickly I know there’s a lot of difficulty trying to figure where the margins going to be going. You did mention that with the proceeds from the tarp you purchased $2 billion of the agency backed mortgages?

Yes. The Freddie and Fannie agency securities mortgage-backed similar to what we already own. Brian Klock – Keefe, Bruyette & Woods: Do you have I guess a yield and duration on that $2 billion?

Yes. It’s very similar in duration. The average life of around 3, 3.5 years very consistent with what we’ve been owning. The yield on the new purchases is 388. Brian Klock – Keefe, Bruyette & Woods: 388, great thanks.

It will take delivery over the course of really some in January, February and March so the whole pavilion won’t show up, obviously, in the averages for the first quarter. Brian Klock – Keefe, Bruyette & Woods: Dale, a lot of my questions have already been answered, but you did mention, if I have my numbers right from writing down my notes that the watch list actually picked up a little bit to what $5.7 billion versus $5.5 in the last quarter?

Right. Brian Klock – Keefe, Bruyette & Woods: Can you give us any sort of color on the granularity or the makeup of that? How much of that is still commercial real estate, the development versus maybe the middle market, small business component?

Well clearly in this fourth quarter, as we indicated, if you just look at the nonperforming piece of it we had $258 million moving in over $2 million $163 million of that was real estate, residential real estate related. So clearly for us while that seems to have slowed a bit, there's a bit of that there. Again, the softness we've talked about in middle market and small business would show up in some of that migration, some of that five and six, so it's sort of generally as we would have looked at our various businesses, it's very proportional to that. It's the kind of inflows that you might expect and frankly to see an inflow in the fourth quarter of only a couple hundred million into the watch category is a bit heartening in the sense that it is not as much as it might have otherwise been, which I think speaks a lot to what we've done. So it's pretty granular in terms of the businesses.

And as Dale mentioned, the additions to watch lists in the fourth quarter were significantly below the additions in the third quarter.

Right. Brian Klock – Keefe, Bruyette & Woods: I guess when you think about it, and it may be too early I'm not sure if you have this information yet or I guess we'll get in the K. Can you give us an idea what your reserve to loans ratios are or coverage is by the commercial real estate and by the C&I portfolios? So I mean, what kind of reserves have you allocated to those?

Well, we don't typically give it, but I will tell you that on a line item basis clearly the realistic component has been a bigger piece in dollar terms of our provisioning over the last year or so simply because of what's going on in that market.

Brian, we will have that breakout in the K. Brian Klock – Keefe, Bruyette & Woods: I noticed that it looks like the floor plan outstanding loan balance it looks like they increased about $190 million in the fourth quarter. Maybe you could give some color and it probably just draws on existing lines, and I guess what kind of lines are still outstanding on the floor plan?

The floor plan loans have come down a bit overall but they will continue to come down. What's happened is there were still vehicles in the pipeline that the manufacturers had that were shipped to dealers. Most of that, interestingly, tended to be because of the nature of our floor plans but the foreign names, the Toyotas and so forth that we've talked about. So what we've seen is particularly in the western market, some draws under existing drafting letters for flooring to take care of what's in the pipeline. I think what you're going to begin seeing more of is most of the dealers now have said we're going to hold for a while and not take any new product until we've worked out our inventory levels, and I think that's what you're going to begin to see.

And floor plan is down about 19% from a year ago level.

And likely will continue to be down, as sales continue to be soft. Brian Klock – Keefe, Bruyette & Woods: So I guess to look to 2009 and you talked about reducing auto in the commercial and obviously the residential real estate construction, you've been working through that. So the commercial though would be the syndicated credit still, right, as those come up for renewal you'll still work those out if they don't meet your profitability targets, right?

Well, they're not so much syndicated but yes, any of the relationships, any of the loans that we have, syndicated or otherwise, as they come up they have to meet, obviously, the credit underwriting criteria, the pricing criteria and part of the pricing criteria is a full relationship full connectivity. Brian Klock – Keefe, Bruyette & Woods: Beth, I know that there's been a lot of questions already answered about the demand deposits, good solid demand deposit growth, I guess now going into I guess post-quarter end is there any sort of other evidence you have of sort of stability or strengthening when you see all the other problems that your competitors are having, are you seeing more slight to Comerica's deposits with your core deposit growth there?

I think we continue to carry on effectively with our relationships. It's very important for us to be a consistent relationship for these organizations, and I think that will only put us in good stead with continuing to garner more of their business. And that's our focus and so not only on the non-interest bearing side but on the interest-bearing side. We have seen a little better pricing dynamic in the last couple of weeks but we'll see how the volumes go, but I think our key focus is getting as much of the relationship as we can and serving those customers in a consistent manner.

Your next question comes from [Paul Connelly]. [Paul Connelly]: Dale, just a few questions. Could you give us a rundown on what OREO was in the quarter?

Yes. Our OREO went to $66 million up from about $18 and that was a number of loans that obviously we foreclosed on. Obviously for us foreclosure is the last resort, but so it was various residential real estate prosperities that we've been working for some time and we had to foreclose on. [Paul Connelly]: Then your comments on OREO going forward, what's the outlook there?

Well, likely as not, again, we'll probably still be in the process of foreclosing on properties generally throughout 2009. Again it's a last resort but often times that's the only course of action left to you. So what we do is we go through the process, we do our environmental reviews, we get current evaluations of the property, obviously writing them down to those numbers and move them over. [Paul Connelly]: And the average write-down between an NPA falling into OREO is approximately what?

Well, I would answer it this way, that what we have seen so far is that what we've already charged down before the transfer and the reserves have been more than satisfactory. It's been more than adequate to cover what we've moved. That speaks to our valuations, I think.

Yes. Very consistent. [Paul Connelly]: Any trends in 30 to 89 days that you can talk about?

No, I think it's in this environment we'll probably see the past due issues continue to be something that's challenging. Every deal we've got we continue to work, obviously. A number of the past dues that show up as any quarter end are usually taken care of within the following month or two. If it's a situation where there can't be a restructure or deal brought current, we obviously move it to nonaccrual. [Paul Connelly]: And what was 30 to 89 days past due at the end of the quarter?

I don't have it off the top of my head. I tend to focus more on the 90 because that's really where I want to spend most of my time in terms of the risk ratings. [Paul Connelly].: But from a delta between the third and the fourth quarter and non-material movement?

Oh, I think it was up a bit. Well, what we had over 90 was the 125, which compared to about 100 at the end of the third quarter. In terms of the 30 to 89, that was up a little bit. But again, and it was fairly granular in terms of real estate and middle market, small business. And again, you might expect that in a recessionary environment because we continually work through that to make sure they don't 90 days. [Paul Connelly]: It was roughly $300 million at the end of the third quarter, is that correct?

Yes. I think that's right. I think it was up a bit from there in the fourth quarter, but I don't think significantly so. [Paul Connelly]: There was mention last time we met that there was some short-term debt coming due. I don't recall the timing of it. Can you just give us an update on what's coming forward in 2009 in the way of short-term debt and how you're going to plan to fund that?

Yes. We have actually many sources of funding that we've used over the last six months and would continue to look at all those alternatives. We have about $2 billion maturing in the first quarter, but as we discussed earlier, we are in fact sitting in a net investment position right now from a funding standpoint, so there will not be issues there. We do have the capacity if we want to so choose to get in the treasury liquidity guarantee program we signed up for. We have up to $5 billion of opportunity there to issue before the end of June, but in addition the term auction facilities, the repo market, the overnight short-term fed funds position, so we're in a very liquid position today and we have a lot of alternatives to fund upcoming maturities. [Paul Connelly]: Okay, $2 billion in the first quarter what's it for the balance of the year after the first quarter?

There's usually about a couple billion a quarter. It's very typical that we would have that level of, and when I that that includes everything, term, senior, insubordinate debt coming due, institutional CDs, etc. [Paul Connelly]: Finally last question on the syndicated loan portfolio, can you kind of talk about where you're seeing that portfolio moving? Are those balances increasing or decreasing?

The balances have been pretty stable quarter-over-quarter in dollar terms so it hasn't really moved a lot. We continue to move to get relationships on deals as they mature or as we get into them. If we can't get a full relationship and get the pricing and so forth that we want as the deals mature we move out of them. The credit quality has been better as a portfolio segment than the rest of the portfolio, so it continues to be a pretty well performing portfolio and very granular in terms of business lines.

I would now like to turn the conference over to Ralph Babb for further remarks.

Well, thank you very much. I want to thank everybody for joining us today and for your continued interest in Comerica. Thank you.