Darlene P. Persons - Senior Vice President and Director of Investor Relations Ralph W. Babb - Chairman, Chief Executive Officer, President, Chairman of Capital Committee, Chairman of Special Preferred Stock Committee and Member of Management Policy Committee Karen L. Parkhill - Vice Chairman and Chief Financial Officer Lars C. Anderson - Executive Vice President of The Business Bank and Member of Management Policy Committee John M. Killian - Chief Credit Officer, Executive Vice President and Member of Management Policy Committee

Jon G. Arfstrom - RBC Capital Markets, LLC, Research Division Brett D. Rabatin - Sterne Agee & Leach Inc., Research Division Stephen Scinicariello - UBS Investment Bank, Research Division Matthew D. O'Connor - Deutsche Bank AG, Research Division Matthew H. Burnell - Wells Fargo Securities, LLC, Research Division Michael Turner - Compass Point Research & Trading, LLC, Research Division Craig Siegenthaler - Crédit Suisse AG, Research Division Ken A. Zerbe - Morgan Stanley, Research Division Christopher M. Mutascio - Stifel, Nicolaus & Co., Inc., Research Division Gary P. Tenner - D.A. Davidson & Co., Research Division Terence J. McEvoy - Oppenheimer & Co. Inc., Research Division John G. Pancari - Evercore Partners Inc., Research Division Michael Rose - Raymond James & Associates, Inc., Research Division Paul J. Miller - FBR Capital Markets & Co., Research Division Brian Klock - Keefe, Bruyette, & Woods, Inc., Research Division Jennifer H. Demba - SunTrust Robinson Humphrey, Inc., Research Division Leanne Erika Penala - BofA Merrill Lynch, Research Division Steven A. Alexopoulos - JP Morgan Chase & Co, Research Division Kenneth M. Usdin - Jefferies & Company, Inc., Research Division Josh Levin - Citigroup Inc, Research Division Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division

Good morning. My name is Carmen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Comerica Second Quarter 2012 Earnings Conference Call. [Operator Instructions] I will now turn the conference over to Darlene Persons, Director of Investor Relations. Please go ahead, ma'am. Darlene P. Persons: Thank you, Carmen. Good morning, and welcome to Comerica's second quarter 2012 earnings conference call. Participating on this call will be our Chairman, Ralph Babb; Vice Chairman and Chief Financial Officer, Karen Parkhill; Vice Chairman of the Business Bank, Lars Anderson; and Chief Credit Officer, John Killian. A copy of our press release and presentation slides are available on the SEC's website, as well as in the Investor Relations section of our website, comerica.com. As we review our second quarter results, we will be referring to the slides which provide additional details on our earnings. 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. Forward-looking statements speak only as of the date of this presentation, and we undertake no obligation to update any forward-looking statements. I refer you to the Safe Harbor statement contained in this release issued today, as well as Slide 2 of this presentation, which I incorporate into this call as well as our filings with the SEC. Also, this conference call will reference non-GAAP measures and in that regard, I would direct you to the reconciliation of these measures within the presentation. Now, I'll turn the call over to Ralph, who will begin on Slide 3. Ralph W. Babb: Good morning. Today, we reported second quarter 2012 earnings per share of $0.73, or $144 million, an 11% increase from the first quarter. Our results reflect our focus on the bottom line in this slow-growing national economy. Turning to Slide #4, in further highlights, loans continued to grow with average loans up $959 million, or 2%, compared to the first quarter, primarily reflecting an increase of $1.2 billion, or 5%, in commercial loans. This was the eighth consecutive quarter of average commercial loan growth resulting in a 20% year-over-year increase, including our acquisition of Sterling Bank shares last July. The increase in average commercial loans in the second quarter was broad-based with increases across nearly all of our businesses. Deposits continued to grow in the second quarter. We had record deposits of $49.4 billion at June 30, 2012 with an increase in average deposits of $368 million, primarily driven by an increase in noninterest-bearing deposits. Excluding the decline in accretion, net interest income was stable. Non-interest income increased $5 million to $211 million, including a $3 million increase in customer-driven fee income. We maintained our tight control of expenses with decreases in several categories. Credit quality continued to be strong. The provision for credit losses decreased $3 million to $19 million. Our capital position remains a source of strength to support our future growth. We repurchased 2.9 million shares under our share repurchase program in the second quarter. In April, our Board of Directors increased the quarterly cash dividend 50% to $0.15 per share. The combined share buyback and dividend returned 81% of second quarter net income to shareholders. In addition, we have reviewed the Basel III regulatory capital framework and believe that on a fully phased-in pro forma basis, we are well above the proposed capital levels. Turning to Slide 5, in our corporate news, Comerica Bank ranked highly in the 2012 American Banker/Reputation Institute Survey of the reputations of 30 large banks. Comerica ranks fourth overall and #1 in the categories of citizenship and governance. According to the consumer survey, Comerica had the second largest positive gain in reputation from a year ago and was 1 of only 2 banks that placed in the top 5 of nearly every survey category. And on Slide 6, a new Census Bureau report shows the cities with the largest growth. Comerica has a presence in 9 of the top 15: Houston, San Antonio, Austin, Los Angeles, Dallas, Phoenix, San Diego, Fort Worth and San Jose. We believe population growth drives economic growth and that we are well positioned in these growing cities. Turning to our key markets, we had 38% average loan growth year-over-year in Texas, including our acquisition of Sterling. Our growth has been broad-based with increases in almost every business line. We are also investing resources in Texas in Technology & Life Sciences, Environmental Services and Mortgage Banker Finance. In his most recent Texas Economic Activity Index, our Chief Economist, Robert Dye, stated that Texas drilling activity remains strong with the state's energy sector driving job gains. The energy and manufacturing sectors are boosting the demand for services, providing a broad basis for ongoing economic growth. Average loans were relatively stable year-over-year in our Midwest market, which is primarily Michigan. The rate of growth in the Michigan economy has slowed into mid-2012 after being lifted by the rebounding auto industry in 2011. A softer U.S. economy through mid-year 2012 will likely dampen further gains in auto sales and production for the second half of 2012. However, with ample pent-up demand and high affordability, auto sales are expected to hold up near a 14-million unit pace this summer and that will support ongoing moderate growth in the Michigan economy. We had average loan growth of 7% year-over-year in our Western market, which is primarily California, with increases in National Dealer Services, Global Corporate Banking, Technology & Life Sciences and Entertainment, as well as notable growth in Middle Market the last 2 quarters. Our most recent California Economic Activity Index showed an expansion in that state's economy, driven by gains in the high-tech sector, which includes many of our Technology & Life Sciences customers. However, California job growth is below the national average and state and municipal fiscal conditions remain challenging. In summary, our loan and deposit growth, solid credit performance and tight expense management reflect our focus on the bottom line. Our capital position remains solid, and we continue to be active capital managers. Our consistent, conservative relationship-focused approach to banking is making a positive difference for us and our customers. And now, I will turn the call over to Karen. Karen L. Parkhill: Thank you, Ralph, and good morning, everyone. Turning to Slide 7. As Ralph mentioned, total average loan growth was 2%, or $959 million, quarter-over-quarter as shown on the left-hand side of the slide. On the right-hand side, you can see commercial loans drove the increase, up 5% or $1.2 billion as a result of growth in many lines of business, including National Dealer Services, Global Corporate Banking, Middle Market Banking and Energy. The green part of the bar shows that on average, Mortgage Banker loans were essentially unchanged. However, as in the past, there was significant variability in the balances in the quarter. In fact, in the last week of the quarter, Mortgage Banker loans grew approximately $500 million. Importantly, our commercial loan growth was partially offset by a decrease of $252 million, or 2%, in average commercial mortgage and real estate construction loans. Turning to Slide 8. Total commitments increased for the fourth quarter in a row with a $636 million increase in the second quarter. Energy, Mortgage Banker Finance, Technology & Life Sciences and National Dealer Services contributed the largest increases. With the growth in outstandings outpacing the increase in commitments in the second quarter, our line utilization increased to 48.8%. Also, our pipeline remains strong in the second quarter with increases in many business lines and approximately 60% attributed to new business. As shown on Slide 9, our deposits continue to grow and we're at an all-time high. Our average deposits increased $368 million quarter-over-quarter with $491 million coming from noninterest-bearing deposits. The Western market drove the increase with the largest contribution from Technology & Life Sciences and the Financial Services division. Additionally, we were pleased that we were able to lower deposit pricing by another basis point as shown by the yellow diamonds on the slide. However, as stated before, we believe we are at or very near the floor for deposit rates. Our loan-to-deposit ratio stood at 89% on June 30. Turning to Slide 10. Our net interest income was stable, excluding the $7 million decline in accretion of the purchased discount on the acquired Sterling loan portfolio. Accretion should continue to trend downward as we expect to recognize total accretion of about $25 million -- $20 million to $25 million for the remainder of the year. As you know, there are many moving pieces in net interest income. Quarter-over-quarter, our increase in average loans provided an $8 million benefit, but was partially offset by a $4 million negative impact from lower loan yields, excluding accretion. While we remain focused on holding spreads for new and renewed credit facilities, a continued shift in our loan portfolio mix drove the yields' decrease. This was largely due to the decrease in Commercial Real Estate loans and the increase in lower-yielding, higher credit quality commercial loans. In addition to loan volumes and yields, the mortgage-backed investment securities portfolio had a $5 million negative impact on net interest income. I'll discuss that further when we get to the next slide. It's important to reiterate the fact that a continuation of the low rate environment is not a further negative for us as the impact from falling rates has mostly already been absorbed. We continually update our interest rate sensitivity, and our current update reflects the fact that approximately 85% of our loans are floating rate, up from our previously reported level of 80%. Of our loans that are floating rates, 75% are LIBOR-based, predominantly 30-day LIBOR. Therefore, rate movement on both the short and long end of the curve should have little impact on us, given the floating rate predominance in our loan book and the relatively small size of our securities portfolio. Importantly, our asset-sensitive balance sheet remains well positioned for rising rates. We believe a 200 basis point annual increase in rates, equivalent to 100 basis points on average, would result in approximately $160 million increase in net interest income. Loans with rate floors consist of less than 10% of our portfolio and therefore, will not be a major drag on revenue expansion as rates rise. Slide 11 provides details on our securities portfolio, which primarily consists of highly liquid, highly rated mortgage-backed securities. Interest earned on this portfolio decreased $5 million, primarily a result of accelerated premium amortization of $3 million, which is faster forecasted prepaid fees on the portfolio. In addition, lower reinvestment yields and a small decrease in the size of the portfolio had a $2 million impact on the interest earned in the second quarter. At June 30, the remaining net unamortized premium was about $115 million or just over 1% of the portfolio balance. The average duration on the portfolio remains low at 2.7 years. The average yield is 2.66%, excluding the impact from the accelerated premium amortization which equates to about 11 basis points. Our target level for the securities portfolio continues to be $9 billion, so we continue to reinvest the prepayments which were about $750 million in the second quarter. While current reinvestment rates for 15-year MBS are in the 1.7% to 1.8% range, we do try to invest as opportunistically as possible within our parameters to maximize yield, minimize present premium and maintain a short duration. We expect that the prepayments will continue to be about $750 million to $900 million per quarter for the remainder of the year. Turning to the credit picture on Slide 12, credit quality was strong. Net charge-offs remained relatively low at $45 million or 42 basis points of average loans. Our provision for credit losses of $19 million was a $3 million decline from the first quarter. While overall credit quality continues to improve, charge-offs are approaching normalized levels. Our watch list and non-performing loans continue to trend downward after a slight uptick in the third quarter last year, reflecting the addition of the Sterling loan portfolio. Watch list loans decreased $371 million to $3.8 billion or less than 9% of total loans. Non-performing loans decreased $109 million, and we are now at the lowest level seen since 2008. Foreclosed property remains stable and very low at $67 million. Finally, we received the annual Shared National Credit, or SNC, exam results at the end of June. They are reflected in our results and were in line with our expectations. Slide 13 outlines the growth in non-interest income which was $211 million, up $5 million over the first quarter. Continued growth in customer-driven fee income of $3 million resulted primarily from increased customer derivative income, which was partially offset by a decrease in service charges on deposit accounts. We are seeing the success of our profit improvement revenue initiatives which are assisting us in offsetting the headwinds that resulted from regulatory reform. Other changes in non-interest income include $5 million for an annual incentive payment from our third-party credit card provider and a $3 million increase in net income from principal investing in warrants. Finally, deferred compensation asset returns decreased $7 million in the second quarter. They are completely offset by a decrease in deferred compensation plan expense in non-interest expenses. Turning to Slide 14. We continue to maintain good expense control. Expenses declined $16 million to $433 million. Salaries expense declined $12 million, reflecting stock grants of $5 million booked in the first quarter and $7 million in lower deferred compensation expense as mentioned previously. In addition, annual merit increases were offset by a 2% decrease in our workforce as shown on the bottom left section of the slide. We had $8 million in restructuring costs in the second quarter related to the acquisition of Sterling which closed last July. We now expect to incur about $25 million to $30 million in merger and restructuring expenses for the remainder of 2012, primarily related to real estate optimization which will occur in the third quarter. Our careful expense management resulted in reductions in several other categories, including a decrease of $4 million in foreclosed property expenses as well as smaller decreases in occupancy, software and equipment. Litigation and legal expenses decreased $3 million, but remained somewhat elevated due to the changes in loss estimates reflecting recent developments on certain litigation contingencies. Moving to Slide 15, in capital, as you can see on the left side of the slide, our capital is strong and we have robust capital generation in the quarter. Therefore, we have excess capital available which we are returning to shareholders through dividends and share repurchase. On the right-hand side of the slide, we have outlined the primary effects from the Basel III capital framework. Last month, the Federal Reserve Bank issued a notice of proposed rulemaking related to Basel III capital standards for the United States. These rules have been published for comment and are not yet final. Proposals narrow the definition of capital, increased the minimum levels of required capital, introduced capital buffers and increased the risk weights for various asset classes. We have reviewed the proposal and even under the new stricter definition, on a fully phased-in pro forma basis, Comerica is currently estimated to exceed the standards for well-capitalized banks. It's calculated according to the proposed rules today. Our Tier 1 capital ratio is estimated to be between 9.3% and 9.4%, comfortably above the new 8.5% regulatory standard which will be phased in over the next 7 years. We continue to monitor the regulatory environment and assess its implication on capital as the rules are finalized. Turning to shareholder payout on Slide 16, as Ralph mentioned, we repurchased 2.9 million shares under our share repurchase program in the second quarter. And when combined with the shares repurchased in the first quarter, we have completed $121 million of our $375 million capital plan. As a reminder, the Federal Reserve concluded its review of Comerica's 2012 capital plan in March. The plan provides for up to $375 million in equity repurchases for the 5-quarter period ending March 31, 2013. In April, our Board of Directors increased our quarterly cash dividend by 50% to $0.15 per share. The share buyback, plus the dividend, resulted in a shareholder payout of 81% of second quarter net income, above our 10-year historical average of 77% prior to the downturn. Finally, our outlook. We have obviously benefited from good loan growth in the first half of the year. As a result, based on average loans for full year 2011, compared to full year 2012, we now expect growth of 5% to 6%, which is slightly more than we had previously guided. While our loan growth so far this year has been strong and broad-based, we have also continued to benefit from our expertise in a couple of industries which could see some variability going forward. For example, our Mortgage Banker business has grown along with the robust mortgage refinance volume. We still expect those balances to moderate over the next couple of quarters as mortgage origination volumes are forecasted to slow. For example, the Mortgage Bankers Association is forecasting mortgage originations to fall almost 25% in the second half of the year. Also, we anticipate National Dealer Services loans will experience the normal seasonal decline as dealers reduced inventories in anticipation of the new model year. In addition, we expect Commercial Real Estate loans to continue to decline, but at a slower pace. Finally, the current economic outlook does bear a demand for new loans, and we intend to continue to exercise [Audio Gap] relationship pricing discipline. On net interest income, we are narrowing our outlook at the higher-end of the previous range for growth of 3% to 5%. We expect that higher loan volume will continue to be offset by a decline in yields. As I mentioned earlier, securities yields have been declining and loan yields have been impacted by a mix shift in the portfolio and improved asset quality. We expect our credit expenses to decline from last year's level, albeit at a slower pace as we approach normal historical levels. And we expect credit quality trends in our portfolio to remain positive, which will be partially offset by loan growth as the result -- and result in a continued reserve release. Therefore, we expect to see the provision and net charge-offs at or near the second quarter levels for the remainder of the year. Our net interest income, we are revising our relatively stable outlook to 1% to 2% growth over last year's levels as we are more than offsetting the significant regulatory headwind. The non-interest expense outlook is unchanged with the expectation for it to be relatively stable, plus or minus 1% compared to last year as we continue to maintain tight control of expenses. As far as the tax rate, we expect a rate of about 26% for the full year. With regards to our synergy expectations for the Sterling acquisition, we continue to be on course to deliver the loan and non-interest income growth we previously announced. The former Sterling footprint, which was predominantly Houston, San Antonio and Kerrville, has already seen loan growth of over 10% and we believe we are well on our way to meeting the 15% fee increase goal since the acquisition closed. In closing, we are very pleased with our continued loan and deposit growth, increased customer fee income, tight expense management and solid credit performance. In the current interest rate economic and regulatory environment, we remain keenly focused on the bottom line. Now, we are happy to answer your questions.

[Operator Instructions] Your first question comes from Don Jon Arfstrom. Jon G. Arfstrom - RBC Capital Markets, LLC, Research Division: A question for you on Commercial Real Estate. Karen, you talked a little bit about declining but at a slower pace. Can you give us a little more color as to what you're seeing there? It's obviously the one area of your balance sheet that continues to be a bit of a drag? Ralph W. Babb: Can we ask Lars to comment on that. Lars? Lars C. Anderson: Right. Hey, Don, yes, let me talk about that just for a second. As we have previously shared, we do see continued moderation in those balances over the next quarter or 2 throughout the balance of the year. We're continuing to see our customer base access the long-term kind of permanent markets and move some of their assets there, and that clearly is putting some downward pressure on that portfolio. But on the flip side, I would -- I tell you I'm very encouraged as we've shared in previous calls. We've had some very nice activity, volumes that is consistent with our existing strategy which we have not changed. It's very much, Don, a footprint, urban market oriented portfolio strategy. We're working with experienced developers, many that we've gone through the crisis with and they're in very good condition. We're seeing a lot of multi-family opportunities very well capitalized in California and in Texas. So I think that we're going to begin to see the benefits of those construction loans that are very well capitalized as we head into next year, but we would expect some moderation in those balances throughout the balance of the year. Jon G. Arfstrom - RBC Capital Markets, LLC, Research Division: Okay. And then, Karen, just a question for you. What are you expecting on the pace on the buyback? It looks like you still have about $250 million left. I'm just curious if something -- this is something you expect to spread over the next 3 quarters or accelerate it a bit? Karen L. Parkhill: You should expect it to spread over the quarters. We don't claim to be market timers on anything including share repurchase, and so we are in the market every day that we can be repurchasing shares.

Your next question comes from the line of Brett Rabatin. Brett D. Rabatin - Sterne Agee & Leach Inc., Research Division: I wanted to ask, just given the strong loan growth that you did have in a couple of key businesses this quarter, I guess I thought that growth that you were implying would be a little stronger going forward and I realize you're concerned somewhat about the mortgage warehouse possibly having some decline. Are you seeing -- I guess, the number that you gave last quarter on commitments to commit, can you give us that? I missed it if you gave it. And then just can you talk maybe more about the pipeline in terms of the Middle Market, large corporate, et cetera? Ralph W. Babb: Sure. Lars? Lars C. Anderson: Yes, I'd be glad to take that, Ralph. Hey, Brett, first of all, I don't believe in the prior quarter we shared the commitments to commit. We did give a little bit of guidance into our overall commitments, which through this past quarter, it was the fourth consecutive quarter of commitment increases, up $636 million. So I think that was really good. That was building on about $1 billion of expansion in our 2 overall commitments in the first quarter. For this quarter, it was really driven by Dealer, Energy, TLS, MBF and a number of businesses. The overall, though, as we look at the balance of the year, the loan growth opportunities for us, yes, we see we were up in commercial loans $1.2 billion roughly, or 5%, as Ralph pointed out, about a 20% annualized growth rate, which has been a nice. Our Dealer business has obviously benefited, that was up 13% quarter-over-quarter, Global Corporate Banking, Middle Market, which was great to see, California really impacted that and in particular, northern California having a positive impact and Energy. So all of those were some nice tailwinds that we had expected. And we're doing well, I think, in those segments. I would say, though, as we look to the balance of the year, it's important to keep in mind, as I shared just a minute ago, we do expect some moderation in Commercial Real Estate balances, at least for the balance of this year. Also, 2 of our businesses with unique variability characteristics. First, Mortgage Banking Finance, which at least the Mortgage Banking Association's forecast would lead us to expect the balances in that portfolio would moderate here over the next 2 quarters. And then I think the other key component of that would be Dealer, which we had previously shared, Brett, that's a seasonal business. We do see inventories clear during the summer, getting ready for new models to come in, so nothing unusual there. One last footnote, I've been spending a lot of time in the markets with customers, prospects and it's pretty clear to me there's a rising sense of kind of uncertainty, though, given the fiscal cliff, political environment, there's a lot going on. I think there's people that are becoming more reticent about making investment, so all of those would factor into, I think, our thinking for the balance of the year. Brett D. Rabatin - Sterne Agee & Leach Inc., Research Division: Okay. And then the follow-up I wanted to ask was the guidance -- would the loan guidance that you have for average balances imply slightly lower end-of-period balances in the spread revenue guidance essentially? I know you don't want to give margin guidance explicitly, but it assumes that the margin would be under some additional pressure. Question there is just on, is it going to be on the securities portfolio, or do you also continue to see any pressure on loan portfolios going forward? Are you seeing -- do you expect more pressure on the loan portfolio yields, I guess, is the easiest way to ask it. Ralph W. Babb: Yes. First of all, I think it's good news in terms of loan spreads. We've gone through a period of crisis and then a lot of competitive pressures on pricing on loans, obviously, as banks have become much more active in the marketplace. You may have seen the first -- excuse me, the second quarter Fed survey that outlined that loan spreads had compressed kind of at record levels since 1986. So it's a competitive market. For us, we have largely held our loan spreads, and I think that's good news. And frankly, I would expect that to continue. Our value proposition, our relationship-focused approach, I think, is being well received in the marketplace. Karen L. Parkhill: And I would just add to that on loan yields that in our overall portfolio, we're obviously seeing higher-yielding Commercial Real Estate assets come off the books, both higher credit quality but lower-yielding Middle Market type loans coming on the books, which has impacted our loan yields so far this year and we think will continue. And finally, the benefit of accretion, as we mentioned before, will be slowing as we approach the end of the year. Ralph W. Babb: Really a change of mix.

Your next question comes from Steve Scinicariello. Stephen Scinicariello - UBS Investment Bank, Research Division: I just want to follow up a little bit on the mix shift going on in that portfolio and just kind of obviously know the trends of the Middle Market have been strong and you wanted to emphasize the Commercial Real Estate, but just kind of trying to gauge kind of the extent to which that, you see that continuing going forward and kind of how much pressure that could mean for loan yields? Do you think the mix shift at the similar pace that we saw this quarter could continue or maybe start to slow down as we start to see some of the pipeline in the CRE start to materialize? Karen L. Parkhill: Now, just before Lars, I would just say that the biggest impact is the accretion on the loan yields. So you should make sure you focus on that. We had $25 million approximately of accretion the prior 3 quarters. We had $18 million this quarter and we expect $20 million to $25 million for the rest of the year. Ralph W. Babb: And I think just to underline what Lars was saying earlier, we expect that the Commercial Real Estate will start to, what I will call, plateau for the end of the year and that then mix shift will slow from a higher rate environment to what we would focus on being our commercial C&I lending which is, at this point, higher credit and also lower yield from that standpoint. Lars, do you want to add anything to that? Lars C. Anderson: No, I think that's well said. There is -- our expectation is that Commercial Real Estate, hopefully, as we head into '13, will begin to show some different growth kind of characteristics. But clearly, we are continuing to stay very focused on our Middle Market businesses that I think are very well positioned and stable. Our Dealer business, our Energy business, well positioned. Technology & Life Sciences, general Middle Market and I'd underscore, too, it's been a while since we've really seen the good core of Middle Market banking lift in California, and that's very substantial for us. We continue to see nice lift in Texas. And so I would say our portfolio trends should continue with, hopefully, a moderation and a decline in the Commercial Real Estate component. Stephen Scinicariello - UBS Investment Bank, Research Division: Much in the net interest income guidance certainly applies -- implies a similar or even slightly better loan growth run rate, and I think you said you felt pretty good that even to the extent you see some modest on the yield pressure as the shift continues and whatnot, you still feel very confident that you should be able to kind -- to grow through it, I guess, is the question. Lars C. Anderson: Yes, yes. I think we've shared that there's a couple of businesses in the short term with some variability, but we're not changing our strategy. It's being very well received. We're paid a premium at Comerica for our value proposition. And frankly, I think in the marketplace today, what I am seeing is that business owners, partners, executives are looking more and more for the relationship-focused banking model that Comerica can successfully deliver and get paid for. Stephen Scinicariello - UBS Investment Bank, Research Division: Great, great. And then just last, any reason why we shouldn't expect to see the full amount of the buyback executed? Karen L. Parkhill: We don't predict the future on buybacks.

The next question comes from Matthew O'Connor. Matthew D. O'Connor - Deutsche Bank AG, Research Division: There's been a couple of banks, including yourself, that have said the impact of the low rate environment is mostly reflected in your balance sheet. And obviously, you're a little bit different in that most of your loans are priced off the shorter term part of the curve. But I guess, while I look at the securities book, including for you, you're adding new securities with yields that are 75 to 100 basis points lower and I just got to think there is still some more drag from that. So I do want to follow up on the comment that you think the bulk of the impact of the low rate environment is already in the NIM. Karen L. Parkhill: Yes, I think, Matt, what I said was the bulk. Clearly, we do continue to have a securities portfolio which is relatively small as a percentage of our assets that does have prepays that we're reinvesting at current market rates as they prepay. And so we do expect, and that's part of our net interest income outlook that the reinvestment rates will remain at about current yields which are very low. And so we do expect some impact from that. Matthew D. O'Connor - Deutsche Bank AG, Research Division: Okay. And then on the premium amortization, I know you guys tend to be pretty conservative in how you account for that, and it seems like you try to do a little forward-looking view on the write-down that you took this quarter? Karen L. Parkhill: That's correct. On the securities portfolio, the premium amortization is a full forward-looking view. Matthew D. O'Connor - Deutsche Bank AG, Research Division: Okay, so if rates stayed at these levels then you wouldn't expect any additional hits in the third quarter? Karen L. Parkhill: That is correct. If rates stayed at this level. Matthew D. O'Connor - Deutsche Bank AG, Research Division: Okay. And then just separately, if I may, the Basel III, a 90 to 100 basis point hit, how much of that do you think you can mitigate over time? Karen L. Parkhill: The rules are not yet final, as we said, so difficult for us to say how much we expect to be able to change. I think the important thing is that we are well above the standardized levels at 8.5%, which we don't need to be above until 2019. So we are well ahead of the game. And obviously, once the rules are final, we will be focused on not only adhering to the rules, but also making sure we operate well within them. Matthew D. O'Connor - Deutsche Bank AG, Research Division: And is it right that the increase in the RWAs is from the -- mostly from the unfunded commercial commitments that are, I guess, less than a year? Ralph W. Babb: Yes. Karen L. Parkhill: Yes. So the RWA increase is mostly from unfunded commitments less than a year. We also have some impact on low loan-to-value Commercial Real Estate development loans as well as deferred tax asset change in risk-weighted assets and the change in non-accrual loans and those kind of loans. Matthew D. O'Connor - Deutsche Bank AG, Research Division: And just lastly, as a follow-up on this, do you have any thoughts -- is there any hope that the unfunded commitments of less than a year, that the guidance might change there? Because, obviously, that could have implications for credit availability for a number of corporates out there, I would think. Karen L. Parkhill: Yes. Ralph W. Babb: I think we just have to wait and see what's going to happen, but I think there will be changes in the rules, as Karen was talking about, in the future. And as they evolve, the good news is that we are ahead of it even today and that puts us in a very good position to adjust accordingly as the rules evolve. Karen L. Parkhill: Right. And as the rules become final, I think, there might be changes in the overall industry and in overall customer appetite for things like unfunded commitment. Ralph W. Babb: Yes.

The next question comes from the line of Matt Burnell. Matthew H. Burnell - Wells Fargo Securities, LLC, Research Division: Just a question on the reserve release here. You're currently running reserves at about 1.5% of loans, that's down about 10 basis points quarter-over-quarter. Karen, I think you mentioned that you're expecting continued reserve releases through the end of the year. I guess I'm just trying to get a sense as to the size of those reserve releases over the next couple of quarters. The reserve release this quarter was visibly higher than last quarter, so I guess I'm just trying to get a sense of the pace of the reserve releases and where you might be comfortable reducing the reserves relative to outstanding loans. Ralph W. Babb: John, why don't you comment on that? John M. Killian: Sure, I'd be glad to. There's really no target for where we want reserves to be. So we'll continue to review every sizable problem loan every quarter. We'll continue using our existing reserve methodology. And right now, our total reserve of $703 million is almost 4x our annualized charge-offs. As you know, going forward, reserve levels for various charge-offs and problem loans decline but increases, we have growth in the portfolio. In the near term, as you mentioned, we did say that charge-offs and provisions would be very close in the third to fourth quarter to what they were in the second quarter and I would expect the reserve release, which overall was $26 million in the second quarter, $23 million in the first quarter, to be very much in that range as we go forward through the next couple of quarters. Matthew H. Burnell - Wells Fargo Securities, LLC, Research Division: Okay, and then just a bigger picture question perhaps for Ralph. Now that we have the NPR for Basel III out in the public domain as it were, are you sensing that there may be better opportunities for M&A within your markets now that the banks that you compete with and some of the smaller banks have a better sense of what those rules are going to be? Ralph W. Babb: I think everybody is, at this point, doing what we are. They're watching and waiting for the rules to evolve before decisions are made on those types of items. As always, we're focused on the communities we serve and the opportunities that may or may not arise in those communities. Matthew H. Burnell - Wells Fargo Securities, LLC, Research Division: And one last quick question, was there any effect in this quarter from the recently announced interchange settlement? Karen L. Parkhill: We don't comment specifically on specific cases, but what I would say is we do believe that we are adequately reserved for all litigation-related matters.

Your next question comes from the line of Mike Turner from Compass Point. Michael Turner - Compass Point Research & Trading, LLC, Research Division: I realize it's almost insignificant, but I noticed the NPLs for the home equity portfolio almost doubled from $9 million to $16 million, and there is usually some seasonality in that, but I don't know if you could add any color around that. Ralph W. Babb: Sure. John? John M. Killian: Yes, I'd be glad to. We've got about a $1.6 billion portfolio in home equity loans. It's 3% of the total portfolio, to your point. About $900 million of that is from Michigan. It's all self-originated. We've never used brokers nor have we done subprime and our average home equity line of credit balance, by the way, is about $45,000. However, delinquency rates and charge-off rates have consistently been better than industry statistics and the relatively modest increase in NPLs that you saw this quarter were results of some changes in our policies where we got a little more conservative on when we move things to nonaccrual. So we basically moved to a 90-day standard as opposed to 120 to 180, which I think the whole industry is moving toward a 90-day standard. That's why you saw the increase. Michael Turner - Compass Point Research & Trading, LLC, Research Division: Okay, that makes a lot of sense. And then also, not to sort of beat the dead horse on the NIM or NII guidance, just when I look at it from a high level, your loan growth is coming in strong, your raised your loan growth guidance, your NII changes essentially similar to where it was. Your guidance is basically unchanged. Your accretion income is really -- expectations for accretion is unchanged. So given the higher loan growth, that assumes the NIM's down and I understand that some of the mix shift. I guess my question is embedded in your thoughts or your guidance. Are you assuming that you will continue to maintain the loan spreads that you're having now? Or is there some conservatism in there that further rate pressure would ensue? Karen L. Parkhill: Yes, we are very focused on full relationship pricing with our customers in maintaining pricing and spreads on new and renewed loans as much as we can. So that is built into our thought process. Ralph W. Babb: I think what you would see is, you'll see that continual shift in the mix... Karen L. Parkhill: That's correct. Ralph W. Babb: Which is built-in. Michael Turner - Compass Point Research & Trading, LLC, Research Division: Okay. So if there was additional competitive pressures, that could be a little bit of downside or -- and if you maintain it, that's basically where guidance is right now? Ralph W. Babb: Right.

The next question comes from Craig Siegenthaler from Crédit Suisse. Craig Siegenthaler - Crédit Suisse AG, Research Division: I just want to clarify in the accretion numbers you threw out there. There was $25 million, I believe, in the second quarter run rate and you expect this to fall to $20 million to $25 million for the entire second half, so kind of $10 million to $13 million per quarter. Is that right? Karen L. Parkhill: That's correct, and you should expect it to be decreasing each quarter. Craig Siegenthaler - Crédit Suisse AG, Research Division: Got it. And then if you think about the $25 million in the second quarter, where was the contribution of that? Was it mostly from Commercial Real Estate and maybe a little bit from C&I? Karen L. Parkhill: Yes, it's mostly from Commercial Real Estate, and you're right, just a little bit from C&I. Craig Siegenthaler - Crédit Suisse AG, Research Division: Okay. Well, then if you look at your C&I yield, because I was wondering if there's anything in that number, it only fell by about 4 basis points quarter-from-quarter and down to about $352 million. I'm wondering, when you think about the inflow of the kind of the new money yield there, how quickly do you anticipate this should really decline over the next few quarters and what is that new money yield? Karen L. Parkhill: Yes, I don't think we comment specifically on spreads for loans because they vary by risk rating and by structure on the loans. But what I would say on C&I in general is we are working again to maintain pricing on all new and renewed business as much as we can. And I think that's one of the reasons why you're seeing less of a decrease on the C&I yield. Ralph W. Babb: And that's true in the Commercial Real Estate sector as well. Lars C. Anderson: Yes, I was going to say, Ralph, yes, that in Commercial Real Estate, in particular, we've got, we have some great relationships, some terrific projects that over the last year, that we've been originating that I think are very fair spreads for the kind of value proposition. We've been very reliable through the cycle. Our developers know that and we're getting paid for it. We -- whether it's Commercial Real Estate or it's our C&I, Middle Market focused businesses, we have a very disciplined approach to relationship pricing and we're okay to take a pass on deals. I mean, we -- and we do it every day, but it just means we have to spend more time in the market looking for the right kinds of opportunities, the customers and prospects to get paid fairly. I think we're doing that. Craig Siegenthaler - Crédit Suisse AG, Research Division: Got it. And then just one last question on the Mortgage Banker balance, a year ago, it was sitting at $600 million, now it's at $1.5 billion. I heard your commentary around kind of pressure. Even if there is second half pressure, what is the normal run rate, the normal balance? And I know it moves around a lot, but over the course of the cycle, where -- what's kind of the average balance for this that we should think about? Lars C. Anderson: I'm sorry. Ralph W. Babb: We have a new balance on Mortgage Banker Finance. Lars C. Anderson: Yes. Gosh, that's really hard to peg because if you go back over the last few quarters, you'll see that there was some very wide swings. If you go back into the fourth quarter of last year and into the first quarter, it would be hard to peg a number for you. But I would just tell you that as we do look out over the balance of the year, that we would expect that there would be some moderation in those balances. I mean, we've seen balances between quarters decline $0.5 billion or more. But it can surprise you because as I think we've all been surprised that we've continued to have record low rates kind of quarter after quarter. That's a key driver of the growth in that business. But I also want to underscore one other very important point. There's been a lot of changes in the mortgage industry over the last couple of years. Comerica has been very stable, very focused on this warehouse lending approach to really prime mortgage companies. And that reputation has served us well, we are clearly serving a lot more mortgage companies today than we were 1 year ago and we're cross-selling them. And I think that, that gives us a much broader base to work from as we move forward. Ralph W. Babb: Yes, that increase in market share, I think, as I've watched the kind of the ups and downs here recently is, it's about $0.5 billion or so that will go up and down but that doesn't mean the mortgage market can't change and dry up for a longer period of time. It really depends on where that's going as Lars mentioned about what was going on with the Mortgage Bankers Association and their prediction. And then I just heard a commercial on rates are at a new all-time low and many brokers are out there selling those rates again for refinance. So it -- a lot depends on what's happening in the market there.

Your next question comes from Ken Zerbe from Morgan Stanley. Ken A. Zerbe - Morgan Stanley, Research Division: Just a little bit further on Mortgage Banking very briefly, Karen, did you say Mortgage Banker balances at very end of the second quarter were down $500 million or they were $500 million? Karen L. Parkhill: They were up $500 million. Ken A. Zerbe - Morgan Stanley, Research Division: They were up $500 million. Okay, so from the 2 point when -- okay, so it's up $500 million versus last quarter. Got it. Okay. So then the growth -- I know you guys don't want to comment specifically on like C&I loan growth guidance, but when we think about that, Mortgage Banking still very strong, should we view the rest of C&I? I'm looking at Page 7 here, is also being up in the quarter or in the next quarter? Karen L. Parkhill: Yes. We do expect to continue to see growth in our C&I portfolio, and that's built into our overall loan expectation. Ken A. Zerbe - Morgan Stanley, Research Division: And that's excluding any impact for Mortgage Banking? Karen L. Parkhill: Correct. We actually expect Mortgage Banker to decline in the second half, consistent with the Mortgage Banker Association Survey. Ralph W. Babb: As well as our Dealer business, which is seasonal moderation.

Your next question comes from the line of Chris Mutascio from Stifel, Nicolaus. Christopher M. Mutascio - Stifel, Nicolaus & Co., Inc., Research Division: Karen, I wanted to go over my math in terms of net interest income. Let's forget about the margin and accretable yields. Let's get to the dollars. If I look at the midpoint of your guidance of roughly 4% year-over-year net interest income growth and apply that to last year, you get this year about $1.725 billion in net interest income. Then I back out the roughly $880 million of net interest income you've earned so far in the first half this year. That leaves you with roughly $845 million net interest income for the second half of this year or roughly $420 million to $425 million per quarter versus a $440 million run rate in the first half. Is that an accurate assessment? Karen L. Parkhill: Yes, but what you need to make sure you take into account is the impact of lower accretion. In each quarter, again, we expect $20 million to $25 million in accretion for the rest of the year, and that is going to come at a declining pace each quarter. And remember, we had $26 million in the first quarter, $18 million in the second quarter. Christopher M. Mutascio - Stifel, Nicolaus & Co., Inc., Research Division: Right. I think that sounds like we're taking that in effect with your guidance so my point is, in the second half of this year, we're looking roughly at $420 million to $425 million net interest income line versus the $440 million line in the first half. Karen L. Parkhill: Yes. And then I think you need to make sure you take into account the fact that our loan yields will -- should continue to be impacted by the mix shift in the portfolio as Commercial Real Estate loans come down and lower-yielding Middle Market loans come on the books. And then we also do have the slight impact from our securities portfolio on the reinvestment rate on those yields.

Your next question comes from the line of Gary Tenner from D. A. Davidson. Gary P. Tenner - D.A. Davidson & Co., Research Division: Just a couple of questions. You talked about some of the variability you expect in the mortgage business. Just in terms of the Dealer Floor Plan business, $2.5 billion or $2.4 billion at the end of the second quarter, what's the magnitude of that seasonality that you might expect over the second half of the year? Ralph W. Babb: Lars? Lars C. Anderson: Okay, yes, I believe the overall Dealer Finance business was at $4.3 billion. That was the average for the quarter, for the whole business. But it is a little bit difficult to tell and I'd be hard pressed to kind of give you a range there. But given a stable environment of continuation of, say, 14 million units, which is what we are hopeful for, I would just say that you typically would end up with some moderation in maybe $0.5 billion or more. But I'll tell you, that can really vary depending upon a lot of circumstances. I think that we saw that. You can have the supply chain interruption, you can have a lot of things that go on in there that can significantly impact that. Gary P. Tenner - D.A. Davidson & Co., Research Division: Okay. And then Lars, I was wondering if you could just give some commentary on the Small Business piece. It was down a couple of hundred million dollars this quarter, maybe just give us some thoughts on that. Lars C. Anderson: Yes. Yes, it's a good question. And, obviously, Small Business had took the brunt of, I think, this economic storm that we've seen. I think our Small Business clients are probably feeling as guarded as any segment that we've got. So they're reflecting a slow growth economy. We are continuing to see the runoff of some term credits that may not exactly fit into our longer-term kind of strategy of growth of just kind of core C&I and Small Business. Our Small Business customers, though, our sense of it is, they're continuing to delever and become more liquid, so we're seeing that. On the flipside, I would tell you that our pipelines have continued to grow. I think I shared that in the last quarter. They continue to be very strong, and, in fact, this past quarter was our best quarter of new loan production that we've had in at least a couple of years. And I think that, that bodes very well for us.

Your next question comes from Terry McEvoy from Oppenheimer. Terence J. McEvoy - Oppenheimer & Co. Inc., Research Division: A year ago this month, you closed the Sterling deal. Earlier in the call, you talked about loan growth tracking expectations. I guess my questions would be, is it coming in the areas you expected it to be when you first announced that deal and how do you see that transaction being additive to Comerica going forward? Ralph W. Babb: The transaction is going very well and very much as we expected. The team has come together well in the market, especially in the Houston, San Antonio, Kerrville markets and I believe the latest number showed about a 10% increase in loans outstanding since the acquisition, and we're very excited about that combination. And the other synergies are on target as we expected. Terence J. McEvoy - Oppenheimer & Co. Inc., Research Division: Okay. And the real estate optimization later this year, are the cost saves of those events, is that built into the 2012 outlook or will any cost saves be more visible next year in 2013? Karen L. Parkhill: Our -- all of the cost saves are built into the outlook. Terence J. McEvoy - Oppenheimer & Co. Inc., Research Division: And then just one last question on the Wealth Management there was virtually no provision, if I remember. And you said something about decreasing in Private Banking in the Midwest markets. Is that a conscious decision of Comerica? Or is that simply a function of the market itself decreasing? Ralph W. Babb: John? John M. Killian: Yes, it's not the intent of any strategy at all. That' s just the way the numbers came out this quarter. We intend to execute that business strongly across the country. Ralph W. Babb: It's a very important business for us.

Your next question comes from the line of John Pancari. John G. Pancari - Evercore Partners Inc., Research Division: Look, there you've been given on the balance sheet growth and the spread income, and sorry to beat you up again here on the margin, but that implies about 5 to 10 basis points of margin compression by my math through the back half of this year. Is that a fair level at least to think about? I know you don't give guidance, but I just wanted to see in terms of magnitude if that's a fair range. Karen L. Parkhill: Yes. Ralph W. Babb: Karen? Karen L. Parkhill: Obviously, we don't give guidance on our rate NIM because that can move around quite a bit and it also is dependent on the level of our excess deposits. So I won't give guidance on that. But I would focus on the guidance that we've given for net interest income and the impacts around that of lower accretion of the lower loan yields due to the mix shift of the impact on the mortgage banking backed securities which we talked about and of loan growth. I would focus on that. John G. Pancari - Evercore Partners Inc., Research Division: Okay. All right. And then separately, the second quarter level for comp and benefit expense, about $250 million in total, I wanted to see if that is a pretty good run rate to stick with going forward or if you could expect some incremental volatility in that number outside of the Sterling impact? Karen L. Parkhill: Yes. No, that is a pretty good number to look at going forward.

Your next question comes from Michael Rose from Raymond James. Michael Rose - Raymond James & Associates, Inc., Research Division: I just wanted to get a little bit of color on the increase in utilization rates. I understand why it was up in part due to the growth outstripping the growth in commitments. But as we sit here and look at kind of a maybe a slowdown in technology spending, energy is under pressure, how should we think about utilization rates and commitments going forward? Ralph W. Babb: Lars, do you want to take that? Lars C. Anderson: Yes. I'd be really glad to. Obviously, yes, utilization rates were just math, driven by overall Commercial or overall loan growth of $950 million. Commercial loans up $1.2 billion and yet commitments, way up a healthy $636 million, now the math around that pushed our total utilization rates against commitments of 140 basis points to 48.8%. The biggest contributors that drove that were Dealer, Energy, Technology & Life Sciences, Mortgage Banking Finance and such. And so I'm not sure I would jump to any conclusions there around utilization rates and where that would be going in the future. We're obviously glad to -- we were glad to see that. But I couldn't point to one particular business that I think would particularly influence that going forward. We're just going to continue to stay very focused on our Middle Market businesses which are the biggest part of our commitments and commitment growth. And we're -- we feel very good about our long-term growth prospects of all of our Middle Market businesses and general Middle Market, as I mentioned, picking up in California. I think Texas continuing, will have impacts on that. So I hope that's somewhat helpful to you, though, it's hard to guide you exactly where I think that will be. Michael Rose - Raymond James & Associates, Inc., Research Division: Yes, that is helpful. And then as a follow-up, when I kind of look at the net interest income in Texas, even excluding the impact of the accretion, I guess it implies that competitive pressures continue to take shape in Texas. Can you kind of comment on what you're seeing out of maybe some of your larger competitors? Are they still being very competitive on rate and structure? Lars C. Anderson: Yes. We are seeing a very competitive marketplace. There is no question about it. I would say from a geographic perspective, the West Coast is the most competitive, maybe Michigan, Texas, but really, we're seeing good competition. It's very competitive across all of our segments. The good news of it is, I think that our strategy is playing out very well. It's being very, very well received. And in spite of that, we're continuing to hold on our loan spreads. We've done that for 2 quarters in a row and I feel very bullish. I think we've got the right businesses, kind of in the right markets with a very talented bankers. I think we've got some of the best bankers in the marketplace and you got to have them to execute kind of this relationship banking model that I think is being well-received and driving some nice growth in the market.

Your next question comes from the line of Paul Miller from FBR. Paul J. Miller - FBR Capital Markets & Co., Research Division: A couple of real quick questions. On your guidance for net noninterest expense up 1%, does that include the $20 million to $25 million of merger expenses in the second half of the year? Karen L. Parkhill: Yes, it does. It includes restructuring expenses. Paul J. Miller - FBR Capital Markets & Co., Research Division: So then next year, you should have noninterest expense go down even further factoring out any type of growth metrics? Karen L. Parkhill: That is correct. Paul J. Miller - FBR Capital Markets & Co., Research Division: And on the MBS portfolio, I think you said your duration's around 2.5 to 3 years. Is the new stuff you're adding on, is that same duration mix? Karen L. Parkhill: Yes, it is. When we focus on adding securities, we're focused on keeping duration as low as possible while maximizing yield and keeping premium as low as possible. So we have -- our 2.7% -- 2.7 duration has been on the portfolio for a few quarters now. Paul J. Miller - FBR Capital Markets & Co., Research Division: And then just -- and then so when you're reinvesting the new for the runoff, what type of yields are you getting for those, for those securities today? Karen L. Parkhill: Today, we're getting yields between 1.7% and 1.8%. Paul J. Miller - FBR Capital Markets & Co., Research Division: And then did -- I don't know if you disclosed it, but have you disclosed what type of CPR rates you have on the securities currently? Karen L. Parkhill: We don't disclose that.

The next question comes from the line of Brian Klock from Keefe, Bruyette, & Woods. Brian Klock - Keefe, Bruyette, & Woods, Inc., Research Division: And really quick, and I'm sorry if maybe this is answered already, but I bounced on a couple of different things this morning. And maybe this is a question for Lars, the loan growth does seem like syndicated national credits, that those balances increased about $0.5 billion or about half the total growth in C&I this quarter if you take out the Mortgage Banker Finance. So I guess maybe you can talk about that. Is there opportunities that you're seeing because of what's going on in Europe, the bigger European banks that have U.S. operations, that maybe you're seeing some better looks at deals because of that or maybe you can talk about the growth in that, the SNC portfolio? Lars C. Anderson: Okay, I'd be glad to -- 2 kind of issues that I'll try to cover, first, the European banks, how they're linked. We're seeing some opportunities there. They were somewhat limited. Some of the changes in the marketplace have been bulk purchases portfolios. We're really spending our time building relationships rather than focus on buying credits. That's kind of where we are at our best. So I'd say that, that is somewhat limited. We've seen some opportunities with existing customers where we've been able to expand our relationships, but we have pretty conservative hold limits. And so we're going to stay in the box there and stick with the conservative strategy there. As that relates to the Shared National Credit portfolio, it was up by actually $478 million. I think it's on Slide 20, 23. I think the important thing to point out is, the Commercial loan growth for period end, which is what you'd measure that against, because the SNC number is period end, was up $1.4 billion. So you're talking about roughly $900 million in production that was non-Shared National Credit. So it is by far the majority of our production. But a couple of things I want to point out is, we use Shared National Credit as simply a tool, a very conservative tool, to manage our risk exposure in industries and segments that we've been in a very long time, we're very comfortable with and that we have very good asset quality profitability kind of metrics from. In fact, if you look at the Shared National Credit portfolio at our bank today, the returns, the asset quality of those credits really is consistent with the overall portfolio. Last point I would make for you is, we underwrite our Shared National Credits like we do any other credit. There's no difference in standard there and we hold them to the same relationship banking pricing standards, and frankly, execution that we have of any other credit in our portfolio. So we're very comfortable with it. We're very comfortable with our lines of business, but it simply complements some long-term businesses that we've been in. Ralph W. Babb: Yes, I would underline that relationship approach to Shared National Credits. Some of our biggest relationships and meaning total banking relationships, not just credit would fall under that category. Brian Klock - Keefe, Bruyette, & Woods, Inc., Research Division: Okay. And maybe just one follow-up for John Killian. John, did you say earlier, when you were talking about the provisions, the guidance, the overall guidance is that the provisions and charge-offs should be down year-over-year and trending down, but did I hear you say that the third and fourth quarter provisions and charge-offs should be similar to the second quarter level? John M. Killian: Yes, you did, Brian. Brian Klock - Keefe, Bruyette, & Woods, Inc., Research Division: Okay. And I think at what point, I guess maybe that's the thing is, that if loan growth, there is some expectation, Karen, that loan growth should be moderating in the second half of the year, there's probably less pressure on needing to provision for the loan growth in the second half of the year. Is that maybe the way to think about why that -- why the good loan growth that you had in the first half of this year, I would expect provision to go up from that $19 million run rate in the second quarter, but is that why we're kind of ... Karen L. Parkhill: Yes, I think that's correct. Obviously, the key drivers of our overall reserve are loan growth and credit quality. So yes, your statement's correct.

Your next question comes from Jennifer Demba from SunTrust Robinson. Jennifer H. Demba - SunTrust Robinson Humphrey, Inc., Research Division: Regarding the Energy portfolio, you've had a lot of growth in that over the last year, I know much of it probably related to Sterling. Can you just talk about the composition of the portfolio, whether most of it is Shared National Credit in nature and what kind of concentration you're comfortable with in terms of Energy loans to total loans over time? Ralph W. Babb: Lars? Lars C. Anderson: Yes, Jennifer, yes, it's been obviously a business that we've been in a very long time, a Texas-based company and we're very comfortable with it. And frankly, we developed, I think, a really nice reputation in the industry. Today, it represents somewhere around 5.5% or so of our overall loan portfolio, so it's very manageable. It was up 6% quarter-over-quarter, the growth in it, so we didn't have quite growth in it over the last quarter. It is very clearly consistent with our relationship banking model. We work very closely with management teams and sponsors that we worked with for a long period of time. And frankly, we get excellent ancillary business out of working with these management teams and companies because they value our long-term commitment to the industry. If you look at the portfolio overall, it's very much of a liquids kind of oriented portfolio towards our natural gas, liquids and oil, which is really where you want to be. That's not a mistake. The portfolio continues to have excellent performance characteristics in growth, asset quality and profitability. So we're very comfortable with where we are today. We got a proven track record, a robust credit policy that served us very, very well. And I would just remind you that back in the '90s, we -- this portfolio went through $10 a barrel gas, $1.70 natural gas. It also made it through 2009 at $40 a barrel. Yes, at $40 a barrel, yes, did I say? Ralph W. Babb: Gas. Lars C. Anderson: Yes. At $10 in the '90s, $40 a barrel in 2009, and frankly, our performance has been excellent. So we're very comfortable with where we are and with our strategy. And we're going to continue to grow with our customers and we're going to stay very focused on our existing strategy, no changes there. Karen L. Parkhill: But Jennifer, you had mentioned in your question that you thought that much of the Energy growth was related to Sterling and I just want to let you know that Sterling did not have the robust industry expertise in Energy that Comerica has had for a long time. So we wouldn't necessarily attribute that to Sterling. What I would also say is, you asked about the composition of SNC, most of our Energy loans are SNC loans. Lars C. Anderson: Yes, and that is really a reflection of a very conservative approach to our hold limits in an industry that's very asset-intensive, right. Thanks, Karen.

Your next question comes from the line of Erika Penala from Bank of America. Leanne Erika Penala - BofA Merrill Lynch, Research Division: I just had one high-level question for you, Ralph. So if I take a step back, if the Fed is on hold for the next 2 years or through 2014, I guess, that implies to me that the outlook for your bank is that loan growth is getting better and that's balanced with the provision, the credit leverage from improving credit moderating, but that also implies that if the margin will continue to grind down and we don't know what's going to happen in terms of the CCAR process each year in terms of your ability to continue to increase capital return. And I guess in that scenario, as you look out over the next 2 years, what do you think the other levers are that are available to you in terms of improving EPS in an environment that's difficult for that long? Is it to -- Matt's question, M&A, would it be a special dividend or are there more expense leverage outside of -- it sounds like the base for next year on a core basis is $1.73 billion. Is there something -- what else -- I mean, or are you really saying, "Look, this rate issue is cyclical, so we're not going to do something outside our comfort zone just because rates are low for another 2 years?" Ralph W. Babb: That's a good way to summarize in total. We will stay with our philosophy and our strategy of growing in the markets where we are. We think we're very well placed in building relationships for the longer term. Now there are levers that we continue to look at all the time, and that's expenses. And I think we've set a record of doing that. We look at expenses every year and making sure those are the right places for the right leverage. We've been an active capital manager and we'll continue to be that within the rules and guidelines that are out there. And as you know, those aren't, as we've talked about, aren't set yet at this point in time. So the strategy, I believe, and especially the strategy of the geographic expansion that we undertook several years ago and is now paying off in Texas and California and balancing out that geographic distribution is working very well and the growth is going to be, as we talked about in the comments, in the states where we are, especially Texas and California. And so I think we're very well positioned to weather through the storm that may be there or may not be there from that standpoint based on rates and whether there continue to be at a low level.

Your next question comes from Steven Alexopoulos from JPMorgan. Steven A. Alexopoulos - JP Morgan Chase & Co, Research Division: First question was for Lars. Several quarters before, we saw the positive turn in C&I loan growth, right. You were able to telegraph this because you looked at the increase in commitments to commit. I'm curious here with the economy softening, when you look at this leading indicator, are you starting to see a downturn or any softening in the C&I coming? Lars C. Anderson: Right, Steven. Yes, we've had -- we've had I guess now, 8 conservative quarters of Commercial loan growth which has really been terrific and the last few has been very strong. Our pipeline continues to look good. I would just say, though, that at least from what I'm hearing in the marketplace and I've been spending a lot of time out there with customers and prospects is, there is this growing sense of uncertainty and maybe a cooling of the economy that could impact, I think, business activity in the second half of the year. But you mentioned the word telegraphing, I would say this, though, I think that we're as well positioned in the marketplace today in our markets and our businesses as any franchise. I mean, going out into the marketplace today and talking about Comerica's story of reliability, our size, our products, our strengths, our capital position, talking about our customer service commitments and our relationship banking model and then thirdly, I think most importantly, being able to take bankers out there that, on the average, our group managers have average tenure at Comerica of about 20 years, our average relationship manager, almost 10 years. Those are the folks that execute our relationship banking model. So I'm very encouraged about our businesses, about our markets, about our products and our growth prospects longer term for sure, Steven. Steven A. Alexopoulos - JP Morgan Chase & Co, Research Division: Maybe I could follow up on that because I hear that you're very encouraged, you're well-positioned, you expect moderation in Mortgage Banker crit. But I guess we all struggle because when you look at the average loan growth guidance, right, it implies $42 million, $42.5 million for the full year, your period-end loans I think were $44 million. So it implies a pretty steep decline coming in the second half of the year. Period-end might be down $2 billion looking at your guidance. So I guess what I'm trying to reconcile, is my math wrong or is your term moderation really implying a pretty steep decline in loans coming in the second half? Karen L. Parkhill: Yes, I would say on our outlook, it is based on what we said, the decline in Mortgage Banker Finance, seasonality in Dealer, overall decline in Commercial Real Estate, continuing decline in Commercial Real Estate, so it is against that backdrop, as well as the backdrop of a not-so-robust economy out there and the fact that we intend to continue what we've been doing on maintaining our relationship pricing discipline. Steven A. Alexopoulos - JP Morgan Chase & Co, Research Division: Got you. Okay. And maybe just a few quarters ago, you talked about $100 million in annual profit improvement from revenue and expense initiatives. How much of that $100 million has now been realized? And are you still on track for the full $100 million? Karen L. Parkhill: Yes, Steve, we are on track to receive the profit improvement that we had planned for earlier in the year. We do monitor and measure that at a very granular level every month and so we are comfortable with it. In terms of timing, we expected it to be spread fairly evenly across the quarters this year and that is still proving to be the case. Steven A. Alexopoulos - JP Morgan Chase & Co, Research Division: Karen, could you share how much of that you've realized already? Karen L. Parkhill: You know what, we -- it's very difficult to track at that kind of level on how much we've realized already, but it is spread evenly and so you can deduce it from there.

Your next question comes from Ken Usdin from Jefferies. Kenneth M. Usdin - Jefferies & Company, Inc., Research Division: Just 2 really quick ones on fee income. I'm just wondering can you just talk about what the drivers of fee income growth will be from here? What areas do you expect to lead that forward? Karen L. Parkhill: Sure. On fee income, we do expect to see continued customer-driven fee income increases. As we put in place, as part of our profit improvement revenue initiatives this year, a big focus on fees, doing things like higher penetration on cross-sells, ensuring that we actually collect fees and don't waive much in fees, things like that. So we do expect customer-driven fee increases to continue. The other part of the noninterest income revenue are things that are variable and we don't necessarily expect to continue for the rest of the year, things like gains on principal and investments, investments and warrants, gains on our auction rates, securities portfolio and the $5 million in our annual incentive that we received this quarter on our credit card portfolio. Kenneth M. Usdin - Jefferies & Company, Inc., Research Division: So if I bring that on together, and I wanted to ask you about the other income line, because there's always a lot of the volatility stuff in other, so what was outside of the bonus gain in there this quarter? What else was strong in there and kind of how do you expect that line to trend over the course of the year? Karen L. Parkhill: We also had strong customer derivative income, too, which is part of the customer derivatives that I haven't mentioned, they're customer income that I haven't mentioned. But in other, what else is in that? It's really the gain on our principal and vesting warrants and our auction rate securities. Kenneth M. Usdin - Jefferies & Company, Inc., Research Division: Okay. And then so when you think about it, it's kind of like the same way people have been asking about NII, can you -- do you expect fees to be able to grow from here? Or is it just that they'll be able to grow off of a decent comp from year-over-year? Karen L. Parkhill: We do expect to be able to continue to increase customer-driven fees year-over-year. Kenneth M. Usdin - Jefferies & Company, Inc., Research Division: No, I meant from the current quarter. I mean, from the run rate. Karen L. Parkhill: And from the current quarter run rate. Ken A. Zerbe - Morgan Stanley, Research Division: Okay, got it. And then the volatility is just the pluses or minus underneath that. Okay. Great.

Your next question comes from Josh Levin from Citi. Josh Levin - Citigroup Inc, Research Division: So you obviously have very strong C&I loan growth. When you think about return on capital, what's the all-in return on capital you're getting on the C&I loans that you're making in the current environment? Karen L. Parkhill: We don't disclose the returns that we're getting on each individual loan, but what I will say, is that we are very focused on overall relationship returns for each of our customers every time we price any product to them and those overall relationship return hurdles are fairly strong. Ralph W. Babb: Both on economic return on equity, as well as regulatory return on equity spreads, among other things, that are looked at on every credit. Josh Levin - Citigroup Inc, Research Division: Okay. And the second question is sort of related. Given how challenging this environment is for all banks, is there a point at which you sort of consider shrinking the bank, returning some capital to shareholders and then you can raise capital at some later point when the cycle ultimately turns? Is that even on the table at all or that's not even close to being on the table? Ralph W. Babb: No, I think the focus is, as we see things evolve, we'll continue to be an active capital manager and returning the appropriate amount that, we believe, to our shareholders during any given year. And as the rules get more finalized, we'll be, as we have in the past, more open with what we think the current target for capital is in the market.

Your next question comes from the line of Mike Mayo from CLSA. Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: Question, so on the one hand, you're raising guidance, you're at the high-end of spread revenues, loans are better than you thought. And on the other hand, you're signing a note of caution with slowing Mortgage Banking business, National Dealer, seasonally slower, continued decline in Commercial Real Estate, Midwest is flowing into the middle year, uncertainty with your clients with the macro situation. So my question is, are you raising guidance, really, solely due to what you've seen in the first half of the year? Karen L. Parkhill: Yes, I would say that our guidance for the rest of the year is driven in large part to the strong performance that we've seen in the first half of this year. Ralph W. Babb: The issue, Mike, as you know very well is, when you look out for the rest of the year, we have the election, we have what's going on in the European sector, as well as the slowing in the Asian sector and the fiscal cliff that is in the paper every day. And that has caused us to be cautious while I think Lars said a while ago, we had not really seen an effect at this point. And we'll still be out there and looking for new business and new relationships as aggressively as we have in the past and making sure that we are leveraging our abilities to the best point for our shareholders. Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: Are you cautious partly because of what you're seeing from your customers, however? Are you hearing or seeing this with their behavior? Ralph W. Babb: We are hearing from our customers. But I would say also, and I think we talked about it in the last call, that capacity has gotten to be part of a factual situation where customers are beginning to borrow and having to invest in what I would call the short term in order to meet the demands that they have. Our customers, as Lars was talking about earlier, are doing very well and have seen a very good turnaround in the last couple of years. And so, at this point, as I mentioned earlier, we've not seen that slowdown, but there is a lot of caution that's being discussed and they're not going to reach to the what I would call more historical investing until they get certainty in what the rules are going to be going forward in the economy. Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: And the answer to the other question, so are you forecasting loans to be down from period-end second quarter levels? Karen L. Parkhill: We're not going to comment specifically other than what we've said in our guidance, Mike, that we do expect loans to moderate in certain areas like we've talked about. We do expect continued growth in C&I. Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: And then lastly, you said you're asset-sensitive. You've always been asset-sensitive. I look at the decline in yield on the loans down 13 basis points this quarter, the decline in yield on securities, down 16 basis points this quarter and decline on deposits only 1 basis point. But then that I hear your statement saying low rates should not be further negative for you guys. And it's just a little surprising, given the decline in the loan securities yields, you said deposit rates are at a floor. I mean, you almost have a built-in excuse, right? You can say it to anybody, who expected rates to be this low for this long and you've always been asset-sensitive, so you should be getting hurt by that. But instead, you say, "Well, it shouldn't really be a further negative for us." It just seems like you're putting your neck out on the line when you really don't need to. What gives you this kind of surprising confidence? Karen L. Parkhill: Yes, I think what you need to take into account is, that our overall relative exposure to the rate environment is low. And when we say that comment, that's what we are referring to. Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: I just -- I really want to understand this. I want to understand this not only for you, but for the industry, that the pain is already done, when you see the exposure in the rate environment. I mean, forever, Comerica, for decades , Comerica has been core deposit funded for Commercial loans, and it's natural that you're asset-sensitive. So if rates are low, you can't reprice those core deposits down forever, and it sounds like you're at that point now and those loans and securities get repriced lower. So I guess -- unless you're hedging and doing something else, and I thought you said that the new yield on securities is 1.8%. Versus the second quarter, it was 2.6%. So right there, that's another 80 basis points on the securities portfolio. So can you give me any other color as to how you get to that conclusion? Karen L. Parkhill: Well, first of all, the securities portfolio, the rate prior quarter was about 2% where we were reinvesting. So it has come down, but not 80 basis points, closer to 20 to 30 basis points. Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: Would it been for -- the overall yield on securities is 2.6% in the second quarter? Karen L. Parkhill: That's correct. I thought you were talking about the reinvestment rate. Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: Right. But that -- so that would just drag down your overall yield. I'm just looking, forecasting March. I know you're not giving guidance on that, but go ahead. Karen L. Parkhill: So on our securities portfolio, yes, we do have prepays every quarter. We do expect those to be $750 million to $900 million per quarter, and we are reinvesting those at low rates. We currently do not have any hedges on our portfolio. At some point in time, in a better rate environment, we do intend to put hedges back on the portfolio. We had them in the past, they have run out at this stage. So that's our securities portfolio and our hedging strategy. On the loan side, 85% of our loans are floating rate, and of that, 75% are LIBOR-based and most of that is 30-day LIBOR. So when we talk about the asset sensitivity in our -- on our business, we are talking about the fact that we are mostly floating rate exposed, mostly 30-day LIBOR exposed and the fact that the securities portfolio, yes, is reinvesting at lower rates, but we've given you the amounts of those prepays that we expect going forward. Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: But -- last follow-up, sorry, the loan yields keep coming down, though. I mean, they're down 13 basis points just last quarter. Don't you expect that to go down also? Karen L. Parkhill: Yes, and we've talked about on loan yields, the fact that there is a mix shift in our overall portfolio and that mix shift is the higher-yielding. Commercial Real Estate loan is coming off the books and being replaced by lower yielding but better quality of loans coming on the books. And so that is the phenomenon in our overall loan portfolio yield. At the same time, you've got accretion impacting that yield which needs to be taken into account. And then on loan yields for new and renewed business, we are focused on maintaining spreads everywhere that we can. And because we are focused on that, the yield in our portfolio will come down less than it would have if we hadn't been very focused on the new and renewed pricing.

There are no further questions at this time. Mr. Babb, do you have any closing remarks? Ralph W. Babb: Well I would like to thank everyone for being on today and your interest in Comerica. Thank you very much.

This concludes today's conference call. You may now disconnect.