Comerica announced plans to sell at least $800 million in stock, using the proceeds to help fund the $2.25 billion the bank plans to return to the Treasury Department.
Shares fell 1.6% after hours to $35.70. Comerica's market value is about $5.5 billion.
The company intends to tell Treasury after the sale is completed that it plans to repay the government for the investment made through the Troubled Asset Relief Program. Comerica has banks in hard-hit Michigan, Arizona, Florida and California.
Comerica would be among the nation's last big banks to repay its Tarp aid. Some got approval to due so as far back as June.
In the fourth quarter, the company saw loan-loss provisions and charge-offs fall from the third quarter as Comerica continued to report red ink. The bank has particular exposure to commercial real estate, defaults of which have been surging nationally for more than a year.