Comerica Inc. will sit out the merger game until next year while it cranks up its expansion in California.

The $41 billion-asset Detroit banking company is in the throes of integrating its most recent acquisition, Imperial Bancorp of Inglewood, Calif. The $1.3 billion stock deal, which closed Jan. 29, will result in charges of $169 million, most of which Comerica will take in the first quarter.

Comerica is focusing on consolidating its California operations before deciding on its next move. The company plans $60 million in cost savings with the Imperial purchase, mostly in back-room operations and overhead. After the integration is completed in 2002, Comerica could be open for another acquisition.

“We are very opportunistic,” said Eugene Miller, chairman and chief executive officer of Comerica, in an interview Friday. “Our focus now is getting this deal done.”

The acquisition brings challenges to a commercial lender that has always maintained a squeaky-clean reputation for credit quality. Imperial is a major lender to the film industry — hardly a risk-free proposition — and it has struggled with rising levels of problem loans in its portfolio.

Comerica credit officers have spent months combing through Imperial’s loan books and credit policies to bring the company in line with its own standards. And executives said the effort is paying off.

Comerica has performed due diligence on 80% of Imperial’s loan portfolio and has found no problems, Mr. Miller said. “We haven’t seen the need to sell any loans,” he said. “We think there is great opportunity here. We will see the loan portfolio growing.”

Imperial reported a $22 million loss in the fourth quarter because of an increase in the provision for credit losses. The company reported net income of $38 million in the same period in 1999.

Mr. Miller said Friday that the loss was not a surprise. “We expected this.”

Ralph Babb Jr., Comerica’s vice chairman and chief financial officer, said that he is “comfortable” with Imperial’s credit quality.

The company reported Friday that net chargeoffs were $76 million during the quarter, and that the allowance for credit losses was $70 million, or 1.70% of total loans. Nonperforming assets were $68 million, in line with Comerica’s expectations.

“We are quite comfortable with the portfolio,” Mr. Babb said.

Comerica does not plan on selling any of Imperial’s portfolio of warrants and securities to meet earnings in the future, he said. Gains from warrants and equity investments — $15.8 million in the third, roughly half of fee revenue — fell to $324,000 in the fourth quarter.

Michael Granger, an analyst at J.P. Morgan Chase & Co., said Imperial had a “throwaway quarter.” Wall Street expects Comerica to earn $5.05 per share this year and $5.55 per share in 2002.

“Every indication coming out of the company today is that things are looking good,” Mr. Granger said. “We expected Comerica to be aggressive in charging off loans at Imperial. They basically cleaned off the slate.”

When Comerica announced the deal in November it agreed to exchange 0.46 of its shares for each share of Imperial. The deal price represents 2.4 times book value and 14.8 times 2001 earnings.

Comerica officials said that they are eager to expand in California, particularly in the San Diego, San Jose, and Sacramento markets.

By purchasing Imperial, Comerica becomes the fourth-largest bank in the state, with $12 billion of assets and $10 billion of deposits there. Comerica California will focus on small-business lending.

The growth in California will not supplant Comerica’s focus on its home base of Michigan, which Fifth Third Bancorp and ABN Amro are entering, Mr. Miller said.

Fifth Third recently announced that it would buy Old Kent Financial Corp. of Grand Rapids, Mich., in a $4.9 billion stock deal, which would make it the third-largest bank in the state. ABN Amro, the parent company of Standard Federal Bank in Troy, Mich., is pursuing a deal to purchase Michigan National Corp.

“We are the dominant bank in Michigan,” Mr. Miller said. “Our markets have always been very competitive. We are accustomed to the competition.”

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