Commerce Bancshares, Inc. Announces Third Quarter Earnings Per Share of $.75

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Commerce Bancshares, Inc. Announces Third Quarter Earnings Per Share of $.75

KANSAS CITY, Mo.--(BUSINESS WIRE)-- Commerce Bancshares, Inc. (NAS: CBSH) announced earnings of $.75 per share for the three months ended September 30, 2012 compared to $.72 per share in the third quarter of 2011, or an increase of 4.2%. Net income for the third quarter amounted to $66.0 million compared to $65.4 million in the same quarter last year and $70.7 million in the prior quarter. For the quarter, the return on average assets totaled 1.28%, the return on average equity was 11.6% and the efficiency ratio was 60.0%.

For the nine months ended September 30, 2012, earnings per share totaled $2.29 compared to $2.13 in the first nine months of 2011, an increase of 7.5%. Net income amounted to $202.5 million for the first nine months of 2012 compared with $194.8 million for the same period last year, or an increase of $7.7 million. The return on average assets for the first nine months of 2012 was 1.32%, the return on average equity was 12.1% and the efficiency ratio was 59.1%.


In announcing these results, David W. Kemper, Chairman and CEO, said, "Although record low interest rates continued to pressure our net interest income, we were pleased to report solid quarterly earnings which benefited from loan growth, low credit losses and good expense management. Compared to the previous quarter, the decline in net interest income was partly due to non-recurring interest received last quarter and a reduction of $6.2 million in interest on our inflation-protected government securities. Also, while non-interest income continued to be affected by recent debit card interchange regulations, commercial card fees grew 21.8% compared to last year and remained strong, while trust fees also increased 7.1%. Non-interest expense was flat compared to the same quarter of last year. Average loans for the quarter grew $209.4 million, or 2.3%, this quarter compared to the previous quarter and resulted from growth in business, personal real estate loans and consumer loans. Average deposits declined by $111.7 million this quarter, or .7%."

Mr. Kemper continued, "Net loan charge-offs for the current quarter totaled $9.1 million, compared to $8.2 million in the previous quarter and $14.9 million in the third quarter of 2011. The increase in net loan charge-offs this quarter resulted from several large commercial loan recoveries totaling $3.6 million which were recorded during the second quarter. Overall commercial and consumer loan charge-offs remained low this quarter. During the current quarter, the provision for loan losses totaled $5.6 million, or $3.5 million less than net loan charge-offs, reflecting improved credit trends in our loan portfolio. Our allowance for loan losses amounted to $175.0 million this quarter, representing 3.2 times our non-performing loans. Total non-performing assets also decreased $8.8 million from the previous quarter to $73.4 million this quarter."

Total assets at September 30, 2012 were $20.9 billion, total loans were $9.6 billion, and total deposits were $16.8 billion. During the quarter the Company repurchased approximately 98,000 shares of Company stock at an average price per share of $39.66.

Commerce Bancshares, Inc. is a registered bank holding company offering a full line of banking services, including investment management and securities brokerage. The Company currently operates in approximately 360 locations in Missouri, Illinois, Kansas, Oklahoma and Colorado. The Company also has operating subsidiaries involved in mortgage banking, credit related insurance, and private equity activities.

Summary of Non-Performing Assets and Past Due Loans

 
(Dollars in thousands) 6/30/2012 9/30/2012 9/30/2011
Non-Accrual Loans $62,177 $55,201 $75,912
Foreclosed Real Estate $20,095  $18,234  $23,813 
Total Non-Performing Assets $82,272  $73,435  $99,725 
Non-Performing Assets to Loans .88% .76% 1.10%
Non-Performing Assets to Total Assets .40% .35% .48%
Loans 90 Days & Over Past Due — Still Accruing $11,297  $12,232  

$

20,104

 
 

This financial news release, including management's discussion of third quarter results, is posted to the Company's web site at www.commercebank.com.

COMMERCE BANCSHARES, INC. and SUBSIDIARIES

FINANCIAL HIGHLIGHTS

 
 For the Three Months Ended For the Nine Months Ended
(Unaudited) 

June 30,
2012

 

September 30,
2012

 

September 30,
2011

 

September 30,
2012

 

September 30,
2011

FINANCIAL SUMMARY(In thousands, except per share data) 
Net interest income$165,105 $153,811 $158,630$478,653$484,313
Taxable equivalent net interest income171,186159,934164,317496,786501,575
Non-interest income100,816100,922101,632296,321298,882
Investment securities gains, net1,3363,1802,5878,5565,870
Provision for loan losses5,2155,58111,39518,96139,372
Non-interest expense156,340153,391153,746460,192461,219

Net income attributable to Commerce Bancshares, Inc.

70,73366,00665,352202,538194,839
Cash dividends20,21620,16519,52660,81959,636
Net total loan charge-offs (recoveries)8,2149,08214,89528,46148,872
Business(3,600)202889(3,288)4,338
Real estate — construction and land116(102)1,2152344,326
Real estate — business1,839(25)1,4293,3092,832
Consumer credit card5,9306,2777,10318,38024,631
Consumer1,9741,7913,2326,3969,474
Revolving home equity943314721,617783
Real estate — personal6792676731,0151,974
Overdraft333358282798514
Per common share:
Net income — basic$.80$.75$.72

$

2.29$2.14
Net income — diluted$.80$.75$.72$2.29$2.13
Cash dividends$.230$.230$.219$.690$.657
Diluted wtd. average shares o/s  87,672   87,192   89,737   87,804   90,724 
RATIOS
Average loans to deposits (1)55.26%56.89%58.29%55.89%60.27%
Return on total average assets1.38%1.28%1.32%1.32%1.37%
Return on total average equity12.80%11.57%12.15%12.13%12.41%
Non-interest income to revenue (2)37.91%39.62%39.05%38.24%38.16%
Efficiency ratio (3)  58.53%  59.99%  58.71%  59.14%  58.57%
AT PERIOD END
Book value per share based on total equity$25.47$26.33$23.95
Market value per share$37.90$40.33$33.10

Allowance for loan losses as a percentage of loans

1.90%1.82%2.07%
Tier I leverage ratio9.73%10.00%9.74%

Tangible common equity to assets ratio (4)

10.16%10.47%9.72%
Common shares outstanding87,588,53387,608,39188,924,563
Shareholders of record4,1844,1464,224
Number of bank/ATM locations361362363
Full-time equivalent employees  4,702   4,707   4,762 
OTHER QTD INFORMATION
High market value per share$41.00$42.74$41.90
Low market value per share $36.17  $37.71  $31.65 

(1)

 

Includes loans held for sale.

(2)

Revenue includes net interest income and non-interest income.

(3)

The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of revenue.

(4)

The tangible common equity ratio is calculated as stockholders' equity reduced by goodwill and other intangible assets (excluding mortgage servicing rights) divided by total assets reduced by goodwill and other intangible assets (excluding mortgage servicing rights).

 
 

COMMERCE BANCSHARES, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

 
 For the Three Months Ended For the Nine Months Ended

(Unaudited)
(In thousands, except per share data)

 

June 30,
2012

 

September 30,
2012

 

September 30,
2011

 

September 30,
2012

 

September 30,
2011

Interest income$174,624 $163,194 $170,835 $507,784 $524,748
Interest expense 9,519  9,383  12,205  29,131  40,435 
Net interest income165,105153,811158,630478,653484,313
Provision for loan losses 5,215  5,581  11,395  18,961  39,372 
Net interest income after provision for loan losses 159,890  148,230 
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