Commerce Bancshares, Inc. Announces Fourth Quarter Earnings Per Share Growth of 9%

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Commerce Bancshares, Inc. Announces Fourth Quarter Earnings Per Share Growth of 9%

KANSAS CITY, Mo.--(BUSINESS WIRE)-- Commerce Bancshares, Inc. (NAS: CBSH) announced earnings of $.72 per share for the three months ended December 31, 2012 compared to $.66 per share in the fourth quarter of 2011, or an increase of 9.1%. Net income for the fourth quarter amounted to $66.8 million, compared to $61.5 million in the same quarter last year and $66.0 million in the prior quarter. For the quarter, the return on average assets totaled 1.25%, the return on average equity was 11.6% and the efficiency ratio was 59.6%.

For the year ended December 31, 2012, earnings per share totaled $2.90 compared to $2.69 in 2011, or an increase of 7.8%. Net income amounted to $269.3 million in 2012 compared to $256.3 million for the same period last year, or an increase of $13.0 million. In 2012, the return on average assets was 1.30%, the return on average equity was 12.0% and the efficiency ratio was 59.3%.


In making this announcement, David W. Kemper, Chairman and CEO, said, "We were pleased to report record earnings in 2012 of over $269 million, which represents an increase of 5%. Current quarter results compared to the previous quarter reflected growth in net interest income, low credit costs and solid growth in both trust and bankcard fees. Strong growth in deposits coupled with continued new loan volumes and higher interest on inflation-protected securities enabled our net interest income to increase this quarter. Non-interest income increased $2.4 million this quarter compared to the previous quarter, and was up 10% compared to last year as a result of growth in commercial card fees of 25% and double digit growth in credit card and trust fee income. Expense growth this quarter was mainly centered in salaries and technology costs where we continued to make investments in our fee businesses. Average loans grew $174.5 million, or 2%, this quarter over the previous quarter from growth in both consumer and commercial lending activities while average deposits increased $720.7 million, or 4%. Record earnings over the last two years have strengthened our capital and liquidity and allowed us to pay a special dividend in December of $1.50 per share in advance of the higher tax rates now in effect."

Further, Mr. Kemper noted, "Net loan charge-offs for the current quarter totaled $10.8 million, compared to $15.6 million in the fourth quarter of 2011 and $9.1 million in the previous quarter. Commercial net loan charge-offs increased $2.0 million this quarter compared to the previous quarter while consumer loan losses declined by 3% and totaled $8.8 million. During the current quarter, the provision for loan losses totaled $8.3 million, or $2.5 million less than net loan charge-offs, reflecting improved credit trends even as loan balances increased. Our allowance for loan losses amounted to $172.5 million this quarter, representing 3.4 times our non-performing loans. Total non-performing assets also decreased $8.6 million from the previous quarter to $64.9 million this quarter."

Total assets at December 31, 2012 were $22.2 billion, total loans were $9.8 billion, and total deposits were $18.3 billion. During the quarter, the Company issued a 5% stock dividend and paid both a regular cash dividend of $.23 per share and a special cash dividend of $1.50 per share. The Company also repurchased approximately 774,000 shares of its common stock at an average price per share of $37.93 (per share price of $36.12 as adjusted for the 5% stock dividend).

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) 9/30/2012 12/31/2012 12/31/2011
Non-Accrual Loans $55,201 $51,410 $75,482
Foreclosed Real Estate $18,234  $13,453  $18,321 
Total Non-Performing Assets $73,435  $64,863  $93,803 
Non-Performing Assets to Loans .76

%

 .66

%

 1.02

%

Non-Performing Assets to Total Assets .35

%

 .29

%

 .45

%

Loans 90 Days & Over Past Due — Still Accruing $12,232  $15,347  $

14,958

 
 

This financial news release, including management's discussion of fourth 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 Year Ended
(Unaudited) September 30,
2012
 

December 31,
2012

 December 31,
2011
 

December 31,
2012

 December 31,
2011
FINANCIAL SUMMARY(In thousands, except per share data)
Net interest income$153,811 $161,253 $161,757$639,906 $646,070
Taxable equivalent net interest income159,934168,428167,940665,214669,515
Non-interest income100,922103,30994,035399,630392,917
Investment securities gains (losses), net3,180(3,728)4,9424,82810,812
Provision for loan losses5,5818,32612,14327,28751,515
Non-interest expense153,391158,277156,030618,469617,249
Net income attributable to Commerce Bancshares, Inc.66,00666,79161,504269,329256,343
Cash dividends20,165150,78919,504211,60879,140
Net total loan charge-offs (recoveries)9,08210,82615,64939,28764,521
Business202791650(2,497)4,988
Real estate — construction and land(102)(517)2,624(283)6,950
Real estate — business(25)1,7997315,1083,563
Consumer credit card6,2776,0956,98624,47531,617
Consumer1,7911,7312,6828,12712,156
Revolving home equity3141878841,8041,667
Real estate — personal2674117981,4262,772
Overdraft3583292941,127808
Per common share:
Net income — basic$.71$.73$.66$2.91$2.70
Net income — diluted$.72$.72$.66$2.90$2.69
Cash dividends$.219$1.648$.209$2.305$.834
Diluted wtd. average shares o/s  91,552   90,999   93,086   91,894   94,712 
RATIOS
Average loans to deposits (1)56.89%55.53%56.01%55.80%59.15%
Return on total average assets1.28%1.25%1.19%1.30%1.32%
Return on total average equity11.57%11.62%11.39%12.00%12.15%
Non-interest income to revenue (2)39.62%39.05%36.76%38.44%37.82%
Efficiency ratio (3)  59.99%  59.62%  60.71%  59.26%  59.10%
AT PERIOD END
Book value per share based on total equity$25.08$23.76$23.24
Market value per share$38.41$35.06$36.30
Allowance for loan losses as a percentage of loans1.82%1.75%2.01%
Tier I leverage ratio10.00%9.14%9.55%
Tangible common equity to assets ratio (4)10.47%9.25%9.91%
Common shares outstanding91,988,81191,414,30693,399,774
Shareholders of record4,1464,1354,218
Number of bank/ATM locations362362363
Full-time equivalent employees  4,707   4,708   4,745 
OTHER QTD INFORMATION
High market value per share$40.70$38.70$36.83
Low market value per share $35.91  $34.69  $29.99 

(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 Year Ended
(Unaudited)

(In thousands, except per share data)

 September 30,
2012
 

December 31,
2012

 December 31,
2011
 

December 31,
2012

 December 31,
2011
Interest income$163,194 $170,185 $173,223 $677,969 $697,971
Interest expense 9,383  8,932  11,466  38,063  51,901 
Net interest income153,811161,253161,757639,906646,070
Provision for loan losses 5,581  8,326  12,143  27,287  51,515 
Net interest income after provision for loan losses 148,230  152,927  149,614  612,619
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