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

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, 2013 compared to $.72 per share in both the previous quarter and the third quarter of 2012. Net income for the third quarter amounted to $68.2 million, compared to $66.0 million in the same quarter last year and $65.8 million last quarter. For the quarter, the return on average assets totaled 1.26%, the return on average equity was 12.7% and the efficiency ratio was 59.7%.

For the nine months ended September 30, 2013, earnings per share totaled $2.14 compared to $2.18 in the first nine months of 2012. Net income amounted to $195.0 million for the first nine months of 2013 compared with $202.5 million for the same period last year. The return on average assets for the first nine months was 1.20% and the return on average equity was 12.0%.


In announcing these results, David W. Kemper, Chairman and CEO, said, "This quarter we continued to see strong loan growth coupled with higher fee income and solid expense management. We also completed our merger with Summit Bancshares in Tulsa and look forward to new growth potential in Oklahoma. Compared to the previous quarter and excluding the effects of Summit, average loans increased $251 million, or 10% annualized. Nearly half of the growth this quarter came from business loan demand, while personal real estate and consumer loans grew by 14% and 11% annualized, respectively. Our corporate card business also reported solid results this quarter with revenues up 18% over the same period last year. Fees from trust, brokerage, and other cash management activities have all contributed to our growth in non-interest income of over 5% compared to the same quarter last year. Non-interest expense remains well controlled and has essentially remained flat all year."

Further, Mr. Kemper noted, "Net loan charge-offs for the current quarter totaled $6.6 million, compared to $9.4 million in the previous quarter and $9.1 million last year. Fewer credit card loan charge-offs coupled with low loan losses and larger net loan recoveries on commercial loans helped to reduce these loss levels. During the current quarter, the provision for loan losses totaled $4.1 million, or $2.5 million less than net loan charge-offs. Our allowance for loan losses amounted to $163.5 million this quarter, representing 3.6 times our non-performing assets. Total non-performing assets decreased $7.7 million from the previous quarter to $44.8 million this quarter."

Total assets at September 30, 2013 were $22.5 billion, total loans were $10.8 billion, and total deposits were $18.2 billion. During the quarter, the Company repurchased approximately 547,000 shares of its common stock at an average price per share of $43.70. Also, on September 1, 2013, the Company completed its acquisition of Summit Bancshares, Inc., Tulsa, Oklahoma, adding $207 million in loans and $232 million in deposits.

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)  6/30/2013   9/30/2013   9/30/2012 
Non-Accrual Loans $39,092 $37,846 $55,201
Foreclosed Real Estate $13,434  $6,961  $18,234 
Total Non-Performing Assets $52,526  $44,807  $73,435 
Non-Performing Assets to Loans .51% .41% .76%
Non-Performing Assets to Total Assets .24% .20% .35%
Loans 90 Days & Over Past Due — Still Accruing $12,509  $11,515  $12,232 
 

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 EndedFor the Nine Months Ended
(Unaudited) June 30,
2013
 September 30,
2013
 September 30,
2012
   September 30,
2013
 September 30,
2012
 
FINANCIAL SUMMARY(In thousands, except per share data)
Net interest income$159,458$154,706$153,811$464,507$478,653
Taxable equivalent net interest income165,942161,074159,934483,724496,786
Non-interest income102,676106,311100,922308,864296,321
Investment securities gains (losses), net(1,568)6503,180(3,083)8,556
Provision for loan losses7,3794,1465,58114,81018,961
Non-interest expense156,966156,312153,391468,315460,192
Net income attributable to Commerce Bancshares, Inc.65,80568,22466,006195,046202,538
Cash dividends20,43120,67020,16561,53660,819
Net total loan charge-offs (recoveries)9,3796,6469,08223,81028,461
Business(87)(654)202(791)(3,288)
Real estate — construction and land(744)(1,635)(102

)

 

(2,911)234
Real estate — business1,25358(25

)

 

1,2073,309
Consumer credit card6,9356,0286,27719,01118,380
Consumer1,4522,0681,7915,2296,396
Revolving home equity156953143901,617
Real estate — personal1723242678691,015
Overdraft242362358806798
Per common share:
Net income — basic$.72$.75$.71$2.14$2.18
Net income — diluted$.72$.75$.72$2.14$2.18
Cash dividends$.225$.225$.219$.675$.657
Diluted wtd. average shares o/s 90,159 90,452 91,552   90,352 92,195 
RATIOS
Average loans to deposits (1)56.68%58.33%56.89%56.56%55.89%
Return on total average assets1.20%1.26%1.28%1.20%1.32%
Return on total average equity12.07%12.69%11.57%12.05%12.13%
Non-interest income to revenue (2)39.17%40.73%39.62%39.94%38.24%
Efficiency ratio (3) 59.73%59.72%59.99% 60.38%59.14%
AT PERIOD END
Book value per share based on total equity$23.23$23.90$25.08
Market value per share$43.55$43.81$38.41
Allowance for loan losses as a percentage of loans1.60%1.51%1.82

%

 

Tier I leverage ratio9.08%9.43%10.00

%

 

Tangible common equity to assets ratio (4)9.06%

9.10

%10.47

%

 

Common shares outstanding90,673,95391,259,84891,988,811
Shareholders of record4,1074,1354,146
Number of bank/ATM locations356359362
Full-time equivalent employees 4,720 4,728 4,707  
OTHER QTD INFORMATION
High market value per share$44.62$47.52$40.70
Low market value per share $38.46 $42.04 $35.91  

(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 EndedFor the Nine Months Ended
(Unaudited)

(In thousands, except per share data)

  June 30,
2013
  September 30,
2013
  September 30,
2012
   September 30,
2013
  September 30,
2012
 
Interest income$167,255 $162,144 $163,194$488,144 $507,784
Interest expense7,797 7,438 9,383 23,637 29,131 
Net interest income159,458154,706153,811464,507478,653
Provision for loan losses7,379 4,146 5,581 14,810 18,961 
Net interest income after provision for loan losses152,079 150,560 148,230 449,697 459,692 
NON-INTEREST INCOME
Bank card transaction fees40,70043,89139,488123,141112,655
Trust fees25,73425,31823,68176,22170,328
Deposit account charges and other fees19,60220,19719,87358,51159,184
Capital market fees3,3053,2425,11010,93816,991
Consumer brokerage services2,8532,8712,4418,4107,543
Loan fees and sales1,3141,5531,3584,3404,625
Other9,168 9,239 8,971 27,303 24,995 
Total non-interest income102,676 106,311 100,922 308,864 296,321 
INVESTMENT SECURITIES GAINS
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