AP NEWS

Commerce Bancshares, Inc. Reports Third Quarter Earnings Per Share of $1.03

October 11, 2018

KANSAS CITY, Mo.--(BUSINESS WIRE)--Oct 11, 2018--Commerce Bancshares, Inc. (NASDAQ: CBSH) announced record earnings of $1.03 per common share for the three months ended September 30, 2018 compared to $.67 per share in the same quarter last year and $1.01 per share in the prior quarter. Net income attributable to Commerce Bancshares, Inc. for the third quarter of 2018 amounted to $112.6 million, compared to $74.6 million in the third quarter of 2017 and $110.3 million in the prior quarter. For the quarter, the return on average assets was 1.81%, the return on average common equity was 16.4%, and the efficiency ratio was 55.7%.

For the nine months ended September 30, 2018, earnings per common share totaled $2.96 compared to $2.03 for the first nine months of 2017. Net income attributable to Commerce Bancshares, Inc. amounted to $323.9 million for the nine months ended September 30, 2018 compared to $225.0 million in the comparable period last year, an increase of 43.9%. Year to date, the return on average assets was 1.76% and the return on average common equity was 16.3%.

In announcing these results, John W. Kemper, CEO, said, “We are pleased to report record earnings driven by a strong economy, higher interest rates and growth in our fee-based businesses. Net interest income grew $3.8 million this quarter, excluding non-recurring equity dividends received in both the current and prior quarters, as the yield on our loan portfolio grew 10 basis points while funding costs remained mostly stable. Compared to the same period last year, fee income grew 5.8%, driven mainly by increases in bank card, trust and deposit fee income. Although total average loan balances were flat with the prior quarter, we continued to see growth in our construction and personal real estate loan portfolios. Also, patient health care and consumer credit card balances showed solid growth this quarter. Average deposits declined $135.6 million this quarter, but our strong liquidity has allowed us to be strategic in managing our overall funding costs.”

Mr. Kemper added, “Credit quality remains very strong as net loan charge-offs remained low, non-accrual loans declined and overall delinquencies have improved. For the current quarter, net loan charge-offs totaled $9.8 million, compared to $10.0 million in the prior quarter and $10.7 million in the same quarter last year. The decline in net loan charge-offs was mainly the result of lower consumer credit card losses this quarter, compared to the previous quarter. The ratio of annualized net loan charge-offs to average loans was .28% this quarter compared to .29% last quarter. Non-performing assets declined this quarter to $9.6 million, while the provision for loan losses totaled $10.0 million and the allowance for loan losses amounted to $159.7 million, or 1.14% of period end loans.”

Total assets at September 30, 2018 were $25.1 billion, total loans were $14.0 billion, and total deposits were $20.1 billion. During the quarter, the Company paid a common cash dividend of $.235 per share, representing a 9.8% increase over the rate paid in 2017, and also paid an annualized 6% cash dividend on its preferred stock.

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 banking facilities in nine key markets including St. Louis, Kansas City, Springfield, Central Missouri, Central Illinois, Wichita, Tulsa, Oklahoma City and Denver. The Company also maintains commercial offices in Dallas, Houston, Cincinnati, Nashville, Des Moines, Indianapolis, and Grand Rapids.

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

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