This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Commerce Beats as Spread Narrows

  • Third-quarter earnings of 75 cents a share beat consensus EPS estimate of 72 cents.
  • ROA of 1.28%, ROE 11.6%.
  • Average loans grow 2% sequentially, 4% year-over-year..
  • Net yield on earning assets down 25 basis points quarter-over-quarter.

NEW YORK ( TheStreet) -- Commerce Bancshares (CBSH - Get Report) continued its overall strong performance during the third quarter, despite significant earnings pressure in the prolonged low-rate environment.

The Kansas City, Mo., lender reported third-quarter earnings of $66.0 million, or 75 cents share, bearing the consensus estimate of a 72-cent profit, among analysts polled by Thomson Reuters. Earnings increased declined from $70.7 million, or 80 cents a share, the previous quarter, but increased from $65.4 million, or 72 cents a share, a year earlier.

The year-over-year earnings improvement mainly reflected a decline in the quarterly provision for loan losses to $5.6 million, from $11.4 million. Commerce Bancorp's overall asset quality remained very strong, with nonperforming assets -- including nonaccrual loans, loans past due 90 days or more, but still accruing, and repossessed real estate -- making up just 0.41% of total assets, as of Sept. 30.

During the third quarter, the company faced continued pressure on its net interest margin, in line with most banks, as the Federal Reserve's target federal funds rate has remained in a range of zero to 0.25% since the end of 2008, and the central bank last month increased its purchasing of log-term mortgage-backed securities -- QE3 -- in an effort to push long-term rates lower, or at least keep them at their historically low levels.

Commerce's third-quarter net yield on interest earning assets was 3.30%, declining from 3.55% during the second quarter, and 3.51% during the third quarter of 2011. CEO David Kemper said that "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." Excluding the second-quarter TIPS income and the non-recurring net interest income, the company's second-quarter net yield would have been 3.40%.

Third-quarter net interest income totaled $153.8 million, declining from $165.1 million the previous quarter, and $158.6 million, a year earlier.

The company grew its average loans by 2% sequentially, and 3% year-over-year, to $9.4 billion, as of Sept. 30, with growth across most loan categories, except for commercial real estate, construction and land development loans.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CBSH $46.31 0.00%
AAPL $112.12 0.00%
FB $93.24 0.00%
GOOG $643.61 0.00%
TSLA $220.69 0.00%


Chart of I:DJI
DOW 17,084.49 +33.74 0.20%
S&P 500 2,014.89 +15.91 0.80%
NASDAQ 4,830.47 +19.6820 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs