, showing little ill effect from its part in a municipal corruption scandal, posted a 42% gain in third-quarter profits Tuesday.
The fast-growing New Jersey lender earned $70.1 million, or 84 cents a share, in the three months ended Sept. 30, compared with $49.5 million, or 67 cents a share, in the year-ago period. The bank beat the Thomson Financial consensus estimate by a penny.
Revenue rose 31% over last year to $364 million on strong deposit and loan growth at the bank. The bank's revenue figure was a tad above the consensus estimate of $363 million.
The solid quarter is an indication that the Cherry Hill, N.J., bank hasn't suffered much despite a summer full of scandal.
In June, federal prosecutors indicted two top officers of Commerce's Pennsylvania subsidiary for allegedly taking part in a Philadelphia city government influence-peddling conspiracy. The bankers are charged with arranging special loans for a former Philadelphia official in order to secure municipal bond work for the bank.
The bankers have denied the allegations and prosecutors haven't implicated anyone else at Commerce. In response to the scandal, Commerce announced this summer it was getting out of the municipal bond underwriting business.
Commerce's quick response helped stabilize its stock, which initially lost 20% of its value. Shares have been on the rise ever since, as investors have come to believe the bank is out of the woods and can focus again on its history of generating high double-digit profit growth.
In midday trading, Commerce's stock was up 23 cents to $58.81. The stock is trading just 3% below the price it was at on the day the scandal broke in late June.
Total deposits at the bank rose 35% compared to a year ago to $25 billion. Government deposit growth was particularly strong, rising 65% to $4.7 billion.
Some had predicted Commerce's municipal government business would be negatively impacted by the influence peddling scandal. But so far, the bank is proving the doubters wrong. In the quarter, Commerce said it established 46 new government cash management relationships.
In the fourth quarter, the bank expects to open 23 new branches, nearly four times as many as it opened in the third quarter.
The bank expects to earn at least 86 cents a share in the fourth quarter and $3.24 for the full year, matching the current analyst forecast.