reported a 33% jump in fourth-quarter earnings, but revenue at the regional lender fell a bit shy of Wall Street expectations.
In the quarter, the Cherry Hill, N.J., bank earned $75.1 million, or 88 cents a share, up from $56.6 million, or 70 cents a share, a year ago. Total revenue rose 24% from a year ago to $375 million.
The bank beat the Thomson Financial consensus estimate by a penny. But total revenue fell short of the Wall Street estimate of $385.6 million.
Commerce says it expects to meet or exceed the 90 cents-a-share consensus estimate for the first quarter, and the $3.81-a-share estimate for all of 2005.
Total deposits at the bank, which operates 319 branches in New Jersey, New York and Pennsylvania, rose 34% over the prior year period to $27.7 billion.
In a press release, Commerce Chairman and President Vernon Hill called the bank's results "another record quarter of performance."
The past year, however, was a challenging one for Commerce, which became embroiled in a Philadelphia municipal corruption scandal. Federal prosecutors charged that two executives at a Commerce subsidiary were part of a criminal conspiracy to arrange special loans for a former Philadelphia official, who in turn awarded lucrative bond underwriting and other banking deals to Commerce. The executives pleaded innocent, and Commerce has denied any wider involvement in the scandal.
But the investigation led Commerce to announce it was getting out of the municipal bond underwriting business. Last month, the bank said it got a subpoena from the
Securities and Exchange Commission,
which is looking into how past political donations by the bank may have influenced some of its Pennsylvania municipal bond deals.
To date, the investigations have not had any appreciable impact on Commerce's rapid growth.
Net interest income for the fourth quarter totaled $278.4 million, a 29% increase from the prior year. Net interest income is the profit the bank generates from its lending and deposit operation.
At the same time, however, Commerce's net interest margin got squeezed in the quarter, an indication of negative impact of rising rates and the flattening yield curve -- the spread between short- and long-term rates. In the quarter, the net interest margin declined to 4.16%, down from 4.27% a year ago, and down from 4.29% in the third quarter of this year.
Noninterest income increased by 10% to $96.5 million, largely due to an increase in deposit charges and servicing fees.
The bank plans to open up to 60 new branches in the coming year.
In after-hours trading, Commerce shares fell 30 cents to $62.15.