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Commerce's Profits Fall Flat

The New Jersey lender sees more margin pressure.
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Third-quarter earnings at New Jersey's

Commerce Bancorp

(CBH) - Get AllianzGI Convertible & Income 2024 Target Term Fund Report

were flat, as the regional lender continues to see its net interest margin get crimped.

In the quarter, Commerce earned $79.6 million, or 41 cents a share, compared to $79.4 million, or 45 cents a share, in the year period. In the most recent quarter, the bank reported a big gain in the number of shares outstanding, resulting in the decline in earnings per share.

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Revenue at the bank rose 15% to $472.5 million.

Earnings matched the Thomson Financial consensus earnings estimate. But total revenue fell a bit short of the analyst estimate of $478 million.

In the quarter, Commerce reported robust growth in assets and deposits, which each category rising 19%.

Net interest income--the profit the bank makes from its lending and investing operations--rose 12% to $322 million.

But Commerce continues to grapple with a tricky interest rate environment for banks. The narrow spread between short- and long-term interest rates reduced the profitability of some of the bank's investment. The narrowing spread, or so-called flattening yield curve, reduced the bank's net interest margin to 3.27%, down from 3.39% in the second-quarter of this year.

Net interest margin is a measurement of the profitability of a bank's lending and investing operation.