Commerce Bancorp's

(CBH) - Get Report

first-quarter earnings were little changed from a year ago, as deposit growth was offset by the profit-depressing impact of a flat yield curve.

Commerce earned $77.3 million, or 41 cents a share, in the quarter, compared with $77.1 million, or 45 cents a share, a year ago. The company's average outstanding diluted share count rose to 190 million in the most recent quarter from 176 million a year ago.

Analysts surveyed by Thomson First Call were forecasting earnings of 40 cents a share in the latest period.

Commerce's total assets were $40.7 billion at the end of the quarter, up 28% from a year ago and up 6% from the end of the fourth quarter. Core deposits were $35.9 billion, up 28% from a year ago and 6% from the previous period.

Net interest income for the first quarter totaled $307.9 million, a 10% increase over the $278.9 million recorded a year ago, as deposits grew but the spread on loans as measured by the net interest margin fell to 3.53% from 4.04% a year ago.

Like virtually all lenders, Commerce has been hamstrung by the so-called flattened yield curve, in which short- and long-term interest rates have converged. Since banks make money by borrowing short term and lending long term, the reduced spread crimps profitability.

"Commerce business customers continue to benefit from the same convenience, advanced technology and personalized service as the company's retail customers," Commerce said. "As evidenced by commercial core deposits and loans, the company's service-oriented model continues to produce significant growth in our commercial business."