Commerce announces record earnings for third quarter 2002

Commerce Bancshares Inc. announced record earnings of 78 cents per share for the three months ended Sept. 30, an increase of 15 percent compared to 68 cents per share for the same period in 2001. Net income for the third quarter amounted to $51 million, compared with $45.5 million in the same period last year.

For the quarter, the return on average assets was 1.62 percent, the return on realized equity was 15.6 percent, and the efficiency ratio was 56.7 percent.

For the nine months ended Sept. 30, earning per share totaled $2.24, an increase of 11 percent compared with $2.02 in 2001. Net income amounted to $148 million compared with $135.2 million for 2001, an increase of 10 percent.

"During the quarter, net interest income continued to grow as a result of the continued repricing of liabilities, coupled with higher investment securities levels and some loan growth," said David W. Kemper, Commerce chairman and CEO.

"For the current quarter, net interest income increased 9 percent over the same quarter last year. Even in a slow growth economy, we continue to focus on becoming more efficient. Non-interest expense was up 1 percent this quarter over the same period last year, while fee-based revenues were essentially flat."

Total assets at Sept. 30 were $13.2 billion, total loans were $8 billion and total deposits were $9.9 billion. At Sept. 30 the allowance for loan losses totaled $131 million and was 460 percent of nonperforming assets.

Kemper said that "asset quality remains strong. At September 30, 2002, nonperforming assets totaled $28.4 million, or 0.36 percent of total loans compared with $28.9 million the previous quarter. Net loan charge-offs, while rising slightly this quarter compared to last year, totaled 0.39 percent of average loans and are in line with historical levels. Our loan loss reserve totaled 1.68 percent of average loans for the third quarter."

Commerce Bancshares Inc. is a registered bank holding company with operates in more than 340 banking locations in Missouri, Illinois and Kansas. The company also has operating subsidiaries involved in mortgage banking, credit-related insurance, venture capital and real estate activities.