Commerce announces record earnings of $109.7 million

Commerce Bancshares Inc. Oct. 14 announced record earnings of $109.7 million for the first nine months ending Sept. 30, an increase of 14 percent compared to $96 million in the same period last year.

Per share earnings were $1.85 in 1998, an increase of 14 percent compared to $1.62 in 1997. Returns on assets and realized equity for the first nine months were 1.42 percent and 14.95 percent, respectively.

"This quarter continues the strong earnings momentum shown all year as a result of growth in top-line revenues in all core lines of business," said David W. Kemper, chairman and chief executive officer of Commerce. "We were especially pleased to note that our return on equity exceeded 15 percent for the second consecutive quarter, while our efficiency ratio continues to decline to 57 percent."

For the three-month quarter that ended Sept. 30, net income was $37.7 million, an increase of 10 percent, compared to $34.2 million in the third quarter of 1997. Earnings per share for the third quarter increased 10 percent to 64 cents, compared to 58 cents for the same period in the prior year.

The return on assets for the quarter was 1.43 percent, compared to 1.39 percent last year. And return on realized equity for the third quarter was 15.14 percent.

"Even with the strong loan growth we continue to maintain a healthy, conservative balance sheet which is a cornerstone strategy in building a sustainable earnings stream," Kemper said. "Loan loss reserves of $113 million exceed non-performing assets by over 268 percent and provide sound coverage. Asset quality remains good with our net charge-off ratio for the year at only 0.49 percent, and liquidity remains sound."

Kemper said the results represent the 10th consecutive quarter of double-digit growth in earnings per share.

Total assets as of Sept. 30 were $10.6 billion, total loans were $6.8 billion and total deposits were $8.8 billion.

Net charge-offs for the quarter were 0.47 percent of average loans compared to 0.43 percent in the second quarter of 1998 and 0.47 percent in the third quarter of 1997.

Book value per share based on total stockholders' equity was $18.04 Sept. 30. The market value per share was $39.38. As of Sept. 30, the shares had a year-to-date high market value of $51.63 and a low market value per share of $38.50. Commerce Bancshares stock closed trading Oct. 14 at $39. The company is traded on the NASDAQ market under the symbol CBSH.

Commerce Bancshares recently announced definitive agreements to acquire Columbus State Bank of Columbus, Kan.; Fidelity State Bank of Garden City, Kan.; and Heritage Bank of Olathe in Olathe, Kan. Columbus has assets of $84 million, Fidelity has assets of $176 million and Heritage has assets of $52 million. Commerce said the acquisitions are expected to close before the end of the year.

Commerce Bancshares is the bank's holding company that operates about 290 locations in Missouri, Illinois and Kansas.

The company offers banking services, investment management and securities brokerage. The company also has operating subsidiaries involved in mortgage banking, credit-related insurance, venture capital and real estate activities.

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