Commerce Bank's profits fall 64%

Kansas City-based Commerce Bancshares Inc. (Nasdaq: CBSH) reported a second quarter net income drop of 64.4%.

The operator of six Commerce Bank branches in Springfield posted profits of $37.6 million, compared with $105.7 million a year earlier. Diluted share earnings fell to 34 cents from 91 cents per share in second quarter 2019, according to a news release.

"While net income was lower this quarter, it was mainly impacted by additional reserves recorded for future loan losses," Commerce CEO John Kemper said in the release. "Excluding the provision for credit losses and securities losses, net income grew modestly over the first quarter."

Second quarter financial notes:
• Provision for credit losses – an estimation of potential losses due to credit risk, according to Investopedia.com – rose 582% to $80.5 million.
• Net interest income was down 4% to roughly $203 million.
• Salaries and employee benefits moved up 5.6% to $126.8 million.

Kemper also commented on the COVID-19 pandemic.

“While uncertainty surrounding the U.S. economy continued throughout the second quarter, we are cautiously optimistic about its resilience and encouraged by the strength of our customers and communities," he said in the release. "Businesses have begun to reopen and adapt to the evolving COVID-19 operating environment and customer spending is rebounding from its lows in the second quarter."

As of June 30, Commerce Bank held assets of $30.5 billion and deposits of $24.5 billion, according to the release.

CBSH shares were trading at $57.41 as of 9:50 a.m., compared with a 52-week range of $45.51 to $71.92.