Commerce reports record earnings for second quarter 2002

Commerce Bancshares Inc. announced record earnings of 75 cents per share for the three months ended June 30 an increase of 10.3 percent compared to 68 cents per share in 2001. Net income for the second quarter amounted to $50.1 million compared with $45.8 million in the same period last year.

For the quarter, the return on realized equity was 15.6 percent and the return on assets was 1.65 percent. The efficiency ratio for the quarter decreased to 57.7 percent.

For the first six months ended June 30, 2002, earnings per share totaled $1.46, an increase of 9 percent compared with $1.34 in 2001. Net income amounted to $97 million compared with $89.7 million for 2001, an increase of 8.2 percent.

"We are pleased to report double-digit earnings-per-share growth for the second quarter and strong results for the first half of the year," stated David W. Kemper, chairman and chief executive officer, in announcing the results.

"This performance was led by continued improvement in net interest income and lower credit costs. Stable interest rates and continued re-pricing of certificate of deposit accounts contributed to a 13-basis-point improvement in the net interest margin in the second quarter," he added.

"While an uncertain economy is limiting new lending opportunities and growth in some fee-based business lines, improvements in credit costs and a flattening of general overhead expenses are offsetting this slower revenue growth," Kemper said.

Total assets at June 30 were $12.3 billion, total loans were $7.7 billion, and total deposits were $9.8 billion. At June 30, 2002, the allowance for loan losses totaled $130 million and was 450 percent of non-performing assets.

Commerce Bancshares, Inc. is a registered bank holding company offering a full line of banking services, including investment management and securities brokerage. Commerce operates in more than 340 banking locations in Missouri, Illinois and Kansas.