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Commerce Bancshares, Inc. Reports Fourth Quarter Earnings Per Share of $.94

Business Wire - Wed Jan 19, 2022

Commerce Bancshares, Inc. announced earnings of $.94 per share for the three months ended December 31, 2021, compared to $1.05 per common share in the same quarter last year and $.99 per share in the third quarter of 2021. Net income attributable to Commerce Bancshares, Inc. (net income) for the fourth quarter of 2021 amounted to $114.9 million, compared to $129.9 million in the fourth quarter of 2020 and $122.6 million in the prior quarter.

In announcing these results, John Kemper, Chief Executive Officer, said, “Commerce had a strong quarter to close out 2021, reflecting a growing economy and a resilient customer base. Trust fees were up 16.5% over the fourth quarter of 2020, driven by rising market values, excellent customer attraction and retention, and the ongoing investments we’ve made in our wealth business. Corporate and retail spending levels continued to increase, amounting to growth of 12% in bank card transaction fees over the same period last year.

The growth in our fee-based businesses continues to provide strong revenue diversification. Non-interest income comprised 42% of total revenue in the fourth quarter. Compared to the previous quarter, we experienced higher loan demand, a reflection of accelerating business activity in our markets. We continue to be confident in our strong liquidity, capital levels, and credit quality, and we continue to invest in our excellent relationships with customers, teammates, shareholders, and regulators.”

Fourth Quarter 2021 Financial Highlights:

  • Net interest income in the fourth quarter amounted to $207.7 million, a 3.0% decrease compared to the third quarter, partly due to a $5.3 million decrease in interest income from Paycheck Protection Program (PPP) loans. The net interest margin decreased 15 basis points from the prior quarter to 2.43%.
  • Non-interest income totaled $147.7 million in the fourth quarter, an increase of $10.2 million compared to the prior quarter.
  • Net investment securities losses of $9.7 million this quarter were driven mostly by net fair value losses of $6.5 million in the Company’s portfolio of private equity investments.
  • Non-interest expense totaled $203.6 for the quarter, a decrease of $8.0 million compared to the previous quarter.
  • Average loan balances totaled $15.1 billion, a decrease of $165.9 million, or 1.1%, from the prior quarter (average PPP loan balances declined $356.1 million). As of December 31, 2021, 93% of PPP loan balances have been forgiven.
  • Total average available for sale debt securities increased 5.3%, or $726.3 million, over the previous quarter to $14.5 billion, at fair value. Purchases of securities during the quarter totaled $1.4 billion with a weighted average yield of approximately 1.27%.
  • Compared to the previous quarter, average deposits grew $790.6 million, or 2.8%. The average rate paid on interest bearing deposits was 5 basis points this quarter.
  • The ratio of annualized net loan charge-offs to average loans was .11% in the current quarter compared to .10% in the prior quarter. Net charge-offs on loans remained low.
  • Non-accrual loans totaled $9.2 million compared to $10.4 million prior quarter. Non-accrual loans were .06% of total loans.
  • At December 31, 2021, the allowance for credit losses on loans decreased to $150.0 million. The allowance for credit losses on loans to total loans was .99% at December 31, 2021.
  • The Company purchased 696,367 shares of its common stock this quarter at an average price of $70.81.
  • Total assets at December 31, 2021 were $36.7 billion, an increase of $2.2 billion, or 6.4%, from the prior quarter.
  • For the quarter, the return on average assets was 1.28%, the return on average equity was 13.11% and the efficiency ratio was 57.3%.

Commerce Bancshares, Inc. is a regional bank holding company offering a full line of banking services, including payment solutions, investment management and securities brokerage. Commerce Bank, a subsidiary of Commerce Bancshares, Inc., leverages more than 150 years of proven strength and experience to help individuals and businesses solve financial challenges. In addition to offering payment solutions across the U.S., Commerce Bank currently operates full-service banking facilities across the Midwest including the St. Louis and Kansas City metropolitan areas, Springfield, Central Missouri, Central Illinois, Wichita, Tulsa, Oklahoma City, and Denver. It also maintains commercial offices in Dallas, Houston, Cincinnati, Nashville, Des Moines, Indianapolis, and Grand Rapids. Commerce delivers high-touch service and sophisticated financial solutions at regional branches, commercial offices, ATMs, online, mobile and through a 24/7 customer service line.

This financial news release and the supplementary Earnings Highlights presentation are available on the Company’s website at https://investor.commercebank.com/news-info/financial-news-releases/default.aspx.

COMMERCE BANCSHARES, INC. and SUBSIDIARIES

FINANCIAL HIGHLIGHTS

 

 

For the Three Months Ended

For the Year Ended

(Unaudited)

(Dollars in thousands, except per share data)

 

Dec. 31,

2021

Sep. 30,

2021

Dec. 31,

2020

Dec. 31,

2021

Dec. 31,

2020

FINANCIAL SUMMARY

 

 

Net interest income

 

$207,657

 

$214,037

 

$209,763

 

$835,424

 

$829,847

 

Non-interest income

 

147,699

 

137,506

 

135,117

 

560,393

 

505,867

 

Total revenue

 

355,356

 

351,543

 

344,880

 

1,395,817

 

1,335,714

 

Investment securities gains (losses), net

 

(9,706

)

13,108

 

12,307

 

30,059

 

11,032

 

Provision for credit losses

 

(7,054

)

(7,385

)

(4,403

)

(66,326

)

137,190

 

Non-interest expense

 

203,582

 

211,620

 

196,310

 

805,901

 

768,378

 

Income before taxes

 

149,122

 

160,416

 

165,280

 

686,301

 

441,178

 

Income taxes

 

33,764

 

34,662

 

33,084

 

145,711

 

87,293

 

(Income) loss attributable to non-controlling interest

 

452

 

3,193

 

2,307

 

9,825

 

(172

)

Net income attributable to Commerce Bancshares, Inc.

114,906

 

122,561

 

129,889

 

530,765

 

354,057

 

Preferred stock dividends

 

 

 

 

 

11,966

 

Net income available to common shareholders

$114,906

 

$122,561

 

$129,889

 

$530,765

 

$342,091

 

Earnings per common share:

 

 

 

 

 

 

Net income — basic

 

$0.94

 

$1.00

 

$1.05

 

$4.32

 

$2.77

 

Net income — diluted

 

$0.94

 

$0.99

 

$1.05

 

$4.31

 

$2.77

 

Effective tax rate

 

22.71

%

22.05

%

20.30

%

21.54