Commerce Bancshares' profits surge on strong revenue growth
Commerce Bancshares in Kansas City, Mo., posted record profits in the third quarter, reporting strong growth in interest and fee income.
The $25.1 billion-asset company said in a press release Thursday that its third-quarter profit rose by 54% from a year earlier, to $114 million, or $1.03 a share. The results were 7 cents higher than estimates of analysts surveyed by FactSet Research Systems.
Net interest income increased by 14%, to $207.8 million, because of higher yields on loans and stable funding costs. Total loans rose 2.2%, to $14 billion.
Noninterest income rose 5.8%, to $123.7 million, because of an 8.3% increase in bank card transaction fees and an 8% increase in trust fees.
Noninterest expenses increased by 3.3%, to $185 million, as a result of higher salary and benefits costs and data and processing software costs. The bank’s efficiency ratio was 55.7%, down from 59.7% last year.
“We are pleased to report record earnings driven by a strong economy, higher interest rates and growth in our fee-based businesses,” John Kemper, Commerce's CEO, said in the release. Kemper succeeded his father, David Kemper, as CEO this summer. David Kemper remains chairman.
Credit quality improved as well, as net loan charge-offs fell 9.4% to $9.8 million.