Commerce Bancshares (CBSH) in Kansas City, Mo., reported that third-quarter earnings rose about 1%, to $66 million, from a year earlier as loan demand increased.

The $20.9 billion-asset company said that earnings per share totaled 75 cents, falling short of estimates of analysts polled by Bloomberg by two cents. For the first nine months of the year, Commerce earned $202.5 million, up almost 4% from the same period a year earlier, the company said Tuesday.

Commerce benefited from loan growth, low credit losses and good expense management, David W. Kemper, chairman and chief executive, said in a news release.

Total loans rose about 4%, to $9.4 billion, from a year earlier. Business, consumer and personal and business real estate loans were all up from a year earlier.

Both noninterest and net interest income for the third quarter declined from the same period a year earlier. Net interest income totaled $153.8 million, down about 3% from a year earlier.

Noninterest income, which continued to be affected by the cap on debit card interchange fees, totaled $100.9 million, down less than 1%. Bank card transaction fees fell 6%, to $39.5 million, while trust fees climbed roughly 7%, to $23.7 million.

Noninterest expense totaled $153.4 million, down less than 1% from a year earlier and 2% from the second quarter. Salaries and employee benefits were up 4%, to $89.3 million, from a year earlier while equipment costs fell more than 7%, to $5 million.

Net loan chargeoffs totaled $9.1 million, down about 39% from a year earlier but up roughly 11% from the previous quarter. The quarter-over-quarter increase stemmed from several large commercial loan recoveries that were recorded during the second quarter, Commerce said. The provision for loan losses totaled $5.6 million, down 51% from a year earlier.

Commerce's shares were trading at $37.89 Tuesday morning, down more than 2.5% from Monday's closing.

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