Commerce in Missouri Reports Lower Earnings on Margin Compression

Commerce Bancshares (CBSH) in Kansas City, Mo., reported lower quarterly profit as interest income fell and credit costs spiked.

The $21.9 billion-asset company's second-quarter earnings fell 7% from a year earlier, to $65.8 million, or 72 cents a share. The results still beat the estimates of analysts polled by Bloomberg by a penny.

Net interest income fell 3% from a year earlier, to $159.5 million, as the net yield on earning assets fell 34 basis points, to 3.21%. Commerce's loan portfolio rose by 10% over the past year, to $10.4 billion.

The loan-loss provision rose 41% from a year earlier, to $7.4 million; net chargeoffs rose 15%, to $9.4 million. Commerce attributed its higher chargeoffs largely to losses on credit-card loans.

Noninterest income rose 2% from the second quarter of 2012, to $102.7 million, because of an 8% rise in total fees, led by a 6% rise in bank-card fees, to $40.7 million.

In May, Commerce agreed to pay $40.6 million to buy the $261 million-asset Summit Bancshares in Tulsa, a deal that would double Commerce's assets in Oklahoma.