Commerce Bancshares, Inc. Reports Fourth Quarter Earnings Per Share Of $1.11
01/20/2021 - 06:00 AM
Commerce Bancshares, Inc. announced earnings of $1.11 per share for the three months ended December 31, 2020, compared to $.88 per common share in the same quarter last year and $1.06 per common share in the prior quarter. Net income attributable to Commerce Bancshares, Inc. (net income) for the fourth quarter of 2020 amounted to $129.9 million, compared to $106.9 million in the fourth quarter of 2019 and $132.4 million in the prior quarter. For the quarter, the return on average assets was 1.63%, the return on average equity was 15.49%, and the efficiency ratio was 56.7%.
For the year ended December 31, 2020, earnings per common share totaled $2.91 compared to $3.41 in 2019. Net income attributable to Commerce Bancshares, Inc. amounted to $354.1 million in 2020 compared to $421.2 million last year. For the current year, the return on average assets was 1.20%, and the return on average common equity was 10.64%.
In announcing these results, John Kemper, Chief Executive Officer, said, “Commerce had a strong quarter to close out 2020. While economic uncertainty remains top of mind, overall economic conditions, most notably unemployment, continued to improve in the fourth quarter at a pace that exceeded economic forecasts. These factors, coupled with a forecast projecting an economic recovery, resulted in a decrease in the allowance for credit losses. Our portfolio of private equity investments saw unrealized gains recorded this quarter, partially offsetting unrealized losses recorded in the first half of 2020 and reflecting improvement in the overall economy. Although net interest margins continue to be pressured from a challenging interest rate environment, our fee-based businesses are rebounding from mid-year lows and provide us with a source of revenue diversification. Bank card and deposit account fees grew from last quarter with an increase in spending activity. Loan fees and sales, driven by our mortgage banking business, continued to be strong this quarter and increased 161 percent compared to the fourth quarter of 2019. Trust fees reached another record quarter, reflecting not only higher market values, but also the results of investments we’ve made across our wealth business. Non-interest expense grew .6% compared to the same quarter last year and remained well-controlled. Compared to the previous quarter, average deposits grew $843.3 million, or 3.4%, well surpassing our expectations. While deposit balances grew this quarter, loan demand was mixed. Average loan balances in construction, business real estate, and personal real estate grew, while lower demand for business loans kept total average loan balances relatively flat.”
Mr. Kemper continued, “This quarter, net loan charge-offs totaled $8.0 million, compared to $7.6 million in the prior quarter and $15.2 million in the fourth quarter of 2019. The ratio of annualized net loan charge-offs to average loans was .19% in the current quarter, .18% in the prior quarter and .42% in the fourth quarter of last year. Net loan charge-offs on commercial loans totaled $572 thousand this quarter compared to $194 thousand in the prior quarter. Non-performing assets decreased this quarter from $40.3 million to $26.6 million. At December 31, 2020, the allowance for credit losses on loans decreased to $220.8 million.”
Total assets at December 31, 2020 were $32.9 billion, total loans were $16.3 billion, and total deposits were $26.9 billion. During the fourth quarter of 2020, the Company distributed a 5% stock dividend on its common stock. The Company also paid a cash dividend of $.257 per share, as restated for the 5% stock dividend.
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, including management's discussion of fourth quarter results, is posted to the Company's web site at www.commercebank.com .
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
For the Three Months Ended
For the Year Ended
(Unaudited)
(Dollars in thousands, except per share data)
December 31,
2020
September 30,
2020
December 31,
2019
December 31,
2020
December 31,
2019
FINANCIAL SUMMARY
Net interest income
$209,763
$215,962
$202,659
$829,847
$821,293
Non-interest income
135,117
129,572
143,461
505,867
524,703
Total revenue
344,880
345,534
346,120
1,335,714
1,345,996
Investment securities gains (losses), net
12,307
16,155
(248)
11,032
3,626
Provision for credit losses
(4,403)
3,101
15,206
137,190
50,438
Non-interest expense
196,310
190,858
195,174
768,378
767,398
Income before taxes
165,280
167,730
135,492
441,178
531,786
Income taxes
33,084
34,375
28,214
87,293
109,074
Non-controlling interest (income) expense
2,307
907
398
(172)
1,481
Net income attributable to Commerce Bancshares, Inc.
129,889
132,448
106,880
354,057
421,231
Preferred stock dividends
—
7,466
2,250
11,966
9,000
Net income available to common shareholders
$129,889
$124,982
$104,630
$342,091
$412,231
Earnings per common share:
Net income — basic
$1.11
$1.06
$.89
$2.91
$3.42
Net income — diluted
$1.11
$1.06
$.88
$2.91
$3.41
Effective tax rate
20.30
%
20.61
%
20.88
%
19.78
%
20.57
%
Tax equivalent net interest income
$213,017
$219,118
$206,156
$842,790
$835,421
Average total interest earning assets (1)
$
30,297,922
$
29,352,970
$
24,372,575
$
28,143,048
$
24,034,631
Diluted wtd. average shares outstanding
116,507,841
116,444,157
117,611,663
116,584,015
119,769,634
RATIOS
Average loans to deposits (2)
64.05
%
66.23
%
71.73
%
67.73
%
71.54
%
Return on total average assets
1.63
1.71
1.65
1.20
1.67
Return on average common equity (3)
15.49
15.21
13.90
10.64
14.06
Non-interest income to total revenue
39.18
37.50
41.45
37.87
38.98
Efficiency ratio (4)
56.68
55.00
56.29
57.19
56.87
Net yield on interest earning assets
2.80
2.97
3.36
2.99
3.48
EQUITY SUMMARY
Cash dividends per common share
$.257
$.257
$.236
$1.029
$.943
Cash dividends on common stock
$30,178
$30,174
$27,933
$120,818
$113,466
Cash dividends on preferred stock (7)
$—
$7,466
$2,250
$11,966
$9,000
Book value per common share (5)
$29.03
$28.23
$25.43
Market value per common share (5)
$65.70
$53.61
$64.70
High market value per common share
$68.09
$59.13
$65.38
Low market value per common share
$52.10
$50.50
$51.96
Common shares outstanding (5)
117,138,431
117,109,209
117,738,126
Tangible common equity to tangible assets (6)
9.92
%
10.11
%
10.99
%
Tier I leverage ratio
9.45
%
9.39
%
11.38
%
OTHER QTD INFORMATION
Number of bank/ATM locations
306
308
316
Full-time equivalent employees
4,766
4,825
4,858
(1)
Excludes allowance for credit losses on loans and unrealized gains/(losses) on available for sale debt securities.
(2)
Includes loans held for sale.
(3)
Annualized net income available to common shareholders divided by average total equity less preferred stock.
(4)
The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of revenue.
(5)
As of period end.
(6)
The tangible common equity ratio is calculated as stockholders’ equity reduced by preferred stock, goodwill and other intangible assets (excluding mortgage servicing rights) divided by total assets reduced by goodwill and other intangible assets (excluding mortgage servicing rights).
(7)
For the period ended September 30, 2020, preferred stock dividends includes $5.2 million related to the preferred stock redemption. The $5.2 million is the excess of the redemption costs over the book value of the preferred stock and is considered a dividend.
All share and per share amounts have been restated to reflect the 5% stock dividend distributed in December 2020.
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended
For the Year Ended
(Unaudited)
(In thousands, except per share data)
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
December 31,
2020
December 31,
2019
Interest income
$214,726
$223,114
$213,323
$221,485
$226,665
$872,648
$924,685
Interest expense
4,963
7,152
10,266
20,420
24,006
42,801
103,392
Net interest income
209,763
215,962
203,057
201,065
202,659
829,847
821,293
Provision for credit losses
(4,403
)
3,101
80,539
57,953
15,206
137,190
50,438
Net interest income after credit losses
214,166
212,861
122,518
143,112
187,453
692,657
770,855
NON-INTEREST INCOME
Bank card transaction fees
39,979
37,873
33,745
40,200
41,079
151,797
167,879
Trust fees
41,961
40,769
37,942
39,965
40,405
160,637
155,628
Deposit account charges and other fees
24,164
23,107
22,279
23,677
24,974
93,227
95,983
Commerce Bancshares, Inc.
CBSH Rankings
#4256 Ranked by Stock Gains
CBSH Stock Data
Industry
Commercial Banking
Sector
Finance and Insurance
Tags
Finance, Regional Banks, Finance and Insurance, Commercial Banking
About CBSH
commerce bank, a missouri-based company, operates as a super-community bank offering an array of sophisticated financial products delivered with high-quality, personal customer service including: • lending; • payment systems and processing; • trust and brokerage services; • capital markets; • full-feature online banking; • a central contact center; and • an expansive atm network. commerce serves its customers in more than 200 branches in missouri, kansas, illinois, oklahoma and colorado, as well as commercial offices in cincinnati, nashville, and dallas. we believe in conducting business with the highest standards of governance and ethics. we provide products and services that meet the rising expectations of our customers; attract and retain quality employees; support our communities; and work to lessen our environmental impact. we have headquarters in kansas city and st. louis with a fifth-generation of family management and empowered local managers in our community banks.