Commerce Bancshares, Inc. Reports First Quarter Earnings Per Share of $1.11
KANSAS CITY, Mo.–(BUSINESS WIRE)–Commerce Bancshares, Inc. announced earnings of $1.11 per share for the three months ended March 31, 2021, compared to $.42 per common share in the same quarter last year and $1.11 per common share in the fourth quarter of 2020. Net income attributable to Commerce Bancshares, Inc. (net income) for the first quarter of 2021 amounted to $131.0 million, compared to $51.9 million in the first quarter of 2020 and $129.9 million in the prior quarter. For the quarter, the return on average assets was 1.63%, the return on average equity was 15.69% and the efficiency ratio was 56.4%.
In announcing these results, John Kemper, Chief Executive Officer, said, “This quarter we continued to see strong performance from our fee-based businesses, which are healthy and accounted for 40% of total revenue. Growth in non-interest income resulted from higher trust, mortgage banking and capital markets fees. Non-interest expense declined compared to the same quarter last year, as salaries and benefits expense was flat, while most other expense categories declined. Net income was also aided by the release of reserves for credit losses on loans. Continued economic recovery coupled with a more optimistic outlook resulted in a lower estimate of the allowance for credit losses and reduced our provision for credit losses this quarter. Net securities gains of $9.9 million were driven by an increase in the value of our portfolio of private equity investments. Compared to the previous quarter, average deposits grew $898.6 million, or 3.5%, while loan demand was mixed. Average loan balances in construction and personal real estate increased, but lower business, consumer, and consumer credit card balances kept total average loan balances relatively flat. While average business loan balances decreased $47.4 million this quarter, this includes a net decline of $102.3 million of PPP loan balances.”
Mr. Kemper continued, “This quarter, net loan charge-offs totaled $10.0 million, compared to $8.0 million in the prior quarter and $10.9 million in the first quarter of 2020. The ratio of annualized net loan charge-offs to average loans was .25% in the current quarter, .19% in the prior quarter and .30% in the first quarter of last year. Net loan charge-offs on commercial loans totaled $17 thousand this quarter compared to $572 thousand in the prior quarter. Non-performing assets decreased this quarter from $26.6 million to $23.7 million. At March 31, 2021, the allowance for credit losses on loans decreased to $200.5 million.”
Total assets at March 31, 2021 were $33.3 billion, total loans were $16.4 billion, and total deposits were $27.4 billion. During the quarter, the Company paid a cash dividend of $.263 per share, representing a 2.1% increase over the rate paid in the fourth quarter of 2020. The Company purchased 354,181 shares of its common stock this quarter.
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 first 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 | ||||||||
(Unaudited) (Dollars in thousands, except per share data) | March 31, 2021 | December 31, 2020 | March 31, 2020 | ||||||
FINANCIAL SUMMARY | |||||||||
Net interest income | $205,748 |
| $209,763 |
| $201,065 |
| |||
Non-interest income | 136,045 |
| 135,117 |
| 123,663 |
| |||
Total revenue | 341,793 |
| 344,880 |
| 324,728 |
| |||
Investment securities gains (losses), net | 9,853 |
| 12,307 |
| (13,301) |
| |||
Provision for credit losses | (6,232) |
| (4,403) |
| 57,953 |
| |||
Non-interest expense | 192,573 |
| 196,310 |
| 193,698 |
| |||
Income before taxes | 165,305 |
| 165,280 |
| 59,776 |
| |||
Income taxes | 32,076 |
| 33,084 |
| 10,173 |
| |||
Non-controlling interest (income) expense | 2,257 |
| 2,307 |
| (2,254) |
| |||
Net income attributable to Commerce Bancshares, Inc. | 130,972 |
| 129,889 |
| 51,857 |
| |||
Preferred stock dividends | — |
| — |
| 2,250 |
| |||
Net income available to common shareholders | $130,972 |
| $129,889 |
| $49,607 |
| |||
Earnings per common share: |
|
|
| ||||||
Net income — basic | $1.12 |
| $1.11 |
| $.42 |
| |||
Net income — diluted | $1.11 |
| $1.11 |
| $.42 |
| |||
Effective tax rate | 19.67 | % | 20.30 | % | 16.40 | % | |||
Tax equivalent net interest income | $208,774 |
| $213,017 |
| $204,402 |
| |||
Average total interest earning assets (1) | $ | 31,278,721 |
| $ | 30,297,922 |
| $ | 24,691,014 |
|
Diluted wtd. average shares outstanding | 116,573,405 |
| 116,507,841 |
| 116,944,735 |
| |||
|
|
|
| ||||||
RATIOS |
|
|
| ||||||
Average loans to deposits (2) | 61.79 | % | 64.05 | % | 72.57 | % | |||
Return on total average assets | 1.63 |
| 1.63 |
| 0.80 |
| |||
Return on average common equity (3) | 15.69 |
| 15.49 |
| 6.48 |
| |||
Non-interest income to total revenue | 39.80 |
| 39.18 |
| 38.08 |
| |||
Efficiency ratio (4) | 56.37 |
| 56.68 |
| 59.17 |
| |||
Net yield on interest earning assets | 2.71 |
| 2.80 |
| 3.33 |
| |||
|
|
|
| ||||||
EQUITY SUMMARY |
|
|
| ||||||
Cash dividends per common share | $.263 |
| $.257 |
| $.257 |
| |||
Cash dividends on common stock | $30,799 |
| $30,178 |
| $30,292 |
| |||
Cash dividends on preferred stock | $— |
| $— |
| $2,250 |
| |||
Book value per common share (5) | $28.34 |
| $29.03 |
| $26.54 |
| |||
Market value per common share (5) | $76.61 |
| $65.70 |
| $47.95 |
| |||
High market value per common share | $83.06 |
| $68.09 |
| $68.50 |
| |||
Low market value per common share | $64.76 |
| $52.10 |
| $43.34 |
| |||
Common shares outstanding (5) | 117,077,276 |
| 117,138,431 |
| 117,112,060 |
| |||
Tangible common equity to tangible assets (6) | 9.57 | % | 9.92 | % | 11.13 | % | |||
Tier I leverage ratio | 9.38 | % | 9.45 | % | 11.13 | % | |||
|
|
|
| ||||||
OTHER QTD INFORMATION |
|
|
| ||||||
Number of bank/ATM locations | 298 |
| 306 |
| 317 |
| |||
Full-time equivalent employees | 4,619 |
| 4,766 |
| 4,854 |
|
(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). | |
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 | |||||||||
(Unaudited) (In thousands, except per share data) | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | |||||
Interest income | $209,697 |
| $214,726 |
| $223,114 |
| $213,323 |
| $221,485 |
|
Interest expense | 3,949 |
| 4,963 |
| 7,152 |
| 10,266 |
| 20,420 |
|
Net interest income | 205,748 |
| 209,763 |
| 215,962 |
| 203,057 |
| 201,065 |
|
Provision for credit losses | (6,232) |
| (4,403) |
| 3,101 |
| 80,539 |
| 57,953 |
|
Net interest income after credit losses | 211,980 |
| 214,166 |
| 212,861 |
| 122,518 |
| 143,112 |
|
NON-INTEREST INCOME |
|
|
|
|
| |||||
Bank card transaction fees | 37,695 |
| 39,979 |
| 37,873 |
| 33,745 |
| 40,200 |
|
Trust fees | 44,127 |
| 41,961 |
| 40,769 |
| 37,942 |
| 39,965 |
|
Deposit account charges and other fees | 22,575 |
| 24,164 |
| 23,107 |
| 22,279 |
| 23,677 |
|
Capital market fees | 4,981 |
| 3,826 |
| 3,194 |
| 3,772 |
| 3,790 |
|
Consumer brokerage services | 4,081 |
| 3,996 |
| 4,011 |
| 3,011 |
| 4,077 |
|
Loan fees and sales | 10,184 |
| 9,031 |
| 9,769 |
| 4,649 |
| 3,235 |
|
Other | 12,402 |
| 12,160 |
| 10,849 |
| 12,117 |
| 8,719 |
|
Total non-interest income | 136,045 |
| 135,117 |
| 129,572 |
| 117,515 |
| 123,663 |
|
INVESTMENT SECURITIES GAINS (LOSSES), NET | 9,853 |
| 12,307 |
| 16,155 |
| (4,129) |
| (13,301) |
|
NON-INTEREST EXPENSE |
|
|
|
|
| |||||
Salaries and employee benefits | 129,033 |
| 129,983 |
| 127,308 |
| 126,759 |
| 128,937 |
|
Net occupancy | 12,021 |
| 11,570 |
| 12,058 |
| 11,269 |
| 11,748 |
|
Equipment | 4,353 |
| 4,526 |
| 4,737 |
| 4,755 |
| 4,821 |
|
Supplies and communication | 4,125 |
| 4,193 |
| 4,141 |
| 4,427 |
| 4,658 |
|
Data processing and software | 25,463 |
| 24,323 |
| 23,610 |
| 23,837 |
| 23,555 |
|
Marketing | 5,158 |
| 5,028 |
| 4,926 |
| 3,801 |
| 5,979 |
|
Other | 12,420 |
| 16,687 |
| 14,078 |
| 12,664 |
| 14,000 |
|
Total non-interest expense | 192,573 |
| 196,310 |
| 190,858 |
| 187,512 |
| 193,698 |
|
Income before income taxes | 165,305 |
| 165,280 |
| 167,730 |
| 48,392 |
| 59,776 |
|
Less income taxes | 32,076 |
| 33,084 |
| 34,375 |
| 9,661 |
| 10,173 |
|
Net income | 133,229 |
| 132,196 |
| 133,355 |
| 38,731 |
| 49,603 |
|
Less non-controlling interest expense (income) | 2,257 |
| 2,307 |
| 907 |
| (1,132) |
| (2,254) |
|
Net income attributable to Commerce Bancshares, Inc. | 130,972 |
| 129,889 |
| 132,448 |
| 39,863 |
| 51,857 |
|
Less preferred stock dividends | — |
| — |
| 7,466 |
| 2,250 |
| 2,250 |
|
Net income available to common shareholders | $130,972 |
| $129,889 |
| $124,982 |
| $37,613 |
| $49,607 |
|
Net income per common share — basic | $1.12 |
| $1.11 |
| $1.06 |
| $.32 |
| $.42 |
|
Net income per common share — diluted | $1.11 |
| $1.11 |
| $1.06 |
| $.32 |
| $.42 |
|
|
|
|
|
|
| |||||
OTHER INFORMATION |
|
|
|
|
| |||||
Return on total average assets | 1.63 | % | 1.63 | % | 1.71 | % | .54 | % | .80 | % |
Return on average common equity (1) | 15.69 |
| 15.49 |
| 15.21 |
| 4.77 |
| 6.48 |
|
Efficiency ratio (2) | 56.37 |
| 56.68 |
| 55.00 |
| 58.10 |
| 59.17 |
|
Effective tax rate | 19.67 |
| 20.30 |
| 20.61 |
| 19.51 |
| 16.40 |
|
Net yield on interest earning assets | 2.71 |
| 2.80 |
| 2.97 |
| 2.94 |
| 3.33 |
|
Tax equivalent net interest income | $208,774 |
| $213,017 |
| $219,118 |
| $206,253 |
| $204,402 |
|
(1) | Annualized net income available to common shareholders divided by average total equity less preferred stock. | |
(2) | The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of revenue. |
COMMERCE BANCSHARES, INC. and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS – PERIOD END | |||||||||
(Unaudited) (In thousands) | March 31, 2021 | December 31, 2020 | March 31, 2020 | ||||||
ASSETS |
|
|
| ||||||
Loans |
|
|
| ||||||
Business | $ | 6,624,209 |
| $ | 6,546,087 |
| $ | 5,773,865 |
|
Real estate — construction and land | 1,073,036 |
| 1,021,595 |
| 873,402 |
| |||
Real estate — business | 3,017,242 |
| 3,026,117 |
| 2,960,308 |
| |||
Real estate — personal | 2,828,418 |
| 2,820,030 |
| 2,464,819 |
| |||
Consumer | 1,966,833 |
| 1,950,502 |
| 1,941,787 |
| |||
Revolving home equity | 285,261 |
| 307,083 |
| 349,735 |
| |||
Consumer credit card | 593,833 |
| 655,078 |
| 706,753 |
| |||
Overdrafts | 3,239 |
| 3,149 |
| 3,143 |
| |||
Total loans | 16,392,071 |
| 16,329,641 |
| 15,073,812 |
| |||
Allowance for credit losses on loans | (200,527) |
| (220,834) |
| (171,653) |
| |||
Net loans | 16,191,544 |
| 16,108,807 |
| 14,902,159 |
| |||
Loans held for sale | 38,076 |
| 45,089 |
| 6,214 |
| |||
Investment securities: |
|
|
| ||||||
Available for sale debt securities | 12,528,203 |
| 12,449,264 |
| 8,678,586 |
| |||
Trading debt securities | 26,925 |
| 35,321 |
| 24,291 |
| |||
Equity securities | 4,337 |
| 4,363 |
| 4,038 |
| |||
Other securities | 155,913 |
| 156,745 |
| 155,074 |
| |||
Total investment securities | 12,715,378 |
| 12,645,693 |
| 8,861,989 |
| |||
Federal funds sold and short-term securities purchased under agreements to resell | 500 |
| — |
| 400 |
| |||
Long-term securities purchased under agreements to resell | 850,000 |
| 850,000 |
| 850,000 |
| |||
Interest earning deposits with banks | 2,017,128 |
| 1,747,363 |
| 474,156 |
| |||
Cash and due from banks | 338,666 |
| 437,563 |
| 401,185 |
| |||
Premises and equipment — net | 371,737 |
| 371,083 |
| 369,745 |
| |||
Goodwill | 138,921 |
| 138,921 |
| 138,921 |
| |||
Other intangible assets — net | 13,098 |
| 11,207 |
| 8,433 |
| |||
Other assets | 594,738 |
| 567,248 |
| 779,815 |
| |||
Total assets | $ | 33,269,786 |
| $ | 32,922,974 |
| $ | 26,793,017 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
| ||||||
Deposits: |
|
|
| ||||||
Non-interest bearing | $ | 11,076,556 |
| $ | 10,497,598 |
| $ | 6,952,236 |
|
Savings, interest checking and money market | 14,572,378 |
| 14,604,456 |
| 12,049,279 |
| |||
Certificates of deposit of less than $100,000 | 504,472 |
| 529,802 |
| 619,758 |
| |||
Certificates of deposit of $100,000 and over | 1,267,219 |
| 1,314,889 |
| 1,154,590 |
| |||
Total deposits | 27,420,625 |
| 26,946,745 |
| 20,775,863 |
| |||
Federal funds purchased and securities sold under agreements to repurchase | 1,938,110 |
| 2,098,383 |
| 1,428,013 |
| |||
Other borrowings | 3,791 |
| 802 |
| 756,461 |
| |||
Other liabilities | 589,875 |
| 477,072 |
| 580,216 |
| |||
Total liabilities | 29,952,401 |
| 29,523,002 |
| 23,540,553 |
| |||
Stockholders’ equity: |
|
|
| ||||||
Preferred stock | — |
| — |
| 144,784 |
| |||
Common stock | 589,352 |
| 589,352 |
| 563,978 |
| |||
Capital surplus | 2,420,393 |
| 2,436,288 |
| 2,133,623 |
| |||
Retained earnings | 173,173 |
| 73,000 |
| 224,643 |
| |||
Treasury stock | (39,080) |
| (32,970) |
| (69,149) |
| |||
Accumulated other comprehensive income | 168,752 |
| 331,377 |
| 253,136 |
| |||
Total stockholders’ equity | 3,312,590 |
| 3,397,047 |
| 3,251,015 |
| |||
Non-controlling interest | 4,795 |
| 2,925 |
| 1,449 |
| |||
Total equity | 3,317,385 |
| 3,399,972 |
| 3,252,464 |
| |||
Total liabilities and equity | $ | 33,269,786 |
| $ | 32,922,974 |
| $ | 26,793,017 |
|
COMMERCE BANCSHARES, INC. and SUBSIDIARIES AVERAGE BALANCE SHEETS | |||||||||||||||
(Unaudited) (In thousands) | For the Three Months Ended | ||||||||||||||
March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | |||||||||||
ASSETS: |
|
|
|
|
| ||||||||||
Loans: |
|
|
|
|
| ||||||||||
Business | $ | 6,532,921 |
| $ | 6,580,300 |
| $ | 6,709,200 |
| $ | 6,760,827 |
| $ | 5,493,657 |
|
Real estate — construction and land | 1,091,969 |
| 1,032,891 |
| 974,346 |
| 895,648 |
| 924,086 |
| |||||
Real estate — business | 3,022,979 |
| 3,029,799 |
| 2,989,652 |
| 2,962,076 |
| 2,853,632 |
| |||||
Real estate — personal | 2,826,112 |
| 2,778,462 |
| 2,722,300 |
| 2,582,484 |
| 2,390,716 |
| |||||
Consumer | 1,947,322 |
| 1,981,033 |
| 1,992,314 |
| 1,944,265 |
| 1,950,491 |
| |||||
Revolving home equity | 299,371 |
| 316,895 |
| 329,361 |
| 343,210 |
| 350,256 |
| |||||
Consumer credit card | 608,747 |
| 638,161 |
| 646,185 |
| 663,911 |
| 727,569 |
| |||||
Overdrafts | 3,546 |
| 3,762 |
| 2,689 |
| 2,912 |
| 4,044 |
| |||||
Total loans | 16,332,967 |
| 16,361,303 |
| 16,366,047 |
| 16,155,333 |
| 14,694,451 |
| |||||
Allowance for credit losses on loans | (220,512) |
| (235,484) |
| (240,286) |
| (171,616) |
| (139,482) |
| |||||
Net loans | 16,112,455 |
| 16,125,819 |
| 16,125,761 |
| 15,983,717 |
| 14,554,969 |
| |||||
Loans held for sale | 35,814 |
| 30,577 |
| 24,728 |
| 6,363 |
| 12,875 |
| |||||
Investment securities: |
|
|
|
|
| ||||||||||
U.S. government and federal agency obligations | 725,367 |
| 774,640 |
| 770,361 |
| 776,240 |
| 802,556 |
| |||||
Government-sponsored enterprise obligations | 50,801 |
| 69,133 |
| 102,749 |
| 114,518 |
| 134,296 |
| |||||
State and municipal obligations | 1,958,637 |
| 1,967,408 |
| 1,767,526 |
| 1,285,427 |
| 1,222,595 |
| |||||
Mortgage-backed securities | 6,998,521 |
| 6,646,345 |
| 6,259,926 |
| 5,325,720 |
| 4,685,782 |
| |||||
Asset-backed securities | 2,085,491 |
| 1,819,467 |
| 1,520,988 |
| 1,342,518 |
| 1,182,556 |
| |||||
Other debt securities | 570,115 |
| 533,646 |
| 514,166 |
| 406,665 |
| 321,733 |
| |||||
Unrealized gain on debt securities | 283,511 |
| 329,477 |
| 368,154 |
| 281,457 |
| 191,275 |
| |||||
Total available for sale debt securities | 12,672,443 |
| 12,140,116 |
| 11,303,870 |
| 9,532,545 |
| 8,540,793 |
| |||||
Trading debt securities | 32,320 |
| 28,040 |
| 27,267 |
| 31,981 |
| 34,055 |
| |||||
Equity securities | 4,321 |
| 4,221 |
| 4,193 |
| 4,137 |
| 4,273 |
| |||||
Other securities | 154,030 |
| 130,145 |
| 120,253 |
| 139,250 |
| 144,096 |
| |||||
Total investment securities | 12,863,114 |
| 12,302,522 |
| 11,455,583 |
| 9,707,913 |
| 8,723,217 |
| |||||
Federal funds sold and short-term securities purchased under agreements to resell | 7 |
| 355 |
| 337 |
| 92 |
| 326 |
| |||||
Long-term securities purchased under agreements to resell | 849,999 |
| 849,998 |
| 849,994 |
| 850,000 |
| 850,000 |
| |||||
Interest earning deposits with banks | 1,480,331 |
| 1,082,644 |
| 1,024,435 |
| 1,755,068 |
| 601,420 |
| |||||
Other assets | 1,308,105 |
| 1,291,907 |
| 1,389,683 |
| 1,461,528 |
| 1,368,464 |
| |||||
Total assets | $ | 32,649,825 |
| $ | 31,683,822 |
| $ | 30,870,521 |
| $ | 29,764,681 |
| $ | 26,111,271 |
|
|
|
|
|
|
| ||||||||||
LIABILITIES AND EQUITY: |
|
|
|
|
| ||||||||||
Non-interest bearing deposits | $ | 10,438,637 |
| $ | 10,275,735 |
| $ | 9,801,562 |
| $ | 8,843,408 |
| $ | 6,615,108 |
|
Savings | 1,333,177 |
| 1,234,481 |
| 1,193,079 |
| 1,111,397 |
| 952,709 |
| |||||
Interest checking and money market | 12,970,629 |
| 12,198,928 |
| 11,731,494 |
| 11,441,694 |
| 10,777,400 |
| |||||
Certificates of deposit of less than $100,000 | 516,728 |
| 542,212 |
| 573,207 |
| 605,136 |
| 622,840 |
| |||||
Certificates of deposit of $100,000 and over | 1,230,075 |
| 1,339,301 |
| 1,447,968 |
| 1,346,069 |
| 1,299,443 |
| |||||
Total deposits | 26,489,246 |
| 25,590,657 |
| 24,747,310 |
| 23,347,704 |
| 20,267,500 |
| |||||
Borrowings: |
|
|
|
|
| ||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 2,166,072 |
| 2,028,457 |
| 1,855,971 |
| 1,991,971 |
| 1,990,051 |
| |||||
Other borrowings | 831 |
| 1,013 |
| 1,225 |
| 345,162 |
| 161,698 |
| |||||
Total borrowings | 2,166,903 |
| 2,029,470 |
| 1,857,196 |
| 2,337,133 |
| 2,151,749 |
| |||||
Other liabilities | 608,212 |
| 727,569 |
| 899,890 |
| 763,524 |
| 466,980 |
| |||||
Total liabilities | 29,264,361 |
| 28,347,696 |
| 27,504,396 |
| 26,448,361 |
| 22,886,229 |
| |||||
Equity | 3,385,464 |
| 3,336,126 |
| 3,366,125 |
| 3,316,320 |
| 3,225,042 |
| |||||
Total liabilities and equity | $ | 32,649,825 |
| $ | 31,683,822 |
| $ | 30,870,521 |
| $ | 29,764,681 |
| $ | 26,111,271 |
|
COMMERCE BANCSHARES, INC. and SUBSIDIARIES AVERAGE RATES | ||||||||||
(Unaudited) | For the Three Months Ended | |||||||||
March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | ||||||
ASSETS: |
|
|
|
|
| |||||
Loans: |
|
|
|
|
| |||||
Business (1) | 3.09 | % | 3.01 | % | 2.95 | % | 2.91 | % | 3.50 | % |
Real estate — construction and land | 3.54 |
| 3.72 |
| 3.74 |
| 3.95 |
| 4.78 |
|
Real estate — business | 3.52 |
| 3.51 |
| 3.53 |
| 3.71 |
| 4.16 |
|
Real estate — personal | 3.40 |
| 3.44 |
| 3.56 |
| 3.69 |
| 3.83 |
|
Consumer | 4.02 |
| 4.07 |
| 4.19 |
| 4.48 |
| 4.78 |
|
Revolving home equity | 3.38 |
| 3.37 |
| 3.29 |
| 3.50 |
| 4.61 |
|
Consumer credit card | 10.97 |
| 11.60 |
| 11.40 |
| 11.76 |
| 12.26 |
|
Overdrafts | — |
| — |
| — |
| — |
| — |
|
Total loans | 3.66 |
| 3.69 |
| 3.69 |
| 3.80 |
| 4.39 |
|
Loans held for sale | 3.44 |
| 3.54 |
| 4.25 |
| 8.03 |
| 6.15 |
|
Investment securities: |
|
|
|
|
| |||||
U.S. government and federal agency obligations | 2.54 |
| 2.63 |
| 3.71 |
| .46 |
| 2.09 |
|
Government-sponsored enterprise obligations | 2.36 |
| 2.23 |
| 2.17 |
| 3.51 |
| 4.19 |
|
State and municipal obligations (1) | 2.46 |
| 2.44 |
| 2.53 |
| 2.97 |
| 3.11 |
|
Mortgage-backed securities | 1.39 |
| 1.37 |
| 1.95 |
| 2.17 |
| 2.37 |
|
Asset-backed securities | 1.39 |
| 1.59 |
| 1.90 |
| 2.25 |
| 2.63 |
|
Other debt securities | 2.15 |
| 2.19 |
| 2.35 |
| 2.49 |
| 2.94 |
|
Total available for sale debt securities | 1.67 |
| 1.70 |
| 2.18 |
| 2.18 |
| 2.54 |
|
Trading debt securities (1) | 1.08 |
| 1.40 |
| 1.66 |
| 2.93 |
| 2.52 |
|
Equity securities (1) | 49.56 |
| 50.71 |
| 47.15 |
| 48.42 |
| 46.78 |
|
Other securities (1) | 5.26 |
| 10.03 |
| 6.74 |
| 4.36 |
| 5.31 |
|
Total investment securities | 1.72 |
| 1.81 |
| 2.24 |
| 2.24 |
| 2.61 |
|
Federal funds sold and short-term securities purchased under agreements to resell | — |
| 1.12 |
| — |
| — |
| 2.47 |
|
Long-term securities purchased under agreements to resell | 5.31 |
| 5.24 |
| 5.26 |
| 5.08 |
| 3.53 |
|
Interest earning deposits with banks | .10 |
| .10 |
| .10 |
| .10 |
| .86 |
|
Total interest earning assets | 2.76 |
| 2.86 |
| 3.07 |
| 3.09 |
| 3.66 |
|
|
|
|
|
|
| |||||
LIABILITIES AND EQUITY: |
|
|
|
|
| |||||
Interest bearing deposits: |
|
|
|
|
| |||||
Savings | .08 |
| .09 |
| .09 |
| .09 |
| .11 |
|
Interest checking and money market | .06 |
| .07 |
| .10 |
| .13 |
| .30 |
|
Certificates of deposit of less than $100,000 | .37 |
| .51 |
| .71 |
| .93 |
| 1.15 |
|
Certificates of deposit of $100,000 and over | .35 |
| .47 |
| .69 |
| 1.08 |
| 1.62 |
|
Total interest bearing deposits | .09 |
| .12 |
| .18 |
| .25 |
| .45 |
|
Borrowings: |
|
|
|
|
| |||||
Federal funds purchased and securities sold under agreements to repurchase | .06 |
| .06 |
| .09 |
| .12 |
| .96 |
|
Other borrowings | .98 |
| — |
| — |
| .82 |
| .82 |
|
Total borrowings | .06 |
| .06 |
| .09 |
| .22 |
| .95 |
|
Total interest bearing liabilities | .09 | % | .11 | % | .17 | % | .25 | % | .52 | % |
|
|
|
|
|
| |||||
Net yield on interest earning assets | 2.71 | % | 2.80 | % | 2.97 | % | 2.94 | % | 3.33 | % |
(1) | Stated on a tax equivalent basis using a federal income tax rate of 21%. |
COMMERCE BANCSHARES, INC. and SUBSIDIARIES CREDIT QUALITY | |||||||||||||||
| For the Three Months Ended | ||||||||||||||
(Unaudited) (In thousands, except per share data) | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | ||||||||||
ALLOWANCE FOR CREDIT LOSSES ON LOANS |
|
|
|
|
| ||||||||||
Balance at beginning of period | $ | 220,834 |
| $ | 236,360 |
| $ | 240,744 |
| $ | 171,653 |
| $ | 160,682 |
|
Adoption of ASU 2016-13 | — |
| — |
| — |
| — |
| (21,039) |
| |||||
Provision for credit losses on loans | (10,355) |
| (7,510) |
| 3,200 |
| 77,491 |
| 42,868 |
| |||||
Net charge-offs (recoveries): |
|
|
|
|
| ||||||||||
Commercial portfolio: |
|
|
|
|
| ||||||||||
Business | (4) |
| 581 |
| 208 |
| 3,249 |
| (373) |
| |||||
Real estate — construction and land | 1 |
| (2) |
| (1) |
| — |
| — |
| |||||
Real estate — business | 20 |
| (7) |
| (13) |
| (6) |
| (21) |
| |||||
| 17 |
| 572 |
| 194 |
| 3,243 |
| (394) |
| |||||
Personal banking portfolio: |
|
|
|
|
| ||||||||||
Consumer credit card | 8,981 |
| 5,975 |
| 7,263 |
| 3,584 |
| 9,157 |
| |||||
Consumer | 763 |
| 1,160 |
| 211 |
| 1,362 |
| 1,711 |
| |||||
Overdraft | 153 |
| 335 |
| 200 |
| 316 |
| 426 |
| |||||
Real estate — personal | 15 |
| (18) |
| (198) |
| (71) |
| (4) |
| |||||
Revolving home equity | 23 |
| (8) |
| (86) |
| (34) |
| (38) |
| |||||
| 9,935 |
| 7,444 |
| 7,390 |
| 5,157 |
| 11,252 |
| |||||
Total net loan charge-offs | 9,952 |
| 8,016 |
| 7,584 |
| 8,400 |
| 10,858 |
| |||||
Balance at end of period | $ | 200,527 |
| $ | 220,834 |
| $ | 236,360 |
| $ | 240,744 |
| $ | 171,653 |
|
LIABILITY FOR UNFUNDED LENDING COMMITMENTS | $ | 42,430 |
| $ | 38,307 |
| $ | 35,200 |
| $ | 35,299 |
| $ | 32,250 |
|
|
|
|
|
|
| ||||||||||
NET CHARGE-OFF RATIOS (1) |
|
|
|
|
| ||||||||||
Commercial portfolio: |
|
|
|
|
| ||||||||||
Business | — | % | .04 | % | .01 | % | .19 | % | (.03 | %) | |||||
Real estate — construction and land | — |
| — |
| — |
| — |
| — |
| |||||
Real estate — business | — |
| — |
| — |
| — |
| — |
| |||||
| — |
| .02 |
| .01 |
| .12 |
| (.02) |
| |||||
Personal banking portfolio: |
|
|
|
|
| ||||||||||
Consumer credit card | 5.98 |
| 3.72 |
| 4.47 |
| 2.17 |
| 5.06 |
| |||||
Consumer | .16 |
| .23 |
| .04 |
| .28 |
| .35 |
| |||||
Overdraft | 17.50 |
| 35.43 |
| 29.59 |
| 43.65 |
| 42.37 |
| |||||
Real estate — personal | — |
| — |
| (.03) |
| (.01) |
| — |
| |||||
Revolving home equity | .03 |
| (.01) |
| (.10) |
| (.04) |
| (.04) |
| |||||
| .71 |
| .52 |
| .52 |
| .37 |
| .83 |
| |||||
Total | .25 | % | .19 | % | .18 | % | .21 | % | .30 | % | |||||
|
|
|
|
|
| ||||||||||
CREDIT QUALITY RATIOS |
|
|
|
|
| ||||||||||
Non-performing assets to total loans | .14 | % | .16 | % | .25 | % | .14 | % | .07 | % | |||||
Non-performing assets to total assets | .07 |
| .08 |
| .13 |
| .08 |
| .04 |
| |||||
Allowance for credit losses on loans to total loans(2) | 1.22 |
| 1.35 |
| 1.44 |
| 1.47 |
| 1.14 |
| |||||
|
|
|
|
|
| ||||||||||
NON-PERFORMING ASSETS |
|
|
|
|
| ||||||||||
Non-accrual loans: |
|
|
|
|
| ||||||||||
Business | $ | 20,215 |
| $ | 22,524 |
| $ | 37,295 |
| $ | 19,034 |
| $ | 7,356 |
|
Real estate — construction and land | — |
| — |
| 1 |
| 1 |
| 2 |
| |||||
Real estate — business | 1,572 |
| 2,230 |
| 1,063 |
| 1,921 |
| 1,532 |
| |||||
Real estate — personal | 1,719 |
| 1,786 |
| 1,911 |
| 1,679 |
| 1,743 |
| |||||
Total | 23,506 |
| 26,540 |
| 40,270 |
| 22,635 |
| 10,633 |
| |||||
Foreclosed real estate | 208 |
| 93 |
| 57 |
| 422 |
| 422 |
| |||||
Total non-performing assets | $ | 23,714 |
| $ | 26,633 |
| $ | 40,327 |
| $ | 23,057 |
| $ | 11,055 |
|
Loans past due 90 days and still accruing interest | $ | 21,512 |
| $ | 22,190 |
| $ | 14,436 |
| $ | 24,583 |
| $ | 16,520 |
|
(1) | As a percentage of average loans (excluding loans held for sale). | |
(2) | Excluding PPP loans, the allowance for credit losses on loans to total loans was 1.34% and 1.48% as of March 31, 2021 and December 31, 2020, respectively. |
COMMERCE BANCSHARES, INC.
Management Discussion of First Quarter Results
March 31, 2021
For the quarter ended March 31, 2021, net income attributable to Commerce Bancshares, Inc. (net income) amounted to $131.0 million, compared to $129.9 million in the previous quarter and $51.9 million in the same quarter last year. The increase in net income over the previous quarter was primarily the result of higher non-interest income, lower non-interest expense, and a decrease in the provision for credit losses, partly offset by lower net interest income and net securities gains. The provision for credit losses declined this quarter, compared to the prior quarter, due to a decrease in the estimate of the allowance for credit losses on loans. Net interest income decreased this quarter mostly due to lower interest earned on loans. The net yield on interest earning assets declined nine basis points. Average loans were slightly lower compared to the previous quarter, while average available for sale debt securities grew $532.3 million, and average deposits increased $898.6 million. For the quarter, the return on average assets was 1.63%, the return on average common equity was 15.69%, and the efficiency ratio was 56.4%.
Balance Sheet Review
During the 1st quarter of 2021, average loans totaled $16.3 billion, decreased $28.3 million from the prior quarter, and increased $1.6 billion, or 11.2%, over the same quarter last year. Period end loans increased $62.
Contacts
Matthew Burkemper, Investor Relations
at 8000 Forsyth, Mailstop: CBIR-1
Clayton, MO 63105
or by telephone at (314) 746-7485
Web Site: http://www.commercebank.com
Email: [email protected]