Commerce Bancshares (CBSH) Tops Q4 EPS by 6c, Revenues Beat

Commerce Bancshares (NASDAQ: CBSH) reported Q4 EPS of $0.93, $0.06 better than the analyst estimate of $0.87. Revenue for the quarter came in at $346.12 million versus the consensus estimate of $336.94 million.

In announcing these results, John Kemper, Chief Executive Officer, said, “Commerce had a strong quarter, benefiting from continuing strength in the economy and in financial markets. We experienced 4% annualized average loan growth this quarter resulting from demand for business loans, primarily commercial and industrial loans, and residential mortgage loans. Fee income totaled $143.5 million this quarter, and included a one-time gain on the sale of our corporate trust business. The corporate trust divestiture will allow Commerce Trust Company to focus on the higher growth core businesses of wealth, investment management, and financial planning services for individual and institutional clients. Excluding the corporate trust business, trust fees grew 8.7% in the fourth quarter of 2019 compared to the same quarter last year. Net interest income contracted slightly in the fourth quarter of 2019 compared to the prior quarter, as yields on our loans followed the decline in interest rates, while loan growth and improved funding costs helped to offset the decline in loan rates.”

Mr. Kemper continued, “This quarter net loan charge-offs totaled $15.2 million, compared to $11.5 million in the prior quarter and $12.1 million in the fourth quarter of 2018, as the overall credit environment remained favorable. The ratio of annualized net loan charge-offs to average loans was .42% in the current quarter, compared to .32% in the previous quarter, and .34% in the fourth quarter of last year. Net loan charge-offs on commercial loans totaled $3.1 million this quarter, mostly the result of a single commercial leasing customer, while net loan charge-offs on personal banking loans increased slightly to $12.1 million. During the current quarter, the provision for loan losses equaled net loan charge-offs, and the allowance for loan losses amounted to $160.7 million at December 31, 2019, or 1.09% of period end loans. Non-performing assets totaled $10.6 million this quarter and remained at very low levels.”

For earnings history and earnings-related data on Commerce Bancshares (CBSH) click here.

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