Commerce Bancshares Earns $1.08 A Share, Up From A Year Ago But Below Last Quarter
Net interest income fell $6.2 million from the second quarter to $308.9 million, while loans grew at an annualized rate above 7%.
Commerce Bancshares earned $1.08 per share in the third quarter, up from $1.01 a year earlier and down from $1.10 in the second quarter, the company said in an 8-K filed Tuesday. Net income was $155.0 million, against $141.5 million a year ago and $159.8 million last quarter.
What the results show
For the first nine months, net income was $456.4 million, versus $425.6 million a year earlier, and earnings per share were $3.14, versus $3.03.
Net interest income, the gap between what the bank earns on loans and securities and what it pays on deposits, fell $6.2 million from the prior quarter to $308.9 million. The net yield on interest-earning assets slipped six basis points (0.06 percentage points) to 3.71%.
The company's own discussion of results ties the drop mostly to lower interest income on investment securities and deposits with banks, and to higher interest expense on deposits. The bank sold its portfolio of inflation-protected Treasury securities (TIPS) in the second quarter, which had produced $9.1 million of inflation income that quarter. Excluding that income, the net yield was 3.66% in the second quarter against 3.71% now.
CEO John Kemper said ending loan balances grew at an annualized rate of more than 7%, and called it "another solid quarter." Average deposits fell $361.6 million, or 1.3%, from the prior quarter to $27.2 billion.
Non-interest income was $185.5 million, up $1.6 million from the prior quarter. Trust fees rose $15.0 million, or 25.7%, from a year earlier to $73.4 million, and bank card fees rose 8.0%. Non-interest expense fell $11.1 million to $285.9 million, mainly on lower litigation and professional-services costs.
Credit, buybacks and the FineMark effect
Net loan charge-offs ran at an annualized .20% of average loans, versus .19% in the prior quarter. The allowance for credit losses on loans was $197.8 million, or .93% of total loans.
The company bought back about 1.9 million shares at an average price of $58.84.
Year-over-year gains reflect the FineMark acquisition, which added $2.7 billion in loans on January 1, 2026. Salaries rose $24.1 million from a year earlier, mostly from onboarding FineMark staff, and the company booked $5.4 million of related intangible amortization.
What to watch
In an investor presentation, the company said it completed its purchase of investment banking firm Nolan & Associates on October 1, 2026. It also moved the FineMark systems conversion to February 2027 for more testing time, saying financial expectations and synergy targets are unchanged.
The next marker is February 2027, when FineMark's systems conversion is scheduled.
