Exhibit 99.1
|
| |
| CBSH |
| 1000 Walnut Street / Suite 700 / Kansas City, Missouri 64106 / 816.234.2000 |
|
FOR IMMEDIATE RELEASE:
Thursday, July 12, 2018
COMMERCE BANCSHARES, INC. REPORTS RECORD
SECOND QUARTER EARNINGS PER SHARE OF $1.01
Commerce Bancshares, Inc. announced record earnings of $1.01 per common share for the three months ended June 30, 2018 compared to $.71 per share in the same quarter last year and $.92 per share in the prior quarter. Net income attributable to Commerce Bancshares, Inc. for the second quarter amounted to $110.3 million, compared to $79.0 million in the second quarter of 2017 and $101.0 million in the prior quarter. For the quarter, the return on average assets was 1.80%, the return on average common equity was 16.8%, and the efficiency ratio was 54.1%.
For the six months ended June 30, 2018, earnings per common share totaled $1.93 compared to $1.36 for the first six months of 2017. Net income attributable to Commerce Bancshares, Inc. amounted to $211.3 million for the six months ended June 30, 2018 compared to $150.5 million in the comparable period last year, or an increase of 40.4%. Year to date, the return on average assets was 1.73% and the return on average common equity was 16.2%.
In making this announcement, David W. Kemper, Chairman and CEO, said, “We are pleased to report strong earnings growth this quarter as a result of an increase in top line revenue, along with stable expenses and low credit costs. Compared to the prior quarter, net interest income grew $18.1 million but included an equity dividend of $8.9 million this quarter, offset by a comparable securities loss. Excluding this item, our net interest margin grew 13 basis points this quarter to 3.50%, reflecting increased interest earned on our loan portfolio coupled with stable deposit costs. Compared to the same period last year, fee income grew 8.2%, driven mainly by increases in bank card, trust, swap and deposit fee income. While total average loan balances were flat with the prior quarter, we experienced growth in our commercial and industrial, construction, and mortgage loan portfolios. Our consumer auto loan portfolio declined mostly as a result of a sale of $25.9 million of auto loans to another financial institution this quarter.”
Mr. Kemper added, “The U.S. economy remains strong, and our credit environment continues to be very favorable. For the current quarter, net loan charge-offs totaled $10.0 million, compared to $10.4 million in the prior quarter and $10.8 million in the same quarter last year. The decline in net loan charge-offs was mainly the result of lower personal banking loan losses this quarter. The ratio of annualized net loan charge-offs to average loans was .29% this quarter compared to .30% last quarter. Non-performing assets declined this quarter to $10.5 million, while the provision for loan losses matched net loan charge-offs and the allowance for loan losses amounted to $159.5 million, or 1.14% of period end loans.”
(more)
Total assets at June 30, 2018 were $24.5 billion, total loans were $14.0 billion, and total deposits were $20.3 billion. During the quarter, the Company paid a common cash dividend of $.235 per share, representing a 9.8% increase over the rate paid in 2017, and also paid an annualized 6% cash dividend on its preferred stock.
Commerce Bancshares, Inc. is a registered bank holding company offering a full line of banking services, including investment management and securities brokerage. The Company currently operates banking facilities in nine key markets including St. Louis, Kansas City, Springfield, Central Missouri, Central Illinois, Wichita, Tulsa, Oklahoma City and Denver. The Company also maintains commercial offices in Dallas, Houston, Cincinnati, Nashville, Des Moines, Indianapolis, and Grand Rapids.
This financial news release, including management's discussion of second quarter results, is posted to the Company's web site at www.commercebank.com.
* * * * * * * * * * * * * * *
For additional information, contact
Jeffery Aberdeen, Controller
at 1000 Walnut Street, Suite 700
Kansas City, MO 64106
or by telephone at (816) 234-2081
Web Site: http://www.commercebank.com
Email: mymoney@commercebank.com
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
|
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | For the Six Months Ended |
| (Unaudited) (Dollars in thousands, except per share data) | | June 30,
2018 | March 31,
2018 | June 30,
2017 | June 30,
2018 | June 30,
2017 |
| FINANCIAL SUMMARY | | |
| Net interest income | |
| $210,959 |
|
| $192,892 |
|
| $182,807 |
|
| $403,851 |
|
| $361,080 |
|
| Non-interest income | | 124,850 |
| 119,690 |
| 115,380 |
| 244,540 |
| 224,993 |
|
| Total revenue | | 335,809 |
| 312,582 |
| 298,187 |
| 648,391 |
| 586,073 |
|
| Investment securities gains (losses), net | | (3,075 | ) | 5,410 |
| 1,651 |
| 2,335 |
| 879 |
|
| Provision for loan losses | | 10,043 |
| 10,396 |
| 10,758 |
| 20,439 |
| 21,886 |
|
| Non-interest expense | | 181,860 |
| 182,277 |
| 176,890 |
| 364,137 |
| 356,267 |
|
| Income before taxes | | 140,831 |
| 125,319 |
| 112,190 |
| 266,150 |
| 208,799 |
|
| Income taxes | | 29,507 |
| 23,258 |
| 33,201 |
| 52,765 |
| 58,108 |
|
| Non-controlling interest expense | | 994 |
| 1,077 |
| 29 |
| 2,071 |
| 227 |
|
| Net income attributable to Commerce Bancshares, Inc. | 110,330 |
| 100,984 |
| 78,960 |
| 211,314 |
| 150,464 |
|
| Preferred stock dividends | | 2,250 |
| 2,250 |
| 2,250 |
| 4,500 |
| 4,500 |
|
| Net income available to common shareholders |
| $108,080 |
|
| $98,734 |
|
| $76,710 |
|
| $206,814 |
|
| $145,964 |
|
| Earnings per common share: | | | | | | |
| Net income — basic | |
| $1.02 |
|
| $.92 |
|
| $.71 |
|
| $1.94 |
|
| $1.36 |
|
| Net income — diluted | |
| $1.01 |
|
| $.92 |
|
| $.71 |
|
| $1.93 |
|
| $1.36 |
|
| Effective tax rate | | 21.10 | % | 18.72 | % | 29.60 | % | 19.98 | % | 27.86 | % |
| Tax equivalent net interest income | |
| $215,775 |
|
| $196,638 |
|
| $190,865 |
|
| $412,413 |
|
| $378,187 |
|
Average total interest earning assets (1) | | $ | 23,683,587 |
| $ | 23,693,350 |
| $ | 24,035,661 |
| $ | 23,688,441 |
| $ | 24,143,944 |
|
Diluted wtd. average shares outstanding
| | 106,029,417 |
| 105,965,845 |
| 105,943,427 |
| 105,997,807 |
| 105,874,808 |
|
| | | | | | | |
| RATIOS | | | | | | |
Average loans to deposits (2) | | 68.85 | % | 69.09 | % | 65.25 | % | 68.97 | % | 64.82 | % |
| Return on total average assets | | 1.80 |
| 1.66 |
| 1.26 |
| 1.73 |
| 1.21 |
|
Return on average common equity (3) | | 16.78 |
| 15.58 |
| 12.48 |
| 16.19 |
| 12.12 |
|
| Non-interest income to total revenue | | 37.18 |
| 38.29 |
| 38.69 |
| 37.71 |
| 38.39 |
|
Efficiency ratio (4) | | 54.06 |
| 58.21 |
| 59.21 |
| 56.06 |
| 60.67 |
|
| Net yield on interest earning assets | | 3.65 |
| 3.37 |
| 3.18 |
| 3.51 |
| 3.16 |
|
| | | | | | | |
| EQUITY SUMMARY | | | | | | |
| Cash dividends per common share | |
| $.235 |
|
| $.235 |
|
| $.214 |
|
| $.470 |
|
| $.429 |
|
| Cash dividends on common stock | |
| $25,096 |
|
| $25,106 |
|
| $22,903 |
|
| $50,202 |
|
| $45,816 |
|
| Cash dividends on preferred stock | |
| $2,250 |
|
| $2,250 |
|
| $2,250 |
|
| $4,500 |
|
| $4,500 |
|
Book value per common share (5) | |
| $24.64 |
|
| $24.02 |
|
| $23.28 |
| | |
Market value per common share (5) | |
| $64.71 |
|
| $59.91 |
|
| $54.12 |
| | |
| High market value per common share | |
| $67.42 |
|
| $61.88 |
|
| $55.18 |
| | |
| Low market value per common share | |
| $57.87 |
|
| $54.85 |
|
| $49.54 |
| | |
Common shares outstanding (5) | | 106,614,043 |
| 106,617,497 |
| 106,697,257 |
| | |
Tangible common equity to tangible assets (6) | | 10.18 | % | 9.88 | % | 9.37 | % | | |
| Tier I leverage ratio | | 11.18 | % | 10.83 | % | 9.87 | % | | |
| | | | | | | |
| OTHER QTD INFORMATION | | | | | | |
| Number of bank/ATM locations | | 322 |
| 325 |
| 334 |
| | |
| Full-time equivalent employees | | 4,797 |
| 4,799 |
| 4,805 |
| | |
| |
| (1) | Excludes allowance for loan losses 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. |
| |
| (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). |
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME |
| | | | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | For the Six Months Ended |
(Unaudited) (In thousands, except per share data) | | June 30,
2018 | March 31,
2018 | December 31,
2017 | September 30,
2017 | June 30,
2017 | June 30,
2018 | June 30,
2017 |
| Interest income | |
| $225,623 |
|
| $205,995 |
|
| $201,572 |
|
| $194,244 |
|
| $193,594 |
|
| $431,618 |
|
| $381,591 |
|
| Interest expense | | 14,664 |
| 13,103 |
| 11,564 |
| 11,653 |
| 10,787 |
| 27,767 |
| 20,511 |
|
| Net interest income | | 210,959 |
| 192,892 |
| 190,008 |
| 182,591 |
| 182,807 |
| 403,851 |
| 361,080 |
|
| Provision for loan losses | | 10,043 |
| 10,396 |
| 12,654 |
| 10,704 |
| 10,758 |
| 20,439 |
| 21,886 |
|
| Net interest income after provision for loan losses | 200,916 |
| 182,496 |
| 177,354 |
| 171,887 |
| 172,049 |
| 383,412 |
| 339,194 |
|
| NON-INTEREST INCOME | | | | | | | | |
| Bank card transaction fees | | 43,215 |
| 41,453 |
| 42,888 |
| 39,166 |
| 37,295 |
| 84,668 |
| 73,046 |
|
| Trust fees | | 37,036 |
| 36,062 |
| 35,405 |
| 34,620 |
| 33,120 |
| 73,098 |
| 65,134 |
|
| Deposit account charges and other fees | 23,893 |
| 22,982 |
| 22,598 |
| 22,659 |
| 22,861 |
| 46,875 |
| 44,803 |
|
| Capital market fees | | 1,992 |
| 2,291 |
| 1,743 |
| 1,755 |
| 2,156 |
| 4,283 |
| 4,498 |
|
| Consumer brokerage services | | 3,971 |
| 3,768 |
| 3,576 |
| 3,679 |
| 3,726 |
| 7,739 |
| 7,375 |
|
| Loan fees and sales | | 3,229 |
| 2,862 |
| 3,099 |
| 3,590 |
| 4,091 |
| 6,091 |
| 7,259 |
|
| Other | | 11,514 |
| 10,272 |
| 10,074 |
| 11,418 |
| 12,131 |
| 21,786 |
| 22,878 |
|
| Total non-interest income | | 124,850 |
| 119,690 |
| 119,383 |
| 116,887 |
| 115,380 |
| 244,540 |
| 224,993 |
|
| INVESTMENT SECURITIES GAINS (LOSSES), NET | (3,075 | ) | 5,410 |
| 27,209 |
| (3,037 | ) | 1,651 |
| 2,335 |
| 879 |
|
| NON-INTEREST EXPENSE | | | | | | | | |
| Salaries and employee benefits | | 115,589 |
| 115,894 |
| 115,741 |
| 111,382 |
| 108,829 |
| 231,483 |
| 221,198 |
|
| Net occupancy | | 11,118 |
| 11,584 |
| 11,280 |
| 11,459 |
| 11,430 |
| 22,702 |
| 22,873 |
|
| Equipment | | 4,594 |
| 4,431 |
| 4,692 |
| 4,491 |
| 4,776 |
| 9,025 |
| 9,385 |
|
| Supplies and communication | | 5,126 |
| 5,313 |
| 6,118 |
| 5,517 |
| 5,446 |
| 10,439 |
| 11,155 |
|
| Data processing and software | | 21,016 |
| 20,690 |
| 21,090 |
| 19,968 |
| 20,035 |
| 41,706 |
| 39,940 |
|
| Marketing | | 5,142 |
| 4,805 |
| 3,937 |
| 4,676 |
| 4,488 |
| 9,947 |
| 7,712 |
|
| Deposit insurance | | 3,126 |
| 3,457 |
| 3,444 |
| 3,479 |
| 3,592 |
| 6,583 |
| 7,063 |
|
| Community service | | 656 |
| 729 |
| 25,511 |
| 3,006 |
| 2,916 |
| 1,385 |
| 5,860 |
|
| Other | | 15,493 |
| 15,374 |
| 17,046 |
| 15,239 |
| 15,378 |
| 30,867 |
| 31,081 |
|
| Total non-interest expense | | 181,860 |
| 182,277 |
| 208,859 |
| 179,217 |
| 176,890 |
| 364,137 |
| 356,267 |
|
| Income before income taxes | | 140,831 |
| 125,319 |
| 115,087 |
| 106,520 |
| 112,190 |
| 266,150 |
| 208,799 |
|
| Less income taxes | | 29,507 |
| 23,258 |
| 20,104 |
| 32,294 |
| 33,201 |
| 52,765 |
| 58,108 |
|
| Net income | | 111,324 |
| 102,061 |
| 94,983 |
| 74,226 |
| 78,989 |
| 213,385 |
| 150,691 |
|
| Less non-controlling interest expense (income) | 994 |
| 1,077 |
| 628 |
| (338 | ) | 29 |
| 2,071 |
| 227 |
|
| Net income attributable to Commerce Bancshares, Inc. | 110,330 |
| 100,984 |
| 94,355 |
| 74,564 |
| 78,960 |
| 211,314 |
| 150,464 |
|
| Less preferred stock dividends | | 2,250 |
| 2,250 |
| 2,250 |
| 2,250 |
| 2,250 |
| 4,500 |
| 4,500 |
|
| Net income available to common shareholders |
| $108,080 |
|
| $98,734 |
|
| $92,105 |
|
| $72,314 |
|
| $76,710 |
|
| $206,814 |
|
| $145,964 |
|
| Net income per common share — basic |
| $1.02 |
|
| $.92 |
|
| $.86 |
|
| $.68 |
|
| $.71 |
|
| $1.94 |
|
| $1.36 |
|
| Net income per common share — diluted |
| $1.01 |
|
| $.92 |
|
| $.86 |
|
| $.67 |
|
| $.71 |
|
| $1.93 |
|
| $1.36 |
|
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Return on total average assets | | 1.80 | % | 1.66 | % | 1.50 | % | 1.19 | % | 1.26 | % | 1.73 | % | 1.21 | % |
Return on average common equity (1) | 16.78 |
| 15.58 |
| 14.17 |
| 11.35 |
| 12.48 |
| 16.19 |
| 12.12 |
|
Efficiency ratio (2) | | 54.06 |
| 58.21 |
| 67.40 |
| 59.73 |
| 59.21 |
| 56.06 |
| 60.67 |
|
| Effective tax rate | | 21.10 |
| 18.72 |
| 17.56 |
| 30.22 |
| 29.60 |
| 19.98 |
| 27.86 |
|
Net yield on interest earning assets
| 3.65 |
| 3.37 |
| 3.29 |
| 3.17 |
| 3.18 |
| 3.51 |
| 3.16 |
|
| Tax equivalent net interest income | |
| $215,775 |
|
| $196,638 |
|
| $197,917 |
|
| $190,497 |
|
| $190,865 |
|
| $412,413 |
|
| $378,187 |
|
| |
| (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) | | June 30,
2018 | March 31,
2018 | June 30,
2017 |
| ASSETS | | | | |
| Loans | | | | |
| Business | | $ | 4,990,298 |
| $ | 4,960,614 |
| $ | 4,852,408 |
|
| Real estate — construction and land | | 967,151 |
| 932,058 |
| 848,152 |
|
| Real estate — business | | 2,727,580 |
| 2,724,584 |
| 2,727,349 |
|
| Real estate — personal | | 2,102,586 |
| 2,069,012 |
| 2,009,203 |
|
| Consumer | | 2,012,644 |
| 2,069,235 |
| 2,038,514 |
|
| Revolving home equity | | 374,557 |
| 382,825 |
| 403,387 |
|
| Consumer credit card | | 775,214 |
| 752,651 |
| 740,865 |
|
| Overdrafts | | 4,081 |
| 2,382 |
| 6,714 |
|
| Total loans | | 13,954,111 |
| 13,893,361 |
| 13,626,592 |
|
| Allowance for loan losses | | (159,532 | ) | (159,532 | ) | (157,832 | ) |
| Net loans | | 13,794,579 |
| 13,733,829 |
| 13,468,760 |
|
| Loans held for sale | | 20,352 |
| 16,435 |
| 22,002 |
|
| Investment securities: | | | | |
| Available for sale debt securities | | 8,412,376 |
| 8,432,180 |
| 9,391,853 |
|
| Trading debt securities | | 31,156 |
| 32,025 |
| 22,291 |
|
| Equity securities | | 4,444 |
| 51,512 |
| 49,616 |
|
| Other securities | | 112,309 |
| 108,320 |
| 100,620 |
|
| Total investment securities | | 8,560,285 |
| 8,624,037 |
| 9,564,380 |
|
| Federal funds sold and short-term securities purchased under agreements to resell | | 31,500 |
| 17,000 |
| 16,520 |
|
| Long-term securities purchased under agreements to resell | | 700,000 |
| 700,000 |
| 625,000 |
|
| Interest earning deposits with banks | | 114,947 |
| 134,697 |
| 80,860 |
|
| Cash and due from banks | | 386,339 |
| 423,048 |
| 433,747 |
|
| Land, buildings and equipment — net | | 331,782 |
| 332,253 |
| 334,586 |
|
| Goodwill | | 138,921 |
| 138,921 |
| 138,921 |
|
| Other intangible assets — net | | 8,083 |
| 7,893 |
| 7,002 |
|
| Other assets | | 437,954 |
| 483,129 |
| 387,065 |
|
| Total assets | | $ | 24,524,742 |
| $ | 24,611,242 |
| $ | 25,078,843 |
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | |
| Deposits: | | | | |
| Non-interest bearing | | $ | 6,876,756 |
| $ | 6,953,430 |
| $ | 7,314,506 |
|
| Savings, interest checking and money market | | 11,761,832 |
| 11,828,138 |
| 11,427,615 |
|
| Time open and C.D.’s of less than $100,000 | | 603,629 |
| 615,401 |
| 679,668 |
|
| Time open and C.D.’s of $100,000 and over | | 1,079,340 |
| 1,141,502 |
| 1,403,873 |
|
| Total deposits | | 20,321,557 |
| 20,538,471 |
| 20,825,662 |
|
| Federal funds purchased and securities sold under agreements to repurchase | | 1,166,759 |
| 1,132,329 |
| 1,256,444 |
|
| Other borrowings | | 9,291 |
| 9,214 |
| 101,903 |
|
| Other liabilities | | 255,752 |
| 225,500 |
| 266,627 |
|
| Total liabilities | | 21,753,359 |
| 21,905,514 |
| 22,450,636 |
|
| Stockholders’ equity: | | | | |
| Preferred stock | | 144,784 |
| 144,784 |
| 144,784 |
|
| Common stock | | 535,407 |
| 535,407 |
| 510,015 |
|
| Capital surplus | | 1,804,057 |
| 1,802,785 |
| 1,546,534 |
|
| Retained earnings | | 408,374 |
| 325,390 |
| 390,853 |
|
| Treasury stock | | (15,854 | ) | (15,681 | ) | (10,373 | ) |
| Accumulated other comprehensive income (loss) | | (108,781 | ) | (89,563 | ) | 42,070 |
|
| Total stockholders’ equity | | 2,767,987 |
| 2,703,122 |
| 2,623,883 |
|
| Non-controlling interest | | 3,396 |
| 2,606 |
| 4,324 |
|
| Total equity | | 2,771,383 |
| 2,705,728 |
| 2,628,207 |
|
| Total liabilities and equity | | $ | 24,524,742 |
| $ | 24,611,242 |
| $ | 25,078,843 |
|
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE BALANCE SHEETS |
| | | | | | | | | | | | | | | |
(Unaudited) (In thousands) | For the Three Months Ended |
| June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 |
| ASSETS: | | | | | |
| Loans: | | | | | |
| Business | $ | 4,962,171 |
| $ | 4,934,621 |
| $ | 4,818,419 |
| $ | 4,777,222 |
| $ | 4,827,439 |
|
| Real estate — construction and land | 971,854 |
| 951,930 |
| 948,043 |
| 887,596 |
| 862,479 |
|
| Real estate — business | 2,726,697 |
| 2,733,812 |
| 2,720,356 |
| 2,710,453 |
| 2,701,144 |
|
| Real estate — personal | 2,078,972 |
| 2,062,083 |
| 2,044,651 |
| 2,017,264 |
| 2,003,997 |
|
| Consumer | 2,025,585 |
| 2,072,168 |
| 2,100,762 |
| 2,070,398 |
| 1,997,761 |
|
| Revolving home equity | 378,366 |
| 392,727 |
| 394,231 |
| 395,212 |
| 399,730 |
|
| Consumer credit card | 754,199 |
| 757,692 |
| 756,544 |
| 739,692 |
| 731,471 |
|
| Overdrafts | 4,497 |
| 4,628 |
| 5,295 |
| 4,373 |
| 4,505 |
|
Total loans | 13,902,341 |
| 13,909,661 |
| 13,788,301 |
| 13,602,210 |
| 13,528,526 |
|
| Allowance for loan losses | (158,664 | ) | (158,779 | ) | (157,026 | ) | (156,909 | ) | (157,003 | ) |
| Net loans | 13,743,677 |
| 13,750,882 |
| 13,631,275 |
| 13,445,301 |
| 13,371,523 |
|
| Loans held for sale | 22,202 |
| 19,115 |
| 18,158 |
| 21,227 |
| 18,341 |
|
| Investment securities: | | | | | |
| U.S. government and federal agency obligations | 923,183 |
| 916,655 |
| 917,664 |
| 917,808 |
| 910,821 |
|
| Government-sponsored enterprise obligations | 354,156 |
| 405,681 |
| 452,104 |
| 456,668 |
| 450,362 |
|
| State and municipal obligations | 1,394,766 |
| 1,513,243 |
| 1,630,660 |
| 1,699,365 |
| 1,771,674 |
|
| Mortgage-backed securities | 4,067,152 |
| 3,925,904 |
| 3,949,933 |
| 3,718,697 |
| 3,708,124 |
|
| Asset-backed securities | 1,407,300 |
| 1,469,488 |
| 1,622,778 |
| 2,025,415 |
| 2,335,344 |
|
Other debt securities | 340,246 |
| 341,821 |
| 351,177 |
| 322,231 |
| 320,869 |
|
| Unrealized gain (loss) on debt securities | (122,114 | ) | (43,238 | ) | 36,875 |
| 73,291 |
| 57,547 |
|
| Total available for sale debt securities | 8,364,689 |
| 8,529,554 |
| 8,961,191 |
| 9,213,475 |
| 9,554,741 |
|
Trading debt securities | 26,101 |
| 21,966 |
| 20,401 |
| 21,149 |
| 21,062 |
|
| Equity securities | 47,179 |
| 50,507 |
| 82,416 |
| 51,204 |
| 53,162 |
|
| Other securities | 108,563 |
| 100,993 |
| 95,485 |
| 100,776 |
| 99,545 |
|
| Total investment securities | 8,546,532 |
| 8,703,020 |
| 9,159,493 |
| 9,386,604 |
| 9,728,510 |
|
| Federal funds sold and short-term securities purchased under agreements to resell | 36,791 |
| 44,339 |
| 27,017 |
| 23,807 |
| 13,115 |
|
| Long-term securities purchased under agreements to resell | 700,000 |
| 700,000 |
| 699,999 |
| 662,490 |
| 665,655 |
|
| Interest earning deposits with banks | 353,607 |
| 273,977 |
| 270,222 |
| 211,219 |
| 139,061 |
|
| Other assets | 1,119,454 |
| 1,145,200 |
| 1,157,289 |
| 1,122,230 |
| 1,106,528 |
|
| Total assets | $ | 24,522,263 |
| $ | 24,636,533 |
| $ | 24,963,453 |
| $ | 24,872,878 |
| $ | 25,042,733 |
|
| | | | | |
| LIABILITIES AND EQUITY: | | | | | |
| Non-interest bearing deposits | $ | 6,749,104 |
| $ | 6,824,700 |
| $ | 7,257,102 |
| $ | 7,135,703 |
| $ | 7,065,849 |
|
| Savings | 881,045 |
| 838,900 |
| 821,908 |
| 829,197 |
| 831,038 |
|
| Interest checking and money market | 10,850,123 |
| 10,737,829 |
| 10,416,221 |
| 10,387,212 |
| 10,667,042 |
|
| Time open & C.D.’s of less than $100,000 | 609,011 |
| 625,319 |
| 644,951 |
| 667,710 |
| 688,047 |
|
| Time open & C.D.’s of $100,000 and over | 1,134,900 |
| 1,134,194 |
| 1,119,352 |
| 1,326,290 |
| 1,510,001 |
|
| Total deposits | 20,224,183 |
| 20,160,942 |
| 20,259,534 |
| 20,346,112 |
| 20,761,977 |
|
| Borrowings: | | | | | |
| Federal funds purchased and securities sold under agreements to repurchase | 1,339,278 |
| 1,560,573 |
| 1,625,828 |
| 1,500,987 |
| 1,363,031 |
|
| Other borrowings | 1,913 |
| 1,913 |
| 42,060 |
| 101,904 |
| 105,311 |
|
| Total borrowings | 1,341,191 |
| 1,562,486 |
| 1,667,888 |
| 1,602,891 |
| 1,468,342 |
|
| Other liabilities | 229,080 |
| 198,398 |
| 312,172 |
| 251,714 |
| 203,139 |
|
| Total liabilities | 21,794,454 |
| 21,921,826 |
| 22,239,594 |
| 22,200,717 |
| 22,433,458 |
|
| Equity | 2,727,809 |
| 2,714,707 |
| 2,723,859 |
| 2,672,161 |
| 2,609,275 |
|
| Total liabilities and equity | $ | 24,522,263 |
| $ | 24,636,533 |
| $ | 24,963,453 |
| $ | 24,872,878 |
| $ | 25,042,733 |
|
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE RATES |
| | | | | | | | | | | |
| (Unaudited) | For the Three Months Ended | |
| June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | |
| ASSETS: | | | | | | |
| Loans: | | | | | | |
Business (1) | 3.69 | % | 3.48 | % | 3.32 | % | 3.25 | % | 3.21 | % | |
| Real estate — construction and land | 5.06 |
| 4.69 |
| 4.41 |
| 4.31 |
| 4.30 |
| |
| Real estate — business | 4.22 |
| 4.06 |
| 3.90 |
| 3.85 |
| 3.74 |
| |
| Real estate — personal | 3.84 |
| 3.80 |
| 3.72 |
| 3.72 |
| 3.72 |
| |
| Consumer | 4.39 |
| 4.25 |
| 4.07 |
| 4.02 |
| 3.94 |
| |
| Revolving home equity | 4.51 |
| 4.25 |
| 4.06 |
| 4.03 |
| 3.84 |
| |
| Consumer credit card | 12.05 |
| 12.06 |
| 11.90 |
| 12.03 |
| 11.90 |
| |
| Overdrafts | — |
| — |
| — |
| — |
| — |
| |
| Total loans | 4.49 |
| 4.33 |
| 4.18 |
| 4.13 |
| 4.06 |
| |
| Loans held for sale | 6.72 |
| 6.45 |
| 5.55 |
| 5.36 |
| 5.75 |
| |
| Investment securities: | | | | | | |
| U.S. government and federal agency obligations | 3.18 |
| 2.12 |
| 2.60 |
| 1.40 |
| 2.52 |
| |
| Government-sponsored enterprise obligations | 1.88 |
| 1.84 |
| 1.69 |
| 1.61 |
| 1.59 |
| |
State and municipal obligations (1) | 3.06 |
| 3.06 |
| 3.60 |
| 3.57 |
| 3.61 |
| |
| Mortgage-backed securities | 2.60 |
| 2.62 |
| 2.38 |
| 2.36 |
| 2.35 |
| |
| Asset-backed securities | 2.32 |
| 2.11 |
| 1.94 |
| 1.82 |
| 1.72 |
| |
| Other debt securities | 2.63 |
| 2.65 |
| 2.56 |
| 2.51 |
| 2.54 |
| |
| Total available for sale debt securities | 2.66 |
| 2.52 |
| 2.52 |
| 2.34 |
| 2.42 |
| |
Trading debt securities (1) | 3.15 |
| 2.73 |
| 2.63 |
| 2.51 |
| 2.70 |
| |
Equity securities (1) | 89.68 |
| 3.64 |
| 3.30 |
| 4.02 |
| 3.97 |
| |
Other securities (1) | 6.68 |
| 6.73 |
| 6.67 |
| 5.39 |
| 10.50 |
| |
| Total investment securities | 3.19 |
| 2.58 |
| 2.58 |
| 2.37 |
| 2.50 |
| |
| Federal funds sold and short-term securities purchased under agreements to resell | 1.93 |
| 1.65 |
| 1.35 |
| 1.30 |
| 1.13 |
| |
| Long-term securities purchased under agreements to resell | 2.17 |
| 2.38 |
| 2.36 |
| 2.28 |
| 2.22 |
| |
| Interest earning deposits with banks | 1.80 |
| 1.69 |
| 1.18 |
| 1.24 |
| 1.04 |
| |
| Total interest earning assets | 3.90 |
| 3.59 |
| 3.48 |
| 3.36 |
| 3.36 |
| |
| | | | | | | |
| LIABILITIES AND EQUITY: | | | | | | |
| Interest bearing deposits: | | | | | | |
| Savings | .11 |
| .12 |
| .12 |
| .12 |
| .12 |
| |
| Interest checking and money market | .23 |
| .20 |
| .17 |
| .16 |
| .15 |
| |
| Time open & C.D.’s of less than $100,000 | .46 |
| .43 |
| .40 |
| .40 |
| .39 |
| |
| Time open & C.D.’s of $100,000 and over | 1.23 |
| 1.02 |
| .88 |
| .83 |
| .75 |
| |
| Total interest bearing deposits | .32 |
| .28 |
| .24 |
| .24 |
| .23 |
| |
| Borrowings: | | | | | | |
| Federal funds purchased and securities sold under agreements to repurchase | 1.18 |
| 1.04 |
| .83 |
| .75 |
| .60 |
| |
| Other borrowings | 2.52 |
| 2.54 |
| 3.59 |
| 3.53 |
| 3.47 |
| |
| Total borrowings | 1.19 |
| 1.04 |
| .90 |
| .93 |
| .81 |
| |
| Total interest bearing liabilities | .40 | % | .36 | % | .31 | % | .31 | % | .29 | % | |
| | | | | | | |
| Net yield on interest earning assets | 3.65 | % | 3.37 | % | 3.29 | % | 3.17 | % | 3.18 | % | |
(1) Stated on a tax equivalent basis using a federal income tax rate of 21% in 2018 and 35% in prior periods.
|
| | | | | | | | | | | | | | | | | | | | | | |
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
|
| CREDIT QUALITY |
| | | | | | | | | |
| | | For the Three Months Ended | For the Six Months Ended |
| (Unaudited) (In thousands, except per share data) | | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | June 30, 2018 | June 30, 2017 |
| ALLOWANCE FOR LOAN LOSSES | | | | | | | | |
| Balance at beginning of period | | $ | 159,532 |
| $ | 159,532 |
| $ | 157,832 |
| $ | 157,832 |
| $ | 157,832 |
| $ | 159,532 |
| $ | 155,932 |
|
| Provision for losses | | 10,043 |
| 10,396 |
| 12,654 |
| 10,704 |
| 10,758 |
| 20,439 |
| 21,886 |
|
| Net charge-offs (recoveries): | | | | | | | | |
| Commercial portfolio: | | | | | | | | |
| Business | | 36 |
| (14 | ) | 768 |
| 195 |
| 318 |
| 22 |
| 415 |
|
| Real estate — construction and land | | (297 | ) | (36 | ) | (87 | ) | (362 | ) | (207 | ) | (333 | ) | (742 | ) |
| Real estate — business | | (40 | ) | (205 | ) | (48 | ) | (106 | ) | (10 | ) | (245 | ) | (49 | ) |
| | | (301 | ) | (255 | ) | 633 |
| (273 | ) | 101 |
| (556 | ) | (376 | ) |
| Personal banking portfolio: | | | | | | | | |
| Consumer credit card | | 8,251 |
| 7,566 |
| 7,724 |
| 7,631 |
| 7,750 |
| 15,817 |
| 14,898 |
|
| Consumer | | 1,862 |
| 2,528 |
| 2,184 |
| 3,057 |
| 2,642 |
| 4,390 |
| 4,738 |
|
| Overdraft | | 326 |
| 444 |
| 376 |
| 445 |
| 292 |
| 770 |
| 727 |
|
| Real estate — personal | | (95 | ) | 57 |
| (56 | ) | (137 | ) | (131 | ) | (38 | ) | (112 | ) |
| Revolving home equity | | — |
| 56 |
| 93 |
| (19 | ) | 104 |
| 56 |
| 111 |
|
| | | 10,344 |
| 10,651 |
| 10,321 |
| 10,977 |
| 10,657 |
| 20,995 |
| 20,362 |
|
| Total net loan charge-offs | | 10,043 |
| 10,396 |
| 10,954 |
| 10,704 |
| 10,758 |
| 20,439 |
| 19,986 |
|
| Balance at end of period | | $ | 159,532 |
| $ | 159,532 |
| $ | 159,532 |
| $ | 157,832 |
| $ | 157,832 |
| $ | 159,532 |
| $ | 157,832 |
|
| | | | | | | | | |
| NET CHARGE-OFF RATIOS* | | | | | | | | |
| Commercial portfolio: | | | | | | | | |
| Business | | — | % | — | % | .06 | % | .02 | % | .03 | % | — | % | .02 | % |
| Real estate — construction and land | | (.12 | ) | (.02 | ) | (.04 | ) | (.16 | ) | (.10 | ) | (.07 | ) | (.18 | ) |
| Real estate — business | | (.01 | ) | (.03 | ) | (.01 | ) | (.02 | ) | — |
| (.02 | ) | — |
|
| | | (.01 | ) | (.01 | ) | .03 |
| (.01 | ) | — |
| (.01 | ) | (.01 | ) |
| Personal banking portfolio: | | | | | | | | |
| Consumer credit card | | 4.39 |
| 4.05 |
| 4.05 |
| 4.09 |
| 4.25 |
| 4.22 |
| 4.06 |
|
| Consumer | | .37 |
| .49 |
| .41 |
| .59 |
| .53 |
| .43 |
| .48 |
|
| Overdraft | | 29.08 |
| 38.91 |
| 28.17 |
| 40.37 |
| 26.00 |
| 34.04 |
| 33.73 |
|
| Real estate — personal | | (.02 | ) | .01 |
| (.01 | ) | (.03 | ) | (.03 | ) | — |
| (.01 | ) |
| Revolving home equity | | — |
| .06 |
| .09 |
| (.02 | ) | .10 |
| .03 |
| .06 |
|
| | | .79 |
| .82 |
| .77 |
| .83 |
| .83 |
| .80 |
| .80 |
|
| Total | | .29 | % | .30 | % | .32 | % | .31 | % | .32 | % | .30 | % | .30 | % |
| | | | | | | | | |
| CREDIT QUALITY RATIOS | | | | | | | | |
| Non-performing assets to total loans | | .08 | % | .08 | % | .09 | % | .11 | % | .10 | % | | |
| Non-performing assets to total assets | | .04 |
| .05 |
| .05 |
| .06 |
| .06 |
| | |
| Allowance for loan losses to total loans | | 1.14 |
| 1.15 |
| 1.14 |
| 1.15 |
| 1.16 |
| | |
| | | | | | | | | |
| NON-PERFORMING ASSETS | | | | | | | | |
| Non-accrual loans: | | | | | | | | |
| Business | | $ | 5,114 |
| $ | 5,557 |
| $ | 5,947 |
| $ | 6,821 |
| $ | 6,330 |
| | |
| Real estate — construction and land | | 5 |
| 5 |
| 5 |
| 533 |
| 544 |
| | |
| Real estate — business | | 2,465 |
| 2,546 |
| 2,736 |
| 2,346 |
| 1,833 |
| | |
| Real estate — personal | | 1,888 |
| 2,169 |
| 2,461 |
| 2,863 |
| 3,504 |
| | |
| Consumer | | — |
| — |
| 834 |
| 1,077 |
| 1,151 |
| | |
| Total | | 9,472 |
| 10,277 |
| 11,983 |
| 13,640 |
| 13,362 |
| | |
| Foreclosed real estate | | 1,039 |
| 1,300 |
| 681 |
| 1,063 |
| 515 |
| | |
| Total non-performing assets | | $ | 10,511 |
| $ | 11,577 |
| $ | 12,664 |
| $ | 14,703 |
| $ | 13,877 |
| | |
| Loans past due 90 days and still accruing interest | $ | 13,453 |
| $ | 14,928 |
| $ | 18,127 |
| $ | 16,464 |
| $ | 14,630 |
| | |
COMMERCE BANCSHARES, INC.
Management Discussion of Second Quarter Results
June 30, 2018
For the quarter ended June 30, 2018, net income attributable to Commerce Bancshares, Inc. (net income) amounted to $110.3 million, compared to $101.0 million in the previous quarter and $79.0 million in the same quarter last year. The increase in net income over the previous quarter was the result of 9.4% growth in net interest income and 4.3% growth in non-interest income. Non-interest expense declined $417 thousand, and the provision for loan losses also declined. Dividend income of $8.9 million was received on an equity investment that was liquidated, increasing net interest income this quarter. This income was offset by securities losses of a comparable amount resulting from the same transaction. Excluding the above dividend, the net interest margin increased 13 basis points this quarter to 3.50%. Quarterly average loans decreased slightly this quarter from the previous quarter, while average deposits increased $63.2 million. For the quarter, the return on average assets was 1.80%, the return on average common equity was 16.8%, and the efficiency ratio was 54.1%.
Balance Sheet Review
During the 2nd quarter of 2018, average loans totaled $13.9 billion, approximately the same as in the prior quarter, and grew $377.7 million, or 2.8%, over the same period last year. Compared to the previous quarter, average business and construction loans grew $27.6 million and $19.9 million, respectively. Personal real estate loans increased $16.9 million, while consumer loans declined $46.6 million this quarter. Within business loans, commercial and industrial loans grew $35.6 million but were offset by a decline in tax-free lending of $14.3 million and a slight decline in leasing activities. The growth in construction loans resulted from an increase in advances and new loans this quarter, offset by several larger loan paydowns. Customer demand for adjustable rate personal real estate loans retained by the Company resulted in the increase noted above. During the quarter, auto loans totaling $25.9 million were sold to another financial institution, which was a main factor in lower overall consumer loan totals. Also, home equity and marine/RV lending declined this quarter, but patient health care loans continued to increase and totaled $161.8 million at June 30, 2018. During the current quarter, the Company sold certain fixed rate personal real estate loans totaling $39.9 million, compared to $47.8 million in the prior quarter.
During the 2nd quarter of 2018, total average available for sale debt securities decreased $164.9 million from the previous quarter to $8.4 billion, at fair value. The decline in investment securities was mainly the result of lower average balances of municipal securities, government-sponsored obligations, and asset-backed securities, partially offset by increases in the average balances of mortgage-backed securities. Purchases of securities during the quarter totaled $469.8 million and were offset by sales, maturities and pay downs of $459.0 million. At June 30, 2018, the duration of the investment portfolio was 3.2 years, and maturities and pay downs of approximately $1.2 billion are expected to occur during the next 12 months.
Total average deposits increased $63.2 million this quarter compared to the previous quarter. The increase in average deposits resulted mainly from growth in interest checking (increase of $113.1 million), savings (increase of $42.1 million), and personal demand (increase of $26.9 million). Business demand and government demand accounts declined $68.0 million and $44.2 million, respectively, this quarter. Compared to the previous quarter, total average consumer and private banking deposits increased $74.7 million and $9.0 million respectively, while
commercial banking deposits declined by $32.6 million. The average loans to deposits ratio was 68.9% in the current quarter and 69.1% in the prior quarter. The Company’s average borrowings totaled $1.3 billion, a decline of $221.3 million from the prior quarter’s balance.
Net Interest Income
Net interest income in the 2nd quarter of 2018 amounted to $211.0 million compared to $192.9 million in the previous quarter, an increase of $18.1 million. On a tax equivalent basis, net interest income for the current quarter increased $19.1 million over the previous quarter to $215.8 million. As noted previously, net interest income this quarter included a dividend of $8.9 million representing dividend income on a liquidated equity security which was carried at fair value. Excluding this item, the current quarter net yield on earning assets (tax equivalent) was 3.50%, compared to 3.37% in the previous quarter and 3.18% in the same period last year. Excluding this item, the increase in net interest income resulted mainly from higher rates on loan balances coupled with relatively stable funding costs. Also, inflation income on the Company’s treasury inflation-protected securities (TIPS) increased $2.5 million this quarter compared to the previous quarter.
Compared to the previous quarter, interest income on loans (tax equivalent) increased $7.2 million as a result of higher loan yields, especially on commercial loans. The average tax-equivalent yield on the loan portfolio increased 16 basis points this quarter to 4.49%, compared to 4.33% in the previous quarter.
Interest income on investment securities (tax equivalent) increased $13.4 million over the previous quarter, mainly due to the item mentioned above and higher TIPs inflation income. Also, the adjustment for premium amortization expense on slowing prepayment speeds for mortgage-backed and asset-backed securities increased interest income $1.5 million this quarter, due to a higher overall interest rate environment. The premium amortization adjustment for the prior quarter totaled $1.5 million. Inflation income on TIPS totaled $4.5 million in the current quarter and $2.0 million in the previous quarter. The yield on total investment securities was 3.19% in the current quarter and 2.58% in the previous quarter.
Interest costs on deposits remained low and totaled 32 basis points in the 2nd quarter of 2018, compared to 28 basis points in the prior quarter. Interest expense on deposits increased $1.6 million this quarter compared to the previous quarter due mainly to higher rates on corporate interest checking and money market accounts, and short-term jumbo certificates of deposit. Borrowing costs decreased slightly this quarter mostly due to lower average balances, offset by higher average rates paid on customer repurchase agreements. The overall rate paid on interest bearing liabilities was .40%, compared to .36% in the prior quarter.
Non-Interest Income
In the 2nd quarter of 2018, total non-interest income amounted to $124.9 million, an increase of $9.5 million, or 8.2%, compared to the same period last year. Also, current quarter non-interest income increased $5.2 million compared to the prior quarter. The increase in non-interest income over the same period last year was mainly due to growth in bank card, swap, trust and deposit fee income.
COMMERCE BANCSHARES, INC.
Management Discussion of Second Quarter Results
June 30, 2018
Total bank card fees in the current quarter increased $5.9 million, or 15.9%, over the same period last year and increased $1.8 million compared to the prior quarter. The growth compared to the 2nd quarter of 2017 resulted mainly from growth in net debit card income and corporate card interchange income. Corporate card net fees grew $4.7 million over the same quarter last year mainly due to growth in interchange income of 14.2%, coupled with lower network but higher rewards costs. Debit card net fees grew $1.8 million mostly because of lower network processing costs. Overall net merchant income was down 10.0% compared to the same quarter last year, but was up 2.1% compared to the prior quarter. Total bank card fees this quarter were comprised of fees on corporate card ($24.6 million), debit card ($10.2 million), merchant ($4.9 million) and credit card ($3.5 million) transactions.
In the current quarter, trust fees increased $3.9 million, or 11.8%, over the same period last year, resulting mainly from growth in both private client and institutional trust fee income. Compared to the same period last year, deposit account fees increased $1.0 million, or 4.5%, mainly due to growth in corporate cash management fees.
During the 2nd quarter of 2018, swap fees totaled $1.7 million, an increase of $1.3 million over the same period last year, while loan fees declined $862 thousand, mainly on lower gains on sales of residential mortgages. Gains on sales of tax credits were solid this quarter and totaled $1.0 million, which was $304 thousand higher than the same period last year. Non-interest income this quarter included $844 thousand of losses on sales of real estate and write downs on software costs, compared to gains of $1.7 million on the on sales of real estate and leased assets in the 2nd quarter of 2017. Non-interest income comprised 37.2% of the Company’s total revenue this quarter which was down from the same quarter in the prior year but reflects strong growth in net interest income during the second quarter of 2018.
Investment Securities Gains and Losses
The Company recorded net securities losses of $3.1 million in the current quarter and net securities gains of $5.4 million in the prior quarter. Net securities losses this quarter included private equity fair value gains of $3.8 million offset by an adjustment of $8.9 million (increasing losses) to recognize dividend income on a liquidated equity investment mentioned above. Also, other fair value adjustments on other equity securities totaled $1.8 million this quarter.
Non-Interest Expense
Non-interest expense for the current quarter amounted to $181.9 million, compared to $176.9 million in the same period last year and $182.3 million in the prior quarter. The 2.8% increase in expense over the same period last year was mainly due to higher costs for salaries and benefits and data processing, partly offset by lower operating costs for occupancy, supplies and communication, and community service.
Compared to the 2nd quarter of last year, salaries and benefits expense increased $6.8 million, or 6.2%. Salaries expense grew $5.8 million, mainly due to higher full-time salary costs and growth in incentive compensation, while benefits expense grew 6.4% mostly due to higher medical costs. Full-time equivalent employees totaled 4,797 and 4,805 at June 30, 2018 and 2017, respectively.
Data processing costs increased $981 thousand, or 4.9%, mainly due to higher processing and software costs, while costs for occupancy, supplies and communication, equipment, and deposit insurance declined a total of $1.3 million this quarter compared to the same quarter last year. Marketing costs increased 14.6%, or $654 thousand, mainly due to new bank card initiatives which are being funded by reduced bank card network costs. Also, community service costs declined $2.3 million due to higher foundation contributions made last year.
Income Taxes
The effective tax rate for the Company was 21.1% in the current quarter, 18.7% in the previous quarter, and 29.6% in the 2nd quarter of 2017.
Credit Quality
Net loan charge-offs in the 2nd quarter of 2018 amounted to $10.0 million, compared to $10.4 million in the prior quarter and $10.8 million in the same period last year. The ratio of annualized net loan charge-offs to total average loans was .29% in the current quarter, compared to .30% in the previous quarter and .32% in the 2nd quarter of last year. During the 2nd quarter of 2018, the Company recorded net loan recoveries on commercial loans of $301 thousand, compared to net loan recoveries of $255 thousand in the prior quarter. Net loan charge-offs on personal banking loans totaled $10.3 million in the current quarter and $10.7 million in the previous quarter.
In the 2nd quarter of 2018, annualized net loan charge-offs on average consumer credit card loans were 4.39%, compared to 4.05% in the previous quarter, and 4.25% in the same quarter last year. Consumer loan net charge-offs were .37% of average consumer loans in the current quarter, .49% in the prior quarter and .53% in the same quarter last year. This quarter, the provision for loan losses equaled net loan charge-offs, and at June 30, 2018, the allowance totaled $159.5 million, or 1.14% of total loans.
At June 30, 2018, total non-performing assets amounted to $10.5 million, a $1.1 million decrease from the previous quarter. Non-performing assets are comprised of non-accrual loans and foreclosed real estate ($9.5 million and $1.0 million, respectively). At June 30, 2018, the balance of non-accrual loans, which represented .07% of loans outstanding, included business loans of $5.1 million, business real estate loans of $2.5 million, and personal real estate loans of $1.9 million. Loans more than 90 days past due and still accruing interest totaled $13.5 million at June 30, 2018.
Other
During the 2nd quarter of 2018, the Company paid a cash dividend of $.235 per common share, representing a 9.8% increase over the same period last year. The Company also paid an annualized 6% cash dividend on its preferred stock. The Company purchased 31,764 shares of treasury stock during the current quarter at an average price of $63.02.
Forward Looking Information
This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions and other statements that are not historical
facts. Such statements are based on current beliefs and expectations of the Company’s management and are subject to
COMMERCE BANCSHARES, INC.
Management Discussion of Second Quarter Results
June 30, 2018
significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements.
