Exhibit 99.1
|
| |
| CBSH |
| 1000 Walnut Street / Suite 700 / Kansas City, Missouri 64106 / 816.234.2000 |
|
FOR IMMEDIATE RELEASE:
Thursday, January 17, 2019
COMMERCE BANCSHARES, INC. REPORTS
FOURTH QUARTER EARNINGS PER SHARE OF $.96
Commerce Bancshares, Inc. announced earnings of $.96 per common share for the three months ended December 31, 2018 compared to $.82 per share in the same quarter last year and $.98 per share in the prior quarter. Net income attributable to Commerce Bancshares, Inc. for the fourth quarter of 2018 amounted to $109.7 million, compared to $94.4 million in the fourth quarter of 2017 and $112.6 million in the prior quarter. For the current quarter, the return on average assets was 1.75%, the return on average common equity was 15.9%, and the efficiency ratio was 54.5%.
For the year ended December 31, 2018, earnings per common share totaled $3.78 compared to $2.76 in 2017, or an increase of 37%. Net income attributable to Commerce Bancshares, Inc. for the year ended December 31, 2018 increased 36% to $433.5 million compared to $319.4 million last year. For the current year, the return on average assets was 1.76% and the return on average common equity was 16.2%.
In making this announcement, John Kemper, Chief Executive Officer, said, “This quarter we continued to see strong earnings performance as revenue increased $13.8 million, while expenses and credit costs were well controlled. Compared to the prior quarter, net interest income increased $4.5 million, while our net interest margin increased six basis points to 3.58%. The yield on our loan portfolio grew 13 basis points, while funding costs increased only modestly. The diversity of our fee businesses drove growth in non-interest income, which increased $9.4 million this quarter. This growth came from higher bank card, brokerage, swap, and tax credit fees. It also included net gains on branch sales of $7.7 million. Demand for business and business real estate loans improved this quarter and as a result, we experienced growth in new loans and increased line utilization, while seasonal paydowns on some lines of credit partially offset this growth. Average deposits declined slightly.”
Mr. Kemper added, “Overall the economy appears solid and the credit environment remains favorable. Capital and liquidity levels continue to remain very strong. Net loan charge-offs this quarter totaled $12.1 million compared to $9.8 million in the prior quarter and $11.0 million in the same quarter last year. The increase in net loan charge-offs over the prior quarter was mainly due to increased losses of $1.4 million on business loans and higher net loan charge-offs on the Company’s consumer loan portfolio. Credit card net charge-offs remained stable and declined as a percentage of loans this quarter. The ratio of annualized net loan charge-offs to average loans was .34% this quarter compared to .28% last quarter. Non-performing assets increased this quarter to $13.9 million, and the provision for loan losses totaled $12.3 million. At December 31, 2018, the allowance for loan losses amounted to $159.9 million, or 1.13% of period end loans.”
(more)
Total assets at December 31, 2018 were $25.5 billion, total loans were $14.2 billion, and total deposits were $20.3 billion. During the fourth quarter, the Company distributed a 5% stock dividend on its common stock. The Company also paid an annualized 6% cash dividend on its preferred stock and a cash dividend of $.224 per common share, as restated for the 5% stock dividend.
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 fourth 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 Year Ended |
| (Unaudited) (Dollars in thousands, except per share data) | | December 31,
2018 | September 30,
2018 | December 31,
2017 | December 31,
2018 | December 31,
2017 |
| FINANCIAL SUMMARY | | |
| Net interest income | |
| $212,220 |
|
| $207,754 |
|
| $190,008 |
|
| $823,825 |
|
| $733,679 |
|
| Non-interest income | | 133,087 |
| 123,714 |
| 119,383 |
| 501,341 |
| 461,263 |
|
| Total revenue | | 345,307 |
| 331,468 |
| 309,391 |
| 1,325,166 |
| 1,194,942 |
|
| Investment securities gains (losses), net | | (7,129 | ) | 4,306 |
| 27,209 |
| (488 | ) | 25,051 |
|
| Provision for loan losses | | 12,256 |
| 9,999 |
| 12,654 |
| 42,694 |
| 45,244 |
|
| Non-interest expense | | 188,625 |
| 185,059 |
| 208,859 |
| 737,821 |
| 744,343 |
|
| Income before taxes | | 137,297 |
| 140,716 |
| 115,087 |
| 544,163 |
| 430,406 |
|
| Income taxes | | 26,537 |
| 26,647 |
| 20,104 |
| 105,949 |
| 110,506 |
|
| Non-controlling interest expense | | 1,108 |
| 1,493 |
| 628 |
| 4,672 |
| 517 |
|
| Net income attributable to Commerce Bancshares, Inc. | 109,652 |
| 112,576 |
| 94,355 |
| 433,542 |
| 319,383 |
|
| Preferred stock dividends | | 2,250 |
| 2,250 |
| 2,250 |
| 9,000 |
| 9,000 |
|
| Net income available to common shareholders |
| $107,402 |
|
| $110,326 |
|
| $92,105 |
|
| $424,542 |
|
| $310,383 |
|
| Earnings per common share: | | | | | | |
| Net income — basic | |
| $.96 |
|
| $.99 |
|
| $.82 |
|
| $3.79 |
|
| $2.77 |
|
| Net income — diluted | |
| $.96 |
|
| $.98 |
|
| $.82 |
|
| $3.78 |
|
| $2.76 |
|
| Effective tax rate | | 19.49 | % | 19.14 | % | 17.56 | % | 19.64 | % | 25.71 | % |
| Tax equivalent net interest income | |
| $216,281 |
|
| $211,368 |
|
| $197,917 |
|
| $840,062 |
|
| $766,601 |
|
Average total interest earning assets (1) | | $ | 23,974,108 |
| $ | 23,826,980 |
| $ | 23,926,315 |
| $ | 23,795,364 |
| $ | 24,011,034 |
|
| Diluted wtd. average shares outstanding | | 110,770,084 |
| 111,260,225 |
| 111,275,222 |
| 111,155,264 |
| 111,223,563 |
|
| | | | | | | |
| RATIOS | | | | | | |
Average loans to deposits (2) | | 69.87 | % | 69.28 | % | 68.15 | % | 69.27 | % | 66.18 | % |
| Return on total average assets | | 1.75 |
| 1.81 |
| 1.50 |
| 1.76 |
| 1.28 |
|
Return on average common equity (3) | | 15.85 |
| 16.43 |
| 14.17 |
| 16.16 |
| 12.46 |
|
| Non-interest income to total revenue | | 38.54 |
| 37.32 |
| 38.59 |
| 37.83 |
| 38.60 |
|
Efficiency ratio (4) | | 54.53 |
| 55.73 |
| 67.40 |
| 55.58 |
| 62.18 |
|
| Net yield on interest earning assets | | 3.58 |
| 3.52 |
| 3.29 |
| 3.53 |
| 3.19 |
|
| | | | | | | |
| EQUITY SUMMARY | | | | | | |
| Cash dividends per common share | |
| $.224 |
|
| $.224 |
|
| $.204 |
|
| $.895 |
|
| $.816 |
|
| Cash dividends on common stock | |
| $24,997 |
|
| $25,059 |
|
| $22,897 |
|
| $100,238 |
|
| $91,619 |
|
| Cash dividends on preferred stock | |
| $2,250 |
|
| $2,250 |
|
| $2,250 |
|
| $9,000 |
|
| $9,000 |
|
Book value per common share (5) | |
| $25.13 |
|
| $23.84 |
|
| $22.99 |
| | |
Market value per common share (5) | |
| $56.37 |
|
| $62.88 |
|
| $53.18 |
| | |
| High market value per common share | |
| $64.70 |
|
| $69.10 |
|
| $55.15 |
| | |
| Low market value per common share | |
| $53.40 |
|
| $61.26 |
|
| $49.59 |
| | |
Common shares outstanding (5) | | 111,331,350 |
| 111,691,094 |
| 111,945,795 |
| | |
Tangible common equity to tangible assets (6) | | 10.45 | % | 10.10 | % | 9.84 | % | | |
| Tier I leverage ratio | | 11.52 | % | 11.38 | % | 10.39 | % | | |
| | | | | | | |
| OTHER QTD INFORMATION | | | | | | |
| Number of bank/ATM locations | | 320 |
| 322 |
| 327 |
| | |
| Full-time equivalent employees | | 4,795 |
| 4,797 |
| 4,800 |
| | |
| |
| (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). |
All share and per share amounts have been restated to reflect the 5% stock dividend distributed in December 2018.
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,
2018 | September 30,
2018 | June 30,
2018 | March 31,
2018 | December 31,
2017 | December 31,
2018 | December 31,
2017 |
| Interest income | |
| $232,832 |
|
| $224,751 |
|
| $225,623 |
|
| $205,995 |
|
| $201,572 |
|
| $889,201 |
|
| $777,407 |
|
| Interest expense | | 20,612 |
| 16,997 |
| 14,664 |
| 13,103 |
| 11,564 |
| 65,376 |
| 43,728 |
|
| Net interest income | | 212,220 |
| 207,754 |
| 210,959 |
| 192,892 |
| 190,008 |
| 823,825 |
| 733,679 |
|
| Provision for loan losses | | 12,256 |
| 9,999 |
| 10,043 |
| 10,396 |
| 12,654 |
| 42,694 |
| 45,244 |
|
| Net interest income after provision for loan losses | 199,964 |
| 197,755 |
| 200,916 |
| 182,496 |
| 177,354 |
| 781,131 |
| 688,435 |
|
| NON-INTEREST INCOME | | | | | | | | |
| Bank card transaction fees | | 44,481 |
| 42,427 |
| 43,215 |
| 41,453 |
| 42,888 |
| 171,576 |
| 155,100 |
|
| Trust fees | | 37,466 |
| 37,400 |
| 37,036 |
| 36,062 |
| 35,405 |
| 147,964 |
| 135,159 |
|
| Deposit account charges and other fees | 23,887 |
| 23,755 |
| 23,893 |
| 22,982 |
| 22,598 |
| 94,517 |
| 90,060 |
|
| Capital market fees | | 1,843 |
| 1,595 |
| 1,992 |
| 2,291 |
| 1,743 |
| 7,721 |
| 7,996 |
|
| Consumer brokerage services | | 4,184 |
| 3,884 |
| 3,971 |
| 3,768 |
| 3,576 |
| 15,807 |
| 14,630 |
|
| Loan fees and sales | | 3,053 |
| 3,579 |
| 3,229 |
| 2,862 |
| 3,099 |
| 12,723 |
| 13,948 |
|
| Other | | 18,173 |
| 11,074 |
| 11,514 |
| 10,272 |
| 10,074 |
| 51,033 |
| 44,370 |
|
| Total non-interest income | | 133,087 |
| 123,714 |
| 124,850 |
| 119,690 |
| 119,383 |
| 501,341 |
| 461,263 |
|
| INVESTMENT SECURITIES GAINS (LOSSES), NET | (7,129 | ) | 4,306 |
| (3,075 | ) | 5,410 |
| 27,209 |
| (488 | ) | 25,051 |
|
| NON-INTEREST EXPENSE | | | | | | | | |
| Salaries and employee benefits | | 120,517 |
| 116,194 |
| 115,589 |
| 115,894 |
| 115,741 |
| 468,194 |
| 448,321 |
|
| Net occupancy | | 11,711 |
| 11,631 |
| 11,118 |
| 11,584 |
| 11,280 |
| 46,044 |
| 45,612 |
|
| Equipment | | 4,508 |
| 4,592 |
| 4,594 |
| 4,431 |
| 4,692 |
| 18,125 |
| 18,568 |
|
| Supplies and communication | | 5,095 |
| 5,103 |
| 5,126 |
| 5,313 |
| 6,118 |
| 20,637 |
| 22,790 |
|
| Data processing and software | | 22,216 |
| 22,056 |
| 21,016 |
| 20,690 |
| 21,090 |
| 85,978 |
| 80,998 |
|
| Marketing | | 5,602 |
| 4,999 |
| 5,142 |
| 4,805 |
| 3,937 |
| 20,548 |
| 16,325 |
|
| Deposit insurance | | 1,796 |
| 3,167 |
| 3,126 |
| 3,457 |
| 3,444 |
| 11,546 |
| 13,986 |
|
| Community service | | 480 |
| 580 |
| 656 |
| 729 |
| 25,511 |
| 2,445 |
| 34,377 |
|
| Other | | 16,700 |
| 16,737 |
| 15,493 |
| 15,374 |
| 17,046 |
| 64,304 |
| 63,366 |
|
| Total non-interest expense | | 188,625 |
| 185,059 |
| 181,860 |
| 182,277 |
| 208,859 |
| 737,821 |
| 744,343 |
|
| Income before income taxes | | 137,297 |
| 140,716 |
| 140,831 |
| 125,319 |
| 115,087 |
| 544,163 |
| 430,406 |
|
| Less income taxes | | 26,537 |
| 26,647 |
| 29,507 |
| 23,258 |
| 20,104 |
| 105,949 |
| 110,506 |
|
| Net income | | 110,760 |
| 114,069 |
| 111,324 |
| 102,061 |
| 94,983 |
| 438,214 |
| 319,900 |
|
| Less non-controlling interest expense | 1,108 |
| 1,493 |
| 994 |
| 1,077 |
| 628 |
| 4,672 |
| 517 |
|
| Net income attributable to Commerce Bancshares, Inc. | 109,652 |
| 112,576 |
| 110,330 |
| 100,984 |
| 94,355 |
| 433,542 |
| 319,383 |
|
| Less preferred stock dividends | | 2,250 |
| 2,250 |
| 2,250 |
| 2,250 |
| 2,250 |
| 9,000 |
| 9,000 |
|
| Net income available to common shareholders |
| $107,402 |
|
| $110,326 |
|
| $108,080 |
|
| $98,734 |
|
| $92,105 |
|
| $424,542 |
|
| $310,383 |
|
| Net income per common share — basic |
| $.96 |
|
| $.99 |
|
| $.96 |
|
| $.88 |
|
| $.82 |
|
| $3.79 |
|
| $2.77 |
|
| Net income per common share — diluted |
| $.96 |
|
| $.98 |
|
| $.96 |
|
| $.88 |
|
| $.82 |
|
| $3.78 |
|
| $2.76 |
|
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Return on total average assets | | 1.75 | % | 1.81 | % | 1.80 | % | 1.66 | % | 1.50 | % | 1.76 | % | 1.28 | % |
Return on average common equity (1) | 15.85 |
| 16.43 |
| 16.78 |
| 15.58 |
| 14.17 |
| 16.16 |
| 12.46 |
|
Efficiency ratio (2) | | 54.53 |
| 55.73 |
| 54.06 |
| 58.21 |
| 67.40 |
| 55.58 |
| 62.18 |
|
| Effective tax rate | | 19.49 |
| 19.14 |
| 21.10 |
| 18.72 |
| 17.56 |
| 19.64 |
| 25.71 |
|
| Net yield on interest earning assets | 3.58 |
| 3.52 |
| 3.65 |
| 3.37 |
| 3.29 |
| 3.53 |
| 3.19 |
|
| Tax equivalent net interest income | |
| $216,281 |
|
| $211,368 |
|
| $215,775 |
|
| $196,638 |
|
| $197,917 |
|
| $840,062 |
|
| $766,601 |
|
| |
| (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) | | December 31,
2018 | September 30,
2018 | December 31,
2017 |
| ASSETS | | | | |
| Loans | | | | |
| Business | | $ | 5,106,427 |
| $ | 4,966,722 |
| $ | 4,958,554 |
|
| Real estate — construction and land | | 869,659 |
| 999,691 |
| 968,820 |
|
| Real estate — business | | 2,875,788 |
| 2,726,042 |
| 2,697,452 |
|
| Real estate — personal | | 2,127,083 |
| 2,120,672 |
| 2,062,787 |
|
| Consumer | | 1,955,572 |
| 1,967,465 |
| 2,104,487 |
|
| Revolving home equity | | 376,399 |
| 375,322 |
| 400,587 |
|
| Consumer credit card | | 814,134 |
| 788,111 |
| 783,864 |
|
| Overdrafts | | 15,236 |
| 11,534 |
| 7,123 |
|
| Total loans | | 14,140,298 |
| 13,955,559 |
| 13,983,674 |
|
| Allowance for loan losses | | (159,932 | ) | (159,732 | ) | (159,532 | ) |
| Net loans | | 13,980,366 |
| 13,795,827 |
| 13,824,142 |
|
| Loans held for sale | | 20,694 |
| 16,890 |
| 21,398 |
|
| Investment securities: | | | | |
| Available for sale debt securities | | 8,538,041 |
| 8,674,986 |
| 8,725,442 |
|
| Trading debt securities | | 27,059 |
| 19,676 |
| 18,269 |
|
| Equity securities | | 4,409 |
| 4,467 |
| 50,591 |
|
| Other securities | | 129,157 |
| 127,120 |
| 99,005 |
|
| Total investment securities | | 8,698,666 |
| 8,826,249 |
| 8,893,307 |
|
| Federal funds sold and short-term securities purchased under agreements to resell | | 3,320 |
| 14,375 |
| 42,775 |
|
| Long-term securities purchased under agreements to resell | | 700,000 |
| 700,000 |
| 700,000 |
|
| Interest earning deposits with banks | | 689,876 |
| 334,752 |
| 30,631 |
|
| Cash and due from banks | | 507,892 |
| 443,004 |
| 438,439 |
|
| Land, buildings and equipment — net | | 333,119 |
| 331,869 |
| 335,110 |
|
| Goodwill | | 138,921 |
| 138,921 |
| 138,921 |
|
| Other intangible assets — net | | 8,794 |
| 8,470 |
| 7,618 |
|
| Other assets | | 382,194 |
| 452,035 |
| 401,074 |
|
| Total assets | | $ | 25,463,842 |
| $ | 25,062,392 |
| $ | 24,833,415 |
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | |
| Deposits: | | | | |
| Non-interest bearing | | $ | 6,980,298 |
| $ | 6,728,605 |
| $ | 7,158,962 |
|
| Savings, interest checking and money market | | 11,685,239 |
| 11,733,057 |
| 11,499,620 |
|
| Certificates of deposit of less than $100,000 | | 586,091 |
| 585,765 |
| 634,646 |
|
| Certificates of deposit of $100,000 and over | | 1,072,031 |
| 1,086,193 |
| 1,132,218 |
|
| Total deposits | | 20,323,659 |
| 20,133,620 |
| 20,425,446 |
|
| Federal funds purchased and securities sold under agreements to repurchase | | 1,956,389 |
| 1,862,117 |
| 1,507,138 |
|
| Other borrowings | | 8,702 |
| 1,534 |
| 1,758 |
|
| Other liabilities | | 237,943 |
| 257,311 |
| 180,889 |
|
| Total liabilities | | 22,526,693 |
| 22,254,582 |
| 22,115,231 |
|
| Stockholders’ equity: | | | | |
| Preferred stock | | 144,784 |
| 144,784 |
| 144,784 |
|
| Common stock | | 559,432 |
| 535,407 |
| 535,407 |
|
| Capital surplus | | 2,084,824 |
| 1,804,031 |
| 1,815,360 |
|
| Retained earnings | | 241,163 |
| 493,641 |
| 221,374 |
|
| Treasury stock | | (34,236 | ) | (33,174 | ) | (14,473 | ) |
| Accumulated other comprehensive income (loss) | | (64,669 | ) | (141,596 | ) | 14,108 |
|
| Total stockholders’ equity | | 2,931,298 |
| 2,803,093 |
| 2,716,560 |
|
| Non-controlling interest | | 5,851 |
| 4,717 |
| 1,624 |
|
| Total equity | | 2,937,149 |
| 2,807,810 |
| 2,718,184 |
|
| Total liabilities and equity | | $ | 25,463,842 |
| $ | 25,062,392 |
| $ | 24,833,415 |
|
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE BALANCE SHEETS |
| | | | | | | | | | | | | | | |
(Unaudited) (In thousands) | For the Three Months Ended |
| December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 |
| ASSETS: | | | | | |
| Loans: | | | | | |
| Business | $ | 5,028,635 |
| $ | 4,926,063 |
| $ | 4,962,171 |
| $ | 4,934,621 |
| $ | 4,818,419 |
|
| Real estate — construction and land | 953,166 |
| 992,045 |
| 971,854 |
| 951,930 |
| 948,043 |
|
| Real estate — business | 2,757,595 |
| 2,732,968 |
| 2,726,697 |
| 2,733,812 |
| 2,720,356 |
|
| Real estate — personal | 2,122,357 |
| 2,110,945 |
| 2,078,972 |
| 2,062,083 |
| 2,044,651 |
|
| Consumer | 1,962,401 |
| 1,984,643 |
| 2,025,585 |
| 2,072,168 |
| 2,100,762 |
|
| Revolving home equity | 374,216 |
| 373,819 |
| 378,366 |
| 392,727 |
| 394,231 |
|
| Consumer credit card | 788,353 |
| 774,512 |
| 754,199 |
| 757,692 |
| 756,544 |
|
| Overdrafts | 5,277 |
| 4,704 |
| 4,497 |
| 4,628 |
| 5,295 |
|
Total loans | 13,992,000 |
| 13,899,699 |
| 13,902,341 |
| 13,909,661 |
| 13,788,301 |
|
| Allowance for loan losses | (158,880 | ) | (158,840 | ) | (158,664 | ) | (158,779 | ) | (157,026 | ) |
| Net loans | 13,833,120 |
| 13,740,859 |
| 13,743,677 |
| 13,750,882 |
| 13,631,275 |
|
| Loans held for sale | 18,475 |
| 18,201 |
| 22,202 |
| 19,115 |
| 18,158 |
|
| Investment securities: | | | | | |
| U.S. government and federal agency obligations | 923,545 |
| 923,557 |
| 923,183 |
| 916,655 |
| 917,664 |
|
| Government-sponsored enterprise obligations | 214,913 |
| 261,938 |
| 354,156 |
| 405,681 |
| 452,104 |
|
| State and municipal obligations | 1,361,079 |
| 1,375,768 |
| 1,394,766 |
| 1,513,243 |
| 1,630,660 |
|
| Mortgage-backed securities | 4,379,805 |
| 4,434,119 |
| 4,067,152 |
| 3,925,904 |
| 3,949,933 |
|
| Asset-backed securities | 1,518,706 |
| 1,427,041 |
| 1,407,300 |
| 1,469,488 |
| 1,622,778 |
|
Other debt securities | 339,841 |
| 339,952 |
| 340,246 |
| 341,821 |
| 351,177 |
|
| Unrealized gain (loss) on debt securities | (166,181 | ) | (119,319 | ) | (122,114 | ) | (43,238 | ) | 36,875 |
|
| Total available for sale debt securities | 8,571,708 |
| 8,643,056 |
| 8,364,689 |
| 8,529,554 |
| 8,961,191 |
|
Trading debt securities | 26,322 |
| 24,490 |
| 26,101 |
| 21,966 |
| 20,401 |
|
| Equity securities | 4,432 |
| 4,466 |
| 47,179 |
| 50,507 |
| 82,416 |
|
| Other securities | 127,634 |
| 120,206 |
| 108,563 |
| 100,993 |
| 95,485 |
|
| Total investment securities | 8,730,096 |
| 8,792,218 |
| 8,546,532 |
| 8,703,020 |
| 9,159,493 |
|
| Federal funds sold and short-term securities purchased under agreements to resell | 14,415 |
| 13,042 |
| 36,791 |
| 44,339 |
| 27,017 |
|
| Long-term securities purchased under agreements to resell | 699,999 |
| 685,869 |
| 700,000 |
| 700,000 |
| 699,999 |
|
| Interest earning deposits with banks | 352,942 |
| 298,632 |
| 353,607 |
| 273,977 |
| 270,222 |
|
| Other assets | 1,158,816 |
| 1,147,250 |
| 1,119,454 |
| 1,145,200 |
| 1,157,289 |
|
| Total assets | $ | 24,807,863 |
| $ | 24,696,071 |
| $ | 24,522,263 |
| $ | 24,636,533 |
| $ | 24,963,453 |
|
| | | | | |
| LIABILITIES AND EQUITY: | | | | | |
| Non-interest bearing deposits | $ | 6,666,715 |
| $ | 6,677,665 |
| $ | 6,749,104 |
| $ | 6,824,700 |
| $ | 7,257,102 |
|
| Savings | 870,844 |
| 877,347 |
| 881,045 |
| 838,900 |
| 821,908 |
|
| Interest checking and money market | 10,840,048 |
| 10,839,310 |
| 10,850,123 |
| 10,737,829 |
| 10,416,221 |
|
| Certificates of deposit of less than $100,000 | 584,828 |
| 593,936 |
| 609,011 |
| 625,319 |
| 644,951 |
|
| Certificates of deposit of $100,000 and over | 1,090,546 |
| 1,100,299 |
| 1,134,900 |
| 1,134,194 |
| 1,119,352 |
|
| Total deposits | 20,052,981 |
| 20,088,557 |
| 20,224,183 |
| 20,160,942 |
| 20,259,534 |
|
| Borrowings: | | | | | |
| Federal funds purchased and securities sold under agreements to repurchase | 1,655,997 |
| 1,499,837 |
| 1,339,278 |
| 1,560,573 |
| 1,625,828 |
|
| Other borrowings | 1,335 |
| 1,833 |
| 1,913 |
| 1,913 |
| 42,060 |
|
| Total borrowings | 1,657,332 |
| 1,501,670 |
| 1,341,191 |
| 1,562,486 |
| 1,667,888 |
|
| Other liabilities | 264,449 |
| 296,884 |
| 229,080 |
| 198,398 |
| 312,172 |
|
| Total liabilities | 21,974,762 |
| 21,887,111 |
| 21,794,454 |
| 21,921,826 |
| 22,239,594 |
|
| Equity | 2,833,101 |
| 2,808,960 |
| 2,727,809 |
| 2,714,707 |
| 2,723,859 |
|
| Total liabilities and equity | $ | 24,807,863 |
| $ | 24,696,071 |
| $ | 24,522,263 |
| $ | 24,636,533 |
| $ | 24,963,453 |
|
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE RATES |
| | | | | | | | | | | |
| (Unaudited) | For the Three Months Ended | |
| December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | |
| ASSETS: | | | | | | |
| Loans: | | | | | | |
Business (1) | 3.93 | % | 3.80 | % | 3.69 | % | 3.48 | % | 3.32 | % | |
| Real estate — construction and land | 5.47 |
| 5.21 |
| 5.06 |
| 4.69 |
| 4.41 |
| |
| Real estate — business | 4.53 |
| 4.35 |
| 4.22 |
| 4.06 |
| 3.90 |
| |
| Real estate — personal | 3.87 |
| 3.83 |
| 3.84 |
| 3.80 |
| 3.72 |
| |
| Consumer | 4.62 |
| 4.46 |
| 4.39 |
| 4.25 |
| 4.07 |
| |
| Revolving home equity | 4.98 |
| 4.72 |
| 4.51 |
| 4.25 |
| 4.06 |
| |
| Consumer credit card | 11.91 |
| 11.99 |
| 12.05 |
| 12.06 |
| 11.90 |
| |
| Overdrafts | — |
| — |
| — |
| — |
| — |
| |
| Total loans | 4.72 |
| 4.59 |
| 4.49 |
| 4.33 |
| 4.18 |
| |
| Loans held for sale | 6.59 |
| 6.87 |
| 6.72 |
| 6.45 |
| 5.55 |
| |
| Investment securities: | | | | | | |
| U.S. government and federal agency obligations | 1.90 |
| 2.23 |
| 3.18 |
| 2.12 |
| 2.60 |
| |
| Government-sponsored enterprise obligations | 2.24 |
| 2.10 |
| 1.88 |
| 1.84 |
| 1.69 |
| |
State and municipal obligations (1) | 3.06 |
| 2.98 |
| 3.06 |
| 3.06 |
| 3.60 |
| |
| Mortgage-backed securities | 2.75 |
| 2.65 |
| 2.60 |
| 2.62 |
| 2.38 |
| |
| Asset-backed securities | 2.55 |
| 2.42 |
| 2.32 |
| 2.11 |
| 1.94 |
| |
| Other debt securities | 2.60 |
| 2.59 |
| 2.63 |
| 2.65 |
| 2.56 |
| |
| Total available for sale debt securities | 2.65 |
| 2.60 |
| 2.66 |
| 2.52 |
| 2.52 |
| |
Trading debt securities (1) | 3.21 |
| 3.13 |
| 3.15 |
| 2.73 |
| 2.63 |
| |
Equity securities (1) | 39.92 |
| 32.69 |
| 89.68 |
| 3.64 |
| 3.30 |
| |
Other securities (1) | 15.51 |
| 13.00 |
| 6.68 |
| 6.73 |
| 6.67 |
| |
| Total investment securities | 2.86 |
| 2.76 |
| 3.19 |
| 2.58 |
| 2.58 |
| |
| Federal funds sold and short-term securities purchased under agreements to resell | 2.56 |
| 2.10 |
| 1.93 |
| 1.65 |
| 1.35 |
| |
| Long-term securities purchased under agreements to resell | 2.31 |
| 2.26 |
| 2.17 |
| 2.38 |
| 2.36 |
| |
| Interest earning deposits with banks | 2.28 |
| 1.96 |
| 1.80 |
| 1.69 |
| 1.18 |
| |
| Total interest earning assets | 3.92 |
| 3.80 |
| 3.90 |
| 3.59 |
| 3.48 |
| |
| | | | | | | |
| LIABILITIES AND EQUITY: | | | | | | |
| Interest bearing deposits: | | | | | | |
| Savings | .11 |
| .11 |
| .11 |
| .12 |
| .12 |
| |
| Interest checking and money market | .30 |
| .26 |
| .23 |
| .20 |
| .17 |
| |
| Certificates of deposit of less than $100,000 | .70 |
| .56 |
| .46 |
| .43 |
| .40 |
| |
| Certificates of deposit of $100,000 and over | 1.61 |
| 1.41 |
| 1.23 |
| 1.02 |
| .88 |
| |
| Total interest bearing deposits | .41 |
| .35 |
| .32 |
| .28 |
| .24 |
| |
| Borrowings: | | | | | | |
| Federal funds purchased and securities sold under agreements to repurchase | 1.60 |
| 1.33 |
| 1.18 |
| 1.04 |
| .83 |
| |
| Other borrowings | 2.67 |
| 2.60 |
| 2.52 |
| 2.54 |
| 3.59 |
| |
| Total borrowings | 1.60 |
| 1.33 |
| 1.19 |
| 1.04 |
| .90 |
| |
| Total interest bearing liabilities | .54 | % | .45 | % | .40 | % | .36 | % | .31 | % | |
| | | | | | | |
| Net yield on interest earning assets | 3.58 | % | 3.52 | % | 3.65 | % | 3.37 | % | 3.29 | % | |
(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 Year Ended |
| (Unaudited) (In thousands, except per share data) | | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 |
| ALLOWANCE FOR LOAN LOSSES | | | | | | | | |
| Balance at beginning of period | | $ | 159,732 |
| $ | 159,532 |
| $ | 159,532 |
| $ | 159,532 |
| $ | 157,832 |
| $ | 159,532 |
| $ | 155,932 |
|
| Provision for losses | | 12,256 |
| 9,999 |
| 10,043 |
| 10,396 |
| 12,654 |
| 42,694 |
| 45,244 |
|
| Net charge-offs (recoveries): | | | | | | | | |
| Commercial portfolio: | | | | | | | | |
| Business | | 1,748 |
| 332 |
| 36 |
| (14 | ) | 768 |
| 2,102 |
| 1,378 |
|
| Real estate — construction and land | | (183 | ) | (119 | ) | (297 | ) | (36 | ) | (87 | ) | (635 | ) | (1,191 | ) |
| Real estate — business | | (91 | ) | (42 | ) | (40 | ) | (205 | ) | (48 | ) | (378 | ) | (203 | ) |
| | | 1,474 |
| 171 |
| (301 | ) | (255 | ) | 633 |
| 1,089 |
| (16 | ) |
| Personal banking portfolio: | | | | | | | | |
| Consumer credit card | | 7,421 |
| 7,340 |
| 8,251 |
| 7,566 |
| 7,724 |
| 30,578 |
| 30,253 |
|
| Consumer | | 2,805 |
| 2,091 |
| 1,862 |
| 2,528 |
| 2,184 |
| 9,286 |
| 9,979 |
|
| Overdraft | | 500 |
| 351 |
| 326 |
| 444 |
| 376 |
| 1,621 |
| 1,548 |
|
| Real estate — personal | | (144 | ) | (153 | ) | (95 | ) | 57 |
| (56 | ) | (335 | ) | (305 | ) |
| Revolving home equity | | — |
| (1 | ) | — |
| 56 |
| 93 |
| 55 |
| 185 |
|
| | | 10,582 |
| 9,628 |
| 10,344 |
| 10,651 |
| 10,321 |
| 41,205 |
| 41,660 |
|
| Total net loan charge-offs | | 12,056 |
| 9,799 |
| 10,043 |
| 10,396 |
| 10,954 |
| 42,294 |
| 41,644 |
|
| Balance at end of period | | $ | 159,932 |
| $ | 159,732 |
| $ | 159,532 |
| $ | 159,532 |
| $ | 159,532 |
| $ | 159,932 |
| $ | 159,532 |
|
| | | | | | | | | |
| NET CHARGE-OFF RATIOS* | | | | | | | | |
| Commercial portfolio: | | | | | | | | |
| Business | | .14 | % | .03 | % | — | % | — | % | .06 | % | .04 | % | .03 | % |
| Real estate — construction and land | | (.08 | ) | (.05 | ) | (.12 | ) | (.02 | ) | (.04 | ) | (.07 | ) | (.14 | ) |
| Real estate — business | | (.01 | ) | (.01 | ) | (.01 | ) | (.03 | ) | (.01 | ) | (.01 | ) | (.01 | ) |
| | | .07 |
| .01 |
| (.01 | ) | (.01 | ) | .03 |
| .01 |
| — |
|
| Personal banking portfolio: | | | | | | | | |
| Consumer credit card | | 3.73 |
| 3.76 |
| 4.39 |
| 4.05 |
| 4.05 |
| 3.98 |
| 4.07 |
|
| Consumer | | .57 |
| .42 |
| .37 |
| .49 |
| .41 |
| .46 |
| .49 |
|
| Overdraft | | 37.59 |
| 29.60 |
| 29.08 |
| 38.91 |
| 28.17 |
| 33.93 |
| 33.71 |
|
| Real estate — personal | | (.03 | ) | (.03 | ) | (.02 | ) | .01 |
| (.01 | ) | (.02 | ) | (.02 | ) |
| Revolving home equity | | — |
| — |
| — |
| .06 |
| .09 |
| .01 |
| .05 |
|
| | | .80 |
| .73 |
| .79 |
| .82 |
| .77 |
| .78 |
| .80 |
|
| Total | | .34 | % | .28 | % | .29 | % | .30 | % | .32 | % | .30 | % | .31 | % |
| | | | | | | | | |
| CREDIT QUALITY RATIOS | | | | | | | | |
| Non-performing assets to total loans | | .10 | % | .07 | % | .08 | % | .08 | % | .09 | % | | |
| Non-performing assets to total assets | | .05 |
| .04 |
| .04 |
| .05 |
| .05 |
| | |
| Allowance for loan losses to total loans | | 1.13 |
| 1.14 |
| 1.14 |
| 1.15 |
| 1.14 |
| | |
| | | | | | | | | |
| NON-PERFORMING ASSETS | | | | | | | | |
| Non-accrual loans: | | | | | | | | |
| Business | | $ | 8,985 |
| $ | 5,131 |
| $ | 5,114 |
| $ | 5,557 |
| $ | 5,947 |
| | |
| Real estate — construction and land | | 4 |
| 4 |
| 5 |
| 5 |
| 5 |
| | |
| Real estate — business | | 1,715 |
| 1,467 |
| 2,465 |
| 2,546 |
| 2,736 |
| | |
| Real estate — personal | | 1,832 |
| 1,767 |
| 1,888 |
| 2,169 |
| 2,461 |
| | |
| Consumer | | — |
| — |
| — |
| — |
| 834 |
| | |
| Total | | 12,536 |
| 8,369 |
| 9,472 |
| 10,277 |
| 11,983 |
| | |
| Foreclosed real estate | | 1,413 |
| 1,181 |
| 1,039 |
| 1,300 |
| 681 |
| | |
| Total non-performing assets | | $ | 13,949 |
| $ | 9,550 |
| $ | 10,511 |
| $ | 11,577 |
| $ | 12,664 |
| | |
| Loans past due 90 days and still accruing interest | $ | 16,658 |
| $ | 13,991 |
| $ | 13,453 |
| $ | 14,928 |
| $ | 18,127 |
| | |
COMMERCE BANCSHARES, INC.
Management Discussion of Fourth Quarter Results
December 31, 2018
For the quarter ended December 31, 2018, net income attributable to Commerce Bancshares, Inc. (net income) amounted to $109.7 million, compared to $112.6 million in the previous quarter and $94.4 million in the same quarter last year. During the 4th quarter of 2018, non-recurring income totaling $2.9 million ($2.3 million net of tax) was recorded and included a net gain of $7.7 million from the disposition of several branch properties, net securities losses of $7.3 million, and discrete interest and dividends of $2.5 million from the Company’s private equity investments (net of minority interest). Overall the net interest margin grew six basis points, mainly due to higher loan rates and stable funding costs. Excluding the branch gains, non-interest income grew $1.7 million compared to the prior quarter from continued growth in the Company’s diverse revenue sources including bank card, tax credit, swap and brokerage fees. Non-interest expense increased $3.6 million this quarter due to higher salaries and marketing costs. Quarterly average loans increased $92.6 million this quarter over the previous quarter, while average deposits decreased $35.6 million. For the quarter, the return on average assets was 1.75%, the return on average common equity was 15.9%, and the efficiency ratio was 54.5%.
Balance Sheet Review
During the 4th quarter of 2018, average loans totaled $14.0 billion, an increase of $92.6 million over the prior quarter, and grew $204.0 million, or 1.5%, over the same period last year. Period-end loans, however, increased $188.5 million over the prior quarter. Compared to the previous quarter, average business, business real estate, consumer card, and personal real estate loans grew $102.6 million, $24.6 million, $13.8 million, and $11.4 million, respectively. However, this growth was partly offset by a decline in average construction (decline of $38.9 million) and auto (decline of $12.5 million) lending activities. Business loan demand was solid this quarter with several new large loans closed and increased line utilization, notably from agribusiness customers, but this growth was partly offset by some large seasonal loan paydowns. Several larger business real estate loans were also closed this quarter. The decline in construction loans resulted from projects being completed and loans either moved to permanent financing on balance sheet (business real estate) or financed outside of the bank. Also, personal real estate loans grew modestly due to continued demand for adjustable rate mortgages which are kept on-balance sheet. Consumer loans declined $22.2 million due to lower demand for automobile lending and fixed home equity loans. Consumer card balances grew throughout the year and were seasonally higher in the 4th quarter of 2018. During the current quarter, the Company sold certain fixed rate personal real estate loans totaling $49.7 million, compared to $56.1 million in the prior quarter.
During the 4th quarter of 2018, total average available for sale debt securities decreased $71.3 million from the previous quarter to $8.6 billion, at fair value. The decrease in investment securities was mainly the result of lower mortgage-backed, government-sponsored enterprise obligations and municipal securities, partly offset by higher average balances of asset-backed securities. Purchases of securities during the quarter totaled $597.8 million and were offset by sales, maturities and pay downs of $820.0 million. At December 31, 2018, the duration of the investment portfolio was 3.2 years, and maturities and pay downs of approximately $1.0 billion are expected to occur during the next 12 months.
Total average deposits decreased $35.6 million this quarter compared to the previous quarter. The decrease in average deposits resulted mainly from lower balances of certificates of deposit (decline of $18.9 million), savings (decline of $6.5 million), and personal and government demand deposits (decline of $79.9 million). These declines were partially offset by a $60.9 million increase in business demand deposits this quarter. Overall, compared to the previous quarter, total average consumer and wealth (including private banking) deposits decreased $59.2 million and $20.4 million, respectively, while average commercial banking deposits grew $46.9 million. The average loans to deposits ratio was 69.9% in the current quarter and 69.3% in the prior quarter. The Company’s average borrowings were $1.7 billion in the 4th quarter of 2018, an increase of $155.7 million over the prior quarter’s balance.
Net Interest Income
Net interest income in the 4th quarter of 2018 amounted to $212.2 million compared to $207.8 million in the previous quarter, an increase of $4.5 million. On a tax equivalent basis, net interest income for the current quarter increased $4.9 million over the previous quarter to $216.3 million. As noted previously, net interest income included non-recurring dividend and interest of $3.1 million in the current quarter and $2.0 million in the prior quarter from the Company’s private equity investments. Also, inflation income on the Company’s inflation protected securities (TIPs) declined $980 thousand this quarter. Excluding these items, net interest income grew $4.5 million and the adjusted net yield on earning assets (tax equivalent) was 3.50% compared to 3.45% in the prior quarter.
Compared to the previous quarter, interest income on loans (tax equivalent) increased $5.6 million as a result of higher overall loan yields coupled with growth, mainly in business loan balances. The average tax-equivalent yield on the loan portfolio increased 13 basis points this quarter to 4.72%, compared to 4.59% in the previous quarter.
Interest income on investment securities (tax equivalent) increased $2.2 million over the previous quarter, mainly due to higher rates and balances on the Company’s asset-backed securities and the discrete dividends received on the Company’s equity investments noted above. Also, the adjustment for premium amortization expense on slowing prepayment speeds for mortgage-backed and asset-backed securities increased interest income $670 thousand this quarter. However, inflation income on TIPs securities declined $980 thousand to $1.5 million this quarter. The yield on total investment securities was 2.86% in the current quarter and 2.76% in the previous quarter.
Interest costs on deposits remained low and totaled 41 basis points in the 4th quarter of 2018, compared to 35 basis points in the prior quarter. Interest expense on deposits increased $2.0 million this quarter compared to the previous quarter mainly due to higher rates on most deposit categories. Borrowing costs increased $1.7 million this quarter mainly due to higher rates and balances of customer repurchase agreements. The overall rate paid on interest bearing liabilities was .54% in the current quarter, compared to 45% in the prior quarter.
Non-Interest Income
In the 4th quarter of 2018, total non-interest income amounted to $133.1 million, an increase of $13.7 million, or 11.5%, compared
COMMERCE BANCSHARES, INC.
Management Discussion of Fourth Quarter Results
December 31, 2018
to the same period last year and increased $9.4 million compared to the prior quarter. The current quarter includes net gains of $7.7 million from the disposition of several branch properties (included in other income). Excluding this gain, the increase in non-interest income over the same period last year was mainly due to growth in trust, bank card, deposit, tax credit and brokerage fees.
Total bank card fees in the current quarter increased $1.6 million, or 3.7%, over the same period last year and grew $2.1 million, or 4.8%, compared to the prior quarter. Corporate card net fees grew $2.7 million, or 11.6%, over the same quarter last year mainly due to growth in interchange income from increased customer activity. Debit card net fees grew $219 thousand, or 2.2%, driven by growth in fees of 5.9% but offset by higher network processing costs. Overall net merchant income declined $662 thousand due to lower interchange fees and higher processing costs, while net credit card fees declined $674 thousand on higher rewards costs, partly offset by higher interchange revenue. Total net bank card fees this quarter were comprised of fees on corporate card ($26.1 million), debit card ($10.2 million), merchant ($4.4 million) and credit card ($3.8 million) transactions.
In the current quarter, trust fees increased $2.1 million, or 5.8%, over the same period last year, resulting from growth in private client fee income. Compared to the same period last year, deposit account fees increased $1.3 million, or 5.7%, mainly due to growth in corporate cash management fees and consumer deposit fees.
During the 4th quarter of 2018, brokerage fees grew 17.0% over the same period last year to $4.2 million, while cash sweep fees grew 26.4% to $2.6 million. Gains on sales of tax credits totaled $2.0 million this quarter, reflecting an increase of $1.3 million over amounts reported in the same quarter last year. Non-interest income comprised 38.5% of the Company’s total revenue this quarter.
Investment Securities Gains and Losses
The Company recorded net securities losses of $7.1 million in the current quarter, compared to net securities gains of $4.3 million in the prior quarter and $27.2 million in the 4th quarter of 2017. This quarter, the Company sold securities with a book value of $523.9 million, mainly U.S. Treasury securities, and recorded securities losses of $10.1 million. The proceeds from this sale were reinvested in similar securities with higher rates. Also, gains of $3.1 million (realized and fair value adjustments) were recorded on the Company’s private equity portfolio this quarter.
Non-Interest Expense
Non-interest expense for the current quarter amounted to $188.6 million, compared to $208.9 million in the same period last year and $185.1 million in the prior quarter. The decrease in expense compared to the same period last year was mainly due to a $25.0 million contribution of appreciated securities and a $3.3 million discretionary bonus accrual in 2017 that did not reoccur in 2018, partly offset by higher salaries and benefits, data processing and marketing costs in 2018.
Compared to the 4th quarter of last year, salaries and benefits expense increased $4.8 million, or 4.1%. Salaries expense grew $3.5 million, due to higher full-time salary costs of $6.3 million, while incentive compensation decreased $3.2 million due to the discretionary bonus mentioned above. Benefits expense increased $1.3 million, due to higher medical, payroll taxes and retirement
plan costs. Full-time equivalent employees totaled 4,795 and 4,800 at December 31, 2018 and 2017, respectively.
Marketing costs increased $1.7 million partly due to increased marketing efforts to consumer deposit customers and new bank card initiatives. However, deposit insurance expense declined $1.6 million due to reduced FDIC insurance rates in effect this quarter, partly offsetting the increase in marketing expense. Also, supplies and communication expense declined $1.0 million this quarter on lower data network and postage costs, while data processing costs increased $1.1 million due to higher software expense.
Income Taxes
The effective tax rate for the Company was 19.5% in the current quarter, 19.1% in the previous quarter, and 17.6% in the 4th quarter of 2017.
Credit Quality
Net loan charge-offs in the 4th quarter of 2018 amounted to $12.1 million, compared to $9.8 million in the prior quarter and $11.0 million in the same period last year. The ratio of annualized net loan charge-offs to total average loans was .34% in the current quarter, compared to .28% in the previous quarter and .32% in the 4th quarter of last year. During the 4th quarter of 2018, the Company recorded net loan charge-offs on commercial loans of $1.5 million mainly representing one larger business loan. Net loan charge-offs on personal banking loans totaled $10.6 million in the current quarter and $9.6 million in the previous quarter.
In the 4th quarter of 2018, annualized net loan charge-offs on average consumer credit card loans were 3.73%, compared to 3.76% in the previous quarter, and 4.05% in the same quarter last year. Consumer loan net charge-offs were .57% of average consumer loans in the current quarter, .42% in the prior quarter and .41% in the same quarter last year. This quarter, the provision for loan losses totaled $12.3 million, slightly higher than net loan charge-offs taken this quarter. At December 31, 2018, the allowance totaled $159.9 million, or 1.13% of total loans.
At December 31, 2018, total non-performing assets amounted to $13.9 million, an increase of $4.4 million over the previous quarter. Non-performing assets are comprised of non-accrual loans and foreclosed real estate ($12.5 million and $1.4 million, respectively). At December 31, 2018, the balance of non-accrual loans, which represented .09% of loans outstanding, included business loans of $9.0 million, business real estate loans of $1.7 million, and personal real estate loans of $1.8 million. Loans more than 90 days past due and still accruing interest totaled $16.7 million at December 31, 2018.
Other
During the 4th quarter of 2018, the Company distributed a 5% stock dividend on its common stock and paid a cash dividend of $.224 per common share (as restated for the stock dividend), 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 578,557 shares of treasury stock during the current quarter at an average price of $61.63.
Forward Looking Information
This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
COMMERCE BANCSHARES, INC.
Management Discussion of Fourth Quarter Results
December 31, 2018
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 significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements.
