Exhibit 99.1
FOR IMMEDIATE RELEASE:
Tuesday, October 16, 2007
COMMERCE BANCSHARES, INC. REPORTS THIRD QUARTER
EARNINGS PER SHARE OF $.81
Commerce Bancshares, Inc. announced earnings of $.81 per share for the three months ended September 30, 2007, an increase of 5.2% compared to $.77 per share in the third quarter of 2006. Net income for the third quarter amounted to $55.9 million compared to $54.5 million in the same period last year. The return on average assets for the three months ended September 30, 2007 was 1.43%, the return on average equity was 15.1% and the efficiency ratio was 59.8%.
For the nine months ended September 30, 2007, earnings per share totaled $2.33 compared to $2.29 reported for the first nine months of last year. Net income amounted to $163.0 million in 2007 compared to $162.8 million in 2006. For the nine months of 2007, the return on average assets was 1.42%, and the return on average equity was 14.9%.
In making this announcement, David W. Kemper, Chairman and CEO, said, “We are pleased to report 5% growth in earnings per share and 9% growth in revenue per share compared to the same period last year. Earnings this quarter were driven by a relatively stable net interest margin, continued loan growth and solid results from our fee businesses, especially trust and bankcard which grew 11% and 9%, respectively. Non-interest expense continues to remain well controlled this year. Average loans increased 11% over the same period last year, driven by commercial and consumer loan growth.”
Mr. Kemper continued, “Despite weakness in the residential real estate sector, overall economic activity in our markets has led to continued loan growth. Asset quality has remained good with year-to-date net loan charge-offs totaling just .38% of average loans. Total non-accrual loans and foreclosed real estate increased $7.1 million from last quarter to $41.4 million as of September 30, 2007. Our allowance for loan losses totaled $133.6 million, or 1.28% of outstanding loans, which represents 515% of total non-accrual loans.”
Total assets at September 30, 2007 were $16.0 billion, total loans were $10.8 billion, and total deposits were $12.0 billion. On July 1, 2007, the Company completed its acquisition of Commerce Bank, Denver, Colorado with loans of $75 million and deposits of $72 million. Also during the quarter, the Company purchased approximately 650 thousand shares of its common stock through its treasury stock buyback plan.
(more)
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 in approximately 360 locations in Missouri, Illinois, Kansas, Oklahoma and Colorado. The Company also has operating subsidiaries involved in mortgage banking, credit related insurance, venture capital, and real estate activities.
Posted to the Company’s web site is management’s discussion of third quarter results. To see this information, please visit our web site atwww.commercebank.com.
* * * * * * * * * * * * * * *
For additional information, contact
Jeffery Aberdeen, Controller
at PO Box 419248, Kansas City, MO
or by telephone at (816) 234-2081
Web Site: http://www.commercebank.com
Email: mymoney@commercebank.com
| | | | | | | | | | | | | |
| (Amounts in thousands) | | 6/30/07 | | 9/30/07 | | 9/30/06 |
Non-Accrual Loans | | $ | 33,159 | | | $ | 25,962 | | | $ | 18,845 | |
Foreclosed Real Estate | | $ | 1,084 | | | $ | 15,408 | | | $ | 1,379 | |
Total Non-Performing Assets | | $ | 34,243 | | | $ | 41,370 | | | $ | 20,224 | |
Non-Performing Assets to Loans | | | .33 | % | | | .40 | % | | | .21 | % |
Non-Performing Assets to Total Assets | | | .22 | % | | | .26 | % | | | .13 | % |
| | | | | | | | | | | | |
Loans 90 Days & Over Past Due – Still Accruing | | $ | 21,087 | | | $ | 19,227 | | | $ | 16,251 | |
COMMERCE BANCSHARES, INC.
Management Discussion of Third Quarter Results
September 30, 2007
For the quarter ended September 30, 2007, net income amounted to $55.9 million, an increase of $1.4 million over the same quarter last year and an increase of $324 thousand over the previous quarter. For the current quarter, the return on average assets was 1.4%, the return on average equity was 15.1%, and the efficiency ratio was 59.8%.
Balance Sheet Review
During the 3rd quarter of 2007, average loans, excluding held for sale loans, increased $157.8 million, or 1.6%, compared to the previous quarter, and represented annualized growth of 6.4%. Also, these average loans increased $1.0 billion, or 11.3%, during the 3rd quarter of 2007 compared to the 3rd quarter of 2006. With the acquisition of Commerce Bank, Denver, Colorado, which occurred on July 1, 2007, the Company added loans with a quarterly average balance of $77.8 million, comprised mainly of business, business real estate and construction loans. Overall during the quarter, the increase in average loans compared with the previous quarter consisted mainly of growth in construction ($47.3 million), personal real estate ($23.8 million), consumer ($87.0 million) and consumer credit card ($24.3 million) loans. Business loans grew significantly in September 2007 primarily due to increased seasonal borrowings of approximately $132 million from several large grain dealers, which mainly affected period end numbers. When compared with the same quarter last year, and excluding the effects of completed bank acquisitions, average loans grew by 7.5%.
Available for sale investment securities (excluding fair value adjustments) increased on average by $65.3 million, or 2.1%, this quarter compared with the previous quarter. During the current quarter, sales, maturities and principal paydowns of securities totaled $242 million, while the Company reinvested $522 million in federal agency, mortgage-backed and other asset-backed securities.
Total average deposits decreased by $18.0 million during the 3rd quarter of 2007 compared to the previous quarter, and included $97.3 million of deposits acquired in the Commerce Bank, Denver, transaction mentioned above. Compared to the 3rd quarter of 2006, average deposits grew by $761.5 million, or 6.8%, which included $391.8 million in deposits related to four bank acquisitions completed in the last 14 months, including the deposits acquired from Commerce Bank, Denver. Exclusive of these acquisitions, deposits grew by 3.4%, or $369.7 million. Compared to the previous quarter, average deposits decreased mainly due to a decline of $100.1 million in certain short-term jumbo certificates of deposit, as the Company further diversified its funding to other sources. The average loans to deposits ratio in the current quarter was 88.7%, compared to 87.7% in the previous quarter.
Average borrowings increased $227.1 million in the current quarter compared to the prior quarter, mainly due to increases in funding from federal funds ($104.8 million), repurchase agreements ($51.8 million), and Federal Home Loan Bank advances ($71.0 million).
Net Interest Income
Net interest income in the 3rd quarter of 2007 amounted to $135.3 million, an increase of $1.4 million, or 1.0%, compared with the previous quarter and an increase of $6.5 million, or 5.1%, compared to the 3rd quarter of last year. During the 3rd quarter of 2007, the net yield on earning assets (tax-equivalent) was 3.77%, compared with 3.82% in the previous quarter and 3.84% in the same period last year.
The increase of $1.4 million in net interest income in the 3rd quarter of 2007 over the previous quarter was primarily the result of an increase in average loan balances and higher overall earnings from investment securities, offset by higher rates paid on deposits and an increase in average overnight borrowings. Interest income on loans grew by $5.1 million this quarter mainly due to higher average balances and rates on consumer and construction loans. The $1.6 million increase in interest income on investment securities resulted mainly from higher balances and rates earned on mortgage-backed and other asset-backed investment securities. Interest expense on deposits grew $1.5 million in the 3rd quarter of 2007 compared with the previous quarter as a result of higher rates paid on various money market deposit products, coupled with higher average balances on premium money market accounts. Interest expense on other borrowings increased $2.6 million, due to higher average balances of federal funds, repurchase agreements, and Federal Home Loan Bank advances.
During the current quarter, the overall tax equivalent yield on interest earning assets remained flat with the previous quarter, while the overall cost of interest bearing liabilities increased just 4 basis points to 3.08%.
Non-Interest Income
For the 3rd quarter of 2007, total non-interest income amounted to $95.1 million, an increase of 8.9% compared to $87.3 million in the same period last year, and an increase of 1.1% compared to $94.1 million recorded in the previous quarter. The increase in non-interest income over the 3rd quarter of last year resulted mainly from double digit growth in trust, brokerage, bond trading, and corporate cash management fee income. Bank card fees for the quarter increased 9.2% over the 3rd quarter of last year, primarily due to higher fees earned on debit and corporate card transactions, which grew by 9.9% and 34.9%, respectively. Merchant fees, included in bank card revenues, decreased 8.8%, mainly due to the loss of a large merchant customer at the end of last year. Credit card fees increased 4.5%. Trust fees for the quarter increased 11.3% over the same quarter last year due to
COMMERCE BANCSHARES, INC.
Management Discussion of Third Quarter Results
September 30, 2007
growth in personal and corporate trust fees. Deposit account fees grew 1.4% this quarter over the same period last year, as a result of flat overdraft fee income coupled with a 10.0% increase in corporate cash management fees, which increased as a result of new customer acquisitions. Brokerage fees continued to grow this quarter and were up 23.4% over last year.
During the current quarter, gains on sales of student loans totaled $1.9 million compared with $1.6 million in the previous quarter. Approximately $54.4 million of student loans were sold this quarter. The ratio of non-interest income to total revenue was 41.3% in the 3rd quarter of 2007.
Investment Securities Gains and Losses
Net securities gains amounted to $1.6 million in the 3rd quarter of 2007, compared to net gains of $3.3 million in the same quarter last year and net losses of $493 thousand in the previous quarter. The net gain in the current quarter included net gains of $671 thousand on sales of certain equity securities owned by the parent company coupled with a net gain of $883 thousand due to fair value adjustments on various private equity investments.
Non-Interest Expense
Non-interest expense for the current quarter amounted to $139.1 million, an increase of $6.8 million, or 5.1%, compared with amounts recorded in the same period last year, and was $2.7 million or 2.0% higher than amounts recorded in the prior quarter. Excluding the effects of the bank acquisitions mentioned above, non-interest expense in the current quarter grew by 2.7% over the same period last year. Compared to the 3rd quarter of last year, salaries and benefits expense increased $5.1 million, or 7.1%, mainly as a result of normal merit increases and the effects of the bank acquisitions, which increased salaries and benefits by approximately $1.5 million. Full-time equivalent employees totaled 5,077 and 4,900 at September 30, 2007 and 2006, respectively.
Compared with the 3rd quarter of last year, occupancy and supplies and communication costs increased 5.1% and 5.9%, respectively, for a total increase of $1.0 million, while amortization of intangible assets (included in other expense) grew by $1.2 million. Much of these increases were due to the recent bank acquisitions. Data processing and equipment costs, however, declined by a total of $1.8 million reflecting lower software, depreciation, and equipment moving expense associated with the relocation of a check processing function in the third quarter of 2006.
Income Taxes
The effective tax rate for the Company was 31.3% for the current quarter, compared with 32.2% in the previous quarter and 31.4% in the 3rd quarter of 2006.
Credit Quality
Net loan charge-offs for the 3rd quarter of 2007 amounted to $11.5 million, compared with $9.1 million in the prior quarter and $7.9 million in the 3rd quarter of last year. The increase in net charge-offs in the 3rd quarter of 2007 compared to the previous quarter was the result of higher business, personal banking and business real estate loan charge-offs, offset by lower consumer credit card loan charge-offs. Year-to-date, the ratio of net loan charge-offs to total average loans was .38% compared to .27% last year.
For the 3rd quarter of 2007, annualized net charge-offs on average consumer credit card loans were 3.15%, compared with 3.69% in the previous quarter and 3.00% in the same period last year. Additionally, personal banking loan net charge-offs for the quarter amounted to .47% of average personal banking loans, compared to .37% in the previous quarter and .42% in the same period last year. The provision for loan losses for the quarter totaled $11.5 million, and was $2.4 million higher than the previous quarter and $3.9 million higher than the 3rd quarter of 2006. The allowance for loan losses at September 30, 2007 amounted to $133.6 million, or 1.28% of total loans, excluding held for sale loans.
Total non-performing assets amounted to $41.4 million, an increase of $7.1 million over the previous quarter, and represented .40% of loans outstanding. This increase was mainly the result of placing one business loan of $5.5 million on non-accrual status after recording a loan charge-off of $1.4 million. The loan is secured by agricultural equipment and real estate which are in the process of being sold. Also, the Company foreclosed on a non-accrual loan totaling $11.8 million secured by undeveloped land and residential lots, which has been recorded in foreclosed real estate, pending sale of the property. Non-performing assets are comprised of non-accrual loans ($26.0 million) and foreclosed real estate ($15.4 million). Loans past due more than 90 days and still accruing interest totaled $19.2 million at September 30, 2007.
Other
The Company maintains a treasury stock buyback program. During the current quarter, the Company purchased 650 thousand shares of treasury stock at an average cost of $45.49 per share. Effective July 1, 2007, the Company completed its purchase of Commerce Bank, Denver, Colorado, which has one location and loans and deposits of $74.5 million and $72.2 million, respectively.
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 significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements.
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
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| | | For the Three Months Ended | | | For the Nine Months Ended |
| (Unaudited) | | June 30 | | Sept. 30 | | Sept. 30 | | | Sept. 30 | | Sept. 30 |
| | | 2007 | | 2007 | | 2006 | | | 2007 | | 2006 |
| | | | |
| FINANCIAL SUMMARY(In thousands, except per share data) | | | | | | | | | | | | | |
| Net interest income | | $ | 133,864 | | | $ | 135,262 | | | $ | 128,753 | | | | $ | 400,605 | | | $ | 378,967 | |
| Taxable equivalent net interest income | | | 136,139 | | | | 137,357 | | | | 130,621 | | | | | 407,190 | | | | 383,718 | |
| Non-interest income | | | 94,059 | | | | 95,137 | | | | 87,332 | | | | | 273,480 | | | | 262,556 | |
| Investment securities gains (losses), net | | | (493 | ) | | | 1,562 | | | | 3,324 | | | | | 4,964 | | | | 9,011 | |
| Provision for loan losses | | | 9,054 | | | | 11,455 | | | | 7,575 | | | | | 28,670 | | | | 17,679 | |
| Non-interest expense | | | 136,349 | | | | 139,093 | | | | 132,304 | | | | | 411,861 | | | | 391,815 | |
| Net income | | | 55,574 | | | | 55,898 | | | | 54,548 | | | | | 162,968 | | | | 162,825 | |
| Cash dividends | | | 17,319 | | | | 17,133 | | | | 16,605 | | | | | 51,811 | | | | 49,295 | |
| Net total loan charge-offs | | | 9,052 | | | | 11,456 | | | | 7,875 | | | | | 28,669 | | | | 17,980 | |
| Net business charge-offs (recov) | | | (11 | ) | | | 1,853 | | | | 125 | | | | | 2,546 | | | | (697 | ) |
| Net credit card charge-offs | | | 5,948 | | | | 5,331 | | | | 4,588 | | | | | 17,092 | | | | 12,723 | |
| Net personal banking charge-offs (1) | | | 1,823 | | | | 2,449 | | | | 1,924 | | | | | 6,237 | | | | 4,019 | |
| Net real estate charge-offs | | | 988 | | | | 1,420 | | | | 175 | | | | | 1,907 | | | | — | |
| Net overdraft charge-offs | | | 304 | | | | 403 | | | | 1,063 | | | | | 887 | | | | 1,935 | |
| Per share: | | | | | | | | | | | | | | | | | | | | | |
| Net income — basic | | $ | 0.80 | | | $ | 0.82 | | | $ | 0.78 | | | | $ | 2.36 | | | $ | 2.32 | |
| Net income — diluted | | $ | 0.79 | | | $ | 0.81 | | | $ | 0.77 | | | | $ | 2.33 | | | $ | 2.29 | |
| Cash dividends | | $ | 0.250 | | | $ | 0.250 | | | $ | 0.233 | | | | $ | 0.750 | | | $ | 0.700 | |
| Diluted wtd. average shares o/s | | | 70,067 | | | | 69,245 | | | | 70,961 | | | | | 69,930 | | | | 71,037 | |
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RATIOS | | | | | | | | | | | | | | | | | | | | | |
| Average loans to deposits (2) | | | 87.73 | % | | | 88.67 | % | | | 85.36 | % | | | | 88.06 | % | | | 84.34 | % |
| Return on total average assets | | | 1.46 | % | | | 1.43 | % | | | 1.50 | % | | | | 1.42 | % | | | 1.56 | % |
| Return on total average stockholders’ equity | | | 15.12 | % | | | 15.10 | % | | | 15.64 | % | | | | 14.88 | % | | | 16.12 | % |
| Non-interest income to revenue (3) | | | 41.27 | % | | | 41.29 | % | | | 40.42 | % | | | | 40.57 | % | | | 40.93 | % |
| Efficiency ratio (4) | | | 59.43 | % | | | 59.81 | % | | | 61.16 | % | | | | 60.64 | % | | | 61.05 | % |
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AT PERIOD END | | | | | | | | | | | | | | | | | | | | | |
| Book value per share based on total stockholders’ equity | | $ | 21.12 | | | $ | 21.79 | | | $ | 20.55 | | | | | | | | | | |
| Market value per share | | $ | 45.30 | | | $ | 45.89 | | | $ | 48.16 | | | | | | | | | | |
| Allowance for loan losses as a percentage of loans | | | 1.30 | % | | | 1.28 | % | | | 1.38 | % | | | | | | | | | |
| Tier I leverage ratio | | | 8.94 | % | | | 8.79 | % | | | 9.47 | % | | | | | | | | | |
| Common shares outstanding | | | 69,013,266 | | | | 68,455,725 | | | | 71,032,313 | | | | | | | | | | |
| Shareholders of record | | | 4,685 | | | | 4,623 | | | | 4,721 | | | | | | | | | | |
| Number of bank/ATM locations | | | 361 | | | | 360 | | | | 360 | | | | | | | | | | |
| Number of bank charters | | | 3 | | | | 3 | | | | 3 | | | | | | | | | | |
| Full-time equivalent employees | | | 5,051 | | | | 5,077 | | | | 4,900 | | | | | | | | | | |
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| | | | | | | Sept. 30 | | Sept. 30 | | | | | | | | | |
OTHER YTD INFORMATION | | | | | | | 2007 | | | | 2006 | | | | | | | | | | |
| | | | | | | | | | |
| High market value per share | | | | | | $ | 50.77 | | | $ | 50.67 | | | | | | | | | | |
| Low market value per share | | | | | | $ | 43.28 | | | $ | 46.30 | | | | | | | | | | |
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| | |
| (1) | | Includes net charge-offs on consumer and home equity loans |
| |
| (2) | | Includes loans held for sale |
| |
| (3) | | Revenue includes net interest income and non-interest income. |
| |
| (4) | | The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of revenue. |
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) | | For the Three Months Ended | | | | For the Nine Months Ended | |
| (In thousands, except per share data) | | June 30 | | | Sept. 30 | | | Sept. 30 | | | | Sept. 30 | | | Sept. 30 | |
| | | 2007 | | | 2007 | | | 2006 | | | | 2007 | | | 2006 | |
| | | | |
INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 183,736 | | | $ | 188,863 | | | $ | 167,921 | | | | $ | 549,142 | | | $ | 468,206 | |
| Interest and fees on loans held for sale | | | 6,185 | | | | 5,049 | | | | 5,479 | | | | | 17,314 | | | | 16,256 | |
| Interest on investment securities | | | 36,370 | | | | 38,011 | | | | 37,791 | | | | | 112,800 | | | | 111,182 | |
| Interest on federal funds sold and securities purchased under agreements to resell | | | 6,517 | | | | 6,351 | | | | 5,079 | | | | | 20,093 | | | | 8,503 | |
| | | | | | | | | | | | | | | | | |
| Total interest income | | | 232,808 | | | | 238,274 | | | | 216,270 | | | | | 699,349 | | | | 604,147 | |
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| | | | | | | | | | | | | | | | | | | | | | |
INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits: | | | | | | | | | | | | | | | | | | | | | |
| Savings, interest checking and money market | | | 29,812 | | | | 31,173 | | | | 26,301 | | | | | 88,622 | | | | 68,910 | |
| Time open and C.D.’s of less than $100,000 | | | 27,671 | | | | 28,541 | | | | 23,238 | | | | | 82,777 | | | | 59,417 | |
| Time open and C.D.’s of $100,000 and over | | | 19,566 | | | | 18,812 | | | | 15,706 | | | | | 55,291 | | | | 42,799 | |
| Interest on other borrowings | | | 21,895 | | | | 24,486 | | | | 22,272 | | | | | 72,054 | | | | 54,054 | |
| | | | | | | | | | | | | | | | | |
| Total interest expense | | | 98,944 | | | | 103,012 | | | | 87,517 | | | | | 298,744 | | | | 225,180 | |
| | | | | | | | | | | | | | | | | |
| Net interest income | | | 133,864 | | | | 135,262 | | | | 128,753 | | | | | 400,605 | | | | 378,967 | |
| Provision for loan losses | | | 9,054 | | | | 11,455 | | | | 7,575 | | | | | 28,670 | | | | 17,679 | |
| | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 124,810 | | | | 123,807 | | | | 121,178 | | | | | 371,935 | | | | 361,288 | |
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| | | | | | | | | | | | | | | | | | | | | | |
NON-INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | |
| Deposit account charges and other fees | | | 30,081 | | | | 30,148 | | | | 29,723 | | | | | 86,740 | | | | 86,130 | |
| Bank card transaction fees | | | 25,855 | | | | 26,409 | | | | 24,187 | | | | | 75,347 | | | | 69,453 | |
| Trust fees | | | 19,972 | | | | 19,823 | | | | 17,805 | | | | | 58,448 | | | | 53,616 | |
| Trading account profits and commissions | | | 1,440 | | | | 2,174 | | | | 1,639 | | | | | 5,475 | | | | 6,214 | |
| Consumer brokerage services | | | 3,332 | | | | 3,056 | | | | 2,476 | | | | | 9,431 | | | | 7,636 | |
| Loan fees and sales | | | 2,712 | | | | 2,919 | | | | 1,956 | | | | | 6,916 | | | | 8,444 | |
| Other | | | 10,667 | | | | 10,608 | | | | 9,546 | | | | | 31,123 | | | | 31,063 | |
| | | | | | | | | | | | | | | | | |
| Total non-interest income | | | 94,059 | | | | 95,137 | | | | 87,332 | | | | | 273,480 | | | | 262,556 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
INVESTMENT SECURITIES GAINS, NET | | | (493 | ) | | | 1,562 | | | | 3,324 | | | | | 4,964 | | | | 9,011 | |
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| | | | | | | | | | | | | | | | | | | | | | |
NON-INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 76,123 | | | | 77,312 | | | | 72,169 | | | | | 230,335 | | | | 215,133 | |
| Net occupancy | | | 10,843 | | | | 11,572 | | | | 11,009 | | | | | 34,205 | | | | 32,216 | |
| Equipment | | | 5,681 | | | | 5,761 | | | | 7,109 | | | | | 17,875 | | | | 19,129 | |
| Supplies and communication | | | 8,586 | | | | 8,546 | | | | 8,073 | | | | | 25,638 | | | | 24,338 | |
| Data processing and software | | | 12,149 | | | | 12,407 | | | | 12,904 | | | | | 35,787 | | | | 37,928 | |
| Marketing | | | 4,859 | | | | 4,775 | | | | 4,397 | | | | | 13,952 | | | | 13,372 | |
| Other | | | 18,108 | | | | 18,720 | | | | 16,643 | | | | | 54,069 | | | | 49,699 | |
| | | | | | | | | | | | | | | | | |
| Total non-interest expense | | | 136,349 | | | | 139,093 | | | | 132,304 | | | | | 411,861 | | | | 391,815 | |
| | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 82,027 | | | | 81,413 | | | | 79,530 | | | | | 238,518 | | | | 241,040 | |
| Less income taxes | | | 26,453 | | | | 25,515 | | | | 24,982 | | | | | 75,550 | | | | 78,215 | |
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NET INCOME | | $ | 55,574 | | | $ | 55,898 | | | $ | 54,548 | | | | $ | 162,968 | | | $ | 162,825 | |
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| | | | | | | | | | | | | | | | | | | | | | |
| Net income per share — basic | | $ | 0.80 | | | $ | 0.82 | | | $ | 0.78 | | | | $ | 2.36 | | | $ | 2.32 | |
| | | | | | | | | | | | | | | | | |
| Net income per share — diluted | | $ | 0.79 | | | $ | 0.81 | | | $ | 0.77 | | | | $ | 2.33 | | | $ | 2.29 | |
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| Cash dividends per common share | | $ | 0.250 | | | $ | 0.250 | | | $ | 0.233 | | | | $ | 0.750 | | | $ | 0.700 | |
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| | | | | | | | | | | | | |
| (Unaudited) | | June 30 | | | Sept. 30 | | | Sept. 30 | |
| (In thousands) | | 2007 | | | 2007 | | | 2006 | |
| |
ASSETS | | | | | | | | | | | | |
| Loans | | $ | 10,225,921 | | | $ | 10,451,029 | | | $ | 9,532,158 | |
| Allowance for loan losses | | | (132,960 | ) | | | (133,588 | ) | | | (131,834 | ) |
| | | | | | | | | | |
Net loans | | | 10,092,961 | | | | 10,317,441 | | | | 9,400,324 | |
| | | | | | | | | | |
| Loans held for sale | | | 258,563 | | | | 303,658 | | | | 301,032 | |
| Investment securities: | | | | | | | | | | | | |
| Available for sale | | | 3,129,310 | | | | 3,411,804 | | | | 3,533,073 | |
| Trading | | | 19,600 | | | | 17,189 | | | | 7,770 | |
| Non-marketable | | | 92,213 | | | | 93,086 | | | | 87,301 | |
| | | | | | | | | | |
Total investment securities | | | 3,241,123 | | | | 3,522,079 | | | | 3,628,144 | |
| | | | | | | | | | |
| Federal funds sold and securities purchased under agreements to resell | | | 566,145 | | | | 520,484 | | | | 495,262 | |
| Cash and due from banks | | | 497,909 | | | | 543,626 | | | | 479,963 | |
| Land, buildings and equipment — net | | | 397,108 | | | | 403,747 | | | | 388,337 | |
| Goodwill | | | 110,705 | | | | 125,088 | | | | 100,933 | |
| Other intangible assets — net | | | 18,052 | | | | 22,322 | | | | 13,325 | |
| Other assets | | | 336,805 | | | | 265,864 | | | | 344,292 | |
| | | | | | | | | | |
Total assets | | $ | 15,519,371 | | | $ | 16,024,309 | | | $ | 15,151,612 | |
| | | | | | | | | | |
| | | | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | |
| Non-interest bearing demand | | $ | 1,271,730 | | | $ | 1,148,991 | | | $ | 1,205,193 | |
| Savings, interest checking and money market | | | 6,910,086 | | | | 6,971,076 | | | | 6,704,679 | |
| Time open and C.D.’s of less than $100,000 | | | 2,363,580 | | | | 2,398,877 | | | | 2,286,426 | |
| Time open and C.D.’s of $100,000 and over | | | 1,516,326 | | | | 1,432,831 | | | | 1,368,140 | |
| | | | | | | | | | |
Total deposits | | | 12,061,722 | | | | 11,951,775 | | | | 11,564,438 | |
| Federal funds purchased and securities sold under agreements to repurchase | | | 1,494,604 | | | | 2,059,095 | | | | 1,768,899 | |
| Other borrowings | | | 346,137 | | | | 345,749 | | | | 166,372 | |
| Other liabilities | | | 159,221 | | | | 176,124 | | | | 192,116 | |
| | | | | | | | | | |
Total liabilities | | | 14,061,684 | | | | 14,532,743 | | | | 13,691,825 | |
| | | | | | | | | | |
| Stockholders’ equity: | | | | | | | | | | | | |
| Preferred stock | | | — | | | | — | | | | — | |
| Common stock | | | 352,330 | | | | 352,330 | | | | 347,049 | |
| Capital surplus | | | 422,189 | | | | 421,733 | | | | 384,343 | |
| Retained earnings | | | 756,014 | | | | 794,779 | | | | 806,551 | |
| Treasury stock | | | (65,904 | ) | | | (91,040 | ) | | | (84,616 | ) |
| Accumulated other comprehensive income (loss) | | | (6,942 | ) | | | 13,764 | | | | 6,460 | |
| | | | | | | | | | |
Total stockholders’ equity | | | 1,457,687 | | | | 1,491,566 | | | | 1,459,787 | |
| | | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 15,519,371 | | | $ | 16,024,309 | | | $ | 15,151,612 | |
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE BALANCES
| | | | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | | For the Nine Months Ended | |
| (Unaudited) | | June 30 | | | Sept. 30 | | | Sept. 30 | | | | Sept. 30 | | | Sept. 30 | |
| (Dollars in thousands) | | 2007 | | | 2007 | | | 2006 | | | | 2007 | | | 2006 | |
| | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | |
| Business | | $ | 3,134,650 | | | $ | 3,103,903 | | | $ | 2,709,096 | | | | $ | 3,075,994 | | | $ | 2,649,218 | |
| Real estate — construction | | | 657,956 | | | | 705,232 | | | | 582,542 | | | | | 670,077 | | | | 511,236 | |
| Real estate — business | | | 2,224,877 | | | | 2,220,136 | | | | 2,082,020 | | | | | 2,197,714 | | | | 2,017,312 | |
| Real estate — personal | | | 1,514,445 | | | | 1,538,279 | | | | 1,450,491 | | | | | 1,514,058 | | | | 1,389,964 | |
| Consumer | | | 1,518,855 | | | | 1,605,879 | | | | 1,373,127 | | | | | 1,529,894 | | | | 1,331,847 | |
| Home equity | | | 438,471 | | | | 446,208 | | | | 444,979 | | | | | 440,030 | | | | 446,079 | |
| Credit card | | | 646,699 | | | | 670,973 | | | | 606,882 | | | | | 650,345 | | | | 589,750 | |
| Overdrafts | | | 11,311 | | | | 14,468 | | | | 13,548 | | | | | 12,701 | | | | 15,142 | |
| | | | | | | | | | | | | | | | | |
Total loans | | | 10,147,264 | | | | 10,305,078 | | | | 9,262,685 | | | | | 10,090,813 | | | | 8,950,548 | |
| | | | | | | | | | | | | | | | | |
| Loans held for sale | | | 354,878 | | | | 293,610 | | | | 290,465 | | | | | 332,944 | | | | 316,234 | |
Investment securities (excluding unrealized gains and losses): | | | | | | | | | | | | | | | | | | | | | |
| Available for sale | | | 3,156,708 | | | | 3,222,014 | | | | 3,448,592 | | | | | 3,235,568 | | | | 3,461,602 | |
| Trading | | | 24,430 | | | | 16,343 | | | | 14,223 | | | | | 19,768 | | | | 18,109 | |
| Non-marketable | | | 90,018 | | | | 98,177 | | | | 86,230 | | | | | 88,645 | | | | 85,640 | |
| | | | | | | | | | | | | | | | | |
Total investment securities | | | 3,271,156 | | | | 3,336,534 | | | | 3,549,045 | | | | | 3,343,981 | | | | 3,565,351 | |
| | | | | | | | | | | | | | | | | |
| Federal funds sold and securities purchased under agreements to resell | | | 503,526 | | | | 511,834 | | | | 378,404 | | | | | 523,747 | | | | 221,802 | |
| | | | | | | | | | | | | | | | | |
Total interest earning assets | | | 14,276,824 | | | | 14,447,056 | | | | 13,480,599 | | | | | 14,291,485 | | | | 13,053,935 | |
| | | | | | | | | | | | | | | | | |
Total assets | | | 15,315,984 | | | | 15,529,022 | | | | 14,431,791 | | | | | 15,340,914 | | | | 13,982,110 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | | |
| Non-interest bearing deposits | | | 650,119 | | | | 660,681 | | | | 644,103 | | | | | 643,702 | | | | 635,309 | |
| Interest bearing deposits: | | | | | | | | | | | | | | | | | | | | | |
| Savings | | | 406,313 | | | | 392,317 | | | | 393,732 | | | | | 398,660 | | | | 391,556 | |
| Interest checking | | | 193,278 | | | | 211,469 | | | | 164,082 | | | | | 190,180 | | | | 174,368 | |
| Money market | | | 6,812,831 | | | | 6,814,225 | | | | 6,514,270 | | | | | 6,781,490 | | | | 6,494,043 | |
| Time open & C.D.’s of less than $100,000 | | | 2,347,311 | | | | 2,389,019 | | | | 2,155,446 | | | | | 2,348,467 | | | | 2,004,486 | |
| Time open & C.D.’s of $100,000 and over | | | 1,561,463 | | | | 1,485,637 | | | | 1,320,235 | | | | | 1,474,521 | | | | 1,287,974 | |
| | | | | | | | | | | | | | | | | |
| Total interest bearing deposits | | | 11,321,196 | | | | 11,292,667 | | | | 10,547,765 | | | | | 11,193,318 | | | | 10,352,427 | |
| | | | | | | | | | | | | | | | | |
Total deposits | | | 11,971,315 | | | | 11,953,348 | | | | 11,191,868 | | | | | 11,837,020 | | | | 10,987,736 | |
| | | | | | | | | | | | | | | | | |
Borrowings: | | | | | | | | | | | | | | | | | | | | | |
| Federal funds purchased and securities sold under agreements to repurchase | | | 1,471,784 | | | | 1,628,453 | | | | 1,580,998 | | | | | 1,688,512 | | | | 1,341,879 | |
| Other borrowings | | | 275,618 | | | | 346,076 | | | | 163,152 | | | | | 225,125 | | | | 209,378 | |
| | | | | | | | | | | | | | | | | |
Total borrowings | | | 1,747,402 | | | | 1,974,529 | | | | 1,744,150 | | | | | 1,913,637 | | | | 1,551,257 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total interest bearing liabilities | | | 13,068,598 | | | | 13,267,196 | | | | 12,291,915 | | | | | 13,106,955 | | | | 11,903,684 | |
| Total stockholders’ equity | | | 1,473,999 | | | | 1,468,600 | | | | 1,383,584 | | | | | 1,464,118 | | | | 1,350,642 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net yield on interest earning assets (tax-equivalent basis) | | | 3.82 | % | | | 3.77 | % | | | 3.84 | % | | | | 3.81 | % | | | 3.93 | % |
