KANSAS CITY - Commerce Bancshares, Inc. (NASDAQ:CBSH) reported third quarter earnings that exceeded analyst expectations, as the regional bank saw growth in non-interest income and maintained strong credit quality.
The company posted earnings of $1.07 per share for the quarter ended September 30, 2024, beating the analyst consensus estimate of $1.01. This was flat compared to earnings of $1.07 per share in the previous quarter and up from $0.92 per share in the same quarter last year.
Revenue for the quarter came in at $421.4 million, topping the consensus estimate of $419.72 million. This represented an increase from $414.5 million in the second quarter and $391.5 million in the third quarter of 2023.
Non-interest income rose 11.2% YoY to $159.0 million, driven primarily by higher trust fees, which grew 11.1% compared to the same period last year. The company also saw increases in capital market fees and deposit account fees.
"We are pleased with our third quarter results, which exemplify our diversified operating model and the growth mindset of our team," said John Kemper (NYSE:KMPR), President and CEO of Commerce Bancshares.
Net interest income was relatively flat at $262.4 million compared to the previous quarter. The net yield on interest earning assets decreased 5 basis points to 3.50%.
Credit quality remained strong, with non-accrual loans at 0.11% of total loans, unchanged from the previous quarter. The allowance for credit losses on loans increased slightly to 0.94% of total loans.
Average deposits increased $65.3 million, or 0.3%, compared to the prior quarter. The average rate paid on interest bearing deposits in the current quarter was 2.00%, up just 1 basis point from the previous quarter.
For the quarter, Commerce Bancshares reported a return on average assets of 1.80% and a return on average equity of 16.81%. The efficiency ratio was 56.3%.
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