Commerce Bancshares Inc. (CBSH, Financial) filed Quarterly Report for the period ended 2010-09-30.
Commerce Bancshares Inc. has a market cap of $3.23 billion; its shares were traded at around $38.8 with a P/E ratio of 15.46 and P/S ratio of 2.73. The dividend yield of Commerce Bancshares Inc. stocks is 2.42%. Commerce Bancshares Inc. had an annual average earning growth of 3.3% over the past 10 years.CBSH is in the portfolios of RS Investment Management, Jim Simons of Renaissance Technologies LLC.
At September 30, 2010, non-agency guaranteed mortgage-backed securities with a par value of $197.5 million were identified as other than temporarily impaired. The credit-related impairment loss on these securities amounted to $6.7 million, which was recorded in the consolidated income statement in investment securities gains (losses), net. The noncredit-related loss on these securities, which was recorded in other comprehensive income, was $14.9 million on a pre-tax basis.
For the quarter ended September 30, 2010, net income amounted to $55.9 million, an increase of $4.2 million, or 8.2%, compared to the third quarter of the previous year. For the current quarter, the annualized return on average assets was 1.19%, the annualized return on average equity was 10.98%, and the efficiency ratio was 59.41%. Diluted earnings per share was $.67, an increase of 6.3% compared to $.63 per share in the third quarter of 2009. Compared to the third quarter of last year, net interest income decreased $4.1 million, or 2.5%, mainly due to lower rates earned on investment securities and lower loan balances, partly offset by higher investment security balances and lower rates paid on deposits. In addition, non-interest income decreased $2.6 million, largely due to a $6.1 million decrease in deposit account fees. This reduction occurred as the Company implemented new regulations on July 1, 2010 which limited overdraft fees on debit card transactions. The effect was partly offset by increases in bank card and trust fees. Compared to the same period last year, non-interest expense increased $630 thousand, or .4%, due mainly to a $1.3 million increase in data processing and software expense and the reversal in the previous period of $2.5 million of Visa litigation expense, partly offset by declines of $1.8 million in salaries and benefits expense and $1.3 million in supplies and communication costs. The provision for loan losses totaled $21.8 million for the current quarter, representing a decrease of $13.5 million from the third quarter of 2009.
Net income for the first nine months of 2010 was $159.8 million, an increase of $40.3 million, or 33.8%, over the same period in the previous year. For the first nine months of 2010, the annualized return on average assets was 1.17%, the annualized return on average equity was 10.85%, and the efficiency ratio was 59.48%. Diluted earnings per share was $1.91, an increase of 29.9% over $1.47 per share in the same period last year. Compared to the first nine months of 2009, net interest income grew $14.3 million, or 3.0%. Non-interest income grew $1.3 million, or .4%, largely due to an increase of $19.3 million in bank card transaction fees and $2.4 million in trust fees, which were partially offset by declines in deposit account fees, bond trading income, consumer brokerage services, and loan fees and sales. Non-interest expense remained well-controlled, declining $498 thousand compared to the same period last year. The provision for loan losses totaled $78.4 million, down $41.3 million, or 34.5%, compared to the same period last year.
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Commerce Bancshares Inc. has a market cap of $3.23 billion; its shares were traded at around $38.8 with a P/E ratio of 15.46 and P/S ratio of 2.73. The dividend yield of Commerce Bancshares Inc. stocks is 2.42%. Commerce Bancshares Inc. had an annual average earning growth of 3.3% over the past 10 years.CBSH is in the portfolios of RS Investment Management, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
The Company carries its investment securities at fair value, and employs valuation techniques which utilize observable inputs when those inputs are available. These observable inputs reflect assumptions market participants would use in pricing the security, developed based on market data obtained from sources independent of the Company. When such information is not available, the Company employs valuation techniques which utilize unobservable inputs, or those which reflect the Companys own assumptions about market participants, based on the best information available in the circumstances. These valuation methods typically involve cash flow and other financial modeling techniques. Changes in underlying factors, assumptions, estimates, or other inputs to the valuation techniques could have a material impact on the Companys future financial condition and results of operations. Assets and liabilities carried at fair value inherently result in more financial statement volatility. Under the fair value measurement hierarchy, fair value measurements are classified as Level 1 (quoted prices), Level 2 (based on observable inputs) or Level 3 (based on unobservable, internally-derived inputs), as discussed in more detail in Note 13 to the consolidated financial statements. Most of the available for sale investment portfolio is priced utilizing industry-standard models that consider various assumptions which are observable in the marketplace, or can be derived from observable data. Such securities totaled approximately $6.5 billion, or 91.1% of the available for sale portfolio at September 30, 2010, and were classified as Level 2 measurements. The Company also holds $154.1 million in auction rate securities. These were classified as Level 3 measurements, as no market currently exists for these securities, and fair values were derived from internally generated cash flow valuation models which used unobservable inputs which were significant to the overall measurement.At September 30, 2010, non-agency guaranteed mortgage-backed securities with a par value of $197.5 million were identified as other than temporarily impaired. The credit-related impairment loss on these securities amounted to $6.7 million, which was recorded in the consolidated income statement in investment securities gains (losses), net. The noncredit-related loss on these securities, which was recorded in other comprehensive income, was $14.9 million on a pre-tax basis.
For the quarter ended September 30, 2010, net income amounted to $55.9 million, an increase of $4.2 million, or 8.2%, compared to the third quarter of the previous year. For the current quarter, the annualized return on average assets was 1.19%, the annualized return on average equity was 10.98%, and the efficiency ratio was 59.41%. Diluted earnings per share was $.67, an increase of 6.3% compared to $.63 per share in the third quarter of 2009. Compared to the third quarter of last year, net interest income decreased $4.1 million, or 2.5%, mainly due to lower rates earned on investment securities and lower loan balances, partly offset by higher investment security balances and lower rates paid on deposits. In addition, non-interest income decreased $2.6 million, largely due to a $6.1 million decrease in deposit account fees. This reduction occurred as the Company implemented new regulations on July 1, 2010 which limited overdraft fees on debit card transactions. The effect was partly offset by increases in bank card and trust fees. Compared to the same period last year, non-interest expense increased $630 thousand, or .4%, due mainly to a $1.3 million increase in data processing and software expense and the reversal in the previous period of $2.5 million of Visa litigation expense, partly offset by declines of $1.8 million in salaries and benefits expense and $1.3 million in supplies and communication costs. The provision for loan losses totaled $21.8 million for the current quarter, representing a decrease of $13.5 million from the third quarter of 2009.
Net income for the first nine months of 2010 was $159.8 million, an increase of $40.3 million, or 33.8%, over the same period in the previous year. For the first nine months of 2010, the annualized return on average assets was 1.17%, the annualized return on average equity was 10.85%, and the efficiency ratio was 59.48%. Diluted earnings per share was $1.91, an increase of 29.9% over $1.47 per share in the same period last year. Compared to the first nine months of 2009, net interest income grew $14.3 million, or 3.0%. Non-interest income grew $1.3 million, or .4%, largely due to an increase of $19.3 million in bank card transaction fees and $2.4 million in trust fees, which were partially offset by declines in deposit account fees, bond trading income, consumer brokerage services, and loan fees and sales. Non-interest expense remained well-controlled, declining $498 thousand compared to the same period last year. The provision for loan losses totaled $78.4 million, down $41.3 million, or 34.5%, compared to the same period last year.
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