In making this announcement,
Total assets at
This financial news release, including management’s discussion of first quarter results, is posted to the Company’s web site at www.commercebank.com.
FINANCIAL HIGHLIGHTS |
|||||||||||||
For the Three Months Ended | |||||||||||||
(Unaudited) |
2017 |
2016 |
2016 |
||||||||||
FINANCIAL SUMMARY | |||||||||||||
Net interest income | |
|
|
||||||||||
Non-interest income | 117,066 | 119,479 | 119,024 | ||||||||||
Total revenue | 295,339 | 292,681 | 282,799 | ||||||||||
Investment securities gains (losses), net | (772 | ) | 3,651 | (995 | ) | ||||||||
Provision for loan losses | 11,128 | 10,400 | 9,439 | ||||||||||
Non-interest expense | 186,830 | 181,261 | 177,473 | ||||||||||
Income before taxes | 96,609 | 104,671 | 94,892 | ||||||||||
Income taxes | 24,907 | 32,297 | 29,370 | ||||||||||
Non-controlling interest expense (income) | 198 | 795 | 148 | ||||||||||
Net income attributable to |
71,504 | 71,579 | 65,374 | ||||||||||
Preferred stock dividends | 2,250 | 2,250 | 2,250 | ||||||||||
Net income available to common shareholders | |
|
|
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Earnings per common share: | |||||||||||||
Net income — basic | |
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|
||||||||||
Net income — diluted | |
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|
||||||||||
Effective tax rate | 25.83 | % | 31.09 | % | 31.00 | % | |||||||
Tax equivalent net interest income | |
|
|
||||||||||
Average total interest earning assets (1) | $ | 24,205,227 | $ | 23,775,165 | $ | 23,332,333 | |||||||
Diluted wtd. average shares outstanding | 100,767,071 | 100,558,345 | 100,571,214 | ||||||||||
RATIOS | |||||||||||||
Average loans to deposits (2) | 64.39 | % | 64.24 | % | 62.81 | % | |||||||
Return on total average assets | 1.15 | 1.14 | 1.07 | ||||||||||
Return on average common equity (3) | 11.74 | 11.48 | 11.20 | ||||||||||
Non-interest income to total revenue | 39.64 | 40.82 | 42.09 | ||||||||||
Efficiency ratio (4) | 63.14 | 61.82 | 62.62 | ||||||||||
Net yield on interest earning assets | 3.14 | 3.03 | 2.95 | ||||||||||
EQUITY SUMMARY | |||||||||||||
Cash dividends per common share | |
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||||||||||
Cash dividends on common stock | |
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Cash dividends on preferred stock | |
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Book value per common share (5) | |
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Market value per common share (5) | |
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High market value per common share | |
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Low market value per common share | |
|
|
||||||||||
Common shares outstanding (5) | 101,668,824 | 101,460,962 | 101,364,853 | ||||||||||
Tangible common equity to tangible assets (6) | 9.03 | % | 8.66 | % | 8.84 | % | |||||||
Tier I leverage ratio | 9.56 | % | 9.55 | % | 9.11 | % | |||||||
OTHER QTD INFORMATION | |||||||||||||
Number of bank/ATM locations | 336 | 336 | 346 | ||||||||||
Full-time equivalent employees | 4,807 | 4,784 | 4,765 |
(1) |
Excludes allowance for loan losses and unrealized gains/(losses) on available for sale 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. |
|
(5) |
As of period end. |
|
(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). |
|
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||
For the Three Months Ended | ||||||||||||||||
(Unaudited)
(In thousands, except per share data) |
|
2016 |
2016 |
2016 |
2016 |
|||||||||||
Interest income | |
|
|
|
|
|||||||||||
Interest expense | 9,724 | 8,296 | 8,118 | 8,236 | 8,353 | |||||||||||
Net interest income | 178,273 | 173,202 | 171,243 | 171,829 | 163,775 | |||||||||||
Provision for loan losses | 11,128 | 10,400 | 7,263 | 9,216 | 9,439 | |||||||||||
Net interest income after provision for loan losses | 167,145 | 162,802 | 163,980 | 162,613 | 154,336 | |||||||||||
NON-INTEREST INCOME | ||||||||||||||||
Bank card transaction fees | 43,204 | 45,338 | 47,006 | 45,065 | 44,470 | |||||||||||
Trust fees | 32,014 | 31,360 | 30,951 | 30,241 | 29,243 | |||||||||||
Deposit account charges and other fees | 21,942 | 22,134 | 22,241 | 21,328 | 20,691 | |||||||||||
Capital market fees | 2,342 | 2,679 | 2,751 | 2,500 | 2,725 | |||||||||||
Consumer brokerage services | 3,649 | 3,409 | 3,375 | 3,491 | 3,509 | |||||||||||
Loan fees and sales | 3,168 | 2,583 | 3,123 | 3,196 | 2,510 | |||||||||||
Other | 10,747 | 11,976 | 9,872 | 10,749 | 15,876 | |||||||||||
Total non-interest income | 117,066 | 119,479 | 119,319 | 116,570 | 119,024 | |||||||||||
INVESTMENT SECURITIES GAINS (LOSSES), NET | (772 | ) | 3,651 | (1,965 | ) | (744 | ) | (995 | ) | |||||||
NON-INTEREST EXPENSE | ||||||||||||||||
Salaries and employee benefits | 112,369 | 108,639 | 107,004 | 104,808 | 106,859 | |||||||||||
Net occupancy | 11,443 | 11,529 | 12,366 | 11,092 | 11,303 | |||||||||||
Equipment | 4,609 | 4,884 | 4,842 | 4,781 | 4,634 | |||||||||||
Supplies and communication | 5,709 | 5,645 | 5,968 | 5,693 | 6,829 | |||||||||||
Data processing and software | 23,097 | 23,390 | 23,663 | 22,770 | 22,899 | |||||||||||
Marketing | 3,224 | 3,431 | 4,399 | 4,389 | 3,813 | |||||||||||
Deposit insurance | 3,471 | 3,443 | 3,576 | 3,143 | 3,165 | |||||||||||
Other | 22,908 | 20,300 | 19,424 | 20,413 | 17,971 | |||||||||||
Total non-interest expense | 186,830 | 181,261 | 181,242 | 177,089 | 177,473 | |||||||||||
Income before income taxes | 96,609 | 104,671 | 100,092 | 101,350 | 94,892 | |||||||||||
Less income taxes | 24,907 | 32,297 | 30,942 | 31,542 | 29,370 | |||||||||||
Net income | 71,702 | 72,374 | 69,150 | 69,808 | 65,522 | |||||||||||
Less non-controlling interest expense (income) | 198 | 795 | 605 | (85 | ) | 148 | ||||||||||
Net income attributable to |
71,504 | 71,579 | 68,545 | 69,893 | 65,374 | |||||||||||
Less preferred stock dividends | 2,250 | 2,250 | 2,250 | 2,250 | 2,250 | |||||||||||
Net income available to common shareholders | |
|
|
|
|
|||||||||||
Net income per common share — basic | |
|
|
|
|
|||||||||||
Net income per common share — diluted | |
|
|
|
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OTHER INFORMATION | ||||||||||||||||
Return on total average assets | 1.15 | % | 1.14 | % | 1.12 | % | 1.15 | % | 1.07 | % | ||||||
Return on average common equity (1) | 11.74 | 11.48 | 10.97 | 11.69 | 11.20 | |||||||||||
Efficiency ratio (2) | 63.14 | 61.82 | 62.25 | 61.27 | 62.62 | |||||||||||
Effective tax rate | 25.83 | 31.09 | 31.10 | 31.10 | 31.00 | |||||||||||
Net yield on interest earning assets | 3.14 | 3.03 | 3.08 | 3.11 | 2.95 | |||||||||||
Tax equivalent net interest income | |
|
|
|
|
(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. |
|
CONSOLIDATED BALANCE SHEETS – PERIOD END |
|||||||||||||||
(Unaudited)
(In thousands) |
2017 |
2016 |
2016 |
||||||||||||
ASSETS | |||||||||||||||
Loans | |||||||||||||||
Business | $ | 4,888,011 | $ | 4,776,365 | $ | 4,575,081 | |||||||||
Real estate — construction and land | 846,904 | 791,236 | 745,369 | ||||||||||||
Real estate — business | 2,710,595 | 2,643,374 | 2,395,933 | ||||||||||||
Real estate — personal | 2,013,437 | 2,010,397 | 1,903,969 | ||||||||||||
Consumer | 1,975,521 | 1,990,801 | 1,904,320 | ||||||||||||
Revolving home equity | 396,542 | 413,634 | 423,005 | ||||||||||||
Consumer credit card | 736,766 | 776,465 | 744,364 | ||||||||||||
Overdrafts | 4,733 | 10,464 | 5,829 | ||||||||||||
Total loans | 13,572,509 | 13,412,736 | 12,697,870 | ||||||||||||
Allowance for loan losses | (157,832 | ) | (155,932 | ) | (152,132 | ) | |||||||||
Net loans | 13,414,677 | 13,256,804 | 12,545,738 | ||||||||||||
Loans held for sale | 15,559 | 14,456 | 60,078 | ||||||||||||
Investment securities: | |||||||||||||||
Available for sale | 9,671,975 | 9,649,203 | 9,552,179 | ||||||||||||
Trading | 20,200 | 22,225 | 23,130 | ||||||||||||
Non-marketable | 101,688 | 99,558 | 117,259 | ||||||||||||
Total investment securities | 9,793,863 | 9,770,986 | 9,692,568 | ||||||||||||
Federal funds sold and short-term securities purchased under agreements to resell | 2,205 | 15,470 | 9,075 | ||||||||||||
Long-term securities purchased under agreements to resell | 725,000 | 725,000 | 825,000 | ||||||||||||
Interest earning deposits with banks | 120,234 | 272,275 | 171,651 | ||||||||||||
Cash and due from banks | 416,161 | 494,690 | 375,481 | ||||||||||||
Land, buildings and equipment — net | 335,191 | 337,705 | 350,423 | ||||||||||||
|
138,921 | 138,921 | 138,921 | ||||||||||||
Other intangible assets — net | 6,700 | 6,709 | 6,539 | ||||||||||||
Other assets | 339,660 | 608,408 | 331,478 | ||||||||||||
Total assets | $ | 25,308,171 | $ | 25,641,424 | $ | 24,506,952 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||
Deposits: | |||||||||||||||
Non-interest bearing | $ | 7,237,815 | $ | 7,429,398 | $ | 7,065,066 | |||||||||
Savings, interest checking and money market | 11,439,078 | 11,430,789 | 11,205,357 | ||||||||||||
Time open and C.D.’s of less than |
696,776 | 713,075 | 766,810 | ||||||||||||
Time open and C.D.’s of |
1,718,184 | 1,527,833 | 1,649,076 | ||||||||||||
Total deposits | 21,091,853 | 21,101,095 | 20,686,309 | ||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 1,321,149 | 1,723,905 | 957,388 | ||||||||||||
Other borrowings | 101,975 | 102,049 | 103,806 | ||||||||||||
Other liabilities | 229,629 | 213,243 | 312,167 | ||||||||||||
Total liabilities | 22,744,606 | 23,140,292 | 22,059,670 | ||||||||||||
Stockholders’ equity: | |||||||||||||||
Preferred stock | 144,784 | 144,784 | 144,784 | ||||||||||||
Common stock | 510,015 | 510,015 | 489,862 | ||||||||||||
Capital surplus | 1,544,034 | 1,552,454 | 1,332,429 | ||||||||||||
Retained earnings | 337,046 | 292,849 | 424,677 | ||||||||||||
|
(7,588 | ) | (15,294 | ) | (52,653 | ) | |||||||||
Accumulated other comprehensive income | 30,412 | 10,975 | 102,929 | ||||||||||||
Total stockholders’ equity | 2,558,703 | 2,495,783 | 2,442,028 | ||||||||||||
Non-controlling interest | 4,862 | 5,349 | 5,254 | ||||||||||||
Total equity | 2,563,565 | 2,501,132 | 2,447,282 | ||||||||||||
Total liabilities and equity | $ | 25,308,171 | $ | 25,641,424 | $ | 24,506,952 | |||||||||
AVERAGE BALANCE SHEETS |
|||||||||||||||||||||||||
(Unaudited)
(In thousands) |
For the Three Months Ended | ||||||||||||||||||||||||
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|
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ASSETS: | |||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||
Business | $ | 4,906,672 | $ | 4,731,405 | $ | 4,694,340 | $ | 4,691,476 | $ | 4,491,556 | |||||||||||||||
Real estate — construction and land | 828,017 | 821,048 | 821,422 | 789,329 | 682,557 | ||||||||||||||||||||
Real estate — business | 2,645,531 | 2,559,028 | 2,432,325 | 2,389,170 | 2,382,094 | ||||||||||||||||||||
Real estate — personal | 2,012,456 | 1,985,606 | 1,943,951 | 1,905,968 | 1,909,532 | ||||||||||||||||||||
Consumer | 1,974,894 | 1,978,154 | 1,947,956 | 1,927,925 | 1,934,577 | ||||||||||||||||||||
Revolving home equity | 405,432 | 415,429 | 411,832 | 413,198 | 429,682 | ||||||||||||||||||||
Consumer credit card | 747,783 | 757,618 | 750,412 | 738,130 | 752,098 | ||||||||||||||||||||
Overdrafts | 4,185 | 5,501 | 4,652 | 3,916 | 4,772 | ||||||||||||||||||||
Total loans | 13,524,970 | 13,253,789 | 13,006,890 | 12,859,112 | 12,586,868 | ||||||||||||||||||||
Allowance for loan losses | (155,328 | ) | (154,040 | ) | (153,517 | ) | (151,622 | ) | (151,308 | ) | |||||||||||||||
Net loans | 13,369,642 | 13,099,749 | 12,853,373 | 12,707,490 | 12,435,560 | ||||||||||||||||||||
Loans held for sale | 11,972 | 10,765 | 26,597 | 56,272 | 9,360 | ||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||||
|
913,474 | 811,524 | 726,469 | 698,374 | 703,212 | ||||||||||||||||||||
Government-sponsored enterprise obligations | 450,489 | 445,544 | 481,573 | 666,354 | 776,488 | ||||||||||||||||||||
State and municipal obligations | 1,783,103 | 1,784,407 | 1,747,794 | 1,763,849 | 1,718,587 | ||||||||||||||||||||
Mortgage-backed securities | 3,760,294 | 3,656,695 | 3,366,292 | 3,394,466 | 3,424,716 | ||||||||||||||||||||
Asset-backed securities | 2,359,644 | 2,417,367 | 2,340,783 | 2,377,708 | 2,537,472 | ||||||||||||||||||||
Other marketable securities | 332,643 | 333,236 | 334,747 | 337,572 | 342,382 | ||||||||||||||||||||
Unrealized gain on investment securities | 62,986 | 155,818 | 235,169 | 191,565 | 149,319 | ||||||||||||||||||||
Total available for sale securities | 9,662,633 | 9,604,591 | 9,232,827 | 9,429,888 | 9,652,176 | ||||||||||||||||||||
Trading securities | 25,165 | 21,717 | 18,433 | 20,540 | 18,190 | ||||||||||||||||||||
Non-marketable securities | 100,740 | 105,420 | 113,954 | 116,103 | 127,769 | ||||||||||||||||||||
Total investment securities | 9,788,538 | 9,731,728 | 9,365,214 | 9,566,531 | 9,798,135 | ||||||||||||||||||||
Federal funds sold and short-term securities purchased under agreements to resell | 9,887 | 8,336 | 13,054 | 11,916 | 17,378 | ||||||||||||||||||||
Long-term securities purchased under agreements to resell | 725,001 | 724,998 | 766,302 | 824,999 | 850,275 | ||||||||||||||||||||
Interest earning deposits with banks | 207,845 | 201,367 | 207,944 | 125,024 | 219,636 | ||||||||||||||||||||
Other assets | 1,139,402 | 1,153,982 | 1,151,549 | 1,113,214 | 1,172,916 | ||||||||||||||||||||
Total assets | $ | 25,252,287 | $ | 24,930,925 | $ | 24,384,033 | $ | 24,405,446 | $ | 24,503,260 | |||||||||||||||
LIABILITIES AND EQUITY: | |||||||||||||||||||||||||
Non-interest bearing deposits | $ | 7,246,698 | $ | 7,307,407 | $ | 7,096,218 | $ | 6,885,889 | $ | 6,905,673 | |||||||||||||||
Savings | 795,695 | 773,304 | 778,663 | 787,478 | 761,020 | ||||||||||||||||||||
Interest checking and money market | 10,603,988 | 10,512,268 | 10,210,744 | 10,287,923 | 10,128,543 | ||||||||||||||||||||
Time open & C.D.’s of less than |
705,135 | 722,775 | 740,729 | 758,703 | 775,221 | ||||||||||||||||||||
Time open & C.D.’s of |
1,671,125 | 1,333,764 | 1,435,001 | 1,635,892 | 1,483,700 | ||||||||||||||||||||
Total deposits | 21,022,641 | 20,649,518 | 20,261,355 | 20,355,885 | 20,054,157 | ||||||||||||||||||||
Borrowings: | |||||||||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 1,356,316 | 1,284,916 | 1,163,728 | 1,211,892 | 1,404,754 | ||||||||||||||||||||
Other borrowings | 102,011 | 101,412 | 102,769 | 104,649 | 377,711 | ||||||||||||||||||||
Total borrowings | 1,458,327 | 1,386,328 | 1,266,497 | 1,316,541 | 1,782,465 | ||||||||||||||||||||
Other liabilities | 234,144 | 346,900 | 306,306 | 260,179 | 254,437 | ||||||||||||||||||||
Total liabilities | 22,715,112 | 22,382,746 | 21,834,158 | 21,932,605 | 22,091,059 | ||||||||||||||||||||
Equity | 2,537,175 | 2,548,179 | 2,549,875 | 2,472,841 | 2,412,201 | ||||||||||||||||||||
Total liabilities and equity | $ | 25,252,287 | $ | 24,930,925 | $ | 24,384,033 | $ | 24,405,446 | $ | 24,503,260 | |||||||||||||||
AVERAGE RATES |
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(Unaudited) |
For the Three Months Ended |
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ASSETS: | ||||||||||||||||||||
Loans: | ||||||||||||||||||||
Business (1) | 3.02 | % | 2.91 | % | 2.87 | % | 2.90 | % | 2.87 | % | ||||||||||
Real estate — construction and land | 3.85 | 3.64 | 3.48 | 3.46 | 3.51 | |||||||||||||||
Real estate — business | 3.63 | 3.61 | 3.63 | 3.69 | 3.70 | |||||||||||||||
Real estate — personal | 3.74 | 3.69 | 3.73 | 3.76 | 3.77 | |||||||||||||||
Consumer | 3.89 | 3.85 | 3.91 | 3.80 | 3.87 | |||||||||||||||
Revolving home equity | 3.64 | 3.50 | 3.56 | 3.59 | 3.52 | |||||||||||||||
Consumer credit card | 11.66 | 11.38 | 11.56 | 11.54 | 11.42 | |||||||||||||||
Overdrafts | — | — | — | — | — | |||||||||||||||
Total loans | 3.92 | 3.85 | 3.86 | 3.86 | 3.89 | |||||||||||||||
Loans held for sale | 6.64 | 5.77 | 5.00 | 4.95 | 5.80 | |||||||||||||||
Investment securities: | ||||||||||||||||||||
|
2.09 | 2.18 | 2.43 | 3.48 | .40 | |||||||||||||||
Government-sponsored enterprise obligations | 1.58 | 1.54 | 2.24 | 3.03 | 1.93 | |||||||||||||||
State and municipal obligations (1) | 3.65 | 3.57 | 3.60 | 3.60 | 3.66 | |||||||||||||||
Mortgage-backed securities | 2.38 | 2.40 | 2.38 | 2.36 | 2.45 | |||||||||||||||
Asset-backed securities | 1.63 | 1.52 | 1.48 | 1.45 | 1.39 | |||||||||||||||
Other marketable securities (1) | 2.82 | 2.95 | 2.74 | 2.77 | 2.79 | |||||||||||||||
Total available for sale securities | 2.38 | 2.36 | 2.39 | 2.51 | 2.20 | |||||||||||||||
Trading securities (1) | 2.77 | 2.40 | 2.42 | 2.27 | 2.87 | |||||||||||||||
Non-marketable securities (1) | 21.08 | 5.42 | 10.24 | 8.03 | 6.54 | |||||||||||||||
Total investment securities | 2.58 | 2.39 | 2.49 | 2.58 | 2.26 | |||||||||||||||
Federal funds sold and short-term securities purchased under agreements to resell | .94 | .72 | .61 | .64 | .56 | |||||||||||||||
Long-term securities purchased under agreements to resell | 2.12 | 1.86 | 1.73 | 1.64 | 1.64 | |||||||||||||||
Interest earning deposits with banks | .77 | .56 | .51 | .49 | .49 | |||||||||||||||
Total interest earning assets | 3.30 | 3.17 | 3.22 | 3.25 | 3.10 | |||||||||||||||
LIABILITIES AND EQUITY: | ||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||
Savings | .13 | .12 | .12 | .11 | .12 | |||||||||||||||
Interest checking and money market | .14 | .13 | .13 | .13 | .13 | |||||||||||||||
Time open & C.D.’s of less than |
.37 | .37 | .37 | .38 | .38 | |||||||||||||||
Time open & C.D.’s of |
.67 | .60 | .61 | .58 | .54 | |||||||||||||||
Total interest bearing deposits | .21 | .19 | .20 | .20 | .19 | |||||||||||||||
Borrowings: | ||||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | .46 | .30 | .25 | .24 | .25 | |||||||||||||||
Other borrowings | 3.53 | 3.54 | 3.51 | 3.49 | 1.33 | |||||||||||||||
Total borrowings | .67 | .54 | .51 | .50 | .48 | |||||||||||||||
Total interest bearing liabilities | .26 | % | .22 | % | .22 | % | .22 | % | .23 | % | ||||||||||
Net yield on interest earning assets | 3.14 | % | 3.03 | % | 3.08 | % | 3.11 | % | 2.95 | % |
(1) Stated on a tax equivalent basis using a federal income tax rate of 35%.
|
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CREDIT QUALITY |
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For the Three Months Ended | |||||||||||||||||||||||||
(Unaudited) |
|
|
|
|
|
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ALLOWANCE FOR LOAN LOSSES | |||||||||||||||||||||||||
Balance at beginning of period | $ | 155,932 | $ | 154,532 | $ | 153,832 | $ | 152,132 | $ | 151,532 | |||||||||||||||
Provision for losses | 11,128 | 10,400 | 7,263 | 9,216 | 9,439 | ||||||||||||||||||||
Net charge-offs (recoveries): | |||||||||||||||||||||||||
Commercial portfolio: | |||||||||||||||||||||||||
Business | 97 | 268 | (50 | ) | (65 | ) | 463 | ||||||||||||||||||
Real estate — construction and land | (535 | ) | (882 | ) | (2,312 | ) | (507 | ) | (11 | ) | |||||||||||||||
Real estate — business | (39 | ) | 97 | (106 | ) | (1,030 | ) | (242 | ) | ||||||||||||||||
(477 | ) | (517 | ) | (2,468 | ) | (1,602 | ) | 210 | |||||||||||||||||
Personal banking portfolio: | |||||||||||||||||||||||||
Consumer credit card | 7,148 | 6,506 | 6,356 | 6,650 | 5,918 | ||||||||||||||||||||
Consumer | 2,096 | 2,427 | 2,240 | 1,781 | 2,599 | ||||||||||||||||||||
Overdraft | 435 | 379 | 434 | 307 | 219 | ||||||||||||||||||||
Real estate — personal | 19 | (38 | ) | (78 | ) | 305 | (195 | ) | |||||||||||||||||
Revolving home equity | 7 | 243 | 79 | 75 | 88 | ||||||||||||||||||||
9,705 | 9,517 | 9,031 | 9,118 | 8,629 | |||||||||||||||||||||
Total net loan charge-offs | 9,228 | 9,000 | 6,563 | 7,516 | 8,839 | ||||||||||||||||||||
Balance at end of period | $ | 157,832 | $ | 155,932 | $ | 154,532 | $ | 153,832 | $ | 152,132 | |||||||||||||||
NET CHARGE-OFF RATIOS* | |||||||||||||||||||||||||
Commercial portfolio: | |||||||||||||||||||||||||
Business | .01 | % | .02 | % | — | % | (.01 | )% | .04 | % | |||||||||||||||
Real estate — construction and land | (.26 | ) | (.43 | ) | (1.12 | ) | (.26 | ) | (.01 | ) | |||||||||||||||
Real estate — business | (.01 | ) | .02 | (.02 | ) | (.17 | ) | (.04 | ) | ||||||||||||||||
(.02 | ) | (.03 | ) | (.12 | ) | (.08 | ) | .01 | |||||||||||||||||
Personal banking portfolio: | |||||||||||||||||||||||||
Consumer credit card | 3.88 | 3.42 | 3.37 | 3.62 | 3.16 | ||||||||||||||||||||
Consumer | .43 | .49 | .46 | .37 | .54 | ||||||||||||||||||||
Overdraft | 42.15 | 27.41 | 37.11 | 31.53 | 18.46 | ||||||||||||||||||||
Real estate — personal | — | (.01 | ) | (.02 | ) | .06 | (.04 | ) | |||||||||||||||||
Revolving home equity | .01 | .23 | .08 | .07 | .08 | ||||||||||||||||||||
.77 | .74 | .71 | .74 | .69 | |||||||||||||||||||||
Total | .28 | % | .27 | % | .20 | % | .24 | % | .28 | % | |||||||||||||||
CREDIT QUALITY RATIOS | |||||||||||||||||||||||||
Non-performing assets to total loans | .11 | % | .11 | % | .13 | % | .20 | % | .25 | % | |||||||||||||||
Non-performing assets to total assets | .06 | .06 | .07 | .11 | .13 | ||||||||||||||||||||
Allowance for loan losses to total loans | 1.16 | 1.16 | 1.17 | 1.18 | 1.20 | ||||||||||||||||||||
NON-PERFORMING ASSETS | |||||||||||||||||||||||||
Non-accrual loans: | |||||||||||||||||||||||||
Business | $ | 7,935 | $ | 8,682 | $ | 8,758 | $ | 12,716 | $ | 16,098 | |||||||||||||||
Real estate — construction and land | 585 | 564 | 1,310 | 2,170 | 2,710 | ||||||||||||||||||||
Real estate — business | 1,764 | 1,634 | 1,920 | 5,236 | 6,234 | ||||||||||||||||||||
Real estate — personal | 3,368 | 3,403 | 3,634 | 4,293 | 4,205 | ||||||||||||||||||||
Consumer | 1,151 | — | — | — | — | ||||||||||||||||||||
Revolving home equity | — | — | 23 | 109 | 120 | ||||||||||||||||||||
Total | 14,803 | 14,283 | 15,645 | 24,524 | 29,367 | ||||||||||||||||||||
Foreclosed real estate | 387 | 366 | 950 | 1,609 | 1,997 | ||||||||||||||||||||
Total non-performing assets | $ | 15,190 | $ | 14,649 | $ | 16,595 | $ | 26,133 | $ | 31,364 | |||||||||||||||
Loans past due 90 days and still accruing interest | $ | 14,908 | $ | 16,396 | $ | 16,916 | $ | 15,892 | $ | 15,360 |
*as a percentage of average loans (excluding loans held for sale)
Management Discussion of First Quarter Results
For the quarter ended
Balance Sheet Review
During the 1st quarter of 2017, average total loans increased
During the 1st quarter of 2017, total average available for sale investment securities increased
Total average deposits increased
Net Interest Income
Net interest income (tax equivalent) in the 1st quarter of 2017 amounted to
Compared to the previous quarter, interest on loans (tax equivalent) increased
Interest on investment securities (tax equivalent) increased
Interest expense on deposits increased
Non-Interest Income
In the 1st quarter of 2017, total non-interest income amounted to
Total bank card fees in the current quarter declined
In the current quarter, trust fees increased
Compared to the 1st quarter of 2016, loan fees and sales grew 26.2% to
Investment Securities Gains and Losses
The Company recorded net securities losses of
Non-Interest Expense
Non-interest expense for the current quarter amounted to
Compared to the 1st quarter of last year, salaries and benefits expense increased
The decline in supplies and communication costs compared to the 1st quarter of last year was the result of higher chip card reissue costs last year that have now declined. Marketing costs were down this quarter due to lower overall spending but are expected to increase in future quarters this year. The donation of appreciated securities to a related foundation increased non-interest expense, but resulted in a pre-tax loss of
Income Taxes
The effective tax rate for the Company was 25.8% in the current quarter, 31.1% in the previous quarter, and 31.0% in the 1st quarter of 2016. The lower effective tax rate and related tax expense mainly resulted from a change in the accounting rules for equity-based compensation which was effective
Credit Quality
Net loan charge-offs in the 1st quarter of 2017 amounted to
In the 1st quarter of 2017, annualized net loan charge-offs on average consumer credit card loans were 3.88%, compared with 3.42% in the previous quarter and 3.16% in the same period last year. Consumer loan net charge-offs were .43% of average consumer loans in the current quarter, .49% in the prior quarter and .54% in the same quarter last year. The provision for loan losses in the current quarter totaled
At
Other
During the 1st quarter of 2017, the Company paid a cash dividend of
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.
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Controller
mymoney@commercebank.com
http://www.commercebank.com
Source:
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