Commerce Bancshares, Inc. Reports First Nine Months Earnings Per Share Growth of 14%

Business Wire, Oct 13, 2004

KANSAS CITY, Mo. -- Commerce Bancshares, Inc. (NASDAQ:CBSH) announced record earnings of $2.47 per share for the nine months ended September 30, 2004, an increase of 14% compared to $2.17 per share during the same period in 2003. Net income for the first nine months of 2004 amounted to $167.7 million compared with $152.7 million in the same period last year, or an increase of 10%. During this period the return on average equity was 15.5%, the return on assets was 1.58%, and the efficiency ratio was 58.8%.

For the three months ended September 30, 2004, earnings per share totaled $.93, an increase of 18% compared with $.79 in 2003. Net income amounted to $62.5 million compared with $54.9 million for 2003, an increase of 14%.

In making this announcement, David W. Kemper, Chairman and CEO, said, "We are pleased to report double digit earnings per share growth for both the quarter and the first nine months of the year. For the first nine months, net income before taxes increased 11% as a result of growth in non-interest income, lower loan loss provisions and control over expenses. During this period, non-interest income grew by 11%, mainly the result of growth in bankcard income of 14%. Also, non-interest expense has grown by only 1% for the first nine months of this year. Net interest income this year, however, has remained flat when compared to the previous year as average loans have grown only 1% in this period. Net income for the third quarter of 2004 increased 14% over the same quarter last year and included the recognition of tax benefits of $14.0 million, which had been expected. Net income before taxes for the third quarter of 2004 increased 4%."

Mr. Kemper continued, "Asset quality remained solid this quarter with net charge-offs totaling $6.4 million compared with $6.2 million in the previous quarter and $9.7 million in the third quarter of last year. Our allowance for loan losses at September 30, 2004 totaled $133.4 million and was 522% of non-performing loans. Net charge-offs for the first nine months were .41% of average loans and our loan loss reserve remains at 1.63% of total loans."

Total assets at September 30, 2004 were $14.1 billion, total loans were $8.2 billion, and total deposits were $10.3 billion. Total non-performing loans amounted to $25.6 million or .31% of total loans.

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 330 banking locations in Missouri, Illinois, and Kansas. 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 at www.commercebank.com.