merce Bancshares(US:CBSH)2025-11-10 18:43Financial Performance - For the three months ended September 30, 2025, net income attributable to Commerce Bancshares, Inc. was $141.5 million, a 2.5% increase from $138.0 million in the same period last year [171]. - Net income for the first nine months of 2025 was $425.6 million, an increase of $35.4 million, or 9.1% year-over-year [173]. - The diluted earnings per common share for Q3 2025 was $1.06, a 5.0% increase from $1.01 in Q3 2024 [171]. - Diluted earnings per share increased to $3.18, up 11.2% from $2.86 in the same period last year [173]. - The efficiency ratio for Q3 2025 was 55.26%, compared to 56.31% in Q3 2024, indicating improved operational efficiency [171]. - The efficiency ratio was 55.21% for the first nine months of 2025 [173]. Income and Revenue - Net interest income for the third quarter of 2025 was $279.5 million, reflecting a 6.5% increase compared to $262.4 million in the third quarter of 2024 [171]. - Non-interest income rose to $161.5 million, a 1.6% increase from $159.0 million in the prior year [171]. - Non-interest income increased by $26.0 million, or 5.6%, primarily due to higher trust fees, deposit fees, and brokerage fees [173]. - Non-interest income for the first nine months of 2025 was $486.1 million, an increase of $26.0 million, or 5.6%, compared to $460.1 million in the same period of 2024 [191]. Credit Losses and Provisions - The provision for credit losses increased by 119.5% to $(20.1) million in Q3 2025 from $(9.1) million in Q3 2024 [171]. - The provision for credit losses was $40.1 million for the first nine months of 2025, compared to $19.4 million in the same period last year [173]. - The provision for credit losses increased to $40.1 million, up from $19.4 million in the previous year, reflecting higher auto and consumer credit card loan net charge-offs [260][261]. - The allowance for credit losses on loans increased to $175.7 million at the end of Q3 2025, up from $165.3 million at the end of Q2 2025 [199]. Loans and Assets - Total loans increased by $566.7 million or 3.3% from December 31, 2024, driven by growth in business and consumer loans [233]. - Total assets reached $32.3 billion at September 30, 2025, compared to $32.0 billion at December 31, 2024 [232]. - Total loans reached $17,494,351, generating interest income of $265,635, with an average rate of 6.02% in Q3 2025, compared to $17,025,865 and $271,811 at 6.35% in Q3 2024 [271]. - Investment securities totaled $9,963,481, yielding $75,002 in interest income at an average rate of 2.99% in Q3 2025, up from $9,983,335 and $63,256 at 2.52% in Q3 2024 [271]. Expenses - Non-interest expense for Q3 2025 was $244.0 million, a 2.7% increase from $237.6 million in the same quarter last year [171]. - For the first nine months of 2025, non-interest expense totaled $726.8 million, an increase of $11.3 million, or 1.6%, over the same period in 2024 [197]. - Salaries and employee benefits expense increased by $4.3 million, or 2.8%, primarily due to higher full-time salaries and incentive compensation [196]. - Professional and other services expense rose by $2.5 million, or 27.8%, including $1.1 million in acquisition-related legal and professional services [196]. Acquisitions and Investments - The company announced a pending acquisition of FineMark Holdings, valued at approximately $585 million, expected to close on January 1, 2026 [161]. - As of June 30, 2025, FineMark had total assets of $3.9 billion, including $2.6 billion in loans and $3.5 billion in total liabilities [161]. Capital and Liquidity - Capital ratios exceeded the minimum requirements for well-capitalized institutions, with a Tier I common risk-based capital ratio of 17.46% [250]. - The Company maintained a strong liquidity position, believing it will adequately satisfy its financial obligations [258]. - Core customer deposits totaled $23.0 billion, representing 90.5% of total deposits, with an increase of $136.2 million since December 31, 2024 [239]. Tax and Regulatory - The effective tax rate for Q3 2025 was 22.5%, up from 21.8% in Q2 2025, primarily due to higher state and local income taxes [230]. - The Company expects to adopt new accounting standards related to income taxes and expense disaggregation, effective in 2025 and 2027 respectively, with no significant impact anticipated on consolidated financial statements [267][268].