Commerce Bancshares Inc.’s ( CBSH Quick Quote CBSH - Free Report) fourth-quarter 2021 earnings per share of 94 cents matched the Zacks Consensus Estimate. The bottom line, however, declined 10.5% from the prior-year quarter. Results primarily benefited from an improvement in non-interest income, a slight rise in loan balance and provision benefit. However, an increase in non-interest expenses and fall in net interest income were the major headwinds. Such concerns might have made investors turn bearish on the stock, which tanked 3.6% in yesterday’s trading. Net income attributable to common shareholders was $114.9 million, down 11.5% year over year. In 2021, earnings of $4.31 per share missed the consensus estimate of $4.34 and were up 55.6%. Net income was $530.8 million, up 55.2%. Revenues & Expenses Rise
Total quarterly revenues were $355.4 million, up 3% year over year. The top line beat the Zacks Consensus Estimate of $349.3 million.
In 2021, net revenues increased 4.5% to $1.39 billion. The top line matched the consensus estimate of $1.39 billion. Net interest income was $207.7 million, down 1% from the prior-year quarter. Net yield on interest-earning assets contracted 37 basis points (bps) to 2.43%. Non-interest income was $147.7 million, growing 9.3%. The upswing resulted from an increase in all fee income components, except for loan fees and sales. Non-interest expenses increased 3.7% to $203.6 million. The rise was due to increase in all cost components. Efficiency ratio increased to 57.29% from 56.68% in the year-ago quarter. A rise in efficiency ratio indicates deterioration in profitability. As of Dec 31, 2021, total loans were $15.2 billion, marginally up from the prior quarter. Total deposits as of the same date were $29.8 billion, up 5.9%. Total stockholders’ equity was $3.4 billion, down 1.2% sequentially. Credit Quality Improves
Provision for credit losses was a benefit of $7.1 million, up from $4.4 million in the prior-year quarter. The ratio of annualized net loan charge-offs to total average loans was 0.11%, down from 0.19% recorded in the year-earlier quarter.
Non-accrual loans to total loans were 0.06%, down 10 bps year over year. Allowance for credit losses on loans to total loans was 0.99%, declining 36 bps. Capital & Profitability Ratios Deteriorate
As of Dec 31, 2021, Tier I leverage ratio was 9.13%, down from 9.45% recorded in the year-ago quarter. Tangible common equity to tangible assets ratio declined to 9.01% from the prior-year quarter’s 9.92%.
At the end of the fourth quarter, return on total average assets was 1.28%, down from the year-ago period’s 1.63%. Return on average common equity was 13.11%, down from 15.49% in the prior-year quarter. Share Repurchase Update
During the quarter, Commerce Bancshares repurchased 696,367 shares at an average price of $70.81.
Commerce Bancshares’ revenues are likely to continue benefiting from a rise in deposit balances and efforts to strengthen fee income sources. However, low interest rates and rising expenses keep hurting its financials.
Currently, Commerce Bancshares carries a Zacks Rank #3 (Hold). You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Earnings Release Schedule of Other Banks Zions Bancorporation ( ZION Quick Quote ZION - Free Report) is scheduled to release fourth-quarter and full-year 2021 results on Jan 24. Over the past 30 days, the Zacks Consensus Estimate for Zions Bancorporation’s quarterly earnings has remained unchanged at $1.33. This implies a 19.9% decrease from the prior-year quarter. Prosperity Bancshares ( PB Quick Quote PB - Free Report) is scheduled to release fourth-quarter and full-year 2021 results on Jan 26. Over the past 30 days, the Zacks Consensus Estimate for Prosperity Bancshares’ quarterly earnings has remained unchanged at $1.37. This suggests a 7.4% decrease from the prior-year quarter. East West Bancorp, Inc. ( EWBC Quick Quote EWBC - Free Report) is slated to report fourth-quarter and full-year 2021 results on Jan 27. Over the past 30 days, the Zacks Consensus Estimate for East West Bancorp’s quarterly earnings has remained unchanged at $1.55. This indicates a 34.8% increase from the prior-year quarter.