Commerce Bancshares' third-quarter profit rises to $1.08 a share as trust fees climb

Commerce Bancshares grew third-quarter profit from a year ago as fee income and loan balances expanded, though earnings slipped from the second quarter. The Kansas City, Missouri-based regional lender said Tuesday it earned $155.0 million, or $1.08 a share, up from $141.5 million, or $1.01, a year earlier.

That compared with $159.8 million, or $1.10 a share, in the second quarter, according to its earnings release filed with an 8-K. Per-share figures are restated for a 5% stock dividend distributed in December 2025.

Total revenue rose to $494.3 million from $441.0 million a year earlier. The bank reported a return on average assets of 1.79%, a return on average equity of 14.17% and an efficiency ratio of 56.69%.

Margin and fees

Net interest income fell $6.2 million from the second quarter to $308.9 million, but was up from $279.5 million a year earlier. The net yield on interest earning assets dropped to 3.71% from 3.77%.

The bank sold its portfolio of Treasury inflation-protected securities in the prior quarter, when TIPS inflation income totaled $9.1 million. Excluding that income, the second-quarter yield was 3.66%, so the underlying margin widened in the third quarter, the company said.

Non-interest income rose 0.9% from the prior quarter to $185.5 million, making up 37.5% of total revenue. Trust fees grew $15.0 million, or 25.7%, from a year ago, and bank card fees rose 8.0%.

"Commerce delivered another solid quarter, with strong profitability, broad-based loan growth, continued momentum across our fee businesses and excellent credit quality," CEO John Kemper said in the release.

FineMark lifts costs and loans

Non-interest expense fell 3.7% from the second quarter to $285.9 million, mainly on lower litigation and professional services expense, but was up from $244.0 million a year earlier. The bank attributed most of a $24.1 million year-over-year rise in salaries and benefits to onboarding FineMark's team members at the start of 2026, and cited a $5.4 million increase in intangible amortization tied to the FineMark acquisition.

FineMark added $2.7 billion of loans on Jan. 1, 2026. Average loans reached $20.7 billion, up $172.3 million from the prior quarter, and Kemper said ending loan balances grew at an annualized rate of more than 7%. Average deposits fell $361.6 million, or 1.3%, to $27.2 billion.

In an earnings presentation filed with the 8-K, the bank said it completed the acquisition of investment banking firm Nolan & Associates on Oct. 1 and moved FineMark's systems conversion to February 2027, with financial expectations and synergy targets unchanged.

Credit and capital

Net loan charge-offs were $10.6 million, or an annualized 0.20% of average loans, compared with 0.19% in the second quarter. Non-accrual loans totaled $11.5 million, or 0.05% of loans. The provision for credit losses was $10.0 million, down from $20.1 million a year earlier.

Commerce bought back about 1.9 million shares at an average price of $58.84 and paid a $0.275 quarterly dividend, 5% higher than a year ago.

By the numbers

• EPS: $1.08, vs. $1.01 a year ago and $1.10 in Q2
• Net income: $155.0 million
• Net interest income: $308.9 million
• Net yield on earning assets: 3.71%
• Non-interest income: $185.5 million
• Net charge-offs: 0.20% of average loans

Sources

1. Commerce Bancshares, Inc., Form 8-K (Item 2.02) with Exhibit 99.1 earnings release and Exhibit 99.2 third quarter 2026 earnings highlights presentation, filed Oct. 20, 2026, accession 0000022356-26-000209

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