third quarter of 2026
Filed Oct 20, 2026COMMERCE BANCSHARES, INC. REPORTS THIRD QUARTER EARNINGS PER SHARE OF $1.08
Third-quarter net income attributable to Commerce Bancshares, Inc. rose to $154,990 from $141,518 in the same quarter last year, supported by higher fee income and loan balances, while earnings declined from $159,790 in the prior quarter as net interest income and securities gains fell.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Three months ended September 30, 2026: net interest incomeGAAP | $308.9M | a $6.2 million decrease | – |
| Nine months ended September 30, 2026: net interest incomeGAAP | $923.8M | – | – |
| Three months ended September 30, 2026: non-interest incomeGAAP | $185.5M | $1.6 million, or .9% | $24.0 million, or 14.8% |
| Nine months ended September 30, 2026: non-interest incomeGAAP | $545.1M | – | – |
| Three months ended September 30, 2026: total revenueGAAP | $494.3M | – | – |
| Nine months ended September 30, 2026: total revenueGAAP | $1.47B | – | – |
| Three months ended September 30, 2026: investment securities gains (losses), netGAAP | $4.10M | – | – |
| Nine months ended September 30, 2026: investment securities gains (losses), netGAAP | $28.57M | – | – |
| Three months ended September 30, 2026: provision for credit lossesGAAP | $10.03M | – | – |
| Nine months ended September 30, 2026: provision for credit lossesGAAP | $29.72M | – | – |
| Three months ended September 30, 2026: non-interest expenseGAAP | $285.9M | a decrease of $11.1 million, or 3.7% | – |
| Nine months ended September 30, 2026: non-interest expenseGAAP | $874.1M | – | – |
| Three months ended September 30, 2026: income before taxesGAAP | $202.5M | – | – |
| Nine months ended September 30, 2026: income before taxesGAAP | $593.7M | – | – |
| Three months ended September 30, 2026: income taxesGAAP | $44.41M | – | – |
| Nine months ended September 30, 2026: income taxesGAAP | $131.1M | – | – |
| Three months ended September 30, 2026: net income attributable to Commerce Bancshares, Inc.GAAP | $155.0M | – | – |
| Nine months ended September 30, 2026: net income attributable to Commerce Bancshares, Inc.GAAP | $456.4M | – | – |
| Three months ended September 30, 2026: net income per common share, basicGAAP | $1.08 | – | – |
| Three months ended September 30, 2026: net income per common share, dilutedGAAP | $1.08 | – | – |
| Nine months ended September 30, 2026: net income per common share, dilutedGAAP | $3.14 | – | – |
| Three months ended September 30, 2026: effective tax rateGAAP | 22.27 % | – | – |
| Three months ended September 30, 2026: fully-taxable equivalent net interest incomeother | $311.3M | decreased $6.2 million | – |
| Three months ended September 30, 2026: net yield on interest earning assetsother | 3.71 % | decreased six basis points | – |
| Three months ended September 30, 2026: return on total average assetsother | 1.79 % | – | – |
| Three months ended September 30, 2026: return on average equityother | 14.17 | – | – |
| Three months ended September 30, 2026: efficiency ratioother | 56.69 | – | – |
| Three months ended September 30, 2026: average loansGAAP | $20.69B | an increase of $172.3 million | an increase of $3.2 billion |
| Three months ended September 30, 2026: total average depositsGAAP | $27.20B | decreased $361.6 million | increased $2.4 billion |
| September 30, 2026: total loansGAAP | $21.21B | – | – |
| September 30, 2026: total depositsGAAP | $27.25B | – | – |
| September 30, 2026: total assetsGAAP | $34.82B | a decrease of $445.8 million | – |
| September 30, 2026: total investment securitiesGAAP | $8.25B | – | – |
| September 30, 2026: allowance for credit losses on loansGAAP | $197.8M | increased $2.5 million | – |
| Three months ended September 30, 2026: total net loan charge-offsGAAP | $10.60M | – | – |
| Three months ended September 30, 2026: total net charge-off ratioother | .20 % | – | – |
| September 30, 2026: non-accrual loans to total loansother | .05 % | – | – |
| September 30, 2026: allowance for credit losses on loans to total loansother | .93 | – | – |
| September 30, 2026: total borrowings, federal funds purchased and securities sold under agreements to repurchaseGAAP | $2.70B | – | – |
| September 30, 2026: total stockholders' equityGAAP | $4.19B | – | – |
| September 30, 2026: tangible common equity to tangible assetsnon-GAAP | 11.06 % | – | – |
| September 30, 2026: Tier I leverage ratioother | 13.04 % | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- The Company paid a cash dividend of $.275 per common share during the 3rd quarter of 2026, representing a 5% increase over the same period last year.
- The Company purchased approximately 1.9 million shares of treasury stock during the current quarter at an average price of $58.84.
- Cash dividends on common stock were $39,246 for the three months ended September 30, 2026, compared to $36,733 for the same quarter last year and $39,861 in the prior quarter.
What drove it
- Trust fees were $73,418, compared to $58,412 in the same period last year and $71,512 in the prior quarter. Trust fees increased $15.0 million, or 25.7%, year over year and $1.9 million, or 2.7%, sequentially, mostly resulting from higher private client fees.
- Bank card transaction fees were $49,182, compared to $45,551 in the same period last year and $48,121 in the prior quarter. Total net bank card fees increased $3.6 million, or 8.0%, year over year and $1.1 million, or 2.2%, sequentially.
- Average consumer and business loan balances grew $180.5 million and $70.2 million, respectively, compared with the previous quarter.
- The acquisition of FineMark added $2.7 billion in loan balances on January 1, 2026.
- Net securities gains of $4.1 million included net gains of $13.4 million on private equity investments, gains of $3.1 million from sales of Visa Class A common stock, and losses of $12.4 million on sales of available for sale debt securities.
- Non-interest expense decreased from the prior quarter mainly due to lower litigation expense and professional and other services expense, partly offset by higher healthcare expense.
Concerns
- Net interest income was $308.9 million, a $6.2 million decrease from the prior quarter, and net yield on interest earning assets decreased six basis points to 3.71%.
- The average rate paid on interest bearing deposits rose to 1.63% from 1.57% in the prior quarter.
- Average deposits decreased $361.6 million from the prior quarter, including a $283.3 million decline in interest checking and money market deposits.
- Net securities gains declined to $4.1 million from $12.8 million in the prior quarter.
- Non-interest expense was $285.9 million compared to $244.0 million in the same period last year, with FineMark-related salaries, benefits and intangible amortization contributing to the increase.
- Consumer loan net charge-offs were .43% of average consumer loans, compared to .26% in the prior quarter.
What to watch
- Whether loan growth continues across consumer and business lending while deposits stabilize following the $361.6 million sequential decline in total average deposits.
- The net yield on interest earning assets after the sale of the TIPS portfolio. Excluding TIPS inflation income, prior-quarter net yield was 3.66% compared with 3.71% in the current quarter.
- Trust, bank card and deposit-account fee momentum, which drove the year-over-year increase in non-interest income.
- Expense growth associated with FineMark, including acquisition-related salaries and benefits expense of $3.3 million and acquisition-related legal and professional services expense of $1.2 million in the current quarter.
- Credit trends in consumer lending and the level of net charge-offs, which were $10.6 million in the current quarter.
Balance sheet and cash flow
- Total assets on September 30, 2026 were $34.8 billion, a decrease of $445.8 million from the prior quarter.
- Total average available for sale debt securities decreased $473.7 million from the previous quarter to $8.2 billion, at fair value.
- During the 3rd quarter of 2026, purchases of available for sale debt securities totaled $263.8 million with a weighted average yield of approximately 4.88%.
- Sales, maturities and pay downs of available for sale debt securities were $432.3 million.
- The unrealized loss on available for sale debt securities increased $228.8 million to $847.4 million, at period end.
- Total average deposits decreased $361.6 million this quarter compared to the previous quarter and increased $2.4 billion over the same quarter last year.
- At September 30, 2026, the liability for unfunded lending commitments was $17.1 million, a decrease of $3.0 million compared to the liability on June 30, 2026.
Analysis
Commerce reported third-quarter net income attributable to Commerce Bancshares, Inc. of $154,990 and diluted earnings per common share of $1.08, compared with $141,518 and $1.01 in the same quarter last year. Nine-month net income attributable to Commerce Bancshares, Inc. was $456,403, compared with $425,589 in the comparable period last year. Profitability remained strong, with return on total average assets of 1.79% and return on average equity of 14.17%, although both were below the prior-quarter ratios of 1.84% and 14.70.
Revenue mix improved through fee businesses. Third-quarter non-interest income was $185,466, up $24.0 million, or 14.8%, from the same quarter last year and up $1.6 million, or .9%, from the prior quarter. Trust fees increased $15.0 million, or 25.7%, year over year, while total net bank card fees increased $3.6 million, or 8.0%. Non-interest income comprised 37.5% of total revenue. Net interest income was $308,877, down $6.2 million sequentially, primarily because of lower interest income on investment securities and deposits with banks and higher deposit interest expense.
Loan balances expanded while deposits and securities balances declined sequentially. Average loans increased $172.3 million from the prior quarter and $3.2 billion from the same quarter last year, with the release attributing much of the year-over-year increase to the FineMark acquisition, which added $2.7 billion in loan balances on January 1, 2026. Total average deposits decreased $361.6 million sequentially, led by a $283.3 million decline in interest checking and money market deposits. The average loans-to-deposits ratio rose to 76.06 % from 74.44 % in the prior quarter.
Margin performance was affected by prior-quarter TIPS inflation income. Net yield on interest earning assets declined to 3.71 % from 3.77 %, but management stated that, excluding TIPS inflation income, the prior-quarter yield was 3.66 %. The Company sold its TIPS portfolio in the prior quarter. The current-quarter average rate paid on interest bearing deposits increased to 1.63% from 1.57%, and the overall rate on interest bearing liabilities increased to 1.73% from 1.68%.
Expense and credit trends warrant attention. Non-interest expense of $285,931 fell from $297,068 in the prior quarter due principally to lower litigation and professional-services expense, but increased from $244,018 a year earlier as FineMark added personnel, intangible amortization and related costs. Total net loan charge-offs were $10,603, and the total net charge-off ratio was .20 %, compared with .19 % in the prior quarter. The allowance for credit losses on loans was $197,840, or .93 of total loans, while non-accrual loans to total loans were .05 %.
Capital allocation remained active. The Company repurchased approximately 1.9 million shares at an average price of $58.84 and paid a cash dividend of $.275 per common share. Total assets were $34.8 billion at September 30, 2026, down $445.8 million from the prior quarter, as average available for sale debt securities declined. The release did not provide financial guidance.
Management, verbatim
Commerce delivered another solid quarter, with strong profitability, broad-based loan growth, continued momentum across our fee businesses and excellent credit quality. Ending loan balances grew at an annualized rate of more than 7% during the quarter, led by continued strength in our commercial and wealth segments.
John Kemper, Chief Executive Officer
Our underlying net interest margin expanded after excluding the TIPS inflation income recognized in the prior quarter. Fee income also increased, led by continued strength in our trust, bank card, and deposit fees.
John Kemper, Chief Executive Officer
Deposit balances performed in line with our expectations during the quarter. Our longstanding customer relationships, diverse deposit base and strong liquidity position continue to provide a solid foundation for growth.
John Kemper, Chief Executive Officer
Not in the filing
stated, not guessed- Forward financial guidance was not provided.
- Previous-period outlook was not provided, so no comparison with prior guidance is available.
- Gross margin was not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Formal reportable segment revenue was not reported.
- Non-GAAP earnings or non-GAAP EPS was not reported.
- A consolidated cash balance was not separately reported.
- A gross debt total was not separately reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.