Commerce Bancshares earnings increased from a year earlier in the third quarter of 2026, but declined from the preceding quarter as net interest income weakened. The bank reported earnings of $1.08 per share on October 20, beating analyst expectations by $0.01, while revenue of $494.3 million missed forecasts by $1.93 million.
Key Takeaways
- Net income reached $155.0 million, up from $141.5 million a year earlier but below the second quarter’s $159.8 million.
- Higher fee income only partly offset a $6.2 million sequential decline in net interest income.
- Average loans increased while average deposits fell; the annualized net charge-off ratio edged up to 0.20%.
Table of Contents
- Commerce Bancshares earnings show a mixed quarterly comparison
- Fee growth cushions lower interest income
- Lending expands as deposits decline
- Conclusion
Commerce Bancshares earnings show a mixed quarterly comparison
For the three months ended September 30, diluted earnings per share increased from $1.01 a year earlier but slipped from $1.10 in the second quarter. Revenue rose 12.1% year over year, although it fell from $498.9 million in the preceding quarter.
The company’s third-quarter earnings announcement also showed nine-month net income of $456.4 million, compared with $425.6 million in the corresponding 2025 period. Earnings per share for those nine months rose to $3.14 from $3.03.
The results therefore present two different comparisons: Commerce remained ahead of its year-earlier performance, but the third quarter did not extend the second quarter’s earnings level.
| Item | Details |
|---|---|
| Non-interest expense | $285.9 million, down 3.7% from the second quarter. |
| Return on average assets | 1.79%, compared with 1.84% in the second quarter. |
| Return on average equity | 14.17%, compared with 14.70% in the second quarter. |
| Cash dividends per share | $0.275, unchanged from the second quarter. |
Fee growth cushions lower interest income
Net interest income totaled $308.9 million, down $6.2 million from the second quarter. The net yield on interest-earning assets fell six basis points to 3.71%.
Chief Executive Officer John Kemper said the underlying net interest margin expanded when excluding inflation income from Treasury inflation-protected securities recognized in the prior quarter. That distinction matters because the reported decline does not fully describe the underlying margin comparison.
Non-interest income increased $1.6 million sequentially to $185.5 million, accounting for 37.5% of total revenue. Compared with a year earlier, trust fees grew 25.7% and bank card fees increased 8.0%. Fee growth provided a partial cushion, but was not large enough to offset the quarterly reduction in interest income.
Lending expands as deposits decline
Average loans increased $172.3 million, or 0.8%, from the second quarter to $20.7 billion. Average deposits moved in the opposite direction, declining $361.6 million, or 1.3%, to $27.2 billion.
The annualized ratio of net loan charge-offs to average loans increased slightly to 0.20% from 0.19%. The allowance for credit losses on loans reached $197.8 million, equivalent to 0.93% of total loans at September 30.
Commerce also repurchased approximately 1.9 million common shares during the quarter at an average price of $58.84. Kemper described capital management as balancing shareholder returns with support for balance-sheet growth.
Conclusion
Commerce’s third quarter combined year-over-year earnings growth with a sequential slowdown. The next quarterly results will provide the next comparison for whether fee growth and lending gains can offset pressure on reported interest income and deposits.
Read More News
Disclaimer
This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.
