Commerce Bancshares Reports $131.6 Million Net Income in Q1 2025, Up 16.8%

Commerce Bancshares, Inc. reported a net income of $131.6 million for the first quarter of 2025, reflecting a 16.8% increase from $112.7 million in the same period last year. This growth translated to a diluted earnings per share of $0.98, up from $0.82 in the first quarter of 2024. The company's total interest income rose to $364.4 million, a 1.8% increase compared to $358.7 million in the prior year, primarily driven by higher interest income from investment securities and securities purchased under agreements to resell. Net interest income after credit losses was $254.6 million, compared to $244.2 million in the previous year, despite a significant increase in the provision for credit losses, which rose to $14.5 million from $4.8 million.

In terms of operational metrics, Commerce Bancshares saw a slight increase in total loans, which amounted to $17.4 billion as of March 31, 2025, compared to $17.2 billion at the end of 2024. The company’s total deposits increased significantly, with a net increase of $775 million in non-interest bearing, savings, interest checking, and money market deposits. The efficiency ratio improved to 55.61%, down from 61.67% in the previous year, indicating better cost management relative to revenue generation.

Strategically, the company has focused on enhancing its non-interest income, which increased by 6.8% to $158.9 million, driven by growth in trust fees, deposit account charges, and capital market fees. Trust fees alone rose by 10.7% to $56.6 million. However, the company experienced net losses on investment securities totaling $7.6 million, primarily due to losses in private equity investments, contrasting with a minor loss of $259,000 in the same quarter last year.

Looking ahead, Commerce Bancshares remains cautiously optimistic about its financial outlook. The company anticipates continued growth in its loan and deposit portfolios, supported by a strong capital position and liquidity. As of March 31, 2025, the company maintained a Tier I common risk-based capital ratio of 16.86%, well above the regulatory minimum, indicating a solid foundation for future growth. The management's focus on maintaining a balanced approach to risk and return, alongside strategic investments in technology and customer service, positions the company favorably in a competitive banking landscape.