Jul. 17--Shares in Commerce Bancshares rose more than 7 percent Thursday after the company reported a quarterly profit that beat expectations.

The banking company said it earned $37 million in the quarter, or 48 cents a share. Analysts were expecting second-quarter earnings of about 37 cents a share.

In the same period a year ago, Commerce earned $56 million. But the latest earnings reflected improvement from the first quarter of 2009, when Commerce earned $30.8 million.

Commerce shares closed at $35.41, up $2.54.

Commerce chief executive David Kemper said in a prepared statement that "although the overall economy remains difficult, we are pleased to report an increase in net income over the previous quarter."

He attributed the second-quarter results to growth in net interest income, higher fees and expense controls.

For the first half of 2009, Commerce earned $67.8 million, or 88 cents a share, down from $120.1 million, or $1.58 a share, last year.

This decline was mainly due to higher loan loss provisions and an FDIC insurance expense in 2009.

Commerce said net loan charge-offs for the second quarter amounted to $36 million, compared with $34.9 million in the first quarter and $14.5 million in the second quarter of 2008. Commerce attributed the increase to "consumer credit card loan losses and higher losses on construction loans." It said the losses were offset by lower losses on business, consumer, home equity and personal real estate loans.

Commerce also reported:

--Foreclosed real estate amounted to $9 million as of June 30, up from $7.5 million in the year-earlier period.

--Total nonperforming assets were $131.6 million as of June 30, or 1.23 percent of total loans. That was up from $36.7 million, or 0.33 percent of total loans, at the end of June 2008.

--Loans that are at least 90 days past due amounted to $39.9 million as of June 30, up from $26.9 million a year earlier.

| The Star

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