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Bank analysts tell Wichita audience they are optimistic about new year

  • The Wichita Eagle
  • Published Tuesday, Jan. 14, 2014, at 5:27 p.m.

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Earnings slip in 2013

The parent of Commerce Bank said Tuesday that its earnings for the final quarter and full year of 2013 were down from the same periods in 2012.

Commerce Bancshares said earnings for the fourth quarter were 69 cents a share on net income of $65.9 million, compared with 71 cents a share on net income of $66.8 million in the fourth quarter of 2012.

For 2013, earnings were $2.72 a share on net income of $261 million, compared with $2.76 a share on net income of $269.3 million in 2012.

David Kemper, chairman and CEO of the Kansas City, Mo.-based company, said in a news release that commercial and consumer loan growth was strong through 2013, and Commerce’s loan portfolio grew by $1.1 billion.

He said expenses in the fourth quarter increased by $5 million this quarter over the previous quarter.

The company’s assets at the end of the December totaled $23.1 billion.

Jerry Siebenmark

Anaylsts from Commerce Bancshares’ investment and advisory unit told a Wichita audience Tuesday that they are largely bullish on the economy and the stock market in 2014.

Scott Colbert and Joe Williams III, both senior vice presidents and certified financial analysts for Commerce Trust Co., told about 140 Commerce customers at a luncheon at Abode Venue that the stock market should perform strongly again, and that the nation’s gross domestic product could reach 3 percent this year.

“We largely are working our way – and have worked most of our way – through the headwinds,” said Colbert, chief economist at Commerce Trust.

Colbert said the headwinds, among them job growth housing starts and auto sales, shouldn’t be issues in 2014.

While noting the huge number of job losses during the recession, Colbert noted the economy – and mostly the private sector – had generated on average 171,000 new jobs a month over the past 47 months.

Another positive factor is debt, particularly among households.

“Debt service as a percentage of the economy has never been lower,” he said. “Thirty-five percent of our country has no debt – these are the people we’d like to loan money to.”

While interest rates are rising, he thinks a continued slow increase will not slow the momentum of the economy in 2014.

“We don’t envision a material interest rate rise coming,” Colbert said. “We really see a much firmer financial foundation … for us to move forward as a country.”

Williams, who also is Commerce Trust’s chief investment strategist, said he expects to see a continuing decline in the rate of return on bonds, to an annualized return of about 3 percent. And gold was among the commodities that he expects to continue to decline in terms of return. But just how much lower it will go is “anybody’s guess,” he added.

Stocks, however, should be provide about a 10 percent annualized return.

“We don’t see any pressure from inflation,” Williams said. “That’s very good for the stock market.”

Reach Jerry Siebenmark at 316-268-6576 or jsiebenmark@wichitaeagle.com. Follow him on Twitter: @jsiebenmark.

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