Stock is well down due to shortfall in earnings---Kempers remarks are certainly accurate---however, if you look harder at the #, it seems like:
1--Despite nonaccrual loans more than doubling from one year ago, nonperforming assets climbing by 70%, and loans over 90 days past due increasing by 28%, Commerce has elected to allow their allowance for loan losses as a percentage of loans to decline from 1.46% of loans to 1.33% of loans(a 10 % decline). If they had maintained this old percentage of 1.46%, earnings over the past 4 quarters would be lower by an additional $16,124,000 pretax. Of this amount, $3,242,000 would have lowered the current quarter's pretax earnings further.
2--Goodwill and intangible assets have increased from $49MM to over $115mm in the past year(135%).
3--Despite net interest income and non interest income(total revenues) increasing by a very small 2.4% from the prior year, management continues to spend freely , with salaries and benfits increasing over the same time frame by 7.2% , or 3 times as fast.
Oh well! As long as the Kempers are in charge, guess it doesn't matter how they perform. However, I did think it was worthwhile for everyone to see some of what was not pointed out in the report. Guess some of the market has seen this, based on today's decline.