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Commerce Bancshares, Inc.

CBSH Financial Services Q1 2025

Document 991

EX-99.1 2 cbsh3312025ex991.htm EX-99.1 Document
Exhibit 99.1
Exhibit 99.1
commercebancshares914a01a05a.jpg
CBSH
                   1000 Walnut Street / Suite 700 / Kansas City, Missouri 64106 / 816.234.2000
FOR IMMEDIATE RELEASE:
Wednesday, April 16, 2025

COMMERCE BANCSHARES, INC. REPORTS
FIRST QUARTER EARNINGS PER SHARE OF $.98

Commerce Bancshares, Inc. announced earnings of $.98 per share for the three months ended March 31, 2025, compared to $.82 per share in the same quarter last year and $1.01 per share in the fourth quarter of 2024. Net income for the first quarter of 2025 amounted to $131.6 million, compared to $112.7 million in the first quarter of 2024 and $136.1 million in the prior quarter.

In making this announcement, John Kemper, Chief Executive Officer, said, “These results are the product of strong execution against the backdrop of a relatively stable economy during the first quarter of 2025.”

Mr. Kemper continued, “Given recent news related to tariffs and trade restrictions, and in light of ongoing adjustment in capital markets, the outlook for the future is increasingly uncertain. Nonetheless, our franchise is well-positioned to weather any economic disruption, execute our long-term strategies, serve our customers and deliver value to our shareholders. Our credit profile remains strong, and capital and liquidity levels remain robust, supporting our ability to meet our customers’ borrowing, depository and service needs while ensuring the safety and soundness of the bank.”

On first quarter earnings, Mr. Kemper said, “Net interest income of $269 million was a record quarter for Commerce and reflects the continued benefits of fixed-rate asset repricing, balance sheet growth, and our strong deposit franchise. Non-interest income was $159 million and made up 37.1% of total revenue, led by trust fees in our wealth management business of $57 million. Our strength in wealth management is exemplified by its continued growth, with trust fees up 10.7% over the same period last year. Credit quality of the loan portfolio remains excellent with non-accrual loans at .13% of total loans."


First Quarter 2025 Financial Highlights:

•Net interest income was $269.1 million, a $2.5 million increase over the prior quarter. The net yield on interest earning assets increased seven basis points to 3.56%.

•Non-interest income totaled $158.9 million, an increase of $10.1 million, or 6.8%, over the same quarter last year.

•Trust fees grew $5.5 million, or 10.7%, compared to the same period last year, mostly due to higher private client fees.

•Non-interest expense totaled $238.4 million, a decrease of $7.3 million, or 3.0%, compared to the same quarter last year.

1
Exhibit 99.1
•Average loan balances totaled $17.2 billion, an increase of 1.0% compared to the prior quarter.

•Total average available for sale debt securities increased $66.1 million over the prior quarter to $9.2 billion, at fair value.

•Total average deposits decreased $83.7 million, or .3%, compared to the prior quarter. The average rate paid on interest bearing deposits declined 15 basis points to 1.72%, compared to the prior quarter.

•The ratio of annualized net loan charge-offs to average loans was .25% in the current and prior quarters.

•The allowance for credit losses on loans increased $4.3 million during the first quarter of 2025 to $167.0 million, and the ratio of the allowance for credit losses on loans to total loans was .96%, at March 31, 2025, compared to .95% at December 31, 2024.

•Total assets at March 31, 2025 were $32.4 billion, an increase of $368.3 million, or 1.2%, over the prior quarter.

•For the quarter, the return on average assets was 1.69%, the return on average equity was 15.82%, and the efficiency ratio was 55.6%.

Commerce Bancshares, Inc. is a regional bank holding company offering a full line of banking services through its subsidiaries, including payment solutions, investment management and securities brokerage. One of its subsidiaries, Commerce Bank, leverages 160 years of proven strength and experience to help individuals and businesses solve financial challenges. In addition to offering payment solutions across the U.S., Commerce Bank currently operates full-service banking facilities across the Midwest including the St. Louis and Kansas City metropolitan areas, Springfield, Central Missouri, Central Illinois, Wichita, Tulsa, Oklahoma City, and Denver. Beyond the Midwest, Commerce also maintains commercial offices in Dallas, Houston, Cincinnati, Nashville, Des Moines, Indianapolis, and Grand Rapids and wealth offices in Dallas, Houston, and Naples. Commerce delivers high-touch service and sophisticated financial solutions at regional branches, commercial and wealth offices, ATMs, online, mobile and through a 24/7 customer service line.

This financial news release and the supplementary Earnings Highlights presentation are available on the Company’s website at https://investor.commercebank.com/news-info/financial-news-releases/default.aspx.
* * * * * * * * * * * * * * *
For additional information, contact
Matt Burkemper, Investor Relations
(314) 746-7485
www.commercebank.com


2
Exhibit 99.1
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
FINANCIAL HIGHLIGHTS

 For the Three Months Ended
(Unaudited)
(Dollars in thousands, except per share data)		Mar. 31, 2025Dec. 31, 2024Mar. 31, 2024
FINANCIAL SUMMARY
Net interest income$269,102 $266,647 $248,999 
Non-interest income158,949 155,436 148,848 
Total revenue428,051 422,083 397,847 
Investment securities gains (losses)(7,591)977 (259)
Provision for credit losses14,487 13,508 4,787 
Non-interest expense238,376 235,718 245,697 
Income before taxes167,597 173,834 147,104 
Income taxes36,964 36,590 31,652 
Non-controlling interest expense (income)(959)1,136 2,789 
Net income attributable to Commerce Bancshares, Inc.$131,592 $136,108 $112,663 
Earnings per common share:  
Net income — basic$0.98 $1.01 $0.82 
Net income — diluted$0.98 $1.01 $0.82 
Effective tax rate21.93 %21.19 %21.93 %
Fully-taxable equivalent net interest income$271,416 $268,935 $251,312 
Average total interest earning assets (1)
$30,901,110 $30,628,722 $30,365,774 
Diluted wtd. average shares outstanding133,071,719 133,686,588 135,645,198 
RATIOS  
Average loans to deposits (2)
69.38 %68.45 %69.87 %
Return on total average assets1.69 1.73 1.48 
Return on average equity(3)
15.82 15.97 15.39 
Non-interest income to total revenue37.13 36.83 37.41 
Efficiency ratio (4)
55.61 55.77 61.67 
Net yield on interest earning assets3.56 3.49 3.33 
EQUITY SUMMARY  
Cash dividends per share$.275 $.257 $.257 
Cash dividends on common stock$36,866 $34,609 $35,140 
Book value per share (5)
$26.19 $24.84 $21.62 
Market value per share (5)
$62.23 $62.31 $50.67 
High market value per share$68.87 $72.75 $52.99 
Low market value per share$58.80 $54.01 $47.09 
Common shares outstanding (5)
133,597,405 134,152,172 136,179,336 
Tangible common equity to tangible assets (6)
10.33 %9.92 %9.24 %
Tier I leverage ratio12.29 %12.26 %11.75 %
OTHER QTD INFORMATION 
Number of bank/ATM locations242 243 254 
Full-time equivalent employees4,662 4,693 4,721 
(1) Excludes allowance for credit losses on loans and unrealized gains/(losses) on available for sale debt securities.
(2) Includes loans held for sale.
(3) Annualized net income attributable to Commerce Bancshares, Inc. divided by average total equity.
(4) The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of total revenue.
(5) As of period end.
(6) The tangible common equity ratio is a non-gaap ratio and is calculated as stockholders’ equity reduced by goodwill and other intangible assets (excluding mortgage servicing rights) divided by total assets reduced by goodwill and other intangible assets (excluding mortgage servicing rights).
All share and per share amounts have been restated to reflect the 5% stock dividend distributed in December 2024.
3
Exhibit 99.1
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

 (Unaudited)
(In thousands, except per share data)		For the Three Months Ended
Mar. 31, 2025Dec. 31, 2024Sep. 30, 2024Jun. 30, 2024Mar. 31, 2024
Interest income$364,365 $369,405 $372,068 $369,363 $358,721 
Interest expense95,263 102,758 109,717 107,114 109,722 
Net interest income269,102 266,647 262,351 262,249 248,999 
Provision for credit losses14,487 13,508 9,140 5,468 4,787 
Net interest income after credit losses254,615 253,139 253,211 256,781 244,212 
NON-INTEREST INCOME   
Trust fees56,592 56,345 54,689 52,291 51,105 
Bank card transaction fees45,593 47,807 47,570 47,477 46,930 
Deposit account charges and other fees26,622 25,480 25,380 25,325 24,151 
Capital market fees5,112 5,129 5,995 4,760 3,892 
Consumer brokerage services4,785 4,636 4,619 4,478 4,408 
Loan fees and sales3,404 2,874 3,444 3,431 3,141 
Other16,841 13,165 17,328 14,482 15,221 
Total non-interest income158,949 155,436 159,025 152,244 148,848 
INVESTMENT SECURITIES GAINS (LOSSES), NET(7,591)977 3,872 3,233 (259)
NON-INTEREST EXPENSE   
Salaries and employee benefits153,078 153,819 153,122 149,120 151,801 
Data processing and software32,238 32,514 32,194 31,529 31,153 
Net occupancy14,020 13,694 13,411 12,544 13,574 
Professional and other services10,026 8,982 8,830 8,617 8,648 
Marketing5,843 5,683 7,278 5,356 4,036 
Equipment5,248 5,232 5,286 5,091 5,010 
Supplies and communication5,046 4,948 4,963 4,636 4,744 
Deposit Insurance3,744 3,181 2,930 2,354 8,017 
Other9,133 7,665 9,586 12,967 18,714 
Total non-interest expense238,376 235,718 237,600 232,214 245,697 
Income before income taxes167,597 173,834 178,508 180,044 147,104 
Less income taxes36,964 36,590 38,245 38,602 31,652 
Net income130,633 137,244 140,263 141,442 115,452 
Less non-controlling interest expense (income)(959)1,136 2,256 1,889 2,789 
Net income attributable to Commerce Bancshares, Inc.$131,592 $136,108 $138,007 $139,553 $112,663 
Net income per common share — basic$0.98 $1.01 $1.02 $1.03 $0.82 
Net income per common share — diluted$0.98 $1.01 $1.01 $1.03 $0.82 
OTHER INFORMATION
Return on total average assets1.69 %1.73 %1.80 %1.86 %1.48 %
Return on average equity (1)
15.82 15.97 16.81 18.52 15.39 
Efficiency ratio (2)
55.61 55.77 56.31 55.95 61.67 
Effective tax rate21.93 21.19 21.70 21.67 21.93 
Net yield on interest earning assets3.56 3.49 3.50 3.55 3.33 
Fully-taxable equivalent net interest income$271,416 $268,935 $264,638 $264,578 $251,312 
(1) Annualized net income attributable to Commerce Bancshares, Inc. divided by average total equity.
(2) The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of total revenue.
4
Exhibit 99.1
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - PERIOD END

(Unaudited)
(In thousands)		Mar. 31, 2025Dec. 31, 2024Mar. 31, 2024
ASSETS   
Loans
     Business $6,239,276 $6,053,820 $5,994,974 
     Real estate — construction and land1,419,572 1,409,901 1,497,647 
     Real estate — business3,628,635 3,661,218 3,711,602 
     Real estate — personal3,047,809 3,058,195 3,039,885 
     Consumer2,116,160 2,073,123 2,119,308 
     Revolving home equity356,675 356,650 322,523 
     Consumer credit card568,163 595,930 564,388 
     Overdrafts3,131 11,266 48,513 
Total loans17,379,421 17,220,103 17,298,840 
Allowance for credit losses on loans(167,031)(162,742)(160,465)
Net loans17,212,390 17,057,361 17,138,375 
Loans held for sale2,890 3,242 2,328 
Investment securities:
Available for sale debt securities9,264,947 9,136,853 9,141,695 
Trading debt securities56,569 38,034 56,716 
Equity securities58,182 57,442 12,852 
Other securities221,370 230,051 229,146 
Total investment securities9,601,068 9,462,380 9,440,409 
Federal funds sold— 3,000 — 
Securities purchased under agreements to resell850,000 625,000 225,000 
Interest earning deposits with banks2,756,521 2,624,553 1,609,614 
Cash and due from banks517,332 748,357 291,040 
Premises and equipment — net476,921 475,275 467,377 
Goodwill146,539 146,539 146,539 
Other intangible assets — net13,441 13,632 13,918 
Other assets787,862 837,288 1,037,508 
Total assets$32,364,964 $31,996,627 $30,372,108 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Deposits:   
Non-interest bearing$7,518,243 $8,150,669 $7,513,464 
Savings, interest checking and money market15,975,283 14,754,571 14,463,211 
Certificates of deposit of less than $100,000985,878 996,721 997,979 
Certificates of deposit of $100,000 and over1,362,393 1,391,683 1,465,541 
Total deposits25,841,797 25,293,644 24,440,195 
Federal funds purchased and securities sold under agreements to repurchase2,400,036 2,926,758 2,505,576 
Other borrowings17,743 56 2,359 
Other liabilities606,986 443,694 460,089 
Total liabilities28,866,562 28,664,152 27,408,219 
Stockholders’ equity:   
Common stock676,054 676,054 655,322 
Capital surplus3,381,960 3,395,645 3,148,649 
Retained earnings140,220 45,494 130,706 
Treasury stock(85,871)(48,401)(59,674)
Accumulated other comprehensive income (loss)(634,576)(758,911)(931,027)
Total stockholders’ equity3,477,787 3,309,881 2,943,976 
Non-controlling interest20,615 22,594 19,913 
Total equity3,498,402 3,332,475 2,963,889 
Total liabilities and equity$32,364,964 $31,996,627 $30,372,108 

5
Exhibit 99.1
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE BALANCE SHEETS

(Unaudited)
(In thousands)		For the Three Months Ended
Mar. 31, 2025Dec. 31, 2024Sep. 30, 2024Jun. 30, 2024Mar. 31, 2024
ASSETS:
Loans:
Business$6,106,185 $5,963,217 $5,966,797 $5,980,364 $5,873,525 
Real estate — construction and land1,415,349 1,411,437 1,400,563 1,471,504 1,472,554 
Real estate — business3,667,833 3,636,026 3,580,772 3,666,057 3,727,643 
Real estate — personal3,045,876 3,047,494 3,047,563 3,044,943 3,031,193 
Consumer2,082,360 2,087,237 2,129,483 2,127,650 2,082,490 
Revolving home equity358,684 350,541 335,817 326,204 322,074 
Consumer credit card560,534 568,138 559,410 552,896 562,892 
Overdrafts5,860 5,628 5,460 4,856 7,696 
Total loans
17,242,681 17,069,718 17,025,865 17,174,474 17,080,067 
Allowance for credit losses on loans(162,186)(160,286)(158,003)(159,791)(161,891)
Net loans17,080,495 16,909,432 16,867,862 17,014,683 16,918,176 
Loans held for sale1,584 2,080 2,448 2,455 2,149 
Investment securities:
U.S. government and federal agency obligations2,586,944 2,459,485 1,888,985 1,201,954 851,656 
Government-sponsored enterprise obligations55,330 55,428 55,583 55,634 55,652 
State and municipal obligations804,363 831,695 856,620 1,069,934 1,330,808 
Mortgage-backed securities4,788,102 4,905,187 5,082,091 5,553,656 5,902,328 
Asset-backed securities1,655,701 1,570,878 1,525,593 1,785,598 2,085,050 
Other debt securities
258,136 221,076 224,528 364,828 503,204 
Unrealized gain (loss) on debt securities(935,054)(896,346)(961,695)(1,272,127)(1,274,125)
Total available for sale debt securities9,213,522 9,147,403 8,671,705 8,759,477 9,454,573 
Trading debt securities
38,298 56,440 47,440 46,565 40,483 
Equity securities57,028 56,758 85,118 127,584 12,768 
Other securities 233,461 222,529 217,377 228,403 221,695 
Total investment securities9,542,309 9,483,130 9,021,640 9,162,029 9,729,519 
Federal funds sold2,089 826 12 1,612 599 
Securities purchased under agreements to resell788,889 566,307 474,997 303,586 340,934 
Interest earning deposits with banks2,388,504 2,610,315 2,565,188 2,099,777 1,938,381 
Other assets1,698,296 1,701,822 1,648,321 1,651,808 1,715,716 
Total assets$31,502,166 $31,273,912 $30,580,468 $30,235,950 $30,645,474 
LIABILITIES AND EQUITY:
Non-interest bearing deposits$7,298,686 $7,464,255 $7,284,834 $7,297,955 $7,328,603 
Savings1,294,174 1,281,291 1,303,675 1,328,989 1,333,983 
Interest checking and money market13,906,827 13,679,666 13,242,398 13,162,118 13,215,270 
Certificates of deposit of less than $100,000991,826 1,061,783 1,055,683 1,003,798 976,804 
Certificates of deposit of $100,000 and over1,363,655 1,451,851 1,464,143 1,492,592 1,595,310 
Total deposits24,855,168 24,938,846 24,350,733 24,285,452 24,449,970 
Borrowings:
Federal funds purchased128,340 121,781 206,644 265,042 328,216 
Securities sold under agreements to repurchase2,723,227 2,445,956 2,351,870 2,254,849 2,511,959 
Other borrowings616 1,067 496 838 76 
Total borrowings2,852,183 2,568,804 2,559,010 2,520,729 2,840,251 
Other liabilities421,370 375,463 405,490 399,080 410,310 
Total liabilities28,128,721 27,883,113 27,315,233 27,205,261 27,700,531 
Equity3,373,445 3,390,799 3,265,235 3,030,689 2,944,943 
Total liabilities and equity$31,502,166 $31,273,912 $30,580,468 $30,235,950 $30,645,474 

6
Exhibit 99.1
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE RATES

(Unaudited)For the Three Months Ended
Mar. 31, 2025Dec. 31, 2024Sep. 30, 2024Jun. 30, 2024Mar. 31, 2024
ASSETS: 
Loans: 
Business(1)
5.75 %5.86 %6.17 %6.11 %6.07 %
Real estate — construction and land7.30 7.75 8.44 8.36 8.40 
Real estate — business5.88 6.01 6.28 6.26 6.26 
Real estate — personal4.28 4.17 4.10 4.04 3.95 
Consumer6.52 6.52 6.64 6.56 6.40 
Revolving home equity7.26 7.28 7.69 7.68 7.70 
Consumer credit card13.49 13.60 14.01 13.96 14.11 
Overdrafts— — — — — 
Total loans6.02 6.11 6.35 6.30 6.27 
Loans held for sale5.89 7.65 6.34 7.54 7.49 
Investment securities: 
U.S. government and federal agency obligations4.09 3.86 3.68 5.04 2.08 
Government-sponsored enterprise obligations2.40 2.36 2.37 2.39 2.39 
State and municipal obligations(1)
2.05 2.01 2.00 2.00 1.97 
Mortgage-backed securities2.08 2.17 1.95 2.09 2.19 
Asset-backed securities3.46 2.99 2.66 2.50 2.39 
Other debt securities2.69 2.11 2.07 2.01 1.93 
Total available for sale debt securities2.83 2.70 2.41 2.50 2.18 
Trading debt securities(1)
4.97 4.26 4.52 4.95 5.30 
Equity securities (1)
8.02 6.58 4.44 2.82 25.64 
Other securities (1)
7.85 5.75 6.09 13.20 13.04 
Total investment securities2.98 2.80 2.52 2.75 2.44 
Federal funds sold5.63 5.78 — 6.74 6.71 
Securities purchased under agreements to resell3.81 3.57 3.53 3.21 1.93 
Interest earning deposits with banks4.46 4.78 5.43 5.48 5.48 
Total interest earning assets4.81 4.83 4.96 4.98 4.78 
LIABILITIES AND EQUITY: 
Interest bearing deposits: 
Savings.05 .05 .07 .06 .06 
Interest checking and money market1.52 1.63 1.74 1.73 1.69 
Certificates of deposit of less than $100,0003.65 3.91 4.17 4.22 4.20 
Certificates of deposit of $100,000 and over3.96 4.24 4.51 4.55 4.56 
Total interest bearing deposits1.72 1.87 2.00 1.99 1.97 
Borrowings: 
Federal funds purchased4.37 4.71 5.38 5.42 5.42 
Securities sold under agreements to repurchase2.86 3.11 3.56 3.44 3.43 
Other borrowings.66 3.36 4.81 3.84 — 
Total borrowings2.93 3.18 3.71 3.65 3.66 
Total interest bearing liabilities1.89 %2.04 %2.22 %2.21 %2.21 %
Net yield on interest earning assets3.56 %3.49 %3.50 %3.55 %3.33 %
(1) Stated on a fully taxable-equivalent basis using a federal income tax rate of 21%.







7
Exhibit 99.1
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CREDIT QUALITY

 For the Three Months Ended
(Unaudited)
(In thousands, except ratios)		Mar. 31, 2025Dec. 31, 2024Sep. 30, 2024Jun. 30, 2024Mar. 31, 2024
ALLOWANCE FOR CREDIT LOSSES ON LOANS
Balance at beginning of period$162,742 $160,839 $158,557 $160,465 $162,395 
     Provision for credit losses on loans15,095 12,557 11,861 7,849 6,947 
     Net charge-offs (recoveries):
        Commercial portfolio:
     Business46 335 114 622 23 
     Real estate — construction and land — — — — — 
     Real estate — business377 50 (7)(8)(141)
423 385 107 614 (118)
        Personal banking portfolio:
     Consumer credit card6,967 6,557 6,273 6,746 6,435 
     Consumer2,852 3,237 2,759 1,804 1,983 
     Overdraft495 470 464 521 557 
     Real estate — personal72 8 128 79 24 
     Revolving home equity(3)(3)(152)(7)(4)
10,383 10,269 9,472 9,143 8,995 
     Total net loan charge-offs 10,806 10,654 9,579 9,757 8,877 
Balance at end of period$167,031 $162,742 $160,839 $158,557 $160,465 
LIABILITY FOR UNFUNDED LENDING COMMITMENTS$18,327 $18,935 $17,984 $20,705 $23,086 
NET CHARGE-OFF RATIOS (1)
Commercial portfolio:
     Business— %.02 %.01 %.04 %— %
     Real estate — construction and land— — — — — 
     Real estate — business.04 .01 — — (.02)
.02 .01 — .02 — 
Personal banking portfolio:
     Consumer credit card5.04 4.59 4.46 4.91 4.60 
     Consumer.56 .62 .52 .34 .38 
     Overdraft34.26 33.22 33.81 43.15 29.11 
     Real estate — personal.01 — .02 .01 — 
     Revolving home equity— — (.18)(.01)— 
.70 .67 .62 .61 .60 
Total.25 %.25 %.22 %.23 %.21 %
CREDIT QUALITY RATIOS
Non-accrual loans to total loans.13 %.11 %.11 %.11 %.03 %
Allowance for credit losses on loans to total loans.96 .95 .94 .92 .93 
NON-ACCRUAL AND PAST DUE LOANS
  Non-accrual loans:
     Business$1,112 $101 $354 $504 $1,038 
     Real estate — construction and land220 220 — — — 
     Real estate — business18,305 14,954 14,944 15,050 1,246 
     Real estate — personal989 1,026 1,144 1,772 1,523 
     Revolving home equity1,977 1,977 1,977 1,977 1,977 
   Total 22,603 18,278 18,419 19,303 5,784 
Loans past due 90 days and still accruing interest$19,417 $24,516 $21,986 $18,566 $20,281 
(1) Net charge-offs are annualized and calculated as a percentage of average loans (excluding loans held for sale).
8
Exhibit 99.1                                        
COMMERCE BANCSHARES, INC.
Management Discussion of First Quarter Results
March 31, 2025
For the quarter ended March 31, 2025, net income amounted to $131.6 million, compared to $136.1 million in the previous quarter and $112.7 million in the same quarter last year. The decrease in net income compared to the previous quarter was primarily the result of investment securities losses and higher non-interest expense, partly offset by higher net interest income and non-interest income. The net yield on interest earning assets increased seven basis points over the previous quarter to 3.56%. Average available for sale debt securities, at fair value, and average loans increased $66.1 million and $173.0 million, respectively, while average deposits decreased $83.7 million compared to the prior quarter. For the quarter, the return on average assets was 1.69%, the return on average equity was 15.82%, and the efficiency ratio was 55.6%.

Balance Sheet Review
During the 1st quarter of 2025, average loans totaled $17.2 billion, an increase of $173.0 million over the prior quarter, and an increase of $162.6 million over the same quarter last year. Compared to the previous quarter, average balances of business loans and business real estate loans grew $143.0 million and $31.8 million, respectively. During the current quarter, the Company sold certain fixed rate personal real estate loans totaling $14.9 million, compared to $21.9 million in the prior quarter.

Total average available for sale debt securities increased $66.1 million over the previous quarter to $9.2 billion, at fair value. The increase in available for sale debt securities was mainly the result of higher average balances of U.S. government and federal agency obligations and other asset-backed securities, partly offset by lower average balances of mortgage-backed securities. During the 1st quarter of 2025, the unrealized loss on available for sale debt securities decreased $157.7 million to $832.9 million, at period end. Also, during the 1st quarter of 2025, purchases of available for sale debt securities totaled $507.7 million with a weighted average yield of approximately 4.74%, and maturities and pay downs of available for sale debt securities were $542.3 million. At March 31, 2025, the duration of the available for sale investment portfolio was 4.1 years, and maturities and pay downs of approximately $1.4 billion are expected to occur during the next 12 months.

Total average deposits decreased $83.7 million this quarter compared to the previous quarter. The decrease in deposits mostly resulted from declines of $165.6 million and $158.2 million in average balances of demand deposits and certificates of deposit, respectively, partly offset by higher interest checking and money market deposit average balances of $227.2 million. Compared to the previous quarter, total average commercial deposits declined $264.7 million, while wealth and consumer average deposits grew $145.7 million and $82.2 million, respectively. The average loans to deposits ratio was 69.4% in the current quarter and 68.5% in the prior quarter. The Company’s average borrowings, which included average customer repurchase
agreements of $2.7 billion, increased $283.4 million to $2.9 billion in the 1st quarter of 2025.

Net Interest Income
Net interest income in the 1st quarter of 2025 amounted to $269.1 million, an increase of $2.5 million over the previous quarter. On a fully taxable-equivalent (FTE) basis, net interest income for the current quarter increased $2.5 million over the previous quarter to $271.4 million. The increase in net interest income was mostly due to higher interest income on investment securities and lower interest expense on deposits, partly offset by lower interest income on loans and deposits with banks. The net yield (FTE) on earning assets increased to 3.56%, from 3.49% in the prior quarter.

Compared to the previous quarter, interest income on loans (FTE) decreased $6.3 million, mostly due to lower average rates earned on commercial banking loans, partly offset by higher average business loan balances. The average yield (FTE) on the loan portfolio decreased nine basis points to 6.02% this quarter.

Interest income on investment securities (FTE) increased $4.1 million over the prior quarter, mostly due to higher average balances and rates earned on U.S. government and federal agency securities and other asset-backed securities, partially offset by lower rates and average balances of mortgage-backed securities. Interest income earned on U.S. government and federal agency securities included the impact of $1.1 million in higher inflation income from Treasury inflation-protected securities compared to previous quarter. Additionally, the Company recorded a $539 thousand adjustment to premium amortization at March 31, 2025, which increased interest income to reflect slower forward prepayment speed estimates on mortgage-backed securities. This increase was lower than the $2.3 million adjustment that increased interest income in the prior quarter. The average yield (FTE) on total investment securities was 2.98% in the current quarter, compared to 2.80% in the previous quarter.

Compared to the previous quarter, interest income on deposits with banks decreased $5.1 million, due to lower average balances and rates. Additionally, interest earned on securities purchased under agreements to resell increased $2.3 million mostly due to higher average balances.

Interest expense decreased $7.5 million compared to the previous quarter, mainly due to lower average rates paid on deposits and borrowings, partly offset by higher average balances of borrowings. Interest expense on borrowings increased $49 thousand due to higher average balances, mostly offset by lower average rates. Interest expense on deposits decreased $7.5 million mostly due to lower average rates. The average rate paid on interest bearing deposits totaled 1.72% in the current quarter compared to 1.87% in the prior quarter. The overall rate paid on interest bearing liabilities was 1.89% in the current quarter and 2.04% in the prior quarter.

9
Exhibit 99.1
COMMERCE BANCSHARES, INC.                                
Management Discussion of First Quarter Results
March 31, 2025
Non-Interest Income
In the 1st quarter of 2025, total non-interest income amounted to $158.9 million, an increase of $10.1 million, or 6.8%, over the same period last year and an increase of $3.5 million over the prior quarter. The increase in non-interest income compared to the same period last year was mainly due to higher trust fees and deposit account fees and gains on sales of assets. The increase in non-interest income compared to the prior quarter was mainly due to higher gains on sales of assets.

Total net bank card fees in the current quarter decreased $1.3 million, or 2.8%, compared to the same period last year, and decreased $2.2 million compared to the prior quarter. Net corporate card fees decreased $1.6 million, or 5.7%, compared to the same quarter of last year mainly due to lower interchange fees, partly offset by lower rewards expense. Net merchant fees increased $520 thousand, or 9.9%, mainly due to higher fees and lower network expense. Net debit card fees decreased $117 thousand, or 1.1%, while net credit card fees decreased $164 thousand, or 4.3%, mostly due to lower interchange fees. Total net bank card fees this quarter were comprised of fees on corporate card ($25.9 million), debit card ($10.3 million), merchant ($5.8 million) and credit card ($3.6 million) transactions.

In the current quarter, trust fees increased $5.5 million, or 10.7%, over the same period last year, mostly resulting from higher private client fees. Compared to the same period last year, deposit account fees increased $2.5 million, or 10.2%, mostly due to higher corporate cash management fees, while capital market fees increased $1.2 million, or 31.3%, mostly due to higher underwriting and trading securities income.

Other non-interest income increased over the same period last year primarily due to higher gains on sales of assets of $2.4 million. For the 1st quarter of 2025, non-interest income comprised 37.1% of the Company’s total revenue.

Investment Securities Gains and Losses
The Company recorded net securities losses of $7.6 million in the current quarter, compared to gains of $977 thousand in the prior quarter and losses of $259 thousand in the 1st quarter of 2024. Net securities losses in the current quarter mostly resulted from net fair value adjustments of $8.5 million and a $1.0 million gain on the sale of an investment in the Company’s portfolio of private equity investments.

Non-Interest Expense
Non-interest expense for the current quarter amounted to $238.4 million, compared to $245.7 million in the same period last year and $235.7 million in the prior quarter. The decrease in non-interest expense compared to the same period last year was mainly due to litigation settlement expense and an FDIC special assessment accrual adjustment, both occurring in 2024 and not recurring in 2025, partly offset by higher marketing expense, salaries expense, professional and other services expense, and data
processing and software expense. The increase in non-interest expense compared to the prior quarter was mainly due to higher employee benefits expense and professional and other services expense, partly offset by lower salaries expense.

Compared to the 1st quarter of 2024, salaries and employee benefits expense increased $1.3 million, or .8%, mostly due to higher full-time salaries expense of $577 thousand and incentive compensation of $811 thousand, partly offset by lower medical expense of $970 thousand. Full-time equivalent employees totaled 4,662 and 4,721 at March 31, 2025 and 2024, respectively.

Compared to the same period last year, deposit insurance expense decreased $4.3 million, mostly due to a $4.0 million accrual adjustment in the prior year of a one-time special assessment by the FDIC to replenish the Deposit Insurance Fund. Data processing and software expense increased $1.1 million due to higher costs for service providers and software. Professional and other services increased $1.4 million and marketing expense increased $1.8 million. Additionally, other non-interest expense decreased mainly due to $10.0 million of litigation settlement costs in 2024 that did not reoccur.

Income Taxes
The effective tax rate for the Company was 21.9% in the current quarter, 21.2% in the prior quarter, and 21.9% in the 1st quarter of 2024.

Credit Quality
Net loan charge-offs in the 1st quarter of 2025 amounted to $10.8 million, compared to $10.7 million in the prior quarter, and $8.9 million in the same period last year. The ratio of annualized net loan charge-offs to total average loans was .25% in the current and previous quarters, and .21% in the same quarter of last year. Compared to the prior quarter, net loan charge-offs on consumer loans decreased $385 thousand, while net loan charge-offs on consumer credit card loans increased $410 thousand.

In the 1st quarter of 2025, annualized net loan charge-offs on average consumer credit card loans were 5.04%, compared to 4.59% in the previous quarter and 4.60% in the same quarter last year. Consumer loan net charge-offs were .56% of average consumer loans in the current quarter, .62% in the prior quarter, and .38% in the same quarter last year.

At March 31, 2025, the allowance for credit losses on loans totaled $167.0 million, or .96% of total loans, and increased $4.3 million compared to the prior quarter. Additionally, the liability for unfunded lending commitments at March 31, 2025 was $18.3 million, a decrease of $608 thousand compared to the liability at December 31, 2024.

At March 31, 2025, total non-accrual loans amounted to $22.6 million, an increase of $4.3 million over the previous quarter. At March 31, 2025, the balance of non-accrual loans, which represented .13% of loans
10
Exhibit 99.1
COMMERCE BANCSHARES, INC.                                
Management Discussion of First Quarter Results
March 31, 2025
outstanding, included business loans of $1.1 million, revolving home equity loans of $2.0 million, personal real estate loans of $989 thousand, construction loans of $220 thousand, and business real estate loans of $18.3 million. Loans more than 90 days past due and still accruing interest totaled $19.4 million at March 31, 2025.

Other
During the 1st quarter of 2025, the Company paid a cash dividend of $.275 per common share, representing a 7.0% increase over the same period last year. The Company purchased 854,806 shares of treasury stock during the current quarter at an average price of $64.56.

Forward Looking Information
This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions, and other statements that are not historical facts. Such statements are based on current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. Additional information about risks and uncertainties is included in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections within the Company's Annual Report on Form 10-K.
11

Document 1

EX-99.2 3 a2025q1earningshighlight.htm EX-99.2 a2025q1earningshighlight
COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 1st Quarter 2025

 

CAUTIONARY STATEMENT A number of statements we will be making in our presentation and in the accompanying slides are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements of the Corporation’s plans, goals, objectives, expectations, projections, estimates and intentions. These forward- looking statements involve significant risks and uncertainties and are subject to change based on various factors (some of which are beyond the Corporation’s control). Factors that could cause the Corporation’s actual results to differ materially from such forward- looking statements made herein or by management of the Corporation are set forth in the Corporation’s 2024 Annual Report on Form 10-K and the Corporation’s Current Reports on Form 8-K. 2

 

COMMERCE BANCSHARES 160 YEARS IN BUSINESS 142 branches and 252 ATMs across 7 states CORE BANKING FOOTPRINT COMMERCIAL | CONSUMER | WEALTH MANAGEMENT St. Louis • Kansas City • Springfield Central Missouri • Central Illinois • Wichita Tulsa • Oklahoma City • Denver COMMERCIAL OFFICES Cincinnati • Nashville • Dallas • Des Moines Indianapolis • Grand Rapids • Houston1 WEALTH MANAGEMENT OFFICES Dallas • Houston1 • Naples1 U.S. PRESENCE Extended Market Area Commercial Payments Services Offered in 48 states across the U.S. $32.4 BILLION TOTAL ASSETS 42ND LARGEST U.S. BANK BASED ON ASSET SIZE2 $8.3 BILLION MARKET CAP 21ST LARGEST U.S. BANK BASED ON MARKET CAP2 $76.5 BILLION TOTAL TRUST ASSETS UNDER ADMINISTRATION 19TH LARGEST AMONG BANK-MANAGED TRUST COMPANIES BASED ON AUM2 16.71% TIER 1 COMMON RISK- BASED CAPITAL RATIO 2ND HIGHEST AMONG TOP 50 U.S. BANKS BASED ON ASSET SIZE2 AS OF DECEMBER 31, 2024 $25.8 BILLION TOTAL DEPOSITS $17.4 BILLION TOTAL LOANS3 $9.8 BILLION COMMERCIAL CARD VOLUME AS OF DECEMBER 31, 2024 15.82% RETURN ON AVERAGE COMMON EQUITY YTD 2ND YTD ROACE FOR THE TOP 50 U.S. BANKS BASED ON ASSET SIZE2 a2 BASELINE CREDIT ASSESSMENT4 TWO RATINGS ABOVE THE U.S. BANKING INDUSTRY MEDIAN RATING OF baa1 3 1Locations outside the core banking footprint that accept deposits Sources: 2S&P Global Market Intelligence – Regulated U.S. depositories which includes commercial banks, bank holding companies, and credit unions, rankings as of 12/31/2024; 3Includes loans held for sale; 4Moody’s Sector Profile: Banks, February 7, 2025, Baseline Credit Assessment (BCA) reflects a bank’s standalone credit strength; Company reports and filings, information as of 3/31/2025 unless otherwise noted.

 

TRACK RECORD OF LONG-TERM OUTPERFORMANCE Revenue Diversification Balanced earnings profile, fee revenue at 37%1 of total revenue, bolstered by growing wealth and national payments businesses Deposit Franchise $24.5 billion in low-cost, diverse deposits2 with peer-leading historical deposit betas Credit Quality Conservative risk profile drives outperformance over peer averages across credit cycles Consistent Earnings and Shareholder Value Over 8% total annualized return to shareholders over the last 20 years, outperforming the annualized KBW Regional Bank Index return of over 3%3 Capital Management Strong capital ratios, 57th consecutive year of common dividend increases4 Continued Long-Term Investments Core banking system implementation, Enterprise Digital, Expansion Markets, Wealth Management, 1As of YTD 3/31/2025; 2Excludes certificates of deposit greater than $100,000, period-end balance as of 3/31/2025; 3As of 3/31/2025; 4Based on 1Q2025 paid dividend 4

 

1Q2025 HIGHLIGHTS • Earnings of $.98 per share, compared to $.82 per share in the same quarter last year • PPNR1 of $190MM, an increase of $38MM over the same quarter last year • ROAA of 1.69% and ROAE of 15.82% • Efficiency ratio of 55.6% • Net Income of $132MM in Q1, an increase of $19MM over the same quarter last year • Record net interest income $269MM, up 8% over the same quarter last year • Net interest margin increased 7 bps over Q4 to 3.56% • Non-interest income increased 7% over the prior year and was 37% of total revenue • Non-interest expense decreased 3% from the same period in the prior year (up 3% excluding one-time expenses in 2024) • Quarterly average deposit balances decreased $84MM, or .3%, compared to Q4 • Total cost of deposits decreased 9 bps from Q4 to 1.22% • Non interest-bearing deposits were 29% of average deposits as of Q1 • Average loans increased 1% over Q4 • QTD average loan to deposit ratio of 69% • Purchased $55MM of common stock in Q1 vs. $46MM in Q4 • TCE/TA increased 41 bps compared to Q4 to 10.33% • Book value per share increased 5% compared to Q4 to $26.19 • $2.4B in average cash balances at Federal Reserve Bank (FRB) at Q1 • Net loan charge-offs of .25%; non-accrual loans of .13% 51See the non-GAAP reconciliation on page 23 Performance Income Statement Deposits Loans Capital / Other

 

BALANCE SHEET HIGHLIGHTS 1Q25 vs. 1Q24 1Q25 vs. 4Q24 Quarterly Average Balances % Change$ Change% Change$ Change1Q25$ in millions 1%$115.62%$178.7$11,189.4Commercial 1%47.00%-5.76,053.3Consumer 1%$162.61%$173.0$17,242.7Total Loans -2%-$187.21%$59.2$9,542.3Investment Securities1 23%$450.1-8%-$221.8$2,388.5 Interest Earning Deposits with Banks 2%$405.20%-$83.7$24,855.2Deposits 21%$4.575%$1.35$26.19Book Value per Share2 Average Loans: Increased 1% compared to the previous quarter. Interest Earning Deposits with Banks: Ample levels of liquidity on balance sheet. Average Deposits: Declined from Q4, mostly reflecting seasonal outflows. 1At fair value 2For the quarters ended March 31, 2025, December 31, 2024, and March 31, 2024 6

 

$17.1 $17.5 $17.6 $7.3 $7.4 $7.3 1Q24 4Q24 1Q25 $24.4 $24.9 $24.9 +2% $11.1 $11.0 $11.2 $6.0 $6.1 $6.0 1Q24 4Q24 1Q25 $17.1 $17.1 $17.2 +1% BALANCE SHEET 7 Loans Consumer Loans Commercial Loans Loan Yield1 Deposits QTD Average Balances $ billions Non-Interest Bearing Interest-Bearing Deposits Interest-Bearing Deposit Cost QTD Average Balances $ billions 6.27% 6.11% 6.02% 1.97% 1.87% 1.72% 1Tax equivalent yield

 

LOAN PORTFOLIO 8 YoYQoQ3/31/202412/31/20243/31/2025$ in 000s 4.1%3.1%$5,994,974 $6,053,820$6,239,276Business -5.2%.7%1,497,6471,409,9011,419,572Construction -2.2%-.9%3,711,6023,661,2183,628,635Business Real Estate .3%-.3%3,039,8853,058,1953,047,809Personal Real Estate -.1%2.1%2,119,3082,073,1232,116,160Consumer 10.6%.0%322,523356,650356,675Revolving Home Equity .7%-4.7%564,388595,930568,163Consumer Credit Card -93.5%-72.2%48,51311,2663,131Overdrafts .5%.9%$17,298,840$17,220,103$17,379,421Total Loans Period-End Balances YoYQoQ3/31/202412/31/20243/31/2025$ in 000s 4.0%2.4%$5,873,525$5,963,217$6,106,185Business -3.9%.3%1,472,5541,411,4371,415,349Construction -1.6%.9%3,727,6433,636,0263,667,833Business Real Estate .5%-.1%3,031,1933,047,4943,045,876Personal Real Estate .0%-.2%2,082,4902,087,2372,082,360Consumer 11.4%2.3%322,074350,541358,684Revolving Home Equity -.4%-1.3%562,892568,138560,534Consumer Credit Card -23.9%4.1%7,6965,6285,860Overdrafts 1.0%1.0%$17,080,067$17,069,718$17,242,681Total Loans QTD Average Balances

 

34.5% 14.5% 14.1% 8.5% 8.2% 7.8% 5.4% 4.2% Owner- occupied Office Industrial Retail Hotels Multi-family Farm Senior living 2.8% Other Real Estate - Business Loans: Office Outstanding Balances by Geography1 % of Total Loans Real Estate - Business Loans 7.2%Owner – Occupied 3.0%Office 2.9%Industrial 1.8%Retail 1.7%Hotels 1.6%Multi-family 1.1%Farm .9%Senior living .7%Other 20.9%Total COMMERCIAL REAL ESTATE BREAKDOWN 9 Real Estate - Business Loans $3.6 billion 1Geography determined by location of collateral. Includes only loans with a balance of $1 million and above, which represents 94% of outstanding balance of the stabilized, non-owner occupied office loans 2Critized is defined as special mention, substandard, and non-accrual loans 3LTV based on current exposure and property value at time of most recent valuation. Includes only loans with a balance of $1 million and above, which represents 94% of outstanding balance of the stabilized, non- owner occupied office loans Real Estate - Business Loans: Office Attributes as of March 31, 2025 51.5% 18.7% 10.6% 5.7% MO KS TX OK 4.5% IL 2.9% OH 0.6% CO 5.5% Other Midwest States • TTM Net Charge-offs on Office loans: .00% • Delinquent Office Loans: .00% • Non-Performing Office Loans: .00% • Criticized2 Office Loans to Total Office Loans: 11.1% • Weighted Average LTV of Office Loans: 63.3%3 • Percent of loans at floating interest rate: 73.0%

 

$155 $186 $267 $236 4Q24 $422 10 INCOME STATEMENT HIGHLIGHTS $149 $152 $249 $246 1Q24 $398 $159 $190 $269 $238 1Q25 $428 Non-Interest Income (+) Net Interest Income (+) Non-Interest Expense (-) Pre-Tax, Pre-Provision Net Revenue (=) 1Q25 Comparison 24.7%vs. 1Q24 1.8%vs. 4Q24 Pre-Tax, Pre-Provision Net Revenue (PPNR) $ in millions Expenses increased 1.1% over Q4 and decreased 3.0% from the prior year. Revenue increased 1.4% over Q4 and 7.6% over the prior year. 1See the non-GAAP reconciliation on page 23

 

1Q25 vs. 1Q24 1Q25 vs. 4Q24 % Change$ Change% Change$ Change1Q25$ in millions 8%$20.11%$2.5$269.1Net Interest Income 7%$10.12%$3.5$158.9Non-Interest Income -3%-$7.31%$2.7$238.4Non-Interest Expense 25%$37.52%$3.3$189.7Pre-Tax, Pre-Provision Net Revenue1 NM-$7.3NM-$8.6-$7.6Investment Securities Losses, Net 203%$9.77%$1.0$14.5Provision for Credit Losses 17%$18.9-3%-$4.5$131.6Net-Income Attributable to Commerce Bancshares, Inc. 1Q25 vs. 1Q241Q24 1Q25 vs. 4Q244Q241Q25For the three months ended 20%$.82-3%$1.01$.98Net Income per Common Share – Diluted 23 bps3.33%7 bps3.49%3.56%Net Yield on Interest Earning Assets INCOME STATEMENT HIGHLIGHTS 1See the non-GAAP reconciliation on page 23 11

 

NON-INTEREST INCOME HIGHLIGHTS 12 1Q25 vs. 1Q24 1Q25 vs. 4Q24 % Change$ Change% Change$ Change1Q25$ in millions 11%$5.50%$.2$56.6Trust Fees -3%-1.3-5%-2.245.6Bank Card Transaction Fees 10%2.54%1.126.6Deposit Account Charges and Other Fees 31%1.20%.05.1Capital Market Fees 9%.43%.24.8Consumer Brokerage Services 8%.318%.53.4Loan Fees and Sales 11%1.628%3.716.8Other 7%$10.12%$3.5$158.9Total Non-Interest Income Trust Fees: Increase over the prior year mainly due to higher private client fees. Bank Card Transaction Fees: Decrease compared to the prior year mainly due to lower corporate card fees. Deposit Account Charges and Other Fees: Increase compared to the prior year mainly due to higher corporate cash management fees. Other: Gains on sales of assets drove the increase over the prior year.

 

NON-INTEREST EXPENSE HIGHLIGHTS 13 1Q25 vs. 1Q24 1Q25 vs. 4Q24 % Change$ Change% Change$ Change1Q25$ in millions 1%$1.30%-$.7$153.1Salaries and Employee Benefits 3%1.1-1%-.332.2Data Processing and Software 3%.42%.314.0Net Occupancy 16%1.412%1.010.0Professional and other services 45%1.83%.25.8Marketing 5%.20%.05.2Equipment 6%.32%.15.0Supplies and Communication -53%-4.318%.63.7Deposit Insurance -51%-9.619%1.59.1Other -3%-$7.31%$2.7$238.4Total Non-Interest Expense Total Non-Interest Expense: Excluding the litigation settlement expense and an FDIC special assessment accrual adjustment in Q1 2024, non-interest expense was up 3% over the prior year. Deposit Insurance: Decrease compared to the prior year mostly due to a $4 million accrual adjustment in the prior year of a one-time special assessment by the FDIC. Other: Decrease from prior year due to a one-time $10 million litigation settlement cost recorded in 2024.

 

14 LIQUIDITY AND CAPITAL

 

2021 2022 2023 2024 $3.0 $2.8 $2.4 $2.4 DEPOSIT BALANCE TRENDS Segment view $ in billions 15 2021 2022 2023 2024 $12.0 $11.9 $10.4 $9.9 2021 2022 2023 2024 $12.8 $13.4 $12.2 $12.3 Commercial Consumer Wealth Average Balance 4Q24 1Q25 $12.5 $12.6 Period EndAverage Balance Average Balance Segment balances do not include brokered deposits. 2021 through 2024 are year to date average balances. 4Q24 1Q25 $10.2 $10.5 Period End 4Q24 1Q25 $2.5 $2.6 Period End $10.3 $10.0 4Q24 1Q25 4Q24 1Q25 $12.3 $12.4 4Q24 1Q25 $2.4 $2.5

 

3.33% 3.49% 3.56% Net Yield Hedging Structures: Four floor contracts (indexed to 1 Month SOFR) to hedge the risk of declining interest rates on floating rate commercial loans. The contracts have a term of 6 years. • 3.5% floor contract with a notional value of $500 million. The contract began 7/2024. • 3.25% floor contract with a notional value of $500 million. The contract began 11/2024. • 3.0% floor contract with a notional value of $500 million. The contract began 4/2025. • 2.75% floor contract with a notional value of $500 million. The contract begins 7/2025. OPPORTUNTIES TO ENHANCE AND PROTECT NET INTEREST INCOME • Purchases of investment securities in Q1 totaled $508MM with a weighted average yield of approximately 4.74%. • Cash flows of approximately $1.4B from maturities and paydowns of investments are expected over the next twelve months. • Net yield on interest earning assets increased 7 bps over Q4 to 3.56%. • Loan yield decreased 9 bps from Q4 to 6.02%. • Total cost of deposits decreased from Q4 to 1.22%. • As of December 31, 2024, 60% of loans were variable rate. 16 1Q 2024 4Q 2024 1Q 2025 Quarterly Net Yield on Interest Earning Assets

 

Over 60% of total loans are variable; 67% of commercial loans have floating rates SUMMARY OF FIXED & FLOATING LOANS 36% 64% Business Total Loans: $6.1B Fixed Variable C om m er ci al 56% 44% Personal RE Total Loans: $3.1B C on su m er 100% 40% 60% Business RE Total Loans: $3.7B 95% 5% Consumer Card Total Loans: $0.6B 69% 31% Consumer Total Loans: $2.1B 17 96% 4% Construction Total Loans: $1.4B As of 12/31/2024 HELOC Total Loans: $0.4B

 

26% 8% 47% 16% 3% Composition of AFS Portfolio Treasury & agency Municipal MBS Asset-backed Other debt HIGH QUALITY, HIGHLY LIQUID AND DIVERSE INVESTMENT PORTFOLIO 1Excludes inflation effect on TIPs; 2Tax equivalent yield Duration (yrs)Avg RateQTD – Mar. 31, 2025 3.43.67%Treasury & agency1 4.62.05%2Municipal 5.52.08%MBS 1.63.46%Asset-backed 2.92.69%Other debt 4.12.83%Total 18 Total available for sale securities Average balance: $9.2 billion, at fair value As of March 31, 2025 • Purchases of investment securities in Q1 totaled $508MM with a weighted average yield of approximately 4.74%. • AFS debt securities portfolio duration of 4.1 years. • AOCI loss decreased from $(759MM) at Q4 to $(635MM) at Q1

 

91%9% Core Deposits - Non-Interest Bearing - Interest Checking - Savings and Money Market Certificates of Deposits Average Loan to Deposit Ratio3 SOUND CAPITAL AND LIQUIDITY POSITION 19 Tier 1 Risk-Based Capital Ratio1 1S&P Global Market Intelligence, Information as of December 31, 2024 2Period-end balances, as of March 31, 2025 3Includes loans held for sale, for the quarter ended March 31, 2025 16.7% 16.4% 15.1% 14.1% 14.1% 14.1% 13.7% 13.0% 12.8% 12.7% 12.6% 12.4% 12.2% 12.2% 12.0% 11.5% 11.3% 11.3% 10.6% 10.6% CBSH PB HOMB CFR UBSI HWC UCB BOKF CADE SSB ABCB SFNC OZK FIBK ONB PNFP FULT UMBF FNB ASB Peer Median: 12.6% Core Deposits $23.5 Billion2 Large, stable deposit base Loan to Deposit Ratio Total Deposits2 69% Average Loan to Deposit Ratio183% Commerce Peer Average

 

$5.8 $18.3 $22.6 $130.7 $145.3 1Q24 4Q24 1Q25 $8.9 $10.7 $10.8$9.2 $15.8 1Q24 4Q24 1Q25 MAINTAINING STRONG CREDIT QUALITY Net Loan Charge-Offs (NCOs) $ in millions NCOs- CBSH NCOs - Peer Average NCO/Average Loans1 - CBSH $160.5 $162.7 $167.0 $315.8 $335.6 1Q24 4Q24 1Q25 Allowance for Credit Losses on Loans (ACL) $ in millions ACL - CBSH ACL - Peer Average ACL / Total Loans - CBSH Non-Accrual Loans (NALs) $ in millions NALs - CBSH NALs - Peer Average 27.7x 8.9x 7.4x 3.3x 3.3x 1Q24 4Q24 1Q25 Allowance for Credit Losses on Loans (ACL) to NALs ACL / NALs - CBSH ACL / NALs - Peer AverageNALs / Total Loans - CBSH NCO/Average Loans1 – Peer Average .03% NALs / Total Loans – Peer Average .11% .13% .54% .56% ACL / Total Loans – Peer Average .93% .95% .96% 1.31% 1.34% .21% .25% .25% .15% .20% Percentages are illustrative and not to scale; Peer Banks include: ABCB, ASB, BOKF, CADE, CFR, FIBK, FNB, FULT, HWC, HOMB, ONB, OZK, PB, PNFP, SFNC, SSB, UBSI, UCB, UMBF 1As a percentage of average loans (excluding loans held for sale) 20

 

ALLOCATION OF ALLOWANCE 21 CECL allowances reflect the economic and market outlook March 31, 2025December 31, 2024 % of Outstanding Loans Allowance for Credit Losses (ACL) % of Outstanding Loans Allowance for Credit Losses (ACL)$ in millions .73%$ 45.7.72%$ 43.8Business .87%31.7 .90%32.8 Bus R/E 2.06%29.32.14%30.2Construction .95%$ 106.7.96%$ 106.8Commercial total .71%14.9 .57%11.8 Consumer 5.26%29.95.15%30.7Consumer CC .44%13.5.38%11.6Personal R/E .52%1.9.48%1.7Revolving H/E 4.09%.1 1.29%.1 Overdrafts .99%$ 60.3.92%$ 55.9Consumer total .96%$ 167.0.95%$ 162.7Allowance for credit losses on loans 0.87% 0.96% 0.94% 0.95% 0.94% 0.93% 0.92% 0.94% 0.95% 0.70% 0.80% 0.90% 1.00% $125 $150 $175 $100 2Q $143.4 0.90% 3Q $150.1 0.92% 4Q $159.3 1Q $158.7 2Q 3Q $162.4 $134.7 4Q $160.5 1Q 1Q $158.6 $138.0 2Q $160.8 0.88% 3Q $162.7 4Q $167.0 1Q 0.96% $162.2 Allowance for Credit Losses (ACL) on Loans ACL - Loans (left) ACL / Total Loans (right) $ in millions 2022 2023 2024 2025

 

Quick Facts: Small Business Investment Company (SBIC) founded in 1959 Nationwide footprint with Greater Midwest Focus 33 Portfolio Companies Representing $966.1 million in Revenue Over 3,000 Employees Fair Value as of March 31, 2025: $175.6 million Investment Criteria • Manufacturing, distribution and certain service companies • Cash flow positive • Good management • Consistent financial performers • Operate in niche markets • Significant and defensible market positions • Differentiated products and services • Scalable business platforms Target Parameters • Revenues - $10 million to $100 million • EBITDA - $2 million to $7 million CAPITAL FOR BUSINESS® A middle-market private equity firm focused on the success of industrial growth companies Transaction Types Management buyouts Leveraged buyouts Succession plans Recapitalizations Corporate divestitures Investment Structures Subordinated debt Preferred stock Common stock Warrants Other Information Co-investors Majority control Target 5-7 year hold period Management participation 22

 

NON-GAAP RECONCILIATIONS 23 For The Three Months Ended Mar. 31, 2024Dec. 31, 2024Mar. 31, 2025(DOLLARS IN THOUSANDS) 248,999$266,647$269,102$Net Interest IncomeA 148,848$155,436$158,949$Non-Interest IncomeB 245,697$235,718$238,376$Non-Interest ExpenseC 152,150$186,365$189,675$Pre-Provision Net Revenue (A+B-C) Pre-tax, Pre-provision Net Revenue

 

Contact Information: Matt Burkemper Senior Vice President, Commerce Bank Corporate Development and Investor Relations 314.746.7485 [email protected] Commerce Bancshares, Inc. Investor Relations website: http://investor.commercebank.com/