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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
Form 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 18, 2022

Commerce Bancshares, Inc.
(Exact name of registrant as specified in its charter)
Missouri   001-36502   43-0889454
(State of Incorporation)   (Commission File Number)   (IRS Employer Identification No.)
1000 Walnut,    
Kansas City, MO   64106
(Address of principal executive offices)   (Zip Code)

(816) 234-2000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
     ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of class Trading symbol(s) Name of exchange on which registered
$5 Par Value Common Stock CBSH NASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02 Results of Operations and Financial Condition
A copy of the press release issued October 18, 2022 by Commerce Bancshares, Inc. announcing Third Quarter 2022 earnings is furnished under Item 2.02 of this Current Report on Form 8-K as Exhibit 99.1. Additionally, a slide presentation for investors and analysts is being furnished as Exhibit 99.2 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K, including the exhibits, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, the information in this Current Report on Form 8-K, including the exhibits, shall not be deemed to be incorporated by reference into the filings of Commerce Bancshares, Inc. under the Securities Act of 1933, as amended.
All information included in this Current Report on Form 8-K is available on the Company’s website at https://investor.commercebank.com/news-info/financial-news-releases/default.aspx.

Item 9.01 Financial Statements and Exhibits

Exhibits
99.1    Press release dated October 18, 2022
99.2    Slide presentation for investors and analysts dated October 18, 2022
104    The XBRL tags on the cover page of this Form 8-K are embedded within the Inline XBRL document.


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
  COMMERCE BANCSHARES, INC.
  By:   /s/ Paul A. Steiner  
    Paul A. Steiner
   
Controller
(Chief Accounting Officer) 
Date: October 18, 2022


EX-99.1 2 cbsh9302022ex991.htm EX-99.1 Document
Exhibit 99.1
Exhibit 99.1
commercebancshares914a01a05.jpg
 CBSH
                   1000 Walnut Street / Suite 700 / Kansas City, Missouri 64106 / 816.234.2000
FOR IMMEDIATE RELEASE:
Tuesday, October 18, 2022

COMMERCE BANCSHARES, INC. REPORTS
THIRD QUARTER EARNINGS PER SHARE OF $1.02

Commerce Bancshares, Inc. announced earnings of $1.02 per share for the three months ended September 30, 2022, compared to $.99 per share in the same quarter last year and $.96 per share in the second quarter of 2022. Net income for the third quarter of 2022 amounted to $122.8 million, compared to $122.6 million in the third quarter of 2021 and $115.8 million in the prior quarter.

For the nine months ended September 30, 2022, earnings per share totaled $2.95, compared to $3.37 for the first nine months of 2021. Net income amounted to $356.8 million for the nine months ended September 30, 2022, compared to $415.9 million in the comparable period last year. For the current year to date, the return on average assets was 1.39%, and the return on average equity was 16.08%.

“Our third quarter results reflect the strengths of our balance sheet and diverse operating model,” said John Kemper. “Our variable rate earning assets and resilient core deposit base contributed to an expanding net interest margin and drove record quarterly net interest income. Additionally, our fee-based businesses contributed nearly 36% of total revenue.”

“In an increasingly uncertain economic environment, the bank remains well-positioned. Credit quality metrics and regulatory capital levels remain robust, and we are in a strong liquidity position to accommodate future loan growth.”

Third Quarter 2022 Financial Highlights:

•Net interest income was $246.4 million, a $14.0 million increase over the prior quarter. The net interest margin increased 22 basis points to 3.01%.

•Non-interest income totaled $138.5 million, a decrease of $913 thousand compared to the prior quarter.

•Non-interest expense totaled $212.9 million, a decrease of $621 thousand compared to the prior quarter.

•Average loan balances totaled $15.6 billion, an increase of $160.4 million, or 1.0%, over the prior quarter.

•Total average available for sale debt securities decreased 5.8%, or $826.7 million, from the prior quarter to $13.5 billion, at fair value. Purchases of securities during the quarter totaled $53.8 million, with a weighted average yield of approximately 4.52%.

1
Exhibit 99.1
•Average deposits declined $973.9 million, or 3.4% from the prior quarter. The average rate paid on interest bearing deposits was .21%.

•The ratio of annualized net loan charge-offs to average loans was .12% compared to .10% in the prior quarter.

•Non-accrual loans totaled $7.2 million compared to $7.9 million in the prior quarter. Non-accrual loans were .05% of total loans.

•The allowance for credit losses on loans increased $5.3 million during the third quarter to $143.4 million, and at September 30, 2022, the ratio of the allowance for credit losses on loans to total loans was .90% compared to .88% at June 30, 2022.

•The Company purchased 710,879 shares of its common stock this quarter at an average price of $70.50.

•Total assets at September 30, 2022 were $32.6 billion, a decrease of $832.8 million, or 2.5%, from the prior quarter.

•For the quarter, the return on average assets was 1.48%, the return on average equity was 17.84%, and the efficiency ratio was 55.2%.

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 more than 155 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. It also maintains commercial offices in Dallas, Houston, Cincinnati, Nashville, Des Moines, Indianapolis, and Grand Rapids. Commerce delivers high-touch service and sophisticated financial solutions at regional branches, commercial 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
matthew.burkemper@commercebank.com


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

  For the Three Months Ended For the Nine Months Ended
(Unaudited)
(Dollars in thousands, except per share data)		 Sep. 30, 2022 Jun. 30, 2022 Sep. 30, 2021 Sep. 30, 2022 Sep. 30, 2021
FINANCIAL SUMMARY
Net interest income $246,373  $232,385  $214,037  $687,544  $627,767 
Non-interest income 138,514  139,427  137,506  409,710  412,694 
Total revenue 384,887  371,812  351,543  1,097,254  1,040,461 
Investment securities gains 3,410  1,029  13,108  11,602  39,765 
Provision for credit losses 15,290  7,162  (7,385) 12,594  (59,272)
Non-interest expense 212,884  213,505  211,620  632,037  602,319 
Income before taxes 160,123  152,174  160,416  464,225  537,179 
Income taxes 33,936  32,021  34,662  97,859  111,947 
Non-controlling interest expense 3,364  4,359  3,193  9,595  9,373 
Net income attributable to Commerce Bancshares, Inc. $122,823  $115,794  $122,561  $356,771  $415,859 
Earnings per common share:    
Net income — basic $1.03  $0.96  $1.00  $2.96  $3.38 
Net income — diluted $1.02  $0.96  $0.99  $2.95  $3.37 
Effective tax rate 21.65  % 21.66  % 22.05  % 21.52  % 21.21  %
Fully-taxable equivalent net interest income $248,737  $235,010  $216,858  $695,140  $636,692 
Average total interest earning assets (1)
 $32,807,393  $33,839,655  $33,306,752  $ 33,853,577  $ 32,388,139 
Diluted wtd. average shares outstanding 119,158,652  119,920,218  121,881,091  119,892,983  122,183,464 
RATIOS    
Average loans to deposits (2)
 56.40  % 53.93  % 54.44  % 54.05  % 57.91  %
Return on total average assets 1.48  1.36  1.40  1.39  1.65 
Return on average equity (3)
 17.84  16.29  13.74  16.08  16.14 
Non-interest income to total revenue 35.99  37.50  39.11  37.34  39.66 
Efficiency ratio (4)
 55.19  57.29  59.95  57.48  57.76 
Net yield on interest earning assets 3.01  2.79  2.58  2.75  2.63 
EQUITY SUMMARY    
Cash dividends per share $.265  $.265  $.250  $.795  $.750 
Cash dividends on common stock $31,740  $31,935  $30,645  $95,818  $92,204 
Book value per share (5)
 $19.86  $22.29  $28.58 
Market value per share (5)
 $66.16  $65.65  $66.36 
High market value per share $73.97  $74.32  $72.08 
Low market value per share $64.20  $62.80  $61.81 
Common shares outstanding (5)
 119,361,141  120,032,698  122,148,786 
Tangible common equity to tangible assets (6)
 6.80  % 7.56  % 9.71  %
Tier I leverage ratio 9.87  % 9.45  % 9.31  %
OTHER QTD INFORMATION  
Number of bank/ATM locations 277  279  292 
Full-time equivalent employees 4,595  4,579  4,582 
(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 revenue.
(5)As of period end.
(6)The tangible common equity ratio 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 2021.
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 For the Nine Months Ended
Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021 Sep. 30, 2022 Sep. 30, 2021
Interest income $262,666  $238,154  $211,782  $210,479  $216,981  $712,602  $637,811 
Interest expense 16,293  5,769  2,996  2,822  2,944  25,058  10,044 
Net interest income 246,373  232,385  208,786  207,657  214,037  687,544  627,767 
Provision for credit losses 15,290  7,162  (9,858) (7,054) (7,385) 12,594  (59,272)
Net interest income after credit losses 231,083  225,223  218,644  214,711  221,422  674,950  687,039 
NON-INTEREST INCOME      
Trust fees 45,406  46,792  47,811  48,893  48,950  140,009  139,334 
Bank card transaction fees 45,638  43,873  42,045  44,773  42,815  131,556  123,118 
Deposit account charges and other fees 24,521  25,564  22,307  25,493  25,161  72,392  71,724 
Consumer brokerage services 5,085  5,068  4,446  4,878  4,900  14,599  13,484 
Capital market fees 3,393  3,327  4,125  3,841  3,794  10,845  12,102 
Loan fees and sales 3,094  3,246  4,235  5,248  6,842  10,575  24,472 
Other 11,377  11,557  6,800  14,573  5,044  29,734  28,460 
Total non-interest income 138,514  139,427  131,769  147,699  137,506  409,710  412,694 
INVESTMENT SECURITIES GAINS (LOSSES), NET 3,410  1,029  7,163  (9,706) 13,108  11,602  39,765 
NON-INTEREST EXPENSE      
Salaries and employee benefits 137,393  142,243  135,953  132,640  132,824  415,589  392,608 
Data processing and software 28,050  27,635  27,016  25,777  25,598  82,701  76,015 
Net occupancy 12,544  12,503  12,296  12,308  12,329  37,343  35,877 
Equipment 5,036  4,734  4,568  4,691  4,440  14,338  13,398 
Supplies and communication 4,581  4,361  4,713  4,430  4,530  13,655  12,688 
Marketing 6,228  5,836  6,344  5,395  5,623  18,408  16,461 
Other 19,052  16,193  14,758  18,341  26,276  50,003  55,272 
Total non-interest expense 212,884  213,505  205,648  203,582  211,620  632,037  602,319 
Income before income taxes 160,123  152,174  151,928  149,122  160,416  464,225  537,179 
Less income taxes 33,936  32,021  31,902  33,764  34,662  97,859  111,947 
Net income 126,187  120,153  120,026  115,358  125,754  366,366  425,232 
Less non-controlling interest expense 3,364  4,359  1,872  452  3,193  9,595  9,373 
Net income attributable to Commerce Bancshares, Inc. $122,823  $115,794  $118,154  $114,906  $122,561  $356,771  $415,859 
Net income per common share — basic $1.03  $0.96  $0.97  $0.94  $1.00  $2.96  $3.38 
Net income per common share — diluted $1.02  $0.96  $0.97  $0.94  $0.99  $2.95  $3.37 
OTHER INFORMATION
Return on total average assets 1.48  % 1.36  % 1.33  % 1.28  % 1.40  % 1.39  % 1.65  %
Return on average equity (1)
 17.84  16.29  14.41  13.11  13.74  16.08  16.14 
Efficiency ratio (2)
 55.19  57.29  60.29  57.29  59.95  57.48  57.76 
Effective tax rate 21.65  21.66  21.26  22.71  22.05  21.52  21.21 
Net yield on interest earning assets 3.01  2.79  2.45  2.43  2.58  2.75  2.63 
Fully-taxable equivalent net interest income $248,737  $235,010  $211,393  $210,424  $216,858  $695,140  $636,692 
(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 revenue.

4
Exhibit 99.1
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - PERIOD END

(Unaudited)
(In thousands)		 Sep. 30, 2022 Jun. 30, 2022 Sep. 30, 2021
ASSETS      
Loans
     Business $ 5,528,895  $ 5,441,592  $ 5,277,850 
     Real estate — construction and land 1,206,955  1,266,260  1,257,836 
     Real estate — business 3,331,627  3,215,578  2,937,852 
     Real estate — personal 2,862,519  2,836,835  2,769,292 
     Consumer 2,116,371  2,089,592  2,049,559 
     Revolving home equity 286,026  271,854  281,442 
     Consumer credit card 563,349  558,102  569,976 
     Overdrafts 3,216  6,814  4,583 
Total loans 15,898,958  15,686,627  15,148,390 
Allowance for credit losses on loans (143,377) (138,039) (162,775)
Net loans 15,755,581  15,548,588  14,985,615 
Loans held for sale 8,062  6,467  16,043 
Investment securities:
Available for sale debt securities 12,632,510  13,700,308  14,165,656 
Trading debt securities 39,222  34,195  40,114 
Equity securities 8,954  8,546  9,174 
Other securities 222,742  207,989  184,450 
Total investment securities 12,903,428  13,951,038  14,399,394 
Federal funds sold 14,020  26,000  — 
Securities purchased under agreements to resell 1,275,000  1,450,000  1,750,000 
Interest earning deposits with banks 642,943  684,994  1,888,545 
Cash and due from banks 344,178  355,524  344,460 
Premises and equipment — net 407,833  397,877  377,476 
Goodwill 138,921  138,921  138,921 
Other intangible assets — net 15,599  15,853  14,458 
Other assets 1,097,031  860,108  582,631 
Total assets $ 32,602,596  $ 33,435,370  $ 34,497,543 
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Deposits:      
Non-interest bearing $ 10,468,591  $ 11,102,585  $ 11,622,855 
Savings, interest checking and money market 16,014,487  16,063,064  14,907,654 
Certificates of deposit of less than $100,000 391,145  404,096  452,432 
Certificates of deposit of $100,000 and over 597,093  601,488  1,163,343 
Total deposits 27,471,316  28,171,233  28,146,284 
Federal funds purchased and securities sold under agreements to repurchase 2,314,590  2,234,296  2,253,753 
Other borrowings 1,831  6,025  4,006 
Other liabilities 443,752  348,503  602,279 
Total liabilities 30,231,489  30,760,057  31,006,322 
Stockholders’ equity:      
Common stock 610,804  610,804  589,352 
Capital surplus 2,683,631  2,682,161  2,427,544 
Retained earnings 353,446  262,363  396,655 
Treasury stock (176,943) (129,588) (92,047)
Accumulated other comprehensive income (1,119,344) (766,894) 159,166 
Total stockholders’ equity 2,351,594  2,658,846  3,480,670 
Non-controlling interest 19,513  16,467  10,551 
Total equity 2,371,107  2,675,313  3,491,221 
Total liabilities and equity $ 32,602,596  $ 33,435,370  $ 34,497,543 

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

(Unaudited)
(In thousands)		 For the Three Months Ended
Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021
ASSETS:
Loans:
Business $ 5,317,696  $ 5,385,181  $ 5,324,172  $ 5,191,844  $ 5,437,498 
Real estate — construction and land 1,288,721  1,225,267  1,134,902  1,228,237  1,168,566 
Real estate — business 3,258,128  3,163,508  3,095,068  3,003,459  2,982,847 
Real estate — personal 2,844,376  2,825,578  2,808,980  2,785,095  2,775,638 
Consumer 2,101,622  2,070,560  2,040,200  2,043,690  2,041,263 
Revolving home equity 280,923  272,280  273,859  276,464  281,689 
Consumer credit card 550,058  537,681  540,844  559,429  566,406 
Overdrafts 4,438  5,524  5,178  4,926  5,110 
Total loans
15,645,962  15,485,579  15,223,203  15,093,144  15,259,017 
Allowance for credit losses on loans (137,833) (134,670) (149,685) (162,428) (172,112)
Net loans 15,508,129  15,350,909  15,073,518  14,930,716  15,086,905 
Loans held for sale 7,170  7,933  9,383  11,203  16,021 
Investment securities:
U.S. government and federal agency obligations 1,113,442  1,119,305  1,103,749  1,009,025  727,566 
Government-sponsored enterprise obligations 55,753  55,762  51,770  50,777  50,785 
State and municipal obligations 2,052,908  2,126,380  2,077,600  2,095,517  2,039,942 
Mortgage-backed securities 6,847,912  7,158,252  7,316,609  7,141,249  7,115,419 
Asset-backed securities 3,870,953  4,038,113  3,933,061  3,514,541  3,028,076 
Other debt securities
587,026  643,463  636,247  629,643  608,642 
Unrealized gain (loss) on debt securities (1,064,534) (851,110) (174,297) 86,020  230,058 
Total available for sale debt securities 13,463,460  14,290,165  14,944,739  14,526,772  13,800,488 
Trading debt securities
35,621  43,904  40,686  46,513  32,238 
Equity securities 8,838  9,094  9,498  9,171  8,756 
Other securities 208,708  195,090  192,311  190,346  183,397 
Total investment securities 13,716,627  14,538,253  15,187,234  14,772,802  14,024,879 
Federal funds sold 13,486  4,269  1,053  564  792 
Securities purchased under agreements to resell 1,379,341  1,703,569  1,733,887  1,669,835  1,633,205 
Interest earning deposits with banks 980,273  1,248,942  2,608,029  2,856,992  2,602,896 
Other assets 1,256,498  1,238,493  1,304,400  1,288,323  1,261,277 
Total assets $ 32,861,524  $ 34,092,368  $ 35,917,504  $ 35,530,435  $ 34,625,975 
LIABILITIES AND EQUITY:
Non-interest bearing deposits $ 10,758,353  $ 11,209,680  $ 11,544,701  $ 11,919,268  $ 11,475,113 
Savings 1,595,857  1,609,694  1,563,093  1,507,199  1,484,923 
Interest checking and money market 14,423,713  14,847,306  14,949,727  13,873,985  13,343,180 
Certificates of deposit of less than $100,000 397,071  411,655  429,852  441,920  464,367 
Certificates of deposit of $100,000 and over 578,158  648,728  862,232  1,105,480  1,289,665 
Total deposits 27,753,152  28,727,063  29,349,605  28,847,852  28,057,248 
Borrowings:
Federal funds purchased 51,929  113,128  23,356  20,848  13,606 
Securities sold under agreements to repurchase 2,199,866  2,258,184  2,712,468  2,620,348  2,347,270 
Other borrowings 2,010  2,029  768  1,078  347 
Total borrowings 2,253,805  2,373,341  2,736,592  2,642,274  2,361,223 
Other liabilities 123,691  139,986  505,644  562,102  667,786 
Total liabilities 30,130,648  31,240,390  32,591,841  32,052,228  31,086,257 
Equity 2,730,876  2,851,978  3,325,663  3,478,207  3,539,718 
Total liabilities and equity $ 32,861,524  $ 34,092,368  $ 35,917,504  $ 35,530,435  $ 34,625,975 

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

(Unaudited) For the Three Months Ended
Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021
ASSETS:  
Loans:  
Business (1)
 3.94  % 3.16  % 2.93  % 3.16  % 3.43  %
Real estate — construction and land 5.27  4.09  3.76  3.61  3.51 
Real estate — business 4.40  3.70  3.38  3.41  3.46 
Real estate — personal 3.36  3.27  3.28  3.21  3.27 
Consumer 4.17  3.62  3.59  3.65  3.71 
Revolving home equity 4.82  3.69  3.48  3.47  3.46 
Consumer credit card 12.05  11.32  11.35  11.06  11.29 
Overdrafts —  —  —  —  — 
Total loans 4.37  3.72  3.54  3.62  3.74 
Loans held for sale 8.80  8.14  6.48  5.10  4.63 
Investment securities:  
U.S. government and federal agency obligations 4.51  4.93  3.42  3.11  5.74 
Government-sponsored enterprise obligations 2.36  2.39  2.33  2.30  2.30 
State and municipal obligations (1)
 2.27  2.30  2.29  2.26  2.35 
Mortgage-backed securities 1.93  1.99  1.98  1.40  1.53 
Asset-backed securities 1.62  1.35  1.13  1.03  1.08 
Other debt securities 1.93  1.97  2.00  2.07  2.04 
Total available for sale debt securities 2.09  2.08  1.91  1.59  1.80 
Trading debt securities (1)
 2.74  2.46  1.84  1.54  1.01 
Equity securities (1)
 27.11  26.90  26.00  27.64  23.92 
Other securities (1)
 7.09  22.38  5.91  18.39  7.46 
Total investment securities 2.18  2.36  1.97  1.82  1.89 
Federal funds sold 2.77  1.79  .39  .70  .50 
Securities purchased under agreements to resell 1.72  1.03  1.24  1.62  2.19 
Interest earning deposits with banks 2.25  .78  .18  .15  .15 
Total interest earning assets 3.21  2.86  2.49  2.47  2.62 
LIABILITIES AND EQUITY:  
Interest bearing deposits:  
Savings .04  .04  .05  .08  .08 
Interest checking and money market .20  .06  .04  .04  .05 
Certificates of deposit of less than $100,000 .41  .20  .13  .14  .18 
Certificates of deposit of $100,000 and over .60  .29  .20  .14  .14 
Total interest bearing deposits .21  .07  .05  .05  .06 
Borrowings:  
Federal funds purchased 2.41  .79  .12  .11  .10 
Securities sold under agreements to repurchase 1.37  .48  .10  .08  .08 
Other borrowings 1.78  2.37  .53  —  1.14 
Total borrowings 1.39  .50  .10  .08  .08 
Total interest bearing liabilities .34  % .12  % .06  % .06  % .06  %
Net yield on interest earning assets 3.01  % 2.79  % 2.45  % 2.43  % 2.58  %
(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 For the Nine Months Ended
(Unaudited)
(In thousands, except ratios)		 Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021 Sep. 30, 2022 Sep. 30, 2021
ALLOWANCE FOR CREDIT LOSSES ON LOANS
Balance at beginning of period $138,039  $134,710  $150,044  $162,775  $172,395  $150,044  $220,834 
     Provision for credit losses on loans 10,150  7,287  (10,686) (8,474) (5,961) 6,751  (43,749)
     Net charge-offs (recoveries):
        Commercial portfolio:
     Business 461  19  77  90  65  557  (4,848)
     Real estate — construction and land —  —  —  —  —  —  1 
     Real estate — business (8) (1) (7) 6  (5) (16) (70)
453  18  70  96  60  541  (4,917)
        Personal banking portfolio:
     Consumer credit card 2,882  2,937  3,372  2,964  2,908  9,191  17,044 
     Consumer 827  633  808  919  496  2,268  1,637 
     Overdraft 703  425  358  375  243  1,486  544 
     Real estate — personal (15) (41) 22  (71) (26) (34) (27)
     Revolving home equity (38) (14) 18  (26) (22) (34) 29 
4,359  3,940  4,578  4,161  3,599  12,877  19,227 
     Total net loan charge-offs 4,812  3,958  4,648  4,257  3,659  13,418  14,310 
Balance at end of period $143,377  $138,039  $134,710  $150,044  $162,775  $143,377  $162,775 
LIABILITY FOR UNFUNDED LENDING COMMITMENTS $30,047  $24,907  $25,032  $24,204  $22,784 
NET CHARGE-OFF RATIOS (1)
Commercial portfolio:
     Business .03  % —  % .01  % .01  % —  % .01  % (.11  %)
     Real estate — construction and land —  —  —  —  —  —  — 
     Real estate — business —  —  —  —  —  —  — 
.02  —  —  —  —  .01  (.06)
Personal banking portfolio:
     Consumer credit card 2.08  2.19  2.53  2.10  2.04  2.26  3.91 
     Consumer .16  .12  .16  .18  .10  .15  .11 
     Overdraft 62.85  30.86  28.04  30.20  18.87  39.39  17.59 
     Real estate — personal —  (.01) —  (.01) —  —  — 
     Revolving home equity (.05) (.02) .03  (.04) (.03) (.02) .01 
.30  .28  .33  .29  .25  .30  .45 
Total .12  % .10  % .12  % .11  % .10  % .12  % .12  %
CREDIT QUALITY RATIOS
Non-accrual loans to total loans .05  % .05  % .05  % .06  % .07  %
Allowance for credit losses on loans to total loans .90  .88  .87  .99  1.07 
NON-ACCRUAL AND PAST DUE LOANS
  Non-accrual loans:
     Business $5,645  $6,314  $6,756  $7,312  $8,293 
     Real estate — construction and land —  —  —  —  — 
     Real estate — business 149  167  190  214  577 
     Real estate — personal 1,390  1,436  1,389  1,631  1,551 
   Total 7,184  7,917  8,335  9,157  10,421 
Loans past due 90 days and still accruing interest $12,538  $11,909  $10,670  $11,726  $10,496 
(1) Net charge-offs are annualized and calculated as a percentage of average loans (excluding loans held for sale).

8
                                        
COMMERCE BANCSHARES, INC.
Management Discussion of Third Quarter Results
September 30, 2022
For the quarter ended September 30, 2022, net income amounted to $122.8 million, compared to $115.8 million in the previous quarter and $122.6 million in the same quarter last year. The increase in net income compared to the previous quarter was primarily the result of an increase in net interest income, partly offset by an increase in the provision for credit losses. The net yield on interest earning assets grew 22 basis points to 3.01%. Average loans grew $160.4 million compared to the previous quarter, while average available for sale debt securities and average deposits declined $826.7 million and $973.9 million, respectively. For the quarter, the return on average assets was 1.48%, the return on average equity was 17.84%, and the efficiency ratio was 55.2%.

Balance Sheet Review
During the 3rd quarter of 2022, average loans totaled $15.6 billion, an increase of $160.4 million over the prior quarter, and $386.9 million, or 2.5%, over the same quarter last year. Compared to the previous quarter, average balances of business real estate, construction, and consumer loans grew $94.6 million, $63.5 million, and $31.1 million, respectively, while business loans declined $67.5 million. Period end loans increased $212.3 million compared to the prior quarter. During the current quarter, the Company sold certain fixed rate personal real estate loans totaling $16.7 million, compared to $36.6 million in the prior quarter.

Total average available for sale debt securities decreased $826.7 million compared to the previous quarter to $13.5 billion, at fair value. The decrease in investment securities was mainly the result of lower balances of mortgage-backed and other asset-backed securities. During the current quarter, purchases of securities totaled $53.8 million with a weighted average yield of approximately 4.52%. Sales, maturities and pay downs were $658.2 million. At September 30, 2022, the duration of the investment portfolio was 3.9 years, and maturities and pay downs of approximately $2.4 billion are expected to occur during the next 12 months.

Total average deposits decreased $973.9 million this quarter compared to the previous quarter. The decrease in deposits mostly resulted from lower demand deposits and interest checking and money market deposits of $451.3 million and $423.6 million, respectively. Compared to the previous quarter, total average commercial, wealth, and consumer deposits declined $353.4 million, $327.3 million, and $291.1 million, respectively. The average loans to deposits ratio was 56.4% in the current quarter and 53.9% in the prior quarter. The Company’s average borrowings, which include customer repurchase agreements, were $2.3 billion in the 3rd quarter of 2022 and $2.4 billion in the prior quarter.



Net Interest Income
Net interest income in the 3rd quarter of 2022 amounted to $246.4 million, an increase of $14.0 million compared to the previous quarter. On a fully taxable-equivalent (FTE) basis, net interest income for the current quarter increased $13.7 million over the previous quarter to $248.7 million. The increase in net interest income was due to higher interest earned on loans, partly offset by lower interest earned on investment securities and higher interest expense. The net yield (FTE) on earning assets increased to 3.01%, compared to 2.79% in the prior quarter.

Compared to the previous quarter, interest income on loans (FTE) increased $28.9 million, mostly due to higher average rates on business, business real estate, construction, and consumer loans. The average yield (FTE) on the loan portfolio increased 65 basis points to 4.37% this quarter.

Interest income on investment securities (FTE) decreased $9.1 million compared to the prior quarter, due to lower rates earned, coupled with lower average balances. Interest income earned on U.S. government and federal agency securities decreased due to lower rates earned, which included the impact of $1.0 million in lower inflation income from Treasury inflation-protected securities this quarter. Additionally, $6.5 million of non-accrual interest was received on the sale of a private equity investment last quarter. At September 30, 2022, the Company recorded a $1.5 million adjustment to premium amortization, which increased interest income to reflect slower forward prepayment speed estimates on mortgage-backed securities, but it was less than the $5.0 million adjustment recorded in the prior quarter. The average yield (FTE) on total investment securities was 2.18% in the current quarter, compared to 2.36% in the previous quarter.

The average rate paid on interest bearing deposits totaled .21% in the current quarter compared to .07% in the prior quarter. Interest expense on deposits increased $5.9 million this quarter compared to the previous quarter, while interest expense on securities sold under agreements to repurchase increased $4.9 million, due to an 89 basis point increase in the average rate paid. The overall rate paid on interest bearing liabilities was .34% in the current quarter compared to .12% in the prior quarter.

Non-Interest Income
In the 3rd quarter of 2022, total non-interest income amounted to $138.5 million, an increase of $1.0 million compared to the same period last year and decreased $913 thousand compared to the prior quarter. The increase in non-interest income compared to the same period last year was mainly due to sweep and bank card fees, mostly offset by lower loan fees and sales and trust fees. The decrease in non-interest income compared to the prior quarter was mainly due to lower trust and deposit account fees, and income of $2.2 million recorded last quarter from a life insurance death benefit.

COMMERCE BANCSHARES, INC.                                
Management Discussion of Third Quarter Results
September 30, 2022
These decreases were mostly offset by higher bank card and sweep fees.

Total net bank card fees in the current quarter increased $2.8 million, or 6.6%, over the same period last year, and increased $1.8 million compared to the prior quarter. Net corporate card fees increased $3.0 million, or 12.6%, over the same quarter of last year mainly due to higher interchange fee income, partly offset by higher rewards expense. Net debit card fees increased $106 thousand, or 1.0%, and net merchant fees increased $30 thousand, or .6%, while net credit card fees decreased $266 thousand, or 6.9%. Total net bank card fees this quarter were comprised of fees on corporate card ($26.3 million), debit card ($10.5 million), merchant ($5.2 million) and credit card ($3.6 million) transactions.

In the current quarter, trust fees decreased $3.5 million, or 7.2%, from the same period last year, resulting from lower private client fee income. Compared to the same period last year, deposit account fees decreased $640 thousand, or 2.5%, mainly due to lower overdraft and return item fees. Loan fees and sales, mostly mortgage banking revenue, declined $3.7 million, or 54.8%, compared to amounts recorded in the same quarter last year.

Other non-interest income increased over the same period last year primarily due to higher sweep fees of $3.4 million and a $2.0 million loss on an equity method investment recorded in the 3rd quarter of 2021. For the 3rd quarter of 2022, non-interest income comprised 36.0% of the Company’s total revenue.

Investment Securities Gains and Losses
The Company recorded net securities gains of $3.4 million in the current quarter, compared to gains of $1.0 million in the prior quarter and gains of $13.1 million in the 3rd quarter of 2021. Net securities gains in the current quarter primarily resulted from net fair value gains of $14.1 million in the Company’s private equity investment portfolio, mostly offset by a loss of $10.7 million on the sale of an available for sale security.

Non-Interest Expense
Non-interest expense for the current quarter amounted to $212.9 million, compared to $211.6 million in the same period last year and $213.5 million in the prior quarter. The increase in non-interest expense compared to the same period last year was mainly due to higher salaries expense, data processing and software expense, and travel and entertainment expense, mostly offset by $8.2 million in litigation settlement costs recorded last year. The decrease in non-interest expense compared to the prior quarter was mainly due to lower salaries expense driven by an accrual of $5.4 million for special bonuses recorded last quarter, and higher other non-interest expense.
Compared to the 3rd quarter of last year, salaries and employee benefits expense increased $4.6 million, due to higher full-time salaries expense of $5.6 million, or 6.4%, partly offset by lower incentive compensation expense of $2.5 million. Full-time equivalent employees totaled 4,595 and 4,582 at September 30, 2022 and 2021, respectively.

Compared to the same period last year, data processing and software expense increased $2.5 million due to higher software amortization, bank card processing fees and increased costs for service providers this quarter. Marketing expense increased $605 thousand, while other non-interest expense decreased $7.2 million. This decrease was mainly due to $8.2 million in litigation settlement costs recorded last year, lower legal and professional fees of $1.1 million and higher deferred loan origination costs of $755 thousand. These decreases to expense were partly offset by increases in travel and entertainment expense and insurance expense of $1.5 million and $619 thousand, respectively.

Income Taxes
The effective tax rate for the Company was 21.6% in the current quarter, 21.7% in the previous quarter, and 22.0% in the 3rd quarter of 2021.

Credit Quality
Net loan charge-offs in the 3rd quarter of 2022 amounted to $4.8 million, compared to $4.0 million in the prior quarter and $3.7 million in the same period last year. The ratio of annualized net loan charge-offs to total average loans was .12% in the current quarter, .10% in the previous quarter, and .10% in the 3rd quarter of last year. Net loan charge-offs on personal banking loans increased $419 thousand to $4.4 million.

In the 3rd quarter of 2022, annualized net loan charge-offs on average consumer credit card loans were 2.08%, compared to 2.19% in the previous quarter, and 2.04% in the same quarter last year. Consumer loan net charge-offs were .16% of average consumer loans in the current quarter, .12% in the prior quarter, and .10% in the same quarter last year.

At September 30, 2022, the allowance for credit losses on loans totaled $143.4 million, or .90% of total loans, and increased $5.3 million compared to the prior quarter. Additionally, the liability for unfunded lending commitments at September 30, 2022 was $30.0 million, an increase of $5.1 million compared to the liability at June 30, 2022.

At September 30, 2022, total non-accrual loans amounted to $7.2 million, a decrease of $733 thousand from the previous quarter. At September 30, 2022, the balance of non-accrual loans, which represented .05% of loans outstanding, included business loans of $5.6 million, personal real estate loans of $1.4 million, and business real estate loans of $149 thousand. Loans more than 90 days past due and still accruing interest totaled $12.5 million at September 30, 2022.
10
COMMERCE BANCSHARES, INC.                                
Management Discussion of Third Quarter Results
September 30, 2022

Other
During the 3rd quarter of 2022, the Company paid a cash dividend of $.265 per common share, representing a 6.0% increase over the same period last year. The Company purchased 710,879 shares of treasury stock during the current quarter at an average price of $70.50.

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.
11
EX-99.2 3 a2022q3earningshighlight.htm EX-99.2 a2022q3earningshighlight
COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 3rd Quarter 2022

 
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 2021 Annual Report on Form 10-K, 2ND Quarter 2022 Report on Form 10-Q and the Corporation’s Current Reports on Form 8-K. 2

 
$1.02 EPS 3 • PPNR1 increased 8.7% over Q2. • Net interest income increased 6.0% over Q2. • Net interest margin increased 22 bps over Q2 to 3.01%. • Non-interest income decreased .7% from Q2 (36.0% of total revenue). • Wealth management client assets of $57.1 billion at September 30, 2022. • Non-interest expense decreased .3% from Q2. • QTD average loans up 1.0% over Q2. Period-end loans up 1.4% over Q2. • QTD average deposits decreased $973.9 million from Q2. Period-end deposits decreased $700.0 million from Q2. • Net charge-offs to total average loans of .12% and non-accrual loans to total loans of .05%. • Tangible common equity to tangible assets of 6.80%. Leverage ratio of 9.87%. Highlights Well-positioned for current environment 3Q2022 EARNINGS HIGHLIGHTS $172.0 million PPNR1 $122.8 million Net Income 17.84% ROACE 1 See the non-GAAP reconciliation on page 18 1.48% ROAA 55.19% Efficiency Ratio

 
Quarterly Average Balances Change vs. $ in millions 3Q22 2Q22 3Q21 Highlights Commercial1 $9,864.5 $90.6 $275.6 • Linked quarter (LQ) reflects growth in business real estate and construction, partly offset by a decline in business loans Consumer 5,781.4 69.8 111.3 Total Loans $15,646.0 $160.4 $386.9 Investment Securities $14,781.2 $(608.2) $986.3 • LQ decrease mainly due to maturities and pay downs of AFS securities Interest Earning Deposits with Banks $980.3 $(268.7) $(1,622.6) • LQ decrease resulting from lower deposit balances and loan growth, offset by lower investment securities balances Deposits $27,753.2 $(973.9) $(304.1) • 3.4% LQ decline, 1.1% decline from prior year (PY) Book Value per Share2 $19.86 $(2.43) $(8.72) • AOCI impact from higher interest rates BALANCE SHEET HIGHLIGHTS 4 1 PPP QTD average balances were $27.0 million and $41.8 million as of September 30, 2022 and June 30, 2022, respectively 2 For the quarters ended September 30, 2022, June 30, 2022, and September 30, 2021

 
$16.6 $17.5 $17.0 $11.5 $11.2 $10.8 $27.8 3Q21 2Q22 3Q22 $28.1 $28.7 -1% $9.6 $9.8 $5.7 $5.7 $5.8 $15.3 2Q223Q21 3Q22 $15.5 $15.6 $9.8 +3% BALANCE SHEET 5 Loans Consumer Loans Commercial Loans Loan Yield Deposits QTD Average Balances $ billions Non-Interest Bearing Interest Bearing Deposit Interest Bearing Deposit Yield QTD Average Balances $ billions 3.74% 3.72% 4.37% .06% .07% .21%

 
LOAN PORTFOLIO 6 $ in 000s 9/30/2022 6/30/2022 9/30/2021 QoQ YoY Business $5,528,895 $5,441,592 $5,277,850 1.6% 4.8% Business excl. PPP 5,507,081 5,406,321 4,969,914 1.9% 10.8% Construction 1,206,955 1,266,260 1,257,836 -4.7% -4.0% Business Real Estate 3,331,627 3,215,578 2,937,852 3.6% 13.4% Personal Real Estate 2,862,519 2,836,835 2,769,292 .9% 3.4% Consumer 2,116,371 2,089,592 2,049,559 1.3% 3.3% Revolving Home Equity 286,026 271,854 281,442 5.2% 1.6% Consumer Credit Card 563,349 558,102 569,976 .9% -1.2% Overdrafts 3,216 6,814 4,583 -52.8% -29.8% Total Loans $15,898,958 $15,686,627 $15,148,390 1.4% 5.0% PPP1 21,814 35,271 307,936 -38.2% -92.9% Total Loans excl. PPP $15,877,144 $15,651,356 $14,840,454 1.4% 7.0% Period-End Balances $ in 000s 9/30/2022 6/30/2022 9/30/2021 QoQ YoY Business $5,317,696 $5,385,181 $5,437,498 -1.3% -2.2% Business excl. PPP 5,290,731 5,343,373 4,862,523 -1.0% 8.8% Construction 1,288,721 1,225,267 1,168,566 5.2% 10.3% Business Real Estate 3,258,128 3,163,508 2,982,847 3.0% 9.2% Personal Real Estate 2,844,376 2,825,578 2,775,638 .7% 2.5% Consumer 2,101,622 2,070,560 2,041,263 1.5% 3.0% Revolving Home Equity 280,923 272,280 281,689 3.2% -.3% Consumer Credit Card 550,058 537,681 566,406 2.3% -2.9% Overdrafts 4,438 5,524 5,110 -19.7% -13.2% Total Loans $15,645,962 $15,485,579 $15,259,017 1.0% 2.5% PPP1 26,965 41,808 574,975 -35.5% -95.3% Total Loans excl. PPP $15,618,997 $15,443,771 $14,684,042 1.1% 6.4% QTD Average Balances 1Paycheck protection program (PPP) loans are included in the business loan category

 
Change vs. $ in millions 3Q22 2Q22 3Q21 Highlights Net Interest Income $246.4 $14.0 $32.3 • Linked quarter (LQ) increase due to higher interest earned on loans, partly offset by lower interest earned on investment securities and higher interest expense Non-Interest Income $138.5 $(0.9) $1.0 • See page 8 Non-Interest Expense $212.9 $(0.6) $1.3 • See page 9 Pre-Tax, Pre-Provision Net Revenue1 $172.0 $13.7 $32.1 Investment Securities Gains, Net $3.4 $2.4 $(9.7) • Q3 net gains of $14.1 million on the private equity investment portfolio, partly offset by a loss of $10.7 million on the sale of an AFS security Provision for Credit Losses $15.3 $8.1 $22.7 • Q3 provision reflects builds in the ACL on loans and the liability for unfunded lending commitments of $5.3 million and $5.1 million, respectively. Net-Income Attributable to Commerce Bancshares, Inc. $122.8 $7.0 $0.3 For the three months ended 3Q22 2Q22 3Q21 Net Income per Common Share – Diluted $1.02 $.96 $.99 Net Yield on Interest Earning Assets 3.01% 2.79% 2.58% • Higher rates on earning assets supported quarterly margin expansion INCOME STATEMENT HIGHLIGHTS 1 See the non-GAAP reconciliation on page 18 7

 
Change vs. $ in millions 3Q22 2Q22 3Q21 Highlights Bank Card Transaction Fees $45.6 $1.8 $2.8 • Increase of 6.6% over prior year (PY) driven by growth in net corporate card fees Trust Fees $45.4 $(1.4) $(3.5) • 3Q2022 reflects lower market values on assets under management Deposit Account Charges and Other Fees $24.5 $(1.0) $(.6) • Decrease of 2.5% from PY mainly due to lower overdraft and return item fees Capital Market Fees $3.4 $.1 $(.4) Consumer Brokerage Services $5.1 — $.2 Loan Fees and Sales $3.1 $(.2) $(3.7) • Decline reflects lower mortgage banking revenue Other $11.4 $(.2) $6.3 • Increase over PY mainly due to higher cash sweep commissions of $3.4 million and a $2.0 million loss on an equity method investment recorded in the 3rd quarter of 2021 Total Non-Interest Income $138.5 $(0.9) $1.0 NON-INTEREST INCOME HIGHLIGHTS 8

 
Change vs. $ in millions 3Q22 2Q22 3Q21 Highlights Salaries and Employee Benefits $137.4 $(4.8) $4.6 • Increase of 3.4% over prior year (PY) due to higher full-time salaries expense partly offset by lower incentive compensation expense • Decrease from linked quarter (LQ) mainly due to an accrual of $5.4 million in 2Q2022 for special bonuses to be paid to non-incentivized part-time and full-time employees Net Occupancy $12.5 — $.2 Equipment $5.0 $.3 $.6 Supplies $4.6 $.2 $.1 Data Processing and Software $28.1 $.4 $2.5 • Increase of 9.6% over PY due to higher software amortization, bank card processing fees and an increase in costs for service providers Marketing $6.2 $(.4) $.6 Other $19.1 $2.9 $(7.2) • Decrease from PY due litigation settlement costs recorded last year, lower legal and professional fees and higher deferred loan origination costs, partly offset by increases in travel and entertainment expense and insurance expense Total Non-Interest Expense $212.9 $(.6) $1.3 NON-INTEREST EXPENSE HIGHLIGHTS 9

 
10 PRE-TAX, PRE-PROVISION NET REVENUE (PPNR) $138 $140 $214 $212 3Q2021 $352 $140 $158 $232 $214 2Q2022 $372 $139 $172 $246 $213 3Q2022 $385 Non-Interest Income (+) Net Interest Income (+) Non-Interest Expense (-) Pre-Tax, Pre-Provision Net Revenue (=) 3Q2022 Comparison vs. 3Q2021 22.9% vs. 2Q2022 8.7% See the non-GAAP reconciliation on page 18

 
$3.7 $4.0 $4.8 $4.0 $3.6 3Q21 2Q22 3Q22 MAINTAINING STRONG CREDIT QUALITY 11 Net Loan Charge-Offs (NCOs) $ in millions NCOs- CBSH NCOs - Peer Average NCO/Average Loans1 - CBSH $162.8 $138.0 $143.4 $270.0 $275.8 3Q21 2Q22 3Q22 Allowance for Credit Losses on Loans (ACL) $ in millions ACL - CBSH ACL - Peer Average ACL / Total Loans - CBSH $10.4 $7.9 $7.2 $107.9 $107.8 3Q21 2Q22 3Q22 Non-Accrual Loans (NALs) $ in millions NALs - CBSH NALs - Peer Average 15.6x 17.4x 20.0x 3.3x 5.0x 2Q223Q21 3Q22 Allowance for Credit Losses on Loans (ACL) to NALs ACL / NALs - CBSH ACL / NALs - Peer Average Percentages are illustrative and not to scale; Peer Banks include: ABCB, ASB, BOKF, CFR, FNB, FULT, HWC, ONB, OZK, PB, PNFP, SFNC, SNV, SSB, UMBF, UMPQ, UBSI, VLY, WTFC 1As a percentage of average loans (excluding loans held for sale) NALs / Total Loans - CBSH NCO/Average Loans1 – Peer Average .07% NALs / Total Loans – Peer Average .05% .05% .52% .43% ACL / Total Loans – Peer Average 1.07% .88% .90% 1.29% 1.12%.10% .10% .12%.07% .06%

 
ALLOCATION OF ALLOWANCE 12 CECL allowances reflect the economic and market outlook June 30, 2022 September 30, 2022 $ in millions Allowance for Credit Losses (ACL) % of Outstanding Loans Allowance for Credit Losses (ACL) % of Outstanding Loans Business $ 41.5 .76% $ 45.0 .81% Bus R/E 29.9 .93% 28.7 .86% Construction 28.1 2.22% 29.4 2.44% Commercial total $ 99.5 1.00% $ 103.1 1.02% Consumer 9.3 .45% 9.8 .46% Consumer CC 21.3 3.81% 22.5 4.00% Personal R/E 6.5 .23% 6.6 .23% Revolving H/E 1.3 .47% 1.3 .47% Overdrafts .1 1.22% .1 2.71% Consumer total $ 38.5 .67% $ 40.3 .69% Allowance for credit losses on loans $ 138.0 .88% $ 143.4 .90% 1.47% 1.44% 1.35% 1.22% 1.07% 0.88%0.90% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% $150 $100 $200 $250 3Q $171.7 0.95% 0.99%$220.8 $139.6 $143.4 1/1 1Q1Q1Q $240.7 2Q $236.4 3Q 2Q4Q 1.10% $200.5 $134.7 $172.4 2Q $162.8 $150.0 4Q 0.87% $138.0 3Q 1.14% Allowance for Credit Losses (ACL) on Loans ACL / Total Loans (right)ACL - Loans (left) $ in millions 202220212020

 
13 WELL-POSITIONED FOR CURRENT ENVIRONMENT

 
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 3Q2022 Hedging actions: Entered into one 2.5% floor contract (indexed to 1 Month SOFR) with a notional value of $500 million, to hedge the risk of declining interest rates on floating rate commercial loans. The contract begins 1/2024 and has a term of 6 years. WELL-POSITIONED FOR MULTIPLE RATE ENVIRONMENTS 14 Opportunities to enhance and protect NII in a rising rate environment. • Investment securities portfolio duration of 3.9 years. • Cash flows from maturities and paydowns of securities of $2.4 billion expected over the next twelve months. • Large core deposit base and historically low betas. • Securities purchased under agreements to resell of $1.3 billion maturing through 2025. • 100 bps of gradual rate hikes impact NII over twelve months by reducing NII by $2.7MM to increasing NII by $23.5MM2. • As of December 31, 2021, 53% of loans were variable rate, (62% commercial, 38% consumer). Cost of Total Deposits & Deposit Beta: Prior & Current Fed Cycle Source: S&P Global Market Intelligence, 2021 10-K , 2Q2022 10-Q 1 Fed Rate increase cycle from 3Q2015 through 2Q2019, +225 bps; Fed Rate increase cycle from 4Q2021 through 3Q2022, +300 bps; 2 As of June 30, 2022 Cost of Total Deposits Before Fed Rate Increases End of Fed Rate Increases / Current Deposit Beta1 Commerce (3Q2015 – 2Q2019) .12% .38% 12% Peer Median (3Q2015 – 2Q2019) .23% .85% 27% Commerce (4Q2021 – 3Q2022) .03% .13% 3% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Quarter in the Fed Cycle Effective Fed Funds Rate (3Q2015 - 2Q2019) Effective Fed Funds Rate (4Q2021 - Current) 3Q2015 / 4Q2021

 
Over 50% of total loans are variable; 62% of commercial loans have floating rates SUMMARY OF FIXED & FLOATING LOANS 42% 58% Business Total Loans: $5.3B Fixed Variable Co m m er ci al 73% 27% Personal RE Total Loans: $2.8B Co ns um er 99% 1% HELOC Total Loans: $0.3B 44% 56% Business RE Total Loans: $3.1B 95% 5% Consumer Card Total Loans: $0.6B 74% 26% Consumer Total Loans: $2.0B 15 96% 4% Construction Total Loans: $1.1B Source: 2021 10-K

 
Average Loan to Deposit Ratio3 SOUND CAPITAL AND LIQUIDITY POSITION 16 Tier 1 Risk-Based Capital Ratio1 1S&P Global Market Intelligence, Information as of June 30, 2022 2Period-end balances, as of September 30, 2022 3Includes loans held for sale, for the quarter ended September 30, 2022 15.3% 13.9% 13.7% 13.2% 12.7% 12.1% 11.6% 11.4% 11.1% 11.1% 11.0% 10.9% 10.8% 10.6% 10.6% 10.4% 10.1% 10.1% 10.0% 9.5% UMBF BOKF SSB SFNC FNB PB CFR CBSH OZK UBSI HWC UMPQ PNFP FULT ONB SNV ASB ABCB WTFC VLY Peer Median: 11.0% Core Deposits $26.5 Billion2 Large, stable deposit base Loan to Deposit Ratio Total Deposits 56% Average Loan to Deposit Ratio177% Peer Average Commerce 96% Core Deposits - Non-Interest Bearing - Interest Checking - Savings and Money Market 4%Certificates of Deposit

 
Quick Facts: Small Business Investment Company (SBIC) founded in 1959 Nationwide footprint with Greater Midwest Focus 35 Portfolio Companies Representing $909 million in Revenue Over 3,500 Employees Fair Value as of September 30, 2022: $176.3 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 17

 
NON-GAAP RECONCILIATIONS 18 For The Three Months Ended (DOLLARS IN THOUSANDS) Sep. 30, 2022 Jun. 30, 2022 Sep. 30, 2021 A Net Interest Income $ 246,373 $ 232,385 $ 214,037 B Non-Interest Income $ 138,514 $ 139,427 $ 137,506 C Non-Interest Expense $ 212,884 $ 213,505 $ 211,620 Pre-Provision Net Revenue (A+B-C) $ 172,003 $ 158,307 $ 139,923 Pre-tax, Pre-provision Net Revenue