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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): January 18, 2024

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 January 18, 2024 by Commerce Bancshares, Inc. announcing Fourth Quarter 2023 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 January 18, 2024
99.2    Slide presentation for investors and analysts dated January 18, 2024
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: January 18, 2024


EX-99.1 2 cbsh12312023ex991.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:
Thursday, January 18, 2024

COMMERCE BANCSHARES, INC. REPORTS
FOURTH QUARTER EARNINGS PER SHARE OF $.84

Commerce Bancshares, Inc. announced earnings of $.84 per share for the three months ended December 31, 2023, compared to $1.00 per share in the same quarter last year and $.92 per share in the third quarter of 2023. Net income for the fourth quarter of 2023 amounted to $109.2 million, compared to $131.6 million in the fourth quarter of 2022 and $120.6 million in the prior quarter.

“We are pleased with our fourth quarter results," said John Kemper, President and Chief Executive Officer. “These results reflect the strength of our core deposit base, the impact of higher earning asset yields, and the contribution from key non-interest income categories, notably trust, bank card and deposit fees. Net interest income was generally flat to the previous quarter, while the net interest margin expanded six basis points. Non-interest income comprised 36.8% of total revenue. Our results included a one-time FDIC special assessment of $16 million.

“On the balance sheet,” Kemper added, “the final tranches of FHLB advances and brokered deposits matured during the quarter as planned. More than offsetting these brokered deposit maturities, we saw deposit growth across our three business segments of $674 million, resulting in a period end net deposit increase of $273 million.

“We continue to maintain ample levels of liquidity and capital, which positions us well moving into 2024. Book value per share increased 14.4% during the quarter as interest rates declined. Credit quality of the loan portfolio remains strong with non-accrual loans at .04% of total loans, down one basis point from the previous quarter and prior year.”

Fourth Quarter 2023 Financial Highlights:

•Net interest income was $248.4 million, a $126 thousand decrease from the prior quarter. The net yield on interest earning assets increased 6 basis points to 3.17%.

•Non-interest income totaled $144.9 million, an increase of $8.1 million compared to the same quarter last year.

•Non-interest expense totaled $251.3 million, an increase of $34.5 million compared to the same quarter last year, mostly due to a $16.0 million accrual for a one-time FDIC insurance special assessment.

•Average loan balances totaled $17.1 billion, an increase of $89.8 million, or .5%, over the prior quarter.

1
Exhibit 99.1
•Total average available for sale debt securities decreased 6.2%, or $633.9 million, from the prior quarter to $9.6 billion, at fair value. During the fourth quarter of 2023, the unrealized loss on available for sale debt securities decreased $376.5 million to $1.2 billion, at period end.

•Total average deposits decreased $356.2 million, or 1.4%, compared to the prior quarter, which reflected a payoff of the last tranche of brokered deposits issued during 2023. The average rate paid on interest bearing deposits in the current quarter was 1.93%.

•The ratio of annualized net loan charge-offs to average loans was .19% compared to .23% in the prior quarter.

•The allowance for credit losses on loans increased $151 thousand during the fourth quarter to $162.4 million, and the ratio of the allowance for credit losses on loans to total loans was .94% at December 31, 2023, compared to .95% at September 30, 2023.

•Total assets at December 31, 2023 were $31.7 billion, an increase of $324.4 million, or 1.0%, over the prior quarter.

•For the quarter, the return on average assets was 1.38%, the return on average equity was 16.48%, and the efficiency ratio was 63.8%.

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 nearly 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. 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 Year Ended
(Unaudited)
(Dollars in thousands, except per share data)		 Dec. 31, 2023 Sep. 30, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022
FINANCIAL SUMMARY
Net interest income $248,421  $248,547  $254,641  $998,129  $942,185 
Non-interest income 144,879  142,949  136,825  573,045  546,535 
Total revenue 393,300  391,496  391,466  1,571,174  1,488,720 
Investment securities gains (losses) 7,601  4,298  8,904  14,985  20,506 
Provision for credit losses 5,879  11,645  15,477  35,451  28,071 
Non-interest expense 251,254  228,010  216,740  930,982  848,777 
Income before taxes 143,768  156,139  168,153  619,726  632,378 
Income taxes 32,307  33,439  34,499  134,549  132,358 
Non-controlling interest expense 2,238  2,104  2,026  8,117  11,621 
Net income attributable to Commerce Bancshares, Inc. $109,223  $120,596  $131,628  $477,060  $488,399 
Earnings per common share:    
Net income — basic $0.84  $0.92  $1.00  $3.64  $3.68 
Net income — diluted $0.84  $0.92  $1.00  $3.64  $3.67 
Effective tax rate 22.83  % 21.71  % 20.77  % 22.00  % 21.32  %
Fully-taxable equivalent net interest income $250,547  $250,962  $256,675  $1,006,677  $951,815 
Average total interest earning assets (1)
 $31,340,958  $31,974,945  $31,991,224  $ 31,823,935  $33,384,162 
Diluted wtd. average shares outstanding 129,608,322  130,008,840  130,818,789  130,071,644  131,838,406 
RATIOS    
Average loans to deposits (2)
 67.69  % 66.39  % 59.73  % 66.31  % 55.41  %
Return on total average assets 1.38  1.49  1.65  1.49  1.45 
Return on average equity (3)
 16.48  17.73  21.88  17.94  17.31 
Non-interest income to total revenue 36.84  36.51  34.95  36.47  36.71 
Efficiency ratio (4)
 63.80  58.15  55.26  59.17  56.90 
Net yield on interest earning assets 3.17  3.11  3.18  3.16  2.85 
EQUITY SUMMARY    
Cash dividends per share $.257  $.257  $.240  $1.029  $.961 
Cash dividends on common stock $33,574  $33,657  $31,648  $134,734  $127,466 
Book value per share (5)
 $22.77  $19.90  $18.90 
Market value per share (5)
 $53.41  $45.70  $64.83 
High market value per share $56.75  $52.37  $69.14 
Low market value per share $40.91  $44.10  $60.16 
Common shares outstanding (5)
 130,176,048  130,586,153  131,249,055 
Tangible common equity to tangible assets (6)
 8.85  % 7.78  % 7.32  %
Tier I leverage ratio 11.25  % 10.87  % 10.34  %
OTHER QTD INFORMATION  
Number of bank/ATM locations 257  266  275 
Full-time equivalent employees 4,718  4,714  4,594 
(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 2023.
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 Year Ended
Dec. 31, 2023 Sep. 30, 2023 Jun. 30, 2023 Mar. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022
Interest income $362,609  $361,162  $348,663  $308,857  $286,377  $1,381,291  $998,979 
Interest expense 114,188  112,615  99,125  57,234  31,736  383,162  56,794 
Net interest income 248,421  248,547  249,538  251,623  254,641  998,129  942,185 
Provision for credit losses 5,879  11,645  6,471  11,456  15,477  35,451  28,071 
Net interest income after credit losses 242,542  236,902  243,067  240,167  239,164  962,678  914,114 
NON-INTEREST INCOME      
Trust fees 49,154  49,207  47,265  45,328  44,710  190,954  184,719 
Bank card transaction fees 47,878  46,899  49,725  46,654  44,588  191,156  176,144 
Deposit account charges and other fees 23,517  23,090  22,633  21,752  21,989  90,992  94,381 
Consumer brokerage services 3,641  3,820  4,677  5,085  4,518  17,223  19,117 
Capital market fees 4,269  3,524  2,945  3,362  3,386  14,100  14,231 
Loan fees and sales 2,875  2,966  2,735  2,589  2,566  11,165  13,141 
Other 13,545  13,443  17,625  12,842  15,068  57,455  44,802 
Total non-interest income 144,879  142,949  147,605  137,612  136,825  573,045  546,535 
INVESTMENT SECURITIES GAINS (LOSSES), NET 7,601  4,298  3,392  (306) 8,904  14,985  20,506 
NON-INTEREST EXPENSE      
Salaries and employee benefits 147,456  146,805  145,429  144,373  138,458  584,063  554,047 
Data processing and software 31,141  30,744  28,719  28,154  27,991  118,758  110,692 
Net occupancy 13,927  13,948  12,995  12,759  11,774  53,629  49,117 
Deposit insurance 20,304  4,029  4,187  4,643  3,153  33,163  10,583 
Marketing 6,505  6,167  6,368  5,471  5,419  24,511  23,827 
Equipment 5,137  4,697  4,864  4,850  5,021  19,548  19,359 
Supplies and communication 5,242  4,963  4,625  4,590  4,446  19,420  18,101 
Other 21,542  16,657  20,424  19,267  20,478  77,890  63,051 
Total non-interest expense 251,254  228,010  227,611  224,107  216,740  930,982  848,777 
Income before income taxes 143,768  156,139  166,453  153,366  168,153  619,726  632,378 
Less income taxes 32,307  33,439  35,990  32,813  34,499  134,549  132,358 
Net income 111,461  122,700  130,463  120,553  133,654  485,177  500,020 
Less non-controlling interest expense (income) 2,238  2,104  2,674  1,101  2,026  8,117  11,621 
Net income attributable to Commerce Bancshares, Inc. $109,223  $120,596  $127,789  $119,452  $131,628  $477,060  $488,399 
Net income per common share — basic $0.84  $0.92  $0.97  $0.91  $1.00  $3.64  $3.68 
Net income per common share — diluted $0.84  $0.92  $0.97  $0.91  $1.00  $3.64  $3.67 
OTHER INFORMATION
Return on total average assets 1.38  % 1.49  % 1.56  % 1.54  % 1.65  % 1.49  % 1.45  %
Return on average equity (1)
 16.48  17.73  18.81  18.75  21.88  17.94  17.31 
Efficiency ratio (2)
 63.80  58.15  57.22  57.49  55.26  59.17  56.90 
Effective tax rate 22.83  21.71  21.97  21.55  20.77  22.00  21.32 
Net yield on interest earning assets 3.17  3.11  3.12  3.26  3.18  3.16  2.85 
Fully-taxable equivalent net interest income $250,547  $250,962  $251,757  $253,411  $256,675  $1,006,677  $951,815 
(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.
The statement above reflects the reclassification of non-interest income of $406 thousand and $1.1 million from other non-interest income to capital market fees for the second and third quarters of 2023.

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

(Unaudited)
(In thousands)		 Dec. 31, 2023 Sep. 30, 2023 Dec. 31, 2022
ASSETS      
Loans
     Business $ 6,019,036  $ 5,908,330  $ 5,661,725 
     Real estate — construction and land 1,446,764  1,539,566  1,361,095 
     Real estate — business 3,719,306  3,647,168  3,406,981 
     Real estate — personal 3,026,041  3,024,639  2,918,078 
     Consumer 2,077,723  2,125,804  2,059,088 
     Revolving home equity 319,894  305,237  297,207 
     Consumer credit card 589,913  574,829  584,000 
     Overdrafts 6,802  3,753  14,957 
Total loans 17,205,479  17,129,326  16,303,131 
Allowance for credit losses on loans (162,395) (162,244) (150,136)
Net loans 17,043,084  16,967,082  16,152,995 
Loans held for sale 4,177  5,120  4,964 
Investment securities:
Available for sale debt securities 9,684,760  9,860,828  12,238,316 
Trading debt securities 28,830  35,564  43,523 
Equity securities 12,701  12,212  12,304 
Other securities 222,473  230,792  225,034 
Total investment securities 9,948,764  10,139,396  12,519,177 
Federal funds sold 5,025  2,735  49,505 
Securities purchased under agreements to resell 450,000  450,000  825,000 
Interest earning deposits with banks 2,239,010  1,847,641  389,140 
Cash and due from banks 443,147  358,010  452,496 
Premises and equipment — net 469,059  460,830  418,909 
Goodwill 146,539  146,539  138,921 
Other intangible assets — net 14,179  14,432  15,234 
Other assets 938,077  984,907  909,590 
Total assets $ 31,701,061  $ 31,376,692  $ 31,875,931 
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Deposits:      
Non-interest bearing $ 7,975,935  $ 7,961,402  $ 10,066,356 
Savings, interest checking and money market 14,512,273  14,154,275  15,126,981 
Certificates of deposit of less than $100,000 930,432  1,210,169  387,336 
Certificates of deposit of $100,000 and over 1,945,258  1,764,611  606,767 
Total deposits 25,363,898  25,090,457  26,187,440 
Federal funds purchased and securities sold under agreements to repurchase 2,908,815  2,745,181  2,841,734 
Other borrowings 1,404  503,589  9,672 
Other liabilities 462,714  438,199  355,508 
Total liabilities 28,736,831  28,777,426  29,394,354 
Stockholders’ equity:      
Common stock 655,322  629,319  629,319 
Capital surplus 3,162,622  2,924,211  2,932,959 
Retained earnings 53,183  298,297  31,620 
Treasury stock (35,599) (76,888) (41,743)
Accumulated other comprehensive income (loss) (891,412) (1,193,534) (1,086,864)
Total stockholders’ equity 2,944,116  2,581,405  2,465,291 
Non-controlling interest 20,114  17,861  16,286 
Total equity 2,964,230  2,599,266  2,481,577 
Total liabilities and equity $ 31,701,061  $ 31,376,692  $ 31,875,931 

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

(Unaudited)
(In thousands)		 For the Three Months Ended
Dec. 31, 2023 Sep. 30, 2023 Jun. 30, 2023 Mar. 31, 2023 Dec. 31, 2022
ASSETS:
Loans:
Business $ 5,861,229  $ 5,849,227  $ 5,757,388  $ 5,656,104  $ 5,478,241 
Real estate — construction and land 1,523,682  1,508,850  1,450,196  1,410,835  1,268,900 
Real estate — business 3,644,589  3,642,010  3,540,851  3,478,382  3,300,697 
Real estate — personal 3,027,664  2,992,500  2,960,962  2,933,750  2,886,686 
Consumer 2,117,268  2,102,281  2,098,523  2,067,385  2,089,912 
Revolving home equity 310,282  304,055  300,623  296,748  293,681 
Consumer credit card 568,112  564,039  555,875  556,223  559,463 
Overdrafts 5,258  5,341  4,630  4,449  7,428 
Total loans
17,058,084  16,968,303  16,669,048  16,403,876  15,885,008 
Allowance for credit losses on loans (161,932) (158,335) (159,068) (150,117) (143,285)
Net loans 16,896,152  16,809,968  16,509,980  16,253,759  15,741,723 
Loans held for sale 5,392  5,714  5,957  5,708  6,567 
Investment securities:
U.S. government and federal agency obligations 889,390  986,284  1,035,651  1,099,067  1,055,602 
Government-sponsored enterprise obligations 55,661  55,676  55,751  87,086  55,732 
State and municipal obligations 1,363,649  1,391,541  1,532,519  1,793,756  1,990,643 
Mortgage-backed securities 6,022,502  6,161,348  6,316,224  6,454,408  6,605,936 
Asset-backed securities 2,325,089  2,553,562  2,827,911  3,233,757  3,714,092 
Other debt securities
510,721  514,787  519,988  528,941  560,951 
Unrealized gain (loss) on debt securities (1,595,845) (1,458,141) (1,331,002) (1,387,196) (1,582,061)
Total available for sale debt securities 9,571,167  10,205,057  10,957,042  11,809,819  12,400,895 
Trading debt securities
37,234  35,044  46,493  45,757  44,626 
Equity securities 12,249  12,230  12,335  12,458  10,534 
Other securities 222,378  237,518  273,587  229,867  219,354 
Total investment securities 9,843,028  10,489,849  11,289,457  12,097,901  12,675,409 
Federal funds sold 1,194  2,722  7,484  38,978  27,683 
Securities purchased under agreements to resell 450,000  712,472  824,974  825,000  1,174,457 
Interest earning deposits with banks 2,387,415  2,337,744  2,284,162  809,935  640,039 
Other assets 1,797,849  1,750,222  1,941,340  1,376,551  1,339,554 
Total assets $ 31,381,030  $ 32,108,691  $ 32,863,354  $ 31,407,832  $ 31,605,432 
LIABILITIES AND EQUITY:
Non-interest bearing deposits $ 7,748,654  $ 7,939,190  $ 8,224,475  $ 9,114,512  $ 10,360,834 
Savings 1,357,733  1,436,149  1,516,887  1,550,215  1,567,113 
Interest checking and money market 13,166,783  13,048,199  12,918,399  13,265,485  13,693,974 
Certificates of deposit of less than $100,000 1,097,224  1,423,965  1,075,110  415,367  388,304 
Certificates of deposit of $100,000 and over 1,839,057  1,718,126  1,472,208  903,393  596,703 
Total deposits 25,209,451  25,565,629  25,207,079  25,248,972  26,606,928 
Borrowings:
Federal funds purchased 473,534  508,851  507,165  493,721  143,630 
Securities sold under agreements to repurchase 2,467,118  2,283,020  2,206,612  2,418,726  2,260,263 
Other borrowings 179,587  685,222  1,617,952  551,267  179,552 
Total borrowings 3,120,239  3,477,093  4,331,729  3,463,714  2,583,445 
Other liabilities 421,402  367,741  598,915  112,052  28,745 
Total liabilities 28,751,092  29,410,463  30,137,723  28,824,738  29,219,118 
Equity 2,629,938  2,698,228  2,725,631  2,583,094  2,386,314 
Total liabilities and equity $ 31,381,030  $ 32,108,691  $ 32,863,354  $ 31,407,832  $ 31,605,432 

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

(Unaudited) For the Three Months Ended
Dec. 31, 2023 Sep. 30, 2023 Jun. 30, 2023 Mar. 31, 2023 Dec. 31, 2022
ASSETS:  
Loans:  
Business (1)
 5.91  % 5.77  % 5.58  % 5.31  % 4.68  %
Real estate — construction and land 8.34  8.17  7.92  7.33  6.80 
Real estate — business 6.18  6.13  5.96  5.65  5.15 
Real estate — personal 3.85  3.73  3.68  3.61  3.45 
Consumer 6.21  5.97  5.63  5.31  4.77 
Revolving home equity 7.70  7.76  7.55  7.03  5.89 
Consumer credit card 13.83  13.77  13.77  13.68  12.64 
Overdrafts —  —  —  —  — 
Total loans 6.15  6.02  5.84  5.56  5.03 
Loans held for sale 9.93  10.55  10.17  10.30  10.09 
Investment securities:  
U.S. government and federal agency obligations 2.32  2.31  3.42  1.90  2.01 
Government-sponsored enterprise obligations 2.36  2.36  2.38  3.21  2.36 
State and municipal obligations (1)
 1.94  1.95  2.04  2.26  2.29 
Mortgage-backed securities 2.05  2.06  2.09  2.06  1.88 
Asset-backed securities 2.30  2.20  2.08  2.01  1.96 
Other debt securities 1.85  1.75  1.86  1.93  1.89 
Total available for sale debt securities 2.10  2.08  2.19  2.07  1.97 
Trading debt securities (1)
 5.05  5.11  4.53  4.59  3.81 
Equity securities (1)
 27.47  23.06  23.25  23.24  28.44 
Other securities (1)
 8.60  13.13  9.40  7.11  6.67 
Total investment securities 2.27  2.33  2.37  2.18  2.07 
Federal funds sold 6.65  6.56  5.63  5.09  4.27 
Securities purchased under agreements to resell 1.64  2.08  1.99  1.94  2.36 
Interest earning deposits with banks 5.47  5.39  5.14  4.67  3.69 
Total interest earning assets 4.62  4.51  4.34  4.00  3.59 
LIABILITIES AND EQUITY:  
Interest bearing deposits:  
Savings .05  .05  .05  .05  .06 
Interest checking and money market 1.57  1.33  .93  .61  .38 
Certificates of deposit of less than $100,000 4.21  4.32  3.78  1.39  .73 
Certificates of deposit of $100,000 and over 4.55  4.37  3.93  2.98  1.42 
Total interest bearing deposits 1.93  1.76  1.29  .71  .40 
Borrowings:  
Federal funds purchased 5.40  5.33  5.06  4.59  3.56 
Securities sold under agreements to repurchase 3.25  3.20  3.09  2.93  2.29 
Other borrowings 5.45  5.30  5.24  4.94  4.02 
Total borrowings 3.71  3.93  4.13  3.49  2.48 
Total interest bearing liabilities 2.20  % 2.12  % 1.87  % 1.20  % .69  %
Net yield on interest earning assets 3.17  % 3.11  % 3.12  % 3.26  % 3.18  %
(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 Year Ended
(Unaudited)
(In thousands, except ratios)		 Dec. 31, 2023 Sep. 30, 2023 Jun. 30, 2023 Mar. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022
ALLOWANCE FOR CREDIT LOSSES ON LOANS
Balance at beginning of period $162,244  $158,685  $159,317  $150,136  $143,377  $150,136  $150,044 
     Provision for credit losses on loans 8,170  13,343  5,864  15,948  12,404  43,325  19,155 
     Net charge-offs (recoveries):
        Commercial portfolio:
     Business 96  2,613  165  230  496  3,104  1,053 
     Real estate — construction and land —  —  (115) —  —  (115) — 
     Real estate — business 128  (15) (5) (4) (4) 104  (20)
224  2,598  45  226  492  3,093  1,033 
        Personal banking portfolio:
     Consumer credit card 5,325  4,716  4,687  4,325  3,467  19,053  12,658 
     Consumer 1,903  1,797  1,273  1,275  1,522  6,248  3,790 
     Overdraft 588  683  517  978  230  2,766  1,716 
     Real estate — personal (11) (9) (6) (11) (40) (37) (74)
     Revolving home equity (10) (1) (20) (26) (26) (57) (60)
7,795  7,186  6,451  6,541  5,153  27,973  18,030 
     Total net loan charge-offs 8,019  9,784  6,496  6,767  5,645  31,066  19,063 
Balance at end of period $162,395  $162,244  $158,685  $159,317  $150,136  $162,395  $150,136 
LIABILITY FOR UNFUNDED LENDING COMMITMENTS $25,246  $27,537  $29,235  $28,628  $33,120 
NET CHARGE-OFF RATIOS (1)
Commercial portfolio:
     Business .01  % .18  % .01  % .02  % .04  % .05  % .02  %
     Real estate — construction and land —  —  (.03) —  —  (.01) — 
     Real estate — business .01  —  —  —  —  —  — 
.01  .09  —  .01  .02  .03  .01 
Personal banking portfolio:
     Consumer credit card 3.72  3.32  3.38  3.15  2.46  3.40  2.31 
     Consumer .36  .34  .24  .25  .29  .30  .18 
     Overdraft 44.37  50.73  44.79  89.15  12.28  56.19  30.40 
     Real estate — personal —  —  —  —  (.01) —  — 
     Revolving home equity (.01) —  (.03) (.04) (.04) (.02) (.02)
.51  .48  .44  .45  .35  .47  .31 
Total .19  % .23  % .16  % .17  % .14  % .19  % .12  %
CREDIT QUALITY RATIOS
Non-accrual loans to total loans .04  % .05  % .04  % .05  % .05  %
Allowance for credit losses on loans to total loans .94  .95  .94  .96  .92 
NON-ACCRUAL AND PAST DUE LOANS
  Non-accrual loans:
     Business $3,622  $6,602  $4,732  $6,361  $6,751 
     Real estate — business 60  76  153  171  189 
     Real estate — personal 1,653  1,531  1,276  1,269  1,366 
     Revolving home equity 1,977  —  —  —  — 
   Total 7,312  8,209  6,161  7,801  8,306 
Loans past due 90 days and still accruing interest $21,864  $18,580  $15,351  $14,800  $15,830 
(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 Fourth Quarter Results
December 31, 2023
For the quarter ended December 31, 2023, net income amounted to $109.2 million, compared to $120.6 million in the previous quarter and $131.6 million in the same quarter last year. The decrease in net income compared to the previous quarter was primarily the result of higher non-interest expense, partly offset by lower provision for credit losses and higher net gains on investment securities. The net yield on interest earning assets increased six basis points from the previous quarter to 3.17%. Average loans grew $89.8 million compared to the previous quarter, while average deposits, borrowings and available for sale debt securities, at fair value, declined $356.2 million, $356.9 million, and $633.9 million, respectively. For the quarter, the return on average assets was 1.38%, the return on average equity was 16.48%, and the efficiency ratio was 63.8%.

Balance Sheet Review
During the 4th quarter of 2023, average loans totaled $17.1 billion, an increase of $89.8 million over the prior quarter, and $1.2 billion, or 7.4%, over the same quarter last year. Compared to the previous quarter, average balances of personal real estate, consumer, construction, and business loans grew $35.2 million, $15.0 million, $14.8 million, and $12.0 million, respectively. During the current quarter, the Company sold certain fixed rate personal real estate loans totaling $8.7 million, compared to $9.2 million in the prior quarter.

Total average available for sale debt securities decreased $633.9 million compared to the previous quarter to $9.6 billion, at fair value. The decrease in investment securities was mainly the result of lower average balances of asset-backed, mortgage-backed, and U.S. government and federal agency obligation securities. During the 4th quarter of 2023, the unrealized loss on available for sale securities decreased $376.5 million to $1.2 billion, at period end, and maturities and pay downs were $598.7 million. At December 31, 2023, the duration of the available for sale investment portfolio was 4.1 years. The Company does not have any investment securities classified as held-to-maturity.

Total average deposits decreased $356.2 million this quarter compared to the previous quarter. The decrease in deposits mostly resulted from lower certificates of deposit, demand deposits, and savings average deposits of $205.8 million, $190.5 million, and $78.4 million, respectively, partly offset by higher interest checking and money market average deposits of $118.6 million. Compared to the previous quarter, total average commercial and wealth deposits increased $93.4 million and $23.0 million, respectively, while consumer deposits declined $5.9 million. During the 4th quarter, the Company paid off its final tranche of brokered deposits, which decreased average certificate of deposit balances by $471.3 million compared to the prior quarter. The average loans to deposits ratio was 67.7% in the current quarter and 66.4% in the prior quarter. The
Company’s average borrowings, which included customer repurchase agreements of $2.5 billion, decreased $356.9 million to $3.1 billion in the 4th quarter of 2023, mostly due to a decline of $505.4 million in Federal Home Loan Bank (FHLB) borrowings.

Net Interest Income
Net interest income in the 4th quarter of 2023 amounted to $248.4 million, a decrease of $126 thousand compared to the previous quarter. On a fully taxable-equivalent (FTE) basis, net interest income for the current quarter decreased $415 thousand from the previous quarter to $250.5 million. The decrease in net interest income was mostly due to higher interest expense on deposits and lower interest income on investment securities, partly offset by higher interest earned on loans and lower interest expense on borrowings. The net yield (FTE) on earning assets increased to 3.17%, from 3.11% in the prior quarter.

Compared to the previous quarter, interest income on loans (FTE) increased $6.8 million, due to higher average rates earned in most loan categories, coupled with higher average balances in almost all loan categories. The average yield (FTE) on the loan portfolio increased 13 basis points to 6.15% this quarter.

Interest income on investment securities (FTE) decreased $4.9 million compared to the prior quarter, mostly due to lower average balances of available for sale securities and a $2.3 million dividend from a private equity investment in the prior quarter that did not repeat in the current quarter. Interest income earned on U.S. government and federal agency securities decreased due to lower average balances, which included the impact of $473 thousand in lower inflation income from Treasury inflation-protected securities this quarter. Additionally, the Company recorded a $629 thousand adjustment to premium amortization at December 31, 2023, which increased interest income to reflect slower forward prepayment speed estimates on mortgage-backed securities, but was lower than the $1.3 million adjustment that increased interest income in the prior quarter. The average yield (FTE) on total investment securities was 2.27% in the current quarter, compared to 2.33% in the previous quarter.

Compared to the previous quarter, interest income on deposits with banks increased $1.2 million, due to higher average rates earned and higher average balances. The average yield on deposits with banks was 5.47% in the current quarter, compared to 5.39% in the prior quarter.

Interest expense increased $1.6 million, mostly due to higher rates paid on deposits, partly offset by lower average balances of borrowings and deposits. The average rate paid on interest bearing deposits totaled 1.93% in the current quarter compared to 1.76% in the prior quarter.
9
Exhibit 99.1
COMMERCE BANCSHARES, INC.                                
Management Discussion of Fourth Quarter Results
December 31, 2023
Interest expense on deposits increased $6.9 million this quarter compared to the previous quarter. Interest expense on borrowings decreased $5.3 million, mostly due to a decline in average FHLB borrowings of $505.4 million. The overall rate paid on interest bearing liabilities was 2.20% in the current quarter compared to 2.12% in the prior quarter.

Non-Interest Income
In the 4th quarter of 2023, total non-interest income amounted to $144.9 million, an increase of $8.1 million compared to the same period last year and an increase of $1.9 million compared to the prior quarter. The increase in non-interest income compared to the same period last year was mainly due to higher trust fees, bank card fees, deposit account fees, and capital market fees, partly offset by lower consumer brokerage fees and lower gains on sales of real estate. The increase in non-interest income compared to the prior quarter was mainly due to higher bank card fees, capital market fees, deposit account fees, and sweep fees, partly offset by lower tax credit sales income, and lower gains on sales of real estate. Additionally, an increase of $2.3 million in fair value adjustments was recorded on the Company’s deferred compensation plan, which are held in a trust and recorded as both an asset and liability, affecting both other income and other expense.

Total net bank card fees in the current quarter increased $3.3 million, or 7.4%, compared to the same period last year, and increased $979 thousand compared to the prior quarter. Net corporate card fees increased $2.3 million, or 9.3%, over the same quarter of last year mainly due to lower rewards and network expense. Net debit card fees increased $790 thousand, or 7.6%, mostly due to lower network expense. Net merchant fees increased $159 thousand, or 2.9%, due to higher interchange fees, while net credit card fees increased $3 thousand. Total net bank card fees this quarter were comprised of fees on corporate card ($27.6 million), debit card ($11.2 million), merchant ($5.6 million) and credit card ($3.5 million) transactions.

In the current quarter, trust fees increased $4.4 million, or 9.9%, over the same period last year, mostly resulting from higher private client trust fees. Compared to the same period last year, deposit account fees increased $1.5 million, or 6.9%, mostly due to higher corporate cash management fees. Capital market fees increased $883 thousand, or 26.1%, over the same period last year due to higher underwriting fees, while consumer brokerage fees decreased $877 thousand, or 19.4%.

Other non-interest income decreased compared to the same period last year primarily due to lower tax credit sales income of $1.0 million and lower gains on sales of real estate and other assets of $1.2 million. These decreases were partly offset by higher fair
value adjustments on the Company’s deferred compensation plan this quarter. For the 4th quarter of 2023, non-interest income comprised 36.8% of the Company’s total revenue.

Investment Securities Gains and Losses
The Company recorded net securities gains of $7.6 million in the current quarter, compared to gains of $4.3 million in the prior quarter and $8.9 million in the 4th quarter of 2022. Net securities gains in the current quarter primarily resulted from net fair value gains of $7.1 million on the Company’s portfolio of private equity investments.

Non-Interest Expense
Non-interest expense for the current quarter amounted to $251.3 million, compared to $216.7 million in the same period last year and $228.0 million in the prior quarter. The increase in non-interest expense compared to the same period last year was mainly due to higher FDIC insurance expense, salaries and employee benefits expense, data processing and software expense, and occupancy expense. The increase in non-interest expense compared to the prior quarter was mainly due to higher FDIC insurance expense.

Compared to the 4th quarter of last year, salaries and employee benefits expense increased $9.0 million, or 6.5%, mostly due to higher full-time salaries expense of $7.3 million and higher employee benefits expense of $2.0 million. Full-time equivalent employees totaled 4,718 and 4,594 at December 31, 2023 and 2022, respectively.

Compared to the same period last year, data processing and software expense increased $3.1 million due to higher bank card fees expense and increased costs for service providers. Occupancy expense increased $2.2 million mostly due to higher real estate taxes and depreciation expense, partly offset by higher rent income. FDIC insurance expense increased $17.2 million, mostly due to a $16.0 million accrual in the current quarter of a one-time special assessment by the FDIC to replenish the Deposit Insurance Fund.

Income Taxes
The effective tax rate for the Company was 22.8% in the current quarter, 21.7% in the previous quarter, and 20.8% in the 4th quarter of 2022. The increase in the effective tax rate compared to the prior quarter was mostly due to higher state and local income taxes. The increase in the effective tax rate compared to the same quarter last year was mostly due to higher state income taxes and lower tax-exempt income.

Credit Quality
Net loan charge-offs in the 4th quarter of 2023 amounted to $8.0 million, compared to $9.8 million in the prior quarter and $5.6 million in the same period last year. The ratio of annualized net loan charge-offs to total average loans was .19% in the current quarter, .23% in the previous quarter, and .14% in the 4th quarter of last year.
10
Exhibit 99.1
COMMERCE BANCSHARES, INC.                                
Management Discussion of Fourth Quarter Results
December 31, 2023
Compared to the prior quarter, net loan charge-offs on commercial loans decreased $2.4 million to $224 thousand, while net loan charge-offs on personal banking loans increased $609 thousand to $7.8 million, mainly due to $609 thousand of higher consumer credit card loan net charge-offs.

In the 4th quarter of 2023, annualized net loan charge-offs on average consumer credit card loans were 3.72%, compared to 3.32% in the previous quarter, and 2.46% in the same quarter last year. Consumer loan net charge-offs were .36% of average consumer loans in the current quarter, .34% in the prior quarter, and .29% in the same quarter last year.

At December 31, 2023, the allowance for credit losses on loans totaled $162.4 million, or .94% of total loans, and increased $151 thousand compared to the prior quarter. Additionally, the liability for unfunded lending commitments at December 31, 2023 was $25.2 million, a decrease of $2.3 million compared to the liability at September 30, 2023.

At December 31, 2023, total non-accrual loans amounted to $7.3 million, a decrease of $897 thousand compared to the previous quarter. At December 31, 2023, the balance of non-accrual loans, which represented .04% of loans outstanding, included business loans of $3.6 million, revolving home equity loans of $2.0 million, personal real estate loans of $1.7 million, and business real estate loans of $60 thousand. Loans more than 90 days past due and still accruing interest totaled $21.9 million at December 31, 2023.

Liquidity
During the 4th quarter of 2023, the Company increased its interest earning deposit at the Federal Reserve Bank (FRB) by $391.4 million to $2.2 billion. The change in the balance at the FRB was mostly the result of $598.7 million of maturities and paydowns in the available for sale debt securities portfolio, a $408.7 million increase in securities sold under agreements to repurchase, and a $273.4 million increase in total deposits, which includes a $401.0 million decrease in brokered certificates of deposit, partly offset by a $500.0 million decrease in FHLB advances and a $245.1 million decrease in federal funds purchased.

The Company regularly pledges loans and securities to the FRB and at December 31, 2023 and September 30, 2023, the Company’s pledging resulted in a total borrowing capacity of $4.9 billion and $5.0 billion, respectively. The Company did not have any borrowings from the FRB’s Discount Window or the Bank Term Funding Program during the current quarter. The Company also pledges loans and securities and borrows from the FHLB. At December 31, 2023, the Company did not have any outstanding
borrowings and had $1.9 billion of available borrowing capacity from the FHLB. Additionally, the Company pledges portions of its investment securities portfolio to secure public fund deposits, trust funds, and securities sold under agreements to repurchase.

The Company has an available for sale debt securities portfolio with a fair market value of $9.7 billion at December 31, 2023. Approximately $1.8 billion is expected to mature or pay down over the next 12 months. At December 31, 2023, the Company had pledged $7.5 billion of the securities portfolio. The Company also has a portfolio of $450.0 million in securities purchased under agreements to resell, of which $325.0 million are expected to mature over the next 12 months.

Other
During the 4th quarter of 2023, the Company distributed a 5% stock dividend on its common stock and paid a cash dividend of $.26 per common share (as restated for the stock dividend), representing a 7.1% increase over the same period last year. The Company purchased 412,921 shares of treasury stock during the current quarter at an average price of $48.84.

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 a2023q4earningshighlight.htm EX-99.2 a2023q4earningshighlight
COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 4th Quarter 2023 PEOPLE, GROWTH AND POSSIBILITIES

 
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 2022 Annual Report on Form 10-K, 3rd Quarter 2023 Report on Form 10- Q and the Corporation’s Current Reports on Form 8-K. 2

 
COMMERCE BANCSHARES 158 YEARS IN BUSINESS FULL-SERVICE BANKING FOOTPRINT 141 full-service branches and 272 ATMs St. Louis  Kansas City  Springfield  Central Missouri Central Illinois  Wichita  Tulsa  Oklahoma City  Denver COMMERCIAL OFFICES Cincinnati  Nashville  Dallas  Des Moines Indianapolis  Grand Rapids  Houston U.S. PRESENCE Extended Commercial Market Area Commercial Payments Services Offered in 48 states across the U.S. Sources: 1S&P Global Market Intelligence – Regulated U.S. depositories which includes commercial banks, bank holding companies, and credit unions, rankings as of 9/30/2023; 2Includes loans held for sale; 3Moody’s Sector Profile: Banks, November 30, 2023, Baseline Credit Assessment (BCA) reflects a bank’s standalone credit strength; Company reports and filings, information as of 12/31/2023 unless otherwise noted. 3 $31.7 BILLION TOTAL ASSETS 41st LARGEST U.S. BANK BASED ON ASSET SIZE1 $7.0 BILLION MARKET CAP 19TH LARGEST U.S. BANK BASED ON MARKET CAP1 $68.9 BILLION TOTAL TRUST ASSETS UNDER ADMINISTRATION 20TH LARGEST AMONG BANK-MANAGED TRUST COMPANIES BASED ON AUM1 15.11% TIER 1 COMMON RISK- BASED CAPITAL RATIO 3RD HIGHEST AMONG TOP 50 U.S. BANKS BASED ON ASSET SIZE1 a2 BASELINE CREDIT ASSESSMENT3 TWO RATINGS ABOVE THE U.S. BANKING INDUSTRY MEDIAN RATING OF baa1 $25.4 BILLION TOTAL DEPOSITS $17.2 BILLION TOTAL LOANS2 $9.9 BILLION COMMERCIAL CARD VOLUME 17.94% RETURN ON AVERAGE COMMON EQUITY YTD 7TH YTD ROACE FOR THE TOP 50 U.S. BANKS BASED ON ASSET SIZE1 AS OF DECEMBER 31, 2023 AS OF SEPT. 30, 2023

 
4 TRACK RECORD OF LONG-TERM OUTPERFORMANCE Revenue Diversification Balanced earnings profile, fee revenue at 36%1 of total revenue, bolstered by growing wealth and national payments businesses Deposit Franchise $23.4 billion in low-cost, diverse deposits2 with peer-leading historical deposit betas Continued Long-Term Investments Core banking system implementation, Enterprise Digital, Expansion Markets, Wealth Management, Consistent Earnings & Shareholder Value Almost 9% total annualized return to shareholders over the last 15 years, outperforming the annualized KBW Regional Bank Index return of 7%3 Capital Management Strong capital ratios, 55th consecutive year of common dividend increases4 Credit Quality Conservative risk profile drives outperformance across credit cycles 1As of YTD 12/31/2023; 2Excludes certificates of deposit greater than $100,000, period-end balance as of 12/31/2023; 3As of 12/31/2023; 4Based on 1Q2023 paid dividend

 
$.84 EPS 5 • Net interest income flat to Q3 at $248MM. • Net interest margin increased 6 bps from Q3 to 3.17%. • Total cost of deposits increased 13 bps to 1.34%, compared to an increase of 34 bps in Q3. • Non-interest expense includes a $16MM one-time FDIC special assessment2. • Total average assets declined $728MM from Q3, driven by $901M3 of wholesale funding maturities. • Period end non-interest bearing deposits to total deposits was generally flat to Q3 at 31.4%. • Net loan charge-offs of .19% and non-accrual loans of .04%. • TCE/TA increased 107 bps over Q3 to 8.85%. • Book value per share increased 14.4% to $22.77. Highlights Well-positioned for current environment 4Q2023 HIGHLIGHTS $142 million PPNR1 $109.2 million Net Income 16.48% ROACE 1.38% ROAA 63.80% Efficiency Ratio 1See the non-GAAP reconciliation on page 25 2Accrued in 4Q23 3Decrease in actual balances

 
Quarterly Average Balances 4Q23 vs. 3Q23 4Q23 vs. 4Q22 $ in millions 4Q23 $ Change % Change $ Change % Change Commercial $11,029.5 $29.4 0% $981.7 10% Consumer 6,028.6 60.4 1% 191.4 3% Total Loans $17,058.1 $89.8 1% $1,173.1 7% Investment Securities $9,843.0 $(646.8) (6)% $(2,832.4) (22)% Interest Earning Deposits with Banks $2,387.4 $49.7 2% $1,747.4 273% Deposits $25,209.5 $(356.2) (1)% $(1,397.5) (5)% Book Value per Share1 $22.77 $2.87 14% $3.87 20% BALANCE SHEET HIGHLIGHTS 6 1For the quarters ended December 31, 2023, September 30, 2023, and December 31, 2022 Loans: 7% growth over prior year. Investment securities: Continued portfolio run-off, funding cash balances and loan growth. Interest Earning Deposits with Banks: Maintained ample levels of liquidity through Q4. Average Deposits: Declined from Q3, mostly reflecting brokered deposit run-off.

 
$16.2 $17.5 $10.4 $7.9 $7.7 4Q22 $17.7 3Q23 4Q23 $26.6 $25.6 $25.2 -5% $10.1 $11.0 $11.0 $5.8 $6.0 $6.1 4Q22 3Q23 4Q23 $15.9 $17.0 $17.1 BALANCE SHEET 7 Loans Consumer Loans Commercial Loans Loan Yield Deposits QTD Average Balances $ billions Non-Interest Bearing Interest-Bearing Deposits Interest-Bearing Deposit Cost QTD Average Balances $ billions 5.03% 6.02% 6.15% .40% 1.76% 1.93% +7%

 
LOAN PORTFOLIO 8 $ in 000s 12/31/2023 9/30/2023 12/31/2022 QoQ YoY Business $6,019,036 $5,908,330 $5,661,725 1.9% 6.3% Construction 1,446,764 1,539,566 1,361,095 -6.0% 6.3% Business Real Estate 3,719,306 3,647,168 3,406,981 2.0% 9.2% Personal Real Estate 3,026,041 3,024,639 2,918,078 .0% 3.7% Consumer 2,077,723 2,125,804 2,059,088 -2.3% 0.9% Revolving Home Equity 319,894 305,237 297,207 4.8% 7.6% Consumer Credit Card 589,913 574,829 584,000 2.6% 1.0% Overdrafts 6,802 3,753 14,957 81.2% -54.5% Total Loans $17,205,479 $17,129,326 $16,303,131 .4% 5.5% Period-End Balances $ in 000s 12/31/2023 9/30/2023 12/31/2022 QoQ YoY Business $5,861,229 $5,849,227 $5,478,241 .2% 7.0% Construction 1,523,682 1,508,850 1,268,900 1.0% 20.1% Business Real Estate 3,644,589 3,642,010 3,300,697 .1% 10.4% Personal Real Estate 3,027,664 2,992,500 2,886,686 1.2% 4.9% Consumer 2,117,268 2,102,281 2,089,912 .7% 1.3% Revolving Home Equity 310,282 304,055 293,681 2.0% 5.7% Consumer Credit Card 568,112 564,039 559,463 .7% 1.5% Overdrafts 5,258 5,341 7,428 -1.6% -29.2% Total Loans $17,058,084 $16,968,303 $15,885,008 .5% 7.4% QTD Average Balances

 
Real Estate - Business Loans: Office Outstanding Balances by Geography1 Real Estate - Business Loans % of Total Loans Owner – Occupied 6.8% Industrial 3.7% Office 2.8% Retail 2.1% Hotels 1.7% Multi-family 1.5% Farm 1.1% Senior living 1.1% Other .8% Total 21.6% COMMERCIAL REAL ESTATE BREAKDOWN 9 31.6% 13.2% 17.0% 9.9% 6.9% 7.9% 5.3% 4.9% Owner- occupied Office Industrial Retail Multi-family Hotels Farm Senior living 3.3% Other Real Estate - Business Loans $3.7 billion 1Geography determined by location of collateral. Includes only loans with a balance of $1 million and above, which represents 93% 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 93% of outstanding balance of the stabilized, non- owner occupied office loans Real Estate - Business Loans: Office Attributes as of December 31, 2023 53.4% 6.3% 19.5% 5.1% 7.6% MO TX KS 2.8% OK 2.0% IL CO 2.5% OH Other Midwest States 0.8% Other 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: .00% • Weighted Average LTV of Office Loans: 61.8%3 • Percent of loans at floating interest rate: 74.7%

 
10 INCOME STATEMENT HIGHLIGHTS $137 $175 $255 $217 4Q22 $391 $143 $163 $248 $228 3Q23 $391 $145 $142 $248 $235 4Q23 $393 Non-Interest Income (+) Net Interest Income (+) Non-Interest Expense (-) Pre-Tax, Pre-Provision Net Revenue (=) 4Q23 Comparison vs. 4Q22 (18.7)% vs. 3Q23 (13.1)% Pre-Tax, Pre-Provision Net Revenue (PPNR) $ in millions Revenue was up .5% over both 3Q and the same period last year. Expenses in 4Q23 include a $16MM FDIC special assessment1. $251 FDIC Special Assessment$16 See the non-GAAP reconciliation on page 25 1Accrued in 4Q23

 
4Q23 vs. 3Q23 4Q23 vs. 4Q22 $ in millions 4Q23 $ Change % Change $ Change % Change Net Interest Income $248.4 $(0.1) (0)% $(6.2 ) (2)% Non-Interest Income 144.9 1.9 1% 8.1 6% Non-Interest Expense 251.3 23.2 10% 34.5 16% Pre-Tax, Pre-Provision Net Revenue1 $142.0 $(21.4) (13)% $(32.7) (19)% Investment Securities Gains, Net $7.6 $3.3 77% $(1.3) (15)% Provision for Credit Losses $5.9 $(5.8) (50)% $(9.6) (62)% Net-Income Attributable to Commerce Bancshares, Inc. $109.2 $(11.4 ) (10)% $(22.4 ) (17)% For the three months ended 4Q23 3Q23 4Q23 vs. 3Q23 4Q22 4Q23 vs. 4Q22 Net Income per Common Share – Diluted $.84 $.92 (9)% $1.00 (16)% Net Yield on Interest Earning Assets 3.17% 3.11% 6 bps 3.18% (1) bp INCOME STATEMENT 111See the non-GAAP reconciliation on page 25

 
NON-INTEREST INCOME HIGHLIGHTS 12 4Q23 vs. 3Q23 4Q23 vs. 4Q22 $ in millions 4Q23 $ Change % Change $ Change % Change Bank Card Transaction Fees $47.9 $1.0 2% $3.3 7% Trust Fees 49.2 (.1) 0% 4.4 10% Deposit Account Charges and Other Fees 23.5 .4 2% 1.5 7% Capital Market Fees 4.3 .7 21% .9 26% Consumer Brokerage Services 3.6 (.2) (5)% (.9) (19)% Loan Fees and Sales 2.9 (.1) (3)% .3 12% Other 13.5 .1 1% (1.5) (10)% Total Non-Interest Income $144.9 $1.9 1% $8.1 6% Bank Card: Corporate card fees increased over Q3 due to lower rewards and network expense. Trust Fees: Increase over the prior year was driven by higher private client fees. Deposit Account Charges and Other Fees: Increase over the prior year was due to higher corporate cash management fees.

 
NON-INTEREST EXPENSE HIGHLIGHTS 13 4Q23 vs. 3Q23 4Q23 vs. 4Q22 $ in millions 4Q23 $ Change % Change $ Change % Change Salaries and Employee Benefits $147.5 $.7 0% $9.0 6% Net Occupancy 13.9 (.0) (0)% 2.2 18% Deposit Insurance 20.3 16.3 404% 17.2 544% Equipment 5.1 .4 9% .1 2% Supplies and Communication 5.2 .3 6% .8 18% Data Processing and Software 31.1 .4 1% 3.2 11% Marketing 6.5 .3 5% 1.1 20% Other 21.5 4.9 29% 1.1 5% Total Non-Interest Expense $251.3 $23.2 10% $34.5 16% Salaries and employee benefits: Flat compared to the prior quarter; increase over the prior year was due to higher full-time salaries and medical expense. Deposit Insurance: Includes a $16.0 million special FDIC assessment1. Data processing: Increase over the prior year was due to higher bank card fees expense and increased costs for service providers. Other: Increase over Q3; included higher deferred compensation fair value adjustments ($2.3 million). 1Accrued in 4Q23

 
14 LIQUIDITY AND CAPITAL

 
LIQUIDITY AND CAPITAL HIGHLIGHTS 15 • $2.2B of cash at Federal Reserve Bank (FRB) at Q4. • Final FHLB advances matured as planned. • AFS debt securities portfolio duration of 4.1 years. • Cash flows from maturities and paydowns of investments and resale agreements of approximately $2.1B expected over the next twelve months. – AFS debt securities of $1.8B – Securities purchased under agreements to resell of $325MM Liquidity / Borrowing • TCE/TA of 8.85%, an increase of 107 bps over Q3. Tier 1 leverage at 11.25%. • Purchased $20.2MM of common stock vs. $19.8MM in Q3. • AOCI loss decreased from $(1.2B) at Q3 to $(891MM) at Q4. • No Held-To-Maturity securities. Capital • QTD Average loan to deposit ratio of 68%. • Uninsured deposits1 of 35% of total deposits at Q4. • The remaining brokered deposits of $402MM, from the boost in short-term liquidity levels during Q2, matured in Q4. Deposits 1Excludes affiliate and collateralized deposits

 
2019 2020 2021 2022 3Q23 4Q23 $1.8 $2.3 $3.0 $2.8 $2.3 $2.3 3Q23 4Q23 $2.3 $2.5 DEPOSIT BALANCE TRENDS Segment view $ in billions 16 2019 2020 2021 2022 3Q23 4Q23 $7.8 $9.9 $12.0 $11.9 $10.5 $10.6 2019 2020 2021 2022 3Q23 4Q23 $10.2 $11.3 $12.8 $13.4 $12.1 $12.1 Commercial Consumer Wealth Average Balance Period End 3Q23 4Q23 $12.3 $12.4 Period EndAverage Balance Average Balance Period End Segment balances do not include brokered deposits. 2019 through 2022 are full year average balances. 3Q23 4Q23 $10.0 $10.4

 
DEPOSIT PORTFOLIO CHARACTERISTICS 17 Percent of accounts under $250,000 Percent of deposits ($) uninsured1 Average balance of accounts <$250,000 Average balance of accounts 99% 35% $13,404 $25,902 Uninsured Deposit Analysis $ in billions 12/31/2023 Uninsured Deposits $ 10.8 Less: Affiliate Deposits $ 0.3 Less: Collateralized Deposits $ 1.7 Uninsured deposits1 $ 8.8 Total Deposits $ 25.4 Uninsured deposits1 as % of Total Deposits 35% 1Excludes affiliate and collateralized deposits

 
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 begins 7/2024. • 3.25% floor contract with a notional value of $500 million. The contract begins 11/2024. • 3.0% floor contract with a notional value of $500 million. The contract begins 3/2025. • 2.75% floor contract with a notional value of $500 million. The contract begins 7/2025. WELL-POSITIONED FOR MULTIPLE RATE ENVIRONMENTS 18 Opportunities to enhance and protect NII in a rising rate environment. • Net yield on interest earning assets increased 6 bps over Q3 to 3.17%. • Loan yield increased 13 bps over Q3 to 6.15%. • Total deposit costs increased 13 bps over Q3 to 1.34%. • As of December 31, 2023, 57% of loans were variable rate, (73% commercial, 27% consumer). • Large core deposit base and historically low betas. Cost of Total Deposits & Deposit Beta: Prior & Current Fed Cycle 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 – 4Q2023) .03% 1.34% 25% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Quarter in the Fed Cycle Source: S&P Global Market Intelligence 1 Fed Rate increase cycle from 3Q2015 through 2Q2019, +225 bps; Fed Rate increase cycle from 4Q2021 through 4Q2023, +525 bps Effective Fed Funds Rate (3Q2015 - 2Q2019) Effective Fed Funds Rate (4Q2021 - Current) 3Q2015 / 4Q2021

 
Over 57% of total loans are variable; 65% of commercial loans have floating rates SUMMARY OF FIXED & FLOATING LOANS 40% 60% Business Total Loans: $6.0B Fixed Variable C om m er ci al 61% 39% Personal RE Total Loans: $3.0B C on su m er 100% HELOC Total Loans: $0.3B 41% 59% Business RE Total Loans: $3.7B 95% 5% Consumer Card Total Loans: $0.6B 73% 27% Consumer Total Loans: $2.1B 19 97% 3% Construction Total Loans: $1.4B As of 12/31/2023

 
8% 12% 54% 21% 5% Composition of AFS Portfolio Treasury & agency Municipal MBS Other asset backed Corporate HIGH QUALITY, HIGHLY LIQUID AND DIVERSE INVESTMENT PORTFOLIO 1Excludes inflation effect on TIPs; 2Tax equivalent yield QTD – Dec. 31, 2023 Avg Rate Duration (yrs) Treasury & agency1 1.12% 2.0 Municipal 1.94%2 5.4 MBS 2.05% 5.4 Other asset-backed 2.30% 1.0 Corporate 1.85% 3.4 Total 2.10% 4.1 20 Total available for sale securities Average balance: $9.6 billion, at fair value As of December 31, 2023

 
Average Loan to Deposit Ratio3 SOUND CAPITAL AND LIQUIDITY POSITION 21 Tier 1 Risk-Based Capital Ratio1 1S&P Global Market Intelligence, Information as of September 30, 2023 2Period-end balances, as of December 31, 2023 3Includes loans held for sale, for the quarter ended December 31, 2023 15.1% 15.0% 13.8% 13.0% 12.6% 12.1% 12.1% 12.0% 11.7% 11.5% 11.1% 11.1% 11.0% 10.9% 10.8% 10.8% 10.8% 10.5% 10.2% 10.1% CBSH PB CFR UBSI UCBI BOKF HWC SFNC OZK SSB FULT ONB FIBK PNFP ABCB CADE UMBF FNB WTFC ASB Peer Median: 11.1% Core Deposits $22.5 Billion2 Large, stable deposit base Loan to Deposit Ratio Total Deposits 68% Average Loan to Deposit Ratio184% 89%11% Core Deposits - Non-Interest Bearing - Interest Checking - Savings and Money Market Certificates of Deposits Commerce Peer Average

 
$5.6 $9.8 $8.0 $4.5 $14.5 4Q22 3Q23 4Q23 MAINTAINING STRONG CREDIT QUALITY 22 Net Loan Charge-Offs (NCOs) $ in millions NCOs- CBSH NCOs - Peer Average NCO/Average Loans1 - CBSH $150.1 $162.2 $162.4 $269.8 $304.6 4Q22 3Q23 4Q23 Allowance for Credit Losses on Loans (ACL) $ in millions ACL - CBSH ACL - Peer Average ACL / Total Loans - CBSH $8.3 $8.2 $7.3 $97.3 $108.0 4Q22 3Q23 4Q23 Non-Accrual Loans (NALs) $ in millions NALs - CBSH NALs - Peer Average 18.1x 19.8x 22.2x 4.3x 3.8x 4Q22 3Q23 4Q23 Allowance for Credit Losses on Loans (ACL) to NALs ACL / NALs - CBSH ACL / NALs - Peer AverageNALs / Total Loans - CBSH NCO/Average Loans1 – Peer Average .05% NALs / Total Loans – Peer Average .05% .04% .41% .42% ACL / Total Loans – Peer Average .92% .95% .94% 1.15% 1.22% .14% .23% .19% .08% .22% Percentages are illustrative and not to scale; Peer Banks include: ABCB, ASB, BOKF, CADE, CFR, FIBK, FNB, FULT, HWC, ONB, OZK, PB, PNFP, SFNC, SSB, UBSI, UCBI, UMBF, WTFC 1As a percentage of average loans (excluding loans held for sale)

 
ALLOCATION OF ALLOWANCE 23 CECL allowances reflect the economic and market outlook Sept. 30, 2023 Dec. 31, 2023 $ in millions Allowance for Credit Losses (ACL) % of Outstanding Loans Allowance for Credit Losses (ACL) % of Outstanding Loans Business $ 48.0 .81% $ 47.1 .78% Bus R/E 30.2 .83% 29.7 .80% Construction 32.4 2.10% 31.4 2.17% Commercial total $ 110.6 1.00% $ 108.2 .97% Consumer 11.4 .54% 11.6 .56% Consumer CC 27.5 4.79% 28.7 4.86% Personal R/E 10.9 .36% 12.0 .40% Revolving H/E 1.7 .54% 1.8 .55% Overdrafts .1 3.33% .1 1.62% Consumer total $ 51.6 .86% $ 54.2 .90% Allowance for credit losses on loans $ 162.2 .95% $ 162.4 .94% 1.47% 1.44% 1.35% 1.22% 1.07% 0.88% 0.90% 0.92% 0.96% 0.94% 0.95%0.94% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% $100 $150 $200 $250 1.14% 1Q $240.7 2Q $236.4 3Q $220.8 4Q $200.5 1Q $172.4 1.10% 2Q $162.8 3Q $150.0 0.99% 4Q $134.7 0.87% 1Q $138.0 2Q $143.4 3Q $150.1 $139.6 $159.3 1Q $158.7 0.95% 2Q4Q1/1 3Q $162.4 $171.7 4Q $162.2 Allowance for Credit Losses (ACL) on Loans ACL - Loans (left) ACL / Total Loans (right) $ in millions 202220212020 2023

 
Quick Facts: Small Business Investment Company (SBIC) founded in 1959 Nationwide footprint with Greater Midwest Focus 36 Portfolio Companies Representing $885.8 million in Revenue Over 3,100 Employees Fair Value as of December 31, 2023: $176.7 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 24

 
NON-GAAP RECONCILIATIONS 25 For The Three Months Ended (DOLLARS IN THOUSANDS) Dec. 31, 2023 Sep. 30, 2023 Dec. 31, 2022 A Net Interest Income $ 248,421 $ 248,547 $ 254,641 B Non-Interest Income $ 144,879 $ 142,949 $ 136,825 C Non-Interest Expense $ 251,254 $ 228,010 $ 216,740 Pre-Provision Net Revenue (A+B-C) $ 142,046 $ 163,486 $ 174,726 Pre-tax, Pre-provision Net Revenue