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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 17, 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 October 17, 2024 by Commerce Bancshares, Inc. announcing Third Quarter 2024 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 17, 2024
99.2    Slide presentation for investors and analysts dated October 17, 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: October 17, 2024


EX-99.1 2 cbsh9302024ex991.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, October 17, 2024

COMMERCE BANCSHARES, INC. REPORTS
THIRD QUARTER EARNINGS PER SHARE OF $1.07

Commerce Bancshares, Inc. announced earnings of $1.07 per share for the three months ended September 30, 2024, compared to $.92 per share in the same quarter last year and $1.07 per share in the second quarter of 2024. Net income for the third quarter of 2024 amounted to $138.0 million, compared to $120.6 million in the third quarter of 2023 and $139.6 million in the prior quarter.

For the nine months ended September 30, 2024, earnings per share totaled $3.00, compared to $2.80 for the first nine months of 2023. Net income amounted to $390.2 million for the nine months ended September 30, 2024, compared to $367.8 million in the comparable period last year. For the year to date, the return on average assets was 1.71%, and the return on average equity was 16.92%.

In announcing these results, John Kemper, President and Chief Executive Officer, said, “We are pleased with our third quarter results, which exemplify our diversified operating model and the growth mindset of our team. Our net interest margin, excluding the impact of inflation income on treasury bonds, expanded four basis points from the prior quarter. Interest bearing deposit costs continue to flatten, increasing just one basis point this quarter when compared to the previous quarter, while average deposits increased slightly. Trust fees were strong and experienced continued growth, up 11.1% over the same period last year. Total non-interest income was 37.7% of total revenue. During the quarter, we purchased $976.1 million in available for sale debt securities, indicative of lower loan demand and the relatively short duration of our investment securities portfolio.

“Credit quality remains excellent, and we continue to maintain strong levels of capital. Non-accrual loans were .11% of total loans, flat when compared to the previous quarter. Our tangible common equity to tangible assets ratio increased to 10.47% as interest rates declined, and book value per share increased 9.9% during the quarter.”


Third Quarter 2024 Financial Highlights:

•Net interest income was $262.4 million, a $102 thousand increase over the prior quarter. The net yield on interest earning assets decreased five basis points to 3.50%.

•Non-interest income totaled $159.0 million, an increase of $16.1 million over the same quarter last year.

•Trust fees grew $5.5 million, or 11.1%, compared to the same period last year, mostly due to higher private client fees.

•Non-interest expense totaled $237.6 million, an increase of $9.6 million, or 4.2%, compared to the same quarter last year.
1
Exhibit 99.1

•Average loan balances totaled $17.0 billion, a decrease of .9% compared to the prior quarter.

•Total average available for sale debt securities decreased $87.8 million from the prior quarter to $8.7 billion, at fair value. During the third quarter of 2024, the unrealized loss on available for sale debt securities decreased $287.4 million to $786.4 million, at period end.

•Total average deposits increased $65.3 million, or .3%, compared to the prior quarter. The average rate paid on interest bearing deposits in the current quarter was 2.00%.

•The ratio of annualized net loan charge-offs to average loans was .22% compared to .23% in the prior quarter.

•The allowance for credit losses on loans increased $2.3 million during the third quarter of 2024 to $160.8 million, and the ratio of the allowance for credit losses on loans to total loans was .94%, at September 30, 2024, compared to .92% at June 30, 2024.

•Total assets at September 30, 2024 were $31.5 billion, an increase of $924.2 million, or 3.0%, compared to the prior quarter.

•For the quarter, the return on average assets was 1.80%, the return on average equity was 16.81%, and the efficiency ratio was 56.3%.

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. Beyond the Midwest, Commerce also maintains commercial offices in Dallas, Houston, Cincinnati, Nashville, Des Moines, Indianapolis, and Grand Rapids and wealth offices in Dallas, Houston, and Naples. Commerce delivers high-touch service and sophisticated financial solutions at regional branches, commercial and wealth offices, ATMs, online, mobile and through a 24/7 customer service line.

This financial news release and the supplementary Earnings Highlights presentation are available on the Company’s website at https://investor.commercebank.com/news-info/financial-news-releases/default.aspx.
* * * * * * * * * * * * * * *
For additional information, contact
Matt Burkemper, Investor Relations
(314) 746-7485
www.commercebank.com
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, 2024 Jun. 30, 2024 Sep. 30, 2023 Sep. 30, 2024 Sep. 30, 2023
FINANCIAL SUMMARY
Net interest income $262,351  $262,249  $248,547  $773,599  $749,708 
Non-interest income 159,025  152,244  142,949  460,117  428,166 
Total revenue 421,376  414,493  391,496  1,233,716  1,177,874 
Investment securities gains (losses) 3,872  3,233  4,298  6,846  7,384 
Provision for credit losses 9,140  5,468  11,645  19,395  29,572 
Non-interest expense 237,600  232,214  228,010  715,511  679,728 
Income before taxes 178,508  180,044  156,139  505,656  475,958 
Income taxes 38,245  38,602  33,439  108,499  102,242 
Non-controlling interest expense 2,256  1,889  2,104  6,934  5,879 
Net income attributable to Commerce Bancshares, Inc. $138,007  $139,553  $120,596  $390,223  $367,837 
Earnings per common share:    
Net income — basic $1.07  $1.07  $0.92  $3.01  $2.80 
Net income — diluted $1.07  $1.07  $0.92  $3.00  $2.80 
Effective tax rate 21.70  % 21.67  % 21.71  % 21.76  % 21.75  %
Fully-taxable equivalent net interest income $264,638  $264,578  $250,962  $780,528  $756,130 
Average total interest earning assets (1)
 $30,051,845  $30,016,060  $31,974,945  $ 30,144,221  $31,986,696 
Diluted wtd. average shares outstanding 127,995,072  128,610,693  130,008,840  128,595,025  130,227,782 
RATIOS    
Average loans to deposits (2)
 69.93  % 70.73  % 66.39  % 70.17  % 65.85  %
Return on total average assets 1.80  1.86  1.49  1.71  1.53 
Return on average equity (3)
 16.81  18.52  17.73  16.92  18.42 
Non-interest income to total revenue 37.74  36.73  36.51  37.30  36.35 
Efficiency ratio (4)
 56.31  55.95  58.15  57.92  57.62 
Net yield on interest earning assets 3.50  3.55  3.11  3.46  3.16 
EQUITY SUMMARY    
Cash dividends per share $.270  $.270  $.257  $.810  $.771 
Cash dividends on common stock $34,794  $34,960  $33,657  $104,894  $101,160 
Book value per share (5)
 $26.90  $24.48  $19.90 
Market value per share (5)
 $59.40  $55.78  $45.70 
High market value per share $65.86  $57.48  $52.37 
Low market value per share $54.88  $50.92  $44.10 
Common shares outstanding (5)
 128,378,890  129,004,231  130,586,153 
Tangible common equity to tangible assets (6)
 10.47  % 9.82  % 7.78  %
Tier I leverage ratio 12.31  % 12.13  % 10.87  %
OTHER QTD INFORMATION  
Number of bank/ATM locations 244  247  266 
Full-time equivalent employees 4,711  4,724  4,714 
(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 Nine Months Ended
Sep. 30, 2024 Jun. 30, 2024 Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 Sep. 30, 2024 Sep. 30, 2023
Interest income $372,068  $369,363  $358,721  $362,609  $361,162  $1,100,152  $1,018,682 
Interest expense 109,717  107,114  109,722  114,188  112,615  326,553  268,974 
Net interest income 262,351  262,249  248,999  248,421  248,547  773,599  749,708 
Provision for credit losses 9,140  5,468  4,787  5,879  11,645  19,395  29,572 
Net interest income after credit losses 253,211  256,781  244,212  242,542  236,902  754,204  720,136 
NON-INTEREST INCOME      
Trust fees 54,689  52,291  51,105  49,154  49,207  158,085  141,800 
Bank card transaction fees 47,570  47,477  46,930  47,878  46,899  141,977  143,278 
Deposit account charges and other fees 25,380  25,325  24,151  23,517  23,090  74,856  67,475 
Capital market fees 5,995  4,760  3,892  4,269  3,524  14,647  9,831 
Consumer brokerage services 4,619  4,478  4,408  3,641  3,820  13,505  13,582 
Loan fees and sales 3,444  3,431  3,141  2,875  2,966  10,016  8,290 
Other 17,328  14,482  15,221  13,545  13,443  47,031  43,910 
Total non-interest income 159,025  152,244  148,848  144,879  142,949  460,117  428,166 
INVESTMENT SECURITIES GAINS (LOSSES), NET 3,872  3,233  (259) 7,601  4,298  6,846  7,384 
NON-INTEREST EXPENSE      
Salaries and employee benefits 153,122  149,120  151,801  147,456  146,805  454,043  436,607 
Data processing and software 32,194  31,529  31,153  31,141  30,744  94,876  87,617 
Net occupancy 13,411  12,544  13,574  13,927  13,948  39,529  39,702 
Professional and other services 8,830  8,617  8,648  9,219  8,293  26,095  26,979 
Marketing 7,278  5,356  4,036  6,505  6,167  16,670  18,006 
Equipment 5,286  5,091  5,010  5,137  4,697  15,387  14,411 
Supplies and communication 4,963  4,636  4,744  5,242  4,963  14,343  14,178 
Deposit Insurance 2,930  2,354  8,017  20,304  4,029  13,301  12,859 
Other 9,586  12,967  18,714  12,323  8,364  41,267  29,369 
Total non-interest expense 237,600  232,214  245,697  251,254  228,010  715,511  679,728 
Income before income taxes 178,508  180,044  147,104  143,768  156,139  505,656  475,958 
Less income taxes 38,245  38,602  31,652  32,307  33,439  108,499  102,242 
Net income 140,263  141,442  115,452  111,461  122,700  397,157  373,716 
Less non-controlling interest expense (income) 2,256  1,889  2,789  2,238  2,104  6,934  5,879 
Net income attributable to Commerce Bancshares, Inc. $138,007  $139,553  $112,663  $109,223  $120,596  $390,223  $367,837 
Net income per common share — basic $1.07  $1.07  $0.87  $0.84  $0.92  $3.01  $2.80 
Net income per common share — diluted $1.07  $1.07  $0.86  $0.84  $0.92  $3.00  $2.80 
OTHER INFORMATION
Return on total average assets 1.80  % 1.86  % 1.48  % 1.38  % 1.49  % 1.71  % 1.53  %
Return on average equity (1)
 16.81  18.52  15.39  16.48  17.73  16.92  18.42 
Efficiency ratio (2)
 56.31  55.95  61.67  63.80  58.15  57.92  57.62 
Effective tax rate 21.70  21.67  21.93  22.83  21.71  21.76  21.75 
Net yield on interest earning assets 3.50  3.55  3.33  3.17  3.11  3.46  3.16 
Fully-taxable equivalent net interest income $264,638  $264,578  $251,312  $250,547  $250,962  $780,528  $756,130 
(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 income statement above reflects the reclassification of non-interest income of $1.1 million and $1.5 million from other non-interest income to capital market fees for the third quarter of 2023 and the first nine months of 2023, respectively.

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

(Unaudited)
(In thousands)		 Sep. 30, 2024 Jun. 30, 2024 Sep. 30, 2023
ASSETS      
Loans
     Business $ 6,048,328  $ 6,090,724  $ 5,908,330 
     Real estate — construction and land 1,381,607  1,396,515  1,539,566 
     Real estate — business 3,586,999  3,572,539  3,647,168 
     Real estate — personal 3,043,391  3,055,182  3,024,639 
     Consumer 2,108,281  2,145,609  2,125,804 
     Revolving home equity 342,376  331,381  305,237 
     Consumer credit card 574,746  566,925  574,829 
     Overdrafts 4,272  4,190  3,753 
Total loans 17,090,000  17,163,065  17,129,326 
Allowance for credit losses on loans (160,839) (158,557) (162,244)
Net loans 16,929,161  17,004,508  16,967,082 
Loans held for sale 1,707  2,930  5,120 
Investment securities:
Available for sale debt securities 9,167,681  8,534,271  9,860,828 
Trading debt securities 42,645  45,499  35,564 
Equity securities 57,115  113,584  12,212 
Other securities 216,543  223,798  230,792 
Total investment securities 9,483,984  8,917,152  10,139,396 
Federal funds sold 10  —  2,735 
Securities purchased under agreements to resell 475,000  475,000  450,000 
Interest earning deposits with banks 2,642,048  2,215,057  1,847,641 
Cash and due from banks 507,941  329,692  358,010 
Premises and equipment — net 469,986  467,256  460,830 
Goodwill 146,539  146,539  146,539 
Other intangible assets — net 13,722  13,801  14,432 
Other assets 823,494  997,423  984,907 
Total assets $ 31,493,592  $ 30,569,358  $ 31,376,692 
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Deposits:      
Non-interest bearing $ 7,396,153  $ 7,492,751  $ 7,961,402 
Savings, interest checking and money market 15,216,557  14,367,710  14,154,275 
Certificates of deposit of less than $100,000 1,113,962  1,010,251  1,210,169 
Certificates of deposit of $100,000 and over 1,511,120  1,408,548  1,764,611 
Total deposits 25,237,792  24,279,260  25,090,457 
Federal funds purchased and securities sold under agreements to repurchase 2,182,229  2,551,399  2,745,181 
Other borrowings 10,201  3,984  503,589 
Other liabilities 609,831  576,380  438,199 
Total liabilities 28,040,053  27,411,023  28,777,426 
Stockholders’ equity:      
Common stock 655,322  655,322  629,319 
Capital surplus 3,154,300  3,153,107  2,924,211 
Retained earnings 338,512  235,299  298,297 
Treasury stock (139,149) (98,176) (76,888)
Accumulated other comprehensive income (loss) (576,904) (807,817) (1,193,534)
Total stockholders’ equity 3,432,081  3,137,735  2,581,405 
Non-controlling interest 21,458  20,600  17,861 
Total equity 3,453,539  3,158,335  2,599,266 
Total liabilities and equity $ 31,493,592  $ 30,569,358  $ 31,376,692 

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

(Unaudited)
(In thousands)		 For the Three Months Ended
Sep. 30, 2024 Jun. 30, 2024 Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023
ASSETS:
Loans:
Business $ 5,966,797  $ 5,980,364  $ 5,873,525  $ 5,861,229  $ 5,849,227 
Real estate — construction and land 1,400,563  1,471,504  1,472,554  1,523,682  1,508,850 
Real estate — business 3,580,772  3,666,057  3,727,643  3,644,589  3,642,010 
Real estate — personal 3,047,563  3,044,943  3,031,193  3,027,664  2,992,500 
Consumer 2,129,483  2,127,650  2,082,490  2,117,268  2,102,281 
Revolving home equity 335,817  326,204  322,074  310,282  304,055 
Consumer credit card 559,410  552,896  562,892  568,112  564,039 
Overdrafts 5,460  4,856  7,696  5,258  5,341 
Total loans
17,025,865  17,174,474  17,080,067  17,058,084  16,968,303 
Allowance for credit losses on loans (158,003) (159,791) (161,891) (161,932) (158,335)
Net loans 16,867,862  17,014,683  16,918,176  16,896,152  16,809,968 
Loans held for sale 2,448  2,455  2,149  5,392  5,714 
Investment securities:
U.S. government and federal agency obligations 1,888,985  1,201,954  851,656  889,390  986,284 
Government-sponsored enterprise obligations 55,583  55,634  55,652  55,661  55,676 
State and municipal obligations 856,620  1,069,934  1,330,808  1,363,649  1,391,541 
Mortgage-backed securities 5,082,091  5,553,656  5,902,328  6,022,502  6,161,348 
Asset-backed securities 1,525,593  1,785,598  2,085,050  2,325,089  2,553,562 
Other debt securities
224,528  364,828  503,204  510,721  514,787 
Unrealized gain (loss) on debt securities (961,695) (1,272,127) (1,274,125) (1,595,845) (1,458,141)
Total available for sale debt securities 8,671,705  8,759,477  9,454,573  9,571,167  10,205,057 
Trading debt securities
47,440  46,565  40,483  37,234  35,044 
Equity securities 85,118  127,584  12,768  12,249  12,230 
Other securities 217,377  228,403  221,695  222,378  237,518 
Total investment securities 9,021,640  9,162,029  9,729,519  9,843,028  10,489,849 
Federal funds sold 12  1,612  599  1,194  2,722 
Securities purchased under agreements to resell 474,997  303,586  340,934  450,000  712,472 
Interest earning deposits with banks 2,565,188  2,099,777  1,938,381  2,387,415  2,337,744 
Other assets 1,648,321  1,651,808  1,715,716  1,797,849  1,750,222 
Total assets $ 30,580,468  $ 30,235,950  $ 30,645,474  $ 31,381,030  $ 32,108,691 
LIABILITIES AND EQUITY:
Non-interest bearing deposits $ 7,284,834  $ 7,297,955  $ 7,328,603  $ 7,748,654  $ 7,939,190 
Savings 1,303,675  1,328,989  1,333,983  1,357,733  1,436,149 
Interest checking and money market 13,242,398  13,162,118  13,215,270  13,166,783  13,048,199 
Certificates of deposit of less than $100,000 1,055,683  1,003,798  976,804  1,097,224  1,423,965 
Certificates of deposit of $100,000 and over 1,464,143  1,492,592  1,595,310  1,839,057  1,718,126 
Total deposits 24,350,733  24,285,452  24,449,970  25,209,451  25,565,629 
Borrowings:
Federal funds purchased 206,644  265,042  328,216  473,534  508,851 
Securities sold under agreements to repurchase 2,351,870  2,254,849  2,511,959  2,467,118  2,283,020 
Other borrowings 496  838  76  179,587  685,222 
Total borrowings 2,559,010  2,520,729  2,840,251  3,120,239  3,477,093 
Other liabilities 405,490  399,080  410,310  421,402  367,741 
Total liabilities 27,315,233  27,205,261  27,700,531  28,751,092  29,410,463 
Equity 3,265,235  3,030,689  2,944,943  2,629,938  2,698,228 
Total liabilities and equity $ 30,580,468  $ 30,235,950  $ 30,645,474  $ 31,381,030  $ 32,108,691 

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

(Unaudited) For the Three Months Ended
Sep. 30, 2024 Jun. 30, 2024 Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023
ASSETS:  
Loans:  
Business (1)
 6.17  % 6.11  % 6.07  % 5.91  % 5.77  %
Real estate — construction and land 8.44  8.36  8.40  8.34  8.17 
Real estate — business 6.28  6.26  6.26  6.18  6.13 
Real estate — personal 4.10  4.04  3.95  3.85  3.73 
Consumer 6.64  6.56  6.40  6.21  5.97 
Revolving home equity 7.69  7.68  7.70  7.70  7.76 
Consumer credit card 14.01  13.96  14.11  13.83  13.77 
Overdrafts —  —  —  —  — 
Total loans 6.35  6.30  6.27  6.15  6.02 
Loans held for sale 6.34  7.54  7.49  9.93  10.55 
Investment securities:  
U.S. government and federal agency obligations 3.68  5.04  2.08  2.32  2.31 
Government-sponsored enterprise obligations 2.37  2.39  2.39  2.36  2.36 
State and municipal obligations (1)
 2.00  2.00  1.97  1.94  1.95 
Mortgage-backed securities 1.95  2.09  2.19  2.05  2.06 
Asset-backed securities 2.66  2.50  2.39  2.30  2.20 
Other debt securities 2.07  2.01  1.93  1.85  1.75 
Total available for sale debt securities 2.41  2.50  2.18  2.10  2.08 
Trading debt securities (1)
 4.52  4.95  5.30  5.05  5.11 
Equity securities (1)
 4.44  2.82  25.64  27.47  23.06 
Other securities (1)
 6.09  13.20  13.04  8.60  13.13 
Total investment securities 2.52  2.75  2.44  2.27  2.33 
Federal funds sold —  6.74  6.71  6.65  6.56 
Securities purchased under agreements to resell 3.53  3.21  1.93  1.64  2.08 
Interest earning deposits with banks 5.43  5.48  5.48  5.47  5.39 
Total interest earning assets 4.96  4.98  4.78  4.62  4.51 
LIABILITIES AND EQUITY:  
Interest bearing deposits:  
Savings .07  .06  .06  .05  .05 
Interest checking and money market 1.74  1.73  1.69  1.57  1.33 
Certificates of deposit of less than $100,000 4.17  4.22  4.20  4.21  4.32 
Certificates of deposit of $100,000 and over 4.51  4.55  4.56  4.55  4.37 
Total interest bearing deposits 2.00  1.99  1.97  1.93  1.76 
Borrowings:  
Federal funds purchased 5.38  5.42  5.42  5.40  5.33 
Securities sold under agreements to repurchase 3.56  3.44  3.43  3.25  3.20 
Other borrowings 4.81  3.84  —  5.45  5.30 
Total borrowings 3.71  3.65  3.66  3.71  3.93 
Total interest bearing liabilities 2.22  % 2.21  % 2.21  % 2.20  % 2.12  %
Net yield on interest earning assets 3.50  % 3.55  % 3.33  % 3.17  % 3.11  %
(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, 2024 Jun. 30, 2024 Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 Sep. 30, 2024 Sep. 30, 2023
ALLOWANCE FOR CREDIT LOSSES ON LOANS
Balance at beginning of period $158,557  $160,465  $162,395  $162,244  $158,685  $162,395  $150,136 
     Provision for credit losses on loans 11,861  7,849  6,947  8,170  13,343  26,657  35,155 
     Net charge-offs (recoveries):
        Commercial portfolio:
     Business 114  622  23  96  2,613  759  3,008 
     Real estate — construction and land —  —  —  —  —  —  (115)
     Real estate — business (7) (8) (141) 128  (15) (156) (24)
107  614  (118) 224  2,598  603  2,869 
        Personal banking portfolio:
     Consumer credit card 6,273  6,746  6,435  5,325  4,716  19,454  13,728 
     Consumer 2,759  1,804  1,983  1,903  1,797  6,546  4,345 
     Overdraft 464  521  557  588  683  1,542  2,178 
     Real estate — personal 128  79  24  (11) (9) 231  (26)
     Revolving home equity (152) (7) (4) (10) (1) (163) (47)
9,472  9,143  8,995  7,795  7,186  27,610  20,178 
     Total net loan charge-offs 9,579  9,757  8,877  8,019  9,784  28,213  23,047 
Balance at end of period $160,839  $158,557  $160,465  $162,395  $162,244  $160,839  $162,244 
LIABILITY FOR UNFUNDED LENDING COMMITMENTS $17,984  $20,705  $23,086  $25,246  $27,537 
NET CHARGE-OFF RATIOS (1)
Commercial portfolio:
     Business .01  % .04  % —  % .01  % .18  % .02  % .07  %
     Real estate — construction and land —  —  —  —  —  —  (.01)
     Real estate — business —  —  (.02) .01  —  (.01) — 
—  .02  —  .01  .09  .01  .04 
Personal banking portfolio:
     Consumer credit card 4.46  4.91  4.60  3.72  3.32  4.65  3.28 
     Consumer .52  .34  .38  .36  .34  .41  .28 
     Overdraft 33.81  43.15  29.11  44.37  50.73  34.32  60.54 
     Real estate — personal .02  .01  —  —  —  .01  — 
     Revolving home equity (.18) (.01) —  (.01) —  (.07) (.02)
.62  .61  .60  .51  .48  .61  .46 
Total .22  % .23  % .21  % .19  % .23  % .22  % .18  %
CREDIT QUALITY RATIOS
Non-accrual loans to total loans .11  % .11  % .03  % .04  % .05  %
Allowance for credit losses on loans to total loans .94  .92  .93  .94  .95 
NON-ACCRUAL AND PAST DUE LOANS
  Non-accrual loans:
     Business $354  $504  $1,038  $3,622  $6,602 
     Real estate — business 14,944  15,050  1,246  60  76 
     Real estate — personal 1,144  1,772  1,523  1,653  1,531 
     Revolving home equity 1,977  1,977  1,977  1,977  — 
   Total 18,419  19,303  5,784  7,312  8,209 
Loans past due 90 days and still accruing interest $21,986  $18,566  $20,281  $21,864  $18,580 
(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 Third Quarter Results
September 30, 2024
For the quarter ended September 30, 2024, net income amounted to $138.0 million, compared to $139.6 million in the previous quarter and $120.6 million in the same quarter last year. The decrease in net income compared to the previous quarter was primarily the result of increases in the provision for credit losses and non-interest expense, partly offset by higher non-interest income. The net yield on interest earning assets decreased five basis points compared to the previous quarter to 3.50%. Average deposits increased $65.3 million over the prior quarter, while average loans and available for sale debt securities, at fair value, declined $148.6 million and $87.8 million, respectively. For the quarter, the return on average assets was 1.80%, the return on average equity was 16.81%, and the efficiency ratio was 56.3%.

Balance Sheet Review
During the 3rd quarter of 2024, average loans totaled $17.0 billion, a decrease of $148.6 million compared to the prior quarter, and an increase of $57.6 million, or .3%, over the same quarter last year. Compared to the previous quarter, average balances of business real estate and construction loans declined $85.3 million and $70.9 million, respectively. During the current quarter, the Company sold certain fixed rate personal real estate loans totaling $22.6 million, compared to $18.2 million in the prior quarter.

Total average available for sale debt securities decreased $87.8 million compared to the previous quarter to $8.7 billion, at fair value. The decrease in debt securities was mainly the result of lower average balances of mortgage-backed, asset-backed, state and municipal obligations, and other debt securities, partly offset by higher average balances of U.S. government and federal agency obligations. During the 3rd quarter of 2024, the unrealized loss on available for sale debt securities decreased $287.4 million to $786.4 million, at period end. Also, during the 3rd quarter of 2024, purchases of available for sale debt securities totaled $976.1 million with a weighted average yield of approximately 3.87%, and sales, maturities and pay downs of available for sale debt securities were $630.3 million. At September 30, 2024, the duration of the available for sale investment portfolio was 4.0 years, and maturities and pay downs of approximately $1.6 billion are expected to occur during the next 12 months.

Total average deposits increased $65.3 million this quarter compared to the previous quarter. The increase in deposits mostly resulted from growth of $80.3 million in interest checking and money market average balances. Compared to the previous quarter, total average commercial deposits grew $250.3 million, while average consumer and trust deposits declined $117.6 million and $82.2 million, respectively. The average loans to deposits ratio was 69.9% in the current quarter and 70.7% in the prior quarter. The Company’s average borrowings, which
included average customer repurchase agreements of $2.4 billion, increased $38.3 million to $2.6 billion in the 3rd quarter of 2024.

Net Interest Income
Net interest income in the 3rd quarter of 2024 amounted to $262.4 million, an increase of $102 thousand over the previous quarter. On a fully taxable-equivalent (FTE) basis, net interest income for the current quarter increased $60 thousand over the previous quarter to $264.6 million. The increase in net interest income was mostly due to higher interest income on loans and deposits with banks, partly offset by lower interest income on investment securities and higher interest expense on deposits and borrowings. The net yield (FTE) on earning assets decreased to 3.50%, from 3.55% in the prior quarter.

Compared to the previous quarter, interest income on loans (FTE) increased $2.7 million, due to higher average rates earned on all loan categories, partly offset by lower balances on construction and business real estate loans. The average yield (FTE) on the loan portfolio increased five basis points to 6.35% this quarter.

Interest income on investment securities (FTE) decreased $8.1 million compared to the prior quarter, mostly due to lower rates earned on U.S. government and federal agency, mortgage-backed and other securities. Interest income earned on U.S. government and federal agency securities increased due to higher average balances, partly offset by lower rates, which included the impact of $5.5 million in lower inflation income from Treasury inflation-protected securities compared to previous quarter. Additionally, the Company recorded a $286 thousand adjustment to premium amortization at September 30, 2024, which decreased interest income to reflect slightly faster forward prepayment speed estimates on mortgage-backed securities. This decrease was lower than the $740 thousand adjustment increasing interest income in the prior quarter. The average yield (FTE) on total investment securities was 2.52% in the current quarter, compared to 2.75% in the previous quarter.

Compared to the previous quarter, interest income on deposits with banks increased $6.4 million, due to higher average balances of $465.4 million. Interest earned on securities purchased under agreements to resell increased $1.8 million due to higher average balances and rates.

Interest expense increased $2.6 million compared to the previous quarter, mainly due to higher average borrowing rates and average interest bearing deposit balances. Interest expense on borrowings increased $994 thousand due to higher average rates and balances of customer repurchase agreements, partly offset by lower average balances of federal funds purchased. Interest expense on deposits increased $1.6 million mostly due to higher average balances.
9
Exhibit 99.1
COMMERCE BANCSHARES, INC.                                
Management Discussion of Third Quarter Results
September 30, 2024
The average rate paid on interest bearing deposits totaled 2.00% in the current quarter compared to 1.99% in the prior quarter. The overall rate paid on interest bearing liabilities was 2.22% in the current quarter and 2.21% in the prior quarter.

Non-Interest Income
In the 3rd quarter of 2024, total non-interest income amounted to $159.0 million, an increase of $16.1 million, or 11.2%, over the same period last year and an increase of $6.8 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, capital market fees, deposit account fees, and gains on the sales of real estate, partly offset by lower tax credit sales income. Additionally, an increase of $1.8 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. The increase in non-interest income compared to the prior quarter was mainly due to higher trust fees, capital market fees, and gains on the sales of real estate.

Total net bank card fees in the current quarter increased $671 thousand, or 1.4%, compared to the same period last year, and increased $93 thousand compared to the prior quarter. Net corporate card fees increased $234 thousand, or .9%, compared to the same quarter of last year mainly due to lower rewards expense. Net merchant fees decreased $378 thousand, or 6.5%, mainly due to higher network expense. Net debit card fees increased $288 thousand, or 2.6%, while net credit card fees increased $527 thousand, or 15.4%, mostly due to higher interchange fees and lower rewards expense. Total net bank card fees this quarter were comprised of fees on corporate card ($26.8 million), debit card ($11.4 million), merchant ($5.5 million) and credit card ($4.0 million) transactions.

In the current quarter, trust fees increased $5.5 million, or 11.1%, over the same period last year, mostly resulting from higher private client fees. Compared to the same period last year, deposit account fees increased $2.3 million, or 9.9%, mostly due to higher corporate cash management fees, while capital market fees increased $2.5 million, or 70.1%, mostly due to higher trading securities income.

Other non-interest income increased compared to the same period last year primarily due to higher gains on the sales of real estate of $3.4 million and the deferred compensation adjustment previously mentioned, partly offset by lower tax credit sales income of $1.4 million. For the 3rd quarter of 2024, non-interest income comprised 37.7% of the Company’s total revenue.

Investment Securities Gains and Losses
The Company recorded net securities gains of $3.9 million in the current quarter, compared to gains of $3.2 million in the prior quarter and gains of $4.3 million in the 3rd quarter of 2023. Net securities gains in the current quarter resulted from net gains of $9.5 million on the Company’s portfolio of private equity investments, driven by $7.4 million of fair value adjustments. These net gains were partly offset by losses of $5.4 million on sales of available for sale debt securities and a loss of $417 thousand resulting from the Company’s sale of 217,872 shares of Visa Class A common stock (converted from 54,468 shares of Visa Class C common stock). As of September 30, 2024, the Company has sold all of the Visa Class C shares it received from the Visa exchange offer.

Non-Interest Expense
Non-interest expense for the current quarter amounted to $237.6 million, compared to $228.0 million in the same period last year and $232.2 million in the prior quarter. The increase in non-interest expense compared to the same period last year was mainly due to higher salaries and employee benefits expense, data processing and software expense, and marketing expense, partly offset by lower deposit insurance expense. The increase in non-interest expense compared to the prior quarter was mainly due to higher salaries and employee benefits expense and marketing expense, partly offset by a donation to a related charitable foundation recorded in the prior quarter that did not reoccur in the current quarter.

Compared to the 3rd quarter of last year, salaries and employee benefits expense increased $6.3 million, or 4.3%, mostly due to higher full-time salaries expense of $3.5 million, and incentive compensation of $2.2 million. Full-time equivalent employees totaled 4,711 and 4,714 at September 30, 2024 and 2023, respectively.

Compared to the same period last year, data processing and software expense increased $1.5 million due to increased costs for service providers, and marketing expense increased $1.1 million. These increases were partly offset by a decrease in deposit insurance expense of $1.1 million, which was partially the result of a $525 thousand accrual adjustment to the FDIC’s special assessment.

Income Taxes
The effective tax rate for the Company was 21.7% in the current quarter, unchanged from both the previous quarter, and the 3rd quarter of 2023.

Credit Quality
Net loan charge-offs in the 3rd quarter of 2024 amounted to $9.6 million, compared to $9.8 million in both the prior quarter and the same period last year. The ratio of annualized net loan charge-offs to total average loans was .22% in the current quarter, and .23% in both the previous quarter and the same quarter of last year.
10
Exhibit 99.1
COMMERCE BANCSHARES, INC.                                
Management Discussion of Third Quarter Results
September 30, 2024
Compared to the prior quarter, net loan charge-offs on business and consumer credit card loans decreased $508 thousand and $473 thousand, respectively, while consumer loan net charge-offs increased $955 thousand.

In the 3rd quarter of 2024, annualized net loan charge-offs on average consumer credit card loans were 4.46%, compared to 4.91% in the previous quarter and 3.32% in the same quarter last year. Consumer loan net charge-offs were .52% of average consumer loans in the current quarter, and .34% in both the prior quarter and the same quarter last year.

At September 30, 2024, the allowance for credit losses on loans totaled $160.8 million, or .94% of total loans, and increased $2.3 million compared to the prior quarter. Additionally, the liability for unfunded lending commitments at September 30, 2024 was $18.0 million, a decrease of $2.7 million compared to the liability at June 30, 2024.

At September 30, 2024, total non-accrual loans amounted to $18.4 million, a decrease of $884 thousand compared to the previous quarter. At September 30, 2024, the balance of non-accrual loans, which represented .11% of loans outstanding, included business loans of $354 thousand, revolving home equity loans of $2.0 million, personal real estate loans of $1.1 million, and business real estate loans of $14.9 million. Loans more than 90 days past due and still accruing interest totaled $22.0 million at September 30, 2024.

Other
During the 3rd quarter of 2024, the Company paid a cash dividend of $.27 per common share, representing a 5.1% increase over the same period last year. The Company purchased 699,919 shares of treasury stock during the current quarter at an average price of $62.39.

Forward Looking Information
This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions, and other statements that are not historical facts. Such statements are based on current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. Additional information about risks and uncertainties is included in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections within the Company's Annual Report on Form 10-K.
11
EX-99.2 3 cbshq32024-earningshighl.htm EX-99.2 cbshq32024-earningshighl
COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 3rd Quarter 2024

 
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 2023 Annual Report on Form 10-K, 2nd Quarter 2024 Report on Form 10- Q and the Corporation’s Current Reports on Form 8-K. 2

 
COMMERCE BANCSHARES 159 YEARS IN BUSINESS 142 branches and 253 ATMs across 7 states CORE BANKING FOOTPRINT COMMERCIAL | CONSUMER | WEALTH MANAGEMENT St. Louis • Kansas City • Springfield Central Missouri • Central Illinois • Wichita Tulsa • Oklahoma City • Denver COMMERCIAL OFFICES Cincinnati • Nashville • Dallas • Des Moines Indianapolis • Grand Rapids • Houston1 WEALTH MANAGEMENT OFFICES Dallas • Houston1 • Naples1 U.S. PRESENCE Extended Market Area Commercial Payments Services Offered in 48 states across the U.S. $31.5 BILLION TOTAL ASSETS 42ND LARGEST U.S. BANK BASED ON ASSET SIZE2 $7.6 BILLION MARKET CAP 18TH LARGEST U.S. BANK BASED ON MARKET CAP2 $73.7 BILLION TOTAL TRUST ASSETS UNDER ADMINISTRATION 20TH LARGEST AMONG BANK-MANAGED TRUST COMPANIES BASED ON AUM2 16.19% TIER 1 COMMON RISK- BASED CAPITAL RATIO 3RD HIGHEST AMONG TOP 50 U.S. BANKS BASED ON ASSET SIZE2 AS OF JUNE 30, 2024 $25.2 BILLION TOTAL DEPOSITS $17.1 BILLION TOTAL LOANS3 $9.9 BILLION COMMERCIAL CARD VOLUME AS OF DECEMBER 31, 2023 16.92% RETURN ON AVERAGE COMMON EQUITY YTD 2ND YTD ROACE FOR THE TOP 50 U.S. BANKS BASED ON ASSET SIZE2 a2 BASELINE CREDIT ASSESSMENT4 TWO RATINGS ABOVE THE U.S. BANKING INDUSTRY MEDIAN RATING OF baa1 1Locations outside the core banking footprint that accept deposits Sources: 2S&P Global Market Intelligence – Regulated U.S. depositories which includes commercial banks, bank holding companies, and credit unions, rankings as of 6/30/2024; 3Includes loans held for sale; 4Moody’s Sector Profile: Banks, August 28, 2024, Baseline Credit Assessment (BCA) reflects a bank’s standalone credit strength; Company reports and filings, information as of 9/30/2024 unless otherwise noted. 3

 
TRACK RECORD OF LONG-TERM OUTPERFORMANCE Revenue Diversification Balanced earnings profile, fee revenue at 37%1 of total revenue, bolstered by growing wealth and national payments businesses Deposit Franchise $23.7 billion in low-cost, diverse deposits2 with peer-leading historical deposit betas Credit Quality Conservative risk profile drives outperformance across credit cycles Consistent Earnings and Shareholder Value Over 8% total annualized return to shareholders over the last 20 years, outperforming the annualized KBW Regional Bank Index return of 4%3 Capital Management Strong capital ratios, 56th consecutive year of common dividend increases4 Continued Long-Term Investments Core banking system implementation, Enterprise Digital, Expansion Markets, Wealth Management, 1As of YTD 9/30/2024; 2Excludes certificates of deposit greater than $100,000, period-end balance as of 9/30/2024; 3As of 9/30/2024; 4Based on 1Q2024 paid dividend 4

 
$138.0 million Net Income $183.8 million PPNR1 3Q2024 HIGHLIGHTS Highlights $1.07 EPS 1.80% ROAA 16.81% ROACE • Net interest income was flat compared to Q2 at $262MM. • Net interest margin declined 5 bps from Q2 to 3.50%; excluding TIPs inflation income, Q3 net interest margin of 3.49%, up 4 bps over Q2. • Total cost of deposits was flat compared to Q2 at 1.40%. • Non-interest income increased 11% over the prior year and was 38% of total revenue. • Non-interest expense increased 4% over the prior year. • Purchases of available for sale debt securities in Q3 totaled $976MM with a weighted average yield of approximately 3.87%. • Average loan growth slowed, with average loans increasing slightly by $58MM over the prior year. • Net loan charge-offs of .22% and non-accrual loans of .11%. • TCE/TA increased 65 bps over Q2 to 10.47%. Book value per share increased 10% over Q2 to $26.90. 56.31% Efficiency Ratio Well-positioned for current environment 1See the non-GAAP reconciliation on page 24 5

 
BALANCE SHEET HIGHLIGHTS 3Q24 vs. 3Q23 3Q24 vs. 2Q24 Quarterly Average Balances % Change$ Change% Change$ Change3Q24$ in millions 0%$-52.0-2%$-169.8$10,948.1Commercial 2%109.50%21.26,077.7Consumer 0%$57.6-1%$-148.6$17,025.9Total Loans -14%$-1,468.2-2%$-140.4$9,021.6Investment Securities1 10%$227.422%$465.4$2,565.2 Interest Earning Deposits with Banks -5%$-1,214.90%$65.3$24,350.7Deposits 35%$7.0010%$2.42$26.90Book Value per Share2 Average Loans: Increased slightly compared to the prior year. Investment securities: Purchased $976 million of available for sale debt securities; sold remaining Visa Class C shares. Interest Earning Deposits with Banks: Ample levels of liquidity on balance sheet. Average Deposits: Increased slightly compared to previous quarter. 1At fair value 2For the quarters ended September 30, 2024, June 30, 2024, and September 30, 2023 6

 
$17.7 $17.0 $17.1 $7.9 $7.3 $7.3 3Q23 2Q24 3Q24 $25.6 $24.3 $24.4 -5% $11.0 $11.1 $10.9 $6.0 $6.1 $6.1 3Q23 2Q24 3Q24 $17.0 $17.2 $17.0 BALANCE SHEET 7 Loans Consumer Loans Commercial Loans Loan Yield1 Deposits QTD Average Balances $ billions Non-Interest Bearing Interest-Bearing Deposits Interest-Bearing Deposit Cost QTD Average Balances $ billions 6.02% 6.30% 6.35% 1.76% 1.99% 2.00% +0% 1Tax equivalent yield

 
LOAN PORTFOLIO 8 YoYQoQ9/30/20236/30/20249/30/2024$ in 000s 2.4%-.7%$5,908,330 $6,090,724$6,048,328Business -10.3%-1.1%1,539,5661,396,5151,381,607Construction -1.6%.4%3,647,1683,572,5393,586,999Business Real Estate .6%-.4%3,024,6393,055,1823,043,391Personal Real Estate -.8%-1.7%2,125,8042,145,6092,108,281Consumer 12.2%3.3%305,237331,381342,376Revolving Home Equity -.0%1.4%574,829566,925574,746Consumer Credit Card 13.8%2.0%3,7534,1904,272Overdrafts -.2%-.4%$17,129,326$17,163,065$17,090,000Total Loans Period-End Balances YoYQoQ9/30/20236/30/20249/30/2024$ in 000s 2.0%-.2%$5,849,227$5,980,364$5,966,797Business -7.2%-4.8%1,508,8501,471,5041,400,563Construction -1.7%-2.3%3,642,0103,666,0573,580,772Business Real Estate 1.8%.1%2,992,5003,044,9433,047,563Personal Real Estate 1.3%.1%2,102,2812,127,6502,129,483Consumer 10.4%2.9%304,055326,204335,817Revolving Home Equity -.8%1.2%564,039552,896559,410Consumer Credit Card 2.2%12.4%5,3414,8565,460Overdrafts .3%-.9%$16,968,303$17,174,474$17,025,865Total Loans QTD Average Balances

 
33.4% 14.6% 12.9% 8.7% 8.6% 8.6% 5.3% 5.2% Owner- occupied Office Industrial Retail Multi-family Hotels Farm Senior living 2.7% Other Real Estate - Business Loans: Office Outstanding Balances by Geography1 % of Total Loans Real Estate - Business Loans 7.0%Owner – Occupied 3.1%Office 2.7%Industrial 1.8%Retail 1.8%Hotels 1.8%Multi-family 1.1%Farm 1.1%Senior living .6%Other 21.0%Total COMMERCIAL REAL ESTATE BREAKDOWN 9 Real Estate - Business Loans $3.6 billion 1Geography determined by location of collateral. Includes only loans with a balance of $1 million and above, which represents 94% of outstanding balance of the stabilized, non-owner occupied office loans 2Critized is defined as special mention, substandard, and non-accrual loans 3LTV based on current exposure and property value at time of most recent valuation. Includes only loans with a balance of $1 million and above, which represents 94% of outstanding balance of the stabilized, non- owner occupied office loans Real Estate - Business Loans: Office Attributes as of September 30, 2024 48.6% 18.0% 8.9% 5.8% 6.8% MO KS TX OK 4.9% IL 4.7% CO 2.3% OH Other Midwest States • TTM Net Charge-offs on Office loans: .00% • Delinquent Office Loans: .00% • Non-Performing Office Loans: .00% • Criticized2 Office Loans to Total Office Loans: 13.4% • Weighted Average LTV of Office Loans: 65.3%3 • Percent of loans at floating interest rate: 72.1%

 
$152 $182 $262 $232 2Q24 $414 10 INCOME STATEMENT HIGHLIGHTS $143 $163 $249 $228 3Q23 $391 $159 $184 $262 $237 3Q24 $421 Non-Interest Income (+) Net Interest Income (+) Non-Interest Expense (-) Pre-Tax, Pre-Provision Net Revenue (=) 3Q24 Comparison 12.4%vs. 3Q23 .8%vs. 2Q24 Pre-Tax, Pre-Provision Net Revenue (PPNR) $ in millions Expenses increased 2.3% over Q2 and increased 4.2% over the prior year. Revenue increased 1.7% over Q2 and increased 7.6% over the prior year. 1See the non-GAAP reconciliation on page 24

 
3Q24 vs. 3Q23 3Q24 vs. 2Q24 % Change$ Change% Change$ Change3Q24$ in millions 6%$13.80%$.1$262.4Net Interest Income 11%$16.14%$6.8$159.0Non-Interest Income 4%$9.62%$5.4$237.6Non-Interest Expense 12%$20.31%$1.5$183.8Pre-Tax, Pre-Provision Net Revenue1 -10%-$.420%$.6$3.9Investment Securities Gains, Net -22%-$2.567%$3.7$9.1Provision for Credit Losses 14%$17.4-1%-$1.5$138.0Net-Income Attributable to Commerce Bancshares, Inc. 3Q24 vs. 3Q233Q23 3Q24 vs. 2Q242Q243Q24For the three months ended 16%$.920%$1.07$1.07Net Income per Common Share – Diluted 39 bps3.11%-5 bps3.55%3.50%Net Yield on Interest Earning Assets INCOME STATEMENT HIGHLIGHTS 1See the non-GAAP reconciliation on page 24 11

 
NON-INTEREST INCOME HIGHLIGHTS 12 3Q24 vs. 3Q23 3Q24 vs. 2Q24 % Change$ Change% Change$ Change3Q24$ in millions 11%$5.55%$2.4$54.7Trust Fees 1%.70%.147.6Bank Card Transaction Fees 10%2.30%.125.4Deposit Account Charges and Other Fees 70%2.526%1.26.0Capital Market Fees 21%.83%.14.6Consumer Brokerage Services 16%.50%.03.4Loan Fees and Sales 29%3.920%2.817.3Other 11%$16.14%$6.8$159.0Total Non-Interest Income Trust Fees: Increase over prior year mainly due to higher private client fees. Deposit Account Charges and Other Fees: Increase compared to the prior year mainly due to higher corporate cash management fees. Capital Market Fees: Increase over the prior year mainly due to higher trading securities income. Other: Increase compared to the prior year due to gain on sales of real estate ($3.4 million), increase in fair value adjustments on deferred compensation plan ($1.8 million) and lower tax credit sales income ($1.4 million).

 
NON-INTEREST EXPENSE HIGHLIGHTS 13 3Q24 vs. 3Q23 3Q24 vs. 2Q24 % Change$ Change% Change$ Change3Q24$ in millions 4%$6.33%$4.0$153.1Salaries and Employee Benefits 5%1.52%.732.2Data Processing and Software -4%-.57%.913.4Net Occupancy 6%.52%.28.8Professional and other services 18%1.136%1.97.3Marketing 13%.64%.25.3Equipment 0%.07%.35.0Supplies and Communication -27%-1.124%.62.9Deposit Insurance 15%1.2-26%-3.49.6Other 4%$9.62%$5.4$237.6Total Non-Interest Expense Salaries and employee benefits: Increase compared the prior year mainly due to higher full- time salaries and incentive compensation. Deposit Insurance: Accrual adjustment of $525 thousand decreased expense for Q3 when compared to the prior year. Other: Lower than previous quarter due to $5 million contribution in Q2 to a related charitable foundation.

 
14 LIQUIDITY AND CAPITAL

 
LIQUIDITY AND CAPITAL HIGHLIGHTS 15 • $2.6B in cash at Federal Reserve Bank (FRB) at Q3. • QTD average loan to deposit ratio of 70%. • AFS debt securities portfolio duration of 4.0 years. • Investment securities purchases in Q3 totaled $976MM at a weighted average yield of approximately 3.87%. • Cash flows from maturities and paydowns of investments and resale agreements of approximately $1.7B expected over the next twelve months. – AFS debt securities of $1.6B – Securities purchased under agreements to resell of $125MM Liquidity • TCE/TA of 10.47%, an increase of 65 bps over Q2. Tier 1 leverage at 12.31%. • Purchased $44MM of common stock vs. $38MM in Q2. • AOCI loss decreased from $(808MM) at Q2 to $(577MM) at Q3. • Book value per share increased 10% over Q2 to $26.90. Capital

 
2020 2021 2022 4Q23 2Q24 3Q24 $2.3 $3.0 $2.8 $2.3 $2.4 $2.3 DEPOSIT BALANCE TRENDS Segment view $ in billions 16 2020 2021 2022 4Q23 2Q24 3Q24 $9.9 $12.0 $11.9 $10.6 $9.5 $9.8 2020 2021 2022 4Q23 2Q24 3Q24 $11.3 $12.8 $13.4 $12.1 $12.4 $12.3 Commercial Consumer Wealth Average Balance 4Q23 2Q24 3Q24 $12.4 $12.5 $12.3 Period EndAverage Balance Average Balance Segment balances do not include brokered deposits. 2020 through 2022 are full year average balances. 4Q23 2Q24 3Q24 $10.4 $9.4 $10.5 Period End 4Q23 2Q24 3Q24 $2.5 $2.3 $2.4 Period End

 
3.55% 3.45% 3.50% 3.49% Net Yield Net Yield, Excluding TIPs Inflation Income 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 4/2025. • 2.75% floor contract with a notional value of $500 million. The contract begins 7/2025. OPPORTUNTIES TO ENHANCE AND PROTECT NET INTEREST INCOME • Net yield on interest earning assets decreased 5 bps from Q2 to 3.50%. • Loan yield increased 5 bps over Q2 to 6.35%. • Total cost of deposits was flat compared to Q2 at 1.40%. • As of December 31, 2023, 57% of loans were variable rate. • Purchases of investment securities in Q3 totaled $976MM at a weighted average yield of approximately 3.87%. • Cash flows from maturities and paydowns of investments and resale agreements of approximately $1.7B expected over the next twelve months. 17 2Q 2024 3Q 2024 Quarterly Net Yield on Interest Earning Assets

 
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 18 97% 3% Construction Total Loans: $1.4B Source: 2023 10-K

 
20% 9% 53% 16% 2% Composition of AFS Portfolio Treasury & agency Municipal MBS Asset-backed Other debt HIGH QUALITY, HIGHLY LIQUID AND DIVERSE INVESTMENT PORTFOLIO 1Excludes inflation effect on TIPs; 2Tax equivalent yield Duration (yrs)Avg RateQTD – Sept. 30, 2024 3.23.40%Treasury & agency1 4.82.00%2Municipal 5.41.95%MBS 1.02.66%Asset-backed 2.32.07%Other debt 4.02.41%Total 19 Total available for sale securities Average balance: $8.7 billion, at fair value As of September 30, 2024

 
Average Loan to Deposit Ratio3 SOUND CAPITAL AND LIQUIDITY POSITION 20 Tier 1 Risk-Based Capital Ratio1 1S&P Global Market Intelligence, Information as of June 30, 2024 2Period-end balances, as of September 30, 2024 3Includes loans held for sale, for the quarter ended September 30, 2024 16.2% 15.4% 14.4% 13.8% 13.5% 13.3% 13.2% 12.3% 12.1% 12.1% 12.0% 11.7% 11.7% 11.5% 11.3% 11.2% 11.1% 11.1% 10.3% 10.2% CBSH PB HOMB CFR UBSI HWC UCB CADE BOKF SSB SFNC OZK ABCB FIBK ONB PNFP UMBF FULT ASB FNB Peer Median: 12.0% Core Deposits $22.6 Billion2 Large, stable deposit base Loan to Deposit Ratio Total Deposits 70% Average Loan to Deposit Ratio184% 90%10% Core Deposits - Non-Interest Bearing - Interest Checking - Savings and Money MarketCertificates of Deposits Commerce Peer Average

 
$8.2 $19.3 $18.4 $105.8 $132.2 3Q23 2Q24 3Q24 $9.8 $9.8 $9.6 $14.2 $10.2 3Q23 2Q24 3Q24 MAINTAINING STRONG CREDIT QUALITY Net Loan Charge-Offs (NCOs) $ in millions NCOs- CBSH NCOs - Peer Average NCO/Average Loans1 - CBSH $162.2 $158.6 $160.8 $303.1 $330.7 3Q23 2Q24 3Q24 Allowance for Credit Losses on Loans (ACL) $ in millions ACL - CBSH ACL - Peer Average ACL / Total Loans - CBSH Non-Accrual Loans (NALs) $ in millions NALs - CBSH NALs - Peer Average 19.8x 8.2x 8.7x 3.9x 3.6x 3Q23 2Q24 3Q24 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 .11% .11%.44% .53% ACL / Total Loans – Peer Average .95% .92% .94% 1.29% 1.34% .23% .23% .22% .16% .16% Percentages are illustrative and not to scale; Peer Banks include: ABCB, ASB, BOKF, CADE, CFR, FIBK, FNB, FULT, HWC, HOMB, ONB, OZK, PB, PNFP, SFNC, SSB, UBSI, UCB, UMBF 1As a percentage of average loans (excluding loans held for sale) 21

 
ALLOCATION OF ALLOWANCE 22 CECL allowances reflect the economic and market outlook September 30, 2024June 30, 2024 % of Outstanding Loans Allowance for Credit Losses (ACL) % of Outstanding Loans Allowance for Credit Losses (ACL)$ in millions .72%$ 43.7.74%$ 45.1Business .94%33.6 .90%32.2 Bus R/E 2.15%29.72.14%29.9Construction .97%$ 107.0.97%$ 107.2Commercial total .54%11.3 .52%11.1 Consumer 5.23%30.05.15%29.2Consumer CC .34%10.4.30%9.1Personal R/E .54%1.9.54%1.8Revolving H/E 3.53%.2 3.70%.2 Overdrafts .89%$ 53.8 .84%$ 51.3 Consumer total .94%$ 160.8.92%$ 158.6Allowance for credit losses on loans 1.07% 0.88% 0.90% 0.92% 0.96% 0.94% 0.95% 0.94% 0.93% 0.92% 0.94% 0.60% 0.80% 1.00% 1.20% 1.40% $100 $125 $150 $175 $200 $225 $172.4 2Q $162.8 3Q $150.0 0.99% 4Q 0.87% 1Q $138.0 2Q $143.4$139.6 $150.1 4Q $159.3 1Q $158.7 3Q 2Q $162.2 0.95% 3Q $162.4 1/1 4Q $160.5 $200.5 1Q $158.6 $134.7 2Q 3Q $160.8 1.10% 1.22% 1Q Allowance for Credit Losses (ACL) on Loans ACL - Loans (left) ACL / Total Loans (right) $ in millions 202220212020 2023 2024

 
Quick Facts: Small Business Investment Company (SBIC) founded in 1959 Nationwide footprint with Greater Midwest Focus 34 Portfolio Companies Representing $945.9 million in Revenue Over 3,000 Employees Fair Value as of September 30, 2024: $171.0 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 23

 
NON-GAAP RECONCILIATIONS 24 For The Three Months Ended Sept. 30, 2023June 30, 2024Sept. 30, 2024(DOLLARS IN THOUSANDS) 248,547$262,249$262,351$Net Interest IncomeA 142,949$152,244$159,025$Non-Interest IncomeB 228,010$232,214$237,600$Non-Interest ExpenseC 163,486$182,279$183,776$Pre-Provision Net Revenue (A+B-C) Pre-tax, Pre-provision Net Revenue

 
Contact Information: Matt Burkemper Senior Vice President, Commerce Bank Corporate Development and Investor Relations 314.746.7485 Matthew.Burkemper@commercebank.com Commerce Bancshares, Inc. Investor Relations website: http://investor.commercebank.com/ 25