Commerce Bancshares, Inc. · NASDAQ:CBSH
Commerce Bancshares — Q3 2024 Earnings Presentation
26 slides from Commerce Bancshares's earnings presentation, 2024
Slide 1: Commerce Bancshares, Inc. Earnings Highlights 3rd Quarter 2024
COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 3rd Quarter 2024
Slide 2: Cautionary Statement
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
Slide 3: Commerce Bancshares at a glance
COMMERCE BANCSHARES TOTAL ASSETS $31.5 159 YEARS IN BUSINESS BILLION TOTAL DEPOSITS $25.2 BILLION 42ND LARGEST U.S. BANK BASED ON ASSET SIZE2 MARKET CAP TOTAL $17.1 LOANS3 BILLION $7.6 BILLION $9.9 COMMERCIAL CARD VOLUME 18TH BILLION AS OF DECEMBER 31, 2023 LARGEST U.S. BANK BASED ON MARKET CAP2 TOT
Slide 4: Track Record of Long-Term Outperformance
TRACK RECORD OF LONG-TERM OUTPERFORMANCE Revenue Diversification Deposit Franchise Balanced earnings profile, fee revenue $23.7 billion in low-cost, diverse at 37%1 of total revenue, bolstered by deposits2 with peer-leading growing wealth and national payments historical deposit betas businesses Cre
Slide 5: 3Q2024 Highlights
3Q2024 HIGHLIGHTS Highlights Well-positioned for current environment Net Income • Net interest income was flat compared to Q2 at $262MM. $138.0 million • 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. PPNR1 $18
Slide 6: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Quarterly Average Average Loans: Balances 3Q24 vs. 2Q24 3Q24 vs. 3Q23 Increased slightly compared to the prior year. $ in millions 3Q24 $ Change % Change $ Change % Change Investment securities: Purchased $976 million of Commercial $10,948.1 $-169.8 -2% $-52.0 0% available f
Slide 7: Balance Sheet
BALANCE SHEET Loans Deposits QTD Average Balances QTD Average Balances $ billions $ billions +0% 6.35% 6.30% -5% 6.02% $25.6 $24.3 $24.4 $7.9 $7.3 $7.3 $17.0 $17.2 $17.0 1.99% 2.00% $6.0 $6.1 $6.1 1.76% $17.7 $17.0 $17.1 $11.0 $11.1 $10.9 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 Consumer Loans Loan Yield1 Non-
Slide 8: Loan Portfolio
LOAN PORTFOLIO Period-End Balances QTD Average Balances $ in 000s 9/30/2024 6/30/2024 9/30/2023 QoQ YoY $ in 000s 9/30/2024 6/30/2024 9/30/2023 QoQ YoY Business $6,048,328 $6,090,724 $5,908,330 -.7% 2.4% Business $5,966,797 $5,980,364 $5,849,227 -.2% 2.0% Construction 1,381,607 1,396,515 1,539,566 -
Slide 9: Commercial Real Estate Breakdown
COMMERCIAL REAL ESTATE BREAKDOWN Real Estate - Business Loans: Office Outstanding Balances by Geography1 Other Real Estate - Business Loans Midwest States Real Estate - % of Total OH Business Loans Loans $3.6 billion CO 6.8% IL 4.7% Owner- 2.3% Owner – Occupied 7.0% 33.4% occupied 4.9% OK 5.8% Offic
Slide 10: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS Pre-Tax, Pre-Provision Net Revenue (PPNR) $ in millions Net Interest Income (+) 3Q24 Comparison Non-Interest Income (+) vs. 3Q23 12.4% Non-Interest Expense (-) vs. 2Q24 .8% Pre-Tax, Pre-Provision Net Revenue (=) $421 Revenue increased 1.7% $414 $391 over Q2 and increased
Slide 11: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS 3Q24 vs. 2Q24 3Q24 vs. 3Q23 $ in millions 3Q24 $ Change % Change $ Change % Change Net Interest Income $262.4 $.1 0% $13.8 6% Non-Interest Income $159.0 $6.8 4% $16.1 11% Non-Interest Expense $237.6 $5.4 2% $9.6 4% Pre-Tax, Pre-Provision Net Revenue1 $183.8 $1.5 1% $20.3
Slide 12: Non-Interest Income Highlights
NON-INTEREST INCOME HIGHLIGHTS 3Q24 vs. 2Q24 3Q24 vs. 3Q23 Trust Fees: $ in millions 3Q24 $ Change % Change $ Change % Change Increase over prior year mainly due to higher private client fees. Trust Fees $54.7 $2.4 5% $5.5 11% Deposit Account Charges and Bank Card Transaction Fees 47.6 .1 0% .7 1% O
Slide 13: Non-Interest Expense Highlights
NON-INTEREST EXPENSE HIGHLIGHTS 3Q24 vs. 2Q24 3Q24 vs. 3Q23 $ in millions 3Q24 $ Change % Change $ Change % Change Salaries and Employee Benefits $153.1 $4.0 3% $6.3 4% Salaries and employee benefits: Data Processing and Software 32.2 .7 2% 1.5 5% Increase compared the prior year mainly due to highe
Slide 14: Liquidity and Capital
LIQUIDITY AND CAPITAL 14
Slide 15: Liquidity and Capital Highlights
LIQUIDITY AND CAPITAL HIGHLIGHTS Liquidity Capital • $2.6B in cash at Federal Reserve Bank (FRB) at Q3. • TCE/TA of 10.47%, an increase of 65 bps over Q2. Tier 1 leverage at 12.31%. • QTD average loan to deposit ratio of 70%. • Purchased $44MM of common stock vs. • AFS debt securities portfolio dura
Slide 16: Deposit Balance Trends
DEPOSIT BALANCE TRENDS Segment view $ in billions Commercial Consumer Wealth $13.4 $12.8 $12.1 $12.4 $12.3 $12.4 $12.5 $12.3 $12.0 $11.9 $11.3 $10.6 $10.4 $10.5 $9.9 $9.5 $9.8 $9.4 $3.0 $2.8 $2.3 $2.3 $2.4 $2.3 $2.5 $2.3 $2.4 2020 2021 2022 4Q23 2Q24 3Q24 4Q23 2Q24 3Q24 2020 2021 2022 4Q23 2Q24 3Q24
Slide 17: Net Interest Income
OPPORTUNTIES TO ENHANCE AND PROTECT NET INTEREST INCOME Quarterly Net Yield on Interest Earning Assets • Net yield on interest earning assets decreased 5 bps from Q2 to 3.50%. 2Q 2024 3Q 2024 3.55% • Loan yield increased 5 bps over Q2 to 6.35%. 3.50% • Total cost of deposits was flat compared to Q2
Slide 18: Summary of Fixed & Floating Loans
SUMMARY OF FIXED & FLOATING LOANS Over 57% of total loans are variable; 65% of commercial loans have floating rates Fixed Variable Business Construction Business RE Commercial Total Loans: $6.0B Total Loans: $1.4B Total Loans: $3.7B 3% 40% 41% 60% 59% 97% Personal RE Consumer HELOC Consumer Card Tot
Slide 19: High Quality, Highly Liquid and Diverse Investment Portfolio
HIGH QUALITY, HIGHLY LIQUID AND DIVERSE INVESTMENT PORTFOLIO Composition of AFS Portfolio As of September 30, 2024 Total available for sale securities Average balance: $8.7 billion, at fair value Duration QTD – Sept. 30, 2024 Avg Rate (yrs) Treasury & agency Treasury & agency1 3.40% 3.2 2% 16% 20% M
Slide 20: Sound Capital and Liquidity Position
SOUND CAPITAL AND LIQUIDITY POSITION Tier 1 Risk-Based Capital Ratio1 Loan to Deposit Ratio CBSH Peer Median: 12.0% Large, stable deposit base 16.2% 70% Average PB 15.4% Core Deposits Loan to HOMB 14.4% Deposit Ratio 3 CFR 13.8% $22.6 Commerce 84% UBSI 13.5% Average Loan to HWC 13.3% Billion2 Deposi
Slide 21: Maintaining Strong Credit Quality
MAINTAINING STRONG CREDIT QUALITY Net Loan Charge-Offs (NCOs) Allowance for Credit $ in millions Losses on Loans (ACL) $ in millions $14.2 $303.1 $330.7 $9.8 $9.8 $10.2 $9.6 $162.2 1.29% $158.6 1.34% $160.8 .23% .23% .22% .16% .16% .95% .92% .94% 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 NCOs- CBSH NCO/Average
Slide 22: Allocation of Allowance
ALLOCATION OF ALLOWANCE CECL allowances reflect the economic and market outlook Allowance for Credit Losses (ACL) on Loans June 30, 2024 September 30, 2024 $ in millions $225 1.40% Allowance for % of Allowance for % of Credit Losses Outstanding Credit Losses Outstanding $ in millions (ACL) Loans (AC
Slide 23: Capital for Business
CAPITAL FOR BUSINESS® A middle-market private equity firm focused on the success of industrial growth companies Transaction Types Quick Facts: Investment Criteria Management buyouts Leveraged buyouts • Manufacturing, distribution and Succession plans Small Business Investment certain service compani
Slide 24: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Pre-tax, Pre-provision Net Revenue For The Three Months Ended (DOLLARS IN THOUSANDS) Sept. 30, 2024 June 30, 2024 Sept. 30, 2023 A Net Interest Income $ 262,351 $ 262,249 $ 248,547 B Non-Interest Income $ 159,025 $ 152,244 $ 142,949 C Non-Interest Expense $ 237,600 $ 232,214
Slide 25: Contact Information
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
Slide 26: Commerce Bancshares, Inc.
] Commerce Bancshares, Inc.