Commerce Bancshares, Inc. · NASDAQ:CBSH
Commerce Bancshares — Q4 2024 Earnings Presentation
24 slides from Commerce Bancshares's earnings presentation, Jan 22, 2025
Slide 1: Commerce Bancshares, Inc. Earnings Highlights 4th Quarter 2024
COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 4th 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: 159 Years in Business
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 • Nash
Slide 4: Track Record of Long-Term Outperformance
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 $23.9 billion in low-cost, diverse deposits2 with peer-leading historical deposit betas Cre
Slide 5: 4Q2024 Highlights
4Q2024 HIGHLIGHTS Performance • Earnings of $1.01 per share, compared to $.79 per share in the same quarter last year • PPNR1 of $186MM, an increase of $44MM over the same period last year • ROAA of 1.73% and ROAE of 15.97% • Efficiency ratio of 55.8%, a decrease in Q4 from 56.3% in Q3 Income Statem
Slide 6: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS 4Q24 vs. 4Q23 4Q24 vs. 3Q24 Quarterly Average Balances % Change$ Change% Change$ Change4Q24$ in millions 0%-$18.81%$62.6$11,010.7Commercial 1%30.50%-18.76,059.0Consumer 0%$11.60%$43.9$17,069.7Total Loans -4%-$359.95%$461.5$9,483.1Investment Securities1 9%$222.92%$45.1$2,610.
Slide 7: Balance Sheet
$17.5 $17.1 $17.5 $7.7 $7.3 $7.4 4Q23 3Q24 4Q24 $25.2 $24.4 $24.9 -1% $11.0 $10.9 $11.0 $6.1 $6.1 $6.1 4Q23 3Q24 4Q24 $17.1 $17.0 $17.1 0% BALANCE SHEET 7 Loans Consumer Loans Commercial Loans Loan Yield1 Deposits QTD Average Balances $ billions Non-Interest Bearing Interest-Bearing Deposits Interes
Slide 8: Loan Portfolio
LOAN PORTFOLIO 8 YoYQoQ12/31/20239/30/202412/31/2024$ in 000s .6%.1%$6,019,036 $6,048,328$6,053,820Business -2.5%2.0%1,446,7641,381,6071,409,901Construction -1.6%2.1%3,719,3063,586,9993,661,218Business Real Estate 1.1%.5%3,026,0413,043,3913,058,195Personal Real Estate -.2%-1.7%2,077,7232,108,2812,07
Slide 9: Commercial Real Estate Breakdown
33.8% 14.2% 13.3% 9.1% 8.5% 8.5% 5.2% 5.0% Owner- occupied Office Industrial Hotels Retail Multi-family Farm Senior living 2.4% Other Real Estate - Business Loans: Office Outstanding Balances by Geography1 % of Total Loans Real Estate - Business Loans 7.2%Owner – Occupied 3.0%Office 2.8%Industrial 1
Slide 10: Income Statement Highlights
$159 $184 $262 $237 3Q24 $421 10 INCOME STATEMENT HIGHLIGHTS $145 $142 $248 $251 4Q23 $393 $155 $186 $267 $236 4Q24 $422 Non-Interest Income (+) Net Interest Income (+) Non-Interest Expense (-) Pre-Tax, Pre-Provision Net Revenue (=) 4Q24 Comparison 31.2%vs. 4Q23 1.4%vs. 3Q24 Pre-Tax, Pre-Provision N
Slide 11: Income Statement Highlights
4Q24 vs. 4Q23 4Q24 vs. 3Q24 % Change$ Change% Change$ Change4Q24$ in millions 7%$18.22%$4.3$266.6Net Interest Income 7%$10.6-2%-$3.6$155.4Non-Interest Income -6%-$15.5-1%-$1.9$235.7Non-Interest Expense 31%$44.31%$2.6$186.3Pre-Tax, Pre-Provision Net Revenue1 -87%-$6.6-75%-$2.9$1.0Investment Securitie
Slide 12: Non-Interest Income Highlights
NON-INTEREST INCOME HIGHLIGHTS 12 4Q24 vs. 4Q23 4Q24 vs. 3Q24 % Change$ Change% Change$ Change4Q24$ in millions 15%$7.23%$1.7$56.3Trust Fees 0%-.00%.247.8Bank Card Transaction Fees 8%2.00%.125.5Deposit Account Charges and Other Fees 20%.9-14%-.95.1Capital Market Fees 27%1.00%.04.6Consumer Brokerage
Slide 13: Non-Interest Expense Highlights
NON-INTEREST EXPENSE HIGHLIGHTS 13 4Q24 vs. 4Q23 4Q24 vs. 3Q24 % Change$ Change% Change$ Change4Q24$ in millions 4%$6.40%$.7$153.8Salaries and Employee Benefits 4%1.41%.332.5Data Processing and Software -2%-.22%.313.7Net Occupancy -3%-.22%.29.0Professional and other services -13%-.8-22%-1.65.7Market
Slide 14: Liquidity and Capital
LIQUIDITY AND CAPITAL & commerce Bancshares, Inc.
Slide 15: Deposit Balance Trends
2020 2021 2022 2023 3Q24 4Q24 $2.3 $3.0 $2.8 $2.4 $2.3 $2.4 DEPOSIT BALANCE TRENDS Segment view $ in billions 15 2020 2021 2022 2023 3Q24 4Q24 $9.9 $12.0 $11.9 $10.4 $9.8 $10.3 2020 2021 2022 2023 3Q24 4Q24 $11.3 $12.8 $13.4 $12.2 $12.3 $12.3 Commercial Consumer Wealth Average Balance 3Q24 4Q24 $12.
Slide 16: Opportunities to Enhance and Protect Net Interest Income
3.17% 3.50% 3.49% Net Yield Hedging Structures: Four floor contracts (indexed to 1 Month SOFR) to hedge the risk of declining interest rates on floating rate commercial loans. The contracts have a term of 6 years. • 3.5% floor contract with a notional value of $500 million. The contract began 7/2024
Slide 17: Summary of Fixed & Floating Loans
Over 60% of total loans are variable; 67% of commercial loans have floating rates SUMMARY OF FIXED & FLOATING LOANS 36% 64% Business Total Loans: $6.1B Fixed Variable C om m er ci al 56% 44% Personal RE Total Loans: $3.1B C on su m er 100% 40% 60% Business RE Total Loans: $3.7B 95% 5% Consumer Card
Slide 18: High Quality, Highly Liquid and Diverse Investment Portfolio
25% 8% 49% 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 – Dec. 31, 2024 3.33.62%Treasury & agency1 4.62.01%2
Slide 19: Sound Capital and Liquidity Position
91%9% Core Deposits - Non-Interest Bearing - Interest Checking - Savings and Money Market Certificates of Deposits Average Loan to Deposit Ratio3 SOUND CAPITAL AND LIQUIDITY POSITION 19 Tier 1 Risk-Based Capital Ratio1 1S&P Global Market Intelligence, Information as of September 30, 2024 2Period-end
Slide 20: Maintaining Strong Credit Quality
$7.3 $18.4 $18.3 4Q23 3Q24 4Q24 $114.3 $216.8 $8.0 $9.6 $10.7$9.5 $13.2 4Q23 3Q24 4Q24 MAINTAINING STRONG CREDIT QUALITY Net Loan Charge-Offs (NCOs) $ in millions NCOs- CBSH NCOs - Peer Average NCO/Average Loans1 - CBSH $162.4 $160.8 $162.7 $309.2 $393.2 4Q23 3Q24 4Q24 Allowance for Credit Losses on
Slide 21: Allocation of Allowance
ALLOCATION OF ALLOWANCE 21 CECL allowances reflect the economic and market outlook December 31, 2024September 30, 2024 % of Outstanding Loans Allowance for Credit Losses (ACL) % of Outstanding Loans Allowance for Credit Losses (ACL)$ in millions .72%$ 43.8.72%$ 43.7Business .90%32.8 .94%33.6 Bus R/E
Slide 22: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 22 For The Three Months Ended Dec. 31, 2023Sept. 30, 2024Dec. 31, 2024(DOLLARS IN THOUSANDS) 248,421$262,351$266,647$Net Interest IncomeA 144,879$159,025$155,436$Non-Interest IncomeB 251,254$237,600$235,718$Non-Interest ExpenseC 142,046$183,776$186,365$Pre-Provision Net Reve
Slide 23: 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/
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