Commerce Bancshares, Inc. · NASDAQ:CBSH
Commerce Bancshares — Q4 2021 Earnings Presentation
20 slides from Commerce Bancshares's earnings presentation, January 2022
Slide 1: Commerce Bancshares, Inc. Earnings Highlights 4th Quarter 2021
COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 4th Quarter 2021
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: 4Q2021 Earnings Highlights
4Q2021 EARNINGS HIGHLIGHTS Highlights Well-positioned in a challenging environment PPNR1 • Net interest income decreased 3.0% from Q3. $151.8 million • Net interest margin decreased 15 bps from Q3 to 2.43%. Net Income • Non-interest income increased 7.4% over Q3. $114.9 million – Non-interest income
Slide 4: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Quarterly Average Balances Change vs. $ in millions 4Q21 3Q21 4Q20 Highlights • Linked quarter (LQ) reflects lower PPP loans (-356MM) offset by higher core business, construction and business real Commercial1 $9,423.5 $(165.4) $(1,219.5) estate • LQ reflects slightly higher
Slide 5: Balance Sheet: Loans and Deposits
BALANCE SHEET Loans Deposits QTD Average Balances QTD Average Balances $ billions $ billions +13% $28.1 $28.8 $25.6 -8% $11.5 $11.9 $16.4 $10.3 $15.3 $15.1 $5.7 $5.7 $5.7 3.69% 3.74% $16.9 3.62% $15.3 $16.6 $10.6 $9.6 $9.4 .12% .06% .05% 4Q20 3Q21 4Q21 4Q20 3Q21 4Q21 Consumer Loans Loan Yield Non-In
Slide 6: Loan Portfolio
LOAN PORTFOLIO Period-End Balances QTD Average Balances $ in 000s 12/31/2021 9/30/2021 12/31/2020 QoQ YoY $ in 000s 12/31/2021 9/30/2021 12/31/2020 QoQ YoY Business $5,303,535 $5,277,850 $6,546,087 .5% -19.0% Business $5,191,844 $5,437,498 $6,580,300 -4.5% -21.1% Business excl. Business excl. 5,174,
Slide 7: Balance Sheet: Low-Cost Deposits
BALANCE SHEET: LOW-COST DEPOSITS – 41% of Q4 average deposits were non-interest bearing. – Cost of interest-bearing deposits declined slightly. $30 0.15% $25 0.12% Average Balance $20 0.09% 0.10% $ in billions $15 0.07% 0.06% 0.05% $10 0.05% $5 $0 0.00% 4Q20 1Q21 2Q21 3Q21 4Q21 Non Interest-Bearing
Slide 8: Earning Asset Optimization Excluding Loans
EARNING ASSET OPTIMIZATION EXCLUDING LOANS Prudently deploying excess deposits into higher-yielding assets $20.0 $19.1 9.0% $18.0 $2.9 8.0% $16.5 $2.6 $15.0 $2.7 $1.7 7.0% $15.0 $1.6 $14.0 $1.5 $13.1 $1.1 $0.9 6.0% $0.8 $12.2 $1.0 $0.8 Average Balance $0.8 $9.8 $1.8 $ in billions $9.6 $9.7 $9.6 5.0%
Slide 9: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS Change vs. $ in millions 4Q21 3Q21 4Q20 Highlights • Linked quarter (LQ) decrease due to lower interest earned Net Interest Income $207.7 $(6.4) $(2.1) on loans and securities purchased under agreements to resell, partially offset by higher income earned on investment sec
Slide 10: Non-Interest Income Highlights
NON-INTEREST INCOME HIGHLIGHTS Change vs. $ in millions 4Q21 3Q21 4Q20 Highlights • Increase of 12.0% over prior year (PY) driven by Bank Card Transaction Fees $44.8 $2.0 $4.8 growth in net corporate card and net debit card fees • Increase of 16.5% over PY resulting mostly from Trust Fees $48.9 – $6
Slide 11: Non-Interest Expense Highlights
NON-INTEREST EXPENSE HIGHLIGHTS Change vs. $ in millions 4Q21 3Q21 4Q20 Highlights • Increase of 2.0% over prior year (PY) mostly due to Salaries and Employee Benefits $132.6 $(.2) $2.7 higher full-time salaries and incentive compensation Net Occupancy $12.3 — $.7 Equipment $4.7 $.3 $.1 Supplies $4.
Slide 12: Pre-Tax, Pre-Provision Net Revenue (PPNR)
PRE-TAX, PRE-PROVISION NET REVENUE (PPNR) Net Interest Income (+) Non-Interest Expense (-) Non-Interest Income (+) Pre-Tax, Pre-Provision Net Revenue (=) $352 $355 $345 4Q2021 Comparison vs. 4Q2020 2.2% $204 vs. 3Q2021 8.5% $196 $212 $208 $210 $214 $149 $152 $140 $135 $138 $148 4Q2020 3Q2021 4Q2021
Slide 13: Sound Capital and Liquidity Position
SOUND CAPITAL AND LIQUIDITY POSITION Tier 1 Risk-Based Capital Ratio1 Loan to Deposit Ratio Peer Median: 12.0% Large, stable deposit base OZK 14.6% SFNC 52% 14.3% Core Deposits Average Loan to CBSH 14.0% Deposit Ratio3 CFR 14.0% $28.4 Commerce 78% Average UBSI 13.5% Loan to WBS 12.4% Billion2 Deposi
Slide 14: Maintaining Strong Credit Quality
MAINTAINING STRONG CREDIT QUALITY Net Loan Charge-Offs (NCOs) Allowance for Credit $ in millions Losses on Loans (ACL) .22% $ in millions .19% $11.2 $306.1 $261.1 $8.0 .10% .11% $220.8 .05% 1.49% $162.8 $150.0 $3.7 $4.3 1.35% 1.33% $2.5 1.07% .99% 4Q20 3Q21 4Q21 4Q20 3Q21 4Q21 NCOs- CBSH NCO/Average
Slide 15: Paycheck Protection Program Impact and Update
PAYCHECK PROTECTION PROGRAM IMPACT AND UPDATE Total Loan Originations1: Total SBA Fees: $1.9 Billion $60.4 Million Forgiven 93% 7% Remaining Recognized 95% 5% Remaining Yield and Interest Income2 Q4 2021, $ in millions 10.80% $41.4 $35.4 $6.0 3.16% 2.83% Yield Interest Income Business Loans PPP Yiel
Slide 16: Paycheck Protection Program Impact and Update
PAYCHECK PROTECTION PROGRAM IMPACT AND UPDATE Loan Portfolio Impact QTD Average Balances, $ in millions $6,761 $6,709 $6,580 $6,533 $6,211 $5,494 $1,244 $1,506 $1,476 $1,374 $5,437 $5,192 $1,264 $575 $219 $5,494 $5,517 $5,203 $5,104 $5,159 $4,947 $4,863 $4,973 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21
Slide 17: Allocation of Allowance
ALLOCATION OF ALLOWANCE CECL allowances reflect the economic and market outlook Allowance for Credit Losses (ACL) on Loans September 30, 2021 December 31, 2021 $ in millions Allowance Allowance $250 1.60% for Credit % of for Credit % of Losses Outstanding Losses Outstanding 1.47% 1.44% $ in millions
Slide 18: 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 • Manufacturing, distribution and Leveraged buyouts Small Business Investment Succession plans certain service compan
Slide 19: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Pre-tax, Pre-provision Net Revenue For The Three Months Ended (DOLLARS IN THOUSANDS) Dec. 31, 2021 Sept. 30, 2021 Dec. 31, 2020 A Net Interest Income $ 207,657 $ 214,037 $ 209,763 B Non-Interest Income $ 147,699 $ 137,506 $ 135,117 C Non-Interest Expense $ 203,582 $ 211,620
Slide 20: Commerce Bancshares, Inc.
] Commerce Bancshares, Inc.