Commerce Bancshares, Inc. · NASDAQ:CBSH
Commerce Bancshares — Q1 2021 Earnings Presentation
18 slides from Commerce Bancshares's earnings presentation, 2021
Slide 1: Commerce Bancshares, Inc. Earnings Highlights 1st Quarter 2021
COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 1st 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: 1Q2021 Earnings Highlights
1Q2021 EARNINGS HIGHLIGHTS Highlights Well-positioned in a challenging environment PPNR1 • Allowance for credit losses on loans to total loans decreased to 1.22% $149.2 million – Decreased to 1.34% excluding Paycheck Protection Program (“PPP”) loans. Allowance for Credit Losses on Loans2 • Net charg
Slide 4: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Average Balances Change vs. $ in millions 1Q21 4Q20 1Q20 Highlights • Linked quarter (LQ) reflects lower business loans offset by higher construction loans Commercial1 $10,647.9 $4.9 $1,376.5 • YoY reflects PPP • LQ reflects higher personal real estate partially offset by lo
Slide 5: Balance Sheet
BALANCE SHEET Loans Deposits QTD Average Balances QTD Average Balances $ billions $ billions +31% $25.6 $26.5 +11% $20.3 $10.4 $16.4 $16.3 $10.3 $14.7 $6.6 $5.7 $5.7 $5.4 4.39% 3.69% 3.66% $15.3 $16.1 $10.7 $13.7 $9.3 $10.6 0.45% 0.12% 0.09% 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 Consumer Loans Loan Yield No
Slide 6: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS Change vs. $ in millions 1Q21 4Q20 1Q20 Highlights • Linked quarter (LQ) decline due to lower Net Interest Income $205.7 $(4.0) $4.7 earning asset yields partially offset by lower deposit costs and a larger balance sheet • LQ increase in trust fees, capital market fees an
Slide 7: 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 (=) $345 $342 $325 1Q2021 Comparison vs. 1Q2020 13.9% $196 $193 vs. 4Q2020 0.4% $210 $206 $201 $194 $149 $149 $131 $124 $135 $136 1Q2020 4Q2020 1Q2021
Slide 8: Sound Capital and Liquidity Position
SOUND CAPITAL AND LIQUIDITY POSITION Tier 1 Risk-Based Capital Ratio1 Loan to Deposit Ratio Peer Median: 11.8% Large, stable deposit base and low PB 13.7% CBSH 13.7% loan to deposit ratio CFR 62% Average 13.5% Core Deposits Loan to SFNC 13.4% Deposit Ratio 3 OZK 13.4% $25.6 Commerce 85% Average UBSI
Slide 9: Maintaining Strong Credit Quality
MAINTAINING STRONG CREDIT QUALITY Net Loan Charge-Offs (NCOs) Allowance for Credit $ in millions Losses on Loans (ACL) $12.3 $ in millions $10.9 $11.3 $10.0 $297.9 $261.0 $8.0 $220.8 $200.5 $171.7 1.33% 1.35% 1.42% 1.22% .30% .26% .21% .25% 1.14% .19% 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 NCOs- CBSH NCO/Ave
Slide 10: Consumer Credit Card Delinquencies and Monthly Net Charge-Off Trends
CONSUMER CREDIT CARD DELINQUENCIES AND MONTHLY NET CHARGE-OFF TRENDS $15 Skip Pay program effectively $6 “paused” delinquency and • Skip Pay was charge-offs in 2020 $5 enacted for May $12 and June 2020 payments to 100% 90-Day Delinquencies $4 of the portfolio Net Charge-offs $9 $ in millions $ in mi
Slide 11: NIM Protection
NIM PROTECTION Hedging structures and low deposit costs provide support to net interest margin in low-rate environment Asset Repo Agreements • Interest rate floors with a $1,000 8% combined notional value of $1.5B $850 $850 $850 $850 $850 $800 to hedge the against declining Average Balance 6% intere
Slide 12: Paycheck Protection Program Impact and Update
PAYCHECK PROTECTION PROGRAM IMPACT AND UPDATE Loan Median Total SBA Fees Customers Balance Loan Size SBA Fees Recognized Round 1 Round 1 Round 1 Round 1 2020 Round 1 $1.5 Over $33M Round 2 $41.0 $21.4$41.0 YTD Billion1 Round 2 7,500 Round 2 Million Million 2021 $331.4 Over $21M $9.3 Million Million
Slide 13: Allocation of Allowance
ALLOCATION OF ALLOWANCE CECL allowances reflect the economic and market outlook December 31, 2020 March 31, 2021 Allowance for Credit Losses (ACL) on Loans CECL Model CECL Model $ in millions $250 1.47% 1.5% Allowance Allowance 1.44% for Credit % of for Credit % of Losses Outstanding Losses Outstand
Slide 14: Providing Relief to Our Customers
PROVIDING RELIEF TO OUR CUSTOMERS Active deferral exposure reduced as pandemic continues Payment Relief Requests Active deferrals1 Active deferrals1 as of December 31, 2020 as of March 31, 2021 Number Total Number Total % of Portfolio % of Portfolio Loan Type of Amount of of Amount of (by $ amount)
Slide 15: Loan Portfolio: Limited Exposure to Pandemic-Sensitive Industries
LOAN PORTFOLIO: LIMITED EXPOSURE TO PANDEMIC-SENSITIVE INDUSTRIES Loan Portfolio Outstandings % of $ in $ in Loan Highest Impacted millions millions Portfolio Highest Industries 12/31 3/31 3/31 Impacted CRE Retail 387 388 2.6% 9% Industries Hotels 303 309 2.1% Senior Living 311 307 2.0% All 91% Ener
Slide 16: 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 17: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Pre-tax, Pre-provision Net Revenue For The Three Months Ended (DOLLARS IN THOUSANDS) Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020 A Net Interest Income $ 205,748 $ 209,763 $ 201,065 B Non-Interest Income $ 136,045 $ 135,117 $ 123,663 C Non-Interest Expense $ 192,573 $ 196,310 $
Slide 18: Commerce Bancshares, Inc.
] Commerce Bancshares, Inc.