Commerce Bancshares, Inc. · NASDAQ:CBSH
Commerce Bancshares — Q1 2021 Earnings Presentation
18 slides from Commerce Bancshares's earnings presentation, Apr 15, 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
$1.11 EPS 3 • Allowance for credit losses on loans to total loans decreased to 1.22% – Decreased to 1.34% excluding Paycheck Protection Program (“PPP”) loans. • Net charge-offs to total loans of 0.25% and non-performing assets to total loans of 0.14%. • Loans on deferral of .9% of total loans. • Non
Slide 4: Balance Sheet Highlights
Average Balances Change vs. $ in millions 1Q21 4Q20 1Q20 Highlights Commercial1 $10,647.9 $4.9 $1,376.5 • Linked quarter (LQ) reflects lower business loans offset by higher construction loans • YoY reflects PPP Consumer 5,685.1 (33.2) 262.0 • LQ reflects higher personal real estate partially offset
Slide 5: Balance Sheet: Loans and Deposits
$13.7 $15.3 $16.1 $6.6 $10.3 $10.4 4Q20 $26.5 1Q20 1Q21 $20.3 $25.6 +31% $9.3 $10.7 $10.6 $5.4 $5.7 $5.7 4Q201Q20 1Q21 $14.7 $16.4 $16.3 +11% BALANCE SHEET 5 Loans Consumer Loans Loan Yield Commercial Loans Deposits QTD Average Balances $ billions Non-Interest Bearing Interest Bearing Deposit Intere
Slide 6: Income Statement Highlights
Change vs. $ in millions 1Q21 4Q20 1Q20 Highlights Net Interest Income $205.7 $(4.0) $4.7 • Linked quarter (LQ) decline due to lower earning asset yields partially offset by lower deposit costs and a larger balance sheet Non-Interest Income $136.0 $0.9 $12.4 • LQ increase in trust fees, capital mark
Slide 7: Pre-Tax, Pre-Provision Net Revenue (PPNR)
7 PRE-TAX, PRE-PROVISION NET REVENUE (PPNR) $124 $131 $201 $194 1Q2020 $325 $135 $149 $210 $196 4Q2020 $345 $136 $149 $206 $193 $342 1Q2021 Non-Interest Income (+) Net Interest Income (+) Non-Interest Expense (-) Pre-Tax, Pre-Provision Net Revenue (=) 1Q2021 Comparison vs. 1Q2020 13.9% vs. 4Q2020 0.
Slide 8: Sound Capital and Liquidity Position
Average Loan to Deposit Ratio3 SOUND CAPITAL AND LIQUIDITY POSITION 8 Tier 1 Risk-Based Capital Ratio1 1S&P Global Market Intelligence, Information as of December 31, 2020 2Period-end balances, as of March 31, 2021 3Includes loans held for sale, for the quarter ended March 31, 2021 13.7% 13.7% 13.5%
Slide 9: Maintaining Strong Credit Quality
$10.9 $8.0 $10.0 $12.3 $11.3 4Q201Q20 1Q21 MAINTAINING STRONG CREDIT QUALITY 9 Net Loan Charge-Offs (NCOs) $ in millions NCOs - Peer Average NCOs- CBSH NCO/Average Loans1 - CBSH $171.7 $220.8 $200.5 $261.0 $297.9 4Q201Q20 1Q21 Allowance for Credit Losses on Loans (ACL) $ in millions ACL - CBSH ACL -
Slide 10: Consumer Credit Card Delinquencies and Monthly Net Charge-Off Trends
CONSUMER CREDIT CARD DELINQUENCIES AND MONTHLY NET CHARGE-OFF TRENDS • Skip Pay was enacted for May and June 2020 payments to 100% of the portfolio • Delinquency and net charge-off levels have normalized $0 $1 $2 $3 $4 $5 $6 $0 $3 $6 $9 $12 $15 Dec18 Mar19 Jun19 Sep19 Dec19 Dec20Sep20Jun20Mar20 Mar2
Slide 11: NIM Protection
$0 $10 $30 $20 3Q201Q20 4Q202Q20 1Q21 0.45% 0.18% 0.12% 0.09% 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.25% $850 $850 $850 $850 $850 3.5% 5.1% 5.3% 5.2% 5.3% 0% 2% 4% 6% 8% $0 $200 $400 $600 $800 $1,000 2Q20 4Q201Q20 1Q213Q20 NIM PROTECTION Hedging structures and low deposit costs provide support to net inter
Slide 12: Paycheck Protection Program Impact and Update
PAYCHECK PROTECTION PROGRAM IMPACT AND UPDATE 12 Yield and Interest Income Q1 2021, $ in millions 3.09% 3.55% 2.97% Yield Business Loans2 PPP Yield and Fee Recognition Business Loans (ex PPP) $49.7 $12.0 $37.7 Interest Income Loan Balance Round 1 Round 2$1.5 Billion1 $331.4 Million Customers Round 1
Slide 13: Allocation of Allowance
ALLOCATION OF ALLOWANCE 13 CECL allowances reflect the economic and market outlook December 31, 2020 CECL Model March 31, 2021 CECL Model $ in millions Allowance for Credit Losses (ACL) % of Outstanding Loans Allowance for Credit Losses (ACL) % of Outstanding Loans Business $ 63.7 .97% $ 50.6 .76% B
Slide 14: Providing Relief to Our Customers
PROVIDING RELIEF TO OUR CUSTOMERS Active deferral exposure reduced as pandemic continues 14 Payment Relief Requests 1Deferrals are defined as modifications, payment deferrals, forbearance agreements, or change in terms, % of Portfolio calculated on Total Loans (excluding PPP loans); 2 No direct cons
Slide 15: Loan Portfolio: Limited Exposure to Pandemic-Sensitive Industries
LOAN PORTFOLIO: LIMITED EXPOSURE TO PANDEMIC-SENSITIVE INDUSTRIES 15 Highest Impacted Industries $ in millions 12/31 $ in millions 3/31 % of Loan Portfolio 3/31 CRE Retail 387 388 2.6% Hotels 303 309 2.1% Senior Living 311 307 2.0% Energy 173 186 1.2% Retail Stores 111 118 .8% Restaurants 67 64 .4%
Slide 16: Capital for Business: Quick Facts
Quick Facts: Small Business Investment Company (SBIC) founded in 1959 Nationwide footprint with Greater Midwest Focus 32 Portfolio Companies Representing $675MM in Revenue 2,600 Employees Fair Value as of March 31, 2021: $94.3MM Investment Criteria • Manufacturing, distribution and certain service c
Slide 17: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 17 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 $ 193,698 Pre-Provision Net Reven
Slide 18: Commerce Bancshares, Inc.
Commerce Bancshares, Inc.