Commerce Bancshares, Inc. · NASDAQ:CBSH
Commerce Bancshares — Shareholder Meeting (April 2003)
21 slides from Commerce Bancshares's shareholder meeting presentation, Apr 21, 2003
Slide 1: Delivering on Our Promise
Delivering on Our Promise Commerce Bancshares, Inc. Annual Shareholders Meeting April 16, 2003 David W. Kemper
Slide 2: Largest Independent Bank in the Lower Midwest
Commerce Bancshares, Inc. Largest Independent Bank in the Lower Midwest Operates as a Super Community Bank $13 billion in assets 88% of Profits from 5 key markets 340 locations; 5100 FTEs
Slide 3: Solid Performance Across all Businesses
Solid Performance Across all Businesses During the past five years... 102% growth in personal demand deposit account balances 60% growth in retail fee income 51% increase in business loans 58% expansion in commercial fee income 47% rise in trust revenue Recent growth from organic sources, not acquis
Slide 4: Commerce Accomplishments 2001-2002
Commerce Accomplishments 2001-2002 Re-invigorated Consumer Non Mortgage Lending (YOY Volume Up 12%, Spread up 9%) Maintained Loan Losses at Historical Levels Major IT/Ops Conversions: Mainframe, Imaging, Trust Launched The Private Bank in St. Louis & KC Introduced Ask, Listen, Solve Branding Theme R
Slide 5: Our Strategy to Build the Platform for Tomorrow
Our Strategy to Build the Platform for Tomorrow Focus on Sales / Sales Management Invest heavily in people development and training Continue investment in discretionary technology (spent $55MM over the last six years) Enhance a "best-in-class" retail sales and service intranet platform Maintain indu
Slide 6: Expand the Retail Franchise: Transaction Market Share
Expand the Retail Franchise Continue to Grow Transaction Market Share 1994 1995 1996 1997 1998 1999 2000 2001 2002 Transaction HH 0.11 0.13 0.15 0.17 0.18 0.19 0.2 0.2 0.18 Retail Household 0.16 0.18 0.19 0.21 0.22 0.23 0.25 0.24 0.24 *90% Growth Since 1994 Growth Drivers. . .
Slide 7: Expand the Retail Franchise: Leverage the Transaction Account
Expand the Retail Franchise Leverage the Transaction Account Deepen Customer Penetration (Cross-sale) Savings 39% Bankcard 32% Debit Card 64% Superior Usage Relative to Peers #1 in the US for Visa Check card usage 45% more accounts make revenue-generating purchases 20% more transactions per active a
Slide 8: Payment Systems Success Story: Full Check Imaging
Payment Systems Success Story... Investment of $10 Million with a payback in 4 years Reduced manual encoding of checks by 60-70% Check retrieval/turnaround time reduced from 3 days to 3 seconds Check images made available to customers on-line .....Conversion to Full Check Imaging A Strategic Initiat
Slide 9: Leverage Opportunities with Commercial Customers
Leverage Opportunities with Commercial Customers Manage In a Slow Commercial Loan Growth Environment 1996 1997 1998 1999 2000 2001 2002 Commercial Loans 2641.8 3216.2 3789.9 4166.78 4342.53 4364 4375 Lending Profile: In-market, relationship-focused, no sub-prime, no sterile inbound syndication, no s
Slide 10: Commercial Fee Revenue Scorecard
Commercial Fee Revenue Scorecard Now Represents $113MM in Revenue or 44% of Total LOB Contribution* Drivers: Cash Sweep: Balances up 130% to $906MM Treasury Services: Wholesale Lockbox Volume up 119% ACH Volume up 47% Wire Volume up 32% International - 47% growth Loan Fees - 1400% growth Corporate C
Slide 11: Payment Systems Success Story: Enterprise Rent-A-Car
Payment Systems Success Story... Enterprise Rent-A-Car needed to manage and control its fleet expenses at 5,000+ offices. Solution: Multi-use corporate purchasing card with tailored electronic reporting. Commerce Purchasing Card Ranked among the top 20 purchasing card issuers in U.S. Last 5 years, v
Slide 12: Increase Contribution from Commerce Trust Company
Increase Contribution from Commerce Trust Company 2005 Estimate of Profit Contribution: 34% ($ in Billions) Growth Drivers. . .
Slide 13: Build the Platform for Tomorrow
Build the Platform for Tomorrow Migrate Customers to Cost-Efficient, Technology-Driven Service Teller ATM/POS VRU Other East 0.0055 0.0028 0.0014 0.0003 1996 Total 48 million 2002 Total 99 million CBSH Customer Contact Points* Teller ATM POS VRU Other PC Bkg East 0.0029 0.0028 0.0014 0.0021 0.0003 0
Slide 14: Cost Savings Success Story: Mainframe Conversion
Mainframe operations moved "in house" during 2002 Annual savings - $7 million Upgraded service levels No impact on customers Cost Savings Success Story... ....Mainframe Conversion
Slide 15: Develop Our Employees
Develop Our Employees Seasoned, tenured senior management team 100 most senior managers average 14 years with Commerce Performance compensation tied to budgeted growth in EPS Emphasis on employee development Upgrading the talent pool Be The Employer of Choice Incentive compensation $2MM to $24MM ove
Slide 16: Financial Highlights: Balance Sheet Summary
Financial Highlights Balance Sheet Summary as of March 31 ($ in Millions)
Slide 17: Financial Highlights: 1st Quarter
Financial Highlights 1st Quarter Ending as of March 31* ($ in Millions) *Restated to reflect stock option expense
Slide 18: Strong Performance at Lower Risk
Strong Performance at Lower Risk $5B to $10B >$10B CBSH 2002* ROA(2) 1.09% 1.27% 1.61% ROE(2) 12.41% 14.78% 14.71% Equity to Assets 8.78% 8.68% 10.92% Net yield % (TE) 4.22% 4.12% 4.39% Efficiency Ratio 61.39% 57.18% 57.94% Net Charge-off Ratio 0.67% 0.58% 0.43% Reserve % of Loans 1.32% 1.56% 1.66%
Slide 19: Growth in EPS and Stock Price
Growth in EPS and Stock Price 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Stock Price 12.24 12.18 18.12 23.01 35.39 34.97 29.26 38.55 37.13 39.29 EPS 1.18 1.29 1.35 1.55 1.75 1.99 2.24 2.5 2.6 2.89 Earnings Per Share Stock Price Scorecard. . .
Slide 20: Total Shareholder Return
Total Shareholder Return 1 Year 3 Years 10 Years S&P 500 -0.22 -0.14 0.09 CBSH 0.08 0.12 0.14 - -22% - -14% 9% 14% 12% 8% Scorecard. . .
Slide 21: Ten Years of Consistent Performance
Ten Years of Consistent Performance CAGR in revenue per share of 8% CAGR in earnings per share of 11% Average annual total return of 14% 18 consecutive years of record earnings 35 consecutive years of cash dividend increases; 9 consecutive years of 5% stock dividends Scorecard. . .
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