Commerce Bancshares, Inc. · NASDAQ:CBSH
Commerce Bancshares — Q4 2022 Earnings Presentation
21 slides from Commerce Bancshares's earnings presentation, 2023
Slide 1: Commerce Bancshares, Inc. Earnings Highlights 4th Quarter 2022
COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 4th Quarter 2022
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 at a glance
COMMERCE BANCSHARES TOTAL ASSETS $31.9 157 YEARS IN BUSINESS BILLION TOTAL DEPOSITS $26.2 BILLION 42ND LARGEST U.S. BANK BASED ON ASSET SIZE1 TOTAL $16.3 LOANS2 BILLION MARKET CAP $8.5 BILLION $10.4 COMMERCIAL CARD VOLUME BILLION 22nd AS OF 12/31/2022 LARGEST U.S. BANK BASED ON MARKET CAP1 TOTAL TRU
Slide 4: 4Q2022 Highlights
4Q2022 HIGHLIGHTS Highlights Well-positioned for current environment PPNR1 • PPNR1 reached record level of $174.7 million, up 1.6% over Q3. $174.7 million • Net interest income increased 3.4% over Q3. Net Income • Net interest margin increased 17 bps over Q3 to 3.18%. $131.6 million • Non-interest i
Slide 5: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Quarterly Average Balances Change vs. $ in millions 4Q22 3Q22 4Q21 Highlights • Linked quarter (LQ) reflects growth in business and business real estate, partly Commercial1 $10,047.8 $183.3 $624.3 offset by a decline in construction loans Consumer 5,837.2 55.8 167.6 Total Lo
Slide 6: Balance Sheet: Loans and Deposits
BALANCE SHEET Loans Deposits QTD Average Balances QTD Average Balances $ billions $ billions -8% +5% $28.8 $27.8 $26.6 5.03% $11.9 $10.8 $10.4 4.37% $15.1 $15.6 $15.9 $5.7 3.62% $5.8 $5.8 $16.9 $17.0 $16.2 .21% .40% $9.4 $9.9 $10.1 .05% 4Q21 3Q22 4Q22 4Q21 3Q22 4Q22 Consumer Loans Loan Yield Non-Int
Slide 7: Deposit Balance Trends
DEPOSIT BALANCE TRENDS Segment view $ in millions Commercial Consumer Wealth Average Balance Growth Average Balance Growth +9% +15% CAGR CAGR $12,839 $13,398 $12,976 $11,991 $11,941 $11,282 $10,630 $10,236 $9,938 $7,848 Average Balance Growth +15% CAGR $2,966 $2,804 $2,502 $1,832 $2,271 2019 2020 20
Slide 8: Loan Portfolio
LOAN PORTFOLIO Period-End Balances QTD Average Balances $ in 000s 12/31/2022 9/30/2022 12/31/2021 QoQ YoY $ in 000s 12/31/2022 9/30/2022 12/31/2021 QoQ YoY Business $5,661,725 $5,528,895 $5,303,535 2.4% 6.8% Business $5,478,241 $5,317,696 $5,191,844 3.0% 5.5% Business excl. Business excl. 5,653,659
Slide 9: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS Change vs. $ in millions 4Q22 3Q22 4Q21 Highlights • Linked quarter (LQ) increase due to higher interest earned Net Interest Income $254.6 $8.3 $47.0 on loans, partly offset by lower interest earned on investment securities and higher interest expense Non-Interest Income
Slide 10: Non-Interest Income Highlights
NON-INTEREST INCOME HIGHLIGHTS Change vs. $ in millions 4Q22 3Q22 4Q21 Highlights • Higher corporate card fees more than offset by Bank Card Transaction Fees $44.6 $(1.1) $(.2) higher rewards Trust Fees $44.7 $(.7) $(4.2) • 4Q22 reflects lower market values on assets under management compared to pri
Slide 11: Non-Interest Expense Highlights
NON-INTEREST EXPENSE HIGHLIGHTS Change vs. $ in millions 4Q22 3Q22 4Q21 Highlights • Increase of 4.4% over prior year (PY) due to higher Salaries and Employee Benefits $138.5 $1.1 $5.8 full-time salaries and higher employee benefits expense Net Occupancy $11.8 $(.8) $(.5) Equipment $5.0 — $.3 Suppli
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 (=) $385 $391 $355 4Q2022 Comparison vs. 4Q2021 15.1% $213 $217 vs. 3Q2022 1.6% $246 $255 $208 $204 $172 $175 $152 $148 $139 $137 4Q2021 3Q2022 4Q2022
Slide 13: Maintaining Strong Credit Quality
MAINTAINING STRONG CREDIT QUALITY Net Loan Charge-Offs (NCOs) Allowance for Credit $ in millions Losses on Loans (ACL) $ in millions $5.6 $261.2 $280.9 $4.8 $4.3 $3.4 $150.0 $150.1 $2.6 1.22% $143.4 .14% 1.12% .11% .12% .99% .07% .04% .92% .90% 4Q21 3Q22 4Q22 4Q21 3Q22 4Q22 NCOs- CBSH NCO/Average Lo
Slide 14: Allocation of Allowance
ALLOCATION OF ALLOWANCE CECL allowances reflect the economic and market outlook Allowance for Credit Losses (ACL) on Loans September 30, 2022 December 31, 2022 $ in millions Allowance Allowance $250 1.60% 1.47% for Credit % of for Credit % of 1.44% Losses Outstanding Losses Outstanding $ in millions
Slide 15: Well-Positioned for Current Environment
WELL-POSITIONED FOR CURRENT ENVIRONMENT 15
Slide 16: Well-Positioned for Multiple Rate Environments
WELL-POSITIONED FOR MULTIPLE RATE ENVIRONMENTS Opportunities to enhance and protect NII in a Cost of Total Deposits & Deposit Beta: Prior & Current Fed Cycle rising rate environment. Cost of Total Deposits • Investment securities portfolio duration of 3.7 years. Before Fed Rate End of Fed Rate Depos
Slide 17: Summary of Fixed & Floating Loans
SUMMARY OF FIXED & FLOATING LOANS Over 55% of total loans are variable; 64% of commercial loans have floating rates Fixed Variable Business Construction Business RE Commercial Total Loans: $5.7B Total Loans: $1.4B Total Loans: $3.4B 5% 40% 43% 60% 57% 95% Personal RE Consumer HELOC Consumer Card Tot
Slide 18: Sound Capital and Liquidity Position
SOUND CAPITAL AND LIQUIDITY POSITION Tier 1 Risk-Based Capital Ratio1 Loan to Deposit Ratio Peer Median: 10.9% Large, stable deposit base PB 15.4% CBSH 60% 14.0% Core Deposits Average Loan to CFR 13.3% Deposit Ratio3 OZK 13.0% $25.2 Commerce 80% Average UBSI 12.4% Loan to BOKF 11.8% Billion2 Deposit
Slide 19: 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 20: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Pre-tax, Pre-provision Net Revenue For The Three Months Ended (DOLLARS IN THOUSANDS) Dec. 31, 2022 Sep. 30, 2022 Dec. 31, 2021 A Net Interest Income $ 254,641 $ 246,373 $ 207,657 B Non-Interest Income $ 136,825 $ 138,514 $ 147,699 C Non-Interest Expense $ 216,740 $ 212,884 $
Slide 21: Commerce Bancshares, Inc.
] Commerce Bancshares, Inc.