Commerce Bancshares, Inc. · NASDAQ:CBSH
Commerce Bancshares — Q3 2022 Earnings Presentation
19 slides from Commerce Bancshares's earnings presentation, 2022
Slide 1: Commerce Bancshares, Inc. Earnings Highlights 3rd Quarter 2022
COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 3rd 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: 3Q2022 Earnings Highlights
3Q2022 EARNINGS HIGHLIGHTS Highlights Well-positioned for current environment PPNR1 • PPNR1 increased 8.7% over Q2. $172.0 million • Net interest income increased 6.0% over Q2. Net Income • Net interest margin increased 22 bps over Q2 to 3.01%. $122.8 million • Non-interest income decreased .7% from
Slide 4: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Quarterly Average Balances Change vs. $ in millions 3Q22 2Q22 3Q21 Highlights • Linked quarter (LQ) reflects growth in business real estate and construction, Commercial1 $9,864.5 $90.6 $275.6 partly offset by a decline in business loans Consumer 5,781.4 69.8 111.3 Total Loan
Slide 5: Balance Sheet
BALANCE SHEET Loans Deposits QTD Average Balances QTD Average Balances $ billions $ billions -1% $28.1 $28.7 $27.8 +3% $11.5 $11.2 $10.8 $15.3 $15.5 $15.6 $5.7 $5.7 $5.8 4.37% 3.74% 3.72% $17.5 $16.6 $17.0 $9.6 $9.8 $9.8 .06% .07% .21% 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Consumer Loans Loan Yield Non-Inte
Slide 6: Loan Portfolio
LOAN PORTFOLIO Period-End Balances QTD Average Balances $ in 000s 9/30/2022 6/30/2022 9/30/2021 QoQ YoY $ in 000s 9/30/2022 6/30/2022 9/30/2021 QoQ YoY Business $5,528,895 $5,441,592 $5,277,850 1.6% 4.8% Business $5,317,696 $5,385,181 $5,437,498 -1.3% -2.2% Business excl. Business excl. 5,507,081 5,
Slide 7: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS Change vs. $ in millions 3Q22 2Q22 3Q21 Highlights • Linked quarter (LQ) increase due to higher interest earned Net Interest Income $246.4 $14.0 $32.3 on loans, partly offset by lower interest earned on investment securities and higher interest expense Non-Interest Income
Slide 8: Non-Interest Income Highlights
NON-INTEREST INCOME HIGHLIGHTS Change vs. $ in millions 3Q22 2Q22 3Q21 Highlights Bank Card Transaction Fees $45.6 $1.8 $2.8 • Increase of 6.6% over prior year (PY) driven by growth in net corporate card fees • 3Q2022 reflects lower market values on assets Trust Fees $45.4 $(1.4) $(3.5) under manage
Slide 9: Non-Interest Expense Highlights
NON-INTEREST EXPENSE HIGHLIGHTS Change vs. $ in millions 3Q22 2Q22 3Q21 Highlights • Increase of 3.4% over prior year (PY) due to higher full-time salaries expense partly offset by lower incentive compensation expense Salaries and Employee Benefits $137.4 $(4.8) $4.6 • Decrease from linked quarter (
Slide 10: 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 $372 $352 3Q2022 Comparison vs. 3Q2021 22.9% $213 vs. 2Q2022 8.7% $214 $246 $232 $214 $212 $172 $158 $140 $138 $140 $139 3Q2021 2Q2022 3Q2022
Slide 11: Maintaining Strong Credit Quality
MAINTAINING STRONG CREDIT QUALITY Net Loan Charge-Offs (NCOs) Allowance for Credit $ in millions Losses on Loans (ACL) $ in millions $4.8 $270.0 $275.8 $3.7 $4.0 $4.0 $3.6 $162.8 1.29% $138.0 $143.4 1.12% .10% .07% .10% .12% 1.07% .06% .90% .88% 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 NCOs- CBSH NCO/Average L
Slide 12: Allocation of Allowance
ALLOCATION OF ALLOWANCE CECL allowances reflect the economic and market outlook Allowance for Credit Losses (ACL) on Loans June 30, 2022 September 30, 2022 $ in millions Allowance Allowance $250 1.60% 1.47% for Credit % of for Credit % of 1.44% Losses Outstanding Losses Outstanding $ in millions (AC
Slide 13: Well-Positioned for Current Environment
WELL-POSITIONED FOR CURRENT ENVIRONMENT 13
Slide 14: 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 Before Fed Rate End of Fed Rate Deposit of 3.9 year
Slide 15: Summary of Fixed & Floating Loans
SUMMARY OF FIXED & FLOATING LOANS Over 50% of total loans are variable; 62% of commercial loans have floating rates Fixed Variable Business Construction Business RE Commercial Total Loans: $5.3B Total Loans: $1.1B Total Loans: $3.1B 4% 42% 44% 58% 56% 96% Personal RE Consumer HELOC Consumer Card Tot
Slide 16: Sound Capital and Liquidity Position
SOUND CAPITAL AND LIQUIDITY POSITION Tier 1 Risk-Based Capital Ratio1 Loan to Deposit Ratio Peer Median: 11.0% Large, stable deposit base PB 15.3% CBSH 56% 13.9% Core Deposits Average Loan to OZK 13.7% Deposit Ratio3 CFR 13.2% $26.5 Commerce 77% Average UBSI 12.7% Loan to SFNC 12.1% Billion2 Deposit
Slide 17: 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 18: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Pre-tax, Pre-provision Net Revenue For The Three Months Ended (DOLLARS IN THOUSANDS) Sep. 30, 2022 Jun. 30, 2022 Sep. 30, 2021 A Net Interest Income $ 246,373 $ 232,385 $ 214,037 B Non-Interest Income $ 138,514 $ 139,427 $ 137,506 C Non-Interest Expense $ 212,884 $ 213,505 $
Slide 19: Commerce Bancshares, Inc.
] Commerce Bancshares, Inc.