Commerce Bancshares, Inc. · NASDAQ:CBSH
Commerce Bancshares — Q3 2021 Earnings Presentation
20 slides from Commerce Bancshares's earnings presentation, 2021
Slide 1: Commerce Bancshares, Inc. Earnings Highlights 3rd Quarter 2021
COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 3rd 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: 3Q2021 Earnings Highlights
3Q2021 EARNINGS HIGHLIGHTS Highlights Well-positioned in a challenging environment PPNR1 • Net interest income increased 2.9% over Q2. $139.9 million • Net interest margin decreased 2 bps from Q2 to 2.58%. Net Income • Non-interest income totaled $137.5 million in Q3. $122.6 million – Non-interest i
Slide 4: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Quarterly Average Balances Change vs. $ in millions 3Q21 2Q21 3Q20 Highlights • Linked quarter (LQ) reflects lower business loans, mostly driven by PPP forgiveness (-$689.2 million) and lower Commercial1 $9,588.9 $(726.1) $(1,084.3) business R/E • LQ reflects decrease in per
Slide 5: Balance Sheet
BALANCE SHEET Loans Deposits QTD Average Balances QTD Average Balances $ billions $ billions +13% $27.7 $28.1 $24.7 -7% $11.1 $11.5 $16.4 $16.0 $9.8 $15.3 $5.7 $5.7 $5.7 3.69% 3.65% 3.74% $16.6 $16.6 $14.9 $10.7 $10.3 $9.6 .18% .07% .06% 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 Consumer Loans Loan Yield Non-In
Slide 6: Loan Portfolio
LOAN PORTFOLIO Period-End Balances QTD Average Balances $ in 000s 9/30/2021 6/30/2021 9/30/2020 QoQ YoY $ in 000s 9/30/2021 6/30/2021 9/30/2020 QoQ YoY Business $5,277,850 $5,803,760 $6,683,413 -9.1% -21.0% Business $5,437,498 $6,211,610 $6,709,200 -12.5% -19.0% Business excl. Business excl. 4,969,9
Slide 7: Balance Sheet: Low-Cost Deposits
BALANCE SHEET: LOW-COST DEPOSITS – 41% of Q3 average deposits were non-interest bearing. – Cost of interest-bearing deposits declined slightly. $30 0.20% 0.18% $25 0.15% Average Balance $20 0.12% $ in billions $15 0.09% 0.10% 0.07% $10 0.06% 0.05% $5 $0 0.00% 3Q20 4Q20 1Q21 2Q21 3Q21 Non Interest-Be
Slide 8: Earning Asset Optimization
EARNING ASSET OPTIMIZATION Prudently deploying excess deposits into higher-yielding assets $20.0 9.0% $18.0 8.0% $16.5 $2.6 $15.0 $2.7 7.0% $15.0 $1.6 $14.0 $1.5 $13.1 $1.1 $0.9 6.0% $0.8 $12.2 $1.0 $0.8 Average Balance $0.8 $9.8 $1.8 $ in billions $9.6 $9.7 $9.6 5.0% $0.3 $0.4 $10.0 $10.0 $0.3 $0.2
Slide 9: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS Change vs. $ in millions 3Q21 2Q21 3Q20 Highlights • Linked quarter (LQ) increase due to higher income on Net Interest Income $214.0 $6.1 $(1.9) investment securities, partially offset by lower interest earned on loans and securities purchased under agreements to resell N
Slide 10: Non-Interest Income Highlights
NON-INTEREST INCOME HIGHLIGHTS Change vs. $ in millions 3Q21 2Q21 3Q20 Highlights Bank Card Transaction Fees $42.8 $0.2 $4.9 • Increase of 13.0% over prior year (PY) driven by net corporate card fees • Increase of 5.8% over linked quarter (LQ), 20.1% over Trust Fees $49.0 $2.7 $8.2 PY resulting most
Slide 11: Non-Interest Expense Highlights
NON-INTEREST EXPENSE HIGHLIGHTS Change vs. $ in millions 3Q21 2Q21 3Q20 Highlights • Increase of 1.6% over linked quarter (LQ), 4.3% over Salaries and Employee Benefits $132.8 $2.1 $5.5 prior year (PY) mostly due to higher incentive compensation Net Occupancy $12.3 $0.8 $0.3 Equipment $4.4 $(0.2) $(
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 (=) $346 $347 $352 3Q2021 Comparison vs. 3Q2020 (9.5)% $191 vs. 2Q2021 (6.1)% $208 $198 $214 $212 $216 $155 $149 $140 $130 $139 $138 3Q2020 2Q2021 3Q2
Slide 13: Sound Capital and Liquidity Position
SOUND CAPITAL AND LIQUIDITY POSITION Tier 1 Risk-Based Capital Ratio1 Loan to Deposit Ratio Peer Median: 11.9% Large, stable deposit base OZK 14.5% CFR 54% 14.2% Core Deposits Average Loan to CBSH 14.2% Deposit Ratio3 SFNC 14.2% $26.5 Commerce 79% Average UBSI 13.7% Loan to UMPQ 12.4% Billion2 Depos
Slide 14: Maintaining Strong Credit Quality
MAINTAINING STRONG CREDIT QUALITY Net Loan Charge-Offs (NCOs) Allowance for Credit $ in millions Losses on Loans (ACL) .19% $ in millions .18% $10.6 .14% $311.3 $273.4 $7.6 $236.4 $7.0 .10% $172.4 $162.8 1.48% .02% $3.7 1.44% 1.37% $0.7 1.10% 1.07% 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 NCOs- CBSH NCO/Averag
Slide 15: Paycheck Protection Program Impact and Update
PAYCHECK PROTECTION PROGRAM IMPACT AND UPDATE Total Loan Originations1: Total SBA Fees: $1.9 Billion $60.4 Million Forgiven 84% 16% Remaining Recognized 85% 15% Remaining Yield and Interest Income2 Q3 2021, $ in millions 7.73% $47.0 $35.8 3.43% $11.2 2.92% Yield Interest Income Business Loans PPP Yi
Slide 16: Paycheck Protection Program Impact and Update
PAYCHECK PROTECTION PROGRAM IMPACT AND UPDATE Loan Portfolio Impact QTD Average Balances, $ in millions $6,761 $6,709 $6,580 $6,533 $6,211 $5,494 $1,244 $1,506 $1,476 $1,374 $5,437 $1,264 $575 $5,494 $5,517 $5,203 $5,104 $5,159 $4,947 $4,863 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 Business Loans (excl PP
Slide 17: Allocation of Allowance
ALLOCATION OF ALLOWANCE CECL allowances reflect the economic and market outlook Allowance for Credit Losses (ACL) on Loans June 30, 2021 September 30, 2021 $ in millions $250 1.60% Allowance Allowance for Credit % of for Credit % of 1.47% 1.44% Losses Outstanding Losses Outstanding $ in millions (AC
Slide 18: 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 19: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Pre-tax, Pre-provision Net Revenue For The Three Months Ended (DOLLARS IN THOUSANDS) Sept. 30, 2021 Jun. 31, 2021 Sept. 30, 2020 A Net Interest Income $ 214,037 $ 207,982 $ 215,962 B Non-Interest Income $ 137,506 $ 139,143 $ 129,572 C Non-Interest Expense $ 211,620 $ 198,126
Slide 20: Commerce Bancshares, Inc.
] Commerce Bancshares, Inc.