Commerce Bancshares, Inc. · NASDAQ:CBSH
Commerce Bancshares — Q2 2021 Earnings Presentation
17 slides from Commerce Bancshares's earnings presentation, Jul 22, 2021
Slide 1: Commerce Bancshares, Inc. Earnings Highlights 2nd Quarter 2021
COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 2nd 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: 2Q2021 Earnings Highlights
$1.38 EPS 3 • Provision for credit losses was a net benefit due to: – $28.1 million decrease in the ACL on loans and an $18.2 million decrease in the liability for unfunded lending commitments • Net charge-offs to total loans of 0.02% and non-performing assets to total loans of 0.07%. • Non-interest
Slide 4: Balance Sheet Highlights
Quarterly Average Balances Change vs. $ in millions 2Q21 1Q21 2Q20 Highlights Commercial1 $10,315.0 $(332.9) $(303.6) • Linked quarter (LQ) reflects lower business loans, partially driven by PPP forgiveness (-$109.8 million) Consumer 5,675.5 (9.6) 138.7 • Increase over prior year (PY) driven by high
Slide 5: Balance Sheet
$14.5 $16.1 $16.6 $8.8 $10.4 $11.1 2Q20 1Q21 2Q21 $23.3 $26.5 $27.7 +19% $10.6 $10.6 $10.3 $5.5 $5.7 $5.7 $16.0 1Q21 2Q212Q20 $16.2 $16.3 -1% BALANCE SHEET 5 Loans Consumer Loans Commercial Loans Loan Yield Deposits QTD Average Balances $ billions Non-Interest Bearing Interest Bearing Deposit Intere
Slide 6: Loan Portfolio
LOAN PORTFOLIO 6 $ in 000s 6/30/2021 3/31/2021 6/30/2020 QoQ YoY Business $5,803,760 $6,624,209 $6,858,217 -12.4% -15.4% Construction 1,103,661 1,073,036 932,022 2.9% 18.4% Business Real Estate 3,017,560 3,017,242 2,941,163 — 2.6% Personal Real Estate 2,793,213 2,828,418 2,690,542 -1.2% 3.8% Consume
Slide 7: Income Statement Highlights
Change vs. $ in millions 2Q21 1Q21 2Q20 Highlights Net Interest Income $208.0 $2.2 $4.9 • Linked quarter (LQ) increase due to larger balance sheet, partially offset by NIM compression Non-Interest Income $139.1 $3.1 $21.6 • LQ increase in bank card fees, trust fees, consumer brokerage services fees
Slide 8: Pre-Tax, Pre-Provision Net Revenue (PPNR)
8 PRE-TAX, PRE-PROVISION NET REVENUE (PPNR) $118 $133 $203 $188 2Q2020 $321 $136 $149 $206 $193 1Q2021 $342 $139 $149 $208 $198 2Q2021 $347 Non-Interest Income (+) Net Interest Income (+) Non-Interest Expense (-) Pre-Tax, Pre-Provision Net Revenue (=) 2Q2021 Comparison vs. 2Q2020 12.0% vs. 1Q2021 (0
Slide 9: Sound Capital and Liquidity Position
Average Loan to Deposit Ratio3 SOUND CAPITAL AND LIQUIDITY POSITION 9 Tier 1 Risk-Based Capital Ratio1 1S&P Global Market Intelligence, Information as of March 31, 2021 2Period-end balances, as of June 30, 2021 3Includes loans held for sale, for the quarter ended June 30, 2021 14.1% 14.1% 13.9% 13.8
Slide 10: Maintaining Strong Credit Quality
$8.4 $10.0 $0.7 $28.5 $7.1 1Q212Q20 2Q21 MAINTAINING STRONG CREDIT QUALITY 10 Net Loan Charge-Offs (NCOs) $ in millions NCOs- CBSH NCOs - Peer Average NCO/Average Loans1 - CBSH $240.7 $200.5 $172.4 $301.6 $289.2 2Q20 2Q211Q21 Allowance for Credit Losses on Loans (ACL) $ in millions ACL - CBSH ACL -
Slide 11: NIM Protection
$25 $20 $0 $5 $10 $15 $30 2Q20 3Q20 4Q20 1Q21 2Q21 0.25% 0.18% 0.12% 0.09% 0.07% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% $850 $850 $850 $775 $525 $400 $150 $150 $75 $75 5.1% 5.3% 5.0% 5.2% 5.1% 3.0% 3.3% 3.3% 0% 2% 4% 6% 8% $0 $200 $400 $600 $800 $1,000 3.0% 3.5% 4Q211Q20 2Q20 1Q21 2Q21 3Q21 1Q22 3Q222Q
Slide 12: Paycheck Protection Program Impact and Update: Yield and Interest Income
PAYCHECK PROTECTION PROGRAM IMPACT AND UPDATE 12 Yield and Interest Income Q2 2021, $ in millions 3.15% 3.77% 3.00% Yield PPP Yield and Fee RecognitionBusiness Loans2 Business Loans (ex PPP) $48.8 $11.9 $36.9 Interest Income Total Loan Originations1: $1.9 Billion Total SBA Fees: $60.2 Million 1Inclu
Slide 13: Paycheck Protection Program Impact and Update: Loan Portfolio Impact
PAYCHECK PROTECTION PROGRAM IMPACT AND UPDATE 13 Loan Portfolio Impact QTD Average Balances, $ in millions $5,494 $5,517 $5,203 $5,104 $5,159 $4,947 $1,244 $1,506 $1,476 $1,374 $1,264 $6,709 2Q214Q203Q201Q20 2Q20 1Q21 $6,761 $5,494 $6,580 $6,533 $6,211 Interest Income Impact $ in millions $47.9 $41.
Slide 14: Allocation of Allowance
ALLOCATION OF ALLOWANCE 14 CECL allowances reflect the economic and market outlook March 31, 2021 CECL Model June 30, 2021 CECL Model $ in millions Allowance for Credit Losses (ACL) % of Outstanding Loans Allowance for Credit Losses (ACL) % of Outstanding Loans Business $ 50.6 .76% $ 44.9 .77% Bus R
Slide 15: Capital for Business: Quick Facts
Quick Facts: Small Business Investment Company (SBIC) founded in 1959 Nationwide footprint with Greater Midwest Focus 31 Portfolio Companies Representing $682 million in Revenue Over 2,600 Employees Fair Value as of June 30, 2021: $116.2 million Investment Criteria • Manufacturing, distribution and
Slide 16: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 16 For The Three Months Ended (DOLLARS IN THOUSANDS) Jun. 30, 2021 Mar. 31, 2021 Jun. 30, 2020 A Net Interest Income $ 207,982 $ 205,748 $ 203,057 B Non-Interest Income $ 139,143 $ 136,045 $ 117,515 C Non-Interest Expense $ 198,126 $ 192,573 $ 187,512 Pre-Provision Net Reven
Slide 17: Commerce Bancshares, Inc.
Commerce Bancshares, Inc.