Commerce Bancshares, Inc. · NASDAQ:CBSH
Commerce Bancshares — Q1 2024 Earnings Presentation
25 slides from Commerce Bancshares's earnings presentation, 2024
Slide 1: Commerce Bancshares, Inc. Earnings Highlights 1st Quarter 2024
PEOPLE, GROWTH AND POSSIBILITIES COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 1st Quarter 2024
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 $30.4 158 YEARS IN BUSINESS BILLION TOTAL DEPOSITS $24.4 BILLION 41st LARGEST U.S. BANK BASED ON ASSET SIZE2 MARKET CAP TOTAL $17.3 LOANS3 BILLION $6.9 BILLION $9.9 COMMERCIAL CARD VOLUME 22nd BILLION AS OF DECEMBER 31, 2023 LARGEST U.S. BANK BASED ON MARKET CAP2 TOT
Slide 4: Track Record of Long-Term Outperformance
TRACK RECORD OF LONG-TERM OUTPERFORMANCE Revenue Diversification Deposit Franchise Continued Long-Term Investments Balanced earnings profile, fee $23.0 billion in low-cost, diverse revenue at 37%1 of total revenue, deposits2 with peer-leading Core banking system bolstered by growing wealth and histo
Slide 5: 1Q2024 Highlights
1Q2024 HIGHLIGHTS Highlights Well-positioned for current environment PPNR1 • Net interest income up slightly over Q4 at $249MM. $152.2 million • Net interest margin increased 16 bps over Q4 to 3.33%. Net Income • Total cost of deposits increased 4 bps to 1.38%, compared to $112.7 million an increase
Slide 6: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Quarterly Average Loans: Flat compared to Balances 1Q24 vs. 4Q23 1Q24 vs. 1Q23 the prior quarter, 1% growth annualized $ in millions 1Q24 $ Change % Change $ Change % Change Investment securities: Net maturities and Commercial $11,073.7 $44.2 0% $528.4 5% paydowns providing
Slide 7: Balance Sheet
BALANCE SHEET Loans Deposits QTD Average Balances QTD Average Balances $ billions $ billions +4% 6.27% 6.15% -3% $25.2 $25.2 $24.4 5.56% $9.1 $7.7 $7.3 $16.4 $17.1 $17.1 1.93% 1.97% $5.9 $6.1 $6.0 $16.1 .71% $17.5 $17.1 $10.5 $11.0 $11.1 1Q23 4Q23 1Q24 1Q23 4Q23 1Q24 Consumer Loans Loan Yield Non-In
Slide 8: Loan Portfolio
LOAN PORTFOLIO Period-End Balances QTD Average Balances $ in 000s 3/31/2024 12/31/2023 3/31/2023 QoQ YoY $ in 000s 3/31/2024 12/31/2023 3/31/2023 QoQ YoY Business $5,994,974 $6,019,036 $5,704,467 -.4% 5.1% Business $5,873,525 $5,861,229 $5,656,104 .2% 3.8% Construction 1,497,647 1,446,764 1,437,419
Slide 9: Commercial Real Estate Breakdown
COMMERCIAL REAL ESTATE BREAKDOWN Real Estate - Business Loans: Office Outstanding Balances by Geography1 Other Real Estate - Business Loans Midwest Other States States Real Estate - % of Total Business Loans Loans $3.7 billion CO OH 7.5% 0.8% IL 5.1% Owner – Occupied 6.9% Owner- OK 2.5% 32.1% occupi
Slide 10: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS Pre-Tax, Pre-Provision Net Revenue (PPNR) $ in millions Net Interest Income (+) 1Q24 Comparison PPNR, excluding FDIC Non-Interest Income (+) special assessments and a vs. 1Q23 (7.9)% Non-Interest Expense (-) one-time litigation vs. 4Q23 7.1% settlement accrual, was Pre-Ta
Slide 11: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS 1Q24 vs. 4Q23 1Q24 vs. 1Q23 $ in millions 1Q24 $ Change % Change $ Change % Change Net Interest Income $249.0 $.6 0% $(2.6 ) (1)% Non-Interest Income $148.8 $4.0 3% $11.2 8% Non-Interest Expense $245.7 $(5.6) (2)% $21.6 10% Pre-Tax, Pre-Provision Net Revenue1 $152.2 $10.1
Slide 12: Non-Interest Income Highlights
NON-INTEREST INCOME HIGHLIGHTS 1Q24 vs. 4Q23 1Q24 vs. 1Q23 $ in millions 1Q24 $ Change % Change $ Change % Change Bank Card Transaction Fees $46.9 $(.9) (2)% $.3 1% Bank Card Fees: Decrease from Q4 was Trust Fees 51.1 2.0 4% 5.8 13% driven by seasonality. Deposit Account Charges Trust Fees: 24.2 .6
Slide 13: Non-Interest Expense Highlights
NON-INTEREST EXPENSE HIGHLIGHTS 1Q24 vs. 4Q23 1Q24 vs. 1Q23 Total non-interest expense: Increase of 3% over prior year $ in millions 1Q24 $ Change % Change $ Change % Change excluding FDIC and litigation Salaries and Employee settlement accruals1 Benefits $151.8 $4.3 3% $7.4 5% Data Processing and S
Slide 14: Liquidity and Capital
LIQUIDITY AND CAPITAL 14
Slide 15: Liquidity and Capital Highlights
LIQUIDITY AND CAPITAL HIGHLIGHTS Liquidity Balance Sheet / Deposits • $1.6B in cash at Federal Reserve Bank (FRB) • QTD Average loan to deposit ratio of 70%. at Q1. • Optimizing sources and uses of funding, allowing high cost • AFS debt securities portfolio duration of CDs to mature. 4.2 years. • To
Slide 16: Deposit Balance Trends
DEPOSIT BALANCE TRENDS Segment view $ in billions Commercial Consumer Wealth $13.4 $12.8 $12.6 $12.0 $11.9 $12.1 $12.1 $12.2 $12.3 $12.4 $11.3 $10.5 $10.6 $10.4 $9.9 $9.9 $10.0 $9.3 $3.0 $2.8 $2.3 $2.3 $2.3 $2.4 $2.3 $2.5 $2.4 2020 2021 2022 3Q23 4Q23 1Q24 3Q23 4Q23 1Q24 2020 2021 2022 3Q23 4Q23 1Q2
Slide 17: Well-Positioned for Multiple Rate Environments
WELL-POSITIONED FOR MULTIPLE RATE ENVIRONMENTS Opportunities to enhance and protect NII. Cost of Total Deposits & Deposit Beta: Prior & Current Fed Cycle • Net yield on interest earning assets increased 16 bps Cost of Total Deposits over Q4 to 3.33%. Before Fed Rate End of Fed Rate Deposit • Loan yi
Slide 18: Summary of Fixed & Floating Loans
SUMMARY OF FIXED & FLOATING LOANS Over 57% of total loans are variable; 65% of commercial loans have floating rates Fixed Variable Business Construction Business RE Commercial Total Loans: $6.0B Total Loans: $1.4B Total Loans: $3.7B 3% 40% 41% 60% 59% 97% Personal RE Consumer HELOC Consumer Card Tot
Slide 19: High Quality, Highly Liquid and Diverse Investment Portfolio
HIGH QUALITY, HIGHLY LIQUID AND DIVERSE INVESTMENT PORTFOLIO Composition of AFS Portfolio As of March 31, 2024 Total available for sale securities Average balance: $9.5 billion, at fair value Duration QTD – March 31, 2024 Avg Rate (yrs) Treasury & agency Treasury & agency1 1.61% 2.5 5% 9% Municipal
Slide 20: Sound Capital and Liquidity Position
SOUND CAPITAL AND LIQUIDITY POSITION Tier 1 Risk-Based Capital Ratio1 Loan to Deposit Ratio Peer Median: 11.7% Large, stable deposit base PB 15.5% 15.3% 70% Average Loan to CBSH Core Deposits CFR 13.7% Deposit Ratio3 UBSI 13.1% $22.0 Commerce 84% UCBI 12.6% Average Loan to HWC 12.3% Billion2 Deposit
Slide 21: Maintaining Strong Credit Quality
MAINTAINING STRONG CREDIT QUALITY Net Loan Charge-Offs (NCOs) Allowance for Credit $ in millions Losses on Loans (ACL) $ in millions $10.1 $280.5 $312.1 $8.0 $8.9 $6.8 $6.1 $159.3 1.17% $162.4 1.24% $160.5 .19% .21% .17% .10% .16% .96% .94% .93% 1Q23 4Q23 1Q24 1Q23 4Q23 1Q24 NCOs- CBSH NCO/Average L
Slide 22: Allocation of Allowance
ALLOCATION OF ALLOWANCE CECL allowances reflect the economic and market outlook Allowance for Credit Losses (ACL) on Loans Dec. 31, 2023 March 31, 2024 $ in millions $225 1.40% Allowance for % of Allowance for % of Credit Losses Outstanding Credit Losses Outstanding $ in millions (ACL) Loans (ACL) L
Slide 23: 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 Leveraged buyouts • Manufacturing, distribution and Succession plans Small Business Investment certain service compani
Slide 24: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Pre-tax, Pre-provision Net Revenue For The Three Months Ended (DOLLARS IN THOUSANDS) Mar. 31, 2024 Dec. 31, 2023 Mar. 31, 2023 A Net Interest Income $ 248,999 $ 248,421 $ 251,623 B Non-Interest Income $ 148,848 $ 144,879 $ 137,612 C Non-Interest Expense $ 245,697 $ 251,254 $
Slide 25: Commerce Bancshares, Inc.
] Commerce Bancshares, Inc.