Commerce Bancshares, Inc. · NASDAQ:CBSH
Commerce Bancshares — Q2 2021 Earnings Presentation
17 slides from Commerce Bancshares's earnings presentation, 2021
Slide 1: Commerce Bancshares 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
2Q2021 EARNINGS HIGHLIGHTS Highlights Well-positioned in a challenging environment PPNR1 • Provision for credit losses was a net benefit due to: $149.0 million – $28.1 million decrease in the ACL on loans and an $18.2 million Provision for Credit Losses2 decrease in the liability for unfunded lendin
Slide 4: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Quarterly Average Balances Change vs. $ in millions 2Q21 1Q21 2Q20 Highlights • Linked quarter (LQ) reflects lower business loans, partially driven by PPP Commercial1 $10,315.0 $(332.9) $(303.6) forgiveness (-$109.8 million) • Increase over prior year (PY) driven by higher m
Slide 5: Balance Sheet
BALANCE SHEET Loans Deposits QTD Average Balances QTD Average Balances $ billions $ billions +19% $27.7 $26.5 $23.3 -1% $10.4 $11.1 $16.2 $16.3 $16.0 $8.8 $5.5 $5.7 $5.7 3.80% $16.6 3.66% 3.65% $14.5 $16.1 $10.6 $10.6 $10.3 0.25% 0.09% 0.07% 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 Consumer Loans Loan Yield No
Slide 6: Loan Portfolio
LOAN PORTFOLIO Period-End Balances QTD Average Balances $ in 000s 6/30/2021 3/31/2021 6/30/2020 QoQ YoY $ 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% Business $6,211,610 $6,532,921 $6,760,827 -4.9% -8.1% Construction 1,103,661 1,073,036 932,0
Slide 7: Income Statement Highlights
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 • LQ increase in bank card fees, trust fees, consumer brokerage services fees and deposi
Slide 8: 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 (=) $342 $347 $321 2Q2021 Comparison vs. 2Q2020 12.0% $198 vs. 1Q2021 (0.1)% $206 $193 $208 $188 $203 $149 $149 $133 $136 $139 $118 2Q2020 1Q2021 2Q20
Slide 9: Sound Capital and Liquidity Position
SOUND CAPITAL AND LIQUIDITY POSITION Tier 1 Risk-Based Capital Ratio1 Loan to Deposit Ratio Peer Median: 12.1% Large, stable deposit base and low SFNC 14.1% CFR 14.1% loan to deposit ratio OZK 58% Average 13.9% Core Deposits Loan to CBSH 13.8% Deposit Ratio 3 UBSI 13.4% $25.7 Commerce 81% Average UM
Slide 10: Maintaining Strong Credit Quality
MAINTAINING STRONG CREDIT QUALITY Net Loan Charge-Offs (NCOs) Allowance for Credit $ in millions Losses on Loans (ACL) $28.5 $ in millions $301.6 $289.2 .53% $240.7 .25% $200.5 .21% .13% $172.4 $8.4 $10.0 1.47% 1.43% $7.1 .02% 1.41% 1.22% $0.7 1.10% 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 NCOs- CBSH NCO/Avera
Slide 11: NIM Protection
NIM PROTECTION Hedging structures and low deposit costs provide support to net interest margin in low-rate environment Runoff Schedule of Asset Repo Agreements with Floor Spreads $1,000 $850 $850 $850 8% • Interest rate floors with a $800 $775 6% combined notional value of 5.1% 5.3% 5.0% 5.2% 5.1% $
Slide 12: Paycheck Protection Program Impact and Update
PAYCHECK PROTECTION PROGRAM IMPACT AND UPDATE Total Loan Originations1: Total SBA Fees: $1.9 Billion $60.2 Million Remaining 33% 45% Remaining Forgiven 55% 67% Recognized Yield and Interest Income Q2 2021, $ in millions 3.77% $48.8 $36.9 3.15% 3.00% $11.9 Yield Interest Income Business Loans2 PPP Yi
Slide 13: 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 $1,264 $5,494 $5,517 $5,203 $5,104 $5,159 $4,947 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Business Loans (excl PPP) PPP Loans Interest In
Slide 14: Allocation of Allowance
ALLOCATION OF ALLOWANCE CECL allowances reflect the economic and market outlook March 31, 2021 June 30, 2021 Allowance for Credit Losses (ACL) on Loans CECL Model CECL Model $ in millions $250 1.6% Allowance Allowance for Credit % of for Credit % of 1.47% Losses Outstanding Losses Outstanding 1.44%
Slide 15: 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 16: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Pre-tax, Pre-provision Net Revenue 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 $
Slide 17: Commerce Bancshares, Inc.
] Commerce Bancshares, Inc.