COMMERCE BANCSHARES, INC - INVESTOR UPDATE 1st Quarter 2021 Playing Offense in a Challenging Time
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Playing Offense in a Challenging Time COMMERCE BANCSHARES, INC. INVESTOR UPDATE 1st Quarter 2021
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, projections, estimates and intentions. These forward-
looking statements involve significant risks and uncertainties and are subject to change
based on various factors (some of which are beyond the Corporation’s control). Factors
that could cause the Corporation’s actual results to differ materially from such forward-
looking statements made herein or by management of the Corporation are set forth in
the Corporation’s 2020 Annual Report on Form 10-K, 1st Quarter 2021 Report on Form 10-
Q and the Corporation’s Current Reports on Form 8-K.
2
COMMERCE BANCSHARES $27.4 TOTAL DEPOSITS
155 YEARS IN BUSINESS TOTAL ASSETS
BILLION
$33.3 LARGEST U.S. BANK
BILLION 42ND BASED ON ASSET
SIZE1
$16.4 TOTAL LOANS2
BILLION
MARKET CAP
$9.0 COMMERCIAL CARD
BILLION 17TH
LARGEST U.S. BANK
BASED ON MARKET
CAP1
$8.5 VOLUME
BILLION AS OF 12/31/2020
12TH LARGEST COMMERCIAL
CARD ISSUER3
TOTAL TRUST ASSETS
UNDER ADMINISTRATION
$62.6 LARGEST AMONG U.S.
RETURN ON
BILLION AVERAGE COMMON
FULL-SERVICE BANKING FOOTPRINT
157 full-service branches and 343 ATMs
17TH
BANK-MANAGED TRUST
COMPANIES BASED ON
AUM1
15.7% EQUITY YTD
St. Louis ⬧ Kansas City ⬧ Springfield ⬧ Central Missouri YTD ROACE FOR THE TOP
Central Illinois ⬧ Wichita ⬧ Tulsa ⬧ Oklahoma City ⬧ Denver 11TH 50 U.S. BANKS BASED ON
ASSET SIZE1
COMMERCIAL OFFICES TIER 1 RISK-BASED
CAPITAL RATIO
Cincinnati ⬧ Nashville ⬧ Dallas ⬧ Des Moines
Indianapolis ⬧ Grand Rapids ⬧ Houston 13.8% BASELINE CREDIT
a1
HIGHEST AMONG TOP
U.S. PRESENCE 4TH 50 U.S. BANKS BASED
ON ASSET SIZE1
ASSESSMENT4
Extended Commercial Market Area MOODY’S RANKS COMMERCE
Commercial Payments Services 1 of 6 AMONG THE TOP 6 BANKS IN
THE COUNTRY
Offered in 48 states across the U.S.
Sources: 1S&P Global Market Intelligence – Regulated U.S. depositories, which includes commercial banks, bank holding companies, and credit unions, rankings as of
12/31/2020; 2Includes loans held for sale; 3Nilson Reports-Commercial Card: May 2020, based on the top 50 U.S. banks ranked by total assets as of 12/31/2019, S&P
Global Market Intelligence; 4Moody’s Credit Opinion – Commerce Bancshares, Inc., February 22, 2021, baseline Credit Assessment (BCA) reflects a bank’s
standalone credit strength; Company reports and filings information as of 03/31/2021 unless otherwise noted.
3
SUPER-COMMUNITY BANK PLATFORM
A consistent strategy with a long-term view
Customer relationship-based:
Community Bank Challenge Accepted.® Super-Regional Bank
• Award-winning High-performing teams and • Sophisticated payment
customer service system capabilities
engaged workforce
• Focus on the full client • Broad consumer
relationship Long history of top quartile product offerings
credit quality metrics • Private Banking; Trust;
• Core values
embraced by team Capital Markets
Investment in distinctive,
members • Shareholder driven and
high-return businesses strong financial
• Quickly adapt to performance
customer needs Focus on operational
and changing efficiencies • Competitive on unit
preferences costs
Disciplined approach to
acquisitions
4
OUR STRONG CULTURE IS THE KEY DRIVER TO
OUR LONG-TERM SUCCESS A culture
formed more
At Commerce, our core values shape the way we live and work. than 155 years
ago to be a
• We make decisions today that will force for good
We have a in our region
V sustain us well into the future.
long-term View and our industry
• We see diversity and inclusion as an
We collaborate
O imperative and seize opportunities to
as One team
build teams that reflect all sides of
We act with an issue.
I
Integrity • We value integrity, we recognize our
first duty is to conduct business in
We are
ways that merit trust and confidence,
C Customer
focused and that adhere to the highest
standards of governance and ethics.
We strive for
E • We value relationships, our
Excellence
customers are our primary focus.
5
BEYOND FINANCIALS
Supporting each other, our customers and our communities
“
As a socially responsible corporate citizen, we continuously
”
seek opportunities to make a difference.
500 2020 Engagement & Enablement
2
More than nonprofit
Consistently scoring above the U.S.
organizations supported High Performance and U.S. Financial
by Commerce team members through Services norms for engagement,
leadership roles by serving on boards enablement and effectiveness
OUTSTANDING
Community Reinvestment Act rating
83% 85%
ENABLEMENT ENGAGEMENT
for more than 20 years 1
1Federal Reserve Bank and Office of the Comptroller of the Currency
2The Korn Ferry Hay Group – 2020 survey results 6
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Robust ESG framework, including board oversight
and a cross-functional ESG management
committee – continued enhancements to our
program and reporting.
The inaugural ESG report assesses our impact in
several key areas:
• Environmental sustainability
• Customer, team member and community
engagement
• Corporate governance, including information
security and code of ethics
• Our response to COVID-19
2020 ESG Report is available on commercebank.com and Investor.commercebank.com
7
OUR COMMITMENT TO DIVERSITY, EQUITY
AND INCLUSION
Our longstanding approach of “doing what’s right” continues to guide
our focus on our team members, customers and communities
Our new Diversity, Equity and Inclusion
A culture that celebrates inclusion and diversity
Commerce offers a variety of internal resource
CBI Blue Chip includes four pillars that groups, mentoring programs and networking
focus both internally and externally. opportunities
We will build on the years of progress we
have already made regarding diversity.
Customer
Deeper focus on growing a diverse customer base
Connecting young Empowering women
Community professionals 1,300+ members
Investing, both financially and with our time in our 557+ members
communities
Supplier
Improve the diversity of our suppliers and spend
Engaging LGBTQIA+ Valuing multi-cultural
Internal community perspectives
Enhance internal talent mobility and external
392+ members 408+ members
recruiting practices to increase the diversity of our
teams and leaders
8
RECENT RECOGNITION
1
1The Korn Ferry Hay Group – based on 2018 survey results 9
FINANCIAL RESULTS
1Q2021
10FINANCIAL PERFORMANCE VS. PRIOR YEAR
Net Income Attributable to Earnings per Common Return on Total Average
CBI ($ in Millions)
$421 As of March 31
Share
As of March 31
Assets As of March 31
$3.41 1.67% 1.63%
$354 $2.91
1.20%
0.80%
$131 $1.11
$52 $0.42
YE 2019 YE 2020 YTD 2020 YTD 2021 YE 2019 YE 2020 YTD 2020 YTD 2021 YE 2019 YE 2020 YTD 2020 YTD 2021
Return on Average Common Period End Loans Period End Deposits
Equity As of March 31
($ in Billions) ($ in Billions) As of March 31
As of March 31
15.7% $26,947 $27,421
14.1%
10.6% $20,520 $20,776
$16,375 $16,430
6.5% $14,752 $15,080
YE 2019 YE 2020 YTD 2020 YTD 2021 YE 2019 YE 2020 YTD 2020 YTD 2021 YE 2019 YE 2020 YTD 2020 YTD 2021
111Q2021 EARNINGS HIGHLIGHTS
Highlights Well-positioned in a challenging environment
PPNR1
• Allowance for credit losses on loans to total loans decreased to 1.22%
$149.2 million
– Decreased to 1.34% excluding Paycheck Protection Program (“PPP”) loans.
Allowance for Credit
Losses on Loans2 • Net charge-offs to total loans of 0.25% and non-performing assets to total
loans of 0.14%.
$20.3 million decrease
• Loans on deferral of .9% of total loans.
Net Income
$131.0 million • Non-interest income to total revenue of 39.8%.
EPS • Non-interest income up 0.7% over Q4.
$1.11 • QTD average loans down slightly from Q4 at $16.3B.
ROAA • QTD average deposits increased $0.9B in Q1 compared to Q4.
1.63%
• Tangible common equity to tangible assets of 9.57%.
ROACE
• Net interest margin decreased 9 bps from Q4 to 2.71%.
15.69%
• Wealth management client assets increased in Q1 by 2.2% to $62.6B.
Deposit Growth3
$0.5 billion 1See the non-GAAP reconciliation on page 49; 2 Compared to
4Q2020; 3 Compared to 4Q2020, based on period-end balances 12BALANCE SHEET HIGHLIGHTS
Average Balances Change vs.
$ in millions 1Q21 4Q20 1Q20 Highlights
• Linked quarter (LQ) reflects lower
business loans offset by higher
construction loans
Commercial1 $10,647.9 $4.9 $1,376.5 • YoY reflects PPP
• LQ reflects higher personal real estate
partially offset by lower auto, credit
Consumer 5,685.1 (33.2) 262.0 card, home equity
Total Loans $16,333.0 $(28.3) $1,638.5
• Reflects net purchase activity
Investment Securities $12,863.1 $560.6 $4,139.9
• Reflects liquidity from deposit growth
Interest Earning Deposits with Banks $1,480.3 $397.7 $878.9
• 3.5% quarterly growth, 31% annual
Deposits $26,489.2 $898.6 $6,221.7 growth
• 5% annual growth
Equity $3,385.5 $49.3 $160.4
• 2.4% quarterly decline, 6.8% annual
Book Value per Common Share2 $28.34 $(.69) $1.80 growth
1 PPP QTD average balances were $1,374.0 million and $1,476.2 million as of March 31, 2021 and December 31, 2020, respectively
2 For the quarters ended March 31, 2021, December 31, 2020 and March 31, 2020
13BALANCE SHEET
Loans Deposits
QTD Average Balances QTD Average Balances
$ billions $ billions
+31%
$25.6 $26.5
+11%
$20.3 $10.4
$16.4 $16.3 $10.3
$14.7 $6.6
$5.7 $5.7
$5.4 4.39%
3.69% 3.66% $15.3 $16.1
$10.7 $10.6 $13.7
$9.3
0.45%
0.12% 0.09%
1Q20 4Q20 1Q21 1Q20 4Q20 1Q21
Consumer Loans Loan Yield Non-Interest Bearing Interest Bearing Deposit Yield
Commercial Loans Interest Bearing Deposit
14INCOME STATEMENT HIGHLIGHTS
Change vs.
$ in millions 1Q21 4Q20 1Q20 Highlights
• Linked quarter (LQ) decline due to lower earning
Net Interest Income $205.7 $(4.0) $4.7 asset yields partially offset by lower deposit
costs and a larger balance sheet
• LQ increase in trust fees, capital market fees and
loan fees and sales
Non-Interest Income $136.0 $0.9 $12.4 • Prior year (PY) increase mainly due to growth in
loan fees and sales, capital market fees and
trust fees; current year included a gain on a
branch sale
Non-Interest Expense $192.6 $(3.7) $(1.1) •
•
Decrease of 1.9% over LQ, .6% over PY
Salaries and benefits expense flat to PY
Pre-Tax, Pre-Provision Net Revenue1 $149.2 $0.7 $18.2
Investment Securities Gains • Q1 unrealized fair value gains of $8.4MM and a
(Losses), Net $9.9 $(2.5) $23.2 $1.5MM gain on sale of an investment in the
private equity portfolio
• Declines primarily driven by improvement in
Provision for Credit Losses $(6.2) $(1.8) $(64.2) economic forecast
Net-Income Available to Common $131.0 $1.1 $81.4
Shareholders
1Q21 4Q20 1Q20
Net Income per Common Share – $1.11 $1.11 $.42
Diluted
Efficiency Ratio 56.37% 56.68% 59.17% • Continued expense discipline
• Lower earning asset yields, partially offset by
Net Yield on Interest Earning Assets 2.71% 2.80% 3.33% lower deposit costs
1 See the non-GAAP reconciliation on page 49 15PRE-TAX, PRE-PROVISION NET REVENUE (PPNR)
Net Interest Income (+) Non-Interest Expense (-)
Non-Interest Income (+) Pre-Tax, Pre-Provision Net Revenue (=)
$345 $342
$325
1Q2021 Comparison
vs. 1Q2020 13.9%
$196 vs. 4Q2020 0.4%
$210 $206 $193
$201 $194
$149 $149
$131
$124 $135 $136
1Q2020 4Q2020 1Q2021
See the non-GAAP reconciliation on page 49 16SOUND CAPITAL AND LIQUIDITY POSITION
Tier 1 Risk-Based Capital Ratio1 Loan to Deposit Ratio
Peer Median: 11.8% Large, stable deposit base and low
CBSH 13.7%
CFR 13.5% loan to deposit ratio
62% Average
SFNC 13.4%
Core Deposits Loan to
OZK 13.4% Deposit Ratio 3
UBSI 13.3%
$25.6 Commerce
81%
UMPQ 12.3% Average Loan to
UMBF 12.1% Billion2 Deposit Ratio3
Peer Average
WBS 12.0%
BOKF 12.0%
ASB 11.8% Total Deposits
SSB 11.8%
ONB 11.8%
Core Deposits
BXS 11.7%
- Non-Interest
FMBI 11.6% Bearing
PNFP 10.9% - Interest Checking
VLY 10.7% Certificates of 6% 94% - Savings and
HWC 10.6% Deposit Money Market
FULT 10.5%
FNB 10.2%
WTFC 10.0%
1S&P Global Market Intelligence as of December 31, 2020; 2Period-end balances as of March 31, 2021; 3 S&P Global Market Intelligence,
includes loans held for sale for the quarter ended March 31, 2021, Peers include ASB, BXS, OZK, BOKF, CFR, FNB, FMBI, FULT, HWC, ONB, PNFP,
SFNC, SSB, UMBF, UMPQ, UBSI, VLY, WBS, WTFC 17MAINTAINING STRONG CREDIT QUALITY
Net Loan Charge-Offs (NCOs) Allowance for Credit
$ in millions Losses on Loans (ACL)
$12.5 $ in millions
$10.9 $11.2 $306.1 $289.2
$10.0
$251.9
$8.0 $7.1 $220.8 $200.5
$171.7
1.35% 1.49% 1.41%
1.36% 1.22%
.30% .28% .22% .25% 1.14%
.19%
1Q20 4Q20 1Q21 1Q20 4Q20 1Q21
NCOs- CBSH NCO/Average Loans1 - CBSH ACL - CBSH ACL / Total Loans - CBSH
NCOs - Peer Average NCO/Average Loans1 – Peer Average ACL - Peer Average ACL / Total Loans – Peer Average
Non-Performing Loans (NPLs) Allowance for Credit Losses on Loans (ACL) to NPLs
$ in millions
.75% 16.1x
.71% .66%
$137.9 $141.9 $131.8
8.3x 8.5x
.16%
.14%
.07%
$26.5 $23.5 2.4x 2.6x 2.8x
$10.6
1Q20 4Q20 1Q21 1Q20 4Q20 1Q21
NPLs - CBSH ACL / NPLs - CBSH ACL / NPLs - Peer Average
NPLs / Total Loans - CBSH
NPLs - Peer Average NPLs / Total Loans – Peer Average
Percentages are illustrative and not to scale; Peer Banks include: ASB, BXS, OZK, BOKF, CFR, FNB, FMBI, FULT, HWC, ONB, PNFP, SFNC, SSB, UMBF, UMPQ,
UBSI, VLY, WBS, WTFC; 1As a percentage of average loans (excluding loans held for sale) 18NET INTEREST INCOME: YTD – March 31, 2021
Quarterly Net Interest Income
$220 (Tax Equivalent) 4.0% • Net interest income (tax equivalent)
decreased $4.2 million from the prior
Net interest income –
$210 3.8%
quarter, which included a decline of
3.6%
$200 $426 thousand in TIPs inflation income.
$ in millions
3.4%
Net Yield
$190 3.2% • The net yield on interest earning assets
decreased 9 basis points compared to
$180 3.0%
the previous quarter.
2.8%
$170 2.6%
$160 2.4%
1Q20 2Q20 3Q20 4Q20 1Q21
2020 Net int inc 2021 Net int inc
TIPs Interest - $ in 000s
$8,000 262.5
Net Yield Adjusted Net Yield* 260.0
$6,000 257.5
*Adjusted to exclude TIPs inflation income
Interest income
$4,000 255.0
252.5
Tax equivalent - YTD 2020 2021 Change
CPI-U
$2,000 250.0
247.5
Rates earned - assets 3.66 % 2.76 % (0.90)% $0 245.0
-$2,000 242.5
Rates paid - liabilities 0.52 % 0.09 % (0.43)% 240.0
-$4,000 237.5
Net yield - earning assets 3.33 % 2.71 % (0.62)%
2Q20
2Q18
3Q18
1Q20
1Q18
3Q20
4Q20
4Q18
1Q21
2Q19
3Q19
1Q19
4Q19
Normal int. Inflation inc. CPI-U
19NIM PROTECTION
Hedging structures and low deposit costs provide support to net
interest margin in low-rate environment
Asset Repo Agreements • Interest rate floors with a
$1,000 8% combined notional value of
$850 $850 $850 $850 $850
$800 $1.5B to hedge the against
Average Balance
6%
declining interest rates were
$ in millions
$600
3.5% 5.1% 5.3% 5.2% 5.3% 4% monetized in 2020 with $133MM
$400 in gains to be recognized
$200 2% through 2026.
$0 0%
1Q20 2Q20 3Q20 4Q20 1Q21 • Asset repo agreements were
Asset Repo Agreements (left) Yield (right) structured with floor spreads to
protect against falling rates.
Total Deposits Asset repo agreements start
$30 0.5% maturing in Q2 2021.
0.45%
$25 0.4%
Average Balance
$20 • 39% of Q1 average deposits
$ in billions
0.25% 0.3%
$15 0.18% were non-interest bearing.
0.12% 0.2%
$10 0.09%
$5 0.1% • Cost of interest-bearing
$0 0.0% deposits continued to decline.
1Q20 2Q20 3Q20 4Q20 1Q21
Non Interest-Bearing Deposits (left)
Interest-bearing Deposits (left) Cost of Interest-Bearing Deposits (right) 20A FULL-SERVICE, DIVERSIFIED OPERATING MODEL
Card, Wealth & Deposit fees provide stable, growing revenue source
Revenue Source Diversification
Non-Interest Income
Compared to Peers1 $ in millions
2%
5% $501 $525 $506
$461
14%
5%
10% $124 $136
4%
4%
7% Commerce 2017 2018 2019 2020 YTD YTD
Bank Peers 2020 2021
4% Banks
12% 62% Continued focus on growing fee income through
71%
new and existing product and service offerings
• Prepaid Expense • Accounts Payable Automation
• RemitConnect® • Interest Rate Swaps
Net Interest Income Fees and Commissions • Claims Payments • CommerceHealthcare®
Wealth Management Card Income • Horizons • Asset Management
Deposit Service Charges Other
Peer Banks include: ASB, BXS, OZK, BOKF, CFR, FNB, FMBI, FULT, HWC, ONB, PNFP, SFNC, SSB, UMBF, UMPQ, UBSI, VLY, WBS, WTFC
1Source:S&P Global Market Intelligence as of December 31, 2020
21WELL-DIVERSIFIED LOAN PORTFOLIO
Loan Portfolio Diversification YTD Average Loans2
$s in millions
Compared to Peers1
$16,369
8% $15,916
30% $14,243
$13,946
4% $13,629
$12,953
20% 15%
37%
Commerce Peers 2016 2017 2018 2019 2020 YTD 20213
Bank Banks
21%
2021 Loan Growth by Category
(Average loans Mar. 2021 vs. Dec. 2020)
6% Business RE & construction $52 million
9%
17%
Personal RE $48 million
33%
Consumer credit card $29 million
Business Loans Business RE Consumer / HELOCs
Auto/ motorcycle/ other $34 million
Construction Residential RE Credit Card
Business/ lease/ tax-free $47 million
Peer Banks include: ASB, BXS, OZK, BOKF, CFR, FNB, FMBI, FULT, HWC, ONB, PNFP, SFNC, SSB, UMBF, UMPQ, UBSI, VLY, WBS, WTFC
1Source: S&P Global Market Intelligence as of December 31, 2020; 2Includes loans held for sale, as of December 31, 2020 unless noted otherwise;
3YTD through March 31, 2021 22PAYCHECK PROTECTION PROGRAM IMPACT
KEY METRICS
Loan Median Total SBA Fees
Customers
Balances Loan Size SBA Fees Recognized
Round 1 Round 1 Round 1 2020
Round 1 Round 1
$1.5 Over
$33K $41.0 $21.4 YTD
Billion1
Round 2
7,500 Round 2
Round 2
Million
$41.0
Million 2021
$331.4 Over
3,200 $21K $9.3
Million
Million Million
Yield and Interest Income
Q1 2021, $ in millions
3.55% Business Loans2 $49.7
PPP Yield and Fee Recognition $37.7
3.09% Business Loans (ex PPP)
2.97%
$12.0
Yield Interest Income
1Total funded amount in Round 1; Round 2 information through March 31, 2021
2Tax equivalent basis 23SUMMARY OF FIXED & FLOATING LOANS
Nearly 50% of total loans are variable; 49% of commercial loans
have floating rates Fixed Variable
Business Construction Business RE
Commercial
Total Loans: $6.5B Total Loans: $1.0B Total Loans: $3.0B
3%
47% 45%
53% 55%
97%
Personal RE Consumer HELOC Consumer Card
Total Loans: $2.8B Total Loans: $2.0B Total Loans: $0.3B Total Loans: $0.7B
Consumer
1% 5%
27%
34%
66%
73%
99% 95%
Source: 2020 10-K 24HIGH QUALITY, HIGHLY LIQUID AND DIVERSE
INVESTMENT PORTFOLIO
Composition of AFS Portfolio AFS Portfolio as of March 31, 2021
Total average investments3 $12.7 billion
5% 6% Treasury & agency
Unrealized gain3 $283.5 million
17% 16% Municipal 12 month maturities / pay-downs $2.3 billion
MBS Duration
December 2018 3.2 years
Other asset backed
December 2019 3.0 years
Corporate December 2020 3.3 years
56% March 2021 3.9 years
YTD Tax Equivalent Rate – Investments4
Duration
QTD - March 31, 2021 Avg Rate
(yrs) 3.0% 2.8% 2.8%
Treasury & agency1 1.7% 3.9 2.5%
2.5%
2.2%
Municipal 2.5%2 5.1
2.0%
1.7%
MBS 1.4% 4.2
1.5%
Other asset-backed 1.4% 1.7
1.0%
Corporate 2.2% 4.8 2017 2018 2019 2020 2021
1Excludes inflation effect on TIPs; 2Tax equivalent yield; 3QTD averages;
4Information as of YTD December 31 for previous years, current year is as of March 31 25ALLOCATION OF ALLOWANCE
CECL allowances reflect the economic and market outlook
December 31, 2020 March 31, 2021
Allowance for Credit Losses (ACL) on Loans
CECL Model CECL Model $ in millions
$250 1.47% 1.5%
Allowance Allowance 1.44%
for Credit % of for Credit % of
Losses Outstanding Losses Outstanding 1.35% 1.4%
$ in millions (ACL) Loans (ACL) Loans
Business $ 63.7 .97% $ 50.6 .76% 1.3%
1.22%
Bus R/E 30.1 .99% 35.6 1.18% $200
1.2%
Construction 27.7 2.72% 33.4 3.11% 1.14%
Commercial total $ 121.5 1.15% $ 119.6 1.12% 1.1%
$240.7 $236.4
Consumer 15.2 .78% 13.4 .68%
$220.8
Consumer CC 74.0 11.30% 59.5 10.03% 0.95%
1.0%
$150 $200.5
Personal R/E 8.3 .29% 6.6 .23%
$171.7 0.9%
Revolving H/E 1.5 .48% 1.2 .44%
Overdrafts .3 8.29% .2 4.6% $139.6 0.8%
Consumer total $ 99.3 1.73% $ 80.9 1.42%
Allowance for credit $ 220.8 1.35% $ 200.5 1.22% $100 0.7%
losses on loans 1/1/2020 1Q20 2Q20 3Q20 4Q20 1Q21
ACL - Loans (left) ACL / Total Loans (right)
26CONSUMER CREDIT CARD DELINQUENCIES
AND MONTHLY NET CHARGE-OFF TRENDS
$15 Skip Pay program effectively $6
“paused” delinquency and • Skip Pay was
charge-offs in 2020 $5 enacted for May
$12 and June 2020
payments to 100%
90-Day Delinquencies
$4
of the portfolio
Net Charge-offs
$9
$ in millions
$ in millions
$3
• Delinquency and
$6 net charge-off
$2 levels have
normalized
$3
$1
$0 $0
Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21
Credit card - 90-Day Delinquencies (left) Credit Card - Net Charge-Offs (right)
27COMMERCE AND COVID-19
28PROVIDING RELIEF TO OUR CUSTOMERS
Active deferral exposure reduced as pandemic continues
Payment Relief Requests
Active deferrals1 Active deferrals1
as of December 31, 2020 as of March 31, 2021
Number Total Number Total
% of Portfolio % of Portfolio
Loan Type of Amount of of Amount of
(by $ amount) (by $ amount)
Requests Requests Requests Requests
Commercial 8 .6% $57MM 8 1.3% $117MM
Mortgage 86 .7% $18MM 55 .5% $12MM
Consumer Card 93 .1% $0.6MM 18LOAN PORTFOLIO: LIMITED EXPOSURE TO
PANDEMIC-SENSITIVE INDUSTRIES
Loan Portfolio
Outstandings % of
$ in $ in Loan
Highest Impacted millions millions Portfolio
Industries 12/31 3/31 3/31
Highest CRE Retail 387 388 2.6%
Impacted Hotels 303 309 2.1%
9% Industries
Senior Living 311 307 2.0%
Energy 173 186 1.2%
All 91% Retail Stores 111 118 .8%
Other Restaurants 67 64 .4%
Loans Total $1,352 $1,372 9.1%
Industry breakdowns represent outstanding balances, excluding PPP loans, as of March 31, 2021, segmented by NAICS codes 30STRONG CAPITAL POSITION – FLEXIBILITY IN
CAPITAL PLANNING
53 consecutive years of regular common cash dividend increases1
Capital Returned to Common Shareholders as a percentage of Net Income2
Cash dividends paid on common stock (left)
$300 200%
Common share repurchase (left)
Payout Ratio (%)
$250 % Payout (right)
150%
$ in millions
$200
$150 100%
$100
50%
$50
$0 0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Capital Ratios – 3/31/2021 • Special cash dividend paid in 2012 totaled $131 million.
• 2014 included $200 million accelerated share repurchase in conjunction
Tier 1 common risk-based capital 13.8% with preferred stock issuance.
Tier 1 risk-based capital 13.8% • 2015 included a $100 million accelerated share repurchase.
Total risk-based capital 14.8% • 2019 included a $150 million accelerated share repurchase.
• In 2020, all $150 million of preferred equity was redeemed.
1Based on 1st quarter 2021 declared dividend; 2Net Income is
• Common cash dividends increased 10% in 2018, 16% in 2019, 9% in 2020
defined as Net Income Available to Common Shareholders and 2% in 2021 (based on 1Q2021 declared dividend).
31STRATEGIC POSITION
32STRATEGIC POSTURE: MAINTAINING THE BALANCE
STRONG PERFORMANCE with Disciplined focus on PRIORITY
ongoing refinement of the BLUE CHIP investments
“Core Bank”
• Diversity, Equity and
• Super-Community Bank platform Inclusion
• Relationship-based banking • Enterprise Digital Strategy
• High-touch customer service • Maximize Value of Key Retail
Clients
• Full suite of product and service
offerings • Grow the Private Bank Through
a New Transformative Model
• Disciplined attention to risk return
• Develop Claims Payment
• Divest in businesses & activities
that no longer provide • Accelerate Growth in
acceptable returns Healthcare
• A highly engaged team • Accelerate Expansion Market
Growth
• Focus on profitability and
shareholder return • Implement Transform 360
• Enhance the People Experience
Commerce
…emphasis on culture, collaboration and core values
EDGE 33CBI BLUE CHIP: ENTERPRISE DIGITAL STRATEGY
• Creates a single Digital Strategy expanding
OUR VISION
across all segments of the bank Transform the digital experience by staying
• Committed to delivering customer digital current on digital trends and creating
solutions more rapidly seamless digital ecosystems that place
• Elevates digital leadership to an executive Commerce Bank at the nexus of meeting
level customers’ financial needs.
WHY
• Our current and potential customers’
behaviors have changed, and they expect
more digital interactions
• Improved ability to leverage digital
product development expertise across
the enterprise
• Better positions us to remain competitive
with traditional and non-traditional
anywhere, competitors
any time.
34PLAYING OFFENSE: CONSUMER BANKING
Enhancing the Customer Experience
Engaging with customers through the channels
they prefer.
• Technology investments
• New engagement programs CommercePremier
• Enhanced product offerings
• Improved operating model
Consumer Digital
Evolving digital experiences to meet our
customers’ expectations.
• Offered digital account opening post-login
• Intelligent Marketing Pilot launched for loan products
2019 2020
• Implemented online banking chat for Mortgage customers
• Enhanced the password reset self-service functionality
22 21
releases releases
• Improved the account transaction history search and
calendar usability 35PLAYING OFFENSE: CONSUMER BANKING
Commerce Bank CONNECT® Mobile App
Personalized experience allowing customers to engage
with a banker they choose, right from their smartphone
• First in the region to introducing this innovation, enabling
high-touch service through a digital channel
• Secure platform for customers to message directly with
their banker
Commerce Bank Mortgage Mortgage
An end-to-end, fully coordinated solution that allows the made simple.
consumer to transact via web, phone, face‐to‐face (now Stress less.
virtually) or any combination – throughout the loan lifecycle,
including servicing. We’ve got this.
• Continue to enhance the digital mortgage platform; e-Closing
implementation
• Continue to evolve and transform the sales process to align with
changing customer behavior
36PLAYING OFFENSE: INTERNAL INNOVATION AT
COMMERCE
TOOLS
Internal software development Commerce’s commitment to As innovation and technology rapidly
events to rapidly build, test, and promoting an innovative mindset, drive change, our customers’ needs
promote new products or services from everyday incremental and expectations continue to evolve.
for both internal and external improvement to transformative AGILE enables our organization to
customers. changes in the way we do business. meet this disruption head on.
Customer Relationship Management
Customer Advising &
KEY PROJECTS
Referral Assistant (CARA)
Commercial Wealth is a guided conversation A bank-wide project to
Project completed in Q4 2020 to align all tool that helps us better replace the existing
Commercial business lines on Insight360. understand our customers’ mainframe core system
needs, make consistent with a new and modern
Ongoing enhancements being made on recommendations, and solution.
both platforms to improve sales, service free up time to concentrate
and marketing interactions with customers on building relationships
and prospects. with our clients.
nCino Platform & Insight360 leveraged for
CARES Act Programs.
37PLAYING OFFENSE: CONSUMER BANKING
157 Full-service 354
$12.2 $2.0 1.1
branches ATMs
BILLION BILLION MILLION
Consumer Consumer Consumer
Deposits1 Loans2 Households1
Focus on Digital
Commerce Digital HH Digital Loan Mobile
Bank App Rating Penetration Sales (000s) Deposit Use
4.7 65.9% $47,165 24%
4.7
Period end balances. All information as of December 31, 2020
1Excludes Wealth segment 2Excludes loans from our Wealth segment and $1.9 billion of personal real estate loans 38TM
For high-net-worth individuals who are looking to simplify their complex financial life,
Commerce Trust Company provides a full-service approach to wealth management.
17TH $61 $38 $611
Largest Among
Bank-Managed
BILLION BILLION MILLION
Trust Total Client Assets Under Managed
Companies1 Assets2 Management Brokerage
Assets
Total Client Assets2 Assets Under Management
$ in billions $61.2 $ in billions
$56.7
$48.7 $50.0 $38.2
$43.1 $34.4
$30.0 $30.3
$25.4
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Period end balances. Information as of December 31, 2020
1S&P Global Market Intelligence ranking as of 12/31/2020, based on assets under management
2Assets under administration 39TM
Key Growth Initiatives Strengthening our wealth brands
• Implement new Private TM
Banking Lending System
• Accelerate growth of Mass
Affluent households
• Implement enhanced sales
process with new Client
Relationship Management
system
TM
• Expand the CTC brand
• Enhance the digital client
experience
• Invest in team training and
onboarding resources
40COMMERCIAL BANKING
Revenue growth opportunities
Financing solutions – options for all sizes and types of businesses
• Equipment Financing
• Working Capital Lines of Credit • Government Lending Programs
• International Financing
• Term Financing • Interest Rate Swaps
• Employee Stock & Ownership Financing
• Construction & Real Estate Loans • Floor Plan Lending
• Tax-exempt Financing
$10.9 $11.3 $609
BILLION BILLION MILLION
Commercial Commercial Commercial
Loans Deposits Revenue
Commercial Loans Commercial Deposits Commercial Revenue
$ in billions $10.9 $ in billions $11.3 $ in millions
$609
$9.6
$9.1 $548 $547
$8.0 $8.1
2018 2019 2020 2018 2019 2020 2018 2019 2020
Commercial segment as of December 31, 2020 41COMMERCIAL BANKING – EXPANSION
MARKETS OFFER GROWTH OPPORTUNITIES
Fee Income
Expansion Market Loan Growth Growth
Team Overview for
106%
$ in millions Expansion
Market Loan
$2,466 Growth
Expansion Markets
$2,316 since 2015 # of team members per market
$2,200
110% (includes open positions)
$1,913 since 2015 2020
$1,619
Oklahoma 48
$1,338
Texas 19
Denver 42
Cincinnati/
12
Indianapolis
2015 2016 2017 2018 2019 2020 Nashville 4
Expansion Markets
Oklahoma Nashville Des Moines 3
• Cincinnati • Houston
Texas Des Moines • Dallas • Indianapolis
• Denver • Nashville Grand Rapids 2
Denver Grand Rapids • Des Moines • Oklahoma City
Cincinnati & Indianapolis • Grand Rapids • Tulsa
Period end balances as of December 31, 2020 42INDUSTRY-LEADING COMMERCIAL
PAYMENTS CAPABILITIES
Innovative payments solutions to manage payables
and receivables to streamline cash flow
Key Verticals
$174 Payments
MILLION Revenue
Tailored return on investment-based solutions
Treasury
$52.3 Management
enables healthcare providers to enhance the
patient experience, improve cash flow, and
MILLION leverage new opportunities in everyday
Revenue
processes.
$8.5 Commercial
BILLION Card Volume Claims Payments
With the help of our insurance advisory council,
Claims Payments was built for the industry with
$6.1 Merchant the input of insurance experts. We help insurance
BILLION Volume companies provide faster payments to their
customers.
Information as of December 31, 2020 43COMMERCE HEALTHCARE
Specialty Healthcare Division
We build and implement innovative banking technologies to improve
the patient payment experience, reduce cost and accelerate cash
Well-positioned to deliver our payment automation technologies as
healthcare organizations re-design their supply chain processes and
help patients manage their healthcare bills
Patient Lending solutions
reached $1 billion in
Recognized by Beckers as
a ‘Top Healthcare
You focus on
funding since inception Company to Know’ patients.
Providing payment Successfully completed We’ll focus on
automation solutions to ‘HFMA Peer Review’ payments.
more than 350 hospitals certification
nationwide
Expanding our solutions portfolio
*HFMA staff and volunteers determined that these healthcare business solutions have met specific criteria developed under the HFMA Peer Review process.
HFMA does not endorse or guarantee the use of these healthcare business solutions or that any results will be obtained 44CARD PRODUCTS – A LEADER AMONG
TOP 50 U.S. BANKS
Consistently ranked among the top issuers in the Nilson Report
Commercial Consumer
#12
Commercial
#7
Purchasing 1
#9 Bank
#12
Consumer
#20 #11
Debit Prepaid
Card Issuer Card Issuer Acquirer Card Card Card
A full suite of innovative card and payment product offerings
• Health Services Financing
• Claims Payments
• Multi Account Chip
• Co-Brand
• Prepaid Expense
• Credit Card Installment
opportunity during purchase
• Contactless Visa® Debit Card Early adopter
1
Includes fleet cards
Source: Nilson Reports (Debit: April 2020; Consumer Card: February 2020; Prepaid: September 2020; Merchant: March 2020; Purchasing: May 2020;
Commercial Card: May 2020), based on the top 50 U.S. banks ranked by total assets as of 12/31/2019, S&P Global Market Intelligence 45COMMERCE BANK MAINTAINS SOLID
PERFORMANCE OVER TIME
Return on Average Assets
2.0%
1.5% ROAA 10-yr average
1.0% CBSH: 1.31%
0.5% Peers: 0.96%
0.0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Commerce Peer Median Large Bank Median
Return on Average Common Equity
20.0%
15.0% ROACE 10-yr average
10.0% CBSH: 12.4%
5.0% Peers: 8.0%
0.0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Commerce Peer Median Large Bank Median
Peer Banks include: ASB, BXS, OZK, BOKF, CFR, FNB, FMBI, FULT, HWC, ONB, PNFP, SFNC, SSB, UMBF, UMPQ, UBSI, VLY, WBS, WTFC
Large Banks include: JPM, BAC, C, WFC, USB, TFC, PNC, FITB, CFG, KEY
Sources: S&P Global Market Intelligence and company reports and filings as of 12/31/2020 46LONG-TERM VIEW: NET INCOME AND EARNINGS PER SHARE
$450 $4.00
Earnings Per Share Net Income
Earnings per Share (EPS)
$400
$3.50
$350
Net Income
$3.00
$300
$ 000s
$250 $2.50
$200
$2.00
$150
$1.50
$100
$50 $1.00
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Dividends $0.57 $0.59* $0.61 $0.64 $0.67 $0.71 $0.74 $0.81 $0.94 $1.03
per share
EPS REMAINS STRONG
2021 MARKS THE 53 RD CONSECUTIVE YEAR OF DIVIDEND GROWTH
*Including 2012 special dividend = $1.56
All data has been restated for 5% stock dividend distributed in December 2020
Net Income represents Net Income Available to Common Shareholders 47STEADY SHAREHOLDER RETURNS
as of March 31, 2021
Annualized Comparison
Total Shareholder Returns
Indexed, 3/31/2006 = $100 Total Shareholder Returns
Percent
$450 CBSH KBW Bank
COMMERCE 100
400 90 NASDAQ Bank S&P 500
S&P 500
80
350
70
300 60
250
NASDAQ
200 BANK 10
150 KBW BANK 0
1 Year 3 Year 5 Year 10 Year 15 Year
100 CBSH 62.4% 15.8% 18.7% 14.5% 10.3%
NASDAQ
50 BANK 91.6% 6.7% 13.9% 12.1% 4.7%
0
KBW
BANK
90.1% 7.4% 16.4% 11.4% 3.4%
2007 2009 2011 2013 2015 2017 2019 2021
S&P 56.3% 16.8% 16.3% 13.9% 10.0%
Consistent, positive returns to shareholders
Significant outperformance relative to banks over long period
Source: Bloomberg; data as of 3/31/2021 48NON-GAAP RECONCILIATIONS
Pre-tax, Pre-provision Net Revenue
For The Three Months Ended
(DOLLARS IN THOUSANDS) Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020
A Net Interest Income $ 205,748 $ 209,763 $ 201,065
B Non-Interest Income $ 136,045 $ 135,117 $ 123,663
C Non-Interest Expense $ 192,573 $ 196,310 $ 193,698
Pre-Provision Net Revenue (A+B-C) $ 149,220 $ 148,570 $ 131,030
49Contact Information:
Matthew Burkemper
Senior Vice President, Commerce Bank
Corporate Development and Investor Relations
314.746.7485
Matthew.Burkemper@commercebank.com
Commerce Bancshares, Inc. Investor Relations website:
http://investor.commercebank.com/
50Playing Offense in a Challenging Time
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