Commerce Bancshares, Inc. Reports Second Quarter Earnings Per Share of $1.10

7/16/26 6:00:00 AM ET

Major Banks

Finance

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Commerce Bancshares, Inc. announced earnings of $1.10 per share for the three months ended June 30, 2026, compared to $1.09 per share in the same quarter last year and $.96 per share in the first quarter of 2026. Net income for the second quarter of 2026 amounted to $159.8 million, compared to $152.5 million in the second quarter of 2025 and $141.6 million in the prior quarter.

For the six months ended June 30, 2026, earnings per share totaled $2.06 compared to $2.02 for the first six months of 2025. Net income amounted to $301.4 million for the six months ended June 30, 2026, compared to $284.1 million in the comparable period last year. For the year to date, the return on average assets was 1.73%, and the return on average equity was 13.96%.

In making this announcement, John Kemper, Chief Executive Officer, said, "Commerce delivered a strong quarter, with expanding net interest margin, solid loan growth, lower funding costs and excellent credit quality. These results drove a return on average assets of 1.84% and reflect the strength of our business model, our diversified revenue streams and our team’s continued focus on long-standing customer relationships."

Mr. Kemper continued, "Revenue growth was broad-based during the quarter. Net interest income increased as margin expanded to 3.77%, and fee revenue grew $8.0 million this quarter, supported by continued strength in trust, bank card and deposit-related businesses. We believe this balanced revenue mix remains a key differentiator for Commerce and supports consistent performance across economic cycles."

"We remained focused on disciplined capital management. During the quarter, we repurchased approximately 2.1 million shares of common stock for $110 million while maintaining a strong capital position. This gives us flexibility to invest in growth, support our customers and continue returning capital to shareholders."

"We also completed the repositioning of a portion of our available for sale securities portfolio, including the sale of our Treasury inflation-protected securities portfolio. This repositioning increases the portfolio’s overall yield, improves the consistency of future net interest income, and supports a more durable net interest margin over time. We believe these portfolio changes strengthen Commerce’s long-term earnings profile and position us to deliver sustained shareholder value."

Second Quarter 2026 Financial Highlights:

Net interest income was $315.1 million, a $15.2 million increase over the prior quarter. The net yield on interest earning assets increased 18 basis points to 3.77%.

Non-interest income totaled $183.8 million, an increase of $8.0 million, or 4.5%, over the prior quarter and was 37% of total revenue in both the current and prior quarters.

Trust fees grew $15.9 million, or 28.7%, over the same period last year, and bank card fees grew $2.5 million, or 5.6%, over the prior quarter.

Non-interest expense totaled $297.1 million, an increase of $5.9 million, or 2.0%, over the prior quarter.

Assets under administration grew $3.1 billion, or 3.4%, over the same period last year.

Average loan balances totaled $20.5 billion, an increase of $176.6 million, or .9%, over the prior quarter.

Total average available for sale debt securities decreased $247.1 million from the prior quarter to $8.7 billion, at fair value.

Investment securities gains included a $105.4 million gain on Visa Inc. stock and a $97.7 million loss on the repositioning of a portion of the Company’s available for sale debt securities portfolio, which included the sale of the Company’s portfolio of U.S. Treasury inflation-protected securities.

Total average deposits decreased $135.0 million, or .5%, from the prior quarter to $27.6 billion.

The ratio of annualized net loan charge-offs to average loans was .19% in the current quarter compared to .30% in the prior quarter.

The allowance for credit losses on loans decreased $3.2 million during the second quarter of 2026 to $195.4 million, and the ratio of the allowance for credit losses on loans to total loans was .94% at June 30, 2026, compared to .97% at March 31, 2026.

The Company purchased approximately 2.1 million shares of its common stock during the current quarter at an average price of $53.03.

Total assets on June 30, 2026 were $35.3 billion, a decrease of $448.1 million from the prior quarter.

For the quarter, the return on average assets was 1.84%, the return on average equity was 14.70%, and the efficiency ratio was 58.40%.

Commerce Bancshares, Inc. is a regional bank holding company offering a full line of banking services through its subsidiaries, including payment solutions, wealth management and securities brokerage. Commerce Bank, its primary subsidiary, brings over 160 years of experience helping individuals and businesses through high-touch service and sophisticated, personalized financial solutions. Commerce maintains an extensive network of banking centers, wealth offices, and ATMs throughout the Midwest, as well as commercial offices in 11 states and offers payment solutions nationwide. With the acquisition of FineMark Holdings, Inc., Commerce builds on its existing private banking and wealth management presence in Florida and adds wealth offices in Arizona and South Carolina. Customers can conveniently access their account 24/7 using mobile and online platforms, as well as a customer service line.

This financial news release and the supplementary Earnings Highlights presentation are available on the Company’s website at https://investor.commercebank.com/news-info/financial-news-releases/default.aspx.


COMMERCE BANCSHARES, INC. and SUBSIDIARIES FINANCIAL HIGHLIGHTS

(Unaudited) (Dollars in thousands, except per share data)	For the Three Months Ended						For the Six Months Ended
	Jun. 30, 2026		Mar. 31, 2026		Jun. 30, 2025		Jun. 30, 2026		Jun. 30, 2025
FINANCIAL SUMMARY
Net interest income	$315,085		$299,840		$280,147		$614,925		$549,249
Non-interest income	183,828		175,851		165,613		359,679		324,562
Total revenue	498,913		475,691		445,760		974,604		873,811
Investment securities gains (losses)	12,830		11,647		437		24,477		(7,154	)
Provision for credit losses	8,731		10,960		5,597		19,691		20,084
Non-interest expense	297,068		291,126		244,437		588,194		482,813
Income before taxes	205,944		185,252		196,163		391,196		363,760
Income taxes	45,775		40,881		42,400		86,656		79,364
Non-controlling interest expense (income)	379		2,748		1,284		3,127		325
Net income attributable to Commerce Bancshares, Inc.	$159,790		$141,623		$152,479		$301,413		$284,071
Earnings per common share:
Net income — basic	$1.10		$0.96		$1.09		$2.06		$2.02
Net income — diluted	$1.10		$0.96		$1.09		$2.06		$2.02
Effective tax rate	22.27	%	22.40	%	21.76	%	22.33	%	21.84	%
Fully-taxable equivalent net interest income	$317,475		$302,204		$282,428		$619,679		$553,844
Average total interest earning assets ⁽¹⁾	$33,779,032		$34,130,985		$30,629,715		$33,954,036		$30,764,662
Diluted wtd. average shares outstanding	144,309,038		145,856,608		139,211,807		145,078,548		139,467,137
RATIOS
Average loans to deposits ⁽²⁾	74.44	%	73.44	%	70.22	%	73.94	%	69.80	%
Return on total average assets	1.84		1.62		1.95		1.73		1.82
Return on average equity ⁽³⁾	14.70		13.22		17.40		13.96		16.63
Non-interest income to total revenue	36.85		36.97		37.15		36.91		37.14
Efficiency ratio ⁽⁴⁾	58.40		60.00		54.77		59.19		55.18
Net yield on interest earning assets	3.77		3.59		3.70		3.68		3.63
EQUITY SUMMARY
Cash dividends per share	$.275		$.275		$.262		$.550		$.524
Cash dividends on common stock	$39,861		$40,355		$36,761		$80,216		$73,627
Book value per share ⁽⁵⁾	$30.45		$29.64		$26.12
Market value per share ⁽⁵⁾	$57.75		$49.20		$59.21
High market value per share	$58.43		$56.06		$62.99
Low market value per share	$48.74		$46.99		$50.18
Common shares outstanding ⁽⁵⁾	143,894,124		145,979,271		140,090,686
Tangible common equity to tangible assets ⁽⁶⁾	11.39	%	11.07	%	10.86	%
Tier I leverage ratio	12.81	%	12.60	%	12.75	%
OTHER QTD INFORMATION
Number of bank/ATM locations	248		249		239
Full-time equivalent employees	4,976		4,960		4,658
(1) Excludes allowance for credit losses on loans and unrealized gains/(losses) on available for sale debt securities.
(2) Includes loans held for sale.
(3) Annualized net income attributable to Commerce Bancshares, Inc. divided by average total equity.
(4) The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of total revenue.
(5) As of period end.
(6) The tangible common equity ratio is a non-gaap ratio and is calculated as stockholders’ equity reduced by goodwill and other intangible assets (excluding mortgage servicing rights) divided by total assets reduced by goodwill and other intangible assets (excluding mortgage servicing rights).
All share and per share amounts have been restated to reflect the 5% stock dividend distributed in December 2025.

COMMERCE BANCSHARES, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) (In thousands, except per share data)	For the Three Months Ended										For the Six Months Ended
(Unaudited) (In thousands, except per share data)	Jun. 30, 2026		Mar. 31, 2026		Dec. 31, 2025		Sep. 30, 2025		Jun. 30, 2025		Jun. 30, 2026		Jun. 30, 2025
Interest income	$407,331		$396,507		$373,617		$374,105		$371,636		$803,838		$736,001
Interest expense	92,246		96,667		90,465		94,648		91,489		188,913		186,752
Net interest income	315,085		299,840		283,152		279,457		280,147		614,925		549,249
Provision for credit losses	8,731		10,960		15,993		20,061		5,597		19,691		20,084
Net interest income after credit losses	306,354		288,880		267,159		259,396		274,550		595,234		529,165
NON-INTEREST INCOME
Trust fees	71,512		71,049		62,125		58,412		55,571		142,561		112,163
Bank card transaction fees	48,121		45,585		46,761		45,551		46,362		93,706		91,955
Deposit account charges and other fees	29,259		28,578		27,949		27,427		26,248		57,837		52,870
Consumer brokerage services	5,862		5,444		5,185		6,698		5,383		11,306		10,168
Capital market fees	5,667		5,338		4,230		5,138		6,175		11,005		11,287
Loan fees and sales	3,274		3,243		3,594		3,465		3,419		6,517		6,823
Other	20,133		16,614		16,364		14,820		22,455		36,747		39,296
Total non-interest income	183,828		175,851		166,208		161,511		165,613		359,679		324,562
INVESTMENT SECURITIES GAINS (LOSSES), NET	12,830		11,647		2,929		7,885		437		24,477		(7,154	)
NON-INTEREST EXPENSE
Salaries and employee benefits	179,954		180,787		162,889		157,461		155,025		360,741		308,103
Data processing and software	38,241		38,328		35,273		33,555		32,904		76,569		65,142
Professional and other services	16,506		18,792		14,573		11,284		12,973		35,298		22,999
Net occupancy	14,638		15,308		13,172		13,474		13,654		29,946		27,674
Marketing	6,413		6,957		6,201		6,670		5,974		13,370		11,817
Equipment	5,870		5,671		5,682		5,421		5,157		11,541		10,405
Supplies and communication	5,484		5,238		4,841		4,837		4,962		10,722		10,008
Deposit Insurance	3,841		3,914		(81	)	3,074		3,312		7,755		7,056
Other	26,121		16,131		10,445		8,242		10,476		42,252		19,609
Total non-interest expense	297,068		291,126		252,995		244,018		244,437		588,194		482,813
Income before income taxes	205,944		185,252		183,301		184,774		196,163		391,196		363,760
Less income taxes	45,775		40,881		40,620		41,152		42,400		86,656		79,364
Net income	160,169		144,371		142,681		143,622		153,763		304,540		284,396
Less non-controlling interest expense (income)	379		2,748		2,019		2,104		1,284		3,127		325
Net income attributable to Commerce Bancshares, Inc.	$159,790		$141,623		$140,662		$141,518		$152,479		$301,413		$284,071
Net income per common share — basic	$1.10		$0.96		$1.01		$1.01		$1.09		$2.06		$2.02
Net income per common share — diluted	$1.10		$0.96		$1.01		$1.01		$1.09		$2.06		$2.02
OTHER INFORMATION
Return on total average assets	1.84	%	1.62	%	1.73	%	1.78	%	1.95	%	1.73	%	1.82	%
Return on average equity ⁽¹⁾	14.70		13.22		14.70		15.26		17.40		13.96		16.63
Efficiency ratio ⁽²⁾	58.40		60.00		56.23		55.26		54.77		59.19		55.18
Effective tax rate	22.27		22.40		22.41		22.53		21.76		22.33		21.84
Net yield on interest earning assets	3.77		3.59		3.60		3.64		3.70		3.68		3.63
Fully-taxable equivalent net interest income	$317,475		$302,204		$285,830		$281,770		$282,428		$619,679		$553,844
(1) Annualized net income attributable to Commerce Bancshares, Inc. divided by average total equity. (2) The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of total revenue.

COMMERCE BANCSHARES, INC. and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - PERIOD END

(Unaudited) (In thousands)	Jun. 30, 2026		Mar. 31, 2026		Jun. 30, 2025
ASSETS
Loans
Business	$7,115,984		$6,750,356		$6,328,684
Real estate — construction and land	1,493,455		1,581,789		1,405,398
Real estate — business	4,064,253		4,059,539		3,757,778
Real estate — personal	4,369,077		4,407,606		3,058,845
Consumer	2,527,448		2,475,353		2,157,867
Revolving home equity	649,332		619,178		364,429
Consumer credit card	561,277		557,733		576,151
Overdrafts	52,655		9,510		16,316
Total loans	20,833,481		20,461,064		17,665,468
Allowance for credit losses on loans	(195,375	)	(198,605	)	(165,260	)
Net loans	20,638,106		20,262,459		17,500,208
Loans held for sale	3,799		2,081		3,592
Investment securities:
Available for sale debt securities	8,322,634		8,646,127		8,915,779
Trading debt securities	57,651		44,329		46,630
Equity securities	114,724		56,193		54,511
Other securities	242,737		248,339		219,906
Total investment securities	8,737,746		8,994,988		9,236,826
Federal funds sold	2,010		630		—
Securities purchased under agreements to resell	1,150,000		850,000		850,000
Interest earning deposits with banks	2,260,162		3,270,046		2,624,264
Cash and due from banks	645,674		572,588		522,049
Premises and equipment — net	527,679		527,211		477,401
Goodwill	253,805		253,805		146,539
Other intangible assets — net	140,482		145,985		13,333
Other assets	909,704		837,463		910,035
Total assets	$35,269,167		$35,717,256		$32,284,247
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing	$8,172,552		$8,058,024		$7,393,559
Savings, interest checking and money market	17,320,654		17,877,836		15,727,549
Certificates of deposit of less than $100,000	1,017,503		1,032,114		986,014
Certificates of deposit of $100,000 and over	1,364,993		1,416,345		1,386,906
Total deposits	27,875,702		28,384,319		25,494,028
Federal funds purchased and securities sold under agreements to repurchase	2,428,291		2,576,723		2,596,461
Other borrowings	26,291		8,045		15,049
Other liabilities	557,078		421,771		518,595
Total liabilities	30,887,362		31,390,858		28,624,133
Stockholders’ equity:
Common stock	742,606		742,606		676,054
Capital surplus	3,993,098		3,986,353		3,386,218
Retained earnings	353,023		233,094		255,938
Treasury stock	(232,318	)	(120,692	)	(96,589	)
Accumulated other comprehensive income (loss)	(498,731	)	(539,592	)	(581,049	)
Total stockholders’ equity	4,357,678		4,301,769		3,640,572
Non-controlling interest	24,127		24,629		19,542
Total equity	4,381,805		4,326,398		3,660,114
Total liabilities and equity	$35,269,167		$35,717,256		$32,284,247

COMMERCE BANCSHARES, INC. and SUBSIDIARIES AVERAGE BALANCE SHEETS

(Unaudited) (In thousands)	For the Three Months Ended
(Unaudited) (In thousands)	Jun. 30, 2026		Mar. 31, 2026		Dec. 31, 2025		Sep. 30, 2025		Jun. 30, 2025
ASSETS:
Loans:
Business	$6,864,328		$6,687,131		$6,317,805		$6,230,019		$6,247,252
Real estate — construction and land	1,545,640		1,592,328		1,408,339		1,396,977		1,430,758
Real estate — business	4,062,672		4,045,670		3,730,679		3,715,597		3,692,405
Real estate — personal	4,386,681		4,417,131		3,058,834		3,059,913		3,048,895
Consumer	2,472,965		2,421,541		2,200,500		2,160,637		2,148,666
Revolving home equity	630,034		611,101		372,194		360,820		362,312
Consumer credit card	544,688		555,697		565,896		563,351		559,858
Overdrafts	7,291		7,144		6,592		7,037		5,663
Total loans	20,514,299		20,337,743		17,660,839		17,494,351		17,495,809
Allowance for credit losses on loans	(198,032	)	(201,769	)	(175,129	)	(164,623	)	(166,391	)
Net loans	20,316,267		20,135,974		17,485,710		17,329,728		17,329,418
Loans held for sale	1,462		2,361		2,532		2,369		1,741
Investment securities:
U.S. government and federal agency obligations	3,365,011		3,190,796		3,197,720		2,693,327		2,623,896
Government-sponsored enterprise obligations	54,593		54,800		54,955		55,014		55,038
State and municipal obligations	695,988		709,332		724,737		756,137		780,063
Mortgage-backed securities	4,015,292		4,211,068		4,316,799		4,461,056		4,641,295
Asset-backed securities	1,056,932		1,201,187		1,336,859		1,466,770		1,585,364
Other debt securities	171,284		176,676		196,633		204,281		237,385
Unrealized gain (loss) on debt securities	(693,080	)	(630,778	)	(645,595	)	(766,025	)	(838,028	)
Total available for sale debt securities	8,666,020		8,913,081		9,182,108		8,870,560		9,085,013
Trading debt securities	53,144		97,801		61,160		56,032		51,131
Equity securities	92,386		50,378		52,387		50,823		54,472
Other securities	247,335		250,641		227,395		220,041		216,560
Total investment securities	9,058,885		9,311,901		9,523,050		9,197,456		9,407,176
Federal funds sold	733		862		—		23		158
Securities purchased under agreements to resell	934,617		850,000		850,000		850,000		850,000
Interest earning deposits with banks	2,575,956		2,997,340		2,786,891		2,422,441		2,036,803
Other assets	1,986,886		2,074,538		1,700,147		1,709,247		1,671,763
Total assets	$34,874,806		$35,372,976		$32,348,330		$31,511,264		$31,297,059

LIABILITIES AND EQUITY:
Non-interest bearing deposits	$8,034,747		$7,874,488		$7,592,431		$7,345,156		$7,356,882
Savings	1,330,292		1,301,768		1,261,285		1,283,671		1,303,391
Interest checking and money market	15,770,092		16,019,323		14,335,613		13,740,770		13,901,634
Certificates of deposit of less than $100,000	1,026,185		1,035,130		1,015,617		991,877		984,845
Certificates of deposit of $100,000 and over	1,399,523		1,465,168		1,389,149		1,416,572		1,371,428
Total deposits	27,560,839		27,695,877		25,594,095		24,778,046		24,918,180
Borrowings:
Federal funds purchased	250,160		141,888		130,487		130,622		129,891
Securities sold under agreements to repurchase	2,299,180		2,674,484		2,429,746		2,519,660		2,371,031
Other borrowings	1,362		90,796		1,230		1,860		2,748
Total borrowings	2,550,702		2,907,168		2,561,463		2,652,142		2,503,670
Other liabilities	403,831		423,998		395,336		402,265		360,204
Total liabilities	30,515,372		31,027,043		28,550,894		27,832,453		27,782,054
Equity	4,359,434		4,345,933		3,797,436		3,678,811		3,515,005
Total liabilities and equity	$34,874,806		$35,372,976		$32,348,330		$31,511,264		$31,297,059

COMMERCE BANCSHARES, INC. and SUBSIDIARIES AVERAGE RATES

(Unaudited)	For the Three Months Ended
(Unaudited)	Jun. 30, 2026		Mar. 31, 2026		Dec. 31, 2025		Sep. 30, 2025		Jun. 30, 2025
ASSETS:
Loans:
Business⁽¹⁾	5.39	%	5.41	%	5.48	%	5.72	%	5.72	%
Real estate — construction and land	6.40		6.59		7.05		7.37		7.39
Real estate — business	5.70		5.75		5.76		5.92		5.92
Real estate — personal	4.79		4.82		4.38		4.34		4.30
Consumer	6.12		6.20		6.23		6.42		6.43
Revolving home equity	7.27		7.29		7.25		7.94		7.41
Consumer credit card	12.58		12.64		12.81		13.21		13.18
Overdrafts	—		—		—		—		—
Total loans	5.73		5.79		5.84		6.02		6.01
Loans held for sale	6.31		4.98		5.01		6.03		9.22
Investment securities:
U.S. government and federal agency obligations	4.76		3.60		4.07		4.06		4.28
Government-sponsored enterprise obligations	2.38		2.40		2.36		2.35		2.38
State and municipal obligations⁽¹⁾	2.07		2.10		2.06		2.05		2.05
Mortgage-backed securities	2.10		2.12		2.05		2.01		2.08
Asset-backed securities	3.77		3.80		3.78		3.69		3.73
Other debt securities	3.16		3.17		2.97		2.97		2.94
Total available for sale debt securities	3.26		2.85		2.96		2.86		2.95
Trading debt securities⁽¹⁾	4.37		3.14		4.61		4.67		4.63
Equity securities ⁽¹⁾	3.27		6.49		6.35		6.09		6.26
Other securities ⁽¹⁾	9.28		6.81		9.08		7.29		11.63
Total investment securities	3.42		2.97		3.12		2.99		3.16
Federal funds sold	3.28		3.29		—		—		5.08
Securities purchased under agreements to resell	4.03		4.03		4.00		4.00		4.02
Interest earning deposits with banks	3.70		3.70		3.95		4.45		4.46
Total interest earning assets	4.87		4.74		4.74		4.86		4.90

LIABILITIES AND EQUITY:
Interest bearing deposits:
Savings	.06		.07		.05		.05		.05
Interest checking and money market	1.45		1.48		1.45		1.54		1.49
Certificates of deposit of less than $100,000	3.07		3.17		3.25		3.33		3.44
Certificates of deposit of $100,000 and over	3.27		3.35		3.60		3.71		3.78
Total interest bearing deposits	1.57		1.61		1.62		1.71		1.67
Borrowings:
Federal funds purchased	3.67		3.66		3.92		4.34		4.37
Securities sold under agreements to repurchase	2.35		2.39		2.54		2.88		2.85
Other borrowings	.88		3.88		.65		1.71		3.79
Total borrowings	2.48		2.50		2.61		2.95		2.93
Total interest bearing liabilities	1.68	%	1.72	%	1.75	%	1.87	%	1.83	%

Net yield on interest earning assets	3.77	%	3.59	%	3.60	%	3.64	%	3.70	%
(1) Stated on a fully taxable-equivalent basis using a federal income tax rate of 21%.

COMMERCE BANCSHARES, INC. and SUBSIDIARIES CREDIT QUALITY

(Unaudited) (In thousands, except ratios)	For the Three Months Ended										For the Six Months Ended
(Unaudited) (In thousands, except ratios)	Jun. 30, 2026		Mar. 31, 2026		Dec. 31, 2025		Sep. 30, 2025		Jun. 30, 2025		Jun. 30, 2026		Jun. 30, 2025
ALLOWANCE FOR CREDIT LOSSES ON LOANS
Balance at beginning of period	$198,605		$179,468		$175,671		$165,260		$167,031		$179,468		$162,742
Initial allowance for credit loss at acquisition	—		22,828		—		—		—		22,828		—
Provision for credit losses on loans	6,311		11,283		13,660		20,739		7,919		17,594		23,014
Net charge-offs (recoveries):
Commercial portfolio:
Business	224		241		222		826		432		465		478
Real estate — construction and land	—		—		16		—		24		—		24
Real estate — business	(7	)	5,405		(24	)	(23	)	(425	)	5,398		(48	)
	217		5,646		214		803		31		5,863		454
Personal banking portfolio:
Consumer credit card	7,029		7,139		6,488		6,515		7,085		14,168		14,052
Consumer	1,598		1,768		2,498		2,310		2,168		3,366		5,020
Overdraft	411		413		485		432		360		824		855
Real estate — personal	203		2		180		269		35		205		107
Revolving home equity	83		6		(2	)	(1	)	11		89		8
	9,324		9,328		9,649		9,525		9,659		18,652		20,042
Total net loan charge-offs	9,541		14,974		9,863		10,328		9,690		24,515		20,496
Balance at end of period	$195,375		$198,605		$179,468		$175,671		$165,260		$195,375		$165,260
LIABILITY FOR UNFUNDED LENDING COMMITMENTS	$20,119		$17,699		$17,660		$15,327		$16,005
NET CHARGE-OFF RATIOS ⁽¹⁾
Commercial portfolio:
Business	.01	%	.01	%	.01	%	.05	%	.03	%	.01	%	.02	%
Real estate — construction and land	—		—		—		—		.01		—		—
Real estate — business	—		.54		—		—		(.05	)	.27		—
	.01		.19		.01		.03		—		.10		.01
Personal banking portfolio:
Consumer credit card	5.18		5.21		4.55		4.59		5.08		5.19		5.06
Consumer	.26		.30		.45		.42		.40		.28		.48
Overdraft	22.61		23.45		29.19		24.36		25.50		23.02		29.93
Real estate — personal	.02		—		.02		.03		—		.01		.01
Revolving home equity	.05		—		—		—		.01		.03		—
	.47		.47		.62		.61		.63		.47		.66
Total	.19	%	.30	%	.22	%	.23	%	.22	%	.24	%	.24	%
CREDIT QUALITY RATIOS
Non-accrual loans to total loans	.06	%	.05	%	.09	%	.09	%	.11	%
Allowance for credit losses on loans to total loans	.94		.97		1.01		.99		.94
NON-ACCRUAL AND PAST DUE LOANS
Non-accrual loans:
Business	$92		$201		$123		$255		$410
Real estate — construction and land	—		—		—		191		426
Real estate — business	9,365		9,369		14,785		14,940		15,109
Real estate — personal	2,128		1,316		842		867		948
Revolving home equity	33		34		—		—		1,977
Total	11,618		10,920		15,750		16,253		18,870
Loans past due 90 days and still accruing interest	$23,703		$22,824		$24,659		$21,536		$25,303
(1) Net charge-offs are annualized and calculated as a percentage of average loans (excluding loans held for sale).

COMMERCE BANCSHARES, INC.

Management Discussion of Second Quarter Results

June 30, 2026

For the quarter ended June 30, 2026, net income amounted to $159.8 million, compared to $141.6 million in the previous quarter and $152.5 million in the same quarter last year. The increase in net income over the previous quarter was primarily the result of higher net interest income, non-interest income, and a decrease in the provision for credit losses, partly offset by higher non-interest expense. The net yield on interest earning assets increased 18 basis points over the previous quarter to 3.77%. Average loans increased $176.6 million, while average deposits and available for sale investment securities, at fair value, decreased $135.0 million and $247.1 million, respectively, compared to the prior quarter. For the quarter, the return on average assets was 1.84%, the return on average equity was 14.70%, and the efficiency ratio was 58.40%.

Balance Sheet Review

During the 2^nd quarter of 2026, average loans totaled $20.5 billion, an increase of $176.6 million over the prior quarter, and an increase of $3.0 billion over the same quarter last year. The increase in average balances over same quarter last year was primarily due to the acquisition of FineMark, which added $2.7 billion in loan balances on January 1, 2026. Compared to the previous quarter, average balances of business and consumer loans grew $177.2 million and $51.4 million, respectively, while average construction loan balances declined $46.7 million. During the current quarter, the Company sold certain fixed rate personal real estate loans totaling $15.9 million, compared to $26.2 million in the prior quarter.

Total average available for sale debt securities decreased $247.1 million from the previous quarter to $8.7 billion, at fair value. The decrease in available for sale debt securities was mainly the result of lower average balances of mortgage-backed and asset-backed securities, partly offset by higher average balances of U.S. government and federal agency obligations. During the 2nd quarter of 2026, the unrealized loss on available for sale debt securities decreased $68.9 million to $618.6 million, at period end. Also, during the 2nd quarter of 2026, purchases of available for sale debt securities totaled $810.0 million with a weighted average yield of approximately 4.21%. Sales, maturities and pay downs of available for sale debt securities were $1.2 billion, which included the sale of all the Company’s portfolio of U.S. Treasury inflation-protected securities (TIPS). On June 30, 2026, the duration of the available for sale investment portfolio was 4.2 years, and maturities and pay downs of approximately $1.1 billion are expected to occur during the next 12 months.

Total average deposits decreased $135.0 million this quarter compared to the previous quarter and increased $2.6 billion compared to the same quarter last year. The decrease in average balances compared to the prior quarter was primarily due to lower interest checking and money market deposits, partly offset by higher non-interest bearing demand deposit balances, while the increase in average balances over the same quarter last year was primarily due to the FineMark acquisition.

Compared to the prior quarter, average interest checking and money market deposits decreased $249.2 million, while non-interest bearing demand deposits increased $160.3 million. Compared to the previous quarter, total average retail banking deposits grew $256.5 million, while commercial and wealth deposits declined $332.6 million and $61.4 million, respectively. The average loans to deposits ratio was 74.4% in the current quarter and 73.4% in the prior quarter. The Company’s average borrowings, which included average customer repurchase agreements of $2.3 billion, decreased $356.5 million to $2.6 billion in the 2nd quarter of 2026.

Net Interest Income

Net interest income in the 2nd quarter of 2026 amounted to $315.1 million, an increase of $15.2 million over the previous quarter. On a fully taxable-equivalent (FTE) basis, net interest income for the current quarter increased $15.3 million over the previous quarter to $317.5 million. The increase in net interest income was mostly due to higher interest income on loans and investment securities and lower interest expense on borrowing and deposits, partly offset by lower interest income on deposits with banks. Accretion income on FineMark’s loans resulting from purchase accounting adjustments totaled $6.2 million. The net yield (FTE) on earning assets increased to 3.77%, from 3.59% in the prior quarter.

Compared to the previous quarter, interest income on loans (FTE) increased $3.1 million, mostly due to higher average balances of business and consumer loans and higher average rates earned on business loans. These increases were partly offset by lower average balances and rates on construction loans. The average yield (FTE) on the loan portfolio decreased six basis points to 5.73% this quarter.

Interest income on investment securities (FTE) increased $10.4 million over the prior quarter, mostly due to higher average balances and rates earned on U.S. government and federal agency obligations and higher rates earned on other securities, partly offset by lower average balances of asset-backed and mortgage-backed securities. Interest income earned on U.S. government and federal agency obligations included $9.1 million in TIPS inflation income, a $9.6 million increase over the previous quarter. Interest income on other securities included dividend income of $863 thousand related to a private equity investment. Additionally, the Company recorded a $1.1 million adjustment to premium amortization at June 30, 2026, which increased interest income to reflect slower forward prepayment speed estimates on mortgage-backed securities. This increase was higher than the $940 thousand adjustment that increased interest income in the prior quarter. The average yield (FTE) on total investment securities was 3.42% in the current quarter, compared to 2.97% in the previous quarter.

Compared to the previous quarter, interest income on deposits with banks decreased $3.6 million due to lower average balances.

Interest expense decreased $4.4 million compared to the previous quarter, mainly due to lower average balances of deposits and borrowings. Interest expense on deposits decreased $2.3 million mostly due to lower average balances and rates paid on interest checking and money market deposit accounts. Interest expense on borrowings decreased $2.1 million mostly due to lower average balances of securities sold under agreements to repurchase. The average rate paid on interest bearing deposits was 1.57% in the current quarter compared to 1.61% in the prior quarter. The overall rate paid on interest bearing liabilities was 1.68% in the current quarter and 1.72% in the prior quarter.

Non-Interest Income

In the 2nd quarter of 2026, total non-interest income amounted to $183.8 million, an increase of $18.2 million, or 11.0%, over the same period last year and an increase of $8.0 million, or 4.5%, over the prior quarter. The increase in non-interest income over the same period last year was mainly due to higher trust fees and deposit account fees, partly offset by lower gains on sales of assets. The increase in non-interest income compared to the prior quarter was mainly due to higher bank card fee and swap fee income. Additionally, an increase of $2.5 million in fair value adjustments was recorded on the Company’s deferred compensation plan, which are held in a trust and recorded as both an asset and a liability, affecting both other income and other expense.

Total net bank card fees in the current quarter increased over the same period last year and the prior quarter by $1.8 million, or 3.8%, and $2.5 million, or 5.6%, respectively. Compared to the same period last year, net credit card fees increased $804 thousand, or 24.8%, primarily due to lower rewards expense, and net merchant fees increased $212 thousand, or 3.6%, primarily due to lower royalty expense and lower network expense. Net corporate card fees increased $811 thousand, or 3.1%, due to higher interchange fees, partly offset by higher rewards expense, while debit card fees decreased $68 thousand. Total net bank card fees this quarter were comprised of fees on corporate card ($26.7 million), debit card ($11.2 million), merchant ($6.1 million) and credit card ($4.0 million) transactions.

In the current quarter, trust fees increased $15.9 million, or 28.7%, over the same period last year, and increased $463 thousand, over the prior quarter, mostly resulting from higher private client fees. Compared to the same period last year, deposit account fees increased $3.0 million, or 11.5%, mostly due to higher corporate cash management fees.

For the 2nd quarter of 2026, non-interest income comprised 36.8% of the Company’s total revenue.

Investment Securities Gains and Losses

The Company recorded net securities gains of $12.8 million in the current quarter, compared to net gains of $11.6 million in the prior quarter and $437 thousand in the 2nd quarter of 2025. Net securities gains in the current quarter resulted primarily from gains of $105.4 million recognized on Visa Inc. ("Visa") common stock and $8.6 million on other equity securities. During the 2nd quarter of 2026, the Company sold 103 thousand shares of Visa Class A common stock (converted from 26 thousand shares of Visa Class C common stock) at an average price of $333.11. As of June 30, 2026, the Company has sold one third of the Visa Class C shares it received from the 2026 Visa exchange offer. Partly offsetting these gains, net fair value losses of $4.0 million were recorded on the Company’s portfolio of private equity investments. In addition, as a result of the completion of the Company’s previously disclosed repositioning of a portion of its available for sale debt securities portfolio, net losses of $97.7 million were realized during the quarter.

Non-Interest Expense

Non-interest expense for the current quarter amounted to $297.1 million, compared to $244.4 million in the same period last year and $291.1 million in the prior quarter. The increase in non-interest expense over the same period last year was mainly due to higher salaries and benefits expense, data processing and software expense, professional and other services expense, litigation expense, and intangible amortization expense. The increase in non-interest expense over the prior quarter was mainly due to higher salaries expense and litigation expense, partly offset by lower benefits expense and professional and other services expense.

Compared to the 2nd quarter of 2025, salaries and employee benefits expense increased $24.9 million, or 16.1%, mostly due to the onboarding of FineMark’s team members at the beginning of 2026. Acquisition-related salaries and benefits expense was $3.7 million in the current quarter. Full-time equivalent employees totaled 4,976 and 4,658 at June 30, 2026 and 2025, respectively.

Compared to the same period last year, data processing and software expense increased $5.3 million due to higher costs for service providers and software. Professional and other services expense increased $3.5 million compared to the 2nd quarter of 2025, and included $1.5 million in acquisition-related legal and professional services expense. The increase in other non-interest expense was mainly due to increases of $12.0 million in litigation expense and $5.4 million in intangible amortization expense related to the FineMark acquisition.

Income Taxes

The effective tax rate for the Company was 22.3% in the current quarter, 22.4% in the prior quarter, and 21.8% in the 2nd quarter of 2025.

Credit Quality

Net loan charge-offs in the 2nd quarter of 2026 amounted to $9.5 million, compared to $15.0 million in the prior quarter, and $9.7 million in the same period last year. The ratio of annualized net charge-offs to total average loans was .19% in the current quarter, .30% in the previous quarter, and .22% in the same quarter of last year. Compared to the prior quarter, net charge-offs on business real estate loans decreased $5.4 million.

In the 2nd quarter of 2026, annualized net charge-offs on average consumer credit card loans were 5.18%, compared to 5.21% in the previous quarter and 5.08% in the same quarter last year. Consumer loan net charge-offs were .26% of average consumer loans in the current quarter, .30% in the prior quarter, and .40% in the same quarter last year.

At June 30, 2026, the allowance for credit losses on loans totaled $195.4 million, or .94% of total loans, and decreased $3.2 million compared to the prior quarter. Additionally, the liability for unfunded lending commitments on June 30, 2026 was $20.1 million, an increase of $2.4 million compared to the liability on March 31, 2026.

At June 30, 2026, total non-accrual loans amounted to $11.6 million, an increase of $698 thousand compared to the previous quarter. At June 30, 2026, the balance of non-accrual loans, which represented .06% of loans outstanding, included business real estate loans of $9.4 million, personal real estate loans of $2.1 million and business loans of $92 thousand. Loans more than 90 days past due and still accruing interest totaled $23.7 million at June 30, 2026.

Other

During the 2nd quarter of 2026, the Company paid a cash dividend of $.275 per common share, representing a 5% increase over the same period last year. The Company purchased approximately 2.1 million shares of treasury stock during the current quarter at an average price of $53.03.

Forward Looking Information

This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions, and other statements that are not historical facts. Such statements are based on current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. Additional information about risks and uncertainties is included in the "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" sections within the Company's Annual Report on Form 10-K.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260715122985/en/

For additional information, contact

Matt Burkemper, Investor Relations

(314) 746-7485

www.commercebank.com

matthew.burkemper@commercebank.com

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Date	Price Target	Rating	Analyst
7/15/2026	$62.00	Equal-Weight	Stephens
4/22/2026	$63.00 → $60.00	Outperform	Hovde Group
10/6/2025	$70.00	Outperform	Hovde Group
9/25/2025	$63.00	Hold	TD Cowen
4/7/2025	$58.00	Underweight → Equal-Weight	Morgan Stanley
12/19/2024		Outperform → Mkt Perform	Raymond James
9/30/2024	$66.00 → $64.00	Overweight → Equal-Weight	Morgan Stanley
4/17/2024	$61.00	Mkt Perform → Outperform	Raymond James

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