1000 Walnut Street / Suite 700 / Kansas City, Missouri 64106 / 816.234.2000
FOR IMMEDIATE RELEASE:
Tuesday, October 20, 2026
COMMERCE BANCSHARES, INC. REPORTS
THIRD QUARTER EARNINGS PER SHARE OF $1.08
Commerce Bancshares, Inc. announced earnings of $1.08 per share for the three months ended September 30, 2026, compared to $1.01 per share in the same quarter last year and $1.10 per share in the second quarter of 2026. Net income for the third quarter of 2026 amounted to $155.0 million, compared to $141.5 million in the third quarter of 2025 and $159.8 million in the prior quarter.
For the nine months ended September 30, 2026, earnings per share totaled $3.14 compared to $3.03 for the first nine months of 2025. Net income amounted to $456.4 million for the nine months ended September 30, 2026, compared to $425.6 million in the comparable period last year. For the year to date, the return on average assets was 1.75%, and the return on average equity was 14.03%.
In making this announcement, John Kemper, Chief Executive Officer, said, “Commerce delivered another solid quarter, with strong profitability, broad-based loan growth, continued momentum across our fee businesses and excellent credit quality. Ending loan balances grew at an annualized rate of more than 7% during the quarter, led by continued strength in our commercial and wealth segments. These results reflect the durability of our diversified business model and our team’s continued focus on serving our customers.
“Our underlying net interest margin expanded after excluding the TIPS inflation income recognized in the prior quarter. Fee income also increased, led by continued strength in our trust, bank card, and deposit fees. This balanced revenue mix remains an important source of strength for Commerce and supports consistent performance over time.
“Deposit balances performed in line with our expectations during the quarter. Our longstanding customer relationships, diverse deposit base and strong liquidity position continue to provide a solid foundation for growth. We also remained focused on disciplined capital management, repurchasing approximately 1.9 million shares while maintaining strong capital levels and supporting balance sheet growth. This balanced approach allows us to support customer growth, return capital to shareholders and maintain the strong balance sheet that has been a source of strength through economic cycles.”
Third Quarter 2026 Financial Highlights:
•Net interest income was $308.9 million, a $6.2 million decrease from the prior quarter. The net yield on interest earning assets decreased six basis points to 3.71%.
•Non-interest income totaled $185.5 million, an increase of $1.6 million, or .9%, over the prior quarter and was 37.5% of total revenue.
1
•Compared with the same period last year, trust fees grew $15.0 million, or 25.7%, while bank card fees increased $3.6 million, or 8.0%.
•Non-interest expense totaled $285.9 million, a decrease of $11.1 million, or 3.7%, from the prior quarter.
•Average loan balances totaled $20.7 billion, an increase of $172.3 million, or .8%, over the prior quarter.
•Total average available for sale debt securities decreased $473.7 million from the prior quarter to $8.2 billion, at fair value.
•Total average deposits decreased $361.6 million, or 1.3%, from the prior quarter to $27.2 billion.
•The ratio of annualized net loan charge-offs to average loans was .20% in the current quarter compared to .19% in the prior quarter.
•The allowance for credit losses on loans increased $2.5 million during the third quarter of 2026 to $197.8 million, and the ratio of the allowance for credit losses on loans to total loans was .93% at September 30, 2026, compared to .94% at June 30, 2026.
•The Company purchased approximately 1.9 million shares of its common stock during the current quarter at an average price of $58.84.
•Total assets on September 30, 2026 were $34.8 billion, a decrease of $445.8 million from the prior quarter.
•For the quarter, the return on average assets was 1.79%, the return on average equity was 14.17%, and the efficiency ratio was 56.69%.
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. The company also delivers financial planning, private banking, investment management and trust services to clients throughout a network of dedicated wealth offices across the country. 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.
* * * * * * * * * * * * * * *
For additional information, contact
Matt Burkemper, Investor Relations
(314) 746-7485
www.commercebank.com
matthew.burkemper@commercebank.com
2
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
For the Three Months Ended
For the Nine Months Ended
(Unaudited) (Dollars in thousands, except per share data)
Sep. 30, 2026
Jun. 30, 2026
Sep. 30, 2025
Sep. 30, 2026
Sep. 30, 2025
FINANCIAL SUMMARY
Net interest income
$308,877
$315,085
$279,457
$923,802
$828,706
Non-interest income
185,466
183,828
161,511
545,145
486,073
Total revenue
494,343
498,913
440,968
1,468,947
1,314,779
Investment securities gains (losses)
4,097
12,830
7,885
28,574
731
Provision for credit losses
10,025
8,731
20,061
29,716
40,145
Non-interest expense
285,931
297,068
244,018
874,125
726,831
Income before taxes
202,484
205,944
184,774
593,680
548,534
Income taxes
44,408
45,775
41,152
131,064
120,516
Non-controlling interest expense (income)
3,086
379
2,104
6,213
2,429
Net income attributable to Commerce Bancshares, Inc.
$154,990
$159,790
$141,518
$456,403
$425,589
Earnings per common share:
Net income — basic
$1.08
$1.10
$1.01
$3.14
$3.03
Net income — diluted
$1.08
$1.10
$1.01
$3.14
$3.03
Effective tax rate
22.27
%
22.27
%
22.53
%
22.31
%
22.07
%
Fully-taxable equivalent net interest income
$311,255
$317,475
$281,770
$930,934
$835,614
Average total interest earning assets (1)
$33,289,647
$33,779,032
$30,732,665
$33,730,139
$30,753,879
Diluted wtd. average shares outstanding
142,219,858
144,309,038
139,086,435
144,115,180
139,338,842
RATIOS
Average loans to deposits (2)
76.06
%
74.44
%
70.61
%
74.65
%
70.08
%
Return on total average assets
1.79
1.84
1.78
1.75
1.81
Return on average equity (3)
14.17
14.70
15.26
14.03
16.15
Non-interest income to total revenue
37.52
36.85
36.63
37.11
36.97
Efficiency ratio (4)
56.69
58.40
55.26
58.34
55.21
Net yield on interest earning assets
3.71
3.77
3.64
3.69
3.63
EQUITY SUMMARY
Cash dividends per share
$.275
$.275
$.262
$.825
$.786
Cash dividends on common stock
$39,246
$39,861
$36,733
$119,462
$110,360
Book value per share (5)
$29.68
$30.45
$27.15
Market value per share (5)
$54.74
$57.75
$56.91
High market value per share
$60.92
$58.43
$63.18
Low market value per share
$54.68
$48.74
$55.16
Common shares outstanding (5)
142,043,272
143,894,124
139,672,183
Tangible common equity to tangible assets (6)
11.06
%
11.39
%
11.27
%
Tier I leverage ratio
13.04
%
12.81
%
12.95
%
OTHER QTD INFORMATION
Assets under administration (shown in billions)
$
92.2
$
94.5
$
82.2
Number of bank/ATM locations
247
248
239
Full-time equivalent employees
4,969
4,976
4,666
(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.
3
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (In thousands, except per share data)
For the Three Months Ended
For the Nine Months Ended
Sep. 30, 2026
Jun. 30, 2026
Mar. 31, 2026
Dec. 31, 2025
Sep. 30, 2025
Sep. 30, 2026
Sep. 30, 2025
Interest income
$402,695
$407,331
$396,507
$373,617
$374,105
$1,206,533
$1,110,106
Interest expense
93,818
92,246
96,667
90,465
94,648
282,731
281,400
Net interest income
308,877
315,085
299,840
283,152
279,457
923,802
828,706
Provision for credit losses
10,025
8,731
10,960
15,993
20,061
29,716
40,145
Net interest income after credit losses
298,852
306,354
288,880
267,159
259,396
894,086
788,561
NON-INTEREST INCOME
Trust fees
73,418
71,512
71,049
62,125
58,412
215,979
170,575
Bank card transaction fees
49,182
48,121
45,585
46,761
45,551
142,888
137,506
Deposit account charges and other fees
29,651
29,259
28,578
27,949
27,427
87,488
80,297
Consumer brokerage services
6,345
5,862
5,444
5,185
6,698
17,651
16,866
Capital market fees
4,034
5,667
5,338
4,230
5,138
15,039
16,425
Loan fees and sales
3,566
3,274
3,243
3,594
3,465
10,083
10,288
Other
19,270
20,133
16,614
16,364
14,820
56,017
54,116
Total non-interest income
185,466
183,828
175,851
166,208
161,511
545,145
486,073
INVESTMENT SECURITIES GAINS (LOSSES), NET
4,097
12,830
11,647
2,929
7,885
28,574
731
NON-INTEREST EXPENSE
Salaries and employee benefits
181,566
179,954
180,787
162,889
157,461
542,307
465,564
Data processing and software
38,849
38,241
38,328
35,273
33,555
115,418
98,697
Professional and other services
14,645
16,506
18,792
14,573
11,284
49,943
34,283
Net occupancy
15,068
14,638
15,308
13,172
13,474
45,014
41,148
Marketing
6,824
6,413
6,957
6,201
6,670
20,194
18,487
Equipment
5,707
5,870
5,671
5,682
5,421
17,248
15,826
Supplies and communication
5,492
5,484
5,238
4,841
4,837
16,214
14,845
Deposit Insurance
3,789
3,841
3,914
(81)
3,074
11,544
10,130
Other
13,991
26,121
16,131
10,445
8,242
56,243
27,851
Total non-interest expense
285,931
297,068
291,126
252,995
244,018
874,125
726,831
Income before income taxes
202,484
205,944
185,252
183,301
184,774
593,680
548,534
Less income taxes
44,408
45,775
40,881
40,620
41,152
131,064
120,516
Net income
158,076
160,169
144,371
142,681
143,622
462,616
428,018
Less non-controlling interest expense (income)
3,086
379
2,748
2,019
2,104
6,213
2,429
Net income attributable to Commerce Bancshares, Inc.
$154,990
$159,790
$141,623
$140,662
$141,518
$456,403
$425,589
Net income per common share — basic
$1.08
$1.10
$0.96
$1.01
$1.01
$3.14
$3.03
Net income per common share — diluted
$1.08
$1.10
$0.96
$1.01
$1.01
$3.14
$3.03
OTHER INFORMATION
Return on total average assets
1.79
%
1.84
%
1.62
%
1.73
%
1.78
%
1.75
%
1.81
%
Return on average equity (1)
14.17
14.70
13.22
14.70
15.26
14.03
16.15
Efficiency ratio (2)
56.69
58.40
60.00
56.23
55.26
58.34
55.21
Effective tax rate
22.27
22.27
22.40
22.41
22.53
22.31
22.07
Net yield on interest earning assets
3.71
3.77
3.59
3.60
3.64
3.69
3.63
Fully-taxable equivalent net interest income
$311,255
$317,475
$302,204
$285,830
$281,770
$930,934
$835,614
(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.
4
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - PERIOD END
(Unaudited) (In thousands)
Sep. 30, 2026
Jun. 30, 2026
Sep. 30, 2025
ASSETS
Loans
Business
$7,262,310
$7,115,984
$6,414,792
Real estate — construction and land
1,451,704
1,493,455
1,433,652
Real estate — business
4,227,627
4,064,253
3,745,000
Real estate — personal
4,335,991
4,369,077
3,070,980
Consumer
2,712,153
2,527,448
2,171,599
Revolving home equity
662,277
649,332
364,241
Consumer credit card
556,558
561,277
575,317
Overdrafts
3,321
52,655
11,186
Total loans
21,211,941
20,833,481
17,786,767
Allowance for credit losses on loans
(197,840)
(195,375)
(175,671)
Net loans
21,014,101
20,638,106
17,611,096
Loans held for sale
2,165
3,799
2,538
Investment securities:
Available for sale debt securities
7,928,567
8,322,634
8,998,586
Trading debt securities
43,700
57,651
56,282
Equity securities
41,492
114,724
53,193
Other securities
239,001
242,737
227,430
Total investment securities
8,252,760
8,737,746
9,335,491
Federal funds sold
515
2,010
—
Securities purchased under agreements to resell
1,150,000
1,150,000
850,000
Interest earning deposits with banks
1,773,409
2,260,162
2,477,668
Cash and due from banks
624,151
645,674
476,441
Premises and equipment — net
554,527
527,679
483,000
Goodwill
253,805
253,805
146,539
Other intangible assets — net
135,087
140,482
13,329
Other assets
1,062,864
909,704
892,586
Total assets
$34,823,384
$35,269,167
$32,288,688
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing
$8,217,972
$8,172,552
$7,489,645
Savings, interest checking and money market
16,741,629
17,320,654
15,551,799
Certificates of deposit of less than $100,000
991,028
1,017,503
1,002,640
Certificates of deposit of $100,000 and over
1,297,238
1,364,993
1,413,965
Total deposits
27,247,867
27,875,702
25,458,049
Federal funds purchased and securities sold under agreements to repurchase
2,696,103
2,428,291
2,473,065
Other borrowings
16,164
26,291
9,270
Other liabilities
647,826
557,078
555,257
Total liabilities
30,607,960
30,887,362
28,495,641
Stockholders’ equity:
Common stock
742,606
742,606
676,054
Capital surplus
3,999,745
3,993,098
3,390,526
Retained earnings
468,767
353,023
360,723
Treasury stock
(343,578)
(232,318)
(121,972)
Accumulated other comprehensive income (loss)
(678,958)
(498,731)
(533,666)
Total stockholders’ equity
4,188,582
4,357,678
3,771,665
Non-controlling interest
26,842
24,127
21,382
Total equity
4,215,424
4,381,805
3,793,047
Total liabilities and equity
$34,823,384
$35,269,167
$32,288,688
5
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited) (In thousands)
For the Three Months Ended
Sep. 30, 2026
Jun. 30, 2026
Mar. 31, 2026
Dec. 31, 2025
Sep. 30, 2025
ASSETS:
Loans:
Business
$6,934,517
$6,864,328
$6,687,131
$6,317,805
$6,230,019
Real estate — construction and land
1,471,171
1,545,640
1,592,328
1,408,339
1,396,977
Real estate — business
4,077,981
4,062,672
4,045,670
3,730,679
3,715,597
Real estate — personal
4,343,967
4,386,681
4,417,131
3,058,834
3,059,913
Consumer
2,653,454
2,472,965
2,421,541
2,200,500
2,160,637
Revolving home equity
653,614
630,034
611,101
372,194
360,820
Consumer credit card
545,441
544,688
555,697
565,896
563,351
Overdrafts
6,449
7,291
7,144
6,592
7,037
Total loans
20,686,594
20,514,299
20,337,743
17,660,839
17,494,351
Allowance for credit losses on loans
(194,777)
(198,032)
(201,769)
(175,129)
(164,623)
Net loans
20,491,817
20,316,267
20,135,974
17,485,710
17,329,728
Loans held for sale
1,909
1,462
2,361
2,532
2,369
Investment securities:
U.S. government and federal agency obligations
3,495,551
3,365,011
3,190,796
3,197,720
2,693,327
Government-sponsored enterprise obligations
54,554
54,593
54,800
54,955
55,014
State and municipal obligations
673,412
695,988
709,332
724,737
756,137
Mortgage-backed securities
3,444,269
4,015,292
4,211,068
4,316,799
4,461,056
Asset-backed securities
1,015,185
1,056,932
1,201,187
1,336,859
1,466,770
Other debt securities
165,446
171,284
176,676
196,633
204,281
Unrealized gain (loss) on debt securities
(656,125)
(693,080)
(630,778)
(645,595)
(766,025)
Total available for sale debt securities
8,192,292
8,666,020
8,913,081
9,182,108
8,870,560
Trading debt securities
50,797
53,144
97,801
61,160
56,032
Equity securities
66,468
92,386
50,378
52,387
50,823
Other securities
241,759
247,335
250,641
227,395
220,041
Total investment securities
8,551,316
9,058,885
9,311,901
9,523,050
9,197,456
Federal funds sold
901
733
862
—
23
Securities purchased under agreements to resell
1,150,000
934,617
850,000
850,000
850,000
Interest earning deposits with banks
2,242,802
2,575,956
2,997,340
2,786,891
2,422,441
Other assets
1,950,335
1,986,886
2,074,538
1,700,147
1,709,247
Total assets
$34,389,080
$34,874,806
$35,372,976
$32,348,330
$31,511,264
LIABILITIES AND EQUITY:
Non-interest bearing deposits
$8,065,085
$8,034,747
$7,874,488
$7,592,431
$7,345,156
Savings
1,299,729
1,330,292
1,301,768
1,261,285
1,283,671
Interest checking and money market
15,486,834
15,770,092
16,019,323
14,335,613
13,740,770
Certificates of deposit of less than $100,000
1,006,309
1,026,185
1,035,130
1,015,617
991,877
Certificates of deposit of $100,000 and over
1,341,305
1,399,523
1,465,168
1,389,149
1,416,572
Total deposits
27,199,262
27,560,839
27,695,877
25,594,095
24,778,046
Borrowings:
Federal funds purchased
176,809
250,160
141,888
130,487
130,622
Securities sold under agreements to repurchase
2,243,167
2,299,180
2,674,484
2,429,746
2,519,660
Other borrowings
1,119
1,362
90,796
1,230
1,860
Total borrowings
2,421,095
2,550,702
2,907,168
2,561,463
2,652,142
Other liabilities
429,744
403,831
423,998
395,336
402,265
Total liabilities
30,050,101
30,515,372
31,027,043
28,550,894
27,832,453
Equity
4,338,979
4,359,434
4,345,933
3,797,436
3,678,811
Total liabilities and equity
$34,389,080
$34,874,806
$35,372,976
$32,348,330
$31,511,264
6
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE RATES
(Unaudited)
For the Three Months Ended
Sep. 30, 2026
Jun. 30, 2026
Mar. 31, 2026
Dec. 31, 2025
Sep. 30, 2025
ASSETS:
Loans:
Business (1)
5.39
%
5.39
%
5.41
%
5.48
%
5.72
%
Real estate — construction and land
6.42
6.40
6.59
7.05
7.37
Real estate — business
5.61
5.70
5.75
5.76
5.92
Real estate — personal
4.85
4.79
4.82
4.38
4.34
Consumer
5.97
6.12
6.20
6.23
6.42
Revolving home equity
7.21
7.27
7.29
7.25
7.94
Consumer credit card
12.54
12.58
12.64
12.81
13.21
Overdrafts
—
—
—
—
—
Total loans
5.71
5.73
5.79
5.84
6.02
Loans held for sale
6.23
6.31
4.98
5.01
6.03
Investment securities:
U.S. government and federal agency obligations
4.04
4.76
3.60
4.07
4.06
Government-sponsored enterprise obligations
2.35
2.38
2.40
2.36
2.35
State and municipal obligations (1)
2.06
2.07
2.10
2.06
2.05
Mortgage-backed securities
2.06
2.10
2.12
2.05
2.01
Asset-backed securities
3.83
3.77
3.80
3.78
3.69
Other debt securities
3.15
3.16
3.17
2.97
2.97
Total available for sale debt securities
3.07
3.26
2.85
2.96
2.86
Trading debt securities (1)
4.51
4.37
3.14
4.61
4.67
Equity securities (1)
3.46
3.27
6.49
6.35
6.09
Other securities (1)
7.84
9.28
6.81
9.08
7.29
Total investment securities
3.20
3.42
2.97
3.12
2.99
Federal funds sold
3.96
3.28
3.29
—
—
Securities purchased under agreements to resell
4.04
4.03
4.03
4.00
4.00
Interest earning deposits with banks
3.74
3.70
3.70
3.95
4.45
Total interest earning assets
4.83
4.87
4.74
4.74
4.86
LIABILITIES AND EQUITY:
Interest bearing deposits:
Savings
.06
.06
.07
.05
.05
Interest checking and money market
1.54
1.45
1.48
1.45
1.54
Certificates of deposit of less than $100,000
2.96
3.07
3.17
3.25
3.33
Certificates of deposit of $100,000 and over
3.17
3.27
3.35
3.60
3.71
Total interest bearing deposits
1.63
1.57
1.61
1.62
1.71
Borrowings:
Federal funds purchased
3.73
3.67
3.66
3.92
4.34
Securities sold under agreements to repurchase
2.41
2.35
2.39
2.54
2.88
Other borrowings
1.06
.88
3.88
.65
1.71
Total borrowings
2.51
2.48
2.50
2.61
2.95
Total interest bearing liabilities
1.73
%
1.68
%
1.72
%
1.75
%
1.87
%
Net yield on interest earning assets
3.71
%
3.77
%
3.59
%
3.60
%
3.64
%
(1) Stated on a fully taxable-equivalent basis using a federal income tax rate of 21%.
7
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CREDIT QUALITY
For the Three Months Ended
For the Nine Months Ended
(Unaudited) (In thousands, except ratios)
Sep. 30, 2026
Jun. 30, 2026
Mar. 31, 2026
Dec. 31, 2025
Sep. 30, 2025
Sep. 30, 2026
Sep. 30, 2025
ALLOWANCE FOR CREDIT LOSSES ON LOANS
Balance at beginning of period
$195,375
$198,605
$179,468
$175,671
$165,260
$179,468
$162,742
Initial allowance for credit loss at acquisition
—
—
22,828
—
—
22,828
—
Provision for credit losses on loans
13,068
6,311
11,283
13,660
20,739
30,662
43,753
Net charge-offs (recoveries):
Commercial portfolio:
Business
763
224
241
222
826
1,228
1,304
Real estate — construction and land
—
—
—
16
—
—
24
Real estate — business
(7)
(7)
5,405
(24)
(23)
5,391
(71)
756
217
5,646
214
803
6,619
1,257
Personal banking portfolio:
Consumer credit card
6,323
7,029
7,139
6,488
6,515
20,491
20,567
Consumer
2,893
1,598
1,768
2,498
2,310
6,259
7,330
Overdraft
493
411
413
485
432
1,317
1,287
Real estate — personal
139
203
2
180
269
344
376
Revolving home equity
(1)
83
6
(2)
(1)
88
7
9,847
9,324
9,328
9,649
9,525
28,499
29,567
Total net loan charge-offs
10,603
9,541
14,974
9,863
10,328
35,118
30,824
Balance at end of period
$197,840
$195,375
$198,605
$179,468
$175,671
$197,840
$175,671
LIABILITY FOR UNFUNDED LENDING COMMITMENTS
$17,076
$20,119
$17,699
$17,660
$15,327
NET CHARGE-OFF RATIOS (1)
Commercial portfolio:
Business
.04
%
.01
%
.01
%
.01
%
.05
%
.02
%
.03
%
Real estate — construction and land
—
—
—
—
—
—
—
Real estate — business
—
—
.54
—
—
.18
—
.02
.01
.19
.01
.03
.07
.01
Personal banking portfolio:
Consumer credit card
4.60
5.18
5.21
4.55
4.59
4.99
4.90
Consumer
.43
.26
.30
.45
.42
.33
.46
Overdraft
30.33
22.61
23.45
29.19
24.36
25.30
27.79
Real estate — personal
.01
.02
—
.02
.03
.01
.02
Revolving home equity
—
.05
—
—
—
.02
—
.48
.47
.47
.62
.61
.47
.65
Total
.20
%
.19
%
.30
%
.22
%
.23
%
.23
%
.24
%
CREDIT QUALITY RATIOS
Non-accrual loans to total loans
.05
%
.06
%
.05
%
.09
%
.09
%
Allowance for credit losses on loans to total loans
.93
.94
.97
1.01
.99
NON-ACCRUAL AND PAST DUE LOANS
Non-accrual loans:
Business
$268
$92
$201
$123
$255
Real estate — construction and land
—
—
—
—
191
Real estate — business
9,135
9,365
9,369
14,785
14,940
Real estate — personal
2,070
2,128
1,316
842
867
Revolving home equity
32
33
34
—
—
Total
11,505
11,618
10,920
15,750
16,253
Loans past due 90 days and still accruing interest
$26,409
$23,703
$22,824
$24,659
$21,536
(1) Net charge-offs are annualized and calculated as a percentage of average loans (excluding loans held for sale).
8
COMMERCE BANCSHARES, INC.
Management Discussion of Third Quarter Results
September 30, 2026
For the quarter ended September 30, 2026, net income amounted to $155.0 million, compared to $159.8 million in the previous quarter and $141.5 million in the same quarter last year. The decrease in net income from the previous quarter was primarily the result of lower net interest income and net securities gains, partly offset by lower non-interest expense. The net yield on interest earning assets decreased six basis points from the previous quarter to 3.71%. Average loans increased $172.3 million, while average deposits and available for sale investment securities, at fair value, decreased $361.6 million and $473.7 million, respectively, compared to the prior quarter. For the quarter, the return on average assets was 1.79%, the return on average equity was 14.17%, and the efficiency ratio was 56.69%.
Balance Sheet Review
During the 3rd quarter of 2026, average loans totaled $20.7 billion, an increase of $172.3 million over the prior quarter, and an increase of $3.2 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 consumer and business loans grew $180.5 million and $70.2 million, respectively, while average construction and personal real estate loan balances declined $74.5 million and $42.7 million, respectively. During the current quarter, the Company sold certain fixed rate personal real estate loans totaling $24.1 million, compared to $15.9 million in the prior quarter.
Total average available for sale debt securities decreased $473.7 million from the previous quarter to $8.2 billion, at fair value. The decrease in available for sale debt securities was mainly the result of lower average balances of mortgage-backed securities, partly offset by higher average balances of U.S. government and federal agency obligations. During the 3rd quarter of 2026, the unrealized loss on available for sale debt securities increased $228.8 million to $847.4 million, at period end. Also, during the 3rd quarter of 2026, purchases of available for sale debt securities totaled $263.8 million with a weighted average yield of approximately 4.88%. Sales, maturities and pay downs of available for sale debt securities were $432.3 million. On September 30, 2026, the duration of the available for sale investment portfolio was 4.1 years, and maturities and pay downs of approximately $1.1 billion are expected to occur during the next 12 months.
Total average deposits decreased $361.6 million this quarter compared to the previous quarter and increased $2.4 billion over the same quarter last year. The decrease in average balances compared to the prior quarter was primarily due to a decline of $283.3 million in interest checking and money market deposits, while the increase in average balances over the same quarter last year was primarily due to the FineMark acquisition.
Compared to the previous quarter, total average commercial deposits grew $103.9 million, while wealth and retail banking deposits declined $295.2 million and $145.8 million, respectively. The average loans to deposits ratio was 76.1% in the current quarter and 74.4% in the prior quarter. The Company’s average borrowings, which included average customer repurchase agreements of $2.2 billion, decreased $129.6 million to $2.4 billion in the 3rd quarter of 2026.
Net Interest Income
Net interest income in the 3rd quarter of 2026 amounted to $308.9 million, a decrease of $6.2 million from the previous quarter. On a fully taxable-equivalent (FTE) basis, net interest income for the current quarter decreased $6.2 million from the previous quarter to $311.3 million. The decrease in net interest income was mostly due to lower interest income on investment securities and deposits with banks and higher interest expense on deposits, partly offset by higher interest income on loans and securities purchased under resell agreements. Accretion income on FineMark’s loans resulting from purchase accounting adjustments totaled $5.0 million in the current quarter. The net yield (FTE) on earning assets decreased to 3.71%, from 3.77% in the prior quarter. The Company sold its portfolio of Treasury inflation-protected securities (TIPS) in the previous quarter. Excluding TIPS inflation income, the net yield (FTE) on interest earning assets was 3.66% in the previous quarter compared to 3.71% in the current quarter.
Compared to the previous quarter, interest income on loans (FTE) increased $4.5 million, mostly due to higher average balances of consumer loans and higher average rates earned on personal real estate loans. These increases were partly offset by lower average balances of construction loans and lower average rates earned on consumer loans. The average yield (FTE) on the loan portfolio decreased two basis points to 5.71% this quarter.
Interest income on investment securities (FTE) decreased $8.9 million from the prior quarter, mostly due to lower rates earned on U.S. government and federal agency obligations, which included TIPS inflation income of $9.1 million in the prior quarter, and lower average balances of mortgage-backed securities. Additionally, the Company recorded a $955 thousand adjustment to premium amortization at September 30, 2026, which increased interest income to reflect slower forward prepayment speed estimates on mortgage-backed securities. This increase was lower than the $1.1 million adjustment that increased interest income in the prior quarter. The average yield (FTE) on total investment securities was 3.20% in the current quarter, compared to 3.42% in the previous quarter.
9
COMMERCE BANCSHARES, INC.
Management Discussion of Third Quarter Results
September 30, 2026
Compared to the previous quarter, interest income on deposits with banks decreased $2.6 million due to lower average balances, partly offset by higher average rates earned.
Interest expense increased $1.6 million compared to the previous quarter, mainly due to higher rates paid on interest checking and money market deposit accounts, partly offset by lower interest checking and short-term certificate of deposit balances. Interest expense on borrowings decreased $481 thousand mostly due to lower average balances of federal funds purchased and securities sold under repurchase agreements, partly offset by higher rates paid on securities sold under repurchase agreements. The average rate paid on interest bearing deposits was 1.63% in the current quarter compared to 1.57% in the prior quarter. The overall rate paid on interest bearing liabilities was 1.73% in the current quarter and 1.68% in the prior quarter.
Non-Interest Income
In the 3rd quarter of 2026, total non-interest income amounted to $185.5 million, an increase of $24.0 million, or 14.8%, over the same period last year and an increase of $1.6 million, or .9%, over the prior quarter. The increase in non-interest income over the same period last year was mainly due to higher trust fees, bank card fees and deposit account fees. The increase in non-interest income compared to the prior quarter was mainly due to higher trust fees and bank card fees, partially offset by lower capital market fees.
Total net bank card fees in the current quarter increased over the same period last year and the prior quarter by $3.6 million, or 8.0%, and $1.1 million, or 2.2%, respectively. Compared to the same period last year, net corporate card fees increased $3.6 million, or 14.2%, primarily due to higher interchange fees, partly offset by higher rewards expense. Net merchant fees increased $241 thousand, or 4.3%, while net debit card fees decreased $265 thousand, or 2.4%. Total net bank card fees this quarter were comprised of fees on corporate card ($28.7 million), debit card ($11.0 million), merchant ($5.8 million) and credit card ($3.7 million) transactions.
In the current quarter, trust fees increased $15.0 million, or 25.7%, over the same period last year, and increased $1.9 million, or 2.7%, over the prior quarter, mostly resulting from higher private client fees. Compared to the same period last year, deposit account fees increased $2.2 million, or 8.1%, mostly due to higher corporate cash management fees. In the current quarter, the Company recorded a $2.0 million gain on the sale of assets.
For the 3rd quarter of 2026, non-interest income comprised 37.5% of the Company’s total revenue.
Investment Securities Gains and Losses
The Company recorded net securities gains of $4.1 million in the current quarter, compared to net gains of $12.8 million in the prior quarter and $7.9 million in the 3rd quarter of 2025. Net securities gains in the current quarter resulted primarily from net gains of $13.4 million on the Company’s portfolio of private equity investments, driven by $8.1 million in fair value adjustments and a $5.5 million gain on the sale of an investment. In addition, gains of $3.1 million resulted from the Company’s sale of 206 thousand shares of Visa, Inc. (“Visa”) Class A common stock (converted from 51 thousand shares of Visa Class C common stock). As of September 30, 2026, the Company has sold all the Visa Class C shares it received from the 2026 Visa exchange offer. These gains were partly offset by losses of $12.4 million on sales of available for sale debt securities.
Non-Interest Expense
Non-interest expense for the current quarter amounted to $285.9 million, compared to $244.0 million in the same period last year and $297.1 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, and intangible amortization expense. The decrease in non-interest expense from the prior quarter was mainly due to lower litigation expense and professional and other services expense, partly offset by higher healthcare expense.
Compared to the 3rd quarter of 2025, salaries and employee benefits expense increased $24.1 million, or 15.3%, mostly due to the onboarding of FineMark’s team members at the beginning of 2026. Acquisition-related salaries and benefits expense was $3.3 million in the current quarter. In addition, healthcare expense increased $4.1 million over the same period last year. Full-time equivalent employees totaled 4,969 and 4,666 at September 30, 2026 and 2025, respectively.
Compared to the same period last year, data processing and software expense increased $5.3 million mainly due to higher costs for service providers. Professional and other services expense increased $3.4 million compared to the 3rd quarter of 2025 and included $1.2 million in acquisition-related legal and professional services expense. The increase in other non-interest expense was mainly due to an increase of $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, 22.3% in the prior quarter, and 22.5% in the 3rd quarter of 2025.
Credit Quality
Net loan charge-offs in the 3rd quarter of 2026
10
COMMERCE BANCSHARES, INC.
Management Discussion of Third Quarter Results
September 30, 2026
amounted to $10.6 million, compared to $9.5 million in the prior quarter, and $10.3 million in the same period last year. The ratio of annualized net charge-offs to total average loans was .20% in the current quarter, .19% in the previous quarter, and .23% in the same quarter of last year. Compared to the prior quarter, net charge-offs on consumer and business loans increased $1.3 million and $539 thousand, respectively, while net charge-offs on consumer credit card loans decreased $706 thousand.
In the 3rd quarter of 2026, annualized net charge-offs on average consumer credit card loans were 4.60% compared to 5.18% in the previous quarter and 4.59% in the same quarter last year. Consumer loan net charge-offs were .43% of average consumer loans in the current quarter, .26% in the prior quarter, and .42% in the same quarter last year.
At September 30, 2026, the allowance for credit losses on loans totaled $197.8 million, or .93% of total loans, and increased $2.5 million compared to the prior quarter. Additionally, the liability for unfunded lending commitments on September 30, 2026 was $17.1 million, a decrease of $3.0 million compared to the liability on June 30, 2026.
At September 30, 2026, total non-accrual loans amounted to $11.5 million, a decrease of $113 thousand compared to the previous quarter. At September 30, 2026, the balance of non-accrual loans, which represented .05% of loans outstanding, included business real estate loans of $9.1 million, personal real estate loans of $2.1 million and business loans of $268 thousand. Loans more than 90 days past due and still accruing interest totaled $26.4 million at September 30, 2026.
Other
During the 3rd 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 1.9 million shares of treasury stock during the current quarter at an average price of $58.84.
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.
