Commerce Bancshares, Inc. Announces First Quarter Earnings Per Share of $.67

  Commerce Bancshares, Inc. Announces First Quarter Earnings Per Share of $.67

Business Wire

KANSAS CITY, Mo. -- April 11, 2013

Commerce Bancshares, Inc. (NASDAQ: CBSH) announced earnings of $.67 per share
for the three months ended March 31, 2013 compared to $.70 per share in the
first quarter of 2012, or a decrease of 4.3%. Net income for the first quarter
amounted to $61.0 million, compared to $65.8 million in the same quarter last
year. For the quarter, the return on average assets totaled 1.13%, the return
on average equity was 11.4% and the efficiency ratio was 61.8%.

In announcing these results, David W. Kemper, Chairman and CEO, said, “We
continued to see solid growth in both our loan and deposit balances. Compared
to the previous quarter, average loans increased $248 million, or 10.4%
annualized, while average deposits grew by $735 million. Loan growth came from
both consumer and commercial lending activities. Low interest rates, affecting
both loans and investments, coupled with a decline in interest on our
inflation-protected government securities of $4.8 million, resulted in a
decline in net interest income of $10.9 million from the previous quarter.
However, this decrease in net interest income was somewhat offset by a decline
in credit costs of $5.0 million and a decline in non-interest expense of $3.2
million as a result of lower compensation costs and continuous expense control
efforts. Furthermore, we continued to see strong revenue growth from our
corporate card, merchant and trust fee businesses which grew by 19%, 12% and
10%, respectively, compared to the first quarter of last year.

Mr. Kemper continued, “Net loan charge-offs for the current quarter totaled
$7.8 million, compared to $11.2 million in the first quarter of 2012 and $10.8
million in the previous quarter. Consumer net loan charge-offs declined
slightly this quarter compared to the previous quarter and totaled $8.5
million, while commercial loans recorded net recoveries of $686 thousand.
During the current quarter, the provision for loan losses totaled $3.3
million, or $4.5 million less than net loan charge-offs, reflecting lower
commercial loan loss trends and continued positive delinquency results. Our
allowance for loan losses amounted to $168.0 million this quarter,
representing 3.8 times our non-performing loans. Total non-performing assets
also decreased $5.9 million from the previous quarter to $58.9 million this
quarter.”

Total assets at March 31, 2013 were $22.2 billion, total loans were $10.0
billion, and total deposits were $18.5 billion. During the quarter, the
Company repurchased approximately 808,000 shares of its common stock at an
average price per share of $37.13.

Commerce Bancshares, Inc. is a registered bank holding company offering a full
line of banking services, including investment management and securities
brokerage. The Company currently operates in approximately 360 locations in
Missouri, Illinois, Kansas, Oklahoma and Colorado. The Company also has
operating subsidiaries involved in mortgage banking, credit related insurance,
and private equity activities.

Summary of Non-Performing Assets and Past Due Loans

                                                               
(Dollars in thousands)                     12/31/2012  3/31/2013  3/31/2012
Non-Accrual Loans                          $51,410     $44,739    $68,875
Foreclosed Real Estate                     $13,453    $14,191   $18,585 
Total Non-Performing Assets                $64,863    $58,930   $87,460 
Non-Performing Assets to Loans             .66      %  .59     %  .95     %
Non-Performing Assets to Total Assets      .29      %  .27     %  .43     %
Loans 90 Days & Over Past Due — Still      $15,347    $15,015   $16,428 
Accruing
                                                                             

   This financial news release, including management's discussion of first
quarter results, is posted to the Company's web site at www.commercebank.com.

                     For additional information, contact
                         Jeffery Aberdeen, Controller
                      at PO Box 419248, Kansas City, MO
                      or by telephone at (816)234-2081
                    Web Site: http://www.commercebank.com
                       Email: mymoney@commercebank.com


COMMERCE BANCSHARES, INC. and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
                                  
                                   For the Three Months Ended
(Unaudited)                        December 31,  March 31,     March 31,
                                    2012           2013           2012
FINANCIAL SUMMARY (In thousands, except per share data)
Net interest income                 $161,253      $150,343      $159,737
Taxable equivalent net interest     168,428        156,708        165,666
income
Non-interest income                 103,309        99,877         94,583
Investment securities gains         (3,728     )   (2,165     )   4,040
(losses), net
Provision for loan losses           8,326          3,285          8,165
Non-interest expense                158,277        155,037        150,461
Net income attributable to          66,791         61,017         65,799
Commerce Bancshares, Inc.
Cash dividends                      150,789        20,435         20,438
Net total loan charge-offs          10,826         7,785          11,165
(recoveries)
Business                            791            (50        )   110
Real estate — construction and      (517       )   (532       )   220
land
Real estate — business              1,799          (104       )   1,495
Consumer credit card                6,095          6,048          6,173
Consumer                            1,731          1,709          2,631
Revolving home equity               187            139            360
Real estate — personal              411            373            69
Overdraft                           329            202            107
Per common share:
Net income — basic                  $.73           $.67           $.70
Net income — diluted                $.72           $.67           $.70
Cash dividends                      $1.648         $.225          $.219
Diluted wtd. average shares o/s    90,999       90,444       92,984     
RATIOS
Average loans to deposits (1)       55.53      %   54.65      %   55.53      %
Return on total average assets      1.25       %   1.13       %   1.29       %
Return on total average equity      11.62      %   11.38      %   12.04      %
Non-interest income to revenue      39.05      %   39.92      %   37.19      %
(2)
Efficiency ratio (3)               59.62      %  61.76      %  58.91      %
AT PERIOD END
Book value per share based on       $23.76         $24.02         $23.64
total equity
Market value per share              $35.06         $40.83         $38.59
Allowance for loan losses as a      1.75       %   1.68       %   1.96       %
percentage of loans
Tier I leverage ratio               9.14       %   8.92       %   9.70       %
Tangible common equity to assets    9.25       %   9.26       %   10.12      %
ratio (4)
Common shares outstanding           91,414,306     90,739,038     93,012,999
Shareholders of record              4,135          4,127          4,213
Number of bank/ATM locations        362            359            360
Full-time equivalent employees     4,708        4,725        4,713      
OTHER QTD INFORMATION
High market value per share         $38.70         $40.89         $39.31
Low market value per share         $34.69       $35.40       $35.78     

(1)  Includes loans held for sale.
(2)   Revenue includes net interest income and non-interest income.
(3)   The efficiency ratio is calculated as non-interest expense (excluding
      intangibles amortization) as a percent of revenue.
      The tangible common equity ratio is calculated as stockholders’ equity
(4)   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).
      

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

                                       For the Three Months Ended
(Unaudited)                             December 31,   March 31,    March 31,
                                       2012          2013        2012
(In thousands, except per share data)
Interest income                         $170,185      $158,745    $169,966
Interest expense                        8,932         8,402       10,229   
Net interest income                     161,253        150,343      159,737
Provision for loan losses               8,326         3,285       8,165    
Net interest income after provision     152,927       147,058     151,572  
for loan losses
NON-INTEREST INCOME
Bank card transaction fees              41,542         38,550       34,733
Trust fees                              24,351         25,169       22,814
Deposit account charges and other       20,301         18,712       19,336
fees
Capital market fees                     4,075          4,391        6,871
Consumer brokerage services             2,619          2,686        2,526
Loan fees and sales                     1,412          1,473        1,561
Other                                   9,009         8,896       6,742    
Total non-interest income               103,309       99,877      94,583   
INVESTMENT SECURITIES GAINS (LOSSES),
NET
Impairment (losses) reversals on        (356      )    1,389        5,587
securities
Noncredit-related losses (reversals)    93            (1,831   )   (5,907   )
on securities not expected to be sold
Net impairment losses                   (263      )    (442     )   (320     )
Realized gains (losses) on sales and    (3,465    )    (1,723   )   4,360    
fair value adjustments
Investment securities gains (losses),   (3,728    )    (2,165   )   4,040    
net
NON-INTEREST EXPENSE
Salaries and employee benefits          94,553         90,881       89,543
Net occupancy                           11,581         11,235       11,260
Equipment                               4,983          4,683        5,189
Supplies and communication              5,641          5,589        5,613
Data processing and software            18,768         18,951       17,469
Marketing                               2,715          3,359        3,822
Deposit insurance                       2,692          2,767        2,520
Other                                   17,344        17,572      15,045   
Total non-interest expense              158,277       155,037     150,461  
Income before income taxes              94,231         89,733       99,734
Less income taxes                       27,628        28,925      32,920   
Net income                              66,603         60,808       66,814
Less non-controlling interest expense   (188      )    (209     )   1,015    
(income)
Net income attributable to Commerce     $66,791       $61,017     $65,799  
Bancshares, Inc.
Net income per common share — basic     $.73          $.67        $.70     
Net income per common share — diluted  $.72         $.67       $.70     
                                                                             

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                                                           
(Unaudited)                      December 31,    March 31,       March 31,
                                2012           2013           2012
(In thousands)
ASSETS                                                       
Loans                            $9,831,384      $9,982,686      $9,247,971
Allowance for loan losses        (172,532    )   (168,032    )   (181,532    )
Net loans                        9,658,852      9,814,654      9,066,439   
Loans held for sale              8,827           9,085           9,673
Investment securities:
Available for sale               9,522,248       9,572,751       9,120,399
Trading                          28,837          23,400          34,178
Non-marketable                   118,650        118,620        120,734     
Total investment securities      9,669,735      9,714,771      9,275,311   
Short-term federal funds sold
and securities purchased under   27,595          7,820           40,925
agreements to resell
Long-term securities purchased   1,200,000       1,200,000       850,000
under agreements to resell
Interest earning deposits with   179,164         199,956         12,038
banks
Cash and due from banks          573,066         413,019         381,462
Land, buildings and equipment    357,612         355,464         353,866
— net
Goodwill                         125,585         125,585         125,585
Other intangible assets — net    5,300           4,870           7,070
Other assets                     353,853        381,984        404,548     
Total assets                     $22,159,589    $22,227,208    $20,526,917 
LIABILITIES AND STOCKHOLDERS’
EQUITY
Deposits:
Non-interest bearing             $6,299,903      $6,170,274      $5,209,381
Savings, interest checking and   9,817,943       9,802,838       9,038,283
money market
Time open and C.D.’s of less     1,074,618       1,061,350       1,143,687
than $100,000
Time open and C.D.’s of          1,156,189      1,480,405      1,380,409   
$100,000 and over
Total deposits                   18,348,653      18,514,867      16,771,760
Federal funds purchased and
securities sold under            1,083,550       1,126,858       1,122,988
agreements to repurchase
Other borrowings                 103,710         102,783         111,520
Other liabilities                452,102        303,509        321,443     
Total liabilities                19,988,015     20,048,017     18,327,711  
Stockholders’ equity:
Preferred stock                  —               —               —
Common stock                     458,646         458,646         446,387
Capital surplus                  1,102,507       1,101,445       1,032,985
Retained earnings                477,210         517,792         620,780
Treasury stock                   (7,580      )   (32,501     )   (22,872     )
Accumulated other                136,344        129,763        118,056     
comprehensive income
Total stockholders’ equity       2,167,127       2,175,145       2,195,336
Non-controlling interest         4,447          4,046          3,870       
Total equity                     2,171,574      2,179,191      2,199,206   
Total liabilities and equity    $22,159,589   $22,227,208   $20,526,917 
                                                                             

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE BALANCE SHEETS — AVERAGE RATES AND YIELDS
                     
(Unaudited)           For the Three Months Ended
(Dollars in
thousands)             December 31, 2012            March 31, 2013                  March 31, 2012
                       Average        Avg. Rates    Average        Avg. Rates      Average        Avg. Rates
                       Balance         Earned/Paid   Balance         Earned/Paid     Balance         Earned/Paid
ASSETS:                                                                                          
Loans:
Business ^ (A)         $3,041,700      3.29    %     $3,156,594      3.17    %       $2,893,973      3.52    %
Real estate —
construction and       345,608         4.11          351,573         3.87            380,484         4.34
land
Real estate —          2,200,088       4.33          2,230,453       4.17            2,184,893       4.57
business
Real estate —          1,571,860       4.15          1,600,138       4.08            1,441,520       4.58
personal
Consumer               1,272,831       5.35          1,343,210       5.03            1,107,878       5.93
Revolving home         436,671         4.13          428,696         4.08            454,782         4.18
equity
Consumer credit card   748,754         11.42         755,167         11.38           731,030         11.78
Overdrafts             5,908         —            5,406         —              7,587         —       
Total loans ^ (B)      9,623,420     4.64         9,871,237     4.49           9,202,147     4.95    
Loans held for sale    8,818           3.74          9,096           3.79            12,147          3.48
Investment
securities:
U.S. government and
federal agency         341,537         5.11          398,215         (.59    )   (C) 328,106         2.08
obligations
Government-sponsored
enterprise             400,387         1.72          468,608         1.86            283,494         2.01
obligations
State and municipal    1,531,754       3.67          1,603,064       3.79            1,263,303       4.17
obligations ^ (A)
Mortgage-backed        3,447,995       2.79          3,514,370       2.59            4,190,982       2.85
securities
Asset-backed           3,157,988       .99           3,206,907       .93             2,761,896       1.16
securities
Other marketable       138,066       5.35         193,413       3.21           162,616       4.11    
securities ^ (A)
Total available for
sale securities ^      9,017,727       2.39          9,384,577       2.07            8,990,397       2.48
(B)
Trading securities ^   20,771          2.01          27,729          1.90            32,628          2.95
(A)
Non-marketable         118,802       17.51        119,407       6.20           116,873       8.55    
securities ^(A)
Total investment       9,157,300     2.59         9,531,713     2.12           9,139,898     2.56    
securities
Short-term federal
funds sold and
securities             10,371          .46           8,680           .42             13,695          .50
purchased under
agreements to resell
Long-term securities
purchased under        1,021,741       2.10          1,178,333       2.01            850,000         2.02
agreements
to resell
Interest earning       208,930        .25          130,357        .24            87,919        .25     
deposits with banks
Total interest         20,030,580     3.52         20,729,416     3.23           19,305,806     3.66    
earning assets
Non-interest earning   1,234,609                    1,196,078                      1,160,906   
assets ^(B)
Total assets           $21,265,189                  $21,925,494                    $20,466,712 
LIABILITIES AND
EQUITY:
Interest bearing
deposits:
Savings                $581,174        .13           $603,644        .12             $549,998        .15
Interest checking      8,638,073       .19           9,142,100       .17             8,311,734       .24
and money market
Time open & C.D.’s
of less than           1,083,492       .68           1,068,695       .66             1,155,882       .73
$100,000
Time open & C.D.’s     1,030,184     .65          1,336,952     .52            1,444,252     .53     
of $100,000 and over
Total interest         11,332,923    .28          12,151,391    .25            11,461,866    .32     
bearing deposits
Borrowings:
Federal funds
purchased and
securities sold        1,130,210       .07           1,200,818       .07             1,287,245       .07
under agreements to
repurchase
Other borrowings       103,766       3.25         103,329       3.19           111,800       3.26    
Total borrowings       1,233,976     .33          1,304,147     .32            1,399,045     .33     
Total interest         12,566,899     .28     %     13,455,538     .25     %       12,860,911     .32     %
bearing liabilities
Non-interest bearing   6,013,165                     5,929,229                       5,132,305
deposits
Other liabilities      399,160                       366,562                         275,349
Equity                 2,285,965                    2,174,165                      2,198,147   
Total liabilities      $21,265,189                  $21,925,494                    $20,466,712 
and equity
Net interest income    $168,428                     $156,708                       $165,666    
(T/E)
Net yield on
interest earning                    3.35    %                  3.07    %                    3.45    %
assets

(A)  Stated on a tax equivalent basis using a federal income tax rate of 35%.
(B)   The allowance for loan losses and unrealized gains/(losses) on available
      for sale securities are included in non-interest earning assets.
(C)   Includes ($1.7 million) in inflation income on U.S. Treasury
      inflation-protected securities in the first quarter of 2013.
      

                          COMMERCE BANCSHARES, INC.
                Management Discussion of First Quarter Results
                                March 31, 2013

For the quarter ended March 31, 2013, net income attributable to Commerce
Bancshares, Inc. (net income) amounted to $61.0 million, a decrease of $4.8
million from the same quarter last year, and a decrease of $5.8 million
compared to the previous quarter. The decrease in net income from the previous
quarter resulted mainly from lower net interest income of $10.9 million
coupled with a decline in fee income due to higher seasonal activity in the
previous quarter, but offset by a lower provision for loan losses of $5.0
million and a decline in non-interest expense of $3.2 million. Part of the
decline in net interest income this quarter resulted from a decline in
interest of $4.8 million on the Company's inflation-protected government
securities. Also, net securities losses totaled $2.2 million mainly due to
fair value adjustments on the Company's private equity investments. For the
current quarter, the return on average assets was 1.13%, the return on average
equity was 11.38%, and the efficiency ratio was 61.76%.

Balance Sheet Review

During the 1^st quarter of 2013, average loans, including loans held for sale,
increased $248.1 million (10.4% annualized) compared to the previous quarter
and increased $666.0 million, or 7.2%, compared to the same period last year.
The increase in average loans over the previous quarter resulted from
increases in business (up $114.9 million), business real estate and
construction (up $36.3 million), personal real estate (up $28.3 million) and
consumer loans (up $70.4 million, mainly in automobile and fixed rate home
equity loans). Consumer credit card loans also increased slightly. The
increase in business loans mainly resulted from growth in agribusiness lending
and leasing activities, while demand for business real estate loans also
improved this quarter. Demand for consumer automobile lending remained strong
as average outstanding balances grew by $91.0 million. However, marine and RV
loans, included in the consumer loan portfolio, continued to run off this
quarter by $18.0 million, while home equity lines of credit also declined by
$8.0 million.

Total available for sale investment securities (excluding fair value
adjustments) averaged $9.4 billion this quarter, up $366.9 million when
compared to the previous quarter. This growth was funded from continued growth
in deposits. Purchases of new securities, totaling $735.7 million in the 1^st
quarter of 2013, were offset by maturities and pay downs of $675.4 million. At
March 31, 2013, the duration of the investment portfolio was 2.5 years, and
maturities and pay downs of approximately $2.1 billion are expected to occur
during the next 12 months.

Total average deposits increased $734.5 million, or 4.2%, during the 1^st
quarter of 2013 compared to the 4^th quarter of 2012 (which grew $720.7
million over the 3^rd quarter of 2012). This increase in average deposits
resulted mainly from growth in money market accounts (increase of $503.9
million) and short-term jumbo certificates of deposit (increase of $303.8
million). Overall, $198.0 million of the deposit growth this quarter came from
commercial deposits while the remaining $536.5 million in deposit growth was
mostly from private banking and retail banking customers. The average loans to
deposits ratio in the current quarter was 54.7%, compared to 55.5% in the
previous quarter.

During the current quarter, the Company's average borrowings increased $70.2
million compared to the previous quarter, mainly due to higher balances of
federal funds purchased and repurchase agreements this quarter.

Net Interest Income

Net interest income (tax equivalent) in the 1^st quarter of 2013 amounted to
$156.7 million compared with $168.4 million in the previous quarter, or a
decrease of $11.7 million. Net interest income (tax equivalent) for the
current quarter also decreased $9.0 million compared to the 1^st quarter of
last year. During the 1^st quarter of 2013, the net yield on earning assets
(tax equivalent) was 3.07%, compared with 3.35% in the previous quarter and
3.45% in the same period last year.

The decrease in net interest income (tax equivalent) in the 1^st quarter of
2013 compared to the previous quarter was mainly due to a decline in inflation
interest of $4.8 million on the Company's inflation-protected securities as a
result of the lower Consumer Price Indices published this quarter, on which
this interest is based. Inflation income totaled ($1.7) million this quarter.
Also, in the previous quarter the Company received a special dividend on a
private equity investment totaling $2.2 million that did not re-occur, and
premium amortization expense was lowered by $1.7 million due to a slowing of
prepayment speeds on mortgage-backed securities.

Compared to the previous quarter, interest on loans declined $2.9 million
(tax-equivalent) as a result of fewer days in the quarter, coupled with lower
average rates of 15 basis points, which was partly offset by higher balances.
The average rate earned on investment securities declined 47 basis points to
2.12% this quarter largely due to the lower inflation interest recorded this
quarter, in addition to the special dividend and the lower premium
amortization expense in the prior quarter. These effects were partially offset
by higher overall average securities balances. In the current quarter, the
prepayment speed adjustment on mortgage-backed securities reduced premium
amortization expense by $291 thousand, compared to the reduction of $1.7
million in the previous quarter.

Interest expense on deposits declined $527 thousand in the 1^st quarter of
2013 compared with the previous quarter as overall rates continued to decline
slightly.

Non-Interest Income

In the 1^st quarter of 2013, total non-interest income amounted to $99.9
million, an increase of $5.3 million, or 5.6%, compared to the same period
last year. Also, current quarter non-interest income decreased $3.4 million
when compared to amounts recorded in the previous quarter. The increase in
non-interest income over the same period last year was mainly due to increased
bank card and trust fees.

Total bank card fees in the current quarter increased $3.8 million, or 11.0%,
over the same period last year as a result of a 19.4% increase in corporate
card fees, which totaled $18.7 million this quarter. Merchant and credit card
fees also grew by 12.2% and 5.5%, respectively.

Trust fees for the quarter increased 10.3% compared to the same period last
year, resulting mainly from continued growth in private client (up 12.0%) and
institutional (up 11.1%) trust fees. Deposit account fees declined $624
thousand, or 3.2%, compared to last year as overdraft fees declined by $958
thousand, but were offset by growth in various other deposit fees of $310
thousand, or 10.4%. A new debit posting routine mandated by a previously
disclosed legal settlement took effect in late February and had the effect of
reducing overdraft income by approximately $500 thousand this quarter. Capital
market fees declined $2.5 million from the same quarter last year as fees were
very strong last year and more recently have been affected by low interest
rates, reducing customer demand. Other non-interest income grew by $2.2
million this quarter compared to the same period last year as a result of a
$3.0 million fair value loss taken last year on an office building which was
held for sale.

Investment Securities Gains and Losses

Net securities losses, related mostly to private equity fair value
adjustments, amounted to $2.2 million in the 1^st quarter of 2013, compared to
net losses of $3.7 million in the previous quarter and net gains of $4.0
million in the same quarter last year. The current quarter included unrealized
net losses of $1.8 million on these private equity investments, coupled with a
reduction to minority interest expense related to these losses totaling $350
thousand.

Also during the current quarter, the Company recorded credit-related
impairment losses of $442 thousand on certain non-agency guaranteed
mortgage-backed securities identified as other-than-temporarily impaired,
compared to losses of $263 thousand in the previous quarter and $320 thousand
in the same quarter last year. The cumulative credit-related impairment on
these bonds totaled $11.7 million at quarter end. At March 31, 2013, the fair
value of non-agency guaranteed mortgage-backed securities identified as
other-than-temporarily impaired totaled $96.4 million, compared to $118.3
million at March 31, 2012.

Non-Interest Expense

Non-interest expense for the current quarter amounted to $155.0 million, a
decrease of $3.2 million from the previous quarter and an increase of $4.6
million compared to the same quarter last year. Compared to the 1^st quarter
of last year, salaries and benefits expense increased $1.3 million, or 1.5%,
mainly due to an increase in salary costs of $2.0 million but offset by lower
incentive compensation and medical costs. Full-time equivalent employees
totaled 4,725 and 4,713 at March 31, 2013 and 2012, respectively.

Compared to the 1^st quarter of last year, occupancy, equipment, supplies and
marketing expense declined $1.0 million on a combined basis mainly due to
lower depreciation and reductions in rent expense, office supplies and
marketing expenditures. Data processing and software costs grew by $1.5
million, or 8.5%, partly due to higher variable processing costs related to
commercial card revenues. Other non-interest expense increased this quarter
due to a provision of $1.0 million on a letter of credit exposure and higher
costs for professional and examination fees, in addition to a card network
agreement incentive of $1.1 million received last year. The reduction in
non-controlling interest expense of $1.2 million resulted from private equity
activities mentioned above.

Income Taxes

The effective tax rate for the Company was 32.2% in the current quarter,
compared with 29.3% in the previous quarter and 33.3% in the 1^st quarter of
2012. The lower rate in the previous quarter resulted partly from tax benefits
on the special dividend paid in the 4^th quarter of 2012 to the Company's
employee stock ownership plan.

Credit Quality

Net loan charge-offs in the 1^st quarter of 2013 amounted to $7.8 million,
compared with $10.8 million in the prior quarter and $11.2 million in the 1^st
quarter of last year. The ratio of annualized net loan charge-offs to total
average loans was .32% in the current quarter compared to .45% in the previous
quarter.

For the 1^st quarter of 2013, annualized net loan charge-offs on average
consumer credit card loans amounted to 3.25%, compared with 3.24% in the
previous quarter and 3.40% in the same period last year. Consumer loan net
charge-offs for the quarter amounted to .52% of average consumer loans,
compared to .54% in the previous quarter and .96% in the same quarter last
year. The provision for loan losses for the current quarter totaled $3.3
million, a decrease of $5.0 million from the previous quarter and $4.9 million
lower than in the same period last year. The current quarter provision for
loan losses was $4.5 million less than net loan charge-offs, and reflects
continued improving credit trends in the loan portfolio and declining
non-performing loans as discussed below. As a result, the allowance for loan
losses was reduced to $168.0 million. At March 31, 2013 the allowance was
1.68% of total loans, excluding loans held for sale, and was 376% of total
non-accrual loans.

At March 31, 2013, total non-performing assets amounted to $58.9 million, a
decrease of $5.9 million from the previous quarter. Non-performing assets are
comprised of non-accrual loans ($44.7 million) and foreclosed real estate
($14.2 million). At March 31, 2013, the balance of non-accrual loans, which
represented .45% of loans outstanding, included business real estate loans of
$14.3 million, construction and land loans of $13.0 million and business loans
of $12.1 million. Loans more than 90 days past due and still accruing interest
totaled $15.0 million at March 31, 2013.

Other

During the quarter the Company purchased approximately 808,000 shares of
treasury stock at an average cost of $37.13 per share.

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 statement.

Contact:

Commerce Bancshares, Inc.
Jeffery Aberdeen, 816-234-2081
Controller
mymoney@commercebank.com
http://www.commercebank.com
 
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