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 10, 2014

Commerce Bancshares, Inc. (NASDAQ: CBSH) announced earnings of $.67 per share
for the three months ended March 31, 2014 compared to $.63 per share in the
first quarter of 2013, or an increase of 6.3%. Net income for the first
quarter amounted to $64.3 million, compared to $61.0 million in the same
quarter last year, an increase of 5.4%. For the quarter, the return on average
assets totaled 1.16%, the return on average equity was 11.6% and the
efficiency ratio was 63.3%.

In announcing these results, David W. Kemper, Chairman and CEO, said, “Loan
demand remained strong this quarter as average loans increased $288 million,
or 10.8% annualized, with most of this growth occurring in commercial and
industrial and automobile lending. Average deposits also grew by $293 million,
an annualized increase of 6.4%. Commercial card revenue increased 13% in the
quarter from a year ago while trust revenue increased 6% compared to the first
quarter last year. Our net interest margin has begun to stabilize, declining 3
basis points this quarter to 3.03%.  During the quarter, unrealized net gains
due to fair value adjustments on the Company’s private equity investments
totaled $15.7 million. However, these gains were offset by securities losses
of $5.2 million and write downs in fair value on certain bank-owned real
estate totaling $1.4 million.”

Mr. Kemper continued, “Net loan charge-offs for the current quarter totaled
$9.7 million, compared to $7.5 million in the previous quarter and $7.8
million in the first quarter of 2013. The increase in net loan charge-offs
compared to the previous quarter is mainly due to a decline of $2.6 million in
commercial loan recoveries received coupled with an increase in consumer
credit card losses of $550 thousand. During the current quarter, the provision
for loan losses totaled $9.7 million and matched net loan charge-offs. The
allowance for loan losses amounted to $161.5 million this quarter, or 1.44% of
period end loans, and was 3.4 times non-performing loans. Total non-performing
assets decreased $995 thousand from the previous quarter to $54.4 million this
quarter.”

Total assets at March 31, 2014 were $22.8 billion, total loans were $11.2
billion, and total deposits were $19.2 billion. During the quarter, the
Company repurchased 474,854 shares of its common stock at an average price per
share of $44.01 and paid a cash dividend of $.225 per share, an increase of 5%
over the rate paid in 2013.

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)              12/31/2013   3/31/2014    3/31/2013
Non-Accrual Loans                   $ 48,814     $ 47,573     $ 44,739
Foreclosed Real Estate              $ 6,625     $ 6,871     $ 14,191 
Total Non-Performing Assets         $ 55,439    $ 54,444    $ 58,930 
Non-Performing Assets to Loans      .51      %   .49      %   .59      %
Non-Performing Assets to Total      .24      %   .24      %   .27      %
Assets
Loans 90 Days & Over Past Due —     $ 13,966    $ 12,487    $ 15,015 
Still 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.

                             
COMMERCE BANCSHARES, INC. and SUBSIDIARIES

FINANCIAL HIGHLIGHTS
                                
                                For the Three Months Ended
(Unaudited)                   December 31,   March 31,      March 31,
                                2013             2014             2013
FINANCIAL SUMMARY (In
thousands, except per share
data)
Net interest income             $154,865       $153,066       $150,343
Taxable equivalent net          162,182          159,761          156,708
interest income
Non-interest income             109,522          102,627          99,877
Investment securities gains     (1,342     )     10,037           (2,165     )
(losses), net
Provision for loan losses       5,543            9,660            3,285
Non-interest expense            161,318          162,340          155,037
Net income attributable to      65,915           64,313           61,017
Commerce Bancshares, Inc.
Cash dividends                  20,568           21,590           20,435
Net total loan charge-offs      7,543            9,660            7,785
(recoveries)
Business                        (76        )     (106       )     (50        )
Real estate — construction      (1,781     )     55               (532       )
and land
Real estate — business          (255       )     426              (104       )
Consumer credit card            6,110            6,447            6,048
Consumer                        2,311            2,505            1,709
Revolving home equity           596              113              139
Real estate — personal          358              6                373
Overdraft                       280              214              202
Per common share:
Net income — basic              $.69             $.67             $.64
Net income — diluted            $.69             $.67             $.63
Cash dividends                  $.214            $.225            $.214
Diluted wtd. average shares   95,321        95,194        94,966     
o/s
RATIOS
Average loans to deposits       58.73      %     59.35      %     54.65      %
(1)
Return on total average         1.18       %     1.16       %     1.13       %
assets
Return on total average         11.81      %     11.56      %     11.38      %
equity
Non-interest income to          41.42      %     40.14      %     39.92      %
revenue (2)
Efficiency ratio (3)          60.81      %   63.28      %   61.76      %
AT PERIOD END
Book value per share based      $23.10           $23.75           $22.87
on total equity
Market value per share          $44.91           $46.42           $38.89
Allowance for loan losses       1.47       %     1.44       %     1.68       %
as a percentage of loans
Tier I leverage ratio           9.43       %     9.41       %     8.92       %
Tangible common equity to       9.00       %     9.36       %     9.26       %
assets ratio (4)
Common shares outstanding       95,881,165       95,722,655       95,275,990
Shareholders of record          4,116            4,143            4,127
Number of bank/ATM              358              356              359
locations
Full-time equivalent          4,727         4,745         4,725      
employees
OTHER QTD INFORMATION
High market value per share     $45.77           $47.31           $38.94
Low market value per share      $40.80           $41.66           $33.71

(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,
(In thousands, except per share     2013             2014           2013
data)
Interest income                     $162,141       $159,998     $158,745
Interest expense                    7,276           6,932         8,402    
Net interest income                 154,865          153,066        150,343
Provision for loan losses           5,543           9,660         3,285    
Net interest income after           149,322         143,406       147,058  
provision for loan losses
NON-INTEREST INCOME
Bank card transaction fees          43,486           41,717         38,550
Trust fees                          26,308           26,573         25,169
Deposit account charges and         20,506           18,590         18,712
other fees
Capital market fees                 3,195            3,870          4,391
Consumer brokerage services         2,596            2,747          2,686
Loan fees and sales                 1,525            1,209          1,473
Other                               11,906          7,921         8,896    
Total non-interest income           109,522         102,627       99,877   
INVESTMENT SECURITIES GAINS
(LOSSES), NET
Change in fair value of
other-than-temporarily impaired     (230      )      (63      )     1,389
securities
Portion recognized in other         206             (283     )     (1,831   )
comprehensive income
Net impairment losses               (24       )      (346     )     (442     )
recognized in earnings
Realized gains (losses) on
sales and fair value                (1,318    )      10,383        (1,723   )
adjustments
Investment securities gains         (1,342    )      10,037        (2,165   )
(losses), net
NON-INTEREST EXPENSE
Salaries and employee benefits      95,012           94,263         90,881
Net occupancy                       11,838           11,616         11,235
Equipment                           4,597            4,504          4,683
Supplies and communication          5,676            5,699          5,589
Data processing and software        19,723           19,087         18,951
Marketing                           2,921            3,681          3,359
Deposit insurance                   2,814            2,894          2,767
Other                               18,737          20,596        17,572   
Total non-interest expense          161,318         162,340       155,037  
Income before income taxes          96,184           93,730         89,733
Less income taxes                   30,359          29,609        28,925   
Net income                          65,825           64,121         60,808
Less non-controlling interest       (90       )      (192     )     (209     )
expense (income)
Net income attributable to          $65,915         $64,313       $61,017  
Commerce Bancshares, Inc.
Net income per common share —       $.69            $.67          $.64     
basic
Net income per common share —       $.69             $.67           $.63
diluted
                                                                             

                                                          
COMMERCE BANCSHARES, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
                                                                 
(Unaudited)                  December 31,      March 31,         March 31,
                           2013            2014            2013
(In thousands)
ASSETS
Loans                        $10,956,836       $11,222,038       $9,982,686
Allowance for loan           (161,532    )     (161,532    )     (168,032    )
losses
Net loans                    10,795,304       11,060,506       9,814,654   
Loans held for sale          —                 —                 9,085
Investment securities:
Available for sale           8,915,680         9,115,116         9,572,751
Trading                      19,993            15,740            23,400
Non-marketable               107,324          126,119          118,620     
Total investment             9,042,997        9,256,975        9,714,771   
securities
Short-term federal funds
sold and securities          43,845            19,525            7,820
purchased under
agreements to resell
Long-term securities
purchased under              1,150,000         950,000           1,200,000
agreements to resell
Interest earning             707,249           198,417           199,956
deposits with banks
Cash and due from banks      518,420           530,244           413,019
Land, buildings and          349,654           344,790           355,464
equipment — net
Goodwill                     138,921           138,921           125,585
Other intangible assets      9,268             8,811             4,870
— net
Other assets                 316,378          328,931          381,984     
Total assets                 $23,072,036      $22,837,120      $22,227,208 
LIABILITIES AND
STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing         $6,750,674        $6,552,085        $6,170,274
Savings, interest
checking and money           10,108,236        10,328,912        9,802,838
market
Time open and C.D.’s of      983,689           967,272           1,061,350
less than $100,000
Time open and C.D.’s of      1,204,749        1,389,065        1,480,405   
$100,000 and over
Total deposits               19,047,348        19,237,334        18,514,867
Federal funds purchased
and securities sold          1,346,558         927,152           1,126,858
under agreements to
repurchase
Other borrowings             107,310           105,114           102,783
Other liabilities            356,423          294,009          303,509     
Total liabilities            20,857,639       20,563,609       20,048,017  
Stockholders’ equity:
Preferred stock              —                 —                 —
Common stock                 481,224           481,224           458,646
Capital surplus              1,279,948         1,273,290         1,101,445
Retained earnings            449,836           492,559           517,792
Treasury stock               (10,097     )     (17,193     )     (32,501     )
Accumulated other            9,731            40,499           129,763     
comprehensive income
Total stockholders’          2,210,642         2,270,379         2,175,145
equity
Non-controlling interest     3,755            3,132            4,046       
Total equity                 2,214,397        2,273,511        2,179,191   
Total liabilities and        $23,072,036       $22,837,120       $22,227,208
equity
                                                                             

                      
COMMERCE BANCSHARES, INC. and SUBSIDIARIES

AVERAGE BALANCE SHEETS — AVERAGE RATES AND YIELDS
                         
(Unaudited)              For the Three Months Ended

(Dollars in              December 31, 2013              March 31, 2014                 March 31, 2013
thousands)
                         Average         Avg. Rates      Average         Avg. Rates      Average         Avg. Rates
                         Balance          Earned/Paid     Balance          Earned/Paid     Balance          Earned/Paid
ASSETS:                                                                                                 
Loans:
Business ^ (A)           $ 3,635,223      3.04    %       $ 3,843,377      2.90    %       $ 3,156,594      3.17    %
Real estate —
construction and         391,315          3.98            419,628          3.77            351,573          3.87
land
Real estate —            2,299,746        4.02            2,323,208        3.90            2,230,453        4.17
business
Real estate —            1,782,834        3.80            1,778,573        3.86            1,600,138        4.08
personal
Consumer                 1,500,404        4.52            1,533,485        4.41            1,343,210        5.03
Revolving home           420,910          3.88            423,656          3.82            428,696          4.08
equity
Consumer credit card     759,917          11.20           757,423          11.43           755,167          11.38
Overdrafts               6,708          —              5,429          —              5,406          —       
Total loans ^ (B)        10,797,057     4.22           11,084,779     4.12           9,871,237      4.49    
Loans held for sale      —                —               —                —               9,096            3.79
Investment
securities:
U.S. government and
federal agency           404,622          1.12            497,333          1.71            398,215          (.59    )
obligations
Government-sponsored
enterprise               663,504          1.63            774,749          1.66            468,608          1.86
obligations
State and municipal      1,628,758        3.53            1,605,752        3.69            1,603,064        3.79
obligations ^ (A)
Mortgage-backed          2,944,310        2.78            3,019,157        2.80            3,514,370        2.59
securities
Asset-backed             2,843,772        .87             2,854,201        .89             3,206,907        .93
securities
Other marketable         167,900        3.25           153,068        2.50           193,413        3.21    
securities ^ (A)
Total available for
sale securities ^        8,652,866        2.14            8,904,260        2.18            9,384,577        2.07
(B)
Trading securities ^     18,081           2.44            19,183           2.28            27,729           1.90
(A)
Non-marketable           113,925        11.65          109,932        6.42           119,407        6.20    
securities ^(A)
Total investment         8,784,872      2.26           9,033,375      2.24           9,531,713      2.12    
securities
Short-term federal
funds sold and
securities purchased     34,385           .39             24,464           .43             8,680            .42
under agreements to
resell
Long-term securities
purchased under          1,149,999        1.51            1,102,222        1.53            1,178,333        2.01
agreements to resell
Interest earning         260,242         .25            161,117         .25            130,357        .24     
deposits with banks
Total interest           21,026,555      3.20           21,405,957      3.16           20,729,416      3.23    
earning assets
Non-interest earning     1,072,491                       1,039,777                       1,196,078    
assets ^(B)
Total assets             $ 22,099,046                    $ 22,445,734                    $ 21,925,494 
LIABILITIES AND
EQUITY:
Interest bearing
deposits:
Savings                  $ 627,802        .12             $ 649,292        .12             $ 603,644        .12
Interest checking        9,199,410        .14             9,473,680        .13             9,142,100        .17
and money market
Time open & C.D.’s
of less than             998,376          .48             975,640          .47             1,068,695        .66
$100,000
Time open & C.D.’s       1,286,667      .46            1,339,808      .44            1,336,952      .52     
of $100,000 and over
Total interest           12,112,255     .20            12,438,420     .19            12,151,391     .25     
bearing deposits
Borrowings:
Federal funds
purchased and
securities sold          1,186,093        .05             1,209,180        .07             1,200,818        .07
under agreements to
repurchase
Other borrowings         105,441        3.27           105,187        3.28           103,329        3.19    
Total borrowings         1,291,534      .31            1,314,367      .33            1,304,147      .32     
Total interest           13,403,789      .22     %       13,752,787      .20     %       13,455,538      .25     %
bearing liabilities
Non-interest bearing     6,270,980                        6,237,479                        5,929,229
deposits
Other liabilities        210,287                          198,383                          366,562
Equity                   2,213,990                       2,257,085                       2,174,165    
Total liabilities        $ 22,099,046                    $ 22,445,734                    $ 21,925,494 
and equity
Net interest income      $ 162,182                       $ 159,761                       $ 156,708    
(T/E)
Net yield on
interest earning                          3.06    %                        3.03    %                        3.07    %
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.
      

                          COMMERCE BANCSHARES, INC.

                Management Discussion of First Quarter Results

                                March 31, 2014

For the quarter ended March 31, 2014, net income attributable to Commerce
Bancshares, Inc. (net income) amounted to $64.3 million, an increase of $3.3
million over the same quarter last year and a decrease of $1.6 million
compared to the previous quarter. The decrease in net income from the previous
quarter resulted mainly from a higher provision for loan losses of $4.1
million coupled with lower non-interest income of $6.9 million, but offset by
an increase in net securities gains of $11.4 million. Net securities gains for
the quarter were comprised of unrealized gains on the Company’s private equity
portfolio of $15.7 million offset by realized losses of $5.2 million on the
sale of certain available for sale securities. Also included in the quarter
were write downs to fair value on certain bank-owned properties held for sale
and a litigation provision of $1.5 million. For the current quarter, the
return on average assets was 1.16%, the return on average equity was 11.56%,
and the efficiency ratio was 63.3%.

Balance Sheet Review

During the 1^st quarter of 2014, average loans increased $287.7 million
compared to the previous quarter and increased $1.2 billion, or 12.2%,
compared to the same period last year. Compared to the previous quarter, the
increase in average loans resulted from growth in business (up $208.2
million), construction and business real estate (up $51.8 million), and
consumer loans (up $33.1 million, mainly in automobile loans). The increase in
business loans mainly resulted from continued growth in commercial and
industrial and tax-advantaged lending activities. Demand for consumer
automobile loans increased in the 1^st quarter as these loans grew by $49.8
million. However, average marine and RV loans, included in the consumer loan
portfolio, continued to run off this quarter by $14.5 million.

Total available for sale investment securities, at fair value, averaged $9.0
billion this quarter, an increase of $244.9 million when compared to the
previous quarter. Much of this growth resulted from purchases occurring late
in 2013. Purchases of new securities, totaling $649.6 million in the 1^st
quarter of 2014, were offset by sales, maturities and pay downs of $493.6
million. At March 31, 2014, the duration of the investment portfolio was 2.8
years, and maturities and pay downs of approximately $1.5 billion are expected
to occur during the next 12 months.

Total average deposits increased $292.7 million during the 1^st quarter of
2014 compared to the previous quarter. The increase in average deposits
resulted mainly from growth in money market accounts (increase of $270.2
million), certificates of deposit (increase of $30.4 million) and savings
accounts (increase of $21.5 million), but were offset by a decline in
non-interest bearing demand deposits (decrease of $33.5 million). Compared to
the previous quarter, total average consumer, private banking and commercial
deposits increased $194.9 million, $42.4 million and $40.9 million,
respectively. The average loans to deposits ratio in the current quarter was
59.4%, compared to 58.7% in the previous quarter.

During the current quarter, the Company’s average borrowings increased $22.8
million compared to the previous quarter, mainly due to an increase in the
average balance of customer repurchase agreements.

Net Interest Income

Net interest income (tax equivalent) in the 1^st quarter of 2014 amounted to
$159.8 million compared with $162.2 million in the previous quarter, or a
decrease of $2.4 million. Net interest income (tax equivalent) for the current
quarter increased $3.1 million compared to the 1^st quarter of last year.
During the 1^st quarter of 2014, the net yield on earning assets (tax
equivalent) was 3.03%, compared with 3.06% in the previous quarter and 3.07%
in the same period last year.

The decrease in net interest income (tax equivalent) in the 1^st quarter of
2014 compared to the previous quarter was partly due to fewer days in the
quarter, coupled with lower rates earned on loans and a decrease in interest
and dividends received on the Company’s private equity investments. The
Consumer price index published this quarter increased somewhat which increased
inflation interest on the Company’s inflation-protected securities by $844
thousand compared to the previous quarter. Additionally, premium amortization
expense was reduced by $539 thousand this quarter due to an adjustment
reflecting slowing prepayment speeds on mortgage-backed securities.

Compared to the previous quarter, interest on loans decreased $2.2 million
(tax-equivalent) as a result of lower rates earned, especially on business and
business real estate loans, but offset by higher volumes on automobile and
business loans. The average yield on the loan portfolio declined 10 basis
points this quarter. The average rate earned on the investment securities
portfolio decreased 2 basis points to 2.24% this quarter, largely due to lower
private equity interest and dividends mentioned above, but offset by higher
inflation income.

Interest expense on deposits declined $375 thousand in the 1^st quarter of
2014 compared with the previous quarter, due mainly to slightly lower rates
paid on money market accounts and certificates of deposit.

Non-Interest Income

In the 1^st quarter of 2014, total non-interest income amounted to $102.6
million, an increase of $2.8 million, or 2.8%, compared to the same period
last year. Also, current quarter non-interest income decreased $6.9 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 higher
bank card and trust fees.

Total bank card fees in the current quarter increased $3.2 million, or 8.2%,
over the same period last year as a result of a 12.8% increase in corporate
card fees, which totaled $21.1 million this quarter. Trust fees for the
quarter increased $1.4 million, or 5.6%, compared to the same period last
year, resulting mainly from continued growth in both private client and
institutional trust fees.

Deposit account fees decreased slightly compared to last year as overdraft
fees declined by $718 thousand, or 9.7%, but were offset by combined growth in
corporate cash management and other deposit fees of $596 thousand. Capital
market fees declined $521 thousand from the same quarter last year but were up
$675 thousand over the prior quarter. Revenue from sales of tax credits was
strong this quarter, totaling $707 thousand and up 91.0% compared to last
year. This revenue was down $1.6 million from the previous quarter, when it is
seasonally the strongest. This quarter the Company recorded a reduction in
fair value of $688 thousand on certain bank-owned properties held for sale.
This compares with net gains related to branch facilities of $1.4 million and
$809 thousand in the previous quarter and 1^st quarter 2013, respectively.

Investment Securities Gains and Losses

Net securities gains this quarter totaled $10.0 million compared with losses
of $2.2 million in the 1^st quarter of last year. Net securities gains were
comprised of net fair value adjustments of $15.7 million on the Company’s
private equity portfolio coupled with net securities losses of $5.2 million on
available for sale securities. Also during the current quarter, credit-related
impairment losses recorded on the Company’s non-agency guaranteed
mortgage-backed securities which have been identified as
other-than-temporarily impaired totaled $346 thousand. The cumulative
credit-related impairment on these bonds totaled $13.2 million at quarter end.
At March 31, 2014, the fair value of non-agency guaranteed mortgage-backed
securities identified as other-than-temporarily impaired totaled $66.1
million, compared to $70.4 million at December 31, 2013.

Non-Interest Expense

Non-interest expense for the current quarter amounted to $162.3 million, an
increase of $7.3 million, or 4.7%, over the same period last year and an
increase of $1.0 million compared to the previous quarter. In the current
quarter the Company recorded a litigation provision of $1.5 million and write
downs of $720 thousand on certain surplus branch properties. Exclusive of
these two items, non-interest expense declined $1.2 million compared to the
previous quarter, mainly due to lower salaries and benefits, data processing,
and occupancy costs, partly offset by higher marketing expense. The decline in
salaries and benefits costs resulted from lower incentive expense this quarter
offset by seasonally higher payroll taxes.

Compared to the 1^st quarter of last year, salaries and benefits expense
increased $3.4 million, or 3.7%, on higher full-time salary (up $2.3 million,
or 3.8%) and medical costs (up $546 thousand), partly offset by lower
retirement plan expenses. Growth in salaries and benefits expense resulted
partly from staffing additions in commercial banking, wealth and commercial
card departments, coupled with higher staffing costs of $863 thousand related
to the Summit acquisition that were not present in the 1^st quarter of 2013.
Full-time equivalent employees totaled 4,745 and 4,725 at March 31, 2014 and
2013, respectively.

Compared to the 1^st quarter of last year, occupancy costs grew 3.4% on higher
utilities and snow removal costs, while marketing costs grew 9.6% based on
lower spending levels last year. Data processing costs grew less than 1%
mainly due to lower software expense, partly offset by higher bankcard
transaction processing costs. The current quarter included operating expenses
related to Summit totaling $432 thousand (excluding salaries and benefits)
which were not present in the same quarter last year.

Income Taxes

The effective tax rate for the Company was 31.5% in the current quarter and
the previous quarter, compared to 32.2% in the 1^st quarter of 2013.

Credit Quality

Net loan charge-offs in the 1^st quarter of 2014 amounted to $9.7 million,
compared with $7.5 million in the prior quarter and $7.8 million in the 1^st
quarter of last year. The ratio of annualized net loan charge-offs to total
average loans was .35% in the current quarter compared to .28% in the previous
quarter.

In the 1^st quarter of 2014, annualized net loan charge-offs on average
consumer credit card loans amounted to 3.45%, compared with 3.19% in the
previous quarter and 3.25% in the same period last year. Consumer loan net
charge-offs in the quarter amounted to .66% of average consumer loans,
compared to .61% in the previous quarter and .52% in the same quarter last
year. The provision for loan losses in the current quarter totaled $9.7
million, an increase of $4.1 million over the previous quarter and $6.4
million higher than in the same period last year. The current quarter
provision for loan losses matched net loan charge-offs, while in the previous
quarter the provision was $2.0 million less than net loan charge-offs. At
March 31, 2014, the allowance was 1.44% of total loans and was 340% of total
non-accrual loans.

At March 31, 2014, total non-performing assets amounted to $54.4 million, a
decrease of $995 thousand from the previous quarter. Non-performing assets are
comprised of non-accrual loans ($47.6 million) and foreclosed real estate
($6.9 million). At March 31, 2014, the balance of non-accrual loans, which
represented .42% of loans outstanding, included business real estate loans of
$19.1 million, business loans of $11.0 million, and construction and land
loans of $9.4 million. Loans more than 90 days past due and still accruing
interest totaled $12.5 million at March 31, 2014.

Other

During the quarter the Company purchased 474,854 shares of treasury stock at
an average cost of $44.01. The Company declared and paid a $.225 per share
cash dividend, representing an increase of 5% over the rate paid in 2013.

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
http://www.commercebank.com
mymoney@commercebank.com
 
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