Commerce Bancshares, Inc. Reports Fourth Quarter Earnings Per Share of $1.01

Key Terms

net interest income financial

Net interest income is the difference between the interest a financial institution earns on loans and investments and the interest it pays on deposits and borrowings. It matters to investors because it is a primary source of profit for banks and similar firms — like the gross margin on a store’s trade — and changes with loan growth, deposit costs and interest rates, so it signals core earning power and sensitivity to rate moves.

non-interest income financial

Non-interest income is the money a bank or financial company earns from activities other than charging interest on loans, such as service fees, account charges, trading gains, and income from managing client investments. For investors, it matters because it diversifies a firm’s revenue stream—like a store that sells both products and offers repair services—making profits less tied to lending rates and helping stability when interest-driven income falls.

tangible common equity financial

Tangible common equity is the portion of a company’s net worth that belongs to ordinary shareholders after removing intangible items (like goodwill or patents) and any preferred claims; it’s often expressed on a per-share basis. Think of it as the hard, sellable value left for common owners if you removed non-physical assets and paid off debts—investors use it to judge how much real cushion a company has and whether the stock might be under- or over-valued.

non-accrual loans financial

A non-accrual loan is a loan a lender has decided is unlikely to produce the scheduled interest payments, so the lender stops counting future interest as income and may record the loan at a reduced value. Think of it like renting out a house where the tenant has stopped paying: you stop counting future rent as earnings because it’s uncertain you’ll get it. For investors, a rise in non-accrual loans signals worsening credit quality, lower reported income and higher potential losses that can weaken a bank’s capital and share price.

allowance for credit losses financial

Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.

available for sale debt securities financial

Available-for-sale debt securities are bonds or other loan-like investments a company buys but does not plan to hold until they mature or trade frequently. They are marked to current market value on the balance sheet, with temporary gains or losses shown outside net income, so investors can see potential unrealized value swings — like a homeowner listing a house at today’s price while still deciding whether to sell, revealing how market moves affect worth without changing reported profits.

efficiency ratio financial

A measure of how much a company spends to produce each dollar of revenue, usually shown as operating expenses divided by revenue and expressed as a percentage. Think of it as a household’s budget: a lower percentage means more of each dollar earned stays as profit, while a higher number means costs are eating into returns. Investors use it to judge cost control and compare how efficiently companies turn revenue into earnings, especially in banks and financial firms.

tier i leverage ratio financial

Tier I leverage ratio measures a bank’s core capital — the strongest, most readily available funds — divided by its total assets, showing how much high-quality capital the bank holds against everything it owns and owes. For investors, it’s a quick snapshot of a bank’s financial cushion: higher ratios mean more ability to absorb losses, lower risk of forced asset sales or regulatory intervention, and generally greater confidence in the bank’s stability — like a household’s emergency savings compared with all its possessions and loans.

KANSAS CITY, Mo.--(BUSINESS WIRE)-- Commerce Bancshares, Inc. announced earnings of $1.01 per share for the three months ended December 31, 2025, compared to $.96 per share in the same quarter last year and $1.01 per share in the third quarter of 2025. Net income for the fourth quarter of 2025 amounted to $140.7 million, compared to $136.1 million in the fourth quarter of 2024 and $141.5 million in the prior quarter.

For the year ended December 31, 2025, earnings per share totaled $4.04, compared to $3.69 last year. Net income amounted to $566.3 million for the year ended December 31, 2025, compared to $526.3 million in the comparable period last year. For the year to date, the return on average assets was 1.79%, and the return on average equity was 15.76%.

“Commerce delivered record revenues in the fourth quarter, driven by strong performance across both net interest income and non-interest income. Our overall results for the quarter and the full year are a reflection of the strength and diversity of our businesses and the dedication of our team members in serving our customers, communities and shareholders,” said John Kemper, President and Chief Executive Officer.

On balance sheet strength, Kemper added, “We repurchased 2.2 million common shares in the fourth quarter and ended the year with robust levels of liquidity and capital. Compared to the same period last year, tangible common equity to tangible assets ratio grew 119 basis points to 11.11%, and our book value per share increased by $4.09, or 17%, to $27.75. Credit quality remains excellent with non-accrual loans at .09% of total loans, down two basis points from the same period last year.”

Kemper continued, “On January 1, 2026, we closed on the FineMark acquisition and officially welcomed our new colleagues into our organization. This combination strengthens our platform for sustained growth in wealth management and private banking, and I am eager see what we can accomplish together.” At December 31, 2025, FineMark had loans of $2.7 billion, deposits of $3.1 billion, and $8.7 billion of wealth assets under administration.

Fourth Quarter 2025 Financial Highlights:

• Net interest income was $283.2 million, a $3.7 million increase over the prior quarter. The net yield on interest earning assets decreased four basis points to 3.60%.
• Non-interest income totaled $166.2 million, an increase of $10.8 million, or 6.9%, over the same quarter last year.
• Trust fees grew $5.8 million, or 10.3%, over the same period last year, mostly due to higher private client fees.
• Non-interest expense totaled $253.0 million, an increase of $17.3 million, or 7.3%, over the same quarter last year.
• Average loan balances totaled $17.7 billion, an increase of 1.0% over the prior quarter.
• Total average available for sale debt securities increased $311.5 million over the prior quarter to $9.2 billion, at fair value.
• Total average deposits increased $816.0 million, or 3.3%, over the prior quarter. The average rate paid on interest bearing deposits decreased nine basis points to 1.62%, compared to the prior quarter.
• The ratio of annualized net loan charge-offs to average loans was .22% in the current quarter compared to .23% in the prior quarter.
• The allowance for credit losses on loans increased $3.8 million during the fourth quarter of 2025 to $179.5 million, and the ratio of the allowance for credit losses on loans to total loans was 1.01% at December 31, 2025, compared to .99% at September 30, 2025.
• Total assets at December 31, 2025 were $32.9 billion, an increase of $626.4 million over the prior quarter.
• For the quarter, the return on average assets was 1.73%, the return on average equity was 14.70%, and the efficiency ratio was 56.2%.

Commerce Bancshares, Inc. is a regional bank holding company offering a full line of banking services through its subsidiaries, including payment solutions, wealth management and securities brokerage. Commerce Bank, its primary subsidiary, brings over 160 years of experience helping individuals and businesses through high-touch service and sophisticated, personalized financial solutions.

Commerce maintains an extensive network of banking centers, wealth offices, and ATMs throughout the Midwest, as well as commercial offices in 11 states and offers payment solutions nationwide. With the acquisition of FineMark Holdings, Inc., Commerce builds on its existing private banking and wealth management presence in Florida and adds wealth offices in Arizona and South Carolina. Customers can conveniently access their accounts 24/7 using mobile and online platforms, as well as a customer service line.

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

COMMERCE BANCSHARES, INC. and SUBSIDIARIES FINANCIAL HIGHLIGHTS
		For the Three Months Ended						For the Year Ended
(Unaudited) (Dollars in thousands, except per share data)		Dec. 31, 2025		Sep. 30, 2025		Dec. 31, 2024		Dec. 31, 2025		Dec. 31, 2024
FINANCIAL SUMMARY
Net interest income		$283,152		$279,457		$266,647		$1,111,858		$1,040,246
Non-interest income		166,208		161,511		155,436		652,281		615,553
Total revenue		449,360		440,968		422,083		1,764,139		1,655,799
Investment securities gains (losses)		2,929		7,885		977		3,660		7,823
Provision for credit losses		15,993		20,061		13,508		56,138		32,903
Non-interest expense		252,995		244,018		235,718		979,826		951,229
Income before taxes		183,301		184,774		173,834		731,835		679,490
Income taxes		40,620		41,152		36,590		161,136		145,089
Non-controlling interest expense (income)		2,019		2,104		1,136		4,448		8,070
Net income attributable to Commerce Bancshares, Inc.		$140,662		$141,518		$136,108		$566,251		$526,331
Earnings per common share:
Net income — basic		$1.01		$1.01		$0.96		$4.04		$3.69
Net income — diluted		$1.01		$1.01		$0.96		$4.04		$3.69
Effective tax rate		22.41	%	22.53	%	21.19	%	22.15	%	21.61	%
Fully-taxable equivalent net interest income		$285,830		$281,770		$268,935		$1,121,444		$1,049,463
Average total interest earning assets (1)		$31,468,907		$30,732,665		$30,628,722		$30,934,106		$30,266,008
Diluted wtd. average shares outstanding		137,599,105		139,086,435		140,370,917		138,900,333		141,422,821
RATIOS
Average loans to deposits (2)		69.01	%	70.61	%	68.45	%	69.80	%	69.73	%
Return on total average assets		1.73		1.78		1.73		1.79		1.72
Return on average equity (3)		14.70		15.26		15.97		15.76		16.66
Non-interest income to total revenue		36.99		36.63		36.83		36.97		37.18
Efficiency ratio (4)		56.23		55.26		55.77		55.47		57.37
Net yield on interest earning assets		3.60		3.64		3.49		3.63		3.47
EQUITY SUMMARY
Cash dividends per share		$.262		$.262		$.245		$1.048		$.980
Cash dividends on common stock		$36,236		$36,733		$34,609		$146,596		$139,503
Book value per share (5)		$27.75		$27.15		$23.66
Market value per share (5)		$52.34		$56.91		$59.34
High market value per share		$57.36		$63.18		$69.29
Low market value per share		$48.69		$55.16		$51.44
Common shares outstanding (5)		137,457,138		139,672,183		140,859,781
Tangible common equity to tangible assets (6)		11.11	%	11.27	%	9.92	%
Tier I leverage ratio		12.65	%	12.95	%	12.26	%
OTHER QTD INFORMATION
Number of bank/ATM locations		236		239		243
Full-time equivalent employees		4,667		4,666		4,693
(1) Excludes allowance for credit losses on loans and unrealized gains/(losses) on available for sale debt securities.
(2) Includes loans held for sale.
(3) Annualized net income attributable to Commerce Bancshares, Inc. divided by average total equity.
(4) The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of total revenue.
(5) As of period end.
(6) The tangible common equity ratio is a non-gaap ratio and is calculated as stockholders’ equity reduced by goodwill and other intangible assets (excluding mortgage servicing rights) divided by total assets reduced by goodwill and other intangible assets (excluding mortgage servicing rights).
All share and per share amounts have been restated to reflect the 5% stock dividend distributed in December 2025.

COMMERCE BANCSHARES, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (In thousands, except per share data)		For the Three Months Ended										For the Year Ended
		Dec. 31, 2025		Sep. 30, 2025		Jun. 30, 2025		Mar. 31, 2025		Dec. 31, 2024		Dec. 31, 2025		Dec. 31, 2024
Interest income		$373,617		$374,105		$371,636		$364,365		$369,405		$1,483,723		$1,469,557
Interest expense		90,465		94,648		91,489		95,263		102,758		371,865		429,311
Net interest income		283,152		279,457		280,147		269,102		266,647		1,111,858		1,040,246
Provision for credit losses		15,993		20,061		5,597		14,487		13,508		56,138		32,903
Net interest income after credit losses		267,159		259,396		274,550		254,615		253,139		1,055,720		1,007,343
NON-INTEREST INCOME
Trust fees		62,125		58,412		55,571		56,592		56,345		232,700		214,430
Bank card transaction fees		46,761		45,551		46,362		45,593		47,807		184,267		189,784
Deposit account charges and other fees		27,949		27,427		26,248		26,622		25,480		108,246		100,336
Consumer brokerage services		5,185		6,698		5,383		4,785		4,636		22,051		18,141
Capital market fees		4,230		5,138		6,175		5,112		5,129		20,655		19,776
Loan fees and sales		3,594		3,465		3,419		3,404		2,874		13,882		12,890
Other		16,364		14,820		22,455		16,841		13,165		70,480		60,196
Total non-interest income		166,208		161,511		165,613		158,949		155,436		652,281		615,553
INVESTMENT SECURITIES GAINS (LOSSES), NET		2,929		7,885		437		(7,591	)	977		3,660		7,823
NON-INTEREST EXPENSE
Salaries and employee benefits		162,889		157,461		155,025		153,078		153,819		628,453		607,862
Data processing and software		35,273		33,555		32,904		32,238		32,514		133,970		127,390
Net occupancy		13,172		13,474		13,654		14,020		13,694		54,320		53,223
Professional and other services		14,573		11,284		12,973		10,026		8,982		48,856		35,077
Marketing		6,201		6,670		5,974		5,843		5,683		24,688		22,353
Equipment		5,682		5,421		5,157		5,248		5,232		21,508		20,619
Supplies and communication		4,841		4,837		4,962		5,046		4,948		19,686		19,291
Deposit Insurance		(81	)	3,074		3,312		3,744		3,181		10,049		16,482
Other		10,445		8,242		10,476		9,133		7,665		38,296		48,932
Total non-interest expense		252,995		244,018		244,437		238,376		235,718		979,826		951,229
Income before income taxes		183,301		184,774		196,163		167,597		173,834		731,835		679,490
Less income taxes		40,620		41,152		42,400		36,964		36,590		161,136		145,089
Net income		142,681		143,622		153,763		130,633		137,244		570,699		534,401
Less non-controlling interest expense (income)		2,019		2,104		1,284		(959	)	1,136		4,448		8,070
Net income attributable to Commerce Bancshares, Inc.		$140,662		$141,518		$152,479		$131,592		$136,108		$566,251		$526,331
Net income per common share — basic		$1.01		$1.01		$1.09		$0.93		$0.96		$4.04		$3.69
Net income per common share — diluted		$1.01		$1.01		$1.09		$0.93		$0.96		$4.04		$3.69
OTHER INFORMATION
Return on total average assets		1.73	%	1.78	%	1.95	%	1.69	%	1.73	%	1.79	%	1.72	%
Return on average equity (1)		14.70		15.26		17.40		15.82		15.97		15.76		16.66
Efficiency ratio (2)		56.23		55.26		54.77		55.61		55.77		55.47		57.37
Effective tax rate		22.41		22.53		21.76		21.93		21.19		22.15		21.61
Net yield on interest earning assets		3.60		3.64		3.70		3.56		3.49		3.63		3.47
Fully-taxable equivalent net interest income		$285,830		$281,770		$282,428		$271,416		$268,935		$1,121,444		$1,049,463
(1) Annualized net income attributable to Commerce Bancshares, Inc. divided by average total equity.
(2) The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of total revenue.

COMMERCE BANCSHARES, INC. and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - PERIOD END
(Unaudited) (In thousands)		Dec. 31, 2025		Sep. 30, 2025		Dec. 31, 2024
ASSETS
Loans
Business		$6,439,380		$6,414,792		$6,053,820
Real estate — construction and land		1,438,012		1,433,652		1,409,901
Real estate — business		3,674,567		3,745,000		3,661,218
Real estate — personal		3,053,435		3,070,980		3,058,195
Consumer		2,196,822		2,171,599		2,073,123
Revolving home equity		375,159		364,241		356,650
Consumer credit card		589,694		575,317		595,930
Overdrafts		4,194		11,186		11,266
Total loans		17,771,263		17,786,767		17,220,103
Allowance for credit losses on loans		(179,468	)	(175,671	)	(162,742	)
Net loans		17,591,795		17,611,096		17,057,361
Loans held for sale		4,329		2,538		3,242
Investment securities:
Available for sale debt securities		9,095,513		8,998,586		9,136,853
Trading debt securities		40,080		56,282		38,034
Equity securities		57,354		53,193		57,442
Other securities		230,459		227,430		230,051
Total investment securities		9,423,406		9,335,491		9,462,380
Federal funds sold		—		—		3,000
Securities purchased under agreements to resell		850,000		850,000		625,000
Interest earning deposits with banks		2,744,393		2,477,668		2,624,553
Cash and due from banks		803,239		476,441		748,357
Premises and equipment — net		485,700		483,000		475,275
Goodwill		146,539		146,539		146,539
Other intangible assets — net		13,311		13,329		13,632
Other assets		852,377		892,586		837,288
Total assets		$32,915,089		$32,288,688		$31,996,627
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing		$8,205,711		$7,489,645		$8,150,669
Savings, interest checking and money market		15,047,406		15,551,799		14,754,571
Certificates of deposit of less than $100,000		1,023,406		1,002,640		996,721
Certificates of deposit of $100,000 and over		1,363,053		1,413,965		1,391,683
Total deposits		25,639,576		25,458,049		25,293,644
Federal funds purchased and securities sold under agreements to repurchase		2,989,641		2,473,065		2,926,758
Other borrowings		12,798		9,270		56
Other liabilities		458,302		555,257		443,694
Total liabilities		29,100,317		28,495,641		28,664,152
Stockholders’ equity:
Common stock		692,944		676,054		676,054
Capital surplus		3,522,292		3,390,526		3,395,645
Retained earnings		131,826		360,723		45,494
Treasury stock		(48,001	)	(121,972	)	(48,401	)
Accumulated other comprehensive income (loss)		(507,690	)	(533,666	)	(758,911	)
Total stockholders’ equity		3,791,371		3,771,665		3,309,881
Non-controlling interest		23,401		21,382		22,594
Total equity		3,814,772		3,793,047		3,332,475
Total liabilities and equity		$32,915,089		$32,288,688		$31,996,627

COMMERCE BANCSHARES, INC. and SUBSIDIARIES AVERAGE BALANCE SHEETS
(Unaudited) (In thousands)	For the Three Months Ended
	Dec. 31, 2025		Sep. 30, 2025		Jun. 30, 2025		Mar. 31, 2025		Dec. 31, 2024
ASSETS:
Loans:
Business	$6,317,805		$6,230,019		$6,247,252		$6,106,185		$5,963,217
Real estate — construction and land	1,408,339		1,396,977		1,430,758		1,415,349		1,411,437
Real estate — business	3,730,679		3,715,597		3,692,405		3,667,833		3,636,026
Real estate — personal	3,058,834		3,059,913		3,048,895		3,045,876		3,047,494
Consumer	2,200,500		2,160,637		2,148,666		2,082,360		2,087,237
Revolving home equity	372,194		360,820		362,312		358,684		350,541
Consumer credit card	565,896		563,351		559,858		560,534		568,138
Overdrafts	6,592		7,037		5,663		5,860		5,628
Total loans	17,660,839		17,494,351		17,495,809		17,242,681		17,069,718
Allowance for credit losses on loans	(175,129	)	(164,623	)	(166,391	)	(162,186	)	(160,286	)
Net loans	17,485,710		17,329,728		17,329,418		17,080,495		16,909,432
Loans held for sale	2,532		2,369		1,741		1,584		2,080
Investment securities:
U.S. government and federal agency obligations	3,197,720		2,693,327		2,623,896		2,586,944		2,459,485
Government-sponsored enterprise obligations	54,955		55,014		55,038		55,330		55,428
State and municipal obligations	724,737		756,137		780,063		804,363		831,695
Mortgage-backed securities	4,316,799		4,461,056		4,641,295		4,788,102		4,905,187
Asset-backed securities	1,336,859		1,466,770		1,585,364		1,655,701		1,570,878
Other debt securities	196,633		204,281		237,385		258,136		221,076
Unrealized gain (loss) on debt securities	(645,595	)	(766,025	)	(838,028	)	(935,054	)	(896,346	)
Total available for sale debt securities	9,182,108		8,870,560		9,085,013		9,213,522		9,147,403
Trading debt securities	61,160		56,032		51,131		38,298		56,440
Equity securities	52,387		50,823		54,472		57,028		56,758
Other securities	227,395		220,041		216,560		233,461		222,529
Total investment securities	9,523,050		9,197,456		9,407,176		9,542,309		9,483,130
Federal funds sold	—		23		158		2,089		826
Securities purchased under agreements to resell	850,000		850,000		850,000		788,889		566,307
Interest earning deposits with banks	2,786,891		2,422,441		2,036,803		2,388,504		2,610,315
Other assets	1,700,147		1,709,247		1,671,763		1,698,296		1,701,822
Total assets	$32,348,330		$31,511,264		$31,297,059		$31,502,166		$31,273,912
LIABILITIES AND EQUITY:
Non-interest bearing deposits	$7,592,431		$7,345,156		$7,356,882		$7,298,686		$7,464,255
Savings	1,261,285		1,283,671		1,303,391		1,294,174		1,281,291
Interest checking and money market	14,335,613		13,740,770		13,901,634		13,906,827		13,679,666
Certificates of deposit of less than $100,000	1,015,617		991,877		984,845		991,826		1,061,783
Certificates of deposit of $100,000 and over	1,389,149		1,416,572		1,371,428		1,363,655		1,451,851
Total deposits	25,594,095		24,778,046		24,918,180		24,855,168		24,938,846
Borrowings:
Federal funds purchased	130,487		130,622		129,891		128,340		121,781
Securities sold under agreements to repurchase	2,429,746		2,519,660		2,371,031		2,723,227		2,445,956
Other borrowings	1,230		1,860		2,748		616		1,067
Total borrowings	2,561,463		2,652,142		2,503,670		2,852,183		2,568,804
Other liabilities	395,336		402,265		360,204		421,370		375,463
Total liabilities	28,550,894		27,832,453		27,782,054		28,128,721		27,883,113
Equity	3,797,436		3,678,811		3,515,005		3,373,445		3,390,799
Total liabilities and equity	$32,348,330		$31,511,264		$31,297,059		$31,502,166		$31,273,912

COMMERCE BANCSHARES, INC. and SUBSIDIARIES AVERAGE RATES
(Unaudited)	For the Three Months Ended
	Dec. 31, 2025		Sep. 30, 2025		Jun. 30, 2025		Mar. 31, 2025		Dec. 31, 2024
ASSETS:
Loans:
Business (1)	5.48	%	5.72	%	5.72	%	5.75	%	5.86	%
Real estate — construction and land	7.05		7.37		7.39		7.30		7.75
Real estate — business	5.76		5.92		5.92		5.88		6.01
Real estate — personal	4.38		4.34		4.30		4.28		4.17
Consumer	6.23		6.42		6.43		6.52		6.52
Revolving home equity	7.25		7.94		7.41		7.26		7.28
Consumer credit card	12.81		13.21		13.18		13.49		13.60
Overdrafts	—		—		—		—		—
Total loans	5.84		6.02		6.01		6.02		6.11
Loans held for sale	5.01		6.03		9.22		5.89		7.65
Investment securities:
U.S. government and federal agency obligations	4.07		4.06		4.28		4.09		3.86
Government-sponsored enterprise obligations	2.36		2.35		2.38		2.40		2.36
State and municipal obligations (1)	2.06		2.05		2.05		2.05		2.01
Mortgage-backed securities	2.05		2.01		2.08		2.08		2.17
Asset-backed securities	3.78		3.69		3.73		3.46		2.99
Other debt securities	2.97		2.97		2.94		2.69		2.11
Total available for sale debt securities	2.96		2.86		2.95		2.83		2.70
Trading debt securities (1)	4.61		4.67		4.63		4.97		4.26
Equity securities (1)	6.35		6.09		6.26		8.02		6.58
Other securities (1)	9.08		7.29		11.63		7.85		5.75
Total investment securities	3.12		2.99		3.16		2.98		2.80
Federal funds sold	—		—		5.08		5.63		5.78
Securities purchased under agreements to resell	4.00		4.00		4.02		3.81		3.57
Interest earning deposits with banks	3.95		4.45		4.46		4.46		4.78
Total interest earning assets	4.74		4.86		4.90		4.81		4.83
LIABILITIES AND EQUITY:
Interest bearing deposits:
Savings	.05		.05		.05		.05		.05
Interest checking and money market	1.45		1.54		1.49		1.52		1.63
Certificates of deposit of less than $100,000	3.25		3.33		3.44		3.65		3.91
Certificates of deposit of $100,000 and over	3.60		3.71		3.78		3.96		4.24
Total interest bearing deposits	1.62		1.71		1.67		1.72		1.87
Borrowings:
Federal funds purchased	3.92		4.34		4.37		4.37		4.71
Securities sold under agreements to repurchase	2.54		2.88		2.85		2.86		3.11
Other borrowings	.65		1.71		3.79		.66		3.36
Total borrowings	2.61		2.95		2.93		2.93		3.18
Total interest bearing liabilities	1.75	%	1.87	%	1.83	%	1.89	%	2.04	%
Net yield on interest earning assets	3.60	%	3.64	%	3.70	%	3.56	%	3.49	%
(1) Stated on a fully taxable-equivalent basis using a federal income tax rate of 21%.

COMMERCE BANCSHARES, INC. and SUBSIDIARIES CREDIT QUALITY
		For the Three Months Ended										For the Year Ended
(Unaudited) (In thousands, except ratios)		Dec. 31, 2025		Sep. 30, 2025		Jun. 30, 2025		Mar. 31, 2025		Dec. 31, 2024		Dec. 31, 2025		Dec. 31, 2024
ALLOWANCE FOR CREDIT LOSSES ON LOANS
Balance at beginning of period		$175,671		$165,260		$167,031		$162,742		$160,839		$162,742		$162,395
Provision for credit losses on loans		13,660		20,739		7,919		15,095		12,557		57,413		39,214
Net charge-offs (recoveries):
Commercial portfolio:
Business		222		826		432		46		335		1,526		1,094
Real estate — construction and land		16		—		24		—		—		40		—
Real estate — business		(24	)	(23	)	(425	)	377		50		(95	)	(106	)
		214		803		31		423		385		1,471		988
Personal banking portfolio:
Consumer credit card		6,488		6,515		7,085		6,967		6,557		27,055		26,011
Consumer		2,498		2,310		2,168		2,852		3,237		9,828		9,783
Overdraft		485		432		360		495		470		1,772		2,012
Real estate — personal		180		269		35		72		8		556		239
Revolving home equity		(2	)	(1	)	11		(3	)	(3	)	5		(166	)
		9,649		9,525		9,659		10,383		10,269		39,216		37,879
Total net loan charge-offs		9,863		10,328		9,690		10,806		10,654		40,687		38,867
Balance at end of period		$179,468		$175,671		$165,260		$167,031		$162,742		$179,468		$162,742
LIABILITY FOR UNFUNDED LENDING COMMITMENTS		$17,660		$15,327		$16,005		$18,327		$18,935
NET CHARGE-OFF RATIOS (1)
Commercial portfolio:
Business		.01	%	.05	%	.03	%	—	%	.02	%	.02	%	.02	%
Real estate — construction and land		—		—		.01		—		—		—		—
Real estate — business		—		—		(.05	)	.04		.01		—		—
		.01		.03		—		.02		.01		.01		.01
Personal banking portfolio:
Consumer credit card		4.55		4.59		5.08		5.04		4.59		4.81		4.64
Consumer		.45		.42		.40		.56		.62		.46		.46
Overdraft		29.19		24.36		25.50		34.26		33.22		28.16		34.06
Real estate — personal		.02		.03		—		.01		—		.02		.01
Revolving home equity		—		—		.01		—		—		—		(.05	)
		.62		.61		.63		.70		.67		.64		.63
Total		.22	%	.23	%	.22	%	.25	%	.25	%	.23	%	.23	%
CREDIT QUALITY RATIOS
Non-accrual loans to total loans		.09	%	.09	%	.11	%	.13	%	.11	%
Allowance for credit losses on loans to total loans		1.01		.99		.94		.96		.95
NON-ACCRUAL AND PAST DUE LOANS
Non-accrual loans:
Business		$123		$255		$410		$1,112		$101
Real estate — construction and land		—		191		426		220		220
Real estate — business		14,785		14,940		15,109		18,305		14,954
Real estate — personal		842		867		948		989		1,026
Revolving home equity		—		—		1,977		1,977		1,977
Total		15,750		16,253		18,870		22,603		18,278
Loans past due 90 days and still accruing interest		$24,659		$21,536		$25,303		$19,417		$24,516
(1) Net charge-offs are annualized and calculated as a percentage of average loans (excluding loans held for sale).

COMMERCE BANCSHARES, INC.
Management Discussion of Fourth Quarter Results
December 31, 2025

For the quarter ended December 31, 2025, net income amounted to $140.7 million, compared to $141.5 million in the previous quarter and $136.1 million in the same quarter last year. The decrease in net income compared to the previous quarter was primarily the result of lower gains on investment securities and higher non-interest expense, partly offset by a decrease in the provision for credit losses, higher net interest income and higher non-interest income. The net yield on interest earning assets decreased four basis points from the previous quarter to 3.60%. Average loans, deposits and available for sale investment securities, at fair value, increased $166.5 million, $816.0 million and $311.5 million, respectively, over the prior quarter. For the quarter, the return on average assets was 1.73%, the return on average equity was 14.70%, and the efficiency ratio was 56.2%.

Balance Sheet Review

During the 4th quarter of 2025, average loans totaled $17.7 billion, an increase of $166.5 million over the prior quarter, and an increase of $591.1 million over the same quarter last year. Compared to the previous quarter, average balances of business and consumer loans grew $87.8 million and $39.9 million, respectively. During the current quarter, the Company sold certain fixed rate personal real estate loans totaling $27.0 million, compared to $30.6 million in the prior quarter.

Total average available for sale debt securities increased $311.5 million over the previous quarter to $9.2 billion, at fair value. The increase in available for sale debt securities was mainly the result of higher average balances of U.S. government and federal agency obligations, partly offset by lower average balances of mortgage-backed and asset-backed securities. During the 4th quarter of 2025, the unrealized loss on available for sale debt securities decreased $41.7 million to $646.8 million, at period end. Also, during the 4th quarter of 2025, purchases of available for sale debt securities totaled $444.9 million with a weighted average yield of approximately 3.59%, while maturities, sales and pay downs of available for sale debt securities were $395.0 million. On December 31, 2025, the duration of the available for sale investment portfolio was 4.3 years, and maturities and pay downs of approximately $1.2 billion are expected to occur during the next 12 months.

Total average deposits increased $816.0 million this quarter over the previous quarter. The increase in deposits mostly resulted from growth of $594.8 million and $247.3 million in average balances of interest checking and money market deposits and demand deposits, respectively. Compared to the previous quarter, total average commercial, wealth and consumer deposits grew $690.3 million, $45.3 million and $66.2 million, respectively. The average loans to deposits ratio was 69.0% in the current quarter and 70.6% in the prior quarter. The Company’s average borrowings, which included average customer repurchase agreements of $2.4 billion, decreased $90.7 million to $2.6 billion in the 4th quarter of 2025.

Net Interest Income

Net interest income in the 4th quarter of 2025 amounted to $283.2 million, an increase of $3.7 million over the previous quarter. On a fully taxable-equivalent (FTE) basis, net interest income for the current quarter increased $4.1 million over the previous quarter to $285.8 million. The increase in net interest income was mostly due to higher interest income on investment securities and lower interest expense on borrowings and deposits, partly offset by lower interest income on loans. The net yield (FTE) on earning assets decreased to 3.60%, from 3.64% in the prior quarter.

Compared to the previous quarter, interest income on loans (FTE) decreased $5.8 million, mostly due to lower average rates earned on business, business real estate, construction and consumer banking loans, partly offset by higher average balances of business and consumer banking loans. The average yield (FTE) on the loan portfolio decreased 18 basis points to 5.84% this quarter.

Interest income on investment securities (FTE) increased $5.1 million compared to the prior quarter, mostly due to higher average balances of U.S. government and federal agency securities and higher average rates earned on other securities, partially offset by lower average balances of asset-backed and mortgage-backed securities. Interest income earned on U.S. government and federal agency securities included the impact of a $397 thousand increase in inflation income from Treasury inflation-protected securities over the previous quarter. Interest on other securities included dividend income of $2.1 million related to a private equity investment and was higher than non-accrual interest of $1.3 million recorded in the prior quarter. Additionally, the Company recorded a $731 thousand adjustment to premium amortization on December 31, 2025, which increased interest income to reflect slower forward prepayment speed estimates on mortgage-backed securities. This increase was higher than the $314 thousand adjustment that increased interest income in the prior quarter. The average yield (FTE) on total investment securities was 3.12% in the current quarter, compared to 2.99% in the previous quarter.

Compared to the previous quarter, interest income on deposits with banks increased $580 thousand as higher average balances were mostly offset by lower average rates.

Interest expense decreased $4.2 million compared to the previous quarter, mainly due to lower average rates paid on deposits and borrowings, partially offset by higher average deposit balances. Interest expense on borrowings decreased $2.9 million mostly due to lower rates paid on securities sold under repurchase agreement balances. Interest expense on deposits decreased $1.3 million due to lower average rates, partly offset by higher average interest checking and money market deposit account balances. The average rate paid on interest bearing deposits totaled 1.62% in the current quarter compared to 1.71% in the prior quarter. The overall rate paid on interest bearing liabilities was 1.75% in the current quarter and 1.87% in the prior quarter.

Non-Interest Income

In the 4th quarter of 2025, total non-interest income amounted to $166.2 million, an increase of $10.8 million, or 6.9%, over the same period last year and an increase of $4.7 million over the prior quarter. The increase in non-interest income compared to the same period last year was mainly due to higher trust fees and deposit account fees, partly offset by lower bank card fees. The increase in non-interest income compared to the prior quarter was mainly due to higher trust fees.

Total net bank card fees in the current quarter decreased $1.0 million, or 2.2%, compared to the same period last year, and increased $1.2 million over the prior quarter. Net corporate card fees decreased $436 thousand, or 1.7%, compared to the same quarter of last year mainly due to higher rewards expense, partly offset by higher interchange fees. Net merchant fees decreased $150 thousand, or 2.5%, while net debit card fees decreased $141 thousand, or 1.2%. Net credit card fees decreased $319 thousand, or 7.5%, mostly due to higher rewards expense. Total net bank card fees this quarter were comprised of fees on corporate card ($25.8 million), debit card ($11.2 million), merchant ($5.9 million) and credit card ($3.9 million) transactions.

In the current quarter, trust fees increased $5.8 million, or 10.3%, over the same period last year, mostly resulting from higher private client fees. Compared to the same period last year, deposit account fees increased $2.5 million, or 9.7%, mostly due to higher corporate cash management fees.

Other non-interest income increased over the same period last year primarily due to higher tax credit sales fees and cash sweep fees of $822 thousand and $726 thousand, respectively. For the 4th quarter of 2025, non-interest income comprised 37.0% of the Company’s total revenue.

Investment Securities Gains and Losses

The Company recorded net securities gains of $2.9 million in the current quarter, compared to $7.9 million in the prior quarter and $977 thousand in the 4th quarter of 2024. Net securities gains in the current quarter mostly resulted from net fair value adjustments of $7.9 million on the Company’s portfolio of private equity investments, partly offset by losses of $4.2 million on sales of available for sale debt securities.

Non-Interest Expense

Non-interest expense for the current quarter amounted to $253.0 million, compared to $235.7 million in the same period last year and $244.0 million in the prior quarter. The increase in non-interest expense over the prior quarter and the same period last year was mainly due to higher salaries and benefits expense, data processing and software expense, and professional and other services expense, partly offset by lower deposit insurance expense.

Compared to the 4th quarter of 2024, salaries and employee benefits expense increased $9.1 million, or 5.9%, mostly due to higher full-time salaries of $3.5 million, incentive compensation of $2.7 million and healthcare expense of $1.3 million. Full-time equivalent employees totaled 4,667 and 4,693 at December 31, 2025 and 2024, respectively.

Compared to the same period last year, data processing and software expense increased $2.8 million due to higher costs for service providers and software. Software expense in the current quarter included a $1.6 million write-off of software implementation consulting fees. Professional and other services, which increased $5.6 million compared to the 4th quarter of 2024, included $2.6 million of acquisition related legal and professional services expense. Deposit insurance expense decreased $3.3 million due to a $3.9 million accrual adjustment to the FDIC’s special assessment.

Income Taxes

The effective tax rate for the Company was 22.4% in the current quarter, 22.5% in the prior quarter, and 21.2% in the 4th quarter of 2024. The increase in the effective tax rate compared to the 4th quarter of 2024 was mostly due to higher state and local income taxes.

Credit Quality

Net loan charge-offs in the 4th quarter of 2025 amounted to $9.9 million, compared to $10.3 million in the prior quarter, and $10.7 million in the same period last year. The ratio of annualized net loan charge-offs to total average loans was .22% in the current quarter, .23% in the previous quarter, and .25% in the same quarter of last year. Compared to the prior quarter, net loan charge-offs on business loans decreased $604 thousand, while net loan charge-offs on consumer loans increased $188 thousand.

In the 4th quarter of 2025, annualized net loan charge-offs on average consumer credit card loans were 4.55%, compared to 4.59% in both the previous quarter and the same quarter last year. Consumer loan net charge-offs were .45% of average consumer loans in the current quarter, .42% in the prior quarter, and .62% in the same quarter last year.

At December 31, 2025, the allowance for credit losses on loans totaled $179.5 million, or 1.01% of total loans, and increased $3.8 million compared to the prior quarter. The increase was mostly attributed to the business and consumer card loan portfolios. Additionally, the liability for unfunded lending commitments on December 31, 2025 was $17.7 million, an increase of $2.3 million compared to the liability on September 30, 2025.

At December 31, 2025, total non-accrual loans amounted to $15.8 million, a decrease of $503 thousand compared to the previous quarter. At December 31, 2025, the balance of non-accrual loans, which represented .09% of loans outstanding, included business real estate loans of $14.8 million, personal real estate loans of $842 thousand and business loans of $123 thousand. Loans more than 90 days past due and still accruing interest totaled $24.7 million at December 31, 2025.

Other

During the 4th quarter of 2025, the Company distributed a 5% stock dividend on its common stock and paid a cash dividend of $.262 per common share (as restated for the stock dividend), representing a 7% increase over the same period last year. The Company purchased 2.2 million shares of treasury stock during the current quarter at an average price of $53.29.

On January 1, 2026, the Company closed on its previously announced acquisition of FineMark Holdings, Inc. (“FineMark”), Ft. Meyers, Florida, with 13 banking locations in Florida, Arizona, and South Carolina. As of December 31, 2025, FineMark had loans and deposits of $2.7 billion and $3.1 billion, respectively, and $8.7 billion of assets under administration.

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 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260121499949/en/

Matt Burkemper, Investor Relations

(314) 746-7485

www.commercebank.com

matthew.burkemper@commercebank.com

Source: Commerce Bancshares, Inc.