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

Company Release - 7/16/2026 6:00 AM ET Commerce Bancshares, Inc. announced earnings of $1.10 per share for the three months ended June 30, 2026, compared to $1.09 per share in the same quarter last year and $.96 per share in the first quarter of 2026. Net income for the second quarter of 2026 amounted to $159.8 million, compared to $152.5 million in the second quarter of 2025 and $141.6 million in the prior quarter. For the six months ended June 30, 2026, earnings per share totaled $2.06 compared to $2.02 for the first six months of 2025. Net income amounted to $301.4 million for the six months ended June 30, 2026, compared to $284.1 million in the comparable period last year. For the year to date, the return on average assets was 1.73%, and the return on average equity was 13.96%. In making this announcement, John Kemper, Chief Executive Officer, said, “Commerce delivered a strong quarter, with expanding net interest margin, solid loan growth, lower funding costs and excellent credit quality. These results drove a return on average assets of 1.84% and reflect the strength of our business model, our diversified revenue streams and our team’s continued focus on long-standing customer relationships.” Mr. Kemper continued, “Revenue growth was broad-based during the quarter. Net interest income increased as margin expanded to 3.77%, and fee revenue grew $8.0 million this quarter, supported by continued strength in trust, bank card and deposit-related businesses. We believe this balanced revenue mix remains a key differentiator for Commerce and supports consistent performance across economic cycles.” “We remained focused on disciplined capital management. During the quarter, we repurchased approximately 2.1 million shares of common stock for $110 million while maintaining a strong capital position. This gives us flexibility to invest in growth, support our customers and continue returning capital to shareholders.” “We also completed the repositioning of a portion of our available for sale securities portfolio, including the sale of our Treasury inflation-protected securities portfolio. This repositioning increases the portfolio’s overall yield, improves the consistency of future net interest income, and supports a more durable net interest margin over time. We believe these portfolio changes strengthen Commerce’s long-term earnings profile and position us to deliver sustained shareholder value.” Second Quarter 2026 Financial Highlights: Net interest income was $315.1 million, a $15.2 million increase over the prior quarter. The net yield on interest earning assets increased 18 basis points to 3.77%.Non-interest income totaled $183.8 million, an increase of $8.0 million, or 4.5%, over the prior quarter and was 37% of total revenue in both the current and prior quarters.Trust fees grew $15.9 million, or 28.7%, over the same period last year, and bank card fees grew $2.5 million, or 5.6%, over the prior quarter.Non-interest expense totaled $297.1 million, an increase of $5.9 million, or 2.0%, over the prior quarter.Assets under administration grew $3.1 billion, or 3.4%, over the same period last year.Average loan balances totaled $20.5 billion, an increase of $176.6 million, or .9%, over the prior quarter.Total average available for sale debt securities decreased $247.1 million from the prior quarter to $8.7 billion, at fair value.Investment securities gains included a $105.4 million gain on Visa Inc. stock and a $97.7 million loss on the repositioning of a portion of the Company’s available for sale debt securities portfolio, which included the sale of the Company’s portfolio of U.S. Treasury inflation-protected securities.Total average deposits decreased $135.0 million, or .5%, from the prior quarter to $27.6 billion.The ratio of annualized net loan charge-offs to average loans was .19% in the current quarter compared to .30% in the prior quarter.The allowance for credit losses on loans decreased $3.2 million during the second quarter of 2026 to $195.4 million, and the ratio of the allowance for credit losses on loans to total loans was .94% at June 30, 2026, compared to .97% at March 31, 2026.The Company purchased approximately 2.1 million shares of its common stock during the current quarter at an average price of $53.03.Total assets on June 30, 2026 were $35.3 billion, a decrease of $448.1 million from the prior quarter.For the quarter, the return on average assets was 1.84%, the return on average equity was 14.70%, and the efficiency ratio was 58.40%. Commerce Bancshares, Inc. is a regional bank holding company offering a full line of banking services through its subsidiaries, including payment solutions, wealth management and securities brokerage. Commerce Bank, its primary subsidiary, brings over 160 years of experience helping individuals and businesses through high-touch service and sophisticated, personalized financial solutions. Commerce maintains an extensive network of banking centers, wealth offices, and ATMs throughout the Midwest, as well as commercial offices in 11 states and offers payment solutions nationwide. With the acquisition of FineMark Holdings, Inc., Commerce builds on its existing private banking and wealth management presence in Florida and adds wealth offices in Arizona and South Carolina. Customers can conveniently access their account 24/7 using mobile and online platforms, as well as a customer service line. This financial news release and the supplementary Earnings Highlights presentation are available on the Company’s website at https://investor.commercebank.com/news-info/financial-news-releases/default.aspx. COMMERCE BANCSHARES, INC. and SUBSIDIARIES FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share data) For the Three Months Ended For the Six Months Ended Jun. 30, 2026 Mar. 31, 2026 Jun. 30, 2025 Jun. 30, 2026 Jun. 30, 2025 FINANCIAL SUMMARY Net interest income $315,085 $299,840 $280,147 $614,925 $549,249 Non-interest income 183,828 175,851 165,613 359,679 324,562 Total revenue 498,913 475,691 445,760 974,604 873,811 Investment securities gains (losses) 12,830 11,647 437 24,477 (7,154 ) Provision for credit losses 8,731 10,960 5,597 19,691 20,084 Non-interest expense 297,068 291,126 244,437 588,194 482,813 Income before taxes 205,944 185,252 196,163 391,196 363,760 Income taxes 45,775 40,881 42,400 86,656 79,364 Non-controlling interest expense (income) 379 2,748 1,284 3,127 325 Net income attributable to Commerce Bancshares, Inc. $159,790 $141,623 $152,479 $301,413 $284,071 Earnings per common share: Net income — basic $1.10 $0.96 $1.09 $2.06 $2.02 Net income — diluted $1.10 $0.96 $1.09 $2.06 $2.02 Effective tax rate 22.27 % 22.40 % 21.76 % 22.33 % 21.84 % Fully-taxable equivalent net interest income $317,475 $302,204 $282,428 $619,679 $553,844 Average total interest earning assets (1) $33,779,032 $34,130,985 $30,629,715 $33,954,036 $30,764,662 Diluted wtd. average shares outstanding 144,309,038 145,856,608 139,211,807 145,078,548 139,467,137 RATIOS Average loans to deposits (2) 74.44 % 73.44 % 70.22 % 73.94 % 69.80 % Return on total average assets 1.84 1.62 1.95 1.73 1.82 Return on average equity(3) 14.70 13.22 17.40 13.96 16.63 Non-interest income to total revenue 36.85 36.97 37.15 36.91 37.14 Efficiency ratio (4) 58.40 60.00 54.77 59.19 55.18 Net yield on interest earning assets 3.77 3.59 3.70 3.68 3.63 EQUITY SUMMARY Cash dividends per share $.275 $.275 $.262 $.550 $.524 Cash dividends on common stock $39,861 $40,355 $36,761 $80,216 $73,627 Book value per share (5) $30.45 $29.64 $26.12 Market value per share (5) $57.75 $49.20 $59.21 High market value per share $58.43 $56.06 $62.99 Low market value per share $48.74 $46.99 $50.18 Common shares outstanding (5) 143,894,124 145,979,271 140,090,686 Tangible common equity to tangible assets (6) 11.39 % 11.07 % 10.86 % Tier I leverage ratio 12.81 % 12.60 % 12.75 % OTHER QTD INFORMATION Number of bank/ATM locations 248 249 239 Full-time equivalent employees 4,976 4,960 4,658 (1) Excludes allowance for credit losses on loans and unrealized gains/(losses) on available for sale debt securities. (2) Includes loans held for sale. (3) Annualized net income attributable to Commerce Bancshares, Inc. divided by average total equity. (4) The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of total revenue. (5) As of period end. (6) The tangible common equity ratio is a non-gaap ratio and is calculated as stockholders’ equity reduced by goodwill and other intangible assets (excluding mortgage servicing rights) divided by total assets reduced by goodwill and other intangible assets (excluding mortgage servicing rights). All share and per share amounts have been restated to reflect the 5% stock dividend distributed in December 2025. COMMERCE BANCSHARES, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share data) For the Three Months Ended For the Six Months Ended Jun. 30, 2026 Mar. 31, 2026 Dec. 31, 2025 Sep. 30, 2025 Jun. 30, 2025 Jun. 30, 2026 Jun. 30, 2025 Interest income $407,331 $396,507 $373,617 $374,105 $371,636 $803,838 $736,001 Interest expense 92,246 96,667 90,465 94,648 91,489 188,913 186,752 Net interest income 315,085 299,840 283,152 279,457 280,147 614,925 549,249 Provision for credit losses 8,731 10,960 15,993 20,061 5,597 19,691 20,084 Net interest income after credit losses 306,354 288,880 267,159 259,396 274,550 595,234 529,165 NON-INTEREST INCOME Trust fees 71,512 71,049 62,125 58,412 55,571 142,561 112,163 Bank card transaction fees 48,121 45,585 46,761 45,551 46,362 93,706 91,955 Deposit account charges and other fees 29,259 28,578 27,949 27,427 26,248 57,837 52,870 Consumer brokerage services 5,862 5,444 5,185 6,698 5,383 11,306 10,168 Capital market fees 5,667 5,338 4,230 5,138 6,175 11,005 11,287 Loan fees and sales 3,274 3,243 3,594 3,465 3,419 6,517 6,823 Other 20,133 16,614 16,364 14,820 22,455 36,747 39,296 Total non-interest income 183,828 175,851 166,208 161,511 165,613 359,679 324,562 INVESTMENT SECURITIES GAINS (LOSSES), NET 12,830 11,647 2,929 7,885 437 24,477 (7,154 ) NON-INTEREST EXPENSE Salaries and employee benefits 179,954 180,787 162,889 157,461 155,025 360,741 308,103 Data processing and software 38,241 38,328 35,273 33,555 32,904 76,569 65,142 Professional and other services 16,506 18,792 14,573 11,284 12,973 35,298 22,999 Net occupancy 14,638 15,308 13,172 13,474 13,654 29,946 27,674 Marketing 6,413 6,957 6,201 6,670 5,974 13,370 11,817 Equipment 5,870 5,671 5,682 5,421 5,157 11,541 10,405 Supplies and communication 5,484 5,238 4,841 4,837 4,962 10,722 10,008 Deposit Insurance 3,841 3,914 (81 ) 3,074 3,312 7,755 7,056 Other 26,121 16,131 10,445 8,242 10,476 42,252 19,609 Total non-interest expense 297,068 291,126 252,995 244,018 244,437 588,194 482,813 Income before income taxes 205,944 185,252 183,301 184,774 196,163 391,196 363,760 Less income taxes 45,775 40,881 40,620 41,152 42,400 86,656 79,364 Net income 160,169 144,371 142,681 143,622 153,763 304,540 284,396 Less non-controlling interest expense (income) 379 2,748 2,019 2,104 1,284 3,127 325 Net income attributable to Commerce Bancshares, Inc. $159,790 $141,623 $140,662 $141,518 $152,479 $301,413 $284,071 Net income per common share — basic $1.10 $0.96 $1.01 $1.01 $1.09 $2.06 $2.02 Net income per common share — diluted $1.10 $0.96 $1.01 $1.01 $1.09 $2.06 $2.02 OTHER INFORMATION Return on total average assets 1.84 % 1.62 % 1.73 % 1.78 % 1.95 % 1.73 % 1.82 % Return on average equity (1) 14.70 13.22 14.70 15.26 17.40 13.96 16.63 Efficiency ratio (2) 58.40 60.00 56.23 55.26 54.77 59.19 55.18 Effective tax rate 22.27 22.40 22.41 22.53 21.76 22.33 21.84 Net yield on interest earning assets 3.77 3.59 3.60 3.64 3.70 3.68 3.63 Fully-taxable equivalent net interest income $317,475 $302,204 $285,830 $281,770 $282,428 $619,679 $553,844 (1) Annualized net income attributable to Commerce Bancshares, Inc. divided by average total equity. (2) The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of total revenue. COMMERCE BANCSHARES, INC. and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - PERIOD END (Unaudited) (In thousands) Jun. 30, 2026 Mar. 31, 2026 Jun. 30, 2025 ASSETS Loans Business $7,115,984 $6,750,356 $6,328,684 Real estate — construction and land 1,493,455 1,581,789 1,405,398 Real estate — business 4,064,253 4,059,539 3,757,778 Real estate — personal 4,369,077 4,407,606 3,058,845 Consumer 2,527,448 2,475,353 2,157,867 Revolving home equity 649,332 619,178 364,429 Consumer credit card 561,277 557,733 576,151 Overdrafts 52,655 9,510 16,316 Total loans 20,833,481 20,461,064 17,665,468 Allowance for credit losses on loans (195,375 ) (198,605 ) (165,260 ) Net loans 20,638,106 20,262,459 17,500,208 Loans held for sale 3,799 2,081 3,592 Investment securities: Available for sale debt securities 8,322,634 8,646,127 8,915,779 Trading debt securities 57,651 44,329 46,630 Equity securities 114,724 56,193 54,511 Other securities 242,737 248,339 219,906 Total investment securities 8,737,746 8,994,988 9,236,826 Federal funds sold 2,010 630 — Securities purchased under agreements to resell 1,150,000 850,000 850,000 Interest earning deposits with banks 2,260,162 3,270,046 2,624,264 Cash and due from banks 645,674 572,588 522,049 Premises and equipment — net 527,679 527,211 477,401 Goodwill 253,805 253,805 146,539 Other intangible assets — net 140,482 145,985 13,333 Other assets 909,704 837,463 910,035 Total assets $35,269,167 $35,717,256 $32,284,247 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits: Non-interest bearing $8,172,552 $8,058,024 $7,393,559 Savings, interest checking and money market 17,320,654 17,877,836 15,727,549 Certificates of deposit of less than $100,000 1,017,503 1,032,114 986,014 Certificates of deposit of $100,000 and over 1,364,993 1,416,345 1,386,906 Total deposits 27,875,702 28,384,319 25,494,028 Federal funds purchased and securities sold under agreements to repurchase 2,428,291 2,576,723 2,596,461 Other borrowings 26,291 8,045 15,049 Other liabilities 557,078 421,771 518,595 Total liabilities 30,887,362 31,390,858 28,624,133 Stockholders’ equity: Common stock 742,606 742,606 676,054 Capital surplus 3,993,098 3,986,353 3,386,218 Retained earnings 353,023 233,094 255,938 Treasury stock (232,318 ) (120,692 ) (96,589 ) Accumulated other comprehensive income (loss) (498,731 ) (539,592 ) (581,049 ) Total stockholders’ equity 4,357,678 4,301,769 3,640,572 Non-controlling interest 24,127 24,629 19,542 Total equity 4,381,805 4,326,398 3,660,114 Total liabilities and equity $35,269,167 $35,717,256 $32,284,247 COMMERCE BANCSHARES, INC. and SUBSIDIARIES AVERAGE BALANCE SHEETS (Unaudited) (In thousands) For the Three Months Ended Jun. 30, 2026 Mar. 31, 2026 Dec. 31, 2025 Sep. 30, 2025 Jun. 30, 2025 ASSETS: Loans: Business $6,864,328 $6,687,131 $6,317,805 $6,230,019 $6,247,252 Real estate — construction and land 1,545,640 1,592,328 1,408,339 1,396,977 1,430,758 Real estate — business 4,062,672 4,045,670 3,730,679 3,715,597 3,692,405 Real estate — personal 4,386,681 4,417,131 3,058,834 3,059,913 3,048,895 Consumer 2,472,965 2,421,541 2,200,500 2,160,637 2,148,666 Revolving home equity 630,034 611,101 372,194 360,820 362,312 Consumer credit card 544,688 555,697 565,896 563,351 559,858 Overdrafts 7,291 7,144 6,592 7,037 5,663 Total loans 20,514,299 20,337,743 17,660,839 17,494,351 17,495,809 Allowance for credit losses on loans (198,032 ) (201,769 ) (175,129 ) (164,623 ) (166,391 ) Net loans 20,316,267 20,135,974 17,485,710 17,329,728 17,329,418 Loans held for sale 1,462 2,361 2,532 2,369 1,741 Investment securities: U.S. government and federal agency obligations 3,365,011 3,190,796 3,197,720 2,693,327 2,623,896 Government-sponsored enterprise obligations 54,593 54,800 54,955 55,014 55,038 State and municipal obligations 695,988 709,332 724,737 756,137 780,063 Mortgage-backed securities 4,015,292 4,211,068 4,316,799 4,461,056 4,641,295 Asset-backed securities 1,056,932 1,201,187 1,336,859 1,466,770 1,585,364 Other debt securities 171,284 176,676 196,633 204,281 237,385 Unrealized gain (loss) on debt securities (693,080 ) (630,778 ) (645,595 ) (766,025 ) (838,028 ) Total available for sale debt securities 8,666,020 8,913,081 9,182,108 8,870,560 9,085,013 Trading debt securities 53,144 97,801 61,160 56,032 51,131 Equity securities 92,386 50,378 52,387 50,823 54,472 Other securities 247,335 250,641 227,395 220,041 216,560 Total investment securities 9,058,885 9,311,901 9,523,050 9,197,456 9,407,176 Federal funds sold 733 862 — 23 158 Securities purchased under agreements to resell 934,617 850,000 850,000 850,000 850,000 Interest earning deposits with banks 2,575,956 2,997,340 2,786,891 2,422,441 2,036,803 Other assets 1,986,886 2,074,538 1,700,147 1,709,247 1,671,763 Total assets $34,874,806 $35,372,976 $32,348,330 $31,511,264 $31,297,059 LIABILITIES AND EQUITY: Non-interest bearing deposits $8,034,747 $7,874,488 $7,592,431 $7,345,156 $7,356,882 Savings 1,330,292 1,301,768 1,261,285 1,283,671 1,303,391 Interest checking and money market 15,770,092 16,019,323 14,335,613 13,740,770 13,901,634 Certificates of deposit of less than $100,000 1,026,185 1,035,130 1,015,617 991,877 984,845 Certificates of deposit of $100,000 and over 1,399,523 1,465,168 1,389,149 1,416,572 1,371,428 Total deposits 27,560,839 27,695,877 25,594,095 24,778,046 24,918,180 Borrowings: Federal funds purchased 250,160 141,888 130,487 130,622 129,891 Securities sold under agreements to repurchase 2,299,180 2,674,484 2,429,746 2,519,660 2,371,031 Other borrowings 1,362 90,796 1,230 1,860 2,748 Total borrowings 2,550,702 2,907,168 2,561,463 2,652,142 2,503,670 Other liabilities 403,831 423,998 395,336 402,265 360,204 Total liabilities 30,515,372 31,027,043 28,550,894 27,832,453 27,782,054 Equity 4,359,434 4,345,933 3,797,436 3,678,811 3,515,005 Total liabilities and equity $34,874,806 $35,372,976 $32,348,330 $31,511,264 $31,297,059 COMMERCE BANCSHARES, INC. and SUBSIDIARIES AVERAGE RATES (Unaudited) For the Three Months Ended Jun. 30, 2026 Mar. 31, 2026 Dec. 31, 2025 Sep. 30, 2025 Jun. 30, 2025 ASSETS: Loans: Business (1) 5.39 % 5.41 % 5.48 % 5.72 % 5.72 % Real estate — construction and land 6.40 6.59 7.05 7.37 7.39 Real estate — business 5.70 5.75 5.76 5.92 5.92 Real estate — personal 4.79 4.82 4.38 4.34 4.30 Consumer 6.12 6.20 6.23 6.42 6.43 Revolving home equity 7.27 7.29 7.25 7.94 7.41 Consumer credit card 12.58 12.64 12.81 13.21 13.18 Overdrafts — — — — — Total loans 5.73 5.79 5.84 6.02 6.01 Loans held for sale 6.31 4.98 5.01 6.03 9.22 Investment securities: U.S. government and federal agency obligations 4.76 3.60 4.07 4.06 4.28 Government-sponsored enterprise obligations 2.38 2.40 2.36 2.35 2.38 State and municipal obligations (1) 2.07 2.10 2.06 2.05 2.05 Mortgage-backed securities 2.10 2.12 2.05 2.01 2.08 Asset-backed securities 3.77 3.80 3.78 3.69 3.73 Other debt securities 3.16 3.17 2.97 2.97 2.94 Total available for sale debt securities 3.26 2.85 2.96 2.86 2.95 Trading debt securities (1) 4.37 3.14 4.61 4.67 4.63 Equity securities (1) 3.27 6.49 6.35 6.09 6.26 Other securities (1) 9.28 6.81 9.08 7.29 11.63 Total investment securities 3.42 2.97 3.12 2.99 3.16 Federal funds sold 3.28 3.29 — — 5.08 Securities purchased under agreements to resell 4.03 4.03 4.00 4.00 4.02 Interest earning deposits with banks 3.70 3.70 3.95 4.45 4.46 Total interest earning assets 4.87 4.74 4.74 4.86 4.90 LIABILITIES AND EQUITY: Interest bearing deposits: Savings .06 .07 .05 .05 .05 Interest checking and money market 1.45 1.48 1.45 1.54 1.49 Certificates of deposit of less than $100,000 3.07 3.17 3.25 3.33 3.44 Certificates of deposit of $100,000 and over 3.27 3.35 3.60 3.71 3.78 Total interest bearing deposits 1.57 1.61 1.62 1.71 1.67 Borrowings: Federal funds purchased 3.67 3.66 3.92 4.34 4.37 Securities sold under agreements to repurchase 2.35 2.39 2.54 2.88 2.85 Other borrowings .88 3.88 .65 1.71 3.79 Total borrowings 2.48 2.50 2.61 2.95 2.93 Total interest bearing liabilities 1.68 % 1.72 % 1.75 % 1.87 % 1.83 % Net yield on interest earning assets 3.77 % 3.59 % 3.60 % 3.64 % 3.70 % (1) Stated on a fully taxable-equivalent basis using a federal income tax rate of 21%. COMMERCE BANCSHARES, INC. and SUBSIDIARIES CREDIT QUALITY (Unaudited) (In thousands, except ratios) For the Three Months Ended For the Six Months Ended Jun. 30, 2026 Mar. 31, 2026 Dec. 31, 2025 Sep. 30, 2025 Jun. 30, 2025 Jun. 30, 2026 Jun. 30, 2025 ALLOWANCE FOR CREDIT LOSSES ON LOANS Balance at beginning of period $198,605 $179,468 $175,671 $165,260 $167,031 $179,468 $162,742 Initial allowance for credit loss at acquisition — 22,828 — — — 22,828 — Provision for credit losses on loans 6,311 11,283 13,660 20,739 7,919 17,594 23,014 Net charge-offs (recoveries): Commercial portfolio: Business 224 241 222 826 432 465 478 Real estate — construction and land — — 16 — 24 — 24 Real estate — business (7 ) 5,405 (24 ) (23 ) (425 ) 5,398 (48 ) 217 5,646 214 803 31 5,863 454 Personal banking portfolio: Consumer credit card 7,029 7,139 6,488 6,515 7,085 14,168 14,052 Consumer 1,598 1,768 2,498 2,310 2,168 3,366 5,020 Overdraft 411 413 485 432 360 824 855 Real estate — personal 203 2 180 269 35 205 107 Revolving home equity 83 6 (2 ) (1 ) 11 89 8 9,324 9,328 9,649 9,525 9,659 18,652 20,042 Total net loan charge-offs 9,541 14,974 9,863 10,328 9,690 24,515 20,496 Balance at end of period $195,375 $198,605 $179,468 $175,671 $165,260 $195,375 $165,260 LIABILITY FOR UNFUNDED LENDING COMMITMENTS $20,119 $17,699 $17,660 $15,327 $16,005 NET CHARGE-OFF RATIOS (1) Commercial portfolio: Business .01 % .01 % .01 % .05 % .03 % .01 % .02 % Real estate — construction and land — — — — .01 — — Real estate — business — .54 — — (.05 ) .27 — .01 .19 .01 .03 — .10 .01 Personal banking portfolio: Consumer credit card 5.18 5.21 4.55 4.59 5.08 5.19 5.06 Consumer .26 .30 .45 .42 .40 .28 .48 Overdraft 22.61 23.45 29.19 24.36 25.50 23.02 29.93 Real estate — personal .02 — .02 .03 — .01 .01 Revolving home equity .05 — — — .01 .03 — .47 .47 .62 .61 .63 .47 .66 Total .19 % .30 % .22 % .23 % .22 % .24 % .24 % CREDIT QUALITY RATIOS Non-accrual loans to total loans .06 % .05 % .09 % .09 % .11 % Allowance for credit losses on loans to total loans .94 .97 1.01 .99 .94 NON-ACCRUAL AND PAST DUE LOANS Non-accrual loans: Business $92 $201 $123 $255 $410 Real estate — construction and land — — — 191 426 Real estate — business 9,365 9,369 14,785 14,940 15,109 Real estate — personal 2,128 1,316 842 867 948 Revolving home equity 33 34 — — 1,977 Total 11,618 10,920 15,750 16,253 18,870 Loans past due 90 days and still accruing interest $23,703 $22,824 $24,659 $21,536 $25,303 (1) Net charge-offs are annualized and calculated as a percentage of average loans (excluding loans held for sale). COMMERCE BANCSHARES, INC. Management Discussion of Second Quarter Results June 30, 2026 For the quarter ended June 30, 2026, net income amounted to $159.8 million, compared to $141.6 million in the previous quarter and $152.5 million in the same quarter last year. The increase in net income over the previous quarter was primarily the result of higher net interest income, non-interest income, and a decrease in the provision for credit losses, partly offset by higher non-interest expense. The net yield on interest earning assets increased 18 basis points over the previous quarter to 3.77%. Average loans increased $176.6 million, while average deposits and available for sale investment securities, at fair value, decreased $135.0 million and $247.1 million, respectively, compared to the prior quarter. For the quarter, the return on average assets was 1.84%, the return on average equity was 14.70%, and the efficiency ratio was 58.40%. Balance Sheet Review During the 2nd quarter of 2026, average loans totaled $20.5 billion, an increase of $176.6 million over the prior quarter, and an increase of $3.0 billion over the same quarter last year. The increase in average balances over same quarter last year was primarily due to the acquisition of FineMark, which added $2.7 billion in loan balances on January 1, 2026. Compared to the previous quarter, average balances of business and consumer loans grew $177.2 million and $51.4 million, respectively, while average construction loan balances declined $46.7 million. During the current quarter, the Company sold certain fixed rate personal real estate loans totaling $15.9 million, compared to $26.2 million in the prior quarter. Total average available for sale debt securities decreased $247.1 million from the previous quarter to $8.7 billion, at fair value. The decrease in available for sale debt securities was mainly the result of lower average balances of mortgage-backed and asset-backed securities, partly offset by higher average balances of U.S. government and federal agency obligations. During the 2nd quarter of 2026, the unrealized loss on available for sale debt securities decreased $68.9 million to $618.6 million, at period end. Also, during the 2nd quarter of 2026, purchases of available for sale debt securities totaled $810.0 million with a weighted average yield of approximately 4.21%. Sales, maturities and pay downs of available for sale debt securities were $1.2 billion, which included the sale of all the Company’s portfolio of U.S. Treasury inflation-protected securities (TIPS). On June 30, 2026, the duration of the available for sale investment portfolio was 4.2 years, and maturities and pay downs of approximately $1.1 billion are expected to occur during the next 12 months. Total average deposits decreased $135.0 million this quarter compared to the previous quarter and increased $2.6 billion compared to the same quarter last year. The decrease in average balances compared to the prior quarter was primarily due to lower interest checking and money market deposits, partly offset by higher non-interest bearing demand deposit balances, while the increase in average balances over the same quarter last year was primarily due to the FineMark acquisition. Compared to the prior quarter, average interest checking and money market deposits decreased $249.2 million, while non-interest bearing demand deposits increased $160.3 million. Compared to the previous quarter, total average retail banking deposits grew $256.5 million, while commercial and wealth deposits declined $332.6 million and $61.4 million, respectively. The average loans to deposits ratio was 74.4% in the current quarter and 73.4% in the prior quarter. The Company’s average borrowings, which included average customer repurchase agreements of $2.3 billion, decreased $356.5 million to $2.6 billion in the 2nd quarter of 2026. Net Interest Income Net interest income in the 2nd quarter of 2026 amounted to $315.1 million, an increase of $15.2 million over the previous quarter. On a fully taxable-equivalent (FTE) basis, net interest income for the current quarter increased $15.3 million over the previous quarter to $317.5 million. The increase in net interest income was mostly due to higher interest income on loans and investment securities and lower interest expense on borrowing and deposits, partly offset by lower interest income on deposits with banks. Accretion income on FineMark’s loans resulting from purchase accounting adjustments totaled $6.2 million. The net yield (FTE) on earning assets increased to 3.77%, from 3.59% in the prior quarter. Compared to the previous quarter, interest income on loans (FTE) increased $3.1 million, mostly due to higher average balances of business and consumer loans and higher average rates earned on business loans. These increases were partly offset by lower average balances and rates on construction loans. The average yield (FTE) on the loan portfolio decreased six basis points to 5.73% this quarter. Interest income on investment securities (FTE) increased $10.4 million over the prior quarter, mostly due to higher average balances and rates earned on U.S. government and federal agency obligations and higher rates earned on other securities, partly offset by lower average balances of asset-backed and mortgage-backed securities. Interest income earned on U.S. government and federal agency obligations included $9.1 million in TIPS inflation income, a $9.6 million increase over the previous quarter. Interest income on other securities included dividend income of $863 thousand related to a private equity investment. Additionally, the Company recorded a $1.1 million adjustment to premium amortization at June 30, 2026, which increased interest income to reflect slower forward prepayment speed estimates on mortgage-backed securities. This increase was higher than the $940 thousand adjustment that increased interest income in the prior quarter. The average yield (FTE) on total investment securities was 3.42% in the current quarter, compared to 2.97% in the previous quarter. Compared to the previous quarter, interest income on deposits with banks decreased $3.6 million due to lower average balances. Interest expense decreased $4.4 million compared to the previous quarter, mainly due to lower average balances of deposits and borrowings. Interest expense on deposits decreased $2.3 million mostly due to lower average balances and rates paid on interest checking and money market deposit accounts. Interest expense on borrowings decreased $2.1 million mostly due to lower average balances of securities sold under agreements to repurchase. The average rate paid on interest bearing deposits was 1.57% in the current quarter compared to 1.61% in the prior quarter. The overall rate paid on interest bearing liabilities was 1.68% in the current quarter and 1.72% in the prior quarter. Non-Interest Income In the 2nd quarter of 2026, total non-interest income amounted to $183.8 million, an increase of $18.2 million, or 11.0%, over the same period last year and an increase of $8.0 million, or 4.5%, over the prior quarter. The increase in non-interest income over the same period last year was mainly due to higher trust fees and deposit account fees, partly offset by lower gains on sales of assets. The increase in non-interest income compared to the prior quarter was mainly due to higher bank card fee and swap fee income. Additionally, an increase of $2.5 million in fair value adjustments was recorded on the Company’s deferred compensation plan, which are held in a trust and recorded as both an asset and a liability, affecting both other income and other expense. Total net bank card fees in the current quarter increased over the same period last year and the prior quarter by $1.8 million, or 3.8%, and $2.5 million, or 5.6%, respectively. Compared to the same period last year, net credit card fees increased $804 thousand, or 24.8%, primarily due to lower rewards expense, and net merchant fees increased $212 thousand, or 3.6%, primarily due to lower royalty expense and lower network expense. Net corporate card fees increased $811 thousand, or 3.1%, due to higher interchange fees, partly offset by higher rewards expense, while debit card fees decreased $68 thousand. Total net bank card fees this quarter were comprised of fees on corporate card ($26.7 million), debit card ($11.2 million), merchant ($6.1 million) and credit card ($4.0 million) transactions. In the current quarter, trust fees increased $15.9 million, or 28.7%, over the same period last year, and increased $463 thousand, over the prior quarter, mostly resulting from higher private client fees. Compared to the same period last year, deposit account fees increased $3.0 million, or 11.5%, mostly due to higher corporate cash management fees. For the 2nd quarter of 2026, non-interest income comprised 36.8% of the Company’s total revenue. Investment Securities Gains and Losses The Company recorded net securities gains of $12.8 million in the current quarter, compared to net gains of $11.6 million in the prior quarter and $437 thousand in the 2nd quarter of 2025. Net securities gains in the current quarter resulted primarily from gains of $105.4 million recognized on Visa Inc. (“Visa”) common stock and $8.6 million on other equity securities. During the 2nd quarter of 2026, the Company sold 103 thousand shares of Visa Class A common stock (converted from 26 thousand shares of Visa Class C common stock) at an average price of $333.11. As of June 30, 2026, the Company has sold one third of the Visa Class C shares it received from the 2026 Visa exchange offer. Partly offsetting these gains, net fair value losses of $4.0 million were recorded on the Company’s portfolio of private equity investments. In addition, as a result of the completion of the Company’s previously disclosed repositioning of a portion of its available for sale debt securities portfolio, net losses of $97.7 million were realized during the quarter. Non-Interest Expense Non-interest expense for the current quarter amounted to $297.1 million, compared to $244.4 million in the same period last year and $291.1 million in the prior quarter. The increase in non-interest expense over the same period last year was mainly due to higher salaries and benefits expense, data processing and software expense, professional and other services expense, litigation expense, and intangible amortization expense. The increase in non-interest expense over the prior quarter was mainly due to higher salaries expense and litigation expense, partly offset by lower benefits expense and professional and other services expense. Compared to the 2nd quarter of 2025, salaries and employee benefits expense increased $24.9 million, or 16.1%, mostly due to the onboarding of FineMark’s team members at the beginning of 2026. Acquisition-related salaries and benefits expense was $3.7 million in the current quarter. Full-time equivalent employees totaled 4,976 and 4,658 at June 30, 2026 and 2025, respectively. Compared to the same period last year, data processing and software expense increased $5.3 million due to higher costs for service providers and software. Professional and other services expense increased $3.5 million compared to the 2nd quarter of 2025, and included $1.5 million in acquisition-related legal and professional services expense. The increase in other non-interest expense was mainly due to increases of $12.0 million in litigation expense and $5.4 million in intangible amortization expense related to the FineMark acquisition. Income Taxes The effective tax rate for the Company was 22.3% in the current quarter, 22.4% in the prior quarter, and 21.8% in the 2nd quarter of 2025. Credit Quality Net loan charge-offs in the 2nd quarter of 2026 amounted to $9.5 million, compared to $15.0 million in the prior quarter, and $9.7 million in the same period last year. The ratio of annualized net charge-offs to total average loans was .19% in the current quarter, .30% in the previous quarter, and .22% in the same quarter of last year. Compared to the prior quarter, net charge-offs on business real estate loans decreased $5.4 million. In the 2nd quarter of 2026, annualized net charge-offs on average consumer credit card loans were 5.18%, compared to 5.21% in the previous quarter and 5.08% in the same quarter last year. Consumer loan net charge-offs were .26% of average consumer loans in the current quarter, .30% in the prior quarter, and .40% in the same quarter last year. At June 30, 2026, the allowance for credit losses on loans totaled $195.4 million, or .94% of total loans, and decreased $3.2 million compared to the prior quarter. Additionally, the liability for unfunded lending commitments on June 30, 2026 was $20.1 million, an increase of $2.4 million compared to the liability on March 31, 2026. At June 30, 2026, total non-accrual loans amounted to $11.6 million, an increase of $698 thousand compared to the previous quarter. At June 30, 2026, the balance of non-accrual loans, which represented .06% of loans outstanding, included business real estate loans of $9.4 million, personal real estate loans of $2.1 million and business loans of $92 thousand. Loans more than 90 days past due and still accruing interest totaled $23.7 million at June 30, 2026. Other During the 2nd quarter of 2026, the Company paid a cash dividend of $.275 per common share, representing a 5% increase over the same period last year. The Company purchased approximately 2.1 million shares of treasury stock during the current quarter at an average price of $53.03. Forward Looking Information This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions, and other statements that are not historical facts. Such statements are based on current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. Additional information about risks and uncertainties is included in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections within the Company's Annual Report on Form 10-K. Source: Commerce Bancshares, Inc.