Commerce Bancshares CBSH Form 8-K filing Earnings

FOR IMMEDIATE RELEASE:

Thursday, July 16, 2026

COMMERCE BANCSHARES, INC. REPORTS

SECOND QUARTER EARNINGS PER SHARE OF $1.10

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.

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For additional information, contact

Matt Burkemper, Investor Relations

(314) 746-7485

www.commercebank.com

matthew.burkemper@commercebank.com

(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.

(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.

(1) Stated on a fully taxable-equivalent basis using a federal income tax rate of 21%.

(1) Net charge-offs are annualized and calculated as a percentage of average loans (excluding loans held for sale).

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

Management Discussion of Second Quarter Results

June 30, 2026

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

Management Discussion of Second Quarter Results

June 30, 2026

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.