Commerce Bancshares (CBSH) 8-K COMMERCE BANCSHARES, INC. REPORTS EARNINGS PER SHARE GROWTH OF 9% for 2003

EXHIBIT 99.1

FOR IMMEDIATE RELEASE:
Wednesday, January 14, 2004

COMMERCE BANCSHARES, INC. REPORTS
EARNINGS PER SHARE GROWTH OF 9% for 2003

     Commerce Bancshares, Inc. announced record earnings of $2.95 per share in 2003 compared to $2.71 per share in 2002, an increase of 9%. Net income for 2003 amounted to $206.5 million compared to $196.3 million earned in 2002. For the year, the return on assets was 1.5%, while the return on equity totaled 14.3%.

     For the fourth quarter, earnings per share grew to $.78, compared to $.71 for the same period last year, an increase of 10%. Net income for the quarter amounted to $53.9 million, an increase of 6% compared with $50.9 million last year. The return on average assets was 1.5% and the return on equity for the quarter was 14.8%. The efficiency ratio for the quarter was 56.8%.

     In announcing these results, David W. Kemper, Chairman and CEO, said, “We are pleased to report the 19th consecutive year of record earnings. Results for 2003 were driven by growth of 8% in non-interest income, which now accounts for 38% of total revenues. We are particularly pleased with the growth in deposit fee income of 12% on an annualized basis. Additionally, results were enhanced by solid expense control. Non-interest expense remained flat compared with the previous quarter and fourth quarter of last year, and has grown overall by 3% this year. Net interest income, which was essentially unchanged from the previous year, was affected by continued low short-term interest rates and a lack of growth in commercial loans.”

     Mr. Kemper added, “Asset quality remains strong with our allowance for loan losses totaling over $135 million. We increased this allowance by over $4 million this year and it remains at 1.66% of total loans. Net loan charge-offs were up 9% over 2002, driven primarily by higher losses in our personal and credit card loan portfolios.”

     Total assets at December 31, 2003 were $14.3 billion, total loans were $8.1 billion, and total deposits were $10.2 billion. At December 31, 2003, the allowance for loan losses totaled $135 million and was 416% of non-performing loans. Net loan charge-offs for the year totaled .46% of average loans outstanding, up from .43% last year. Non-performing assets totaled $33.7 million, or .41% of total loans.

     During the fourth quarter, the Company declared and paid its tenth consecutive annual 5% stock dividend. Per share information for prior periods has been restated for the effect of the 2003 stock dividend.

(more)

     Commerce Bancshares, Inc. is a registered bank holding company offering a full line of banking services, including investment management and securities brokerage. The Company currently operates in approximately 330 banking locations in Missouri, Illinois, and Kansas. The Company also has operating subsidiaries involved in mortgage banking, credit related insurance, venture capital, leasing and real estate activities.

     Posted to the Company’s web site is management’s discussion of fourth quarter results. To see this information please visit our web site at www.commercebank.com.

* * * * * * * * * * * * * * *

For additional information, contact
Jeffery Aberdeen, Controller
at PO Box 13686, Kansas City, MO
or by telephone at (816) 234-2081
Web Site: http://www.commercebank.com
Email: mymoney@commercebank.com

(Amounts in thousands)	9/30/03			12/31/03			12/31/02
Non-Accrual Loans	$	32,372		$	32,523		$	28,065
Foreclosed Real Estate	$	2,036		$	1,162		$	1,474
Total Non-Performing Assets	$	34,408		$	33,685		$	29,539
Non-Performing Assets to Loans		.43	%		.41	%		.38	%
Non-Performing Assets to Total Assets		.25	%		.24	%		.22	%
Loans 90 Days & Over Past Due – Still Accruing	$	19,100		$	20,901		$	22,428

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
FINANCIAL HIGHLIGHTS

		For the Three Months Ended									For the Year Ended
		Sept. 30			Dec. 31			Dec. 31			Dec. 31			Dec. 31
(Unaudited)		2003			2003			2002			2003			2002
FINANCIAL SUMMARY(In thousands, except per share data)
Net interest income		$	121,988		$	127,507		$	127,930		$	502,392		$	499,965
Taxable equivalent net interest income			123,065			128,149			128,527			505,399			501,958
Non-interest income			76,940			76,420			72,500			301,667			280,572
Provision for loan losses			9,655			11,002			10,848			40,676			34,108
Non-interest expense			116,430			116,765			116,049			472,144			458,200
Net income			54,948			53,861			50,899			206,524			196,310
Cash dividends			14,788			14,613			10,384			51,266			42,185
Net total loan charge-offs			9,660			8,482			10,818			36,573			33,463
	Net business charge-offs (recov)		2,314			(105	)		3,503			7,581			8,813
	Net credit card charge-offs		4,925			5,389			4,509			19,664			17,283
	Net personal banking charge-offs		2,062			2,468			2,147			8,470			6,899
	Net real estate charge-offs		359			730			659			858			468
Per share:
	Net income — basic	$	0.79		$	0.79		$	0.72		$	2.98		$	2.74
	Net income — diluted	$	0.79		$	0.78		$	0.71		$	2.95		$	2.71
	Cash dividends	$	0.214		$	0.214		$	0.147		$	0.743		$	0.590
Diluted wtd. average shares o/s			69,936			69,385			71,409			70,112			72,516
RATIOS
Average loans to deposits			79.81	%		79.38	%		81.18	%		79.96	%		79.29	%
Return on total average assets			1.60	%		1.54	%		1.58	%		1.52	%		1.58	%
Return on total average stockholders’ equity			14.96	%		14.77	%		14.36	%		14.27	%		14.42	%
Efficiency ratio*			58.56	%		56.82	%		58.34	%		58.83	%		58.62	%
AT PERIOD END
Book value per share based on total stockholders’ equity		$	21.03		$	21.37		$	20.21
Market value per share		$	41.67		$	49.02		$	37.42
Allowance for loan losses as a percentage of loans			1.67	%		1.66	%		1.66	%
Tier I leverage ratio			9.88	%		9.71	%		10.18	%
Common shares outstanding			68,509,806			67,891,458			70,381,097
Shareholders of record			4,934			4,920			5,081
Number of bank/ATM locations			328			328			340
Number of bank charters			4			4			4
Full-time equivalent employees			4,986			4,967			5,012

	Dec. 31		Dec. 31
OTHER YTD INFORMATION	2003		2002
High market value per share	$	49.34	$	42.49
Low market value per share	$	33.52	$	31.40

*The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of net interest income and non-interest income (excluding gains/losses on securities transactions).

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

			For the Three Months Ended							For the Year Ended
(Unaudited)			Sept. 30		Dec. 31			Dec. 31		Dec. 31		Dec. 31
(In thousands, except per share data)			2003		2003			2002		2003		2002
INTEREST INCOME
Interest and fees on loans			$	107,379	$	105,737		$	115,993	$	433,495	$	471,900
Interest on investment securities				40,940		47,646			45,614		183,084		179,167
Interest on federal funds sold and securities purchased under agreements to resell				210		266			300		831		1,486
		Total interest income		148,529		153,649			161,907		617,410		652,553
INTEREST EXPENSE
Interest on deposits:
	Savings, interest checking and money market			6,292		6,263			9,494		28,742		45,247
	Time open and C.D.’s of less than $100,000			11,354		10,525			15,202		48,440		70,367
	Time open and C.D.’s of $100,000 and over			3,363		3,064			4,037		14,278		18,252
Interest on other borrowings				5,532		6,290			5,244		23,558		18,722
		Total interest expense		26,541		26,142			33,977		115,018		152,588
		Net interest income		121,988		127,507			127,930		502,392		499,965
Provision for loan losses				9,655		11,002			10,848		40,676		34,108
		Net interest income after provision for loan losses		112,333		116,505			117,082		461,716		465,857
NON-INTEREST INCOME
Trust fees				15,446		15,877			14,715		60,921		60,682
Deposit account charges and other fees				27,469		29,126			23,667		102,591		91,303
Bank card transaction fees				15,507		16,192			16,023		62,222		57,850
Trading account profits and commissions				3,653		3,127			4,016		14,740		15,954
Consumer brokerage services				2,306		2,284			2,034		9,095		9,744
Mortgage banking revenue				907		449			1,316		4,007		4,277
Net gains (losses) on securities transactions				896		(777	)		2,249		4,560		2,835
Other				10,756		10,142			8,480		43,531		37,927
		Total non-interest income		76,940		76,420			72,500		301,667		280,572
NON-INTEREST EXPENSE
Salaries and employee benefits				65,036		64,964			63,614		264,599		255,828
Net occupancy				9,451		9,508			9,166		38,736		34,635
Equipment				5,849		6,168			6,132		24,104		22,865
Supplies and communication				8,539		7,995			8,439		33,474		32,929
Data processing and software				10,303		10,499			10,516		40,567		44,963
Marketing				3,936		3,398			4,167		14,397		15,001
Other intangible assets amortization				453		442			423		1,794		2,323
Other				12,863		13,791			13,592		54,473		49,656
							��
		Total non-interest expense		116,430		116,765			116,049		472,144		458,200
Income before income taxes				72,843		76,160			73,533		291,239		288,229
Less income taxes				17,895		22,299			22,634		84,715		91,919
NET INCOME			$	54,948	$	53,861		$	50,899	$	206,524	$	196,310
Net income per share — basic			$	0.79	$	0.79		$	0.72	$	2.98	$	2.74
Net income per share — diluted			$	0.79	$	0.78		$	0.71	$	2.95	$	2.71
Cash dividends per common share			$	0.214	$	0.214		$	0.147	$	0.743	$	0.590

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(Unaudited)			Sept. 30			Dec. 31			Dec. 31
(In thousands)			2003			2003			2002
ASSETS
Loans, net of unearned income			$	7,945,119		$	8,142,679		$	7,875,944
Allowance for loan losses				(132,701	)		(135,221	)		(130,618	)
		Net loans		7,812,418			8,007,458			7,745,326
Investment securities:
	Available for sale			4,555,494			4,956,668			4,201,477
	Trading			12,009			9,356			11,635
	Non-marketable			74,021			73,170			62,136
		Total investment securities		4,641,524			5,039,194			4,275,248
Federal funds sold and securities purchased under agreements to resell				96,745			108,120			16,945
Cash and due from banks				542,905			567,123			710,406
Land, buildings and equipment — net				332,940			336,366			335,230
Goodwill				48,522			48,522			43,224
Other intangible assets — net				2,623			2,184			3,967
Other assets				169,637			178,197			178,069
		Total assets	$	13,647,314		$	14,287,164		$	13,308,415
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
	Non-interest bearing demand		$	1,545,546		$	1,716,214		$	1,478,880
	Savings, interest checking and money market			6,024,602			6,080,543			5,878,230
	Time open and C.D.’s of less than $100,000			1,779,186			1,730,237			1,952,850
	Time open and C.D.’s of $100,000 and over			605,181			679,214			603,351
		Total deposits		9,954,515			10,206,208			9,913,311
Federal funds purchased and securities sold under agreements to repurchase				1,731,736			2,108,920			1,459,868
Long-term debt and other borrowings				412,169			400,977			338,457
Other liabilities				107,858			120,105			174,327
		Total liabilities		12,206,278			12,836,210			11,885,963
Stockholders’ equity:
	Preferred stock			—			—			—
	Common stock			336,940			343,183			336,192
	Capital surplus			294,900			359,300			290,041
	Retained earnings			823,443			707,136			707,433
	Treasury stock			(82,876	)		(29,573	)		(5,507	)
	Other			(2,135	)		(1,963	)		(1,800	)
	Accumulated other comprehensive income			70,764			72,871			96,093
		Total stockholders’ equity		1,441,036			1,450,954			1,422,452
		Total liabilities and stockholders’ equity	$	13,647,314		$	14,287,164		$	13,308,415

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE BALANCES

			For the Three Months Ended									For the Year Ended
(Unaudited)			Sept. 30			Dec. 31			Dec. 31			Dec. 31			Dec. 31
(Dollars in thousands)			2003			2003			2002			2003			2002
Loans:
Business			$	2,072,666		$	2,007,568		$	2,453,906		$	2,148,881		$	2,418,517
Real estate — construction				399,141			410,272			491,960			404,058			474,307
Real estate — business				1,851,866			1,870,190			1,527,722			1,831,575			1,483,012
Real estate — personal				1,312,740			1,335,977			1,237,253			1,304,677			1,247,209
Personal banking				1,837,508			1,853,015			1,738,396			1,793,219			1,646,549
Credit card				533,213			538,310			507,507			527,049			492,148
	Total loans			8,007,134			8,015,332			7,956,744			8,009,459			7,761,742
Investment securities (excluding unrealized gains and losses):
Available for sale				4,401,412			4,693,803			3,616,148			4,348,969			3,517,251
Trading				10,565			9,368			11,893			17,003			10,931
Non-marketable				78,180			77,549			69,402			74,501			66,666
	Total investment securities			4,490,157			4,780,720			3,697,443			4,440,473			3,594,848
Federal funds sold and securities purchased under agreements to resell				65,026			85,505			78,358			63,232			84,278
Total interest earning assets				12,562,317			12,881,557			11,732,545			12,513,164			11,440,868
Total assets				13,590,902			13,885,498			12,756,592			13,542,758			12,413,838
Deposits:
Non-interest bearing deposits				1,112,998			1,183,899			1,014,591			1,083,207			974,941
Interest bearing deposits:
	Savings			386,470			388,448			353,815			380,323			353,779
	Interest checking			415,946			435,975			302,240			404,193			299,764
	Money market			5,660,130			5,699,117			5,543,873			5,611,634			5,462,701
	Time open & C.D.’s of less than $100,000			1,806,005			1,755,471			1,967,132			1,838,137			2,046,041
	Time open & C.D.’s of $100,000 and over			651,504			634,196			619,603			699,241			651,336
		Total interest bearing deposits		8,920,055			8,913,207			8,786,663			8,933,528			8,813,621
	Total deposits			10,033,053			10,097,106			9,801,254			10,016,735			9,788,562
Borrowings:
Federal funds purchased and securities sold under agreements to repurchase				1,558,322			1,815,160			1,052,186			1,552,439			776,231
Long-term debt and other borrowings				410,123			409,220			360,771			392,798			367,317
	Total borrowings			1,968,445			2,224,380			1,412,957			1,945,237			1,143,548
Total interest bearing liabilities				10,888,500			11,137,587			10,199,620			10,878,765			9,957,169
Total stockholders’ equity				1,456,858			1,446,380			1,406,232			1,446,973			1,361,585
Net yield on interest earning assets (tax-equivalent basis)				3.89	%		3.95	%		4.35	%		4.04	%		4.39	%

COMMERCE BANCSHARES, INC.
Management Discussion of Fourth Quarter Results
December 31, 2003

For the quarter ended December 31, 2003, net income amounted to $53.9 million, an increase of 5.8% over the 4th quarter of the previous year. The return on assets was 1.5% and the return on equity totaled 14.8%. For the quarter, the efficiency ratio amounted to 56.8%. The increase in net income over the 4th quarter of last year was the result of a 5.4% increase in non-interest income and lower income taxes, offset by an increase in the provision for loan losses and a slight increase in expenses.

Balance Sheet Review
During the 4th quarter, average loans increased slightly compared with the previous quarter, and were up 1% compared to the same period last year. Compared to the 3rd quarter of this year, average business real estate, construction, personal real estate, personal banking (mainly automobile) and credit card loans grew by $18.3 million, $11.1 million, $23.2 million, $15.5 million and $5.1 million, respectively. Business loans declined by $65.1 million. While the economic climate continues to be uncertain and average business loan totals continued to decline this quarter, signs seem to indicate that businesses may be ready to expand operations and borrowing activities. Business and personal real estate loans continued to show growth, aided by the low interest rate environment; however, new personal mortgage originations have declined. The increase in personal banking loans was the result of continued growth in home equity loans and growth in auto and marine lending, which occurred mainly at the end of the 3rd quarter.

Available for sale investment securities, excluding fair value adjustments, increased on average $292.4 million, or 6.6%, this quarter compared with the previous quarter. During the quarter, principal prepayments received on mortgage and asset-backed securities slowed $256.3 million, down from $472.7 million in the previous quarter, reflecting lower mortgage refinancing activities affecting the industry. Combined with scheduled maturities, this reduced the portfolio by $450.0 million. However, new purchases of investment securities during the quarter totaled $805.0 million, and consisted mainly of U.S. government and agency ($300.8 million), mortgage-backed ($245.0 million) and asset-backed securities ($195.9 million).

Total average deposits grew slightly during the 4th quarter compared to the 3rd quarter of this year, and were up 3.0% compared to the same period last year. The increase over the 3rd quarter of this year was due mainly to growth in non-interest demand deposits ($70.9 million), interest checking ($20.0 million) and corporate money market deposits ($39.0 million). This growth was offset by declines in jumbo certificates of deposit ($17.3 million) and retail certificates of deposit ($50.5 million).

During the quarter, average borrowings increased by $255.9 million, primarily due to growth in federal funds purchased and repurchase agreements.

Net Interest Income
In the 4th quarter, net interest income amounted to $127.5 million, an increase of approximately $5.5 million, or 4.5%, compared to the 3rd quarter of this year, and slightly lower than the amount recorded in the same quarter of the previous year. The net yield on earning assets increased 6 basis points in the current quarter to 3.95%.

The increase in net interest income in the 4th quarter of 2003 compared to the previous quarter was the result of greater interest earned on investment securities coupled with lower interest on deposits, offset by lower interest income on loans. Interest earned on the Company’s inflation-indexed treasury securities increased $2.6 million in the current quarter compared with the 3rd quarter 2003, as a result of a higher inflation index in the 4th quarter. In addition, new purchases of investment securities, as previously mentioned, and a reduction of principal prepayments and maturities of mortgage and asset-backed securities helped to reduce premium amortization and increase net interest income. Rates on certificates of deposit continued to fall and were the main contributor to lower deposit costs.

Offsetting this growth in net interest income were lower yields on various categories of loans and lower average balances of business loans. In addition, growth in average short-term borrowed funds, mainly federal funds purchased and repurchase agreements, also increased interest expense. During the quarter, the overall yield on interest earning assets increased 3 basis points to 4.75%, while the cost of interest bearing liabilities decreased 4 basis points to .93%.

Non-Interest Income
For the 4th quarter of 2003, total non-interest income amounted to $76.4 million compared with $72.5 million in the same quarter last year, or an increase of 5.4%. This increase resulted from growth in deposit account, operating lease and trust fee revenues, but was offset by lower securities gains and flat bankcard fees. Deposit account fees in the 4th quarter grew by 23.1% over the same quarter last year as a result of an increase in overdraft fees and commercial cash management revenues. Bankcard fees for the quarter increased by 1.1% over the same period last year, primarily as a result of a 10.6% increase in merchant interchange revenue and 10.6% growth in cardholder fees. Debit card fees, however, declined 14.6% as a result of lower transaction pricing beginning in August due to the VISA lawsuit settlement. Trust fees for the current quarter were up 7.9% over the same quarter last year as a result of higher fees on personal and

COMMERCE BANCSHARES, INC.
Management Discussion of Fourth Quarter Results
December 31, 2003

corporate trust accounts, due to improved asset valuations upon which fees are charged. Other income in the 4th quarter of 2003 included operating lease revenues of $1.1 million related to the CBI Leasing subsidiary, which was acquired at the beginning of this year, and were not present in the 4th quarter of 2002. During the 4th quarter of 2003 student loan gains of $919 thousand were recorded, compared with the 4th quarter of last year when student loan gains totaled $1.1 million.

During the current quarter, net securities losses amounted to $777 thousand, compared with net securities gains of $2.2 million in the same period last year. The securities losses this quarter were mainly the result of valuation reserves taken on a venture capital investment.

Non-Interest Expense
Non-interest expense for the quarter amounted to $116.8 million, a slight increase compared with $116.0 million recorded in the 4th quarter of last year. Non-interest expense was only slightly higher than in the previous quarter.

Compared with the 4th quarter of last year, salaries increased 1.6% mainly due to normal merit increases, but offset by lower costs for temporary, over-time and contract labor. Benefits increased 5.5% mainly due to higher costs for pension and medical insurance, but offset by lower 401K contribution expenses. Full-time equivalent employees totaled 4,967 and 5,012 at December 31, 2003 and 2002, respectively. Expenses also declined for communications costs and marketing costs with small increases in other expense categories. Included in other expense were operating lease depreciation and related costs totaling $697 thousand related to the CBI Leasing subsidiary which were not present last year.

Income Taxes
The effective tax rate for the Company was 29.3% for the 4th quarter of 2003, compared with an effective tax rate of 24.6% in the 3rd quarter of 2003 and 30.8% in the 4th quarter of 2002. As more fully discussed in the Company’s Form 10-Q for the quarter ended September 30, 2003, the low effective tax rate in the 3rd quarter 2003 resulted mainly from the recognition of additional tax benefits totaling $3.4 million from various corporate reorganization initiatives. For the year ended December 31, 2003, tax benefits relating to these initiatives amounted to $15.7 million. Additional tax benefits related to these initiatives will not be recognized into income until certain conditions are satisfied. It is projected that such conditions may be resolved as early as the 3rd quarter 2004 relating to approximately $18.9 million of the remaining benefits. However because of the timing of such recognition, it is expected that the effective tax rate will be higher in the first two quarters of 2004.

Credit Quality
Net loan charge-offs for the 4th quarter of 2003 amounted to $8.5 million, compared with $9.7 million in the 3rd quarter of 2003 and $10.8 million in the 4th quarter of last year. The ratio of annualized net charge-offs to total average loans this quarter was .42%, compared with .54% in the same quarter last year and .48% in the 3rd quarter of 2003. Net charge-offs for the current quarter included the write off of a number of smaller commercial and lease loans totaling $2.0 million, coupled with higher consumer and bankcard charge-offs. In addition, recoveries totaling $2.4 million were received on two commercial loans, which had been previously charged off.

For the 4th quarter of 2003, net charge-offs on average credit card loans increased to 3.97%, compared with 3.52% in the 4th quarter of last year. Also, personal loan charge-offs increased this quarter and amounted to .53% of average personal loans compared to .49% in the same period last year. The provision for loan losses for the quarter totaled $11.0 million, an increase of $1.3 million over the provision recorded in the 3rd quarter of this year, but up only slightly from the amount recorded in the 4th quarter of last year. The allowance for loan losses at December 31, 2003 amounted to $135.2 million, or 1.66% of total loans, and represented 416% of total non-performing loans.

Total non-performing assets amounted to $33.7 million, a decrease of $723 thousand from the previous quarter, and amounted to .41% of loans. Non-performing assets are comprised of non-accrual loans ($32.5 million) and foreclosed real estate ($1.2 million). Loans past due more than 90 days and still accruing interest totaled $20.9 million at December 31, 2003.

Other
The Company maintains a treasury stock buyback program; and effective January 2003, was authorized by the Board of Directors to repurchase up to 4 million shares of its common stock. During the quarter ended December 31, 2003, the Company purchased 756,000 shares of treasury stock at an average cost of $48.17 per share.

Forward Looking Information
This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, including estimates made on income taxes, expectations on the economy and other 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.