Exhibit 99.1
FOR IMMEDIATE RELEASE:
Wednesday, July 12, 2006
COMMERCE BANCSHARES, INC. REPORTS FIRST SIX
MONTHS EARNINGS PER SHARE GROWTH OF 10%
Commerce Bancshares, Inc. announced earnings of $1.60 per share for the six months ended June 30, 2006, an increase of 10% compared to $1.46 per share during the same period in 2005. Net income for the first six months of 2006 amounted to $108.3 million compared with $104.2 million in the same period last year. The return on average assets for the first six months ended June 30, 2006 was 1.59%, and the return on average equity was 16.4%.
For the three months ended June 30, 2006, earnings per share totaled $.82, an increase of 6.5% compared with $.77 in the second quarter of 2005. Net income amounted to $55.3 million compared with $54.4 million in the same period last year and $52.9 million in the first quarter 2006. The return on average assets for the three months ended June 30, 2006 was 1.61% and the return on average equity was 16.6%. The efficiency ratio was 60.4%.
In making this announcement, David W. Kemper, Chairman & CEO, said, “We are pleased to report 10% earnings per share growth for the first six months of 2006. This resulted from overall revenue growth of 4%, coupled with good expense control and lower levels of loan losses. Continued improvement in the mix of assets on our balance sheet generated an increase of $1.4 million in net interest income, while non-interest income, excluding net securities gains, grew $14.5 million or 9.0% over the prior year. Non-interest income now comprises 41% of total revenue. During this period, average loans grew by 8% and this growth was funded by a combination of deposit growth and a reduction in our investment securities portfolio. Our net yield on earning assets improved by 12 basis points to 3.98%, despite a difficult interest rate environment.”
Mr. Kemper added, “Asset quality continued to remain strong in the second quarter, with annualized net loan charge-offs totaling .25% of average loans compared with .33% in the same quarter last year, mainly due to lower levels of losses in the credit card and personal banking loan portfolios. Our allowance for loan losses totaled $128.4 million, or 1.37% of total outstanding loans at the end of the second quarter.”
Total assets at June 30, 2006 were $14.3 billion, total loans were $9.4 billion, and total deposits were $11.0 billion. At June 30, 2006, total non-performing loans totaled $14.2 million or ..15% of total loans. During the quarter, the Company announced the signing of a definitive agreement to acquire West Pointe Bancorp. Inc., Belleville, Illinois, a one bank holding company with assets of $477 million, loans of $256 million and deposits of $402 million. Also the Company announced plans to purchase the banking business of Boone National Savings and Loan Association, Columbia, Missouri which has total loans and deposits of $132 million and $108 million, respectively. It is expected the Boone transaction will be completed by the end of July while the West Pointe transaction will be completed prior to the end of the third quarter.
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COMMERCE BANCSHARES, INC.
Management Discussion of Second Quarter Results
June 30, 2006
For the quarter ended June 30, 2006, net income amounted to $55.3 million, an increase of 1.8% over the same quarter last year. For the current quarter, return on assets was 1.6%, the return on average equity was 16.6%, and the efficiency ratio was 60.4%. Compared to the 2nd quarter of last year, net interest income decreased .7% while non-interest income grew by 7.6%. Additionally, the provision for loan losses amounted to $5.7 million for the quarter, while non-interest expense grew by 5.3%.
Balance Sheet Review
During the 2nd quarter of 2006, average loans increased $227.6 million, or 2.5%, compared to the previous quarter, which represented annualized growth of 10.0%. Average loans also increased $752.8 million, or 8.9%, compared to the same period last year. Compared to the 1st quarter of 2006, average business, construction and business real estate loans grew $151.8 million, $66.6 million and $26.3 million, respectively, as a result of new business, especially in regional markets, and increased borrowings by existing customers. Average student loans decreased $74.4 million, or 20.7%, due mainly to planned sales of student loans in the 2nd quarter. Average consumer loans increased $44.7 million during the quarter reflecting seasonal demand for marine, recreational vehicle and fixed rate home equity loans.
Available for sale investment securities, excluding fair value adjustments, decreased on average by $126.1 million, or 3.6%, this quarter compared with the previous quarter as the Company continued to reduce its investment securities portfolio, mainly through normal maturities. Average available for sale investment securities also declined by $939.8 million, or 21.6%, from the same quarter last year. During the 2nd quarter of 2006, sales, maturities and principal pay-downs of securities totaled $264.8 million while the Company purchased approximately $188.2 million of securities, mainly tax-free municipals.
Total average deposits increased by $148.6 million or 1.4% during the 2nd quarter compared to the previous quarter. This growth was due mainly to increases in personal and business demand accounts ($50.3 million) and retail certificates of deposit with balances under $100,000 ($92.4 million). Average interest checking accounts increased $28.0 million, while money market accounts declined by $22.3 million. Jumbo certificates of deposit declined $29.0 million. The average loans to deposits ratio for the quarter amounted to 84.3%.
Average borrowings declined $68.0 million in the current quarter compared to the prior quarter due to decreases in federal funds purchased and Federal Home Loan Bank advances outstanding. The growth in deposit balances, coupled with the decline in investment securities, provided the liquidity to reduce this debt.
Net Interest Income
Net interest income in the 2nd quarter of 2006 amounted to $126.5 million, an increase of $2.7 million, or 2.2%, compared with the previous quarter and a decrease of $908 thousand, or .7%, compared to the 2nd quarter of last year. During the 2nd quarter of 2006, the net yield on earning assets (tax-equivalent) was 3.98%, compared with 3.97% in the previous quarter and 3.93% in the same period last year.
The increase of $2.7 million in net interest income in the 2nd quarter of 2006 over the previous quarter was the result of more days in the current quarter and an increase in loan interest income of approximately $11.3 million. The growth in loan interest income was reflective of higher rates and balances on almost all loan categories. Offsetting this increase in net interest income were lower interest income on investment securities of $869 thousand due to lower average balances and higher interest expense on interest bearing deposits of $6.8 million due to higher rates and balances. Also, while interest expense on other borrowings increased $1.0 million due mainly to higher rates, lower average balances helped to temper this overall increase.
During the current quarter, the overall yield on interest earning assets increased 22 basis points to 6.25%, while the overall cost of interest bearing liabilities increased 24 basis points to 2.49%.
Non-Interest Income
For the 2nd quarter of 2006, total non-interest income amounted to $91.5 million, an increase of 7.6% compared to $85.0 million in the same period last year, and $89.4 million in the previous quarter. Compared with the same period last year, this growth was mainly the result of higher bank card, deposit account and trust fee income, which was partly offset by lower gains on sales of student loans. Deposit account fees increased $1.4 million, or 5.2%, compared with the 2nd quarter of 2005, mainly due to growth in deposit account overdraft fees, which increased $2.2 million (11.5%) over the same period last year. This growth over last year continued to be the result of higher transaction volumes coupled with pricing changes initiated in the 3rd quarter of 2005. Offsetting this growth was an 8.1% decline in corporate cash management fees, which continue to be affected by the higher interest rate environment. Bank card fees for the quarter increased 10.6% over the same period last year, mainly due to higher fees earned on debit, and corporate card transactions, which grew by 16.1% and 19.0%, respectively. Trust fees for the quarter increased 5.6% over the same quarter last year mainly as a result of higher fees on personal trust accounts.
During the current quarter, gains on sales of student loans totaled $1.8 million, compared with $3.6 million in the same period last year and $2.7 million in the
COMMERCE BANCSHARES, INC.
Management Discussion of Second Quarter Results
June 30, 2006
previous quarter. Other non-interest income increased $2.0 million over the same period last year as a result of increased income on leasing activities, higher sweep fee and check sales income, and net gains on several real estate transactions. The ratio of non-interest income to total revenue, excluding net securities gains, was 41.1% in the 2nd quarter of 2006 compared to 39.6% in the same period last year.
Net securities gains amounted to $3.3 million for the 2nd quarter of 2006, compared to $2.4 million in the previous quarter and $1.4 million in the 2nd quarter of 2005. These gains mostly pertained to realized gains and fair value adjustments on certain private equity investments held by the Company’s venture capital subsidiary. Minority interests related to this income totaled $748 thousand and were reported in other expense. There were no other realized gains or losses on the Company’s investment securities portfolio.
Non-Interest Expense
Non-interest expense for the current quarter amounted to $130.0 million, an increase of $6.5 million, or 5.3%, compared with amounts recorded in the same period last year and was slightly less than amounts recorded in the prior quarter. Compared with the 2nd quarter of last year, salaries and benefits expense increased $3.7 million, or 5.4%, mainly as a result of normal merit increases, higher incentives, payroll taxes and medical insurance costs. Full-time equivalent employees totaled 4,868 and 4,826 at June 30, 2006 and 2005, respectively.
Occupancy costs grew 7.4% over the same quarter last year, mainly a result of higher depreciation expense offset by increased tenant rent received. Equipment and data processing expenses increased 6.5% and 4.7%, respectively, due to higher depreciation and amortization charges, while lower telephone and network costs resulted in a reduction in overall supplies and communication costs of 4.7%. The increase in other expense over the same quarter last year resulted from higher costs for minority interests, operating lease depreciation and foreclosed property costs.
Income Taxes
During the 2nd quarter of 2006, income tax expense amounted to $27.4 million, an increase of $1.5 million over the previous quarter and $2.1 million less than the same quarter last year. The effective tax rate for the Company was 33.1% for the current quarter, compared with a rate of 32.8% in the previous quarter and 35.2% in the 2nd quarter of 2005. The decrease in the effective tax rate in the current quarter compared to the 2nd quarter of 2005 was mainly due to lower state income taxes.
Credit Quality
Net loan charge-offs for the 2nd quarter of 2006 amounted to $5.7 million, compared with $4.4 million in the prior quarter and $7.0 million in the 2nd quarter of last year. The increase in net charge-offs in the 2nd quarter of 2006 compared to the previous quarter was the result of slightly higher credit card charge-offs and a large lease loan recovery in the first quarter of 2006 that did not re-occur. Personal banking loan net charge-offs remained at low levels during the 2nd quarter. Year-to-date, the ratio of net loan charge-offs to total average loans was .22% compared to .26% last year.
For the 2nd quarter of 2006, annualized net charge-offs on average credit card loans were 3.01%, compared with 3.93% in the same quarter last year and 2.63% in the 1st quarter of 2006. Additionally, personal banking loan net charge-offs for the quarter amounted to .09% of average personal loans compared to .29% in the same period last year. The provision for loan losses for the quarter totaled $5.7 million, and was $1.2 million higher than the 1st quarter 2006 provision and slightly higher than the 2nd quarter 2005 provision. The allowance for loan losses at June 30, 2006 amounted to $128.4 million, or 1.37% of total loans.
Total non-performing assets amounted to $15.9 million, an increase of $5.3 million over the previous quarter and .17% of loans outstanding. Non-performing assets are comprised of non-accrual loans ($14.2 million) and foreclosed real estate ($1.8 million). Loans past due more than 90 days and still accruing interest totaled $15.2 million at June 30, 2006.
Other
The Company maintains a treasury stock buyback program and effective October 2005, was authorized by the Board of Directors to repurchase up to 5 million shares of its common stock. During the quarter ended June 30, 2006, the Company purchased 486 thousand shares of treasury stock at an average cost of $50.70 per share. During the current quarter the Company announced plans to purchase the banking businesses of Boone National Savings and Loan Association, Columbia, Missouri. Through this transaction, the Company will acquire four branch locations in the Columbia market with total loans and deposits of approximately $132 million and $108 million, respectively. The Company also announced plans to acquire West Pointe Bancorp. Inc., Belleville, Illinois, a one-bank holding company with five branch locations with loans of $256 million and deposits of $402 million. It is expected that both transactions will be completed in the 3rd quarter of 2006.
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.
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
FINANCIAL HIGHLIGHTS
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| | | For the Three Months Ended | | | | For the Six Months Ended | |
| | | March 31 | | | June 30 | | | June 30 | | | | June 30 | | | June 30 | |
| (Unaudited) | | 2006 | | | 2006 | | | 2005 | | | | 2006 | | | 2005 | |
FINANCIAL SUMMARY(In thousands, except per share data) | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 123,735 | | | $ | 126,479 | | | $ | 127,387 | | | | $ | 250,214 | | | $ | 248,864 | |
| Taxable equivalent net interest income | | | 125,088 | | | | 128,009 | | | | 128,044 | | | | | 253,097 | | | | 250,038 | |
| Non-interest income | | | 89,448 | | | | 91,463 | | | | 84,980 | | | | | 180,911 | | | | 165,671 | |
| Provision for loan losses | | | 4,432 | | | | 5,672 | | | | 5,503 | | | | | 10,104 | | | | 7,871 | |
| Non-interest expense | | | 129,961 | | | | 129,550 | | | | 123,012 | | | | | 259,511 | | | | 246,934 | |
| Net income | | | 52,944 | | | | 55,333 | | | | 54,368 | | | | | 108,277 | | | | 104,214 | |
| Cash dividends | | | 16,379 | | | | 16,311 | | | | 15,970 | | | | | 32,690 | | | | 32,103 | |
| Net total loan charge-offs | | | 4,411 | | | | 5,694 | | | | 7,035 | | | | | 10,105 | | | | 10,837 | |
| Net business charge-offs (recov) | | | (1,081 | ) | | | 259 | | | | (48 | ) | | | | (822 | ) | | | (2,669 | ) |
| Net credit card charge-offs | | | 3,748 | | | | 4,387 | | | | 5,430 | | | | | 8,135 | | | | 10,027 | |
| Net personal banking charge-offs* | | | 1,649 | | | | 446 | | | | 1,474 | | | | | 2,095 | | | | 3,422 | |
| Net real estate charge-offs (recov) | | | (255 | ) | | | 80 | | | | (19 | ) | | | | (175 | ) | | | (225 | ) |
| Net overdraft charge-offs | | | 350 | | | | 522 | | | | 198 | | | | | 872 | | | | 282 | |
| Per share : | | | | | | | | | | | | | | | | | | | | | |
| Net income — basic | | $ | 0.79 | | | $ | 0.83 | | | $ | 0.78 | | | | $ | 1.62 | | | $ | 1.48 | |
| Net income — diluted | | $ | 0.78 | | | $ | 0.82 | | | $ | 0.77 | | | | $ | 1.60 | | | $ | 1.46 | |
| Cash dividends | | $ | 0.245 | | | $ | 0.245 | | | $ | 0.229 | | | | $ | 0.490 | | | $ | 0.457 | |
| Diluted wtd. average shares o/s | | | 67,927 | | | | 67,460 | | | | 71,036 | | | | | 67,692 | | | | 71,521 | |
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RATIOS | | | | | | | | | | | | | | | | | | | | | |
| Average loans to deposits | | | 83.32 | % | | | 84.27 | % | | | 79.35 | % | | | | 83.80 | % | | | 79.40 | % |
| Return on total average assets | | | 1.57 | % | | | 1.61 | % | | | 1.55 | % | | | | 1.59 | % | | | 1.50 | % |
| Return on total average stockholders’ equity | | | 16.14 | % | | | 16.59 | % | | | 15.78 | % | | | | 16.37 | % | | | 15.07 | % |
| Non-interest income to revenue** | | | 41.30 | % | | | 41.08 | % | | | 39.63 | % | | | | 41.19 | % | | | 39.23 | % |
| Efficiency ratio*** | | | 61.66 | % | | | 60.35 | % | | | 58.27 | % | | | | 61.00 | % | | | 60.18 | % |
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AT PERIOD END | | | | | | | | | | | | | | | | | | | | | |
| Book value per share based on total stockholders’ equity | | $ | 19.74 | | | $ | 20.08 | | | $ | 19.83 | | | | | | | | | | |
| Market value per share | | $ | 51.67 | | | $ | 50.05 | | | $ | 48.01 | | | | | | | | | | |
| Allowance for loan losses as a percentage of loans | | | 1.41 | % | | | 1.37 | % | | | 1.52 | % | | | | | | | | | |
| Tier I leverage ratio | | | 9.43 | % | | | 9.47 | % | | | 9.37 | % | | | | | | | | | |
| Common shares outstanding | | | 66,776,170 | | | | 66,314,415 | | | | 69,410,080 | | | | | | | | | | |
| Shareholders of record | | | 4,505 | | | | 4,430 | | | | 4,584 | | | | | | | | | | |
| Number of bank/ATM locations | | | 344 | | | | 347 | | | | 337 | | | | | | | | | | |
| Number of bank charters | | | 3 | | | | 3 | | | | 3 | | | | | | | | | | |
| Full-time equivalent employees | | | 4,863 | | | | 4,868 | | | | 4,826 | | | | | | | | | | |
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| | | | | | | June 30
| | June 30
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OTHER YTD INFORMATION | | | | | | | 2006 | | | | 2005 | | | | | | | | | | |
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| High market value per share | | | | | | $ | 53.20 | | | $ | 48.50 | | | | | | | | | | |
| Low market value per share | | | | | | $ | 49.14 | | | $ | 43.94 | | | | | | | | | | |
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| * | | Includes consumer, student and home equity loans |
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| ** | | Revenue includes net interest income and non-interest income, excluding net securities gains/losses. |
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| *** | | The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of net interest income and non-interest income (excluding net securities gains/losses). |
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
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| | | For the Three Months Ended | | | | For the Six Months Ended | |
| (Unaudited) | | March 31 | | | June 30 | | | June 30 | | | | June 30 | | | June 30 | |
| (In thousands, except per share data) | | 2006 | | | 2006 | | | 2005 | | | | 2006 | | | 2005 | |
INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 149,874 | | | $ | 161,188 | | | $ | 125,242 | | | | $ | 311,062 | | | $ | 243,765 | |
| Interest on investment securities | | | 37,130 | | | | 36,261 | | | | 46,394 | | | | | 73,391 | | | | 88,140 | |
| Interest on federal funds sold and securities purchased under agreements to resell | | | 1,623 | | | | 1,801 | | | | 1,164 | | | | | 3,424 | | | | 1,748 | |
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| Total interest income | | | 188,627 | | | | 199,250 | | | | 172,800 | | | | | 387,877 | | | | 333,653 | |
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INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits: | | | | | | | | | | | | | | | | | | | | | |
| Savings, interest checking and money market | | | 19,607 | | | | 23,002 | | | | 12,192 | | | | | 42,609 | | | | 22,649 | |
| Time open and C.D.’s of less than $100,000 | | | 16,731 | | | | 19,448 | | | | 12,051 | | | | | 36,179 | | | | 22,443 | |
| Time open and C.D.’s of $100,000 and over | | | 13,187 | | | | 13,906 | | | | 7,973 | | | | | 27,093 | | | | 14,325 | |
| Interest on other borrowings | | | 15,367 | | | | 16,415 | | | | 13,197 | | | | | 31,782 | | | | 25,372 | |
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| Total interest expense | | | 64,892 | | | | 72,771 | | | | 45,413 | | | | | 137,663 | | | | 84,789 | |
| | | | | | | | | | | | | | | | | |
| Net interest income | | | 123,735 | | | | 126,479 | | | | 127,387 | | | | | 250,214 | | | | 248,864 | |
| Provision for loan losses | | | 4,432 | | | | 5,672 | | | | 5,503 | | | | | 10,104 | | | | 7,871 | |
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| Net interest income after provision for loan losses | | | 119,303 | | | | 120,807 | | | | 121,884 | | | | | 240,110 | | | | 240,993 | |
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NON-INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | |
| Deposit account charges and other fees | | | 27,497 | | | | 28,910 | | | | 27,476 | | | | | 56,407 | | | | 51,777 | |
| Bank card transaction fees | | | 21,708 | | | | 23,558 | | | | 21,295 | | | | | 45,266 | | | | 40,802 | |
| Trust fees | | | 17,819 | | | | 17,992 | | | | 17,040 | | | | | 35,811 | | | | 33,434 | |
| Trading account profits and commissions | | | 2,565 | | | | 2,010 | | | | 2,450 | | | | | 4,575 | | | | 5,064 | |
| Consumer brokerage services | | | 2,389 | | | | 2,771 | | | | 2,338 | | | | | 5,160 | | | | 5,163 | |
| Loan fees and sales | | | 3,743 | | | | 2,745 | | | | 4,805 | | | | | 6,488 | | | | 8,245 | |
| Investment securities gains, net | | | 2,403 | | | | 3,284 | | | | 1,372 | | | | | 5,687 | | | | 4,984 | |
| Other | | | 11,324 | | | | 10,193 | | | | 8,204 | | | | | 21,517 | | | | 16,202 | |
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| Total non-interest income | | | 89,448 | | | | 91,463 | | | | 84,980 | | | | | 180,911 | | | | 165,671 | |
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NON-INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 71,725 | | | | 71,239 | | | | 67,585 | | | | | 142,964 | | | | 137,765 | |
| Net occupancy | | | 10,977 | | | | 10,230 | | | | 9,527 | | | | | 21,207 | | | | 19,305 | |
| Equipment | | | 5,949 | | | | 6,071 | | | | 5,701 | | | | | 12,020 | | | | 11,392 | |
| Supplies and communication | | | 8,393 | | | | 7,872 | | | | 8,257 | | | | | 16,265 | | | | 16,470 | |
| Data processing and software | | | 12,393 | | | | 12,631 | | | | 12,069 | | | | | 25,024 | | | | 23,524 | |
| Marketing | | | 4,318 | | | | 4,657 | | | | 4,687 | | | | | 8,975 | | | | 8,549 | |
| Other | | | 16,206 | | | | 16,850 | | | | 15,186 | | | | | 33,056 | | | | 29,929 | |
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| Total non-interest expense | | | 129,961 | | | | 129,550 | | | | 123,012 | | | | | 259,511 | | | | 246,934 | |
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| Income before income taxes | | | 78,790 | | | | 82,720 | | | | 83,852 | | | | | 161,510 | | | | 159,730 | |
| Less income taxes | | | 25,846 | | | | 27,387 | | | | 29,484 | | | | | 53,233 | | | | 55,516 | |
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NET INCOME | | $ | 52,944 | | | $ | 55,333 | | | $ | 54,368 | | | | $ | 108,277 | | | $ | 104,214 | |
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| Net income per share �� basic | | $ | 0.79 | | | $ | 0.83 | | | $ | 0.78 | | | | $ | 1.62 | | | $ | 1.48 | |
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| Net income per share — diluted | | $ | 0.78 | | | $ | 0.82 | | | $ | 0.77 | | | | $ | 1.60 | | | $ | 1.46 | |
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| Cash dividends per common share | | $ | 0.245 | | | $ | 0.245 | | | $ | 0.229 | | | | $ | 0.490 | | | $ | 0.457 | |
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COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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| (Unaudited) | | March 31 | | | June 30 | | | June 30 | |
| (In thousands) | | 2006 | | | 2006 | | | 2005 | |
ASSETS | | | | | | | | | | | | |
| Loans, net of unearned income | | $ | 9,138,239 | | | $ | 9,379,893 | | | $ | 8,499,301 | |
| Allowance for loan losses | | | (128,468 | ) | | | (128,446 | ) | | | (129,428 | ) |
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Net loans | | | 9,009,771 | | | | 9,251,447 | | | | 8,369,873 | |
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| Investment securities: | | | | | | | | | | | | |
| Available for sale | | | 3,401,823 | | | | 3,337,477 | | | | 4,358,178 | |
| Trading | | | 25,559 | | | | 17,001 | | | | 12,359 | |
| Non-marketable | | | 84,353 | | | | 81,401 | | | | 73,674 | |
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Total investment securities | | | 3,511,735 | | | | 3,435,879 | | | | 4,444,211 | |
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| Federal funds sold and securities purchased under agreements to resell | | | 89,385 | | | | 237,072 | | | | 128,204 | |
| Cash and due from banks | | | 484,456 | | | | 662,790 | | | | 544,922 | |
| Land, buildings and equipment — net | | | 368,209 | | | | 367,954 | | | | 372,291 | |
| Goodwill | | | 48,522 | | | | 48,522 | | | | 48,522 | |
| Other assets | | | 219,044 | | | | 269,733 | | | | 210,170 | |
| | | | | | | | | | |
Total assets | | $ | 13,731,122 | | | $ | 14,273,397 | | | $ | 14,118,193 | |
| | | | | | | | | | |
| | | | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | |
| Non-interest bearing demand | | $ | 1,418,387 | | | $ | 1,326,787 | | | $ | 1,351,186 | |
| Savings, interest checking and money market | | | 6,449,831 | | | | 6,439,068 | | | | 6,547,940 | |
| Time open and C.D.’s of less than $100,000 | | | 1,925,755 | | | | 2,028,700 | | | | 1,744,629 | |
| Time open and C.D.’s of $100,000 and over | | | 1,360,383 | | | | 1,247,790 | | | | 1,022,361 | |
| | | | | | | | | | |
Total deposits | | | 11,154,356 | | | | 11,042,345 | | | | 10,666,116 | |
| Federal funds purchased and securities sold under agreements to repurchase | | | 901,923 | | | | 1,586,511 | | | | 1,594,735 | |
| Other borrowings | | | 258,616 | | | | 144,919 | | | | 371,781 | |
| Other liabilities | | | 97,982 | | | | 168,227 | | | | 109,392 | |
| | | | | | | | | | |
Total liabilities | | | 12,412,877 | | | | 12,942,002 | | | | 12,742,024 | |
| | | | | | | | | | |
| Stockholders’ equity: | | | | | | | | | | | | |
| Preferred stock | | | — | | | | — | | | | — | |
| Common stock | | | 347,049 | | | | 347,049 | | | | 347,049 | |
| Capital surplus | | | 384,535 | | | | 385,358 | | | | 384,166 | |
| Retained earnings | | | 729,586 | | | | 768,608 | | | | 775,404 | |
| Treasury stock | | | (128,662 | ) | | | (152,189 | ) | | | (155,749 | ) |
| Accumulated other comprehensive income (loss) | | | (14,263 | ) | | | (17,431 | ) | | | 25,299 | |
| | | | | | | | | | |
Total stockholders’ equity | | | 1,318,245 | | | | 1,331,395 | | | | 1,376,169 | |
| | | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 13,731,122 | | | $ | 14,273,397 | | | $ | 14,118,193 | |
| | | | | | | | | | |
COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE BALANCES
| | | | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | | For the Six Months Ended | |
| (Unaudited) | | March 31 | | | June 30 | | | June 30 | | | | June 30 | | | June 30 | |
| (Dollars in thousands) | | 2006 | | | 2006 | | | 2005 | | | | 2006 | | | 2005 | |
Loans: | | | | | | | | | | | | | | | | | | | | | |
| Business | | $ | 2,542,482 | | | $ | 2,694,246 | | | $ | 2,305,000 | | | | $ | 2,618,783 | | | $ | 2,275,806 | |
| Real estate — construction | | | 441,489 | | | | 508,127 | | | | 478,675 | | | | | 474,992 | | | | 460,673 | |
| Real estate — business | | | 1,971,197 | | | | 1,997,502 | | | | 1,765,896 | | | | | 1,984,422 | | | | 1,762,040 | |
| Real estate — personal | | | 1,358,445 | | | | 1,373,444 | | | | 1,344,203 | | | | | 1,365,986 | | | | 1,339,639 | |
| Consumer | | | 1,288,378 | | | | 1,333,105 | | | | 1,225,386 | | | | | 1,310,865 | | | | 1,209,314 | |
| Home equity | | | 447,188 | | | | 446,094 | | | | 422,637 | | | | | 446,638 | | | | 417,525 | |
| Student | | | 359,961 | | | | 285,540 | | | | 374,176 | | | | | 322,545 | | | | 391,999 | |
| Credit card | | | 577,537 | | | | 584,508 | | | | 553,965 | | | | | 581,042 | | | | 550,475 | |
| Overdrafts | | | 20,114 | | | | 11,836 | | | | 11,651 | | | | | 15,952 | | | | 13,961 | |
| | | | | | | | | | | | | | | | | |
Total loans | | | 9,006,791 | | | | 9,234,402 | | | | 8,481,589 | | | | | 9,121,225 | | | | 8,421,432 | |
| | | | | | | | | | | | | | | | | |
Investment securities (excluding unrealized gains and losses): | | | | | | | | | | | | | | | | | | | | | |
| Available for sale | | | 3,531,600 | | | | 3,405,527 | | | | 4,345,329 | | | | | 3,468,215 | | | | 4,424,384 | |
| Trading | | | 19,012 | | | | 21,144 | | | | 7,864 | | | | | 20,084 | | | | 9,607 | |
| Non-marketable | | | 84,007 | | | | 86,658 | | | | 75,968 | | | | | 85,340 | | | | 76,408 | |
| | | | | | | | | | | | | | | | | |
Total investment securities | | | 3,634,619 | | | | 3,513,329 | | | | 4,429,161 | | | | | 3,573,639 | | | | 4,510,399 | |
| | | | | | | | | | | | | | | | | |
| Federal funds sold and securities purchased under agreements to resell | | | 141,750 | | | | 142,651 | | | | 145,135 | | | | | 142,203 | | | | 115,227 | |
| | | | | | | | | | | | | | | | | |
Total interest earning assets | | | 12,783,160 | | | | 12,890,382 | | | | 13,055,885 | | | | | 12,837,067 | | | | 13,047,058 | |
| | | | | | | | | | | | | | | | | |
Total assets | | | 13,706,253 | | | | 13,800,313 | | | | 14,024,246 | | | | | 13,753,543 | | | | 14,047,188 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | | |
| Non-interest bearing deposits | | | 597,492 | | | | 663,820 | | | | 633,473 | | | | | 630,839 | | | | 702,786 | |
| Interest bearing deposits: | | | | | | | | | | | | | | | | | | | | | |
| Savings | | | 383,869 | | | | 396,959 | | | | 417,059 | | | | | 390,450 | | | | 410,488 | |
| Interest checking | | | 165,531 | | | | 193,506 | | | | 175,820 | | | | | 179,596 | | | | 218,900 | |
| Money market | | | 6,494,964 | | | | 6,472,684 | | | | 6,644,696 | | | | | 6,483,762 | | | | 6,542,796 | |
| Time open & C.D.’s of less than $100,000 | | | 1,881,277 | | | | 1,973,722 | | | | 1,732,288 | | | | | 1,927,755 | | | | 1,698,742 | |
| Time open & C.D.’s of $100,000 and over | | | 1,286,151 | | | | 1,257,161 | | | | 1,085,769 | | | | | 1,271,576 | | | | 1,032,685 | |
| | | | | | | | | | | | | | | | | |
| Total interest bearing deposits | | | 10,211,792 | | | | 10,294,032 | | | | 10,055,632 | | | | | 10,253,139 | | | | 9,903,611 | |
| | | | | | | | | | | | | | | | | |
Total deposits | | | 10,809,284 | | | | 10,957,852 | | | | 10,689,105 | | | | | 10,883,978 | | | | 10,606,397 | |
| | | | | | | | | | | | | | | | | |
Borrowings: | | | | | | | | | | | | | | | | | | | | | |
| Federal funds purchased and securities sold under agreements to repurchase | | | 1,226,822 | | | | 1,213,925 | | | | 1,481,135 | | | | | 1,220,338 | | | | 1,567,611 | |
| Oher borrowings | | | 260,580 | | | | 205,472 | | | | 380,043 | | | | | 232,874 | | | | 384,383 | |
| | | | | | | | | | | | | | | | | |
Total borrowings | | | 1,487,402 | | | | 1,419,397 | | | | 1,861,178 | | | | | 1,453,212 | | | | 1,951,994 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total interest bearing liabilities | | | 11,699,194 | | | | 11,713,429 | | | | 11,916,810 | | | | | 11,706,351 | | | | 11,855,605 | |
| Total stockholders’ equity | | | 1,330,334 | | | | 1,337,423 | | | | 1,381,560 | | | | | 1,333,898 | | | | 1,394,913 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net yield on interest earning assets (tax-equivalent basis) | | | 3.97 | % | | | 3.98 | % | | | 3.93 | % | | | | 3.98 | % | | | 3.86 | % |
