Commerce Bancshares, Inc. Reports First Quarter Earnings Per Share Growth

Business Wire, April 13, 2005

KANSAS CITY, Mo. -- Commerce Bancshares, Inc. (Nasdaq:CBSH) announced earnings of $.73 per share for the three months ended March 31, 2005, an increase of 3% compared to $.71 per share in the first quarter of 2004. Net income for the first quarter amounted to $49.8 million compared with $51.3 million in the same period last year, or a decrease of 3%. The annualized return on average assets for the three months ended March 31, 2005, was 1.44%, the annualized return on average equity was 14.4%, and the efficiency ratio was 62.2%.

In making this announcement, David W. Kemper, Chairman & CEO, said: "Earnings per share grew 3% in the first quarter of 2005 compared to the same period last year. Favorable credit experience reduced our provision for loan losses while investment securities gains were significantly lower than last year. Although average loans have grown at an annualized rate of 7% over the last two quarters, a planned reduction in our securities portfolio led to slightly lower net interest income. Recurring fee income was flat for the quarter compared to a year ago while non-interest expenses increased 4.2%."

Mr. Kemper added: "Asset quality was strong in the first quarter with net loan charge-offs totaling .18% compared with .61% last year. Our allowance for loan losses totaled $131.0 million, or 1.56% of total outstanding loans and 756% of non-performing loans."

Total assets at March 31, 2005, were $14.1 billion, total loans were $8.4 billion, and total deposits were $10.7 billion. At March 31, 2005, total non-performing assets were $18.6 million or .22% of total loans. During the quarter, the Company increased its cash dividend to shareholders by 10%, making this the 37th consecutive year of per share dividend increases. Also during the quarter, the Company bought back 1.3 million shares of its common stock through its treasury stock buyback plan.

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 locations in Missouri, Illinois, and Kansas. The Company also has operating subsidiaries involved in mortgage banking, credit related insurance, venture capital, and real estate activities.

Posted to the Company's web site is management's discussion of first quarter results. To see this information, please visit our web site at www.commercebank.com. The Company's Annual Shareholders' meeting is scheduled for Wednesday, April 20, 2005, at 9:30 a.m. CDT. The meeting will be held in the Auditorium on the 15th floor of the Commerce Trust Building at 922 Walnut Street, Kansas City, Missouri. The meeting will be web-cast and presentation materials will be available on our web site the day of the meeting.

(Amounts in thousands)        12/31/04    3/31/05    3/31/04
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Non-Accrual Loans                      $17,618    $17,333    $33,292
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Foreclosed Real Estate                  $1,157     $1,262     $2,593
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Total Non-Performing Assets            $18,775    $18,595    $35,885
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Non-Performing Assets to Loans             .23%       .22%       .44%
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Non-Performing Assets to Total
 Assets                                    .13%       .13%       .25%
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Loans 90 Days & Over Past Due -
 Still Accruing                        $13,067    $15,972    $14,772
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COMMERCE BANCSHARES, INC. and SUBSIDIARIES
                        FINANCIAL HIGHLIGHTS

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(Unaudited)                           For the Three Months Ended
                                    Dec. 31     March 31    March 31
                                      2004        2005        2004
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Financial Summary (In thousands,
 except per share data)

Net interest income                 $124,202    $121,477    $122,984
Taxable equivalent net
 interest income                     124,738     121,994     123,572
Non-interest income                   77,753      80,691      85,969
Provision for loan losses              7,215       2,368      10,250
Non-interest expense                 122,429     123,922     118,912
Net income                            52,660      49,846      51,324
Cash dividends                        15,076      16,133      15,501
Net total loan charge-offs             8,184       3,802      12,379
  Net business charge-offs
   (recoveries)                          128      (2,796)      5,502
  Net credit card charge-offs          4,983       4,622       4,934
  Net personal banking charge-
   offs(1)                             2,251       1,948       1,972
  Net real estate charge-offs
   (recoveries)                          453         (56)        102
  Net overdraft charge-offs
   (recoveries)                          369          84        (131)
Per share:
  Net income - basic                   $0.77       $0.74       $0.72
  Net income - diluted                 $0.75       $0.73       $0.71
  Cash dividends                      $0.219      $0.240      $0.219
Diluted wtd. average shares o/s       70,029      68,582      72,217
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RATIOS
Average loans to deposits              79.03%      79.45%      79.87%
Return on total average assets          1.48%       1.44%       1.45%
Return on total average
 stockholders' equity                  14.40%      14.35%      14.09%
Non-interest income to revenue(2)      38.50%      39.91%      41.14%
Efficiency ratio(3)                    60.26%      62.22%      59.24%
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AT PERIOD END
Book value per share based on
 total stockholders' equity           $20.90      $20.42      $20.99
Market value per share                $50.20      $48.20      $45.44
Allowance for loan losses
 as a percentage of loans               1.59%       1.56%       1.63%
Tier I leverage ratio                   9.60%       9.46%       9.53%
Common shares outstanding         68,257,531  67,176,629  70,682,907
Shareholders of record                 4,776       4,735       4,906
Number of bank/ATM locations             330         331         327
Number of bank charters                    3           3           4
Full-time equivalent employees         4,821       4,836       4,847
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OTHER YTD INFORMATION                           March 31    March 31
                                                  2005        2004
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High market value per share                       $50.00      $47.62
Low market value per share                        $46.32      $42.62
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(1) Includes consumer, student and home equity loans.

(2) Revenue includes net interest income and non-interest income.

(3) 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).