# EDGAR Filing Document

**Accession Number:** 0000022356
**File Stem:** 0000022356-25-000047
**Filing Date:** 2025-8
**Character Count:** 360786
**Document Hash:** cff75d1160e531ce5f7d44c6d0864a35
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000022356-25-000047.hdr.sgml**: 20250806

**ACCESSION NUMBER**: 0000022356-25-000047

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 114

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250806

**DATE AS OF CHANGE**: 20250806

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** COMMERCE BANCSHARES INC /MO/
- **CENTRAL INDEX KEY:** 0000022356
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 430889454
- **STATE OF INCORPORATION:** MO
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36502
- **FILM NUMBER:** 251189213

**BUSINESS ADDRESS:**
- **STREET 1:** 1000 WALNUT
- **CITY:** KANSAS CITY
- **STATE:** MO
- **ZIP:** 64106
- **BUSINESS PHONE:** 8162342000

**MAIL ADDRESS:**
- **STREET 1:** P O BOX 419248
- **CITY:** KANSAS CITY
- **STATE:** MO
- **ZIP:** 64141-6248

?xml version='1.0' encoding='ASCII'? cbsh-20250630

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

**FORM 10-Q** 

---

| | |
|:---|:---|
| **(Mark One)** | |
| ☑ | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE** |
| | **SECURITIES EXCHANGE ACT OF 1934** |

---

________________________________________________________

For the quarterly period ended June 30, 2025

OR

---

| | |
|:---|:---|
| ☐ | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE** |
| | **SECURITIES EXCHANGE ACT OF 1934** |

---

____________________________________________________________

For the transition period from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to

&nbsp;&nbsp;&nbsp;&nbsp;

Commission File No. 001-36502

---

| | |
|:---|:---|
| | **COMMERCE BANCSHARES, INC.** |
| (Exact name of registrant as specified in its charter) | (Exact name of registrant as specified in its charter) |

---

---

| | | |
|:---|:---|:---|
| **<u>Missouri</u>** | **<u>Missouri</u>** | **<u>43-0889454</u>** |
| (State of Incorporation) | (State of Incorporation) | (IRS Employer Identification No.) |
| **1000 Walnut** | **1000 Walnut** | |
| **<u>Kansas City,</u>** | **<u>MO</u>** | **<u>64106</u>** |
| (Address of principal executive offices) | (Address of principal executive offices) | (Zip Code) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**<u>(816) 234-2000</u>**

(Registrant's telephone number, including area code)

---

| | | |
|:---|:---|:---|
| **<u>Securities registered pursuant to Section 12(b) of the Act:</u>** | **<u>Securities registered pursuant to Section 12(b) of the Act:</u>** | **<u>Securities registered pursuant to Section 12(b) of the Act:</u>** |
| **Title of class** | **Trading symbol(s)** | **Name of exchange on which registered** |
| $5 Par Value Common Stock | CBSH | NASDAQ Global Select Market |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes 🗹&nbsp;&nbsp;&nbsp;&nbsp; No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes 🗹&nbsp;&nbsp;&nbsp;&nbsp; No □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer 🗹 Accelerated filer □ Non-accelerated filer □ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐&nbsp;&nbsp;&nbsp;&nbsp; No ☑

As of August 4, 2025, the registrant had outstanding 133,438,915 shares of its $5 par value common stock, registrant's only class of common stock.

------

&nbsp;&nbsp;&nbsp;&nbsp;**Commerce Bancshares, Inc. and Subsidiaries**

&nbsp;&nbsp;&nbsp;&nbsp;**Form 10-Q**

---

| | | | |
|:---|:---|:---|:---|
| | | | **Page** |
| **INDEX** | | | |
| **<u>[Part I](#idbbbc9a0cff3457baaa407fc432395e8_10)</u>** | **<u>[Financial Information](#idbbbc9a0cff3457baaa407fc432395e8_10)</u>** | **<u>[Financial Information](#idbbbc9a0cff3457baaa407fc432395e8_10)</u>** | |
|  | <u>[Item 1.](#idbbbc9a0cff3457baaa407fc432395e8_13)</u> | <u>[Financial Statements](#idbbbc9a0cff3457baaa407fc432395e8_13)</u> |  |
|  |  | <u>[Consolidated Balance Sheets as of](#idbbbc9a0cff3457baaa407fc432395e8_16)June 30, 2025[(unaudited) and](#idbbbc9a0cff3457baaa407fc432395e8_16)December 31, 2024</u> | <u>[3](#idbbbc9a0cff3457baaa407fc432395e8_16)</u> |
|  |  | <u>[Consolidated Statements of Income](#idbbbc9a0cff3457baaa407fc432395e8_22)for the Three and Six Months Ended June 30, 2025[and](#idbbbc9a0cff3457baaa407fc432395e8_22)2024[(unaudited)](#idbbbc9a0cff3457baaa407fc432395e8_22)</u> | <u>[4](#idbbbc9a0cff3457baaa407fc432395e8_22)</u> |
|  |  | <u>[Consolidated Statements of Comprehensive Income](#idbbbc9a0cff3457baaa407fc432395e8_25)for the Three and Six Months Ended June 30, 2025[and](#idbbbc9a0cff3457baaa407fc432395e8_25)2024[(unaudited)](#idbbbc9a0cff3457baaa407fc432395e8_25)</u> | <u>[5](#idbbbc9a0cff3457baaa407fc432395e8_25)</u> |
|  |  | <u>[Consolidated Statements of Changes in Equity](#idbbbc9a0cff3457baaa407fc432395e8_28) for the Three and Six Months Ended June 30, 2025 [and](#idbbbc9a0cff3457baaa407fc432395e8_28)2024[(unaudited)](#idbbbc9a0cff3457baaa407fc432395e8_28)</u> | <u>[6](#idbbbc9a0cff3457baaa407fc432395e8_28)</u> |
|  |  | <u>[Consolidated Statements of Cash Flows for the](#idbbbc9a0cff3457baaa407fc432395e8_37)Six[Months Ended](#idbbbc9a0cff3457baaa407fc432395e8_37)June 30, 2025[and](#idbbbc9a0cff3457baaa407fc432395e8_37)2024[(unaudited)](#idbbbc9a0cff3457baaa407fc432395e8_37)</u> | <u>[8](#idbbbc9a0cff3457baaa407fc432395e8_37)</u> |
|  |  | <u>[Notes to Consolidated Financial Statements](#idbbbc9a0cff3457baaa407fc432395e8_40)</u> | <u>[9](#idbbbc9a0cff3457baaa407fc432395e8_40)</u> |
|  | <u>[Item 2.](#idbbbc9a0cff3457baaa407fc432395e8_127)</u> | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#idbbbc9a0cff3457baaa407fc432395e8_127)</u> | <u>[49](#idbbbc9a0cff3457baaa407fc432395e8_127)</u> |
|  | <u>[Item 3.](#idbbbc9a0cff3457baaa407fc432395e8_190)</u> | <u>[Quantitative and Qualitative Disclosures about Market Risk](#idbbbc9a0cff3457baaa407fc432395e8_190)</u> | <u>[75](#idbbbc9a0cff3457baaa407fc432395e8_190)</u> |
|  | <u>[Item 4.](#idbbbc9a0cff3457baaa407fc432395e8_196)</u> | <u>[Controls and Procedures](#idbbbc9a0cff3457baaa407fc432395e8_196)</u> | <u>[75](#idbbbc9a0cff3457baaa407fc432395e8_196)</u> |
| **<u>[Part II](#idbbbc9a0cff3457baaa407fc432395e8_199)</u>** | **<u>[Other Information](#idbbbc9a0cff3457baaa407fc432395e8_199)</u>** | **<u>[Other Information](#idbbbc9a0cff3457baaa407fc432395e8_199)</u>** |  |
|  | <u>[Item 1.](#idbbbc9a0cff3457baaa407fc432395e8_202)</u> | <u>[Legal Proceedings](#idbbbc9a0cff3457baaa407fc432395e8_202)</u> | <u>[76](#idbbbc9a0cff3457baaa407fc432395e8_202)</u> |
|  | <u>[Item 2.](#idbbbc9a0cff3457baaa407fc432395e8_205)</u> | <u>[Unregistered Sales of Equity Securities and Use of Proceeds](#idbbbc9a0cff3457baaa407fc432395e8_205)</u> | <u>[78](#idbbbc9a0cff3457baaa407fc432395e8_205)</u> |
|  | <u>[Item 5.](#idbbbc9a0cff3457baaa407fc432395e8_208)</u> | <u>[Other Information](#idbbbc9a0cff3457baaa407fc432395e8_205)</u> | <u>[78](#idbbbc9a0cff3457baaa407fc432395e8_205)</u> |
|  | <u>[Item 6.](#idbbbc9a0cff3457baaa407fc432395e8_211)</u> | <u>[Exhibits](#idbbbc9a0cff3457baaa407fc432395e8_211)</u> | <u>[78](#idbbbc9a0cff3457baaa407fc432395e8_211)</u> |
| <u>[Signatures](#idbbbc9a0cff3457baaa407fc432395e8_214)</u> |  |  | <u>[79](#idbbbc9a0cff3457baaa407fc432395e8_214)</u> |

---

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**PART I: FINANCIAL INFORMATION**

**<u>Item 1. FINANCIAL STATEMENTS</u>**

**Commerce Bancshares, Inc. and Subsidiaries**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **June 30,<br>2025** | December 31, 2024 |
|  | *(Unaudited)* |  |
|  | *(In thousands)* | *(In thousands)* |
| **ASSETS** |  |  |
| Loans | $**17665468** | $17220103 |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for credit losses on loans | **(165260)** | (162742) |
| **Net loans** | **17500208** | 17057361 |
| &nbsp;&nbsp;Loans held for sale (including $3,488,000 and $2,981,000 of residential mortgage loans carried at fair value at June 30, 2025 and December 31, 2024, respectively) | **3592** | 3242 |
| Investment securities: |  |  |
| &nbsp;&nbsp;Available for sale debt, at fair value (amortized cost of $9,680,135,000 and $10,127,426,000 at  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June 30, 2025 and December 31, 2024, respectively, and allowance for credit losses of $—  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;at both June 30, 2025 and December 31, 2024) | **8915779** | 9136853 |
| &nbsp;&nbsp;&nbsp;Trading debt | **46630** | 38034 |
| &nbsp;&nbsp;&nbsp;Equity | **54511** | 57442 |
| &nbsp;&nbsp;&nbsp;Other | **219906** | 230051 |
| **Total investment securities** | **9236826** | 9462380 |
| Federal funds sold | **—** | 3000 |
| Securities purchased under agreements to resell | **850000** | 625000 |
| Interest earning deposits with banks | **2624264** | 2624553 |
| Cash and due from banks | **522049** | 748357 |
| Premises and equipment – net | **477401** | 475275 |
| Goodwill | **146539** | 146539 |
| Other intangible assets – net | **13333** | 13632 |
| Other assets | **910035** | 837288 |
| **Total assets** | $**32284247** | $31996627 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Deposits: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-interest bearing | $**7393559** | $8150669 |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings, interest checking and money market | **15727549** | 14754571 |
| &nbsp;&nbsp;&nbsp;&nbsp;Certificates of deposit of less than $100,000 | **986014** | 996721 |
| &nbsp;&nbsp;&nbsp;&nbsp;Certificates of deposit of $100,000 and over | **1386906** | 1391683 |
| **Total deposits** | **25494028** | 25293644 |
| Federal funds purchased and securities sold under agreements to repurchase | **2596461** | 2926758 |
| Other borrowings | **15049** | 56 |
| Other liabilities | **518595** | 443694 |
| **Total liabilities** | **28624133** | 28664152 |
| Commerce Bancshares, Inc. stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $5 par value |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Authorized 190,000,000; issued 135,210,812 shares at both June 30, 2025 and December 31, 2024 | **676054** | 676054 |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital surplus | **3386218** | 3395645 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | **255938** | 45494 |
| &nbsp;&nbsp;&nbsp;&nbsp;Treasury stock of 1,530,278 shares at June 30, 2025 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; and 784,203 shares at December 31, 2024, at cost | **(96589)** | (48401) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | **(581049)** | (758911) |
| Total Commerce Bancshares, Inc. stockholders' equity | **3640572** | 3309881 |
| Non-controlling interest | **19542** | 22594 |
| **Total equity** | **3660114** | 3332475 |
| **Total liabilities and equity** | $**32284247** | $31996627 |

---

*See accompanying notes to consolidated financial statements.* 

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Commerce Bancshares, Inc. and Subsidiaries**

**CONSOLIDATED STATEMENTS OF INCOME**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended June 30** | **For the Three Months Ended June 30** | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** |
| *(In thousands, except per share data)* | **2025** | 2024 | **2025** | 2024 |
|  | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* |
| **INTEREST INCOME** |  |  |  |  |
| Interest and fees on loans | $**260444** | $267463 | $**514638** | $532140 |
| Interest and fees on loans held for sale | **40** | 46 | **63** | 86 |
| Interest on investment securities | **79998** | 70776 | **156450** | 136704 |
| Interest on federal funds sold | **2** | 27 | **31** | 37 |
| Interest on securities purchased under agreements to resell | **8516** | 2421 | **15934** | 4055 |
| Interest on deposits with banks | **22636** | 28630 | **48885** | 55062 |
| **Total interest income** | **371636** | 369363 | **736001** | 728084 |
| **INTEREST EXPENSE** |  |  |  |  |
| Interest on deposits: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings, interest checking and money market | **51835** | 56829 | **104238** | 112409 |
| &nbsp;&nbsp;&nbsp;&nbsp;Certificates of deposit of less than $100,000 | **8445** | 10523 | **17377** | 20714 |
| &nbsp;&nbsp;&nbsp;&nbsp;Certificates of deposit of $100,000 and over | **12914** | 16892 | **26233** | 34988 |
| Interest on federal funds purchased | **1416** | 3569 | **2800** | 7988 |
| Interest on securities sold under agreements to repurchase | **16853** | 19293 | **36077** | 40731 |
| Interest on other borrowings | **26** | 8 | **27** | 6 |
| **Total interest expense** | **91489** | 107114 | **186752** | 216836 |
| **Net interest income** | **280147** | 262249 | **549249** | 511248 |
| Provision for credit losses | **5597** | 5468 | **20084** | 10255 |
| **Net interest income after credit losses** | **274550** | 256781 | **529165** | 500993 |
| **NON-INTEREST INCOME** |  |  |  |  |
| Trust fees | **55571** | 52291 | **112163** | 103396 |
| Bank card transaction fees | **46362** | 47477 | **91955** | 94407 |
| Deposit account charges and other fees | **26248** | 25325 | **52870** | 49476 |
| Capital market fees | **6175** | 4760 | **11287** | 8652 |
| Consumer brokerage services | **5383** | 4478 | **10168** | 8886 |
| Loan fees and sales | **3419** | 3431 | **6823** | 6572 |
| Other | **22455** | 14482 | **39296** | 29703 |
| **Total non-interest income** | **165613** | 152244 | **324562** | 301092 |
| **INVESTMENT SECURITIES GAINS (LOSSES), NET** | **437** | 3233 | **(7154)** | 2974 |
| **NON-INTEREST EXPENSE** |  |  |  |  |
| Salaries and employee benefits | **155025** | 149120 | **308103** | 300921 |
| Data processing and software | **32904** | 31529 | **65142** | 62682 |
| Net occupancy | **13654** | 12544 | **27674** | 26118 |
| Professional and other services | **12973** | 8617 | **22999** | 17265 |
| Marketing | **5974** | 5356 | **11817** | 9392 |
| Equipment | **5157** | 5091 | **10405** | 10101 |
| Supplies and communication | **4962** | 4636 | **10008** | 9380 |
| Deposit insurance | **3312** | 2354 | **7056** | 10371 |
| Other | **10476** | 12967 | **19609** | 31681 |
| **Total non-interest expense** | **244437** | 232214 | **482813** | 477911 |
| Income before income taxes | **196163** | 180044 | **363760** | 327148 |
| Less income taxes | **42400** | 38602 | **79364** | 70254 |
| Net income | **153763** | 141442 | **284396** | 256894 |
| Less non-controlling interest expense (income) | **1284** | 1889 | **325** | 4678 |
| **Net income attributable to Commerce Bancshares, Inc.** | $**152479** | $139553 | $**284071** | $252216 |
| Net income per common share — basic | $**1.14** | $1.03 | $**2.12** | $1.85 |
| Net income per common share — diluted | $**1.14** | $1.03 | $**2.12** | $1.85 |

---

*See accompanying notes to consolidated financial statements.*

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Commerce Bancshares, Inc. and Subsidiaries**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended June 30** | **For the Three Months Ended June 30** | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** |
| *(In thousands)* | **2025** | 2024 | **2025** | 2024 |
|  | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* |
| **Net income** | $**153763** | $141442 | $**284396** | $256894 |
| **Other comprehensive income (loss), net of tax:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net unrealized gains (losses) on available for sale debt securities | **51374** | 130076 | **169662** | 109675 |
| &nbsp;&nbsp;&nbsp;Change in pension loss | **171** | 177 | **343** | 353 |
| &nbsp;&nbsp;&nbsp;Unrealized gains (losses) on cash flow hedge derivatives | **1982** | (7043) | **7857** | (26433) |
| **Other comprehensive income (loss), net of tax** | **53527** | 123210 | **177862** | 83595 |
| **Comprehensive income (loss)** | **207290** | 264652 | **462258** | 340489 |
| Less non-controlling interest (income) expense | **1284** | 1889 | **325** | 4678 |
| **Comprehensive income (loss) attributable to Commerce Bancshares, Inc.** | $**206006** | $262763 | $**461933** | $335811 |

---

*See accompanying notes to consolidated financial statements.*

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Commerce Bancshares, Inc. and Subsidiaries**

**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

**Three Months Ended June 30, 2025 and 2024** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Commerce Bancshares, Inc. Shareholders** | **Commerce Bancshares, Inc. Shareholders** | **Commerce Bancshares, Inc. Shareholders** | **Commerce Bancshares, Inc. Shareholders** | **Commerce Bancshares, Inc. Shareholders** | | |
|<br>*(In thousands, except per share data)* | **Common Stock** | **Capital Surplus** | **Retained Earnings** | **Treasury Stock** | **Accumulated Other Comprehensive Income (Loss)** |<br>**Non-Controlling Interest** |<br>**Total** |
|  | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* |
| **Balance March 31, 2025** | $**676054** | $**3381960** | $**140220** | $**(85871)** | $**(634576)** | $**20615** | $**3498402** |
| Net income |  |  | **152479** |  |  | **1284** | **153763** |
| Other comprehensive income (loss) |  |  |  |  | **53527** |  | **53527** |
| Distributions to non-controlling interest |  |  |  |  |  | **(2357)** | **(2357)** |
| Purchases of treasury stock |  |  |  | **(10497)** |  |  | **(10497)** |
| Issuance under stock purchase and equity<br>&nbsp;&nbsp;&nbsp;&nbsp;compensation plans |  | **219** |  | **(221)** |  |  | **(2)** |
| Stock-based compensation |  | **4039** |  |  |  |  | **4039** |
| Cash dividends paid on common stock<br>&nbsp;&nbsp;&nbsp;&nbsp; ($0.275 per share) |  |  | **(36761)** |  |  |  | **(36761)** |
| **Balance June 30, 2025** | $**676054** | $**3386218** | $**255938** | $**(96589)** | $**(581049)** | $**19542** | $**3660114** |
| Balance March 31, 2024 | $655322 | $3148649 | $130706 | $(59674) | $(931027) | $19913 | $2963889 |
| Net Income |  |  | 139553 |  |  | 1889 | 141442 |
| Other comprehensive income (loss) |  |  |  |  | 123210 |  | 123210 |
| Distributions to non-controlling interest |  |  |  |  |  | (1202) | (1202) |
| Purchases of treasury stock |  |  |  | (38229) |  |  | (38229) |
| Issuance under stock purchase and equity<br>&nbsp;&nbsp;&nbsp;&nbsp; compensation plans |  | 273 |  | (273) |  |  |  |
| Stock-based compensation |  | 4185 |  |  |  |  | 4185 |
| Cash dividends paid on common stock<br>&nbsp;&nbsp;&nbsp;&nbsp; ($.257 per share) |  |  | (34960) |  |  |  | (34960) |
| Balance June 30, 2024 | $655322 | $3153107 | $235299 | $(98176) | $(807817) | $20600 | $3158335 |

---

*See accompanying notes to consolidated financial statements.*

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Commerce Bancshares, Inc. and Subsidiaries**

**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

**Six Months Ended June 30, 2025 and 2024** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Commerce Bancshares, Inc. Shareholders** | **Commerce Bancshares, Inc. Shareholders** | **Commerce Bancshares, Inc. Shareholders** | **Commerce Bancshares, Inc. Shareholders** | **Commerce Bancshares, Inc. Shareholders** | | |
|<br>*(In thousands, except per share data)* | **Common Stock** | **Capital Surplus** | **Retained Earnings** | **Treasury Stock** | **Accumulated Other Comprehensive Income (Loss)** |<br>**Non-Controlling Interest** |<br>**Total** |
|  | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* | *(Unaudited)* |
| **Balance December 31, 2024** | $**676054** | $**3395645** | $**45494** | $**(48401)** | $**(758911)** | $**22594** | $**3332475** |
| Net income |  |  | **284071** |  |  | **325** | **284396** |
| Other comprehensive income (loss) |  |  |  |  | **177862** |  | **177862** |
| Distributions to non-controlling interest |  |  |  |  |  | **(3377)** | **(3377)** |
| Purchases of treasury stock |  |  |  | **(66076)** |  |  | **(66076)** |
| Issuance under stock purchase and equity compensation plans |  | **(17892)** |  | **17888** |  |  | **(4)** |
| Stock-based compensation |  | **8465** |  |  |  |  | **8465** |
| Cash dividends paid on common stock ($.550 per share) |  |  | **(73627)** |  |  |  | **(73627)** |
| **Balance June 30, 2025** | $**676054** | $**3386218** | $**255938** | $**(96589)** | $**(581049)** | $**19542** | $**3660114** |
| Balance December 31, 2023 | $655322 | $3162622 | $53183 | $(35599) | $(891412) | $20114 | $2964230 |
| Net income |  |  | 252216 |  |  | 4678 | 256894 |
| Other comprehensive income (loss) |  |  |  |  | 83595 |  | 83595 |
| Distributions to non-controlling interest |  |  |  |  |  | (4192) | (4192) |
| Purchases of treasury stock |  |  |  | (80543) |  |  | (80543) |
| Issuance under stock purchase and equity compensation plans |  | (17966) |  | 17966 |  |  |  |
| Stock-based compensation |  | 8451 |  |  |  |  | 8451 |
| Cash dividends paid on common stock ($.514 per share) |  |  | (70100) |  |  |  | (70100) |
| Balance June 30, 2024 | $655322 | $3153107 | $235299 | $(98176) | $(807817) | $20600 | $3158335 |

---

*See accompanying notes to consolidated financial statements.*

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Commerce Bancshares, Inc. and Subsidiaries**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
| | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** |
| *(In thousands)* | **2025** | 2024 |
|  | *(Unaudited)* | *(Unaudited)* |
| **OPERATING ACTIVITIES:** |  |  |
| Net income | $**284396** | $256894 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | **20084** | 10255 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for depreciation and amortization | **27702** | 26800 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of investment security premiums, net | **(9393)** | 1649 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment securities (gains) losses, net (A) | **7154** | (2974) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (gains) losses on sales of loans held for sale | **(1053)** | (988) |
| &nbsp;&nbsp;&nbsp;&nbsp;Originations of loans held for sale | **(51798)** | (43505) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sales of loans held for sale | **52203** | 45453 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (increase) decrease in trading debt securities, excluding unsettled transactions | **(2023)** | (13589) |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | **8465** | 8451 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Increase) decrease in interest receivable | **117** | 2794 |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) in interest payable | **6540** | (2303) |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) in income taxes payable | **(23039)** | 528 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other changes, net | **(69559)** | (6630) |
| **Net cash provided by (used in) operating activities** | **249796** | 282835 |
| **INVESTING ACTIVITIES:** |  |  |
| Proceeds from sales of investment securities (A) | **46094** | 1157176 |
| Proceeds from maturities/pay downs of investment securities (A) | **958189** | 1166452 |
| Purchases of investment securities (A) | **(540370)** | (1100450) |
| Net (increase) decrease in loans | **(466478)** | 23692 |
| Securities purchased under agreements to resell | **(350000)** | (350000) |
| Repayments of securities purchased under agreements to resell | **125000** | 325000 |
| Purchases of premises and equipment | **(23267)** | (19504) |
| Sales of premises and equipment | **100** | 3281 |
| **Net cash provided by (used in) investing activities** | **(250732)** | 1205647 |
| **FINANCING ACTIVITIES:** |  |  |
| Net increase (decrease) in non-interest bearing, savings, interest checking and money market deposits | **246122** | (669259) |
| Net increase (decrease) in certificates of deposit | **(15484)** | (456891) |
| Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase | **(330297)** | (357416) |
| Net increase (decrease) in other borrowings | **14993** | 2580 |
| Purchases of treasury stock | **(67047)** | (79889) |
| Cash dividends paid on common stock and distributions to non-controlling interest | **(77004)** | (70100) |
| Other, net | **(4)** |  |
| **Net cash provided by (used in) financing activities** | **(228721)** | (1630975) |
| Increase (decrease) in cash, cash equivalents and restricted cash | **(229657)** | (142493) |
| Cash, cash equivalents and restricted cash at beginning of year | **3375992** | 2687283 |
| **Cash, cash equivalents and restricted cash at June 30** | $**3146335** | $2544790 |
| Income tax payments, net | $**97116** | $65890 |
| Interest paid on deposits and borrowings | $**180212** | $219139 |
| Loans transferred to foreclosed real estate | $**617** | $88 |

---

*(A) Available for sale debt securities, equity securities, and other securities.*

*See accompanying notes to consolidated financial statements.* 

Restricted cash is comprised of cash collateral posted by the Company to secure interest rate swap agreements. This balance is included in other assets in the consolidated balance sheets and totaled $22 thousand at June 30, 2025. The Company had $41 thousand in restricted cash at June 30, 2024.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Commerce Bancshares, Inc. and Subsidiaries**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**June 30, 2025** (Unaudited)

**1. Principles of Consolidation and Presentation**

The accompanying consolidated financial statements include the accounts of Commerce Bancshares, Inc. and all majority-owned subsidiaries (the Company). Most of the Company's operations are conducted by its subsidiary bank, Commerce Bank (the Bank). The consolidated financial statements in this report have not been audited by an independent registered public accounting firm, but in the opinion of management, all adjustments necessary to present fairly the financial position and the results of operations for the interim periods have been made. All such adjustments are of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated. Certain reclassifications were made to 2024 data to conform to current year presentation. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheets and revenues and expenses for the periods. Actual results could differ significantly from those estimates. Management has evaluated subsequent events for potential recognition or disclosure. The results of operations for the six month period ended June 30, 2025 are not necessarily indicative of results to be attained for the full year or any other interim period.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company's most recent Annual Report on Form 10-K, containing the latest audited consolidated financial statements and notes thereto.

**2. Loans and Allowance for Credit Losses**

Major classifications within the Company's held for investment loan portfolio at June 30, 2025 and December 31, 2024 are as follows:

---

| | | |
|:---|:---|:---|
| *(In thousands)* | **June 30, 2025** | December 31, 2024 |
| **Commercial:** |  |  |
| Business | $**6328684** | $6053820 |
| Real estate – construction and land | **1405398** | 1409901 |
| Real estate – business | **3757778** | 3661218 |
| **Personal Banking:** |  |  |
| Real estate – personal | **3058845** | 3058195 |
| Consumer | **2157867** | 2073123 |
| Revolving home equity | **364429** | 356650 |
| Consumer credit card | **576151** | 595930 |
| Overdrafts | **16316** | 11266 |
| **Total loans** | $**17665468** | $17220103 |

---

Accrued interest receivable totaled $69.0 million and $70.6 million at June 30, 2025 and December 31, 2024, respectively, and was included within other assets on the consolidated balance sheets. For the three months ended June 30, 2025, the Company wrote-off accrued interest by reversing interest income of $91 thousand and $1.6 million in the Commercial and Personal Banking portfolios, respectively. Similarly, for the six months ended June 30, 2025, the Company wrote off accrued interest of $203 thousand and $3.3 million in the Commercial and Personal Banking portfolios, respectively. For the three months ended June 30, 2024, the Company reversed $341 thousand and $1.6 million in the Commercial and Personal Banking portfolios, respectively, and in the six months ended June 30, 2024, reversed $435 thousand and $3.1 million in the Commercial and Personal Banking portfolios.

At June 30, 2025, loans of $3.4 billion were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits. Additional loans of $2.7 billion were pledged at the Federal Reserve Bank as collateral for discount window borrowings.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

*Allowance for credit losses*

The allowance for credit losses is measured using an average historical loss model which incorporates relevant information about past events (including historical credit loss experience on loans with similar risk characteristics), current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans. The allowance for credit losses is measured on a collective (pool) basis. Loans are aggregated into pools based on similar risk characteristics including borrower type, collateral type and expected credit loss patterns. Loans that do not share similar risk characteristics, primarily large loans on non-accrual status, are evaluated on an individual basis.

For loans evaluated for credit losses on a collective basis, average historical loss rates are calculated for each pool using the Company's historical net charge-offs (combined charge-offs and recoveries by observable historical reporting period) and outstanding loan balances during a lookback period. Lookback periods can be different based on the individual pool and represent management's credit expectations for the pool of loans over the remaining contractual life. In certain loan pools, if the Company's own historical loss rate is not reflective of the loss expectations, the historical loss rate is augmented by industry and peer data. The calculated average net charge-off rate is then adjusted for current conditions and reasonable and supportable forecasts. These adjustments increase or decrease the average historical loss rate to reflect expectations of future losses given a single path economic forecast of key macroeconomic variables including GDP, disposable income, various interest rates, unemployment rate, consumer price index (CPI) inflation rate, housing price index (HPI), commercial real estate price index (CREPI) and market volatility. The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for a reasonable and supportable period before reverting back to historical averages using a straight-line method. The forecast-adjusted loss rate is applied to the amortized cost of loans over the remaining contractual lives, adjusted for expected prepayments. The contractual term excludes expected extensions (except for contractual extensions at the option of the customer), renewals and modifications. Credit cards and certain similar consumer lines of credit do not have stated maturities and therefore, for these loan classes, remaining contractual lives are determined by estimating future cash flows expected to be received from customers until payments have been fully allocated to outstanding balances. Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecast such as changes in portfolio composition, underwriting practices, or significant unique events or conditions.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

Key assumptions in the Company's allowance for credit loss model include the economic forecast, the reasonable and supportable period, forecasted macro-economic variables, prepayment assumptions and qualitative factors applied for portfolio composition changes, underwriting practices, or significant unique events or conditions. The assumptions utilized in estimating the Company's allowance for credit losses at June 30, 2025 and March 31, 2025 are discussed below.

---

| | | |
|:---|:---|:---|
| **Key Assumption** | **June 30, 2025** | **December 31, 2024** |
| Overall economic forecast | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Economy in the next year is expected to benefit from deregulation, fiscal stimulus and less policy uncertainty <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The forecast assumes recent reduction in tariffs between China and the US will be permanent while increases in steel and aluminum tariffs were included<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Layoffs remain low  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The United States economy will grow<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Expansionary fiscal policy and less immigration cause the labor market to tighten, pushing the unemployment rate lower |
| Reasonable and supportable period and related reversion period | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reasonable and supportable period of one year<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reversion to historical average loss rates within two quarters using a straight-line method | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reasonable and supportable period of one year<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reversion to historical average loss rates within two quarters using a straight-line method |
| Forecasted macro-economic variables | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unemployment rate ranges from 4.3% to 4.4% during the supportable forecast period<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Real GDP growth ranges from 1.0% to 1.6%<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BBB corporate yield from 5.9% to 6.2%<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Housing Price Index from 332.8 to 341.0 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unemployment rate ranges from 4.2% to 4.3% during the supportable forecast period<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Real GDP growth ranges from 2.5% to 2.7%<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BBB corporate yield from 5.2% to 5.3%<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Housing Price Index from 324.8 to 335.4 |
| Prepayment assumptions | Commercial loans<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 5% for most loan pools<br>Personal banking loans<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Ranging from 8.1% to 23.3% for most loan pools<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Consumer credit cards 66.4% | Commercial loans<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 5% for most loan pools<br>Personal banking loans<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Ranging from 8.9% to 23.1% for most loan pools<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Consumer credit cards 66.5% |
| Qualitative factors | Added qualitative factors related to:<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in the composition of the loan portfolios<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain industries experiencing stress or emerging concerns within the portfolio<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Loans downgraded to special mention, substandard, or non-accrual status<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Consumer auto and other vehicle portfolios loss expectation adjustment<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other consumer portfolio loss expectation adjustment <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain portfolios where the model assumptions do not capture all identified loss risk | Added qualitative factors related to:<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in the composition of the loan portfolios<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain industries experiencing stress or emerging concerns within the portfolio<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Loans downgraded to special mention, substandard, or non-accrual status<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Consumer auto portfolio <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain portfolios where the model assumptions do not capture all identified loss risk |

---

The liability for unfunded lending commitments utilizes the same model as the allowance for credit losses on loans, however, the liability for unfunded lending commitments incorporates an assumption for the portion of unfunded commitments that are expected to be funded.

*Sensitivity in the Allowance for Credit Loss model*

The allowance for credit losses is an estimate that requires significant judgment including projections of the macro-economic environment. The forecasted macro-economic environment continuously changes which can cause fluctuations in the estimate of expected credit losses.

The current forecast includes projections on the impact of the tariffs the United States ("U.S.") administration announced and noted policy uncertainty.

Policy changes and the market's response to the changes could impact inflation, labor market trends, Federal Reserve monetary policy, business growth and consumer spending. Economic, political, and social developments regionally, nationally, and even globally could significantly modify economic projections used in the estimation of the allowance for credit losses.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

Potential changes in any one economic variable may or may not affect the overall allowance because a variety of economic variables and inputs are considered in estimating the allowance, and changes in those variables and inputs may not occur at the same rate, may not be consistent across product types, and may have offsetting impacts to other changing variables and inputs.

A summary of the activity in the allowance for credit losses on loans and the liability for unfunded lending commitments for the three and six months ended June 30, 2025 and 2024, respectively, follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 |
| *(In thousands)* | Commercial | Personal Banking | <br>Total | Commercial | Personal Banking | <br>Total |
| **ALLOWANCE FOR CREDIT LOSSES ON LOANS** |  |  |  |  |  |  |
| **Balance at beginning of period** | $**106700** | $**60331** | $**167031** | $**106769** | $**55973** | $**162742** |
| Provision for credit losses on loans | **185** | **7734** | **7919** | **539** | **22475** | **23014** |
| Deductions: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans charged off | **495** | **11530** | **12025** | **1221** | **24097** | **25318** |
| &nbsp;&nbsp;&nbsp;&nbsp;Less recoveries on loans | **464** | **1871** | **2335** | **767** | **4055** | **4822** |
| Net loan charge-offs (recoveries) | **31** | **9659** | **9690** | **454** | **20042** | **20496** |
| **Balance June 30, 2025** | $**106854** | $**58406** | $**165260** | $**106854** | $**58406** | $**165260** |
| **LIABILITY FOR UNFUNDED LENDING COMMITMENTS** |  |  |  |  |  |  |
| **Balance at beginning of period** | $**17047** | $**1280** | $**18327** | $**17887** | $**1048** | $**18935** |
| Provision for credit losses on unfunded lending commitments | **(2276)** | **(46)** | **(2322)** | **(3116)** | **186** | **(2930)** |
| **Balance June 30, 2025** | $**14771** | $**1234** | $**16005** | $**14771** | $**1234** | $**16005** |
| **ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS** | $**121625** | $**59640** | $**181265** | $**121625** | $**59640** | $**181265** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the Three Months Ended June 30, 2024 | For the Three Months Ended June 30, 2024 | For the Three Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 |
| *(In thousands)* | Commercial | Personal Banking | <br>Total | Commercial | Personal Banking | <br>Total |
| **ALLOWANCE FOR CREDIT LOSSES ON LOANS** |  |  |  |  |  |  |
| **Balance at beginning of period** | $105464 | $55001 | $160465 | $108201 | $54194 | $162395 |
| Provision for credit losses on loans | 2367 | 5482 | 7849 | (488) | 15284 | 14796 |
| Deductions: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans charged off | 850 | 11018 | 11868 | 1166 | 21867 | 23033 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less recoveries on loans | 236 | 1875 | 2111 | 670 | 3729 | 4399 |
| Net loan charge-offs (recoveries) | 614 | 9143 | 9757 | 496 | 18138 | 18634 |
| **Balance June 30, 2024** | $107217 | $51340 | $158557 | $107217 | $51340 | $158557 |
| **LIABILITY FOR UNFUNDED LENDING COMMITMENTS** |  |  |  |  |  |  |
| **Balance at beginning of period** | $21636 | $1450 | $23086 | $23909 | $1337 | $25246 |
| Provision for credit losses on unfunded lending commitments | (2273) | (108) | (2381) | (4546) | 5 | (4541) |
| **Balance June 30, 2024** | $19363 | $1342 | $20705 | $19363 | $1342 | $20705 |
| **ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS** | $126580 | $52682 | $179262 | $126580 | $52682 | $179262 |

---

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

*Delinquent and non-accrual loans*

The Company considers loans past due on the day following the contractual repayment date, if the contractual repayment was not received by the Company as of the end of the business day. The following table provides aging information on the Company's past due and accruing loans, in addition to the balances of loans on non-accrual status, at June 30, 2025 and December 31, 2024.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>*(In thousands)* | Current or Less Than 30 Days Past Due | <br>30 – 89<br>Days Past Due | 90 Days Past Due and Still Accruing | Non-accrual | <br>Total  |
| **June 30, 2025** |  |  |  |  |  |
| **Commercial:** |  |  |  |  |  |
| Business | $**6325992** | $**1168** | $**1114** | $**410** | $**6328684** |
| Real estate – construction and land | **1404827** | **145** | **—** | **426** | **1405398** |
| Real estate – business | **3742041** | **628** | **—** | **15109** | **3757778** |
| **Personal Banking:** |  |  |  |  |  |
| Real estate – personal | **3041262** | **5053** | **11582** | **948** | **3058845** |
| Consumer | **2130176** | **23700** | **3991** | **—** | **2157867** |
| Revolving home equity | **360725** | **1037** | **690** | **1977** | **364429** |
| Consumer credit card | **560937** | **7288** | **7926** | **—** | **576151** |
| Overdrafts | **16090** | **226** | **—** | **—** | **16316** |
| **Total** | $**17582050** | $**39245** | $**25303** | $**18870** | $**17665468** |
| **December 31, 2024** |  |  |  |  |  |
| **Commercial:** |  |  |  |  |  |
| Business | $6051654 | $1501 | $564 | $101 | $6053820 |
| Real estate – construction and land | 1409681 |  |  | 220 | 1409901 |
| Real estate – business | 3640643 | 5621 |  | 14954 | 3661218 |
| **Personal Banking:** |  |  |  |  |  |
| Real estate – personal | 3021017 | 25267 | 10885 | 1026 | 3058195 |
| Consumer | 2029115 | 40398 | 3610 |  | 2073123 |
| Revolving home equity | 351056 | 2798 | 819 | 1977 | 356650 |
| Consumer credit card | 579670 | 7622 | 8638 |  | 595930 |
| Overdrafts | 10953 | 313 |  |  | 11266 |
| **Total** | $17093789 | $83520 | $24516 | $18278 | $17220103 |

---

At both June 30, 2025 and December 31, 2024, the Company had $2.0 million in non-accrual loans that had no allowance for credit loss. The Company did not record any interest income on non-accrual loans during the six months ended June 30, 2025 and 2024, respectively.

*Credit quality indicators*

The following table provides information about the credit quality of the Commercial loan portfolio. The Company utilizes an internal risk rating system comprised of a series of grades to categorize loans according to perceived risk associated with the expectation of debt repayment based on borrower specific information including, but not limited to, current financial information, historical payment experience, industry information, collateral levels and collateral types. The "pass" category consists of a range of loan grades that reflect increasing, though still acceptable, risk. A loan is assigned the risk rating at origination and then monitored throughout the contractual term for possible risk rating changes. Movement of risk through the various grade levels in the "pass" category is monitored for early identification of credit deterioration. The "special mention" rating is applied to loans where the borrower exhibits negative financial trends due to borrower specific or systemic conditions that, if left uncorrected, threaten its capacity to meet its debt obligations. The borrower is believed to have sufficient financial flexibility to react to and resolve its negative financial situation. It is a transitional grade that is closely monitored for improvement or deterioration. The "substandard" rating is applied to loans where the borrower exhibits well-defined weaknesses that jeopardize its continued performance and are of a severity that the distinct possibility of default exists. Loans are placed on "non-accrual" when management does not expect to collect payments consistent with acceptable and agreed upon terms of repayment.

All loans are analyzed for risk rating updates annually. For larger loans, rating assessments may be more frequent if relevant information is obtained earlier through debt covenant monitoring or overall relationship management. Smaller loans

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

are monitored as identified by the loan officer based on the risk profile of the individual borrower or if the loan becomes past due related to credit issues. Loans rated special mention, substandard or non-accrual are subject to quarterly review and monitoring processes. In addition to the regular monitoring performed by the lending personnel and credit committees, loans are subject to review by a credit review department which verifies the appropriateness of the risk ratings for the loans chosen as part of its risk-based review plan.

The risk category of loans in the Commercial portfolio as of June 30, 2025 and December 31, 2024 are as follows:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | | |
| *(In thousands)* | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving Loans Amortized Cost Basis | Total |
| **June 30, 2025** |  |  |  |  |  |  |  |  |
| Business |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Risk Rating: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Pass | $945508 | $1186213 | $710351 | $491234 | $310530 | $401536 | $2050589 | $6095961 |
| &nbsp;&nbsp;&nbsp;&nbsp; Special mention | 2524 | 8267 | 5751 | 5048 | 377 | 1792 | 90028 | 113787 |
| &nbsp;&nbsp;&nbsp;&nbsp; Substandard |  | 1130 | 5600 | 19110 | 9181 | 8216 | 75289 | 118526 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual |  | 248 | 161 |  |  | 1 |  | 410 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Business: | $948032 | $1195858 | $721863 | $515392 | $320088 | $411545 | $2215906 | $6328684 |
| Gross write-offs for the six months ended June 30, 2025 | $— | $184 | $— | $— | $— | $10 | $603 | $797 |
| Real estate-construction |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Risk Rating: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Pass | $159498 | $367770 | $431180 | $381011 | $22414 | $3548 | $22129 | $1387550 |
| &nbsp;&nbsp;&nbsp;&nbsp; Special mention | 1912 |  |  | 12996 |  |  |  | 14908 |
| &nbsp;&nbsp;&nbsp;&nbsp; Substandard |  |  | 2514 |  |  |  |  | 2514 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual |  | 426 |  |  |  |  |  | 426 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Real estate-construction: | $161410 | $368196 | $433694 | $394007 | $22414 | $3548 | $22129 | $1405398 |
| Gross write-offs for the six months ended June 30, 2025 | $— | $24 | $— | $— | $— | $— | $— | $24 |
| Real estate-business |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Risk Rating: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Pass | $573010 | $632354 | $470837 | $694361 | $434922 | $594359 | $149678 | $3549521 |
| &nbsp;&nbsp;&nbsp;&nbsp; Special mention | 829 | 18301 | 3055 | 12780 | 1117 | 2346 |  | 38428 |
| &nbsp;&nbsp;&nbsp;&nbsp; Substandard |  | 958 | 40611 | 27393 | 14163 | 64642 | 6953 | 154720 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual |  |  | 144 | 292 | 165 | 14508 |  | 15109 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Real estate-business: | $573839 | $651613 | $514647 | $734826 | $450367 | $675855 | $156631 | $3757778 |
| Gross write-offs for the six months ended June 30, 2025 | $— | $— | $400 | $— | $— | $— | $— | $400 |
| Commercial loans |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Risk Rating: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Pass | $1678016 | $2186337 | $1612368 | $1566606 | $767866 | $999443 | $2222396 | $11033032 |
| &nbsp;&nbsp;&nbsp;&nbsp; Special mention | 5265 | 26568 | 8806 | 30824 | 1494 | 4138 | 90028 | 167123 |
| &nbsp;&nbsp;&nbsp;&nbsp; Substandard |  | 2088 | 48725 | 46503 | 23344 | 72858 | 82242 | 275760 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual |  | 674 | 305 | 292 | 165 | 14509 |  | 15945 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Commercial loans: | $1683281 | $2215667 | $1670204 | $1644225 | $792869 | $1090948 | $2394666 | $11491860 |
| Gross write-offs for the six months ended June 30, 2025 | $— | $208 | $400 | $— | $— | $10 | $603 | $1221 |

---

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | | |
| *(In thousands)* | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving Loans Amortized Cost Basis | Total |
| **December 31, 2024** |  |  |  |  |  |  |  |  |
| Business |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Risk Rating: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Pass | $1505299 | $956449 | $596681 | $405669 | $148483 | $350106 | $1887596 | $5850283 |
| &nbsp;&nbsp;&nbsp;&nbsp; Special mention | 13576 | 7978 | 8941 | 4155 | 263 | 2065 | 34997 | 71975 |
| &nbsp;&nbsp;&nbsp;&nbsp; Substandard | 2218 | 5596 | 19145 | 5069 | 928 | 10086 | 88419 | 131461 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual | 1 | 47 | 1 |  |  | 52 |  | 101 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Business: | $1521094 | $970070 | $624768 | $414893 | $149674 | $362309 | $2011012 | $6053820 |
| Gross write-offs for the year ended December 31, 2024 | $200 | $275 | $40 | $53 | $— | $18 | $1387 | $1973 |
| Real estate-construction |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Risk Rating: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Pass | $419562 | $442720 | $451606 | $53462 | $3143 | $2450 | $34075 | $1407018 |
| &nbsp;&nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Substandard |  | 2663 |  |  |  |  |  | 2663 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual | 220 |  |  |  |  |  |  | 220 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Real estate-construction: | $419782 | $445383 | $451606 | $53462 | $3143 | $2450 | $34075 | $1409901 |
| Gross write-offs for the year ended December 31, 2024 | $— | $— | $— | $— | $— | $— | $— | $— |
| Real estate- business |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Risk Rating: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Pass | $755498 | $604936 | $753023 | $448041 | $363717 | $368350 | $129868 | $3423433 |
| &nbsp;&nbsp;&nbsp;&nbsp; Special mention | 324 |  | 12383 | 12524 | 1643 | 298 |  | 27172 |
| &nbsp;&nbsp;&nbsp;&nbsp; Substandard | 1280 | 23420 | 36657 | 18429 | 4416 | 104382 | 7075 | 195659 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual |  |  | 170 |  | 14668 | 116 |  | 14954 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Real-estate business: | $757102 | $628356 | $802233 | $478994 | $384444 | $473146 | $136943 | $3661218 |
| Gross write-offs for the year ended December 31, 2024 | $— | $— | $— | $— | $— | $62 | $— | $62 |
| Commercial loans |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Risk Rating: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Pass | $2680359 | $2004105 | $1801310 | $907172 | $515343 | $720906 | $2051539 | $10680734 |
| &nbsp;&nbsp;&nbsp;&nbsp; Special mention | 13900 | 7978 | 21324 | 16679 | 1906 | 2363 | 34997 | 99147 |
| &nbsp;&nbsp;&nbsp;&nbsp; Substandard | 3498 | 31679 | 55802 | 23498 | 5344 | 114468 | 95494 | 329783 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual | 221 | 47 | 171 |  | 14668 | 168 |  | 15275 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Commercial loans: | $2697978 | $2043809 | $1878607 | $947349 | $537261 | $837905 | $2182030 | $11124939 |
| Gross write-offs for the year ended December 31, 2024 | $200 | $275 | $40 | $53 | $— | $80 | $1387 | $2035 |

---

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

The credit quality of Personal Banking loans is monitored primarily on the basis of aging/delinquency, and this information is provided as of June 30, 2025 and December 31, 2024 below.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | | |
| *(In thousands)* | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving Loans Amortized Cost Basis | Total |
| **June 30, 2025** |  |  |  |  |  |  |  |  |
| Real estate-personal |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current to 90 days past due | $192556 | $349967 | $365298 | $386310 | $458799 | $1285630 | $7755 | $3046315 |
| &nbsp;&nbsp;&nbsp;&nbsp; Over 90 days past due |  | 573 | 1000 | 2642 | 1938 | 5429 |  | 11582 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual |  |  |  |  | 105 | 843 |  | 948 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Real estate-personal: | $192556 | $350540 | $366298 | $388952 | $460842 | $1291902 | $7755 | $3058845 |
| Gross write-offs for the six months ended June 30, 2025 | $— | $— | $45 | $35 | $48 | $13 | $— | $141 |
| Consumer |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current to 90 days past due | $287128 | $318037 | $306721 | $167131 | $117950 | $84518 | $872391 | $2153876 |
| &nbsp;&nbsp;&nbsp;&nbsp; Over 90 days past due | 80 | 507 | 435 | 266 | 99 | 359 | 2245 | 3991 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Consumer: | $287208 | $318544 | $307156 | $167397 | $118049 | $84877 | $874636 | $2157867 |
| Gross write-offs for the six months ended June 30, 2025 | $7 | $2123 | $1564 | $1019 | $399 | $235 | $1023 | $6370 |
| Revolving home equity |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current to 90 days past due | $— | $— | $— | $— | $— | $— | $361762 | $361762 |
| &nbsp;&nbsp;&nbsp;&nbsp; Over 90 days past due |  |  |  |  |  |  | 690 | 690 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual |  |  |  |  |  |  | 1977 | $1977 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Revolving home equity: | $— | $— | $— | $— | $— | $— | $364429 | $364429 |
| Gross write-offs for the six months ended June 30, 2025 | $— | $— | $— | $— | $— | $— | $15 | $15 |
| Consumer credit card |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current to 90 days past due | $— | $— | $— | $— | $— | $— | $568225 | $568225 |
| &nbsp;&nbsp;&nbsp;&nbsp; Over 90 days past due |  |  |  |  |  |  | 7926 | 7926 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Consumer credit card: | $— | $— | $— | $— | $— | $— | $576151 | $576151 |
| Gross write-offs for the six months ended June 30, 2025 | $— | $— | $— | $— | $— | $— | $16319 | $16319 |
| Overdrafts |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current to 90 days past due | $16316 | $— | $— | $— | $— | $— | $— | $16316 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Overdrafts: | $16316 | $— | $— | $— | $— | $— | $— | $16316 |
| Gross write-offs for the six months ended June 30, 2025 | $1252 | $— | $— | $— | $— | $— | $— | $1252 |
| Personal banking loans |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current to 90 days past due | $496000 | $668004 | $672019 | $553441 | $576749 | $1370148 | $1810133 | $6146494 |
| &nbsp;&nbsp;&nbsp;&nbsp; Over 90 days past due | 80 | 1080 | 1435 | 2908 | 2037 | 5788 | 10861 | 24189 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual |  |  |  |  | 105 | 843 | 1977 | 2925 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Personal banking loans: | $496080 | $669084 | $673454 | $556349 | $578891 | $1376779 | $1822971 | $6173608 |
| Gross write-offs for the six months ended June 30, 2025 | $1259 | $2123 | $1609 | $1054 | $447 | $248 | $17357 | $24097 |

---

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | Term Loans Amortized Cost Basis by Origination Year | | |
| *(In thousands)* | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving Loans Amortized Cost Basis | Total |
| **December 31, 2024** |  |  |  |  |  |  |  |  |
| Real estate-personal |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current to 90 days past due | $387119 | $387486 | $404680 | $482733 | $637115 | $736217 | $10934 | $3046284 |
| &nbsp;&nbsp;&nbsp;&nbsp; Over 90 days past due | 665 | 892 | 1431 | 1890 | 3180 | 2827 |  | 10885 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual |  | 8 |  | 108 |  | 910 |  | 1026 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Real estate-personal: | $387784 | $388386 | $406111 | $484731 | $640295 | $739954 | $10934 | $3058195 |
| Gross write-offs for the year ended December 31, 2024 | $— | $82 | $115 | $83 | $— | $22 | $— | $302 |
| Consumer |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current to 90 days past due | $418902 | $369855 | $228189 | $165030 | $72314 | $49890 | $765333 | $2069513 |
| &nbsp;&nbsp;&nbsp;&nbsp; Over 90 days past due | 465 | 584 | 406 | 213 | 47 | 367 | 1528 | 3610 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Consumer: | $419367 | $370439 | $228595 | $165243 | $72361 | $50257 | $766861 | $2073123 |
| Gross write-offs for the year ended December 31, 2024 | $1438 | $3109 | $2859 | $1308 | $540 | $255 | $2309 | $11818 |
| Revolving home equity |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current to 90 days past due | $— | $— | $— | $— | $— | $— | $353854 | $353854 |
| &nbsp;&nbsp;&nbsp;&nbsp; Over 90 days past due |  |  |  |  |  |  | 819 | 819 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual |  |  |  |  |  |  | 1977 | $1977 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Revolving home equity: | $— | $— | $— | $— | $— | $— | $356650 | $356650 |
| Gross write-offs for the year ended December 31, 2024 | $— | $— | $— | $— | $— | $— | $— | $— |
| Consumer credit card |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current to 90 days past due | $— | $— | $— | $— | $— | $— | $587292 | $587292 |
| &nbsp;&nbsp;&nbsp;&nbsp; Over 90 days past due |  |  |  |  |  |  | 8638 | 8638 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Consumer credit card: | $— | $— | $— | $— | $— | $— | $595930 | $595930 |
| Gross write-offs for the year ended December 31, 2024 | $— | $— | $— | $— | $— | $— | $30427 | $30427 |
| Overdrafts |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current to 90 days past due | $11266 | $— | $— | $— | $— | $— | $— | $11266 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Overdrafts: | $11266 | $— | $— | $— | $— | $— | $— | $11266 |
| Gross write-offs for the year ended December 31, 2024 | $2689 | $— | $— | $— | $— | $— | $— | $2689 |
| Personal banking loans |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Current to 90 days past due | $817287 | $757341 | $632869 | $647763 | $709429 | $786107 | $1717413 | $6068209 |
| &nbsp;&nbsp;&nbsp;&nbsp; Over 90 days past due | 1130 | 1476 | 1837 | 2103 | 3227 | 3194 | 10985 | 23952 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-accrual |  | 8 |  | 108 |  | 910 | 1977 | 3003 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Personal banking loans: | $818417 | $758825 | $634706 | $649974 | $712656 | $790211 | $1730375 | $6095164 |
| Gross write-offs for the year ended December 31, 2024 | $4127 | $3191 | $2974 | $1391 | $540 | $277 | $32736 | $45236 |

---

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

*Collateral-dependent loans*

The Company's collateral-dependent loans are comprised of large loans on non-accrual status. The Company requires that collateral-dependent loans are either over-collateralized or carry collateral equal to the amortized cost of the loan. The following table presents the amortized cost basis of collateral-dependent loans as of June 30, 2025 and December 31, 2024.

---

| | | |
|:---|:---|:---|
| *(In thousands)* | Real Estate | Total |
| **June 30, 2025** |  |  |
| **Commercial:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate - business | $**14508** | $**14508** |
| **Personal Banking:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Revolving home equity | **1977** | **1977** |
| **Total** | $**16485** | $**16485** |
| **December 31, 2024** |  |  |
| **Commercial:** |  |  |
| Real estate - business | $14667 | $14667 |
| **Personal Banking:** |  |  |
| Revolving home equity | 1977 | 1977 |
| **Total** | $16644 | $16644 |

---

*Modifications for borrowers experiencing financial difficulty* 

When borrowers are experiencing financial difficulty, the Company may agree to modify the contractual terms of a loan to a borrower in order to assist the borrower in repaying principal and interest owed to the Company.

The Company's modifications of loans to borrowers experiencing financial difficulty are generally in the form of term extensions, repayment plans, payment deferrals, forbearance agreements, interest rate reductions, forgiveness of interest and/or fees, or any combination thereof. Commercial loans modified to borrowers experiencing financial difficulty are primarily loans that are substandard or non-accrual, where the maturity date was extended. Modifications on personal real estate loans are primarily those placed on forbearance plans, repayment plans, or deferral plans where monthly payments are suspended for a period of time or past due amounts are paid off over a certain period of time in the future or set up as a balloon payment at maturity. Modifications to certain credit card and other small consumer loans are often modified under debt counseling programs that can reduce the contractual rate or, in certain instances, forgive certain fees and interest charges. Other consumer loans modified to borrowers experiencing financial difficulty consist of various other workout arrangements with consumer customers.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

The following tables present the amortized cost at June 30, 2025 of loans that were modified during the three and six months ended June 30, 2025 and the amortized cost of at June 30, 2024 of loans that were modified during the three and six months ended June 30, 2024.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2025 |
| <br>*(Dollars in thousands)* | Term Extension | Payment Delay | Interest Rate Reduction | Other | Total | % of Total Loan Category |
| **June 30, 2025** |  |  |  |  |  |  |
| **Commercial:** |  |  |  |  |  |  |
| Business | $**35461** | $**—** | $**—** | $**—** | $**35461** | **0.6%** |
| Real estate – business | **1122** | **—** | **—** | **—** | **1122** | **—** |
| **Personal Banking:** |  |  |  |  |  |  |
| Real estate – personal | **—** | **3633** | **—** | **—** | **3633** | **0.1** |
| Consumer | **—** | **37** | **8** | **—** | **45** | **—** |
| Consumer credit card | **—** | **—** | **932** | **—** | **932** | **0.2** |
| **Total** | $**36583** | $**3670** | $**940** | $**—** | $**41193** | **0.2%** |
|  | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 |
| **June 30, 2025** |  |  |  |  |  |  |
| **Commercial:** |  |  |  |  |  |  |
| Business | $**52075** | $**—** | $**—** | $**—** | $**52075** | **0.8%** |
| Real estate – business | **77440** | **—** | **—** | **—** | **77440** | **2.1** |
| **Personal Banking:** |  |  |  |  |  |  |
| Real estate – personal | **—** | **6810** | **—** | **—** | **6810** | **0.2** |
| Consumer | **—** | **37** | **68** | **—** | **105** | **—** |
| Consumer credit card | **—** | **—** | **1696** | **—** | **1696** | **0.3** |
| **Total** | $**129515** | $**6847** | $**1764** | $**—** | $**138126** | **0.8%** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the Three Months Ended June 30, 2024 | For the Three Months Ended June 30, 2024 | For the Three Months Ended June 30, 2024 | For the Three Months Ended June 30, 2024 | For the Three Months Ended June 30, 2024 | For the Three Months Ended June 30, 2024 |
| <br>*(Dollars in thousands)* | Term Extension | Payment Delay | Interest Rate Reduction | Other | Total | % of Total Loan Category |
| **June 30, 2024** |  |  |  |  |  |  |
| **Commercial:** |  |  |  |  |  |  |
| Business | $19335 | $— | $— | $— | $19335 | 0.3% |
| Real estate – business | 45513 |  |  |  | 45513 | 1.3 |
| **Personal Banking:** |  |  |  |  |  |  |
| Real estate – personal | 70 | 1704 |  |  | 1774 | 0.1 |
| Consumer |  |  | 30 | 44 | 74 |  |
| Consumer credit card |  |  | 1124 |  | 1124 | 0.2 |
| **Total** | $64918 | $1704 | $1154 | $44 | $67820 | 0.4% |
|  | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 |
| **June 30, 2024** |  |  |  |  |  |  |
| **Commercial:** |  |  |  |  |  |  |
| Business | $30575 | $— | $— | $— | $30575 | 0.5% |
| Real estate – business | 47787 |  |  |  | 47787 | 1.3 |
| **Personal Banking:** |  |  |  |  |  |  |
| Real estate – personal | 309 | 3975 |  |  | 4284 | 0.1 |
| Consumer |  |  | 58 | 44 | 102 |  |
| Consumer credit card |  |  | 1958 |  | 1958 | 0.3 |
| **Total** | $78671 | $3975 | $2016 | $44 | $84706 | 0.5% |

---

The estimate of lifetime expected losses utilized in the allowance for credit losses model is developed using average historical experience on loans with similar risk characteristics, which includes losses from modifications of loans to borrowers experiencing financial difficulty. As a result, a change to the allowance for credit losses is generally not recorded upon

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

modification. For modifications to loans made to borrowers experiencing financial difficulty that are placed on non-accrual status, the Company determines the allowance for credit losses on an individual evaluation, using the same process that it utilizes for other loans on non-accrual status. Modifications made to commercial loans which are not on non-accrual status for borrowers experiencing financial difficulty are collectively evaluated based on internal risk rating, loan type, delinquency, historical experience, and current economic factors. Modifications made to borrowers experiencing financial difficulty for personal banking loans which are not on non-accrual status are collectively evaluated based on loan type, delinquency, historical experience, and current economic factors.

If a loan to a borrower experiencing financial difficulty is modified and subsequently deemed uncollectible, the allowance for credit losses continues to be based on individual evaluation, if that loan is already on non-accrual status. For those loans, the allowance for credit losses is estimated using discounted expected cash flows or the fair value of collateral. If an accruing loan made to a borrower experiencing financial difficulty is modified and subsequently deemed uncollectible, the loan's risk rating is downgraded to non-accrual status and the loan's related allowance for credit losses is determined based on individual evaluation, or if necessary, the loan is charged off and collection efforts begin.

The following tables summarize the financial impact of loan modifications and payment deferrals during the three and six months ended June 30, 2025 and June 30, 2024.

---

| | | |
|:---|:---|:---|
| | Term Extension | Term Extension |
| | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 |
| **Commercial:** |  |  |
| Business | Extended maturity by a weighted average of 2 months. | Extended maturity by a weighted average of 6 months. |
| Real estate – business | Extended maturity by a weighted average of 12 months. | Extended maturity by a weighted average of 11 months. |
| **Personal Banking:** |  |  |
| Real estate – personal |  | Extended maturity by a weighted average of 3 months. |
|  | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 |
| **Commercial:** |  |  |
| Business | Extended maturity by a weighted average of 7 months. | Extended maturity by a weighted average of 6 months. |
| Real estate – business | Extended maturity by a weighted average of 18 months. | Extended maturity by a weighted average of 10 months. |
| **Personal Banking:** |  |  |
| Real estate – personal |  | Extended maturity by a weighted average of 6 months. |

---

---

| | | |
|:---|:---|:---|
| | Payment Delay | Payment Delay |
| | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 |
| **Personal Banking:** |  |  |
| Real estate – personal | Deferred certain payments by a weighted average of 22 years. | Deferred certain payments by a weighted average of 4 years.  |
| Consumer | Deferred certain payments by a weighted average of 8 years. |  |
|  | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 |
| **Personal Banking:** |  |  |
| Real estate – personal | Deferred certain payments by a weighted average of 23 years. | Deferred certain payments by a weighted average of 6 years.  |
| Consumer | Deferred certain payments by a weighted average of 8 years. |  |

---

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

---

| | | |
|:---|:---|:---|
| | Interest Rate Reduction | Interest Rate Reduction |
| | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 |
| **Personal Banking:** |  |  |
| Consumer | Reduced contractual interest rate from average 22% to 6%. | Reduced contractual interest rate from average 22% to 6%. |
| Consumer credit card | Reduced contractual interest rate from average 22% to 6%. | Reduced contractual interest rate from average 22% to 6%. |
|  | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 |
| **Personal Banking:** |  |  |
| Consumer | Reduced contractual interest rate from average 22% to 6%. | Reduced contractual interest rate from average 22% to 6%. |
| Consumer credit card | Reduced contractual interest rate from average 22% to 6%. | Reduced contractual interest rate from average 22% to 6%. |

---

The Company had commitments of $12.7 million and $14.9 million at June 30, 2025 and December 31, 2024, respectively, to lend additional funds to borrowers experiencing financial difficulty and for whom the Company has modified the terms of loans in the form of an interest rate reduction; an other-than-insignificant payment delay; forgiveness of principal, interest, or fees; or a term extension during the current reporting period.

The following tables provide the amortized cost basis at June 30, 2025 of loans to borrowers experiencing financial difficulty that had a payment default during the three and six months ended June 30, 2025 and were modified within the 12 months preceding the payment default, as well as the amortized cost basis at June 30, 2024 of loans to borrowers experiencing financial difficulty that had a payment default during the three and six months ended June 30, 2024 and had been modified within the 12 months preceding the payment default. For purposes of this disclosure, the Company considers "default" to mean 90 days or more past due as to interest or principal.

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2025 |
| <br>(Dollars in thousands) | Term Extension | Payment Delay | Interest Rate Reduction | Interest/Fees Forgiven | Total | Term Extension | Payment Delay | Interest Rate Reduction | Interest/Fees Forgiven | Total |
| **June 30, 2025** |  |  |  |  |  |  |  |  |  |  |
| **Commercial:** |  |  |  |  |  |  |  |  |  |  |
| Business | $**44** | $**—** | $**—** | $**—** | $**44** | $**44** | $**—** | $**—** | $**—** | $**44** |
| Real estate – business | **14792** | **—** | **—** | **—** | **14792** | **14792** | **—** | **—** | **—** | **14792** |
| **Personal Banking:** |  |  |  |  |  |  |  |  |  |  |
| Real estate – personal | **—** | **1822** | **—** | **—** | **1822** | **—** | **2836** | **—** | **—** | **2836** |
| Consumer | **—** | **—** | **7** | **—** | **7** | **—** | **—** | **32** | **—** | **32** |
| Consumer credit card | **—** | **—** | **248** | **—** | **248** | **—** | **—** | **322** | **—** | **322** |
| **Total** | $**14836** | $**1822** | $**255** | $**—** | $**16913** | $**14836** | $**2836** | $**354** | $**—** | $**18026** |
|  | For the Three Months Ended June 30, 2024 | For the Three Months Ended June 30, 2024 | For the Three Months Ended June 30, 2024 | For the Three Months Ended June 30, 2024 | For the Three Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2024 |
| <br>*(Dollars in thousands)* | Term Extension | Payment Delay | Interest Rate Reduction | Interest/Fees Forgiven | Total | Term Extension | Payment Delay | Interest Rate Reduction | Interest/Fees Forgiven | Total |
| **June 30, 2024** |  |  |  |  |  |  |  |  |  |  |
| **Personal Banking:** |  |  |  |  |  |  |  |  |  |  |
| Real estate – personal | $**—** | $1740 | $— | $— | $1740 | $**—** | $1956 | $— | $— | $1956 |
| Consumer | **—** |  | 12 |  | 12 | **—** |  | 12 |  | 12 |
| Consumer credit card | **—** |  | 349 | 12 | 361 | **—** |  | 457 | 12 | 469 |
| **Total** | $**—** | $1740 | $361 | $12 | $2113 | $**—** | $1956 | $469 | $12 | $2437 |

---

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

The following tables present the amortized cost basis at June 30, 2025 of loans to borrowers experiencing financial difficulty that had been modified within the previous 12 months as well as the amortized cost basis at June 30, 2024 of loans to borrowers experiencing financial difficulty that had been modified within the 12 months preceding June 30, 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>*(In thousands)* | Current | 30-89 Days Past Due | 90 Days Past Due | Total |
| **June 30, 2025** |  |  |  |  |
| **Commercial:** |  |  |  |  |
| Business | $**81600** | $**—** | $**45** | $**81645** |
| Real estate – business | **108690** | **—** | **14632** | **123322** |
| **Personal Banking:** |  |  |  |  |
| Real estate – personal | **9498** | **1117** | **1822** | **12437** |
| Consumer | **138** | **723** | **7** | **868** |
| Consumer credit card | **2447** | **233** | **248** | **2928** |
| **Total** | $**202373** | $**2073** | $**16754** | $**221200** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>*(In thousands)* | Current | 30-89 Days Past Due | 90 Days Past Due | Total |
| **June 30, 2024** |  |  |  |  |
| **Commercial:** |  |  |  |  |
| Business | $32565 | $— | $— | $32565 |
| Real estate – business | 74512 |  |  | 74512 |
| **Personal Banking:** |  |  |  |  |
| Real estate – personal | 2129 | 2004 | 1740 | 5873 |
| Consumer | 172 | 1 | 12 | 185 |
| Consumer credit card | 2337 | 478 | 321 | 3136 |
| **Total** | $111715 | $2483 | $2073 | $116271 |

---

*Loans held for sale* 

The Company designates certain long-term fixed rate personal real estate loans as held for sale, and the Company has elected the fair value option for these loans. The election of the fair value option aligns the accounting for these loans with the related economic hedges discussed in Note 11. The loans are primarily sold to Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA). At June 30, 2025, the fair value of these loans was $3.5 million, and the unpaid principal balance was $3.4 million.

At June 30, 2025, none of the loans held for sale were on non-accrual status or 90 days past due and still accruing interest.

*Foreclosed real estate/repossessed assets*

The Company's holdings of foreclosed real estate totaled $397 thousand and $343 thousand at June 30, 2025 and December 31, 2024, respectively, and included in those amounts were $397 thousand and $343 thousand at June 30, 2025 and December 31, 2024, respectively, of foreclosed residential real estate properties held as a result of obtaining physical possession. Personal property acquired in repossession, generally autos, totaled $2.7 million and $2.2 million at June 30, 2025 and December 31, 2024. Upon acquisition, these assets are recorded at fair value less estimated selling costs at the date of foreclosure, establishing a new cost basis. They are subsequently carried at the lower of this cost basis or fair value less estimated selling costs.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**3. Investment Securities**

Investment securities consisted of the following at June 30, 2025 and December 31, 2024.

---

| | | |
|:---|:---|:---|
| *(In thousands)* | **June 30, 2025** | December 31, 2024 |
| Available for sale debt securities | $**8915779** | $9136853 |
| Trading debt securities | **46630** | 38034 |
| Equity securities: |  |  |
| &nbsp;&nbsp;Readily determinable fair value | **45098** | 48359 |
| &nbsp;&nbsp;No readily determinable fair value | **9413** | 9083 |
| Other: |  |  |
| &nbsp;&nbsp;Federal Reserve Bank stock | **35736** | 35545 |
| &nbsp;&nbsp;Federal Home Loan Bank stock | **10100** | 10120 |
| &nbsp;&nbsp;Private equity investments | **174070** | 184386 |
| **Total investment securities** <sup>(1)</sup> | $**9236826** | $9462380 |

---

<sup>(1)</sup> *Accrued interest receivable totaled $36.1 million and $35.0 million at June 30, 2025 and December 31, 2024, respectively, and was included within other assets on the consolidated balance sheets.* 

Most of the Company's investment securities are classified as available for sale debt securities, and this portfolio is discussed in more detail below. The Company's equity securities are also discussed below. Other investment securities include Federal Reserve Bank (FRB) stock, Federal Home Loan Bank (FHLB) stock, and investments in portfolio concerns held by the Company's private equity subsidiary. FRB stock and FHLB stock are held for liquidity management and regulatory purposes. Investment in FRB stock is based on the capital structure of the investing bank, and investment in FHLB stock is tied to the asset size of the borrowing bank and the level of borrowings from the FHLB. These holdings are carried at cost. The Company's private equity investments are carried at estimated fair value.

<u>Equity Securities</u>

The Company's equity securities portfolio includes mutual funds, common stock, and preferred stock with readily determinable fair values as well as equity securities with no readily determinable fair value. The Company has elected to measure equity securities with no readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes for the identical or similar investment of the same issuer. At March 31, 2024, this portfolio included the Company's 823,447 shares of Visa Inc. ("Visa") Class B-1 common stock (formerly Class B common stock), which were held by Commerce Bancshares, Inc. The Company's Visa Class B-1 shares had a carrying value of zero at March 31, 2024, as there had not been observable price changes in orderly transactions for identical or similar investments of the same issuer.

On April 8, 2024, Visa announced the commencement of a public offering to permit the exchange of its Class B-1 common stock for a combination of shares of its Class B-2 common stock and its Class C common stock ("Exchange Offer"). The Company tendered all of its Visa Class B-1 shares pursuant to the Exchange Offer. On May 3, 2024, the Exchange Offer closed, and in exchange for its 823,447 shares of Visa Class B-1 common stock, the Company received 411,723 shares of Visa Class B-2 common stock (which will be convertible under certain circumstances, as further described below, into Visa's publicly traded Class A common stock at an initial rate of 1.5875 shares of Class A common for each share of Class B-2 common stock, subject to adjustment) and 163,404 shares of Visa Class C common stock which automatically convert into four shares of Visa's Class A common stock (subject to future adjustments for any stock splits, recapitalizations or similar transactions) upon any transfer to a person other than a Visa member or an affiliate of a Visa member.

As a condition of participating in the exchange, the Company entered into a Makewhole Agreement with Visa that provides for cash payments to Visa to the extent (if any) that future adjustments to the conversion ratio for the Visa Class B-2 common stock to Class A common stock cause such ratio to fall below zero. Changes to the conversion ratio occur when Visa deposits funds to a litigation escrow established by Visa to pay settlements for certain covered litigation that pre-dated Visa's initial public offering, for which Visa has been effectively indemnified by Visa USA members through reductions to the conversion ratio for its Class B-1 common stock. The purpose of the Makewhole Agreement is to preserve the economic benefit of these adjustments to the Class B-1 conversion ratio for the benefit of Visa's Class A and Class C common stockholders following the exchange. As further described in Visa's related Issuer Tender Offer Statement on Schedule TO and Prospectus, each dated April 8, 2024, publicly filed with the U. S. Securities and Exchange Commission, both the Makewhole Agreement and the related escrow fund and transfer restrictions on Visa's Class B-1 common stock and the new Class B-2 common stock will terminate whenever the covered litigation is ultimately resolved, at which future date outstanding shares of Visa Class B-2 common stock will be convertible into shares of its Class A common stock at the then-applicable conversion ratio.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

As a result of the exchange, the Company elected the measurement alternative approach for its Visa Class C common stock and marked the stock to fair value, recording a gain based on the conversion privilege of the Visa Class C common stock and the closing price of Visa Class A common stock. During the second quarter of 2024, the Company sold 436 thousand shares of Visa Class A common stock at an average price of $274.91, resulting in proceeds of $119.8 million. During the third quarter of 2024, the Company sold 218 thousand Visa Class A shares at an average price of $260.56, resulting of proceeds of $56.8 million. The Company sold all of the Visa Class C shares during the second and third quarters of 2024. The Company's Visa Class B-2 common stock will continue to be carried at cost of $0 as the Company elected the measurement alternative approach for these shares as well, and there are not observable price changes in orderly transactions for identical or similar investments of the same issuer for the Visa Class B-2 shares held by the Company.

Changes in equity investments with no readily determinable fair value for each period were as follows:

---

| | | |
|:---|:---|:---|
| | Three Months Ended June 30 | Six Months Ended June 30 |
| *(In thousands)* | 2024 | 2024 |
| **Balance at beginning of period** | $**6988** | $**6978** |
| Observable upward price adjustments | **178227** | **178227** |
| Observable downward price adjustments | **—** | **—** |
| Impairment charges | **—** | **—** |
| Sales of securities and other activity | **(119435)** | **(119425)** |
| **Balance at end of period** | $**65780** | $**65780** |

---

Net gains and losses for the Company's equity securities portfolio for each period were as follows:

---

| | | |
|:---|:---|:---|
| | Three Months Ended June 30 | Six Months Ended June 30 |
| *(In thousands)* | 2024 | 2024 |
| Net gains (losses) recognized during the period on equity securities | $**178164** | $**178306** |
| Less: Net (gains) losses recognized during the period on equity securities sold during the period | **(119987)** | **(119987)** |
| **Net unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date** | $**58177** | $**58319** |

---

<u>Available for sale debt securities portfolio</u> 

The majority of the Company's investment portfolio is comprised of available for sale debt securities, which are carried at fair value with changes in fair value reported in accumulated other comprehensive income (AOCI). A summary of the available for sale debt securities by maturity groupings as of June 30, 2025 is shown below. The investment portfolio includes agency mortgage-backed securities, which are guaranteed by agencies such as FHLMC, FNMA, and Government National Mortgage Association (GNMA), in addition to non-agency mortgage-backed securities, which have no guarantee but are collateralized by commercial and residential mortgages. Also included are certain other asset-backed securities, which are primarily collateralized by credit cards, automobiles, student loans, and commercial loans. These securities differ from traditional debt securities primarily in that they may have uncertain maturity dates and are priced based on estimated prepayment rates on the underlying collateral.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

---

| | | |
|:---|:---|:---|
| *(In thousands)* | Amortized<br>Cost | Fair<br>Value |
| U.S. government and federal agency obligations: |  |  |
| &nbsp;&nbsp;&nbsp;Within 1 year | $439321 | $439782 |
| &nbsp;&nbsp;&nbsp;After 1 but within 5 years | 1429778 | 1437921 |
| &nbsp;&nbsp;&nbsp;After 5 but within 10 years | 717757 | 720034 |
| **Total U.S. government and federal agency obligations** | 2586856 | 2597737 |
| Government-sponsored enterprise obligations: |  |  |
| &nbsp;&nbsp;&nbsp;After 5 but within 10 years | 35212 | 30195 |
| &nbsp;&nbsp;&nbsp;After 10 years | 19820 | 13953 |
| **Total government-sponsored enterprise obligations** | 55032 | 44148 |
| State and municipal obligations: |  |  |
| &nbsp;&nbsp;&nbsp;Within 1 year | 70837 | 70298 |
| &nbsp;&nbsp;&nbsp;After 1 but within 5 years | 416047 | 393723 |
| &nbsp;&nbsp;&nbsp;After 5 but within 10 years | 176358 | 155555 |
| &nbsp;&nbsp;&nbsp;After 10 years | 111498 | 95382 |
| **Total state and municipal obligations** | 774740 | 714958 |
| Mortgage and asset-backed securities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Agency mortgage-backed securities | 3991521 | 3356039 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-agency mortgage-backed securities | 539853 | 499996 |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset-backed securities | 1516911 | 1496323 |
| **Total mortgage and asset-backed securities** | 6048285 | 5352358 |
| Other debt securities: |  |  |
| &nbsp;&nbsp;&nbsp;Within 1 year | 24459 | 24152 |
| &nbsp;&nbsp;&nbsp;After 1 but within 5 years | 73750 | 68648 |
| &nbsp;&nbsp;&nbsp;After 5 but within 10 years | 92265 | 89325 |
| &nbsp;&nbsp;&nbsp;After 10 years | 24748 | 24453 |
| **Total other debt securities** | 215222 | 206578 |
| **Total available for sale debt securities** | $9680135 | $8915779 |

---

Investments in U.S. government and federal agency obligations include U.S. Treasury inflation-protected securities, which totaled $413.4 million, at fair value, at June 30, 2025. Interest earned on these securities increases with inflation and decreases with deflation, as measured by the non-seasonally adjusted Consumer Price Index (CPI-U). At maturity, the principal paid is the greater of an inflation-adjusted principal or the original principal.

*Allowance for credit losses on available for sale debt securities*

Securities for which fair value is less than amortized cost are reviewed for impairment. Special emphasis is placed on securities whose credit rating has fallen below Baa3 (Moody's) or BBB- (Standard & Poor's), whose fair values have fallen more than 20% below purchase price, or those which have been identified based on management's judgment. These securities are placed on a watch list and cash flow analyses are prepared on an individual security basis. Certain securities are analyzed using a projected cash flow model, discounted to present value, and compared to the current amortized cost bases of the securities. The model uses input factors such as cash flow projections, contractual payments required, expected delinquency rates, credit support from other tranches, prepayment speeds, collateral loss severity rates (including loan to values), and various other information related to the underlying collateral. Securities not analyzed using the cash flow model are analyzed by reviewing credit ratings, credit support agreements, and industry knowledge to project future cash flows and any possible credit impairment.

At June 30, 2025, the fair value of securities on this watch list was $1.1 billion compared to $1.6 billion at December 31, 2024. Almost all of the securities included on the Company's watch list in the current quarter were experiencing unrealized loss positions due to the increase in interest rates since their purchase and were analyzed outside of the cash flow model. At June 30, 2025, the securities on the Company's watch list that were not deemed to be solely related to increasing interest rates were securities backed by government-guaranteed student loans and are expected to perform as contractually required. As of June 30, 2025, the Company did not identify any securities for which a credit loss exists, and for the six months ended June 30, 2025 and 2024, the Company did not recognize a credit loss expense on any available for sale debt securities.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

The table below summarizes debt securities available for sale in an unrealized loss position, aggregated by length of loss period, for which an allowance for credit losses has not been recorded at June 30, 2025 and December 31, 2024. Unrealized losses on these available for sale securities have not been recognized into income because after review, the securities were deemed not to be impaired. The unrealized losses on these securities are primarily attributable to changes in interest rates and current market conditions. At June 30, 2025, the Company does not intend to sell the securities, nor is it anticipated that it would be required to sell any of these securities at a loss.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Less than 12 months | Less than 12 months | 12 months or longer | 12 months or longer | Total | Total |
| <br>*(In thousands)* | &nbsp;&nbsp;&nbsp;&nbsp;Fair Value | Unrealized<br>Losses | Fair Value | Unrealized<br>Losses | Fair Value | Unrealized<br>Losses |
| **June 30, 2025** |  |  |  |  |  |  |
| U.S. government and federal agency obligations | $**690639** | $**4040** | $**291903** | $**8709** | $**982542** | $**12749** |
| Government-sponsored enterprise obligations | **—** | **—** | **44148** | **10884** | **44148** | **10884** |
| State and municipal obligations | **10292** | **272** | **690932** | **59513** | **701224** | **59785** |
| Mortgage and asset-backed securities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Agency mortgage-backed securities | **1964** | **16** | **3308242** | **636145** | **3310206** | **636161** |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-agency mortgage-backed securities | **—** | **—** | **454609** | **40278** | **454609** | **40278** |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset-backed securities | **110990** | **479** | **701808** | **26682** | **812798** | **27161** |
| Total mortgage and asset-backed securities | **112954** | **495** | **4464659** | **703105** | **4577613** | **703600** |
| Other debt securities | **26800** | **170** | **129891** | **9116** | **156691** | **9286** |
| **Total** | $**840685** | $**4977** | $**5621533** | $**791327** | $**6462218** | $**796304** |
| **December 31, 2024** |  |  |  |  |  |  |
| U.S. government and federal agency obligations | $1492875 | $24662 | $353129 | $17197 | $1846004 | $41859 |
| Government-sponsored enterprise obligations |  |  | 42848 | 12576 | 42848 | 12576 |
| State and municipal obligations | 14860 | 230 | 724587 | 79685 | 739447 | 79915 |
| Mortgage and asset-backed securities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Agency mortgage-backed securities | 3882 | 42 | 3409405 | 750664 | 3413287 | 750706 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-agency mortgage-backed securities | 10 |  | 564637 | 56986 | 564647 | 56986 |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset-backed securities | 219414 | 2371 | 1083938 | 36824 | 1303352 | 39195 |
| Total mortgage and asset-backed securities | 223306 | 2413 | 5057980 | 844474 | 5281286 | 846887 |
| Other debt securities | 26390 | 579 | 198936 | 12718 | 225326 | 13297 |
| **Total** | $1757431 | $27884 | $6377480 | $966650 | $8134911 | $994534 |

---

The entire available for sale debt portfolio included $6.5 billion of securities that were in a loss position at June 30, 2025, compared to $8.1 billion at December 31, 2024. The total amount of unrealized loss on these securities was $796.3 million at June 30, 2025, a decrease of $198.2 million compared to the unrealized loss at December 31, 2024. Securities with significant unrealized losses are discussed in the *"Allowance for credit losses on available for sale debt securities"* section above.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

For debt securities classified as available for sale, the following table shows the amortized cost, fair value, and allowance for credit losses of securities available for sale at June 30, 2025 and December 31, 2024, and the corresponding amounts of gross unrealized gains and losses (pre-tax) in AOCI, by security type.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>*(In thousands)* | Amortized Cost | Gross<br>Unrealized<br>Gains | Gross<br>Unrealized<br>Losses | Allowance for Credit Losses | Fair Value |
| **June 30, 2025** |  |  |  |  |  |
| U.S. government and federal agency obligations | $**2586856** | $**23630** | $**(12749)** | $**—** | $**2597737** |
| Government-sponsored enterprise obligations | **55032** | **—** | **(10884)** | **—** | **44148** |
| State and municipal obligations | **774740** | **3** | **(59785)** | **—** | **714958** |
| Mortgage and asset-backed securities: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Agency mortgage-backed securities | **3991521** | **679** | **(636161)** | **—** | **3356039** |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-agency mortgage-backed securities | **539853** | **421** | **(40278)** | **—** | **499996** |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset-backed securities | **1516911** | **6573** | **(27161)** | **—** | **1496323** |
| Total mortgage and asset-backed securities | **6048285** | **7673** | **(703600)** | **—** | **5352358** |
| Other debt securities | **215222** | **642** | **(9286)** | **—** | **206578** |
| **Total** | $**9680135** | $**31948** | $**(796304)** | $**—** | $**8915779** |
| **December 31, 2024** |  |  |  |  |  |
| U.S. government and federal agency obligations | $2594130 | $2981 | $(41859) | $— | $2555252 |
| Government-sponsored enterprise obligations | 55425 |  | (12576) |  | 42849 |
| State and municipal obligations | 822790 | 16 | (79915) |  | 742891 |
| Mortgage and asset-backed securities: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Agency mortgage-backed securities | 4195182 | 415 | (750706) |  | 3444891 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-agency mortgage-backed securities | 625539 | 136 | (56986) |  | 568689 |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset-backed securities | 1595797 | 413 | (39195) |  | 1557015 |
| Total mortgage and asset-backed securities | 6416518 | 964 | (846887) |  | 5570595 |
| Other debt securities | 238563 |  | (13297) |  | 225266 |
| **Total** | $10127426 | $3961 | $(994534) | $— | $9136853 |

---

The following table presents proceeds from sales of securities and the components of investment securities gains and losses which have been recognized in earnings.

---

| | | |
|:---|:---|:---|
| | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** |
| *(In thousands)* | **2025** | 2024 |
| **Proceeds from sales of securities:** |  |  |
| Available for sale debt securities | $**36065** | $1015845 |
| Equity securities | **—** | 120012 |
| Other investments | **10029** | 21319 |
| &nbsp;&nbsp;&nbsp;**Total proceeds** | $**46094** | $1157176 |
| **Investment securities gains (losses), net:** |  |  |
| **Available for sale debt securities:** |  |  |
| Gains realized on sales | $**4** | $— |
| Losses realized on sales | **(4218)** | (187543) |
| **Equity securities:** |  |  |
| Gains (losses) on equity securities, net | **1777** | 178306 |
| **Other:** |  |  |
| Gains realized on sales | **1167** | 956 |
|  Losses realized on sales | **(1773)** | (1522) |
| Fair value adjustments, net | **(4111)** | 12777 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total investment securities gains (losses), net** | $**(7154)** | $2974 |

---

Net losses on investment securities for the six months ended June 30, 2025 were mainly comprised of net losses of $4.2 million on sales of available for sale securities, net losses of $606 thousand on sales of private equity investments, and net

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losses in fair value of $4.1 million recorded on private equity investments. These losses were partially offset by net gains of $1.8 million on equity investments.

During 2024, the Company executed a plan to to reposition a portion of its available for sale debt securities portfolio through the sale of securities with an amortized cost of $1.2 billion. The securities that the Company sold had a yield of approximately 2.1%, which resulted in a loss of $179.1 million, and the Company reinvested $928.8 million of the proceeds into U.S. Treasury securities yielding approximately 4.6%.

<u>Pledged securities</u>

At June 30, 2025, securities totaling $6.9 billion in fair value were pledged to secure public fund deposits, securities sold under agreements to repurchase, trust funds, and borrowings at the FRB and FHLB, compared to $6.9 billion at December 31, 2024. Excluding obligations of various government-sponsored enterprises such as FNMA, FHLB and FHLMC, no investment in a single issuer exceeded 10% of stockholders' equity.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**4. Goodwill and Other Intangible Assets**

The following table presents information about the Company's intangible assets which have estimable useful lives.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | December 31, 2024 | December 31, 2024 | December 31, 2024 | December 31, 2024 |
| <br>*(In thousands)* | **Gross Carrying Amount** | **Accumulated Amortization** | **Valuation Allowance** | **Net Amount** | Gross Carrying Amount | Accumulated Amortization | Valuation Allowance | Net Amount |
| Amortizable intangible assets: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Core deposit premium | $**5550** | $**(5365)** | $**—** | $**185** | $5550 | $(5286) | $— | $264 |
| &nbsp;&nbsp;&nbsp;Mortgage servicing rights | **13611** | **(4063)** | **—** | **9548** | 13673 | (3905) |  | 9768 |
| **Total** | $**19161** | $**(9428)** | $**—** | $**9733** | $19223 | $(9191) | $— | $10032 |

---

Aggregate amortization expense on intangible assets was $306 thousand and $320 thousand for the three month periods ended June 30, 2025 and 2024, respectively and was $644 thousand and $651 thousand for the six months ended June 30, 2025 and 2024, respectively. The following table shows the estimated annual amortization expense for the next five fiscal years. This expense is based on existing asset balances and the interest rate environment as of June 30, 2025. The Company's actual amortization expense in any given period may be different from the estimated amounts depending upon the acquisition of intangible assets, changes in mortgage interest rates, prepayment rates and other market conditions.

---

| | |
|:---|:---|
| *(In thousands)* |  |
| 2025 | $1250 |
| 2026 | 1116 |
| 2027 | 966 |
| 2028 | 841 |
| 2029 | 757 |

---

Changes in the carrying amount of goodwill and other intangible assets for the six month period ended June 30, 2025 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(In thousands)* | Goodwill | Easement | Core Deposit Premium | Mortgage Servicing Rights |
| **Balance January 1, 2025** | $146539 | $3600 | $264 | $9768 |
| Originations, net of disposals |  |  |  | 345 |
| Amortization |  |  | (79) | (565) |
| **Balance June 30, 2025** | $146539 | $3600 | $185 | $9548 |

---

Goodwill allocated to the Company's operating segments at June 30, 2025 and December 31, 2024 is shown below.

---

| | | |
|:---|:---|:---|
| *(In thousands)* | **June 30, 2025** | December 31, 2024 |
| Consumer segment | $70721 | $70721 |
| Commercial segment | 75072 | 75072 |
| Wealth segment | 746 | 746 |
| **Total goodwill** | $146539 | $146539 |

---

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**5. Guarantees**

The Company, as a provider of financial services, routinely issues financial guarantees in the form of financial and performance standby letters of credit. Standby letters of credit are contingent commitments issued by the Company generally to guarantee the payment or performance obligation of a customer to a third party. While these represent a potential outlay by the Company, a significant amount of the commitments may expire without being drawn upon. The Company has recourse against the customer for any amount it is required to pay to a third party under a standby letter of credit. The letters of credit are subject to the same credit policies, underwriting standards and approval process as loans made by the Company. Most of the standby letters of credit are secured, and in the event of nonperformance by customers, the Company has rights to the underlying collateral, which could include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities.

Upon issuance of standby letters of credit, the Company recognizes a liability for the fair value of the obligation undertaken, which is estimated to be equivalent to the amount of fees received from the customer over the life of the agreement. At June 30, 2025, that net liability was $4.0 million, which will be accreted into income over the remaining life of the respective commitments. The contractual amount of these letters of credit, which represents the maximum potential future payments guaranteed by the Company, was $610.3 million at June 30, 2025.

The Company periodically enters into credit risk participation agreements (RPAs) as a guarantor to other financial institutions, in order to mitigate those institutions' credit risk associated with interest rate swaps with third parties. The RPA stipulates that, in the event of default by the third party on the interest rate swap, the Company will reimburse a portion of the loss borne by the financial institution. These interest rate swaps are normally collateralized (generally with real property, inventories and equipment) by the third party, which limits the credit risk associated with the Company's RPAs. The third parties usually have other borrowing relationships with the Company. The Company monitors overall borrower collateral and at June 30, 2025, believes sufficient collateral is available to cover potential swap losses. The RPAs are carried at fair value throughout their term with all changes in fair value, including those due to a change in the third party's creditworthiness, recorded in current earnings. The terms of the RPAs, which correspond to the terms of the underlying swaps, range from 1 to 15 years. At June 30, 2025, the fair value of the Company's guarantee liabilities for RPAs was $127 thousand, and the notional amount of the underlying swaps was $373.1 million. The maximum potential future payment guaranteed by the Company cannot be readily estimated but is dependent upon the fair value of the interest rate swaps at the time of default.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**6. Leases**

The Company has net investments in direct financing and sales-type leases to commercial, industrial, and tax-exempt entities. These leases are included within business loans on the Company's consolidated balance sheets. The Company primarily leases various types of equipment, trucks and trailers, and office furniture and fixtures. Lease agreements may include options for the lessee to renew or purchase the leased equipment at the end of the lease term. The Company has elected to adopt the lease component expedient in which the lease and nonlease components are combined into the total lease receivable. The Company also leases office space to third parties, and these leases are classified as operating leases. The leases may include options to renew or expand the leased space, and currently the leases have remaining terms of 3 months to 13 years.

The following table provides the components of lease income.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended June 30** | **For the Three Months Ended June 30** | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** |
| *(in thousands)* | **2025** | 2024 | **2025** | 2024 |
| Direct financing and sales-type leases | $**9852** | $9043 | $**19695** | $18055 |
| Operating leases<sup>(a)</sup> | **4188** | 4260 | **8485** | 8392 |
| **Total lease income** | $**14040** | $13303 | $**28180** | $26447 |

---

*(a) Includes rent from Tower Properties Company, a related party, of $0 and $19 thousand for the three month periods ended June 30, 2025 and 2024, respectively, and $0 and $38 thousand for the six month periods ended June 30, 2025 and 2024, respectively. Tower Properties Company was no longer a lessee of the Company as of January 1, 2025.*

**7. Pension**

The amount of net pension cost is shown in the table below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended June 30** | **For the Three Months Ended June 30** | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** |
| *(In thousands)* | **2025** | 2024 | **2025** | 2024 |
| Service cost | $**135** | $96 | $**271** | $193 |
| Interest cost on projected benefit obligation | **1074** | 1113 | **2147** | 2225 |
| Expected return on plan assets | **(980)** | (1019) | **(1960)** | (2038) |
| Amortization of prior service cost | **—** | (46) | **—** | (91) |
| Amortization of unrecognized net loss (gain) | **229** | 282 | **458** | 562 |
| **Net periodic pension cost** | $**458** | $426 | $**916** | $851 |

---

All benefits accrued under the Company's defined benefit pension plan have been frozen since January 1, 2011. During the first six months of 2025, the Company made no funding contributions to its defined benefit pension plan and made minimal funding contributions to a supplemental executive retirement plan (the CERP), which carries no segregated assets.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**8. Common Stock \***

Presented below is a summary of the components used to calculate basic and diluted income per share. The Company applies the two-class method of computing income per share, as nonvested share-based awards that pay nonforfeitable common stock dividends are considered securities which participate in undistributed earnings with common stock. The two-class method requires the calculation of separate income per share amounts for the nonvested share-based awards and for common stock. Income per share attributable to common stock is shown in the table below. Nonvested share-based awards are further discussed in Note 13.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended June 30** | **For the Three Months Ended June 30** | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** |
| *(In thousands, except per share data)* | **2025** | 2024 | **2025** | 2024 |
| **Basic income per common share:** |  |  |  |  |
| Net income attributable to Commerce Bancshares, Inc. | $**152479** | $139553 | $**284071** | $252216 |
| Less income allocated to nonvested restricted stock | **1461** | 1313 | **2720** | 2357 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income allocated to common stock | $**151018** | $138240 | $**281351** | $249859 |
| Weighted average common shares outstanding | **132455** | 134881 | **132685** | 135187 |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic income per common share | $**1.14** | $1.03 | $**2.12** | $1.85 |
| **Diluted income per common share:** |  |  |  |  |
| Net income attributable to Commerce Bancshares, Inc. | $**152479** | $139553 | $**284071** | $252216 |
| Less income allocated to nonvested restricted stock | **1460** | 1312 | **2718** | 2355 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income allocated to common stock | $**151019** | $138241 | $**281353** | $249861 |
| Weighted average common shares outstanding | **132455** | 134881 | **132685** | 135187 |
| &nbsp;&nbsp;Net effect of the assumed exercise of stock-based awards - based on the treasury stock method using the average market price for the respective periods | **128** | 160 | **141** | 156 |
| Weighted average diluted common shares outstanding | **132583** | 135041 | **132826** | 135343 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted income per common share | $**1.14** | $1.03 | $**2.12** | $1.85 |

---

Unexercised stock appreciation rights of 287 thousand and 431 thousand for the three month periods ended June 30, 2025 and 2024, respectively, and 225 thousand and 401 thousand for the six month periods ended June 30, 2025 and 2024, respectively, were excluded from the computation of diluted income per common share because their inclusion would have been anti-dilutive.

*\* All prior year share and per share amounts in this note have been restated for the 5% common stock dividend distributed in December 2024.*

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**9. Accumulated Other Comprehensive Income**

The table below shows the activity and accumulated balances for components of other comprehensive income. Information about unrealized gains and losses on securities can be found in Note 3, and information about unrealized gains and losses on cash flow hedge derivatives is located in Note 11.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | Unrealized Gains (Losses) on Securities (1) | Pension Loss | Unrealized Gains (Losses) on Cash Flow Hedge Derivatives (2) | Total Accumulated Other Comprehensive Income (Loss) |  |  |  |
| *(In thousands)* | Unrealized Gains (Losses) on Securities (1) | Pension Loss | Unrealized Gains (Losses) on Cash Flow Hedge Derivatives (2) | Total Accumulated Other Comprehensive Income (Loss) |  |  |  |
| **Balance January 1, 2025** | $**(742926)** | Pension Loss | Unrealized Gains (Losses) on Cash Flow Hedge Derivatives (2) | Total Accumulated Other Comprehensive Income (Loss) | $**(12059)** | $**(3926)** | $**(758911)** |
| Other comprehensive income (loss) before reclassifications to current earnings | **222002** | **—** | **15381** | **237383** |  |  |  |
| Amounts reclassified to current earnings from accumulated other comprehensive income | **4214** | **458** | **(4905)** | **(233)** |  |  |  |
| Current period other comprehensive income (loss), before tax | **226216** | **458** | **10476** | **237150** |  |  |  |
| Income tax (expense) benefit | **(56554)** | **(115)** | **(2619)** | **(59288)** |  |  |  |
| Current period other comprehensive income (loss), net of tax | **169662** | **343** | **7857** | **177862** |  |  |  |
| **Balance June 30, 2025** | $**(573264)** | $**(11716)** | $**3931** | $**(581049)** |  |  |  |
| **Balance January 1, 2024** | $(915001) | $(13596) | $37185 | $(891412) |  |  |  |
| Other comprehensive income (loss) before reclassifications to current earnings | (41310) |  | (29367) | (70677) |  |  |  |
| Amounts reclassified to current earnings from accumulated other comprehensive income | 187543 | 471 | (5877) | 182137 |  |  |  |
| Current period other comprehensive income (loss), before tax | 146233 | 471 | (35244) | 111460 |  |  |  |
| Income tax (expense) benefit | (36558) | (118) | 8811 | (27865) |  |  |  |
| Current period other comprehensive income (loss), net of tax | 109675 | 353 | (26433) | 83595 |  |  |  |
| **Balance June 30, 2024** | $(805326) | $(13243) | $10752 | $(807817) |  |  |  |

---

*(1) The pre-tax amounts reclassified from accumulated other comprehensive income to current earnings are included in "investment securities gains (losses), net" in the consolidated statements of income.*

*(2) The pre-tax amounts reclassified from accumulated other comprehensive income to current earnings are included in "interest and fees on loans" in the consolidated statements of income.*

**10. Segments**

The Company segregates financial information for use in assessing its performance and allocating resources among three operating segments: Consumer, Commercial and Wealth. The Consumer segment consists of various consumer loan and deposit products offered through its retail branch network of approximately 140 locations. This segment also includes residential mortgage, indirect and other consumer loan financing businesses, along with debit and credit card loan and fee businesses. The Commercial segment provides corporate lending (including the Small Business Banking product line within the branch network), leasing, and international services, along with business and governmental deposit products and commercial cash management services. This segment also includes both merchant and commercial bank card products as well as the Commercial Tradable Products division, which sells fixed income securities, underwrites municipal bonds, and provides securities safekeeping and accounting services to its business and correspondent bank customers. The Wealth segment provides traditional trust and estate planning, advisory and discretionary investment management, and brokerage services. This segment also provides various loan and deposit related services to its private banking customers.

The Company's chief executive officer is its chief operating decision maker ("CODM"). The CODM is the primary individual in control of resource allocation, and the allocation determinations are made in consultation with the Company's executive management committee, of which the CODM is a member. The Company's CODM primarily utilizes net income before taxes to evaluate each segment's performance and allocate resources (including employees, financial, or capital resources), primarily through the Company's annual budgeting process and periodic segment performance reviews. To manage operations and make decisions regarding resource allocations, the CODM is regularly provided and reviews total non-interest expense at a consolidated level and total non-interest expense for each segment.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

The following table presents selected financial information by segment and reconciliations of combined segment totals to consolidated totals. There were no material intersegment revenues between the three segments. Management periodically makes changes to methods of assigning costs and income to its business segments to better reflect operating results. If appropriate, these changes are reflected in prior year information presented below.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>*(In thousands)* | Consumer | Commercial | Wealth | Other/Elimination | Consolidated Totals |
| **Three Months Ended June 30, 2025** |  |  |  |  |  |
| Net interest income | $**126967** | $**127763** | $**23036** | $**2381** | $**280147** |
| Provision for credit losses | **(9569)** | **(108)** | **(18)** | **4098** | **(5597)** |
| Non-interest income | **23704** | **75381** | **63846** | **2682** | **165613** |
| Investment securities gains (losses), net | **—** | **—** | **—** | **437** | **437** |
| Non-interest expense | **(82277)** | **(108813)** | **(40823)** | **(12524)** | **(244437)** |
| Income before income taxes | $**58825** | $**94223** | $**46041** | $**(2926)** | $**196163** |
| **Six Months Ended June 30, 2025** |  |  |  |  |  |
| Net interest income | $**252352** | $**260878** | $**45195** | $**(9176)** | $**549249** |
| Provision for credit losses | **(19819)** | **(640)** | **(18)** | **393** | **(20084)** |
| Non-interest income | **47691** | **144980** | **127885** | **4006** | **324562** |
| Investment securities gains (losses), net | **—** | **—** | **—** | **(7154)** | **(7154)** |
| Non-interest expense | **(166082)** | **(212057)** | **(82102)** | **(22572)** | **(482813)** |
| Income before income taxes | $**114142** | $**193161** | $**90960** | $**(34503)** | $**363760** |
| **Three Months Ended June 30, 2024** |  |  |  |  |  |
| Net interest income | $127217 | $125536 | $22226 | $(12730) | $262249 |
| Provision for loan losses | (9037) | (725) | 3 | 4291 | (5468) |
| Non-interest income | 24572 | 66580 | 59600 | 1492 | 152244 |
| Investment securities gains (losses), net |  |  |  | 3233 | 3233 |
| Non-interest expense | (79996) | (100989) | (38902) | (12327) | (232214) |
| Income before income taxes | $62756 | $90402 | $42927 | $(16041) | $180044 |
| **Six Months Ended June 30, 2024** |  |  |  |  |  |
| Net interest income | $255374 | $252223 | $45424 | $(41773) | $511248 |
| Provision for credit losses | (17925) | (766) | 4 | 8432 | (10255) |
| Non-interest income | 48907 | 130382 | 117999 | 3804 | 301092 |
| Investment securities gains (losses), net |  |  |  | 2974 | 2974 |
| Non-interest expense | (160713) | (201345) | (78453) | (37400) | (477911) |
| Income before income taxes | $125643 | $180494 | $84974 | $(63963) | $327148 |

---

Non-interest expense for the Consumer, Commercial, and Wealth segments above is primarily comprised of salaries, incentives, benefits, and allocated overhead costs for service and support. Non-interest expense for the segments also includes expenses for data processing and software, occupancy, and professional and other services.

The information presented above was derived from the internal profitability reporting system used by management to monitor and manage the financial performance of the Company. This information is based on internal management accounting procedures and methods, which have been developed to reflect the underlying economics of the businesses. The methodologies are applied in connection with funds transfer pricing and assignment of overhead costs among segments. Funds transfer pricing was used in the determination of net interest income by assigning a standard cost (credit) for funds used (provided by) assets and liabilities based on their maturity, prepayment and/or repricing characteristics.

The segment activity, as shown above, includes both direct and allocated items. Amounts in the "Other/Elimination" column include activity not related to the segments, such as that relating to administrative functions, the investment securities portfolio, and the effect of certain expense allocations to the segments. The provision for credit losses in this category contains the difference between net loan charge-offs assigned directly to the segments and the recorded provision for credit loss expense. Included in this category's net interest income are earnings of the investment portfolio, which are not allocated to a segment. Additionally, interest expense on the Company's brokered certificates of deposit is included in this column, as the Company's brokered certificates of deposit are not allocated to a segment.

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The performance measurement of the operating segments is based on the management structure of the Company and is not necessarily comparable with similar information for any other financial institution. The information is also not necessarily indicative of the segments' financial condition and results of operations if they were independent entities.

**11. Derivative Instruments**

The notional amounts of the Company's derivative instruments are shown in the table below. These contractual amounts, along with other terms of the derivative, are used to determine amounts to be exchanged between counterparties and are not a measure of loss exposure. The Company's derivatives are not accounted for as accounting hedges except for the interest rate floors, as discussed below.

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| | | |
|:---|:---|:---|
| <br>*(In thousands)* | **June 30, 2025** | December 31, 2024 |
| &nbsp;&nbsp;&nbsp;Interest rate swaps | $**1953737** | $2065400 |
| &nbsp;&nbsp;&nbsp;Interest rate floors | **2000000** | 2000000 |
| &nbsp;&nbsp;&nbsp;Interest rate caps | **76785** | 37488 |
| &nbsp;&nbsp;&nbsp;Credit risk participation agreements | **540569** | 503196 |
| &nbsp;&nbsp;&nbsp;Foreign exchange contracts | **18913** | 16978 |
| &nbsp;&nbsp; Mortgage loan commitments | **10346** | 3060 |
| &nbsp;&nbsp;&nbsp;Mortgage loan forward sale contracts | **225** | 1759 |
| &nbsp;&nbsp;&nbsp;Forward TBA contracts | **10500** | 3500 |
| **Total notional amount** | $**4611075** | $4631381 |

---

Interest rate swap contracts are sold to commercial customers who wish to modify their interest rate sensitivity. The customers are engaged in a variety of businesses, including real estate, manufacturing, retail product distribution, education, and retirement communities. These interest rate swap contracts with customers are offset by matching interest rate swap contracts purchased by the Company from other financial institutions (dealers). Contracts with dealers that require central clearing are novated to a clearing agency who becomes the Company's counterparty. Because of the matching terms of the offsetting contracts, in addition to collateral provisions which mitigate the impact of non-performance risk, changes in fair value subsequent to initial recognition have a minimal effect on earnings.

Many of the Company's interest rate swap contracts with large financial institutions contain contingent features relating to debt ratings or capitalization levels. Under these provisions, if the Company's debt rating falls below investment grade or if the Company ceases to be "well-capitalized" under risk-based capital guidelines, certain counterparties can require immediate and ongoing collateralization on interest rate swaps in net liability positions or instant settlement of the contracts. The Company maintains debt ratings and capital well above these minimum requirements.

As of June 30, 2025, the Company held four interest rate floors indexed to 1-month SOFR to hedge the risk of declining interest rates on certain floating rate commercial loans. The floors have a combined notional value of $2.0 billion and are forward-starting. Each of the four interest rate floors has a six-year term and a notional amount of $500.0 million. In the event that the index rate falls below zero, the maximum rate that the Company can earn on the notional amount of each floor is limited to the strike rate. Information about the floors is provided in the table below.

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| | | |
|:---|:---|:---|
| Strike Rate | Effective Date | Maturity Date |
| 3.50% | July 1, 2024 | July 1, 2030 |
| 3.25% | November 1, 2024 | November 1, 2030 |
| 3.00% | March 1, 2025 | March 1, 2031 |
| 2.75% | July 1, 2025 | July 1, 2031 |

---

The premium paid for the floors totaled $90.2 million. At June 30, 2025, the maximum length of time over which the Company is hedging its exposure to lower rates is approximately 6.0 years. These interest rate floors qualified and were designated as cash flow hedges and were assessed for effectiveness using regression analysis. The change in the fair value of these interest rate floors is recorded in AOCI, net of the amortization of the premiums paid, which are recorded against interest and fees on loans in the consolidated statements of income. As of June 30, 2025, net deferred losses on the interest rate floors totaled $13.6 million (pre-tax) and were recorded in AOCI in the consolidated balance sheet. As of June 30, 2025, it is expected

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

that $11.6 million (pre-tax) interest rate floor premium amortization will be reclassified from AOCI into earnings over the next 12 months for the outstanding interest rate floors.

During the year ended December 31, 2020, the Company monetized three interest rate floors that were previously classified as cash flow hedges with a combined notional balance of $1.5 billion and an asset fair value of $163.2 million. As of June 30, 2025, the total realized gains on the monetized cash flow hedges remaining in AOCI was $18.9 million (pre-tax), which will be reclassified into interest income over the next 1.5 years. The estimated amount of net gains related to the cash flow hedges remaining in AOCI at June 30, 2025 that is expected to be reclassified into income within the next 12 months is $16.0 million.

The Company also contracts with other financial institutions, as a guarantor or beneficiary, to share credit risk associated with certain interest rate swaps through risk participation agreements. The Company's risks and responsibilities as guarantor are further discussed in Note 5 on Guarantees. In addition, the Company enters into foreign exchange contracts, which are mainly comprised of contracts with customers to purchase or deliver specific foreign currencies at specific future dates.

Under its program to sell residential mortgage loans in the secondary market, the Company designates certain newly-originated residential mortgage loans as held for sale. Derivative instruments arising from this activity include mortgage loan commitments and forward loan sale contracts. Changes in the fair values of the loan commitments and funded loans prior to sale that are due to changes in interest rates are economically hedged with forward contracts to sell residential mortgage-backed securities in the to-be-announced (TBA) market. These forward TBA contracts are also considered to be derivatives and are settled in cash at the security settlement date.

The fair values of the Company's derivative instruments, whose notional amounts are listed above, are shown in the table below. Information about the valuation methods used to determine fair value is provided in Note 15 on Fair Value Measurements.

The Company's policy is to present its derivative assets and derivative liabilities on a gross basis on its consolidated balance sheets, and these are reported in other assets and other liabilities. In prior years, certain collateral posted to and from the Company's clearing counterparty has been applied to the fair values of the cleared swap. There was no reduction to positive or negative fair values of cleared swaps at June 30, 2025 and December 31, 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Asset Derivatives | Asset Derivatives | Liability Derivatives | Liability Derivatives |
| | **June 30, 2025** | Dec. 31, 2024 | **June 30, 2025** | Dec. 31, 2024 |
| *(In thousands****)&nbsp;&nbsp;&nbsp;&nbsp;*** | &nbsp;&nbsp;&nbsp;&nbsp;Fair Value | &nbsp;&nbsp;&nbsp;&nbsp;Fair Value | &nbsp;&nbsp;&nbsp;&nbsp;Fair Value | &nbsp;&nbsp;&nbsp;&nbsp;Fair Value |
| Derivatives designated as hedging instruments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rate floors | $**50925** | $35544 | $**—** | $— |
| **Total derivatives designated as hedging instruments** | $**50925** | $35544 | $**—** | $— |
| Derivative instruments not designated as hedging instruments: | Derivative instruments not designated as hedging instruments: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rate swaps | $**22450** | $26759 | $**(22450)** | $(26759) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rate caps | **10** | 44 | **(10)** | (44) |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit risk participation agreements | **86** | 35 | **(127)** | (58) |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange contracts | **494** | 179 | **(632)** | (101) |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage loan commitments | **254** | 58 | **—** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage loan forward sale contracts | **3** | 14 | **—** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Forward TBA contracts | **—** | 15 | **(58)** | (1) |
| **Total derivatives not designated as hedging instruments** | $**23297** | $27104 | $**(23277)** | $(26963) |
| **Total** | $**74222** | $62648 | $**(23277)** | $(26963) |

---

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

The Company made an election to exclude the initial premiums paid on the interest rate floors from the hedge effectiveness measurement. Those initial premiums are amortized over the periods between the premium payment month and the contract maturity month. The pre-tax effects of the gains and losses (both the included and excluded amounts for hedge effectiveness assessment) recognized in the other comprehensive income from the cash flow hedging instruments and the amounts reclassified from accumulated other comprehensive income into income (both included and excluded amounts for hedge effectiveness measurement) are shown in the table below.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Amount of Gain or (Loss) Recognized in OCI | Amount of Gain or (Loss) Recognized in OCI | Amount of Gain or (Loss) Recognized in OCI | Location of Gain (Loss) Reclassified from AOCI into Income | Amount of Gain (Loss) Reclassified from AOCI into Income | Amount of Gain (Loss) Reclassified from AOCI into Income | Amount of Gain (Loss) Reclassified from AOCI into Income |
| *(In thousands)* | Total | Included Component | Excluded Component |  | Total | Included Component | Excluded Component |
| **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** |
| Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: |
| &nbsp;&nbsp;&nbsp;Interest rate floors | $**5015** | $**5387** | $**(372)** | &nbsp;&nbsp;&nbsp;Interest and fees on loans | $**2372** | $**6582** | $**(4210)** |
| **Total** | $**5015** | $**5387** | $**(372)** | **Total** | $**2372** | $**6582** | $**(4210)** |
| **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** |
| Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: |
| &nbsp;&nbsp;&nbsp;Interest rate floors | $**15381** | $**6034** | $**9347** | &nbsp;&nbsp;&nbsp;Interest and fees on loans | $**4905** | $**13279** | $**(8374)** |
| **Total** | $**15381** | $**6034** | $**9347** | **Total** | $**4905** | $**13279** | $**(8374)** |
| **For the Three Months Ended June 30, 2024** | **For the Three Months Ended June 30, 2024** | **For the Three Months Ended June 30, 2024** | **For the Three Months Ended June 30, 2024** | **For the Three Months Ended June 30, 2024** | **For the Three Months Ended June 30, 2024** | **For the Three Months Ended June 30, 2024** | **For the Three Months Ended June 30, 2024** |
| Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: |
| &nbsp;&nbsp;&nbsp;Interest rate floors | $(6502) | $(131) | $(6371) | &nbsp;&nbsp;&nbsp;Interest and fees on loans | $2888 | $7098 | $(4210) |
| **Total** | $(6502) | $(131) | $(6371) | **Total** | $2888 | $7098 | $(4210) |
| **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** |
| Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: | Derivatives in cash flow hedging relationships: |
| &nbsp;&nbsp;&nbsp;Interest rate floors | $(29367) | $(10108) | $(19259) | &nbsp;&nbsp;&nbsp;Interest and fees on loans | $5877 | $14297 | $(8420) |
| **Total** | $(29367) | $(10108) | $(19259) | **Total** | $5877 | $14297 | $(8420) |

---

The gain and loss recognized through various derivative instruments on the consolidated statements of income are shown in the table below.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Location of Gain or (Loss) Recognized in Consolidated Statements of Income | Amount of Gain or (Loss) Recognized in Income on Derivatives | Amount of Gain or (Loss) Recognized in Income on Derivatives | Amount of Gain or (Loss) Recognized in Income on Derivatives | Amount of Gain or (Loss) Recognized in Income on Derivatives |
|  | | **For the Three Months Ended June 30** | **For the Three Months Ended June 30** | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** |
| *(In thousands)* |  | **2025** | 2024 | **2025** | 2024 |
| Derivative instruments: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rate swaps | Other non-interest income | $**642** | $1197 | $**747** | $1323 |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit risk participation agreements | Other non-interest income | **186** | (240) | **178** | (214) |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange contracts | Other non-interest income | **(184)** | (17) | **(216)** | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage loan commitments | Loan fees and sales | **151** | 38 | **195** | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage loan forward sale contracts | Loan fees and sales | **(1)** | 8 | **(11)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Forward TBA contracts | Loan fees and sales | **(35)** | 8 | **(100)** | 14 |
| **Total** |  | $**759** | $994 | $**793** | $1197 |

---

The following table shows the extent to which assets and liabilities relating to derivative instruments have been offset in the consolidated balance sheets. It also provides information about these instruments which are subject to an enforceable master netting arrangement, irrespective of whether they are offset, and the extent to which the instruments could potentially be offset. Also shown is collateral received or pledged in the form of other financial instruments, which is generally cash or marketable securities. The collateral amounts in this table are limited to the outstanding balances of the related asset or liability (after netting is applied); thus, amounts of excess collateral are not shown. Most of the derivatives in the following table were transacted under master netting arrangements that contain a conditional right of offset, such as close-out netting, upon default.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

While the Company is party to master netting arrangements with most of its swap derivative counterparties, the Company does not offset derivative assets and liabilities under these agreements on its consolidated balance sheets. Collateral exchanged between the Company and dealer bank counterparties is generally subject to thresholds and transfer minimums, and usually consists of marketable securities. By contract, these may be sold or re-pledged by the secured party until recalled at a subsequent valuation date by the pledging party. For those swap transactions requiring central clearing, the Company posts cash or securities to its clearing agent. Collateral positions are valued daily, and adjustments to amounts received and pledged by the Company are made as appropriate to maintain proper collateralization for these transactions. Swap derivative transactions with customers are generally secured by rights to non-financial collateral, such as real and personal property, which is not shown in the table below.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | | | Gross Amounts Not Offset in the Balance Sheet | Gross Amounts Not Offset in the Balance Sheet | |
| *(In thousands)* | Gross Amount Recognized | Gross Amounts Offset in the Balance Sheet | Net Amounts Presented in the Balance Sheet | Financial Instruments Available for Offset | Collateral<br>Received/<br>Pledged | Net Amount |
| **June 30, 2025** |  |  |  |  |  |  |
| **Assets:** |  |  |  |  |  |  |
| Derivatives subject to master netting agreements | $**73832** | $**—** | $**73832** | $**(11277)** | $**(49871)** | $**12684** |
| Derivatives not subject to master netting agreements | **390** | **—** | **390** |  |  |  |
| Total derivatives | $**74222** | $**—** | $**74222** |  |  |  |
| **Liabilities:** |  |  |  |  |  |  |
| Derivatives subject to master netting agreements | $**22797** | $**—** | $**22797** | $**(11277)** | $**—** | $**11520** |
| Derivatives not subject to master netting agreements | **480** | **—** | **480** |  |  |  |
| Total derivatives | $**23277** | $**—** | $**23277** |  |  |  |
| **December 31, 2024** |  |  |  |  |  |  |
| **Assets:** |  |  |  |  |  |  |
| Derivatives subject to master netting agreements | $62437 | $— | $62437 | $(3780) | $(54620) | $4037 |
| Derivatives not subject to master netting agreements | 211 |  | 211 |  |  |  |
| Total derivatives | $62648 | $— | $62648 |  |  |  |
| **Liabilities:** |  |  |  |  |  |  |
| Derivatives subject to master netting agreements | $26848 | $— | $26848 | $(3780) | $— | $23068 |
| Derivatives not subject to master netting agreements | 115 |  | 115 |  |  |  |
| Total derivatives | $26963 | $— | $26963 |  |  |  |

---

**12. Resale and Repurchase Agreements**

The Company regularly enters into resale and repurchase agreement transactions with other financial institutions and with its own customers. Resale and repurchase agreements are agreements to purchase/sell securities subject to an obligation to resell/repurchase the same or similar securities. They are accounted for as secured lending and collateralized borrowing (e.g. financing transactions), not as true sales and purchases of the underlying collateral securities. Some of the resale and repurchase agreements were transacted under master netting arrangements that contain a conditional right of offset, such as close-out netting, upon default. The security collateral accepted or pledged in resale and repurchase agreements with other financial institutions may be sold or re-pledged by the secured party, but is usually delivered to and held by third party trustees. The Company generally retains custody of securities pledged for repurchase agreements with its customers.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

The following table shows the extent to which resale agreement assets and repurchase agreement liabilities with the same counterparty have been offset on the consolidated balance sheets, in addition to the extent to which they could potentially be offset. Also shown is collateral received or pledged, which consists of marketable securities. The collateral amounts in the table are limited to the outstanding balances of the related asset or liability (after offsetting is applied); thus amounts of excess collateral are not shown.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | | | Gross Amounts Not Offset in the Balance Sheet | Gross Amounts Not Offset in the Balance Sheet | |
| *(In thousands)* | Gross Amount Recognized | Gross Amounts Offset in the Balance Sheet | Net Amounts Presented in the Balance Sheet | Financial Instruments Available for Offset | Securities Collateral Received/Pledged | Unsecured Amount |
| **June 30, 2025** |  |  |  |  |  |  |
| Total resale agreements, subject to master netting arrangements | $**850000** | $**—** | $**850000** | $**—** | $**(850000)** | $**—** |
| Total repurchase agreements, subject to master netting arrangements | **2470486** | **—** | **2470486** | **—** | **(2470486)** | **—** |
| **December 31, 2024** |  |  |  |  |  |  |
| Total resale agreements, subject to master netting arrangements | $625000 | $— | $625000 | $— | $(625000) | $— |
| Total repurchase agreements, subject to master netting arrangements | 2803043 |  | 2803043 |  | (2803043) |  |

---

The table below shows the remaining contractual maturities of repurchase agreements outstanding at June 30, 2025 and December 31, 2024, in addition to the various types of marketable securities that have been pledged by the Company as collateral for these borrowings.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Remaining Contractual Maturity of the Agreements | Remaining Contractual Maturity of the Agreements | Remaining Contractual Maturity of the Agreements | |
| *(In thousands)* | Overnight and continuous | Up to 90 days | Greater than 90 days | Total |
| **June 30, 2025** |  |  |  |  |
| Repurchase agreements, secured by: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. government and federal agency obligations | $**277127** | $**—** | $**—** | $**277127** |
| &nbsp;&nbsp;&nbsp;&nbsp;Government-sponsored enterprise obligations | **10520** | **—** | **—** | **10520** |
| &nbsp;&nbsp;&nbsp;&nbsp;Agency mortgage-backed securities | **1548484** | **7100** | **27250** | **1582834** |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-agency mortgage-backed securities | **33628** | **—** | **—** | **33628** |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset-backed securities | **456838** | **21080** | **28733** | **506651** |
| &nbsp;&nbsp;&nbsp;&nbsp;Other debt securities | **59726** | **—** | **—** | **59726** |
| **Total repurchase agreements, gross amount recognized** | $**2386323** | $**28180** | $**55983** | $**2470486** |
| **December 31, 2024** |  |  |  |  |
| Repurchase agreements, secured by: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. government and federal agency obligations | $518937 | $— | $— | $518937 |
| &nbsp;&nbsp;&nbsp;&nbsp;Government-sponsored enterprise obligations | 9969 |  |  | 9969 |
| &nbsp;&nbsp;&nbsp;&nbsp;Agency mortgage-backed securities | 1641156 | 9600 | 22250 | 1673006 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-agency mortgage-backed securities | 24273 |  |  | 24273 |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset-backed securities | 462841 | 30623 | 18227 | 511691 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other debt securities | 65167 |  |  | 65167 |
| **Total repurchase agreements, gross amount recognized** | $2722343 | $40223 | $40477 | $2803043 |

---

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**13. Stock-Based Compensation**

The Company issues stock-based compensation in the form of nonvested restricted stock and stock appreciation rights (SARs). Historically, most of the awards have been issued during the first quarter of each year. The stock-based compensation expense charged against income was $4.1 million and $4.2 million in the three months ended June 30, 2025 and 2024 respectively, and $8.5 million in the six months ended both June 30, 2025 and 2024, respectively.

Nonvested stock awards granted generally vest in 4 to 7 years and contain restrictions as to transferability, sale, pledging, or assigning, among others, prior to the end of the vesting period. Dividend and voting rights are conferred upon grant. A summary of the status of the Company's nonvested share awards as of June 30, 2025, and changes during the six month period then ended, is presented below.

---

| | | |
|:---|:---|:---|
|  | Shares | Weighted Average Grant Date Fair Value |
| **Nonvested at January 1, 2025** | 1252653 | $55.41 |
| Granted | 287040 | 65.29 |
| Vested | (241921) | 55.05 |
| Forfeited | (28060) | 57.18 |
| **Nonvested at June 30, 2025** | 1269712 | $57.68 |

---

SARs are granted with exercise prices equal to the market price of the Company's stock at the date of grant. SARs vest ratably over 4 years of continuous service and have contractual terms of 10 years. All SARs must be settled in stock under provisions of the plan. In determining compensation cost, the Black-Scholes option-pricing model is used to estimate the fair value of SARs on date of grant. The current year per share average fair value and the model assumptions are shown in the table below.

---

| | |
|:---|:---|
| Weighted per share average fair value at grant date | $19.72 |
| Assumptions: |  |
| &nbsp;&nbsp;Dividend yield | 1.7% |
| &nbsp;&nbsp;Volatility | 29.6% |
| &nbsp;&nbsp;Risk-free interest rate | 4.1% |
| &nbsp;&nbsp;Expected term | 6.0 years |

---

A summary of SAR activity during the first six months of 2025 is presented below.

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>*(Dollars in thousands, except per share data)* | Rights | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value |
| **Outstanding at January 1, 2025** | 841962 | $48.90 |  |  |
| Granted | 38770 | 64.93 |  |  |
| Forfeited | (2200) | 54.70 |  |  |
| Expired | (1518) | 54.82 |  |  |
| Exercised | (54848) | 39.13 |  |  |
| **Outstanding at June 30, 2025** | 822166 | $50.28 | 5.2 years | $9881 |

---

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**14. Revenue from Contracts with Customers**

Revenue from contracts with customers, Accounting Standard Codification 606 ("ASC 606"), requires revenue recognition for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For the six months ended June 30, 2025, approximately 63% of the Company's total revenue was comprised of net interest income, which is not within the scope of this guidance. Of the remaining revenue, those items that were subject to this guidance mainly included fees for bank card, trust, deposit account services and consumer brokerage services.

The following table disaggregates revenue from contracts with customers by major product line.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30** | **Three Months Ended June 30** | **Six Months Ended June 30** | **Six Months Ended June 30** |
| *(In thousands)* | **2025** | 2024 | **2025** | 2024 |
| Trust fees | $**55571** | $52291 | $**112163** | $103396 |
| Bank card transaction fees | **46362** | 47477 | **91955** | 94407 |
| Deposit account charges and other fees | **26248** | 25325 | **52870** | 49476 |
| Consumer brokerage services | **5383** | 4478 | **10168** | 8886 |
| Other non-interest income | **18817** | 12325 | **33208** | 22841 |
| Total non-interest income from contracts with customers | **152381** | 141896 | **300364** | 279006 |
| Other non-interest income <sup>(1)</sup> | **13232** | 10348 | **24198** | 22086 |
| **Total non-interest income** | $**165613** | $152244 | $**324562** | $301092 |

---

*(1) This revenue is not within the scope of ASC 606, and includes fees relating to bond trading activities, loan fees and sales, derivative instruments, standby letters of credit and various other transactions.*

For bank card transaction fees, nearly all of debit and credit card fees are earned in the Consumer segment, while corporate card and merchant fees are earned in the Commercial segment. The Consumer and Commercial segments contributed approximately 28% and 72%, respectively, of the Company's deposit account charge revenue. All trust fees and nearly all consumer brokerage services income were earned in the Wealth segment.&nbsp;&nbsp;&nbsp;&nbsp;

The following table presents the opening and closing receivable balances for the six month periods ended June 30, 2025 and 2024 for the Company's significant revenue from contracts with customers.

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(In thousands)* | **June 30, 2025** | December 31, 2024 | June 30, 2024 | December 31, 2023 |
| Bank card transaction fees | $**14296** | $17754 | $15824 | $18069 |
| Trust fees | **1937** | 2165 | 2174 | 1764 |
| Deposit account charges and other fees | **8039** | 7897 | 7366 | 6588 |
| Consumer brokerage services | **—** |  |  | 8 |

---

For these revenue categories, none of the transaction price has been allocated to performance obligations that are unsatisfied as of the end of a reporting period.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**15. Fair Value Measurements** 

The Company uses fair value measurements to record fair value adjustments to certain financial and nonfinancial assets and liabilities and to determine fair value disclosures. Various financial instruments such as available for sale debt securities, equity securities, trading debt securities, certain investments relating to private equity activities, and derivatives are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets and liabilities on a nonrecurring basis, such as mortgage servicing rights and certain other investment securities. These nonrecurring fair value adjustments typically involve lower of cost or fair value accounting or write-downs of individual assets.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Company uses various valuation techniques and assumptions when estimating fair value. For accounting disclosure purposes, a three-level valuation hierarchy of fair value measurements has been established. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 1 – inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and inputs that are observable for the assets or liabilities, either directly or indirectly (such as interest rates, yield curves, and prepayment speeds).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value. These may be internally developed, using the Company's best information and assumptions that a market participant would consider.

The valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis are described in the Fair Value Measurements note in the Company's 2024 Annual Report on Form 10-K. There have been no significant changes in these methodologies since then.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Instruments Measured at Fair Value on a Recurring Basis**

The table below presents the June 30, 2025 and December 31, 2024 carrying values of assets and liabilities measured at fair value on a recurring basis. There were no transfers among levels during the first six months of 2025 or the year ended December 31, 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | Fair Value Measurements Using | Fair Value Measurements Using | Fair Value Measurements Using |
| *(In thousands)* | Total Fair Value | Quoted Prices in Active Markets for Identical Assets <br>(Level 1) | Significant Other Observable Inputs <br>(Level 2) | Significant Unobservable Inputs <br>(Level 3) |
| **June 30, 2025** |  |  |  |  |
| **Assets:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage loans held for sale | $**3488** | $**—** | $**3488** | $**—** |
| &nbsp;&nbsp;&nbsp;&nbsp;Available for sale debt securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; U.S. government and federal agency obligations | **2597737** | **2597737** | **—** | **—** |
| &nbsp;&nbsp;&nbsp;&nbsp; Government-sponsored enterprise obligations | **44148** | **—** | **44148** | **—** |
| &nbsp;&nbsp;&nbsp;&nbsp; State and municipal obligations | **714958** | **—** | **714008** | **950** |
| &nbsp;&nbsp;&nbsp;&nbsp; Agency mortgage-backed securities | **3356039** | **—** | **3356039** | **—** |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-agency mortgage-backed securities | **499996** | **—** | **499996** | **—** |
| &nbsp;&nbsp;&nbsp;&nbsp; Asset-backed securities | **1496323** | **—** | **1496323** | **—** |
| &nbsp;&nbsp;&nbsp;&nbsp; Other debt securities | **206578** | **—** | **206578** | **—** |
| &nbsp;&nbsp;&nbsp;&nbsp;Trading debt securities | **46630** | **12941** | **33689** | **—** |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity securities | **45098** | **45098** | **—** | **—** |
| &nbsp;&nbsp;&nbsp;&nbsp;Private equity investments | **174070** | **—** | **—** | **174070** |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivatives \* | **74222** | **—** | **73882** | **340** |
| &nbsp;&nbsp;&nbsp;&nbsp;Assets held in trust for deferred compensation plan | **22456** | **22456** | **—** | **—** |
| **Total assets** | **9281743** | **2678232** | **6428151** | **175360** |
| **Liabilities:** |  |  |  |  |
| Derivatives \* | **23277** | **—** | **23150** | **127** |
| &nbsp;&nbsp;Liabilities held in trust for deferred compensation plan | **22456** | **22456** | **—** | **—** |
| **Total liabilities** | $**45733** | $**22456** | $**23150** | $**127** |
| **December 31, 2024** |  |  |  |  |
| **Assets:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage loans held for sale | $2981 | $— | $2981 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Available for sale debt securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; U.S. government and federal agency obligations | 2555252 | 2555252 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Government-sponsored enterprise obligations | 42849 |  | 42849 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; State and municipal obligations | 742891 |  | 741927 | 964 |
| &nbsp;&nbsp;&nbsp;&nbsp; Agency mortgage-backed securities | 3444891 |  | 3444891 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-agency mortgage-backed securities | 568689 |  | 568689 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Asset-backed securities | 1557015 |  | 1557015 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Other debt securities | 225266 |  | 225266 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Trading debt securities | 38034 | 10219 | 27815 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity securities | 48359 | 48359 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Private equity investments | 184386 |  |  | 184386 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivatives \* | 62648 |  | 62555 | 93 |
| &nbsp;&nbsp;&nbsp;&nbsp;Assets held in trust for deferred compensation plan | 21849 | 21849 |  |  |
| **Total assets** | 9495110 | 2635679 | 6673988 | 185443 |
| **Liabilities:** |  |  |  |  |
| Derivatives \* | 26963 |  | 26905 | 58 |
| &nbsp;&nbsp;Liabilities held in trust for deferred compensation plan | 21849 | 21849 |  |  |
| **Total liabilities** | $48812 | $21849 | $26905 | $58 |

---

*\* The fair value of each class of derivative is shown in Note 11.*

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

The changes in the Company's Level 3 assets and liabilities measured at fair value on a recurring basis are summarized as follows:

---

| | | | |
|:---|:---|:---|:---|
| | Fair Value Measurements Using<br>Significant Unobservable Inputs<br>(Level 3) | Fair Value Measurements Using<br>Significant Unobservable Inputs<br>(Level 3) | Fair Value Measurements Using<br>Significant Unobservable Inputs<br>(Level 3) |
| <br>*(In thousands)* | State and Municipal Obligations | Private Equity<br>Investments | Total |
| **For the three months ended June 30, 2025** |  |  |  |
| Balance March 31, 2025 | $**947** | $**175618** | $**176565** |
| Total gains (losses) realized/unrealized: |  |  |  |
| &nbsp;&nbsp;Included in earnings | **—** | **4414** | **4414** |
| &nbsp;&nbsp;Included in other comprehensive income \* | **2** | **—** | **2** |
| Discount accretion | **1** | **—** | **1** |
| Purchases of private equity investments | **—** | **728** | **728** |
| Sale/pay down of private equity investments | **—** | **(6707)** | **(6707)** |
| Capitalized interest/dividends | **—** | **17** | **17** |
| Balance June 30, 2025 | $**950** | $**174070** | $**175020** |
| Total gains (losses) for the three months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2025 | $**—** | $**4414** | $**4414** |
| \*Total gains (losses) for the three months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2025 | $**2** | $**—** | $**2** |
| **For the six months ended June 30, 2025** |  |  |  |
| Balance January 1, 2025 | $**964** | $**184386** | $**185350** |
| Total gains (losses) realized/unrealized: |  |  |  |
| &nbsp;&nbsp;Included in earnings | **—** | **(4111)** | **(4111)** |
| &nbsp;&nbsp;Included in other comprehensive income \* | **(16)** | **—** | **(16)** |
| Discount accretion | **2** | **—** | **2** |
| Purchases of private equity investments | **—** | **6426** | **6426** |
| Sale/pay down of private equity investments | **—** | **(12665)** | **(12665)** |
| Capitalized interest/dividends | **—** | **34** | **34** |
| Balance June 30, 2025 | $**950** | $**174070** | $**175020** |
| &nbsp;&nbsp;Total gains (losses) for the six months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2025 | $**—** | $**(3312)** | $**(3312)** |
| &nbsp;&nbsp;\*Total gains (losses) for the six months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2025 | $**(16)** | $**—** | $**(16)** |

---

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

---

| | | | |
|:---|:---|:---|:---|
| | Fair Value Measurements Using<br>Significant Unobservable Inputs<br>(Level 3) | Fair Value Measurements Using<br>Significant Unobservable Inputs<br>(Level 3) | Fair Value Measurements Using<br>Significant Unobservable Inputs<br>(Level 3) |
| <br>*(In thousands)* | State and Municipal Obligations | Private Equity<br>Investments | Total |
| **For the three months ended June 30, 2024** |  |  |  |
| Balance March 31, 2024 | $956 | $183706 | $184662 |
| Total gains (losses) realized/unrealized: |  |  |  |
| &nbsp;&nbsp;Included in earnings |  | 5677 | 5677 |
| &nbsp;&nbsp;Included in other comprehensive income \* | (4) |  | (4) |
| Discount accretion | 1 |  | 1 |
| Purchases of private equity investments |  | 1470 | 1470 |
| Sale/pay down of private equity investments |  | (12564) | (12564) |
| Capitalized interest/dividends |  | 32 | 32 |
| Balance at June 30, 2024 | $953 | $178321 | $179274 |
| Total gains (losses) for the three months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2024 | $— | $5677 | $5677 |
| \*Total gains (losses) for the three months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2024 | $(4) | $— | $(4) |
| **For the six months ended June 30, 2024** |  |  |  |
| Balance January 1, 2024 | $947 | $176667 | $177614 |
| Total gains (losses) realized/unrealized: |  |  |  |
| &nbsp;&nbsp;Included in earnings |  | 12777 | 12777 |
| &nbsp;&nbsp;Included in other comprehensive income \* | 5 |  | 5 |
| Discount accretion | 1 |  | 1 |
| Purchases of private equity investments |  | 10947 | 10947 |
| Sale/pay down of private equity investments |  | (21964) | (21964) |
| Capitalized interest/dividends |  | (106) | (106) |
| Balance at June 30, 2024 | $953 | $178321 | $179274 |
| &nbsp;&nbsp;Total gains (losses) for the six months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2024 | $— | $11002 | $11002 |
| &nbsp;&nbsp;\*Total gains (losses) for the six months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2024 | $5 | $— | $5 |

---

*\* Included in "net unrealized gains (losses) on available for sale debt securities" in the consolidated statements of comprehensive income.*

Gains and losses included in earnings for the Company's Level 3 assets and liabilities in the previous table are reported in the following line items in the consolidated statements of income:

---

| | |
|:---|:---|
| *(In thousands)* | Investment Securities Gains (Losses), Net |
| **For the three months ended June 30, 2025** |  |
| Total gains or losses included in earnings | $**4414** |
| Change in unrealized gains or losses relating to assets still held at June 30, 2025 | $**4414** |
| **For the six months ended June 30, 2025** |  |
| Total gains or losses included in earnings | $**(4111)** |
| Change in unrealized gains or losses relating to assets still held at June 30, 2025 | $**(3312)** |
| **For the three months ended June 30, 2024** |  |
| Total gains or losses included in earnings | $5677 |
| Change in unrealized gains or losses relating to assets still held at June 30, 2024 | $5677 |
| **For the six months ended June 30, 2024** |  |
| Total gains or losses included in earnings | $12777 |
| Change in unrealized gains or losses relating to assets still held at June 30, 2024 | $11002 |

---

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

*Level 3 Inputs*

The Company's Level 3 measurements at June 30, 2025, which employ unobservable inputs that are readily quantifiable, pertain to investments in portfolio concerns held by the Company's private equity subsidiaries. Information about these inputs is presented in the table below.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <u>Quantitative Information about Level 3 Fair Value Measurements</u> | <u>Quantitative Information about Level 3 Fair Value Measurements</u> | <u>Quantitative Information about Level 3 Fair Value Measurements</u> | <u>Quantitative Information about Level 3 Fair Value Measurements</u> |  | Weighted |
|  | Valuation Technique | Unobservable Input | Range | Range | Average\* |
| Private equity investments | Market comparable companies | EBITDA multiple | 3.8 | 6.0 | 5.0 |

---

*\* Unobservable inputs were weighted by the relative fair value of the instruments.*

**Instruments Measured at Fair Value on a Nonrecurring Basis**

For assets measured at fair value on a nonrecurring basis during the first six months of 2025 and 2024, and still held as of June 30, 2025 and 2024, the following table provides the adjustments to fair value recognized during the respective periods, the level of valuation inputs used to determine each adjustment, and the carrying value of the related individual assets or portfolios at June 30, 2025 and 2024.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | Fair Value Measurements Using | Fair Value Measurements Using | Fair Value Measurements Using | |
| *(In thousands)* | <br>Fair Value | Quoted Prices in Active Markets for Identical Assets <br>(Level 1) | Significant Other Observable Inputs <br>(Level 2) | Significant Unobservable Inputs<br>(Level 3) | Total Gains (Losses) Recognized During the Six Months Ended June 30 |
| **June 30, 2025** |  |  |  |  |  |
| Collateral dependent loans | $**251** | $**—** | $**—** | $**251** | $**(147)** |
| **June 30, 2024** |  |  |  |  |  |
| Collateral dependent loans | $15081 | $— | $— | $15081 | $(2850) |
| Equity securities | 58376 |  | 57185 | 1191 | 58241 |

---

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**16. Fair Value of Financial Instruments** 

The carrying amounts and estimated fair values of financial instruments held by the Company are set forth below. Fair value estimates are made at a specific point in time based on relevant market information. They do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for many of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, risk characteristics and economic conditions. These estimates are subjective, involve uncertainties, and cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The estimated fair values of the Company's financial instruments and the classification of their fair value measurement within the valuation hierarchy are as follows at June 30, 2025 and December 31, 2024:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | Carrying Amount | **Estimated Fair Value at June 30, 2025** | **Estimated Fair Value at June 30, 2025** | **Estimated Fair Value at June 30, 2025** | **Estimated Fair Value at June 30, 2025** |
| <br>*(In thousands)* | Carrying Amount | Level 1 | Level 2 | Level 3 | Total |
| **Financial Assets** |  |  |  |  |  |
| Loans: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Business | $**6328684** | $**—** | $**—** | $**6254565** | $**6254565** |
| &nbsp;&nbsp;Real estate - construction and land | **1405398** | **—** | **—** | **1381719** | **1381719** |
| &nbsp;&nbsp;Real estate - business | **3757778** | **—** | **—** | **3697770** | **3697770** |
| &nbsp;&nbsp;Real estate - personal | **3058845** | **—** | **—** | **2762320** | **2762320** |
| &nbsp;&nbsp;Consumer | **2157867** | **—** | **—** | **2142476** | **2142476** |
| &nbsp;&nbsp;&nbsp;Revolving home equity | **364429** | **—** | **—** | **361334** | **361334** |
| &nbsp;&nbsp;&nbsp;Consumer credit card | **576151** | **—** | **—** | **520865** | **520865** |
| &nbsp;&nbsp;Overdrafts | **16316** | **—** | **—** | **16180** | **16180** |
| Total loans | **17665468** | **—** | **—** | **17137229** | **17137229** |
| Loans held for sale | **3592** | **—** | **3592** | **—** | **3592** |
| Investment securities | **9227413** | **2655776** | **6350781** | **220856** | **9227413** |
| Securities purchased under agreements to resell | **850000** | **—** | **—** | **876442** | **876442** |
| Interest earning deposits with banks | **2624264** | **2624264** | **—** | **—** | **2624264** |
| Cash and due from banks | **522049** | **522049** | **—** | **—** | **522049** |
| Derivative instruments | **74222** | **—** | **73882** | **340** | **74222** |
| Assets held in trust for deferred compensation plan | **22456** | **22456** | **—** | **—** | **22456** |
| **&nbsp;&nbsp;&nbsp;&nbsp; Total** | $**30989464** | $**5824545** | $**6428255** | $**18234867** | $**30487667** |
| **Financial Liabilities** |  |  |  |  |  |
| Non-interest bearing deposits | $**7393559** | $**7393559** | $**—** | $**—** | $**7393559** |
| Savings, interest checking and money market deposits | **15727549** | **15727549** | **—** |  | **15727549** |
| Certificates of deposit | **2372920** | **—** | **—** | **2399532** | **2399532** |
| Federal funds purchased | **125975** | **125975** | **—** |  | **125975** |
| Securities sold under agreements to repurchase | **2470486** | **—** | **—** | **2473298** | **2473298** |
| Other borrowings | **14975** | **359** | **14616** | **—** | **14975** |
| Derivative instruments | **23277** | **—** | **23150** | **127** | **23277** |
| Liabilities held in trust for deferred compensation plan | **22456** | **22456** | **—** |  | **22456** |
| **&nbsp;&nbsp;&nbsp;&nbsp; Total** | $**28151197** | $**23269898** | $**37766** | $**4872957** | $**28180621** |

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | Carrying Amount | **Estimated Fair Value at December 31, 2024** | **Estimated Fair Value at December 31, 2024** | **Estimated Fair Value at December 31, 2024** | **Estimated Fair Value at December 31, 2024** |
| <br>*(In thousands)* | Carrying Amount | Level 1 | Level 2 | Level 3 | Total |
| **Financial Assets** |  |  |  |  |  |
| Loans: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Business | $6053820 | $— | $— | $5943565 | $5943565 |
| &nbsp;&nbsp;Real estate - construction and land | 1409901 |  |  | 1384029 | 1384029 |
| &nbsp;&nbsp;Real estate - business | 3661218 |  |  | 3558862 | 3558862 |
| &nbsp;&nbsp;Real estate - personal | 3058195 |  |  | 2738880 | 2738880 |
| &nbsp;&nbsp;Consumer | 2073123 |  |  | 2053191 | 2053191 |
| &nbsp;&nbsp;&nbsp;Revolving home equity | 356650 |  |  | 353731 | 353731 |
| &nbsp;&nbsp;&nbsp;Consumer credit card | 595930 |  |  | 549874 | 549874 |
| &nbsp;&nbsp;Overdrafts | 11266 |  |  | 11120 | 11120 |
| Total loans | 17220103 |  |  | 16593252 | 16593252 |
| Loans held for sale | 3242 |  | 3242 |  | 3242 |
| Investment securities | 9453297 | 2613830 | 6608452 | 231015 | 9453297 |
| Federal funds sold | 3000 | 3000 |  |  | 3000 |
| Securities purchased under agreements to resell | 625000 |  |  | 622021 | 622021 |
| Interest earning deposits with banks | 2624553 | 2624553 |  |  | 2624553 |
| Cash and due from banks | 748357 | 748357 |  |  | 748357 |
| Derivative instruments | 62648 |  | 62555 | 93 | 62648 |
| Assets held in trust for deferred compensation plan | 21849 | 21849 |  |  | 21849 |
| **&nbsp;&nbsp;&nbsp;&nbsp; Total** | $30762049 | $6011589 | $6674249 | $17446381 | $30132219 |
| **Financial Liabilities** |  |  |  |  |  |
| Non-interest bearing deposits | $8150669 | $8150669 | $— | $— | $8150669 |
| Savings, interest checking and money market deposits | 14754571 | 14754571 |  |  | 14754571 |
| Certificates of deposit | 2388404 |  |  | 2409537 | 2409537 |
| Federal funds purchased | 123715 | 123715 |  |  | 123715 |
| Securities sold under agreements to repurchase | 2803043 |  |  | 2806428 | 2806428 |
| Derivative instruments | 26963 |  | 26905 | 58 | 26963 |
| Liabilities held in trust for deferred compensation plan | 21849 | 21849 |  |  | 21849 |
| **&nbsp;&nbsp;&nbsp;&nbsp; Total** | $28269214 | $23050804 | $26905 | $5216023 | $28293732 |

---

**17. Legal and Regulatory Proceedings**

The Company has various legal proceedings pending at June 30, 2025, arising in the normal course of business. While some matters pending against the Company specify damages claimed by plaintiffs, others do not seek a specified amount of damages or are at early stages of the legal process. The Company records a loss accrual for all legal and regulatory matters for which it deems a loss is probable and can be reasonably estimated. Some matters, which are in the early stages, have not yet progressed to the point where a loss amount can be determined to be probable and estimable.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**<u>Item 2.&nbsp;&nbsp;&nbsp;&nbsp;MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND</u>**

**<u>RESULTS OF OPERATIONS</u>**

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes and with the statistical information and financial data appearing in this report as well as the Company's 2024 Annual Report on Form 10-K. Results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of results to be attained for any other period.

**Pending Acquisition**

On June 16, 2025, the Company and FineMark Holdings, Inc. ("FineMark") announced they entered into a definitive merger agreement ("Merger Agreement") in which the Company will acquire all outstanding shares of FineMark in an all-stock transaction ("Merger"). Immediately after the merger, FineMark's wholly-owned subsidiary, FineMark National Bank & Trust will merge into the Bank ("Bank Merger"). FineMark is headquartered in Fort Meyers, Florida and has 13 banking offices in Florida, Arizona, and South Carolina. As of June 30, 2025, FineMark disclosed that it had total assets of $3.9 billion (including $2.6 billion in loans), $3.5 billion of total liabilities (including $3.1 billion in deposits), and $373 million of total shareholders' equity. Under the terms of the agreement, the shareholders of FineMark will receive a fixed exchange ratio of .690 shares of Company common stock for each share of FineMark common stock. The transaction is valued at approximately $585 million (with the price based on the closing price of the Company's common shares as of June 13, 2025, the last trading day before the public announcement of the merger). The transaction remains subject to regulatory approval, approval of FineMark shareholders and other customary closing conditions. Pending these approvals, the transaction is anticipated to close on January 1, 2026.

In connection with the acquisition, the Company incurred merger-related expenses consisting predominantly of professional services for investment banking, legal, and other services associated with the pending transaction that totaled $1.9 million in the second quarter of 2025.

**Forward-Looking Information**

This report may contain "forward-looking statements" that are subject to risks and uncertainties and include information about possible or assumed future results of operations. Many possible events or factors could affect the future financial results and performance of the Company. This could cause results or performance to differ materially from those expressed in the forward-looking statements. Words such as "expects", "anticipates", "believes", "estimates", variations of such words and other similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, such forward-looking statements. Readers should not rely solely on the forward-looking statements and should consider all uncertainties and risks discussed throughout this report. Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made or to reflect the occurrence of unanticipated events. Such possible events or factors include: changes in economic conditions in the Company's market area; changes in policies by regulatory agencies; governmental legislation and regulation; fluctuations in interest rates; changes in liquidity requirements; demand for loans in the Company's market area; changes in accounting and tax principles, estimates made on income taxes, competition with other entities that offer financial services, cybersecurity threats; risks related to the proposed Merger with FineMark including, among others, (i) failure to complete the Merger or unexpected delays related to the merger or either party's inability to satisfy closing conditions required to complete the Merger, (ii) certain restrictions during the pendency of the proposed Merger that may impact the parties' ability to pursue certain business opportunities or strategic transactions, (iii) diversion of management's attention from ongoing business operations and opportunities, (iv) cost savings and any revenue synergies from the Merger may not be fully realized or may take longer than anticipated to be realized, (v) deposits attrition, customer or employee loss and/or revenue loss as a result of the proposed Merger, and (vi) expenses related to the proposed Merger being greater than expected; and such other factors as discussed in Part I Item 1A - "Risk Factors" and Part II Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2024 Annual Report on Form 10-K and Part II, Item 1A. - "Risk Factors" in this report.

**Critical Accounting Estimates and Related Policies**

The Company has identified certain policies as being critical because they require management to make particularly difficult, subjective and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be reported under different conditions or using different assumptions. These estimates and

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

related policies are the Company's allowance for credit losses and fair value measurement policies. A discussion of these estimates and related policies can be found in the sections captioned "Critical Accounting Policies" and "Allowance for Credit Losses on Loans and Liability for Unfunded Lending Commitments" in Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's 2024 Annual Report on Form 10-K. There have been no changes in the Company's application of critical accounting policies since December 31, 2024.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Selected Financial Data**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30** | **Three Months Ended June 30** | **Six Months Ended June 30** | **Six Months Ended June 30** |
| | **2025** | 2024 | **2025** | 2024 |
| **Per Share Data** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income per common share — basic | $**1.14** | $1.03 \* | $**2.12** | $1.85 \* |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income per common share — diluted | **1.14** | 1.03 \* | **2.12** | 1.85 \* |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash dividends on common stock | **.275** | .257 \* | **.550** | .514 \* |
| &nbsp;&nbsp;&nbsp;&nbsp;Book value per common share |  |  | **27.43** | 23.31 \* |
| &nbsp;&nbsp;&nbsp;&nbsp;Market price |  |  | **62.17** | 53.12 \* |
| **Selected Ratios** |  |  |  |  |
| *(Based on average balance sheets)* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans to deposits <sup>(1)</sup> | **70.22%** | 70.73% | **69.80%** | 70.30% |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-interest bearing deposits to total deposits | **29.52** | 30.05 | **29.45** | 30.01 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity to loans <sup>(1)</sup> | **20.09** | 17.64 | **19.83** | 17.44 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity to deposits | **14.11** | 12.48 | **13.84** | 12.26 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity to total assets | **11.23** | 10.02 | **10.97** | 9.82 |
| &nbsp;&nbsp;&nbsp;&nbsp;Return on total assets | **1.95** | 1.86 | **1.82** | 1.67 |
| &nbsp;&nbsp;&nbsp;&nbsp;Return on equity | **17.40** | 18.52 | **16.63** | 16.98 |
| *(Based on end-of-period data)* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-interest income to revenue <sup>(2)</sup> | **37.15** | 36.73 | **37.14** | 37.06 |
| &nbsp;&nbsp;&nbsp;&nbsp;Efficiency ratio <sup>(3)</sup> | **54.77** | 55.95 | **55.18** | 58.75 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier I common risk-based capital ratio |  |  | **17.17** | 16.19 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier I risk-based capital ratio  |  |  | **17.17** | 16.19 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total risk-based capital ratio |  |  | **17.94** | 16.96 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity to tangible assets ratio <sup>(4)</sup> |  |  | **10.86** | 9.82 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier I leverage ratio  |  |  | **12.75** | 12.13 |

---

*\* Restated for the 5% stock dividend distributed in December 2024.*

*(1) Includes loans held for sale.*

*(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 revenue.*

*(4) The tangible common equity to tangible assets ratio is a measurement which management believes is a useful indicator of capital adequacy and utilization.* 

*It provides a meaningful basis for period to period and company to company comparisons, and also assists regulators, investors and analysts in analyzing the financial position of the Company. Tangible common equity and tangible assets are non-GAAP measures and should not be viewed as substitutes for, or superior to, data prepared in accordance with GAAP.* 

The following table is a reconciliation of the GAAP financial measures of total equity and total assets to the non-GAAP measures of total tangible common equity and total tangible assets.

---

| | | |
|:---|:---|:---|
| | **June 30** | **June 30** |
| *(Dollars in thousands)* | **2025** | 2024 |
| Total equity | $**3660114** | $3158335 |
| Less non-controlling interest | **19542** | 20600 |
| Less goodwill | **146539** | 146539 |
| Less intangible assets\* | **3785** | 3952 |
| **Total tangible common equity (a)** | $**3490248** | $2987244 |
| Total assets | $**32284247** | $30569358 |
| Less goodwill | **146539** | 146539 |
| Less intangible assets\* | **3785** | 3952 |
| **Total tangible assets (b)** | $**32133923** | $30418867 |
| **Tangible common equity to tangible assets ratio (a)/(b)** | **10.86%** | 9.82% |

---

*\* Intangible assets other than mortgage servicing rights.*

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Results of Operations**

**Summary**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30** | **Three Months Ended June 30** | **Three Months Ended June 30** | **Six Months Ended June 30** | **Six Months Ended June 30** | **Six Months Ended June 30** |
| *(Dollars in thousands)* | **2025** | 2024 | % change | **2025** | 2024 | % change |
| Net interest income (expense) | $**280147** | $262249 | 6.8% | $**549249** | $511248 | 7.4% |
| Provision for credit losses | **(5597)** | (5468) | 2.4 | **(20084)** | (10255) | 95.8 |
| Non-interest income | **165613** | 152244 | 8.8 | **324562** | 301092 | 7.8 |
| Investment securities gains (losses), net | **437** | 3233 | (86.5) | **(7154)** | 2974 | N.M. |
| Non-interest expense | **(244437)** | (232214) | 5.3 | **(482813)** | (477911) | 1.0 |
| Income taxes | **(42400)** | (38602) | 9.8 | **(79364)** | (70254) | 13.0 |
| Non-controlling interest income (expense) | **(1284)** | (1889) | (32.0) | **(325)** | (4678) | (93.1) |
| **Net income attributable to Commerce Bancshares, Inc.** | $**152479** | $139553 | 9.3% | $**284071** | $252216 | 12.6% |

---

For the quarter ended June 30, 2025, net income attributable to Commerce Bancshares, Inc. (net income) amounted to $152.5 million, an increase of $12.9 million, or 9.3%, compared to the second quarter of the previous year. For the current quarter, the annualized return on average assets was 1.95%, the annualized return on average equity was 17.40%, and the efficiency ratio was 54.77%. Diluted earnings per common share was $1.14 per share in the current quarter, an increase of 10.7% compared to $1.03 per share in the second quarter of 2024, and increased 16.3% compared to $0.98 per share in the previous quarter.

Compared to the second quarter of last year, net interest income increased $17.9 million, or 6.8%, mainly due to increases in interest income on investment securities and securities purchased under agreements to resell ("resale agreements") of $9.2 million and $6.1 million, respectively, partly offset by a decrease in interest income on loans of $7.0 million. Interest expense on deposits and interest expense on borrowings also decreased $11.0 million and $4.6 million, respectively. The provision for credit losses increased $129 thousand, or 2.4%, compared to the same quarter in the prior year. Non-interest income increased $13.4 million, or 8.8%, compared to the second quarter of 2024, mainly due to increases in trust fees and capital market fees of $3.3 million and $1.4 million, respectively, along with $5.5 million in gains on the sale of assets. Net gains on investment securities totaled $437 thousand in the current quarter compared to net gains of $3.2 million in the same quarter of last year. Securities gains in the current quarter primarily resulted from net gains in fair value of $4.4 million recorded on private equity investments which were partly offset by net losses of $4.2 million on sales of available for sale debt securities. Non-interest expense increased $12.2 million, or 5.3%, over the second quarter of 2024, mainly due to higher salaries expense, professional and other services expense, and data processing and software expense, partly offset by a non-recurring charitable donation made during the prior year.

Net income for the first six months of 2025 totaled $284.1 million, an increase of $31.9 million, or 12.6% from the same period last year. Diluted earnings per common share was $2.12, an increase of 14.6% compared to $1.85 per share in the same period last year. For the first six months of 2025, the annualized return on average assets was 1.82%, the annualized return on average equity was 16.63% and the efficiency ratio was 55.18%. Net interest income increased $38.0 million, or 7.4%, over the same period last year. This growth was largely due to an increase in interest income on investment securities and securities purchased under agreements to resell ("resale agreements") of $19.7 million and $11.9 million, respectively, partly offset by a decline in interest income on loans of $17.5 million. Interest expense on deposits and interest expense on borrowings also decreased $20.3 million and $9.8 million, respectively, over the same period last year. The provision for credit losses was $20.1 million for the first six months of 2025, compared to a provision of $10.3 million in the same period last year. Non-interest income increased $23.5 million, or 7.8%, from the first six months of last year largely due to increases in trust fees, deposit fees, and capital market fees. Non-interest expense increased $4.9 million, or 1.0%, over the first six months of last year mainly due to increases in salaries and benefits expense and professional and other services expense, partly offset by non-recurring litigation settlement expense during the prior year.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Net Interest Income**

The following table summarizes the changes in net interest income on a fully taxable-equivalent basis, by major category of interest earning assets and interest bearing liabilities, identifying changes related to volumes and rates. Changes not solely due to volume or rate are allocated to rate.

**Analysis of Changes in Net Interest Income**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2025 vs. 2024** | **Three Months Ended June 30, 2025 vs. 2024** | **Three Months Ended June 30, 2025 vs. 2024** | **Six Months Ended June 30, 2025 vs. 2024** | **Six Months Ended June 30, 2025 vs. 2024** | **Six Months Ended June 30, 2025 vs. 2024** |
| | **Change due to** | **Change due to** | | **Change due to** | **Change due to** | |
|<br> *<br>(In thousands)* | **Average<br>Volume** | **Average<br>Rate** |<br>**Total** | **Average<br>Volume** | **Average<br>Rate** |<br>**Total** |
| **Interest income, fully taxable equivalent basis:** |  |  |  |  |  |  |
| Loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Business | $4393 | $(6127) | $(1734) | $8041 | $(11849) | $(3808) |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate - construction and land | (849) | (3362) | (4211) | (2033) | (7446) | (9479) |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate - business | 411 | (3062) | (2651) | (517) | (6960) | (7477) |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate - personal | 40 | 2067 | 2107 | 185 | 4292 | 4477 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 344 | (580) | (236) | 341 | (237) | 104 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revolving home equity | 691 | (228) | 463 | 1387 | (662) | 725 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer credit card | 242 | (1026) | (784) | 160 | (2047) | (1887) |
| &nbsp;&nbsp;&nbsp;&nbsp;Overdrafts |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Total interest on loans | 5272 | (12318) | (7046) | 7564 | (24909) | (17345) |
| Loans held for sale | (19) | 13 | (6) | (44) | 21 | (23) |
| Investment securities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. government and federal agency securities | 17867 | (4913) | 12954 | 29827 | 4788 | 34615 |
| &nbsp;&nbsp;&nbsp;&nbsp;Government-sponsored enterprise obligations | (4) |  | (4) | (5) | (2) | (7) |
| &nbsp;&nbsp;&nbsp;&nbsp;State and municipal obligations | (1445) | 112 | (1333) | (4008) | 228 | (3780) |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed securities | (4754) | 35 | (4719) | (10757) | (1435) | (12192) |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset-backed securities | (1248) | 4879 | 3631 | (3811) | 9158 | 5347 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other securities | (1485) | 157 | (1328) | (2136) | (2307) | (4443) |
| &nbsp;&nbsp;&nbsp;&nbsp; Total interest on investment securities | 8931 | 270 | 9201 | 9110 | 10430 | 19540 |
| Federal funds sold | (24) | (1) | (25) |  | (6) | (6) |
| Securities purchased under agreements to resell | 4373 | 1722 | 6095 | 6240 | 5639 | 11879 |
| Interest earning deposits with banks | (860) | (5134) | (5994) | 5234 | (11411) | (6177) |
| **Total interest income** | 17673 | (15448) | 2225 | 28104 | (20236) | 7868 |
| **Interest expense:** |  |  |  |  |  |  |
| Deposits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings | (4) | (24) | (28) | (10) | (46) | (56) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest checking and money market | 4234 | (9200) | (4966) | 7976 | (16091) | (8115) |
| &nbsp;&nbsp;&nbsp;&nbsp;Certificates of deposit of less than $100,000 | 118 | (2196) | (2078) | 633 | (3970) | (3337) |
| &nbsp;&nbsp;&nbsp;&nbsp;Certificates of deposit of $100,000 and over | (971) | (3007) | (3978) | (3405) | (5350) | (8755) |
| &nbsp;&nbsp;&nbsp;&nbsp; Total interest on deposits | 3377 | (14427) | (11050) | 5194 | (25457) | (20263) |
| Federal funds purchased | (1826) | (327) | (2153) | (4502) | (686) | (5188) |
| Securities sold under agreements to repurchase | 996 | (3436) | (2440) | 2776 | (7430) | (4654) |
| Other borrowings | (3) | 21 | 18 |  | 19 | 19 |
| **Total interest expense** | 2544 | (18169) | (15625) | 3468 | $(33554) | $(30086) |
| **Net interest income, fully taxable-equivalent basis** | $15129 | $2721 | $17850 | $24636 | $13318 | $37954 |

---

Net interest income in the second quarter of 2025 was $280.1 million, an increase of $17.9 million over the second quarter of 2024. On a fully taxable-equivalent (FTE) basis, net interest income totaled $282.4 million in the second quarter of 2025, up $17.9 million over the same period last year and up $11.0 million over the previous quarter. The increase in net interest income

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

compared to the second quarter of 2024 was mainly due to higher interest income earned on investment securities (FTE) of $9.2 million and lower deposit interest expense of $11.1 million, partly offset by lower interest income earned on loans (FTE) of $7.0 million. The increase in total interest earned on investment securities (FTE) was mainly the result of higher average balances of U.S. government and federal agency securities, while the decrease in deposit interest expense was due to lower average rates paid, partly offset by higher average balances. Interest income earned on loans (FTE) decreased mainly due to lower average rates, partly offset by higher average balances. The Company's net yield on earning assets (FTE) was 3.70% in the current quarter compared to 3.55% in the second quarter of 2024.

Total interest income (FTE) increased $2.2 million over the second quarter of 2024. Interest income on loans (FTE) was $262.1 million during the second quarter of 2025, a decrease of $7.0 million, or 2.6%, from the same quarter last year. The decrease in loan interest income from the same quarter of last year was primarily due to a decline of 29 basis points in the average rate earned, partly offset by growth of $321.3 million, or 1.9%, in average loan balances. Most of the decrease in interest income occurred in the construction and land, business real estate and business loan categories. The largest decrease to interest income occurred in construction and land loan interest, which declined $4.2 million due to a 97 basis point decrease in the average rate earned, coupled with a decline in average balances of $40.7 million, or 2.8%. Business real estate loan interest income decreased $2.7 million due to a decrease of 34 basis points in the average rate earned, slightly offset by higher average balances of $26.3 million. Business loan interest income declined $1.7 million due to a 39 basis point decrease in the average rate earned, partly offset by higher average balances of $266.9 million, or 4.5%. Consumer credit card loan interest income declined $784 thousand mainly due to a 78 basis point decrease in the average rate earned. These decreases in interest income were partly offset by an increase in personal real estate loan interest income of $2.1 million mainly due to a 26 basis point increase in the average rate earned.

Interest income on investment securities (FTE) was $80.6 million during the second quarter of 2025, which was an increase of $9.2 million over the same quarter last year. The increase in interest income occurred mainly in interest earned on U.S. government and federal agency securities which grew $13.0 million due to a $1.4 billion increase in average balances, partly offset by a 76 basis point decrease in the average rate earned. Interest income related to the Company's U.S. Treasury inflation-protected securities, which is tied to the non-seasonally adjusted Consumer Price Index (CPI-U), decreased $2.8 million from the same quarter last year. Interest income earned on asset-backed securities grew $3.6 million due to a 123 basis point increase in the average rate earned, partly offset by a decrease in average balances of $200.2 million, or 11.2%. These increases to interest income were partly offset by a decline in interest income on mortgage-backed securities of $4.7 million, driven by lower average balances of $912.4 million, or 16.4%. In addition, the Company recorded a $1.0 million adjustment to premium amortization at June 30, 2025, which increased interest income and reflected slower forward prepayment speed estimates on mortgage-backed securities. This increase was higher than the $740 thousand adjustment increasing income in the same quarter last year. Interest income earned on state and municipal obligations declined $1.3 million mainly due to a $289.9 million, or 27.1%, decrease in average balances. Interest earned on other securities decreased $1.3 million mainly due to a $207.8 million, or 27.1%, decrease in average balances. Additionally, the average rate earned on investment securities during the three months ended June 30, 2025 increased 41 basis points over the same period in the prior year. The average balance of the total investment portfolio (excluding unrealized fair value adjustments on available for sale debt securities) was $10.2 billion in the second quarter of 2025, compared to $10.4 billion in the second quarter of 2024.

Interest income on securities purchased under agreements to resell increased $6.1 million over the same quarter last year, due to an increase of 81 basis points in the average rate earned and growth of $546.4 million in the average balance. Interest income on deposits at the Federal Reserve decreased $6.0 million mainly due to a decline of 102 basis points in average rate earned.

The average fully taxable-equivalent yield on total interest earning assets was 4.90% in the second quarter of 2025, down from 4.98% in the second quarter of 2024.

Total interest expense decreased $15.6 million compared to the second quarter of 2024 due to decreases of $11.1 million in interest expense on interest bearing deposits and $4.6 million in interest expense on borrowings. The decrease in deposit interest expense resulted from lower interest expense on certificates of deposit of $6.1 million due to a 78 basis point decline in the average rate paid and a decrease of $140.1 million, or 5.6%, in average balances. Interest expense on interest checking and money market deposit accounts decreased $5.0 million due to a 24 basis point decline in average rates paid, partly offset by an increase of $739.5 million, or 5.6%, in average balances. The overall rate paid on total deposits decreased 32 basis points from the same quarter last year. Interest expense on federal funds purchased decreased $2.2 million due to lower average balances of $135.2 million and a 105 basis point decline in the average rate paid. Interest expense on customer repurchase agreements decreased $2.4 million due to a 59 basis point decline in the average rate paid, partly offset by growth of $116.2 million in the average balance. The overall average rate incurred on all interest bearing liabilities was 1.83% and 2.21% in the second quarters of 2025 and 2024, respectively.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

Net interest income (FTE) for the first six months of 2025 was $553.8 million compared to $515.9 million for the same period in 2024. For the first six months of 2025, the net interest margin was 3.63% compared to 3.44% for the same period in 2024.

Total interest income (FTE) for the first six months of 2025 increased $7.9 million over the same period last year mainly due to higher interest income on investment securities (FTE) and securities purchased under agreements to resell, partly offset by lower interest income on loans (FTE) and deposit balances at the Federal Reserve. Loan interest income (FTE) decreased $17.3 million, or 3.2%, due to a 28 basis point decrease in the average rate earned, partly offset by a $242.7 million, or 1.4%, increase in average loan balances. The decrease in interest earned occurred in the construction and land, business real estate, business and consumer credit card loan categories, partly offset by an increase in the personal real estate loan category. Interest income on investment securities (FTE) increased $19.5 million mainly due to a 48 basis point increase in the average rate earned and an increase of $1.6 billion in average balances of U.S. government and federal agency securities. Interest earned on U.S. government and federal agency securities increased $34.6 million due to higher average balances and an increase in the average rate earned, while interest earned on asset-backed securities increased $5.4 million due to higher average rates earned, partly offset by a decrease in average balances. These increases in interest income on investment securities were partly offset by a decreases in interest earned on mortgage-backed and securities and state and municipal obligations of $12.2 million and $3.8 million, respectively, mainly due to decreases in average balances. Interest earned on other securities decreased $4.4 million due to declines in both average balances and rates earned. Higher interest income of $11.9 million was earned on securities purchased under agreements to resell, which saw growth in both average balances and rates earned. Interest income on balances at the Federal Reserve decreased $6.2 million due to a 102 basis point decline in the average rate earned, partly offset by a $192.6 million increase in the average balance invested.

Total interest expense for the first six months of 2025 decreased $30.1 million compared to the same period last year. Interest expense on deposits decreased $20.3 million, due to a 28 basis point decline in the average rate paid, partly offset by a $504.5 million increase in average balances. Interest expense on borrowings decreased $9.8 million, due lower interest expense on federal funds purchased of $5.2 million, mainly due to lower average balances, while interest expense on securities sold under agreements to repurchase declined $4.7 million due to lower average rates paid, partly offset by higher average balances. The overall cost of total interest bearing liabilities increased to 1.86% compared to 2.21% in the same period last year.

Summaries of average assets and liabilities and the corresponding average rates earned/paid appear on the last page of this discussion.

**Non-Interest Income**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30** | **Three Months Ended June 30** | Increase (Decrease) | Increase (Decrease) | **Six Months Ended June 30** | **Six Months Ended June 30** | Increase (Decrease) | Increase (Decrease) |
| *(Dollars in thousands)* | **2025** | 2024 | Amount | % change | **2025** | 2024 | Amount | % change |
| Trust fees | $**55571** | $52291 | $3280 | 6.3% | $**112163** | $103396 | $8767 | 8.5% |
| Bank card transaction fees | **46362** | 47477 | (1115) | (2.3) | **91955** | 94407 | (2452) | (2.6) |
| Deposit account charges and other fees | **26248** | 25325 | 923 | 3.6 | **52870** | 49476 | 3394 | 6.9 |
| Capital market fees | **6175** | 4760 | 1415 | 29.7 | **11287** | 8652 | 2635 | 30.5 |
| Consumer brokerage services | **5383** | 4478 | 905 | 20.2 | **10168** | 8886 | 1282 | 14.4 |
| Loan fees and sales | **3419** | 3431 | (12) | (.3) | **6823** | 6572 | 251 | 3.8 |
| Other | **22455** | 14482 | 7973 | 55.1 | **39296** | 29703 | 9593 | 32.3 |
| **Total non-interest income** | $**165613** | $152244 | $13369 | 8.8% | $**324562** | $301092 | $23470 | 7.8% |
| Non-interest income as a % of total revenue\* | **37.2%** | 36.7% |  |  | **37.1%** | 37.1% |  |  |

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 *\* Total revenue includes net interest income and non-interest income.*

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

The table below is a summary of net bank card transaction fees for the six month periods ended June 30, 2025 and 2024.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30** | **Three Months Ended June 30** | **Three Months Ended June 30** | **Three Months Ended June 30** | **Six Months Ended June 30** | **Six Months Ended June 30** | **Six Months Ended June 30** | **Six Months Ended June 30** |
| *(Dollars in thousands)* | **2025** | 2024 | $ change | % change | **2025** | 2024 | $ change | % change |
| Net debit card fees | $**11260** | $11383 | $(123) | (1.1)% | $**21548** | $21788 | $(240) | (1.1)% |
| Net credit card fees | **3242** | 4033 | (791) | (19.6) | **6850** | 7805 | (955) | (12.2) |
| Net merchant fees | **5934** | 5865 | 69 | 1.2 | **11701** | 11112 | 589 | 5.3 |
| Net corporate card fees | **25926** | 26196 | (270) | (1.0) | **51856** | 53702 | (1846) | (3.4) |
| **Total bank card transaction fees** | $**46362** | $47477 | $(1115) | (2.3)% | $**91955** | $94407 | $(2452) | (2.6)% |

---

For the second quarter of 2025, total non-interest income amounted to $165.6 million compared to $152.2 million in the same quarter last year, which was an increase of $13.4 million, or 8.8%. The increase was mainly due to higher trust fees, capital market fees and gains on sales of assets. Trust fees increased $3.3 million, or 6.3%, mainly due to growth of $2.7 million in private client trust fees. Bank card transaction fees for the current quarter declined $1.1 million, or 2.3%, from the same period last year. Net credit card fees decreased $791 thousand mainly due to higher rewards expense. Net corporate card fees declined $270 thousand mainly due to lower interchange income, partly offset by lower rewards expense. Net debit card fees decreased $123 thousand mainly due to higher network expense, while net merchant fees increased $69 thousand mainly due to lower network expense. Compared to the second quarter of last year, deposit account fees increased $923 thousand, or 3.6%, mainly due to higher corporate cash management fees of $910 thousand. Capital market fees increased $1.4 million, or 29.7%, mainly due to higher trading securities and underwriting income, while consumer brokerage fees increased $905 thousand, or 20.2%, mainly due to higher annuity and advisory fees. Other non-interest income increased $8.0 million, or 55.1%, mainly due to increases of $5.5 million in gains on sales of assets and $956 thousand in tax credit sales income. Additionally, higher fair value adjustments of $1.3 million were recorded on the Company's deferred compensation plan assets and liabilities, which affect both other income and other expense.

Non-interest income for the first six months of 2025 was $324.6 million compared to $301.1 million in the first six months of 2024, which was an increase of $23.5 million, or 7.8%. The increase was mainly due to higher trust fees, deposit account fees and gains on sales of assets, partly offset by lower net bank card fees. Trust fees increased $8.8 million, or 8.5%, mainly due to higher private client and institutional trust fees. Bank card transaction fees for the current year declined $2.5 million, or 2.6%, from the same period last year, mainly due to decreases of $1.8 million in net corporate card fees and $955 thousand in net credit card fees, partly offset by an increase in net merchant fees of $589 thousand. Deposit account fees increased $3.4 million, or 6.9%, mainly due to higher corporate cash management fees. Capital market fees increased $2.6 million, or 30.5%, mainly due to higher trading securities and underwriting income. Consumer brokerage fees increased $1.3 million, or 14.4%, mainly due to higher annuity and advisory fees, while loan fees and sales increased $251 thousand, or 3.8%. Other non-interest income increased $9.6 million, or 32.3%, mainly due to increases of $8.0 million in gains on sales of assets, $769 thousand in tax credit sales income and $568 thousand in cash sweep commissions. In addition, increases of $765 thousand in fair value adjustments were recorded the Company's deferred compensation plan assets and liabilities.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Investment Securities Gains (Losses), Net**

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30** | **Three Months Ended June 30** | **Six Months Ended June 30** | **Six Months Ended June 30** |
| *(In thousands)* | **2025** | 2024 | **2025** | 2024 |
| Net gains (losses) on sales of available for sale debt securities | $**(4218)** | $(179073) | $**(4214)** | $(187543) |
| Net gains (losses) on equity securities | **1874** | 178164 | **1777** | 178306 |
| Net gains (losses) on sales of private equity investments | **(1633)** | (1535) | **(606)** | (566) |
| Fair value adjustments on private equity investments | **4414** | 5677 | **(4111)** | 12777 |
| **Total investment securities gains (losses), net** | $**437** | $**3233** | $**(7154)** | $**2974** |

---

Net gains and losses on investment securities, which were recognized in earnings during the three months ended June 30, 2025 and 2024, are shown in the table above. Net securities gains of $437 thousand were reported in the second quarter of 2025, compared to net gains of $3.2 million in the same period last year. The net gains in the second quarter of 2025 were mainly comprised of net gains in fair value of $4.4 million recorded on private equity investments and net gains of $1.9 million on equity securities. These gains were largely offset by net losses of $4.2 million on sales of available for sale debt securities and net losses on sales of $1.6 million on sales of private equity investments. The net gains on investment securities for the same quarter last year were primarily comprised of net gains of $178.2 million on equity investments, primarily Visa Class C shares, and net gains in fair value of $5.7 million recorded on private equity investments, mostly offset by net losses of $179.1 million on the sale of available for sale securities as part of the planned portfolio repositioning. Additional information about the sale of Visa Class C shares and the Company's available for sale debt portfolio repositioning transactions is discussed in Note 3, Investment Securities.

Net losses on investment securities of $7.2 million were recognized in earnings for the six months ended June 30, 2025, compared to net gains of $3.0 million for the same period in 2024. Net losses in the first half of 2025 were mainly comprised of net losses of $4.2 million on sales of available for sale debt securities and net losses in fair value of $4.1 million recorded on private equity investments, partly offset by net gains of $1.8 million on equity securities. Net gains in the first half of 2024 were mainly comprised of net gains of $178.3 million on equity investments and net gains in fair value of $12.8 million recorded on private equity investments, largely offset by net losses of $187.5 million on sales of available for sale securities. The portion of private equity activity attributable to minority interests is reported as non-controlling interest in the consolidated statements of income and resulted in income of $943 thousand during the first six months of 2025 and expense of $1.8 million during the first six months of 2024.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Non-Interest Expense**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30** | **Three Months Ended June 30** | Increase (Decrease) | Increase (Decrease) | **Six Months Ended June 30** | **Six Months Ended June 30** | Increase (Decrease) | Increase (Decrease) |
| *(Dollars in thousands)* | **2025** | 2024 | Amount | % change | **2025** | 2024 | Amount | % change |
| Salaries and employee benefits | $**155025** | $149120 | $5905 | 4.0% | $**308103** | $300921 | $7182 | 2.4% |
| Data processing and software | **32904** | 31529 | 1375 | 4.4 | **65142** | 62682 | 2460 | 3.9 |
| Net occupancy | **13654** | 12544 | 1110 | 8.8 | **27674** | 26118 | 1556 | 6.0 |
| Professional and other services | **12973** | 8617 | 4356 | 50.6 | **22999** | 17265 | 5734 | 33.2 |
| Marketing | **5974** | 5356 | 618 | 11.5 | **11817** | 9392 | 2425 | 25.8 |
| Equipment | **5157** | 5091 | 66 | 1.3 | **10405** | 10101 | 304 | 3.0 |
| Supplies and communication | **4962** | 4636 | 326 | 7.0 | **10008** | 9380 | 628 | 6.7 |
| Deposit insurance | **3312** | 2354 | 958 | 40.7 | **7056** | 10371 | (3315) | (32.0) |
| Other | **10476** | 12967 | (2491) | (19.2) | **19609** | 31681 | (12072) | (38.1) |
| **Total non-interest expense** | $**244437** | $232214 | $12223 | 5.3% | $**482813** | $477911 | $4902 | 1.0% |

---

Non-interest expense for the second quarter of 2025 amounted to $244.4 million, an increase of $12.2 million, or 5.3%, compared to expense of $232.2 million in the second quarter of last year. The increase in expense over the same period last year was mainly due to higher salaries and employee benefits expense, professional and other services expense and data processing and software expense, partly offset by lower contribution expense. Salaries and employee benefits expense increased $5.9 million, or 4.0%, mainly due to higher healthcare expense of $2.3 million, incentive compensation expense of $2.2 million and full-time salaries expense of $2.1 million. Full-time equivalent employees totaled 4,658 at June 30, 2025, compared to 4,724 at June 30, 2024. Data processing and software expense increased $1.4 million, or 4.4%, mainly due to higher costs for service providers and software. Net occupancy increased $1.1 million, 8.8%, mainly due to higher depreciation expense and lower external rent income. Professional and other services expense increased $4.4 million, or 50.6%, and included $1.9 million in acquisition related legal and professional services expense. Marketing expense increased $618 thousand, or 11.5%, and equipment expense increased $304 thousand, or 3.0%. Supplies and communication expense increased $326 thousand, or 7.0%, mainly due to higher postage and bank card reissuance costs. Deposit insurance expense increased $958 thousand, or 40.7%, mainly due to a $1.2 million accrual adjustment that lowered expense in the prior year from a one-time special assessment by the FDIC to replenish the Deposit Insurance Fund. Other non-interest expense decreased $2.5 million, or 19.2%, mainly due to a $5.0 million donation to a related charitable foundation in 2024 that did not reoccur. This decrease was partly offset by increases of $648 thousand in travel and entertainment expense and $1.3 million in fair value adjustments on the Company's deferred compensation plan assets and liabilities.

Non-interest expense amounted to $482.8 million for the first six months of 2025, an increase of $4.9 million, or 1.0%, over the first six months of 2024. Salaries and benefits expense increased $7.2 million, or 2.4%, mainly due to higher incentive compensation, full-time salaries expense and healthcare expense. Data processing and software expense increased $2.5 million, or 3.9%, due to increased costs for service providers and software expense. Professional and other services expense $5.7 million, or 33.2%, and included $1.9 million in acquisition related legal and professional fees. Occupancy expense increased $1.6 million, or 6.0%, mainly due to higher building depreciation expense and demolition costs. Marketing expense increased $2.4 million, or 25.8%, and equipment expense increased $304 thousand, or 3.0%. Supplies and communication expense increased $628 thousand, or 6.7%, mainly due to higher bank card reissuance costs. Deposit insurance decreased $3.3 million, or 32.0%, mainly due to accrual adjustments in 2024 to the special assessment by the FDIC. Other non-interest expense decreased $12.1 million, or 38.1%, mainly due to litigation settlement expense of $10.0 million, net of insurance, and a $5.0 million donation to a related charitable foundation, both recorded in 2024.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**Provision and Allowance for Credit Losses on Loans and Liability for Unfunded Lending Commitments**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Six Months Ended June 30** | **Six Months Ended June 30** |
| *(In thousands)* | **June 30, 2025** | Mar. 31, 2025 | June 30, 2024 | **2025** | 2024 |
| **ALLOWANCE FOR CREDIT LOSSES ON LOANS** |  |  |  |  |  |
| **Balance at beginning of period** | $**167031** | $162742 | $160465 | $**162742** | $162395 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses on loans | **7919** | 15095 | 7849 | $**23014** | $14796 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loan charge-offs (recoveries): |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Commercial: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business | **432** | 46 | 622 | **478** | 645 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate-construction and land | **24** |  |  | **24** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate-business | **(425)** | 377 | (8) | **(48)** | (149) |
| Commercial net loan charge-offs (recoveries) | **31** | 423 | 614 | **454** | 496 |
| &nbsp;&nbsp;&nbsp;&nbsp; Personal Banking: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate-personal | **35** | 72 | 79 | **107** | 103 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumer | **2168** | 2852 | 1804 | **5020** | 3787 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revolving home equity | **11** | (3) | (7) | **8** | (11) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumer credit card | **7085** | 6967 | 6746 | **14052** | 13181 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overdrafts | **360** | 495 | 521 | **855** | 1078 |
| Personal banking net loan charge-offs (recoveries) | **9659** | 10383 | 9143 | **20042** | 18138 |
| **Total net loan charge-offs (recoveries)** | **9690** | 10806 | 9757 | **20496** | 18634 |
| **Balance at end of period** | $**165260** | $167031 | $158557 | $**165260** | $158557 |
| **LIABILITY FOR UNFUNDED LENDING COMMITMENTS** |  |  |  |  |  |
| **Balance at beginning of period** | $**18327** | $18935 | $23086 | $**18935** | $25246 |
| &nbsp;&nbsp;Provision for credit losses on unfunded lending commitments | **(2322)** | (608) | (2381) | **(2930)** | (4541) |
| **Balance at end of period** | **16005** | 18327 | 20705 | **16005** | 20705 |
| **ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS** | $**181265** | $185358 | $179262 | $**181265** | $179262 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Six Months Ended June 30** | **Six Months Ended June 30** |
| | **June 30, 2025** | Mar. 31, 2025 | June 30, 2024 | **2025** | 2024 |
| Annualized net loan charge-offs (recoveries)\*: |  |  |  |  |  |
| **Commercial:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Business | **.03%** | —% | .04% | **.02%** | .02% |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate-construction and land | **.01** |  |  | **—** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate-business | **(.05)** | .04 |  | **—** | (.01) |
| Commercial net loan charge-offs (recoveries) | **—** | .02 | .02 | **.01** | .01 |
| **Personal Banking:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate-personal | **—** | .01 | .01 | **.01** | .01 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | **.40** | .56 | .34 | **.48** | .36 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revolving home equity | **.01** |  | (.01) | **—** | (.01) |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer credit card | **5.08** | 5.04 | 4.91 | **5.06** | 4.75 |
| &nbsp;&nbsp;&nbsp;&nbsp;Overdrafts | **25.50** | 34.26 | 43.15 | **29.93** | 34.54 |
| Personal banking net loan charge-offs (recoveries) | **.63** | .70 | .61 | **.66** | .60 |
| **Total annualized net loan charge-offs (recoveries)** | **.22%** | .25% | .23% | **.24%** | .22% |

---

*\* as a percentage of average loans (excluding loans held for sale)*

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

The following schedule provides a breakdown of the allowance for credit losses on loans (ACL) by loan class and the percentage of the allowance for credit losses to the related loan class at period end.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | Mar. 31, 2025 | Mar. 31, 2025 | June 30, 2024 | June 30, 2024 |
| *(Dollars in thousands)* | **Credit Loss Allowance Allocation** | **% of ACL to Loan Category** | Credit Loss Allowance Allocation | % of ACL to Loan Category | Credit Loss Allowance Allocation | % of ACL to Loan Category |
| Business | $**46472** | **.73%** | $45669 | .73% | $45060 | .74% |
| RE — construction and land | **28152** | **2.00** | 29284 | 2.06 | 29920 | 2.14 |
| RE — business | **32230** | **.86** | 31747 | .87 | 32237 | .90 |
| RE — personal | **10753** | **.35** | 13475 | .44 | 9109 | .30 |
| Consumer | **14853** | **.69** | 14967 | .71 | 11086 | .52 |
| Revolving home equity | **1868** | **.51** | 1857 | .52 | 1789 | .54 |
| Consumer credit card | **30796** | **5.35** | 29904 | 5.26 | 29201 | 5.15 |
| Overdrafts | **136** | **.83** | 128 | 4.09 | 155 | 3.70 |
| Total | $**165260** | **.94%** | $167031 | .96% | $158557 | .92% |

---

To determine the amount of the allowance for credit losses on loans and the liability for unfunded lending commitments, the Company has an established process which assesses the risks and losses expected in its portfolios. This process provides an allowance based on estimates of allowances for pools of loans and unfunded lending commitments, as well as a second, smaller component based on certain individually evaluated loans and unfunded lending commitments. The Company's policies and processes for determining the allowance for credit losses on loans and the liability for unfunded lending commitments are discussed in Note 1 to the consolidated financial statements and in the "*Allowance for Credit Losses"* discussion within *Critical Accounting Estimates and Related Policies* in Item 7 of the 2024 Annual Report on Form 10-K.

Net loan charge-offs in the second quarter of 2025 amounted to $9.7 million, compared to $10.8 million in the prior quarter and $9.8 million in the second quarter of last year. Compared to the same period last year, net loan charge-offs in the second quarter of 2025 decreased $67 thousand and decreased $1.1 million from the previous quarter. The decrease from the prior year was mainly driven by decreases of $417 thousand and $190 thousand in business real estate and business loan net charge-offs, respectively, offset by increases of $364 thousand and $339 thousand in consumer and consumer credit card loan net charge-offs, respectively. The decrease in net loan charge-offs for the three months ended June 30, 2025 from the previous quarter was driven by decreases of $802 thousand and $684 thousand in net charge-offs on business real estate and consumer loans, respectively, partially offset by an increase of $386 thousand in net charge-offs on business loans.

For the three months ended June 30, 2025, annualized net charge-offs on average consumer credit card loans were 5.08%, compared to 5.04% in the previous quarter and 4.91% in the same period last year. Consumer loan annualized net charge-offs in the current quarter amounted to .40%, compared to .56% in the prior quarter and .34% in the same period last year. In the second quarter of 2025, total annualized net loan charge-offs were .22%, compared to .25% in the previous quarter and .23% in the same period last year.

For the three months ended June 30, 2025, the provision for credit losses on loans was $7.9 million, which was a decrease of $7.2 million from the provision recorded in the prior quarter. The provision for the three months ended March 31, 2025 included an increase in the allowance for credit losses on loans, as well as slightly higher loan net charge-offs, as compared to the provision for the three months ended June 30, 2025. Compared to the same period in the prior year, the provision for credit losses on loans for the three months ended June 30, 2025 was flat. For the six months ended June 30, 2025, the provision for credit losses on loans was $23.0 million, which was an $8.2 million increase over the $14.8 million provision recorded in the same period last year. The increase mainly occurred during the first quarter of 2025, as explained above. Changes in the provision are driven by changes in the estimate for the allowance for credit losses on loans.

At June 30, 2025, the allowance for credit losses on loans increased $2.5 million compared to the allowance for credit losses on loans at December 31, 2024. The increase in the allowance for credit losses mainly occurred in the personal banking loan portfolio, which saw an increase of $2.4 million due to increased loss experience in the consumer portfolio, partially offset by a decrease in the allowance for credit losses in the personal real estate loan portfolio. The forecast utilized to estimate the allowance for credit losses at June 30, 2025 reflected a slight decline in key macroeconomic variables. The allowance for credit losses on loans was $165.3 million at June 30, 2025 and was .94%, .95% and .92% of total loans at June 30, 2025, December 31, 2024 and June 30, 2024, respectively.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

In the current quarter, the provision for credit losses on unfunded lending commitments was a benefit of $2.3 million, compared to a benefit of $2.4 million for the three months ended June 30, 2024. At June 30, 2025, the liability for unfunded lending commitments was $16.0 million, compared to $18.9 million at December 31, 2024 and $20.7 million at June 30, 2024. The liability decreased primarily due to decreases in unfunded lending commitment balances, coupled with improvement in loss rate assumptions for the Company's construction loans. The Company's unfunded lending commitments primarily relate to construction loans, and the Company's estimate for credit losses in its unfunded lending commitments utilizes the same model and forecast as its estimate for credit losses on loans. See Note 2 for further discussion of the model inputs utilized in the Company's estimate of credit losses.

The Company considers the allowance for credit losses on loans and the liability for unfunded commitments adequate to cover losses expected in the loan portfolio, including unfunded commitments, at June 30, 2025.

The allowance for credit losses on loans and the liability for unfunded lending commitments are estimates that require significant judgment including projections of the macro-economic environment. The Company utilizes a third-party macro-economic forecast that continuously changes due to economic conditions and events. These changes in the forecast cause fluctuations in the allowance for credit losses on loans and the liability for unfunded lending commitments. The Company uses judgment to assess the macro-economic forecast and internal loss data in estimating the allowance for credit losses on loans and the liability for unfunded lending commitments. These estimates are subject to periodic refinement based on changes in the underlying external and internal data.

**Risk Elements of Loan Portfolio**

The following table presents non-performing assets and loans which are past due 90 days and still accruing interest. Non-performing assets include non-accruing loans and foreclosed real estate. Loans are placed on non-accrual status when management does not expect to collect payments consistent with acceptable and agreed upon terms of repayment. Loans that are 90 days past due as to principal and/or interest payments are generally placed on non-accrual, unless they are both well-secured and in the process of collection, or they are personal banking loans that are exempt under regulatory rules from being classified as non-accrual.

---

| | | |
|:---|:---|:---|
| *(Dollars in thousands)* | **June 30, 2025** | December 31, 2024 |
| Non-accrual loans | $**18870** | $18278 |
| Foreclosed real estate | **397** | 343 |
| **Total non-performing assets** | $**19267** | $18621 |
| Non-performing assets as a percentage of total loans | **.11%** | .11% |
| Non-performing assets as a percentage of total assets | **.06%** | .06% |
| **Total loans past due 90 days and still accruing interest** | $**25303** | $24516 |

---

Non-accrual loans totaled $18.9 million at June 30, 2025, an increase of $592.0 thousand from the balance at December 31, 2024. The increase occurred mainly in business non-accrual loans, which increased $309 thousand, as well as construction and land loans, which increased $206 thousand. At June 30, 2025, non-accrual loans were comprised of business real estate (80.0%), revolving home equity (10.5%), business (2.2%), personal real estate (5.0%), and construction and land (2.3%) loans. Foreclosed real estate totaled $397 thousand at June 30, 2025, an increase of $54 thousand compared to December 31, 2024. Loans past due 90 days or more and still accruing interest totaled $25.3 million as of June 30, 2025, an increase of $787 thousand from December 31, 2024. Balances by class for non-accrual loans and loans past due 90 days and still accruing interest are shown in the *"Delinquent and non-accrual loans"* section in Note 2 to the consolidated financial statements.

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

In addition to the non-performing and past due loans mentioned above, the Company also has identified loans for which management has concerns about the ability of the borrowers to meet existing repayment terms. They are classified as substandard under the Company's internal rating system. The loans are generally secured by either real estate or other borrower assets, reducing the potential for loss should they become non-performing. Although these loans are generally identified as potential problem loans, they may never become non-performing. Such loans totaled $276.0 million at June 30, 2025 compared to $330.3 million at December 31, 2024, resulting in a decrease of $54.3 million, or 16.4%.

---

| | | |
|:---|:---|:---|
| *(In thousands)* | **June 30, 2025** | December 31, 2024 |
| Potential problem loans: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Business | $**118558** | $131527 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate – construction and land | **2514** | 2662 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate – business | **154831** | 196030 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate – personal | **96** | 96 |
| **Total potential problem loans** | $**275999** | $330315 |

---

When borrowers are experiencing financial difficulty, the Company may agree to modify the contractual terms of a loan to a borrower in order to assist the borrower in repaying principal and interest owed to the Company. At June 30, 2025, the Company held $138.1 million of loans that had been modified during the six months ended June 30, 2025. These loans are further discussed in the *"Modifications for borrowers experiencing financial difficulty"* section in Note 2 to the consolidated financial statements.

***Loans with Special Risk Characteristics***

Management relies primarily on an internal risk rating system, in addition to delinquency status, to assess risk in the loan portfolio, and these statistics are presented in Note 2 to the consolidated financial statements. However, certain types of loans are considered at high risk of loss due to their terms, location, or special conditions. Additional information about the major types of loans in these categories and their risk features are provided below. Information based on loan-to-value (LTV) ratios was generally calculated with valuations at loan origination date. The Company normally obtains an updated appraisal or valuation at the time a loan is renewed or modified, or if the loan becomes significantly delinquent or is in the process of being foreclosed upon.

*Real Estate – Construction and Land Loans*

The Company's portfolio of construction and land loans, as shown in the table below, amounted to 8.0% of total loans outstanding at June 30, 2025. The largest component of construction and land loans was commercial construction, which increased $6.1 million during the six months ended June 30, 2025. At June 30, 2025, multi-family residential construction loans totaled approximately $571.7 million, or 47.5%, of the commercial construction loan portfolio, compared to $526.6 million, or 44.0%, at December 31, 2024.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *(Dollars in thousands)* | **June 30,<br>2025** | <br>**% of Total** | **% of**<br>**Total**<br>**Loans** | December 31, 2024 | &nbsp;&nbsp;&nbsp;&nbsp;% of Total | % of<br>Total<br>Loans |
| Commercial construction | $**1203402** | **85.6%** | **6.8%** | $1197278 | 84.9% | 7.0% |
| Residential construction | **99361** | **7.1** | **.6** | 106884 | 7.6 | .6 |
| Residential land and land development | **65109** | **4.6** | **.4** | 65342 | 4.6 | .4 |
| Commercial land and land development | **37526** | **2.7** | **.2** | 40397 | 2.9 | .2 |
| **Total real estate - construction and land loans** | $**1405398** | **100.0%** | **8.0%** | $1409901 | 100.0% | 8.2% |

---

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

*Real Estate – Business Loans*

Total business real estate loans were $3.8 billion at June 30, 2025 and comprised 21.3% of the Company's total loan portfolio. These loans include properties such as manufacturing and warehouse buildings, small office and medical buildings, churches, hotels and motels, shopping centers, and other commercial properties. At June 30, 2025, 33.5% of business real estate loans were for owner-occupied real estate properties, which have historically resulted in lower net charge-off rates than non-owner-occupied commercial real estate loans.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *(Dollars in thousands)* | **June 30,<br>2025** | <br>**% of Total** | **% of**<br>**Total**<br>**Loans** | December 31, 2024 | % of Total | % of<br>Total<br>Loans |
| Owner-occupied | $**1257708** | **33.5%** | **7.1%** | $1237265 | 33.8% | 7.2% |
| Office | **525847** | **14.0** | **3.0** | 520715 | 14.2 | 3.0 |
| Industrial | **624426** | **16.6** | **3.5** | 485250 | 13.3 | 2.8 |
| Hotels | **287173** | **7.6** | **1.6** | 334479 | 9.1 | 1.9 |
| Multi-family | **348438** | **9.3** | **2.0** | 310806 | 8.5 | 1.8 |
| Retail | **307788** | **8.2** | **1.7** | 309431 | 8.5 | 1.8 |
| Farm | **193998** | **5.2** | **1.1** | 189794 | 5.2 | 1.1 |
| Senior living | **124490** | **3.3** | **.7** | 183695 | 5.0 | 1.1 |
| Other | **87910** | **2.3** | **.6** | 89783 | 2.4 | .6 |
| **Total real estate - business loans** | $**3757778** | **100.0%** | **21.3%** | $3661218 | 100.0% | 21.3% |

---

Information about the credit quality of the Company's business real estate loan portfolio as of June 30, 2025 and December 31, 2024 is provided in the table below.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *(Dollars in thousands)* | Pass | Special Mention | Substandard | Non-Accrual | Total |
| **June 30, 2025** |  |  |  |  |  |
| Owner-occupied | $**1204075** | $**21291** | $**32050** | $**292** | $**1257708** |
| Office | **467985** | **—** | **57862** | **—** | **525847** |
| Industrial | **624426** | **—** | **—** | **—** | **624426** |
| Hotels | **273351** | **—** | **13822** | **—** | **287173** |
| Multi-family | **322696** | **14815** | **10927** | **—** | **348438** |
| Retail | **307788** | **—** | **—** | **—** | **307788** |
| Farm | **193328** | **362** | **—** | **308** | **193998** |
| Senior living | **69922** | **—** | **40059** | **14509** | **124490** |
| Other | **85950** | **1960** | **—** | **—** | **87910** |
| Total | $**3549521** | $**38428** | $**154720** | $**15109** | $**3757778** |
| **December 31, 2024** |  |  |  |  |  |
| Owner-occupied | $1203019 | $3362 | $30598 | $286 | $1237265 |
| Office | 451189 | 11980 | 57546 |  | 520715 |
| Industrial | 485250 |  |  |  | 485250 |
| Hotels | 334479 |  |  |  | 334479 |
| Multi-family | 299825 | 10981 |  |  | 310806 |
| Retail | 308730 |  | 701 |  | 309431 |
| Farm | 185998 | 642 | 3154 |  | 189794 |
| Senior living | 65366 |  | 103661 | 14668 | 183695 |
| Other | 89577 | 206 |  |  | 89783 |
| Total | $3423433 | $27171 | $195660 | $14954 | $3661218 |

---

*Revolving Home Equity Loans*

The Company had $364.4 million in revolving home equity loans at June 30, 2025 that were collateralized by residential real estate. Most of these loans (93.5%) are written with terms requiring interest-only monthly payments. These loans are offered in three main product lines: LTV up to 80%, 80% to 90%, and 90% to 100%. As of June 30, 2025, the outstanding

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principal of loans with an original LTV higher than 80% was $28.2 million, or 7.9% of the portfolio, compared to $31.9 million as of December 31, 2024. Total revolving home equity loan balances over 30 days past due were $3.7 million at June 30, 2025 and $5.6 million at December 31, 2024, and the outstanding balance of revolving home equity loans on non-accrual status was $2.0 million at both June 30, 2025 and December 31, 2024. The weighted average FICO score for the total portfolio balance at June 30, 2025 is 775. At maturity, the accounts are re-underwritten, and if they qualify under the Company's credit, collateral and capacity policies, the borrower is given the option to renew the line of credit or convert the outstanding balance to an amortizing loan. If criteria are not met, amortization is required, or the borrower may pay off the loan. During the remainder of 2025 through 2028, approximately 15% of the Company's current outstanding balances are expected to mature. Of these balances, approximately 82% have a FICO score of 700 or higher. The Company does not expect a significant increase in losses as these loans mature, due to their high FICO scores, low LTVs, and low historical loss levels.

*Consumer Loans*

Within the consumer loan portfolio are several direct and indirect product lines, which include loans for the purchase of automobiles, motorcycles, marine and RVs. Auto loans comprised 35.6% of the consumer loan portfolio at June 30, 2025, and outstanding balances for auto loans were $769.1 million and $776.7 million at June 30, 2025 and December 31, 2024, respectively. The balances over 30 days past due amounted to $8.1 million at June 30, 2025 and $14.4 million at December 31, 2024, respectively, and comprised 1.1% of the outstanding balances of these loans at June 30, 2025 and 1.9% at December 31, 2024. For the six months ended June 30, 2025, $190.2 million of new auto loans were originated, compared to $196.4 million during the first six months of 2024. At June 30, 2025, the automobile loan portfolio had a weighted average FICO score of 756, and net charge-offs on auto loans were 1.0% of average auto loans.

The Company's consumer loan portfolio also includes fixed rate home equity loans, typically for home repair or remodeling, and these loans comprised 9.9% of the consumer loan portfolio at June 30, 2025. Losses on these loans have historically been low, and the Company saw net recoveries of $16 thousand for the first six months of 2025. Private banking loans comprised 38.4% of the consumer loan portfolio at June 30, 2025. The Company's private banking loans are generally well-collateralized, and at June 30, 2025 were secured primarily by assets held by the Company's trust department. The remaining portion of the Company's consumer loan portfolio is comprised of health services financing, motorcycles, marine and RV loans. Net charge-offs on private banking, health services financing, motorcycle and marine and RV loans totaled $1.4 million in the first six months of 2025 and were .3% of the average balances of these loans at June 30, 2025.

*Consumer Credit Card Loans*

The Company offers low promotional rates on selected consumer credit card products. Out of a portfolio at June 30, 2025 of $576.2 million in consumer credit card loans outstanding, approximately $122.5 million, or 21.3%, carried a low promotional rate. Within the next six months, $51.7 million of these loans are scheduled to convert to the ongoing higher contractual rate. To mitigate some of the risk involved with this credit card product, the Company performs credit checks and detailed analysis of the customer borrowing profile before approving the loan application. Management believes that the risks in the consumer loan portfolio are reasonable and the anticipated loss ratios are within acceptable parameters.

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025** | December 31, 2024 |
| FICO score: |  |  |
| Under 600 | **5.2%** | 5.1% |
| 600 – 659 | **12.0** | 11.9 |
| 660 – 719 | **27.9** | 28.3 |
| 720 – 779 | **26.7** | 26.3 |
| 780 and over | **28.2** | 28.4 |
| **Total** | **100.0%** | 100.0% |

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*Oil and Gas Energy Lending*

The Company's energy lending portfolio is comprised of lending to the petroleum and natural gas sectors and totaled $330.5 million, or 1.9% of total loans at June 30, 2025, a decrease of $7.6 million from December 31, 2024, as shown in the table below.

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| | | | |
|:---|:---|:---|:---|
| *(In thousands)* | **June 30, 2025** | December 31, 2024 | **Unfunded commitments at June 30, 2025** |
| Upstream activities | $**252928** | $274265 | $**168363** |
| Mid-stream activities | **31049** | 36801 | **91844** |
| Downstream activities | **18903** | 9757 | **26104** |
| Support activities | **27596** | 17226 | **14065** |
| **Total energy lending portfolio** | $**330476** | $338049 | $**300376** |

---

*Shared National Credits*

The Company participates in credits of large, publicly traded companies which are defined by regulation as shared national credits, or SNCs. Regulations define SNCs as loans exceeding $100 million that are shared by three or more financial institutions. The Company typically participates in these loans when business operations are maintained in the local communities or regional markets and opportunities to provide other banking services are present. The balance of SNC loans totaled $1.7 billion and $1.6 billion at June 30, 2025 and December 31, 2024, respectively. Additional unfunded commitments at June 30, 2025 totaled $2.3 billion.

**Income Taxes**

Income tax expense was $42.4 million in the second quarter of 2025, compared to $37.0 million in the first quarter of 2025 and $38.6 million in the second quarter of 2024. The Company's effective tax rate, including the effect of non-controlling interest, was 21.8% in the second quarter of 2025, compared to 21.9% in the first quarter of 2025 and 21.7% in the second quarter of 2024.

On July 4, 2025, the One Big Beautiful Act ("OBBBA") was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cut and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We do not expect these items to have a significant impact on our financial statements, though we expect that some minor operational changes may be necessary to support new information reporting requirements.

**<u>Financial Condition</u>**

**Balance Sheet**

Total assets of the Company were $32.3 billion at June 30, 2025 and $32.0 billion at December 31, 2024. Earning assets (excluding the allowance for credit losses on loans and fair value adjustments on available for sale debt securities) amounted to $31.1 billion at June 30, 2025 and $30.9 billion at December 31, 2024, and consisted of 57% in loans and 32% in investment securities at June 30, 2025.

At June 30, 2025, total loans increased $445.4 million or 2.6%, compared to balances at December 31, 2024. The increase was mainly due to growth in business and business real estate loans of $274.9 million and $96.6 million, respectively. The increase in business loans was mainly due growth in commercial and industrial lending. In addition, consumer loans, which includes automobile, marine and RV, fixed rate home equity and other consumer loans, increased $84.5 million, mainly due to growth in other consumer loans. These increases were partly offset by a decrease in consumer credit cards loans of $19.8 million.

Total available for sale debt securities, excluding fair value adjustments, decreased $447.3 million at June 30, 2025 compared to December 31, 2024. Available for sale debt security sales, maturities and pay downs during this period totaled $993.9 million, partly offset by purchases of available for sale debt securities during this period of $532.4 million. The decline in available for sale debt securities was mainly the result of lower balances of mortgage-backed securities, asset-backed securities and state and municipal obligations, which decreased $289.3 million, $78.9 million and $48.1 million, respectively, at June 30, 2025 compared to December 31, 2024. At June 30, 2025, the duration of the available for sale investment portfolio

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was 4.2 years, and maturities and pay downs of approximately $1.3 billion are expected to occur during the next 12 months. The Company does not have any investment securities classified as held-to-maturity.

Total deposits at June 30, 2025 amounted to $25.5 billion, an increase of $200.4 million compared to December 31, 2024. The increase in deposits largely resulted from an increase in interest checking and money market deposit balances of $957.6 million. This increase was partly offset by a decrease in demand deposits of $757.1 million, mainly in business demand deposits (decrease of $819.8 million). The Company's borrowings totaled $2.6 billion at June 30, 2025, a decrease of $315.3 million from balances at December 31, 2024, mainly due to a decline in customer repurchase agreement balances.

**<u>Liquidity and Capital Resources</u>**

**Liquidity Management**

The Company's most liquid assets include balances at the Federal Reserve Bank, federal funds sold, and available for sale debt securities, as follows:

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| | | | |
|:---|:---|:---|:---|
| *(In thousands)* | **June 30, 2025** | June 30, 2024 | December 31, 2024 |
| Liquid assets: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Balances at the Federal Reserve Bank | $**2624264** | $2215057 | $2624553 |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal funds sold | **—** |  | 3000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Available for sale debt securities | **8915779** | 8534271 | 9136853 |
| **Total** | $**11540043** | $10749328 | $11764406 |

---

Interest earning balances at the Federal Reserve Bank, which have overnight maturities and are used for general liquidity purposes, totaled $2.6 billion at June 30, 2025 and decreased $289 thousand from December 31, 2024. At June 30, 2025, the Company did not have a balance of federal funds sold, which are funds lent to the Company's correspondent bank customers with overnight maturities. The fair value of the available for sale debt portfolio was $8.9 billion at June 30, 2025 and included an unrealized net loss of $764.4 million. The total net unrealized loss included net losses of $695.9 million on mortgage-backed and asset-backed securities and $59.8 million on state and municipal obligations.

The Company's available for sale debt securities portfolio has a diverse mix of high quality and liquid investment securities with a duration of 4.2 years at June 30, 2025. Approximately $1.3 billion of the Company's available for sale debt portfolio is expected to mature or pay down during the next 12 months, and these funds offer substantial resources to meet either new loan demand or offset potential reductions in the Company's deposit funding base. The Company pledges portions of its investment securities portfolio to secure public fund deposits, securities sold under agreements to repurchase, trust funds, letters of credit issued by the FHLB, and borrowing capacity at the FHLB and the Federal Reserve Bank. Total investment securities pledged for these purposes were as follows:

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| | | | |
|:---|:---|:---|:---|
| *(In thousands)* | **June 30, 2025** | June 30, 2024 | December 31, 2024 |
| Investment securities pledged for the purpose of securing: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal Reserve Bank borrowings | $**625132** | $1056405 | $840771 |
| &nbsp;&nbsp;&nbsp;&nbsp;FHLB borrowings and letters of credit | **1748130** | 970083 | 1473691 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities sold under agreements to repurchase \* | **2535105** | 2354023 | 2866468 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other deposits and swaps | **2025477** | 2131700 | 1755335 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total pledged securities | **6933844** | 6512211 | 6936265 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unpledged and available for pledging | **1980983** | 2020981 | 2175800 |
| &nbsp;&nbsp;&nbsp;&nbsp;Ineligible for pledging | **952** | 1079 | 24788 |
| **Total available for sale debt securities, at fair value** | $**8915779** | $8534271 | $9136853 |

---

&nbsp;&nbsp;&nbsp;&nbsp;*\* Includes securities pledged for collateral swaps outstanding at each period end shown in the table.*

The average loans to deposits ratio is a measure of a bank's liquidity, and the Company's average loans to deposits ratio was 69.8% for the six months ended June 30, 2025. Core customer deposits, defined as non-interest bearing, interest checking, savings, and money market deposit accounts totaled $23.1 billion and represented 90.7% of the Company's total deposits at June 30, 2025. These core deposits are normally less volatile, as they are often with customer relationships tied to other products offered by the Company, promoting long lasting relationships and stable funding sources. Core deposits increased $215.9 million at June 30, 2025 compared to December 31, 2024, primarily due to increases in commercial and wealth management deposits of $351.2 million and $12.7 million, respectively. While the Company considers core consumer and

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wealth management deposits less volatile, corporate deposits could decline if interest rates increase significantly, encouraging corporate customers to increase investing activities, or if the economy deteriorates and companies experience lower cash inflows, reducing deposit balances. If these corporate deposits decline, the Company's funding needs may be met by liquidity supplied by investment security maturities and pay downs expected to total $1.3 billion over the next year, as noted above. In addition, as shown in the table of collateral available for future advances below, the Company has borrowing capacity of $6.3 billion through advances from the FHLB and the Federal Reserve.

The Company also holds securities sold under agreements to repurchase ("resale agreements") which are an additional source of liquidity. At June 30, 2025, the Company's resale agreements totaled $850.0 million and mature from 2028 through 2030. Under these agreements, the Company lends funds to upstream financial institutions and holds marketable securities, safe-kept by a third-party custodian, as collateral. This collateral totaled $874.6 million in fair value at June 30, 2025.

Certificates of deposit of $100,000 or greater totaled $1.4 billion at June 30, 2025. These deposits are normally considered more volatile and higher costing, and comprised 5.4% of total deposits at June 30, 2025.

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| | | | |
|:---|:---|:---|:---|
| *(In thousands)* | **June 30, 2025** | June 30, 2024 | December 31, 2024 |
| Core deposit base: |  |  |  |
| Non-interest bearing | $**7393559** | $7492751 | $8150669 |
| Interest checking | **8121371** | 6870344 | 7301288 |
| Savings and money market | **7606178** | 7497366 | 7453283 |
| **Total** | $**23121108** | $21860461 | $22905240 |

---

During the third quarter of 2024, the Company issued $100.0 million of short-term brokered certificates of deposit, which all matured by December 31, 2024. The Company may occasionally issue brokered certificates of deposit to test the reliability of this potential funding source. While it is not clear how many brokered certificates of deposit the market would allow the Company to issue, the Company believes brokered certificates of deposits may be an additional, reliable source of liquidity during periods of stress in the banking industry.

Other important components of liquidity are the level of borrowings from third party sources and the availability of future credit. During 2025, the Company's outside borrowings have mainly been comprised of federal funds purchased and repurchase agreements, as follows:

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| | | | |
|:---|:---|:---|:---|
| *(In thousands)* | **June 30, 2025** | June 30, 2024 | December 31, 2024 |
| Borrowings: |  |  |  |
| Federal funds purchased | $**125975** | $254720 | $123715 |
| Securities sold under agreements to repurchase | **2470486** | 2296679 | 2803043 |
| Other debt | **15049** | 3984 | 56 |
| **Total** | $**2611510** | $2555383 | $2926814 |

---

Federal funds purchased, which totaled $126.0 million at June 30, 2025, are unsecured overnight borrowings obtained mainly from upstream correspondent banks with which the Company maintains approved lines of credit. At June 30, 2025, the Company had approved lines of credit totaling $4.5 billion. Since these borrowings are unsecured and limited by market trading activity, their availability may be less certain than collateralized sources of borrowings. Retail repurchase agreements are offered to customers wishing to earn interest in highly liquid balances and are used by the Company as a funding source considered to be stable, but short-term in nature. Repurchase agreements are collateralized by securities in the Company's investment portfolio. Total repurchase agreements at June 30, 2025 were comprised of non-insured customer funds totaling $2.5 billion, and securities pledged as collateral for these retail agreements totaled $2.5 billion at June 30, 2025. The Company also borrows on a secured basis through advances from the FHLB. The advances are generally short-term, fixed interest rate borrowings. There were no advances outstanding from the FHLB at June 30, 2025.

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The Company pledges certain assets, including loans and investment securities, to both the FRB and the FHLB as security to establish lines of credit and borrow from these entities. Based on the amount and type of collateral pledged, the FHLB establishes a collateral value from which the Company may draw advances against the collateral. Additionally, this collateral is used to enable the FHLB to issue letters of credit in favor of public fund depositors of the Company. The FRB also establishes a collateral value of assets pledged and permits borrowings from the discount window. The following table reflects the collateral value of assets pledged, borrowings, and letters of credit outstanding, in addition to the estimated future funding capacity available to the Company at June 30, 2025.

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| | | | |
|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
| *(In thousands)* | <br>FHLB | Federal Reserve | <br>Total |
| Total collateral value established by FHLB and FRB | $3616503 | $2801286 | $6417789 |
| Letters of credit issued | (100300) |  | (100300) |
| **Available for future advances** | $3516203 | $2801286 | $6317489 |

---

The Company receives outside ratings from both Standard & Poor's and Moody's on the consolidated company and its subsidiary bank, Commerce Bank. These ratings are as follows:

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| | | |
|:---|:---|:---|
| | Standard & Poor's | Moody's |
| **Commerce Bancshares, Inc.** |  |  |
| &nbsp;&nbsp;&nbsp;Issuer rating | A- |  |
| &nbsp;&nbsp;&nbsp;Rating outlook | Stable |  |
| **Commerce Bank** |  |  |
| &nbsp;&nbsp;&nbsp;Issuer rating | A | A3 |
| &nbsp;&nbsp;&nbsp;Baseline credit assessment |  | a2 |
| &nbsp;&nbsp;&nbsp;Short-term rating | A-1 | P-1 |
| &nbsp;&nbsp;&nbsp;Rating outlook | Stable | Stable |

---

The Company considers these ratings to be indications of a sound capital base and strong liquidity and believes that these ratings would help ensure the ready marketability of its commercial paper, should the need arise. No commercial paper has been outstanding during the past ten years. The Company has no subordinated or hybrid debt instruments which would affect future borrowing capacity. Because of its lack of significant long-term debt, the Company believes that through its Commercial Tradable Products division or in other public debt markets, it could generate additional liquidity from sources such as jumbo certificates of deposit, privately placed corporate notes or other forms of debt.

The cash flows from the operating, investing and financing activities of the Company resulted in a net decrease in cash, cash equivalents and restricted cash of $229.7 million during the first six months of 2025, as reported in the consolidated statements of cash flows in this report. Operating activities, consisting mainly of net income adjusted for certain non-cash items, provided cash flow of $249.8 million and have historically been a stable source of funds. Investing activities, which occur mainly in the loan and investment securities portfolios, used cash of $250.7 million. Activity in the investment securities portfolio used cash of $466.5 million from a net increase in loans and $225.0 million from purchases of securities under agreements to resell (net of repayments). These uses of cash were partly balanced by sales, maturities, and pay downs (net of purchases) of investment securities, which provided cash of $463.9 million. Investing activities are somewhat unique to financial institutions in that, while large sums of cash flow are normally used to fund growth in investment securities, loans, or other bank assets, they are normally dependent on the financing activities described below. Financing activities used cash of $228.7 million, largely resulting from federal funds purchased and securities sold under agreements to repurchases, which used cash of $330.3 million during the first six months of 2025. This decrease was largely offset by a net increase of $230.6 million in deposits. Additionally, purchases of treasury stock and cash dividends (including distributions to non-controlling interest) used cash of $67.0 million and $77.0 million, respectively.

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**Capital Management**

The Company met all capital adequacy requirements and had regulatory capital ratios in excess of the levels established for well-capitalized institutions at June 30, 2025 and December 31, 2024, as shown in the following table.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *(Dollars in thousands)* | **June 30, 2025** | December 31, 2024 | Minimum Capital Requirement | Capital Conservation Buffer | Minimum Ratios Requirement including Capital Conservation Buffer | Minimum Ratios<br>for<br>Well-Capitalized<br>Banks \* |
| Risk-adjusted assets | $**23751533** | $23500396 |  |  |  |  |
| Tier I common risk-based capital | **4079249** | 3926446 |  |  |  |  |
| Tier I risk-based capital | **4079249** | 3926446 |  |  |  |  |
| Total risk-based capital | **4260514** | 4108270 |  |  |  |  |
| Tier I common risk-based capital ratio | **17.17%** | 16.71% | 4.50% | 2.50% | 7.00% | 6.50% |
| Tier I risk-based capital ratio | **17.17** | 16.71 | 6.00 | 2.50 | 8.50 | 8.00 |
| Total risk-based capital ratio | **17.94** | 17.48 | 8.00 | 2.50 | 10.50 | 10.00 |
| Tier I leverage ratio | **12.75** | 12.26 | 4.00 | N/A | 4.00 | 5.00 |

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*\*Under Prompt Corrective Action requirements*

The Company is subject to a 2.5% capital conservation buffer, which is an amount above the minimum ratios under capital adequacy guidelines, and is intended to absorb losses during periods of economic stress. Failure to maintain the buffer will result in constraints on dividends, share repurchases, and executive compensation.

In the first quarter of 2020, the interim final rule of the Federal Reserve Bank and other U.S. banking agencies became effective, providing banks that adopted CECL (ASU 2016-13) during the 2020 calendar year the option to delay recognizing the estimated impact on regulatory capital until after a two year deferral period, followed by a three year transition period. In connection with the adoption of CECL on January 1, 2020, the Company elected to utilize this option. As a result, the two year deferral period for the Company extended through December 31, 2021. Beginning on January 1, 2022, the Company was required to phase in 25% of the previously deferred estimated capital impact of CECL, with an additional 25% to be phased in at the beginning of each subsequent year until fully phased in, which was during the first quarter of 2025.

The Company maintains a treasury stock buyback program under authorizations by its Board of Directors (the Board) and periodically purchases stock in the open market. During the six months ended June 30, 2025, the Company purchased 1,026,705 shares at an average price of $63.88 in open market purchases and through stock-based compensation transactions. At June 30, 2025, 1,904,943 shares remained available for purchase under the current Board authorization.

The Company's common stock dividend policy reflects its earnings outlook, desired payout ratios, the need to maintain adequate capital levels and alternative investment options. The Company paid a $.275 per share cash dividend on its common stock in the second quarter of 2025, which was a 7.0% increase compared to its 2024 quarterly dividend.

**Material Cash Requirements, Commitments, Off-Balance Sheet Arrangements and Contingencies**

The Company's material cash requirements include commitments for contractual obligations (both short-term and long-term), commitments to extend credit, and off-balance sheet arrangements. The Company's material cash requirements for the next 12 months are primarily to fund loan growth. Additionally, the Company will utilize cash to fund deposit maturities and withdrawals that may occur in the next 12 months. Other contractual obligations, purchase commitments, lease obligations, and unfunded commitments may require cash payments by the Company within the next 12 months, and these are further discussed in the Company's 2024 Annual Report on Form 10-K. Further discussion of the Company's longer-term material cash obligations and sources for fulfilling those obligations is below.

In the normal course of business, various commitments and contingent liabilities arise that are not required to be recorded on the balance sheet. The most significant of these are loan commitments, which at June 30, 2025 totaled $15.9 billion (including $6.0 billion in unused, approved credit card lines). In addition, the Company enters into standby and commercial letters of credit. The contractual amount of standby and commercial letters of credit totaled $596.0 million and $1.7 million, respectively, at June 30, 2025. As many commitments expire unused or only partially used, these totals do not necessarily reflect future cash requirements. The allowance for these commitments is recorded in the Company's liability for unfunded lending commitments within other liabilities on its consolidated balance sheets. At June 30, 2025, the liability for unfunded

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lending commitments totaled $16.0 million. See further discussion of the liability for unfunded lending commitments in Note 2 to the consolidated financial statements.

The Company regularly purchases various state tax credits arising from third party property redevelopment. These credits are either resold to third parties at a profit or retained for use by the Company. During the first six months of 2025, purchases and sales of tax credits amounted to $118.2 million and $94.6 million, respectively. Fees from sales of tax credits were $3.7 million for the six months ended June 30, 2025, compared to $2.9 million in the same period last year. At June 30, 2025, the Company expected to fund outstanding purchase commitments of $110.6 million during the remainder of 2025 and had purchase commitments of $390.8 million that it expects to fund from 2026 through 2029.

The Company continued to maintain a strong liquidity position throughout the first six months of 2025. Through the various sources of liquidity described above, the Company maintains a liquidity position that it believes will adequately satisfy its financial obligations.

**<u>Segment Results</u>**

The table below is a summary of segment pre-tax income results for the first six months of 2025 and 2024.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| <br>*(Dollars in thousands)* | Consumer | Commercial | Wealth | Segment<br>Totals | Other/ Elimination | Consolidated Totals |
| **Six Months Ended June 30, 2025** |  |  |  |  |  |  |
| Net interest income | $**252352** | $**260878** | $**45195** | $**558425** | $**(9176)** | $**549249** |
| Provision for credit losses | **(19819)** | **(640)** | **(18)** | **(20477)** | **393** | **(20084)** |
| Non-interest income | **47691** | **144980** | **127885** | **320556** | **4006** | **324562** |
| Investment securities gains (losses), net | **—** | **—** | **—** | **—** | **(7154)** | **(7154)** |
| Non-interest expense | **(166082)** | **(212057)** | **(82102)** | **(460241)** | **(22572)** | **(482813)** |
| Income before income taxes | $**114142** | $**193161** | $**90960** | $**398263** | $**(34503)** | $**363760** |
| **Six Months Ended June 30, 2024** |  |  |  |  |  |  |
| Net interest income | $255374 | $252223 | $45424 | $553021 | $(41773) | $511248 |
| Provision for credit losses | (17925) | (766) | 4 | (18687) | 8432 | (10255) |
| Non-interest income | 48907 | 130382 | 117999 | 297288 | 3804 | 301092 |
| Investment securities gains (losses), net |  |  |  |  | 2974 | 2974 |
| Non-interest expense | (160713) | (201345) | (78453) | (440511) | (37400) | (477911) |
| Income before income taxes | $125643 | $180494 | $84974 | $391111 | $(63963) | $327148 |
| Increase (decrease) in income before income taxes: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amount | $(11501) | $12667 | $5986 | $7152 | $29460 | $36612 |
| &nbsp;&nbsp;&nbsp;&nbsp;Percent | (9.2)% | 7.0% | 7.0% | 1.8% | (46.1)% | 11.2% |

---

*Consumer*

For the six months ended June 30, 2025, income before income taxes for the Consumer segment decreased $11.5 million, or 9.2%, compared to the first six months of 2024. The decrease in income before income taxes was due to increases in non-interest expense of $5.4 million, or 3.3%, and the provision for credit losses of $1.9 million and declines in net interest income of $3.0 million, or 1.2%, and non-interest income of $1.2 million, or 2.5%. Net interest income declined mainly due to lower net allocated funding credits assigned to the Consumer segment's loan and deposit portfolios of $8.2 million. This decrease was partly offset by lower deposit interest expense of $5.3 million. Non-interest income decreased mainly due to lower net bank card fees (mainly credit and debit card fees). Non-interest expense increased over the same period in the previous year mainly due to higher marketing, miscellaneous losses, data processing and software, and supplies expense. In addition, allocated support costs increased due to higher allocated costs for retail administration and operations. The increase in the provision for credit losses over the first six months of 2024 was mainly due to higher auto and consumer credit card loan net charge-offs.

*Commercial*

For the six months ended June 30, 2025, income before income taxes for the Commercial segment increased $12.7 million, or 7.0%, compared to the same period in the previous year. This increase was mainly due to higher net interest income and non-interest income, partly offset by higher non-interest expense. Net interest income increased $8.7 million, or 3.4%, mainly due to lower interest expense on deposits and customer repurchase agreements of $13.1 million and $4.3 million, respectively, coupled with higher net allocated funding credits of $10.5 million. These increases to income were partly offset by lower loan

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<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

interest income of $19.9 million. Non-interest income increased $14.6 million, or 11.2%, over the previous year mainly due to higher gains on asset sales and growth in deposit account fees (mainly corporate cash management fees) and capital market fees (mainly underwriting and trading securities). These increases were partly offset by a decrease in net bank card fees (mainly corporate card fees). Non-interest expense increased $10.7 million, or 5.3%, mainly due to higher legal fees, salaries and benefits expense and allocated service and support costs for commercial payments and product support, commercial loan servicing and operations, and branch employee expense. The provision for credit losses decreased $126 thousand from the same period last year, mainly due to commercial and industrial loan net recoveries.

*Wealth*

Wealth segment pre-tax profitability for the six months ended June 30, 2025 increased $6.0 million, or 7.0%, over the same period in the previous year. Net interest income decreased $229 thousand, or .5%, mainly due to a $5.0 million decrease in net allocated funding credits. This decrease was largely offset by a $3.0 million increase in loan interest income and a $1.8 million decrease deposit interest expense. Non-interest income increased $9.9 million, or 8.4%, over the prior year largely due to higher private client and institutional trust fees and brokerage fees (mainly annuity and advisory fees). Non-interest expense increased $3.6 million, or 4.7%, mainly due to higher salaries and benefits, data processing and software, and allocated support costs for information technology. The provision for credit losses increased $22 thousand over the same period last year.

The Other/Elimination category in the preceding table includes the activity of various support and overhead operating units of the Company, in addition to the investment securities portfolio and other items not allocated to the segments. In accordance with the Company's transfer pricing procedures, the difference between the total provision for credit losses and total net charge-offs/recoveries is not allocated to a business segment and is included in this category. The pre-tax profitability in this category was $29.5 million higher than in the same period last year. Unallocated securities losses were $7.2 million in the first six months of 2025 compared to gains of $3.0 million in 2024. Also, the unallocated provision for credit losses decreased $8.0 million, primarily driven by a decrease in the liability for unfunded lending commitments, partly offset by an increase in the provision for credit losses on loans, which are both not allocated to the segments for management reporting purposes. Net charge-offs are allocated to the segments when incurred for management reporting purposes. The provision for credit losses on loans in the first six months of 2025 was $23.0 million, or $2.5 million higher than net charge-offs, due to an increase in the allowance for credit losses on loans. In the comparable period last year, the provision for credit losses on loans was $14.8 million, or $3.8 million lower than net charge-offs, due to a decrease in the allowance for credit losses on loans. For the six months ended June 30, 2025, the Company's provision on unfunded lending commitments was a benefit of $2.9 million. Additionally, net interest income increased $32.6 million and non-interest income increased $202 thousand, while non-interest expense decreased $14.8 million.

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**<u>Impact of Recently Issued Accounting Standards</u>**

***Income Taxes*** The FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures", in December 2023. The amendments in this Update require additional disclosures regarding the rate reconciliation and income taxes paid. This Update also removed certain existing disclosure requirements. This Update is effective for annual periods beginning January 1, 2025. Early adoption is permitted. The amendments in this Update should be applied on a prospective basis, though retrospective application is permitted. Other than the inclusion of additional disclosures, the adoption is not expected to have a significant effect on the Company's consolidated financial statements.

***Income Statement Reporting*** The FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" in November 2024. The amendments in this Update require new disclosures providing further detail of a company's income statement expense items. This Update is effective for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028. Early adoption is permitted. The amendments in this Update should be applied on a prospective basis. Other than the inclusion of additional disclosures, the adoption is not expected to have a significant effect on the Company's consolidated financial statements.

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**AVERAGE BALANCE SHEETS — AVERAGE RATES AND YIELDS** 

**Three Months Ended June 30, 2025 and 2024** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Second Quarter 2025** | **Second Quarter 2025** | **Second Quarter 2025** | Second Quarter 2024 | Second Quarter 2024 | Second Quarter 2024 |
| *(Dollars in thousands)* | **Average Balance** | **Interest Income/Expense** | **Avg. Rates Earned/Paid** | Average Balance | Interest Income/Expense | Avg. Rates Earned/Paid |
| **ASSETS:** |  |  |  |  |  |  |
| Loans: |  |  |  |  |  |  |
| Business<sup>(A)</sup> | $**6247252** | $**89052** | **5.72%** | $5980364 | $90786 | 6.11% |
| Real estate — construction and land | **1430758** | **26377** | **7.39** | 1471504 | 30588 | 8.36 |
| Real estate — business | **3692405** | **54453** | **5.92** | 3666057 | 57104 | 6.26 |
| Real estate — personal | **3048895** | **32697** | **4.30** | 3044943 | 30590 | 4.04 |
| Consumer | **2148666** | **34442** | **6.43** | 2127650 | 34678 | 6.56 |
| Revolving home equity | **362312** | **6691** | **7.41** | 326204 | 6228 | 7.68 |
| Consumer credit card | **559858** | **18402** | **13.18** | 552896 | 19186 | 13.96 |
| Overdrafts | **5663** | **—** | **—** | 4856 |  |  |
| **Total loans** | **17495809** | **262114** | **6.01** | 17174474 | 269160 | 6.30 |
| Loans held for sale | **1741** | **40** | **9.22** | 2455 | 46 | 7.54 |
| Investment securities: |  |  |  |  |  |  |
| U.S. government and federal agency obligations | **2623896** | **28011** | **4.28** | 1201954 | 15057 | 5.04 |
| Government-sponsored enterprise obligations | **55038** | **326** | **2.38** | 55634 | 330 | 2.39 |
| State and municipal obligations<sup>(A)</sup> | **780063** | **3978** | **2.05** | 1069934 | 5311 | 2.00 |
| Mortgage-backed securities | **4641295** | **24097** | **2.08** | 5553656 | 28816 | 2.09 |
| Asset-backed securities | **1585364** | **14736** | **3.73** | 1785598 | 11105 | 2.50 |
| Other debt securities | **237385** | **1741** | **2.94** | 364828 | 1826 | 2.01 |
| Trading debt securities<sup>(A)</sup> | **51131** | **590** | **4.63** | 46565 | 573 | 4.95 |
| Equity securities<sup>(A)</sup> | **54472** | **850** | **6.26** | 127584 | 893 | 2.82 |
| Other securities<sup>(A)</sup> | **216560** | **6280** | **11.63** | 228403 | 7497 | 13.20 |
| **Total investment securities** | **10245204** | **80609** | **3.16** | 10434156 | 71408 | 2.75 |
| Federal funds sold | **158** | **2** | **5.08** | 1612 | 27 | 6.74 |
| Securities purchased under agreements to resell | **850000** | **8516** | **4.02** | 303586 | 2421 | 3.21 |
| Interest earning deposits with banks | **2036803** | **22636** | **4.46** | 2099777 | 28630 | 5.48 |
| **Total interest earning assets** | **30629715** | **373917** | **4.90** | 30016060 | 371692 | 4.98 |
| Allowance for credit losses on loans | **(166391)** |  |  | (159791) |  |  |
| Unrealized gain (loss) on debt securities | **(838028)** |  |  | (1272127) |  |  |
| Cash and due from banks | **362816** |  |  | 267530 |  |  |
| Premises and equipment, net | **500532** |  |  | 479431 |  |  |
| Other assets | **808415** |  |  | 904847 |  |  |
| **Total assets** | $**31297059** |  |  | $30235950 |  |  |
| **LIABILITIES AND EQUITY:** |  |  |  |  |  |  |
| Interest bearing deposits: |  |  |  |  |  |  |
| Savings | $**1303391** | **168** | **.05** | $1328989 | 196 | .06 |
| Interest checking and money market | **13901634** | **51667** | **1.49** | 13162118 | 56633 | 1.73 |
| Certificates of deposit of less than $100,000 | **984845** | **8445** | **3.44** | 1003798 | 10523 | 4.22 |
| Certificates of deposit of $100,000 and over | **1371428** | **12914** | **3.78** | 1492592 | 16892 | 4.55 |
| **Total interest bearing deposits** | **17561298** | **73194** | **1.67** | 16987497 | 84244 | 1.99 |
| Borrowings: |  |  |  |  |  |  |
| Federal funds purchased | $**129891** | $**1416** | **4.37** | 265042 | $3569 | 5.42 |
| Securities sold under agreements to repurchase | **2371031** | **16853** | **2.85** | 2254849 | 19293 | 3.44 |
| Other borrowings<sup>(B)</sup> | **2748** | **26** | **3.79** | 838 | 8 | 3.84 |
| **Total borrowings** | **2503670** | **18295** | **2.93** | 2520729 | 22870 | 3.65 |
| **Total interest bearing liabilities** | **20064968** | **91489** | **1.83%** | 19508226 | 107114 | 2.21% |
| Non-interest bearing deposits | **7356882** |  |  | 7297955 |  |  |
| Other liabilities | **360204** |  |  | 399080 |  |  |
| Equity | **3515005** |  |  | 3030689 |  |  |
| **Total liabilities and equity** | $**31297059** |  |  | $30235950 |  |  |
| **Net interest margin (FTE)** |  | $**282428** |  |  | $264578 |  |
| **Net yield on interest earning assets** |  |  | **3.70%** |  |  | 3.55% |

---

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

*(B) Interest expense capitalized on construction projects in 2024 is not deducted from the interest expense shown above. There was no interest expense &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; capitalized in 2025.*

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**AVERAGE BALANCE SHEETS — AVERAGE RATES AND YIELDS** 

**Six Months Ended June 30, 2025 and 2024** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Six Months 2025** | **Six Months 2025** | **Six Months 2025** | Six Months 2024 | Six Months 2024 | Six Months 2024 |
| *(Dollars in thousands)* | **Average Balance** | **Interest Income/Expense** | **Avg. Rates Earned/Paid** | Average Balance | Interest Income/Expense | Avg. Rates Earned/Paid |
| **ASSETS:** |  |  |  |  |  |  |
| Loans: |  |  |  |  |  |  |
| Business<sup>(A)</sup> | $**6177108** | $**175616** | **5.73%** | $5926945 | $179424 | 6.09% |
| Real estate — construction and land | **1423096** | **51863** | **7.35** | 1472029 | 61342 | 8.38 |
| Real estate — business | **3680187** | **107656** | **5.90** | 3696850 | 115133 | 6.26 |
| Real estate — personal | **3047394** | **64842** | **4.29** | 3038068 | 60365 | 4.00 |
| Consumer | **2115696** | **67908** | **6.47** | 2105070 | 67804 | 6.48 |
| Revolving home equity | **360508** | **13116** | **7.34** | 324139 | 12391 | 7.69 |
| Consumer credit card | **560194** | **37049** | **13.34** | 557894 | 38936 | 14.03 |
| Overdrafts | **5761** | **—** | **—** | 6276 |  |  |
| **Total loans** | **17369944** | **518050** | **6.01** | 17127271 | 535395 | 6.29 |
| Loans held for sale | **1663** | **63** | **7.64** | 2302 | 86 | 7.51 |
| Investment securities: |  |  |  |  |  |  |
| U.S. government and federal agency obligations | **2605522** | **54074** | **4.19** | 1026805 | 19459 | 3.81 |
| Government-sponsored enterprise obligations | **55183** | **654** | **2.39** | 55643 | 661 | 2.39 |
| State and municipal obligations<sup>(A)</sup> | **792146** | **8050** | **2.05** | 1200371 | 11830 | 1.98 |
| Mortgage-backed securities | **4714293** | **48712** | **2.08** | 5727992 | 60904 | 2.14 |
| Asset-backed securities | **1620338** | **28851** | **3.59** | 1935324 | 23504 | 2.44 |
| Other debt securities | **247703** | **3456** | **2.81** | 434016 | 4236 | 1.96 |
| Trading debt securities<sup>(A)</sup> | **44750** | **1059** | **4.77** | 43524 | 1106 | 5.11 |
| Equity securities<sup>(A)</sup> | **55743** | **1978** | **7.16** | 70176 | 1707 | 4.89 |
| Other securities<sup>(A)</sup> | **224964** | **10799** | **9.68** | 225049 | 14686 | 13.12 |
| **Total investment securities** | **10360642** | **157633** | **3.07** | 10718900 | 138093 | 2.59 |
| Federal funds sold | **1118** | **31** | **5.59** | 1105 | 37 | 6.73 |
| Securities purchased under agreements to resell | **819613** | **15934** | **3.92** | 322260 | 4055 | 2.53 |
| Interest earning deposits with banks | **2211682** | **48885** | **4.46** | 2019079 | 55062 | 5.48 |
| **Total interest earning assets** | **30764662** | **740596** | **4.85** | 30190917 | 732728 | 4.88 |
| Allowance for credit losses on loans | **(164300)** |  |  | (160841) |  |  |
| Unrealized gain (loss) on debt securities | **(886273)** |  |  | (1273126) |  |  |
| Cash and due from banks | **377047** |  |  | 274570 |  |  |
| Premises and equipment, net | **498804** |  |  | 478656 |  |  |
| Other assets | **809106** |  |  | 930536 |  |  |
| **Total assets** | $**31399046** |  |  | $30440712 |  |  |
| **LIABILITIES AND EQUITY:** |  |  |  |  |  |  |
| Interest bearing deposits: |  |  |  |  |  |  |
| Savings | $**1298808** | **335** | **.05** | $1331486 | 391 | .06 |
| Interest checking and money market | **13904216** | **103903** | **1.51** | 13188694 | 112018 | 1.71 |
| Certificates of deposit of less than $100,000 | **988316** | **17377** | **3.55** | 990301 | 20714 | 4.21 |
| Certificates of deposit of $100,000 and over | **1367563** | **26233** | **3.87** | 1543951 | 34988 | 4.56 |
| **Total interest bearing deposits** | **17558903** | **147848** | **1.70** | 17054432 | 168111 | 1.98 |
| Borrowings: |  |  |  |  |  |  |
| Federal funds purchased | $**129120** | $**2800** | **4.37** | $296629 | 7988 | 5.42 |
| Securities sold under agreements to repurchase | **2546156** | **36077** | **2.86** | 2383404 | 40731 | 3.44 |
| Other borrowings<sup>(B)</sup> | **1688** | **27** | **3.23** | 457 | 8 | 3.52 |
| **Total borrowings** | **2676964** | **38904** | **2.93** | 2680490 | 48727 | 3.66 |
| **Total interest bearing liabilities** | **20235867** | **186752** | **1.86%** | 19734922 | 216838 | 2.21% |
| Non-interest bearing deposits | **7327945** |  |  | 7313278 |  |  |
| Other liabilities | **390618** |  |  | 404695 |  |  |
| Equity | **3444616** |  |  | 2987817 |  |  |
| **Total liabilities and equity** | $**31399046** |  |  | $30440712 |  |  |
| **Net interest margin (FTE)** |  | $**553844** |  |  | $515890 |  |
| **Net yield on interest earning assets** |  |  | **3.63%** |  |  | 3.44% |

---

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

*(B) Interest expense capitalized on construction projects in 2024 is not deducted from the interest expense shown above. There was no interest expense &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; capitalized in 2025.*

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**<u>Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</u>**

Interest rate risk management focuses on maintaining consistent growth in net interest income within Board-approved policy limits. The Company primarily uses earnings simulation models to analyze net interest income sensitivity to movement in interest rates. The Company performs monthly simulations that model interest rate movements and risk in accordance with changes to its balance sheet composition. For further discussion of the Company's market risk, see the Interest Rate Sensitivity section of Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's 2024 Annual Report on Form 10-K.

The table below shows the effects of gradual shifts in interest rates over a twelve month period on the Company's net interest income versus the Company's net interest income in a flat rate scenario. The simulation presents three rising rate scenarios and three falling rate scenarios, and in these scenarios, rates are assumed to change evenly over 12 months, while the balance sheet remains flat.

The Company utilizes this simulation both for monitoring interest rate risk and for liquidity planning purposes. While the future effects of rising and falling rates on deposit balances cannot be known, the Company maintains a practice of running multiple rate scenarios, when relevant, to better understand interest rate risk and its effect on the Company's performance.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | March 31, 2025 | March 31, 2025 |
| *(Dollars in millions)* | **$ Change in**<br>**Net Interest**<br>**Income** | **% Change in**<br>**Net Interest**<br>**Income** | $ Change in<br>Net Interest<br>Income | % Change in<br>Net Interest<br>Income |
| 300 basis points rising | $**34.5** | **3.11%** | $18.4 | 1.68% |
| 200 basis points rising | **27.8** | **2.51** | 21.2 | 1.94 |
| 100 basis points rising | **17.9** | **1.62** | 23.2 | 2.12 |
| 100 basis points falling | $**(23.4)** | **(2.11)%** | $(20.7) | (1.89)% |
| 200 basis points falling | **(43.3)** | **(3.90)** | (37.7) | (3.45) |
| 300 basis points falling | **(55.6)** | **(5.02)** | (47.1) | (4.31) |

---

Under the simulation, in the three rising rate scenarios and three falling rate scenarios, interest rate risk is more asset sensitive when compared to the scenarios in the previous quarter. This change was primarily due to fluctuations in average interest earning cash balances at the Federal Reserve and lower premium money market deposit account promotional rates, partly offset by growth in those deposit account balances.

The comparison above provides insight into potential effects of changes in rates on net interest income. The Company believes that its approach to interest rate risk has appropriately considered its susceptibility to both rising and falling rates and has adopted strategies which minimize the impact of interest rate risk.

**<u>Item 4. CONTROLS AND PROCEDURES</u>**

An evaluation was performed under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of June 30, 2025. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective. There were no changes in the Company's internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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**PART II: OTHER INFORMATION**

**<u>Item 1. LEGAL PROCEEDINGS</u>**

The information required by this item is set forth in Part I, Item 1 under Note 17, Legal and Regulatory Proceedings.

**<u>Item 1A. RISK FACTORS</u>**

The section titled Risk Factors in Part I, Item 1A of the Company's 2024 Annual Report on Form 10-K included a discussion of the many risks and uncertainties the Company faces, any one or more of which could have a material adverse effect on its business, results of operations, financial condition (including capital and liquidity), prospects, or the value of or return on an investment in the Company. The information presented below provides an update to, and should be read in conjunction with the risk factors and other information contained in Part I, Item 1A of the Company's 2024 Annual Report on Form 10-K.

As a result of the Company entering into the Merger Agreement with FineMark, certain risk factors have been identified:

***The Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed.***

The Merger Agreement is subject to a number of conditions which must be fulfilled in order to complete the Merger. Those conditions include, among other things: (i) adoption and approval of the Merger Agreement by FineMark's shareholders; (ii) the receipt of required regulatory approvals, including the approval of the Federal Reserve and the Missouri Division of Finance; and (iii) the absence of any law, order, injunction, decree or other law preventing or making illegal the completion of the Merger or any of the other transactions contemplated by the Merger Agreement. Each party's obligation to complete the Merger is also subject to certain additional customary conditions, including (a) subject to applicable materiality standards, the accuracy of the representations and warranties of the other party, (b) the performance in all material respects by the other party of its obligations under the Merger Agreement and (c) the receipt by each party of an opinion from its counsel to the effect that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986.

These conditions to the closing of the Merger may not be fulfilled in a timely manner or at all, and, accordingly, the Merger may not be completed. In addition, the parties can mutually decide to terminate the Merger Agreement at any time, before or after the requisite FineMark shareholder approval, or the Company or FineMark may elect to terminate the Merger Agreement in certain other circumstances.

***Regulatory approvals may not be received, may take longer than expected, or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the Merger.***

Before the Merger and the Bank Merger may be completed, various approvals, consents and non-objections must be obtained from the Federal Reserve, the Missouri Division of Finance, and other regulatory authorities in the United States. In determining whether to grant these approvals, such regulatory authorities consider a variety of factors, including the regulatory standing of each party. These approvals could be delayed or not obtained at all, including due to an adverse development in either party's regulatory standing or in any other factors considered by regulators when granting such approvals; governmental, political, or community group inquiries, investigations, or opposition; or changes in legislation or the political environment generally.

The approvals that are granted may impose terms and conditions, limitations, obligations, or costs, or place restrictions on the conduct of the combined company's business or require changes to the terms of the transactions contemplated by the Merger Agreement. There can be no assurance that regulators will not impose any such conditions, limitations, obligations, or restrictions and that such conditions, limitations, obligations, or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the Merger Agreement, imposing additional material costs on or materially limiting the revenues of the combined company following the Merger or otherwise reducing the anticipated benefits of the Merger if the Merger was consummated successfully within the expected timeframe. In addition, there can be no assurance that any such conditions, terms, obligations, or restrictions will not result in the delay or abandonment of the Merger. Additionally, the completion of the Merger is conditioned on the absence of certain orders, injunctions or decrees by any court or regulatory agency of competent jurisdiction that would prohibit or make illegal the completion of any of the transactions contemplated by the Merger Agreement.

***Failure to complete the Merger could negatively impact the Company.***

If the Merger is not completed for any reason, including as a result of FineMark's shareholders failing to adopt and approve the Merger Agreement, there may be various adverse consequences, and the Company may experience negative reactions from the

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financial markets and from its customers and employees. For example, the Company's business may have been impacted adversely by the failure to pursue other beneficial opportunities due to the focus of management on the Merger, without realizing any of the anticipated benefits of completing the Merger. Also, the Company has devoted significant internal resources to the pursuit of the Merger and the expected benefit of those resource allocations would be lost if the Merger is not completed. Additionally, if the Merger Agreement is terminated, the market price of the Company's common stock could decline to the extent that current market prices reflect a market assumption that the Merger will be beneficial and will be completed.

***Combining the two companies may be more difficult, costly, or time consuming than expected and the anticipated benefits and cost savings of the Merger may not be realized.***

The Company and FineMark have operated and, until the completion of the Merger, will continue to operate independently. The success of the Merger, including anticipated benefits and cost savings, will depend, in part, on the Company's ability to successfully combine and integrate the businesses of the Company and FineMark in a manner that permits growth opportunities and does not materially disrupt the existing customer relations nor result in decreased revenues due to loss of customers. It is possible that the integration process could result in the disruption of either company's ongoing businesses or inconsistencies in standards, controls, procedures, and policies that adversely affect the combined company's ability to maintain relationships with clients, customers, depositors, and employees or to achieve the anticipated benefits and cost savings of the Merger. If the Company experiences difficulties with the integration process, the anticipated benefits of the Merger may not be realized fully or at all, or may take longer to realize than expected. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on each of the Company and FineMark during this transition period and for an undetermined period after completion of the Merger on the combined company. An inability to realize the full extent of the anticipated benefits of the Merger and the other transactions contemplated by the Merger Agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, levels of expenses and operating results of the Company following the completion of the Merger, which may adversely affect the value of the common stock of the Company following the completion of the Merger.

***The combined company may be unable to retain the Company and/or FineMark personnel successfully after the Merger is completed.***

The success of the Merger will depend in part on the combined company's ability to retain the talent and dedication of key employees currently employed by the Company or FineMark. It is possible that these employees may decide not to remain with the Company or FineMark, as applicable, while the Merger is pending or with the combined company after the Merger is consummated. If the Company and FineMark are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, the Company and FineMark could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs. In addition, following the Merger, if key employees terminate their employment, the combined company's business activities may be adversely affected, and management's attention may be diverted from successfully hiring suitable replacements, all of which may cause the combined company's business to suffer. The Company and FineMark also may not be able to locate or retain suitable replacements for any key employees who leave either company.

***The Company has incurred and is expected to incur substantial costs related to the Merger.***

Both the Company and FineMark will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the Merger Agreement. These costs include legal, financial advisory, accounting, consulting, and other advisory fees, retention, severance, and employee benefit-related costs, public company filing fees and other regulatory fees, financial printing and other printing costs, closing, integration and other related costs. Some of these costs are payable by the Company regardless of whether or not the Merger is completed.

***The Company or FineMark or both may be subject to claims and litigation pertaining to the Merger that could prevent or delay the completion of the Merger.***

Any lawsuits filed in connection with the Merger could prevent or delay completion of the Merger and result in additional costs to the Company and FineMark, including any costs associated with indemnification. The defense or settlement of any lawsuit or claim that may be filed seeking remedies against FineMark, its board of directors or the Company or its board of directors in connection with the Merger that remains unresolved at the effective time of the Merger may adversely affect the Company's business, financial condition, results of operations and cash flows.

The other risk factors that could affect the Company's financial condition or operating results remain unchanged from those previously disclosed in the Company's 2024 Annual Report on Form 10-K.

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**<u>Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS</u>**

The following table sets forth information about the Company's purchases of its $5 par value common stock, its only class of common stock registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Period** | **Total Number of Shares Purchased** | **Average Price Paid per Share** | **Total Number of Shares Purchased as part of Publicly Announced Program** | **Maximum Number that May Yet Be Purchased Under the Program** |
| April 1 - 30, 2025 | 166485 | $60.49 | 166485 | 1910357 |
| May 1 - 31, 2025 | 958 | $63.78 | 958 | 1909399 |
| June 1 - 30, 2025 | 4456 | $61.75 | 4456 | 1904943 |
| **Total** | 171899 | $60.54 | 171899 | 1904943 |

---

The Company's stock purchases shown above were made under authorizations by the Board of Directors. Under the most recent authorization in April 2024 of 5,000,000 shares, 1,904,943 shares remained available for purchase at June 30, 2025.

**<u>Item 5. OTHER INFORMATION</u>**

During the three months ended June 30, 2025, none of the officers or directors of the Company adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement."

**<u>Item 6. EXHIBITS</u>**

The exhibits filed as part of this report and exhibits incorporated herein by reference to other documents are listed below.

<u>[2](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[-](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[Agree](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[ment and Plan of Merger, dated as of June 16, 2025, by and amo](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[ng Commerce Bancshares, Inc.](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[, CBI-Kansas, Inc., and FineMark Holdings, Inc.](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[, were filed in](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[current report on Form 8-K (Commission file number 1-36502) dated Ju](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[n](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[e 17, 2025, and the same](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[is hereby inco](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[r](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[p](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)[orated by reference.](https://www.sec.gov/Archives/edgar/data/22356/000110465925060053/tm2517993d8_ex2-1.htm)</u>

<u>[3 - Restated Articles of Incorporation, as amended through April 28, 2023.\*](restatedarticlesofincorpor.htm)</u>

&nbsp;&nbsp;&nbsp;&nbsp;<u>[31.1 — Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](cbsh6302025ex311.htm)</u>

&nbsp;&nbsp;&nbsp;&nbsp;<u>[31.2 — Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](cbsh6302025ex312.htm)</u>

<u>[32 — Certifications of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](cbsh6302025ex32.htm)</u>

101 — Interactive data files in Inline XBRL pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

104 — Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

\*The Company is refiling this corrected version of the exhibit originally filed on May 4, 2023, as an exhibit to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2023, to correct a typographical error contained in the exhibit as originally filed. That error misstated the total amount of authorized Common Stock, part value $5 per share, as "192,000,000 shares" which it should have read "190,000,000 shares".

------

<u>[**Table of Contents**](#idbbbc9a0cff3457baaa407fc432395e8_7)</u>

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | COMMERCE BANCSHARES, INC. | COMMERCE BANCSHARES, INC. |
| | By | /s/ MARGARET M. ROWE |
| | | Margaret M. Rowe |
| Date: August 6, 2025  | | *Senior Vice President & Secretary* |

---

---

| | | |
|:---|:---|:---|
| | By | /s/ PAUL A. STEINER |
| | | Paul A. Steiner |
| | | *Controller* |
| Date: August 6, 2025  | | *(Chief Accounting Officer)* |

---

## Ex-3

RESTATED ARTICLES OF INCORPORATION

OF

COMMERCE BANCSHARES, INC.

A Missouri Corporation

ARTICLE I

The name of this corporation is Commerce Bancshares, Inc.

ARTICLE II

The address of the corporation's registered office is in care of T. Alan Peschka, 1000 Walnut Street, Kansas City, Missouri, and the name of the corporation's registered agent at such address is Commerce Bank (f/k/a Commerce Bank of Kansas City, National Association).

ARTICLE III

The total number of shares of all classes of stock which the corporation shall have authority to issue is 192,000,000 shares, consisting of

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) 2,000,000 shares of Preferred Stock of the par value of $1 per share, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) 190,000,000 shares of Common Stock of the par value of $5 per share.

The voting powers, designations, preferences and relative participating, optional or other special rights, and the qualifications, limitations, or restrictions thereof, of the classes of stock of the corporation which are fixed by these Articles of Incorporation, and the authority vested in the Board of Directors to fix by resolution or resolutions providing for the issue of preferred stock the voting powers, if any, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the shares of Preferred Stock which are not fixed by these Articles of Incorporation are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Preferred Stock may be issued from time to time in one or more series of any number of shares, provided that the aggregate number of shares issued and not canceled of any and all such series shall not exceed the total number of shares of Preferred Stock herein above authorized. Each series of Preferred Stock shall be distinctively designated by letter or descriptive words. All series of Preferred Stock shall rank equally and be identical in all respects except as permitted by the provisions of paragraph (b) of this Article III. Different series of Preferred Stock shall not be construed to constitute different classes of shares for the purpose of voting by classes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Authority is hereby vested in the Board of Directors from time to time to issue the Preferred Stock as Preferred Stock of any series and in connection with the creation of each such series to fix by resolution or resolutions providing for the issue of shares thereof the voting powers, if any, the designation, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such series to the full extent now or hereafter permitted by these Articles of Incorporation and the laws of the State of Missouri, in respect of the matters set forth in the following subparagraphs (1) to (9), inclusive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the distinctive designation of such series and the number of shares which shall constitute such series, which number may be increased or decreased (but not below the number of shares thereof then outstanding) from time to time by action of the Board of Directors;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the dividend rate of such series and any limitations, restrictions or conditions on the payment of dividends, subject to paragraph (c) of this Article III;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the price or prices at which, and the terms and conditions on which, the shares of such series may be redeemed by the corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) the amount or amounts payable upon the shares of such series in the event of any liquidation, dissolution or winding up of the corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) whether or not the shares of such series shall be entitled to the benefit of a sinking fund to be applied to the purchase or redemption of shares of such series and, if so entitled, the amount of such fund and the manner of its application;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) whether or not the shares of such series shall be made convertible into, or exchangeable for, shares of any other class or classes of stock of the corporation or shares of any other series of Preferred Stock, and, if made so convertible or exchangeable, the conversion price or prices, or the rate or rates of exchange, and the adjustments thereof, if any, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) whether or not the shares of such series shall have any voting powers and, if voting powers are so granted, the extent of such voting powers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (8) whether or not the shares of such series shall be entitled to the benefit of conditions and restrictions upon the creation of indebtedness of the corporation or any subsidiary, upon the issue of any additional Preferred Stock (including additional shares of such series or of any other series), and upon the payment of dividends (in addition to those provided in paragraphs (c) and (d) of this Article III) or the making of other distributions on, and the purchase, redemption or other acquisition by the corporation or any subsidiary of, any outstanding stock of the corporation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) such other preferences, rights, restrictions and qualifications as shall not be inconsistent herewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The holders of Preferred Stock of each series shall be entitled to receive, when and as declared by the Board of Directors, dividends in cash at the rate for such series fixed by the Board of Directors as provided in paragraph (b) of this Article III, and no more, payable quarterly on the first days of January, April, July and October or of such other months as may be designated by the Board of Directors (each of the quarterly periods ending on the first day of January, April, July and October in each year, or on the first days of such other months, respectively, being hereinafter called a dividend period), in each case from the date of cumulation (as defined in paragraph (h) of this Article III) of such series. Except as may otherwise be provided in the resolution or resolutions providing for the issue of any given series of Preferred Stock, dividends on Preferred Stock shall be cumulative (whether or not there shall be net profits or net assets of the corporation legally available for the payment of such dividends) so that, if at any time full cumulative dividends (as defined in paragraph (h) of this Article III) upon the Preferred Stock of all series to the end of the last completed dividend period shall not have been paid or declared and a sum sufficient for payment thereof set apart, the amount of the deficiency shall be fully paid, but without interest, or dividends in such amount shall have been declared on each such series and a sum sufficient for the payment thereof shall have been set apart for such payment, before any sum or sums shall be set aside for or applied to the purchase or redemption of Preferred Stock of any series (either pursuant to any applicable sinking fund provisions or any redemption authorized pursuant to paragraph (g) of this Article III or otherwise) or set aside for or applied to the purchase of Common Stock and before any dividend shall be paid or any other distribution made upon the Common Stock (other than a dividend payable in Common Stock); provided, however, that any moneys deposited in the sinking fund provided for any series of Preferred Stock in the resolution or resolutions providing for the issue of shares of said series, in compliance with the provisions of such sinking fund and of this paragraph (c), may thereafter be applied to the purchase or redemption of Preferred Stock in accordance with the terms of such sinking fund whether or not at the time of such application full cumulative dividends upon the outstanding Preferred Stock

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of all series to the end of the last completed dividend period shall have been paid or declared and set apart for payment. All dividends declared upon the Preferred Stock of the respective series outstanding shall be declared pro rata, so that the amounts of dividends declared per share on the Preferred Stock of different series shall in all cases bear to each other the same ratio that accrued dividends per share on the shares of such respective series bear to each other.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Before any sum or sums shall be set aside for or applied to the purchase of Common Stock and before any dividends shall be paid or any distribution ordered or made upon the Common Stock (other than a dividend payable in Common Stock), the corporation shall comply with the sinking fund provisions, if any, of any resolution or resolutions providing for the issue of any series of Preferred Stock any shares of which shall at the time be outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Subject to the provisions of paragraph (c) and (d) of this Article III, the holders of Common Stock shall be entitled, to the exclusion of the holders of Preferred Stock of any and all series, to receive such dividends as from time to time may be declared by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) In the event of any liquidation, dissolution or winding up of the corporation, the holders of Preferred Stock of each series then outstanding shall be entitled to be paid out of the assets of the corporation available for distribution to its stockholders, whether from capital, surplus or earnings, before any payment shall be made to the holders of Common Stock, an amount determined as provided in paragraph (b) of this Article III for every share of their holdings of Preferred Stock of such series. If upon any liquidation, dissolution or winding up of the corporation the assets of the corporation available for distribution to its stockholders shall be insufficient to pay the holders of Preferred Stock of all series the full amounts to which they respectively shall be entitled, the holders of Preferred Stock of all series shall share ratably in any distribution of assets according to the respective amounts which would be payable in respect of the shares of Preferred Stock held by them upon such distribution if all amounts payable on or with respect to Preferred Stock of all series were paid in full. In the event of any liquidation, dissolution or winding up of the corporation, after payment shall have been made to the holders of Preferred Stock of the full amount to which they shall be entitled as aforesaid, the holders of Common Stock shall be entitled, to the exclusion of the holders of Preferred Stock of any and all series, to share, ratably according to the number of shares of Common Stock held by them, in all remaining assets of the corporation available for distribution to its stockholders. Neither the merger or consolidation of the corporation into or with another corporation nor the merger or consolidation of any other corporation into or with the corporation, nor the sale, transfer or lease of all or substantially all of the assets of the corporation, shall be deemed to be a liquidation, dissolution or winding up of the corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Subject to any requirements which may be applicable to the redemption of any given series of Preferred Stock as provided in any resolution or resolutions providing for the issue of such series of Preferred Stock, the Preferred Stock of all series, or of any series thereof, or any part of any series thereof, at any time outstanding, may be redeemed by the corporation at its election expressed by resolution of the Board of Directors, at any time or from time to time, upon not less than 30 days' previous notice to the holders of record of Preferred Stock to be redeemed, given by mail in such manner as may be prescribed by resolution or resolutions of the Board of Directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) if such redemption shall be otherwise than by the application of moneys in any sinking fund referred to in paragraph (d) of this Article III, at the redemption price, fixed as provided in paragraph (b) of this Article III, at which shares of Preferred Stock of the particular series may then be redeemed at the option of the corporation, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) if such redemption shall be by the application of moneys in any sinking fund referred to in paragraph (d) of this Article III, at the redemption price, fixed as provided in paragraph (b) of this Article III, at which shares of Preferred Stock of the particular series may then be redeemed for such sinking fund;

provided, however, that, before any Preferred Stock of any series shall be redeemed at said redemption price thereof specified in clause (1) of this paragraph (g), all moneys at the time in the sinking fund, if any, for Preferred Stock of that series shall first be applied, as nearly as may be, to the purchase or redemption of Preferred Stock of that series

------

as provided in the resolution or resolutions of the Board of Directors providing for such sinking fund. If less than all the outstanding shares of Preferred Stock of any series are to be redeemed, the redemption may be made either by lot or pro rata in such manner as may be prescribed by resolution of the Board of Directors. The corporation may, if it shall so elect, provide moneys for the payment of the redemption price by depositing the amount thereof for the account of the holders of Preferred Stock entitled thereto with a bank or trust company doing business in Kansas City, Missouri and having capital and surplus of at least $5,000,000. The date upon which such deposit may be made by the corporation (hereinafter called the "date of deposit") shall be prior to the date fixed as the date of redemption but not earlier than the date on which notice thereof shall be given. In any such case there shall be included in the notice of redemption a statement of the date of deposit and of the name and address of the bank or trust company with which the deposit has been or will be made. On and after the date fixed in any such notice of redemption as the date of redemption (unless default shall be made by the corporation in providing moneys for the payment of the redemption price pursuant to such notice) or, if the corporation shall have made such deposit on or before the date specified therefor in the notice, then on and after the date of deposit, all rights of the holders of the Preferred Stock to be redeemed as stockholders of the corporation, except the right to receive the redemption price as hereinafter provided, and, in the case of such deposit, any conversion rights not theretofore expired, shall cease and terminate. Such conversion rights, however, in any event shall cease and terminate upon the date fixed for redemption or upon any earlier date fixed by the Board of Directors pursuant to paragraph (b) of this Article III for termination of such conversation rights. Anything herein contained to the contrary notwithstanding, said redemption price shall include an amount equal to accrued dividends on the Preferred Stock to be redeemed to the date fixed for the redemption thereof and the corporation shall not be required to declare or pay on such Preferred Stock to be redeemed, and the holders thereof shall not be entitled to receive, any dividends in addition to those thus included in the redemption price, provided, however, that the corporation may pay in regular course any dividends thus included in the redemption price either to the holders of record on the record date fixed for the determination of stockholders entitled to receive such dividends (in which event anything to the contrary notwithstanding, the amount so deposited need not include any dividends so paid or to be paid) or as a part of the redemption price upon surrender of the certificates for the shares redeemed. At any time on or after the date fixed as aforesaid for such redemption or, if the corporation shall elect to deposit the moneys for such redemption as herein provided, then at any time on or after the date of deposit, and without awaiting the date fixed as aforesaid for such redemption, the respective holders of record of the Preferred Stock to be redeemed shall be entitled to receive the redemption price upon actual delivery to the corporation, or, in the event of such deposit, to the bank or trust company with which such deposit shall be made, of certificates for the shares to be redeemed, such certificates, if required, to be properly stamped for transfer and duly endorsed in blank or accompanied by proper instruments of assignment and transfer thereof duly executed in blank. Any funds deposited as aforesaid which shall not be required for such redemption, because of the exercise of any right of conversion or otherwise subsequent to the date of such deposit, shall be returned to the corporation forthwith. Any moneys so deposited which shall remain unclaimed by the holders of such Preferred Stock at the end of four years after the redemption date shall be paid by such bank or trust company to the corporation, after which such holders shall be deemed to be unsecured creditors of the corporation for a period of two years (after which all rights of such holders as unsecured creditors or otherwise shall cease) and any interest accrued on moneys so deposited shall belong to the corporation and shall be paid to it from time to time. Preferred stock redeemed pursuant to the provisions of this paragraph (g) shall be canceled and shall thereafter have the status of authorized and unissued shares of Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The term "date of cumulation" as used with reference to any series of Preferred Stock shall be deemed to mean the date fixed by the Board of Directors as the date of cumulation of such series at the time of the creation thereof or, if no date shall have been so fixed, the date on which shares of such series are first issued. Whenever used with reference to any share of any series of Preferred Stock, the term "full cumulative dividends" shall be deemed to mean (whether or not in any dividend period, or any part thereof, in respect of which such term is used there shall have been net profits or net assets of the corporation legally available for the payment of such dividends) that amount which shall be equal to dividends at the full rate fixed for such series as provided in paragraph (b) of this Article III for the period of time elapsed from the date of cumulation of such series to the date as of which full cumulative dividends are to be computed (including an amount equal to the dividend at such rate for any fraction of a dividend period included in such period of time); and the term "accrued dividends" shall be deemed to mean full cumulative dividends to the date as of which accrued dividends are to be computed, less the amount of all dividends paid, or deemed paid as hereinafter in this paragraph (h) provided, upon said share. In the event of the issue of

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additional shares of Preferred Stock of any series after the original issue of shares of Preferred Stock of such series, all dividends paid or accrued on Preferred Stock of such series prior to the date of issue of such additional Preferred Stock shall be deemed to have been paid on the additional Preferred Stock so issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Subject to the provisions of these Articles of Incorporation and except as otherwise provided by law, the shares of stock of the corporation, regardless of class, may be issued for such consideration and for such corporation purposes as the Board of Directors may from time to time determine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Except as otherwise provided by law or by the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of shares of Preferred Stock, as such holders, shall not have any right to vote, and are hereby specifically excluded from the right to vote, in the election of directors or for any other purpose. Except when entitled to vote as aforesaid, the holders of Preferred Stock, as such holders, shall not be entitled to notice of any meeting of stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Subject to the provisions of any applicable law, or of the By-Laws of the corporation as from time to time amended, with respect to the closing of the transfer books or the fixing of a record date for the determination of stockholders entitled to vote and except as otherwise provided by law, or by these Articles of Incorporation or by the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of outstanding shares of Common Stock shall exclusively possess voting power for the election of directors and for all other purposes, each holder of record of shares of Common Stock being entitled to one vote for each share of Common Stock standing in his name on the books of the corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Anything in this Article III to the contrary notwithstanding, dividends upon shares of any class of stock of the corporation shall be payable only out of assets legally available for the payment of such dividends, and the rights of the holders of the Preferred Stock of all series and of the holders of the Common Stock in respect of dividends shall at all times be subject to the power of the Board of Directors, which is hereby expressly vested in said Board, from time to time to set aside such reserves and to make such other provisions, if any, as said Board shall deem to be necessary or advisable, respecting the amount of working capital to be maintained.

ARTICLE IV

No holder of stock of the corporation of any class shall be entitled as a matter of right to subscribe for or purchase any part of any new or additional issue of stock, or securities convertible into stock, of any class whatsoever, whether now or hereafter authorized, and all such additional shares of stock or other securities convertible into stock may be issued and disposed of by the Board of Directors to such person or persons and on such terms and for such consideration (so far as may be permitted by law) as the Board of Directors, in their absolute discretion, may deem advisable.

ARTICLE V

The number and class of shares to be issued before the corporation shall commence business is Fifty (50) shares of common stock with a par value of Ten Dollars ($10) per share. The consideration to be paid therefor and the capital with which the corporation shall commence business is Five Hundred Dollars ($500). The corporation will not commence business until consideration of the value of at least Five Hundred Dollars has been received for the issuance of shares.

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ARTICLE VI

The names and places of residence of the incorporators are as follows

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| | |
|:---|:---|
| <u>Name</u> | <u>Residence</u> |
| James M. Kemper, Jr. | 6612 Wyoming |
| | Kansas City, Missouri |
| P. V. Miller, Jr. | 2001 West 61st Terr. |
| | Shawnee Mission, Kansas |
| T. Alan Peschka | 5744 Grand |
| | Kansas City, Missouri |

---

ARTICLE VII

The number of directors constituting the first board of directors of the corporation was three (3) and the number constituting the board at the time of the effectiveness of this amendment is twelve (12). The number of directors to constitute subsequent boards of directors shall be fixed by, or in the manner provided in, the By-Laws of the corporation. Any changes in the number of directors shall be reported to the Secretary of State of the State of Missouri within thirty (30) calendar days of such change.

Unless the By-Laws otherwise provide, the directors shall be classified with respect to the time for which they shall severally hold office by dividing them into three classes, each consisting of one-third of the whole number of the board of directors, and all directors of the corporation shall hold office until their successors are elected and qualified. At the meeting held for the election of the first board, the directors of the first class should be elected for a term of one year; the directors of the second class for a term of two years; and the directors of the third class for a term of three years; and at each annual election the successors to the class of directors whose terms shall expire that year shall be elected to hold office for the term of three years, so that the term of office of one class of directors shall expire in each year.

Notwithstanding any other provisions of these Articles of Incorporation and notwithstanding the fact that some lesser percentage may be specified by law, the entire Board of Directors of the Corporation may be removed at any time but only by the affirmative vote of the holders of 80% or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) at a meeting of the shareholders called for that purpose.

ARTICLE VIII

The duration of the corporation is perpetual.

ARTICLE IX

The corporation is formed for the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To purchase, subscribe for or otherwise acquire and own, hold as an investment or otherwise, use, sell, assign, deal in, transfer, mortgage, pledge, exchange or otherwise dispose of, alone or in syndicates or otherwise in

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conjunction with others, shares of capital stock, bonds, debentures, notes, evidences of indebtedness and other securities, contracts or obligations of any corporation, association, partnership, entity, or governmental, municipal or public authority, domestic or foreign, and to pay therefor in whole or in part, in cash or by exchanging therefor shares of the capital stock, bonds, debentures, debenture stock, notes or other obligations of this corporation or any other corporation, and while the owner or holder of any such property to receive, collect and dispose of the interest, dividends and income arising from such property, and to possess and exercise in respect thereof all the rights, powers and privileges of ownership, including all voting powers of any securities so owned;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To purchase or otherwise acquire the whole or any part of the property, assets, business, goodwill or rights and to undertake or assume the whole or any part of the bonds, mortgages, franchises, leases, contracts, indebtedness, guaranties, liabilities and obligations of any person, firm, association, corporation or organization, and to pay for the same or any part or combination thereof in cash, shares of the capital stock, bonds, debentures, debenture stock, notes, and other obligations of this corporation or otherwise, or by undertaking and assuming the whole or any part of the liabilities or obligations of the transferor; and to hold or in any manner dispose of the whole or any part of the property and assets so acquired or purchased, and to conduct in any lawful manner the whole or any part of the business so acquired and to exercise all the powers necessary or convenient in and about the conduct, management and carrying on of such business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To purchase or otherwise acquire, hold, sell, pledge, transfer or otherwise dispose of, and to reissue or cancel the shares of its own capital stock or any securities or other obligations of this corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To promote or assist financially, by loan, subsidy, guaranty, contribution to capital or surplus, or otherwise, corporations, syndicates, partnerships, individuals or associations of all kinds, foreign or domestic, and in connection therewith to execute mortgages, deeds of trust, other forms of encumbrances, contracts and other types of written instruments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) To purchase or otherwise acquire and own, hold, lease, develop, sell, exchange, or otherwise use, deal in or dispose of, mortgage or otherwise encumber, real property or any interest therein, and to purchase or otherwise acquire and own, hold, build, construct, erect, manage, operate, repair, restore, and to dispose of by sale, lease, mortgage or otherwise, buildings and structures of all types;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) To purchase or otherwise acquire and own, hold, lease, sell or otherwise use, deal in or dispose of, mortgage or otherwise encumber personal property of every kind and description or any interest therein, and to operate, manage and maintain the same;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) To acquire, own, hold, buy sell, transfer and otherwise dispose of patents and patent rights, trademarks and trade names, copyrights, licenses, franchises, permits and other evidences of right;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) In general to carry on any other lawful business whatsoever in connection with the foregoing or which is calculated, directly or indirectly, to promote the interest of the corporation or to enhance the value of its properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To have and to exercise all powers necessary or incident to carrying out its corporate purposes, to exercise all other powers permitted by law, and to possess and enjoy all rights and powers which now or at any time hereafter may be granted to or exercised by a corporation of this character.

ARTICLE X

The board of directors shall have the power to make, alter, amend or repeal the By-Laws of the corporation from time to time.

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ARTICLE XI

The corporation reserves the right to amend, alter, change or repeal any provisions contained in these Articles of Incorporation in the manner now or hereafter prescribed by law, and all rights conferred upon shareholders herein are granted subject to this reservation:

ARTICLE XII

The affirmative vote of the holders of not less than 75 percent of the outstanding shares of "Voting Stock" (as hereinafter defined) of the corporation and the affirmative vote of the holders of not less than 67 percent of the outstanding shares of Voting Stock held by stockholders other than a "Related Person" (as hereinafter defined) shall be required for the approval or authorization of any "Business Combination" (as hereinafter defined) of the corporation with any Related Person; provided however, that the 75 percent and 67 percent voting requirements shall not be applicable if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1) The "Continuing Directors" of the corporation (as hereinafter defined) by a two-thirds vote (a) have expressly approved in advance the acquisition of outstanding shares of Voting Stock of the corporation that caused the Related Person to become a Related Person, or (b) have approved the Business Combination prior to the Related Person involved in the Business Combination having become a Related Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Business Combination is solely between the corporation and another corporation, 100 percent of the Voting Stock of which is owned directly or indirectly by the corporation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Business Combination is a merger or consolidation and the cash or fair market value of the property, securities or other consideration to be received per share by holders of common stock of the corporation in the Business Combination is not less than the highest per share price (with appropriate adjustments for recapitalizations and for stock splits, stock dividends and like distributions), paid by the Related Person in acquiring any of its holdings of the corporation's common stock.

For the purposes of this Article Twelfth:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The term "Business Combination" shall mean (a) any merger or consolidation of the corporation or a subsidiary with or into a Related Person, (b) any sale, lease, exchange, transfer or other disposition, including without limitation a mortgage or any other security device, of all or any "Substantial Part" (as hereinafter defined) of the assets either of the corporation (including without limitation any voting securities of a subsidiary) or of a subsidiary, to a Related Person, (c) any merger or consolidation of a Related Person with or into the corporation or a subsidiary of the corporation, (d) any sale, lease, exchange, transfer or other disposition of all or any Substantial Part of the assets of a Related Person to the corporation or a subsidiary of the corporation, (e) the issuance of any securities of the corporation or a subsidiary of the corporation to a Related Person, (f) any recapitalization that would have the effect of increasing the voting power of a Related Person, and (g) any agreement, contract or other arrangement providing for any of the transactions described in this definition of Business Combination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The term "Related Person" shall mean and include any individual corporation, partnership or other person or entity which, together with its "Affiliates" and "Associates" (as defined on February 1, 1983 at Rule 12b-2 under the Securities Exchange Act of 1934), "Beneficially Owns" (as defined on February 1, 1983 at Rule 13d-3 under the Securities Exchange Act of 1934) in the aggregate 20 percent or more of the outstanding Voting Stock of the corporation, and any Affiliate or Associate of any such individual corporation, partnership or other person or entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The term "Substantial Part" shall mean more than 30 percent of the fair market value of the total assets of the corporation in question, as of the end of its most recent fiscal year ending prior to the time the determination is being made.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Without limitation, any shares of common stock of the corporation that any Related Person has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants, or options, or otherwise, shall be deemed beneficially owned by the Related Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) For the purposes of subparagraph (3) of this Article XII, the term "other consideration to be received" shall include, without limitation, common stock of the corporation retained by its existing public stockholders in the event of a Business Combination in which the corporation is the surviving corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The term "Voting Stock" shall mean all outstanding shares of capital stock of the corporation or another corporation entitled to vote generally in the election of directors and each reference to a proportion of shares of Voting Stock shall refer to such proportion of the votes entitled to be cast by such shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) The term "Continuing Director" shall mean a Director who was a member of the Board of Directors of the corporation immediately prior to the time that the Related Person involved in a Business Combination became a Related Person.

ARTICLE XIII

The provisions set forth at this ARTICLE XIII and at ARTICLES VII, XI, and XII herein may not be repealed or amended in any respect, unless such action is approved by the affirmative vote of the holders of not less than 75 percent of the outstanding shares of Voting Stock (as defined in ARTICLE XII) of the corporation; provided, however, that if there is a Related Person (as defined in ARTICLE XII), such action must also be approved by the affirmative vote of the holders of not less than 67 percent of the outstanding shares of Voting Stock held by stockholders other than the Related Person.

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

I, John W. Kemper, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of Commerce Bancshares, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | |
|:---|:---|
| | /s/ JOHN W. KEMPER |
| | John W. Kemper<br>*President and*<br>*Chief Executive Officer* |
| August 6, 2025 | |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

I, Charles G. Kim, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of Commerce Bancshares, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| | /s/ CHARLES G. KIM |
| | Charles G. Kim<br>*Executive Vice President and*<br>*Chief Financial Officer* |
| August 6, 2025 | |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*

*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*

## Ex-32

**Exhibit 32**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Commerce Bancshares, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, John W. Kemper and Charles G. Kim, Chief Executive Officer and Chief Financial Officer, respectively, of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| | /s/ JOHN W. KEMPER |
| | John W. Kemper<br>*Chief Executive Officer* |
| | /s/ CHARLES G. KIM |
| | Charles G. Kim<br>*Chief Financial Officer* |
| August 6, 2025 | |

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A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

<br>