
(In thousands)	March 31, 2024		December 31, 2023
Available for sale debt securities	$	9,141,695	$	9,684,760
Trading debt securities	56,716		28,830
Equity securities:
Readily determinable fair value	5,864		5,723
No readily determinable fair value	6,988		6,978
Other:
Federal Reserve Bank stock	35,267		35,166
Federal Home Loan Bank stock	10,173		10,640

Private equity investments	183,706		176,667
Total investment securities (1)	$	9,440,409	$	9,948,764

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 parent company). The Company's Visa Class B 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. During the three months ended March 31, 2024, the Company did not record any impairment or other adjustments to the carrying amount of its portfolio of equity securities with no readily determinable fair value.

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 the Company received notification of Visa’s acceptance of that tender. 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 will automatically convert into four shares of Visa's Class A common stock (subject to

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. The Makewhole Agreement also includes limited transfer restrictions, such that the Company may only transfer up to one-third of the shares of Visa Class C common stock received in the exchange within the first 45 days following May 3, 2024, and may only transfer up to two-thirds of the Class C common stock received within the first 90 days following May 3, 2024.

As a result of the exchange, the Company marked its Visa Class C common stock to fair value and recorded a gain of $175.5 million based on the conversion privilege of the Visa Class C common stock and the closing price of Visa Class A common stock on May 3, 2024 of $268.49 per share. The Company’s Visa Class C shares are expected to continue to be marked to fair value on a recurring basis using the Visa Class A shares as evidence of orderly transactions between market participants for similar securities issued by Visa. The Company’s Visa Class B-2 common stock will continue to be carried at cost of $0 as there are not observable price changes in orderly transactions for identical or similar investments of the same issuer.

Subsequent to the successful close of the Exchange Offer, the Company approved a plan to reposition a portion of its available for sale debt securities portfolio through the sale of securities with an amortized cost of approximately $1.0 billion. The securities that the Company plans to sell have a yield of approximately 2.0%, which is expected to result in a loss of approximately $165 million, and the Company expects to reinvest the proceeds mostly into investment securities yielding approximately 4.6%. The Company expects the repositioning to increase net interest income, reduce interest rate risk to lower rates, and improve the quality of the Company's pledgeable investment securities. The timing and amount of the loss ultimately realized on the available for sale debt securities and the reinvestment assumptions may depend on many considerations, including market conditions, the future price of Visa Class A common stock, and other factors.

Other investment securities include Federal Reserve Bank (FRB) stock, Federal Home Loan Bank (FHLB) stock, equity method investments, and investments in portfolio concerns held by the Company's private equity subsidiary. FRB stock and FHLB stock are held for debt 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.

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 March 31, 2024 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.


(In thousands)	Amortized Cost		Fair Value
U.S. government and federal agency obligations:
Within 1 year	$	266,255	$	262,767
After 1 but within 5 years	380,713		370,689
After 5 but within 10 years	126,085		116,577

Total U.S. government and federal agency obligations	773,053		750,033
Government-sponsored enterprise obligations:


After 5 but within 10 years	4,935		4,454
After 10 years	50,702		39,391
Total government-sponsored enterprise obligations	55,637		43,845
State and municipal obligations:
Within 1 year	81,511		80,031
After 1 but within 5 years	431,208		397,795
After 5 but within 10 years	639,802		550,622
After 10 years	126,706		103,247
Total state and municipal obligations	1,279,227		1,131,695
Mortgage and asset-backed securities:
Agency mortgage-backed securities	4,524,253		3,754,837
Non-agency mortgage-backed securities	1,309,628		1,139,113
Asset-backed securities	1,954,148		1,877,805
Total mortgage and asset-backed securities	7,788,029		6,771,755
Other debt securities:
Within 1 year	60,606		59,575
After 1 but within 5 years	193,035		181,078
After 5 but within 10 years	226,055		192,193
After 10 years	13,260		11,521
Total other debt securities	492,956		444,367
Total available for sale debt securities	$	10,388,902	$	9,141,695

Investments in U.S. government and federal agency obligations include U.S. Treasury inflation-protected securities, which totaled $396.2 million, at fair value, at March 31, 2024. 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.

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 March 31, 2024, the fair value of securities on this watch list was $1.7 billion compared to $1.2 billion at December 31, 2023. Almost all of the securities included on the Company's watch list in the current quarter were experiencing unrealized loss positions due to the significant increase in interest rates and were analyzed outside of the cash flow model. At March 31, 2024, 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 March 31, 2024, the Company did not identify any securities for which a credit loss exists, and for the three months ended March 31, 2024 and 2023, the Company did not recognize a credit loss expense on any available for sale debt securities.

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 March 31, 2024 and December 31, 2023. 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 March 31, 2024, 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				12 months or longer				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2024
U.S. government and federal agency obligations	$	223,026	$	1,971	$	502,312	$	21,049	$	725,338	$	23,020
Government-sponsored enterprise obligations	—		—		43,845		11,792		43,845		11,792
State and municipal obligations	9,675		703		1,113,829		146,839		1,123,504		147,542
Mortgage and asset-backed securities:
Agency mortgage-backed securities	2,907		35		3,732,370		769,632		3,735,277		769,667
Non-agency mortgage-backed securities	—		—		1,133,805		170,644		1,133,805		170,644
Asset-backed securities	3,707		8		1,853,484		76,356		1,857,191		76,364
Total mortgage and asset-backed securities	6,614		43		6,719,659		1,016,632		6,726,273		1,016,675
Other debt securities	—		—		444,367		48,589		444,367		48,589
Total	$	239,315	$	2,717	$	8,824,012	$	1,244,901	$	9,063,327	$	1,247,618
December 31, 2023
U.S. government and federal agency obligations	$	51,585	$	809	$	714,400	$	24,025	$	765,985	$	24,834
Government-sponsored enterprise obligations	—		—		43,962		11,696		43,962		11,696
State and municipal obligations	24,022		760		1,167,607		148,478		1,191,629		149,238
Mortgage and asset-backed securities:
Agency mortgage-backed securities	4,382		59		3,875,432		720,649		3,879,814		720,708
Non-agency mortgage-backed securities	—		—		1,152,045		173,526		1,152,045		173,526
Asset-backed securities	19,086		156		2,081,293		93,076		2,100,379		93,232
Total mortgage and asset-backed securities	23,468		215		7,108,770		987,251		7,132,238		987,466
Other debt securities	—		—		460,136		47,250		460,136		47,250
Total	$	99,075	$	1,784	$	9,494,875	$	1,218,700	$	9,593,950	$	1,220,484

The entire available for sale debt portfolio included $9.1 billion of securities that were in a loss position at March 31, 2024, compared to $9.6 billion at December 31, 2023. The total amount of unrealized loss on these securities was $1.2 billion at March 31, 2024, an increase of $27.1 million compared to the unrealized loss at December 31, 2023. Securities with significant unrealized losses are discussed in the "Allowance for credit losses on available for sale debt securities" section above.


(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
March 31, 2024
U.S. government and federal agency obligations	$	773,053	$	—	$	(23,020)	$	—	$	750,033
Government-sponsored enterprise obligations	55,637		—		(11,792)		—		43,845
State and municipal obligations	1,279,227		10		(147,542)		—		1,131,695
Mortgage and asset-backed securities:
Agency mortgage-backed securities	4,524,253		251		(769,667)		—		3,754,837
Non-agency mortgage-backed securities	1,309,628		129		(170,644)		—		1,139,113
Asset-backed securities	1,954,148		21		(76,364)		—		1,877,805
Total mortgage and asset-backed securities	7,788,029		401		(1,016,675)		—		6,771,755
Other debt securities	492,956		—		(48,589)		—		444,367
Total	$	10,388,902	$	411	$	(1,247,618)	$	—	$	9,141,695
December 31, 2023
U.S. government and federal agency obligations	$	841,267	$	81	$	(24,834)	$	—	$	816,514
Government-sponsored enterprise obligations	55,658		—		(11,696)		—		43,962
State and municipal obligations	1,346,633		24		(149,238)		—		1,197,419
Mortgage and asset-backed securities:
Agency mortgage-backed securities	4,621,821		233		(720,708)		—		3,901,346
Non-agency mortgage-backed securities	1,331,288		136		(173,526)		—		1,157,898
Asset-backed securities	2,200,712		5		(93,232)		—		2,107,485
Total mortgage and asset-backed securities	8,153,821		374		(987,466)		—		7,166,729
Other debt securities	507,386		—		(47,250)		—		460,136
Total	$	10,904,765	$	479	$	(1,220,484)	$	—	$	9,684,760


	For the Three Months Ended March 31
(In thousands)	2024		2023
Proceeds from sales of securities:
Available for sale debt securities	$	25,494	$	812,176

Other investments	10,250		28,259
Total proceeds	$	35,744	$	840,435

Investment securities gains (losses), net:
Available for sale debt securities:


Losses realized on sales	$	(8,470)	$	(3,088)

Equity securities:



Fair value adjustments, net	142		(127)
Other:
Gains realized on sales	969		658

Fair value adjustments, net	7,100		2,251
Total investment securities gains (losses), net	$	(259)	$	(306)

Net losses on investment securities for the three months ended March 31, 2024 were mainly comprised of net losses of $8.5 million on sales of available for sale securities, partially offset by net gains in fair value of $142 thousand on equity investments, net gains of $969 thousand on sales of private equity securities, and net gains in private equity securities due to fair value adjustments of $7.1 million.

At March 31, 2024, securities totaling $6.6 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 $7.5 billion at December 31, 2023. Except for obligations of various government-sponsored enterprises such as FNMA, FHLB and FHLMC, no investment in a single issuer exceeded 10% of stockholders’ equity.