Parent Company Condensed Financial Statements

12 Months Ended

Dec. 31, 2024

Condensed Financial Information Disclosure [Abstract]

Parent Company Condensed Financial Statements

Parent Company Condensed Financial Statements

Following are the condensed financial statements of Commerce Bancshares, Inc. (Parent only) for the periods indicated:

Condensed Balance Sheets
	December 31
(In thousands)	2024		2023
Assets
Investment in consolidated subsidiaries:
Bank	$	2,697,961	$	2,390,595
Non-banks	187,404		160,244
Cash	357,046		322,573
Investment securities:
Available for sale debt	5,381		5,081
Equity	12,750		11,396
Note receivable due from bank subsidiary	50,000		50,000
Advances to subsidiaries, net of borrowings	1,500		1,800
Income tax receivable and deferred tax assets	9,131		10,263
Other assets	31,164		30,486
Total assets	$	3,352,337	$	2,982,438
Liabilities and stockholders’ equity
Pension obligation	$	3,220	$	4,107
Other liabilities	39,236		34,215
Total liabilities	42,456		38,322
Stockholders’ equity	3,309,881		2,944,116
Total liabilities and stockholders’ equity	$	3,352,337	$	2,982,438

Condensed Statements of Income
	For the Years Ended December 31
(In thousands)	2024		2023		2022
Income
Dividends received from consolidated bank subsidiary	$	215,001	$	280,000	$	300,001
Earnings of consolidated subsidiaries, net of dividends	191,421		203,570		203,965
Interest and dividends on investment securities	2,282		2,905		2,480
Management fees charged to subsidiaries	42,296		47,773		38,632
Investment securities gains (losses)	176,863		(621)		(872)
Net interest income on advances and note to subsidiaries	2,415		2,636		1,403
Other	3,294		2,842		3,709
Total income	633,572		539,105		549,318
Expense
Salaries and employee benefits	44,520		41,549		44,352
Professional and other services	3,495		3,580		2,740
Data processing fees paid to affiliates	3,316		3,347		3,173
Donation to related charitable foundation	5,000		—		—
Other	15,390		16,264		15,595
Total expense	71,721		64,740		65,860
Income tax (benefit) expense	35,520		(2,695)		(4,941)
Net income	$	526,331	$	477,060	$	488,399

Condensed Statements of Cash Flows
	For the Years Ended December 31
(In thousands)	2024		2023		2022
Operating Activities
Net income	$	526,331	$	477,060	$	488,399
Adjustments to reconcile net income to net cash provided by operating activities:
Earnings of consolidated subsidiaries, net of dividends	(191,421)		(203,570)		(203,965)
Other adjustments, net	(165,330)		5,749		2,557
Net cash provided by (used in) operating activities	169,580		279,239		286,991
Investing Activities
(Increase) decrease in investment in subsidiaries, net	—		4,348		(9)
Proceeds from sales of investment securities	176,561		—		—
Proceeds from maturities/pay downs of investment securities	9		15		38
Purchases of investment securities	(1,062)		(902)		(4,534)
(Increase) decrease in advances to subsidiaries, net	300		18,729		19,996
Net purchases of building improvements and equipment	(5)		(490)		(741)
Net cash provided by (used in) investing activities	175,803		21,700		14,750
Financing Activities
Purchases of treasury stock	(171,407)		(76,890)		(186,622)
Issuance of stock under equity compensation plans	—		(3)		(8)
Cash dividends paid on common stock	(139,503)		(134,734)		(127,466)
Net cash provided by (used in) financing activities	(310,910)		(211,627)		(314,096)
Increase (decrease) in cash	34,473		89,312		(12,355)
Cash at beginning of year	322,573		233,261		245,616
Cash at end of year	$	357,046	$	322,573	$	233,261
Income tax payments (receipts), net	$	34,975	$	(3,254)	$	(587)

Dividends paid by the Parent to its shareholders were substantially provided from Bank dividends. The Bank may distribute common dividends without prior regulatory approval, provided that the dividends do not exceed the sum of net income for the current year and retained net income for the preceding two years, subject to maintenance of minimum capital requirements. The Parent charges fees to its subsidiaries for management services provided, which are allocated to the subsidiaries based primarily on total average assets. The Parent makes cash advances to its private equity subsidiary for general short-term cash flow purposes. Advances may be made to the Parent by its subsidiary bank for temporary investment of idle funds. Interest on such advances is based on market rates.

The Bank has $50.0 million of borrowings from the Parent as part of its strategy to manage FDIC insurance premiums. The note has a rolling 13 month maturity, and the interest rate is a variable rate equal to the one year treasury rate.

For the past several years, the Parent has maintained a $20.0 million line of credit for general corporate purposes with the Bank. The Parent has not borrowed under this line during the past three years.

The Parent has commitments to fund an additional $50.8 million relating to private equity investments over the next several years. The investments are made directly by the Parent and through non-bank subsidiaries.

At December 31, 2024, the fair value of the investment securities held by the Parent consisted of investments of $5.4 million in corporate bonds, $5.7 million in preferred and common stock with readily determinable fair values, and $7.0 million in equity securities that do not have readily determinable fair values. The Parent also holds 411,723 shares of Visa Class B-2 common stock, which are discussed in Note 3. During 2024, the Parent sold Visa Class A common stock resulting in proceeds of $176.6 million, also discussed in Note 3.