exv99w1

Exhibit 99.1

FOR IMMEDIATE RELEASE:
Thursday, January 12, 2006

COMMERCE BANCSHARES, INC. REPORTS
EARNINGS PER SHARE GROWTH OF 7% FOR 2005

Commerce Bancshares, Inc. announced record earnings of $3.16 per share in 2005 compared to $2.95 per share in 2004, an increase of 7%. Total earnings for 2005 amounted to $223.2 million compared to $220.3 million earned in 2004. For the year, the return on average assets was 1.60%, the return on average equity was 16.2% and the efficiency ratio totaled 59.3%.

For the fourth quarter, earnings amounted to $.81 per share compared to $.71 per share in the same period last year, or an increase of 14%. Net income for the fourth quarter 2005 amounted to $56.2 million compared to $52.7 million in the same period last year. For the fourth quarter, the return on average equity was 16.5% and the return on assets was 1.62%.

In announcing these results, David W. Kemper, Chairman and CEO, said, “We are pleased to report 7% growth in earnings per share for the year, representing the 21^st consecutive year of record earnings. Total revenue, excluding net securities gains, grew 3% as a result of an improving net interest margin, a 5% growth in outstanding loans and a 6% growth in non-interest income. Significant growth in deposit, bankcard, and trust fees contributed to the overall increase in non-interest income, which now comprises 40.5% of total revenue. Non-interest expense grew 2.8% this year.”

Mr. Kemper continued, “During the quarter, net loan charge-offs increased $3.8 million over the previous quarter. Consistent with bank industry trends, this increase occurred mainly from higher levels of consumer and credit card loan charge-offs resulting from the new bankruptcy legislation effective in the fourth quarter. However, asset quality remains strong with net loan charge-offs for the full year of 2005 totaling .38% of average loans compared with .41% last year. Our allowance for loan losses at December 31, 2005 totaled $128.4 million, representing 1.44% of total loans.”

Total assets at December 31, 2005 were $13.9 billion, total loans were $8.9 billion, and total deposits were $10.9 billion. Non-performing loans amounted to $9.8 million or .11% of total loans. During the quarter, the Company purchased approximately 1.2 million shares of its common stock through its treasury buyback plan.

(more)

Commerce Bancshares, Inc. is a registered bank holding company offering a full line of banking services, including investment management and securities brokerage. The Company currently operates in approximately 340 banking locations in Missouri, Illinois, and Kansas. The Company also has operating subsidiaries involved in mortgage banking, credit related insurance, venture capital, and real estate activities.

Posted to the Company’s web site is management’s discussion of fourth quarter results. To see this information please visit our web site at www.commercebank.com.

* * * * * * * * * * * * * * *

For additional information, contact
Jeffery Aberdeen, Controller
at PO Box 419248, Kansas City, MO
or by telephone at (816) 234-2081
Web Site: http://www.commercebank.com
Email: mymoney@commercebank.com

(Amounts in thousands)

9/30/05

12/31/05

12/31/04

Non-Accrual Loans

20,365

9,845

17,618

Foreclosed Real Estate

675

1,868

1,157

Total Non-Performing Assets

21,040

11,713

18,775

Non-Performing Assets to Loans

.24

.13

.23

Non-Performing Assets to Total Assets

.15

.08

.13

Loans 90 Days & Over Past Due — Still Accruing

15,388

14,088

13,067

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
FINANCIAL HIGHLIGHTS


	For the Three Months Ended									For the Year Ended
(Unaudited)	Sept. 30			Dec. 31			Dec. 31			Dec. 31			Dec. 31
	2005			2005			2004			2005			2004

FINANCIAL SUMMARY (In thousands, except per share data)
Net interest income	$	125,832		$	127,006		$	124,202		$	501,702		$	497,331
Taxable equivalent net interest income		126,914			128,755			124,738			505,707			499,597
Non-interest income		86,895			88,633			77,753			341,199			326,931
Provision for loan losses		8,934			11,980			7,215			28,785			30,351
Non-interest expense		122,387			127,201			122,429			496,522			482,769
Net income		62,791			56,242			52,660			223,247			220,341
Cash dividends		15,761			15,557			15,076			63,421			61,135
Net total loan charge-offs		9,056			12,839			8,184			32,732			33,178
Net business charge-offs (recov)		133			(480	)		160			(3,016	)		5,642
Net credit card charge-offs		5,879			8,506			4,951			24,412			19,433
Net personal banking charge-offs*		1,837			3,541			2,251			8,800			7,476
Net real estate charge-offs (recov)		492			260			453			527			(10	)
Net overdraft charge-offs		715			1,012			369			2,009			637
Per share:
Net income — basic	$	0.90		$	0.83		$	0.73		$	3.21		$	3.00
Net income — diluted	$	0.89		$	0.81		$	0.71		$	3.16		$	2.95
Cash dividends	$	0.229		$	0.229		$	0.209		$	0.914		$	0.834
Diluted wtd. average shares o/s		70,194			69,040			73,530			70,561			74,619

RATIOS
Average loans to deposits		82.67	%		83.90	%		79.03	%		81.34	%		78.71	%
Return on total average assets		1.78	%		1.62	%		1.48	%		1.60	%		1.56	%
Return on total average stockholders’ equity		18.12	%		16.52	%		14.40	%		16.19	%		15.19	%
Non-interest income to revenue**		40.85	%		41.10	%		38.50	%		40.48	%		39.66	%
Efficiency ratio***		57.61	%		59.29	%		60.26	%		59.30	%		59.16	%

AT PERIOD END
Book value per share based on total stockholders’ equity	$	19.85		$	19.79		$	19.91
Market value per share	$	49.03		$	52.12		$	47.81
Allowance for loan losses as a percentage of loans		1.48	%		1.44	%		1.59	%
Tier I leverage ratio		9.44	%		9.43	%		9.60	%
Common shares outstanding		68,701,822			67,608,906			71,670,408
Shareholders of record		4,510			4,522			4,776
Number of bank/ATM locations		340			342			330
Number of bank charters		3			3			3
Full-time equivalent employees		4,827			4,839			4,821

				Dec. 31			Dec. 31
OTHER YTD INFORMATION				2005			2004

High market value per share				$	53.63		$	47.85
Low market value per share				$	43.94		$	39.91


*		Includes consumer, student and home equity loans

**		Revenue includes net interest income and non-interest income.

***		The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of net interest income and non-interest income (excluding gains/losses on securities transactions).

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)	For the Three Months Ended							For the Year Ended
(In thousands, except per share data)	Sept. 30		Dec. 31		Dec. 31			Dec. 31		Dec. 31
	2005		2005		2004			2005		2004

INTEREST INCOME
Interest and fees on loans	$	134,653	$	142,865	$	112,358		$	521,283	$	425,338
Interest on investment securities		42,722		41,319		44,555			172,181		183,440
Interest on federal funds sold and securities purchased under agreements to resell		1,195		1,159		358			4,102		1,312

Total interest income		178,570		185,343		157,271			697,566		610,090


INTEREST EXPENSE
Interest on deposits:
Savings, interest checking and money market		14,461		16,261		8,335			53,371		27,957
Time open and C.D.’s of less than $100,000		13,351		14,803		9,908			50,597		38,924
Time open and C.D.’s of $100,000 and over		7,409		9,045		4,193			30,779		14,912
Interest on other borrowings		17,517		18,228		10,633			61,117		30,966

Total interest expense		52,738		58,337		33,069			195,864		112,759

Net interest income		125,832		127,006		124,202			501,702		497,331
Provision for loan losses		8,934		11,980		7,215			28,785		30,351

Net interest income after provision for loan losses		116,898		115,026		116,987			472,917		466,980


NON-INTEREST INCOME
Deposit account charges and other fees		31,117		30,085		25,858			112,979		105,382
Bank card transaction fees		21,981		23,527		21,629			86,310		78,253
Trust fees		17,353		17,529		15,918			68,316		64,257
Trading account profits and commissions		2,335		2,251		2,680			9,650		12,288
Consumer brokerage services		2,440		2,306		2,420			9,909		9,846
Loan fees and sales		2,397		2,196		1,804			12,838		13,654
Net gains (losses) on securities transactions		289		1,089		(544	)		6,362		11,092
Other		8,983		9,650		7,988			34,835		32,159

Total non-interest income		86,895		88,633		77,753			341,199		326,931


NON-INTEREST EXPENSE
Salaries and employee benefits		66,682		68,730		66,208			273,177		265,469
Net occupancy		10,277		11,039		9,818			40,621		39,558
Equipment		5,838		5,971		5,733			23,201		22,903
Supplies and communication		8,458		8,414		8,321			33,342		33,760
Data processing and software		12,108		12,612		12,099			48,244		46,000
Marketing		4,486		4,259		4,008			17,294		16,688
Other		14,538		16,176		16,242			60,643		58,391

Total non-interest expense		122,387		127,201		122,429			496,522		482,769

Income before income taxes		81,406		76,458		72,311			317,594		311,142
Less income taxes		18,615		20,216		19,651			94,347		90,801

NET INCOME	$	62,791	$	56,242	$	52,660		$	223,247	$	220,341



Net income per share — basic	$	0.90	$	0.83	$	0.73		$	3.21	$	3.00

Net income per share — diluted	$	0.89	$	0.81	$	0.71		$	3.16	$	2.95

Cash dividends per common share	$	0.229	$	0.229	$	0.209		$	0.914	$	0.834

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


(Unaudited)	Sept. 30			Dec. 31			Dec. 31
(In thousands)	2005			2005			2004

ASSETS
Loans, net of unearned income	$	8,742,832		$	8,899,183		$	8,305,359
Allowance for loan losses		(129,306	)		(128,447	)		(132,394	)

Net loans		8,613,526			8,770,736			8,172,965

Investment securities:
Available for sale		4,024,992			3,667,901			4,754,941
Trading		6,019			24,959			9,403
Non-marketable		79,181			77,321			73,024

Total investment securities		4,110,192			3,770,181			4,837,368

Federal funds sold and securities purchased under agreements to resell		115,900			128,862			68,905
Cash and due from banks		481,176			545,273			585,815
Land, buildings and equipment — net		376,999			374,192			336,446
Goodwill		48,522			48,522			48,522
Other assets		201,762			247,779			200,347

Total assets	$	13,948,077		$	13,885,545		$	14,250,368


LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing demand	$	1,281,470		$	1,399,934		$	1,943,771
Savings, interest checking and money market		6,457,502			6,490,326			6,072,115
Time open and C.D.’s of less than $100,000		1,771,156			1,831,980			1,656,002
Time open and C.D.’s of $100,000 and over		840,700			1,129,573			762,421

Total deposits		10,350,828			10,851,813			10,434,309
Federal funds purchased and securities sold under agreements to repurchase		1,768,721			1,326,427			1,913,878
Other borrowings		370,729			269,390			389,542
Other liabilities		93,761			100,077			85,759

Total liabilities		12,584,039			12,547,707			12,823,488

Stockholders’ equity:
Preferred stock		—			—			—
Common stock		347,049			347,049			347,049
Capital surplus		381,433			388,552			388,614
Retained earnings		822,434			693,021			703,293
Treasury stock		(192,924	)		(86,901	)		(51,646	)
Accumulated other comprehensive income (loss)		6,046			(3,883	)		39,570

Total stockholders’ equity		1,364,038			1,337,838			1,426,880

Total liabilities and stockholders’ equity	$	13,948,077		$	13,885,545		$	14,250,368

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE BALANCES


(Unaudited)	For the Three Months Ended									For the Year Ended
(Dollars in thousands)	Sept. 30			Dec. 31			Dec. 31			Dec. 31			Dec. 31
	2005			2005			2004			2005			2004

Loans:
Business	$	2,356,938		$	2,436,190		$	2,184,585		$	2,336,681		$	2,119,823
Real estate — construction		518,638			482,813			420,179			480,864			427,976
Real estate — business		1,775,132			1,876,813			1,755,767			1,794,269			1,823,302
Real estate — personal		1,366,817			1,360,744			1,339,865			1,351,809			1,334,859
Consumer		1,267,466			1,281,487			1,205,381			1,242,163			1,188,018
Home equity		437,359			446,831			405,830			429,911			381,111
Student		321,283			325,126			344,258			357,319			326,120
Credit card		556,235			560,569			521,891			554,471			515,585
Overdrafts		14,973			13,084			14,379			13,995			13,319

Total loans		8,614,841			8,783,657			8,192,135			8,561,482			8,130,113

Investment securities (excluding unrealized gains and losses):
Available for sale		4,210,497			3,879,182			4,707,651			4,233,052			4,802,083
Trading		10,696			12,553			13,145			10,624			14,250
Non-marketable		80,613			81,332			74,744			78,709			75,542

Total investment securities		4,301,806			3,973,067			4,795,540			4,322,385			4,891,875

Federal funds sold and securities purchased under agreements to resell		126,930			108,784			63,769			116,553			84,113

Total interest earning assets		13,043,577			12,865,508			13,051,444			13,000,420			13,106,101

Total assets		13,986,905			13,814,899			14,112,455			13,973,444			14,149,156


Deposits:
Non-interest bearing deposits		602,016			616,862			1,351,240			655,729			1,288,434
Interest bearing deposits:
Savings		404,019			387,876			397,679			403,158			401,935
Interest checking		159,958			170,486			552,036			191,840			513,612
Money market		6,599,088			6,530,453			5,653,086			6,553,874			5,657,844
Time open & C.D.’s of less than $100,000		1,752,749			1,795,743			1,657,463			1,736,804			1,678,659
Time open & C.D.’s of $100,000 and over		902,654			968,385			753,928			983,703			788,800

Total interest bearing deposits		9,818,468			9,852,943			9,014,192			9,869,379			9,040,850

Total deposits		10,420,484			10,469,805			10,365,432			10,525,108			10,329,284

Borrowings:
Federal funds purchased and securities sold under agreements to repurchase		1,724,082			1,578,790			1,791,567			1,609,868			1,827,428
Long-term debt and other borrowings		370,961			325,158			390,150			366,072			419,215

Total borrowings		2,095,043			1,903,948			2,181,717			1,975,940			2,246,643


Total interest bearing liabilities		11,913,511			11,756,891			11,195,909			11,845,319			11,287,493
Total stockholders’ equity		1,374,711			1,350,744			1,455,062			1,378,688			1,450,181

Net yield on interest earning assets (tax-equivalent basis)		3.86	%		3.97	%		3.80	%		3.89	%		3.81	%

COMMERCE BANCSHARES, INC.
Management Discussion of Fourth Quarter Results
December 31, 2005

For the quarter ended December 31, 2005, net income amounted to $56.2 million, an increase of 6.8% over the same quarter last year, but $6.5 million less than last quarter. For the current quarter, return on assets was 1.6%, the return on average equity was 16.5%, and the efficiency ratio was 59.3%. Compared to the 4^th quarter of last year, net interest income increased 2.3% and non-interest income grew by 14.0%, but the provision for loan losses increased by $4.8 million and non-interest expense grew by 3.9%. Net income for the 4^th quarter of 2005 included the recognition of income tax benefits of $3.4 million, compared to tax benefits of $10.3 million recognized in the 3^rd quarter of 2005 and $5.0 million recognized in the same quarter last year.

Balance Sheet Review
During the 4^th quarter, average loans increased by $168.8 million, or 2.0%, compared to the previous quarter which represented annualized growth of 8.0%. Average loans also increased $591.5 million, or 7.2%, compared to the same period last year. Compared to the 3^rd quarter 2005, average business and business real estate loans grew $79.3 million and $101.7 million, respectively, as a result of continued customer demand and new business, but construction loans declined $35.8 million. Consumer loans increased $14.0 million over the previous quarter. Average personal real estate loans decreased by $6.1 million during the quarter as a result of fewer loan originations. During the quarter, average student loans increased only slightly, as the growth was offset by larger loan sales at the end of the 3^rd quarter.

Available for sale investment securities, excluding fair value adjustments, decreased on average by $331.3 million, or 7.9%, this quarter compared with the previous quarter, as the Company continued to reduce its investment securities portfolio and address concentration and interest rate risk. Average available for sale investment securities also declined by $828.5 million, or 17.6%, compared to the same quarter last year. During the 4^th quarter of 2005, sales, maturities and principal pay-downs of securities totaled $374.6 million which included the sale of approximately $175.5 million of credit card asset-backed securities. There were approximately $16.4 million of securities purchased during the quarter, primarily tax-free municipals.

Total average deposits increased by $49.3 million during the 4^th quarter when compared to the 3^rd quarter of this year. This growth was due mainly to increases in certificates of deposit ($108.7 million), demand deposits ($14.8 million) and interest checking accounts ($10.5 million). The average loans to deposits ratio for the quarter increased from the 3^rd quarter to 83.9%.

During the current quarter, average borrowings decreased by $191.1 million due to reductions in federal funds purchased and Federal Home Loan Bank advances outstanding.

Net Interest Income
Net interest income in the 4^th quarter amounted to $127.0 million, an increase of $1.2 million, or .9%, compared with the previous quarter and an increase of $2.8 million, or 2.3%, compared to the 4^th quarter of last year. During the 4^th quarter of 2005, the net yield on earning assets amounted to 3.97%, compared with 3.86% in the previous quarter and 3.80% in the 4^th quarter of last year.

The increase of $1.2 million in net interest income in the 4^th quarter of 2005 over the previous quarter was the result of growth in both balances and rates on loans, which added $8.2 million in interest income over the previous quarter and was derived from both commercial and consumer loans. Interest on investment securities declined $1.4 million due to lower average investment securities balances, partly offset by higher average rates on the portfolio. Interest expense on deposits increased by $4.9 million over the previous quarter due mainly to higher rates on money market and certificate of deposit accounts. Interest on other borrowed funds increased $711 thousand, resulting from higher rates but offset by lower average balances.

During the quarter, the overall yield on interest earning assets increased 31 basis points to 5.77%, while the overall cost of interest bearing liabilities increased 21 basis points to 1.97%.

Non-Interest Income
For the 4^th quarter of 2005, total non-interest income amounted to $88.6 million compared with $86.9 million in the previous quarter and $77.8 million in the same quarter last year. Excluding investment securities gains, non-interest income grew 1.1% compared with the previous quarter and 11.8% over the same period last year. Compared with the same period last year, the growth was mainly the result of higher deposit, bank card and trust fee income. Compared with the 4^th quarter of 2004, deposit account fees increased $4.2 million, or 16.3%, mainly due to growth in deposit account overdraft fees, which grew $5.6 million over the same period last year. This growth over last year was the result of increasing transaction volumes during the year and pricing changes initiated in the 3^rd quarter of 2005. Deposit account overdraft fees declined from the previous quarter due to higher levels of charged-off overdrafts resulting in higher levels of related overdraft fees being reversed. Corporate cash management fee income was down slightly from the previous quarter and continued to be affected by an increasing interest

COMMERCE BANCSHARES, INC.
Management Discussion of Fourth Quarter Results

December 31, 2005

rate environment. Bank card fees for the quarter increased 8.8% over the same period last year, mainly due to higher fees earned on debit, credit and corporate card transactions, which grew by 9.0%, 7.4% and 17.6%, respectively. Trust fees for the quarter increased 10.1% over the same quarter last year mainly as a result of higher fees on personal trust accounts. The ratio of non-interest income to total revenue was 41.1% in the 4^th quarter of 2005 compared to 38.5% in the same period last year.

Net securities gains amounted to $1.1 million for the 4^th quarter of 2005, compared to $289 thousand in the previous quarter and a loss of $544 thousand in the 4^th quarter of last year.

Non-Interest Expense
Non-interest expense for the quarter amounted to $127.2 million, an increase of $4.8 million or 3.9%, compared with amounts recorded in the 4^th quarter of last year, and was also 3.9% higher than amounts recorded in the previous quarter.

Compared with the 4^th quarter of last year, salaries and benefits expense increased $2.5 million, or 3.8%, as a result of normal salary increases and higher incentives, but offset somewhat by lower medical insurance costs. Full-time equivalent employees totaled 4,839 and 4,821 at December 31, 2005 and 2004, respectively. Occupancy costs grew 12.4% over the same period last year, mainly a result of higher depreciation expense on two new office buildings. Equipment costs were up 4.2% also due to depreciation expense on newly capitalized costs. Data processing expense increased 4.2% due to higher costs for bank card and online banking processing fees.

Income Taxes
During the 4^th quarter of 2005, income tax expense amounted to $20.2 million, an increase of $1.6 million over the previous quarter and $565 thousand more than the same quarter last year. Included in income tax expense in the 4^th quarter was the recognition of tax benefits, totaling $3.4 million, associated with certain corporate tax reorganization initiatives which were recognized in their entirety this quarter. It is not expected that material tax benefits of this nature will continue beyond 2005. The effective tax rate for the Company was 26.4% for the 4^th quarter of 2005, compared with an effective tax rate of 22.9% in the previous quarter and 27.2% in the 4^th quarter of 2004.

Credit Quality
Net loan charge-offs for the 4^th quarter of 2005 amounted to $12.8 million, compared with $9.1 million in the 3^rd quarter of 2005 and $8.2 million in the 4^th quarter of last year. The increase in net charge-offs in the 4^th quarter of 2005 compared to the previous quarter was the result of higher loan charge-offs from credit card, overdraft, and personal banking loans. Consistent with industry trends, these higher charge-off levels occurred from an increase in bankruptcy notices received this quarter in conjunction with the new bankruptcy legislation, which took effect in the 4^th quarter. Year-to-date, the ratio of net loan charge-offs to total average loans was .38% compared to .41% last year.

For the 4^th quarter of 2005, annualized net charge-offs on average credit card loans were 6.02% compared with 3.77% in the same quarter last year and 4.19% in the 3^rd quarter of 2005. Additionally, personal loan net charge-offs amounted to .68% of average loans compared to .46% in the same period last year. Both of the higher loss ratios in the current quarter were reflective of higher bankruptcies noted above. The provision for loan losses for the quarter totaled $12.0 million, which was $3.0 million higher than the 3^rd quarter 2005 provision and $4.8 million higher than the 4^th quarter 2004 provision. The allowance for loan losses at December 31, 2005 amounted to $128.4 million, or 1.44% of total loans.

Total non-performing assets amounted to $11.7 million, a decrease of $9.3 million from the previous quarter, and amounted to .13% of loans outstanding. Non-performing assets are comprised of non-accrual loans ($9.8 million) and foreclosed real estate ($1.9 million). Loans past due more than 90 days and still accruing interest totaled $14.1 million at December 31, 2005.

Other
The Company maintains a treasury stock buyback program, and effective October 2005 was authorized by the Board of Directors to repurchase up to 5 million shares of its common stock. During the quarter ended December 31, 2005, the Company purchased approximately 1.2 million shares of treasury stock at an average cost of $53.00 per share.

Forward Looking Information
This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions and other statements that are not historical facts. Such statements are based on current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements.