COMMERCE BANCSHARES, INC. ANNOUNCES FIRST QUARTER EARNINGS

Commerce Bancshares, Inc. announced earnings of $.40 per share for the three months ended March 31, 2009 compared to $.84 per share in the first quarter of 2008. Net income for the first quarter amounted to $30.8 million compared to $64.2 million in the same period last year. The first quarter last year included a $22.2 million pre-tax cash gain on the sale of VISA Inc. (VISA) stock and the reversal of certain VISA litigation charges totaling $8.8 million pre-tax, which had the effect of increasing earnings per share by approximately $.26. For the quarter, the return on average assets totaled .73% and the return on average equity was 7.8%. At quarter end, the ratio of tangible common equity to total assets was 8.2%.

In announcing these results, David W. Kemper, Chairman and CEO, said, “Net income for the first quarter 2009 was down from the previous year mainly due to an increase in our loan loss provision resulting from higher credit losses created by current economic conditions. In the current quarter the loan loss provision increased $23.2 million over the same period last year and $1.8 million compared to the previous quarter. At March 31, 2009, the allowance for loan losses totaled $180.9 million, an increase of $8.2 million during the quarter, and represents 164% of our total non-accrual loans and 1.65% of outstanding loans.

Further, Mr. Kemper noted, "In this environment our balance sheet has remained strong, liquidity continues to improve and our key business units are operating within plan. During the quarter, average deposits grew 6.5% on strong growth from both consumers and businesses, which increased earning assets. Also net interest income this quarter increased by 7% over the same period last year due to higher earning assets and a stable net interest margin. Non-interest income, while essentially flat with the previous year, totaled $92.4 million and amounted to 38% of total revenue. Non-interest expense, exclusive of the VISA indemnification noted above in 2008, grew by only 2.6%."

Total assets at March 31, 2009 were $17.9 billion, total loans were $11.4 billion, and total deposits were $14.0 billion. Also, in February 2009, the Company entered into an equity distribution agreement with a broker dealer pursuant to which the Company may, from time to time, offer and sell shares of the Company’s common stock having aggregate proceeds of up to $200 million.

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 370 locations in Missouri, Illinois, Kansas, Oklahoma and Colorado. The Company also has operating subsidiaries involved in mortgage banking, credit related insurance, and private equity activities.

Summary of Non-Performing Assets and Past Due Loans:

(Dollars in thousands)

12/31/08

3/31/09

3/31/08

Non-Accrual Loans

$72,896

$110,019

$25,190

Foreclosed Real Estate

$6,181

$8,666

$10,639

Total Non-Performing Assets

$79,077

$118,685

$35,829

Non-Performing Assets to Loans

.70%

1.08%

.33%

Non-Performing Assets to Total Assets

.45%

.66%

.21%

Loans 90 Days & Over Past Due – Still Accruing

$39,964

$51,411

$25,759

This financial news release, including management’s discussion of first quarter results, is posted to the Company’s web site at www.commercebank.com.

For additional information contact:

Email: mymoney@commercebank.com†


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