22 unchanged sentences
and competition with other entities that offer financial services.
−Removed: The Company operates as a super-community bank and offers a broad range of financial products to consumer and commercial customers, delivered with a focus on high-quality, personalized service.
+Added: The Company operates as a super-community bank and offers a broad range of financial products to consumer, municipal, and commercial customers, delivered with a focus on high-quality, personalized service.
The Company is headquartered in Missouri, with its principal offices in Kansas City and St.
8 unchanged sentences
• Net income and earnings per share — Net income attributable to Commerce Bancshares, Inc.
−Removed: was $477.1 million, a decrease of 2.3% compared to the previous year.
+Added: during 2024 was $526.3 million, an increase of 10.3% compared to the previous year.
The return on average assets was 1.72% in 2024, and the return on average common equity was 16.66%.
−Removed: Diluted earnings per share decreased .8% in 2023 compared to 2022.
+Added: Diluted earnings per share increased 11.8% in 2024 compared to 2023.
• Total revenue — Total revenue is comprised of net interest income and non-interest income.
Total revenue in 2024 increased $84.6 million, or 5.4%, from 2023, as net interest income grew $42.1 million, and non-interest income increased $42.5 million.
−Removed: Growth in net interest income resulted principally from increases in interest income from loans, partly offset by an increase in interest expense on deposits and borrowings.
−Removed: The increase in non-interest income in 2023 was mainly due to higher bankcard transaction fees and trust fees.
−Removed: • Non-interest expense — Total non-interest expense increased 9.7% this year compared to 2022, mainly due to higher salaries and employee benefits expense and higher deposit insurance expense due to a special FDIC assessment accrued in 2023.
+Added: Growth in net interest income resulted principally from increases in interest income from loans, partly offset by an increase in interest expense on deposits.
+Added: The increase in non-interest income in 2024 was mainly due to higher trust fees, supplemented by higher deposit account fees and capital market fees.
+Added: • Non-interest expense — Total non-interest expense increased 2.2% this year compared to 2023, mainly due to higher salaries and employee benefits expense, partially offset by lower deposit insurance expense due to a special FDIC assessment accrued in 2023.
• Asset quality — Net loan charge-offs totaled $38.9 million in 2024, an increase of $7.8 million from those recorded in 2023, and averaged .23% of loans in 2024, as compared to .19% of loans in 2023.
1 unchanged sentence
• Shareholder return — During 2024, the Company paid cash dividends of $1.03 per share on its common stock, representing an increase of 5.0% over the previous year.
−Removed: In 2023, the Company issued its 30th consecutive annual 5% common stock dividend, and in February 2024, the Company's Board of Directors authorized an increase of 5.1% in
−Removed: the common cash dividend.
+Added: In 2024, the Company issued its 31st consecutive annual 5%
+Added: common stock dividend, and in February 2025, the Company's Board of Directors authorized an increase of 7.0% in the common cash dividend.
The Company purchased 2,875,349 shares in 2024.
44 unchanged sentences
Less non-controlling interest 22,594 20,114 16,286 11,026 2,925
−Removed: Less preferred stock — — — — 144,784
Less goodwill 146,539 146,539 138,921 138,921 138,921
22 unchanged sentences
Net income attributable to Commerce Bancshares, Inc.
+Added: (net income) for 2024 was $526.3 million, an increase of $49.3 million, or 10.3%, compared to $477.1 million in 2023.
+Added: Diluted income per common share was $3.87 in 2024, compared to $3.46 in 2023.
+Added: The growth in net income resulted mainly from increases of $42.5 million in non-interest income and $42.1 million in net interest income, partly offset by increases in non-interest expense and income taxes of $20.2 million and $10.5 million, respectively.
+Added: The return on average assets was 1.72% in 2024 compared to 1.49% in 2023, and the return on average common equity was 16.66% in 2024 compared to 17.94% in 2023.
+Added: At December 31, 2024, the ratio of tangible common equity to tangible assets increased to 9.92%, compared to 8.85% at year end 2023.
+Added: During 2024, net interest income grew mainly due to an increase of $78.4 million in interest income earned on loans, mainly due to higher average rates, and a decrease of $43.9 million in interest expense on borrowings, mainly due to lower average balances, partly offset by an increase in interest expense on deposits of $90.0 million, mainly due to higher average rates paid.
+Added: Total rates earned on average interest earning assets increased 52 basis points this year, while funding costs increased 52 basis points for deposits and decreased 28 basis points for borrowings.
+Added: The provision for credit losses increased mainly due to higher net loan charge-offs and an increase in the estimate of the allowance for credit losses on loans this year compared to last year.
+Added: These increases were partly offset by a decrease in the liability for unfunded lending commitments.
+Added: Net loan charge-offs increased $7.8 million, mainly due to higher credit card and consumer loan net charge-offs in 2024, partly offset by a decrease in business loan net charge-offs.
+Added: Non-interest income grew 7.4% in 2024, mainly due to increases in trust fees and deposit account fees.
+Added: Net investment securities gains of $7.8 million were recorded in 2024 and were comprised mainly of gains on the sales of equity securities, partly offset by losses on sales of available for sale debt securities.
+Added: Non-interest expense increased $20.2 million in 2024 compared to 2023, mainly due to higher salaries and benefits expense and data processing and software expense, partly offset by a decrease in deposit insurance expense.
Net income for 2023 was $477.1 million, a decrease of $11.3 million, or 2.3%, compared to $488.4 million in 2022.
4 unchanged sentences
During 2023, net interest income grew mainly due to increases of $338.1 million in interest income earned on loans and $88.2 million in interest income earned on deposits with banks, mainly due to higher average rates, partly offset by increases in interest expense on deposits and borrowings of $215.7 million and $110.2 million, respectively, mainly due to higher average rates paid.
−Removed: Total rates earned on average interest earning assets increased 134 basis points this year, while funding costs for deposits and borrowings increased 156 basis points.
−Removed: The provision for credit losses increased mainly due to higher net loan charge-offs and an increase in the estimate of the allowance for credit losses this year compared to last year.
+Added: Total rates earned on average interest earning assets increased 134 basis points in 2023, while funding costs for deposits and borrowings increased 156 basis points.
+Added: The provision for credit losses increased mainly due to higher net loan charge-offs and an increase in the estimate of the allowance for credit losses in 2023 compared to 2022.
Net loan charge-offs increased $12.0 million, mainly due to higher credit card, consumer and business loan net charge-offs in 2023.
Non-interest income grew 4.9% in 2023, mainly due to increases in bank card and trust fees.
−Removed: Net investment securities gains of $15.0 million were recorded in 2023 and were comprised mainly of net fair value gains on the Company's private equity investment portfolio, partly offset by losses on sales of available for sale securities.
+Added: Net investment securities gains of $15.0 million were recorded in 2023 and were comprised mainly of net fair value gains on the Company's private equity
+Added: investment portfolio, partly offset by losses on sales of available for sale securities.
Non-interest expense increased $82.2 million in 2023 compared to 2022, mainly due to higher salaries and benefits expense and deposit insurance expense.
−Removed: Net income attributable to Commerce Bancshares, Inc.
−Removed: (net income) for 2022 was $488.4 million, a decrease of $42.4 million, or 8.0%, compared to $530.8 million in 2021.
−Removed: Diluted income per common share was $3.67 in 2022, compared to $3.91 in 2021.
−Removed: The decrease in net income resulted from an increase of $94.4 million in the provision for credit losses, as well as an increase of $42.9 million in non-interest expense and a decrease of $13.9 million in non-interest income.
−Removed: These decreases to net income were partly offset by increases in net interest income of $106.8 million and a decrease in income tax expense of $13.4 million.
−Removed: The return on average assets was 1.45% in 2022 compared to 1.55% in 2021, and the return on average common equity was 17.31% in 2022 compared to 15.37% in 2021.
−Removed: At December 31, 2022, the ratio of tangible common equity to assets decreased to 7.32%, compared to 9.01% at year end 2021.
−Removed: During 2022, net interest income grew mainly due to increases of $77.6 million in interest income earned on investment securities, due to higher average rates earned and higher average balances, and $75.5 million in interest income earned on loans, mainly due to higher average rates earned, partly offset by an increase in interest expense on deposits and borrowings of $43.9 million, due to higher average rates paid.
−Removed: Total rates earned on average interest earning assets increased 41 basis points in 2022, while funding costs for deposits and borrowings increased 23 basis points.
−Removed: The provision for credit losses increased in 2022 compared to 2021 due to a significant reduction in the allowance for credit losses on loans during 2021, which did not reoccur in 2022.
−Removed: In addition, there was an increase in the liability for unfunded lending commitments during 2022, compared to a decrease in 2021.
−Removed: Net loan charge-offs increased $496 thousand, mainly due to business loan net charge-offs in 2022, compared to net loan recoveries recorded in 2021, partly offset by lower credit card loan net charge-offs in 2022.
−Removed: Non-interest income fell 2.5% in 2022, mainly due to a decrease in loan fees and sales income.
−Removed: Net investment securities gains of $20.5 million were recorded in 2022 and were comprised mainly of net fair value gains on the Company's private
−Removed: equity investment portfolio, partly offset by losses on sales of available for sale securities.
−Removed: Non-interest expense increased $42.9 million in 2022 compared to 2021, mainly due to higher salaries and benefits expense and data processing and software expense.
−Removed: The Company distributed a 5% stock dividend for the 30th consecutive year on December 19, 2023.
+Added: The Company distributed a 5% stock dividend for the 31st consecutive year on December 18, 2024.
All per share and average share data in this report has been restated for the 2024 stock dividend.
24 unchanged sentences
Key assumptions include segmentation of the portfolio into pools, calculations of life of a loan using a combination of contractual terms and expected prepayment speeds and forecast of macroeconomic conditions.
−Removed: The Company utilizes a third-party macro-economic forecast
−Removed: that continuously changes due to economic conditions and events.
−Removed: The single path economic forecast includes key macroeconomic variables including GDP, disposable income, unemployment rate, various interest rates, consumer price index (CPI) inflation rate, housing price index (HPI), commercial real estate price index (CREPI) and market volatility.
+Added: The Company utilizes a third-party macro-economic forecast that continuously changes due to economic conditions and events.
+Added: The single path economic forecast includes key
+Added: macroeconomic variables including GDP, disposable income, unemployment rate, various interest rates, consumer price index (CPI) inflation rate, housing price index (HPI), commercial real estate price index (CREPI) and market volatility.
Each reporting period, the base macroeconomic forecast scenario is evaluated to ensure it is not inconsistent with management’s expectations.
17 unchanged sentences
Assumptions, Judgments, and Uncertainties:
−Removed: The Company’s model for establishing its allowance for credit losses uses cash flows projected to be received over the estimated life of the securities, discounted to present value, and compared to the current amortized cost bases of the securities.
Securities for which fair value is less than amortized cost are reviewed for impairment.
10 unchanged sentences
Investment securities, including available for sale debt, trading, equity and other securities, residential mortgage loans held for sale, derivatives and deferred compensation plan assets and associated liabilities are recorded at fair value on a recurring basis.
−Removed: Additionally, from time to time, other assets and liabilities may be recorded at fair value on a nonrecurring basis, such as loan values that have been reduced based on the fair value of the underlying collateral, other real estate (primarily foreclosed property), non-marketable equity securities and certain other assets and liabilities.
+Added: Additionally, from time to time, other assets and liabilities may be recorded at fair value on a nonrecurring basis, such as
+Added: loan values that have been reduced based on the fair value of the underlying collateral, other real estate (primarily foreclosed property), non-marketable equity securities and certain other assets and liabilities.
These nonrecurring fair value adjustments typically involve write-downs of individual assets or application of lower of cost or fair value accounting.
82 unchanged sentences
$ 45,035 $ (2,249) $ 42,786 $ (38,678) $ 93,540 $ 54,862
−Removed: Net interest income totaled $998.1 million in 2023, increasing $55.9 million, or 5.9%, compared to $942.2 million in 2022.
+Added: Net interest income totaled $1.0 billion in 2024, increasing $42.1 million, or 4.2%, compared to $998.1 million in 2023.
On a fully taxable-equivalent (FTE) basis, net interest income totaled $1.0 billion, and increased $42.8 million over 2023.
+Added: This growth was due to increases of $79.6 million in interest earned on loans (FTE), due to higher average rates and balances, and $18.2 million in interest earned on balances at the Federal Reserve, due to higher average balances, and a decrease of $44.8 million in interest expense on borrowings, mainly due to lower average balances.
+Added: These increases to income were partly offset by an increase of $90.0 million in interest expense on deposits, mainly due to higher average rates paid, and lower interest earned on investment securities of $8.5 million, due to lower average balances, partly offset by higher average rates.
+Added: The net yield on earning assets (FTE) was 3.47% in 2024 compared with 3.16% in 2023.
+Added: The fully taxable-equivalent basis uses a federal income tax rate of 21%.
+Added: During 2024, loan interest income (FTE) grew $79.6 million over 2023 mainly due to an increase in rates earned for all loan categories and growth of $310.2 million, or 1.8%, in average loan balances.
+Added: The average fully taxable-equivalent rate earned on the loan portfolio increased 36 basis points to 6.26% in 2024 compared to 5.90% in 2023.
+Added: The higher rates earned on the loan portfolio were impacted by actions taken by the Federal Reserve in 2024 to lower short-term interest rates, which caused most of the Company's variable rate loan portfolio to re-price lower and fixed rate loans to originate at lower interest rates than the weighted-average of the portfolio of fixed rate loans.
+Added: Increased interest earned on business, consumer, personal real estate and business real estate loans was the main driver of overall higher loan interest income.
+Added: Business loan interest income increased $33.3 million due to a 40 basis point increase in the average rate earned and an increase of $164.3 million, or 2.84%, in average balances.
+Added: Interest earned on consumer loans increased $16.2 million mainly due to an increase of 74 basis points in the average rate earned.
+Added: Personal real estate loan interest grew $13.0 million in 2024 compared to 2023 as a result of an increase of 35 basis points in the average rate earned and higher average balances of $63.8 million, or 2.14%.
+Added: Interest on construction and land loans grew $1.3 million over the prior year due to growth in the average rate earned of 29 basis points, partly offset by a decrease of $35.0 million, or 2.4%, in average loan balances.
+Added: Interest on business real estate loans increased $12.5 million as the average rate earned increased 21 basis points and the average balance grew $75.3 million, or 2.1%.
+Added: Revolving home equity loan interest increased $2.5 million mainly due to growth in average balances of $30.7 million, or 10.1%.
+Added: Interest on consumer credit card loans was higher by $829 thousand due to an increase of 16 basis points in the average rate earned.
+Added: Fully taxable-equivalent interest income on total investment securities decreased $8.5 million during 2024, as average balances declined $1.9 billion, while the average rate earned increased 34 basis points.
+Added: The average rate on the total investment securities portfolio was 2.63% in 2024 compared to 2.29% in 2023, while the average balance of the total investment securities portfolio (excluding unrealized fair value adjustments on available for sale debt securities) was $10.4 billion in 2024 compared to an average balance of $12.4 billion in 2023.
+Added: The decrease in interest income was mainly due to lower interest income earned on mortgage-backed securities, asset-backed securities and state and municipal securities, partly offset by an higher interest income earned on U.S.
+Added: government securities.
+Added: Interest earned on mortgage-backed securities decreased $16.2 million due to lower average balances of $878.4 million, slightly offset by an increase of three basis points in the average rate earned.
+Added: Interest earned on asset-backed securities decreased $12.8 million, due to a decline in average balances of $991.4 million, partly offset by an increase of 48 basis points in the average rate earned.
+Added: The decrease of $10.9 million in interest earned on state and municipal securities was due to a decrease of $497.5 million in average balances and a decline of seven basis points in average rate earned.
+Added: Interest earned on U.S.
+Added: government securities increased $35.9 million mainly due to higher average balances of $601.7 million, or 60.0%, and an increase in average rate earned of 130 basis points.
+Added: Interest earned on U.S.
+Added: government securities was impacted by a decline of $2.5 million in inflation income on treasury inflation-protected securities (TIPS).
+Added: Interest on federal funds sold decreased $610 thousand and interest on securities purchased under resell agreements decreased $291 thousand compared to 2023 both due to declines in average balances, partly offset by growth in the average rate earned.
+Added: Interest income on balances at the Federal Reserve increased $18.2 million over 2023, due to growth in average balances of $344.8 million, or 17.6%.
+Added: During 2024, interest expense on deposits increased $90.0 million over 2023 and resulted mainly from a 52 basis point increase in the overall average rate paid on deposits.
+Added: Interest expense on interest checking and money market accounts increased $80.5 million due to higher rates paid, which grew 59 basis points, and growth in average balances of $226.3 million, or 1.7%.
+Added: Interest expense on certificates of deposit grew $9.5 million, due to a 33 basis point increase in the average rate paid, coupled with a $33.1 million increase in average balances.
+Added: The overall rate paid on total deposits increased from 1.44% in 2023 to 1.96% in the current year.
+Added: Interest expense on borrowings decreased $44.8 million mainly due to a $975.0 million decrease in average balances.
+Added: Interest expense on federal funds purchased decreased $13.0 million, mainly due to a $265.7 million decline in average balances, while interest expense on securities sold under repurchase agreements increased $7.7 million due to a 26 basis point increase in average rate earned and an increase of $47.4 million in average balances.
+Added: Interest expense on Federal Home Loan Bank (FHLB) borrowings declined $39.5 million due to a decline of $756.7 million in average balances.
+Added: The Company did not have any outstanding FHLB borrowings at December 31, 2024.
+Added: The overall average rate incurred on all interest bearing liabilities was 2.17% in 2024, compared to 1.86% in 2023.
+Added: Net interest income totaled $998.1 million in 2023, increasing $55.9 million, or 5.9%, compared to $942.2 million in 2022.
+Added: On a FTE basis, net interest income totaled $1.0 billion, and increased $54.9 million over 2022.
This growth was mainly due to increases of $339.4 million in interest earned on loans and $88.2 million in interest earned on balances at the Federal Reserve, both mainly due to higher average rates earned.
1 unchanged sentence
The net yield on earning assets (FTE) was 3.16% in 2023 compared with 2.85% in 2022.
−Removed: The fully taxable-equivalent basis uses a federal income tax rate of 21%.
During 2023, loan interest income (FTE) grew $339.4 million over 2022 mainly due to an increase in rates earned for all loan categories and a $1.2 billion, or 7.8%, increase in average loan balances.
The average fully taxable-equivalent rate earned on the loan portfolio increased 172 basis points to 5.90% in 2023 compared to 4.18% in 2022.
−Removed: The higher rates earned on the loan portfolio were partly related to actions taken by the Federal Reserve to raise short-term interest rates, which caused most of the Company's variable rate loan portfolio to re-price higher.
+Added: The higher rates earned on the loan portfolio were partly related to actions taken by the Federal Reserve to raise short-term interest rates during 2022 and 2023, which caused most of the Company's variable rate loan portfolio to re-price higher.
Additionally, fixed rate loans were generally originated in 2023 at higher interest rates than the weighted-average of the portfolio of fixed rate loans.
4 unchanged sentences
Interest on personal real estate loans increased $15.9 million as the average rate earned increased 38 basis points and the average balance grew $137.4 million.
−Removed: Interest on consumer loans grew $37.3 million over the prior year as the average rate earned increased 174 basis points.
+Added: Interest on consumer loans grew $37.3 million over 2022 as the average rate earned increased 174 basis points.
Revolving home equity loan interest increased $10.2 million due to an increase of 301 basis points in the average rate earned and growth in average balances of $22.7 million.
5 unchanged sentences
Interest earned on U.S.
−Removed: government securities decreased $16.2 million mainly due to lower treasury inflation-protected securities (TIPS) interest income of $14.3 million.
+Added: government securities decreased $16.2 million mainly due to lower TIPS interest income of $14.3 million.
Average balances of U.S.
8 unchanged sentences
Interest expense on certificates of deposit grew $94.4 million, mainly due to a 350 basis point increase in the average rate paid, coupled with a $1.4 billion increase in average balances.
−Removed: The overall rate paid on total deposits increased from .18% in 2022 to 1.44% in the current year.
−Removed: Interest expense on borrowings increased $110.2 million mainly due to a 210 basis point increase in the rate paid on securities sold under repurchase agreements and an increase in $711.3 million in average Federal Home Loan Bank (FHLB) borrowings.
+Added: The overall rate paid on total deposits increased from .18% in 2022 to 1.44% in 2023.
+Added: Interest expense on borrowings increased $110.2 million mainly due to a 210 basis point increase in the rate paid on securities sold under repurchase agreements and an increase in $711.3 million in average FHLB borrowings.
The Company did not have any outstanding FHLB borrowings at December 31, 2023.
The overall average rate incurred on all interest bearing liabilities was 1.86% in 2023, compared to .30% in 2022.
−Removed: Net interest income totaled $942.2 million in 2022, increasing $106.8 million, or 12.8%, compared to $835.4 million in 2021.
−Removed: On an FTE basis, net interest income totaled $951.8 million, and increased $104.7 million over 2021.
−Removed: This growth was mainly due to an increase of $75.7 million in interest earned on loans, due to higher average rates earned and an increase of $76.9 million in interest earned on investment securities, due to higher rates and average balances, partly offset by an increase of $45.3 million in interest expense on deposits and borrowings, due to higher average rates paid.
−Removed: The net yield on earning assets (FTE) was 2.85% in 2022 compared with 2.58% in 2021.
−Removed: During 2022, loan interest income (FTE) grew $75.7 million over 2021 mainly due to an increase in rates earned for all loan categories.
−Removed: The average fully taxable-equivalent rate earned on the loan portfolio increased 51 basis points to 4.18% in 2022 compared to 3.67% in 2021.
−Removed: The higher rates earned on the loan portfolio were mostly related to actions taken by the Federal Reserve in 2022 to raise short-term interest rates, which caused most of the Company's variable rate loan portfolio to re-price higher.
−Removed: Additionally, fixed rate loans were generally originated in 2022 at higher interest rates than the weighted-average of the portfolio of fixed rate loans.
−Removed: The increase in interest rates earned was partly offset a decline in average loan balances of $102.4 million, or .7%, in 2022.
−Removed: Increased interest earned on business real estate and construction and land loans was the main driver of overall higher interest income.
−Removed: Business real estate loan interest grew $29.6 million in 2022 compared to 2021 as a result of an increase of 71 basis points in the average rate earned and higher average balances of $199.1 million, or 6.6%.
−Removed: Interest earned on construction and land loans increased $21.2 million due to an increase of 147 basis points in the average rate earned and growth of $85.2 million, or 7.4%, in average balances.
−Removed: Business loan interest income increased $11.3 million mainly due to a 49 basis point increase in the average rate earned, partly offset by a decrease of $462.1 million in average balances.
−Removed: Average balances of business loans included average balances of $41.9 million in Paycheck Protection Program (PPP) loans at December 31, 2022, which was a decline of $812.2 million from balances of $854.1 million at December 31, 2021.
−Removed: Interest on personal real estate loans increased $2.6 million as the average balance grew $44.0 million and the average rate earned increased four basis points.
−Removed: Interest on consumer loans grew $7.7 million over 2021 as the average rate earned increased 25 basis points and average balances were higher by $66.2 million.
−Removed: Revolving home equity loan interest increased $2.8 million due to an increase of 108 basis points in the average rate earned, slightly offset by lower average balances of $5.8 million.
−Removed: Interest on consumer credit card loans was higher by $558 thousand due to an increase of 72 basis points in the average rate earned, mostly offset by a decline of $30.3 million, or 5.3%, in average balances.
−Removed: Fully taxable-equivalent interest income on total investment securities increased $76.9 million during 2022, as average balances grew $1.5 billion and the average rate earned increased 34 basis points.
−Removed: The average rate on the total investment securities portfolio was 2.15% in 2022 compared to 1.81% in 2021, while the average balance of the total investment securities portfolio (excluding unrealized fair value adjustments on available for sale debt securities) was $14.9 billion in 2022 compared to an average balance of $13.5 billion in 2021.
−Removed: The increase in interest income was mainly due to higher interest income earned on mortgage-backed, asset-backed and U.S.
−Removed: government securities.
−Removed: Interest earned on mortgage-backed securities increased $40.7 million due to a 59 basis point increase in the average rate earned.
−Removed: The increase of $26.0 million in interest earned on asset-backed securities was due to an increase of 35 basis points in the average rate earned coupled with growth of $1.1 billion in average balances.
−Removed: Interest earned on U.S.
−Removed: government securities grew $8.2 million and was mainly impacted by growth of $7.3 million in inflation income on TIPS.
−Removed: Average balances of U.S.
−Removed: government securities increased $301.9 million, while the average rate earned declined 39 basis points.
−Removed: Interest on securities purchased under resell agreements decreased $14.7 million compared to 2021 due to a decrease of 142 basis points in the average rate, partly offset by growth in average balances of $220.1 million.
−Removed: Interest earned on deposits with banks increased $11.9 million over 2021, mainly due to a 98 basis point increase in the average rate earned, partly offset by a decline in average balances of $1.1 billion.
−Removed: During 2022, interest expense on deposits increased $19.2 million over 2021 and resulted mainly from an 11 basis point increase in the overall average rate paid on deposits.
−Removed: Interest expense on interest checking and money market accounts increased $18.0 million mainly due to higher rates paid, which grew 12 basis points, coupled with higher average balances of $1.1 billion.
−Removed: Interest expense on certificates of deposit over $100,000 grew $1.3 million, mainly due to a 37 basis point increase in the average rate paid.
−Removed: The overall rate paid on total deposits increased from .07% in 2021 to .18% in the current year.
−Removed: Interest expense on borrowings increased $26.0 million mainly due to a 95 basis point increase in the rate paid on securities sold under repurchase agreements.
−Removed: The overall average rate incurred on all interest bearing liabilities was .30% in 2022, compared to .07% in 2021.
Provision for Credit Losses
The provision for credit losses is comprised of provisions for credit losses on loans and unfunded lending commitments and is recorded to adjust the allowance for credit losses on loans and the liability for unfunded lending commitments to a level deemed adequate by management based on the factors mentioned in the “Allowance for Credit Losses on Loans and Liability for Unfunded Lending Commitments” section of this discussion.
−Removed: The provision for credit losses was $35.5 million in 2023, an increase of $7.4 million over the 2022 provision.
+Added: The provision for credit losses was $32.9 million in 2024, a decrease of $2.5 million from the 2023 provision.
The provision for credit losses on loans for the year ended December 31, 2024 was $39.2 million, compared to $43.3 million in 2023.
−Removed: The allowance for credit losses on loans totaled $162.4 million at December 31, 2023, an increase of $12.3 million compared to the prior year, and represented .94% of loans at year end 2023, compared to .92% at December 31, 2022.
−Removed: The provision for unfunded lending commitments was a benefit of $7.9 million during 2023, compared to a provision of $8.9 million in 2022.
+Added: The allowance for credit losses on loans totaled $162.7 million at December 31, 2024, an increase of $347 thousand compared to the prior year, and represented .95% of loans at year end 2024, compared to .94% at December 31, 2023.
+Added: The provision for unfunded lending commitments was a benefit of $6.3 million during 2024, compared to a benefit of $7.9 million in 2023.
The liability for unfunded lending commitments was $18.9 million at December 31, 2024, compared to $25.2 million at December 31, 2023.
1 unchanged sentence
(Dollars in thousands) 2024 2023 2022 '24-'23 '23-'22
+Added: Trust fees $ 214,430 $ 190,954 $ 184,719 12.3 % 3.4 %
Bank card transaction fees
2 unchanged sentences
100,336 90,992 94,381 10.3 (3.6)
−Removed: Consumer brokerage services
−Removed: 17,223 19,117 18,362 (9.9) 4.1
Capital market fees
19,776 14,100 14,231 40.3 (.9)
+Added: Consumer brokerage services
+Added: 18,141 17,223 19,117 5.3 (9.9)
Loan fees and sales
21 unchanged sentences
Non-interest income totaled $615.6 million, an increase of $42.5 million, or 7.4%, compared to $573.0 million in 2023.
−Removed: Bank card fees increased $15.0 million, or 8.5%, over the prior year, mainly due to increases in net corporate card fees of $10.6 million, net debit card fees of $2.9 million and net merchant fees of $1.6 million.
−Removed: The growth in net corporate card fees over the prior year was mainly due to lower rewards and network expense coupled with higher interchange income.
+Added: Trust fee income increased $23.5 million, or 12.3%, mainly as a result of higher private client trust fees (up 13.1%), which comprised 81.0% of trust fee income in 2024.
+Added: The market value of total customer trust assets totaled $74.8 billion at year end 2024, which was an increase of 8.6% over year end 2023 balances.
+Added: Bank card fees decreased $1.4 million, or .7%, from the prior year, mainly due to a decrease in net corporate card fees of $4.0 million, partly offset by increases in net credit card fees of $1.6 million, net debit card fees of $636 thousand and net merchant fees of $407 thousand.
+Added: The decline in net corporate card fees from the prior year was mainly due to lower interchange income coupled with higher rewards expense.
+Added: Net debit card fees increased mainly due to higher interchange income, while net credit card fees increased due to lower rewards expense.
+Added: Net merchant fees increased mainly due to higher merchant discount fees, partly offset by lower interchange fees.
+Added: Deposit account fees increased $9.3 million, or 10.3%, mainly due to higher corporate cash management fees of $8.5 million and other deposit fees of $894 thousand.
+Added: In 2024, corporate cash management fees comprised 64.6% of total deposit fees, while overdraft fees comprised 11.5% of total deposit fees.
+Added: Capital markets fees increased $5.7 million, or 40.3%, mainly due to higher trading securities income of $4.1 million and underwriting income of $2.4 million.
+Added: Revenue from consumer brokerage services increased $918 thousand, or 5.3%, mainly due to higher annuity fees, while loan fees and sales increased $1.7 million, or 15.5%, mainly due to higher loan commitment fees and mortgage banking revenue.
+Added: Other non-interest income increased $2.7 million, or 4.8%, over the prior year mainly due to higher gains on asset sales of $2.5 million, cash sweep commissions of $2.2 million and tax credit sales income of $2.1 million.
+Added: These increases were partly offset by lower letter of credit fees of $2.3 million and swap fees of $1.2 million.
+Added: During 2023, non-interest income totaled $573.0 million, an increase of $26.5 million, or 4.9%, compared to $546.5 million in 2022.
+Added: Bank card fees increased $15.0 million, or 8.5%, over 2022, mainly due to increases in net corporate card fees of $10.6 million, net debit card fees of $2.9 million and net merchant fees of $1.6 million.
+Added: The growth in net corporate card fees over 2022 was mainly due to lower rewards and network expense coupled with higher interchange income.
Net debit card fees increased mainly due to lower network expense, while net merchant fees increased mainly due to higher merchant discount fees.
1 unchanged sentence
The market value of total customer trust assets totaled $68.9 billion at year end 2023, which was an increase of 14.2% over year end 2022 balances.
−Removed: Deposit account fees decreased $3.4 million, or 3.6%, mainly due to lower overdraft and return item fees of $8.3 million, partly offset by growth in corporate cash management fees of $3.8 million.
+Added: Deposit account fees decreased $3.4 million, or 3.6%,
+Added: mainly due to lower overdraft and return item fees of $8.3 million, partly offset by growth in corporate cash management fees of $3.8 million.
In 2023, corporate cash management fees comprised 61.9% of total deposit fees, while overdraft fees comprised 12.8% of total deposit fees.
Revenue from consumer brokerage services decreased $1.9 million, or 9.9%, mainly due to lower annuity fees, while loan fees and sales decreased $2.0 million, or 15.0%, mainly due to lower mortgage banking revenue.
−Removed: Other non-interest income increased $12.7 million, or 28.2%, over the prior year mainly due to higher letter of credit fees of $3.2 million, cash sweep commissions of $2.9 million, gains on the sale of real estate of $2.1 million and swap fees of $1.1 million.
+Added: Other non-interest income increased $12.7 million, or 28.2%, over 2022 mainly due to higher letter of credit fees of $3.2 million, cash sweep commissions of $2.9 million, gains on the sale of real estate of $2.1 million and swap fees of $1.1 million.
In addition, increases of $6.4 million in fair value adjustments were recorded on the Company's deferred compensation plan, which are held in a trust and recorded as both an asset and a liability, affecting both other income and other expense.
These increases were partly offset by lower tax credit sales income of $2.4 million.
−Removed: During 2022, non-interest income totaled $546.5 million, a decrease of $13.9 million, or 2.5%, compared to $560.4 million in 2021.
−Removed: Trust fee income decreased $3.5 million, or 1.9%, as a result of lower institutional (down 7.0%), mutual fund (down 10.9%) and private client trust fees (down .3%).
−Removed: Private client trust fees comprised 79.7% of trust fee income in 2022.
−Removed: The market value of total customer trust assets totaled $60.3 billion at year end 2022, which was a decrease of 13.0% from year end 2021 balances.
−Removed: Bank card fees increased $8.3 million, or 4.9%, over 2021, mainly due to an increase in net corporate card fees of $8.3 million.
−Removed: The growth in net corporate card fees over 2021 was mainly due to higher interchange income, partly offset by higher rewards expense.
−Removed: Deposit account fees decreased $2.8 million, or 2.9%, mainly due to lower overdraft and return item fees of $4.2 million and personal account deposit fees of $1.2 million, partly offset by growth in corporate cash management
−Removed: fees of $2.5 million.
−Removed: In 2022, corporate cash management fees comprised 55.6% of total deposit fees, while overdraft fees comprised 21.1% of total deposit fees.
−Removed: In September 2022, the Company implemented enhancements to consumer checking accounts that eliminated return items fees and lowered overdraft fees.
−Removed: Capital market fees decreased $1.7 million, or 10.7%, compared to 2021, while revenue from consumer brokerage services increased $755 thousand, or 4.1%, mainly due to growth in annuity fees.
−Removed: Loan fees and sales decreased $16.6 million, or 55.8%, mainly due to lower mortgage banking revenue.
−Removed: Other non-interest income increased $1.8 million, or 4.1%, over 2021 mainly due to higher cash sweep commissions of $8.2 million and lease income of $1.3 million, income of $2.2 million from a life insurance death benefit recorded in the second quarter of 2022, a $2.6 million loss on an equity method investment recorded in 2021 and a lease impairment of $1.1 million recorded in 2021.
−Removed: These increases were partly offset by gains of $5.6 million recorded mainly on the sales of branch properties in 2021.
−Removed: In addition, a decrease of $6.6 million in fair value adjustments was recorded on the Company's deferred compensation plan.
Investment Securities Gains (Losses), Net
1 unchanged sentence
Net gains (losses) on sales of available for sale debt securities $ (196,283) $ (8,444) $ (20,273)
−Removed: Net gains (losses) on sales of equity securities
−Removed: Fair value adjustments on equity securities, net
+Added: Net gains (losses) on equity securities
178,092 (487) (926)
5 unchanged sentences
Net gains and losses on investment securities during 2024, 2023 and 2022 are shown in the table above.
−Removed: Included in these amounts are gains and losses arising from sales of securities from the Company’s available for sale debt portfolio and gains and losses relating to private equity investments, which are primarily held by the Parent’s majority-owned private equity subsidiary.
+Added: Included in these amounts are gains and losses arising from sales of securities from the Company’s available for sale debt portfolio, net gains and losses on equity securities, and gains and losses relating to private equity investments, which are primarily held by the Parent’s majority-owned private equity subsidiary.
The gains and losses on private equity investments include fair value adjustments, in addition to gains and losses realized upon disposition.
The portions of private equity investment gains and losses that are attributable to minority interests are reported as non-controlling interest in the consolidated statements of income, and resulted in expense of $4.2 million in 2024, $4.8 million in 2023, and $8.5 million in 2022.
+Added: Net securities gains of $7.8 million were recorded in 2024, which included net gains of $178.1 million on equity securities, net gains of $24.1 million in fair value adjustments on private equity investments, and net gains of $1.9 million on sales of private equity investments.
+Added: These gains were offset by net losses of $196.3 million realized on sales of available for sale debt securities resulting from the Company's sale of approximately $1.3 billion (book value) in bonds, mainly state and municipal, mortgage-backed, and corporate debt securities.
Net securities gains of $15.0 million were recorded in 2023, which included net gains of $24.0 million in fair value adjustments on private equity investments.
−Removed: This increase was partly offset by net losses of $8.4 million realized on sales resulting from the Company's sale of approximately $1.1 billion (book value) in bonds, mainly state and municipal securities and asset-backed securities, net losses of $100 thousand on sales of private equity investments, and net losses of $487 thousand in fair value adjustments on equity securities.
+Added: This increase was partly offset by losses of $8.4 million realized on sales of available for sale debt securities resulting from the Company's sale of approximately $1.1 billion (book value) in bonds, mainly state and municipal securities and asset-backed securities, net losses of $100 thousand on sales of private equity investments, and net losses of $487 thousand on equity securities.
Net securities gains of $20.5 million were recorded in 2022, which included net gains of $43.8 million in fair value adjustments on private equity investments.
−Removed: This increase was partly offset by losses of $20.3 million realized on sales resulting from the Company's sale of approximately $105 million (book value) in bonds, mainly mortgage-backed and corporate bond securities, net losses of $2.1 million on sales of private equity investments, and net losses of $943 thousand in fair value adjustments on equity securities.
−Removed: Net securities gains of $30.1 million were recorded in 2021, which included $1.5 million in net gains realized on sales of private equity investments, net gains of $31.7 million in fair value adjustments on private equity investments, and net gains of $187 thousand in fair value adjustments on equity investments.
−Removed: These net gains were offset by losses of $3.3 million realized on bond sales resulting from the Company's sale of approximately $73 million (book value) of bonds, mainly mortgage-backed securities and municipal securities.
+Added: This increase was partly offset by losses of $20.3 million realized on sales of available for sale debt securities resulting from the Company's sale of approximately $105 million (book value) in bonds, mainly mortgage-backed and corporate bond securities, net losses of $2.1 million on sales of private equity investments, and net losses of $926 thousand on equity securities.
+Added: The Company's significant gains in equity securities for the year ended December 31, 2024 primarily relate to gains recorded on its shares of Visa, as described in Note 3, Investment Securities.
+Added: Likewise, the $196.3 million losses realized on the Company's available for sale debt securities portfolio mainly relate to the successful execution of its planned available for sale debt security portfolio repositioning, in which the Company sold bonds with an amortized cost of $1.2 billion and subsequently reinvested the proceeds into higher yielding available for sale debt securities.
+Added: Additional information about the Company's available for sale debt portfolio repositioning transactions is discussed in Note 3, Investment Securities.
Non-Interest Expense
7 unchanged sentences
53,223 53,629 49,117 (.8) 9.2
−Removed: Deposit insurance
+Added: Professional and other services
35,077 36,198 35,805 (3.1) 1.1
3 unchanged sentences
19,291 19,420 18,101 (.7) 7.3
+Added: Deposit insurance 16,482 33,163 10,583 (50.3) N.M.
48,932 41,692 27,246 17.4 53.0
7 unchanged sentences
4,693 4,718 4,594
+Added: - Not meaningful.
Non-interest expense was $951.2 million in 2024, an increase of $20.2 million, or 2.2%, over the previous year.
+Added: Salaries and benefits expense increased $23.8 million, or 4.1%, mainly due to higher costs for full-time salaries, incentive compensation, payroll taxes and 401(k) expense, slightly offset by lower contract labor expense.
+Added: Full-time equivalent employees totaled 4,693 at December 31, 2024, compared to 4,718 at December 31, 2023.
+Added: Data processing and software expense increased $8.6 million, or 7.3%, primarily due to increased costs for service providers and higher software expense and bank card processing fees.
+Added: Net occupancy expense decreased $406 thousand, or .8%, mainly due to higher external rent income, partly offset by higher building depreciation expense.
+Added: Professional and other services expense decreased $1.1 million, or 3.1%, mainly due to declines in other professional fees, loan collection fees, and pension plan expense, partly offset by an increase in legal fees.
+Added: Marketing expense decreased $2.2 million, or 8.8%, while equipment expense increased $1.1 million, or 5.5%, mainly due to higher furniture and equipment depreciation expense.
+Added: Supplies and communication expense decreased $129 thousand, or .7%, while deposit insurance expense decreased $16.7 million due to a $16.0 million accrual recorded in 2023 for a one-time special assessment by the FDIC to replenish the Deposit Insurance Fund.
+Added: Other non-interest expense increased $7.2 million, or 17.4%, mainly due to litigation settlement expense of $10.0 million and a $5.0 million donation to a related charitable foundation, both recorded in 2024.
+Added: These increases were partly offset by deconversion costs of $2.1 million recorded in 2023, as well as decreases in swap fee amortization expense of $859 thousand, travel and entertainment expense of $687 thousand and recruiting expense of $489 thousand.
+Added: In 2023, non-interest expense was $931.0 million in 2023, an increase of $82.2 million, or 9.7%, over 2022.
Salaries and benefits expense increased $30.0 million, or 5.4%, mainly due to higher costs for full-time salaries, healthcare expense and payroll taxes, partly offset by lower incentive compensation expense.
2 unchanged sentences
Net occupancy expense increased $4.5 million, or 9.2%, mainly due to higher depreciation expense and real estate taxes, partly offset by higher rent income.
−Removed: Deposit insurance expense increased $22.6 million due to a $16.0 million accrual during the fourth quarter of 2023 for a one-time special assessment by the FDIC to replenish the Deposit Insurance Fund.
+Added: Deposit insurance expense increased $22.6 million due to a $16.0 million one-time special assessment accrual recorded the fourth quarter of 2023, mentioned above.
+Added: Professional and other services expense increased $393 thousand, or 1.1%, mainly due to higher pension plan expense, partly offset by lower loan collection fees.
Marketing expense increased $684 thousand, or 2.9%, while supplies and communication expense increased $1.3 million, or 7.3%, mainly due to higher postage expense, bank card reissuance fees and office supplies expense.
−Removed: Other non-interest expense increased $14.8 million, or 23.5%, mainly due to higher costs for travel and entertainment expense (up $1.9 million), miscellaneous losses (up $2.1 million), pension plan expense ($1.5 million) and lower deferred origination costs (up $1.6 million).
+Added: Other non-interest expense increased $14.4 million, or 53.0%, mainly due to higher costs for travel and entertainment expense (up $1.9 million), miscellaneous losses (up $2.1 million) and lower deferred origination costs (up $1.6 million).
In addition, an increase of $6.4 million in fair value adjustments were recorded on the Company's deferred compensation plan, and deconversion costs of $2.1 million relating to the transition of Commerce Financial Advisors support to LPL Financial's Institution Services platform were recorded in 2023.
−Removed: In 2022, non-interest expense was $848.8 million, an increase of $42.9 million, or 5.3%, over 2021.
−Removed: Salaries and benefits expense increased $28.8 million, or 5.5%, mainly due to higher costs for full-time salaries, incentive compensation, stock compensation, payroll taxes and 401(k) expense.
−Removed: Salaries expense included expense of $5.4 million for special bonuses paid to non-incentivized full-time and part-time employees in 2022.
−Removed: Full-time equivalent employees totaled 4,594 at December 31, 2022, reflecting a 1% increase over 2021.
−Removed: Data processing and software expense increased $8.9 million, or 8.7%, primarily due to higher bank card processing fees, software amortization and expense, and increased costs for service providers.
−Removed: Net occupancy expense increased $932 thousand, or 1.9%, mainly due to higher depreciation, utilities and outside services expense, partly offset by lower real estate taxes expense.
−Removed: Equipment expense increased $1.3 million, or 7.0%, mainly due to higher depreciation and equipment service contract expense, while marketing expense increased $2.0 million, or 9.0%.
−Removed: Supplies and communication expense increased $983 thousand, or 5.7%, mainly due to higher postage and courier expense and bank card reissuance fees, partly offset by lower data network expense.
−Removed: Other non-interest expense increased slightly over 2021.
−Removed: Higher costs for travel and entertainment expense (up $5.1 million), insurance expense (up $1.9 million), depreciation expense on leased assets (up $958 thousand) and airplane expense (up $864 thousand) were offset by $8.2 million in non-recurring litigation settlement costs recorded in 2021.
−Removed: In addition, the previously mentioned fair value adjustments on the Company's deferred compensation plan assets decreased $6.6 million from 2021.
Income tax expense was $145.1 million in 2024, compared to $134.5 million in 2023 and $132.4 million in 2022.
The effective tax rate, including the effect of non-controlling interest, was 21.6% in 2024 compared to 22.0% in 2023 and 21.3% in 2022.
+Added: The decrease in the effective tax rate in 2024 compared to the rate for 2023 was mostly due to lower state and local income taxes.
Additional information about income tax expense is provided in Note 9 to the consolidated financial statements.
62 unchanged sentences
Total loans at December 31, 2024 were $17.2 billion, an increase of $14.6 million, or 0.1%, over balances at December 31, 2023.
−Removed: The increase in loans during 2023 occurred in all categories over the previous year, with the exception of overdrafts.
−Removed: Business loans increased $357.3 million, or 6.3%, mainly due to a $173.9 million increase in commercial and industrial loans and a $95.1 million increase in lease loans.
−Removed: Commercial card and tax-advantaged lending, included within business loans, also increased during 2023.
−Removed: Construction loans increased $85.7 million, or 6.3%, mainly due to growth in commercial construction lending.
−Removed: Business real estate loans increased $312.3 million, or 9.2%, due mainly to increases in industrial, hotel and senior living lending, while multi-family and office building lending declined.
+Added: The increase in loans during 2024 occurred mainly due to an increase in revolving home equity, business loans and personal real estate loans, partly offset by decreases in business real estate and construction loans.
+Added: Business loans increased $34.8 million, or 0.6%, mainly due to a $68.0 million increase in commercial and industrial loans and a $23.1 million increase in tax-advantaged lending, partly offset by a $73.9 million decrease in commercial card loans.
+Added: Lease loans, included within business loans, also increased during 2024.
+Added: Construction loans decreased $36.9 million, or 2.5%, mainly due to a decline in commercial construction lending.
+Added: Business real estate loans decreased $58.1 million, or 1.6%, due mainly to decreases in industrial and retail lending, while owner-occupied, multi-family and hotel lending grew.
Personal real estate loans increased $32.2 million, or 1.1%.
The Company sells certain long-term fixed rate mortgage loans to the secondary market, and loan sales in 2024 totaled $70.0 million, compared to $29.9 million in 2023.
−Removed: Consumer loans increased $18.6 million, or .9%, mainly due to growth in consumer auto lending.
−Removed: Health services financing and fixed rate home equity loans also increased, offset by declines in other vehicle and equipment lending (mostly comprised of motorcycle loans) and continued run off of marine and recreational vehicle loan balances.
+Added: Consumer loans decreased $4.6 million, or .2%, mainly due to a decline in consumer auto lending.
+Added: Fixed rate home equity and other vehicle and equipment loans also decreased combined with continued run off of marine and recreational vehicle loan balances, offset by growth in private banking and health services financing.
Consumer credit card loans increased $6.0 million, or 1.0%, and revolving home equity loan balances increased $36.8 million, or 11.5%, compared to balances at year end 2023.
14 unchanged sentences
Additionally, the Company has $330.5 million of outstanding loans included within its $338.0 million oil and gas energy-related loan portfolio at December 31, 2024, which is further discussed within the Oil and Gas Energy Lending section of the Risk Elements of Loan Portfolio section located within Management's Discussion and Analysis of Financial Condition and Results of Operations.
−Removed: Also included in the business portfolio are corporate card loans, which totaled $407.6 million at December 31, 2023 and are made in conjunction with the Company’s corporate card
−Removed: business for corporate trade purchases.
+Added: Also included in the business portfolio are corporate card
+Added: loans, which totaled $332.1 million at December 31, 2024 and are made in conjunction with the Company’s corporate card business for corporate trade purchases.
Corporate card loans are made to corporate, non-profit and government customers nationwide, but have very short-term maturities, which limits credit risk.
4 unchanged sentences
Net loan charge-offs in this category totaled $1.1 million in 2024 compared to $3.1 million in 2023.
−Removed: Non-accrual business loans were $3.6 million (.1% of business loans) at December 31, 2023 compared to $6.8 million at December 31, 2022.
+Added: Non-accrual business loans were $101 thousand (less than .1% of business loans) at December 31, 2024 compared to $3.6 million at December 31, 2023.
Real Estate-Construction and Land
−Removed: The portfolio of loans in this category amounted to $1.4 billion at December 31, 2023, an increase of $85.7 million, or 6.3%, from the prior year and comprised 8.4% of the Company’s total loan portfolio.
+Added: The portfolio of loans in this category amounted to $1.4 billion at December 31, 2024, a decrease of $36.9 million, or 2.5%, from the prior year and comprised 8.2% of the Company’s total loan portfolio.
Commercial construction and land development loans totaled $1.2 billion, or 87.8% of total construction loans at December 31, 2024.
−Removed: These loans increased $100.9 million from 2022 year end balances, driving the growth in the total construction portfolio.
+Added: These loans decreased $36.0 million from 2023 year end balances, driving the decline in the total construction portfolio.
Commercial construction loans are made during the construction phase for small and medium-sized office and medical buildings, manufacturing and warehouse facilities, apartment complexes, shopping centers, hotels and motels, and other commercial properties.
1 unchanged sentence
Residential construction and land development loans at December 31, 2024 totaled $172.2 million, or 12.2% of total construction loans.
−Removed: A stable construction market has contributed to low loss rates on these loans, with net loan recoveries of $115 thousand and no net loan charge-offs in 2023 and 2022, respectively.
+Added: A stable construction market has contributed to low loss rates on these loans, with no net loan charge-offs and net loan recoveries of $115 thousand in 2024 and 2023, respectively.
Real Estate-Business
3 unchanged sentences
Additional information about business real estate loans by borrower is disclosed within the Real Estate - Business Loans section of the Risk Elements of Loan Portfolio section located within Management's Discussion and Analysis of Financial Condition and Results of Operations.
−Removed: At December 31, 2023, balances of non-accrual loans amounted to $60 thousand, less than .1% of business real estate loans, down from $189 thousand at year end 2022.
−Removed: The Company experienced net loan charge-offs of $104 thousand in 2023, compared to net loan recoveries of $20 thousand in 2022.
+Added: At December 31, 2024, balances of non-accrual loans amounted to $15.0 million, or .4% of business real estate loans, up from $60 thousand at year end 2023.
+Added: The Company experienced net loan recoveries of $106 thousand in 2024, compared to net loan charge-offs of $104 thousand in 2023.
Personal Banking Loans
8 unchanged sentences
This compares to $510.0 million of mortgage loans originated and $29.9 million of loans sold to the secondary market in 2023.
−Removed: The decrease in loan sales during 2023 compared to 2022 was mainly due to lower demand for mortgage loans.
−Removed: Net loan recoveries in 2023 totaled $37 thousand, and net loan recoveries were $74 thousand in 2022.
+Added: The increase in loan sales during 2024 compared to 2023 was mainly due to a shift in demand for fixed rate mortgage loans.
+Added: Net loan charge-offs in 2024 totaled $239 thousand, and net loan recoveries were $37 thousand in 2023.
Balances of non-accrual loans in this category were $1.0 million at December 31, 2024, compared to $1.7 million at year end 2023.
Consumer loans consist of private banking, automobile, motorcycle, marine, tractor/trailer, recreational vehicle (RV), fixed rate home equity, patient health care financing and other types of consumer loans.
−Removed: These loans totaled $2.1 billion at
−Removed: December 31, 2023.
+Added: These loans totaled $2.1 billion at December 31, 2024.
Approximately 38% of the consumer portfolio consists of automobile loans, 35% in private banking loans, 11% in fixed rate home equity loans, and 11% in healthcare financing loans.
−Removed: Total consumer loans increased $18.6 million at year end 2023 compared to year end 2022.
−Removed: Growth of $21.7 million in auto loans was supplemented by increases of $13.7 million and $4.5 million in patient healthcare financing and fixed rate home equity loans, respectively.
−Removed: These increases in consumer loan balances were partially offset by declines of $13.7 million in other vehicle and equipment loans and $3.7 million in marine and RV loans.
+Added: Total consumer loans decreased $4.6 million at year end 2024 compared to year end 2023.
+Added: A decline of $43.5 million in auto loans was supplemented by decreases of $13.6 million and $12.7 million in fixed rate home equity and other vehicle and equipment loans, respectively.
+Added: These decreases in consumer loan balances were partially offset by growth of $63.0 million in private banking loans and $11.9 million in patient healthcare financing.
Net charge-offs on total consumer loans were $9.8 million in 2024, compared to $6.2 million in 2023, averaging .46% and .30% of consumer loans in 2024 and 2023, respectively.
13 unchanged sentences
Loans Held for Sale
−Removed: At December 31, 2023, loans held for sale were comprised of certain long-term fixed rate personal real estate loans and loans extended to students while attending colleges and universities.
+Added: At December 31, 2024, loans held for sale were mainly comprised of certain long-term fixed rate personal real estate loans.
The personal real estate loans are carried at fair value and totaled $3.0 million at December 31, 2024.
−Removed: The student loans, carried at the lower of cost or fair value, totaled $2.2 million at December 31, 2023.
This portfolio is further discussed in Note 2 to the consolidated financial statements.
15 unchanged sentences
At December 31, 2024, the allowance for credit losses on loans was $162.7 million, compared to $162.4 million at December 31, 2023.
−Removed: The allowance for credit losses related to commercial loans increased $4.9 million during 2023, while the allowance for credit losses related to personal banking loans increased $7.4 million.
−Removed: The increase in the allowance for credit losses was due to an increase in outstanding loan balances, slower prepayment speeds, changes in forecast assumptions, and increases in past due consumer and consumer credit card loans.
+Added: The allowance for credit losses related to commercial loans decreased $1.4 million during 2024, due to a decrease in loan balances and the impact of a continued positive economic forecast.
+Added: Offsetting this decrease in the allowance for credit losses on commercial loans was a $1.8 million increase in the allowance for credit losses related to personal banking loans.
+Added: The allowance for credit losses on personal banking loans increased over the December 31, 2023 allowance due to recent increased loan net charge-offs and past due trends in the credit card and auto portfolios, partially offset by an increase in the prepayment speeds of personal real estate loans.
The percentage of allowance to loans increased to .95% at December 31, 2024, compared to .94% at December 31, 2023.
1 unchanged sentence
Net loan charge-offs totaled $38.9 million in 2024, representing a $7.8 million increase compared to net charge-offs of $31.1 million in 2023.
−Removed: The increase was largely due to higher net charge-offs of $6.4 million, $2.5 million, $2.1 million, and $1.1 million on consumer credit card loans, consumer loans, business loans, and overdrafts, respectively, during 2023.
+Added: The increase was largely due to higher net charge-offs of $7.0 million and $3.5 million on consumer credit card loans and consumer loans, respectively, during 2024, and partially offset by a $2.0 million decrease in net charge-offs on business loans in 2024 compared to 2023.
Consumer credit card loan net charge-offs were 4.64% of average consumer credit card loans in 2024, compared to 3.40% in 2023, and consumer loan net charge-offs were .46% of average consumer loans in 2024, compared to .30% in 2023.
−Removed: The ratio of net loan charge-offs to total average loans outstanding was .19% in 2023 and .12% in both 2022 and 2021.
+Added: The ratio of net loan charge-offs to total average loans outstanding was .23% in 2024 and .19% in 2023.
Total loans delinquent 90 days or more and still accruing were $24.5 million at December 31, 2024, an increase of $2.7 million compared to year end 2023.
−Removed: The increase was mainly driven by growth of $2.9 million in personal real estate loans.
−Removed: Non-accrual loans at December 31, 2023 were $7.3 million, a decrease of $994 thousand from the prior year, mainly due to a decrease in business non-accrual loans of $3.1 million, partly offset by an increase of $2.0 million in revolving home equity non-accrual loans.
+Added: Non-accrual loans at December 31, 2024 were $18.3 million, an increase of $11.0 million from the prior year, mainly due to an increase in business real estate non-accrual loans of $15.0 million, partly offset by a decrease of $3.5 million in business non-accrual loans.
The allowance for credit losses as a percentage of non-accrual loans was 890.4% at December 31, 2024, compared to 2,220.9% at December 31, 2023.
−Removed: The increase in the ratio of the allowance to non-accrual loans was driven by the decrease in non-accrual loans outstanding and an increase in the allowance for credit losses.
−Removed: The 2023 year-end balance of non-accrual loans was comprised of $3.6 million of business loans, $1.7 million of personal real estate loans, $2.0 million of revolving home equity loans, and $60 thousand of business real estate loans.
−Removed: At December 31, 2023, the liability for unfunded lending commitments was $25.2 million, an decrease of $7.9 million compared to December 31, 2022.
+Added: The decrease in the ratio of the allowance to non-accrual loans was driven by the increase in non-accrual loans outstanding.
+Added: The 2024 year-end balance of non-accrual loans was comprised of $101 thousand of business loans, $220 thousand of construction real estate loans, $1.0 million of personal real estate loans, $2.0 million of revolving home equity loans, and $15.0 million of business real estate loans.
+Added: At December 31, 2024, the liability for unfunded lending commitments was $18.9 million, a decrease of $6.3 million compared to December 31, 2023.
The decrease in the liability for unfunded lending commitments during 2024 was driven primarily by decreases in the balance of unfunded lending commitments.
−Removed: 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.
+Added: The Company's unfunded lending commitments primarily relate to construction loans, and the Company's estimate for credit losses in its unfunded lending commitments
+Added: 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.
45 unchanged sentences
Real estate — construction and land — (.01) —
+Added: Real estate — personal .01 — —
Consumer .46 .30 .18
18 unchanged sentences
Total $ 162,742 100.0 % .95 % $ 162,395 100.0 % .94 %
−Removed: The following schedule shows the liability for unfunded lending commitments.
+Added: The following schedule shows a summary of the activity in the liability for unfunded lending commitments.
Years Ended December 31
28 unchanged sentences
$ 24,516 $ 21,864 $ 15,830 $ 11,726 $ 22,190
−Removed: Non-accrual loans totaled $7.3 million at year end 2023, a decrease of $994 thousand from the balance at year end 2022.
−Removed: The decrease from December 31, 2022 occurred mainly in business loans, which decreased $3.1 million.
−Removed: This decrease was partially offset by an increase in revolving home equity loans of $2.0 million.
−Removed: At December 31, 2023, non-accrual loans were comprised of business (49.6%), revolving home equity (27.0%), personal real estate (22.6%), and business real estate (0.8%) loans.
+Added: Non-accrual loans totaled $18.3 million at year end 2024, an increase of $11.0 million from the balance at year end 2023.
+Added: The increase from December 31, 2023 occurred mainly in business real estate, which increased $14.9 million.
+Added: This increase was partially offset by a decrease in business loans of $3.5 million.
+Added: At December 31, 2024, non-accrual loans were comprised of business real estate (81.8%), revolving home equity (10.8%), personal real estate (5.6%), construction and land real estate (1.2%), and business (0.6%) loans.
Foreclosed real estate totaled $343 thousand at December 31, 2024, an increase of $73 thousand when compared to December 31, 2023.
6 unchanged sentences
Although these loans are generally identified as potential problem loans, they may never become non-performing.
−Removed: Such loans totaled $216.4 million at December 31, 2023, compared with $259.7 million at December 31, 2022, resulting in a decrease of $43.3 million or 16.7%.
−Removed: The decrease in potential problem loans was largely driven by a $47.5 million decrease in construction and land loans and a $41.7 million decrease in business real estate loans, partly offset by a $45.3 million increase in business loans.
+Added: Such loans totaled $330.3 million at December 31, 2024, compared with $216.4 million at December 31, 2023, resulting in an increase of $113.9 million or 52.7%.
+Added: The increase in potential problem loans was largely driven by a $56.8 million increase in business loans and a $55.2 million increase in business real estate loans.
(In thousands)
13 unchanged sentences
The Company does not obtain updated appraisals or valuations unless the loans become significantly delinquent or are in the process of being foreclosed upon.
+Added: In addition, FICO scores are obtained and updated on a quarterly basis for most of the loans in the Personal Banking portfolio.
+Added: This is a published credit score designed to measure the risk of default by taking into account various factors from a borrower's financial history and is considered supplementary information utilized by the Company, as management does not consider this information in evaluating the allowance for credit losses on loans.
+Added: The Bank normally obtains a FICO score at the loan's origination and renewal dates, and updates are obtained on a quarterly basis.
For credit monitoring purposes, the Company analyzes delinquency information, current FICO scores, and line utilization.
2 unchanged sentences
The Company’s portfolio of construction and land loans, as shown in the table below, amounted to 8.2% of total loans outstanding at December 31, 2024.
−Removed: The largest component of construction and land loans was commercial construction, which increased $100.9 million during the year ended December 31, 2023.
+Added: The largest component of construction and land loans was commercial construction, which decreased $25.7 million during the year ended December 31, 2024.
At December 31, 2024, multi-family residential construction loans totaled approximately $526.6 million, or 44.0%, of the commercial construction loan portfolio.
85 unchanged sentences
Auto loans comprised 38% of the consumer loan portfolio at December 31, 2024, and outstanding balances in the auto loan portfolio were $776.7 million and $820.3 million at December 31, 2024 and 2023, respectively.
−Removed: The balances over 30 days past due amounted to $9.5 million at December 31, 2023, compared to $9.9 million at the end of 2022, and comprised 1.2% of the outstanding balances of these loans at both December 31, 2023 and 2022.
+Added: The balances over 30 days past due amounted to $14.4 million at December 31, 2024, compared to $9.5 million at the end of 2023, and comprised 1.9% of the outstanding balances of these loans at December 31, 2024 compared to 1.2% at 2023.
For the year ended December 31, 2024, $319.5 million of new auto loans were originated, compared to $364.9 million during 2023.
11 unchanged sentences
To mitigate some of the risk involved with this credit card promotional feature, the Company performs credit checks and detailed analysis of the customer borrowing profile before approving the loan application.
+Added: Below are the FICO scores for the Company's consumer credit card loan portfolio at December 31, 2024 and 2023.
Management believes that the risks in the consumer loan portfolio are reasonable and the anticipated loss ratios are within acceptable parameters.
+Added: December 31, 2024 December 31, 2023
+Added: 100.0 % 100.0 %
Oil and Gas Energy Lending
−Removed: The Company's energy lending portfolio was comprised of lending to the petroleum and natural gas sectors and totaled $272.0 million at December 31, 2023, a decrease of $24.4 million from year end 2022, as shown in the table below.
+Added: The Company's energy lending portfolio was comprised of lending to the petroleum and natural gas sectors and totaled $338.0 million at December 31, 2024, an increase of $66.0 million from year end 2023, as shown in the table below.
(In thousands)
8 unchanged sentences
The largest component, available for sale debt securities, decreased 7.1% during 2024 to $10.1 billion (excluding unrealized gains/losses in fair value) at year end 2024.
−Removed: During 2023, debt securities of $138.8 million were purchased, which included $100.3 million in U.S.
−Removed: government and federal agency obligations and $37.6 million in government-sponsored enterprise obligations.
+Added: During 2024, available for sale debt securities of $2.6 billion were purchased, which included $2.2 billion in U.S.
+Added: government and federal agency obligations and $395.0 million in asset-backed securities.
Total sales, maturities and pay downs of available for sale debt securities were $3.4 billion during 2024.
During 2025, maturities and pay downs of approximately $ 1.6 billion are expected to occur.
−Removed: The Company's tax-exempt investment portfolio is primarily comprised of tax-exempt municipal bonds.
−Removed: In 2023 the Company's tax-exempt investment portfolio represented 30% of the Company's total state and municipal investment portfolio, as compared to 50% in 2022.
−Removed: The average tax equivalent yield earned on total investment securities was 2.29% in 2023 and 2.15% in 2022.
−Removed: At December 31, 2023, the fair value of available for sale securities was $9.7 billion, which included a net unrealized loss in fair value of $1.2 billion, compared to a net unrealized loss of $1.5 billion at December 31, 2022.
+Added: The Company's tax-exempt investment portfolio is included in its state and municipal obligations and represented 39% of this portfolio at December 31, 2024, compared to 30% at December 31, 2023.
+Added: The decline in balances of tax-exempt investment securities during 2024 was mostly due to sales of securities as part of the Company's available for sale debt securities portfolio repositioning discussed in Note 3, Investment Securities.
+Added: At December 31, 2024, the fair value of available for sale securities was $9.1 billion, which included a net unrealized loss in fair value of $990.6 million, compared to a net unrealized loss of $1.2 billion at December 31, 2023.
The overall unrealized loss in fair value at December 31, 2024 included net losses of $38.9 million is U.S.
23 unchanged sentences
At December 31, 2024, the available for sale portfolio included $3.4 billion of agency mortgage-backed securities, which are collateralized bonds issued by agencies including FNMA, GNMA, FHLMC, FHLB, and Federal Farm Credit Banks.
−Removed: Non-agency mortgage-backed securities totaled $1.2 billion and included $336.0 million collateralized by commercial mortgages and $821.9 million collateralized by residential mortgages at December 31, 2023.
+Added: Non-agency mortgage-backed securities totaled $568.7 million and included $325.6 million collateralized by commercial mortgages and $243.1 million collateralized by residential mortgages at December 31, 2024.
At December 31, 2024, U.S.
16 unchanged sentences
*Based on call provisions and estimated prepayment speeds.
−Removed: Equity securities include common and preferred stock with readily determinable fair values that totaled $5.7 million at December 31, 2023, compared to $6.2 million at December 31, 2022.
+Added: Equity securities mainly include common and preferred stock with readily determinable fair values that totaled $48.4 million at December 31, 2024, compared to $5.7 million at December 31, 2023.
Other securities totaled $230.1 million at December 31, 2024 and $222.5 million at December 31, 2023.
10 unchanged sentences
10,120 10,640
−Removed: Equity method investments — 1,434
Private equity investments in debt securities
5 unchanged sentences
In addition to its holdings in the investment securities portfolio, the Company invests in securities purchased under agreements to resell, which totaled $625.0 million at December 31, 2024 and $450.0 million at December 31, 2023.
−Removed: Of the total resale agreements outstanding at December 31, 2023, $325.0 million mature in 2024 and $125.0 million mature in 2025.
−Removed: The resale agreements have fixed rates or variable rates that fluctuate with published indices.
+Added: Of the total resale agreements outstanding at December 31, 2024, $125.0 million mature in 2025, $250.0 million mature in 2028, and $250.0 million mature in 2029.
+Added: The resale agreements have fixed base rates and some of the agreements include structures that increase the base rate when interest rates decline to certain levels.
The counterparties to these agreements are other financial institutions from whom the Company has accepted collateral of $649.6 million in marketable investment securities at December 31, 2024.
The average rate earned on these agreements during 2024 was 3.2%, compared to 1.9% in 2023.
−Removed: At December 31, 2022, the Company also held offsetting repurchase and resale agreements totaling $200.0 million, which are further discussed in Note 20 to the consolidated financial statements.
−Removed: These agreements involve the exchange of collateral under simultaneous repurchase and resale agreements with the same financial institution counterparty.
−Removed: These repurchase and resale agreements have been offset against each other in the balance sheet, as permitted under current accounting guidance.
−Removed: The agreements matured in 2023 and earned an average of 30 basis points during 2023, compared to 29 basis points in 2022.
Deposits and Borrowings
1 unchanged sentence
Total period-end deposits were $25.3 billion at December 31, 2024, compared to $25.4 billion last year, reflecting a decrease of $70.3 million, or .3%.
−Removed: Average deposits decreased $2.8 billion, or 9.9%, in 2023 compared to 2022, resulting from decreases of $6.1 billion and $2.7 billion in money market account balances and business demand deposits, respectfully.
−Removed: Partially offsetting these decreases were increases in interest checking and certificate of deposit account balances of $4.7 billion and $1.4 billion, respectively.
+Added: Average deposits decreased $801.4 million, or 3.2%, in 2024 compared to 2023, mainly resulting from decreases of $884.5 million, $152.8 million and $110.8 million in business demand deposits, savings account balances and money market account balances, respectively.
+Added: Partly offsetting these decreases was an increase in interest checking account balances of $328.6 million.
The following table shows year end deposit balances by type, as a percentage of total deposits.
9 unchanged sentences
A maturity schedule of all certificates of deposits outstanding at December 31, 2024 is included in Note 7 on Deposits in the consolidated financial statements.
−Removed: Total uninsured deposits were calculated using the same methodology that the Company uses to determine uninsured deposits for regulatory reporting and amounted to $10.8 billion and $11.0 billion at December 31, 2023 and December 31, 2022.
+Added: Total uninsured deposits were calculated using the same methodology that the Company uses to determine uninsured deposits for regulatory reporting and amounted to $10.8 billion at both December 31, 2024 and December 31, 2023.
The following table shows a detailed breakdown of the maturities of uninsured certificates of deposit at December 31, 2024.
9 unchanged sentences
Total balances of federal funds purchased and repurchase agreements outstanding at December 31, 2024 were $2.9 billion, comprised of federal funds purchased of $123.7 million and repurchase agreements of $2.8 billion.
−Removed: Compared to balances at December 31, 2022, December 31, 2023 balances of federal funds purchased increased $101.4 million and repurchase agreements outstanding decreased $34.4 million.
−Removed: On an average basis, these borrowings increased $400.4 million, or 16.4%, during 2023, due to an increase of $412.5 million in average federal funds purchased and a decrease of $12.2 million (average) in repurchase agreements.
+Added: At December 31, 2024, balances of federal funds purchased decreased $137.6 million, while repurchase agreements outstanding increased $155.5 million compared to balances at December 31, 2023.
+Added: On an average basis, these borrowings decreased $218.4 million, or 7.7%, during 2024, due to a decrease of $265.7 million in federal funds purchased, partly offset by an increase of $47.4 million in repurchase agreements.
The average rates paid on federal funds purchased and repurchase agreements were 5.31% and 3.38%, respectively, during 2024, compared to rates of 5.10% on federal funds purchased and 3.12% paid on repurchase agreements during 2023.
In addition to the funding sources above, the Company may borrow from the FHLB on a short-term basis or long-term basis.
−Removed: During 2023, the Company had average short-term borrowings from the FHLB of $756.4 million.
−Removed: All of the short-term borrowings were repaid by the Company before December 31, 2023, and the average rate paid on the FHLB borrowings during 2023 was 5.22%.
+Added: During 2024, there were no short-term borrowings from the FHLB.
During 2023, the Company had average short-term borrowings from the FHLB of $756.4 million.
−Removed: short-term borrowings were repaid by the Company before December 31, 2022, and the average rate paid on the FHLB borrowings was 4.02%.
+Added: All of the short-term borrowings were repaid by the Company before December 31, 2023, and the average rate paid on FHLB borrowings was 5.22%.
The Company did not borrow any long-term funds from the FHLB during 2024 or 2023.
23 unchanged sentences
There were $3.0 million federal funds sold at December 31, 2024, which are funds lent to the Company’s correspondent bank customers with overnight maturities.
−Removed: The fair value of the available for sale debt portfolio was $9.7 billion at December 31, 2023 and included an unrealized loss of $1.2 billion.
−Removed: The total net unrealized loss included net losses of $987.1 million on mortgage-backed and asset-backed securities, $149.2 million on state and municipal obligations, and $47.3 million on other debt securities.
−Removed: Resale agreements totaled $450.0 million at December 31, 2023, with $325.0 million of the agreements maturing in the first quarter of 2024 and $125.0 million maturing in the first quarter of 2025.
+Added: The fair value of the available for sale debt portfolio was $9.1 billion at December 31, 2024 and included an unrealized loss of $994.5 million.
+Added: The total net unrealized loss included net losses of $846.9 million on mortgage-backed and asset-backed securities, $79.9 million on state and municipal obligations, and $41.9 million on U.S.
+Added: government and federal agency obligations.
+Added: Resale agreements totaled $625.0 million at December 31, 2024, with $125.0 million of the agreements maturing in the first quarter of 2025 and the remaining amount to mature through 2029.
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 $649.6 million in fair value at December 31, 2024.
−Removed: The available for sale debt securities portfolio has a diverse mix of high quality and liquid investment securities with a duration of 4.1 years.
+Added: The Company's available for sale debt securities portfolio has a diverse mix of high quality and liquid investment securities with a duration of 4.0 years at December 31, 2024.
Approximately $1.6 billion of the available for sale debt portfolio is expected to mature or pay down during 2025, and these funds offer substantial resources to meet either new loan demand or offset potential reductions in the Company’s deposit funding base.
16 unchanged sentences
These core deposits are normally less volatile, often with customer relationships tied to other products offered by the Company promoting long lasting relationships and stable funding sources.
−Removed: Core deposits decreased $2.7 billion at year end 2023 compared to year end 2022, primarily due to decreases in consumer and commercial deposits of $1.6 billion and $935 million, respectively.
+Added: Core deposits increased $417.0 million at year end 2024 compared to year end 2023, primarily due to an increase in commercial deposits of $605.6 million, partly offset by decreases in wealth management deposits and consumer deposits of $111.8 million and $68.7 million, respectively.
While the Company considers core consumer and 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.
10 unchanged sentences
Amid the banking sector's period of uncertainty during the second quarter of 2023, the Company issued several tranches of short-term brokered certificates of deposit totaling $1.2 billion, which all matured by December 31, 2023.
+Added: During the third quarter of 2024, the Company issued $100.0 million of brokered certificates, all of which matured by December 31, 2024.
+Added: 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.
38 unchanged sentences
Because of its lack of significant long-term debt, the Company believes that, through its Capital Markets Group 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.
−Removed: The cash flows from the operating, investing and financing activities of the Company resulted in a net increase in cash, cash equivalents and restricted cash of $1.8 billion in 2023, as reported in the consolidated statements of cash flows.
+Added: The cash flows from the operating, investing and financing activities of the Company resulted in a net increase in cash, cash equivalents and restricted cash of $688.7 million in 2024, as reported in the consolidated statements of cash flows.
Operating activities, consisting mainly of net income adjusted for certain non-cash items, provided cash flow of $577.9 million and has historically been a stable source of funds.
−Removed: Investing activities provided cash of $2.2 billion.
−Removed: Sales and maturities proceeds (net of purchases) of investment securities provided cash of $2.8 billion, repayments of securities purchased under agreements to resell (net of securities purchased under agreements to resell) provided cash of $375.0 million, and a net increase in the loan portfolio used cash of $933.7 million.
+Added: Investing activities provided cash of $483.8 million.
+Added: Sales and maturities proceeds (net of purchases) of investment securities provided cash of $750.7 million, repayments of securities purchased under agreements to resell (net of securities purchased under agreements to resell) used cash of $175.0 million, and a net increase in the loan portfolio used cash of $54.7 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.
During 2024, financing activities used cash of $372.9 million.
−Removed: This decrease in cash was largely driven by a decline in deposits, which used cash of $730.8 million.
−Removed: The Company paid cash dividends of $134.7 million on common stock, and treasury stock purchases used cash of $76.4 million during 2023.
+Added: This decrease in cash was largely driven treasury stock purchases, which used cash of $170.5 million.
+Added: The Company paid cash dividends of $139.5 million on common stock, and a decline in deposits used cash of $74.0 million during 2024.
Federal funds purchases and short-term securities sold under agreements to repurchase provided cash of $17.9 million.
39 unchanged sentences
As many commitments expire unused or only partially used, these totals do not necessarily reflect future cash requirements.
−Removed: The allowance for these commitments is recorded in the Company’s liability for unfunded lending commitments within other liabilities on its consolidated balance sheets.
−Removed: At December 31, 2023, the liability for unfunded commitments totaled $25.2 million.
−Removed: See further discussion of the liability for unfunded lending commitments in Note 2 to the consolidated financial statements.
+Added: Management does not anticipate any material losses arising from commitments or contingent liabilities and believes there are no material commitments to extend credit that represent risks of an unusual nature.
The Company funds a defined benefit pension plan for a portion of its employees.
44 unchanged sentences
Per share cash dividends paid by the Company increased 5.0% in 2024 compared with 2023, and the Company increased its first quarter 2025 cash dividend 7%, making 2025 the Company's 57th consecutive year of regular cash dividend increases.
−Removed: The Company also distributed its 30th consecutive annual 5% stock dividend in December 2023.
+Added: The Company also distributed its 31st consecutive annual 5% stock dividend in December 2024.
Interest Rate Sensitivity
24 unchanged sentences
(Dollars in millions)
−Removed: Assumed Deposit Attrition
−Removed: Assumed Deposit Attrition
300 basis points rising $ 24.8 2.28 % $ 13.8 1.29 %
4 unchanged sentences
300 basis points falling (54.9) (5.05) (62.0) (5.83)
−Removed: Under the simulation, in the three rising rate scenarios interest rate risk is less rate sensitive and in the three falling rate scenarios interest rate risk is more rate sensitive than the previous quarter.
−Removed: This is mainly due to a change in the funding mix.
−Removed: The Company has less wholesale borrowings, which are more rate sensitive, and higher deposits, which are less rate sensitive.
−Removed: Deposits are held constant for this simulation in both the current and previous quarters.
+Added: Under the simulation, in the three rising rate scenarios interest rate and three falling rate scenarios, interest rate risk is more asset sensitive when compared to the scenarios in the previous quarter.
+Added: This change is primarily due to actions taken by the Federal Reserve to reduce short-term interest rates 50 basis points.
+Added: As short-term rates fall, deposit rates become less sensitive, which results in larger declines in net interest income in the falling rate scenarios.
+Added: This impact was slightly offset by an increase in deposits and by the benefit of interest rate floors, which result in progressively more interest income in the falling 200 and 300 basis points scenarios.
+Added: In the rising interest rate scenarios, deposits that are now less sensitive to rates result in larger increases in net interest income.
+Added: Deposit balances were held constant for this simulation in both the current and previous quarters.
Derivative Financial Instruments
88 unchanged sentences
The Consumer segment includes consumer deposits, consumer finance, and consumer debit and credit cards.
−Removed: During 2023, income before income taxes for the Consumer segment increased $12.9 million, or 8.8%, compared to 2022.
−Removed: This increase was due to growth in net interest income of $47.1 million, or 12.8%, partly offset by higher non-interest expense of $17.9 million, or 5.8%, an increase in the provision for credit losses of $9.6 million, or 54.0%, and a decline in non-interest income of $6.6 million, or 6.2%.
−Removed: Net interest income increased due to a $59.3 million increase in net allocated funding credits assigned to the Consumer segment's loan and deposit portfolios and a $41.8 million increase in loan interest income, partly offset by an increase of $54.0 million in deposit interest expense.
−Removed: Non-interest income decreased mainly due to lower deposit account fees (mainly overdraft and return item fees) and mortgage banking revenue, partly offset by growth in net debit card fees .
−Removed: Non-interest expense increased over the previous year mainly due to higher salaries and benefits expense, FDIC insurance expense, data processing and software expense and allocated support costs for consumer administration and operations and information technology.
−Removed: The provision for credit losses totaled $27.5 million, a $9.6 million increase over the prior year, which resulted mainly from higher consumer credit card and personal loan net charge-offs.
−Removed: Total average loans in this segment increased $127.4 million, or 3.4%, in 2023 compared to 2022 mainly due to increases in personal real estate loans and revolving and fixed
−Removed: rate home equity loans.
−Removed: Average deposits decreased $1.2 billion, or 8.8%, from the prior year, resulting from declines in money market, interest checking and savings deposit account balances, partly offset by growth in certificate of deposit account balances.
During 2024, income before income taxes for the Consumer segment decreased $52.5 million, or 17.6%, compared to 2023.
−Removed: This decrease was due to a decline in non-interest income of $19.7 million, or 23.2%, and higher non-interest expense of $8.9 million, or 3.0%.
−Removed: These decreases to income were partly offset by growth in net interest income of $18.1 million, or 5.2%, and a decrease in the provision for credit losses of $5.4 million, or 23.2%.
−Removed: Net interest income increased due to an $18.7 million increase in net allocated funding credits assigned to the Consumer segment's loan and deposit portfolios.
−Removed: Non-interest income decreased mainly due to declines of $13.2 million in mortgage banking revenue and $4.0 million in overdraft and return item fees.
−Removed: Non-interest expense increased over the prior year mainly due to higher occupancy expense, insurance expense and allocated service and support costs (mainly bank card fraud operations and information technology), partly offset by lower allocated service costs for branch employees and mortgage operations.
−Removed: The provision for credit losses totaled $17.8 million, a $5.4 million decrease from 2021, which resulted mainly from lower credit card loan net charge-offs, slightly offset by higher consumer loan net charge-offs.
−Removed: Total average loans in this segment decreased $145.3 million, or 3.8%, in 2022 compared to 2021 mainly due to declines in consumer credit card and auto loans.
−Removed: Average deposits increased $561.0 million, or 4.4%, over 2021, resulting from growth in personal demand, savings and interest checking and money market deposit account balances.
+Added: This decrease was due to a decline in net interest income of $40.5 million, or 7.3%, an increase in the provision for credit losses of $10.2 million, or 37.0%, and higher non-interest expense of $4.9 million, or 1.5%, partly offset by an increase in non-interest income of $3.0 million, or 3.0%.
+Added: Net interest income decreased due to an increase of $66.4 million in deposit interest expense, partly offset by a $19.7 million increase in loan interest income and a $6.2 million increase in net allocated funding credits assigned to the Consumer segment's loan and deposit portfolios.
+Added: Non-interest income increased mainly due to growth in net bank card fees (mainly credit and debit card fees), deposit account fees and mortgage banking revenue .
+Added: Non-interest expense increased over the same period in the previous year mainly due to higher miscellaneous losses and allocated support costs for information technology and retail operations, partly offset by lower salaries and benefits expense and allocated management support costs.
+Added: The provision for credit losses totaled $37.6 million, a $10.2 million increase over the prior year, which resulted mainly from higher consumer credit card and auto loan net charge-offs, partly offset by lower other vehicle and equipment loan net charge-offs.
+Added: Total average loans in this segment decreased $1.7 million in 2024 compared to 2023 mainly due to declines in auto and
+Added: other vehicle loans and personal real estate loans, partly offset by higher revolving and fixed rate home equity loans.
+Added: Average deposits increased $44.4 million, or .4%, over the prior year, resulting from growth in certificate of deposit account balances, partly offset by declines in savings, interest checking and money market deposit account balances.
+Added: During 2023, income before income taxes for the Consumer segment decreased $65.3 million, or 18.0%, compared to 2022.
+Added: This decrease was due to lower net interest income of $29.6 million, or 5.1%, higher non-interest expense of $20.2 million, or 6.6%, an increase in the provision for credit losses of $9.6 million, or 54.1%, and a decline in non-interest income of $5.9 million, or 5.6%.
+Added: Net interest income decreased due to a $17.4 million decrease in net allocated funding credits assigned to the Consumer segment's loan and deposit portfolios and an increase of $54.0 million in deposit interest expense, partly offset by a $41.8 million increase in loan interest income.
+Added: Non-interest income decreased mainly due to lower deposit account fees (mainly overdraft and return item fees) and mortgage banking revenue, partly offset by growth in net debit card fees .
+Added: Non-interest expense increased over 2022 mainly due to higher salaries and benefits expense, FDIC insurance expense, data processing and software expense and allocated support costs for consumer administration and operations and information technology.
+Added: The provision for credit losses totaled $27.5 million, a $9.6 million increase over 2022, which resulted mainly from higher consumer credit card and personal loan net charge-offs.
+Added: Total average loans in this segment increased $127.4 million, or 3.4%, in 2023 compared to 2022 mainly due to increases in personal real estate loans and revolving and fixed rate home equity loans.
+Added: Average deposits decreased $1.2 billion, or 8.8%, from 2022, resulting from declines in money market, interest checking and savings deposit account balances, partly offset by growth in certificate of deposit account balances.
The Commercial segment provides lending (including the Small Business Banking product line within the branch network), leasing, international services, and business, government deposit, and related commercial cash management services, as well as merchant and commercial bank card products.
−Removed: The segment includes the Capital Markets Group, which sells fixed-income securities to correspondent banks, corporations, public institutions, municipalities, and individuals and also provides securities safekeeping and bond accounting services.
−Removed: Pre-tax income for 2023 increased $22.0 million, or 7.1%, compared to 2022, mainly due to increases net interest income and non-interest income, partly offset by increases in non-interest expense and the provision for credit losses.
−Removed: Net interest income increased $29.7 million, or 6.6%, due to higher loan interest income of $272.9 million.
−Removed: This increase was partly offset by a decrease of $78.1 million in net allocated funding credits assigned to the Commercial segment's loan and deposit portfolios and increases in interest expense on customer repurchase agreements and deposits of $49.4 million and $116.4 million, respectively.
+Added: The segment includes 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.
+Added: Pre-tax income for 2024 decreased $254 thousand, or .1%, compared to 2023, mainly due to lower net interest income and higher non-interest expense, mostly offset by higher non-interest income and a decrease in the provision for credit losses.
+Added: Net interest income decreased $5.8 million, or 1.1%, due to lower net allocated funding credits of $30.9 million, coupled with higher interest expense on deposits and borrowings of $21.0 million and $8.2 million, respectively.
+Added: These decreases to income were partly offset by higher loan interest income of $53.1 million.
+Added: Non-interest income increased $13.0 million, or 5.3%, over the previous year mainly due to growth in deposit account fees (mainly corporate cash management fees), capital market fees, tax credit sales fees and loan commitment fees.
+Added: These increases were partly offset by decreases in net bank card fees (mainly corporate card fees), letter of credit fees and swap fees.
+Added: Non-interest expense increased $9.5 million, or 2.4%, mainly due to higher salaries and benefits expense and allocated servicing and support costs for management and bank operations.
+Added: These increases were partly offset by lower insurance and marketing expense.
+Added: The provision for credit losses decreased $2.1 million from the same period last year, mainly due to lower commercial and industrial loan net charge-offs.
+Added: Average segment loans increased $240.8 million, or 2.2%, compared to 2023, mainly due to growth in business real estate, floor plan, tax free, and commercial and industrial loans.
+Added: Average deposits decreased $498.9 million, or 4.8%, mainly due to declines in business demand and certificate of deposit account balances, partly offset by increases in interest checking and money market account balances.
+Added: Pre-tax income for 2023 decreased $29.3 million, or 7.3%, compared to 2022, mainly due to a decrease in net interest income and increases in non-interest expense and the provision for credit losses, partly offset by an increase in non-interest income.
+Added: Net interest income decreased $21.4 million, or 3.9%, due to a decrease of $129.3 million in net allocated funding credits assigned to the Commercial segment's loan and deposit portfolios and increases in interest expense on customer repurchase agreements and deposits of $49.4 million and $116.4 million, respectively.
+Added: These decreases to income were partly offset by higher loan interest income of $273.0 million.
Non-interest income increased $21.4 million, or 9.5%, over 2022 due to growth in net bank card fees (mainly corporate card and merchant fees), deposit account fees (mainly corporate cash management fees), letter of credit fees and cash sweep commissions, partly offset by a decline in tax credit sales fees.
1 unchanged sentence
These increases were partly offset by lower allocated support costs for information technology.
−Removed: The provision for credit losses increased $2.3 million over the same period last year, mainly due to higher business loan net charge-offs.
+Added: The provision for credit losses increased $2.3 million over 2022, mainly due to higher business loan net charge-offs.
Average segment loans increased $1.0 billion, or 10.4%, compared to 2022, mainly due to increases in business, business real estate, and construction loans.
Average deposits decreased $1.6 billion, or 13.1%, mainly due to declines in business demand and money market deposit account balances, partly offset by increases in interest checking and certificate of deposit account balances.
−Removed: Pre-tax income for 2022 decreased $29.2 million, or 8.6%, compared to 2021, mainly due to increases in non-interest expense and the provision for credit losses, partly offset by an increase in non-interest income.
−Removed: Net interest income decreased $1.0 million, or .2%, due to a $21.4 million decrease in net allocated funding credits, coupled with higher interest expense on customer repurchase agreements and deposits of $22.6 million and 18.5 million, respectively.
−Removed: The decreases were partly offset by a $61.2 million increase in loan interest income.
−Removed: The provision for credit losses increased $6.0 million due to net charge-offs recorded on business loans in 2022 compared to net recoveries recorded in 2021.
−Removed: Non-interest income increased $13.8 million, or 6.6%, over 2021 due to higher net bank card fees (mainly corporate card), deposit account fees (mainly corporate cash management fees), and higher cash sweep commissions.
−Removed: These increases were partly offset by lower capital market fees.
−Removed: Non-interest expense increased $36.0 million, or 10.9%, during 2022, mainly due to higher salaries and benefits expense, data processing and software expense, travel and entertainment expense, and allocated service and support costs (mainly bank operations expense, branch employee expense, and commercial banking expense).
−Removed: Average segment loans decreased $216.9 million, or 2.1%, compared to 2021, mainly due to a decline in business loans, partly offset by increases in business real estate and construction loans.
−Removed: Average deposits decreased $49.4 million, or .4%, mainly due to declines in business demand and certificate of deposit account balances, offset by increases in interest checking and money market deposit account balances.
The Wealth segment provides traditional trust and estate planning, advisory and discretionary investment management services, brokerage services, and includes Private Banking accounts.
At December 31, 2024, the Trust group managed investments with a market value of $45.3 billion and administered an additional $29.5 billion in non-managed assets.
−Removed: provides investment management services to The Commerce Funds, a series of mutual funds with $2.6 billion in total assets at December 31, 2023.
+Added: It also provides investment management services to The Commerce Funds, a series of mutual funds with $2.6 billion in total assets at December 31, 2024.
+Added: In 2024, pre-tax income for the Wealth segment was $172.5 million, compared to $160.3 million in 2023, an increase of $12.2 million, or 7.6%.
+Added: Net interest income decreased $12.0 million, or 12.0%, mainly due to a $20.3 million increase in deposit interest expense and a $510 thousand decline in net allocated funding credits assigned to the Wealth segment's loan and deposit portfolios, partly offset by an $8.9 million increase in loan interest income.
+Added: Non-interest income increased $25.2 million, or 11.6%, over the prior year mainly due to higher private client and institutional trust fees, brokerage fees and cash sweep commissions.
+Added: Non-interest expense increased $1.3 million, or .8%, mainly due to higher salaries and benefits expense, partly offset by deconversion costs recorded in the prior year (previously mentioned).
+Added: The provision for credit losses decreased $176 thousand from the prior year due to lower fixed-rate home equity loan net charge-offs.
+Added: Average assets increased $72.3 million, or 3.8%, during 2024 mainly due to higher personal real estate loan balances, partly offset by lower commercial and industrial and fixed rate home equity loan balances.
+Added: Average deposits increased $1.6 million, or .1%, due to growth in certificate of deposit and money market deposit account balances, mostly offset by declines in interest checking and business demand deposit account balances.
In 2023, pre-tax income for the Wealth segment was $160.3 million, compared to $187.2 million in 2022, a decrease of $26.9 million, or 14.3%.
−Removed: Net interest income decreased $1.2 million, or 1.6%, mainly due to a $26.2 million increase in deposit interest expense and a $7.2 million decline in net allocated funding credits assigned to the Wealth segment's loan and deposit portfolios, partly offset by a $32.3 million increase in loan interest income.
−Removed: Non-interest income increased $4.9 million, or 2.3%, over the prior year mainly due to higher private client trust fees and cash sweep commissions, partly offset by lower brokerage fees (mainly annuity fees).
−Removed: Non-interest expense increased $12.8 million, or 8.8%, mainly due to higher salaries and benefits expense and the deconversion costs previously mentioned.
−Removed: The provision for credit losses increased $20 thousand over the prior year.
+Added: Net interest income decreased $18.9 million, or 15.9%, mainly due to a $25.0 million decrease in net allocated funding credits assigned to the Wealth segment's loan and deposit portfolios and a $26.2 million increase in deposit interest expense, partly offset by a $32.3 million increase in loan interest income.
+Added: Non-interest income decreased $2.9 million, or 1.3%, from 2022 mainly due to lower mutual fund retail trust fees and lower brokerage fees (mainly annuity fees), partly offset by higher private client trust fees and cash sweep commissions.
+Added: Non-interest expense increased $5.1 million, or 3.3%, mainly due to higher salaries and benefits expense and deconversion costs recorded in 2023, partly offset by lower allocated costs for trust service fees to affiliates.
+Added: The provision for credit losses increased $20 thousand over 2022.
Average assets increased $54.9 million, or 3.0%, during 2023 mainly due to higher personal real estate loan balances, partly offset by lower business and fixed rate home equity loan balances.
Average deposits decreased $427.4 million, or 15.2%, due to declines in interest checking and money market deposit account balances, partly offset by growth in certificate of deposit account balances.
−Removed: In 2022, pre-tax income for the Wealth segment was $142.9 million, compared to $148.7 million in 2021, a decrease of $5.8 million, or 3.9%.
−Removed: Net interest income increased $2.9 million, or 4.0%, mainly due to a $16.4 million increase in loan interest income, partly offset by a $12.5 million decrease in net allocated funding credits and a $1.0 million increase in deposit interest expense.
−Removed: Non-interest income decreased $229 thousand, or .1%, from the prior year due to higher cash sweep commissions and brokerage fees, partly offset by lower mortgage banking revenue and trust fees.
−Removed: Non-interest expense increased $8.6 million, or 6.3%, resulting from higher salaries and benefits expense, travel and entertainment expense, and marketing expense.
−Removed: The provision for credit losses decreased $44 thousand, mainly due to net recoveries on revolving home equity loans.
−Removed: Average assets increased $253.3 million, or 16.0%, during 2022 mainly due to higher personal real estate and consumer loan balances.
−Removed: Average deposits decreased $161.0 million, or 5.4%, due to a decline in interest checking and money market deposit account balances.
The segment activity, as shown above, includes both direct and allocated items.
1 unchanged sentence
In accordance with the Company's transfer pricing procedures, the difference between the total provision and total net charge-offs/recoveries is not allocated to a business segment and is included in this category.
−Removed: In 2023, the pre-tax net loss in this category was $6.6 million, compared to net income of $31.8 million in 2022.
+Added: In 2024, the pre-tax net loss in this category was $110.7 million, compared to net losses of $211.1 million in 2023.
Unallocated securities gains were $7.8 million in 2024, compared to securities gains of $15.0 million in 2023.
−Removed: Additionally, non-interest expense increased $24.8 million and net interest income decreased $19.7 million.
−Removed: These decreases were partly offset by a $7.0 million increase in non-interest income and a decrease in the provision for credit losses of $4.6 million.
+Added: Additionally, net interest income increased $100.4 million, the provision for credit losses decreased $10.5 million, and non-interest income increased $1.2 million.
+Added: These increases were partly offset by an increase in non-interest expense of $4.6 million.
+Added: The increase in net interest income was driven by decreases in interest expense on borrowings and deposits of $52.1 million and $17.7 million, respectively, and a $25.2 million decrease in net allocated funding credits.
The decrease in the unallocated provision for credit losses was 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 segments when incurred for management reporting purposes.
−Removed: For the year ended December 31, 2023, the Company's provision for credit losses on unfunded lending commitments was a benefit $7.9 million, compared to a provision of $8.9 million in 2022.
−Removed: The provision for credit losses on loans was $12.3 million in excess of net-charge offs in 2023, due to an increase in the allowance for credit losses on loans, while the provision was $92 thousand higher than net charge-offs in 2022.
+Added: For the year ended December 31, 2024, the Company's provision for credit losses on unfunded lending commitments was a benefit $6.3 million, compared to a benefit of $7.9 million in 2023.
+Added: The provision for credit losses on loans was $347 thousand in excess of net-charge offs in 2024, due to an increase in the allowance for credit losses on loans, while the provision was $12.3 million higher than net charge-offs in 2023.
Impact of Recently Issued Accounting Standards
−Removed: Reference Rate Reform The Financial Accounting Standards Board ("FASB") issued ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting", in March 2020, and has been followed by additional clarifying guidance related to derivatives that are modified as a result of reference rate reform.
−Removed: The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if they reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.
−Removed: Further, the guidance applies to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform.
−Removed: The expedients and exceptions provided by the new guidance do not apply to contract modifications made and hedging relationships entered into or evaluated for effectiveness after December 31, 2022, except for certain hedging relationships existing as of December 31, 2022.
−Removed: In December 2022, the FASB issued ASU 2022-06 which extended the sunset date under Topic 848 to December 31, 2024.
−Removed: The change is to align the temporary accounting relief guidance with the expected cessation date of LIBOR, which was postponed by administrators in 2021 to June 2023, a year after the current sunset date of ASU 2020-04.
−Removed: The Company's LIBOR Transition Steering Committee completed the Company's transition from LIBOR during the first half of 2023.
−Removed: Disclosure Improvements The FASB issued ASU 2023-06, "Disclosure Improvements:
−Removed: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative", in October 2023.
−Removed: The amendments in this Update modify the disclosure or presentation requirements of a variety of topics in the Codification.
−Removed: Certain of the amendments represent clarifications to or technical corrections of the current requirements.
−Removed: The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.
−Removed: The adoption is not expected to have a significant effect on the Company's consolidated financial statements.
Segment Reporting The FASB issued ASU 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures", in November 2023.
5 unchanged sentences
This Update requires annual disclosures for fiscal years beginning January 1, 2024 and interim disclosures for fiscal years beginning January 1, 2025.
−Removed: Early adoption is permitted.
−Removed: The Company is required to apply the amendments in this Update retrospectively to all prior periods presented in the financial statements.
−Removed: Other than the inclusion of additional disclosures, the adoption of this ASU is not expected to have a significant effect on the Company's consolidated financial statements.
+Added: The Company adopted this standard in 2024, and other than the inclusion of additional disclosures, the adoption did not have a significant impact on the Company's consolidated financial statements.
+Added: The standard will be effective for the Company's consolidated financial statements for interim periods beginning January 1, 2025.
Income Taxes The FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures", in December 2023.
5 unchanged sentences
Other than the inclusion of additional disclosures, the adoption is not expected to have a significant effect on the Company's consolidated financial statements.
+Added: Income Statement Reporting The FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):
+Added: Disaggregation of Income Statement Expenses" in November 2024.
+Added: The amendments in this Update require new disclosures providing further detail of a company's income statement expense items.
+Added: This Update is effective for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028.
+Added: Early adoption is permitted.
+Added: The amendments in this Update should be applied on a prospective basis.
+Added: Other than the inclusion of additional disclosures, the adoption is not expected to have a significant effect on the Company's consolidated financial statements.
Corporate Governance
2 unchanged sentences
This information is available on the Company’s investor relations website at investor.commercebank.com/overview/corporate-governance.
+Added: SUMMARY OF QUARTERLY STATEMENTS OF INCOME
+Added: Year ended December 31, 2024
+Added: For the Quarter Ended
+Added: (In thousands, except per share data) 12/31/2024 9/30/2024 6/30/2024 3/31/2024
+Added: Interest income
+Added: $ 369,405 $ 372,068 $ 369,363 $ 358,721
+Added: Interest expense
+Added: (102,758) (109,717) (107,114) (109,722)
+Added: Net interest income
+Added: 266,647 262,351 262,249 248,999
+Added: Non-interest income
+Added: 155,436 159,025 152,244 148,848
+Added: Investment securities gains (losses), net
+Added: 977 3,872 3,233 (259)
+Added: Salaries and employee benefits
+Added: (153,819) (153,122) (149,120) (151,801)
+Added: Other expense
+Added: (81,899) (84,478) (83,094) (93,896)
+Added: Provision for credit losses
+Added: (13,508) (9,140) (5,468) (4,787)
+Added: Income before income taxes
+Added: 173,834 178,508 180,044 147,104
+Added: (36,590) (38,245) (38,602) (31,652)
+Added: Non-controlling interest
+Added: (1,136) (2,256) (1,889) (2,789)
+Added: Net income attributable to Commerce Bancshares, Inc.
+Added: $ 136,108 $ 138,007 $ 139,553 $ 112,663
+Added: Net income per common share — basic*
+Added: $ 1.01 $ 1.02 $ 1.03 $ .82
+Added: Net income per common share — diluted*
+Added: $ 1.01 $ 1.01 $ 1.03 $ .82
+Added: Weighted average shares — basic*
+Added: 133,509 134,217 134,881 135,494
+Added: Weighted average shares — diluted*
+Added: 133,687 134,395 135,041 135,645
+Added: Year ended December 31, 2023
+Added: For the Quarter Ended
+Added: (In thousands, except per share data) 12/31/2023 9/30/2023 6/30/2023 3/31/2023
+Added: Interest income
+Added: $ 362,609 $ 361,162 $ 348,663 $ 308,857
+Added: Interest expense
+Added: (114,188) (112,615) (99,125) (57,234)
+Added: Net interest income
+Added: 248,421 248,547 249,538 251,623
+Added: Non-interest income
+Added: 144,879 142,949 147,605 137,612
+Added: Investment securities gains (losses), net
+Added: 7,601 4,298 3,392 (306)
+Added: Salaries and employee benefits
+Added: (147,456) (146,805) (145,429) (144,373)
+Added: Other expense
+Added: (103,798) (81,205) (82,182) (79,734)
+Added: Provision for credit losses
+Added: (5,879) (11,645) (6,471) (11,456)
+Added: Income before income taxes
+Added: 143,768 156,139 166,453 153,366
+Added: (32,307) (33,439) (35,990) (32,813)
+Added: Non-controlling interest
+Added: (2,238) (2,104) (2,674) (1,101)
+Added: Net income attributable to Commerce Bancshares, Inc.
+Added: $ 109,223 $ 120,596 $ 127,789 $ 119,452
+Added: Net income per common share — basic*
+Added: $ .80 $ .88 $ .93 $ .86
+Added: Net income per common share — diluted*
+Added: $ .79 $ .88 $ .93 $ .86
+Added: Weighted average shares — basic* 135,982 136,399 136,583 136,714
+Added: Weighted average shares — diluted* 136,089 136,509 136,718 136,996
+Added: Year ended December 31, 2022
+Added: For the Quarter Ended
+Added: (In thousands, except per share data) 12/31/2022 9/30/2022 6/30/2022 3/31/2022
+Added: Interest income
+Added: $ 286,377 $ 262,666 $ 238,154 $ 211,782
+Added: Interest expense
+Added: (31,736) (16,293) (5,769) (2,996)
+Added: Net interest income
+Added: 254,641 246,373 232,385 208,786
+Added: Non-interest income
+Added: 136,825 138,514 139,427 131,769
+Added: Investment securities gains (losses), net
+Added: 8,904 3,410 1,029 7,163
+Added: Salaries and employee benefits
+Added: (138,458) (137,393) (142,243) (135,953)
+Added: Other expense
+Added: (78,282) (75,491) (71,262) (69,695)
+Added: Provision for credit losses
+Added: (15,477) (15,290) (7,162) 9,858
+Added: Income before income taxes
+Added: 168,153 160,123 152,174 151,928
+Added: (34,499) (33,936) (32,021) (31,902)
+Added: Non-controlling interest
+Added: (2,026) (3,364) (4,359) (1,872)
+Added: Net income attributable to Commerce Bancshares, Inc.
+Added: $ 131,628 $ 122,823 $ 115,794 $ 118,154
+Added: Net income per common share — basic*
+Added: $ .95 $ .88 $ .83 $ .84
+Added: Net income per common share — diluted*
+Added: $ .95 $ .88 $ .83 $ .84
+Added: Weighted average shares — basic*
+Added: 137,053 137,636 138,515 139,291
+Added: Weighted average shares — diluted*
+Added: 137,360 137,941 138,823 139,628
+Added: * Restated for the 5% stock dividend distributed in 2024.
AVERAGE BALANCE SHEETS — AVERAGE RATES AND YIELDS
130 unchanged sentences
(188,758) (196,942) (160,212) (.03)
−Removed: 292,898 74,605 (113,068) 66.43
+Added: 198,722 292,898 74,605 N.M.
339,431 343,516 370,709 (2.48)
178 unchanged sentences
(A) Stated on a fully taxable-equivalent basis using a federal income tax rate of 21%.
−Removed: SUMMARY OF QUARTERLY STATEMENTS OF INCOME
−Removed: Year ended December 31, 2023
−Removed: For the Quarter Ended
−Removed: (In thousands, except per share data) 12/31/2023 9/30/2023 6/30/2023 3/31/2023
−Removed: Interest income
−Removed: $ 362,609 $ 361,162 $ 348,663 $ 308,857
−Removed: Interest expense
−Removed: (114,188) (112,615) (99,125) (57,234)
−Removed: Net interest income
−Removed: 248,421 248,547 249,538 251,623
−Removed: Non-interest income
−Removed: 144,879 142,949 147,605 137,612
−Removed: Investment securities gains (losses), net
−Removed: 7,601 4,298 3,392 (306)
−Removed: Salaries and employee benefits
−Removed: (147,456) (146,805) (145,429) (144,373)
−Removed: Other expense
−Removed: (103,798) (81,205) (82,182) (79,734)
−Removed: Provision for credit losses
−Removed: (5,879) (11,645) (6,471) (11,456)
−Removed: Income before income taxes
−Removed: 143,768 156,139 166,453 153,366
−Removed: (32,307) (33,439) (35,990) (32,813)
−Removed: Non-controlling interest
−Removed: (2,238) (2,104) (2,674) (1,101)
−Removed: Net income attributable to Commerce Bancshares, Inc.
−Removed: $ 109,223 $ 120,596 $ 127,789 $ 119,452
−Removed: Net income per common share — basic*
−Removed: $ .84 $ .92 $ .97 $ .91
−Removed: Net income per common share — diluted*
−Removed: $ .84 $ .92 $ .97 $ .91
−Removed: Weighted average shares — basic*
−Removed: 129,507 129,904 130,079 130,204
−Removed: Weighted average shares — diluted*
−Removed: 129,608 130,009 130,208 130,472
−Removed: Year ended December 31, 2022
−Removed: For the Quarter Ended
−Removed: (In thousands, except per share data) 12/31/2022 9/30/2022 6/30/2022 3/31/2022
−Removed: Interest income
−Removed: $ 286,377 $ 262,666 $ 238,154 $ 211,782
−Removed: Interest expense
−Removed: (31,736) (16,293) (5,769) (2,996)
−Removed: Net interest income
−Removed: 254,641 246,373 232,385 208,786
−Removed: Non-interest income
−Removed: 136,825 138,514 139,427 131,769
−Removed: Investment securities gains (losses), net
−Removed: 8,904 3,410 1,029 7,163
−Removed: Salaries and employee benefits
−Removed: (138,458) (137,393) (142,243) (135,953)
−Removed: Other expense
−Removed: (78,282) (75,491) (71,262) (69,695)
−Removed: Provision for credit losses
−Removed: (15,477) (15,290) (7,162) 9,858
−Removed: Income before income taxes
−Removed: 168,153 160,123 152,174 151,928
−Removed: (34,499) (33,936) (32,021) (31,902)
−Removed: Non-controlling interest
−Removed: (2,026) (3,364) (4,359) (1,872)
−Removed: Net income attributable to Commerce Bancshares, Inc.
−Removed: $ 131,628 $ 122,823 $ 115,794 $ 118,154
−Removed: Net income per common share — basic*
−Removed: $ 1.00 $ .93 $ .87 $ .88
−Removed: Net income per common share — diluted*
−Removed: $ 1.00 $ .92 $ .87 $ .88
−Removed: Weighted average shares — basic* 130,527 131,082 131,919 132,658
−Removed: Weighted average shares — diluted* 130,819 131,372 132,212 132,979
−Removed: Year ended December 31, 2021
−Removed: For the Quarter Ended
−Removed: (In thousands, except per share data) 12/31/2021 9/30/2021 6/30/2021 3/31/2021
−Removed: Interest income
−Removed: $ 210,479 $ 216,981 $ 211,133 $ 209,697
−Removed: Interest expense
−Removed: (2,822) (2,944) (3,151) (3,949)
−Removed: Net interest income
−Removed: 207,657 214,037 207,982 205,748
−Removed: Non-interest income
−Removed: 147,699 137,506 139,143 136,045
−Removed: Investment securities gains (losses), net
−Removed: (9,706) 13,108 16,804 9,853
−Removed: Salaries and employee benefits
−Removed: (132,640) (132,824) (130,751) (129,033)
−Removed: Other expense
−Removed: (70,942) (78,796) (67,375) (63,540)
−Removed: Provision for credit losses
−Removed: 7,054 7,385 45,655 6,232
−Removed: Income before income taxes
−Removed: 149,122 160,416 211,458 165,305
−Removed: (33,764) (34,662) (45,209) (32,076)
−Removed: Non-controlling interest
−Removed: (452) (3,193) (3,923) (2,257)
−Removed: Net income attributable to Commerce Bancshares, Inc.
−Removed: $ 114,906 $ 122,561 $ 162,326 $ 130,972
−Removed: Net income per common share — basic*
−Removed: $ .85 $ .91 $ 1.20 $ .96
−Removed: Net income per common share — diluted*
−Removed: $ .85 $ .91 $ 1.19 $ .96
−Removed: Weighted average shares — basic*
−Removed: 133,362 134,095 134,473 134,585
−Removed: Weighted average shares — diluted*
−Removed: 133,647 134,374 134,806 134,948
−Removed: * Restated for the 5% stock dividend distributed in 2023.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.