A $12.0 million litigation expense was enough to become one of the defining details in Commerce Bancshares’ latest three-month report. Net income still rose from $152.5 million to $159.8 million versus the comparable period a year earlier, but diluted EPS edged up only from $1.09 to $1.10.

The gap is not mysterious. Diluted shares increased 3.8%, from 139.9 million to 145.3 million, and stock compensation climbed 61% to $6.6 million. Commerce made more money in the three months ended June 30, but more shares absorbed most of the increase on a per-share basis.

Management also had a larger expense bill to explain, including costs tied to the FineMark acquisition and litigation:

"Additionally, other non-interest expense increased $15.6 million, primarily due to $12.0 million in litigation expense and $5.4 million in intangible amortization expense related to the FineMark acquisition."

Commerce Bancshares, 10-Q, Aug. 5, 2026

That is a current-period cost line, not an abstract risk-factor warning. FineMark also added $2.7 billion of interest-bearing deposits, which increased deposit interest expense. The acquisition expanded the balance sheet and added expense at the same time.

The lending side supplied a cleaner growth figure, though not a clean margin story. Average loan balances grew $3.0 billion, or 17.3%, while average rates earned declined 28 basis points:

"The increase in loan interest income over the same quarter of last year was primarily due to growth of $3.0 billion, or 17.3%, in average loan balances, partly offset by lower average rates earned, which declined 28 basis points."

Commerce Bancshares, 10-Q, Aug. 5, 2026

Commerce is therefore adding loans faster than the headline EPS number suggests, but the rate earned on those loans is moving in the other direction. The same report says changes in Federal Reserve cash balances, resell agreements with embedded floors, the investment securities portfolio, and deposit mix affected interest income.

That combination changes the read on the business. This was not simply a no-growth period: loan balances expanded materially and net income increased 4.8%. But the translation from balance-sheet growth to shareholder-level earnings was limited by lower rates, higher expenses, and share-count growth.

The pattern also fits a recurring exposure in Commerce’s own reporting. Across five filings, credit and interest-rate conditions have produced more adverse than favorable evidence. The latest report adds a concrete example: more lending, alongside lower average rates earned.

At the latest close, Commerce shares were $59.96, up 0.5% for the day. The stock was up 12.6% over six months, while its 12-month change was nearly flat. Those figures provide market context, not an explanation for the filing’s arithmetic.

The cleanest next-quarter checkpoint is diluted shares, which stood at 145.3 million in the latest report. That number will show whether the per-share math is still absorbing much of the company’s net-income growth.

Commerce Bancshares reported 145.3 million diluted shares for the three months ended June 30, 2026, versus 139.9 million a year earlier.