Mar. 25--Some of Commerce Bank's best customers sit on its board of directors.

The Kansas City-based lender is one of the busiest in the nation at doing business with its directors and other insiders, according to a recent ranking.

Commerce landed No. 8 among the nation's ten largest lenders to insiders, according to an analysis by the Charlotte Observer, which used data from the Federal Deposit Insurance Corp. The data showed Commerce had $467.9 million in "insider loans" at the end of December.

Commerce was noticeable partly because it is significantly smaller than the nine other names on the list.

With $17.4 billion in assets, Commerce is about a fourth as large as the next smallest bank ranked.

"I don't know that it's all that unusual," said Jeff Aberdeen, controller of Commerce Bancshares Inc., which owns Commerce Bank. "We recruit the best directors. ... Normally, they're going to be with top-quality companies that we want to do business with. And we're not ashamed of that."

Aberdeen said he would compare the insider loan amounts to the size of banks' boards and executive teams, not the assets of the banks.

He specifically likened Commerce to M&I Bank with $644.4 million in insider loans and BB&T Bank with $493.8 million in insider loans, according to the ranking.

"Think about it this way," Aberdeen said. "We all have about 10 to 13 directors, we all have about 10-13 executives and officers."

A check of FDIC data showed UMB Bank, owned by UMB Financial Corp., had $330.7 million in "insider loans" at the end of December, the second-highest total among all banks based in Missouri or Kansas.

For UMB, the total was about 3.6 percent of its total assets, higher than the 2.7 percent at Commerce.

UMB Bank Chairman and CEO Peter deSilva said the loans to directors created no "inherent conflict at all." The directors' direct experience with the bank's services helps them do their job as directors, he said.

Both banking companies recently won praise from Bank Director magazine as well-run, profitable institutions with strong capital backing and quality loans.

Both bankers said their institutions' "insider loan" totals from the FDIC included lines of credit, letters of credit and other business that did not involve actual extensions of credit.

Insiders at Commerce had actual loans totaling $109.4 million at the end of December, its annual report showed. UMB's total was not available.