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CBSH Q4 Earnings Beat as Revenues Rise, Stock Dips on High Provisions
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Key Takeaways
CBSH posted Q4 EPS of $1.01, beating estimates and rising from 96 cents in the prior-year quarter.
Revenue rose 6.5% to $449.4M on higher NII and non-interest income, topping the $438.1M estimate.
Shares dipped 1.2% as credit loss provisions rose to $16M and expenses climbed 7.3% year over year.
Commerce Bancshares Inc.’s (CBSH - Free Report) fourth-quarter 2025 earnings of $1.01 per share surpassed the Zacks Consensus Estimate of 99 cents. The bottom line compared favorably with 96 cents earned in the prior-year quarter.
Quarterly results benefited from higher net interest income (NII) and a rise in non-interest income. Further, the sequential rise in loans and deposits acted as a tailwind. However, higher expenses and an elevated provision for credit losses were the undermining factors. Given these concerns, shares of CBSH fell 1.2% on Thursday.
Net income attributable to Commerce Bancshares was $140.7 million, up 3.4% year over year. Our estimate for the metric was $127.5 million.
For 2025, earnings per share of $4.04 lagged the consensus estimate but grew 9.5% year over year. Net income attributable to Commerce Bancshares was $566.3 million, up 7.6%. Our estimate for the metric was $553.1 million.
CBSH’s Revenues Improve, Expenses Rise
Total revenues were $449.4 million, up 6.5% year over year. The top line outpaced the Zacks Consensus Estimate of $438.1 million.
For 2025, total revenues rose 6.5% to $1.76 billion. The top line beat the consensus estimate of $1.75 billion.
NII was $283.2 million, rising 6.2% from the year-ago quarter. Net yield on interest-earning assets was 3.60%, increasing 11 basis points (bps) year over year. Our estimates for NII and net yield on interest-earning assets were $273.6 million and 3.66%, respectively.
Non-interest income was $166.2 million, up 6.9%. The increase was mainly driven by higher trust fees and deposit account fees, partly offset by lower bank card fees. Our estimate for non-interest income was $160.1 million.
Non-interest expenses increased 7.3% year over year to $253.0 million. The rise was mainly due to higher salaries and employee benefits, data processing and software, and professional and other services, partly offset by lower deposit insurance expenses. We had projected expenses of $251.5 million.
Investment securities gains were $2.9 million compared with $1.0 million in the prior-year quarter.
The efficiency ratio increased to 56.23% from 55.77% in the year-ago quarter. A rise in the efficiency ratio indicates a deterioration in profitability.
CBSH’s Loan Balances Edge Down, Deposits Rise
As of Dec. 31, 2025, net loans were $17.59 billion, down slightly from $17.61 billion as of Sept. 30, 2025. Total deposits were $25.64 billion, up marginally from $25.46 billion. Our estimates for net loans and total deposits were $17.68 billion and $25.97 billion, respectively.
Commerce Bancshares’ Asset Quality: A Mixed Bag
Provision for credit losses was $16.0 million compared with $13.5 million in the prior-year quarter. Our estimate for the metric was $22.9 million.
The allowance for credit losses on loans to total loans was 1.01% at Dec. 31, 2025, increasing 6 bps year over year.
The ratio of annualized net loan charge-offs to average loans was 0.22%, down from 0.25% in the prior-year quarter. Non-accrual loans to total loans were 0.09% at quarter-end, down from 0.11% in the year-ago quarter.
CBSH’s Capital Ratios Improve, Profitability Ratios Decline
As of Dec. 31, 2025, the Tier I leverage ratio was 12.65%, up from 12.26% in the year-ago quarter. Tangible common equity to tangible assets ratio increased to 11.11% from 9.92% in the prior-year quarter.
For the reported quarter, return on total average assets was 1.73%, in line with the year-ago quarter. Return on average equity was 14.70% compared with 15.97% in the prior-year quarter.
CBSH’s Share Repurchase Update
In the reported quarter, the company purchased 2.2 million shares of treasury stock at an average price of $53.29.
Our Take on Commerce Bancshares
On Jan. 1, the company closed the deal to acquire FineMark Holdings, which will be accretive to its earnings and lead to cost savings. Additionally, CBSH’s revenues are expected to be driven by decent loan demand, balance sheet repositioning strategy and efforts to bolster fee income. However, rising expenses and deteriorating asset quality remain near-term headwinds.
Commerce Bancshares, Inc. Price, Consensus and EPS Surprise
BankUnited, Inc.’s (BKU - Free Report) fourth-quarter 2025 adjusted earnings of 94 cents per share surpassed the Zacks Consensus Estimate of 85 cents. Further, the bottom line was up 3.3% from the prior-year quarter.
Results were aided primarily by a rise in non-interest income and NII. Higher loan balance and improved deposits were the other positives. However, higher expenses and provisions were the undermining factors for BKU.
F.N.B. Corporation (FNB - Free Report) reported fourth-quarter 2025 operating earnings of 50 cents per share, which surpassed the Zacks Consensus Estimate of 41 cents. Also, the bottom line jumped 31.6% year over year.
FNB’s quarterly results benefited from higher NII and non-interest income. Higher loans and deposits and a decline in provisions were additional positives. However, higher non-interest expenses were an undermining factor.
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CBSH Q4 Earnings Beat as Revenues Rise, Stock Dips on High Provisions
Key Takeaways
Commerce Bancshares Inc.’s (CBSH - Free Report) fourth-quarter 2025 earnings of $1.01 per share surpassed the Zacks Consensus Estimate of 99 cents. The bottom line compared favorably with 96 cents earned in the prior-year quarter.
Quarterly results benefited from higher net interest income (NII) and a rise in non-interest income. Further, the sequential rise in loans and deposits acted as a tailwind. However, higher expenses and an elevated provision for credit losses were the undermining factors. Given these concerns, shares of CBSH fell 1.2% on Thursday.
Net income attributable to Commerce Bancshares was $140.7 million, up 3.4% year over year. Our estimate for the metric was $127.5 million.
For 2025, earnings per share of $4.04 lagged the consensus estimate but grew 9.5% year over year. Net income attributable to Commerce Bancshares was $566.3 million, up 7.6%. Our estimate for the metric was $553.1 million.
CBSH’s Revenues Improve, Expenses Rise
Total revenues were $449.4 million, up 6.5% year over year. The top line outpaced the Zacks Consensus Estimate of $438.1 million.
For 2025, total revenues rose 6.5% to $1.76 billion. The top line beat the consensus estimate of $1.75 billion.
NII was $283.2 million, rising 6.2% from the year-ago quarter. Net yield on interest-earning assets was 3.60%, increasing 11 basis points (bps) year over year. Our estimates for NII and net yield on interest-earning assets were $273.6 million and 3.66%, respectively.
Non-interest income was $166.2 million, up 6.9%. The increase was mainly driven by higher trust fees and deposit account fees, partly offset by lower bank card fees. Our estimate for non-interest income was $160.1 million.
Non-interest expenses increased 7.3% year over year to $253.0 million. The rise was mainly due to higher salaries and employee benefits, data processing and software, and professional and other services, partly offset by lower deposit insurance expenses. We had projected expenses of $251.5 million.
Investment securities gains were $2.9 million compared with $1.0 million in the prior-year quarter.
The efficiency ratio increased to 56.23% from 55.77% in the year-ago quarter. A rise in the efficiency ratio indicates a deterioration in profitability.
CBSH’s Loan Balances Edge Down, Deposits Rise
As of Dec. 31, 2025, net loans were $17.59 billion, down slightly from $17.61 billion as of Sept. 30, 2025. Total deposits were $25.64 billion, up marginally from $25.46 billion. Our estimates for net loans and total deposits were $17.68 billion and $25.97 billion, respectively.
Commerce Bancshares’ Asset Quality: A Mixed Bag
Provision for credit losses was $16.0 million compared with $13.5 million in the prior-year quarter. Our estimate for the metric was $22.9 million.
The allowance for credit losses on loans to total loans was 1.01% at Dec. 31, 2025, increasing 6 bps year over year.
The ratio of annualized net loan charge-offs to average loans was 0.22%, down from 0.25% in the prior-year quarter. Non-accrual loans to total loans were 0.09% at quarter-end, down from 0.11% in the year-ago quarter.
CBSH’s Capital Ratios Improve, Profitability Ratios Decline
As of Dec. 31, 2025, the Tier I leverage ratio was 12.65%, up from 12.26% in the year-ago quarter. Tangible common equity to tangible assets ratio increased to 11.11% from 9.92% in the prior-year quarter.
For the reported quarter, return on total average assets was 1.73%, in line with the year-ago quarter. Return on average equity was 14.70% compared with 15.97% in the prior-year quarter.
CBSH’s Share Repurchase Update
In the reported quarter, the company purchased 2.2 million shares of treasury stock at an average price of $53.29.
Our Take on Commerce Bancshares
On Jan. 1, the company closed the deal to acquire FineMark Holdings, which will be accretive to its earnings and lead to cost savings. Additionally, CBSH’s revenues are expected to be driven by decent loan demand, balance sheet repositioning strategy and efforts to bolster fee income. However, rising expenses and deteriorating asset quality remain near-term headwinds.
Commerce Bancshares, Inc. Price, Consensus and EPS Surprise
Commerce Bancshares, Inc. price-consensus-eps-surprise-chart | Commerce Bancshares, Inc. Quote
Currently, Commerce Bancshares carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
BankUnited, Inc.’s (BKU - Free Report) fourth-quarter 2025 adjusted earnings of 94 cents per share surpassed the Zacks Consensus Estimate of 85 cents. Further, the bottom line was up 3.3% from the prior-year quarter.
Results were aided primarily by a rise in non-interest income and NII. Higher loan balance and improved deposits were the other positives. However, higher expenses and provisions were the undermining factors for BKU.
F.N.B. Corporation (FNB - Free Report) reported fourth-quarter 2025 operating earnings of 50 cents per share, which surpassed the Zacks Consensus Estimate of 41 cents. Also, the bottom line jumped 31.6% year over year.
FNB’s quarterly results benefited from higher NII and non-interest income. Higher loans and deposits and a decline in provisions were additional positives. However, higher non-interest expenses were an undermining factor.