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Jul 01, 2025 |
Commerce Bancshares, Inc. (NASDAQ: CBSH)$62.17 USD ( As of 06/30/25 ) |
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Data Overview
| 52 Week High-Low | $74.36 - $54.33 |
|---|---|
| 20 Day Average Volume | 658,814 |
| Beta | 0.59 |
| Market Cap | 8.30 B |
| Dividend / Div Yld | $1.10 / 1.77% |
| Industry | Banks - Midwest |
| Industry Rank | 94 / 246 (Top 38%) |
| Current Ratio | 0.76 |
| Debt/Capital | 0.50% |
| Net Margin | 25.95% |
| Price/Book (P/B) | 2.38 |
| Price/Cash Flow (P/CF) | 13.76 |
| Earnings Yield | 6.56% |
| Debt/Equity | 0.01 |
| Value Score |  |
|---|---|
| P/E (F1) | 15.24 |
| P/E (F1) Rel to Industry | 3.75 |
| PEG Ratio | 2.75 |
| P/S (F1) | 3.95 |
| P/S (TTM) | 3.95 |
| P/CFO | 13.76 |
| P/CFO Rel to Industry | 0.40 |
| EV/EBITDA Annual | 5.00 |
| Growth Score | |
|---|---|
| Proj. EPS Growth (F1/F0) | 5.38% |
| Hist. EPS Growth (Q0/Q-1) | 8.71% |
| Qtr CFO Growth | 1.00 |
| 2 Yr CFO Growth | 778.02 |
| Return on Equity (ROE) | 16.23% |
| (NI - CFO) / Total Assets | -9,772.26 |
| Asset Turnover | 0.07 |
| Momentum Score | |
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| 1 week Volume change | 1.80% |
| 1 week Price Cng Rel to Industry | 1.32% |
| (F1) EPS Est 1 week change | 0.04% |
| (F1) EPS Est 4 week change | -0.04% |
| (F1) EPS Est 12 week change | 3.73% |
| (Q1) EPS Est 1 week change | 0.00% |
Summary
Shares of Commerce Bancshares have outperformed the industry in the past six months. The performance was supported by the company’s impressive earnings surprise history. It surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters. The bank's efforts to expand its footprint in newer markets and an improving rate scenario are projected to boost revenues further. Also, strong loan and deposit growth should support its profitability. However, rising expenses are likely to curb bottom line growth. Also, significant exposure to real estate loans remains a major near-term concern, which might hurt the company’s financials.
Elements of the Zacks Rank
Agreement Estimate Revisions (60 days)
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67% Q1 (Current Qtr)Revisions: 6 Up: 4 Down: 2 |
100% Q2 (Next Qtr)Revisions: 3 Up: 3 Down: 0 |
80% F1 (Current Year)Revisions: 5 Up: 4 Down: 1 |
100% F2 (Next Year)Revisions: 4 Up: 4 Down: 0 |
Magnitude Consensus Estimate Trend (60 days)
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Upside Zacks Consensus Estimate vs. Most Accurate Estimate
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Surprise Reported Earnings History
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Average 4 Qtr Surprise |
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The data on the front page and all the charts in the report represent market data as of 06/30/25, while the report's text is as of 09/18/2017
Overview
Incorporated in 1966, Commerce Bancshares Inc. is one of the largest bank holding companies in Missouri, with its principal offices located in Kansas City and St. Louis. It has significant operations in the states of Missouri, Kansas, Illinois, Oklahoma and Colorado. Operating through a network of around 330 locations as of Jun 30, 2017, the company engages in the general banking business, providing a wide range of retail, corporate, investment, trust and asset management products as well as services to individuals and businesses.
Commerce Bancshares, along with its subsidiaries, offers diversified financial services organized under the following segments:
- The Consumer segment (34.7% of net revenues in 2016) includes the retail branch network, indirect and other consumer financing, consumer debit and credit bank cards and student lending.
- The Commercial segment (44.3%) provides an array of corporate lending, leasing and international services, as well as business and government deposits, cash management services and Merchant and Commercial bank card products. The segment includes the Capital Markets Group, which offers fixed-income securities and also provides investment safekeeping and bond accounting services.
- The Wealth segment (16.4%) provides traditional trust and estate tax planning services, as well as advisory and discretionary investment portfolio management services to both personal and institutional corporate customers. It also manages brokerage services, the Private Banking product portfolio and Commerce Bancshares’ family of proprietary mutual funds.
- The Other/Elimination segment (4.6%) includes activities not related to the above-mentioned segments, such as certain administrative functions, the investment securities portfolio and the effect of certain expense allocations to the segments.
Reasons To Buy:
Commerce Bancshares’ strong loans and deposit balances and easing margin pressure should support revenue growth in the quarters ahead. Strong capital deployment activities are commendable.
Commerce Bancshares has been witnessing a rise in organic growth. The company’s net revenues have increased at a CAGR of 4.5% over the last three years (2014–2016), with the same trend persisting in the first six months of 2017. Moreover, a consistent improvement in non-interest income along with impressive loan and deposit balances indicate chances of robust revenue generation, going forward.
Moreover, Commerce Bancshares is finally looking forward to gradual improvement in the rate environment. In 2016 as well as the first half of 2017, net yield on interest earning assets improved, after witnessing a declining trend over the past several years. Also, we remain optimistic given the latest rate hikes, which should have a favorable impact on margins in the quarters ahead, with a continued rise in loan demand.
Commerce Bancshares has impressive capital deployment activities. The company has been consistently paying a 5% stock dividend for more than a decade now (latest one was paid in Dec 2016). Apart from this, the company pays regular quarterly cash dividends and has a share repurchase program in place. As of Jun 30, 2017, roughly 3.1 million shares remained available for purchase under the authorization. Given its strong capital position and a debt-equity ratio lower than the industry, the company is expected to continue boosting shareholder value through efficient capital deployment activities.
Commerce Bancshares continues to demonstrate enhanced credit quality over the last few years. Non-performing assets and allowance for loan losses rate continued to reflect an improving momentum as observed over several years. Moreover, the first six months of 2017 also witnessed a decline in the same. Going forward, the company’s asset quality is expected to reflect continuous progress propelled by an improvement in economy.
Reasons To Sell:
Persistently rising expenses and exposure to real estate loans remain matters of concern for Commerce Bancshares.
Mounting non-interest expenses continue to be a concern for Commerce Bancshares. The company witnessed an increase in the same over the last five years (2012–2016) at a CAGR of 3.8%, with a similar trend continuing during the first six months of 2017 as well. The rise was mainly attributable to higher salaries and employee benefits costs. In fact, overall expenses are expected to remain high owing to the company’s strategy to invest in franchise.
Commerce Bancshares has a significant exposure to residential mortgage and real estate loans. As of Jun 30, 2017, the company’s exposure to these loan portfolios was nearly 44% of total loans. Though there has been an improvement in the housing sector, any further deterioration in the real estate prices will pose a problem for the company.
Commerce Bancshares’ shares have gained 18% in the past year, marginally underperforming the 18.6% rally of the industry. The increase in share price has made the valuation a bit expensive as can be seen from its price/book ratio and price-earnings (F1) ratio, which compare unfavorably with the respective industry averages. Also, the trend in current-year earnings estimate revisions is not satisfactory as it remained stable over the past 30 days. Therefore, we find that a stretched valuation and no estimates revision limit the upside potential for the stock.
Last Earnings Report
Quarter Ending 03/2025
| Report Date | Apr 16, 2025 |
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| Sales Surprise | 2.91% |
| EPS Surprise | 5.38% |
| Quarterly EPS | 0.98 |
| Annual EPS (TTM) | 4.13 |
Commerce Bancshares Q2 Earnings Beat on Improved Revenues
Commerce Bancshares’ second-quarter 2017 earnings of 75 cents per share easily surpassed the Zacks Consensus Estimate of 70 cents. The figure reflects a 13.6% rise from the year-ago quarter.
Better-than-expected results were mainly driven by higher net interest income and non-interest income. Also, the company witnessed a modest loan growth and its capital and profitability ratios improved. However, a rise in expenses and provision for loan losses were the undermining factors.
Net income available to the common shareholders in the reported quarter was $76.7 million, up 13.4% year over year.
Rise in Costs Offset by Higher Revenues
Total revenue for the quarter was $305.9 million, an increase of 6.1% year over year. Also, the figure beat the Zacks Consensus Estimate of $303.6 million.
Net interest income increased 6.4% from the prior-year quarter to $182.8 million. Further, net interest margin was 3.19%, up 8 basis points (bps) year over year. The rise reflected an increase in interest earned on loan portfolio and stable funding cost.
Non-interest income was $123.1 million, up 5.6% year over year. The rise was mainly driven by higher loan fees and sales, trust fees, and deposit account charges and other fees.
Non-interest expenses rose 4.2% year over year to $184.6 million. The increase was largely due to a rise in salaries and employee benefit costs, deposit insurance, and data processing and software costs.
Efficiency ratio for the quarter declined to 60.24% from 61.27% in the prior-year quarter. A fall in efficiency ratio indicates improved profitability.
Strong Balance Sheet
As of Jun 30, 2017, total loans were $13.6 billion, up marginally on a sequential basis. However, total deposits, as of the same date, were $20.8 billion, down 1.3% from the prior month.
However, total stockholder’s equity was $2.62 billion as of Jun 30, 2017, a decline of 1.4% from the previous month.
Credit Quality Worsens
Provision for loan losses increased 16.7% year over year to $10.8 million. Net loan charge-offs to average loans ratio (excluding loans held for sale) increased 8 bps year over year at 0.32%.
However, allowance for loan losses, as a percent of total loans, came in at 1.16%, down 2 bps year over year.
Improving Profitability & Capital Ratios
As of Jun 30, 2017, Tier I leverage ratio was 9.87%, up from 9.36% from the prior-year quarter. Moreover, tangible common equity to tangible assets ratio grew from 9.09% as of Jun 30, 2016 to 9.37%.
Further, the company’s return on average assets was 1.26%, up from 1.15% in the year-ago quarter. Return on average common equity was 12.47% as of Jun 30, 2017, increasing from 11.69% in the last-year quarter.
Recent News
Commerce Bancshares Ratings Reiterated by Moody's — Jul 7, 2017
Ratings of Commerce Bancshares and its subsidiaries have been affirmed by Moody’s Investors Service. The outlook for the company remains ‘Stable.’
Commerce Bancshares’ non-cumulative preferred stock rating remains ‘Baa1(hyb).’ Further, the long-term and short-term deposits ratings of its main banking subsidiary, Commerce Bank have been affirmed at ‘Aa2’ and ‘Prime-1’, respectively.
Why Commerce Bancshares’ Ratings were Affirmed?
The ratings were affirmed as Moody’s found improving asset quality at Commerce Bancshares. Per the rating agency, the company’s asset quality has been constantly improving over the last few years, mainly driven by “conservative underwriting and risk management practices.” Also, the company’s credit quality is supported by diversified loan portfolio and reasonable risk concentration.
Further, the ratings affirmation reflects Commerce Bancshares’ strong capital and liquidity positon. This is based on the company’s earnings strength and modest share repurchases. Additionally, its loan portfolios are fully funded by its solid core deposits as well as significant liquid assets.
While revenue growth at Commerce Bancshares remained challenged owing to the low interest rates (similar to other U.S. banks), its fee income has been growing. Specifically, the company’s income from card products and deposits and trust account is persistently rising. The rating agency added that with rising rates, the company’s top line should increase further.
Moreover, Commerce Bancshares’ profitability gets support from cost control and slight provisions for loan losses. Per Moody’s, the company’s net income/tangible assets ratio has remained between 1.1% and 1.2% over the last several years.
The stable outlook reflects the rating agency’s anticipation that the company will maintain its robust asset quality over the next two years.
Why Ratings Revision Could Occur?
The ratings can improve if Commerce Bancshares enhances its capital base and strengthens profitability. However, in case the company’s expanding loan portfolio increases its risk profile and/or its capital position weakens, then the ratings might be revised downward.
Dividend Update
On Jul 28, Commerce Bancshares declared a quarterly cash dividend of 22.5 cents per share. The dividend will be paid on Sep 25 to shareholders of record as of Sep 8.
Industry Analysis(1)Zacks Industry Rank: NA
Top Peers
| Associated Banc-Corp (ASB) |
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| First Financial Bancorp. (FFBC) |
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| First Interstate BancSystem, Inc. (FIBK) |
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| UMB Financial Corporation (UMBF) |
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| Old National Bancorp (ONB) |
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| First Merchants Corporation (FRME) |
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| Enterprise Financial Services Corporation (EFSC) |
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| First Busey Corporation (BUSE) |
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| Park National Corporation (PRK) |
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Industry Comparison Banks - Midwest | Position in Industry: 6 of 28 |
Industry Peers |
| CBSH |
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|---|---|
| Market Cap | 8.30 B |
| # of Analysts | 6 |
| Dividend Yield | 1.77% |
| Value Score | |
| Cash/Price | 0.50 |
| EV/EBITDA | 5.00 |
| PEG Ratio | 2.75 |
| Price/Book (P/B) | 2.38 |
| Price/Cash Flow (P/CF) | 13.76 |
| P/E (F1) | 15.24 |
| Price/Sales (P/S) | 3.95 |
| Earnings Yield | 6.56% |
| Debt/Equity | 0.01 |
| Cash Flow ($/share) | 4.52 |
| Growth Score | |
| Hist. EPS Growth (3-5 yrs) | 8.71% |
| Proj. EPS Growth (F1/F0) | 5.38% |
| Curr. Cash Flow Growth | 6.49% |
| Hist. Cash Flow Growth (3-5 yrs) | 3.41% |
| Current Ratio | 0.76 |
| Debt/Capital | 0.50% |
| Net Margin | 25.95% |
| Return on Equity | 16.23% |
| Sales/Assets | 0.07 |
| Proj. Sales Growth (F1/F0) | 3.77% |
| Momentum Score | |
| Daily Price Chg | 0.14% |
| 1 Week Price Chg | 1.32% |
| 4 Week Price Chg | -0.38% |
| 12 Week Price Chg | 11.32% |
| 52 Week Price Chg | 12.59% |
| 20 Day Average Volume | 658,814 |
| (F1) EPS Est Wkly Chg | 0.04% |
| (F1) EPS Est Mthly Chg | -0.04% |
| (F1) EPS Est Qtrly Chg | 3.73% |
| (Q1) EPS Est Mthly Chg | -0.16% |
| X Industry | S&P 500 |
|---|---|
| 753.48 M | 36.72 B |
| 3 | 20 |
| 2.85% | 1.57% |
| - | - |
| 0.38 | 0.04 |
| 6.65 | 14.51 |
| 1.26 | 2.39 |
| 1.08 | 3.57 |
| 9.73 | 14.29 |
| 10.07 | 19.07 |
| 1.95 | 3.02 |
| 9.92% | 5.20% |
| 0.22 | 0.58 |
| 3.26 | 8.99 |
| - | - |
| 4.38% | 9.76% |
| 8.54% | 6.31% |
| -5.79% | 6.63% |
| 3.88% | 7.10% |
| 0.90 | 1.20 |
| 17.92% | 38.68% |
| 17.38% | 12.33% |
| 10.36% | 17.02% |
| 0.06 | 0.52 |
| 3.62% | 4.01% |
| - | - |
| -0.02% | 0.52% |
| 5.08% | 2.98% |
| 3.27% | 4.53% |
| 14.00% | 22.57% |
| 17.45% | 13.33% |
| 92,425 | 2,687,116 |
| 0.00% | 0.00% |
| 0.00% | 0.00% |
| 2.04% | -0.24% |
| 0.00% | 0.00% |
| ASB | FFBC | FIBK |
|---|---|---|
| 4.04 B | 2.32 B | 3.02 B |
| 4 | 2 | 3 |
| 3.77% | 3.96% | 6.52% |
 | | |
| 0.30 | 0.35 | 0.29 |
| 12.76 | 7.15 | 6.71 |
| 1.07 | NA | NA |
| 0.90 | 0.92 | 0.90 |
| 7.38 | 8.18 | 10.61 |
| 9.78 | 9.24 | 12.29 |
| 1.69 | 1.89 | 2.07 |
| 10.21% | 10.84% | 8.15% |
| 0.58 | 0.43 | 0.37 |
| 3.30 | 2.97 | 2.72 |
|  |  |
| 11.45% | 10.64% | -3.96% |
| 4.76% | 0.19% | 7.08% |
| 7.98% | -5.81% | -12.05% |
| 2.34% | 2.41% | 3.10% |
| 0.87 | 0.91 | 0.77 |
| 35.85% | 30.17% | 27.16% |
| 6.02% | 18.65% | 14.93% |
| 8.47% | 10.44% | 6.57% |
| 0.06 | 0.07 | 0.05 |
| 10.10% | 4.06% | 2.83% |
| | |
| -0.20% | -0.37% | 1.19% |
| 2.65% | 2.19% | 4.99% |
| 6.00% | 2.54% | 7.74% |
| 26.24% | 9.77% | 17.63% |
| 17.09% | 9.53% | 5.07% |
| 1,131,150 | 370,036 | 1,057,216 |
| 0.00% | 0.00% | -0.32% |
| 0.00% | 0.00% | -0.32% |
| 1.69% | -0.44% | -7.04% |
| 0.00% | 0.00% | -1.15% |
Zacks Stock Rating System
We offer two rating systems that take into account investors' holding horizons; Zacks Rank and Zacks Recommendation. Each provides valuable insights into the future profitability of the stock and can be used separately or in combination with each other depending on your investment style.
Zacks Recommendation
This rating system that has an excellent track record of predicting performance over the next 6 to 12 months. The foundation for the quantitatively determined Zacks Recommendation is trends in the company's estimate revisions and earnings outlook.
The Zacks Recommendation is broken down into 3 Levels; Outperform, Neutral and Underperform. Unlike most Wall Street firms, we have an excellent balance between the number of Outperform and Neutral recommendations.
Our team of 70 analysts are fully versed in the benefits of earnings estimate revisions and how that is harnessed through the Zacks quantitative rating system. But we have given our analysts the ability to override the Zacks Recommendation for the 1200 stocks that they follow. The reason for the analyst over-rides is that there are often factors such as valuation, industry conditions and management effectiveness that a trained investment professional can spot better than a quantitative model.
Zacks Rank
The Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon. The underlying driver for the quantitatively-determined Zacks Rank is the same as the Zacks Recommendation, and reflects trends in earnings estimate revisions.
| Value Score |
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| Growth Score |
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| Momentum Score |
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| VGM Score |
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Zacks Style Score Education
The Zacks Style Score is as a complementary indicator to the Zacks Rank, giving investors a way to focus on the best Zacks Rank stocks that best fit their own stock picking preferences.
Academic research has proven that stocks with the best Growth, Value, and Momentum characteristics outperform the market. The Zacks Style Scores rate stocks on each of these individual styles and assigns a rating of A, B, C, D and F. An A, is better than a B; a B is better than a C; and so on.
As an investor, you want to buy stocks with the highest probability of success. That means buying stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Style Score of an A or a B.
Disclosures
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ZIR uses the following rating system for the securities it covers. Outperform- ZIR expects that the subject company will outperform the broader U.S. equities markets over the next six to twelve months. Neutral- ZIR expects that the company will perform in line with the broader U.S. equities markets over the next six to twelve months. Underperform- ZIR expects the company will underperform the broader U.S. equities markets over the next six to twelve months.
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