Investors with an interest in Banks - Midwest stocks have likely encountered both UMB Financial (UMBF) and Commerce Bancshares (CBSH) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight comp ...

Core Insights - The company is anticipating an exciting year in 2025 with a significant focus on M&A activities, marking the first such engagement in 13 years with FineMark [1] - 2025 is projected to be a record year in terms of earnings, EPS, and ROA, following a strong performance in 2024 with a 10% EPS growth and a similar 9% growth expected in 2025 [1] Financial Performance - The company has experienced strong financial results, attributed to a low-cost deposit base and robust fee income businesses [2] - The FineMark transaction was successfully completed, representing the culmination of a 5-year relationship and strategic timing for the company [2]

Summary of Commerce Bancshares 2026 Conference Call Company Overview - **Company**: Commerce Bancshares (NasdaqGS:CBSH) - **Industry**: Banking and Financial Services Key Points 2025 Performance - 2025 was a record year for Commerce Bancshares with record earnings and EPS growth of 9% [2][12] - The bank returned to M&A activity with the acquisition of FineMark, marking its first deal in 13 years [2][3] - The bank's low-cost deposit base and strong fee-income businesses contributed to its success [2] FineMark Acquisition - The acquisition of FineMark is viewed as a strategic play rather than a cost-cutting measure [4] - FineMark's assets under management increased from $7 billion to over $8 billion post-announcement, indicating strong customer retention and growth [4] - The integration aims to maintain FineMark's brand and client relationships while leveraging Commerce's broader product offerings [5][6] Market Position and Competitive Advantage - FineMark's locations in Southern Florida and Scottsdale enhance Commerce's competitive advantage in those markets [8] - The acquisition allows Commerce to offer more comprehensive services to FineMark's existing customers, including specialized wealth management services [9][10] Loan Growth and Borrower Sentiment - Loan growth in 2025 was approximately 3%, with moderate borrower sentiment compared to the previous year [13][14] - The bank anticipates a stable loan growth environment, with expectations of maintaining a moderate single-digit growth rate [14] Deposit Growth and Competition - Deposit growth is expected to trend between 2%-3%, influenced by high-interest-rate competition [21] - The bank has managed to lower deposit costs while maintaining a low-cost funding base [22] Net Interest Margin (NIM) and Asset Sensitivity - NIM is expected to face pressure in the short term due to recent rate decreases, but stabilization is anticipated later in the year [30] - The bank's asset sensitivity is viewed as a strength, allowing for better long-term performance compared to peers [43] Fee Income and Revenue Diversification - Fee income is expected to grow, driven by commercial card fees, healthcare services, and trust fees [34][35] - The integration of FineMark is anticipated to enhance fee income growth further [36] Capital Management and Buybacks - The bank maintains a strong capital position, allowing for flexibility in buybacks and investments [38] - A consistent buyback strategy is in place, with plans to return to a pace of $40 million-$45 million per quarter [37] Technology Investments - Investments are being made in enhancing digital offerings, data governance, and AI capabilities to improve customer experience and operational efficiency [48][49] - The bank is focusing on modernizing systems and improving data flow to leverage AI effectively [52] Closing Remarks - The bank's asset sensitivity is a feature that supports long-term performance, driven by a low-cost deposit base [54] - The current valuation is considered attractive, with a long-term focus on consistent execution and growth [55] Additional Insights - The bank's diverse revenue streams and geographic expansion into higher-growth markets are key strengths [45] - The management emphasizes the importance of maintaining a strong capital position to weather economic fluctuations [46]

Core Insights - U.S. equity markets reached new all-time highs in Q4 2025, with the S&P 500 Index increasing by 2.66% and the Bloomberg U.S. Aggregate Bond Index rising by 1.10% [1] - Value stocks outperformed growth stocks during this period, reflecting a resilient U.S. economy [1] - The theme of artificial intelligence was prominent, with over 300 S&P 500 companies mentioning "AI" in earnings calls, positively impacting mega-cap tech stocks [1] - Concerns were raised regarding AI revenue circularity, capital spending, and long-term investment returns [1] - The Composite returned 1.45% pure gross of fees (0.95% net of fees), underperforming the Russell 1000 Value Index's 3.8% gain and the S&P 500 Index's 2.66% gain [1] Company-Specific Insights - Commerce Bancshares, Inc. (NASDAQ:CBSH) was highlighted in the fourth-quarter 2025 investor letter, with the stock closing at $53.59 per share on February 3, 2026 [2] - The stock of Commerce Bancshares, Inc. delivered a -0.24% return in the past month and is down 17.69% over the past twelve months, with a market capitalization of $7.897 billion [2] - The investment strategy initially favored Commerce Bancshares, Inc. due to its conservatively run franchise, disciplined credit approach, diversified revenue mix, and experienced management team [3] - Catalysts for investment included loan growth in core Kansas markets, prudent expense management, strong credit underwriting, and effective capital deployment through dividends and share repurchases [3] - The decision to sell the position in Commerce Bancshares, Inc. was made after the company executed consistently against its objectives, with proceeds redeployed into Wells Fargo, viewed as a more attractive investment opportunity [3]

Core Insights - Commerce Bancshares Inc. (CBSH) reported fourth-quarter 2025 earnings of $1.01 per share, exceeding the Zacks Consensus Estimate of 99 cents and up from 96 cents in the prior-year quarter [1][10] - The company's net income for the quarter was $140.7 million, reflecting a year-over-year increase of 3.4% [2] Financial Performance - Total revenues for the fourth quarter reached $449.4 million, a 6.5% increase year over year, surpassing the Zacks Consensus Estimate of $438.1 million [4][10] - For the full year 2025, total revenues rose to $1.76 billion, also exceeding the consensus estimate of $1.75 billion [4] - Net interest income (NII) was $283.2 million, up 6.2% from the previous year, with a net yield on interest-earning assets of 3.60%, an increase of 11 basis points year over year [5] - Non-interest income increased to $166.2 million, a rise of 6.9%, primarily driven by higher trust fees and deposit account fees [5] Expense and Asset Quality - Non-interest expenses rose by 7.3% year over year to $253.0 million, attributed to higher salaries, employee benefits, and data processing costs [6] - The provision for credit losses was $16.0 million, up from $13.5 million in the prior-year quarter [9] - The efficiency ratio increased to 56.23% from 55.77% in the year-ago quarter, indicating a decline in profitability [7] Loan and Deposit Trends - As of December 31, 2025, net loans were $17.59 billion, slightly down from $17.61 billion, while total deposits increased to $25.64 billion from $25.46 billion [8] Capital Ratios and Share Repurchase - The Tier I leverage ratio improved to 12.65% from 12.26% year over year, and the tangible common equity to tangible assets ratio increased to 11.11% from 9.92% [12] - In the reported quarter, the company repurchased 2.2 million shares of treasury stock at an average price of $53.29 [13] Strategic Outlook - The company completed the acquisition of FineMark Holdings, which is expected to be accretive to earnings and lead to cost savings [14] - Future revenue growth is anticipated from strong loan demand and efforts to enhance fee income, although rising expenses and asset quality concerns present challenges [14]

Core Viewpoint - Commerce Bancshares (CBSH) has underperformed in the past year, with a loss of approximately 12% in its stock value, raising investor concerns regarding its credit quality [1] Company Performance - The company has been building reserves in response to credit quality concerns, which is a trend observed across other banks facing significant loss events [1]

Core Insights - Commerce Bancshares (CBSH) reported revenue of $449.36 million for Q4 2025, marking a year-over-year increase of 6.5% and exceeding the Zacks Consensus Estimate of $438.1 million by 2.57% [1] - The company's EPS for the same quarter was $1.01, unchanged from the previous year, and also surpassed the consensus EPS estimate of $0.99 by 1.72% [1] Financial Performance Metrics - Net Interest Margin was reported at 3.6%, matching the average estimate from five analysts [4] - Efficiency Ratio stood at 56.2%, in line with the five-analyst average estimate [4] - Annualized net loan charge-offs to total average loans were 0.2%, better than the four-analyst average estimate of 0.3% [4] - Average total interest-earning assets were $31.47 billion, exceeding the four-analyst average estimate of $31.02 billion [4] - Book value per share was $27.75, slightly below the four-analyst average estimate of $27.83 [4] - Non-accrual loans totaled $15.75 million, compared to the average estimate of $16.96 million from two analysts [4] - Total Non-Interest Income reached $166.21 million, surpassing the five-analyst average estimate of $161.4 million [4] - Fully-taxable equivalent net interest income was reported at $285.83 million, exceeding the five-analyst average estimate of $280.96 million [4] - Trust fees amounted to $62.13 million, higher than the average estimate of $58.71 million based on four analysts [4] - Bank card transaction fees were $46.76 million, slightly above the four-analyst average estimate of $46.62 million [4] - Deposit account charges and other fees totaled $27.95 million, exceeding the four-analyst average estimate of $26.87 million [4] - Consumer brokerage services generated $5.19 million, below the average estimate of $5.94 million from three analysts [4] Stock Performance - Shares of Commerce Bancshares have returned +3.9% over the past month, outperforming the Zacks S&P 500 composite's +0.7% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Performance - Earnings per share for Q4 2025 were $1.01, up from $0.96 in Q4 2024, with net income of $140.7 million compared to $136.1 million in the same quarter last year [1][2]. - For the full year 2025, earnings per share totaled $4.04, an increase of 9.5% from $3.69 in 2024, with net income amounting to $566.3 million, up from $526.3 million [2]. - Net income attributable to Commerce Bancshares, Inc. for Q4 2025 was $140,662,000, compared to $136,108,000 in Q4 2024, reflecting a year-over-year increase of 3.9% [15]. - For the quarter ended December 31, 2025, net income was $140.7 million, a slight decrease from $141.5 million in the previous quarter and an increase from $136.1 million year-over-year [27]. Income and Revenue - Net interest income for Q4 2025 was $283.2 million, a $3.7 million increase from the prior quarter, while non-interest income rose to $166.2 million, a 6.9% increase year-over-year [6]. - Total non-interest income for Q4 2025 reached $166,208,000, up from $155,436,000 in Q4 2024, indicating a growth of 6.9% [15]. - Net interest income for the 4th quarter amounted to $283.2 million, an increase of $3.7 million from the previous quarter [31]. Assets and Loans - Total assets as of December 31, 2025, were $32,915,089,000, an increase from $31,996,627,000 a year earlier, representing a growth of 2.9% [19]. - Total loans stood at $17,771,263,000 as of December 31, 2025, compared to $17,220,103,000 at the end of 2024, marking a year-over-year increase of 3.2% [19]. - Average loan balances increased by 1.0% to $17.7 billion, while total average deposits rose by $816.0 million, or 3.3%, over the prior quarter [9]. - Total loans increased to $17,660,839 thousand, up 0.95% from $17,494,351 thousand in the previous quarter [21]. Expenses and Efficiency - Non-interest expense for Q4 2025 totaled $253.0 million, reflecting a 7.3% increase compared to the same quarter last year [9]. - The efficiency ratio for Q4 2025 was 56.2%, indicating operational efficiency in managing expenses relative to revenue [9]. - The efficiency ratio improved to 56.23% in Q4 2025 from 55.77% in Q4 2024, indicating better cost management [15][16]. Credit Quality - Non-accrual loans remained low at 0.09% of total loans, down two basis points from the same period last year, indicating strong credit quality [4]. - The provision for credit losses was $15,993,000 in Q4 2025, up from $13,508,000 in Q4 2024, indicating a cautious approach to credit risk management [15]. - Net loan charge-offs in the 4th quarter of 2025 amounted to $9.9 million, a decrease from $10.3 million in the prior quarter and $10.7 million in the same period last year, with an annualized net loan charge-off ratio of 0.22% [46]. - Total non-accrual loans amounted to $15.8 million, a decrease of $503 thousand compared to the previous quarter, representing 0.09% of loans outstanding [49]. Dividends and Shareholder Returns - The Company distributed a 5% stock dividend and paid a cash dividend of $0.262 per common share, a 7% increase over the same period last year [51]. Acquisitions - The company completed the acquisition of FineMark Holdings on January 1, 2026, which added $2.7 billion in loans and $3.1 billion in deposits [4]. - The Company closed on its acquisition of FineMark Holdings, Inc., which had loans and deposits of $2.7 billion and $3.1 billion, respectively, as of December 31, 2025 [52]. Forward-Looking Statements - Forward-looking statements indicate that actual results may differ materially from expectations due to significant risks and uncertainties [53].

分组1 - Commerce Bancshares (CBSH) reported quarterly earnings of $1.01 per share, exceeding the Zacks Consensus Estimate of $0.99 per share, with an earnings surprise of +1.72% [1] - The company posted revenues of $449.36 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 2.57%, compared to year-ago revenues of $422.08 million [2] - Over the last four quarters, Commerce has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] 分组2 - The current consensus EPS estimate for the coming quarter is $0.88 on revenues of $475.09 million, and for the current fiscal year, it is $4.09 on revenues of $1.96 billion [7] - The Zacks Industry Rank for Banks - Midwest is currently in the bottom 31% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8] - The estimate revisions trend for Commerce was unfavorable ahead of the earnings release, resulting in a Zacks Rank 5 (Strong Sell) for the stock, suggesting expected underperformance in the near future [6]

COMMERCE BANCSHARES, INC. EARNINGS HIGHLIGHTS 4th Quarter 2025 ~·~ ltl) Commerce Bancshares, Inc . ...... ,, CAUTIONARY STATEMENT Forward-Looking Statements This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about the plans, expectations, goals, projections, and intentions of Commerce Bancshares, Inc. ("Commerce"). Forward-looking statements involve significant risks and uncertainties ...