Financial Performance - For the quarter ended March 31, 2025, net income attributable to Commerce Bancshares, Inc. was $131.6 million, an increase of $18.9 million, or 16.8%, compared to the same quarter in 2024[160]. - Net interest income for the first quarter of 2025 was $269.1 million, an increase of $20.1 million, or 8.1%, compared to the first quarter of 2024[160]. - Non-interest income rose by $10.1 million, or 6.8%, compared to the first quarter of 2024, primarily driven by increases in trust fees, deposit account fees, and capital market fees[161]. - The efficiency ratio improved to 55.61% in the first quarter of 2025, down from 61.67% in the same quarter of 2024[155]. - Diluted earnings per common share increased to $0.98, a rise of 19.5% compared to $0.82 in the first quarter of 2024[160]. - The annualized return on average assets was 1.69%, while the annualized return on average equity was 15.82% for the quarter ended March 31, 2025[160]. - Total non-interest income rose by $10.1 million, or 6.8%, to $158.9 million in Q1 2025, mainly due to higher trust fees and deposit account charges[172]. - The Wealth segment's pre-tax profitability increased by $2.9 million, or 6.8%, in Q1 2025 compared to the same period last year[236]. - The Commercial segment's income before income taxes rose by $8.8 million, or 9.8%, in Q1 2025 compared to Q1 2024[234]. Credit Losses and Loan Performance - The provision for credit losses increased by $9.7 million, or 202.6%, compared to the same quarter in the prior year, due to an increase in the estimate of allowance for credit losses on loans[160]. - The allowance for credit losses on loans increased to $167.0 million at March 31, 2025, representing 0.96% of total loans, up from 0.95% at December 31, 2024[183]. - The provision for credit losses on loans was $15.1 million for the first quarter of 2025, an increase of $8.1 million compared to $6.9 million in the same period last year[182]. - Net loan charge-offs totaled $10.8 million in Q1 2025, up from $10.7 million in the previous quarter and $8.9 million in the same quarter last year[180]. - Non-accrual loans increased to $22.6 million at March 31, 2025, up $4.3 million from December 31, 2024, primarily due to increases in business real estate non-accrual loans[188]. - Total non-performing assets were $23.2 million at March 31, 2025, representing 0.13% of total loans, compared to 0.11% at December 31, 2024[188]. - The annualized net charge-offs on average consumer credit card loans were 5.04% in Q1 2025, compared to 4.59% in the previous quarter[181]. - Potential problem loans decreased to $286.9 million at March 31, 2025, a decline of 13.2% from $330.3 million at December 31, 2024[189]. - The company considers the allowance for credit losses and the liability for unfunded commitments adequate to cover expected losses in the loan portfolio as of March 31, 2025[185]. Equity and Capital - Total equity as of March 31, 2025, was $3.5 billion, up from $2.96 billion in the same period of 2024[159]. - The tangible common equity to tangible assets ratio improved to 10.33% as of March 31, 2025, compared to 9.24% a year earlier[159]. - The Company met all capital adequacy requirements with a Tier I common risk-based capital ratio of 16.86% as of March 31, 2025[223]. Deposits and Borrowings - Total average deposits decreased by $83.7 million this quarter, primarily due to declines in demand deposits and certificates of deposit by $165.6 million and $158.2 million, respectively[210]. - Core customer deposits totaled $23.5 billion, representing 90.9% of total deposits, with an increase of $588.3 million compared to December 31, 2024[214]. - The Company has a borrowing capacity of $6.1 billion through advances from the FHLB and the Federal Reserve[214]. - Certificates of deposit of $100,000 or greater totaled $1.4 billion, comprising 5.3% of total deposits[216]. Interest Income and Expense - Total interest income (FTE) decreased by $10.3 million, or 3.9%, to $255.9 million in Q1 2025 compared to the same quarter last year, primarily due to a 25 basis point decrease in the average rate earned[166]. - Interest income on investment securities increased by $10.3 million to $77.0 million in Q1 2025, driven by a $1.7 billion increase in average balances and a 201 basis point increase in the average rate earned[167]. - The average fully taxable-equivalent yield on total interest-earning assets was 4.81% in Q1 2025, up from 4.78% in Q1 2024[169]. - Interest expense decreased by $14.5 million compared to Q1 2024, with a notable decline in interest expense on interest-bearing deposits[170]. - The overall average rate incurred on all interest-bearing liabilities was 1.89% in Q1 2025, down from 2.21% in Q1 2024[171]. - The average rate paid on total interest bearing deposits decreased to 1.72% in Q1 2025 from 1.97% in Q1 2024, indicating a reduction in funding costs[241]. Market and Stock Performance - The market price of common stock increased to $62.23, compared to $50.67 in the same quarter of 2024[155]. - The Company purchased 854,806 shares at an average price of $64.56 during the three months ended March 31, 2025, with 2,076,842 shares remaining available for purchase[225]. Cash Flow and Investments - Cash flows from operating activities provided $138.6 million, while investing activities used $373.4 million, resulting in a net decrease in cash of $102.1 million[221]. - Total investment securities pledged for securing borrowings amounted to $6.3 billion as of March 31, 2025[213]. - The fair value of the available for sale debt portfolio was $9.3 billion at March 31, 2025, with an unrealized net loss of $832.9 million[212]. - The unrealized loss on available for sale debt securities decreased by $157.7 million to $832.9 million at the end of Q1 2025[209]. - The unrealized loss on debt securities improved to $(935,054) thousand in Q1 2025 from $(1,274,125) thousand in Q1 2024, indicating a reduction in market risk exposure[241]. Loan Portfolio Composition - As of March 31, 2025, the company's total loans outstanding amounted to $32.4 billion, with construction and land loans representing 8.2% of this total[192][207]. - The commercial construction loan portfolio increased by $18.6 million during the first quarter of 2025, totaling $1.2 billion, which is 85.7% of the construction and land loans[193]. - Business real estate loans totaled $3.6 billion, accounting for 20.9% of the total loan portfolio, with owner-occupied properties making up 34.5% of these loans[194]. - The company's revolving home equity loans stood at $356.7 million, with 93.3% requiring interest-only monthly payments[197]. - The consumer loan portfolio included $774.3 million in auto loans, which represented 36.6% of the consumer loan portfolio, with new auto loans originated totaling $98.0 million in Q1 2025[199]. - The energy lending portfolio decreased to $322.4 million, or 1.9% of total loans, down by $15.6 million from the previous quarter[203]. - Shared national credits (SNCs) remained stable at $1.6 billion, with additional unfunded commitments of $2.3 billion as of March 31, 2025[205].

Core Viewpoint - Investors are evaluating Huntington Bancshares (HBAN) and Commerce Bancshares (CBSH) for potential undervalued stock opportunities, with HBAN currently appearing as the superior option based on various valuation metrics [1][7]. Valuation Metrics - HBAN has a forward P/E ratio of 10.24, significantly lower than CBSH's forward P/E of 15.15, indicating that HBAN may be undervalued [5]. - The PEG ratio for HBAN is 1.12, while CBSH's PEG ratio is considerably higher at 4.08, suggesting that HBAN offers better value relative to its expected earnings growth [5]. - HBAN's P/B ratio stands at 1.15, compared to CBSH's P/B of 2.35, further supporting the notion that HBAN is more attractively priced [6]. Earnings Outlook - HBAN is experiencing an improving earnings outlook, which enhances its attractiveness in the Zacks Rank model, indicating stronger potential for future performance compared to CBSH [3][7]. Value Grades - Based on the analysis of key fundamental metrics, HBAN has received a Value grade of B, while CBSH has a Value grade of D, highlighting HBAN's stronger position as a value investment [6].

Core Insights - Commerce Bancshares is experiencing growth in its wealth management business, with trust fees increasing by 11% year over year, driven by higher private client fees [1][3] - The company's non-interest income grew by 7% year over year, contributing to revenue diversification [2] - Non-interest income reached $159 million, accounting for 37.1% of total revenue, with trust fees specifically contributing $57 million [3] Wealth Management Growth - The wealth management business's trust fees increased by 10.7% compared to the same period last year, reflecting the company's strategic focus on this area [3] - Commerce Bancshares aims to expand its wealth management services by utilizing a new private banking loan and deposit system and entering new markets where wealth is concentrated [3] Financial Performance - The net interest income for Commerce Bancshares grew by 8% year over year, reaching a record high of $269 million in the first quarter [4] - The bank's credit profile remains strong, with robust capital and liquidity levels, positioning it well to serve customers amid economic uncertainties [5] Economic Outlook - The company acknowledges increasing uncertainty in the economic outlook due to tariffs, trade restrictions, and capital market adjustments, but believes it is well-positioned to navigate potential disruptions [6]

Core Insights - Commerce Bancshares (CBSH) reported revenue of $428.05 million for Q1 2025, a year-over-year increase of 7.6% and a surprise of +2.91% over the Zacks Consensus Estimate of $415.93 million [1] - The EPS for the same period was $0.98, compared to $0.86 a year ago, with an EPS surprise of +5.38% over the consensus estimate of $0.93 [1] Financial Performance Metrics - Efficiency Ratio was reported at 55.6%, better than the five-analyst average estimate of 58.3% [4] - Net Interest Margin was 3.6%, slightly above the five-analyst average estimate of 3.5% [4] - Book value per share was $26.19, exceeding the average estimate of $25.34 from four analysts [4] - Average total interest earning assets were $30.90 billion, higher than the estimated $30.24 billion by four analysts [4] - Annualized net loan charge-offs to total average loans were 0.3%, matching the four-analyst average estimate [4] - Tier I Leverage Ratio was 12.3%, slightly below the three-analyst average estimate of 12.4% [4] - Non-accrual loans amounted to $22.60 million, exceeding the two-analyst average estimate of $19.15 million [4] - Total Non-Interest Income was $158.95 million, surpassing the estimated $154.31 million by five analysts [4] - Fully-taxable equivalent net interest income was $271.42 million, above the estimate of $262.38 million by five analysts [4] - Trust fees were reported at $56.59 million, compared to the average estimate of $56.05 million from four analysts [4] - Bank card transaction fees were $45.59 million, slightly below the average estimate of $46.74 million from four analysts [4] - Deposit account charges and other fees were $26.62 million, exceeding the average estimate of $24.87 million from four analysts [4] Stock Performance - Shares of Commerce have returned -5% over the past month, compared to the Zacks S&P 500 composite's -4.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Performance - Earnings per share for Q1 2025 was $0.98, an increase of 19.5% from $0.82 in Q1 2024[2] - Net income for Q1 2025 was $131.6 million, up from $112.7 million in Q1 2024, but down from $136.1 million in Q4 2024[2] - The return on average assets was 1.69%, while the return on average equity was 15.82%[7] - For Q1 2025, net income was $131.6 million, down from $136.1 million in Q4 2024 but up from $112.7 million in Q1 2024[24] - The effective tax rate for the company was 21.9% in the current quarter, consistent with the same quarter last year[43] Income and Revenue - Net interest income reached a record $269.1 million, reflecting a $2.5 million increase from the prior quarter and a 7.7% increase year-over-year[5] - Non-interest income totaled $158.9 million, a 6.8% increase compared to Q1 2024, with trust fees growing 10.7% to $57 million[5] - Total non-interest income for Q1 2025 was $158.9 million, an increase of $10.1 million or 6.8% year-over-year[34] - Trust fees increased by $5.5 million or 10.7% compared to the same period last year, driven by higher private client fees[36] Assets and Liabilities - Total assets as of March 31, 2025, were $32.4 billion, an increase of $368.3 million, or 1.2%, from the prior quarter[7] - Total assets increased to $32,364,964 thousand as of March 31, 2025, up from $31,996,627 thousand at December 31, 2024, representing a growth of 4.3%[16] - The total liabilities increased to $28,866,562 thousand from $28,664,152 thousand, reflecting a growth of 0.7%[16] Loans and Deposits - Average loan balances increased by 1.0% to $17.2 billion compared to the prior quarter[7] - Total loans reached $17,379,421 thousand, a slight increase from $17,220,103 thousand in the previous quarter, reflecting a growth of 0.9%[16] - Net loans amounted to $17,212,390 thousand, up from $17,057,361 thousand, indicating a quarter-over-quarter increase of 0.9%[16] - Total deposits rose to $25,841,797 thousand, compared to $25,293,644 thousand at the end of the previous quarter, marking a growth of 2.2%[16] - Total average deposits decreased by $83.7 million, with significant declines in demand deposits and certificates of deposit[27] Expenses and Efficiency - Non-interest expense decreased by 3.0% to $238.4 million compared to Q1 2024[5] - Non-interest expense decreased to $238.4 million from $245.7 million year-over-year, mainly due to the absence of litigation settlement expenses[39] - The efficiency ratio improved to 55.6%, down from 61.67% in Q1 2024[9] Credit Quality - The allowance for credit losses on loans increased to $167.0 million, with a ratio of 0.96% to total loans[7] - The allowance for credit losses on loans was $167,031 thousand, slightly higher than $162,742 thousand in the previous quarter, indicating a proactive approach to risk management[16] - The provision for credit losses on loans was $15.1 million, up from $12.6 million in the previous quarter[22] - Non-accrual loans to total loans ratio increased to 0.13% from 0.11% in the previous quarter[22] - Net loan charge-offs for Q1 2025 were $10.8 million, with an annualized charge-off ratio of 0.25%[44] Capital and Dividends - Stockholders' equity increased to $3,498,402 thousand, up from $3,332,475 thousand, reflecting a growth of 5.0%[16] - The company maintained a stable capital surplus of $3,381,960 thousand, slightly down from $3,395,645 thousand in the previous quarter[16] - The company paid a cash dividend of $0.275 per common share, reflecting a 7.0% increase year-over-year[49] Securities and Investments - Investment securities totaled $9,601,068 thousand, an increase from $9,462,380 thousand, representing a growth of 1.5%[16] - Total average available for sale debt securities rose by $66.1 million to $9.2 billion, primarily due to higher U.S. government and federal agency obligations[26] - The unrealized loss on available for sale debt securities decreased by $157.7 million to $832.9 million at the end of the quarter[26] - Net securities losses amounted to $7.6 million, a significant decline from gains of $977 thousand in the prior quarter[38] Interest Rates - The net yield on interest earning assets increased to 3.56%, up from 3.49% in the prior quarter[29] - Interest expense decreased by $7.5 million to $1.89% from 2.04% in the prior quarter, primarily due to lower average rates on deposits[33]

Group 1 - Commerce Bancshares (CBSH) reported quarterly earnings of $0.98 per share, exceeding the Zacks Consensus Estimate of $0.93 per share, and up from $0.86 per share a year ago, representing an earnings surprise of 5.38% [1] - The company posted revenues of $428.05 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.91%, compared to year-ago revenues of $397.85 million [2] - Over the last four quarters, Commerce has consistently surpassed consensus EPS and revenue estimates [2] Group 2 - The stock has lost approximately 5.7% since the beginning of the year, while the S&P 500 has declined by 8.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.96 on revenues of $423.04 million, and for the current fiscal year, it is $3.90 on $1.69 billion in revenues [7] - The Zacks Industry Rank for Banks - Midwest is in the top 12% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Core Viewpoint - Commerce Bancshares (CBSH) is expected to report quarterly earnings of $0.93 per share, an increase of 8.1% year-over-year, with revenues forecasted at $415.93 million, reflecting a 4.6% increase compared to the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised down by 0.8% in the last 30 days, indicating a reassessment by analysts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are linked to short-term stock price performance [3]. Key Financial Metrics - Analysts project the 'Efficiency Ratio' to be 58.3%, down from 61.7% in the same quarter last year [5]. - The 'Net Interest Margin' is expected to be 3.5%, compared to 3.3% in the same quarter last year [5]. - 'Average total interest earning assets' are estimated at $30.24 billion, slightly lower than the $30.37 billion reported in the same quarter last year [6]. - The 'Tier I Leverage Ratio' is forecasted at 12.4%, up from 11.8% a year ago [6]. - The 'Tier I risk-based capital ratio' is expected to reach 16.6%, compared to 15.4% in the previous year [6]. - The 'Total risk-based capital ratio' is estimated at 17.4%, up from 16.1% in the same quarter last year [7]. Non-Interest Income and Fees - 'Total Non-Interest Income' is projected to be $154.31 million, an increase from $148.85 million a year ago [8]. - 'Fully-taxable equivalent net interest income' is expected to be $262.38 million, compared to $251.31 million in the same quarter last year [8]. - 'Trust fees' are anticipated to reach $56.05 million, up from $51.11 million in the previous year [9]. - 'Bank card transaction fees' are projected at $46.74 million, slightly down from $46.93 million a year ago [9]. - 'Deposit account charges and other fees' are expected to be $24.87 million, compared to $24.15 million in the same quarter last year [10]. Stock Performance - Shares of Commerce have returned -4.5% over the past month, compared to a -6.1% change in the Zacks S&P 500 composite [11].

Core Viewpoint - Commerce Bancshares (CBSH) has consistently beaten earnings estimates and is well-positioned for future earnings surprises, particularly in its upcoming quarterly report [1][5]. Earnings Performance - For the most recent quarter, Commerce Bancshares reported earnings of $1.01 per share, exceeding the expected $0.94 per share, resulting in a surprise of 7.45% [2]. - In the previous quarter, the company reported $1.07 per share against an expectation of $1 per share, achieving a surprise of 7% [2]. Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for Commerce, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [5][8]. - The current Earnings ESP for Commerce is +0.54%, suggesting that analysts have recently become more optimistic about the company's earnings prospects [8]. Zacks Rank and Success Rate - Commerce Bancshares holds a Zacks Rank of 3 (Hold), which, when combined with a positive Earnings ESP, indicates a high probability of beating consensus estimates, with historical data showing nearly 70% success in such cases [6][8].

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Commerce Bancshares (CBSH) due to higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $0.93 per share, reflecting an 8.1% increase year-over-year, and revenues of $415.93 million, up 4.5% from the previous year [3]. - A positive earnings surprise could lead to a stock price increase, while a miss may result in a decline [2]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.83% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.54%, suggesting analysts are optimistic about the company's earnings prospects [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. - The company has a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [11]. Historical Performance - Commerce Bancshares has consistently beaten consensus EPS estimates, achieving this in the last four quarters [13]. - In the last reported quarter, the company exceeded expectations by delivering earnings of $1.01 per share against an expected $0.94, resulting in a surprise of +7.45% [12]. Conclusion - While the company appears to be a strong candidate for an earnings beat, other factors should also be considered before making investment decisions [16].

Core Viewpoint - Commerce Bancshares (CBSH) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system tracks the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years, highlighting the importance of earnings revisions in stock valuation [1][4]. - A strong correlation exists between changes in earnings estimates and near-term stock price movements, with institutional investors using these estimates to determine fair value [4][6]. Recent Earnings Estimate Revisions - Commerce is projected to earn $3.94 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 1.8% [8]. - Over the past three months, the Zacks Consensus Estimate for Commerce has risen by 2.5%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Commerce to a Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term [10].