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].

Financial Performance - In 2024, the Commercial, Consumer, and Wealth segments contributed 47%, 31%, and 22% of total segment pre-tax income, respectively[19]. - The Company's net interest income represented 63% of total revenue for the year ended December 31, 2024[52]. - The Federal Reserve raised benchmark interest rates from nearly zero at the start of 2022 to between 5.25% and 5.50% by the end of July 2023, impacting the Company's financial performance[53]. - A significant reduction in the Company's deposits could materially impact its liquidity and ability to fund loans[56]. - The economic conditions in the U.S. are expected to remain uncertain, with inflationary pressures easing but concerns around tax reform and tariffs persisting[46]. Regulatory Compliance - The Company maintains regulatory capital ratios above the "well-capitalized" standards, with a Tier 1 capital ratio of at least 8%, a common equity Tier 1 capital ratio of at least 6.5%, and a total capital ratio of at least 10%[36]. - The Company is subject to the Bank Secrecy Act (BSA) to help combat money laundering and other crimes, with compliance monitored by the Federal Reserve[25]. - The Company is regulated under the Dodd-Frank Act, which established the Consumer Financial Protection Bureau (CFPB) to supervise certain financial services companies[28]. - The Dodd-Frank Act required stress-testing for certain financial services companies, but the Company is not required to prepare stress testing as specified by the Dodd-Frank Act due to its asset size[29][37]. - The Federal Reserve Board may prohibit the payment of cash dividends if actions constitute unsafe or unsound practices, with dividends limited to the net profit of the current year combined with retained net profits of the preceding two years[33]. Risk Management - The Company has exposure to credit risk due to its transactions with various financial institutions, which could lead to liquidity problems[54]. - The Company’s allowance for credit losses on loans reflects management's estimate of expected credit losses, which may be insufficient if future credit losses increase[62]. - The volatility of the Company's provision for credit losses may change from year to year due to macroeconomic variables, which could materially impact earnings[63]. - The Company may experience adverse effects on its operations and financial results due to public health threats or outbreaks of communicable diseases[71]. - The Company’s efforts to mitigate risks associated with climate change may not effectively protect it from new laws and regulations or changes in consumer behavior[73]. Operational Challenges - The Company is subject to extensive federal and state regulation, which affects its lending practices and capital structure[48]. - The Company faces competition from larger national banks that may lower fees to gain market share, potentially reducing the Company's revenues[47]. - The Company must continue to invest in its products and delivery systems to remain competitive in the financial services industry[47]. - The Company relies on third-party vendors for essential services, exposing it to risks related to vendor performance and operational errors[61]. - The Company may face significant operational risks after system conversions due to rapid technological changes in the financial services industry[69]. - The Company is exposed to potential losses related to security breaches at unaffiliated retailers, which could include costs for card reissuance and losses from fraudulent transactions[61]. Investment and Capital - The Company’s capital ratios are well in excess of the minimum ratios required by Basel III, which includes a minimum common equity Tier 1 capital ratio of 4.5%[35]. - The Company's deposit insurance expense was $33.2 million in 2023, compared to $10.6 million in 2022, and was $16.5 million for the year ended December 31, 2024[32]. - The FDIC raised the minimum designated reserve ratio from 1.15% to 1.35% of estimated insured deposits, affecting deposit insurance assessments[31]. - The fair value of the Company's available for sale debt securities included a net unrealized loss of $991 million as of December 31, 2024, primarily due to rising interest rates during 2022 and 2023[65]. - The Company relies on dividends from its subsidiary bank for most of its revenue, which are limited by federal and state regulations[57].