Commerce Bancshares, Inc. (CBSH) | Investment Case

1. Company Snapshot

1.a. Company Description

Commerce Bancshares, Inc.operates as the bank holding company for Commerce Bank that provides retail, mortgage banking, corporate, investment, trust, and asset management products and services to individuals and businesses in the United States.It operates through three segments: Consumer, Commercial, and Wealth.

The Consumer segment offers various banking products and services, including consumer deposits; consumer loans, such as automobile, motorcycle, marine, tractor/trailer, recreational vehicle, fixed rate and revolving home equity, and other consumer loans; patient health care financing; real estate loans; indirect and other consumer financing; personal mortgage banking; consumer installment lending; and consumer debit and credit bank cards.The Commercial segment provides corporate lending, leasing, international, merchant and commercial bank card, and securities safekeeping and bond accounting services; and business products, government deposits, and related commercial cash management services, as well as sells fixed income securities to correspondent banks, corporations, public institutions, municipalities, and individuals.The Wealth segment provides traditional trust and estate planning, advisory and discretionary investment portfolio management, and brokerage services, as well as private banking accounts.

The company also offers private equity investment, securities brokerage, insurance agency, specialty lending, and leasing services, as well as online and mobile banking services.It operates through a network of 287 locations in Missouri, Kansas, Illinois, Oklahoma, and Colorado, as well as commercial offices.Commerce Bancshares, Inc.

was founded in 1865 and is headquartered in Kansas City, Missouri.

Show Full description

1.b. Last Insights on CBSH

Commerce Bancshares, Inc.'s recent performance was negatively impacted by its Q3 earnings miss, with EPS of $1.06 per share, falling short of the Zacks Consensus Estimate of $1.09 per share. Rising expenses and credit provisions weighed on results, despite higher revenues. The company's net income decreased to $141.5 million, compared to $152.5 million in the prior quarter. Additionally, the upcoming merger with FineMark Holdings, Inc. received shareholder approval, marking a significant milestone in the strategic combination of the two institutions. (Source: Zacks)

1.c. Company Highlights

Last Price	52.24
Change Percentage	-0.80%
Open	52.42
Previous Close	52.66
Market Cap ( Millions)	7263
Volume	1014702
Year High	66.13
Year Low	48.69
M A 50	52.42
M A 200	57.29

FCF Yield	3.14%
Dividend Yield	2.01%
ROE	15.86%
Debt / Equity	65.82%
Net Debt / EBIDTA	262.68%
Price To Book	1.83
Price Earnings Ratio	12.29
Price To FCF	31.84
Price To sales	3.72
EV / EBITDA	12.14

2. Transcript Summary

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3. NewsRoom

Fisher Asset Management LLC Acquires 24,318 Shares of Commerce Bancshares, Inc. $CBSH

Dec -04

Source: defenseworld.net

Exchange Ratio Adjusted for Commerce Bancshares, Inc.'s Pending Acquisition of FineMark Holdings, Inc.

Dec -03

Source: businesswire.com

17 Capital Partners LLC Trims Stake in Commerce Bancshares, Inc. $CBSH

Nov -20

Source: defenseworld.net

ABN Amro Investment Solutions Purchases New Holdings in Commerce Bancshares, Inc. $CBSH

Nov -14

Source: defenseworld.net

Buy 3 Ideal Dividend Kings Of 24 'Safer' In November's 56

Nov -10

Source: seekingalpha.com

HBAN vs. CBSH: Which Stock Is the Better Value Option?

Nov -07

Source: zacks.com

Commerce Bancshares: Soft Results Drive Shares To Historically Cheap Levels (Rating Upgrade)

Nov -06

Source: seekingalpha.com

Commerce Bancshares: Credit Fears Create Opportunity (Upgrade)

Nov -04

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.60%)

6. Segments

Commercial

Expected Growth: 3.0%

The commercial banking segment is expected to grow faster than the global average due to increasing demand for cash management and lending services from businesses and governments. The segment's diversified product offerings and strong customer relationships will drive growth.

Consumer

Expected Growth: 2.8%

The consumer banking segment is expected to grow in line with the global average, driven by increasing demand for credit cards and other consumer banking products. The segment's growth will be supported by the company's strong brand and distribution network.

Wealth

Expected Growth: 3.2%

The wealth management segment is expected to grow faster than the global average, driven by increasing demand for wealth management services from high-net-worth individuals. The segment's growth will be supported by the company's strong investment management capabilities and high-quality service.

Other/Elimination

Expected Growth: 2.6%

The Other/Elimination segment is expected to grow in line with the global average, as it is not directly related to the company's core operations. The segment's growth will be driven by various non-operating items, which are difficult to predict.

7. Detailed Products

Consumer Banking

Provides personal banking services, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

Offers financial solutions for businesses, including cash management, commercial lending, and treasury management services.

Wealth Management

Provides investment and wealth management services, including brokerage, trust, and investment management services.

Card Services

Issues and services credit cards, debit cards, and prepaid cards for consumers and businesses.

Treasury Services

Provides cash management and treasury services, including account management, payment processing, and fraud prevention.

Mortgage Banking

Originates, sells, and services residential and commercial mortgage loans.

8. Commerce Bancshares, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Commerce Bancshares, Inc. operates in a highly competitive industry, with many substitutes available to customers. However, the company's strong brand recognition and customer loyalty help to mitigate this threat.

Bargaining Power Of Customers

Commerce Bancshares, Inc. has a large customer base, which gives customers significant bargaining power. The company must be responsive to customer needs to maintain market share.

Bargaining Power Of Suppliers

Commerce Bancshares, Inc. has a diverse supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position also gives it negotiating power with suppliers.

Threat Of New Entrants

While there are barriers to entry in the banking industry, new entrants can still disrupt the market. Commerce Bancshares, Inc. must continue to innovate and invest in technology to stay competitive.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Commerce Bancshares, Inc. must differentiate itself through its products and services to maintain market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	49.71%
Debt Cost	7.80%
Equity Weight	50.29%
Equity Cost	7.80%
WACC	7.80%
Leverage	98.85%

11. Quality Control: Commerce Bancshares, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

BancFirst

A-Score: 6.8/10

Value: 7.3

Growth: 7.0

Quality: 7.1

Yield: 4.0

Momentum: 7.5

Volatility: 7.7

1-Year Total Return ->

BOK Financial

A-Score: 6.4/10

Value: 7.0

Growth: 7.4

Quality: 6.6

Yield: 4.0

Momentum: 5.0

Volatility: 8.3

1-Year Total Return ->

Commerce Bancshares

A-Score: 6.1/10

Value: 5.2

Growth: 5.7

Quality: 6.8

Yield: 4.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

Associated Banc

A-Score: 6.0/10

Value: 5.1

Growth: 4.8

Quality: 4.3

Yield: 8.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

First Financial Bankshares

A-Score: 5.4/10

Value: 3.9

Growth: 5.8

Quality: 8.1

Yield: 4.0

Momentum: 3.0

Volatility: 7.7

1-Year Total Return ->

ServisFirst Bank

A-Score: 5.2/10

Value: 4.2

Growth: 7.1

Quality: 6.4

Yield: 3.0

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

3.36%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.80%

Commerce Bancshares, Inc. - US2005251036

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CBSH

1.c. Company Highlights

Expensive

Medium Volatility

Stable Momentum

Earnings Beats

Revenues Beats

Average Quality

Less Volatile

Fairly Valued

Revenues Miss

Better Quality

Average Growth

Earnings Miss

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.60%)

6. Segments

Commercial

Expected Growth: 3.0%

Consumer

Expected Growth: 2.8%

Wealth

Expected Growth: 3.2%

Other/Elimination

Expected Growth: 2.6%

7. Detailed Products

Consumer Banking

Commercial Banking

Wealth Management

Card Services

Treasury Services

Mortgage Banking

8. Commerce Bancshares, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Commerce Bancshares, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

52.24$

Current Price

52.24$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA