Commerce Bancshares, Inc.
) announced major capital deployment actions to enhance
shareholders' value. Apart from the regular quarterly cash
dividend, the company declared special cash dividend and stock
COMMERCE BANCSH (CBSH): Free Stock Analysis
TCF FINL CORP (TCB): Free Stock Analysis
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Commerce Bancshares' Board of Directors approved a 5% stock
dividend. The dividend is payable on December 17 to the
shareholders of record as of November 30. Moreover, the
shareholders will be receiving cash for fractional shares. The
cash amount will be determined on the basis of the company's
share price on November 30.
In addition, Commerce Bancshares announced a regular cash
dividend of 23 cents per share and a special cash dividend of
$1.50 per share. Both these dividends will be paid on December 17
to the shareholders of record as of November 30. However, these
two dividends will not be paid on any shares that would be issued
in connection with the 5% stock dividend.
The announcement of the special dividend comes on the heels of a
probable rise in tax rates on dividends from next year and
Commerce Bancshares' strong capital position. As of September 30,
2012, the company's tier I leverage ratio came in at 10.00%, up
from 9.73% in the prior quarter and 9.74% in the prior-year
Commerce Bancshares continues to meaningfully enhance
shareholders' value. Even during the financial crisis, the
company has continuously hiked quarterly dividends. The last hike
was made in February when the company raised its quarterly
dividend by nearly 5% to the current 23 cents per share.
Further, unlike one of its peers,
TCF Financial Corporation
), which has not repurchased any shares since October 2007,
Commerce Bancshares has a share repurchase program in place. In
July, the company announced the buyback of additional shares,
thereby bringing the total authorization to 3,000,000 shares.
During the third quarter, the company repurchased 98,000 shares
at an average price of $39.66 per share.
Even after declaring dividends, Commerce Bancshares will be able
to maintain its strong capital and balance sheet levels. This
would position the company comfortably for expansion via
acquisitions as well as through organic growth.
Commerce Bancshares currently retains a Zacks #3 Rank, which
translates into a short-term Hold rating. Also, considering the
fundamentals, we maintain a long-term Neutral recommendation on