Commerce Bancshares, Inc. (CBSH): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Commerce Bancshares' second-quarter 2014 earnings outpaced the Zacks Consensus Estimate. Steady improvement in revenues and growth in loans and deposits were the favorable factors. On the other hand, elevated operating expense and provision for loan losses continue to be causes of concern. We believe the company has healthy growth prospects on the back of a sound capital base and strong liquidity level. Also, the company's enhanced capital deployment activities and inclination towards inorganic growth will work in its favor going forward. However, the company's failure to curb expenses which may get further aggravated by stringent regulatory requirements along with the prevailing low interest rate environment as well as sluggish economic recovery will likely keep the financials under pressure in the near term.

Overview:

Incorporated in 1966, Commerce Bancshares Inc. is one of the largest bank holding companies in Missouri, with its principal offices located in Kansas City and St. Louis. It has significant operations in the states of Missouri, Kansas, Illinois, Oklahoma and Colorado. Operating through a network of approximately 350 locations as of Jun 30, 2014, the company engages in the general banking business, providing a wide range of retail, corporate, investment, trust and asset management products as well as services to individuals and businesses.

Commerce Bancshares, along with its subsidiaries, offers diversified financial services organized under the following segments:

The Consumer segment includes the retail branch network, indirect and other consumer financing, consumer debit and credit bank cards and student lending.

The Commercial segment provides an array of corporate lending, leasing and international services, as well as business and government deposits, cash management services and Merchant and Commercial bank card products. The segment includes the Capital Markets Group, which offers fixed-income securities and also provides investment safekeeping and bond accounting services.

The Wealth segment provides traditional trust and estate tax planning services, as well as advisory and discretionary investment portfolio management services to both personal and institutional corporate customers. It also manages brokerage services, the Private Banking product portfolio and Commerce Bancshares' family of proprietary mutual funds.

The Other/Elimination segment includes activities not related to the above-mentioned segments, such as certain administrative functions, the investment securities portfolio and the effect of certain expense allocations to the segments.

In 2013, Commerce Bancshares acquired Summit Bancshares, Inc. of Tulsa and Oklahoma City for $43.2 million. The company assumed $206 million in loans and $230 million in deposits as part of this acquisition.

As of Jun 30, 2014, Commerce Bancshares had total assets of $23.0 billion, loans of $11.5 billion, deposits of $19.0 billion and equity of $2.3 billion. As of the same date, the company had 4,733 employees.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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