On Jun 3, 2013, we reiterated our long-term recommendation on
Commerce Bancshares, Inc.
) at Neutral. This was based on the company's sturdy capital base
and solid liquidity position, despite its first-quarter earnings
marginally missing the Zacks Consensus Estimate.
COMMERCE BANCSH (CBSH): Free Stock Analysis
ENTERPRISE FINL (EFSC): Free Stock Analysis
FIRST INTST MT (FIBK): Free Stock Analysis
OLD SECOND BCP (OSBC): Free Stock Analysis
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Commerce Bancshares has expanded through periodic acquisitions
driven by a stable balance sheet position. Further, the company
is an attractive choice for yield-seeking investors. The company
has an effective share repurchase program and a consistent
dividend payment policy. Moreover, it is conveniently poised for
growth, given a rise in deposits and stable loan to deposit
Commerce Bancshares' earnings of 67 cents per share were a penny
below the Zacks Consensus Estimate. The lower-than-expected
results were mainly due to a fall in revenues, partly offset by
reduced operating expenses.
Following the first-quarter results, the Zacks Consensus Estimate
for 2013 fell by a cent to $2.84 per share over the last 60 days.
For 2014, the Zacks Consensus Estimate dipped 1.0% to $2.91 per
share, over the same time-frame. Hence, Commerce Bancshares
currently carries a Zacks Rank #3 (Hold).
Additionally, net interest income will likely be adversely
affected in the near to mid-term due to a decrease in average
loans coupled with a low interest rate environment. Further,
higher operating expenses remain a major concern for Commerce
Other Banks Worth Considering
Better performing Midwest banks include
Enterprise Financial Services Corp.
First Interstate Bancsystem Inc.
Old Second Bancorp Inc.
), all of which carry a Zacks Rank #1 (Strong Buy).