Commerce Bancshares: Partial Provisioning Normalization To Drag Earnings

Nov. 18, 2021 11:51 PM ETCommerce Bancshares, Inc. (CBSH)
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Sheen Bay Research
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Summary

  • Loan growth will eventually lead to a normalization of provisioning for loan losses.
  • An improvement in the earning asset mix and an interest rate hike will likely expand the net interest margin.
  • The December 2022 target price is below the current market price. Further, CBSH is offering a modest dividend yield.

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Earnings of Commerce Bancshares, Inc. (NASDAQ: NASDAQ:CBSH) will likely decline next year as the provisioning for loan losses will rise towards a more normal level. On the plus side, there is hope that the declining loan trend

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Around 10 years of experience covering Banks and Macroeconomics. Passionate about discovering lucrative investments and generating alpha.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Disclaimer: This article is not financial advice. Investors are expected to consider their investment objectives and constraints before investing in the stock(s) mentioned in the article.

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