Commerce Bancshares: Higher Provisioning To Undermine Top-Line Growth

Apr. 22, 2022 6:05 AM ETCommerce Bancshares, Inc. (CBSH)1 Comment
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Sheen Bay Research


  • The loan portfolio grew strongly in the first quarter. This performance will likely continue in the year ahead on the back of economic factors.
  • Thanks to the balance sheet positioning, the net interest income is moderately sensitive to rate changes. Therefore, the margin will most probably expand in the year ahead.
  • Loan additions will likely lead to higher net provision expenses this year relative to last year.
  • The year-end target price suggests a significant downside from the current market price. Further, CBSH is offering a low dividend yield.

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Earnings of Commerce Bancshares, Inc (NASDAQ:CBSH) will most probably decline this year relative to last year because of higher provision expenses. On the other hand, economic strength will likely drive loan growth, which will, in turn, support the bottom line. Further, the

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Interest Earnings Deposits with Other Banks Commerce Bancshares

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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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