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CB

COMMERCE BANCSHARES INC /MO/ (CBSH)·Q1 2025 Earnings Summary

Executive Summary

  • Record net interest income of $269.1M and NIM expanded to 3.56% (+7 bps q/q), driving diluted EPS of $0.98; EPS rose 20% y/y but fell 3% q/q due to investment securities losses and higher opex .
  • Wall Street consensus EPS was ~$0.94; CBSH delivered a beat of ~$0.04, while revenue comparisons depend on definition (see Estimates Context) [*].
  • Deposit costs continued to fall (interest-bearing deposit rate 1.72%; total cost of deposits 1.22%), while average deposits dipped 0.3% q/q; average loans grew 1% q/q .
  • Credit quality remained solid: non‑accrual loans 0.13% of total; total NCOs ratio 0.25%; ACL to loans 0.96% .
  • Potential stock catalysts: improving NIM with falling deposit costs, strong fee mix (trust fees +10.7% y/y), and capital return (buybacks + dividend increase) vs. headwinds from securities losses and modest corporate card fee pressure .

What Went Well and What Went Wrong

What Went Well

  • Record net interest income ($269.1M) and NIM expansion to 3.56% (+7 bps q/q) on fixed-rate asset repricing and lower deposit costs .
  • Fee strength: trust fees $56.6M (+10.7% y/y) and overall non‑interest income $158.9M (+6.8% y/y; 37.1% of revenue) .
  • Management quote: “Net interest income of $269 million was a record quarter… Non‑interest income was $159 million… trust fees up 10.7%… Credit quality… non‑accrual loans at .13%” .

What Went Wrong

  • Investment securities losses of $7.6M (vs. Q4 gains of $1.0M), driving the q/q EPS decline .
  • Bank card fees down 2.8% y/y and 4.6% y/y in prior quarter due to lower corporate card interchange; Q1 corporate card fees $25.9M .
  • Credit card loss rates rose: annualized consumer credit card NCOs 5.04% (vs. 4.59% in Q4) despite overall stable total NCO ratio .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Total Revenue ($000)$397,847 $422,083 $428,051
Net Interest Income ($000)$248,999 $266,647 $269,102
Non-Interest Income ($000)$148,848 $155,436 $158,949
Investment Securities Gains (Losses) ($000)$(259) $977 $(7,591)
Provision for Credit Losses ($000)$4,787 $13,508 $14,487
Non-Interest Expense ($000)$245,697 $235,718 $238,376
Net Income Attributable ($000)$112,663 $136,108 $131,592
Diluted EPS ($)$0.82 $1.01 $0.98
Net Yield on Interest Earning Assets (%)3.33 3.49 3.56
Efficiency Ratio (%)61.67 55.77 55.61
ROAA (%)1.48 1.73 1.69
ROAE (%)15.39 15.97 15.82

Segment/Non-Interest Income Detail

Category ($000)Q1 2024Q4 2024Q1 2025
Trust Fees$51,105 $56,345 $56,592
Bank Card Transaction Fees$46,930 $47,807 $45,593
Deposit Account Charges & Other Fees$24,151 $25,480 $26,622
Capital Market Fees$3,892 $5,129 $5,112
Consumer Brokerage Services$4,408 $4,636 $4,785
Loan Fees & Sales$3,141 $2,874 $3,404
Other$15,221 $13,165 $16,841

Key KPIs

KPIQ1 2024Q4 2024Q1 2025
Avg Loans ($000)$17,080,067 $17,069,718 $17,242,681
Avg Deposits ($000)$24,449,970 $24,938,846 $24,855,168
Interest-Bearing Deposit Rate (%)1.97 1.87 1.72
Total Cost of Deposits (%)1.97 1.31 1.22
Non-Accrual Loans / Total Loans (%)0.03 0.11 0.13
NCOs / Avg Loans (%)0.21 0.25 0.25
TCE / TA (%)9.24 9.92 10.33
Book Value/Share ($)$21.62 $24.84 $26.19

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend/ShareQ2 2025 (payable Jun 24, 2025)$0.257 (Q4 2024 paid) $0.275 Raised (≈7% y/y)
NII/NIM2025Not providedCommentary: NIM rose to 3.56%; deposit costs fell; added SOFR floors to protect NII Informational (no formal guidance)
OpEx2025Not providedNot providedMaintained
Tax Rate2025Not providedEffective tax rate 21.9% (current quarter) Informational
Segment Guidance2025Not providedNot providedMaintained

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available; themes reflect press release, investor slides, and shareholder meeting remarks.

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Tariffs/Macro OutlookFocus on deposit costs flattening; rate decline commentary CEO flagged uncertainty from tariffs/trade restrictions and capital markets adjustment Worsening macro uncertainty
Net Interest Margin3.50% in Q3 ; 3.49% in Q4 3.56% (+7 bps q/q) Improving
Deposit CostsFlat at 1.40% (Q3) ; 1.31% (Q4) 1.22% total cost; interest-bearing 1.72% Improving
Credit QualityNon‑accruals 0.11% (Q3 & Q4); card NCO rising Non‑accruals 0.13%; card NCO 5.04% Stable overall; card losses up
Investment PortfolioRepositioning in Q2; Q3 gains; Q4 purchases $573M Q1 purchases $508M; AOCI loss reduced; securities losses this quarter Active positioning; volatile gains/losses
Capital/LiquidityTCE/TA 10.47% (Q3); cash at FRB ~$2.6B (Q4) TCE/TA 10.33%; avg cash at FRB ~$2.4B; strong borrowing capacity Strong/stable
Technology/Enterprise DigitalOngoing investment noted in slides Continued focus (no new specifics) Ongoing

Management Commentary

  • “These results are the product of strong execution against the backdrop of a relatively stable economy during the first quarter of 2025.” — John Kemper, CEO .
  • “Given recent news related to tariffs and trade restrictions… the outlook… is increasingly uncertain. Nonetheless, our franchise is well‑positioned… Our credit profile remains strong… capital and liquidity levels remain robust” .
  • “Net interest income of $269 million was a record… Non‑interest income was $159 million… trust fees up 10.7%… Credit quality… non‑accrual loans at .13%” .
  • Shareholder meeting: “We had about a little shy of $2.5 billion of extra cash on deposit at the Fed… very low levels of uninsured deposits… low loan‑to‑deposit ratio… ample capital” .
  • Long-term focus: “57th consecutive year of dividend growth… an all‑weather business capable of delivering results throughout the economic cycle” .

Q&A Highlights

  • No Q1 2025 earnings call transcript was available. At the April 25 shareholder meeting, management emphasized liquidity, capital strength, and long‑term value creation; they acknowledged macro uncertainty but reiterated the “all‑weather” model and dividend growth record .

Estimates Context

MetricConsensus (S&P Global)ActualSurprise
EPS (Primary)$0.9433*$0.98 +$0.04 (beat)
Revenue$419.696M*$428.051M (company total revenue) +$8.4M vs company total revenue definition
  • S&P Global’s “actual revenue” field for Q1 2025 shows $405.973M*, which differs from the company’s total revenue definition of net interest income + non‑interest income ($428.051M). Revenue definitions for banks can vary across data providers; we anchor estimates to S&P Global but use company-reported totals for actuals .
  • EPS beat driven by NIM expansion and lower deposit costs; revenue outcome is sensitive to definition and investment securities losses .
  • Values retrieved from S&P Global.

Key Takeaways for Investors

  • NIM tailwind: Falling deposit costs and fixed‑rate asset repricing lifted NIM to 3.56%; watch for continued improvement if rate path remains supportive .
  • Fee durability: Trust fees strength (+10.7% y/y) and non‑interest income at 37% of revenue underpin diversified earnings .
  • Credit stable overall, with consumer card losses elevated (5.04% NCOs); portfolio quality remains strong (non‑accruals 0.13%) .
  • Securities volatility: Q1 losses (-$7.6M) offset prior gains; ongoing portfolio repositioning (Q1 purchases ~$508M at ~4.74% yield) suggests future NII support but mark‑to‑market risk persists .
  • Capital return: Dividend raised to $0.275/share and continued buybacks (854,806 shares at $64.56 avg); TCE/TA 10.33% supports flexibility .
  • Macro watch: Management flagged tariff/trade uncertainty; strong liquidity ($2.4B avg cash at FRB) and borrowing capacity mitigate downside .
  • Trading lens: Near-term catalysts include further NIM gains and fee momentum; headwinds include card loss normalization and AFS valuation swings.