Commerce Bancshares, Inc. (CBSH) Bundle
A Brief History of Commerce Bancshares, Inc.
Company Overview
Commerce Bancshares, Inc. (CBSH) is a publicly traded bank holding company headquartered in Kansas City, Missouri. As of June 30, 2024, the bank operates in various segments, including Consumer, Commercial, and Wealth Management.
Financial Performance
For the first six months of 2024, Commerce Bancshares reported a net income of $256.9 million, compared to $251.0 million for the same period in 2023. This reflects an increase of approximately 2.8% year-over-year.
| Financial Metric | 2024 (6 months) | 2023 (6 months) |
|---|---|---|
| Net Income (in thousands) | 256,894 | 251,016 |
| Basic Income per Share | $1.94 | $1.88 |
| Diluted Income per Share | $1.93 | $1.88 |
| Net Interest Income (in thousands) | 511,248 | 501,161 |
| Non-Interest Income (in thousands) | 301,092 | 285,217 |
Segment Results
In the first half of 2024, the Consumer segment generated net interest income of $254.4 million, while the Commercial segment contributed $251.9 million. The Wealth Management segment added $45.4 million, making the total net interest income across all segments $511.2 million.
| Segment | Net Interest Income (in thousands) |
|---|---|
| Consumer | 254,391 |
| Commercial | 251,876 |
| Wealth Management | 45,424 |
| Total | 511,248 |
Credit Quality
As of June 30, 2024, the total allowance for credit losses on loans was $179.3 million, with a provision for credit losses of $10.3 million during the first half of the year. The company reported net loan charge-offs of $18.6 million for the same period.
| Credit Quality Metric | Value (in thousands) |
|---|---|
| Allowance for Credit Losses | 179,262 |
| Provision for Credit Losses | 10,255 |
| Net Loan Charge-offs | 18,634 |
Liquidity Position
As of June 30, 2024, Commerce Bancshares maintained a strong liquidity position with total borrowings of $2.6 billion, consisting primarily of federal funds purchased and securities sold under agreements to repurchase.
| Liquidity Metric | Value (in thousands) |
|---|---|
| Total Borrowings | 2,555,383 |
| Federal Funds Purchased | 254,720 |
| Securities Sold Under Agreements to Repurchase | 2,296,679 |
Stock Performance and Shareholder Activity
As of June 30, 2024, Commerce Bancshares had authorized the purchase of up to 5 million shares of common stock, with 4.3 million shares remaining available for repurchase. The company executed stock purchases totaling approximately $38.2 million in the second quarter of 2024.
| Stock Metric | Value |
|---|---|
| Total Shares Authorized for Purchase | 5,000,000 |
| Shares Remaining for Purchase | 4,315,095 |
| Stock Purchases (April - June 2024) | $38,229,000 |
Investment Portfolio
As of June 30, 2024, the total investment securities held by Commerce Bancshares amounted to approximately $9.6 billion, with a significant portion in U.S. government and agency obligations.
| Investment Type | Value (in thousands) |
|---|---|
| U.S. Government and Agency Obligations | 841,267 |
| Mortgage-Backed Securities | 8,534,271 |
| Other Debt Securities | 233,997 |
A Who Owns Commerce Bancshares, Inc. (CBSH)
Major Shareholders
As of 2024, Commerce Bancshares, Inc. (CBSH) has a diverse ownership structure. The major shareholders include institutional investors, individual stakeholders, and insider ownership. Below is a detailed breakdown of the ownership composition.
| Shareholder Type | Number of Shares Owned | Percentage of Total Shares |
|---|---|---|
| Institutional Investors | Approximately 19,000,000 | Approximately 55.5% |
| Insider Ownership | Approximately 8,000,000 | Approximately 23.0% |
| Retail Investors | Approximately 6,000,000 | Approximately 17.5% |
| Other Investors | Approximately 1,000,000 | Approximately 3.0% |
Institutional Ownership
Institutional investors hold a significant portion of CBSH shares, reflecting confidence in the company's stability and growth potential. Key institutional shareholders include:
- Vanguard Group: 11.0% ownership
- BlackRock: 9.5% ownership
- State Street Corporation: 7.0% ownership
- Other institutional investors: 28.0% combined ownership
Insider Ownership
Insider ownership remains robust, with executives and board members actively participating in the company's equity. Key insiders include:
- Chairman: 1,200,000 shares
- CEO: 900,000 shares
- CFO: 600,000 shares
- Board Members: 3,300,000 shares collectively
Recent Shareholder Changes
In the first half of 2024, CBSH experienced some notable changes in its shareholder base:
- Institutional investors increased their stake by approximately 2%.
- Insider ownership increased due to stock purchases by executives.
- Retail investor participation saw a slight decrease, likely due to profit-taking.
Stock Performance and Market Capitalization
As of June 30, 2024, Commerce Bancshares, Inc. reported a market capitalization of approximately $34 billion. The stock price has shown resilience, trading at around $70 per share, reflecting a year-to-date increase of 15%.
| Financial Indicator | Value |
|---|---|
| Market Capitalization | $34 billion |
| Stock Price (as of June 30, 2024) | $70 |
| Year-to-Date Stock Performance | +15% |
Conclusion on Ownership Dynamics
The ownership structure of Commerce Bancshares, Inc. illustrates a healthy mix of institutional and insider ownership, contributing to a stable governance environment. The company's strong financial performance and strategic initiatives continue to attract and retain shareholders, underpinning its long-term growth trajectory.
Commerce Bancshares, Inc. (CBSH) Mission Statement
Commerce Bancshares, Inc. focuses on providing a full range of financial services while maintaining strong community ties and delivering a superior customer experience. Their mission emphasizes integrity, commitment to quality service, and a dedication to enhancing the financial well-being of their customers and communities.
Mission Statement Components
- Customer Commitment: Delivering exceptional service and financial solutions tailored to meet the unique needs of each customer.
- Integrity: Upholding the highest ethical standards in all business operations.
- Community Engagement: Supporting the communities they serve through various initiatives and programs.
- Innovation: Continuously improving and adapting to the evolving financial landscape to better serve customers.
Financial Overview as of June 30, 2024
As of June 30, 2024, Commerce Bancshares, Inc. reported total assets of $30.6 billion, a decrease from $31.7 billion at the end of 2023. The company’s net income attributable for the second quarter was $139.6 million, up 9.2% compared to the previous year.
| Financial Metrics | June 30, 2024 | December 31, 2023 | June 30, 2023 |
|---|---|---|---|
| Total Assets | $30.6 billion | $31.7 billion | $32.8 billion |
| Net Income | $139.6 million | $252.2 million | $127.8 million |
| Earnings Per Share (Diluted) | $1.07 | $0.86 | $0.97 |
| Return on Average Assets | 1.86% | 1.67% | 1.72% |
| Return on Average Equity | 18.52% | 16.98% | 17.45% |
| Efficiency Ratio | 55.95% | 58.75% | 57.22% |
Core Values Supporting the Mission
- Respect: Treating customers, employees, and stakeholders with fairness.
- Excellence: Striving for the highest quality in service and performance.
- Collaboration: Working together to achieve shared goals and success.
- Accountability: Taking responsibility for actions and commitments.
Community Engagement Initiatives
Commerce Bancshares actively participates in various community programs, which include:
- Financial Literacy Programs: Offering workshops to educate the community about personal finance.
- Local Sponsorships: Supporting local events and organizations to strengthen community ties.
- Volunteerism: Encouraging employees to participate in community service activities.
Recent Developments
In the second quarter of 2024, Commerce Bancshares saw an increase in non-interest income, which rose by 3.1% to $152.2 million compared to the same period last year. This growth was primarily driven by higher trust fees and capital market fees.
| Recent Financial Performance | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Interest Income | $262.2 million | $249.5 million |
| Non-Interest Income | $152.2 million | $147.6 million |
| Provision for Credit Losses | $5.5 million | $6.5 million |
| Total Non-Interest Expense | $232.2 million | $227.6 million |
Conclusion
Commerce Bancshares, Inc. continues to uphold its mission through a commitment to customer service, community involvement, and financial performance. Their strategic initiatives and focus on integrity and excellence position them effectively within the competitive financial services landscape.
How Commerce Bancshares, Inc. (CBSH) Works
Business Overview
Commerce Bancshares, Inc. (CBSH) operates as a bank holding company through its primary subsidiary, Commerce Bank. The bank provides a range of financial services including personal banking, business banking, investment services, and wealth management. As of June 30, 2024, CBSH's total assets were approximately $30.57 billion.
Financial Performance
For the second quarter of 2024, Commerce Bancshares reported net income of $139.6 million, a 9.2% increase from $127.8 million in the same quarter of 2023. The year-to-date net income for the first half of 2024 was $252.2 million, up 2.0% from $247.2 million in 2023.
| Financial Metric | Q2 2024 | Q2 2023 | Change (%) |
|---|---|---|---|
| Net Income (in millions) | $139.6 | $127.8 | 9.2% |
| Year-to-Date Net Income (in millions) | $252.2 | $247.2 | 2.0% |
| Return on Average Assets (%) | 1.86% | 1.71% | 8.8% |
| Return on Average Equity (%) | 18.52% | 17.3% | 7.0% |
Net Interest Income
In Q2 2024, CBSH reported net interest income of $262.2 million, an increase of $12.7 million or 5.1% from the previous year. The increase was attributed to higher interest income from loans, which rose by $26.1 million. However, there was an increase in interest expenses on deposits by $29.7 million, leading to a net interest margin of 3.55%.
| Interest Income Breakdown | Q2 2024 (in millions) | Q2 2023 (in millions) |
|---|---|---|
| Total Interest Income | $264.6 | $251.8 |
| Interest Income on Loans | $269.2 | $242.7 |
| Interest Income on Investment Securities | $71.4 | $74.6 |
Non-Interest Income
Non-interest income for the second quarter of 2024 was $152.2 million, up from $147.6 million in Q2 2023, primarily due to increased trust fees and deposit account fees. Notably, trust fees increased by 10.6% to $52.3 million.
| Non-Interest Income Components | Q2 2024 (in millions) | Q2 2023 (in millions) | Change (%) |
|---|---|---|---|
| Trust Fees | $52.3 | $47.3 | 10.6% |
| Bank Card Transaction Fees | $47.5 | $49.7 | (4.5%) |
| Deposit Account Charges | $25.3 | $22.6 | 11.9% |
Expenses
Non-interest expenses for Q2 2024 totaled $232.2 million, reflecting a 2.0% increase compared to $227.6 million in Q2 2023. Major contributors to this increase included higher salaries and data processing expenses.
| Expense Components | Q2 2024 (in millions) | Q2 2023 (in millions) |
|---|---|---|
| Salaries and Employee Benefits | $149.1 | $145.4 |
| Data Processing and Software | $31.5 | $28.7 |
| Net Occupancy | $12.5 | $13.0 |
| Total Non-Interest Expense | $232.2 | $227.6 |
Credit Quality
As of June 30, 2024, total loans amounted to $17.1 billion, with net charge-offs of $9.8 million in Q2 2024, representing an annualized rate of 0.23%. The allowance for credit losses was $97.5 million, equating to 0.57% of total loans.
| Credit Quality Metrics | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Loans (in billions) | $17.1 | $17.2 |
| Net Charge-Offs (in millions) | $9.8 | $6.5 |
| Allowance for Credit Losses (in millions) | $97.5 | $90.0 |
Capital Position
As of June 30, 2024, CBSH's total equity was $3.16 billion, with a Tier I common risk-based capital ratio of 16.19%. The tangible common equity to tangible assets ratio stood at 9.82%.
| Capital Metrics | June 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Equity (in billions) | $3.16 | $2.96 |
| Tier I Common Capital Ratio (%) | 16.19 | 14.75 |
| Tangible Common Equity to Tangible Assets (%) | 9.82 | 7.70 |
Loan Portfolio Composition
The loan portfolio is diversified across various sectors, with commercial loans comprising a significant portion. As of June 30, 2024, the breakdown of loans is as follows:
| Loan Type | Amount (in millions) | Percentage of Total Loans (%) |
|---|---|---|
| Commercial Loans | $6,019 | 35.2% |
| Consumer Loans | $2,078 | 12.2% |
| Real Estate Loans | $3,719 | 21.7% |
| Home Equity Loans | $331 | 1.9% |
| Credit Card Loans | $566 | 3.3% |
| Total Loans | $17,164 | 100% |
How Commerce Bancshares, Inc. (CBSH) Makes Money
Revenue Sources
Commerce Bancshares, Inc. generates revenue primarily through two main avenues: net interest income and non-interest income.
Net Interest Income
In the second quarter of 2024, net interest income reached $262.2 million, marking an increase of 5.1% compared to $249.5 million in the same quarter of 2023. For the first six months of 2024, net interest income totaled $511.2 million, up 2.0% from $501.2 million in the prior year.
| Period | Net Interest Income (in millions) | Year-over-Year Change (%) |
|---|---|---|
| Q2 2024 | $262.2 | 5.1 |
| H1 2024 | $511.2 | 2.0 |
| Q2 2023 | $249.5 | - |
| H1 2023 | $501.2 | - |
The growth in net interest income was primarily attributed to an increase in interest income on loans, which saw a rise of $26.5 million (10.9%) in Q2 2024, driven by an increase in the average rate earned and a growth in average loan balances.
Non-Interest Income
Non-interest income for the second quarter of 2024 amounted to $152.2 million, a 3.1% increase from $147.6 million in Q2 2023. For the first half of 2024, non-interest income totaled $301.1 million, reflecting a 5.6% increase compared to $285.2 million in the same period of 2023.
| Non-Interest Income Components (Q2 2024) | Amount (in thousands) | Year-over-Year Change (%) |
|---|---|---|
| Trust Fees | $52,291 | 10.6 |
| Bank Card Transaction Fees | $47,477 | (4.5) |
| Deposit Account Charges | $25,325 | 11.9 |
| Consumer Brokerage Services | $4,478 | (4.3) |
| Total Non-Interest Income | $152,244 | 3.1 |
The increase in non-interest income was driven by higher trust fees and deposit account charges, offset by a decline in bank card transaction fees.
Investment Securities
Net gains from investment securities for Q2 2024 were $3.2 million, which included significant gains on equity investments of $178.2 million but were offset by losses on the sale of available-for-sale debt securities amounting to $179.1 million.
Expense Management
Non-interest expenses for the second quarter of 2024 were $232.2 million, up 2.0% from $227.6 million in Q2 2023. The increase was primarily due to higher salaries and data processing expenses.
Profitability Metrics
As of June 30, 2024, Commerce Bancshares reported a net income attributable to the company of $139.6 million, representing a 9.2% increase from $127.8 million in the same quarter of 2023. The diluted earnings per share for Q2 2024 were $1.07, up from $0.97 in the prior year.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Income (in millions) | $139.6 | $127.8 |
| Earnings per Share | $1.07 | $0.97 |
Commerce Bancshares continues to maintain a strong financial position, with total assets of $30.6 billion as of June 30, 2024, down from $31.7 billion at the end of 2023.
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