Sunday, July 22, 2018

Commerce Bancshares Executing At A Very High Level

As the quarterly earnings cycle starts up, Commerce Bancshares (CBSH) has established a pretty high mark for other mid-cap banks to beat. That’s nothing especially new for this well-run Midwestern bank, but the key issue remains valuation. While Commerce Bancshares has been operationally excellent for some time, I believe the high valuation has been a headwind and at least partly explains why the shares have lagged many regional peers in recent years.

Commerce Bancshares has an excellent net beta and good management, and is likely to accumulate a large amount of excess capital in the coming years, but the combination of weak balance sheet growth and still-high valuation limits my enthusiasm for buying the shares.

Read more here:
Commerce Bancshares Executing At A Very High Level

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