I haven’t been very bullish on Commerce Bancshares (CBSH),
as I think the market assigns too high of a quality premium relative to
this Midwestern bank’s lackluster growth profile and
its-good-but-not-THAT-good credit quality. With the shares continuing to
underperform the market and the sector since my last update,
and second quarter results coming in weaker than I expected, I don’t
really see much reason to change my core stance on the bank.
Commerce
does have a lot of capital, too much really for its needs, and what
management plans for that capital is a meaningful potential driver down
the road. Whole bank acquisition would be an atypical move for this
bank, but acquiring fee-generating businesses in the payments area is a
possibility. As is, though, I think Commerce is an expensive, low-growth
bank without even much of a dividend to pay for patience.
Click here for more:
Weak Loan Growth And Tighter Spreads Pinching Commerce Bancshares
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