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It has been about a month since the last earnings report for Commerce Bancshares (CBSH). Shares have lost about 1.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Commerce due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Commerce Bancshares' Q4 Earnings & Revenues Beat, Provisions Soar
Commerce Bancshares reported fourth-quarter 2024 earnings per share of $1.01, which surpassed the Zacks Consensus Estimate of 94 cents. The bottom line also jumped 27.8% from the prior-year quarter.
Results benefited from a rise in NII and non-interest income. Also, stable adjusted expenses posed a tailwind. However, a substantial jump in provisions hurt the results to some extent.
Net income attributable to common shareholders was $136.1 million, up 24.6% year over year. Our estimate for the metric was $117.6 million.
For 2024, earnings were $3.87 per share, lagging the consensus estimate of $3.91 but growing 11.8% year over year. Net income attributable to common shareholders was $526.3 million, up 10.3%.
Revenues Improve, Adjusted Expenses Stable
Total revenues in the quarter were $422.1 million, up 7.3% year over year. The top line outpaced the Zacks Consensus Estimate of $415.1 million.
For 2024, total revenues grew 5.4% from the prior year to $1.66 billion. The top line beat the consensus estimate of $1.65 billion.
NII was $266.6 million, rising 7.3% from the year-ago quarter. Our estimate for NII was $257.2 million.
Net yield on interest-earning assets expanded 32 basis points (bps) to 3.49%. Our estimate for the metric was 3.50%.
Non-interest income was $155.4 million, up 7.3%. The rise was driven by higher trust fees, capital market fees and consumer brokerage services. Our estimate for non-interest income was $156.8 million.
Non-interest expenses decreased 6.6% to $235.7 million. The absence of the FDIC special assessment was the primary reason for the decline. Excluding this charge, expenses were relatively stable. We expected expenses of $255.5 million.
Net investment securities gain was $0.98 million compared with $7.6 million in the prior-year quarter.
The efficiency ratio declined to 55.77% from 63.80% in the year-ago quarter. A fall in the efficiency ratio indicates an improvement in profitability.
As of Dec. 31, 2024, net loans were $17.06 billion, up almost 1% from the prior quarter end. Total deposits were $25.29 billion, which rose marginally. Our estimates for net loans and total deposits were $17.61 billion and $25.79 billion, respectively.