Commerce Bancshares (NASDAQ:CBSH) Misses Q3 Revenue Estimates

Regional banking company Commerce Bancshares (NASDAQ:CBSH) missed Wall Street’s revenue expectations in Q3 CY2025 as sales rose 3.7% year on year to $441 million. Its GAAP profit of $1.06 per share was 3.3% below analysts’ consensus estimates.

Is now the time to buy Commerce Bancshares? Find out by accessing our full research report, it’s free for active Edge members.

In making this announcement, John Kemper, Chief Executive Officer, said, “Commerce delivered another strong quarter, underscoring the resilience of our diversified operating model and the dedication of our talented team. Our third quarter results reflect steady loan balances, robust fee income, and disciplined expense management, all of which contributed to another period of high profitability.

Company Overview

Founded in 1865 during the post-Civil War economic boom, Commerce Bancshares (NASDAQGS:CBSH) is a Midwest-focused bank holding company that provides retail, commercial, and wealth management services to individuals and businesses.

Sales Growth

From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Luckily, Commerce Bancshares’s revenue grew at a decent 5.3% compounded annual growth rate over the last five years. Its growth was slightly above the average banking company and shows its offerings resonate with customers.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Commerce Bancshares’s annualized revenue growth of 4.5% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

This quarter, Commerce Bancshares’s revenue grew by 3.7% year on year to $441 million, falling short of Wall Street’s estimates.

Net interest income made up 61.7% of the company’s total revenue during the last five years, meaning lending operations are Commerce Bancshares’s largest source of revenue.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.

Key Takeaways from Commerce Bancshares’s Q3 Results

We struggled to find many positives in these results. Its net interest income missed and its EPS fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $56.65 immediately after reporting.

Commerce Bancshares underperformed this quarter, but does that create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.