What Happened?

Shares of regional banking company Commerce Bancshares (NASDAQ: CBSH) fell 4.7% in the afternoon session after the company reported third-quarter financial results that missed analyst expectations for both revenue and earnings per share. 

The bank reported earnings of $1.06 per share, falling short of the consensus estimate of $1.10. Revenue for the quarter came in at $441 million, missing forecasts of $446.4 million. Delving deeper into the results, other key metrics also failed to meet expectations. Net interest income, a crucial measure of a bank's core lending profitability, was $279.5 million, below the consensus estimate of $285.7 million. Additionally, the bank's efficiency ratio of 55.3%, a measure of expenses relative to revenue, was weaker than the 54.7% analysts had projected. Overall, the broad-based misses pointed to a challenging quarter for the bank.

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What Is The Market Telling Us

Commerce Bancshares’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Commerce Bancshares is down 12.9% since the beginning of the year, and at $53.78 per share, it is trading 24.1% below its 52-week high of $70.82 from November 2024. Investors who bought $1,000 worth of Commerce Bancshares’s shares 5 years ago would now be looking at an investment worth $1,178.

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