CBSH - Commerce Bancshares: Higher Provisioning To Undermine Top-Line Growth

• The loan portfolio grew strongly in the first quarter. This performance will likely continue in the year ahead on the back of economic factors.
• Thanks to the balance sheet positioning, the net interest income is moderately sensitive to rate changes. Therefore, the margin will most probably expand in the year ahead.
• Loan additions will likely lead to higher net provision expenses this year relative to last year.
• The year-end target price suggests a significant downside from the current market price. Further, CBSH is offering a low dividend yield.

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