Jefferies Increases Estimates On Commerce Bancshares Following Sold Q4 Results

Jefferies raises its 2011 EPS estimate on Commerce Bancshares CBSH to $2.70 (from $2.60), 2012 goes to $3.00 (from $2.95), and 2013 goes to $3.30 (from $3.15). Jefferies comments that while margin improvement from improved securities yield, lower FHLB funding costs, and improved funding mix are sustainable, securities balances continued to grow in 4Q. It's margin estimates get a slight boost from the higher starting point, but continued deposit inflows are likely to weigh on the margin. Jefferies says improved corporate card fees have helped offset interchange. Corporate card income has grown to become a significant portion of bank card fees, and grew at a 45% annual clip in 2010. Strong growth should help to offset fee declines from interchange regulation. Jefferies has a Hold rating and $42 PT on CBSH CBSH closed Thursday at $40.88