Commerce Bancshares Completes Visa Stock Exchange, Gains $99M
Commerce Bancshares (CBSH) announced that Visa (V) has accepted the company's tender of its 411,723 shares of Visa Class B-2 common stock in exchange for a combination of Visa Class B-3 common stock and Visa Class C common stock. The tender was previously announced by the company on a Form 8-K filed on April 27. "As a result of the Exchange Offer, the Company marked its Visa Class C common stock to fair value and recorded a gain of $99M, based on the conversion privilege of the Visa Class C common stock and the closing price of Visa Class A common stock on May 8, 2026, of $318.79 per share. The Company's Visa Class C common stock shares are expected to continue to be marked to fair value on a recurring basis using the Visa Class A common stock shares as evidence of orderly transactions between market participants for similar securities issued by Visa. Subsequent to the successful close of the Exchange Offer, the Company approved a plan to reposition a portion of its available-for-sale debt securities portfolio through the sale of securities with an amortized cost of approximately $911M. The securities that the Company plans to sell have a yield of approximately 2.5%, which is expected to result in a pretax loss of approximately $95 million. The Company expects to reinvest most of the proceeds into investment securities yielding approximately 4.0%. The Company expects the repositioning to increase net interest income, reduce earnings volatility, reduce exposure to changes in interest rates, and enhance the overall quality and flexibility of the balance sheet. The cumulative impact of the gain on Visa stock as a result of the Exchange Offer and the anticipated securities repositioning is expected to be approximately neutral to the Company's Common Equity Tier 1 ratio," Commerce stated.
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- Successful Stock Exchange: Commerce Bancshares successfully completed the exchange of 411,723 shares of Visa Class B-2 common stock for Class B-3 and Class C common stock, marking a significant advancement in the company's capital structure optimization.
- Significant Gains: The exchange resulted in a recorded gain of $99 million, based on the closing price of Visa Class A common stock at $318.79, demonstrating the company's flexibility and market adaptability in capital operations.
- Securities Portfolio Repositioning: The company plans to sell approximately $911 million in available-for-sale debt securities, which is expected to incur a pretax loss of $95 million, but reinvesting in securities yielding around 4.0% is anticipated to enhance net interest income.
- Enhanced Financial Stability: This repositioning is expected to reduce earnings volatility and improve the overall quality and flexibility of the balance sheet, although the impact on the Common Equity Tier 1 ratio is expected to be neutral, reflecting the company's cautious approach to risk management.

- Share Acquisition: Strategic Value Bank Partners initiated a position in OceanFirst Financial Corp. by acquiring 627,333 shares valued at $11.6 million in Q1 2026, reflecting confidence in the company, particularly in light of the upcoming merger.
- Merger Outlook: The merger with Flushing Financial is expected to close by June 1, 2026, resulting in combined assets of approximately $23 billion and projected EPS accretion of about 16% by 2027, significantly enhancing the company's competitive position in the market.
- Financial Performance: OceanFirst reported a net income of $20.5 million in Q1 2026, exceeding analyst expectations, with net interest income rising 11% year-over-year to $96.4 million, indicating robust performance leading into the merger and laying a solid foundation for future growth.
- Investment Strategy: The acquisition by Strategic Value Bank suggests a long-term optimistic view on the combined value of OceanFirst post-merger, despite the presence of other more attractive investment options in the market, highlighting a sustained focus on the regional banking sector.
- Repurchase Program Expansion: Commerce Bancshares' Board of Directors approved an increase of 2.5 million shares to the repurchase authorization, raising the total to 7.5 million shares, reflecting the company's ongoing commitment to disciplined capital management aimed at enhancing long-term shareholder value.
- Flexible Repurchase Strategy: The repurchase program allows for shares to be bought back through open market purchases and privately negotiated transactions, with management determining the timing and number of shares based on market conditions and other considerations, ensuring adaptability to market fluctuations.
- Financial Strength Assurance: By maintaining financial flexibility, the company can support its strategic priorities, demonstrating a prudent approach to capital allocation that enhances investor confidence in its future growth prospects.
- Regional Bank Strength: As a regional bank holding company with $35.7 billion in assets and over 160 years of experience, Commerce Bancshares continues to provide high-quality financial solutions through its extensive service network, further solidifying its market position.
- Exchange Offer Participation: Commerce Bancshares has engaged in an exchange offer initiated by Visa, intending to swap 411,723 shares of Visa Class B-2 common stock for Class B-3 and Class C common stock, with completion expected in the second quarter of 2026.
- Anticipated Gains: Should the exchange be successful, Commerce expects to record a significant gain in the second quarter of 2026, based on the conversion privileges of Class C common stock and the closing price of Visa Class A common stock.
- Portfolio Evaluation: Following the exchange, the company may evaluate its investment portfolio, considering repositioning a portion of its investment securities through the sale of available-for-sale debt securities, which could result in significant losses, while also purchasing securities at current market yields to enhance net interest income.
- Future Disclosures: Commerce will provide additional details regarding the tender exchange and any related portfolio actions in future filings or disclosures, ensuring transparency and maintaining investor confidence.

Visa Class B-2 Shares: Commerce Bank has tendered Visa Class B-2 shares for a combination with Visa Class B-3 common stock.
Visa Class C Common Stock: The transaction also involves Visa Class C common stock, indicating a strategic move in the company's stock structure.
- Quarterly Dividend Declaration: Commerce Bancshares has declared a quarterly dividend of $0.275 per share, consistent with previous distributions, indicating the company's ongoing ability to maintain stable cash flows, which is likely to attract income-seeking investors.
- Dividend Yield: The forward yield of 2.17% reflects the company's attractiveness in the current market environment, potentially enhancing investor interest in its stock and supporting price stability.
- Payment Schedule: The dividend is payable on June 23, with a record date of June 5 and an ex-dividend date also on June 5, providing investors with clear cash flow expectations that may bolster investor confidence.
- Financial Performance: Commerce Bancshares reported a GAAP EPS of $0.96, beating expectations by $0.14, with revenue of $475.69 million in line with forecasts, indicating robust profitability that may further enhance market confidence in its future growth prospects.






