Commerce Bancshares, Inc. Announces Visa Inc.’s Acceptance of Class B-1 Common Stock and Investment Securities Repositioning
May 08 2024 - 5:46PM
Business Wire
Commerce Bancshares, Inc. (NASDAQ: CBSH) announced today that
Visa Inc. has accepted the company’s tender of its 823,447 shares
of Visa Class B-1 common stock in exchange for a combination of
Visa Class B-2 common stock and Visa Class C common stock.
As a result of the exchange, Commerce marked its Visa Class C
common stock to fair value and recorded a gain of $175.5 million
based on the conversion privilege of the Visa Class C common stock
and the closing price of Visa Class A common stock on May 3, 2024
of $268.49 per share. The company’s Visa Class C shares are
expected to continue to be marked to fair value on a recurring
basis using the Visa Class A 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 $1.0 billion. The
securities that the company plans to sell have a yield of
approximately 2.0%, which is expected to result in a loss of
approximately $165 million, and the company expects to reinvest the
proceeds mostly into investment securities yielding approximately
4.6%. The company expects the repositioning to increase net
interest income, reduce interest rate risk to lower rates, and
improve the quality of the Company's pledgeable investment
securities. The timing and amount of the loss ultimately realized
on the available for sale debt securities and the reinvestment
assumptions may depend on many considerations, including market
conditions, the future price of Visa Class A common stock, and
other factors.
Details of the exchange and repositioning can be found on pages
21 and 22 of Commerce Bancshares, Inc.’s Form 10-Q, for the quarter
ending March 31, 2024.
About Commerce Bank
With $30.4 billion in assets1, Commerce Bancshares, Inc.
(NASDAQ: CBSH) is a regional bank holding company offering a full
line of banking services through its subsidiaries, including
payment solutions, investment management and securities brokerage.
One of its subsidiaries, Commerce Bank, leverages nearly 160 years
of proven strength and experience to help individuals and
businesses solve financial challenges. In addition to offering
payment solutions across the U.S., Commerce Bank currently operates
full-service banking facilities across the Midwest including the
St. Louis and Kansas City metropolitan areas, Springfield, Central
Missouri, Central Illinois, Wichita, Tulsa, Oklahoma City, and
Denver. Beyond the Midwest, Commerce also maintains commercial
offices in Dallas, Houston, Cincinnati, Nashville, Des Moines,
Indianapolis, and Grand Rapids and wealth offices in Dallas,
Houston and Naples. Commerce delivers high-touch service and
sophisticated financial solutions at regional branches, commercial
and wealth offices, ATMs, online, mobile and through a 24/7
customer service line. Learn more at www.commercebank.com.
1As of March 31, 2024
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version on businesswire.com: https://www.businesswire.com/news/home/20240508735736/en/
Matt Burkemper (314) 746-7485
Matthew.Burkemper@CommerceBank.com
Commerce Bancshares (NASDAQ:CBSH)
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