Commerce Bancshares (NASDAQ: CBSH) uses Visa gain to fund $911M portfolio shift
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Commerce Bancshares reported that Visa accepted its tender of 411,723 Visa Class B-2 shares in an exchange for Visa Class B-3 and Class C shares. As a result, the company marked its Visa Class C stock to fair value and recorded a pre-tax gain of $99 million, based on the Visa Class A closing price of $318.79 on May 8, 2026.
The company also approved a plan to sell approximately $911 million of available-for-sale debt securities yielding about 2.5%, expecting a pre-tax loss of about $95 million. It plans to reinvest proceeds into interest-earning assets around 4.0%, which it expects will raise net interest income, lower earnings volatility, reduce interest-rate exposure, and improve balance sheet flexibility. Overall, the combined impact of the gain and repositioning is expected to be approximately neutral to the Common Equity Tier 1 capital ratio.
Positive
- None.
Negative
- None.
Insights
Large Visa gain funds a securities loss, with CET1 kept neutral.
Commerce Bancshares realized a one-time pre-tax gain of $99 million by marking Visa Class C shares to fair value after exchanging 411,723 Visa Class B-2 shares. This gain is tied to the Visa Class A price of $318.79 on May 8, 2026.
The bank plans to sell about $911 million of available-for-sale debt securities yielding roughly 2.5%, recognizing an estimated pre-tax loss of $95 million, and reinvest into assets around 4.0%. Management states this should increase net interest income, reduce earnings volatility, and lessen interest-rate sensitivity while improving balance sheet flexibility.
The company expects the combination of the Visa gain and securities repositioning to be approximately neutral for its Common Equity Tier 1 ratio. Actual loss timing and reinvestment results will depend on market conditions and future Visa Class A pricing, so future filings will show how closely outcomes track these expectations.
8-K Event Classification
Item 8.01 — Other Events
1 item
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Key Figures
Visa shares tendered: 411,723 shares
Pre-tax gain on Visa stock: $99 million
Visa Class A reference price: $318.79 per share
+4 more
7 metrics
Visa shares tendered
411,723 shares
Visa Class B-2 common stock exchanged
Pre-tax gain on Visa stock
$99 million
Marking Visa Class C to fair value
Visa Class A reference price
$318.79 per share
Closing price on May 8, 2026
AFS securities to be sold
$911 million amortized cost
Available-for-sale debt securities
Yield on securities sold
2.5%
Yield on AFS securities to be sold
Expected pre-tax loss
$95 million
From sale of AFS debt securities
Target reinvestment yield
4.0%
Expected yield on new interest-earning assets
Key Terms
Exchange Offer, marked its Visa Class C common stock to fair value, available for sale debt securities portfolio, net interest income, +1 more
5 terms
Exchange Offer financial
"Visa’s acceptance of its tendered 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 (“Exchange Offer”)."
An exchange offer is a proposal where a company asks investors to swap existing securities, like bonds or shares, for new ones, often with different terms or maturity dates. It matters to investors because it can affect the value of their holdings and the company's financial strategy, potentially providing benefits like better interest rates or reduced debt.
marked its Visa Class C common stock to fair value financial
"As a result of the Exchange Offer, the Company marked its Visa Class C common stock to fair value and recorded a pre-tax gain of $99 million"
available for sale debt securities portfolio financial
"The Company also approved a plan to reposition a portion of its available for sale debt securities portfolio, subsequent to the successful close of the Exchange Offer"
net interest income financial
"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 its balance sheet."
Net interest income is the difference between the interest a financial institution earns on loans and investments and the interest it pays on deposits and borrowings. It matters to investors because it is a primary source of profit for banks and similar firms — like the gross margin on a store’s trade — and changes with loan growth, deposit costs and interest rates, so it signals core earning power and sensitivity to rate moves.
Common Equity Tier 1 ratio financial
"The cumulative impact of the gain on Visa stock as a result of the Exchange Offer and the anticipated securities reposition is expected to be approximately neutral to the Company’s Common Equity Tier 1 ratio."
The common equity tier 1 ratio is a measure of a bank's financial strength, showing how much high-quality core capital it has compared to its total risk-weighted assets. Think of it as a safety buffer or cushion that helps ensure the bank can withstand economic shocks. For investors, a higher ratio indicates a stronger, more resilient bank, making it a key indicator of its financial health.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 12, 2026
(Exact name of registrant as specified in its charter)
| (State of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(816 ) 234-2000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||
| Title of class | Trading symbol(s) | Name of exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01 - Other Events
Commerce Bancshares, Inc. (the “Company”) received notification of Visa Inc.’s (“Visa”) acceptance of its tendered 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 (“Exchange Offer”). The tender was previously announced by the Company on Form 8-K dated April 27, 2026 and additional information regarding the Visa Class B-2 common shares exchange offer is provided in Item 2 of the Company’s Form 10-Q for the quarterly period ending March 31, 2026. A full description of the terms of the Exchange Offer is set forth in Visa’s related Issuer Tender Offer Statement on Schedule TO and Prospectus, each dated April 6, 2026, publicly filed with the U. S. Securities and Exchange Commission.
As a result of the Exchange Offer, the Company marked its Visa Class C common stock to fair value and recorded a pre-tax gain of $99 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 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.
The Company also approved a plan to reposition a portion of its available for sale debt securities portfolio, subsequent to the successful close of the Exchange Offer, through the sale of securities with an amortized cost of approximately $911 million. The securities that the Company plans to sell have a yield of approximately 2.5%, which is expected to result in a pre-tax loss of approximately $95 million. The Company expects to reinvest the proceeds into higher yielding interest earning assets of 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 its balance sheet. The cumulative impact of the gain on Visa stock as a result of the Exchange Offer and the anticipated securities reposition is expected to be approximately neutral to the Company’s Common Equity Tier 1 ratio. The timing and amount of the loss ultimately realized on the available for sale debt securities and the reinvestment assumptions may depend on a number of factors, including market conditions, the future price of Visa Class A common stock, and other considerations.
Exhibits
99.1 Press release dated May 12, 2026 announcing Visa exchange offer acceptance and results
104 The XBRL tags on the cover page of this Form 8-K are embedded within the Inline XBRL document.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| COMMERCE BANCSHARES, INC. | |||||||||||
| By: | /s/ Paul A. Steiner | ||||||||||
| Paul A. Steiner | |||||||||||
Controller (Chief Accounting Officer) | |||||||||||
Date: May 12, 2026
