- Key insight: Commerce Bancshares, the Kansas City, Missouri-based parent company of Commerce Bank, sees its first bank M&A deal in more than a decade as an opportunity to keep growing its large wealth management business.
- Supporting data: After the acquisition of FineMark Holdings, Commerce has $90 billion of assets under administration, up from $82 billion earlier.
- Forward look: One analyst said it will be worth watching how well Commerce can retain the selling bank’s client base.
Commerce Bancshares, which already had a large private banking and wealth management business, is primed to grow that segment further now that its first bank acquisition in 12 years is complete.
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The Kansas City, Missouri-based holding company of Commerce Bank finalized the $585 million all-stock purchase of FineMark Holdings on New Year’s Day. The deal, which was announced in June, marked
The addition of the $4 billion-asset FineMark, which ran a high-touch, full-service private bank for high-net-worth individuals, including 300 professional athletes, builds on Commerce’s existing footprint in Florida and paves the way for it to do business in Arizona and South Carolina. The deal includes 13 offices: nine in Southwest Florida, where Commerce’s trust bank already does business; one in Jupiter, Florida; one in Charleston, South Carolina; and two in Scottsdale, Arizona. All are in high-growth areas with ample wealth management opportunities.
Even prior to the deal closing, Commerce generated about 13% of its total revenues from its wealth business. It’s betting on its ability to retain FineMark’s existing client base by offering a larger suite of wealth management products and services, and by making use of its bigger balance sheet to support the credit needs of FineMark’s customer base, Kemper told American Banker.
“I hope that what we are able to prove is that this is a combination of two great franchises that solidifies our standing as a leading wealth management and private banking franchise, and that extends our presence into some really attractive, high-growth markets,” Kemper said.
Commerce, which has about $36 billion of assets post-acquisition, has been building out its wealth management business for more than two decades. It tries to differentiate itself by offering a full range of services, including financial planning, trust and estate planning, institutional asset management and private banking, including specialty loans and premium insurance financing.
The business, which is called Commerce Trust, has wealth offices in Naples, Florida; Houston; and Dallas. As of Sept. 30, it had $82.2 billion of assets under administration, the bank said.
Including FineMark’s business, Commerce Trust now has $90 billion of assets under administration and ranks 15th among bank-managed trust companies based on its total assets under management, it said.
The agreement to buy FineMark, which was founded in 2007, was about five years in the making, as the two companies got to know one another, Kemper said. During that time, Commerce had been “quite active in terms of engagement and conversation” with other banks, particularly in some of its expansion markets, such as Texas, Colorado and Tennessee, he said.
Finding the right match took time. The wealth management business “is a major focus for us, and there just aren’t that many bank trust companies that are out there that would fit so seamlessly with us,” Kemper said.
Commerce is retaining the FineMark brand. Joseph Catti, who was FineMark’s chairman and CEO, is now the chairman of Commerce Trust and will continue to run FineMark as a division of Commerce. About 300 FineMark employees have shifted over to Commerce.
How well Commerce can hang onto FineMark’s client base will be worth watching in the coming quarters, Nathan Race, an analyst at Piper Sandler, told American Banker.
“The focus will be on client retention,” Race said in an interview. “It’s never a lay-up in acquisitions, but it helps that they’re keeping the brand. That will help them set themselves up for defending the client base, and then the question will be how much will they be able to grow.”
Commerce Bancshares
The systems conversion is expected to take place in the fourth quarter of 2026 or in early 2027, according to Commerce Trust President and CEO John Handy. The relatively long timeline is deliberate, he said.
“In a lot of these conversions, they really try to slam things together, and we don’t want that client experience for these high-value clients,” Handy said. “We’re taking our time. We’re being very methodical because we want to make sure this is a very seamless, well-done conversion.”
In addition to its wealth business, Commerce operates more than 140 bank branches across seven states, mostly in Missouri and Kansas. It has commercial banking offices in 11 states and a commercial payments services business offered nationwide, except in Alaska and Hawaii.
As for whether Commerce is interested in another bank M&A deal, especially in the current deregulatory environment, Kemper said it would be a matter of finding the right partner.
The company isn’t interested in buying banks “just for the sake of getting scale or growing our balance sheet,” he said. “We’re really looking for something that is a strategic fit.”