Commerce Bancshares to Acquire St. Louis Investment Bank Nolan & Associates

KANSAS CITY, Mo. — Commerce Bancshares, the parent company of Commerce Bank, announced on Monday, June 3, 2024, that it has entered into a definitive agreement to acquire Nolan & Associates, a St. Louis-based boutique investment banking firm. The financial terms of the all-cash transaction were not disclosed.

The acquisition marks a significant strategic move for Commerce, a prominent regional bank holding company with over $30 billion in assets, as it seeks to expand its suite of services for middle-market commercial clients. Nolan & Associates, founded in 1976, has built a four-decade reputation for providing sell-side merger and acquisition advisory services to privately-held and family-owned businesses, typically with annual revenues between $20 million and $250 million.

This acquisition is part of a larger trend we're seeing where commercial banks are bolting on investment banking capabilities to become a one-stop shop for business owners. While convenient, this model can create inherent conflicts of interest. When your commercial banker is also your M&A advisor, their advice might be influenced by the bank's other interests, such as providing acquisition financing for the buyer or retaining the combined company's deposits. We believe business owners preparing for a sale, often the single most important transaction of their lives, deserve truly independent guidance. Ensuring you have an unconflicted team focused solely on maximizing your value is critical. This is the core of the mergers and acquisitions advisory work we do for our clients. To understand how independent advisory can protect your interests during a sale, contact C&S Finance Group LLC at csfinancegroup.com for a confidential consultation.

The deal is designed to integrate Nolan’s specialized M&A expertise directly into Commerce Bank’s existing commercial banking and wealth management platforms. For Commerce, this provides a valuable new source of non-interest fee income and deepens its relationships with business owners. By offering services that span the entire lifecycle of a business—from initial lending and cash management to succession planning and an eventual sale—Commerce aims to become an indispensable partner to its clients.

In a statement regarding the acquisition, Commerce executives highlighted the strategic fit between the two Missouri-based firms. The move allows Commerce to more effectively compete with larger national banks that have long offered integrated commercial and investment banking services. By bringing Nolan’s team in-house, Commerce can now directly offer sophisticated advisory services that were previously outside its core offerings, capturing revenue that might have otherwise gone to independent M&A firms.

For Nolan & Associates, the acquisition provides access to Commerce Bank’s extensive network of middle-market clients across the Midwest and beyond. Joining a well-capitalized, publicly traded bank holding company offers the boutique firm significant resources for growth and provides a stable platform for its employees and partners. The leadership of Nolan & Associates is expected to remain with the firm, which will operate as a subsidiary of Commerce Bank, ensuring continuity for its existing clients and pipeline of deals.

This transaction reflects a broader consolidation trend within the financial services industry. Regional and super-regional banks are increasingly looking to acquire specialized advisory firms to build out their capabilities. As net interest margins face pressure from fluctuating interest rate environments, banks are placing a greater emphasis on generating consistent fee-based income from services like wealth management, treasury services, and, increasingly, investment banking.

The primary beneficiaries of this strategy are the owners of mid-sized businesses who form the core of Commerce Bank's commercial portfolio. These clients will now have a streamlined path to engage M&A advisors when considering a sale, divestiture, or other strategic transaction. The integration promises a seamless experience, where a business owner’s long-time banker can facilitate an introduction to an in-house M&A team that already understands the company’s financial history and relationship with the bank.

The transaction is subject to customary closing conditions, including regulatory approval, and is expected to be finalized in the third quarter of 2024. Until the deal closes, both Commerce Bancshares and Nolan & Associates will continue to operate as independent entities.

Moving forward, market observers will be watching the integration of Nolan & Associates into the Commerce Bank ecosystem. The success of the acquisition will depend on how well the entrepreneurial culture of a boutique M&A firm meshes with the more regulated structure of a large bank. Furthermore, this deal may pressure other regional banks in the Midwest to evaluate their own M&A advisory capabilities and consider similar acquisitions to remain competitive.