7. Common Stock

Presented below is a summary of the components used to calculate basic and diluted income per share. The Company applies the two-class method of computing income per share, as nonvested share-based awards that contain nonforfeitable rights to dividends are considered securities which participate in undistributed earnings with common stock. The two-class method requires the calculation of separate income per share amounts for the nonvested share-based awards and for common stock. Income per share attributable to common stock is shown in the table below. Nonvested share-based awards are further discussed in Note 11.




	For the Three Months Ended March 31
(In thousands, except per share data)	2012		2011
Basic income per common share:
Net income attributable to Commerce Bancshares, Inc.	$	65,799	$	60,453
Less income allocated to nonvested restricted stockholders	562		404
Net income available to common stockholders	$	65,237	$	60,049
Distributed income	$	20,247	$	19,907
Undistributed income	$	44,990	$	40,142
Weighted average common shares outstanding	88,221		90,791
Distributed income per share	$	.23	$	.22
Undistributed income per share	.51		.44
Basic income per common share	$	.74	$	.66
Diluted income per common share:
Net income attributable to Commerce Bancshares, Inc.	$	65,799	$	60,453
Less income allocated to nonvested restricted stockholders	561		403
Net income available to common stockholders	$	65,238	$	60,050
Distributed income	$	20,247	$	19,907
Undistributed income	$	44,991	$	40,143
Weighted average common shares outstanding	88,221		90,791
Net effect of the assumed exercise of stock-based awards - based on
the treasury stock method using the average market price for the respective periods	335		387
Weighted average diluted common shares outstanding	88,556		91,178
Distributed income per share	$	.23	$	.22
Undistributed income per share	.51		.44
Diluted income per common share	$	.74	$	.66

The diluted income per common share computations for the three months ended March 31, 2011 excluded 861 thousand in unexercised stock options and stock appreciation rights because their inclusion would have been anti-dilutive to income per share. Nearly all unexercised options and rights were dilutive for the comparable period in 2012.