13. Common Stock

On December 19, 2011, the Company distributed a 5% stock dividend on its $5 par common stock for the eighteenth consecutive year. All per share data in this report has been restated to reflect the stock dividend.

Basic income per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted income per share gives effect to all dilutive potential common shares that were outstanding during the year. Presented below is a summary of the components used to calculate basic and diluted income per share, which have been restated for all stock dividends.

The Company applies the two-class method of computing income per share. Under current guidance, 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 10 on Stock-Based Compensation.




(In thousands, except per share data)	2011		2010		2009
Basic income per common share:
Net income attributable to Commerce Bancshares, Inc.	$	256,343	$	221,710	$	169,075
Less income allocated to nonvested restricted stockholders	1,846		1,208		741
Net income available to common stockholders	$	254,497	$	220,502	$	168,334
Distributed income	$	78,556	$	77,796	$	74,384
Undistributed income	$	175,941	$	142,706	$	93,950
Weighted average common shares outstanding	89,874		91,326		89,478
Distributed income per share	$	.87	$	.85	$	.83
Undistributed income per share	1.96		1.56		1.05
Basic income per common share	$	2.83	$	2.41	$	1.88
Diluted income per common share:
Net income attributable to Commerce Bancshares, Inc.	$	256,343	$	221,710	$	169,075
Less income allocated to nonvested restricted stockholders	1,842		1,204		740
Net income available to common stockholders	$	254,501	$	220,506	$	168,335
Distributed income	$	78,556	$	77,796	$	74,384
Undistributed income	$	175,945	$	142,710	$	93,951
Weighted average common shares outstanding	89,874		91,326		89,478
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	328		425		351
Weighted average diluted common shares outstanding	90,202		91,751		89,829
Distributed income per share	$	.87	$	.85	$	.83
Undistributed income per share	1.95		1.55		1.04
Diluted income per common share	$	2.82	$	2.40	$	1.87

The diluted income per common share computation for the years ended December 31, 2011, 2010 and 2009 excludes 1.1 million, 1.8 million and 3.0 million, respectively, in unexercised stock options and stock appreciation rights because their inclusion would have been anti-dilutive to income per share.

The table below shows activity in the outstanding shares of the Company's common stock during the past three years. Shares in the table below are presented on an historical basis and have not been restated for the annual 5% stock dividends.




	Years Ended December 31
(In thousands)	2011		2010		2009
Shares outstanding at January 1	86,624		83,008		75,791
Issuance of stock:
Awards and sales under employee and director plans	724		603		394
Stock offering	—		—		2,895
5% stock dividend	4,231		4,122		3,949
Purchases of treasury stock	(2,622	)	(1,103	)	(16	)
Other	(5	)	(6	)	(5	)
Shares outstanding at December 31	88,952		86,624		83,008

The Company maintains a treasury stock buyback program authorized by its Board of Directors. At December 31, 2011, 2,999,300 shares were available for purchase under the current Board authorization.