Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2014

Regulatory Capital Requirements [Abstract]

Regulatory Capital Requirements

Regulatory Capital Requirements

The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and additional discretionary actions by regulators that could have a direct material effect on the Company’s financial statements. The regulations require the Company to meet specific capital adequacy guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital classification is also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of Tier I capital to total average assets (leverage ratio), and minimum ratios of Tier I and Total capital to risk-weighted assets (as defined). To meet minimum, adequately capitalized regulatory requirements, an institution must maintain a Tier I capital ratio of 4.00%, a Total capital ratio of 8.00% and a leverage ratio of 4.00%. The minimum required ratios for well-capitalized banks (under prompt corrective action provisions) are 6.00% for Tier I capital, 10.00% for Total capital and 5.00% for the leverage ratio.

The following tables show the capital amounts and ratios for the Company (on a consolidated basis) and the Bank, together with the minimum and well-capitalized capital requirements, at the last two year ends.

	Actual				Minimum Capital Requirement				Well-Capitalized Capital Requirement
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2014
Total Capital (to risk-weightedassets):
Commerce Bancshares, Inc. (consolidated)	$	2,304,206	14.86	%	$	1,240,732	8.00	%	N.A.		N.A.
Commerce Bank	2,026,666		13.16		1,232,378		8.00		$	1,540,472	10.00	%
Tier I Capital (to risk-weightedassets):
Commerce Bancshares, Inc. (consolidated)	$	2,131,169	13.74	%	$	620,366	4.00	%	N.A.		N.A.
Commerce Bank	1,869,053		12.13		616,189		4.00		$	924,283	6.00	%
Tier I Capital (to adjusted quarterly average assets):
(Leverage Ratio)
Commerce Bancshares, Inc. (consolidated)	$	2,131,169	9.36	%	$	910,977	4.00	%	N.A.		N.A.
Commerce Bank	1,869,053		8.24		907,807		4.00		$	1,134,759	5.00	%
December 31, 2013
Total Capital (to risk-weightedassets):
Commerce Bancshares, Inc. (consolidated)	$	2,239,636	15.28	%	$	1,172,843	8.00	%	N.A.		N.A.
Commerce Bank	1,971,850		13.55		1,164,469		8.00		$	1,455,586	10.00	%
Tier I Capital (to risk-weightedassets):
Commerce Bancshares, Inc. (consolidated)	$	2,061,761	14.06	%	$	586,421	4.00	%	N.A.		N.A.
Commerce Bank	1,809,231		12.43		582,234		4.00		$	873,351	6.00	%
Tier I Capital (to adjusted quarterly average assets):
(Leverage Ratio)
Commerce Bancshares, Inc. (consolidated)	$	2,061,761	9.43	%	$	874,673	4.00	%	N.A.		N.A.
Commerce Bank	1,809,231		8.31		871,050		4.00		$	1,088,812	5.00	%

At December 31, 2014, the Company met all capital requirements to which it is subject, and the Bank’s capital position exceeded the regulatory definition of well-capitalized.

In 2013 and 2014, the U.S. bank regulators approved the final rules implementing the Basel Committee on Banking Supervision's capital guidelines for U.S. banks. Under the final rules, known as Basel III, minimum requirements will increase for both the quantity and quality of capital held by the Company. The rules include a new common equity Tier I capital to risk-weighted assets minimum ratio of 4.5%, raise the minimum ratio of Tier I capital to risk-weighted assets from 4.0% to 6.0%, require a minimum ratio of Total capital to risk-weighted assets of 8.0%, and require a minimum Tier 1 leverage ratio of 4.0%. A new capital conservation buffer, comprised of common equity Tier I capital, is also established above the regulatory minimum capital requirements. This capital conservation buffer will be phased in beginning January 1, 2016 at .625% of risk-weighted assets and increases each subsequent year by an additional .625% until reaching its final level of 2.5% on January 1, 2019. Strict eligibility criteria for regulatory capital instruments were also implemented under the final rules.

The phase-in period for the final rules will begin for the Company on January 1, 2015, with full compliance with all of the final rule's requirements phased in over a multi-year schedule and should be fully phased-in by January 1, 2019. Management believes that the Company's capital levels will remain characterized as "well-capitalized" under the new rules.