Commerce Bancshares (CBSH) of Kansas City, Mo., expects to sell $150 million in preferred stock, which it will use to buy back $200 million of its common stock.

The $22 billion-asset bank said Thursday that it will sell 6 million of its series B preferred shares at $25 apiece.

The offering, which is expected to close on June 19, is being jointly managed by Morgan Stanley; Merrill Lynch, Pierce, Fenner & Smith; and J.P. Morgan Securities.

Commerce will then use the proceeds to repurchase $200 million of its common stock, under an agreement reached Thursday with Morgan Stanley. Commerce expects a "substantial majority of shares" to be delivered on June 19, it said in a press release. The remaining shares will be delivered within 12 months.

Commerce operates 204 full-service branches in the central U.S., including Missouri, Kansas, Illinois, Oklahoma and Colorado.

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