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U.S. Bancorp buying stock
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June 9, 1998: 3:31 p.m. ET
'Confident in earning power,' holding company to buy back own shares
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NEW YORK (CNNfn) - U.S. Bancorp said Tuesday its directors have authorized the repurchase of up to $2.5 billion of the company's common stock for the period ending March 31, 2000.
As of March 31, 1998, there were about 742.5 million shares in the Minneapolis-based bank holding company outstanding.
"We are repurchasing stock because of our confidence in the earning power of the new combined U.S. Bancorp, which we expect will generate capital in excess of our needs," said John Grundhofer, president and chief executive officer.
Some analysts had thought that the fact that U.S. Bancorp did not announce a share repurchase sooner was a sign that it was seeking to merge with or acquire Wells Fargo, where Grundhofer was once vice chairman.
SEC policy prohibits share repurchases for a certain period after mergers are completed.
But the timing of the company's announcement had nothing to do with the $34 billion Wells/Norwest merger announced yesterday, vice chairman Richard Zona told Reuters.
"There's no cause-and-effect situation here at all," Zona said, adding that "this is simply consistent with our strategy to return excess capital to our shareholders."
U.S. Bancorp, with $70 billion in assets, is the 15th largest bank holding company in the United States. The company is the largest provider of Visa corporate and purchasing cards in the world, and it is one of the largest providers of corporate trust services in the United States.
In afternoon trading, the company's stock (USB) was up 1/16 at 40-1/16.
--from staff and wire reports
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U.S. Bancorp
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