Bank One Corp. spent $1.2 billion in the third quarter, bolstering its badly sagging stock and accounting for more than one-fifth of total stock buybacks by the nation's 25 largest banks.

During the period, Bank One's shares fell more than 38% after it said it would not meet earnings projections. The statistics, compiled by Keefe, Bruyette & Woods Inc., do not include any activity in the fourth quarter, when Bank One again stunned the market with bad news about its earnings, causing its stock to sink further. Bank One and three others - Bank of America Corp., Bank of New York and Chase Manhattan Corp. - accounted for more than two-thirds of bank stocks repurchased, in terms of dollars.

The $5.7 billion spent by the top-25 U.S. banks to buy back shares in the third quarter was the highest in more than two years. The share repurchases accelerated the pace of the first half of the year: Banking companies spent $5 billion in the second quarter, and $5.1 billion in the first.

Buyback activity this year marks a return to what typically had been the top of a normal range of repurchasing. Banks last year - in the aftermath of a merger wave - were slow to repurchase stock because of a Securities and Exchange Commission rule that bars companies from buying back stock for six months after a merger that uses pooling-of-interests accounting.

Aside from Bank One, other banks that made big repurchases included: Bank of America, $1.1 billion; Bank of New York, $850 million; Chase, $780 million; Wachovia Corp., $546 million; Mellon Financial Corp., $225 million; and Firstar Corp., $210 million.

Bank One's board authorized management to buy back 65 million shares in May. More than half that was used in the third quarter, but it is not clear how much, if any, of the remaining authorization had been used in the fourth quarter. Bank One declined to comment Friday on fourth-quarter buyback activity.

But Tom Kelly, a bank spokesman, affirmed that Bank One had repurchased a "heavy amount" of its stock in late September. According to Keefe, Bruyette, it was 32 million shares for the third quarter as a whole, at a price in a range of $37 to $38 a share.

When the buybacks were authorized in May, Bank One had planned to make the purchases over a "few" years, Mr. Kelly said. In contrast to the 32 million shares it bought in the third quarter, it repurchased only 5 million shares late in the second quarter.

Before the first downward revision of its earnings estimates, Bank One stock was trading at about $55 a share. It tumbled to $43 following the announcement, hitting a third-quarter low of $34.3125 on Sept. 27. It dropped further in the fourth quarter, hitting a low of $32.6875 on Oct. 15. On Friday, it closed at $36.50.

Mr. Kelly said Friday that the bank is prepared to step into the market again. Without saying whether it repurchased any shares this quarter, Mr. Kelly said the company is well capitalized and can afford to buy more shares.

According to a filing with the Securities and Exchange Commission, Bank One's tier-one capital was 7.7% of assets at the end of the third quarter.

The buybacks enabled Bank One to repurchase its shares at bargain-basement prices, assuming they will rise in the future. Perhaps more important, the repurchases gave support to the stock's price when it was under severe downward pressure.

The pressure was so great that a number of analysts, including David Berry of Keefe, Bruyette, said the company could become a takeover target.

"A company has to manage its share price, otherwise it becomes vulnerable to a takeover," said John Otis, a bond analyst for Bear, Stearns & Co.

The buybacks also helped market psychology, analysts said.

Michael Laliberte, an owner of Bank One stock and co-adviser for the Imperial Bank Fund, a portfolio managed by Retirement Planning Co. in Providence, R.I., said Bank One was giving investors reason to believe top executives have faith in the company.

"It makes the most amount of sense from a public relations standpoint," Mr. Laliberte said. The buyback program "is one of the few things sustaining the credibility of management."

On Nov. 10, the bank confirmed market rumors of the previous day that its fourth-quarter earnings would be lower than expected. Based on the rumors, the stock fell more than $4, to $34.625, the day before the announcement. The stock regained almost all it had lost in the following trading days. Trading in the stock was unusually heavy.

Other banks that were heavy purchasers of their own stock in the third quarter did so largely because they could not invest available funds in ways that would sufficiently bolster stockholder equity.

"The best use of capital is to grow your business," said Marni Pont O'Doherty, an analyst with Keefe, "but if none of those opportunities above a certain hurdle rate are not there, then it's best just to return the capital to shareholders."

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