Insiders at U.S. Bancorp Unload; Analysts Unfazed

Insiders are unloading shares of U.S. Bancorp, the largest independent banking company in the Pacific Northwest.

The selling reflects no unusual development, a spokesman insisted. Rather, he said, it stems from a 1990 merger agreement with HeartFed Financial Corp. that temporarily barred insiders from selling shares.

"In that time, there was a major runup in the stock, which is an important part of our compensation package," said Donald F. Bowler, senior vice president for investor relations at U.S. Bancorp.

Insider Sales in September

During September, insiders sold 74,692 shares valued at $1,559,568, according to figures compiled by Invest/Net, a company in Fort Lauderdale, Fla., from disclosure filings with the Securities and Exchange Commission.

Although the sales were of a negligible proportion of U.S. Bancorp's outstanding shares, the insiders who sold in September liquidated 36% of their holdings.

Analysts noted that insider selling probably prevented the bank's stock from generating much steam in the third quarter, when many other regional banking issues were posting significant gains and often outperforming the stock market in general.

"There was definitely a price paid in terms of market performance," said one Wall Street observer.

But most analysts did not view the sales with much concern.

No Fear of Hidden Trouble

"There is no reason to think this points to anything underlying at the company," said Virginia A. Adair, a regional bank analyst at Merrill Lynch Capital Markets. "Insider sales have to be put in perspective."

Ms. Adair said the stock had gotten a little ahead of itself and was due for the price pullback that recently occurred. The shares currently sell at about 135% of their third-quarter book value of $14.02.

Mr. Bowler said insider transactions had been put on hold from July 1990 until May of this year by the pricing mechanism in U.S. Bancorp's agreement to buy HeartFed, Auburn, Calif. That deal was completed in late March.

Insider selling in September followed similar actions in May and June by five insiders, who sold 159,302 shares. "The stock, which peaked at $23.75 in June, dropped back to $15.875 after the sales," noted Robert J. Gabele, president of Invest/Net.

Stock-Price Fluctuations

The stock moved back to $23.25 during August but has since receded again. Thursday, it traded at $19.125, off 25 cents in a declining stock market. A 3-for-2 stock split occurred Aug. 12.

The largest seller during September was John A. Elorriaga, a director and retired chairman and chief executive officer of U.S. Bancorp. He sold 60,000 shares. Coupled with his sale of 100,000 shares in June, his holding now is down to 106,289 shares.

Other sellers were three executive vice presidents Jack L. Irwin, Keith H. Miles, and Robert D. Geddes. Mr. Geddes is corporate counsel at U.S. Bancorp.

Mr. Bowler emphasized that insider ownership of U.S. Bancorp stock is "significant and increasing." It currently totals about 17% of shares outstanding, he said.

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