One day after Wells Fargo & Co. chose another partner, U.S. Bancorp launched an aggressive stock buyback program to boost its share price and put it in a better position to make other deals.

"We have good acquisition skills and would want to continue to be a part of the consolidation of the industry," said John R. Danielson, senior vice president with the Minneapolis banking company.

Until the right deal comes along, U.S. Bancorp will put its earnings to work by purchasing shares, he said. "We do not warehouse our capital."

Under the program announced Tuesday, the company could repurchase up to $2.5 billion, or about 8.4%, of its shares in the next two years, a move that should boost the stock's price by making it less available.

As a result, U.S. Bancorp could develop a strategic advantage of having to use fewer shares to make purchases when it does act.

The company mobilized Tuesday, less than 24 hours after the bitter loss of Wells Fargo & Co. to Norwest Corp. in a deal valued at $34 billion. U.S. Bancorp had been widely expected to buy Wells Fargo to realize aspirations for California expansion.

Mr. Danielson declined to comment on whether the buyback was a way for U.S. Bancorp to deploy some of the capital it had been saving to buy Wells. "You'll have to draw your own conclusions," he said.

Share buybacks are not always practical when a company anticipates a big purchase, analysts said.

The company, then known as First Bank System, had suspended its last repurchase program in 1996, when it announced a deal to buy U.S. Bancorp. The new U.S. Bancorp could have resumed buybacks any time since that deal closed last August.

U.S. Bancorp chairman John F. Grundhofer said the buybacks would give shareholders the benefits of increased earnings from the successful integration of First Bank System.

U.S. Bancorp has $70 billion of assets, 1,000 branches in 17 states in the West, and a growing reputation for boosting returns on earnings.

"The power of the new combined U.S. Bancorp ... will generate capital in excess of our needs," Mr. Grundhofer said.

The market liked the announcement, with shares of U.S. Bancorp rising 31.25 cents, to $40.3125, on a day when most bank stocks fell.

Indeed, investors are generally warm to buybacks - as long as the programs are executed.

"It's a big positive if the company delivers on it," said Susan Flischel, portfolio manager for the Countrywide Industries Equity Fund, Cincinnati. "A lot of times these moves are announced and not followed through."

Analysts said it is in U.S. Bancorp's best interest to take a strong stand and follow through. The company is under some pressure to grow and a share buyback is seen as a good interim step.

"This is a very, very clear indication that life will go on at U.S. Bancorp," said Nancy Bush, a banking analyst with Ryan, Beck & Co. "They're saying, 'We will deliver on what we have promised.'"

The program could also be a way for U.S. Bancorp to tweak Norwest chairman Richard Kovacevich, who announced the megadeal with Wells Fargo after months of saying he was not inclined to make any big deals.

U.S. Bancorp's solid stance "would be in contrast to what Kovacevich said and did with Norwest," one strategist said.

U.S. Bancorp will still be able to act quickly on acquisitions. "There's nothing that says they can't reissue the shares to help in a merger," said Joseph C. Duwan, a banking analyst at Keefe, Bruyette & Woods Inc.

Wells Fargo will reissue several million shares to complete its merger with Norwest.

Mr. Duwan sees continued prospects for U.S. Bancorp to build in California and also said Midwest expansion is possible. He cited Firstar Corp., KeyCorp, and Mercantile Bancorp of St. Louis as possible purchase targets in the central United States.

"Some people may have thought U.S. Bancorp was in a box" because it lost Wells, Mr. Duwan said. "I very much feel otherwise. There are plenty of acquisition opportunities and the earnings picture is bright."

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