U.S. Bancorp issues $2.5B public offering to repay Treasury

U.S. Bancorp this morning said it is offering to sell $2.5 billion in common stock to the public with plans to use the proceeds to help buy back the stock it sold to the U.S. Treasury.

The Minneapolis-based holding company for U.S. Bank received $6.6 billion from the federal government last November as part of the Capital Purchase Program, in exchange for preferred stock and a related warrant to purchase common stock. Since then, some banks have been outspoken against the program and the overall $700 billion bank bailout, called the Troubled Asset Relief Program, saying program details have changed with time.

U.S. Bancorp CEO Richard Davis reportedly called the program "trouble" and said the government was punishing banks for having capital.

John Wilson, president of U.S. Bank in Springfield, told Springfield Business Journal in April that U.S. Bancorp officials changed their minds about the program and hoped to repay the government within a year. About $1.25 billion of the TARP money it received was used to acquire two failed banks in California, but the balance had not been spent.

U.S. Bancorp has passed the federal government's "stress tests," meaning that it has enough capital to weather the economy.

As part of the public offering, U.S. Bancorp intends to grant the underwriters an option to purchase up to an additional 15 percent of the shares sold to cover any over-allotments, according to the release. Morgan Stanley & Co. Inc. and Goldman, Sachs & Co. are acting as joint bookrunners for the offering.

The company will notify the Treasury of its intent to repurchase shares after consulting its banking regulators.

U.S. Bank is the sixth-largest commercial bank in the country. The holding company has $264 billion in assets and operates 2,847 banking offices.