UPDATE 1-US Bancorp pays Treasury $139 mln for TARP warrants

* U.S. Bancorp largest bank to completely exit TARP

* Joins State Street among companies buying back warrants

NEW YORK, July 15 (Reuters) - U.S. Bancorp (USB.N) on Wednesday said it paid $139 million to repurchase stock warrants held by the Treasury Department, becoming the second major U.S. bank to completely exit the government's financial rescue program.

The Minneapolis-based lender joins State Street Corp (STT.N) in leaving the $700 billion Troubled Asset Relief Program, or TARP. State Street on Friday said it paid $60 million to buy back its own warrants.

U.S. Bancorp, the eighth-largest U.S. bank by assets, and State Street are among 10 major financial services companies that federal regulators last month permitted to repay more than $68 billion of bailout money.

The other banks have yet to extinguish their warrants, which let the government buy common stock at a preset price.

JPMorgan Chase & Co (JPM.N), the largest of the 10 banks allowed to exit TARP, last week decided to allow Treasury to auction its warrants on the public market, rather than repurchase them at a price it considers inflated.

U.S. Bancorp's warrants entitled the government to buy 32.68 million shares at $30.29 each. The 10-year warrants were issued last Nov. 14.

Shares of U.S. Bancorp closed Wednesday up 52 cents, or 3 percent, at $17.94 on the New York Stock Exchange. (Reporting by Jonathan Stempel; Editing Bernard Orr)