Cleveland-based Keycorp agreed Thursday to buy $503 million-asset Omnibancorp, Denver, in a stock-swap deal valued at $132 million.

The acquisition of the privately held banking company will roughly double Keycorp's presence in Colorado, to $1.1 billion of assets and 33 branches. Perhaps more important, it will give Keycorp entree into metropolitan Denver.

Robert W. Gillespie, Keycorp's president and chief operating officer, cited Denver as "one of the top growth areas in the country," saying "we are committed to growing our franchise there." The deal is set to close in next year's first quarter.

Based on current trading values, the price tag equals 230% of Omnibancorp's book value at midyear.

Keycorp officials said the deal will dilute earnings by less than 0.5% the first year, becoming either neutral or accretive shortly thereafter.

Keycorp's stock fell 37.5 cents on Thursday, closing at $32.50.

Omnibancorp is highly profitable. First-half earnings of $5.3 million equaled an annualized return on average assets of 1.71%.

There is little overlap between Omnibancorp and current Keycorp operations in Colorado, which lessens the potential for expense cuts.

Keycorp expects to realize roughly $3.4 million of annual expense reductions in the first year after the acquisition.

Keycorp entered Colorado in 1993 with the purchase of Home Federal Savings Bank, Fort Collins. In March 1994, Keycorp acquired Commercial Bancorp. of Colorado.

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