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Report: KeyCorp To Acquire Puget Sound Bank

March 6, 1992

NEW YORK (AP) _ The Albany-based KeyCorp, a strong and briskly growing regional bank, is offering $775 million in stock to buy Puget Sound Bancorp in Washington state, a published report said Friday.

The board of Pugent Sound was reportedly set to meet over the weekend to consider offers from KeyCorp and U.S. Bancorp of Portland, Ore., the American Banker newspaper reported in Friday’s editions.

KeyCorp and U.S. Bancorp declined comment, but Puget Sound confirmed earlier in the week that it is reviewing at least two takeover offers. The bank, with $4.8 billion in assets, is the largest independent commercial bank in Washington.

KeyCorp is proposing a stock swap valued at about $40 a share, the newspaper said. If succcessful, the deal would add 112 offices to KeyCorp’s existing 42 branches in the state, bringing total assets in Washington to $6.3 billion. ″Puget in the last couple of years has been a very attractive takeover candidate,″ said Frank Barcocy, senior vice president and bank analyst for Advest Inc. He said Puget’s chairman, W.W. ″Bill″ Phillip, is near retirement, which could play a strong factor in the takeover going through.

KeyCorp, with more than $23 billion in assets, has about 650 branches in eight states: New York, Maine, Alaska, Washington, Oregon, Idaho, Utah and Wyoming.

A recent analysis of KeyCorp by Salomon Brothers Inc. concluded the bank is well positioned to grow through bank takeovers. KeyCorp recently strengthened its management by adding two experienced banking executives: James R. Waterson, former vice president at Comeria, and Gregory C. Dillett, formerly executive vice president of CoreStates Financial.

The Salomon report also said KeyCorp has strengthened its equity capital position and managed credit quality.

KeyCorp was down $1.12 1/2 at $45.75 a share in late trading on the New York Stock Exchange, while Puget Sound was up 62 1/2 cents at $36.12 a share.

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