United Parcel Service Inc. (NYSE: UPS) will acquire First International Bancorp Inc. (Nasdaq: FNCE) for about $78 million in UPS Class B common stock.

The Atlanta-based shipping company hopes the merger with First International Bancorp, the parent company of First International Bank, will expand the business of UPS Capital Corp., UPS' financial services subsidiary. First International offers loans in amounts up to $10 million and as of Sept. 30, 2000, had a managed loan portfolio of about $1.2 billion, about two-thirds of which is guaranteed or insured by U.S. government agencies.

Under the agreement, First International shareholders will get 1.3 million UPS Class B stock shares, or approximately .16 shares of UPS Class B stock for each share of First International stock. Prior to closing the UPS deal, First International Bank will sell all of its deposits, about $260 million, to a third party subject to regulatory approval and will cease to be a federally insured depository institution regulated by the FDIC.