UPS' foray into financial services, which the company has been advertising on national television, was the topic of a feature story in American Banker in November.

Though the First International acquisition would enhance UPS' corporate lending activities, it would not bring the Atlanta-based delivery company into the retail deposit business. As part of the deal, the banking company's chief subsidiary, First International Bank, is to sell all of its $260 million of deposits and cease to be a federally insured depository.

Also, First International Bancorp would cease to operate as a bank holding company regulated by the Federal Reserve System. First International Bank would become a nondepository bank chartered and regulated by the Connecticut Department of Banking.

Bob Bernabucci, chief executive officer of UPS Capital, said in an interview that the companies complement one another in their portfolios and ideology.

First International's expertise is in government-backed lending for small and midsize manufacturers, distributors, and wholesalers in the United States and 14 other countries. First International is to retain its name, headquarters, and most of its staff of 200.

"We see very little overlap in infrastructures," Mr. Bernabucci said. "These are complementary activities. We don't issue the type of loans that First International does today."

Brett Silvers, chairman and chief executive officer of First International Bancorp, said, "we bring to the table credit offerings that they don't provide."

First International has a managed loan portfolio of approximately $1.2 billion. The bank primarily serves companies with annual sales of $1 million to $50 million.

"We've been out of the transaction account business for about two years or so;' Mr. Silvers said. The bank's $260 million of deposits are primarily in brokered certificate of deposits, he said, and it is seeking a buyer for that portfolio.

Mr. Bernabucci said the selling of the deposit portfolio was a condition of the deal because the bank does not "necessarily require deposits as a source of funding. Secondly, it's not subject to the same kind of FDIC regulations."

Mr. Bernabucci said First International's clients are very similar to the companies that UPS Capital serves, because of the "bias toward manufacturing and distribution." This similarity gives UPS an opportunity to cross-sell UPS products, he said.

From First International's perspective, UPS is "a more efficient funding source, because their funds cost less," Mr. Silvers said. The acquisition by UPS would give the bank a bigger distribution network and give the bank's clients access to the "full menu of products that UPS Capital provides," he said.