First International Bancorp, the Hartford-based specialty finance company, is being acquired by shipping giant United Parcel Service Inc. for $78 million in stock.

First International, whose roots were in traditional commercial banking, evolved during the past decade into a finance company lending primarily to small and mid-size manufacturers using government-backed loan programs.

In the mid-1990s, the bank's business expanded into international trade.

Analysts said First International's expertise will fit well with Atlanta-based UPS's financing subsidiary, adding new services that UPS can offer its customers.

"It's a deal that has positives for both sides," said Angie Billon, a senior equity analyst at Johnston, Lemon & Co. in Washington, D.C.

"UPS is a larger company, and will allow First International to grow more."

The deal requires regulatory approvals, and is expected to close in the second quarter.

During the past 18 months, First International had determined that it would need access to more capital to continue building on the lending platform the company established, according to First International President Leslie Galbraith.

First International seriously began exploring alternatives last summer, leading to the UPS deal that was announced Tuesday, Galbraith said.

Brett N. Silvers, First International's chairman and chief executive, said the bank's expertise in government-back lending will add to UPS's financial services offerings, which include global trade finance, asset-based lending and equipment leasing.

Of First International's total work force of 220, about 160 are in downtown Hartford. There are no plans for any job cutbacks because there is no overlap of business with UPS.

"This is absolutely a growth story," Silvers said.

About 50 percent of the company's stock is owned by the family of Hartford financier David T. Chase, a prominent Hartford business family. Silvers said the family supports the sale.

First International went public in 1997 at an initial offering price of $13.50. In the past couple of years, the bank has struggled with sagging shares, reflecting an industrywide trend, Billon said.

In the past year, First International's shares have traded near $7.50. Tuesday, the stock rose $1.34, to close at $8.56.

Without the sale, Billon said, she would have predicted little change in the stock price in the next 12 months.

Under the terms of the deal, First International shareholders will get about 0.160 shares of UPS Class B common stock for each First International share.

First International said it will sell its remaining $260 million in deposits, mostly certificates of deposit, and seek approval to convert itself into a non-depository bank chartered and regulated by the state Department of Banking.