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UPS To Buy Bancorp In
Stock Deal
| By Bloomberg
News |
January 17, 2001 |
ATLANTA — United Parcel Service Inc. said it agreed to
buy Hartford-based First International Bancorp Inc. for about $78 million in
stock.
The shipping company will use the bank’s expertise in
handling government-backed loans to broaden the operations of its own
financial services unit.
UPS agreed to exchange about 0.160 shares of its Class B common stock for each
share of First International Bancorp. Based on 8.3 million First International
shares outstanding as of Sept. 30, UPS would exchange about 1.3 million of its
Class B common shares valued at $78 million in the transaction.
First International mainly makes loans to small and midsize manufacturers,
distributors and wholesalers, using U.S. government-backed loan programs
through the Small Business Administration, Department of Agriculture and
Export-Import Bank.
"They have some very specific expertise that takes years to
develop," UPS spokeswoman Peggy Gardner said of First International.
"It’s easier to acquire that expertise than to build it from
scratch."
First International serves "businesses that have traditionally been
underserved by financial institutions," said Bob Bernabucci, UPS Capital
chief executive. "UPS and UPS Capital also are focused on this customer
segment with distribution and financial solutions."
The acquisition will add to UPS earnings beginning in 2002, he said, although
he declined to say by how much.
First International Bank, a unit of First International Bancorp, will sell its
$260 million in deposits to a third party prior to the UPS acquisition. As of
Sept. 30, First International Bank had a managed loan portfolio of $1.2
billion.
After the acquisition, First International will make loans and won’t accept
deposits, operating with any needed capital from UPS, Bernabucci said.
Regulation of the bank will switch to the state of Connecticut from the
Federal Deposit Insurance Corp. and Federal Reserve System.
UPS Capital provides a variety of services to businesses, including equipment
leasing, inventory and distribution financing and international trade.
UPS stock, which trades on New York Stock Exchange under the symbol UPS, was
up 50 cents Tuesday to close at $59.44.
First International Bancorp stock, which trades on the Nasdaq stock market
under the symbol FNCE, rose $1.33 to finish at $8.56 on Tuesday.n
©New Haven Register 2001
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