Nov. 23--The parent of Bridgeport-based People's United Bank announced Monday it will acquire a New York-based specialty finance company that will expand its growing equipment financing business.

People's United Financial Inc. has agreed to pay $738 million for Financial Federal Corp. in a cash-and-stock deal. The deal must still be approved by regulators and shareholders of Financial Federal, but is expected to close in the first quarter.

Financial Federal provides installment financing to manufacturers, dealers and other users of industrial, commercial and professional equipment.

People's United expects the transaction to add to operating earnings in 2010. The deal also relieves some investor pressure on the bank to deploy about $2.5 billion in excess capital raised in 2007 in a "second-step" conversion.

Philip Sherringham, the bank's president and chief executive officer, said there is virtually no overlap in the industry sectors served by the two companies.

"Moreover, this transaction offers opportunities for People's United to grow our highly profitable equipment financing business with established, experienced staff in new markets throughout the country," Sherringham said.

Shares in People's rose 22 cents in mid-morning trading to $16.69 on the Nasdaq. In the 2007 "second-step" conversion, People's United stock sold for $20 a share.

-----

To see more of The Hartford Courant, or to subscribe to the newspaper, go to http://www.courant.com/.

Copyright (c) 2009, The Hartford Courant, Conn.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NASDAQ-NMS:PBCT, NYSE:FIF,

A service of YellowBrix, Inc.