A former Pennsylvania mutual thrift is buying a leasing firm for a leg up in commercial banking.

Patriot Bank Corp., Pottstown, has agreed to acquire privately owned First Nations Capital Corp., Reading. Patriot officials would not disclose terms of the deal.

"We'll have the ability to offer a leasing product to existing commercial relationships," said John W. Major, president and chief executive officer of $699 million-asset Patriot. "At the same time, we'll use the leasing company to develop other relationships."

Patriot converted to public ownership on Dec. 1, 1995, and since then has been working to reduce dependence on mortgages and increase commercial loans, Mr. Major said.

It created a commercial banking division in March 1996 and became a commercial bank in this year's second quarter. The division now has a staff of eight and outstandings of $30 million, Mr. Major said.

Patriot has never bought a company before; it has used excess capital to buy back about 1.1 million shares of its stock, for $13.25 to $18 each. The buyback included a modified Dutch auction in which 449,000 shares were bought.

First Nations is expected to add to Patriot's earnings by the middle of next year, Patriot said. First Nations' president, Mark E. Guida, is to retain that post, and the company is to be renamed Patriot Commercial Leasing Co.

Mr. Guida has 18 years of experience in commercial lending. "Essentially what they've done is hired a very experienced commercial leasing person," said Claire Percarpio, a vice president of Janney Montgomery Scott in Philadelphia. "His book of business, his pipeline should help them to build a portfolio."

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