People’s United buys tech finance firm

People’s United Financial in Bridgeport, Conn., has bought a Texas-based technology finance company as part of a broader effort to expand into new areas of lending.

The $48 billion-asset People’s said Thursday that it paid all cash for VAR Technology Finance, but did not disclose the financial terms of the deal otherwise.

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"VAR's sole focus and knowledge of the technology sector for nearly 30 years is a critical component of this acquisition, allowing us to further expand our equipment leasing and finance offerings into the technology sector,” Chairman and CEO Jack Barnes said in a press release. “VAR will be a valuable addition to our equipment finance portfolio and enhance the client experience."

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People’s United is trying to grow its market share in the Boston area, and part of its strategy there involves building up its specialty banking businesses. The company hired a banker away from Silicon Valley Bank to lead a new business focused on tech firms, and it’s also hired bankers specializing in other areas such as not-for-profits and franchises.

VAR provides equipment financing for small, medium and large technology companies. Last year it originated about $180 million in loans, People’s United said. VAR will become a division of Leaf Commercial Capital, an equipment finance firm the bank bought in 2017. VAR has 90 employees.

Separately, People’s United said in November that it would buy the $3 billion-asset BSB Bancorp in Belmont, Mass. That deal would give People’s United six branches in the Boston market and should nudge the bank up to No. 7 by deposit market share there.

People’s United also released its fourth-quarter results Thursday, saying that net income increased 25% from the year-ago quarter to $132.9 million. Total revenues increased 9.4% to $428.2 million.

Earnings per share totaled 35 cents, coming in 10 cents lower than the mean estimate of analysts polled by FactSet Research Systems.

Net interest income rose 13.8% to $332.6 million, and the net interest margin widened 10 basis points to 3.17%. Average loans increased 8.4% to $35 billion. Commercial loans rose 6% to $25 billion, while residential mortgages lifted retail loans 14.6% to $10.2 billion.

Average deposits grew 9.4% to $36 billion.

Noninterest income increased 1.6% to $88.7 million. Noninterest expenses grew 9.6% to $262.7 million and included $12.3 million in compensation and benefits, primarily resulting from its recent acquisition of First Connecticut Bancorp.

The company said its efficiency ratio improved to 55.1% from 56.1% in the fourth quarter of 2017.

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