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.
"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."
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.