City National Bank said it has entered into a definitive agreement to acquire First American Equipment Finance, an equipment leasing company that owns and services approximately $325 million in assets.

Headquartered in Rochester, NY, First American Equipment Finance leases technology and office equipment nationwide. Its clients include educational institutions, hospitals and health systems, large law firms, insurance underwriters, enterprise businesses, professional service businesses and nonprofit organizations. The company employs approximately 100 people. Its lease transactions typically range between $250,000 and $3 million.

First American’s CEO Bill Verhelle and his management team will continue to lead the company, which will operate as a wholly owned subsidiary of City National Bank. Verhelle will report to the bank’s president, Christopher Warmuth.

The all-cash transaction is expected to close in the second quarter of this year and will be modestly accretive to earnings in 2012. The Alta Group acted as a financial advisor to City National.

“In order to expand its long-standing leasing business, City National identified First American Equipment Finance as the best company to add to its organization,” said City National Bank chairman and chief executive officer Russell Goldsmith. “First American’s outstanding management team led by Bill Verhelle, its strong reputation and client relationships, great products and marketing skills, and a similar focus on certain key industries are an ideal fit with City National.

“Combining First American Equipment Finance’s many strengths, its talented team and national reach with City National’s lower funding costs and access to thousands of clients will enhance the capabilities of both companies to more profitably and effectively meet the equipment leasing needs of clients and more rapidly build our equipment leasing business.”

“We’re very pleased to have found such a great partner in City National,” Verhelle said. “Joining forces with the nation’s 26th largest bank will allow us to provide clients with even better service and support. It also will give us better capital access, lower-cost funding and many of the other resources we need to continue our strong growth trajectory.”

At March 31, 2012, City National’s business and municipal lease portfolios together totaled $418 million. However, City National leases other types of equipment principally to its clients in the communities it serves.