The Hartford Buys Bank To Get Federal Bailout
By Diane Levick
The Hartford Courant
June 24, 2009
The Hartford said Wednesday it completed the acquisition of Federal Trust Corp. for $10 million in cash, calling it "the last significant step" toward closing an agreement to get federal bailout funds.
The Hartford Financial Services Group is finalizing an agreement with the U.S. Treasury for about $3.4 billion in "TARP" money, and expects to close that deal by the end of this month, said company spokeswoman Shannon Lapierre. The purchase of Florida-based Federal Trust, parent of the ailing Federal Trust Bank, gave The Hartford the savings and loan company status it needs to qualify for TARP's Capital Purchase Program.
The Hartford has provided $100 million of capital to Federal Trust as expected, including the $20 million investment disclosed at the end of March. "We plan to maintain appropriate capital levels at the bank but don't expect future contributions to be material," Lapierre said.
Grappling with investment losses and problems in its variable annuity business, The Hartford announced last fall it was seeking TARP funds. The company had gotten a $2.5 billion capital boost from German insurer Allianz last October, but needed more help as markets worsened.
Federal Trust Bank operates 11 full-service offices in Seminole, Orange, Volusia, Lake and Flagler Counties, Florida. The company's executive and administrative offices are located in Sanford, Fla.
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