WASHINGTON–Hartford Insurance Group announced it plans to acquire a Central Florida thrift, and simultaneously applied for a thrift charter and federal aid under the government’s capital purchase program.
The Hartford said it estimates that it would be eligible for a capital purchase of between $1.1 billion and $3.4 billion under existing Treasury guidelines. The final amount of capital request will be determined following approval by Treasury, Hartford officials said.
“We are taking these actions as a strong and well-capitalized financial institution looking for maximum flexibility and stability,” said Ramani Ayer, The Hartford’s chief executive officer. “Securing capital at the terms available through the capital purchase program could be a prudent course in this market environment and would allow us to further supplement our existing capital resources.”
The thrift it is acquiring is Federal Trust Company, which is based in Sanford, Fla. Mr. Ayer said the Hartford has agreed to pay $10 million for the thrift.
The Hartford will also provide an “additional amount” to recapitalize the bank, although it declined to say how much additional capital it plans to put into the bank. Federal Trust, a unitary thrift holding company, owns Federal Trust Bank–a federally chartered, FDIC-insured savings bank.
“The completion of this acquisition will satisfy a key eligibility requirement for participation in CPP,” Mr. Ayer said.
The Hartford’s purchase of Federal Trust Corp. is contingent on Treasury’s approval of The Hartford’s participation in the capital purchase program, approval of the acquisition by the shareholders of Federal Trust Corp., and the Office of Thrift Supervision’s approval of The Hartford’s application to become a savings and loan holding company, the company said.