Insurer said it will sell Federal Trust after owning it for less than two years; carrier paid $10M for bank, received $3.4B in government bail-out funds
The Hartford Financial Services Group Inc. today said it will sell Federal Trust Corp. to CenterState Banks Inc., unloading the bank after owning it for less than two years.
The sale is expected to close in the fourth quarter. The news comes less than two weeks after reports that the insurer is seeking a buyer for its mutual funds unit.
The Hartford bought Federal Trust, the parent of Federal Trust Bank, in June 2009, following its November 2008 bid to become a savings-and-loan holding company.
The acquisition allowed the insurer to qualify for the Treasury Department's Capital Purchase Program, which is a part of the Troubled Asset Relief Program.
At the time, The Hartford paid about $10 million, plus an additional undisclosed amount to help recapitalize Federal Trust.
The Hartford picked up some $3.4 billion in federal bailout cash once it was cleared to participate. The insurer repaid the funds last year.
The carrier will record an after-tax charge of about $70 million in the second quarter due to the sale, including losses on some of Federal Trust Bank's assets and liabilities, which won't be sold to CenterState Banks.
The Hartford's spokesman David Snowden would not provide any information on the amount the insurer received in the sale.
