Less than two years after it acquired Federal Trust Bank in Sanford, Fla., so it could qualify for a federal bailout, insurance giant Hartford Financial Services Group Inc. is selling the thrift to another Florida banking company.
Hartford said Monday that it is selling the $367 million-asset Federal Trust and its corporate parent, Federal Trust Corp., to CenterState Banks Inc., a two-bank holding company in Davenport, Fla. It did not disclose a deal price.
During the height of the financial crisis, Hartford was one of several insurance companies that applied to acquire troubled thrifts in order to be eligible to receive funds from the government's Troubled Asset Relief Program. It bought the thrift for $10 million in 2009 and later received $3.4 billion in TARP funds, which it repaid last year.
Hartford said that it expects to take a $70 million loss related to the sale, including losses on certain assets and liabilities that would not be sold to CenterState.
Federal Trust was struggling to survive when Hartford acquired it and gave it a large capital infusion. At Dec. 31, the thrift's total risk-based capital ratio was 19.2%, compared to just 2.61% two years earlier, according to Federal Deposit Insurance Corp. data. But the thrift, hit hard by losses on real estate loans, is not yet making money; it lost more than $110 million in 2010, according to the FDIC.
The buyer, CenterState, is the parent of CenterState Bank in Winter Haven, Fla., and Valrico State Bank in Hillsborough. It has $2.2 billion of assets and 52 branches in 14 Florida counties.
The sale is expected to close in the fourth quarter.