Hartford Financial Services Inc. says it has applied for permission to become a savings and loan holding company, clearing the way for it to participate in the U.S. Treasury Department’s Capital Purchase Program.
Hartford Financial, Hartford, also has agreed to pay $10 million to acquire Federal Trust Corp., Sanford, Fla., the parent of Federal Trust Bank, a federally chartered savings bank.
Completing the Federal Trust deal will help Hartford satisfy a CPP eligibility requirement, Hartford says.
Hartford estimates that it should be eligible for a capital purchase of between $1.1 billion and $3.4 billion under existing Treasury guidelines.
The final amount of the capital request will be determined following approval by the Treasury, Hartford says.
“We are taking these actions as a strong and well-capitalized financial institution looking for maximum flexibility and stability,” Hartford Chairman Ramani Ayer says in a statement. “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.”
In addition to paying $10 million for Federal Trust, Hartford will provide an “additional amount” to recapitalize the bank, Hartford says.
Before Hartford can complete the Federal Trust acquisition, it must get approval for the deal from Federal Trust shareholders and approval from the federal Office of Thrift Supervision to become a savings and loan holding company.
Hartford also wants approval from the Treasury Department to participate in the CPP, Hartford says.