The federal Office of Thrift Supervision has given 2 insurers permission to buy federal savings banks and become federally regulated bank holding companies.

The insurers, Hartford Financial Services Group Inc., Hartford, and Lincoln National Corp., Radnor, Pa., say they are making the deals in an effort to become eligible to participate in the federal Capital Purchase Program, part of the Troubled Asset Relief Program.

Hartford is acquiring Federal Trust Bank, Sanford, Fla., a savings bank, and the bank’s parent, Federal Trust Company.

Hartford has offered to “inject a significant amount of capital” into the bank to re-capitalize the bank, according to the OTS.

OTS has issued an order approving Hartford’s application with some conditions.

Hartford, for example, must consummate the deal within 30 days and must ensure that 40% of the savings bank’s directors are independent from Hartford.

Lincoln has applied for permission to acquire Newtown County Loan & Saving FSB, Goodland, Ind., a federally chartered mutual savings bank.

“Based on the difficulties the savings bank is experiencing, relating to the high levels of classified assets and non-performing assets, declining earnings, and insufficient capital, and the likelihood that the savings bank’s capital condition will continue to deteriorate, OTS has determined that severe financial conditions exist that threaten the stability of the savings bank,” OTS officials write in the order granting Lincoln’s application.

Because Newtown County is having problems, it is eligible to convert to a federal stock savings bank charter, which would ease the acquisition process, through a voluntary supervisory conversion, OTS officials write.

Lincoln appears to be offering to infuse enough capital to help the bank overcome its problems, officials write.

The bank has a “needs to approve” Community Reinvestment Act rating, and Lincoln appears to have the resources to help the bank improve its CRA performance, officials write.

The OTS has exercised its authority to waive the usual public comment provisions in light of the bank’s severe financial problems, officials write.

Lincoln must consummate the deal within 30 days, make sure that at least 40% of Newtown County’s directors are independent of Lincoln, and come up with a business plan for Lincoln, officials write.

At press time, the U.S. Treasury Department had not indicated whether it had approved Hartford’s request or Lincoln’s request to participate in the CPP.