As fundsters hold their breath to see what happens to the Hartford's [see profile] mutual fund business, there's news on Monday about the Hartford exiting a non-core business. The Connecticut-based insurer unveiled a deal to sell Sanford, Florida-based bank Federal Trust Corporation to Davenport, Florida-based CenterState Banks. The deal is expected to close in the fourth quarter and will transfer about $230 million in deposits and about $170 million in loans.
The deal is "consistent with The Hartford's other recent sales of non-core operations," according to a press release. These include the sale of its Canadian mutual fund arm and the sale of Specialty Risk Services.
The Hartford has reportedly put its U.S. mutual fund unit on the block, too [see The MFWire, 5/12/2011 and 5/20/2011].
Hartford bought Federal Trust in 2009 to gain access to the Federal Government's Troubled Asset Relief Program bailout money. Last year the insurer paid back the $3.4 billion it borrowed through TARP.
Company Press Release
HARTFORD, Conn.-- The Hartford today announced a definitive agreement to sell Federal Trust Corporation to CenterState Banks, Inc. The sale, which is subject to regulatory approval, is expected to close in the fourth quarter and is consistent with The Hartford's other recent sales of non-core operations. Acquired by The Hartford in June 2009, Federal Trust Corporation is a unitary thrift holding company and is the parent company of Federal Trust Bank, a federally-chartered, FDIC-insured savings bank. Federal Trust Bank operates 11 full-service offices in Seminole, Orange, Volusia, Lake and Flagler Counties, Fla.
The Hartford expects to record an after-tax charge of approximately $70 million in the second quarter related to the divestiture, including losses on certain Federal Trust Bank assets and liabilities which will not be sold to CenterState Banks, Inc.
CenterState Banks, Inc. is approximately $2.2 billion in assets, and is headquartered in Davenport, Fla., between Orlando and Tampa. Currently, the company operates through two subsidiary banks with 52 branch locations in fourteen counties throughout central Florida.
About The Hartford
The Hartford Financial Services Group Inc. (NYSE: HIG) is a leading provider of insurance and wealth management services for millions of consumers and businesses worldwide. A Fortune 150 company, The Hartford is consistently recognized for its superior service and as one of the world's most ethical companies. More information on the company and its financial performance is available at www.thehartford.com.
HIG-F
Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include those discussed in our Quarterly Reports on Form 10-Q, our 2010 Annual Report on Form 10-K and the other filings we make with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.
Company Press Release
DAVENPORT, FL. – May 23, 2011 - CenterState Banks, Inc. (NASDAQ: CSFL) announced that it has entered into a definitive agreement with The Hartford Financial Services Group, Inc. to purchase Federal Trust Corporation and subsequently merge Federal Trust Bank into its lead subsidiary bank, CenterState Bank of Florida. This transaction is expected to close by the end of the year pending regulatory approval. CenterState is well-positioned for these acquisitions as a result of its strong financial and capital position.
With the closing of this transaction, CenterState will assume all of the deposits (approximately $230 million) and purchase selected performing loans (totaling approximately $170 million) and other assets of Federal Trust Bank. CenterState will not pay a premium to assume the deposits and will receive a 27% discount on selected performing loans. CenterState also has the option to put back any purchased loan for up to one year after closing that becomes 30 days past due or becomes adversely classified by applicable regulatory standards.
Headquartered in Sanford, Florida with branches throughout Central Florida, Federal Trust Bank is strategically positioned along the I-4 and I-95 corridors in Central Florida. “Federal Trust Bank is a natural addition for CenterState. This addition continues our vision to build out the I-4 and I-95 corridors as well as our Central Florida footprint. With this acquisition, we add to our 52 other conveniently located offices in Central Florida,” said Ernie Pinner, Chairman, President, and CEO of CenterState Banks, Inc.
Founded in 1988, Federal Trust Bank is one of the oldest financial institutions in Seminole County. “Federal Trust Bank has been a reliable source for banking customers in Central Florida for almost 25 years and we look forward to continuing that tradition. We are excited for the opportunity to partner with the employees of Federal Trust and we welcome all of Federal Trust’s customers,” said John Corbett, President and CEO of CenterState Bank of Florida.
Over the past year, CenterState has acquired 3 FDIC assisted transactions headquartered in Clewiston, Bartow, and Ocala, Florida respectively. CenterState also purchased four branches from TD Bank in Putnam County, Florida in January of this year. Since the summer of 2009, CenterState has completed two successful stock offerings totaling approximately $120 million which has funded these recent acquisitions.
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