The Deal: The Hartford Financial Services Group, Inc. has signed a definitive agreement to acquire Federal Trust Corporation for $1.00 per share, or nearly $10 million. Under me terms of me deal, Hartford will also provide an additional amount to recapitalize Federal Trust Bank, the operating subsidiary of Federal Trust Corporation. The companies expect the deal to close in the first quarter of 2009, subject regulatory and shareholder approvals. The deal is also contingent on the approval of the U.S. Treasury Department for Hartford to participate in its Capital Purchase Program as a result of me acquisition.

Discussion: Federal Trust Corporation is the holding company for Federal Trust Bank. The bank operates about a dozen branches serving Central Florida. Residential mortgages account for about 60 percent of the bank's loan portfolio.

Hartford Financial Services offers a variety of personal and commercial insurance products. Hartford's insurance coverage includes homeowners, auto, life, property/casualty, and worker's compensation. The company also offers additional financial services including employee benefits administration, asset management, and mutual funds.

The acquisition follows a trend in the insurance industry of buying small banking industry players in order to qualify for capital investments from the US government under its banking industry bailout programs.

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