UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): December 8, 2008
FEDERAL TRUST CORPORATION
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(Exact name of registrant as specified in its charter)
Florida 000-23449 59-2935028
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(State or other jurisdiction Commission File Number (I.R.S. Employer
of incorporation) Identification No.)
312 West First Street
Sanford, Florida 32771
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(address of principal executive offices) (zip code)
(407) 323-1833
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(Registrant's telephone number, including areas code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instructions A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
FORWARD-LOOKING STATEMENTS
This current report contains forward-looking statements, which can be identified
by the use of words such as "estimate," "project," "believe," "intend,"
"anticipate," "plan," "seek," "expect" and words of similar meaning.
These forward-looking statements are based on current beliefs and expectations
of our management and are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond our
control. In addition, these forward-looking statements are subject to
assumptions with respect to strategic objectives, anticipated financial results,
future business prospects and decisions that are subject to change.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements:
o general economic conditions, either nationally or in our market areas,
that are worse than expected;
o changes in laws or government regulations or policies affecting
financial institutions, including changes in regulatory fees and capital
requirements;
o competition among depository and other financial institutions;
o inflation and changes in the interest rate environment that reduce our
margins or reduce the fair value of financial instruments;
o adverse changes in the securities markets; and
o changes in our organization, compensation and benefit plans.
Because of these and other uncertainties, our actual future results may be
materially different from the results indicated by these forward-looking
statements.
ITEM 7.01. Regulation FD Disclosure
On December 8, 2008, Federal Trust Bank was notified by the Office of Thrift
Supervision that Federal Trust Bank is required, by applicable statutes and
regulations, to submit a capital restoration plan to the Office of Thrift
Supervision and the Federal Deposit Insurance Corporation by December 23, 2008.
This requirement results from Federal Trust Bank falling into one of the three
categories of undercapitalized institutions under federal Prompt Corrective
Action statutes and regulations.
Federal Trust Bank expects to submit a capital restoration plan stating that it
intends to improve its capital position through its proposed merger (the
"Merger") with a subsidiary of The Hartford Financial Services Group, Inc. ("The
Hartford") pursuant to the Agreement and Plan of Merger, dated as of November
14, 2008, by and between The Hartford, FT Acquisition Corporation and Federal
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Trust Corporation. However, consummation of the proposed Merger by The Hartford
is contingent on a number of conditions, including approval by the U.S.
Department of the Treasury of The Hartford's participation in the Capital
Purchase Program under the Troubled Asset Relief Program, approval of the Merger
by the shareholders of Federal Trust Corporation and the Office of Thrift
Supervision's approval of The Hartford's application to become a savings and
loan holding company. In addition, consummation of the Merger is also subject to
approval by the Board of Governors of the Federal Reserve System and the Office
of Thrift Supervision of matters relating to Allianz SE, a shareholder of The
Hartford.
If the Office of Thrift Supervision does not accept Federal Trust Bank's capital
restoration plan, the Office of Thrift Supervision could assess civil money
penalties or take other enforcement actions. In addition, if the Merger is not
consummated, including for reasons outside of Federal Trust Corporation's and
Federal Trust Bank's control, Federal Trust Bank will have failed to implement
its capital restoration plan. Failure to implement the capital restoration plan
could also result in the Office of Thrift supervision assessing civil money
penalties or taking other enforcement actions against Federal Trust Bank and
Federal Trust Corporation.
As a condition of the approval of the capital restoration plan, Federal Trust
Corporation is required to guarantee Federal Trust Bank's compliance with the
capital restoration plan. The guarantee will consist of Federal Trust
Corporation committing to:
o taking any actions directly required of Federal Trust Corporation under
the capital restoration plan;
o taking any corporate actions necessary to enable Federal Trust Bank to
take actions required of Federal Trust Bank under the capital
restoration plan;
o not taking any action that would impede Federal Trust Bank's ability to
fully implement the capital restoration plan; and
o subject to applicable law, utilizing its available assets, when directed
by the Office of Thrift Supervision, to enable Federal Trust Bank to
implement the capital restoration plan.
In addition, the Office of Thrift Supervision notified Federal Trust Bank that
the following regulatory and supervisory restrictions apply to Federal Trust
Bank, some of which restrictions are similar to those included in the cease and
desist orders issued by the Office of Thrift Supervision to Federal Trust
Corporation and Federal Trust Bank, as previously reported in filings made by
Federal Trust Corporation:
o Federal Trust Bank must notify the Office of Thrift Supervision prior to
adding directors or hiring senior executive officers, or making certain
changes to the responsibilities of senior executive officers;
o Federal Trust Bank must notify the Office of Thrift Supervision of
proposed transactions with affiliates;
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o Federal Trust Bank may not pay any capital distributions without the
prior written approval of the OTS;
o Federal Trust Bank may not pay any management fees to any person having
control of Federal Trust Bank;
o Federal Trust Bank's growth is restricted in that its average total
assets in any quarter may not exceed its average total assets during the
previous quarter;
o Federal Trust Bank may not acquire any interest in any company or
insured depository institution, establish or acquire any additional
branch office or engage in any new line of business; and
o Federal Trust Bank may not accept, renew or roll over any brokered
deposit.
ITEM 9.01. Financial Statements and Exhibits
Not applicable.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 11, 2008
Federal Trust Corporation
(Registrant)
By: \s\ Dennis T. Ward
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Dennis T. Ward
President and
Chief Executive Officer