NU Online News Service, May 23, 3:03 p.m. EDT

The Hartford Insurance Group is selling Federal Trust Bank, the Florida thrift it acquired in early 2009 as a prerequisite to receiving federal aid under the Troubled Asset Relief Program (TARP).

The Hartford says it is selling Federal Trust, based in Sanford, Fla., as part of its program to divest itself of non-core assets.

It paid only $10 million for the troubled institution, which was operating under regulatory restrictions because the Treasury Department would not provide TARP funds unless a non-bank had a federally regulated subsidiary.

Soon after, Hartford borrowed $3.4 billion from the Treasury under the TARP program. The company paid the money back in full last year.

The Hartford says it will record a second-quarter charge of $70 million in connection with sale of the bank.

The acquirer, CenterState Banks Inc., of Davenport, Fla., will acquire all the deposits of Federal Trust—approximately $230 billion—and purchase only select performing loans totaling $170 million and other assets.

But it will not pay a premium for the deposits and will receive a 27 percent discount on certain loans it is assuming.

According to CenterState, the acquirer has the option to “put back” to Hartford for up to one year after closing any purchased loan that becomes 30 days past due or becomes adversely classified by applicable regulatory standards.