Magazine article American Banker

Fla.'s Federal Trust Misses Capital Mark, Must Get Buyer

Magazine article American Banker

Fla.'s Federal Trust Misses Capital Mark, Must Get Buyer

Article excerpt

Byline: David Breitkopf

Federal Trust Corp. in Sanford, Fla., is facing an uncertain future after a second deal to recapitalize itself collapsed on the eve of a deadline its regulator had set for it to raise cash.

Now looming for the troubled thrift company is a Nov. 15 deadline to find a buyer.

The $637 million-asset company said late Monday that its deal to sell a controlling stake to a group of unnamed investors, announced just 10 days earlier, had been terminated.

The deal would have infused $40 million to $55 million of fresh capital. Federal Trust gave no details of the deal's collapse, and Dennis T. Ward, its chairman, president, and chief executive, did not return calls.

Since July, Federal Trust had been under orders from the Office of Thrift Supervision to raise sufficient capital by Sept. 30 or to find a merger partner by Nov. 15. In August, an investment group led by former Sovereign Bancorp. Inc. chairman Jay S. Sidhu agreed to invest $30 million in Federal Trust, but this deal was called off last month.

William Ruberry, a spokesman for the OTS, declined to say what the regulator would do if Federal Trust fails to find a buyer within six weeks.

The OTS handles each situation on "a case-to-case basis," Mr. Ruberry said. "There's no formula that would determine what the agency would do. The course of action is determined by the circumstances and the reading of the circumstances."

In an interview with American Banker last week, Federal Trust's Mr. Ward said he was unsure what would happen if his company failed to meet the OTS' deadlines. …

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