Exhibit 99.2
                        Letter to Prospective Investors





XXXX xx, 1997


Dear Prospective Investor:

        We are pleased to announce  that  Federal  Trust  Corporation  ("Federal
Trust"), a Florida  corporation and parent of Federal Trust Bank, is offering up
to 2,701,619  shares of Common.  Federal  Trust is offering the shares of Common
Stock at a price of  $2.00  per  share  on a  priority  basis  first in a Rights
Offering  to  shareholders  as of the March 26,  1997  Record Date and then in a
Community  Offering  to certain  members of the  general  public.  Net  offering
proceeds will increase the capital of the Bank and support  future growth of the
Bank.

         We have enclosed the following materials which will help you learn more
about the merits of the Federal Trust Corporation as an investment.  Please read
and review the materials carefully.

         PROSPECTUS:   This  document   provides   detailed   information  about
         operations  Federal  Trust and a complete  discussion  on the  proposed
         Offering.

         QUESTIONS  AND  ANSWERS:  Key  questions  and answers  about the rights
         offering are found in this pamphlet.

         STOCK ORDER FORM &  CERTIFICATION  FORM:  This form is used to purchase
         common stock by returning it with your payment in the enclosed business
         reply  envelope.  The deadline for ordering  common stock in the Rights
         Offering is 5:00 p.m. Eastern Time August 29, 1997.

         We invite Federal  Trust's  shareholders,  local  community and certain
members  of the  general  public  to  increase  their  holdings  or  become  new
shareholders of Federal Trust. Through this Offering you have the opportunity to
buy Common Stock  without  paying a commission  or a fee. The board of directors
and senior management of Federal Trust fully support the Offering.

        If you have additional  questions regarding the Rights Offering,  please
call the Stock Sales Center at (614) 766-8400  (Dublin,  Ohio) or (212) 323-8300
(New York, New York).

Sincerely,


Keefe, Bruyette & Woods, Inc.

THE SHARES OF COMMON  STOCK BEING  OFFERED ARE NOT SAVINGS  ACCOUNTS OR DEPOSITS
AND ARE NOT  INSURED BY THE  FEDERAL  DEPOSIT  INSURANCE  CORPORATION,  THE BANK
INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY STOCK.
THE OFFER IS MADE ONLY BY THE PROSPECTUS.