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U.S. markets recover from steep losses
HOUSTON, Nov. 7 (UPI) -- Regulators shut down Franklin Bank Friday, making the bank, based in Houston, the 18th U.S. bank to fail this year.
Federal and state agencies arranged for Franklin's accounts to be taken over by Prosperity Bank, which also has a Houston headquarters, the Houston Chronicle reported. The 46 branches, all in Texas, are to open as Prosperity branches Saturday, and Prosperity is acquiring $850 million of Franklin's $5.1 billion in assets.
Dan Bass, managing director of Carson-Medlin Co., an investment bank based in Houston, said Franklin was in trouble because of its volume of loans in the California real estate market, which has been hit hard by the lending crisis. About 16 percent of its loans were in California.
"It's an exception because if they didn't have their California exposure, they'd be fine," he said. "Relative to other parts of the country, banking is doing great in Houston."
Franklin has not yet filed a 2007 annual report or any quarterly reports for 2008.
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