Texas bank becomes 18th to fail

Texas bank becomes 18th to fail
Regulators close down Franklin Bank, a Houston bank with $5.1 billion in assets.


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November 7, 2008: 7:51 PM ET

AMERICA'S MONEY CRISIS
Texas bank becomes 18th to fail

NEW YORK (CNNMoney.com) -- Franklin Bank was closed shut down by state regulators Friday, making it the 18th bank this year to fail.

The Houston, Texas-based bank had total assets of $5.1 billion and total deposits of $3.7 billion as of Sept. 30, 2008, according to a statement on the Federal Deposit Insurance Corp.'s Web site.

Prosperity Bank, based in El Campo, Texas, will assume all of the deposits of the failed bank, including those that exceed the insurance limit and including brokered accounts. Depositors of the failed bank will automatically become depositors of Prosperity.

In addition to taking over the deposits of the failed Franklin Bank, Prosperity will purchase $850 million of assets. The FDIC will retain the remaining assets to dispose of later.

The failed Houston bank's 46 offices will open as branches of Prosperity under normal hours, including Saturday hours. The deal will give Prosperitymore than 170 banking locations in Texas.

Customers of both banks should continue to use their existing branches until records can be fully integrated during the first quarter of 2009, said Dan Rollins, president of Prosperity Bank, in a statement.

"The customers will be able to go about their business as usual; they will be able to access their money and use their ATM/debit card, Internet banking, bill pay service or other electronic banking services beginning Saturday morning," said Rollins.

In Friday's announcement, the FDIC said that the cost to the Deposit Insurance Fund will be between $1.4 billion and $1.6 billion.

Smaller regional banks have been under pressure