Regulators have now closed 18 banks this year, with the Texas Department of Savings and Mortgage Lending shutting down Houston-based Franklin Bank and naming the Federal Deposit Insurance Corporation (FDIC) as Receiver
The Federal Deposit Insurance Corp. was appointed receiver of Franklin Bank, which had $5.1 billion in assets and $3.7 billion in deposits as of Sept. 30. The agency said depositors of Franklin Bank will continue to have full access to their deposits, which will continue to be insured by the FDIC.
You can read the FDIC press release at the official web page.
The FDIC said customers’ access to their money will not be interrupted over the weekend:
The FDIC said all of the bank’s deposits will be assumed by Prosperity Bank of El Campo, Texas. Its 46 offices will reopen as branches of Prosperity Bank with their normal business hours, including those that open on Saturday.
More information is available at the FDIC web page.
Franklin Bank was controlled by former Solomon Brothers Inc. vice chairman, Lewis Ranieri,
Ranieri said in December 2006 at an industry conference that investors in mortgage-backed bonds had no idea of the risks they were taking. He later predicted again that defaults on subprime mortgages in the U.S. would be worse than analysts estimated.
He was right. I would love to hear what he’s thinking now, but:
Ranieri’s assistant said he wasn’t available for comment.