Lake Travis View

By Eleni Himaras
reporter@ltview.com
For now, Franklin Bank customers will continue using their regular bank, but by early 2009, they will all be clients of Prosperity Bank.

Prosperity acquired the bank and all of its retail banking assets on Nov. 7. Currently, all Franklin Bank locations are still in operation during their normal business hours and depositors can still use their debit cards, checks and online banking services.
“Franklin customers need to continue at Franklin locations and Prosperity customers need to continue to bank at Prosperity banking centers,” said Prosperity Bank Central Texas Retail President Mike Meyer. “We have not consolidated operational software yet.”
Meyer said the company expects the software to be consolidated by the first quarter of 2009. It is at that point, he said, that Prosperity will look into consolidating locations.
“Where we have duplicate locations, there will be some combinations. Our intention is to absorb those employees and take them and transfer them to existing operations,” he said.
Franklin Bank is the 18th bank to fail this year and the first in Texas since Bank of Sierra Blanca went under in January, 2002.
Meyer said depositors should not believe that this is a sign of industry-wide peril for Texas banks.
“Franklin had a significant operation outside of the state of Texas for large real estate transaction-type loans and were involved in the mortgage industry outside of Texas,” he said.
It was those operations that led the bank to go under and Prosperity did not buy any of those assets from the failed bank. They only bought the community and retail banking centers in Texas, which Meyer said were extremely strong.
“We’re excited about their employees, their staff and their customer base. The failure of Franklin had nothing to do with their community banking centers,” he said.
Meyer said that Prosperity is still very strong despite the economic climate because of its competitive rates, strong tier-one capital base, consistency in loan policy, and commitment to building strong relationships with clients.
The Texas Department of Savings and Mortgage Lending closed the Franklin Bank of Houston and the Federal Deposit Insurance Corporation was named receiver. Prosperity Bank of El Campo assumed all of the deposits, including those that exceeded the insurance limit, buy paying a premium to insure those deposits.
“Prosperity stepped forward and paid a premium to ensure that everything was covered,” he said.
Franklin Bank had total assets of $5.1 billion and Prosperity assumed the $3.7 billion of deposits within that. Along with the deposits, Prosperity Bank purchased $850 million in assets. The FDIC is retaining the remaining assets for a later disposition.
Prosperity is already heavily involved in the Lakeway community, often sponsoring local charity events, including the recent Taste of Lake Travis dinner that accompanied the annual Chamber of Commerce Golf Tournament.
“You can continue to expect us to continue that community involvement — and that’s why the Franklin marriage makes a lot of sense. They have a community banking philosophy and we do as well,” he said.
Franklin Bank has 46 offices in Texas, including 14 in Central Texas.