HOUSTON, Nov. 2, 2008 (GLOBE NEWSWIRE) -- Franklin Bank Corp. (Nasdaq:FBTX) (AMEX:FBK-P) ("Franklin") announced today that it has received proposals regarding transactions that would strengthen the capital position of its subsidiary Franklin Bank, S.S.B. ("Bank"). Franklin is engaged in discussions with these parties about the terms and timing of any such transaction, and is keeping regulatory authorities informed of the progress of the discussions. Consummation of any one of the proposals would restore the Bank's capital category, for regulatory purposes, to the well capitalized category.
The proposals are nonbinding, subject to satisfactory completion of due diligence, approval of the final terms by the relevant boards of directors, execution of definitive agreements, receipt of certain approvals of or waivers by applicable regulatory authorities and other conditions customary in such transactions. It is expected that consummation of any transaction, which would be expected by year-end, also will require the approval of Franklin's stockholders. No assurance may be given that any agreement will be concluded or any transaction consummated.
"The challenges in the financial services industry we are facing today are without precedent," said Alan Master, CEO and President of Franklin. "Our announcement today is intended to inform stakeholders in Franklin that the board continues to seek the best opportunity for the Bank to meet and solve these challenges."
Call Report
The Bank is required to submit to the Federal Deposit Insurance Corporation (the "FDIC"), on a quarterly basis, its Consolidated Reports of Condition and Income, referred to herein as "call reports." The Bank's call reports are prepared in accordance with instructions issued by the Federal Financial Institutions Examination Council and include a balance sheet, income statement, changes in equity capital and other supporting schedules as of the end of the period covered by each call report. The publicly available portions of the Bank's call reports are available on the FDIC's website at http://www4.fdic.gov/call_tfr_rpts/.
On October 30, 2008, the Bank submitted to the FDIC a call report as of and for the nine months ended September 30, 2008 (the "September Call Report"). The September Call Report indicates that, as of September 30, 2008, the Bank's capital category for purposes of the prompt corrective action provisions of Section 38 of the Federal Deposit Insurance Act is significantly undercapitalized. Additionally, the Bank intends to submit to the FDIC an amended call report as of and for the six months ended June 30, 2008, which is expected to show that as of that date the Bank's capital category was significantly undercapitalized.
