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Sanderson State Bank, Sanderson, Texas, was closed today by the Texas Department of Banking, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The Pecos County State Bank, Fort Stockton, Texas, to assume all of Sanderson State Bank's deposits, including those that exceeded the deposit insurance limit.

Sanderson State Bank's sole office will reopen on Monday as a branch of The Pecos County State Bank. All depositors of the failed bank will automatically become depositors of The Pecos County State Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their existing banking relationship to retain their deposit insurance coverage. Customers of the failed bank should continue to use the same banking location until they receive further information from The Pecos County State Bank.

Over the weekend, depositors of Sanderson State Bank will have access to all of their money by writing checks or using ATMs or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of December 3, 2008, Sanderson State Bank had total assets of $37 million and total deposits of $27.9 million. The Pecos County State Bank agreed to assume all of the deposits for a .55 percent premium. In addition to assuming all of the failed bank's deposits, The Pecos County State Bank will purchase approximately $3.8 million of assets, and have the option to purchase owned premises and equipment. The FDIC will retain the remaining assets for later disposition.

Customers who have questions about today's transaction can call the FDIC toll-free at
1-866-782-1766. This phone number will be operational this evening until 9:00 p.m., CST; on Saturday from 9:00 a.m. to 6:00 p.m., CST; on Sunday from noon until 6:00 p.m., CST; and thereafter from 8 a.m. to 8 p.m., Central. Interested parties can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/sanderson.html.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $12.5 million. The Pecos County State Bank's acquisition of all the deposits was the least costly resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Sanderson State Bank is the 25th bank to fail in the nation this year, and the second in Texas. The last bank to be closed in the state was Franklin Bank, SSB, Houston, TX, on November 7, 2008.

Haven Trust Bank, Duluth, Georgia, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Branch Banking & Trust (BB&T), Winston-Salem, NC, to assume all of Haven Trust's deposits, including those that exceeded the insurance limit.

The four branches of Haven Trust will reopen on Monday as branches of BB&T. All the depositors of Haven Trust will automatically become depositors of BB&T. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their existing banking relationship to retain their deposit insurance coverage. Customers of the failed bank should continue to use their existing branches until they receive further information from BB&T.

Over the weekend, depositors of Haven Trust can access all their money by writing checks or using ATMs or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of December 8, 2008, Haven Trust had total assets of $572 million and total deposits of $515 million. BB&T agreed to assume all of the deposits for $112,000. In addition to assuming all of the failed bank's deposits, BB&T will purchase approximately $55 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.

Customers who have questions about today's transaction can call the FDIC toll-free at 1-866-782-1402. This phone number will be operational this evening until 9 p.m., EST; on Saturday from 9 a.m. to 6 p.m., EST; on Sunday from noon to 6 p.m., EST; and thereafter from 8 a.m. to 8 p.m., EST. Interested parties can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/haventrust.html.

It is important to note that neither the FDIC as receiver nor BB&T as the acquiring institution will e-mail customers of Haven Trust asking them to validate their deposits or to request personal, confidential information, such as account numbers, social security numbers or driver's license numbers. Customers will not be asked to revalidate passwords, deposit accounts or deposit insurance. If customers receive e-mails asking for such personal information, they should consider the e-mails fraudulent and should not respond.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $200 million. The BB&T's acquisition of all deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Haven Trust is the 24th bank to fail in the nation this year, and the fifth in Georgia. The last bank to be closed in the state was First Georgia Community Bank, Jackson, GA, on December 5, 2008.

First Georgia Community Bank, Jackson, Georgia, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with United Bank, Zebulon, Georgia, to assume all of the deposits of First Georgia Community Bank.

The four branches of First Georgia Community Bank located in Jackson, Covington, Griffin and Locust Grove will reopen on Saturday as branches of United Bank. Depositors of the failed bank will automatically become depositors of United Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of the failed bank should continue to use their existing branches until further information is received from United Bank.

Over the weekend, depositors of First Georgia Community Bank access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of November 7, 2008, First Georgia Community Bank had total assets of $237.5 million and total deposits of $197.4 million. United Bank agreed to assume all the deposits for a .811 percent premium. In addition to assuming all of the failed bank's deposits, United Bank will purchase approximately $60.6 million of assets. The FDIC will retain the remaining assets for later disposition.

Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-930-5172. This phone number will be operational this evening until 9 p.m., Eastern; on Saturday from 9 a.m. to 6 p.m., Eastern; and on Sunday 12 p.m. to 6 p.m., Eastern; and thereafter from 8 a.m. to 8 p.m. Interested parties can also visit the FDIC's Web site at http://wwwdev/bank/individual/failed/firstga.html.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $72.2 million. United Bank's acquisition of all deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. First Georgia Community Bank is the 23rd bank to fail in the nation this year, and the fourth in Georgia. First Georgia Community Bank, the failed bank, is not affiliated with First Georgia Banking Company. The last bank to be closed in the state was The Community Bank, Loganville, GA, on November 21, 2008.

FDIC Reports Continued Deterioration in Earnings Performance, Asset Quality

 

The FDIC’s third quarter, 2008 Quarterly Banking Profile was released on November 25, 2008. The industry snapshot shows a continuation of negative trends, including depressed earnings and deteriorating asset quality. The report also provides detail on the proposed changes to the FDIC’s assessment system.

 

Earnings continue to slide

 

Greater than 58 percent of member institutions reported year-over-year declines in quarterly net income, while 64 percent generated a reduced quarterly return on assets (ROA). Profitability issues appear to be magnified at the larger banks; institutions with assets greater than $1 billion experienced a 47-basis point, year-over-year ROA decline. Community banks fared somewhat better with a 25-basis point decline. Nearly one-quarter of member banks failed to earn a profit in the quarter; this is the highest level for this metric since the fourth quarter of 1990.

 

Income a mixed bag  

 

Member banks reported declines in several categories of noninterest income, including securitization income and gains on sales of assets other than loans. Losses on sales of bank-owned real estate increased almost six-fold to $518 million. Loan sales, however, showed a marked improvement with net gains of $166 million. This compares to net losses of $1.2 billion in the third quarter of last year.

 

Net interest income also improved by 4.9 percent versus a year ago. The average net interest margin (NIM) remained flat with last quarter, but rose 2 basis points relative to the year-ago quarter. This trend was more pronounced among larger institutions.

 

Credit losses still piling up

 

As expected, expenses related to credit losses drove much of the earnings decline. Industry-wide, credit loss-related expenses topped $50 billion, eating up about one-third of the industry’s net operating revenue. Aggregate loan-loss provisions tripled from the year-ago level, reaching $50.5 billion in the quarter. Net charge-offs increased by 156.4 percent to $27.9 billion, with two-thirds of the increase related to loans secured by real estate. Charge-offs related to closed-end first and second lien mortgages, real estate construction and development loans, and loans to commercial and industrial borrowers all showed increases well in excess of 100 percent. The quarterly net charge-off rate jumped 10 basis points sequentially to 1.42 percent; this is the highest quarterly net charge-off rate since 1991.

 

Past-due loans still rising

 

Noncurrent loans and leases, defined as being 90 days or more past due or in nonaccrual status, increased by $21.4 billion sequentially to $184.3 billion. Nearly half of this growth came from closed-end first and second lien mortgages. The percentage of loans and leases that are noncurrent rose to 2.31 percent, which is the highest percentage recorded since 1993.

 

Loan-loss reserves ticked up by 8.1 percent, bringing the ratio of reserves to total loans and leases to 1.95 percent. Reserves to noncurrent loans fell to $0.85, which is the lowest level recorded since the first quarter of 1993.

 

Watch list grows 46 percent, number of new charters shrinks

 

Nine banks collapsed during the third quarter, and another seventy-three were merged into other institutions. While the number of failures marks a high point since the third quarter of 1993, the growth of the FDIC’s list of problem banks indicates that there are still rough times ahead; an additional fifty-four banks were added to the watch list, bringing the total number of problem banks to 171.

 

Twenty-one new institutions were chartered during the quarter. This marks a decline from the twenty-four new charters that were added last quarter.

 

Noninterest-bearing deposits rise, DIF reserve ratio declines

 

The total assets of all FDIC-insured member institutions rose 2.1 percent to $273.2 billion during the quarter. Most of the increase, some 57 percent, came from noninterest-bearing deposits. Interest-bearing deposits on the other hand showed a slight decrease of 0.3 percent.

 

Insured deposits continued an upward trend, rising 1.8 percent on top of a second quarter increase of 0.6 percent. Fifty-eight percent of member institutions reported an increase in insured deposits, 42 percent reported a decrease and the remainder reported no change.

 

The Deposit Insurance Fund decreased by $10.6 billion, primarily due to an $11.9 billion increase in loss provisions for bank failures. As of September 30, 2008, the reserve ratio was 0.76 percent, down 25 basis points from three months prior. Nine insured institutions failed during the quarter, bringing year-to-date failures to thirteen; those thirteen failed institutions had combined assets of $348 billion and are estimated to have cost the DIF $11 billion.

 

Restoration plan involves increases, changes to risk-based assessments

 

The FDIC adopted a restoration plan on October 7 to increase the DIF’s reserve loss ratio to 1.15 percent within five years, as required by Federal Deposit Insurance Reform Act of 2005. In accordance with the plan, the FDIC Board approved the publication of a notice of proposed rule making to increase the assessment and shift a larger proportion of that increase to riskier institutions. For the first quarter of 2009, the FDIC seeks to increase assessment rates by 7 basis points across the board.

 

The proposed assessment system, to be effective April 1, 2009, establishes base assessment rates ranging from 10 to 45 basis points for Risk Categories I through IV. Those base rates would then be adjusted for unsecured debt, secured liabilities and brokered deposits. The adjusted assessment rates would range from 8 to 77.5 basis points. 

 

 

U.S. Bank, National Association, Minneapolis, MN, acquired the banking operations, including all the deposits, of Downey Savings and Loan Association, F.A., Newport Beach, CA, and PFF Bank & Trust, Pomona, CA, in a transaction facilitated by the Federal Deposit Insurance Corporation.

The combined 213 branches of the two organizations will reopen as branches of U.S. Bank under their normal business hours, including those with Saturday hours. Depositors will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.

Customers of both banks should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the organizations. Over the weekend, depositors can access their money by writing checks or using ATM or debit cards.

As of September 30, 2008, Downey Savings had total assets of $12.8 billion and total deposits of $9.7 billion. PFF Bank had total assets of $3.7 billion and total deposits of $2.4 billion. Besides assuming all the deposits from the two California banks, U.S. Bank will purchase virtually all their assets. The FDIC will retain any remaining assets for later disposition.

The FDIC and U.S. Bank entered into a loss share transaction. U.S. Bank will assume the first $1.6 billion of losses on the asset pools covered under the loss share agreement, equal to the net asset position at close. The FDIC will then share in any further losses. Under the agreement, U.S. Bank will implement a loan modification program similar to the one the FDIC announced in August stemming from the failure of IndyMac Bank, F.S.B., Pasadena, CA.

The loss-sharing arrangement is expected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers as they will maintain a banking relationship.

Customers who have questions about today's transactions can call the FDIC toll free. Customers of Downey Savings should call 1-800-930-5169, and for PFF Bank 1-800-930-6827. The phone numbers will be operational this evening until 9:00 p.m. pacific; on Saturday from 8:00 a.m. to 6:00 p.m. pacific; and on Sunday noon until 6:00 p.m. pacific and thereafter from 8:00a.m. to 8:00 p.m. pacific. Interested parties can also visit the FDIC's Web site. For Downey Savings they can visit http://www.fdic.gov/bank/individual/failed/downey.html and for PFF Bank http://www.fdic.gov/bank/individual/failed/pff.html.

U.S. Bank currently has 353 offices in California. Downey Savings and PFF Bank are not affiliated with each other. Downey Savings has 170 branches in California and five in Arizona, and PFF Bank has 38 branches in California.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for Downey Savings will be $1.4 billion and $700 million for PFF Bank. U.S. Bank's acquisition of all the deposits of the two institutions was the "least costly" option for the FDIC's DIF compared to alternatives.

These were the twenty first and twenty second banks to fail in the nation this year, and the fourth and fifth banks to close in California. The last bank to be closed in the state was Security Pacific Bank, Los Angeles, on November 7, 2008.

The Community Bank, Loganville, Georgia, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of Essex, to assume all of the deposits of The Community Bank.

The Community Bank's four branches will open on Monday, November 24, 2008 as Bank of Essex. Depositors of the failed bank will automatically become depositors of Bank of Essex. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.

Over the weekend, customers of The Community Bank can access their deposits by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of October 17, 2008, The Community Bank had total assets of $681.0 million and total deposits of $611.4 million. Bank of Essex purchased approximately $84.4 million of The Community Bank's assets, and did pay the FDIC a premium of $3.2 million for the right to assume the failed bank's deposits. The FDIC will retain the remaining assets for later disposition.

Customers with questions about today's transaction may contact the FDIC toll-free at 1-800-930-1904. This phone number will be operational this evening until 9:00 p.m. eastern; on Saturday from 9:00 a.m. to 6:00 p.m. eastern; on Sunday noon until 6:00 p.m.; and from 8:00 a.m. to 8:00 p.m. Monday and thereafter. They may also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/community.html.

The transaction is the least costly resolution option, and the FDIC estimates that the cost to its Deposit Insurance Fund will be between $200 million and $240 million. The Community Bank is the twentieth FDIC-insured institution to be closed nationwide, and the third in Georgia, this year.

FDIC Active in Economic Repair Efforts

 

When times are good, the FDIC’s role in maintaining trust in the U.S. banking system goes unnoticed. But now, as the country struggles to emerge from economic crisis, the FDIC’s activities are receiving a lot attention.

 

FDIC Chair Sheila Bair recently delivered a keynote speech to the John Hopkins Carey Business School. Her presentation was part of the school’s “Leaders and Legends” monthly lecture series. She used the opportunity to discuss measures the FDIC is taking to unlock the credit markets and restore faith in the banking system.

 

“To reinforce public confidence in banks and to preserve liquidity”

 

In October, the FDIC issued a temporary rule authorizing the Temporary Liquidity Guarantee Program or TLGP, which will guarantee qualified senior unsecured debt issued between October 14, 2008 and June 30, 2009; this guarantee will be in place until June 30, 2012. A second component of the TLGP guarantees non-interest bearing payment accounts.

 

The TLPG will be a self-funded program, and it will not tap the existing deposit insurance fund. Fees are structured to cover estimated costs; should there be a shortfall, it will be addressed with a special assessment charged to all insured institutions.

 

After the temporary rule was announced, the FDIC asked for and received feedback from the industry; that commentary was taken into consideration as the final rule for the TLGP was drafted. The FDIC Board is scheduled to vote on the final rule on Friday, November 21.

 

In another measure, Congress raised the deposit insurance limit from $100,000 to $250,000. This authorization was included in the Emergency Economic Stabilization Act of 2008.

 

Bair communicated that these “changes will create significant investor demand, and dramatically reduced funding costs for eligible banks and bank holding companies…provide longer maturities to secure a more stable liquidity base to support healthy and sustained lending.”

 

Bair also cautioned that the new programs would need time to make an impact. The TLPG, for example, will be felt to a greater degree after the final rule is approved. Thereafter, the program could potentially provide up to “$1.4 trillion of longer term, low-cost funding” to the banking system.

 

“We warned about sub-prime mortgage lending and the problems caused by a lack of proper underwriting standards”

 

The FDIC has also been vocal and active with respect to the issues surrounding the foreclosure crisis. Since the failure of IndyMac Bank, FSB in July, the FDIC has worked closely with IndyMac Federal to modify non-performing mortgages into performing assets.

 

The modification program involves restructuring distressed mortgages by way of interest rate reductions, amortization extensions and principal deferrals. The maximum housing-to-income ratio is 38 percent, and borrowers must document their income to qualify. This framework was designed to serve two primary objectives: to maximize loan values for investors and to allow borrowers to keep their homes.  

 

Bair says the program is effective. So far, IndyMac Federal has modified 5300 mortgages and has several thousand more modifications in process. From this experience, the FDIC has produced a “Mod in a Box” guide—to provide the industry with a how-to guide on initiating and managing a systemic loan modification program. The IndyMac Loan Modification Model is now available on the FDIC’s website (http://www.fdic.gov/consumers/loans/loanmod/loanmodguide.html).

 

Quarterly Banking Profile

 

The FDIC will hold a press conference to discuss third quarter earnings for the bank and thrift industry on Tuesday, November 25 at 10 a.m. Bair will speak first on industry earnings and policy issues. After a question-and-answer session, FDIC Chief Economist Richard Brown, Associate Director for Financial Risk Management Diane Ellis, Senior Banking Analyst Ross Waldrop and Associate Director for Large Bank Supervision John Corston will highlight the details of the FDIC’s Quarterly Banking Profile.

By Carolyn C. Dowdy, President, Bank Project Solutions.  Member of CBA of GA

As our world, as we use to know it, spins out of control (out of our control), the choices we make on how we perceive it affects not only our daily happiness, but everyone around us.

During this time of uncertain many of us are focusing on the negatives.  If we think, talk, and preach gloom and doom that is probably what we will get....not to mention the message radiating through our organizations. 

Consider focusing on the positives and things within our control.  For example, lift your staff up and make them feel as important as that customer who walks through the door.   I venture to say the organizations that start focusing on the positives will be the winners when we get out of the slump!

Here are a few ideas to enhance positive results:

• Have weekly or monthly pep rallies and have each staff member bring two positive ideas to lift the spirits and mood of the institution (no negative comments please).
• You might ask your staff to bring ideas to grow the organization that doesn't cost money. You will be surprised at the answers.
• After you get a list of ideas, form a team to implement the best ideas. Have the team meet regularly and reward them with Great Job!....pat on the back....go to lunch with the President...give them a "Certificate" that says Great Job!
• Maybe we have a hiring freeze and will not get a salary increase this year, think of ways to lift up the mood of your staff. Start making a list of non-monetary rewards and implement them immediately. You will be surprised how far non-monetary rewards go with your employees.

This quote has impacted my life in a very positive way and I will share it with you.  "Look at a situation and ask yourself if you have control, if the answer is no let it go!" Anonymous  I added more to the quote: "I focus my energy on things I have control of!"

Another quote:

"Our subconscious minds have no sense of humor, play no jokes and cannot tell the difference between reality and an imagined thought or image. What we continually think about eventually will manifest in our lives". Sidney Madwed: Famous Quotes about Life

Deal with the problems, resolve them with the resources available, and stay focused on the positives.  It is important to keep our staffs motivated, content, and happy during these uncertain times.  Just a pat on the back and positive talk may do the trick.

Security Pacific Bank, Los Angeles, California, was closed today by the Commissioner of the California Department of Financial Institutions, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Pacific Western Bank, Las Angeles, California, to assume all of the deposits of Security Pacific.

The four branches of Security Pacific will reopen on Monday as branches of Pacific Western. Depositors of the failed bank will automatically become depositors of Pacific Western. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of both banks should continue to use their existing branches until Pacific Western can fully integrate the deposit records of Security Pacific.

Over the weekend, depositors of Security Pacific can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of October 17, 2008, Security Pacific had total assets of $561.1 million and total deposits of $450.1 million. Pacific Western agreed to assume all the deposits for a two percent premium. In addition to assuming all of the failed bank's deposits, Pacific Western will purchase approximately $51.8 million of assets. The FDIC will retain the remaining assets for later disposition.

Customers who have questions about today's transaction can call the FDIC toll free at 1-866-934-8944. This phone number will be operational this evening until 9 p.m. pacific; on Saturday from 9 a.m. to 5 p.m. pacific; and on Sunday noon until 5 p.m. pacific and thereafter from 8 a.m. to 8 p.m. pacific. Interested parties can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/securitypacific.html.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $210 million. Pacific Western's acquisition of all deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Security Pacific is the nineteenth bank to fail in the nation this year, and the third in California. The last bank to be closed in the state was First Heritage Bank, National Association, Newport Beach, on July 25, 2008.

Franklin Bank, S.S.B., Houston, Texas, was closed today by the Texas Department of Savings and Mortgage Lending, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Prosperity Bank, El Campo, Texas, to assume all of the deposits, including those that exceeded the insurance limit, of Franklin Bank.

Franklin Bank's 46 offices will reopen as branches of Prosperity Bank under their normal hours, including those with Saturday hours. Depositors of the failed bank automatically become depositors of Prosperity Bank. Customers of both banks should continue to use their existing branches until Prosperity Bank can fully integrate the deposit records of Franklin Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.

As of September 30, 2008, Franklin Bank had total assets of $5.1 billion and total deposits of $3.7 billion. Prosperity Bank agreed to assume all the deposits, including the brokered deposits, for a premium of 1.7 percent. In addition to assuming all of the failed bank's deposits, Prosperity Bank will purchase approximately $850 million of assets. The FDIC will retain the remaining assets for later disposition.

Customers who have questions about today's transaction can call the FDIC toll free at 1-800-591-2845. This phone number will be operational this evening until 9 p.m. central; on Saturday from 9 a.m. to 6 p.m. central; and on Sunday noon until 6 p.m. central and thereafter from 8 a.m. to 8 p.m. central. Interested parties can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/franklinbank.html.

It is important to note that neither the FDIC as receiver nor Prosperity Bank as the acquiring institution will e-mail customers of Franklin Bank asking them to validate their deposits or to request personal, confidential information, such as account numbers, Social Security Number, driver's license number, etc. If customers receive e-mails asking for such personal information, they should consider them to be fraudulent in nature and should not respond.

The FDIC estimates that the cost of today's transaction to its Deposit Insurance Fund will be between $1.4 billion and $1.6 billion. Prosperity Bank's acquisition of all deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Franklin Bank is the eighteenth bank to fail in the nation this year, and the first in Texas since Bank of Sierra Blanca, Sierra Blanca, Texas, on January 18, 2002.