Franklin Bank files Chapter 7 bankruptcy

Franklin Bank files Chapter 7 bankruptcy Franklin Bank SSB, the lending major found by mortgage securities pioneer Lewis Ranieri, has filed for bankruptcy, the Houston-based company said in a Securities and Exchange Commission filing today.

The lender said it filed a Chapter 7 case in Delaware bankruptcy court, indicating liquidation.

Franklin Bank, which last week was closed by state and federal regulators, said it has less than $500,000 of assets, and between $100 million and $500 million of liabilities, including some convertible notes and preferred securities.

An official release stated that Ranieri, who had been Franklin's chairman, and all other bank officers, directors apart from Chief Executive Alan Master have already resigned from their designations.

Franklin is the third-largest U.S. lender to fail this year, after Washington Mutual Inc. and IndyMac Bancorp Inc., which both also filed for bankruptcy protection.

Franklin had $5.1 billion of assets as of September 30. Recently, Prosperity Bank has acquired its $3.7 billion of deposits and 46 branches. Franklin's operated locations are Wharton, College Station, Bryan, Austin and Beaumont, among other Texas cities.

Prosperity Bank is a subsidiary of Houston-based regional financial holding company Prosperity Bancshares Inc., which was started operation in 1983.