Housing market 'turmoil' affects Franklin Bank
Credit losses were blamed for Franklin Bank Corp.'s net loss in the fourth quarter.
The Houston bank holding company late Thursday reported a net loss of $64.5 million, or $2.64 per share, on total interest income of $85.9 million, for the three months ended Dec. 31, 2007. That compared with a net loss of $2.4 million, or 17 cents per share, on total interest income of $81.8 million, for the same quarter in 2006.
Franklin Bank (NASDAQ: FBTX) said part of the loss was due to a $23.5 million loan-loss allowance increase.
"During the fourth quarter of 2007 we significantly increased our allowance for credit losses by approximately $23.5 million," said Anthony Nocella, president and chief executive officer. "While this increase obviously had a negative impact on our quarterly and yearly earnings, it was necessary and prudent given the turmoil in the housing markets nationwide, which has negatively impacted our homebuilder customers and many single-family borrowers."
The company also took a goodwill impairment of $65 million as a result of its stock price, which reached a new 52-week low of $3.88 per share in early December.
For the year, Franklin Bank had a net loss of $38.8 million, or $1.85 per share, on total interest income of $331.6 million, compared with net income of $19.4 million, or 65 cents per share, on total interest income of $291.1 million, in 2006.
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