Franklin Bank Corp., a thrift holding company based in Houston, has reported that its performance in the fourth quarter was adversely affected by a $5.8 million nonperforming mortgage banker finance loan.The company did not identify the borrower, which it said has ceased operations and is under investigation by federal authorities for possible fraud and other claims. Franklin added that the loan is "potentially collateralized by single-family residential mortgage loans." It set aside a reserve of $4.4 million, or $0.13 per share, to cover potential losses. Still, Franklin posted net income of $26.3 million ($1.13 per share) for the year and $4.7 million ($0.19 per share) for the fourth quarter. Net of tax, the reserve had an impact of $2.8 million on Franklin's earnings.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry