Franklin Reports Housing-Linked '07 Loss

Franklin Bank Corp., Houston, has reported a net loss of $45.2 million ($1.85 per share) for 2007, compared with earnings of $15.5 million ($0.65 per share) in 2006, as a result of a housing-related goodwill impairment and increase in loan loss allowance. The loan loss allowance was increased by about $23.5 million. "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," said Anthony J. Nocella, president and chief executive of Franklin Bank. The goodwill impairment, which totaled $65 million, was attributed to a low stock price "driven by these current market conditions." For the fourth quarter, the bank reported a net loss of $66.1 million, compared with a net loss of $4 million in the fourth quarter of 2007. Mortgage veteran Lewis S. Ranieri is the chairman of Franklin's board of directors. Franklin Bank can be found on the Web at http://www.bankfranklin.com.