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Franklin Bank, S.S.B.

Austin, TX · Cert 26870

FDIC

Q3 2008

$5.1BAssets
$3.5BLoans
$3.7BDeposits
$175.1MEquity
Loan mix
97%RE $3.0B3%C&I $0.1B0%Consumer $0.0BQ3 2007Q3 2008
Deposit mix
93%Interest-bearing $3.4B7%Noninterest $0.3BQ3 2007Q3 2008

NIM

5.92%Q3 ’065.85%Q3 ’074.23%Q3 ’08-3%-55%

Non-interest income vs. expense

1.33%Q3 ’061.44%Q3 ’074.27%Q3 ’08+46%+329%

Executive Summary

  • Earnings: ROA of -18.47%, down 1,841 bps year over year; NIM at 0.84%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 7.15%.
  • Funding: loans stand at 95.85% of deposits as of Q3 2008.

Financial Results

Return on Assets (quarter, annualized)

-18.47%-1,841 bps YoY

Net Interest Margin (quarter, annualized)

0.84%-101 bps YoY

Efficiency Ratio (quarter, annualized)

539%+46,838 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ3 2007Q4 2007Q1 2008Q2 2008Q3 2008YoY ΔTrend
Earnings
Return on Assets-0.05%-5.09%-2.46%-7.07%-18.47%-1,841 bps
Return on Equity-0.47%-47.94%-25.91%-84.92%-328%-32,771 bps
Net Interest Margin1.85%1.83%1.43%1.08%0.84%-101 bps
Efficiency Ratio70.33%94.65%100.48%119.47%539%+46,838 bps
Non-Interest Burden1.32%6.30%3.07%6.23%5.68%+435 bps
Growth
Asset Growth (YoY)10.85%3.06%22.16%0.62%-11.18%-2,204 bps
Loan Growth (YoY)-4.20%-12.58%-1.63%-10.86%-16.50%-1,230 bps
Deposit Growth (YoY)12.74%12.13%38.01%31.98%27.23%+1,449 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.22%0.72%0.54%5.56%7.15%+692 bps
Allowance / Loans0.53%1.33%1.76%1.64%4.11%+357 bps
Allowance Coverage of NPLsn/an/an/an/an/an/an/a
Capital
Tier 1 Leverage Ration/an/an/an/an/an/an/a
Total Risk-Based Capital10.44%10.90%10.62%10.16%5.11%-533 bps
Equity / Assets11.24%10.01%8.98%7.62%3.44%-779 bps
Liquidity & Funding
Loans / Deposits146.05%138.03%119.18%101.73%95.85%-5,020 bps
Liquid Assets / Assets5.70%8.20%6.52%10.80%14.26%+857 bps
CRE / Total Capitaln/an/an/an/an/an/an/a