Franklin Bank Corp. of Houston will miss another filing deadline.
On Tuesday the $5.9 billion-asset company notified the Securities and Exchange Commission that it would not be able to file its first-quarter earnings report on time — not a surprise since it has yet to file for the fourth quarter.
Franklin delayed filing in order to conduct an internal audit on its weakening real estate portfolio, but it has an agreement with the American Stock Exchange to file its annual and fourth-quarter report by June 30.
Franklin said Friday in an SEC filing that on May 5 it received a notice from its trustee, Bank of New York Trust Co., that Franklin was in default on the indentures of the company’s 4% contingent convertible senior notes due in 2027 because of the tardiness of its annual report.
Franklin has 90 days after notice from Bank of New York Trust (a Bank of New York Mellon Corp. subsidiary) to file or it may be asked to pay the interest and unpaid principal. If asked to pay, Franklin could delay the repayment for 120 days for an additional 0.5% of interest. There was $82 million outstanding on the notes on Friday.
Franklin’s thrift subsidiary, Franklin Bank, announced May 1 that it had restated earnings on its call report with the Federal Deposit Insurance Corp. for the third and fourth quarters of 2007 and said it had a loss of $35.2 million for the first quarter of 2008.
It said the thrift had a fourth-quarter loss of $74.5 million instead of the previously reported $62.1 million loss. In the fourth quarter of 2006 it earned $24.3 million.
The holding company said early this year that it expected the fourth-quarter loss to include a goodwill writedown of about $65 million.
The thrift’s third-quarter earnings were $2.4 million instead of the previously reported $9.5 million. In the third quarter of 2006 it earned $25.3 million.
The parent company’s shares, which have been hovering at around $1 in recent days, have lost about 95% of their value in the last year.
