Franklin Bank Corp. of Houston announced Wednesday that it had received commitments to sell $23.3 million of common stock to a group of insiders.
The $5.3 billion-asset company said it would use the proceeds to boost capital at its thrift subsidiary, Franklin Bank, and for general corporate purposes.
The company sold the shares at $15.70 each to a group of investors, officers, employees, and directors.
SMH Capital Inc. acted as placement agent for the stock sale, which Franklin announced this year.
Franklin officials did not return calls for comment by press time.
Brian Klock, an analyst in the Atlanta office of KBW Inc.'s Keefe, Bruyette & Woods, Inc., said that Franklin raised capital because its tangible equity had fallen to about 3.5% of assets - well below the norm for companies its size with healthy loan portfolios.
Franklin has said it wants to boost that figure to 4.5% by the end of the first quarter of next year. Mr. Klock estimated it would have to raise an additional $110 million to get there.
This year Franklin raised about $100 million in a convertible bond offer to fund the acquisition of the $540 million-asset First National Bank of Bryan. That purchase closed last month.
Shares of Franklin Bank Corp. fell 1% on Wednesday, to close at $15.58.
