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FRANKLIN BANK ANNOUNCES SECOND-QUARTER RESULTS, STRONGER CORE EARNINGS AND ASSET QUALITY

 SOUTHFIELD, Mich., July 20 /PRNewswire/ -- Franklin Bank, N.A. (NASDAQ: FSVB) announced net income of $503,046 for the quarter ended June 30, 1993. For the same quarter in 1992, net income was $490,882. After payment of the preferred dividend, net income per common share was $0.20 ($0.18 fully diluted) for the quarter ended June 30, 1993, compared to $0.26 ($0.25 fully diluted) for the same quarter last year. The per-share earnings figures reflect 1,370,031 common shares outstanding at June 30, 1993, while 1,017,607 common shares were outstanding at June 30, 1992.
 For the six months ended June 30, 1993, net income was $1,109,634, or $0.48 per common share. This is a 21.5-percent improvement compared to net income of $913,455 or $0.46 per common share for the same period in 1992.
 Core banking income, defined as net interest income and fee income, excluding securities transaction fees, increased 19 percent in quarter- to-quarter comparisons. Core income for the quarter ending June 30, 1993, was $3,532,677 up from $2,957,691 at June 30, 1992. Net interest income rose 21 percent from $2.7 million in June 1992, to $3.2 million in June 1993. In addition, the bank's deposit service charges rose 98 percent in year-to-year comparisons. For the quarter ended June 30, 1993, Franklin's net interest margin hit a record high of 3.48 percent, up from 2.75 percent one year ago.
 "The 43-percent increase in business checking account balances this quarter, refinancing various debt at lower rates and the favorable repricing of $64 million of our certificate portfolio were key factors contributing to margin improvement," said President Read P. Dunn.
 Non-performing assets fell 28 percent to $5,368,919 at June 30, 1993, from $7,459,988 at year end. Franklin's non-performing assets to total assets ratio at June 30, 1993, was 1.39 percent, the lowest level since converting to a commercial bank in September 1991. During the second quarter, a previously restructured $2.5 million office building loan was deemed to be performing satisfactorily and was removed from the restructured loan category. "Franklin is very pleased with the improvement in non-performing assets this year," said Dunn. Consistent with the bank's historical experience, losses charged against the allowance continue to be very low.
 Total operating expenses for the quarter ending June 30, 1993, were $2,805,325 compared to $2,305,163 for the same quarter last year. To accommodate the growing number of business accounts, expansion of other bank services, opening a fourth branch and regulatory compliance requirements, Franklin's staff increased from 105 to 131 in year-to-year comparisons. As expected, compensation and benefits accounted for the majority of the increase in operating expenses.
 Total assets at June 30, 1993, were $387.2 million compared to $391.0 million at Dec. 31, 1992. Total stockholders' equity increased 3.6 percent from $23.4 million at Dec. 31, 1992, to $24.3 million at June 30, 1993.
 Franklin Bank is the only independently owned bank in Oakland County with assets between $200 million and $10 billion. The bank's executive office and one regional branch is located in Southfield, with other regional branches in Birmingham and Grosse Pointe Woods, Mich. In addition in May, Franklin opened a new Business Center in Southfield exclusively to serve its growing business customer base.
 FRANKLIN BANK, N.A.
 FINANCIAL SUMMARY
 (unaudited; dollars in thousands, except share data)
 June 30, June 30,
 Quarter Ended 1993 1992
 Interest income $7,082 $7,981
 Interest expense 3,870 5,321
 Net interest income 3,212 2,660
 Provision for loan losses 45 50
 Net income 503 491
 Net income per common share $0.20 $0.26
 Net income per common share - fully diluted $0.18 $0.25
 (1,370,031 shares outstanding at June 30,
 1993, and 1,017,607 at June 30, 1992)
 June 30, Dec. 31,
 At 1993 1992
 Assets $387,171 $391,029
 Investment securities 16,016 27,231
 Loans 327,173 327,313
 Allowance for loan losses 4,095 4,199
 Nonperforming assets 5,369 7,460
 Advances and borrowings 24,100 24,100
 Deposits 333,002 340,910
 Common stockholders' equity 15,172 14,193
 Per share 11.07 10.81
 Common shares outstanding 1,370,031 1,313,544
 Capital levels
 Tier 1 leverage $24,134 $23,269
 Ratio (pct) 6.28 5.81
 Allowance for loan losses/total loans (pct) 1.25 1.28
 Allowance/nonperforming assets (pct) 76.27 56.29
 Nonperforming assets/total assets (pct) 1.39 1.91
 June 30, June 30,
 Other Information 1993 1992
 Return on average common
 stockholders' equity (pct) 7.94 8.48
 Return on average assets before
 preferred stock dividend (pct) 0.52 0.49
 Net interest margin (pct) 3.48 2.75
 Operating expense/average assets (pct) 2.92 2.29
 Net charge-offs/average loans (pct) 0.02 0.01
 Cash dividends per share $0.05 $0.00
 Full-time employees and equivalents 131 105
 Branches 4 3
 FRANKLIN BANK, N.A.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited; dollars in thousands, except share data)
 Six Months Ended Quarter Ended
 June 30, June 30,
 1993 1992 1993 1992
 Interest income
 Interest on loans $13,378 $14,632 $6,626 $7,065
 Interest on investment
 securities 577 1,021 238 506
 Other interest and dividends 453 679 218 410
 Total interest income 14,408 16,332 7,082 7,981
 Interest expense
 Interest on deposits 7,292 9,399 3,490 4,523
 Interest on FHLB advances,
 subordinated capital notes,
 and reverse repurchase
 agreements 750 1,669 380 798
 Total interest expense 8,042 11,068 3,870 5,321
 Net interest income 6,366 5,264 3,212 2,660
 Provision for possible
 loan losses 90 120 45 50
 Net interest income after
 provision for possible
 loan losses 6,276 5,144 3,167 2,610
 Other income
 Deposit service charges 307 136 174 88
 Loan fees and servicing
 charges 264 431 146 209
 Gain on sale of participation
 certificates, mortgages,
 and securities 210 171 --- 149
 Other 145 43 99 17
 Total other income 926 781 419 463
 Other expenses
 Compensation and benefits 2,738 1,942 1,390 980
 Occupancy and equipment 834 718 406 364
 Advertising 306 289 131 156
 Professional fees 108 137 59 80
 Federal insurance premiums 400 375 200 187
 Defaulted loan expense 139 160 92 41
 Community development
 expenses 113 104 42 53
 Other 1,124 861 485 444
 Total other expenses 5,762 4,586 2,805 2,305
 Income before provision
 for federal income taxes 1,439 1,339 781 768
 Provision for federal
 income tax 509 425 278 277
 Income before cumulative
 effect of an accounting
 change 931 913 503 491
 Cumulative effect of an
 accounting change 178 --- --- ---
 Net income $1,109 $913 $503 $491
 Preferred stock dividends 408 414 204 207
 Net income applicable
 to common stock $701 $499 $299 $284
 Average shares outstanding:
 Primary 1,449,966 1,095,317 1,476,850 1,099,704
 Fully diluted 1,628,755 1,141,721 1,692,721 1,141,721
 Net income per common share:
 Primary $0.48 $0.46 $0.20 $0.26
 Fully diluted $0.43 $0.44 $0.18 $0.25
 FRANKLIN BANK, N.A.
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 (unaudited; dollars in thousands, except share data)
 June 30, Dec. 31,
 1993 1992
 Assets
 Cash $7,221 $5,078
 Interest bearing deposits 616 2,662
 Time deposits with FHLB 20,101 13,427
 Securities held for sale --- 6,879
 Investment securities (at cost, market
 equals $16,223 at 6/30/93) 16,016 20,352
 Loans receivable, net 327,173 327,313
 Accrued interest receivable 3,043 2,771
 Real estate 2,809 3,108
 Premises and equipment, net 3,642 2,819
 FHLB stock - cost 3,464 3,464
 Federal Reserve stock - cost 626 563
 Prepaid expenses and other assets 2,460 2,593
 Total assets $387,171 $391,029
 Liabilities
 Deposits $333,002 $340,910
 Advances from FHLB 16,600 16,600
 Subordinated capital notes 7,500 7,500
 Advance payments by borrowers
 for taxes and insurance 2,880 473
 Accrued interest payable 880 702
 Other liabilities 2,057 1,450
 Total liabilities 362,920 367,635
 Stockholders' Equity
 Common stock - par value $1; authorized
 6 million shares; issued and outstanding
 1,370,031 shares at June 30, 1993, and
 1,313,544 at Dec. 31, 1992 1,370 1,314
 Preferred stock - stated value $10;
 authorized 3 million shares; issued and
 outstanding 908,000 shares at March 31,
 1993, and 920,000 shares at Dec. 31, 1992 9,080 9,200
 Additional paid-in capital 10,651 10,362
 Retained earnings 3,151 2,518
 Total stockholders' equity 24,252 23,394
 Total Liabilities and Stockholders' Equity $387,171 $391,029
 -0- 7/20/93
 /CONTACT: Rebecca J. Christian or Lisa Hudy of Franklin Bank, N.A., 313-358-6462, or (outside Michigan) 800-356-8910/
 (FSVB)


CO: Franklin Bank, N.A. ST: Michigan IN: FIN SU: ERN

JG-KM -- DE013 -- 6802 07/20/93 12:11 EDT
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