Thursday, November 13, 2008





Prosperity Bank gets Franklin customers
By Barbara Gartman
Monitor Staff Writer

CEDAR CREEK LAKE–Over the weekend, it was announced that Houston-based Franklin Bank was closed by order of the Texas Department of Savings and Mortgage Lending.
There are four bank branches in the Cedar Creek Lake area and seven county-wide.
But they didn’t actually shut the doors on business days, as one television station erroneously reported.
Monday morning, customers were greeted in local branches by familiar faces, free coffee and donuts, and a promise from staff members that “it’s business as usual.”
That promise was echoed by Dan Rollins, president and chief operating officer of Prosperity Bancshares, Inc.
A letter to newly acquired Prosperity customers also echoed the company’s position.
“We are committed to providing our new customers the same quality service we provide to our existing customers,” Rollins said.
The Federal Deposit Insurance Corporation (FDIC) was named receiver and entered into an agreement with Prosperity Bank of El Campo.
Prosperity Bank assumed all of Franklin’s deposits, including those that exceeded the insurance limit, Rollins explained.
Friday, an FDIC press release confirmed the transaction.
Monday, all 46 offices of Franklin Bank reopened as branches of Prosperity Bank with normal hours, including Saturday.
Prosperity Bank assumed the total assets of $5.1 billion and total deposits of $3.7 billion, for a premium of 1.7 percent.
In addition to Franklin Bank’s deposits, Prosperity Bank will purchase $850 million of its assets.
The FDIC plans to retain the remaining assets for later disposition, according to an FDIC statement.
Customers who have questions about the transaction can call the FDIC at toll free (800) 591-2845 or visit the FDIC web site at
The cost of the transaction will run between $1.4 billion and $1.6 billion, the FDIC stated, calling the transaction the least costly resolution.
Franklin Bank is the first Texas Bank to fail since 2002, when the Bank of Sierra Blanca failed.
Franklin Bank becomes the 19th bank in the nation to fail this year.
Twenty years ago, the founder of Franklin Bank, Lewis Ranieri, was known as the inventor of mortgage-backed securities, according to an Associated Press report.
However, even his own system was not enough to save his company from becoming entangled in the home-loan fiasco that led to the bank’s eventual closing.
Last spring, the company’s audit committee discovered weaknesses in accounting, disclosure and other issues relating to residential real estate loans, which invariably contributed to the company’s downfall, according to AP.
In a public relations letter to bank customers, Prosperity Bank describes itself as a “safe and sound, Texas-based, independent community bank.”
It further states that with the addition of the Franklin Bank locations, Prosperity Bank now has more than 170 banking centers across the state and has approximately $10.5 billion in assets.
The transaction moves Prosperity Bank up to the second largest independent bank in Texas, as measured by its $7.3 billion in deposits, the letter said.
“Prosperity Bank is pleased it is able to work with the FDIC and offer all of Franklin Bank’s deposit customers a new community banking home without the loss of any of their deposits,” David Zalman, chairman and chief executive officer of Prosperity Bancshares said.
“It is our goal for customers to be able to go about business as usual, accessing their money, using ATMs, Debit Cards, Internet Banking, and other services. We welcome Franklin Bank’s customers to Prosperity Bank,” Zalman said.

Redefining ‘making the grade’
School superintendents sound off on TAKS evasion
By Pearl Cantrell
Monitor Staff Reports

CEDAR CREEK LAKE–Among the changes to the state’s education policy lawmakers are due to consider when the legislative session resumes in January is how much weight TAKS scores should have on students advancing to the next grade level.
Currently, third, fifth and eighth-grade students must pass state achievement tests to advance, but a policy change being eyed would allow school districts to set their own criteria for promotion.
Passage of the TAKS test in order to graduate high school remains in place until 2011-12, when a new program launches with the freshman class, requiring them to pass end-of-course exams in order to earn a diploma. The current TAKS requirements would still be in place for grades 10-12.
Local school superintendents are split on the issue, with most tending to see the change as either beneficial or not making much difference in how their districts operate.
“Any move that increases local control is always good,” Mabank ISD superintendent Dr. Russell Marshall said. “The state sets the bar. But we always find a way to do better than that,” he added.
Dr. John Spies, Malakoff ISD superintendent tends to agree.
“There are already loop holes in the system in that regard. We handle the issue on an individual basis. If we feel a student’s lack of progress is due to a maturation problem, we might retain the child.
“However, whether a student having scholastic difficulty is retained or promoted, a remediation plan is formed to address the areas of deficiency.
“I feel that has been an important factor in our improving test scores,” Spies told The Monitor.
“We focus on the child and for every problem a plan is drawn up meant to address the deficiencies, regardless of grade, gender, or sub-grouping,” he added.
“Our goal is to give them the tools they need to fulfill whatever dreams they may have.”
Eustace ISD superintendent Dr. Coy Holcombe is all for improving the accountability system, but has mixed feelings about the proposed changes.
“If it was just one test, that would be one thing, but students are given three separate chances to pass the test,” he said. “In the younger grades, the teachers are so good about giving kids the remediation they need that seldom do students not pass it by the third try.”
Kemp ISD director of instruction and assessment agrees with Marshall about the benefits of increasing local control, but feels Kemp would have to look very closely and possibly continue following the current policy.
“We feel the SSI (Student Success Initiative) is a good incentive for students to take the test seriously,” Dr. Debra Airheart told The Monitor.
“We want to make sure all our kids are taken care of,” Kemp schools superintendent Dr. Peter Running said. “When those issues arise, we feel – at the local leve –l we know what’s best for the child.”
Policy makers are also reviewing its system for grading schools as well as students.
The TAKS system was implemented in 1994. The proposed updates are meant to consider the state’s strengthened curriculum and increased federal attention, as well as parents and educators’ criticism of the accountability system.
Another change being considered is the standardization of grade point averages and the weight given to different course offerings ranging from pre-advance placement courses to remediation classes, the arts and humanities, and sports participation.
Since Texas universities have to accept the top 10 percent of any graduating class, this becomes an issue and it also plays into who qualifies for class valedictorian.
“We should be careful about how we as a society rate the importance of one subject over another,” Spies said.

Smalley gets life in prison
Monitor Staff Reports
ATHENS–A jury found Edward Ray Smalley, 57, guilty Friday for the murder of Athens resident Tony Moore and sentenced him to life in prison with parole.
The sentence was the strongest punishment the jury could award after its 25-minute deliberation in Judge Dan Moore’s (no relation to murder victim) 173rd District Court. The sentence included an order to pay a $10,000 fine.
Smalley informed the judge he intends to appeal the court’s decision.
Tony Moore was found lying face down in the entry of his house on Sept. 3, 2007. An interrogation video showed Smalley saying Moore had begun the altercation by hitting Smalley over the head with a flashlight, and then tried kissing and groping him.
A medical examiner testified that Moore had been strangled to death and then dragged into his house to rot.
Defense attorney John Scott and Jeff Haas reminded the jury that Smalley was a U.S. Marine for more than 18 years and recommended leniency.
Assistant District Attorney Barry Spencer told the jury that Smalley’s military service was commendable, but was no excuse for the crimes he had committed.

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