Security Pacific, which reported total assets of $561.1 million and deposits of $450.1 million, has been taken over by San Diego-based Pacific Western Bank, which listed $4.4 billion in assets as of Sept. 30 and operates 60 branches throughout Southern California. Security Pacific operated four branches, which will reopen today as branches of Pacific Western.

Franklin Bank, which reported total assets of $5.1 billion and total deposits of $3.7 billion, has been taken over by Prosperity Bank of Houston, which reported $6.78 billion in assets and operated 129 branches as of Sept. 30. Franklin Bank operated 46 offices, which will reopen today as branches of Prosperity Bank.

The FDIC estimates that the cost to its deposit insurance fund for the two bank closings will be $210 million for Security Pacific and between $1.4 billion and $1.6 billion for Franklin Bank. The Security Pacific that failed is not related to the former Security Pacific Bank, also based in Los Angeles, which merged with Bank of America in 1992 in what was one of the country's largest bank mergers up until that time.

Both Pacific Western Bank and Prosperity reported profits in their third-quarter filings with the SEC, although in both cases the profits declined. Pacific Western, through its holding company PacWest Bancorp, posted earnings of $9.6 million and 35 cents per share, down from $12.8 million and 47 cents per share in the second quarter. The bank attributed the lower earnings mainly to higher provisions for credit losses.

Prosperity Bank's holding company, Prosperity Bancshares Inc., reported earnings of $15.44 million and 33 cents per share for the latest quarter, down from $23.84 million and 54 cents per share for the same period in 2007. The decrease was primarily due to a $9.12-million after-tax charge on Fannie Mae and Freddie Mac securities that have declined in value.

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L.A., Houston Banks Fail; Total Hits 19

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