They're the latest casualties of the mortgage crisis debacle.
Houston-based Franklin Bank and Security Pacific of Los Angeles were seized by federal regulators Friday, and both were on a little known watch list of institutions predicted to fail.
It's called the "Texas Ratio" and it's a formula wall street analyst have used to gauge the health of the nation's banks.
Nearly 200 troubled institutions made the list including Security Pacific and Franklin along with twelve others that have folded in the last four months.
But while Franklin was the third largest us bank to go under this year, smaller banks have traditionally weathered this storm.
While bigger banks relied heavily on speculation, smaller banks remained conservative.
Most smaller banks rely on personal interaction as much as credit scores and finances.
85-hundred community banks in this country provide 35 percent of new capital to small businesses.

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