US federal regulators have two more US banks -  Houston-based Franklin Bank and Los Angeles-based Security Pacific Bank - taking the total number of bank failures so far this year to 19.

Texas-based Prosperity Bank will assume the $3.7 billion in deposit held by the failed Franklin Bank and purchase $850 million in assets, leaving the Federal Deposit Insurance Crop to dispose of remaining $4.25 billion, the Wall Street Journal reported.

Los Angeles-based Pacific Western Bank will assume  the $450 million of de[posits held by Security Pacific Bank. The cost to insurance fund is estimated at $210 million.

The Federal Deposit Insurance Corp was appointed receiver of Franklin Bank and Security Pacific Bank.

Franklin Bank had $5.1 billion in assets and $3.7 billion in deposits as of 30 September while Security Pacific Bank had $561.1 million in assets and $450.1 million in deposits as of 17 October.

Lewis Ranieri, co-founder and chairman of parent Franklin Bank Corp, is credited with inventing mortgage-backed securities two decades ago.

The repackaging of home loans as bonds that are sold to investors was at the heart of the mortgage and credit crises. The audit committee of the bank's board had last year found certain weaknesses in accounting, disclosure and other issues relating to residential real estate loans.

Franklin Bank Corp on Sunday said it had received proposals for transactions to strengthen its capital position and was keeping regulators informed of the ' progress.

The FDIC said all of Franklin Bank's deposits will be assumed by Prosperity Bank of El Campo, Texas. Its 46 offices will reopen as branches of Prosperity Bank with their normal business hours. Prosperity Bank also will acquire about $850 million of the failed bank's assets.
All of Security Pacific's deposits will be assumed by Pacific Western Bank of Los Angeles. Its four offices will reopen on Monday as branches of Pacific Western, a unit of PacWest Bancorp. In addition, Pacific Western will purchase around $51.8 million of Security Pacific's assets.

The FDIC will retain the remaining assets of the two banks for eventual sale.