Business
Franklin Financial Reports 2020 Q2 Earnings; Declares Dividend
CHAMBERSBURG, Pa., July 28, 2020 /PRNewswire/ -- Franklin Financial Services Corporation (NASDAQ: FRAF), the bank holding company of F&M Trust (the Bank),
About this update from Franklin Financial Services Corporation
[{"type":"text","content":"CHAMBERSBURG, Pa., July 28, 2020 /PRNewswire/ -- Franklin Financial Services Corporation (NASDAQ: FRAF), the bank holding company of F&M Trust (the Bank), reported consolidated earnings of $3.1 million ($0.71 per diluted share) for the second quarter ended June 30, 2020, compared to first quarter 2020 earnings of $1.7 million ($0.39 per diluted share) and second quarter 2019 earnings of $4.0 million ($0.90 per diluted share). Net income for the first six months of 2020 was $4.8 million ($1.10 per diluted share) compared with $7.2 million ($1.63 per diluted share) for the same period in 2019. \nA summary of operating results for the second quarter of 2020 are as follows: \nNet interest income was $10.3 million for the second quarter of 2020, compared to $10.6 million for the second quarter of 2019. The net interest margin was 3.26% for second quarter of 2020, compared to 3.74% for second quarter of 2019. Year-to-date net interest income was $20.6 million in 2020, compared to $20.9 million in 2019. However, the net interest margin fell from 3.80% in 2019 to 3.39% in 2020. Earning assets for year-to-date 2020 averaged $1.3 billion compared to $1.2 billion for the same period in 2019. The year-to-date average balance of the loan portfolio decreased from $977.8 million in 2019 to $962.3 million in 2020. The average balance of the commercial loan portfolio decreased $17.7 million from 2019 due to participation payoffs. The average balance of the investment portfolio increased $90.0 million as the Bank invested excess funds to counter the reduction in loans. The yield on earning assets fell by 0.66% from 4.41% in 2019 to 3.75% in 2020 as market rates decreased during the year. The decrease in the yield was the primary reason for the decline in interest income. Average interest-bearing deposits increased $69.0 million from 2019 to 2020. The cost of interest-bearing deposits fell from 0.78% in 2019 to 0.47% in 2020 as the Bank reduced deposit rates. The overall cost of funds fell from 0.65% in 2019 to 0.38% in 2020. As a result, interest expense on deposits declined $1.2 million helping to stabilize net interest income year over year. A provision for loan loss expense of $2.0 million was recorded for the second quarter of 2020 and $5.0 million year-to-date, as the economic effects of the COVID-19 pandemic caused several qualitative facto...