Franklin Financial Services Corporation · NASDAQ:FRAF
Franklin Financial Services — Q3 2024 Earnings Presentation
32 slides from Franklin Financial Services's earnings presentation, November 2024
Slide 1: Investor Presentation Third Quarter 2024 Highlights
Investor Presentation Third Quarter 2024 Highlights
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements appearing herein which are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements refer to a future period or periods, reflecting management’s cu
Slide 3: CEO Comments
CEO Comments We were able to post strong third quarter operating results with very little noise that moved the needle up or down. We are starting to see the benefits of the strong loan growth that we realized last year into this year, and we have been able, despite the headwinds of volatile interest
Slide 4: Why Invest in Franklin Financial?
Why Invest in Franklin Financial? • Franklin Financial Services Corporation (FRAF) is a premier, $2.2 billion, bank franchise located in South-Central Pennsylvania and the northern tier of Maryland • Franklin Financial is a company… • That is focused on building shareholder value by investing in tec
Slide 5: Mission, Vision & Core Values
Mission, Vision & Core Values Mission Statement Delivering the right financial solutions from people you know and trust. Vision We are committed to remaining independent by growing our bank to meet the increasing needs of our employees, customers, communities, and shareholders. We strive to be a fin
Slide 6: Overview of Franklin Financial
Overview of Franklin Financial • Franklin Financial, which was formed in 1983, is a holding company headquartered in Franklin County, PA • Franklin Financial’s wholly-owned subsidiary, F&M Trust, was founded in Chambersburg, PA in 1906 • Total assets of the Company were $2.15 billion as of September
Slide 7: Trade Area Expansion
Trade Area Expansion 23 Locations Serving South Central PA and Washington County MD - e Primary Trade Area n Harrisburg e © Hencquartors Expanded Trade Area e@ C86 Offering Wealth Management, Commercial Financing, and e F e Residential Lending Services a oe. ee e e
Slide 8: Experienced and Cohesive Executive Team
Experienced and Cohesive Executive Team Years of Banking Executive Title Joined F&M Trust Prior Experience Experience Fulton, Centra Bank, BlueRidge Bank, Timothy G. Henry President & Chief Executive Officer 42 2016 Susquehanna Bank, BB&T Mark R. Hollar Executive Vice President, Chief Financial Offi
Slide 9: Experienced and Cohesive Executive Team
Experienced and Cohesive Executive Team Years of Banking Executive Title Joined F&M Trust Prior Experience Experience Hagerstown Trust, Columbia Bank, Louis J. Giustini Senior Vice President, Chief Retail Services Officer 36 2022 Fulton Bank Karen K. Carmack, DM Senior Vice President, Chief Human Re
Slide 10: A Year of Growth
A Year of Growth GROWTH SELECTED HIGHLIGHTS PERCENTAGE KEY STATISTICS +17.2% $2.151 Billion as of 9/30/2024 Total Assets $1.836 Billion as of 12/31/2023 +8.7% $1.348 Billion as of 9/30/2024 Net Loans $1.241 Billion as of 12/31/2023 +12.1% $1.724 Billion as of 9/30/2024 Total Deposits $1.538 Billion
Slide 11: Income Growth
Income Growth Net Interest Income (Millions) Non-Interest Income1 (Millions) $16,000 $5,000 $14,000 $4,500 $4,000 $1,035 $12,000 $3,500 $973 $10,000 $597 $3,000 $568 $8,000 $14.7 $2,500 $628 $13.7 $649 $193 $6,000 $2,000 $33 $1,500 $4,000 $1,000 $2,097 $1,783 $2,000 $500 $0 $0 9/30/2023 9/30/2024 9/
Slide 12: Outlook
Outlook • The Company is continuing to grow by leveraging our past investments in human capital as well as our physical, technological, and sales infrastructure including: • Integration of Salesforce into sales, operations, and marketing • Expanding our presence in the Pennsylvania and Maryland mark
Slide 13: Outlook
Outlook • Deposit balances should continue to grow subject to the bank’s efforts to control interest expense and manage liquidity needs • Market pressure on deposit rates and competition for high-quality lending relationships may have an adverse effect on NIM • The negative effect of the Accumulated
Slide 14: Summary
Summary • The Company continues to be well capitalized and sufficiently liquid to successfully develop new commercial relationships • Asset quality is good, and the Company is well provisioned for losses should they occur in future quarters due to economic factors • The Company is actively working t
Slide 15: Financial Updates
Financial Updates Third Quarter Ended September 30, 2024 15
Slide 16: Balance Sheet Highlights
Balance Sheet Highlights Quarter Quarter Ended Ended Year Ended Year Ended Dollars in Thousands (000’s) 9/30/2024 6/30/2024 12/31/2023 12/31/2022 Total Assets $2,151,363 $2,039,126 $1,836,039 $1,699,579 Cash and Cash Equiv. $236,317 $179,727 $23,140 $64,899 Investments AFS $466,485 $454,465 $472,503
Slide 17: Investment AFS Portfolio
Investment AFS Portfolio $600,000 $500,000 $65,950 $104,005 $106,052 Fair Value ($000’s) $400,000 $99,273 $150,935 $300,000 $132,591 $123,783 $120,702 $24,239 $23,198 $23,688 $24,321 $200,000 $155,455 $138,618 $134,701 $139,722 $100,000 $90,257 ($61,497) $74,091 $73,020 $75,688 ($49,416) ($49,342) (
Slide 18: Diversified Loan Portfolio
Diversified Loan Portfolio Loans Outstanding1 $1,600,000 10% $34,825 9% $1,400,000 $35,637 $35,373 8% $1,200,000 $207,219 $185,312 $37,486 $160,612 7% $114,775 $111,410 $1,000,000 $115,018 6% Loan Yield $113,629 5.57% 5.61% ($000’s) 5.16% $118,443 $294,004 $315,373 $800,000 $275,216 5% 4.14% $218,46
Slide 19: Largest Commercial Real Estate Concentrations
Largest Commercial Real Estate Concentrations CRE Concentrations $500,000 $450,000 $63,627 $65,508 $400,000 $62,439 $76,027 $350,000 $76,832 $43,812 $68,478 $300,000 ($000’s) $92,396 $55,428 $90,341 $250,000 $87,137 $200,000 $58,382 $100,519 $92,219 $150,000 $80,670 $81,283 $100,000 $120,180 $134,84
Slide 20: Strong Credit Quality
Strong Credit Quality Nonperforming Assets1 / Assets (%) 0.20% 0.15% 0.10% 0.05% 0.01% 0.01% 0.04% 0.02% 0.00% 12/31/2022 12/31/2023 6/30/2024 9/30/2024 1Nonperforming assets = nonaccrual loans, loans 20 90 days past due and other real estate owned
Slide 21: Deposits by Category
Deposits by Category $1,800,000 Deposits by Category 100% $1,600,000 $243,275 90% $57,390 $183,680 $132,446 80% $1,400,000 Uninsured/Uncollateralized $496,533 $418,837 70% $1,200,000 $454,517 $401,174 60% $1,000,000 ($000’s) 50% $800,000 $758,172 40% $698,294 $677,965 $718,640 $600,000 30% $400,000
Slide 22: Deposit Mix
Deposit Mix Franklin Financial Deposit Mix2 ($000’s) Cost of Deposits1 (%) 2.00 1.80 Retail Time 1.60 $183,680 14% 1.40 1.20 Demand MMDAs & 1.00 Deposits 1.81 Savings $282,964 0.80 $718,640 18% 44% 0.60 1.23 0.40 Interest Bearing 0.20 Checking 0.12 0.23 $401,174 0.00 24% 2021 7/13/1905 2022 2022 202
Slide 23: Liquidity Available at September 30, 2024
Liquidity Available at September 30, 2024 Dollars in Thousands (000’s) Liquidity Source Capacity Outstanding Available Federal Home Loan Bank $558,283 $ 200,000 $358,283 Federal Reserve Bank Discount Window $73,802 $ – $73,802 Correspondent Banks $76,000 $ – $76,000 Total $708,085 $200,000 $508,085
Slide 24: Wealth Management
Wealth Management Total and New Assets Under Management ($000’s) $1,400,000 $1,321,066 $1,275,472 $1,230,202 $1,176,897 $1,200,000 $1,131,736 $1,094,779 $1,000,000 $800,000 $600,000 $400,000 $217,891 $200,000 $135,423 $143,736 $144,168 $60,914 $83,175 $0 12/31/2023 6/30/2024 9/30/2024 Brokerage Trus
Slide 25: Income Statement Highlights
Income Statement Highlights Quarter Ended Quarter Ended Quarter Ended Dollars in Thousands (000’s) 9/30/2024 6/30/2024 9/30/2023 Interest Income $26,053 $24,732 $20,154 Interest Expense $11,401 $10,521 $6,447 Provision for Credit Losses $485 $546 $875 Noninterest Income1 $4,550 $4,384 $4,006 Noninte
Slide 26: Key Performance Measures
Key Performance Measures Quarter Ended Quarter Ended Quarter Ended Percent (%) 9/30/2024 6/30/2024 9/30/2023 Return on Avg. Assets 0.80 0.59 0.86 Return on Avg. Equity 11.86 9.12 12.73 Efficiency Ratio1 71.55 76.03 67.86 Net Interest Margin 2.97 2.99 3.29 Noninterest Inc2 / Operating Revenue 23.70 2
Slide 27: Balance Sheet Strength
Balance Sheet Strength Quarter Ended Quarter Ended Quarter Ended Percent (%) 9/30/2024 6/30/2024 9/30/2023 Risk-Based Capital Ratio (Total) 14.73 14.66 15.16 Leverage Ratio (Tier 1) 8.44 8.38 9.10 Common Equity Ratio (Tier 1) 12.08 12.01 12.43 Tangible Common Equity Ratio 6.58 6.29 5.81 Tangible Com
Slide 28: Market Statistics
Market Statistics Quarter Ended Quarter Ended Quarter Ended Per Share Measure / Market Valuation 9/30/2024 6/30/2024 9/30/2023 Diluted Earnings Per Share $0.95 $0.66 $0.88 Cash Dividend Yield 4.25% 4.53% 4.49% Regular Cash Dividends Paid $0.32 $0.32 $0.32 Dividend Payout Ratio 33.45% 46.39% 36.07% M
Slide 29: Stock Symbol: FRAF (Nasdaq)
Stock Symbol: FRAF (Nasdaq) www.franklinfin.com www.fmtrust.bank 29
Slide 30: Appendix
Appendix : FEM Fa as TRUST.
Slide 31: GAAP / Non-GAAP Reconciliation
GAAP / Non-GAAP Reconciliation Quarter Ended Quarter Ended Quarter Ended Tangible Book Value (per share) (non-GAAP) 9/30/2024 6/30/2024 9/30/2023 Shareholders’ equity $149,928 $136,809 $114,769 Less intangible assets (9,016) (9,016) (9,016) Shareholders’ equity (non-GAAP) 140,912 127,793 105,753 Les
Slide 32: GAAP / Non-GAAP Reconciliation
GAAP / Non-GAAP Reconciliation Quarter Ended Quarter Ended Quarter Ended Efficiency Ratio 9/30/2024 6/30/2024 9/30/2023 Noninterest expense $13,917 $14,336 $12,198 Net interest income 14,652 14,211 13,707 Plus tax equivalent adjustment to net interest income 248 261 260 Plus noninterest income, net
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