Franklin Financial Services Corporation · NASDAQ:FRAF
Franklin Financial Services — Q1 2024 Earnings Presentation
33 slides from Franklin Financial Services's earnings presentation, May 15, 2024
Slide 1: Investor Presentation First Quarter 2024 Highlights
Investor Presentation First Quarter2024 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 In the first quarter of 2024, Franklin Financial Services corporation was able to mark several financial highlights as total assets for the company exceeded $2.0 billion and brokerage and trust assets under management climbed to $1.26 billion. These high points came as the result of the
Slide 4: 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 5: 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 Financials’ wholly-owned subsidiary, F&M Trust, was founded in Chambersburg, PA in 1906 Total assets of the Company were $2.01 billion as of March 31, 2024
Slide 6: Trade Area Expansion
Trade Area Expansion22 Locations serving south central PA and Washington county MD primary Trade Area Expanded Trade Area offering wealth management. Commercial financing and residential lending services Mifflin Juniata Perry Dauphin Lebanon Berks Perry Cumberland huntingdon Lancaster Franklin Fulto
Slide 7: Experienced and Cohesive Executive Team
Experienced and Cohesive Executive Team Timothy G. Henry President & Chief Executive Officer422016Fulton, Centra Bank, Blue Ridge Bank, Susquehanna Bank, BB &T Mark R. Hollar Executive Vice President, Chief Financial Officer & Treasurer361994ValleyBank & Trust Charles B. Carroll, Jr. Executive Vice
Slide 8: Experienced and Cohesive Executive Team
Experienced and Cohesive Executive Team Executive Title Years of Banking Experience Joined F&M Trust Prior Experience Louis J. Giustini Senior Vice President, Chief Retail Services Officer362022Hagerstown Trust, Columbia Bank, Fulton Bank Karen K. Carmack, DM Senior Vice President, Chief Human Resou
Slide 9: A Year of Growth: Selected Highlights
A Year of Growth SELECTED Highlights Total Assets Net Loans Assets Under Management KEY $1.240 Billion as of 12/31/2023STATISTICS$2.012 Billion as of 3/31/2024$1.836 Billion as of 12/31/2023$1.261 Billion as of 3/31/2024$1.259 Billion as of 3/31/2024$1.230 Billion as of 12/31/2023GROWTHPERCENTAGE+9.
Slide 10: Non-Interest Income
Non-Interest Income (Dollars in thousands) Wealth Management FeesQ1 2024Q1 2023Change2,0261,834192 Gain on Sale of Loans5873(15) Deposit Service Fees61358330 Debit Card Income53650234Other996859120Total14,2293,851378Excludes net securities gains/losses2024 24% 13% 14%1% 48% $16.0MM
Slide 11: Net Interest Margin Expansion
Net Interest Margin Expansion Net interest income for the quarter ended 3/31/24 was $13.6 million compared to $12.8 million for the same period in 2023Net interest margin was 2.88% for the quarter ended 3/31/24 compared to 3.41% for the same period in 2023Net Interest Income ($000’s)$16,000$14,000$1
Slide 12: Outlook for 2024
Outlook for 2024The Company will continue building for the future by leveraging our investments in human capital as well as our physical, technological, and sales infrastructure including: Further integration of Salesforce into sales, operations, and marketing Expanding our presence in the Pennsylva
Slide 13: Outlook for 2024
Outlook for 2024 Commercial loan growth will continue due to the integration of new commercial relationship managers, improved underwriting processes, and growth into new regional markets for the bank Deposit balances will moderate due to the tension between rising rates and the bank’s efforts to co
Slide 14: Outlook for 2024
Outlook for 2024 Fee income from the Wealth Management division should continue to grow due to focus on the addition of new clients and gathering new assets from existing clients. Overall growth should only be moderated by the general performance of both the bond and equity markets. With increased f
Slide 15: 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 to brin
Slide 16: Financial Updates First Quarter Ended March 31, 2024
Financial Updates First Quarter Ended March 31, 2024
Slide 17: Balance Sheet Highlights
Balance Sheet Highlights Dollars in Thousands (000’s) Quarter Ended 3/31/2024Year Ended 12/31/2023Year Ended 12/31/2022Year Ended 12/31/2021 Total Assets$2,011,614$1,836,039$1,699,579$1,773,806 Cash and Cash Equiv. $182,570$23,140$64,899$175,149 Investments AFS$462,951$472,503$486,836$529,811 Net Lo
Slide 18: Investment AFS Portfolio
Investment AFS Portfolio$600,000$500,000$400,000$200,000$100,000$0$4,094$30,674$177,685$24,939$212,227$84,286 12/31/2021 $65,950$150,935$24,239$155,455$90,257$104,005$132,591,$23,198$74,091 12/31/2023$100,607$128,326,$23,452$137,456$73,110US Treasury Municipal Corporate Agency MBS/ABS Non-Agency MBS
Slide 19: Diversified Loan Portfolio
Diversified Loan Portfolio$1,400,000$1,200,000$1,000,000$800,000$600,000$400,000$200,000$0$41,846$111,232$150,232$208,615$74,407$405,5963.86%$37,486$113,629,$118,443$218,468$106,921$456,198$35,373$160,612$115,018$275,216$119,365$551,287$34,507$180,555$114,052$278,023$117,587$553,116$97,811$70,609$97
Slide 20: Largest Commercial Real Estate Concentrations
Largest Commercial Real Estate Concentrations CRE Concentrations$600,000$500,000$400,000$300,000$200,000$100,000$31,259$49,160$30,938$50,105$75,839$69,723$33,410$43,812$55,428$58,38281,283$96,515$48,370$62,439$68,478$87,137$80,670$120,180$50,199$63,036$76,714$87,709$87,091$127,740 12/31/2021 12/31/2
Slide 21: Strong Credit Quality
Strong Credit Quality Nonperforming Assets1 / Assets (%)0.45%0.40%0.35%0.30%0.25%0.20%0.15%0.10%0.05%0.00% 0.42% 12/31/2021 12/31/2022 0.01% 12/31/2023 0.01% 3/31/2024 0.02%
Slide 22: Deposits by Category
Deposits by Category$1,600,000$1,400,000$1,200,000$1,000,000$800,000$600,000$400,000$200,000$0 12/31/2021 $74,253$511,969$699,734$298,403 9.0% 12/31/2022 $57,390 $496,533 $698,294 $299,231 8.5% 12/31/2023 $132,446 $454,517 $677,965 $273,050 8.9% $171,909 $402,978 $ 692,532 $291,893 10.3% 100% 90% 80
Slide 23: Deposit Mix
Deposit Mix Cost of Deposits (%)1.801.601.401.201.000.800.600.400.200.00 2021 0.12 2022 0.23 2023 1.23 3/31/24 1.70 Franklin Financial Deposit Mix ($000’s)1 MMDAs & Savings $692,532 44% Real Time $171,909 11% Demand Deposits $291,893 19% Interest Bearing Checking $402,978 26%
Slide 24: Liquidity Available at March 31, 2024
Liquidity Available at March 31, 2024Dollars in Thousands (000’s) Liquidity Source Capacity Outstanding Available Federal Home Loan Bank$500,736$ 240,000$260,736Federal Reserve Bank Discount Window$53,637$ –$53,637Correspondent Banks $76,000$ –$76,000Total$630,373$240,000$390,373
Slide 25: Wealth Management Total and New Assets Under Management
Wealth Management Total and New Assets Under Management ($000’s)$1,400,000$1,200,000$1,000,000$800,000$600,000$400,00$200,000$0 $126,394 $963,828 $ 1,090,222 $123,055 $ 135,423 $1,094,779 $1,230,202 $217,891 $ 151,465 $1,107,650 $1,259,115 $24,086 3/31/2024 Brokerage Trust Total New assets Under Man
Slide 26: Income Statement Highlights
Income Statement Highlights Dollars in Thousands (000’s) Quarter Ended 3/31/2024Quarter Ended 12/31/2023Quarter Ended 3/31/2023 Interest Income$23,809$21,516$16,583 Interest Expense$10,256$7,616$3,746 Provision for Credit Losses$452$788$529 Noninterest Income1$4,229$4,044$3,851 Noninterest Expense$1
Slide 27: Key Performance Measures
Key Performance Measures Percent (%) Quarter Ended 3/31/2024Quarter Ended 12/31/2023Quarter Ended 3/31/2023 Return on Avg. Assets0.670.750.80 Return on Avg. Equity10.2111.8111.33 Efficiency Ratio173.7672.2270.70 Net Interest Margin2.883.243.41 Noninterest Inc2 / Operating Revenue23.4322.5423.08
Slide 28: Balance Sheet Strength
Balance Sheet Strength Percent (%)Quarter Ended 3/31/2024Quarter Ended 12/31/2023Quarter Ended 3/31/2023 Risk-Based Capital Ratio (Total) 14.5314.4517.21 Leverage Ratio (Tier 1) 8.329.019.58 Common Equity Ratio (Tier 1) 11.9111.8214.24Tangible Common Equity Ratio6.256.746.73Tangible Common Equity Ra
Slide 29: Market Statistics
Market Statistics Per Share Measure / Market Valuation Quarter Ended 3/31/2024Quarter Ended 12/31/2023Quarter Ended 3/31/2023 Diluted Earnings Per Share$0.77$0.79$0.75 Cash Dividend Yield4.89%4.06%4.32 Regular Cash Dividends Paid$0.32$0.32$0.32 Dividend Payout Ratio41.62%40.23%42.68%Market Value P$2
Slide 30: Stock Symbol: FRAF (Nasdaq)
Stock Symbol: FRAF (Nasdaq) www.franklinfin.com www.fmtrust.bankFranklin Financial Services corporation is now trading on NASDAQ Congratulations Franklin Financial services corporation FRAF Nasdaq Listed Nasdaq
Slide 31: Appendix
Appendix FEM
Slide 32: GAAP / Non-GAAP Reconciliation: Tangible Book Value
GAAP / Non-GAAP Reconciliation Tangible Book Value (per share) (non-GAAP) Quarter Ended 3/31/2024Quarter Ended 12/31/2023Quarter Ended(9,016) 3/31/2023Shareholders’ equity$134,237$132,136$123,583Less intangible assets(9,016) (9,016) Shareholders’ equity (non-GAAP) 125,221123,120114,567Less AOCI(41,2
Slide 33: GAAP / Non-GAAP Reconciliation: Efficiency Ratio
GAAP / Non-GAAP Reconciliation Efficiency Ratio Quarter Ended 3/31/2024Quarter Ended 12/31/2023Quarter Ended 3/31/2023Noninterest expense$13,304$13,148$12,019Net interest income13,55313,90012,837Plus tax equivalent adjustment to net interest income254261311Plus noninterest income, net of securities
Franklin Financial Services — Q1 2024 Earnings Presentation on 6ix