Franklin Financial Services Corporation · NASDAQ:FRAF
Franklin Financial Services — Boenning & Scattergood conference, Hershey, PA, August 2016
37 slides from Franklin Financial Services's conference presentation, Aug 10, 2016
Slide 1: Boenning & Scattergood, August 2016 — Hershey, PA
Boenning & Scattergood August 2016 — Hershey, PA
Slide 2: Forward Looking Statements
Forward Looking Statements In order for you to better understand the business of the Company – where we have been and where we want to go – our remarks today (those of the Company officers who will speak or respond to questions) will include forward looking statements related to anticipated financia
Slide 3: Company Profile
Company Profile •F&M Trust founded in 1906 •Franklin Financial formed in 1983 •Headquartered in Chambersburg, PA •22 offices throughout Cumberland, Franklin, Fulton and Huntingdon Counties •$1.084 billion in assets at June 30, 2016 •$725.5 million in brokerage and trust assets under management 3
Slide 4: Market Share
Market Share •#1 Deposit Market Share in Chambersburg (49.0%) •#1 Deposit Market Share in Franklin County (31.3%) •#1 Deposit Market Share in Fulton County (34.8%) •#7 Deposit Market Share in Carlisle (5.2%) •#9 Deposit Market Share in Cumberland County (3.3%) Source: SNL Financial; bank deposits as
Slide 5: Stable Employment
Stable Employment Sources: PA Department of Labor and Industry Center for Workforce Information & Analysis; U.S. Bureau of Labor Statistics Unemployment rate, not seasonally adjusted 5
Slide 6: Unemployment Rates
Unemployment Rates Binghamton Unemployment Rate 01% 02%-68% OON-TOm 70%-8.% NA Ser ration TRUST
Slide 7: Growth Market
Growth Market Sources: Central Penn Business Journal, March 2016; ABC 27, April 2016 7
Slide 8: Management Team
Management Team Services Corporation
Slide 9: Management Team
Management Team Timothy G. Henry President and CEO Mark R. Hollar CFO and Treasurer Lorie Heckman Risk Management Steven D. Butz Commercial Services Lise M. Shehan Investment and Trust Services Patricia A. Hanks Retail Services Ronald L. Cekovich Technology Services Karen K. Carmack Human Resources
Slide 10: Strategic Plan Focus
Strategic Plan Focus •Continue Pace of Loan Growth •Increasing Fee-Based Lines of Business •Further Development of Sales Culture •Maintain Expense Control •Continue to Improve Overall Loan Quality 10
Slide 11: Loan Growth
Loan Growth Source: The Herald Mail, July 2016 •Focus on the Cumberland County market •Strengthening of our commercial loan pipeline since April 2015 •Continued opportunities from disruptions M&A activity is creating 11
Slide 12: Commercial Loan Growth
Commercial Loan Outstandings* ($000’s) Commercial Loan Growth *As of 6/30/2016 12
Slide 13: Loan Portfolio
Loan Portfolio % Portfolio Composition13
Slide 14: Fee-Based Lines of Business
Fee-Based Lines of Business •Investment and Trust Services •Cash Management Services •Merchant Card Services •Debit Card Overdraft Opt-In •StartFresh™ Banking 14
Slide 15: Investment & Trust Services
Investment & Trust Services •Trust powers since our incorporation in 1906 •Fully integrated trust, investment, insurance and brokerage services, focused exclusively on client needs •Fee income increased by 10.1% for 2015 •Designated Market Managers housed in and focused on growth in Cumberland, Fran
Slide 16: Investment & Trust Services
Investment & Trust Services •Over 300 years of combined financial services experience among our professional staff members •Professional designations include: –CFPs (Certified Financial Planner) –CFA (Chartered Financial Analyst) –JD (Juris Doctor) –CTFA (Certified Trust and Financial Advisor) –AAMS
Slide 17: Sales Culture Development
Sales Culture Development •Plan to continue relationship with the Anthony Cole Training Group in 2017 •Positive changes in the sales culture being recognized in 2016 •Plan to marry sales process with service standards to continue the evolution of our sales and service culture 17
Slide 18: Expense Control
Expense Control •Completed a comprehensive delivery channel study –Analyzed community office network and self-service delivery channels –Objective to increase market penetration and profitability –Closed three community offices in January 2015; reduction of $500,000 per year in operating expenses –C
Slide 19: Delivery Channels
Delivery Channels Boiling Springs Community Office 19
Slide 20: Mobile and digital delivery channels
http://uploads.webflow.com/54d241baa59e05340ae1f500/552e7ce78f4602c87dfca1ab_Samsung.pnghttp://mobileidworld.com/assets/Apple-Pay-1.jpgApple Pay and Samsung Pay People Pay Mobile Check Deposit SecurLock® Communicate Andriod & iPhone App Mobile Wallet 20
Slide 21: Loan Quality: Delinquency
Loan QualityDelinquency* (% of Gross Loans)21
Slide 22: Loan Quality: Non-Performing Assets
Loan Quality Non-Performing Assets* ($000’s)22
Slide 23: Loan Quality: Net Charge-offs and Provision
Loan Quality Net Charge-offs and Provision* ($000’s)23
Slide 24: Allowance
Allowance ALLL* ($000’s) $9,000 $8,000 $7,000 $6,000 mALLL. $5,000 —_ $4,000 $3,000 $2,000 $1,000 $ 2011 2012 2013 2014 2015 6/30/2016 fag] Franklin Financial Services Corporation
Slide 25: ALLL / Non-Performing Loans
ALLL / Non-Performing Loans* 25
Slide 26: Deposit Growth
Deposit Growth Source: SNL Financial for Pennsylvania commercial banks of $750 million to $2.0 billion in assets. *Franklin Financial data as of 6/30/2016. Peer data as of 3/31/2016. 26
Slide 27: Deposit Composition
Deposit Composition As of 6/30/2016 27
Slide 28: Cost of Funds
Cost of Funds Source: SNL Financial for Pennsylvania commercial banks of $750 million to $2.0 billion in assets. *Franklin Financial data as of 6/30/2016. Peer data as of 3/31/2016. 28
Slide 29: Balance Sheet Highlights
Balance Sheet Highlights *Franklin Financial data as of 6/30/2016 29
Slide 30: Financial Highlights
Financial Highlights *Franklin Financial data as of 6/30/2016 30
Slide 31: Non-Interest Income
Non-Interest Income *Peer Group data is derived from the Uniform Bank Performance Report for banks headquartered in Pennsylvania with average assets between $750 million and $2 billion. *Franklin Financial data as of 6/30/2016. Peer data as of 3/31/2016. 31
Slide 32: Performance Measures
Performance Measures *Non-GAAP measurement – Efficiency Ratio Noninterest expense / tax equivalent net interest income plus noninterest income less net securities gains or losses **Franklin Financial data as of 6/30/2016 32
Slide 33: Shareholder Value
Shareholder Value *Franklin Financial data as of 6/30/2016 33
Slide 34: Safety & Soundness
Safety & Soundness *Franklin Financial data as of 6/30/2016 34
Slide 35: Liquidity
Liquidity •Federal Home Loan Bank – Excess Borrowing $273,000,000 •Federal Reserve Bank – Discount Window $23,000,000 •Correspondent Bank – Line of Credit $6,000,000 35
Slide 36: Investor Relations
Investor Relations •Dividend Reinvestment and Stock Purchase Plan (DRIP) –Over $6,000,000 invested since September 2010 –Authorized the repurchase of up to $350,000 in shares of $1.00 par value common stock during each calendar quarter through March 31, 2017 •OTCQX –Started trading on the OTCQX mark
Slide 37: Stock Symbol: FRAF (OTCQX)
Stock Symbol: FRAF (OTCQX) www.franklinfin.com www.fmtrustonline.com 37
Franklin Financial Services — Boenning & Scattergood conference, Hershey, PA, August 2016 on 6ix