Franklin Financial Services Corporation · NASDAQ:FRAF
Franklin Financial Services — Q1 2022 Earnings Presentation
29 slides from Franklin Financial Services's earnings presentation, Jun 22, 2022
Slide 1: First Quarter 2022 Highlights
Investor Presentation First Quarter 2022 Highlights F&M Trust Franklin Financial Services Corporation
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 2022 certainly began much differently than the previous two years. While we have, for the most part, been able to put the pandemic in the rearview mirror, its effects and our national response to them are still being realized. Rising interest rates, supply chain disruptions, and world c
Slide 4: CEO Comments (continued)
CEO Comments (continued) We also have two community office renovations underway and will move into our new headquarters on Nitterhouse Drive in July. We also will be going live with Salesforce in July as we start using the software to improve customer service, increase sales, and create efficiencies
Slide 5: Overview of Franklin Financial
Overview of Franklin Financial Franklin Financial, which was formed in 1983, is the largest independent, locally owned and operated bank 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
Slide 6: A Market Share Leader
A Market Share Leader 21 offices throughout Cumberland, Franklin, Fulton and Huntingdon Counties, PA #1 Deposit Market Share in Chambersburg (52.0%) #1 Deposit Market Share in Franklin County (39.0%) #2 Deposit Market Share in Fulton County (35.7%) Huntingdon County Fulton County Franklin County Cum
Slide 7: Experienced and Cohesive Executive Team
Experienced and Cohesive Executive Team Executive Title Years of Banking Experience Joined F&M Trust Prior Experience Timothy G. Henry President & Chief Executive Officer 40 2016 Fulton, Centra Bank, BlueRidge Bank, Susquehanna Bank, BB&T Mark R. Hollar Executive Vice President, Chief Financial Offi
Slide 8: Experienced and Cohesive Executive Team
Experienced and Cohesive Executive Team Executive Title Years of Banking Experience Joined F&M Trust Prior Experience Karen K. Carmack, DM Senior Vice President, Chief Human Resources Officer 27 2000 ACNB Matthew D. Weaver Senior Vice President, Chief Marketing Officer 22 2014 Susquehanna Bank, Clif
Slide 9: Well-Established Corporation
Well-Established Corporation Market share leader in core deposit, loan, and asset-management segments in economically stable and historically growing local markets New executive team members with extensive banking industry experience and market knowledge Consistently strong core operating fundamenta
Slide 10: YTD Financial Updates
YTD Financial Updates Net interest income was $10.8 million unchanged from the same period in the prior year; PPP interest and fees for the first quarter of 2022 were $500 thousand less than the first quarter of 2021 Continue to adjust deposit rates in response to market conditions Net interest marg
Slide 11: YTD Financial Updates
YTD Financial Updates Loan-to-deposit ratio of 63% enhances liquidity position and allows for quality lending opportunities as the economy reopens Fee income from new mortgages originated for sale in the secondary market decreased $528 thousand over the same period in 2021 Deposits increased 12.3% o
Slide 12: Digital Transformation
Digital Transformation Registered Zelle® users increased 27.6% and mobile banking users increased 7.2% from the same period in 2021 as customers transition to digital banking channels Introduced MX Personal Finance and Credit Score powered by SavvyMoney® as online and mobile banking enhancements Tre
Slide 13: Outlook for the Remainder of 2022
Outlook for the Remainder of 2022 Adapting to the challenges and changes brought on by the pandemic over the past two years Building for the future by making investments in our physical, technological, and sales infrastructure including: Establishing a new corporate headquarters in Chambersburg, PA
Slide 14: Outlook for the Remainder of 2022
Outlook for the Remainder of 2022 Increased competition for quality credit in the market will challenge loan demand Net income generated by the Investment & Trust Services business line will continue to grow due to the origination of new customers and cost controls that are in place, though fee inco
Slide 15: Summary
Summary The Company is well capitalized and positioned to successfully work through the current complex social and economic conditions to the benefit of our customers and shareholders Liquidity remains strong with additional resources available if needed Asset quality is good with continued improvem
Slide 16: Financial Updates First Quarter Ended March 31, 2022
Financial Updates First Quarter Ended March 31, 2022 F&M TRUST Franklin Financial Services Corporation 16
Slide 17: Balance Sheet Highlights
Balance Sheet Highlights Dollars in Thousands (000’s) 3/31/2022 12/31/2021 9/30/2021 6/30/2021 Total Assets $1,767,061 $1,773,806 $1,732,441 $1,678,308 Cash and Cash Equiv. $173,709 $175,149 $98,893 $98,131 Investments $511,969 $530,292 $546,261 $512,729 Net Loans $985,927 $983,746 $1,002,802 $983,9
Slide 18: Income Statement Highlights
Income Statement Highlights Dollars in Thousands (000’s) Quarter Ended 3/31/2022 Quarter Ended 12/31/2021 Quarter Ended 3/31/2021 Interest Income $11,534 $12,133 $11,592 Interest Expense $726 $723 $748 Provision for Losses -- ($200) ($800) Noninterest Income1 $3,873 $4,544 $4,173 Noninterest Expense
Slide 19: Key Performance Measures
Key Performance Measures Percent (%) Quarter Ended 3/31/2022 Quarter Ended 12/31/2021 Quarter Ended 3/31/2021 Return on Avg. Assets 0.69 0.84 1.23 Return on Avg. Equity 7.96 9.56 13.47 Efficiency Ratio1 75.50 73.40 66.06 Net Interest Margin 2.66 2.79 3.03 Noninterest Inc2 / Operating Revenue 26.38 2
Slide 20: Balance Sheet Strength
Balance Sheet Strength Percent (%) Quarter Ended 3/31/2022 Quarter Ended 12/31/2021 Quarter Ended 3/31/2021 Risk-Based Capital Ratio (Total) 18.09 18.41 18.18 Leverage Ratio (Tier 1) 8.59 8.52 8.76 Common Equity Ratio (Tier 1) 14.94 15.20 14.80 Tangible Common Equity Ratio 7.29 8.39 8.29 Nonperformi
Slide 21: Market Statistics
Market Statistics Per Share Measure / Market Valuation Quarter Ended 3/31/2022 Quarter Ended 12/31/2021 Quarter Ended 3/31/2021 Diluted Earnings Per Share $0.67 $0.82 $1.09 Cash Dividend Yield 3.81% 3.87% 3.85% Regular Cash Dividends Paid $0.32 $0.32 $0.30 Dividend Payout Ratio 47.18% 38.83% 27.29%
Slide 22: Balanced Revenue Model
Balanced Revenue Model Annualized Noninterest Income Source as a percentage of Average Assets as of March 31, 2022 2022 Franklin Financial Median PA Banks Peer1 Trust 0.43% 0.02% Service Charges on Deposits 0.15% 0.09% Gain on Sale of Loans 0.06% 0.06% Other 0.22% 0.29% Total Noninterest Income2 0.9
Slide 23: Stable, Low-Cost Core Deposits
Stable, Low-Cost Core Deposits Cost of Deposits (%) 1.20 1.00 0.80 0.60 0.40 0.20 0.00 0.64 0.28 0.13 0.12 2019 2020 2021 3/31/2022 1 Franklin Financial Deposit Mix ($000’s) Retail Time Demand Deposits NOW & Other Transaction MMDAs & Savings $9,251 $303,382 $718,649 $505,104 4% 19% 45% 32% 1For the
Slide 24: Diversified Loan Portfolio
Diversified Loan Portfolio Loans Outstanding1 ($000’s) $52,290 $21,742 $2,932 $46,350 $41,140 $41,846 $40,726 $1,000,000 $106,014 $105,639 $111,232 $116,956 $800,000 $140,784 $145,279 $150,232 $134,937 $600,000 $192,583 $212,030 $208,615 $209,520 $400,000 $78,712 $73,049 $74,407 $94,442 $200,000 $37
Slide 25: Investment and Trust Services
Investment and Trust Services Total and New Assets Under Management ($000’s) $1,200,000 $115,120 $907,481 $1,022,601 $61,176 $118,046 $946,975 $1,065,021 $100,457 $111,742 $920,631 $1,032,373 $39,231 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 September 2021 December 2021 March 2022 Brokerage
Slide 26: Strong Credit Quality
Strong Credit Quality Nonperforming Assets1 / Assets (%) 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% 0.53% 0.55% 0.42% 0.42% 6/30/221 9/30/2021 12/31/2021 3/31/2022 1Nonperforming assets = nonaccrual loans, loans 90 days past due and other real estate owned F&M TRUST Franklin Financial Services Corpor
Slide 27: Stock Symbol: FRAF (Nasdaq)
Stock Symbol: FRAF (Nasdaq) www.franklinfin.com www.fmtrust.bank F&M TRUST Franklin Financial Services Corporation 27
Slide 28: Appendix
Appendix F&M TRUST Franklin Financial Services Corporation 28
Slide 29: GAAP / Non-GAAP Reconciliation
GAAP / Non-GAAP Reconciliation Tangible Book Value (per share) (non-GAAP) Quarter Ended 3/31/2022 Quarter Ended 12/31/2021 Quarter Ended 3/31/2021 Shareholders’ equity $ 137,136 157,065 140,699 Less intangible assets (9,016) (9,016) (9,016) Shareholders’ equity (non-GAAP) 128,120 148,049 131,683 Sha
Franklin Financial Services — Q1 2022 Earnings Presentation on 6ix