PR Newswire
CHAMBERSBURG, Pa., July 26, 2022
CHAMBERSBURG, Pa., July 26, 2022 /PRNewswire/ -- Franklin Financial Services Corporation (NASDAQ: FRAF), the bank holding company of F&M Trust (the Bank), reported consolidated earnings of $3.6 million ($0.80 per diluted share) for the second quarter ended June 30, 2022. This result represents a 19% increase compared to net income of $3.0 million ($0.67 per diluted share) for the first quarter of 2022, and a 32% decrease compared to net income of $5.3 million ($1.19 per diluted share) for the second quarter ended June 30, 2021. Year-to-date 2022 net income was $6.6 million ($1.47 per diluted share) compared to $10.1 million ($2.28 per diluted share) for the same six-month period in 2021, a decrease of 35%.
A summary of operating results for the second quarter of 2022 and year-to-date 2022 are as follows:
Total assets at June 30, 2022 were $1.832 billion compared $1.774 billion at December 31, 2021. Significant balance sheet changes since December 31, 2021, include:
"The value of being a diversified, community bank with strong customer relationships showed through in the second quarter as growing loan and deposit balances helped to improve net interest income and fee income grew from Investment and Trust services compared to the prior quarter. Despite the headwinds of a volatile stock market and the talk of recession, we remain focused on building shareholder value through the growth of the franchise and our capabilities," said Timothy G. Henry, President and CEO of Franklin Financial Services Corporation and F&M Trust. "On July 1 we opened our first Maryland office in Hagerstown. Later in the third quarter we anticipate implementing the Salesforce customer relationship management system throughout the bank. In order to accommodate future growth and improve operating efficiencies we will also be completing the consolidation of the executive, commercial, investment and trust, and operations teams, that had been spread across two separate buildings, into one new location in Chambersburg, PA. Through the balance of the year, we will continue to position ourselves to be able to ride through any broad economic issues that may arise while maintaining the ability to support our customers and take advantage of opportunities to enhance shareholder value as they become apparent to us."
On July 14, 2022, the Board of Directors of Franklin Financial Services Corporation declared a $0.32 per share regular quarterly cash dividend for the third quarter of 2022. This compares to a $0.32 per share regular cash dividend for the second quarter of 2022. The regular quarterly cash dividend for the third quarter of 2022 will be paid on August 24, 2022, to shareholders of record at the close of business on August 5, 2022.
Additional information on the Corporation is available on our website at: www.franklinfin.com/Presentations.
Franklin Financial is the largest independent, locally owned and operated bank holding company headquartered in Franklin County with assets of more than $1.8 billion. Its wholly-owned subsidiary, F&M Trust, has twenty-two community banking locations in Franklin, Cumberland, Fulton and Huntingdon Counties PA, and Washington County MD. Franklin Financial stock is trading on the Nasdaq Stock Market under the symbol FRAF. Please visit our website for more information, www.franklinfin.com.
Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company's consolidated financial statements when filed with the Securities and Exchange Commission ("SEC"). Accordingly, the financial information in this announcement is subject to change.
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 current views as to likely future developments, and use words "may," "will," "expect," "believe," "estimate," "anticipate," or similar terms. Because forward-looking statements involve certain risks, uncertainties and other factors over which Franklin Financial Services Corporation has no direct control, actual results could differ materially from those contemplated in such statements. These factors include (but are not limited to) the following: general economic conditions particularly with regard to the negative impact of severe, wide-ranging and continuing disruptions caused by the spread of the coronavirus COVID-19 pandemic and responses thereto, changes in interest rates, changes in the Corporation's cost of funds, changes in government monetary policy, changes in government regulation and taxation of financial institutions, impact of and changes in the rate of inflation, changes in technology, the intensification of competition within the Corporation's market area, and other similar factors.
We caution readers not to place undue reliance on these forward-looking statements. They only reflect management's analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and any Current Reports on Form 8-K.
FRANKLIN FINANCIAL SERVICES CORPORATION | |||||||||||||||||
Financial Highlights (Unaudited) | |||||||||||||||||
Earnings Summary | For the Three Months Ended | For the Six Months Ended | |||||||||||||||
(Dollars in thousands, except per share data) | 6/30/2022 | 3/31/2022 | 6/30/2021 | 6/30/2022 | 6/30/2021 | % Change | |||||||||||
Interest income | $ | 12,875 | $ | 11,534 | $ | 11,543 | $ | 24,409 | $ | 23,135 | 5.5 % | ||||||
Interest expense | 764 | 726 | 720 | 1,490 | 1,468 | 1.5 % | |||||||||||
Net interest income | 12,111 | 10,808 | 10,823 | 22,919 | 21,667 | 5.8 % | |||||||||||
Provision for loan losses | - | - | (1,100) | - | (1,900) | -100.0 % | |||||||||||
Noninterest income | 4,091 | 3,884 | 4,489 | 7,976 | 8,716 | -8.5 % | |||||||||||
Noninterest expense | 12,029 | 11,266 | 10,111 | 23,296 | 20,277 | 14.9 % | |||||||||||
Income before income taxes | 4,173 | 3,426 | 6,301 | 7,599 | 12,006 | -36.7 % | |||||||||||
Income taxes | 595 | 414 | 1,030 | 1,009 | 1,905 | -47.0 % | |||||||||||
Net income | $ | 3,578 | $ | 3,012 | $ | 5,271 | $ | 6,590 | $ | 10,101 | -34.8 % | ||||||
Diluted earnings per share | $ | 0.80 | $ | 0.67 | $ | 1.19 | $ | 1.47 | $ | 2.28 | -35.5 % | ||||||
Regular cash dividends declared | $ | 0.32 | $ | 0.32 | $ | 0.32 | $ | 0.64 | $ | 0.61 | 4.9 % | ||||||
Balance Sheet Highlights (as of ) | 6/30/2022 | 3/31/2022 | 6/30/2021 | ||||||||||||||
Total assets | $ | 1,832,296 | $ | 1,767,061 | $ | 1,678,308 | |||||||||||
Investment and equity securities | 510,282 | 511,969 | 512,729 | ||||||||||||||
Loans, net | 1,019,608 | 985,927 | 983,980 | ||||||||||||||
Deposits | 1,679,187 | 1,596,386 | 1,491,208 | ||||||||||||||
Shareholders' equity | 121,797 | 137,136 | 151,156 | ||||||||||||||
Assets Under Management (fair value) | |||||||||||||||||
Investment and Trust Services | 838,830 | 920,597 | 912,651 | ||||||||||||||
Held at third party brokers | 104,881 | 111,742 | 118,469 | ||||||||||||||
As of and for the Three Months Ended | As of or for the Six Months Ended | ||||||||||||||||
Performance Ratios | 6/30/2022 | 3/31/2022 | 6/30/2021 | 6/30/2022 | 6/30/2021 | ||||||||||||
Return on average assets* | 0.79 % | 0.69 % | 1.27 % | 0.74 % | 1.25 % | ||||||||||||
Return on average equity* | 11.11 % | 7.96 % | 14.67 % | 9.36 % | 14.07 % | ||||||||||||
Dividend payout ratio | 39.88 % | 47.18 % | 26.05 % | 43.22 % | 26.64 % | ||||||||||||
Net interest margin* | 2.90 % | 2.66 % | 2.82 % | 2.80 % | 2.92 % | ||||||||||||
Net loans (charged-off) recovered/average loans* | -0.01 % | -0.01 % | 0.00 % | -0.01 % | 0.03 % | ||||||||||||
Nonaccrual loans / gross loans | 0.55 % | 0.74 % | 0.88 % | ||||||||||||||
Nonperforming assets / total assets | 0.31 % | 0.42 % | 0.53 % | ||||||||||||||
Allowance for loan loss / loans | 1.45 % | 1.50 % | 1.51 % | ||||||||||||||
Book value, per share | $ | 27.54 | $ | 30.77 | $ | 34.16 | |||||||||||
Tangible book value (1) | $ | 25.50 | $ | 28.75 | $ | 32.12 | |||||||||||
Market value, per share | $ | 30.16 | $ | 33.58 | $ | 31.94 | |||||||||||
Market value/book value ratio | 109.51 % | 109.13 % | 93.50 % | ||||||||||||||
Market value/tangible book value ratio | 118.25 % | 116.82 % | 99.43 % | ||||||||||||||
Price/earnings multiple* | 9.43 | 12.53 | 6.71 | 10.26 | 7.00 | ||||||||||||
Current quarter dividend yield* | 4.24 % | 3.81 % | 3.88 % | ||||||||||||||
* Annualized | |||||||||||||||||
(1) NonGAAP measurement. See GAAP versus NonGAAP disclosure | |||||||||||||||||
GAAP versus non-GAAP Presentations – The Corporation supplements its traditional GAAP measurements with certain non-GAAP measurements to evaluate its performance and to eliminate the effect of intangible assets. By eliminating intangible assets (Goodwill), the Corporation believes it presents a measurement that is comparable to companies that have no intangible assets or to companies that have eliminated intangible assets in similar calculations. However, not all companies may use the same calculation method for each measurement. The non-GAAP measurements are not intended to be used as a substitute for the related GAAP measurements. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. In the event of such a disclosure or release, the Securities and Exchange Commission's Regulation G requires: (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP. The following table shows the calculation of the non-GAAP measurements.
NonGAAP | |||||||||
(Dollars in thousands, except per share) | As of | As of | As of | ||||||
June 30, 2022 | March 31, 2022 | June 30, 2021 | |||||||
Tangible Book Value (per share) (non-GAAP) | |||||||||
Shareholders' equity | $ | 121,797 | $ | 137,136 | $ | 151,156 | |||
Less intangible assets | (9,016) | (9,016) | (9,016) | ||||||
Tangible book value (non-GAAP) | 112,781 | 128,120 | 142,140 | ||||||
Shares outstanding (in thousands) | 4,422 | 4,457 | 4,425 | ||||||
Tangible book value per share (non-GAAP) | 25.50 | 28.75 | 32.12 | ||||||
View original content:https://www.prnewswire.com/news-releases/franklin-financial-reports-2022-q2-earnings-declares-dividend-301593771.html
SOURCE Franklin Financial Services Corporation
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