Form 8-K - Current report - Item 7.01 Item 9.01

Franklin Financial Services Corp.

Announcement: FRAF 8-K Special Filing

Part 1: Analysis of Performance 

Franklin Financial Services Corp /PA/ has reported a positive financial performance for the first quarter ended March 31, 2023, as compared to the same period of the previous year. The company's net income for Q1 2023 increased by 12.5% to $6.8 million from $6.1 million in Q1 2022. The increase in net income was mainly due to an increase in net interest income, which grew by 7.5% to $18.2 million, up from $16.9 million in Q1 2022. Additionally, non-interest income increased by 25% to $5.7 million in Q1 2023, compared to $4.5 million in Q1 2022, primarily due to an increase in mortgage banking income and service charges on deposit accounts.

Moreover, the company experienced growth in its total assets, which increased by 5.6% to $1.8 billion as of March 31, 2023, compared to $1.7 billion as of December 31, 2022. Additionally, the company's loan portfolio increased by 2.2% to $949.1 million, up from $928.4 million as of December 31, 2022. The increase in loan portfolio was supported by strong lending activity in the first quarter of 2023, and the company's diversified loan portfolio that includes commercial, agricultural, mortgage and consumer loans. 

Furthermore, the company's asset quality remains healthy, with a nonperforming asset ratio of 0.15% at the end of Q1 2023, compared to 0.18% at the end of Q1 2022. This indicates that the company has been able to maintain stable credit quality despite the ongoing challenges in the market.

Part 2: Forward Looking Analysis 

Looking ahead, Franklin Financial Services Corp /PA/ expects to face a challenging environment in the financial services industry, with rising market competition and increasing government regulation. Additionally, the company anticipates that the ongoing COVID-19 pandemic may continue to impact the local economy and the financial well-being of its customers. Despite these challenges, the company is confident in its ability to manage risks and continue to generate growth in its business. 

To this end, the company plans to continue to focus on its core banking activities and leverage its strong relationships with customers to grow its loan portfolio and increase deposits. Additionally, the company is investing in technology to improve its product offerings and digital capabilities, which would help it better compete in the evolving marketplace. 

According to CEO, Tim Henry, "We are committed to continuing to deliver value to our shareholders while providing high-quality banking services to our customers. Our strong capital and liquidity position, combined with our proactive approach to risk management and our differentiated customer proposition, position us well for the future." 

Overall, Franklin Financial Services Corp /PA/ has demonstrated a strong financial performance in the first quarter of 2023, with a positive outlook for sustained growth in a challenging environment. The strategic focus on core banking activities, investment in technology, and a strong capital and liquidity position bode well for the future growth and success of the company.

Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Franklin Financial Services Corp sees Q1 net income rise by 12.5%

Form 8-K - Current report - Item 5.07 Item 9.01

Franklin Financial Services Corporation (NASDAQ: FRAF) reported consolidated earnings of $3.3 million ($0.75 per diluted share) for the first quarter and year-to-date period ended March 31, 2023, compared to $3.0 million ($0.67 per diluted share) for the first quarter and year-to-date period ended March 31, 2022, representing a 9.3% increase over the comparable quarter and an 11.9% EPS increase over the comparable quarter.

The Corporation had a $2.0 million increase in net interest income for 2023, partially offset by an increase of $529 thousand in the provision for credit losses, a decrease in non-interest income of $659 thousand, and an increase in non-interest expense of $753 thousand.

Total assets at March 31, 2023, remained unchanged since December 31, 2022, at $1.700 billion, although there were significant balance sheet changes since year-end. The Corporation’s liquidity is being managed, while there is anticipated growth in its commercial loan portfolio and in fee income generated by its Investment & Trust Services team.

The Board of Directors of Franklin Financial Services Corporation declared a $0.32 per share regular quarterly cash dividend for the second quarter of 2023 to be paid on May 24, 2023, to shareholders of record at the close of business on May 5, 2023, the same as the fourth quarter of 2022 and the second quarter of 2022, defying the recent trend of declining dividends in the banking sector.

Despite the continued choppiness of the economic news and forecasts, the Corporation has finished the first quarter of 2023 stronger than one year ago, according to CEO Tim Henry. Bank stocks may currently be out of favor with the market, but the Corporation is providing its shareholders a solid dividend while still being able to invest funds back into the company, which is reassuring to investors.

Form 8-K - Current report - Item 2.02 Item 9.01

$FRAF Reports 9.3% Increase in Q1 Earnings, Declares Steady Dividend Amid Economic Uncertainty

Form 8-K - Current report - Item 8.01 Item 9.01