CHAMBERSBURG, Pa., Jan. 28, 2020 /PRNewswire/ -- Franklin Financial Services Corporation (NASDAQ: FRAF), the bank holding company of F&M Trust (the Bank), reported consolidated earnings of $4.4 million ($1.01 per diluted share) for the fourth quarter ended December 31, 2019, compared to third quarter 2019 earnings of $4.5 million ($1.03 per diluted share) and fourth quarter 2018 earnings of $3.8 million ($0.86 per diluted share). Net income for 2019 was $16.1 million ($3.67 per diluted share) compared to $6.1 million ($1.39 per diluted share) for the same period in 2018.
A summary of operating results for 2019 are as follows:
Total assets at December 31, 2019 were $1.3 billion, a 5.1% increase when compared with total assets at December 31, 2018. Significant balance sheet changes since December 31, 2018 include:
"For the fourth quarter, and for 2019 as a whole, we have been pleased to be able to continue to build on our solid core earnings while making investments in our company's future and reducing overall risk to the bank," said Timothy G. Henry, President and CEO. "Net income for the year was at a record high, but more importantly we have restructured our loan portfolio to reduce risk and seen significant development in two key fee income business lines, Investment & Trust services and residential mortgage lending. By increasing our profitability and reducing risk, we are positioning ourselves well for the future growth of our company. 2020 will present new challenges for the bank but as we move forward you can expect to see more investments in our product lines, technology and infrastructure all being done with a mind towards growing the company for the benefit of our shareholders and the communities and customers we serve."
On January 10, 2020, the Board of Directors of Franklin Financial Services Corporation declared a $0.30 per share regular quarterly cash dividend for the first quarter of 2020, which is an 11.1% increase over the $0.27 per share regular quarterly cash dividend for the first quarter of 2019. This compares equitably to a $0.30 per share regular quarterly cash dividend for the fourth quarter of 2019. The regular quarterly cash dividend for the first quarter of 2020 will be paid on February 26, 2020 to shareholders of record at the close of business on February 7, 2020.
Franklin Financial is the largest independent, locally owned and operated bank holding company headquartered in Franklin County with assets of more than $1.3 billion. Its wholly-owned subsidiary, F&M Trust, has twenty-two community banking locations in Franklin, Cumberland, Fulton and Huntingdon Counties. 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, 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, 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 Performance (1) | ||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
(Dollars in thousands, except per share data) | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 2019 | 2018 | % Change | ||||||||
Interest income | $12,130 | $12,722 | $12,396 | $11,989 | $11,849 | $49,235 | $44,868 | 9.7 | ||||||||
Interest expense | 1,734 | 1,887 | 1,833 | 1,660 | 1,343 | 7,113 | 4,214 | 68.8 | ||||||||
Net interest income | 10,396 | 10,835 | 10,563 | 10,329 | 10,506 | 42,122 | 40,654 | 3.6 | ||||||||
Provision for loan losses | - | (162) | - | 399 | 375 | 237 | 9,954 | (97.6) | ||||||||
Noninterest income | 5,083 | 3,478 | 3,696 | 3,165 | 3,140 | 15,424 | 12,629 | 22.1 | ||||||||
Noninterest expense | 10,304 | 8,991 | 9,606 | 9,412 | 8,961 | 38,314 | 37,369 | 2.5 | ||||||||
Income before income taxes | 5,175 | 5,484 | 4,653 | 3,683 | 4,310 | 18,995 | 5,960 | 218.7 | ||||||||
Income taxes | 780 | 985 | 669 | 446 | 506 | 2,880 | (165) | (1,845.5) | ||||||||
Net income | $4,395 | $4,499 | $3,984 | $3,237 | $3,804 | $16,115 | $6,125 | 163.1 | ||||||||
Diluted earnings per share | $1.01 | $1.03 | $0.90 | $0.73 | $0.86 | $3.67 | $1.39 | 164.0 | ||||||||
Regular cash dividends paid | $0.30 | $0.30 | $0.30 | $0.27 | $0.27 | $1.17 | $1.05 | 11.4 | ||||||||
(1) Due to rounding, the sum of the quarters may not equal the amount reported for the year | ||||||||||||||||
12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | ||||||||||||
Balance Sheet Highlights (as of) | ||||||||||||||||
Total assets | $1,270,923 | $1,301,773 | $1,252,141 | $1,212,960 | $1,209,587 | |||||||||||
Investment and equity securities | 187,873 | 147,712 | 129,812 | 128,258 | 131,846 | |||||||||||
Loans, net | 922,609 | 925,033 | 969,904 | 967,785 | 960,960 | |||||||||||
Deposits | 1,125,392 | 1,159,601 | 1,113,049 | 1,076,491 | 1,082,629 | |||||||||||
Shareholders' equity | 127,528 | 126,100 | 123,914 | 121,491 | 118,396 | |||||||||||
Trust assets under management (fair value) | 790,949 | 763,296 | 763,237 | 753,086 | 684,825 | |||||||||||
Assets under management at third-party brokers (fair value) | 127,976 | 121,466 | 125,448 | 127,515 | 122,213 | |||||||||||
Performance Ratios (as of or for the YTD period ended) | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | |||||||||||
Return on average assets* | 1.29% | 1.26% | 1.18% | 1.08% | 0.52% | |||||||||||
Return on average equity* | 13.17% | 12.89% | 12.02% | 10.90% | 5.34% | |||||||||||
Book value, per share | $29.30 | $29.03 | $28.21 | $27.54 | $26.85 | |||||||||||
Tangible book value | $27.23 | $26.95 | $26.21 | $25.50 | $24.81 | |||||||||||
Market value, per share** | $38.69 | $35.55 | $38.24 | $36.00 | $31.50 | |||||||||||
Market value/book value ratio | 132.05% | 122.46% | 135.55% | 130.72% | 117.32% | |||||||||||
Market value/tangible book value ratio | 142.11% | 131.90% | 145.90% | 141.18% | 126.96% | |||||||||||
Price / earnings multiple year-to-date | 10.54 | 10.01 | 11.73 | 12.33 | 22.66 | |||||||||||
Current quarter dividend yield* | 3.10% | 3.38% | 3.14% | 3.00% | 3.43% | |||||||||||
Dividend payout ratio year-to-date | 31.74% | 32.52% | 34.75% | 36.82% | 75.07% | |||||||||||
Net interest margin | 3.68% | 3.75% | 3.80% | 3.86% | 3.78% | |||||||||||
Nonperforming loans / gross loans | 0.42% | 0.53% | 0.59% | 0.60% | 0.27% | |||||||||||
Nonperforming assets / total assets | 0.31% | 0.59% | 0.68% | 0.70% | 0.44% | |||||||||||
Allowance for loan loss / loans | 1.28% | 1.30% | 1.29% | 1.29% | 1.28% | |||||||||||
Net loans charged-off (recovered) / average loans | 0.07% | 0.06% | 0.05% | 0.05% | 0.97% | |||||||||||
* Annualized | ||||||||||||||||
** Based on the closing price of FRAF on the Nasdaq Capital Market for December, September and June 2019 and the OTCQX for all prior periods |
SOURCE Franklin Financial Services Corporation
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