More annual reports from Franklin Financial Services Corporation:
2023 ReportPeers and competitors of Franklin Financial Services Corporation:
Franklin Financial Services Corporation2 0 0 9 A N N U A L R E P O R T Contents Consolidated Financial Highlights Summary of Selected Financial Data A Message to Our Shareholders FFSC Directors and Officers F&M Trust Officers Office and ATM Locations FFSC Shareholders’ Information Market and Dividend Information 2 3 4 18 19 22 23 24 Franklin Financial Services Corporation (the Corporation) is a holding company with headquarters in Chambersburg, PA. The Corporation’s direct subsidiary is The Farmers and Merchants Trust Company of Chambersburg (the bank, F&M Trust). F&M Trust is a full-service bank offering investment, trust, commercial and retail services with twenty-five community offices in Franklin, Cumberland, Fulton and Huntingdon Counties. 2 Consolidated Financial Highlights ( d o l l a r s i n t h o u s a n d s , e x c e p t p e r s h a r e ) 2009 2008 % increase (decrease) Performance Net income Return on average equity Return on average assets Return on average tangible equity1 Return on average tangible assets1 Shareholders’ Value (per share) Diluted earnings per share Regular cash dividends paid Book value Market value Market value/book value multiple Price/earnings multiple Current dividend yield Safety and Soundness Leverage ratio (Tier 1) Risk-based capital ratio (Tier 1) Tangible common equity ratio2 Nonperforming assets/total assets Allowance for loan losses as a percentage of loans Net charge-offs/average loans Balance Sheet Highlights Total assets Investment securities Loans, net Deposits and customer repurchase agreements Shareholders’ equity Trust assets under management (market value) $ 6,585 $ 8,595 (23) 8.69% 0.69% 10.79% 0.74% 10.99% 1.01% 13.19% 1.05% $ $1.71 $ $2.24 1.08 20.39 16.33 0.80 9.55 1.07 19.10 18.25 0.96 8.15 6.61% 5.92% 7.50% 10.89% 7.47% 1.93% 1.21% 0.26% 7.84% 11.02% 7.72% 0.44% 1.09% 0.19% $979,373 $902,460 149,770 730,626 794,220 78,766 460,233 154,041 668,860 691,653 73,059 497,215 (24) 1 7 (11) 9 (3) 9 15 8 (7) 1Excludes core deposit intangible assets, goodwill and intangible asset amortization. 2Total equity less AOCI, goodwill and intangibles / total assets less goodwill and intangibles. 3 Summary of Selected Financial Data F o r t h e y e a r e n d e d , D e c e m b e r 3 1 ( d o l l a r s i n t h o u s a n d s , e x c e p t p e r s h a r e ) 2009 2008 2007 2006 2005 Summary of Operations Interest income Interest expense Net interest income Provision for loan losses Net interest income after provision for loan losses Noninterest income Noninterest expense Income before income taxes Income tax Net income Per Common Share Basic earnings Diluted earnings Regular cash dividends paid Market value Balance Sheet Data (end of year) Total assets Loans, net Deposits Long-term debt Shareholders’ equity $ 43,757 $ 46,156 $ 49,487 $ 40,902 $ 29,711 14,674 29,083 3,438 25,645 8,880 25,929 8,596 2,011 16,037 30,119 1,193 28,926 6,538 23,189 12,275 3,680 23,796 25,691 990 24,701 10,107 22,793 12,015 2,759 19,956 20,946 240 20,706 8,257 19,296 9,667 2,097 12,173 17,538 426 17,112 6,995 17,058 7,049 937 $ 6,585 $ 8,595 $ 9,256 $ 7,570 $ 6,112 $ 1.71 1.71 1.08 16.33 $ 2.24 2.24 1.07 18.25 $ 2.41 2.40 1.03 24.95 $ 2.11 2.10 0.99 27.30 $ 1.82 1.81 0.95 25.25 $ 979,373 $ 902,460 $ 820,371 $ 799,333 $ 621,357 730,626 738,365 94,688 78,766 668,860 627,341 106,141 73,059 497,215 564,256 606,277 59,714 77,642 521,684 595,295 38,449 71,614 391,788 456,799 48,546 55,670 507,920 538,152 411,165 Trust assets under management (market value) 460,233 Performance Measurements Return on average assets Return on average equity Return on average tangible assets1 Return on average tangible equity1 Dividend payout ratio Average equity to average asset ratio Efficiency ratio Net interest margin 0.69% 8.69% 0.74% 10.79% 62.95% 7.98% 65.35% 3.44% 1.01% 10.99% 1.05% 13.19% 47.66% 9.18% 61.25% 4.03% 1.14% 12.62% 1.18% 15.41% 42.77% 8.98% 61.28% 3.67% 1.07% 11.92% 1.09% 13.42% 47.03% 8.96% 63.06% 3.45% 1.03% 11.13% 1.03% 11.13% 52.31% 9.28% 66.39% 3.45% 1Excludes core deposit intangible assets, goodwill and intangible asset amortization. 4 Bill Snell President & CEO A Message to Our Shareholders Dear Shareholder: Franklin Financial reported earnings of $6,585,000 in 2009, representing a 23.4% decrease from our 2008 earnings of $8,595,000. Diluted earnings per share decreased from $2.24 per share in 2008 to $1.71 per share in 2009. 2009 may have been the most challenging year in the financial services industry since the Great Depression. As 2008 ended, it was clear that we were in a recession and 2009 began with the passage of the largest ever government spending and economic stimulus plan in an effort to jump-start the economy. Despite this initiative, the economy continued further into recession and unemployment continued to climb, reaching double digits. Consumer loan delinquency and foreclosures increased, as did business failures. And the Federal Reserve maintained short-term rates at historic lows. These conditions created a difficult operating environment for many banks during 2009 as net interest margins fell and loan losses increased. As the recession continued, bank failures increased from 25 in 2008 to 140 in 2009. As of February 28, 2010, 22 banks have already been closed. The vast majority of community banks, including F&M Trust, continue to be among the safest and strongest institutions in our nation’s financial system. As a result, we have been tasked by the FDIC with maintaining the solvency of the Deposit Insurance Fund through increased deposit insurance premiums, special assessments, and insurance premium prepayments as the current pace of bank failures is anticipated through at least 2011. 5 Franklin Financial was not immune to this challenging environment but fared much better than many of its peers. Although the media has repeatedly reported that “banks have stopped lending”, we continued to support both consumers and businesses in our marketplace, registering exceptional growth in both loans and deposits during 2009. Some key factors negatively impacting our financial performance in 2009 included: (cid:129) A 3.85% decrease in Net Interest Income on a fully tax equivalent basis (FTE) from $31,488,000 in 2008 to $30,277,000 in 2009. Although growth in loan volume positively impacted FTE Net Interest Income, the Federal Reserve’s action to significantly lower short-term interest rates in December 2008, led to a repricing of loan yields which was not offset as quickly by the repricing of The vast majority of community banks, including F&M Trust, continue to be among the safest and strongest institutions in our nation’s financial system. deposit costs. (cid:129) FDIC insurance premiums increased from $105,000 in 2008 to $1,397,000 in 2009. In February 2009, the FDIC published a final rule imposing a seven basis point increase in the current deposit insurance assessment rates starting in the first quarter. Subsequently, on May 22nd, the FDIC adopted a final rule imposing a five basis point special assessment on each insured depository institution’s assets minus Tier I Capital as of June 30, 2009. The special assessment was collected on September 30th and equated to approximately $450,000 for Franklin Financial. Finally, on September 29th, the FDIC adopted an Amended Restoration Plan to allow the Deposit Insurance Fund to return to its statutorily mandated minimum reserve ratio of 1.15% within eight years. At the same time, the FDIC required all insured institutions to prepay as of December 30th their estimated quarterly risk-based assessment for the fourth quarter of 2009 and for all of 2010, 2011, and 2012. Franklin Financial paid an assessment of approximately $4,000,000 which was recorded as a prepaid expense. (continued) 6 Total Assets as dollars in millions Net Loans as dollars in millions Total Deposits & Repos as dollars in millions 2 7 9 2 0 9 0 2 8 9 9 7 1000 900 800 700 600 1 2 6 500 400 2005 2006 2007 2008 2009 750 700 650 600 550 500 450 400 350 1 3 7 9 6 6 4 6 5 2 2 5 2 9 3 2005 2006 2007 2008 2009 800 750 700 650 600 550 500 450 400 4 9 7 4 7 6 4 7 6 2 9 6 9 0 5 2005 2006 2007 2008 2009 (cid:129) An increase in our Provision for Loan Losses from $1,193,000 in 2008 to $3,438,000 in 2009 as a result of continued loan growth as well as an increase in Net Charge-offs and Nonperforming Assets. (cid:129) A $588,000 increase in Pension Expense relating to the low interest rate environment. (cid:129) Other Than Temporarily Impaired write-downs on financial services stocks in our investment portfolio in the amount of $422,000 and net losses on the sale of other securities totaling $522,000. 7 Net Income as dollars in thousands Regular Cash Dividends Paid as dollars per share ROE/ROA as percentage values 10000 9000 8000 7000 6000 5000 4000 6 5 2 9 , 5 9 5 8 , 5 8 5 6 , 0 7 5 7 , 2 1 1 6 , 2005 2006 2007 2008 2009 1.1 1.0 0.9 0.8 0.7 7 0 . 1 8 0 . 1 3 0 . 1 9 9 . 0 5 9 . 0 16.0 14.5 13.0 11.5 10.0 8.5 15.41 Tangible ROE 13.19 13.42 11.13 11.13 11.92 12.62 ROE 10.79 10.99 8.69 7 0 . 1 A O R 9 0 . 1 A O R T 3 0 . 1 A O R 3 0 . 1 A O R T 4 1 . 1 A O R 8 1 . 1 A O R T 5 0 . 1 A O R T 1 0 . 1 A O R 4 7 . 0 A O R T 9 6 . 0 A O R 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 1.50 1.00 0.50 0.00 As a shareholder, you received a 1% increase in regular cash dividends from $1.07 in 2008 to $1.08 in 2009. Our current annual dividend payout represents a 6.6% return based upon the closing price of Franklin Financial stock at December 31, 2009. Regular cash dividends have grown at an average rate of 4.2% over the past five years. The market value of a share of Franklin Financial stock decreased 10.5% from a closing price of $18.25 at year-end 2008 to $16.33 at December 31, 2009. We are (continued) F&M Trust Management team (left to right): Ken Ditzler Mike Kugler Trish Hanks Ron Cekovich Mark Hollar Bill Snell Tom Peterson Karen Carmack (Not pictured: Sandy Small) Left to right: Mike Kugler, SVP & Commercial Services Market Manager, F&M Trust Sherry L. Flair, Controller, Martin’s J. Anthony Martin, VP Business Information Development, Martin’s Joseph A. Martin, Director of Production Operations, Martin’s James A. Martin, President, Martin’s Ronald G. Gipe, Executive Vice President, Martin’s Dianne Cornman, CTP, VP Cash Management Specialist, F&M Trust Mar tin’s Famous Pastry Shoppe, Inc. The Martins have been in business for more than 50 years—starting with their famous potato rolls and expanding to include Gibbles® snack products. Today, the company continues to enjoy the community-based style of F&M Trust. Mike Kugler and Dianne Cornman keep everything easy with smart financing and cash management options, helping the Martin’s team can stay focused on what they do best—serving hungry grocery and wholesale buyers up and down the East Coast. 9 Melanie Gordon, Financial Services Officer and Manager, joined F&M Trust in 2009 as St. Thomas Community Office Manager. She brings 14 years of banking experience and a solid personal commitment to the community— including helping with youth sports and serving as deacon at her church. not optimistic that financial services stocks will show a significant recovery until investors again regain confidence in both the economic recovery as well as the future earnings capacity of our industry. Franklin Financial’s total assets reached $979,373,000 at December 31, 2009, representing an 8.5% increase over 2008. Net loans grew by 9.2% on a year-over-year basis. Average loan outstandings increased by $89,757,000 or 14.5% in 2009. Commercial loan demand remained strong resulting in $235,000,000 of closed loan transactions which increased the average loan outstandings in this portfolio by $107,731,000 or 26.7%. Average consumer loan outstandings decreased 5.8% to $125,091,000 as consumers “pulled in their horns” and focused on reducing debt and increasing savings. The lower interest rate environment did, however, create a “refi boom” in residential mortgage closings. Closings in 2009 increased to $49,500,000 from $27,800,000 in 2008. Average residential mortgage outstandings declined by 12.5% or $10,494,000 as we continue to hold fewer mortgage originations in our portfolio. We experienced strong deposit growth in 2009 as consumers and businesses built liquidity and moved funds out of higher risk investments. Total deposits and repurchase agreements as measured at year-end increased by 14.8% to $794,220,000 while average deposits and repurchase agreements increased 11.8% to $754,008,000. In addition to significant growth in Certificate of Deposit balances as a result of several successful promotions, average core deposits (i.e. checking, savings, and interest bearing checking) increased by 3.8% to $225,415,000 while our Money Management Accounts increased by $7,173,000 to $216,201,000. Our financial condition remains strong as evidenced by a Total Risk-Based Capital Ratio of 10.89% and a Leverage Capital Ratio of 7.50%. These ratios remain above the levels that federal regulators require for an institution to be considered “well capitalized”. Our Tangible Capital Ratio, which measures Total Equity net of Accumulated Other Comprehensive Income, Goodwill and Intangible Assets as a (continued) 10 Jim Probst, Vice President Investment & Trust Services Officer has been a valuable asset with F&M Trust for the past 35 years. Based at the Memorial Square office, Jim works to connect his clients with reliable asset management solutions and personal guidance on trust management needs. percentage of Total Assets excluding Goodwill and Intangible Assets, stands at 7.47% at year-end. This ratio has increasingly been the focus of both regulators and investors seeking to measure true capital adequacy. Franklin Financial’s safety and soundness indicators continue to compare favorably to peers. As a result of the continued loan growth as well as an increase in net charge-offs from .19% in 2008 to .26% in 2009 and an increase in Nonperforming Assets/Total Assets to 1.93%, we increased our Provision for Loan Losses by $2,245,000. Accordingly, our Allowance for Loan Losses as a percentage of Total Loans increased from 1.09% at year-end 2008 to 1.21% at December 31, 2009. The market value of assets under management by our Investment and Trust Services Department decreased from $497,215,000 at year-end 2008 to $460,233,000 as of December 31, 2009, reflecting decreased market valuations. Assets under management as reported does not include approximately $97,700,000 in assets held at third party brokers at December 31, 2009 compared to $72,100,000 at year-end 2008. Investment and Trust Services fee income, including revenue generated through the Personal Investment Centers increased modestly from $3,500,000 in 2008 to $3,519,000 in 2009 again reflecting depressed market valuations through most of 2009. Our investment in Bankers Settlement Services-Capital Region, LLC, a bank-owned title insurance agency based in Harrisburg and affiliated with Investors Title Insurance Company generated dividends in the amount of $80,000. The agency’s revenues and profitability increased by 25% and 49% respectively. Mortgage originations by F&M Trust and insured by Bankers Settlement Services accounted for approximately 13.3% of the agency’s total net premium revenue in 2009. The lending officers of F&M Trust achieved an overall penetration ratio of 41% on residential mortgages closed. We continue to introduce products and services providing added convenience to our customers and prospective customers. During the first quarter, we added the capability of accepting both residential mortgage and home equity loan (continued) Custom Sign Studio When Wayne Driscoll (left), owner of Custom Sign Studio (formerly known as Wayne Driscoll Custom Sign), moved from Richmond, VA to Waynesboro, he knew he wanted a bank that could provide sincere personal service and smart financial tools that fit the needs of his growing business. And that’s exactly what Lynn Waite (right) and her F&M Trust team has been providing. She works to help Wayne finance equipment purchases to keep up with technology advances, as well as make building renovations. He’s converting a former local tavern site into an attractive new office and production space. Wayne points out that the best thing about F&M Trust is the “truly personal service” he receives. He likes that everyone knows him by name...and he knows them, too. JW Music Justin Walters, owner of JW Music in Carlisle and Mechanicsburg enjoys playing violin and getting musical instruments into the hands of countless music lovers, young and old. But what’s really music to his ears is the sound of business success. Thanks to the support of Dave Zimmerman and F&M Trust, Justin has been able to expand—acquiring Wray’s Music House in Lemoyne. He can now reach even more talented hands in local towns and schools. 13 Tony Damore, Assistant Vice President Cumberland County Market, joined F&M Trust during 2009. As Market Manager with 20 years of experience, he is committed to building better customer relationships throughout Cumberland County. Tony knows the meaning of community— volunteering his time and talents in Shippensburg and Carlisle. applications online. In addition to the ability to review our current interest rates and programs as well as to be notified electronically as interest rates change, the system features a “Check Status” feature enabling the applicant(s) to determine the status of an in-process application and the capability of issuing a prequalification approval letter online. The volume of on-line applications to date has consistently exceeded our expectations. Our Investment and Trust Services Department introduced a new software system with the ability to create a truly comprehensive financial plan. The response from both existing and prospective customers has been very positive. Additionally, our tax preparation services were outsourced to FAST-TAX, which offers state-of-the-art capabilities. In October, we converted to a new online bill pay solution which enabled us to increase the percentage of all bill pay transactions that are processed electronically from less than 20% to more than 70%. Customers have the option to receive and pay their bills electronically. We are delighted that our customers have embraced this new platform as utilization more than doubled during the first four months. Our small business initiative continues to produce measurable results. F&M Trust executed multi-year contracts to partner with the Small Business Development Centers (SBDCs) at Shippensburg University and St. Francis University to present educational programs and workshops for aspiring, as well as existing small business owners throughout our marketplace. We will continue to be the exclusive sponsor of the “First Step” and “Business Planning” workshops conducted by the SBDCs. F&M Trust’s Small Business Relationship Managers participate in each workshop, presenting a segment focused on financing options. In addition to providing entrepreneurs with education, information, and tools to build and sustain successful businesses which will directly benefit our local economy, partnering with these SBDCs has provided F&M Trust with an opportunity to increase our penetration of the small business market. In the first quarter of 2010, we rolled out a Small Business Contact program targeted at specific businesses which will feature a DVD highlighting the Small (continued) 14 Rod Salter, joined F&M Trust in 2008 as Personal Investment Counselor. Rod’s goal with the Personal Investment Center at F&M Trust is to provide personal service and experienced guidance— helping Franklin County clients develop and maintain reliable investment strategies. Business Services of F&M Trust. We are also evaluating opportunities to add a Small Business segment to the Money Clinic. F&M Trust introduced the Money Clinic in 2008 to provide basic financial information and to increase the “money skills” and “Financial IQ” of customers and prospective customers. The initial focus of the Money Clinic (www.mymoneyclinic.com) was toward Generation X and Generation Y consumers. The information on the web site is general, and visitors can be directed to an F&M Trust professional about financial solutions for their specific situation. Operational efficiency was greatly enhanced following the implementation of “branch capture.” We added additional functionality to our check processing system by installing software that “reads” the hand written amounts on checks. Currently, this system is able to “read” more than 80% of the items automatically. We also deployed equipment in our community offices to electronically scan items such as deposits and loan payments taken over the teller line and transmit them to our check processing system. This technology, which also supports Franklin Busine$$ e-deposit (remote deposit capture) for our business customers, has enabled us to standardize our daily cut-off times across all of our community offices and to avoid delays during inclement weather in transporting items to our check processing center. We made an additional investment in upgrading our community office network during 2009. The Carlisle Crossing Office was expanded to accommodate the growth of our Cumberland County Regional and Commercial Services staff. In addition to completing a major renovation to our Philadelphia Avenue office started in the fourth quarter of 2008, both our St. Thomas and Shippensburg offices received upgrades. Our ATM network will expand again in 2010 with new drive-up units at Ayr Town Center in McConnellsburg and in the Riverview Business Center in Mount Union. Both locations, originally planned for 2009, will be operational by June 30th. We have also commenced renovations to the former Community Trust office on Market Street in Camp Hill to add a drive-up and retail banking lobby. In addition to Investment & Trust Services as well as consumer banking, we will also offer our small business and commercial banking products and services at this location. This facility is scheduled to be operational in the third quarter. (continued) Left to right: Don Trego, Small Business Relationship Manager, F&M Trust Paul Johnston, Fulton County Market Manager, F&M Trust Stuart Ulsh, Owner, TMS Excavating LLC Mendy Ulsh, Administrative Assistant, TMS Excavating LLC Tami Ulsh, Office Manager, TMS Excavating LLC TMS Excavating LLC Since 2003, TMS Excavating LLC in McConnellsburg has been digging into steady success in Fulton, Franklin, Frederick and Washington Counties. Recently, owner Stuart Ulsh expanded TMS to become an authorized distributor of Allan Block and Hardscape Products as well. Late in 2009, Stuart desired a better local banking relationship—one that could help his business grow without digging TMS into a big hole. So he turned to Don Trego and Paul Johnston at F&M Trust. Don and Paul listened to Stuart’s objectives, and developed a custom financial solution that could help TMS scoop up new business—and reliable profit. Oaktree Environmental Services Oaktree Environmental Services in Carlisle isn’t just a business about managing environmental waste for 3,000 clients. “It’s about taking routine service to the next level, so that our customers never have to worry about a thing. Simple as that!” according to GM Steve Kreis. That could be why Oaktree chose F&M Trust, too. Lindsay Reisinger and the business services team deliver flexible financial services, so Oaktree can think less about the finances, and more about service and growth. 17 Before concluding, I would like to take this opportunity to recognize and thank Kurt Suter who retired from the Franklin Financial Board of Directors at the end of January 2010 for his seven years of dedicated service. His insight will be missed. I anticipate that 2010 will be another challenging year for financial institutions. In addition to continued high unemployment and related asset quality issues, as well as new regulations, the biggest uncertainty for F&M Trust and the financial services industry remains what actions the FDIC will take in order to maintain the solvency of the Deposit Insurance Fund. The FDIC’s action to require insured financial institutions to prepay insurance premiums for 2010, 2011, and 2012 as of December 30, 2009 added approximately $43 billion to the Deposit Insurance Fund. However, the FDIC estimates that at least $100 billion will be required to handle projected bank failures in 2010 and 2011. I anticipate that the FDIC’s loss estimate will continue to grow as we move through 2010. Your interest and support as Franklin Financial shareholders is sincerely appreciated. Sincerely, William E. Snell, Jr. President & CEO FFSC Board of Directors Charles S. Bender II Retired – F&M Trust Executive Vice President Martin R. Brown President – M.R. Brown Funeral Home, Inc. G. Warren Elliott Regional Representative – General Code Publishers; Former Franklin County Commissioner Donald A. Fry President – Cumberland Valley Rental and Towne Cleaners – ANDOCO, Inc. Allan E. Jennings, Jr. President – Jennings Chevrolet Oldsmobile Cadillac, Inc. Stanley J. Kerlin, Esq. Attorney – Law Offices of Stanley J. Kerlin Jeryl C. Miller Vice President and Secretary – Charles W. Karper, Inc. Stephen E. Patterson, Esq. Principal – Salzmann Hughes P.C. Charles M. Sioberg Chairman of the Board Vice President – Martin & Martin, Inc. William E. Snell, Jr. President and Chief Executive Officer Kurt E. Suter* President – Carlisle Mobile Homes, Inc. and Eastern Motor Inns Martha B. Walker, Esq. Partner – Walker, Connor & Spang, LLC FFSC Officers Charles M. Sioberg Chairman of the Board Mark R. Hollar Treasurer and Chief Financial Officer Joyce A. Riley Assistant Corporate Secretary William E. Snell, Jr. President and Chief Executive Officer Catherine C. Angle Corporate Secretary *Retired from the Board effective 1/31/10. 18 19 Management William E. Snell, Jr. President and Chief Executive Officer Mark R. Hollar Senior Vice President Chief Financial Officer, Controller and Treasurer Karen K. Carmack Senior Vice President Human Resources Manager, Affirmative Action and HIPPA Privacy Officer Ronald L. Cekovich Senior Vice President Technology Services Manager Kenneth C. Ditzler Senior Vice President Marketing and Corporate Communications Manager Michael E. Kugler Senior Vice President Commercial Services Market Manager Sandra G. Small, Esq. Senior Vice President Risk Management Officer Patricia A. Hanks Vice President Retail Services Market Manager Thomas L. Peterson, LUTCF Vice President Investment & Trust Services Market Manager F&M Trust Officers Relationship Management Division Memorial Square Office Summer Franzoni Assistant Vice President and Manager Commercial Services Dianne L. Cornman, CTP Vice President Cash Management Specialist Debra K. Michael Vice President Brian E. Weikert Vice President David P. Zimmerman Vice President Kathleen M. Bloss Assistant Vice President Credit Department Manager Kenneth W. Brookens Assistant Vice President Philip A. Pantano Assistant Vice President Jeramy D. Culler Credit Analyst Eric J. Fleming Credit Analyst Retail Services L. Kay Estep Assistant Vice President GO Club Coordinator CHAMBERSBURG MARKET OFFICES Lincoln Way East Office Kim S. McKenrick Assistant Vice President and Manager Dana L. Kaiser Financial Services Officer and Assistant Manager Pamela J. Kolsun Assistant Financial Services Officer Norland Avenue Office Desirae N. Fleagle Financial Services Officer and Manager Orchard Park Office Antonia L. Diffenderfer Assistant Vice President and Manager Christina L. Yoder Assistant Financial Services Officer and Assistant Manager Penn Hall and Menno Village Offices Bonita C. Yocum Assistant Vice President and Manager Philadelphia Avenue Office Phyllis J. Amsley-Drawbaugh Financial Services Officer and Manager St. Thomas Office Melanie D. Gordon Financial Services Officer and Manager West Side Office N. Joy Weller Vice President and Manager 20 F&M Trust Officers (continued) SOUTHERN FRANKLIN COUNTY MARKET OFFICES Boiling Springs and Carlisle Crossing Offices Kathy J. Miller Assistant Vice President Southern Franklin County Market Manager Lynn A. Waite Small Business Relationship Manager David R. Winters Assistant Vice President and Manager Kevin M. Stoner Financial Services Officer and Assistant Manager Boiling Springs Office Greencastle and Marion Offices Camp Hill Office Karen S. Showalter Assistant Vice President and Manager Katrina E. Buck Financial Services Officer and Manager Tracy D. Burger Assistant Financial Services Officer and Assistant Manager Greencastle Office Vicky L. Carson Assistant Financial Services Officer and Assistant Manager Marion Office Mont Alto Office Renee L. Preso Assistant Vice President and Manager Linda K. Stottlemyer Financial Services Officer and Assistant Manager Waynesboro Office Natasha J. Carmack Financial Services Officer and Manager Chastity L. Wantz Assistant Financial Services Officer and Assistant Manager CUMBERLAND COUNTY MARKET OFFICES Anthony L. Damore Assistant Vice President Cumberland County Market Manager Lindsay J. Reisinger Small Business Relationship Manager Newville Office Ellen L. Ile Financial Services Officer and Manager Ritner Highway and Hanover Street Offices I. Edward Bidelspach Assistant Vice President and Manager Shippensburg Office Barbara A. Hoover Financial Services Officer and Manager FULTON & HUNTINGDON COUNTIES MARKET OFFICES Paul M. Johnston Assistant Vice President Fulton County Market Manager Donald L. Trego Assistant Vice President Small Business Relationship Manager Hustontown Office Denise M. Doyle Financial Services Officer and Manager McConnellsburg Office Mary E. Wright Financial Services Officer and Manager Tammy L. Kelly Assistant Financial Services Officer and Assistant Manager Orbisonia Office Shawna C. Dunmire Financial Services Officer and Manager Penns Village Office Brenda J. Gordon Financial Services Officer and Manager Warfordsburg Office Geraldine A. Ramsey Financial Services Officer and Manager Consumer Lending Services Susan E. Michael Vice President Investment & Trust Services Carole L. Crist Vice President Investment & Trust Services Officer Ronald R. Froeschle, QPA, QKA Vice President Employee Benefits Officer Warren M. Hurt Vice President Senior Investment Portfolio Manager Charles R. Porter Vice President Business Development James P. Probst Vice President Investment & Trust Services Officer Susan A. Russell Vice President Investment & Trust Services Officer 21 F&M Trust Officers (continued) Diana L. Sponseller Vice President Investment & Trust Services Officer Dennis L. Wilson Vice President Investment & Trust Services Officer Mark P. Bernier Investment Portfolio Manager Heather C. Hershey Estate Administration Officer Robin L. Murray Trust Operations Manager James R. Ifert II Assistant Investment and Trust Services Officer Personal Investment Counselor Avis M. Graham, CFP Assistant Investment and Trust Services Officer Personal Investment Counselor Roderick C. Salter, FSS Assistant Investment and Trust Services Officer Personal Investment Counselor Gerald J. Slothower, Sr. Assistant Investment and Trust Services Officer Personal Investment Counselor Jack L. Turner Assistant Investment and Trust Services Officer Personal Investment Counselor Marketing Melissa D. Miller Marketing Officer Samantha J. Burke Marketing Officer Facilities Barry L. Shetter Assistant Vice President Facilities Manager Finance & Control Kim A. Diehl Financial Analyst Amy B. Herrold Assistant Controller Corporate Catherine C. Angle Corporate Secretary Joyce A. Riley Assistant Corporate Secretary Risk Management Division Compliance Lorie M. Heckman Vice President Bank Secrecy Act, Compliance and Security Officer John W. Olander Assistant Compliance Officer Mary F. Cramer Bank Secrecy Act and OFAC Analyst Credit Administration William A. Pryor Vice President Credit Recovery Manager Technology Services Division Barry R. Walter Vice President Technology Services Officer Patricia R. Ganoe Assistant Vice President Deposit Operations Manager Pamela A. Johns Assistant Vice President Loan Servicing Manager Olaf R. Hasse Vice President Loan Portfolio Risk Management Officer Matthew C. Clark Assistant Technology Services Officer Stacey A. Stenger Data Operations Manager Rachel A. Jennings Assistant Documentation Review Officer Janet E. Stamper Assistant Documentation Review Officer General Contact Information FFSC / F&M Trust Headquarters Local: 717-264-6116 Toll-free: 888-264-6116 Freedom Access Center (telephone banking service) Local: 717-261-3662 Toll-Free: 888-261-3662 24-Hour Online Access www.fmtrustonline.com 22 Community Office Locations Chambersburg Area Lincoln Way East 1712 Lincoln Way East, Chambersburg 717-264-9414 Memorial Square 20 South Main Street, Chambersburg 717-264-6116 Menno Village 2075 Scotland Avenue, Chambersburg 717-261-3697 Norland Avenue 870 Norland Avenue Chambersburg 717-262-2085 Orchard Park 841 Wayne Avenue, Chambersburg 717-263-1801 Penn Hall 1425 Philadelphia Avenue, Chambersburg 717-261-3660 Philadelphia Avenue 2405 Philadelphia Avenue, Chambersburg 717-264-5122 St. Thomas 6962 Lincoln Way West, St. Thomas 717-369-3240 West Side 1100 Lincoln Way West, Chambersburg 717-263-9168 Southern Franklin County Greencastle 518 N. Antrim Way, Greencastle 717-597-2384 Marion 5293 Main Street, Marion 717-375-2200 Mont Alto 8 Park Street, Mont Alto 717-749-3161 Waynesboro 200 East Main Street, Waynesboro 717-762-2188 Cumberland County Boiling Springs 3 East First Street, Boiling Springs 717-241-4131 Camp Hill 3907 Market Street, Camp Hill 717-731-9604 Carlisle Crossing 214A Westminster Drive, Carlisle 717-243-2215 Hanover Street 14 North Hanover Street, Carlisle 717-249-1331 Newville 9 West Big Spring Avenue, Newville 717-776-2240 Ritner Highway 1901 Ritner Highway, Carlisle 717-960-1400 Shippensburg 13 Shippensburg Shopping Center 717-530-2100 Star ®/Cirrus® ATM Locations Fulton and Huntingdon Counties Hustontown 7781 Waterfall Road, Hustontown 717-987-3193 McConnellsburg 100 Lincoln Way East, McConnellsburg 717-485-3144 Orbisonia 18810 Sandy Ridge Station, Orbisonia 814-447-3104 Penns Village 182 Buchanan Trail, McConnellsburg 717-485-3167 Warfordsburg 560 Great Cove Road, Warfordsburg 717-294-3288 Chambersburg Area Downtown Drive-Up 150 Lincoln Way East, Chambersburg Lincoln Way East 1712 Lincoln Way East, Chambersburg West Side 1100 Lincoln Way West, Chambersburg Orchard Park 841 Wayne Avenue, Chambersburg Philadelphia Avenue 2405 Philadelphia Avenue, Chambersburg Norland Avenue 870 Norland Avenue, Chambersburg Northgate Commons 1500 Northfield Drive, Chambersburg Penn Hall 1425 Philadelphia Avenue, Chambersburg Menno Village 2075 Scotland Avenue, Chambersburg St. Thomas 6962 Lincoln Way West, St. Thomas Fayetteville 4025 Lincoln Way East, Fayetteville Southern Franklin County Greencastle 518 North Antrim Way, Greencastle Marion 5293 Main Street, Marion Mont Alto 8 Park Street, Mont Alto Penn National Clubhouse 3720 Clubhouse Drive, Fayetteville Waynesboro 200 East Main Street, Waynesboro Waynesboro Market Place 11123 Buchanan Trail East, Waynesboro Carlisle Plaza Drive-Up 700 East High Street, Carlisle Zullinger 4884 Buchanan Trail East, Zullinger Carlisle Crossing 214A Westminster Drive, Carlisle Cumberland County Boiling Springs 3 East First Street, Boiling Springs Newville 9 West Big Spring Avenue, Newville Shippensburg 13 Shippensburg Shopping Center Ritner Highway 1901 Ritner Highway, Carlisle Hanover Street 14 North Hanover Street, Carlisle Fulton and Huntingdon Counties McConnellsburg 100 Lincoln Way East, McConnellsburg Penns Village 182 Buchanan Trail, McConnellsburg Hustontown 7781 Waterfall Road, Hustontown Warfordsburg 560 Great Cove Road, Warfordsburg Orbisonia 18810 Sandy Ridge Station, Orbisonia 23 FFSC Shareholders’ Information Dividend Reinvestment Plan Stock Information Franklin Financial Services Corporation offers a The following brokers are registered as market dividend reinvestment program whereby shareholders makers of Franklin Financial Services Corporation’s with stock registered in their own names may reinvest common stock: their dividends in additional shares of the Corporation. Information concerning this optional program is available by contacting the Corporate Secretary at 20 South Main Street, PO Box 6010, Chambersburg, PA 17201-6010, telephone 717-264-6116. Dividend Direct Deposit Program Franklin Financial Services Corporation offers a dividend direct deposit program whereby shareholders with stock registered in their own names may choose to have their dividends deposited directly into the bank account of their choice on the dividend payment date. Information concerning this optional program is available by contacting the Corporate Secretary at 20 South Main Street, PO Box 6010, Chambersburg, PA 17201-6010, telephone 717-264-6116. Annual Meeting Boenning & Scattergood, Inc. 4 Tower Bridge 200 Bar Harbor Drive, Suite 300 West Conshohocken, PA 19428 800-883-1212 Morgan Keegan & Co., Inc. 3050 Peachtree Road, NW, Suite 704 Atlanta, GA 30305 866-353-7522 RBC Wealth Management 2101 Oregon Pike Lancaster, PA 17601 800-604-1471 Stifel, Nicolaus & Co. 20 Ash Street, Suite 400 Conshohocken, PA 19428 800-223-6807 Registrar and Transfer Agent: The registrar and transfer agent for Franklin Financial The Annual Shareholders’ Meeting will be held Services Corporation is Fulton Financial Advisors, N.A., Tuesday, April 27, 2010 at the Orchards Restaurant, One Penn Square, PO Box 4887, Lancaster, PA 17602, 1580 Orchard Drive, Chambersburg. The Business telephone 717-291-2546. Meeting will begin at 10:30 a.m. and will be followed by a luncheon. If interested in attending, please complete and return the reservation form reply card by April 12th. Web site: www.franklinfin.com 24 Market and Dividend Information The Corporation’s common stock is not actively traded in There were 2,111 shareholders of record as the over-the-counter market. The Corporation’s stock is of December 31, 2009. The range of high and listed under the symbol “FRAF” on the O.T.C. Electronic low bid prices, as reported by local sources is Bulletin Board, an automated quotation service. Current shown below for the years 2009 and 2008. Also price information is available from account executives at shown are the regular quarterly cash dividends most brokerage firms as well as the registered market paid for the same years. makers of Franklin Financial Services Corporation common stock as listed above under Shareholders’ Information. 2009 Per Share 2008 Per Share High Low Dividends Declared High Low Dividends Declared First quarter $19.00 $14.00 $0.27 First quarter $24.80 $23.10 $0.26 Second quarter Third quarter Fourth quarter 17.50 17.00 20.50 14.50 15.75 15.46 0.27 0.27 0.27 $1.08 Second quarter Third quarter Fourth quarter 24.15 23.00 21.51 23.00 20.30 16.50 0.27 0.27 0.27 $1.07 Total Return Performance Graph The Securities and Exchange Commission requires that a publicly held company include in its Annual Report a stock performance graph comparing its five-year cumulative total return to shareholders with the returns generated by an industry-specific index (or peer group index) and with the return generated by a broad market index. The following graph compares the cumulative total return to shareholders of Franklin Financial with the NASDAQ – Total U.S. Index (a broad market index prepared by the Center for Research in Security Prices at the University of Chicago Graduate School of Business) and with the Northeast OTC-BB and Pink Banks Index (an industry- specific index prepared by SNL Financial LC) for the five year period ended December 31, 2009, in each case assuming an initial investment of $100 on December 31, 2004 and the reinvestment of all dividends. E U L A V X E D N I 140 130 120 110 100 90 80 70 CUMULATIVE TOTAL RETURN FOR THE FIVE-YEAR PERIOD ENDING DECEMBER 31, 2009 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 Franklin Financial Services NASDAQ Composite SNL Northeast OTC-BB & Pink Banks Index 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 Franklin Financial Services Corporation NASDAQ Composite SNL Northeast OTC-BB & Pink Banks 100.00 100.00 100.00 96.14 101.37 99.70 107.98 111.03 103.03 102.62 121.92 100.33 78.68 72.49 81.72 75.02 104.31 76.78 Period Ended P O B o x 6 0 1 0 C h a m b e r s b u r g , PA 1 7 2 0 1 8 8 8 - 2 6 4 - 6 1 1 6 w w w. f r a n k l i n f i n . c o m
Continue reading text version or see original annual report in PDF format above