2 0 1 0 A N N U A L R E P O R T
Supporting
the local economy
and serving
our communities
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.
1
2
4
6
7
9
3
5
8
10
1
2
4
7
10
9
11
3
5
12
6
8
Images from Front Cover
1.
Fulton Valley Ag Services
2.
3.
4.
Army Heritage Museum
Mont Alto Fire Company – Fairgrounds/Event Center
Franklin County 4H Beef/Livestock Sale
5. Waynesboro YMCA
6.
7.
8.
9.
Vacon, Inc.
Cumberland County United Way
Hirschmann
Fulton County Medical Center
10. Safe Harbour
Images from Back Cover
1
2.
ServiceMaster
James Buchanan Sports
3 & 4. Carlisle North East Street Revitalization Project
5.
6.
7.
Toys For Tots
Project Share
Camp Hill Lions Club
8 & 9. Chambersburg Senior Housing Project
10. Shade Gap Area Fire Company
11.
12.
Totem Pole Playhouse
Lynch Mechanicals
Consolidated Financial Highlights
(dollars in thousa n ds, e xcept p e r sh a re )
2010
2009
% increase
(decrease)
Performance Measurement
Net income
Return on average assets
Return on average equity
Return on average tangible assets1
Return on average tangible equity1
Efficiency ratio2
Net interest margin
Current dividend yield
Dividend payout ratio
Balance Sheet Highlights
Total assets
$ 7,612
0.78%
9.34%
0.82%
11.27%
63.43%
3.53%
5.92%
55.10%
$ 6,585
16
0.69%
8.69%
0.74%
10.79%
65.35%
3.44%
6.61%
62.95%
(3)
(17)
1
(1)
5
15
15
-
3
12
$951,889
$979,373
Investment Securities (includes restricted stock)
Loans, net
Deposits and customer repurchase agreements
Shareholders’ equity
123,775
739,841
785,495
82,639
149,770
730,626
794,220
78,766
Shareholders’ Value (per common share)
Diluted earnings per share
$ 1.96
$ 1.71
Basic earnings per share
Regular cash dividends paid
Book value
Market value
Market value/book value multiple
Price/earnings multiple
Safety and Soundness
Leverage ratio (Tier 1)
Risk-based capital ratio (Tier 1)
Tangible common equity ratio3
Nonperforming assets/gross loans
Nonperforming assets/total assets
Allowance for loan losses as a % of loans
Net charge-offs/average loans
Average equity to average asset ratio
Trust Assets
1.96
1.08
21.09
18.25
0.87
9.31
8.16%
11.73%
8.21%
3.68%
2.96%
1.18%
0.45%
8.36%
1.71
1.08
20.39
16.33
0.80
9.55
7.50%
10.89%
7.47%
2.47%
1.93%
1.21%
0.26%
7.98%
Trust assets under management (market value)
$490,420
$460,233
7
1 Excludes core deposit intangibles, goodwill and intangible amortization
2 Noninterest expense / tax equivalent net interest income plus noninterest income less net securities gains
3 Total equity less AOCI, goodwill and intangibles / total assets less goodwill and intangibles
2
2
Summary of Selected Financial Data
(dollars in thousa n ds, e xcept p e r sh a re )
2010
2009
2008
2007
2006
Fo r the y ear ended , D ece mber 3 1
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
Performance measurements
Return on average assets
Return on average equity
Return on average tangible assets1
Return on average tangible equity1
Efficiency ratio2
Net interest margin
Current dividend yield
Dividend payout ratio
$ 43,284
12,443
30,841
3,235
27,606
9,366
26,423
10,549
2,937
$ 7,612
$ 43,757
14,674
29,083
3,438
25,645
8,880
25,929
8,596
2,011
$ 6,585
$ 46,156
16,037
30,119
1,193
28,926
6,538
23,189
12,275
3,680
$ 8,595
$ 49,487
23,796
25,691
990
24,701
10,107
22,793
12,015
2,759
$ 9,256
$ 40,902
19,956
20,946
240
20,706
8,257
19,296
9,667
2,097
$ 7,570
0.78%
9.34%
0.82%
11.27%
63.43%
3.53%
5.92%
55.10%
0.69%
8.69%
0.74%
10.79%
65.35%
3.44%
6.61%
62.95%
1.01%
10.99%
1.05%
13.19%
61.25%
4.03%
5.92%
47.66%
1.14%
12.62%
1.18%
15.41%
61.28%
3.67%
4.17%
42.77%
1.07%
11.92%
1.09%
13.42%
63.06%
3.45%
3.66%
47.03%
Shareholders’ Value (per common share)
Diluted earnings per share
Basic earnings per share
Regular cash dividends paid
Book value
Market value
Market value/book value multiple
Price/earnings multiple
Balance Sheet Highlights
$ 1.96
1.96
1.08
21.09
18.25
0.87
9.31
$ 1.71
1.71
1.08
20.39
16.33
0.80
9.55
Total assets
Investment securities (includes restricted stock)
Loans, net
Deposits and customer repurchase agreements
Shareholders’ equity
$951,889
123,775
739,841
785,495
82,639
$979,373
149,770
730,626
794,220
78,766
$ 2.24
2.24
1.07
19.10
18.25
0.96
8.15
$902,460
154,041
668,860
691,653
73,059
$ 2.40
2.41
1.03
20.18
24.95
1.24
10.40
$820,371
168,906
564,256
674,434
77,642
$ 2.10
2.11
0.99
19.01
27.30
1.44
13.00
$799,333
192,487
521,684
673,705
71,614
Safety and Soundness
Leverage ratio (Tier 1)
Risk-based capital ratio (Tier 1)
Tangible common equity ratio3
Nonperforming loans/gross loans
Nonperforming assets/total assets
Allowance for loan losses as a % of loans
Net charge-offs/average loans
Average equity to average asset ratio
Trust Assets
8.16%
11.73%
8.21%
3.68%
2.96%
1.18%
0.45%
8.36%
7.50%
10.89%
7.47%
2.47%
1.93%
1.21%
0.26%
7.98%
7.84%
11.02%
7.72%
0.59%
0.44%
1.09%
0.19%
9.18%
8.18%
12.28%
8.13%
1.01%
0.73%
1.29%
0.09%
8.98%
7.60%
10.59%
7.52%
0.57%
0.29%
1.30%
0.04%
8.96%
Trust assets under management (market value)
$490,420
$460,233
$497,215
$507,920
$538,152
1 Excludes core deposit intangibles, goodwill and intangible amortization
2 Noninterest expense / tax equivalent net interest income plus noninterest income less net securities gains
3 Total equity less AOCI, goodwill and intangibles / total assets less goodwill and intangibles
3
3
A Message to Our Shareholders
Dear Shareholder:
The economic recession as well as the crisis in the financial services industry that erupted in
2008 continued to have a global impact as we moved through 2010. In the United States,
unemployment remained above 9%, 157 banks failed (compared to 140 in 2009 and the most
since 1992), one million homes were repossessed, Dodd-Frank was passed, and the
Fed announced $600 billion in additional quantitative easing to prop up the economy.
Internationally, we saw a flight to gold bullion as well as a debt crisis in Europe that spilled
into Greece, Ireland, Portugal, and Spain. The credit ratings of these countries have been
downgraded to “junk”.
Franklin Financial reported earnings of $7,612,000 in 2010, representing a
15.6% increase from our 2009 earnings of $6,585,000. Diluted earnings
per share increased to $1.96 per share in 2010 from $1.71 per share in 2009.
The key factor driving our financial performance in 2010 was a 5% increase
in fully tax equivalized Net Interest Income from $30,277,000 in 2009 to
$31,902,000. Our Net Interest Margin increased from 3.44% in 2009 to 3.53%
in 2010 as we benefited from a repricing of deposit costs.
As a shareholder, you received regular cash dividends of $1.08 per share
matching the regular cash dividends per share paid in 2009.
Our current annual dividend payout represents a 5.92%
return based upon the closing price of Franklin Financial
stock at December 31, 2010. The market value of a
share of Franklin Financial stock increased from a
closing price of $16.33 at year-end 2009 to $18.25 at
December 31, 2010.
4
Bill Snell
President & CEO
In September we announced to our shareholders significant amendments to the
Franklin Financial Services Corporation Dividend Reinvestment and Stock Purchase Plan
(“the Plan”) including:
• authorizing the issuance of an additional 1,000,000 shares of common
stock on the terms and conditions of the Plan
• modifying the minimum and maximum amounts that may be invested
pursuant to the voluntary cash payment option under the Plan
• providing for the investment of voluntary cash payments on as
frequently as a weekly basis
• providing for the investment of voluntary cash payments
via ACH transfer
• modifying the formula for determining the purchase price with
respect to shares purchased under the Plan directly from
Franklin Financial rather than on the open market
The Plan provides shareholders with a convenient and economical way to purchase
additional shares of Franklin Financial common stock by reinvesting cash dividends paid on
their shares or through optional cash payments. We are delighted with the response received
from shareholders since the September 30th effective date of these amendments, both in
terms of shareholder participation and the increase in the level of voluntary cash contributions.
(continued)
Ed Bidelspach (left) and Bill Snell (right) of
F&M Trust, present a $2,000 donation to
Safe Harbour president Wendell Hollinger
(center). Safe Harbour is a community
organization dedicated to serving the needs
of the homeless in Cumberland County. In
addition, Bill’s personally written appeal letter
helped yield $40,000 in total campaign
donations. F&M Trust staff and customers
also collected more than 2,500 disposable
diapers to provide to the organization.
5
5 F&M Trust Management Team
Total Assets as dollars in millions
1000
900
800
0
2
8
9
9
7
9
7
9
2
5
9
2
0
9
600
500
400
750
700
650
600
550
500
450
400
350
2006
2007
2008
2009
2010
Net Loans as dollars in millions
Net Income as dollars in thousands
1
3
7
6
5
2
,
9
0
4
7
5
9
5
,
8
9
6
6
0
7
5
,
7
10000
9000
8000
4
7000
6
5
6000
5000
2
2
5
2
1
6
,
7
5
8
5
,
6
2006
4000
2007
2008
2006
2009
2007
2010
2008
2009
2010
Total Assets as dollars in millions
1000
9
7
9
2
5
9
2
0
9
0
2
8
9
9
7
2006
2007
2008
2009
2010
Total Assets as dollars in millions
Net Income as dollars in thousands
Diluted Net Income as dollars per share
9
7
9
2
5
9
2
0
9
0
2
8
9
9
7
6
5
2
,
9
5
9
5
,
8
0
7
5
,
7
2
1
6
,
7
5
8
5
,
6
2006
2007
2008
2009
2010
2006
2007
2008
2009
2010
2006
2007
2008
2009
2010
Net Loans as dollars in millions
Net Income as dollars in thousands
Regular Cash Dividends Paid as dollars per share
Diluted Net Income as dollars per share
10000
9000
8000
1
3
7
6
5
2
,
9
9
6
6
0
4
7
5
9
5
,
8
0
4
.
2
4
2
.
2
0
1
.
2
2.00
6
9
.
1
1
7
.
1
2.50
2.25
1.75
1.50
1.25
1000
900
800
700
600
500
400
750
700
650
600
10000
9000
8000
7000
6000
5000
4000
1.1
1.0
0.9
0.8
0.7
8
0
.
1
8
0
0
4
.
.
1
2
4
2
.
2
3
0
.
1
9
9
.
0
0
1
.
2
2.00
6
9
.
1
1
7
.
1
2.50
7
0
.
1
2.25
1.75
1.50
1.25
ROE/ROA as percentage values
16.0
14.5
13.42
13.0
15.41
13.19
Tangible
ROE
11.5
11.92
12.62
ROE
10.79
11.27
10.99
4
1
.
1
A
O
R
8
1
.
1
A
O
R
T
7
0
.
1
A
O
R
9
0
.
1
A
O
R
T
5
0
.
1
A
O
R
T
1
0
.
1
A
O
R
8.69
4
7
.
0
A
O
R
T
9
6
.
0
A
O
R
9.34
8
7
.
0
A
O
R
2
8
.
0
A
O
R
T
1.50
1.00
0.50
0.00
16.0
14.5
13.0
11.5
10.0
8.5
7.0
5.5
4.0
Total Deposits & Repos as dollars in millions
Regular Cash Dividends Paid as dollars per share
Diluted Net Income as dollars per share
800
750
700
650
600
550
500
450
400
4
7
6
1.1
1.0
4
7
6
0.9
0.8
2.50
5
8
7
7
0
.
1
2.25
4
9
7
3
0
.
1
8
0
.
1
8
0
.
1
0
4
.
2
9
9
.
0
2
9
6
0
1
.
2
2.00
1.75
1.50
4
2
.
2
11.13
11.13
1
7
.
1
6
9
.
1
10.0
8.5
0.7
2007
2006
2006
2008
2007
2009
1.25
2008
2010
2009
2006
2010
2007
2008
2009
2010
2006
2007
2008
2009
2010
2004
2005
2006
2007
2008
2
1
6
,
7
5
8
5
,
6
0
7
5
,
7
4
7000
6
5
2
2
5
6000
5000
550
500
450
400
350
4000
2007
2006
2006
2008
2007
2009
2008
2010
2009
2010
2006
2007
2008
2006
2009
2007
2010
2008
2009
2010
Left to right: Mike Kugler, Karen Carmack, Ron Cekovich, Mike Moore, Bill Snell, Mark Hollar, Trish Hanks, Tom Peterson, Ken Ditzler
700
Net Loans as dollars in millions
Total Deposits & Repos as dollars in millions
Regular Cash Dividends Paid as dollars per share
ROE/ROA as percentage values
11.13
11.13
16.0
14.5
13.42
13.0
15.41
13.19
Tangible
ROE
11.92
12.62
ROE
10.99
11.5
10.0
8.5
4
1
.
1
A
O
R
8
1
.
1
A
O
R
T
7
0
.
1
A
O
R
.
9
0
1
A
O
R
T
5
0
.
1
A
O
R
T
1
0
.
1
A
O
R
10.79
11.27
8.69
4
7
.
0
A
O
R
T
9
6
.
0
A
O
R
9.34
8
7
.
0
A
O
R
2
8
.
0
A
O
R
T
1.50
1.00
0.50
0.00
16.0
14.5
13.0
11.5
10.0
8.5
7.0
5.5
4.0
800
750
700
650
600
550
500
450
400
1
3
7
0
4
7
9
6
6
4
6
5
2
2
5
4
9
7
5
8
7
4
7
6
4
7
6
2
9
6
1.1
1.0
4
9
7
3
0
.
1
5
8
7
7
0
.
1
8
0
.
1
8
0
.
1
4
7
6
4
7
6
2
9
6
9
9
0
.
0.9
0.8
0.7
16.0
14.5
13.42
13.0
11.5
10.0
8.5
2006
2007
2008
2009
2010
2006
2007
2008
2006
2009
2007
2008
2010
2009
2010
2006
2007
2008
2009
2010
2004
2005
2006
2007
2008
Total Deposits & Repos as dollars in millions
ROE/ROA as percentage values
15.41
13.19
Tangible
ROE
11.13
11.13
11.92
12.62
ROE
10.99
10.79
11.27
4
1
.
1
A
O
R
8
1
.
1
A
O
R
T
7
0
.
1
A
O
R
9
0
.
1
A
O
R
T
5
0
.
1
A
O
R
T
1
0
.
1
A
O
R
8.69
4
7
.
0
A
O
R
T
9
6
.
0
A
O
R
9.34
8
7
.
0
A
O
R
2
8
.
0
A
O
R
T
1.50
1.00
0.50
0.00
16.0
14.5
13.0
11.5
10.0
8.5
7.0
5.5
4.0
2006
2007
2008
2009
2010
2006
2007
2008
2009
2010
2004
2005
2006
2007
2008
6
900
800
700
600
500
400
750
700
650
600
550
500
450
400
350
800
750
700
650
600
550
500
450
400
0.000.501.001.5040050060070080090010002010200920082007200635040045050055060065070075020102009200820072006Total Assetsas dollars in millionsNet Loansas dollars in millionsTotal Deposits & Reposas dollars in millionsNet Incomeas dollars in thousandsDiluted Net Income as dollars per shareRegular Cash Dividends Paidas dollars per shareROE/ROAas percentage values95240005000600070008000900010000201020092008200720067,6120.70.80.91.01.1201020092008200720061.08201020092008200720064.05.57.08.510.011.513.014.516.020082007200620052004ROA 0.78TROA 0.821.251.501.752.002.252.50201020092008200720061.967404004505005506006507007508002010200920082007200678510.011.513.014.516.08.5TangibleROEROE11.1311.1313.4215.4113.1910.7911.2711.9212.6210.998.699.347998209029795225646697316746746927947,5709,2568,5956,5850.991.031.071.08ROA 1.07TROA 1.09ROA 1.14TROA 1.18ROA 0.69TROA 0.74ROA 1.01TROA 1.052.102.402.241.710.000.501.001.5040050060070080090010002010200920082007200635040045050055060065070075020102009200820072006Total Assetsas dollars in millionsNet Loansas dollars in millionsTotal Deposits & Reposas dollars in millionsNet Incomeas dollars in thousandsDiluted Net Income as dollars per shareRegular Cash Dividends Paidas dollars per shareROE/ROAas percentage values95240005000600070008000900010000201020092008200720067,6120.70.80.91.01.1201020092008200720061.08201020092008200720064.05.57.08.510.011.513.014.516.020082007200620052004ROA 0.78TROA 0.821.251.501.752.002.252.50201020092008200720061.967404004505005506006507007508002010200920082007200678510.011.513.014.516.08.5TangibleROEROE11.1311.1313.4215.4113.1910.7911.2711.9212.6210.998.699.347998209029795225646697316746746927947,5709,2568,5956,5850.991.031.071.08ROA 1.07TROA 1.09ROA 1.14TROA 1.18ROA 0.69TROA 0.74ROA 1.01TROA 1.052.102.402.241.710.000.501.001.5040050060070080090010002010200920082007200635040045050055060065070075020102009200820072006Total Assetsas dollars in millionsNet Loansas dollars in millionsTotal Deposits & Reposas dollars in millionsNet Incomeas dollars in thousandsDiluted Net Income as dollars per shareRegular Cash Dividends Paidas dollars per shareROE/ROAas percentage values95240005000600070008000900010000201020092008200720067,6120.70.80.91.01.1201020092008200720061.08201020092008200720064.05.57.08.510.011.513.014.516.020082007200620052004ROA 0.78TROA 0.821.251.501.752.002.252.50201020092008200720061.967404004505005506006507007508002010200920082007200678510.011.513.014.516.08.5TangibleROEROE11.1311.1313.4215.4113.1910.7911.2711.9212.6210.998.699.347998209029795225646697316746746927947,5709,2568,5956,5850.991.031.071.08ROA 1.07TROA 1.09ROA 1.14TROA 1.18ROA 0.69TROA 0.74ROA 1.01TROA 1.052.102.402.241.716
1000
900
800
700
600
500
400
750
700
650
600
550
500
450
400
350
1000
900
800
700
600
500
400
750
700
650
600
550
500
450
400
350
Total Assets as dollars in millions
9
7
9
2
5
9
2
0
9
0
2
8
9
9
7
2006
2007
2008
2009
2010
Total Assets as dollars in millions
Net Income as dollars in thousands
Diluted Net Income as dollars per share
9
7
9
2
5
9
2
0
9
0
2
8
9
9
7
2006
2007
2008
2009
2010
10000
9000
8000
7000
6000
5000
4000
6
5
2
,
9
5
9
5
,
8
0
7
5
,
7
2
1
6
,
7
5
8
5
,
6
2006
2007
2008
2009
2010
2006
2007
2008
2009
2010
0
4
.
2
4
2
.
2
0
1
.
2
2.00
6
9
.
1
1
7
.
1
2.50
2.25
1.75
1.50
1.25
Net Loans as dollars in millions
Net Income as dollars in thousands
Regular Cash Dividends Paid as dollars per share
Diluted Net Income as dollars per share
10000
9000
9
6
6
8000
1
3
7
0
4
7
6
5
2
,
9
5
9
5
,
8
0
7
5
,
7
4
6
5
7000
2
2
5
6000
5000
4000
2006
2007
2008
2006
2009
2007
2010
2008
1.1
1.0
0.9
0.8
0.7
2.50
8
0
.
1
2.25
7
0
.
1
8
0
.
1
0
4
.
2
4
2
.
2
0
1
.
2
2.00
3
0
.
1
9
9
.
0
1.75
1.50
1.25
2009
2006
2007
2008
6
9
.
1
1
7
.
1
2006
2010
2007
2008
2009
2010
2
1
6
,
7
5
8
5
,
6
2009
2010
Net Loans as dollars in millions
Net Income as dollars in thousands
Total Deposits & Repos as dollars in millions
Regular Cash Dividends Paid as dollars per share
Diluted Net Income as dollars per share
ROE/ROA as percentage values
Total Assets as dollars in millions
1000
9
7
9
2
5
9
2
0
9
0
2
8
9
9
7
2006
2007
2008
2009
2010
Net Loans as dollars in millions
1
3
7
0
4
7
9
6
6
4
6
5
2
2
5
4
9
7
5
8
7
4
7
6
4
7
6
2
9
6
900
800
700
600
500
400
750
700
650
600
550
500
450
400
350
800
750
700
650
600
550
500
450
400
0
4
7
1
3
7
6
5
2
,
9
5
9
5
,
8
10000
9000
8000
9
6
6
0
7
5
,
7
7000
4
6
5
2
1
6
,
7
5
8
5
,
6
2
2
5
6000
5000
4000
2006
2007
2006
2008
2007
2009
2008
2010
2009
2010
800
750
700
650
600
550
500
450
400
1.1
1.0
2.50
8
0
.
1
2.25
4
9
7
5
8
7
7
0
.
1
3
0
1
.
8
0
.
1
0
4
.
2
4
7
6
4
7
6
2
9
6
9
9
0
.
0
1
.
2
2.00
0.9
0.8
0.7
2008
2006
2009
2007
2010
2008
2006
2007
1.75
1.50
1.25
2009
2006
2010
2007
4
2
.
2
11.13
11.13
16.0
14.5
13.42
13.0
15.41
13.19
Tangible
ROE
11.5
6
9
.
1
10.0
8.5
1
7
.
1
11.92
12.62
ROE
10.99
.
4
1
1
A
O
R
8
1
.
1
A
O
R
T
.
7
0
1
A
O
R
9
0
.
1
A
O
R
T
.
5
0
1
A
O
R
T
.
1
0
1
A
O
R
10.79
11.27
8.69
4
7
.
0
A
O
R
T
.
9
6
0
A
O
R
9.34
8
7
.
0
A
O
R
2
8
.
0
A
O
R
T
2008
2009
2010
2006
2007
2008
2009
2010
1.50
1.00
0.50
0.00
16.0
14.5
13.0
11.5
10.0
8.5
7.0
5.5
4.0
2004
2005
2006
2007
2008
16.0
14.5
13.0
11.5
10.0
8.5
7.0
5.5
4.0
77
Total Deposits & Repos as dollars in millions
1.1
Regular Cash Dividends Paid as dollars per share
800
5
8
7
7
0
.
1
8
0
.
1
8
0
.
1
4
9
7
3
0
.
1
9
9
.
0
2
9
6
11.13
11.13
750
700
650
600
550
500
450
400
4
7
6
4
7
6
1.0
0.9
0.8
0.7
15.41
13.19
Tangible
ROE
16.0
14.5
13.42
13.0
11.5
10.0
8.5
11.13
11.13
11.92
12.62
ROE
10.99
10.79
11.27
4
1
.
1
A
O
R
8
1
.
1
A
O
R
T
7
0
.
1
A
O
R
9
0
.
1
A
O
R
T
5
0
.
1
A
O
R
T
1
0
.
1
A
O
R
8.69
4
7
.
0
A
O
R
T
9
6
.
0
A
O
R
9.34
8
7
.
0
A
O
R
2
8
.
0
A
O
R
T
1.50
1.00
0.50
0.00
ROE/ROA as percentage values
16.0
14.5
13.42
13.0
15.41
13.19
Tangible
ROE
11.92
12.62
ROE
10.99
11.5
10.0
8.5
4
1
.
1
A
O
R
.
8
1
1
A
O
R
T
7
0
.
1
A
O
R
9
0
.
1
A
O
R
T
5
0
.
1
A
O
R
T
1
0
.
1
A
O
R
10.79
11.27
8.69
4
7
.
0
A
O
R
T
9
6
.
0
A
O
R
9.34
8
7
.
0
A
O
R
2
8
.
0
A
O
R
T
1.50
1.00
0.50
0.00
16.0
14.5
13.0
11.5
10.0
8.5
7.0
5.5
4.0
2006
2007
2008
2009
2010
2006
2007
2006
2008
2007
2009
2008
2010
2009
2010
2006
2007
2008
2009
2010
2004
2005
2006
2007
2008
Total Deposits & Repos as dollars in millions
ROE/ROA as percentage values
2006
2007
2008
2009
2010
2006
2007
2008
2009
2010
2004
2005
2006
2007
2008
0.000.501.001.5040050060070080090010002010200920082007200635040045050055060065070075020102009200820072006Total Assetsas dollars in millionsNet Loansas dollars in millionsTotal Deposits & Reposas dollars in millionsNet Incomeas dollars in thousandsDiluted Net Income as dollars per shareRegular Cash Dividends Paidas dollars per shareROE/ROAas percentage values95240005000600070008000900010000201020092008200720067,6120.70.80.91.01.1201020092008200720061.08201020092008200720064.05.57.08.510.011.513.014.516.020082007200620052004ROA 0.78TROA 0.821.251.501.752.002.252.50201020092008200720061.967404004505005506006507007508002010200920082007200678510.011.513.014.516.08.5TangibleROEROE11.1311.1313.4215.4113.1910.7911.2711.9212.6210.998.699.347998209029795225646697316746746927947,5709,2568,5956,5850.991.031.071.08ROA 1.07TROA 1.09ROA 1.14TROA 1.18ROA 0.69TROA 0.74ROA 1.01TROA 1.052.102.402.241.710.000.501.001.5040050060070080090010002010200920082007200635040045050055060065070075020102009200820072006Total Assetsas dollars in millionsNet Loansas dollars in millionsTotal Deposits & Reposas dollars in millionsNet Incomeas dollars in thousandsDiluted Net Income as dollars per shareRegular Cash Dividends Paidas dollars per shareROE/ROAas percentage values95240005000600070008000900010000201020092008200720067,6120.70.80.91.01.1201020092008200720061.08201020092008200720064.05.57.08.510.011.513.014.516.020082007200620052004ROA 0.78TROA 0.821.251.501.752.002.252.50201020092008200720061.967404004505005506006507007508002010200920082007200678510.011.513.014.516.08.5TangibleROEROE11.1311.1313.4215.4113.1910.7911.2711.9212.6210.998.699.347998209029795225646697316746746927947,5709,2568,5956,5850.991.031.071.08ROA 1.07TROA 1.09ROA 1.14TROA 1.18ROA 0.69TROA 0.74ROA 1.01TROA 1.052.102.402.241.710.000.501.001.5040050060070080090010002010200920082007200635040045050055060065070075020102009200820072006Total Assetsas dollars in millionsNet Loansas dollars in millionsTotal Deposits & Reposas dollars in millionsNet Incomeas dollars in thousandsDiluted Net Income as dollars per shareRegular Cash Dividends Paidas dollars per shareROE/ROAas percentage values95240005000600070008000900010000201020092008200720067,6120.70.80.91.01.1201020092008200720061.08201020092008200720064.05.57.08.510.011.513.014.516.020082007200620052004ROA 0.78TROA 0.821.251.501.752.002.252.50201020092008200720061.967404004505005506006507007508002010200920082007200678510.011.513.014.516.08.5TangibleROEROE11.1311.1313.4215.4113.1910.7911.2711.9212.6210.998.699.347998209029795225646697316746746927947,5709,2568,5956,5850.991.031.071.08ROA 1.07TROA 1.09ROA 1.14TROA 1.18ROA 0.69TROA 0.74ROA 1.01TROA 1.052.102.402.241.7177
Chambersburg Community Housing Projects
Carlisle North East Street Revitalization Project
Franklin & Cumberland Counties
Chambersburg Senior Housing Project
Carlisle North East Street Revitalization Project
Carlisle North East Street Revitalization Project
Chambersburg Community Housing Projects
The National Association of Housing and Redevelop-
F&M Trust has participated in two residential
ment Officials (NAHRO) presented a 2010 National
revitalization initiatives near Southgate Shopping
Award of Merit in Program Innovation—Affordable
Center: The Chambersburg Senior Housing Project
Housing to F&M Trust for the bank’s participation in
(Washington Square, above left) consists of
the Carlisle North East Street Revitalization Project.
32 residential apartment units built at the former
The initiative included the acquisition of the property,
Sherwin-Williams site. F&M Trust sponsored $275,000
demolition of deteriorated structures, and new
in funding for the nonprofit group Interfaith Housing
construction of five homes—including one that is fully
Alliance of Frederick, MD. F&M Trust also sponsored
accessible for owners with disabilities. Funding came
$650,000 in funding for the Chambersburg Family
through the Federal Home Loan Bank’s Affordable
Townhomes Project (Redwood Park, not pictured)—
Housing Program. F&M Trust earned a similar award
a 40-unit affordable townhouse development on 11
in 2008 for The Livery Project in Carlisle.
acres on nearby Buchanan Street.
8
8 Franklin Financial’s total assets at December 31, 2010 were $951,889,000 as compared to
$979,373,000 one year earlier.
Net loans grew by 1.3% on a year-over-year basis while average loan outstandings increased
by $43,455,000 or 6.1%. Commercial loan demand remained relatively strong resulting in
$180,000,000 of closed transactions which increased the average loan outstandings in this
portfolio by $64,473,000 or 12.6%. Average consumer loan outstandings decreased 11.1%
to $111,161,000 as consumers continued to focus on reducing debt and increasing savings.
Residential mortgage closings declined from $49,500,000 in 2009 to $33,500,000 in 2010.
Average residential mortgage outstandings declined by $7,088,000 or 9.7% as we continue
to hold fewer mortgage originations in our portfolio.
Total deposits and repurchase agreements as measured at year-end decreased by 1.1%
to $785,495,000 while average deposits and repurchase agreements increased 4.4% to
$787,230,000. Average core deposits (i.e. checking, savings, and interest bearing checking)
increased by $8,608,000 or 3.8%. Average balances in our Money Management Account
increased by $56,358,000 or 26.1% as the competitive yield and liquidity offered by this
product continued to be attractive to customers.
Our financial condition remains strong as evidenced by a Total Risk-Based Capital Ratio of
11.73% and a Leverage Capital Ratio of 8.16%. These ratios remain above the levels that
federal regulators require for an institution to be considered “well capitalized”.
(continued)
Vacon, Inc., a global technology
company, selected the Chambers-5
Business Park in Chambersburg as
the best place to build its LEED®
Gold Certified facility to improve
service to customers in North
America. Working with F&M Trust,
Chambersburg Area Development
Corporation, Franklin County Area
Development Corporation, and
Governor Rendell’s Action Team,
Vacon was able to create the ideal,
scalable facility it needed to ensure
reliable growth.
9
9 Our Tangible Capital Ratio, which measures Total Equity net of Accumulated Other Comprehensive
Income, Goodwill, and Intangible Assets as a percentage of Total Assets excluding Goodwill and
Intangible Assets stands at 8.21% at year-end, up from 7.47% at December 31, 2009. This ratio
has increasingly been the focus of both regulators and investors seeking to measure true
capital adequacy.
As a result of continued loan growth in our commercial portfolio as well as an increase in net
charge-offs and Non Performing Assets, our Provision for Loan Losses was $3,235,000 in 2010.
Our Allowance for Loan Losses as a percentage of Total Loans was 1.18% at December 31, 2010,
down slightly from 1.21% at year-end 2009.
The market value of assets under management by our Investment and Trust Services Department
increased by 6.6% to $490,420,000, reflecting improved market valuations as well as business
development efforts. Assets under management as reported does not include approximately
$113,700,000 in assets held at third party brokers at December 31, 2010 compared to $97,700,000
at year-end 2009. Investment and Trust Services fee income, including revenue generated through
the Personal Investment Centers, increased 9.2% from $3,519,000 in 2009 to $3,844,000 in 2010.
We made two additions to our staff during the year to significantly increase our Cumberland County
presence … John McGowan, who is based at our Camp Hill Office, and Dave Gority, who is based
at our Ritner Highway Office in Carlisle. I am delighted with the impact that both John and Dave have
had on our business development results.
(continued)
Shade Gap Area Fire Co. realized its first major expansion in
30 years thanks to $200,000 in construction financing from
F&M Trust. Now the volunteer organization can better serve
the residents of Shade Gap Borough, Dublin Township, and
Tell Township in southern Huntingdon County.
Over the past 20 years, the Mont Alto Fire Co. worked
to secure 15 acres of land with the idea of building
an entertainment complex that was closer to the Mont
Alto community. Thanks to the hard work of Richard
K. Sleicher, skilled volunteers, community donations,
and a financial commitment from F&M Trust, the fire
company established the Richard K. Sleicher Event
Complex, complete with several new buildings ready
to serve the community for decades to come.
10
10 Big Spring Event and Activity Center
Cumberland County
Left to right:
Laura Witter
Co-Owner
Big Spring Event
and Activity Center
Lindsay Reisinger
Small Business
Relationship Manager
F&M Trust
When the Newville Community Center became available to purchase recently,
Donald (not pictured) and Laura Witter knew it was an opportunity to do something
good for the community. The Center was a positive influence on their lives when
growing up, so they wanted to preserve and share that quality with others today.
The Witters, who also own CRF Mechanical and Cedar Ridge Farm, turned to the
Cumberland County Redevelopment Authority as well as Lindsay Reisinger and
F&M Trust to help design a $110,000 total financial package, including $40,000 from
F&M Trust, that would help them purchase the property and make nearly $25,000 in
renovations. The team effort worked as planned. The Big Spring Event and Activity
Center is now open for business and serving the needs of the Big Spring community.
Martial arts and Zumba classes are already taking advantage of the facility’s
resources. The Witters are considering other events of interest to the community—
craft shows, a weekend farmer’s market, and more.
11
11 ServiceMaster
Franklin & Cumberland Counties
Left to right:
Kevin Mellott
Owner
ServiceMaster
Lillian Mellott
Owner
ServiceMaster
Phil Pantano
Commercial Services
Relationship Manager
F&M Trust
When businesses and homeowners throughout Southcentral PA need a full
service team to help them recover from any size disaster quickly, they turn to
the restoration pros at ServiceMaster. Owners Kevin and Lillian Mellott
operate two franchises—in Chambersburg and near Harrisburg—and are
celebrating 25 years in the restoration and office-cleaning business. With 65
employees and 27 vehicles, the Mellotts have a real commitment to delivering
reliable, responsive service. Maybe that’s why they like Phil Pantano and
F&M Trust. After choosing F&M Trust for the easy “backyard” convenience,
they’ve stayed with F&M Trust for what really matters—service, value, and a
strong commitment to small business owners. The Mellotts note, “Really, we
have no reason to look elsewhere.”
12
12 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 $60,800. The agency’s revenues and profitability
decreased by .6% and 15.5% respectively. Mortgage originations by F&M Trust and insured
by Bankers Settlement Services accounted for approximately 10% of the agency’s total net
premium revenue in 2010. The lending officers of F&M Trust achieved an overall penetration
rate of 48% in residential mortgages closed.
During 2010, our operational efficiency was again enhanced with new technology. We
implemented the final phase of our Check Imaging processing system by receiving returned
checks electronically from the Federal Reserve. Virtually all checks are now processed
electronically by our bank. Additionally, we began scanning all new commercial and consumer
loans into a state-of-the-art document management system. Instead of requesting a paper file,
employees can now review the loan file online. This system has also significantly reduced the
amount of required storage space.
We also completed an extensive evaluation in order to select a new core processing system.
Over 30 employees from all functional areas participated in the selection process which
involved demonstrations, site visits, reference calls as well as a detailed financial analysis.
We will be switching to the new platform in early July of this year. Along with increased
efficiency and usability, additional services such as online account statements and online
account openings will be offered.
(continued)
The Army Heritage Center
Foundation in Carlisle
wanted to showcase
the rich history and
stories of bravery of the
men and women of our
armed forces. F&M Trust
answered the call with a
financing solution that
helped add several
new buildings to the
Center’s campus.
13
13 An “onboarding” program was introduced incorporating a series of structured contacts
directed at new customers which, historically, are among the most vulnerable of a bank’s
customer base. Onboarding is executed to first ensure that the customer is satisfied and
using our services via personal follow-up contact. Additionally, we send custom letters
introducing other F&M Trust services that might be of value. As a result of the rollout of this
program, new customer retention has increased, service perception has improved, and
cross-sell ratios among new customers have also risen.
In order to evolve and continually connect with customers, F&M Trust established a
social media presence in 2010. We now have new channels of communication with
customers through the free online social media applications Facebook and Twitter.
These social media sites provide F&M Trust with an additional opportunity to communicate
by sharing photos, community philosophy, and other information with customers while
receiving important feedback.
We made an additional investment in upgrading our community office network during 2010.
In May, we opened new drive-up ATM units at Ayr Town Center in McConnellsburg and in
the Riverview Business Center in Mount Union.
Before
In September, we opened our 25th community banking office at 3907 Market
Street in Camp Hill. This facility formerly housed Community Financial, Inc. and its
subsidiary, Community Trust Company, which we acquired in November 2008.
The existing building was extensively renovated to add 1,450 square feet
After
for traditional retail banking, small business, commercial, and mortgage
services. The new facility includes a bank lobby, customer service offices,
conference room, as well as a drive-up teller, and drive through ATM
service. In addition, improvements were made to the Investment & Trust
Services offices and support areas.
(continued)
F&M Trust doubled its financial
pledge to Fulton County Medical
Center from the initial $25,000
five-year commitment to a $50,000
ten-year commitment. This enhanced
contribution supports the center’s
recent campaign to finance the
new 16,000 sq. ft. expansion to
the existing facility.
Camp Hill Office
14
14 Fulton Valley Ag Services
Fulton County
Since Harry and Dee Dee Johnston started their spray chemical and
fertilizer business several years ago, they focused on steering it in a smart
business direction. As owners, they understand the value of great customer
service and access to the best possible loan rates, so two years ago they
connected with F&M Trust. Thanks to financial solutions from Paul Johnston
and Don Trego at F&M Trust, the Johnstons have been able to serve more
agricultural clients throughout Fulton, Franklin and Huntingdon Counties —
helping those clients grow reliably, which in turn helps their business grow
stronger, too.
Left to right:
Harry Johnston
Owner
Fulton Valley
Ag Services, LLC
Dee Dee Johnston
Owner
Fulton Valley
Ag Services, LLC
Paul Johnston
Fulton County Market
Manager
F&M Trust
Don Trego
Small Business
Relationship Manager
F&M Trust
15
15 The Beistle Company
Cumberland County
After starting the business in 1900, The Beistle Company of Shippensburg
has grown to become the world’s largest manufacturer of party goods and
decorations. Unlike import-based resellers, everything is designed and
produced locally by The Beistle Company’s team of 250 dedicated employees.
In fact, they’ve recently expanded with a complete large-format digital printing
department where customers can order unique life-size cutouts. While their
success is worldwide, Beistle executives prefer the local touch when it comes to
managing employee benefits and business finances. That’s why they choose to
rely on the experience of F&M Trust’s Investment & Trust Services Department.
Left to right:
Tom Peterson
VP–Investment & Trust
Services Market Manager
F&M Trust
Chris Keegan
VP–Finance, Secretary, Treasurer
The Beistle Company
Mark Bernier
Investment Portfolio Manager
F&M Trust
Ron Froeschle
VP–Employee Benefits Officer
F&M Trust
Ron Showaker
Asst. Secretary, Asst. Treasurer
16
16 The office, lobby and conference room walls are adorned with prints and original art depicting
local landscapes and scenery from local artists. The Greater Harrisburg Arts Council assisted
in the selection and procurement of the artwork. We are delighted that average deposits at our
Camp Hill Office exceeded $23,800,000 within six months of our grand opening.
Our ATM network will expand again in 2011. In January, we opened an ATM on the campus
of Quincy Village and a drive-up ATM unit, estimated to be operational in the early third
quarter, will be opened on West King Street in Shippensburg at the site of a former Hardee’s
restaurant. Additionally, we anticipate beginning construction prior to year-end on new
community offices in Newville and Mechanicsburg.
Before concluding, I would like to take this opportunity to recognize and thank Jerry Miller, who
retired from the Franklin Financial and F&M Trust Boards of Directors at the end of 2010, for
his 27 years of dedicated service. Jerry was elected to the Boards of Franklin Financial and
F&M Trust in 1983. During his tenure, Jerry served on a variety of Board
committees, most recently the Audit, Executive, Personnel, and Trust
Committees, having served as Chair of the Audit Committee since 1997.
His insight, wisdom, and support will be missed.
Our perspective is that 2011 will be another challenging year for financial
institutions with high unemployment, increased loan delinquencies and
defaults, and low interest rates. Although some “green sprouts” have been
spotted, particularly recent hiring trends, we have a long road back to the
levels of unemployment reported six or seven years ago. Businesses
continue to struggle due to weak consumer spending and many experts are
predicting that some foreclosures will increase 20% to 1.2 million in 2011.
Your interest and support as Franklin Financial shareholders is sincerely appreciated.
Jeryl C. Miller
Board of Directors
1983-2010
Sincerely,
William E. Snell, Jr.
President & CEO
17
17
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
President – Cardinal
Crossing, Inc.
Former Franklin County
Commissioner
Daniel J. Fisher
President and Chief
Executive Officer –
D.L. Martin Company
Donald A. Fry
President –
Cumberland Valley Rental
and Towne Cleaners –
ANDOCO, Inc.
Allan E. Jennings, Jr.
President and COO –
Jennings Chevrolet,
Buick, GMC, Inc.
Stanley J. Kerlin, Esq.
Attorney –
Law Offices of
Stanley J. Kerlin
Donald H. Mowery
President -
R. S. Mowery & Sons, 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
Martha B. Walker, Esq.
Partner –
Walker, Connor &
Spang, LLC
FFSC Officers
Charles M. Sioberg
Chairman of the Board
Mark R. Hollar
Joyce A. Riley
Treasurer and Chief Financial Officer
Assistant Corporate Secretary
William E. Snell, Jr.
Catherine C. Angle
President and Chief Executive Officer
Corporate Secretary
18
18 Management
William E. Snell, Jr.
President and Chief Executive Officer
Mark R. Hollar
Senior Vice President
Chief Financial Officer
and Treasurer
Karen K. Carmack, SPHR
Senior Vice President
Human Resources Manager,
Affirmative Action and HIPAA
Privacy Officer
Ronald L. Cekovich
Senior Vice President
Technology Services Manager
Kenneth C. Ditzler
Senior Vice President
Marketing and Corporate
Communications Manager
Relationship
Management Division
Commercial Services
Dianne L. Cornman, CTP
Vice President
Cash Management Specialist
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
Michael E. Kugler
Mary S. Cordell
Senior Vice President
Commercial Services Market Manager
Commercial Services Relationship
Manager
Patricia A. Hanks
Vice President
Retail Services Market Manager
Michael A. Moore
Vice President
Risk Management Officer
Thomas L. Peterson, RFC,
ChFC, CFP® LUTCF
Vice President
Investment & Trust Services
Market Manager
Jeramy D. Culler
Credit Analyst
Eric J. Fleming
Small Business Credit Analyst
Maria S. Seabra
Credit Analyst
Jennifer D. Kaiser
Commercial Services Support
Specialist
Retail Services
L. Kay Estep
Assistant Vice President
GO Club Coordinator
Officers
CHAMBERSBURG
MARKET OFFICES
Lincoln Way East Office
Kim S. McKenrick
Assistant Vice President and Manager
Lisa A. Hogue
Assistant Financial Services Officer
and Assistant Manager
Memorial Square Office
Summer Franzoni
Assistant Vice President and Manager
Dana L. Kaiser
Financial Services Officer
and Assistant Manager
Pamela J. Kolsun
Assistant Financial Services Officer
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
Barbara A. Seylar
Financial Services Officer and Manager
Philadelphia Avenue Office
Phyllis J. Amsley-Drawbaugh
Assistant Vice President, 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
19
19 Officers (continued)
SOUTHERN FRANKLIN
COUNTY MARKET OFFICES
Camp Hill Office
Katrina E. Buck
Renee L. Preso
Assistant Vice President
Southern Franklin County
Market Manager
Lynn A. Waite
Small Business Relationship Manager
Greencastle and Marion Offices
Teresa Gracie
Financial Services Officer and Manager
Tracy D. Burger
Assistant Financial Services Officer
and Assistant Manager
Marion Office
Vicky L. Carson
Assistant Financial Services Officer
and Assistant Manager
Mont Alto Office
Linda K. Stottlemyer
Assistant Financial Services Officer
and Assistant Manager
Waynesboro Office
Natasha J. Koons
Financial Services Officer
and Manager
Financial Services Officer and Manager
Carlisle Crossing Office
David R. Winters
Assistant Vice President and 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
Donald L. Trego
Assistant Vice President
Small Business Relationship Manager
Chastity L. Wantz
Assistant Financial Services Officer
and Assistant Manager
Hustontown Office
Denise M. Doyle
Financial Services Officer and Manager
CUMBERLAND COUNTY
MARKET OFFICES
Anthony L. Damore
Assistant Vice President
Cumberland County Market Manager
Lindsay J. Reisinger
Small Business Relationship Manager
Boiling Springs Office
Kevin M. Stoner
Financial Services Officer
and Manager
McConnellsburg Office
Mary E. Wright
Financial Services Officer
and Manager
Orbisonia Office
Shawna C. Dunmire
Financial Services Officer
and Manager
Penns Village Office
Brenda J. Gordon
Financial Services Officer
and Manager
20
Warfordsburg Office
Geraldine A. Fischer
Financial Services Officer
and Manager
Consumer Lending
Services
Susan E. Michael
Vice President
Investment &
Trust Services
Carole L. Crist
Vice President
Investment & Trust Services
Relationship Manager
Ronald R. Froeschle, QPA, QKA
Vice President
Employee Benefits Officer
David C. Gority
Vice President
Investment & Trust Services
Relationship Manager
John C. McGowan
Vice President
Investment & Trust Services
Relationship Manager
Charles R. Porter
Vice President
Business Development
James P. Probst
Vice President
Investment & Trust Services
Relationship Manager
Susan A. Russell
Vice President
Investment & Trust Services
Relationship Manager
Paul M. Johnston
Warren M. Hurt
Assistant Vice President
Fulton County Market Manager
Vice President
Senior Investment Portfolio Manager
20
Diana L. Sponseller
Vice President
Investment & Trust Services
Relationship Manager
Dennis L. Wilson, CTFA
Vice President
Investment & Trust Services
Relationship Manager
Mark P. Bernier, CFA
Investment Portfolio Manager
Heather C. Hershey
Estate Administration Officer
Robin L. Murray
Trust Operations Manager
Avis M. Graham, CFP®, RFC, CASL
Assistant Investment and
Trust Services Officer
Personal Investment Counselor
Roderick C. Salter, FSS
Assistant Investment and
Trust Services Officer
Personal Investment Counselor
Marketing
Samantha J. Burke
Marketing Officer
Melissa D. Miller
Marketing Officer
Facilities
Barry L. Shetter
Assistant Vice President
Facilities Manager
Officers (continued)
Credit Administration
William A. Pryor
Vice President
Credit Recovery Manager
Steven R. Gormont
Credit Recovery Officer
Technology Services
Division
Barry R. Walter
Vice President
Finance & Control
Kim A. Diehl
Financial Analyst
Amy B. Herrold
Controller
Corporate
Catherine C. Angle
Corporate Secretary
Joyce A. Riley
Assistant Corporate Secretary
Patricia R. Ganoe
Assistant Vice President
Deposit Operations Manager
Pamela A. Johns
Assistant Vice President
Loan Servicing Manager
Matthew C. Clark
Assistant Vice President
Assistant Technology
Services Officer
Stacey A. Stenger
Data Operations Manager
Risk Management
Division
Olaf R. Hasse
Vice President
Loan Portfolio Risk Management Officer
Mary L. Asbury
Assistant Vice President
Documentation Review Officer
Eric M. Follin
Assistant Documentation
Review Officer
Janet E. Stamper
Assistant Documentation
Review Officer
Compliance
Lorie M. Heckman, CRCM
Vice President
Bank Secrecy Act, Compliance
and Security Officer
Mary F. Cramer
Bank Secrecy Act and OFAC Analyst
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
21
21
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
STAR®/Cirrus® ATM Locations
Chambersburg Area
Downtown Drive-Up
150 Lincoln Way East,
Chambersburg
Fayetteville
4025 Lincoln Way East,
Fayetteville
Lincoln Way East
1712 Lincoln Way East,
Chambersburg
Menno Village
2075 Scotland Avenue,
Chambersburg
West Side
1100 Lincoln Way West,
Chambersburg
Fayetteville
4025 Lincoln Way East,
Fayetteville
Norland Avenue
870 Norland Avenue,
Chambersburg
Northgate Commons
1500 Northfield Drive,
Chambersburg
Orchard Park
841 Wayne Avenue,
Chambersburg
Penn Hall
1425 Philadelphia Avenue,
Chambersburg
Waynesboro Market Place
11123 Buchanan Trail East,
Waynesboro
Philadelphia Avenue
2405 Philadelphia Avenue,
Chambersburg
St. Thomas
6962 Lincoln Way West,
St. Thomas
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
Quincy Village
6596 Orphanage Road,
Quincy
Waynesboro
200 East Main Street,
Waynesboro
Zullinger
4884 Buchanan Trail East,
Zullinger
Cumberland County
Boiling Springs
3 East First Street,
Boiling Springs
Camp Hill
3907 Market Street,
Camp Hill
Carlisle Crossing
214A Westminster Drive,
Carlisle
Carlisle Plaza Drive-Up
700 East High Street,
Carlisle
Hanover Street
14 North Hanover Street,
Carlisle
Newville
9 West Big Spring Avenue,
Newville
Ritner Highway
1901 Ritner Highway,
Carlisle
Shippensburg
13 Shippensburg
Shopping Center
717-530-2100
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
Shippensburg
13 Shippensburg
Shopping Center
Fulton and Huntingdon
Counties
Ayr Town Center
368 South 2nd Street,
McConnellsburg
Hustontown
7781 Waterfall Road,
Hustontown
McConnellsburg
100 Lincoln Way East,
McConnellsburg
Orbisonia
18810 Sandy Ridge Station,
Orbisonia
Penns Village
182 Buchanan Trail,
McConnellsburg
Riverview Business Center
11734 Lenape Drive,
Mount Union
Warfordsburg
560 Great Cove Road,
Warfordsburg
22
22
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
The Annual Shareholders’ Meeting will be held
Tuesday, April 26, 2011 at the Orchards Restaurant
in Chambersburg. The Business Meeting will begin
at 10:30 a.m. and will be followed by a luncheon.
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
Services Corporation is Fulton Financial Advisors, N.A.,
One Penn Square, PO Box 4887, Lancaster, PA
17602, telephone 717-291-2546.
If interested in attending, please complete and return
Web site:
the reservation form reply card by April 11th.
www.franklinfin.com
23
23 Market & Dividends
The Corporation’s common stock is not actively traded in
There were 2,095 shareholders of record as of December
the over-the-counter market. The Corporation’s stock is
31, 2010. The range of high and low bid prices, as reported
listed under the symbol “FRAF” on the O.T.C. Electronic
by local sources is shown below for the years 2010 and
Bulletin Board, an automated quotation service. Current
2009. Also shown are the regular quarterly cash dividends
price information is available from account executives at
paid for the same years.
most brokerage firms as well as the registered market
makers of Franklin Financial Services Corporation common
stock as listed above under Shareholders’ Information.
2010 Per Share
2009 Per Share
High
Low
Dividends
Paid
High
Low
Dividends
Paid
First quarter
$17.00
$15.19
$0.27
First quarter
$19.00
$14.00
$0.27
Second quarter
Third quarter
Fourth quarter
18.75
17.50
18.40
16.75
16.50
16.50
0.27
0.27
0.27
$1.08
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
Total Return Performance
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, 2010, in each
case assuming an initial investment of $100 on
December 31, 2005 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, 2010
12/31/05
12/31/06
12/31/07
12/31/08
12/31/09
12/31/10
Franklin Financial Services
NASDAQ Composite
SNL Northeast OTC-BB & Pink Banks
Index
12/31/05
12/31/06
12/31/07
12/31/08
12/31/09
12/31/10
Franklin Financial Services Corporation
100.00
NASDAQ Composite
SNL Northeast OTC-BB & Pink Banks
100.00
100.00
112.32
110.39
103.34
106.75
122.15
100.64
81.84
73.32
81.97
78.04
106.57
77.02
92.90
125.91
83.86
Period Ended
24
24
Franklin Financial
Services Corporation
P.O. Box 6010
Chambersburg, PA 17201
888.264.6116
www.franklinfin.com