FRAF

Shares of Franklin Financial Services Corporation FRAF have edged down 1.3% since reporting second-quarter 2026 results compared with a 0.2% decline for the S&P 500 index. Over the past month, the stock has fallen 2.7%, underperforming the broader market’s slip of 1.1%. Franklin Financial reported second-quarter 2026 net income of $6.6 million, or $1.47 per diluted share, up 11.9% from $5.9 million, or $1.32 per diluted share, in the year-ago quarter. The improvement reflected stronger net interest income despite a higher provision for credit losses. Net interest income increased 12.2% year over year to $19.3 million, while total non-interest income was essentially unchanged at $5.1 million. Non-interest expenses rose 1.5% to $14.6 million. For the first six months of 2026, net income increased 34.8% to $13.2 million, or $2.94 per diluted share, from $9.8 million, or $2.20 per diluted share, a year earlier. Franklin Financial Services Corp. price-consensus-eps-surprise-chart | Franklin Financial Services Corp. Quote The balance sheet continued to expand in the first half of 2026. Total assets increased 4.3% from the end of 2025 to $2.34 billion, while net loans grew 3.1% to $1.59 billion and deposits rose 4.8% to $1.92 billion. Loan growth was led by commercial real estate and residential mortgage lending, partially offset by lower commercial and industrial loans. Wealth management also remained a steady contributor, with quarterly fees rising 6.1% year over year to $2.6 million and assets under management reaching $1.5 billion as of June 30, 2026. Shareholders' equity increased to $183.8 million, while tangible book value per share rose to $38.90 from $37.09 at the end of 2025. Performance ratios also improved in several areas. The net interest margin expanded to 3.50% from 3.21% a year earlier, while return on average assets increased to 1.14% from 1.04%. Return on average equity eased to 14.80% from 15.64%, but the efficiency ratio improved to 59.07% from 63.71%, indicating stronger operating efficiency. The average cost of total deposits declined to 1.50% during the quarter as deposit pricing moderated. Higher profitability was driven primarily by stronger net interest income as interest expenses declined, more than offsetting lower income from the investment portfolio. The company benefited from reduced funding costs while maintaining loan growth. However, these gains were partially offset by a higher provision for credit losses. Loan loss provision expenses rose to $1.6 million from $704,000 in the prior-year quarter, largely because of increased specific reserves tied to two commercial real estate loans that entered non-accrual status. Non-interest income remained stable as higher wealth management fees and gains on loan sales were largely offset by the absence of a state sales tax refund recognized in the prior-year quarter. Meanwhile, non-interest expenses increased modestly due to higher salaries and other operating expenses, although lower health insurance costs partly mitigated the increase. Credit quality weakened during the quarter as non-performing loans increased to $17.7 million from $8.5 million at the end of 2025. The increase was primarily attributable to two commercial real estate loans totaling $17.4 million. One involved a mixed-use construction project for which the bank committed additional funding and established a forbearance agreement with the developer, while the second was a participated office-building loan placed on non-accrual status. As a result, the allowance for credit losses to loans ratio increased to 1.36% from 1.32% at the end of 2025. Management highlighted continued balance sheet growth, improving deposit costs and expanding wealth management activity as key operating achievements during the period. The board also declared a regular quarterly cash dividend of 34 cents per share, payable Aug. 26, 2026, to shareholders of record as of Aug. 7, 2026. The company did not provide earnings or financial guidance for upcoming quarters in the release. The company continued executing its previously authorized share repurchase program, buying back 10,950 shares in the first six months of 2026 to support its dividend reinvestment plan. The bank also remained classified as well-capitalized under regulatory guidelines as of June 30, 2026. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Franklin Financial Services Corp. (FRAF): Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CHAMBERSBURG, Pa., July 24, 2026 /PRNewswire/ -- Franklin Financial Services Corporation (the Corporation) (NASDAQ: FRAF), the bank holding company of F&M Trust (the Bank) headquartered in Chambersburg, PA, reported its second quarter and year-to-date 2026 financial results. A summary of notable operating results as of or for the second quarter ended June 30, 2026 follows: Net Income: $6.6 million ($1.47 per diluted share) for the second quarter of 2026 compared to $5.9 million ($1.32 per diluted share) for the second quarter of 2025, an increase of 11.9%. Wealth Management: Fees were $2.6 million, an increase of 6.1% from $2.4 million in the second quarter of 2025. Assets under management were $1.5 billion on June 30, 2026. Asset Growth: $2.335 billion in assets on June 30, 2026, compared to $2.239 billion at year-end 2025, an increase of 4.3% (8.6% annualized). Loan Growth: Total net loans of $1.589 billion on June 30, 2026, an increase of 3.1% (6.2% annualized) from December 31, 2025. Deposit Growth: Total deposits of $1.925 billion on June 30, 2026, an increase of 4.8% (9.6% annualized) from December 31, 2025. Quarterly Performance Metrics: Return on Average Assets (ROA) 1.14%, Return on Average Equity (ROE) 14.80%, and Net Interest Margin (NIM) of 3.50% on an annualized basis, compared to a ROA of 1.04%, ROE of 15.64%, and NIM of 3.21% for the second quarter of 2025. On July 16, 2026, the Board of Directors declared a $0.34 per share regular quarterly cash dividend for the third quarter of 2026 to be paid on August 26, 2026, to shareholders of record at the close of business on August 7, 2026. A summary of notable operating results for the six months ended June 30, 2026 follows: Net Income: $13.2 million ($2.94 per diluted share) compared to $9.8 million ($2.20 per diluted share) for the six months ended June 30, 2025, an increase of 34.8%. Wealth Management: Fees were $4.9 million, an increase of 5.2% from $4.6 million for the first six months of 2025. Year-to-Date Performance Metrics: Return on Average Assets (ROA) 1.17%, Return on Average Equity (ROE) 14.96%, and Net Interest Margin (NIM) of 3.52% on an annualized basis, compared to a ROA of 0.89%, ROE of 13.27%, and NIM of 3.13% for the comparable period in 2025. Balance Sheet Highlights Total assets on June 30, 2026 were $2.335 billion, an increase of 4.3% from $2.239 billion on December 31, 2025. Significant changes in the balance sheet from December 31, 2025 to June 30, 2026 include: Debt Securities Available for Sale: Decreased $2.2 million, or (0.5%), net of purchases, due primarily to paydowns. On June 30, 2026, the net unrealized loss in the portfolio was $29.1 million compared to $26.8 million at year-end 2025. Net Loans: Increased $48.2 million or 3.1% (6.2% annualized) over the year-end 2025 balance, primarily from an increase of $45.8 million in commercial real estate (CRE) loans and $24.7 million in residential 1-4 family loans, which was partially offset by a decrease of $19.6 million in commercial (C&I) loans. As of June 30, 2026, CRE loans totaled $949.4 million with the largest collateral segments being: apartment buildings ($161.9 million), hotels and motels ($105.8 million), and office buildings ($100.1 million), primarily in the Bank's market area of south-central Pennsylvania. The Bank's CRE non-owner occupied concentration ratio was 348.2% of risk-based capital as of June 30, 2026, down from 349.9% on December 31, 2025. Deposits: Increased $88.8 million or 4.8% (9.6% annualized)) from year-end 2025. The majority of the growth occurred in noninterest-bearing checking accounts and money management accounts, which was partially offset by a decrease in interest-bearing checking and savings accounts. At June 30, 2026, 17.7% of total deposits were in noninterest checking accounts, compared to 16.9% at year-end 2025. For the first six months of 2026, the cost of total deposits was 1.51%, a decrease from 1.85% for the full year of 2025. On June 30, 2026, the Bank estimated that approximately 90% of its deposits were FDIC insured or collateralized. Shareholders' Equity: Increased $8.6 million to $183.8 million on June 30, 2026 from year-end 2025, and retained earnings increased $10.2 million, net of dividends of $3.0 million, over the same period. The accumulated other comprehensive loss (AOCI) increased $1.9 million during the first six months of 2026 to $23.5 million. On June 30, 2026, the book value of the Corporation's common stock was $40.91 per share and tangible book value (1) increased $1.81 per share from December 31, 2025 to $38.90 per share. In December 2025, an open market repurchase plan was approved to repurchase 150,000 shares over a one-year period and 10,950 shares were repurchased in the first six months of 2026 under the approved plan to fund the dividend reinvestment plan. The Bank is considered to be well-capitalized under regulatory guidance as of June 30, 2026. Average Assets: Average interest-earning assets for the first six months of 2026 were $2.198 billion, compared to $2.146 billion for the same period in 2025, an increase of 2.5%. This increase occurred primarily in the loan portfolio which increased 8.8%, driven by a $82.2 million (9.9%) increase in commercial real estate loans and a $44.0 million (17.6%) increase in first lien 1-4 residential real estate loans. The yield on earning assets decreased from 5.28% for the first six months of 2025 to 5.25% for the first six months of 2026. The yield on the loan portfolio increased by 9 basis points, but this increase was partially offset as higher yielding investments continued to paydown and the yield on interest-earning deposits in other banks declined. The yield on earning assets was 5.22% for the second quarter of 2026. Total deposits averaged $1.878 billion for the first six months of 2026, an increase of $26.7 million (1.4%) over the average balance for the same period in 2025. The cost of total deposits decreased from 1.95% for the first six months of 2025 to 1.51% for the first six months of 2026 and decreased to 1.50% for the second quarter of 2026. Nonperforming Assets: Nonperforming loans (nonaccrual loans and loans 90 days past due and still accruing) totaled $17.7 million on June 30, 2026, compared to $8.5 million on December 31, 2025, an increase of $9.2 million due to the addition of an $8.8 million CRE loan to nonaccrual during the second quarter of 2026. Nonperforming loans were 1.1% of total gross loans on June 30, 2026 compared to 0.55% on December 31, 2025. The nonperforming loans are comprised primarily of two (2) CRE loans to unrelated borrowers totaling $17.4 million. Of these two CRE loans, one is for a matured $7.0 million construction loan on a mixed-use commercial project. During the second quarter, the Bank committed to provide additional funding of up to $2.5 million (with $1.6 million advanced as of June 30, 2026) to fully enclose the property and protect the collateral, and to pay all past due construction costs. As part of this funding commitment, a forbearance agreement was signed by the developer that ceased all construction until funding from new sources was acquired, established specific performance criteria for the developer, and established specific remedies for the Bank in the event of non-compliance with the forbearance agreement. Based on a discounted "as-is" appraisal received in the first quarter of 2026 and the additional funding committed, the Bank increased its specific reserve from $1.0 million on March 31, 2026, to $1.2 million on June 30, 2026. The second CRE loan totals $8.8 million and is secured by six (6) commercial office buildings. This loan is a purchased participation loan where the Bank is not the lead lender. The loan was placed on nonaccrual during the second quarter of 2026, and as of June 30, 2026, the Bank has a specific reserve of $734 thousand based on a recent appraisal. Allowance for Credit Losses (ACL): The ACL to loans ratio was 1.36% on June 30, 2026, compared to 1.32% on December 31, 2025. The increase is driven by the increase in the specific reserves previously discussed above. The allowance for credit losses (ACL) for unfunded commitments was $2.0 million on June 30, 2026, and $1.9 million on December 31, 2025. Income Statement Highlights – Second Quarter Comparison 2026 v. 2025 Net Income: Net income for the second quarter of 2026 was $6.6 million ($1.47 per diluted share) compared to $5.90 million ($1.32 per diluted share) for the second quarter of 2025, an increase of 11.9%. Net Interest Income: $19.3 million for the second quarter of 2026 compared to $17.2 million for the second quarter of 2025, an increase of $2.1 million, or 12.2%. The improvement was driven primarily by a decrease in interest expense, as the increase in interest from loans was partially offset by a decrease in interest from the investment portfolio. Provision for Credit Losses: For the second quarter of 2026, the provision for credit losses on loans was $1.6 million compared to $704 thousand for the same quarter of 2025. The increased provision for credit losses on loans was due primarily to an increase in the specific reserve on the two nonaccrual loans discussed above. The provision for credit losses on unfunded commitments was $39 thousand for the second quarter of 2026 compared to a reversal of $69 thousand for the second quarter of 2025. Noninterest Income: Noninterest income totaled $5.1 million for the second quarter of 2026 compared to $5.1 million for the same quarter of 2025. As compared to the prior year quarter, wealth management fees and the gain on sale of loans increased, but the increase was nearly offset by a state sales tax refund recorded in the second quarter of 2025. Noninterest Expense: For the second quarter of 2026 was $14.6 million compared to $14.4 million for the second quarter of 2025 (an increase of 1.5%). The increase in salary expense was more than offset by a decrease in health insurance expense during the quarter, and other operating expense increased $230 thousand. Income Tax: The effective income tax rate was 19.9% for the second quarter of 2026 and 19.3% for the same period in 2025. Income Statement Highlights – Year-to-date Comparison 2026 v. 2025 Net Income: Net income for the first six months of 2026 was $13.2 million ($2.94 per diluted share) compared to $9.8 million ($2.20 per diluted share) for the same period in 2025, an increase of 34.8%. Net Interest Income: $37.9 million for the first six months of 2026 compared to $32.8 million for the same period in 2025, an increase of $5.0 million or 15.3%. The improvement was driven primarily by a decrease in interest expense, as the increase in interest from loans was partially offset by a decrease in interest from the investment portfolio. Provision for Credit Losses: For the first six months of 2026, the provision for credit losses on loans was $1.8 million compared to $1.5 million for the same period of 2025. The provision for credit losses on unfunded commitments was $58 thousand for the first six months of 2026 compared to a reversal of $40 thousand for the same period of 2025. Noninterest Income: Noninterest income totaled $10.5 million for the first six months of 2026 compared to $9.7 million for the same period of 2025, an increase of 8.7%. The increase was spread across nearly all fee income categories with the largest increases in wealth management fees and gains on loan sales and deposit fees. Noninterest Expense: For the first six months of 2026, noninterest expense was $30.0 million compared to $29.0 million for the same period of 2025 (an increase of 3.4%). The increases occurred primarily in salaries, professional fees, and Pennsylvania shares tax, and were partially offset by a decrease in FDIC insurance premiums. Income Tax: The effective income tax rate was 20.0% for the first six months of 2026 and 19.0% for the same period in 2025. (1) Non-GAAP measure. See GAAP versus Non-GAAP Reconciliation Presentations that follows. Additional information on the Corporation is available on our website at: www.franklinfin.com/Presentations. Franklin Financial is the largest independent, locally owned and operated bank holding company headquartered in Franklin County with assets of more than $2.3 billion. Its wholly-owned subsidiary, F&M Trust, has twenty-two community banking locations in Franklin, Cumberland, Dauphin, Fulton and Huntingdon Counties PA, and Washington County MD. Franklin Financial stock is trading on the Nasdaq Stock Market under the symbol FRAF. Please visit our website for more information, www.franklinfin.com. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company's consolidated financial statements when filed with the Securities and Exchange Commission ("SEC''). Accordingly, the financial information in this announcement is subject to change. Certain statements appearing herein which are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of I995. Such forward-looking statements refer to a future period or periods, reflecting management's current views as to likely future developments, and use words "may," "will," "expect," "believe," "estimate," "anticipate," or similar terms. Because forward-looking statements involve certain risks, uncertainties and other factors over which Franklin Financial Services Corporation has no direct control, actual results could differ materially from those contemplated in such statements. These factors include (but are not limited to) the following: changes in interest rates, changes in the rate of inflation, general economic conditions and their effect on the Corporation and our customers, changes in the Corporation's cost of funds, changes in government monetary policy, changes in government regulation and taxation of financial institutions, changes in technology, the intensification of competition within the Corporation's market area, and other similar factors. We caution readers not to place undue reliance on these forward-looking statements. They only reflect management's analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and any Current Reports on Form 8-K. GAAP versus non-GAAP Reconciliation Presentations – The Corporation supplements its traditional GAAP measurements with certain non-GAAP measurements to evaluate its performance and to eliminate the effect of intangible assets. By eliminating intangible assets, the Corporation believes it presents a measurement that is comparable to companies that have no intangible assets or to companies that have eliminated intangible assets in similar calculations. However, not all companies may use the same calculation method for each measurement. The non-GAAP measurements are not intended to be used as a substitute for the related GAAP measurements. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. In the event of such a disclosure or release, the Securities and Exchange Commission's Regulation G requires: (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP. The following table shows the calculation of the non-GAAP measurements. 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Shares of Franklin Financial Services Corporation FRAF have outperformed the broader market following the release of its first-quarter 2026 results. The stock has risen 4.3% since the earnings announcement compared with a 0.5% return in the S&P 500. Over a month, the company’s shares advanced 14%, slightly ahead of the S&P 500’s 13.7% rise. Franklin Financial reported net income of $6.6 million, or $1.48 per diluted share, for the first quarter of 2026, representing a 69.2% surge from $3.9 million, or $0.88 per share, in the year-ago quarter. The improvement was driven by higher net interest income and growth in fee-based revenue streams. Net interest income rose 18.7% year over year to $18.5 million, supported by a 13.6% increase in loan interest income and a 19.2% decline in interest expenses. Non-interest income also increased 17.5% to $5.4 million, reflecting gains across wealth management fees, loan sales and life insurance proceeds. Franklin Financial Services Corp. price-consensus-eps-surprise-chart | Franklin Financial Services Corp. Quote The company continued to show moderate balance sheet expansion during the quarter. Total assets reached $2.298 billion as of March 31, 2026, up 2.6% from the end of 2025. Net loans grew 0.7% to $1.6 billion, driven mainly by increases in commercial real estate and residential real estate lending. Deposits rose 2.9% to $1.89 billion, with notable gains in non-interest-bearing and money management accounts. Profitability ratios improved significantly from the prior-year period. Return on average assets increased to 1.20% from 0.72%, while return on average equity rose to 15.13% from 10.80%. The net interest margin expanded to 3.53% from 3.05%, reflecting both asset yield improvement and lower funding costs. Additionally, the efficiency ratio improved to 63.64% from 71.39%, indicating better cost management relative to revenue growth. Credit quality remained stable, with non-performing loans at 0.54% of the total loans, largely unchanged from the previous quarter. The allowance for credit losses stood at 1.32% of loans, consistent with the year-end level. Management attributed the strong quarterly performance to margin expansion, disciplined expense control and continued growth in fee-generating businesses, particularly wealth management. According to commentary in the earnings call transcript, the company’s performance benefited from “margin expansion and expense control” alongside the contribution of its wealth management division, which manages more than $1.4 billion in assets. Executives emphasized the importance of diversified revenue streams, noting that fee income, especially from wealth management, continues to represent a competitive advantage. The bank also highlighted the impacts of prior investments in infrastructure and technology, which have supported growth and operational efficiency over recent years. Expense growth remained contained, with non-interest expenses rising 5.3% year over year due to higher employee benefits, including health insurance costs. Meanwhile, provisioning for credit losses declined significantly, contributing to the bottom-line improvement. Franklin Financial maintained solid capital levels and continued to return capital to shareholders. Shareholders’ equity increased 2% from the end of 2025, supported by retained earnings growth. The company declared a quarterly cash dividend of 34 cents per share, marking a 3% increase from the prior-year period. Book value per share rose to $39.78, while tangible book value reached $37.78, reflecting steady capital accumulation. The company also continues to operate under a previously approved share repurchase plan, providing additional flexibility for capital deployment. In the first quarter of 2026, the company announced a leadership development initiative with the promotion of Chad Carroll to the role of president. Management indicated that the move is aimed at strengthening leadership continuity and supporting ongoing growth across business lines. The company remains focused on organic growth, digital banking enhancements and the expansion of its service footprint in its regional markets, as highlighted in management’s broader strategic commentary. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Franklin Financial Services Corp. (FRAF): Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CHAMBERSBURG, Pa., April 23, 2026 /PRNewswire/ -- Franklin Financial Services Corporation (the Corporation) (NASDAQ: FRAF), the bank holding company of F&M Trust (the Bank) headquartered in Chambersburg, PA, reported its first quarter 2026 results. A summary of notable operating results as of or for the first quarter ended March 31, 2026 follows: Net income: $6.6 million ($1.48 per diluted share) for the first quarter of 2026. This is an increase of $594 thousand (9.8%) compared to $6.0 million ($1.35 per diluted share) for the fourth quarter of 2025 and an increase of $2.7 million (69.2%) compared to $3.9 million ($0.88 per diluted share) for the first quarter of 2025. Wealth Management: $2.3 million in fees for the first quarter of 2026, an increase of 4.1% from $2.2 million in the first quarter of 2025. Assets under management were $1.417 billion on March 31, 2026. Asset Growth: $2.298 billion in total assets on March 31,2026, an increase of 2.6% from $2.239 billion at year-end 2025. Loan Growth: Net loans totaled $1.552 billion on March 31, 2026, an increase of 0.7% from $1.541 billion on December 31, 2025. Deposit Growth: Total deposits of $1.890 billion, an increase of 2.9% from $1.836 billion on December 31, 2025. Quarterly Performance Metrics: Return on Average Assets (ROA) of 1.20%, Return on Average Equity (ROE) of 15.13%, and Net Interest Margin (NIM) of 3.53%, on an annualized basis for the first quarter of 2026, compared to an ROA of 0.72%, ROE of 10.80% and NIM of 3.05% for the first quarter of 2025. On April 8, 2026, the Board of Directors declared $0.34 per share regular quarterly cash dividend for the second quarter of 2026 to be paid on May 27, 2026, to shareholders of record at the close of business on May 1, 2026. This dividend represents a 3.0% increase over the second quarter 2025 dividend. Balance Sheet Highlights Total assets on March 31, 2026 were $2.298 billion an increase from $2.239 billion on December 31, 2025. Changes in the balance sheet from December 31, 2025, to March 31, 2026, include: Debt securities available for sale decreased $18.1 million (4.0%) due primarily to paydowns. On March 31, 2026, the net unrealized loss in the portfolio was $28.8 million compared to a net unrealized loss of $26.8 million at year-end 2025. Net loans increased $11.1 million (0.7%) over the year-end 2025 balance, primarily from increases in commercial real estate loans of $5.5 million, and 1-4 family residential real estate loans of $13.4 million, but were partially offset by a decrease of $11.5 million in commercial loans. On March 31, 2026, commercial real estate loans totaled $909.1 million (57.8% of total gross loans), with the largest collateral segments being: apartment buildings ($175.5 million), hotels and motels ($103.8 million), land development ($102.0 million), office buildings ($94.0 million) and shopping centers ($92.2 million) which are located primarily in south-central Pennsylvania. Total deposits increased $53.9 million (2.9%) to $1.890 billion from year-end 2025. Noninterest-bearing deposits (17.6% of total deposits) grew 6.9% ($21.4 million) and money management deposits grew 3.9% ($30.4 million) from year-end 2025. Time deposits increased 6.3% ($14.2 million) over the same period. On March 31, 2026, the Bank estimated that 89% of its deposits were FDIC insured or collateralized. On March 31, 2026, the Bank had borrowings of $200.0 million from the Federal Home Loan Bank of Pittsburgh (FHLB). The Bank has additional funding capacity with the Federal Reserve, FHLB and correspondent banks. Shareholders' equity increased $3.5 million (2.0%) from December 31, 2025. Retained earnings increased $5.2 million, net of dividends of $1.5 million paid to shareholders during 2026. The accumulated other comprehensive loss (AOCL) increased from $21.6 million at year-end 2025 to $23.3 million due to an increase in the unrealized loss in the investment portfolio. On March 31, 2026, the book value of the Corporation's common stock was $39.78 per share and tangible book value (1) was $37.78 per share. In December 2025, an open market repurchase plan to repurchase 150,000 shares through December 31, 2026, was approved. The Bank is considered to be "well-capitalized" under regulatory guidelines as of March 31, 2026. Average 2026 year-to-date earning assets were $2.153 billion compared to $2.108 billion for the same period in 2025, an increase of $45.3 million (2.1%). The increase occurred primarily in the commercial real estate portfolio ($92.6 million) and the residential 1-4 family real estate portfolio ($60.7 million). The yield on earning assets increased from 5.25% for the first quarter of 2025 to 5.28% for the first quarter of 2026. Total deposits averaged $1.833 billion, an increase of 0.9% over the first quarter 2025 average of $1.816 billion. The cost of total deposits for the first quarter of 2026 was 1.52% compared to 2.02% for the same period 2025. Nonaccrual loans totaled $8.5 million on March 31, 2026, materially unchanged from December 31, 2025. Nonaccrual loans were 0.54% of total gross loans on March 31, 2026, compared to 0.55% on December 31, 2025. The nonaccrual loans are comprised primarily of commercial real estate (CRE) loans totaling $7.7 million between four different loans to unrelated borrowers, and one commercial (C&I) loan for $621 thousand. The largest of the four nonaccrual CRE loans is for a $7.0 million construction loan on a mixed-use commercial project which was past due in the 30-59 day aging bucket as of March 31, 2026. The Bank is in continual communication with the developer regarding the funding required to complete the project, the source of funds, as well as other options available to the Bank to protect its interest. The Bank is currently working with the developer on a plan to jointly fund the completion of enclosing the property to protect the collateral. A discounted "as-is" appraisal was received in the first quarter of 2026 and as a result the Bank increased its specific reserve to $1.0 million on March 31, 2026, from $892 thousand on December 31, 2025. As of March 31, 2026, the Bank created a specific reserve of $557 thousand for the previously mentioned nonaccrual C&I loan, based on the valuation of business assets held as collateral. The allowance for credit loss to loans ratio was 1.32% on March 31, 2026, unchanged from December 31, 2025. The allowance for credit losses (ACL) for unfunded commitments was $1.9 million on March 31, 2026, unchanged from December 31, 2025. Income Statement Highlights – First Quarter 2026 v. 2025 Net income for the first quarter of 2026 was $6.6 million ($1.485 per diluted share) an increase of $2.7 million (69.2%) from $3.9 million ($0.88 per diluted share) for the first quarter of 2025. Net interest income was $18.5 million for the first quarter of 2026, an increase of 18.7% compared to $15.6 million for the first quarter of 2025. A 13.6% increase in interest from the loan portfolio and a decrease of 19.2% in interest expense quarter over quarter contributed to the increase in net interest income. The provision for credit losses on loans was $202 thousand for the first quarter of 2026 compared to $750 thousand for the first quarter of 2025. The provision for credit losses on unfunded commitments was $19 thousand for the first quarter of 2026 compared to $29 thousand for the first quarter of 2025. Noninterest income totaled $5.4 million for the first quarter of 2026 compared to $4.6 million for the first quarter of 2025, an increase of $798 thousand (17.5%). Compared to the first quarter of 2025, wealth management fees increased $91 thousand to $2.3 million, the gain on sale of loans increased $209 thousand and the Bank recorded a gain of $351 thousand from life insurance proceeds. Noninterest expense for the first quarter of 2026 was $15.4 million compared to $14.6 million for the first quarter of 2025, an increase of $776 thousand (5.3%). The largest increase ($458 thousand) quarter over quarter occurred in employee benefits, primarily health insurance expense which increased $252 thousand. Salaries, capital shares tax, and card processing fees also increased quarter over quarter. The effective income tax rate was 20.1% for the first quarter of 2026 compared to 18.5% for the same period in 2025. (1) Non-GAAP measure. See GAAP versus Non-GAAP Reconciliation that follows. Additional information on the Corporation is available on our website at: www.franklinfin.com/Presentations. Franklin Financial is the largest independent, locally owned and operated bank holding company headquartered in Franklin County with assets of more than $2.2 billion. Its wholly-owned subsidiary, F&M Trust, has twenty-three community banking locations in Franklin, Cumberland, Dauphin, Fulton and Huntingdon Counties PA, and Washington County MD. Franklin Financial stock is trading on the Nasdaq Stock Market under the symbol FRAF. Please visit our website for more information, www.franklinfin.com. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company's consolidated financial statements when filed with the Securities and Exchange Commission ("SEC''). Accordingly, the financial information in this announcement is subject to change. Certain statements appearing herein which are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of I995. Such forward-looking statements refer to a future period or periods, reflecting management's current views as to likely future developments, and use words "may," "will," "expect," "believe," "estimate," "anticipate," or similar terms. Because forward-looking statements involve certain risks, uncertainties and other factors over which Franklin Financial Services Corporation has no direct control, actual results could differ materially from those contemplated in such statements. These factors include (but are not limited to) the following: changes in interest rates, changes in the rate of inflation, general economic conditions and their effect on the Corporation and our customers, changes in the Corporation's cost of funds, changes in government monetary policy, changes in government regulation and taxation of financial institutions, changes in technology, the intensification of competition within the Corporation's market area, and other similar factors. We caution readers not to place undue reliance on these forward-looking statements. They only reflect management's analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and any Current Reports on Form 8-K. GAAP versus non-GAAP Presentations – The Corporation supplements its traditional GAAP measurements with certain non-GAAP measurements to evaluate its performance and to eliminate the effect of intangible assets. By eliminating intangible assets, the Corporation believes it presents a measurement that is comparable to companies that have no intangible assets or to companies that have eliminated intangible assets in similar calculations. However, not all companies may use the same calculation method for each measurement. The non-GAAP measurements are not intended to be used as a substitute for the related GAAP measurements. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. In the event of such a disclosure or release, the Securities and Exchange Commission's Regulation G requires: (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP. The following table shows the calculation of the non-GAAP measurements. View original content to download multimedia:https://www.prnewswire.com/news-releases/franklin-financial-reports-first-quarter-2026-results-declares-dividend-302752200.html

Shares of Franklin Financial Services Corporation FRAF have shown a mixed performance following the release of its fourth-quarter 2025 earnings. Shares of Franklin Financial have gained 2% since reporting results for the fourth quarter of 2025. This compares to the S&P 500 index’s 0.4% return over the same time frame. Over the past month, the stock has declined 2.2% against the S&P 500’s 1.4% rise. Franklin Financial reported solid improvements in its core financial results compared with the prior year, helped by stronger net interest income and the absence of large securities-related losses that weighed on earlier periods. For the fourth quarter of 2025, net income rose to $6 million, or $1.35 per diluted share, from $487 thousand, or 11 cents per diluted share, in the year-ago quarter. The prior-year period was significantly impacted by a $3.4-million after-tax loss on the sale of investment securities tied to a portfolio restructuring. On a full-year basis, net income increased 91.2% year over year to $21.2 million, or $4.74 per diluted share, from $11.1 million, or $2.51 per diluted share, in 2024. Net interest income for the fourth quarter climbed 23.3% to $18.6 million, reflecting higher interest income from loan growth, while full-year net interest income rose 21.1% to $69.6 million. Franklin Financial Services Corp. price-consensus-eps-surprise-chart | Franklin Financial Services Corp. Quote Balance sheet trends in the year pointed to steady asset expansion and notable loan growth. Total assets stood at $2.239 billion at Dec. 31, 2025, up 1.9% from a year earlier. Net loans increased 11.6% year over year to $1.541 billion, driven largely by growth in commercial real estate and one-to-four-family residential real estate lending. Total deposits grew 1.1% to $1.836 billion, with growth tempered by the payoff of $65 million in brokered deposits in the fourth quarter. Performance ratios also improved materially from the prior year, with fourth-quarter return on average assets rising to 1.05% from 0.09% and return on average equity increasing to 14.20% from 1.32%, both of which were distorted in the prior-year quarter by securities losses. Net interest margin for the quarter expanded to 3.4% from 2.92% a year earlier. Management highlighted the strength of core earnings and balance sheet positioning, emphasizing loan growth and improved margins as key drivers of results. The company noted that earnings comparisons benefited from the absence of securities portfolio restructuring losses that affected 2024 results, allowing underlying operating trends to be more visible. Wealth management remained a stable contributor, with quarterly fees of $2.3 million, up 4.6% from the fourth quarter of 2024, and assets under management totaling $1.421 billion at the year end. Management also underscored the company’s capital position, noting that the bank remained “well-capitalized” under regulatory guidelines as of Dec. 31, 2025. Several factors shaped the reported results. Higher net interest income was supported by an increase in average earning assets and improved asset yields, with the yield on earning assets rising to 5.31% for 2025 from 5.16% in 2024. Non-interest income increased sharply year over year, primarily because the prior-year period included a sizable pre-tax securities loss; excluding that loss, non-interest income growth was more modest and driven by higher wealth management fees and gains on loan sales. On the expense side, non-interest expenses rose 8.4% in the fourth quarter and 6.7% for the full year, reflecting higher salaries and benefits, advertising, and FDIC insurance premiums. Credit quality metrics showed some deterioration from very low prior-year levels, with nonaccrual loans rising to 0.55% of total gross loans at year end, though management indicated that specific reserves had been established and that collateral coverage was considered adequate. The company addressed forward-looking statements by noting that results could be influenced by factors such as interest rate fluctuations, economic conditions, funding costs, regulatory changes, and competitive pressures. As a result, investors were left to evaluate future performance based on current operating trends rather than explicit numerical guidance. During the year 2025, Franklin Financial undertook several balance sheet and capital-related actions. In September 2025, the company redeemed $9 million of its $15 million fixed-to-floating subordinated notes due in 2030, using excess cash. Shareholders’ equity increased 21.1% year over year, aided by higher retained earnings and a reduction in accumulated other comprehensive loss as unrealized losses in the securities portfolio narrowed. The company also continued its share repurchase activity, buying back shares under an existing plan and approving a new authorization in December 2025 to repurchase up to 150,000 shares through December 31, 2026, alongside declaring a quarterly cash dividend that represented a 3.1% increase over the prior year’s comparable dividend. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Franklin Financial Services Corp. (FRAF): Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CHAMBERSBURG, Pa., Jan. 27, 2026 /PRNewswire/ -- Franklin Financial Services Corporation (the Corporation) (NASDAQ: FRAF), the bank holding company of F&M Trust (the Bank) headquartered in Chambersburg, PA, reported its fourth quarter 2025 and year-to-date 2025 results. A summary of notable operating results as of or for the fourth quarter ended December 31, 2025 follows: Net income: $6.0 million ($1.35 per diluted share) an increase of 12.9% compared to $5.4 million ($1.19 per diluted share) for the third quarter of 2025 and $487 thousand ($0.11 per diluted share) for the fourth quarter of 2024 which was negatively affected by a $3.4 million after tax loss on the sale of investment securities sold as part of a portfolio restructuring. Wealth Management: $2.3 million in fees for the quarter, an increase of 4.6% from $2.2 million in the fourth quarter of 2024. Assets under management were $1.421 billion on December 31, 2025. Asset Growth: $2.239 billion in total assets on December 31,2025, an increase of 1.9% from $2.198 billion at year-end 2024. Loan Growth: Net loans totaled $1.541 billion on December 31, 2025, an increase of 11.6% from $1.380 billion on December 31, 2024. Deposit Growth: Total deposits of $1.836 billion, an increase of 1.1% from $1.816 billion on December 31, 2024. During the fourth quarter of 2025 the Bank paid off $65.0 million of brokered deposits. Quarterly Performance Metrics: Return on Average Assets (ROA)of 1.05%, Return on Average Equity (ROE) of 14.20%, and Net Interest Margin (NIM) of 3.40%, on an annualized basis for the fourth quarter of 2025, compared to an ROA of 0.09%, ROE of 1.32% and NIM of 2.92% for the fourth quarter of 2024. The ROA and ROE for the fourth quarter of 2024 were negatively affected by the previously mentioned loss on securities. On January 15, 2026, the Board of Directors declared $0.33 per share regular quarterly cash dividend for the first quarter of 2026 to be paid on February 25, 2026, to shareholders of record at the close of business on February 6, 2026. This dividend represents a 3.1% increase over the first quarter 2025 dividend. A summary of notable operating results as of or for the twelve months ended December 31, 2025, follows : Net Income: $21.2 million ($4.74 per diluted share) compared to $11.1 million ($2.51 per diluted share) for the twelve months ending December 31, 2024, an increase of 91.2%. The 2024 results were negatively affected by a $3.4 million after tax loss on the sale of investment securities sold as part of a portfolio restructuring. Wealth Management: Fees were $9.2 million, an increase of 7.4% from $8.5 million for 2024. Performance Metrics: ROA of 0.94% ROE of 13.55%, and NIM of 3.25%, compared to a ROA of 0.54%, ROE of 8.05%, and NIM of 2.95% for the comparable period in 2024. Balance Sheet Highlights Total assets on December 31, 2025, were $2.239 billion up 1.9% from $2.198 billion on December 31, 2024. Changes in the balance sheet from December 31, 2024, to December 31, 2025, include: Debt securities available for sale decreased $54.0 million (10.6%) due primarily to paydowns. On December 31, 2025, the net unrealized loss in the portfolio was $26.8 million compared to a net unrealized loss of $45.4 million at year-end 2024. Net loans increased $160.2 million (11.6%) over the year-end 2024 balance, primarily from increases in commercial real estate loans of $100.2 million, and 1- 4 family residential real estate of $45.6 million. On December 31, 2025, commercial real estate loans totaled $903.6 million (57.9% of total gross loans), with the largest collateral segments being: apartment buildings ($181.7 million), hotels and motels ($102.2 million), land development ($97.0 million), office buildings ($92.8 million) and shopping centers ($87.9 million) which are located primarily in south-central Pennsylvania. Total deposits increased $20.1 million (1.1%) to $1.836 billion from year-end 2024. The year over year growth was reduced primarily due to the Bank paying off $65.0 million of brokered time deposits in the fourth quarter of 2025. Noninterest-bearing deposits (16.9% of total deposits) grew 6.9% from year-end 2024, and interest-bearing checking and savings accounts increased 7.6% over the same period. Non-brokered time deposits declined 11.6% year-over year. The Bank's cost of deposits for 2025 averaged 1.85% compared to 1.89% for the same period in 2024. For the fourth quarter of 2025, the cost of deposits fell to 1.68%. On December 31, 2025, the Bank estimated that 87% of its deposits were FDIC insured or collateralized. On September 30, 2025, the Corporation redeemed $9.0 million of its $15.0 million, 5.00% fixed to floating, subordinate notes due September 1, 2030, utilizing excess cash on hand for the redemption. On December 31, 2025, the Bank had borrowings of $200.0 million from the Federal Home Loan Bank of Pittsburgh (FHLB). The Bank has additional funding capacity with the Federal Reserve, FHLB and correspondent banks. Shareholders' equity increased $30.5 million (21.1%) from December 31, 2024. Retained earnings increased $15.4 million, net of dividends of $5.8 million paid to shareholders during 2025. The accumulated other comprehensive loss (AOCI) decreased from $35.5 million at year-end 2024 to $21.6 million from a decrease in the unrealized loss in the investment portfolio. On December 31, 2025, the book value of the Corporation's common stock was $39.11 per share and tangible book value (1) was $37.10 per share. In January 2025, an open market repurchase plan was approved to repurchase 150,000 shares of common stock over a one-year period and 19,300 shares of common stock were repurchased in 2025 under the approved plan to fund the quarterly dividend reinvestment plan and Employee Stock Purchase Plan. In December 2025, a new repurchase plan to repurchase 150,000 shares through December 31, 2026, was approved. The Bank is considered to be "well-capitalized" under regulatory guidelines as of December 31, 2025. Average 2025 year-to-date earning assets were $2.172 billion compared to $1.983 billion in 2024, an increase of $189.8 billion (9.6%). The increase occurred primarily in the commercial real estate portfolio ($118.2 million) and the residential 1-4 family real estate portfolio ($51.9 million). The yield on earning assets increased from 5.16% in 2024 to 5.31% in 2025. For the fourth quarter of 2025, the yield on earning assets was 5.29%. Total deposits averaged $1.872 billion, an increase of 14.3% over the 2024 average of $1.638 billion. The cost of total deposits for 2025 was 1.85% compared to 1.89% for 2024. The cost of deposits for the fourth quarter of 2025 was 1.68%. Nonaccrual loans totaled $8.5 million on December 31, 2025, and have increased from $266 thousand on December 31, 2024, but have decreased from $10.7 million on September 30, 2025. Nonaccrual loans were 0.55% of total gross loans on December 31, 2025, compared to 0.02% on December 31, 2024. The nonaccrual loans are comprised primarily of commercial real estate (CRE) loans totaling $8.1 million between four different loans to unrelated borrowers. The largest nonaccrual CRE loan is for a $7.1 million construction loan on a mixed-use commercial project. The construction loan is current on payments as of December 31, 2025, the developer invested additional capital in the project during the third quarter of 2025 and is pursuing other investors for the project. The Bank currently has no commitment to lend additional money. A specific reserve of $892 thousand has been established for this loan, and with this reserve, the Bank currently believes it is sufficiently collateralized for this loan. The allowance for credit loss to loans ratio was 1.32% on December 31, 2025, 2025, up from 1.26% on December 31, 2024, primarily due to the addition of the specific reserve, previously mentioned. The allowance for credit losses (ACL) for unfunded commitments was $1.9 million and $2.0 million on December 31, 2025, and 2024, respectively. Income Statement Highlights – Fourth Quarter 2025 v. 2024 Net income for the fourth quarter of 2025 was $6.0 million ($1.35 per diluted share), an increase of $5.6 million compared to $487 thousand ($0.11 per diluted share) for the fourth quarter of 2024 which was negatively affected by a $3.4 million after tax loss on the sale of investment securities sold as part of a portfolio restructuring. Net interest income was $18.6 million for the fourth quarter of 2025, an increase of 23.3% compared to $15.1 million for the fourth quarter of 2024. The improvement was driven primarily by an increase in interest income from the loan portfolio. The provision for credit losses on loans was $326 thousand for the fourth quarter of 2025 compared to $451 thousand for the fourth quarter of 2024. The provision for credit losses on unfunded commitments was a reversal of $37 thousand for the fourth quarter of 2025 compared to an expense of $49 thousand for the fourth quarter of 2024. Noninterest income totaled $4.7 million for the fourth quarter of 2025 compared to $288 thousand for the fourth quarter of 2024. Compared to the fourth quarter of 2024, wealth management fees increased $100 thousand and the gain on sale of loans increased $62 thousand. During the fourth quarter of 2024, the Bank recognized a $4.3 million (pre-tax) loss on the sale of securities. Excluding this loss (1), noninterest income would have increased from $4.6 million in the fourth quarter of 2024 to $4.7 million for the fourth quarter of 2025, driven primarily by the previously mentioned items. Noninterest expense for the fourth quarter of 2025 was $15.5 million compared to $14.3 million for the fourth quarter of 2024 (an increase of 8.4%). The increases over the fourth quarter of 2024 occurred primarily in salaries and benefits ($288 thousand), advertising ($175 thousand) and FDIC insurance premiums ($101 thousand). The effective income tax rate was 19.2% for the fourth quarter of 2025 and 11.3% for the same period in 2024. Income Statement Highlights – Year-to-date Comparison 2025 v. 2024 Net income year-to-date for 2025 was $21.2 million ($4.74 per diluted share) compared to $11.1 million ($2.51 per diluted share) for the same period in 2024, an increase of 91.2%. Year-to-date income for 2024 was also affected by the loss on securities portfolio restructuring previously mentioned. The provision for credit losses on loans was $3.0 million for the year compared to $2.0 million for 2024. The increase was driven primarily by a specific reserve of $894 thousand established in the third quarter of 2025 for a $7.1 million commercial loan. The provision for credit losses on unfunded commitments was a reversal of $131 thousand for 2025 and an expense of $8 thousand in 2024. Noninterest income year-to-date was $19.2 million, an increase of 40.2% from $13.7 million in 2024. Noninterest income for 2024 includes a $4.3 million pre-tax securities loss. Excluding the loss in 2024 (1), noninterest income in 2025 would have increased $1.2 million (6.9%) over 2024. Year-over-year, wealth management fees increased $631 thousand, gains on the sale of mortgages increased $107 thousand, and a sales tax refund of $326 thousand received in 2025. Noninterest expense was $59.7 million for 2025 compared to $55.9 million in 2024, an increase of $3.8 million (6.7%). The largest factor contributing to the year-over-year change was an increase of $2.6 million in salaries and benefits (primarily salaries and health insurance). Legal and professional fees, advertising, data processing and FDIC insurance premiums were also higher in 2025 compared to 2024. The effective income tax rate was 19.2% for 2025 and 16.6% in 2024. Additional information on the Corporation is available on our website at: www.franklinfin.com/Presentations. Franklin Financial is the largest independent, locally owned and operated bank holding company headquartered in Franklin County with assets of more than $2.2 billion. Its wholly-owned subsidiary, F&M Trust, has twenty-three community banking locations in Franklin, Cumberland, Dauphin, Fulton and Huntingdon Counties PA, and Washington County MD. Franklin Financial stock is trading on the Nasdaq Stock Market under the symbol FRAF. Please visit our website for more information, www.franklinfin.com. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company's consolidated financial statements when filed with the Securities and Exchange Commission ("SEC"). Accordingly, the financial information in this announcement is subject to change. Certain statements appearing herein which are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements refer to a future period or periods, reflecting management's current views as to likely future developments, and use words "may," "will," "expect," "believe," "estimate," "anticipate," or similar terms. Because forward-looking statements involve certain risks, uncertainties and other factors over which Franklin Financial Services Corporation has no direct control, actual results could differ materially from those contemplated in such statements. These factors include (but are not limited to) the following: changes in interest rates, changes in the rate of inflation, general economic conditions and their effect on the Corporation and our customers, changes in the Corporation's cost of funds, changes in government monetary policy, changes in government regulation and taxation of financial institutions, changes in technology, the intensification of competition within the Corporation's market area, and other similar factors. We caution readers not to place undue reliance on these forward-looking statements. They only reflect management's analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and any Current Reports on Form 8-K. GAAP versus non-GAAP Presentations – The Corporation supplements its traditional GAAP measurements with certain non-GAAP measurements to evaluate its performance and to eliminate the effect of intangible assets. By eliminating intangible assets (Goodwill), the Corporation believes it presents a measurement that is comparable to companies that have no intangible assets or to companies that have eliminated intangible assets in similar calculations. However, not all companies may use the same calculation method for each measurement. The non-GAAP measurements are not intended to be used as a substitute for the related GAAP measurements. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. In the event of such a disclosure or release, the Securities and Exchange Commission's Regulation G requires: (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP. The following table shows the calculation of the non-GAAP measurements View original content to download multimedia:https://www.prnewswire.com/news-releases/franklin-financial-reports-2025-q4-and-year-to-date-results-declares-dividend-302671709.html

CHAMBERSBURG, Pa., Oct. 28, 2025 /PRNewswire/ -- Franklin Financial Services Corporation (the Corporation) (NASDAQ: FRAF), the bank holding company of F&M Trust (the Bank) headquartered in Chambersburg, PA, reported its third quarter and year-to-date 2025 financial results. A summary of notable operating results as of or for the third quarter ended September 30, 2025, follows: Net Income: $5.4 million ($1.19 per diluted share) an increase of 26.9% compared to $4.2 million ($0.95 per diluted share) for the third quarter of 2024, and a decrease of 9.4% from $5.9 million ($1.32 per diluted share) for the second quarter of 2025. Wealth Management: Fees were $2.3 million, an increase of 8.0% from $2.1 million in the third quarter of 2024. Assets under management were $1.4 billion on September 30, 2025. Asset Growth: $2.297 billion in assets on September 30, 2025, compared to $2.198 billion at year-end 2024, an increase of 4.5%. Loan Growth: Total net loans of $1.544 billion on September 30, 2025, an increase of 11.8% from December 31, 2024. Deposit Growth: Total deposits of $1.903 billion on September 30, 2025, an increase of 4.8% from December 31, 2024. Performance Metrics: Return on Average Assets (ROA) 0.93%, Return on Average Equity (ROE) 13.39%, and Net Interest Margin (NIM) of 3.32% on an annualized basis, for the third quarter of 2025, compared to a ROA of 0.80%, ROE of 11.86%, and NIM of 2.97% for the third quarter of 2024. The key performance metrics for the third quarter of 2025 were negatively affected by fee amortization of $113 thousand (recorded in interest expense) from the redemption of a portion of the Corporation's subordinated notes, and the addition of an $894 thousand specific reserve on one commercial real estate credit (further described below) through the provision for credit loss. On October 16, 2025, the Board of Directors declared a $0.33 per share regular quarterly cash dividend for the fourth quarter of 2025 to be paid on November 26, to shareholders of record at the close of business on November 7, 2025. This dividend represents a 3.1% increase over the 2024 fourth quarter dividend. A summary of notable operating results as of or for the nine months ended September 30, 2025, follows: Net Income: $15.2 million ($3.39 per diluted share) compared to $10.6 million ($2.41 per diluted share) for the nine months ended September 30, 2024, an increase of 43.1%. Wealth Management: Fees were $6.9 million, an increase of 8.3% from $6.4 million for the first nine months of 2024. Performance Metrics: ROA 0.90% ROE 13.31%, and NIM of 3.20% on an annualized basis, compared to a ROA of 0.69%, ROE of 10.47%, and NIM of 2.95% for the comparable period in 2024. Balance Sheet Highlights Total assets on September 30, 2025, were $2.297 billion, up 4.5% from $2.198 billion on December 31, 2024. Significant changes in the balance sheet from December 31, 2024, to September 30, 2025 include: Debt securities available for sale decreased $39.3 million (7.7%) due primarily to paydowns. Net loans increased $163.1 million (11.8%) over the year-end 2024 balance, primarily from an increase of $101.3 million in commercial real estate loans. As of September 30, 2025, commercial real estate (CRE) loans totaled $904.6 million (57.8% of total loans) with the largest collateral segments being: apartment buildings ($174.6 million), hotels and motels ($103.0 million), office buildings ($93.6 million), land development ($92.4 million), shopping centers ($89.3 million). These loans are primarily in the Bank's market area of south-central Pennsylvania. Of the total CRE portfolio, 41.0% was owner-occupied and 59.0% was non-owner occupied. Total deposits increased $87.2 million (4.8%) from year-end 2024. The majority of the growth occurred in money management accounts, which was partially offset by a decrease in time deposits. Noninterest-bearing accounts were 16.4% of total deposit, up slightly from 16% at year-end 2024. For the first nine months of 2025, the cost of total deposits was 1.91%, but fell to 1.83% for the third quarter of 2025. On September 30, 2025, the Bank estimated that approximately 88% of its deposits were FDIC insured or collateralized. On September 30, 2025, the Corporation redeemed $9.0 million of its $15.0 million, 5.00% fixed to floating, subordinate notes due September 1, 2030, utilizing excess cash on hand for the redemption. Shareholders' equity increased $21.6 million during the first nine months of 2025 to $166.3 million on September 30, 2025. Retained earnings increased $10.8 million, net of dividends of $4.4 million, over the same period. The accumulated other comprehensive loss (AOCI) decreased $9.7 million during the first nine months of 2025 to $25.8 million. On September 30, 2025, the tangible book value(1) of the Corporation's common stock was $35.13 per share an increase of $4.48 per share from December 31, 2024. In January 2025, an open market repurchase plan was approved to repurchase 150,000 shares of common stock over a one-year period and 12,800 shares of common stock were repurchased during the first nine months of 2025 under the approved plan to fund the quarterly dividend reinvestment plan. The Bank is considered to be well-capitalized under regulatory guidance as of September 30, 2025. Average interest-earning assets for the first nine months of 2025 were $2.164 billion, compared to $1.950 billion for the same period in 2024, an increase of 11.0%. This increase occurred primarily in the loan portfolio which increased 13.9%, driven by a 16.3% ($119.3 million) increase in commercial real estate loans. The yield on earning assets increased to 5.31% for the first nine months of 2025 from 5.15% for the same period in 2024. For the third quarter of 2025, the yield on earning assets was 5.39%. Total deposits averaged $1.867 billion for the first nine months of 2025, an increase of $278.1 million (17.5%) over the average balance for the same period in 2024. The cost of total deposits increased from 1.81% for the first nine months of 2024 to 1.91% for the same period of 2025, but the cost decreased to 1.83% for the third quarter of 2025. Nonaccrual loans totaled $10.7 million, on September 30, 2025, and have increased from $266 thousand on December 31, 2024, but have decreased from $10.8 million on June 30, 2025. Nonaccrual loans were 0.68% of total gross loans on September 30, 2025, compared to 0.02% on December 31, 2024. The nonaccrual loans are comprised primarily of two loans: 1) a $7.3 million construction loan on a mixed-use commercial project, and 2) a $2.9 million hotel loan. The construction loan is current on payments as of September 30, 2025, the developer invested additional capital in the project during the third quarter of 2025, other investors are expected to provide additional capital during the fourth quarter of 2025, and the Bank has no commitment to lend additional money. Nevertheless, the Bank established a specific reserve of $894 thousand for this loan as of September 30, 2025, and with this reserve believes it is sufficiently collateralized for this loan. The hotel was auctioned in July 2025. Settlement of the auction sale is expected in the fourth quarter of 2025 and the net proceeds to the Bank are expected to fully satisfy the loan. The allowance for credit loss to loans ratio was 1.30% on September June 30, 2025, up from 1.26% on December 31, 2024, primarily due to the addition of the specific reserve, previously mentioned. The allowance for credit losses (ACL) for unfunded commitments was $1.9 million on September 30, 2025, compared to $2.0 million on December 31, 2024. Income Statement Highlights – Third Quarter Comparison 2025 v. 2024 Net income for the third quarter of 2025 was $5.4 million ($1.19 per diluted share) compared to $4.2 million ($0.95 per diluted share) for the third quarter of 2024, an increase of 26.9%. Net income for the third quarter was negatively affected by additional amortization expense on the partial redemption of the subordinated note, and the specific reserve previously discussed. Net interest income was $18.2 million for the third quarter of 2025 compared to $14.7 million for the same period of 2024, an increase of $3.5 million or 24.2%. The improvement was driven primarily by an increase in interest income on the loan portfolio. For the third quarter of 2025, the provision for credit losses on loans was $1.3 million compared to $474 thousand for the same quarter of 2024. The increased provision for credit losses was due to the previously discussed specific reserve of $894 thousand. The provision for credit losses on unfunded commitments was a reversal of $53 thousand for the third quarter of 2025, compared to an expense of $11 thousand for the same period in 2024. Noninterest income totaled $4.8 million for the third quarter of 2025 compared to $4.9 million for the same quarter of 2024, a decrease of 0.9%. Compared to the third quarter of 2024, income from Wealth Management increased $167 thousand, but was more than offset by a reduction in income from the change in fair value of equity securities. Noninterest expense for the third quarter of 2025 was $15.1 million compared to $13.9 million for the third quarter of 2024, an increase of $1.2 million (8.8%). Salaries and employee benefits increased $1.1 million, primarily in salaries (increased $506 thousand) and health insurance (increased $420 thousand) period over period. The effective federal income tax rate was 19.6% for the third quarter of 2025 and 17.3% for the same period in 2024. Income Statement Highlights – Year-to-date Comparison 2025 v. 2024 Net income for the first nine months of 2025 was $15.2 million ($3.39 per diluted share) compared to $10.6 million ($2.41 per diluted share) for the same period in 2024, an increase of 43.1%. Net interest income was $51.0 million for the first nine months of 2025 compared to $42.4 million for the same period in 2024, an increase of $8.6 million or 20.3%. The improvement was driven primarily by an increase in interest income on the loan portfolio which was up $9.8 million while interest expense increased only $2.1 million. For the first nine months of 2025, the provision for credit losses on loans was $2.7 million compared to $1.5 million for the same period of 2024. The increased provision for credit losses was due primarily to the previously discussed specific reserve of $894 thousand. The year-to-date provision for credit losses on unfunded commitments was a reversal of $93 thousand for 2025, compared to a reversal of $41 thousand in 2024. Noninterest income totaled $14.5 million for the first nine months of 2025 compared to $13.4 million for the same period of 2024, an increase of 8.1%. The growth was due primarily to an increase in wealth management fees, loan charges, and a refund on state sales taxes. Noninterest expense for the nine months of 2025 was $44.1 million compared to $41.2 million for the same period of 2024 (an increase of 6.1%). As compared to the 2024 year-to-date period, salaries and employee benefits (primarily health insurance), legal and professional fees, and data processing fees increased, but were partially offset by a decrease in marketing costs. The effective federal income tax rate was 19.2% for the nine months of 2025 and 16.9% for the same period in 2024. Additional information on the Corporation is available on our website at: www.franklinfin.com/Presentations. Franklin Financial is the largest independent, locally owned and operated bank holding company headquartered in Franklin County with assets of $2.3 billion. Its wholly-owned subsidiary, F&M Trust, has twenty-three community banking locations in Franklin, Cumberland, Dauphin, Fulton and Huntingdon Counties PA, and Washington County MD. Franklin Financial stock is trading on the Nasdaq Stock Market under the symbol FRAF. Please visit our website for more information, www.franklinfin.com. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company's consolidated financial statements when filed with the Securities and Exchange Commission ("SEC''). Accordingly, the financial information in this announcement is subject to change . Certain statements appearing herein which are not historical in natur e are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of I 995. Such forward-looking statements refer to a future period or periods, reflecting management 's current views as to likely future developments, and use words "may," "will," "expect," "believe," "estimate," "anticipate," or similar terms. Because forward-looking statements involve certain risks, uncertainties and other factors over which Franklin Financial Services Corporation has no direct control, actual results could differ materially from those contemplated in such statements. These factors include (but are not limited to) the following: changes in interest rates, changes in the rate of inflation, general economic conditions and their effect on the Corporation and our customers, changes in the Corporation's cost of funds, changes in government monetary policy, changes in government regulation and taxation of financial institutions, changes in te c hnology , the intensification of competition within the Corporation's market area, and other similar factors. W e caution readers not to place undue reliance on these forward-looking statements. They only reflect management's analysis as of this date . The Corporation does not revise or update these forward-looking statements to reflect eve nts or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and any Current Reports on Form 8- K. GAAP versus non-GAAP Presentations – The Corporation supplements its traditional GAAP measurements with certain non-GAAP measurements to evaluate its performance and to eliminate the effect of intangible assets. By eliminating intangible assets (Goodwill), the Corporation believes it presents a measurement that is comparable to companies that have no intangible assets or to companies that have eliminated intangible assets in similar calculations. However, not all companies may use the same calculation method for each measurement. The non-GAAP measurements are not intended to be used as a substitute for the related GAAP measurements. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. In the event of such a disclosure or release, the Securities and Exchange Commission's Regulation G requires: (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP. The following table shows the calculation of the non-GAAP measurements. View original content to download multimedia:https://www.prnewswire.com/news-releases/franklin-financial-reports-third-quarter-and-year-to-date-2025-results-declares-dividend-302597309.html

Shares of Franklin Financial Services Corporation FRAF have declined 6.2% since reporting results for the second quarter of 2025 on July 22. In contrast, the S&P 500 index has risen 0.9% over the same period. Despite this post-earnings dip, FRAF has seen a significant rally of 23.7% over the past month compared with 3.9% growth in the S&P 500. Franklin Financial delivered strong second-quarter results, with net income surging 94.8% year over year to $5.9 million, or $1.32 per diluted share, from $3 million, or 66 cents per diluted share, in the prior-year period. Revenue growth was driven largely by a 21.3% increase in net interest income to $17.2 million from $14.2 million a year earlier. The gains were primarily attributed to higher interest income from the expanding loan portfolio. For the first half of 2025, net income rose 53.7% to $9.8 million ($2.20 per diluted share) from the $6.4 million ($1.43 per diluted share) registered in the first six months of 2024. Net interest income for the six months rose 18.3% to $32.8 million, underpinned by a 13.2% increase in commercial real estate loans. Franklin Financial Services Corp. price-consensus-eps-surprise-chart | Franklin Financial Services Corp. Quote Franklin Financial's balance sheet reflected healthy expansion. Total assets climbed 4.1% from the end of 2024 to $2.29 billion as of June 30, 2025. Loan growth was particularly strong, with total net loans rising 8.7% over the six months to $1.5 billion. The loan expansion was led by a $68.9-million increase in commercial real estate loans, which now total $872.2 million. Notably, 41% of the CRE portfolio is owner-occupied. Deposits increased 4.3% from Dec. 31, 2024, to $1.89 billion at quarter-end. The rise was mainly driven by money management accounts, partially offset by declines in interest-bearing checking and savings balances. Approximately 89% of deposits were either FDIC-insured or collateralized. Shareholders’ equity grew by $12.6 million to $157.4 million, aided by retained earnings of $6.9 million (net) of $2.9 million in dividends. Management emphasized disciplined growth and asset quality management in its commentary. While the company experienced a marked increase in non-performing loans from $266 thousand at the end of 2024 to $10.8 million at the end of the second quarter, this deterioration was largely concentrated in two loans — a $7.4-million construction loan (current on payments) and a $2.9-million hotel loan slated for auction in July. Despite this uptick, the allowance for credit losses held steady at 1.26% of loans. Executives reiterated the bank’s conservative risk approach and highlighted progress in commercial real estate lending and wealth management. Assets under management grew 6.9% year over year to $1.36 billion. The primary driver of the company’s performance was loan portfolio growth, particularly in commercial real estate, which led to a 15.4% year-over-year increase in average loan balances. The yield on interest-earning assets improved to 5.30% in the second quarter from 5.10% in the prior-year period. Meanwhile, deposit costs rose year over year from 1.74% to 1.95% but moderated slightly to 1.90% in the second quarter, suggesting stabilizing funding costs. This helped lift the net interest margin to 3.21% from 2.99% in the same quarter last year. Non-interest income also supported the overall performance, climbing 17.3% to $5.1 million for the quarter, boosted by higher wealth management fees, loan-related charges and a one-time refund on state sales taxes. Operating expenses increased just 0.4% year over year to $14.4 million, indicating cost discipline despite inflationary pressures. Management’s discussion suggests a continued focus on expanding commercial lending and managing credit quality, particularly in response to recent non-performing loan developments. In January 2025, Franklin Financial authorized an open market share repurchase plan for up to 150,000 shares over one year. As of June 30, 6,700 shares had been repurchased under the plan, primarily to fund the dividend reinvestment program. Additionally, the board declared a third-quarter dividend of 33 cents per share, consistent with the second quarter but representing a 3.1% increase over the dividend declared for the third quarter of 2024. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Franklin Financial Services Corp. (FRAF): Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CHAMBERSBURG, Pa., July 22, 2025 /PRNewswire/ -- Franklin Financial Services Corporation (the Corporation) (NASDAQ: FRAF), the bank holding company of F&M Trust (the Bank) headquartered in Chambersburg, PA, reported its second quarter and year-to-date 2025 financial results. A summary of notable operating results as of or for the second quarter ended June 30, 2025, follows: Net Income: $5.9 million ($1.32 per diluted share) compared to $3.0 million ($0.66 per diluted share) for the second quarter of 2024, an increase of 94.8%. Wealth Management: Fees were $2.4 million, an increase of 7.9% from $2.2 million in the second quarter of 2024. Assets under management were $1.4 billion on June 30, 2025. Asset Growth: $2.287 billion in assets on June 30, 2025 compared to $2.198 billion at year-end 2024, an increase of 4.1%. Loan Growth: Total net loans of $1.500 billion on June 30, 2025, an increase of 8.7% from December 31, 2024. Deposit Growth: Total deposits of $1.893 billion on June 30, 2025, an increase of 4.3% from December 31, 2024. Performance Metrics: Return on Average Assets (ROA) 1.04%, Return on Average Equity (ROE) 15.64%, and Net Interest Margin (NIM) of 3.21% on an annualized basis, compared to a ROA of 0.59%, ROE of 9.12%, and NIM of 2.99% for the second quarter of 2024. On July 17, 2025, the Board of Directors declared a $0.33 per share regular quarterly cash dividend for the third quarter of 2025 to be paid on August 27, 2025, to shareholders of record at the close of business on August 1, 2025. A summary of notable operating results as of or for the six months ended June 30, 2025, follows: Net Income: $9.8 million ($2.20 per diluted share) compared to $6.4 million ($1.43 per diluted share) for the six months ended June 30, 2024, an increase of 53.7%. Wealth Management: Fees were $4.6 million, an increase of 8.5% from $4.3 million for the first six months of 2024. Performance Metrics: ROA .89%, ROE 13.27%, and NIM of 3.13% on an annualized basis, compared to a ROA of 0.63%, ROE of 9.71%, and NIM of 2.94% for the comparable period in 2024. Balance Sheet Highlights Total assets on June 30, 2025 were $2.287 billion, up 4.1% from $2.198 billion on December 31, 2024. Significant changes in the balance sheet from December 31, 2024 to June 30, 2025 include: Debt securities available for sale decreased $27.3 million (5.4%) due primarily to paydowns. Net loans increased $119.6 million (8.7%) over the year-end 2024 balance, primarily from an increase of $68.9 million in commercial real estate loans. As of June 30, 2025, commercial real estate (CRE) loans totaled $872.2 million with the largest collateral segments being: apartment buildings ($167.7 million), hotels and motels ($102.3 million), and office buildings ($92.8 million), primarily in the Bank's market area of south-central Pennsylvania. Of the total CRE portfolio, 41.0% was owner-occupied and 59.0% was non-owner occupied. Total deposits increased $77.8 million (4.3%) from year-end 2024. The majority of the growth occurred in money management accounts, which was partially offset by a decrease in interest-bearing checking and savings accounts. For the first six months of 2025, the cost of total deposits was 1.95%, but fell to 1.90% for the second quarter of 2025. On June 30, 2025, the Bank estimated that approximately 89% of its deposits were FDIC insured or collateralized. Shareholders' equity increased $12.6 million to $157.4 million on June 30, 2025 from year-end 2024, and retained earnings increased $6.9 million, net of dividends of $2.9 million, over the same period. The accumulated other comprehensive loss (AOCI) decreased $4.7 million during the first half of 2025 to $30.8 million. On June 30, 2025, the book value of the Corporation's common stock was $35.22 per share and tangible book value(1) increased $2.55 per share since December 31, 2024 to $33.20 per share. In January 2025, an open market repurchase plan was approved to repurchase 150,000 shares over a one-year period and 6,700 shares were repurchased in the first half of 2025 under the approved plan to fund the dividend reinvestment plan. The Bank is considered to be well-capitalized under regulatory guidance as of June 30, 2025. Average interest-earning assets for the first six months of 2025 were $2.146 billion, compared to $1.929 billion for the same period in 2024, an increase of 11.2%. This increase occurred primarily in the loan portfolio which increased 13.2%, driven by a 15.4% ($111.2 million) increase in commercial real estate loans. The yield on earning assets increased from 5.10% in the first half of 2024 to 5.28% for the first six months of 2025 and was 5.30% for the second quarter of 2025. Total deposits averaged $1.852 billion for the first six months of 2025, an increase of $291.1 million (18.7%) over the average balance for the same period in 2024. The cost of total deposits increased from 1.74% for the first six months of 2024 to 1.95% for the first-six months of 2025, but the cost decreased to 1.90% for the second quarter of 2025. Nonperforming loans increased during the second quarter as nonaccrual loans increased from $266 thousand on December 31, 2024, to $10.8 million on June 30, 2025. As a result, the nonperforming loan ratio increased from 0.02% as of December 31, 2024, to 0.71% on June 30, 2025. The nonaccrual loans are comprised primarily of two loans: 1) a $7.4 million construction loan on a mixed-use project, and 2) a $2.9 million hotel loan. The construction loan is current on payments as of June 30, 2025, and the hotel is scheduled for an auction sale in July 2025. Pending a successful auction, the net proceeds are expected to fully satisfy the loan. The allowance for credit loss to loans ratio was 1.26% on June 30, 2025, unchanged from December 31, 2024. The allowance for credit losses (ACL) for unfunded commitments was $2.0 million on June 30, 2025, and December 31, 2024. Income Statement Highlights – Second Quarter Comparison 2025 v. 2024 Net income for the second quarter of 2025 was $5.9 million ($1.32 per diluted share) compared to $3.0 million ($0.66 per diluted share) for the second quarter of 2024, an increase of 94.8%. Net interest income was $17.2 million for the second quarter of 2025 compared to $14.2 million for the second quarter of 2024, an increase of $3.0 million or 21.3%. The improvement was driven primarily by an increase in interest income on the loan portfolio. For the second quarter of 2025, the provision for credit losses on loans was $704 thousand compared to $560 for the same quarter of 2024. The increased provision for credit losses on loans was necessary due to growth in the loan portfolio. The provision for credit losses on unfunded commitments were reversals of $69 thousand and $14 thousand for the second quarters of 2025 and 2024, respectively. Noninterest income totaled $5.1 million for the second quarter of 2025 compared to $4.4 million for the same quarter of 2024, an increase of 17.3%. The growth was due to an increase in wealth management fees, loan charges, and a refund on state sales taxes. Noninterest expense for the second quarter of 2025 was $14.4 million compared to $14.3 million for the second quarter of 2024 (an increase of 0.4%). Salaries and employee benefits increased period over period, but were partially offset by a decrease in marketing costs and other expenses. The effective federal income tax rate was 19.3% for the second quarter of 2025 and 17.6% for the same period in 2024. Income Statement Highlights – Year-to-Date Comparison 2025 v. 2024 Net income for the first six months of 2025 was $9.8 million ($2.20 per diluted share) compared to $6.4 million ($1.43 per diluted share) for the same period in 2024, an increase of 53.7%. Net interest income was $32.8 million for the first six months of 2025 compared to $27.8 million for the same period in 2024, an increase of $5.1 million or 18.3%. The improvement was driven primarily by an increase in interest income on the loan portfolio which was up $6.0 million while interest expense increased only $2.0 million. For the first six months of 2025, the provision for credit losses on loans was $1.5 million compared to $1.1million for the same quarter of 2024. The increased provision for credit losses on loans was necessary due to growth in the loan portfolio. The provision for credit losses on unfunded commitments were reversals of $40 thousand and $52 thousand for the first six months of 2025 and 2024, respectively. Noninterest income totaled $9.7 million for the first six months of 2025 compared to $8.5 million for the same period of 2024, an increase of 13.2%. The growth was due primarily to an increase in wealth management fees, loan charges, and a refund on state sales taxes. Noninterest expense for the first six months of 2025 was $29.0 million compared to $27.6 million for the same period of 2024 (an increase of 4.8%). Salaries and employee benefits (primarily health insurance) and FDIC insurance increased period over period but were partially offset by a decrease in marketing costs. The effective federal income tax rate was 19.0% for the six months of 2025 and 16.6% for the same period in 2024. Additional information on the Corporation is available on our website at: www.franklinfin.com/Presentations. Franklin Financial is the largest independent, locally owned and operated bank holding company headquartered in Franklin County with assets of more than $2.3 billion. Its wholly-owned subsidiary, F&M Trust, has twenty-three community banking locations in Franklin, Cumberland, Dauphin, Fulton and Huntingdon Counties PA, and Washington County MD. Franklin Financial stock is trading on the Nasdaq Stock Market under the symbol FRAF. Please visit our website for more information, www.franklinfin.com. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company's consolidated financial statements when filed with the Securities and Exchange Commission ("SEC''). Accordingly, the financial information in this announcement is subject to change. Certain statements appearing herein which are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of I995. Such forward-looking statements refer to a future period or periods, reflecting management's current views as to likely future developments, and use words "may," "will," "expect," "believe," "estimate," "anticipate," or similar terms. Because forward-looking statements involve certain risks, uncertainties and other factors over which Franklin Financial Services Corporation has no direct control, actual results could differ materially from those contemplated in such statements. These factors include (but are not limited to) the following: changes in interest rates, changes in the rate of inflation, general economic conditions and their effect on the Corporation and our customers, changes in the Corporation's cost of funds, changes in government monetary policy, changes in government regulation and taxation of financial institutions, changes in technology, the intensification of competition within the Corporation's market area, and other similar factors. We caution readers not to place undue reliance on these forward-looking statements. They only reflect management's analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and any Current Reports on Form 8-K. GAAP versus non-GAAP Presentations – The Corporation supplements its traditional GAAP measurements with certain non-GAAP measurements to evaluate its performance and to eliminate the effect of intangible assets. By eliminating intangible assets (Goodwill), the Corporation believes it presents a measurement that is comparable to companies that have no intangible assets or to companies that have eliminated intangible assets in similar calculations. However, not all companies may use the same calculation method for each measurement. The non-GAAP measurements are not intended to be used as a substitute for the related GAAP measurements. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. In the event of such a disclosure or release, the Securities and Exchange Commission's Regulation G requires: (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP. The following table shows the calculation of the non-GAAP measurements. View original content to download multimedia:https://www.prnewswire.com/news-releases/franklin-financial-reports-second-quarter-and-year-to-date-2025-results-declares-dividend-302511217.html SOURCE Franklin Financial Services Corporation

CHAMBERSBURG, Pa., April 29, 2025 /PRNewswire/ -- Franklin Financial Services Corporation (the Corporation) (NASDAQ: FRAF), the bank holding company of F&M Trust (the Bank) headquartered in Chambersburg, PA, reported its first quarter 2025 financial results. A summary of notable operating results as of or for the quarter ended March 31, 2025 follows: Net income for the first quarter of 2025 was $3.9 million ($0.88 per diluted share) compared to $3.4 million ($0.77 per diluted share) for the first quarter of 2024, an increase of 16.7%. Wealth management fees were $2.2 million for the first quarter of 2025, compared to $2.0 million for the first quarter of 2024. For the first quarter of 2025, the provision for credit losses was $779 thousand compared to $500 thousand for the fourth quarter of 2024 and $452 thousand for the first quarter of 2024. The increase in the provision expense was due primarily to loan growth of $57.3 million since year-end 2024. Total assets at March 31, 2025 were $2.257 billion, compared to $2.198 billion at year-end 2024, an increase of 2.7%. Total net loans increased $57.3 million (4.2%) from December 31, 2024. Deposits grew by $51.9 million (2.9%) from prior year-end at a cost of 2.02% for the quarter, compared to a cost of 2.06% for the fourth quarter of 2024. Return on Average Assets (ROA) was 0.72%, Return on Average Equity (ROE) was 10.80% and the Net Interest Margin (NIM) was 3.05% on an annualized basis for the first quarter of 2025, compared to an ROA of 0.67%, ROE of 10.21%, and NIM of 2.88% for the same period in 2024. On April 10, 2025, the Board of Directors declared a $0.33 per share regular quarterly cash dividend for the second quarter of 2025 to be paid on May 28, 2025, to shareholders of record at the close of business on May 2, 2025. This represents a 3.1% increase over the dividend for the first quarter of 2025. Balance Sheet Highlights Total assets at March 31, 2025 were $2.257 billion, up 2.7% from $2.198 billion at December 31, 2024. Significant changes in the balance sheet from December 31, 2024 to March 31, 2025 include: Debt securities available for sale decreased $13.1 million (2.6%) due primarily to paydowns. Net loans increased $57.3 million (4.2%) over the year-end 2024 balance, primarily from an increase of $39.2 million in commercial real estate loans. At March 31, 2025, commercial real estate loans totaled $842.5 million, with the largest collateral segments being: apartment buildings ($166.6 million), hotels and motels ($100.9 million), and office buildings ($92.7 million), primarily in the Bank's market area of south-central Pennsylvania. Total deposits increased $51.9 million (2.9%) from year-end 2024. Money management accounts increased ($57.3 million) and noninterest bearing checking increased $8.6 million. These increases were partially offset by decreases in time deposits and interest-bearing checking accounts. For the first quarter of 2025, the cost of total deposits was 2.02%, compared to 1.70% for the same period in 2024. On March 31, 2025, the Bank, using FDIC Call Report data, estimated that approximately 89% of its deposits were FDIC insured or collateralized. Shareholders' equity increased $6.7 million to $151.4 million at March 31, 2025 from year-end 2024. Retained earnings increased $2.5 million, net of dividends of $1.4 million. The accumulated other comprehensive loss (AOCI) decreased $3.7 million during the first quarter to $31.9 million. On March 31, 2025, the book value of the Corporation's common stock was $33.99 per share and tangible book value (1) was $31.97 per share. In January 2025, an open market repurchase plan was approved by the Board of Directors to repurchase 150,000 shares over a one-year period. No shares were repurchased in the first quarter of 2025 under the approved plan. The Bank is considered to be well-capitalized under regulatory guidance as of March 31, 2025. Average interest-earning assets for the first quarter of 2025 were $2.108 billion compared to $1.920 billion for the first quarter of 2024, an increase of 9.8%. This increase occurred primarily in the loan portfolio which increased 12.2%, driven by a 14.5% ($103.6 million) increase in commercial real estate loans. Total deposits averaged $1.816 billion for the first quarter of 2025, an increase of $278.1 million (18.1%) over the average balance for the first quarter of 2024. The yield on earning assets increased from 5.03% for the first quarter of 2024 to 5.25% in the first quarter of 2025, while the cost of interest-bearing liabilities increased from 2.59% to 2.64% over the same period. Income Statement Highlights Net income for the first quarter of 2025 was $3.9 million ($0.88 per diluted share) compared to $487 thousand ($0.11 per diluted share) for the fourth quarter of 2024 (an increase of 705%) and $3.4 million ($0.77 per diluted share) for the first quarter of 2024, an increase of 16.7%. The results of the fourth quarter of 2024 were affected by a $3.4 million after-tax loss on the sale of investment securities sold as part of partial portfolio restructuring. Net income for the first quarter of 2025 would have been 1.7% higher than the net income for the fourth quarter of 2024 ($3.9 million) if the security loss was excluded (1). Net interest income was $15.6 million for the first quarter of 2025 compared to $15.1 million for the fourth quarter of 2024 and $13.6 million for the first quarter of 2024. The net interest margin (NIM) was 3.05% for the first quarter of 2025 compared to 2.92% in the prior calendar quarter and 2.88% for the first quarter of 2024. For the first quarter of 2025, the provision for credit losses on loans was $750 thousand compared to $451 thousand for the fourth quarter of 2024 and $490 thousand for the first quarter of 2024. The increased provision for loan loss was necessary due to growth in the loan portfolio. The allowance for credit loss (ACL) ratio for loans was 1.27% on March 31, 2025, compared to 1.26% on December 31, 2024. For the first quarter of 2025, the provision for credit losses on unfunded commitments was $29 thousand compared to $49 thousand for the fourth quarter of 2024 and a $38 thousand reversal for the first quarter of 2024. The ACL for unfunded commitments was $2.1 million on March 31, 2025, compared to $2.0 million on December 31, 2024. Noninterest income totaled $4.6 million for the first quarter of 2025 compared to $288 thousand in the fourth quarter of 2024 which was affected by a $4.3 million pre-tax loss on the sale of securities during the fourth quarter of 2024. Excluding the effect of the securities loss, noninterest income for the fourth quarter of 2024 would have been $4.6 million. (1) Compared to the first quarter of 2024, noninterest income increased 8.9% due primarily to an increase in wealth management fees of $189 thousand. Noninterest expense for the first quarter of 2025 was $14.6 million compared to $14.3 million for the fourth quarter of 2024 (an increase of 1.7%) and $13.3 million (an increase of 9.7%) for the first quarter of 2024. Contributing to the increase over the fourth quarter of 2024 were increases in data processing costs and FDIC insurance. Compared to the first quarter of 2024, the increase was driven by salary and benefits, data processing and FDIC insurance expense. The effective federal income tax rate was 18.5% for the first quarter of 2025 and 16.1% for the first quarter of 2024. "Our first quarter results are showing that the work we did in 2023 and 2024, developing the necessary infrastructure to support the strategic growth of the Corporation, and then building loan and deposit balances, growing wealth management assets under management and positioning the balance sheet for success, are showing in the improved financial performance of the Corporation," said Tim Henry, CEO.  "We are pleased to be able to post strong first quarter results as we continue to work to improve our efficiency and profitability across all areas of the Bank." "I retire on May 2nd so this will be my last quarter at the Corporation.  Over the last three months I have had the pleasure to work side by side with Craig Best, our President and incoming CEO, and I am excited for what the Corporation will accomplish going forward under Craig's seasoned leadership." Additional information on the Corporation is available on our website at: www.franklinfin.com/Presentations. Franklin Financial is the largest independent, locally owned and operated bank holding company headquartered in Franklin County with assets of more than $2.3 billion. Its wholly-owned subsidiary, F&M Trust, has twenty-three community banking locations in Franklin, Cumberland, Dauphin, Fulton and Huntingdon Counties PA, and Washington County MD. Franklin Financial stock is trading on the Nasdaq Stock Market under the symbol FRAF. Please visit our website for more information, www.franklinfin.com. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company's consolidated financial statements when filed with the Securities and Exchange Commission ("SEC''). Accordingly, the financial information in this announcement is subject to change. Certain statements appearing herein which are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of I995. Such forward-looking statements refer to a future period or periods, reflecting management's current views as to likely future developments, and use words "may," "will," "expect," "believe," "estimate," "anticipate," or similar terms. Because forward-looking statements involve certain risks, uncertainties and other factors over which Franklin Financial Services Corporation has no direct control, actual results could differ materially from those contemplated in such statements. These factors include (but are not limited to) the following: changes in interest rates, changes in the rate of inflation, general economic conditions and their effect on the Corporation and our customers, changes in the Corporation's cost of funds, changes in government monetary policy, changes in government regulation and taxation of financial institutions, changes in technology, the intensification of competition within the Corporation's market area, and other similar factors. We caution readers not to place undue reliance on these forward-looking statements. They only reflect management's analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and any Current Reports on Form 8-K. GAAP versus non-GAAP Presentations – The Corporation supplements its traditional GAAP measurements with certain non-GAAP measurements to evaluate its performance and to eliminate the effect of intangible assets. By eliminating intangible assets (Goodwill), the Corporation believes it presents a measurement that is comparable to companies that have no intangible assets or to companies that have eliminated intangible assets in similar calculations. However, not all companies may use the same calculation method for each measurement. The non-GAAP measurements are not intended to be used as a substitute for the related GAAP measurements. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. In the event of such a disclosure or release, the Securities and Exchange Commission's Regulation G requires: (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP. The following table shows the calculation of the non-GAAP measurements.   View original content to download multimedia:https://www.prnewswire.com/news-releases/franklin-financial-reports-first-quarter-2025-results-declares-dividend-302440420.html SOURCE Franklin Financial Services Corporation