Franklin Financial Reports First Quarter 2026 Results; Declares Dividend

Franklin Financial Reports First Quarter 2026 Results; Declares Dividend 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:

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:

Income Statement Highlights – First Quarter 2026 v. 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.

FRANKLIN FINANCIAL SERVICES CORPORATION (unaudited)

Income Statement

For the Three Months Ended

(Dollars in thousands, except per share data)

3/31/2026

12/31/2025

3/31/2025

Interest income

Loans, including fees

22,567

23,014

19,864

Interest and dividends on investments:

Taxable interest

3,616

3,964

4,825

Tax exempt interest

266

267

270

Dividend income

202

191

Interest-earning deposits in other banks

1,119

1,593

1,908

Total interest income

27,770

29,040

27,058

Interest expense

Deposits

6,887

8,010

9,030

FHLB overnight borrowings and advances

2,157

2,206

2,158

Subordinate notes

205

212

264

Total interest expense

9,249

10,428

11,452

Net interest income

18,521

18,612

15,606

Provision for credit losses - loans

202

326

750

Provision for credit losses - unfunded commitments

(37)

Total provision for credit losses

221

289

779

Net interest income after credit loss expense

18,300

18,323

14,827

Noninterest income

Wealth management fees

2,306

2,272

2,215

Loan service charges

238

209

Gain on sale of loans

318

260

109

Deposit service charges and fees

647

655

605

Other service charges and fees

482

484

483

Debit card income

618

597

558

Increase in cash surrender value of life insurance

132

124

115

Change in fair value of equity securities

—

(7)

Other

619

275

Total noninterest income

5,360

4,700

4,562

Noninterest Expense

Salaries

6,237

6,550

6,176

Employee benefits

2,788

2,277

2,330

Net occupancy

1,241

1,179

1,225

Marketing and advertising

426

502

433

Legal and professional

695

780

527

Data processing

1,540

1,578

1,557

Pennsylvania bank shares tax

254

137

160

FDIC Insurance

483

531

545

ATM/debit card processing

377

357

340

Telecommunications

135

131

106

Other

1,177

1,521

1,178

Total noninterest expense

15,353

15,543

14,577

Income before income taxes

8,307

7,480

4,812

Income tax expense

1,670

1,437

890

Net income

6,637

6,043

3,922

Per share

Basic earnings per share

1.48

1.36

0.88

Diluted earnings per share

1.48

1.35

0.88

Consolidated Balance Sheet (as of)

3/31/2026

12/31/2025

3/31/2025

(Dollars in thousands, except per share data)

Assets

Cash and due from banks

23,976

22,446

23,277

Short-term interest-earning deposits in other banks

186,801

105,275

201,679

Total cash and cash equivalents

210,777

127,721

224,956

Long-term interest-earning deposits in other banks

750

999

1,249

Debt securities available for sale, at fair value

436,483

454,586

495,487

Restricted stock

8,897

8,765

Loans held for sale

1,850

18,929

1,791

Loans

1,572,426

1,561,238

1,456,191

Allowance for credit losses

(20,729)

(20,655)

(18,444)

Net Loans

1,551,697

1,540,583

1,437,747

Other assets

87,064

87,303

87,483

Total assets

2,297,518

2,239,018

2,257,478

Liabilities

Deposits

Noninterest-bearing checking

331,658

310,251

298,945

Money management, savings, and interest checking

1,319,494

1,301,198

1,257,102

Time

238,558

224,323

311,530

Total deposits

1,889,710

1,835,772

1,867,577

Federal Home Loan Bank advances

200,000

Subordinate notes

10,850

10,845

19,710

Other liabilities

18,214

17,159

18,800

Total liabilities

2,118,774

2,063,776

2,106,087

Shareholders' equity

Common Stock

4,711

Additional paid-in capital

43,776

43,932

43,607

Retained earnings

160,001

154,844

141,967

Accumulated other comprehensive loss

(23,265)

(21,589)

(31,856)

Treasury stock

(6,479)

(6,656)

(7,038)

Total shareholders' equity

178,744

175,242

151,391

Total liabilities and shareholders' equity

2,297,518

2,239,018

2,257,478

Assets Under Management as of (fair value)

3/31/2026

12/31/2025

3/31/2025

Wealth Management

1,271,068

1,273,421

1,183,180

Held at third party brokers

145,477

147,880

139,918

Total assets under management

1,416,545

1,421,301

1,323,098

Key performance ratios as of or for the period ended as shown:

As of or for the Three Months Ended

Performance Measurements

3/31/2026

12/31/2025

3/31/2025

Return on average assets*

1.20 %

1.05 %

0.72 %

Return on average equity*

15.13 %

14.20 %

10.80 %

Efficiency ratio (1)

63.64 %

66.05 %

71.39 %

Net interest margin*

3.53 %

3.40 %

3.05 %

Shareholders' Value (per common share)

Diluted earnings per share

1.48

1.35

0.88

Regular cash dividend paid

0.33

0.32

Dividend payout ratio

22.30 %

27.54 %

36.16 %

Book value, per share

39.78

39.11

33.99

Tangible book value (1)

37.78

37.10

31.97

Market value, per share

51.08

50.20

35.45

Market value/book value ratio

128.40 %

128.36 %

104.30 %

Market value/tangible book value ratio

135.22 %

135.33 %

110.90 %

Price/earnings multiple*

8.63

9.30

10.07

Current quarter dividend yield*

2.58 %

2.63 %

3.61 %

Safety and Soundness

Net loans recovered (charged-off)/average loans*

-0.03 %

0.00 %

0.01 %

Nonperforming loans / gross loans

0.54 %

0.55 %

0.02 %

Nonperforming assets / total assets

0.37 %

0.38 %

0.01 %

Allowance for credit losses / loans

1.32 %

1.27 %

* Annualized

(1) Non-GAAP measurement. See GAAP versus Non-GAAP disclosure reconciliation

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.

Non-GAAP

(Dollars in thousands, except per share)

As of

3/31/2026

12/31/2025

3/31/2025

Tangible Book Value (per share) (non-GAAP)

Shareholders' equity

178,744

175,242

151,391

Less intangible assets

(9,016)

Tangible book value (non-GAAP)

169,728

166,226

142,375

Shares outstanding (in thousands)

4,493

4,481

4,454

Tangible book value per share (non-GAAP)

37.78

37.10

31.97

For the three months ended

Efficiency Ratio (non-GAAP)

3/31/2026

12/31/2025

3/31/2025

Noninterest expense

15,353

15,543

14,577

Net interest income

18,521

18,612

15,606

Plus tax equivalent adjustment to net interest income

245

221

251

Plus noninterest income, net of securities gains/losses

5,360

4,700

4,562

Total revenue

24,126

23,533

20,419

Efficiency ratio: noninterest expense /total revenue (non-GAAP)

63.64 %

66.05 %

71.39 %

SOURCE Franklin Financial Services Corporation