Franklin Financial Services : FRAF Investor Presentation - May 2024

Investor Presentation

First Quarter 2024 Highlights

Forward Looking Statements

Certain statements appearing herein which are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements refer to a future period or periods, reflecting management's current views as to likely future developments, and use words "may," "will," "expect," "believe," "estimate," "anticipate," or similar terms. Because forward-looking statements involve certain risks, uncertainties and other factors over which Franklin Financial Services Corporation has no direct control, actual results could differ materially from those contemplated in such statements. These factors include (but are not limited to) the following: general economic conditions particularly with regard to the negative impact of severe, wide-ranging and continuing disruptions caused by the spread of the coronavirus COVID-19 pandemic and responses thereto, changes in interest rates, changes in the Corporation's cost of funds, changes in government monetary policy, changes in government regulation and taxation of financial institutions, changes in the rate of inflation, changes in technology, the intensification of competition within the Corporation's market area, and other similar factors.

We caution readers not to place undue reliance on these forward-looking statements. They only reflect management's analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and any Current Reports on Form 8-K.

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CEO Comments

In the first quarter of 2024, Franklin Financial Services corporation was able to mark several financial highlights as total assets for the company exceeded $2.0 billion and brokerage and trust assets under management climbed to $1.26 billion. These high points came as the result of the continuation of execution under the plans developed in 2023 as the company continues to respond to the changing financial and economic conditions around us.

The company continues to see both loan and deposit growth, however net interest margin (NIM) has contracted due to steadily climbing deposit rates. In the first quarter, the Bank took down an FHLB borrowing at 4.31% which will be used to support future loan growth. The borrowing supports the bank's liquidity at a rate that, now three months later, is favorable to the company, and we should see NIM expand as the proceeds are loaned out at current market rates. Credit quality continues to be strong, however the company is maintaining loan loss reserves at year-end levels to protect against any surprises. At the end of the first quarter, we agreed to purchase land and construct our first community office in Dauphin County, PA, which will complement our regional headquarters. The community office, which is only 1,700 square feet, will support our team of financial professionals serving the area while also providing innovative ways to support the transactional needs of our customers.

As we move forward in 2024, we continue to have confidence in the path we have chosen as we work to grow loan and deposit balances, both in our core and expanded markets. Separately, but in tandem with our loan and deposit teams, we continue to build fee income through our wealth management and residential mortgage services. In challenging economic times, there are still opportunities for improved performance, and we are actively searching for and taking advantage of them.

Thank you for your continued support.

Sincerely,

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Mission, Vision & Core Values

Mission Statement

Delivering the right financial solutions from people you know and trust.

Vision

We are committed to remaining independent by growing our bank to meet the increasing needs of our employees, customers, communities, and shareholders. We strive to be a financial services leader in the markets we serve.

Core Values

The employees, officers and directors are committed to the core values of integrity, teamwork, excellence, accountability, and concern for our customers and the communities we serve.

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Overview of Franklin Financial

• Franklin Financial, which was formed in 1983, is a holding company headquartered in Franklin County, PA
• Franklin Financial's wholly-owned subsidiary, F&M Trust, was founded in Chambersburg, PA in 1906
• Total assets of the Company were $2.01 billion as of March 31, 2024
• As of March 31, 2024, Franklin Financial reported $1.26 billion in brokerage and trust assets under management
• Franklin Financial stock is trading on the Nasdaq Stock Market (NASDAQ: FRAF)

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Trade Area Expansion

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Experienced and Cohesive Executive Team

Executive	Title	Years of Banking	Joined F&M Trust	Prior Experience
Experience
Timothy G. Henry	President & Chief Executive Officer	42	2016	Fulton, Centra Bank, BlueRidge Bank,
Susquehanna Bank, BB&T
Mark R. Hollar	Executive Vice President, Chief Financial Officer & Treasurer	36	1994	ValleyBank & Trust
Charles B. Carroll, Jr.	Executive Vice President, Chief Operating Officer	30	2023	S&T Bank, FirstMerit / Huntington
National Bank, BBVA Compass
Lorie Heckman	Senior Vice President, Chief Risk Officer	38	1986
Steven D. Butz	Senior Vice President, Chief Commercial Services Officer	39	2013	PNC, Waypoint, Sovereign, Graystone
Tower, Susquehanna Bank
Scott Ehrig, CFP, CIMA	Senior Vice President, Chief Wealth Management Officer	31	2020	FMA Advisory, Wilmington Trust, M&T
Investment Group, JP Morgan

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Experienced and Cohesive Executive Team

Executive	Title	Years of Banking	Joined F&M Trust	Prior Experience
Experience
Louis J. Giustini	Senior Vice President, Chief Retail Services Officer	36	2022	Hagerstown Trust, Columbia Bank,
Fulton Bank
Karen K. Carmack, DM	Senior Vice President, Chief Human Resources Officer	29	2000	ACNB
Matthew D. Weaver	Senior Vice President, Chief Marketing Officer	24	2014	Susquehanna Bank,
Clifton LarsonAllen, IMRE
David Long	Senior Vice President, Chief Technology Officer	17	2022	Howard Bank

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A Year of Growth

SELECTED HIGHLIGHTS	GROWTH
PERCENTAGE
Total Assets	+9.6%

Net Loans	+1.7%

Assets Under	+2.4%
Management

KEY STATISTICS

$2.012 Billion as of 3/31/2024 $1.836 Billion as of 12/31/2023

$1.261 Billion as of 3/31/2024 $1.240 Billion as of 12/31/2023

$1.259 Billion as of 3/31/2024 $1.230 Billion as of 12/31/2023

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Non-InterestIncome (Dollars in thousands)

2024

24%

$16.0 MM

48%

13%

14%

1%

			Q1 2024	Q1 2023	Change
		Wealth Management Fees	2,026	1,834	192
		Gain on Sale of Loans	58	73	(15)
		Deposit Service Fees	613	583	30
		Debit Card Income	536	502	34
		Other	996	859	120
Total1	4,229	3,851	378

1 Excludes net securities gains/losses

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