Franklin Financial Services Reports $11.1M Net Income for Fiscal Year 2024

Franklin Financial Services Corporation reported a net income of $11.1 million, or $2.51 per diluted share, for the fiscal year ending December 31, 2024, a decrease from the $13.6 million, or $3.10 per diluted share, recorded in 2023. The company's total assets increased by 19.7% to approximately $2.2 billion, up from $1.8 billion the previous year. This growth was primarily driven by a significant rise in the loan portfolio, which expanded by 11.2% to $1.4 billion, largely due to increases in commercial real estate and residential mortgage loans. Net interest income also saw a year-over-year increase of 7.2%, totaling $57.5 million, although the net interest margin declined to 2.95% from 3.31% in 2023.

In terms of operational changes, Franklin Financial Services experienced a notable increase in total deposits, which rose by 18.1% to $1.8 billion, with significant contributions from time deposits and money management accounts. The bank's provision for credit losses on loans decreased to $2.0 million from $2.6 million in the prior year, reflecting a stable credit quality environment. The allowance for credit losses as a percentage of total loans remained relatively consistent at 1.26% as of December 31, 2024, compared to 1.28% the previous year.

Strategically, the bank has focused on enhancing its wealth management services, which contributed to a 13.7% increase in wealth management fees, totaling $8.5 million for 2024. However, noninterest income overall decreased to $13.7 million from $14.9 million in 2023, primarily due to a loss on the sale of securities as part of a portfolio restructuring. The bank's employee engagement remained strong, with a participation rate of 94% in the annual employee engagement survey, reflecting a commitment to maintaining a positive workplace culture.

Looking ahead, Franklin Financial Services is optimistic about its growth trajectory, particularly in its primary market areas of south-central Pennsylvania and Maryland. The bank plans to continue leveraging its community-oriented approach to banking while navigating the competitive landscape that includes both traditional banks and nonbanking financial institutions. Management remains vigilant regarding interest rate fluctuations and their potential impact on net interest income, as well as the overall economic conditions that could affect loan performance and credit quality.

In summary, while Franklin Financial Services Corporation faced challenges in profitability and noninterest income, it demonstrated solid growth in assets and deposits, alongside a strategic focus on wealth management and employee engagement. The bank's outlook remains positive as it aims to capitalize on its community banking strengths and adapt to evolving market conditions.