UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ....... to .......
Commission file number 0-12126
FRANKLIN FINANCIAL SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1440803
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 SOUTH MAIN STREET (P.O. BOX 6010), CHAMBERSBURG,PA 17201-0819
(Address of principal executive officer)
717/264-6116
(Registrant's telephone number, including area code)
_________________________________________________________________
__
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
There were 2,786,046 outstanding shares of the Registrant's
common stock as of April 4, 2000.
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheets 2
as of March 31, 2000 (Unaudited) and
December 31, 1999
Consolidated Statements of 3
Income for the Three Months ended
March 31, 2000 and 1999 (unaudited)
Consolidated Statements of 4
Changes in Shareholders' Equity for the
Three Months ended March 31, 1999
and March 31, 2000 (unaudited)
Consolidated Statements of Cash 5
Flows for the Three Months Ended March 31,
2000 and 1999 (unaudited)
Notes to Consolidated Financial 6
Statements (unaudited)
Item 2 - Management's Discussion and Analysis of 12
Financial Condition and Results of Operations
Item 3 Quantitative and Qualitative Disclosures about
Market Risk 14
PART II - OTHER INFORMATION 14
SIGNATURE PAGE 15
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
March 31 December 31
2000 1999
---------- ----------
ASSETS
Cash and due from banks $12,494 $14,956
Interest bearing deposits in other banks 915 161
Investment securities available for sale 126,937 129,801
Loans, net 292,910 284,084
Premises and equipment, net 5,584 5,513
Other assets 10,772 10,164
-------- --------
Total Assets $449,612 $444,679
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits: (Note 3)
Demand (non-interest bearing) $42,233 $43,297
Savings and Interest checking 157,046 154,537
Time 142,108 135,476
-------- --------
Total Deposits 341,387 333,310
Securities sold under agreements to repurchase 29,132 27,182
Short term borrowings 6,600 12,500
Long term debt 29,695 29,695
Other liabilities 3,121 2,732
-------- --------
Total Liabilities 409,935 405,419
Commitments and Contingencies - -
Shareholders' equity:
Common stock $1 par value per share, 15,000 shares authorized
with 3,045 shares issued and 2,786 and 2,792 shares
outstanding at March 31,2000 and December 31, 1999 respectively. 3,045 3,045
Capital stock without par value, 5,000 shares authorized
with no shares issued or outstanding - -
Additional paid in capital 19,829 19,834
Retained earnings 23,335 22,627
Accumulated other comprehensive income (1,083) (876)
Treasury stock (Note 5) (5,044) (4,938)
Unearned compensation (405) (432)
-------- --------
Total shareholders' equity 39,677 39,260
-------- --------
Total Liabilities and Shareholders' Equity $449,612 $444,679
======== ========
The accompanying notes are an integral part of these statements
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share)
For the Three Months Ended
March 31
2000 1999
----------------------------
INTEREST INCOME
Interest on loans $5,915 $5,387
Interest on deposits in other banks 6 74
Interest and dividends on investments:
Taxable interest 1,266 1,088
Tax exempt interest 573 568
Dividends 78 46
--------- ---------
Total interest income 7,838 7,163
--------- ---------
INTEREST EXPENSE
Interest on deposits 3,195 2,886
Interest on securities sold under agreements to repurchase 365 258
Interest on short term borrowings 177 1
Interest on long term debt 410 422
--------- ---------
Total interest expense 4,147 3,567
--------- ---------
Net interest income 3,691 3,596
Provision for possible loan losses 272 195
--------- ---------
Net-interest income after provision
for possible loan losses 3,419 3,401
--------- ---------
NONINTEREST INCOME
Service charges on loans 102 108
Services charges on deposit accounts 226 218
Investment and trust services fees 644 644
Other service charges and fees 113 84
Securities gains 107 -
--------- ---------
Total noninterest income 1,192 1,054
--------- ---------
NONINTEREST EXPENSE
Salaries and benefits 1,745 1,510
Net occupancy expense 180 168
Furniture and equipment expense 153 168
Advertising 81 76
Legal & professional fees 78 99
Data processing 284 280
Pennsylvania bank shares tax 96 91
Other 520 488
--------- ---------
Total noninterest expense 3,137 2,880
--------- ---------
Income before Federal income taxes 1,474 1,575
--------- ---------
Federal income tax expense 263 296
--------- ---------
Net income $1,211 $1,279
======= =======
Basic earnings per share $0.44 $0.47
Weighted average shares outstanding (000's) 2,724 2,731
Diluted earnings per share $0.44 $0.46
Weighted average shares outstanding (000's) 2,768 2,768
The accompanying notes are an integral part of thes statements.
Consolidated Statements of Changes in Shareholders' Equity
for the three months ended March 31, 2000 and 1999
(Amounts in thousands, except per share data)
Accumulated
Additional Other
Common Paid-in Retained Comprehensive Treasury Unearned
Stock Capital Earnings Income Stock Compensation Total
---------------------------------------------------------------------------------
Balance at December 31, 1998 $3,045 $19,793 $20,562 $1,783 ($4,620) ($662) $39,901
Comprehensive income:
Net income - - 1,279 - - - 1,279
Unrealized holding losses arising
during current period, net of tax - - - (179) - - (179)
Reclassification adjustment for realized
gains included in net income,
net of tax - - - - - - -
-------
Total Comprehensive income 1,100
Cash dividends declared, $.56 per share - - (1,566) - - - (1,566)
Tax benefit of restricted
stock transactions - 10 - - - - 10
Common stock issued under
stock option plans - 6 - - 17 - 23
Acqusition of 8,975 shares of
treasury stock - - - - (260) - (260)
Amortization of unearned
compensation - - - - - 27 27
--------------------------------------------------------------------------------------
Balance at March 31, 1999 $3,045 $19,809 $20,275 $1,604 ($4,863) ($635) $39,235
====== ====== ====== ====== ====== ====== ======
Balance at December 31, 1999 $3,045 19,834 22,627 (876) (4,938) (432) $39,260
Comprehensive income:
Net income - - 1,211 - - - 1,211
Unrealized holding losses arising
during current period, net of tax - - - (307) - - (307)
Reclassification adjustment for realized
gains included in net income,
net of tax - - - 89 - - 89
Other comprehensive income,
net of tax - - - 11 - - 11
------
Total Comprehensive income 1,004
Cash dividends declared, $.18 per share - - (503) - - - (503)
Common stock issued under
stock option plans - (5) - - 30 - 25
Tax benefit of restricted stock
transactions - - - - - - 0
Acquisition of 7,900 shares of
treasurer stocks - - - - (136) - (136)
Amortization of unearned
compensation - - - - - 27 27
---------------------------------------------------------------------------------
Balance at March 31, 2000 $3,045 $19,829 $23,335 ($1,083) ($5,044) ($405) $39,677
======= ======= ======= ======= ======= ======= =======
The accompanying notes are an integral part of these statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
For the Three Months Ended
March 31
2000 1999
------- -------
Cash flows from operating activities:
Net Income 1,211 1,279
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 185 202
Net amortization of securities premiums and discounts (3) (211)
Provision for possible loan losses 272 195
Securities gains, net (107) -
Mortgage loans originated for sale (1,723) (4,535)
Proceeds from sale of mortgage loans 1,736 4,537
Principal gain on sales of mortgage loans (13) (2)
Loan charge-offs, net of recoveries (105) (121)
(Increase) in interest receivable and other assets (555) (475)
(Decrease) increase in interest payable and other liabilities 460 (26)
Other, net 25 173
------- -------
Net cash provided by operating activities 1,383 1,016
------- -------
Cash flows from investing activities:
Proceeds from sales of investment securities available for sale 1,317 -
Proceeds from maturities of investment available for sale 3,480 47,761
Purchase of investment securities available for sale (2,154) (40,366)
Net increase in loans (8,992) (2,855)
Capital expenditures (256) (112)
------- -------
Net cash used in investing activities (6,605) 4,428
------- -------
Cash flows from financing activities:
Net increase (decrease) in demand deposits,
NOW accounts and savings accounts 1,446 (379)
Net increase (decrease) in certificates of deposit 6,632 (9,503)
Net decrease in other borrowings (3,950) (2,224)
Dividends paid (503) (448)
Common stock issued under stock option plans 25 23
Purchase of treasury shares (136) (260)
------- -------
Net cash (used in) provided by financing activities 3,514 (12,791)
------- -------
(Decrease) Increase in cash and cash equivalents (1,708) (7,347)
Cash and cash equivalents as of January 1 15,117 24,409
------- -------
Cash and cash equivalents as of March 31 13,409 17,062
======= =======
The accompanying notes are an integral part of these statements.
FRANKLIN FINANCIAL SERVICES CORPORATION and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The consolidated balance sheets as of March 31, 2000 and
December 31, 1999, the consolidated statements of income for the
three-month periods ended March 31, 2000 and 1999, the
consolidated statements of changes in shareholders' equity for
the three months ended March 31, 1999 and March 31, 2000 and the
consolidated statements of cash flows for the three-month periods
ended March 31, 2000 and 1999 have been prepared by the
Corporation, without audit where indicated. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position,
results of operations, and cash flows at March 31, 2000, and for
all periods presented have been made.
The consolidated financial statements include the accounts
of Franklin Financial Services Corporation (the Corporation), and
its wholly-owned subsidiary, Farmers and Merchants Trust Company
of Chambersburg, a commercial bank (the Bank). All significant
intercompany transactions and account balances have been
eliminated.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. It is suggested that these condensed consolidated
financial statements be read in conjunction with the audited
financial statements and notes thereto included in the
Corporation's 1999 Annual Report. The results of operations for
the period ended March 31, 2000, are not necessarily indicative
of the operating results for the full year.
For purposes of reporting cash flows, cash and cash
equivalents include Cash and due from banks, Interest-bearing
deposits in other banks and Federal funds sold. Generally,
Federal funds are purchased and sold for one-day periods.
Supplemental disclosures of cash flows information are as
follows:
Cash paid for three months ended March 31:
2000 1999
Interest paid on deposits, short-term borrowings,
and long-term debt
$3,978,000 $3,636,000
Income taxes paid $ - $ -
Earnings per share is computed based on the weighted average
number of shares outstanding during each quarter, adjusted
retroactively for stock splits and dividends. A reconciliation of
the weighted average shares outstanding used to calculate basic
earnings per share and diluted earnings per share follows:
For the quarter ended
March 31
2000 1999
(Amounts in thousands)
Weighted average shares outstanding (basic) 2,724 2,731
Impact of common stock equivalents, 44 37
primarily stock options
Weighted average shares outstanding (diluted) 2,768 2,768
====== ======
Note 2. Capital Adequacy
Quantitative measures established by regulation to ensure capital adequacy require
financial institutions to maintain minimum amounts and ratios of total and Tier I
capital to risk-weighted assets and of Tier I capital to average assets. The Capital
ratios of the Corporation and its bank subsidiary are as follows:
As of March 31, 2000 (unaudited)
To be well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
(Amounts in thousands) Amount Ratio Amount Ratio Amount Ratio
Total Capital (to Risk Weighted Assets)
Corporation $43,322 13.85% $25,018 8.00% N/A
Bank 39,778 12.82% 24,828 8.00% $31,035 10.00%
Tier I Capital (to Risk Weighted Assets)
Corporation $39,413 12.60% $12,509 4.00% N/A
Bank 35,897 11.57% 12,414 4.00% $18,621 6.00%
Tier I Capital (to Average Assets)
Corporation $39,413 8.89% $17,736 4.00% N/A
Bank 35,897 8.07% 17,792 4.00% $22,240 5.00%
As of December 31, 1999
To be well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
(Amounts in thousands) Amount Ratio Amount Ratio Amount Ratio
Total Capital (to Risk Weighted Assets)
Corporation $42,494 13.89% $24,469 8.00% N/A
Bank 38,930 12.82% 24,298 8.00% $30,373 10.00%
Tier I Capital (to Risk Weighted Assets)
Corporation $38,697 12.65% $12,235 4.00% N/A
Bank 35,133 11.57% 12,149 4.00% $18,224 6.00%
Tier I Capital (to Average Assets)
Corporation $38,697 8.72% $17,755 4.00% N/A
Bank 35,133 7.94% 17,698 4.00% $22,122 5.00%
Note 3 - Deposits
Deposits are summarized as follows (amounts in thousands):
March 31 December 31
2000 1999
---------- ----------
(Unaudited)
Demand $42,233 $43,297
Savings
Interest-bearing checking 41,712 43,845
Money Market Accounts 78,093 75,357
Passbook and Statement Savings 37,241 35,335
-------- --------
$157,046 $154,537
-------- --------
Time
Deposits of $100,000 and over 42,377 34,933
Other Time Deposits 99,731 100,543
-------- --------
142,108 135,476
-------- --------
Total Deposits $341,387 $333,310
======== ========
NOTE 4 - Interest Rate Cap
On September 27, 1999, the Corporation entered into an
interest rate cap transaction as a vehicle to partially hedge net
interest income against the effect of rising market interest
rates. The transaction was effective September 29, 1999, has a
notional amount of $5,000,000, a term of five years, a strike
rate of 6.00% and is indexed to 3-month LIBOR. At March 31,
2000, the cost of the cap was $171,000 and the fair value was
$245,000. Accordingly, a gain of $11,000 net of tax, was
recorded as comprehensive income for the quarter ended March 31,
2000.
NOTE 5 - Stock Repurchase Program
On March 2, 2000, the Board of Directors authorized the
repurchase of up to 75,000 shares of the Corporation's $1.00 par
value common stock. The repurchases are authorized to be made
from time to time during the next 12 months in open market or
privately negotiated transactions. The repurchased shares will
be held as treasury shares available for issuance in connection
with future stock dividends and stock splits, employee benefit
plans, executive compensation plans, and for issuance under the
Dividend Reinvestment Plan and other corporate purposes. During
the first quarter ended March 31, 2000, 7,900 shares of the
Corporation's common stock were repurchased at a cost of
approximately $136,000.
Management's Discussion and Analysis of
Results of Operations and Financial Condition
For the Three Month Periods
Ended March 31, 2000 and 1999
Part 1, Item 2
Results of Operations
The Corporation reported earnings of $1,211,000 for the
first quarter ended March 31, 2000, compared to $1,279,000 for
the first quarter in 1999. Basic earnings per share for the
quarter ended March 31, 2000, were $.44 versus $.47 per share for
the same quarter in 1999; diluted earnings per share were $.44
versus $.46 at March 31, 2000 and 1999, respectively. Per share
earnings are weighted to reflect the impact of the stock
repurchase program. Book value per share equaled $14.23 at March
31, 2000, compared to $14.10 at March 31, 1999.
The Corporation's annualized return on average assets (ROA)
and return on average equity (ROE) for the first quarter of 2000
were 1.09% and 12.55%, respectively, compared to 1.24% and
13.10%, respectively, for the first quarter of 1999. The decline
in ROA is primarily the result of average assets growing faster
than net income. Similarly, a greater decline in net income than
in average assets produced a lower ROE for the first quarter of
2000 versus the same quarter in 1999.
Net interest income recorded a small increase of $95,000, or
2.6%, to $3.7 million for the first quarter ended March 31, 2000,
compared to $3.6 million for the first quarter ended March 31,
1999. Interest income for the first quarter ended March 31,
2000, totaled $7.8 million versus $7.2 million for the first
quarter ended March 31, 1999, an increase of $675,000. Interest
expense for the same period ended March 31, 2000, totaled $4.1
million versus $3.6 million for the quarter ended March 31, 1999,
an increase of $580,000. Although net interest income in
absolute dollars increased period over period, the Corporation's
net interest spread and net interest margin tightened. Interest
spread and net interest margin on a tax-equivalent basis were
3.12% and 3.79%, respectively, for the quarter ended March 31,
2000, compared to 3.31% and 3.95%, respectively, for the quarter
ended March 31, 1999. The shrinking spreads and margins are due
primarily to competitive pressures from other financial and non-
financial institutions and higher market rates. Average interest-
earning assets grew 6.5% to $421.3 million while average interest-
bearing liabilities grew 8.0% to $360.6 million during the first
quarter of 2000 compared to the first quarter of 1999.
The Corporation expensed $272,000 for possible loan losses
in the first quarter of 2000 compared to $195,000 for the first
quarter of 1999. The increase in the loan loss provision is
primarily related to the increase of $1.4 million in nonaccrual
loans.
Total noninterest income equaled $1.2 million for quarter
ended March 31, 2000 and $1.1 million for the same period ended
March 31, 1999. Securities gains totaled $107,000 in the first
quarter of 2000, and accounted for the increase in noninterest
income.
Total noninterest expense equaled $3.1 million for the three
months ended March 31, 2000 compared to $2.9 million for the
three months ended March 31, 1999. Salaries and benefits expense
accounted for most of this increase. Salary expense was up
$85,000 to $1.4 million, an increase of 6.4% from $1.3 million for
the first quarter in 1999. General merit and promotional increases plus
the addition of one senior executive officer were primarily
responsible for the higher salary expense in the first quarter of
2000 versus the first quarter of 1999. Benefit expense increased
13.5% to $344,000 for the first quarter of 2000 and was spread
over all benefit categories. Adversely impacting total salary
and benefit expense was a $68,000 reduction for deferred costs
associated with lower volumes of mortgage loans originated. The
remaining increase of $22,000 in noninterest expense reflects a
net increase in expense over all other categories.
Federal income tax expense for the quarter ended March 31,
2000, totaled $263,000 compared to $296,000 for the same quarter
ended March 31, 1999. The Corporation's effective tax rate for
the quarter ended March 31, 2000, was 17.8% compared to 18.8% for
the quarter ended March 31, 1999. The decrease in the effective
rate quarter versus quarter is primarily due to an increase in
tax-free income relative to pretax net income.
Financial Condition
Total assets were $449.6 million at March 31, 2000, an
increase of $4.9 million, or 1.1%, from $444.7 million at
December 31, 1999. Reflected in total assets for the first
quarter of 2000 from December 31, 1999, was a moderate increase
in net loans, primarily commercial loans, totaling $8.8 million.
Net loans reached $292.9 million at March 31, 2000, from $284.1
million at December 31, 1999. Funding the increase in assets was
an increase in total deposits of $8.1 million to $341.4 million
at March 31, 2000, from $333.3 million at December 31, 1999.
Time deposits were primarily responsible for the increase in
deposits. Additional funding was provided by an increase in
securities sold under agreements to repurchase totaling $1.9
million to $29.1 million at March 31, 2000 from $27.2 million at
December 31, 1999. The excess funding provided by deposit
growth and matured investments not needed to fund loans, was used
to pay-down short-term borrowings to $6.6 million at March 31,
2000, from $12.5 million at March 31, 1999.
Total shareholders' equity increased only slightly by
$417,000 to $39.7 million at March 31, 2000, from $39.3 million
at December 31, 1999. An increase in retained earnings of $708,000
was partially offset by higher accumulated other comprehensive income
(loss) ($207,000) and additions to Treasury stock ($106,000).
Cash dividends declared in the first quarter ended March 31, 2000 totaled
approximately $503,000 compared to $1.57 million in the first
quarter ended March 31, 1999. Cash dividends declared in the
first quarter of 1999 include a special cash dividend of $.40 per
share. Capital adequacy is currently defined by regulatory
agencies through the use of several minimum required ratios. At
March 31, 2000, the Corporation was determined to be well
capitalized as defined by the banking regulatory agencies. The
Corporation's leverage ratio, Tier I and Tier II risk-based
capital ratios at March 31, 2000, were 8.89 %, 12.60 % and 13.85
%, respectively. For more information refer to Note 2 of the
financial statements.
Net charge-offs for the first quarter ended March 31, 2000,
totaled $105,000 compared to $121,000 for the first quarter of
1999. The charge-offs continue to occur primarily in the
Corporation's consumer loan portfolio. The slowing of net charge-
offs experienced in 1999 has continued into 2000. The annualized
ratio of net charge-offs to average loans was .14% at March 31,
2000, versus .19% at December 31, 1999.
Nonperforming loans were down $415,000 to $3.2 million at
March 31, 2000 from $3.6 million at December 31, 1999. Included
in nonperforming loans at March 31, 2000, were nonaccrual loans
totaling $2.9 million and loans past due 90 days or more totaling
$263,000 compared to $3.1 million and $451,000, respectively, at
December 31, 1999. The Corporation recorded other real estate
(ORE) equaling $297,000 at March 31, 2000 versus $306,000 at
December 31, 1999. Nonperforming assets represented .78% of
total assets at March 31, 2000 compared to .87% at December 31,
1999.
The allowance for possible loan losses totaled $4.0 million
at March 31, 2000, compared to $3.9 million at December 31, 1999.
The allowance represented 1.36% and 1.34%, respectively, of total
loans at March 31, 2000 and December 31, 1999. The allowance
provided coverage for nonperforming loans at a rate of 1.25 times
at March 31, 2000.
The local economy remains basically unchanged from year-end
1999. Unemployment remains low due primarily to a well-
diversified business and industrial community.
Liquidity
The Corporation's liquidity position (net cash, short-term
and marketable assets divided by net deposits and short-term
liabilities) was 29.3% at March 31, 2000. The Corporation had
advances outstanding totaling $36.3 million with the Federal Home
Loan Bank of Pittsburgh (FHLB) at March 31, 2000. The
Corporation has term and overnight borrowings with FHLB.
Currently, the maximum borrowing capacity for the Corporation
with FHLB is approximately$106.9 million. Management believes
that liquidity is adequate to meet the borrowing and deposit
needs of its customers.
PART I, Item 3
Qualitative and Quantitative Disclosures about Market Risk
There were no material changes in the Corporation's exposure
to market risk during the first quarter ended March 31, 2000.
For more information on market rate risk refer to the
Corporation's 1999 10-K.
PART II - Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults by the Company on its Senior Securities
None
Item 4. Results of Votes of Security Holders
None
Item 5. Other Information
None
Item 6a. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
A Form 8-K dated March 2, 2000, was filed in
connection with a stock repurchase program.
FRANKLIN FINANCIAL SERVICES CORPORATION
and SUBSIDIARY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Franklin Financial Services Corporation
April 27, 2000 /s/ William E. Snell, Jr.
William E. Snell Jr.
President and
Chief Executive Officer
April 27, 2000 /s/ Elaine G. Meyers
Elaine G. Meyers
Treasurer and
Chief Financial Officer