UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
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 25-1440
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 South Main Street, P. O. Box T, Chambersburg, PA 17201-0819
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (717) 264-6116
Securities registered pursuant to Section 12(b) of the Act:
Names of each exchange on
Title of each class which registered
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $1.00 par value per share
(Title of Class)
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 periods that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
of the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
The aggregate market value of the 1,633,209 shares of the
Registrant's common stock held by nonaffiliates of the Registrant
as of March 1, 1996, based on the average of the bid and asked
price for such shares, was $46,138,154.25.
APPLICABLE ONLY TO REGISTRANTS 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 Section 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 REGISTRANTS)
Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of the latest practicable
date.
There were 2,030,465 outstanding shares of the Registrant's
common stock as of March 1, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
(1)Portions of the annual report to stockholders for the year
ended December 31, 1995, are incorporated by reference into Part
I and Part II.
(2)Portions of the definitive annual proxy statement to be
filed, pursuant to Reg. 14A within 120 days after December 31,
1995, are incorporated into Part III.
FRANKLIN FINANCIAL SERVICES CORPORATION
FORM 10-K
INDEX
Part I
Page
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . 15
Item 3. Legal Proceedings . . . . . . . . . . .. . . . . . . . . . . 15
Item 4. Submission of Matters to a Vote of Security Holders . . . . . 15
Part II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters . . . . . . . . . . . . . . . . 15
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . 15
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 16
Item 8. Financial Statements and Supplementary Data . . . . .. . . . 16
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . . . 16
Part III
Item 10. Directors and Executive Officers of the Registrant . . . . . 16
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . 17
Item 12. Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . . . . . . . . 17
Item 13. Certain Relationships and Related Transactions . . . . . . . 17
Part IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . 18
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Index of Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
PART I
ITEM 1. Business
General
Franklin Financial Services Corporation (the "Corporation")
was organized as a Pennsylvania business corporation on June 1,
1983 and is a registered bank holding company under the Bank
Holding Company Act of 1956, as amended (the "BHCA"). On January
16, 1984, pursuant to a plan of reorganization approved by the
shareholders of Farmers and Merchants Trust Company of
Chambersburg ("F&M Trust" or "the Bank") and the appropriate
regulatory agencies, the Corporation acquired all the shares of
F&M Trust and issued its own shares to former F&M Trust
shareholders on a share-for-share basis.
On May 1, 1995, the Mont Alto State Bank, also a commercial
bank and a subsidiary of the Corporation, was merged into Farmers
and Merchants Trust Company. In addition, on December 29, 1995,
Franklin Founders Life Insurance Company, a credit life
reinsurance company and a subsidiary of the Corporation, was
liquidated.
The Corporation conducts all of its business through its
only direct subsidiary, F&M Trust, which is wholly-owned. F&M
Trust, established in 1906, is a full-service, Pennsylvania-chartered
commercial bank and trust company which is not a member
of the Federal Reserve System. The bank, which operates eight
full service offices in Franklin County, Pennsylvania, engages in
general commercial, retail banking and trust services normally
associated with community banks and the deposits are insured (up
to applicable limits) by the Federal Deposit Insurance
Corporation ("the FDIC"). A wide variety of banking services are
offered by F & M Trust to businesses, individuals, and
governmental entities. These services include, but are not
necessarily limited to, accepting and maintaining checking,
savings, and time deposit accounts, offering certificates of
deposit in various forms and at various interest rates, providing
mortgage and trust services, making loans and providing safe
deposit facilities.
None of the Corporation's subsidiaries are dependent upon a
single customer or a few customers for a material part of their
business. Thus, the loss of any customer or identifiable group
of customers would not materially affect the business of any
affiliate in an adverse manner. Also, none of the Corporation's
business is seasonal.
The Bank's lending activities consist primarily of
commercial, agricultural and industrial loans, installment and
revolving loans to consumers, residential mortgage loans, and
construction loans. Secured and unsecured commercial and
industrial loans, including accounts receivable, inventory
financing and commercial equipment financing, are made to small
and medium-sized businesses, individuals, governmental entities,
and non-profit organizations. F&M Trust also participates in the
Pennsylvania Higher Education Assistance Act student loan program
and the Pennsylvania Housing Finance Agency program.
Installment loans involve both direct loans to consumers and
the purchase of consumer obligations from dealers and others who
have sold or financed the purchase of merchandise, including
automobiles and mobile homes, to their customers on time. The
Bank's mortgage loans include long-term loans to individuals and
to businesses secured by mortgages on the borrower's real
property. Construction loans are made to finance the purchase of
land and the construction of buildings thereon, and are secured
by short-term mortgages on real estate. In certain situations,
the Bank acquires properties through foreclosure on delinquent
loans. The Bank holds these properties until such time as they
are in a marketable condition and a buyer can be obtained.
F&M Trust's Trust Department offers all of the personal and
corporate trust services normally associated with trust
departments of area banks, including estate planning and
administration, corporate and personal trust fund management,
pension, profit sharing and other employee benefits funds
management, custodial services, and trustee services for publicly
issued debentures.
Competition
The Corporation and its subsidiary operate in a competitive
environment that has intensified in the past few years as they
have been compelled to share their market with institutions that
are not subject to the regulatory restrictions on domestic banks
and bank holding companies. Profit margins in the traditional
banking business of lending and deposit gathering have declined
as deregulation has allowed nonbanking institutions to offer
alternative services to many of F&M Trust's customers.
The principal market of F&M Trust is in Franklin County,
Pennsylvania. Nine commercial bank competitors of F&M Trust have
offices in Franklin County, in addition to credit unions, savings
and loan associations, mortgage banks, brokerage firms and other
competitors. F&M trust is the largest locally owned financial
institution in its principal market and had total assets of
approximately $313,000,000 at December 31, 1995.
All of the local commercial bank competitors of the
corporation are subsidiaries of bank holding companies. The
largest of these bank holding companies had consolidated assets
of approximately $61,000,000,000 at December 31, 1995. The
Corporation would rank sixth in size of the ten consolidated bank
holding companies having branches in Franklin County.
Staff
As of December 31, 1995, the Corporation and its subsidiary
had 145 full-time employees and 43 part-time employees. Most
employees participate in pension, profit sharing/bonus, and
employee stock purchase plans and are provided with group life,
health and major medical insurance. Management considers
employee relations to be excellent.
Supervision and Regulation
Various requirements and restrictions under the laws of the
United States and under Pennsylvania law affect the Corporation
and F&M Trust.
General
The Corporation is registered as a bank holding company
subject to supervision and regulation by the Board of Governors
of the Federal Reserve System (the "Federal Reserve Board") under
the BHCA, as amended. As a bank holding company, the
Corporation's activities and those of its banking and nonbanking
subsidiaries are limited to the business of banking and
activities closely related or incidental to banking. Bank
holding companies are required to file periodic reports with and
are subject to examination by the Federal Reserve Board. The
Federal Reserve Board has issued regulations under the BHCA that
require a bank holding company to serve as a source of financial
and managerial strength to its subsidiary banks. As a result,
the Federal Reserve Board, pursuant to such regulations may
require the Corporation to stand ready to use its resources to
provide adequate capital funds to its banking subsidiaries during
periods of financial stress or adversity.
The BHCA prohibits the Corporation from acquiring direct or
indirect control of more than 5% of the outstanding shares of any
class of voting stock or substantially all of the assets of any
bank or merging or consolidating with another bank holding
company without prior approval of the Federal Reserve Board.
Similar restrictions currently apply to acquisition of control of
shares of stock of the Corporation or its banking subsidiaries by
other bank holding companies. Additionally, the BHCA prohibits
the Corporation from engaging in or from acquiring ownership or
control of more than 5% of the outstanding shares of any class of
voting stock of any company engaged in a nonbanking business,
unless such business is determined by the Federal Reserve Board
to be so closely related to banking as to be a proper incident
thereto.
F&M Trust is not a member of the Federal Reserve System.
Accordingly, its operations are subject to regulation and
examination by the FDIC and by the Pennsylvania Department of
Banking("the PDOB"). F&M Trust is subject to requirements and
restrictions under federal and state law, including requirements
to maintain reserves against deposits, restrictions on the types
and amount of loans that may be granted and the interest that may
be charged thereon, and limitations on the types of investments
that may be made and the types of services that may be offered.
Various consumer laws and regulations also affect the operations
of the Bank. In addition to the impact of regulation, commercial
banks are affected significantly by the actions of the Federal
Reserve Board as it attempts to control the money supply and
credit availability in order to influence the economy.
Capital Adequacy Guidelines
Bank holding companies are required to comply with the
Federal Reserve Board's risk-based capital guidelines. The
required minimum ratio of total capital to risk-weighted assets
(including certain off-balance sheet activities, such as standby
letters of credit) is 8%. At least half of the total capital is
required to be "Tier 1 capital," consisting principally of common
shareholders' equity, noncumulative perpetual preferred stock and
minority interests in the equity accounts of consolidated
subsidiaries, less certain intangible assets (as discussed
below). The remainder ("Tier 2 capital") may consist of a
limited amount of subordinated debt and intermediate-term
preferred stock, certain hybrid capital instruments and other
debt securities, perpetual preferred stock, and a limited amount
of the general loan loss allowance. In addition to the risk-based capital
guidelines, the Federal Reserve Board requires a
bank holding company to comply with the "leverage ratio" under
which the bank holding company must maintain a minimum level of
Tier 1 capital to average total consolidated assets of 3% for
those bank holding companies which have the highest regulatory
examination ratings and are not contemplating or experiencing
significant growth or expansion. All other bank holding
companies are required to maintain a ratio of at least 1% to 2%
above the stated minimum. F&M Trust is subject to similar
capital requirements adopted by the FDIC.
In their risk-based capital guidelines, the Federal banking
agencies are required to take adequate account of interest rate
risk, concentration of credit risk, and risks of nontraditional
activities. In August of 1995, the Federal banking agencies,
including the FDIC, issued a rule modifying their existing risk-based
capital standards to provide for consideration of interest
rate risk when assessing the capital adequacy of an institution.
This new rule implements the first step of a two-step process by
explicitly including a bank's exposure to declines in the value
of its capital due to changes in interest rates as one factor
that the banking agencies will consider in evaluating a bank's
capital adequacy. The new rule does not establish a measurement
framework for assessing a bank's interest rate risk exposure
level. Examiners will use data collected by the banking agencies
to determine the adequacy of an individual bank's capital in
light of interest rate risk. Examiners will also consider
historical financial performance, earnings exposure to interest
rate movements and the adequacy of internal interest rate risk
management, among other things. This case-by-case approach for
assessing a bank's capital adequacy for interest rate risk is
transitional. The second step of the banking agencies' interest
rate risk regulation will be to establish an explicit minimum
capital charge for interest rate risk, based on measured levels
of interest rate risk exposure. The banking agencies will
implement this second step at some future date. The Corporation
is unable to predict the form in which these future regulations
will ultimately be adopted or the effect the new or anticipated
regulations would have on the operations and capital adequacy of
the Bank.
The federal regulators adopted final rules relating to
concentration of credit risk and risks of non-traditional
activities effective on January 17, 1995. The agencies declined
to adopt a quantitative test for concentrations of credit risk
and, instead, provided that such risk would be considered in
addition to other risks in assessing an institution's overall
capital adequacy. Institutions with higher concentration of
credit risk will be required to maintain greater levels of
capital. Similarly, the federal agencies incorporated the
evaluation of the risks of non-traditional activities into the
overall assessment of capital adequacy. The agencies indicated
that proposed rules regarding specific types of non-traditional
activities will be promulgated from time to time.
The Bank is also subject to PDOB capital guidelines.
Although not adopted in regulation form, the PDOB utilizes
capital standards requiring a minimum of 6% leverage capital and
10% risk-based capital. The components of leverage and risk-based capital
are substantially the same as those defined by the FDIC.
In addition, F&M Trust is subject to the FDIC's Prompt
Corrective Action Regulations.
The Federal Deposit Insurance Act (the "FDIA") requires each
Federal banking agency to specify by regulation, the levels at
which an insured institution would be considered "well
capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" and "critically
undercapitalized." Under uniform regulations adopted by the FDIC
and other federal bank regulators, a bank is considered "well
capitalized" if it has: (I) a total risk-based capital ratio of
10% or greater, (ii) Tier 1 risk-based capital ratio of 6% or
greater, (iii) a leverage ratio of 5% or greater, and (iv) is not
subject to any order or written directive to meet and maintain a
specific capital level. An "adequately capitalized" bank is
defined under the regulations as one that has: (I) a total risk-based
capital ratio of 8% or greater, (ii) a Tier 1 risk-based
capital ratio of 4% or greater, (iii) a leverage ratio of 4% or
greater (or 3% or greater in the case of a bank with the highest
composite regulatory examination rating), and (iv) does not meet
the definition of a well-capitalized bank. A bank would be
considered "undercapitalized" if it has (I) a total risk-based
capital ratio less than 8%, (ii) a Tier 1 risk-based capital
ratio of less than 4%, (iii) a leverage ratio of less than 4% (or
3% in the case of a bank with the highest regulatory examination
rating of 1); (B) "significantly undercapitalized" if the bank
has: (I) a total risk-based capital rate of less than 6%, (ii) a
Tier 1 risk-based capital ratio of less than 3%, or (iii) a
leverage ratio of less than 3%; and (C) "critically
undercapitalized" if the bank has a ratio of tangible equity to
total assets of equal to or less than 2%. The applicable federal
bank regulator for a depository institution can, under certain
circumstances, reclassify a "well capitalized" institution as
"adequately capitalized" or require an "adequately capitalized"
or "undercapitalized" institution to comply with supervisory
actions as if it were in the next lower category. Such a
reclassification could be made if the regulatory agency
determines that the institution is in an unsafe or unsound
condition (which could include unsatisfactory examination
ratings). F&M Trust meets the criteria to be considered "well
capitalized" within the meaning of applicable regulations.
Regulatory Restrictions on Dividends
Dividend payments by the Bank to the Corporation are subject
to the Pennsylvania Banking Code of 1965 (the "Banking Code"),
the FDIA, and FDIC regulations. Under the Banking Code, no
dividends may be paid except from "accumulated net earnings"
(generally retained earnings). The Federal Reserve Board, the
Comptroller of the Currency and the FDIC have formal and informal
policies which provide that insured banks and bank holding
companies should generally pay dividends only out of current
operating earnings, with some exceptions. Under the FDIA, no
dividends may be paid by an insured bank if the bank is in
arrears in the payment of any insurance assessment due to the
FDIC. The Prompt Corrective Action rules also limit the payment
of dividends by banks which are not classified as well
capitalized or adequately capitalized.
Under these policies and subject to the restrictions
applicable to the Bank, the Bank could declare, during 1996,
without prior regulatory approval, aggregate dividends of
approximately $5.510 million, plus net profits earned to the date
of such dividend declaration in 1996.
FDIC Insurance Assessments
The FDIC has implemented a risk-related premium schedule for
all insured depository institutions that results in the
assessment of premiums based on capital and supervisory measures.
Under the risk-related premium schedule, the FDIC assigns, on a
semiannual basis, each institution to one of three capital groups
(well-capitalized, adequately capitalized or undercapitalized)
and further assigns such institution to one of three subgroups
within a capital group. The institution's subgroup assignment is
based upon the FDIC's judgment of the institution's strength in
light of supervisory evaluations, including examination reports,
statistical analyses and other information relevant to measuring
the risk posed by the institution. Only institutions with a
total capital to risk-adjusted assets ratio of 10.00% or greater,
a Tier 1 capital to risk-based assets ratio of 6% or greater, and
a Tier 1 leverage ratio of 5.0% or greater, are assigned to the
well-capitalized group. As of December 31, 1995, the Bank was
well capitalized for purposes of calculating insurance
assessments.
In August 1995, the FDIC adopted an amendment to the Bank
Insurance Fund ("BIF") risk-based assessment schedule that lowers
the deposit insurance assessment rate for most (90% or more)
commercial banks and other depositor institutions with deposits
insured by BIF to $.04 per $100 of insured deposits. On
November 14, 1995, the FDIC further reduced the BIF assessment
rates to a range of $.00 per $100 of insured deposits (subject to
a minimum annual premium of $2,000) for those institutions with
the least risk to $0.27 for every $100 of insured deposits for
institutions deemed to have the highest risk, beginning
January 1, 1996. At the same time, the FDIC voted to retain the
existing assessment rates of $.23 for every $100 of deposits for
the members of SAIF in the lowest risk-based premium category and
$0.31 for every $100 of insured deposits for members of SAIF in
the highest risk-based premium category. The Bank is a member of
the BIF; however, as of December 31, 1995 approximately
$23,319,000 of its deposits (representing 9% of total deposits)
related to the acquisition of its Waynesboro branch were insured
by the SAIF and are subject to SAIF rates.
Interstate Banking
Prior to the passage of the Riegle-Neal Interstate Banking
and Branching Efficiency Act of 1994 (the "Interstate Banking
Act"), the BHCA prohibited a bank holding company located in one
state from acquiring a bank located in another state, unless such
an acquisition by an out-of-state bank holding company was
specifically authorized by the law of the state where the bank to
be acquired was located. Similarly, interstate branching was
generally prohibited by the McFadden Act. The Interstate Banking
Act permits an adequately capitalized and adequately managed bank
holding company to acquire a bank in another state, whether or
not the law of that other state permits the acquisition, subject
to certain deposit concentration caps and the approval of the
Federal Reserve Board. In addition, beginning on June 1, 1997,
under the Interstate Banking Act, a bank can engage in interstate
expansion by merging with a bank in another state or acquiring
the assets and liabilities of a bank in another state and also
may consolidate the acquired bank into new branch offices of the
acquiring bank, unless the other state affirmatively opts out of
the legislation before that date. A state may also opt into the
legislation earlier than June 1, 1997 if it wishes to do so. The
Interstate Banking Act also permits de novo interstate branching
as of June 1, 1997, but only if a state affirmatively opts in by
adopting appropriate legislation. In July of 1995, Pennsylvania
adopted "opt in" legislation which allows such transactions
today, prior to the June 1, 1997 federal effective date.
Selected Statistical Information
Certain statistical information is included in the
Corporation's 1995 Annual Report and is incorporated herein by
reference
Description of Statistical Information Annual
Incorporated by Reference from the Report
1995 Annual Report Page
Net Interest Income 41
Analysis of Net Interest Income 42 and 43
Deposits by Major Classification 43
Rate-Volume Analysis of Net Interest Income 44
Investment Securities at Amortized Cost 46
Time Certificates of Deposit of $100,000 or More 47
Short-Term Borrowings 48
Loan Portfolio 50
Allocation of the Allowance for Possible Loan Losses 50
Non-Performing Assets 50
Allowance for Possible Loan Losses 51
Interest Rate Sensitivity 53
Maturity Distribution of Investment Portfolio 54
Maturities and Interest Rate Terms of Loans 55
Item 2. Properties
The Corporation's headquarters is located in the main office
of F&M Trust at 20 South Main street, Chambersburg, Pennsylvania.
The Corporation owns eight properties throughout Franklin County
which are held for future expansion and are currently leased to
others.
In addition to the main office, F&M Trust owns eight other
properties which are used for banking offices and operations. F&M
Trust also owns two properties which are held for expansion and are
currently leased to others.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
The information related to this item is incorporated by
reference to the information appearing under Market and Dividend
Information on Page 16 and Shareholders' Information on Page 63 of
the Corporation's 1995 Annual Report to Shareholders.
Item 6. Selected Financial Data
The information related to this item is incorporated by
reference to the information appearing under Summary of Selected
Financial Data on Page 3 of the Corporation's 1995 Annual Report to
Shareholders.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The information related to this item is incorporated by
reference to the information appearing under Management's
Discussion and Analysis on Pages 39 through 56 of the Corporation's
1995 Annual Report to Shareholders.
Item 8. Financial Statements and Supplementary Data
The information related to this item is incorporated by
reference to the information appearing under Financial Statements
and Notes to Consolidated Financial Statements, including the
Report of Independent Public Accountants, on Pages 17 through 38 of
the Corporation's 1995 Annual Report to Shareholders.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The information related to this item is incorporated by
reference to the material set forth under the captions "Information
about Nominees and Continuing Directors" on Pages 4 through 7, and
"Executive Officers" on Page 8 of the Corporation's Proxy Statement
for the 1996 Annual Meeting of Shareholders.
Item 11. Executive Compensation
The information related to this item is incorporated by
reference to the material set forth under the captions
"Compensation of Directors" on Page 8 and "Executive compensation
and Related Matters" on Pages 8 through 13 of the Corporation's
Proxy Statement for the 1996 Annual Meeting of Shareholders, except
that information appearing under the captions "Committee Report on
Executive Compensation" and "Stock Performance Graph" on pages 10
through 14 is not incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information related to this item is incorporated by
reference to the material set forth under the captions "Voting of
Shares and Principal Holders Thereof" on Page 2 and "Information
about Nominees and Continuing Directors" on Pages 4 through 7 of
the Corporation's Proxy Statement for the 1996 Annual Meeting of
Shareholders.
Item 13. Certain Relationships and Related Transactions
The information related to this item is incorporated by
reference to the material set forth under the caption "Transactions
with Directors and Executive Officers" on Page 15 of the
Corporation's Proxy Statement for the 1996 Annual Meeting of
Shareholders.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) The following documents are filed as part of this report:
(1) The following Consolidated Financial Statements of
the Corporation are incorporated by reference to
the 1995 Annual Report to Shareholders:
Report of Independent Public Accountants;
Consolidated Balance Sheets - December 31, 1995 and
1994;
Consolidated Statement of Income - Years ended
December 31, 1995, 1994, and 1993;
Consolidated Statements of Changes in Shareholders'
Equity - Years ended December 31, 1995, 1994, and
1993;
Notes to Consolidated Financial Statements.
(2) All financial statement schedules for which
provision is made in the applicable accounting
regulations of the Securities and Exchange
Commission are not required under the related
instructions or are inapplicable and have therefore
been omitted.
(3) The following exhibits are being filed as part of
this report;
3.1 Articles of Incorporation of the Corporation.
Filed as Exhibit 4 to Registration Statement
on Form S-8 (No.33-36509) and incorporated
herein by reference.
3.2 Bylaws of the Corporation.
Filed as Exhibit 4 to Registration Statement
on Form S-8 (No.33-36509) and incorporated
herein by reference.
10.1 Deferred Compensation Agreements with Bank
Directors.
10.2 Director's Deferred Compensation Plan.
10.3 Long-Term Incentive Plan of 1990.
10.4 Senior Management Incentive Program, as
amended, October 15, 1992. Filed as Exhibit
10.5 to the 1993 Form 10-K -- Annual report of
the Corporation and incorporated herein by
reference.
11 Statements re: computation of per share
earnings.
13 The 1995 Annual Report to Shareholders of the
Corporation.
22 Subsidiaries of the Corporation.
23 Consent of Arthur Andersen L.L.P.
27 Financial Data Schedule
(b) Reports on Form 8-K:
A current report on Form 8-K, dated October 11, 1995 was
filed on October 13, 1995, in connection with the
declaration of a three for two stock split in the form
of a 50% stock dividend.
(C) The exhibits required to be filed as part of this report
are submitted as a separate section of this report.
(d) Financial Statement Schedules - None.
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the
Securities and Exchange act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
FINANCIAL SERVICES CORPORATION
By: /s/ William E. Snell, Jr.
William E. Snell, Jr.
Date: March 7, 1996 President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
Signature Title Date
/s/ Jay L. Benedict, Jr. Chairman of the Board March 7, 1996
Jay L. Benedict, Jr. and Director
/s/ Robert G. Zullinger Vice Chairman of the Board March 7, 1996
Robert G. Zullinger and Director
/s/ Charles S. Bender II Executive Vice March 7, 1996
Charles S. Bender II President and Director
/s/ Frank S. Elliott Sr. Vice President March 7, 1996
Frank S. Elliott
/s/ Elaine G. Meyers Treasurer and Chief March 7, 1996
Elaine G. Meyers Financial Officer
/s/ Charles R. Diller Director March 7, 1996
Charles R. Diller
/s/ G. Warren Elliott Director March 7, 1996
G. Warren Elliott
/s/ John M. Hull III Director March 7, 1996
John M. Hull III
Form 10-K
December 31, 1995
Signature Page (continued)
/s/ H. Huber McCLeary Director March 7, 1996
H. Huber McCleary
/s/ Jeryl C. Miller Director March 7, 1996
Jeryl C. Miller
/s/ Charles M. Sioberg Director March 7, 1996
Charles M. Sioberg
/s/ William E. Snell, Jr. President,
William E. Snell, Jr. Chief Executive Officer March 7, 1996
and Director
/s/ Martha B. Walker Director March 7, 1996
Martha B. Walker
/s/ Dennis W. Good, Jr. Director March 7, 1996
Dennis W. Good, Jr.
/s/ Omer L. Eshleman Director March 7, 1996
Omer L. Eshleman
Exhibit Index for the Year
Ended December 31, 1995
Item Description
3.1 Articles of Incorporation of the Corporation.
Filed as Exhibit 4 Registration on Form S-8
(No. 33-36509) and incorporated
herein by reference.
3.2 Bylaws of the Corporation.
Filed as Exhibit 4 Registration on Form S-8
(No. 33-36509) and incorporated
herein by reference.
10.1 Deferred Compensation Agreements with Bank Directors.
10.2 Director's Deferred Compensation Plan.
10.3 Long-Term Incentive Plan of 1990.
10.4 Senior Management Incentive Program, as amended,
October 15, 1992. Filed as Exhibit 10.5 to the 1993
Form 10-K -- Annual Report of the Corporation and
incorporated herein by reference.
11 Statements re: computation of per share earnings
13 The 1995 Annual Report to Shareholders of the Corporation
22 Subsidiaries of Corporation
23 Consent of Arthur Andersen L.L.P.
27 Financial Data Schedule
Exhibit 22
Subsidiaries of
Franklin Financial Services Corporation
Farmers and Merchants Trust Company of Chambersburg - Direct
(A Pennsylvania Bank and Trust Company)