EXHIBIT 99.1
NEWS RELEASE...NEWS RELEASE...NEWS RELEASE
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION, CONTACT:
Date: January 30, 2004 Kristy Williams 615-595-5531
David McCurrach 615-591-1059
FRANKLIN FINANCIAL REPORTS EARNINGS &
NEARS $1 BILLION ASSET MARK
FRANKLIN, TENNESSEE, JANUARY 30, 2004 -Franklin Financial Corporation (Nasdaq:
"FNFN"), the parent company of Franklin National Bank, headquartered in
Franklin, Tennessee, today reported annual earnings and record assets.
For the year ended December 31, 2003, total assets were $954 million, an
increase of 7.0% over 2002 year end assets of $891 million. Over that same
twelve-month period, loans grew 2.5% from $558 million to $572 million and
deposits grew 5.7% from $758 million to $801 million.
"To achieve these results in a pending merger speaks volumes to the loyalty of
our customers as well as the dedication and hard work of our employees,
commented Gordon E. Inman, Chairman, President & CEO of Franklin Financial
Corporation. I'm most grateful to both."
"In 1989, as we were putting together the plans for Franklin National Bank, I
had a vision of being Franklin's first billion dollar bank," continued Inman.
"At the time, it seemed a long way from the $6 million we had raised for the
bank's opening. As of this past December 31st, we were 95% of the way to that
improbable achievement with $954 million in assets."
For the quarter ended December 31, 2003, net income was $2.4 million compared
to $2.7 million for the same period in 2002. Basic earnings per share for the
quarters ended December 31, 2003 and 2002 were $0.29 and $0.34, respectively.
The decrease in net income in 2003 is primarily the result of lower
non-interest income and an increase in the provision for loan losses offset by
decreased non-interest expense. A decline in mortgage banking revenue was the
primary reason for the lower reported non-interest income.
For the year ended December 31, 2003, Franklin Financial earned $9.8 million
compared to $11.1 million for the same period in 2002. This resulted in an
18.39% Return on Average Equity in 2003 compared to 26.58% in 2002. In
addition, Return on Average Assets for 2003 was 1.11% versus 1.39% for 2002. In
December 2003, the corporation raised its quarterly dividend from $0.05775 to
$0.0625 per share, an increase of 8.23%.
On May 1, 2001, the common stock of Franklin Financial Corporation began
trading on the Nasdaq National Market under the symbol "FNFN". Corporate data
may be found on the Internet at www.fnfn.net.
Franklin National Bank operates nine retail branches with ATMs in Williamson,
Davidson, and Maury counties. The bank's Internet site is
FranklinNetBranch.com. In addition to Franklin National Bank, Franklin
Financial Corporation is the parent company of Franklin Financial Mortgage and
Franklin Financial Securities.
On July 24, 2002, Fifth Third Bancorp (Nasdaq: FITB-News) and Franklin
Financial Corporation announced the signing of a definitive agreement in which
Fifth Third will acquire Franklin Financial Corporation and its subsidiary,
Franklin National Bank, headquartered in Franklin, Tennessee. On March 27,
2003, the definitive agreement was amended to extend the termination date to
June 30, 2004 and to revise the exchange ratio.
THE STATEMENTS CONTAINED IN THIS RELEASE WHICH ARE NOT HISTORICAL FACTS ARE
FORWARD-LOOKING STATEMENTS MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS
DESCRIBING FRANKLIN FINANCIAL CORPORATION'S FUTURE PLANS, PROJECTIONS,
STRATEGIES AND EXPECTATIONS, ARE BASED ON ASSUMPTIONS AND INVOLVE A NUMBER OF
RISKS AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND FRANKLIN FINANCIAL
CORPORATION'S CONTROL. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
PROJECTED DUE TO CHANGES IN INTEREST RATES, COMPETITION IN THE INDUSTRY,
CHANGES IN LOCAL AND NATIONAL ECONOMIC CONDITIONS AND VARIOUS OTHER FACTORS.
ADDITIONAL INFORMATION CONCERNING SUCH FACTORS, WHICH COULD AFFECT FRANKLIN
FINANCIAL CORPORATION, IS CONTAINED IN FRANKLIN FINANCIAL CORPORATION'S FILINGS
WITH THE SECURITIES AND EXCHANGE COMMISSION.
FRANKLIN FINANCIAL CORPORATION
(ALL DOLLARS IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------- -------------------------
2003 2002 2003 2002
-------- -------- -------- --------
AVERAGE BALANCES
Loans $552,117 $548,416 $546,902 $497,217
Securities 300,915 240,533 284,776 249,553
Earning Assets 853,047 820,613 838,753 757,733
Total Assets 896,566 858,356 880,564 794,947
Demand deposits 76,339 69,300 80,424 57,321
Interest-Bearing Deposits 667,797 657,026 659,808 608,047
Total Deposits 744,136 726,326 740,232 665,368
Shareholders' Equity 55,938 47,558 53,286 41,705
KEY PERFORMANCE RATIOS
Return on Average Assets (Annualized) 1.08% 1.26% 1.11% 1.39%
Return on Average Equity (Annualized) 17.31 22.73 18.39 26.58
Net Interest Margin 3.78 4.00 3.74 4.30
Efficiency Ratio 51.67 54.35 56.39 52.15
ASSET QUALITY DATA
Nonperforming Assets $ 4,411 $ 6,773 $ 4,411 $ 6,773
Allowance for Loan and Lease Losses 5,827 5,761 5,827 5,761
Net Charge-Offs/(Recoveries) 898 101 3,073 1,173
Nonperforming Assets to Total Loans 0.77% 1.21% 0.77% 1.21%
Allowance for Loan and Lease Losses to
Period-End Loans 1.02 1.03 1.02 1.03
Net Charge-Offs/(Recoveries) to
Average Loans 0.16 0.02 0.56 0.24
FRANKLIN FINANCIAL CORPORATION
(ALL DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------------------- ------------------------------------
PERCENT PERCENT
2003 2002 CHANGE 2003 2002 CHANGE
------- ------- ------- ------- ------- -------
INCOME STATEMENT
Interest income $11,615 $12,677 (8.4) $46,534 $50,623 (8.1)
Interest expense 3,548 4,466 (20.6) 15,204 18,020 (15.6)
------- ------- ------- -------
Net interest income 8,067 8,211 (1.8) 31,330 32,603 (3.9)
Provision for loan losses 1,247 455 174.1 3,122 2,665 17.1
Non-interest income 2,255 3,463 (34.9) 11,174 10,613 5.3
Non-interest expense 5,484 6,436 (14.8) 24,483 22,869 7.1
------- ------- ------- -------
Income before income taxes 3,591 4,783 (24.9) 14,899 17,682 (15.7)
Income taxes 1,169 2,080 (43.8) 5,101 6,597 (22.7)
------- ------- ------- -------
Net income $ 2,422 $ 2,703 (10.4) $ 9,798 $11,085 (11.6)
------- ------- ------- -------
PER SHARE DATA
Basic $ 0.29 $ 0.34 (14.9) $ 1.18 $ 1.40 (15.8)
Diluted 0.26 0.31 (16.1) 1.08 1.27 (15.0)
Cash Dividends 0.0625 0.05775 8.2 0.23575 0.22275 5.8
Common book value per share 6.80 6.09 11.7 6.80 6.09 11.7
Weighted average shares outstanding
Basic 8,374 7,949 5.3 8,302 7,906 5.0
Diluted 9,137 8,796 3.9 9,038 8,754 3.2
DECEMBER 31, PERCENT
BALANCE SHEET SUMMARY 2003 2002 CHANGE
--------- --------- -------
Assets
Cash and cash equivalents $ 51,026 $ 28,061 81.8
Federal funds sold 0 18,922 (100.0)
Securities 307,464 266,200 15.5
Loans 571,659 557,695 2.5
Allowance for loan losses (5,827) (5,761) 1.1
--------- ---------
Net loans 565,832 551,934 2.5
Other assets 29,243 26,116 12.0
Total assets $ 953,565 $ 891,233 7.0
--------- ---------
Liabilities and stockholders' equity
Deposits $ 801,444 $ 758,372 5.7
Other borrowings 91,950 76,581 20.1
Other liabilities 3,137 7,732 (59.4)
--------- ---------
Total liabilities 896,531 842,685 6.4
Total stockholders' equity 57,034 48,548 17.5
--------- ---------
Total liabilities and stockholders' equity $ 953,565 $ 891,233 7.0
--------- ---------