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Franklin Financial Reports 2022 Q4 and End of the Year Results; Declares Dividend

Franklin Financial Reports 2022 Q4 and End of the Year Results; Declares Dividend
PR Newswire
CHAMBERSBURG, Pa., Jan. 24, 2023

CHAMBERSBURG, Pa., Jan. 24, 2023 /PRNewswire/ — Franklin Financial Services Corporation (NASDAQ: FRAF), the bank holding…



Franklin Financial Reports 2022 Q4 and End of the Year Results; Declares Dividend

PR Newswire

CHAMBERSBURG, Pa., Jan. 24, 2023 /PRNewswire/ -- Franklin Financial Services Corporation (NASDAQ: FRAF), the bank holding company of F&M Trust (the Bank), reported consolidated earnings of $3.7 million ($0.84 per diluted share) for the fourth quarter ended December 31, 2022, compared to $3.7 million ($0.82 per diluted share) for the fourth quarter ended December 31, 2021.  Net income for 2022 was $14.9 million ($3.36 per diluted share) compared to $19.6 million ($4.42 per diluted share) for the same twelve-month period in 2021. For 2022, the Corporation had a $6.9 million increase in net interest income, but this was partially offset by an increase of $2.8 million in the provision for loan losses and a $1.7 million decrease in gains on the sale of mortgage loans. The decrease in net income from 2021 to 2022 was also broadened by events in 2021 including a one-time gain of $1.8 million on the sale of the Bank's headquarters building and a $636 thousand expense reversal relating to the reversal of a previously established off-balance sheet liability reserve.

A summary of operating results for the fourth quarter of 2022 and year-to-date 2022 are as follows:

  • Net interest income was $14.6 million for the fourth quarter of 2022 compared to $14.1 million for the third quarter of 2022 and $11.4 million (including $1.2 million of Paycheck Protection Program (PPP) interest and fees) for the fourth quarter of 2021. Net interest income for 2022 was $51.6 million (including $388 thousand of PPP interest and fees), an increase of 15.5% compared to $44.7 million for the same period in 2021 (including $3.3 million of PPP interest and fees). The net interest margin increased to 3.58% for the fourth quarter of 2022 from 2.79% for the same quarter of the prior year. On a year-over-year comparison, the net interest margin was 3.11% for 2022 compared to 2.88% in 2021. The increase in the 2022 net interest margin was due primarily to a 0.34% increase in the yield on earning assets from 3.06% in 2021 to 3.40% in 2022 as all asset classes had higher yields in 2022. This increase was primarily the result of action by the Federal Reserve to increase short-term interest rates in 2022. The cost of interest-bearing deposits rose from 0.16% in 2021 to 0.29% for 2022. Likewise, the total cost of deposits increased 0.12% in 2022 to 0.23% in 2021.

  • Average earning assets for 2022 were $1.7 billion compared to $1.6 billion in 2021, an increase of 6.1%. In 2022, the average balance of interest-earning cash balances increased $50.3 million (46.1%), the average balance of the investment portfolio increased $23.7 million (4.9%) and the average balance of the loan portfolio increased $24.5 million (2.4%), over the prior year averages. Within the loan portfolio, average commercial loan balances increased $20.3 million during the year, net of a $39.5 million decrease in the average balance of PPP loans year-over-year. Total deposits averaged $1.6 billion for 2022, an increase of $143.2 million (9.6%) over the average balance for 2021. All deposit categories reported a year-over-year increase in average balances, except for time deposits.

  • For the fourth quarter of 2022, the Bank recorded $650 thousand through the provision for loan loss expense compared to a reversal of $200 thousand in the fourth quarter of 2021. During the fourth quarter of 2022, the Bank recorded a loss of $1.5 million on the sale of a $5.1 million commercial loan that did not exhibit long-term performance capacity. Year-to-date, the provision for loan loss expense was $650 thousand compared to a $2.1 million provision expense reversal for the same period in 2021. The allowance for loan loss ratio was reduced to 1.35% of gross loans as of December 31, 2022, compared to 1.51% at December 31, 2021 due to continued improvement in the credit quality of the loan portfolio.

  • Noninterest income totaled $3.6 million for the fourth quarter of 2022 compared to $3.7 million in the third quarter of 2022 and $4.6 million for the fourth quarter of 2021. A decrease of $487 thousand in gains on sale of mortgages and an increase of $124 thousand in securities losses contributed to the decrease from the fourth quarter comparable period. Year-to-date, noninterest income was $15.3 million compared to $19.5 million in 2021. Significant year-over-year variances that contributed to the decrease include the $1.8 million gain on the sale of the Bank's former headquarters building in 2021, a decrease in gains on the sale of mortgages ($1.7 million) and a decrease in debit card income ($302 thousand).

  • Noninterest expense for the fourth quarter of 2022 was $13.2 million compared to $12.2 million in the prior quarter and $12.0 million for the fourth quarter of 2021. Year-to-date, noninterest expense was $48.7 million in 2022 compared to $43.2 million in 2021. The following categories contributed to the year-over-year increase: salaries and benefits increased $3.3 million (primarily incentive compensation and health insurance), net occupancy increased $489 thousand, data processing expense increased $725 thousand, and pension settlement costs of $290 thousand related to lump sum payouts during the year.

  • The effective tax rate was 14.9% and 14.6% for the fourth quarter and year-to-date period of 2022, respectively.

Total assets at December 31, 2022 were $1.700 billion compared to $1.774 billion at December 31, 2021, a decrease of 4.2%. Significant balance sheet changes since December 31, 2021, include:

  • Short-term interest-earning deposits in other banks decreased $117.7 million (71.5%) and the investment portfolio decreased $43.0 million (8.1%).

  • The net loan portfolio increased $53.1 million over the year-end 2021 balance, with commercial loans increasing $33.4 million from year-end 2021.

  • Deposits decreased $32.9 million (2.1%) over year-end 2021, with decreases in commercial money management and interest-bearing checking accounts and a decrease in time deposit balances.

  • Shareholders' equity decreased $42.9 million from December 31, 2021. Retained earnings increased $9.3 million in 2022 but was offset by a decrease of $50.7 million in accumulated other comprehensive income (AOCI) as the fair value of the investment portfolio declined during the year. At December 31, 2022, the book value of the Corporation's common stock was $26.01 per share and tangible book value was $23.96 per share. In December 2022, an open market repurchase plan was approved to repurchase 150,000 shares over a one-year period. The Bank is considered to be well-capitalized under the regulatory guidance as of December 31, 2022.

    "We ended the fourth quarter and year of 2022 well positioned for future growth. In the course of 2022, we have seen improvement in loan quality, the addition of key team members, including commercial lenders, transitioned retiring senior management members with new leadership in retail and technology, and added a chief operating officer", said Tim Henry, President and CEO. "In addition, we have moved the bank headquarters to facilities that will support future growth and renovated two community offices that needed to be updated to meet the changing needs of our customers and gone "live" with Salesforce to improve our ability to work effectively with our customers. We have made all these changes while also maintaining good operating metrics and have been able to post the fourth most profitable year in the company's history despite the wild gyrations in the economy that has radically affected the interest rate and business environment."

On January 19, 2023, the Board of Directors of Franklin Financial Services Corporation declared a $0.32 per share regular quarterly cash dividend for the first quarter of 2023 to be paid on February 22, 2023, to shareholders of record at the close of business on February 3, 2023. This compares to a $0.32 per share regular cash dividend for the fourth quarter of 2022 and $0.32 per share for the first quarter of 2022.

Additional information on the Corporation is available on our website at:  

Franklin Financial is the largest independent, locally owned and operated bank holding company headquartered in Franklin County with assets of more than $1.7 billion. Its wholly-owned subsidiary, F&M Trust, has twenty-two community banking locations in Franklin, Cumberland, Fulton and Huntingdon Counties PA, and Washington County MD. Franklin Financial stock is trading on the Nasdaq Stock Market under the symbol FRAF. Please visit our website for more information,

Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements.  The review period for subsequent events extends up to and including the filing date of a public company's consolidated financial statements when filed with the Securities and Exchange Commission ("SEC"). Accordingly, the financial information in this announcement is subject to change.

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: changes in interest rates, changes in the rate of inflation, 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 the Corporation's cost of funds, changes in government monetary policy, changes in government regulation and taxation of financial institutions, 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. 



Financial Highlights (Unaudited)

Earnings Summary

For the Three Months Ended

For the Twelve Months Ended

(Dollars in thousands, except per share data)






% Change

Interest income












Interest expense







     Net interest income







Provision for loan losses







Noninterest income







Noninterest expense







     Income before income taxes







Income taxes







Net income












Diluted earnings per share







Regular cash dividends paid







Balance Sheet Highlights (as of)




Total assets







Investment and equity securities




Loans, net








Shareholders' equity




Assets Under Management (fair value)

Investment and Trust Services




Held at third party brokers




As of and for the Three Months Ended

For the Twelve Months Ended

Performance Ratios






Return on average assets*

0.84 %

1.00 %

0.84 %

0.83 %

1.17 %

Return on average equity*

13.58 %

14.86 %

9.56 %

11.64 %

13.20 %

Dividend payout ratio

37.77 %

30.36 %

38.83 %

37.88 %

28.16 %

Net interest margin*

3.58 %

3.28 %

2.79 %

3.11 %

2.88 %

Net loan recoveries (chargeoffs) /average loans

-0.56 %

-0.01 %

0.04 %

-0.15 %

0.04 %

Nonperforming loans / gross loans

0.01 %

0.53 %

0.74 %

Nonperforming assets / total assets

0.01 %

0.30 %

0.42 %

Allowance for loan loss / loans

1.35 %

1.43 %

1.51 %

Book value, per share







Tangible book value (1)







Market value, per share







Market value/book value ratio

138.79 %

128.29 %

93.61 %

Market value/tangible book value ratio

150.67 %

139.95 %

99.29 %

Price/earnings multiple*






Current quarter dividend yield*

3.55 %

4.06 %

3.87 %

* Annualized

(1) NonGAAP measurement.  See GAAP versus NonGAAP disclosure

GAAP versus non-GAAP Presentations – The Corporation supplements its traditional GAAP measurements with certain non-GAAP measurements to evaluate its performance and to eliminate the effect of intangible assets.  By eliminating intangible assets (Goodwill), the Corporation believes it presents a measurement that is comparable to companies that have no intangible assets or to companies that have eliminated intangible assets in similar calculations. However, not all companies may use the same calculation method for each measurement. The non-GAAP measurements are not intended to be used as a substitute for the related GAAP measurements. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. In the event of such a disclosure or release, the Securities and Exchange Commission's Regulation G requires: (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP. The following table shows the calculation of the non-GAAP measurements.


(Dollars in thousands, except per share)

December 31, 2022

September 30, 2022

December 31, 2021

Tangible Book Value (per share) (non-GAAP)

Shareholders' equity







Less intangible assets




Shareholders' equity (non-GAAP)




Shares outstanding (in thousands)




  Tangible book value (non-GAAP)





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SOURCE Franklin Financial Services Corporation

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The metaverse is real: Zuck’s ‘incredible’ photorealistic tech wows crypto twitter

Often roasted for his metaverse tech demos, Zuckerberg appears to have blown away internet users with his latest avatar tech.



Often roasted for his metaverse tech demos, Zuckerberg appears to have blown away internet users with his latest avatar tech.

While critics have been busy writing eulogies for Meta’s metaverse dream over the last few years, Mark Zuckerberg’s latest demonstration of its photorealistic avatars shows it could be pretty far from dead after all.

Appearing on a Sept. 28 episode of the Lex Fridman podcast, Zuckerberg and the popular computer scientist engaged in a one-hour face-to-face conversation. Only, it wasn’t actually in person at all.

Instead, the entirety of Fridman and Zuckerberg’s conversation used photorealistic realistic avatars in the metaverse, facilitated through Meta’s Quest 3 headsets and noise-canceling headphones.

Observers often have fun ridiculing Meta for dumping billions of dollars into metaverse research only to seemingly produce cartoonish avatars and wonky-looking legs.

However, in this case, users on social media, including those from Crypto Twitter, seemed to be genuinely impressed by the sophistication of the technology.

“Ok the metaverse is officially real,” wrote pseudonymous account Gaut, a rare moment of seemingly genuine praise from a user typically known for his satirical and sarcastic takes on current events.

“9 minutes into Lex / Mark metaverse podcast I forgot I was watching avatars,” wrote coder Jelle Prins.

Fridman and Zuckerberg speaking as virtual avatars in the metaverse. Source: Lex Fridman Podcast.

Fridman alsoshared his impressions of the experience in real-time, noting how “close” Zuckerberg felt to him during the interview. Moments later, he explained how difficult it was to recognize that Zuckerberg’s avatar wasn’t his physical body.

“I’m already forgetting that you’re not real.”

The technology on display is the newest version of Codec Avatars. First revealed in 2019, Codec Avatars is one of Meta’s longest-running research projects which aims to create fully photorealistic real-time avatars that work by way of headsets with face tracking sensors.

Related: Meta refutes claims of copyright infringement in AI training

However, users may need to wait a few years before donning their own realistic avatars, said Zuckerberg, explaining that the tech used requires expensive machine learning software and full head scans by specialized equipment featuring more than 100 different cameras.

This would be, at the very least, three years away from being available to everyday consumers, he said.

Still, Zuckerberg noted that the company wants to reduce the barriers as much as possible, explaining that in the future, these scans may be achievable with a regular smartphone.

The most-recent demonstration comes just one day after Meta unveiled its answer to ChatGPT, revealing its newest AI assistant Meta AI, which is integrated across a range of unique chatbots, apps and even smart glasses.

AI Eye: Real uses for AI in crypto, Google’s GPT-4 rival, AI edge for bad employees

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New Tables Show Intermediate-Term Overview is Negative

We have introduced two new tables in the DecisionPoint ALERT to give an overview of trend and BIAS for the major market indexes, sectors, and industry…



We have introduced two new tables in the DecisionPoint ALERT to give an overview of trend and BIAS for the major market indexes, sectors, and industry groups that we track. The first is our Market Scoreboard, which shows the current Intermediate-Term and Long-Term Trend Model (ITTM and LTTM) signal status. To review:

  • The IT Trend Model generates a BUY Signal when the 20-day EMA crosses up through the 50-day EMA (Silver Cross).
  • The IT Trend Model generates a NEUTRAL Signal when the 20-day EMA crosses down through the 50-day EMA (Dark Cross) above the 200-day EMA. This is a soft SELL Signal, going to cash or a hedge. It avoids being short in a bull market.
  • The IT Trend Model generates a SELL Signal when the 20-day EMA crosses down through the 50-day EMA (Dark Cross) below the 200-day EMA.
  • The LT Trend Model generates a BUY Signal when the 50-day EMA crosses up through the 200-day EMA (Golden Cross).
  • The LT Trend Model generates a SELL Signal when the 50-day EMA crosses down through the 200-day EMA (Death Cross).

The current table shows that there is considerable stress in the intermediate-term; however, the long-term is still comfortably green for market and sector indexes. But we need to remember that the market indexes are cap-weighted, which means that they can be held aloft by large-cap stocks. The 11 sectors shown are composed solely of S&P 500 components, meaning that they will reflect the strength of that index. Industry groups, however, are not doing as well because they are less protected by the large-cap umbrella.

Next, let's look at how we determine the BIAS of a given index. First, the Silver Cross Index shows the percentage of stocks in an index that have a Silver Cross (20-day EMA above the 50-day EMA), and the Golden Cross Index shows the percentage of stocks in the index that have a Golden Cross (50-day EMA above the 200-day EMA). Next, we determine BIAS based upon the relationship of the Silver Cross Index to its 10-day EMA and the relationship of the Golden Cross Index to its 20-day EMA. When they are above, the BIAS is bullish. When they are below, the BIAS is bearish. See the chart below.

The following table shows the current intermediate-term and long-term BIAS of the market, sector, and industry group indexes we follow. Note that the picture is extremely bearish, but it is a very oversold condition, which will shift toward the positive in the event of a strong rally.

Conclusion: These new tables, available daily in the DecisionPoint ALERT, provide a quick overview of market trend and BIAS. They are intended to help focus attention on areas that may be of interest. They do not give action commands, but provide information flags to prompt assessment of the relevant charts.

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Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin

(c) Copyright 2023

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.

Helpful DecisionPoint Links:

DecisionPoint Alert Chart List

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DecisionPoint Chart Gallery

Trend Models

Price Momentum Oscillator (PMO)

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Swenlin Trading Oscillators (STO-B and STO-V)


SCTR Ranking

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China dev fined 3 yr’s salary for VPN use, 10M e-CNY airdrop: Asia Express

Crypto industry concerns after Chinese dev fined 3 year’s salary for using a VPN, largest Ponzi in Hong Kong history, JPEX saga, and more.



Crypto industry concerns after Chinese dev fined 3 year’s salary for using a VPN, largest Ponzi in Hong Kong history, JPEX saga, and more.

Our weekly roundup of news from East Asia curates the industrys most important developments.

Chinese worker fined $145K over VPN

An unnamed individual in China was fined 1.06 million Yuan ($144,907) for using a virtual private network (VPN) to access restricted websites as part of a remote work routine for a foreign employer. 

According to local mediareportsearlier this week, during his employment as a consultant between 2019 to 2022 the unnamed individual accessed GitHub to view source code, answered questions in customer support, held teleconferences via Zoom, and posted multiple threads on Twitter with the help of a VPN.

China Digital Times
Images from the China Digital Times story.

Based on a document issued by City of Chengde Police, the individual’s income earned with the aid of a VPN was deemed as “proceeds of crime.” The police issued a penalty of $144,097, equivalent to three years of the individual’s salary.

Chinese law prohibits the use of VPNs to bypass the country’s “Great Firewall” that blocks popular sites such as Google, Wikipedia, and Facebook. The ruling has spooked many in China’s IT and Web3 circles, who often rely on VPNs for similar remote-work tasks.

City of Hangzhou airdrops 10M e-CNY 

The City of Hangzhou is airdropping 10 million digital yuan central bank digital currency (e-CNY), worth a total of $1.37 million, to incentivize food and beverage spending as it hosts the 19th Asian Games. 

Anyone within the municipality of Hangzhou, locals and visitors alike, can receive the e-CNY airdrop for use in food delivery platforms. Individuals can receive up to three vouchers that reimburse merchants, in e-CNY, up to 20% to 30% of the value of food items after purchase.

The airdrop will renew every five days until the balance is emptied. The vouchers, although denominated in e-CNY, are only effective for five days and can only be tendered through select food delivery platforms. Earlier this year, the City of Hangzhou airdropped 4 million e-CNY, worth $590,000, in an effort to boost the CBDC’s adoption.

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15 detained over largest alleged Ponzi scheme in Hong Kong’s history

Hong Kong police have detained 15 individuals linked to the collapse of cryptocurrency exchange JPEX. 

As of September 27, Hong Kong Policeclaimthey have received over 2,392 complaints claiming a total loss of 1.5 billion Hong Kong dollars ($191.6 million) in the apparent Ponzi scheme. Since the investigation began mid-September, police say that they have seized 8 million HKD ($1 million) in cash and frozen bank accounts worth 77 million HKD ($10 million) suspected of being proceeds of crime.

On September 13, the Hong Kong Securities & Futures Commission (SFC) issued a warning regarding JPEX being an unlicensed exchange within its jurisdiction. The move led to several arrests of its key executives and the abandonment of its corporate booth in Token2049 Singapore. Prior to its collapse, JPEX was one of the most heavily marketed crypto exchanges in Hong Kong, with corporate ads displayed across the city’s metro lines and taxis.

The incident is shaping up as potentially the worst Ponzi scheme in Hong Kong’s history in terms of monetary loss. Shortly after its discovery, the SFC began publishing a list of crypto exchanges awaiting registration or are unlicensed within the special administrative region of China.

CoinEx resilient despite $70M hack

CoinEx logo.

Hong Kong crypto exchange CoinEx will resume services despite falling victim to a $70 million wallet hack orchestrated by North Korea’s infamous Lazarus Group. 

According to a September 22 statement, CoinEx claims to have resumed deposits and withdrawals on 190 cryptocurrencies, including Bitcoin, Ethereum, USD Coin, and Tether. The firm stated: 

“The wallet system is operating safely and steadily at present. We will gradually resume deposit and withdrawal services for the remaining 500+ cryptos. Since the resuming operations will be processed frequently, there will be no further or separate announcements for each crypto.”

As part of its new wallet system, CoinEx updated the deposit addresses of all crypto assets, rendering old addresses invalid. On September 12, a leak of the exchange’s hot wallet keys led to the theft of over $70 million worth of users’ cryptos. Despite the incident, CoinEx said that cold wallets were not affected and that the CoinEx User Asset Security Foundation would “bear the financial losses from this incident.”

Multiple blockchain security firms, such as Elliptic, have pointed to North Korea’s Lazarus Group as the perpetrator of the exploit. The CoinEx team has since offered a “generous bounty” for the return of stolen funds. Prior to the hack, the exchange disclosed it had around $260 million worth of major cryptocurrencies in its proof-of-reserves report. 

Alibaba moves into digital wallets

Chinese tech conglomerate Alibaba wants to launch its own wallet service. 

According to the September 28 announcement, Alibaba’s Cloud subsidiary has partnered with crypto custodian Cobo to create an enterprise wallet-as-a-service solution for developers and organizations, integrating crypto wallets into software through APIs and SDKs. Cobo says it is incorporating its custodial wallet and multi-party computation technology to build the Alibaba Cloud wallet. 

“This collaboration marks a significant step towards setting new standards in security, performance, and accessibility of the digital wallet infrastructure for Web3,” said Dr. Changhao Jiang, co-founder and CTO of Cobo. The firm claims to hold partnerships with over 500 institutions, with billions of digital assets in custody through its wallet solutions. In June, crypto-friendly executive Joe Tsaibecame the chairmanof Alibaba Group, replacing his predecessor Daniel Zhang.

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