Financial Performance - Net income for 2024 was $11,099 thousand, down from $13,598 thousand in 2023, a decrease of 18.4%[295] - Basic earnings per share decreased to $2.52 in 2024 from $3.11 in 2023, a decline of 15.9%[293] - Noninterest income decreased to $13,679 thousand in 2024 from $14,851 thousand in 2023, a decline of 7.9%[293] - Total noninterest expense increased to $55,895 thousand in 2024, up from $50,011 thousand in 2023, reflecting an increase of 11.7%[293] - The income tax provision for 2024 was $2,216 thousand, representing an effective tax rate of 16.6%, compared to $2,155 thousand and 13.7% in 2023[412] Asset Growth - The Corporation's total assets increased to $2,197,841 thousand in 2024 from $1,836,039 thousand in 2023, representing a growth of approximately 19.7%[290] - Cash and cash equivalents increased significantly to $203,613 thousand as of December 31, 2024, compared to $23,140 thousand at the end of 2023[300] - Total deposits rose to $1,815,647 thousand in 2024, up from $1,537,978 thousand in 2023, reflecting a growth of approximately 18.1%[290] - The Corporation's total shareholders' equity rose to $144,716 thousand in 2024 from $132,136 thousand in 2023, representing a growth of about 9.5%[291] Loan Portfolio - The net loans increased to $1,380,424 thousand in 2024, compared to $1,240,933 thousand in 2023, marking an increase of approximately 11.3%[290] - The loan portfolio increased to $1,398,077 thousand in 2024 from $1,256,985 thousand in 2023, reflecting a growth of approximately 11.2%[380] - Residential real estate loans for 1-4 family properties rose to $322,835 thousand in 2024, up from $277,849 thousand in 2023, indicating an increase of 16.2%[380] - Commercial real estate loans increased to $803,365 thousand in 2024, compared to $703,767 thousand in 2023, representing a growth of 14.2%[380] Credit Losses and Allowance - The allowance for credit losses (ACL) increased to $17,653 thousand in 2024 from $16,052 thousand in 2023, indicating a rise of 10%[290] - The allowance for credit losses was $17,653 thousand in 2024, up from $16,052 thousand in 2023, reflecting a rise of 10%[380] - The Corporation evaluates the adequacy of the ACL based on past loan loss experience and current economic conditions[324] - Management believes the allowance for credit losses as of December 31, 2024, is adequate based on ongoing assessments[386] Interest Income and Rates - Net interest income is projected to increase by 4.4% to $64,596 thousand with a +300 basis points change in interest rates[277] - Total interest income increased to $101,451 thousand in 2024 from $76,762 thousand in 2023, representing a growth of 32.2%[293] - Net interest income after provision for credit loss expense rose to $55,531 thousand in 2024, compared to $50,913 thousand in 2023, an increase of 9.3%[293] Capital and Equity - The Bank's capital conservation buffer was 4.96% as of December 31, 2024, indicating it was "well capitalized" under Basel III requirements[355] - The Corporation's Common Equity Tier 1 Risk-based Capital Ratio was 11.31% as of December 31, 2024, exceeding the minimum requirement of 4.50%[361] - The Bank's Total Risk-based Capital Ratio was 12.96% as of December 31, 2024, above the minimum requirement of 10.00%[361] Dividends and Shareholder Returns - The company declared cash dividends of $1.28 per share in both 2024 and 2023, with total dividends paid of $5,629 thousand in 2024[297] - The Dividend Reinvestment Plan (DRIP) contributed $1.7 million to capital in 2024, with $1.0 million from reinvested dividends and $730,000 from optional cash purchases[446] Risk Management - The Corporation has no foreign currency exchange rate risk, commodity price risk, or material equity price risk, but is exposed to interest rate risk[270] - The financial simulation modeling forecasts net interest income and economic value of equity under various interest rate environments, measured at least quarterly[273] Pension and Employee Benefits - The total net periodic pension cost increased from $99 thousand in 2023 to $168 thousand in 2024, reflecting changes in service and interest costs[425] - The interest cost for the defined benefit pension plan was $769 thousand in 2024, slightly down from $806 thousand in 2023[425] - The Corporation's 401(k) plan expense remained consistent at $1.3 million for both 2024 and 2023, indicating stable employee participation and matching contributions[421] Legal and Compliance - No material legal proceedings are pending against the Corporation that would have a material adverse effect on its financial position[456] - Management does not anticipate that the ultimate aggregate liability from litigation will materially affect the Corporation's financial position[455]
Franklin Financial Services (FRAF) - 2024 Q4 - Annual Report