Franklin Financial Network Reports Second Quarter Earnings of $0.32 per share

Franklin, TN - July 23, 2013 - Franklin Financial Network, Inc., the parent of Franklin Synergy Bank, reported consolidated net income of $1.2 million for the second quarter of 2013, a 50.4 percent increase compared with $798 thousand for the second quarter of 2012. Basic earnings per common share for the quarter ending June 30, 2013, totaled $0.32 versus $0.20 for the same period in 2012, an increase of 60.0 percent.

On a year-to-date basis, consolidated net income for Franklin Financial Network was $2.1 million, an increase of 31.3 percent over the same period in 2012. On a per share basis, year-to-date was $0.58 in 2013, compared to $0.40 in 2012, an increase of 45.0 percent.

“This is our eighteenth consecutive profitable quarter at Franklin Synergy Bank,” noted Richard Herrington, Franklin Financial Network president. “We are pleased to report another quarter of solid results as we continue to seek opportunities to deliver value to our shareholders.”

Highlights of Franklin Financial Network, Inc. Performance

Franklin Financial Network Loan, Deposit, and Asset Growth

  • Loans at June 30, 2013, totaled $347.1 million, compared to $282.2 million at June 30, 2012, an annualized increase of 23.0 percent. Although residential and construction loans accounted for over half of the increase from June 2012, the bank grew small business and SBA loans as well.

    Loans have increased $22.2 million since March, 31 2013, an annualized growth rate of 27.4 percent.

  • Deposits increased $69 million to $536 million, or 14.8 percent from June 30, 2012, deposits of $467 million. Deposit growth was driven by Westhaven and continued growth in other locations.
  • Assets at June 30, 2013 totaled $619 million, compared to $530 million at June 30, 2012, an annual growth rate of 16.7 percent. The primary growth areas were loans and investment securities.

    Assets at March 31, 2013, totaled $609 million.

  • Non-performing assets were unchanged at $4.6 million as of June 30, 2013, compared to March 31, 2013. Non-performing assets as a percent of total assets at June 30, 2013, was 0.74%.

    Non-performing assets decreased approximately $204 thousand, or 4.3 percent from the June 30, 2012 total. Non-performing assets as a percent of total assets was 0.90 percent at June 30, 2012.

Franklin Financial Network Income Statement Highlights

  • Net Interest income totaled $4.9 million for the quarter ended June 30, 2013, up from $3.9 million for the same period in 2012, a 24.3 percent annual increase. Earning asset growth and improving interest margins drove the increase in net interest income.

    Net interest income for the six month period was $9.3 million, a 20.8 increase from the same period in 2012.

    The net interest margin for the quarter ended June 30, 2013 increased to 3.30 percent, up from 3.13 percent at March 31, 2013 and from 3.14 percent for the quarter ended June 30, 2012.

  • Noninterest income for the quarter ended June 30, 2013, was $2.1 million, compared to $2.0 million for the first quarter of 2013 and $1.9 million for the same quarter last year.

    • Mortgage banking income totaled $1.8 million during the second quarter of 2013, compared to $1.5 million during the second quarter of 2012 and $1.7 million during the first quarter of 2013.

      Year-to-date, mortgage banking come increased from $2.5 million in 2012 to $3.5 million in 2013. The bank had a record-setting $209 million in mortgage loan originations in 2012; this trend accelerated during the first half of 2013.

    • Income from Franklin Synergy Investment Management grew 127% during the quarter.

    Noninterest income for the six month period was $4.1 million, compared to $3.4 million for the same period in 2012.

  • Noninterest Expense for the second quarter increased to $4.9 million from $4.0 million for the same period in 2012. Three personnel expense factors impacted non-interest expense during the quarter:

    • Increased mortgage commissions due to the continuation of higher mortgage origination activity.
    • The addition of the new Westhaven Branch (in June 2012) as well as a Loan Office in Spring Hill (March 2013).
    • The addition of Investment Management bankers and support personnel.

    Year-to-date noninterest expense was $9.7 million, compared to $7.7 million for the same period in 2012.

  • Provision for loan and lease losses for the quarter ended June 30, 2013, was $182 thousand, as compared to $599 thousand for the quarter ended June 30, 2012, a decrease of 69.6 percent. Provision for loan and lease losses for the quarter ended March 31, 2013 was $50 thousand.

    While the bank realized loan loss recoveries on previously charged-off loans during the quarter, $23 million in new loans were added to the bank’s portfolio. In addition, the bank has experienced no net quarterly charge-offs since the second quarter of 2012.

    Year-to-date provision for loan and lease losses decreased 77%.

“Our credit quality remains strong,” Herrington said. “We continue to manage growth in expenses as we build our infrastructure to meet local banking needs. We also continue to produce meaningful loan and deposit growth which we believe to be the primary basis for sustainable growth and profitability. In addition, mortgage production continues to be a revenue builder for Franklin Synergy as well as for the banking industry as whole.”


This media release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. Such statements include, but are not limited to, projected sales, gross margin and net income figures, the availability of capital resources, and plans concerning products and market acceptance. Forward-looking statements are inherently subject to risks and uncertainties, many of which can not be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, could differ materially from those set forth in or contemplated by the forward-looking statements herein.

Future operating results of the corporation are impossible to predict, and no representation or warranty of any kind can be made respecting the present or future accuracy of such forward-looking statements or the ability of the corporation to meet its obligations, and no such representation or warranty is to be inferred.