Zacks Initiates Coverage of Franklin Financial With Outperform Recommendation

Core Viewpoint - Zacks Investment Research has initiated coverage of Franklin Financial Services Corporation (FRAF) with an "Outperform" recommendation, emphasizing the bank's strong growth trajectory, resilient balance sheet, and attractive shareholder return profile [1] Group 1: Financial Performance - Franklin Financial has achieved impressive loan growth of 11.2%, with its loan book reaching $1.4 billion, driven by expanding commercial real estate and residential lending portfolios [2] - Deposit growth has surged 18.1$1.82 billion, with 85% of deposits being insured or collateralized, providing funding stability [3] - The Wealth Management division has seen assets under management rise 6.4% to $1.31 billion, with fee income increasing nearly 14$3.4 million to position for higher future yields, while adjusted return metrics remain solid [5] - The bank's asset quality is strong, with non-performing assets at 0.01% of total assets and allowances for credit losses at 1.26%, reflecting disciplined underwriting and risk management [6] - Technology investments, including the integration of salesforce, are expected to enhance customer insights and operational efficiency, unlocking margin expansion in the future [6] Group 3: Shareholder Returns - Franklin Financial is committed to rewarding shareholders, with a risk-based capital ratio of 13.85%, an 8.8% rise in tangible book value, a dividend yield of 4.28%, and an active share repurchase plan [7] - Despite a strong stock rally, FRAF shares remain attractively priced below historical valuation ranges and at a discount to industry averages, indicating potential upside for investors [10]