Franklin Financial Services : FRAF Investor Presentation - January 2023

Investor Presentation

Fourth Quarter 2022 Highlights

Forward Looking Statements

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

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CEO Comments

2022 was a year of positioning Franklin Financial Services Corporation for the future. With several members of the senior management team retiring, we overlapped their successors to make for a smooth transition. Last year saw a move to a new corporate headquarters from facilities used since the early 1900s, and we also transitioned the bank to using Salesforce to improve both sales and service to our customers. Also, we opened our first full-service community office in Maryland and added a new Board member from Maryland who brings a wealth of knowledge and experience to our existing Board of Directors.

While the dramatic interest-rate changes of 2022 helped us improve our Net Interest Margin (NIM), we can expect that in 2023 the cost of funding will increase and tighten NIM. At the same time, with the addition of commercial relationship managers with experience in adjoining markets, we should be able to grow loans even in the face of possible recession. Our credit quality further improved, and we are appropriately provisioned should changes in the economy create challenges for some of our customers.

Fee income should be supported by continued growth in the number of clients using our Investment & Trust Services, and the bank is focused on improving efficiencies throughout the company. The negative effect of Accumulated Other Comprehensive Income (AOCI) on book capital should level off given a portfolio duration under 4 ½ years, particularly if the rate of interest hikes slows down in 2023.

Sincerely,

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Mission, Vision & Core Values

Mission Statement

Delivering the right financial solutions from people you know and trust.

Vision

We are committed to remaining independent by growing our bank to meet the increasing needs of our customers, communities and shareholders. We will be the financial services leader in the markets we serve.

Core Values

The employees, officers and directors are committed to the core values of integrity, teamwork, excellence, accountability and concern for our customers and the communities we serve.

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Overview of Franklin Financial

• Franklin Financial, which was formed in 1983, is a holding company headquartered in Franklin County, PA
• Franklin Financial's wholly-owned subsidiary, F&M Trust, was founded in Chambersburg, PA in 1906
• Total assets of the Company were $1.70 billion as of December 31, 2022
• As of December 31, 2022, Franklin Financial reported $1.02 billion in brokerage and trust assets under management
• Franklin Financial stock is trading on the Nasdaq Stock Market (NASDAQ: FRAF)

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