DEF 14A of Franklin Financial Services Corp /Pa/, Mar 25, 2025

DEF 14A of Franklin Financial Services Corp /Pa/

Filed Mar 25, 2025 · FY20240000723646-25-000023

Open on EDGAR

  1. Nominations for Election of Directors

    Nominations for Election of Directors In accordance with Section 3.5 of the Bylaws of Franklin Financial, any shareholder of record entitled to vote for the election of directors who is a shareholder on the record date and on the date of the meeting at which directors are to be elected may nominate a candidate for election to the Board of Directors, provided that the shareholder has given proper written notice of the nomination, which notice must contain certain prescribed information and must be delivered to the President of Franklin Financial not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting. The Chairman of the meeting must determine whether a nomination has been made in accordance with the requirements of the Bylaws and, if he determines that a nomination is defective, such nomination and any votes cast for the nominee shall be disregarded. Shareholders may also recommend qualified individuals for consideration by the Nominating and Corporate Governance Committee to be included in Franklin Financial's proxy materials as a nominee of the Board of Directors. A shareholder who wishes to make such a recommendation must submit their recommendation in writing addressed to: Chairman of the Board Franklin Financial Services Corporation P.O. Box 6010 Chambersburg, Pennsylvania 17201-6010. The recommendation must include the proposed nominee's name and qualifications and must be delivered not less than 120 days prior to the anniversary date of the immediately preceding annual meeting.

  2. Nominating and Corporate Governance Committee Process for the Selection and Evaluation of Nominees

    Nominating and Corporate Governance Committee Process for the Selection and Evaluation of Nominees Franklin Financial's Board of Directors has adopted a Job Description identifying the qualifications expected of a member of the Board of Directors and the criteria to be applied by the Nominating and Corporate Governance Committee in evaluating candidates who will be recommended to the Board of Directors as nominees for election to the Board. A candidate must possess good business judgment and must be free of any relationship which would compromise their ability to properly perform the duties of a director. A candidate must have sufficient financial background and experience to be able to read and understand financial statements and to evaluate financial performance. A candidate should have proven leadership skills and management experience and should be actively involved in the community served by Franklin Financial and its subsidiaries. A candidate must be willing and able to commit the time and attention necessary to actively participate in Board affairs. In addition, a candidate must be a person of integrity and sound character. Although the Nominating and Corporate Governance Committee does not have a policy with regard to considering diversity in identifying nominees for director, the Committee does consider whether a candidate’s age, background, skills and experience will compliment or supplement those of other members of the Board of Directors in order to achieve an appropriate balance and diversity of such qualities and characteristics. The Nominating and Corporate Governance Committee uses a variety of methods for identifying and evaluating potential nominees for election to the Board of Directors. The Nominating and Corporate Governance Committee regularly assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that a vacancy is anticipated or otherwise arises, the Nominating and Corporate Governance Committee typically considers and interviews several potential candidates for appointment to fill the vacancy. Candidates may come to the attention of the Nominating and Corporate Governance Committee through current Board members, shareholders and other persons. These candidates are evaluated by the Nominating and Corporate Governance Committee and may be considered at any time during the year. In evaluating potential nominees, the Nominating and Corporate Governance Committee seeks to achieve a balance of knowledge, skills and experience on the Board. The Nominating and Corporate Governance Committee has not engaged third party consultants in connection with the identification or evaluation of potential nominees. The Nominating and Corporate Governance Committee will consider individuals recommended by shareholders as potential nominees for election to the Board of Directors, provided that recommendations are made in accordance with the procedures described above under the caption "Nominations for Election of Directors." A potential nominee who is recommended by a shareholder will be evaluated by the Nominating and Corporate Governance Committee in the same fashion as other individuals who are considered by the Committee as potential candidates for election to the Board of Directors.

  3. Director Independence

    Director Independence The Board of Directors has determined that each director is an "independent director," as such term is defined in the NASDAQ Stock Market Rules except for Timothy G. Henry, CEO, Franklin Financial Services Corporation and Farmers and Merchants Trust Company and Criag W. Best, President, Franklin Financial Services Corporation and Farmers and Merchants Trust Company. In determining the directors’ independence, the Board considered loan transactions between the Bank and the Directors, their family members and businesses with whom they are associated, as well as any contributions made to non-profit organizations with whom they are associated.

  4. Information about Nominees and Continuing Directors

    Information about Nominees and Continuing Directors Information concerning the three (3) individuals nominated for election to Class B of the Board of Directors of Franklin Financial at the 2025 Annual Meeting and concerning the seven (7) continuing directors follows. Director Jennings’ term expires at the 2025 Annual Meeting and he has not been nominated for election due to reaching the mandatory retirement age. Director Henry will be resigning from the Board of Directors, coinciding with his retirement as CEO of the Corporation on April 29, 2025.

  5. CLASS B DIRECTORS (Term expires 2025)

    CLASS B DIRECTORS (Term expires 2025)

  6. CLASS B DIRECTORS (Term expires 2025)

    | Martin R. Brown - Age 73 | | Independent Director | | Year Became Director: 2006 | | Committee Chair: Trust | | Committees: Audit, Compensation and Personnel, Executive | | Mr. Brown graduated with honors from the Pittsburgh Institute of Mortuary Science in 1973. He is a licensed Pennsylvania Funeral Director who assists with the operation of three family-owned funeral homes within the Corporation’s Fulton and Huntingdon County market area. Additionally, Mr. Brown is President of M.R. Brown Management, Inc. where he is the managing general partner of Sandy Ridge Express convenience store, Sandy Ridge A&W Restaurant and Marymart Family LP, which owns Sandy Ridge Station Mall. Along with his wife, Mr. Brown is the owner of the Sandy Ridge Market, a full-service grocery store located at the Sandy Ridge Station Mall. Mr. Brown has served and continues to serve on the boards of organizations within the Corporation's Fulton and Huntingdon County market area. The Board of Directors values Mr. Brown's entrepreneurial background and business management experience and his status as a business leader in the Corporation’s Fulton and Huntingdon County market area. | | Gregory A. Duffey - Age 66 | | Independent Director | | Year Became Director: 2015 | | Committee Chair: Strategic | | Committees: Asset-Liability, Executive, Nominating and Corporate Governance, Trust, Strategic | | Mr. Duffey recently retired after 44 years in the Property/Casualty Insurance business. Mr. Duffey began his insurance career in 1980 after attending Shippensburg University. He was owner/partner of CFPM Insurance in Waynesboro for 31 years and most recently a Senior Account Executive for Blue Ridge Risk Partners. The Board of Directors values Mr. Duffey's experience as a business and community leader. Mr. Duffey has been very active in the Corporation's Franklin County market area having served on numerous boards in leadership positions of non-profit community development organizations. | | Gregory I. Snook - Age 67 | | Independent Director | | Year Became Director: 2022 | | Committees: Compensation and Personnel, Trust | | Mr. Snook has been the President and CEO of the Washington County Industrial Foundation (CHIEF), an organization which helps develop real estate for the purpose of enhancing economic and community development for business and industrial expansion in Washington County, since 2011. He is the Executive Director of the Alice Virginia and David W. Fletcher Foundation, which provides aid and encouragement to charitable organizations. | | Mr. Snook has served on the Hagerstown Community College Board of Trustees since 2007, is a member of the Washington County Chamber of Commerce and served as President of the Board of County Commissioners of Washington County from 1990-2006. He also previously served as Chairman of the Board of Trustees of the Meritus Medical Center and currently services on Meritus Medical School of Osteopathic Medicine. | | Mr. Snook attended Hagerstown Community College and is a graduate of Leadership Maryland. As a lifelong resident of Washington County, Maryland, Mr. Snook brings to the Board a wealth of experience and knowledge and is active in various committees and community organizations. The Board values his understanding of board governance and strong business acumen. |

  7. CLASS A DIRECTORS (Term expires 2026)

    CLASS A DIRECTORS (Term expires 2026)

  8. CLASS A DIRECTORS (Term expires 2026)

    | G. Warren Elliott - Chairman of the Board - Age 70 | | Independent Director | | Year Became Director: 1991 | | Board Chair since 2012 | | Board Vice-Chair: 2010-2011 | | Committee Chair: Compensation and Personnel and Executive | | Committees: Asset-Liability, Audit, Enterprise Risk, Nominating and Corporate Governance, Strategic | | Mr. Elliott graduated with honors with a B.A. in Public Administration and an M.S. in Public Administration from Shippensburg University in 1976 and 1977 respectively. He is a Distinguished Alumnus of Shippensburg University and in 2014 he was presented an honorary Doctoral degree in Public Service. He is also a Distinguished Alumnus and Centennial Fellow of Penn State Mont Alto. | | Mr. Elliott is currently President of Cardinal Crossings, Inc. and CCI Properties, LLC, municipal government consulting and real estate investment firms. From 1991 to 1995 he served as an adjunct faculty member at Shippensburg University teaching state and local government. Mr. Elliott also served Franklin County as a Commissioner for many years and as Chairman of the Board of Commissioners from 1996 to 2007. Mr. Elliott has been recognized by a number of civic organizations with awards. In 2023, he was recognized as one of fifty Pennsylvanians over the age of 50 for community leadership. Mr. Elliott has served and continues to serve on the boards of numerous organizations within the Corporation’s trade area. He also serves as a member of the Chesapeake Bay Commission and as President of the Historic Letterkenny Chapel and 9/11 Memorial Park Board. The Board of Directors values Mr. Elliott’s considerable knowledge regarding county and local government, his entrepreneurial experience with business and sales, as well as the leadership skills he has developed through his service in Franklin County government and civic service. | | Craig W. Best - Age 64 | | President - Franklin Financial Services Corporation and Farmers and Merchants Trust Company of Chambersburg | | Year Became Director: 2025 | | Mr. Best joined Franklin Financial and F&M Trust as the President on January 14, 2005. He was appointed as a Class A Director on January 16, 2025. Mr. Best previously served as Chief Executive Officer and director for Peoples Financial Services Corp., Scranton, Pennsylvania and its wholly owned subsidiary, Penn Security Bank and Trust Company, Scranton, Pennsylvania, from May 2020 until December 31, 2024. Prior to that and upon the completion of a merger with Penseco Financial Services Corporation, from November 2013 until May 2020, Mr. Best served as the President and Chief Executive Officer of Peoples Financial Services Corp. and Peoples Security Bank and Trust Company. From 2006 until November 2013, he served as President and Chief Executive Officer of Penseco Financial Services Corporation and its wholly owned subsidiary, Penn Security Bank and Trust Company. Prior to that, Mr. Best served as Chief Operating Officer of First Commonwealth Bank, a $6.2 billion financial services institution headquartered in Indiana, Pennsylvania, from July 2000 to December 2005 The Pennsylvania Banking Code requires that a bank president be a member of the bank’s board of directors. In addition, the Board believes that it is important that the President serve as a Director so that the President may interact with his fellow Directors on a peer to peer basis. The Board of Directors values Mr. Best’s depth and breadth of experience in the banking industry and has concluded he is qualified to serve as a director. | | Stanley J. Kerlin - Age 71 | | Independent Director | | Year Became Director: 2006 | | Committee Chair: Asset-Liability | | Committees: Enterprise Risk, Executive, Trust | | Mr. Kerlin graduated Cum Laude with a B.A. Degree in History from Elizabethtown College in 1976 and a J.D. Degree from Dickinson School of Law in 1979. Mr. Kerlin has engaged in the active practice of law for over 45 years and has owned and operated his own law practice as both a partner and a sole practitioner. Mr. Kerlin is active in his church and in several community and political organizations within the Corporation's Fulton and Huntingdon County market area. Mr. Kerlin's knowledge of business and management provide valuable insight to the Board. The Board of Directors values Mr. Kerlin’s perspective as a lawyer and community leader in the Corporation’s Fulton and Huntingdon County market area. | | Kimberly M. Rzomp - Age 68 | | Independent Director | | Year Became Director: 2019 | | Committees: Asset-Liability, Audit, Enterprise Risk, Strategic, Trust |

  9. CLASS A DIRECTORS (Term expires 2026)

    | Ms. Rzomp graduated from Lycoming College in 1978 with a B.A. in Economics and Business Administration and Shippensburg University in 1987 with an M.B.A. | | Ms. Rzomp is the former (retired) Chief Financial Officer for Summit Health, a $600 million non-profit health care system located in south-central Pennsylvania. WellSpan Health acquired Summit Health in 2018 at which time the Franklin Region became known as WellSpan SummitHealth. Summit Health is comprised of two acute care hospitals, Chambersburg and Waynesboro Hospitals, a cancer care center, and a medical group of 250 providers. In her role, she was the primary corporate officer for Board committees including Finance, Audit and Compliance, and Investment. She was a voting member of Summit Physician Services Board of Directors, and Treasurer for all Boards of Summit Health. | | Ms. Rzomp was a former volunteer Board member for the Shook Home and United Way of Franklin County. Ms. Rzomp’s knowledge of business and management, financial operations, auditing and compliance, financial planning, and risk management is valuable to the Board. |

  10. CLASS C DIRECTORS (Term expires 2027)

    CLASS C DIRECTORS (Term expires 2027)

  11. CLASS C DIRECTORS (Term expires 2027)

    | Kevin W. Craig - Age 60 | | Independent Director | | Year Became Director: 2020 | | Committee Chair: Audit | | Committees: Asset-Liability, Enterprise Risk, Executive, Nominating and Corporate Governance, Strategic | | Mr. Craig graduated with a B.S. in Accounting from the Pennsylvania State University in 1987. After graduation he worked for Ernst & Young where he received his certified public accounting license (currently inactive). | | Mr. Craig is the CEO of Pro-Cut Construction Services, Inc., a regional concrete sawing and drilling contractor. He is the former owner of DriveKore, Inc., a regional construction tool and fastener supply company. His career spans over 35 years, beginning as a CPA at Ernst and Young and then holding CFO positions at several venture capital backed companies before purchasing DriveKore, Inc. in 1999. He previously was the President and Treasurer of the West Shore Country Club in Camp Hill, PA. The Board of Directors values Mr. Craig’s accounting and business expertise and his insights pertaining to the construction industry and privately held businesses. He is a lifelong resident of Central Pennsylvania and is an active business and community leader. | | Daniel J. Fisher - Age 68 | | Independent Director | | Year Became Director: 2010 | | Committee Chair: Nominating and Corporate Governance | | Committees: Audit, Compensation and Personnel, Executive, Strategic | | Mr. Fisher graduated from Muhlenberg College with a B.A. in Business Administration in 1978 and from Lehigh University with a MS in Management Science in 1986. | | Mr. Fisher retired as President and CEO of D. L. Martin Company on June 30, 2017 and remains active on its Board, and as an Operations Consultant. Mr. Fisher also serves on the Board of Managers of Alliance Elevator Systems, Greencastle, PA. He also holds a minority position and serves on the Board of Structural Elements, Hagerstown, MD. The Board of Directors values Mr. Fisher’s manufacturing background and experience. Mr. Fisher is active in his community and the Corporation’s Franklin County market area, where he has served and continues to serve on various boards. | | Donald H. Mowery - Age 73 | | Independent Director | | Year Became Director: 2006 | | Committee Chair: Enterprise Risk | | Committees: Executive, Nominating and Corporate Governance |

  12. CLASS C DIRECTORS (Term expires 2027)

    | Mr. Mowery is the sole member of D H Mowery Investments, LLC investing in equities and real estate partnerships. Mr. Mowery was the third-generation former owner and CEO of R. S. Mowery & Sons, Inc., a regional construction contracting firm founded in 1925; having sold this business in 2017. Additionally, Mr. Mowery was the managing partner of RSM Associates, LP, a real estate development firm focusing on the development, leasing and management of business centers and industrial parks; said business being recently dissolved. His career in construction and real estate development spans over 55 years, beginning as a laborer in 1968 and advancing through various positions over the years. Mr. Mowery received a B.S. in Civil Engineering in 1974 from Drexel University. He has completed post-baccalaureate studies in engineering and construction management at Pennsylvania State University. Mr. Mowery is a retired Registered Professional Engineer. Mr. Mowery's business and leadership expertise provide our Board with valuable insights, particularly pertaining to the construction industry, real estate development, and family businesses. His engineering and construction background and real estate development experience bring valuable expertise to the Board. As a life-long resident of the area, Mr. Mowery is a well-known and respected member of the community, which provides positive exposure for the Corporation in the market area that he represents. |

  13. 2024 Director Compensation

    2024 Director Compensation Director compensation, including fees and other forms of compensation are set annually by the Compensation and Personnel Committee. The following table sets forth the components of compensation for non-employee directors for 2024.

  14. 2024 Director Compensation

    | Board Fees | 2024 | | Board Chair Annual Retainer | $52,500 | | Vice Chair Annual Retainer | $13,125 | | Annual Board Retainer - Franklin Financial | $19,000 | | Annual Board Retainer - F&M Trust | $23,000 | | Audit Committee Chair Annual Retainer | $10,000 | | Committee Chair Annual Retainer | $5,000 | | Franklin Financial Meeting fee | $10,000 | | Committee Meeting Fee (Franklin Financial or F&M Trust) | $750 |

  15. 2024 Director Compensation

    The following table provides certain summary information concerning the total compensation paid or accrued by Franklin Financial and F&M Trust in 2024 to each non-employee member of the Board of Directors.

  16. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  17. DIRECTOR COMPENSATION

    | | Fees Earned | | | | | or Paid in | Stock | | | Name | Cash (1) | Awards (2) | Total | | Martin R. Brown | $71,250 | $13,060 | $84,310 | | Kevin W. Craig | 74,750 | 7,836 | 82,586 | | Gregory A. Duffey | 71,250 | 13,060 | 84,310 | | G. Warren Elliott | 122,500 | 26,120 | 148,620 | | Daniel J. Fisher | 68,000 | 13,060 | 81,060 | | Allan E. Jennings, Jr. | 86,624 | 13,060 | 99,684 | | Stanley J. Kerlin | 69,000 | 13,060 | 82,060 | | Donald H. Mowery | 63,500 | 13,060 | 76,560 | | Kimberly M. Rzomp | 69,250 | 7,836 | 77,086 | | Gregory I. Snook | 61,250 | 7,836 | 69,086 |

  18. DIRECTOR COMPENSATION

    _____________________ (1)The amount reported is the aggregate dollar value of all fees earned (even if deferred) or paid in cash for services as a director in 2023, including annual retainer fees, committee and/or chairmanship fees and meeting fees. As an employee of the Corporation, Mr. Henry’s compensation is not included in this table. Directors have the option to select to receive a portion of their Board retainer fees in stock rather than cash and this value is reported in this total. (2)The amounts reported in this column reflect the dollar amount of the compensation expense to be recognized in accordance with FASB ASC Topic 718 in connection with awards of restricted stock. Director fees payable by F&M Trust are eligible to be deferred pursuant to the Farmers and Merchants Trust Company of Chambersburg Directors’ Deferred Compensation Plan (the “Director Deferred Compensation Plan”). Participation in the Director Deferred Compensation Plan is voluntary and each participant may elect each year to defer all or a portion of their F&M Trust director’s retainer. Each participant directs the investment of their own account among various publicly available mutual funds designated by the Bank’s Investment and Trust Services department. Growth of each participant’s account is a result of investment performance and is not the result of an interest factor or interest formula established by the participant or the Bank. The balance in such director’s deferred benefit account is payable to a designated beneficiary within 60 days upon the first to occur of the director’s retirement from the Board or death. The director may select a lump sum payout or may elect to receive a payout over a period of up to five years. Director Brown elected to defer $23,000 in 2024 and is the only director who made such an election in 2024. At the 2019 Annual Meeting of Shareholders, the Directors recommended, and the shareholders approved the Stock Plan which was effective February 28, 2020, the date it was adopted by the Board of Directors. The Stock Plan allows for the award of various types of equity compensation to be awarded to directors as a component of long-term compensation. Each year, under the terms of the Stock Plan, the Compensation and Personnel Committee establishes two distinct performance criteria: (1) net income versus budget, and (2) return on equity (ROE) compared to a defined peer group performance. Performance is measured as: “Threshold”, “Target”, and “Outstanding” against the performance criteria. The equity compensation awards are made annually during the first quarter of the calendar year after all of the performance criteria results are finalized for the Corporation and the peer group. The Compensation and Personnel Committee is responsible for reviewing the plan results prepared by Bank Management and determining the award levels in accordance with the Stock Plan for both the Board of Directors and Executive Officers. There were no awards granted during the period four business days before and one business day after the filing of a Form 10-K or 10-Q, or the release of material nonpublic information on Form 8-K The following illustrates the structure of the Stock Plan in place for awards made in 2024 for the Board of Directors:

  19. DIRECTOR COMPENSATION

    | | | Performance Level Goals | | | | Performance Criteria | Criterion Weighting | Threshold | Target | Outstanding | | Net Income v. Budget | 40% | 95%-99% of budget | 100%-110% of budget | > 110% of budget | | ROE Peer Performance | 60% | 95%-99% of peer median | 100%-110% of peer median | > 110% of peer median |

  20. DIRECTOR COMPENSATION

    The number of shares available for award to Directors is based upon the participants role on the Board of Directors and the type of stock award (e.g., restricted stock, incentive stock options) being granted. The stock awards made in a calendar year are based upon the results of the prior year. Based on 2023 results, the Corporation achieved the Outstanding goal for the net income criteria and the ROE criteria. As a result, a Stock Plan award of 4,900 shares (in the form of Restricted Stock) for the Board of Directors was approved by the Compensation and Personnel Committee and was awarded in 2024, based on 2023 results. The following shows the number of shares of restricted stock available for award and the number of shares awarded to the Board of Directors in 2024 for the 2023 performance results. These shares will fully vest in one year.

  21. DIRECTOR COMPENSATION

    | | Shares Available for Award | | | Shares Awarded | | Position | Threshold | Target | Outstanding | Per Director | | Board Chair | 330 | 660 | 1,000 | 1,000 | | Committee Chairs | 165 | 330 | 500 | 3,000 | | Directors | 100 | 200 | 300 | 900 |

  22. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE

  23. SUMMARY COMPENSATION TABLE

    | | | | | Non-Equity | | | | | | | | Incentive | | | | Name and | | | Stock | Plan | All Other | | | Principal | | Salary | Awards | Compensation | Compensation | Total | | Position | Year | (1) | (2) | (3) | (4) | | | Timothy G. Henry | 2024 | 503,074 | 52,240 | 176,076 | 31,011 | 762,401 | | President & Chief | 2023 | 479,128 | 39,000 | 218,003 | 30,089 | 766,220 | | Executive Officer | | | | | | | | Mark R. Hollar | 2024 | 284,700 | 32,337 | 63,346 | 25,964 | 406,347 | | Executive Vice President | 2023 | 273,754 | 24,148 | 79,389 | 23,962 | 401,253 | | Chief Financial Officer | | | | | | | | Charles B. Carrol1, Jr. (5) | 2024 | 333,216 | 33,956 | 103,297 | 27,477 | 497,946 | | Executive Vice President | 2023 | 317,356 | - | 115,042 | 16,155 | 448,553 | | Chief Operations Officer | | | | | | |

  24. SUMMARY COMPENSATION TABLE

    _____________________ (1)The amounts reported in this column consist of base salary earned during the indicated year. (2)The amounts reported in this column reflect the dollar amount of the compensation expense to be recognized in accordance with FASB ASC Topic 718 in connection with awards of restricted stock during the reported year. (3)The amounts reported in this column consist of cash payouts earned and accrued in the indicated year in respect of the Corporation's performance for that year under the Senior Management Annual Incentive Plan, a non-equity incentive compensation plan. (4)The components of all other compensation are reported in the All Other Compensation table that follows. (5) Mr. Carroll joined the Corporation in 2023 and was not eligible for a Stock Plan award in 2023 based on the 2022 results.

  25. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE The following table presents the compensation considered to be actually paid to the Principle Executive Officer (PEO), Mr. Henry and the average compensation paid to the other non-PEO Named Executive Officers (Other NEOs), collectively as compared to the compensation reported in the Summary Compensation Table for the years presented.

  26. PAY VERSUS PERFORMANCE

    | | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO | Average Summary Compensation Table Total for Other NEOs | Average Summary Compensation Actually Paid for Other NEOs | Value of Initial Fixed $100 Investment Based On Total Shareholder Return | Net Income | | | (1) | (2) | (3) | (4) | (5) | (6) | | Year | | | | | | $000's | | 2024 | $762,401 | $738,618 | $452,147 | $439,964 | $102.17 | $11,099 | | 2023 | 766,220 | 725,355 | 424,903 | 393,257 | 103.53 | 13,598 | | 2022 | 689,368 | 717,306 | 355,740 | 395,012 | 113.44 | 14,938 |

  27. PAY VERSUS PERFORMANCE

    (1) Compensation as reported in the Summary Compensation Table for the PEO Timothy G. Henry, for the years indicated. (2) Compensation actually paid to the PEO calculated each year and reflects the respective amounts set forth in column (1) of the table above, adjusted as set forth in the table below, as determined in accordance with SEC rules.

  28. PAY VERSUS PERFORMANCE

    | | 2024 | 2023 | 2022 | | Summary Compensation Table Total | $762,401 | $766,220 | $689,368 | | Adjustments: | | | | | Less: amounts reported under the "Stock Awards" column in the Summary Compensation Table | (52,240) | (39,000) | (79,848) | | Plus: fair value of awards granted during the year that remain unvested as of year end | 59,800 | 37,860 | 72,200 | | Plus: fair value of awards granted during the year that vested during the year | - | - | 12,788 | | Change in fair value of outstanding and unvested awards from prior years still outstanding at covered year-end | (24,056) | (34,188) | 22,868 | | Change in fair value for awards granted in prior years that vested in the covered year | (7,287) | (5,537) | (70) | | Compensation Actually Paid | $738,618 | $725,355 | $717,306 |

  29. PAY VERSUS PERFORMANCE

    (3) The average of the total compensation reported in the Summary Compensation Table for the Other NEOs. Included in the average figures shown for 2024 and 2023 are Messrs. Hollar and Carroll and for 2022 Messrs. Hollar and Butz (no longer reported as an NEO). (4) Average compensation actually paid to the Other NEOs for each year reflects the respective amounts set forth in column (3) of the table above, adjusted as set forth in the table below, as determined in accordance with SEC rules.

  30. PAY VERSUS PERFORMANCE

    | | 2024 | 2023 | 2022 | | Summary Compensation Table Total | $452,147 | $424,903 | $355,740 | | Adjustments: | | | | | Less: amounts reported under the "Stock Awards" column in the Summary Compensation Table | (33,147) | (12,074) | (51,156) | | Plus: fair value of awards granted during the year that remain unvested as of year end | 37,943 | 11,721 | 44,692 | | Plus: fair value of awards granted during the year that vested during the year | - | - | 9,591 | | Change in fair value of outstanding and unvested awards from prior years still outstanding at covered year-end | (14,938) | (29,792) | 36,178 | | Change in fair value for awards granted in prior years that vested in the covered year | (2,041) | (1,501) | (33) | | Compensation Actually Paid | $439,964 | $393,257 | $395,012 |

  31. PAY VERSUS PERFORMANCE

    (5) Total shareholder return shows the value at each year-end assuming the investment of $100 on the last day December 31, 2021 and the reinvestment of all dividends during the years. (6) Net income of the Corporation for the reported year. Relationship Between Compensation Actually Paid and Performance Measures The following table shows the relationship between the compensation actually paid (CAP) to the change in net income and total shareholder return measured by the percentage change, year-over-year, for the three year period.

  32. PAY VERSUS PERFORMANCE

    | | | Average | | | | | | Summary | | | | | Compensation | Compensation | Total | | | | Actually Paid | Actually Paid | Shareholder | | | Year | to PEO | to Other NEOs | Return | Net Income | | 2024 | 1.8% | 11.9% | -1.3% | -18.4% | | 2023 | 1.9% | -0.4% | -8.7% | -9.0% | | 2022 | -2.6% | 7.8% | 13.4% | -23.8% |

  33. PAY VERSUS PERFORMANCE

    Outstanding Stock Option and Other Equity Awards at Fiscal Year End The following table provides certain information with respect to the executive officers named in the Summary Compensation Table appearing above concerning stock and equity awards which were outstanding on December 31, 2024. OUTSTANDING EQUITY AWARDS (1)

  34. PAY VERSUS PERFORMANCE

    | | | | Option Awards | | | Stock Awards | | | | | | Number of Securities | Option | Option | Number of Shares | Mark Value of Shares | | | | | Underlying Unexercised | Exercise | Expiration | That Have Not | of Stock That Have | | Name | Grant Date | | Options Exercisable (2) | Price $ | Date | Vested (#) | Not Vested ($) (3) | | Timothy G. Henry | 2/23/2017 | (ISO) | 2,900 | 30.00 | 2/23/2027 | | | | | 2/22/2018 | (ISO) | 2,927 | 34.10 | 2/22/2028 | | | | | 7/1/2024 | (ESPP) | 896 | 26.87 | 6/30/2025 | | | | | 3/1/2022 | (RS) | | | | 667 | 19,943 | | | 3/1/2023 | (RS) | | | | 800 | 23,920 | | | 3/1/2024 | (RS) | | | | 2,000 | 59,800 | | Mark R. Hollar | 2/25/2016 | (ISO) | 3,000 | 21.27 | 2/25/2026 | | | | | 2/23/2017 | (ISO) | 3,000 | 30.00 | 2/23/2027 | | | | | 2/22/2018 | (ISO) | 2,927 | 34.10 | 2/22/2028 | | | | | 7/1/2024 | (ESPP) | 514 | 26.87 | 6/30/2025 | | | | | 3/1/2022 | (RS) | | | | 413 | 12,349 | | | 3/1/2023 | (RS) | | | | 496 | 14,830 | | | 3/1/2024 | (RS) | | | | 1,238 | 37,016 | | Charles B. Carroll, Jr. | 7/1/2024 | (ESPP) | 451 | 26.87 | 6/30/2025 | | | | | 3/1/2024 | (RS) | | | | 1,300 | 38,870 |

  35. PAY VERSUS PERFORMANCE

    (1)Awards reflect Incentive Stock Options (ISO) and restricted stock (RS) granted under the Stock Plan, and options granted under the Employee Stock Purchase Plan (ESPP), as indicated. (2)Reflects the number of shares of stock underlying unexercised options that are exercisable as of December 31, 2024. (3)Calculated using the December 31, 2024 closing price of $29.90 per share. The following table shows the vesting schedule for the outstanding restricted stock awards to the Named Executive Officers:

  36. PAY VERSUS PERFORMANCE

    | | Restricted Shares Vesting on: | | | | | Name | March 1, 2025 | March 1, 2026 | March 1, 2027 | Total | | Timothy G. Henry | 1,733 | 1,067 | 667 | 3,467 | | Mark R. Hollar | 1,073 | 661 | 413 | 2,147 | | Charles B. Carroll, Jr. | 434 | 433 | 433 | 1,300 |

  37. PAY VERSUS PERFORMANCE

    Employment Agreements And Potential Payments ‎Upon Termination Or Change In Control The Corporation and F&M Trust entered into employment agreements (each, an “Employment Agreement” and together, the “Employment Agreements”) with Timothy G. Henry, Chief Executive Officer of the Corporation and F&M Trust, Craig W. Best, President of the Corporation and F&M Trust, Mark R. Hollar, Executive Vice President, Chief Financial Officer and Treasurer of the Corporation and F&M Trust, and Charles B. Carroll, Jr., Executive Vice President, Chief Operating Officer of F&M Trust (each an “Executive”). The Employment Agreement for Mr. Henry is for three (3) years beginning on March 1, 2022 and shall automatically renew for an additional one (1) year term on each anniversary date unless notice to terminate is given by either party at least one hundred and eighty (180) days prior to the anniversary date of the Employment Agreement. Under the Employment Agreement, the Executive is entitled to receive the following compensation and benefits in connection with their services as an executive officer: annual base salary which may be increased from time-to-time, consideration for bonuses each year as provided for under short- and long-term incentive plans approved by the Corporation, paid time off and participation in employee benefit plans. In addition, Mr. Henry will be provided with a Corporate vehicle and the payment of certain club membership dues. The Employment Agreement for Mr. Best is for three (3) years beginning on January 14, 2025, and if not terminated pursuant to the terms of the Employment Agreement shall end on January 13, 2028. Under the Employment Agreement, the Executive is entitled to receive the following compensation and benefits in connection with their services as an executive officer: annual base salary which may be increased from time-to-time, consideration for bonuses each year as provided for under short- and long-term incentive plans approved by the Corporation, paid time off and participation in employee benefit plans. In addition, Mr. Best will be provided with a Corporate vehicle and the payment of certain club membership dues. The Employment Agreement for Mr. Hollar is for three (3) years beginning on March 1, 2022 and shall automatically renew for an additional one (1) year term on each anniversary date unless notice to terminate is given by either party at least one hundred and eighty (180) days prior to the anniversary date of the Employment Agreement. Under the Employment Agreement, the Executive is entitled to receive the following compensation and benefits in connection with their services as an executive officer: annual base salary which may be increased from time-to-time, consideration for bonuses each year as provided for under short- and long-term incentive plans approved by the Corporation, paid time off and participation in employee benefit plans The Employment Agreement for Mr. Carroll is for three (3) years beginning on January 3, 2023 and shall automatically renew for an additional one (1) year term on each anniversary date unless notice to terminate is given by either party at least one hundred and eighty (180) days prior to the anniversary date of the Employment Agreement. Under the Employment Agreement, the Executive is entitled to receive the following compensation and benefits in connection with their services as an executive officer: annual base salary which may be increased from time-to-time, consideration for bonuses each year as provided for under short- and long-term incentive plans approved by the Corporation, paid time off and participation in employee benefit plans. In addition, Mr. Carroll will be provided with the payment of certain club membership dues. The Employment Agreements may be terminated (a) by the Corporation with or without Cause (as defined in the Employment Agreements), (b) by the Executive with or without Good Reason (as defined in the Employment Agreements) or (c) as a result of retirement or Disability (as defined in the Employment Agreements). The Employment Agreements provide for severance benefits in the event that the Executive’s employment is terminated: (a) by the Corporation or F&M Trust without Cause or by the Executive for Good Reason prior to a Change in Control (as defined in the Employment Agreements) or (b) by the Corporation or F&M Trust without Cause after a Change in Control. In the event the Executive’s employment is terminated by the Corporation or F&M Trust without Cause or by the Executive for Good Reason prior to a Change in Control, the Executives will be entitled to receive the following compensation and benefits: (a) F&M Trust shall pay Executive an amount equal to the Executive’s remaining Annual Base Salary (as defined in the Employment Agreements) that would otherwise be due and payable under the Employment Agreement to the Executive for the remaining employment period for Messrs. Henry, Hollar and Carroll minus applicable taxes and withholdings, payable in equal monthly installments over the remaining employment period, and (b) for a period of up to two (2) years, Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits. For Mr. Best, the amount payable to the Executive shall be (a) equal to one (1) year’s annual base salary, minus applicable taxes and withholdings, payable in equal monthly installments over one (1) year, and (b) for a period of up to one (1) year, Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits In the event the Executive’s employment is terminated without Cause after a Change in Control, the Executive will be entitled to receive the following compensation and benefits from F&M Trust: (a)Mr. Henry shall receive a lump sum amount equal to 2.99 times the Executive’s annual base salary, minus applicable taxes and withholdings, payable within thirty (30) days of separation of service, and (b) for a period of up to two (2) years Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits or, if F&M Trust cannot legally provide such benefits because Executive is no longer an employee, or future law or plans do not permit so, F&M Trust shall reimburse Executive in an amount equal to the monthly premium paid by him to obtain comparable coverage. (b)Mr. Best shall receive a lump sum amount equal to (1) 1.5 times the Executive’s annual base salary, minus applicable taxes and withholdings, payable within thirty (30) days of separation if the separation occurs within one (1) year after a change of control and within 18 months of the effective date of the Employment agreement, or (2) 2.99 times the Executive’s annual base salary, minus applicable taxes and withholdings, payable within thirty (30) days of separation if the separation occurs within one (1) year after a change of control and after 18 months of the effective date of the Employment agreement. (c)Mr. Hollar shall receive a lump sum amount equal to 2.5 times the Executive’s annual base salary, minus applicable taxes and withholdings, payable within thirty (30) days of separation of service, and (b) for a period of up to two (2) years Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits or, if F&M Trust cannot legally provide such benefits because Executive is no longer an employee, or future law or plans do not permit so, F&M Trust shall reimburse Executive in an amount equal to the monthly premium paid by him to obtain comparable coverage. In addition, Mr. Hollar shall be entitled to receive an additional payment related to the present value of unearned pension benefits, which decreases over time through November 2, 2026, if terminated without cause after a Change in Control

  38. PAY VERSUS PERFORMANCE

    (d)Mr. Carroll shall receive a lump sum amount equal to 2.5 times the Executive’s annual base salary, minus applicable taxes and withholdings, payable within thirty (30) days of separation of service, and (b) for a period of up to two (2) years Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits or, if F&M Trust cannot legally provide such benefits because Executive is no longer an employee, or future law or plans do not permit so, F&M Trust shall reimburse Executive in an amount equal to the monthly premium paid by him to obtain comparable coverage. Upon termination of each Employment Agreement, the Executive is subject to certain customary confidentiality and non-competition provisions as provided in each Employment Agreement which such confidentiality and non-competition provisions shall survive termination in accordance with their terms. Equity Compensation Plan Information The following table summarizes share and exercise price information relating to Franklin Financial's equity compensation plans as of December 31, 2024:

  39. “Compensation” means base salary, wages, annual bonuses and commissions paid to an Eligible Employee by the Company or a Participating Subsidiary as compensation for services to the Company or Participating Subsidiary, before deduction for any salary deferral contributions made by the Eligible Employee to any tax-qualified or nonqualified deferred compensation plan, including overtime, vacation pay, holiday pay, jury duty pay and funeral leave pay, but excluding education or tuition reimbursements, imputed income arising under any group insurance or benefit program, travel expenses, business and relocation expenses, and income received in connection with stock options or other equity-based awards.

    “Compensation” means base salary, wages, annual bonuses and commissions paid to an Eligible Employee by the Company or a Participating Subsidiary as compensation for services to the Company or Participating Subsidiary, before deduction for any salary deferral contributions made by the Eligible Employee to any tax-qualified or nonqualified deferred compensation plan, including overtime, vacation pay, holiday pay, jury duty pay and funeral leave pay, but excluding education or tuition reimbursements, imputed income arising under any group insurance or benefit program, travel expenses, business and relocation expenses, and income received in connection with stock options or other equity-based awards.