President's Letter

From the 2009 Annual Report

By Peter L. Judkins
President & Chief Executive Officer

I am pleased to say that Franklin Savings Bank continues to stand out as a leader in the Maine banking industry.  Even with the pressures brought on by the national mortgage crisis and a less than prosperous local economy, the bank has achieved relatively strong financial results. Earnings, although at a low point when considering the bank’s performance over the past decade, are still strong relative to others in the business of banking. It has never been more apparent than it is today, that Franklin Savings Bank’s conservative nature and approach to managing the bank for the long-term is the correct strategy to keep the bank strong even in a challenging economy.

The bank’s earnings have been negatively impacted by limited demand for new loans, continued refinance activity resulting in lower yields and weakened performance from some of our existing customers who find their family budgets stretched to their limits due to employment or other life issues. Additionally, our expense of operations has increased as a result of the distressed economy; our FDIC insurance expense has grown nearly tenfold from the previous year and our lenders and audit function are being challenged by compliance with increasing regulation and with time spent working with borrowers in distressed situations.
We keep hearing in the national media that banks aren’t lending; well, the reality is that people and businesses aren’t lining up to borrow from banks. Even in this low rate environment, where the Prime Rate for lending has remained stable at 3.25% for the entire year and mortgage rates are near a 10-year low, people and businesses are not in a borrowing mood as they wait for more certain and prosperous times.

Franklin Savings Bank is well positioned to lend money to qualified borrowers when economic conditions improve; we have built a strong foundation for our business going forward. The Bank is extremely well capitalized, with a large amount of liquidity and a dedicated workforce ready to assist our customers as we all return to more prosperous times.

In supporting our communities, Franklin Savings Bank and our Community Development Foundation contributed $115,076 to various non-profit, economic development and educational efforts in 2009. And our employees continue to be very active participants in many community activities and organizations.

Financial Highlights

The bank ended the year with total assets of $311.7 million and net income of $2.67 million.  We closed 181 secondary market loans totaling $22.7 million and 2,398 portfolio loans totaling $100,365,488, including the following:

• 598 consumer mortgages and home equity loans, totaling $56.5 million.

• 487 commercial loans, totaling $34.8 million

• 1,312 non-mortgage consumer loans totaling $9.1 million. 

Overall, these numbers are close to production numbers realized in 2008.   Deposits increased by nearly $5 million dollars or 2.2% above 2008 levels.
We anticipate another challenging year in 2010 and believe our continued conservative banking practices will see us through to more prosperous times.

See the financials