Franklin Financial Services Corp. /PA/ (NASDAQ:FRAF), a $131.59 million market cap financial institution trading near its InvestingPro Fair Value, announced today the appointment of Craig W. Best as the successor to the current President and Chief Executive Officer, Timothy G. Henry, who is set to retire on April 29, 2025.
The company has maintained a strong track record of dividend payments for 41 consecutive years, currently offering a 4.54% yield. Best, who has a long-standing career in the banking industry, will assume the role of President immediately and will take over as CEO following Henry's retirement.
Best, 64, brings to Franklin Financial a wealth of experience, having previously held the position of CEO at Peoples Financial Services Corp. and its subsidiary, Penn Security Bank and Trust Company. Prior to that, he was the President and CEO of Penseco Financial Services Corporation and its subsidiary until their merger with Peoples Financial Services Corp. His career also includes a tenure as Chief Operating Officer of First Commonwealth (NYSE:FCF) Bank.
This leadership transition comes with a comprehensive employment agreement for Best, who will receive an initial annual base salary of $414,986, which is set to increase to $523,198 by April 30, 2025. The company's overall financial health is rated as FAIR by InvestingPro analysts, with particularly strong scores in profitability and relative value metrics.
The agreement also includes provisions for bonuses, benefits, relocation expenses, a company car, and a restricted stock grant of 1,500 shares of Franklin Financial common stock, which will vest six months after his start date.
The employment agreement outlines conditions for automatic termination, including for "Cause" or without "Good Reason," and specifies severance terms in the event of involuntary termination, with additional stipulations following a "Change in Control." Best is also subject to customary confidentiality and non-competition clauses.
In other recent news, Franklin Financial Services Corp announced the planned retirement of its President and CEO, Timothy G. Henry, set for April 2025. In response, the company's board has formed a succession committee to find a successor.
These are among the recent developments at the company. Franklin Financial also executed a substantial reshuffling of its investment portfolio, selling about $46.7 million in lower-yielding U.S. Treasury debt, resulting in an estimated after-tax loss of $3.4 million.
The proceeds, around $42.4 million, were reinvested in higher-yielding securities, specifically U.S. Agency residential mortgage-backed securities and private-label residential mortgage-backed securities.
This strategic move is expected to offset the loss within approximately 2.3 years through a pay-fixed swap on the new securities. Notably, the transaction is not expected to impact the stockholders' equity or the book value per share.
Furthermore, Franklin Financial has maintained its quarterly dividend, declaring a $.32 per share regular cash dividend, consistent with the previous quarter's distribution.
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