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Franklin Financial strong; UGI solid; PREIT struggles

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Three companies with midstate ties announced quarterly earnings.

Franklin Financial Services Corp.

Franklin Financial Services Corp. reported a net income increase of 71.1 percent in the second quarter ended June 30. The bank holding company of F&M Trust had earnings of about $2.3 million for the second quarter, compared with about $1.4 million for the same quarter a year ago. On a per-share basis, diluted earnings were 55 cents for the quarter, compared with 33 cents for the same period in 2013.

Net income for the first six months of 2014 was about $4.1 million, compared with $2.9 million for the same period in 2013, an increase of 42.6 percent, according to the company’s filing with the federal Securities and Exchange Commission. On a per share basis, diluted earnings for the first six months were 99 cents, compared with 70 cents for the same time in 2013.

Total assets for the quarter were $1.023 billion, a decline of about 1 percent when compared with total assets of $1.033 billion at June 30, 2013. Net loans grew 0.8 percent from a year earlier to $723.2 million, while total deposits and repurchase agreements were down 1.9 percent to $903.0 million. The market value of trust assets under management was $582.6 million on June 30 of this year, representing a 4.5 percent increase from a year earlier.

The company attributed the report to an awakening economy.

“The local economy continues to show glimpses of improvement,” William E. Snell Jr., president and CEO, said in the filing.  “While by no means robust, consumer and small business borrowing are beginning to stir as unemployment and consumer confidence improves. Like most community banks, we have seen loan quality improvement but continue to be challenged by margin compression from the low interest rate environment and the cost of additional regulation.”

F&M Trust operates 25 community banking offices in Cumberland, Franklin, Fulton and Southern Huntingdon counties. Franklin Financial trades its shares over the counter under the symbol FRAF.

UGI Corp.

UGI Corp. reported adjusted net income of $17.1 million, or 15 cents per diluted share, for the quarter ended June 30, compared to $12.4 million, or 11 cents per diluted share, for the prior-year period. Adjusted net income attributable to UGI excludes the impact of market-to-market changes in unsettled commodity hedging instruments at Midstream & Marketing and AmeriGas Propane, according to a news release from the company.

The increase in adjusted net income comes from good results from the midstream and marketing business unit, and to a much lesser extent, improved results at the company’s gas utility, according to the release. In addition, AmeriGas contributed a smaller seasonal loss compared to the prior-year period. The increased net income was partially offset by lower net income from UGI International primarily due to the effects of significantly warmer spring weather, according to the company.

The company’s board of directors also OK'ed a plan to issue three common shares for every two common shares outstanding. The new shares are distributable Sept. 5 to shareholders of record as of Aug. 22. The company also announced an increase of more than 10 percent in the annual dividend rate on its common stock, from $1.18 to about $1.30 on a pre-split basis, or from about 79 cents to 87 cents per share, respectively, after the split, according to a news release. The new quarterly dividend of about 33 cents per share on a pre-split basis, or about 22 cents per share after the split, is payable Oct. 1 to shareholders of record on Sept. 15.

UGI Corp., the Montgomery County-based parent firm of Berks County-based UGI Utilities Inc., trades its shares on the New York Stock Exchange under the ticker symbol UGI.

Pennsylvania Real Estate Investment Trust

Pennsylvania Real Estate Investment Trust, which owns the Capital City Mall in Cumberland County, reported net loss income of $24.1 million, or 40 cents per diluted shared, compared to net loss income of $9 million, or 20 per diluted share, in the second quarter of 2013.

Net loss attributable to the company’s common shareholders was $27.3 million, compared to $12.7 million for the quarter ended June 30, 2013, according to a news release from PREIT. Among several factors for the poor performance, the company cited impairment of assets of $16.1 million in connection with the anticipated sales of North Hanover Mall in York County and Nittany Mall in Center County.

However, the company’s funds from operations, as adjusted, increased by 11.9 percent for the quarter to 47 cents per diluted share; it was 42 cents in the year ago quarter.

Additionally, PREIT announced a 50/50 joint venture partnership agreement with The Macerich Co. to redevelop The Gallery in Philadelphia.

“The joint venture redevelopment project is expected to advance PREIT’s vision to create Philadelphia’s only transit-oriented, retail anchored multi-use property offering accessible luxury retailing and artisan food experiences,” the company said in the release.

Shares of PREIT are traded on the NYSE under the ticker symbol PEI.

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