8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report:  January 26, 2010

 (Date of earliest event reported) January 26, 2010

FRANKLIN FINANCIAL SERVICES CORPORATION

(Exact name of registrant as specified in its new charter)

Pennsylvania	0-12126	25-1440803
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Indent. No.)

20 South Main Street, Chambersburg, PA	17201
(Address of principal executive office)	(Zip Code)

Registrant's telephone number, including area code            (717) 264-6116

N/A

(Former name or former address, if changes since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a –12 under the Exchange Act (17 CFR 240.14a –12)

o   Pre-commencement communications pursuant to Rule 14d – 2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e – 4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01  Other Events.

The news release of Franklin Financial Services Corporation, dated January 26, 2010 and attached as Exhibit 99.1, announces its earnings for the three and twelve months ended December 31, 2009 and is incorporated by reference herein.

Item 9.01  Financial Statements and Exhibits.

     (c)  Exhibits.

     The following exhibits are filed herewith:

Number                              Description

    99 ..1                         Press Release, dated January 26, 2010 of Franklin Financial Services Corporation

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FRANKLIN FINANCIAL SERVICES CORPORATION
Dated: January 26, 2010	By:	/s/ William E. Snell, Jr.
		William E. Snell, Jr., President and Chief Executive Officer

EX-99.1

January 26, 2010

Franklin Financial reports earnings decline

(Chambersburg) Franklin Financial Services Corporation, the bank holding company of F&M Trust, reported earnings of $6,585,000 for 2009 compared to 2008 earnings of $8,595,000, a decline of 23.4%. Net income for the quarter ended December 31, 2009 was $1,763,000, representing a 76.3% increase when compared to 2008 fourth quarter earnings of $1,000,000.

On a per share basis, diluted earnings were $0.46 and $1.71 for the quarter and twelve months in 2009 compared to $0.26 and $2.24 for the same periods in 2008.

The significant items that negatively impacted earnings during 2009 included increased loan loss provision, higher FDIC insurance premiums, and a $450,000 FDIC special assessment.

“All of these items resulted from the current economic climate and in particular housing, unemployment, and the state of the financial industry,” commented William E. Snell, Jr., president and CEO.  “Our industry is absorbing increased expenses to rejuvenate the FDIC deposit insurance fund that has been depleted by bank failures across the country.  The higher premiums and one-time assessment from the FDIC impacted our company by approximately $1 million in 2009. As a result of the lower interest rate environment, we also experienced a decrease in our net interest income.  And we increased our provision by over $2 million in order to position us for possible loan losses.  On a positive note, we continue to generate growth in  loans, deposits, and trust assets under management.”

Total assets at December 31, 2009 grew by 8.5% over total assets a year earlier to $979.4 million.  At year-end, net loans were up 9.2% to $730.6 million, while total deposits and repurchase agreements increased 14.8% to $794.2 million.  In addition, the market value of trust assets under management grew to $536.5 million at December 31, 2009, an increase of 7.9%.

Franklin Financial is an independent, locally owned and operated bank holding company headquartered in Chambersburg.  Its wholly-owned subsidiary, F&M Trust, has twenty-five community banking offices throughout Cumberland, Franklin, Fulton and Huntingdon counties located in Boiling Springs, Carlisle, Chambersburg, Greencastle, Hustontown, McConnellsburg, Mont Alto, Marion, Newville, Orbisonia, Shippensburg, St. Thomas, Warfordsburg and Waynesboro. Franklin Financial stock is traded on the over-the-counter market under the symbol FRAF.