FRANKLIN FINANCIAL NETWORK, INC. (NYSE:FSB) Files An 8-K Results of Operations and Financial ConditionItem 2.02.
To the extent the information in Item 2.02 relates to a completed fiscal period, such information is incorporated by reference into this Item 2.02.
On December22, 2017, “H.R.1”, formerly known as the “Tax Cuts and Jobs Act”, was signed into law. Among other items, H.R.1 reduces the federal corporate tax rate from 35% to 21% effective January1, 2018. As a result, Franklin Financial Network, Inc. (the “Company”) has concluded that this will cause the Company’s net deferred tax asset to be revalued. The Company’s net deferred tax asset represents net operating loss carryforwards that will be used to reduce corporate taxes expected to be paid in the future as well as differences between the carrying amounts and tax bases of assets and liabilities carried on the Company’s balance sheet. The Company performed an analysis to determine the impact of the revaluation of the deferred tax asset and expects that it will incur a non-cash income tax charge for the fourth quarter of 2017 related to a write down of its deferred tax asset. The Company preliminarily expects the charge to be approximately $5.25million, or $0.38 per diluted share, for the fourth quarter of 2017.
The Company’s revaluation of its deferred tax asset is subject to further clarifications of the new law that cannot be estimated at this time. As such, the Company is unable to make a final determination of the impact of the quarterly and full-year earnings for the period ending December31, 2017 at this time and will provide additional information when it issues its fourth quarter 2017 earnings news release on Wednesday, January24, 2017.
To the extent required, the Company may file one or more amendments to this Current Report on Form 8-K.
Safe Harbor for Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements. Such statements include, but are not limited to, statements related to the impact of H.R.1 on the Company’s valuation of its deferred tax asset and earnings. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “strategies” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Risks and uncertainties that could cause the corporation’s actual results to materially differ from those described in forward-looking statements include those discussed in Item 1A of the corporation’s Annual Report on Form 10-K for the year ended December31, 2016 filed with the Securities and Exchange Commission on March16, 2017. Future events and actual results, financial and otherwise, could differ materially from those set forth in or contemplated by the forward-looking statements herein. Future operating results of the Company are impossible to predict, and no representation or warranty of any kind can be made respecting the present or future accuracy of such forward-looking statements or the ability of the Company to meet its obligations, and no such representation or warranty is to be inferred.
About FRANKLIN FINANCIAL NETWORK, INC. (NYSE:FSB)
Franklin Financial Network, Inc. is a financial holding company. Through its bank subsidiary, Franklin Synergy Bank (the Bank), a commercial bank, the Company provides a range of banking and related financial services. The Company focuses on the provision of services to small businesses, corporate entities, local governments and individuals. It operates through approximately 10 branches in Williamson and Rutherford counties within the Nashville metropolitan area. The Company’s loan portfolio consists of real estate loans, including construction and land development loans, commercial loans and residential loans; commercial and industrial, and consumer and other loans. The Company’s investment securities portfolio consists of both securities classified as available-for-sale and securities classified as held-to-maturity. The Company’s primary sources of funds include deposits.