<PAGE> 1
EXHIBIT 99
Information required by Form 11-K with respect to the Franklin Financial
Employees Retirement Savings Plan for the fiscal year ended December 31, 1999
The following financial statements prepared in accordance with the
financial reporting requirements of ERISA include the following:
a. Independent Auditors' Report
b. Statement of Net Assets Available for Plan Benefits, as of December
31, 1999 and 1998
c. Statement of Changes in Net Assets Available for Plan Benefits, for the
Years Ended December 31, 1999 and 1998
d. Notes to Financial Statements
e. Schedule H - Schedule of Assets Held for Investment Purposes
f. Schedule H - Schedule of Reportable Transactions
<PAGE> 2
FRANKLIN FINANCIAL EMPLOYEES
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1999 AND 1998
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
<PAGE> 3
FRANKLIN FINANCIAL EMPLOYEES RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<S> <C>
Independent Auditors' Report.........................................................1-2
Financial Statements:
Statements of Net Assets Available for Plan Benefits..........................3
Statements of Changes in Net Assets Available for Plan Benefits...............4
Notes to Financial Statements...............................................5-8
Schedules:
Assets Held for Investment Purposes...........................................9
Reportable Transactions...................................................10-12
</TABLE>
<PAGE> 4
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors of the
Franklin Financial Employees
Retirement Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of Franklin Financial Employees Retirement Savings Plan as of December
31, 1999 and 1998, and the related statements of changes in net assets available
for plan benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of Franklin
Financial Employees Retirement Savings Plan as of December 31, 1999 and 1998,
and the changes in its net assets available for plan benefits for the years then
ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional anaylsis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
<PAGE> 5
The schedule of assets held for investment purposes that accompanies the Plan's
financial statements does not disclose the historical cost of certain plan
investments held by the Plan custodian. Disclosure of this information is
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974.
Heathcott & Mullaly, P.C.
Brentwood, Tennessee
May 15, 2000
<PAGE> 6
FRANKLIN FINANCIAL EMPLOYEES RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ASSETS: 1999 1998
---------- ----------
<S> <C> <C>
Investments held by Aetna Life Insurance
and Annuity Company, Custodian $1,389,821 978,836
Franklin Financial Corporation common stock 261,775 224,612
Participant loans 16,043 28,291
Cash 2,426 830
---------- ----------
Total investments, at fair value 1,670,065 1,232,569
========== ==========
Receivables:
Employee contributions 281 --
Employer contribution 6,766 1,211
---------- ----------
Total receivables 7,047 1,211
---------- ----------
Total assets $1,677,112 1,233,780
========== ==========
NET ASSETS AVAILABLE FOR PLAN BENEFITS $1,677,112 1,233,780
========== ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 7
FRANKLIN FINANCIAL EMPLOYEES RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ADDITIONS TO NET ASSETS ATTRIBUTED TO: 1999 1998
---------- ----------
<S> <C> <C>
Investment income:
Interest $ 1,766 4,567
Net appreciation in fair value of investments 106,967 33,116
---------- ----------
Total investment income 108,733 37,683
---------- ----------
Contributions
Employer 134,773 80,364
Participants 238,253 194,871
---------- ----------
Total contributions 373,026 275,235
---------- ----------
Total additions 481,759 312,918
---------- ----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 32,817 39,196
Forfeitures 5,610 3,047
---------- ----------
TOTAL DEDUCTIONS 38,427 42,243
---------- ----------
INCREASE IN NET ASSETS 443,332 270,675
NET ASSETS AT BEGINNING OF YEAR 1,223,780 963,105
---------- ----------
NET ASSETS AT END OF YEAR $1,677,112 1,233,780
========== ==========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 8
FRANKLIN FINANCIAL EMPLOYEES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(1) DESCRIPTION OF PLAN
The following description of the Franklin Financial Employees
Retirement Savings Plan provides only general information. Participants
should refer to the Plan agreement for a more comprehensive description
of the Plan's provisions.
(A) GENERAL
The Plan is a defined contribution plan covering all employees
of Franklin National Bank (the Company) who have three months
of service and are age twenty-one or older. The Plan is
subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). Franklin National Bank is a
wholly-owned subsidiary of Franklin Financial Corporation.
(B) CONTRIBUTIONS
Each year, participants may contribute up to 15% of pretax
annual income, as defined in the Plan. Participants may also
contribute amounts representing distributions from other
qualified defined benefit or contribution plans. The Company
contributes 50% of the first 6% of base compensation that a
participant contributes to the Plan. Additional amounts may be
contributed at the option of the Company. Contributions are
subject to certain limitations. Effective January 1, 1998 all
employer contributions are invested in Franklin Financial
Corporation stock.
(C) PARTICIPANTS ACCOUNTS
Each participant's account is credited with the participant's
contribution and allocations of (a) the Company's contribution
and (b) Plan earnings, and charged with an allocation of
administrative expenses, if any. Allocations are based on
participant earnings or account balances, as defined. The
benefit to which a participant is entitled is the benefit that
can be provided from the participant's vested account.
(D) VESTING
Participants are immediately vested in their contributions
plus actual earnings thereon. Vesting in the Company's
matching and discretionary contribution portion of their
accounts plus actual earnings is based on years of continuous
service. A participant is 100 percent vested after 3 years of
service.
5
<PAGE> 9
FRANKLIN FINANCIAL EMPLOYEES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(1) DESCRIPTION OF PLAN, CONTINUED
(D) VESTING, CONTINUED
Participants automatically become fully vested, regardless of
the years of service completed, upon attainment of the Plan's
normal retirement age of 65, upon death, or upon disability.
(E) INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct employee
contributions in any of thirteen investment options including
common stock of Franklin Financial Corporation.
(F) PARTICIPANT LOANS
Participants may borrow from their fund accounts to a maximum
equal to the lesser of $50,000 or 50% of their account
balance. Loan transactions are treated as a transfer to (from)
the investment funds from (to) the Participant notes fund.
Loan terms are limited to five years. The loan term may exceed
five years for the purchase of a primary residence. The loans
are secured by the balance in the participant's account and
bear interest at a rate commensurate with local prevailing
rates as determined by the Plan administrator. Principal and
interest are paid ratably through monthly payroll deductions.
(G) PAYMENT OF BENEFITS
On termination of service due to death, disability or
retirement, a participant may elect to receive either a
lump-sum amount equal to the value of the participant's vested
interest in his or her account, or annual installments. For
termination of service due to other reasons, a participant may
receive the value of the vested interest in their account as a
lump sum distribution.
(H) FORFEITED ACCOUNTS
Forfeitures of nonvested Company contributions are used to
reduce future Company contributions.
6
<PAGE> 10
FRANKLIN FINANCIAL EMPLOYEES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(1) DESCRIPTION OF PLAN, CONTINUED
(I) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company
has the right to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In
the event of Plan termination, participants will become 100
percent vested in their accounts.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
The financial statements of the Plan have been prepared on an
accrual method of accounting.
(B) ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires the plan
administrator to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual
results may differ from those estimates.
(C) INVESTMENTS
Investments are stated at fair value as reported by the
Custodian. Fair values have been determined by quoted prices
on an active market. Shares of mutual funds are valued at
quoted market prices which represent the net assets value of
shares held by the plan at year end.
(D) PAYMENT OF BENEFITS
Benefits are recorded when paid.
(3) INVESTMENTS
The following presents investments at December 31, 1999 and 1998 that
represent 5% or more of the plan's net assets.
7
<PAGE> 11
FRANKLIN FINANCIAL EMPLOYEES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(3) INVESTMENTS, CONTINUED
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Aetna Investments Growth and Income Fund $409,222 $329,624
Aetna Investments Balances Fund 114,977 89,020
Aetna Investments Fixed Account 244,271 244,309
Portfolio Partners MFS Emerging Equities 110,643 --
Fidelity VIP Equity Income Portfolio 116,962 63,501
Fidelity VIP Growth Portfolio 275,803 114,343
Franklin Financial Corporation Common Stock 261,775 224,612
</TABLE>
(4) TAX STATUS
The Plan has received a determination letter in which the Internal
Revenue Service stated the Plan, as currently designed, is in
compliance with the applicable requirements of the Internal Revenue
Code.
(5) RELATED PARTY TRANSACTION
Certain Plan investments are shares of institutional funds managed by
Aetna Life Insurance and Annuity Company. Aetna Life Insurance and
Annuity Company is the custodian of the Plan and, therefore, these
transactions qualify as party-in-interest.
8
<PAGE> 12
FRANKLIN FINANCIAL EMPLOYEES RETIREMENT SAVINGS PLAN
EIN: 62-1376027
PLAN NUMBER: 001
PLAN YEAR ENDED: DECEMBER 31, 1999
SCHEDULE H - SCHEDULE OF ASSETS HELD FOR INVESTMENT
PURPOSES AT END OF YEAR
<TABLE>
<CAPTION>
Identity of Issue, Description of Current
Borrower, Lessor Investment Cost Value
<S> <C> <C> <C>
*Aetna Growth and Income Institutional fund N/A $ 409,222
*Aetna Money Market Money Market N/A 53,264
*Aetna Bond Institutional fund N/A 13,968
*Aetna Balanced Institutional fund N/A 114,977
*Aetna Guaranteed Accumulation Institutional fund N/A 2,425
Account - Short Term
*Aetna Guaranteed Accumulation Institutional fund N/A 315
Account - Long Term
*Aetna Fixed Account #26 Institutional fund N/A 244,271
Portfolio Partners Scudder Int'l Growth Mutual fund N/A 18,395
Portfolio Partners MFS Research Mutual fund N/A 29,576
Growth
Portfolio Partners MFS Emerging Mutual fund N/A 110,643
Equities
Fidelity VIP Equity Income Portfolio Mutual fund N/A 116,962
Fidelity VIP Growth Portfolio Mutual fund N/A 275,803
*Participant Loans 8.25% - 8.75% N/A 16,043
*Franklin Financial Corporation Employer Stock 452,053 261,775
-----------
TOTAL INVESTMENTS $ 1,667,639
</TABLE>
*Party-in-interest to the Plan.
9
<PAGE> 13
FRANKLIN FINANCIAL EMPLOYEES RETIREMENT SAVINGS PLAN
EIN: 62-1376027
PLAN NUMBER: 001
PLAN YEAR ENDED: DECEMBER 31, 1999
SCHEDULE H - SCHEDULE OF REPORTABLE TRANSACTIONS
<TABLE>
<CAPTION>
CURRENT
VALUE OF
ASSET
IDENTITY OF ON
PARTY DESCRIPTION PURCHASE SELLING LEASE EXPENSE COST OF TRANSACTION NET GAIN
INVOLVED OF ASSET PRICE PRICE RENTAL INCURRED ASSET DATE OR LOSS
1) Single Transactions
<S> <C> <C> <C> <C> <C> <C> <C> <C>
*Franklin Employer $103,157 -- -- -- $ 103,157 $ 103,157 --
Financial Corp Stock
2) Series of Nonsecurity Transactions
None reportable.
</TABLE>
10
<PAGE> 14
FRANKLIN FINANCIAL EMPLOYEES RETIREMENT SAVINGS PLAN
EIN: 62-1376027
PLAN NUMBER: 001
PLAN YEAR ENDED: DECEMBER 31, 1999
SCHEDULE H - SCHEDULE OF REPORTABLE TRANSACTIONS
<TABLE>
<CAPTION>
CURRENT
VALUE OF
ASSET
IDENTITY OF ON
PARTY DESCRIPTION PURCHASE SELLING LEASE EXPENSE COST OF TRANSACTION NET GAIN
INVOLVED OF ASSET PRICE PRICE RENTAL INCURRED ASSET DATE OR LOSS
3) Aggregate Transactions in One issue of Securities
<S> <C> <C> <C> <C> <C> <C> <C> <C>
* Aetna Institutional $ 56,043 -- -- -- $56,043 $ 56,043 --
Growth and Fund -- $29,078 -- -- $29,078 $ 29,078 --
Income
* Aetna Money $ 19,394 -- -- -- $19,394 $ 19,394 --
Money Market -- $ 6,172 -- -- $ 6,172 $ 6,172 --
Market
* Aetna $ 21,729 -- -- -- $21,729 $ 21,729 --
Balanced -- $ 8,356 -- -- $ 8,356 $ 8,356 --
*Aetna Fixed Institutional $ 37,088 -- -- -- $37,088 $ 37,088 --
Account #26 Fund -- $46,684 -- -- $46,684 $ 46,684 --
</TABLE>
11
<PAGE> 15
FRANKLIN FINANCIAL EMPLOYEES RETIREMENT SAVINGS PLAN
EIN: 62-1376027
PLAN NUMBER: 001
PLAN YEAR ENDED: DECEMBER 31, 1999
SCHEDULE H - SCHEDULE OF REPORTABLE TRANSACTIONS
<TABLE>
<CAPTION>
CURRENT
VALUE OF
ASSET
IDENTITY OF ON
PARTY DESCRIPTION PURCHASE SELLING LEASE EXPENSE COST OF TRANSACTION NET GAIN
INVOLVED OF ASSET PRICE PRICE RENTAL INCURRED ASSET DATE OR LOSS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio Mutual $ 19,688 -- -- -- $ 19,688 $ 19,688 --
Partners Fund -- $ 3,140 -- -- $ 3,140 $ 3,140 --
MFS
Emerging Eq
Fidelity VIP Mutual $ 52,595 -- -- -- $ 52,595 $ 52,595 --
Equity Fund -- $ 2,516 -- -- $ 2,516 $ 2,516 --
Income
Fidelity VIP Mutual $111,419 -- -- -- $ 111,419 $ 111,419 --
Growth Fund -- $14,641 -- -- $ 14,641 $ 14,641 --
Portfolio
*Franklin Employer $129,190 -- -- -- $ 129,190 $ 129,190 --
Financial Stock
Corp
4) Other Transactions Involving Securities or Parties Involved in Single
Transactions Reportable
None Reportable.
</TABLE>
*Party-in-interest to the Plan.
12
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan has caused this annual report to be signed on the 27th day of June,
2000, by the undersigned thereunto duly authorized.
FRANKLIN FINANCIAL EMPLOYEES RETIREMENT
SAVINGS PLAN
By: /s/ Gordon E. Inman
-------------------------------------------
Gordon E. Inman, Trustee
(Plan Administrator)
By: /s/ Richard E. Herrington
-------------------------------------------
Richard E. Herrington, Trustee
(Plan Administrator)
