Farmers National Banc Corp. Announces Earnings for Third Quarter of 2023

Rhea-AI Summary

Farmers National Banc Corp. announces Q3 2023 earnings of $0.36 per share, with 163 consecutive quarters of profitability. Total assets at $4.97 billion. Non-performing asset to total assets of 0.58%. Return on average assets of 1.06%. ROAE and ROATE of 14.5% and 30.3%, respectively.

Positive

• Farmers National Banc Corp. reports earnings per share of $0.36 for Q3 2023, maintaining profitability for 163 consecutive quarters. Total assets at $4.97 billion. Strong asset quality with non-performing asset to total assets ratio of 0.58%. Return on average assets at 1.06%. ROAE and ROATE of 14.5% and 30.3%, respectively.

Negative

• None.

• Earnings per diluted share of $0.36 ($0.40 excluding certain items, non-GAAP) for the third quarter of 2023
• 163 consecutive quarters of profitability
• Purchased hedges to improve asset sensitivity
• Additional FHLB borrowing capacity of $892.6 million as of September 30, 2023
• Available for sale securities not pledged totaled $353.8 million at September 30, 2023
• Strong asset quality with non-performing asset to total assets of 0.58% as of September 30, 2023
• Return on average assets of 1.06% for the third quarter of 2023
• ROAE and ROATE (non-GAAP) of 14.5% and 30.3%, respectively, for the third quarter of 2023

CANFIELD, Ohio--(BUSINESS WIRE)-- Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced net income of $13.3 million, or $0.36 per diluted share, for the three months ended September 30, 2023, compared to $15.4 million, or $0.46 per diluted share, for the three months ended September 30, 2022. Net income for the third quarter of 2023 included pretax items of $268,000 for acquisition related costs, $785,000 for the settlement of a lawsuit and combined net losses of $764,000 on the sale of securities and the sale of other assets. Excluding these items (non-GAAP), net income for the third quarter of 2023 would have been $14.8 million, or $0.40 per diluted share.

Kevin J. Helmick, President and CEO, stated “Despite the rapid increase in interest rates over the past year and a half, Farmers produced solid third quarter financial results reflecting the benefits of our diverse business model as well as our focus on maintaining strong asset quality and controlling operating expenses. These core banking principals create a solid foundation for Farmers to navigate an increasingly uncertain near-term economic environment, while supporting our long-term growth strategies.”

Balance Sheet

Total assets at September 30, 2023, were $4.97 billion compared to $5.07 billion at June 30, 2023 and $4.08 billion at December 31, 2022. The increase from December was primarily due to the acquisition of Emclaire Financial Corp. (“Emclaire”) which added $1.05 billion in assets in the first quarter of 2023. Loans (excluding loans held for sale) have increased by $763.8 million since December 31, 2022 and $13.4 million, or 1.7% annualized, since June 30, 2023. Emclaire was responsible for $740.7 million of the increase in loans since December 31, 2022.

Securities available for sale have declined to $1.21 billion at September 30, 2023 from $1.32 billion at June 30, 2023 and $1.27 billion at December 31, 2022. The decrease since December is due to the gross amount of unrealized losses which totaled $266.5 million at December 31, 2022, compared to a gross unrealized loss of $320.0 million at September 30, 2023. The Company also had sales and runoff from the portfolio during the nine months ended September 30, 2023. These decreases were offset by the addition of $127.0 million in available for sale securities from Emclaire. Bond market volatility is expected to continue through 2023, and the Company expects that it will continue to allow the size of the securities portfolio to shrink to optimize profitability.

Total customer deposits (excluding brokered time deposits) were $4.26 billion at September 30, 2023, compared to $4.25 billion at June 30, 2023, and $3.42 billion at December 31, 2022. The increase from December was driven by $875.8 million in deposits assumed in the acquisition of Emclaire. Competition for deposits remains high and the Company expects this will continue to place pressure on funding costs and deposit volumes.

Total stockholders’ equity equaled $316.0 million at September 30, 2023 compared to $367.0 million at June 30, 2023, and $292.3 million at December 31, 2022. The increase since December is primarily due to the acquisition of Emclaire and an increase in retained earnings offset by an increase in the unrealized loss from accumulated other comprehensive income. The accumulated other comprehensive loss has increased $41.7 million between December 31, 2022 and September 30, 2023 as market rates spiked sharply during the third quarter of 2023.

Liquidity

At September 30, 2023, the Company’s loan to deposit ratio was 70.2% and the Company’s average deposit balance per account (excluding collateralized deposits) was $27,646. The Company has access to an additional $892.6 million of FHLB borrowing capacity at September 30, 2023 along with $353.8 million of available for sale securities that are not pledged. With a deep and diverse deposit base and access to a large amount of additional funding capacity, the Company is well positioned to navigate the current banking landscape.

Credit Quality

The Company’s non-performing loans totaled $18.4 million at September 30, 2023, compared to $18.0 million at June 30, 2023, and $14.8 million at December 31, 2022. The increase since December was primarily due to the addition of Emclaire. Non-performing loans to total loans ratio was 0.58% at September 30, 2023, 0.57% at June 30, 2023, and 0.62% at December 31, 2022. Non-performing assets to total assets was 0.37% at September 30, 2023, and 0.36% at both June 30, 2023, and December 31, 2022. The Company also continues to experience low levels of early stage delinquencies, defined as 30-89 days delinquent. At September 30, 2023, these delinquencies totaled $13.3 million, or 0.42% of total loans. They were $12.3 million, or 0.39% of total loans at June 30, 2023, compared to $9.6 million, or 0.40% of total loans, at December 31, 2022.

The provision for credit losses and unfunded commitments was $243,000 for the third quarter of 2023 compared to $25,000 for the second quarter of 2023 and $448,000 for the third quarter of 2022. Annualized net charge-offs as a percentage of average loans were 0.05% for the three months ended September 30, 2023, compared to 0.10% for the same period in 2022. The allowance for credit losses to total loans was 1.10% at September 30, 2023, compared to 1.11% at June 30, 2023, and 1.12% at December 31, 2022.

Net Interest Income

The Company reported net interest income of $33.8 million in the third quarter of 2023 compared to $34.6 million in the second quarter of 2023 and $31.8 million for the third quarter of 2022. Earning assets were greater in 2023 due to the acquisition of Emclaire but this was partially offset by a decline of 35 basis point in the net interest margin. The net interest margin was 2.86% in the third quarter of 2023 compared to 2.92% for the second quarter of 2023 and 3.21% for the third quarter of 2022. Excluding the impact of acquisition marks and related accretion and PPP interest and fees, the net interest margin (non-GAAP) for the third quarter of 2023 was 2.61% compared to 2.68% for the second quarter of 2023 and 3.19% for the third quarter of 2022. The decline in net interest margin between the third quarter of 2023 and the third quarter of 2022 was due to increases in funding costs outstripping the increase in yields on earning assets. This increase in funding costs has been due to the rapid increase in deposit rates due to intense competition for deposits, the continued Federal Reserve rate hiking cycle, and runoff of deposit balances which are being replaced by more costly wholesale funding. To help offset the continued compression in the Company’s net interest margin, the Company purchased $100.0 million of pay-fixed/receive variable interest rate swaps during the quarter to improve asset sensitivity and net interest income. The hedges have a final maturity of three years and at inception had a pay rate of 4.35%. Based on rates at September 30, 2023, the swaps are expected to generate approximately $960,000 of annualized net interest income.

Noninterest Income

Noninterest income totaled $9.8 million for the three months ended September 30, 2023, compared to $8.8 million for the three months ended September 30, 2022. Service charges on deposit accounts increased to $1.7 million in the third quarter of 2023 compared to the same period in 2022 primarily due to the acquisition of Emclaire. Bank owned life insurance income, other mortgage banking fee income and debit card income have also increased in the third quarter of 2023 compared to the third quarter of 2022 due to the Emclaire acquisition. Insurance agency commissions are flat in the third quarter of 2023 compared to the second quarter of 2022 but growth for the year has been solid as growth in the insurance business and increased annuity sales have bolstered income. Security losses in the third quarter of 2023 totaled $624,000 compared to losses of $17,000 in the third quarter of 2022. The Company sold securities during the quarter to improve net interest margin in future periods. Investment commissions are up slightly for the quarter ended September 30, 2023 compared to the quarter ended September 30, 2022, as customers have been more interested in the annuities mentioned above as opposed to traditional investment products. Net gains on the sale of loans have increased but are still sluggish due to the high level of interest rates and lack of loan volume.

Noninterest Expense

Noninterest expense was $27.7 million for the quarter ended September 30, 2023, compared to $21.4 million for the quarter ended September 30, 2022. The increase in expense is primarily due to the acquisition of Emclaire. Salaries and employee benefits increased $3.5 million to $14.2 million in the third quarter of 2023 compared to the same period in 2022. The acquisition of Emclaire along with normal raise activity were the primary reasons for the increase. Occupancy and equipment expense increased $782,000 primarily due to the acquisition. FDIC and state and local taxes increased due to the acquisition and the increase in the rate paid for FDIC insurance in 2023. Intangible amortization expense and core processing charges increased due to the acquisition. Merger related costs were $268,000 for the third quarter of 2023 compared to $872,000 in the third quarter of 2022. Other noninterest expense increased due the acquisition and due to the recognition of $785,000 in expense related to the settlement of a lawsuit.

About Farmers National Banc Corp.

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $5.0 billion in banking assets. Farmers National Banc Corp.’s wholly-owned subsidiaries are comprised of The Farmers National Bank of Canfield, a full-service national bank engaged in commercial and retail banking with 64 banking locations in Mahoning, Trumbull, Columbiana, Portage, Stark, Wayne, Medina, Geauga and Cuyahoga Counties in Ohio and Beaver, Butler, Allegheny, Jefferson, Clarion, Venango, Clearfield, Mercer, Elk and Crawford Counties in Pennsylvania, and Farmers Trust Company, which operates five trust offices and offers services in the same geographic markets. Total wealth management assets under care at September 30, 2023 are $3.2 billion. Farmers National Insurance, LLC, a wholly-owned subsidiary of The Farmers National Bank of Canfield, offers a variety of insurance products.

Non-GAAP Disclosure

This press release includes disclosures of Farmers’ tangible common equity ratio, return on average tangible assets, return on average tangible equity, net income excluding costs related to acquisition activities and certain items, return on average assets excluding merger costs and certain items, return on average equity excluding merger costs and certain items, net interest margin excluding acquisition marks and related accretion and PPP interest and fees and efficiency ratio less certain items, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers’ marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures to their GAAP equivalents are included in the tables following Consolidated Financial Highlights below.

Cautionary Statements Regarding Forward-Looking Statements

We make statements in this news release and our related investor conference call, and we may from time to time make other statements, that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Farmers’ financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, as well as any statements related to future expectations of performance or conditional verbs, such as “will,” “would,” “should,” “could” or “may.” Farmers’ actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from those described in certain forward-looking statements include significant changes in near-term local, regional, and U.S. economic conditions including those resulting from continued high rates of inflation, tightening monetary policy of the Board of Governors of the Federal Reserve, and possibility of a recession; Farmers’ failure to integrate Emclaire with Farmers in accordance with expectations; deviations from performance expectations related to Emclaire; continuing impacts from the length and extent of the economic impacts of the COVID-19 pandemic; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (SEC) and available on Farmers’ website (www.farmersbankgroup.com) and on the SEC’s website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Farmers does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

Farmers National Banc Corp. and Subsidiaries
Consolidated Financial Highlights
(Amounts in thousands, except per share results) Unaudited
Consolidated Statements of Income		For the Three Months Ended																				For the Nine Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,				Sept. 30,				Sept. 30,				Percent
			2023				2023				2023				2022				2022				2023				2022			Change
Total interest income		$	54,229			$	52,804			$	51,233			$	38,111			$	36,410			$	158,266			$	103,975			52.2	%
Total interest expense			20,461				18,226				14,623				8,679				4,629				53,310				9,241			476.9	%
Net interest income			33,768				34,578				36,610				29,432				31,781				104,956				94,734			10.8	%
Provision (credit) for credit losses			243				25				8,599				416				448				8,867				706			1155.9	%
Noninterest income			9,831				9,449				10,425				8,200				8,827				29,705				36,002			-17.5	%
Acquisition related costs			268				442				4,313				584				872				5,022				3,486			44.1	%
Other expense			27,448				25,944				26,409				20,511				20,527				79,802				69,830			14.3	%
Income before income taxes			15,640				17,616				7,714				16,121				18,761				40,970				56,714			-27.8	%
Income taxes			2,326				2,650				639				2,765				3,315				5,614				9,473			-40.7	%
Net income		$	13,314			$	14,966			$	7,075			$	13,356			$	15,446			$	35,356			$	47,241			-25.2	%
Average diluted shares outstanding			37,379				37,320				37,933				33,962				33,932				37,533				33,925
Basic earnings per share			0.36				0.40				0.19				0.39				0.46				0.94				1.40
Diluted earnings per share			0.36				0.40				0.19				0.39				0.46				0.94				1.39
Cash dividends per share			0.17				0.17				0.17				0.17				0.16				0.51				0.48
Performance Ratios
Net Interest Margin (Annualized)			2.86	%			2.92	%			3.07	%			2.99	%			3.21	%			2.95	%			3.24	%
Efficiency Ratio (Tax equivalent basis)			60.11	%			56.28	%			62.53	%			52.59	%			50.55	%			59.70	%			54.00	%
Return on Average Assets (Annualized)			1.06	%			1.18	%			0.56	%			1.31	%			1.48	%			0.93	%			1.51	%
Return on Average Equity (Annualized)			14.49	%			16.12	%			7.71	%			20.16	%			18.71	%			12.79	%			16.55	%
Dividends to Net Income			47.82	%			42.54	%			90.50	%			43.10	%			35.06	%			36.21	%			34.39	%
Other Performance Ratios (Non-GAAP)
Return on Average Tangible Assets			1.09	%			1.23	%			0.58	%			1.34	%			1.52	%			0.97	%			1.55	%
Return on Average Tangible Equity			30.29	%			33.55	%			16.31	%			32.81	%			27.06	%			26.80	%			22.62	%

Consolidated Statements of Financial Condition
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,
			2023				2023				2023				2022				2022
Assets
Cash and cash equivalents		$	93,923			$	116,063			$	128,001			$	75,551			$	79,981
Securities available for sale			1,210,736				1,316,878				1,355,449				1,268,025				1,295,133
Other investments			35,342				44,975				39,670				33,444				34,399
Loans held for sale			1,910				2,197				1,703				858				2,142
Loans			3,168,554				3,155,200				3,152,339				2,404,750				2,399,981
Less allowance for credit losses			34,753				34,957				36,011				26,978				27,282
Net Loans			3,133,801				3,120,243				3,116,328				2,377,772				2,372,699
Other assets			495,451				473,098				468,735				326,550				335,668
Total Assets		$	4,971,163			$	5,073,454			$	5,109,886			$	4,082,200			$	4,120,022
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing		$	1,039,524			$	1,084,232			$	1,106,870			$	896,957			$	934,638
Interest-bearing			3,217,869				3,165,381				3,207,121				2,526,760				2,590,054
Brokered time deposits			254,257				21,135				82,169				138,051				42,459
Total deposits			4,511,650				4,270,748				4,396,160				3,561,768				3,567,151
Other interest-bearing liabilities			88,550				388,437				292,324				183,211				243,098
Other liabilities			54,981				47,278				46,760				44,926				44,154
Total liabilities			4,655,181				4,706,463				4,735,244				3,789,905				3,854,403
Stockholders' Equity			315,982				366,991				374,642				292,295				265,619
Total Liabilities
and Stockholders' Equity		$	4,971,163			$	5,073,454			$	5,109,886			$	4,082,200			$	4,120,022
Period-end shares outstanding			37,489				37,457				37,439				34,055				34,060
Book value per share		$	8.43			$	9.80			$	10.01			$	8.58			$	7.80
Tangible book value per share (Non-GAAP)*			3.33				4.67				4.84				5.60				4.79
* Tangible book value per share is calculated by dividing tangible common equity by outstanding shares
Capital and Liquidity
Common Equity Tier 1 Capital Ratio (a)			10.54	%			10.25	%			10.04	%			13.71	%			13.36	%
Total Risk Based Capital Ratio (a)			14.06	%			13.76	%			13.60	%			17.79	%			17.44	%
Tier 1 Risk Based Capital Ratio (a)			11.04	%			10.74	%			10.54	%			14.32	%			13.97	%
Tier 1 Leverage Ratio (a)			7.85	%			7.68	%			7.43	%			9.84	%			10.24	%
Equity to Asset Ratio			6.36	%			7.23	%			7.33	%			7.16	%			6.45	%
Tangible Common Equity Ratio (b)			2.61	%			3.58	%			3.69	%			4.79	%			4.06	%
Net Loans to Assets			63.04	%			61.50	%			60.99	%			58.25	%			57.59	%
Loans to Deposits			70.23	%			73.88	%			71.71	%			67.52	%			67.28	%
Asset Quality
Non-performing loans		$	18,368			$	17,956			$	17,959			$	14,803			$	12,976
Non-performing assets			18,522				18,167				18,053				14,876				13,042
Loans 30 - 89 days delinquent			13,314				12,321				10,219				9,605				6,659
Charged-off loans			525				971				469				754				783
Recoveries			139				172				198				184				178
Net Charge-offs			386				799				271				570				605
Annualized Net Charge-offs to Average Net Loans			0.05	%			0.10	%			0.03	%			0.10	%			0.10	%
Allowance for Credit Losses to Total Loans			1.10	%			1.11	%			1.14	%			1.12	%			1.14	%
Non-performing Loans to Total Loans			0.58	%			0.57	%			0.57	%			0.62	%			0.54	%
Allowance to Non-performing Loans			189.20	%			194.68	%			200.52	%			182.25	%			210.25	%
Non-performing Assets to Total Assets			0.37	%			0.36	%			0.35	%			0.36	%			0.32	%
(a) September 30, 2023 ratio is estimated
(b) This is a non-GAAP financial measure. A reconciliation to GAAP is shown below
		For the Three Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,
End of Period Loan Balances			2023				2023				2023				2022				2022
Commercial real estate		$	1,295,847			$	1,284,974			$	1,286,830			$	1,028,050			$	1,028,484
Commercial			357,691				362,664				361,845				293,643				296,932
Residential real estate			842,729				849,533				853,074				475,791				474,014
HELOC			140,772				138,535				137,319				132,179				132,267
Consumer			261,136				260,326				260,596				221,260				222,706
Agricultural loans			261,738				250,807				244,938				246,937				239,081
Total, excluding net deferred loan costs		$	3,159,913			$	3,146,839			$	3,144,602			$	2,397,860			$	2,393,484
		For the Three Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,
End of Period Customer Deposit Balances			2023				2023				2023				2022				2022
Noninterest-bearing demand		$	1,039,524			$	1,084,232			$	1,106,870			$	896,957			$	934,638
Interest-bearing demand			1,426,349				1,383,326				1,473,001				1,224,884				1,399,227
Money market			588,043				610,051				599,037				435,369				393,005
Savings			488,991				511,642				535,321				441,978				460,709
Certificate of deposit			714,486				660,362				599,762				424,529				337,113
Total customer deposits		$	4,257,393			$	4,249,613			$	4,313,991			$	3,423,717			$	3,524,692
		For the Three Months Ended																				For the Nine Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,				Sept. 30,				Sept. 30,
Noninterest Income			2023				2023				2023				2022				2022				2023				2022
Service charges on deposit accounts		$	1,712			$	1,501			$	1,432			$	1,203			$	1,229			$	4,646			$	3,513
Bank owned life insurance income, including death benefits			694				584				547				590				406				1,825				1,220
Trust fees			2,617				2,248				2,587				2,373				2,370				7,453				7,265
Insurance agency commissions			1,116				1,332				1,456				1,133				1,136				3,904				3,269
Security gains (losses), including fair value changes for equity securities			(624	)			13				121				(366	)			(17	)			(490	)			(88	)
Retirement plan consulting fees			360				382				307				337				332				1,049				1,052
Investment commissions			520				476				393				508				424				1,389				1,675
Net gains on sale of loans			395				406				310				242				326				1,111				1,820
Other mortgage banking fee income (loss), net			185				234				153				98				94				571				193
Debit card and EFT fees			1,763				1,810				1,789				1,407				1,463				5,362				4,407
Other noninterest income			1,093				463				1,330				675				1,064				2,885				11,676
Total Noninterest Income		$	9,831			$	9,449			$	10,425			$	8,200			$	8,827			$	29,705			$	36,002
		For the Three Months Ended																				For the Nine Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,				Sept. 30,				Sept. 30,
Noninterest Expense			2023				2023				2023				2022				2022				2023				2022
Salaries and employee benefits		$	14,233			$	13,625			$	14,645			$	11,385			$	10,724			$	42,503			$	33,628
Occupancy and equipment			3,810				3,859				3,869				2,753				3,028				11,538				8,626
FDIC insurance and state and local taxes			1,648				1,494				1,222				1,010				1,017				4,365				2,941
Professional fees			1,043				1,190				1,114				938				985				3,347				5,176
Merger related costs			268				442				4,313				584				872				5,022				3,486
Advertising			492				478				409				472				596				1,379				1,475
Intangible amortization			725				1,222				909				702				432				2,856				1,271
Core processing charges			1,274				1,144				1,164				742				738				3,582				2,606
Other noninterest expenses			4,223				2,932				3,077				2,509				3,007				10,232				14,107
Total Noninterest Expense		$	27,716			$	26,386			$	30,722			$	21,095			$	21,399			$	84,824			$	0

Business Combination
Consideration
Cash		$	33,440
Stock			59,202
Fair value of total consideration transferred		$	92,642
Fair value of assets acquired
Cash and cash equivalents		$	20,265
Securities available for sale			126,970
Other investments			7,795
Loans, net			740,659
Premises and equipment			16,103
Bank owned life insurance			22,485
Core deposit intangible			19,249
Current and deferred taxes			17,246
Other assets			6,387
Total assets acquired			977,159
Fair value of liabilities assumed
Deposits			875,813
Short-term borrowings			75,000
Accrued interest payable and other liabilities			7,104
Total liabilities			957,917
Net assets acquired		$	19,242
Goodwill created			73,400
Total net assets acquired		$	92,642

Average Balance Sheets and Related Yields and Rates
(Dollar Amounts in Thousands)
		Three Months Ended											Three Months Ended
		September 30, 2023											September 30, 2022
		AVERAGE								YIELD/			AVERAGE								YIELD/
		BALANCE				INTEREST (1)				RATE (1)			BALANCE				INTEREST (1)				RATE (1)
EARNING ASSETS
Loans (2)		$	3,153,309			$	43,928			5.57	%		$	2,386,184			$	27,570			4.62	%
Taxable securities			1,132,959				6,492			2.29				1,112,411				5,477			1.97
Tax-exempt securities (2)			413,117				3,251			3.15				473,677				3,814			3.22
Other investments			42,581				487			4.57				33,524				199			2.37
Federal funds sold and other			78,922				751			3.81				59,289				205			1.38
Total earning assets			4,820,888				54,909			4.56				4,065,085				37,265			3.67
Nonearning assets			215,445											99,770
Total assets		$	5,036,333										$	4,164,855
INTEREST-BEARING LIABILITIES
Time deposits		$	677,291			$	5,308			3.13	%		$	338,794			$	586			0.69	%
Brokered time deposits			145,839				1,882			5.16				50,494				142			1.12
Savings deposits			1,099,682				2,625			0.95				832,828				165			0.08
Demand deposits - interest bearing			1,412,922				7,647			2.16				1,426,801				2,317			0.65
Short term borrowings			141,717				1,961			5.53				90,978				533			2.34
Long term borrowings			88,494				1,038			4.69				88,031				886			4.03
Total interest-bearing liabilities		$	3,565,945				20,461			2.30			$	2,827,926				4,629			0.65
NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS' EQUITY
Demand deposits - noninterest bearing			1,052,062											969,700
Other liabilities			50,726											36,929
Stockholders' equity			367,600											330,300
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY		$	5,036,333										$	4,164,855
Net interest income and interest rate spread						$	34,448			2.26	%						$	32,636			3.02	%
Net interest margin										2.86	%										3.21	%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable.
(2) For 2023, adjustments of $90 thousand and $590 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2022, adjustments of $76 thousand and $779 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.

		Nine Months Ended											Nine Months Ended
		September 30, 2023											September 30, 2022
		AVERAGE								YIELD/			AVERAGE								YIELD/
		BALANCE				INTEREST (1)				RATE (1)			BALANCE				INTEREST (1)				RATE (1)
EARNING ASSETS
Loans (2)		$	3,144,817			$	127,293			5.40	%		$	2,346,542			$	79,008			4.49	%
Taxable securities			1,153,804				19,697			2.28				1,074,020				15,287			1.90
Tax-exempt securities (2)			422,151				10,048			3.17				469,878				11,372			3.23
Other investments			40,211				1,457			4.83				32,901				545			2.21
Federal funds sold and other			78,224				1,911			3.26				82,031				348			0.57
Total earning assets			4,839,207				160,406			4.42				4,005,372				106,560			3.55
Nonearning assets			219,762											160,975
Total assets		$	5,058,969										$	4,166,347
INTEREST-BEARING LIABILITIES
Time deposits		$	636,939			$	13,171			2.76	%		$	357,241			$	1,782			0.67	%
Brokered time deposits			145,115				4,889			4.49				37,400				206			0.73
Savings deposits			1,128,760				6,981			0.82				837,937				473			0.07
Demand deposits - interest bearing			1,421,208				19,619			1.84				1,422,583				3,644			0.34
Short term borrowings			145,509				5,608			5.14				45,568				631			1.85
Long term borrowings			88,382				3,043			4.59				87,915				2,505			3.80
Total interest-bearing liabilities		$	3,565,913				53,311			1.99			$	2,788,644				9,241			0.44
NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS' EQUITY
Demand deposits - noninterest bearing		$	1,075,493										$	966,173
Other liabilities			48,936											30,904
Stockholders' equity			368,627											380,626
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY		$	5,058,969										$	4,166,347
Net interest income and interest rate spread						$	107,095			2.43	%						$	97,319			3.11	%
Net interest margin										2.95	%										3.24	%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable.
(2) For 2023, adjustments of $268 thousand and $1.9 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2022, adjustments of $238 thousand and $2.3 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.

Reconciliation of Total Assets to Tangible Assets
		For the Three Months Ended																				For the Nine Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,				Sept. 30,				Sept. 30,
			2023				2023				2023				2022				2022				2023				2022
Total Assets		$	4,971,163			$	5,073,454			$	5,109,886			$	4,082,200			$	4,120,022			$	4,971,163			$	4,120,022
Less Goodwill and other intangibles			191,326				192,052				193,273				101,666				102,368				191,326				102,368
Tangible Assets		$	4,779,837			$	4,881,402			$	4,916,613			$	3,980,534			$	4,017,654			$	4,779,837			$	4,017,654
Average Assets			5,058,969				5,070,444				5,085,009				4,080,497				4,164,855				5,058,969				4,166,347
Less average Goodwill and other intangibles			191,804				192,972				193,368				102,126				101,981				192,709				102,160
Average Tangible Assets		$	4,867,165			$	4,877,472			$	4,891,641			$	3,978,371			$	4,062,874			$	4,866,260			$	4,064,187
Reconciliation of Common Stockholders' Equity to Tangible Common Equity
		For the Three Months Ended																				For the Nine Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,				Sept. 30,				Sept. 30,
			2023				2023				2023				2022				2022				2023				2022
Stockholders' Equity		$	315,982			$	366,991			$	374,642			$	292,295			$	265,619			$	315,982			$	265,619
Less Goodwill and other intangibles			191,326				192,052				193,273				101,666				102,368				191,326				102,368
Tangible Common Equity		$	124,656			$	174,939			$	181,369			$	190,629			$	163,251			$	124,656			$	163,251
Average Stockholders' Equity			367,600				371,421				366,851				264,939				330,300				368,627				380,626
Less average Goodwill and other intangibles			191,804				192,972				193,368				102,126				101,981				192,709				102,160
Average Tangible Common Equity		$	175,796			$	178,449			$	173,483			$	162,813			$	228,319			$	175,918			$	278,466
Reconciliation of Net Income, Less Merger and Certain Items
		For the Three Months Ended																				For the Nine Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,				Sept. 30,				Sept. 30,
			2023				2023				2023				2022				2022				2023				2022
Net income		$	13,314			$	14,966			$	7,075			$	13,356			$	15,446			$	35,356			$	47,241
Acquisition related costs - after tax			234				354				3,449				475				711				4,037				2,815
Acquisition related provision - after tax			0				0				6,077				0				0				6,077				0
Lawsuit settlement income - after tax			0				0				0				0				0				0				(6,616	)
Lawsuit settlement contingent legal expense - after tax			0				0				0				0				0				0				1,639
Lawsuit settlement expense - after tax			620				0				0				0				0				620				0
Charitable donation - after tax			0				0				0				0				0				0				4,740
Net loss (gain) on asset/security sales - after tax			604				(5	)			(72	)			268				4				527				76
Net income - Adjusted		$	14,772			$	15,315			$	16,529			$	14,099			$	16,161			$	46,617			$	49,895
Diluted EPS excluding merger and certain items		$	0.40			$	0.41			$	0.44			$	0.42			$	0.48			$	1.24			$	1.47
Return on Average Assets excluding merger and certain items (Annualized)			1.17	%			1.21	%			1.30	%			1.36	%			1.55	%			1.23	%			1.60	%
Return on Average Equity excluding merger and certain items (Annualized)			16.07	%			16.49	%			18.02	%			21.29	%			19.57	%			16.86	%			17.48	%
Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized)			33.61	%			34.33	%			38.11	%			34.64	%			28.31	%			35.33	%			23.89	%
Efficiency ratio excluding certain items
		For the Three Months Ended																				For the Nine Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,				Sept. 30,				Sept. 30,
			2023				2023				2023				2022				2022				2023				2022
Net interest income, tax equated		$	34,448			$	35,273			$	37,374			$	30,212			$	32,636			$	107,095			$	97,319
Noninterest income			9,831				9,449				10,425				8,200				8,827				29,705				36,002
Legal settlement income			0				0				0				0				0				0				(8,375	)
Net loss (gain) on asset/security sales			764				(6	)			(91	)			338				6				667				97
Net interest income and noninterest income adjusted			45,043				44,716				47,708				38,750				41,469				137,467				125,043
Noninterest expense less intangible amortization			26,991				25,163				29,813				20,393				20,967				81,968				72,045
Charitable donation			0				0				0				0				0				0				6,000
Legal settlement expense			785				0				0				0				0				785				0
Contingent legal settlement expense			0				0				0				0				0				0				2,075
Acquisition related costs			268				442				4,313				584				872				5,022				3,486
Noninterest expense adjusted			25,938				24,721				25,500				19,809				20,095				76,161				60,484
Efficiency ratio excluding certain items			57.58	%			55.28	%			53.45	%			51.12	%			48.46	%			55.40	%			48.37	%
Net interest margin excluding acquisition marks and PPP interest and fees
		For the Three Months Ended																				For the Nine Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,				Sept. 30,				Sept. 30,
			2023				2023				2023				2022				2022				2023				2022
Net interest income, tax equated		$	34,448			$	35,273			$	37,374			$	30,212			$	32,636			$	107,095			$	97,319
Acquisition marks			2,959				2,884				2,628				174				215				8,471				1,584
PPP interest and fees			1				3				0				10				62				4				1,382
Adjusted and annualized net interest income			125,952				129,544				138,984				120,112				129,436				131,493				125,804
Average earning assets			4,820,888				4,830,910				4,866,263				4,047,343				4,065,085				4,839,207				4,005,372
Less PPP average balances			247				277				310				485				1,586				262				15,766
Adjusted average earning assets			4,820,641				4,830,633				4,865,953				4,046,858				4,063,499				4,838,945				3,989,606
Net interest margin excluding marks and PPP interest and fees			2.61	%			2.68	%			2.86	%			2.97	%			3.19	%			2.72	%			3.15	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231024569063/en/

Farmers National Banc Corp.

Kevin J. Helmick, President and CEO

330.533.3341

Email: exec@farmersbankgroup.com

Source: Farmers National Banc Corp.

FAQ

What were the earnings per share for Q3 2023?

Earnings per share for Q3 2023 were $0.36.

What is the total asset value for Farmers National Banc Corp.?

The total assets for Farmers National Banc Corp. are $4.97 billion.

What is the non-performing asset to total assets ratio?

The non-performing asset to total assets ratio is 0.58%.

What is the return on average assets for Q3 2023?

The return on average assets for Q3 2023 is 1.06%.

What are the ROAE and ROATE for Q3 2023?

The ROAE and ROATE for Q3 2023 are 14.5% and 30.3%, respectively.