Farmers National Banc Corp. Reports Results for Fourth Quarter 2022

Rhea-AI Summary

Farmers National Banc Corp. (FMNB) reported net income of $13.4 million for Q4 2022, compared to $5.7 million in Q4 2021, with diluted earnings per share reaching $0.39 ($0.42 excluding certain items). Total assets decreased to $4.08 billion from $4.12 billion in the previous quarter. The Company experienced loan growth of $5.2 million, driven by non-PPP loans. Despite a decline in customer deposits, total stockholders' equity rose to $292.3 million. The efficiency ratio improved to 51.1%. The recent acquisition of Emclaire Financial Corp. is expected to enhance market presence, increasing total bank assets to over $5 billion.

Positive

• Net income increased to $13.4 million for Q4 2022, up from $5.7 million in Q4 2021.
• Diluted earnings per share reached $0.39 for Q4 2022, compared to $0.18 in Q4 2021.
• Loan growth of $5.2 million for the quarter, excluding PPP loans.
• Total stockholders' equity increased to $292.3 million.

Negative

• Total assets declined to $4.08 billion from $4.12 billion.
• Customer deposits decreased to $3.42 billion from $3.52 billion in the previous quarter.
• Net interest margin decreased to 2.99% from 3.33% in Q4 2021.
• Noninterest income declined by $1.3 million year-over-year.

• Earnings per diluted share of $0.39 ($0.42 excluding certain items, non-GAAP) for the fourth quarter of 2022
• Loan growth of $5.2 million for the quarter, excluding PPP loans
• 160 consecutive quarters of profitability
• Efficiency ratio, (excluding certain items, non-GAAP), of 51.1% for the fourth quarter of 2022
• Return on average assets, (excluding certain items, non-GAAP), was 1.36% for the fourth quarter of 2022
• ROAE and ROATE, (excluding certain items, non-GAAP), 21.3% and 34.6%, respectively, for fourth quarter of 2022

CANFIELD, Ohio--(BUSINESS WIRE)-- Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) reported today net income of $13.4 million for the three months ended December 31, 2022 compared to $5.7 million for the three months ended December 31, 2021. The Company reported diluted earnings per share of $0.39 for the fourth quarter of 2022 versus $0.18 for the same period in 2021. Results for the fourth quarter of 2022 included pretax items of $584,000 for merger related costs and combined net losses of $338,000 on the sale of securities and the sale of other assets. Excluding these items (non-GAAP), net income for the quarter ended December 31, 2022, would have been $14.1 million, or $0.42 per diluted share.

Net income for the twelve months ended December 31, 2022, totaled $60.6 million, or $1.79 per diluted share, compared to $51.8 million, or $1.77 per diluted share for the twelve months ended December 31, 2021. Results for the year ended December 31, 2022, included pre-tax items for acquisition costs of $4.1 million, security losses of $454,000, $8.4 million in other noninterest income for the proceeds of a legal settlement, a $6.0 million charitable contribution to the Farmers Charitable Foundation, $2.1 million in legal expenses associated with the legal settlement and gains of $19,000 on the sale of assets. Net income for the twelve months ended December 31, 2022, excluding these items (non-GAAP), was $64.0 million, or $1.89 per share.

Kevin J. Helmick, President and CEO, stated, “2022 was a strong year for Farmers as we produced record net income, which drove strong returns on assets, equity, and tangible equity. In addition, we successfully integrated the 2021 Cortland Bancorp acquisition, focused on completing the 2023 Emclaire Financial Corp. acquisition, and enhanced our leadership team and board. With the January 2023 completion of the Emclaire Financial Corp. acquisition, we have expanded our presence throughout Pennsylvania and significantly increased our scale with over $5.0 billion in bank assets and $3.0 billion in wealth assets. I believe Farmers is well positioned to navigate an increasingly difficult economic and interest rate environment as a result of our strong asset quality and capital levels, experienced leadership team, and dedication to provide our communities with exceptional financial products and services.”

On March 23, 2022, Farmers entered into an agreement and plan of merger (the “Merger Agreement”) with Emclaire Financial Corp. (formerly NASDAQ: EMCF), a Pennsylvania corporation (“Emclaire”), and the parent company of The Farmers National Bank of Emlenton (“Emlenton”). On July 20, 2022, the transaction received the approval of Emclaire’s shareholders and on December 2, 2022, the transaction received regulatory approval. The transaction closed on January 1, 2023. Emclaire operated 19 branches in ten counties throughout western Pennsylvania and as of December 31, 2022, had total assets of $1.02 billion, gross loans of $797.3 million and deposits of $874.6 million.

Balance Sheet

Total assets declined to $4.08 billion at December 31, 2022 compared to $4.12 billion at September 30, 2022. Gross loans (excluding loans held for sale and PPP loans) increased by $5.2 million to $2.40 billion at December 30, 2022 from the prior quarter.

Securities available for sale decreased $27.1 million to $1.27 billion at December 31, 2022 from $1.30 billion at September 30, 2022. The decrease was primarily driven by runoff and the sale of securities during the quarter offset by improvement in the gross unrealized loss. The gross unrealized loss at December 31, 2022 was $266.5 million compared to $290.1 million at September 30, 2022 and a gross unrealized gain of $11.7 million at December 31, 2021. With continued loan growth and the acquisition of Emclaire, the Company plans on allowing the securities portfolio to shrink and provide liquidity. The volatility in the bond market is expected to continue in 2023, which may result in increased volatility in the fair value of the Company’s available for sale securities.

Total customer deposits (excluding brokered time deposits) declined to $3.42 billion at December 31, 2022 from $3.52 billion at September 30, 2022. Customer deposit balances at December 31, 2021 were $3.55 billion. Intense competition from both other banks and the treasury market itself drove the decline in deposits. In addition, it appears that some customers are utilizing deposit balances to counter the higher cost of living brought on by the inflationary environment in 2022. The Company expects competition for deposits to remain highly elevated for the foreseeable future which will continue to increase funding costs.

Total stockholders’ equity increased to $292.3 million at December 31, 2022 from $265.6 million at September 30, 2022 but has declined from $472.4 million at December 31, 2021. The decrease in stockholders’ equity since December 31, 2021 has primarily been due to the decline in accumulated other comprehensive income associated with the rapid increase in U.S. treasury rates in 2022 which has had a negative effect on the value of the Company’s available for sale securities, and in turn, the dollar amount that flows through accumulated other comprehensive income. The Company’s tangible book value per share (non-GAAP) was $5.60 at December 31, 2022 compared to $4.79 at September 30, 2022, and $10.91 at December 31, 2021.

Credit Quality

Non-performing loans (NPLs) were $14.8 million at December 31, 2022 compared to $16.2 million at December 31, 2021. The NPL to loans ratio was 0.62% at December 31, 2022 compared to 0.69% at December 31, 2021. Non-performing assets to assets has also declined from 0.39% at December 31, 2021 to 0.36% at December 31, 2022. Early stage delinquencies, defined as 30-89 days delinquent, were $9.6 million, or 0.40% of total loans, at December 31, 2022 compared to $8.9 million, or 0.38% of total loans at December 31, 2021.

The Company recorded a provision for credit losses and unfunded commitments of $416,000 in the fourth quarter of 2022 compared to a provision for credit losses of $5.4 million in the fourth quarter of 2021. During the fourth quarter of 2021, the Company completed the acquisition of Cortland Bancorp and recorded a $4.9 million provision for credit losses related to the acquisition which accounts for the majority of the difference in provision costs between the 4^th quarter of 2022 and the 4^th quarter of 2021. The Company experienced net charge-offs of $570,000 during the fourth quarter of 2022 compared to $313,000 in the fourth quarter of 2021. Net charge-offs as a percentage of average net loans was 10 basis points for the quarter ended December 31, 2022, compared to 6 basis points for the fourth quarter of 2021. The allowance for credit losses to total loans declined to 1.12% at December 31, 2022, compared to 1.26% at December 31, 2021. The low level of charge-off activity over the last several years continues to result in less allowance for credit losses being required.

Net Interest Income

The net interest margin was 2.99% for the fourth quarter of 2022 compared to 3.21% for the third quarter of 2022 and 3.33% for the fourth quarter of 2021. The decline in net interest margin during the fourth quarter of 2022 compared to the prior quarter and the fourth quarter of 2021 was caused by a 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 much costlier wholesale funding. Loans continue to reprice higher but cannot keep up with the increase in funding costs. Excluding the impact of acquisition marks and related accretion and PPP interest and fees, the net interest margin (non-GAAP) for the fourth quarter of 2022 was 2.96% compared to 3.18% for the third quarter of 2022 and 3.21% for the fourth quarter of 2021. Net interest income decreased to $29.4 million for the fourth quarter of 2022 from $29.7 million for the quarter ended December 31, 2021. The decrease was due to net interest margin compression discussed above offset somewhat by larger average assets. In addition, during the fourth quarter of 2021, the Company recognized $979,000 in interest and fees associated with PPP loans compared to $10,000 in the fourth quarter of 2022.

Noninterest Income

Noninterest income decreased $1.3 million from the fourth quarter of 2021 to the fourth quarter of 2022. The primary reason for the decline was a drop of $1.5 million in the net gains on the sale of loans. This drop was caused by lower mortgage production compared to the prior year due to the dramatic increase in interest rates in 2022 and a lower saleable mix. Bank owned life insurance increased $176,000 in the fourth quarter of 2022 compared to the fourth quarter of 2021. This increase was primarily due to a death benefit of $184,000 received in the fourth quarter of 2022. Insurance commissions increased to $1.1 million in the fourth quarter of 2022 compared to $706,000 in the fourth quarter of 2021. This business exhibited strong growth throughout 2022. Security losses for the fourth quarter of 2022 totaled $366,000 compared to security gains of $25,000 for the same period in 2021. The Company used the proceeds from the sales to pay down wholesale borrowings.

Noninterest Expense

Total noninterest expense decreased to $21.1 million in the fourth quarter of 2022 compared to $27.7 million for the fourth quarter of 2021. The year-over-year decrease was primarily due to the merger costs of $6.5 million incurred in the fourth quarter of 2021 compared to merger costs of $584,000 incurred in the fourth quarter of 2022. In addition, the Company incurred $1.8 million of expense in the fourth quarter of 2021 for prepayment penalties on FHLB advances. There were no prepayment penalties in the fourth quarter of 2022. Offsetting these decreases were increases in salaries and employee benefits primarily related to increased healthcare costs, increased occupancy and equipment expense and increased FDIC insurance expense.

About Farmers National Banc Corp.

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $4.1 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 65 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 December 31, 2022 are $3.0 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, efficiency ratio less one-time expenses, and allowance for credit losses to gross loans, excluding PPP loans and acquired loans, 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 impacts from the length and extent of the economic impacts of the COVID-19 pandemic; 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 and Emlenton with Farmers in accordance with expectations; deviations from performance expectations related to Emclaire and Emlenton; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2021 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 Twelve Months Ended
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,				Dec. 31,				Dec. 31,				Percent
			2022				2022				2022				2022				2021				2022				2021			Change
Total interest income		$	38,111			$	36,410			$	34,286			$	33,279			$	31,685			$	142,086			$	116,459			22.0	%
Total interest expense			8,679				4,629				2,575				2,037				1,986				17,920				8,469			111.6	%
Net interest income			29,432				31,781				31,711				31,242				29,699				124,166				107,990			15.0	%
Provision (credit) for credit losses			416				448				616				(358	)			5,366				1,122				4,893			-77.1	%
Noninterest income			8,200				8,827				9,477				17,698				9,538				44,202				38,193			15.7	%
Acquisition related costs			584				872				674				1,940				6,521				4,070				7,109			-42.7	%
Other expense			20,511				20,527				20,787				28,516				21,140				90,341				72,067			25.4	%
Income before income taxes			16,121				18,761				19,111				18,842				6,210				72,835				62,114			17.3	%
Income taxes			2,765				3,315				3,160				2,998				508				12,238				10,270			19.2	%
Net income		$	13,356			$	15,446			$	15,951			$	15,844			$	5,702			$	60,597			$	51,844			16.9	%
Average diluted shares outstanding			33,962				33,932				33,923				33,937				32,074				33,929				29,280
Basic earnings per share			0.39				0.46				0.47				0.47				0.18				1.79				1.78
Diluted earnings per share			0.39				0.46				0.47				0.47				0.18				1.79				1.77
Cash dividends per share			0.17				0.16				0.16				0.16				0.14				0.65				0.47
Performance Ratios
Net Interest Margin (Annualized)			2.99	%			3.21	%			3.25	%			3.27	%			3.33	%			3.18	%			3.45	%
Efficiency Ratio (Tax equivalent basis)			52.59	%			50.55	%			49.95	%			61.36	%			63.61	%			53.68	%			51.13	%
Return on Average Assets (Annualized)			1.31	%			1.48	%			1.54	%			1.52	%			0.58	%			1.46	%			1.52	%
Return on Average Equity (Annualized)			20.16	%			18.71	%			17.97	%			13.89	%			5.24	%			17.24	%			13.64	%
Dividends to Net Income			43.10	%			35.06	%			33.95	%			34.18	%			82.99	%			36.31	%			27.11	%
Other Performance Ratios (Non-GAAP)
Return on Average Tangible Assets			1.32	%			1.52	%			1.57	%			1.55	%			0.60	%			1.50	%			1.55	%
Return on Average Tangible Equity			32.81	%			27.06	%			25.23	%			17.92	%			6.57	%			24.31	%			16.13	%

Consolidated Statements of Financial Condition
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,
			2022				2022				2022				2022				2021
Assets
Cash and cash equivalents		$	75,551			$	79,981			$	65,458			$	137,627			$	112,790
Securities available for sale			1,268,025				1,295,133				1,361,682				1,463,626				1,427,677
Other investments			33,444				34,399				34,451				34,019				30,459
Loans held for sale			858				2,142				2,714				1,904				4,545
Loans			2,404,750				2,399,981				2,374,485				2,304,971				2,331,082
Less allowance for credit losses			26,978				27,282				27,454				27,015				29,386
Net Loans			2,377,772				2,372,699				2,347,031				2,277,956				2,301,696
Other assets			326,550				335,668				303,028				290,723				265,582
Total Assets		$	4,082,200			$	4,120,022			$	4,114,364			$	4,205,855			$	4,142,749
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing		$	896,957			$	934,638			$	983,713			$	963,143			$	916,237
Interest-bearing			2,526,760				2,590,054				2,586,829				2,690,668				2,630,998
Brokered time deposits			138,051				42,459				54,996				40,000				0
Total deposits			3,561,768				3,567,151				3,625,538				3,693,811				3,547,235
Other interest-bearing liabilities			183,211				243,098				137,985				87,872				87,758
Other liabilities			44,926				44,154				29,392				30,286				35,324
Total liabilities			3,789,905				3,854,403				3,792,915				3,811,969				3,670,317
Stockholders' Equity			292,295				265,619				321,449				393,886				472,432
Total Liabilities
and Stockholders' Equity		$	4,082,200			$	4,120,022			$	4,114,364			$	4,205,855			$	4,142,749
Period-end shares outstanding			34,055				34,060				34,032				34,008				33,898
Book value per share		$	8.58			$	7.80			$	9.45			$	11.58			$	13.94
Tangible book value per share (Non-GAAP)*			5.60				4.79				6.46				8.58				10.91
* 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)			13.61	%			13.36	%			13.30	%			13.31	%			13.16	%
Total Risk Based Capital Ratio (a)			17.66	%			17.44	%			17.46	%			17.59	%			17.60	%
Tier 1 Risk Based Capital Ratio (a)			14.22	%			13.97	%			13.92	%			13.95	%			13.82	%
Tier 1 Leverage Ratio (a)			9.84	%			10.24	%			9.56	%			9.56	%			10.12	%
Equity to Asset Ratio			7.16	%			6.45	%			7.81	%			9.37	%			11.40	%
Tangible Common Equity Ratio (b)			4.79	%			4.06	%			5.47	%			7.11	%			9.15	%
Net Loans to Assets			58.25	%			57.59	%			57.04	%			54.16	%			55.56	%
Loans to Deposits			67.52	%			67.28	%			65.49	%			62.40	%			65.72	%
Asset Quality
Non-performing loans		$	14,803			$	12,976			$	14,107			$	14,046			$	16,195
Non-performing assets			14,876				13,042				14,107				14,046				16,195
Loans 30 - 89 days delinquent			9,605				6,659				8,716				7,304				8,891
Charged-off loans			754				783				177				1,590				470
Recoveries			184				178				135				149				157
Net Charge-offs			570				605				42				1,441				313
Annualized Net Charge-offs to
Average Net Loans Outstanding			0.10	%			0.10	%			0.01	%			0.25	%			0.06	%
Allowance for Credit Losses to Total Loans			1.12	%			1.14	%			1.16	%			1.17	%			1.26	%
Non-performing Loans to Total Loans			0.62	%			0.54	%			0.59	%			0.61	%			0.69	%
Allowance to Non-performing Loans			182.25	%			210.25	%			194.61	%			192.33	%			181.45	%
Non-performing Assets to Total Assets			0.36	%			0.32	%			0.34	%			0.33	%			0.39	%
(a) December 31, 2022 ratio is estimated
(b) This is a non-GAAP financial measure. A reconciliation to GAAP is shown below

		For the Three Months Ended
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,
End of Period Loan Balances			2022				2022				2022				2022				2021
Commercial real estate		$	1,028,050			$	1,028,484			$	1,040,243			$	1,000,972			$	1,011,891
Commercial			293,643				296,932				285,981				298,903				313,836
Residential real estate			475,791				474,014				464,489				455,501				453,635
HELOC			132,179				132,267				129,392				128,221				127,433
Consumer			221,260				222,706				218,219				192,586				189,522
Agricultural loans			246,937				239,081				230,477				224,845				232,365
Total, excluding net deferred loan costs		$	2,397,860			$	2,393,484			$	2,368,801			$	2,301,028			$	2,328,682

		For the Three Months Ended																			For the Twelve Months Ended
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,			Dec. 31,				Dec. 31,
Noninterest Income			2022				2022				2022				2022				2021			2022				2021
Service charges on deposit accounts		$	1,203			$	1,229			$	1,139			$	1,145			$	1,138		$	4,716			$	3,660
Bank owned life insurance income, including death benefits			590				406				405				409				414			1,810				1,338
Trust fees			2,373				2,370				2,376				2,519				2,509			9,638				9,438
Insurance agency commissions			1,133				1,136				1,086				1,047				706			4,402				3,456
Security gains (losses), including fair value changes for equity securities			(366	)			(17	)			(60	)			(11	)			25			(454	)			1,004
Retirement plan consulting fees			337				332				323				397				378			1,389				1,421
Investment commissions			508				424				557				694				611			2,183				2,276
Net gains on sale of loans			242				326				365				1,129				1,728			2,062				8,285
Other mortgage banking fee income (loss), net			98				94				39				60				2			291				(136	)
Debit card and EFT fees			1,407				1,463				1,528				1,416				1,424			5,814				5,144
Other noninterest income			675				1,064				1,719				8,893				603			12,351				2,307
Total Noninterest Income		$	8,200			$	8,827			$	9,477			$	17,698			$	9,538		$	44,202			$	38,193
		For the Three Months Ended																			For the Twelve Months Ended
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,			Dec. 31,				Dec. 31,
Noninterest Expense			2022				2022				2022				2022				2021			2022				2021
Salaries and employee benefits		$	11,385			$	10,724			$	11,073			$	11,831			$	10,230		$	45,013			$	39,393
Occupancy and equipment			2,753				3,028				2,918				2,680				2,422			11,379				8,486
FDIC insurance and state and local taxes			1,010				1,017				979				945				772			3,951				2,859
Professional fees			938				985				1,056				3,135				1,296			6,114				4,191
Merger related costs			584				872				674				1,940				6,521			4,070				7,109
Advertising			472				596				487				392				776			1,947				1,859
Intangible amortization			702				432				419				420				414			1,973				1,362
Core processing charges			742				738				1,123				745				880			3,348				3,198
Other noninterest expenses			2,509				3,007				2,732				8,368				4,350			16,616				10,719
Total Noninterest Expense		$	21,095			$	21,399			$	21,461			$	30,456			$	27,661		$	94,411			$	79,176

Average Balance Sheets and Related Yields and Rates
(Dollar Amounts in Thousands)
		Three Months Ended											Three Months Ended
		December 31, 2022											December 31, 2021
		AVERAGE								YIELD/			AVERAGE								YIELD/
		BALANCE				INTEREST (1)				RATE (1)			BALANCE				INTEREST (1)				RATE (1)
EARNING ASSETS
Loans (2)		$	2,394,872			$	29,092			4.86	%		$	2,187,770			$	24,946			4.52	%
Taxable securities			1,105,545				5,556			2.01				892,563				3,948			1.75
Tax-exempt securities (2)			453,917				3,580			3.15				410,016				3,397			3.29
Other investments			33,901				326			3.85				26,475				142			2.13
Federal funds sold and other			59,108				336			2.27				114,496				39			0.14
Total earning assets			4,047,343				38,890			3.84				3,631,320				32,472			3.55
Nonearning assets			33,154											248,581
Total assets		$	4,080,497										$	3,879,901
INTEREST-BEARING LIABILITIES
Time deposits		$	370,914			$	1,261			1.36	%		$	379,786			$	697			0.73	%
Brokered time deposits			115,021				1,034			3.60				0				0			0.00
Savings deposits			871,584				879			0.40				736,732				202			0.11
Demand deposits - interest bearing			1,301,475				3,805			1.17				1,367,921				475			0.14
Short term borrowings			85,641				777			3.63				0				2			0.00
Long term borrowings			88,138				922			4.18				80,799				610			3.00
Total interest-bearing liabilities		$	2,832,773				8,678			1.23			$	2,565,238				1,986			0.31
NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS' EQUITY
Demand deposits - noninterest bearing			938,881											851,130
Other liabilities			43,904											31,824
Stockholders' equity			264,939											431,709
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY		$	4,080,497										$	3,879,901
Net interest income and interest rate spread						$	30,212			2.61	%						$	30,486			3.24	%
Net interest margin										2.99	%										3.33	%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable.
(2) For 2022, adjustments of $72 thousand and $707 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2021, adjustments of $86 thousand and $701 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.
		Twelve Months Ended											Twelve Months Ended
		December 31, 2022											December 31, 2021
		AVERAGE								YIELD/			AVERAGE								YIELD/
		BALANCE				INTEREST (1)				RATE (1)			BALANCE				INTEREST (1)				RATE (1)
EARNING ASSETS
Loans (2)		$	2,358,724			$	108,100			4.58	%		$	2,041,347			$	95,180			4.66	%
Taxable securities			1,081,966				20,843			1.93				617,475				11,399			1.85
Tax-exempt securities (2)			465,855				14,952			3.21				348,627				12,027			3.45
Other investments			33,153				871			2.63				21,912				498			2.27
Federal funds sold and other			76,253				684			0.90				180,718				200			0.11
Total earning assets			4,015,951				145,450			3.62				3,210,079				119,304			3.72
Nonearning assets			128,757											195,805
Total assets		$	4,144,708										$	3,405,884
INTEREST-BEARING LIABILITIES
Time deposits		$	360,687			$	3,044			0.84	%		$	393,039			$	3,652			0.93	%
Brokered time deposits			56,965				1,240			2.18				11,737				75			0.64
Savings deposits			846,418				1,352			0.16				569,179				712			0.13
Demand deposits - interest bearing			1,392,058				7,449			0.54				1,240,014				2,336			0.19
Short term borrowings			55,668				1,408			2.53				3,957				7			0.28
Long term borrowings			87,972				3,427			3.90				70,057				1,687			2.40
Total interest-bearing liabilities		$	2,799,768				17,920			0.64			$	2,287,983				8,469			0.37
NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS' EQUITY
Demand deposits - noninterest bearing		$	959,294										$	714,978
Other liabilities			34,180											23,498
Stockholders' equity			351,466											379,425
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY		$	4,144,708										$	3,405,884
Net interest income and interest rate spread						$	127,530			2.98	%						$	110,835			3.35	%
Net interest margin										3.18	%										3.45	%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable.
(2) For 2022, adjustments of $310 thousand and $3.1 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2021, adjustments of $360 thousand and $2.5 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 Twelve Months Ended
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,				Dec. 31,				Dec. 31,
			2022				2022				2022				2022				2021				2022				2021
Total Assets		$	4,082,200			$	4,120,022			$	4,114,364			$	4,205,855			$	4,142,749			$	4,082,200			$	4,142,749
Less Goodwill and other intangibles			101,666				102,368				101,767				102,187				102,606				101,666				102,606
Tangible Assets		$	3,980,534			$	4,017,654			$	4,012,597			$	4,103,668			$	4,040,143			$	3,980,534			$	4,040,143
Average Assets			4,144,708				4,164,855				4,155,719				4,178,618				3,879,901				4,144,708				3,405,884
Less average Goodwill and other intangibles			102,126				101,981				102,042				102,462				84,580				102,151				58,111
Average Tangible Assets		$	4,042,582			$	4,062,874			$	4,053,677			$	4,076,156			$	3,795,321			$	4,042,557			$	3,347,773
Reconciliation of Common Stockholders' Equity to Tangible Common Equity
		For the Three Months Ended																				For the Twelve Months Ended
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,				Dec. 31,				Dec. 31,
			2022				2022				2022				2022				2021				2022				2021
Stockholders' Equity		$	292,295			$	265,619			$	321,449			$	393,886			$	472,432			$	292,295			$	472,432
Less Goodwill and other intangibles			101,666				102,368				101,767				102,187				102,606				101,666				102,606
Tangible Common Equity		$	190,629			$	163,251			$	219,682			$	291,699			$	369,826			$	190,629			$	369,826
Average Stockholders' Equity			264,939				330,300				354,981				456,206				431,709				351,466				379,425
Less average Goodwill and other intangibles			102,126				101,981				102,042				102,462				84,580				102,151				58,111
Average Tangible Common Equity		$	162,813			$	228,319			$	252,939			$	353,744			$	347,129			$	249,315			$	321,314
Reconciliation of Net Income, Less Merger and Certain Items
		For the Three Months Ended																				For the Twelve Months Ended
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,				Dec. 31,				Dec. 31,
			2022				2022				2022				2022				2021				2022				2021
Net income		$	13,356			$	15,446			$	15,951			$	15,844			$	5,702			$	60,597			$	51,844
Acquisition related costs - after tax			475				711				564				1,540				5,232				3,290				5,731
Acquisition related provision - after tax			0				0				0				0				3,846				0				3,846
Lawsuit settlement income - after tax			0				0				0				(6,616	)			0				(6,616	)			0
Lawsuit settlement contingent legal expense - after tax			0				0				0				1,639				0				1,639				0
Charitable donation - after tax			0				0				0				4,740				0				4,740				0
FHLB prepayment penalties - after tax			0				0				0				0				1,425				0				1,682
Net loss (gain) on asset/security sales - after tax			268				4				(25	)			97				134				344				(598	)
Gain on sale of credit card portfolio - after tax			0				0				0				0				(189	)			0				(189	)
Net income - Adjusted		$	14,099			$	16,161			$	16,490			$	17,244			$	16,150			$	63,994			$	62,316
Diluted EPS excluding merger and one-time items		$	0.42			$	0.48			$	0.49			$	0.51			$	0.50			$	1.89			$	2.13
Return on Average Assets excluding merger and certain items (Annualized)			1.36	%			1.55	%			1.59	%			1.65	%			1.65	%			1.54	%			1.83	%
Return on Average Equity excluding merger and certain items (Annualized)			21.29	%			19.57	%			18.58	%			15.12	%			14.84	%			18.21	%			16.42	%
Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized)			34.64	%			28.31	%			26.08	%			19.50	%			18.46	%			25.67	%			19.39	%
Efficiency ratio excluding certain items
		For the Three Months Ended																				For the Twelve Months Ended
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,				Dec. 31,				Dec. 31,
			2022				2022				2022				2022				2021				2022				2021
Net interest income, tax equated		$	30,212			$	32,636			$	32,583			$	32,100			$	30,486			$	127,530			$	110,835
Noninterest income			8,200				8,827				9,477				17,698				9,538				44,202				38,193
Legal settlement income			0				0				0				(8,375	)			0				(8,375	)			0
Net loss (gain) on asset/security sales			338				6				(32	)			123				170				435				(757	)
Gain on sale of credit card portfolio			0				0				0				0				(239	)			0				(239	)
Net interest income and noninterest income adjusted			38,750				41,469				42,028				41,546				39,955				163,792				148,032
Noninterest expense less intangible amortization			20,393				20,967				21,042				30,036				27,247				92,438				77,817
Charitable donation			0				0				0				6,000				0				6,000				0
Contingent legal settlement expense			0				0				0				2,075				0				2,075				0
Acquisition related costs			584				872				674				1,940				6,521				4,070				7,109
FHLB prepayment penalties			0				0				0				0				1,804				0				2,129
Noninterest income adjusted			19,809				20,095				20,368				20,021				18,922				80,293				68,579
Efficiency ratio excluding one-time items			51.12	%			48.46	%			48.46	%			48.19	%			47.36	%			49.02	%			46.33	%
Net interest margin excluding acquisition marks and PPP interest and fees
		For the Three Months Ended																				For the Twelve Months Ended
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,				Dec. 31,				Dec. 31,
			2022				2022				2022				2022				2021				2022				2021
Net interest income, tax equated		$	30,212			$	32,636			$	32,583			$	32,100			$	30,486			$	127,530			$	110,835
Acquisition marks			209				246				381				957				496				1,793				932
PPP interest and fees			10				62				634				686				979				1,392				6,621
Adjusted and annualized net interest income			119,972				129,312				126,272				121,828				115,098				124,345				103,283
Average earning assets			4,047,343				4,065,085				4,015,385				3,931,506				3,631,320				4,015,951				3,210,079
Less PPP average balances			485				1,586				16,019				30,003				47,939				11,914				95,226
Adjusted average earning assets			4,046,858				4,063,499				3,999,366				3,901,503				3,583,381				4,004,037				3,114,853
Net interest margin excluding marks and PPP interest and fees			2.96	%			3.18	%			3.16	%			3.12	%			3.21	%			3.11	%			3.32	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230124005711/en/

Kevin J. Helmick, President and CEO

330.533.3341

Email: exec@farmersbankgroup.com

Source: Farmers National Banc Corp.

FAQ

What is Farmers National Banc Corp.'s earnings per share for Q4 2022?

Farmers National Banc Corp. reported diluted earnings per share of $0.39 for Q4 2022.

How did Farmers National Banc Corp.'s net income for Q4 2022 compare to Q4 2021?

Net income for Q4 2022 was $13.4 million, up from $5.7 million in Q4 2021.

What was the total asset figure for Farmers National Banc Corp. at the end of Q4 2022?

Total assets for Farmers National Banc Corp. were $4.08 billion at December 31, 2022.

What led to the decline in customer deposits for Farmers National Banc Corp. in Q4 2022?

Customer deposits declined due to intense competition and inflation-driven withdrawals.

What are the anticipated impacts of the Emclaire Financial Corp. acquisition on Farmers National Banc Corp.?

The acquisition is expected to significantly increase total assets to over $5 billion and expand market presence.