- Earnings per diluted share of $0.40 ($0.41 excluding certain
items, non-GAAP) for the second quarter of 2023
- 162 consecutive quarters of profitability
- Additional FHLB borrowing capacity of $707.8 million as of
June 30, 2023
- Uninsured deposits (excluding collateralized deposits) are
approximately 15.0% of customer deposit base
- Available for sale securities not pledged totaled $290.0
million at June 30, 2023
- Efficiency ratio of 56.3%, or 55.3% excluding certain items,
non-GAAP, for the second quarter of 2023
- Return on average assets of 1.18% for the second quarter of
2023
- ROAE and ROATE (non-GAAP) of 16.1% and 33.6%, respectively,
for the second quarter of 2023
Farmers National Banc Corp. (“Farmers” or the “Company”)
(NASDAQ: FMNB) reported today net income of $15.0 million, or $0.40
per diluted share, for the three months ended June 30, 2023,
compared to $16.0 million, or $0.47 per diluted share, for the
three months ended June 30, 2022. Net income for the second quarter
of 2023 included pretax items of $442,000 for acquisition related
costs and combined net gains of $6,000 on the sale of securities
and the sale of other assets. Excluding these items (non-GAAP), net
income for the second quarter of 2023 would have been $15.3
million, or $0.41 per diluted share.
Kevin J. Helmick, President and CEO, stated “As we navigate an
extremely fluid banking landscape, we will continue to focus on
prudent expense management, growing revenue, and maintaining a
strong balance sheet, while supporting our communities and
investing in our growth strategies. We believe this approach will
drive long-term shareholder value as we emerge from this
challenging period a stronger and more profitable company,”
concluded Mr. Helmick.
Balance Sheet
The Company’s total assets were $5.07 billion at June 30, 2023
compared to $5.11 billion at March 31, 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. Gross
loans (excluding loans held for sale) have increased by $750.5
million since December 31, 2022 and $2.9 million since March 31,
2023. Emclaire was responsible for $740.7 million of the increase
in loans since December 31, 2022.
Securities available for sale were $1.32 billion at June 30,
2023, compared to $1.36 billion at March 31, 2023, and $1.27
billion at December 31, 2022. The increase since December is due to
the addition of $127.0 million in available for sale securities
from Emclaire and a reduction in the gross amount of unrealized
losses which totaled $266.5 million at December 31, 2022 compared
to a gross unrealized loss of $245.0 million at June 30, 2023.
Offsetting these increases, the Company also had sales and runoff
from the portfolio in the first six months of 2023. While bond
market volatility is expected to continue throughout 2023, the
Company will continue to look to opportunistically shrink the size
of the securities portfolio to increase liquidity and optimize
profitability.
Total customer deposits (excluding brokered time deposits) were
$4.25 billion at June 30, 2023, compared to $4.31 billion at March
31, 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 was $367.0 million at June 30, 2023
compared to $374.6 million at March 31, 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
along with a decrease in the loss from accumulated other
comprehensive income offset by increased treasury stock activity.
The Company repurchased 850,799 shares of its common stock during
the first quarter of 2023 but did not repurchase any shares during
the second quarter. The accumulated other comprehensive loss has
declined $17.0 million between December 31, 2022 and June 30, 2023
as market rates declined during the first half of 2023 and pricing
on available for sale securities improved.
Liquidity
The Company continues to monitor its deposit base and balance
sheet composition as well as its access to other sources of
liquidity. At June 30, 2023, the Company’s loan to deposit ratio
was 73.9% and the Company’s average deposit balance per account was
$27,539. In addition, the Company’s ratio of uninsured deposits
(excluding collateralized deposits) is approximately 15.0% which
remains significantly lower than the banking institutions that
failed in the first quarter of 2023.
The Company has access to an additional $707.8 million of FHLB
borrowing capacity at June 30, 2023 along with $290.0 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 provision for credit losses and unfunded commitments was
$25,000 for the second quarter of 2023 compared to $616,000 for the
second quarter of 2022. Annualized net charge-offs as a percentage
of average loans was 0.10% for the three months ended June 30,
2023, compared to 0.01% for the same period in 2022. The allowance
for credit losses to total loans was 1.11% at June 30, 2023
compared to 1.14% at March 31, 2023, and 1.12% at December 31,
2022.
Non-performing loans (NPLs) were $18.0 million at June 30, 2023
compared to $18.0 million at March 31, 2023, and $14.8 million at
December 31, 2022. The increase since December was primarily due to
the addition of Emclaire. The NPL to loans ratio was 0.57% at June
30, 2023 compared to 0.57% at March 31, 2023 and 0.62% at December
31, 2022. Non-performing assets to assets was 0.36% at June 30,
2023, compared to 0.35% at March 31, 2023, and 0.36% at December
31, 2022. Early stage delinquencies, defined as 30-89 days
delinquent, 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.
Net Interest Income
The Company recorded net interest income of $34.6 million in the
second quarter of 2023 compared to $31.7 million for the second
quarter of 2022. The Company had more earning assets in 2023 due to
the acquisition of Emclaire but this was partially offset by a
decline of 33 basis point in the net interest margin. The net
interest margin was 2.92% for the second quarter of 2023 compared
to 3.07% in the first quarter of 2023 and 3.25% for the second
quarter of 2022. The decline in net interest margin between the
second quarter of 2023 and the second 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. Excluding the impact of acquisition marks and
related accretion and PPP interest and fees, the net interest
margin (non-GAAP) for the second quarter of 2023 was 2.68% compared
to 2.86% for the first quarter of 2023 and 3.16% for the second
quarter of 2022.
Noninterest Income
Noninterest income totaled $9.4 million for the three months
ended June 30, 2023, compared to $9.5 million for the three months
ended June 30, 2022. Service charges on deposit accounts have
increased by $362,000 in the second quarter of 2023 compared to the
second quarter of 2022. The increase is 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 second quarter of 2023 compared to the second
quarter of 2022 due to the Emclaire acquisition. Insurance agency
commissions are up $246,000 in the second quarter of 2023 compared
to the second quarter of 2022 as growth in the insurance business
and increased annuity sales have bolstered income. Investment
commissions are down slightly for the quarter ended June 30, 2023
compared to the quarter ended June 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. Other noninterest income
has declined by $1.3 million for the quarter ending June 30, 2023
compared to the second quarter of 2022. This decrease is primarily
due to a decline in the income associated with the Company’s
investments in SBA/SBIC funds. The performance of these funds in
2022 was much better than had been experienced historically and
2023 has returned to more normal levels of profitability.
Noninterest Expense
Noninterest expense was $26.4 million for the three months ended
June 30, 2023, compared to $21.5 million for the three months ended
June 30, 2022. The increase in expense is primarily due to the
acquisition of Emclaire. Salaries and employee benefits increased
$2.6 million to $13.6 million in the second 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 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 increased due to
the acquisition and due to some acceleration of the core deposit
intangible recorded in the Cortland Bancorp acquisition in 2021.
The Company recorded an additional $359,000 of intangible
amortization in the second quarter of 2023 related to the Cortland
acquisition. Merger related costs were $442,000 for the second
quarter of 2023 compared to $674,000 in the second quarter of
2022.
About Farmers National Banc Corp.
Founded in 1887, Farmers National Banc Corp. is a diversified
financial services company headquartered in Canfield, Ohio, with
$5.1 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 June 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 Six Months
Ended June 30, March 31, Dec. 31, Sept.
30, June 30, June 30, June 30,
Percent
2023
2023
2022
2022
2022
2023
2022
Change Total interest income
$
52,804
$
51,233
$
38,111
$
36,410
$
34,286
$
104,037
$
67,565
54.0
%
Total interest expense
18,226
14,623
8,679
4,629
2,575
32,849
4,612
612.3
%
Net interest income
34,578
36,610
29,432
31,781
31,711
71,188
62,953
13.1
%
Provision (credit) for credit losses
25
8,599
416
448
616
8,624
258
3242.6
%
Noninterest income
9,449
10,425
8,200
8,827
9,477
19,874
27,175
-26.9
%
Acquisition related costs
442
4,313
584
872
674
4,755
2,614
81.9
%
Other expense
25,944
26,409
20,511
20,527
20,787
52,353
49,303
6.2
%
Income before income taxes
17,616
7,714
16,121
18,761
19,111
25,330
37,953
-33.3
%
Income taxes
2,650
639
2,765
3,315
3,160
3,289
6,158
-46.6
%
Net income
$
14,966
$
7,075
$
13,356
$
15,446
$
15,951
$
22,041
$
31,795
-30.7
%
Average diluted shares outstanding
37,320
37,933
33,962
33,932
33,923
37,624
33,927
Basic earnings per share
0.40
0.19
0.39
0.46
0.47
0.59
0.94
Diluted earnings per share
0.40
0.19
0.39
0.46
0.47
0.59
0.94
Cash dividends per share
0.17
0.17
0.17
0.16
0.16
0.34
0.32
Performance Ratios Net Interest Margin (Annualized)
2.92
%
3.07
%
2.99
%
3.21
%
3.25
%
3.00
%
3.25
%
Efficiency Ratio (Tax equivalent basis)
56.28
%
62.53
%
52.59
%
50.55
%
49.95
%
59.50
%
55.56
%
Return on Average Assets (Annualized)
1.18
%
0.56
%
1.31
%
1.48
%
1.54
%
0.87
%
1.53
%
Return on Average Equity (Annualized)
16.12
%
7.71
%
20.16
%
18.71
%
17.97
%
11.94
%
15.67
%
Dividends to Net Income
42.54
%
90.50
%
43.10
%
35.06
%
33.95
%
58.09
%
34.07
%
Other Performance Ratios (Non-GAAP) Return on Average
Tangible Assets
1.23
%
0.58
%
1.34
%
1.52
%
1.57
%
0.90
%
1.56
%
Return on Average Tangible Equity
33.55
%
16.31
%
32.81
%
27.06
%
25.23
%
25.05
%
20.96
%
Consolidated Statements of Financial Condition June
30, March 31, Dec. 31, Sept. 30, June
30,
2023
2023
2022
2022
2022
Assets Cash and cash equivalents
$
116,063
$
128,001
$
75,551
$
79,981
$
65,458
Securities available for sale
1,316,878
1,355,449
1,268,025
1,295,133
1,361,682
Other investments
44,975
39,670
33,444
34,399
34,451
Loans held for sale
2,197
1,703
858
2,142
2,714
Loans
3,155,200
3,152,339
2,404,750
2,399,981
2,374,485
Less allowance for credit losses
34,957
36,011
26,978
27,282
27,454
Net Loans
3,120,243
3,116,328
2,377,772
2,372,699
2,347,031
Other assets
473,098
468,735
326,550
335,668
303,028
Total Assets
$
5,073,454
$
5,109,886
$
4,082,200
$
4,120,022
$
4,114,364
Liabilities and Stockholders' Equity Deposits
Noninterest-bearing
$
1,084,232
$
1,106,870
$
896,957
$
934,638
$
983,713
Interest-bearing
3,165,381
3,207,121
2,526,760
2,590,054
2,586,829
Brokered time deposits
21,135
82,169
138,051
42,459
54,996
Total deposits
4,270,748
4,396,160
3,561,768
3,567,151
3,625,538
Other interest-bearing liabilities
388,437
292,324
183,211
243,098
137,985
Other liabilities
47,278
46,760
44,926
44,154
29,392
Total liabilities
4,706,463
4,735,244
3,789,905
3,854,403
3,792,915
Stockholders' Equity
366,991
374,642
292,295
265,619
321,449
Total Liabilities and Stockholders' Equity
$
5,073,454
$
5,109,886
$
4,082,200
$
4,120,022
$
4,114,364
Period-end shares outstanding
37,457
37,439
34,055
34,060
34,032
Book value per share
$
9.80
$
10.01
$
8.58
$
7.80
$
9.45
Tangible book value per share (Non-GAAP)*
4.67
4.84
5.60
4.79
6.46
* 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)
10.39
%
10.04
%
13.71
%
13.36
%
13.30
%
Total Risk Based Capital Ratio (a)
13.94
%
13.60
%
17.79
%
17.44
%
17.46
%
Tier 1 Risk Based Capital Ratio (a)
10.89
%
10.54
%
14.32
%
13.97
%
13.92
%
Tier 1 Leverage Ratio (a)
7.68
%
7.43
%
9.84
%
10.24
%
9.56
%
Equity to Asset Ratio
7.23
%
7.33
%
7.16
%
6.45
%
7.81
%
Tangible Common Equity Ratio (b)
3.58
%
3.69
%
4.79
%
4.06
%
5.47
%
Net Loans to Assets
61.50
%
60.99
%
58.25
%
57.59
%
57.04
%
Loans to Deposits
73.88
%
71.71
%
67.52
%
67.28
%
65.49
%
Asset Quality Non-performing loans
$
17,956
$
17,959
$
14,803
$
12,976
$
14,107
Non-performing assets
18,167
18,053
14,876
13,042
14,107
Loans 30 - 89 days delinquent
12,321
10,219
9,605
6,659
8,716
Charged-off loans
971
469
754
783
177
Recoveries
172
198
184
178
135
Net Charge-offs
799
271
570
605
42
Annualized Net Charge-offs to Average Net Loans
0.10
%
0.03
%
0.10
%
0.10
%
0.01
%
Allowance for Credit Losses to Total Loans
1.11
%
1.14
%
1.12
%
1.14
%
1.16
%
Non-performing Loans to Total Loans
0.57
%
0.57
%
0.62
%
0.54
%
0.59
%
Allowance to Non-performing Loans
194.68
%
200.52
%
182.25
%
210.25
%
194.61
%
Non-performing Assets to Total Assets
0.36
%
0.35
%
0.36
%
0.32
%
0.34
%
(a) June 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
June 30,
March 31,
Dec. 31,
Sept. 30,
June 30,
End of Period Loan Balances
2023
2023
2022
2022
2022
Commercial real estate
$
1,284,974
$
1,286,830
$
1,028,050
$
1,028,484
$
1,040,243
Commercial
362,664
361,845
293,643
296,932
285,981
Residential real estate
849,533
853,074
475,791
474,014
464,489
HELOC
138,535
137,319
132,179
132,267
129,392
Consumer
260,326
260,596
221,260
222,706
218,219
Agricultural loans
250,807
244,938
246,937
239,081
230,477
Total, excluding net deferred loan costs
$
3,146,839
$
3,144,602
$
2,397,860
$
2,393,484
$
2,368,801
For the Three Months Ended June 30,
March 31, Dec. 31, Sept. 30,
June 30, End of Period Customer Deposit
Balances
2023
2023
2022
2022
2022
Noninterest-bearing demand
$
1,084,232
$
1,106,870
$
896,957
$
934,638
$
983,713
Interest-bearing demand
1,383,326
1,473,001
1,224,884
1,399,227
1,416,129
Money market
610,051
599,037
435,369
393,005
372,723
Savings
511,642
535,321
441,978
460,709
455,555
Certificate of deposit
660,362
599,762
424,529
337,113
342,422
Total customer deposits
$
4,249,613
$
4,313,991
$
3,423,717
$
3,524,692
$
3,570,542
For the Three Months
Ended
For the Six Months Ended
June 30,
March 31,
Dec. 31,
Sept. 30,
June 30,
June 30,
June 30,
Noninterest Income
2023
2023
2022
2022
2022
2023
2022
Service charges on deposit accounts $
1,501
$
1,432
$
1,203
$
1,229
$
1,139
$
2,933
$
2,284
Bank owned life insurance income, including death benefits
584
547
590
406
405
1,131
814
Trust fees
2,248
2,587
2,373
2,370
2,376
4,835
4,895
Insurance agency commissions
1,332
1,456
1,133
1,136
1,086
2,788
2,133
Security gains (losses), including fair value changes for equity
securities
13
121
(366
)
(17
)
(60
)
134
(71
)
Retirement plan consulting fees
382
307
337
332
323
689
720
Investment commissions
476
393
508
424
557
869
1,251
Net gains on sale of loans
406
310
242
326
365
716
1,494
Other mortgage banking fee income (loss), net
234
153
98
94
39
387
99
Debit card and EFT fees
1,810
1,789
1,407
1,463
1,528
3,599
2,944
Other noninterest income
463
1,330
675
1,064
1,719
1,793
10,612
Total Noninterest Income $
9,449
$
10,425
$
8,200
$
8,827
$
9,477
$
19,874
$
27,175
For the Three Months Ended For the Six Months
Ended
June 30,
March 31,
Dec. 31,
Sept. 30,
June 30,
June 30,
June 30,
Noninterest Expense
2023
2023
2022
2022
2022
2023
2022
Salaries and employee benefits
$
13,625
$
14,645
$
11,385
$
10,724
$
11,073
$
28,270
$
22,904
Occupancy and equipment
3,859
3,869
2,753
3,028
2,918
7,728
5,598
FDIC insurance and state and local taxes
1,494
1,222
1,010
1,017
979
2,716
1,924
Professional fees
1,190
1,114
938
985
1,056
2,304
4,191
Merger related costs
442
4,313
584
872
674
4,755
2,614
Advertising
478
409
472
596
487
887
879
Intangible amortization
1,222
909
702
432
419
2,131
839
Core processing charges
1,144
1,164
742
738
1,123
2,308
1,868
Other noninterest expenses
2,932
3,077
2,509
3,007
2,732
6,009
11,100
Total Noninterest Expense
$
26,386
$
30,722
$
21,095
$
21,399
$
21,461
$
57,108
$
51,917
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 June 30, 2023 June 30, 2022 AVERAGE
YIELD/ AVERAGE YIELD/ BALANCE INTEREST (1) RATE (1) BALANCE
INTEREST (1) RATE (1) EARNING ASSETS Loans (2)
$
3,144,461
$
42,422
5.40
%
$
2,337,251
$
25,792
4.41
%
Taxable securities
1,157,284
6,654
2.30
1,100,538
5,223
1.90
Tax-exempt securities (2)
415,003
3,278
3.16
474,034
3,832
3.23
Other investments
41,361
594
5.74
34,030
216
2.54
Federal funds sold and other
72,801
551
3.03
69,532
95
0.55
Total earning assets
4,830,910
53,499
4.43
4,015,385
35,158
3.50
Nonearning assets
225,131
140,334
Total assets
$
5,056,041
$
4,155,719
INTEREST-BEARING LIABILITIES Time deposits
$
646,782
$
4,525
2.80
%
$
354,692
$
552
0.62
%
Brokered time deposits
59,402
686
4.62
45,767
49
0.43
Savings deposits
1,133,371
2,402
0.85
837,726
141
0.07
Demand deposits - interest bearing
1,428,409
6,878
1.93
1,430,273
909
0.25
Short term borrowings
213,549
2,727
5.11
42,527
97
0.91
Long term borrowings
88,382
1,008
4.56
87,914
827
3.76
Total interest-bearing liabilities
$
3,569,895
18,226
2.04
$
2,798,899
2,575
0.37
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand
deposits - noninterest bearing
1,067,605
972,174
Other liabilities
47,120
29,665
Stockholders' equity
371,421
354,981
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
5,056,041
$
4,155,719
Net interest income and interest rate spread
$
35,273
2.39
%
$
32,583
3.13
%
Net interest margin
2.92
%
3.25
%
(1) Interest and yields are calculated on a tax-equivalent basis
where applicable. (2) For 2023, adjustments of $91 thousand and
$604 thousand, respectively, were made to tax equate income on tax
exempt loans and tax exempt securities. For 2022, adjustments of
$78 thousand and $794 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.
Six Months Ended Six
Months Ended June 30, 2023 June 30, 2022
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST (1) RATE (1) BALANCE
INTEREST (1) RATE (1) EARNING ASSETS
Loans (2)
$
3,140,500
$
83,365
5.31
%
$
2,326,392
$
51,438
4.42
%
Taxable securities
1,164,400
13,204
2.27
1,054,506
9,810
1.86
Tax-exempt securities (2)
426,743
6,797
3.19
467,947
7,559
3.23
Other investments
38,976
970
4.98
32,584
346
2.12
Federal funds sold and other
77,870
1,161
2.98
93,591
143
0.31
Total earning assets
4,848,489
105,497
4.35
3,975,020
69,296
3.49
Nonearning assets
221,955
192,085
Total assets
$
5,070,444
$
4,167,105
INTEREST-BEARING LIABILITIES
Time deposits
$
618,637
$
7,864
2.54
%
$
366,617
$
1,196
0.65
%
Brokered time deposits
144,747
3,007
4.15
30,745
64
0.42
Savings deposits
1,143,539
4,356
0.76
840,533
308
0.07
Demand deposits - interest bearing
1,423,211
11,971
1.68
1,420,957
1,327
0.19
Short term borrowings
147,436
3,648
4.95
22,486
98
0.87
Long term borrowings
88,326
2,003
4.54
87,856
1,619
3.69
Total interest-bearing liabilities
$
3,565,896
32,849
1.84
$
2,769,194
4,612
0.33
NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS' EQUITY Demand
deposits - noninterest bearing
$
1,087,403
$
964,380
Other liabilities
47,996
27,842
Stockholders' equity
369,149
405,689
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
$
5,070,444
$
4,167,105
Net interest income and interest rate spread
$
72,648
2.51
%
$
64,684
3.16
%
Net interest margin
3.00
%
3.25
%
(1) Interest and yields are
calculated on a tax-equivalent basis where applicable. (2) For
2023, adjustments of $178 thousand and $1.3 million, respectively,
were made to tax equate income on tax exempt loans and tax exempt
securities. For 2022, adjustments of $162 thousand and $1.6
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 Six Months Ended
June 30,
March 31,
Dec. 31,
Sept. 30,
June 30,
June 30,
June 30,
2023
2023
2022
2022
2022
2023
2022
Total Assets
$
5,073,454
$
5,109,886
$
4,082,200
$
4,120,022
$
4,114,364
$
5,073,454
$
4,114,364
Less Goodwill and other intangibles
192,052
193,273
101,666
102,368
101,767
192,052
101,767
Tangible Assets
$
4,881,402
$
4,916,613
$
3,980,534
$
4,017,654
$
4,012,597
$
4,881,402
$
4,012,597
Average Assets
5,070,444
5,085,009
4,080,497
4,164,855
4,155,719
5,070,444
4,167,105
Less average Goodwill and other intangibles
192,972
193,368
102,126
101,981
102,042
193,169
102,251
Average Tangible Assets
$
4,877,472
$
4,891,641
$
3,978,371
$
4,062,874
$
4,053,677
$
4,877,275
$
4,064,854
Reconciliation of Common Stockholders' Equity to
Tangible Common Equity For the Three Months Ended For
the Six Months Ended
June 30,
March 31,
Dec. 31,
Sept. 30,
June 30,
June 30,
June 30,
2023
2023
2022
2022
2022
2023
2022
Stockholders' Equity
$
366,991
$
374,642
$
292,295
$
265,619
$
321,449
$
366,991
$
321,449
Less Goodwill and other intangibles
192,052
193,273
101,666
102,368
101,767
192,052
101,767
Tangible Common Equity
$
174,939
$
181,369
$
190,629
$
163,251
$
219,682
$
174,939
$
219,682
Average Stockholders' Equity
371,421
366,851
264,939
330,300
354,981
369,149
405,689
Less average Goodwill and other intangibles
192,972
193,368
102,126
101,981
102,042
193,169
102,251
Average Tangible Common Equity
$
178,449
$
173,483
$
162,813
$
228,319
$
252,939
$
175,980
$
303,438
Reconciliation of Net Income, Less Merger and
Certain Items For the Three Months Ended For the Six
Months Ended
June 30,
March 31,
Dec. 31,
Sept. 30,
June 30,
June 30,
June 30,
2023
2023
2022
2022
2022
2023
2022
Net income
$
14,966
$
7,075
$
13,356
$
15,446
$
15,951
$
22,041
$
31,795
Acquisition related costs - after tax
354
3,449
475
711
564
3,803
2,104
Acquisition related provision - after tax
0
6,077
0
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
Charitable donation - after tax
0
0
0
0
0
0
4,740
Net loss (gain) on asset/security sales - after tax
(5
)
(72
)
268
4
(25
)
(77
)
72
Net income - Adjusted
$
15,315
$
16,529
$
14,099
$
16,161
$
16,490
$
31,844
$
33,734
Diluted EPS excluding merger and one-time items
$
0.41
$
0.44
$
0.42
$
0.48
$
0.49
$
0.85
$
0.99
Return on Average Assets excluding merger and certain items
(Annualized)
1.21
%
1.30
%
1.36
%
1.55
%
1.59
%
1.26
%
1.62
%
Return on Average Equity excluding merger and certain items
(Annualized)
16.49
%
18.02
%
21.29
%
19.57
%
18.58
%
17.25
%
16.63
%
Return on Average Tangible Equity excluding acquisition costs and
certain items (Annualized)
34.33
%
38.11
%
34.64
%
28.31
%
26.08
%
36.19
%
22.23
%
Efficiency ratio excluding certain items For the
Three Months Ended For the Six Months Ended June
30, March 31, Dec. 31, Sept. 30, June
30, June 30, June 30,
2023
2023
2022
2022
2022
2023
2022
Net interest income, tax equated
$
35,273
$
37,374
$
30,212
$
32,636
$
32,583
$
72,648
$
64,684
Noninterest income
9,449
10,425
8,200
8,827
9,477
19,874
27,175
Legal settlement income
0
0
0
0
0
0
(8,375
)
Net loss (gain) on asset/security sales
(6
)
(91
)
338
6
(32
)
(97
)
91
Net interest income and noninterest income adjusted
44,716
47,708
38,750
41,469
42,028
92,425
83,575
Noninterest expense less intangible amortization
25,163
29,813
20,393
20,967
21,042
54,976
51,078
Charitable donation
0
0
0
0
0
0
6,000
Contingent legal settlement expense
0
0
0
0
0
0
2,075
Acquisition related costs
442
4,313
584
872
674
4,755
2,614
Noninterest income adjusted
24,721
25,500
19,809
20,095
20,368
50,221
40,389
Efficiency ratio excluding one-time items
55.28
%
53.45
%
51.12
%
48.46
%
48.46
%
54.34
%
48.33
%
Net interest margin excluding acquisition marks and PPP
interest and fees For the Three Months Ended For the
Six Months Ended June 30, March 31, Dec.
31, Sept. 30, June 30, June 30, June
30,
2023
2023
2022
2022
2022
2023
2022
Net interest income, tax equated
$
35,273
$
37,374
$
30,212
$
32,636
$
32,583
$
72,648
$
64,684
Acquisition marks
2,884
2,628
174
215
349
5,512
1,338
PPP interest and fees
3
0
10
62
634
3
1,320
Adjusted and annualized net interest income
129,544
138,984
120,112
129,436
126,400
134,266
124,052
Average earning assets
4,830,910
4,866,263
4,047,343
4,065,085
4,015,385
4,848,489
3,975,020
Less PPP average balances
277
310
485
1,586
16,019
271
22,972
Adjusted average earning assets
4,830,633
4,865,953
4,046,858
4,063,499
3,999,366
4,848,218
3,952,048
Net interest margin excluding marks and PPP interest and fees
2.68
%
2.86
%
2.97
%
3.19
%
3.16
%
2.77
%
3.14
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230725994151/en/
Farmers National Banc Corp. Kevin J. Helmick, President and CEO
Email: exec@farmersbankgroup.com
Farmers National Banc (NASDAQ:FMNB)
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