FMNB Farmers National Banc Corporation

• 167 consecutive quarters of profitability
• Strong commercial loan growth of $35.2 million, or 7.2% annualized, for the third quarter of 2024
• Overall loan growth of $43.1 million, or 5.3% annualized, for the third quarter of 2024
• Customer deposit growth of $81.1 million, or 7.7% annualized, for the third quarter of 2024
• Strong growth in fee-based businesses
• Wealth management assets under management have grown to $4.0 billion at September 30, 2024

Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced net income of $8.5 million, or $0.23 per diluted share, for the quarter ended September 30, 2024, compared to $13.3 million, or $0.36 per diluted share, for the quarter ended September 30, 2023. Net income in the third quarter of 2024 was impacted by a single $12.5 million commercial credit backed by office space which resulted in a $4.4 million charge-off along with the establishment of a specific reserve on the credit in the amount of $1.2 million. The impact of this credit reduced third quarter results by $0.12 per diluted share.

Kevin J. Helmick, President and CEO, stated “Our third quarter performance was solid as we experienced strong loan and deposit growth, reflecting strengthening levels of underlying profitability. We produced outstanding loan growth for a second consecutive quarter along with great results from our fee-based business lines. Overall, we believe we are very well positioned to grow earnings in 2025, while navigating continued macro-level uncertainty.”

Balance Sheet

The Company’s total assets were $5.24 billion at September 30, 2024, an increase from $5.16 billion at June 30, 2024, and $5.08 billion at December 31, 2023. Loans increased $82.4 million from December 31, 2023 to $3.28 billion at September 30, 2024 and increased $43.1 million from June 30, 2024 to September 30, 2024. The 5.3% annualized loan growth from the second quarter of 2024 to the third quarter of 2024 was driven by strong commercial loan growth of $35.2 million. With a second consecutive quarter of positive loan growth, the Company now anticipates total loans to increase by approximately 2.8% - 3.0% for 2024. The Company remains committed to maintaining solid asset quality and prudent pricing standards, which is expected to contribute to higher overall profitability.

Securities available for sale totaled $1.29 billion at September 30, 2024, compared to $1.25 billion at June 30, 2024, and $1.30 billion at December 31, 2023. Gross unrealized losses on the portfolio totaled $189.4 million at September 30, 2024, a decrease from $242.3 million at June 30, 2024, and $217.1 million at December 31, 2023. While interest rates have started to decline, the Company still expects bond market volatility to continue for the remainder of 2024 and into 2025.

Total deposits increased to $4.36 billion at September 30, 2024, compared to $4.21 billion at June 30, 2024, and $4.18 billion at December 31, 2023. The increase since December 31, 2023, was driven by the acquisition of $74.9 in brokered deposits in the third quarter of 2024 and growth in customer deposits (non brokered) of $109.5 million. The increase since June 30, 2024, was driven by the brokered deposits and an increase in customer deposits of $81.1 million. The brokered deposits were used to pay down more expensive wholesale funding.

Total stockholders’ equity increased to $439.7 million at September 30, 2024, compared to $396.7 million at June 30, 2024, and $404.4 million at December 31, 2023. The increase from both prior periods has primarily been driven by a decrease in the unrealized losses on investment securities.

Credit Quality

The Company’s non-performing loans increased to $19.1 million at September 30, 2024, compared to $12.9 million at June 30, 2024, and $15.1 million at December 31, 2023. The increase resulted from the addition of the remaining $8.1 million balance of the single commercial credit discussed previously, offset by large declines in the balance of other non-performing loans. Non-performing loans to total loans were 0.58% at September 30, 2024, compared to 0.40% at June 30, 2024 and 0.47% at December 31, 2023. The Company’s loans which were 30-89 days delinquent were $15.6 million at September 30, 2024, or 0.47% of total loans. This is down significantly from the $18.5 million figure reported at June 30, 2024 and the $16.7 million figure from December 31, 2023.

The provision for credit losses and unfunded commitments totaled $7.0 million for the three months ended September 30, 2024, compared to $243,000 for the three months ended September 30, 2023. The increased provision for credit losses was primarily due to the increased level of net charge-offs and reserving activity resulting from the deterioration in the single credit. Strong loan growth during the quarter also increased provision costs during the quarter. Annualized net charge-offs as a percentage of average loans were 0.58% for the third quarter of 2024, compared to 0.05% for the third quarter of 2023. The allowance for credit losses to total loans was 1.10% at September 30, 2024, compared to 1.05% at June 30 2024, and 1.08% at December 31, 2023.

Net Interest Income

Net interest income for the third quarter of 2024 was $31.9 million compared to $33.8 million in the third quarter of 2023. Average interest earning assets increased to $4.89 billion in the third quarter of 2024 compared to $4.82 billion for the third quarter of 2023. The increase was driven by an increase in average loan balances of $88.3 million and an increase in fed funds sold and other of $51.1 million. These increases were offset by declines in the average balance of investment securities. The net interest margin declined to 2.66% for the third quarter of 2024 from 2.86% for the third quarter of 2023 and 2.71% for the second quarter of 2024. The year-over-year decline in net interest margin was due to higher funding costs outstripping the increase in yields on earning assets. The increase in funding costs has been due to the rapid increase in deposit rates due to intense competition for deposits, the Federal Reserve’s rate hiking cycle, and the runoff of noninterest bearing deposit balances which are being replaced with more costly wholesale funding. The decline in net interest margin compared to the second quarter of 2024 was due to the higher balance of fed funds sold and other along with a decline in the accretion of acquisition marks. The Federal Reserve’s 50 basis point cut in the fed funds rate at the end of September 2024 will have a positive impact on the Company’s net interest margin in the fourth quarter of 2024. Excluding acquisition marks and PPP interest, non-GAAP, the Company’s net interest margin was 2.48% in the third quarter of 2024 compared to 2.61% in the third quarter of 2023.

Noninterest Income

Noninterest income for the third quarter of 2024 was $12.3 million compared to $9.8 million for the third quarter of 2023. This increase was due to solid growth in the Company’s fee-based business lines along with gains from SBIC funds and a $444,000 gain on the purchase of $3.0 million of the Company’s subordinated debt.

Service charges on deposit accounts increased $280,000 to $2.0 million for the third quarter of 2024 compared to $1.7 million for the third quarter in 2023. The Company undertook a review of all service charges in late 2023 and early 2024 and implemented fee increases across deposit product lines in the second quarter of 2024. Trust fees increased by $217,000 to $2.5 million at September 30, 2024, from $2.3 million at September 30, 2023. The increase was due to continued growth in the business unit. Insurance agency commissions grew to $1.4 million in the third quarter of 2024 from $1.1 million in the third quarter of 2023. The increase has been driven by strong growth in fixed annuity sales. Losses on the sale of securities totaled $403,000 in the third quarter of 2024 compared to losses on the sale of securities of $624,000 during the third quarter of 2023. Net gains on the sale of loans increased to $506,000 in the third quarter of 2024 compared to $395,000 in the third quarter of 2023. Greater saleable volume drove this increase. Other mortgage banking fee income was a loss of $168,000 for the third quarter compared to income of $185,000 during the third quarter of 2023. The decline in income was due to an impairment charge on the Company’s higher coupon mortgage servicing right tranches in the third quarter of 2024. Debit card income grew to $2.0 million in the third quarter of 2024 from $1.8 million in the third quarter of 2023 as better volumes were realized in the current period. Other noninterest income increased from $1.1 million in the third quarter of 2023 to $2.6 million in the third quarter of 2024. The Company recorded $854,000 more in SBIC income in the third quarter of 2024 compared to the same period in 2023. In addition, the Company purchased $3.0 million of its subordinated debt during the third quarter of 2024 recording a gain of $444,000. In the third quarter of 2023, the Company had no gains from the purchase of subordinated debt but instead recorded losses of $110,000 on assets held for sale.

Noninterest Expense

Noninterest expense totaled $27.1 million for the quarter ended September 30, 2024 compared to $27.7 million for the quarter ended September 30, 2023. The third quarter of 2023 included $268,000 of merger related charges. There were no merger related expenses during the third quarter of 2024. Salaries and employee benefits were $14.9 million in the third quarter of 2024 compared to $14.2 million in the third quarter of 2023. The increase was primarily driven by higher salaries associated with employee raises along with higher health care expenses. FDIC and state and local taxes decreased by $168,000 to $1.5 million for the third quarter of 2024 compared to $1.6 million for the third quarter of 2023 due to lower FDIC premiums. Intangible amortization declined to $629,000 in the third quarter of 2024 from $725,000 for the third quarter of 2023. This decrease was driven by amortization from a prior acquisition running off. Other noninterest expense decreased $804,000 in the third quarter of 2024 to $3.4 million from $4.2 million in the third quarter of 2023. The primary reason for the decrease was due to a $785,000 charge incurred in 2023 for the settlement of a lawsuit.

Liquidity

At September 30, 2024, the Company had access to an additional $695.8 million of FHLB borrowing capacity, along with $250.0 million in available for sale securities that are available for additional pledging. The Company’s loan to deposit ratio was 75.2% at September 30, 2024 while the Company’s average deposit balance per account (excluding collateralized deposits) was $24,742 for the same period.

About Farmers National Banc Corp.

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $5.2 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 62 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, 2024 are $4.0 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 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; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2023 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

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

 

2024

 

 

2023

 

 

Change

Total interest income

$

57,923

 

$

56,846

 

$

55,054

 

$

55,069

 

$

54,229

 

$

169,823

 

$

158,266

 

 

7.3

%

Total interest expense

 

26,047

 

 

24,780

 

 

23,367

 

 

22,239

 

 

20,461

 

 

74,194

 

 

53,310

 

 

39.2

%

Net interest income

 

31,876

 

 

32,066

 

 

31,687

 

 

32,830

 

 

33,768

 

 

95,629

 

 

104,956

 

 

-8.9

%

Provision (credit) for credit losses

 

7,008

 

 

1,112

 

 

(449

)

 

286

 

 

243

 

 

7,671

 

 

8,867

 

 

-13.5

%

Noninterest income

 

12,340

 

 

9,606

 

 

8,357

 

 

12,156

 

 

9,831

 

 

30,302

 

 

29,705

 

 

2.0

%

Acquisition related costs

 

0

 

 

0

 

 

0

 

 

452

 

 

268

 

 

0

 

 

5,022

 

 

-100.0

%

Other expense

 

27,075

 

 

26,403

 

 

27,039

 

 

26,520

 

 

27,448

 

 

80,517

 

 

79,802

 

 

0.9

%

Income before income taxes

 

10,133

 

 

14,157

 

 

13,454

 

 

17,728

 

 

15,640

 

 

37,743

 

 

40,970

 

 

-7.9

%

Income taxes

 

1,598

 

 

2,374

 

 

2,214

 

 

3,151

 

 

2,326

 

 

6,185

 

 

5,614

 

 

10.2

%

Net income

$

8,535

 

$

11,783

 

$

11,240

 

$

14,577

 

$

13,314

 

$

31,558

 

$

35,356

 

 

-10.7

%

    Average diluted shares outstanding

 

37,567

 

 

37,487

 

 

37,479

 

 

37,426

 

 

37,379

 

 

37,495

 

 

37,533

 

  Basic earnings per share

 

0.23

 

 

0.32

 

 

0.30

 

 

0.39

 

 

0.36

 

 

0.85

 

 

0.94

 

  Diluted earnings per share

 

0.23

 

 

0.31

 

 

0.30

 

 

0.39

 

 

0.36

 

 

0.84

 

 

0.94

 

  Cash dividends per share

 

0.17

 

 

0.17

 

 

0.17

 

 

0.17

 

 

0.17

 

 

0.51

 

 

0.51

 

  Performance Ratios   Net Interest Margin (Annualized)

 

2.66

%

 

2.71

%

 

2.70

%

 

2.78

%

 

2.86

%

 

2.69

%

 

2.95

%

  Efficiency Ratio (Tax equivalent basis)

 

58.47

%

 

60.80

%

 

61.54

%

 

57.84

%

 

60.11

%

 

60.24

%

 

59.70

%

  Return on Average Assets (Annualized)

 

0.66

%

 

0.93

%

 

0.90

%

 

1.17

%

 

1.06

%

 

0.83

%

 

0.93

%

  Return on Average Equity (Annualized)

 

8.18

%

 

12.15

%

 

11.47

%

 

17.98

%

 

14.49

%

 

10.51

%

 

12.79

%

  Other Performance Ratios (Non-GAAP)   Return on Average Tangible Assets

 

0.69

%

 

0.97

%

 

0.93

%

 

1.22

%

 

1.09

%

 

0.86

%

 

0.97

%

  Return on Average Tangible Equity

 

14.94

%

 

23.74

%

 

21.88

%

 

43.77

%

 

30.29

%

 

19.95

%

 

26.80

%

      Consolidated Statements of Financial Condition   Sept. 30, June 30, March 31, Dec. 31, Sept. 30,  

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

 

 

 

 

Assets   Cash and cash equivalents

$

189,136

 

$

180,987

 

$

148,630

 

$

103,658

 

$

93,923

 

  Debt securities available for sale

 

1,293,350

 

 

1,246,730

 

 

1,270,149

 

 

1,299,701

 

 

1,210,736

 

  Other investments

 

33,617

 

 

37,594

 

 

34,619

 

 

35,311

 

 

35,342

 

      Loans held for sale

 

2,852

 

 

2,577

 

 

1,854

 

 

3,711

 

 

1,910

 

  Loans

 

3,280,517

 

 

3,237,369

 

 

3,181,318

 

 

3,198,127

 

 

3,168,554

 

  Less allowance for credit losses

 

36,186

 

 

33,991

 

 

33,159

 

 

34,440

 

 

34,753

 

  Net Loans

 

3,244,331

 

 

3,203,378

 

 

3,148,159

 

 

3,163,687

 

 

3,133,801

 

      Other assets

 

473,217

 

 

485,587

 

 

476,599

 

 

472,282

 

 

495,451

 

  Total Assets

$

5,236,503

 

$

5,156,853

 

$

5,080,010

 

$

5,078,350

 

$

4,971,163

 

      Liabilities and Stockholders' Equity   Deposits   Noninterest-bearing

$

969,682

 

$

968,693

 

$

977,475

 

$

1,026,630

 

$

1,039,524

 

  Interest-bearing

 

3,317,223

 

 

3,237,142

 

 

3,220,650

 

 

3,150,756

 

 

3,217,869

 

  Brokered time deposits

 

74,932

 

 

0

 

 

0

 

 

0

 

 

254,257

 

  Total deposits

 

4,361,837

 

 

4,205,835

 

 

4,198,125

 

 

4,177,386

 

 

4,511,650

 

  Other interest-bearing liabilities

 

371,038

 

 

494,890

 

 

433,777

 

 

443,663

 

 

88,550

 

  Other liabilities

 

63,950

 

 

59,434

 

 

51,082

 

 

52,886

 

 

54,981

 

  Total liabilities

 

4,796,825

 

 

4,760,159

 

 

4,682,984

 

 

4,673,935

 

 

4,655,181

 

  Stockholders' Equity

 

439,678

 

 

396,694

 

 

397,026

 

 

404,415

 

 

315,982

 

  Total Liabilities and Stockholders' Equity

$

5,236,503

 

$

5,156,853

 

$

5,080,010

 

$

5,078,350

 

$

4,971,163

 

      Period-end shares outstanding

 

37,574

 

 

37,575

 

 

37,546

 

 

37,503

 

 

37,489

 

  Book value per share

$

11.70

 

$

10.56

 

$

10.57

 

$

10.78

 

$

8.43

 

  Tangible book value per share (Non-GAAP)*

 

6.69

 

 

5.53

 

 

5.52

 

 

5.71

 

 

3.33

 

      * Tangible book value per share is calculated by dividing tangible common equity by outstanding shares For the Three Months Ended For the Nine MonthsEnded   Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Sept. 30, Sept. 30,   Capital and Liquidity

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

 

2024

 

 

2023

 

 

 

Common Equity Tier 1 Capital Ratio (a)

 

10.96

%

 

10.94

%

 

10.88

%

 

10.61

%

 

10.37

%

  Total Risk Based Capital Ratio (a)

 

14.35

%

 

14.42

%

 

14.38

%

 

14.06

%

 

13.83

%

  Tier 1 Risk Based Capital Ratio (a)

 

11.44

%

 

11.43

%

 

11.37

%

 

11.10

%

 

10.86

%

  Tier 1 Leverage Ratio (a)

 

8.22

%

 

8.26

%

 

8.19

%

 

8.02

%

 

7.84

%

  Equity to Asset Ratio

 

8.40

%

 

7.69

%

 

7.82

%

 

7.96

%

 

6.36

%

  Tangible Common Equity Ratio (b)

 

4.98

%

 

4.18

%

 

4.24

%

 

4.38

%

 

2.61

%

  Net Loans to Assets

 

61.96

%

 

62.12

%

 

61.97

%

 

62.30

%

 

63.04

%

  Loans to Deposits

 

75.21

%

 

76.97

%

 

75.78

%

 

76.56

%

 

70.23

%

  Asset Quality   Non-performing loans

$

19,076

 

$

12,870

 

$

11,951

 

$

15,063

 

$

18,368

 

  Non-performing assets

 

19,137

 

 

12,975

 

 

12,215

 

 

15,321

 

 

18,522

 

  Loans 30 - 89 days delinquent

 

15,562

 

 

18,546

 

 

14,069

 

 

16,705

 

 

13,314

 

  Charged-off loans

 

5,116

 

 

661

 

 

1,282

 

 

972

 

 

525

 

 

7,059

 

 

1,965

 

  Recoveries

 

504

 

 

98

 

 

271

 

 

172

 

 

139

 

 

873

 

 

509

 

  Net Charge-offs

 

4,612

 

 

563

 

 

1,011

 

 

800

 

 

386

 

 

6,186

 

 

1,456

 

  Annualized Net Charge-offs to Average Net Loans

 

0.58

%

 

0.07

%

 

0.13

%

 

0.10

%

 

0.05

%

 

0.26

%

 

0.06

%

  Allowance for Credit Losses to Total Loans

 

1.10

%

 

1.05

%

 

1.04

%

 

1.08

%

 

1.10

%

  Non-performing Loans to Total Loans

 

0.58

%

 

0.40

%

 

0.38

%

 

0.47

%

 

0.58

%

  Loans 30 - 89 Days Delinquent to Total Loans

 

0.47

%

 

0.57

%

 

0.44

%

 

0.52

%

 

0.42

%

  Allowance to Non-performing Loans

 

189.69

%

 

264.11

%

 

277.46

%

 

228.64

%

 

189.20

%

  Non-performing Assets to Total Assets

 

0.37

%

 

0.25

%

 

0.24

%

 

0.30

%

 

0.37

%

      (a) September 30, 2024 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

 

2024

 

 

2024

 

 

2024

 

 

2023

 

2023

 

Commercial real estate

$

1,372,374

 

$

1,348,675

 

$

1,339,372

 

$

1,335,806

$

1,295,847

 

Commercial

 

358,247

 

 

343,694

 

 

335,747

 

 

346,354

 

357,691

 

Residential real estate

 

852,444

 

 

849,561

 

 

836,252

 

 

843,697

 

842,729

 

HELOC

 

155,967

 

 

151,511

 

 

143,696

 

 

142,441

 

140,772

 

Consumer

 

269,231

 

 

268,606

 

 

256,846

 

 

259,784

 

261,136

 

Agricultural loans

 

261,773

 

 

265,035

 

 

260,425

 

 

261,288

 

261,738

 

Total, excluding net deferred loan costs

$

3,270,036

 

$

3,227,082

 

$

3,172,338

 

$

3,189,370

$

3,159,913

 

    For the Three Months Ended Sept. 30, June 30, March 31, Dec. 31, Sept. 30, End of Period Customer Deposit Balances

 

2024

 

 

2024

 

 

2024

 

 

2023

 

2023

 

Noninterest-bearing demand

$

969,682

 

$

968,693

 

$

977,474

 

$

1,026,630

$

1,039,524

 

Interest-bearing demand

 

1,453,288

 

 

1,380,266

 

 

1,381,383

 

 

1,362,609

 

1,426,349

 

Money market

 

676,664

 

 

677,058

 

 

646,308

 

 

593,975

 

588,043

 

Savings

 

418,771

 

 

433,166

 

 

452,949

 

 

468,890

 

488,991

 

Certificate of deposit

 

768,500

 

 

746,652

 

 

740,011

 

 

725,282

 

714,486

 

Total customer deposits

$

4,286,905

 

$

4,205,835

 

$

4,198,125

 

$

4,177,386

$

4,257,393

 

   

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

 

2024

 

 

2024

 

 

2024

 

 

2023

 

2023

 

 

2024

 

 

2023

 

Service charges on deposit accounts

$

1,992

 

$

1,846

 

$

1,583

 

$

1,677

$

1,712

 

$

5,421

 

$

4,646

 

Bank owned life insurance income, including death benefits

 

688

 

 

652

 

 

707

 

 

617

 

694

 

 

2,046

 

 

1,825

 

Trust fees

 

2,544

 

 

2,345

 

 

2,510

 

 

2,382

 

2,327

 

 

7,398

 

 

6,665

 

Insurance agency commissions

 

1,416

 

 

1,255

 

 

1,528

 

 

1,540

 

1,116

 

 

4,199

 

 

3,904

 

Security gains (losses), including fair value changes for equity securities

 

(403

)

 

(124

)

 

(2,120

)

 

19

 

(624

)

 

(2,647

)

 

(490

)

Retirement plan consulting fees

 

677

 

 

623

 

 

617

 

 

631

 

650

 

 

1,918

 

 

1,837

 

Investment commissions

 

476

 

 

478

 

 

432

 

 

589

 

520

 

 

1,386

 

 

1,389

 

Net gains on sale of loans

 

506

 

 

417

 

 

297

 

 

1,280

 

395

 

 

1,219

 

 

1,111

 

Other mortgage banking fee income (loss), net

 

(168

)

 

192

 

 

125

 

 

139

 

185

 

 

150

 

 

571

 

Debit card and EFT fees

 

1,993

 

 

1,760

 

 

1,567

 

 

1,697

 

1,763

 

 

5,320

 

 

5,362

 

Other noninterest income

 

2,619

 

 

162

 

 

1,111

 

 

1,585

 

1,093

 

 

3,892

 

 

2,885

 

Total Noninterest Income

$

12,340

 

$

9,606

 

$

8,357

 

$

12,156

$

9,831

 

$

30,302

 

$

29,705

 

   

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

 

2024

 

 

2024

 

 

2024

 

 

2023

 

2023

 

 

2024

 

 

2023

 

Salaries and employee benefits

$

14,874

 

$

14,558

 

$

15,069

 

$

14,871

$

14,233

 

$

44,501

 

$

42,503

 

Occupancy and equipment

 

3,968

 

 

3,815

 

 

3,730

 

 

3,896

 

3,810

 

 

11,512

 

 

11,538

 

FDIC insurance and state and local taxes

 

1,480

 

 

1,185

 

 

1,345

 

 

1,484

 

1,648

 

 

4,010

 

 

4,365

 

Professional fees

 

1,084

 

 

1,194

 

 

1,254

 

 

1,004

 

1,043

 

 

3,532

 

 

3,347

 

Merger related costs

 

0

 

 

0

 

 

0

 

 

452

 

268

 

 

0

 

 

5,022

 

Advertising

 

435

 

 

445

 

 

431

 

 

414

 

492

 

 

1,312

 

 

1,379

 

Intangible amortization

 

629

 

 

630

 

 

688

 

 

578

 

725

 

 

1,947

 

 

2,856

 

Core processing charges

 

1,186

 

 

1,099

 

 

1,135

 

 

1,057

 

1,274

 

 

3,420

 

 

3,582

 

Other noninterest expenses

 

3,419

 

 

3,477

 

 

3,387

 

 

3,216

 

4,223

 

 

10,283

 

 

10,232

 

Total Noninterest Expense

$

27,075

 

$

26,403

 

$

27,039

 

$

26,972

$

27,716

 

$

80,517

 

$

84,824

 

Average Balance Sheets and Related Yields and Rates (Dollar Amounts in Thousands)   Three Months Ended Three Months Ended September 30, 2024 September 30, 2023 AVERAGE YIELD/ AVERAGE YIELD/ BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1) EARNING ASSETS Loans (2)

$

3,241,603

$

47,060

5.81

%

$

3,153,309

$

43,928

5.57

%

Taxable securities

 

1,104,264

 

6,761

2.45

 

 

1,132,959

 

6,492

2.29

 

Tax-exempt securities (2)

 

379,551

 

2,992

3.15

 

 

413,117

 

3,251

3.15

 

Other investments

 

34,873

 

346

3.97

 

 

42,581

 

487

4.57

 

Federal funds sold and other

 

130,053

 

1,371

4.22

 

 

78,922

 

751

3.81

 

Total earning assets

 

4,890,344

 

58,530

4.79

 

 

4,820,888

 

54,909

4.56

 

Nonearning assets

 

243,718

 

215,445

Total assets

$

5,134,062

$

5,036,333

INTEREST-BEARING LIABILITIES Time deposits

$

753,163

$

7,584

4.03

%

$

677,291

$

5,308

3.13

%

Brokered time deposits

 

26,062

 

286

4.39

 

 

145,839

 

1,882

5.16

 

Savings deposits

 

1,103,269

 

4,372

1.59

 

 

1,099,682

 

2,625

0.95

 

Demand deposits - interest bearing

 

1,411,520

 

9,305

2.64

 

 

1,412,922

 

7,647

2.16

 

Total interest-bearing deposits

 

3,294,014

 

21,547

2.62

 

 

3,335,734

 

17,462

2.09

 

  Short term borrowings

 

289,652

 

3,477

4.80

 

 

141,717

 

1,961

5.53

 

Long term borrowings

 

87,368

 

1,023

4.68

 

 

88,494

 

1,038

4.69

 

Total borrowed funds

 

377,020

 

4,500

4.77

 

 

230,211

 

2,999

5.21

 

  Total interest-bearing liabilities

 

3,671,034

 

26,047

2.84

 

 

3,565,945

 

20,461

2.30

 

  NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits - noninterest bearing

 

983,274

 

1,052,062

Other liabilities

 

62,427

 

50,726

Stockholders' equity

 

417,327

 

367,600

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

5,134,062

$

5,036,333

Net interest income and interest rate spread

$

32,483

1.95

%

$

34,448

2.26

%

Net interest margin

2.66

%

2.86

%

  (1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2024, adjustments of $71 thousand and $536 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2023, adjustments of $90 thousand and $590 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, 2024 September 30, 2023 AVERAGE YIELD/ AVERAGE YIELD/ BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1) EARNING ASSETS Loans (2)

$

3,212,799

$

138,746

5.76

%

$

3,144,817

$

127,293

5.40

%

Taxable securities

 

1,108,055

 

19,988

2.41

 

 

1,153,804

 

19,697

2.28

 

Tax-exempt securities (2)

 

389,094

 

9,174

3.14

 

 

422,151

 

10,048

3.17

 

Other investments

 

34,243

 

1,030

4.01

 

 

40,211

 

1,457

4.83

 

Federal funds sold and other

 

93,601

 

2,740

3.90

 

 

78,224

 

1,911

3.26

 

Total earning assets

 

4,837,792

 

171,678

4.73

 

 

4,839,207

 

160,406

4.42

 

Nonearning assets

 

229,966

 

219,762

Total assets

$

5,067,758

$

5,058,969

INTEREST-BEARING LIABILITIES Time deposits

$

741,450

$

21,865

3.93

%

$

636,939

$

13,171

2.76

%

Brokered time deposits

 

8,751

 

286

4.36

 

 

145,115

 

4,889

4.49

 

Savings deposits

 

1,096,788

 

12,087

1.47

 

 

1,128,760

 

6,981

0.82

 

Demand deposits - interest bearing

 

1,386,390

 

25,857

2.49

 

 

1,421,208

 

19,619

1.84

 

Total interest-bearing deposits

 

3,233,379

 

60,095

2.48

 

 

3,332,022

 

44,660

1.79

 

  Short term borrowings

 

304,607

 

11,000

4.81

 

 

145,509

 

5,608

5.14

 

Long term borrowings

 

88,304

 

3,098

4.68

 

 

88,382

 

3,043

4.59

 

Total borrowed funds

 

392,911

 

14,098

4.78

 

 

233,891

 

8,651

4.93

 

  Total interest-bearing liabilities

 

3,626,290

 

74,193

2.73

 

 

3,565,913

 

53,311

1.99

 

  NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits - noninterest bearing

$

983,576

$

1,075,493

Other liabilities

 

57,577

 

48,936

Stockholders' equity

 

400,315

 

368,627

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

5,067,758

$

5,058,969

Net interest income and interest rate spread

$

97,485

2.00

%

$

107,095

2.43

%

Net interest margin

2.69

%

2.95

%

  (1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2024, adjustments of $227 thousand and $1.6 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. 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. 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 MonthsEnded

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

Sept. 30,

Sept. 30,

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

 

2024

 

 

2023

 

Total Assets

$

5,236,503

 

$

5,156,853

 

$

5,080,010

 

$

5,078,350

 

$

4,971,163

 

$

5,236,503

 

$

4,971,163

 

Less Goodwill and other intangibles

 

188,340

 

 

188,970

 

 

189,599

 

 

190,288

 

 

191,326

 

 

188,340

 

 

191,326

 

Tangible Assets

$

5,048,163

 

$

4,967,883

 

$

4,890,411

 

$

4,888,062

 

$

4,779,837

 

$

5,048,163

 

$

4,779,837

 

Average Assets

 

5,134,062

 

 

5,044,516

 

 

5,023,966

 

 

4,980,314

 

 

5,058,969

 

 

5,067,758

 

 

5,058,969

 

Less average Goodwill and other intangibles

 

188,755

 

 

189,382

 

 

190,040

 

 

191,108

 

 

191,804

 

 

189,391

 

 

192,709

 

Average Tangible Assets

$

4,945,307

 

$

4,855,134

 

$

4,833,926

 

$

4,789,206

 

$

4,867,165

 

$

4,878,367

 

$

4,866,260

 

    Reconciliation of Common Stockholders' Equity to Tangible Common Equity For the Three Months Ended For the Nine MonthsEnded

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

Sept. 30,

Sept. 30,

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

 

2024

 

 

2023

 

Stockholders' Equity

$

439,678

 

$

396,694

 

$

397,026

 

$

404,415

 

$

315,982

 

$

439,678

 

$

315,982

 

Less Goodwill and other intangibles

 

188,340

 

 

188,970

 

 

189,599

 

 

190,288

 

 

191,326

 

 

188,340

 

 

191,326

 

Tangible Common Equity

$

251,338

 

$

207,724

 

$

207,427

 

$

214,127

 

$

124,656

 

$

251,338

 

$

124,656

 

Average Stockholders' Equity

 

417,327

 

 

387,881

 

 

395,549

 

 

324,332

 

 

367,600

 

 

400,315

 

 

368,627

 

Less average Goodwill and other intangibles

 

188,755

 

 

189,382

 

 

190,040

 

 

191,108

 

 

191,804

 

 

189,391

 

 

192,709

 

Average Tangible Common Equity

$

228,572

 

$

198,499

 

$

205,509

 

$

133,224

 

$

175,796

 

$

210,924

 

$

175,918

 

    Reconciliation of Net Income, Less Merger and Certain Items For the Three Months Ended For the Nine MonthsEnded

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

Sept. 30,

Sept. 30,

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

 

2024

 

 

2023

 

Net income

$

8,535

 

$

11,783

 

$

11,240

 

$

14,577

 

$

13,314

 

$

31,558

 

$

35,356

 

Acquisition related costs - after tax

 

0

 

 

0

 

 

0

 

 

358

 

 

234

 

 

0

 

 

4,037

 

Acquisition related provision - after tax

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

6,077

 

Employee severence - after tax

 

0

 

 

0

 

 

0

 

 

798

 

 

0

 

 

0

 

 

0

 

Lawsuit settlement expense - after tax

 

0

 

 

0

 

 

0

 

 

0

 

 

620

 

 

0

 

 

620

 

Net (gain) on loan sale - after tax

 

0

 

 

0

 

 

0

 

 

(723

)

 

0

 

 

0

 

 

0

 

Net loss (gain) on asset/security sales - after tax

 

(32

)

 

407

 

 

1,675

 

 

171

 

 

604

 

 

2,050

 

 

527

 

Net income - Adjusted

$

8,503

 

$

12,190

 

$

12,915

 

$

15,181

 

$

14,772

 

$

33,608

 

$

46,617

 

Diluted EPS excluding merger and certain items

$

0.23

 

$

0.33

 

$

0.34

 

$

0.41

 

$

0.40

 

$

0.90

 

$

1.24

 

Return on Average Assets excluding merger and certain items (Annualized)

 

0.66

%

 

0.97

%

 

1.03

%

 

1.22

%

 

1.17

%

 

0.88

%

 

1.23

%

Return on Average Equity excluding merger and certain items (Annualized)

 

8.15

%

 

12.57

%

 

13.06

%

 

18.72

%

 

16.07

%

 

11.19

%

 

16.86

%

Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized)

 

14.88

%

 

24.56

%

 

25.14

%

 

45.58

%

 

33.61

%

 

21.24

%

 

35.33

%

    Efficiency ratio excluding certain items For the Three Months Ended For the Nine MonthsEnded

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

Sept. 30,

Sept. 30,

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

 

2024

 

 

2023

 

Net interest income, tax equated

$

32,483

 

$

32,661

 

$

32,341

 

$

33,494

 

$

34,448

 

$

97,485

 

$

107,095

 

Noninterest income

 

12,340

 

 

9,606

 

 

8,357

 

 

12,156

 

 

9,831

 

 

30,302

 

 

29,705

 

Net (gain) on loan sale

 

0

 

 

0

 

 

0

 

 

(915

)

 

0

 

 

0

 

 

0

 

Net loss (gain) on asset/security sales

 

(41

)

 

515

 

 

2,120

 

 

217

 

 

764

 

 

2,594

 

 

667

 

Net interest income and noninterest income adjusted

 

44,782

 

 

42,782

 

 

42,818

 

 

44,952

 

 

45,043

 

 

130,381

 

 

137,467

 

Noninterest expense less intangible amortization

 

26,446

 

 

25,773

 

 

26,351

 

 

26,394

 

 

26,991

 

 

78,570

 

 

81,968

 

Legal settlement expense

 

0

 

 

0

 

 

0

 

 

0

 

 

785

 

 

0

 

 

785

 

Employee severence

 

0

 

 

0

 

 

0

 

 

1,010

 

 

0

 

 

0

 

 

0

 

Acquisition related costs

 

0

 

 

0

 

 

0

 

 

452

 

 

268

 

 

0

 

 

5,022

 

Noninterest expense adjusted

 

26,446

 

 

25,773

 

 

26,351

 

 

24,932

 

 

25,938

 

 

78,570

 

 

76,161

 

Efficiency ratio excluding certain items

 

59.05

%

 

60.24

%

 

61.54

%

 

55.46

%

 

57.58

%

 

60.26

%

 

55.40

%

    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,

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

 

2024

 

 

2023

 

Net interest income, tax equated

$

32,483

 

$

32,661

 

$

32,341

 

$

33,494

 

$

34,448

 

$

97,485

 

$

107,095

 

Acquisition marks

 

2,123

 

 

2,391

 

 

2,370

 

 

2,475

 

 

2,959

 

 

6,884

 

 

8,471

 

PPP interest and fees

 

0

 

 

1

 

 

1

 

 

1

 

 

1

 

 

2

 

 

4

 

Adjusted and annualized net interest income

 

121,440

 

 

121,076

 

 

119,880

 

 

124,072

 

 

125,952

 

 

120,799

 

 

131,493

 

Average earning assets

 

4,890,344

 

 

4,825,532

 

 

4,796,922

 

 

4,816,409

 

 

4,820,888

 

 

4,837,792

 

 

4,839,207

 

Less PPP average balances

 

118

 

 

171

 

 

213

 

 

229

 

 

247

 

 

167

 

 

262

 

Adjusted average earning assets

 

4,890,226

 

 

4,825,361

 

 

4,796,709

 

 

4,816,180

 

 

4,820,641

 

 

4,837,625

 

 

4,838,945

 

Net interest margin excluding marks and PPP interest and fees

 

2.48

%

 

2.51

%

 

2.50

%

 

2.58

%

 

2.61

%

 

2.50

%

 

2.72

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241022061160/en/

Kevin J. Helmick, President and CEO 20 South Broad Street, P.O. Box 555 Canfield, OH 44406 330.533.3341 Email: exec@farmersbankgroup.com