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Press release content from Business Wire. The AP news staff was not involved in its creation.

Farmers National Banc Corp. Announces 2019 Fourth Quarter Financial Results

January 29, 2020 GMT

CANFIELD, Ohio--(BUSINESS WIRE)--Jan 29, 2020--

Farmers National Banc Corp. (Farmers) (NASDAQ: FMNB) today reported financial results for the three months and year ended December 31, 2019.

Net income for the three months ended December 31, 2019 was $9.7 million, or $0.35 per diluted share, which compares to $8.7 million, or $0.31 per diluted share, for the three months ended December 31, 2018 and $9.2 million or $0.33 per diluted share for the linked quarter. Annualized return on average assets and annualized return on average equity were 1.58% and 12.78%, respectively, for the three month period ending December 31, 2019, compared to 1.50% and 13.65% for the same three month period in 2018, and 1.51% and 12.49% for the linked quarter. Farmers’ return on average tangible equity (non-GAAP) was 15.03% for the quarter ended December 31, 2019 compared to 16.68% for the same quarter in 2018 and 14.80% for the linked quarter.

Net income for the twelve months ended December 31, 2019 was $35.8 million, or $1.28 per diluted share, compared to $32.6 million or $1.16 per diluted share for the same twelve month period in 2018. Return on average assets and return on average equity were 1.50% and 12.56%, respectively, for the twelve months ended December 31, 2019, compared to 1.46% and 13.13% for the same period in 2018.

On January 7, 2020, Farmers announced it completed the merger of Maple Leaf Financial (“Maple Leaf”), the holding company for Geauga Savings Bank, with branches located in Cuyahoga and Geauga Counties in Ohio. The transaction increases Farmers’ market share in Cuyahoga and Geauga Counties and enables Farmers to continue building local scale throughout Northeast Ohio. As of September 30, 2019, Maple Leaf had total assets of $275.6 million, which included gross loans of $183.5 million, deposits of $183.4 million and equity of $33.4 million.

Kevin J. Helmick, President and CEO, stated, “As a result of solid loan and deposit growth over the past twelve months, 14% increase in noninterest income, careful management of our noninterest expenses and continued strong asset quality, we are pleased to report an 11% increase in net income compared to the same quarter one year ago. We are also pleased to report a 25% increase in cash dividends paid to our shareholders, from $0.08 per share paid in the fourth quarter of 2018 to $0.10 paid for the same quarter in 2019.”

2019 Fourth Quarter Financial Highlights

2020 Outlook

Mr. Helmick added, “With the announcement of the completion of our acquisition of Geauga Savings Bank and our continued strong financial performance during this year, we look forward in 2020 to realize the benefits of the full integration of our new banking locations and to build on our momentum of having achieved another successful year. We remain extremely proud of our committed employees that continue to deliver strong results for our stakeholders and remain committed to our community banking approach and culture.”

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $2.4 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 41 banking locations in Mahoning, Trumbull, Columbiana, Stark, Wayne, Medina and Cuyahoga Counties in Ohio and Beaver County 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, 2019 are $2.5 billion. Farmers National Insurance, LLC and Bowers Insurance Agency, Inc., wholly-owned subsidiaries of The Farmers National Bank of Canfield, offer 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 and net income excluding costs related to acquisition activities, 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 are included in the tables following Consolidated Financial Highlights below.

Forward-Looking Statements

This earnings release contains 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 the forward-looking statements can be found in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2018, which has been filed with the Securities and Exchange Commission (SEC) and is 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

2019

 

2019

 

2019

 

2019

 

2018

 

2019

 

2018

 

Change

Total interest income

$25,847

$25,931

$25,529

$24,679

$24,447

$101,986

$91,766

11.1%

Total interest expense

4,682

5,174

5,038

4,714

4,373

19,608

13,265

47.8%

Net interest income

21,165

20,757

20,491

19,965

20,074

82,378

78,501

4.9%

Provision for loan losses

600

550

750

550

525

2,450

3,000

-18.3%

Noninterest income

7,647

7,441

6,994

6,520

6,705

28,602

25,499

12.2%

Acquisition related costs (income)

104

112

(19)

0

(180)

197

(155)

-227.1%

Other expense

16,247

16,311

16,723

15,977

16,163

65,258

62,872

3.8%

Income before income taxes

11,861

11,225

10,031

9,958

10,271

43,075

38,283

12.5%

Income taxes

2,186

2,071

1,488

1,570

1,585

7,315

5,714

28.0%

Net income

$9,675

$9,154

$8,543

$8,388

$8,686

$35,760

$32,569

9.8%

 

 

 

 

 

 

 

 

Average diluted shares outstanding

27,829

27,819

27,931

27,983

27,962

27,876

27,974

Basic earnings per share

0.35

0.33

0.31

0.30

0.31

1.29

1.18

Diluted earnings per share

0.35

0.33

0.31

0.30

0.31

1.28

1.16

Cash dividends

2,767

2,767

2,504

2,500

2,223

10,538

8,315

Cash dividends per share

0.10

0.10

0.09

0.09

0.08

0.38

0.30

Performance Ratios

Net Interest Margin (Annualized)

3.84%

3.79%

3.84%

3.81%

3.80%

3.82%

3.87%

Efficiency Ratio (Tax equivalent basis)

54.51%

55.90%

58.28%

57.83%

57.73%

56.59%

57.93%

Return on Average Assets (Annualized)

1.58%

1.51%

1.45%

1.45%

1.50%

1.50%

1.46%

Return on Average Equity (Annualized)

12.78%

12.49%

12.34%

12.71%

13.65%

12.56%

13.13%

Dividends to Net Income

28.60%

30.23%

29.31%

29.80%

25.59%

29.47%

25.53%

Other Performance Ratios (Non-GAAP)

Return on Average Tangible Assets

1.62%

1.55%

1.47%

1.46%

1.54%

1.53%

1.49%

Return on Average Tangible Equity

15.03%

14.80%

14.59%

14.99%

16.68%

14.81%

16.02%

Return on Average Tangible Equity excluding acquisition costs

15.17%

14.95%

14.55%

14.99%

16.34%

14.88%

15.95%

Consolidated Statements of Financial Condition

Dec. 31,

 

Sept. 30,

 

June 30,

 

March 31,

 

Dec. 31,

2019

 

2019

 

2019

 

2019

 

2018

Assets

Cash and cash equivalents

$70,760

$85,675

$64,007

$69,672

$57,926

Securities available for sale

432,233

423,193

424,252

403,770

402,190

Equity securities

7,909

7,856

7,222

7,460

7,130

 

Loans held for sale

2,600

2,079

1,093

2,360

1,237

Loans

1,811,539

1,784,125

1,780,504

1,743,651

1,735,840

Less allowance for loan losses

14,487

14,261

14,222

13,777

13,592

Net Loans

1,797,052

1,769,864

1,766,282

1,729,874

1,722,248

 

Other assets

138,604

144,543

143,093

142,938

138,133

Total Assets

$2,449,158

$2,433,210

$2,405,949

$2,356,074

$2,328,864

 

Liabilities and Stockholders' Equity

Deposits

Noninterest-bearing

$434,126

$432,609

$415,935

$415,131

$421,950

Interest-bearing

1,574,838

1,608,043

1,584,700

1,539,202

1,377,770

Total deposits

2,008,964

2,040,652

2,000,635

1,954,333

1,799,720

Other interest-bearing liabilities

122,197

76,324

96,978

109,348

250,792

Other liabilities

18,688

23,011

23,511

19,442

16,032

Total liabilities

2,149,849

2,139,987

2,121,124

2,083,123

2,066,544

Stockholders' Equity

299,309

293,223

284,825

272,951

262,320

Total Liabilities and Stockholders' Equity

$2,449,158

$2,433,210

$2,405,949

$2,356,074

$2,328,864

 

Period-end shares outstanding

27,671

27,669

27,768

27,777

27,792

Book value per share

$10.82

$10.60

$10.26

$9.83

$9.44

Tangible book value per share (Non-GAAP)*

9.28

9.04

8.70

8.26

7.86

 

* Tangible book value per share is calculated by dividing tangible common equity by average outstanding shares

Capital and Liquidity

Common Equity Tier 1 Capital Ratio (a)

12.94%

12.70%

12.47%

12.37%

12.16%

Total Risk Based Capital Ratio (a)

13.82%

13.58%

13.34%

13.24%

13.03%

Tier 1 Risk Based Capital Ratio (a)

13.06%

12.83%

12.59%

12.50%

12.28%

Tier 1 Leverage Ratio (a)

10.69%

10.42%

10.27%

10.07%

9.91%

Equity to Asset Ratio

12.22%

12.05%

11.84%

11.58%

11.26%

Tangible Common Equity Ratio (b)

10.67%

10.47%

10.22%

9.92%

9.56%

Net Loans to Assets

73.37%

72.74%

73.41%

73.42%

73.95%

Loans to Deposits

90.17%

87.43%

89.00%

89.22%

96.45%

Asset Quality

Non-performing loans

$6,345

$6,749

$7,252

$7,578

$7,731

Other Real Estate Owned

19

74

74

208

0

Non-performing assets

6,364

6,823

7,326

7,786

7,731

Loans 30 - 89 days delinquent

11,893

9,076

10,203

9,082

8,877

Charged-off loans

519

674

588

566

753

Recoveries

145

163

283

201

443

Net Charge-offs

374

511

305

365

310

Annualized Net Charge-offs to

Average Net Loans Outstanding

0.09%

0.12%

0.07%

0.08%

0.07%

Allowance for Loan Losses to Total Loans

0.80%

0.80%

0.80%

0.79%

0.78%

Non-performing Loans to Total Loans

0.35%

0.38%

0.41%

0.43%

0.45%

Allowance to Non-performing Loans

228.32%

211.31%

196.11%

181.80%

175.81%

Non-performing Assets to Total Assets

0.26%

0.28%

0.30%

0.33%

0.33%

 

 

 

 

 

 

(a) December 31, 2019 ratio is estimated

 

(b) This is a non-GAAP financial measure. A reconciliation to GAAP is shown below

 

Reconciliation of Total Assets to Tangible Assets

For the Twelve Months
Ended

Dec. 31,

 

Sept. 30,

 

June 30,

 

March 31,

 

Dec. 31,

 

Dec. 31,

 

Dec. 31,

2019

 

2019

 

2019

 

2019

 

2018

 

2019

 

2018

Total Assets

$2,449,158

$2,433,210

$2,405,949

$2,356,074

$2,328,864

$2,449,158

$2,328,864

Less Goodwill and other intangibles

42,645

42,973

43,298

43,625

43,952

42,645

43,952

Tangible Assets

$2,406,513

$2,390,237

$2,362,651

$2,312,449

$2,284,912

$2,406,513

$2,284,912

Average Assets

2,424,574

2,409,010

2,369,388

2,338,792

2,301,847

2,383,236

2,230,380

Less average Goodwill and other intangibles

42,859

43,187

43,508

43,840

44,185

43,345

44,712

Average Tangible Assets

$2,381,715

$2,365,823

$2,325,880

$2,294,952

$2,257,662

$2,339,891

$2,185,668

 

 

For the Twelve Months
Ended

Reconciliation of Common Stockholders' Equity to Tangible Common Equity

Dec. 31,

 

Sept. 30,

 

June 30,

 

March 31,

 

Dec. 31,

 

Dec. 31,

 

Dec. 31,

2019

 

2019

 

2019

 

2019

 

2018

 

2019

 

2018

Stockholders' Equity

$299,309

$293,223

$284,825

$272,951

$262,320

$299,309

$262,320

Less Goodwill and other intangibles

42,645

42,973

43,298

43,625

43,952

42,645

43,952

Tangible Common Equity

$256,664

$250,250

$241,527

$229,326

$218,368

$256,664

$218,368

Average Stockholders' Equity

300,355

290,673

277,746

267,736

252,449

284,759

247,965

Less average Goodwill and other intangibles

42,859

43,187

43,508

43,840

44,185

43,345

44,712

Average Tangible Common Equity

$257,496

$247,486

$234,238

$223,896

$208,264

$241,414

$203,253

 

Reconciliation of Net Income, Excluding Acquisition Related Costs

For the Twelve Months
Ended

For the Three Months Ended

 

Dec. 31,

 

Sept. 30,

 

June 30,

 

March 31,

 

Dec. 31,

 

Dec. 31,

 

Dec. 31,

2019

 

2019

 

2019

 

2019

 

2018

 

2019

 

2018

Net income

$9,675

$9,154

$8,543

$8,388

$8,686

$35,760

$32,569

Acquisition related costs (income) - tax equated

90

97

(20)

0

(180)

167

(158)

Net income - Adjusted

$9,765

$9,251

$8,523

$8,388

$8,506

$35,927

$32,411

Diluted EPS excluding acquisition costs

$0.35

$0.33

$0.31

$0.30

$0.30

$1.29

$1.16

 
 

Dec. 31,

 

Sept. 30,

 

June 30,

 

March 31,

 

Dec. 31,

End of Period Loan Balances

2019

 

2019

 

2019

 

2019

 

2018

Commercial real estate

$616,778

$602,580

$614,452

$589,219

$579,481

Commercial

255,823

251,613

256,657

254,957

245,172

Residential real estate

500,024

499,996

493,529

488,854

492,887

Consumer

209,271

207,319

207,417

209,541

216,284

Agricultural loans

226,333

219,487

205,544

198,210

199,013

Total, excluding net deferred loan costs

$1,808,229

$1,780,995

$1,777,599

$1,740,781

$1,732,837

 

For the Three Months Ended

Dec. 31,

 

Sept. 30,

 

June 30,

 

March 31,

 

Dec. 31,

Noninterest Income

2019

 

2019

 

2019

 

2019

 

2018

Service charges on deposit accounts

$1,139

$1,208

$1,093

$1,074

$1,115

Bank owned life insurance income

192

204

208

214

221

Trust fees

1,891

1,905

1,821

1,858

1,752

Insurance agency commissions

696

681

739

803

642

Security gains (losses)

28

22

(18)

10

260

Retirement plan consulting fees

343

338

450

358

370

Investment commissions

435

384

327

260

259

Net gains on sale of loans

1,517

1,143

1,055

671

832

Debit card and EFT fees

922

935

887

778

861

Other operating income

484

621

432

494

393

Total Noninterest Income

$7,647

$7,441

$6,994

$6,520

$6,705

 

For the Three Months Ended

Dec. 31,

 

Sept. 30,

 

June 30,

 

March 31,

 

Dec. 31,

Noninterest Expense

2019

 

2019

 

2019

 

2019

 

2018

Salaries and employee benefits

$9,128

$9,422

$9,266

$9,356

$9,444

Occupancy and equipment

1,667

1,615

1,650

1,717

1,566

State and local taxes

416

468

472

470

474

Professional fees

787

654

887

794

734

Merger related costs (income)

104

112

(19)

0

(180)

Advertising

607

437

442

250

416

FDIC insurance

79

80

85

87

234

Intangible amortization

326

326

327

327

355

Core processing charges

876

900

803

791

762

Telephone and data

235

236

217

260

288

Other operating expenses

2,126

2,173

2,574

1,925

1,890

Total Noninterest Expense

$16,351

$16,423

$16,704

$15,977

$15,983

Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)

 

Three Months Ended

 

Three Months Ended

December 31, 2019

 

December 31, 2018

AVERAGE

 

 

 

 

 

AVERAGE

 

 

 

 

BALANCE

 

INTEREST
(1)

 

RATE (1)

 

BALANCE

 

INTEREST
(1)

 

RATE (1)

EARNING ASSETS

Loans (2)

$1,784,421

$22,725

5.05%

$1,706,008

$21,424

4.98%

Taxable securities

181,894

1,162

2.53

199,472

1,241

2.47

Tax-exempt securities (2)

227,259

2,205

3.85

202,241

1,936

3.80

Equity securities

12,059

130

4.28

11,822

185

6.21

Federal funds sold and other

37,914

170

1.78

29,663

154

2.06

Total earning assets

2,243,547

26,392

4.67

2,149,206

24,940

4.60

Nonearning assets

181,027

152,641

Total assets

$2,424,574

$2,301,847

INTEREST-BEARING LIABILITIES

Time deposits

$418,722

$2,089

1.98%

$324,696

$1,349

1.65%

Brokered time deposits

85,973

446

2.06

272

2

2.35

Savings deposits

402,464

320

0.32

438,008

284

0.26

Demand deposits

683,143

1,506

0.87

578,470

1,128

0.77

Short term borrowings

35,838

99

1.10

264,371

1,562

2.34

Long term borrowings

45,203

222

1.95

6,089

48

3.13

Total interest-bearing liabilities

$1,671,343

4,682

1.11

$1,611,906

4,373

1.08

NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY

Demand deposits

434,778

423,576

Other liabilities

18,098

13,916

Stockholders' equity

300,355

252,449

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$2,424,574

 

$2,301,847

 

Net interest income and interest rate spread

$21,710

3.56%

$20,567

3.52%

Net interest margin

3.84%

3.80%

 

(1) Interest and yields are calculated on a tax-equivalent basis where applicable.

(2) For 2019, adjustments of $99 thousand and $446 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2018, adjustments of $92 thousand and $401 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, 2019

 

December 31, 2018

AVERAGE

 

 

 

 

 

AVERAGE

 

 

 

 

BALANCE

 

INTEREST
(1)

 

RATE (1)

 

BALANCE

 

INTEREST
(1)

 

RATE (1)

EARNING ASSETS

Loans (2)

$1,757,799

$89,517

5.09%

$1,632,541

$80,192

4.91%

Taxable securities

190,944

4,840

2.53

202,270

4,928

2.44

Tax-exempt securities

216,586

8,418

3.89

194,302

7,195

3.70

Equity securities (2)

12,057

627

5.20

11,382

652

5.73

Federal funds sold and other

34,948

729

2.09

34,006

644

1.89

Total earning assets

2,212,334

104,131

4.71

2,074,501

93,611

4.51

Nonearning assets

170,902

155,879

Total assets

$2,383,236

$2,230,380

INTEREST-BEARING LIABILITIES

Time deposits

$401,317

$7,847

1.96%

$293,725

$4,210

1.43%

Brokered time deposits

83,311

1,921

2.31

68

2

2.35

Savings deposits

410,672

1,285

0.31

465,283

1,015

0.22

Demand deposits

641,461

5,807

0.91

506,099

2,912

0.58

Short term borrowings

96,145

2,250

2.34

281,063

4,936

1.76

Long term borrowings

23,318

498

2.14

6,491

190

2.93

Total interest-bearing liabilities

$1,656,224

19,608

1.18

$1,552,729

13,265

0.85

NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY

Demand deposits

$429,289

$415,968

Other liabilities

12,964

13,718

Stockholders' equity

284,759

247,965

NONINTEREST-BEARING LIABILITIES STOCKHOLDERS' EQUITY

$2,383,236

 

$2,230,380

 

Net interest income and interest rate spread

$84,523

3.53%

$80,346

3.66%

Net interest margin

3.82%

3.87%

 

(1) Interest and yields are calculated on a tax-equivalent basis where applicable.

(2) For 2019, adjustments of $414 thousand and $1.7 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2018, adjustments of $357 thousand and $1.5 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.

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20200129005063/en/

CONTACT: Farmers National Banc Corp.

Kevin J. Helmick, President and CEO 330.533.3341

Email:exec@farmersbankgroup.com

KEYWORD: UNITED STATES NORTH AMERICA PENNSYLVANIA OHIO

INDUSTRY KEYWORD: BANKING PROFESSIONAL SERVICES INSURANCE FINANCE

SOURCE: Farmers National Banc Corp.

Copyright Business Wire 2020.

PUB: 01/29/2020 08:00 AM/DISC: 01/29/2020 08:00 AM

http://www.businesswire.com/news/home/20200129005063/en