Farmers National Banc Corp. Reports Solid Earnings and Improving Margin for the Fourth Quarter of 2024

CANFIELD, Ohio--(BUSINESS WIRE)--Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today reported net income of $14.4 million, or $0.38 per diluted share, for the quarter ended December 31, 2024, compared to $14.6 million, or $0.39 per diluted share, for the quarter ended December 31, 2023. Net income for the fourth quarter of 2024 included certain pretax items. Excluding these items (non-GAAP), net income for the fourth quarter of 2024 was $14.5 million, or $0.39 per diluted share. Kevin J. Helmick, President and CEO, stated “Our team has done an outstanding job navigating a dynamic economic and interest rate cycle in 2024. We are proud to provide our Ohio and Pennsylvania communities with diverse, personalized, and market-leading financial solutions and are excited about expanding our fee business into the greater Columbus market with the acquisition of Crest Retirement. Our fourth quarter performance highlights the positive momentum underway in our business and we continue to believe Farmers is very well positioned to grow earnings in 2025.” Balance Sheet Total assets were $5.12 billion at December 31, 2024, compared to $5.24 billion at September 30, 2024, and $5.08 billion at December 31, 2023. Loans declined slightly to $3.27 billion at December 31, 2024 from $3.28 billion at September 30, 2024, but increased $70.2 million from December 31, 2023. The decrease from the prior quarter was primarily due to declines in residential real estate and indirect lending, while the increase from December 31, 2023, was driven by increased commercial real estate balances along with increased HELOC balances. Securities available for sale totaled $1.27 billion at December 31, 2024, compared to $1.29 billion at September 30, 2024 and $1.30 billion at December 31, 2023. Gross unrealized losses on the portfolio totaled $244.1 million at December 31, 2024 compared to $189.4 million at September 30, 2024 and $217.1 million at December 31, 2023. Interest rates rose sharply in the fourth quarter of 2024 from the third quarter of 2024 driving the increase in gross unrealized losses during the quarter. Volatility in the bond market is expected to continue in 2025. Total deposits declined to $4.27 billion at December 31, 2024 from $4.36 billion at September 30, 2024, but increased $89.4 million from $4.18 billion at December 31, 2023. The increase since December 31, 2023, was driven by the acquisition of $75.0 million in brokered deposits in the third quarter of 2024 and growth in customer deposits (non-brokered) of $14.4 million. The decline since September 30, 2024 was driven by the seasonal decline in public funds which totaled approximately $113.2 million. Total stockholders’ equity declined to $406.0 million at December 31, 2024, compared to $439.7 million at September 30, 2024 and $404.4 million at December 31, 2023. The decrease from September 30, 2024 was primarily driven by an increase in the unrealized losses on investment securities. The increase since December 31, 2023 was primarily driven by an increase in retained earnings offset by an increase in unrealized losses on investment securities. Credit Quality Non-performing loans increased to $22.8 million at December 31, 2024, compared to $19.1 million at September 30, 2024 and $15.1 million at December 31, 2023. The increase since September 30, 2024 was primarily driven by the addition of a single commercial credit with a balance of $2.6 million. The increase from December 31, 2023 resulted from the addition of a single commercial real estate credit with a remaining balance of $8.1 million and the $2.6 million commercial credit mentioned above offset by declines in the balances of other non-performing loans. The Company expects that a single non-performing loan with a balance of $1.2 million will be paid off in the first quarter of 2025 and two other non-performing loans totaling $1.6 million will be sold in the first quarter of 2025 at par. Non-performing loans to total loans were 0.70% at December 31, 2024 compared to 0.58% at September 30, 2024 and 0.47% at December 31, 2023. The Company’s loans which were 30-89 days delinquent were $13.0 million at December 31, 2024, or 0.40% of total loans. This is down from $15.6 million at September 30, 2024 and $16.7 million at December 31, 2023. The Company’s provision for credit losses and unfunded commitments totaled $295,000 for the quarter ended December 31, 2024, compared to $286,000 for the quarter ended December 31, 2023. Annualized net charge-offs as a percentage of average loans were 0.08% for the fourth quarter of 2024, compared to 0.10% for the fourth quarter of 2023. The allowance for credit losses to total loans was 1.10% at December 31, 2024, compared to 1.10% at September 30 2024, and 1.08% at December 31, 2023. Net Interest Income The Company recorded $32.7 million of net interest income in the fourth quarter of 2024 compared to $32.8 million in the fourth quarter of 2023. Average interest earning assets increased to $4.91 billion in the fourth quarter of 2024 compared to $4.82 billion for the fourth quarter of 2023. The increase was driven by an increase in average loan balances of $82.2 million and an increase in federal funds sold and other earning assets of $39.1 million. These increases were offset by a decline in the average balance of investment securities. The net interest margin declined to 2.72% in the fourth quarter of 2024 compared to 2.78% in the fourth quarter of 2023 but was up sharply from the 2.66% margin reported in the third 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 current rate cutting cycle by the Federal Reserve that began in September of 2024 had a significant impact on funding costs in the fourth quarter of 2024 and was the primary reason for the net interest margin increasing during the fourth quarter. The yield on interest bearing liabilities declined from 2.84% in the third quarter of 2024 to 2.72% in the fourth quarter of 2024. The Company expects its net interest margin will continue to expand in 2025 as funding costs reprice lower. Excluding acquisition marks and PPP interest, non-GAAP, the Company’s net interest margin was 2.56% in the fourth quarter of 2024 compared to 2.48% in the third quarter of 2024 and 2.58% in the fourth quarter of 2023. Noninterest Income Noninterest income declined from $12.2 million in the fourth quarter of 2023 to $11.4 million in the fourth quarter of 2024 primarily due to a decline of $1.0 million in the net gain on sale of loans. During the fourth quarter of 2023, the Company recognized a gain on the sale of commercial loans totaling $915,000. No gain was recognized on commercial loan sales in 2024. Income from service charges on deposit accounts increased $213,000 to $1.9 million for the fourth quarter of 2024 compared to $1.7 million for the fourth 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 in the fourth quarter of 2024 increased by $318,000 to $2.7 million compared to $2.4 million in the fourth quarter of 2023. The increase was due to continued growth in the business unit. Insurance agency commissions declined to $1.3 million in the fourth quarter of 2024 from $1.5 million in the fourth quarter of 2023. The fourth quarter of 2023 included an accrual adjustment that did not occur in 2024. Retirement plan consulting fees increased from $631,000 in the fourth quarter of 2023 to $719,000 in the fourth quarter of 2024. The increase was due to increased business in the division. The acquisition of Crest Retirement Advisors LLC in late December of 2024 is expected to further bolster this unit in 2025. Other mortgage banking fee income increased to $285,000 during the fourth quarter of 2024 from $139,000 in the fourth quarter of 2023. The increase was driven by a recovery on the Company’s mortgage servicing rights in the fourth quarter of 2024. Debit card income grew to $2.2 million in the fourth quarter of 2024 from $1.7 million in the fourth quarter of 2023 as better volumes were realized in the current period. Other noninterest income declined to $856,000 in the fourth quarter of 2024 from $1.6 million in the fourth quarter of 2023. The Company recorded $1.1 million in SBIC income in the fourth quarter of 2023 compared to $527,000 in the fourth quarter of 2024. SBIC investments continue to generate solid returns but income can fluctuate wildly quarter to quarter. Noninterest Expense Noninterest expense declined to $26.2 million for the fourth quarter of 2024 compared to $27.0 million for the fourth quarter of 2023. Salaries and employee benefits were $14.4 million for the fourth quarter of 2024 compared to $14.9 million for the fourth quarter of 2023. The decrease was primarily driven by lower healthcare expenses. FDIC and state and local taxes were lower by $465,000 in the fourth quarter of 2024 compared to the fourth quarter of 2023. The decrease was primarily driven by a decrease in FDIC premiums. Professional fees declined to $785,000 for the period ended December 31, 2024, compared to $1.0 million for the period ended December 31, 2023 due to lower legal and consulting expense in the fourth quarter of 2024. The fourth quarter of 2024 included $92,000 of merger related charges for the Crest acquisition compared to $452,000 of merger related charges in the fourth quarter of 2023 for the Emclaire acquisition. Advertising expense declined to $191,000 in the fourth quarter of 2024 compared to $414,000 in the fourth quarter of 2023. The decline was due to an over accrual for advertising expense that was not recognized. Intangible amortization increased to $914,000 in the fourth quarter of 2024 from $578,000 for the fourth quarter of 2023. This increase was driven by acceleration in the amortization from the Cortland acquisition. Other noninterest expense increased to $3.5 million in the fourth quarter of 2024 up from the $3.2 million recognized in the fourth quarter of 2023. The increase was primarily due to $208,000 of operational losses during the fourth quarter of 2024 compared to operational recoveries of $102,000 in the fourth quarter of 2024. Liquidity At December 31, 2024, the Company had access to an additional $549.7 million of FHLB borrowing capacity, along with $414.0 million in available for sale securities that are available for additional pledging. The Company’s loan to deposit ratio was 76.6% at December 31, 2024 while the Company’s average deposit balance per account (excluding collateralized deposits) was $25,188 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 $5.1 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 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 December 31, 2024 are $4.2 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; 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 Twelve Months Ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31, Percent 2024 2024 2024 2024 2023 2024 2023 Change Total interest income $ 57,909 $ 57,923 $ 56,846 $ 55,054 $ 55,069 $ 227,732 $ 213,335 6.7 % Total interest expense 25,170 26,047 24,780 23,367 22,239 99,364 75,549 31.5 % Net interest income 32,739 31,876 32,066 31,687 32,830 128,368 137,786 -6.8 % Provision (credit) for credit losses 295 7,008 1,112 (449 ) 286 7,966 9,153 -13.0 % Noninterest income 11,413 12,340 9,606 8,357 12,156 41,716 41,861 -0.3 % Acquisition related costs 92 0 0 0 452 92 5,475 -98.3 % Other expense 26,082 27,075 26,403 27,039 26,520 106,599 106,321 0.3 % Income before income taxes 17,683 10,133 14,157 13,454 17,728 55,427 58,698 -5.6 % Income taxes 3,292 1,598 2,374 2,214 3,151 9,478 8,766 8.1 % Net income $ 14,391 $ 8,535 $ 11,783 $ 11,240 $ 14,577 $ 45,949 $ 49,932 -8.0 % Average diluted shares outstanding 37,616 37,567 37,487 37,479 37,426 37,512 37,498 Basic earnings per share 0.38 0.23 0.32 0.30 0.39 1.23 1.34 Diluted earnings per share 0.38 0.23 0.31 0.30 0.39 1.22 1.33 Cash dividends per share 0.17 0.17 0.17 0.17 0.17 0.68 0.68 Performance Ratios Net Interest Margin (Annualized) 2.72 % 2.66 % 2.71 % 2.70 % 2.78 % 2.69 % 2.91 % Efficiency Ratio (Tax equivalent basis) 56.42 % 58.47 % 60.80 % 61.54 % 57.84 % 59.26 % 59.24 % Return on Average Assets (Annualized) 1.12 % 0.66 % 0.93 % 0.90 % 1.17 % 0.90 % 0.99 % Return on Average Equity (Annualized) 13.43 % 8.18 % 12.15 % 11.47 % 17.98 % 11.28 % 13.97 % Other Performance Ratios (Non-GAAP) Return on Average Tangible Assets 1.16 % 0.69 % 0.97 % 0.93 % 1.22 % 0.94 % 1.03 % Return on Average Tangible Equity 23.95 % 14.94 % 23.74 % 21.88 % 43.77 % 21.05 % 30.23 % Consolidated Statements of Financial Condition Dec. 31, Sept. 30, June 30, March 31, Dec. 31, 2024 2024 2024 2024 2023 Assets Cash and cash equivalents $ 85,738 $ 189,136 $ 180,987 $ 148,630 $ 103,658 Debt securities available for sale 1,266,553 1,293,350 1,246,730 1,270,149 1,299,701 Other investments 45,405 33,617 37,594 34,619 35,311 Loans held for sale 5,005 2,852 2,577 1,854 3,711 Loans 3,268,346 3,280,517 3,237,369 3,181,318 3,198,127 Less allowance for credit losses 35,863 36,186 33,991 33,159 34,440 Net Loans 3,232,483 3,244,331 3,203,378 3,148,159 3,163,687 Other assets 483,740 473,217 485,587 476,599 472,282 Total Assets $ 5,118,924 $ 5,236,503 $ 5,156,853 $ 5,080,010 $ 5,078,350 Liabilities and Stockholders' Equity Deposits Noninterest-bearing $ 965,507 $ 969,682 $ 968,693 $ 977,475 $ 1,026,630 Interest-bearing 3,226,321 3,317,223 3,237,142 3,220,650 3,150,756 Brokered time deposits 74,951 74,932 0 0 0 Total deposits 4,266,779 4,361,837 4,205,835 4,198,125 4,177,386 Other interest-bearing liabilities 391,150 371,038 494,890 433,777 443,663 Other liabilities 54,967 63,950 59,434 51,082 52,886 Total liabilities 4,712,896 4,796,825 4,760,159 4,682,984 4,673,935 Stockholders' Equity 406,028 439,678 396,694 397,026 404,415 Total Liabilities and Stockholders' Equity $ 5,118,924 $ 5,236,503 $ 5,156,853 $ 5,080,010 $ 5,078,350 Period-end shares outstanding 37,586 37,574 37,575 37,546 37,503 Book value per share $ 10.80 $ 11.70 $ 10.56 $ 10.57 $ 10.78 Tangible book value per share (Non-GAAP)* 5.80 6.69 5.53 5.52 5.71 * Tangible book value per share is calculated by dividing tangible common equity by outstanding shares For the Three Months Ended For the Twelve MonthsEnded Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31, Capital and Liquidity 2024 2024 2024 2024 2023 2024 2023 Common Equity Tier 1 Capital Ratio (a) 11.26 % 10.91 % 10.94 % 10.88 % 10.61 % Total Risk Based Capital Ratio (a) 14.67 % 14.34 % 14.42 % 14.38 % 14.06 % Tier 1 Risk Based Capital Ratio (a) 11.75 % 11.39 % 11.43 % 11.37 % 11.10 % Tier 1 Leverage Ratio (a) 8.37 % 8.20 % 8.26 % 8.19 % 8.02 % Equity to Asset Ratio 7.93 % 8.40 % 7.69 % 7.82 % 7.96 % Tangible Common Equity Ratio (b) 4.42 % 4.98 % 4.18 % 4.24 % 4.38 % Net Loans to Assets 63.15 % 61.96 % 62.12 % 61.97 % 62.30 % Loans to Deposits 76.60 % 75.21 % 76.97 % 75.78 % 76.56 % Asset Quality Non-performing loans $ 22,818 $ 19,076 $ 12,870 $ 11,951 $ 15,063 Non-performing assets 22,903 19,137 12,975 12,215 15,321 Loans 30 - 89 days delinquent 13,032 15,562 18,546 14,069 16,705 Charged-off loans 928 5,116 661 1,282 972 7,987 2,937 Recoveries 293 504 98 271 172 1,166 681 Net Charge-offs 635 4,612 563 1,011 800 6,821 2,256 Annualized Net Charge-offs to Average Net Loans 0.08 % 0.58 % 0.07 % 0.13 % 0.10 % 0.21 % 0.07 % Allowance for Credit Losses to Total Loans 1.10 % 1.10 % 1.05 % 1.04 % 1.08 % Non-performing Loans to Total Loans 0.70 % 0.58 % 0.40 % 0.38 % 0.47 % Loans 30 - 89 Days Delinquent to Total Loans 0.40 % 0.47 % 0.57 % 0.44 % 0.52 % Allowance to Non-performing Loans 157.17 % 189.69 % 264.11 % 277.46 % 228.64 % Non-performing Assets to Total Assets 0.45 % 0.37 % 0.25 % 0.24 % 0.30 % (a) December 31, 2024 ratio is estimated (b) This is a non-GAAP financial measure. A reconciliation to GAAP is shown below For the Three Months Ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, End of Period Loan Balances 2024 2024 2024 2024 2023 Commercial real estate $ 1,382,714 $ 1,372,374 $ 1,348,675 $ 1,339,372 $ 1,335,806 Commercial 349,966 358,247 343,694 335,747 346,354 Residential real estate 845,081 852,444 849,561 836,252 843,697 HELOC 158,014 155,967 151,511 143,696 142,441 Consumer 259,954 269,231 268,606 256,846 259,784 Agricultural loans 262,392 261,773 265,035 260,425 261,288 Total, excluding net deferred loan costs $ 3,258,121 $ 3,270,036 $ 3,227,082 $ 3,172,338 $ 3,189,370 For the Three Months Ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, End of Period Customer Deposit Balances 2024 2024 2024 2024 2023 Noninterest-bearing demand $ 965,507 $ 969,682 $ 968,693 $ 977,474 $ 1,026,630 Interest-bearing demand 1,366,255 1,453,288 1,380,266 1,381,383 1,362,609 Money market 682,558 676,664 677,058 646,308 593,975 Savings 414,796 418,771 433,166 452,949 468,890 Certificate of deposit 762,712 768,500 746,652 740,011 725,282 Total customer deposits $ 4,191,828 $ 4,286,905 $ 4,205,835 $ 4,198,125 $ 4,177,386 For the Three Months Ended For the Twelve MonthsEnded Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31, Noninterest Income 2024 2024 2024 2024 2023 2024 2023 Service charges on deposit accounts $ 1,890 $ 1,992 $ 1,846 $ 1,583 $ 1,677 $ 7,311 $ 6,322 Bank owned life insurance income, including death benefits 613 688 652 707 617 2,659 2,442 Trust fees 2,700 2,544 2,345 2,510 2,382 10,099 9,047 Insurance agency commissions 1,273 1,416 1,255 1,528 1,540 5,472 5,444 Security gains (losses), including fair value changes for equity securities 10 (403 ) (124 ) (2,120 ) 19 (2,638 ) (471 ) Retirement plan consulting fees 719 677 623 617 631 2,637 2,467 Investment commissions 621 476 478 432 589 2,007 1,978 Net gains on sale of loans 282 506 417 297 1,280 1,502 2,391 Other mortgage banking fee income (loss), net 285 (168 ) 192 125 139 435 711 Debit card and EFT fees 2,164 1,993 1,760 1,567 1,697 7,484 7,059 Other noninterest income 856 2,619 162 1,111 1,585 4,748 4,471 Total Noninterest Income $ 11,413 $ 12,340 $ 9,606 $ 8,357 $ 12,156 $ 41,716 $ 41,861 For the Three Months Ended For the Twelve MonthsEnded Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31, Noninterest Expense 2024 2024 2024 2024 2023 2024 2023 Salaries and employee benefits $ 14,424 $ 14,874 $ 14,558 $ 15,069 $ 14,871 $ 58,925 $ 57,374 Occupancy and equipment 4,075 3,968 3,815 3,730 3,896 15,588 15,434 FDIC insurance and state and local taxes 1,019 1,480 1,185 1,345 1,484 5,029 5,848 Professional fees 785 1,084 1,194 1,254 1,004 4,317 4,351 Merger related costs 92 0 0 0 452 92 5,475 Advertising 191 435 445 431 414 1,503 1,793 Intangible amortization 914 629 630 688 578 2,861 3,434 Core processing charges 1,201 1,186 1,099 1,135 1,057 4,622 4,639 Other noninterest expenses 3,471 3,419 3,477 3,387 3,216 13,754 13,448 Total Noninterest Expense $ 26,172 $ 27,075 $ 26,403 $ 27,039 $ 26,972 $ 106,691 $ 111,796 Average Balance Sheets and Related Yields and Rates (Dollar Amounts in Thousands) Three Months Ended Three Months Ended December 31, 2024 December 31, 2023 AVERAGE YIELD/ AVERAGE YIELD/ BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1) EARNING ASSETS Loans (2) $3,270,825 $47,286 5.78% $3,188,581 $44,868 5.63% Taxable securities 1,119,391 6,850 2.45 1,113,107 6,536 2.35 Tax-exempt securities (2) 379,342 2,991 3.15 411,860 3,235 3.14 Other investments 38,855 420 4.32 37,625 529 5.62 Federal funds sold and other 104,289 987 3.79 65,236 564 3.46 Total earning assets 4,912,702 58,534 4.77 4,816,409 55,732 4.63 Nonearning assets 247,199 163,905 Total assets $5,159,901 $4,980,314 INTEREST-BEARING LIABILITIES Time deposits $765,674 $7,463 3.90% $712,485 $6,291 3.53% Brokered time deposits 74,941 822 4.39 96,634 1,315 5.44 Savings deposits 1,091,547 4,056 1.49 1,068,465 2,918 1.09 Demand deposits - interest bearing 1,419,048 8,731 2.46 1,393,252 7,922 2.27 Total interest-bearing deposits 3,351,210 21,072 2.52 3,270,836 18,446 2.26 Short term borrowings 260,369 3,105 4.77 206,826 2,749 5.32 Long term borrowings 86,096 993 4.61 88,609 1,043 4.71 Total borrowed funds 346,465 4,098 4.73 295,435 3,792 5.13 Total interest-bearing liabilities 3,697,675 25,170 2.72 3,566,271 22,238 2.49 NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits - noninterest bearing 973,788 1,035,405 Other liabilities 59,792 54,306 Stockholders' equity 428,646 324,332 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,159,901 $4,980,314 Net interest income and interest rate spread $33,364 2.05% $33,494 2.14% Net interest margin 2.72% 2.78% (1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2024, adjustments of $94 thousand and $530 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2023, adjustments of $86 thousand and $577 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, 2024 December 31, 2023 AVERAGE YIELD/ AVERAGE YIELD/ BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1) EARNING ASSETS Loans (2) $3,227,384 $186,032 5.76% $3,155,858 $172,161 5.46% Taxable securities 1,110,905 26,838 2.42 1,143,547 26,231 2.29 Tax-exempt securities (2) 386,643 12,165 3.15 419,557 13,283 3.17 Other investments 35,402 1,450 4.10 39,559 1,986 5.02 Federal funds sold and other 96,288 3,727 3.87 74,950 2,476 3.30 Total earning assets 4,856,622 230,212 4.74 4,833,471 216,137 4.47 Nonearning assets 234,297 205,683 Total assets $5,090,919 $5,039,154 INTEREST-BEARING LIABILITIES Time deposits $745,945 $29,329 3.93% $654,717 $19,462 2.97% Brokered time deposits 25,389 1,108 4.36 132,895 6,204 4.67 Savings deposits 1,095,470 16,144 1.47 1,113,561 9,899 0.89 Demand deposits - interest bearing 1,396,193 34,588 2.48 1,415,425 27,541 1.95 Total interest-bearing deposits 3,262,997 81,169 2.49 3,316,598 63,106 1.90 Short term borrowings 293,488 14,105 4.81 160,964 8,357 5.19 Long term borrowings 87,749 4,090 4.66 88,439 4,086 4.62 Total borrowed funds 381,237 18,195 4.77 249,403 12,443 4.99 Total interest-bearing liabilities 3,644,234 99,364 2.73 3,566,001 75,549 2.12 NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits - noninterest bearing $981,115 $1,065,389 Other liabilities 58,134 50,302 Stockholders' equity 407,436 357,462 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,090,919 $5,039,154 Net interest income and interest rate spread $130,848 2.01% $140,588 2.35% Net interest margin 2.69% 2.91% (1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2024, adjustments of $322 thousand and $2.2 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 Twelve MonthsEnded Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31, 2024 2024 2024 2024 2023 2024 2023 Total Assets $ 5,118,924 $ 5,236,503 $ 5,156,853 $ 5,080,010 $ 5,078,350 $ 5,118,924 $ 5,078,350 Less Goodwill and other intangibles 188,200 188,340 188,970 189,599 190,288 188,200 190,288 Tangible Assets $ 4,930,724 $ 5,048,163 $ 4,967,883 $ 4,890,411 $ 4,888,062 $ 4,930,724 $ 4,888,062 Average Assets 5,159,901 5,134,062 5,044,516 5,023,966 4,980,314 5,090,919 5,039,154 Less average Goodwill and other intangibles 188,256 188,755 189,382 190,040 191,108 189,105 192,306 Average Tangible Assets $ 4,971,645 $ 4,945,307 $ 4,855,134 $ 4,833,926 $ 4,789,206 $ 4,901,814 $ 4,846,848 Reconciliation of Common Stockholders' Equity to Tangible Common Equity For the Three Months Ended For the Twelve MonthsEnded Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31, 2024 2024 2024 2024 2023 2024 2023 Stockholders' Equity $ 406,028 $ 439,678 $ 396,694 $ 397,026 $ 404,415 $ 406,028 $ 404,415 Less Goodwill and other intangibles 188,200 188,340 188,970 189,599 190,288 188,200 190,288 Tangible Common Equity $ 217,828 $ 251,338 $ 207,724 $ 207,427 $ 214,127 $ 217,828 $ 214,127 Average Stockholders' Equity 428,646 417,327 387,881 395,549 324,332 407,436 357,462 Less average Goodwill and other intangibles 188,256 188,755 189,382 190,040 191,108 189,105 192,306 Average Tangible Common Equity $ 240,390 $ 228,572 $ 198,499 $ 205,509 $ 133,224 $ 218,331 $ 165,156 Reconciliation of Net Income, Less Merger and Certain Items For the Three Months Ended For the Twelve MonthsEnded Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31, 2024 2024 2024 2024 2023 2024 2023 Net income $ 14,391 $ 8,535 $ 11,783 $ 11,240 $ 14,577 $ 45,949 $ 49,932 Acquisition related costs - after tax 82 0 0 0 358 82 4,395 Acquisition related provision - after tax 0 0 0 0 0 0 6,077 Employee severence - after tax 0 0 0 0 798 0 798 Lawsuit settlement expense - after tax 0 0 0 0 0 0 620 Net (gain) on loan sale - after tax 0 0 0 0 (723 ) 0 (723 ) Net loss (gain) on asset/security sales - after tax 70 (32 ) 407 1,675 171 2,120 698 Net income - Adjusted $ 14,543 $ 8,503 $ 12,190 $ 12,915 $ 15,181 $ 48,151 $ 61,797 Diluted EPS excluding merger and certain items $ 0.39 $ 0.23 $ 0.33 $ 0.34 $ 0.41 $ 1.28 $ 1.65 Return on Average Assets excluding merger and certain items (Annualized) 1.13 % 0.66 % 0.97 % 1.03 % 1.22 % 0.95 % 1.23 % Return on Average Equity excluding merger and certain items (Annualized) 13.57 % 8.15 % 12.57 % 13.06 % 18.72 % 11.82 % 17.29 % Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized) 24.20 % 14.88 % 24.56 % 25.14 % 45.58 % 22.05 % 37.42 % Efficiency ratio excluding certain items For the Three Months Ended For the Twelve MonthsEnded Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31, 2024 2024 2024 2024 2023 2024 2023 Net interest income, tax equated $ 33,364 $ 32,483 $ 32,661 $ 32,341 $ 33,494 $ 130,848 $ 140,588 Noninterest income 11,413 12,340 9,606 8,357 12,156 41,716 41,861 Net (gain) on loan sale 0 0 0 0 (915 ) 0 (915 ) Net loss (gain) on asset/security sales 89 (41 ) 515 2,120 217 2,684 883 Net interest income and noninterest income adjusted 44,866 44,782 42,782 42,818 44,952 175,248 182,417 Noninterest expense less intangible amortization 25,260 26,446 25,773 26,351 26,394 103,830 108,361 Legal settlement expense 0 0 0 0 0 0 785 Employee severence 0 0 0 0 1,010 0 1,010 Acquisition related costs 92 0 0 0 452 92 5,475 Noninterest expense adjusted 25,168 26,446 25,773 26,351 24,932 103,738 101,091 Efficiency ratio excluding certain items 56.10 % 59.05 % 60.24 % 61.54 % 55.46 % 59.19 % 55.42 % Net interest margin excluding acquisition marks and PPP interest and fees For the Three Months Ended For the Twelve MonthsEnded Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31, 2024 2024 2024 2024 2023 2024 2023 Net interest income, tax equated $ 33,364 $ 32,483 $ 32,661 $ 32,341 $ 33,494 $ 130,848 $ 140,588 Acquisition marks 1,953 2,123 2,391 2,370 2,475 8,837 10,946 PPP interest and fees 0 0 1 1 1 2 5 Adjusted and annualized net interest income 125,644 121,440 121,076 119,880 124,072 122,009 129,637 Average earning assets 4,912,702 4,890,344 4,825,532 4,796,922 4,816,409 4,856,622 4,833,471 Less PPP average balances 112 118 171 213 229 153 254 Adjusted average earning assets 4,912,590 4,890,226 4,825,361 4,796,709 4,816,180 4,856,469 4,833,217 Net interest margin excluding marks and PPP interest and fees 2.56 % 2.48 % 2.51 % 2.50 % 2.58 % 2.51 % 2.68 %

Farmers National Banc Corp. Reports Solid Earnings and Improving Margin for the Fourth Quarter of 2024

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