EX-99.1 2 d717399dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

April 23, 2014

Press Release

 

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

FARMERS NATIONAL BANC CORP. ANNOUNCES

2014 FIRST QUARTER FINANCIAL RESULTS

 

    125 consecutive quarters of profitability

 

    Net income per diluted share for three months ended March 31, 2014 was $0.12, an increase of 9% compared to $0.11 for the first quarter, 2013.

 

    Efficiency ratio for the 2014 first quarter improved to 69.87%, compared to 72.57% for the same quarter in 2013

 

    Loans increased 5.7% since March 31, 2013

 

    Non-performing assets to total assets remain at low levels, 0.76% at March 31, 2014

CANFIELD, Ohio (April 23, 2014) – Farmers National Banc Corp. (Farmers) (NASDAQ: FMNB) today reported financial results for the three months ended March 31, 2014.

Net income for the three months ended March 31, 2014 was $2.2 million, or $0.12 per diluted share, which compares favorably to $2.0 million, or $0.11 per diluted share for the first quarter ended March 31, 2013.

Kevin J. Helmick, President and CEO, stated, “Net income for the first quarter of 2014 increased 9.28% to $2.2 million compared to the first quarter of 2013, and our efficiency ratio also improved to 69.87% from 72.57% during the same time period. The improvement in our efficiency ratio is consistent with our strategy to increase fee income and decrease noninterest expenses. It is important to note that noninterest income has increased 19.4% in comparing the first quarter of 2014 to the first quarter of 2013, while noninterest expenses increased only 0.58%. We are also pleased to report that loans increased 5.7% in the past twelve months.”

2014 First Quarter Financial Highlights

 

    Loan growth

Total loans were $626.2 million at March 31, 2014, compared to $592.5 million at March 31, 2013. This represents an increase of 5.7%. The increase in loans is a direct result of Farmers’ focus on loan growth utilizing a talented lending and credit team while adhering to a sound underwriting discipline. Most of the increase in loans has occurred in the commercial real estate, residential real estate and indirect loan portfolios. Loans comprised 58.2% of the Bank’s average earning assets in 2014, compared to 55.2% in 2013.

 

    Loan quality

Non-performing assets to total assets remain at a safe level, currently at 0.76%. Early stage delinquencies also continue to decrease, down $1.1 million from March 31, 2013 to $2.5 million at March 31, 2014.

 

    Net interest margin

The net interest margin for the quarter ended March 31, 2014 was 3.56%, an improvement of 3 basis points over the 3.53% reported for the quarter ended December 31, 2013. Asset yields increased 3 basis points, while the cost of interest-bearing liabilities remain unchanged.

 

    Noninterest income

Noninterest income was $3.43 million for the first quarter of 2014, a 19.4% improvement compared to the same quarter in 2013. Trust fees increased $151 thousand or 11% and service charges on deposit accounts also increased $99 thousand or 20%. The company also added $364 thousand in retirement plan consulting fees earned from the entity acquired in July 2013, National Associates, Inc.

 

    Cost saving initiatives

The Company underwent a cost reduction program in 2013 that included the closure of two retail branch locations and the elimination of several full time positions. In addition to the cost savings initiatives, the Company also made adjustments to the fee structure for its retail and commercial banking products and services. As a result of these actions, the Company’s efficiency ratio improved to 69.87% for the quarter ended March 31, 2014, which compares favorably to the 72.57% reported in the first quarter in 2013.


2014 Outlook

Mr. Helmick continued: “Although loan production was moderate in the first quarter of 2014, we look forward to the ensuing quarters as the economic outlook begins to improve. We also continue our discipline of closely monitoring levels of non-interest expense while growing non-interest revenues.”

Farmers National Banc Corp. is the bank holding company for the Farmers National Bank of Canfield, Farmers National Insurance, LLC, Farmers Trust Company and National Associates, Inc. Farmers’ operates eighteen banking offices throughout Mahoning, Trumbull, Columbiana and Stark Counties and two trust offices located in Boardman and Howland. Farmers offers a wide range of banking and investment services to companies and individuals, and maintains a website at www.farmersbankgroup.com.

Non-GAAP Disclosure

This press release includes disclosures of Farmers tangible common equity ratio and pre-tax, pre-provision income and pre-tax, pre-provision income, excluding gains (losses) on sales of securities, 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. 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, 2013, which has been filed with the Securities and Exchange Commission and is available on Farmers’ website (www.farmersbankgroup.com) and on the Securities and Exchange Commission’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  
     March 31,
2014
    Dec. 31,
2013
    Sept. 30,
2013
    June 30,
2013
    March 31,
2013
 

Total interest income

   $ 10,063      $ 10,298      $ 10,122      $ 10,273      $ 10,266   

Total interest expense

     1,207        1,257        1,274        1,234        1,298   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     8,856        9,041        8,848        9,039        8,968   

Provision for loan losses

     330        525        340        170        255   

Other income

     3,433        3,641        4,173        3,225        2,875   

Other expense

     9,141        9,221        10,926        9,822        9,088   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     2,818        2,936        1,755        2,272        2,500   

Income taxes

     627        641        143        404        495   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 2,191      $ 2,295      $ 1,612      $ 1,868      $ 2,005   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average shares outstanding

     18,778        18,776        18,776        18,747        18,795   

Pre-tax pre-provision income

   $ 3,148      $ 3,461      $ 2,095      $ 2,442      $ 2,755   

Basic and diluted earnings per share

     0.12        0.12        0.09        0.10        0.11   

Cash dividends

     563        563        563        557        564   

Cash dividends per share

     0.03        0.03        0.03        0.03        0.03   

Performance Ratios

          

Net Interest Margin (Annualized)

     3.56     3.53     3.47     3.63     3.68

Efficiency Ratio (Tax equivalent basis)

     69.87     67.96     81.64     77.16     72.57

Return on Average Assets (Annualized)

     0.78     0.78     0.56     0.82     0.72

Return on Average Equity (Annualized)

     7.65     7.23     5.60     6.21     6.70

Dividends to Net Income

     25.70     24.53     34.93     29.82     28.13


Consolidated Statements of Financial Condition

 

     March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,  
     2014     2013     2013     2013     2013  

Assets

          

Cash and cash equivalents

   $ 29,333      $ 27,513      $ 40,303      $ 26,587      $ 57,312   

Securities available for sale

     427,625        422,985        438,127        443,833        439,540   

Loans held for sale

     1,026        158        1,016        4,612        4,330   

Loans

     626,186        630,684        611,349        596,838        592,520   

Less allowance for loan losses

     7,387        7,568        7,369        7,590        7,508   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Loans

     618,799        623,116        603,980        589,248        585,012   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other assets

     64,217        63,554        64,693        59,209        56,905   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Assets

   $ 1,141,000      $ 1,137,326      $ 1,148,119      $ 1,123,489      $ 1,143,099   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

          

Deposits

   $ 923,033      $ 915,216      $ 903,410      $ 901,886      $ 915,855   

Other interest-bearing liabilities

     92,815        101,439        118,322        101,589        101,659   

Other liabilities

     7,829        7,664        13,863        5,698        5,009   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     1,023,677        1,024,319        1,035,595        1,009,173        1,022,523   

Stockholders’ Equity

     117,323        113,007        112,524        114,316        120,576   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 1,141,000      $ 1,137,326      $ 1,148,119      $ 1,123,489      $ 1,143,099   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Period-end shares outstanding

     18,781        18,776        18,776        18,547        18,795   

Book value per share

   $ 6.25      $ 6.02      $ 5.99      $ 6.16      $ 6.42   

Tangible book value per share

     5.71        5.47        5.43        5.85        6.10   

Capital and Liquidity

          

Total Capital to Risk Weighted Assets (a)

     16.60     16.26     16.28     17.25     17.48

Tier 1 Capital to Risk Weighted Assets (a)

     15.55     15.19     15.22     16.08     16.31

Tier 1 Capital to Average Assets (a)

     9.73     9.36     9.29     9.64     9.77

Equity to Asset Ratio

     10.28     9.94     9.80     10.18     10.55

Tangible Common Equity Ratio

     9.48     9.11     8.96     9.71     10.08

Net Loans to Assets

     54.23     54.79     52.61     52.45     51.18

Loans to Deposits

     67.84     68.91     67.67     66.18     64.70

Asset Quality

          

Non-performing loans

   $ 8,494      $ 9,091      $ 9,124      $ 8,079      $ 7,368   

Other Real Estate Owned

     174        171        208        295        410   

Non-performing assets

     8,668        9,262        9,332        8,374        7,778   

Loans 30 - 89 days delinquent

     2,473        3,600        2,348        2,497        3,536   

Charged-off loans

     836        620        915        456        663   

Recoveries

     325        294        354        367        287   

Net Charge-offs

     511        326        561        89        376   

Annualized Net Charge-offs to Average Net Loans Outstanding

     0.34     0.22     0.38     0.06     0.26

Allowance for Loan Losses to Total Loans

     1.18     1.20     1.21     1.27     1.27

Non-performing Loans to Total Loans

     1.36     1.44     1.49     1.35     1.24

Allowance to Non-performing Loans

     86.97     83.25     80.77     93.95     101.90

Non-performing Assets to Total Assets

     0.76     0.81     0.81     0.75     0.68

 

(a) March 31, 2014 ratio is estimated


Reconciliation of Common Stockholders’ Equity to Tangible Common Equity

 

     March 31,      Dec. 31,      Sept. 30,      June 30,      March 31,  
     2014      2013      2013      2013      2013  

Stockholders’ Equity

   $ 117,323       $ 113,007       $ 112,524       $ 114,316       $ 120,576   

Less Goodwill and other intangibles

     10,151         10,343         10,546         5,836         5,934   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tangible Common Equity

   $ 107,172       $ 102,664       $ 101,978       $ 108,480       $ 114,642   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
Reconciliation of Total Assets to Tangible Assets   
     March 31,      Dec. 31,      Sept. 30,      June 30,      March 31,  
     2014      2013      2013      2013      2013  

Total Assets

   $ 1,141,000       $ 1,137,326       $ 1,148,119       $ 1,123,489       $ 1,143,099   

Less Goodwill and other intangibles

     10,151         10,343         10,546         5,836         5,934   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tangible Assets

   $ 1,130,849       $ 1,126,983       $ 1,137,573       $ 1,117,653       $ 1,137,165   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
Reconciliation of Income Before Taxes to Pre-Tax, Pre-Provision Income   
     For the Three Months Ended  
     March 31,      Dec. 31,      Sept. 30,      June 30,      March 31,  
     2014      2013      2013      2013      2013  

Income before income taxes

   $ 2,818       $ 2,936       $ 1,755       $ 2,272       $ 2,500   

Provision for loan losses

     330         525         340         170         255   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Pre-tax, pre-provision income

   $ 3,148       $ 3,461       $ 2,095       $ 2,442       $ 2,755