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EX-99.2 - EX-99.2 - FARMERS NATIONAL BANC CORP /OH/d667630dex992.htm
8-K - 8-K - FARMERS NATIONAL BANC CORP /OH/d667630d8k.htm

Exhibit 99.1

January 29, 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

2013 FOURTH QUARTER FINANCIAL RESULTS

 

    124 consecutive quarters of profitability

 

    Net income per diluted share for three months ended December 31, 2013 was $0.12, compared to $0.09 for the third quarter, 2013.

 

    Efficiency ratio for the fourth quarter improved to 67.96%, compared to 72.48% for the same quarter in 2012

 

    Loans increased 7.5% since December 31, 2012

 

    Non-performing assets to total assets remain at low levels, 0.81% at December 31, 2013

 

    Announces expansion to Rocky River, Ohio

CANFIELD, Ohio (January 29, 2014) – Farmers National Banc Corp. (Farmers) (NASDAQ: FMNB) today reported financial results for the three and twelve months ended December 31, 2013.

Net income for the three months ended December 31, 2013 was $2.3 million, or $0.12 per diluted share compared to $2.6 million, or $0.14 per diluted share for the fourth quarter ended December 31, 2012. Net income for the year ended December 31, 2013 was $7.8 million, or $0.41 per diluted share compared to $9.9 million, or $0.53 per diluted share for 2012. During the 2013 third quarter, the Company recorded charges of $1.3 million related to severance costs for terminated employees. Excluding these severance expenses, net income for 2013 would have been $8.6 million, or $0.46 per share.

Kevin J. Helmick, President and CEO, stated, “Excluding security gains of $586 thousand in the fourth quarter of 2012 and compared to $8 thousand in the fourth quarter of 2013, net income for the current quarter increased $40 thousand. Our efficiency ratio improved to 67.96%, in the 2013 fourth quarter, representing the lowest quarter in the past two years. The improvement in our efficiency ratio is consistent with our strategy to increase fee income and decrease noninterest expenses. We are also pleased to report that net loans increased 7.5% during 2013. Most of this growth came from our commercial real estate, residential real estate and indirect loan portfolios.”

Northeast Ohio Expansion

Farmers is excited to announce it is establishing a branch office in Rocky River in the previously-acquired NAI building. Farmers will take its unique brand of business banking into the Greater Cleveland market utilizing a model similar to the Farmers’ Canton office. The expansion kicked-off with the hiring of two key associates, David E. Simko, Vice President/Commercial Banking and Ted Grabowski, Vice President/Private Client Relationship Manager. Farmers will also hire a Financial Advisor, Mortgage Loan Consultant and Universal Banker for the office located at 20325 Center Ridge Road.

2013 Financial Highlights

 

    Loan growth

Total loans were $630.7 million at year-end 2013, compared to $586.6 million at year-end 2012. This represents an increase of 7.52%. The improvement in the local economy is the main factor driving the increase in loans. Most of the increase in loans has occurred in the commercial real estate, residential real estate and indirect loan portfolios. Loans comprised 56.2% of the Bank’s average earning assets in 2013, compared to 54.8% in 2012.

 

    Loan quality

Net charge-offs decreased from $2.9 million for the year ended December 31, 2012 to $1.4 million in 2013. Most of the improvement occurred in the commercial and commercial real estate loan portfolios. Non-performing assets to total assets remain at a safe level, currently at 0.81%. Early stage delinquencies also remain at low levels, down $58 thousand from December 31, 2012 to $3.6 million at December 31, 2013.


    Net interest margin

The net interest margin for the quarter ended December 31, 2013 was 3.53%, an improvement of 6 basis points over the 3.47% reported for the quarter ended September 30, 2013. Asset yields increased 6 basis points, while the cost of interest-bearing liabilities remain unchanged.

 

    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 67.96% for the quarter ended December 31, 2013, which compares favorably to the 72.48% reported in the fourth quarter in 2012.

2014 Outlook

Mr. Helmick continued: “While the economy continues to slowly improve, we are excited about the opportunities to sustain the momentum our company has seen in loan growth while maintaining our consistent asset quality levels. We also continue our discipline of closely monitoring levels of non-interest income 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, 2012, 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     For the Twelve Months Ended  
     Dec 31,
2013
    Sept 30,
2013
    June 30,
2013
    March 31,
2013
    Dec 31,
2012
    Dec 31,
2013
    Dec 31,
2012
    Percent
Change
 

Total interest income

   $ 10,298      $ 10,122      $ 10,273      $ 10,266      $ 10,691      $ 40,959      $ 43,110        -5.0

Total interest expense

     1,257        1,274        1,234        1,298        1,435        5,063        6,212        -18.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     9,041        8,848        9,039        8,968        9,256        35,896        36,898        -2.7

Provision for loan losses

     525        340        170        255        0        1,290        725        77.9

Other income

     3,641        4,173        3,225        2,875        3,671        13,914        12,578        10.6

Other expense

     9,221        10,926        9,822        9,088        9,465        39,057        35,764        9.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     2,936        1,755        2,272        2,500        3,462        9,463        12,987        -27.1

Income taxes

     641        143        404        495        825        1,683        3,055        -44.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 2,295      $ 1,612      $ 1,868      $ 2,005      $ 2,637      $ 7,780      $ 9,932        -21.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average shares outstanding

     18,776        18,776        18,747        18,795        18,799        18,773        18,792     

Pre-tax pre-provision income

   $ 3,461      $ 2,095      $ 2,442      $ 2,755      $ 3,462      $ 10,753      $ 13,712     

Basic and diluted earnings per share

     0.12        0.09        0.10        0.11        0.14        0.41        0.53     

Cash dividends

     563        563        557        564        1,128        2,248        3,382     

Cash dividends per share

     0.03        0.03        0.03        0.03        0.06        0.12        0.18     

Performance Ratios

            

Net Interest Margin (Annualized)

     3.53     3.47     3.63     3.68     3.67     3.58     3.76  

Efficiency Ratio (Tax equivalent basis)

     67.96     81.64     77.16     72.57     72.48     74.82     69.94  

Return on Average Assets (Annualized)

     0.78     0.56     0.66     0.72     0.92     0.68     0.89  

Return on Average Equity (Annualized)

     7.23     5.60     6.21     6.70     8.65     6.66     8.42  

Dividends to Net Income

     24.53     34.93     29.82     28.13     42.78     28.89     34.05  

Consolidated Statements of Financial Condition

 

    

Dec 31,

2013

    

Sept 30,

2013

    

June 30,

2013

    

March 31,

2013

    

Dec 31,

2012

 

Assets

              

Cash and cash equivalents

   $ 27,513       $ 40,303       $ 26,587       $ 57,312       $ 37,759   

Securities available for sale

     422,985         438,127         443,833         439,540         464,088   

Loans held for sale

     158         1,016         4,612         4,330         3,624   

Loans

     630,684         611,349         596,838         592,520         586,592   

Less allowance for loan losses

     7,568         7,369         7,590         7,508         7,629   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net Loans

     623,116         603,980         589,248         585,012         578,963   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other assets

     63,554         64,693         59,209         56,905         55,261   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Assets

   $ 1,137,326       $ 1,148,119       $ 1,123,489       $ 1,143,099       $ 1,139,695   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

              

Deposits

   $ 915,216       $ 903,410       $ 901,886       $ 915,855       $ 919,009   

Other interest-bearing liabilities

     101,439         118,322         101,589         101,659         90,309   

Other liabilities

     7,664         13,863         5,698         5,009         9,585   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

     1,024,319         1,035,595         1,009,173         1,022,523         1,018,903   

Stockholders’ Equity

     113,007         112,524         114,316         120,576         120,792   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 1,137,326       $ 1,148,119       $ 1,123,489       $ 1,143,099       $ 1,139,695   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


Period-end shares outstanding

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

Book value per share

   $ 6.02      $ 5.99      $ 6.16      $ 6.42      $ 6.43   

Tangible book value per share

     5.47        5.43        5.85        6.10        6.11   

Capital and Liquidity

          

Total Capital to Risk Weighted Assets (a)

     16.23     16.28     17.25     17.48     17.35

Tier 1 Capital to Risk Weighted Assets (a)

     15.16     15.22     16.08     16.31     16.18

Tier 1 Capital to Average Assets (a)

     9.36     9.29     9.64     9.77     9.54

Equity to Asset Ratio

     9.94     9.80     10.18     10.55     10.60

Tangible Common Equity Ratio

     9.11     8.96     9.71     10.08     10.12

Net Loans to Assets

     54.79     52.61     52.45     51.18     50.80

Loans to Deposits

     68.91     67.67     66.18     64.70     63.83

Asset Quality

          

Non-performing loans (b)

   $ 9,091      $ 9,124      $ 8,079      $ 7,368      $ 8,202   

Other Real Estate Owned

     171        208        295        410        334   

Non-performing assets

     9,262        9,332        8,374        7,778        8,536   

Loans 30-89 days delinquent (b)

     3,600        2,348        2,497        3,536        3,658   

Charged-off loans

     620        915        456        663        1,377   

Recoveries

     294        354        367        287        382   

Net Charge-offs

     326        561        89        376        995   

Annualized Net Charge-offs to

          

Average Net Loans Outstanding

     0.22     0.38     0.06     0.26     0.71

Allowance for Loan Losses to Total Loans

     1.20     1.21     1.27     1.27     1.30

Non-performing Loans to Total Loans

     1.44     1.49     1.35     1.24     1.40

Allowance to Non-performing Loans

     83.25     80.77     93.95     101.90     93.01

Non-performing Assets to Total Assets

     0.81     0.81     0.75     0.68     0.75

 

(a) Dec 31, 2013 ratio is estimated
(b) Amounts reported are unpaid principal balance

Reconciliation of Common Stockholders’ Equity to Tangible Common Equity

 

    

Dec 31,

2013

    

Sept 30,

2013

    

June 30,

2013

    

March 31,

2013

    

Dec 31,

2012

 

Stockholders’ Equity

   $ 113,007       $ 112,524       $ 114,316       $ 120,576       $ 120,792   

Less Goodwill and other intangibles

     10,343         10,546         5,836         5,934         6,032   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tangible Common Equity

   $ 102,664       $ 101,978       $ 108,480       $ 114,642       $ 114,760   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Reconciliation of Total Assets to Tangible Assets

 

    

Dec 31,

2013

     Sept 30,
2013
     June 30,
2013
    

March 31,

2013

    

Dec 31,

2012

 

Total Assets

   $ 1,137,326       $ 1,148,119       $ 1,123,489       $ 1,143,099       $ 1,139,695   

Less Goodwill and other intangibles

     10,343         10,546         5,836         5,934         6,032   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tangible Assets

   $ 1,126,983       $ 1,137,573       $ 1,117,653       $ 1,137,165       $ 1,133,663   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


Reconciliation of Income Before Taxes to Pre-Tax, Pre-Provision Income

 

                      
     For the Three Months Ended      For the Twelve Months Ended  
    

Dec 31,

2013

    

Sept 30,

2013

    

June 30,

2013

    

March 31,

2013

    

Dec 31,

2012

    

Dec 31,

2013

    

Dec 31,

2012

 

Income before income taxes

   $ 2,936       $ 1,755       $ 2,272       $ 2,500       $ 3,462       $ 9,463       $ 12,987   

Provision for loan losses

     525         340         170         255         0         1,290         725   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Pre-tax, pre-provision income

   $ 3,461       $ 2,095       $ 2,442       $ 2,755       $ 3,462       $ 10,753       $ 13,712