Farmers National Banc Corp. Reports Earnings for Second Quarter of 2024

Share Name	Share Symbol	Market	Type
Farmers National Banc Corporation	NASDAQ:FMNB	NASDAQ	Common Stock

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.03	0.20%	14.85	14.85	14.86	15.25	14.41	14.67	99,917	20:55:46

Farmers National Banc (NASDAQ:FMNB)
Intraday Stock Chart

Wednesday 24 July 2024

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Earnings per diluted share of $0.31 ($0.33 excluding certain items, non-GAAP) for the second quarter of 2024
166 consecutive quarters of profitability
Sequential net interest margin stabilization and expansion
Loan growth of $56.1 million, or 7.0% annualized, for the second quarter of 2024
Strong asset quality as non-performing loans to total loans were 0.40% at June 30, 2024

Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced net income of $11.8 million, or $0.31 per diluted share, for the three months ended June 30, 2024, compared to $15.0 million, or $0.40 per diluted share, for the three months ended June 30, 2023. Net income for the second quarter of 2024 included pretax items of $515,000 for the loss on the sale of investment securities and write downs on certain other assets held for sale. Excluding these items (non-GAAP), net income for the second quarter of 2024 was $12.2 million, or $0.33 per diluted share.

Kevin J. Helmick, President and CEO, stated, “Our second quarter financial results are encouraging as we experienced strong loan growth along with sequential improvement in net interest income. We are pleased that asset quality also continues to be a source of strength. Over the near term, we remain focused on supporting the financial needs of our communities, while ensuring the Company is well positioned to create long-term value for our shareholders.”

Balance Sheet

Total assets were $5.16 billion at June 30, 2024, up from $5.08 billion at March 31, 2024, and $5.08 billion at December 31, 2023. Loans increased to $3.24 billion at June 30, 2024 compared to $3.18 billion at March 31, 2024 and $3.20 billion at December 31, 2023. While loan growth accelerated sharply in the second quarter of 2024, the Company still anticipates total loan growth of approximately 1.5% - 2% in 2024, reflecting the challenging economic and interest rate environment, as well as the Company’s focus on maintaining excellent asset quality.

The Company had securities available for sale of $1.25 billion at June 30, 2024, compared to $1.27 billion at March 31, 2024, and $1.30 billion at December 31, 2023. Gross unrealized losses on the portfolio totaled $242.3 million at June 30, 2024, an increase from $234.2 million at March 31, 2024, and $217.1 million at December 31, 2023. The Company expects bond market volatility to continue in 2024 and anticipates that it will continue to reduce the size of the securities portfolio via runoff to optimize profitability and enhance liquidity.

Total deposits increased to $4.21 billion at June 30, 2024, up slightly from $4.20 billion at March 31, 2024, and $4.18 billion at December 31, 2023. Noninterest bearing deposits declined to $968.7 million at June 30, 2024, from $977.5 million at March 31, 2024, and $1.03 billion at December 31, 2023 even as growth in interest bearing deposits offset this decline. Customers continue to seek higher rates on their deposit balances but the pace of activity continues to slow.

Total stockholders’ equity was $396.7 million at June 30, 2024, compared to $397.0 million at March 31, 2024, and $404.4 million at December 31, 2023. The decline since December has been driven by an increase in the unrealized losses on investment securities offset by earnings net of dividend payments to shareholders.

Credit Quality

The Company’s non-performing loans increased slightly to $12.9 million at June 30, 20024, compared to $12.0 million at March 31, 2024, but were down from $15.1 million at December 31, 2023. Non-performing loans to total loans were 0.40% at June 30, 2024, 0.38% at March 31, 2024, and 0.47% at December 31, 2023. Non-performing assets to total assets were 0.25% at June 30, 2024, 0.24% at March 31, 2024, and 0.30% at December 31, 2023. The Company’s loans which were 30-89 days delinquent were $18.5 million at June 30, 2024, or 0.57% of total loans, compared to $16.7 million, or 0.52% of total loans, at December 31, 2023.

The provision for credit losses and unfunded commitments totaled $1.1 million for the three months ended June 30, 2024, compared to $25,000 for the three months ended June 30, 2023. The increased provision for credit losses was primarily due to loan growth of $56.1 million in the second quarter of 2024 compared to loan shrinkage of $2.9 million in the second quarter of 2023. Annualized net charge-offs as a percentage of average loans were 0.07% for the second quarter of 2024, compared to 0.10% for the second quarter of 2023. The allowance for credit losses to total loans was 1.05% at June 30, 2024, compared to 1.04% at March 31, 2024 and 1.08% at December 31, 2023.

Net Interest Income

Net interest income for the second quarter of 2024 was $32.1 million compared to $34.6 million in the second quarter of 2023. Average interest earning assets are down $5.4 million when comparing the second quarter of 2024 to the second quarter of 2023. The net interest margin has declined from 2.92% for the second quarter of 2023 to 2.71% for the second quarter of 2024. This decline in net interest margin was due to increased 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 runoff of deposit balances which are being replaced with more costly wholesale funding. Excluding acquisition marks and PPP interest, non-GAAP, the Company’s net interest margin was 2.51% in the second quarter of 2024 compared to 2.68% in the second quarter of 2023.

Noninterest Income

The Company recorded noninterest income of $9.6 million for the second quarter of 2024 compared to $9.4 million for the second quarter of 2023. This increase is due to increases in several categories of noninterest income offset by declines in other noninterest income and losses on the sale of securities.

Service charges on deposit accounts were $1.8 million for the second quarter of 2024 compared to $1.5 million for the same period 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. Bank owned life insurance income increased from $584,000 in the second quarter of 2023 to $652,000 in the second quarter of 2024 as crediting rates on the insurance policies continue to increase. Trust fees increased to $2.6 million in the second quarter of 2024 from $2.2 million in the second quarter of 2023 due to continued strong growth in this line of business. Losses on the sale of securities totaled $124,000 in the second quarter of 2024 compared to gains on the sale of securities of $13,000 during the second quarter of 2023. Other noninterest income declined from $463,000 in the second quarter of 2023 to $162,000 in the second quarter of 2024. The Company recorded write downs totaling $391,000 on other assets held for sale during the second quarter of 2024. No write downs occurred in the second quarter of 2023.

Noninterest Expense

The Company’s noninterest expense totaled $26.4 million for the three months ended June 30, 2024 compared to $26.4 million for the three months ended June 30, 2023. The second quarter of 2023 included $442,000 of merger related charges. There were no merger related expenses during the second quarter of 2024. Salaries and employee benefits were $14.6 million in the second quarter of 2024 compared to $13.6 million in the second 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 $309,000 to $1.2 million for the first three months of 2024 compared to $1.5 million for the first three months of 2023 due to lower FDIC premiums. Intangible amortization declined to $630,000 in the second quarter of 2024 from $1.2 million for the second quarter of 2023. This decrease was driven by accelerated amortization that occurred in the second quarter of 2023 that did not reoccur in 2024 and amortization from a prior acquisition running off. Other noninterest expense increased $545,000 in the second quarter of 2024 compared to the second quarter of 2023. Timing surrounding postage expense and ATM/debit card charges drove much of this increase.

Liquidity

The Company’s loan to deposit ratio was 77.0% at June 30, 2024 while the Company’s average deposit balance per account (excluding collateralized deposits) was $22,375 for the same period. At June 30, 2024, the Company had access to an additional $679.7 million of FHLB borrowing capacity, along with $238.1 million in available for sale securities that are not pledged.

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 June 30, 2024 are $3.7 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 Six Months Ended June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30, Percent

2024

2023

2024

2023

Change

Total interest income

56,846

55,054

55,069

54,229

52,804

111,900

104,037

7.6

Total interest expense

24,780

23,367

22,239

20,461

18,226

48,147

32,849

46.6

Net interest income

32,066

31,687

32,830

33,768

34,578

63,753

71,188

-10.4

Provision (credit) for credit losses

1,112

(449

)

286

243

663

8,624

-92.3

Noninterest income

9,606

8,357

12,156

9,831

9,449

17,963

19,874

-9.6

Acquisition related costs

452

268

442

4,755

-100.0

Other expense

26,403

27,039

26,520

27,448

25,944

53,442

52,353

2.1

Income before income taxes

14,157

13,454

17,728

15,640

17,616

27,611

25,330

9.0

Income taxes

2,374

2,214

3,151

2,326

2,650

4,588

3,289

39.5

Net income

11,783

11,240

14,577

13,314

14,966

23,023

22,041

4.5

Average diluted shares outstanding

37,487

37,479

37,426

37,379

37,320

37,480

37,624

Basic earnings per share

0.32

0.30

0.39

0.36

0.40

0.62

0.59

Diluted earnings per share

0.31

0.30

0.39

0.36

0.40

0.61

0.59

Cash dividends per share

0.17

0.34

Performance Ratios Net Interest Margin (Annualized)

2.71

2.70

2.78

2.86

2.92

2.70

3.00

Efficiency Ratio (Tax equivalent basis)

60.80

61.54

57.84

60.11

56.28

61.17

59.50

Return on Average Assets (Annualized)

0.93

0.90

1.17

1.06

1.18

0.91

0.87

Return on Average Equity (Annualized)

12.15

11.47

17.98

14.49

16.12

11.76

11.94

Dividends to Net Income

54.04

56.65

43.68

47.82

42.54

55.61

58.09

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

0.97

0.93

1.22

1.09

1.23

0.95

0.90

Return on Average Tangible Equity

23.74

21.88

43.77

30.29

33.55

22.79

25.05

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

2024

2023

Assets Cash and cash equivalents

180,987

148,630

103,658

93,923

116,063

Debt securities available for sale

1,246,730

1,270,149

1,299,701

1,210,736

1,316,878

Other investments

37,594

34,619

35,311

35,342

44,975

Loans held for sale

2,577

1,854

3,711

1,910

2,197

Loans

3,237,369

3,181,318

3,198,127

3,168,554

3,155,200

Less allowance for credit losses

33,991

33,159

34,440

34,753

34,957

Net Loans

3,203,378

3,148,159

3,163,687

3,133,801

3,120,243

Other assets

485,587

476,599

472,282

495,451

473,098

Total Assets

5,156,853

5,080,010

5,078,350

4,971,163

5,073,454

Liabilities and Stockholders' Equity Deposits Noninterest-bearing

968,693

977,475

1,026,630

1,039,524

1,084,232

Interest-bearing

3,237,142

3,220,650

3,150,756

3,217,869

3,165,381

Brokered time deposits

254,257

21,135

Total deposits

4,205,835

4,198,125

4,177,386

4,511,650

4,270,748

Other interest-bearing liabilities

494,890

433,777

443,663

88,550

388,437

Other liabilities

59,434

51,082

52,886

54,981

47,278

Total liabilities

4,760,159

4,682,984

4,673,935

4,655,181

4,706,463

Stockholders' Equity

396,694

397,026

404,415

315,982

366,991

Total Liabilities and Stockholders' Equity

5,156,853

5,080,010

5,078,350

4,971,163

5,073,454

Period-end shares outstanding

37,575

37,546

37,503

37,489

37,457

Book value per share

10.56

10.57

10.78

8.43

9.80

Tangible book value per share (Non-GAAP)*

5.53

5.52

5.71

3.33

4.67

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

For the Three Months Ended For the Six Months Ended June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,

Capital and Liquidity

2024

2023

2024

2023

Common Equity Tier 1 Capital Ratio (a)

10.95

10.88

10.61

10.37

10.25

Total Risk Based Capital Ratio (a)

14.39

14.38

14.06

13.83

13.76

Tier 1 Risk Based Capital Ratio (a)

11.44

11.37

11.10

10.86

10.74

Tier 1 Leverage Ratio (a)

8.26

8.19

8.02

7.84

7.68

Equity to Asset Ratio

7.69

7.82

7.96

6.36

7.23

Tangible Common Equity Ratio (b)

4.18

4.24

4.38

2.61

3.58

Net Loans to Assets

62.12

61.97

62.30

63.04

61.50

Loans to Deposits

76.97

75.78

76.56

70.23

73.88

Asset Quality Non-performing loans

12,870

11,951

15,063

18,368

17,956

Non-performing assets

12,975

12,215

15,321

18,522

18,167

Loans 30 - 89 days delinquent

18,546

14,069

16,705

13,314

12,321

Charged-off loans

661

1,282

972

525

971

1,943

1,440

Recoveries

271

172

139

172

369

370

Net Charge-offs

563

1,011

800

386

799

1,574

1,070

Annualized Net Charge-offs to Average Net Loans

0.07

0.13

0.10

0.05

0.10

0.07

Allowance for Credit Losses to Total Loans

1.05

1.04

1.08

1.10

1.11

Non-performing Loans to Total Loans

0.40

0.38

0.47

0.58

0.57

Loans 30 - 89 Days Delinquent to Total Loans

0.57

0.44

0.52

0.42

0.39

Allowance to Non-performing Loans

264.11

277.46

228.64

189.20

194.68

Non-performing Assets to Total Assets

0.25

0.24

0.30

0.37

0.36

(a) June 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 June 30, March 31, Dec. 31, Sept. 30, June 30, End of Period Loan Balances

2024

2023

Commercial real estate

1,348,675

1,339,372

1,335,806

1,295,847

1,284,974

Commercial

343,694

335,747

346,354

357,691

362,664

Residential real estate

849,561

836,252

843,697

842,729

849,533

HELOC

151,511

143,696

142,441

140,772

138,535

Consumer

268,606

256,846

259,784

261,136

260,326

Agricultural loans

265,035

260,425

261,288

261,738

250,807

Total, excluding net deferred loan costs

3,227,082

3,172,338

3,189,370

3,159,913

3,146,839

For the Three Months Ended End of Period Customer Deposit Balances June 30,2024 March 31,2024 Dec. 31,2023 Sept. 30,2023 June 30,2023 Noninterest-bearing demand

968,693

977,474

1,026,630

1,039,524

1,084,232

Interest-bearing demand

1,380,266

1,381,383

1,362,609

1,426,349

1,383,326

Money market

677,058

646,308

593,975

588,043

610,051

Savings

433,166

452,949

468,890

488,991

511,642

Certificate of deposit

746,652

740,011

725,282

714,486

660,362

Total customer deposits

4,205,835

4,198,125

4,177,386

4,257,393

4,249,613

For the Three Months Ended For the Six Months Ended June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30, Noninterest Income

2024

2023

2024

2023

Service charges on deposit accounts

1,846

1,583

1,677

1,712

1,501

3,429

2,933

Bank owned life insurance income, including death benefits

652

707

617

694

584

1,359

1,131

Trust fees

2,638

2,793

2,656

2,617

2,248

5,431

4,835

Insurance agency commissions

1,255

1,528

1,540

1,116

1,332

2,783

2,788

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

(124

)

(2,120

)

(624

)

(2,244

)

134

Retirement plan consulting fees

330

334

357

360

382

664

689

Investment commissions

478

432

589

520

476

910

869

Net gains on sale of loans

417

297

1,280

395

406

714

716

Other mortgage banking fee income (loss), net

192

125

139

185

234

317

387

Debit card and EFT fees

1,760

1,567

1,697

1,763

1,810

3,327

3,599

Other noninterest income

162

1,111

1,585

1,093

463

1,273

1,793

Total Noninterest Income

9,606

8,357

12,156

9,831

9,449

17,963

19,874

For the Three Months Ended For the Six Months Ended June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30, Noninterest Expense

2024

2023

2024

2023

Salaries and employee benefits

14,558

15,069

14,871

14,233

13,625

29,627

28,270

Occupancy and equipment

3,815

3,730

3,896

3,810

3,859

7,545

7,728

FDIC insurance and state and local taxes

1,185

1,345

1,484

1,648

1,494

2,530

2,716

Professional fees

1,194

1,254

1,004

1,043

1,190

2,448

2,304

Merger related costs

452

268

442

4,755

Advertising

445

431

414

492

478

876

887

Intangible amortization

630

688

578

725

1,222

1,318

2,131

Core processing charges

1,099

1,135

1,057

1,274

1,144

2,234

2,308

Other noninterest expenses

3,477

3,387

3,216

4,223

2,932

6,864

6,009

Total Noninterest Expense

26,403

27,039

26,972

27,716

26,386

53,442

57,108

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

3,215,141

46,590

5.80

3,144,461

42,422

5.40

Taxable securities

1,118,598

6,813

2.44

1,157,284

6,654

2.30

Tax-exempt securities (2)

379,761

2,973

3.13

415,003

3,278

3.16

Other investments

33,441

322

3.85

41,361

594

5.74

Federal funds sold and other

78,591

743

3.78

72,801

551

3.03

Total earning assets

4,825,532

57,441

4.76

4,830,910

53,499

4.43

Nonearning assets

218,984

225,131

Total assets

5,044,516

5,056,041

INTEREST-BEARING LIABILITIES Time deposits

744,422

7,233

3.89

646,782

4,525

2.80

Brokered time deposits

0.00

59,402

686

4.62

Savings deposits

1,102,443

4,117

1.49

1,133,371

2,402

0.85

Demand deposits - interest bearing

1,391,767

8,810

2.53

1,428,409

6,878

1.93

Total interest-bearing deposits

3,238,632

20,160

2.49

3,267,964

14,491

1.77

Short term borrowings

299,543

3,585

4.79

213,549

2,727

5.11

Long term borrowings

88,834

1,035

4.66

88,382

1,008

4.56

Total borrowed funds

388,377

4,620

4.76

301,931

3,735

4.95

Total interest-bearing liabilities

3,627,009

24,780

2.73

3,569,895

18,226

2.04

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

972,290

1,067,605

Other liabilities

57,336

47,120

Stockholders' equity

387,881

371,421

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

5,044,516

5,056,041

Net interest income and interest rate spread

32,661

2.03

35,273

2.39

Net interest margin

2.71

2.92

(1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2024, adjustments of $77 thousand and $518 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2023, adjustments of $91 thousand and $604 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. Six Months Ended Six Months Ended June 30, 2024 June 30, 2023 AVERAGE YIELD/ AVERAGE YIELD/ BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1) EARNING ASSETS Loans (2)

3,198,239

91,686

5.73

3,140,500

83,365

5.31

Taxable securities

1,109,972

13,227

2.38

1,164,400

13,204

2.27

Tax-exempt securities (2)

393,918

6,182

3.14

426,743

6,797

3.19

Other investments

33,924

684

4.03

38,976

970

4.98

Federal funds sold and other

75,174

1,369

3.64

77,870

1,161

2.98

Total earning assets

4,811,227

113,148

4.70

4,848,489

105,497

4.35

Nonearning assets

223,014

221,955

Total assets

5,034,241

5,070,444

INTEREST-BEARING LIABILITIES Time deposits

738,159

14,281

3.87

618,637

7,864

2.54

Brokered time deposits

0.00

144,747

3,007

4.15

Savings deposits

1,093,511

7,716

1.41

1,143,539

4,356

0.76

Demand deposits - interest bearing

1,371,058

16,553

2.41

1,423,211

11,971

1.68

Total interest-bearing deposits

3,202,728

38,550

2.41

3,330,134

27,198

1.63

Short term borrowings

312,167

7,524

4.82

147,436

3,648

4.95

Long term borrowings

88,778

2,073

4.67

88,326

2,003

4.54

Total borrowed funds

400,945

9,597

4.79

235,762

5,651

4.79

Total interest-bearing liabilities

3,603,673

48,147

2.67

3,565,896

32,849

1.84

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

983,728

1,087,403

Other liabilities

55,125

47,996

Stockholders' equity

391,715

369,149

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

5,034,241

5,070,444

Net interest income and interest rate spread

65,001

2.03

72,648

2.51

Net interest margin

2.70

3.00

(1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2024, adjustments of $156 thousand and $1.1 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2023, adjustments of $178 thousand and $1.3 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 Six Months Ended June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,

2024

2023

2024

2023

Total Assets

5,156,853

5,080,010

5,078,350

4,971,163

5,073,454

5,156,853

5,073,454

Less Goodwill and other intangibles

188,970

189,599

190,288

191,326

192,052

188,970

192,052

Tangible Assets

4,967,883

4,890,411

4,888,062

4,779,837

4,881,402

4,967,883

4,881,402

Average Assets

5,044,516

5,023,966

4,980,314

5,058,969

5,070,444

5,034,241

5,070,444

Less average Goodwill and other intangibles

189,382

190,040

191,108

191,804

192,972

189,712

193,169

Average Tangible Assets

4,855,134

4,833,926

4,789,206

4,867,165

4,877,472

4,844,529

4,877,275

Reconciliation of Common Stockholders' Equity to Tangible Common Equity For the Three Months Ended For the Six Months Ended June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,

2024

2023

2024

2023

Stockholders' Equity

396,694

397,026

404,415

315,982

366,991

396,694

366,991

Less Goodwill and other intangibles

188,970

189,599

190,288

191,326

192,052

188,970

192,052

Tangible Common Equity

207,724

207,427

214,127

124,656

174,939

207,724

174,939

Average Stockholders' Equity

387,881

395,549

324,332

367,600

371,421

391,715

369,149

Less average Goodwill and other intangibles

189,382

190,040

191,108

191,804

192,972

189,712

193,169

Average Tangible Common Equity

198,499

205,509

133,224

175,796

178,449

202,003

175,980

Reconciliation of Net Income, Less Merger and Certain Items For the Three Months Ended For the Six Months Ended June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,

2024

2023

2024

2023

Net income

11,783

11,240

14,577

13,314

14,966

23,023

22,041

Acquisition related costs - after tax

358

234

354

3,803

Acquisition related provision - after tax

6,077

Employee severence - after tax

798

Lawsuit settlement expense - after tax

620

Net (gain) on loan sale - after tax

(723

)

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

407

1,675

171

604

)

2,082

(77

)

Net income - Adjusted

12,190

12,915

15,181

14,772

15,315

25,105

31,844

Diluted EPS excluding merger and certain items

0.33

0.34

0.41

0.40

0.41

0.67

0.85

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

0.97

1.03

1.22

1.17

1.21

1.00

1.26

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

12.57

13.06

18.72

16.07

16.49

12.82

17.25

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

24.56

25.14

45.58

33.61

34.33

24.86

36.19

Efficiency ratio excluding certain items For the Three Months Ended For the Six Months Ended June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,

2024

2023

2024

2023

Net interest income, tax equated

32,661

32,341

33,494

34,448

35,273

65,001

72,648

Noninterest income

9,606

8,357

12,156

9,831

9,449

17,963

19,874

Net (gain) on loan sale

(915

)

Net loss (gain) on asset/security sales

515

2,120

217

764

)

2,635

(97

)

Net interest income and noninterest income adjusted

42,782

42,818

44,952

45,043

44,716

85,599

92,425

Noninterest expense less intangible amortization

25,773

26,351

26,394

26,991

25,163

52,124

54,976

Legal settlement expense

785

Employee severence

1,010

Acquisition related costs

452

268

442

4,755

Noninterest expense adjusted

25,773

26,351

24,932

25,938

24,721

52,124

50,221

Efficiency ratio excluding certain items

60.24

61.54

55.46

57.58

55.28

60.89

54.34

Net interest margin excluding acquisition marks and PPP interest and fees For the Three Months Ended For the Six Months Ended June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,

2024

2023

2024

2023

Net interest income, tax equated

32,661

32,341

33,494

34,448

35,273

65,001

72,648

Acquisition marks

2,391

2,370

2,475

2,959

2,884

4,761

5,512

PPP interest and fees

Adjusted and annualized net interest income

121,076

119,880

124,072

125,952

129,548

120,476

134,266

Average earning assets

4,825,532

4,796,922

4,816,409

4,820,888

4,830,910

4,811,227

4,848,489

Less PPP average balances

171

213

229

247

277

192

271

Adjusted average earning assets

4,825,361

4,796,709

4,816,180

4,820,641

4,830,633

4,811,035

4,848,218

Net interest margin excluding marks and PPP interest and fees

2.51

2.50

2.58

2.61

2.68

2.50

2.77

View source version on businesswire.com: https://www.businesswire.com/news/home/20240723596416/en/

Farmers National Banc Corp. Kevin J. Helmick, President and CEO 330.533.3341 Email: exec@farmersbankgroup.com

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