Farmers National Banc Corp. Announces 2018 Third Quarter Financial Results
- Record net income for the quarter of $8.1 million, 35% higher than the same quarter in
2017
- 143 consecutive quarters of profitability
- Annualized return on average assets was 1.42% and annualized return on average equity 12.80% for
the quarter ended September 30, 2018
- 9% loan growth since September 30, 2017
- Non-performing assets to total assets remain at low levels, 0.40% at September 30, 2018
Farmers National Banc Corp. (Farmers) (NASDAQ: FMNB) today reported financial results for the three months ended September 30,
2018.
Net income for the three months ended September 30, 2018 was $8.1 million, or $0.29 per diluted share, which compares to $6.0
million, or $0.22 per diluted share, for the three months ended September 30, 2017 and $8.1 million, or $0.29 per diluted share,
for the linked quarter. Annualized return on average assets and return on average equity were 1.42% and 12.80%, respectively, for
the three month period ending September 30, 2018, compared to 1.12% and 10.15% for the same three month period in 2017, and 1.47%
and 13.28% for the linked quarter. Farmers’ return on average tangible equity (Non-GAAP) was 15.70% for the quarter ended September
30, 2018 compared to 12.69% for the same quarter in 2017 and 16.24% for the linked quarter.
Net income for the nine months ended September 30, 2018 was $23.9 million, or $0.85 per diluted share, compared to $17.5 million
or $0.64 per diluted share for the same nine month period in 2017. Return on average assets and return on average equity were 1.45%
and 13.00%, respectively, for the nine months ended September 30, 2018, compared to 1.14% and 10.41% for the same period in 2017.
Farmers’ return on average tangible equity (Non-GAAP) was 15.86% for the nine month period ended September 30, 2018 compared to
12.98% for the same period in 2017.
On December 22, 2017, H.R.1, known as the “Tax Cuts and Jobs Act,” was signed into law. H.R.1, among other things, reduced
the corporate income tax rate to 21% effective January 1, 2018. As a result of passage of the new tax law, Farmers effective
tax rate decreased from 25.5% for the nine months ended September 30, 2017 to 14.7% for the nine months ended September 30, 2018.
It is important to note that also as a result of the new tax law, Farmers determined that its net deferred tax assets needed
to be reduced in the fourth quarter of 2017 by approximately $1.8 million, representing an impact on earnings per share of
approximately $0.06 per diluted share for that fourth quarter, based on that quarter’s weighted average diluted shares outstanding
of approximately 27.5 million.
Kevin J. Helmick, President and CEO, stated, “We are pleased to report another strong quarter which is the result of the
successful execution of our strategic plan, continued strong loan growth, higher levels of noninterest income and a lower effective
income tax rate.”
2018 Third Quarter Financial Highlights
- Loan growth
Total loans were $1.69 billion at September 30, 2018, compared to $1.55 billion at September 30, 2017, representing an increase
of 9.0%. 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. The increase in loans has occurred in the commercial and commercial real
estate, residential real estate and agricultural loan portfolios. Loans now comprise 78.8% of the Bank's average earning assets
for the quarter ended September 30, 2018, an improvement compared to 77.6% for the same period in 2017. This improvement, along
with the interest rate environment, has resulted in a 15.4% increase in loan income in the third quarter of 2018 compared to the
same quarter in 2017.
- Loan quality
Non-performing assets to total assets remain at a low level, currently at 0.40%. Early stage delinquencies also continue to
remain at low levels, at $10.6 million, or 0.63% of total loans, at September 30, 2018. Net charge-offs for the current quarter
were $338 thousand, compared to $592 thousand in the same quarter in 2017 and annualized net charge-offs as a percentage of
average net loans outstanding is only 0.08% for the quarter ended September 30, 2018. Lending to the energy sector is
insignificant and less than 1% of the loan portfolio.
- Net interest margin
The net interest margin for the three months ended September 30, 2018 was 3.86%, a 10 basis points decrease from the quarter
ended September 30, 2017. In comparing the third quarter of 2018 to the same period in 2017, asset yields increased 21 basis
points, while the cost of interest-bearing liabilities increased 41 basis points. Most of this increase was the result of higher
rates paid on short-term borrowings and time deposits, consistent with increases in the federal funds sold rate. The net interest
margin is impacted by the additional accretion as a result of the discounted loan portfolios acquired in the previous mergers,
which increased the net interest margin by 4 and 3 basis points for the quarters ended September 30, 2018 and 2017,
respectively.
- Noninterest income
Noninterest income increased 6.9% to $6.5 million for the quarter ended September 30, 2018 compared to $6.1 million in the same
quarter of 2017. Trust fees increased $219 thousand or 13.6% in comparing the third quarter of 2018 to the same quarter in 2017.
In the third quarter of 2018 investment commissions increased $89 thousand or 48.4%, service charges on deposit accounts
increased $74 thousand or 6.9% and net gains on sale of loans increased $46 thousand or 6.1% from the third quarter in 2017.
These increases were offset by a drop in other operating income of $70 thousand or 15%.
- Noninterest expenses
Farmers has remained committed to managing its level of noninterest expenses. Total noninterest expenses for the third quarter of
2018 increased 2.5% to $16.2 million compared to $15.8 million in the same quarter in 2017, primarily a result of increases in
other operating expenses of $397 thousand which included $150 thousand in captive insurance losses and core processing charges of
$76 thousand, offset by a $270 thousand decrease in merger related costs. It is important to note that annualized noninterest
expenses measured as a percentage of quarterly average assets decreased from 2.96% in the third quarter of 2017 to 2.85% in the
third quarter of 2018.
- Efficiency ratio
The efficiency ratio for the quarter ended September 30, 2018 improved to 58.70% compared to 59.93% for the same quarter in 2017.
The main factors leading to this improvement were the increase in net interest income and noninterest income and a lower level of
noninterest expenses relative to average assets as explained in the preceding paragraphs.
2018 Outlook
Mr. Helmick added, “We are encouraged by our financial results for the first three quarters of 2018 and look to use this
momentum to sustain strong performance for the remainder of the year. As always, we will remain focused on delivering for the
businesses, families and communities we serve.”
Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with
$2.3 billion in banking assets. Farmers National Banc Corp.’s wholly-owned subsidiaries are comprised of The Farmers National Bank
of Canfield, a full-service national bank engaged in commercial and retail banking with 41 banking locations in Mahoning, Trumbull,
Columbiana, Stark, Wayne, Medina and Cuyahoga Counties in Ohio and Beaver County in Pennsylvania, Farmers Trust Company, which
operates four trust offices and offers services in the same geographic markets, and National Associates, Inc. Total wealth
management assets under care at September 30, 2018 are $2.7 billion. Farmers National Insurance, LLC and Bowers Insurance Agency,
Inc., wholly-owned subsidiaries of The Farmers National Bank of Canfield, offer a variety of insurance products.
Non-GAAP Disclosure
This press release includes disclosures of Farmers’ tangible common equity ratio, return on average tangible assets, return on
average tangible equity and net income excluding costs related to acquisition activities, which are financial measures not prepared
in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a
numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts
that are required to be disclosed by GAAP. Farmers believes that these non-GAAP financial measures provide both management and
investors a more complete understanding of the underlying operational results and trends and Farmers’ marketplace performance. The
presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared
in accordance with GAAP. The reconciliations of non-GAAP financial measures are included in the tables following Consolidated
Financial Highlights below.
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995, including statements about Farmers’ financial condition, results of operations, asset quality trends and profitability.
Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts
regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Forward-looking
statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, as well as any
statements related to future expectations of performance or conditional verbs, such as “will,” “would,” “should,” “could” or “may.”
Farmers’ actual results and financial condition may differ, possibly materially, from the anticipated results and financial
condition indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from
those described in the forward-looking statements can be found in Farmers’ Annual Report on Form 10-K for the year ended December
31, 2017, which has been filed with the Securities and Exchange Commission (SEC) and is available on Farmers’ website (www.farmersbankgroup.com)
and on the SEC’s website (www.sec.gov).
Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s
views as of any subsequent date. Farmers does not undertake any obligation to update the forward-looking statements to reflect the
impact of circumstances or events that may arise after the date of the forward-looking statements.
| |
| Farmers National Banc Corp. and Subsidiaries |
| Consolidated Financial Highlights |
| (Amounts in thousands, except per share results)
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated Statements of Income |
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|
Sept. 30, |
|
June 30, |
|
March 31, |
|
Dec. 31, |
|
Sept. 30, |
|
Sept. 30, |
|
Sept. 30, |
|
Percent |
|
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
2018 |
|
2017 |
|
|
Change |
| Total interest income |
|
$ |
23,563 |
|
|
$ |
22,474 |
|
|
$ |
21,282 |
|
|
$ |
21,084 |
|
|
$ |
20,551 |
|
|
$ |
67,319 |
|
|
$ |
59,443 |
|
|
13.2 |
% |
| Total interest expense |
|
|
3,644 |
|
|
|
2,912 |
|
|
|
2,336 |
|
|
|
2,017 |
|
|
|
1,876 |
|
|
|
8,892 |
|
|
|
4,864 |
|
|
82.8 |
% |
| Net interest income |
|
|
19,919 |
|
|
|
19,562 |
|
|
|
18,946 |
|
|
|
19,067 |
|
|
|
18,675 |
|
|
|
58,427 |
|
|
|
54,579 |
|
|
7.1 |
% |
| Provision for loan losses |
|
|
950 |
|
|
|
750 |
|
|
|
775 |
|
|
|
400 |
|
|
|
950 |
|
|
|
2,475 |
|
|
|
2,950 |
|
|
-16.1 |
% |
| Noninterest income |
|
|
6,478 |
|
|
|
6,306 |
|
|
|
6,010 |
|
|
|
6,051 |
|
|
|
6,058 |
|
|
|
18,794 |
|
|
|
18,000 |
|
|
4.4 |
% |
| Acquisition related costs |
|
|
0 |
|
|
|
0 |
|
|
|
25 |
|
|
|
88 |
|
|
|
270 |
|
|
|
25 |
|
|
|
436 |
|
|
-94.3 |
% |
| Other expense |
|
|
16,180 |
|
|
|
15,458 |
|
|
|
15,071 |
|
|
|
15,311 |
|
|
|
15,521 |
|
|
|
46,709 |
|
|
|
45,732 |
|
|
2.1 |
% |
| Income before income taxes |
|
|
9,267 |
|
|
|
9,660 |
|
|
|
9,085 |
|
|
|
9,319 |
|
|
|
7,992 |
|
|
|
28,012 |
|
|
|
23,461 |
|
|
19.4 |
% |
| Income taxes |
|
|
1,183 |
|
|
|
1,587 |
|
|
|
1,359 |
|
|
|
4,084 |
|
|
|
2,009 |
|
|
|
4,129 |
|
|
|
5,985 |
|
|
-31.0 |
% |
| Net income |
|
$ |
8,084 |
|
|
$ |
8,073 |
|
|
$ |
7,726 |
|
|
$ |
5,235 |
|
|
$ |
5,983 |
|
|
$ |
23,883 |
|
|
$ |
17,476 |
|
|
36.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average basic shares outstanding |
|
|
27,695 |
|
|
|
27,641 |
|
|
|
27,918 |
|
|
|
27,941 |
|
|
|
27,654 |
|
|
|
27,639 |
|
|
|
27,437 |
|
|
|
| Basic earnings per share |
|
|
0.29 |
|
|
|
0.29 |
|
|
|
0.28 |
|
|
|
0.19 |
|
|
|
0.22 |
|
|
|
0.86 |
|
|
|
0.64 |
|
|
|
| Diluted earnings per share |
|
|
0.29 |
|
|
|
0.29 |
|
|
|
0.28 |
|
|
|
0.19 |
|
|
|
0.22 |
|
|
|
0.85 |
|
|
|
0.64 |
|
|
|
| Cash dividends |
|
|
2,222 |
|
|
|
1,935 |
|
|
|
1,935 |
|
|
|
1,653 |
|
|
|
1,653 |
|
|
|
6,092 |
|
|
|
4,359 |
|
|
|
| Cash dividends per share |
|
|
0.08 |
|
|
|
0.07 |
|
|
|
0.07 |
|
|
|
0.06 |
|
|
|
0.06 |
|
|
|
0.22 |
|
|
|
0.16 |
|
|
|
| Performance Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Interest Margin (Annualized) |
|
|
3.86 |
% |
|
|
3.93 |
% |
|
|
3.92 |
% |
|
|
3.98 |
% |
|
|
3.96 |
% |
|
|
3.90 |
% |
|
|
4.01 |
% |
|
|
| Efficiency Ratio (Tax equivalent basis) |
|
|
58.70 |
% |
|
|
57.31 |
% |
|
|
57.98 |
% |
|
|
59.13 |
% |
|
|
59.93 |
% |
|
|
58.00 |
% |
|
|
59.85 |
% |
|
|
| Return on Average Assets (Annualized) |
|
|
1.42 |
% |
|
|
1.47 |
% |
|
|
1.45 |
% |
|
|
0.96 |
% |
|
|
1.12 |
% |
|
|
1.45 |
% |
|
|
1.14 |
% |
|
|
| Return on Average Equity (Annualized) |
|
|
12.80 |
% |
|
|
13.28 |
% |
|
|
13.03 |
% |
|
|
8.60 |
% |
|
|
10.15 |
% |
|
|
13.00 |
% |
|
|
10.41 |
% |
|
|
| Dividends to Net Income |
|
|
27.49 |
% |
|
|
23.97 |
% |
|
|
25.05 |
% |
|
|
31.58 |
% |
|
|
27.63 |
% |
|
|
25.51 |
% |
|
|
24.94 |
% |
|
|
| Other Performance Ratios (Non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on Average Tangible Assets |
|
|
1.46 |
% |
|
|
1.50 |
% |
|
|
1.46 |
% |
|
|
0.99 |
% |
|
|
1.15 |
% |
|
|
1.47 |
% |
|
|
1.16 |
% |
|
|
| Return on Average Tangible Equity |
|
|
15.70 |
% |
|
|
16.24 |
% |
|
|
15.84 |
% |
|
|
10.69 |
% |
|
|
12.69 |
% |
|
|
15.86 |
% |
|
|
12.98 |
% |
|
|
| Return on Average Tangible Equity excluding acquisition costs and deferred tax asset
adjustments |
|
|
15.70 |
% |
|
|
16.24 |
% |
|
|
15.88 |
% |
|
|
14.25 |
% |
|
|
13.09 |
% |
|
|
15.87 |
% |
|
|
13.30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Consolidated Statements of Financial Condition |
| |
|
|
Sept. 30, |
|
June 30, |
|
March 31, |
|
Dec. 31, |
|
Sept. 30, |
|
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
| Assets |
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
75,635 |
|
|
$ |
76,623 |
|
|
$ |
52,149 |
|
|
$ |
57,614 |
|
|
$ |
84,006 |
|
| Securities available for sale |
|
|
389,996 |
|
|
|
388,890 |
|
|
|
384,396 |
|
|
|
392,937 |
|
|
|
394,853 |
|
| Equity securities |
|
|
6,892 |
|
|
|
6,344 |
|
|
|
6,009 |
|
|
|
5,579 |
|
|
|
5,030 |
|
|
|
|
|
|
|
|
|
|
|
|
| Loans held for sale |
|
|
1,428 |
|
|
|
1,987 |
|
|
|
399 |
|
|
|
272 |
|
|
|
502 |
|
| Loans |
|
|
1,691,532 |
|
|
|
1,639,191 |
|
|
|
1,599,339 |
|
|
|
1,577,381 |
|
|
|
1,551,437 |
|
| Less allowance for loan losses |
|
|
13,377 |
|
|
|
12,764 |
|
|
|
12,550 |
|
|
|
12,315 |
|
|
|
12,104 |
|
| Net Loans |
|
|
1,678,155 |
|
|
|
1,626,427 |
|
|
|
1,586,789 |
|
|
|
1,565,066 |
|
|
|
1,539,333 |
|
|
|
|
|
|
|
|
|
|
|
|
| Other assets |
|
|
140,572 |
|
|
|
137,668 |
|
|
|
137,775 |
|
|
|
137,601 |
|
|
|
138,301 |
|
| Total Assets |
|
$ |
2,292,678 |
|
|
$ |
2,237,939 |
|
|
$ |
2,167,517 |
|
|
$ |
2,159,069 |
|
|
$ |
2,162,025 |
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
| Deposits |
|
|
|
|
|
|
|
|
|
|
| Noninterest-bearing |
|
$ |
426,689 |
|
|
$ |
420,991 |
|
|
$ |
402,499 |
|
|
$ |
412,346 |
|
|
$ |
413,991 |
|
| Interest-bearing |
|
|
1,332,022 |
|
|
|
1,229,346 |
|
|
|
1,234,660 |
|
|
|
1,192,373 |
|
|
|
1,195,533 |
|
| Total deposits |
|
|
1,758,711 |
|
|
|
1,650,337 |
|
|
|
1,637,159 |
|
|
|
1,604,719 |
|
|
|
1,609,524 |
|
| Other interest-bearing liabilities |
|
|
270,273 |
|
|
|
322,565 |
|
|
|
274,816 |
|
|
|
296,559 |
|
|
|
295,270 |
|
| Other liabilities |
|
|
14,905 |
|
|
|
17,527 |
|
|
|
14,302 |
|
|
|
15,717 |
|
|
|
19,348 |
|
| Total liabilities |
|
|
2,043,889 |
|
|
|
1,990,429 |
|
|
|
1,926,277 |
|
|
|
1,916,995 |
|
|
|
1,924,142 |
|
| Stockholders' Equity |
|
|
248,789 |
|
|
|
247,510 |
|
|
|
241,240 |
|
|
|
242,074 |
|
|
|
237,883 |
|
|
Total Liabilities and Stockholders' Equity
|
|
$ |
2,292,678 |
|
|
$ |
2,237,939 |
|
|
$ |
2,167,517 |
|
|
$ |
2,159,069 |
|
|
$ |
2,162,025 |
|
|
|
|
|
|
|
|
|
|
|
|
| Period-end shares outstanding |
|
|
27,777 |
|
|
|
27,641 |
|
|
|
27,641 |
|
|
|
27,544 |
|
|
|
27,544 |
|
| Book value per share |
|
$ |
8.96 |
|
|
$ |
8.95 |
|
|
$ |
8.73 |
|
|
$ |
8.79 |
|
|
$ |
8.64 |
|
| Tangible book value per share (Non-GAAP)* |
|
|
7.36 |
|
|
|
7.34 |
|
|
|
7.10 |
|
|
|
7.14 |
|
|
|
6.98 |
|
|
|
|
|
|
|
|
|
|
|
|
| * Tangible book value per share is calculated by dividing tangible
common equity by average outstanding shares |
|
|
|
|
|
|
|
|
|
|
|
| Capital and Liquidity |
|
|
|
|
|
|
|
|
|
|
| Common Equity Tier 1 Capital Ratio (a) |
|
|
12.09 |
% |
|
|
12.11 |
% |
|
|
12.06 |
% |
|
|
11.86 |
% |
|
|
12.00 |
% |
| Total Risk Based Capital Ratio (a) |
|
|
12.84 |
% |
|
|
12.97 |
% |
|
|
12.94 |
% |
|
|
12.73 |
% |
|
|
12.86 |
% |
| Tier 1 Risk Based Capital Ratio (a) |
|
|
12.19 |
% |
|
|
12.24 |
% |
|
|
12.19 |
% |
|
|
11.99 |
% |
|
|
12.13 |
% |
| Tier 1 Leverage Ratio (a) |
|
|
9.75 |
% |
|
|
9.81 |
% |
|
|
9.68 |
% |
|
|
9.50 |
% |
|
|
9.70 |
% |
| Equity to Asset Ratio |
|
|
10.85 |
% |
|
|
11.06 |
% |
|
|
11.13 |
% |
|
|
11.21 |
% |
|
|
11.00 |
% |
| Tangible Common Equity Ratio |
|
|
9.09 |
% |
|
|
9.25 |
% |
|
|
9.24 |
% |
|
|
9.31 |
% |
|
|
9.08 |
% |
| Net Loans to Assets |
|
|
73.20 |
% |
|
|
72.68 |
% |
|
|
73.21 |
% |
|
|
72.49 |
% |
|
|
71.20 |
% |
| Loans to Deposits |
|
|
96.18 |
% |
|
|
99.32 |
% |
|
|
97.69 |
% |
|
|
98.30 |
% |
|
|
96.39 |
% |
| Asset Quality |
|
|
|
|
|
|
|
|
|
|
| Non-performing loans |
|
$ |
9,222 |
|
|
$ |
8,406 |
|
|
$ |
7,893 |
|
|
$ |
7,695 |
|
|
$ |
6,900 |
|
| Other Real Estate Owned |
|
|
0 |
|
|
|
0 |
|
|
|
59 |
|
|
|
171 |
|
|
|
219 |
|
| Non-performing assets |
|
|
9,222 |
|
|
|
8,406 |
|
|
|
7,952 |
|
|
|
7,866 |
|
|
|
7,119 |
|
| Loans 30 - 89 days delinquent |
|
|
10,626 |
|
|
|
10,636 |
|
|
|
6,973 |
|
|
|
10,191 |
|
|
|
8,680 |
|
| Charged-off loans |
|
|
544 |
|
|
|
777 |
|
|
|
782 |
|
|
|
809 |
|
|
|
809 |
|
| Recoveries |
|
|
207 |
|
|
|
241 |
|
|
|
242 |
|
|
|
620 |
|
|
|
217 |
|
| Net Charge-offs |
|
|
337 |
|
|
|
536 |
|
|
|
540 |
|
|
|
189 |
|
|
|
592 |
|
| Annualized Net Charge-offs to |
|
|
|
|
|
|
|
|
|
|
| Average Net Loans Outstanding |
|
|
0.08 |
% |
|
|
0.13 |
% |
|
|
0.14 |
% |
|
|
0.05 |
% |
|
|
0.16 |
% |
| Allowance for Loan Losses to Total Loans |
|
|
0.79 |
% |
|
|
0.78 |
% |
|
|
0.78 |
% |
|
|
0.78 |
% |
|
|
0.78 |
% |
| Non-performing Loans to Total Loans |
|
|
0.55 |
% |
|
|
0.51 |
% |
|
|
0.49 |
% |
|
|
0.49 |
% |
|
|
0.44 |
% |
| Allowance to Non-performing Loans |
|
|
145.06 |
% |
|
|
151.84 |
% |
|
|
159.00 |
% |
|
|
160.04 |
% |
|
|
175.42 |
% |
| Non-performing Assets to Total Assets |
|
|
0.40 |
% |
|
|
0.38 |
% |
|
|
0.37 |
% |
|
|
0.36 |
% |
|
|
0.33 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) September 30, 2018 ratio is estimated
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
|
|
Reconciliation of Total Assets to Tangible Assets
|
|
|
|
Sept. 30, |
|
June 30, |
|
March 31, |
|
Dec. 31, |
|
Sept. 30, |
|
Sept. 30, |
|
Sept. 30, |
|
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
2018 |
|
2017 |
| Total Assets |
|
$ |
2,292,678 |
|
|
$ |
2,237,939 |
|
$ |
2,167,517 |
|
$ |
2,159,069 |
|
|
$ |
2,162,025 |
|
$ |
2,292,678 |
|
$ |
2,162,025 |
| Less Goodwill and other intangibles |
|
|
44,305 |
|
|
|
44,661 |
|
|
45,015 |
|
|
45,369 |
|
|
|
45,755 |
|
|
44,305 |
|
|
45,755 |
| Tangible Assets |
|
$ |
2,248,373 |
|
|
$ |
2,193,278 |
|
$ |
2,122,502 |
|
$ |
2,113,700 |
|
|
$ |
2,116,270 |
|
$ |
2,248,373 |
|
$ |
2,116,270 |
| Average Assets |
|
|
2,255,049 |
|
|
|
2,199,960 |
|
|
2,162,706 |
|
|
2,158,895 |
|
|
|
2,118,170 |
|
|
2,206,379 |
|
|
2,056,800 |
| Less average Goodwill and other intangibles |
|
|
44,541 |
|
|
|
44,893 |
|
|
45,248 |
|
|
45,622 |
|
|
|
45,263 |
|
|
44,891 |
|
|
44,986 |
| Average Tangible Assets |
|
$ |
2,210,508 |
|
|
$ |
2,155,067 |
|
$ |
2,117,458 |
|
$ |
2,113,273 |
|
|
$ |
2,072,907 |
|
$ |
2,161,488 |
|
$ |
2,011,814 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended |
| Reconciliation of Common Stockholders' Equity to Tangible
Common Equity |
|
|
|
Sept. 30, |
|
June 30, |
|
March 31, |
|
Dec. 31, |
|
Sept. 30, |
|
Sept. 30, |
|
Sept. 30, |
|
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
2018 |
|
2017 |
| Stockholders' Equity |
|
$ |
248,789 |
|
|
$ |
247,510 |
|
$ |
241,240 |
|
$ |
242,074 |
|
|
$ |
237,883 |
|
$ |
248,789 |
|
$ |
237,883 |
| Less Goodwill and other intangibles |
|
|
44,305 |
|
|
|
44,661 |
|
|
45,015 |
|
|
45,369 |
|
|
|
45,755 |
|
|
44,305 |
|
|
45,755 |
| Tangible Common Equity |
|
$ |
204,484 |
|
|
$ |
202,849 |
|
$ |
196,225 |
|
$ |
196,705 |
|
|
$ |
192,128 |
|
$ |
204,484 |
|
$ |
192,128 |
| Average Stockholders' Equity |
|
|
250,503 |
|
|
|
243,792 |
|
|
240,387 |
|
|
241,554 |
|
|
|
233,843 |
|
|
245,691 |
|
|
224,496 |
| Less average Goodwill and other intangibles |
|
|
44,541 |
|
|
|
44,893 |
|
|
45,248 |
|
|
45,622 |
|
|
|
45,263 |
|
|
44,891 |
|
|
44,986 |
| Average Tangible Common Equity |
|
$ |
205,962 |
|
|
$ |
198,899 |
|
$ |
195,139 |
|
$ |
195,932 |
|
|
$ |
188,580 |
|
$ |
200,800 |
|
$ |
179,510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of Net Income, Excluding Acquisition Related Costs and
Deferred Tax Asset Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended |
|
|
For the Three Months Ended |
|
|
|
Sept. 30, |
|
June 30, |
|
March 31, |
|
Dec. 31, |
|
Sept. 30, |
|
Sept. 30, |
|
Sept. 30, |
|
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
2018 |
|
2017 |
| Net income |
|
$ |
8,084 |
|
|
$ |
8,073 |
|
$ |
7,726 |
|
$ |
5,235 |
|
|
$ |
5,983 |
|
$ |
23,883 |
|
$ |
17,476 |
| Acquisition related costs - tax equated |
|
|
0 |
|
|
|
0 |
|
|
22 |
|
|
(48 |
) |
|
|
190 |
|
|
22 |
|
|
436 |
| Deferred tax asset adjustments |
|
|
0 |
|
|
|
0 |
|
|
0 |
|
|
1,793 |
|
|
|
0 |
|
|
0 |
|
|
0 |
| Net income - Adjusted |
|
$ |
8,084 |
|
|
$ |
8,073 |
|
$ |
7,748 |
|
$ |
6,980 |
|
|
$ |
6,173 |
|
$ |
23,905 |
|
$ |
17,912 |
| Average shares outstanding |
|
|
27,695 |
|
|
|
27,641 |
|
|
27,918 |
|
|
27,941 |
|
|
|
27,654 |
|
|
27,639 |
|
|
27,654 |
| EPS excluding acquisition costs and deferred tax asset adjustments |
|
$ |
0.29 |
|
|
$ |
0.29 |
|
$ |
0.28 |
|
$ |
0.25 |
|
|
$ |
0.22 |
|
$ |
0.86 |
|
$ |
0.65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
|
|
|
Sept. 30, |
|
June 30, |
|
March 31, |
|
Dec. 31, |
|
Sept. 30, |
|
|
|
|
| End of Period Loan Balances |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
|
|
|
| Commercial real estate |
|
$ |
562,272 |
|
|
$ |
523,417 |
|
$ |
511,628 |
|
$ |
513,707 |
|
|
$ |
500,426 |
|
|
|
|
| Commercial |
|
|
233,188 |
|
|
|
232,672 |
|
|
231,498 |
|
|
220,441 |
|
|
|
218,946 |
|
|
|
|
| Residential real estate |
|
|
489,851 |
|
|
|
479,486 |
|
|
472,350 |
|
|
469,442 |
|
|
|
459,702 |
|
|
|
|
| Consumer |
|
|
220,826 |
|
|
|
219,138 |
|
|
210,088 |
|
|
207,851 |
|
|
|
213,918 |
|
|
|
|
| Agricultural loans |
|
|
182,038 |
|
|
|
181,173 |
|
|
170,725 |
|
|
163,081 |
|
|
|
155,336 |
|
|
|
|
| Total, excluding net deferred loan costs |
|
$ |
1,688,175 |
|
|
$ |
1,635,886 |
|
$ |
1,596,289 |
|
$ |
1,574,522 |
|
|
$ |
1,548,328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
|
|
|
Sept. 30, |
|
June 30, |
|
March 31, |
|
Dec. 31, |
|
Sept. 30, |
|
|
|
|
| Noninterest Income |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
|
|
|
| Service charges on deposit accounts |
|
$ |
1,151 |
|
|
$ |
985 |
|
$ |
1,003 |
|
$ |
1,060 |
|
|
$ |
1,077 |
|
|
|
|
| Bank owned life insurance income |
|
|
219 |
|
|
|
219 |
|
|
222 |
|
|
246 |
|
|
|
193 |
|
|
|
|
| Trust fees |
|
|
1,827 |
|
|
|
1,740 |
|
|
1,807 |
|
|
1,622 |
|
|
|
1,608 |
|
|
|
|
| Insurance agency commissions |
|
|
567 |
|
|
|
713 |
|
|
699 |
|
|
530 |
|
|
|
531 |
|
|
|
|
| Security gains |
|
|
(34 |
) |
|
|
27 |
|
|
18 |
|
|
5 |
|
|
|
0 |
|
|
|
|
| Retirement plan consulting fees |
|
|
470 |
|
|
|
465 |
|
|
379 |
|
|
465 |
|
|
|
480 |
|
|
|
|
| Investment commissions |
|
|
273 |
|
|
|
315 |
|
|
256 |
|
|
260 |
|
|
|
184 |
|
|
|
|
| Net gains on sale of loans |
|
|
804 |
|
|
|
606 |
|
|
487 |
|
|
810 |
|
|
|
758 |
|
|
|
|
| Debit card and EFT fees |
|
|
814 |
|
|
|
870 |
|
|
806 |
|
|
830 |
|
|
|
770 |
|
|
|
|
| Other operating income |
|
|
387 |
|
|
|
366 |
|
|
333 |
|
|
223 |
|
|
|
457 |
|
|
|
|
| Total Noninterest Income |
|
$ |
6,478 |
|
|
$ |
6,306 |
|
$ |
6,010 |
|
$ |
6,051 |
|
|
$ |
6,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
|
|
|
Sept. 30, |
|
June 30, |
|
March 31, |
|
Dec. 31, |
|
Sept. 30, |
|
|
|
|
| Noninterest Expense |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
|
|
|
| Salaries and employee benefits |
|
$ |
8,966 |
|
|
$ |
8,828 |
|
$ |
8,738 |
|
$ |
8,697 |
|
|
$ |
8,922 |
|
|
|
|
| Occupancy and equipment |
|
|
1,597 |
|
|
|
1,611 |
|
|
1,704 |
|
|
1,528 |
|
|
|
1,546 |
|
|
|
|
| State and local taxes |
|
|
475 |
|
|
|
479 |
|
|
459 |
|
|
386 |
|
|
|
436 |
|
|
|
|
| Professional fees |
|
|
687 |
|
|
|
737 |
|
|
698 |
|
|
643 |
|
|
|
726 |
|
|
|
|
| Merger related costs |
|
|
0 |
|
|
|
0 |
|
|
25 |
|
|
88 |
|
|
|
270 |
|
|
|
|
| Advertising |
|
|
489 |
|
|
|
379 |
|
|
275 |
|
|
561 |
|
|
|
405 |
|
|
|
|
| FDIC insurance |
|
|
218 |
|
|
|
225 |
|
|
222 |
|
|
165 |
|
|
|
235 |
|
|
|
|
| Intangible amortization |
|
|
354 |
|
|
|
355 |
|
|
354 |
|
|
386 |
|
|
|
379 |
|
|
|
|
| Core processing charges |
|
|
778 |
|
|
|
794 |
|
|
739 |
|
|
806 |
|
|
|
702 |
|
|
|
|
| Telephone and data |
|
|
298 |
|
|
|
238 |
|
|
237 |
|
|
241 |
|
|
|
249 |
|
|
|
|
| Other operating expenses |
|
|
2,318 |
|
|
|
1,812 |
|
|
1,645 |
|
|
1,898 |
|
|
|
1,921 |
|
|
|
|
| Total Noninterest Expense |
|
$ |
16,180 |
|
|
$ |
15,458 |
|
$ |
15,096 |
|
$ |
15,399 |
|
|
$ |
15,791 |
|
|
|
|
| |
| Average Balance Sheets and Related Yields and Rates |
| (Dollar Amounts in Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
September 30, 2018 |
|
September 30, 2017 |
|
|
AVERAGE |
|
|
|
|
|
AVERAGE |
|
|
|
|
|
|
BALANCE |
|
INTEREST (1) |
|
RATE (1) |
|
BALANCE |
|
INTEREST (1) |
|
RATE (1) |
| EARNING ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
| Loans (2) |
|
$ |
1,650,128 |
|
$ |
20,623 |
|
4.96 |
% |
|
$ |
1,517,589 |
|
$ |
17,952 |
|
4.69 |
% |
| Taxable securities |
|
|
200,765 |
|
|
1,226 |
|
2.42 |
|
|
|
215,490 |
|
|
1,271 |
|
2.34 |
|
| Tax-exempt securities (2) |
|
|
198,683 |
|
|
1,842 |
|
3.68 |
|
|
|
173,113 |
|
|
1,887 |
|
4.32 |
|
| Equity securities |
|
|
11,594 |
|
|
167 |
|
5.71 |
|
|
|
10,474 |
|
|
136 |
|
5.15 |
|
| Federal funds sold and other |
|
|
33,936 |
|
|
178 |
|
2.08 |
|
|
|
38,815 |
|
|
126 |
|
1.29 |
|
| Total earning assets |
|
|
2,095,106 |
|
|
24,036 |
|
4.55 |
|
|
|
1,955,481 |
|
|
21,372 |
|
4.34 |
|
| Nonearning assets |
|
|
159,943 |
|
|
|
|
|
|
162,689 |
|
|
|
|
| Total assets |
|
$ |
2,255,049 |
|
|
|
|
|
$ |
2,118,170 |
|
|
|
|
| INTEREST-BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
| Time deposits |
|
$ |
293,719 |
|
$ |
1,091 |
|
1.47 |
% |
|
$ |
242,654 |
|
$ |
680 |
|
1.11 |
% |
| Savings deposits |
|
|
463,859 |
|
|
293 |
|
0.25 |
|
|
|
525,919 |
|
|
189 |
|
0.14 |
|
| Demand deposits |
|
|
523,433 |
|
|
858 |
|
0.65 |
|
|
|
406,123 |
|
|
313 |
|
0.31 |
|
| Short term borrowings |
|
|
278,884 |
|
|
1,353 |
|
1.92 |
|
|
|
280,490 |
|
|
644 |
|
0.91 |
|
| Long term borrowings |
|
|
6,344 |
|
|
49 |
|
3.06 |
|
|
|
9,333 |
|
|
50 |
|
2.13 |
|
| Total interest-bearing liabilities |
|
$ |
1,566,239 |
|
|
3,644 |
|
0.92 |
|
|
$ |
1,464,519 |
|
|
1,876 |
|
0.51 |
|
|
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
| Demand deposits |
|
|
424,936 |
|
|
|
|
|
|
405,959 |
|
|
|
|
| Other liabilities |
|
|
13,371 |
|
|
|
|
|
|
13,849 |
|
|
|
|
| Stockholders' equity |
|
|
250,503 |
|
|
|
|
|
|
233,843 |
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$ |
2,255,049 |
|
|
|
|
|
$ |
2,118,170 |
|
|
|
|
| Net interest income and interest rate spread |
|
|
|
$ |
20,392 |
|
3.63 |
% |
|
|
|
$ |
19,496 |
|
3.83 |
% |
| Net interest margin |
|
|
|
|
|
3.86 |
% |
|
|
|
|
|
3.96 |
% |
|
(1)
|
|
Interest and yields are calculated on a tax-equivalent basis where applicable.
|
|
(2)
|
|
For 2018, adjustments of $92 thousand and $381 thousand, respectively, were made to tax equate
income on tax exempt loans and tax exempt securities. For 2017, adjustments of $166 thousand and $655 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% for 2018 and 35% for 2017, less disallowances.
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
Nine Months Ended |
|
|
September 30, 2018 |
|
September 30, 2017 |
|
|
AVERAGE |
|
|
|
|
|
AVERAGE |
|
|
|
|
|
|
BALANCE |
|
INTEREST (1) |
|
RATE (1) |
|
BALANCE |
|
INTEREST (1) |
|
RATE (1) |
| EARNING ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
| Loans (2) |
|
$1,607,753 |
|
$58,768 |
|
4.89% |
|
$1,475,807 |
|
$52,162 |
|
4.73% |
| Taxable securities |
|
203,213 |
|
3,687 |
|
2.43 |
|
214,552 |
|
3,654 |
|
2.28 |
| Tax-exempt securities |
|
191,627 |
|
5,259 |
|
3.67 |
|
163,539 |
|
5,317 |
|
4.35 |
| Equity securities (2) |
|
11,234 |
|
467 |
|
5.56 |
|
10,207 |
|
374 |
|
4.90 |
| Federal funds sold and other |
|
35,499 |
|
490 |
|
1.85 |
|
35,148 |
|
271 |
|
1.03 |
| Total earning assets |
|
2,049,326 |
|
68,671 |
|
4.48 |
|
1,899,253 |
|
61,778 |
|
4.35 |
| Nonearning assets |
|
157,053 |
|
|
|
|
|
157,547 |
|
|
|
|
| Total assets |
|
$2,206,379 |
|
|
|
|
|
$2,056,800 |
|
|
|
|
| INTEREST-BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
| Time deposits |
|
$283,018 |
|
$2,861 |
|
1.35% |
|
$237,695 |
|
$1,833 |
|
1.03% |
| Savings deposits |
|
474,474 |
|
731 |
|
0.21 |
|
524,154 |
|
542 |
|
0.14 |
| Demand deposits |
|
481,709 |
|
1,784 |
|
0.50 |
|
396,791 |
|
838 |
|
0.28 |
| Short term borrowings |
|
286,689 |
|
3,374 |
|
1.57 |
|
267,217 |
|
1,472 |
|
0.74 |
| Long term borrowings |
|
6,626 |
|
142 |
|
2.87 |
|
10,432 |
|
179 |
|
2.29 |
| Total interest-bearing liabilities |
|
$1,532,516 |
|
8,892 |
|
0.78 |
|
$1,436,289 |
|
4,864 |
|
0.45 |
|
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
| Demand deposits |
|
$414,450 |
|
|
|
|
|
$382,963 |
|
|
|
|
| Other liabilities |
|
13,722 |
|
|
|
|
|
13,052 |
|
|
|
|
| Stockholders' equity |
|
245,691 |
|
|
|
|
|
224,496 |
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$2,206,379 |
|
|
|
|
|
$2,056,800 |
|
|
|
|
| Net interest income and interest rate spread |
|
|
|
$59,779 |
|
3.70% |
|
|
|
$56,914 |
|
3.90% |
| Net interest margin |
|
|
|
|
|
3.90% |
|
|
|
|
|
4.01% |
|
(1)
|
|
Interest and yields are calculated on a tax-equivalent basis where applicable.
|
|
(2)
|
|
For 2018, adjustments of $265 thousand and $1.1 million, respectively, were made to tax equate
income on tax exempt loans and tax exempt securities. For 2017, adjustments of $491 thousand and $1.8 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% for 2018 and 35% for 2017, less disallowances.
|
|
|
|
Farmers National Banc Corp.
Kevin J. Helmick, 330-533-3341
President and CEO
exec@farmersbankgroup.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20181024005097/en/