Banking & Finance

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Markets Like Farmers, National Bancshares Deal

January 29, 2015

CANFIELD, Ohio — Markets reacted positively Wednesday to news of the $74 million agreement for Farmers National Banc Corp. to acquire National Bancshares Corp., holding company of First National Bank of Orville.

Farmers and National Bancshares announced their agreement after markets closed Tuesday (READ STORY).

Farmers will pay the shareholders of National Bancshares $74 million in cash and stock. Farmers is offering somewhere between 145% and 150% of National Bancshares tangible book value, said Kevin J. Helmick, president and CEO of Farmers.

Shares in both companies traded heavier than average yesterday and the prices of their shares closed higher as well.

Farmers closed at $7.66, up four cents from Tuesday on a volume of 58,380 while National Bancshares closed at $30.75, up $6.80 on a volume of 9,320. The latter’s average daily volume had been 261.

Helmick was interviewed by The Business Journal Wednesday morning. After the markets closed yesterday, the company released its fourth quarter and full-year 2014 earnings (READ STORY).

The 14 offices of First National Bank would be merged into Farmers Bank pending shareholder and regulatory approvals. Farmers’ signs would replace First National signs sometime in the third quarter, Helmick said. The transaction is expected to close late in the second quarter.

Farmers’ wealth management products would make it even more attractive for customers of First National Bank to remain customers and attract new customers, Helmick told The Business Journal.

The acquisition in 2009 of the Butler Wick Trust Co., since renamed Farmers Trust Co., is the “cornerstone of our wealth management services,” Helmick said, and makes his bank the leading community bank to offer wealth management in northeastern Ohio based on the strength of diversity of its services.

The geographic markets the banks serve complement each other. Said Helmick of the geography, “It’s a really strong fit” with the only overlap being Salem. First National Bank closed it loan production office in Salem and opened its newest branch there in the fall of 2013.

Thus, Farmers and First National leaders are “reviewing consolidation” of their offices that serve the Salem market. Should there be consolidation, “no employees will be affected,” Helmick said.

First National Bank of Orville has a strong agricultural lending portfolio and despite its name, Farmers’ agricultural lending constitutes less than 1% of its total loan portfolio. Helmick looks forward to serving farmers, he said, and the residential mortgage portfolio First National would bring.

In turn, Farmers commercial real estate and commercial and industrial lending would help First National in its markets.

In the agreement, First National CEO Mark R. Witmer would become senior executive vice president of Farmers Bank.

Witmer would continue to oversee the customers and employees his bank serves – “That’s important to his customers and employees,” Helmick said – and have “a meaningful corporate role” within Farmers National Banc Corp.

Pictured: Kevin J. Helmick, president and CEO of Farmers National Banc Corp.

Copyright 2015 The Business Journal, Youngstown, Ohio.

Published by The Business Journal, Youngstown, Ohio.