Farmers Reports 2Q Net Income of $5.02 Million

CANFIELD, Ohio — Farmers National Banc Corp. Wednesday reported second-quarter net income of $5.02 million, or 19 cents a share.

This compares to first-quarter net income of $4.80 million, or 18 cents a share, and second-quarter 2015 net income of $812,000, or three cents a share.

Farmers is the parent of Farmers National Bank, Farmers Trust Co., National Associates Inc., Farmers National Insurance LLC and Bowers Insurance Agency Inc.

Merger-related expense dropped considerably from the year-ago quarter when Farmers reported $1.91 million in that category to the quarter ended June 30, for which Farmers reported $224,000 in such expense.

Last year, Farmers acquired National Bancshares Corp., Orrville, and Tri-State 1st Banc Inc., East Liverpool. Effective June 1, Farmers completed its purchase of Bowers Insurance Agency Inc., Cortland.

The president and CEO of Farmers and the bank, Kevin J. Helmick, reported the integration of First National Bank of Orrville and 1st National Community Bank of East Liverpool went smoothly “and we are encouraged by the early results of our merger with the Bowers Group. We also continue to be encouraged by our organic loan growth [of 14% since June 30, 2015] and improvements in our level of noninterest income.”

Key performance ratios for the quarters ended June 30, March 31, and June 30, 2015:

  • Net interest margin, 4.06%, 4.07%, 3.66%.
  • Return on average assets, 1.06%, 1.03%, 0.27%.
  • Return on average equity, 9.69%, 9.41%, 2.74%.
  • Efficiency ratio, (tax equivalent basis), 62.60%, 62.65%, 81.03%.

Net interest income was $16.88 million compared to $16.75 million the preceding quarter and $9.75 million the year ago quarter.

Noninterest income (fees, trust operations, mortgage service rights, gains on sale of mortgage loans, debit card interchange fees, insurance) was $5.74 million compared to $4.95 million the first quarter and $4.41 million the year-ago quarter.

Noninterest expense (includes salaries and benefits, rents, data processing, legal and marketing expenses, Federal Deposit Insurance Corp. premiums) was $14.56 million, up from $14.16 million the first quarter but well below the $24.71 million reported the year ago quarter when the National Bancshares acquisition was completed.

Credit quality remains strong. Said Farmers, “[The ratio of] nonperforming assets to total assets [$1.925 billion] remain at a safe level, 0.46%. Early-stage delinquencies also continue to remain at low levels, $11.4 million or 0.84% of total loans [$1.358 billion]. Net chargeoffs for the quarter were $660,000, $627,000 less than the $1.29 million the sale quarter a year ago.

Farmers noted, “Lending to the energy sector is insignificant, less than 1% of the total loan portfolio.”

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