Farmers Reports 3Q Income of $10.9M, PPP Drives Loan Growth

CANFIELD, Ohio – Farmers National Banc Corp., the parent of Farmers National Bank, reports third quarter net income of $10.9 million, or 38 cents per diluted share, up from the $9.2 million reported in the same quarter a year ago.

The income is down slightly, however, from the $11 million reported in the second quarter of this year.

“Our record third quarter financial results demonstrate that when our customers and communities win, we win, and we remain focused on ensuring our customers are well positioned to achieve their financial goals,” said President and CEO Kevin Helmick in a statement. “At the onset of the COVID-19 crisis, we helped our commercial and agricultural customers by providing relief on their loans in the form of payment deferrals. The significant decline in the balance of deferred loans reflects the diversity of our loan portfolio and our strong asset quality, and at September 30, 2020, we only had five loans in loan payment deferral status for a balance of only [$848,000]. In addition, we helped secure nearly $200 million for our customers in the form of PPP loans, helping protect jobs within our local communities, and we are now working with these borrowers on the forgiveness process.”

At the end of the first quarter, Farmers reported 338 loans totaling $97.4 million were being deferred. In the second quarter, that number dropped to 272 loans totaling $66.4 million.

During the Paycheck Protection Program, Farmers provided loans to 1,714 borrowers, totaling $199.8 million. As of Oct. 22, the bank has received forgiveness payments from the Small Business Administration totaling $1.8 million.

Among the highlights the bank cited in its quarterly earnings report are:

  • Loans totaled $2.15 billion, up from $1.78 billion in the year-ago quarter. Excluding the $182.1 million of loans added from the acquisition of Maple Leaf Financial in January, loan growth was 10.1%.The increase in loans has occurred primarily in the PPP category, with $194.5 million, net of deferred fees, in outstanding balances.
  • Farmers’ nonbrokered deposits increased 29% year-over-year to $2.5 billion in the third quarter. The loan to deposit ratio at September 30, 2020 stands at 84.6%, a slight decrease compared to 87.4% one year ago. 
  • Nonperforming assets to total assets remain at a low level, currently at 0.40%, but increased from the 0.28% reported a year ago. Early stage delinquencies were $10.1 million, or 0.47% of total loans, at September 30 compared to $10.3 million, or 0.48% of total loans, for the quarter ended June 30.

Key performance ratios for the quarters ended Sept. 30, June 30 and Sept. 30, 2019, include:

  • Return on average assets annualized: 1.46%, 1.56%, 1.51%.
  • Return on average equity annualized: 12.87%, 14.02%, 12.49%.
  • Net interest margin annualized: 3.59%, 3.74%, 3.84%.
  • Efficiency ratio tax-equivalent basis: 50.66%, 50.75%, 54.51%.

Net interest income was $24.16 million in the third quarter, up from $20.75 in the year-ago quarter.

Noninterest income was $9.46 million, up from $7.56 million in the third quarter of 2019.

Total assets were $2.989 billion in the third quarter, up from $2.433 billion in the same period last year.

Copyright 2020 The Business Journal, Youngstown, Ohio.