Farmers Reports First-Quarter Net Income of $2.21M

CANFIELD, Ohio – Farmers National Banc Corp., holding company of Farmers National Bank and Farmers Trust Co., Wednesday reported first-quarter net income of $2.21 million, or 12 cents a share.

This compares to fourth-quarter net income of $2.15 million, or 12 cents a share, and first-quarter 2014 net income of $2.19 million, or 12 cents a share.

Highlights the provider of financial services cited are an efficiency ratio that improved to 70.71% from 71.20% at year-end (but stood at 69.87% at March 31, 2014), noninterest income (fees and commissions) 17.6% higher than the same quarter a year ago ($4.04 million versus $3.43 million) and a loan portfolio 7.6% larger than a year ago ($673.78 million versus $626.19 million).

Key performance ratios for the quarters ended March 31, Dec. 31 and March 31, 2014:

• Net interest margin (annualized), 3.64%, 3.63%, 3.56%.
• Efficiency ratio (tax equivalent basis), 70.71%, 71.20%, 69.87%.
• Return on average assets (annualized), 0.79%, 0.75%, 0.78%.
• Return on average equity, 7.14%, 6.91%, 7.65%.

In a prepared statement, the president and CEO of the holding company and the bank, Kevin J. Helmick, said, “We are pleased with our improvement in net income for the quarter. The increase in earnings is the result of growth in our loan portfolio, the continued improvement in our level of noninterest income and stable asset quality. We also experienced an increase in our net interest margin, mainly as a result of lower funding costs.”

Assets were slightly lower at March 31 than Dec. 31, $1.134 billion versus $1.137 billion. Assets were $1.141 billion a year ago.

Loan growth, as noted, was up. “The increase in loans,” Farmers said, “is a direct result of Farmers’ focus on loan growth, utilizing a talented lending and credit team, while adhering to a sound underwriting discipline. Most of the increase occurred in commercial real estate, commercial and industrial lending, and residential real estate loan portfolios.”

Loans made up 62.5% of the bank’s average earning assets year-to-date, Farmers said, an improvement over 58.2% last year. Net loans stood at $666.06 million at March 31, $656.22 million at Dec. 31 and $618.80 million at March 31, 2014.

Deposits fell slightly during the quarter to $909.41 million from $915.70 million at year-end. They stood at $923.03 million a year ago.

Interest income was a hair under $10 million for the quarter compared to $10.32 million at Dec. 31 and $10.06 million at March 31, 2014.

Noninterest income was $4.04 million compared to $4.19 million at Dec. 31 and $3.43 million the first quarter a year ago. Trust fees were $150,000 higher than the preceding quarter, Farmers said, and retirement consulting fees were $140,000 higher. Investment commissions rose by $104,000, or 54%, from Dec. 31.

Noninterest expense (wages and benefits, rents, marketing, legal fees, rents, data processing, Federal Deposit Insurance Corp. premiums) was lower than the last quarter of last year, $9.75 million versus $9.87 million, but higher than the $9.14 million reported for the first quarter a year ago.

Asset quality continues to improve. Nonperforming loans (those 90 days past due) fell to $7.94 million during the quarter from $8.48 million at Dec. 31 and $8.49 million at March 31, 2014. Other real estate owned (repossessed real estate) fell to $144,000 from $148,000 Dec. 31 and $174,000 March 31, 2014.

Loans charged off likewise fell to $618,000 from $891,000 at Dec. 31 and $836,000 the year-ago quarter.

And the allowance set aside for nonperforming loans was 97.28$ of nonperforming loans compared to 89.99% at Dec. 31 and 86.97% a year ago.

Nonperforming assets to total assets remained well below 1%, 0.71% at March 31, 0.76% at Dec. 31, and 0.76% at March 31, 2014.

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