Farmers Reports Net Income of $5.38 Million

CANFIELD, Ohio – Farmers National Banc Corp. reported third-quarter net income of $5.38 million Thursday, or 20 cents per diluted share.

This compares to second-quarter net income of $5.02 million, or 19 cents a share, and third-quarter 2015 net income of $1.86 million, or seven cents a share.

Farmers is the holding company of Farmers National Bank, Farmers Trust Co. and Bowers Insurance Agency Inc.

In its earnings release, Farmers cited these highlights: Organic loan growth was 12% higher than the same quarter a year ago and noninterest income was 38.4% higher than the third quarter of 2015.

In a prepared statement, the president and CEO of the corporation and the bank, Kevin J. Helmick, said, “We are pleased to report a record quarter in net income, which has been achieved through the successful integration of our recent mergers, our 12% organic loan growth and our continued focus on increasing noninterest income and careful management of noninterest expenses.

Helmick was referring to the acquisition of National Bancshares Corp., holding company of First National Bank of Orrville, Tri-State 1st Banc Inc., holding company of 1st National Community Bank in East Liverpool, and the Bowers agency in Cortland.

Key performance ratios for the quarters ended Sept. 30, June 30, and Sept. 30, 2015:

  • Return on average assets (annualized), 1.10%, 1.06%, 0.43%.
  • Return on average equity (annualized), 9.97%, 9.69%, 3.97%.
  • Net interest margin (annualized), 3.97%, 4.06%, 3.84%.
  • Efficiency ratio, 60.85%, 62.60%, 76.55%.

Excluding expenses related to its acquisitions recognized in the third quarters this year and last, the figures would have been 60.7% and 6.5% respectively, Farmers said.

Loans grew to $1.366 billion at Sept. 30, up from $1.152 billion at Sept. 30, 2015, and total earning assets grew to $1.784 billion from $1.561 billion respectively.

Net interest income was $17.19 million, up from $16.89 million the preceding quarter and $14.54 million the year-ago quarter.

Noninterest income (such as fees from mortgage services, trust services and insurance commissions) was $6.49 million, up from $5.74 million the second quarter and $4.69 million the quarter ended Sept. 30, 2015.

Noninterest expense (includes salaries and employee benefits, rents, data processing, marketing, taxes, Federal Deposit Insurance Corp. premiums) was $15.23 million, an increase from $14.78 million the second quarter and $15.52 million the year-ago quarter. Employee compensation led the category, $8.37 million, $7.74 million and $7.21 million respectively.

Credit quality remains strong as reflected by the ratios of nonperforming loans (those 90 and more days past due) to total loans and nonperforming assets to total assets. Nonperforming loans of $8 million constituted 0.57% of total loans at Sept. 30, a drop from $8.36 million, or 0.81% at June 30 and $9.62 million or 0.81% the third quarter of 2015. The nonperforming assets ratios were 0.43%, 0.46% and 0.62% respectively.

Deposits approached $1.5 billion during the quarter, reaching $1.496 billion, up from $1.447 billion the second quarter and $1.330 billion the year-ago quarter.

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