Farmers National Banc Corp. · NASDAQ:FMNB
Farmers National Banc — Merger or Acquisition (June 2021)
13 slides from Farmers National Banc's merger presentation, Jun 23, 2021
Slide 1: Acquisition of Cortland Bancorp
Acquisition of Cortland Bancorp June 23, 2021
Slide 2: Disclosure Statement
Disclosure Statement Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the financial condition, results of operations, asset quality trends and profitability of Farm
Slide 3: Strategic Partnership to Drive Value
Strategic Partnership to Drive Value • Increases deposit market share to #2 in Trumbull County and #3 in Mahoning County Logical In-Market • Expands market presence in attractive Cleveland suburban markets Combination • Enhances economies of scale and ability to expand product offerings to CLDB’s cu
Slide 4: Proven Acquisition History and Strategy
Proven Acquisition History and Strategy Long-term strategy of value-enhancing acquisitions Cortland $4,500.0 Bancorp Six acquisitions in the past six years* (2021) $4,000.0 Maple Leaf $3,500.0 Target franchises with similar culture, (2019) Bowers compelling reputation, and strong Insurance $3,000.0
Slide 5: Pro Forma Franchise
Pro Forma Franchise Pro Forma Highlights Pro Forma Branch Map $4.1B $2.6B $3.3B assets(1) loans(1) deposits(1) 48 $572M locations(2) market cap(3) Pro Forma Loans & Deposits(4) All Other CDs < CDs > Consumer 9.0% $100K $100K 7.8% Total 1-4 6.5% 8.6% Non- Family Interest Agricultural 23.4% 25.6% 1.8%
Slide 6: Combining Two High Performing Franchises
Combining Two High Performing Franchises Q1 2021 Performance Return on Avg. Assets Return on Avg. Tangible Common Equity 1.85% 19.6% 1.38% 13.6% Efficiency Ratio Net Interest Margin 59.8% 3.58% 3.58% 48.5% Source: S&P Global Market Intelligence 6
Slide 7: Cortland Bancorp Financial Highlights
Cortland Bancorp Financial Highlights (Dollars in thousands) 2018 2019 2020 2021Q1 '18 - YTD CAGR Balance Sheet Total Assets 714,666 737,162 821,305 791,705 4.7% Total Loans HFI 514,392 518,716 556,760 518,618 0.4% Total Deposits 604,419 618,381 700,510 680,311 5.4% Profitability Pre-Tax Pre-Provisi
Slide 8: Pro Forma Deposit Market Share
Pro Forma Deposit Market Share • Enhances FMNB’s market share to #2 in Trumbull County and #3 in Mahoning County • Increases presence in Cuyahoga County, the state’s 2nd most populous county with 1.2 million people and provides entry into Summit County (541k people) and Portage County (162k people)
Slide 9: Pro Forma Loan & Deposit Composition
Pro Forma Loan & Deposit Composition Loan Composition ($000s) The Farmers National Bank of Canfield The Cortland Savings & Banking Company Pro Forma Total Loans & Leases: $2,040,986 Total Loans & Leases: $525,195 Total Loans & Leases: $2,566,181 All Other Consumer 0.2% 0.7% Consumer Consumer 7.8% Al
Slide 10: Transaction Terms
Transaction Terms • 1.75 shares of FMNB common stock or $28.00 per share in cash for each share of Consideration CLDB, subject to 75% of being exchanged for stock and 25% being exchanged for cash • Aggregate Deal Value of $124 million or $29.14 per share(1) • Deal Value / Tangible Book Value: 153% M
Slide 11: Modeling Assumptions
Modeling Assumptions • Total gross credit mark of $11 million (2.3% of CLDB’s MRQ gross loan portfolio excluding loans held for sale and PPP loans) Credit Mark ‒ $4.6 million allocated to purchase credit deteriorated (PCD) loans ‒ $6.4 million allocated to non-PCD loans • ~$3.2 million write-up of l
Slide 12: Financial Impact Summary
Financial Impact Summary • $4.1 billion in assets (25% increase) Estimated Pro Forma Balance • $2.6 billion of loans (26% increase) Sheet • $3.3 billion of deposits (26% increase) • 12.4% projected accretion to FMNB’s 2022 EPS (75% cost savings phased in) and 13.5% projected accretion on a fully pha
Slide 13: Comprehensive Due Diligence
Comprehensive Due Diligence • Completed a coordinated comprehensive due diligence review with executives from FMNB & CLDB, along with advisors & consultants • Detailed credit review completed by internal team and augmented with a 3rd party independent review • Track record of successful integration
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