Farmers National Banc Corp. · NASDAQ:FMNB
Farmers National Banc — Investor Presentation (April 2014)
26 slides from Farmers National Banc's investor presentation, Apr 28, 2014
Slide 1: Investor Presentation March 31, 2014
1 Investor Presentation March 31, 2014
Slide 2: Disclosure Statement
2 Disclosure Statement Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express management's current expectations, forecasts of future events or long-term-goals and,
Slide 3: Overview
3 Overview NASDAQ: FMNB Headquarters: Canfield, Ohio Stock Price: (3-31-14) $7.68 Market Cap: $144.24 million Dividend (yield): $0.12 (1.56%) 2013 Year-end Highlights 2013 Year-end Highlights Revenue $49.0 million Net Income $7.8 million Net Income per Diluted Share $0.41 Book Value $6.02 Total Asse
Slide 4: Who We Are
4 Who We Are Leading community bank in Ohio with deposit market share in the top ten in the core counties in which we operate Founded over 126 years ago 18 branches and 18 ATMs Sound franchise with many opportunities for growth Profitable throughout cycle and growing tangible book value per share Di
Slide 5: Attractive Deposit Franchise - Deposit Market Share by MSA & County
5 Note: Deposit data as of June 30, 2012 Source: SNL * Began Operations in Stark County in 2010 Opportunity for growth with approximately 10.60% deposit market share in the Mahoning Valley Large regional competitors lack focus - Community competitors inwardly focused Attractive Deposit Franchise - D
Slide 6: Growing Franchise
6 Rated one of the Top 200 Community Banks in 2013, by American Banker Magazine for the second consecutive year 5-Star, Superior Rating from the Bauer Financial Group - the highest rating awarded by the financial group. Listed in Top 100 Best Banks, $1B - $5B, as scored by Bank Director Magazine , J
Slide 7: Increasing Shareholder Value
7 Increasing Shareholder Value Stable Dividend Policy Always paid a quarterly cash dividend Current yield 1.56% Dividend payout in 2013 was 28.9% of net income Stock Up 82% Since '08
Slide 8: Headquartered in Mahoning Valley
8 Headquartered in Mahoning Valley Compelling Demographics Approximately 75 - 100 miles from Cleveland, Pittsburgh & Erie 6.8 million people 18 Fortune 500 company world headquarters 95 colleges and universities campus locations Northeast Ohio's manufacturing productivity is on track to outpace the
Slide 9: Industrial Growth Returning to the Valley
9 Source: Regional Chamber, Youngstown-Warren, Ohio Metropolitan Profile ,Valley Leads in Industrial Job Growth in NE Ohio, The Vindicator ,Ohio's Economic Impact Study - September, 2011 & 2012 Industrial Growth Returning to the Valley Steelmaker Vallourec's $650 million expansion - 350 jobs created
Slide 10: Regional Growth Opportunities
10 Source: Regional Chamber, Youngstown-Warren, Ohio Metropolitan Profile ,Valley Leads in Industrial Job Growth in NE Ohio, The Vindicator ,Ohio's Economic Impact Study - September, 2011 & 2012 Growing Interest in Utica Gas Formation Development From 4th Quarter 2013, 352 wells reported production.
Slide 11: Farmers' Strategy for Growth
Farmers' Strategy for Growth Growth of Non Interest Income Through Wealth Management and Bank Fee Revenues Grow Loan Production Volume Technology and the Automated Virtual Bank Continued investment in rapidly expanding mobile opportunities Expense Control Company Culture Enterprise Risk Management A
Slide 12: Experienced Management Team
Established and experienced management team with over 210 years of combined experience, 103 of which has been with Farmers. Experienced Management Team
Slide 13: Competitive Landscape
Competitive Landscape Regulatory and Competitive Landscape Significant Competition for Customer's Share of Wallet Consolidation of Banks in Ohio and Nationally Increasing Regulatory Concerns Economic Challenges Strategy for Profitability Strong Capital Position Strong Asset Quality Loan Growth Diver
Slide 14: Growth Focus and Target Metrics
14 Focus for Growth Continued organic growth in current markets Growth opportunities in new markets with Private Banking, Trust and Investments Targeted acquisitions include fee-based business and banks Target Metrics for Acquisition Accretive to earnings near term (excluding one-time charges) Manag
Slide 15: The Health of Our Wealth
The Health of Our Wealth Wealth Management Creates Fee-based Income Fee Income 2009: 14.5% of total gross income Noninterest income excluding security gains Fee Income 2013: 26.7% of total gross income Noninterest income excluding security gains Wealth Management Build-out Timeline 2000 Farmers Nati
Slide 16: Acquisitions to Enhance Fee-Based Revenue
16 Butler Wick Trust Company Acquisition Acquired for cash on March 31, 2009 Only locally owned trust company in the Mahoning Valley Rebranded to Farmers Trust Company Trust assets increased approximately 78% since acquisition Contributed $5.7 million to non-interest income in 2013 National Associat
Slide 17: Historical Operating Results
17 High net interest margin which has exceeded Midwest banks1 peer average 3.56% 1Q 2014 3.58% Year-end 2013 Strong record of profitability 125 consecutive quarters of profitability Average ROAA and ROAE from 2009 through 2013 of 0.79% and 8.32%, respectively ROAA impacted by investment into new mar
Slide 18: Corporate Efficiencies
Corporate Efficiencies Profit Improvement Committee (PIC) Branch Efficiencies Closing of Leetonia and Warren Branches Customer accounts transferred to Columbiana and Eastwood Minimal account loss Elimination of Assistant Manager Position Checking Account Fee/Service Charge Adjustments Fees and servi
Slide 19: Continued Strong Results - Overview of 1Q 2014
19 125 consecutive quarters of profitability Net income per diluted share for three months ended March 31, 2014 was $0.12, an increase of 9% compared to $0.11 for the first quarter, 2013 Efficiency ratio for the first quarter improved to 69.87%, compared to 72.57% for the same quarter in 2013 Loans
Slide 20: Growing and Diverse Revenue Stream
20 Growing and Diverse Revenue Stream Note: Revenue defined as net interest income plus non-interest income. Excludes $860m net gain on securities (CHART) (CHART) (CHART)
Slide 21: Overview of Loan Portfolio
21 Diverse loan mix No national lending No sub-prime lending Farmers' practice is to lend primarily within its market area Less than 2% of loan portfolio is participations purchased Less than 4% of loan portfolio is construction loans Loan Portfolio Mix - March 31, 2014 Overview of Loan Portfolio No
Slide 22: Excellent Asset Quality
22 Excellent Asset Quality Note: Dollars in millions; Asset quality ratios exclude troubled debt restructuring 3/31/2014 Nonaccrual loans $7.9 Accruing loans past due 90 days or more 0.6 OREO 0.2 Total nonperforming assets (NPAs) $8.7 Troubled Debt Restructuring (TDR) $8.2 Loans 30-89 days delinquen
Slide 23: Supplemental Information
23 Supplemental Information
Slide 24: GAAP to Non-GAAP Reconciliation
24 GAAP to Non-GAPP Reconciliation Reconciliation of Common Stockholders' Equity to Tangible Common Equity Reconciliation of Common Stockholders' Equity to Tangible Common Equity Reconciliation of Common Stockholders' Equity to Tangible Common Equity Reconciliation of Common Stockholders' Equity to
Slide 25: Consolidated Statements of Income
25 Consolidated Statements of Income Consolidated Statements of Income For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Three Months Ended March 31, Dec. 31, Sept. 30, June 30, March 31, 2014 2013 2013 2013 2013 Total interest income
Slide 26: Consolidated Statements of Financial Condition
26 Consolidated Statements of Financial Condition Consolidated Statements of Financial Condition Consolidated Statements of Financial Condition March 31, Dec. 31, Sept. 30, June 30, March 31, 2014 2013 2013 2013 2013 Assets Cash and cash equivalents $29,333 $27,513 $40,303 $26,587 $57,312 Securities
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