Farmers National Banc Corp. · NASDAQ:FMNB
Farmers National Banc — FY2014 Earnings Presentation
18 slides from Farmers National Banc's earnings presentation, Jan 29, 2015
Slide 1: Conference Call Presentation to Discuss 2014's Financial Results and the National Bancshares Merger
Exhibit 99.1 January 29, 2015 Conference Call Presentation to Discuss 2014’s Financial Results and the National Bancshares Merger
Slide 2: Disclosure Statement
Disclosure Statement Forward-Looking Statements This investor presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts, but rather statements based on the Company's current expectations rega
Slide 3: Additional Information for Stockholders
Additional Information for Stockholders In connection with the proposed merger, Farmers will file with the Securities and Exchange Commission ("SEC") a Registration Statement on Form S-4 that will include a joint proxy statement and a Farmers prospectus, as well as other relevant documents concernin
Slide 4: Introduction
Introduction Farmers has become a leading, diversified financial institution with a history of stable growth and profitability History of Acquisition and Total Average Assets Up 36% Since 2008 Business Development $1,142 $1,141 • 2009 Acquired the Butler Wick Trust $1,118 Company • 2010 Created Farm
Slide 5: Farmers – 2014 Business Highlights
Farmers – 2014 Business Highlights • Record year for Wealth Management – Farmers Trust Company revenues up 9% – Farmers National Investments commissions increased 13%1 – Farmers National Insurance revenues up 24% • Online and Mobile Banking Enhancements • Total dividends paid during 2014 – $2.2 mill
Slide 6: Farmers – 2014 Financial Highlights
Farmers – 2014 Financial Highlights • 128 consecutive quarters of profitability • Net income per diluted share for year ended December 31, 2014 was $0.48, a 17.1% improvement over 2013 • Efficiency ratio for 2014 improved to 70.24%, compared to 74.82% for 2013 • Loans increased 5.3% since December 3
Slide 7: Farmers – 2014 Financial Results
Farmers – 2014 Financial Results Loan Growth ($M) Loan Quality (NPA/Total Assets) Noninterest Income excluding Security Noninterest Expense ($M) Gains ($M) 7
Slide 8: Creates Prominent NE Ohio Franchise
Creates Prominent NE Ohio Franchise Strategic Rationale 1 • Creates the third largest community bank by asset size headquartered in Northeastern Ohio • Complementary business lines & compelling cultural fit – Combines NBOH’s strong loan growth with Farmers’ wealth management resources and strong cap
Slide 9: Transaction Overview
Transaction Overview • Each shareholder of NBOH will elect to receive $32.15 per share Structure/Consideration in cash or 4.034 shares of FMNB, subject to 80% of the shares being exchanged for stock and 20% for cash • $74.0 million based on FMNB’s 20-day volume weighted average price of $7.97 as of
Slide 10: Partnership – Selecting Farmers
Partnership – Selecting Farmers • Maintains community bank in Wayne County • Combined Company synergies – Wealth Management – Agricultural lending – Mortgage lending/operations • Increases legal lending limit • Develops deeper comprehensive platform for banking • Maintains similar cultures • Creates
Slide 11: National Bancshares Corporation
National Bancshares Corporation Overview ROAA • High performing Northeastern Ohio community bank with 2014 ROAA of 1.16% • Compounded annualized growth rate for gross loans of 23% since Q1 2012 • Net income compounded annualized growth rate of 31% from 2011FY to 2014FY Gross Loans ($M) Net Income (0
Slide 12: NBOH 2014 Financial Highlights
NBOH 2014 Financial Highlights 2014 A Record Year • National Bancshares achieved record net income, return on average assets, return on average equity, loan balances, deposit balances and efficiency ratio in 2014 • Total assets at December 31, 2014 were a record $529.6 million compared to $476.2 mil
Slide 13: Talented Management and Staff
Talented Management and Staff • Farmers welcomes NBOH Board members Jim Smail and Howard Wenger as new FMNB Board Members to help provide leadership and guidance in the Wayne County market • Mark Witmer, CEO of National Bancshares Corporation and First National Bank, is a capable and respected leade
Slide 14: Due Diligence Summary
Due Diligence Summary • Comprehensive due diligence process Modeling Assumptions • Two tiered credit due diligence process • Estimated loan mark of $4.4 million (107% rd completed by senior management and 3 party of reserves) as of 12/31/14 loan review team – 4.0x coverage of non-performing • Analyz
Slide 15: Pro Forma Loan Portfolio
Pro Forma Loan Portfolio FMNB NBOH Pro Forma 3.0% 7.6% 6.9% 4.5% 20.7% 17.3% 22.2% 15.6% 21.8% 31.5% 17.1% 4.7% 18.1% 6.7% 28.4% 10.0% 31.3% 32.7% Construction & Land Residential Mortgage Construction & Land Residential Mortgage Construction & Land Residential Mortgage Home Equity Commercial Real Es
Slide 16: Pro Forma Deposit Mix
Pro Forma Deposit Mix FMNB NBOH Pro Forma 8.9% 9.6% 8.2% 8.6% 13.7% 11.7% 8.1% 16.4% 20.2% 57.2% 74.0% 63.4% Noninterest-bearing Deposits Noninterest-bearing Deposits Noninterest-bearing Deposits IB Demand, Savings & MMDA IB Demand, Savings & MMDA IB Demand, Savings & MMDA Retail Time Deposits Retai
Slide 17: Favorable Financial Metrics
Favorable Financial Metrics • Farmers expects the transaction to be accretive to 2016 earnings per share by over 20% assuming fully phased in cost savings • Estimated internal rate of return in excess of 20% • Manageable level of tangible book value dilution earned back in approximately 4 years usin
Slide 18: Summary Highlights
Summary Highlights • Creates a leading Northeastern Ohio community banking franchise with added scale, enhanced profitability and growth potential • Strong regional presence and brand recognition with outstanding customer service • Financially compelling: >20% EPS accretion in 2016 and >20% IRR with