Farmers National Banc Corp. · NASDAQ:FMNB
Farmers National Banc — Q1 2020 Earnings Presentation
28 slides from Farmers National Banc's earnings presentation, May 5, 2020
Slide 1: Investor Presentation 1Q, 2020
Investor Presentation 1Q, 2020 Exhibit 99.1
Slide 2: Disclosure Statements
Disclosure Statements 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: COVID-19 Update
COVID-19 Update Customers Developed payment relief initiatives and programs Waiving certain account fees Supporting small business customers through PPP assistance Focusing on relationship banking Frequent customer communications Levering digital, mobile, and online infrastructure Communities Adjust
Slide 4: About Farmers National Banc Corp.
About Farmers National Banc Corp. Operating in nine counties in Ohio Founded in 1887 Acquired Geauga Savings Bank (Maple Leaf) in January, 2020 Added a loan production office in Beachwood, OH in December, 2017 Entered Holmes County, OH with the Monitor Bank merger in August, 2017 Added a loan produc
Slide 5: Farmers Footprint and Financial Highlights
Farmers Footprint Financial Highlights at March 31, 2020 Farmers locations: 41 Assets: $2.67 billion Loans: $2 billion Deposits: $2.2 billion Loan/Deposit Ratio: 88% Tangible Common Equity: 9.61% Market Capitalization: $327 million1 Wealth Management Assets Under Care: $2.2 billion Based on FMNB’s s
Slide 6: Mergers/Acquisitions and Organic Growth
Mergers/Acquisitions and Organic Growth *As of March 31, 2020
Slide 7: Operating in Strong Economic Region
Operating in Strong Economic Region According to a January 2020 study from the State of Ohio, in 2018 Ohio was the 7th largest source of GDP among the 50 states and Washington D.C. - If Ohio was a separate country, it would be the 36th largest national economy in the world. - Cleveland+ Region Diver
Slide 8: First Quarter Financial Overview
First Quarter Financial Overview, 3/31/20 Stock Data – NASDAQ: FMNB Stock Price: $11.63 Operating Results Revenue: $35.4 million excluding gains Cash Dividends: $3.1 million Net Income-Diluted Share: $0.30 ROAE: 11.53% ROAA: 1.32% Tangible Book Value: $8.94 Net Income: $8.6 million Dividend (yield):
Slide 9: Stable Dividend Policy
Stable Dividend Policy Quarterly cash dividend has increased 120% since 2017 Consistently paid a quarterly cash dividend Current yield 3.78% Dividend payout range policy of 25% - 35% 2020 dividend payout: 36.34% of net income Increasing Shareholder Value
Slide 10: Commitment to Stakeholders
Commitment to Stakeholders *Source: FDIC Quarterly Banking Profile – Fourth Quarter 2018 Four Pillars Meaningful Returns Customers Small Business Support 42% of small business lending comes from community banks* Associates 481 Associates Top 100 employer in the region Community Over $187,808 in Comm
Slide 11: 2020 Critical Few Focus
2020 Critical Few Focus Strive for Top Quartile Performance Metrics Continue to Grow Non-Interest Income Effectively Manage our Capital Planning Strategy Leverage Technology through our Six Sigma Platform Identify and Mitigate Enterprise Risks Provide a Customer-Centric Experience throughout all Pla
Slide 12: Assistance Provided to Customers During COVID-19 Crisis
Assistance Provided to Customers During COVID-19 Crisis Paycheck Protection Program Through May 4, 2020, Farmers has written 1,432 loans to small business in the program totaling $188.9 million. Loan Payment Deferrals Consumer loan principal and interest payment deferrals of $44.1 million for 3 mont
Slide 13: Loan Growth
Loan Growth $1,296,865 $1,577,381 Dollars in Thousands
Slide 14: Loan Portfolio Mix – March 31, 2020
Loan Portfolio Mix – March 31, 2020 Overview of Loan Portfolio Dollars in Thousands Diverse loan mix 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
Slide 15: Excellent Asset Quality
Excellent Asset Quality Dollars in Thousands 3/31/2020 3/31/2019 Non-performing loans $11,845 $7,578 Other real estate loans 131 208 Total non-performing Assets $11,976 $7,786 Loans 30-89 days delinquent $19,067 $9,082 Net loan charge-offs $635 $365 Total Assets $2,668,388 $2,356,074 Non-Performing
Slide 16: Exposure to Various Industry Types
Exposure to Various Industry Types Loans to Vulnerable Industries Restaurants $30,880 Hotels $41,825 Golf Courses and Country Clubs $7,344 Oil & Gas $380 Total Loans to Vulnerable Industries $80,429 Total as Percent of Loan Portfolio 4.07% Dollars in Thousands
Slide 17: Wealth Management Creates Fee-based Income
Wealth Management Creates Fee-based Income Fee Income 2009: 14.5% of total gross income Noninterest income excluding security gains Fee Income 2020*: 21.8% of total gross income Noninterest income excluding security and asset gains Wealth Management Growth Timeline 2000 Farmers National Investments
Slide 18: Noninterest Income
Noninterest Income Continued Focus on Growing Noninterest Income Noninterest Revenue: 21.8% of Total Revenue, excluding gains *For the quarter ending March 31, 2020 excluding gains
Slide 19: Established and Experienced Management Team
Established and experienced management team with over 361 years of combined experience, 193 of which have been with Farmers. Farmers Academy Attracting quality banking talent Robust succession planning process Talent Acquisition and Retention Years of Experience FMNB Industry President & Chief Execu
Slide 20: Capital Management and Cash Dividend Payout Policy
Cash Dividend Payout Policy Maintain 25% - 35% range Organic Growth Continued organic growth in current markets Growth opportunities in new markets with Private Banking, Trust and Investments Acquisition Opportunities Targeted acquisitions include fee-based business and banks Accretive to earnings n
Slide 21: Continued Strong Results – Overview of 1Q 2020
Net income of $8.6 million for the quarter is 3% higher than same quarter in 2019 149 consecutive quarters of profitability 18% noninterest income growth in the first quarter of 2020 compared to same quarter in 2019 15% growth in customer non-brokered deposits compared to March 31, 2019 Loan loss pr
Slide 22: Net Interest Income
Net Interest Income Dollars in Thousands
Slide 23: Supplemental Information
FARMERS Supplemental Information
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Reconciliation of Common Stockholders' Equity to Tangible Common Equity March 31, Dec. 31, Sept. 30, June 30, March 31, 2020 2019 2019 2019 2019 Stockholders' Equity $303,736 $299,309 $293,223 $284,825 $272,951 Less Goodwill and other intangibles 52,337 42,645 42,973
Slide 25: Consolidated Statements of Income
Consolidated Statements of Income Consolidated Statements of Income For the Three Months Ended March 31, Dec. 31, Sept. 30, June 30, March 31, 2020 2019 2019 2019 2019 Total interest income $27,717 $25,847 $25,931 $25,529 $24,679 Total interest expense 5,415 4,682 5,174 5,038 4,714 Net interest inco
Slide 26: Consolidated Statements of Financial Condition
Consolidated Statements of Financial Condition Consolidated Statements of Financial Condition March 31, 2020 Dec. 31, 2019 Sept. 30, 2019 June 30, 2019 March 31, 2019 Assets Cash and cash equivalents $83,107 $70,760 $85,675 $64,007 $69,672 Securities available for sale 448,043 432,233 423,193 424,25
Slide 27: Capital Management
Capital Management Steady Tier 1 Leverage Ratio 9.91% 10.69% 981% 1231/18 1231/19 3/31/20 = Well Capitalized Excess
Slide 28: Deposit Market Share by County
Deposit Market Share by County Note: Market share data as of October 16, 2019. Source: SNL Mahoning Top 10 2019 Rank Company Branches Deposits ($000) Market Share (%) 1 The Huntington National Bank 17 1,347,114 24.98% 2 Home Savings Bank 10 1,068,628 19.81% 3 The Farmers National Bank of Cnfld. 8 87
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