Farmers National Banc Corp. · NASDAQ:FMNB
Farmers National Banc — Q3 2023 Earnings Presentation
21 slides from Farmers National Banc's earnings presentation, Oct 25, 2023
Slide 1: Q3 2023 Investor Presentation
Exhibit 99.2 Q3 2023 Investor Presentation NASDAQ: FMNB
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: About Farmers National Banc Corp.
About Farmers National Banc Corp. • $5.0 billion in banking assets • $3.2 billion in wealth management assets under care • $0.68 (6.2%) annualized dividend yield* • Named a Best Employer in Ohio the past 2 years** • Founded in 1887 • 163 consecutive quarters of profitability • Strong and diverse fra
Slide 4: Local, Established & Experienced Leadership Team
Local, Established & Experienced Leadership Team Kevin Helmick (51) Troy Adair (57) Tim Carney (57) Jim Gasior (62) Amber Wallace (57) Michael Matuszak (55) President & Senior Executive Vice President, Senior Executive Vice President, Senior Executive Vice President, Senior Executive Vice President,
Slide 5: Farmers Strategic Vision
Farmers Strategic Vision Leveraging our History with Modern Banking Technologies to Support our Future Invest in our Franchise Drive Financial Excellence • Leverage technology• Strive for performance metrics in top quartile ranking vs. peer group • Drive efficiencies through Six Sigma operating fram
Slide 6: Proven Acquisition History and Strategy
Proven Acquisition History and Strategy Long-term strategy of value-enhancing acquisitions $6,000 Emclaire Seven acquisitions in the past eight Financial years, including recently announced (2023) acquisition of Emclaire Financial $5,000 Cortland Bancorp (2021) Target franchises with similar culture
Slide 7: Financial Performance
Financial Performance NASDAQ: FMNB
Slide 8: Balance Sheet Strengths
Balance Sheet Strengths (1) 9/30/23 12/31/22 Improved Customer Deposits** $4.3 billion* $3.4 billion ✓ Cash Balances $93.9 million $75.6 million ✓ (1) Loan-to-Deposit Ratio 70.2% 67.5% ✓ Nonperforming Loans to Total Loans 0.58% 0.62% ✓ Allowance to Nonperforming Loans 189.2% 182.3% ✓ *This figure in
Slide 9: Core Results Overview
Core Results Overview Core Net Income • Record core net income in 2022 $65,000 • Core EPS remains strong through challenging environments $55,000 $45,000 $35,000 $25,000 $15,000 $5,000 2019 2020 2021 2022 YTD 9/30/23 Core EPS Core Return on Assets 1.83% $2.50 $2.13 1.55% 1.54% 1.51% $1.89 $2.00 1.23
Slide 10: Loan Portfolio Overview
Loan Portfolio Overview Overview Rate Type Segments • Total loans $3.2 billion Variable, 14% • Diverse loan mix • Farmers’ practice is to lend primarily within its market area Fixed, 52% Adjustable, 34% Total Loans (in millions) Net Loans to Assets $3,500.00 73.4% 66.9% $3,000.00 63.0% 58.3% $2,500.
Slide 11: CRE Overview
CRE Overview CRE Breakdown Construction, • Well diversified portfolio 6% Owner Multifamily, • Strong credit culture Occupied, 29% 10% • Independent loan review Non-owner Occupied, 55% CRE Categories Loans by Industry Type 8% Category Balance % of CRE % of Port 12% Retail $ 353,114 27% 11% Commercial
Slide 12: Asset Quality Trends
Asset Quality Trends Overview Annualized Net Charge-Offs to Avg. Net Loans • Early-stage delinquencies were $13.3 million, or 0.42% of total 0.11% loans at September 30, 2023, compared to $9.6 million, or 0.40% of 0.09% total loans at December 31, 2022 0.07% • Conservative underwriting practices 0.0
Slide 13: Securities Portfolio Overview
Securities Portfolio Overview CMOs, 6.3% Mortgage Corporates, 1.7% • All of the Investment securities portfolio is categorized as U.S. Government, Backed available for sale 10.0% Securities • All MBS and CMOs are U.S. government agency issued 40.9% • All municipal securities are investment grade, ma
Slide 14: Deposit Trends
Deposit Trends Customer Deposit Composition (in millions) Overview • We are proud to say our bank is built on core deposits $4,500 • Total deposits: $4.51 billion $4,000 • Noninterest-bearing stood at 23.0% of total deposits $3,500 $3,000 $2,500 Customer Deposit Composition (in millions) $2,000 $4,0
Slide 15: Liquidity
Liquidity Farmers National Banc Corp. has the following sources of liquidity at the holding company as of September 30, 2023: • $60.6 million of cash and equivalents • $5.0 million in unsecured lines of credit with a zero balance Farmers National Bank has the following sources of liquidity as of Sep
Slide 16: Net Interest Income and NIM Trends
Net Interest Income and NIM Trends Overview Net Interest Income (in thousands) $140,000 • Focused on growing loans to manage net interest margin $120,000 • Managing cost of funds and deposit betas through rising rate $100,000 environment $80,000 $60,000 $40,000 $20,000 2019 2020 2021 2022 YTD 9/30/2
Slide 17: Noninterest Income Trends
Noninterest Income Trends Overview Total Noninterest Income* (in thousands) $50,000 • Robust Trust, Wealth Management and Insurance businesses $40,000 • Diverse revenue sources • Working to increase noninterest income to total revenue $30,000 $20,000 $10,000 $- 2019 2020 2021 2022 YTD 9/30/2023 Noni
Slide 18: Noninterest Expense Trends
Noninterest Expense Trends 1) (1) Overview Noninterest Expense to Average Assets • Overall focus on driving efficiencies 2.71% 2.43% • The Company recently added the position of Chief Operating Officer 2.08% 2.05% 1.98% who will spearhead process improvement efforts • Track record of prudent expense
Slide 19: Capital Overview
Capital Overview Tangible Equity to Tangible Assets • All regulatory capital ratios above well-capitalized threshold 10.26% 9.22% • Announced 1,000,000 share repurchase program in Q1 2023 8.92% • Strong dividend payout 10.67% 9.94% 9.15% 10.08% 7.88% 4.79% 2.61% 2019 2020 2021 2022 9/30/2023 Tangibl
Slide 20: Appendix – Non GAAP Reconciliations
Appendix – Non GAAP Reconciliations Acquisition related provision - after tax - - 3,846 - 6,077 Law suit settlement income - after tax 399 - - ( 6,616) - Law suit settlement contingent legal expense - after tax - - - 1,639 620 Charitable donation - after tax - - - 4,740 - FHLB prepayment penalties -
Slide 21: Appendix – Non GAAP Reconciliations
Appendix – Non GAAP Reconciliations 2019 2020 2021 2022 YTD '23 Total assets $ 2,449,158 $ 3,071,148 $ 4,142,749 $ 4,082,200 $ 4 ,971,163 Less goodw ill and other intangibles 42,645 49,617 102,606 101,666 191,326 Tangible Assets $ 2,406,513 $ 3,021,531 $ 4,040,143 $ 3,980,534 $ 4,779,837 Stockholder
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