Farmers National Banc Corp. · NASDAQ:FMNB
Farmers National Banc — Investor Presentation (August 2014)
28 slides from Farmers National Banc's investor presentation, Aug 14, 2014
Slide 1: Investor Presentation June 30, 2014
1 Investor Presentation June 30, 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: (6-30-14) $7.36 Market Cap: $146.30 million Dividend (yield): $0.12 (1.54%) Highlights 2013 Year-End 2014 YTD Revenue $49.0 million $27.4 million Net Income $7.8 million $4.5 million Net Income per Diluted Share $0.41 $0.24 Tangible B
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 127 years ago 18 branches and 18 ATMs Sound franchise with commitment to independence and positioned for growth Profitable throughout cycle, growing tangible boo
Slide 5: Attractive Deposit Franchise - Deposit Market Share
5 Note: Deposit data as of June 30, 2012 Source: SNL 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 - Deposit Market Share by MSA & County Columbi
Slide 6: Commitment to Independence
6 Commitment to Independence Four Pillars Shareholders Top Five Initiative Increased Communication Plan Customers Small Business Support 46% of small business lending comes from community banks* Associates 332 associates Top 100 employer in the region Community $163,019 Annual Giving *Source: FDIC (
Slide 7: Increasing Shareholder Value
7 Increasing Shareholder Value Stable Dividend Policy Always paid a quarterly cash dividend Current yield 1.54% 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 17 Fortune 500 company world headquarters 95 colleges and universities campus locations Northeast Ohio's manufacturing productivity is on track to outpace the
Slide 9: Mahoning Valley regional recognition
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 The TechBelt Initiative, a cooperative effort among communities from Pittsburgh to Cleveland (including th
Slide 10: Regional Growth Opportunities
10 Source: Regional Chamber, Valley Economic Update, Economic Development Report Card, 2013 Reporting Year Together private companies and public agencies announced more than $1.5 billion in project investment in the Youngstown-Warren region in 2013 This level of investment is made possible through t
Slide 11: Utica Shale Impact
11 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 Ohio Department of Natural Resources, 2014, Horizontal Utica-Point Pleasant Well Activity in Ohio: Columb
Slide 12: Utica Shale Impact: Key Commitments
12 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 Key Commitments Steelmaker Vallourec's $650 million expansion - 350 jobs created. ($57 million Finishing
Slide 13: 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 14: 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 15: Regulatory and 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 16: Growth Focus and Target Metrics
16 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 17: 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 18: Acquisitions to Enhance Fee-Based Revenue
18 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 83% since acquisition Contributed $5.7 million to non-interest income in 2013 National Associat
Slide 19: Historical Operating Results
19 High net interest margin which has exceeded Midwest banks1 peer average 3.54% 2Q 2014 3.58% Year-end 2013 Strong record of profitability 126 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 20: 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 21: Continued Strong Results - Overview of 2Q 2014
21 126 consecutive quarters of profitability Net income per diluted share for three months ended June 30, 2014 was $0.13, an increase of 30% compared to $0.10 for the second quarter, 2013 Efficiency ratio for the second quarter improved to 69.68%, compared to 77.16% for the same quarter in 2013 Loan
Slide 22: Growing and Diverse Revenue Stream
22 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 23: Overview of Loan Portfolio
23 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 3% of loan portfolio is construction loans Loan Portfolio Mix - June 30, 2014 Overview of Loan Portfolio Not
Slide 24: Excellent Asset Quality
24 Excellent Asset Quality Note: Dollars in millions; Asset quality ratios exclude troubled debt restructuring 6/30/2014 Nonaccrual loans $7.8 Accruing loans past due 90 days or more 0.3 OREO 0.4 Total nonperforming assets (NPAs) $8.5 Troubled Debt Restructuring (TDR) $8.6 Loans 30-89 days delinquen
Slide 25: Supplemental Information
25 Supplemental Information
Slide 26: GAAP to Non-GAAP Reconciliation
26 GAAP to Non-GAAP 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 27: Consolidated Statements of Income
27 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 For the Six Months Ended For the Six Months Ended For the Six Months Ended June 30, March 31,
Slide 28: Consolidated Statements of Financial Condition
28 Consolidated Statements of Financial Condition Consolidated Statements of Financial Condition Consolidated Statements of Financial Condition June 30, March 31, Dec. 30, Sept 30, June 30, 2014 2014 2013 2013 2013 Assets Cash and cash equivalents $28,070 $29,333 $27,513 $40,303 $26,587 Securities a
Farmers National Banc — Investor Presentation (August 2014) on 6ix