Farmers National Banc Corp. · NASDAQ:FMNB
Farmers National Banc — Debt Investor Presentation (November 2021)
26 slides from Farmers National Banc's debt investor presentation, Nov 12, 2021
Slide 1: Farmers National Banc Corp. November 2021
Exhibit 99.2 ” FARMERS ~ i NATIONAL BANC CORP. November 2021
Slide 2: Disclosure Statement: Cautionary Note Regarding Forward-Looking Statements
Disclosure Statement Cautionary Note Regarding Forward-LookingStatements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the strategic vision, the financial condition, results of operations,
Slide 3: Terms of Proposed Offering
Terms of Proposed Offering Issuer Farmers National Banc Corp. (NASDAQ: FMNB) Security Type Fixed-to-Floating Rate Subordinated Notes due December 2031 Offering Format Regulation D Private Placement Coupon 3.125% fixed for five years; floating quarterly at 220 bps over 3 Month Term SOFR thereafter Te
Slide 4: About Farmers National Banc Corp.
About Farmers National Banc Corp. (1) • $4.1 billion in banking assets • $3.0 billion in wealth management assets under care • Book value has increased at a 11% 5-year CAGR • $0.44 annualized dividend (2) • #1 Performing Bank headquartered in Ohio (3) • Named a Best Employer in Ohio the past 2 years
Slide 5: Big Bank Capabilities, Local Bank Service
Big Bank Capabilities, Local Bank Service Consumer Banking Business Banking Wealth Management • Retail Banking• Business Loans• Private Banking • Consumer Loans• Business Checking• Trust Services • Mortgage Loans• Business Mobile Banking• Investment Services • Online & Mobile Banking• Treasury Manag
Slide 6: Local, Established & Experienced Leadership Team
Local, Established & Experienced Leadership Team Over 218 years of combined experience, 86 of which have been with FMNB Troy Adair (age 55) Kevin Helmick (age 49) Amber Wallace (age 55) Brian Jackson (age 52) Executive Vice President, President & Executive Vice President, Senior Vice President, Chie
Slide 7: Harnessing Modern Banking Technology
Harnessing Modern Banking Technology New technologies, video tellers, Focus on digital Farmers’ and ITMs connected to innovations and customer Lab Branch centralized support specialists experience Insights gained will aid in Embracing rolling out digital new technology marketing and services strateg
Slide 8: History of Expansion and Acquisition Growth
History of Expansion and Acquisition Growth Six acquisitions since 2015 Maple Leaf Founded in 1887 Canfield, OH 2019 Target franchises with similar culture, compelling reputation, and strong Bowers Insurance customer base 2021 2016 National Focus on businesses that support cross Cortland Bancorp Ban
Slide 9: Well-Positioned in Strong Markets
Well-Positioned in Strong Markets Compelling Market Opportunities • One of the largest community banks headquartered in Ohio • Within core Columbiana, Mahoning, and Wayne counties, Farmers th ranked by deposits and 14 largest bank overall by deposits has a #2 deposit market share, representing a str
Slide 10: Balance Sheet Summary
Balance Sheet Summary (1) Total Assets ($MM) Gross Loans HFI ($MM) $3,317 $3,071 $1,953 $2,449 $1,841 $1,812 $2,329 $1,736 $2,159 $1,577 $1,966 $1,428 2016 2017 2018 2019 2020 YTD 2016 2017 2018 2019 2020 YTD Total Deposits ($MM) Total Equity ($MM) $378 $350 $2,866 $299 $2,611 $262 $242 $2,009 $213
Slide 11: Profitability
Profitability Return on Average Assets Return on Average Equity 1.90% 17.1% 1.50% 1.46% 1.46% 13.1% 12.8% 12.6% 9.9% 1.09% 9.7% 1.07% 2016 2017 2018 2019 2020 YTD 2016 2017 2018 2019 2020 YTD (1) Non-Interest Income / (Net Interest Income + Non-Interest Income) Efficiency Ratio (FTE) 27.1% 61.6% 59.
Slide 12: Diverse Revenue Streams
Diverse Revenue Streams YTD Sources of Income ($MM) YTD Fee Income Other 14% Deposit Service Charges, Debit Cards & ETF Fees Noninterest Income 21% $28.7 Net Gain on Loan Sales & Other Mortgage Banking 22% Net Interest Income Trust, Retirement $78.3 Fees & Investment Commissions 34% Insurance 10% •
Slide 13: Loan Portfolio Overview
Loan Portfolio Overview (at September 30, 2021) (1) Overview Loan Portfolio Commercial Real Estate • $1.8 billion gross loans (excluding PPP) 12.0% • Diverse loan mix Commercial 10.0% 36.5% • Farmers’ practice is to lend primarily within its market area Residential Real Estate 5.6% HELOC 19.9% Consu
Slide 14: Asset Quality Trends
Asset Quality Trends (at September 30, 2021) Net Charge-offs / Avg. Loans Loans Delinquent 30-89 Days / Total Loans 0.47% 0.06% 0.45% 0.39% 0.37% 0.35% 0.04% 0.04% 0.04% 0.02% Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Nonperforming Loans / Total Loans ($MM) $20.
Slide 15: Allowance for Credit Losses
Allowance for Credit Losses (at September 30, 2021) Overview Q3 Allowance for Credit Losses Detail ($000) -$437 $24,806 • Farmers adopted CECL beginning January 1, 2021 -$947 • In adopting CECL, Farmers recorded a one-time adjustment to equity of $1.9 million -$411 +$125 $23,136 6/30/2021 Unfunded P
Slide 16: COVID-19 Assistance: Standing Strong for our Customers
COVID-19 Assistance Standing Strong for our Customers COVID-19 Modifications PPP Loans Dollar Balance (in millions) Number of Loans $848 5 $199.8 $83.9 $230.1 $53.6 Million Million Million Million nd Initial PPP 2 PPP Total PPP 1 Round Round Forgiveness Balance $5 (at 9/30/2021) 9/30/2020 9/30/2021
Slide 17: Net Interest Income and NIM Trends
Net Interest Income and NIM Trends (at September 30, 2021) Overview Net Interest Income ($MM) $26.5 $26.5 • Farmers’ model has produced strong net interest income, and the $25.8 $25.3 company has a history of outperforming its peer group’s yield on loans $24.2 and cost of funds • Outperformed peer g
Slide 18: Noninterest Income Trends
Noninterest Income Trends (at September 30, 2021) Overview Total Noninterest Income ($MM) $10.5 • From 2015 to 2020, noninterest income has increased at a 15.2% CAGR $10.2 • Internal sales programs to unify focus and identify opportunities $9.5 • Trust and Wealth Management, along with mortgage bank
Slide 19: Noninterest Expense Trends
Noninterest Expense Trends (at September 30, 2021) (1) Overview Noninterest Expense to Quarterly Avg. Assets 2.35% 2.35% • Overall focus on driving efficiencies 2.20% • Profit improvement committee meets biweekly to discuss efficiency 2.07% 2.02% initiatives Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 N
Slide 20: Investment Securities
Investment Securities (at September 30, 2021) Overview Portfolio Composition Treasury & U.S. Gov. • Farmers recognized $979,000 of realized gains on the income 7.7% State & SBA statement in the nine months ended September 30, 2021 Political 0.4% 41.6% CMO - Res • 3Q 2021 yield on securities portfoli
Slide 21: Deposit Trends
Deposit Trends (at September 30, 2021) Overview Deposit Trends ($MM) $2,866 • We are proud to say our bank is built on core deposits $2,833 $2,779 • Total deposits increased 3.1% to $2.87 billion quarter over quarter $2,611 $2,538 • Noninterest-bearing represent 23.6% of total deposits Q3 2020 Q4 20
Slide 22: Capital and Liquidity
Capital and Liquidity (at September 30, 2021) (1) Overview Tangible Common Equity to Tangible Assets • Total risk-based capital well above well capitalized threshold 10.06% 9.94% 9.90% 9.82% • $377.5 million in total stockholders’ equity • Loan growth funded through core deposits 9.10% (1) • Tangibl
Slide 23: Pro Forma Capital Ratios
Pro Forma Capital Ratios (at September 30, 2021) Pro Forma Balance Sheet At Time Zero $75.0MM ($000s, except per share data) FMNB Sub Debt Pro Forma 9/30/2021 Issuance 9/30/2021 Assets Cash & Cash Equivalents $ 79,808 $ - $ 79,808 Securities 1,202,402 73,625 1,276,027 Gross Loans 1,896,844 - 1,896,8
Slide 24: Double Leverage & Interest Coverage
Double Leverage & Interest Coverage $ in thousands Offering Assumptions Subordinated Debt Gross Proceeds $ 75,000 Subordinated Debt Coupon 3.125% Subordinated Debt Down-streamed to Bank 0.00% Double Leverage Year Ended YTD 12/31/19 12/31/20 9/30/21 Bank-Level Equity $ 259,627 $ 336,326 $ 325,219 Con
Slide 25: Cortland Acquisition Impact
Cortland Acquisition Impact Total Assets ($MM) Gross Loans HFI ($MM) $4,107 $2,386 $3,317 $1,894 Q3 2021 Pro Forma Q3 2021 Pro Forma Total Deposits ($MM) Tangible Common Equity to Tangible Assets 10.06% $3,545 $2,866 9.28% Q3 2021 Pro Forma Q3 2021 Pro Forma Note: Metrics inclusive of merger adjustm
Slide 26: Non-GAAP Reconciliations (Appendix)
Non-GAAP Reconciliations (Appendix) ($000s, except per share data) Annual Quarterly YTD 2016 2017 2018 2019 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q3 2021 Tangible common equity to tangible assets Total common stockholders' equity $213,216 $242,074 $262,320 $299,309 $350,097 $339,968 $350,097
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