Farmers National Banc Corp. · NASDAQ:FMNB
Farmers National Banc — Investor Presentation (November 2014)
28 slides from Farmers National Banc's investor presentation, Nov 17, 2014
Slide 1: Investor Presentation September 30, 2014
Exhibit 99.1 Investor Presentation September 30, 2014
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. Forward-looking statements express management’s current expectations, forecasts of future events or long-term-goals and, b
Slide 3: About Farmers National Banc Corp.
About Farmers National Banc Corp. • Headquarters: Canfield, OH Growing Community • Assets: $1.14 billion Financial Services • Loans: $647 million Company • Deposits: $913.0 million • Banking Locations: 19 • Stock Price (10-31-14): $8.10 • Market Capitalization (10-31-14): $150.33 million Stock Data
Slide 4: Experienced Management Team
Experienced Management Team • Established and experienced management team with over 272 years of combined experience, 109 of which has been with Farmers. Years of Experience FMNB Industry President & Chief Executive Officer Kevin J. Helmick (42) 20+ 20+ EVP, Chief Financial Officer Carl D. Culp (51)
Slide 5: Who We Are
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 – 19 banking locations and 19 ATMs • Sound franchise with commitment to independence and positioned for growth • Profitable throughout cycle, gro
Slide 6: Attractive Deposit Franchise – Deposit Market Share by MSA & County
Attractive Deposit Franchise – Deposit Market Share by MSA & County • Opportunity for growth with approximately 10.50% deposit market share in the Mahoning Valley – Large regional competitors lack focus - Community competitors inwardly focused Mahoning Top 10 Columbiana Top 10 2014 Dep. Market 2014
Slide 7: Commitment to Independence
Commitment to Independence • Four Pillars – Shareholders o 2014 Strategic Initiative o Increased Communication Plan 2014 Community Giving: $189,059 – Customers YTD 10/23/14 Community o Small Business Support Athletics Religious Arts $3,727 o 45% of small business lending $11,560 $1,675 comes from co
Slide 8: Increasing Shareholder Value
Increasing Shareholder Value Stock Price Stable Dividend Policy 9.00 8.00 • Consistently paid a quarterly cash dividend 7.00 6.00 • Current yield 1.50% 5.00 • Dividend payout through September 4.00 30, 2014 was 24.71% of net income 3.00 2.00 1.00 0.00 10 11 12 13 14* 8
Slide 9: Headquartered in Mahoning Valley
Headquartered in Mahoning Valley Compelling Demographics • Approximately 75 -100 miles from Cleveland, Pittsburgh & Erie • 6.8 million people within 100 mile radius • 17 Fortune 500 company world headquarters • 95 colleges and universities campus locations • Northeast Ohio’s manufacturing productivi
Slide 10: Regional Growth Opportunities
Regional Growth Opportunities • Youngstown Business Incubator ranked No. 1 in the world by the 2014 University Business Incubator Index • The TechBelt Initiative received the International Economic Development Council’s Bronze Award for 2013 • Youngstown-Warren Metro ranked number one in the USA in
Slide 11: Regional Growth Opportunities
Regional Growth Opportunities • $1.5 billion project investment in the Youngstown-Warren region in 2013 Total Amounts: $1,535,828,818 Company-Completed Investment Agency-Assisted 198,286,500 Investment 600,271,951 Transportation/ Area Construction Infrastructure 671,267,000 D6 Public Works 34,171,64
Slide 12: Utica Shale Impact
Utica Shale Impact • Energy Products – As of July 5, 2014, 472 wells reported production • Economic Impact – Ohio’s Natural Gas/Crude Oil Exploration Production Industry and the Utica Gas Formation impact: o Jobs (204,000 created or supported by 2015) o Income (Economic Output will increase by over
Slide 13: Utica Shale Impact
Utica Shale Impact • Key Commitments – Steelmaker Vallourec’s $650 million expansion - 350 jobs created. ($57 million Finishing Plant) – Exterran $13 million plant - 100 jobs created – Pennant Midstream, LLC constructed a $375 million pipeline and natural gas processing plant in eastern Mahoning Cou
Slide 14: 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 Ris
Slide 15: Virtual Bank
Virtual Bank since 14e, "FARMERS — NATIONAL BANK EXPLORE THENFEATURES | MOBILE ACCESS FARMERS:REWARDS CUSTOMER SUPPORT @re
Slide 16: 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 –
Slide 17: Growth Focus and Target Metrics
Growth Focus and Target Metrics • 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 nea
Slide 18: 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 o Noninterest income excluding security gains – Fee Income 2014 YTD*: 29% of total gross income o Noninterest income excluding security gains • Wealth Management Build-out Timeline –
Slide 19: Acquisitions to Enhance Fee-Based Revenue
Acquisitions to Enhance Fee-Based Revenue • 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 84% since acquisition – Contributed $5.7 milli
Slide 20: Historical Operating Results
Historical Operating Results • Stable Net Interest Margin Farmers National Banc Corp. – Low Cost Core Deposit Funding Net Interest Margin (%) (Annualized) 4.00 3.50 3.47 3.53 3.56 3.54 3.58 3.00 2.50 2.00 2013 fq3 2013 fq4 2014 fq1 2014 fq2 2014 fq3 • Strong record of profitability – 127 consecutive
Slide 21: Continued Strong Results – Overview of 3Q 2014
Continued Strong Results – Overview of 3Q 2014 • 127 consecutive quarters of profitability • Net income per diluted share for three months ended September 30, 2014 was $0.12, an increase of 33% compared to $0.09 for the third quarter, 2013 • Efficiency ratio for the first three quarters in 2014 impr
Slide 22: Growing and Diverse Revenue Stream
Growing and Diverse Revenue Stream • Continued Focus on Growing Noninterest Income • Non-interest Revenue: 29% of Total Revenue Total Revenue YTD 2014*: $38.1 million 2.8% 12.1% 14.1% 71.0% Net Interest Income Other Non-interest Income Trust Income Insurance & Investment Income *YTD as of 9-30-14 22
Slide 23: Overview of Loan Portfolio
Overview of Loan Portfolio Loan Portfolio Mix - September 30, 2014 • Diverse loan mix Commercial Residential • No national lending Construction Construction $11,096 $5,173 1.7% 0.8% • No sub-prime lending Commercial & Industrial Commercial Real • Farmers’ practice is to lend $115,102 Estate primaril
Slide 24: Excellent Asset Quality
Excellent Asset Quality Accruing loans OREO 9/30/2014 past due 90 $0.3mm days or more 3.9% Nonaccrual loans $7.0 $0.3mm Accruing loans past due 90 days or more 0.3 3.9% OREO 0.3 Total nonperforming assets (NPAs) $7.6 Troubled Debt Restructuring (TDR) $8.4 Nonaccrual Loans 30-89 days delinquent 4.9 $
Slide 25: Supplemental Information
Supplemental Information 25
Slide 26: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Reconciliation of Common Stockholders' Equity to Tangible Common Equity Sept 30, June 30, March 31, Dec 31, Sept 30, 2014 2014 2014 2013 2013 Stockholders' Equity $121,401 $121,020 $117,323 $113,007 $112,524 Less Goodwill and other intangibles 9,768 9,960 10,151 10,34
Slide 27: Consolidated Statements of Income
Consolidated Statements of Income Consolidated Statements of Income For the Three Months Ended For the Nine Months Ended Sept 30, June 30, March 31, Dec 31, Sept 30, Sept 30, Sept 30, Percent 2014 2014 2014 2013 2013 2014 2013 Change Total interest income $10,413 $10,118 $10,063 $10,298 $10,122 $30,
Slide 28: Consolidated Statements of Financial Condition
Consolidated Statements of Financial Condition Consolidated Statements of Financial Condition Sept 30, June 30, March 31, Dec 31, Sept 30, 2014 2014 2014 2013 2013 Assets Cash and cash equivalents $28,294 $28,070 $29,333 $27,513 $40,303 Securities available for sale 404,895 409,285 427,625 422,985 4
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