-- Net Interest Income increased $6.760 million or 26% in 2009, compared to
2008.
-- Corporation reports a 10% increase in loans and a 20% increase in
deposits during 2009.
-- Non-performing loans represent 1.66% of total loans at year-end.
-- Efficiency ratio at 67% for 2009, which was impacted by additional FDIC
insurance expenses and acquisition expenses.
-- Trust Company increases Corporation's non-interest income during 2009.
CANFIELD, Ohio--(BUSINESS WIRE)--
Farmers National Banc Corp. (OTCBB: FMNB), today reported consolidated
net income totaling $5.842 million for the full twelve months ended
December 31, 2009, or $0.44 per diluted share, compared to $5.665
million, or $0.43 per diluted share for the same period in 2008. Returns
on average assets and average equity equate to 0.60% and 7.32%
respectively, compared to 0.67% and 7.67% at this same time in 2008.
For the quarter ended December 31, 2009, net income was $945 thousand,
compared to $1.556 million in the preceding quarter and $1.408 million
in the prior-year quarter. Diluted earnings per share were $0.07 for the
current quarter compared with $0.12 for the preceding quarter and $0.11
for the fourth quarter in 2008.
The Company's total assets reported at the end of 2009 are $1.015
billion, compared to $1.016 billion in total assets recorded at
September 30, 2009, and $880.370 million in assets as of the end of
2008. Net loans are reported at $601.995 million on December 31, 2009,
versus $546.452 million at the same time in 2008, an increase of $55.543
million, or 10.16%. Over this same period, deposits increased $129.542
million or 19.99% from $648.010 million on December 31, 2008 to $777.552
million at December 31, 2009.
Shareholders Equity totaled $80.628 million at December 31, 2009, an
increase of $3.526 million, or 4.57%, compared to $77.102 million at
December 31, 2008. The increase in equity was a result of net income and
mark to market adjustments in the Corporation's investment securities,
offset by cash dividends paid to shareholders during 2009
Commenting on these results, Frank L. Paden, President & CEO stated,
"Our fourth quarter net income results declined primarily due to the
increase in the provision for the allowance for loan losses compared to
the linked quarter and the same quarter in 2008. Our management team
took a proactive stance to address some asset quality deterioration,
specifically, in the bank's commercial real estate portfolio and
reserved accordingly. During 2009, net income increased 3.12% and our
company is reporting a 15.27% increase in total assets. These results
equated to a 4.57% increase in shareholder's equity. Although
challenging, 2009 was a year of positive change for Farmers National
Banc Corp. In summary, we grew the our balance sheet, exceeding $1
billion dollars in total assets; we expanded our products and services
to offer a full line of trust services through an acquisition and the
introduction of Farmers Trust Company; we now offer a full line of
insurance related products through Farmers National Insurance LLC; and
we made investments in technology and human capital to enhance
efficiencies within the total corporation."
Net Interest Income --- Net interest income was $8.846 million
for the fourth quarter of 2009, which compares to $8.471 million in the
preceding quarter and $7.355 million in the fourth quarter of 2008. For
the twelve months ended December 31, 2009, the net interest income was
$33.228 million compared to $26.468 million for the same twelve-month
period in 2008. This represents a 25.54% increase year over year. The
net interest income to average earning assets on a fully taxable
equivalent basis was 3.88% for the twelve months ended December 31,
2009, compared to 3.58% at the end of 2008. During the past year, yields
on earning assets decreased 39 basis points, while the cost of interest
bearing liabilities decreased 84 basis points. This equates to an
increase in our net interest margin by 30 basis points, or an 8.38%
increase since the end of 2008.
Non-Interest Income --- Non-interest income was $3.018 million
for the fourth quarter of 2009, which compares to $2.609 million in the
preceding quarter and $827 thousand in the fourth quarter of 2008.
Non-interest income totaled $9.388 million for the year ended December
31, 2009, as compared to $2.617 million for the same twelve month period
in 2008. Excluding the pre-tax non-cash impairment charge and security
gains recognized in both years, non-interest income increased $3.591
million during 2009. December 31, 2009 year end totals include $943
thousand in security gains compared to $474 thousand in gains for 2008.
The primary component that increased the non-interest income during 2009
was from trust fees, which totaled $3.469 million.
Non-Interest Expense --- The Company's tax equivalent efficiency
ratio for 2009 is 67.00% compared to 63.02% in the prior year's same
twelve-month period. This ratio and the increase in non-interest
expenses during this past year was impacted by higher FDIC insurance
expenses which amounted to additional expenses of $1.356 million,
investment banking and closing fees related to the acquisition of the
Trust Company and additional salaries and employee benefits resulting
from the addition of the Trust Company staff of twenty-seven full time
employees. Non-interest expenses totaled $7.921 million for the fourth
quarter of 2009, which compares to $7.675 million in the preceding
quarter and $5.643 million for the fourth quarter of 2008. For the year
ended December 31, 2009, operating expenses were $29.655 million,
compared to $21.013 million in 2008.
Asset Quality --- For the three months ended December 31, 2009,
management provided $3 million to the allowance for loan losses, an
increase of $1.450 million from the preceding quarter and an increase of
$2.140 million over the same period the prior year. These increases are
attributable to the increase in the ratio of nonperforming loans to
total loans, which increased from .97% at December 31, 2008 to 1.66% on
December 31, 2009. As of December 31, 2009, total non-performing loans
were $10.103 million, compared to $12.640 million on September 30, 2009
and $5.337 million at this same time in 2008. This increase in
non-performing loans is related to a limited number of
commercial/commercial real estate loans. On December 31, 2009, the ratio
of the allowance for loan losses (ALLL) to non-performing loans was 73%,
compared to 57% in preceding quarter and 104% at December 31, 2008.
Net charge-offs for the quarter ending December 31, 2009 were $2.810
million compared to $980 thousand in the third quarter of 2009 and $740
thousand at for the same period ending December 31, 2008. This increase
is primarily due to one large relationship. For the year ended December
31, 2009, net charge-offs total $4.203 million, representing an
annualized ratio of 0.73% of net charge-offs to average loans. For this
twelve month period in 2008, net charge offs were $1.326 million,
representing .26% of average loans annualized.
Based on the evaluation of the adequacy of the allowance for loan losses
(ALLL), management believes that the allowance for loan losses at
December 31, 2009 was adequate and reflects probable incurred losses in
the portfolio. As of December 31, 2009, the ALLL/total loan ratio was
1.21% compared to 1.18% at September 30, 2009 and 1.01% in December
2008. The increase in this particular ratio is attributable to the
increase in the amount of loan loss provision expense in 2009. On
December 31, 2009, the ALLL balance is $7.400 million, up 33.26% from
$5.553 million at year-end December 31, 2008. With the increase in
non-performing loans over the past year and the increase in net
charge-offs, management felt it was prudent to increase the ALLL
provision accordingly. The adequacy of the ALLL is analyzed monthly and
adjusted as necessary to absorb probable loan losses. It may be
necessary to increase this reserve based on various factors such as
growth in the overall loan portfolio, more weakening in economic
conditions or should any borrower's financial strength deteriorate that
would impact cash flow and their ability to service the debt.
Equity - Total shareholder equity was $80.628 million as of
December 31, 2009, compared to $77.102 million in December 31, 2008.
This represents a 4.57% increase. Shareholders received a $0.06 per
share cash dividend on December 31, 2009 and a total of $.36 per share
cash dividends paid in 2009. Book value increased from $5.83 per share
in December 2008 to $5.96 per share on December 31, 2009.
Farmers National Banc Corp. is the bank holding company for the Farmers
National Bank of Canfield and Farmers Trust Company. Farmers' operates
sixteen banking offices throughout Mahoning, Trumbull and Columbiana
Counties and two trust offices located in Youngstown and Howland. The
bank offers a wide range of banking and investment services to companies
and individuals, and maintains a website at www.fnbcanfield.com.
This earnings announcement presents a brief analysis of the assets and
liability structure of the Corporation and a brief discussion of the
results of operations for each of the periods presented. Certain
statements in this announcement that relate to Farmers National Banc
Corp.'s plans, objectives, or future performance may be deemed to be
forward-looking statements within the Private Securities Litigation
Reform Act of 1995. Such statements are based on management's current
expectations. Actual strategies and results in future periods may differ
materially from those currently expected because of various risks and
uncertainties.
Among the important factors that could cause actual results to differ
materially are interest rates, changes in the mix of the company's
business, competitive pressures, general economic conditions and the
risk factors detailed in the company's other periodic reports and
registration statements filed with the Securities and Exchange
Commission.
Farmers National Banc Corp. and Subsidiaries
Consolidated Financial Highlights
(Amounts in thousands, except per share data)
Consolidated Statements For the Three Months Ended For the Twelve Months Ended
of Income
Dec 31, 2009 Dec 31, 2008 Dec 31, 2009 Dec 31, 2008
Total interest income $12,803 $12,062 $49,775 $46,415
Total interest expense 3,957 4,707 16,547 19,947
Net interest income 8,846 7,355 33,228 26,468
Provision for loan 3,000 860 6,050 1,420
losses
Other income 3,018 827 9,388 2,617
Other expense 7,921 5,643 29,655 21,013
Income before income 943 1,679 6,911 6,652
taxes
Income taxes (2) 271 1,069 987
Net income $945 $1,408 $5,842 $5,665
Basic and diluted $0.07 $0.11 $0.44 $0.43
earnings per share
Cash dividends 808 1,577 4,801 6,802
Cash dividends per 0.06 0.12 0.36 0.52
share
Book value per share 5.96 5.83 5.96 5.83
Consolidated Statements Dec 31, 2009 Dec 31, 2008
of Financial Condition
Assets
Cash and cash $51,160 $24,049
equivalents
Securities available 309,368 271,605
for sale
Loans 609,395 552,005
Less allowance for loan 7,400 5,553
losses
Net Loans 601,995 546,452
Other assets 52,285 38,264
Total Assets $1,014,808 $880,370
Liabilities and
Stockholders' Equity
Deposits $777,552 $648,010
Other interest-bearing 153,081 151,899
liabilities
Other liabilities 3,547 3,359
Total liabilities 934,180 803,268
Stockholders' Equity 80,628 77,102
Total Liabilities and $1,014,808 $880,370
Stockholders' Equity
Period-end shares 13,520 13,230
outstanding
Ratios
Return on Average 0.60% 0.67%
Assets
Return on Average 7.32 7.67
Equity
Efficiency Ratio
(Year-to-date on a tax 67.00 63.02
equivalent basis)
Capital to Asset Ratio 7.95 8.76
Dividends to Net Income 82.18 120.07
(Year-to-date)
Net Loans to Assets 59.32 62.07
Loans to Deposits 78.37 85.18
Allowance for Loan 1.21 1.01
Losses to Total Loans
Non-performing Loans to 1.66 0.97
Total Loans
Unaudited
Source: Farmers National Banc Corp.
Contact: Farmers National Banc Corp.
Frank L. Paden, President, 330-533-3341
330-533-0451 (FAX)
Email: exec@fnbcanfield.com