-- Net Interest Income increased 15% in 2010 from the first quarter of
2009.
-- Pre-tax pre-provision income increased 42% from the first quarter in
2009.
-- Corporation reports a 7% increase in loans and a 15% increase in
deposits over last twelve months.
-- Non-performing loans represent 1.76% of total loans at quarter-end.
-- Efficiency ratio improves to 64% for first quarter of 2010, compared to
67% in the same quarter of 2009.
-- Trust Company contributes $1.2 million to non-interest income during the
first quarter.
CANFIELD, Ohio--(BUSINESS WIRE)--
Farmers National Banc Corp. (OTCBB: FMNB), today reported consolidated
net income totaling $1.067 million for the quarter ended March 31, 2010,
or $0.08 per diluted share. Total assets increased 10.76% compared to
March 31, 2009, driven by an increase in net loans of 6.67% and high
quality core deposit growth of 14.98%. Additionally, shareholder equity
increased 5.12%.
Frank L. Paden, President & CEO stated, "Our pre-tax, pre-provision,
income increased to $3.6 million for the first quarter of 2010, which
represents a 42% increase over the $2.5 million reported for the first
quarter of 2009. This increase was driven by a $1.1 million or 14.7%
increase in net interest income. Our first quarter net income results
improved over the fourth quarter of 2009 primarily because of a lower
loan loss provision. Our management team continues to actively monitor
and address asset quality issues, and we have increased the allowance
for loan losses accordingly."
Net income was $1.067 million for the quarter ended March 31, 2010, or
$0.08 per diluted share, compared to $945 thousand or $.07 per diluted
share for the preceding quarter. Net income for the quarter ended March
31, 2009 was $1.684 million, or $0.13 per diluted share. Returns on
average assets and average equity equate to 0.43% and 5.25%
respectively, compared to 0.76% and 8.77% at this same time in 2009.
The Company's total assets reported at March 31, 2010 are $1.040
billion, an increase of 10.76% compared to $939.360 million in total
assets recorded at March 31, 2009. Net loans are reported at $601.253
million on March 31, 2010, versus $563.660 million at the same time in
2009, an increase of $37.593 million, or 6.67%. Over this same period,
deposits increased $101.193 million or 14.98% from $675.602 million on
March 31, 2009 to $776.795 million at March 31, 2010.
Stockholders' equity totaled $82.477 million or 7.93% of total assets at
March 31, 2010, an increase of $4.02 million, or 5.12%, compared to
$78.457 million at March 31, 2009. The Company's tangible book value
also increased from $5.29 per share at March 31, 2009 to $5.55 per share
at March 31, 2010. 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 stockholders during the past twelve
months. Stockholders received a $0.03 per share cash dividend on March
31, 2010 and a total of $.27 per share cash dividends paid in the past 4
quarters. Book value increased from $5.88 per share in March 2009 to
$6.09 per share on March 31, 2010.
Net Interest Income --- Net interest income was $8.814 million
for the first quarter of 2010, which compares to $7.683 million in the
first quarter of 2009. This represents a 14.7% increase quarter over
quarter. The annualized net interest margin to average earning assets on
a fully taxable equivalent basis was 4.02% for the three months ended
March 31, 2010, compared to 3.90% for the same period in the prior year.
During the past twelve months, yields on earning assets decreased 51
basis points, while the cost of interest bearing liabilities decreased
74 basis points. This equates to an increase in our net interest margin
of 12 basis points, or a 3.08% improvement since March 31, 2009.
Noninterest Income --- Noninterest income was $2.336 million for
the first quarter of 2010, which is a $1.218 million or 109% improvement
over results for the quarter of 2009. The addition of Farmers Trust
Company has contributed $1.2 million to our total noninterest income in
the first quarter 2010, compared to none in the same quarter of 2009.
The addition of the Trust Company, and its growth from $622 million to
over $820 million in assets by year-end, complements our existing core
retail and asset management services.
Noninterest Expense --- Noninterest expenses totaled $7.532
million for the first quarter of 2010, which are $389 thousand less than
the $7.921 million in the preceding quarter. The decrease is the result
of prepayment penalties on Federal Home Loan Bank advances amounting to
$368 thousand expensed in the fourth quarter of 2009 compared to none in
the first quarter of 2010. The current period's total noninterest
expense of $7.532 million is $1.276 million more than the $6.256 million
reported for the same quarter in 2009. This increase is mainly the
result of trust company operating expenses of $1.142 million in 2010
compared to none in 2009. The Company's tax equivalent efficiency ratio
for the quarter ended March 31, 2010 is 63.74% compared to 67.47% in the
prior year's same three month period. The improvement in the efficiency
ratio is the result of the 14.7% improvement in net interest income and
the $1.2 million increase in noninterest income.
Asset Quality --- For the three months ended March 31, 2010,
management provided $2.440 million to the allowance for loan losses, a
decrease of $560 thousand from the preceding quarter and an increase of
$1.990 million over the same period the in the prior year. The increase
compared to the same quarter in the prior year is attributable to the
increase in net charge-offs. Net charge-offs for the quarter ending
March 31, 2010 were $1.958 million compared to $168 thousand for the
same period ending March 31, 2009. The ratio of nonperforming loans to
total loans increased slightly from 1.68% at March 31, 2009 to 1.76% at
March 31, 2010. This increase in non-performing loans is related to a
limited number of commercial/commercial real estate loans. On March 31,
2010, the ratio of the allowance for loan losses (ALLL) to
non-performing loans was 73%, compared to 73% in the preceding quarter
and 61% at March 31, 2009.
As of March 31, 2010, the ALLL/total loan ratio was 1.29% compared to
1.02% at March 31, 2009 and 1.21% at December 31, 2009. The increase in
this particular ratio is attributable to the loan loss provision expense
in 2010 exceeding net charge-offs. On March 31, 2010, the ALLL balance
is $7.882 million, up 35.08% from $5.835 million at March 31, 2009.
John S. Gulas, Executive Vice President and Chief Operating Officer,
stated "We met or exceeded our strategic objectives in 2009 by growing
our market share, improving our efficiency ratio (relative to peers and
adjusting for one time charges), developing a sales culture and
attracting and retaining quality employees. We also built brand
awareness for Farmers as 'Rock Solid,' a 'Safe Harbor,' and a 'Stand
Strong' organization. Our final focus in 2009 was in technology, where
we replaced aging technology by investing in seven new information
systems to provide a platform for future growth. Achievement of these
goals is helping us drive continued revenue growth and to absorb the
additional cost associated with the current economic cycle."
Farmers National Banc Corp. is the bank holding company for the Farmers
National Bank of Canfield, Farmers National Insurance, LLC 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.
Non-GAAP Disclosure
This press release includes disclosure of our tangible common equity
ratio, which is a non-GAAP financial measure. A non-GAAP financial
measure is a numerical measure of historical or future financial
performance, financial position or cash flows that excludes or includes
amounts that are required to be disclosed by generally accepted
accounting principles in the United States (GAAP). The Company believes
that this non-GAAP financial measure provides both management and
investors a more complete understanding of the underlying operational
results and trends and the Company's marketplace performance. The
presentation of this additional information is not meant to be
considered in isolation or as a substitute for the numbers prepared in
accordance with GAAP.
This earnings announcement presents a brief analysis of the assets and
liability structure of the Company 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.
Forward-looking statements speak only as of the date they are made, and
we do not undertake to update them to reflect changes.
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 of Income For the Three Months Ended
March 31, 2010 March 31, 2009
Total interest income $12,126 $11,994
Total interest expense 3,312 4,311
Net interest income 8,814 7,683
Provision for loan losses 2,440 450
Other income 2,336 1,118
Other expense 7,532 6,256
Income before income taxes 1,178 2,095
Income taxes 111 411
Net income $1,067 $1,684
Average shares outstanding 13,520 13,232
Pre-tax pre-provision income $3,618 $2,545
Basic and diluted earnings per share $0.08 $0.13
Cash dividends 406 1,588
Cash dividends per share 0.03 0.12
Consolidated Statements of Financial Condition March 31, 2010 March 31, 2009
Assets
Cash and cash equivalents $69,894 $57,218
Securities available for sale 316,370 270,970
Loans 609,135 569,495
Less allowance for loan losses 7,882 5,835
Net Loans 601,253 563,660
Other assets 52,914 47,512
Total Assets $1,040,431 $939,360
Liabilities and Stockholders' Equity
Deposits $776,795 $675,602
Other interest-bearing liabilities 177,725 180,548
Other liabilities 3,434 4,753
Total liabilities 957,954 860,903
Stockholders' Equity 82,477 78,457
Total Liabilities and Stockholders' Equity $1,040,431 $939,360
Period-end shares outstanding 13,546 13,338
Book value per share 6.09 5.88
Tangible book value per share 5.55 5.29
Ratios
Net Interest Margin (Annualized) 4.02% 3.90%
Efficiency Ratio (Year-to-date on a tax 63.74 67.47
equivalent basis)
Return on Average Assets (Annualized) 0.43 0.76
Return on Average Equity (Annualized) 5.25 8.77
Total Capital to Risk Weighted Assets (a) 12.17 12.24
Tier 1 Capital to Risk Weighted Assets (a) 10.94 11.26
Tier 1 Capital to Average Assets (a) 7.06 7.57
Equity to Asset Ratio 7.93 8.35
Tangible Common Equity Ratio (*) 7.27 7.57
Dividends to Net Income (Year-to-date) 38.05 94.30
Net Loans to Assets 57.79 60.00
Loans to Deposits 78.42 84.29
Allowance for Loan Losses to Total Loans 1.29 1.02
Non-performing Loans to Total Loans 1.76 1.68
Annualized Net Charge-Off's to Average Net Loans 1.32 0.12
Outstanding
Allowance to Nonperforming Loans 73.39 60.83
Nonperforming Assets to Total Assets 1.04 1.05
(a) March 31, 2010 ratio is estimated
Unaudited
* The tangible common equity ratio is calculated by dividing total
common stockholders' equity by total assets, after reducing both amounts
by intangible assets. The tangible common equity ratio is not required
by GAAP or by applicable bank regulatory requirements, but is a metric
used by management to evaluate the adequacy of our capital levels. Since
there is no authoritative requirement to calculate the tangible common
equity ratio, our tangible common equity ratio is not necessarily
comparable to similar capital measures disclosed or used by other
companies in the financial services industry. Tangible common equity and
tangible assets are non-GAAP financial measures and should be considered
in addition to, not as a substitute for or superior to, financial
measures determined in accordance with GAAP. With respect to the
calculation of the actual unaudited tangible common equity ratio as of
March 31, 2010, reconciliations of tangible common equity to GAAP total
common stockholders' equity and tangible assets to GAAP total assets are
set forth below:
Reconciliation of Common Stockholders' Equity to Tangible Common Equity
March 31, 2010 March 31, 2009
Stockholders' Equity $82,477 $78,457
Less Goodwill and other intangibles 7,355 7,919
Tangible Common Equity $75,122 $70,538
Reconciliation of Total Assets to Tangible
Assets
March 31, 2010 March 31, 2009
Total Assets $1,040,431 $939,360
Less Goodwill and other intangibles 7,355 7,919
Tangible Assets $1,033,076 $931,441
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