Farmers National Banc Corp. Announces Strong Third Quarter 2021 Results

  • Record net income of $16.0 million for the quarter
  • Earnings per diluted share of $0.56 ($0.58 excluding merger costs) up 47% per share from the third quarter of 2020
  • 155 consecutive quarters of profitability
  • Average deposit costs were 19 basis points for third quarter of 2021 down 7 basis points from second quarter 2021
  • 3.2% growth in deposits in the current quarter compared to the second quarter 2021
  • Strong net interest margin of 3.47%, or 3.37% excluding the impact of PPP loans and acquisition marks
  • Efficiency ratio of 46.0% for the third quarter of 2021
  • Allowance for credit losses ratio of 1.22%, or 1.26% excluding PPP loans for the third quarter of 2021
  • Return on average assets was 1.92% for the third quarter of 2021
  • ROAE and ROATE (non-GAAP) was 16.9% and 19.6%, respectively, for the third quarter of 2021

Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced financial results for the three and nine months ended September 30, 2021.

Net income for the third quarter of 2021 was $16.0 million, or $0.56 per diluted share, which compares to $10.9 million, or $0.38 per diluted share, for the three months ended September 30, 2020. The results for the quarter were positively impacted by a negative provision for credit losses totaling $948,000 pre-tax which was primarily due to a release of reserves for credit losses. Net income excluding acquisition costs (non-GAAP) for the quarter ended September 30, 2021 was $16.5 million or $0.58 per diluted share, compared to $10.9 million or $0.39 per diluted share for the same quarter in 2020.

Net income for the nine months ended September 30, 2021, totaled $46.1 million, or $1.63 per diluted share, compared to $30.5 million, or $1.07 per diluted share for the nine months ended September 30, 2020. Net income excluding acquisition costs (non-GAAP) for the nine months ended September 30, 2021 was $46.6 million, or $1.65 per share, compared to $31.7 million, or $1.11 per share for the same period in 2020.

On June 22, 2021, Farmers entered into an agreement and plan of merger with Cortland Bancorp Inc. (“Cortland”), the parent company of Cortland Savings and Banking Company (“Cortland Bank”). The transaction has received the approval of Cortland’s shareholders and all customary regulatory approvals. The transaction is expected to close on November 1, 2021 and will enable Farmers to continue building local scale throughout Northeast Ohio as Farmers’ market share increases in Trumbull, Mahoning and Cuyahoga Counties. As of September 30, 2021, Cortland had total assets of $799.2 million, which included gross loans of $500.0 million, deposits of $693.0 million and equity of $83.0 million.

Kevin J. Helmick, President and CEO, stated, “We are pleased with our ability to post record earnings and find ways to win even as the impact from PPP loans begins to wane. Our strong net interest margin and fee businesses, outstanding credit quality and tight expense control have contributed to this record performance. With the closing of the Cortland Bank acquisition in November, we are poised to realize additional economies of scale which should allow us to continue our momentum into 2022.”

Balance Sheet

Total assets at September 30, 2021, were $3.32 billion compared to $3.07 billion at December 31, 2020. Total loans were $1.89 billion at September 30, 2021, compared to $1.96 billion at June 30, 2021 and $2.08 billion at December 31, 2020. Through the nine months ended September 30, 2021, total loans have declined $183.8 million due to a $71.8 million decrease in PPP loans, a decline of $36.9 million in 1-4 family residential loans due to the continued level of refinance activity in 2021 and declines in commercial and commercial real estate due to a high degree of liquidity in the system that has resulted in a greater level of payoffs. Securities have grown to $1.18 billion at September 30, 2021, compared to $996.3 million at June 30, 2021 and $575.6 million at December 31, 2020.

Total deposits grew to $2.87 billion at September 30, 2021, which represents growth of $87.6 million from June 30, 2021 and $255.5 million in growth, or 9.8%, compared to December 31, 2020. Growth has come from increases in both noninterest-bearing and interest-bearing deposits as customers continue to carry higher balances in their accounts.

Total stockholders’ equity was $377.5 million at September 30, 2021, compared to $366.9 million at June 30, 2021 and $350.1 million at December 31, 2020. The Company has not been able to repurchase any of its common shares in the third quarter due to the announcement of the Cortland transaction but still has 548,913 common shares remaining to be repurchased under the Company’s existing authorization.

Credit Quality

Due to a decline in loan balances, a decrease in a specific reserve on one loan, and a continued decline in historical loss ratios, the Company recorded a negative provision for credit losses of $948,000 for the quarter ended September 30, 2021, compared to the $2.6 million of loan loss provision recorded in the third quarter of 2020. Net charge-offs for the current quarter were $286,000, compared to $219,000 in the same quarter in 2020. Total net charge-offs as a percentage of average net loans outstanding was 0.06% for the quarter ended September 30, 2021, compared to 0.04% for the same quarter in 2020. As an overall percentage of loans, the allowance for credit losses decreased to 1.22% for the current quarter compared to 1.27% for the quarter ended June 30, 2021. Excluding the PPP loans, this allowance for credit losses to gross loans ratio increased to 1.26% (non-GAAP) as of September 30, 2021, and the ratio of the allowance for credit losses to gross loans, excluding PPP loans and acquired loans is 1.42% (non-GAAP).

Non-performing loans to loans ticked up to 0.78% at June 30, 2021, compared to 0.71% at June 30, 2021. This increase was primarily driven by the nonperformance of one credit. Early stage delinquencies, defined as 30-89 days past due, were $6.9 million, or 0.37% of total loans, at September 30, 2021, compared to $7.6 million, or 0.39% of total loans, for the prior quarter.

Net interest income

Net interest income was $26.5 million for the third quarter of 2021 compared to $24.2 million for the third quarter of 2020. The increase was due to growth in average interest earning assets and the impact of PPP fees offset by a decline in the net interest margin of 8 basis points. The net interest margin was 3.47% for the current quarter which is down from the 3.52% net interest margin reported in the second quarter of 2021 and lower than the 3.55% net interest margin reported in the third quarter of 2020. Excluding the impact of acquisition marks and PPP interest and fees (non-GAAP), the net interest margin for the third quarter of 2021 was 3.37% compared to 3.35% for the second quarter of 2021 and 3.60% for the third quarter of 2020.

Noninterest income

Noninterest income was down slightly to $9.0 million for the quarter ended September 30, 2021 compared to $9.2 million in the same quarter in 2020. Net gains on the sale of loans was down $1.7 million for the third quarter of 2021 compared to the third quarter of 2020 due to lower origination volumes. This decline was offset by an increase in trust fees of $362,000, or 18.4%, investment commissions of $285,000, or 80.7%, security gains of $389,000 and bank owned life insurance income of $144,000.

Noninterest expense

Total noninterest expense for the third quarter of 2021 decreased to $17.1 million compared to $17.5 million in the same quarter in 2020. Excluding merger related costs and a $326,000 prepayment penalty for the payoff of a $25 million FHLB advance, noninterest expense declined $1.1 million from the third quarter of 2020 to the third quarter of 2021. The $342,000 decline in noninterest expense from the third quarter of 2020 to the third quarter of 2021 was primarily due to a $923,000 decline in salaries and employee benefits offset by an increase of $180,000 in occupancy and equipment, $256,000 in professional fees and $414,000 in merger related expenses. The drop in salary and employee benefits was due to lower health insurance costs compared to the same quarter in 2020 along with lower incentive compensation expense and a greater amount of contra salary expense related deferred loan costs.

Covid Support Efforts

Farmers offered special financial assistance to support customers who were experiencing financial hardships related to the COVID-19 pandemic. The Company offered three month deferrals upon request by the borrowers, beginning in the middle of March, 2020 and concluding at the end of the three month deferral period. For those borrowers in industries that were greatly impacted by COVID-19, additional deferrals were considered and granted beyond the initial three month period. The range of deferred months for subsequent requests was three to nine months. The decline in deferred loans and balances was due to borrowers not requesting additional deferments and beginning to restart payments under the original terms of their loan. At September 30, 2021, Farmers had one customer with a loan balance of $5.0 million still on deferral. This customer is expected to come off of deferral in the 4th quarter of 2021.

Farmers is also a preferred SBA lender and we dedicated significant additional staff and other resources to help our customers complete and submit their applications and supporting documentation for loans offered under the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, so they could obtain SBA approval and receive funding as quickly as possible. During the initial 2020 period of the PPP program, the Company facilitated PPP assistance to 1,714 business customers totaling $199.8 million. The Company, on behalf of its customers, began processing borrower applications for PPP forgiveness at the beginning of September 2020. The SBA has up to ninety days to review an application for PPP forgiveness and provide a decision at the end of that review. Once forgiveness of the PPP loans has been communicated and payment is received from the SBA, the Company will record the cash received from the SBA, pay-off the loans based on the amount of forgiveness provided and accelerate the amount of net deferred loan fees/costs recognized for the portion of the PPP loans that are forgiven. During the period ended September 30, 2021, the Company has received life to date payments from the SBA for forgiveness of loans totaling $198.4 million, or approximately 99.2% of the PPP loans originated in 2020. The Company has processed $84.0 million in new loans for PPP loan funding during 2021. The Company has also received payments from the SBA for forgiveness of loans totaling $29.2 million, or approximately 34.7% of PPP loans originated in 2021.

About Farmers National Banc Corp.

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $3.3 billion in banking assets. Farmers National Banc Corp.’s wholly-owned subsidiaries are comprised of The Farmers National Bank of Canfield, a full-service national bank engaged in commercial and retail banking with 41 banking locations in Mahoning, Trumbull, Columbiana, Stark, Wayne, Medina, Geauga and Cuyahoga Counties in Ohio and Beaver County in Pennsylvania, and Farmers Trust Company, which operates five trust offices and offers services in the same geographic markets. Total wealth management assets under care at September 30, 2021 are $3.0 billion. Farmers National Insurance, LLC and Bowers Insurance Agency, Inc., wholly-owned subsidiaries of The Farmers National Bank of Canfield, offer a variety of insurance products.

Non-GAAP Disclosure

This press release includes disclosures of Farmers’ tangible common equity ratio, return on average tangible assets, return on average tangible equity, net income excluding costs related to acquisition activities and allowance for credit losses to gross loans, excluding PPP loans and acquired loans, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). 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 GAAP. Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers’ 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. The reconciliations of non-GAAP financial measures to their GAAP equivalents are included in the tables following Consolidated Financial Highlights below.

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Farmers’ financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, as well as any statements related to future expectations of performance or conditional verbs, such as “will,” “would,” “should,” “could” or “may.” Farmers’ actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from those described in the forward-looking statements include impacts from the COVID-19 pandemic, including further resurgence in the spread of COVID-19, on local, national and global economic conditions; higher default rates on loans made to our customers related to COVID-19 and its impact on our customers’ operations and financial condition; unexpected changes in interest rates or disruptions in the mortgage markets related to COVID-19 or other responses to the health crisis; impacts of the upcoming U.S. elections on the regulatory landscape, capital markets, and response to and management of the COVID-19 pandemic including further economic stimulus from the federal government; Farmers’ failure to integrate Cortland and Cortland Bank with Farmers in accordance with expectations; deviations from performance expectations related to Cortland and Cortland Bank; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2020 and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (SEC) and available on Farmers’ website (www.farmersbankgroup.com) and on the SEC’s website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Farmers does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

Farmers National Banc Corp. and Subsidiaries
Consolidated Financial Highlights
(Amounts in thousands, except per share results) Unaudited
 
 
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

2021

2021

2021

2020

2020

2021

2020

Change

Total interest income

$28,375

$28,609

$27,790

$28,833

$27,635

$84,774

$83,494

1.5%

Total interest expense

1,841

2,119

2,523

3,030

3,470

6,483

13,106

-50.5%

Net interest income

26,534

26,490

25,267

25,803

24,165

78,291

70,388

11.2%

Provision for credit losses

(948)

50

425

3,000

2,600

(473)

6,100

-107.8%

Noninterest income

9,015

9,508

10,183

10,499

9,217

28,706

25,662

11.9%

Acquisition related costs

472

104

12

1,798

58

588

1,425

-58.7%

Other expense

16,656

16,966

17,356

17,796

17,412

50,978

51,961

-1.9%

Income before income taxes

19,369

18,878

17,657

13,708

13,312

55,904

36,564

52.9%

Income taxes

3,358

3,303

3,101

2,351

2,443

9,762

6,045

61.5%

Net income

$16,011

$15,575

$14,556

$11,357

$10,869

$46,142

$30,519

51.2%

 
Average diluted shares outstanding

28,361

28,353

28,336

28,322

28,291

28,339

28,421

Basic earnings per share

0.57

0.55

0.52

0.40

0.39

1.63

1.08

Diluted earnings per share

0.56

0.55

0.51

0.40

0.38

1.63

1.07

Cash dividends

3,107

3,107

3,107

3,100

3,101

9,321

9,305

Cash dividends per share

0.11

0.11

0.11

0.11

0.11

0.33

0.33

Performance Ratios
Net Interest Margin (Annualized)

3.47%

3.52%

3.54%

3.69%

3.55%

3.50%

3.64%

Efficiency Ratio (Tax equivalent basis)

46.04%

45.70%

47.76%

50.07%

50.37%

46.49%

53.48%

Return on Average Assets (Annualized)

1.92%

1.90%

1.87%

1.49%

1.46%

1.90%

1.45%

Return on Average Equity (Annualized)

16.93%

17.17%

16.81%

13.10%

12.87%

17.05%

12.84%

Dividends to Net Income

19.41%

19.95%

21.35%

27.30%

28.53%

20.20%

30.49%

Other Performance Ratios (Non-GAAP)
Return on Average Tangible Assets

1.97%

1.93%

1.87%

1.52%

1.50%

1.92%

1.47%

Return on Average Tangible Equity

19.63%

19.81%

19.30%

15.48%

15.30%

19.67%

15.14%

Return on Average Tangible Equity excluding acquisition costs

20.20%

19.91%

19.31%

17.43%

15.37%

19.88%

15.71%

 
Consolidated Statements of Financial Condition

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

2021

2021

2021

2020

2020

Assets
Cash and cash equivalents

$79,808

$149,357

$326,385

$254,621

$199,575

Securities available for sale

1,183,361

996,271

802,866

575,600

481,509

Other investments

19,041

20,573

21,317

21,528

23,276

 
Loans held for sale

2,628

1,922

3,993

4,766

7,076

Loans

1,894,216

1,959,865

2,037,404

2,078,044

2,147,158

Less allowance for credit losses (a)

23,136

24,806

24,935

22,144

19,341

Net Loans

1,871,080

1,935,059

2,012,469

2,055,900

2,127,817

 
Other assets

161,129

156,876

157,494

158,733

149,926

Total Assets

$3,317,047

$3,260,058

$3,324,524

$3,071,148

$2,989,179

 
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing

$675,938

$663,640

$675,045

$608,791

$577,334

Interest-bearing

2,190,475

2,115,183

2,158,009

2,002,087

1,960,998

Total deposits

2,866,413

2,778,823

2,833,054

2,610,878

2,538,332

Other interest-bearing liabilities

49,649

78,369

79,683

78,906

81,690

Other liabilities

23,461

35,958

64,432

31,267

29,189

Total liabilities

2,939,523

2,893,150

2,977,169

2,721,051

2,649,211

Stockholders' Equity

377,524

366,908

347,355

350,097

339,968

Total Liabilities and Stockholders' Equity

$3,317,047

$3,260,058

$3,324,524

$3,071,148

$2,989,179

 
Period-end shares outstanding

28,322

28,322

28,308

28,258

28,186

Book value per share

$13.33

$12.95

$12.27

$12.39

$12.06

Tangible book value per share (Non-GAAP)*

11.61

11.23

10.53

10.63

10.23

 
* Tangible book value per share is calculated by dividing tangible common equity by outstanding shares
 
Capital and Liquidity
Common Equity Tier 1 Capital Ratio (b)

14.58%

13.95%

13.49%

13.22%

12.98%

Total Risk Based Capital Ratio (b)

16.25%

15.54%

15.10%

14.72%

14.36%

Tier 1 Risk Based Capital Ratio (b)

15.18%

14.39%

13.93%

13.67%

13.43%

Tier 1 Leverage Ratio (b)

10.17%

9.70%

9.69%

9.77%

9.67%

Equity to Asset Ratio

11.38%

11.25%

10.45%

11.40%

11.37%

Tangible Common Equity Ratio (c)

10.06%

9.90%

9.10%

9.94%

9.82%

Net Loans to Assets

56.41%

59.36%

60.53%

66.94%

71.18%

Loans to Deposits

66.08%

70.53%

71.92%

79.59%

84.59%

Asset Quality
Non-performing loans

$14,744

$13,873

$11,640

$13,835

$11,841

Other Real Estate Owned

0

30

30

0

73

Non-performing assets

14,744

13,903

11,670

13,835

11,914

Loans 30 - 89 days delinquent

6,944

7,606

7,183

9,297

10,134

Charged-off loans

411

502

284

387

393

Recoveries

125

323

200

190

174

Net Charge-offs

286

179

84

197

219

Annualized Net Charge-offs to
Average Net Loans Outstanding

0.06%

0.04%

0.02%

0.04%

0.04%

Allowance for Credit Losses to Total Loans (a)

1.22%

1.27%

1.22%

1.07%

0.90%

Non-performing Loans to Total Loans

0.78%

0.71%

0.57%

0.67%

0.55%

Allowance to Non-performing Loans (a)

156.92%

178.81%

214.22%

160.06%

163.34%

Non-performing Assets to Total Assets

0.44%

0.43%

0.35%

0.45%

0.40%

 
(a) CECL method used for the 2021 quarters. Prior periods used the incurred loss methodology.
(b) Sept. 30, 2021 ratio is estimated
(c) This is a non-GAAP financial measure. A reconciliation to GAAP is shown below
Reconciliation of Total Assets to Tangible Assets

For the Three Months Ended

For the Nine Months Ended

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

Sept. 30,

Sept. 30,

2021

2021

2021

2020

2020

2021

2020

Total Assets

$3,317,047

$3,260,058

$3,324,524

$3,071,148

$2,989,179

$3,317,047

$2,989,179

Less Goodwill and other intangibles

48,670

48,985

49,301

49,617

51,608

48,670

51,608

Tangible Assets

$3,268,377

$3,211,073

$3,275,223

$3,021,531

$2,937,571

$3,268,377

$2,937,571

Average Assets

3,304,708

3,280,316

3,155,695

3,033,005

2,957,702

3,247,466

2,814,339

Less average Goodwill and other intangibles

48,879

49,193

49,509

51,476

51,754

49,192

48,655

Average Tangible Assets

$3,255,829

$3,231,123

$3,106,186

$2,981,529

$2,905,948

$3,198,274

$2,765,684

 
 
Reconciliation of Common Stockholders' Equity to Tangible Common Equity

For the Three Months Ended

For the Nine Months Ended

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

Sept. 30,

Sept. 30,

2021

2021

2021

2020

2020

2021

2020

Stockholders' Equity

$377,524

$366,908

$347,355

$350,097

$339,968

$377,524

$339,968

Less Goodwill and other intangibles

48,670

48,985

49,301

49,617

51,608

48,670

51,608

Tangible Common Equity

$328,854

$317,923

$298,054

$300,480

$288,360

$328,854

$288,360

Average Stockholders' Equity

375,208

363,753

351,190

344,949

335,982

361,933

317,448

Less average Goodwill and other intangibles

48,879

49,193

49,509

51,476

51,754

49,192

48,655

Average Tangible Common Equity

$326,329

$314,560

$301,681

$293,473

$284,228

$312,741

$268,793

 
 
Reconciliation of Net Income, Excluding Acquisition Related Costs

For the Three Months Ended

For the Nine Months Ended

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

Sept. 30,

Sept. 30,

2021

2021

2021

2020

2020

2021

2020

Net income

$16,011

$15,575

$14,556

$11,357

$10,869

$46,142

$30,519

Acquisition related costs - tax equated

468

83

9

1,431

50

499

1,154

Net income - Adjusted

$16,479

$15,658

$14,565

$12,788

$10,919

$46,641

$31,673

Diluted EPS excluding acquisition costs

$0.58

$0.55

$0.51

$0.45

$0.39

$1.65

$1.11

Reconciliation of Allowance for Credit Losses to Gross Loans, Excluding PPP Loans and Acquired Loans
For the Three Months Ended

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

2021

2021

2021

2020

2020

Gross Loans

$1,894,216

$1,959,865

$2,037,404

$2,078,044

$2,147,158

PPP Loans, net

53,580

92,073

136,826

125,396

194,490

Loans less PPP

1,840,636

1,867,792

1,900,578

1,952,648

1,952,668

Allowance for Credit Losses to Gross Loans Excluding PPP (a)

1.26%

1.33%

1.31%

1.13%

0.99%

Acquired Loans

211,954

233,790

251,616

272,150

294,712

Loans less PPP and Acquired

$1,628,682

$1,634,002

$1,648,962

$1,680,498

$1,657,956

Allowance for Credit Losses to Gross Loans Excluding PPP and Acquired (a)

1.42%

1.52%

1.51%

1.32%

1.17%

 
(a) CECL method used for the 2021 quarters. Prior periods used the incurred loss methodology.
 
For the Three Months Ended

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

End of Period Loan Balances

2021

2021

2021

2020

2020

Commercial real estate

$690,407

$704,809

$702,556

$713,936

$710,730

Commercial

302,356

351,261

406,064

404,492

481,593

Residential real estate

376,901

383,187

400,982

413,841

416,859

HELOC

106,750

107,153

107,501

110,352

109,768

Consumer

189,497

190,064

193,295

203,061

209,883

Agricultural loans

226,896

223,427

227,073

232,129

219,896

Total, excluding net deferred loan costs

$1,892,807

$1,959,901

$2,037,471

$2,077,811

$2,148,729

 
For the Three Months Ended

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

Noninterest Income

2021

2021

2021

2020

2020

Service charges on deposit accounts

$924

$790

$808

$930

$904

Bank owned life insurance income

340

300

284

187

196

Trust fees

2,335

2,358

2,236

1,950

1,973

Insurance agency commissions

799

948

1,001

776

784

Security gains (losses)

459

32

488

179

70

Retirement plan consulting fees

334

389

320

394

341

Investment commissions

638

523

504

450

353

Net gains on sale of loans

1,466

2,191

2,900

3,610

3,119

Other mortgage banking fee income, net

32

(55)

(115)

108

(21)

Debit card and EFT fees

1,128

1,226

1,084

1,061

1,048

Other operating income

560

806

673

854

450

Total Noninterest Income

$9,015

$9,508

$10,183

$10,499

$9,217

 
For the Three Months Ended

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

Noninterest Expense

2021

2021

2021

2020

2020

Salaries and employee benefits

$9,321

$9,866

$9,976

$9,638

$10,244

Occupancy and equipment

1,899

1,890

2,275

2,060

1,719

State and local taxes

552

551

554

515

576

Professional fees

1,009

830

1,056

341

753

Merger related costs

472

104

12

1,798

58

Advertising

391

196

260

478

460

FDIC insurance

140

120

170

100

200

Intangible amortization

316

316

316

332

332

Core processing charges

860

831

627

831

925

Telephone and data

117

139

138

154

182

Other operating expenses

2,051

2,227

1,984

3,347

2,021

Total Noninterest Expense

$17,128

$17,070

$17,368

$19,594

$17,470

 
Average Balance Sheets and Related Yields and Rates
(Dollar Amounts in Thousands)
 
Three Months Ended Three Months Ended
September 30, 2021 September 30, 2020
AVERAGE AVERAGE
BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1)
EARNING ASSETS
Loans (2)

$1,917,443

$22,665

4.69%

$2,142,624

$24,331

4.52%

Taxable securities

727,271

3,222

1.76

197,311

1,263

2.55

Tax-exempt securities (2)

360,371

3,065

3.37

254,533

2,459

3.84

Other investments

19,380

113

2.31

22,999

138

2.39

Federal funds sold and other

95,871

32

0.13

159,151

52

0.13

Total earning assets

3,120,336

29,097

3.70

2,776,618

28,243

4.05

Nonearning assets

184,372

181,084

Total assets

$3,304,708

$2,957,702

INTEREST-BEARING LIABILITIES
Time deposits

$361,566

$692

0.76%

$476,205

$1,869

1.56%

Brokered time deposits

0

0

0

57,000

157

1.10

Savings deposits

525,560

152

0.11

476,097

256

0.21

Demand deposits

1,278,099

502

0.16

913,946

871

0.38

Short term borrowings

5,671

0

0.00

4,476

14

1.24

Long term borrowings

51,767

495

3.79

76,554

303

1.57

Total interest-bearing liabilities

$2,222,663

1,841

0.33

$2,004,278

3,470

0.69

NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS' EQUITY
Demand deposits

684,419

592,539

Other liabilities

22,418

24,903

Stockholders' equity

375,208

335,982

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY

$3,304,708

$2,957,702

Net interest income and interest rate spread

$27,256

3.37%

$24,773

3.36%

Net interest margin

3.47%

3.55%

 
(1) Interest and yields are calculated on a tax-equivalent basis where applicable.
(2) For 2021, adjustments of $87 thousand and $635 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2020, adjustments of $103 thousand and $505 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.
Nine Months Ended Nine Months Ended
September 30, 2021 September 30, 2020
AVERAGE AVERAGE
BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1)
EARNING ASSETS
Loans (2)

$1,992,003

$70,234

4.71%

$2,066,178

$73,370

4.78%

Taxable securities

524,774

7,452

1.90

205,168

4,088

2.66

Tax-exempt securities (2)

327,938

8,630

3.52

246,218

7,161

3.88

Other investments

20,372

355

2.33

24,008

415

2.31

Federal funds sold and other

203,197

161

0.11

104,201

231

0.33

Total earning assets

3,068,284

86,832

3.78

2,645,773

85,265

4.35

Nonearning assets

179,182

168,566

Total assets

$3,247,466

$2,814,339

INTEREST-BEARING LIABILITIES
Time deposits

$397,378

$2,955

0.99%

$488,051

$6,492

1.78%

Brokered time deposits

15,692

75

0.64

82,138

959

1.56

Savings deposits

512,716

510

0.13

452,938

844

0.25

Demand deposits

1,196,910

1,861

0.21

809,619

3,357

0.55

Short term borrowings

4,395

7

0.21

26,440

352

1.78

Long term borrowings

67,335

1,075

2.13

84,483

1,102

1.74

Total interest-bearing liabilities

$2,194,426

6,483

0.39

$1,943,669

13,106

0.90

NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS' EQUITY
Demand deposits

$669,255

$533,400

Other liabilities

21,852

19,822

Stockholders' equity

361,933

317,448

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY

$3,247,466

$2,814,339

Net interest income and interest rate spread

$80,349

3.39%

$72,159

3.45%

Net interest margin

3.50%

3.64%

 
(1) Interest and yields are calculated on a tax-equivalent basis where applicable.
(2) For 2021, adjustments of $274 thousand and $1.8 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2020, adjustments of $299 thousand and $1.5 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.

 

Contacts

Kevin J. Helmick, President and CEO

20 South Broad Street, P.O. Box 555

Canfield, OH 44406

330.533.3341

Email: exec@farmersbankgroup.com

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