Farmers National Banc Corp. Reports Mixed Q3 Results, Net Income Declines Amid Interest Rate Pressure

Farmers National Banc Corp. reported its financial results for the third quarter and the first nine months of 2024, highlighting a mixed performance compared to the previous fiscal period. As of September 30, 2024, the company’s total assets increased to $5.24 billion from $5.08 billion at the end of 2023, driven by a rise in total deposits, which reached $4.36 billion, up from $4.18 billion. The total stockholders' equity also rose to $439.7 million, compared to $404.4 million at the end of 2023.

For the three months ended September 30, 2024, Farmers National reported net income of $8.54 million, a decline from $13.31 million in the same period of 2023. This resulted in a decrease in earnings per share to $0.23 from $0.36. The nine-month net income also fell to $31.56 million from $35.36 million year-over-year, with earnings per share decreasing from $0.94 to $0.85. The decline in profitability was attributed to a reduction in net interest income, which fell to $31.88 million in Q3 2024 from $33.77 million in Q3 2023, primarily due to a 20 basis point decline in the net interest margin.

The company’s noninterest income for the third quarter increased to $12.34 million, up from $9.83 million in the prior year, reflecting growth in fee-based business lines and gains from Small Business Investment Company (SBIC) funds. Noninterest expenses decreased slightly to $27.08 million from $27.72 million, aided by the absence of merger-related charges that impacted the previous year’s figures.

Farmers National completed its merger with Emclaire Financial Corp. on January 1, 2023, which contributed to the increase in total assets and deposits. The merger added approximately $92.6 million in value, with goodwill recorded at $72.9 million. The company also dissolved Farmers National Captive, Inc. in November 2023, which affected its tax benefits.

The allowance for credit losses increased to $36.2 million as of September 30, 2024, up from $34.4 million at the end of 2023, driven by loan growth and specific reserves related to commercial loans. The company reported total loans of $3.27 billion, an increase from $3.19 billion at the end of 2023, with growth across all major loan categories.

In terms of capital adequacy, Farmers National met all regulatory requirements, with a Common Equity Tier 1 Capital Ratio of 10.91% and a Total Risk-Based Capital Ratio of 14.34% as of September 30, 2024. The company continues to focus on strategies to manage interest rate risk and enhance its lending portfolio while maintaining liquidity to meet customer needs.