Farmers National Banc Corp. (FMNB) is a diversified financial services company headquartered in Canfield, Ohio, with a rich history dating back to 1887. The company operates primarily through its wholly-owned subsidiaries, The Farmers National Bank of Canfield and Farmers Trust Company, providing a comprehensive range of banking, trust, retirement consulting, insurance, and financial management services.
Farmers National Banc Corp. was organized as a one-bank holding company in 1983 under the laws of the State of Ohio. The company has demonstrated remarkable resilience and adaptability throughout its history, successfully navigating various economic challenges and market conditions. In 2008, during the financial crisis, Farmers National Banc Corp. stood out among its peers by maintaining strong capital ratios and credit quality, allowing it to continue serving its customers and grow its business while many other banks struggled with troubled assets and capital levels.
The company has strategically expanded its offerings and reach through a series of acquisitions and new business formations. In 2009, Farmers National Banc Corp. acquired Farmers Trust, significantly enhancing its wealth management capabilities by offering a full complement of personal and corporate trust services. That same year, the company formed Farmers National Insurance, LLC to provide a variety of insurance products through licensed representatives, further diversifying its revenue streams.
Continuing its growth trajectory, Farmers National Banc Corp. formed Farmers of Canfield Investment Co. in 2014, with the primary purpose of investing in municipal securities. This move allowed the company to expand its investment portfolio and generate additional revenue beyond traditional banking activities.
The company's most recent major milestone was the acquisition of Emclaire Financial Corp. in 2023, which expanded Farmers' footprint into western Pennsylvania and added 19 branch locations. This strategic move has allowed the company to serve a larger customer base and has been successfully integrated, resulting in cost savings and revenue synergies.
Financials
Financial Performance Weathering Challenges, Delivering Consistent Profitability Farmers National Banc Corp. has consistently delivered strong financial results, even during challenging economic conditions. In the fiscal year 2024, the company reported net income of $45.95 million, or $1.22 per diluted share, a testament to its ability to adapt and thrive. This represents a slight decrease from the previous year's net income of $49.93 million, or $1.33 per diluted share, primarily due to the impact of rising interest rates and the acquisition-related expenses associated with the Emclaire Financial Corp. merger.
Despite these headwinds, Farmers National Banc Corp. maintained a healthy balance sheet, with total assets of $5.12 billion as of December 31, 2024. The company's loan portfolio grew to $3.27 billion, up from $3.20 billion in the prior year, driven by increases in commercial real estate, residential real estate, and consumer lending. Additionally, the company's deposit base grew to $4.27 billion, up from $4.18 billion, showcasing its ability to attract and retain customer relationships.
For the fiscal year 2024, Farmers National Banc Corp. reported annual revenue of $170.08 million, annual net income of $45.95 million, annual operating cash flow of $66.61 million, and annual free cash flow of $54.92 million. These figures demonstrate the company's ability to generate consistent profitability and strong cash flows, even in a challenging economic environment.
In the most recent quarter (Q4 2024), the company reported revenue of $44.15 million and net income of $14.39 million. Year-over-year, revenue decreased by 1.9% and net income decreased by 1.4%. The slight decrease in revenue was primarily due to lower gains on sale of loans, partially offset by higher service charges on deposit accounts and bank-owned life insurance income.
Liquidity
Prudent Risk Management and Capital Strength Farmers National Banc Corp. has a long-standing reputation for prudent risk management, which has been a key driver of its consistent financial performance. The company's allowance for credit losses stood at $35.86 million as of December 31, 2024, representing 1.10% of total loans, compared to 1.08% in the previous year. This strong credit quality is a testament to the company's underwriting practices and proactive approach to risk management.
Furthermore, Farmers National Banc Corp. maintains a robust capital position, which provides a solid foundation for growth and resilience. As of December 31, 2024, the company's common equity tier 1 capital ratio was 11.14%, well above the regulatory minimum of 4.50%. The total risk-based capital ratio stood at 14.55%, also exceeding the 8.00% regulatory requirement. This strong capital position enables the company to navigate economic uncertainties, pursue strategic opportunities, and continue delivering value to its shareholders.
The company's debt-to-equity ratio was 0.96 as of December 31, 2024, indicating a balanced approach to leverage. Farmers National Banc Corp. had $85.74 million in cash and cash equivalents as of the same date, providing ample liquidity for its operations. Additionally, the company has access to a $25 million line of credit from a major domestic bank, which was undrawn as of the end of 2024, further enhancing its financial flexibility.
Diversified Product Offerings and Strategic Acquisitions Farmers National Banc Corp. has consistently demonstrated its ability to adapt to changing market conditions and customer needs by expanding its product and service offerings. In addition to its traditional banking services, the company's subsidiaries, Farmers Trust Company and Farmers Insurance, provide a comprehensive suite of wealth management, retirement planning, and insurance solutions, contributing to the company's diversified revenue streams.
The company's strategic acquisitions have also played a crucial role in its growth and expansion. In January 2023, Farmers National Banc Corp. completed the acquisition of Emclaire Financial Corp., a move that expanded its footprint into western Pennsylvania and the Pittsburgh market. More recently, in December 2024, the company acquired Crest Retirement Advisors LLC, a move that strengthened its retirement planning and administrative services capabilities.
These strategic initiatives have allowed Farmers National Banc Corp. to enhance its competitive position, diversify its revenue sources, and better serve the evolving needs of its customer base, positioning the company for continued success in the years ahead.
Business Segments and Geographic Markets Farmers National Banc Corp. operates through two main business segments: the Bank segment and the Trust segment. The Bank segment, which represents the core banking operations through The Farmers National Bank of Canfield, is the primary driver of the company's financial performance. In 2024, the Bank segment generated $222.38 million in total revenues, including $185.71 million in interest income from loans and $36.67 million in investment income. The Bank's net interest income was $128.37 million, and it recorded a provision for credit losses of $7.97 million. The Bank segment's pre-tax profit was $61.59 million, representing the majority of the company's overall pre-tax income of $55.43 million.
The Trust segment, operating through Farmers Trust Company, offers a full complement of personal and corporate trust services, including estate settlement, trust administration, employee benefit plans, and retirement services. In 2024, the Trust segment generated $12.74 million in revenues, primarily consisting of $10.10 million in trust fees and $2.64 million in retirement plan consulting fees. The Trust segment's pre-tax profit was $7.34 million, contributing significantly to the company's overall profitability.
Geographically, Farmers National Banc Corp. operates primarily in the northeastern region of Ohio and the western region of Pennsylvania. As of December 31, 2024, the Bank operated 62 full-service banking centers and 2 stand-alone loan production offices across these regions. The Trust segment operated five offices located in Boardman, Canton, Howland, Wooster, and Fairview Park, Ohio.
Outlook and Conclusion As Farmers National Banc Corp. navigates the current economic environment, the company remains focused on its core strengths: prudent risk management, innovative product development, and strategic acquisitions. Despite facing headwinds such as rising interest rates and acquisition-related expenses, the company has demonstrated its ability to adapt and deliver consistent financial performance.
Looking ahead, Farmers National Banc Corp. is well-positioned to capitalize on emerging opportunities and continue its trajectory of growth. The company's strong capital position, diversified revenue streams, and proven track record of navigating challenging environments provide a solid foundation for weathering future storms and delivering long-term value to its shareholders.
Overall, Farmers National Banc Corp. (FMNB) is a resilient and well-managed financial services company that has consistently demonstrated its ability to adapt and thrive in an ever-changing market landscape. With its focus on prudent risk management, strategic initiatives, and customer-centric approach, the company is poised to continue its legacy of delivering stable and consistent performance for its shareholders.