On Thursday, the parent of Farmers National Bank reported $51.8 million in net income for the 12 months ended Dec. 31, or $1.77 per diluted share. That compares to $41.9 million, or $1.47 per diluted share for the 12 months ended Dec. 31, 2020.
On Nov. 1, Farmers and Cortland Bancorp completed the merger of Cortland into Farmers in a cash and stock transaction, adding $841.7 million in assets to the balance sheet. The systems integration of Farmers and Cortland will be completed in February, bringing the combined 48 bank locations together under one name.
“The last two years have brought unbelievable challenges to the world and our industry,” said Kevin Helmick, president and CEO. “Through it all, the Farmers team has continued to deliver record earnings and superior returns while catering to the needs of the communities we serve. I am extremely proud of our staff for all of their hard work. With the closing of the Cortland acquisition, I look forward to the possibilities in 2022.”
Farmers has reported a profit for 156 consecutive quarters.
Fourth quarter income of $5.7 million was down from the $11.4 million reported in the three months ended Dec. 31, 2020. However, the results included pretax items for acquisition-related provision for credit loss expense of $4.9 million, $6.5 million for acquisition costs, $1.8 million for a prepayment penalty on an FHLB advance, security gains of $25,000, a loss of $195,000 on the sale of assets, and a one-time gain of $239,000 for the sale of Farmers’ credit card portfolio. Excluding these items (non-GAAP), core net income for the quarter ended Dec. 31, would have been $16.2 million, or 50 cents per diluted share, the company reported.
During the first phase of the Paycheck Protection Program, Farmers provided $199.8 million in loans to 1,714 borrowers. At Dec. 31, Farmers has $37.5 million of PPP loans before deferred fees still to be forgiven and $1.3 million in net deferred fees associated with these loans still to be recognized into income.
Among the fourth-quarter highlights Farmers provided in its earnings report:
- Gross loans, excluding those held for sale, of $2.33 billion, compared to $1.89 billion at Sept. 30, and $2.08 billion at Dec. 31, 2020. Gross loan growth for the fourth quarter totaled $436.9 million and included $470.6 million in gross loans associated with the acquisition of Cortland (excluding Cortland’s PPP loans) offset by a decline in PPP loan balances of $26.3 million (inclusive of Cortland’s PPP loans) and a decline in other loan balances of $7.4 million which includes the sale of Farmers’ credit card portfolio.
- Total deposits at Dec. 31 were $3.55 billion, compared to $2.87 billion at Sept. 30, and $2.61 billion at Dec. 31, 2020.
- Nonperforming assets to total assets remains at a low level, currently at 0.39%, compared to 0.44% as of Sept. 30, and 0.45% at Dec. 31, 2020. Early stage delinquencies at Dec. 31 – defined as 30-89 days past due – were $8.9 million, or 0.38% of total loans, compared to $6.9 million, or 0.37% of total loans, for the prior quarter.
- Net interest margin in the fourth quarter was 3.33%, which is down from 3.47% in the third quarter, and lower than the 3.69% reported in the fourth quarter of 2020.
- Noninterest income declined to $9.5 million for the quarter ended Dec. 31, compared to $10.5 million for the same quarter a year ago.
Key performance ratios for the quarters ended Dec. 31, Sept. 30 and Dec. 31, 2020 are:
- Return on average assets annualized: 0.58%, 1.92%, 1.49%.
- Return on average equity annualized: 5.24%, 16.93%, 13.10%.
- Efficiency ratio tax-equivalent basis: 63.61%, 46.04%, 50.07%.
Total assets for Farmers National Banc Corp. – which includes Farmers National Bank, Farmers Trust Co. and Farmers National Insurance – are $4.14 billion, up from $3.32 billion in the previous quarter and up from $3.07 billion in the year-ago quarter.
Copyright 2022 The Business Journal, Youngstown, Ohio.