Farmers Banc Corp. Reports Net Income of $1.9M
CANFIELD, Ohio – Farmers National Banc Corp., holding company of Farmers National Bank and Farmers Trust Co., Wednesday reported second-quarter net income of $1.9 million, or 10 cents per basic and diluted share.
This compares to first-quarter net income of $2 million, or 11 cents a share, and second-quarter 2012 net income of $2.3 million, or 12 cents a share.
Said the president and CEO, John S. Gulas, in a statement, “Although net income decreased compared to the same quarter a year ago, we are encouraged by the 14.3% improvement in noninterest [fees and service charges] income which is consistent with our strategy to diversify revenue streams and increase fee income. Our recent acquisition of National Associates Inc., a retirement-plan consulting firm in Cleveland, will further enhance our fee income and be immediately accretive to earnings. The acquisition closed on July 1. Therefore this quarter’s results do not include business activity from National Associates. We are also encouraged that asset quality continues to improve as we have seen nonperforming loans [those 90 days and more past due] decrease 18%, or $1.8 million, during the last 12 months. Loan growth during the second quarter came from our commercial and indirect loan portfolios.”
Key performance ratios at June 30, March 31 and June 30, 2012 were:
- Net interest margin (annualized), 3.63%, 3.68%, 3.80%.
- Return on average assets (annualized), 0.66%, 0.72%, 0.82%.
- Return on average equity (annualized), 6.21%, 6.70%, 7.81%.
- Efficiency ratio (tax equivalent basis), 77.16%, 72.57%, 68,66%.
At $589.25 million, net loans were more than $4 million higher than at March 31 and $25.8 million above the $563.4 million reported June 30, 2012, the company said.
Deposits were $901.89 million at June 30, down from $915.86 million March 31 but up from the $886.59 million reported June 30, 2012.
Total interest income was $10.27 million, slightly higher than the first quarter but less than the $10.9 million reported a year ago.
Noninterest income was $3.23 million, up from the $2.88 million reported last quarter and $2.82 million a year ago.
Noninterest expense -- which includes salaries and benefits, rents, marketing, Federal Deposit Insurance Corp. premiums -- was $9.82 million for the quarter compared to $9.09 million the first quarter and $8.77 million a year ago.
Most of the $1.05 million increase from June 30, 2012, to June 30 was attributed to an increase in salaries and employee benefits because of higher health-care expense and hiring more employees over the last 12 months. “Professional fees increased $270,000, or 59% mainly the result of legal and investment banking fees related to the acquisition of National Associates,” Farmers said.
The company expects to reduce its noninterest expense with the closing of two branches, one in Leetonia, the other in Warren, Oct. 1 and transferring their operations to nearby branches.
Farmers set aside $170,000 to provide for loan losses compared to $255,000 the first quarter and $400,000 the quarter ended June 30, 2012.
The bank reported $8.08 million in nonperforming loans and $295,000 in repossessed real estate compared to $7.37 million and $410,000 respectively the first quarter and $9.9 million and $412,000 the quarter ended June 30, 2012.
The allowance for loan losses to total loans was 1.27% the second and first quarters compared to 1.58% a year ago. Net charge-offs were only $89,000 the second quarter compared to $376,000 the previous quarter and $798,000 a year ago.
Total assets rose slightly during the quarter to $1.124 billion, slightly below $1.143 billion at March 31 but higher than $1.117 billion at June 30, 2012.
Through its subsidiaries, Farmers engages in commercial, retail and mortgage banking and offers trust, wealth management, insurance and retirement planning services in northeastern Ohio.
Published by The Business Journal, Youngstown, Ohio.
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