Attached files
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| 8-K - FORM 8-K - FARMERS NATIONAL BANC CORP /OH/ | d299385d8k.htm |
Exhibit 99.1
| 1 Farmers National Banc Corp. Canfield, OH (NASDAQ: FMNB) Investor PresentationDecember 31, 2011 |
| 2 Disclosure Statement Forward-Looking StatementsThis presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express management's current expectations, forecasts of future events or long-term-goals and, by their nature, are subject to assumptions, risks and uncertainties. Actual results could differ materially from those indicated. Farmers National Banc Corp. ("Farmers") refers you to its periodic reports and registration statements filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2010 and Quarterly Report on Form 10-Q for the period ended September 30, 2011 which have been filed with the Securities and Exchange Commission and are available on Farmers' website (www.farmersbankgroup.com) and on the Securities and Exchange Commission's website (www.sec.gov), for additional discussion of these assumptions, risks and uncertainties. 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 undertakes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. Use of Non-GAAP Financial Measures This presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States ("GAAP"). These non-GAAP financial measures include "Core Deposits" and "Pre-tax, Pre- provision Earnings". Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the Company's deposit profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Because not all companies use the same calculation of "Core Deposits" and "Pre-tax, Pre-provision Earnings", this presentation may not be comparable to other similarly titled measures as calculated by other companies. |
| 3 Sound franchise with many opportunities for growthProfitable throughout cycle and growing tangible book value per shareDiversified and growing revenue streamsStable asset quality and strong core deposit franchiseStrong capital position and did not take TARP CPPOperational excellence and brand developmentSeasoned management team with knowledge of the Northeast Ohio marketplace Commence trading on NASDAQ effective September 15, 2011 ("FMNB")Declared Special $0.03 per share cash dividend payable on February 28, 2011 to shareholders of record at February 13, 2011Compelling valuation:0.86x of tangible book value5.9x LTM pre-tax pre-provision earnings Farmers offers a unique and strong platform for growth Investment Highlights 9.9x LTM EPS2.42% dividend yield |
| 4 Founded over 120 years ago18 branches and 17 ATMsApproximately 75 - 100 miles from Cleveland, Pittsburgh & Erie Branch Map in Mahoning Valley Erie Pittsburgh Youngstown Akron Cleveland Trumbull County Mahoning County Columbiana County Branch Locations Trust Locations Canton |
| 5 Note: Deposit data as of June 30, 2011Source: FDIC Opportunity for growth with approximately 9.5% deposit market share in the Mahoning ValleyLarge regional competitors lack focus Community competitors inwardly focused Attractive Deposit Franchise - Deposit Market Share by MSA & County |
| 6 Source: Regional Chamber, Youngstown-Warren, Ohio Metropolitan ProfileValley Leads in Industrial Job Growth in NE Ohio, The VindicatorOhio's Economic Impact Study - September, 2011 Resources and infrastructure within 100 miles of the Mahoning Valley Recently the Mahoning Valley has seen several important investments in new business including:Steelmaker V&M Star's $650 million expansion350,000 tons of steel tubing per year for the drilling of shale gas in the U.S. About 350 jobs will be created once production beginsThe acquisition of WCI Steel by OAO Severstal - $327 million investmentGeneral Motors Lordstown plant building the Chevrolet Cruze next generation small car - $230 million investmentOhio's Natural Gas and Crude Oil Exploration and Production Industry and the Emerging Utica Gas FormationImpact regarding to:Jobs (204,000 created or supported by 2015)Income (Economic Output will increase by over $22 billion by 2015) Economic Overview of Market Area 6.8 million people18 Fortune 500 company world headquarters95 colleges and universities campus locations2 international airports; 3 regional airportsLake Erie shippingOhio River ports Northeast Ohio's manufacturing productivity is on track to outpace the rest of the nation by 10 percent as early as 2015, according to a report released by Team Northeast Ohio. Youngstown-Warren metro area had the third-highest job growth in the U.S. in the last 12 months.Land acquisition, construction and labor costs are significantly below national averages |
| 7 Performance-driven cultureAdvancing automation and use of technologyMetrics-oriented accountability Scaling organization to support growthDiligent risk management Expand fee-based businessIntegrate sales efforts Continue to drive name awarenessUnification of brand Top graded talent to drive performance growth De novo expansion and strategic acquisitionsCustomer intimacy/decisions close to customerIdentify target markets and customer segmentsLead with commercial business/expand wallet share Acquire Share of Market/Share of Customer Operational Excellence Risk Management Evolve Trust, Insurance & Financial Services Brand Development Talent Farmers' Strategy for Growth |
| 8 Established and experienced management team with over 173 years of combined experience, 97 of which has been with Farmers Experienced Management Team |
| 9 March 2009 - opportunistic acquisition of Butler Wick Trust Company, the largest trust department in the Mahoning ValleyAssets under management have grown approximately 52% since acquisition to $927 million currentlyFrom December 31, 2008 through December 31, 2011:Revenue1 has grown $16.0 million or 51.2%Total assets have increased $187.5 million or 21.3%Loans have grown $20.5 million or 3.7%Total deposits have increased $192.1 million or 29.7%Core deposits2 have grown $192.3 million or 35.0%Tangible book value has decreased just $0.07 or 1.20% even with $15 million capital raiseFiserv Premier - core operating systemFlexible system that offers unlimited accountsKeeps current with compliance and regulatory changesOffers multiple products and services that integrate into core system (i.e. internet banking, ATMs, and GL) One of the top core system providers in the nationSAN & Virtualization - data management systemData Storage: reduces disk space expenditures; allow for better utilization of disk spaceData Backup: consistent backups of all data and replicated at DR SiteDisaster Recovery: able to recover from disaster in minutesOverall reduced IT costsScalable to various network configurations 1 Revenue defined as net interest income plus non-interest income; excludes securities gains / losses; 2 Core deposits defined as Total Deposits - Jumbo Deposits Recent Growth |
| 10 Butler Wick Trust Company AcquisitionAcquired from United Community Financial Corporation for cash on March 31, 2009Only locally owned trust company in the Mahoning ValleyRebranded to Farmers Trust CompanyAssets increased approximately 52% since acquisitionContributed $5.4 million to non-interest income in 2011 Farmers Trust Company |
| 11 Meaningfully profitable every quarter during this cycle Always paid quarterly cash dividendSpecial one-time additional $0.03 cash dividend payable on February 28, 2012 to shareholders of record as of February 13, 2012.High net interest margin which has exceeded national banks1 peer average.4.01% December 31, 2011Strong record of profitabilityAverage ROAA and ROAE from 2007 through 2011 of 0.75% and 8.43%, respectivelyContinue to invest in operations to support ongoing growth, yet maintain a strong balance sheet Historical Operating Results 1 Selected Capital & Credit Quality Banks with Assets $800 Million - $2.0 Billion; No TARP; TCE / TA >= 7.0%; NPAs / Assets < 2.5% and Positive LTM Net IncomeSource: SNL Financial |
| 12 Net income for 2011 was up 3% to $9.2 million versus $9.0 million in 2010.Special one-time additional $0.03 cash dividend represents a 25% premium on the current $0.12 annual cash dividend.Investment commissions and trust fees for the fourth quarter of 2011 increased 15% and 7%, respectively, from the fourth quarter of 2010.Provision for loan losses for the fourth quarter of 2011 decreased $2.2 million from the fourth quarter of 2010.Loans 30-89 days delinquent decreased to $3.4 million at December 31, 2011, compared to $7.9 million at December 31, 2010.Tangible common equity to tangible assets improved to 10.18% at December 31, 2011 compared to 8.31% at December 31, 2010. Continued Strong Results - Overview of Q4 2011 |
| 13 Acquisition of Trust Company increased non-interest income by 9.90% since first quarter 20091 Growing and Diverse Revenue Stream Note: Revenue defined as net interest income plus non-interest income; Excludes $1.8MM net gain on securities1 Calculated as Q4 2011 trust revenue / Q1 2009 total revenue 2007 2008 2009 2010 2011 Net Interest Margin (GAAP) 3.33 3.58 3.88 4.1 4.01 (CHART) |
| 14 Diverse loan mixNo national lendingNo sub-prime lendingFarmers' practice is to lend primarily within its market areaLess than 1% of loan portfolio is participations purchasedLess than 2% of loan portfolio is construction loans Loan Portfolio Mix (December 31, 2011) Overview of Loan Portfolio Note: Dollars in thousands (CHART) |
| 15 Excellent Asset Quality Note: Dollars in millions; Asset quality ratios exclude troubled debt restructuring 12/31/2011 Nonaccrual loans $10.7 Accruing loans past due 90 days or more 0.3 OREO 0.6 Total nonperforming assets (NPAs) $11.6 Troubled Debt Restructuring (TDR) $4.3 Loans 30-89 days delinquent 3.4 Gross portfolio loans 572.5 Loans held for sale (HFS) 0.7 Allowance for loan losses (ALL) 9.8 Total Assets $1,067.9 NPLs & 90 days past due/Gross loans (excl. HFS) 1.92% NPLs & 90 days past due/Gross loans (incl. HFS) 1.92% NPAs/Total Assets 1.08% TDR/Gross loans (excl. HFS) 0.75% 30-89 days delinquent/Gross loans (excl. HFS) 0.60% ALL/NPLs & 90 days past due 89.40% ALL/Gross loans (excl. HFS) 1.72% (CHART) |
| 16 Relative to Comparable Midwest and National banks, Farmers is attractively valued Farmers has an Attractive Valuation Note: Peer data is the median value for the peer group; market data is as of February 6, 2012; asset quality ratios exclude troubled debt restructurings1 Selected Midwest Banks with Assets $800 Million - $2.0 Billion and traded on the NASDAQ, NYSE and NYSE AMEX exchanges (excludes OTCBB and Pink Sheet traded banks). Includes: QCRH, OSBC, FFKT, GABC, PEBO, BKYF, MOFG, HBNC, MCBC, FBMI, PBIB, MBWM, WTBA, MBTF, FFKY, HWBK, LNBB, FBIZ, FCZA, PNBC, ATLO and OVBC2 Selected Capital & Credit Quality Banks with Assets $800 Million - $2.0 Billion; No TARP; TCE / TA >= 7.0%; NPAs / Assets < 2.5%, Positive LTM Net Income and traded on the NASDAQ, NYSE and NYSE AMEX exchanges (excludes OTCBB and Pink Sheet traded banks). Includes: AROW, GABC, FCAL, PEBO, BMTC, BKYF, MOFG, CCNE, EBTC, CNBC, ALNC, MSL, BMRC, BDGE, CZNC, AMNB, WTBA, BHB, BBNK, NRIM, NKSH, ATLO, ACNB, ASRV, PPBI, CIZN, TSH, ANCX and OVBC3 Last 12 months pre-tax, pre-provision earningsSource: SNL Financial |