Securities Exchange Act of 1934
OHIO | 34-1371693 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No) | |
20 South Broad Street | ||
Canfield, OH | 44406 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filero | Accelerated filerþ | Non-accelerated filero | Smaller reporting companyo |
Class | Outstanding at July 31, 2009 | |
Common Stock, No Par Value | 13,415,384 shares |
Farmers National Banc Corp
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-Q/A amends our Form 10-Q for the quarter ended June 30, 2009, filed with the Securities and Exchange Commission on August 10, 2009. This Form 10-Q/A amends PART I – FINANCIAL INFORMATION, Item 4 — Controls and Procedures to now include technical language that was inadvertently excluded. Information that appeared in the original Form 10-Q filed on August 10, 2009 PART I – FINANCIAL INFORMATION, Item 4 – Controls and Procedures now correctly appears in PART II – OTHER INFORMATION, Item 4 – Submission of Matters to a Vote of Security Holders.
This Form 10-Q/A only amends PART I – FINANCIAL INFORMATION, Item 4 — Controls and Procedures and PART II – OTHER INFORMATION, Item 4 – Submission of Matters to a Vote of Security Holders. No other Items in the Form 10-Q filed on August 10, 2009 are amended, modified or updated hereby. Pursuant to Rule 12b – 15 under the Securities Exchange Act of 1934, new certifications of our principal executive officer and principal financial officer are being filed as exhibits to this Amendment No. 1 on Form 10 – Q/A.
This amendment No. 1 on Form 10-Q/A does not reflect events occurring after the filing of the original 10-Q or modify or update those disclosures affected by subsequent events.
Page | ||||
Number | ||||
PART I — FINANCIAL INFORMATION | ||||
Item 1 Financial Statements (Unaudited) | ||||
Included in Part I of this report: | ||||
Farmers National Banc Corp. and Subsidiary | ||||
1 | ||||
2 | ||||
3 | ||||
4-14 | ||||
15-21 | ||||
21-22 | ||||
22 | ||||
22 | ||||
22-23 | ||||
23 | ||||
23 | ||||
23 | ||||
23 | ||||
24 | ||||
25 | ||||
(Unaudited)
(In Thousands of Dollars) | ||||||||
June 30, | December 31, | |||||||
2009 | 2008 | |||||||
ASSETS | ||||||||
Cash and due from banks | $ | 22,655 | $ | 23,803 | ||||
Federal funds sold | 18,632 | 246 | ||||||
TOTAL CASH AND CASH EQUIVALENTS | 41,287 | 24,049 | ||||||
Securities available for sale | 281,837 | 271,605 | ||||||
Loans | 593,396 | 552,005 | ||||||
Less allowance for loan losses | 6,640 | 5,553 | ||||||
NET LOANS | 586,756 | 546,452 | ||||||
Premises and equipment, net | 14,105 | 14,139 | ||||||
Bank owned life insurance | 11,278 | 11,021 | ||||||
Goodwill | 3,679 | 0 | ||||||
Other intangibles | 4,092 | 0 | ||||||
Other assets | 14,814 | 13,104 | ||||||
TOTAL ASSETS | $ | 957,848 | $ | 880,370 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 63,055 | $ | 61,499 | ||||
Interest-bearing | 650,561 | 586,511 | ||||||
TOTAL DEPOSITS | 713,616 | 648,010 | ||||||
Short-term borrowings | 117,838 | 105,435 | ||||||
Long-term borrowings | 44,055 | 46,464 | ||||||
Other liabilities | 4,290 | 3,359 | ||||||
TOTAL LIABILITIES | 879,799 | 803,268 | ||||||
Commitments and contingent liabilities | ||||||||
Stockholders’ Equity: | ||||||||
Common Stock — Authorized 25,000,000 shares; issued 15,468,459 in 2009 and 15,283,520 in 2008 | 95,163 | 94,217 | ||||||
Retained earnings | 6,249 | 6,096 | ||||||
Accumulated other comprehensive income (loss) | 2,140 | 2,292 | ||||||
Treasury stock, at cost; 2,053,075 shares in 2009 and 2,053,058 in 2008 | (25,503 | ) | (25,503 | ) | ||||
TOTAL STOCKHOLDERS’ EQUITY | 78,049 | 77,102 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 957,848 | $ | 880,370 | ||||
1
(Unaudited)
(In Thousands except Per Share Data) | ||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
INTEREST AND DIVIDEND INCOME | ||||||||||||||||
Loans, including fees | $ | 9,357 | $ | 8,524 | $ | 18,393 | $ | 17,142 | ||||||||
Taxable securities | 2,284 | 1,955 | 4,580 | 3,532 | ||||||||||||
Tax exempt securities | 613 | 705 | 1,199 | 1,403 | ||||||||||||
Dividends | 67 | 86 | 137 | 229 | ||||||||||||
Federal funds sold | 8 | 77 | 14 | 239 | ||||||||||||
TOTAL INTEREST AND DIVIDEND INCOME | 12,329 | 11,347 | 24,323 | 22,545 | ||||||||||||
INTEREST EXPENSE | ||||||||||||||||
Deposits | 3,133 | 3,995 | 6,422 | 8,167 | ||||||||||||
Short-term borrowings | 467 | 390 | 972 | 985 | ||||||||||||
Long-term borrowings | 501 | 569 | 1,018 | 1,166 | ||||||||||||
TOTAL INTEREST EXPENSE | 4,101 | 4,954 | 8,412 | 10,318 | ||||||||||||
NET INTEREST INCOME | 8,228 | 6,393 | 15,911 | 12,227 | ||||||||||||
Provision for loan losses | 1,050 | 100 | 1,500 | 210 | ||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 7,178 | 6,293 | 14,411 | 12,017 | ||||||||||||
NONINTEREST INCOME | ||||||||||||||||
Service charges on deposit accounts | 653 | 643 | 1,252 | 1,287 | ||||||||||||
Bank owned life insurance income | 126 | 133 | 257 | 265 | ||||||||||||
Trust income | 1,003 | 0 | 1,003 | 0 | ||||||||||||
Security gains | 509 | 0 | 509 | 194 | ||||||||||||
Impairment of equity securities | (74 | ) | (551 | ) | (74 | ) | (551 | ) | ||||||||
Other operating income | 426 | 419 | 814 | 844 | ||||||||||||
TOTAL NONINTEREST INCOME | 2,643 | 644 | 3,761 | 2,039 | ||||||||||||
NONINTEREST EXPENSES | ||||||||||||||||
Salaries and employee benefits | 4,078 | 2,802 | 7,098 | 5,613 | ||||||||||||
Occupancy and equipment | 817 | 733 | 1,667 | 1,454 | ||||||||||||
State and local taxes | 238 | 205 | 451 | 416 | ||||||||||||
Professional fees | 228 | 143 | 443 | 287 | ||||||||||||
Advertising | 155 | 102 | 255 | 223 | ||||||||||||
FDIC insurance | 697 | 17 | 928 | 34 | ||||||||||||
Merger related costs | 0 | 0 | 453 | 0 | ||||||||||||
Intangible amortization | 148 | 0 | 148 | 0 | ||||||||||||
Other operating expenses | 1,442 | 1,093 | 2,616 | 2,074 | ||||||||||||
TOTAL NONINTEREST EXPENSES | 7,803 | 5,095 | 14,059 | 10,101 | ||||||||||||
INCOME BEFORE INCOME TAXES | 2,018 | 1,842 | 4,113 | 3,955 | ||||||||||||
INCOME TAXES | 361 | 308 | 772 | 697 | ||||||||||||
NET INCOME | $ | 1,657 | $ | 1,534 | $ | 3,341 | $ | 3,258 | ||||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||||||||||||||
Change in net unrealized gains (losses) on securities, net of reclassifications | (944 | ) | (2,889 | ) | (152 | ) | (1,165 | ) | ||||||||
COMPREHENSIVE INCOME (LOSS) | $ | 713 | ($1,355 | ) | $ | 3,189 | $ | 2,093 | ||||||||
NET INCOME PER SHARE — basic and diluted | $ | 0.12 | $ | 0.12 | $ | 0.25 | $ | 0.25 | ||||||||
DIVIDENDS PER SHARE | $ | 0.12 | $ | 0.12 | $ | 0.24 | $ | 0.28 | ||||||||
2
(Unaudited)
(In Thousands except Per Share Data) | ||||||||
Six Months Ended | ||||||||
June 30, | June 30, | |||||||
2009 | 2008 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | $ | 3,341 | $ | 3,258 | ||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||
Provision for loan losses | 1,500 | 210 | ||||||
Depreciation and amortization | 671 | 522 | ||||||
Net amortization of securities | 170 | 126 | ||||||
Security gains | (509 | ) | (194 | ) | ||||
Impairment of securities | 74 | 551 | ||||||
Federal Home Loan Bank dividends | 0 | (115 | ) | |||||
Increase in bank owned life insurance | (257 | ) | (265 | ) | ||||
Net change in other assets and liabilities | 22 | (1,003 | ) | |||||
NET CASH FROM OPERATING ACTIVITIES | 5,012 | 3,090 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Proceeds from maturities and repayments of securities available for sale | 37,874 | 31,868 | ||||||
Proceeds from sales of securities available for sale | 9,530 | 6,417 | ||||||
Purchases of securities available for sale | (55,535 | ) | (73,941 | ) | ||||
Purchase of trust entity, net | (10,511 | ) | 0 | |||||
Loan originations and payments, net | (42,240 | ) | 4,297 | |||||
Proceeds from sale of other real estate owned | 146 | 43 | ||||||
Additions to premises and equipment | (395 | ) | (311 | ) | ||||
NET CASH FROM INVESTING ACTIVITIES | (61,131 | ) | (31,627 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Net change in deposits | 65,606 | 40,418 | ||||||
Net change in short-term borrowings | 12,403 | (10,373 | ) | |||||
Proceeds from Federal Home Loan Bank borrowings and other debt | 0 | 5,000 | ||||||
Repayment of Federal Home Loan Bank borrowings and other debt | (2,409 | ) | (7,828 | ) | ||||
Repurchase of common stock | 0 | (493 | ) | |||||
Cash dividends paid | (3,189 | ) | (3,648 | ) | ||||
Proceeds from dividend reinvestment | 946 | 1,415 | ||||||
NET CASH FROM FINANCING ACTIVITIES | 73,357 | 24,491 | ||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 17,238 | (4,046 | ) | |||||
Beginning cash and cash equivalents | 24,049 | 31,105 | ||||||
Ending cash and cash equivalents | $ | 41,287 | $ | 27,059 | ||||
Supplemental cash flow information: | ||||||||
Interest paid | $ | 8,473 | $ | 10,482 | ||||
Income taxes paid | $ | 1,165 | $ | 640 | ||||
Supplemental noncash disclosures: | ||||||||
Transfer of loans to other real estate | $ | 436 | $ | 113 |
3
4
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
(In Thousands of Dollars) | Cost | Gains | Losses | Value | ||||||||||||
June 30, 2009 | ||||||||||||||||
U.S. government-sponsored entities | $ | 73,106 | $ | 952 | $ | (711 | ) | $ | 73,347 | |||||||
States and political subdivisions | 65,531 | 562 | (1,124 | ) | 64,969 | |||||||||||
Mortgage-backed securities — residential | 139,102 | 3,525 | (46 | ) | 142,581 | |||||||||||
Collateralized mortgage obligations | 408 | 11 | 0 | 419 | ||||||||||||
Equity securities | 149 | 126 | (14 | ) | 261 | |||||||||||
Other securities | 250 | 10 | 0 | 260 | ||||||||||||
Totals | $ | 278,546 | $ | 5,186 | $ | (1,895 | ) | $ | 281,837 | |||||||
(In Thousands of Dollars) | ||||||||||||||||
December 31, 2008 | ||||||||||||||||
U.S. government-sponsored entities | $ | 42,611 | $ | 2,089 | $ | (19 | ) | $ | 44,681 | |||||||
States and political subdivisions | 61,749 | 536 | (1,379 | ) | 60,906 | |||||||||||
Mortgage-backed securities | 163,497 | 2,722 | (397 | ) | 165,822 | |||||||||||
Equity securities | 222 | 34 | (60 | ) | 196 | |||||||||||
Totals | $ | 268,079 | $ | 5,381 | $ | (1,855 | ) | $ | 271,605 | |||||||
June 30, 2009 | ||||||||
Amortized | Fair | |||||||
(In Thousands of Dollars) | Cost | Value | ||||||
Maturity | ||||||||
Within one year | $ | 2,600 | $ | 2,634 | ||||
One to five years | 62,741 | 63,301 | ||||||
Five to ten years | 40,938 | 40,729 | ||||||
Beyond ten years | 32,608 | 31,912 | ||||||
Mortgage-backed and CMO securities | 139,510 | 143,000 | ||||||
Total | $ | 278,397 | $ | 281,576 | ||||
5
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
(In Thousands of Dollars) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||
June 30, 2009 | ||||||||||||||||||||||||
Available-for-sale U.S. government- sponsored entities | $ | 34,832 | $ | (694 | ) | $ | 502 | $ | (17 | ) | $ | 35,334 | $ | (711 | ) | |||||||||
States and political | 23,831 | (600 | ) | 4,864 | (524 | ) | 28,695 | (1,124 | ) | |||||||||||||||
Mortgage-backed securities – residential | 274 | (28 | ) | 2,194 | (18 | ) | 2,468 | (46 | ) | |||||||||||||||
Equity securities | 0 | 0 | 9 | (14 | ) | 9 | (14 | ) | ||||||||||||||||
Total | $ | 58,937 | $ | (1,322 | ) | $ | 7,569 | $ | (573 | ) | $ | 66,506 | $ | (1,895 | ) | |||||||||
6
June 30, | December 31, | |||||||
(In Thousands of Dollars) | 2009 | 2008 | ||||||
Loans with no allocated allowance for loan losses | $ | 701 | $ | 213 | ||||
Loans with allocated allowance for loan losses | 7,599 | 2,425 | ||||||
$ | 8,300 | $ | 2,638 | |||||
Amount of the allowance for loan losses allocated | $ | 2,263 | $ | 555 |
June 30, | December 31, | |||||||
(In Thousands of Dollars) | 2009 | 2008 | ||||||
Nonaccrual loans: | ||||||||
Residential real estate | $ | 1,721 | $ | 1,484 | ||||
Commercial real estate | 7,955 | 2,821 | ||||||
Consumer | 216 | 129 | ||||||
Commercial | 971 | 341 | ||||||
Restructured loans | 0 | 0 | ||||||
Loans past due over 90 days still on accrual | 315 | 562 | ||||||
Total nonperforming loans | $ | 11,178 | $ | 5,337 | ||||
Other real estate owned | 355 | 65 | ||||||
Total nonperforming assets | $ | 11,533 | $ | 5,402 | ||||
Percentage of nonperforming loans to loans | 1.88 | % | .97 | % | ||||
Percentage of nonperforming assets to loans | 1.94 | % | .98 | % | ||||
Percentage of nonperforming assets to total assets | 1.20 | % | .61 | % |
7
Three months ended | Six months ended | |||||||||||||||
(Dollars in Thousands, except | June 30, | June 30, | ||||||||||||||
Per Share Data) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Basic EPS computation | ||||||||||||||||
Numerator – Net income | $ | 1,657 | $ | 1,534 | $ | 3,341 | $ | 3,258 | ||||||||
Denominator – Weighted average shares outstanding | 13,339,289 | 13,088,891 | 13,285,768 | 13,053,483 | ||||||||||||
Basic earnings per share | $ | .12 | $ | .12 | $ | .25 | $ | .25 | ||||||||
Diluted EPS computation | ||||||||||||||||
Numerator – Net income | $ | 1,657 | $ | 1,534 | $ | 3,341 | $ | 3,258 | ||||||||
Denominator – Weighted average shares outstanding for basic earnings per share | 13,339,289 | 13,088,891 | 13,285,768 | 13,053,483 | ||||||||||||
Effect of Stock Options | 0 | 0 | 0 | 0 | ||||||||||||
Weighted averages shares for diluted earnings per share | 13,339,289 | 13,088,891 | 13,285,768 | 13,053,483 | ||||||||||||
Diluted earnings per share | $ | .12 | $ | .12 | $ | .25 | $ | .25 | ||||||||
8
Cash and due from banks | $ | 1,614 | ||
Securities available for sale | 2,071 | |||
Premises and equipment | 44 | |||
Goodwill | 3,679 | |||
Other intangible assets | 4,240 | |||
Other assets | 746 | |||
Total assets acquired | 12,394 | |||
Liabilities assumed | (269 | ) | ||
Net assets acquired | $ | 12,125 | ||
9
10
11
Fair Value Measurements at | ||||||||||||||||
June 30, 2009 Using: | ||||||||||||||||
Significant | ||||||||||||||||
Quoted Prices in | Other | Significant | ||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||
Carrying | Identical Assets | Inputs | Inputs | |||||||||||||
(In Thousands of Dollars) | Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Financial Assets | ||||||||||||||||
Investment securities available-for sale | ||||||||||||||||
U.S. government-sponsored entities and agencies | $ | 73,347 | $ | 0 | $ | 73,347 | $ | 0 | ||||||||
States and political subdivisions | 64,969 | 0 | 64,969 | 0 | ||||||||||||
Mortgage-backed securities-residential | 142,581 | 0 | 142,565 | 16 | ||||||||||||
Collateralized mortgage obligations | 419 | 0 | 419 | 0 | ||||||||||||
Equity securities | 261 | 261 | 0 | 0 | ||||||||||||
Other securities | 260 | 0 | 260 | 0 | ||||||||||||
Total investment securities | $ | 281,837 | $ | 261 | $ | 281,560 | $ | 16 | ||||||||
Fair Value Measurements at | ||||||||||||||||
December 31, 2008 Using: | ||||||||||||||||
Significant | ||||||||||||||||
Quoted Prices in | Other | Significant | ||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||
Carrying | Identical Assets | Inputs | Inputs | |||||||||||||
(In Thousands of Dollars) | Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Financial Assets | ||||||||||||||||
Investment securities available-for sale | $ | 271,605 | $ | 196 | $ | 262,432 | $ | 8,977 |
12
Investment | ||||
Securities | ||||
Available-for-sale | ||||
Three months ended June 30, 2009 | ||||
Balance of recurring Level 3 assets at April 1, 2009 | $ | 8,598 | ||
Total unrealized gains or losses: | ||||
Included in other comprehensive income | 0 | |||
Purchases, sales, issuances and settlements, net | (1,610 | ) | ||
Transfers in and/or out of Level 3 | (6,972 | ) | ||
Balance of recurring Level 3 assets at June 30, 2009 | $ | 16 | ||
Investment | ||||
Securities | ||||
Available-for-sale | ||||
Six months ended June 30, 2009 | ||||
Balance of recurring Level 3 assets at January 1, 2009 | $ | 8,977 | ||
Total unrealized gains or losses: | ||||
Included in other comprehensive income | (379 | ) | ||
Purchases, sales, issuances and settlements, net | (1,610 | ) | ||
Transfers in and/or out of Level 3 | (6,972 | ) | ||
Balance of recurring Level 3 assets at June 30, 2009 | $ | 16 | ||
Fair Value Measurements at | ||||||||||||
June 30, 2009 Using: | ||||||||||||
Significant | ||||||||||||
Quoted Prices in | Other | Significant | ||||||||||
Active Markets for | Observable | Unobservable | ||||||||||
Identical Assets | Inputs | Inputs | ||||||||||
(In Thousands of Dollars) | (Level 1) | (Level 2) | (Level 3) | |||||||||
Impaired loans | 0 | 0 | $ | 5,336 |
Fair Value Measurements at | ||||||||||||
December 31, 2008 Using: | ||||||||||||
Significant | ||||||||||||
Quoted Prices in | Other | Significant | ||||||||||
Active Markets for | Observable | Unobservable | ||||||||||
Identical Assets | Inputs | Inputs | ||||||||||
(In Thousands of Dollars) | (Level 1) | (Level 2) | (Level 3) | |||||||||
Impaired loans | 0 | 0 | $ | 1,870 |
13
(In Thousands of Dollars) | Carrying | Fair | ||||||
June 30, 2009 | Amount | Value | ||||||
Financial assets | ||||||||
Cash and cash equivalents | $ | 41,287 | $ | 41,287 | ||||
Securities available-for-sale | 281,837 | 281,837 | ||||||
Restricted stock | 5,317 | n/a | ||||||
Loans, net | 586,756 | 599,682 | ||||||
Accrued interest receivable | 4,091 | 4,091 | ||||||
Financial liabilities | ||||||||
Deposits | 713,616 | 718,972 | ||||||
Short-term borrowings | 117,838 | 117,838 | ||||||
Long-term borrowings | 44,055 | 46,173 | ||||||
Accrued interest payable | 1,260 | 1,260 |
14
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
At or for Three months | At or for Six months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
(Dollars in Thousands, except Per Share Data) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Total Assets | $ | 957,848 | $ | 824,513 | $ | 957,848 | $ | 824,513 | ||||||||
Net Income | $ | 1,657 | $ | 1,534 | $ | 3,341 | $ | 3,258 | ||||||||
Basic and Diluted Earnings per share | $ | .12 | $ | .12 | $ | .25 | $ | .25 | ||||||||
Return on Average Assets (Annualized) | .70 | % | .74 | % | .73 | % | .80 | % | ||||||||
Return on Average Equity (Annualized) | 8.43 | % | 8.16 | % | 8.54 | % | 8.73 | % | ||||||||
Efficiency Ratio (tax equivalent basis) | 70.11 | % | 62.94 | % | 68.90 | % | 64.55 | % | ||||||||
Equity to Asset Ratio | 8.15 | % | 8.89 | % | 8.15 | % | 8.89 | % | ||||||||
Dividends to Net Income | 96.62 | % | 102.35 | % | 95.45 | % | 111.97 | % | ||||||||
Net Loans to Assets | 61.26 | % | 61.13 | % | 61.26 | % | 61.13 | % | ||||||||
Loans to Deposits | 83.15 | % | 80.38 | % | 83.15 | % | 80.38 | % |
15
(Dollar Amounts in Thousands)
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
June 30, 2009 | June 30, 2008 | |||||||||||||||||||||||
AVERAGE | AVERAGE | |||||||||||||||||||||||
BALANCE | INTEREST | RATE (1) | BALANCE | INTEREST | RATE (1) | |||||||||||||||||||
EARNING ASSETS | ||||||||||||||||||||||||
Loans (3) (5) (6) | $ | 570,214 | $ | 9,490 | 6.68 | % | $ | 503,042 | $ | 8,605 | 6.88 | % | ||||||||||||
Taxable securities (4) | 213,060 | 2,284 | 4.30 | 177,804 | 1,955 | 4.42 | ||||||||||||||||||
Tax-exempt securities (4) (6) | 61,002 | 917 | 6.03 | 71,900 | 1,055 | 5.90 | ||||||||||||||||||
Equity Securities (2) (6) | 5,539 | 67 | 4.85 | 8,235 | 92 | 4.49 | ||||||||||||||||||
Federal funds sold | 30,097 | 8 | 0.11 | 15,301 | 77 | 2.02 | ||||||||||||||||||
Total earning assets | 879,912 | 12,766 | 5.82 | 776,282 | 11,784 | 6.11 | ||||||||||||||||||
NONEARNING ASSETS | ||||||||||||||||||||||||
Cash and due from banks | 22,948 | 22,680 | ||||||||||||||||||||||
Premises and equipment | 14,122 | 14,436 | ||||||||||||||||||||||
Allowance for Loan Losses | (5,992 | ) | (5,492 | ) | ||||||||||||||||||||
Unrealized gains (losses) on securities | 6,119 | 912 | ||||||||||||||||||||||
Other assets (3) | 36,304 | 20,803 | ||||||||||||||||||||||
Total Assets | $ | 953,413 | $ | 829,621 | ||||||||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||
Time deposits | $ | 302,435 | $ | 2,386 | 3.16 | % | $ | 293,525 | $ | 3,194 | 4.38 | % | ||||||||||||
Savings deposits | 233,097 | 668 | 1.15 | 180,446 | 688 | 1.53 | ||||||||||||||||||
Demand deposits | 102,026 | 79 | 0.31 | 98,167 | 113 | 0.46 | ||||||||||||||||||
Short term borrowings | 126,773 | 467 | 1.48 | 65,642 | 390 | 2.39 | ||||||||||||||||||
Long term borrowings | 44,292 | 501 | 4.54 | 49,957 | 569 | 4.58 | ||||||||||||||||||
Total Interest-Bearing Liabilities | 808,623 | 4,101 | 2.03 | 687,737 | 4,954 | 2.90 | ||||||||||||||||||
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
Demand deposits | 61,510 | 62,650 | ||||||||||||||||||||||
Other Liabilities | 4,441 | 3,813 | ||||||||||||||||||||||
Stockholders’ equity | 78,839 | 75,421 | ||||||||||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 953,413 | $ | 829,621 | ||||||||||||||||||||
Net interest income and interest rate spread | $ | 8,665 | 3.79 | % | $ | 6,830 | 3.21 | % | ||||||||||||||||
Net interest margin | 3.95 | % | 3.54 | % |
(1) | Rates are calculated on an annualized basis. | |
(2) | Equity securities include restricted stock, which is included in other assets on the consolidated balance sheets. | |
(3) | Non-accrual loans and overdraft deposits are included in other assets. | |
(4) | Includes unamortized discounts and premiums. Average balance and yield are computed using the average historical amortized cost. | |
(5) | Interest on loans includes fee income of $670 thousand and $459 thousand for 2009 and 2008 respectively and is reduced by amortization of $363 thousand and $265 thousand for 2009 and 2008 respectively. | |
(6) | For 2009, adjustments of $133 thousand and $304 thousand respectively are made to tax equate income on tax exempt loans and tax exempt securities. For 2008, adjustments of $81 thousand, $350 thousand, and $6 thousand respectively are made to tax equate income on tax exempt loans, tax exempt securities and to reflect a dividends received deduction on equity securities. These adjustments are based on a marginal federal income tax rate of 35%, less disallowances. |
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(Dollar Amounts in Thousands)
Six Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, 2009 | June 30, 2008 | |||||||||||||||||||||||
AVERAGE | AVERAGE | |||||||||||||||||||||||
BALANCE | INTEREST | RATE (1) | BALANCE | INTEREST | RATE (1) | |||||||||||||||||||
EARNING ASSETS | ||||||||||||||||||||||||
Loans (3) (5) (6) | $ | 562,376 | $ | 18,618 | 6.68 | % | $ | 505,455 | $ | 17,305 | 6.88 | % | ||||||||||||
Taxable securities (4) | 209,681 | 4,580 | 4.44 | 163,605 | 3,532 | 4.34 | ||||||||||||||||||
Tax-exempt securities (4) (6) | 60,012 | 1,795 | 6.03 | 71,637 | 2,101 | 5.90 | ||||||||||||||||||
Equity Securities (2) (6) | 5,540 | 137 | 4.99 | 8,207 | 256 | 6.27 | ||||||||||||||||||
Federal funds sold | 23,882 | 14 | 0.12 | 18,647 | 239 | 2.58 | ||||||||||||||||||
Total earning assets | 861,491 | 25,144 | 5.89 | 767,551 | 23,433 | 6.14 | ||||||||||||||||||
NONEARNING ASSETS | ||||||||||||||||||||||||
Cash and due from banks | 22,696 | 22,755 | ||||||||||||||||||||||
Premises and equipment | 14,128 | 14,445 | ||||||||||||||||||||||
Allowance for Loan Losses | (5,844 | ) | (5,489 | ) | ||||||||||||||||||||
Unrealized gains (losses) on securities | 5,305 | 696 | ||||||||||||||||||||||
Other assets (3) | 30,993 | 20,730 | ||||||||||||||||||||||
Total Assets | $ | 928,769 | $ | 820,688 | ||||||||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||
Time deposits | $ | 295,817 | $ | 4,855 | 3.31 | % | $ | 289,677 | $ | 6,518 | 4.53 | % | ||||||||||||
Savings deposits | 224,768 | 1,385 | 1.24 | 171,855 | 1,413 | 1.65 | ||||||||||||||||||
Demand deposits | 100,325 | 182 | 0.37 | 97,216 | 236 | 0.49 | ||||||||||||||||||
Short term borrowings | 113,360 | 972 | 1.73 | 70,021 | 985 | 2.83 | ||||||||||||||||||
Long term borrowings | 48,755 | 1,018 | 4.21 | 51,048 | 1,166 | 4.59 | ||||||||||||||||||
Total Interest-Bearing Liabilities | 783,025 | 8,412 | 2.17 | 679,817 | 10,318 | 3.05 | ||||||||||||||||||
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
Demand deposits | 62,250 | 60,996 | ||||||||||||||||||||||
Other Liabilities | 4,584 | 4,855 | ||||||||||||||||||||||
Stockholders’ equity | 78,910 | 75,020 | ||||||||||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 928,769 | $ | 820,688 | ||||||||||||||||||||
Net interest income and interest rate spread | $ | 16,732 | 3.72 | % | $ | 13,115 | 3.09 | % | ||||||||||||||||
Net interest margin | 3.93 | % | 3.44 | % |
(1) | Rates are calculated on an annualized basis. | |
(2) | Equity securities include restricted stock, which is included in other assets on the consolidated balance sheets. | |
(3) | Non-accrual loans and overdraft deposits are included in other assets. | |
(4) | Includes unamortized discounts and premiums. Average balance and yield are computed using the average historical amortized cost. | |
(5) | Interest on loans includes fee income of $1.290 million and $799 thousand for 2009 and 2008 respectively and is reduced by amortization of $698 thousand and $532 thousand for 2009 and 2008 respectively. | |
(6) | For 2009, adjustments of $225 thousand and $596 thousand respectively are made to tax equate income on tax exempt loans and tax exempt securities. For 2008, adjustments of $163 thousand, $698 thousand, and $27 thousand respectively are made to tax equate income on tax exempt loans, tax exempt securities and to reflect a dividends received deduction on equity securities. These adjustments are based on a marginal federal income tax rate of 35%, less disallowances. |
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For the Three Months Ended June 30, 2009 | ||||||||||||
Total | Corporation | |||||||||||
(In Thousands of Dollars) | Corporation | without Trust | Trust | |||||||||
Noninterest expense | ||||||||||||
Salaries and employee benefits | $ | 4,078 | $ | 3,452 | $ | 626 | ||||||
Occupancy and equipment | 817 | 768 | 49 | |||||||||
State and local taxes | 238 | 223 | 15 | |||||||||
Professional fees | 228 | 213 | 15 | |||||||||
Advertising | 155 | 151 | 4 | |||||||||
FDIC insurance | 697 | 697 | 0 | |||||||||
Merger related costs | 0 | 0 | 0 | |||||||||
Intangible amortization | 148 | 0 | 148 | |||||||||
Other operating expenses | 1,442 | 1,276 | 166 | |||||||||
Total noninterest expense | $ | 7,803 | $ | 6,780 | $ | 1,023 | ||||||
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(In Thousands of Dollars)
6/30/09 | 3/31/09 | 12/31/08 | 9/30/08 | 6/30/08 | ||||||||||||||||
Nonperforming loans | $ | 11,178 | $ | 9,593 | $ | 5,337 | $ | 3,088 | $ | 2,879 | ||||||||||
Nonperforming loans as a % of total loans | 1.88 | % | 1.68 | % | .97 | % | .58 | % | .57 | % | ||||||||||
Allowance for loan losses | $ | 6,640 | $ | 5,835 | $ | 5,553 | $ | 5,433 | $ | 5,487 | ||||||||||
Allowance for loan losses as a % of loans | 1.12 | % | 1.02 | % | 1.01 | % | 1.03 | % | 1.08 | % | ||||||||||
Allowance for loan losses as a % of nonperforming loans | 59.40 | % | 60.83 | % | 104.05 | % | 175.94 | % | 190.59 | % |
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
June 30, | December 31, | |||||||||||
Changes In Interest Rate | 2009 | 2008 | ALCO | |||||||||
(basis points) | Result | Result | Guidelines | |||||||||
Net Interest Income Change | ||||||||||||
+200 | -4.30 | % | -5.66 | % | 15.00 | % | ||||||
-200 | -2.90 | % | 2.11 | % | 15.00 | % | ||||||
Net Present Value Of Equity Change | ||||||||||||
+200 | -8.16 | % | -7.41 | % | 20.00 | % | ||||||
-200 | -15.47 | % | -7.35 | % | 20.00 | % |
22
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
23
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Submission of Matters to a Vote of Security Holders |
Elected Director | Votes For | Votes Against | ||||||
Benjamin R. Brown | 8,833,375 | 257,847 | ||||||
Anne F. Crawford | 8,827,193 | 264,579 | ||||||
James R. Fisher | 8,798,990 | 280,737 |
Continuing Director | Term Expiring | |
Ralph D. Macali | April 2010 | |
Frank L. Paden | April 2010 | |
Earl R. Scott | April 2010 | |
Joseph D. Lane | April 2011 | |
Ronald V. Wertz | April 2011 |
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Item 6. | Exhibits |
2. | Not applicable. | |||
3(i). | The Articles of Incorporation, including amendments thereto for the Registrant. Incorporated by reference to Exhibit 4.1 to Farmers National Banc Corp’s Form S-3 Registration Statement dated October 3, 2001. (File No. 0-12055). | |||
3(ii). | The Code of Regulations, including amendments thereto for the Registrant. Incorporated by reference to Exhibit 4.2 to Farmers National Banc Corp’s Form S-3 Registration Statement dated October 3, 2001. (File No. 0-12055). | |||
4. | Incorporated by reference to initial filing. | |||
10.1 | Letter Agreement, dated July 22, 2008, between Farmers National Bank of Canfield (the “Bank”), and John S. Gulas (Incorporated herein by reference to Exhibit 10.1 to the Bank’s July 22, 2008 Form 8-K). | |||
10.2 | Letter Agreement, dated December 23, 2008, between Farmers National Bank of Canfield (the “Bank”), and Kevin J. Helmick (Incorporated herein by reference to Exhibit 10.2 to the Bank’s December 23, 2008 Form 8-K). | |||
10.3 | Letter Agreement, dated December 23, 2008, between Farmers National Bank of Canfield (the “Bank”), and Mark L. Graham (Incorporated herein by reference to Exhibit 10.3 to the Bank’s December 23, 2008 Form 8-K). | |||
10.4 | Letter Agreement, dated December 23, 2008, between Farmers National Bank of Canfield (the “Bank”), and Frank L. Paden (Incorporated herein by reference to Exhibit 10.4 to the Bank’s December 23, 2008 Form 8-K). | |||
10.5 | Letter Agreement, dated December 23, 2008, between Farmers National Bank of Canfield (the “Bank”), and Carl D. Culp (Incorporated herein by reference to Exhibit 10.5 to the Bank’s December 23, 2008 Form 8-K). | |||
10.6 | Certified Resolution regarding Adoption of Farmers National Banc Corp 1999 Stock Option Plan, (Incorporated herein by reference to Exhibit 10.6 to Farmers National Banc Corp’s Proxy dated February 24, 1999). | |||
11. | Refer to notes to unaudited consolidated financial statements. | |||
15. | Not applicable. | |||
18. | Not applicable. | |||
19. | Not applicable. | |||
22. | Not applicable. | |||
23. | Not applicable. | |||
24. | Not applicable. | |||
31.a | Certification of Chief Executive Officer (Filed herewith) | |||
31.b | Certification of Chief Financial Officer (Filed herewith) | |||
32.a | 906 Certification of Chief Executive Officer (Filed herewith) | |||
32.b | 906 Certification of Chief Financial Officer (Filed herewith) |
25
FARMERS NATIONAL BANC CORP. | ||
Dated: August 28, 2009 | ||
/s/ Frank L. Paden | ||
President and Secretary | ||
Dated: August 28, 2009 | ||
/s/ Carl D. Culp | ||
Executive Vice President and Treasurer |
26