Farmers National Banc reports Q3 EPS 40c, consensus 38c

The Company reported net interest income of $33.8M in the third quarter of 2023 compared to $34.6M in the second quarter of 2023 and $31.8M for the third quarter of 2022. Earning assets were greater in 2023 due to the acquisition of Emclaire but this was partially offset by a decline of 35 basis point in the net interest margin. The net interest margin was 2.86% in the third quarter of 2023 compared to 2.92% for the second quarter of 2023 and 3.21% for the third quarter of 2022…Noninterest income totaled $9.8 M for the three months ended September 30, 2023, compared to $8.8 million for the three months ended September 30, 2022. Service charges on deposit accounts increased to $1.7 million in the third quarter of 2023 compared to the same period in 2022 primarily due to the acquisition of Emclaire. Bank owned life insurance income, other mortgage banking fee income and debit card income have also increased in the third quarter of 2023 compared to the third quarter of 2022 due to the Emclaire acquisition. Insurance agency commissions are flat in the third quarter of 2023 compared to the second quarter of 2022 but growth for the year has been solid as growth in the insurance business and increased annuity sales have bolstered income.Excluding the impact of acquisition marks and related accretion and PPP interest and fees, the net interest margin for the third quarter of 2023 was 2.61% compared to 2.68% for the second quarter of 2023 and 3.19% for the third quarter of 2022. The decline in net interest margin between the third quarter of 2023 and the third quarter of 2022 was due to increases in funding costs outstripping the increase in yields on earning assets. “Despite the rapid increase in interest rates over the past year and a half, Farmers produced solid third quarter financial results reflecting the benefits of our diverse business model as well as our focus on maintaining strong asset quality and controlling operating expenses. These core banking principals create a solid foundation for Farmers to navigate an increasingly uncertain near-term economic environment, while supporting our long-term growth strategies.”