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Sep 30, 2024
Farmers National Q3 2024 Earnings Report
Reported a decrease in net income due to a commercial credit charge-off, but experienced strong loan and deposit growth.
Key Takeaways
Farmers National Banc Corp. reported a net income of $8.5 million, or $0.23 per diluted share, for Q3 2024. This is a decrease compared to Q3 2023, which had a net income of $13.3 million, or $0.36 per diluted share. The results were impacted by a $12.5 million commercial credit, which led to a $4.4 million charge-off and a $1.2 million specific reserve.
Net income was $8.5 million, or $0.23 per diluted share, for the quarter ended September 30, 2024.
Commercial loan growth was strong at $35.2 million, or 7.2% annualized.
Overall loan growth reached $43.1 million, or 5.3% annualized.
Customer deposits grew by $81.1 million, or 7.7% annualized.
Farmers National
Farmers National
Forward Guidance
Farmers National Banc Corp. anticipates total loans to increase by approximately 2.8% - 3.0% for 2024.
Positive Outlook
- Company anticipates total loans to increase by approximately 2.8% - 3.0% for 2024.
- Company remains committed to maintaining solid asset quality.
- Company remains committed to prudent pricing standards.
- These factors are expected to contribute to higher overall profitability.
- Federal Reserve’s 50 basis point cut in the fed funds rate at the end of September 2024 will have a positive impact on the Company’s net interest margin in the fourth quarter of 2024.
Challenges Ahead
- Net income in the third quarter of 2024 was impacted by a single $12.5 million commercial credit backed by office space.
- This resulted in a $4.4 million charge-off along with the establishment of a specific reserve on the credit in the amount of $1.2 million.
- The impact of this credit reduced third quarter results by $0.12 per diluted share.
- Company still expects bond market volatility to continue for the remainder of 2024 and into 2025.
- The year-over-year decline in net interest margin was due to higher funding costs outstripping the increase in yields on earning assets.