Farmers National Banc Corp. Reports Solid Results for Second Quarter of 2026

• 174 consecutive quarters of profitability
• EPS was $0.39 for the quarter, $0.41 excluding acquisition and core conversion costs (non-GAAP)
• Non-performing loans declined $15.2 million, or 25.4%, during the quarter
• Commercial lending fundings accelerated significantly during the second quarter, with approximately $175.0 million in fundings, representing an 181% increase over the first quarter
• Unfunded commercial balances expanded by approximately $40.0 million, or 9%, since the end of March, reflecting continued growth in committed business and lending activity
• Net interest margin increased to 3.44% in the second quarter of 2026 from 3.12% in the first quarter of 2026 and 2.91% in the second quarter of 2025
• Efficiency ratio was 55.6% in the second quarter of 2026, 53.2% excluding acquisition/core conversion costs (non-GAAP)

CANFIELD, Ohio--(BUSINESS WIRE)--Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today reported net income of $23.0 million, or $0.39 per diluted share, for the second quarter of 2026 compared to $13.9 million, or $0.37 per diluted share, for the second quarter of 2025. Net income in the second quarter of 2026 included $1.7 million of expense related to the March 2, 2026 acquisition of Middlefield Banc Corp. (Middlefield) and core conversion costs. Excluding these items (non-GAAP), adjusted net income for the second quarter of 2026 was $24.4 million, or $0.41 per diluted share.

Kevin J. Helmick, President and CEO, stated: “I am extremely pleased with the accelerated commercial fundings of $175 million in the second quarter as the team continues to focus on consistency in this area. We also made meaningful progress integrating the March 2026 Middlefield acquisition during the quarter and preparing for our core technology conversion, which remains on track for completion late in the third quarter. These initiatives are important components of our ongoing investment to build a stronger, more efficient and increasingly scalable community banking platform. As we bring our teams, systems and capabilities together, we believe we are strengthening the foundation of our business and enhancing our ability to serve customers across our growing Ohio and Pennsylvania markets.”

Balance Sheet

Total assets were $7.14 billion at June 30, 2026, compared to $7.18 billion at March 31, 2026, and $5.25 billion at December 31, 2025. The increase since December was due to the Middlefield acquisition which added $1.82 billion in assets at the date of closing. Total loans, net of allowance, decreased to $4.72 billion at June 30, 2026, from $4.75 billion at March 31, 2026, and $3.27 billion at December 31, 2025. The increase since December was due to Middlefield which added $1.49 billion in total loans at the date of closing. The decline from March was due to heavier than expected commercial loan payoffs from the Middlefield portfolio and a decline in non-performing loans. The Company expects the payoffs to return to normal levels in the third quarter.

Securities available for sale decreased slightly to $1.47 billion at June 30, 2026, compared to $1.48 billion at March 31, 2026, and $1.34 billion at December 31, 2025. Middlefield added $152.8 million to securities available for sale. The Company anticipates continued rate volatility in the bond market in 2026, which will continue to affect the value of the portfolio.

Total deposits declined to $5.83 billion at June 30, 2026, compared to $5.92 billion at March 31, 2026, and $4.34 billion at December 31, 2025. The increase since December was primarily due to Middlefield, which added $1.49 billion in deposits at the time of closing. The decline since March was primarily due to seasonal factors associated with public funds and the purposeful shrinkage of certain non-core deposits acquired in the Middlefield transaction.

Total stockholders’ equity increased to $784.0 million at June 30, 2026, from $766.9 million at March 31, 2026, and $485.7 million at December 31, 2025. The increase since December was primarily driven by the acquisition of Middlefield while the increase since March was primarily driven by earnings offset by dividends paid to shareholders.

Credit Quality

Non-performing loans declined to $44.6 million at June 30, 2026, from $59.9 million at March 31, 2026 and $26.2 million at December 31, 2025. The increase from December was due to the Middlefield acquisition while the decrease from March was due to strong workout efforts in the second quarter. Nonperforming loans to total loans were 0.93% at June 30, 2026, compared to 1.25% at March 31, 2026, and 0.79% at December 31, 2025. Loans 30-89 days delinquent were $18.9 million at June 30, 2026, or 0.40% of total loans, compared to $14.7 million at March 31, 2026, and $16.9 million at December 31, 2025.

The provision for credit losses and unfunded commitments was $2.4 million in the second quarter of 2026 compared to a provision for credit losses of $3.5 million in the second quarter of 2025. Annualized net charge-offs as a percentage of average loans were 0.30% in the second quarter of 2026, compared to 0.07% in the second quarter of 2025. The increase in net charge-offs was associated with the resolution of non-performing loans, but most of the net charge-offs came from loans that carried specific reserves the cost of which had been recognized in prior periods. The allowance for credit losses to total loans was 1.12% at June 30, 2026, 1.14% at March 31, 2026, and 1.11% at December 31, 2025.

Net Interest Income

Net interest income increased to $56.0 million in the second quarter of 2026, compared to $34.9 million in the second quarter of 2025. Average interest earning assets increased to $6.63 billion in the second quarter of 2026 compared to $4.89 billion in the second quarter of 2025. The increase was primarily driven by the acquisition of Middlefield. Net interest margin improved to 3.44% in the second quarter of 2026 compared to 2.91% in the second quarter of 2025. The year-over-year increase in net interest margin was due to the acquisition and higher yields on earning assets and lower funding costs on interest bearing liabilities. In addition, the Company saw greater accretion of loan marks in the second quarter associated with the payoff of Middlefield loan balances mentioned earlier. The Company also recognized a $1.0 million prepayment penalty from the payoff of one of the Middlefield commercial loans. The Company expects the net interest margin to settle back into a range of approximately 3.34% to 3.37% in the third quarter of 2026. The yield on interest earning assets increased from 4.77% in the second quarter of 2025 to 5.25% in the second quarter of 2026, while the cost of interest-bearing liabilities declined from 2.49% in the second quarter of 2025 to 2.44% in the second quarter of 2026. Excluding acquisition marks, non-GAAP, the Company’s net interest margin was 3.28% in the second quarter of 2026, and 2.77% in the second quarter of 2025.

Noninterest Income

Noninterest income increased to $14.4 million in the second quarter of 2026 from $12.1 million in the second quarter of 2025. The increase was driven by the Middlefield acquisition and continued growth in the Company’s wealth lines of business. Service charge income was $2.4 million in the second quarter of 2026 compared to $1.7 million in the second quarter of 2025 primarily due to the acquisition. Bank owned life insurance income increased to $1.4 million in the second quarter of 2026 compared to $832,000 in the second quarter of 2025. Death claims were higher by $271,000 in 2026 compared to 2025 and the addition of Middlefield was primarily responsible for the difference. Trust fees were $3.1 million for the second quarter of 2026 up from $2.6 million in the second quarter of 2025 as continued growth in this business unit continued to drive revenue. Insurance commissions declined to $1.5 million in the second quarter of 2026 from $1.8 million in the second quarter of 2025. During the second quarter of 2025, the Company recognized $329,000 in revenue sharing associated with its BOLI purchase in the first quarter of 2025. Investment commissions totaled $1.0 million for the second quarter of 2026 compared to $721,000 for the second quarter of 2025. The increase was primarily due to the addition of Middlefield and the continued additions of investment representatives to the program. Debit card income increased to $2.6 million in the second quarter of 2026 from $2.0 million in the second quarter of 2025. The increase was driven by the Middlefield acquisition. Other noninterest income declined to $826,000 in the second quarter of 2026 compared to $1.2 million in the second quarter of 2025 primarily due to lower SBIC income in 2026.

Noninterest Expense

Noninterest expense increased to $40.9 million in the second quarter of 2026 from $27.2 million in the second quarter of 2025 primarily as a result of the Middlefield acquisition and the recognition of $1.7 million in acquisition and core conversion costs in the second quarter of 2026. Many of the categories of expense discussed below will begin to see a decline in the second half of the year after the Company completes its anticipated system conversion in August of 2026. Salaries and employee benefits increased to $21.3 million in the second quarter of 2026 from $14.7 million in the second quarter of 2025. The increase was primarily driven by annual raises and the Middlefield acquisition. Occupancy and equipment expenses increased to $5.9 million in the second quarter of 2026, an increase of $1.8 million from the second quarter of 2025, primarily as result of the acquisition. Professional fees increased to $1.4 million in the second quarter of 2026 from $1.0 million in the second quarter of 2025. The increase was primarily driven by the Middlefield acquisition. FDIC insurance and state and local taxes were $1.9 million in the second quarter of 2026 compared to $1.3 million in the second quarter of 2025. The increase was due to the acquisition and increased franchise tax from higher levels of capital year-over-year. Core processing expense increased to $2.3 million in the second quarter of 2026 compared to $1.4 million in the second quarter of 2025. The increase was due to the acquisition and a lower level of service credits in 2026. Other noninterest expense increased by $1.0 million to $4.5 million in the second quarter of 2026 primarily as a result of the acquisition and timing issues.

Liquidity

The Company had access to an additional $608.5 million in FHLB borrowing capacity at June 30, 2026, along with $415.3 million in available for sale securities that are available for pledging. The Company’s loan to deposit ratio was 81.9% at June 30, 2026.

About Farmers National Banc Corp.

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $7.1 billion in banking assets. Farmers National Banc Corp.’s wholly owned subsidiaries are comprised of The Farmers National Bank of Canfield, a full-service national bank engaged in commercial and retail banking with 83 banking locations in Ohio and western Pennsylvania, and Farmers Trust Company, which operates trust offices and offers services in the same geographic markets. Total wealth management assets under care at June 30, 2026, are $5.1 billion. Farmers National Insurance LLC, a wholly owned subsidiary of The Farmers National Bank of Canfield, offers a variety of insurance products.

Non-GAAP Disclosure

This press release includes disclosures of Farmers’ tangible common equity ratio, return on average tangible assets, return on average tangible equity, net income excluding costs related to acquisition activities and certain items, return on average assets excluding acquisition costs and certain items, return on average equity excluding acquisition costs and certain items, net interest margin excluding acquisition marks and related accretion and PPP interest and fees and efficiency ratio less certain items, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers’ marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures to their GAAP equivalents are included in the tables following Consolidated Financial Highlights below.

Cautionary Statements Regarding Forward-Looking Statements

We make statements in this news release and our related investor conference call, and we may from time to time make other statements, that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Farmers’ financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, as well as any statements related to future expectations of performance or conditional verbs, such as “will,” “would,” “should,” “could” or “may.” Farmers’ actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from those described in certain forward-looking statements include significant changes in near-term local, regional, and U.S. economic conditions including those resulting from continued high rates of inflation, tightening monetary policy of the Board of Governors of the Federal Reserve, U.S. and foreign country tariff policies, and possibility of a recession; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2025 and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (SEC) and available on Farmers’ website (www.farmersbankgroup.com) and on the SEC’s website (www.sec.gov). 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 does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

Farmers National Banc Corp.
Kevin J. Helmick, President and CEO
20 South Broad Street, P.O. Box 555
Canfield, OH 44406
330.533.3341
Email: exec@farmersbankgroup.com