Farmers National Banc : 2024 - Annual Report

Published: 2025-03-20 10:55:05 ET FMNB

A N N U A L R E P O R T

Dine local.

Shop local.

Bank local.

A N N U A L R E P O R T

Forward Looking Statements

Cautionary Note Regarding Forward Looking Statements: Certain statements contained herein are "forward looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. For a discussion of factors that could cause future results to diﬀer from historical performance or those forward-looking statements, see "Cautionary Note Regarding Forward Looking Statements" on page 28, "Supervision and Regulation" on page 3, and "Item 1A. Risk Factors" on page 14 of the attached Annual Report on Form 10-K for the year ended December 31, 2024 and all risks and uncertainties disclosed in our ﬁlings with the SEC, including our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which are available on the SEC's website at www.sec.gov. We do not undertake, and expressly disclaim, any obligation to update any forward-looking statements, except as required by applicable law.

Board of Directors

2,3,5

Richard B. Thompson

Terry A. Moore

1,4

Chairman of the Board

Executive, Therm-O-Link, Inc.

Former Managing Shareholder, Krugliak,

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Neil J. Kaback

1,4

Retired Partner, Cohen & Company

David Z. Paull

2,4,5

Retired Vice President, Human Resources

Nicholas D. Varischetti

1,3

Operations and Labor Relations, RTI International Metals, Inc.

Attorney, Burns White

Partner, Varischetti Holdings, LP

Gregory C. Bestic

1,2

Allegheny Strategy Partners

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André Thornton

3,4

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President & CEO, ASW Global LLC.

Public Accountants and Strategic Advisors

Carl D. Culp

Kevin J. Helmick

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Farmers National Banc. Corp

Gina A. Richardson

1,3

Legal Counsel, Gina Richardson LLC.

Ralph D. Macali

1,3

Vice President of Palmer J. Macali, Inc.

Partner in P.M.R.P. Partnership

Edward W. Muransky

3,4,5

1 Audit Committee

CEO, Chestnut Land Company

2 Compensation Committee

3 Corporate Governance and Nominating Committee

Frank J. Monaco

2,4

4 Board Enterprise Risk Management Committee

Senior Partner, 415 Group

5 Executive Committee

Annual Meeting Notice

The Annual Meeting of Shareholders will be held at 10:00 a.m. Eastern Time

on Thursday, April 17, 2025, via live webcast at https://meetnow.global/MT9XFPM

2 0 2 4 A N N U A L R E P O R T

B uilding on a Rock- Solid Foundation for

GROWTH AND PROGRESS.

Dear Fellow Shareholders,

"Without continual growth and prog ress, such words as improvement, achievement and success have no meaning." - Benjamin Franklin

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Kevin J. Helmick

President & Chief Executive Officer

A N N U A L R E P O R T

COMMITMENT TO COMMUNITY

212

ASSOCIATES

250+

ORGANIZATIONSCOUNTIES

I N 2 0 2 4 ,

TWO BANK-WIDE VOLUNTEER INITIATIVES WERE HELD.

HABITAT FOR HUMANITY

Pennsylvania

Habitat for Humanity - Pittsburgh

Salvation Army - Across Farmers Footprint

A N N U A L R E P O R T

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2024

For the transition period from

Commission file number 001-35296

Farmers National Banc Corp.

(Exact name of registrant as specified in its charter)

Ohio

34-1371693

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

20 South Broad Street, Canfield, Ohio

44406

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: 330-533-3341

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Common Shares, no par value

The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Yes ☐

No ☒

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes

☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ((§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definition of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1 (b). ☐

As of June 30, 2024, the estimated aggregate market value of the registrant's common shares, no par value (the only common equity of the registrant), held by non-affiliates of the registrant was approximately $450.8 million based upon the last sales price as of June 28, 2024 reported on NASDAQ. (The exclusion from such amount of the market value of the common shares owned by any person shall not be deemed as admission by the registrant that such person is an affiliate of the registrant).

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, No Par Value

FMNB

The NASDAQ Stock Market

As of March 1, 2025, the registrant had outstanding 37,614,636 common shares, no par value.

DOCUMENTS INCORPORATED BY REFERENCE

Document

Portions of the registrant's definitive proxy statement for the 2024 Annual Meeting of Shareholders

Part of Form 10-K

into which

Document is Incorporated

III

FARMERS NATIONAL BANC CORP.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2024

TABLE OF CONTENTS

PART I

Item 1.

Business

Item 1A.

Risk Factors

Item 1B.

Unresolved Staff Comments

Item 2.

Properties

Item 3.

Legal Proceedings

Item 4.

Mine Safety Disclosures

PART II

Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ....

Item 6.

Reserved

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A.

Quantitative and Qualitative Disclosure about Market Risk

Item 8.

Financial Statements and Supplementary Financial Data

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

118

Item 9A.

Controls and Procedures

118

Item 9B.

Other Information

118

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

118

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

118

Item 11.

Executive Compensation

119

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

120

Item 13.

Certain Relationships and Related Transactions, and Director Independence

120

Item 14.

Principal Accountant Fees and Services

120

PART IV

Item 15.

Exhibits, Financial Statement Schedules

120

Item 16.

Form 10-K Summary

120

SIGNATURES

124

PART I

Item 1. Business.

General

Farmers National Banc Corp.

Farmers National Banc Corp. (the "Company," "Farmers," "we," "our" or "us"), is a financial holding company and was organized as a one-bank holding company in 1983 under the laws of the State of Ohio and registered under the Bank Holding Company Act of 1956, as amended (the "BHCA"). Amendments to the BHCA in 1999 allowed for a bank holding company to declare itself a financial holding company and thereby engage in financial activities, including securities underwriting and dealing, insurance agency and underwriting activities, and merchant banking activities. The Company made the declaration to become a financial holding company in 2016. For a bank holding company to be eligible to declare itself a financial holding company, all of the depository institution subsidiaries must be well-capitalized and well-managed and have satisfactory or better ratings under the Community Reinvestment Act of 1977 (the "CRA"). The Company operates principally through its wholly-owned subsidiaries, The Farmers National Bank of Canfield (the "Bank" or "Farmers Bank") and Farmers Trust Company ("Farmers Trust"). A third subsidiary, Farmers National Captive, Inc. ("Captive"), was dissolved in November of 2023. Farmers National Insurance, LLC ("Farmers Insurance") and Farmers of Canfield Investment Co. ("Investments" or "Farmers Investments") are wholly-owned subsidiaries of the Bank. The Company and its subsidiaries operate in the domestic banking, trust, retirement consulting, insurance and financial management industries.

The Company's principal business consists of owning and supervising its subsidiaries. Although Farmers directs the overall policies of its subsidiaries, including lending practices and financial resources, most day-to-day affairs are managed by their respective officers.

The Company's principal executive offices are located at 20 South Broad Street, Canfield, Ohio 44406, and its telephone number is (330) 533-3341. Farmers' common shares, no par value, are listed on the NASDAQ Capital Market (the "NASDAQ") under the symbol "FMNB." Farmers' business activities are managed and financial performance is primarily aggregated and reported in two lines of business, the Bank segment and the Trust segment. For a discussion of Farmers' financial performance for the fiscal year ended December 31, 2024, see the Consolidated Financial Statements and Notes to the Consolidated Financial Statements found in Item 8 of this Annual Report on Form 10-K.

The Farmers National Bank of Canfield

On January 1, 2023, Farmers National Banc Corp. (the "Company") completed its previously announced merger with Emclaire Financial Corp., a Pennsylvania corporation and registered financial holding company ("Emclaire"), pursuant to the Agreement and Plan of Merger dated as of March 23, 2022, by and among the Company, FMNB Merger Subsidiary V, LLC, a wholly owned subsidiary of Farmers ("Merger Sub"), and Emclaire (the "Merger Agreement"). Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the "Effective Time") Emclaire merged with and into Merger Sub (the "Merger"), with Merger Sub as the surviving entity in the Merger. Promptly following the consummation of the Merger, Merger Sub was dissolved and liquidated and The Farmers National Bank of Emlenton, the banking subsidiary of Emclaire, merged with and into The Farmers National Bank of Canfield, the national banking subsidiary of the Company ("Farmers Bank"), with Farmers Bank as the surviving bank. Pursuant to the terms of the Merger Agreement, at the Effective Time of the Merger, each common share, without par value, of Emclaire ("Emclaire Common Shares") issued and outstanding immediately prior to the Effective Time (except for certain Emclaire Common Shares held directly by Emclaire or the Company) was converted into the right to receive, without interest, $40.00 in cash (the "Cash Consideration") or 2.15 common shares, without par value, of the Company ("Company Common Shares") (the "Stock Consideration"), subject to an overall limitation of 70% of the Emclaire Common Shares being exchanged for the Stock Consideration and the remaining 30% of Emclaire Common Shares being exchanged for the Cash Consideration. No fractional Company Common Shares were issued in the Merger, and Emclaire's shareholders became entitled to receive cash in lieu of fractional Company Common Shares. Emclaire operated 19 branches in ten counties throughout western Pennsylvania.

The Bank is a full-service national banking association engaged in commercial and retail banking mainly in the northeastern region of Ohio and the western region of Pennsylvania. The Bank's commercial and retail banking services include checking accounts, savings accounts, time deposit accounts, commercial, mortgage and installment loans, home equity loans, home equity lines of credit, night depository, safe deposit boxes, money orders, bank checks, automated teller machines, internet banking, travel cards, "E" Bond transactions, brokerage services and other miscellaneous services normally offered by commercial banks.

A discussion of the general development of the Bank's business and information regarding its financial performance throughout 2024, is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of this Annual Report on Form 10-K.

The Bank faces significant competition in offering financial services to customers. Ohio and Pennsylvania have a high density of financial service providers, many of which are significantly larger institutions that have greater financial resources than the Bank, and all of which are competitors to varying degrees. Competition for loans comes principally from savings banks, savings and loan associations, commercial banks, mortgage banking companies, credit unions, insurance companies and other financial service companies. The most direct competition for deposits has historically come from savings and loan associations, savings banks, commercial banks and credit unions. Additional competition for deposits comes from non-depository competitors such as the mutual fund industry, securities and brokerage firms and insurance companies.

Farmers Trust Company

During 2009, the Company acquired Farmers Trust. Farmers Trust offers a full complement of personal and corporate trust services in the areas of estate settlement, trust administration, employee benefit plans and retirement services. During 2024, Farmers Trust acquired substantially all of the assets, in a cash transaction, of Crest Retirement Advisors, LLC ("Crest"). Farmers Trust operates five offices located in Boardman, Canton, Howland, Wooster and Fairview Park, Ohio.

Farmers National Captive, Inc.

Captive was formed during 2016 and operated until November 20, 2023 when the Company dissolved the entity. During its operation Captive was a wholly-owned insurance subsidiary of the Company that provided property and casualty insurance coverage to the Company and its subsidiaries. The Captive pooled resources with similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves and to provide insurance where not available or economically feasible. Captive did not account for a material portion of revenue and, therefore, will not be discussed individually, but as part of the Company.

Farmers National Insurance, LLC

Farmers Insurance was formed during 2009 and offers a variety of insurance products through licensed representatives. During 2022, Farmers Insurance acquired substantially all of the assets, in a cash transaction, of Randy L. Jones Agency, Inc., doing business as Champion Insurance. Farmers Insurance is a subsidiary of Farmers Bank and does not account for a material portion of revenue and, therefore, will not be discussed individually, but as part of the Bank.

Farmers of Canfield Investment Company

Farmers Investments was formed during 2014, with the primary purpose of investing in municipal securities. Farmers Investments is a subsidiary of Farmers Bank and does not account for a material portion of revenue and, therefore, will not be discussed individually, but as part of the Bank.

Investor Relations

The Company maintains an Internet site at http://www.farmersbankgroup.com, which contains an Investor Relations section that provides access to the Company's filings with the Securities and Exchange Commission (the "Commission"). Farmers makes available free of charge on or through its website the Company's annual reports on

Disclaimer

Farmers National Banc Corp. published this content on March 20, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 20, 2025 at 14:54:05.402.