Farmers National Banc Corp. Reports Results for Third Quarter of 2026

Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced net income of $14.5 million, or $0.25 per diluted share, for the third quarter of 2026 compared to $12.5 million, or $0.33 per diluted share, for the third quarter of 2025. Net income in the third quarter of 2026 included $6.1 million in expense related to the March 2, 2026, acquisition of Middlefield Banc Corp. (“Middlefield”) and core conversion costs. In addition, the Company recognized a $10.3 million loss on the sale of securities and $600,000 in severance costs. Excluding these items (non-GAAP), adjusted net income for the third quarter of 2026 was $28.0 million, or $0.47 per diluted share.

Kevin J. Helmick, President and CEO, stated: “As expected, the third quarter was a period of strategic execution and transformation for Farmers, as we completed our core technology conversion, executed the integration of the March 2026 Middlefield acquisition, and repositioned our investment securities portfolio. These actions represent important milestones in our ongoing strategy to improve operating efficiency, enhance profitability, and grow our community banking franchise. With these significant initiatives largely behind us, we expect to begin realizing their financial benefits in the fourth quarter, with additional contributions expected in 2027. We remain focused on leveraging our expanded capabilities and growing market presence to drive sustainable, profitable growth.”

Balance Sheet

Total assets were $7.12 billion at September 30, 2026, compared to $7.14 billion at June 30, 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. Total loans, net of allowance, increased to $4.80 billion at September 30, 2026, from $4.72 billion at June 30, 2026, and $3.27 billion at December 31, 2025. The increase since December was due to the Middlefield acquisition which added $1.49 billion in total loans. The 1.6% sequential increase from the second quarter was driven by strong gains across all business lines including 1.4% sequential growth in the commercial portfolio.

Securities available for sale decreased slightly to $1.40 billion at September 30, 2026, compared to $1.47 billion at June 30, 2026, and $1.34 billion at December 31, 2025. Middlefield added $152.8 million to securities available for sale. During the quarter, the Company restructured $90.5 million of securities incurring a $10.3 million loss. The restructuring resulted in an increase in the yield of the securities sold from 1.61% to approximately 5.25%. This increase resulted in a payback period on the loss of 3.1 years. The Company also saw a decline in the value of the securities of $91.3 million during the quarter due to the rapid rise in U.S. Treasury rates. The Company anticipates continued rate volatility in the bond market in 2026 and 2027, which will continue to affect the value of the portfolio.

Total deposits declined to $5.81 billion at September 30, 2026, compared to $5.83 billion at June 30, 2026, and $4.34 billion at December 31, 2025. The increase since December was primarily due to the acquisition of Middlefield, which added $1.49 billion in deposits. The decline since June was primarily due to seasonal factors associated with the timing of deposit flows from public funds.

On December 15, 2026, the Company intends to pay off the remaining $72.0 million of fixed-to-floating rate subordinated notes due December 15, 2031. The interest rate on the notes is due to reset from 3.125% to approximately 6.20% on December 15, 2026. The Company believes that it has ample capital and liquidity to pay off the notes and its future financial performance will benefit from the early redemption.

Total stockholders’ equity declined to $716.5 million at September 30, 2026, from $784.0 million at June 30, 2026, and $485.7 million at December 31, 2025. The increase since December was primarily driven by the acquisition of Middlefield while the decline since June was primarily driven by a decrease in accumulated other comprehensive income offset by earnings net of dividends paid to shareholders.

Credit Quality

Non-performing loans increased to $47.9 million at September 30, 2026, from $44.6 million at June 30, 2026, and $26.2 million at December 31, 2025. Nonperforming loans to total loans were 0.99% at September 30, 2026, compared to 0.93% at June 30, 2026, and 0.79% at December 31, 2025. Loans 30-89 days delinquent were $23.4 million at September 30, 2026, or 0.48% of total loans, compared to $18.9 million, or 0.40% of total loans at June 30, 2026, and $16.9 million, or 0.51% of total loans at December 31, 2025.

The provision for credit losses and unfunded commitments was $2.8 million during the third quarter of 2026 compared to a provision for credit losses of $1.4 million in the third quarter of 2025. The provision was higher during the quarter primarily due to increased CECL factors associated with historical loss ratios. Annualized net charge-offs as a percentage of average loans were 0.22% in the third quarter of 2026, compared to 0.07% in the third quarter of 2025. The increase in net charge-offs was associated with the partial charge-off of a non-performing loan. The amount charged off was specifically reserved and had been recognized in loan loss provision expense in prior periods. The allowance for credit losses to total loans was 1.10% at September 30, 2026, 1.12% at June 30, 2026, and 1.11% at December 31, 2025.

Net Interest Income

Net interest income increased to $57.9 million in the third quarter of 2026, compared to $36.3 million in the third quarter of 2025. Average interest earning assets increased to $6.65 billion in the third quarter of 2026 compared to $4.92 billion in the third quarter of 2025. The increase was primarily driven by the acquisition of Middlefield. The net interest margin improved to 3.54% in the third quarter of 2026 compared to 3.00% in the third quarter of 2025. The year-over-year increase in net interest margin was due to the acquisition, higher yields on interest earning assets and lower funding costs on interest bearing liabilities. The net interest margin also increased as a result of the security restructuring in the third quarter of 2026. In addition, the Company saw greater accretion of loan marks in the third quarter associated with the payoff of a large Middlefield loan. Due to the benefit from the security restructuring, a steeper yield curve and higher overall treasury yields, the Company now expects the net interest margin to settle into a range of approximately 3.43% to 3.46% in the fourth quarter of 2026. Excluding acquisition marks, non-GAAP, the Company’s net interest margin was 3.39% in the third quarter of 2026, and 2.87% in the third quarter of 2025.

Noninterest Income

Noninterest income declined to $7.9 million in the third quarter of 2026 from $11.4 million in the third quarter of 2025. The decrease was driven by the $10.3 million loss on the sale of securities during the quarter offset by the Middlefield acquisition and continued growth in the Company’s wealth lines of business. Service charge income totaled $2.3 million in the third quarter of 2026 compared to $1.9 million in the third quarter of 2025 primarily due to the acquisition. Bank owned life insurance income was $1.1 million in the third quarter of 2026 compared to $852,000 in the third quarter of 2025. The addition of Middlefield was primarily responsible for the difference. Trust fees were $3.2 million for the third quarter of 2026, an increase of $433,000 from the $2.7 million reported in the third quarter of 2025. Strong growth in the Company’s trust business unit along with solid market conditions continues to drive revenue. Security losses in the third quarter of 2026 totaled $10.3 million compared to losses of $927,000 in the third quarter of 2025. The security restructuring during the third quarter of 2026 was the primary driver compared to a much smaller security restructuring in the third quarter of 2025. Investment commissions totaled $1.1 million in the third quarter of 2026 compared to $658,000 for the third quarter of 2025. The increase was primarily due to the addition of Middlefield, the continued additions of investment representatives to the program and strong stock market returns during 2026. Net gains on the sale of loans were $390,000 in the third quarter of 2026 compared to $559,000 in the third quarter of 2025. The rise in rates has hurt overall mortgage volumes and will continue to be a headwind to this line of business. Debit card income increased to $2.6 million in the third quarter of 2026 from $2.1 million in the third quarter of 2025. The increase was driven by the Middlefield acquisition. Other noninterest income increased to $5.0 million in the third quarter of 2026 compared to $954,000 in the third quarter of 2025. The full payoff of a troubled loan that had been partially charged off by Middlefield prior to the acquisition resulting in $3.9 million of income was the primary driver.

Noninterest Expense

Noninterest expense increased to $46.6 million in the third quarter of 2026 from $31.7 million in the third quarter of 2025 primarily as a result of the Middlefield acquisition and an increased level of acquisition and core conversion costs compared to the third quarter of 2025. Salaries and employee benefits increased to $22.5 million in the third quarter of 2026 from $16.0 million in the third quarter of 2025. The increase was primarily driven by annual raises and the Middlefield acquisition along with $600,000 in severance expense in the third quarter of 2026. Occupancy and equipment expenses increased to $5.7 million in the third quarter of 2026, compared to $4.4 million in the third quarter of 2025, primarily as result of the acquisition. Several categories of expense including occupancy and equipment should begin to see a decline in expense beginning in the fourth quarter of 2026 as the remainder of cost savings related to Middlefield begin to accrue post system conversion. FDIC insurance and state and local taxes were $2.0 million in the third quarter of 2026 compared to $1.2 million in the third quarter of 2025. The increase was due to the acquisition and increased franchise tax from higher levels of capital year-over-year. Merger related and system conversion costs totaled $6.1 million during the third quarter of 2026 compared to $3.1 million in the third quarter of 2025. Conversion costs and contract severance costs were the primary driver for this increase. Intangible amortization increased to $1.2 million in the third quarter of 2026 as a result of the acquisition of Middlefield compared to the $718,000 of amortization recorded in the third quarter of 2025. Core processing expense increased to $2.7 million in the third quarter of 2026 compared to $1.4 million in the third quarter of 2025. The increase was due to the acquisition. Other noninterest expense increased by $1.3 million to $4.7 million in the third quarter of 2026 primarily as a result of the acquisition and timing issues.

Liquidity

The Company had access to an additional $465.3 million in FHLB borrowing capacity at September 30, 2026, along with $453.8 million in available for sale securities that are available for pledging. The Company’s loan to deposit ratio was 83.6% at September 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 80 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 September 30, 2026, are $5.2 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 book value per share, tangible common equity ratio, return on average tangible assets, return on average tangible equity, core EPS, 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.