Breaking Down Farmers National Banc Corp. (FMNB) Financial Health: Key Insights for Investors

You're looking at Farmers National Banc Corp. (FMNB) and wondering if the regional bank story still holds up, especially with the latest earnings showing some complexity. The direct takeaway is that FMNB is executing a clear margin-expansion and growth strategy, but you need to look past the headline GAAP numbers: for the third quarter of 2025, the reported diluted earnings per share (EPS) was $0.33, but the adjusted EPS, which strips out one-time costs like the core platform transition, was a stronger $0.42, beating analyst consensus. This operational strength drove the net interest margin (NIM) up to 3.00% in Q3 2025, a significant jump from 2.91% in the prior quarter. Still, the balance sheet shows near-term risk, as non-performing loans increased to $35.3 million at September 30, 2025, up from $22.8 million at the start of the year. For the full 2025 fiscal year, analysts are forecasting an EPS of $1.59, which suggests a solid finish, plus the announced merger with Middlefield Banc Corp. will push total assets past $7.4 billion in early 2026, fundamentally changing the scale of the business.

Revenue Analysis

You need a clear picture of where Farmers National Banc Corp. (FMNB) makes its money, especially with market shifts pushing Net Interest Margin (NIM) back into focus. The direct takeaway is that FMNB's revenue is growing, with Q3 2025 revenue hitting $47.74 million, but the mix is changing: Net Interest Income is driving the growth, while Noninterest Income is facing headwinds from securities sales.

The company's business model, typical for a regional bank, relies on two main operating segments: the Bank segment and the Trust segment. Honestly, the vast majority of revenue-the core of the business-comes from the Bank segment, which generates both interest income and most of the fee-based noninterest income. The Trust segment, which manages about $4.6 billion in assets, provides valuable revenue diversity, which is defintely a plus compared to many peers. You can find more on their long-term strategy here: Mission Statement, Vision, & Core Values of Farmers National Banc Corp. (FMNB).

Primary Revenue Sources and Contribution

For a bank, revenue splits into two buckets: Net Interest Income (NII) and Noninterest Income. NII is the money earned from loans and investments minus the interest paid on deposits and borrowings. Noninterest Income is essentially fee income from services like trust, insurance, and service charges. For the third quarter of 2025, the breakdown is clear:

• Net Interest Income: This was the powerhouse, bringing in $36.3 million. That's about 76.0% of the total Q3 2025 revenue.
• Noninterest Income: This segment contributed $11.4 million, or roughly 24.0% of total revenue.

Here's the quick math on the Q3 2025 revenue composition:

Growth Trends and Significant Shifts

The near-term trend is positive, but you need to look at the drivers. Farmers National Banc Corp. (FMNB) reported Q3 2025 revenue of $47.74 million, which marks an 8% increase over the same quarter last year. Over the trailing twelve months (TTM) ending September 30, 2025, total revenue was approximately $184 million, showing a decent 9.57% year-over-year growth. That's solid for a regional bank.

What this growth estimate hides is the internal shift. The Net Interest Margin (NIM)-a key measure of bank profitability-expanded to 3.00% in Q3 2025, up from 2.91% in the prior quarter. This is a major win, marking the first time the NIM has been over 3% in almost two and a half years, showing their ability to manage funding costs in a high-rate environment. Still, Noninterest Income dropped to $11.4 million in Q3 2025 from $12.3 million a year ago. This decline was primarily due to taking larger losses on the sale of investment securities, a strategic move to restructure the portfolio for better long-term yields. On the flip side, their fee-generating services like trust fees and bank-owned life insurance income showed positive growth.

For a clear action, watch the integration of the pending acquisition of Middlefield Banc Corp., which is expected to close in the first quarter of 2026. This deal will boost FMNB's pro forma assets to approximately $7.3 billion, significantly changing the revenue and asset base going forward.

Profitability Metrics

When you look at a bank like Farmers National Banc Corp. (FMNB), you have to adjust your lens from a traditional manufacturer's 'gross profit' to the core banking measure: Net Interest Income (NII). This is the money they make from loans and investments minus the interest they pay on deposits. The good news is that FMNB is showing a clear upward trend in this key area in 2025.

The company's net interest margin (NIM)-the percentage difference between interest earned and interest paid-has been expanding throughout the year. It started at 2.85% in the first quarter of 2025 and improved to 3.00% by the third quarter. This margin expansion is a direct result of higher yields on their earning assets and lower funding costs on interest-bearing liabilities, a tailwind from the Federal Reserve's rate cuts in late 2024.

For the third quarter of 2025 alone, FMNB reported Net Interest Income of $36.3 million, which acts as their primary gross profit engine. Their reported GAAP net income for Q3 2025 was $12.5 million, but if you strip out the one-time, non-core charges like the $3.1 million for the core platform transition, their non-GAAP net income was a much stronger $15.7 million.

The overall profitability picture for FMNB in 2025 is one of steady, reliable performance. Year-to-date (YTD) net income through Q3 2025 reached $39.9 million, a notable increase from $31.6 million in the same period a year prior. Their trailing twelve-month (TTM) net profit margin remains strong at 29.8%, only a slight dip from the prior period's 30.1%, which speaks to their defintely resilient operations.

Here's the quick math on how FMNB stacks up against its peers for core profitability, using the YTD 2025 annualized figures:

FMNB's ROAE of 12.46% is significantly higher than the regional bank average of 9.06%, showing they are generating a superior return for their shareholders' equity. This tells you they are managing capital well, which is a big win in the current market.

Operational efficiency is also a clear focus, and you can see the results in their efficiency ratio (non-GAAP), which measures non-interest expenses as a percentage of revenue-lower is better. It improved from 59.6% in Q1 2025 to 56.7% in Q2 2025. This trend is expected to continue, as the company is making a strategic shift to a new core platform that is projected to save approximately $2.0 million annually once the conversion is complete in 2026. That's a clear, actionable cost management move that will boost future operating profit.

For a deeper dive into the company's asset quality and valuation, check out the full post at Breaking Down Farmers National Banc Corp. (FMNB) Financial Health: Key Insights for Investors.

• Net Interest Margin is expanding, hitting 3.00% in Q3 2025.
• YTD Net Income is up to $39.9 million, a strong sign of earnings growth.
• The 12.46% ROAE is a decisive beat over the 9.06% regional bank average.

Your next step should be to look closely at the impact of the upcoming Middlefield Banc Corp merger on these ratios, as that will be the next big operational shift.

Debt vs. Equity Structure

You're looking at Farmers National Banc Corp. (FMNB) and want to know if they're funding growth with smart debt or risky leverage. The quick takeaway is that FMNB is managing its debt load well, keeping its financial structure right in line with its regional banking peers, but a recent strategic move shows a clear preference for using equity for major expansion.

As of the third quarter of 2025, FMNB's debt position is manageable and reflects a concerted effort to reduce short-term liabilities. The bank's total borrowed funds, which includes both short-term and long-term borrowings, stood at approximately $254.9 million. This is a solid figure, especially considering the significant reduction in short-term debt over the last year.

Here's the quick math on their debt components as of September 30, 2025, showing their shift away from high-cost, short-term funding:

• Short term borrowings: $168.5 million.
• Long term borrowings: $86.4 million.

Management has been actively using increased deposits to pay down debt, which is a smart move in a high-rate environment. Honestly, reducing short-term borrowings from $304.6 million in Q3 2024 to $168.5 million in Q3 2025 is defintely a strong signal of disciplined liquidity management.

Debt-to-Equity Ratio and Industry Comparison

The Debt-to-Equity (D/E) ratio (total liabilities divided by total shareholder's equity) tells you how much debt a company is using to finance its assets relative to the value of shareholders' equity. For a bank, this ratio is a critical measure of financial leverage.

FMNB's D/E ratio is right on the money. The company's D/E ratio for the third quarter of 2025 was approximately 0.50. This means for every dollar of shareholder equity, the company uses 50 cents of debt to fund its operations. When you compare this to the industry average for US Regional Banks, which is also approximately 0.5 as of November 2025, FMNB is positioned perfectly in the middle of the pack.

A ratio of 0.50 is conservative for the banking sector, where higher ratios are common because the core business involves borrowing and lending. This low leverage profile suggests a lower risk of financial distress, but still allows the bank to pursue growth. This is a good balance for a regional bank focused on community stability. You can read more about their approach to growth in their Mission Statement, Vision, & Core Values of Farmers National Banc Corp. (FMNB).

Balancing Debt and Equity for Growth

FMNB has a clear strategy of using equity-not new debt-to fund its most significant expansion moves. The company's KBRA Senior Unsecured Debt rating was affirmed at BBB/Stable Outlook in October 2025, which confirms its solid creditworthiness.

The biggest recent example of this equity-first approach is the acquisition of Middlefield Banc Corp., announced on October 22, 2025. This deal, valued at $299.0 million, is an all-stock transaction. Using stock instead of debt for this major acquisition is a strategic choice. It preserves the bank's strong balance sheet and debt capacity, which is crucial for a regional bank in an uncertain economic environment. It's a move that prioritizes long-term capital stability over the immediate cost-of-debt savings.

Liquidity and Solvency

You need to know if Farmers National Banc Corp. (FMNB) has the immediate cash to cover its short-term obligations, and for a bank, that analysis is a little different. The short answer is that while the traditional liquidity ratios look low-which is normal for a bank-the core cash flow generation is solid, but you must watch the rising non-performing loans.

Here's the quick math on their near-term financial footing, focusing on the latest data through the third quarter of 2025.

Assessing Farmers National Banc Corp.'s Liquidity

When we look at the Current Ratio (current assets divided by current liabilities) and Quick Ratio (quick assets divided by current liabilities), Farmers National Banc Corp. (FMNB) shows a figure of 0.73 for both as of the third quarter of 2025. [cite: 3 in first search] This means they have only 73 cents of liquid assets for every dollar of short-term debt. Honestly, for a standard manufacturing company, this would be a red flag, but for a financial institution, it's typical.

A bank's largest current liability is customer deposits, which are technically payable on demand but are operationally stable. So, a ratio below 1.0 is not defintely a crisis, but it does show a reliance on the stability of their deposit base.

The trend in working capital (Current Assets minus Current Liabilities) reinforces this banking-specific structure. The Net Current Asset Value, a close proxy for working capital for a financial firm, was a negative $-3.44 billion on a trailing twelve months (TTM) basis. [cite: 1 in first search] This large negative number is simply a function of their business model: they take in deposits (a current liability) and turn them into long-term loans and securities (long-term assets).

Cash Flow Statements Overview

The cash flow statement gives us a clearer picture of operational health. For the TTM period ending in November 2025, Farmers National Banc Corp.'s Net Cash from Operating Activities was a healthy $53.64 million. This is the money generated from the core banking business-lending and taking deposits-and it's the most important number here. This consistent cash generation is a significant strength, demonstrated by their record of 171 consecutive quarters of profitability as of Q3 2025.

The other two sections show where that cash is going:

• Investing Cash Flow: This is typically negative for a growing bank as they are putting cash into new loans and securities.
• Financing Cash Flow: This fluctuates based on deposit changes, debt issuance, and dividend payments. The overall Net Change in Cash for Q3 2025 was a negative $-96.79 million, indicating FMNB used more cash than it generated or raised in the quarter, likely for loan growth or securities purchases.

Near-Term Risks and Opportunities

The primary liquidity strength is the operational cash flow and the expanding Net Interest Margin (NIM), which hit 3.00% in Q3 2025. This shows better profitability on their loan portfolio. Plus, their cash and cash equivalents rose by $6.6 million to $92.4 million at the end of September 2025, [cite: 15 in first search] which is a good buffer.

The near-term risk, however, is credit quality. Nonperforming loans to total loans have climbed to 1.06% as of September 30, 2025, up from 0.70% at the end of 2024. [cite: 14 in first search] This increase, which includes a rise in non-performing loans to $35.3 million in Q3 2025, means more assets are not generating income, which will eventually pressure cash flow if the trend continues. Also, the $195.6 million in net unrealized losses on securities available for sale is a non-cash hit to equity that bears watching, though it doesn't immediately affect liquidity. [cite: 15 in first search]

If you want to dive deeper into the full picture, you can read the rest of our analysis on Breaking Down Farmers National Banc Corp. (FMNB) Financial Health: Key Insights for Investors.

Valuation Analysis

You want to know if Farmers National Banc Corp. (FMNB) is overvalued or undervalued right now. The quick answer is that, based on key valuation multiples and analyst targets as of November 2025, the stock appears to be modestly undervalued, offering a compelling blend of value and income.

The current stock price of Farmers National Banc Corp. sits around $12.90, which is near the lower end of its 52-week trading range. Over the last 12 months, the stock has traded between a low of $11.58 and a high of $16.29, showing a decent amount of volatility, but the current price is below the 52-week average of $13.85. This price action suggests the market is pricing in near-term headwinds, which is common in the regional banking sector right now, but it also creates a clear buying opportunity if you believe in the Mission Statement, Vision, & Core Values of Farmers National Banc Corp. (FMNB).

Key Valuation Multiples

When you look at the core valuation ratios, Farmers National Banc Corp. trades at a discount to its peers. This is a classic value signal. Here's the quick math on the trailing 12-month (TTM) data for the 2025 fiscal year:

• Price-to-Earnings (P/E) Ratio: The TTM P/E ratio is approximately 8.98. For a regional bank, this is a low multiple, especially when the forward P/E drops even further to about 7.35, based on 2026 earnings estimates. This signals that you are paying very little for each dollar of future earnings.
• Price-to-Book (P/B) Ratio: The P/B ratio is around 1.04. This is a critical metric for banks, and a ratio close to 1.0 means the market is valuing the company's equity at nearly its accounting book value. Honestly, this is defintely a value investor's sweet spot.
• Enterprise Value-to-EBITDA (EV/EBITDA): The Enterprise Value is roughly $723.92 million, and with an estimated annual EBITDA of $61.83 million, the EV/EBITDA ratio is approximately 11.71x. While this is higher than the P/E, it still reflects a reasonable valuation for a company with a diversified revenue stream from banking and its wealth/trust segment.

Dividend and Analyst Consensus

The income story here is strong, which often acts as a floor for the stock price. Farmers National Banc Corp. currently offers a substantial dividend yield of 5.26%, which is very attractive in the current rate environment. The annual dividend of $0.68 per share is well-covered, with a sustainable payout ratio of just 43% of earnings. That payout ratio gives the company plenty of room to reinvest in the business or continue its 32-year streak of maintaining dividend payments.

Wall Street's view is cautiously optimistic. The consensus recommendation from analysts is a 'Hold,' but the average one-year price target is $14.50. Here's how that breaks down:

What this estimate hides is the potential for multiple expansion. If the market begins to value Farmers National Banc Corp. closer to the industry average P/E, the stock price could easily move toward the higher end of the analyst targets, which run up to $16.00. Your clear action here is to look past the 'Hold' rating and focus on the fundamental value metrics and the high dividend yield; the numbers point to a stock that is simply too cheap to ignore.

Risk Factors

You're looking at Farmers National Banc Corp. (FMNB) right now, and while the Q3 2025 results show solid underlying performance-like the commercial loan growth of $30.1 million, or an annualized 6.0%-a seasoned analyst like me sees three clear risk buckets you need to map onto your investment thesis: strategic integration, credit quality, and the ever-present interest rate risk.

Honestly, the biggest near-term risk is the strategic one: executing the merger with Middlefield Bancorp, which is expected to close in the first quarter of 2026. Mergers carry integration risk, and while the deal is projected to deliver a 7% diluted Earnings Per Share (EPS) accretion by 2027, it will initially cause a tangible book value per share dilution of approximately 4.4%. The management's plan is for that dilution to be earned back in about three years, but that timeline is defintely dependent on realizing the estimated cost savings of 38% from Middlefield's expense run rate.

Operational and Financial Risks to Monitor

Beyond the merger, the company is also transitioning to a new core platform, Jack Henry's Silverlake, in 2026. This is a necessary upgrade, but it's a massive operational undertaking. The cost of this strategic decision already hit the Q3 2025 financials with a $3.1 million pre-tax charge for consulting services. The good news is the new platform is expected to save the company approximately $2.0 million per year once the conversion is complete.

Credit quality is another area to watch closely. Nonperforming loans (NPLs) increased to $35.3 million, or 1.06% of total loans, as of September 30, 2025, up from 0.70% at the end of 2024. Here's the quick math: that $35.3 million NPL figure is largely driven by a single loan relationship that moved into nonaccrual status. The company is actively working to resolve that specific credit by December 31, 2025. Still, the Allowance for Credit Losses (ACL) is subject to broader macroeconomic forecasts, so a dip in the economy could force an increase in provisions.

External Market and Regulatory Headwinds

The external risks are the ones every bank faces, but for a regional player like Farmers National Banc Corp., they are amplified. Competition from larger, better-resourced institutions in its Ohio and Pennsylvania markets is constant. Plus, interest rate risk is significant. The company's own sensitivity analysis shows that a severe, but not impossible, +400 basis point shock to interest rates could reduce Net Interest Income by a material 7.4% and the Net Present Value of Equity by a staggering 29.6%. That's a serious vulnerability.

To mitigate this, the company has been proactive. They restructured $28.5 million in securities during Q3 2025, which expanded the portfolio yield by approximately 220 basis points. That's smart balance sheet management. Regulatory changes also present a headwind; while they have solid capital ratios-with a Total Risk-Based Capital ratio of 15.08% at Q3 2025-new standards like the Basel III Endgame proposals could still impact capital requirements and compliance costs. You can see how the company's strategic focus ties into its core values by reviewing the Mission Statement, Vision, & Core Values of Farmers National Banc Corp. (FMNB).

Here is a summary of the key risks and their mitigation status:

Your next step should be to track the resolution of that single non-accrual loan and the progress of the merger integration planning.

Growth Opportunities

You want to know where the next dollar of growth is coming from for Farmers National Banc Corp. (FMNB), and honestly, the path is clear: it's a disciplined, two-pronged strategy of strategic acquisitions and internal margin expansion. They aren't just sitting on their loan portfolio; they are actively building out high-margin, fee-based businesses, plus they are expanding their geographic footprint in a meaningful way.

The most significant near-term driver is the strategic push into the Columbus, Ohio market. This is a high-growth area, and FMNB is accelerating its presence there. The announced acquisition of Middlefield Banc Corp. in October 2025 for $299.0 million is a game-changer; it's their largest whole-bank deal in a decade. This merger, expected to close in the first quarter of 2026, will create a pro forma bank with approximately $7.4 billion in total assets, significantly boosting their scale and ability to compete for larger commercial lending relationships. This is defintely a smart move to deepen market penetration.

Here's the quick math on their core business and fee income growth:

• Loan Growth: Commercial loans alone saw an 8.8% annualized growth in the second quarter of 2025, adding $43.6 million to the portfolio.
• Margin Expansion: The net interest margin (NIM) improved to 2.91% in the second quarter of 2025, a critical indicator of improving profitability in a dynamic rate environment.
• Fee Income: The acquisition of Crest Retirement Advisors LLC in late 2024 is already paying off, driving retirement plan consulting fees to $783,000 in Q2 2025.

For the full 2025 fiscal year, consensus estimates point to total revenue around $187 million with full-year diluted earnings per share (EPS) projected to be approximately $1.59. This growth is supported by a strong foundation in their wealth management segment, which manages about $4.6 billion in assets, providing a valuable, diversified revenue stream that many peers lack.

Farmers National Banc Corp. (FMNB) maintains a clear competitive advantage by leveraging its relationship-based community banking model against larger, more impersonal institutions. They have built a reputation for stability, evidenced by their remarkable streak of 171 consecutive quarters of profitability and 32 consecutive years of paying a dividend. Their high profitability metrics, like a net margin of 19.57% and Return on Equity (ROE) of 13.82%, are superior to many of their competitors. Plus, they are investing in efficiency; the transition to a new core platform is expected to deliver annual savings of $2 million. This is a bank that knows how to grow while keeping costs tight.

The table below summarizes key 2025 financial performance metrics that underpin this growth narrative:

To understand the corporate philosophy driving this expansion, you can review the Mission Statement, Vision, & Core Values of Farmers National Banc Corp. (FMNB).