FARMERS NATIONAL BANC CORP. ANNOUNCES RESULTS FOR FIRST QUARTER OF 2026 (Form 8-K)

FARMERS NATIONAL BANC CORP. ANNOUNCES RESULTS FOR FIRST QUARTER OF 2026

CANFIELD, Ohio (April 22, 2026) - Farmers National Banc Corp. ("Farmers" or the "Company") (NASDAQ: FMNB) reported net income of $16.3 million, or $0.36 per diluted share, for the first quarter of 2026 compared to $13.6 million, or $0.36 per diluted share, for the first quarter of 2025. Net income in the first quarter of 2026 included $4.0 million related to the acquisition of Middlefield Banc Corp. (Middlefield) and core conversion costs. Excluding these items (non-GAAP), adjusted net income for the first quarter of 2026 was $20.0 million, or $0.45 per diluted share.

Kevin J. Helmick, President and CEO, stated: "Farmers is off to a solid start in 2026, highlighted by the successful completion of the Middlefield acquisition and continued strength across our core Ohio and Pennsylvania markets. We are focused on successfully integrating Middlefield into our operations and completing our core technology conversion, both of which are expected to be completed in the third quarter of 2026. In addition, we are well positioned to capitalize on our expanded presence in Columbus, Ohio, as a result of recent investments and the Middlefield acquisition. Combined, we believe these actions position Farmers for continued profitable growth and value creation."

Balance Sheet

Total assets increased to $7.18 billion at March 31, 2026, from $5.25 billion at December 31, 2025, primarily due to the Middlefield acquisition which added $1.82 billion in assets. Total loans, net of allowance, increased to $4.75 billion at March 31, 2026, from $3.27 billion at December 31, 2025. Middlefield added $1.49 billion in total loans at the date of closing.

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

Total deposits were $5.92 billion at March 31, 2026, an increase of $1.58 billion from December 31, 2025. The increase was primarily due to Middlefield, which added $1.49 billion in deposits, as well as seasonal growth in public funds.

Total stockholders' equity increased to $766.9 million at March 31, 2026, compared to $485.7 million at December 31, 2025. The increase was primarily driven by the acquisition of Middlefield.

Credit Quality

Non-performing loans increased from $26.2 million at December 31, 2025, to $59.9 million at March 31, 2026. The increase was due to the acquisition of Middlefield. Nonperforming loans to total loans were 1.25% at March 31, 2026 compared to 0.79% at December 31, 2025. The Company's loans which were 30-89 days delinquent were $14.7 million at March 31, 2026, or 0.31% of total loans, compared to $16.9 million at December 31, 2025.

The provision for credit losses and unfunded commitments was a recovery of $1.0 million in the first quarter of 2026 compared to a recovery of $204,000 in the first quarter of 2025. The provision in the first quarter of 2026 was positively impacted by improvements in qualitative factors in the Company's CECL model. Annualized net charge-offs as a percentage of average loans were 0.05% in the first quarter of 2026, compared to 0.04% in the first quarter of 2025. The allowance for credit losses to total loans was 1.14% at March 31, 2026, compared to 1.11% at December 31, 2025. With the addition of Middlefield, the Company established a Day 1 allowance for credit losses of $19.3 million for the Middlefield loan balances. This was the primary reason for the increase in the allowance for loan losses to loans ratio in the first quarter.

Net Interest Income

Net interest income increased to $42.6 million in the first quarter of 2026, compared to $34.2 million in the first quarter of 2025. Average interest earning assets increased to $5.55 billion in the first quarter of 2026 compared to $4.89 billion in the first quarter of 2025. The increase was primarily driven by the acquisition of Middlefield. The net interest margin improved to 3.12% in the first quarter of 2026 compared to 2.85% in the first 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. The Company expects the net interest margin to expand by approximately 25 basis points in the second quarter of 2026 as the full impact of the Middlefield acquisition is realized. The yield on interest earning assets increased from 4.74% in the first quarter of 2025 to 4.89% in the first quarter of 2026, while the cost of interest-bearing liabilities declined from 2.52% in the first quarter of 2025 to 2.35% in the first quarter of 2026. Excluding acquisition marks, non-GAAP, the Company's net interest margin was 2.99% in the first quarter of 2026, and 2.67% in the first quarter of 2025.

Noninterest Income

Noninterest income increased to $13.7 million in the first quarter of 2026 from $10.5 million in the first quarter of 2025. The increase was driven by the Middlefield acquisition, growth in the wealth lines of business and lower losses on the sale of securities. Service charge income increased to $2.0 million in the first quarter of 2026 compared to $1.8 million in the first quarter of 2025 primarily due to the acquisition. Bank owned life insurance income was $1.5 million in the first quarter of 2026 compared to $810,000 in the first quarter of 2025. Death claims were higher by $416,000 in 2026 compared to 2025 and the addition of Middlefield was primarily responsible for the remaining difference. Trust fees increased to $3.0 million in the first quarter of 2026 from $2.6 million in the first quarter of 2025 as the Company continues to show excellent growth in this business unit. Losses on the sale of securities were $18,000 in the first quarter of 2026, down from a loss of $1.3 million in the first quarter of 2025. The Company restructured $23.8 million of securities at the end of the first quarter of 2025 resulting in the loss realized on the sale. Investment commissions increased $342,000 from the first quarter of 2025 to first quarter of 2026 as the Company continued to add investment representatives to the program. Other mortgage banking income was $477,000 in the first quarter of 2026 compared to $147,000 in the first quarter of 2025. This increase was primarily due to the Company recovering $303,000 of mortgage servicing rights impairment in the first quarter of 2026. Other noninterest income declined to $898,000 in the first quarter of 2026 compared to $1.2 million in the first quarter of 2025 primarily due to lower SBIC income in 2026.

Noninterest Expense

Noninterest expense increased to $37.3 million in the first quarter of 2026 from $28.5 million in the first quarter of 2025 primarily as a result of the Middlefield acquisition and the recognition of $4.0 million in acquisition and core conversion costs in the first quarter of 2026. Salaries and employee benefits increased to $18.5 million in the first quarter of 2026 from $16.2 million in the first quarter of 2025. The increase was primarily driven by annual raises and the acquisition. Occupancy and equipment expense increased by $988,000 in the first quarter of 2026 from the first quarter of 2025 primarily as a result of the acquisition and higher building maintenance costs due to more severe winter weather conditions. FDIC insurance and state and local taxes were $1.6 million in the quarter ended March 31, 2026, an increase of $341,000 from the quarter ending March 31, 2025 due to the acquisition and increased franchise tax due to higher levels of capital year-over-year. Core processing expense increased to $1.8 million in the first quarter of 2026 compared to $1.4 million in the first quarter of 2025. The increase was due to the acquisition and a lower level of service credits in 2026. Other noninterest expense increased by $650,000 to $3.8 million in the first quarter of 2026 primarily as a result of the acquisition and timing issues.

Liquidity

The Company had access to an additional $788.9 million in FHLB borrowing capacity at March 31, 2026, along with $446.6 million in available for sale securities that are available for pledging. The Company's loan to deposit ratio was 81.1% at March 31, 2026.

About Farmers National Banc Corp.

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $7.2 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 March 31, 2026 are $4.9 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