Executive Summary

EPS of $0.23 missed Wall Street consensus by $0.12, primarily due to a single deteriorated office-backed commercial credit that drove a $4.4M charge-off and a $1.2M specific reserve; management quantified the EPS impact at $0.12 .
“Core” operating trends showed strength: customer deposits rose $81.1M linked quarter, noninterest income grew to $12.3M on fee businesses and SBIC gains, and NIM compression moderated (2.66%) .
Management raised full-year loan growth guidance to ~2.8%–3.0% (from ~1.5%–2.0% in Q2) and expects the Fed’s late-September 50bp cut to benefit Q4 NIM; unrealized AFS losses fell materially, and AOCI accretion of ~$23.1M is expected over the next four quarters if rates hold .
Liquidity and capital remained solid: loan-to-deposit 75.2%, CET1 ~11.0%, with $696M FHLB capacity and $250M unpledged AFS securities; dividend maintained at $0.17 per share (declared Nov 26) .

What Went Well and What Went Wrong

What Went Well

Strong linked-quarter deposit growth (+$81.1M) with brokered CDs used to reduce higher-cost wholesale funding; total deposits reached $4.36B .
Noninterest income increased to $12.3M on robust fee lines (trust, insurance, debit), higher SBIC income, and a $444K gain on repurchased subordinated debt; trust fees rose to $2.54M and debit card fees to $1.99M .
Management tone on earnings trajectory: “very well positioned to grow earnings in 2025” amid strong loan and deposit growth and fee businesses strength .

What Went Wrong

A single $12.5M office-backed commercial credit required a $4.4M charge-off and $1.2M specific reserve, lifting provision to $7.0M and reducing diluted EPS by $0.12 .
NIM declined to 2.66% (vs 2.71% in Q2 and 2.86% YoY) as funding costs outpaced earning asset yields; margin also dipped on higher fed funds sold and lower accretion of acquisition marks .
Nonperforming loans increased to $19.1M (0.58% of loans) due to the remaining balance of the single credit, offset by declines elsewhere; annualized net charge-offs rose to 0.58% .

Financial Results

Metric	Q3 2023	Q2 2024	Q3 2024
Total interest income ($USD Millions)	$54.229	$56.846	$57.923
Noninterest income ($USD Millions)	$9.831	$9.606	$12.340
Net interest income ($USD Millions)	$33.768	$32.066	$31.876
Provision for credit losses ($USD Millions)	$0.243	$1.112	$7.008
Net income ($USD Millions)	$13.314	$11.783	$8.535
Diluted EPS ($USD)	$0.36	$0.31	$0.23
Net interest margin (annualized, %)	2.86%	2.71%	2.66%
Efficiency ratio (tax-equivalent, %)	60.11%	60.80%	58.47%

Segment/loan mix

End-of-period loan balances ($USD Thousands)	Q3 2023	Q2 2024	Q3 2024
Commercial real estate	$1,295,847	$1,348,675	$1,372,374
Commercial	$357,691	$343,694	$358,247
Residential real estate	$842,729	$849,561	$852,444
HELOC	$140,772	$151,511	$155,967
Consumer	$261,136	$268,606	$269,231
Agricultural	$261,738	$265,035	$261,773
Total (excl. net deferred costs)	$3,159,913	$3,227,082	$3,270,036

KPIs and asset quality

KPI	Q3 2023	Q2 2024	Q3 2024
Loans to deposits (%)	70.23%	76.97%	75.21%
Total customer deposits ($USD Thousands)	$4,257,393	$4,205,835	$4,286,905
NPLs to total loans (%)	0.58%	0.40%	0.58%
ACL to total loans (%)	1.10%	1.05%	1.10%
Annualized net charge-offs to avg. net loans (%)	0.05%	0.07%	0.58%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total loan growth	FY 2024	~1.5%–2.0% (Q2 release)	~2.8%–3.0% (Q3 release)	Raised
Net interest margin	Q4 2024	“Sequential stabilization/expansion” (Q2)	Positive impact expected from Fed’s 50bp cut at end of Sept 2024	Improved outlook
Dividend per share	Ongoing	$0.17 (Q2 cadence)	$0.17 declared Nov 26, 2024	Maintained
AOCI accretion	Next 4 quarters	Not disclosed	~$23.1M accretion expected (12.2% of AOCI), assuming rates unchanged	New disclosure
Liquidity posture	Near term	N/A	$695.8M FHLB capacity; $250M unpledged AFS; brokered CDs utilized strategically	Reinforced

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2024)	Trend
Rates/NIM	Q1 NIM 2.70%; Q2 NIM 2.71% with stabilization narrative	NIM 2.66%; management expects Fed cut to lift Q4 NIM	Moderation with expected uptick
Asset quality	“Strong asset quality” emphasis in Q2	One office-backed credit drove charge-offs/reserve; NPLs 0.58%	Temporarily weaker due to single exposure
Fee-based businesses	Continued growth; trust/insurance contributions (Q2)	Noninterest income up; trust $2.54M, insurance $1.42M; SBIC gains; sub debt gain $444K	Improving
Deposits & funding	Mixed trends; customer deposit base stable/slightly up in Q2	Customer deposits +$81.1M; brokered CDs used to lower wholesale funding costs	Positive
Securities/AOCI	Unrealized losses elevated in Q2 ($242.3M)	Unrealized losses down to $189.4M; disclosed AOCI accretion path	Improving

Note: A full Q3 call transcript was not available via our document repository. The company furnished an investor presentation; audio resources are linked on the IR site .

Management Commentary

CEO Kevin Helmick: “Our third quarter performance was solid as we experienced strong loan and deposit growth… Overall, we believe we are very well positioned to grow earnings in 2025, while navigating continued macro-level uncertainty.” .
On NIM outlook: management expects the Fed’s 50bp cut at September-end to have a positive impact on Q4 NIM .
Q2 tone (context): “strong loan growth along with sequential improvement in net interest income… asset quality also continues to be a source of strength” .

Q&A Highlights

Credit event clarity: Management specified the single $12.5M office-backed commercial exposure, the $4.4M charge-off, and $1.2M specific reserve, quantifying a $0.12 EPS impact, helping frame forward loss content and reserve adequacy .
Funding and deposits: Use of brokered CDs to reduce higher-cost wholesale funding and broad-based customer deposit growth (+$81.1M) improved funding mix .
NIM trajectory: Despite Q3 compression, commentary pointed to tailwinds from the Fed’s cut for Q4, alongside accretion normalization trends .

Note: A detailed transcript Q&A was not accessible via our sources; the investor presentation was furnished, and audio is referenced on the IR site .

Estimates Context

S&P Global Wall Street consensus data was unavailable via our feed at the time of request.

Supplemental third-party consensus:

EPS: Actual $0.23 vs consensus $0.35; missed by $0.12. Management attributed $0.12 EPS impact to the single credit event. Bold miss. .
Revenue: Actual $70.26M vs consensus $42.90M; beat by $27.36M. Note: “Revenue” reflects total interest income plus noninterest income. Bold beat. .

Metric	Actual (Q3 2024)	Consensus (Q3 2024)	Delta
EPS ($USD)	$0.23	$0.35	-$0.12
Revenue ($USD Millions)	$70.26 (54.229 + 12.340)	$42.90	+$27.36

Key Takeaways for Investors

The quarter’s EPS miss was largely a one-off tied to a single office-backed commercial credit; underlying trends in deposits and fee income were favorable .
Loan growth momentum and raised FY loan guidance (~2.8%–3.0%) signal confidence into year-end despite macro uncertainty; watch for sustained commercial production .
NIM pressure moderated and should benefit in Q4 from the Fed’s late-September cut; track deposit betas, acquisition mark accretion, and earning asset mix shifts .
Asset quality metrics remain acceptable post-event (ACL 1.10%; NPLs 0.58%); closely monitor office CRE concentrations and any additional specific reserve formation .
Liquidity/capital cushion is solid ($696M FHLB capacity; $250M unpledged AFS; CET1 ~11%); dividend maintained at $0.17 supports income profile .
AFS portfolio AOCI recovery pathway (~$23.1M over four quarters, ~$66.9M over three years if rates unchanged) is a tailwind to capital optics; rate path sensitivity remains key .
Near-term trading: stock likely reacts to clarity on credit resolution and NIM trajectory; medium-term thesis hinges on fee-line durability, disciplined funding, and controlled credit normalization .

FARMERS NATIONAL BANC CORP /OH/ (FMNB)·Q3 2024 Earnings Summary