Executive Summary

Q4 2024 delivered stable earnings with margin expansion: diluted EPS $0.38 (adjusted $0.39) and NIM up 6 bps QoQ to 2.72%; efficiency ratio improved to 56.4% .
EPS beat Wall Street consensus by $0.05 ($0.39 vs $0.34); revenue modestly exceeded expectations (operating revenue ~$44.15m vs $44.0m consensus), positioning 2025 margin trajectory favorably as funding costs reprice lower .
Credit quality remained manageable with provision of $0.30m; NPLs rose to 0.70% of loans driven by a few identified credits, with expected Q1 2025 resolutions/payoffs .
Fee businesses were resilient; trust, debit card, and retirement plan fees grew YoY; Crest Retirement Advisors acquisition (Dec-2024) expands fee-based capabilities and AUM to $4.2B, supporting 2025 noninterest income .

What Went Well and What Went Wrong

What Went Well
- Net interest margin expanded to 2.72% (from 2.66% in Q3), as funding costs fell with Fed cuts; management expects NIM expansion to continue in 2025 . Quote: “The current rate cutting cycle… had a significant impact on funding costs… The Company expects its net interest margin will continue to expand in 2025” .
- Operating efficiency improved: efficiency ratio fell to 56.4% from 58.5% in Q3 on lower FDIC fees and disciplined expense control .
- Fee growth breadth: trust fees +$0.3m YoY, debit card +$0.5m YoY, and retirement plan fees +$0.1m YoY; Crest acquisition provides additional 2025 tailwind; AUM reached $4.2B .
What Went Wrong
- YoY margin pressure persisted (2.72% vs 2.78% in Q4’23) as asset yield gains still lag prior funding cost increases .
- Noninterest income declined YoY ($11.4m vs $12.2m) largely due to absence of prior-year commercial loan sale gains and lower SBIC income volatility .
- AFS securities’ gross unrealized losses increased to $244.1m (vs $189.4m in Q3) on Q4 rate moves; NPLs increased to 0.70% of loans (vs 0.58% in Q3) due to a small number of identified credits .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024	Q4 2024 Consensus	Surprise
Diluted EPS ($)	0.39	0.23	0.38	0.34	+0.05
Adjusted Diluted EPS ($)	0.41	0.23	0.39	—	—
Operating Revenue ($m) (NII + Noninterest)	44.99 (32.83 + 12.16)	44.22 (31.88 + 12.34)	44.15 (32.74 + 11.41)	44.00	+0.15 vs MB; Zacks cites $44.15
Net Interest Margin (%)	2.78	2.66	2.72	—	—
Efficiency Ratio (%) (TE basis)	57.84	58.47	56.42	—	—
Provision for Credit Losses ($m)	0.29	7.01	0.30	—	—
Net Income ($m)	14.58	8.54	14.39	—	—

KPIs and Balance Sheet

KPI	Q4 2023	Q3 2024	Q4 2024
Loans ($m)	3,198.1	3,280.5	3,268.3
Total Deposits ($m)	4,177.4	4,361.8	4,266.8
Customer Deposits ex-brokered ($m)	4,177.4	4,286.9	4,191.8
Noninterest-bearing Deposits ($m)	1,026.6	969.7	965.5
CET1 Ratio (%)	10.61	10.96	11.26 (est.)
Loans/Deposits (%)	76.56	75.21	76.60
NPLs / Total Loans (%)	0.47	0.58	0.70
Allowance / Loans (%)	1.08	1.10	1.10
AFS Gross Unrealized Losses ($m)	217.1	189.4	244.1

Notes on “Revenue”: Press release discloses Net Interest Income and Noninterest Income; we present “Operating Revenue” as NII + Noninterest Income with source-level citations. Third-party aggregates cite total revenue: Zacks/Nasdaq $44.15m and MarketBeat table $44.95m; definitional differences likely (e.g., tax-equivalent adjustments, other line items) .

Guidance Changes

Metric/Topic	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin trajectory	2025	None formal	Management “expects its net interest margin will continue to expand in 2025” as funding costs reprice lower	Qualitative positive
NPL resolutions	Q1 2025	None	Expect $1.2m NPL payoff and sale of $1.6m NPLs at par in Q1 2025	Qualitative de-risking
Fee income (Wealth/Retirement)	2025	None	Crest acquisition expected to bolster retirement consulting fees	Qualitative positive
Liquidity/funding	Ongoing	—	Access to $549.7m FHLB capacity; $414.0m AFS available to pledge	Informational

No formal quantitative guidance (revenue, expense, tax rate, etc.) was provided in the Q4 press release; commentary above reflects management’s qualitative outlook.

Earnings Call Themes & Trends

Note: We did not locate a Q4 2024 earnings call transcript in our document set; themes below reflect management commentary from the Q4/Q3/Q2 press releases.

Topic	Q2 2024 (7/24/24)	Q3 2024 (10/23/24)	Q4 2024 (1/29/25)	Trend
Net interest margin	Stabilizing at 2.71%; pressure from funding costs; ex-marks 2.51%	Down to 2.66%; Fed cut in late Sept seen as tailwind for Q4	Up to 2.72%; expects further expansion in 2025 as funding reprices	Improving QoQ; constructive 2025
Credit quality	NPLs 0.40%; provision $1.1m; strong asset quality	Single office-backed credit drove $4.4m charge-off; provision $7.0m; NPLs 0.58%	NPLs 0.70%; small number of identified credits; plan to resolve portions in Q1’25; provision $0.30m	Event-driven spike moderating
Deposits/funding	Deposits stable at $4.21B; ongoing remix to interest-bearing	Deposits up to $4.36B incl. $74.9m brokered; used to pay down higher-cost wholesale	Seasonal public funds drove QoQ deposit decline; customer deposits up YoY; funding costs fell	Liquidity intact; costs easing
Fee income	Broad-based strength (trust, BOLI); securities losses	Growth across fees; SBIC gains; debit card growth	Trust, debit card, retirement consulting grew YoY; SBIC income lower; Crest adds capacity	Positive underlying trend
Securities/OCI	Unrealized losses rose to $242.3m at 6/30	Unrealized losses fell to $189.4m at 9/30	Unrealized losses rose to $244.1m at 12/31 on Q4 rate rise	Rate-driven volatility

Management Commentary

“Our fourth quarter performance highlights the positive momentum underway in our business and we continue to believe Farmers is very well positioned to grow earnings in 2025.” — Kevin J. Helmick, President & CEO .
“The current rate cutting cycle by the Federal Reserve… had a significant impact on funding costs… [and] was the primary reason for the net interest margin increasing during the fourth quarter. The Company expects its net interest margin will continue to expand in 2025” .
On accelerating fee growth: trust fees +$318k YoY to $2.7m; retirement plan consulting +$88k YoY to $719k; debit card income +$467k YoY to $2.2m; Crest expected to bolster the unit in 2025 .

Q&A Highlights

We could not locate a Q4 2024 earnings call transcript for FMNB in our document set or public transcript repositories; therefore, specific Q&A themes and guidance clarifications are unavailable. MarketBeat lists the call time (Jan 29, 2025, 8:00 AM ET) but does not provide a transcript .

Estimates Context

EPS: Actual $0.39 vs consensus $0.34, a beat of $0.05; aligns with MarketBeat’s summary table .
Revenue: Operating revenue reported at ~$44.15m (press release categories sum; also cited by Zacks/Nasdaq), vs MarketBeat consensus $44.00m; indicates a slight beat. Note: Some third-party sources list “actual” revenue at $44.95m; definitional differences likely (e.g., tax-equivalent adjustments, inclusion of other items) .
S&P Global (Capital IQ) consensus retrieval was unavailable at time of analysis; we relied on MarketBeat and Zacks/Nasdaq aggregates as proxies for Wall Street estimates .

Key Takeaways for Investors

Margin inflection into 2025: Funding costs already moved lower (yield on interest-bearing liabilities 2.72% in Q4 vs 2.84% in Q3), enabling NIM expansion; management anticipates further improvement this year, a key driver for EPS upside if deposit betas continue to fall .
Expense discipline supports operating leverage: Q4 efficiency ratio down to 56.4% amid lower FDIC and professional fees; any incremental revenue from NIM/fees should flow through at attractive incremental margins .
Credit event de-risking: Elevated Q3 provision tied to one office-backed credit did not repeat in Q4; NPL uptick is concentrated and partially expected to resolve in Q1’25, reducing tail risk .
Fee diversification: Trust, cards, and retirement consulting delivered YoY gains; Crest integration should add to wealth/retirement fee momentum, smoothing earnings against rate volatility .
Securities/OCI sensitivity: AFS unrealized losses increased with Q4 rate rise; renewed rate volatility can pressure tangible book, though capital ratios (CET1 11.26%) remain solid and liquidity capacity is ample .
Near-term trading setup: Positive EPS/NIM surprise vs consensus and constructive 2025 NIM outlook are supportive; watch deposit trends post seasonal public funds outflows and evidence of fee lift from Crest .
Medium-term thesis: With funding costs normalizing, mixed-rate balance sheet, and diversified fees, FMNB is positioned for gradual ROA/ROE expansion while maintaining prudent credit standards; execution on NPL resolutions and expense control remain catalysts .

Additional Context and Prior Quarters

Q3 2024: EPS $0.23 impacted by a single $12.5m commercial office credit ($4.4m charge-off; $1.2m specific reserve); NIM 2.66%; efficiency 58.47% .
Q2 2024: EPS $0.31; NIM 2.71%; broad-based fee strength; asset quality strong with NPLs 0.40% .

Other Relevant Q4 Items

Crest Retirement Advisors acquisition (Dec 16, 2024) expands retirement consulting footprint in Central Ohio; expected to be immediately accretive to earnings .
Quarterly dividend maintained at $0.17 (Nov 26, 2024 declaration) .
Chief Banking Officer appointment (Jan 15, 2025) enhances execution across credit, commercial, and mortgage lending .

FARMERS NATIONAL BANC CORP /OH/ (FMNB)·Q4 2024 Earnings Summary