Farmers National Banc Corp. Reports Second Quarter 2026 Results: Net Income of $23.0 Million, NIM Expands to 3.44%

6 min read | Published on 22 Jul 2026, 07:27 PM |Updated on 22 Jul 2026, 07:27 PM

Reviewed by

Naman SScanX News Team

Key Highlights

Farmers National Banc Corp. reported second quarter 2026 net income of $23.0 million ($0.39 per diluted share), up from $13.9 million ($0.37 per diluted share) in the second quarter of 2025, marking the company's 174th consecutive profitable quarter. Excluding $1.7 million in acquisition and core conversion costs, adjusted net income was $24.4 million, or $0.41 per diluted share. Net interest margin expanded to 3.44% from 2.91% year-over-year, supported by the March 2026 acquisition of Middlefield Banc Corp., higher asset yields, and lower funding costs. Non-performing loans declined $15.2 million, or 25.4%, during the quarter, while commercial lending fundings reached approximately $175.0 million, a 181% increase over the first quarter.

*this image is generated using AI for illustrative purposes only.

Farmers National Banc Corp. reported net income of $23.0 million, or $0.39 per diluted share, for the second quarter of 2026, compared to $13.9 million, or $0.37 per diluted share, for the second quarter of 2025. The results mark the company's 174th consecutive quarter of profitability. Net income in the second quarter of 2026 included $1.7 million of expense related to the March 2, 2026 acquisition of Middlefield Banc Corp. and core conversion costs. Excluding these items (non-GAAP), adjusted net income was $24.4 million, or $0.41 per diluted share.

Key Financial Highlights

The following table summarizes key performance metrics for the second quarter of 2026 compared to the second quarter of 2025:

Metric:	Q2 2026	Q2 2025
Net Income:	$23.0 million	$13.9 million
Diluted EPS:	$0.39	$0.37
Adjusted Net Income (non-GAAP):	$24.4 million	—
Adjusted Diluted EPS (non-GAAP):	$0.41	—
Net Interest Income:	$56.0 million	$34.9 million
Net Interest Margin (Annualized):	3.44%	2.91%
Noninterest Income:	$14.4 million	$12.1 million
Noninterest Expense:	$40.9 million	$27.2 million
Efficiency Ratio:	55.6%	56.66%
Efficiency Ratio excl. conversion/acquisition costs (non-GAAP):	53.2%	55.66%
Return on Average Assets (Annualized):	1.29%	1.08%
Return on Average Equity (Annualized):	11.82%	13.08%

Net Interest Income and Margin

Net interest income increased to $56.0 million in the second quarter of 2026, compared to $34.9 million in the second quarter of 2025. Average interest earning assets increased to $6.63 billion in the second quarter of 2026 compared to $4.89 billion in the second quarter of 2025. The increase was primarily driven by the acquisition of Middlefield. The yield on interest earning assets increased from 4.77% in the second quarter of 2025 to 5.25% in the second quarter of 2026, while the cost of interest-bearing liabilities declined from 2.49% in the second quarter of 2025 to 2.44% in the second quarter of 2026. Excluding acquisition marks (non-GAAP), the net interest margin was 3.28% in the second quarter of 2026, compared to 2.77% in the second quarter of 2025. The company also recognized a $1.0 million prepayment penalty from the payoff of one of the Middlefield commercial loans during the quarter.

Commercial Lending and Balance Sheet

Commercial lending fundings accelerated significantly during the second quarter, with approximately $175.0 million in fundings, representing a 181% increase over the first quarter. Unfunded commercial balances expanded by approximately $40.0 million, or 9%, since the end of March, reflecting continued growth in committed business and lending activity.

The following table presents key balance sheet figures as of June 30, 2026, compared to prior periods:

Balance Sheet Item:	June 30, 2026	March 31, 2026	Dec. 31, 2025
Total Assets:	$7.14 billion	$7.18 billion	$5.25 billion
Total Loans, Net of Allowance:	$4.72 billion	$4.75 billion	$3.27 billion
Securities Available for Sale:	$1.47 billion	$1.48 billion	$1.34 billion
Total Deposits:	$5.83 billion	$5.92 billion	$4.34 billion
Total Stockholders' Equity:	$784.0 million	$766.9 million	$485.7 million

The increase in total assets and deposits since December 31, 2025 was primarily due to the Middlefield acquisition, which added $1.82 billion in assets and $1.49 billion in deposits at closing. The decline in total loans from March 31, 2026 was attributed to heavier than expected commercial loan payoffs from the Middlefield portfolio and a decline in non-performing loans. Total deposits declined from March 31, 2026 primarily due to seasonal factors associated with public funds and the purposeful shrinkage of certain non-core deposits acquired in the Middlefield transaction.

Credit Quality

Credit quality showed notable improvement during the quarter. Non-performing loans declined to $44.6 million at June 30, 2026, from $59.9 million at March 31, 2026, reflecting strong workout efforts. Nonperforming loans to total loans improved to 0.93% at June 30, 2026, from 1.25% at March 31, 2026.

Credit Quality Metric:	June 30, 2026	March 31, 2026	Dec. 31, 2025
Non-Performing Loans:	$44.6 million	$59.9 million	$26.2 million
Non-Performing Loans to Total Loans:	0.93%	1.25%	0.79%
Loans 30–89 Days Delinquent:	$18.9 million	$14.7 million	$16.9 million
Allowance for Credit Losses to Total Loans:	1.12%	1.14%	1.11%
Annualized Net Charge-offs to Average Net Loans:	0.30%	0.05%	—

The provision for credit losses and unfunded commitments was $2.4 million in the second quarter of 2026, compared to a provision for credit losses of $3.5 million in the second quarter of 2025. Annualized net charge-offs as a percentage of average loans were 0.30% in the second quarter of 2026, compared to 0.07% in the second quarter of 2025. The increase in net charge-offs was associated with the resolution of non-performing loans, with most charge-offs coming from loans that carried specific reserves whose costs had been recognized in prior periods.

Noninterest Income and Expense

Noninterest income increased to $14.4 million in the second quarter of 2026 from $12.1 million in the second quarter of 2025, driven by the Middlefield acquisition and continued growth in the company's wealth lines of business. Key contributors included:

Service charges: $2.4 million (Q2 2026) vs. $1.7 million (Q2 2025)
Trust fees: $3.1 million (Q2 2026) vs. $2.6 million (Q2 2025)
Debit card income: $2.6 million (Q2 2026) vs. $2.0 million (Q2 2025)
Investment commissions: $1.0 million (Q2 2026) vs. $721,000 (Q2 2025)
Bank owned life insurance income: $1.4 million (Q2 2026) vs. $832,000 (Q2 2025)
Insurance commissions: $1.5 million (Q2 2026) vs. $1.8 million (Q2 2025)

Noninterest expense increased to $40.9 million in the second quarter of 2026 from $27.2 million in the second quarter of 2025, primarily as a result of the Middlefield acquisition and the recognition of $1.7 million in acquisition and core conversion costs. Salaries and employee benefits increased to $21.3 million from $14.7 million, and occupancy and equipment expenses increased to $5.9 million, an increase of $1.8 million from the second quarter of 2025.

Liquidity and Capital

The company had access to an additional $608.5 million in FHLB borrowing capacity at June 30, 2026, along with $415.3 million in available for sale securities available for pledging. The loan to deposit ratio was 81.9% at June 30, 2026. The Common Equity Tier 1 Capital Ratio (estimated) was 11.96% and the Total Risk Based Capital Ratio was 14.83% at June 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. Its wholly owned subsidiaries include The Farmers National Bank of Canfield, a full-service national bank with 83 banking locations in Ohio and western Pennsylvania, and Farmers Trust Company. Total wealth management assets under care at June 30, 2026, are $5.1 billion.

How will management sustain the accelerated commercial lending growth given the recent decline in total loans due to unexpected payoffs?

What is the expected timeline for realizing the full cost synergies and efficiency improvements following the Middlefield Banc Corp. integration?

With the cost of interest-bearing liabilities declining, how does the company plan to manage net interest margin if interest rates rise in the second half of 2026?