Farmers National Banc beats on revenue, net interest margin expands
Ohio regional bank reports 172nd consecutive profitable quarter as credit quality improves
Farmers National Banc Corp. reported fourth-quarter earnings that topped analyst expectations, driven by a significant expansion in net interest margin and improving credit quality at the Ohio-based regional lender.
The Canfield, Ohio bank reported quarterly revenue of $49.1 million, surpassing the $48.3 million consensus estimate, while net interest margin widened 33 basis points year-over-year to 3.05%, up from 2.72% in the prior-year period. The core profitability measure also improved from 2.82% in the third quarter of 2025.
Nonperforming loans declined sharply to $26.2 million from $35.3 million in the previous quarter, signaling improving asset quality as the regional banking sector navigates economic uncertainty. The bank reported net income of $14.6 million, or $0.39 per share on a GAAP basis, slightly below the $0.405 analyst estimate. On an adjusted basis excluding $925,000 in merger-related costs, earnings per share reached $0.40.
The results extend Farmers National's streak to 172 consecutive profitable quarters, a rare achievement in the banking sector that underscores the lender's stability through economic cycles.
Total assets reached $5.25 billion at December 31, 2025, supporting what management described as ongoing momentum in its community banking platform. Adjusted net income for the quarter totaled $15.1 million, or $0.40 per diluted share.
The earnings release comes as Farmers National advances toward completion of its all-stock merger with Middlefield Bancorp, a transaction valued at approximately $299 million. The combined entity would hold more than $7 billion in assets across 83 branch locations in Ohio and Western Pennsylvania, pending shareholder and regulatory approvals.
Farmers National has set a virtual shareholder meeting for February 10, 2026 to vote on the merger, with the deal expected to close by the end of the first quarter. Kroll Bond Rating Agency noted in October that the merger would have a moderate impact on capital, with the combined company's pro forma common equity tier 1 ratio expected to settle at approximately 11.2%.
Analysts maintain a measured outlook on the stock despite the earnings beat. Piper Sandler initiated coverage with a Neutral rating and $14 price target earlier this month, while the consensus analyst target stands at $14.50, according to MarketBeat data. Individual price targets range from $14 to $15.
The bank's shares currently trade at $13.59, giving the company a market capitalization of approximately $512 million. The stock offers a dividend yield of 4.89% based on the current quarterly payout of $0.68 per share, and trades at 9.44 times trailing earnings, below the broader market multiple.
Farmers National's performance reflects broader strength in the regional banking sector, which has outperformed the S&P 500 and broader financial sector in recent months. The S&P Regional Banking ETF has risen more than 17% since November 2025 lows as investors position for stabilizing credit conditions and renewed commercial real estate lending activity heading into 2026.
Management has not yet provided specific 2026 guidance, though analysts anticipate the completed Middlefield merger will create scale advantages in competitive Ohio and Pennsylvania markets. The combined institution would rank among the largest community banking organizations in the region.