Farmers National Banc Corp /Oh/ (NASDAQ: FMNB)

Sector: Financial Services Industry: Banks - Regional CIK: 0000709337
Market Cap 506.42 Mn
P/B 1.09
P/E 9.32
P/S 2.84
ROIC (Qtr) 7.31
Div Yield % 6.33
Rev 1y % (Qtr) 24.48
Total Debt (Qtr) 321.58 Mn
Debt/Equity (Qtr) 0.69

About

Farmers National Banc Corp., or FMNB, operates in the financial, banking, trust, retirement consulting, insurance, and financial management industries. Its primary business activities encompass commercial and retail banking, trust services, retirement consulting, insurance, and financial management, all of which it conducts through its wholly-owned subsidiaries, The Farmers National Bank of Canfield, Farmers Trust Company, and Farmers National Captive, Inc. The company generates the majority of its revenue through its banking segment, which provides...

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Price action

Investment thesis

Bull case

  • Strong tangible asset base of 5.05B provides 15.70x coverage of total debt 321.58M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 53.64M provides strong 20.48x coverage of stock compensation 2.62M, indicating sustainable incentive practices.
  • Robust free cash flow of 43.05M exceeds capital expenditure of 10.59M by 4.07x, indicating strong organic growth funding capability.
  • Retained earnings of 277.93M represent substantial 0.60x of equity 465.95M, indicating strong internal capital generation.
  • Strong tangible asset base of 5.05B provides 27.15x coverage of intangibles 186.01M, indicating robust asset quality.

Bear case

  • Operating cash flow of 53.64M barely covers its investment activities of (111.74M), with a coverage ratio of -0.48, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 53.64M provides thin coverage of dividend payments of (25.45M) with a -2.11 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 92.34M provide limited coverage of acquisition spending of (600000), which is -153.91x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 43.05M represents just -0.86x of debt issuance (50M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 277.93M provide limited buffer against comprehensive income items of (155.09M), which is -1.79x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.13 0.14
EV to Cash from Ops. EV/CFO 13.14 7.21
EV to Debt EV to Debt 2.19 5.20
EV to EBIT EV/EBIT 10.85 14.98
EV to EBITDA EV/EBITDA 9.81 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 16.38 8.87
EV to Market Cap EV to Market Cap 1.39 1.04
EV to Revenue EV/Rev 3.95 -3.76
Price to Book Value [P/B] P/B 1.09 1.17
Price to Earnings [P/E] P/E 9.32 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.14 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 47.20 35.28
Dividend per Basic Share Div per Share (Qtr) 0.68 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 59.44 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -22.93 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -51.18 15.78
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 17.79 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 16.58 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) 17.17 61.46
EBT Growth (1y) % EBT 1y % (Qtr) 17.17 61.37
EPS Growth (1y) % EPS 1y % (Qtr) 15.20 76.34
FCF Growth (1y) % FCF 1y % (Qtr) -28.31 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.57 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.03 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.40 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.69 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 40.20 147.97
EBIT Margin % EBIT Margin % (Qtr) 36.40 155.41
EBT Margin % EBT Margin % (Qtr) 36.40 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 30.40 115.63