Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K | (Mark One) | | | | --- | --- | --- | | ☒ | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | | | For the fiscal year ended December 31, 2025 | | | | or | | | ☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | | | For the transition period from to | | | | Commission file number 001-35296 | | | | Farmers National Banc Corp. | ...

Core Viewpoint - Farmers National Banc Corp. and Middlefield Banc Corp. have announced that their shareholders have approved the merger of Middlefield into Farmers, with completion expected soon [1]. Company Summary - Farmers National Banc Corp. is the holding company for The Farmers National Bank of Canfield [1]. - Middlefield Banc Corp. is the holding company for The Middlefield Banking Company [1]. Merger Details - The merger between Farmers and Middlefield has received shareholder approval from both companies [1]. - The expected completion of the merger is anticipated to occur in the near future [1].

Core Viewpoint - Farmers National Banc Corp. (FMNB) demonstrates exceptional capital efficiency with a Return on Invested Capital (ROIC) of 46.24% and a Weighted Average Cost of Capital (WACC) of 13.91%, resulting in a ROIC to WACC ratio of 3.32, significantly outperforming its peers [2][5]. Group 1: Company Overview - Farmers National Banc Corp. operates primarily in Ohio, providing a range of banking services including personal and business banking, wealth management, and mortgage services [1]. - The company competes with regional banks such as First Mid Bancshares, Inc. (FMBH) and The First Bancshares, Inc. (FBMS) [1]. Group 2: Financial Performance - FMNB's ROIC of 46.24% indicates high capital efficiency, significantly above its WACC of 13.91% [2][5]. - In comparison, First Mid Bancshares, Inc. (FMBH) has a ROIC of 4.05% and a WACC of 11.44%, leading to a ROIC to WACC ratio of 0.35, indicating lower capital efficiency [3]. - The First Bancshares, Inc. (FBMS) shows a ROIC of 2.66% and a WACC of 13.74%, resulting in a ROIC to WACC ratio of 0.19, further highlighting FMNB's superior performance [3]. - First Business Financial Services, Inc. (FBIZ) has a ROIC of 7.32% and a WACC of 15.71%, yielding a ROIC to WACC ratio of 0.47, which, while the highest among its peers, still falls short of FMNB's performance [4]. - Civista Bancshares, Inc. (CIVB) and Financial Institutions, Inc. (FISI) exhibit lower ratios, with CIVB at 0.39 and FISI at -0.12, emphasizing FMNB's capital efficiency advantage [4].

Core Viewpoint - Institutional Shareholder Services, Inc. (ISS) has recommended shareholders of Middlefield Banc Corp. to vote "FOR" the proposed merger with Farmers National Banc Corp. at the Special Meeting of Shareholders scheduled for February 10, 2026 [1][2] Company Overview - Middlefield Banc Corp. is headquartered in Middlefield, Ohio, and serves as the holding company for The Middlefield Banking Company, which has total assets of $1.98 billion as of September 30, 2025 [4] - The bank operates 21 full-service banking centers and a brokerage office, providing services across various locations in Ohio [4] Merger Details - The proposed merger involves Middlefield Banc Corp. merging into Farmers National Banc Corp., which is the holding company for The Farmers National Bank of Canfield [1] - Shareholders are encouraged to vote promptly on the merger and other proposals, with additional information available in the joint proxy statement/prospectus distributed to shareholders [3][5] Voting Information - Shareholders who have not yet voted are reminded to do so before the proxy deadline of February 9, 2026, at 11:59 p.m. ET [1][3] - Assistance with voting can be obtained by contacting Alliance Advisors [4] Regulatory Filings - Relevant materials regarding the proposed merger have been filed with the U.S. Securities and Exchange Commission (SEC), including a Registration Statement on Form S-4 and a definitive joint proxy statement/prospectus [5][6] - The joint proxy statement/prospectus has been mailed to shareholders and is available for free on the SEC's website and the websites of Farmers and Middlefield [7]

Core Viewpoint - Farmers National Banc (FMNB) reported quarterly earnings of $0.4 per share, missing the Zacks Consensus Estimate of $0.47 per share, representing an earnings surprise of -14.29% [1] Financial Performance - The company posted revenues of $49.12 million for the quarter ended December 2025, missing the Zacks Consensus Estimate by 2.06%, compared to year-ago revenues of $44.15 million [2] - Over the last four quarters, Farmers National has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Farmers National shares have increased about 2% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.48 on revenues of $51.65 million, and for the current fiscal year, it is $1.75 on revenues of $269.75 million [7] - The estimate revisions trend for Farmers National was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Zacks Industry Rank for Banks - Midwest is currently in the top 36% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8]

Financial Performance - Net income for Q4 2025 was $14.6 million, or $0.39 per diluted share, compared to $14.4 million, or $0.38 per diluted share, in Q4 2024[3] - Net income for the year ended December 31, 2025, was $54,586,000, an 18.8% increase from $45,949,000 in 2024[25] - Net income for the year ended December 31, 2025, was $54,586 million, up from $45,949 million in 2024, reflecting a growth of 14%[37] - Diluted EPS excluding merger and certain items was $1.57 for the year ended December 31, 2025, compared to $1.28 in 2024, representing a 22.7% increase[38] Assets and Liabilities - Total assets increased to $5.25 billion in Q4 2025 from $5.12 billion at the end of 2024[5] - Total assets reached $5,245,870,000 as of December 31, 2025, up from $5,118,924,000 in 2024[26] - Total assets as of December 31, 2025, were $5,245,870 million, up from $5,118,924 million in 2024[36] - Loans decreased to $3.30 billion at December 31, 2025, from $3.34 billion at September 30, 2025, but increased by $36.4 million year-over-year[5] - Total deposits declined to $4.34 billion at December 31, 2025, from $4.40 billion at September 30, 2025, but increased by $76.0 million since December 31, 2024[7] Income and Expenses - Net interest income was $37.0 million in Q4 2025, up from $32.7 million in Q4 2024[12] - Noninterest income increased to $12.1 million in Q4 2025 from $11.4 million in Q4 2024, driven by strong performance across multiple business lines[13] - Noninterest expense rose to $29.1 million in Q4 2025 from $26.2 million in Q4 2024, primarily due to increased salaries and employee benefits[14] - Total interest income for Q4 2025 was $59,418,000, an increase of 2.7% compared to $57,909,000 for the same period in 2024[25] - Noninterest income increased by 10.6% to $12,098,000 in Q4 2025, up from $11,413,000 in Q4 2024[25] - Total noninterest expenses were $29,079 thousand, compared to $26,174 thousand in the same quarter last year, reflecting an increase of 10.94%[29] Efficiency and Ratios - The efficiency ratio (tax equivalent basis) improved to 57.11% in Q4 2025 from 59.60% in Q4 2024[25] - The efficiency ratio excluding certain items improved to 56.63% for the year ended December 31, 2024, down from 59.19% in 2023[38] - Return on average assets excluding system conversion and merger costs was 1.14% for the year ended December 31, 2025, compared to 0.95% in 2024[38] Capital and Equity - The Common Equity Tier 1 Capital Ratio was 11.94% as of December 31, 2025, compared to 11.14% a year earlier[26] - The book value per share increased to $12.90 as of December 31, 2025, compared to $10.80 in 2024[26] - The company’s stockholders' equity increased to $481,061 thousand from $428,646 thousand in the previous year[30] - Average stockholders' equity increased to $440,911 million in 2025 from $407,436 million in 2024[37] Loan and Deposit Performance - Non-performing loans decreased to $26.2 million at December 31, 2025, from $35.3 million at September 30, 2025[9] - Non-performing loans decreased to $26,215,000 in Q4 2025 from $22,818,000 in Q4 2024[26] - Total end-of-period loan balances reached $3,293,544 thousand, showing a slight decrease from $3,327,099 thousand in the previous quarter[27] - Total customer deposits amounted to $4,342,778 thousand, an increase from $4,321,430 thousand in the previous quarter[29] - Average loans for the year were $3,291,482 thousand with a yield of 5.82%, compared to $3,227,384 thousand and a yield of 5.76% in the previous year[33] Mergers and Future Outlook - The Company announced a merger with Middlefield Banc Corp., expected to close in Q1 2026, aiming to create long-term value for shareholders[4]

Core Viewpoint - The proposed sale of Middlefield Banc Corp. to Farmers National Banc Corp. is under investigation to assess whether the terms of the transaction adequately reflect the value of Middlefield Banc Corp. [1] Group 1: Transaction Details - Shareholders of Middlefield Banc Corp. will receive 2.6 shares of Farmers National Banc Corp. common stock for each share they own in Middlefield [1] Group 2: Legal Investigation - Kahn Swick & Foti, LLC is investigating the adequacy of the proposed transaction and the process leading to it, focusing on whether the consideration undervalues Middlefield Banc Corp. [1]

Core Viewpoint - Farmers National Banc (FMNB) is identified as a potentially undervalued stock with strong earnings outlook, supported by various valuation metrics [4][8]. Valuation Metrics - FMNB holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4][3]. - The stock has a P/E ratio of 8.64, significantly lower than the industry average of 10.36, suggesting it may be undervalued [4]. - FMNB's P/B ratio is 1.25, compared to the industry's average of 2.02, further indicating attractive valuation [5]. - The P/S ratio for FMNB is 1.85, which is lower than the industry average of 2.12, reinforcing the perception of undervaluation [6]. - FMNB's P/CF ratio stands at 9.62, well below the industry's average of 14.61, highlighting its solid cash flow position [7]. Investment Outlook - The combination of FMNB's favorable valuation metrics and strong earnings outlook positions it as a compelling value stock in the current market [8].

Core Viewpoint - Investors should closely monitor Farmers National Banc Corp. (FMNB) stock due to significant movements in the options market, particularly the high implied volatility of the Dec 19, 2025 $2.50 Call option [1] Company Analysis - Farmers National Banc is currently rated as Zacks Rank 3 (Hold) within the Banks – Midwest industry, which is in the top 11% of the Zacks Industry Rank [3] - Over the past 30 days, two analysts have raised their earnings estimates for the current quarter, resulting in an increase of the Zacks Consensus Estimate from 42 cents per share to 47 cents [3] Options Market Insights - The high implied volatility suggests that options traders are anticipating a significant price movement for Farmers National Banc shares, potentially indicating an upcoming event that could lead to a major rally or sell-off [2][4] - Seasoned options traders often seek to sell premium on options with high implied volatility, aiming to benefit from the decay of the option's value if the underlying stock does not move as much as expected [4]

Financial Performance - Net income for the three months ended September 2025 was $12,461, compared to $8,535 for the same period in 2024, reflecting a year-over-year increase of 46.5%[9] - Net income for the nine months ended September 30, 2025, was $39,949,000, an increase from $31,558,000 for the same period in 2024, representing a growth of approximately 26.5%[13] - Earnings per share (EPS) for the nine months ended September 2025 was $1.07, up from $0.85 in the same period of 2024, indicating a growth of 25.9%[8] - Total comprehensive income for the nine months ended September 2025 was $78,129, compared to $53,161 for the same period in 2024, showing an increase of 47%[9] - Total consolidated revenues for the nine months ended September 30, 2025, were $200.1 million, an increase from $175.2 million in the same period of 2024, representing a growth of approximately 14.2%[138] Asset and Equity Growth - Total assets increased to $5,235,575,000 as of September 30, 2025, up from $5,118,924,000 on December 31, 2024, representing a growth of 2.29%[7] - Total stockholders' equity grew to $465,949,000, up from $406,028,000, a significant increase of 14.69%[7] - The total stockholders' equity as of September 30, 2025, was $465,949,000, up from $439,678,000 as of September 30, 2024, representing an increase of approximately 6%[11] - The balance of common stock as of September 30, 2025, was $366,214,000, up from $365,542,000 as of September 30, 2024[11] Loan and Deposit Activity - Net loans rose to $3,298,252,000, an increase of 2.03% from $3,232,483,000 in the previous period[7] - Total deposits reached $4,400,515,000, reflecting a 3.13% increase from $4,266,779,000[7] - The company experienced a net change in deposits of $133,736,000 for the nine months ended September 30, 2025, compared to $184,451,000 for the same period in 2024, reflecting a decrease of approximately 27.5%[13] - Total loans increased to $3,327,099, up from $3,258,121, representing a growth of 2.1% year-over-year[32] Credit Losses and Provisions - The allowance for credit losses increased to $39,528,000 from $35,863,000, indicating a rise of 7.41%[7] - The provision for credit losses for the nine months ended September 2025 was $7,932, compared to $5,109 in the same period of 2024, reflecting a rise of 55.1%[8] - The provision for credit losses for the three months ended September 30, 2025, was $1,501, compared to a provision of $6,807 for the same period in 2024, showing a decrease of 77.9%[35] - The company reported a provision for credit losses of $5,109,000 for the nine months ended September 30, 2025, down from $7,932,000 for the same period in 2024, indicating a decrease of approximately 35.5%[13] Noninterest Income and Expenses - Total noninterest income for the three months ended September 30, 2025, was $11,430 thousand, compared to $12,340 thousand for the same period in 2024, reflecting a decrease in service charges and trust fees[75] - For the nine months ended September 30, 2025, total noninterest income was $34,032 thousand, an increase from $30,302 thousand in the same period of 2024, driven by higher trust fees and debit card fees[75] - Total noninterest expenses for the nine months ended September 2025 were $87,381, an increase from $80,517 in the same period of 2024, which is a rise of 8.5%[8] Securities and Investments - The available-for-sale securities portfolio had an amortized cost of $1,497,403, with a fair value of $1,301,766, resulting in gross unrealized losses of $199,767 as of September 30, 2025[26] - The Company reported proceeds from sales of available-for-sale securities of $28,750 for the three months ended September 30, 2025, with gross losses of $960[26] - The Company has not recorded an allowance for credit losses on available-for-sale securities as of September 30, 2025, as unrealized losses are attributed to noncredit-related factors[29] Cash and Liquidity - The company has maintained a strong liquidity position with total cash and cash equivalents of $92,345,000, up from $85,738,000, an increase of 7.88%[7] - The ending cash and cash equivalents as of September 30, 2025, were $92,345,000, down from $189,136,000 as of September 30, 2024, indicating a decrease of approximately 51%[13] Mergers and Acquisitions - The Company acquired Crest Retirement Advisors, LLC for $600,000, with an additional $400,000 in contingent consideration[24] - The Company announced a definitive merger agreement with Middlefield Banc Corp., valued at approximately $299.0 million, expected to close in the first quarter of 2026[157][158] Regulatory Capital Ratios - As of September 30, 2025, the common equity tier 1 capital ratio for the consolidated entity is 11.62%, significantly above the minimum requirement of 4.5%[132] - The total risk-based capital ratio for the consolidated entity stands at 15.08%, exceeding the minimum requirement of 8.0%[132] - The bank's tier 1 leverage ratio is reported at 9.12%, well above the minimum requirement of 4.0%[132]