DEF 14A: Farmers National Banc Corp. Announces 2024 Annual Meeting and Proxy Details

Farmers National Banc Corp. will hold its 2024 Annual Meeting of Shareholders virtually on April 18, 2024, to vote on director elections, executive compensation, and the ratification of the independent accounting firm.

Summary

• Farmers National Banc Corp. is holding its Annual Meeting of Shareholders on April 18, 2024, at 10:00 a.m. Eastern Time, in a virtual format.
• Shareholders will vote on the election of four Class II directors for terms expiring in 2027.
• A non-binding advisory vote will be held to approve the compensation of the company's named executive officers.
• Shareholders will also vote to ratify the appointment of Crowe LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024.
• The Board of Directors recommends voting FOR the election of the director nominees and FOR Proposals 2 and 3.
• The record date for determining shareholders eligible to vote is March 5, 2024.
• As of March 5, 2024, there were 37,545,864 Common Shares issued and outstanding, each entitled to one vote.

Sentiment

Score: 6

Explanation: The document presents a mix of positive and negative information. While there are positives related to community involvement and employee benefits, the financial results were worse than the previous year. The sentiment is neutral to slightly positive.

Positives

• The company is committed to environmental sustainability, social responsibility, and sound corporate governance.
• Farmers donated more than $700,000 in sponsorships and donations to a wide range of non-profits and community organizations throughout its footprint in 2023.
• Farmers employees contributed over 4,000 hours in volunteer service hours to community non-profit organizations in 2023.
• The company offers a comprehensive benefits package to employees, including medical, dental, vision, life insurance, disability insurance, 401(k), and tuition reimbursement.
• Farmers is committed to supporting a high performing, collaborative culture that provides the foundation to attract and retain the best associates in banking.

Negatives

• Adjusted net income for 2023 totaled $61.8 million, or $1.65 per diluted share, compared to $64.0 million, or $1.89 earnings per diluted share, for 2022.
• Our 2023 annualized return on average assets as adjusted was 1.23% compared to 1.54% for 2022.
• Our 2023 pre-tax, pre-provision income as adjusted was $77.9 million in 2023, below the threshold performance level of $83.5 million.

Risks

• The document mentions the importance of risk management and the role of the Board and its committees in overseeing and monitoring risks, including operational, financial, legal, regulatory, and strategic risks.
• The Compensation Committee monitors compensation policies to ensure they do not encourage excessive or inappropriate risk-taking activities.
• The document also mentions the potential impacts of the economic and financial markets on Farmers pay programs.

Future Outlook

The document does not contain a specific future outlook, but it does mention that the Compensation Committee will review the voting results of the advisory vote on executive compensation and take the outcome into account when considering future executive compensation arrangements.

Management Comments

• Kevin J. Helmick, President and Chief Executive Officer, invites shareholders to the 2024 Annual Meeting and encourages them to vote.
• The Farmers Way is to know what we do, how we do it and why we do it, why we get up in the morning, why we seek to get better every day, why we believe in winning.
• At Farmers, we never win alone.
• We believe that the wisest decisions are made and financial strength is built through strong relationships .
• Everything we do the Farmers Way ultimately creates wins as we raise the standard of living and the quality of life in our communities.
• Our reason why is to PRODUCE WINS every day as we create thriving local families, businesses and organizations in every community that we serve and provide capital.

Industry Context

The document provides context by mentioning the competitive nature of the financial services industry and the need for Farmers to provide competitive compensation packages to retain and attract executive talent. It also mentions the macroeconomic challenges within the community banking industry.

Comparison to Industry Standards

• The Compensation Committee generally has evaluated compensation practices at similarly situated financial institutions to help determine appropriate levels of compensation for financial services executives in our geographic market.
• The Compensation Committee has consistently utilized a compensation peer group of companies for certain compensation benchmarking purposes.
• The Compensation Committee uses several factors to identify, evaluate and select peer financial institutions including but not limited to (i) factors of size ( e.g. , assets (ranging from approximately one-half to two times the asset size of Farmers), revenues, employees, and market capitalization), (ii) factors of profitability and growth ( e.g. , net revenue and operating income), and (iii) geographic location.
• Based on that evaluation, the Compensation Committee determined to focus on peer banking companies with assets between $2.5 billion and $10 billion that operated in a geographic market including Ohio, western Pennsylvania, Michigan, West Virginia, Kentucky, Indiana, and western New York.
• This evaluation resulted in the elimination of five companies from the previous peer group and the addition of the following four companies: First Commonwealth Financial, First Internet Bancorp, S&T Bancorp, and Park National Corporation, resulting in the following compensation peer group of 21 companies approved by the Compensation Committee for 2023 (2023 Peer Group): City Holding Company, Lakeland Financial Corporation, Civista Bancshares, Inc., Macatawa Bank Corporation, Community Trust Bancorp, Inc., Mercantile Bank Corporation, CNB Financial Corporation, MVB Financial Corp., Financial Institutions, Inc., Park National Corporation, Peoples Bancorp Inc., Premier Financial Corp., German American Bancorp, Inc., Summit Financial Group, Inc., Stock Yards Bancorp, Inc., Independent Bank Corporation, First Commonwealth Financial, First Internet Bancorp, S&T Bancorp, Horizon Bancorp, Inc., and First Financial Corporation.

Stakeholder Impact

• Shareholders are asked to vote on matters impacting the company's governance and executive compensation.
• Employees are impacted by the company's compensation policies and benefit programs.
• Communities benefit from the company's charitable giving and volunteer efforts.
• Clients are the heartbeat of the organization.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The Board of Directors and Compensation Committee will review the voting results and consider them in future decisions.
• The company will continue to monitor and manage risks and implement its compensation programs.

Key Dates

Keywords

Annual Meeting, Shareholders, Proxy Statement, Executive Compensation, Board of Directors, Director Election, Audit Committee, Crowe LLP, Financial Performance, Corporate Governance, Farmers National Banc Corp