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Farmers National (FMNB) Up on New Share Buyback Plan Announcement

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Shares of Farmers National Banc Corp. (FMNB - Free Report) have gained marginally since its announcement of a new share buyback program. FMNB's board of directors authorized the repurchase of up to 1 million shares of its common stock, with no expiration date.

The authorization replaces the previous buyback authorization of 1.5 million announced in 2019. Under the previous program, the company repurchased 1.3 million shares as of Feb 28.

Alongside share repurchases, Farmers National has a record of continuously raising dividends. The last hike of 6.25% was announced in November 2022. The company currently pays 17 cents per share as a quarterly dividend.

Considering the last day’s closing price of $14.33, Farmers National’s dividend yield is 4.75% currently, which is impressive compared with the industry’s average of 3.03%. Also, the company raised its quarterly dividends eight times in the last five years. The yield, representing a steady income stream, attracts investors.

FMNB has been undertaking inorganic expansions to bolster shareholders’ value. By acquiring Emclaire Financial Corp. in January 2023, FMNB expanded its presence throughout Pennsylvania. It is expected that with this acquisition, Farmers National will be well-positioned to navigate any economic slowdown in near term.

In November 2021, FMNB acquired Cortland Bancorp, Inc. for $128.54 million. In 2019, it closed the acquisition of Maple Leaf Financial, Inc. for $42.98 million. These deals, along with several past ones, poise Farmers National well for growth.

Supported by its loan growth and acquisition of Emclaire, the company is expected to enjoy liquidity. Thus, it is expected to continue with efficient capital deployment activities.

Enhanced Capital Deployment Plans of Other Banks

Since the beginning of 2023, banks like Prosperity Bancshares, Inc. (PB - Free Report) and Zions Bancorporation (ZION - Free Report) announced their share repurchase plans.

Prosperity Bancshares’ board of directors authorized a share repurchase program under which it can repurchase up to 5%, which is 4.6 million of its shares. PB’s program expires on Jan 17, 2024.

Similarly, Zions Bancorp’s board of directors authorized a share repurchase for the first quarter of 2023. ZION's program is worth up to $50 million of shares.


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