Farmers National Banc Corp. 10-K

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)


þ		Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the fiscal year ended December 31, 2005


o		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 0-12055

Farmers National Banc Corp.

(Exact name of registrant as specified in its charter)


Ohio		34-1371693

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


20 South Broad Street Canfield, Ohio 44406		44406

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 330-533-3341

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, no par value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer þ Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

The registrant estimates that the aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $187.6 million based upon the last sales price as of June 30, 2005. (The exclusion from such amount of the market value of the shares owned by any person shall not be deemed an admission by the Registrant that such person is an affiliate of the Registrant.)

As of February 28, 2006, the registrant had outstanding 12,969,480 shares of common stock having no par value.

DOCUMENTS INCORPORATED BY REFERENCE


		Parts of Form 10-K
		into which
Document		Document is Incorporated
Portions of 2005 Annual Report to Shareholders		II

Definitive proxy statement for the 2005 Annual Meeting of Shareholders to be held on March 30, 2006		III

Form 10-K Cross Reference Index to Items Incoroporated by Reference to the 2005 Annual Report to Shareholders


	Pages
Part I
Item 1 — Business
Average Balance Sheets/Yields/Rates		6
Rate and Volume Analysis		7
Securities		13-14
Loans		11
Loan Loss Experience		12-13
Deposits		14
Financial Ratios		5
Short-Term Borrowings		14, 27-28

Part II
Item 5
Market For Registrant’s Common Stock and Related Stockholder Matters		4

Item 6
Selected Financial Data		5

Item 7
Management’s Discussion and Analysis of Financial Condition and Results of Operations		7-15

Item 7A
Quantitative and Qualitative Disclosures About Market Risk		10

Item 8
Financial Statements and Supplementary Data		19-33

Part IV
Item 15
Report of Crowe Chizek and Company LLC Independent Auditors		18
Financial Statements:
Consolidated Balance Sheets — December 31, 2005 and 2004		19
Consolidated Statements of Income & Comprehensive Income — Calendar Years 2005, 2004 and 2003		20
Consolidated Statement of Stockholders’ Equity — Calendar Years 2005, 2004 and 2003		21
Consolidated Statements of Cash Flows — Calendar Years 2005, 2004 and 2003		22
Notes to Consolidated Financial Statements		23-33

FARMERS NATIONAL BANC CORP.
FORM 10-K
2005

INDEX


		Page
Part I.

Item 1.	Business: General		1

Item 1A.	Risk Factors		3

Item 2.	Properties		4

Item 3.	Legal Proceedings		5

Item 4.	Submission of Matters to a Vote of Security Holders		5

Part II.

Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters		6

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		6

Item 9A.	Controls and Procedures		6

Item 9B.	Other Information		7

Part III.

Item 10.	Directors and Executive Officers of the Registrant		7

Item 11.	Executive Compensation		8

Item 12.	Security Ownership of Certain Beneficial Owners and Management		8

Item 13.	Certain Relationships and Related Transactions		8

Item 14.	Principal Accountant Fees and Services		8

Part IV.

Item 15.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K		8

Signatures			10

Index to Exhibits			11

Certifications of Chief Executive Officer
Certifications of Chief Financial Officer
Section 1350 Certification (Chief Executive Officer)
Section 1350 Certification (Chief Financial Officer)
EX-13 Annual Report
EX-23.A Consent of Crowe Chizek and Company LLC
EX-31.A Certification of CEO
EX-31.B Certification of CFO
EX-32.A 906 Certification of CEO
EX-32.B 906 Certification of CFO
EX-13 Financials
EX-23A Consent
EX-31.1 Certification 302 - CEO
EX-31.2 Certification 302 - CFO
EX-32.1 Certification 906 - CEO
EX-32.2 Certifcation 906 - CFO

Part I

Item 1. Business General

The Corporation

The registrant, Farmers National Banc Corp. (herein sometimes referred to as the Corporation), is a one-bank holding company registered under the Bank Holding Company Act of 1956, as amended. The only subsidiary is The Farmers National Bank of Canfield (the Bank) which was acquired March 31, 1983. The Corporation and its subsidiary operate in one industry, domestic banking.

The Corporation conducts no business activities except for investment in securities permitted under the Bank Holding Company Act. Bank holding companies are permitted under Regulation Y of the Board of Governors of the Federal Reserve System to engage in other activities such as leasing and mortgage banking.

The Bank

The Bank is a full-service national bank engaged in commercial and retail banking in Mahoning, Trumbull and Columbiana Counties in Ohio. The Bank’s commercial and retail banking services include checking accounts, savings accounts, time deposit accounts, commercial, mortgage and installment loans, home equity loans, home equity lines of credit, night depository, safe deposit boxes, money orders, bank checks, automated teller machines, internet banking and travelers checks, “E” Bond transactions, utility bill payments, MasterCard and Visa credit cards, brokerage services and other miscellaneous services normally offered by commercial banks.

The Bank faces significant competition in offering financial services to customers. Ohio has a high density of financial institution offices, many of which are branches of significantly larger institutions that have greater financial resources than the Bank, and all of which are competitors to varying degrees. Competition for loans comes principally from savings banks, savings and loan associations, commercial banks, mortgage banking companies, credit unions, insurance companies and other financial service companies. The most direct competition for deposits has historically come from savings and loan associations, savings banks, commercial banks and credit unions. Additional competition for deposits comes from non-depository competitors such as the mutual fund industry, securities and brokerage firms and insurance companies.

The Corporation had 294 full-time equivalent employees at December 31, 2005.

The Bank’s internet site, www.fnbcanfield.com contains an Investor Relations section which provides a hyperlink to the SEC where the Corporation’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, director and Officer Reports on Form(s) 3, 4, and 5 and amendments to those documents filed or furnished pursuant to the Securities Exchange Act of 1934 are available free of charge as soon as reasonably practicable after the Corporation has filed these documents with the Securities and Exchange Commission (SEC).

In addition, the Corporation’s filings with the SEC may be read and copied at the SEC Public Reference Room at 450 Fifth Street, NW Washington, DC 20549. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. These filings are also available on the SEC’s website at www.sec.gov free of charge as soon as reasonably practicable after the Corporation has filed the above referenced reports.

Supervision and Regulation

The Corporation is regulated by the Federal Reserve Bank (the “FRB”). The Bank is regulated by the Office of the Comptroller of the Currency (the “OCC”), as well as the Federal Deposit

Item 1 (Continued)

Insurance Corporation (the “FDIC”). A listing of the minimum regulatory requirements for capital and the Corporation’s capital position as of December 31, 2005 are presented in Note J on page 29 of the annual report to shareholders for the year ended December 31, 2005 and is hereby incorporated by reference.

The Corporation is subject to regulation under the Bank Holding Company Act of 1956, as amended. This Act restricts the geographic and product range of bank holding companies by defining the types and locations of institutions the holding companies can own or acquire. This act also regulates transactions between the Corporation and the Bank and generally prohibits tie-ins between credit and other products and services.

The Bank is subject to regulation under the National Banking Act and is periodically examined by the OCC and is subject to the rules and regulations of the FRB. As an insured institution and member of the Bank Insurance Fund (“BIF”), the Bank is also subject to regulation by the FDIC. Establishment of branches is subject to approval of the OCC and geographic limits established by state law. Ohio branch banking law permits a bank having its principal place of business in the state to establish branch offices in any county in Ohio without geographic restrictions.

FDICIA

The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) revised the bank regulatory and funding provisions of the Federal Deposit Insurance Act and several other federal banking statutes. Among other things, FDICIA requires federal banking agencies to broaden the scope of corrective action taken with respect to banks that do not meet minimum capital requirements and to take such actions promptly in order to minimize losses to the FDIC.

FDICIA established five capital tiers: “well capitalized”; “adequately capitalized”; “undercapitalized”; “significantly undercapitalized”; and “critically undercapitalized” and imposes significant restrictions on the operations of a depository institution that is not in either of the first two of such categories. A depository institution’s capital tier depends upon the relationship of its capital to various capital measures. A depository institution is deemed to be “well capitalized” if it significantly exceeds the minimum level required by regulation for each relevant capital measure, “adequately capitalized” if it meets each such measure, “undercapitalized” if it is significantly below any such measure and “critically undercapitalized” if it fails to meet any critical capital level set forth in regulations. An institution is deemed to be in a capitalization category that is lower than is indicated by its actual capital position if it receives an unsatisfactory examination rating or is deemed to be in an unsafe or unsound condition or to be engaging in unsafe or unsound practices.

Under regulations adopted under these provisions, for an institution to be well capitalized it must have a total risk-based capital ratio of at least 10%, a Tier I risk-based capital ratio of at least 6% and a Tier I leverage ratio of at least 5% and not be subject to any specific capital order or directive. For an institution to be adequately capitalized, it must have a total risk-based capital ratio of at least 8%, a Tier I risk-based capital ratio of at least 4% and a Tier I leverage ratio of at least 4% (or in some cases 3%). Under the regulations, an institution is deemed to be undercapitalized if the bank has a total risk-based capital ratio that is less than 8%, a Tier I risk-based capital ratio that is less than 4% or a Tier I leverage ratio of less than 4% (or in some cases 3%). An institution is deemed to be significantly undercapitalized if the bank has a total risk-based capital ratio that is less than 6%, a Tier I risk-based capital ratio that is less than 3%, or a leverage ratio that is less than 3% and is deemed to be critically undercapitalized if it has a ratio of tangible equity to total assets that is equal to or less than 2%.

Item 1 (Continued)

INTERSTATE BANKING AND BRANCHING LEGISLATION

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the “IBBEA”) authorizes interstate acquisitions of banks and bank holding companies without geographic constraint. The IBBEA also authorized banks to merge with banks located in another state.

After acquiring interstate branches through a merger, a bank may establish additional branches in that state at the same locations as any bank involved in the merger could have established branches under state and federal law. In addition, a bank may establish a de novo branch in another state that expressly permits the establishment of such branches. A bank that establishes a de novo interstate branch may thereafter establish additional branches on the same basis as a bank that has established interstate branches through a merger transaction.

GRAHAM-LEACH-BLILEY ACT

The Graham-Leach-Bliley Act of 1999 (the “GLB Act”) allows new opportunities for banks, other depository institutions, insurance companies and securities firms to combine to form a single financial services organization to offer customers a broader choice of financial products and services. The GLB Act authorized the Federal Reserve Board to oversee all regulatory activities through the financial holding company, while the functional regulation of operating subsidiaries remains with their primary functional regulator. The GLB Act requires institutions to maintain Community Reinvestment Act ratings of satisfactory or higher in order to engage in any new financial activities. This act also established a federal right to privacy of non-public personal information of individual customers.

SARBANES-OXLEY ACT OF 2002

The Sarbanes-Oxley Act of 2002 addresses, among other issues, corporate governance, auditing and accounting, executive compensation, and enhanced and timely disclosure of corporate information. Section 302(a) of Sarbanes-Oxley requires the Bank’s chief executive officer and chief financial officer to certify that the Bank’s Quarterly and Annual Reports do not contain any untrue statement of a material fact. The rules have several requirements, including having these officers certify that: they are responsible for establishing, maintaining and regularly evaluating the effectiveness of the Bank’s internal controls; they have made certain disclosures to the Bank’s auditors and the audit committee of the Board of Directors about the Bank’s internal controls; and they have included information in the Bank’s Quarterly and Annual Reports about their evaluation and whether there have been significant changes in the Bank’s internal controls or in other factors that could significantly affect internal controls subsequent to the evaluation.

Item 1A. Risk Factors

Investments in the Corporation’s common stock involve risk. The market price of the Corporation’s common stock may fluctuate significantly in response to a number of factors, including:

Changes in financial performance

Volatility of stock market prices and volumes

Rumors or erroneous information

Changes in market valuations of similar companies

Changes in interest rates

New developments in the banking industry

Variations in quarterly or annual operating results

Item 1A (Continued)

New litigation or changes in existing litigation

Regulatory actions

Changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other accounting standards setting bodies.

If the Corporation does not adjust to changes in the financial services industry, its financial performance may suffer.

The Corporation’s ability to maintain solid financial performance and return on investment to shareholders will depend in part on its ability to expand its scope of available financial services to its customers. In addition to other banks, competitors include securities dealers, brokers, mortgage bankers, investment advisors, and finance and insurance companies. The increasingly competitive environment is, in part, a result of changes in regulation, changes in technology and product delivery systems, and the accelerating pace of consolidation among financial service providers.

Future governmental regulation and legislation could limit growth. The Corporation and its’ bank subsidiary are subject to extensive state and federal regulation, supervision and legislation that govern nearly every aspect of its operations. Changes to these laws could affect the Corporation’s ability to deliver or expand its services and diminish the value of its business.

Changes in interest rates could reduce income and cash flow. The Corporation’s income and cash flow depends to a great extent on the difference between the interest earned on loans and investment securities, and the interest paid on deposits and other borrowings. Interest rates are beyond the Corporation’s control, and they fluctuate in response to general economic conditions and the policies of various governmental and regulatory agencies, in particular, the Federal Reserve Board. Changes in monetary policy, including changes in interest rates, will influence the origination of loans, the purchase of investments, the generation of deposits and the rates received on loans and investment securities and paid on deposits.

Changes in economic and political conditions could adversely affect the Corporation’s earnings, as our borrowers’ ability to repay loans and the value of the collateral securing our loans decline. Our success depends, to a certain extent, upon economic and political conditions, local and national, as well as governmental monetary policies. Conditions such as inflation, recession, unemployment, changes in interest rates, money supply and other factors beyond our control may adversely affect our asset quality, deposit levels and loan demand and, therefore, our earnings.

Because we have a significant amount of real estate loans, decreases in real estate values could adversely affect the value of property used as collateral. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings. In addition, substantially all of our loans are to individuals and businesses in Ohio. Consequently, a significant decline in the economy in Ohio could have a materially adverse effect on our financial condition and results of operations.

Additional risks and uncertainties could have a negative effect on financial performance.
Additional factors could have a negative effect on the financial performance of the Bank and the Corporation’s common stock. Some of these factors are general economic and financial market conditions, competition, continuing consolidation in the financial services industry, new litigation or changes in existing litigation, regulatory actions, and losses.

Item 2. Properties

Farmers National Banc Corp.’s Properties

The Farmers National Banc Corp. owns no property. Operations are conducted at 20 and 30 South Broad Street, Canfield, Ohio.

Item 2 (Continued)

Bank Property

The Main Office is located at 20 & 30 S. Broad Street, Canfield, Ohio. The other locations of the Bank are:


Office Building		40 & 46 S. Broad St., Canfield, Ohio

Austintown Office		22 N. Niles-Canfield Rd., Youngstown, Ohio

Lake Milton Office		17817 Mahoning Avenue, Lake Milton, Ohio

Cornersburg Office		3619 S. Meridian Rd., Youngstown, Ohio

Colonial Plaza Office		401 E. Main St. Canfield, Ohio

Western Reserve Office		102 W. Western Reserve Rd., Youngstown, Ohio

Salem Office		1858 E. State Street, Salem, Ohio

Columbiana Office		340 State Rt. 14, Columbiana, Ohio

Leetonia Office		16 Walnut St., Leetonia, Ohio

Damascus Office		29053 State Rt. 62 Damascus, Ohio

Poland Office		106 McKinley Way West, Poland, Ohio

Niles Office		1 South Main Street, Niles, Ohio

Niles Drive Up		170 East State Street, Niles, Ohio

Girard Office		121 North State Street, Girard, Ohio

Eastwood Office		5845 Youngstown-Warren Rd, Niles, Ohio

Warren Office		2910 Youngstown-Warren Rd, Warren, Ohio

Mineral Ridge Office		3826 South Main Street, Mineral Ridge, Ohio

Niles Operation Center		51 South Main Street, Niles, Ohio

The bank owns all locations except the Colonial Plaza, which is leased.

Item 3. Legal Proceedings

There are no material pending legal proceedings to which the registrant or its subsidiary is a party or of which any of its property is subject, except proceedings which arise in the ordinary course of business. In the opinion of management, pending legal proceedings will not have a material affect on the consolidated financial position of the registrant or its subsidiary.

Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of security holders through the solicitation of proxies or otherwise during the fourth quarter of 2005.

Part II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

Equity Compensation Plan Information

Number of

securities to be

issued upon

Number of securities

exercise of

Weighted-average

remaining available for future

outstanding

exercise price of

issuance under equity

options,

outstanding

compensation plans

warrants and

options, warrants

(excluding securities

rights

and rights

reflected in column (a))

Plan category

(a)

(b)

(c)

Equity compensation plans approved by security holders

49,500

$11/share

325,400

Information regarding the equity (stock-based) compensation plan is set forth in the registrant’s annual report in Notes A and I in the Notes to Consolidated Financial Statements. This portion of the annual report is incorporated by reference.

Purchases of equity securities by the issuer.

On June 16, 2005, The Corporation announced the adoption of a stock repurchase program that authorizes the re-purchase of up to 4.9% or approximately 637,469 shares of its outstanding common stock in the open market or in privately negotiated transactions. This program expires in June 2006. The following table summarizes the treasury stock purchased by the issuer during the fourth quarter of 2005:


					Total Number of
					Shares Purchased		Maximum Number
			Average		as Part of Publicly		of Shares that May
	Total Number of		Price Paid		Announced		Yet Be Purchased
Period	Shares Purchased		Per Share		Program		Under the Program
Oct. 1-31		14,519	$	13.51		14,519		520,430
Nov. 1-30		43,312		12.96		43,312		477,118
Dec. 1-31		42,500		12.63		42,500		434,618

TOTAL		100,331	$	12.90		100,331

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

During the fiscal years ended December 31, 2005 and December 31, 2004, there were no disagreements between the Corporation and Crowe Chizek and Company LLC (“Crowe Chizek”) on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to Crowe Chizek’s satisfaction, would have caused Crowe Chizek to make reference to the subject matter of the disagreement in connection with its reports on the Corporation’s consolidated financial statements for such periods.

Item 9A. Controls and Procedures

As of the end of the period covered by this report, the Corporation carried out an evaluation, under the supervision and with the participation of the Corporation’s management, including the Corporation’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Corporation’s disclosure controls and procedures. Based on that evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures were effective to ensure that the financial and nonfinancial

Item 9A (Continued)

information required to be disclosed by the Corporation in the reports that it files or submits under the Securities Exchange Act of 1934, including this annual report on Form 10-K for the period ended December 31, 2005, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Management’s responsibilities related to establishing and maintaining effective disclosure controls and procedures include maintaining effective internal controls over financial reporting that are designed to produce reliable financial statements in accordance with accounting principles generally accepted in the United States. As disclosed in the Report on Management’s Assessment of Internal Control Over Financial Reporting on page 16 of our 2005 Annual Report to Shareholders, management assessed the Corporation’s system of internal control over financial reporting as of December 31, 2005, in relation to criteria for effective internal control over financial reporting as described in “Internal Control — Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management believes that, as of December 31, 2005, its system of internal control over financial reporting met those criteria and is effective. Our auditors attested to the fairness of our assessment that we maintained effective internal control over financial reporting and their report is included on page 17 of our Annual Report to Shareholders.

There have been no significant changes in the Corporation’s internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation or material weaknesses in such internal controls requiring corrective actions. As a result, no corrective actions were taken.

Item 9B. Other Information

None.

PART III

Item 10. Directors and Executive Officers of the Registrant

Information relating to Directors is set forth in the registrant’s definitive proxy statement, which will be used in connection with its annual meeting of shareholders which will be held March 30, 2006. The proxy statement is incorporated by reference.

Executive Officers of the Registrant

The names, ages and positions of the executive officers as of March 1, 2006

Officers are elected annually by the Board of Directors immediately following the annual meeting of shareholders. The term of office for all the above executive officers is for the period ending with the next annual meeting.

Principal Occupation and Business Experience of Executive Officers

Mr. Frank L. Paden has served as President and Secretary since March 1996. Prior to that time he was Executive Vice President of the registrant since March 1995, was Executive Vice President of the Bank since March 1995 and has held various other executive positions with the Bank.

Mr. Carl D. Culp has served as Executive Vice President and Treasurer since March 1996. Prior to that time he was Controller of the registrant since November 1995 and was Controller of the Bank since November 1995.

Mr. Donald F. Lukas has served as Senior Vice President of the registrant since March 1996. Prior to that time, he was Vice President of the Bank since March 1987.

Audit Committee Financial Expert

The Board believes that Earl R. Scott and James R. Fisher qualify as “Audit Committee Financial Experts” as that term is defined by applicable SEC rules. In addition, the Board believes that Earl R. Scott and James R. Fisher are “independent” as that term is defined by applicable SEC rules.

Code of Ethics

See Exhibit 14.

Identification of the Audit Committee

Information regarding this item is set forth in the registrant’s definitive proxy statement, which will be used in connection with its annual meeting of shareholders to be held March 30, 2006. The proxy statement is incorporated by reference.

Compliance with Section 16(a) of the Securities Exchange Act

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management

Information relating to this item is set forth in the registrant’s definitive proxy statement, which will be used in connection with its annual meeting of shareholders to be held March 30, 2006. The proxy statement is incorporated by reference.

Item 13. Certain Relationships and Related Transactions

Item 14. Principal Accountant Fees and Services

PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)1. Financial Statements

Item 8., Financial Statements and Supplementary Data is set forth in the registrant’s 2005 Annual Report to
Shareholders and is incorporated by reference in Part II of this report

(a)2. Financial Statement Schedules

No financial statement schedules are presented because they are not applicable.

(a)3. Exhibits

The exhibits filed or incorporated by reference as a part of this report are listed in the Index of Exhibits, which appears at page 12 hereof and is incorporated herein by reference.

(b) Report on Form 8-K

One Form 8-K was filed during the fourth quarter of 2005. The Form 8-K was dated October 21, 2005 and discussed earnings for the third quarter of 2005.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(D) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the under signed, thereunto duly authorized.


Farmers National Banc Corp.		Farmers National Banc Corp.

/s/ Frank L. Paden		/s/ Carl D. Culp

Frank L. Paden		Carl D. Culp
President and Secretary		Executive Vice President and Treasurer
March 14, 2006		March 14, 2006


/s/ Benjamin R. Brown	Director	March 14 2006
Benjamin R. Brown

/s/ Anne Frederick Crawford	Director	March 14 2006
Anne Frederick Crawford

/s/ James R. Fisher	Director	March 14 2006
James R. Fisher

/s/ Joseph D. Lane	Director	March 14 2006
Joseph D. Lane

/s/ Ralph D. Macali	Director	March 14 2006
Ralph D. Macali

/s/ Earl R. Scott	Director	March 14 2006
Earl R. Scott

/s/ Frank L. Paden	President and Director	March 14 2006
Frank L. Paden

/s/ Ronald V. Wertz	Director	March 14 2006
Ronald V. Wertz

INDEX TO EXHIBITS

The following exhibits are filed or incorporated by reference as part of this report:

2. Not applicable.

3(i). The Articles of Incorporation, including amendments thereto for the Registrant. Incorporated by reference to Exhibit 4.1 to Farmers National Banc Corp’s Form S-3 Registration Statement dated October 3, 2001. (File No. 0-12055).

3(ii). The Code of Regulations, including amendments thereto for the Registrant. Incorporated by reference to Exhibit 4.2 to Farmers National Banc Corp’s Form S-3 Registration Statement dated October 3, 2001. (File No. 0-12055).

4. Incorporated by reference to initial filing.

9. Not applicable.

10. Information regarding this item is set forth in the registrant’s definitive proxy statement, which will be used in connection with its annual meeting of shareholders to be held March 30 2006 The proxy statement is incorporated by reference.

11. Refer to Note N in the annual report incorporated by reference.

12. Not applicable.

13. Annual Report to security holders.

14. The Company has adopted a Code of Ethics that applies to the Chief Executive Officer and Chief Financial Officer and complies with the criteria provided in SEC rules. The Code of Ethics is available by calling Corporate Services at 330-533-3341.

16. Not applicable.

18. Not applicable.

21. Farmers National Bank, Canfield, Ohio.

22. Not applicable.

23a. Consent of Crowe Chizek and Company LLC

24. Not applicable.

31.a Certification of Chief Executive Officer (Filed herewith)

31.b Certification of Chief Financial Officer (Filed herewith)

32.a 1350 Certification of Chief Executive Officer (Filed herewith)

32.b 1350 Certification of Chief Financial Officer (Filed herewith)

33. Not applicable

34. Not applicable

35. Not applicable

Copies of any exhibits will be furnished to shareholders upon written request. Request should be directed to Carl D. Culp, Executive Vice President, Farmers National Banc Corp., 20 S. Broad Street, Canfield, Ohio 44406.

Position Held

Frank L. Paden

President and Secretary

Carl D. Culp

Executive Vice President and Treasurer

Donald F. Lukas

Senior Vice President