Farmers National Banc Stock

Farmers National Banc Corp. (Farmers), a financial holding company, operates in the banking, trust, retirement consulting, insurance, and financial management industries. The company operates principally through its wholly-owned subsidiaries, The Farmers National Bank of Canfield (the bank or Farmers Bank), Farmers Trust Company (Farmers Trust), and Farmers National Captive, Inc. (Captive). Farmers National Insurance, LLC (Farmers Insurance) and Farmers of Canfield Investment Co. (Investments or Farmers Investments) are wholly-owned subsidiaries of the bank.

The company is organized as a one-bank holding company under the laws of the state of Ohio and registered under the Bank Holding Company Act of 1956, as amended (the BHCA). Amendments to the BHCA in 1999 allowed for a bank holding company to declare itself a financial holding company and thereby engage in financial activities, including securities underwriting and dealing, insurance agency and underwriting activities, and merchant banking activities. For a bank holding company to be eligible to declare itself a financial holding company, all of the depository institution subsidiaries must be well-capitalized and well-managed and have satisfactory or better ratings under the Community Reinvestment Act.

The company’s principal business consists of owning and supervising its subsidiaries. Although Farmers directs the overall policies of its subsidiaries, including lending practices and financial resources, most day-to-day affairs are managed by their respective officers.

Farmers’ business activities are managed and financial performance is primarily aggregated and reported in two lines of business, the Bank segment and the Trust segment.

The company is a full-service national banking association engaged in commercial and retail banking mainly in Mahoning, Trumbull, Columbiana, Wayne, Holmes, Geauga, Cuyahoga, Medina, Summit, Portage and Stark Counties in Ohio and a location in Beaver County, Pennsylvania. The company’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, travel cards, E Bond transactions, brokerage services and other miscellaneous services normally offered by commercial banks.

Farmers Trust Company

During 2009, the company acquired the Farmers Trust. Farmers Trust offers a full complement of personal and corporate trust services in the areas of estate settlement, trust administration, employee benefit plans and retirement services. During 2019, National Associates Inc. was combined with the Farmers Trust entity. Farmers Trust operates five offices located in Boardman, Canton, Howland, Wooster and Fairview Park, Ohio.

Farmers National Captive, Inc.

Captive is a wholly-owned insurance subsidiary of the company that provides property and casualty insurance coverage to the company and its subsidiaries.

Farmers National Insurance, LLC

Farmers Insurance offers a variety of insurance products through licensed representatives. During 2016, the company completed the acquisition of the Bowers Insurance Agency, Inc. (Bowers).

Farmers of Canfield Investment Company

Farmers Investments with the primary purpose of investing in municipal securities.

Loan Portfolio

As of December 31, 2022, the company’s loan portfolio included commercial real estate loans, such as owner occupied, non-owner occupied, farmland, and other; commercial loans, such as commercial and industrial, and agricultural; residential real estate loans, such as 1-4 family residential, and home equity lines of credit; and consumer loans, such as indirect, direct, and other.

Investment Portfolio

As of December 31, 2022, the company’s investment portfolio included U.S. Treasury and U.S. government sponsored entities; state and political subdivisions; corporate bonds; mortgage-backed securities – residential; collateralized mortgage obligations; and Small Business Administration.

Deposits

As of December 31, 2022, the company’s deposits included noninterest-bearing demand; interest-bearing demand; money market; savings; brokered time deposits; and certificates of deposit

Supervision and Regulation

The company is elected to be a financial holding company. As a financial holding company, the company is subject to regulation under the Bank Holding Company Act of 1956, as amended (the BHCA) and to inspection, examination and supervision by the Board of Governors of the Federal Reserve System (the Federal Reserve Board).

A bank holding company may elect to become a financial holding company if each of its subsidiary banks is well capitalized under the prompt corrective action regulations of the Federal Deposit Insurance Corporation (the FDIC), is well managed, and has at least a satisfactory rating under the Community Reinvestment Act of 1977 (the CRA).

The bank is subject to regulation and examination primarily by the Office of the Comptroller of the Currency (the OCC) and secondarily by the Federal Deposit Insurance Corporation (the FDIC). The bank is also subject to certain restrictions imposed by the Federal Reserve Act and Federal Reserve Board regulations regarding such matters as the maintenance of reserves against deposits, extensions of credit to Farmers or any of its subsidiaries, investments in the stock or other securities of Farmers or its subsidiaries and the taking of such stock or securities as collateral for loans to any borrower.

Farmers’ non-banking subsidiaries are also subject to regulation by the Federal Reserve Board and other applicable federal and state agencies. In particular, Farmers Insurance is subject to regulation by the Ohio Department of Insurance, which requires, amongst other things, the education and licensing of agencies and individual agents and imposes business conduct rules. The company is also under the regulation and supervision of the Commission and certain state securities commissions for matters relating to the offering and sale of its securities. The company is subject to disclosure and regulatory requirements of the Securities Act of 1933, as amended (the Securities Act), and the Exchange Act, and the regulations promulgated thereunder. Farmers common shares are listed on the NASDAQ under the symbol FMNB and the company is subject to the rules for NASDAQ listed companies.

Farmers Bank is a member of the Federal Home Loan Bank of Cincinnati (the FHLB), which provides credit to its members in the form of advances. As a member of the FHLB, the bank must maintain an investment in the capital stock of the FHLB in a specified amount. The bank’s deposits are insured up to applicable limits by the DIF of the FDIC and subject to deposit insurance assessments to maintain the DIF.

As a financial holding company, Farmers’ activities are subject to extensive regulation by the Federal Reserve Board under the BHCA. Generally, in addition to the BHCA limits of banking, managing or controlling banks and other activities that the Federal Reserve Board has determined to be closely related to banking, financial holding company activities may include securities underwriting and dealing, insurance agency and underwriting activities and merchant banking activities.

As a national banking association, the bank is subject to regulation under the National Banking Act and is periodically examined by the OCC. The bank is subject, as a member bank, to certain rules and regulations of the Federal Reserve Board, many of which restrict activities and prescribe documentation to protect consumers. The bank is also an insured institution as a member of the DIF. As a result, it is subject to regulation and deposit insurance assessments by the FDIC.

Substantially all of the deposits of the bank are insured up to applicable limits by the DIF of the FDIC, and Farmers Bank is assessed deposit insurance premiums to maintain the DIF. The general insurance limit is $250,000 per separately insured depositor. This insurance is backed by the full faith and credit of the U.S. Government. Insurance premiums for each insured institution are determined based upon the institution’s capital level and supervisory rating provided to the FDIC by the institution’s primary federal regulator and other information deemed by the FDIC to be relevant to the risk posed to the DIF by the institution.

History

Farmers National Banc Corp. was founded in 1887. The company was incorporated in 1982.