CANFIELD, Ohio--(BUSINESS WIRE)-- Farmers National Banc Corp. (OTCBB: FMNB), today reported consolidated net income for the quarter ended March 31, 2009 of $1.684 million, or $0.13 per share, compared to $1.408 million, or $0.11 per share in the preceding quarter and $1.724 million, or $0.13 per share earned the same three month period ended March 31, 2008. Annualized return on average equity and average assets for the first quarter of 2009 was 8.77% and .76%, respectively. This compares to 9.29% and .85% for the same period in 2008.

"We are pleased with the performance recorded for this first quarter of 2009," stated Frank L. Paden, President & CEO. "Our business model continues to gain momentum following another quarter of strong organic growth. Excluding the one time merger related expenses, our net income for the quarter would have been one of the better performing quarters in the past few years. Despite this challenging economic environment, our management team set some aggressive plans for 2009 and continues to remain focused on executing our business plan. Our challenges for the future quarters have to deal with finding ways to minimize the impact of the anticipated special assessment for FDIC insurance premium; be proactive in managing asset quality issues; and continue to develop relationships to grow our core business lines. Lastly, we look forward to fully integrating Farmers Trust Company into our Corporation to better differentiate our community bank from the competition."

The company's total assets recorded at March 31, 2009 were $939.360 million an increase of 13% over $831.477 million in total assets recorded at this same time in 2008. On March 31, 2009, net loans were $563.660 million compared to $499.828 million in March 2008, representing a 12.8% increase. Total deposits at March 31, 2009 were $675.602 million, a 6.8% increase from $632.350 million recorded at March 31, 2008.

Net Interest Income --- for the first quarter of 2009, net interest income increased $1.849 million, or 31.7%, from the same three-month period in 2008. The increase was attributable to a higher net interest margin. Throughout 2008 and the beginning of 2009, the net interest margin increased due to the balance sheet being positioned to benefit from the declining interest rate environment, which produced a greater decrease in the cost of funds than the yield on earning assets. As a result, the annualized net interest margin, on a fully taxable equivalent basis was 3.90% for the three months ended March 31, 2009, compared to 3.33% for the same period the prior year.

Non-Interest Income --- Non-interest income was $1.118 million in the first quarter of 2009, compared to $1.395 million in the first quarter of 2008. There was not any one category that caused this $277 thousand decrease. It was a combination of lower fee income and commissions.

Operating Expenses --- Non-interest expenses totaled $6.256 million for the first quarter of 2009, which compares to $5.006 million for the first quarter of 2008. This quarter's results include $455 thousand of merger-related expenses attributable to the Corporation's purchase of Butler Wick Trust Company from Butler Wick Corp. that closed on March 31, 2009. In addition, during this past quarter, we did experience additional expenses for legal services, collection expenses and increases in FDIC insurance premiums.

Asset Quality --- For the three months ended March 31, 2009, management provided $450 thousand to the allowance for loan losses, an increase of $340 thousand from the same period the prior year. The ratio of nonperforming loans to total loans increased from .46% at March 31, 2008 to 1.68% at March 31, 2009. As of March 31, 2009, total non-performing loans were $9.6 million, compared to $2.3 million at this same time in 2008. This increase in non-performing loans is primarily due to the classification of certain commercial real estate and land development loans that are in default according to the terms of the contract. On March 31, 2009, the ratio of the allowance for loan losses (ALLL) to non-performing loans was 61%, compared to 232% in March 2008. Based on the evaluation of the adequacy of the allowance for loan losses, management believes that the allowance for loan losses at March 31, 2009 was adequate and reflects probable incurred losses in the portfolio. As of March 31, 2009, the ALLL/total loan ratio was 1.02% compared to 1.08% at March 31, 2008. The reduction in this particular ratio is attributable to the increase in total loans outstanding, which increased approximately $64 million from March 2008 to March 2009. Increases in net loan losses are reflected in the increased loan loss provision expense made during the first quarter of 2009.

Equity - Total shareholder equity was $78.527 million as of March 31, 2009, compared to $75.789 million in March 2008. This represents a 3.6% increase. Shareholders received a $0.12 per share cash dividend on March 31, 2009. Book value increased from $5.79 per share in March 2008 to $5.89 per share on March 31, 2009.

Farmers National Banc Corp. is the bank holding company for the Farmers National Bank of Canfield and Farmers Trust Company. Farmers operates sixteen banking offices throughout Mahoning, Trumbull and Columbiana Counties and two trust offices located in Youngstown and Howland. The bank offers a wide range of banking and investment services to companies and individuals, and maintains a website at www.fnbcanfield.com.

This earnings announcement presents a brief analysis of the assets and liability structure of the Corporation and a brief discussion of the results of operations for each of the periods presented. Certain statements in this announcement that relate to Farmers National Banc Corp.'s plans, objectives, or future performance may be deemed to be forward-looking statements within the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations. Actual strategies and results in future periods may differ materially from those currently expected because of various risks and uncertainties.

Among the important factors that could cause actual results to differ materially are interest rates, changes in the mix of the company's business, competitive pressures, general economic conditions and the risk factors detailed in the company's other periodic reports and registration statements filed with the Securities and Exchange Commission.

Farmers National Banc Corp. and Subsidiaries

Consolidated Financial Highlights

(Amounts in thousands, except per share data)

Consolidated Statements of Income               For the Three Months Ended

                                                March 31, 2009  March 31, 2008

Total interest income                           $11,994         $11,198

Total interest expense                          4,311           5,364

Net interest income                             7,683           5,834

Provision for loan losses                       450             110

Other income                                    1,118           1,395

Other expense                                   6,256           5,006

Income before income taxes                      2,095           2,113

Income taxes                                    411             389

Net income                                      $1,684          $1,724

Basic and diluted earnings per share            $0.13           $0.13

Cash dividends                                  1,588           2,078

Cash dividends per share                        0.12            0.16

Book value per share                            5.88            5.79

Consolidated Statements of Financial Condition  March 31, 2009  March 31, 2008

Assets

Cash and cash equivalents                       $57,218         $52,571

Securities available for sale                   270,970         241,152

Loans                                           569,495         505,285

Less allowance for loan losses                  5,835           5,457

Net Loans                                       563,660         499,828

Other assets                                    47,512          37,926

Total Assets                                    $939,360        $831,477

Liabilities and Stockholders' Equity

Deposits                                        $675,602        $632,350

Other interest-bearing liabilities              180,548         119,386

Other liabilities                               4,753           3,952

Total liabilities                               860,903         755,688

Stockholders' Equity                            78,457          75,789

Total Liabilities and Stockholders' Equity      $939,360        $831,477

Period-end shares outstanding                   13,338          13,093

Ratios

Return on Average Assets (Annualized)           0.76%           0.85%

Return on Average Equity (Annualized)           8.77            9.29

Efficiency Ratio (Year-to-date on a tax         67.47           66.27
equivalent basis)

Capital to Asset Ratio                          8.35            9.11

Dividends to Net Income (Year-to-date)          94.30           120.53

Net Loans to Assets                             60.00           60.11

Loans to Deposits                               84.29           79.91

Allowance for Loan Losses to Total Loans        1.02            1.08

Non-performing Loans to Total Loans             1.68            0.46

Unaudited

    Source: Farmers National Banc Corp.

Contact: Farmers National Banc Corp. Frank L. Paden, President, 330-533-3341 330-533-0451 (FAX) Email: exec@fnbcanfield.com