Securities Sold Under Agreements to Repurchase and Other Short-Term Borrowings

12 Months Ended

Dec. 31, 2011

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER SHORT-TERM BORROWINGS

NOTE 8—SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER

SHORT-TERM BORROWINGS

Securities sold under repurchase agreements are secured by the Bank's holdings of debt securites issued by U.S. government sponsored entities and agencies with a carrying amount of $175.6 million and $166.0 million at year-end 2011 and 2010.

Repurchase agreements are financing arrangements that mature within 89 days. Under the agreements, customers agree to maintain funds on deposit with the Bank and in return acquire an interest in a pool of securities pledged as collateral against the funds. The securities are held in segregated safekeeping accounts at the Federal Reserve Bank and Farmers Trust Company. Information concerning securities sold under agreements to repurchase is summarized as follows:

		September 30,			September 30,			September 30,
	2011			2010			2009
Average balance during the year	$	112,635		$	142,871		$	123,119
Average interest rate during the year		0.24	%		0.58	%		1.49	%
Maximum month-end balance during the year	$	137,234		$	148,765		$	148,765
Weighted average year-end interest rate		0.23	%		0.40	%		1.23	%
Balance at year-end	$	96,988		$	103,753		$	124,313

During 2011, the Bank paid off a short-term U.S. Treasury interest-bearing demand note. The balance was $781 thousand at December 31, 2010. The demand note was interest free at December 31, 2010.

The Bank has access to lines of credit amounting to $24.5 million at two major domestic banks that are below prime rate. The lines and terms are periodically reviewed by the banks and are generally subject to withdrawal at their discretion. There were no borrowings under this line at December 31, 2011 or 2010.

Farmers National Banc Corp has an unsecured $1.5 million revolving line of credit. The line can be renewed annually. The outstanding balance was $1.1 million at December 31, 2011 and 2010. The interest rate is prime with a floor of 4.5%. The interest rate at December 31, 2011 and 2010 was 4.5%.