10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the Quarterly period ended March 31, 2015

Commission file number 001-35296

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, OH	44406
(Address of principal executive offices)	(Zip Code)

(330) 533-3341

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at April 30, 2015
Common Stock, No Par Value	18,408,612 shares

		Page Number
PART I - FINANCIAL INFORMATION
Item 1	Financial Statements (Unaudited)
	Included in Part I of this report:
	Farmers National Banc Corp. and Subsidiaries
	Consolidated Balance Sheets	2
	Consolidated Statements of Income	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Statements of Cash Flows	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4	Controls and Procedures	33
PART II - OTHER INFORMATION		34
Item 1	Legal Proceedings	34
Item 1A	Risk Factors	34
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3	Defaults Upon Senior Securities	34
Item 4	Mine Safety Disclosures	34
Item 5	Other Information	34
Item 6	Exhibits	35
SIGNATURES		36
10-Q Certifications
Section 906 Certifications

1

CONSOLIDATED BALANCE SHEETS

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

(Unaudited)	(InThousands of Dollars)
	March 31, 2015			December 31, 2014
ASSETS
Cash and due from banks	$	11,800		$	11,410
Federal funds sold and other		15,129			16,018
TOTAL CASH AND CASH EQUIVALENTS		26,929			27,428
Securities available for sale		369,919			389,829
Loans held for sale		146			511
Loans		673,784			663,852
Less allowance for loan losses		7,723			7,632
NET LOANS		666,061			656,220
Premises and equipment, net		16,963			17,049
Goodwill		5,591			5,591
Other intangibles		3,055			3,222
Bank owned life insurance		22,506			16,367
Other assets		22,481			20,750
TOTAL ASSETS	$	1,133,651		$	1,136,967
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	174,112		$	184,697
Interest-bearing		735,296			731,006
TOTAL DEPOSITS		909,408			915,703
Short-term borrowings		62,218			59,136
Long-term borrowings		18,120			28,381
Other liabilities		17,134			10,187
TOTAL LIABILITIES		1,006,880			1,013,407
Commitments and contingent liabilities
Stockholders' Equity:
Common Stock - Authorized 35,000,000 shares; issued 19,031,059		106,079			106,021
Retained earnings		22,603			20,944
Accumulated other comprehensive income		2,587			1,093
Treasury stock, at cost; 622,447 shares		(4,498	)		(4,498	)
TOTAL STOCKHOLDERS' EQUITY		126,771			123,560
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,133,651		$	1,136,967

See accompanying notes

2

CONSOLIDATED STATEMENTS OF INCOME

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

	(In Thousands except Per Share Data)
(Unaudited)	For the Three Months Ended
	March 31, 2015		March 31, 2014
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	7,684	$	7,484
Taxable securities		1,647		1,871
Tax exempt securities		615		656
Dividends		48		47
Federal funds sold and other interest income		5		5
TOTAL INTEREST AND DIVIDEND INCOME		9,999		10,063
INTEREST EXPENSE
Deposits		887		1,061
Short-term borrowings		11		11
Long-term borrowings		109		135
TOTAL INTEREST EXPENSE		1,007		1,207
NET INTEREST INCOME		8,992		8,856
Provision for loan losses		450		330
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		8,542		8,526
NONINTEREST INCOME
Service charges on deposit accounts		603		590
Bank owned life insurance income		139		107
Trust fees		1,647		1,497
Insurance agency commissions		146		95
Security gains		10		0
Retirement plan consulting fees		504		364
Investment commissions		298		194
Net gains on sale of loans		123		65
Other operating income		567		521
TOTAL NONINTEREST INCOME		4,037		3,433
NONINTEREST EXPENSES
Salaries and employee benefits		5,542		5,022
Occupancy and equipment		1,111		1,153
State and local taxes		245		233
Professional fees		476		592
Merger related cost		245		0
Advertising		217		203
FDIC insurance		177		184
Intangible amortization		167		192
Core processing charges		381		361
Other operating expenses		1,190		1,201
TOTAL NONINTEREST EXPENSES		9,751		9,141
INCOME BEFORE INCOME TAXES		2,828		2,818
INCOME TAXES		617		627
NET INCOME	$	2,211	$	2,191
EARNINGS PER SHARE - basic and diluted	$	0.12	$	0.12

See accompanying notes

3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

(Unaudited)	(In Thousands of Dollars)
	For the Three Months Ended
	March 31, 2015			March 31, 2014
NET INCOME	$	2,211		$	2,191
Other comprehensive income:
Net unrealized holding gains on available for sale securities		2,310			4,087
Reclassification adjustment for (gains) losses realized in income		(10	)		0
Net unrealized holding gains		2,300			4,087
Income tax effect		(806	)		(1,432	)
Other comprehensive income, net of tax		1,494			2,655
TOTAL COMPREHENSIVE INCOME	$	3,705		$	4,846

See accompanying notes

4

CONSOLIDATED STATEMENTS OF CASH FLOWS

FARMERS NATIONAL BANC CORP. AND SUBSIDIARIES

	(In Thousands of Dollars)
(Unaudited)	Three Months Ended
	March 31, 2015			March 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,211		$	2,191
Adjustments to reconcile net income to net cash from operating activities:
Provision for loan losses		450			330
Depreciation and amortization		467			498
Net amortization of securities		363			330
Security gains		(10	)		0
Stock compensation expense		58			0
Loss on sale of other real estate owned		13			0
Earnings on bank owned life insurance		(139	)		(107	)
Origination of loans held for sale		(3,509	)		(3,557	)
Proceeds from loans held for sale		3,997			2,754
Net gains on sale of loans		(123	)		(65	)
Net change in other assets and liabilities		(2,913	)		(2,046	)
NET CASH FROM OPERATING ACTIVITIES		865			328
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and repayments of securities available for sale		11,420			10,332
Proceeds from sales of securities available for sale		40,913			9
Purchases of securities available for sale		(23,182	)		(11,022	)
Loan originations and payments, net		(10,413	)		3,967
Proceeds from sale of other real estate owned		113			17
Purchase of bank owned life insurance		(6,000	)		0
Additions to premises and equipment		(189	)		(472	)
NET CASH FROM INVESTING ACTIVITIES		12,662			2,831
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits		(6,295	)		7,817
Net change in short-term borrowings		3,082			(8,364	)
Repayment of Federal Home Loan Bank borrowings and other debt		(25,261	)		(260	)
New Federal Home Loan Bank advance borrowings		15,000			0
Cash dividends paid		(552	)		(564	)
Proceeds from reissuance of treasury shares		0			32
NET CASH FROM FINANCING ACTIVITIES		(14,026	)		(1,339	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(499	)		1,820
Beginning cash and cash equivalents		27,428			27,513
Ending cash and cash equivalents	$	26,929		$	29,333
Supplemental cash flow information:
Interest paid	$	1,031		$	1,209
Income taxes paid	$	300		$	0
Supplemental noncash disclosures:
Transfer of loans to other real estate	$	122		$	20
Security purchases not settled	$	7,298		$	202

See accompanying notes

5

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Principles of Consolidation:

Farmers National Banc Corp. (“Company”) is a one-bank holding company registered under the Bank Holding Company Act of 1956, as amended. The Company provides full banking services through its nationally chartered subsidiary, The Farmers National Bank of Canfield (“Bank”). The Company provides trust services through its subsidiary, Farmers Trust Company (“Trust”), retirement consulting services through National Associates, Inc. (“NAI”) and insurance services through the Bank’s subsidiary, Farmers National Insurance (“Insurance”).  In addition to the Insurance subsidiary, the Bank has created Farmers of Canfield Investment Co. (“Investments”), with the primary purpose of investing in municipal securities. The consolidated financial statements include the accounts of the Company, the Bank and its subsidiaries, along with the Trust and NAI. All significant intercompany balances and transactions have been eliminated in the consolidation.

Basis of Presentation:

The unaudited condensed consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2014 Annual Report to Shareholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The interim consolidated financial statements include all adjustments (consisting of only normal recurring items) that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods presented. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year. Certain items included in the prior period financial statements were reclassified to conform to the current period presentation. There was no effect on net income or total stockholders’ equity.

Estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Segments:

The Company provides a broad range of financial services to individuals and companies in northeastern Ohio. Operations are managed and financial performance is primarily aggregated and reported in three lines of business, the Bank segment, the Trust segment and the Retirement Consulting segment.  

Comprehensive Income:

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income consists of unrealized gains and losses on securities available for sale and changes in the funded status of the post-retirement health plan, which are recognized as separate components of equity, net of tax effects. For the three month period ended March 31, 2015, there was no change in the funded status of the post-retirement health plan.

6

Securities:

The following table summarizes the amortized cost and fair value of the available-for-sale investment securities portfolio at March 31, 2015 and December 31, 2014 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income:

			Gross		Gross
(In Thousands of Dollars)	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
March 31, 2015
U.S. Treasury and U.S. government sponsored entities	$	18,812	$	401	$	(7	)	$	19,206
State and political subdivisions		94,081		1,890		(393	)		95,578
Corporate bonds		935		9		(3	)		941
Mortgage-backed securities - residential		215,561		3,431		(688	)		218,304
Collateralized mortgage obligations		14,872	0			(507	)		14,365
Small Business Administration		21,745		1		(463	)		21,283
Equity securities		121		123		(2	)		242
Totals	$	366,127	$	5,855	$	(2,063	)	$	369,919

			Gross		Gross
(In Thousands of Dollars)	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
December 31, 2014
U.S. Treasury and U.S. government sponsored entities	$	24,515	$	418	$	(112	)	$	24,821
State and political subdivisions		90,369		2,183		(671	)		91,881
Corporate bonds		936		3		(8	)		931
Mortgage-backed securities - residential		223,216		2,395		(1,249	)		224,362
Collateralized mortgage obligations		25,988		98		(911	)		25,175
Small Business Administration		23,193		1		(775	)		22,419
Equity securities		120		121		(1	)		240
Totals	$	388,337	$	5,219	$	(3,727	)	$	389,829

Proceeds from the sale of portfolio securities were $40.9 million during the three month period ended March 31, 2015. Gross gains of $73 thousand and gross losses of $63 thousand were realized on these sales during the three month period ended March 31, 2015. Proceeds from the sale of portfolio securities were $9  thousand during the three month period ended March 31, 2014, with no gains or losses realized.  

The amortized cost and fair value of the debt securities portfolio are shown by expected maturity. Expected maturities may differ from contractual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	March 31, 2015
(In Thousands of Dollars)	Amortized Cost		Fair Value
Maturity
Within one year	$	11,824	$	11,931
One to five years		53,858		54,858
Five to ten years		32,934		33,692
Beyond ten years		15,212		15,244
Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities		252,178		253,952
Total	$	366,006	$	369,677

7

The following table summarizes the investment securities with unrealized losses at March 31, 2015 and December 31, 2014, aggregated by major security type and length of time in a continuous unrealized loss position.

	Less than 12 Months					12 Months or Longer					Total
(In Thousands of Dollars)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
March 31, 2015
Available-for-sale
U.S. Treasury and U.S. government sponsored entities	$	0	$	0		$	5,202	$	(7	)	$	5,202	$	(7	)
State and political subdivisions		4,619		(29	)		16,437		(364	)		21,056		(393	)
Corporate bonds		0		0			480		(3	)		480		(3	)
Mortgage-backed securities - residential		14,859		(105	)		47,348		(583	)		62,207		(688	)
Collateralized mortgage obligations		0		0			14,365		(507	)		14,365		(507	)
Small Business Administration		0		0			21,188		(463	)		21,188		(463	)
Equity securities		23		(2	)		0		0			23		(2	)
Total	$	19,501	$	(136	)	$	105,020	$	(1,927	)	$	124,521	$	(2,063	)

	Less than 12 Months					12 Months or Longer					Total
(In Thousands of Dollars)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
December 31, 2014
Available-for-sale
U.S. Treasury and U.S. government sponsored entities	$	498	$	(2	)	$	10,159	$	(110	)	$	10,657	$	(112	)
State and political subdivisions		987		(11	)		24,063		(660	)		25,050		(671	)
Corporate bonds		0		0			476		(8	)		476		(8	)
Mortgage-backed securities - residential		25,770		(202	)		55,576		(1,047	)		81,346		(1,249	)
Collateralized mortgage obligations		0		0			19,541		(911	)		19,541		(911	)
Small Business Administration		0		0			22,319		(775	)		22,319		(775	)
Equity securities		26		(1	)		0		0			26		(1	)
Total	$	27,281	$	(216	)	$	132,134	$	(3,511	)	$	159,415	$	(3,727	)

Other-Than-Temporary-Impairment

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Investment securities are generally evaluated for OTTI under FASB Accounting Standards Codification (“ASC”) 320, Investments – Debt and Equity Securities. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, whether the market decline was affected by macroeconomic conditions and whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal government or its agencies, or U.S. government sponsored enterprises, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income or loss. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

As of March 31, 2015, the Company’s security portfolio consisted of 321 securities, 82 of which were in an unrealized loss position. The majority of the unrealized losses on the Company’s securities are related to its holdings of mortgage-backed securities,

8

collateralized mortgage obligations, state and political subdivision securities, and Small Business Administration securities as discussed below.

Unrealized losses on debt securities issued by state and political subdivisions have not been recognized into income. Generally these securities have maintained their investment grade ratings and management does not have the intent and does not expect to be required to sell these securities before their anticipated recovery. The fair value is expected to recover as the securities approach their maturity date.

All of the Company’s holdings of collateralized mortgage obligations and residential mortgage-backed securities were issued by U.S. government-sponsored entities. Unrealized losses on these securities have not been recognized into income. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, the issues are guaranteed by the issuing entity and which the U.S. government has affirmed its commitment to support, and because the Company does not have the intent to sell these residential mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be OTTI.

Management does not believe any unrealized losses on Small Business Administration securities represent an other-than-temporary impairment. The securities are issued and backed by the full faith and credit of the U.S. government and the Company does not have the intent to sell these securities before their anticipated recovery. The fair value of these securities is expected to recover as they approach their maturity.

Loans:

Loan balances were as follows:

(In Thousands of Dollars)	March 31, 2015			December 31, 2014
Commercial real estate
Owner occupied	$	77,720		$	74,829
Non-owner occupied		125,254			122,228
Other		29,016			26,137
Commercial		122,762			120,493
Residential real estate
1-4 family residential		154,076			153,055
Home equity lines of credit		32,310			31,255
Consumer
Indirect		118,065			120,931
Direct		8,888			9,071
Other		3,552			3,626
Subtotal	$	671,643		$	661,625
Net deferred loan costs		2,141			2,227
Allowance for loan losses		(7,723	)		(7,632	)
Net loans	$	666,061		$	656,220

The following tables present the activity in the allowance for loan losses by portfolio segment for the three month periods ended March 31, 2015 and 2014:

Three Months Ended March 31, 2015

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	2,676		$	1,420		$	1,689		$	1,663		$	184		$	7,632
Provision for loan losses		232			(70	)		10			352			(74	)		450
Loans charged off		(4	)		0			(81	)		(533	)		0			(618	)
Recoveries		13			1			22			223			0			259
Total ending allowance balance	$	2,917		$	1,351		$	1,640		$	1,705		$	110		$	7,723

9

Three Months Ended March 31, 2014

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses
Beginning balance	$	2,752		$	1,219		$	1,964		$	1,419		$	214	$	7,568
Provision for loan losses		22			(162	)		(228	)		518			180		330
Loans charged off		(57	)		0			(70	)		(709	)		0		(836	)
Recoveries		34			8			15			268			0		325
Total ending allowance balance	$	2,751		$	1,065		$	1,681		$	1,496		$	394	$	7,387

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of March 31, 2015 and December 31, 2014. The recorded investment in loans includes the unpaid principal balance and unamortized loan origination fees and costs, but excludes accrued interest receivable, which is not considered to be material:

March 31, 2015

(In Thousands of Dollars)	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to    loans:
Individually evaluated for impairment	$	735	$	219	$	101	$	0	$	0	$	1,055
Collectively evaluated for impairment		2,182		1,132		1,539		1,705		110		6,668
Total ending allowance balance	$	2,917	$	1,351	$	1,640	$	1,705	$	110	$	7,723
Loans:
Loans individually evaluated for    impairment	$	7,080	$	1,088	$	3,608	$	100	$	0	$	11,876
Loans collectively evaluated for    impairment		224,240		121,335		182,326		134,007		0		661,908
Total ending loans balance	$	231,320	$	122,423	$	185,934	$	134,107	$	0	$	673,784

December 31, 2014

(In Thousands of Dollars)	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to    loans:
Individually evaluated for impairment	$	514	$	272	$	88	$	0	$	0	$	874
Collectively evaluated for impairment		2,162		1,148		1,601		1,663		184		6,758
Total ending allowance balance	$	2,676	$	1,420	$	1,689	$	1,663	$	184	$	7,632
Loans:
Loans individually evaluated for    impairment	$	7,139	$	1,940	$	3,425	$	93	$	0	$	12,597
Loans collectively evaluated for    impairment		215,434		118,210		180,428		137,183		0		651,255
Total ending loans balance	$	222,573	$	120,150	$	183,853	$	137,276	$	0	$	663,852

10

The following tables present information related to impaired loans by class of loans as of March 31, 2015 and December 31, 2014:

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
March 31, 2015
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,437	$	2,302	$	0
Non-owner occupied		385		384		0
Commercial		440		419		0
Residential real estate
1-4 family residential		2,360		2,137		0
Home equity lines of credit		296		281		0
Consumer		175		100		0
Subtotal		6,093		5,623		0
With an allowance recorded:
Commercial real estate
Owner occupied		2,870		2,863		671
Non-owner occupied		1,532		1,531		64
Commercial		686		669		219
Residential real estate
1-4 family residential		1,126		1,101		98
Home equity lines of credit		89		89		3
Subtotal		6,303		6,253		1,055
Total	$	12,396	$	11,876	$	1,055

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
December 31, 2014
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,448	$	2,318	$	0
Non-owner occupied		391		391		0
Commercial		531		511		0
Residential real estate
1-4 family residential		2,421		2,156		0
Home equity lines of credit		476		251		0
Consumer		185		93		0
Subtotal		6,452		5,720		0
With an allowance recorded:
Commercial real estate
Owner occupied		2,882		2,882		446
Non-owner occupied		1,548		1,548		68
Commercial		1,444		1,429		272
Residential real estate
1-4 family residential		944		928		85
Home equity lines of credit		90		90		3
Subtotal		6,908		6,877		874
Total	$	13,360	$	12,597	$	874

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The following table presents the average recorded investment in impaired loans by class and interest income recognized by loan class for the three month periods ended March 31, 2015 and 2014:

	Average Recorded Investment				Interest Income Recognized
	For Three Months Ended March 31,				For Three Months Ended March 31,
(In Thousands of Dollars)	2015		2014		2015		2014
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,311	$	2,575	$	16	$	5
Non-owner occupied		387		391		6		0
Other		0		0		0		0
Commercial		463		931		6		5
Residential real estate
1-4 family residential		2,125		1,332		31		14
Home equity lines of credit		251		115		3		2
Consumer		91		239		4		0
Subtotal		5,628		5,583		66		26
With an allowance recorded:
Commercial real estate
Owner occupied		2,870		1,654		24		25
Non-owner occupied		1,537		1,586		20		20
Commercial		1,117		1,391		1		1
Residential real estate
1-4 family residential		983		1,390		9		11
Home equity lines of credit		90		146		1		1
Consumer		-		0		0		0
Subtotal		6,597		6,167		55		58
Total	$	12,225	$	11,750	$	121	$	84

Cash basis interest recognized during the three month periods ended March 31, 2015 and 2014 was materially equal to interest income recognized.

Nonaccrual loans and loans past due 90 days or more still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The following table presents the recorded investment in nonaccrual and loans past due 90 days or more still on accrual by class of loans as of March 31, 2015 and December 31, 2014:

	March 31, 2015				December 31, 2014
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing		Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Commercial real estate
Owner occupied	$	3,259	$	0	$	3,315	$	44
Non-owner occupied		38		0		41		0
Commercial		833		0		1,645		0
Residential real estate
1-4 family residential		2,946		289		2,742		195
Home equity lines of credit		170		79		139		40
Consumer
Indirect		88		200		90		193
Direct		32		0		36		0
Other		0		5		0		1
Total	$	7,366	$	573	$	8,008	$	473

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The following table presents the aging of the recorded investment in past due loans as of March 31, 2015 and December 31, 2014 by class of loans:

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
March 31, 2015
Commercial real estate
Owner occupied	$	0	$	0	$	3,259	$	3,259	$	74,246	$	77,505
Non-owner occupied		0		0		38		38		124,891		124,929
Other		0		0		0		0		28,886		28,886
Commercial		145		0		833		978		121,445		122,423
Residential real estate
1-4 family residential		1,677		422		3,235		5,334		148,289		153,623
Home equity lines of credit		138		81		249		468		31,843		32,311
Consumer
Indirect		1,447		347		288		2,082		119,585		121,667
Direct		37		27		32		96		8,792		8,888
Other		19		3		5		27		3,525		3,552
Total	$	3,463	$	880	$	7,939	$	12,282	$	661,502	$	673,784

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
December 31, 2014
Commercial real estate
Owner occupied	$	0	$	0	$	3,359	$	3,359	$	71,272	$	74,631
Non-owner occupied		0		0		41		41		121,872		121,913
Other		0		0		0		0		26,029		26,029
Commercial		0		0		1,645		1,645		118,505		120,150
Residential real estate								0				-
1-4 family residential		1,892		546		2,937		5,375		147,223		152,598
Home equity lines of credit		205		92		179		476		30,779		31,255
Consumer								0				-
Indirect		2,136		406		283		2,825		121,754		124,579
Direct		108		18		36		162		8,909		9,071
Other		17		6		1		24		3,602		3,626
Total	$	4,358	$	1,068	$	8,481	$	13,907	$	649,945	$	663,852

Troubled Debt Restructurings:

Total troubled debt restructurings were $8.2 million and $8.1 million at March 31, 2015 and December 31, 2014, respectively. The Company has allocated $247 thousand and $242 thousand of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of March 31, 2015 and December 31, 2014. There were $11 thousand and $25 thousand in commitments to lend additional amounts to borrowers with loans that were classified as troubled debt restructurings at March 31, 2015 and December 31, 2014.

During the three month periods ended March 31, 2015 and 2014, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a deferral of principal payments; or a legal concession.

Troubled debt restructuring modifications involved a reduction of the notes stated interest rate in the range of 0.87% and 2.75%. There were also extensions of the maturity dates on these and other troubled debt restructurings in the range of 9 months to 120 months.

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The following table presents loans by class modified as troubled debt restructurings that occurred during the three month periods ended March 31, 2015 and 2014:

			Pre-Modification		Post-Modification
Three Months Ended March 31, 2015	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Troubled Debt Restructurings:
Commercial		1	$	8	$	8
Residential real estate
1-4 family residential		3		354		354
Home equity lines of credit		1		50		50
Indirect		2		36		36
Total		7	$	448	$	448

			Pre-Modification		Post-Modification
Three Months Ended March 31, 2014	Number of		OutstandingRecorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Troubled Debt Restructurings:
Non-owner occupied		1	$	35	$	35
Residential real estate
1-4 family residential		9		393		394
Home equity lines of credit		2		52		52
Total		12	$	480	$	481

There were $35 thousand in charge offs and a $33 thousand increase to the provision for loan losses during the three month period ended March 31, 2015, as a result of troubled debt restructurings.  There were no charge offs and a $26 thousand increase to the provision for loan losses during the three month period ended March 31, 2014.

There was one residential real estate loan for which there were payment defaults within twelve months following the modification of the troubled debt restructuring during the three month period ended March 31, 2015.  This loan was past due at March 31, 2015.  There was a $23 thousand provision to the loan losses as a result of this default during 2015.  A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

There were four indirect loans modified as troubled debt restructuring for which there were payments defaults within twelve months following the modification during the three month period ended March 31, 2014. Two of the four loans were past due at March 31, 2014.  There was one loan charged off during the three month period ended March 31, 2014.  There was a $1 thousand provision to the allowance for loan losses associated with these loans. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company establishes a risk rating at origination for all commercial loan and commercial real estate relationships. For relationships over $750 thousand, management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt. Management also affirms the risk ratings for the loans and leases in their respective portfolios on an annual basis. The Company uses the following definitions for risk ratings:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Substandard loans are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

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Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

As of March 31, 2015 and December 31, 2014, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Doubtful		Not Rated		Total
March 31, 2015
Commercial real estate
Owner occupied	$	70,516	$	1,022	$	5,967	$	0	$	0	$	77,505
Non-owner occupied		121,781		487		2,661		0		0		124,929
Other		28,572		0		314		0		0		28,886
Commercial		118,227		1,519		2,677		0		0		122,423
Total	$	339,096	$	3,028	$	11,619	$	0	$	0	$	353,743

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Doubtful		Not Rated		Total
December 31, 2014
Commercial real estate
Owner occupied	$	66,036	$	2,534	$	6,061	$	0	$	0	$	74,631
Non-owner occupied		115,159		3,760		2,994		0		0		121,913
Other		25,710		0		319		0		0		26,029
Commercial		114,409		1,566		4,175		0		0		120,150
Total	$	321,314	$	7,860	$	13,549	$	0	$	0	$	342,723

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential, consumer indirect and direct loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.

The following table presents the recorded investment in residential, consumer indirect and direct auto loans based on payment activity as of March 31, 2015 and December 31, 2014. Nonperforming loans are loans past due 90 days or more and still accruing interest and nonaccrual loans.

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
March 31, 2015
Performing	$	150,388	$	32,062	$	121,379	$	8,856	$	3,547
Nonperforming		3,235		249		288		32		5
Total	$	153,623	$	32,311	$	121,667	$	8,888	$	3,552

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
December 31, 2014
Performing	$	149,661	$	31,076	$	124,296	$	9,035	$	3,625
Nonperforming		2,937		179		283		36		1
Total	$	152,598	$	31,255	$	124,579	$	9,071	$	3,626

Interest-Rate Swaps:

The Company uses a program that utilizes interest-rate swaps as part of its asset/liability management strategy. The interest-rate swaps are used to help manage the Company’s interest rate risk position and not as derivatives for trading purposes. The notional amount of

15

the interest-rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest-rate swap agreements.

The objective of the interest-rate swaps is to protect the related fixed rate commercial real estate loans from changes in fair value due to changes in interest rates. The Company has a program whereby it lends to its borrowers at a fixed rate with the loan agreement containing a two-way yield maintenance provision, which will be invoked in the event of prepayment of the loan, and is expected to exactly offset the fair value of unwinding the swap. The yield maintenance provision represents an embedded derivative which is bifurcated from the host loan contract and, as such, the swaps and embedded derivatives are not designated as hedges. Accordingly, both instruments are carried at fair value and changes in fair value are reported in current period earnings.

Summary information about these interest-rate swaps at periods ended March 31, 2015 and December 31, 2014 is as follows:

	March 31, 2015			December 31, 2014
Notional amounts (In thousands)	$	33,292		$	31,459
Weighted average pay rate on interest-rate swaps		4.27	%		4.26	%
Weighted average receive rate on interest-rate swaps		2.65	%		2.67	%
Weighted average maturity (years)		6.0			5.9
Fair value of combined interest-rate swaps (In thousands)	$	1,012		$	638

The fair value of the yield maintenance provisions and interest-rate swaps is recorded in other assets and other liabilities, respectively, in the consolidated balance sheets. Changes in the fair value of the yield maintenance provisions and interest-rate swaps are reported in earnings, as other noninterest income in the consolidated statements of income. For the three month periods ended March 31, 2015 and 2014 there were no net gains or losses recognized in earnings.

Earnings Per Share:

The computation of basic and diluted earnings per share is shown in the following table:

	Three Months Ended March 31,
	2015		2014
Basic EPS
Net income (In thousands)	$	2,211	$	2,191
Weighted average shares outstanding		18,427,901		18,779,091
Basic earnings per share	$	0.12	$	0.12
Diluted EPS
Net income (In thousands)	$	2,211	$	2,191
Weighted average shares out-standing for basic    earnings per share		18,427,901		18,779,091
Dilutive effect of restricted stock awards		1,408		0
Weighted average shares for diluted earnings per share		18,429,309		18,779,091
Diluted earnings per share	$	0.12	$	0.12

There were no restricted stock awards that were considered anti-dilutive for the three month periods ended March 31, 2015 or 2014.

Stock Based Compensation:

During 2012, the Company, with the approval of shareholders, created the 2012 Equity Incentive Plan (the “Plan”). The Plan permits the award of up to 500 thousand shares to the Company’s directors and employees to promote the Company’s long-term financial success by motivating performance through long-term incentive compensation and to better align the interests of its employees with those of its shareholders.  There were 80,918 additional net shares awarded under the Plan during February 2015. Expense recognized for the Plan was $58 thousand for the three month period ended March 31, 2015.  As of March 31, 2015, there was $803 thousand of total unrecognized compensation expense related to the nonvested shares granted under the Plan.  The remaining cost is expected to be recognized over 2.9 years. There were 46,957 shares awarded and $29 thousand of expense recognized for the Plan for the three month period ended March 31, 2014.  

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The following is the activity under the Plan during the three months ended March 31, 2015:

	Restricted Stock Units
	Units			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015		46,957		$	7.39
Granted		85,918			7.88
Vested		0			0
Forfeited		(5,000	)		7.88
Nonvested at March 31, 2015		127,875		$	7.70

Other Comprehensive Income:

The following table represents the detail of other comprehensive income for the three month periods ended March 31, 2015 and 2014.

	Three Months Ended March 31, 2015
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding gains on available-for-sale securities during the    period	$	2,310		$	(808	)	$	1,502
Reclassification adjustment for (gains) losses included in net    income (1)		(10	)		2			(8	)
Net unrealized gains on available-for-sale securities	$	2,300		$	(806	)	$	1,494

	Three Months Ended March 31, 2014
(In Thousands of Dollars)	Pre-tax		Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the    period	$	4,087	$	(1,432	)	$	2,655
Reclassification adjustment for (gains) losses included in net    income (1)		0		0			0
Net unrealized losses on available-for-sale securities	$	4,087	$	(1,432	)	$	2,655

(1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in security gains and the tax impact is included in income tax expense on the consolidated statements of income.

Regulatory Capital Matters

Banks and bank holding companies are subject to various regulatory capital requirements administered by the federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action by regulators that, if undertaken, could have a direct material effect on the financial statements. Management believes as of March 31, 2015, the Company and Bank meet all capital adequacy requirements to which they are subject.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If only adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At March 31, 2015 and December 31, 2014, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

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Actual and required capital amounts and ratios are presented below at year-end:

	Actual					Requirement For Capital Adequacy Purposes:					To be Well Capitalized Under Prompt Corrective Action Provisions:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2015
Common equity tier 1 capital ratio
Consolidated	$	117,890		15.03	%	$	35,291		4.50	%	N/A		N/A
Bank		107,914		13.85	%		35,071		4.50	%	$	50,659		6.50	%
Total risk based capital ratio
Consolidated		125,667		16.02	%		62,740		8.00	%	N/A		N/A
Bank		115,637		14.84	%		62,349		8.00	%		77,936		10.00	%
Tier 1 risk based capital ratio
Consolidated		117,890		15.03	%		47,055		6.00	%	N/A		N/A
Bank		107,914		13.85	%		46,762		6.00	%		62,349		8.00	%
Tier 1 leverage ratio
Consolidated		117,890		10.44	%		45,152		4.00	%	N/A		N/A
Bank		107,914		9.38	%		46,032		4.00	%		57,540		5.00	%
December 31, 2014
Total Capital to risk weighted assets
Consolidated	$	121,340		16.48	%	$	58,523		8.00	%	N/A		N/A
Bank		114,321		15.56	%		58,773		8.00	%	$	73,466		10.00	%
Tier 1 Capital to risk weighted assets
Consolidated		113,654		15.43	%		29,262		4.00	%	N/A		N/A
Bank		106,689		14.52	%		29,386		4.00	%		44,079		6.00	%
Tier 1 Capital to average assets
Consolidated		113,654		10.03	%		45,313		4.00	%	N/A		N/A
Bank		106,689		9.37	%		45,565		4.00	%		56,956		5.00	%

Fair Value:

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

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The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Investment Securities: The Company uses a third party service to estimate fair value on available for sale securities on a monthly basis. This service provider is considered a leading evaluation pricing service for U.S. domestic fixed income securities. They subscribe to multiple third-party pricing vendors, and supplement that information with matrix pricing methods. The fair values for investment securities are determined by quoted market prices in active markets, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on quoted prices for similar assets in active markets, quoted prices for similar assets in markets that are not active or inputs other than quoted prices, which provide a reasonable basis for fair value determination. Such inputs may include interest rates and yield curves, volatilities, prepayment speeds, credit risks and default rates. Inputs used are derived principally from observable market data (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). The fair values of Level 3 investment securities are determined by using unobservable inputs to measure fair value of assets for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based on the best information at the time, to the extent that inputs are available without undue cost and effort. For the period ended March 31, 2015 and for the year ended December 31, 2014, the fair value of Level 3 investment securities was immaterial.

Derivative Instruments: The fair values of derivative instruments are based on valuation models using observable market data as of the measurement date (Level 2).

Impaired Loans: At the time loans are considered impaired, collateral dependent impaired loans are valued at the lower of cost or fair value and non-collateral dependent loans are valued based on discounted cash flows. Impaired loans carried at fair value generally receive specific allocations of the allowance for loan losses. For collateral dependent loans fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Other Real Estate Owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair values are commonly based on recent real estate appraisals. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial and commercial real estate properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Appraisal Department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. On an annual basis, the Company compares the actual selling price of collateral that has been sold to the most recent appraised value to determine what adjustments should be made to appraisals to arrive at fair value.

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Assets measured at fair value on a recurring basis, including financial assets for which the Company has elected the fair value option, are summarized below:

	Fair Value Measurements at March 31, 2015 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government    sponsored entities	$	19,206	$	0	$	19,206	$	0
State and political subdivisions		95,578		0		95,578		0
Corporate bonds		941		0		941		0
Mortgage-backed securities-residential		218,304		0		218,295		9
Collateralized mortgage obligations		14,365		0		14,365		0
Small Business Administration		21,283		0		21,283		0
Equity securities		242		242		0		0
Total investment securities	$	369,919	$	242	$	369,668	$	9
Yield maintenance provisions	$	1,012	$	0	$	1,012	$	0
Financial Liabilities
Interest rate swaps	$	1,012	$	0	$	1,012	$	0

	Fair Value Measurements at December 31, 2014 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government    sponsored entities	$	24,821	$	0	$	24,821	$	0
State and political subdivisions		91,881		0		91,881		0
Corporate bonds		931		0		931		0
Mortgage-backed securities-residential		224,362		0		224,352		10
Collateralized mortgage obligations		25,175		0		25,175		0
Small Business Administration		22,419		0		22,419		0
Equity securities		240		240		0		0
Total investment securities	$	389,829	$	240	$	389,579	$	10
Yield maintenance provisions	$	638	$	0	$	638	$	0
Financial Liabilities
Interest rate swaps	$	638	$	0	$	638	$	0

There were no significant transfers between Level 1 and Level 2 during the three month periods ended March 31, 2015 and 2014.

The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Investment Securities Available-for-sale (Level 3)
(In Thousands of Dollars)	Three Months ended March 31,
	2015			2014
Beginning Balance	$	10		$	10
Total unrealized gains or losses:
Included in other comprehensive income		0			0
Repayments		(1	)		0
Transfers in and/or out of Level 3		0			0
Ending Balance	$	9		$	10

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Assets measured at fair value on a non-recurring basis are summarized below:

	Fair Value Measurements at March 31, 2015 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial real estate
Owner occupied	$	668	$	0	$	0	$	668
Commercial		373		0		0		373
1–4 family residential		266		0		0		266

	Fair Value Measurements at December 31, 2014 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial	$	807	$	0	$	0	$	807
1–4 family residential		63		0		0		63
Other real estate owned
Commercial real estate		45		0		0		45

Impaired loans that are measured for impairment using the fair value of the collateral for collateral dependent loans, had a principal balance of $451 thousand with a valuation allowance of $42 thousand at March 31, 2015, resulting in an additional provision for loan losses of $215 thousand for the three month period. At December 31, 2014, impaired loans had a principal balance of $988 thousand, with a valuation allowance of $117 thousand. Loans measured at fair value during the three months ended March 31, 2014 resulted in no additional provision for loan losses  Excluded from the fair value of impaired loans, at March 31, 2015 and December 31, 2014, discussed above are $4.1 million and $4.2 million of loans classified as troubled debt restructurings and measured using the present value of cash flows, which are not carried at fair value.

Impaired commercial real estate loans, both owner occupied and non-owner occupied are valued by independent external appraisals. These external appraisals are prepared using the sales comparison approach and income approach valuation techniques. Management makes subsequent unobservable adjustments to the impaired loan appraisals. Impaired loans other than commercial real estate and other real estate owned are not considered material.

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at period ended March 31, 2015 and December 31, 2014:

March 31, 2015	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial real estate	$	668	Quoted price for loan relationship	Adjustment for differences between earning multiplier	-41.21% (-41.21%)
Commercial		230	Quoted price for loan relationship	Adjustment for differences between earning multiplier	-39.80% (-39.80%)
Commercial		143	Sales comparison	Adjustment for differences between comparable sales	-27.43% - 32.86% (23.48%)
Residential		266	Sales comparison	Adjustment for differences between comparable sales	-26.81% - 28.82% (9.45%)

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December 31, 2014	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial	$	807	Sales comparison	Adjustment for differences between comparable sales	-27.43% - 32.86% (9.96%)
Residential		63	Sales comparison	Adjustment for differences between comparable sales	-18.32% - 24.16% (-14.02%)
Other real estate owned		45	Sales comparison	Adjustment for differences between comparable sales	-12.86% - 11.97% (-5.79%)

The carrying amounts and estimated fair values of financial instruments not previously disclosed at March 31, 2015 and December 31, 2014 are as follows:

			Fair Value Measurements at March 31, 2015 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	26,929	$	11,800	$	15,129	$	0	$	26,929
Restricted stock		4,224	n/a		n/a		n/a		n/a
Loans held for sale		146		0		150		0		150
Loans, net		666,061		0		0		668,763		668,763
Accrued interest receivable		3,583		0		1,822		1,761		3,583
Financial liabilities
Deposits		909,408		712,362		197,029		0		909,391
Short-term borrowings		62,218		0		62,218		0		62,218
Long-term borrowings		18,120		0		18,612		0		18,612
Accrued interest payable		379		2		377		0		379

			Fair Value Measurements at December 31, 2014 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	27,428	$	11,410	$	16,018	$	0	$	27,428
Restricted stock		4,224	n/a		n/a		n/a		n/a
Loans held for sale		511		0		523		0		523
Loans, net		656,220		0		0		658,993		658,993
Accrued interest receivable		3,237		0		1,645		1,592		3,237
Financial liabilities
Deposits		915,703		708,752		206,708		0		915,460
Short-term borrowings		59,136		0		59,136		0		59,136
Long-term borrowings		28,381		0		28,837		0		28,837
Accrued interest payable		402		2		400		0		402

The methods and assumptions used to estimate fair value, not previously described, are described as follows:

Cash and Cash Equivalents: The carrying amounts of cash and short-term instruments approximate fair values and are classified as either Level 1 or Level 2. The Company has determined that cash on hand and non-interest bearing due from bank accounts are Level 1 whereas interest bearing federal funds sold and other are Level 2.

Restricted Stock: It is not practical to determine the fair value of restricted stock due to restrictions placed on its transferability.

Loans: Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

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Loans held for sale: The fair value of loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification.

Accrued Interest Receivable/Payable: The carrying amounts of accrued interest receivable and payable approximate fair value resulting in a Level 1, Level 2 or Level 3 classification. The classification is the result of the association with securities, loans and deposits.

Deposits: The fair values disclosed for demand deposits – interest and non-interest checking, passbook savings, and money market accounts – are, by definition, equal to the amount payable on demand at the reporting date resulting in a Level 1 classification. The carrying amounts of variable rate certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair value for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

Short-term Borrowings: The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification.

Long-term Borrowings: The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Off-balance Sheet Instruments: The fair value of commitments is not considered material.

Segment Information:

The reportable segments are determined by the products and services offered, primarily distinguished between banking, trust and retirement consulting operations. They are also distinguished by the level of information provided to the chief operating decision makers in the Company, who use such information to review performance of various components of the business, which are then aggregated. Loans, investments, and deposits provide the revenues in the banking operation. All operations are domestic.

Significant segment totals are reconciled to the financial statements as follows:

(In Thousands of Dollars)	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others		Consolidated Totals
March 31, 2015
Goodwill and other intangibles	$	5,206	$	0	$	3,440	$	0	$	8,646
Total assets	$	11,257	$	1,117,357	$	4,433	$	604	$	1,133,651

(In Thousands of Dollars)	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others		Consolidated Totals
December 31, 2014
Goodwill and other intangibles	$	5,285	$	0	$	3,528	$	0	$	8,813
Total assets	$	10,643	$	1,121,505	$	4,356	$	463	$	1,136,967

(In Thousands of Dollars)	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended March 31, 2015
Net interest income	$	15	$	8,980	$	0	$	(3	)	$	8,992
Provision for loan losses		0		450		0		0			450
Service fees, security gains and other noninterest income		1,672		1,927		503		(65	)		4,037
Noninterest expense		1,196		7,358		335		395			9,284
Amortization and depreciation expense		85		292		90		0			467
Income (loss) before taxes		406		2,807		78		(463	)		2,828
Income taxes		138		609		27		(157	)		617
Net Income (Loss)	$	268	$	2,198	$	51	$	(306	)	$	2,211

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(In Thousands of Dollars)	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended March 31, 2014
Net interest income	$	12	$	8,848	$	0	$	(4	)	$	8,856
Provision for loan losses		0		330		0		0			330
Service fees, security gains and other    noninterest income		1,517		1,538		443		(65	)		3,433
Noninterest expense		1,092		6,965		312		274			8,643
Amortization and depreciation expense		95		298		105		0			498
Income before taxes		342		2,793		26		(343	)		2,818
Income taxes		118		617		9		(117	)		627
Net Income	$	224	$	2,176	$	17	$	(226	)	$	2,191

The Bank segment includes Farmers National Insurance and Farmers of Canfield Investment Co.

Business Acquisitions:

On January 27, 2015, the Company announced that it had entered into an Agreement and Plan of Merger (the “Merger Agreement”) with National Bancshares Corporation (“National Bancshares”), the parent company of First National Bank of Orrville (“First National Bank”), pursuant to which National Bancshares will merge with and into the Company (the “Merger”).  Promptly following consummation of the Merger, it is expected that First National Bank will merge with and into the Bank. At the completion of the Merger, First National Bank of Orrville branches will become branches of Farmers National Bank of Canfield.  Pursuant to the Agreement, each shareholder of National Bancshares will be entitled to elect to receive either $32.15 per share in cash or 4.034 shares of Farmers’ common stock, subject to an overall limitation of 80% of the shares of National Bancshares being exchanged for stock and 20% for cash.  Based on Farmers’ volume weighted average stock price over the last 20 trading days of $7.97, as of January 26, 2015, the transaction is valued at approximately $74.0 million.  The merger is expected to qualify as a tax-free reorganization for those shareholders electing to receive Farmers’ stock.  The transaction is subject to receipt of National Bancshares’ shareholder approval, Farmers’ shareholder approval and customary regulatory approvals.  The Company expects the transaction to close in the first half of 2015.

On July 1, 2013, the Company completed the acquisition of all outstanding stock of the retirement planning consultancy National Associates, Inc. (“NAI”) of Rocky River, Ohio. The transaction involved both cash and stock totaling $4.4 million, including up to $1.5 million of future cash payments contingent upon NAI meeting income performance targets based on growth in EBITDA. The measurement period is defined, in essence, as “the twelve month period ending on the second anniversary of the closing date.” Based upon the closing date of July 1, 2013, the payment is due within five business days of final determination of the amount of the payment based upon EBITDA from August 1, 2014, to July 31, 2015. The payment is tiered as follows:

i) If the calculated growth percentage of EBITDA is equal to or less than the base percentage (6.00%), the payment will be $0;

ii) If the calculated growth percentage of EBITDA is greater than or equal to the maximum percentage (12.00%), the payment will be $1.5 million; and

iii) If the calculated growth percentage of EBITDA is between the base and maximum percentages, a factor of the growth is interpolated and multiplied by the maximum $1.5 million payment.

The acquisition-date fair value of contingent consideration was estimated to be $920,000 and was recorded in other liabilities on the consolidated balance sheet. In the third quarter of 2014, management determined it was no longer probable that amount would be paid and reduced the liability through a reduction of other expense by $764,000, the same amount as goodwill impairment expense recorded in the same line.  As a result, the liability for contingent consideration included in other liabilities totaled $156,000 at March 31, 2015 and December 31, 2014.  The continent consideration and related liability will be settled in the third quarter of 2015.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

Discussions in this report that are not statements of historical fact (including statements that include terms such as “will,” “may,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” and “plan”) are forward-looking statements that involve risks and uncertainties. Any forward-looking statement is not a guarantee of future performance and actual future results could differ materially from those contained in forward-looking information. Factors that could cause or contribute to such differences include, without limitation, risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange

24

Commission (the “Commission”), including without limitation, the risk factors disclosed in Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Many of these factors are beyond the Company’s ability to control or predict, and readers are cautioned not to put undue reliance on those forward-looking statements. The following list, which is not intended to be an all-encompassing list of risks and uncertainties affecting the Company, summarizes several factors that could cause the Company’s actual results to differ materially from those anticipated or expected in these forward-looking statements:

· general economic conditions in market areas where we conduct business, which could materially impact credit quality trends;

· business conditions in the banking industry;

· the regulatory environment;

· fluctuations in interest rates;

· demand for loans in the market areas where we conduct business;

· rapidly changing technology and evolving banking industry standards;

· competitive factors, including increased competition with regional and national financial institutions;

· new service and product offerings by competitors and price pressures; and other like items.

Other factors not currently anticipated may also materially and adversely affect the Company’s results of operations, cash flows and financial position. There can be no assurance that future results will meet expectations. While the Company believes that the forward-looking statements in this report are reasonable, the reader should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. The Company does not undertake, and expressly disclaims, any obligation to update or alter any statements whether as a result of new information, future events or otherwise, except as may be required by applicable law.

Overview

Net income for the three months ended March 31, 2015 was $2.2 million, compared to $2.2 million for the same period last year. On a per share basis, net income for the first quarter ended March 31, 2015 and 2014 was $0.12 per diluted share.

Total gross loans were $673.8 million at March 31, 2015, compared to $663.9 million at December 31, 2014. This represents an increase of 1.5%.  The increase in loans is a direct result of the Company’s focus on loan growth utilizing a talented lending and credit team while adhering to a sound underwriting discipline. Most of the increase in loans has occurred in the commercial real estate, commercial and industrial and residential real estate loan portfolios.  Loans comprised 62.5% of the Bank's average earning assets at March 31, 2015, an improvement compared to 58.2% at March 31, 2014.  This improvement has resulted in a 2.8% increase in tax equated loan income from the first quarter of 2014 to the same quarter in 2015. Non-performing assets to total assets remain at a safe level, currently at 0.71%. Early stage delinquencies also continue to remain at manageable levels, at $4.3 million or 0.64% of total loans at March 31, 2015.

Deposits decreased $6.3 million, from $915.7 million at December 31, 2014 to $909.4 million at March 31, 2015, as customers begin to move some cash into other investment options. At March 31, 2015, core deposits – savings and money market accounts, time deposits less than $100 thousand, demand deposits and interest bearing demand deposits – represented approximately 91.5% of total deposits.

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Stockholders’ equity totaled $126.8 million, or 11.2% of total assets, at March 31, 2015, an increase of $3.2 million, or 2.6%, compared to $123.6 million at December 31, 2014.  Contributing to the increase is a $1.5 million, net of tax, improvement in the mark to market adjustment in the securities available for sale portfolio due to the changing long-term interest rate market and a $1.7 million increase in retained net income.  Shareholders received a total of $0.12 per share in dividends over the past four quarters. Book value per share increased from $6.71 per share at December 31, 2014 to $6.89 per share at March 31, 2015.  The Company’s tangible book value per share also increased from $6.23 per share at December 31, 2014 to $6.42 per share at March 31, 2015.  The increases in book value and tangible book value per share were also the result of the mark to market adjustments, net of tax, in the securities available for sale portfolio and the increases to retained earnings from profit retention.

Results of Operations

The following is a comparison of selected financial ratios and other results at or for the three months ended March 31, 2015 and 2014:

	At or for the Three Months Ended March 31,
(In Thousands, except Per Share Data)	2015			2014
Total Assets	$	1,133,651		$	1,141,000
Net Income	$	2,211		$	2,191
Basic and Diluted Earnings Per Share	$	0.12		$	0.12
Return on Average Assets (Annualized)		0.79	%		0.78	%
Return on Average Equity (Annualized)		7.14	%		7.65	%
Efficiency Ratio (tax equivalent basis)		70.71	%		69.87	%
Equity to Asset Ratio		11.18	%		10.28	%
Tangible Common Equity Ratio *		10.50	%		9.48	%
Dividends to Net Income		24.97	%		25.70	%
Net Loans to Assets		58.75	%		54.23	%
Loans to Deposits		74.09	%		67.84	%

* The tangible common equity ratio is calculated by dividing total common stockholders’ equity by total assets, after reducing both amounts by intangible assets. The tangible common equity ratio is not required by U.S. GAAP or by applicable bank regulatory requirements, but is a metric used by management to evaluate the adequacy of the Company’s capital levels. Since there is no authoritative requirement to calculate the tangible common equity ratio, the Company’s tangible common equity ratio is not necessarily comparable to similar capital measures disclosed or used by other companies in the financial services industry. Tangible common equity and tangible assets are non-U.S. GAAP financial measures and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with U.S. GAAP. With respect to the calculation of the actual unaudited tangible common equity ratio as of March 31, 2015 and 2014, reconciliations of tangible common equity to U.S. GAAP total common stockholders’ equity and tangible assets to U.S. GAAP total assets are set forth below:

	March 31,		December 31,		March 31,
(In Thousands of Dollars)		2015		2014		2014
Reconciliation of Common Stockholders' Equity to Tangible Common Equity
Stockholders' Equity	$	126,771	$	123,560	$	117,323
Less Goodwill and Other Intangibles		8,646		8,813		10,151
Tangible Common Equity	$	118,125	$	114,747	$	107,172

	March 31,		December 31,		March 31,
(In Thousands of Dollars)		2015		2014		2014
Reconciliation of Total Assets to Tangible Assets
Total Assets	$	1,133,651	$	1,136,967	$	1,141,000
Less Goodwill and Other Intangibles		8,646		8,813		10,151
Tangible Assets	$	1,125,005	$	1,128,154	$	1,130,849

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Net Interest Income. The following schedule details the various components of net interest income for the periods indicated. All asset yields are calculated on a tax-equivalent basis where applicable. Security yields are based on amortized cost.

Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)

	Three Months Ended								Three Months Ended
	March 31, 2015								March 31, 2014
	AVERAGE								AVERAGE
	BALANCE			INTEREST		RATE (1)			BALANCE			INTEREST		RATE (1)
EARNING ASSETS
Loans (3) (5) (6)	$	658,496		$	7,819		4.82	%	$	617,260		$	7,604		5.00	%
Taxable securities (4)		296,744			1,647		2.25			342,682			1,871		2.21
Tax-exempt securities (4) (6)		79,663			939		4.78			85,334			998		4.74
Equity securities (2)		4,282			48		4.55			4,282			47		4.45
Federal funds sold and other		14,599			5		0.14			10,653			5		0.19
TOTAL EARNING ASSETS		1,053,784			10,458		4.02			1,060,211			10,525		4.03
NONEARNING ASSETS
Cash and due from banks		18,274								19,901
Premises and equipment		17,040								17,502
Allowance for loan losses		(7,597	)							(7,367	)
Unrealized gains (losses) on securities		2,708								(5,689	)
Other assets (3)		53,586								50,707
TOTAL ASSETS	$	1,137,795							$	1,135,265
INTEREST-BEARING LIABILITIES
Time deposits	$	202,791		$	768		1.54	%	$	225,727		$	927		1.67	%
Savings deposits		398,633			110		0.11			408,455			125		0.12
Demand deposits		130,594			9		0.03			126,746			9		0.03
Short term borrowings		56,290			11		0.08			68,787			11		0.06
Long term borrowings		36,646			109		1.22			26,828			135		2.04
TOTAL INTEREST-BEARING LIABILITIES		824,954			1,007		0.50			856,543			1,207		0.57
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits		177,084								154,910
Other liabilities		10,092								7,674
Stockholders' equity		125,665								116,138
TOTAL LIABILTIES AND STOCKHOLDERS'    EQUITY	$	1,137,795							$	1,135,265
Net interest income and interest rate spread				$	9,451		3.52	%				$	9,318		3.46	%
Net interest margin							3.64	%							3.56	%

(1) Rates are calculated on an annualized basis.

(2) Equity securities include restricted stock, which is included in other assets on the consolidated balance sheets.

(3) Non-accrual loans and overdraft deposits are included in other assets.

(4) Includes unamortized discounts and premiums. Average balance and yield are computed using the average historical amortized cost.

(5) Interest on loans includes fee income of $533 thousand and $593 thousand for 2015 and 2014, respectively, and is reduced by amortization of $536 thousand and $522 thousand for 2015 and 2014, respectively.

(6) For 2015, adjustments of $135 thousand and $324 thousand, respectively, are made to tax equate income on tax exempt loans and tax exempt securities. For 2014, adjustments of $120 thousand and $342 thousand, respectively, are made to tax equate income on tax exempt loans and tax exempt securities. These adjustments are based on a marginal federal income tax rate of 35%, less disallowances.

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Net Interest Income.  Net interest income was $9.0 million for the first quarter of 2015 compared to $8.9 million for the same period in 2014.  The net interest margin to average earning assets on a fully taxable equivalent basis increased 8 basis points to 3.64% for the three months ended March 31, 2015, compared to 3.56% for the same three month period in the prior year.  In comparing the quarters ended March 31, 2015 and 2014, yields on earning assets decreased 1 basis point, while the cost of interest bearing liabilities decreased 7 basis points. The increase in net interest margin was mainly a result of time deposits with higher interest rates maturing and then being moved to products with lower interest rates.

Noninterest Income.  Noninterest income was $4.0 million for the first quarter of 2015, increasing 17.6% from $3.4 million in the same quarter of 2014. The largest driver of the increase was Trust fees income which increased $150 thousand or 10% and retirement plan consulting fees also increased $140 thousand or 38.5% in the current year’s quarter compared to the same quarter in 2014. Investment commissions also increased $104 thousand or 54% in comparing the same two quarters. Trust fees and investment commissions increased as a result of the increasing value of trust and investment assets under management.  Assets under management increased due to the addition of new clients and the continued growth in the equity markets.  Retirement plan consulting fees increased as a result of additional consulting work performed during the first quarter of 2015.

Noninterest Expense.  Noninterest expense totaled $9.8 million for the first quarter of 2015, which was $610 thousand more than the $9.1 million during the same quarter in 2014.  The increase is primarily the result of an increase of $520 thousand in salaries and employee benefits during the current quarter compared to the same quarter in 2014.  There was also $245 thousand of merger related costs associated with the pending acquisition of NBOH, as described in a previous footnote, during the quarter ended March 31, 2015 compared to none in the quarter ended March 31, 2014.

The Company’s tax equivalent efficiency ratio for the three month period ended March 31, 2015 was 70.7% compared to 69.9% for the same period in 2014. The slight negative change in the efficiency ratio was the result of the $610 thousand increase in noninterest expenses offset by the $604 thousand increase in noninterest income as explained in previous paragraphs. Management has continued to focus on increasing the levels of noninterest income and reducing the level of noninterest expenses.

Income Taxes. Income tax expense totaled $617 thousand for the quarter ended March 31, 2015 and $627 thousand for the quarter ended March 31, 2014. As discussed in previous paragraphs the increase in noninterest income nearly offset the increase in noninterest expense between the first quarter periods of 2015 and 2014. The effective tax rate for the three month period ended March 31, 2015 was 21.9% which nearly equaled the effective tax rate of 22.2% for the same period in 2014.

Other Comprehensive Income.  For the quarter ended March 31, 2015, the change in net unrealized gains on securities, net of reclassifications, resulted in an unrealized gain, net of tax, of $1.5 million, compared to an unrealized gain of $2.7 million for the same period in 2014. The increase in fair value for the three month period ended March 31, 2015 compared to 2014 is the result of market interest rate fluctuations.

Financial Condition

Cash and Cash Equivalents. Cash and cash equivalents decreased $499 thousand during the first three months of 2015. The Company expects these levels to remain steady over the next few months.

Securities. Securities available-for-sale decreased by $19.9 million since December 31, 2014.  The Company used proceeds from both maturing securities and sales of securities to fund repayment of  Federal Home Loan Bank advances, to fund increases in the loan portfolio and to purchase additional bank owned life insurance.

Loans. Gross loans increased $9.9 million since December 31, 2014. Most of the increase occurred in the commercial real estate, commercial and industrial and residential real estate loan portfolios. The increase in loan balances was enough to overcome the low interest rate environment and help the current quarter’s tax equated loan income improve by $215 thousand compared to the first quarter of 2014.  On a fully tax equivalent basis, loans contributed $7.8 million of total interest income during the three month period ended March 31, 2015 compared to $7.6 million for the same period in 2014.

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 Allowance for Loan Losses. The following table indicates key asset quality ratios that management evaluates on an ongoing basis. The unpaid principal balance of non-performing loans and non-performing assets was used in the calculation of amounts and ratios on the table below for quarters prior to the current quarter ended March 31, 2015.  For the current quarter, recorded investment amounts were used in the calculations.

Asset Quality History

(In Thousands of Dollars)

	3/31/2015			12/31/2014			9/30/2014			6/30/2014			3/31/2014
Nonperforming loans	$	7,939		$	8,481		$	7,218		$	8,140		$	8,494
Nonperforming loans as a % of total loans		1.18	%		1.28	%		1.12	%		1.28	%		1.36	%
Loans delinquent 30-89 days	$	4,344		$	5,426		$	4,938		$	3,460		$	2,473
Loans delinquent 30-89 days as a % of total loans		0.64	%		0.82	%		0.76	%		0.54	%		0.39	%
Allowance for loan losses	$	7,723		$	7,632		$	7,333		$	7,356		$	7,387
Allowance for loan losses as a % of loans		1.15	%		1.15	%		1.13	%		1.15	%		1.18	%
Allowance for loan losses as a % of nonperforming loans		97.28	%		89.99	%		101.58	%		90.37	%		86.97	%
Annualized net charge-offs to average net loans    outstanding		0.22	%		0.33	%		0.28	%		0.21	%		0.34	%
Non-performing assets	$	8,083		$	8,629		$	7,600		$	8,492		$	8,668
Non-performing assets as a % of total assets		0.71	%		0.76	%		0.67	%		0.75	%		0.76	%
Net charge-offs for the quarter	$	359		$	526		$	448		$	331		$	511

For the three months ended March 31, 2015, management recorded a $450 thousand provision for loan losses, compared to providing $330 thousand over the same three month period in the prior year. The larger provision recorded for the three month period ended March 31, 2015 was primarily a result of the loan portfolio’s growth.  The increase in the allowance for loan losses was consistent with the percentage of growth in total loans for the three month period ended March 31, 2015 as compared to the same period in 2014. As a result, the ratio of allowance for loan losses to gross loans remained relatively constant at 1.15% at March 31, 2015 and 1.18% at March 31, 2014.  Non-performing loans as a percentage of total loans decreased from 1.3% at December 31, 2014 to 1.2% at March 31, 2015. With the reduction in non-performing loans the Company was able to increase the percentage of the allowance for loan losses to non-performing loans from 90.0% at December 31, 2014 to 97.3% at March 31, 2015. Also, loans 30–89 days delinquent decreased $1.1 million from $5.4 million at December 31, 2014 to $4.3 million at March 31, 2015.

Based on the evaluation of the adequacy of the allowance for loan losses, management believes that the allowance for loan losses at March 31, 2015 is adequate and reflects probable incurred losses in the portfolio. The provision for loan losses is based on management’s judgment after taking into consideration all factors connected with the collectability of the existing loan portfolio. Management evaluates the loan portfolio in light of economic conditions, changes in the nature and volume of the loan portfolio, industry standards and other relevant factors. Specific factors considered by management in determining the amounts charged to operating expenses include previous credit loss experience, the status of past due interest and principal payments, the quality of financial information supplied by loan customers and the general condition of the industries in the community to which loans have been made.

Deposits. Total deposits decreased $6.3 million from $915.7 million at December 31, 2014 to $909.4 million at March 31, 2015.  The decline in deposits is cyclical and may be considered normal during the first three months of the year. Time deposits decreased $9.9 million and were partially offset by an increase in interest bearing demand deposits of $3.6 million during the first three month period of 2015. The Company’s strategy is to maintain deposit balances while pricing deposit rates to remain competitive within the market. At March 31, 2015, core deposits, which include, savings and money market accounts, time deposits less than $100 thousand, demand deposits and interest bearing demand deposits represented approximately 91.5% of total deposits.

Borrowings. Total borrowings decreased $7.2 million, or 8.2%, since December 31, 2014. The decrease in borrowings is the result of the Company repaying $10.3 million in Federal Home Loan Bank advances during the three month period ended March 31, 2015.  The decrease in FHLB advances was offset by a $3.1 million increase in securities sold under repurchase agreements during that same three month period.

Capital Resources. Total stockholders’ equity increased to $126.8 million, or 11.2% of total assets, at March 31, 2015, an increase of $3.2 million, compared to $123.6 million at December 31, 2014.  Contributing to the increase is $1.5 million improvement in the mark to market adjustment to the securities available for sale portfolio due to changing long-term interest rates during the period and a $1.7 million increase in retained net income.  Shareholders have received $0.03 per share in cash dividends each quarter over the last four quarters. Book value per share increased from $6.71 per share at December 31, 2014 to $6.89 per share at March 31, 2015.  The

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Company’s tangible book value per share also increased from $6.23 per share at December 31, 2014 to $6.42 per share at March 31, 2015.  The increases in book value and tangible book value per share were also the result of the mark to market adjustments to the securities available for sale portfolio and the increases to retained earnings from profit retention.

The capital management function is a regular process that consists of providing capital for both the current financial position and the anticipated future growth of the Company. New minimum capital requirements associated with the Basel Committee on capital and liquidity regulation (Basel III) and are being phased in beginning on January 1, 2015 through January 1, 2019. At March 31, 2015 the Company is required to maintain 4.5% common equity tier 1 to risk weighted assets. As of March 31, 2015 the Company’s common equity tier 1 to risk weighted assets was 15.03%, total risk-based capital ratio stood at 16.02%, and the Tier I risk-based capital ratio and Tier I leverage ratio were at 15.03% and 10.44%, respectively. Management believes that the Company and the Bank meet all capital adequacy requirements to which they are subject, as of March 31, 2015.

Critical Accounting Policies

The Company follows financial accounting and reporting policies that are in accordance with U.S. GAAP. These policies are presented in Note 1 of the consolidated audited financial statements in the Company’s Annual Report to Shareholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Critical accounting policies are those policies that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company has identified two accounting policies that are critical accounting policies and an understanding of these policies is necessary to understand the Company’s financial statements. These policies relate to determining the adequacy of the allowance for loan losses and other-than-temporary impairment of securities. Additional information regarding these policies is included in the notes to the aforementioned 2014 consolidated financial statements, Note 1 (Summary of Significant Accounting Policies), Note 2 (Securities), Note 3 (Loans), and the sections captioned “Investment Securities” and “Loan Portfolio.”

Management believes that the accounting for goodwill and other intangible assets also involves a higher degree of judgment than most other significant accounting policies. U.S. GAAP establishes standards for the amortization of acquired intangible assets and the impairment assessment of goodwill. Goodwill arising from business combinations represents the value attributable to unidentifiable intangible assets in the business acquired. The Company’s goodwill relates to the value inherent in the banking industry and that value is dependent upon the ability of the Company’s trust and NAI subsidiaries to provide quality, cost-effective services in a competitive marketplace. The goodwill value is supported by revenue that is in part driven by the volume of business transacted. A decrease in earnings resulting from a decline in the customer base or the inability to deliver cost-effective services over sustained periods can lead to impairment of goodwill that could adversely impact earnings in future periods. U.S. GAAP requires an annual evaluation of goodwill for impairment, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The fair value of the goodwill, which resides on the books of the Trust and NAI, is estimated by reviewing the past and projected operating results for the subsidiaries and comparable industry information.

Liquidity

The Company maintains, in the opinion of management, liquidity sufficient to satisfy depositors’ requirements and meet the credit needs of customers. The Company depends on its ability to maintain its market share of deposits as well as acquiring new funds. The Company’s ability to attract deposits and borrow funds depends in large measure on its profitability, capitalization and overall financial condition. The Company’s objective in liquidity management is to maintain the ability to meet loan commitments, purchase securities or to repay deposits and other liabilities in accordance with their terms without an adverse impact on current or future earnings. Principal sources of liquidity for the Company include assets considered relatively liquid, such as federal funds sold, cash and due from banks, as well as cash flows from maturities and repayments of loans, and securities.

Along with its liquid assets, the Bank has additional sources of liquidity available which help to ensure that adequate funds are available as needed. These other sources include, but are not limited to, loan repayments, the ability to obtain deposits through the adjustment of interest rates and the purchasing of federal funds and borrowings on approved lines of credit at major domestic banks. At March 31, 2015, these lines of credit totaled $25.0 million of which the Bank had not borrowed against these lines. In addition, the Company has two revolving lines of credit with correspondent banks totaling $6.5 million. The outstanding balance at March 31, 2015 was $350 thousand. Management feels that its liquidity position is adequate and continues to monitor the position on a monthly basis. As of March 31, 2015, the Bank had outstanding balances with the Federal Home Loan Bank of Cincinnati (“FHLB”) of $18.1 million with additional borrowing capacity of approximately $95.2 million with the FHLB as well as access to the Federal Reserve Discount Window, which provides an additional source of funds. The Bank views its membership in the FHLB as a solid source of liquidity.

The primary investing activities of the Company are originating loans and purchasing securities. During the first three months of 2015, net cash provided by investing activities amounted to $12.7 million, compared to $2.8 million provided in the same period in 2014.  Proceeds from maturities and repayments of securities available for sale were up to $11.4 million from $10.3 million during the first three months of 2014.  Proceeds from sales of securities available for sale amounted to $40.9 million provided during the first three

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months of 2015 compared to $9 thousand provided during the same period in 2014.  Cash used to purchase investment securities totaled $23.2 million during the three month period ended March 31, 2015 compared to $11.0 million used during the same period in 2014.  There was $10.4 million used by net loan originations and payments during the first quarter of 2015 compared to the $4.0 million provided during the same period in 2014. The cash used by lending activities during this quarter can be attributed to the positive activity in the consumer real estate and commercial loan portfolios.  The Company also used $6.0 million to purchase additional bank owned life insurance during the first three months of 2015 compared to none in the first three months of 2014.

The primary financing activities of the Company are obtaining deposits, repurchase agreements and other borrowings. Net cash used in financing activities amounted to $14.0 million for the first three months of 2015, compared to $1.3 million used in financing activities for the same period in 2014. This increase in cash used can be attributed to the change in net change in short-term borrowings, deposits and FHLB advance borrowings. During the three month period ended March 31, 2015 cash provided by short-term borrowings was $3.1 million compared to $8.4 million used during the same period in 2014. Deposits used $6.3 million during the first quarter of 2015 compared to $7.8 million provided in the same quarter in 2014. There was also $25 million used to repay FHLB advances and $15 million provided by additional FHLB borrowings during the first three months of 2015 compared to none in 2014.  

Off-Balance Sheet Arrangements

In the normal course of business, to meet the financial needs of our customers, we are a party to financial instruments with off-balance sheet risk. These financial instruments generally include commitments to originate mortgage, commercial and consumer loans, and involve to varying degrees, elements of credit and interest rate risk in excess of amounts recognized in the Consolidated Balance Sheets. The Bank’s maximum exposure to credit loss in the event of nonperformance by the borrower is represented by the contractual amount of those instruments. Because some commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The same credit policies are used in making commitments as are used for on-balance sheet instruments. Collateral is required in instances where deemed necessary. Undisbursed balances of loans closed include funds not disbursed but committed for construction projects. Unused lines of credit include funds not disbursed, but committed for, home equity, commercial and consumer lines of credit. Financial standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Those guarantees are primarily used to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Total unused commitments were $138.2 million at March 30, 2015 and $150.0 at December 31, 2014.  Additionally, the Company has committed up to a $3 million subscription in a Small Business Investment Company fund (SBIC).  At March 31, 2015 the Company had invested $1.8 million in this fund.

Recent Market and Regulatory Developments

In response to the current national and international economic recession, and in an effort to stabilize and strengthen the financial markets and banking industries, the United States Congress and governmental agencies have taken a number of significant actions over the past several years, including the passage of legislation and the implementation of a number of programs. The most recent of these actions was the passage into law, on July 21, 2010, of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The Dodd-Frank Act is the most comprehensive change to banking laws and the financial regulatory environment since the Great Depression of the 1930s. The Dodd-Frank Act affects almost every aspect of the nation’s financial services industry and mandates change in several key areas, including regulation and compliance, securities regulation, executive compensation, regulation of derivatives, corporate governance, and consumer protection.

The extent to which the Dodd-Frank Act and initiatives thereunder will succeed in addressing the credit markets or otherwise result in an improvement in the national economy is uncertain. In addition, because many aspects of this legislation still remain subject to intensive agency rulemaking and subsequent public comment prior to implementation, it is difficult to predict at this time the ultimate effect of the Dodd-Frank Act on the Company. It is likely, however, that the Company’s expenses will increase as a result of new compliance requirements.

In July 2013, the Federal banking regulators approved a final rule to implement the revised capital adequacy standards of the Basel Committee on Banking Supervision, commonly called Basel III, and to address relevant provisions of the Dodd-Frank Act.  The final rule strengthens the definition of regulatory capital, increases risk-based capital requirements, makes selected changes to the calculation of risk-weighted assets, and adjusts the prompt corrective action thresholds.  Community banking organizations, such as the Company and the Bank, become subject to the new rule on January 1, 2015 and certain provisions of the new rule will be phased in over the period of 2015 through 2019.

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The final rule:

· Permits banking organizations that had less than $15 billion in total consolidated assets as of December 31, 2009 to include in Tier 1 capital trust preferred securities and cumulative perpetual preferred stock that were issued and included in Tier 1 capital prior to May 19, 2010, subject to a limit of 25% of Tier 1 capital elements, excluding any non-qualifying capital instruments and after all regulatory capital deductions and adjustments have been applied to Tier 1 capital.

· Establishes new qualifying criteria for regulatory capital, including new limitations on the inclusion of deferred tax assets and mortgage servicing rights.

· Requires a minimum ratio of common equity Tier 1 capital to risk-weighted assets of 4.5%.

· Increases the minimum Tier 1 capital to risk-weighted assets ratio requirement from 4% to 6%.

· Retains the minimum total capital to risk-weighted assets ratio requirement of 8%.

· Establishes a minimum leverage ratio requirement of 4%.

· Retains the existing regulatory capital framework for 1-4 family residential mortgage exposures.

· Permits banking organizations that are not subject to the advanced approaches rule, such as the Company and the Bank, to retain, through a one-time election, the existing treatment for most accumulated other comprehensive income, such that unrealized gains and losses on securities available for sale will not affect regulatory capital amounts and ratios.

· Implements a new capital conservation buffer requirement for a banking organization to maintain a common equity capital ratio more than 2.5% above the minimum common equity Tier 1 capital, Tier 1 capital and total risk-based capital ratios in order to avoid limitations on capital distributions, including dividend payments, and certain discretionary bonus payments. The capital conservation buffer requirement will be phased in beginning on January 1, 2016 at 0.625% and will be fully phased in at 2.50% by January 1, 2019.  A banking organization with a buffer of less than the required amount would be subject to increasingly stringent limitations on such distributions and payments as the buffer approaches zero. The new rule also generally prohibits a banking organization from making such distributions or payments during any quarter if its eligible retained income is negative and its capital conservation buffer ratio was 2.5% or less at the end of the previous quarter. The eligible retained income of a banking organization is defined as its net income for the four calendar quarters preceding the current calendar quarter, based on the organization’s quarterly regulatory reports, net of any distributions and associated tax effects not already reflected in net income.

· Increases capital requirements for past-due loans, high volatility commercial real estate exposures, and certain short-term commitments and securitization exposures.

· Expands the recognition of collateral and guarantors in determining risk-weighted assets.

· Removes references to credit ratings consistent with the Dodd Frank Act and establishes due diligence requirements for securitization exposures.

The Company’s management is currently evaluating the provisions of the final rule and their expected impact on the Company.

Various legislation affecting financial institutions and the financial industry will likely continue to be introduced in Congress, and such legislation may further change banking statutes and the operating environment of the Company in substantial and unpredictable ways, and could increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive balance depending upon whether any of this potential legislation will be enacted, and if enacted, the effect that it or any implementing regulations, would have on the financial condition or results of operations of the Company or any of its subsidiaries. With the enactment of the Dodd-Frank Act, the nature and extent of future legislative and regulatory changes affecting financial institutions remains very unpredictable at this time.

Also, such statutes, regulations and policies are continually under review by Congress and state legislatures and federal and state regulatory agencies and are subject to change at any time, particularly in the current economic and regulatory environment. Any such change in statutes, regulations or regulatory policies applicable to the Company could have a material effect on the business of the Company.

Item  3. Quantitative and Qualitative Disclosures About Market Risk

The Company’s ability to maximize net income is dependent, in part, on management’s ability to plan and control net interest income through management of the pricing and mix of assets and liabilities. Because a large portion of assets and liabilities of the Company are monetary in nature, changes in interest rates and monetary or fiscal policy affect its financial condition and can have significant impact on the net income of the Company. Additionally, the Company’s balance sheet is currently liability sensitive and in the low

32

interest rate environment that exists today, the Company’s net interest margin should maintain current levels throughout the near future.

The Company considers the primary market exposure to be interest rate risk. Simulation analysis is used to monitor the Company’s exposure to changes in interest rates, and the effect of the change to net interest income. The following table shows the effect on net interest income and the net present value of equity in the event of a sudden and sustained 300 basis point increase or 100 basis decrease in market interest rates:

Changes In Interest Rate (basis points)	March 31, 2015 Result			December31, 2014 Result			ALCO Guidelines
Net Interest Income Change
+300		3.1	%		2.2	%		15	%
+200		2.6	%		1.9	%		10	%
+100		1.6	%		1.2	%		5	%
-100		-3.3	%		-4.0	%		5	%
Net Present Value Of Equity Change
+300		-2.8	%		-4.6	%		20	%
+200		-0.1	%		-1.3	%		15	%
+100		1.6	%		0.8	%		10	%
-100		-9.1	%		-6.7	%		10	%

The results of the simulation indicate that in an environment where interest rates rise 100, 200 and 300 basis points or fall 100 basis points over a 12 month period, using March 31, 2015 amounts as a base case, and considering the increase in deposit liabilities, and the volatile financial markets. The results of this analysis comply with internal limits established by the Company. A report on interest rate risk is presented to the Board of Directors and the Asset/Liability Committee on a quarterly basis. The Company has no market risk sensitive instruments held for trading purposes, nor does it hold derivative financial instruments, and does not plan to purchase these instruments in the near future.

Item  4. Controls and Procedures

Based on their evaluation, as of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s Chief Executive Officer and Chief Financial Officer have concluded the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) are effective. There were no changes in the Company’s internal controls over financial reporting (as defined in Rule 13a–15(f) under the Exchange Act) that occurred during the fiscal quarter ended March 31, 2015, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In the opinion of management there are no outstanding legal actions that will have a material adverse effect on the Company’s financial condition or results of operations.

Item 1A. Risk Factors

There have been no material changes to the Company’s risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of equity securities by the issuer.

On September 28, 2012, the Company announced that its Board of Directors approved a stock repurchase program that authorizes the repurchase of up to 920,000 shares of its outstanding common stock in the open market or in privately negotiated transactions. There were no shares purchased during the three month period ended March 31, 2015.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

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

2.1	Agreement and Plan of Merger by and between National Bancshares Corporation and Farmers National Banc Corp., dated as of January 27, 2015 (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission on February 2, 2015)
3.1	Articles of Incorporation of Farmers National Banc Corp., as amended (incorporated by reference from Exhibit 4.1 to the Company’s Registration Statement on Form S-3 filed with the Commission on October 3, 2001 (File No. 333-70806)).
3.2	Amendment to Articles of Incorporation of Farmers National Banc Corp., as amended (incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 1, 2013).
3.3	Amended Code of Regulations of Farmers National Banc Corp. (incorporated by reference from Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011 filed with the Commission on August 9, 2011).
10.1*	Farmers National Banc Corp. Nonqualified Deferred Compensation Plan (incorporated by reference from Exhibit 10.1 to Farmers’ Current Report on Form 8-K filed with the Commission on February 3, 2015).
10.2*	Farmers National Banc Corp. Form of Cash Long-Term Incentive Award Agreement under Long-Term Incentive Plan (incorporated by reference from Exhibit 10.8 to Farmers’ Annual Report on Form 10-K filed with the Commission on February 27, 2015).
10.3*	Farmers National Banc Corp. Form of Equity Long-Term Incentive Award Agreement under 2012 Equity Incentive Plan (incorporated by reference from Exhibit 10.9 to Farmers’ Annual Report on Form 10-K filed with the Commission on February 27, 2015).
10.4*	Nonemployee Director Compensation (incorporated by reference from Exhibit 10.10 to Farmers’ Annual Report on Form 10-K filed with the Commission on February 27, 2015).
31.1	Rule 13a-14(a)/15d-14(a) Certification of Kevin J. Helmick, President and Chief Executive Officer of the Company (filed herewith).
31.2	Rule 13a-14(a)/15d-14(a) Certification of Carl D. Culp, Executive Vice President, Chief Financial Officer and Treasurer of the Company (filed herewith).
32.1	Certification pursuant to 18 U.S.C. Section 1350 of Kevin J. Helmick, President and Chief Executive Officer of the Company (filed herewith).
32.2	Certification pursuant to 18 U.S.C. Section 1350 of Carl D. Culp, Executive Vice President, Chief Financial Officer and Treasurer of the Company (filed herewith).
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; and (v) Notes to Unaudited Consolidated Financial Statements, tagged as blocks of text.

*  Constitutes a management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FARMERS NATIONAL BANC CORP.

Dated: May 11, 2015

/s/ Kevin J. Helmick

Kevin J. Helmick
President and Chief Executive Officer

Dated: May 11, 2015

/s/ Carl D. Culp

Carl D. Culp
Executive Vice President and Treasurer

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EX-31.1

Exhibit 31.1

CERTIFICATIONS

Certification of Chief Executive Officer

CERTIFICATION FOR QUARTERLY REPORT ON FORM 10-Q

I, Kevin J. Helmick certify that:

1) I have reviewed this quarterly report on Form 10-Q of Farmers National Banc Corp.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 11, 2015

/s/ Kevin J. Helmick

Kevin J. Helmick

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

Certification of Chief Financial Officer

CERTIFICATION FOR QUARTERLY REPORT ON FORM 10-Q

I, Carl D. Culp certify that:

1) I have reviewed this quarterly report on Form 10-Q of Farmers National Banc Corp.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 11, 2015

/s/ Carl D. Culp

Carl D. Culp

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Farmers National Banc Corp. (the “Corporation”) on Form 10-Q for the period ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Kevin J. Helmick, Chief Executive Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Kevin J. Helmick

Kevin J. Helmick

Chief Executive Officer

May 11, 2015

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Farmers National Banc Corp. (the “Corporation”) on Form 10-Q for the period ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Carl D. Culp, Chief Financial Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Carl D. Culp

Carl D. Culp

Chief Financial Officer

May 11, 2015

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Loans (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$ 1,055	$ 874
Collectively evaluated for impairment	6,668	6,758
Total ending allowance balance	7,723	7,632	7,387	7,568
Loans:
Loans individually evaluated for impairment	11,876	12,597
Loans collectively evaluated for impairment	661,908	651,255
Loans	673,784	663,852
Commercial Real Estate
Ending allowance balance attributable to loans:
Individually evaluated for impairment	735	514
Collectively evaluated for impairment	2,182	2,162
Total ending allowance balance	2,917	2,676	2,751	2,752
Loans:
Loans individually evaluated for impairment	7,080	7,139
Loans collectively evaluated for impairment	224,240	215,434
Loans	231,320	222,573
Commercial
Ending allowance balance attributable to loans:
Individually evaluated for impairment	219	272
Collectively evaluated for impairment	1,132	1,148
Total ending allowance balance	1,351	1,420	1,065	1,219
Loans:
Loans individually evaluated for impairment	1,088	1,940
Loans collectively evaluated for impairment	121,335	118,210
Loans	122,423	120,150
Residential Real Estate
Ending allowance balance attributable to loans:
Individually evaluated for impairment	101	88
Collectively evaluated for impairment	1,539	1,601
Total ending allowance balance	1,640	1,689	1,681	1,964
Loans:
Loans individually evaluated for impairment	3,608	3,425
Loans collectively evaluated for impairment	182,326	180,428
Loans	185,934	183,853
Consumer
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	1,705	1,663
Total ending allowance balance	1,705	1,663	1,496	1,419
Loans:
Loans individually evaluated for impairment	100	93
Loans collectively evaluated for impairment	134,007	137,183
Loans	134,107	137,276
Unallocated
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	110	184
Total ending allowance balance	110	184	394	214
Loans:
Loans individually evaluated for impairment	0	0
Loans collectively evaluated for impairment	0	0
Loans	$ 0	$ 0

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Stock Based Compensation (Details) (Restricted Stock Award, USD $)	3 Months Ended
	Mar. 31, 2015
Restricted Stock Award
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning balance, Units	46,957
Granted, Units	85,918
Vested, Units	0
Forfeited, Units	(5,000)
Ending balance, Units	127,875
Beginning balance, Weighted Average Grant Date Fair Value	$ 7.39
Granted, Weighted Average Grant Date Fair Value	$ 7.88
Vested, Weighted Average Grant Date Fair Value	$ 0
Forfeited, Weighted Average Grant Date Fair Value	$ 7.88
Ending balance, Weighted Average Grant Date Fair Value	$ 7.70

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Credit Quality Indicators (Details 1) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	$ 673,784	$ 663,852
Residential real estate, 1-4 family residential
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	153,623	152,598
Residential real estate, 1-4 family residential | Performing
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	150,388	149,661
Residential real estate, 1-4 family residential | Nonperforming
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	3,235	2,937
Residential real estate, Home equity lines of credit
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	32,311	31,255
Residential real estate, Home equity lines of credit | Performing
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	32,062	31,076
Residential real estate, Home equity lines of credit | Nonperforming
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	249	179
Consumer, Indirect
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	121,667	124,579
Consumer, Indirect | Performing
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	121,379	124,296
Consumer, Indirect | Nonperforming
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	288	283
Consumer, Direct
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	8,888	9,071
Consumer, Direct | Performing
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	8,856	9,035
Consumer, Direct | Nonperforming
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	32	36
Consumer, Other
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	3,552	3,626
Consumer, Other | Performing
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	3,547	3,625
Consumer, Other | Nonperforming
Investment in residential, consumer and indirect auto loans based on payment activity
Loans	$ 5	$ 1

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Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Comprehensive Income Net Of Tax [Abstract]
Unrealized holding gains (losses) on available-for-sale securities during the period, pre-tax	$ 2,310		$ 4,087
Reclassification adjustment for (gains) losses included in net income, pre-tax	(10)	[1]	0	[1]
Net unrealized gains (losses) on available-for-sale securities, pre-tax	2,300		4,087
Unrealized holding gains (losses) on available-for-sale securities during the period, tax	(808)		(1,432)
Reclassification adjustment for (gains) losses included in net income, tax	2	[1]	0	[1]
Net unrealized gains (losses) on available-for-sale securities, tax	(806)		(1,432)
Unrealized holding gains (losses) on available-for-sale securities during the period, after-tax	1,502		2,655
Reclassification adjustment for (gains) losses included in net income, after-tax	(8)	[1]	0	[1]
Net unrealized gains (losses) on available-for-sale securities, after-tax	$ 1,494		$ 2,655

[1] Pre-tax reclassification adjustments relating to available-for-sale securities are reported in security gains and the tax impact is included in income tax expense on the consolidated statements of income.

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Credit Quality Indicators (Details Textual) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Credit Quality Indicators [Abstract]
Maximum commercial loan and commercial real estate relationships	$ 750

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Securities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 366,127	$ 388,337
Gross Unrealized Gains	5,855	5,219
Gross Unrealized Losses	(2,063)	(3,727)
Fair Value	369,919	389,829
Corporate bonds
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	935	936
Gross Unrealized Gains	9	3
Gross Unrealized Losses	(3)	(8)
Fair Value	941	931
U.S. Treasury and U.S. government sponsored entities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	18,812	24,515
Gross Unrealized Gains	401	418
Gross Unrealized Losses	(7)	(112)
Fair Value	19,206	24,821
State and political subdivisions
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	94,081	90,369
Gross Unrealized Gains	1,890	2,183
Gross Unrealized Losses	(393)	(671)
Fair Value	95,578	91,881
Mortgage-backed securities - residential
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	215,561	223,216
Gross Unrealized Gains	3,431	2,395
Gross Unrealized Losses	(688)	(1,249)
Fair Value	218,304	224,362
Collateralized mortgage obligations
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	14,872	25,988
Gross Unrealized Gains	0	98
Gross Unrealized Losses	(507)	(911)
Fair Value	14,365	25,175
Small Business Administration
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	21,745	23,193
Gross Unrealized Gains	1	1
Gross Unrealized Losses	(463)	(775)
Fair Value	21,283	22,419
Equity securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	121	120
Gross Unrealized Gains	123	121
Gross Unrealized Losses	(2)	(1)
Fair Value	$ 242	$ 240

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Regulatory Capital Matters (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Common equity tier 1 capital ratio
Actual, Amount	$ 117,890
Actual, Ratio	15.03%
Requirement for Capital Adequacy Purposes, Amount	35,291
Requirement for Capital Adequacy Purposes, Ratio	4.50%
Total risk based capital ratio
Actual, Amount	125,667	121,340
Actual, Ratio	16.02%	16.48%
Requirement for Capital Adequacy Purposes, Amount	62,740	58,523
Requirement for Capital Adequacy Purposes, Ratio	8.00%	8.00%
Tier 1 risk based capital ratio
Actual, Amount	117,890	113,654
Actual, Ratio	15.03%	15.43%
Requirement for Capital Adequacy Purposes, Amount	47,055	29,262
Requirement for Capital Adequacy Purposes, Ratio	6.00%	4.00%
Tier 1 leverage ratio
Actual, Amount	117,890	113,654
Actual, Ratio	10.44%	10.03%
Requirement for Capital Adequacy Purposes, Amount	45,152	45,313
Requirement for Capital Adequacy Purposes, Ratio	4.00%	4.00%
Farmers National Banc Corp
Common equity tier 1 capital ratio
Actual, Amount	107,914
Actual, Ratio	13.85%
Requirement for Capital Adequacy Purposes, Amount	35,071
Requirement for Capital Adequacy Purposes, Ratio	4.50%
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	50,659
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	6.50%
Total risk based capital ratio
Actual, Amount	115,637	114,321
Actual, Ratio	14.84%	15.56%
Requirement for Capital Adequacy Purposes, Amount	62,349	58,773
Requirement for Capital Adequacy Purposes, Ratio	8.00%	8.00%
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	77,936	73,466
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	10.00%	10.00%
Tier 1 risk based capital ratio
Actual, Amount	107,914	106,689
Actual, Ratio	13.85%	14.52%
Requirement for Capital Adequacy Purposes, Amount	46,762	29,386
Requirement for Capital Adequacy Purposes, Ratio	6.00%	4.00%
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	62,349	44,079
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	8.00%	6.00%
Tier 1 leverage ratio
Actual, Amount	107,914	106,689
Actual, Ratio	9.38%	9.37%
Requirement for Capital Adequacy Purposes, Amount	46,032	45,565
Requirement for Capital Adequacy Purposes, Ratio	4.00%	4.00%
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 57,540	$ 56,956
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	5.00%	5.00%

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Interest-Rate Swaps (Tables)

3 Months Ended

Mar. 31, 2015

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Summary Information about Interest-Rate Swaps

Summary information about these interest-rate swaps at periods ended March 31, 2015 and December 31, 2014 is as follows:

	March 31, 2015			December 31, 2014
Notional amounts (In thousands)	$	33,292		$	31,459
Weighted average pay rate on interest-rate swaps		4.27	%		4.26	%
Weighted average receive rate on interest-rate swaps		2.65	%		2.67	%
Weighted average maturity (years)		6.0			5.9
Fair value of combined interest-rate swaps (In thousands)	$	1,012		$	638

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Interest-Rate Swaps (Details Textual) (Interest rate swaps, USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Interest rate swaps
Derivative [Line Items]
Net Gain or Loss recognized in earnings	$ 0	$ 0

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Loans (Details 5) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	$ 7,366	$ 8,008
Loans Past Due 90 Days or More Still Accruing	573	473
Commercial real estate, Owner occupied
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	3,259	3,315
Loans Past Due 90 Days or More Still Accruing	0	44
Commercial real estate, Non-owner occupied
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	38	41
Loans Past Due 90 Days or More Still Accruing	0	0
Commercial
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	833	1,645
Loans Past Due 90 Days or More Still Accruing	0	0
Residential real estate, 1-4 family residential
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	2,946	2,742
Loans Past Due 90 Days or More Still Accruing	289	195
Residential real estate, Home equity lines of credit
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	170	139
Loans Past Due 90 Days or More Still Accruing	79	40
Consumer, Indirect
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	88	90
Loans Past Due 90 Days or More Still Accruing	200	193
Consumer, Direct
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	32	36
Loans Past Due 90 Days or More Still Accruing	0	0
Consumer, Other
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	0	0
Loans Past Due 90 Days or More Still Accruing	$ 5	$ 1

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Loans (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Schedule of loan balances
Subtotal	$ 671,643	$ 661,625
Net deferred loan costs	2,141	2,227
Allowance for loan losses	(7,723)	(7,632)	(7,387)	(7,568)
NET LOANS	666,061	656,220
Commercial real estate, Owner occupied
Schedule of loan balances
Commercial real estate	77,720	74,829
Commercial real estate, Non-owner occupied
Schedule of loan balances
Commercial real estate	125,254	122,228
Commercial real estate, Other
Schedule of loan balances
Commercial real estate	29,016	26,137
Commercial
Schedule of loan balances
Commercial	122,762	120,493
Allowance for loan losses	(1,351)	(1,420)	(1,065)	(1,219)
Residential real estate, 1-4 family residential
Schedule of loan balances
Residential real estate	154,076	153,055
Residential real estate, Home equity lines of credit
Schedule of loan balances
Residential real estate	32,310	31,255
Consumer, Indirect
Schedule of loan balances
Consumer	118,065	120,931
Consumer, Direct
Schedule of loan balances
Consumer	8,888	9,071
Consumer, Other
Schedule of loan balances
Consumer	$ 3,552	$ 3,626

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Earnings Per Share (Details Textual) (Restricted Stock Awards)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Restricted Stock Awards
Earnings Per Share Basic [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	0	0

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Fair Value (Details Textual) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Fair Value Disclosures [Abstract]
Impaired loans carried at fair value	$ 451,000		$ 988,000
Impaired loans collateral dependent loans valuation allowance	42,000		117,000
Additional provision for loan losses	215,000	0
Troubled debt restructurings not carried at fair value	$ 4,100,000		$ 4,200,000
Maximum maturity period of short term borrowings	90 days

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Credit Quality Indicators (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Risk category of loans by class of loans
Total risk category of loans by class of loans	$ 353,743	$ 342,723
Commercial real estate, Owner occupied
Risk category of loans by class of loans
Total risk category of loans by class of loans	77,505	74,631
Commercial real estate, Non-owner occupied
Risk category of loans by class of loans
Total risk category of loans by class of loans	124,929	121,913
Commercial real estate, Other
Risk category of loans by class of loans
Total risk category of loans by class of loans	28,886	26,029
Commercial
Risk category of loans by class of loans
Total risk category of loans by class of loans	122,423	120,150
Pass
Risk category of loans by class of loans
Total risk category of loans by class of loans	339,096	321,314
Pass | Commercial real estate, Owner occupied
Risk category of loans by class of loans
Total risk category of loans by class of loans	70,516	66,036
Pass | Commercial real estate, Non-owner occupied
Risk category of loans by class of loans
Total risk category of loans by class of loans	121,781	115,159
Pass | Commercial real estate, Other
Risk category of loans by class of loans
Total risk category of loans by class of loans	28,572	25,710
Pass | Commercial
Risk category of loans by class of loans
Total risk category of loans by class of loans	118,227	114,409
Special Mention
Risk category of loans by class of loans
Total risk category of loans by class of loans	3,028	7,860
Special Mention | Commercial real estate, Owner occupied
Risk category of loans by class of loans
Total risk category of loans by class of loans	1,022	2,534
Special Mention | Commercial real estate, Non-owner occupied
Risk category of loans by class of loans
Total risk category of loans by class of loans	487	3,760
Special Mention | Commercial real estate, Other
Risk category of loans by class of loans
Total risk category of loans by class of loans	0	0
Special Mention | Commercial
Risk category of loans by class of loans
Total risk category of loans by class of loans	1,519	1,566
Substandard
Risk category of loans by class of loans
Total risk category of loans by class of loans	11,619	13,549
Substandard | Commercial real estate, Owner occupied
Risk category of loans by class of loans
Total risk category of loans by class of loans	5,967	6,061
Substandard | Commercial real estate, Non-owner occupied
Risk category of loans by class of loans
Total risk category of loans by class of loans	2,661	2,994
Substandard | Commercial real estate, Other
Risk category of loans by class of loans
Total risk category of loans by class of loans	314	319
Substandard | Commercial
Risk category of loans by class of loans
Total risk category of loans by class of loans	2,677	4,175
Doubtful
Risk category of loans by class of loans
Total risk category of loans by class of loans	0	0
Doubtful | Commercial real estate, Owner occupied
Risk category of loans by class of loans
Total risk category of loans by class of loans	0	0
Doubtful | Commercial real estate, Non-owner occupied
Risk category of loans by class of loans
Total risk category of loans by class of loans	0	0
Doubtful | Commercial real estate, Other
Risk category of loans by class of loans
Total risk category of loans by class of loans	0	0
Doubtful | Commercial
Risk category of loans by class of loans
Total risk category of loans by class of loans	0	0
Not Rated
Risk category of loans by class of loans
Total risk category of loans by class of loans	0	0
Not Rated | Commercial real estate, Owner occupied
Risk category of loans by class of loans
Total risk category of loans by class of loans	0	0
Not Rated | Commercial real estate, Non-owner occupied
Risk category of loans by class of loans
Total risk category of loans by class of loans	0	0
Not Rated | Commercial real estate, Other
Risk category of loans by class of loans
Total risk category of loans by class of loans	0	0
Not Rated | Commercial
Risk category of loans by class of loans
Total risk category of loans by class of loans	$ 0	$ 0

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Loans

3 Months Ended

Mar. 31, 2015

Receivables [Abstract]

Loans

Loans:

Loan balances were as follows:

(In Thousands of Dollars)	March 31, 2015			December 31, 2014
Commercial real estate
Owner occupied	$	77,720		$	74,829
Non-owner occupied		125,254			122,228
Other		29,016			26,137
Commercial		122,762			120,493
Residential real estate
1-4 family residential		154,076			153,055
Home equity lines of credit		32,310			31,255
Consumer
Indirect		118,065			120,931
Direct		8,888			9,071
Other		3,552			3,626
Subtotal	$	671,643		$	661,625
Net deferred loan costs		2,141			2,227
Allowance for loan losses		(7,723	)		(7,632	)
Net loans	$	666,061		$	656,220

The following tables present the activity in the allowance for loan losses by portfolio segment for the three month periods ended March 31, 2015 and 2014:

Three Months Ended March 31, 2015

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	2,676		$	1,420		$	1,689		$	1,663		$	184		$	7,632
Provision for loan losses		232			(70	)		10			352			(74	)		450
Loans charged off		(4	)		0			(81	)		(533	)		0			(618	)
Recoveries		13			1			22			223			0			259
Total ending allowance balance	$	2,917		$	1,351		$	1,640		$	1,705		$	110		$	7,723

Three Months Ended March 31, 2014

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses
Beginning balance	$	2,752		$	1,219		$	1,964		$	1,419		$	214	$	7,568
Provision for loan losses		22			(162	)		(228	)		518			180		330
Loans charged off		(57	)		0			(70	)		(709	)		0		(836	)
Recoveries		34			8			15			268			0		325
Total ending allowance balance	$	2,751		$	1,065		$	1,681		$	1,496		$	394	$	7,387

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of March 31, 2015 and December 31, 2014. The recorded investment in loans includes the unpaid principal balance and unamortized loan origination fees and costs, but excludes accrued interest receivable, which is not considered to be material:

March 31, 2015

(In Thousands of Dollars)	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to    loans:
Individually evaluated for impairment	$	735	$	219	$	101	$	0	$	0	$	1,055
Collectively evaluated for impairment		2,182		1,132		1,539		1,705		110		6,668
Total ending allowance balance	$	2,917	$	1,351	$	1,640	$	1,705	$	110	$	7,723
Loans:
Loans individually evaluated for    impairment	$	7,080	$	1,088	$	3,608	$	100	$	0	$	11,876
Loans collectively evaluated for    impairment		224,240		121,335		182,326		134,007		0		661,908
Total ending loans balance	$	231,320	$	122,423	$	185,934	$	134,107	$	0	$	673,784

December 31, 2014

(In Thousands of Dollars)	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to    loans:
Individually evaluated for impairment	$	514	$	272	$	88	$	0	$	0	$	874
Collectively evaluated for impairment		2,162		1,148		1,601		1,663		184		6,758
Total ending allowance balance	$	2,676	$	1,420	$	1,689	$	1,663	$	184	$	7,632
Loans:
Loans individually evaluated for    impairment	$	7,139	$	1,940	$	3,425	$	93	$	0	$	12,597
Loans collectively evaluated for    impairment		215,434		118,210		180,428		137,183		0		651,255
Total ending loans balance	$	222,573	$	120,150	$	183,853	$	137,276	$	0	$	663,852

The following tables present information related to impaired loans by class of loans as of March 31, 2015 and December 31, 2014:

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
March 31, 2015
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,437	$	2,302	$	0
Non-owner occupied		385		384		0
Commercial		440		419		0
Residential real estate
1-4 family residential		2,360		2,137		0
Home equity lines of credit		296		281		0
Consumer		175		100		0
Subtotal		6,093		5,623		0
With an allowance recorded:
Commercial real estate
Owner occupied		2,870		2,863		671
Non-owner occupied		1,532		1,531		64
Commercial		686		669		219
Residential real estate
1-4 family residential		1,126		1,101		98
Home equity lines of credit		89		89		3
Subtotal		6,303		6,253		1,055
Total	$	12,396	$	11,876	$	1,055

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
December 31, 2014
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,448	$	2,318	$	0
Non-owner occupied		391		391		0
Commercial		531		511		0
Residential real estate
1-4 family residential		2,421		2,156		0
Home equity lines of credit		476		251		0
Consumer		185		93		0
Subtotal		6,452		5,720		0
With an allowance recorded:
Commercial real estate
Owner occupied		2,882		2,882		446
Non-owner occupied		1,548		1,548		68
Commercial		1,444		1,429		272
Residential real estate
1-4 family residential		944		928		85
Home equity lines of credit		90		90		3
Subtotal		6,908		6,877		874
Total	$	13,360	$	12,597	$	874

The following table presents the average recorded investment in impaired loans by class and interest income recognized by loan class for the three month periods ended March 31, 2015 and 2014:

	Average Recorded Investment				Interest Income Recognized
	For Three Months Ended March 31,				For Three Months Ended March 31,
(In Thousands of Dollars)	2015		2014		2015		2014
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,311	$	2,575	$	16	$	5
Non-owner occupied		387		391		6		0
Other		0		0		0		0
Commercial		463		931		6		5
Residential real estate
1-4 family residential		2,125		1,332		31		14
Home equity lines of credit		251		115		3		2
Consumer		91		239		4		0
Subtotal		5,628		5,583		66		26
With an allowance recorded:
Commercial real estate
Owner occupied		2,870		1,654		24		25
Non-owner occupied		1,537		1,586		20		20
Commercial		1,117		1,391		1		1
Residential real estate
1-4 family residential		983		1,390		9		11
Home equity lines of credit		90		146		1		1
Consumer		-		0		0		0
Subtotal		6,597		6,167		55		58
Total	$	12,225	$	11,750	$	121	$	84

Cash basis interest recognized during the three month periods ended March 31, 2015 and 2014 was materially equal to interest income recognized.

Nonaccrual loans and loans past due 90 days or more still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The following table presents the recorded investment in nonaccrual and loans past due 90 days or more still on accrual by class of loans as of March 31, 2015 and December 31, 2014:

	March 31, 2015				December 31, 2014
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing		Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Commercial real estate
Owner occupied	$	3,259	$	0	$	3,315	$	44
Non-owner occupied		38		0		41		0
Commercial		833		0		1,645		0
Residential real estate
1-4 family residential		2,946		289		2,742		195
Home equity lines of credit		170		79		139		40
Consumer
Indirect		88		200		90		193
Direct		32		0		36		0
Other		0		5		0		1
Total	$	7,366	$	573	$	8,008	$	473

The following table presents the aging of the recorded investment in past due loans as of March 31, 2015 and December 31, 2014 by class of loans:

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
March 31, 2015
Commercial real estate
Owner occupied	$	0	$	0	$	3,259	$	3,259	$	74,246	$	77,505
Non-owner occupied		0		0		38		38		124,891		124,929
Other		0		0		0		0		28,886		28,886
Commercial		145		0		833		978		121,445		122,423
Residential real estate
1-4 family residential		1,677		422		3,235		5,334		148,289		153,623
Home equity lines of credit		138		81		249		468		31,843		32,311
Consumer
Indirect		1,447		347		288		2,082		119,585		121,667
Direct		37		27		32		96		8,792		8,888
Other		19		3		5		27		3,525		3,552
Total	$	3,463	$	880	$	7,939	$	12,282	$	661,502	$	673,784

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
December 31, 2014
Commercial real estate
Owner occupied	$	0	$	0	$	3,359	$	3,359	$	71,272	$	74,631
Non-owner occupied		0		0		41		41		121,872		121,913
Other		0		0		0		0		26,029		26,029
Commercial		0		0		1,645		1,645		118,505		120,150
Residential real estate								0				-
1-4 family residential		1,892		546		2,937		5,375		147,223		152,598
Home equity lines of credit		205		92		179		476		30,779		31,255
Consumer								0				-
Indirect		2,136		406		283		2,825		121,754		124,579
Direct		108		18		36		162		8,909		9,071
Other		17		6		1		24		3,602		3,626
Total	$	4,358	$	1,068	$	8,481	$	13,907	$	649,945	$	663,852

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Fair Value (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Quoted Price for Loan Relationship (Market Approach Valuation) | Commercial real estate loan
Fair value measurements for financial instruments
Fair value	668
Fair Value Measurements Valuation Technique(s) Description	Quoted price for loan relationship
Quoted Price for Loan Relationship (Market Approach Valuation) | Commercial real estate loan | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	(41.21%)
Quoted Price for Loan Relationship (Market Approach Valuation) | Commercial
Fair value measurements for financial instruments
Fair value	230
Fair Value Measurements Valuation Technique(s) Description	Quoted price for loan relationship
Quoted Price for Loan Relationship (Market Approach Valuation) | Commercial | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	(39.80%)
Sales Comparison Valuation | Commercial
Fair value measurements for financial instruments
Fair value	143	807
Fair Value Measurements Valuation Technique(s) Description	Sales comparison
Sales Comparison Valuation | Commercial | Minimum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	(27.43%)	(27.43%)
Sales Comparison Valuation | Commercial | Maximum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	32.86%	32.86%
Sales Comparison Valuation | Commercial | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	23.48%	9.96%
Sales Comparison Valuation | Residential real estate loan
Fair value measurements for financial instruments
Fair value	266	63
Fair Value Measurements Valuation Technique(s) Description	Sales comparison
Sales Comparison Valuation | Residential real estate loan | Minimum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	(26.81%)	(18.32%)
Sales Comparison Valuation | Residential real estate loan | Maximum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	28.82%	24.16%
Sales Comparison Valuation | Residential real estate loan | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	9.45%	(14.02%)
Sales Comparison Valuation | Other real estate owned
Fair value measurements for financial instruments
Fair value		45
Fair Value Measurements Valuation Technique(s) Description	Sales comparison
Sales Comparison Valuation | Other real estate owned | Minimum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		(12.86%)
Sales Comparison Valuation | Other real estate owned | Maximum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		11.97%
Sales Comparison Valuation | Other real estate owned | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		(5.79%)

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Loans (Details 6) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Schedule of investment in past due loans
30-59 Days Past Due	$ 3,463	$ 4,358
60-89 Days Past Due	880	1,068
90 Days or More Past Due and Nonaccrual	7,939	8,481
Total Past Due	12,282	13,907
Loans Not Past Due	661,502	649,945
Loans	673,784	663,852
Commercial real estate, Owner occupied
Schedule of investment in past due loans
30-59 Days Past Due	0	0
60-89 Days Past Due	0	0
90 Days or More Past Due and Nonaccrual	3,259	3,359
Total Past Due	3,259	3,359
Loans Not Past Due	74,246	71,272
Loans	77,505	74,631
Commercial real estate, Non-owner occupied
Schedule of investment in past due loans
30-59 Days Past Due	0	0
60-89 Days Past Due	0	0
90 Days or More Past Due and Nonaccrual	38	41
Total Past Due	38	41
Loans Not Past Due	124,891	121,872
Loans	124,929	121,913
Commercial real estate, Other
Schedule of investment in past due loans
30-59 Days Past Due	0	0
60-89 Days Past Due	0	0
90 Days or More Past Due and Nonaccrual	0	0
Total Past Due	0	0
Loans Not Past Due	28,886	26,029
Loans	28,886	26,029
Commercial
Schedule of investment in past due loans
30-59 Days Past Due	145	0
60-89 Days Past Due	0	0
90 Days or More Past Due and Nonaccrual	833	1,645
Total Past Due	978	1,645
Loans Not Past Due	121,445	118,505
Loans	122,423	120,150
Residential real estate, 1-4 family residential
Schedule of investment in past due loans
30-59 Days Past Due	1,677	1,892
60-89 Days Past Due	422	546
90 Days or More Past Due and Nonaccrual	3,235	2,937
Total Past Due	5,334	5,375
Loans Not Past Due	148,289	147,223
Loans	153,623	152,598
Residential real estate, Home equity lines of credit
Schedule of investment in past due loans
30-59 Days Past Due	138	205
60-89 Days Past Due	81	92
90 Days or More Past Due and Nonaccrual	249	179
Total Past Due	468	476
Loans Not Past Due	31,843	30,779
Loans	32,311	31,255
Consumer, Indirect
Schedule of investment in past due loans
30-59 Days Past Due	1,447	2,136
60-89 Days Past Due	347	406
90 Days or More Past Due and Nonaccrual	288	283
Total Past Due	2,082	2,825
Loans Not Past Due	119,585	121,754
Loans	121,667	124,579
Consumer, Direct
Schedule of investment in past due loans
30-59 Days Past Due	37	108
60-89 Days Past Due	27	18
90 Days or More Past Due and Nonaccrual	32	36
Total Past Due	96	162
Loans Not Past Due	8,792	8,909
Loans	8,888	9,071
Consumer, Other
Schedule of investment in past due loans
30-59 Days Past Due	19	17
60-89 Days Past Due	3	6
90 Days or More Past Due and Nonaccrual	5	1
Total Past Due	27	24
Loans Not Past Due	3,525	3,602
Loans	$ 3,552	$ 3,626

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Regulatory Capital Matters (Tables)

3 Months Ended

Mar. 31, 2015

Regulatory Capital Requirements [Abstract]

Schedule of Actual and Required Capital Amounts and Ratios

Actual and required capital amounts and ratios are presented below at year-end:

	Actual					Requirement For Capital Adequacy Purposes:					To be Well Capitalized Under Prompt Corrective Action Provisions:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2015
Common equity tier 1 capital ratio
Consolidated	$	117,890		15.03	%	$	35,291		4.50	%	N/A		N/A
Bank		107,914		13.85	%		35,071		4.50	%	$	50,659		6.50	%
Total risk based capital ratio
Consolidated		125,667		16.02	%		62,740		8.00	%	N/A		N/A
Bank		115,637		14.84	%		62,349		8.00	%		77,936		10.00	%
Tier 1 risk based capital ratio
Consolidated		117,890		15.03	%		47,055		6.00	%	N/A		N/A
Bank		107,914		13.85	%		46,762		6.00	%		62,349		8.00	%
Tier 1 leverage ratio
Consolidated		117,890		10.44	%		45,152		4.00	%	N/A		N/A
Bank		107,914		9.38	%		46,032		4.00	%		57,540		5.00	%
December 31, 2014
Total Capital to risk weighted assets
Consolidated	$	121,340		16.48	%	$	58,523		8.00	%	N/A		N/A
Bank		114,321		15.56	%		58,773		8.00	%	$	73,466		10.00	%
Tier 1 Capital to risk weighted assets
Consolidated		113,654		15.43	%		29,262		4.00	%	N/A		N/A
Bank		106,689		14.52	%		29,386		4.00	%		44,079		6.00	%
Tier 1 Capital to average assets
Consolidated		113,654		10.03	%		45,313		4.00	%	N/A		N/A
Bank		106,689		9.37	%		45,565		4.00	%		56,956		5.00	%

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Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2015

Comprehensive Income Net Of Tax [Abstract]

Schedule of Other Comprehensive Income

The following table represents the detail of other comprehensive income for the three month periods ended March 31, 2015 and 2014.

	Three Months Ended March 31, 2015
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding gains on available-for-sale securities during the    period	$	2,310		$	(808	)	$	1,502
Reclassification adjustment for (gains) losses included in net    income (1)		(10	)		2			(8	)
Net unrealized gains on available-for-sale securities	$	2,300		$	(806	)	$	1,494

	Three Months Ended March 31, 2014
(In Thousands of Dollars)	Pre-tax		Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the    period	$	4,087	$	(1,432	)	$	2,655
Reclassification adjustment for (gains) losses included in net    income (1)		0		0			0
Net unrealized losses on available-for-sale securities	$	4,087	$	(1,432	)	$	2,655

(1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in security gains and the tax impact is included in income tax expense on the consolidated statements of income.

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Regulatory Capital Matters (Details Textual)	3 Months Ended
	Mar. 31, 2015 Classification
Regulatory Capital Requirements [Abstract]
Number of classifications	5

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Troubled Debt Restructurings (Details Textual) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Financing Receivable Modifications [Line Items]
Total troubled debt restructurings	$ 8,200,000		$ 8,100,000
Specific reserves to customers	247,000		242,000
Commitments to lend additional amounts to borrowers classified as troubled debt restructurings	11,000		25,000
Allowance adjustment charge offs	35,000	0
Increase in the allowance for loan losses as a result of the allowance	33,000	26,000
Additional provision impact to allowances for loan losses	450,000	330,000
Residential Real Estate
Financing Receivable Modifications [Line Items]
Loans modified as trouble debt restructuring loan	1
Payment default loan period	12 months
Additional provision impact to allowances for loan losses	23,000
Loans default payment past due period	30 days
Additional provision impact to allowances for loan losses	10,000	(228,000)
Consumer, Indirect
Financing Receivable Modifications [Line Items]
Loans modified as trouble debt restructuring loan		4
Payment default loan period		12 months
Loans default payment past due period	30 days
Additional provision impact to allowances for loan losses	$ 1,000
Loan charged off		1
Minimum
Financing Receivable Modifications [Line Items]
Reduction of the notes stated interest rate	0.87%
Maturity period loans	9 months
Maximum
Financing Receivable Modifications [Line Items]
Reduction of the notes stated interest rate	2.75%
Maturity period loans	120 months

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on Recurring Basis

Assets measured at fair value on a recurring basis, including financial assets for which the Company has elected the fair value option, are summarized below:

	Fair Value Measurements at March 31, 2015 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government    sponsored entities	$	19,206	$	0	$	19,206	$	0
State and political subdivisions		95,578		0		95,578		0
Corporate bonds		941		0		941		0
Mortgage-backed securities-residential		218,304		0		218,295		9
Collateralized mortgage obligations		14,365		0		14,365		0
Small Business Administration		21,283		0		21,283		0
Equity securities		242		242		0		0
Total investment securities	$	369,919	$	242	$	369,668	$	9
Yield maintenance provisions	$	1,012	$	0	$	1,012	$	0
Financial Liabilities
Interest rate swaps	$	1,012	$	0	$	1,012	$	0

	Fair Value Measurements at December 31, 2014 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government    sponsored entities	$	24,821	$	0	$	24,821	$	0
State and political subdivisions		91,881		0		91,881		0
Corporate bonds		931		0		931		0
Mortgage-backed securities-residential		224,362		0		224,352		10
Collateralized mortgage obligations		25,175		0		25,175		0
Small Business Administration		22,419		0		22,419		0
Equity securities		240		240		0		0
Total investment securities	$	389,829	$	240	$	389,579	$	10
Yield maintenance provisions	$	638	$	0	$	638	$	0
Financial Liabilities
Interest rate swaps	$	638	$	0	$	638	$	0

Reconciliation for All Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs

The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Investment Securities Available-for-sale (Level 3)
(In Thousands of Dollars)	Three Months ended March 31,
	2015			2014
Beginning Balance	$	10		$	10
Total unrealized gains or losses:
Included in other comprehensive income		0			0
Repayments		(1	)		0
Transfers in and/or out of Level 3		0			0
Ending Balance	$	9		$	10

Assets Measured at Fair Value on Non-Recurring Basis

Assets measured at fair value on a non-recurring basis are summarized below:

	Fair Value Measurements at March 31, 2015 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial real estate
Owner occupied	$	668	$	0	$	0	$	668
Commercial		373		0		0		373
1–4 family residential		266		0		0		266

	Fair Value Measurements at December 31, 2014 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial	$	807	$	0	$	0	$	807
1–4 family residential		63		0		0		63
Other real estate owned
Commercial real estate		45		0		0		45

Fair Value Measurements for Financial Instruments

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at period ended March 31, 2015 and December 31, 2014:

March 31, 2015	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial real estate	$	668	Quoted price for loan relationship	Adjustment for differences between earning multiplier	-41.21% (-41.21%)
Commercial		230	Quoted price for loan relationship	Adjustment for differences between earning multiplier	-39.80% (-39.80%)
Commercial		143	Sales comparison	Adjustment for differences between comparable sales	-27.43% - 32.86% (23.48%)
Residential		266	Sales comparison	Adjustment for differences between comparable sales	-26.81% - 28.82% (9.45%)

December 31, 2014	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial	$	807	Sales comparison	Adjustment for differences between comparable sales	-27.43% - 32.86% (9.96%)
Residential		63	Sales comparison	Adjustment for differences between comparable sales	-18.32% - 24.16% (-14.02%)
Other real estate owned		45	Sales comparison	Adjustment for differences between comparable sales	-12.86% - 11.97% (-5.79%)

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not previously disclosed at March 31, 2015 and December 31, 2014 are as follows:

			Fair Value Measurements at March 31, 2015 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	26,929	$	11,800	$	15,129	$	0	$	26,929
Restricted stock		4,224	n/a		n/a		n/a		n/a
Loans held for sale		146		0		150		0		150
Loans, net		666,061		0		0		668,763		668,763
Accrued interest receivable		3,583		0		1,822		1,761		3,583
Financial liabilities
Deposits		909,408		712,362		197,029		0		909,391
Short-term borrowings		62,218		0		62,218		0		62,218
Long-term borrowings		18,120		0		18,612		0		18,612
Accrued interest payable		379		2		377		0		379

			Fair Value Measurements at December 31, 2014 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	27,428	$	11,410	$	16,018	$	0	$	27,428
Restricted stock		4,224	n/a		n/a		n/a		n/a
Loans held for sale		511		0		523		0		523
Loans, net		656,220		0		0		658,993		658,993
Accrued interest receivable		3,237		0		1,645		1,592		3,237
Financial liabilities
Deposits		915,703		708,752		206,708		0		915,460
Short-term borrowings		59,136		0		59,136		0		59,136
Long-term borrowings		28,381		0		28,837		0		28,837
Accrued interest payable		402		2		400		0		402

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

Significant segment totals are reconciled to the financial statements as follows:

(In Thousands of Dollars)	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others		Consolidated Totals
March 31, 2015
Goodwill and other intangibles	$	5,206	$	0	$	3,440	$	0	$	8,646
Total assets	$	11,257	$	1,117,357	$	4,433	$	604	$	1,133,651

(In Thousands of Dollars)	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others		Consolidated Totals
December 31, 2014
Goodwill and other intangibles	$	5,285	$	0	$	3,528	$	0	$	8,813
Total assets	$	10,643	$	1,121,505	$	4,356	$	463	$	1,136,967

(In Thousands of Dollars)	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended March 31, 2015
Net interest income	$	15	$	8,980	$	0	$	(3	)	$	8,992
Provision for loan losses		0		450		0		0			450
Service fees, security gains and other noninterest income		1,672		1,927		503		(65	)		4,037
Noninterest expense		1,196		7,358		335		395			9,284
Amortization and depreciation expense		85		292		90		0			467
Income (loss) before taxes		406		2,807		78		(463	)		2,828
Income taxes		138		609		27		(157	)		617
Net Income (Loss)	$	268	$	2,198	$	51	$	(306	)	$	2,211

(In Thousands of Dollars)	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended March 31, 2014
Net interest income	$	12	$	8,848	$	0	$	(4	)	$	8,856
Provision for loan losses		0		330		0		0			330
Service fees, security gains and other    noninterest income		1,517		1,538		443		(65	)		3,433
Noninterest expense		1,092		6,965		312		274			8,643
Amortization and depreciation expense		95		298		105		0			498
Income before taxes		342		2,793		26		(343	)		2,818
Income taxes		118		617		9		(117	)		627
Net Income	$	224	$	2,176	$	17	$	(226	)	$	2,191

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Securities

3 Months Ended

Mar. 31, 2015

Investments Debt And Equity Securities [Abstract]

Securities

Securities:

The following table summarizes the amortized cost and fair value of the available-for-sale investment securities portfolio at March 31, 2015 and December 31, 2014 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income:

			Gross		Gross
(In Thousands of Dollars)	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
March 31, 2015
U.S. Treasury and U.S. government sponsored entities	$	18,812	$	401	$	(7	)	$	19,206
State and political subdivisions		94,081		1,890		(393	)		95,578
Corporate bonds		935		9		(3	)		941
Mortgage-backed securities - residential		215,561		3,431		(688	)		218,304
Collateralized mortgage obligations		14,872	0			(507	)		14,365
Small Business Administration		21,745		1		(463	)		21,283
Equity securities		121		123		(2	)		242
Totals	$	366,127	$	5,855	$	(2,063	)	$	369,919

			Gross		Gross
(In Thousands of Dollars)	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
December 31, 2014
U.S. Treasury and U.S. government sponsored entities	$	24,515	$	418	$	(112	)	$	24,821
State and political subdivisions		90,369		2,183		(671	)		91,881
Corporate bonds		936		3		(8	)		931
Mortgage-backed securities - residential		223,216		2,395		(1,249	)		224,362
Collateralized mortgage obligations		25,988		98		(911	)		25,175
Small Business Administration		23,193		1		(775	)		22,419
Equity securities		120		121		(1	)		240
Totals	$	388,337	$	5,219	$	(3,727	)	$	389,829

Proceeds from the sale of portfolio securities were $40.9 million during the three month period ended March 31, 2015. Gross gains of $73 thousand and gross losses of $63 thousand were realized on these sales during the three month period ended March 31, 2015. Proceeds from the sale of portfolio securities were $9  thousand during the three month period ended March 31, 2014, with no gains or losses realized.  

The amortized cost and fair value of the debt securities portfolio are shown by expected maturity. Expected maturities may differ from contractual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	March 31, 2015
(In Thousands of Dollars)	Amortized Cost		Fair Value
Maturity
Within one year	$	11,824	$	11,931
One to five years		53,858		54,858
Five to ten years		32,934		33,692
Beyond ten years		15,212		15,244
Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities		252,178		253,952
Total	$	366,006	$	369,677

The following table summarizes the investment securities with unrealized losses at March 31, 2015 and December 31, 2014, aggregated by major security type and length of time in a continuous unrealized loss position.

	Less than 12 Months					12 Months or Longer					Total
(In Thousands of Dollars)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
March 31, 2015
Available-for-sale
U.S. Treasury and U.S. government sponsored entities	$	0	$	0		$	5,202	$	(7	)	$	5,202	$	(7	)
State and political subdivisions		4,619		(29	)		16,437		(364	)		21,056		(393	)
Corporate bonds		0		0			480		(3	)		480		(3	)
Mortgage-backed securities - residential		14,859		(105	)		47,348		(583	)		62,207		(688	)
Collateralized mortgage obligations		0		0			14,365		(507	)		14,365		(507	)
Small Business Administration		0		0			21,188		(463	)		21,188		(463	)
Equity securities		23		(2	)		0		0			23		(2	)
Total	$	19,501	$	(136	)	$	105,020	$	(1,927	)	$	124,521	$	(2,063	)

	Less than 12 Months					12 Months or Longer					Total
(In Thousands of Dollars)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
December 31, 2014
Available-for-sale
U.S. Treasury and U.S. government sponsored entities	$	498	$	(2	)	$	10,159	$	(110	)	$	10,657	$	(112	)
State and political subdivisions		987		(11	)		24,063		(660	)		25,050		(671	)
Corporate bonds		0		0			476		(8	)		476		(8	)
Mortgage-backed securities - residential		25,770		(202	)		55,576		(1,047	)		81,346		(1,249	)
Collateralized mortgage obligations		0		0			19,541		(911	)		19,541		(911	)
Small Business Administration		0		0			22,319		(775	)		22,319		(775	)
Equity securities		26		(1	)		0		0			26		(1	)
Total	$	27,281	$	(216	)	$	132,134	$	(3,511	)	$	159,415	$	(3,727	)

Other-Than-Temporary-Impairment

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Investment securities are generally evaluated for OTTI under FASB Accounting Standards Codification (“ASC”) 320, Investments – Debt and Equity Securities. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, whether the market decline was affected by macroeconomic conditions and whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal government or its agencies, or U.S. government sponsored enterprises, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income or loss. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

As of March 31, 2015, the Company’s security portfolio consisted of 321 securities, 82 of which were in an unrealized loss position. The majority of the unrealized losses on the Company’s securities are related to its holdings of mortgage-backed securities, collateralized mortgage obligations, state and political subdivision securities, and Small Business Administration securities as discussed below.

Unrealized losses on debt securities issued by state and political subdivisions have not been recognized into income. Generally these securities have maintained their investment grade ratings and management does not have the intent and does not expect to be required to sell these securities before their anticipated recovery. The fair value is expected to recover as the securities approach their maturity date.

All of the Company’s holdings of collateralized mortgage obligations and residential mortgage-backed securities were issued by U.S. government-sponsored entities. Unrealized losses on these securities have not been recognized into income. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, the issues are guaranteed by the issuing entity and which the U.S. government has affirmed its commitment to support, and because the Company does not have the intent to sell these residential mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be OTTI.

Management does not believe any unrealized losses on Small Business Administration securities represent an other-than-temporary impairment. The securities are issued and backed by the full faith and credit of the U.S. government and the Company does not have the intent to sell these securities before their anticipated recovery. The fair value of these securities is expected to recover as they approach their maturity.

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Summary of Significant Accounting Policies (Details Textual)	3 Months Ended
	Mar. 31, 2015 Segment
Accounting Policies [Abstract]
Operating segments of business	3

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Loans (Details 3) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	$ 6,093	$ 6,452
Unpaid Principal Balance, With an allowance recorded	6,303	6,908
Unpaid Principal Balance	12,396	13,360
Recorded Investment, With no related allowance recorded	5,623	5,720
Recorded Investment, With an allowance recorded	6,253	6,877
Recorded Investment	11,876	12,597
Allowance for Loan Losses Allocated	1,055	874
Commercial real estate, Owner occupied
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	2,437	2,448
Unpaid Principal Balance, With an allowance recorded	2,870	2,882
Recorded Investment, With no related allowance recorded	2,302	2,318
Recorded Investment, With an allowance recorded	2,863	2,882
Allowance for Loan Losses Allocated	671	446
Commercial real estate, Non-owner occupied
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	385	391
Unpaid Principal Balance, With an allowance recorded	1,532	1,548
Recorded Investment, With no related allowance recorded	384	391
Recorded Investment, With an allowance recorded	1,531	1,548
Allowance for Loan Losses Allocated	64	68
Commercial
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	440	531
Unpaid Principal Balance, With an allowance recorded	686	1,444
Recorded Investment, With no related allowance recorded	419	511
Recorded Investment, With an allowance recorded	669	1,429
Allowance for Loan Losses Allocated	219	272
Residential real estate, 1-4 family residential
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	2,360	2,421
Unpaid Principal Balance, With an allowance recorded	1,126	944
Recorded Investment, With no related allowance recorded	2,137	2,156
Recorded Investment, With an allowance recorded	1,101	928
Allowance for Loan Losses Allocated	98	85
Residential real estate, Home equity lines of credit
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	296	476
Unpaid Principal Balance, With an allowance recorded	89	90
Recorded Investment, With no related allowance recorded	281	251
Recorded Investment, With an allowance recorded	89	90
Allowance for Loan Losses Allocated	3	3
Consumer
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	175	185
Recorded Investment, With no related allowance recorded	$ 100	$ 93

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Stock Based Compensation (Details Textual) (USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended	3 Months Ended		12 Months Ended
	Feb. 28, 2015	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2012
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expense recognized		$ 58	$ 0
Restricted Stock Award
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award of shares Plan permits to directors and employees		85,918
Restricted Stock Award | 2012 Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award of shares Plan permits to directors and employees	80,918		46,957	500,000
Expense recognized		58	29
Unrecognized compensation expense		$ 803
Compensation cost not yet recognized, period for recognition		2 years 10 months 24 days

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
ASSETS
Cash and due from banks	$ 11,800	$ 11,410
Federal funds sold and other	15,129	16,018
TOTAL CASH AND CASH EQUIVALENTS	26,929	27,428
Securities available for sale	369,919	389,829
Loans held for sale	146	511
Loans	673,784	663,852
Less allowance for loan losses	7,723	7,632
NET LOANS	666,061	656,220
Premises and equipment, net	16,963	17,049
Goodwill	5,591	5,591
Other intangibles	3,055	3,222
Bank owned life insurance	22,506	16,367
Other assets	22,481	20,750
TOTAL ASSETS	1,133,651	1,136,967
Deposits:
Noninterest-bearing	174,112	184,697
Interest-bearing	735,296	731,006
TOTAL DEPOSITS	909,408	915,703
Short-term borrowings	62,218	59,136
Long-term borrowings	18,120	28,381
Other liabilities	17,134	10,187
TOTAL LIABILITIES	1,006,880	1,013,407
Commitments and contingent liabilities
Stockholders' Equity:
Common Stock - Authorized 35,000,000 shares; issued 19,031,059	106,079	106,021
Retained earnings	22,603	20,944
Accumulated other comprehensive income	2,587	1,093
Treasury stock, at cost; 622,447 shares	(4,498)	(4,498)
TOTAL STOCKHOLDERS' EQUITY	126,771	123,560
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,133,651	$ 1,136,967

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Troubled Debt Restructurings (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 Loan	Mar. 31, 2014 Loan
Financing Receivable Recorded Investment [Line Items]
Number of Loans	7	12
Pre-Modification Outstanding Recorded Investment	$ 448	$ 480
Post-Modification Outstanding Recorded Investment	448	481
Commercial
Financing Receivable Recorded Investment [Line Items]
Number of Loans	1
Pre-Modification Outstanding Recorded Investment	8
Post-Modification Outstanding Recorded Investment	8
Residential real estate, 1-4 family residential
Financing Receivable Recorded Investment [Line Items]
Number of Loans	3	9
Pre-Modification Outstanding Recorded Investment	354	393
Post-Modification Outstanding Recorded Investment	354	394
Residential real estate, Home equity lines of credit
Financing Receivable Recorded Investment [Line Items]
Number of Loans	1	2
Pre-Modification Outstanding Recorded Investment	50	52
Post-Modification Outstanding Recorded Investment	50	52
Consumer, Indirect
Financing Receivable Recorded Investment [Line Items]
Number of Loans	2	1
Pre-Modification Outstanding Recorded Investment	36	35
Post-Modification Outstanding Recorded Investment	$ 36	$ 35

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME	$ 2,211	$ 2,191
Adjustments to reconcile net income to net cash from operating activities:
Provision for loan losses	450	330
Depreciation and amortization	467	498
Net amortization of securities	363	330
Security gains	(10)	0
Stock compensation expense	58	0
Loss on sale of other real estate owned	13	0
Earnings on bank owned life insurance	(139)	(107)
Origination of loans held for sale	(3,509)	(3,557)
Proceeds from loans held for sale	3,997	2,754
Net gains on sale of loans	(123)	(65)
Net change in other assets and liabilities	(2,913)	(2,046)
NET CASH FROM OPERATING ACTIVITIES	865	328
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and repayments of securities available for sale	11,420	10,332
Proceeds from sales of securities available for sale	40,913	9
Purchases of securities available for sale	(23,182)	(11,022)
Loan originations and payments, net	(10,413)	3,967
Proceeds from sale of other real estate owned	113	17
Purchase of bank owned life insurance	(6,000)	0
Additions to premises and equipment	(189)	(472)
NET CASH FROM INVESTING ACTIVITIES	12,662	2,831
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits	(6,295)	7,817
Net change in short-term borrowings	3,082	(8,364)
Repayment of Federal Home Loan Bank borrowings and other debt	(25,261)	(260)
New Federal Home Loan Bank advance borrowings	15,000	0
Cash dividends paid	(552)	(564)
Proceeds from reissuance of treasury shares	0	32
NET CASH FROM FINANCING ACTIVITIES	(14,026)	(1,339)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(499)	1,820
Beginning cash and cash equivalents	27,428	27,513
Ending cash and cash equivalents	26,929	29,333
Supplemental cash flow information:
Interest paid	1,031	1,209
Income taxes paid	300	0
Supplemental noncash disclosures:
Transfer of loans to other real estate	122	20
Security purchases not settled	$ 7,298	$ 202

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Fair Value (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs
Beginning Balance	$ 10	$ 10
Total unrealized gains or losses:
Included in other comprehensive income	0	0
Repayments	(1)	0
Transfers in and/or out of Level 3	0	0
Ending Balance	$ 9	$ 10

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Securities (Details 1) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Amortized cost and fair value of the debt securities maturity
Amortized Cost, Within one year	$ 11,824
Amortized Cost, One to five years	53,858
Amortized Cost, Five to ten years	32,934
Amortized Cost, Beyond ten years	15,212
Amortized Cost, Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities	252,178
Amortized Cost, Total	366,006
Fair Value, Within one year	11,931
Fair Value, One to five years	54,858
Fair Value, Five to ten years	33,692
Fair Value, Beyond ten years	15,244
Fair Value, Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities	253,952
Fair Value, Total	$ 369,677

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Business Acquisitions (Details Textual) (USD $)	0 Months Ended		3 Months Ended
	Jan. 27, 2015	Jul. 01, 2013	Mar. 31, 2015	Sep. 30, 2014	Jan. 26, 2015	Dec. 31, 2014
Business Acquisitions [Line Items]
Volume weighted average stock price over last 20 trading days, per share					$ 7.97
National Bancshares Corporation
Business Acquisitions [Line Items]
Cash shareholders are entitled to elect to receive per share	$ 32.15
Shares shareholders are entitled to elect to receive per shares	4.034
Maximum shares exchanged for stock	80.00%
Maximum shares exchanged for cash	20.00%
Business combination, transaction value					$ 74,000,000
National Associates Incorporated
Business Acquisitions [Line Items]
Business Acquisition, Effective Date of Acquisition			Jul. 01, 2013
Fair value of total consideration transferred		4,400,000
Time to due date once final contingent consideration amount is determined			5 days
EBITDA measurement start date			Aug. 01, 2014
EBITDA measurement end date			Jul. 31, 2015
Contingent consideration		920,000	156,000			156,000
Goodwill, Impairment Loss				764,000
Decrease in contingent consideration				764,000
National Associates Incorporated | Growth Percentage of EBITDA, Payment Tier 1
Business Acquisitions [Line Items]
Contingent future payments			0
National Associates Incorporated | Growth Percentage of EBITDA, Payment Tier 2
Business Acquisitions [Line Items]
Contingent future payments			1,500,000
National Associates Incorporated | Maximum
Business Acquisitions [Line Items]
Contingent future payments			1,500,000
National Associates Incorporated | Maximum | Growth Percentage of EBITDA, Payment Tier 1
Business Acquisitions [Line Items]
Fair value inputs, earnings before interest, taxes, depreciation, and amortization			6.00%
National Associates Incorporated | Maximum | Growth Percentage of EBITDA, Payment Tier 3
Business Acquisitions [Line Items]
Contingent future payments			$ 1,500,000
Fair value inputs, earnings before interest, taxes, depreciation, and amortization			12.00%
National Associates Incorporated | Minimum | Growth Percentage of EBITDA, Payment Tier 2
Business Acquisitions [Line Items]
Fair value inputs, earnings before interest, taxes, depreciation, and amortization			12.00%
National Associates Incorporated | Minimum | Growth Percentage of EBITDA, Payment Tier 3
Business Acquisitions [Line Items]
Fair value inputs, earnings before interest, taxes, depreciation, and amortization			6.00%

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Loans (Tables)

3 Months Ended

Mar. 31, 2015

Receivables [Abstract]

Schedule of Loan Balances

Loan balances were as follows:

(In Thousands of Dollars)	March 31, 2015			December 31, 2014
Commercial real estate
Owner occupied	$	77,720		$	74,829
Non-owner occupied		125,254			122,228
Other		29,016			26,137
Commercial		122,762			120,493
Residential real estate
1-4 family residential		154,076			153,055
Home equity lines of credit		32,310			31,255
Consumer
Indirect		118,065			120,931
Direct		8,888			9,071
Other		3,552			3,626
Subtotal	$	671,643		$	661,625
Net deferred loan costs		2,141			2,227
Allowance for loan losses		(7,723	)		(7,632	)
Net loans	$	666,061		$	656,220

Activity in the Allowance for Loan Losses by Portfolio Segment

The following tables present the activity in the allowance for loan losses by portfolio segment for the three month periods ended March 31, 2015 and 2014:

Three Months Ended March 31, 2015

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	2,676		$	1,420		$	1,689		$	1,663		$	184		$	7,632
Provision for loan losses		232			(70	)		10			352			(74	)		450
Loans charged off		(4	)		0			(81	)		(533	)		0			(618	)
Recoveries		13			1			22			223			0			259
Total ending allowance balance	$	2,917		$	1,351		$	1,640		$	1,705		$	110		$	7,723

Three Months Ended March 31, 2014

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses
Beginning balance	$	2,752		$	1,219		$	1,964		$	1,419		$	214	$	7,568
Provision for loan losses		22			(162	)		(228	)		518			180		330
Loans charged off		(57	)		0			(70	)		(709	)		0		(836	)
Recoveries		34			8			15			268			0		325
Total ending allowance balance	$	2,751		$	1,065		$	1,681		$	1,496		$	394	$	7,387

Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment and Based

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of March 31, 2015 and December 31, 2014. The recorded investment in loans includes the unpaid principal balance and unamortized loan origination fees and costs, but excludes accrued interest receivable, which is not considered to be material:

March 31, 2015

(In Thousands of Dollars)	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to    loans:
Individually evaluated for impairment	$	735	$	219	$	101	$	0	$	0	$	1,055
Collectively evaluated for impairment		2,182		1,132		1,539		1,705		110		6,668
Total ending allowance balance	$	2,917	$	1,351	$	1,640	$	1,705	$	110	$	7,723
Loans:
Loans individually evaluated for    impairment	$	7,080	$	1,088	$	3,608	$	100	$	0	$	11,876
Loans collectively evaluated for    impairment		224,240		121,335		182,326		134,007		0		661,908
Total ending loans balance	$	231,320	$	122,423	$	185,934	$	134,107	$	0	$	673,784

December 31, 2014

(In Thousands of Dollars)	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to    loans:
Individually evaluated for impairment	$	514	$	272	$	88	$	0	$	0	$	874
Collectively evaluated for impairment		2,162		1,148		1,601		1,663		184		6,758
Total ending allowance balance	$	2,676	$	1,420	$	1,689	$	1,663	$	184	$	7,632
Loans:
Loans individually evaluated for    impairment	$	7,139	$	1,940	$	3,425	$	93	$	0	$	12,597
Loans collectively evaluated for    impairment		215,434		118,210		180,428		137,183		0		651,255
Total ending loans balance	$	222,573	$	120,150	$	183,853	$	137,276	$	0	$	663,852

Loans Individually Evaluated for Impairment by Class of Loans

The following tables present information related to impaired loans by class of loans as of March 31, 2015 and December 31, 2014:

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
March 31, 2015
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,437	$	2,302	$	0
Non-owner occupied		385		384		0
Commercial		440		419		0
Residential real estate
1-4 family residential		2,360		2,137		0
Home equity lines of credit		296		281		0
Consumer		175		100		0
Subtotal		6,093		5,623		0
With an allowance recorded:
Commercial real estate
Owner occupied		2,870		2,863		671
Non-owner occupied		1,532		1,531		64
Commercial		686		669		219
Residential real estate
1-4 family residential		1,126		1,101		98
Home equity lines of credit		89		89		3
Subtotal		6,303		6,253		1,055
Total	$	12,396	$	11,876	$	1,055

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
December 31, 2014
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,448	$	2,318	$	0
Non-owner occupied		391		391		0
Commercial		531		511		0
Residential real estate
1-4 family residential		2,421		2,156		0
Home equity lines of credit		476		251		0
Consumer		185		93		0
Subtotal		6,452		5,720		0
With an allowance recorded:
Commercial real estate
Owner occupied		2,882		2,882		446
Non-owner occupied		1,548		1,548		68
Commercial		1,444		1,429		272
Residential real estate
1-4 family residential		944		928		85
Home equity lines of credit		90		90		3
Subtotal		6,908		6,877		874
Total	$	13,360	$	12,597	$	874

Average Recorded Investment By Class

The following table presents the average recorded investment in impaired loans by class and interest income recognized by loan class for the three month periods ended March 31, 2015 and 2014:

	Average Recorded Investment				Interest Income Recognized
	For Three Months Ended March 31,				For Three Months Ended March 31,
(In Thousands of Dollars)	2015		2014		2015		2014
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,311	$	2,575	$	16	$	5
Non-owner occupied		387		391		6		0
Other		0		0		0		0
Commercial		463		931		6		5
Residential real estate
1-4 family residential		2,125		1,332		31		14
Home equity lines of credit		251		115		3		2
Consumer		91		239		4		0
Subtotal		5,628		5,583		66		26
With an allowance recorded:
Commercial real estate
Owner occupied		2,870		1,654		24		25
Non-owner occupied		1,537		1,586		20		20
Commercial		1,117		1,391		1		1
Residential real estate
1-4 family residential		983		1,390		9		11
Home equity lines of credit		90		146		1		1
Consumer		-		0		0		0
Subtotal		6,597		6,167		55		58
Total	$	12,225	$	11,750	$	121	$	84

Schedule of Investment in Nonaccrual and Loans Past Due 90 Days or More Still on Accrual by Class of Loans

The following table presents the recorded investment in nonaccrual and loans past due 90 days or more still on accrual by class of loans as of March 31, 2015 and December 31, 2014:

	March 31, 2015				December 31, 2014
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing		Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Commercial real estate
Owner occupied	$	3,259	$	0	$	3,315	$	44
Non-owner occupied		38		0		41		0
Commercial		833		0		1,645		0
Residential real estate
1-4 family residential		2,946		289		2,742		195
Home equity lines of credit		170		79		139		40
Consumer
Indirect		88		200		90		193
Direct		32		0		36		0
Other		0		5		0		1
Total	$	7,366	$	573	$	8,008	$	473

Schedule of Investment in Past Due Loans

The following table presents the aging of the recorded investment in past due loans as of March 31, 2015 and December 31, 2014 by class of loans:

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
March 31, 2015
Commercial real estate
Owner occupied	$	0	$	0	$	3,259	$	3,259	$	74,246	$	77,505
Non-owner occupied		0		0		38		38		124,891		124,929
Other		0		0		0		0		28,886		28,886
Commercial		145		0		833		978		121,445		122,423
Residential real estate
1-4 family residential		1,677		422		3,235		5,334		148,289		153,623
Home equity lines of credit		138		81		249		468		31,843		32,311
Consumer
Indirect		1,447		347		288		2,082		119,585		121,667
Direct		37		27		32		96		8,792		8,888
Other		19		3		5		27		3,525		3,552
Total	$	3,463	$	880	$	7,939	$	12,282	$	661,502	$	673,784

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
December 31, 2014
Commercial real estate
Owner occupied	$	0	$	0	$	3,359	$	3,359	$	71,272	$	74,631
Non-owner occupied		0		0		41		41		121,872		121,913
Other		0		0		0		0		26,029		26,029
Commercial		0		0		1,645		1,645		118,505		120,150
Residential real estate								0				-
1-4 family residential		1,892		546		2,937		5,375		147,223		152,598
Home equity lines of credit		205		92		179		476		30,779		31,255
Consumer								0				-
Indirect		2,136		406		283		2,825		121,754		124,579
Direct		108		18		36		162		8,909		9,071
Other		17		6		1		24		3,602		3,626
Total	$	4,358	$	1,068	$	8,481	$	13,907	$	649,945	$	663,852

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Securities (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	$ 19,501	$ 27,281
Unrealized Losses, Less Than 12 Months	(136)	(216)
Fair Value, 12 Months or Longer	105,020	132,134
Unrealized Losses, 12 Months or Longer	(1,927)	(3,511)
Fair Value, Total	124,521	159,415
Unrealized Losses, Total	(2,063)	(3,727)
Corporate bonds
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	0	0
Unrealized Losses, Less Than 12 Months	0	0
Fair Value, 12 Months or Longer	480	476
Unrealized Losses, 12 Months or Longer	(3)	(8)
Fair Value, Total	480	476
Unrealized Losses, Total	(3)	(8)
U.S. Treasury and U.S. government sponsored entities
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	0	498
Unrealized Losses, Less Than 12 Months	0	(2)
Fair Value, 12 Months or Longer	5,202	10,159
Unrealized Losses, 12 Months or Longer	(7)	(110)
Fair Value, Total	5,202	10,657
Unrealized Losses, Total	(7)	(112)
State and political subdivisions
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	4,619	987
Unrealized Losses, Less Than 12 Months	(29)	(11)
Fair Value, 12 Months or Longer	16,437	24,063
Unrealized Losses, 12 Months or Longer	(364)	(660)
Fair Value, Total	21,056	25,050
Unrealized Losses, Total	(393)	(671)
Mortgage-backed securities - residential
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	14,859	25,770
Unrealized Losses, Less Than 12 Months	(105)	(202)
Fair Value, 12 Months or Longer	47,348	55,576
Unrealized Losses, 12 Months or Longer	(583)	(1,047)
Fair Value, Total	62,207	81,346
Unrealized Losses, Total	(688)	(1,249)
Collateralized mortgage obligations
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	0	0
Unrealized Losses, Less Than 12 Months	0	0
Fair Value, 12 Months or Longer	14,365	19,541
Unrealized Losses, 12 Months or Longer	(507)	(911)
Fair Value, Total	14,365	19,541
Unrealized Losses, Total	(507)	(911)
Small Business Administration
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	0	0
Unrealized Losses, Less Than 12 Months	0	0
Fair Value, 12 Months or Longer	21,188	22,319
Unrealized Losses, 12 Months or Longer	(463)	(775)
Fair Value, Total	21,188	22,319
Unrealized Losses, Total	(463)	(775)
Equity securities
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	23	26
Unrealized Losses, Less Than 12 Months	(2)	(1)
Fair Value, 12 Months or Longer	0	0
Unrealized Losses, 12 Months or Longer	0	0
Fair Value, Total	23	26
Unrealized Losses, Total	$ (2)	$ (1)

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Credit Quality Indicators (Tables)

3 Months Ended

Mar. 31, 2015

Risks And Uncertainties [Abstract]

Risk Category of Loans by Class of Loans

As of March 31, 2015 and December 31, 2014, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Doubtful		Not Rated		Total
March 31, 2015
Commercial real estate
Owner occupied	$	70,516	$	1,022	$	5,967	$	0	$	0	$	77,505
Non-owner occupied		121,781		487		2,661		0		0		124,929
Other		28,572		0		314		0		0		28,886
Commercial		118,227		1,519		2,677		0		0		122,423
Total	$	339,096	$	3,028	$	11,619	$	0	$	0	$	353,743

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Doubtful		Not Rated		Total
December 31, 2014
Commercial real estate
Owner occupied	$	66,036	$	2,534	$	6,061	$	0	$	0	$	74,631
Non-owner occupied		115,159		3,760		2,994		0		0		121,913
Other		25,710		0		319		0		0		26,029
Commercial		114,409		1,566		4,175		0		0		120,150
Total	$	321,314	$	7,860	$	13,549	$	0	$	0	$	342,723

Investment in Residential, Consumer and Indirect Auto Loans Based on Payment Activity

The following table presents the recorded investment in residential, consumer indirect and direct auto loans based on payment activity as of March 31, 2015 and December 31, 2014. Nonperforming loans are loans past due 90 days or more and still accruing interest and nonaccrual loans.

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
March 31, 2015
Performing	$	150,388	$	32,062	$	121,379	$	8,856	$	3,547
Nonperforming		3,235		249		288		32		5
Total	$	153,623	$	32,311	$	121,667	$	8,888	$	3,552

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
December 31, 2014
Performing	$	149,661	$	31,076	$	124,296	$	9,035	$	3,625
Nonperforming		2,937		179		283		36		1
Total	$	152,598	$	31,255	$	124,579	$	9,071	$	3,626

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Principles of Consolidation:

Farmers National Banc Corp. (“Company”) is a one-bank holding company registered under the Bank Holding Company Act of 1956, as amended. The Company provides full banking services through its nationally chartered subsidiary, The Farmers National Bank of Canfield (“Bank”). The Company provides trust services through its subsidiary, Farmers Trust Company (“Trust”), retirement consulting services through National Associates, Inc. (“NAI”) and insurance services through the Bank’s subsidiary, Farmers National Insurance (“Insurance”).  In addition to the Insurance subsidiary, the Bank has created Farmers of Canfield Investment Co. (“Investments”), with the primary purpose of investing in municipal securities. The consolidated financial statements include the accounts of the Company, the Bank and its subsidiaries, along with the Trust and NAI. All significant intercompany balances and transactions have been eliminated in the consolidation.

Basis of Presentation:

The unaudited condensed consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2014 Annual Report to Shareholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The interim consolidated financial statements include all adjustments (consisting of only normal recurring items) that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods presented. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year. Certain items included in the prior period financial statements were reclassified to conform to the current period presentation. There was no effect on net income or total stockholders’ equity.

Estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Segments:

The Company provides a broad range of financial services to individuals and companies in northeastern Ohio. Operations are managed and financial performance is primarily aggregated and reported in three lines of business, the Bank segment, the Trust segment and the Retirement Consulting segment.  

Comprehensive Income:

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income consists of unrealized gains and losses on securities available for sale and changes in the funded status of the post-retirement health plan, which are recognized as separate components of equity, net of tax effects. For the three month period ended March 31, 2015, there was no change in the funded status of the post-retirement health plan.

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Consolidated Balance Sheets (Parenthetical) (Unaudited)	Mar. 31, 2015	Dec. 31, 2014
Statement Of Financial Position [Abstract]
Common stock, shares authorized	35,000,000	35,000,000
Common stock, shares issued	19,031,059	19,031,059
Treasury stock, shares	622,447	622,447

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Fair Value

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value

Fair Value:

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Investment Securities: The Company uses a third party service to estimate fair value on available for sale securities on a monthly basis. This service provider is considered a leading evaluation pricing service for U.S. domestic fixed income securities. They subscribe to multiple third-party pricing vendors, and supplement that information with matrix pricing methods. The fair values for investment securities are determined by quoted market prices in active markets, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on quoted prices for similar assets in active markets, quoted prices for similar assets in markets that are not active or inputs other than quoted prices, which provide a reasonable basis for fair value determination. Such inputs may include interest rates and yield curves, volatilities, prepayment speeds, credit risks and default rates. Inputs used are derived principally from observable market data (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). The fair values of Level 3 investment securities are determined by using unobservable inputs to measure fair value of assets for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based on the best information at the time, to the extent that inputs are available without undue cost and effort. For the period ended March 31, 2015 and for the year ended December 31, 2014, the fair value of Level 3 investment securities was immaterial.

Derivative Instruments: The fair values of derivative instruments are based on valuation models using observable market data as of the measurement date (Level 2).

Impaired Loans: At the time loans are considered impaired, collateral dependent impaired loans are valued at the lower of cost or fair value and non-collateral dependent loans are valued based on discounted cash flows. Impaired loans carried at fair value generally receive specific allocations of the allowance for loan losses. For collateral dependent loans fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Other Real Estate Owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair values are commonly based on recent real estate appraisals. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial and commercial real estate properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Appraisal Department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. On an annual basis, the Company compares the actual selling price of collateral that has been sold to the most recent appraised value to determine what adjustments should be made to appraisals to arrive at fair value.

Assets measured at fair value on a recurring basis, including financial assets for which the Company has elected the fair value option, are summarized below:

	Fair Value Measurements at March 31, 2015 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government    sponsored entities	$	19,206	$	0	$	19,206	$	0
State and political subdivisions		95,578		0		95,578		0
Corporate bonds		941		0		941		0
Mortgage-backed securities-residential		218,304		0		218,295		9
Collateralized mortgage obligations		14,365		0		14,365		0
Small Business Administration		21,283		0		21,283		0
Equity securities		242		242		0		0
Total investment securities	$	369,919	$	242	$	369,668	$	9
Yield maintenance provisions	$	1,012	$	0	$	1,012	$	0
Financial Liabilities
Interest rate swaps	$	1,012	$	0	$	1,012	$	0

	Fair Value Measurements at December 31, 2014 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government    sponsored entities	$	24,821	$	0	$	24,821	$	0
State and political subdivisions		91,881		0		91,881		0
Corporate bonds		931		0		931		0
Mortgage-backed securities-residential		224,362		0		224,352		10
Collateralized mortgage obligations		25,175		0		25,175		0
Small Business Administration		22,419		0		22,419		0
Equity securities		240		240		0		0
Total investment securities	$	389,829	$	240	$	389,579	$	10
Yield maintenance provisions	$	638	$	0	$	638	$	0
Financial Liabilities
Interest rate swaps	$	638	$	0	$	638	$	0

There were no significant transfers between Level 1 and Level 2 during the three month periods ended March 31, 2015 and 2014.

The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Investment Securities Available-for-sale (Level 3)
(In Thousands of Dollars)	Three Months ended March 31,
	2015			2014
Beginning Balance	$	10		$	10
Total unrealized gains or losses:
Included in other comprehensive income		0			0
Repayments		(1	)		0
Transfers in and/or out of Level 3		0			0
Ending Balance	$	9		$	10

Assets measured at fair value on a non-recurring basis are summarized below:

	Fair Value Measurements at March 31, 2015 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial real estate
Owner occupied	$	668	$	0	$	0	$	668
Commercial		373		0		0		373
1–4 family residential		266		0		0		266

	Fair Value Measurements at December 31, 2014 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial	$	807	$	0	$	0	$	807
1–4 family residential		63		0		0		63
Other real estate owned
Commercial real estate		45		0		0		45

Impaired loans that are measured for impairment using the fair value of the collateral for collateral dependent loans, had a principal balance of $451 thousand with a valuation allowance of $42 thousand at March 31, 2015, resulting in an additional provision for loan losses of $215 thousand for the three month period. At December 31, 2014, impaired loans had a principal balance of $988 thousand, with a valuation allowance of $117 thousand. Loans measured at fair value during the three months ended March 31, 2014 resulted in no additional provision for loan losses  Excluded from the fair value of impaired loans, at March 31, 2015 and December 31, 2014, discussed above are $4.1 million and $4.2 million of loans classified as troubled debt restructurings and measured using the present value of cash flows, which are not carried at fair value.

Impaired commercial real estate loans, both owner occupied and non-owner occupied are valued by independent external appraisals. These external appraisals are prepared using the sales comparison approach and income approach valuation techniques. Management makes subsequent unobservable adjustments to the impaired loan appraisals. Impaired loans other than commercial real estate and other real estate owned are not considered material.

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at period ended March 31, 2015 and December 31, 2014:

March 31, 2015	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial real estate	$	668	Quoted price for loan relationship	Adjustment for differences between earning multiplier	-41.21% (-41.21%)
Commercial		230	Quoted price for loan relationship	Adjustment for differences between earning multiplier	-39.80% (-39.80%)
Commercial		143	Sales comparison	Adjustment for differences between comparable sales	-27.43% - 32.86% (23.48%)
Residential		266	Sales comparison	Adjustment for differences between comparable sales	-26.81% - 28.82% (9.45%)

December 31, 2014	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial	$	807	Sales comparison	Adjustment for differences between comparable sales	-27.43% - 32.86% (9.96%)
Residential		63	Sales comparison	Adjustment for differences between comparable sales	-18.32% - 24.16% (-14.02%)
Other real estate owned		45	Sales comparison	Adjustment for differences between comparable sales	-12.86% - 11.97% (-5.79%)

The carrying amounts and estimated fair values of financial instruments not previously disclosed at March 31, 2015 and December 31, 2014 are as follows:

			Fair Value Measurements at March 31, 2015 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	26,929	$	11,800	$	15,129	$	0	$	26,929
Restricted stock		4,224	n/a		n/a		n/a		n/a
Loans held for sale		146		0		150		0		150
Loans, net		666,061		0		0		668,763		668,763
Accrued interest receivable		3,583		0		1,822		1,761		3,583
Financial liabilities
Deposits		909,408		712,362		197,029		0		909,391
Short-term borrowings		62,218		0		62,218		0		62,218
Long-term borrowings		18,120		0		18,612		0		18,612
Accrued interest payable		379		2		377		0		379

			Fair Value Measurements at December 31, 2014 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	27,428	$	11,410	$	16,018	$	0	$	27,428
Restricted stock		4,224	n/a		n/a		n/a		n/a
Loans held for sale		511		0		523		0		523
Loans, net		656,220		0		0		658,993		658,993
Accrued interest receivable		3,237		0		1,645		1,592		3,237
Financial liabilities
Deposits		915,703		708,752		206,708		0		915,460
Short-term borrowings		59,136		0		59,136		0		59,136
Long-term borrowings		28,381		0		28,837		0		28,837
Accrued interest payable		402		2		400		0		402

The methods and assumptions used to estimate fair value, not previously described, are described as follows:

Cash and Cash Equivalents: The carrying amounts of cash and short-term instruments approximate fair values and are classified as either Level 1 or Level 2. The Company has determined that cash on hand and non-interest bearing due from bank accounts are Level 1 whereas interest bearing federal funds sold and other are Level 2.

Restricted Stock: It is not practical to determine the fair value of restricted stock due to restrictions placed on its transferability.

Loans: Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

Loans held for sale: The fair value of loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification.

Accrued Interest Receivable/Payable: The carrying amounts of accrued interest receivable and payable approximate fair value resulting in a Level 1, Level 2 or Level 3 classification. The classification is the result of the association with securities, loans and deposits.

Deposits: The fair values disclosed for demand deposits – interest and non-interest checking, passbook savings, and money market accounts – are, by definition, equal to the amount payable on demand at the reporting date resulting in a Level 1 classification. The carrying amounts of variable rate certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair value for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

Short-term Borrowings: The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification.

Long-term Borrowings: The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Off-balance Sheet Instruments: The fair value of commitments is not considered material.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	Apr. 30, 2015
Document And Entity Information [Abstract]
Entity Registrant Name	FARMERS NATIONAL BANC CORP /OH/
Entity Central Index Key	0000709337
Document Type	10-Q
Trading Symbol	FMNB
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		18,408,612

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Segment Information

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information:

The reportable segments are determined by the products and services offered, primarily distinguished between banking, trust and retirement consulting operations. They are also distinguished by the level of information provided to the chief operating decision makers in the Company, who use such information to review performance of various components of the business, which are then aggregated. Loans, investments, and deposits provide the revenues in the banking operation. All operations are domestic.

Significant segment totals are reconciled to the financial statements as follows:

(In Thousands of Dollars)	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others		Consolidated Totals
March 31, 2015
Goodwill and other intangibles	$	5,206	$	0	$	3,440	$	0	$	8,646
Total assets	$	11,257	$	1,117,357	$	4,433	$	604	$	1,133,651

(In Thousands of Dollars)	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others		Consolidated Totals
December 31, 2014
Goodwill and other intangibles	$	5,285	$	0	$	3,528	$	0	$	8,813
Total assets	$	10,643	$	1,121,505	$	4,356	$	463	$	1,136,967

(In Thousands of Dollars)	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended March 31, 2015
Net interest income	$	15	$	8,980	$	0	$	(3	)	$	8,992
Provision for loan losses		0		450		0		0			450
Service fees, security gains and other noninterest income		1,672		1,927		503		(65	)		4,037
Noninterest expense		1,196		7,358		335		395			9,284
Amortization and depreciation expense		85		292		90		0			467
Income (loss) before taxes		406		2,807		78		(463	)		2,828
Income taxes		138		609		27		(157	)		617
Net Income (Loss)	$	268	$	2,198	$	51	$	(306	)	$	2,211

(In Thousands of Dollars)	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
For Three Months Ended March 31, 2014
Net interest income	$	12	$	8,848	$	0	$	(4	)	$	8,856
Provision for loan losses		0		330		0		0			330
Service fees, security gains and other    noninterest income		1,517		1,538		443		(65	)		3,433
Noninterest expense		1,092		6,965		312		274			8,643
Amortization and depreciation expense		95		298		105		0			498
Income before taxes		342		2,793		26		(343	)		2,818
Income taxes		118		617		9		(117	)		627
Net Income	$	224	$	2,176	$	17	$	(226	)	$	2,191

The Bank segment includes Farmers National Insurance and Farmers of Canfield Investment Co.

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Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
INTEREST AND DIVIDEND INCOME
Loans, including fees	$ 7,684	$ 7,484
Taxable securities	1,647	1,871
Tax exempt securities	615	656
Dividends	48	47
Federal funds sold and other interest income	5	5
TOTAL INTEREST AND DIVIDEND INCOME	9,999	10,063
INTEREST EXPENSE
Deposits	887	1,061
Short-term borrowings	11	11
Long-term borrowings	109	135
TOTAL INTEREST EXPENSE	1,007	1,207
NET INTEREST INCOME	8,992	8,856
Provision for loan losses	450	330
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	8,542	8,526
NONINTEREST INCOME
Service charges on deposit accounts	603	590
Bank owned life insurance income	139	107
Trust fees	1,647	1,497
Insurance agency commissions	146	95
Security gains	10	0
Retirement plan consulting fees	504	364
Investment commissions	298	194
Net gains on sale of loans	123	65
Other operating income	567	521
TOTAL NONINTEREST INCOME	4,037	3,433
NONINTEREST EXPENSES
Salaries and employee benefits	5,542	5,022
Occupancy and equipment	1,111	1,153
State and local taxes	245	233
Professional fees	476	592
Merger related cost	245	0
Advertising	217	203
FDIC insurance	177	184
Intangible amortization	167	192
Core processing charges	381	361
Other operating expenses	1,190	1,201
TOTAL NONINTEREST EXPENSES	9,751	9,141
INCOME BEFORE INCOME TAXES	2,828	2,818
INCOME TAXES	617	627
NET INCOME	$ 2,211	$ 2,191
EARNINGS PER SHARE - basic and diluted	$ 0.12	$ 0.12

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Interest-Rate Swaps

3 Months Ended

Mar. 31, 2015

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Interest-Rate Swaps

Interest-Rate Swaps:

The Company uses a program that utilizes interest-rate swaps as part of its asset/liability management strategy. The interest-rate swaps are used to help manage the Company’s interest rate risk position and not as derivatives for trading purposes. The notional amount of the interest-rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest-rate swap agreements.

The objective of the interest-rate swaps is to protect the related fixed rate commercial real estate loans from changes in fair value due to changes in interest rates. The Company has a program whereby it lends to its borrowers at a fixed rate with the loan agreement containing a two-way yield maintenance provision, which will be invoked in the event of prepayment of the loan, and is expected to exactly offset the fair value of unwinding the swap. The yield maintenance provision represents an embedded derivative which is bifurcated from the host loan contract and, as such, the swaps and embedded derivatives are not designated as hedges. Accordingly, both instruments are carried at fair value and changes in fair value are reported in current period earnings.

Summary information about these interest-rate swaps at periods ended March 31, 2015 and December 31, 2014 is as follows:

	March 31, 2015			December 31, 2014
Notional amounts (In thousands)	$	33,292		$	31,459
Weighted average pay rate on interest-rate swaps		4.27	%		4.26	%
Weighted average receive rate on interest-rate swaps		2.65	%		2.67	%
Weighted average maturity (years)		6.0			5.9
Fair value of combined interest-rate swaps (In thousands)	$	1,012		$	638

The fair value of the yield maintenance provisions and interest-rate swaps is recorded in other assets and other liabilities, respectively, in the consolidated balance sheets. Changes in the fair value of the yield maintenance provisions and interest-rate swaps are reported in earnings, as other noninterest income in the consolidated statements of income. For the three month periods ended March 31, 2015 and 2014 there were no net gains or losses recognized in earnings.

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Credit Quality Indicators

3 Months Ended

Mar. 31, 2015

Risks And Uncertainties [Abstract]

Credit Quality Indicators

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company establishes a risk rating at origination for all commercial loan and commercial real estate relationships. For relationships over $750 thousand, management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt. Management also affirms the risk ratings for the loans and leases in their respective portfolios on an annual basis. The Company uses the following definitions for risk ratings:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Substandard loans are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

As of March 31, 2015 and December 31, 2014, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Doubtful		Not Rated		Total
March 31, 2015
Commercial real estate
Owner occupied	$	70,516	$	1,022	$	5,967	$	0	$	0	$	77,505
Non-owner occupied		121,781		487		2,661		0		0		124,929
Other		28,572		0		314		0		0		28,886
Commercial		118,227		1,519		2,677		0		0		122,423
Total	$	339,096	$	3,028	$	11,619	$	0	$	0	$	353,743

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Doubtful		Not Rated		Total
December 31, 2014
Commercial real estate
Owner occupied	$	66,036	$	2,534	$	6,061	$	0	$	0	$	74,631
Non-owner occupied		115,159		3,760		2,994		0		0		121,913
Other		25,710		0		319		0		0		26,029
Commercial		114,409		1,566		4,175		0		0		120,150
Total	$	321,314	$	7,860	$	13,549	$	0	$	0	$	342,723

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential, consumer indirect and direct loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.

The following table presents the recorded investment in residential, consumer indirect and direct auto loans based on payment activity as of March 31, 2015 and December 31, 2014. Nonperforming loans are loans past due 90 days or more and still accruing interest and nonaccrual loans.

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
March 31, 2015
Performing	$	150,388	$	32,062	$	121,379	$	8,856	$	3,547
Nonperforming		3,235		249		288		32		5
Total	$	153,623	$	32,311	$	121,667	$	8,888	$	3,552

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
December 31, 2014
Performing	$	149,661	$	31,076	$	124,296	$	9,035	$	3,625
Nonperforming		2,937		179		283		36		1
Total	$	152,598	$	31,255	$	124,579	$	9,071	$	3,626

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Troubled Debt Restructurings (Tables)

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Schedule of Loans By Class Modified as Troubled Debt Restructurings

The following table presents loans by class modified as troubled debt restructurings that occurred during the three month periods ended March 31, 2015 and 2014:

			Pre-Modification		Post-Modification
Three Months Ended March 31, 2015	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Troubled Debt Restructurings:
Commercial		1	$	8	$	8
Residential real estate
1-4 family residential		3		354		354
Home equity lines of credit		1		50		50
Indirect		2		36		36
Total		7	$	448	$	448

			Pre-Modification		Post-Modification
Three Months Ended March 31, 2014	Number of		OutstandingRecorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Troubled Debt Restructurings:
Non-owner occupied		1	$	35	$	35
Residential real estate
1-4 family residential		9		393		394
Home equity lines of credit		2		52		52
Total		12	$	480	$	481

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Business Acquisitions

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Business Acquisitions

Business Acquisitions:

On January 27, 2015, the Company announced that it had entered into an Agreement and Plan of Merger (the “Merger Agreement”) with National Bancshares Corporation (“National Bancshares”), the parent company of First National Bank of Orrville (“First National Bank”), pursuant to which National Bancshares will merge with and into the Company (the “Merger”).  Promptly following consummation of the Merger, it is expected that First National Bank will merge with and into the Bank. At the completion of the Merger, First National Bank of Orrville branches will become branches of Farmers National Bank of Canfield.  Pursuant to the Agreement, each shareholder of National Bancshares will be entitled to elect to receive either $32.15 per share in cash or 4.034 shares of Farmers’ common stock, subject to an overall limitation of 80% of the shares of National Bancshares being exchanged for stock and 20% for cash.  Based on Farmers’ volume weighted average stock price over the last 20 trading days of $7.97, as of January 26, 2015, the transaction is valued at approximately $74.0 million.  The merger is expected to qualify as a tax-free reorganization for those shareholders electing to receive Farmers’ stock.  The transaction is subject to receipt of National Bancshares’ shareholder approval, Farmers’ shareholder approval and customary regulatory approvals.  The Company expects the transaction to close in the first half of 2015.

On July 1, 2013, the Company completed the acquisition of all outstanding stock of the retirement planning consultancy National Associates, Inc. (“NAI”) of Rocky River, Ohio. The transaction involved both cash and stock totaling $4.4 million, including up to $1.5 million of future cash payments contingent upon NAI meeting income performance targets based on growth in EBITDA. The measurement period is defined, in essence, as “the twelve month period ending on the second anniversary of the closing date.” Based upon the closing date of July 1, 2013, the payment is due within five business days of final determination of the amount of the payment based upon EBITDA from August 1, 2014, to July 31, 2015. The payment is tiered as follows:

i) If the calculated growth percentage of EBITDA is equal to or less than the base percentage (6.00%), the payment will be $0;

ii) If the calculated growth percentage of EBITDA is greater than or equal to the maximum percentage (12.00%), the payment will be $1.5 million; and

iii) If the calculated growth percentage of EBITDA is between the base and maximum percentages, a factor of the growth is interpolated and multiplied by the maximum $1.5 million payment.

The acquisition-date fair value of contingent consideration was estimated to be $920,000 and was recorded in other liabilities on the consolidated balance sheet. In the third quarter of 2014, management determined it was no longer probable that amount would be paid and reduced the liability through a reduction of other expense by $764,000, the same amount as goodwill impairment expense recorded in the same line.  As a result, the liability for contingent consideration included in other liabilities totaled $156,000 at March 31, 2015 and December 31, 2014.  The continent consideration and related liability will be settled in the third quarter of 2015.

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Other Comprehensive Income

3 Months Ended

Mar. 31, 2015

Comprehensive Income Net Of Tax [Abstract]

Other Comprehensive Income

Other Comprehensive Income:

The following table represents the detail of other comprehensive income for the three month periods ended March 31, 2015 and 2014.

	Three Months Ended March 31, 2015
(In Thousands of Dollars)	Pre-tax			Tax			After-Tax
Unrealized holding gains on available-for-sale securities during the    period	$	2,310		$	(808	)	$	1,502
Reclassification adjustment for (gains) losses included in net    income (1)		(10	)		2			(8	)
Net unrealized gains on available-for-sale securities	$	2,300		$	(806	)	$	1,494

	Three Months Ended March 31, 2014
(In Thousands of Dollars)	Pre-tax		Tax			After-Tax
Unrealized holding losses on available-for-sale securities during the    period	$	4,087	$	(1,432	)	$	2,655
Reclassification adjustment for (gains) losses included in net    income (1)		0		0			0
Net unrealized losses on available-for-sale securities	$	4,087	$	(1,432	)	$	2,655

(1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in security gains and the tax impact is included in income tax expense on the consolidated statements of income.

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Fair Value (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fair value assets measured on non-recurring basis
Recorded Investment	$ 11,876	$ 12,597
Commercial real estate, Owner occupied | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment	668
Commercial real estate, Owner occupied | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment	0
Commercial real estate, Owner occupied | Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment	0
Commercial real estate, Owner occupied | Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment	668
Commercial | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment	373	807
Commercial | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment	0	0
Commercial | Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment	0	0
Commercial | Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment	373	807
Residential real estate loan | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment	266	63
Residential real estate loan | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment	0	0
Residential real estate loan | Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment	0	0
Residential real estate loan | Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment	266	63
Other real estate owned, Commercial real estate | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment		45
Other real estate owned, Commercial real estate | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment		0
Other real estate owned, Commercial real estate | Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment		0
Other real estate owned, Commercial real estate | Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Nonrecurring
Fair value assets measured on non-recurring basis
Recorded Investment		$ 45

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Earnings Per Share

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share:

The computation of basic and diluted earnings per share is shown in the following table:

	Three Months Ended March 31,
	2015		2014
Basic EPS
Net income (In thousands)	$	2,211	$	2,191
Weighted average shares outstanding		18,427,901		18,779,091
Basic earnings per share	$	0.12	$	0.12
Diluted EPS
Net income (In thousands)	$	2,211	$	2,191
Weighted average shares out-standing for basic    earnings per share		18,427,901		18,779,091
Dilutive effect of restricted stock awards		1,408		0
Weighted average shares for diluted earnings per share		18,429,309		18,779,091
Diluted earnings per share	$	0.12	$	0.12

There were no restricted stock awards that were considered anti-dilutive for the three month periods ended March 31, 2015 or 2014.

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Stock Based Compensation

3 Months Ended

Mar. 31, 2015

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Based Compensation

Stock Based Compensation:

During 2012, the Company, with the approval of shareholders, created the 2012 Equity Incentive Plan (the “Plan”). The Plan permits the award of up to 500 thousand shares to the Company’s directors and employees to promote the Company’s long-term financial success by motivating performance through long-term incentive compensation and to better align the interests of its employees with those of its shareholders.  There were 80,918 additional net shares awarded under the Plan during February 2015. Expense recognized for the Plan was $58 thousand for the three month period ended March 31, 2015.  As of March 31, 2015, there was $803 thousand of total unrecognized compensation expense related to the nonvested shares granted under the Plan.  The remaining cost is expected to be recognized over 2.9 years. There were 46,957 shares awarded and $29 thousand of expense recognized for the Plan for the three month period ended March 31, 2014.  

The following is the activity under the Plan during the three months ended March 31, 2015:

	Restricted Stock Units
	Units			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015		46,957		$	7.39
Granted		85,918			7.88
Vested		0			0
Forfeited		(5,000	)		7.88
Nonvested at March 31, 2015		127,875		$	7.70

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Regulatory Capital Matters

3 Months Ended

Mar. 31, 2015

Regulatory Capital Requirements [Abstract]

Regulatory Capital Matters

Regulatory Capital Matters

Banks and bank holding companies are subject to various regulatory capital requirements administered by the federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action by regulators that, if undertaken, could have a direct material effect on the financial statements. Management believes as of March 31, 2015, the Company and Bank meet all capital adequacy requirements to which they are subject.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If only adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At March 31, 2015 and December 31, 2014, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

Actual and required capital amounts and ratios are presented below at year-end:

	Actual					Requirement For Capital Adequacy Purposes:					To be Well Capitalized Under Prompt Corrective Action Provisions:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2015
Common equity tier 1 capital ratio
Consolidated	$	117,890		15.03	%	$	35,291		4.50	%	N/A		N/A
Bank		107,914		13.85	%		35,071		4.50	%	$	50,659		6.50	%
Total risk based capital ratio
Consolidated		125,667		16.02	%		62,740		8.00	%	N/A		N/A
Bank		115,637		14.84	%		62,349		8.00	%		77,936		10.00	%
Tier 1 risk based capital ratio
Consolidated		117,890		15.03	%		47,055		6.00	%	N/A		N/A
Bank		107,914		13.85	%		46,762		6.00	%		62,349		8.00	%
Tier 1 leverage ratio
Consolidated		117,890		10.44	%		45,152		4.00	%	N/A		N/A
Bank		107,914		9.38	%		46,032		4.00	%		57,540		5.00	%
December 31, 2014
Total Capital to risk weighted assets
Consolidated	$	121,340		16.48	%	$	58,523		8.00	%	N/A		N/A
Bank		114,321		15.56	%		58,773		8.00	%	$	73,466		10.00	%
Tier 1 Capital to risk weighted assets
Consolidated		113,654		15.43	%		29,262		4.00	%	N/A		N/A
Bank		106,689		14.52	%		29,386		4.00	%		44,079		6.00	%
Tier 1 Capital to average assets
Consolidated		113,654		10.03	%		45,313		4.00	%	N/A		N/A
Bank		106,689		9.37	%		45,565		4.00	%		56,956		5.00	%

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Segment Reporting Information [Line Items]
Goodwill and other intangibles	$ 8,646		$ 8,813
Total assets	1,133,651		1,136,967
Net interest income	8,992	8,856
Provision for loan losses	450	330
Service fees, security gains and other noninterest income	4,037	3,433
Noninterest expense	9,284	8,643
Amortization and depreciation expense	467	498
INCOME BEFORE INCOME TAXES	2,828	2,818
Income taxes	617	627
NET INCOME	2,211	2,191
Eliminations And Others
Segment Reporting Information [Line Items]
Goodwill and other intangibles	0		0
Total assets	604		463
Net interest income	(3)	(4)
Provision for loan losses	0	0
Service fees, security gains and other noninterest income	(65)	(65)
Noninterest expense	395	274
Amortization and depreciation expense	0	0
INCOME BEFORE INCOME TAXES	(463)	(343)
Income taxes	(157)	(117)
NET INCOME	(306)	(226)
Trust Segment | Operating Segments
Segment Reporting Information [Line Items]
Goodwill and other intangibles	5,206		5,285
Total assets	11,257		10,643
Net interest income	15	12
Provision for loan losses	0	0
Service fees, security gains and other noninterest income	1,672	1,517
Noninterest expense	1,196	1,092
Amortization and depreciation expense	85	95
INCOME BEFORE INCOME TAXES	406	342
Income taxes	138	118
NET INCOME	268	224
Bank Segment | Operating Segments
Segment Reporting Information [Line Items]
Goodwill and other intangibles	0		0
Total assets	1,117,357		1,121,505
Net interest income	8,980	8,848
Provision for loan losses	450	330
Service fees, security gains and other noninterest income	1,927	1,538
Noninterest expense	7,358	6,965
Amortization and depreciation expense	292	298
INCOME BEFORE INCOME TAXES	2,807	2,793
Income taxes	609	617
NET INCOME	2,198	2,176
Retirement Consulting Segment | Operating Segments
Segment Reporting Information [Line Items]
Goodwill and other intangibles	3,440		3,528
Total assets	4,433		4,356
Net interest income	0	0
Provision for loan losses	0	0
Service fees, security gains and other noninterest income	503	443
Noninterest expense	335	312
Amortization and depreciation expense	90	105
INCOME BEFORE INCOME TAXES	78	26
Income taxes	27	9
NET INCOME	$ 51	$ 17

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Fair Value (Details 4) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Financial assets
Cash and cash equivalents, Carrying Amount	$ 26,929	$ 27,428	$ 29,333	$ 27,513
Restricted stock, Carrying Amount	4,224	4,224
Loans held for sale, Carrying Amount	146	511
Loans, net, Carrying Amount	666,061	656,220
Accrued interest receivable, Carrying Amount	3,583	3,237
Financial liabilities
Deposits, Carrying Amount	909,408	915,703
Short-term borrowings, Carrying Amount	62,218	59,136
Long-term borrowings	18,120	28,381
Accrued interest payable, Carrying Amount	379	402
Fair Value, Measurements, Recurring
Financial assets
Cash and cash equivalents, Fair Value	26,929	27,428
Loans held for sale, Fair Value	150	523
Loans, net, Fair Value	668,763	658,993
Accrued interest receivable, Fair Value	3,583	3,237
Financial liabilities
Deposits, Fair Value	909,391	915,460
Short-term borrowings, Fair Value	62,218	59,136
Long-term borrowings, Fair Value	18,612	28,837
Accrued interest payable, Fair value	379	402
Fair Value, Measurements, Recurring | Level 1
Financial assets
Cash and cash equivalents, Fair Value	11,800	11,410
Loans held for sale, Fair Value	0	0
Loans, net, Fair Value	0	0
Accrued interest receivable, Fair Value	0	0
Financial liabilities
Deposits, Fair Value	712,362	708,752
Short-term borrowings, Fair Value	0	0
Long-term borrowings, Fair Value	0	0
Accrued interest payable, Fair value	2	2
Fair Value, Measurements, Recurring | Level 2
Financial assets
Cash and cash equivalents, Fair Value	15,129	16,018
Loans held for sale, Fair Value	150	523
Loans, net, Fair Value	0	0
Accrued interest receivable, Fair Value	1,822	1,645
Financial liabilities
Deposits, Fair Value	197,029	206,708
Short-term borrowings, Fair Value	62,218	59,136
Long-term borrowings, Fair Value	18,612	28,837
Accrued interest payable, Fair value	377	400
Fair Value, Measurements, Recurring | Level 3
Financial assets
Cash and cash equivalents, Fair Value	0	0
Loans held for sale, Fair Value	0	0
Loans, net, Fair Value	668,763	658,993
Accrued interest receivable, Fair Value	1,761	1,592
Financial liabilities
Deposits, Fair Value	0	0
Short-term borrowings, Fair Value	0	0
Long-term borrowings, Fair Value	0	0
Accrued interest payable, Fair value	$ 0	$ 0

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Securities (Details Textual) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 Securities	Mar. 31, 2014
Investments Debt And Equity Securities [Abstract]
Proceeds from sales of securities available for sale	$ 40,913	$ 9
Gross gains realized	73	0
Gross Losses realized	$ 63	$ 0
Number of securities	321
Number of securities on unrealized loss position	82

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Basic EPS
Net income	$ 2,211	$ 2,191
Weighted average shares outstanding	18,427,901	18,779,091
Basic earnings per share	$ 0.12	$ 0.12
Diluted EPS
Net income	$ 2,211	$ 2,191
Weighted average shares outstanding	18,427,901	18,779,091
Dilutive effect of restricted stock awards	1,408	0
Weighted average shares for diluted earnings per share	18,429,309	18,779,091
Diluted earnings per share	$ 0.12	$ 0.12

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Securities (Tables)

3 Months Ended

Mar. 31, 2015

Investments Debt And Equity Securities [Abstract]

Summary of the Amortized Cost and Fair Value of Available-for-Sale Investment Securities Corresponding Amounts of Unrealized Gains and Losses

The following table summarizes the amortized cost and fair value of the available-for-sale investment securities portfolio at March 31, 2015 and December 31, 2014 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income:

			Gross		Gross
(In Thousands of Dollars)	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
March 31, 2015
U.S. Treasury and U.S. government sponsored entities	$	18,812	$	401	$	(7	)	$	19,206
State and political subdivisions		94,081		1,890		(393	)		95,578
Corporate bonds		935		9		(3	)		941
Mortgage-backed securities - residential		215,561		3,431		(688	)		218,304
Collateralized mortgage obligations		14,872	0			(507	)		14,365
Small Business Administration		21,745		1		(463	)		21,283
Equity securities		121		123		(2	)		242
Totals	$	366,127	$	5,855	$	(2,063	)	$	369,919

			Gross		Gross
(In Thousands of Dollars)	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
December 31, 2014
U.S. Treasury and U.S. government sponsored entities	$	24,515	$	418	$	(112	)	$	24,821
State and political subdivisions		90,369		2,183		(671	)		91,881
Corporate bonds		936		3		(8	)		931
Mortgage-backed securities - residential		223,216		2,395		(1,249	)		224,362
Collateralized mortgage obligations		25,988		98		(911	)		25,175
Small Business Administration		23,193		1		(775	)		22,419
Equity securities		120		121		(1	)		240
Totals	$	388,337	$	5,219	$	(3,727	)	$	389,829

Amortized Cost and Fair Value of the Debt Securities Maturity

The amortized cost and fair value of the debt securities portfolio are shown by expected maturity. Expected maturities may differ from contractual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	March 31, 2015
(In Thousands of Dollars)	Amortized Cost		Fair Value
Maturity
Within one year	$	11,824	$	11,931
One to five years		53,858		54,858
Five to ten years		32,934		33,692
Beyond ten years		15,212		15,244
Mortgage-backed, collateralized mortgage obligations and Small Business Administration securities		252,178		253,952
Total	$	366,006	$	369,677

Investment Securities with Unrealized Losses

The following table summarizes the investment securities with unrealized losses at March 31, 2015 and December 31, 2014, aggregated by major security type and length of time in a continuous unrealized loss position.

	Less than 12 Months					12 Months or Longer					Total
(In Thousands of Dollars)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
March 31, 2015
Available-for-sale
U.S. Treasury and U.S. government sponsored entities	$	0	$	0		$	5,202	$	(7	)	$	5,202	$	(7	)
State and political subdivisions		4,619		(29	)		16,437		(364	)		21,056		(393	)
Corporate bonds		0		0			480		(3	)		480		(3	)
Mortgage-backed securities - residential		14,859		(105	)		47,348		(583	)		62,207		(688	)
Collateralized mortgage obligations		0		0			14,365		(507	)		14,365		(507	)
Small Business Administration		0		0			21,188		(463	)		21,188		(463	)
Equity securities		23		(2	)		0		0			23		(2	)
Total	$	19,501	$	(136	)	$	105,020	$	(1,927	)	$	124,521	$	(2,063	)

	Less than 12 Months					12 Months or Longer					Total
(In Thousands of Dollars)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
December 31, 2014
Available-for-sale
U.S. Treasury and U.S. government sponsored entities	$	498	$	(2	)	$	10,159	$	(110	)	$	10,657	$	(112	)
State and political subdivisions		987		(11	)		24,063		(660	)		25,050		(671	)
Corporate bonds		0		0			476		(8	)		476		(8	)
Mortgage-backed securities - residential		25,770		(202	)		55,576		(1,047	)		81,346		(1,249	)
Collateralized mortgage obligations		0		0			19,541		(911	)		19,541		(911	)
Small Business Administration		0		0			22,319		(775	)		22,319		(775	)
Equity securities		26		(1	)		0		0			26		(1	)
Total	$	27,281	$	(216	)	$	132,134	$	(3,511	)	$	159,415	$	(3,727	)

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

The computation of basic and diluted earnings per share is shown in the following table:

	Three Months Ended March 31,
	2015		2014
Basic EPS
Net income (In thousands)	$	2,211	$	2,191
Weighted average shares outstanding		18,427,901		18,779,091
Basic earnings per share	$	0.12	$	0.12
Diluted EPS
Net income (In thousands)	$	2,211	$	2,191
Weighted average shares out-standing for basic    earnings per share		18,427,901		18,779,091
Dilutive effect of restricted stock awards		1,408		0
Weighted average shares for diluted earnings per share		18,429,309		18,779,091
Diluted earnings per share	$	0.12	$	0.12

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Interest-Rate Swaps (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Summary information about interest-rate swaps
Weighted average pay rate on interest-rate swaps	4.27%	4.26%
Weighted average receive rate on interest-rate swaps	2.65%	2.67%
Weighted average maturity (years)	6 years	5 years 10 months 24 days
Fair value of combined interest-rate swaps	$ 1,012	$ 638
Interest rate swaps
Summary information about interest-rate swaps
Notional amounts	$ 33,292	$ 31,459

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Loans (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Financing Receivable Impaired [Line Items]
Average Recorded Investment, With no related allowance recorded	$ 5,628	$ 5,583
Average Recorded Investment, With an allowance recorded	6,597	6,167
Average Recorded Investment	12,225	11,750
Interest Income Recognized, With no related allowance recorded	66	26
Interest Income Recognized, With related allowance recorded	55	58
Interest Income Recognized	121	84
Commercial real estate, Owner occupied
Financing Receivable Impaired [Line Items]
Average Recorded Investment, With no related allowance recorded	2,311	2,575
Average Recorded Investment, With an allowance recorded	2,870	1,654
Interest Income Recognized, With no related allowance recorded	16	5
Interest Income Recognized, With related allowance recorded	24	25
Commercial real estate, Non-owner occupied
Financing Receivable Impaired [Line Items]
Average Recorded Investment, With no related allowance recorded	387	391
Average Recorded Investment, With an allowance recorded	1,537	1,586
Interest Income Recognized, With no related allowance recorded	6	0
Interest Income Recognized, With related allowance recorded	20	20
Commercial real estate, Other
Financing Receivable Impaired [Line Items]
Average Recorded Investment, With no related allowance recorded	0	0
Interest Income Recognized, With no related allowance recorded	0	0
Commercial
Financing Receivable Impaired [Line Items]
Average Recorded Investment, With no related allowance recorded	463	931
Average Recorded Investment, With an allowance recorded	1,117	1,391
Interest Income Recognized, With no related allowance recorded	6	5
Interest Income Recognized, With related allowance recorded	1	1
Residential real estate, 1-4 family residential
Financing Receivable Impaired [Line Items]
Average Recorded Investment, With no related allowance recorded	2,125	1,332
Average Recorded Investment, With an allowance recorded	983	1,390
Interest Income Recognized, With no related allowance recorded	31	14
Interest Income Recognized, With related allowance recorded	9	11
Residential real estate, Home equity lines of credit
Financing Receivable Impaired [Line Items]
Average Recorded Investment, With no related allowance recorded	251	115
Average Recorded Investment, With an allowance recorded	90	146
Interest Income Recognized, With no related allowance recorded	3	2
Interest Income Recognized, With related allowance recorded	1	1
Consumer
Financing Receivable Impaired [Line Items]
Average Recorded Investment, With no related allowance recorded	91	239
Average Recorded Investment, With an allowance recorded		0
Interest Income Recognized, With no related allowance recorded	4	0
Interest Income Recognized, With related allowance recorded	$ 0	$ 0

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Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Statement Of Income And Comprehensive Income [Abstract]
NET INCOME	$ 2,211		$ 2,191
Other comprehensive income:
Net unrealized holding gains on available for sale securities	2,310		4,087
Reclassification adjustment for (gains) losses realized in income	(10)	[1]	0	[1]
Net unrealized gains (losses) on available-for-sale securities, pre-tax	2,300		4,087
Income tax effect	(806)		(1,432)
Other comprehensive income, net of tax	1,494		2,655
TOTAL COMPREHENSIVE INCOME	$ 3,705		$ 4,846

[1] Pre-tax reclassification adjustments relating to available-for-sale securities are reported in security gains and the tax impact is included in income tax expense on the consolidated statements of income.

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Troubled Debt Restructurings

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Troubled Debt Restructurings

Troubled Debt Restructurings:

Total troubled debt restructurings were $8.2 million and $8.1 million at March 31, 2015 and December 31, 2014, respectively. The Company has allocated $247 thousand and $242 thousand of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of March 31, 2015 and December 31, 2014. There were $11 thousand and $25 thousand in commitments to lend additional amounts to borrowers with loans that were classified as troubled debt restructurings at March 31, 2015 and December 31, 2014.

During the three month periods ended March 31, 2015 and 2014, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a deferral of principal payments; or a legal concession.

Troubled debt restructuring modifications involved a reduction of the notes stated interest rate in the range of 0.87% and 2.75%. There were also extensions of the maturity dates on these and other troubled debt restructurings in the range of 9 months to 120 months.

The following table presents loans by class modified as troubled debt restructurings that occurred during the three month periods ended March 31, 2015 and 2014:

			Pre-Modification		Post-Modification
Three Months Ended March 31, 2015	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Troubled Debt Restructurings:
Commercial		1	$	8	$	8
Residential real estate
1-4 family residential		3		354		354
Home equity lines of credit		1		50		50
Indirect		2		36		36
Total		7	$	448	$	448

			Pre-Modification		Post-Modification
Three Months Ended March 31, 2014	Number of		OutstandingRecorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Troubled Debt Restructurings:
Non-owner occupied		1	$	35	$	35
Residential real estate
1-4 family residential		9		393		394
Home equity lines of credit		2		52		52
Total		12	$	480	$	481

There were $35 thousand in charge offs and a $33 thousand increase to the provision for loan losses during the three month period ended March 31, 2015, as a result of troubled debt restructurings.  There were no charge offs and a $26 thousand increase to the provision for loan losses during the three month period ended March 31, 2014.

There was one residential real estate loan for which there were payment defaults within twelve months following the modification of the troubled debt restructuring during the three month period ended March 31, 2015.  This loan was past due at March 31, 2015.  There was a $23 thousand provision to the loan losses as a result of this default during 2015.  A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

There were four indirect loans modified as troubled debt restructuring for which there were payments defaults within twelve months following the modification during the three month period ended March 31, 2014. Two of the four loans were past due at March 31, 2014.  There was one loan charged off during the three month period ended March 31, 2014.  There was a $1 thousand provision to the allowance for loan losses associated with these loans. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

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Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Assets measured at fair value on a recurring basis
Securities available for sale	$ 369,919	$ 389,829
Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	369,919	389,829
Yield maintenance provisions	1,012	638
Corporate bonds
Assets measured at fair value on a recurring basis
Securities available for sale	941	931
Corporate bonds | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	941	931
U.S. Treasury and U.S. government sponsored entities
Assets measured at fair value on a recurring basis
Securities available for sale	19,206	24,821
U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	19,206	24,821
State and political subdivisions
Assets measured at fair value on a recurring basis
Securities available for sale	95,578	91,881
State and political subdivisions | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	95,578	91,881
Mortgage-backed securities - residential
Assets measured at fair value on a recurring basis
Securities available for sale	218,304	224,362
Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	218,304	224,362
Collateralized mortgage obligations
Assets measured at fair value on a recurring basis
Securities available for sale	14,365	25,175
Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	14,365	25,175
Small Business Administration
Assets measured at fair value on a recurring basis
Securities available for sale	21,283	22,419
Small Business Administration | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	21,283	22,419
Equity securities
Assets measured at fair value on a recurring basis
Securities available for sale	242	240
Equity securities | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	242	240
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	242	240
Yield maintenance provisions	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate bonds | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | State and political subdivisions | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Small Business Administration | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	242	240
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	369,668	389,579
Yield maintenance provisions	1,012	638
Significant Other Observable Inputs (Level 2) | Corporate bonds | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	941	931
Significant Other Observable Inputs (Level 2) | U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	19,206	24,821
Significant Other Observable Inputs (Level 2) | State and political subdivisions | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	95,578	91,881
Significant Other Observable Inputs (Level 2) | Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	218,295	224,352
Significant Other Observable Inputs (Level 2) | Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	14,365	25,175
Significant Other Observable Inputs (Level 2) | Small Business Administration | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	21,283	22,419
Significant Other Observable Inputs (Level 2) | Equity securities | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	9	10
Yield maintenance provisions	0	0
Significant Unobservable Inputs (Level 3) | Corporate bonds | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | State and political subdivisions | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	9	10
Significant Unobservable Inputs (Level 3) | Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | Small Business Administration | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | Equity securities | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Securities available for sale	0	0
Interest rate swaps | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Derivative assets	1,012	638
Interest rate swaps | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Derivative assets	0	0
Interest rate swaps | Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Derivative assets	1,012	638
Interest rate swaps | Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis
Derivative assets	$ 0	$ 0

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Stock Based Compensation (Tables)

3 Months Ended

Mar. 31, 2015

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Option Plan

The following is the activity under the Plan during the three months ended March 31, 2015:

	Restricted Stock Units
	Units			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015		46,957		$	7.39
Granted		85,918			7.88
Vested		0			0
Forfeited		(5,000	)		7.88
Nonvested at March 31, 2015		127,875		$	7.70

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Loans (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Allowance for loan losses
Beginning balance	$ 7,632	$ 7,568
Provision for loan losses	450	330
Loans charged off	(618)	(836)
Recoveries	259	325
Ending balance	7,723	7,387
Commercial Real Estate
Allowance for loan losses
Beginning balance	2,676	2,752
Provision for loan losses	232	22
Loans charged off	(4)	(57)
Recoveries	13	34
Ending balance	2,917	2,751
Commercial
Allowance for loan losses
Beginning balance	1,420	1,219
Provision for loan losses	(70)	(162)
Loans charged off	0	0
Recoveries	1	8
Ending balance	1,351	1,065
Residential Real Estate
Allowance for loan losses
Beginning balance	1,689	1,964
Provision for loan losses	10	(228)
Loans charged off	(81)	(70)
Recoveries	22	15
Ending balance	1,640	1,681
Consumer
Allowance for loan losses
Beginning balance	1,663	1,419
Provision for loan losses	352	518
Loans charged off	(533)	(709)
Recoveries	223	268
Ending balance	1,705	1,496
Unallocated
Allowance for loan losses
Beginning balance	184	214
Provision for loan losses	(74)	180
Loans charged off	0	0
Recoveries	0	0
Ending balance	$ 110	$ 394

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation:

Farmers National Banc Corp. (“Company”) is a one-bank holding company registered under the Bank Holding Company Act of 1956, as amended. The Company provides full banking services through its nationally chartered subsidiary, The Farmers National Bank of Canfield (“Bank”). The Company provides trust services through its subsidiary, Farmers Trust Company (“Trust”), retirement consulting services through National Associates, Inc. (“NAI”) and insurance services through the Bank’s subsidiary, Farmers National Insurance (“Insurance”).  In addition to the Insurance subsidiary, the Bank has created Farmers of Canfield Investment Co. (“Investments”), with the primary purpose of investing in municipal securities. The consolidated financial statements include the accounts of the Company, the Bank and its subsidiaries, along with the Trust and NAI. All significant intercompany balances and transactions have been eliminated in the consolidation.

Basis of Presentation

Basis of Presentation:

The unaudited condensed consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2014 Annual Report to Shareholders included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The interim consolidated financial statements include all adjustments (consisting of only normal recurring items) that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods presented. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year. Certain items included in the prior period financial statements were reclassified to conform to the current period presentation. There was no effect on net income or total stockholders’ equity.

Estimates

Estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Segments

Segments:

The Company provides a broad range of financial services to individuals and companies in northeastern Ohio. Operations are managed and financial performance is primarily aggregated and reported in three lines of business, the Bank segment, the Trust segment and the Retirement Consulting segment.  

Comprehensive Income

Comprehensive Income:

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income consists of unrealized gains and losses on securities available for sale and changes in the funded status of the post-retirement health plan, which are recognized as separate components of equity, net of tax effects. For the three month period ended March 31, 2015, there was no change in the funded status of the post-retirement health plan.